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“investigate and consider means ... of improving transportation . subsequently went further in his suggested motor carrier control, recommending a thorough economic regulation which in substance was the legislation enacted. In the first place, entrance into the motor transportation field was governed by the requirement that for-hire carriers obtain Commission authorization for operation.37 In addition, the Commission was empowered to set common carriers' minimum as well as maximum individual and joint rates.38 The Commission could also set the bottom limit on contract carriers' charges. 39 And further, the Commission acquired powers to promote safety and to protect the interests of employees and shippers.40
After hearings, the Coordinator's proposed bill was reported favorably out of the Senate Committee on Interstate Commerce.41 Although the Report affirmed the theory of regulation, it somewhat complicated the test of public interest. It suggested that the bill would furnish:
"a system of coordinated transportation for the Nation which
dependable, and reasonable and free from unjust discrimination.":42 The bill did not survive the House Committee so easily. Its report appended the exemption which has since produced confusion in the Commission's regulatory program and considerable litigation in the courts.43 The original bill had provided only minor exemptions: among
36 Emergency Railroad Transportation Act, 1933, § 13, 48 Stat. 216 (1933), as continued, 49 Stat. 376 (1935). Termination of activity, 1939, noted 49 U.S.C. $$ 250-68 (1946).
37 § 206, 49 Stat. 551 (1935), as amended, 49 U.S.C. § 306 (Supp. 1952) (certificates of convenience and necessity for common carriers); $ 209, 49 Stat. 552 (1935), as amended, 49 U. S. C. $ 309 (Supp. 1952) (permits for contract carriers). The section did, however, contain a "grandfather clause.” Compare S. 1629, 74th Cong., Ist Sess. $$ 306, 309 (1935).
38 § 216(e), 49 Stat. 558 (1935), 49 U.S.C. § 316(3) (1946). Compare S. 1629, 74th Cong., 1st Sess. § 316(c) (1935).
39 § 21876), 49 Stat. 562 (1935), as amended, 54 Stat. 925 (1940), 49 U.S.C. § 318(b) (1946). Compare S. 1629, 74th Cong., 1st Sess. § 316(b) (1935).
40 § 204 (a) (1) - (3), 49 Stat. 546 (1935), as amended, 54 Stat. 922 (1940), 49 U.S.C. $ 304 (a) (1) - (3) (1946) (power to establish reasonable requirements as to employee standards and safety of operation and equipment of common, contract, and private carriers). § 215, 49 Stat. 557 (1935), 49 U.S.C. § 315 (1946) (rulemaking powers as to insurance required of common and contract carriers). Compare S. 1629, 74th Cong., Ist Sess. $$ 304 (a) (1), (2), 315 (1935) (Safety requirements inapplicable to private carriers; no employee control on any carrier).
41 Sen. Rep. No. 482, 74th Cong., Ist Sess. (1935). 42 Id. at 3.
43 H. R. Rep. No. 1645, 74th Cong., 1st Sess. (1935) from Committee on Interstate and Foreign Commerce.
them, school buses, taxicabs, hotel limousines, electrical trolleys, transportation intra-city or between contiguous cities, and casual or occasional for-hire transportation by non-professionals.44 The House Committee varied these exemptions to make them exclude regulation save as to safety and employee control and then to the favored list added the following:
“(8) motor vehicles used exclusively in carrying livestock or un
processed agricultural products .... This new provision was slightly changed on the House floor and subsequently accepted by the Senate.46 At present, the exemption stands in the following form (words subsequently amended out are in parentheses and italicized; words added by later amendments are capitalized) :47
Section 203 (b). Nothing in this chapter, except the provisions of Section 204 of the Act relative to qualifications and maximum hours of service of employees and safety of operation or standards of equipment shall be construed to include ... (6) motor vehicles used (exclusively) in carrying property consisting of ORDINARY 49 livestock, fish (including shell fish), or agricultural (INCLUDING HORTICULTURAL)50 commodities (not including manufactured products thereof), IF SUCH MOTOR VEHICLES ARE NOT USED IN CARRYING ANY OTHER PROPERTY, OR PASSENGERS, FOR COMPENSATION.51
44 S. 1629, 74th Cong., Ist Sess. § 303 (b) (1935).
46 79 Cong. Rec. 12279, 12460 (1935). As the bill had come down from the Senate, the Commission was given discretion to terminate exemption of transportation intra-city or between contiguous cities and casual for-hire transportation by non-professionals. S. 1629, 74th Cong., Ist Sess. § 303 (b) (6) and (7) (1935). The House Committee amendment had separated the eight exemptions for agricultural products from the two terminable exemptions by a semi-colon, H. R. Rep. No. 1645, 74th Cong., Ist Sess. 1 (1935), apparently indicating that agricultural exemption would not be terminable. But any doubts were removed during the House debate by placing the agricultural exemption ahead of the terminable exemptions and renumbering accordingly. 79 Cong. Rec. 12226 (1935). The shift has since been described as liberalizing the exemption. Sen. Rep. No. 1039, 82nd Cong., 1st Sess. 14 (1951).
47 Present citation is 49 Stat. 545-46 (1935), as amended, 49 U.S.C.A. § 303 (b) (6) (Supp. 1953). Other pertinent exemptions are § 203 (b) (4a), 49 Stat. 545 (1935), as amended, 54 Stat. 921 (1940), 49 U.S.C. § 303 (b) (4a) (1946), (exempting vehicles controlled and operated by a farmer when used in carrying his products or supplies, not a needless provision if § 203 (b) (6) exempts vehicles that carry nothing but agricultural commodities), § 203 (b) (5), 49 Stat. 545 (1935), as amended, 54 Stat. 921 (1940); 49 U.S.C. $ 303 (b) (5) (1946) (exempting vehicles controlled and operated by cooperatives, or federations of cooperatives with no greater powers, as defined under the Agricultural Marketing Act, 1929, as amended).
48 Removed with addition of last clause of subsection. 52 Stat. 1237 (1938). 49 Added at 54 Stat. 920 (1940). 50 Added at 66 Stat. 479 (1952). 51 Added at 52 Stat. 1237 (1938). See: note 48 supra.
Exemption from a statute designed to govern conduct by threat of punishment or by establishment of a regulatory body may fit the broad legislative purpose or it may, in some cases, prove an obstacle to the development of the desired state of affairs. If the legislative purpose of the Motor Carrier Act, 1935, was, as its preamble stated, the achievement of coordinated transportation through regulation, the exemptions of the proposed bill approved by the Senate Committee were in harmony with the provisions for enforcement. Since longdistance, heavy commercial trucking was in the main the kind of transportation the Act sought to control, incidental or purely local, though interstate, carriage was logically put beyond the Commission's responsibility. But the exemption appended in the House Committee and modified during debate would seem to fall within the class of exemptions which impede, rather than encourage, the development apparently desired by the legislature. Transportation of agricultural commodities and livestock over highways was neither a casual nor an essentially local matter. Nor was its volume insignificant. In 1932 the Commission had reported that more than one out of five trucks in the country was farmer-owned.52 And it had stated that truck transportation of livestock had the longest and largest record of total truck movement of any single commodity. From carrying five percent of the livestock to sixteen major markets in 1920, the trucking industry had moved up to nearly twenty-two percent in 1929.53 As to agricultural commodities, the railroads had especially cited their loss of fruit and vegetable transportation to the trucks, particularly in areas where market and producer were nearby.54 Carriage of dairy products and cotton had also been substantially diverted from the railroads, in some areas with resultant rate wars. 55 Thus with regard to size as well as character a particularly significant segment of the trucking development which had convinced the economists and legislators of the need for total regulation was the very truck movement left exempt.
It is common knowledge that farmers are important to Congress, and the legislative history of the Motor Carrier Act confirms such knowledge by reflecting the desires of some agricultural interests in the Section 203 (b) (6) exemption.56 In Committee and in the House
52 In 1929, there were 767,000 farmer-owned trucks. This figure constituted roughly 22% of the total number of trucks in 1930 (3,480,939). See: Coordination of Motor Transportation, 182 I.C.C. 263, 274 (1932).
53 Id. at 287.
56 Agricultural commodities wholesalers seemed not completely opposed to the proposed regulation while the producers mostly were against the bill. Hearings, supra note 14, at 267 (apple growers' opposition to regulation of contract carriers), 299 (approval by Potato Growers' Exchange, Denver, a cooperative), 384 (fresh fruit vegetable wholesalers' support), 484 (opposition by cotton warehousers and livestock shippers), 502 (opposition by cotton cooperatives), 510 (opposition of milk producers' cooperatives), 596 (opposition of Farmers' Union), 79 Cong. Rec. 12223 (1935) (letter from National Grange opposing bill read into House debate by Mr. Rankin of Mississippi).
debate many questions were raised which reflected such opposition. For example, the position of the farmer truck-owner who carries his neighbor's produce was raised, as was the problem of his return trip with fertilizer or seed.57 Such small, local trucking issues were par. ticularly important since the hearings and Commission investigations had brought out that the trucking industry was largely composed of many small units, often of farmer-owned trucks. And the Federal Coordinator had asserted that the legislation and regulation would tend to form fewer larger groups of truckers, and that some rates of controlled trucking might go up.58 The result was a fear of large trucking companies, mingled with an antipathy to railroad interests which became clear in the House debate, where the bill was attacked as primarily in the railroads' interest and against the farmers'. 59 In
sum, the farmer believed that local, independent, flexible and cheap truck transportation might no longer be available. But the exemption constitutes more than a concession to the farmer. The House Committee's wording—“unprocessed agricultural products”—was changed during debate to the present wording—"agricultural commodities (not including manufactured products thereof)”—for the purpose of making it clear that carriage of ginned cotton, cotton seed, and pasteurized milk would be exempt. 6o In the case of each of these products, the transportation would usually take place after the farmer had sold to a dealer or processor, at a time when higher transportation costs would probably be borne by the consumer or possibly the dealer, although a part of the savings from lower transportation costs of some processed commodities might ultimately reach the farmer through increased demand stimulated by lower consumer prices.61 And furthermore, during debate an amendment bringing fish and shellfish within the exemption was accepted without ques
The farmer alone, therefore, was not the cause of the compromise.
57 E.g., Hearings, supra note 14, at 86-87; 79 Cong. Rec. 12227 (1935).
58 Speaking to the American Trucking Associations, Inc., in the fall of 1934, Commissioner Eastman predicted: "Sound and well coordinated public regulation of transportation will not stifle the railroads or the trucks or the water lines or the air carriers. In your field it will make it less easy for any Tom, Dick or Harry to begin commercial operations with a truck on which he has paid down a few dollars and which is likely to be taken away from him and turned over to another victim at the time of the next installment. ... It will prevent the driving of rates down to a level for which there is no economic justification.” Eastman, Federal Regulation of Motor Trucks, 2 1.C.C. Prac. J. 54, 60 (1934). In the Senate hearings, Commissioner Eastman definitely expressed the hope that the Bill, if enacted, would “compel the raising of rates which are below a sound economic level.” Hearings, supra note 14, at 62.
59 Implications were often made that railroad interests supported the bill, as undoubtedly they did. See: 1.8., Hearings, supra note 14, at 59 (Commissioner Eastman's testimony); 79 Cong. Rec. 12217 (1935).
60 79 Cong. Rec. 12220 (1935). See: Determination of Exempted Agricultural Commodities, 52 M.C.C. 511, 516 (1951).
61 See: Determination of Exempted Agricultural Commodities, supra note 60, at 523-24.
62 70 Cong. Rec. 12220 (1935).
If the purpose of the exemption was not only to maintain local, independent, and cheap trucking available to the farmer, but also to serve some broader purpose, the words of the exemption itself are an inadequate guide. A rationale can perhaps best be stated apropos of the following questions on the House floor:
“MR. HOLMES. [W]e believe you will find that the minimum requirements we have set forth in these various sections will not in any way hamper ... the ... industry or deprive anybody of the right to be on the highway or create any undue burden. .
MR. GILLETTE. That being the case, what was the object in providing an exemption for carriers of livestock exclusively or farm products exclusively? Why not regulate that? What is the object of the exemption ?
MR. HOLMES. The object was to help the farmer and keep him out of any regulation whatsoever insofar as handling unprocessed agricultural products or livestock on the farm. As an individual owner he would be exempt anyway.
MR. GILLETTE. If regulatory measures were necessary, sought to be obtained in this bill, would it not be advisable to apply them to that class? Why would you exempt a man who is engaged exclusively in carrying livestock on some trips and other materials on other trips?
MR. HOLMES. The purpose of this exemption is that a man who may take a bag of beans ... on his truck cannot get exemption and then go into the general trucking business. ..."63
Mr. Gillette's question on the reason for limiting the exemption to exclusive transportation of exempt commodities was answered, but his basic question, the reason for exemption, remained unanswered. Its answer, which perhaps had to remain unstated, must have been that the legislators did not subscribe in whole to the theory of coordination through regulation advanced by the Commission and the Coordinator as the means of achieving the transportation system most in the public interest. Necessarily, the first implication of the broad exemption of Section 203 (b) (6) was that Congress believed that regulation of transportation of certain commodities, and not simply commodities moving from their prime agricultural producers, was not in the public interest. In this context, public interest may be taken to mean mostly cost of service immediately rendered. The second, and far more important implication of the exemption was either that Congress did not believe that regulation of all significant parts of interstate trucking was necessary to enable the Commission to work toward the stated goal of an economically sound transportation system, 64 or that Congress did not believe that the gap left by the exemption would substantially impede the Commission in moving toward such a goal.
63 Id. at 122 12-13.
64 "It is ... the policy of Congress to recognize and preserve the inherent advantages of, and foster sound economic conditions in, . . . [motor] transporta