return empty to his rural starting point.138 He is therefore prepared to allow the authorized carrier a percentage of his earnings in return for the privilege of carrying general commodities under his lessee's ICC authorization. 139 The Commission concluded that the trip lease reduces observance of safety regulations and public protection through insurance, and that the rate structure and regulatory pattern are undermined by the unregulated transportation.140

In short order, the rules were before the Supreme Court where the safety argument was accorded the humble status of "informed speculation. "141 Thus the argument for complete regulation was the only solid foundation for the rules, which had not, as stated below, raised the issue of the need for regulation of leasing but "the degree of regulation needed to eliminate the undesirable conditions and practices. ''142 The Court concluded that abolition of the trip lease in order to protect regulated truckers in their restricted routes and limited carriage was not unreasonable under the National Transportation Policy.148 As to the exemption itself the Court said:

"The exemption extends, by its own words, to carriage of agricultural products, and not to operations where the equipment is used to carry other property. . . . [N]othing in it implies protection of agricultural truckers' right to haul other property.

144

The opinion has been criticized first as tainted with the assumption that competition, even within the limits set by the ICC, is a self-evident evil, and second as reflecting a judicial surrender of the choice between competition and regulation to an administrative agency where the

138 The classic situation appeared in the Florida-New York run. Carriers of citrus fruits would return with general commodities under lease to authorized northern carriers who had inadequate equipment to undertake the run or who would themselves return empty from Florida. The ICC said that "clearly, this is not a healthy condition from the standpoint of regulation. The transportation of general commodities_should be performed by authorized carriers." Ex Parte MC-43, 52 M.C.C. 675, 716 (1951). Compare American Trucking Ass'ns v. United States, 344 U.S. 298, 330-32 (1953) (dissenting opinion).

139 "Gypsies" formed another pool of unauthorized owner-operators available to the authorized carriers. "Gypsies" would normally find a load of general commodities and then nominally lease themselves to the authorized carriers, allowing a percentage of their earnings in return for operating under the lessee's authorization. See: Ex Parte MC-43, 51 M.C.C. 461, 465 (1950). The statutory power of the ICC to prevent authorized carriers from augmenting their equipment through such rentals was an issue in American Trucking Ass'ns v. United States, supra note 138, not here discussed. It would appear that the finding of such power did not necessarily solve the problem of the § 203 (b) (6) carrier. 140 Ex Parte MC-43, 52 M.C.C. 675, 690, 716, 725 (1951).

141 American Trucking Ass'ns v. United States, 344 U.S. 298, 305 n.7 (1953). 142 Eastern Motor Express, Inc. v. United States, 103 F. Supp. 694, 700 (S.D. Ind. 1952). This case, along with American Trucking Ass'ns v. United States, 101 F. Supp. 710 (N.D. Ala. 1951), went from a statutory three-judge district court direct to the Supreme Court. Both lower courts had refused to enjoin the regulations. Meanwhile, four other suits were stayed.

143 American Trucking Ass'ns v. United States, 344 U.S. 298, 318 (1953). 144 Ibid.

statute is not clear.145 In the context of Section 203 (b) (6), the answer to the first argument is that the Commission could not, under its own rulings, limit the competition in any way. It had decided that habitual return-trip leasing combined with carriage of privileged commodities would not place the motor vehicle involved under its jurisdiction.146 Carrying either privileged commodities or general commodities under lease, its owner can undercut authorized carriers' rates where and when he chooses. The second criticism raises the same Commission self-limitation. The old lease rule antedates the decision in Service, and seems reasonable only if Service is limited by the Commission itself, the legislature or the highest court. If Service can one way or another be reduced to the proposition that full truck-load carriage of Section 203 (b) (6) commodities is subject to regulation only when such carriage is an integral part of a single operation affecting the rates and schedules of transportation of general commodities by the same operator, a complement of the proposition might be that a casual trip-lease effectively leaving the owner in control of the vehicle, the rate charged, and the route taken, would not vary the situation sufficiently to free the owner from regulation. To test the effect of transportation of general commodities by who has substantial control of the motor vehicle at the time of such transportation is not unreasonable when accompanied by a middle-ground rule as to the circumstances in which general transportation terminates the owner's right to exemption. Accompanied by liberal certificating principles, these suggested changes would actually better preserve competition than did the leasing rules approved by the Supreme Court. It may be supposed that a fair percentage of presently exempt carriers would be subjected to ICC control. Under their certificates, or through interchange they would continue to compete with their present competitors, and perhaps even their present lessees, although the competition would be subject to the minimum rate power of the Commission where the rates are deemed noncompensatory or otherwise unreasonable. Such a competitive situation would accommodate the principles of the Act in general and the exemption in particular.147

As earlier suggested, motor carrier regulation was intended to control competition with railroads so as to produce an efficient transportation system. Equalized control of rail-highway competition implies similar equalization among trucks. Both objectives are served by complete regulation of truck-owners whose operations consist largely of carrying general commodities at rates and over routes

145 Schwartz, Legal Restriction of Competition in the Regulated Industries: An Abdication of Judicial Responsibility, 67 Harv. L. Rev. 436, 459-60 (1954). 146 Newman Contract Carrier Application, 44 M.C.C. 190 (1944).

147 The competition would otherwise be uneven not only because one carrier may be subject to ICC minimum rate power. In addition, the authorized carrier may be restricted as to routes and goods carried, while incurring greater expenses in order to comply with ICC regulation. See: ICC v. Allen E. Kroblin, Inc. 113 F. Supp. 599, 627 (N.D. Iowa 1953).

of their own choosing. And exemption of truckers whose carriage of privileged commodities is not an integral part of a single operation involving general commodities, or who surrender control of their trucks when used to carry general commodities, adequately fulfills the requirement of exemption by leaving untouched in many cases the return trip of the truck which has completed the favored carriage. The effect of the ICC rules and the court decision, on the other hand, was simply to terminate trip leasing. The consequence would be the end of competition, or the creation of unbalanced competition by forcing the carrier of favored commodities to return empty. Thus the second answer to the criticism above is partial acquiescence. It appears that the ultimate choice before the court should have been between termination or imbalance of competition and control of competition. The latter alternative would seem to be required by the Act.

151

Since the court decision, the Commission has twice retreated from complete abolition of the trip lease. It first amended the rules to exempt grower-owned trucks returning to their state of origin after carriage of agricultural commodities.148 And after passage in the House of a bill prohibiting any Commission regulation of the duration of leases or compensation thereunder,149 the Commission in late 1953 again amended the leasing rules to provide partial exemption for Section 203 (b) (6) carriers.150 The new rule is that when an unregulated truck has made a trip carrying privileged commodities, it may be rented by an authorized carrier for its next single movement under a lease of any duration and with any form of compensation. But if the authorized carrier rents the truck for a series of movements, free leasing is allowed only if the loaded movements are over "reasonably direct routes in the direction of the general area in which the equipment is based. In both cases, the authorized trucker is the one responsible to the ICC, for he must obtain proper statements of previous movements from his lessor before he is exempted from the leasing rules. Thus the rules leave the rural trucker, be he farmer or not, his privilege of a return trip carrying general commodities. They thereby adequately serve the favor shown by the Act to particular commodities and yet do not allow the shield of Section 203 (b) (6) to frustrate the statutory purpose of impartial regulation. In short, the rules will reach the same end as would the suggested restriction of Service and change of the intermittent lease rule. But abuse of the exemption will be prevented by limitation of the authorized lessor rather than by regulation of the lessee. The latter method may be better adapted to administration. Although both plans would face problems of evasion and enforcement,

148 Ex Parte MC-43, 18 Fed. Reg. 3023 (1953).

149 H.R. 3203, 83rd Cong., 1st Sess. (1953), amending the Act by adding a new section 204(C). See: 99 Cong. Rec. 7430 (June 24, 1953).

150 49 Code Fed. Regs. § 207.4 (a) (3) (i) (Supp. 1953). Simultaneously, the Commission cancelled the earlier amendment and postponed the effective date of the controversial 30 day and compensation rules from March 1, 1954, to March 1, 1955. Ex Parte MC-43, 18 Fed. Reg. 7800 (1953).

151 § 207.4 (2) (3) (i), supra note 150.

the Commission solution would tend to encourage the authorized carrier to accept his lessor's statement of previous trips with a pure heart and empty head. On the other hand, amendment of Service and the intermittent lease rule would provide the Commission grounds on which to move directly against the trucker who abuses the scope of exemption. But it is true that if the statements of previous trips were reliable, the Commission might have to conduct fewer investigations. On the other hand, restriction of Service and change in the intermittent lease rule may better serve the Act's regulatory theory. Instead of flat prohibition of any general transportation by the trucker who abuses Section 203 (b) (6), the solution suggested offers the possibility of continued carriage while "preventing the operators from hurting each other in the course of the limited rivalry which the law allows to continue.

152 Schwartz, supra note 145, at 437.

152

G. J. MINETTI APPOINTED MEMBER OF FEDERAL MARITIME BOARD G. Joseph Minetti of Brooklyn, New York, was administered the oath of office as a member of the Federal Maritime Board on September 23, 1954, by Secretary of Commerce Sinclair Weeks. His assumption of office brings that body up to its full authorized complement of three members. Other members of the Board are Louis S. Rothschild, Chairman, and E. C. Upton, Jr.

Report of the Practitioners' Committee on Waybill Statistics and Their Utilization

Under date of December 18, 1953 Commissioners J. Haden Alldredge and Howard G. Freas jointly suggested that the Association of Interstate Commerce Commission Practitioners might perform a public service of considerable value if it would undertake an impartial study of the Commission's waybill statistics and their utilization. In response to this request President Morrow appointed a committee on waybill statistics to undertake the requested study, naming thereto Mr. R. Granville Curry, Mr. Philip H. Porter, Mr. Roland Rice, Mr. James M. Souby and Mr. Ford K. Edwards (Chairman).

Following a rather lengthy study of the subject matter, including a canvass of the use of the waybill statistics material by carrier, shipper, government and other groups, and an inquiry into the utilization of the statistics in proceedings before the Commission, the Committee on Waybill Statistics drew up its report for submission to the Executive Committee of the Association. Upon review of the study and supporting data, the Executive Committee approved and adopted the report of the Committee on Waybill Statistics and instructed that it be transmitted to Commissioners Alldredge and Freas.

A copy of the original request for the study received from Commissioners Allredge and Freas and the Committee's report and letter of transmittal are reproduced below. A limited supply is available of the digest of the returns to the questionnaire which the committee circulated on the waybill statistics and their utilization. Copies may be had upon request.

Mr. Giles Morrow, President

Association of Interstate Commerce

Commission Practitioners

1220 Dupont Circle Building

Washington 6, D. C.

Dear Mr. Morrow:

December 18, 1953

You are no doubt aware that different opinions have been expressed regarding the value of our waybill statistics. There are some who heartily approve the collection and publication of these statistics whereas others seem equally opposed thereto. Some believe the work should be expanded while others would restrict or eliminate it. You are likewise aware, we are sure, that the collection, tabulation, and publication of these data involve a considerable expense.

We know from information in the possession of our Bureau of Transport Economics and Statistics that considerable use is being made of these data. Whether the benefits derived from this use justify the expense involved is a question to be resolved impartially.