Mr. STULTS. I am sure it is within their power. But this committee has had testimony that carriers certified to serve small towns do not actively serve them and will not solicit business in those areas.

Mr. ADAMS. Mr. Secretary, you would agree that regulation of this industry should be conducted in the interest of consumers; is that right?

Secretary WEEKS. Yes, sir.

Mr. ADAMS. In this case the shipper?
Secretary WEEKS. Yes.

Mr. ADAMS. And the shipper should have maximum freedom to choose?

Is that right?

Secretary WEEKS. I think so.

Mr. ADAMS. Freedom of choice is the watchword here?

Have many complaints, proportionately speaking, come to your attention concerning the operation of the exempt carriers for agriculture? Have many farmers as individuals or as groups complained about the performance of the exempt segment of the motor-carrier industry?

Secretary WEEKS. I can only say as to that, and I will confine my observation to the recommendation the Committee made which was to the effect that there have been tremendous enlargements in the scope of agricultural exemptions and we recommended that Congress look at that in the light of present conditions and see where they wanted the exemptions to start and where to stop.

The court decisions have considerably extended what we think may have been the original intent of Congress.

Now, as to who is complaining about it, I can't tell you offhand. I know there have been complaints.

Mr. ADAMS. Specifically, you don't recollect any farm organization, for example, complaining to the President's Cabinet Committee about the operation of the exemption?

Secretary WEEKS. I can't recollect whether that was so or not. The task committee that studied these things. Where their complaints came from I don't know, but they received complaints.

Mr. ADAMS. Mr. Secretary, has it been called to your attention that we had appear before this committee representatives from every single farm organization-well, the major farm organizations in the country, the Farm Bureau, the Grange, the National Farmers Union and the National Council of Farm Cooperatives expressing great satisfaction with the operation of this segment of the industry, that is the exempt segment of the trucking industry.

Has that been called to your attention?

Secretary WEEKS. I think not, but I would expect them to express that satisfaction. I am sure the industry, the transportation industry, has been serving them well in this exempt field and what they have been doing for the farmer would be satisfactory. But you also find the hauling of certain things like cocoa beans falling within the field of agricultural exemption. Such products do not concern any farmer in the country.

Mr. ADAMS. Cocoa beans are a foreign product. We will leave them out of consideration. For any domestic product you feel the farmer, as a rational consumer, knows what is in his best interest?

Secretary WEEKS. Certainly.

Mr. ADAMS. And he is satisfied with the agricultural exemption, is that correct?

Secretary WEEKS, If he came here and said so, he must be.

Mr. ADAMS. And you would accept that as a rational judgment about the performance of an industry?

Secretary WEEKS. I am sure there is no problem to this except as to where Congress wants the exemptions to start and to stop. That is all there is to this problem.

Mr. ADAMS. I just have two more brief questions.

If this exempt segment of the trucking industry is operating to the great satisfaction of shippers-in this case, farmers do you suppose that we might experiment with an extension of the exemption to shippers who are producers of manufactured products?

Secretary WEEKS. I don't think I should guess today. Any properly authorized contract carrier can pick up a load from a manufacturer.

Mr. STULTS. If he has the route structure, I think; is that right? Secretary WEEKS. If he has the route structure.

Mr. STULTS. Yes.

Secretary WEEKS. Yes. But again I say any encroachments on the common-carrier field I think are bad.

Mr. ADAMS. Generally, then, you would agree that competition means rivalry among individuals over such questions as rates, for example, and service?

Secretary WEEKS. Yes.

Mr. ADAMS. And a competitive industry is also one which provides competitive opportunity; is that right?

Secretary WEEKS. Yes.

Mr. ADAMS. That is people are free to get into the industry?

Secretary WEEKS. Well, if you are going to have any regulation whatever, you should have a certain certificate from the regulatory body. Any attempt I think to liken the competition in this field with competition within a given manufacturing industry, any attempt to create an analogy there, I think, is not on sound ground, because you must have regulation in the transportation field and you must have a certification to go into the business and so on and I think all you have to do is give it as much competition as you can.

Mr. ADAMS. In other words, there ought to be licensing by this Government agency to determine if the applicant is fit, willing, and able to provide a particular service, that would be part of the regulation wouldn't it? Is that right?

Secretary WEEKS. Yes.

Mr. ADAMS. And then also you would agree that we ought to get as many people in as possible. That is, an application ought to be approved in that respect unless there is a showing that it is against the public interest. Would you say that is right as a matter of policy? Secretary WEEKS. That is right.

Mr. ADAMS. Thank you, that is all, Mr. Secretary.

Senator DUFF. This record will be kept open for 2 weeks to allow anyone who desires to make a further written statement for the record and that will include your opportunity to make a rejoinder to this statement made this morning.

Secretary WEEKS. Thank you, Mr. Chairman.

(Whereupon at 3: 10 p. m. the hearing was closed.)

APPENDIXES

APPENDIX 1

REPY OF THE INTERSTATE COMMERCE COMMISSION TO QUESTIONNAIRE OF THE SELECT COMMITTEE ON SMALL BUSINESS OF THE UNITED STATES SENATE CONCERNING THE ADMINISTRATION OF THE MOTOR CARRIER ACT, NOVEMBER 28, 1955

1. What are the major provisions of the Motor Carrier Act of 1935?

The original Motor Carrier Act, 1935, also known as part II of the Interstate Commerce Act, became law on August 9, 1935. It has many times been amended and appears as title 49, United States Code, sections 301-328, except certain parts which have been incorporated into part I of the act, title 49, United States Code, sections 1-26.

The following may be said to be the major provisions of the Motor Carrier Act, 1935, as amended:

(a) The National Transportation Policy, title 49, United States Code, preceding section 1.

(b) Classes of carriers and brokers.—The classes of Motor Carriers which are subject to the Interstate Commerce Act are defined in section 203 (a) (14), (15), and (17). Brokers are defined in section 203 (a) (18). They may be briefly described as follows:

1. Common carriers which transport passengers or property in interstate or foreign commerce for the general public, for compensation.

2. Contract carriers which transport passengers or property in interstate or foreign commerce, for compensation, but, unlike the common carrier, limit their service to certain customers, under special and individual contracts or agreements.

3. Private carriers of property which do not transport for hire, but transport only property of which the carrier is the owner, lessee, or bailee, generally in the furtherance of a commercial enterprise. There is no corresponding private carrier of passengers subject to the act.

4. Brokers of interstate and foreign transportation are persons who are not carriers, but who as intermediaries arrange, provide, procure transportation subject to the act.

(c) Exemptions.-Sections 202 (c) and 203 (b) list 12 or more classes of common and contract carriers or motor carriers for hire operations which are specifically exempted from all requirements of the act except those relating to safety of operation, standards of equipment, and qualifications and maximum hours of service of employees whose activities affect safety of operations. Many of the operations within these exemptions are of great importance in the transportation industry, for example, section 203 (b) (6) exempts, to the extent indicated, motor vehicles used in carrying ordinary livestock, fish (including shellfish) and agricultural commodities (not including manufactured products thereof), if such motor vehicles are not at the same time used in transporting for compensation property not within the exemption, or passengers. Section 202 (c) exempts, as indicated, collection, delivery, and transfer service within terminal areas, performed for motor carriers, or by or for railroads, water carriers, and freight forwarders subject to the act. Section 203 (b) (8) exempts, to the extent indicated, local motor vehicle transportation in interstate or foreign commerce, for compensatiton within cities and towns, between contiguous cities and towns, and within their commercial zones.

(d) Private carriers of property.-Private carriers of property by motor vehicle, as in the case of the exempt operation mentioned above, are subject only to those provisions of the act which relate to safety of operations, standards of equipment, and qualifications and maximum hours of service of employees whose activities affect safety of operations.

(e) Licensing.-Sections 206, 207, and 208 provide for the issuance of certificates authorizing motor common carrier operations in interstate and foreign commerce upon a finding of public convenience and necessity and that the applicant is fit, willing, and able to conduct the proposed operation and comply with the requirements prescribed under the act. Operations as a common carrier without a certificate (other than the "exempt" operations mentioned above) are prohibited except that by the second proviso of section 206 (a) a motor common carrier engaged in intrastate operation within a single State under a certificate of public convenience and necessity issued by that State may participate in interstate and foreign operations without obtaining a certificate from this Commission.

Section 209 provides for the issuance of permits authorizing operations in interstate and foreign commerce as a contract carrier, upon a finding that the applicant is fit, willing, and able properly to perform the services of a contract carrier and comply with the requirements prescribed by and under authority of the act, and that proposed operations will be consistent with the public interest and the national transportation policy. Motor contract carrier operation in interstate and foreign commerce without a permit is prohibited, except that no authorization is required for contract carrier operations within the exemptions in sections 202 (c) and 203 (b), mentioned above.

Section 211 provides for the licensing of brokers of interstate and foreign transportation upon a finding that the applicant is fit, willing, and able to conduct the operations of a broker and that the operations will be consistent with the public interest and the national transportation policy.

Section 212 (a) provides for the suspension of revocation of certificates, permits, and licenses after hearing, for willful violation of the act or a requirement established thereunder, but no such authorization may be revoked (except upon request of the holder) unless the holder has failed to comply with an order issued after opportunity for hearing commanding obedience to the requirement.

(f) Issuance of securities.-Section 214 provides for the regulation of the issuance of securities by common and contract motor carriers (not including those within the mentioned exemptions), where the value of the securities of such carrier exceed $1 million.

(g) Security for the protection of the public.-Section 215 requires all common and contract motor carriers (other than those within the exemptions in section 202 (c), 203 (a) (14) and 203 (b)) to provide insurance or other security covering the carriers liability for personal injuries, deaths and property damage caused by the negligent operation of its vehicles upon the highways. Such common carriers also are required to provide cargo insurance or other security for the protection of shippers and consignee suffering loss of or damage to property being transported.

(h) Rates, fares, and practices.-Section 216 requires motor common carriers (other than those exempt by section 202 (c), 203 (a) (14) and 203 (b)) to provide safe and adequate service, equipment, and facilities, and to establish and observe just and reasonable rates, fares, charges, and practices. Such carriers also are prohibited from making, giving, or causing any unjust discrimination or any undue preference or prejudice between persons, places, districts, territories, or descriptions of traffic. Motor carriers of passengers are required to establish reasonable through routes and joint rates with other such carriers. Motor carriers of property are permitted to establish through routes and joint rates with other such carriers, but they may not be required to do so. Motor carriers of passenges and motor carriers of property may establish through routes and joint rates with regulated common carriers, other than motor carriers, including railroads, but they may not be required to do so.

Section 216 confers upon the Commission authority, after hearing, to determine, upon complaint or in a proceeding instituted upon its own initiative, whether any rate, rule, regulation, or practice of such common carriers is in violation of any of the above requirements, and to prescribe the maximum, minimum, or the specific rate charge, rule, regulation or practice thereafter to be made effective. The Commission is authorized to suspend for a period not exceeding 7 months, any proposed change in any rate, charge, rule, regulation or practice, pending the determination of its lawfulness.

Section 216 (h) and (i) prescribe a rule of ratemaking for such motor common carriers, including a provision that the carrires certificate shall not be regarded as having value for purposes of ratemaking.

(j) Tariffs of common carriers.-Section 217 requires motor common carriers, other than those within the exemptions in section 202 (c), 203 (a) (14), and 203 (b), to publish, keep open for public inspection, and file with the Commission tariffs showing all their rates, fares, and charges, and all rules, regulations, or practices affecting the value thereof. Changes in such tariffs may be made only upon the publication and filing of such changes 30 days in advance of their effective date, unless establishment on a shorter notice is specifically authorized by the Commission.

(k) Contract carrier rates and schedules.-Section 218 requires motor contract carriers, other than those within the exemptions in section 202 (c), 203 (a) (14), and 203 (b), to publish, file with the Commission, and observe just and reasonable minimum rates covering services rendered by them. The minimum rates stated in the schedules must be those actually maintained and charged and not a fictitious minimum. Changes in such schedules may be made only by new schedules filed and posted 30 days in advance of their effective date, except where establishment on shorter notice is authorized by the Commission. The Commission after hearing, instituted by complaint or upon the Commission's own initiative, may determine whether any rate or charge is below a reasonable minimum level and prescribe the minimum rates, charges, or practices thereafter to be established and observed. The Commission may suspend for not more than 7 months any proposed reduction in any minimum rates, charges, regulations, or practices pending a determination of their lawfulness. (1) Receipts, bills of lading, liability.—Section 219 states the liability of motor common carriers for loss of or damage to property accepted by such carriers for transportation, including a provision that where a shipment is handled in joint line service by two or more carriers the shipper or consignee may recover from either the originating line or the delivering line for any loss of or damage to the shipment, regardless as to whether the loss or damage was caused by that line or any connecting line participating in the through movement. Motor common carriers are required to issue bills of lading for shipment received. (m) Accounts, reports, and records.—Section 220 authorizes the Commission to require the filing of annual and other reports by motor carriers and to prescribe systems of accounts to be used by such carriers. Pursuance to such authority, the Commission has required rather comprehensive reports and accounts of class I motor carriers, which are those having gross annual operating revenues of $200,000 or more. At the close of the year 1954 there were 2,624 class I motor carriers of property. We have prescribed no system of accounts for class II carriers (those having gross annual operating revenues of $50,000 and over, but under $200,000) or for class III carriers (those having gross annual operating revenue of less than $50,000). There is at present 5,580 class II carriers, and 9,980 class III carriers. Class II and III carriers are required to file brief annual reports containing a minimum of data.

Under authority of this section we have required common and contract carriers to file reports of the more serious accidents and certain reports relating to excess hours of service of drivers. All motor carriers, including private carriers, with some exceptions, are required to keep certain records relating to safety matters.

(n) Penalties, enforcement.-Section 222 provides various penalties forfeitures for violations of the provisions of the act and the requirements established thereunder. It also provides for civil actions by the Commission to compel observance of the act and requirements established thereunder.

Section 223 provides limitations upon the extension of credit for freight charges by motor common carriers subject to the rate observance provisions of the act.

Section 5 (1) of the Interstate Commerce Act, applicable both to railroads and to motor common carriers, prohibits the pooling or division of traffic, revenue, services or gross or net earnings between such carriers without the approval of the Commission.

Section 5 (2)-(12) inclusive applicable to railroads and to motor common and contract carriers, prohibits the merger, consolidation, or common control of two or more such carriers without a determination by the Commission that such action will be consistent with the public interest. Unifications of motor carriers, where 20 or less vehicles are involved, do not require approval unless a transfer of a certificate or permit from one holder to another is necessary, in which case, the transfer is subject to the regulations prescribed under section 212 (b) as any other transfer not involving the unification of two or more car