ice, and if so, in what way? I would like to get this record a little more precise.

Mr. LEVITUS. Yes, sir; it does, because there is no common carrier that has a right to go directly from Minneapolis to Texas.

Senator HUMPHREY. What is the delay point, or what form of inconvenience or jeopardy to the products does this transfer cause or result in?

Mr. LEVITUS. It involves picking it up in Minnesota, and before we pick it up, it involves many pickups which most common carriers aren't authorized to do by the Interstate Commerce Commission. They can only take it either to Kansas City or Chicago.

Senator HUMPHREY. Then it has to be changed?

Mr. LEVITUS. Yes, sir.

Senator HUMPHREY. Then there is a possibility that at these change points there is sufficient delay in a perishable commodity that would result in some deterioration of the product, or at least injury to quality?

Mr. LEVITUS. I wouldn't say it would deteriorate the product so much as it would the market fluctuations on these products. A day or two delay in arrival could make a difference as far as market decline could go. In some cases, when you have to open up a trailer load, you have to heat up a product that should be kept refrigerated. It would deteriorate the quality. They are perishable.

Senator HUMPHREY. The common carriers would have a direct line to St. Louis or Kansas City. Are those the furthest terminal points? Mr. LEVITUS. According to my information. Then they would have to make arrangements with some other carrier to take it down to Oklahoma or Texas, and then have some other carrier to get it down to these small towns,

Senator HUMPHREY. Would a line then be equipped to make the dropoffs, or the pickups, that would be necessary for the service of the number of outlets or distribution points that have been mentioned here?

Mr. LEVITUS. I am not that familiar with the carriers down there. I think Mr. Tucker could probably answer that better than I could.

Senator HUMPHREY. Is that a problem? Even if you got as far as Oklahoma City or Tulsa, and then were able to pick up on an interchange, trucking service on into Houston, would that same trucking service be available for continuity or continuation of service due to the number of outlets or distribution points that yould would want. to leave your product?

Mr. TUCKER. Are you asking me the question?
Senator HUMPHREY. Either one of you.

Mr. TUCKER. That is my problem. The reason I illustrated the number of towns is for that simple reason. Due to the newness of the sales organization down there, we don't have enough volume sales directly in Houston to completely fill a truck, which is required of the tariff regulations in order to maintain your cost. The result there being that we would have to make multiple deliveries down there. To fill out the trailer we would take additional orders. We have had as much as 9 deliveries from 1 truck, from as many as 6 or 7 different towns.

Now, my survey showed that for instance, Dallas, Tex., is served by a carrier directly out of Kansas City. But Tyler, Tex., is served

by the third carrier which would interrupt the continuity of the shipment, make it necessary to transfer from the second carrier to a third carrier.

The same thing would apply to La Grange or Temple. Suppose I had some products going to Waco, southwest of Dallas, and some to Tyler, which is southeast. Then the rest of the load going to another point in Texas, you have three carriers involved carrying dairy products, which is unfeasible as far as we are concerned. We couldn't be in the market.

Senator HUMPHREY. In other words, the regulations as you see them, as laid down by the Interstate Commerce Commission, seriously jeopardize the ability of Land O'Lakes to make a successful market and whittle in the Texas area.

Mr. TUCKER. I want to correct you on this. The regulations set forth by the Interstate Commerce Commission have given these carriers authority to operate as common carriers in this territory. They are legitimate operations. What the decision that the examiner of the Interstate Commerce Commission made does greatly interfere with the distribution of our products on a fanned-out distribution arrangement, which we have illustrated here, due to the fact that no one carrier can do all the jobs from any one vehicle.

Naturally, time is an element, the fluctuation of market, deterioration of products. I don't know if you are familiar with the egg business, but the eggs are graded by the age and the air pocket in the middle. The larger the air pocket, the lower the grade. As they sit in a warehouse, the air sac grows larger and the value goes down. So does the market price.

Senator HUMPHREY. That was the intent of my question; namely, that under the present circumstances as you seek to open a new market where you do not have, in some instances, adequately developed business to use a full load on a carrier for one stop, that you do find it difficult to develop this market under the order of the examiner. Is that correct?

Mr. TUCKER. That is exactly right.

Senator HUMPHREY. And it may very well impede you or literally prevent you from ever developing that market unless you are able to get the kind of service that will permit you to at least explore and to progress in this area in terms of your commodities.

Mr. TUCKER. That is true. My testimony at the hearing would show that when such volume to these different points grew to a capacity load, and the load and the service could be performed by common carriers as they now exist, that automatically would become part of their base, the same as it is now by rail. We have a certain amount of the business going down by rail which is a primary 1 destination, or maybe 2, but the railroads can't perform this kind of service on perishable goods for the same reason that they don't have the distribution. The service is too slow.

But I did indicate in my testimony the fact that, when the volume. increases to such a point that there will be individual loads to these points, then the business will be available to the common carriers if they can provide the service and the necessary equipment to do it. Senator HUMPHREY. Your request was not one of an exclusive nature of the Nationwide Co., but a request to permit you to get a

start with a service that was suitable for an initial operation in a new market area.

Mr. TUCKER. That is correct.

Under the contract our intentions were to continue with the Nationwide contract, naturally, because there would be a certain amount of deviation from the common-carrier service which we have explained here, that they never would be able to do. Our distribution down there varies from day to day and from week to week.

The fact that merchants today operate on small inventories makes it necessary to make distribution at frequent intervals.

Naturally, we might go over 1 place 1 week and another place another week. You can't confine it to a common carrier service, but with the contract we would set up with Nationwide, it would be to provide us with service from points and places as designated in Minnesota and Wisconsin to points and places in Texas at our convenience and at a cost agreed upon by the two parties.

Mr. LEVITUS. May I just state that at the time of the hearing, the examiner made his recommendations, and he recommended that the authority be denied. We took exception to his recommendations, and the Interstate Commerce Commission rendered their decision on November 2, that it also be denied. So it actually has been excepted to and denied again.

Senator HUMPHREY. And denial was on the basis of no public need? Mr. LEVITUS. That is right. They say no public need exists.

Senator HUMPHREY. What is the definition, as you understand it, of public need?

Mr. LEVITUS. I would say if you can help a customer open up a new sales field in his organization, you are helping not only your customer but the American public also. They seem to feel that that isn't right.

Senator HUMPHREY. That might be particularly true now in the instance of agricultural commodities.

Mr. LEVITUS. That is right.

Senator HUMPHREY. Have you ever consulted with the Agriculture Department as to whether or not they are interested in adequate transportation of agricultural commodities from a natural point to a point of consumption?

Mr. LEVITUS. No, I haven't.

Senator HUMPHREY. I think this might be a place where the Agriculture Department would evince a token interest, at least, and I might suggest a large interest.

Mr. TUCKER. I would like to read paragraph 5 of page 5, NC114589. That was issued January 13, by Secretary Laird of the Interstate Commerce Commission.

The CHAIRMAN. Mr. Tucker, excuse me just a moment. I want to apologize, but I have to leave because I have an appointment at 12:30, but Senator Humphrey will remain.

Mr. TUCKER. Just as an indication of the associations possession of both truck and rail, who were the deniers of this, I will read the following:

The Railroad Association and the Chicago Northwestern Railway, the St. Paul Railway, oppose the application. They contend that by direct one-line haul, or through interchange, they serve the territory involved, and in general reach most of the points affected in the original territory and all points in the destination

territory. It is their position that they can furnish reasonably adequate service, that the service and facilities will meet shippers' needs and that the proposed service will not be in the public interest.

The Chicago Northwestern Railroad, nor the Chicago, Milwaukee St. Paul, & Pacific, do not serve the State of Texas directly. Consequently, their assertions here are not correct.

Senator HUMPHREY. Well, we will incorporate that in the record, that part which you so desire.

Mr. ODOм. Could we get just briefly how many private or common carriers or carriers of any type, are involved in this shipment from Wisconsin and Minnesota by Land O'Lakes? How many companies does the company have to contract with to get the shipment from your part of the country to Texas?

Mr. TUCKER. Did you say contact or contract?

Mr. ODOM. Contract.

Mr. TUCKER. Well, we have our own drivers, from the origin in Minnesota and Wisconsin to the destination in Texas. We alternate that with our own equipment as a private carrier.

Mr. ODOM. Is your equipment in Texas?

Mr. TUCKER. In Minnesota. We are involved in a lease with one private owner.

Mr. FORSYTHE. What was the date of the hearing you had? The first hearing?

Mr. LEVITUS. The application was filed June 9, 1954. The hearing was held on the afternoon of November 12, 1954.

Mr. FORSYTHE. Have Mr. Tucker's needs substantially changed today, as compared to what they were on that particular day? Are they substantially the same today?

Mr. LEVITUS. Yes, they are.

Mr. FORSYTHE. Were they made known to the hearing examiner and to the other carriers who were present and objected to the application? Mr. LEVITUS. Yes, sir, they were. It is a matter of record.

Mr. FORSYTHE. Those carriers were of the opinion they could sufficiently meet his needs with the operations they had at that time? Mr. LEVITUS. Yes, sir.

Mr. FORSYTHE. Your needs are the same today?

Mr. TUCKER. They have expanded.

Mr. LEVITUS. May I say the common carriers were represented by the Motor Carriers Conference, which they employed to attend all these hearings and intervene.

Senator HUMPHREY. Thank you very much, Mr. Levitus, and Mr. Tucker.

Mr. TUCKER. Thank you, Senator.

Senator HUMPHREY. Mr. Earl Oren will be the next witness.

STATEMENT OF EARL OREN, PRESIDENT AND GENERAL MANAGER, DART TRANSIT CO., ST. PAUL, MINN.

Senator HUMPHREY. Will you state your name and your occupation. Mr. OREN. Earl Oren, I am president and general manager of the Dart Transit Co. of St. Paul, Minn., which is a contract carrier and has been in business over 20 years and was in business prior to the Motor Carrier Act, and we provided evidence to that effect.

I have been the president and general manager of the company in excess of 20 years and before the Motor Carrier Act. I shall attempt to show that the Interstate Commerce Commission, due to its rules and regulations, interpretations, modifications, lengthy and costly hearings, and delayed hearings, delayed opinions, have caused us to be placed in such a position that we no longer can service our customers with any kind of a reasonable basis and not adequately.

As a result, they have gone to private carriers and we are just not in the picture. At about 1935, when the Motor Carrier Act came into effect we were notified by the Director of the Interstate Commerce Commission that we would be compelled to make application for authority based on our previous operations. Our operations were very extensive, having performed every type of service. We were operating as a contractor in some instances, common carrier in others, and we had even operated where the Interstate Commerce Commission could have held as brokers.

We proceeded to make the application and I did so without legal help. We were not able to spend a lot of money and we anticipated quite a bit of work in doing this. We hadn't maintained all the records that might have been expected. The law hadn't required nor did we anticipate all this. So we proceeded to make a very broad application, 1 for common, 1 for contract, and 1 for brokers. And over the territory which was serviced prior to the Motor Carrier Act of 1935.

The first thing that came up was that the Motor Carrier Act or the Commission by its rules and regulations required that we could only serve as 1 of the 3-contract carrier or common carrier and not a dual operation. So we were told we would have to relinquish whatever we had in the other 2 categories and that only 1 piece of authority would be granted. This was the beginning of our limitations so far as our previous operations were concerned.

We had extensive hearings before the Commission in St. Paul, and it was finally concluded that we should furnish all the evidence and submit it and that the Commission then would issue a proposal to us based on what would be reasonable in their opinion, and we finally had a proposal of an authority issued to us which we were told that we could accept or reject and if we rejected it we would be subject to extensive hearings.

So we decided that rather than go to the expense and more delayed time this proposal was issued in 1939 and we decided that it would be better to accept the order as a contract carrier. We were told that after once being given this order, that the Commission, nor no one else would add to or detract from it without our consent. We thought that was a fairly good assurance because that left us open to extend or broaden our authority as time might go on.

This was all new to us and I had done so without legal assistance, so I accepted the order in 1939. It was not an order, however, until it was issued in 1942, February 7, under MC77055, to operate as a contract carrier for specified commodities between specific points with no compensation for return, except as specifically authorized. I have that permit here if you would like to see it. Mr. Loevinger has that. We felt that the authority, of course, was very narrow. It specified for contract carriers, limited commodities, interpretations, modifications, and classifications.