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The demand for this kind of investigation has been pretty much before the Commission for some time. In fact, I believe I am correct, and I could stand corrected on this if I am wrong, but I believe at one time, the railroads themselves undertook this kind of investigation and due to the very nature of the competitive situations of railroads, they weren't able to get together to finish it.
These investigations in my opinion need to be done, must be done, if we are to correct disparities and distortions and prejudices and discriminations that have crept into the ratemaking procedure with regard to railroads in the last 85 or 86 years.
In this same pamphlet, Mr. Chairman and Mr. Conte, we described the kind of man we wanted. The Commission recommended that we hire a special counsel. All of that is in this pamphlet.
Proceeding from there, we then had to determine how we could go about getting the funds. At that time there was a sum of money that was impounded by the Bureau of the Budget from our original allocated appropriated funds.
Mr. ĐINGELL. That was a sum of funds that was allocated to specific expenditures, not for special counsel, but for in-house work of the kind we are discussing now.
Mr. BREWER. No, no, no. The kind
Mr. BREWER. It was appropriated for regular operating funds but was impounded at that time. Our regular budget has been reduced by that amount.
Mr. DINGELL. Are you saying that you retrieved some of the reductions by going to the device of procuring special counsel?
Mr. BREWER. I didn't understand the statement.
Mr. DINGELL. Are you saying that by going to special counsel you retrieved some of these funds?
Mr. BREWER. No, no. What we did, we went to the Bureau of the Budget and we told them the necessity of investigation and we very much would like to conduct it; that we did not have the funds to conduct it in-house; that we felt it was best to conduct it with an unbiased interest counsel and, under those conditions, we got the $740,000 which was the original amount we had.
Subsequently we got the additional amount from the Appropriations Committees.
Back to your question; I am sorry to have taken so long to get to it, Congressman.
The first thing we described in the Commission was the profile of the kind of man that would be necessary to give to this kind of a study the appropriate analysis, the judicial analysis, the careful attention that would be necessary in evaluating the various statements that had been put into the record and also be put into the record, evaluate them, assess them, then together with such recommendations that the RMC will come up with, involving literally thousands of commodity classifications, the long haul, short haul, disparity of across-the-board increases, where you give the long-haul shipper increases of $4 a ton; that is, 40 cents; you give a short hauler $2 a ton; that is only 20 cents, you see.
So the disparities continued to be there.
Secondly, we need to know whether or not those captive commodities whose products are not shippable by any other means than the railroad, for example, are they bearing more than their proportionate share because of competitive influences that hold down the prices on other matter that could be shipped by any mode.
We need to know that. There are many, many other things we need to know. The profile of the man had to do and the image before us, I guess, had to do
with Mr. Justice Brandeis because the only other time that this Commission to my knowledge ever conducted an outside investigation under contract was with Mr. Justice Brandeis I believe in 1914, the famous 5-percent case.
So this was a profile we had in mind, a man of that kind of reputation. So we searched among ourselves and there was considerable correspondence in the file and between the chairman and this Commission relative to this kind of person asking that we study diligently and come up with names to be considered.
So we had a research started and our first thought was a very eminent Federal judge who has been widely recognized in the transportation field in some of his decisions. Of course, not to embarrass him and his august position, we asked our General Counsel, Mr. Kahn, if he would make such discreet inquiries as were necessary to determiné whether this particular jurist would have any interest in this matter.
Mr. CONTE. Did he actually approach the jurist?
Mr. BREWER. No, sir. The jurist was never approached, to my knowledge; and I think I am correct.
Mr. CONTE. How did you find out if he was interested?
Mr. CoNTE. This is going to be the swearingest hearing you have ever heard.
Mr. DINGELL. Mr. Kahn, do you solemnly swear that you will tell the truth, the whole truth and nothing but the truth so help you God?
Mr. Kahn. I do.
Mr. Kaun. The judge was not contacted because the inquiry made disclosed that he would not be leaving the bench until a later time than the Commission sought to retain his services.
Mr. DINGELL. Well, if the gentleman will yield, in point of fact, your response to the Chair indicated that you had had under consideration a number of people; am I correct?
Mr. STAFFORD. Right.
Mr. DINGELL. And you have listed for us a number of Federal judges whose names are in the record. You also stated that
had had under consideration former Senator Frank Lausche. No contacts were made with him?
A former colleague of mine Mr. George Springer, in favor of whose confirmation, by the way, I testified before the Senate, was involved in negotiations with you; wasn't he?
Mr. BREWER. We had negotiations with þim for approximately 6 months.
Mr. DINGELL. And then you had negotiations with the present holder of the-well, I would say supposed holder of the contract, Mr. Allott; is that correct?
Mr. BREWER. That is correct. And we also had a lengthy conversation with Mr. Ginnane, the former general counsel of ICC, who had retired. We entered into negotiations with him for several weeks.
Mr. DINGELL. He does seem to be qualified. You entered into negotiations with a number of practitioners.
Will you submit to the committee the names of those gentlemen? We will not make them public.
Mr. BREWER. We will submit the names.
Mr. DINGELL. And will you also inform us whether you had been in actual negotiations with any persons other than those who were previously indicated?
Mr. BREWER. Not actual negotiations. When it comes to actual negotiations, I guess that is an actual
Mr. DINGELL. I mean, have you sat down and talked to any persons other than the four people we have mentioned?
Mr. BREWER. We had a prominent man in Chicago who came down to see me and we talked at some length about it and he was involved in a matter that involved transportation. One of the rules that we had drawn among ourselves, rightly or wrongly, was
Mr. DINGELL. I think because of conflict of interest you had to forgo that. I don't have any quarrel with that.
Mr. BREWER. We didn't want any man who had practiced transportation law or involved in transportation law-for obvious reasons.
Mr. DINGELL. He is the only other person with whom you have had any contact?
Mr. BREWER. No.
Another lawyer came down to see me from Connecticut and we discussed the matter at some length and we did not feel he had at that time the national image or was not well enough known to carry the kind of prestige with this report that we needed.
Mr. DINGELL. Who else did you actually contact?
Mr. BREWER. We contacted no one else. Some of these practitioners came to us and contacted us.
Mr. DINGELL. Would you submit to us the names of those?
Mr. DINGELL. That is all you have to say on it. Do you have anything further?
Mr. BREWER. Nothing.
Mr. Chairman, to follow up the question of who was contacted in regard to performing these duties for you, the possibility of retaining special counsel, you have listed a number of Federal judges as having been given consideration.
Did you actually talk to any of these Federal judges?
Mr. POWERS. How did you determine the judges that were to be considered, just go down a list of Federal judges and think maybe one was maybe ready to retire or maybe there was something special about these names?
Mr. BREWER. Mr. Chairman, could we insert in the record the list of names as of March 28?
Mr. DINGELL. I believe those are already inserted in the record. Mr. BREWER. To answer your question, I believe I am correctwill you please correct me if I am wrong-each of these Federal judges was on the retirement list. Am I correct in that?
Mr. Kahn. That is correct.
Mr. BREWER. We made discreet inquiries and we found in most instances that they were probably, how do you say it, probably their age was such that they might not have the vigor; and interestingly enough, in the Appropriations Committee of the Senate last year, they described that this man should be a man of vim, vigor, vitality, and be able to devote time and energy to this kind of comprehensive investigation.
So by various methods, we decided that these Federal judges should not be approached and did not.
Mr. POWERS. In other words, these 11 Federal judges whom you gave consideration to were given consideration because they were on the retirement list.
Mr. BREWER. This list was gotten for me by the general counsel. Mr. DINGELL. You answer that question for me.
Mr. Kahn. This particular list of judges reflected not only retired or about-to-retire judges but also judges who have distinguished themselves in the consideration of transportation cases and in each instance the judge had an outstanding performance in the handling of transportation cases.
Mr. POWERS. Who were the judges that are on the retirement list that you
felt didn't have the vim to—it seems ludicrous to consider that he was retired and then eliminate him because he was retired, you can't consider that individual.
Mr. Kahn. I think it is pretty obvious if you were to run down the list.
Mr. POWERS. Please do so.
Mr. Kahn. A judge such as Henry Friendly, who is now retired, a senior judge, eligible for retirement, is a very alert, very vigorous and very healthy individual.
Mr. POWERS. Did you talk to Judge Friendly?
Mr. Kahn. As I said previously, at the time Judge Friendly came up he had not yet reached the retirement age and the Commission was anxious at that time to proceed.
Mr. POWERS. What about Judge Fahy?
Mr. KAHN. Judge Fahy I believe more recently has had to curtail his activities greatly.
Mr. POWERS. Health problems?
Mr. POWERS. All right. Judge Waterman? Mr. Kaun. I think at this point, really running down the list, you should have the Commission's responses, as the Commission's counsel did not make the selection.
Mr. POWERS. I am just trying to ascertain what consideration was given to them. Anyone can come up with a list and say we considered them and rejected them but they are not suitable for consideration and really no consideration was given to them.
Mr. BREWER. May I respond to that? Remember, we were searching across a rather broad spectrum in trying to find this particular kind of an individual and about the time we were considering these people, the name of Bob Ginnane came up. We immediately then proceeded, because he appeared to be the kind of a man that the Commission totally and the shippers and the carriers and about everybody would accept as being a man of probity, a man who had practiced before the Supreme Court and a man of great integrity.
So we then proceeded to consider Bob Ginnane as being the most preferable man at that time.
His name had not come up before that time but it did come up at this time.
Mr. POWERS. When did Mr. Ginnane leave the staff of ICC?
Mr. BREWER. Partially recovered. During the course of our discussions, and we talked some time and the opening wedge was done by our good counsel, who approached Bob Ginnane very discreetly to appear if he was interested in talking:
Mr. POWERS. He was asked if he was interested in being considered for this position and his response was no?
Mr. BREWER. His response was "No." Yes. We talked for a period of several weeks. He stated how important the completion of Ec parte 270 would be to this Commission, how he had urged it over the years, how he hoped that it would be done and done well.
He would love to do it and he would have to consider a number of things, among which was his health; another was the fact he had just joined a law firm and he would have to talk to his wife and to his law partners because if he took 2 years out from that law firm, to do this job, which would require full time, that then, of course, he would not feel that he had quite lived up to his commitment to these partners or he probably could not go back again.
But the main thing he had to consider was his health. So we considered a number of people among which was Mr. Ginnane and finally he came to me and said I am so sorry to tell you; I just better not do it for health reasons and personal reasons.
I am not sure it was totally health reasons. It may have been health reasons and partially his commitment to his firm.
Mr. POWERS. Was he actually working on Ex parte 270 prior to the time he left the Commission?
Mr. BREWER. I am not sure.
Mr. POWERS. So there is no problem whether or not there would be a conflict of interest under Federal law in his accepting this contract?
Mr. Kain. None whatever.