elements of transportation law. We believe instead of eroding the jurisdiction and effectiveness of the Interstate Commerce Commission, it should be bolstered and strengthened in order that we may have orderly continuity in the development of transportation rules and regulations.

We hope this committee will delete section 4 (2) of the bill.

I thank you for the opportunity to appear before you on behalf of two very large and important segments of the dairy industry.

Senator LAUSCHE. Except for the objections that you have raised to two sections, do you have any other comments to make on the bill? Mr. DREHER. I have no other comment except those we have made in this statement, Mr. Chairman, and that is against section 3 and section 4(b) (2). We take the position that if we had to establish a primary importance between those two sections, certainly section. 4(b) (2) is the most serious, and we consider this to be very harmful, the language in this section to private carrier operations.

Senator LAUSCHE. That is, in summary, your position is that the provisions that would allow civil forfeitures predicated on violations of safety rules, is rather hazardous insofar as it will affect the legitimate transportation industry?

Mr. DREHER. Yes, I believe it is very hazardous because we are placing in the hand of an ICC inspector actually whether he will invoke the civil penalties or not. And, of course, if it is an innocent violation, such as the reference has often made of a light bulb, we can't ignore it, of a light bulb going off on the road. That is a violation and technically under the law, that operator can be fined under this penalty, and we don't see any reason why there should be such a severe penalty for such an innocent violation as that.

We think there should be a greater understanding in that section.

Senator LAUSCHE. And your second objection to the bill is that you believe the giving of the right to individuals to bring suits for injunctive relief will lead to abuses and harassment of alleged wrongdoers while such wrongs can be more effectively rectified under the present procedure before the Commission?

Mr. DREHER. When you say "giving that right to individuals," they now have that right to go before the Interstate Commerce Commission. They can do that as individuals.

Senator LAUSCHE. The bill would give the right to go to a court of equity and secure relief. That is what you are complaining about? Mr. DREHER. We are complaining, yes, that the Federal district courts certainly do not have the years of background that the Interstate Commerce Commission has had in this particular field.

The Commission has many records in their files whereby the examiner has made a certain determination of what constitutes primary business and they have applied the primary business test to many situations. And in numerous cases, the examiner has been overruled by a joint board of the Commission. In many cases, there has even been a difference of opinion on a joint board as to whether it is a primary business or not.

So that if we have that kind of possibility of differences of opinion on the Commission, which has had years and years of experience in this field, certainly if we throw the cases into the Federal district courts, where we have over 90 of them, we can have nothing but confusion.

And I don't believe that anything would be gained in the process and that the private carrier industry could be very seriously affected by it. Senator LAUSCHE. Any questions?

Mr. SENDER. I am a little confused. As you point out, the Commission has the authority today to go into any 1 of the 90 courts that you mentioned and get an injunction. You point that out in your state

ment.

If the Commission today brings an injunction suit in one of these Federal district courts, doesn't the Federal district court have to determine it?

Mr. DREHER. I think the primary consideration there is that the Interstate Commerce Commission takes the initiative and applies for that injunction. They, of course, predetermine the case in their own minds-is this a legitimate application of a primary business, or is it not-so that we do have the play of their expertise in that situation. We would not have that situation, however, where an individual can go before a Federal district court and that district judge would determine whether or not it is a primary business test application. Of course, one would say "clear and patent" has been described by the previous witness, there is no determination as to what a "clear and patent" violation is.

Senator LAUSCHE. Thanks very much, Mr. Dreher.

The next witness is Mr. William H. Ott, general traffic manager, Kraft Foods Division, Private Truck Council.

STATEMENT OF WILLIAM H. OTT, GENERAL TRAFFIC MANAGER, KRAFT FOODS, ON BEHALF OF PRIVATE TRUCK COUNCIL OF AMERICA, INC.; ACCOMPANIED BY JOHN C. WHITE, MANAGING DIRECTOR OF THE PRIVATE TRUCK COUNCIL OF AMERICA, INC.; AND WILLIAM A. QUINLAN, SPECIAL COUNSEL

Mr. OTT. If it please the Senator, I have with me this morning Mr. John White, managing director of the Private Truck Council, and Mr. William A. Quinlan, special counsel.

Senator LAUSCHE. Mr. Ott, your complete statement will be printed in the record. With that knowledge before you, you can proceed to discuss the highlights of your presentation either by reading or by your recitation as to what your views are.

Mr. OTT. Thank you, sir.

My name is William H. Ott. My residence is Des Plaines, Ill. I am general traffic manager of Kraft Foods with principal offices in Chicago, Ill. I am appearing here on behalf of the Private Truck Council of America, Inc., of which my company has been a member since the organization of the council 26 years ago.

I am a member of the council's board of directors and was its first president, from 1939 to 1940. All of my work has been in relation to transportation matters.

We very much appreciate this opportunity to appear before your subcommittee and reflect the problems and views of private truck operators.

The Private Truck Council of America, Inc., is a national nonprofit membership organization composed of private motor truck

operators, or so-called private carriers of property by motor vehicle, and of other organizations of such operators, including the natinal trade associations of various industries.

The council's membership, directly and through affiliated associations, includes businesses of many kinds which operate motor vehicles as an incident to their primary enterprises. Private truck operations are, for example, conducted by members of the baking, petroleum, chemical, beverage, meat packing, dairy and most other industries. The council's purposes include cooperating with Government in the public interest and in the interest of safe and economic operation of private motor trucks, and presenting to Government the views of private motor truck operators.

We appear here in opposition to the proposed provisions for enforcement of the Motor Carrier Act, 1935-part II of the Interstate Commerce Act-through lawsuits by private persons and through civil forfeitures applicable to innocent and minor violations which are contained in S. 1727 and H.R. 5401.

The provision for private lawsuits is in the second full paragraph of section 4 of S. 1727, and there is a similar although not identical provision in section 5 of H.R. 5401. The provision for civil forfeitures is section 3 of S. 1727, and there is a similar although not identical provision in section 3 of H.R. 5401. We have no objection to any other provisions of S. 1727 and H.R. 5401; we emphatically approve of sections 1 and 2 as they do have considerable merit.

Mr. Chairman, in order to conserve the time of the subcommittee and focus attention on the matter of importance to private truck operators, may I read or summarize portions of this statement, and then ask that the remainder be included in the transcript? Senator LAUSCHE. That will be done.

Mr. OTT. The concern of private truck operators is mainly over the provision for private lawsuits, which we respectfully urge the subcommittee to delete from any bill to be recommended.

We favor effective and adequate administration and enforcement of the provisions of the act; we are for giving the responsible agency, the Interstate Commerce Commission, whatever is needed to accomplish such administration and enforcement.

Congress and the Nation have a great investment in the Commission as the specialized expert agency having primary jurisdiction in the regulation of surface transportation, and in the body of law developed through the exercise of that primary jurisdiction by this expert quasi-judicial body.

The investment should be protected. We should not compromise our investment by allowing the Commission to be bypassed by private plaintiffs, as the second paragraph of section 4 of S. 1727 and section 5 of H.R. 5401 would do.

True, there is a reference to the Commission's primary jurisdiction at the end of section 4 of S. 1727 and another at the end of section 5 of H.R. 5401, but, as I shall explain before concluding, those references in our judgment would be ineffective.

It has been urged, in support of the proposed provision for suits by allegedly damaged private parties, that this is needed and good because the Commission itself lacks funds and personnel for enforce

ment.

There are at least two fallacies in that argument.

First, it is far better to give the Commission itself whatever is reasonably needed in funds and personnel, rather than to invite all the harm to transportation and the public interest which is inherent in bypassing the Commission; this is a subject I will refer to in more detail later.

Second, there already is a procedure by which allegedly damaged private parties can themselves invoke the protection of the act, by initiating consideration by the Commission. Section 204 (c) of the act already provides that.

I will not read that portion, as it has already been read by a previous witness.

An interested party to the case who disagrees with the action of the Commission on a complaint under that section is entitled to review by the courts.

That is the orderly procedure which is already provided in the statutes, consistently with the doctrine of "primary jurisdiction" given to the various agencies set up to deal adequately, as the courts unaided could not be expected to do, with the modern-day burden and complexity of regulation in special areas such as the one with which you and we are concerned here.

The clause at the end of section 4 of S. 1727 reading "Nothing in this paragraph shall be construed to *** deprive the Commission of its primary jurisdiction to determine the validity of an operation in dispute under the primary business test," would not answer these objections.

The clause could be construed as only permissive; there would be nothing in it to assure a true "agency proceeding." At best, the clause would require litigation to determine whether it is, in fact, permissive or mandatory.

"The Commission" could mean in practical fact for this purpose one Commissioner, or even a member of the staff, and there would be no assurance of exercise by the Commission itself of its primary jurisdiction.

The exercise of primary jurisdiction means a quasi-judicial proceeding before the Commission itself, or before its examiner with a right to seek reconsideration by its appropriate Division and by the full Commission, with full due process before this specialized and expert body, including the right of interested persons to present evidence and argument and to have the Commission render a decision with findings and reasons based on the open record of that evidence.

For a Commissioner, or an employed member of the Commission. staff, to decide privately in his office whether to appear actively in a private suit is no substitute for due process before this specialized agency. Indeed, many if not most of the theories which the Commission has rejected in establishing and continuing to apply the "primary business test" in its formal proceedings after according interested parties opportunity to be heard, have been instigated by employed members of the Commission staff and on occasion embraced by an individual Commissioner in a dissenting opinion. With no guarantee that the Commission would truly exercise its primary jurisdiction, it is entirely possible that private suits would be allowed to proceed in courts unfamiliar with this special field of law, in no position to give

such cases adequate time and attention, and lacking the benefit of prior findings and determinations by the responsible body of experts. Such would be contrary to the basic principle of administrative law established through long experience.

The clause with regard to Commission jurisdiction at the end of section 5 of H.R. 5401, is plainly only permissive; it reads as follows:

(3) In any action brought under subsection (b) (2) of this section, the Commission may notify the district court of the United States in which such action is pending that it intends to consider the matter in a proceeding before the Commission. Upon the filing of such notice the court shall stay further action pending disposition of the proceeding before the Commission,

That clause in the House bill, if it were invoked, would call for a true quasi-judicial or agency proceeding before the Commission. But the trouble again is that it would be only permissive, and there is no assurance as to how the decision would be made, or by whom, as to whether to invoke it at all. Again, as with the clause in the Senate bill, it could be one Commissioner, or even a member of the staff, and there would be no assurance of exercise by the Commission itself of its primary jurisdiction.

Our organization has had firsthand experience in these matters, having been an intervenor in various cases in which the right of legitimate manufacturers and distributors to operate trucks in the course of and as a bona fide incident to their businesses has been in jeopardy, including the landmark Lenoir, Schenley (Brooks Transportation), and Burlington Mills cases.

Had the now -proposed provision for private suits for injunctions been law at the time those cases were heard, the same attacks on legitimate businesses could have been made directly in the courts, and neither the Private Truck Council of America, Inc., nor the associations of for-hire carriers would have had the right to be heard on the far-reaching issues raised in such cases, even if we had known of them in time.

Senator LAUSCHE. Stop for a moment.

Mr. OTT. Yes, sir.

Senator LAUSCHE. You state that "neither the Private Truck Council nor the associations of for-hire carriers would have had the right to be heard on the far-reaching issues raised in such cases, even if we had known of them in time.”

Would you elaborate on that?

Mr. OTT. May I ask Mr. Quinlan, our counsel, to elaborate on that? Mr. QUINLAN. Mr. Chairman, in the agency proceedings before the Commission, there is a broad and liberal right of interested persons to intervene, including the national organizations that are concerned with the basic interests of the various forms of transportation. And, in a number of these cases, which turned out to involve very far-reaching issues, although ordinarily it couldn't be known at the inception of the case whether they would or not, but when it developed that a particular case did involve far-reaching issues, such as the ones which Mr. Ott has cited, the Lenoir and Schenley cases. which went all the way to the Supreme Court, then the national organizations of the common and contract motor carriers, railroad organizations, our organization, the Private Truck Council of America, Inc., and the Private Carrier Conference of the American Trucking Associations were permitted to intervene and were heard on these issues.