Senator LAUSCHE. And secondly, you feel that the provisions dealing with civil forfeitures are harsh, severe, especially since the language in the bill does not require any intent or willful action. Mr. ÖTT. That is correct, sir.

Senator LAUSCHE. Do you have any questions?

Mr. SENDER. Yes.

In reading your statement, I notice you do not refer to the Commission injunction suits the Commission brings now. I noticed in the annual report there were some 800 suits brought last year in various district courts.

Are you opposed to the Commission bringing these injunction proceedings directly in court, rather than going through a Čommission proceeding on such issues you mentioned?

Mr. OTT. You will note, sir, at the head of page 15 in my statement, the first long paragraph refers to suits by the Commission for court injunctions. Those are brought now. It is an avenue open to the Commission. The Commission certainly makes some determination in its own mind as to the validity of the suit before it brings it.

Neither the defendant nor the Commission is in any way at the mercy of the whim of a private complainant.

Mr. SENDER. Is it the civil injunction suit that disturbs you, or the fact that it is the whim of a non-Government agency?

Mr. OTT. It is the fact that the complainant is a private party; it is not the Government body which is charged with administration of the act.

I think Mr. Quinlan will elaborate on that, if you would, please. Mr. QUINLAN. I would like to add to that, there is some danger inherent even in this provision for Commission suits for injunctions because it not only is possible for there to be, but there has been, a delegation to a staff employee of authority to initiate the suits.

Chairman Webb has stated in his letter to the House committee that the Commission has delegated to the Director of the Bureau of Inquiry and Compliance the authority to initiate actions on behalf of the Commission. If this authority were used loosely, there would be grave cause for concern, because of the absence of full, formal agency proceedings before the Commission.

As a practical matter, in the first place, both in theory and in practice, as Mr. Ott has pointed out, this is a far cry from the flood of lawsuits that we fear would be initiated by private parties and which would overload the Commission and probably create a situation it would be incapable of dealing with. That is the main distinction

Mr. SENDER. Flood the courts?

Mr. QUINLAN. Not only flood the courts, but exceed the ability of the Commission to cope with them because it would not have control of the initiation of these proceedings.

However, in addition, as a practical matter, so far there have been very few proceedings initiated under this clause which involve the broad issues of public interest, such as the issue of what is permissible private truck operation. There have been a few exceptions and in at least one of those exceptions, the only one which comes to my mind immediately, the Jamestown Sterling case, the Commission staff got

itself in trouble by getting a bad decision which created difficulty not only for the parties involved in the Lenoir, Schenley and Brooks cases, but for the Commission itself, and which finally had to be overruled by the three-judge Federal court.

That case was inconsistent with the principle of the primary business test, which the Commission had been pursuing. It was initiated by the staff on behalf of the Commission, but there was no agency proceeding and the Commission had not given it consideration, so here was an anomaly created by a district court decision under this injunction provision, without the benefit of a prior agency proceeding. That illustrates that there is danger even in that present provision. But, as a practical matter, it has been used with great restraint, so that we are not concerned about it as it has up to now been used. But, if this restraint were thrown to the winds and any private party, frivolous or otherwise, could force the Commission staff into court, then we don't think the Commission or its staff would be able to deal with the situation. It would get completely out of control.

Mr. SENDER. Just one other question.

If in a private injunction suit the plaintiff did not seek a temporary injunction, what would then happen? Would the case not go to a decision on the merits of whether a permanent injunction should be issued, and then only if the court determined there was an illegal violation, would an injunction be issued?

Mr. QUINLAN. Yes, this is what happened in Jamestown Sterling, as I recall, and the representatives of the Commission, who supposedly presented the viewpoint of the Commission to the court, apparently did not present the true viewpoint of the Commission, which it had been following in other cases, with the result that the court lacked the benefit of any findings or rulings by the Commission and reached a conclusion which ultimately had to be overruled.

Senator LAUSCHE. Thanks very much for your testimony.

Mr. OTT. Thank you, sir.

Senator LAUSCHE. Chellis E. Bellew, Illinois Territory Industrial Traffic League, Rockford, Ill.

(No response.)

Senator LAUSCHE. Mack Tanner, general traffic manager, Boise Cascade Corp., Boise, Idaho.

STATEMENT OF LEROY M. TANNER, GENERAL TRAFFIC MANAGER, BOISE CASCADE CORP., BOISE, IDAHO

Senator LAUSCHE. You may proceed.

Mr. TANNER. My name is LeRoy Mack Tanner. I am the general traffic manager of Boise Cascade Corp., in Boise, Idaho.

Boise Cascade Corp. is engaged in private trucking to a large degree, operating some 800 trucks. Some trucks are used for hauling logs in the woods, some serve as local delivery trucks, and some are pickup trucks; but some 95 trucks are used for the interstate hauling of Boise Cascade's products between 40 States.

We feel that our right to operate private trucks interstate will be placed in jeopardy if H.R. 5401 as passed by the House of Representatives or S. 1727 as now worded is allowed to become law.

The amendment to H.R. 5401 to give "permission" to the Interstate Commerce Commission to intercede is not a guarantee that the Commission will exercise primary jurisdiction.

Our concern lies in that provision of the two bills pertaining to the filing of action in the district courts by any person professing to be injured by an operation that he may consider in violation of certain provisions of the Interstate Commerce Act. We feel that this could lead to harassment of the private carrier.

Either bill will, in effect, place the interpretation of the Interstate Commerce Act, insofar as it concerns operations for hire versus private carriage, in the hands of some 370 judges in 92 U.S. district courts. We believe that such interpretation should remain exclusively with the Interstate Commerce Commission.

Boise Cascade is a diversified company, and we manufacture and sell many different products such as lumber, plywood, millwork, paper, pulpwood, boxes, envelopes, all kinds of building materials, and so forth.

We have now, or have had at various times, divisions of the company known by such names as Morrison-Merrill & Co., Bestway Building Centers, Ames-Harris-Neville Co., Graystone Corp., Associated Stationers, Boise Cascade Container Corp., Columbia Envelope Co., Hallack & Howard Co., and so forth.

It is when we are hauling some of our lessor-known products or building materials to our divisions or to our customers that we are vulnerable to harassment. Even now, we experience unfounded complaints on some of our operations which require explanations to the Interstate Commerce Commission.

If we must have some provision for appeal to the courts such as provided for in section 5 of H.R. 5401 or section 4(2) of S. 1727, it should provide that an injured party could apply to the courts only after the Interstate Commerce Commission has ruled that a specific haul is in violation of the act.

We recognize there is a protection provision written into the bill but we do not believe that it can provide full compensation for the harassment that can be caused by the filing of unfounded action with the courts.

Senator LAUSCHE. Any questions?

Are these companies which you have identified by name set up as separate corporations?

Mr. TANNER. No; they are divisions of the company. At one time they were separate corporations, but they were dissolved and made a division of the company, but we continue to use the trade name for business purposes.

Mr. SENDER. Is it the primary business problem that disturbs you or is it a question of validity of leasing arrangements, or both, that you feel this harassment could come in?

Mr. TANNER. We feel that we would be unjustifiably accused for hauling for hire. This is the thing that concerns us. As I mentioned, we have already been accused of hauling for hire many times and have had to justify our private operation with the Interstate Commerce Commission.

We have no question as to the validity of our operation. We are fully aware of the stand the Commission has taken on leased operations so we are not concerned about that.

Senator LAUSCHE. Thanks very much, Mr. Tanner. Is there anything more you would like to say?

Mr. TANNER. I would like to comment just a moment on section 3, about the civil forfeiture provision. We are not as concerned with that section as we are the other one, but we would like to see this provision so amended as to provide that the penalties would apply only for willful violation.

Now we try to keep all of our trucks in first-class condition, but we do have breakdowns that occur on the road which we could not anticipate and prevent before the truck leaves our shops.

Let me give you just two examples. Airlines could not deteriorate with age in just a day or two, but airlines can spring a leak between stops. Therefore, a truck found with deteriorated airlines would certainly be a willful violation of the safety provision. Because an airline with a leak would not necessarily be a willful violation, it could be a violation that just occurred without any advance notice.

Brake linings could not be worn down in just a few hundred miles of travel, but a crack in a brake drum can occur at any moment. Therefore, worn brake linings could be considered a willful violation of the safety provisions, but a cracked brake drum could not necessarily be considered a willful violation because there would be no advance warning that this type of violation was going to take place.

So we feel that we should be protected against unjustified civil forfeiture and that the way to protect the carriers is to have the wording amended to provide that the forfeitures will apply only for willful violations.

Senator LAUSCHE. Thanks very much.

Ronald M. Cobert, counsel, American Institute for Shippers' Association, Inc. J. William Harrell, president, American Institute for Shippers' Association.

STATEMENT OF RONALD M. COBERT, GENERAL COUNSEL, AMERICAN INSTITUTE FOR SHIPPERS' ASSOCIATIONS, INC.

Senator LAUSCHE. Proceed.

Mr. COBERT. Mr. Chairman, my name is Ronald M. Cobert. I appear in behalf of the American Institute for Shippers' Associations, Inc., of which I am general counsel.

AISA is a national trade organization doing business in the District of Columbia. Its members include both shippers' associations and individual manufacturers and retailers who use and benefit by cooperative shipping.

We object to section 5 (b) of H.R. 5401 in its entirety.

In addition to my representation of AISA, I have appeared before the Interstate Commerce Commission and the Federal courts in behalf of numerous individual shippers' associations who have been the objects of formal complaints filed at the Interstate Commerce Commission by three conferences of the American Trucking Associations, Inc.

Thus, I have firsthand knowledge of the rash of legal attacks against cooperative shipping during the past 4 years.

Section 402 (c) of the Interstate Commerce Act permits shippers to

join together for their mutual shipping benefit without Government regulation. This section reads in part:

The provisions of this part shall not be construed to apply (1) to the operations of a shipper, or a group or association of shippers, in consolidating or distributing freight for themselves or for the members thereof, on a nonprofit basis, for the purpose of securing the benefits of carload, truckload, or other volume rates.

My remarks are prefaced here based on my experience in representing numerous shippers' associations before the Interstate Commerce Commission.

I would like, Mr. Chairman, to have my statement read into the record. I will try to summarize the statement for the expediency of the subcommittee.

Senator LAUSCHE. That will be done.

Mr. COBERT. Mr. Chairman, first of all, under section 402 (c) of the Interstate Commerce Act, there is such a thing as legal shippers' association. And section 402 (c) in the words of the Commission evinces a strong congressional policy of the regulation envisioned by the Freight Forwarders Act shall not encroach upon or restrict the right of shippers to join together to their mutual advantage to take advantage of the volume transportation rates.

Under the existing law, as I construe it, Mr. Chairman, the Commission has the right to do what this proposed legislation is allowing any person to do.

The Commission, as far as I know, has never used this power that they have against organizations claiming exemption under section 402 (c), so apparently there may not appear to be a reason for it.

Now, we feel that the proposed legislation is fraught with many dangers to cooperative shippers. Since it would, in our estimation, place what we consider an awesome tool of harassment in the hands of very powerful motor carrier and freight forwarder interests.

The shippers' associations represent the small businessman and they are not as large and powerful or nowhere near as large and powerful as are perhaps what you might call our enemies, sir.

The fact that we feel there will be harassment under the proposed legislation is borne out by the history over the past few years in which three powerful conferences of the American Trucking Associations filed a host of formal complaints against shippers' cooperatives in general.

These complaints numbered some 37 and at the same time as the complaints came in 1961, all of a sudden, there was a rash of newspaper articles condemning cooperative shipping.

Now, Mr. Chairman, as a result of what I consider to be the campaign against cooperative shipping, some associations lost, it is true, but others won. But the important thing is that many associations were not able to afford to fight the powerful trucking interests and therefore they simply went out of existence.

Perhaps this in and of itself is not sufficient justification to defeat this proposed legislation, but when it is coupled, Mr. Chairman, with definite evidence of harassment during this campaign against shippers' associations, we strongly feel that the Congress should not increase so substantially the ability to harass shippers' associations.

In my statement, at page 3. I cite a case in which I represented the defendants and the trial examiner held that there was definite evidence