unlawful, or shall fail to do any act required to be done, the carrier shall be liable to the person or persons injured for the full amount of damages sustained in consequence of any such violation, together with reasonable attorney's fees. The existing section relates only to overcharges by such carriers.

A similar change would be made to apply to freight forwarders by amendment to section 406a of the Interstate Commerce Act (49 U.S.C.A. 1006a).

This bill would impose absolute liability on a common carrier by motor vehicle for doing any prohibited act or failing to do any required act pursuant to the provisions of part II of the Interstate Commerce Act.

The general rule of carrier liability to its passengers is stated in 13 C.J.S. 676 as follows:

"A carrier of passengers is not as absolutely liable for the safety of the passengers as a carrier of goods is for the safety of the goods; but is liable only for injuries to passengers which are caused by its negligence and failing to exercise the proper degree of care, skill, and diligence for such passengers safety ***, the carrier is not an insurer of the safety of passengers, in the sense in which a carrier of goods is said to be an insurer of the safety of the goods, *** and hence is not liable for injuries caused by an accident which an exercise of the proper degree of care, skill, and diligence could not anticipate or prevent * * *:” We submit that this bill would alter the basic, long-estabilshed concept of carrier liability for the safety of its passengers. If S. 1732 were enacted there would be no need to demonstrate that the prohibited act done or declared to be unlawful by the Interstate Commerce Act was indeed a proximate cause of the injuries sustained. It is thus conceivable that a passenger on a common carrier by motor vehicle would, if this bill were enacted, be permitted to recover from the carrier where the passenger was injured in wrongfully attempting to alight from a moving vehicle, simply because the carrier was derelict in observing some prescribed regulation relative to door locks.

The proximate cause rule stated in 13 C.J.S. 755 is as follows:

"As in other cases of actionable negligence, in order to hold the carrier liable, its wrongful act or omission constituting negligence must have been the direct or proximate cause of the injury complained of, and the particular act of negligence relied on as constituting the grounds of recovery must have been the proximate cause of the injury."

In view of the fact that the activities of common carriers by motor vehicle are not an ultrahazardous undertaking it is difficult to understand why this industry should be singled out and subjected to the principle of absolute liability. Furthermore, we believe that persons injured in motor carrier accidents have not experienced any difficulty in recovering for such injuries in negligence actions in which proceeding the plaintiff is free to introduce the carrier's violation of statute or rule as evidence having probative value in establishing the carrier's negligence.

To enact a system of absolute liability would be discriminatory against common carriers by motor vehicles. This industry requires no special classification in the public interest and the tort law applicable generally has been shown to be equally just for common carriers by motor vehicle and persons injured through motor carrier accidents.

The subject of the taxation of attorney fees as costs against an unsucessful party has received considerable discussion and has in general been rejected as unsound. The prinicpal reason for rejection lies in the punitive element of the proposal. This, combined with the absence of a standard for the exercise of discretion by the courts, presents disadvantages which outweigh the theoretical aim at indemnity to the winning plaintiff. It should be noted that the bill makes no provision for the award of attorney fees to the motor carrier if it prevails in the action.

For the foregoing reasons, we respectfully request that this bill not receive favorable consideration.

Respectfully submitted.

STATEMENT OF WALTER R. MCDONALD, CHAIRMAN, AD HOC COMMITTEE OF THE EXECUTIVE COMMITTEE, NATIONAL ASSOCIATION OF RAILROAD AND UTILITIES COMMISSIONERS

My name is Walter R. McDonald. I am a member of the Georgia Public Service Commission, 244 Washington Street SW., Atlanta, Ga. My appearance today is as chairman of the ad hoc committee of the executive committee of the National Association of Railroad and Utilities Commissioners.

The National Association of Railroad and Utilities Commissioners is the national organization of State regulatory commissions which are individually charged with the duty of regulating intrastate transportation operations within their respective States and with the responsibility of appearing before Congress and the Federal agencies on matters of concern to the citizens of their respective States. The National Association of Railroad and Utilities Commissioners has an office here in Washington, D. C. (provided in the Interstate Commerce Commission Building by act of Congress) and regularly represents the combined membership in matters before Congress and Federal regulatory agencies.

The National Association of Railroad and Utilities Commissioners and the individual State commissions have long recognized the need for uniformity in State requirements for registration of interstate motor carrier operations. As long ago as 1941, the National Association of Railroad and Utilities Commissioners established a standing committee to seek uniformity in the regulation and taxation of for-hire motor carriers operating in both interstate and intrastate commerce. That committee, still actively functioning, has recommended over the years changes in State commission procedures which have already appreciably lessened the burden of recordkeeping for all carriers. Based on the studies of this committee the National Association of Railroad and Utilities Commissioners opposed the provisions of S. 2560 in the 87th Congress and the original provisions of H.R. 9903 (88th Cong.) for the reasons that the proposals therein encroached upon State jurisdiction and were generally agreed to be impractical of enforcement.

When H.R. 9903 was proposed in the 88th Congress, the executive committee of the National Association of Railroad and Utilities Commissioners appointed the ad hoc committee of which I am chairman to work with the Interstate Commerce Commission and representatives of the transportation industry to arrive at mutually satisfactory registration provisions in lieu of those originally suggested in that bill. Following months of conferences between our committee, the Interstate Commerce Commission, and all segments of the industry, agreement was reached on the language that was reflected in the final draft of H.R. 9903 and in S. 2796.

That agreed-upon language has been incorporated into section 2 of S. 1727 and I am here today to indicate to your committee the full agreement of the National Association of Railroad and Utilities Commissioners with this provision of S. 1727 as well as with the other sections of that bill.

So far as our association is aware, there has been only one objection of substance expressed to the registration provisions of this legislation. This objection, voiced in the hearings on the companion House bill, H.R. 5401, by the National Association of Motor Bus Owners pertained to the provision requiring the filing of evidence of currently effective insurance. The revision sought by the motor bus owners was to permit the filing of evidence of self-insurance (when such self-insurance had been approved by the Interstate Commerce Commission) in lieu of evidence of commercial insurance coverage. Inasmuch as the regulations of the Interstate Commerce Commission pertaining to self-insurance are sufficiently comprehensive to protect the public, our committee readily consented to an appropriate amendment authorizing such alternative filing, and such amendment was made in H.R. 5401 and should be incorporated in S. 1727.

This requirement, as well as the requirements of some of the other provisions of section 2 (and other sections) of S. 1727, will undoubtedly require modifications of both State commission rules and State laws in some States. It is in the general interest of all of us, however, to promote not only the uniformity here sought, but also the cooperative efforts to eliminate illegal operations, which efforts will be greatly strengthened by this bill. We do not anticipate any undue difficulty in State compliance with these provisions and urge the passage of this bill in the interest of more effective motor carrier regulation.

STATEMENT OF WALLACE M. SMITH ON BEHALF OF AMERICAN MUTUAL INSURANCE ALLIANCE

The American Mutual Insurance Alliance, a trade association of 105 mutual property and casualty insurance companies, appreciates this opportunity to express its views in S. 1732.

There are two principal areas of concern to the insurance industry in the proposed legislation. First, the bill would amend section 204a of the Interstate Commerce Act (42 U.S.C.A. 304a) in such manner that the new language would

impose absolute liability on a common carrier by motor vehicle for doing any prohibited act or failing to do any required act pursuant to the provisions of part II of the Interstate Commerce Act. The effect of the new language would be to ignore the requirement that the proximate cause for an injury be the act of the common carrier and instead require only a showing that the Interstate Commerce Act was violated.

Imposing a system of absolute liability on common carriers by motor vehicle seems unnecessary in view of the fact that there is presently an adequate and just remedy for injured parties under the present law. The action called for by this legislation creates a basis for discrimination toward common carriers by motor vehicle.

The second area of concern involves the proposed authority of the Interstate Commerce Commission to act as an administrative tribunal in cases where suits are brought for recovery of damages under the provisions of subsection (a) of the bill. Proof of fault and damages are matters better suited to the functions of the courts presently in our judicial system and it is felt that the addition of such an administrative tribunal as is pictured in S. 1732 would confuse rather than clear the problem.

(The following letters were received for the record :)

CELANESE CORP. OF AMERICA,
New York, N.Y., May 21, 1965.

Re S. 1727 to amend the Interstate Commerce Act.

Hon. FRANK J. LAUSCHE,

Chairman of Subcommittee on Surface Transportation,
Senate Office Building,

Washington, D.C.

DEAR SENATOR LAUSCHE: In connection with the proposed bill amending the Interstate Commerce Act, it seems timely and appropriate that certain additional amendments be made in that act for the purpose of remedying certain defects which have been interpreted by the Supreme Court in a way which we doubt very much was intended by the original framers of the act. We refer to the case of Schenley Distillers Corp. v. United States et al, 66 S. Ct. 247, 326 U.S. 432 (1945) which construed the act in such a way that a company which carries goods for separately incorporated divisions of the same enterprise (even though they be wholly owned subsidiaries or affiliates) cannot be a private carrier. This means that an enterprise such as ours which operates through many domestic subsidiaries is in effect required to have each subsidiary set up a separate and independent trucking system to carry the goods of that subsidiary, and this I am sure you will understand is highly uneconomic. Moreover there are often good reasons in connection with State regulatory practices and taxation why an enterprise would wish to carry on all of its trucking operations through a separately incorporated subsidiary. There seems to be no reason of national policy as to why a corporation transporting goods only for a single enterprise of which it is a part should not qualify as a private carrier.

As you know Celanese Corp. of America conducts a very sizable business in chemicals, fibers, and plastics and, through subsidiaries, petroleum, paints, and plastic housewares, and had consolidated net sales for 1964 of over $700 million. It operates 17 plants and laboratories in 12 different States of the United States and also carries on a worldwide manufacturing business. It has over 33,000 employees. Its subsidiary, Champlin Petroleum Co., produces and sells petroleum products through 1,200 branded marketing outlets throughout the Midwest. Its subsidiary, Devoe & Raynolds Co., Inc., produces paints and accessories in 8 factories and sells them through about 100 stores throughout the country. Its subsidiary, Fesco, Inc., produces plastic housewares in a Pennsylvania plant and is planning another plant in California. These products are distributed nationwide. The Celanese fibers and chemical plants are located throughout the East, the South, and the Southwest. We also have dyeing and finishing plants operated by subsidiaries in New York State and in North Carolina. The tremendous amount of traffic in bringing the products of these plants to market and supplying these plants with raw materials requires a very extensive trucking operation. In 1964, of the $8 million cost incurred by Celanese for highway transportation of its products and raw materials, about $1,300,000 was spent on its operation as a private carrier in interstate commerce involving the use of 88 trucks and trailers in 15 States and employing 70 people. Facing the problem of the most efficient servicing of our petroleum, paint, and plastic housewares businesses,

recently acquired, we do not feel that we should be economically hampered by the fact that these businesses are operated as separate corporations. We do not think that Congress intended any such result.

Consequently, we are proposing a few simple amendments in S. 1727 which we believe would correct this situation. These amendments are enclosed herewith for your consideration and we would hope that your committee might see its way clear to insert them in the bill.

We should appreciate an opportunity in any event to appear before your committee and make a statement (both written and oral) in support of the proposal. With appreciation of any favorable consideration you may give to these amendments, we remain,

Very truly yours,

LAWRENCE S. APSEY, General Attorney.

AMENDMENTS PROPOSED BY CELANESE CORP. OF AMERICA TO 49 U.S.C.A.
303 (a) and (c)

(14) The term "common carrier by motor vehicle" means any person which holds itself out to the general public to engage in the transportation by motor vehicle in interstate or foreign commerce of passengers or property or any class or classes thereof for compensation, whether over regular or irregular routes, except transportation by motor vehicle by an express company to the extent that such transportation has heretofore been subject to chapter 1 of this title, to which extent such transportation shall continue to be considered to be and shall be regulated as transportation subject to chapter 1 of this title, and except transportation within the scope, and in furtherance, of a primary business enterprise (other than transportation) of such person or its affiliate.

(15) The term "contract carrier by motor vehicle" means any person which engages in transportation by motor vehicle of passengers or property in interstate or foreign commerce, for compensation (other than transportation referred to in paragraph (14) of this subsection and the exceptions therein), under continuing contracts with one person or a limited number of persons either (a) for the furnishing of transportation services through the assignment of motor vehicles for a continuing period of time to the exclusive use of each person served or (b) for the furnishing of transportation services designed to meet the distinct need of each individual customer.

(17) The term "private carrier of property by motor vehicle" means any person not included in the terms "common carrier by motor vehicle" or "contract carrier by motor vehicle," who or which transports in interstate or foreign commerce by motor vehicle property of which such person or its affiliate is the owner, lessee, or bailee, when such transportation is for the purpose of sale, lease, rent, or bailment, or in furtherance of any commercial enterprise of such person or its affiliate.

(24) An "affiliate" of, or a person "affiliated" with, a specified person, is a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by or is under common control with, the person specified.

(25) The term "control" (including the terms "controlling", "controlled by" and "under common control with") means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise.

Section 303 (c):

Except as provided in section 302 (c) of this title, subsection (b) of this section, in the exception in subsection (a) (14) of this section, and in the second proviso in section 306 (a)(1) of this title, no person shall engage in any for-hire transportation business by motor vehicle, in interstate or foreign commerce, on any public highway or within any reservation under the exclusive jurisdiction of the United States, unless there is in force with respect to such person a certificate or a permit issued by the Commission authorizing such transportation, nor shall any person engaged in any other business enterprise transport property by motor vehicle in interstate or foreign commerce for business purposes unless such transportation is within the scope, and in furtherance, of a primary business enterprise (other than transportation) of such person or of any affiliate of such person.

Hon. FRANK J. LAUSCHE,

INTERNATIONAL APPLE ASSOCIATION, INC.,
Washington, D.C., May 20, 1965.

Chairman, Subcommittee on Surface Transportation, Senate Committee on Commerce, Senate Office Building, Washington, D.C.

DEAR MR. CHAIRMAN: As producers and distributors of agricultural commodities, members of International Apple Association, Inc., are vitally interested in truck transportation, and we respectfully request that the views expressed in this letter with regard to S. 1727 and H.R. 5401 be made a part of the record of hearings on these two bills held by your committee starting May 10, 1965. International Apple Association, Inc., is a nonprofit membership organization serving the entire fruit industry with special emphasis on apples and winter pears. All segments of the fruit industry from producers to packers, shippers, brokers, wholesalers, and retailers are represented in the association. The memers produce and/or handle in excess of 75 percent of the U.S. commercial apple and winter pear crops and represent as well a substantial segment of the Florida fresh citrus industry.

International Apple Association is primarily interested in the exempt haulage covered by section 203 (b) (6) of the Interstate Commerce Act.

First of all, let me explain that International Apple Association and its members are opposed to illegal transportation, which we understand the bills under consideration are designed to cure. There are, however, some areas of this legislation which we believe would work a real hardship on certain motor carriers without curing the evils intended to be covered.

There is no objection on the part of International Apple Association to the increase in civil forfeitures carried in section 3 of S. 1727, providing they are limited to violations of operating authority. We do object, however, to extension of these civil forfeitures to violations of the safety regulations.

The safety regulations as issued by the Interstate Commerce Commission are contained in a pamphlet of more than 70 pages dealing with many subjects. Some slight infraction of these rules of which an operator might be totally unaware could make him the victim of considerable financial loss. True, the wording is "not to exceed $500 for each such offense" and "not to exceed $250 for each additional day," but who is to say whether it will be less than the maximum?

We urge the deletion of this portion of section 3 of S. 1227. It was not contained in H.R. 5401 as it passed the House of Representatives and was reported to the Senate.

Section 222 (b) (2) as carried in section 4 of S. 1727 would permit any person injured by a clear and patent violation of section 203 (c), 206, 209, or 211 of the Interstate Commerce Act to file suit in district court for enforcement of the act, with the party prevailing in such action permitted, at the discretion of the court, to recover reasonable attorney's fees and costs allowable under the Federal rules of civil procedure. In such action, a copy of the application for relief "shall be served upon the Commission and a certificate of such service shall appear in such application."

It is the last sentence carried in subsection (b) (2) to which International Apple Association objects, in that it implies the possibility of prior determination of operating validity for common and contract carriers and for private carriers by motor vehicle, but omits the possibility of prior determination by the Interstate Commerce Commission as to the validity of motor carriage exempt under sections 203(b) (4a), (5), or (6).

This would appear to invite a flood of harassment suits against exempt carriers who are, for the most part, small businessmen without the means of retaining legal counsel. Suits filed in district courts over the country could bring about many and varied interpretations as to what is legally exempt haulage. If one group of motor carriers is to be permitted the expertise of the Interstate Commerce Commission, then it is thought that all carriers should have the same privilege.

We respectfully urge your favorable consideration of these suggestions.

Sincerely yours,

FRED W. BURROWS, Executive Vice President.