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Some difficult problems have arisen with respect to the proposed regulation of directorships of carriers where the directors, although different individuals, represent the same noncarrier firm. The difficulty stems from the widespread custom of directors and officers of industrial corporations sitting on the boards of directors of railroads and other carriers. It is claimed that many such directorships are not intended for purposes of common control.

On the other hand the possibility of using a noncarrier firm as a coverup to avoid regulation under the interlocking directorship statutes remains. The dilemma posed is one of determining which directorships are intended to achieve common control and which are not.

A solution to this dilemma would be to name criteria by which the issue of control could be tested or identified. Such criteria might include measures of financial interest represented by the noncarrier firm, interest in terms of legal representation, or control exercised through banking or similar services. Nominations in such cases could be accompanied by certificates indicating extent of control exercised through financial ownership, legal representation, or service interest.

In its report on S. 1150 the Surface Transportation Subcommittee struck the language regulating common directorships by members of the same noncarrier firm. The Department would interpose no objection to the enactment of the bill in the form reported by the subcommittee. The question of directorships and officers of carriers already lawfully under common management or control appears separable from the issue of interlocking directorships representing the same noncarrier firm.

We have been advised by the Bureau of the Budget that there would be no objection to the submission of our report from the standpoint of the administration's program.

Sincerely,

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DEAR SENATOR: This is in response to your request for the views of the Department of Justice on S. 1150, a bill to amend section 20a (12) of the Interstate Commerce Act to eliminate the necessity for prior approval of the Commission for a person to hold the position of officer or director of more than one carrier when such carriers are in a single integrated system of carriers lawfully operated under common control, and for other purposes.

This bill has been examined, but since its subject matter does not directly affect the activities of the Department of Justice we would prefer not to offer any comment concerning it.

Sincerely,

RAMSEY CLARK, Deputy Attorney General.

MARCH 26, 1965.

Hon. WARREN G. MAGNUSON,

Chairman, Committee on Commerce,
U.S. Senate,

Washington, D.C.

DEAR SENATOR: This is in response to your request for the views of the Department of Justice on S. 1152, a bill relating to the use of Interstate Commerce Commission records and testimony of Commission personnel in regard to accidents involving motor carriers and railroads.

This bill has been examined, but since its subject matter does not directly affect the activities of the Department of Justice we would prefer not to offer any comment concerning it.

Sincerely,

RAMSEY CLARK, Deputy Attorney General.

Hon. WARREN G. MAGNUSON,

DEPARTMENT OF JUSTICE,

OFFICE OF THE DEPUTY ATTORNEY GENERAL,
Washington, D.C., August 31, 1965.

Chairman, Committee on Commerce,
U.S. Senate,

Washington, D.C.

DEAR SENATOR: This is in response to your request for the views of the Department of Justice concerning S. 1731, a bill to amend section 212 (a) of the Interstate Commerce Act, as amended, and for other purposes.

The bill would amend the Interstate Commerce Act to authorize the Interstate Commerce Commission to revoke or suspend the operating certificate of a motor carrier for failure to comply with a rule or regulation issued by it under the act. Under existing law, the Commission's suspension and revocation authority is limited to a violation of a rule or regulation issued by it under part II of the act.

Since the subject measure does not affect the operations of the Department of Justice, we defer to the views of the Interstate Commerce Commission, the agency which would have primary responsibility under the bill.

The Bureau of the Budget has advised that there is no objection to the submission of this report from the standpoint of the administration's program. Sincerely,

Hon. WARREN G. MAGNUSON,

RAMSEY CLARK, Deputy Attorney General.

DEPARTMENT OF THE ARMY,
Washington, D.C., June 30, 1965.

Chairman, Committee on Commerce, U.S. Senate,
Washington, D.C.

DEAR MR. CHAIRMAN: Reference is made to your request to the Secretary of Defense for the views of the Department of Defense with respect to H.R. 5401, 89th Congress, as amended and passed by the House of Representatives on May 6, 1965. The Secretary of Defense has assigned to the Department of the Army the responsibility for expressing the views of the Department of Defense thereon. The objective of H.R. 5401, as passed by the House of Representatives, is to strengthen and improve the national transportation system through amendments to the Interstate Commerce Act which are designed to curb illegal interstate motor carrier transportation, permit shippers to recover reparations from motor carriers and freight forwarders and encourage the development of water transportation upon inland waterways.

Section 1 of the bill would authorize the Interstate Commerce Commission to make cooperative agreements with the States to enforce State and Federal economic and safety regulations governing highway transportation. Section 2 would provide for uniform State registration of ICC motor carrier certificates. Section 3 provides for the extension of the civil forfeiture provisions of the act to cover unlawful operations by motor carriers and certain violations of the Commission's motor carrier regulations, and also it would increase the amounts of civil forfeitures. Section 4 would permit the Interstate Commerce Commission in enforcement proceedings, regardless of where a carrier or other party is served, to obtain service of process and to join any other party or parties necessary to the proceedings. Section 5 would permit any injured person to apply to the courts for enforcement against illegal motor carriers and freight forwarders operating in "clear and patent violation" of the Interstate Commerce Commission certificate or permit law, rules and regulations. Sections 6 and 7 would amend parts II and IV of the act to permit shippers to recover reparations from motor carriers and freight forwarders for unlawfully high rates charged by them. Section 8 would grant the Interstate Commerce Commission specific authority to amend, suspend, or revoke water carrier certificates or permits for nonuse and, further, would permit domestic water carriers to give common carrier service on those inland waterways where no certificate may be in effect without the necessity of obtaining a certificate of public convenience or necessity. H.R. 5401, as introduced, was identical to S. 1727, 89th Congress, and substantially the same as S. 2796 of the 88th Congress. It was also similar to S. 2560, 87th Congress, which had the support of the Department of Defense and was

passed by the Senate. H.R. 5401, as introduced, and S. 1727, 89th Congress, however, include additional provisions amending parts II and IV of the Interstate Commerce Act to permit shippers to recover reparations from motor carriers and freight forwarders for unlawfully high rates charged by them. In this respect, the proposed legislation incorporates the reparations provisions proposed in companion bills, H.R. 5869 and S. 1732, 89th Congress, H.R. 2594, 88th Congress, H.R. 5596 and S. 676, 87th Congress, S. 3389, 86th Congress, and S. 378, 85th Congress. The Department of the Army, on behalf of the Department of Defense, has consistently supported such legislation.

In addition to minor amendments to sections 2, 3, and 5 of H.R. 5401, as introduced, the bill, as passed by the House of Representatives, incorporates as section 8 the provisions of H.R. 5250, 89th Congress, which would give the Interstate Commerce Commission authority to revoke water carrier certificates for nonuse, with a further amendment pertaining to the right of "free entry" into transportation upon waterways where no certificate is in effect.

The Department of Defense is interested in strengthening the national transportation system by the policing of "gray" areas and unlawful operations. The amendments to the Interstate Commerce Act proposed in H.R. 5401, as amended and passed by the House of Representatives, are considered salutary measures intended to accomplish this and have the support of the Department of Defense. Inasmuch as the proposals in sections 1 through 5 and 8 are not vital to Department of Defense operations, it is believed proper to defer to the views of the Interstate Commerce Commission on these sections of H.R. 5401. With respect to sections 6 and 7 concerning reparation awards from motor carriers and freight forwarders, enactment of H.R. 5401 will specifically authorize and establish procedures for the reparation awards with respect to motor carrier and freight forwarder operations subject to parts II and IV, comparable to those now povided in parts I and III of the act. Since the passage of the Motor Carrier Act of 1935 (part II), the Interstate Commerce Commission has interpreted the act as leaving shippers the right to sue in the courts for damages resulting from unlawful rates on a determination by the Interstate Commerce Commission that the rates sued on were unreasonable or otherwise unlawful.

The Supreme Court of the United States, however, in T.I.M.E., Inc. v. United States of America and Davidson Transfer and Storage Co., Inc. v. United States of America, 359 U.S. 464, 3 L. Ed. 2d 952, decided May 18, 1959, held that under the statute, the recovery of reparations or damages arising from th application of unreasonable rates on past motor carrier shipments is precluded. The effect of this ruling is to deprive shippers, including the United States, of a right to damages resulting from unlawful rates on past shipments.

Under the recent Supreme Court interpretation a tariff rate filed by a motor carrier or freight forwarder, regardless of how unreasonable or unlawful it may be, is required by law to be charged by the carrier and paid by the shipper, so long as the tariff rate remains in effect. By reason of the Supreme Court ruling, shippers are now denied the right to a determination as to the justness and reasonableness of rates on past motor and freight forwarder shipments or to recover reparation or damage for the excess paid over and above the reasonable rates.

This situation does not exist in rail and water charges. The Interstate Commerce Act gives shippers a legal right to reparation for unreasonable rail and water charges collected by the carrier. Enactment of the proposed legislation would, in this respect, place on a uniform footing all four classes of carriers under the jurisdiction of the Interstate Commerce Commission.

In these circumstances, the Department of the Army, on behalf of the Department of Defense, favors the early enactment of H.R. 5401.

The fiscal effects of this legislation cannot be accurately estimated. The General Accounting Office has reported, however, that the U.S. Government suffers a substantial loss because of inability to recover charges on motor carrier shipments in excess of those based on reasonable rates.

This report has been coordinated within the Department of Defense in accordance with procedures prescribed by the Secretary of Defense.

The Bureau of the Budget advises that, from the standpoint of the administration's program, there is no objection to the presentation of this report for the consideration of the committee.

Sincerely yours,

STEPHEN AILES, Secretary of the Army.

DEPARTMENT OF STATE,
Washington, June 9, 1965.

Hon. WARREN G. MAGNUSON,

Committee on Commerce, U.S. Senate,

Washington, D.C.

DEAR MR. CHAIRMAN: Thank you for your letter dated May 10, 1965 requesting the comments of the Department of State on H.R. 5401, a bill to amend the Interstate Commerce Act so as to strengthen and improve th national transportation system, and for other purposes.

The Department of State considers that this legislation is primarily of domestic concern and has no objection to its enactment from a foreign policy standpoint. The Bureau of the Budget advises that from the standpoint of the administration's program there is no objection to the submission of this report.

Sincerely yours,

DOUGLAS MACARTHUR II,
Assistant Secretary for Congressional Relations
(For the Secretary of State).
ROCKFORD, ILL., May 18, 1965.

Hon. WARREN G. MAGNUSON,

Chairman, Committee on Commerce,
U.S. Senate, Washington, D.C.

(Attention of Stan Sender).

Due to illness, I will not be able to appear before the Senate Commerce Subcommittee on May 20. I have read the statement of the Chicago Association of Commerce and Industry, which will be forwarded to the committee on May 19 on behalf of the Illinois Territory Industrial Traffic League and the industries which it represents throughout the State of Illinois. I wish to support the statement of the Chicago Association of Commerce and Industry. I particularly wish to emphasize the need for strengthening of the language in section 3 and 4(2) of S. 1727, which would retain the Commission's primary jurisdiction to determine the validity of an operation in dispute under the primary business test and also the substitutions of the provisions of S. 1732, in lieu of sections 5 and 6 of S. 1727, dealing with matters of reparation. It would appear that sections 5 and 6 of S. 1727 only provide a statute of limitations and a description of the term reparation but do not authorize the Commission or the courts to award damages, nor does it provide that the carriers shall be liable for damages to persons injured through violation of the Interstate Commerce Act by motor carriers and freight forwarders subject thereto. The present provisions of S. 1727 place an unnecessary burden on the shippers and the courts if it does provide for reparation. CHELLIS E. BELLEW,

Re S. 1146.

Mr. MACE BROIDE,

President, Illinois Territory Industrial Traffic League.

WHEATON VAN LINES, INC., INDIANAPOLIS, IND., May 14, 1965.

Administrative Assistant, Office of Senator Vance Hartke,
Senate Office Building, Washington, D.C.

DEAR MACE: This is a very short bill now before the Commerce Committee. It was proposed by the Interstate Commerce Commission. To the best of our knowledge, there is no opposition to it from the long-distance moving industry.

The Commission proposed the bill because they recognized the need to eliminate the requirement for approval of pooling arrangements between household goods carriers such as our company.

The pooling section of the law was never intended to apply to household goods carriers, but unless this change is made, the Commission could require any interstate household goods carrier to file a pooling application if they do business through agents who also own a small interstate certificate in their own right. It would simply be an unnecessary requirement that would serve no purpose. We hope you tell the Senator we would like to see this bill passed.

If there is anything you can do to urge the House committee to take action on the companion bill, H.R. 5240, we would appreciate it.

Cordially yours,

о

E. S. WHEATON, President.

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