The CHAIRMAN. It is not often that we are able to have one of our own colleagues so well informed on the subject which he appears before us on. Certainly, the statement that you have brought us today from the result of your actual experience will prove very helpful to the committee in the consideration of this legislation. We thank you.

Mr. KING. Thank you.

The CHAIRMAN. Are there any other Members of Congress present? If not, the next witness will be Mr. Matt Triggs, representing the American Farm Bureau Federation.

STATEMENT OF MATT TRIGGS, ASSISTANT LEGISLATIVE DIRECTOR OF THE AMERICAN FARM BUREAU FEDERATION, WASHINGTON, D. C.

Mr. TRIGGS. Mr. Chairman.

The CHAIRMAN. About how much time do you expect to take. Mr. Triggs!

Mr. TRIGGS. About 12 minutes, sir.

The CHAIRMAN. If you should go on and take 15 minutes, we shall not object.

Mr. TRIGGS. May I say this, the agricultural groups met together on a number of occasions to consider your request for keeping the testimony down to a minimum avoiding repetition and meeting your schedule of time. Some of the subsequent witnesses will plan to merely file their testimony; others will make very brief statements, perhaps relying on testimony that is already filed.

However, of course, we cannot control the amount of time devoted to questioning, but we will do the best we can to keep the testimony down to a minimum.

Shall I proceed with my statement?

The CHAIRMAN. You may proceed.

Mr. TRIGGS. My name is Matt Triggs, I am assistant legislative director of the American Farm Bureau Federation, an organization of 11⁄2 million farm families located in 47 States and Puerto Rico.

The recent determination by the Supreme Court that the Interstate Commerce Commission has authority under the Interstate Commerce Act to regulate the leasing practices of certificated truck carriers clears the way for the Interstate Commerce Commission to place such regulations in effect. We have no objection to the major portion of the presently proposed regulations (originally issued May 8, 1951, in Ex parte MC-43). We are opposed to one provision of the proposed leasing regulations which would prohibit certificated truck carriers from leasing the vehicles of exempt truck operators unless such leases are for at least 30 days. This provision would terminate the long-established practice of "trip leasing" with harmful consequences to efficient and economic marketing of farm commodities.

EFFECTS UPON TRANSPORTATION OF FARM PRODUCTS

If such regulations are put in effect, truck haulers of farm commodities, who now obtain return hauls by leasing their trucks to competition of carriers who have an opportunity to obtain two-way

empty. Obviously, they will have to charge more for hauling farm products, thus increasing the cost of marketing and the spread between farm and consumer prices.

The economic loss involved in such wasteful use of equipment, manpower, and gasoline will be reflected in higher prices to consumers or lower prices to farmers or both.

In a great many instances, agricultural haulers, faced with the competition of carriers who have an opportunity to obtain two way revenue, will no longer be able to survive. To the extent that they are unable to survive, farmers will be denied a flexible and economic type of transportation peculiarly adapted to their needs.

EXEMPT HAULERS PROVIDE FLEXIBLE AND ECONOMIC SERVICE

Agricultural haulers are generally small operators. They live in small towns and farming communities. They will load on farms. They will adjust their loading schedule to the farmers' time schedule. They will give special services on the farm, en route, or at the market. In a word, they give flexible, individualized service. We do not believe that the large certificated operators will be able or willing to provide such individualized service.

Agricultural haulers are free to reach any market. They can go to the market where the price is best. They facilitate more uniform distribution, avoidance of gluts in certain markets, and more efficient marketing. Certificated carriers are not free to do this. From many agricultural areas, it is impossible to reach certain markets by authorized common carriers.

Agricultural haulers provide a transportation pool, which can be readily shifted to handle emergencies and to take care of seasonal marketing. Common carriers cannot do this. They cannot economically own equipment which would be idle most of the time in order to be prepared to handle heavy seasonal movements.

The effect of the proposed prohibition of "trip leasing" on the transportation of farm commodities, therefore, would be, first, more costly transportation and, second, to the extent that agricultural haulers are unable to survive, less efficient marketing and lower prices for farm products.

THE COMMISSION'S CASE

What then does the Interstate Commerce Commission rely upon to support its proposal? The Commission summarizes its position by stating the proposed regulations are "essential if we are to maintain effective control over operational safety, carrier responsibility, and the economics of the industry." Let us examine each of these propositions.

OPERATIONAL SAFETY

In the voluminous report issued by the Commission in connection with MC-43 the conclusion is stated that trip leasing is "inimical" to proper administration of the Commission's safety regulations. This conclusion is not based on any statistical survey or any data whatsoever demonstrating that the safety record of exempt haulers is any poorer than the safety record of authorized carriers. In fact, the Commission carefully avoids stating any such conclusion.

The Commission argues that exempt haulers are less careful in complying with some of the regulations of the Commission. But against this it may be argued that the most powerful incentive for safety is personal interest, and that a driver who owns his vehicle has a natural incentive to drive carefully and take care of his equipment which is lacking in the case of a hired driver.

The Commission argues that, if leased trucks must be leased for at least 30 days, the authorized carrier will be better able to require the operator of the leased truck to comply with the Commission's safety regulations. In rebuttal it should be pointed out (1) that an empty truck is the most dangerous vehicle on the road and (2) that if large numbers of trucks which now obtain return hauls must return empty there will be a larger number of trucks on the road, thus contributing to traffic congestion and the incidence of accidents.

We submit that the weight of the argument is against the Commission's position; that a prohibition of trip leasing means more accidents, not less.

CARRIER RESPONSIBILITY

So far as carrier responsibility in the transportation of farm commodities is concerned, we are satisfied to leave this to the contractual relationship between the farmer-shipper and the agricultural hauler. So far as carrier responsibility with respect to the transportation of nonagricultural commodities is concerned, we believe that the provisions of the Commission's order in MC-43, other than the 30-day lease provision, together with other regulations of the Commission, are adequate to fix carrier responsibility.

We do not believe that the provision that leases must be for at least 30 days will add significantly to the responsibility of the carrier, and that in fact, for reasons set forth in the following section may even operate to reduce carrier responsibility.

ECONOMICS OF INDUSTRY

The Commission's argument in this connection is that the practice of trip-leasing gives rise to "satellite" practices that affect the stability of the industry such as the violation of published rates, the departure from authorized routes and the demoralization of the rate structure.

So far as the first two abuses listed above are concerned, it should be pointed out that these practices are both violations of ICC regulations; that in both cases the common carrier violating the regulation is subject to ICC control; that the abuses are not exclusively practiced by common carriers who lease exempt vehicles; that the violations are of such character as may be readily detected by adequate enforcement programs; that the remedies available to the Commission against common carriers who violate its regulations are drastic and effective if utilized, and finally that the regulations in MC-43, other than the 30-day provision we are objecting to, will aid in preventing abuses.

Finally, we come to the Commission's argument that those truck common carriers who lease equipment are able to maintain lower costs than those carriers who do not, and that this is demoralizing to the rate structure. When regulation of transportation is carried to the point that efficient use of equipment and manpower is prohibited for

fear of the effect upon rates, this is carrying regulation too far. If this is a legitimate purpose of regulation, on the same basis the Commission should prohibit trucks from using our more modern highways or stop the trend toward diesel equipment, or do something to stop the trend toward private transportation.

We submit that the prohibition of trip leasing will not operate to accomplish the Commission's objective, but on the contrary will have the reverse effect.

It is no secret that the Commission is not able to adequately enforce the law with respect to unauthorized carriers transporting nonagricultural commodities. The real threat to rate structures, the abuse that will not be touched by the Commission's proposal, is represented by the practice of unauthorized concerns making contracts directly with shippers and operating completely outside the Commission's orders with respect to rates and routes.

If the ICC order in MC-43 is implemented, the operators of exempt trucks will be provided with the strongest possible incentive (because the regulation would bear so harshly upon them, in many cases threatening their survival) to step over the line and engage in unauthorized transportation. The problem of enforcement would be very substantially increased. The resulting confusion and chaos will be far more demoralizing to the rate structure than the practice of trip leasing.

I am going to skip through the next two paragraphs.

The CHAIRMAN. You are within your time limit. You do not have to skip them unless you wish to.

Mr. TRIGGS. Well, there are other witnesses I think who will cover them. I would like to read the final paragraph under that.

Even if it be considered that there is some merit to the Commission's proposal relative to 30-day leases, and this we consider dubious, we submit that such assumed advantage is far outweighed by the adverse effects which such ruling would have upon the efficient and economic transportation and marketing of farm products.

The next section reviews H. R. 3203, which the committee's discussion has indicated they are already familiar with; so I will skip that and merely close by respectfully urging upon behalf of the American Farm Bureau Federation the early action of the committee to approve H. R. 3203.

Thank you.

The CHAIRMAN. Mr. Triggs, on behalf of the committee, I want to thank you for your compliance with the desires of the committee with respect to conservation of time. You have said a whole lot in a very few minutes.

Mr. TRIGGS. Thank you.

Mr. DOLLIVER. Mr. Chairman.

The CHAIRMAN. Mr. Dolliver.

Mr. DOLLIVER. I too want to compliment Mr. Triggs on his fine, comprehensive, yet very brief statement.

There are one or two things that I want to clear

up

One is that the present law does make a special exemption with respect to the control of trucking operations as it refers to the agricultural products from the farm to the market.

Mr. TRIGGS. That is right.

Mr. DOLLIVER. And that is in the fundamental law regulating the operation of trucks.

Mr. TRIGGS. Yes, sir.

Mr. DOLLIVER. Now, if I understand your testimony correctly— and it occurs I believe on page 4 of your statement-your principal objection to the proposed order, MC-43, is the 30-day limitation requiring that the trucks be leased for a period of 30 days and not less. Mr. TRIGGS. That is correct; that is the only objection.

Mr. DOLLIVER. That is your only objection?

Mr. TRIGGS. Yes, sir.

Mr. DOLLIVER. So that, if that part of the order were eliminated, you would have no objection to this proposed order; is that correct? Mr. TRIGGS. That is correct.

Mr. DOLLIVER. And your reason for taking that position is the 30-day requirement would utterly destroy or make it utterly impossible the economic and efficient use of these trucks on back hauls?

Mr. TRIGGS. That is correct, sir.

Mr. DOLLIVER. No, MC-43, as it effects rates, or as it effects any other details, you make no reference to or objection to in your testimony?

Mr. TRIGGS. That is correct. Now, the MC order does not deal with the rates except with the division of rates, and we are making no opposition to that point.

Mr. DOLLIVER. As a matter of fact, generally speaking, there is no advantage, ratewise, on a back haul as opposed to the ordinary carrier, is there?

Mr. TRIGGS. Well, there is none to the shipper, and for that reason— the present practice has a minimum effect upon demoralizing the rate structure as compared with some of the other practices-we are not here to defend.

Mr. DOLLIVER. And, of course, the truth is that to deny the carrier of agricultural products the right to have a back haul would very adversely affect the rate that the farmer would have to pay to get his stuff to market.

Mr. TRIGGS. Very much so, sir.

Mr. DOLLIVER. I think that is all, Mr. Chairman. Thank you.

Mr. O'HARA. Mr. Chairman.

The CHAIRMAN. Mr. O'Hara.

Mr. O'HARA. Mr. Triggs, has the American Farm Bureau Federation taken action officially upon the position which you have expressed this morning?

Mr. TRIGGS. Yes, sir. It was obvious I think nearly a year ago that this issue was coming to this conclusion, assuming the Supreme Court upheld the Interstate Commerce Commission's order.

The matter has been discussed at a half dozen board meetings. The matter has been discussed at our annual meeting and is incorporated in a resolution of the American Farm Bureau Federation that I should have brought, which I forgot to do.

The CHAIRMAN. You may make it a part of your remarks.

Mr. TRIGGS. Thank you. That puts the organization clearly on record for the position that I am presenting to you today.

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