that. In other words, take a man who hauls a load of oranges from Florida to New York.

Mr. PRESTON. Yes, sir.

Mr. ROGERS. And he makes a 30-day lease of his truck.

Mr. PRESTON. Yes.

Mr. ROGERS. Your statement says he can come back to Florida.
Mr. PRESTON. That is right.

Mr ROGERS. And that he can haul another load of oranges back.
Mr. PRESTON. That is right.

Mr. ROGERS. But he would have to do it not as an itinerant trucker but as a certified lessee carrier.

Mr. PRESTON. That is correct, sir. As the agent of the certified. carrier he would operate, but the terms under which that transportation is carried on would be free from regulation. It would be an exempted movement with respect to the charge and the destination.. Mr. ROGERS. But under the jurisdiction of the certificated carrier. Mr. PRESTON. That is correct.

Mr. ROGERS. Thank you, Mr. Chairman.

Mr. HESELTON. Mr. Chairman.

The CHAIRMAN. Mr. Heselton.

Mr. HESELTON. As these hearings have developed, I recalled that there was a report submitted by the Transportation Association of America to the Congress entitled "Sound Transportation for the National Welfare." I thought there was in it some interesting discussion of this particular problem.

I assume you are familiar with that.

Mr. PRESTON. I am very sorry, sir. I did not hear what it was. Mr. HESELTON. I think it was published in February of this year by the board of directors of the Transportation Association of America.

Mr. PRESTON. I am sorry to say I have no close familiarity at all with that.

Mr. HESELTON. I would be interested in having you make any comment you wish on certain portions of it, because I think they are rather significant in terms of the statement you have made this morning.

Several of the panels dealt with this particular exemption, and the railroad panel covers it quite extensively. It says in part:

These exempt truckers have raided heavily the business of the railroads. As an illustration the Florida railroads are greatly dependent upon the movement of Florida fruits and vegetables. In the 1945-46 season, 16 percent of the movement of this traffic was by truck, and the next year it rose to 22 percent and then to 31 percent, and the 1948-49 season was 53 percent. The movement by truck during the 1948-49 season was the equivalent of 80,914 cars. This truck movement was very largely by exempt truckers.

They went on to recommend that the exemption should be altogether removed, although they point to another section to take care of the farmer and the fisherman, to go to the market.

Now, turning to the highway panel, they come up with a much different recommendation, saying:

We believe it is neither necessary nor practicable to attempt to regulate these primary movements. The damage to the regulated carrier could be largely removed with services regulated beyond the primary market or concentration point. Such an exemption would also be in harmony with the action generally taken by the States on limiting exemption of agricultural products.

As I recall, the investors' panel agreed with the highway panel. Then when this got to the policy board, they went into considerable detail on it and said:

If we were to recommend a solution based upon purely economic grounds we would propose that these exemptions be stricken from the law. However, we do not wish to deprive the farmer or the fisherman of the privilege which may make available promptly the seasonal transportation he requires. We therefore conclude that the exemptions should be continued but that the exemption of motor-vehicle movement should be strictly limited as originally intended; namely, from the area of production to the primary market for the farmer or for the fisherman.

Finally, in another part of the Board's statement there was a notation where they pointed out the terrific conflict within the members of the association and made a note that the recommendations had been sent back, indicating that even among those very able people, as late as February of 1953, there is almost a despairing attitude toward the solution of this particularly difficult problem.

The main thing I had in mind was that it seemed to me that the action of the railroad panel or the recommendation of the railroad panel was predicated definitely upon the alleged injury to the railroads by reason of competition from carriers operating under the exemption.

As I understand it, it is fundamental in terms of congressional action that there has been no intention to protect or promote one kind of transportation in this country as against another. It has been generally accepted in the industry itself. In fact, there is a bitter protest when anybody suggests we should do something based solely upon the impact of a policy on one of the units in our transportation system.

I should like to have you comment as to whether it is a fair conclusion that the railroads' position arises, as was indicated in this panel report, mainly because of the alleged inroads by those who qualify under this exemption on the business of the railroads themselves.

Mr. PRESTON. Well, Mr. Congressman, my answer to that is "No." The position of the railroads with respect to the matter before your committee, and the thing that activates the railroads with respect to the matter before your committee, is as I stated earlier in my testimony. If you are asking me what the attitude of the railroads is with respect to retention, elimination, or restriction from the law of the agricultural exemption itself, I would be glad to state my impression in that regard, but I think it is not strictly pertinent to what is before your committee on this bill.

It is my understanding that the position of the railroads-and the TAA does not speak for the Association of American Railroads or the Short Line Railroad Association-that the position historically has been about that stated by Senator Wheeler in the course of hearings yesterday; namely, that it should be restricted to its original intent and not go beyond a permission to farmers to carry their own products and the products produced by their neighbors to the market, to the primary market, and to come back home with products they find available at the point of the primary market, either for their own use or for the use of their neighbors. We think that was the real original intent of the exemption, and we think that its extension

beyond that has been an unjustified thing, and we are not in favor of the exemption beyond the limitation which I have indicated.

Mr. HESELTON. Well, the railroad panel had this additional paragraph to say, which all deals, as I understand it, with this particular exemption. This is page 190:

The railroad panel also believes that the law should be so amended as to make it perfectly clear that the regulations provided in the statute for common contract carriers by motor vehicle cannot be voided and defeated by a subterfuge such as the practice of trip leasing.

I take it that is in accordance with your own conviction and your own statement here?

Mr. PRESTON. That is correct, sir.

Mr. HESELTON. With the modification that you did indicate, as I understand it, that this 30-day period might in fact work very adversely so far as the true purposes of the exemption are concerned; and that, speaking personally, you would be willing to see a 14- or 15day period substituted for it.

Mr. PRESTON. Well, I said this on that score, Mr. Congressman, and I was careful to say that I spoke only for myself and not as representing anyone else

Mr. HESELTON. I understand.

Mr. PRESTON. If it were felt that great hardship would be imposed, I did not see any insuperable impediment to the application of a 15-day limit with respect to a truly defined return movement following an exempted movement.

Mr. HESELTON. That is all, Mr. Chairman.

Mr. THORNBERRY. Mr. Chairman?

The CHAIRMAN. Mr. Thornberry.

Mr. THORNBERRY. Most of the questions I had in mind this morning have been answered in the responses to other questions of members. I wanted to direct my question, Mr. Preston, to that portion of your testimony where you were good enough to correct the impression I received from the response to my question about the published rates. Let me ask you this-I believe the gentleman responded to my question on common carriers. Are there any certificated carriers, other than common carriers, who can engage in executing trip leases with these itinerant truck operators who are able to charge a rate less than a published rate, or who do not have to publish their rates? Mr. PRESTON. Not to my knowledge.

Mr. THORNBERRY. No kind of contract carriers?

Mr. PRESTON. Oh, you mean the contract carriers. A contract carrier does not have to operate under published rates at all. He is not a common carrier.

Mr. THORNBERRY. That is right. Is he not a certificated carrier, though?

Mr. PRESTON. He is not a certificated carrier, but he is a carrier required to obtain a permit as distinguished from a certificate, in order that he may operate. The permit imposes upon him a moderated degree of regulation as compared with the regulation applicable to the certificated common carrier.

Now, with respect to what he may charge for his service, that is a matter of contract. Unless I am mistaken, the only requirement with respect to his charge is that he shall file with the Commission

the minimum rate that he will charge for his service. He may not go below the minimum, but he is free to go as much higher as he can get the man on the other side of the bargain to go.

Mr. THORNBERRY. That was the point I was trying to get at.

Do you know, from your knowledge of the transportation business, whether these contract carriers engage in trip leasing?

Mr. PRESTON. May I ask my associate the answer to that question? I am told by my associate that some do, but that it is not a practice so widespread among the contract carriers as among the certificated common carriers.

Mr. THORNBERRY. That is all. I surely do thank you.

The CHAIRMAN. Mr. Carlyle.

Mr. CARLYLE. Mr. Preston, some of the witnesses have told us that motor transportation on the highways at this time is in a very disorganized and chaotic condition. Do you take that position?

Mr. PRESTON. I certainly do take that position. From the standpoint of safety, I take that position in view of my own experiences on the highways myself. With respect to the chaotic condition of the industry, in the matter of the unbridled and destructive competition resulting from this trip-leasing practice, I take that position upon the finding of the Interstate Commerce Commission in that regard, after its exhaustive hearings.

Mr. CARLYLE. Of course, there are many different reasons which are the cause of the present plight, which make it chaotic. Would you consider the exemptions which have been provided for unmanufactured fish and unmanufactured farm commodities to be a minor or a major contributing factor to that condition?

Mr. PRESTON. I would consider that those exemptions, coupled with the availability of the trip lease, are an important but probably not the most important factor which brings about the chaotic condition of which we speak.

Mr. CARLYLE. It is, perhaps, one of the most minor factors, would you not think?

Mr. PRESTON. I would say this: The overriding thing, as I sought to make clear earlier, is not the movement of agricultural or other exempted products to market and the return movement with a load. The overriding thing is the itinerant use on a trip-lease basis of privately owned trucks driven by their owners or by a driver employed by the owner, to go anywhere in the country on the basis of no more stable relationship to an authorized carrier than a lease which begins when he takes off and ends when he gets there.

Mr. CARLYLE. All right. Now my question is this: Would you not think that these conditions to which you referred as chaotic could be corrected without disturbing the exemptions now given to unmanufactured farm commodities and unmanufactured fish?

Mr. PRESTON. I would think, Mr. Congressman, that it ought to be possible to bring under control the trip-leasing practice and at the same time impose upon the true return movement, restricted to the return movement of a truck which has previously hauled agricultural products to the market, a modified degree of regulation, if it be found that the full degree of regulation would as a matter of fact impede the operation of the agricultural exemption.

Mr. CARLYLE. Well, if the return load should be taken into consideration in connection with the farm commodities, would not just a few days—say 5 days rather than 15 days or 30 days-in your opinion be sufficient?

Mr. PRESTON. Well, Mr. Congressman, that calls upon me to set myself up as a pretty precisely informed person as to the matter at hand.

Mr. CARLYLE. I understand.

Mr. PRESTON. I would not know whether it should apply for 5 or 10 or 15 days.

Mr. CARLYLE. I understood you to say, when you mentioned 15 days, that you were expressing only your own personal opinion.

Mr. PRESTON. That is quite correct, sir.

Mr. CARLYLE. And you were not speaking for the organization? Mr. PRESTON. For myself I would not know whether a 5-day limitation would be sufficient, or whether it should be 15.

Mr. CARLYLE. That is all, Mr. Chairman.

The CHAIRMAN. Are there any further questions, gentlemen? Mr. BENNETT. Mr. Preston, directing your attention to the 30-day leasing requirement only insofar as it affects safety, do you believe the Commission would have better control over the itinerant gypsy operator whether he is operating under a 30-day lease or under a 24-hour lease?

Mr. PRESTON. No. It is my profound conviction, sir, that the Commission would have a far better, a far more nearly adequate measure of control with respect to safety matters under the 30-day requirement than under a short leasing requirement.

Mr. BENNETT. Why?

Mr. PRESTON. For this reason, that under the trip lease the itinerant trucker merely ascertains from the certificated carrier whether the certificated carrier knows of a load which he might transport under a division-of-revenue basis between the carrier and the trucker. If the certificated carrier says "Yes; I do know of a load of" what have you "to be moved from this point to Buffalo," then presumably the intinerant trucker says "Well, if I transport that, how will we split the revenue?" And let us suppose the certificated carrier says "I will take 20 percent and you take 80 percent," and the itinerant trucker says "O. K. Where is the load? Let us consider I have leased my truck and my services to you for the purpose of that trip, and I will go and pick it up and take it where it is going." And so he does. He goes and picks it up and takes it where it is going, and when he gets to where it is going and unloads it, he has no longer any relationship to the certificated carrier.

Let us take the other side of the picture

Mr. BENNETT. Before you leave that, let me ask you this question: whether the lease was for 5 days, 10 days, or 30 days, the Commission, because of its lack of an enforcement staff, would not know any more about that itinerant trucker than they would if he made a 24-hour trip lease, would they, until after the arrangement had been completed? I am just talking about safety; I am not talking about stability, economics, or anything else. I am talking about looking at this thing from the safety angle, which is one of the angles which has been stressed here.