Do you think, if this committee saw fit to fix the responsibility by enactment, it would be out of its jurisdiction to do so, or should we leave the law fuzzy as it is?

Mr. PRESTON. Oh, I certainly think it would not be without your jurisdiction, and I should think if the Congress should determine that the matter requires clarification, the Congress would appropriately clarify it.

I am sorry I am not able myself to offer any considered opinion as to what the answer is with respect to that relationship.

The CHAIRMAN. Well, I can readily appreciate the difficulty it would be to give a so-called curbstone opinion on a matter of that importance. But a member of the committee yesterday asked me frankly about it. I said the suggestion had been made, it was that of an independent carrier, although I was not particularly impressed with it. Also the suggestion was made it was the relationship of principal and agent, with which I was more impressed. But I did not think it was the master and servant theory which has been mentioned here this morning. That is a new one.

However, just one more question. Would this rule, if it is put into effect, have any monetary effect, favorable or unfavorable, upon railroad receipts?

Mr. PRESTON. You ask me a question that involves something of an imponderable, Mr. Chairman. I would expect this, that over the long pull the evolution and maintenance of a properly stabilized and properly adjusted rate structure in the motor carrier industry would enable the railroads to compete on a fairer basis for traffic as between themselves and the trucking industry. Now, whether competing under those conditions the trucks would gain more or the railroads would gain more I would be wholly unable to say. Our point in that connection is that it would establish a basis of fair competition and, if the trucks profit thereby, well and good and, if we profit thereby, well and good.

The CHAIRMAN. Under those circumstances, in your opinion, would it help or hinder the monetary returns to the railroads?

Mr. PRESTON. It would, in my own estimation, probably help in that the railroads would be afforded an opportunity to compete with a suitably regulated industry rather than one that is operating under more or less chaotic conditions today.

The CHAIRMAN. I do not want my question to infer that the railroads should not be interested in or opposed to legislation according to how it would affect their financial welfare.

Mr. PRESTON. I understand.

The CHAIRMAN. I am merely asking the question in my effort to find out why an appearance is made in opposition to a bill that on its face applies to the motor carrier industry and does not affect the railroads in the operation of the railroads. And I was not able to follow you entirely as to whether your appearance was in any way due to their interest in the safety of the officers, directors, and employees in traveling on the highways as a result of this legislation.

Mr. PRESTON. I mentioned that only to make sure there was no implication of an indifference on the part of the railroads to the factor of safety.

The CHAIRMAN. I appreciate the railroad does not have an indifference toward safety, although sometimes I think in the opinion of some

as to its opposition to legislation that has been offered in this committee on questions of safety there has been a feeling they were not as much interested in the safety of their employees as they should have been.

Mr. PRESTON. On that score I will only say this, that where you find the railroads opposing regulations pertaining to safety in their own fields of operation, the railroads opposition was prompted by their belief that the legislation will not, in fact, promote but will, rather, on the other hand, harm the overall safety of railroad operation. The CHAIRMAN. That may be true. I am not attacking your motives. I am not saying that the railroads, the motor carriers, the labor unions, or anyone else affected by legislation has not a very proper right to advance its own interest. I do not think that is an improper motive to explain the presence of witnesses, certainly, before congressional committees.

I have no further questions at this moment.
Are there any further questions?

If not, that will be all, Mr. Preston. We thank you.

In fact, sometimes I have taken occasion to explain to witnesses that when they are kept on the stand an undue length of time, in their opinion, by questions, they should consider it as a compliment, because the committee is of the opinion that the witness knows something of what he is talking about and it is their desire to find out all he knows about the subject. So it is a compliment to you that this committee has kept you under examination for a period of nearly 2 hours in addition to the nearly one-half hour taken up on your own time. Mr. PRESTON. It is very kind of you to say that.

The CHAIRMAN. We appreciate very much the frankness with which you have spoken and the effort you have made to bring to the attention of the committee features you feel are of paramount importance in the consideration of the committee.

Mr. PRESTON. Thank you very much.

The CHAIRMAN. Now. gentlemen, I have a tremendous problem bearing down on me. The proponents of this legislation, including their time and the time taken in questioning, have had 4 hours of the time of this committee. The opponents have had approximately 10/2 hours. There is a disparity, therefore, in the time. That disparity has not been the result of the opponents having an undue recognition. The most of it is due, I think, to the questioning of the committee which has taken up that amount of time. So I would like the proponents to know you cannot charge the opponents with this situation, althought there is a desire on our part to equalize as far as we can the opportunity of presenting the respective viewpoints.

Now, the proponents have submitted to me a list of 12 witnesses whom it is their desire to have heard. Much against my will, I am beginning to come to the conclusion we cannot finish this today, which I am certainly anxious to do. I am doubtful whether any new matter can be brought to our attention as a result of arguments for or against, but I realize that valuable help can be given to the committee, particularly in the discussion by witnesses who have followed the statements that have already been made by the opponents directing their attention to what already has been said by the proponents and answering what they have said. On the other hand, if there are arguments that

have not been presented that are new, I do not want to prevent anybody from making that type of argument. And when it comes to a hearing of the proponents, I think they could very well profitably devote their time to answering the arguments that have been made by the opponents of this legislation, and in that way the committee will be informed.

What we can do this afternoon I do not know. We are going to continue to hold sessions this afternoon in the hope that at least during the general debate on the floor we would have the opportunity of continuing this hearing in order to conclude today if it is at all possible.

Who will be the next witness?

I must say this, I think, in all fairness, that it will be necessary for me to say that we must give time to the proponents this afternoon. I do not see how we can be fair to both sides without recognizing their right, after 2 days, to have the privilege this afternoon of presenting their arguments.

Who is the next witness?

STATEMENT OF AMOS M. MATHEWS, ATTORNEY FOR THE ASSOCIATION OF WESTERN RAILWAYS, CHICAGO, ILL.

Mr. MATHEWS. Mr. Chairman, my name is Amos M. Mathews. I am attorney for the Association of Western Railways, Chicago, Ill. Mr. Chairman and members of the committee, I appear today on behalf of the Association of American Railroads and its member railroads to speak in opposition to H. R. 3203. I have prepared and there has been distributed a written statement, and I would like to ask permission of the chairman to have it incorporated in full in the record. The CHAIRMAN. You have that privilege.

Mr. MATHEWS. I would like to read a considerable part of it which pertains to matters which I do not believe have been brought specifically to the attention of the committee. I will, however, in reading, skip certain paragraphs which I will designate, which are merely cumulative in the matter under discussion.

May I say just one more prefatory remark? If in one or two places I do seem to be repeating what has been said, that is merely transitional matter to focus what I am trying to say next upon the issue.

The CHAIRMAN. Let me say what has been the hope of this committee since this session opened; that is to have the witnesses file their main statements with the committee 5 days before the hearing and then, on the hearing day, confine their remarks to, say, 15 minutes of summary of what they consider the important features of the main speech.

I take it that what you have in mind to do now is to follow, in some measure at least, that desire of the committee.

Mr. MATHEWs. That is correct.

My statement will be devoted principally to discussion of the objections advanced by the agricultural interests to the Commission's rules. There has been some misunderstanding of the application of the rules, and I shall first speak briefly of that. The rules will not affect in any way a truck operator who carries for hire only livestock or agricultural products exempt from regulation under section 203 (b) (6) of the Interstate Commerce Act and who does not carry for

hire nonexempt commodities. There are many thousands of that class. The rules will not affect in any way the right of a farmer to use his truck occasionally to carry property for hire. That right is given to him by section 203 (b) (9) of the act which exempts—

the casual, occasional, or reciprocal transportation of * * * property by motor vericle *** for compensation by any person not engaged in transportation by motor vehicle as a regular occupation or business.

A farmer, or anyone else, can haul any type of property for hire if he is within the scope of that exemption. That permits a farmer occasionally to haul livestock or crops of his neighbor for hire, and to carry back for hire machinery, feed, or anything else. The rules will not affect the exemption from regulation in section 203 (b) (4a) of— motor vehicles controlled and operated by any farmer when used in the transportation of his agricultural (including horticultural) commodities and products thereof, or in the transportation of supplies to his farm.

The rules will not affect the right of a truckowner to lease a truck without a driver to a regulated carrier, and of course will not apply to a lease of a vehicle with or without a driver between two persons neither of whom is a regulated carrier.

The reason I mentioned the rule above there was that it refers to the testimony of Congressman King. I submit that under Mr. King's statement, when he sends his own truck loaded with his produce to Chicago or some distant market, he does not need a trip lease. He can under the exemption simply make a bargain and carry back property for hire, because he is not principally engaged in the transporting of property for hire, and the movement he mentioned to the distant market was only occasional.

The Commission's rules will apply to a transaction whereby a truckowner without authority under part II of the act leases his vehicle with a driver to a regulated carrier. In such a case the lease must be in writing and for a minimum of 30 days. That will prevent what is known as trip leasing. The agricultural interests and others supporting the bill are opposed to the abolition of trip leasing. They assert that a truckowner without authority under part II, carrying exempt commodities in one direction, must travel empty in the reverse direction unless he has the right to carry nonexempt freight by means of a trip lease with a regulated carrier. The first thing wrong with this claim is that it overlooks the fact that many thousands of unregulated truckers carry exempt commodities in both directions. I think Mr. Scott pointed that out fully. The Commission's rules do not apply to such operations. However, the proponents of the bill contend further that the 30-day lease rule will prevent the exempt commodities haulers from obtaining a return load of nonexempt freight in case he wants it. They say that the one-way trip lease is an absolute necessity in order to assure the carrying of a payload of nonexempt commodities on the return trip.

I shall undertake to show that this contention is not true as a matter of practical operating fact. In the entire course of the hearing before the Interstate Commerce Commission there was no proof that would support this contention. Instead, all of the evidence before the Commission relating to this type of traffic showed that it is being conducted either under leases of 30 days or more or under recurring trip-lease operations which in practical effect last for more than 30 days. Such

evidence, as well as other evidence, is convincing that within all reasonable compass the traffic composed of exempt commodities in one direction and manufactured goods in the other, now being moved by the trip-lease method, can be carried at least as well under the Commission's rules.

I shall skip the next paragraph, for the sake of brevity. I now go to the middle of the page 4 of my written statement.

I shall first refer to the evidence before the Commission relating to the transportation in one vehicle of exempt agricultural products in one direction and nonexempt commodities under lease in the reverse direction. There are in the record illuminating examples which make it plain that the 30-day lease rule will not interfere with this traffic. I might interpolate here and say that I am now about to summarize and quote very briefly from the transcript of the record before the Interstate Commerce Commission. My written statement contains appropriate transcript references, which I will not repeat here; but the words I use are taken from the record in condensed form. In a few cases I have made direct quotes.

One such example is the transportation of livestock from the West to Chicago in vehicles of exempt owner-operators and the return movement of manufactured commodities in the same vehicles under lease to a carrier having authority under part II of the act. The evidence on that subject in the hearing before the Commission was furnished by P. J. Walters, assistant to president, American Transit Lines, of Chicago, Ill.

I also should make clear that the testimony I am about to summarize was given by motor carrier executives and others who were opposed to the exercise of this rule-making power by the Commission.

Mr. Walters testified as follows. His company ordinarily operates approximately 100 pieces of equipment, of which about 15 percent are owned by the company. The men who operate vehicles for the company as lessors on an owner-driver basis work for the company regularly. Many of them have been so working for more than 2 years. Mr. Walters had been with the company for 2 years and he knew that many of the men then regularly engaged as owner-operators were so engaged before he came to the company.

Here is something that seems to me to be very significant in his testimony. The owner-operators and the regular employees of the company take regular turns in carrying the company's traffic, and one cannot make any more round trips per week for the company than the other. A large percentage of the company's business is iron and steel products. Owner-operators who work for the company bring livestock from the west to Chicago and the company utilizes their vehicles on the return trip to haul iron and steel products. There is a regular movement of trucks transporting livestock from the west into the Chicago market and the company has regular movements of steel out on the livestock trucks westbound. Most of the owner-drivers are on long-term leases, 75 or 85 percent of them. In the opinion of Mr. Walters that is a better way of handling the traffic than through trip leasing.

The foregoing is the only evidence in the record before the Commission relating to the transportation of livestock in one direction and manufactured commodities in the reverse direction. It shows that this

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