company is conducting its transportation of manufactured commodities by long-term leases, that the company prefers to do business in that manner, and that the arrangement is satisfactory to the owneroperators since many of them had been working regularly for this company for more than 2 years.

Mr. Walters expressed opposition to any regulation that would prohibit the use of cattle haulers on the westbound movement of steel. But it is clear that the 30 days leasing rule would not do that. Under the 30 days rule the cattle haulers could continue to operate for the company as they are now operating. (See Interstate Commerce Commission v. Service Trucking Co., 186 F. 2d 400.)

Another movement of agricultural products described in the record is that of tobacco. J. C. Weaver, manager, the Transport Corp., Richmond, Va., testified on that subject. His company transports leaf tobacco and carries on a large operation. During 1947 it carried about 25 percent of the crop grown in the United States and about 45 percent of the crop in the area which it serves. The transportation of leaf tobacco is largely seasonal. The heavy movement is during a 17 weeks period beginning early in August and ending around the last of November. The company owns 51 flat-bed trailers. During the marketing season it augments its equipment by entering into leases with approximately 250 owner-drivers. The agreements are for service on a seasonal basis, or as such service may be required. They continue in effect from year to year subject to 30 days' notice of cancellation on the part of either party. The company does not employ an owner-operator for just one trip. Mr. Weaver stated that the average time the company uses the truck of an individual operator with whom it has a lease is from 6 to 7 weeks in some areas and a period of 10 or more weeks in other areas.

Other witnesses testified with respect to the transportation of fruit northbound from Florida in owner-operator trucks and the movement of manufactured commodities under lease in the same trucks back to Florida. J. F. Smalley, secretary and treasurer of Central Truck Lines, Inc., of Tampa, Fla., testified that his company is engaged in operation as a motor common carrier of general commodities over regular routes in Florida and Georgia, principally between Tampa on the south and Atlanta and Savannah on the north. The company owns 300 vehicles and has 600 employees. On a mileage basis trip leasing represents approximately 20 percent of its operation. Revenuewise the percentage would be a little higher because as a rule the trip lease equipment is used on longer hauls than company-owned equipment. Mr. Smalley said that fruit and vegetable dealers owning their own trucks, and owner-operators without Commission authority, transport fresh fruit and vegetables from Florida to points in northern Georgia and that he leases such vehicles for the return trip to Florida.

Referring to this type of operation, Mr. Smalley said that the trip leases his company makes occur and reoccur with the same people. Later in his testimony he repeated:

We procure the great majority of our leased equipment from the same lessors, the same individuals, the same firms, we use their services over and over.

Mr. Smalley said that during the winter months in which fruit is moving northbound out of Florida, there is an influx of additional

population into Florida, and that this causes a movement of manufactured commodities from the north into Florida. He pointed out that the season for the northbound movement of fruit out of Florida, which exists only in the winter, coincides with the movement of manufactured commodities from the north into Florida due to the influx of additional winter population into Florida.

Here is another example of transportation of exempt commodities in one direction and manufactured goods in the reverse direction. This movement to date is accomplished by trip leases, it is true, but it is nevertheless carried on by regularly recurring trip leases. It is clear from Mr. Smalley's testimony that the operations which he described could just as well be carried on under a 30 days' lease arrangement as under the continually recurring trip leases which he has thus far used.

The brief filed before the Interstate Commerce Commission by the Florida Citrus Commission and the Growers and Shippers League of Florida, dated November 1, 1949, on exceptions to the report of the examiner, contains a succinct statement describing the traffic in fruit. and vegetables northward from Florida and the transportation of manufacture commodities southbound. The brief states:

that the movement of Florida citrus and fruits and vegetables is seasonal and in large volume during the season but does not extend year round, that the general commodity traffic of the motor common and contract carriers is likewise seasonal and that the peak of southbound general commodity traffic of the motor common carriers occurs at the same time as the peak of the northbound movement by exempt vehicles of fresh fruits and vegetables from Florida, and that the regulated trip leasing has been of benefit to the exempt carriers, the Florida citrus and vegetable producers, to the motor common carriers and to the public.

That brief argues that trip leasing is necessary in order to continue and maintain this type of round-trip traffic, but there is not one word of factual data referred to in the brief to support the theory that this traffic cannot be just as well carried on under a 30-days lease as under the trip-lease plan. And it seems clear from the testimony of Mr. Smalley that in fact it could be.

The witness for the Growers and Shippers League of Florida and the Florida Citrus Commission presented exhibit 45 in the Commission proceedings. The exhibit shows the distribution by truck from Florida to other States of citrus frun for the season of 1947-48; that is, from October 16, 1947, to May 31, 1948. The exhibit shows a tremendous volume of transportation by truck of citrus fruit from Florida to various northern States. It seems clear that traffic of that magnitude can be conducted by 30 days trip leases.

I might interpolate there that all these parties-referring to Florida-emphasized that balanced movement. During the winter it is a northbound movement of fruit from Florida, but during the same period, because of the great influx of tourist population, there is a movement of manufactured commodities; and the two coincide by reason of vehicles going back and forth from the north to Florida. The foregoing summarizes the evidence before the Commission in respect to transportation of exempt commodities in one direction and nonexempt goods in another direction in the same vehicle.

I will now refer briefly to the testimony of several other motor carrier executives in the proceeding before the Interstate Commerce

Commission. Each of them testified that he was opposed to any rule that would put an end to trip leasing, and each expressed the conclusion that trip leasing was necessary for the operation of his business. But the facts which each placed in the record are inconsistent with this conclusion.

E. L. Sutherland, president of Middle Atlantic Transportation Co., Inc., of New Britain, Conn., was chairman of the truck leasing committee of the American Trucking Associations, Inc. He testified that his company, a motor common carrier, owns no motor vehicles, that it leases all of the vehicles it uses. The leases are on a yearly basis, automatically renewable. His company makes very few trip leases. I think here are some very interesting figures, at this point. From January 1, 1948, to November 1, 1948, out of 8,411 trips made by the company in leased equipment, only 26 were trip leases. The company operates in Connecticut, New York, Pennsylvania, Ohio, and Michigan. Here is a principal spokesman for the trucking industry who owns no motor-vehicle equipment, who conducts a large business by the use of long-term leases of vehicles, and whose use of trip leases is insignificant. Nevertheless, he took the position that trip leasing is necessary for the conduct of his business.

Milton E. Harris, executive vice president of Continental Transportation Lines of Pittsburgh testified before the Commission that his company operates over regular routes in Ohio, Pennsylvania, New Jersey, New York, West Virginia, and Maryland, and does a gross business of over $4 million annually. It uses 450 pieces of equipment of which it owns 150. Sixty percent of the total volume of its business is handled by owner-operators. The owner-operators are all employed under trip leases, but many of them are what the company terms regular owner-operators who have been employed for many years, week after week. For the most part the company has the same group of operators working for it day in and day out, and it attempts to provide them with a balanced load.

Robert B. Gotfredson, president of Trans American Freight Lines, Inc., Detroit, Mich., testified in the Commission proceedings. At this point, for a little identification, Mr. Gotfredson was presented as a witness in the proceedings before the Interstate Commerce Commission by Mr. Howell Ellis, the attorney who appeared before the committee last Tuesday. Referring to owner-operators he said:

We find that in our relationship with leased operators they are very responsible. Many of them have worked for us for years, and have made money in our operation, as evidenced by the fact that they have added to their equipment, and replaced their equipment when it was obsolete and were able to do so on their earnings.

His company attempts to use the same trip-lease operators as frequently as possible. His company has a good reputation with the trip-lease operators and in the majority of instances they come back. Their personnel is made up rather largely of people who do repeat work for them. He said:

We try to have our operators come back to us, sometimes they do and sometimes they do not. It is up to them.

John J. Burke, president of Middle West Freight Ways, Inc., St. Louis, Mo., testified as follows. He operates between St. Louis, Kansas City, Tulsa, and Chicago. He has 50 trailers and 57 tractors and

trucks. He has 20 vehicles operating under term leases for 90 days with a 30-day cancellation clause. His company uses only about 15 vehicles per month under trip leases.

A number of motor carriers introduced evidence before the Commission in opposition to trip leasing. You heard some of them yesterday. They conduct their operations all right without it, and they believe the practice ought to be banned. Their testimony, and the evidence summarized above, is all that the record before the Commission contains dealing in a factual way-and I emphasize "factual" as distinguished from "argumentative"-with the question whether motor transportation can be conducted with leases longer than trip leases. It is clear on the basis of this record that there is no foundation for the contention that trip-leasing is necessary to enable the exempt commodities carrier to obtain a return load, or that trip leasing is necessary at all.

Of course, not all leasing has been carried on in the ways described by the witnesses whose testimony has been summarized above. The director of the Bureau of Motor Carriers introduced evidence at the hearing before the Commission showing the many leasing practices, discovered by his investigation, leading to complete breakdown of enforcement of part II of the act. These practices flourished upon trip leasing of the nonrecurring type. What I want to emphasize is that the evidence of responsible motor carrier executives who testified at the Commission's hearing, including those favoring trip leasing and those opposing it, shows positively and clearly that traffic consisting of exempt commodities in one direction and manufactured goods under lease in the reverse direction is being conducted on a very large scale by leases exceeding 30 days and by regularly recurring trip leases that in practice amount to long-term leases. And the evidence is plain that this traffic is being carried on to the entire satisfaction of the carrier, the owner-operator, and the shipper. No evidence was presented before the Commission that would show that all of the traffic in exempt commodities cannot be handled under 30-day leases just as satisfactorily as that traffic described by the witnesses before the Commission.

The record in the Commission's hearing actually shows that the shipper of exempt commodities will be better served with the 30-day lease rule in effect than he is now. For under the rules the farmer will have a dependable round-trip motor carrier operation to supply his needs. The owner-operator under lease to an authorized carrier will carry manufactured commodities required by farmers and others. When the manufactured commodities are unloaded the owner-operator will be just as free as he now is to serve the farmer in the transportation of exempt commodities. The owner-operator can carry any exempt commodity, since the regulated carrier to which the vehicle is leased needs no authority from the Commission to carry exempt commodities. The transportation charges for carrying a load of exempt commodities will still remain a matter for individual bargain, just as they are now, since the lessee will not be subject to Commission regulation as to rates on exempt commodities, and will not have to file tariffs applying to exempt commodities. The vehicle, while picking up and carrying exempt commodities, will not be confined to the routes or territory described in the lessee's certificate. All of the foregoing is well estab

lished by Interstate Commerce Commission v. Service Trucking Company (186 F. 2d 400). It was there held that a regulated carrier can haul exempt commodities although authority to do so is not granted in its certificate.

The difference between unregulated trip-leasing and leasing under the Commission's rules will be the difference between no regulation, as the Commission has found, and the regulation that Congress intended when it enacted the Motor Carrier Act of 1935. The Commission's rules, while not affecting adversely the transportation of exempt commodities, will insure a better regulated, safer, and more dependable supply of motor carrier transportation to carry manufactured commodities, and that will in turn insure a more dependable and safer supply of unregulated transportation for the carriage of agricultural products.

That completes my statement, Mr. Chairman.

The CHAIRMAN. Before we start with the questioning period, I should like to inquire whether you or someone else would be in a position to supply the Committee with a copy of a so-called trip lease or any other type of lease which is used.

Mr. MATHEWS. Yes, Mr. Chairman. All I could supply you with, and all I know of fram my own knowledge are certain exhibits of trip leases and other leases which were put in evidence in the hearings before the Commission. I should be very glad to supply that.

The CHAIRMAN. That would be very helpful to us. Would that include this so-called trip-lease?

Mr. MATHEWS. Yes.

The CHAIRMAN. It would also include the longer-term lease?

Mr. MATHEWs. Mr. Helmetag has a little better knowledge of the record available than I have. I know we can furnish the trip-lease form.

The chairman asked whether we could furnish a longer-term lease form, from the record before the Commission.

Mr. HELMETAG. To the extent that those leases are in the record we would be very glad to have them reproduced and made available to the chairman and members of the committee in the form of an exhibit, which we could attach to Mr. Mathews' statement. I would submit, however, that perhaps some of these motor carriers who will testify in the future will have in their possession copies of the leases that they use, and they, too, might be willing to make them available to the committee.

But to the extent that they are available in the record and that we have copies we will furnish them to the committee in the form of an exhibit, if that is satisfactory.

The CHAIRMAN. Yes.

(The information is herewith inserted.)

The CHAIRMAN. We will make an endeavor, if that does not give all the information we want, to get it later on in the proceedings. Mr. MILTON DIEHL. Mr. Chairman, if you will pardon an interruption, I represent the proponents, and we would be happy to furnish actual copies of the leases used, rather than some typewritten or printed copy which may be in the record we took to the Supreme Court. The CHAIRMAN. That will be fine. Will you identify yourself for the record?