While it would not put Safeway out of business to comply with this provision of the leasing rules, it would materially increase their cost of operation and no material benefit would be gained by anyone, Safeway could continue in existence and comply with this regulation. It is doubtful if it could continue in existence under the trip leasing rules as now set up by the Commission.

STATEMENT OF JOSEPH E. KELLER ON BEHALF OF PRIVATE CARRIER CONFERENCE OF ATA

My name is Joseph E. Keller. I am associated with the law firm of Dow, Lohnes & Albertson, 600 Munsey Building, Washington, D. C. I appear here today on behalf of the Private Carrier Conference of the American Trucking Associations, Inc. The conference has authorized me to make this statement in connection with H. R. 3203.

The Private Carrier Conference is an independent, autonomous association with offices at 1424 16th Street NW., Washington, D. C. Its direct membership is composed of over 1,300 firms which operate private motortrucks in the furtherance of their principal business activity including mining, lumbering, farming, manufacturing, processing, distribution, and so forth. In addition, the conference speaks for all of the thousands of private carrier members of State trucking associations affiliated with the American Trucking Associations, Inc. There are 51 such State organizations, 1 in each State and the District of Columbia, with 2 such affiliated groups in the States of Illinois and California. Since 87 percent of the trucks on the Nation's streets and highways are said to be engaged in private carriage, the Private Carrier Conference, as you can see, represents a vast segment of truckowners in the United States.

The conference appears here today in support of H. R. 3203. It believes that enactment of this legislation is essential if the efficiency, economy and flexibility of the motortruck is to be preserved. If H. R. 3203 is not given favorable consideration by the United States Congress, we feel that the free flow of commerce among the States will be dealt a severe blow and that artificial restraints upon free enterprise, especially as concerns the movement and marketing of farm products, will cause grave repercussions in our agricultural community and attendant increases in prices to consumers.

The Private Carrier Conference numbers among its members many farmers, livestock producers, fresh food and vegetable growers, fish and seafood processors, and other agricultural enterprises. These companies own their own motortruck units and haul their own products to market as private carriers. After unloading at destination, it is sometimes to their advantage to lease their vehicles to authorized common and contract carriers for the return trip. This arrangement has been built up over the years and has proven mutually beneficial to our farmer members as well as the authorized ICC carriers. The farmer is enabled to sell his products at a lower cost as a result of the efficient use of his vehicle in both directions. The common carrier benefits in that he is not required to purchase additional equipment to meet peak demands. In most cases, the movement of agricultural commodities in one direction coincides with a peak movement of general commodities in the reverse direction, thus adding to the economic advantages of such leasing transactions.

Yet, if remedial legislation is not enacted immediately, the leasing regulations promulgated by the Interstate Commerce Commission in ex parte MC 43 and recently upheld by the United States Supreme Court, will be placed into effect, and historic leasing practices of the above described nature will be prohibited. Such arbitrary restrictions will destroy completely economical transportation as we know it today, and will require, instead, shameful waste in manpower, equipment and fuel, increased congestion on the highways by requiring 2 vehicles to do the job of 1, and will ultimately result only in increased cost of food products to the American housewife.

In defense of its restrictive regulations governing truck leasing, the Interstate Commerce Commission has cited safety of operations as a primary reason for such action. The record in the ICC proceedings, ex parte MC 43, contains a detailed analysis by a number of authorized carriers who operate both leased and owned equipment. This shows owner-operators had safety records considerably better than employee drivers. These were detailed checks involving a period of about 2 years for each of 5 large carriers.

The private carrier conference has consistently maintained its position with reference to trip leasing. In a statement made before the Senate Committee on Interstate and Foreign Commerce at its hearings on March 28, 1952, dealing with bills relative to domestic land and water transportation, it was specifically stated as follows:

"I would like to say a word about the leasing features of the bill, Mr. Chairman, because I think they are important. The leasing restrictions are also most discriminatory. The bill permits common or contract carriers to lease vehicles between themselves but not to or from private carriers. It is more restrictive than the ICC leasing orders now before the courts.

"Private carriers should be permitted to lease vehicles to or from common or contract carriers, as there are seasonal changes in the need for private carrier equipment which makes this most desirable. Private carriers should be permitted to lease specialized equipment such as pressure trucks, when not using such equipment themselves and when for-hire carriers have need for such equipment.

"Trip leasing by private carriers should also be authorized, since this provides badly needed transport capacity for common carriers and agricultural commodities, and, just as in the case of hauling exempt commodities, assists in lowering costs to the American consumer.

"Liberalizing of the leasing restrictions would benefit for-hire carriers by providing them with added equipment for their peak periods without the necessity and burden of permanently augmenting their fleets. This would provide greater flexibility and make for the most efficient and economical use of existing transport facilities."

It should be a matter of great interest to this committee that trip leasing as it is known today, grew as a transportation practice pursuant to the express direction of the Office of Defense Transportation during World War II. At that time, ODT found it to be absolutely essential to not only authorize, but to encourage trip leasing of vehicles. The experience gained during this emergency was valuable indeed and added greatly to the improved transportation facilities which came out of the war effort. The Interstate Commerce Commission, another Government agency, now seeks to strike down all of the gains in efficiency and flexibility which we have found to result from wise trip-leasing practices. Certainly, if trip leasing was essential during an emergency period, its value and its broad benefits to the American public certainly ought to be apparent and utilized during the present emergency also.

The private carrier conference also advocates passage of this legislation as a matter of principle. It feels that the Interstate Commerce Commission has invaded a basic right of management in imposing such strict limitations on the rights of common and contract carriers in making available additional transportation facilities when they are so badly needed by the public. Such ICC regulations constitute a monumental barrier to progress and development of America's transportation and distribution system. The promulgation of such rules serves only to bind and shackle a vast segment of our Nation's transportation system. By so restricting progress, literally thousands of individuals will be forced to return to antiquated and uneconomic methods of marketing and distribution. Such unsound, arbitrary intervention by Government would not serve the public interest, but would succeed only in eliminating an economical and indispensable transportation facility to carriers everywhere, and increase the cost of living in a dangerous inflationary era through which our Nation is now passing.

The private carrier conference feels that it is essential that private carriers of this Nation continue to have the freedom of choice in transportation which they have enjoyed in the past and which has made such an outstanding contribution to the growth of the American economy. The trip-leasing regulations promulgated by the ICC strike at the very heart of this freedom of choice in transportation. But, more than that, they do this irreparable harm without any consequential gain to any particular segment of the transportation community. Trip leasing should be permitted and the Interstate Commerce Commission should be restrained from invoking the restrictive, unwarranted, unjustified, and unreasonable regulations which they have issued. The courts and the Commission have refused us relief in the matter. We must now look to the Congress for the kind of relief from this intolerable situation which we feel will be forthcoming. We again urge upon you the favorable recommendation of this legislation and its swift passage by the Congress.

The CHAIRMAN. Now I would like to hear from Mr. Blanchard.

STATEMENT OF PAUL E. BLANCHARD, LAW DEPARTMENT,
ARMOUR & CO., CHICAGO, ILL.

Mr. BLANCHARD. Mr. Chairman, members of the committee, my name is Paul E. Blanchard. For the past 33 years I have had charge of all legal phases of all transportation matters in which Armour & Co. has been interested. I have been employed in the law department of that company for nearly 35 years.

I am appearing in support of H. R. 3203. We feel that the provisions of an order of the Interstate Commerce Commission in their docket MC-43 unnecessarily destroys certain types of motor-carrier service which are badly needed by us and by the public.

Before proceeding, I would like to state that as far as I know, I am the first, and perhaps the only witness, who appears here to talk to you gentlemen as to the effect of order MC-43 upon the shipper, the cutomers of these warring truck factions here. I will not refer to gypsy operators. With one exception I will not refer to the trip leasing. I would like to call Congressman Dolliver's attention, however, to the fact that, I, too, was raised in Iowa, and I know the Iowa farmer. I do not think if an Iowa farmer signed one of these 30-day leases once, got his truck back to Fort Dodge and got a telephone call to go to Des Moines, Iowa, and be prepared to load his truck with a load of Look Magazines to Wichita, and got his 8 hours of rest, and was ordered to Los Angeles, and not see his home for 30 days, he would sign more than one of those leases.

The provision of the order clearly is that when the equipment is to be driven by the driver, the period must be 30 days. The employment of the driver and the vehicle go hand in hand under these regulations.

We are an extensive shipper of perishable freight. The greater part of our tonnage of food products moving, both by rail and by motor truck, throughout the United States, consists of such articles as fresh meats, butter, eggs, dressed poultry and other commodities. which can move only in well insulated and refrigerated vehicles. By reason of this circumstance one of the hazards of transportation which we avoid in all possible instances is the hazard of transferring loads of such commodities from one vehicle to another, en route to destination. Even in cold weather the mere rehandling of many of these articles, such as carcass meats or eggs, is attendant with deterioration in condition. In warm weather such rehandling is at the risk of the entire load.

If we had produce from every one of our packing houses and shipping points to every destination in the United States to which we might want to make shipments by a series of common carrier motor services, the mere fact that this order permits the free interchange of traffic between one common carrier and another would be all that would be required in connection with this service. We could then, just as we load a railroad car, load a trailer job anywhere, and know whether it was handled by 2 or 3 or 4 or 5 carriers, it would reach the destination without this very expensive handling and hazardous rehandling in transit.

But as you know, the Commission is very jealous in granting rights to motor carriers. We have many important points which are not

connected to important destinations by any carrier having a right to handle our traffic, that is, any common carrier. In such cases we have but two alternatives. Perhaps we can find a contract carrier who has the right to take the goods part of the way. At that point we may have a common carrier who has service to the desired destination. If we find no common carrier, our only alternative is to hook up our own tractor to our own trailer and take it as far to the point as is necessary to get the traffic into the hands of a carrier who has authority to handle it the rest of the way.

Now, as I interpret this order, and I want to express a great degree of hesitation-I have been reading these orders of the Commission as I stated for 33 years--never before have I had before me an order that was so difficult to interpret, that was so uncertain in its meaning. Therefore, when I say that under this order such and such a condition exists, I realize that perhaps someone who has approached it from a different angle may be able to convince me that I have erred in its interpretation. Oftentimes you may interpret an order by looking back at the decision and see what the Commission was trying to do. To do that here often results in even added confusion. You find in the decision a statement that when Congress included section 225 in the act, it clearly implied that the carriers might use trailers and equipment belonging to shippers.

In the railroad world we have been furnishing our own cars ever since the refrigerator car was developed, and we still furnish them. We do not like to get in the position where we may use motor service only at the expense of furnishing our own trailers. We feel that the carrier in publishing the rate has the obligation to furnish the equipment with which to handle the freight.

Despite that finding in the decision that the carrier may use the equipment of the shipper, I interpret this order as forbidding it.

We have had a great deal about safety. The construction of this order is very peculiar. It starts out with 4 or 5 exemptions. One is an exemption of all the interchange trailers-that is the subject I am interested in, the interchange of equipment-without anything but identification inspection between any common or contract carrier, so long as they both are operating in the same territory.

In other words, if I am a contract carrier, and the gentleman here is a common carrier, both serving Kansas City and Chicago, we can interchange trailers as we please. But if my rights are from Chicago east, and the other carrier is from Kansas City to Chicago, as I read this order it prohibits an interchange of trailers between those two. The Commission in past decisions has tried to justify that on this theory, that this man is a contract carrier and he has only rights to haul from Chicago to Kansas City. If we let him go on and interchange with a carrier we are extending his right.

I as a shipper, if he has that right to haul from Kansas City to Chicago, have the right, if I have a contract, to employ him. I have the right to have him bring my freight to Chicago. I have also a right now to employ the common carrier who may serve me beyond Chicago. But because of this order against interchange of equipment, I have got to unload that freight in order to exercise my legal right to use the services of those two carriers in conjunction without transfer of lading. I cannot ship it. It is an illegal transaction unless I unload the freight and load it in the other carrier's trailer.

I would like someone to show me that this order does not provide that. But after 33 years of reading these orders, that is what it says

to me.

Let me say that in the first decision of the Commission, twice they comment that there was practically no evidence in that record as to the interchange practices by which the carriers interchanged equipment. I heard the case argued in Indianapolis. Nobody said anything about it there. I read the briefs of the case argued in Birmingham. The matter of interchange was not touched upon nor is it mentioned in the Supreme Court decision. Yet that matter of interchange is of most importance to we shippers than all the gypsy operated trucks that are operating in this country today. Particularly with perishable freight we must have the right to use the services of successive carriers who serve a common point without interchange of traffic or those services do not exist, and are not available to us.

Even as to nonperishable freight to interpret it as it has been interpreted is merely to put a duty on the business, the duty being the cost of this unnecessary transfer from one vehicle to another merely because somebody has a theory that if you permit it, you will be extending the rights of the contract carrier in violation of the law.

I think if Congress ever passed a law that had any such implication, it should rewrite it so that such interpretation will not be possible.

There have been many instances where a carrier has leased a vehicle to a shipper in a deliberate and successful attempt to defeat the freight rate. Take a carrier operating from here to Philadelphia. He has a published rate, let us say, of $1. He can ruin one of two competitors by making one competitor pay the dollar, and then lease the truck to the other competitor who with his own helper can get it up there for 50 cents. But that situation does not exist when I, a private shipper, find that carrier with a surplus truck that he is not using and is not going to use for a week and I lease it from him, and I go down and haul my own freight from Richmond to Norfolk. Yet I am prohibited from doing that.

There is an absolute and arbitrary provision against it. Often there are cases where there is no for-hire carrier. We have no alternative but to send our own truck. We can not lease a surplus truck lying around idle because this order prohibits it.

The order is perfectly sound insofar as it forbids a carrier from leasing a vehicle to me for a service which he holds himself out to perform. Let me give you another illustration. We run a for-hire carrier from Chicago to Fort Wayne, Ind. At that point the for-hire carrier unhooks his tractor and his driver goes away and goes to bed. Our own driver backs on that truck and without rehandling like we give small-town merchants within an area of 25 miles direct plant to store door delivery service without rehandling of traffic in transit.

If that carrier is a common carrier, we have to quit that because under no circumstances may we use the vehicle of a common carrier even in a service which he cannot give us.

Now we come to one of these exemptions. We have in Washington what is known as the Washington commercial zone. It is a radius of 25 miles around the Capital. Under this exemption I can bring the trailer into Washington by common carrier, and I can hook any tractor