ham Center is a community known as Framingham, Mass. Under New England township laws as ruled by the Commission, it is considered a freight town, although a part of the same township as Framingham Center.

In May 1952, at the request of several shippers, we filed an application with the Commission to extend our routes of service this 3 miles. A hearing was held and a proposed report and order of the Commission was issued on October 28, 1952. Let me read from that report:

Applicant operates 552 vehicles which are not company owned, although commercially registered with the motor-vehicle registrars of the States in the name of the applicant.

The record says we have 552 vehicles registered in our own name, licensed, if you please, in our own name.

The applicant claims that it holds title to the vehicles under long-term lease. Why they say claim, I do not know. There was not any evidence to the contrary. Bear in mind that all during this period they were say ing this, there was extant, though not effective, an order of the Commission, in ex parte MC-43, which defines ownership as being the party in whose name the vehicle is registered. That order was out, although not effective when they wrote this one.

Quoting further from the report and order of the Commission in our application case, we find:

Applicant should be found not fit and able to perform the proposed operation because title to motor equipment is not in its name.

In the past the Commission has held that ownership of equipment to be operated by a carrier must be shown to obtain extension of rights. And they quote the famous Lemmon case that I referred to earlier.

Here we have a company operating over 200 million ton-miles a year, serving several hundred communities and several thousand customers, employing over 800 employees, accepting all its obligations under the laws of the Federal Government and seven individual sovereign States, having amicable and friendly relations with nine labor unions, having a very fine and enviable financial statement, having in its possession and registered in its name 552 motor vehicles, and a background of 23 years of experience, branded as unfit to be a carrier by the Interstate Commerce Commission.

I said branded as being unfit. I even go ahead and you will find it in my statement, quoting their own district supervisors, our shippers, and competitors in a sarcastic manner that we are not fit to be carriers. They even make the statement that the company claims to be a motor carrier but does not own any trucks.

That same district supervisor has long been an acquaintance of mine, I think. He has been in our office many, many times. He has personally complimented me and our company for our efficiency and our very evident efforts to comply with the Transportation Act, and accept our full responsibilities.

In the light of this fact, I cannot help but believe that his derogatory remarks of recent date reflect an impression that he has received from his superiors. That is not surprising. Since the policy of unfit ness based on leasing was first enunciated by the Commission in the Lemmon case, they have consistently followed it in all cases where any leasing existed. Unfit is a dirty word. To be branded as unfit by the

Commission and its employees is a terrible thing, and cannot be taken lightly.

The import is clear. The Commission would regiment by its policy all motor carriers into a common pattern. They would require me to invest my money in trucks that I already possess. They would force me to divert a portion of my time from the transportation business into the garage business. If I did not accede to this requirement and accept the proffered straitjacket, I will not be allowed to expand my business, and I will be branded as unfit.

What is just as bad, if not worse, the Commission by this policy adoption has made a mockery of the law itself. It has already reached a decision on any hearing which it may have come before it, if the acquisition of vehicles on either long-term or short-term lease is involved. In such cases it is quite evident that the application will be denied, regardless of any showing made as to public convenience and necessity. The carrier will be declared unfit and the application denied. That is the inescapable pattern as of this date. Why, then, have a hearing, even though it is required by law? Is it only for the purpose of putting into the record some shred of justification for supporting a predetermined decision?

I recognize the many and diverse problems of the Commission in its dealings with motor carriers. I am aware that they feel the pinch of economy programs of our national administration. I know they feel that they are undermanned and that they cannot do everything without more manpower. I suggest that perhaps they are spending too much effort on problems of management at the expense of performing purely regulatory functions.

I ask the Congress to remove the Commission once and for all from any interference with management as to the acquisition of vehicles by lease, purchase, or any other manner which may become available to management.

I ask further that they be precluded from interfering with management's rights to recompense any of its employees or agents in any manner that is satisfactory to the parties involved.

I ask further that the Commission be estopped from using the method of acquisition of vehicles, which he chooses to employ, as any criteria as to his fitness or ability.

I believe that these requests, if enacted into law, will have a salutary effect in convincing the Commission that the transportation policy of the Congress is not one of restriction and regimentation. I believe a reversal in their policy is absolutely necessary, and that until it takes place, at the direction of the Congress, our industry will never get regulation in the public interest, nor the type of enforcement it needs, and for which it constantly pleads.

I thank you.

The CHAIRMAN. Any questions, gentlemen?

Mr. HARRIS. Mr. Chairman.

The CHAIRMAN. Mr. Harris.

Mr. HARRIS. What do you own as far as equipment is concerned? Mr. SUTHERLAND. One snowplow at each terminal.

Mr. HARRIS. You lease altogether?

Mr. SUTHERLAND. Everything is acquired on long lease. We use a few trip leases from time to time. The Commission, while they are

purporting here to be striking at 30-day leases, trip leases, in following the policy that they followed in the Lemmon case, they are declaring carriers unfit who have acquired vehicles on periods of a year, 2 years, 3 years, and 5 years by lease. The crime is in leasing and not the time in the eyes of this Commission.

Mr. HARRIS. That is a rather strange situation, because I was under the impression that what the Commission was trying to do was to bring about leasing for a minimum period of 30 days.

Mr. SUTHERLAND. My operation, Mr. Congressman-as I think a previous witness from the railroad said-out of 8,400 trips that I testified to before the Commission in their proceedings for my own. company, I had 28 of them on trip lease. Every piece of equipment I have is under a continuing form of lease at a minimum of 1 year. It is registered and licensed in the various States in my name. Nowhere on the license, nowhere on the truck does the lessor's name appear. My name as lessee appears there all over the vehicle, and on the registration plates. That is not only peculiar to my case. That is also to several others. There are 14 cases like that where the Commission has said, "You are not fit to expand your operation because you do not own your equipment."

Mr. HARRIS. You are already authorized to operate, are you not? Mr. SUTHERLAND. Yes.

Mr. HARRIS. You have that certificate?

Mr. SUTHERLAND. In the sphere that I have it, that is right. They cannot strike me there. It is only when I want to or need to expand my business.

Mr. HARRIS. This legislation proposed here does not have anything to do with expansion of service.

Mr. SUTHERLAND. Yes, it does.

Mr. HARRIS. I was under the impression it had only 2 objectives; 1 was to prevent the Commission from promulgating the minimum 30-day lease provision and to prevent the Commission from interposing its rules with reference to compensation.

Mr. SUTHERLAND. That is right.

Mr. HARRIS. I thought those were the only two things involved here. Mr. SUTHERLAND. Yes.

Mr. HARRIS. How are you involved if you lease all of your equipment for a year or more?

Mr. SUTHERLAND. By this manner, and in this manner only: I am not only talking now about myself, but I am talking about a lot of other carriers. I will pin it right down to my own company. Even though you pass this law and say to this Commission you cannot regulate the term of the lease, the Commission can force me to comply with its predetermined decision on that 60, 90, 6 months, or whatever it might be they might even tell me I cannot purchase them by purchase contract, I do not know. That might be the next one, followed to the logical conclusion, it very well could be-they can enforce it unless you prohibit them from putting a straitjacket around the carriers by other means.

Somebody else mentioned the other day this compensation factor, the Commission can enforce its will through its compensation requirements just as effectively as if you did not pass the law at all. Unless you plug that loophole, which has to be plugged in addition to this.

Mr. HARRIS. Do you operate on the procedure of percentage return? Mr. SUTHERLAND. No, I do not.

Mr. HARRIS. You contract outright?

Mr. SUTHERLAND. Yes, sir. I work entirely on a time-limit basis, and pay the employees for driving on a straight basis as far as that is concerned. That happens to be because in my dealing with my representatives of my employees, I signed the contract that would be true, and I do not point the finger that does it any other way.

Mr. HARRIS. Apparently I misunderstood the provisions of the proposed rule. I cannot see how it affects your situation.

Mr. SUTHERLAND. It is quite evident from everybody that is here that nobody agrees that the thing says the same thing. Nobody admits it.

The CHAIRMAN. Mr. Heselton.

Mr. HESELTON. I am reading from the testimony of Mr. Evans, the other day, on one point where I think you may be able to complete the record. I do not know whether you heard him testify but he said:

The so-called owner-operator can operate without liability insurance.

I called his attention to the compulsory insurance law in Massachusets. Does Connecticut have a compulsory law?

Mr. SUTHERLAND. No; it does not.

Mr. HESELTON. Are you aware of any of these people who lease their equipment and drivers operating without liability insurance, and let us confine it to New England. Do you know of any instance where that has developed?

Mr. SUTHERLAND. Not to my knowledge; no. It has never been brought to my attention in all the hearings we held if it were true. It could well be that some people do not buy insurance even if the law says it is compulsory.

Mr. HESELTON. As far as you are concerned, you carry your own insurance?

Mr. SUTHERLAND. Yes; we insure all vehicles even if they are acquired for only 48 hours.

Mr. HESELTON. That is all.

The CHAIRMAN. Are there any further questions, gentlemen?

If not, we thank you very much. Mr. Sutherland, for your contribution and assistance to this committee.

Mr. SUTHERLAND. Thank you.

The CHAIRMAN. Your statement may be inserted in the record at. this point.

(The statement is as follows:)

STATEMENT BY D. L. SUTHERLAND, ON BEHALF OF MIDDLE ATLANTIC TRANSPORTATION CO., INC.

My name is D. L. Sutherland. I reside in New Britain. Conn. I am chairman of the board of, and appear for, Middle Atlantic Transportation Co., Inc., a New York corporation. I appear in favor of House bill No. 3203 and will also offer a suggestion favoring an amendment to its present form.

My support of this legislation is based upon the belief that the ICC should be prevented by law from pursuing the course that they are embarked upon. I believe that course to be evident. I believe it to be one which can and will accomplish nothing except placing restrictions and regimentation around the operations of interstate trucking companies and that its imposition constitutes a wholly unwarranted, unnecessary, and useless invasion of the field of management.

I am wholly in accord with the principle of regulation of motor transportation, in the public interest. I believe that the expansion of the concept of regulation of transportation to include the acquisition of the equipment with which carriers perform transportation in a dangerous and totally unnecessary expansion of that concept, and that it goes far beyond the acceptable theories of regulation and that it is not in the public interest.

The commission's policy, as evidenced by their formal order, outstanding in ex parte proceeding number, M. C. 43 (not yet bearing an effective date), is admittedly one of restricting the right of carrier management to acquire vehicles, under certain circumstances, through the medium of a lease. It goes further and restricts the right of management in the use of vehicles which have been acquired by lease, even though the conditions of acquisition by lease had the approval of the Commission.

The Supreme Court of our Nation has said, and rightfully so, that if regulation, in the public interest, requires restrictive measures, then they can legally be imposed in the interest of regulation even though the imposition may cause the sacrifice of some business enterprises. That is another way of expressing the well-established principle of "the most good for the most people." I agree with it wholeheartedly. That decision poses to this committee, and to the Congress, these final questions. Does orderly regulation of transportation require the impositions of these restrictive measures? Are they really necessary? Is the policy of restriction and regimentation of business compatible with the philosophy of free enterprise in a free economy?

The Commission is committed to a restrictive policy. If that policy is necessary they should be permitted to implement it. If it is not necessary they should be estopped by law from following it. I support the latter position.

The economics of the case in point are so self-evident and will, I am sure, be so presented in detail that I do not intend to discuss them to any great extent. Unless this proposed legislation becomes law it will follow that many of the economies which have been produced through years of experience in the industry will be destroyed.

What is now useful transportation and distribution capacity under short-term lease will be relegated to empty mileage on our already overburdened highways. Two trucks will often be required to perform the work now being done by one. Both will travel empty in one direction in many cases.

Marketing practices which have long been established and proven will have to undergo radical change. Our farm produce, our livestock raisers and feeders, our seasonal industries and businesses, and many of our staple producers will be subjected to an expensive and disruptive alteration in custom.

When a carrier needs a vehicle for 1 or 2 days or any length of time, why should he be required to go without it entirely or to pay for it for 30 days? Even if our economy should be able to stand 30 days' expense for a lesser period of usage, why should the vehicle be immobilized for the remainder of the 30 days when some other carrier might need it?

Why should the trucking industry be singled out to be deprived of the right to recompense employees or agents in accordance with what they produce? I am not talking about influence peddlers. I know the term "five percenter" has been used in describing commission arrangements in the trucking industry. I know it has been used sarcastically and was meant as a slur, and I resent it.

I want this committee to know that there are many thousands of communities in our country who need and use trucking services of regular and special nature, whose requirements would never support the operation of a terminal within their environs. The only representative of the carrier who regularly gets into that community is the driver who picks up and delivers their goods., He executes the bill of lading for the carrier, he is the salesman, the bill collector, the claimsettling agent. In short he is "it." Why then is any stigma attached to the fact that he is paid on a commission basis? Why should the Commission be permitted to destroy these relationships of agency that are compensated for under plans that have been proven over the years and are comparable with the practices of all other businesses under siimlar circumstances and conditions? The imposition of these uneconomic conditions on the carriers, their effect on the economy of the Nation, this disruption of tried and proven operating practices, this invasion into the rights of management to succeed or fail in the operation of a business, should not be permitted, unless it is necessary.

You have been told, or will be told, that they are necessary in the interest of orderly regulation. Let's look into that.