motion of safety will be better served by efficient utilization of motor equipment, the reduction of empty return hauls, the lessening of the total number of miles necessary for the transportation of agricultural commodities to market and the loaded return movement of the common motor carrier-all of which necessarily will result if the trip-lease be retained.

H. R. 3203 does not modify the existing law as to safety requirements. Its enactment will not eliminate any effective accident prevention measure, and it will, we submit, tend to promote safety by permitting the continuation of tripleasing, the reduction of empty highway miles by the more efficient utilization of equipment on the return movement.

The CHAIRMAN. Mr. Norcross?

Mr. DIEHL. My name is Milton Diehl. I am speaking in lieu of Mr. Norcross. With your permission I will do so.

The CHAIRMAN. I have 1 or 2 more. Is Mr. Seals present?

Mr. STEADMAN. He had to leave to catch a plane. He asked that I request that his statement be made a part of the record. That statement also shows that it is endorsed and concurred in by the Western Growers Association of Los Angeles and the Idaho Shippers Association of Idaho Falls, Idaho.

The CHAIRMAN. The statement is in favor of the legislation?
Mr. STEADMAN. Yes, sir.

The CHAIRMAN. That statement of Mr. Seals will be made a part of the record. I regret it was necessary for him to leave before he had the opportunity of presenting it. However, it will be placed in the record in full.

(Mr. Seals' prepared statement follows:)

STATEMENT OF Durward SeALS, TRAFFIC MANAGER, UNITED FRESH FRUIT AND VEGETABLE ASSOCIATION, WASHINGTON, D. C.

(Appearing also for Western Growers Association, Los Angeles, Calif.; repreresenting 90 percent of the vegetable and melon shippers of Arizona and California; and Idaho Shippers Association, Idaho Falls, Idaho; representing growers and shippers of fresh fruits and vegetables whose members ship about 75,000 cars annually)

Mr. Chairman and members of the committee, my name is Durward Seals, and I am traffic manager of the United Fresh Fruit and Vegetable Association. This is a national trade association, with headquarters in Washington, D. C., having some 3,000 members, residing in all of the States, who are engaged in growing, packing, shipping, and distributing fresh fruits and vegetables. Because of the nutritive value of fresh fruits and vegetables, their necessity in a balanced diet, and their importance as protective foods, they play an important part in the food supply of this Nation. The growing population has caused more production and has thus necessitated more transportation service. The importance of this service to the national economy is perhaps best evidenced by the fact that fresh fruits and vegetables represent more than one-fourth of the total average per capita consumption of food in the United States.

The agricultural haulers (motor vehicles used in carrying agricultural commodities are expressly exempted from the general regulation of the act by section 203 (b) (6), part II, of the Interstate Commerce Act) have performed a valuable and necessary transportation service for this industry. They have provided a flexible and invaluable mode of transportation which has not been, and could not now be, performed by the railroads or by the certificated motor carriers. Without this type of transportation many producers would have found it necessary to curtail production or to leave their crops in the fields because of their inability to obtain a sufficient number of suitable rail refrigerator cars or sufficient suitable motor-carrier equipment for the transportation of these highly perishable fresh fruits and vegetables.

It is estimated that there are between 1,300,000 and 1,500,000 carloads and carload equivalents of fresh fruits and vegetables now being transported annually by rail and by motor truck from producing areas to markets. Of this quantity, from 500,000 to 700,000 carlot equivalents move by motor truck. The exact

figures as to the total movement of fresh fruits and vegetables by motor carrier, including certificated and private motor carriers, are not available, but it is a matter of common knowledge that a very large proportion of the tonnage of fresh fruits and vegetables is moved by the agricultural hauler.

The agricultural haulers cannot prosper or even survive on the returns from a one-way loaded haul. It is seldom, if ever, that exempt commodities are available for transportation in both directions. The agricutural haulers, therefore, must be afforded full opportunity to lease their equipment to certificated haulers of general commodities for return loaded movements to the general area from which the equipment first moved with exempt commodities. But the certificated carriers cannot possibly make use of these units of equipment for as long as the 30-day minimum period required by the Commission in its order of May 8, 1951, in Ex parte No. MC-43, 52 M. C. C. 675; unless they are left at liberty to lease such equipment for no more than the space of time required for a return loaded movement under their own operating rights from the area of the destination of the original movement of exempt commodities to the area of the origin of that movement. Under the order of the Commission they will be forced to forego use of such equipment, with the inevitable result that agricultural haulers will be driven out of business. This conclusion is supported by the statement of Mr. Justice Black in his dissenting opinion in the United States Supreme Court's decision of January 12, 1953, in American Trucking Associations, Inc. v. United States (73 S. Ct. 307), in which he said:

"The Commission's rules make it impossible for these exempt carriers of agricultural products to get the advantage of a lease for a return haul. The result is destruction for a large part of that business."

When Congress enacted the Motor Carrier Act of 1935, one of its major purposes was to enable motor carriers for hire, including those carriers-the agricultural haulers-which it exempted from general regulation, to continue to operate as they had in the past. Manifestly, that purpose will be defeated if the agricultural haulers are driven out of business and the general commodity haulers and the public thus deprived of their service. Thus the equipment of the agricultural haulers will be lost to the fresh fruit and vegetable industry, which will suffer immeasurably; growers will find it even more difficult to survive; and the cost of these perishable foods to consumers will be increased. The certificated carriers, deprived of the opportunity to obtain additional equipment for the movement of peak traffic, and the shipper dependent upon him for service, will suffer likewise by the uneconomical results of the loss of this pool of equipment.

The railroads, in our opinion, could not meet all the shipping needs of the fresh fruit and vegetable industry. There has been a steady decline in the ownership of all refrigerator cars, including the RS type, the end-bunker type of car most commonly used for the transportation of fresh fruits and vegetables. As of January 1, 1939, there were 123,958 RS-type refrigerator cars in service; as of January 1, 1953, there were approximately 104,885 such cars, a decrease of 19,073 cars. Of this figure, approximately 5 to 6 percent are out of service for light or heavy repairs. We estimate that there are approximately 95,000 RStype refrigerator cars in service today and of that figure only 65,000 to 70,000 are suitable for the adequate transportation of fresh fruits and vegetables.

I am indicating below the total number of refrigerator cars and the number of RS-type refrigerator cars owned by the railroads and private carlines for the years 1939 through 1953 inclusive:

The above figures indicate that the retirement of RS-type refrigerator cars has steadily exceeded the number of new cars placed in service. During 1952

only 4,489 new refrigerator cars of all types were placed in service, and it is extremely doubtful if that figure will be exceeded in 1953. We have not received any estimate as to the number of RS-type refrigerator cars which will be retired in 1953, but, based upon past experience, we believe that the figure will exceed the number of new cars placed in service. There is no tangible evidence that there will be a change in the trend of the past few years. As of March 1, 1953, there were on order and undelivered 2,985 refrigerator cars of all types. What I have already said demonstrates that the certificated motor carriers and railroads, if for no other reason than insufficiency of refrigerated equipment, could not possibly transport all the fresh fruits and vegetables which must move if the grower is to survive and if the ultimate consumer is to obtain fresh fruits and vegetables at reasonable prices. But there is still another and equally compelling reason why the certificated motor carriers would not be able to meet the need even if they had the equipment. By this I mean the rigidity of the certificates held by them. Fresh fruits and vegetables are highly perishable, they cannot be stored and carried over from one season to another, and many of them (as, for example, berries and leafy green and yellow vegetables) cannot be stored at all but must be harvested and sent to market immediately. Expedited transport has always been considered a "must" in our industry. Hence it is extremely important that the growers, packers, and shippers have available to them at the many thousands of widely scattered points of production a large number of motor carriers who can transport the traffic to any destination whatsoever which may eventually be chosen by the shipper. The certificated motor carriers of fresh fruits and vegetables ordinarily have restricted points or territories of origin, restricted routes, and restricted destinations or destination aeas, and some are restricted to the carriage of certain specified farm products. There are many occasions when the shipper cannot know, when the shipment is put in transit, at just what market a given truckload of perishable fruits or vegetables may finally come to rest.

One simple example will suffice to establish the embarrassment and financial loss which the producer or shipper may suffer if he does not have always at hand a carrier which can make deliveries anywhere at all. A shipper at Harlingen, Tex., who has not arranged a sale but must start his perishables moving will forward a truckload to Tulsa, Okla. (by an agricultural hauler or by a certificated carrier holding authority to serve both Harlingen and Tulsa), with the intention of diverting it in transit or reconsigning it to some other point if he cannot sell it advantageously in Tulsa. When the shipment reaches Tulsa he may have decided to try the market in Denver, Colo. If his shipment is moving by an agricultural hauler, all well and good. He can divert or reconsign it to Denver. But if the carrier operates under a certificate from the Interstate Commerce Commission he may not have authority to serve Denver. And seldom will this carrier maintain through routes with other carriers or arrangements for interchanging his trailer with a connecting carrier so that the loaded trailer may go forward to Denver without breaking bulk. The foregoing illustration could be many times multiplied. Frequently shipments are diverted a number of items in transit; with each diversion the necessity for having available the flexible service of a carrier which is not held to a limited destination territory becomes greater. Only the agricultural hauler can render this elastic service from and to the thousands of points from and to which fresh fruits and vegetables are distributed. A rigid transportation machine cannot possibly meet the need. We already have enough trouble without placing the industry in a transportation straitjacket. The fresh fruit and vegetable industry must have the services of these agricultural haulers. It would be quite impossible for me to overstate their importance to our industry.

Our association favors the enactment of H. R. 3203.

This bill will prohibit the Interstate Commerce Commission from promulgating any rule or regulation limiting the duration of a lease, contract, or other arrangement for the use of any motor vehicle by a motor carrier in providing transportation. This would, in my opinion, effectively prevent the Commission from prohibiting trip leasing, a practice used extensively in the motor-carrier industry and one which is most necessary for the preservation of the agricultural exempt hauler.

The opposition to the practice of trip leasing appears to hinge on the administrative difficulties being experienced by the Commission in enforcing its safety regulations. While recognizing the economic value of trip leasing to both agriculture and the motor-carrier industry, the Commission would outlaw the practice in an effort to strengthen compliance with its rules. It is a matter of record

that the Commission has too few service agents even to enforce partial compliance with its present regulations. The fault lies, not with the present law, but with its administration. To our minds, administrative difficulties constitute no sound reason for driving literally thousands of agricultural haulers out of business, with the other unfortunate results which we have already touched upon.

There appears to be some question as to the meaning of the clause in the bill reading as follows: "or the amount of compensation to be paid for such use."

The purpose of this clause is to prevent the Commission from indirectly prohibiting trip leasing by regulating the amount of compensation to be paid by the lessee. This wording would not, in my opinion, prevent the Commission from regulating the method of arriving at the amount of compensation.

The Interstate Commerce Commission, certain trucking interests, and others have expressed their opposition to the present practice of basing such compensation for rental of equipment on a percentage of the revenue earned. There is nothing in this bill, in my opinion, which would prevent the Commission from prescribing rules to prohibit the use of this method, if it could be shown to be inimical to the public interest.

We respectfully request that the committee approve H. A. 3203.

The CHAIRMAN. Now, before we hear from you, Mr. Diehl, I understand your request was to close the debate.

Mr. DIEHL. Yes, sir.

The CHAIRMAN. That leaves us now with the one witness in opposition who is present, as I understand it. May I inquire from the audience if there is anyone else here that has a statement either to make or to file for or against?

Dr. Sorrell, would you like in just a few words to indicate to the committee what your statement covers, which will be filed in full, you understand.

STATEMENT OF LEWIS C. SORRELL, SCHOOL OF BUSINESS,

UNIVERSITY OF CHICAGO, CHICAGO, ILL.

Mr. SORRELL. Lewis C. Sorrell, professor of transportation, School of Business, University of Chicago.

This statement in the main, Mr. Chairman, indicates the group I am representing here, which is the Railway Business Association, which is not identified in any way with the Railway Association or the Association of American Railroads that have appeared here.

The interest which they have in the legislation here flows out of a general interest in the Motor Carrier Act going back to 1935. While I am not employed by the Railway Business Association or identified with them in any respect except for this particular occasion, they have asked me to indicate their views, their interest and the reason for their views with respect to this particular legislation. They are opposed to it for much the same reason that they favored the Motor Carrier Act of 1935. Apart from that general interest, there is one point, Mr. Chairman, that I am suggesting to you for consideration, namely, what the impact of this bill, if passed, would have upon the capacity of the Interstate Commerce Commission to deal with leases of carrier equipment outside of the exempt commodity field. Much of the discussion taking place here in the last few days by proponents has been with reference to exempting agricultural commodities and the return commodities that such trucks might carry.

There are obviously other situations extant in the motor-carrier field involving leases to which this provision of the bill would be equally applicable. That is, for example, the area wherein shippers

I am not speaking now of agricultural commodities but those outside of the field-may conceivably acquire trucks, lease them to carriers, and the Commission, as it seems to me under this provision, would not have the authority to regulate the duration of any such lease or arrangement or the compensation that would be involved.

I am suggesting here in my submission, sir, that this situation would be somewhat similar in the motor-carrier field to that which prevailed many years ago with respect to the private carrier lines and the railroads where the Commission did take jurisdiction over those arrangements, whether technically a lease or not, and did regulate the compensation.

I do not know, Mr. Chairman, just exactly how much of that type of leasing may be extant today. At least I have not been able to glean from the records before the Commission in MC-43 the degree to which that may obtain today. Such general information as I have obtained is that it is as yet very limited in extent. But it is something that could conceivably develop and I am simply suggesting to the committee, Mr. Chairman, that this aspect of the case should be examined before a ban of this sweeping extent should be adopted. That is the substance of my statement that I submit to you. I should like also the privilege, since I reduced my memorandum to a minimum of 6 pages, of supplementing to not more than 5 this point of view. The CHAIRMAN. You have the permission of the committee to do so. Mr. SORRELL. Thank you.

The CHAIRMAN. We regret exceedingly that a man of your ability who has attended these hearings as faithfully as you have from the time they started should be limited in the time to make the statement that you wished to make. We do appreciate, however, the assistance you have given us in conserving the time by giving us this analysis of the more full statement that you are filing for the benefit of the committee.

Mr. SORRELL. Mr. Chairman, I express to you my deep appreciation of the courtesy you have shown me, and I shall not trespass further upon it.

Mr. O'HARA. Mr. Chairman, we do not always get to read the statements in full that witnesses file, but I assure you, Doctor, that I shall read yours.

Mr. SORRELL. Thank you.

(Mr. Sorrell's prepared statement follows:)

STATEMENT OF DR. LEWIS C. SORRELL, ON BEHALF OF THE RAILWAY BUSINESS

ASSOCIATION

My name is Dr. Lewis C. Sorrell. I am now, and have been since October 1918, a member of the faculty of the school of business of the University of Chicago. My present title is professor of transportation and business organization. As a transportation specialist my activities both scholastically and professionally have covered these fields commonly described by the terms traffic management, economics of transportation, and Government policies toward and regulation of transport enterprises. My address is: Faculty Exchange, University of Chicago, Chicago 15, Ill.

I appear before this committee on behalf of the Railway Business Association in opposition to H. R. 3203.

The Railway Business Association, whose office is located at 38 South Dearborn Street, Chicago, Ill., is an association of manufacturing and trading companies in the United States, which has been in existence since 1908. The common bond of association of these companies is that they all sell some portion of their products to companies engaged in transportation such as railroads,