II. PURPOSE OF THIS SUPPLEMENTAL STATEMENT

The position of the Motor Carriers Leasing Conference and the members thereof in support of the proposed legislation was set out in the original statement and amplified by the testimony of the two witnesses above referred to.

The purpose of this supplemental statement prepared at the conclusion of all of the testimony, excepting that of the Interstate Commerce Commission, is to assist the committee in connection with certain matters which arose during the progress of the hearings. Approval of the chairman of the committee for the filing of this supplemental statement was obtained.

III. AMENDMENT OF H. R. 3203 SO AS TO PROTECT ONLY PERSONS ENGAGED IN THE ONE-WAY TRANSPORTATION OF AGRICULTURAL COMMODITIES UNDER THE AGRICULTURAL EXEMPTIONS OF PART II OF THE INTERSTATE COMMERCE ACT TO PERMIT THE TRANSPORTERS OF SUCH AGRICULTURAL COMMODITIES TO LEASE THEIR VEHICLES FOR THEIR RETURN TRIP TO FOR-HIRE MOTOR CARRIERS UNHAMPERED BY PROHIBITORY RULES AND REGULATIONS OF THE INTERSTATE COMMERCE COMMISSION WILL NOT SOLVE THE PROBLEM WHICH HAS BEEN PRESENTED TO THE COMMITTEE

Throughout proceedings before the Interstate Commerce Commission preceding the issuance of the Commission leasing order of May 8, 1951, and in legal proceedings involving said order thereafter before the Federal courts, including the Supreme Court of the United States, the Motor Carriers Leasing Conference has worked and cooperated closely with the Secretary of Agriculture and his distinguished staff in connection with this matter. No one, we believe, understands more fully than we the imperative necessity of thwarting the attempts of the Interstate Commerce Commission to hamper, restrict, and nullify the will of Congress as expressed in the agricultural exemptions included in part II of the Interstate Commerce Act. The proposed legislation will provide such relief for agriculture and it will also protect the members of this conference and other for-hire motor carriers in the United States using leased equipment from a similar attempt on the part of the Interstate Commerce Commission to thwart the expressed will of the Congress as set out in the proviso of section 208 of part II of the Interstate Commerce Act wherein Congress specifically forbade the Commission to restrict the right of motor carriers to augment their equipment. As pointed out in our original statement filed with the committee, the members of this conference own thousands of pieces of motor-vehicle equipment and have millions of dollars invested therein but, in order to assure the free flow of interstate and foreign commerce by motor vehicle, must supplement their fleets by the use of leased equipment. Equipment used for the one-way hauling of agricultural commodities and operated by for-hire motor carriers under lease for return movements of general commodities is not sufficient to meet the needs of for-hire carriers for leased equipment and is not available for movements in many directions where the use of leased equipment is absolutely essential for continuation of existing motor carrier service. Particularly is this true in connection with the transportation of commodities involved in the national defense program which constitute a large portion of the business of many of the members of this conference and other for-hire motor carriers. The operators of equipment transporting exempt agricultural commodities, when leasing their vehicles to for-hire motor carriers for return trips, are interested primarily in returning to the section of the country where the agricultural commodities originated.

To meet this additional and most important requirement of for-hire carriers for leased equipment not covered by the vehicles used in the one-way transportation of agricultural commodities there has developed a large pool of equip ment under the ownership of individuals who are in fact small-business men. Some of these individuals are the owners of one vehicle, some own small fleets ranging from 5 to 10. These small-business men, many of whom are veterans of World War II, as disclosed by evidence before the Interstate Commerce Commission, have been contemptuously described by certain opponents of the proposed legislation as "gypsies,” implying, apparently, that they are individuals of no substance and generally violate State and Federal laws. Others have referred to these individuals as "itinerant truckers." Whatever name may be applied to them cannot change the fact that generally they are reputable American citizens engaged in meeting an essential equipment demand of the for-hire motor carriers of the United States. Just as there are occasional law violators in all other walks of life, so there are such persons in the ranks of the transportation industry but, as in other businesses, they constitute an infinitesimal minority.

The members of this conference and other for-hire carriers utilizing leased equipment have for years, and do now entrust the owners of such leased equipment with truckloads of various commodities having a value always of many thousands of dollars and sometimes, particularly in defense transportation, having a value in excess of $1 million per truckload.' The record made before the Interstate Commerce Commission does not show the loss of one dollar to the Government of the United States by reason of leasing practices of for-hire carriers. The committee will recall that such leasing practices were mandatory on the part of motor carriers under orders of the Office of Defense Transportation promulgated by the late Joseph B. Eastman during the critical period of World War II, in order to insure the maximum use of available motor vehicle equipment. Certainly this committee cannot believe that the members of the Motor Carriers Leasing Conference and other for-hire motor carriers would daily entrust hundreds of truckloads of valuable cargoes to owner-operators who lease their vehicles to for-hire carriers, if such owner-operators as a group fall within the description of "gypsies" as testified to by certain opponents of the measure in the course of these hearings. In this connection the members of this conference alone transported 85,000 truckloads of valuable cargo in the year 1952 by the use of trip-leased equipment. If the owners and operators of such equipment were in fact notoriously irresponsible law violators, as some of the opponents of the bill would have you believe, the members of this conference would long since have been out of business by reason of the claims they would have had to pay in connection with the 85,000 truckloads of valuable cargo so transported in the year 1952. Likewise, if such leased vehicles were continuously involved in highway accidents, as some would have you believe, it would be impossible for the members of this conference to obtain public liability insurance on their operations which insurance they now have and which covers every single trip-lease unit engaged in supplying equipment to the members of this conference in accordance with existing insurance requirements of the Interstate Commerce Commission. In this connection it should be recalled that the undisputed factual evidence submitted to the Interstate Commerce Commission, taken directly from reports to that Commission and to insurance companies, showed that trip leased equipment has fewer accidents per 100,000 miles operated than company-owned equipment. Such evidence is based on actual experience and not on "informed speculation" which the Supreme Court of the United States declared the Interstate Commerce Commission used in arriving at the basis for its findings in Ex parte MC-43.

IV. PERCENTAGE METHOD OF COMPENSATION FOR LEASED VEHICLES

Many of the least agreements and contracts between owners of leased equipment and the members of this conference provide for a payment on a percentage of the revenue earned in the operation of such vehicle while under lease. Such a division of revenue is one of the oldest, long-established and most favored practices in the motor carrier industry. It was in existence long before any regulatory powers were conferred upon the Interstate Commerce Commission, by the Motor Carrier Act of 1935, now part II of the Interstate Commerce Act, and has continued since that time.

Under this sort of arrangement carriers, such as the members of this conference, compensate the owner of the vehicle for its use under lease, by the payment of a percentage of the revenue earned by the vehicle. This is the fairest and most practical method of making such payments which could be devised. If the vehicle hauls a load of highly rated commodities which produce a high earning of transportation charges, then the lessor shares in the freight charges paid on a proportionate basis with the carrier. If, on the other hand, the leased vehicle is used for the transportation of a low-rated commodity producing a less amount of revenue from freight charges, then the owner of the vehicle shares the lesser amount on a proportionate basis with the carrier.

Since a large number of lease arrangements of the members of this conference and other for-hire motor carriers and particularly long-term leases, are on this basis, which is the basis desired by the owners of the vehicles themselves, the effect of the prohibition contained in the rules set out in Er parte MC-43 results in almost as complete a ban on long-term leasing as the 30-day rule

A single truckload of certain types of defense materials may have an enormous dollar value. Certain members of this conference have transported such valuable truckloads particularly during World War II.

does on trip leasing. We should like to emphasize that the rule under discussion applies to both trip leases and long-term leases.

V. CERTAIN ERRONEOUS ARGUMENTS OF OPPONENTS OF H. R. 3203

It has been suggested to this committee that the public has no insurance protection in the case of a highway accident occurring when a trip-lease vehicle has been released from the service of one carrier during the interim, if such there be, before the vehicle is leased to another carrier.

Many large insurance companies have devised and are selling a special insuranace policy for the protection of the public to the owners of vehicles which are normally leased for long or short periods of time to cover movements of said vehicles during the interim occurring between leases to motor common carriers. Experience with this type of insurance has been so favorable that the statutory protection required for the public by the several States and by the insurance requirements of the Interstate Commerce Commission may be obtained at an insurance rate that is in nowise burdensome upon the owner-operator and for that reason many owner-operators carry such insurance.

The statements of such opponents of the bill ignore, as the Interstate Commerce Commission chose to disregard, the financial responsibility laws of the several States. Such laws, which also involve the issuance of license plates and drivers' licenses, fully protect the public in case of highway accidents during such interim. We pointed this out to the Interstate Commerce Commission and requested the Commission during the course of the hearings before it to compile complete information, through its extensive facilities, concerning the extent and scope of such laws. While diligent in obtaining information and making surveys in support of its position against leasing, the Interstate Commerce Commission did not make the investigation of financial responsibility laws which we requested. We did submit evidence on this subject to the Commission. including the financial responsibility laws of certain States as typical and the oral testimony of the president of one of the members of this conference which operates in 13 States that similar laws were in effect in all the States where the operations of that member of this conference were conducted. We respectfully direct attention of the committee to the fact that these State laws generally provide for complete public protection during the time ower-operated vehicles are not under lease to a motor carrier and protected by the insurance required by the Interstate Commerce Commission. If the State law is not complied with the driver's license and the license plates of the owner and operator of the vehicle are taken from him by the State. Under certain of the State laws the vehicle itself is impounded.

Even if such State laws were not in existence, the hazards to the public of highway accidents during the interim between the use of such vehicles under lease by one carrier before it is leased by another have been grossly exaggerated to this committee because such vehicles are in almost continuous use and as soon as one trip is terminated and the driver has completed his rest under the hours of service regulations, the vehicle is then leased to another carrier. It is a matter of common knowledge that the terminals of large for-hire trucking companies using leased equipment are generally located in the same section of the cities which they serve so that the travel upon the public highways of such vehicles while under the control and responsibility of the owners themselves is often negligible and in instances where the carriers use the same or a union truck terminal, which is often the case, the vehicle is never upon the public highways at all during the interim.

Those who oppose trip leasing and advocate the establishment of a minimum period of time for which a vehicle may be leased, such as the 30-day rule which the Interstate Commerce Commission would enforce, apparently have overlooked the fact that at the expiration of such lease, regardless of the period thereof, the same hazard of highway accidents during the interim before a new lease is negotiated would exist at the expiration of a 30-day or any other definite period lease as at the expiration of a trip lease for one or two days were it not for the fact of the State financial responsibility laws to which we have directed attention.

It has been suggested to the committee by certain opponents of the bill that leasing of vehicles by for-hire carriers is a method of giving rebates to shippers. In connection with the type of leasing engaged in by the members of this conference and other for-hire carriers which we are discussing, such a situation is a figment of the imagination on the part of those suggesting it. The rates of for

hire motor carriers, including the members of this conference, are all on file with the Interstate Commerce Commission and it is a violation of law, for which suitable penalties are provided, to charge anything less than such rates or to rebate to shippers. The use of leased vehicles in the manner discussed here has no bearing upon the giving of rebates to shippers one way or another and it is now just as unlawful to give a rebate to a shipper in connection with the movements of his commodities on a leased vehicle as it would be for the movement of his commodities on a company-owned vehicle regardless of the leasing rules contained in Ex parte MC-43. If any possibility for rebating exists in connection with any type of leasing, it is with the lease of vehicles by a carrier to a shipper for private carriage by the shipper instead of with the leasing of vehicles for the purpose of augmenting the carrier's fleet. The members of this conference and the for-hire carriers we are discussing do not lease vehicles to shippers and the proposed bill in no way relates to any such situation. One of the rules in the order of the Commission in Ex Parte MC-43 prohibits the for-hire carrier from leasing equipment to shippers and nothing in H. R. 3203 would prevent the Commission from applying such a rule.

It has also been suggested to the committee that there is often divided responsibility in connection with the operation of a leased vehicle because it is alleged such leased vehicle frequently transports at one time shipments for two, three or more motor carriers. This just does not happen. We do not say it has never occurred because it is possible to discover rare instances of almost anything but we do say without fear of successful contradiction that in the case of the 85,000 trip leases above referred to, entered into by the members of this conference during the year 1952, that there was not one instance where more than one motor carrier was involved. Generally leased equipment is used for the transportation of truckload movements of a particular carrier and while such truckload often includes various less-truckload shipments of that particular carrier to make up the full truckload, less-truckload shipments of more than one carrier are not transported in the same vehicle. In fact, counsel preparing this memorandum, with more than 20 years' experience in connection with the trucking industry, have never known of a single proved instance in which the circumstances under discussion actually occurred, except during World War II when such practice was required by order of the Federal Government as promulgated by the Office of Defense Transportation. If the Interstate Commerce Commission believes that such practice is prevalent or is likely to occur, a very simple rule could be adopted prohibiting the transportation of the freight of more than one motor carrier in one vehicle whether such vehicle is company-owned or leased.

VI. POSITION OF THE VARIOUS PARTIES WHO HAVE APPEARED BEFORE THE COMMITTEE We do not here question the position of anyone who has appeared before your committee either in support of, or in opposition to, the proposed legislation for we concede they have a perfect right in America to take any position they may elect, selfish or eleemosynary. We do not ask your committee to consider the motive of the parties appearing before you in determining the weight to be given to their statements made either in support of or in opposition to the bill. In the first instance we frankly admit that our participation in these proceedings is a matter of self-preservation. We feel that the business of the members of this conference, built up over a long period of years under practices antedating Federal regulation, will be seriously jeopardized and damaged and mayhap some of the members of this conference will be forced out of business altogether. The Supreme Court of the United States told us in effect it was just "too bad" if we were forced out of business by the harsh, drastic, and unworkable leasing rules and regulations of the Interstate Commerce Commission. We do not believe that we will receive such an answer from the Congress of the United States.

In addition, however, to our interest in the continued operation of the businesses of the members of this conference, we are concerned with our obligation as common carriers to provide adequate service to the shipping public which cannot be done without augmenting existing fleets by the use of leased equipment. We are also interested in seeing that the mandate of Congress expressed in the purpose clause of the Interstate Commerce Act is carried out, to wit; that the inherent advantages of all types of transportation be preserved for the public interest and the national defense. The banning of the use of leased equipment destroys one of the most important inherent advantages of the motor-carrier industry, that is, its flexibility, and ability to handle shipments expeditiously, efficiently, economically, and safely.

The motives of the Secretary of Agriculture in supporting this legislation are certainly well and clearly known to all. The Secretary is attempting to prevent the Interstate Commerce Commission from nullifying the agricultural exemptions which Congress deliberately and after being fully advised wrote into the law. The position of the Secretary of Agriculture in connection with the attempt to nullify the agricultural exemptions is exactly the same as that of the members of this conference in connection with the attempt of the Interstate Commerce Commission to nullify the proviso of section 208 of part II of the Interstate Commerce Act wherein Congress expressed as its will that authorized motor carriers shall be allowed to augment their equipment without restriction. Certainly it must be conceded by all that the Secretary of Agriculture and his distinguished staff are acting in what they believe to be the public interest.

As to the motives of certain of those opposing the legislation, we believe they are apparent to the committee but we desire to pinpoint the situation as to certain of such parties. Throughout the proceedings before the Interstate Commerce Commission, the courts, and this committee, perhaps the most vociferous opponents of leasing, when engaged in by motor carriers, have been the railroads. It should be remembered that the railroads carefully, adroitly, and unconscionably as we view it, persuaded the Interstate Commerce Commission to exempt them from all of the rules and regulations governing leasing practices here involved when the railroads or their subsidiaries operate leased motor vehicles as motor carriers. The railroads and their subsidiaries today carry on very extensive motor-carrier operations throughout the United States under certificates of public convenience and necessity granted to them by the Interstate Commerce Commission using large numbers of leased vehicles. While one group of railroad lawyers appeared before the Interstate Commerce Commission urging and were successful in obtaining their own exemption from all of the rules and regulations governing leasing practices when operating as motor carriers, another group of railroad lawyers was before the Commission in the same proceeding at the same time urging and were successful in obtaining from the Interstate Commerce Commission the approval of harsh, drastic, and unworkable rules and regulations governing the leasing practices of motor carriers. The purpose of the railroads before the Interstate Commerce Commission was clear. It was to obtain exemption for themselves and to hamstring the motor carriers by such regulations. Witness Helmetag, an attorney for the rail carriers and one of those who appeared for the railroads before this committee, did not, we believe, directly advise the committee as to the motive of the railroads in this matter. But, Witness Helmetag, who was attorney for the rail carriers in the leasing cases before the Supreme Court of the United States did, upon being questioned by the Chief Justice of that Court, state that their sole interest in this matter is one of competition. The Chief Justice then asked Witness Helmetag whether or not the railroads were interested in public safety in connection with this matter. The reply of Witness Helmetag to the Chief Justice, as we understood it, was that the sole interest of the railroads in this matter is the competitive situation with motor carriers. When we, in our argument before that Court elaborated upon the position of the rail carriers one of the Justices of said Court, who wrote the dissenting opinion in the leasing cases, said in substance "You astound me." As heretofore indicated, we have no quarrel with the right of the railroads to take the dual positions they have in this matter; that is, obtaining an exemption for themselves while in the same breath obtaining the approval of harsh, drastic, and unworkable rules by the Interstate Commerce Commission governing motor carriers. We believe, however, the committee should consider the motives of the rail carriers as of record and as set out herein in evaluating the weight to be given to statements and testimony submitted to this committee by representatives of the railroads. Another of the objectors to the proposed bill is the International Brotherhood of Teamsters-Chauffeurs-Warehousemen and Helpers of America, a labor organization which includes among its membership a large number of truckdrivers. At the outset we wish to state that the members of this conference are in no wise opposed to or hostile to organized labor but on the contrary all of the drivers of the company-owned equipment of the members of this conference and many of the drivers of leased equipment used by members of this conference are members of the labor organization just referred to. We recognize the fact however that there are many owner-operators of leased equipment who are not members of this union. Witness Tobin testifying for the union before this committee estimated that the number of owner-operators including the drivers of exempt vehicles who are not members of his organization is in excess of 200,000.