processing plant or the cannery in these owner-operated vehicles moves at rates that are beneficial to the farmer, and that the farmer may stand actually to lose in some places, and on some occasions by virtue of this decision. But I tried to point out earnestly as we can under the facts we have that we believe that that is a small minority of circumstances and instances.

The CHAIRMAN. My interest in this legislation arose through the feeling that an injustice was being done to the farmer by this order. During these hearings, there has been brought to our attention an operation which was described as the gypsy operation, and with which evidently you are familiar, even though you do not wish to call it by that name.

What percentage of that type would be affected by this order as compared to the number of farmer-owned trucks?

Commissioner KNUDSON. I do not know. In speaking in generalities, a relatively small number of the total, and certainly only those who have habitually or as a matter of practice trip leased their trucks for the backhaul. We e say that is not too many.

The CHAIRMAN. Are you speaking now of the farmer-owned or of the gypsy?

Commissioner KNUDSON. I am speaking of the owner-operater owned, the itinerant.

The CHAIRMAN. Now, the gypsy operator, is that not in fact the real operation that you folks are aiming to get at, and which you feel creates the hazard from the safety standpoint, rather than the farmer-owned truck?

Commissioner KNUDSON. Yes; I think that is so because we do not look upon the leasing rule as affecting the farmer-owned trucks. Under the exemption clause, the farmer has the absolute protection of Congress, and we have to pay some attention to that, too. Mr. HINSHAW. Will the chairman yield to me?

The CHAIRMAN. Yes.

Mr. HINSHAW. It seems to me that the farmer is exempted now under subparagraph 6.

Commissioner KNUDSON. 203 (b) (6).

Mr. HINSHAW. On occasional hauls of commodities, is he not? Commissioner KNUDSON. He can haul exempt commodities anywhere he wants.

Mr. HINSHAW. No; I mean occasional hauls of commodities not exempt?

Commissioner KNUDSON. Yes; I think that is right.

The CHAIRMAN. What would be the proportion of those affected by this order who are known as gypsy operators, and those who are recognized as farmer-owned truck operators? Five times as many, 3 times as many, 10 times as many, or what would be that proportion? Have you any idea?

Commissioner KNUDSON. If the 1-percent figure that we have tried to give some currency to is valid at all, then almost the total impact of this order and of the bill that is proposed would relate to the itinerant operators, maybe 99 percent.

The CHAIRMAN. If the committee should come to the conclusionand I am not speaking for the committee, but merely putting a question-that they wanted farmer-owned truck transportation to be fully protected, but did not feel the same incentive for protecting

the gypsy operator, is it possible for you to indicate to us the type of legislation that would be necessary to accomplish that, other than this which is now before us, and to which you object, because of its broad terms?

Commissioner KNUDSON. Yes, sir; I think it would be. In my own mind, I have been wrestling with this matter since I first knew that I would have to appear before this honorable committee. I thought something in terms of validating the going transportation of these carriers that can prove, as in "grandfather" days, that they are legitimately actually engaged in this. That would be giving quite a big caseload to the Commission. It might be done that way.

It might be done some other way. We might be able to devise some suggested legislation. I have none to offer you today.

The CHAIRMAN. Not because there is any such thought in the mind of the committee at this moment, but in order that we might have every possible angle presented to us, it would, I think, be appropriate if you could suggest some such language to us. The Commission occasionally submits to us bills that have the recommendation of the Commission which I, out of courtesy always introduce, and see that they have a hearing before this committee. Now I am making this suggestion to the Commission, that it direct its attention to the legislation of a character that I have suggested in order that the committee may have the benefit of your thought in that matter.

Commissioner KNUDSON. What time limitation do you put on that, Your Honor?

The CHAIRMAN. I would not be severe in that. I would not ask you to have it ready tomorrow or this week, but within a reasonable time.

Commissioner KNUDSON. I will report back to the Commission and endeavor to see that we do just that.

The CHAIRMAN. Very well. What in your opinion would be the practical effect of the 30-day clause that is in the order? There have been some questions directed to you and to others based upon a 15-day limitation, and other day limitations. I am asking now what would be the practical effect of the 30-day clause with respect to the likelihood of a farmer entering into such lease or refusing to do so if it had to be for a 30-day period. Then I will follow that by asking you what would be the effect so far as the use of the truck by the farmer is concerned if he did enter into a lease for 30 days with a carrier.

Commissioner KNUDSEN. Again, Mr. Chairman, if the 1-percent figure we have given you or anything equivalent thereto means anything that is to say, a few farmers actually enter into these tripleasing arrangements there would be very little effect of a 30-day, 15-day, or any other day clause on the farmer as such. If the 1-percent did have to enter into the trip-leasing arrangement on a 30-day basis, I can foresee some difficulty in getting back on occasions to his farm within 30 days and having to haul another load of farm traffic on his truck while he was under lease. That seems to me at the moment to be a practical difficulty.

The CHAIRMAN. It would seem to me, and I bow to your superior knowledge based upon your experience, that if a farmer had to enter into a 30-day lease, that turned over so to speak his vehicle to the carrier, that he just could not do it for he uses it for other purposes. Would not the necessity of entering into a 30-day lease just take him

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out of the situation so that he would never make such a lease, and there fore his truck could never be used in a trip lease?

Commissioner KNUDSON. I shall certainly concede that with respect to the farmer if he does that, unless he does it with his eyes open. knowing that he cannot get back to his farm anyhow, because he is going on a long trip for a carrier and delivering regulated commodities, that it would work a hardship on him.

The CHAIRMAN. Of course, I have in mind that there seems to be some injustice in the criticism that some made who are opposed to this legislation by inferring that they knew of instances in which farmers would take a load of produce to the market, we will say, from Georgia to Chicago, or from Virginia to Chicago, and then would return to Virginia by way of Illinois, Arkansas, Georgia, Tennessee. Of course, I do not think there are many instances like that, and I do not think there is intention to protect that kind of an operation.

Commissioner KNUDSON. I do not think there are many instances of a farmer as such going to New York.

The CHAIRMAN. If he did, he would not be in a hurry to leave, maybe, but at any rate, the point I have in mind is that if he took a load from Virginia to New York, for instance, and was permitted to bring a load back to the general locality in which he lived, it seems to me that there could not be any objection to an operation of that kind.

Commissioner KNUDSON. I see some objection, if you will pardon me. I am not sure that farmers should be allowed in the transportation business, if it is going to break down the economy of the trucking business. There is much to be said on both sides.

The CHAIRMAN. Maybe not if you assume that it will break down the trucking industry. It is very difficult for me to say that it would break down the trucking industry if it is limited to 1 percent, so to speak. I cannot conceive of that being sufficient in itself to break down the trucking industry.

Commissioner KNUDSON. However, if the practice is validated, it might conceivably increase to far more than 1 percent.

The CHAIRMAN. For 18 years this has been just as possible. for the first time the Commission has recognized that they should do Now something about it, so it has taken an awfully long time to accumulate to the present point.

Commissioner KNUDSON. If you will pardon me, sir, these have been extraordinary 18 years. We have had 10 years of either war or emergency in which trucks have been hard to get. We have had a lot of veterans coming back and going into this business. I do not think that the last 10 years can be said to be typical of the next 10.

The CHAIRMAN. Not necessarily. We hope not, so far as the war situation is concerned.

Commissioner KNUDSON. I certainly hope so, too.

The CHAIRMAN. I want to bring to your attention a suggestion that has come to me. I have not had an opportunity to give it consideration yet, but I am glad to put it before you for your consideration. I will read the letter that I have before me which is as follows:

Re H.R. 3203.

WASHINGTON, D. C., May 7, 1953.

Hon. CHARLES A. WOLVERTON,

Chairman, Committee on Interstate and Foreign Commerce,

House of Representatives,

Washington 25, D. C.

DEAR MR. WOLVERTON: Mr. James F. Pinkney, general counsel of the American Trucking Associations, Inc., informs me that he has tried to arrange a conference with you for himself and me in respect of the above bill, but circumstances seem to have prevented our meeting with you. However, I hope you will permit me the liberty of making a suggestion in writing as to the pending bill, H. R. 3203. I do not do so as representative of any client or other interest. My principal client is the National Association of Motor Bus Operators. Its members, as common carriers of passengers, are not involved in the leasing proceeding before the Interstate Commerce Commission. However, I am an attorney for a nationwide motor carrier of household goods, the Aero Mayflower Transit Co. of Indianapolis, which I am sure is interested in the legislation. But I speak to you principally as a friend of the court from the background of my experience as former Chief Attorney of the Bureau of Motor Carriers, Interstate Commerce Commission, General Counsel, Office of Defense Transportation, and Under Secretary of Commerce for Transportation, and because of my own personal interest in a sound solution of the impracticable and inequitable situation which has arisen by virtue of the recent Commission regulations.

In my judgment, legislation should be enacted upon this question, but it should be based upon fundamentals and should not attempt piecemeal to correct a few, but not all, of the defects which the regulations reflect. The principle upon which I feel that legislation should be grounded is that, in respect of leasing, the Commission should not be permitted by regulations to go beyond those which are necessary to assure that the complete domination, direction, and control of a leased motor vehicle be in the lessee, and that the lessee assume and have complete responsibility for its operation at all times when in his possession. That principle was first enunciated by the Interstate Commerce Commission in the case of Dixie-Ohio Express Application (17 M. C. C. 735), and has been consistently followed by the Commission and the courts until now. In that decision, the late Commissioner Joseph B. Eastman, in a specially concurring opinion, laid down the fundamental rule as to the use by an authorized carrier of motor-vehicle equipment belonging to another. His statement of the principle appears on page 752 of that report. I have attempted to paraphrase it in a proposed substitute for H. R. 3203 which I enclose herewith.

In my opinion, this suggestion may offer a solution for the many unsound results which I am sure will grow out of the Commission's present regulations and will be grounded on a basis which seems to me unassailable.

I will very greatly appreciate your consideration of this suggestion. Mr. Pinkney and I will be glad to discuss it with you further at any time that suits your convenience.

Very sincerely yours,

ENCLOSURE

JACK GARRETT SCOT.

202 (d). Nothing in this part shall be construed to authorize the Commission to prescribe regulations concerning leases, contracts, or other arrangements for the use by an authorized motor carrier of motor-vehicle equipment belonging to another person, except only to the extent necessary to assure that such authorized motor carrier shall have the full direction and control of such motor-vehicle equipment during all times when in his possession and shall be fully responsible therefor in all respects under all applicable provisions of law governing the duties and obligations of the authorized carrier to the shipper and to the public generally.

The CHAIRMAN. Would you be able to pass judgment on that? Commissioner KNUDSON. It sounds like a pretty good paraphrase of our order in the leasing case to me, except for the 30-day provision. The CHAIRMAN. It does not have any 30-day provision in it. Commissioner KNUDSON. No; it does not.

The CHAIRMAN. After all, you have said that the only part of your order that this bill would change would be the 30-day provision and the compensation.

Commissioner KNUDSON. Yes, sir. I have said that, but I go back to the full text of my statement in which I have tried to point out that that simplified approach has some basic shortcomings with reference to our ability to enforce the order and make anything out of it.

The CHAIRMAN. You laid great stress upon the necessity for this order from the standpoint of promoting safety; have you not? Commissioner KNUDSON. Yes; the Commission does, Your Honor. The CHAIRMAN. Let us see how much there is in the question of safety so far as the farm-owned vehicle is concerned. First of all we start out with the assumption that it does not exceed 1 percent. In the next phase we assume that the carrier carries his product to market intrastate. It would not have any effect on him; would it? Commissioner KNUDSON. No, sir.

The CHAIRMAN. So it would not touch the question of safety from that standpoint?

Commissioner KNUDSON. No; it would not.

The CHAIRMAN. Now, we will assume that the farmer carried it across a State line, but he did not take any trip lease back. It would not affect him; would it?

Commissioner KNUDSON. No, sir.

The CHAIRMAN. And that, you say, is about 99 percent of the cases. Commissioner KNUDSON. As far as the farmer and his vehicle as such are concerned.

The CHAIRMAN. So it would help the safety situation in that instance; would it?

Commissioner KNUDSON. It would be in the law de minimus, I think we say. It would not be much one way or the other as far as that situation is concerned.

The CHAIRMAN. So that from the standpoint of safety as a reason it does not amount to much?

Commissioner KNUDSON. Not with respect to those vehicles, no, sir; but when you come to the owner-operated vehicles, you get into other territory.

The CHAIRMAN. By that you mean the gypsy.

Commissioner KNUDSON. The itinerant carriers.

The CHAIRMAN. Very well. Now I am talking about the farmer for the present.

Commissioner KNUDSON. Yes, sir.

The CHAIRMAN. Because this order of yours affects the farmer as well as the gypsy; does it not?

Commissioner KNUDSON. It controls the farmer as well as the gypsy. Whether it affects him or not is an open question.

The CHAIRMAN. According to your idea while it affects them, it affects so few that it is rather inconsequential.

Commissioner KNUDSON. Yes, sir.

The CHAIRMAN. If it is inconsequential, why do we not draw an order that will exempt him entirely?

Commissioner KNUDSON. That is a very good question. I shall certainly take that personally under advisement and report that back to the Commission.