The CHAIRMAN. We thank you for the cooperation that you have given in this matter, and has always been characteristic of the ICC in its relationship with this committee. We may have an occasion to utilize it a bit further before we have finished with this matter. I am certain if we do, we will get that help from you that has always been readily extended to us. We thank you very much, Mr. Knudson. You have been a very heluful witness to us in the statements that you have made. I can assure you that they have the consideration of the committee. Commissioner KNUDSON. Thank you, sir. The CHAIRMAN. The hearings are recessed subject to call of the Chair. (The Chair submitted the following communications opposing the passage of this proposed legislation :) HOUSE OF REPRESENTATIVES, Washington, D. C., April 13, 1953. SENATE INTERSTATE AND FOREIGN COMMERCE COMMITTEE, Washington, D. C., HOUSE INTERSTATE AND FOREIGN COMMERCE COMMITTEE, Washington, D. C. GENTLEMEN: Enclosed is a copy of a letter I have received from Charles Cook Howell, esquire, vice president and general counsel of the Atlantic Coast Line Railroad Co. Mr. Howell is one of the most outstanding residents of Jacksonville. I would deeply appreciate your considering Mr. Howell's comments in connection with S. 925 and H. R. 3203. Thanking you and with kindest regards, CHARLES E. BENNETT, Member of Congress. APRIL 7, 1953. Hon. CHARLES E. BENNETT, Member of Congress, Washington, D. C. DEAR CONGRESSMAN CHARLIE: Please permit me to invite your attention to S. 925 introduced by Senator Tobey (by request) February 13, 1953, and an identical bill, H. R. 3203, introduced by Mr. Wolverton (also by request) February 18, 1953; which have been referred, respectively, to the Committees on Interstate and Foreign Commerce of the Senate and the House. The purpose of the bills is to set aside the effect of the decision of the Supreme Court of the United States rendered January 12, 1953, in American Trucking Associations v. United States, 73 S. Ct. 307, which upheld the power of the Interstate Commerce Commission, under existing law, to regulate the leasing of motor vehicles by motor carriers. The reports of the Commission which give a full account of the evidence developed by protracted hearings are to be found in 51 M. C. C. 461 and 52 M. C. C. 675. There is nothing strange or out of the ordinary about the legal principles which caused the Supreme Court to uphold the Commission's authority. It had been upheld previously by two 3-judge district courts, 1 sitting in the Northern District of Alabama and the other in the Southern District of Indiana. (The citations are American Tracking Associations, Inc. v. United States, 101 F. Supp. 710, and Eastern Motor Express, Inc. v. United States, 103 F. Supp. 694). And the principles involved had been laid down as long ago as United States v. Pennsylvania R. Co., 323 U. S. 612. If this proposed legislation is enacted, its effect will be to make it impossible for the Interstate Commerce Commission effectively to regulate highway trucking; as the measures would deprive the Commission of authority (in the language of the bills) "to regulate the duration of any lease, contract, or other arrangement for the use of any motor vehicle by a motor carrier in providing transportation, or the amount of compensation to be paid for such use." The action taken by the Commission was not hasty or ill advised. Lying behind each of the rules which it has decided to prescribe, is a long history of practices which the Commission has been observing since motor transportation came under regulation by the first Motor Carrier Act of 1935. A prime necessity for such regulation lies in the fact that motor carriers who use owner-operator vehicles on a trip-lease basis customarily pay the charges therefor by dividing with the owner-operator on a percentage basis the revenues received from the shipper. This is illegal, in the first place, since it amounts to a division of rates between a carrier and a noncarrier; and, secondly, but of equal importance, it gives a carrier availing itself of this method of payment a tremendous economic advantage over carriers whose rates and practices are regulated by the Commission, and whose activities are matters of open record. The abolition of the trip lease as intended by the Commission is supported by the Bureau of Motor Carriers, by a considerable number and representative cross section of the certificated common carriers, by several common carriers and contract carrier associations, a number of State regulatory bodies, by the labor unions, and by the railroads. Discussion of the situation in this letter would make it too long for you to take the time to read it. A very clear and succinct statement of the entire matter was made in a letter addressed to Senator Tobey (at his solicitation) under date of March 27 by Mr. Charles D. Mahaffie of the Interstate Commerce Commission, as Acting Chairman of the Commission's Committee on Legislation and Rules, composed of Mr. Mahaffie and Mr. Commissioner Cross. My purpose in writing you is not to argue the matter out, but to solicit your attention to it, and to venture the earnest hope that when you examine it, you will find that the proposed legislation should not pass. Sincerely,. (Signed) CHARLES COOK HOWELL, Vice President and General Counsel, Atlantic Coast Line Railroad Company, Law Department, Wilmington, N. C. HOUSE OF REPRESENTATIVES, Washington, D. C., April 20, 1953. Re H. R. 3203 Hon. CHARLES A. WOLVERTON Chairman, House Committee on Interstate and Foreign Commerce, House Office Building, Washington, D. C. DEAR MR. CHAIRMAN: It is my understanding that hearings will be held April 21 on the above bill. I have received a great deal of correspondence on this bill and would appreciate it if you would have this résumé inserted in the record. I have received letters from the following against this legislation: L. H. Weber, manager-secretary, Farmers Cooperative Grain Co., Havana, N. Dak. Wayne Bodeen, manager, Bowbells Farmers Union Cooperative Association, Elmer R. Luedtke, owner-manager, Montpelier Grain Co., Montpelier, N. Dak. L. L. Stone, Main Gas Co., Bismarck, N. Dak. R. C. Beattie, Quality Builders Lumber, Bismarck, N. Dak. Louis Wehmhoefer Farm, Wehmhoefer Farm Supply, Bismarck, N. Dak. H. L. Carlson, Anderson Lumber Yard, Bismarck, N. Dak. W. Barth, Sweetheart Bakery Co., Bismarck, N. Dak. R. J. Schreiner, Sweetheart Candy Co., Bismarck, N. Dak. F. Murphy, Peavey Elevators, Bismarck, N. Dak. O. C. Nelson, Nelson Steel Co., Bismarck, N. Dak. M. Bense, Builders Supply Co., Bismarck, N. Dak. W. J. Dugan, Bismarck, N. Dak. William H. Olson, manager, Rutland Farmers Co-op Grain Co., Rutland, N. Dak. Jerome Obrigewitsch, Dickinson Roller Mills, Dickinson, N. Dak. R. E. Halverson, traveling agent, Chicago and North Western Railway System, 400 First National Bank Building, Fargo, N. Dak. Joe Wohkittel, manager, Slope Grain and Feed Co., Mandan, N. Dak. R. Ingold, manager, Farmers Elevator Co., Taylor, N. Dak. L. K. Thompson, manager, Belfield Farmers Union Elevator Co., Belfield, N. Dak. O. Christianson, manager, Spiritwood Grain Co., Spiritwood, N. Dak. C. A. Wardner, 802 Walnut Street, Grand Forks, N. Dak. A. C. Bjerken, general manager, North Dakota Cooperative Wool Marketing Association, West Front Street, Fargo, N. Dak. H. K. Johnson, owner, Lidgerwood Drug Store, Lidgerwood, N. Dak. Leo Becker, Wishek, N. Dak. John Stockburger, Wishek, N. Dak. Gideon A. Perman, Wishek, N. Dak. Emil Jaeger, Hankinson, N. Dak. Ted Boschee, Wishek, N. Dak. E. M. Herr, Herr Merchandise Co., Wishek, N. Dak. Mott Noyel, Wishek, N. Dak. A. C. Sande, Bismarck, N. Dak. E. Hildenbrand, Bismarck, N. Dak. A. Schuette, Bismarck, N. Dak. J. Bozak, Bismarck, N. Dak. J. J. Fasiher, Hankinson, N. Dak. Andrew G. Stockburger, Wishek, N. Dak. John E. Drand, Wishek, N. Dak. In addition to the letters listed, I am receiving more on the same subject with every mail delivery, and I have received not one expression from my State favoring the other side of the argument. With every good wish, I am, Sincerely, USHER L. BURDICK, Member of Congress. JERSEY CITY 2, N. J., April 23, 1953. Re H. R. 3203, 93d Congress, First Session-The Trip Leasing Bill Member of Congress, Washington, D. C. DEAR CONGRESSMAN WOLVERTON: In more than 57 years' practice of the law in my native State I have but infrequently communicated with the Congress of the United States or the Legislature of New Jersey, but I now feel constrained to express to you, in but a few words, my objection to the adoption of the abovecited act. The parties now behind the proposed act were defeated by the highest authority in the United States. The opinions of the courts speak for themselves. Now, the defeated litigants attempt to circumvent the operation of the law as laid down by the courts. It might be said that the parties who are making the attempt are endeavoring to reverse the highest court in the land. May I respectfully urge that the proposed bill be not adopted? Sincerely yours, PETER BENTLY. Hon. CHARLES A. WOLVERTON, GALVESTON CHAMBER OF COMMERCE, Chairman, Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D. C. DEAR CHAIRMAN WOLVERTON: Reference bill, H. R. 3203, involving trip-leasing of trucks which is set for hearing before your committee April 21 and 22, 1953, our traffic and commerce committee have given the matter consideration and I was directed to advise you and other members of your committee that we are opposed to said bill, for the following reasons: 1. From the beginning of the questions involving trip-leasing of motor trucks, we have watched the matter with a great deal of interest and particularly the decision of the Interstate Commerce Commission in Er parte No. MC-43 Lease and Interchange of Vehicles by Motor Carriers (52 M. C. C. 675), as well as the Court decisions which involve the legality of the Commission's decision. 2. Obviously, the proposed legislation is designed to set aside, so to speak, the decision by the Interstate Commerce Commission and that of our Supreme Court in American Trucking Association, Inc. v. United States (U. S., 73 S. Ct. 307), decided January 12, 1953. We consider those decisions as being sound and logical and in the public interest. 3. It is generally conceded that unregulated trip-leasing would undermine and destroy the effectiveness of part II of the Interstate Commerce Commission Act, (title 49, ch. 8, U. S. C). Said act was enunciated by Congress for the sole purpose of regulating motor carriers which had tremendously increased in numbers and were, in fact, "running wild," which condition affected not only the public interest and communities competing with one another, but the other regulated common carriers. 4. Unrestricted trip-leasing creates unfair and unjustifiable competition between other transportation agencies and the disruption of freight-rate adjustments generally, thereby affecting not only communities, but the revenues of the regulated common carriers, both rail and truck, who have in the past several years found it necessary to substantially increase their rates, which increase, after all, is borne by the shipping public who pay the charges. 5. From our experience and contact, it is evident that those supporting the bill are either organizations or persons who are interested in transporting commodities now exempt from regulation, under section 203 (b) and (4a), of the Interstate Commerce Act, who are, no doubt, afraid that the discontinuance of the vicious and abusive trip-leasing practice might have some effect upon the transportation of exempt commodities. In conclusion, we submit that the regulations prescribed by the Interstate Commerce Commission and upheld by our Supreme Court are sound and logical, in every respect, and unless upheld by Congress disastrous effects will result, not only to regulated common carriers, but the public interest. Therefore, we respectfully urge you and every member of the committee, to whom we are sending a copy of this letter, to vigorously oppose bill H. R. 3203. Very truly yours, F. G. ROBINSON, Congressman CHARLES A. WOLVERTON. WILSON TRUCK SYSTEM, Sioux Falls, S. Dak., April 16, 1953. Chairman, Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D. C. DEAR SIR: Mr. Maurice Wilson, president of this company, wired you yesterday asking for time for our general traffic manager, Maurice Rudow, to present the facts with reference to a bill known as H. R. 3203, and because there are so many asking for the privilege of testifying before your committee, and the time allotted is so short, it will be impossible to present even a small percentage of more pertinent facts relative to this trip leasing, and I feel that I should give you a few of the experiences that we have had. We started in the common-carrier trucking business on July 1, 1925, receiving certificate No. 4 in the State of South Dakota and operate in seven States. The territory in which we operate is primarily agricultural. We peddle freight to more than 600 towns. There are more than a hundred of these communities that are inland towns and have no rail service but depend entirely upon truck service for the receiving of their merchandise as well as shipping their merchandise. As an example, from the northwest we operate to Marmarth, N. Dak., and on the southeast, Chicago, Ill. The distance from Chicago to Sioux Falls is 600 miles. The distance from Sioux Falls to Marmarth, N. Dak., is approximately 560 miles. We peddle each and every town between Sioux Falls and Marmarth. On the return trip, practically the only freight that we can secure is agricultural products such as eggs, butter, poultry, meat, etc. During the month of January we handled 129 loads of these commodities to Chicago. For the past several years we have lost, no doubt, many times this amount of freight from South Dakota to points such as Chicago, to trip-leasing operations. By doing so, it forced us to run many trucks from 600 to 1,200 miles eastbound empty. We have many more illustrations similar to the one I have outlined, except the mileage will run from 800 to 1,000 miles in 1 direction. You will note from the map enclosed that we are obliged to operate 19 terminals in order to be able to cover the majority of the State of South Dakota, southwestern Minnesota, northwest Iowa, and northern Nebraska. If trip leasing is allowed to continue, thousands of small-business firms will greatly suffer because the common-carrier rates must be predicated on the cost of operation and when you take away the backhaul freight from the common carriers then their costs increase and they are forced to ask the Interstate Commerce Commission as well as the local Public Utilities Commission in the various States for increases in rates. This all affects the small-business man. There no doubt are some large businesses who would benefit from trip leasing such as cooperative associations, chain stores, large wholesalers, packinghouses, and others, but the rank and file of the small-business firms that make up America are the people who would suffer. I will give you just 1 more illustration, and I could give them to you by the hundreds, but 1 would bring out the point as well as all of them. We have, for sometime, handled the packinghouse products for a company at Watertown, S. Dak., for points into North Dakota such as Bismarck, Grand Forks. Fargo, and other points. Several months ago they put on their own trucks and at the time they put on these trucks we were handling southbound out of Fargo, loads of sugar from Moorhead, Minn., to Watertown as well as to many other towns in South Dakota. This gave us a backhaul from Fargo. They now lease their trucks when they are empty to a grocery firm at Watertown, who is a wholesaler, and they pick up this sugar at Moorhead and take it to the wholesaler at Watertown. You can readily see that this practice of trip leasing if continued, will spread until the common carriers will not have sufficient backhaul tonnage to operate under the present scale of rates. Every time we are forced to raise the rates the small-businessman suffers. The Interstate Commerce Commission came into being many years ago, long before the trucks came into existence and then in 1935 the Motor Carrier Act was passed because of the many abuses on rate cutting, etc. This job was given to the Interstate Commerce Commission and they have made much progress. About 5 years ago they were confronted with many complaints on trip leasing and started an investigation, held numerous hearings, and collected a vast amount of evidence. After this evidence was carefully examined, they issued an order to correct the evils that existed among various types of truck transportation. The trip-lease sponsors immediately took the matter into court and finally it reached the Supreme Court of the United States and after due consideration, they issued their order upholding the order of the Interstate Commerce Commission. Then the trip-lease sponsors proceeded to get a bill through Congress to void the Interstate Commerce Commission's order that had been approved by the Supreme Court of the United States. It would seem to me that your group should give very little consideration to these trip-lease sponsors because if we cannot depend on the Interstate Commerce Commission for guidance after making years of study and examination of the facts, why do we have the Interstate Commerce Commission? Why do we have the Supreme Court of the United States? If normal regulations and control of truck transportation is to be accomplished, certainly the Interstate Commerce Commission should be allowed to continue in a normal manner to bring this about. It is generally recognized that the agricultural people must have all the help we can possibly give them if they are to survive. This is one of the ways that can be done, by protecting them in eliminating trip leasing and allowing the common |