to load or to unload. Any free-time period inconsistent with that actual carriage obligation would be contrary to the concept that demurrage contemplates charges for detention for which the shipper is responsible after the carrier has completed its contract of carriage, and the same thing would of course apply when cars are set for loading. D. Basis of the amount of the charges imposed: This subject has necessarily been interwoven with the answers already submitted. There is no hard-and-fast, scientific method of determining the amount of the charge which will properly balance the scale as between compensation and penalty. It is a matter of judgment, applied to the test laid down by Congress in section 1 (5) of the Interstate Commerce Act, that every charge shall be just and reasonable, and every unjust and unreasonable charge is prohibited and declared unlawful. Obviously the sufficient amount to compensate the carrier for use of its car has varied at different times. At present it is higher than when demurrage first took on aspects of importance and serious inquiry was made concerning the reasonableness of the charge. Likewise the amount sufficient and reasonably necessary to insure reasonably prompt loading or unloading under circumstances as to car supply existing at any particular time has varied greatly. In connection with compensation for car ownership, for many years the per diem charge, which is the charge paid by one carrier to another for use of its cars, has been $1 per day. As to the penalty feature, it has been reflected in the charges to the extent which appeared to be necessary under varying traffic conditions, without at the same time placing an undue or unfair burden upon shippers who, as a practical and sometimes physical matter, are unable to unload within the free time and necessarily incur demurrage charges. It is in recognition of these changes in conditions that we now have demurrage charges which are much higher than when Commissioner Lane's committee found a uniform charge of $1 per day to be reasonable, in 1909. They are about 120 percent higher.

As to headings E, F, and G, data on these subjects, relating to service matters, are being prepared and will be supplied by Commissioner Johnson and Director King, but I might, if I may, make certain other comments on the effect of the resolution as it stands.

Senator REED. Where the Chairman reaches that point the record, of course, will show what remains, which are described here as E, F, and G.

E-the lines of commodities in which the greatest delays in unloading have occurred.

F-the destinations at which most numerous delays occur.

Did you mean G to remain for discussion by giving Mr. Johnson an opportunity, or are you going to discuss that?

Mr. AITCHISON. No; I am not going to discuss it.

Senator REED. G is the feasibility of imposing extra demurrage charges during seasons when a particular type of car is in the most demand.

For example, it is a matter of common knowledge that the maximum demand for boxcars is from July to October. The maximum demand for coal cars is from October to January. The maximum demand for refrigerator cars varies with the season.

Go ahead, Mr. Aitchison.

Mr. AITCHISON. We assume that Senate joint resolution 147 is intended to apply only to cars which have moved or are to move in interstate or foreign commerce. The jurisdictional scope should be made plain.

Although the resolution purports to be directed to promoting the war effort, it in fact constitutes continuing legislation, in that it contains no provision that confines its operation to the present emergency. If enacted at all, it should, for reasons already indicated, be confined to the duration of the emergency. Otherwise, when the emergency passes, the resolution will continue, and the restriction on free time and the increases in charges will become oppressive and needless.

It legislates a fixed rate of demurrage, leaving no authority to this Commission to relax those rates where hardship is worked thereby. The qualification "except as otherwise provided by appropriate order of the Interstate Commerce Commission" which is found in the resolution, relates only to the free time and not to the amount of the charge. To illustrate the effect of such an enactment, reference may be made to Chrysler Corp. v. New York Central R. Co. (234 I. C. C. 755). The facts in that proceeding were-and I should say that the transtions occurred in the time of very free car supply.

Senator REED. Mr. Aitchison, Chairman Johnson has a letter from Dr. Splawn, which he turned over to me and which I intend to have made a part of the record. Are you reading now the letter from Dr. Splawn?

Mr. AITCHISON. No.

Senator REED. Go ahead.

Mr. AITCHISON. In the Chrysler case it was shown that employees of the shipper on March 8, 1937, seized the several plants of complainant, and locked, barricaded, and guarded the gates, taking over the property by force and forcibly ousting the management. The occupation of the plants by the striking employees continued until March 25, although complainant, within 48 hours after the strike was called, sought and secured a mandatory injunction which directed the strikers to vacate the plants by March 17. That was 9 days after the strike began.

The strikers refused to comply with the injunction, and on March 19 the court ordered the arrest of those holding the plants. Constituted State authority failed to act under the court's order, and on March 25, under an arrangement with the strikers, the Michigan State police took control of the gates and prevented the use of the plants. On April 6 an agreement between the complainant and the union was signed, the State police withdrew, and possession of the plants was returned to complainant. During this time demurrage of $58,052 accrued on 426 cars remaining within the plant confines, and $37,800 on 687 cars held outside the plants. These charges were based on $2 a day for the first 4 days after the expiration of 2 days' free time, excluding Sundays and legal holidays, and $5, possibly $5.50 I have forgotten which-for every day thereafter; and if that were increased to $25 a day the figures would be similarly increased. The charges were found legally applicable under the tariffs, but on cars held within the plant confines during the period in which complainant was dispossessed of its plant and was thus without power to unload and release cars, the charges were found unreasonable to the extent

that they exceeded $1.20 a car for each day of such impoundage, including Sundays and legal holidays, and reparation was awarded. The Commission thus recognized that demurrage charges embrace the distinct elements of compensation for the use of cars and tracks and a penalty designed to prevent undue detention of cars and to insure their prompt return to public service; and it found that under these circumstances there was no reason for the imposition of a charge so heavily penal in its nature as the code provides that the reason for rigidity in the demurrage code to avoid personal discriminations and preferences was absent in this case and it based the conclusion as to the amount of a reasonable charge only upon the element of compensating the carrier for the use of the cars. Other proceedings in which like action has been taken were some that grew out of strikes on the Pacific coast: Balfour, Guthrie & Co. v. Chicago, M., St. P. & P. R. Co. (235 I. C. C. 437) and Chronicle Publishing Co. v. Great Northern Ry. Co. (243 I. C. C. 279). Obviously, this Commission would be unable to afford relief in future instances of this nature if the proposed legislation is enacted in its present form.

In our opinion, such a drastic penalty as proposed in S. J. Res. 147 is not required. Such a penalty might induce some few uncooperative shippers to release cars more promptly; but shippers generally are cooperating, and there are a considerable number who, regardless of the amount of the penalty, would find it impossible to avoid incurring the penalty. For example, as pointed out in our letter of May 26, 1942, to the chairman of the Senate Committee on Interstate Commerce, some industries do not operate at night or on Sundays or holidays. In some instances this fact is due to labor agreements, or to a shortage of labor. Under such circumstances the imposition of a heavy penalty would only add to the shipper's operating costs and to the railroad's revenue without any saving of car detention.

Free time is accorded on the theory that the carrier performing transportation must accord the shipper a reasonable opportunity to load and unload his freight, which necessary time is considered in making the line-haul rate. We have hereinabove alluded to the considerations which have entered into the fixing of the free time at 48 hours. Under the resolution this free time is cut to 36 hours and made to end at 7 p. m. instead of 7 a. m. as at present. When a shipper has been unable to load or unload within the daytime of the 48 hours now permitted, often the loading or unloading is continued into the night so as to release the car before demurrage starts to run the next morning. It is common practice to switch industries during the night. To end the free time at 7 p. m. as proposed would afford no incentive for the shipper to complete loading or unloading that night and allow the car to be removed during the night, thus tending to delay rather than to hasten release of the car.

Freight at ports awaiting movement by water, such as export shipments, grain at lake ports, and coal at tidewater and lake ports, generally present problems requiring special treatment with respect to demurrage because of the limitations of marine transportation. Free time on such freight is generally somewhat greater and the demurrage charges are often different in the case of such freight than as to domestic freight in general. The uncertainty of water transportation today is vastly greater than ever before. The resolution would set

aside all special arrangements applicable to shipments of this char acter, except that it would permit the Commission to vary the free time by "appropriate order."

And I may say that I should like also to have the committee, if it can, give the Commission a better standard to guide its discretion in passing upon and applying the facts to the intent of Congress than the use of the words "appropriate order."

Senator REED. Mr. Chairman, I drew this resolution rather hurriedly. I had a lot of things on my mind about that time. I intended to put in there a provision that would give the Commission wide authority to consider unusual and extraordinary circumstances, and you may be certain that in the final consideration to be given to this, if it is offered for passage, that will be included.

Mr. AITCHISON. I may, then, suggest certain things that I think may well be given consideration when that time comes.

Senator REED. We are very glad to have your suggestions. That is what this hearing is really for.

Mr. AITCHISON. There is no provision that such order may be made without hearing in emergencies, or that such order may take effect upon less than the usual 30 days' notice. Pending such investigation, hearing, and order, the resolution would require the removal of all such freight from the cars within 36 hours regardless of the availability of a vessel to receive it, or the imposition of the drastic demurrage penalty charges provided by the resolution without power on our part to relieve from those penalties regardless of circumstances. This would not necessarily increase car efficiency, as after arrival of the ship it would be necessary to reload the freight and transport it to the piers. It makes no allowance for Sundays or holidays, although storage warehouses may be closed on those days. It would in some instances require the rehandling, perhaps to their damage, of perishables arriving at a market on Saturdays too late for that day's market, or the imposition of the demurrage charge.

Section 15 (2) of the Interstate Commerce Act provides that, except as otherwise provided in part I, relating to rail transportation, all orders of the Commission under that part, other than orders for the payment of money, shall take effect within such reasonable time, not less than 30 days, as shall be prescribed in the order. But in section 1 (15) the Commission is empowered in times of shortage of equipment, congestion of traffic, or other emergency requiring immediate action, to issue orders with respect to car service without notice or hearing and effective at once. Under section 1 (10) car service is defined as including the use, control, supply, movement, distribution, exchange, interchange, and return of locomotives, cars, and other vehicles used in the transportation of property. While that is the definition of the statute, it is clearly demonstrable from the cases in the courts and before the Commission that "car service" rules as commonly understood embraced demurrage practices and charges.

In other words, the statutory definition of "car service" in section 1, paragraph 10, is narrower than the usual meaning applied to the words at the time the statute was enacted.

The Supreme Court, in Peoria & P. U. Ry. Co. v. United States (263 U. S. 528), has limited the width of language defining "car service" to apply only to "the use to which vehicles of transportation are put; not the transportation service rendered by means of them." The

resolution, by specifically legislating upon particular car service matters, directly and permanently prohibits the use of any of the Commission's emergency powers over demurrage, which is a matter of car service. If legislation is needed, a strengthening of the flexible powers of the Commission under section 1 (10), (15), and (16) would be in order.

Senator REED. May I make a request, Mr. Chairman? I wish you would take this resolution and in your own time, if you ever have any, rewrite it for us.

Mr. AITCHISON. If you promise to adopt it that way.

Senator REED. We will not promise that, but we should be very happy to have your suggestions. I think they are all very pertinent. Mr. AITCHISON. I shall try, of course, to do that.

Reference has heretofore been made to the "average agreement" plan. The use of that plan would be impossible under the resolution. Senator REED. Go ahead. I want to discuss that agreement with

you.

Mr. AITCHISON. Under the "straight demurrage" plan a carrier is obliged to place cars in the order of their arrival, and this frequently requires a vast amount of additional switching service within the carrier's terminal yards and from the latter to the loading or unloading point.

The object of the "average agreement" demurrage rule is to permit a carrier to place cars for loading or unloading without regard to their exact order of arrival, and to allow the shipper or consignee, after the actual movement has ceased, the maximum free time to load or unload each car with the advantage of using the unexpired free time on some cars to offset detention beyond free time on other cars. It is a privilege extended by a carrier so that it may handle cars without regard to their exact order of arrival, and thus to save the carrier additional switching.

Under this plan, as to commodities in general, and as presently in effect, a shipper or consignee is allowed one credit for each car released within the first 24 hours of free time and charged one debit per car per day for each of the first 4 days the car is held after the expiration of the free time. At the end of each calendar month, for all cars released within that month, the total number of credits are deducted from total number of debits at the ratio of two credits for one debit; that is, two credits are required to cancel one debit.

Senator REED. When did that change become effective?

Mr. AITCHISON. The 1st of June. Previously it had been an even exchange and cancelation.

Senator REED. Up to that time a credit balanced off the debit?
Mr. AITCHISON. That is right.

Excess debits are charged for at the rate of $2.20 per debit. Excess credits in any one month cannot be used to offset excess debits of any other month. Detention after the fourth debit day is charged for at the same rate ($5.50) as under the straight plan, except that Sundays and legal holidays are included in the detention time. And there is, also, in respect to the average plan, no exception in the case of act of God, weather conditions, bunching of deliveries, and things of that sort, which customarily are exempted under the straight demurrage plan. The history of these charges is shown in an exhibit which I shall submit at the end of my testimony and ask that it be included in the record.