a record of the actual car operations among a large portion of our membership for the very purpose of determining just what the actual situation is with regard to car detention throughout Indiana.

We have many large shippers as well as many small shippers in this record, and I think it represents a very true cross section of car detention throughout the entire country.

Our record for February of 1942 shows an actual operation of 11,961 cars, 6,689 being unloaded and 5,272 being loaded. On the 6,689 cars unloaded, there was involved a total detention of 9,723 days, or an average of 1.4 days per car. On the 5,272 cars loaded, there was a total of 7,961 days, or an average of 1.5 days per car. That is free time and everything.

In the month of March our members reported 9,485 cars unloaded with a total detention of 15,932 days, or 1.6 days average per car in unloading. They reported 6,607 cars loaded, with a total detention of 10,153 days, or an average of 1.5 per car.

To summarize this, in the actual loading and unloading of 11,961 cars in February the total days required was 17,684, or an average of 1.5 days per car. In the actual loading and unloading of 16,092 cars in March, there was a total of 26,985 days or an average of 1.6 days per car. In the actual loading and unloading of 14,862 cars in April, there was a total of 23,513 days, or an average of 1:5 days per car. For the 3 months, February, March, and April, our record included the total of 42,918 cars loaded and unloaded. The total detention was 67,282 days, or an average per car of 1.5 days. Senator TUNNELL. Including free time?

Mr. HOLLOPETER. Yes. This is in the free time.

Senator REED. Your average is less than the free time.

Mr. HOLLOPETER. Yes. We are down below the free time, on the average, Senator. But as I will point out a moment later, it is the average we are thinking of there; and to make that average of course there were some shippers who were not able to unload their cars within the time; others unloaded them even in less time.

Senator REED. Have you any record showing the percentage of cars held beyond the free time?

Mr. HOLLOPETER. No; I have not. I believe one of the gentlemen. following me will have something on that line.

Senator REED. That would be very interesting. That is what we are after the percentage of cars held beyond free time for unloading. Then we have got some basis for comparison to show what, if any, improvement has been made. As a matter of fact, there is something like 10 percent of the cars, as a rough figure, held beyond free time, is there not?

Mr. HOLLOPETER. I would hesitate to hazard a guess on that, because we did not approach it from that standpoint.

In Indianapolis, in February and March, we made a rather intensive campaign on the refrigerator-car operation. We were handling about 600 cars a month, and in the first 2 weeks of February when we started working with those boys the average detention was 3.6 days.

Senator REED. The total detention, including free time? Mr. HOLLOPETER. Yes, sir. In 30 days we had reduced that onethird, and I understand that now it is down within the free time, on the average. That shows what can be done by cooperation, Senator.

I want to point out a little bit further what the rather drastic provisions of this measure would do.

Senator REED. You need not worry about that if we accomplish this objective.

Mr. HOLLOPETER. I mentioned a moment ago the fact that this measure would attack only a very small portion of the problem of prompt handling of freight cars. The best estimates we have indicate that a freight car is in use for each carload shipment on the average of 12 to 14 days. This includes the time from the placing of the car for loading until it is loaded and moved by the railroad from origin to destination, placed for unloading, finally released by the consignee and returned back to the railroad for service. From our record developed for the months of February, March, and April, it is apparent that the shipper, including both the consignor and consignee, is responsible for not more than 3 of these 12 to 14 days. This bill, of course, does not affect in any way the average number of days which the railroads are now employing to handle these cars through terminals and over the road from consignor to consignee.

That I may not be misunderstood, I want to emphasize that I have no intention or desire to raise any question here as to the propriety of that 9 to 11 days average time employed by the railroads to handle the average carload shipment. I do want to say, however, that from my observation the railroads have been providing a most prompt and generally satisfactory service throughout this emergency. Even though I observe that this bill does not attempt to deal with that portion of the car-days, I intend no suggestion whatever that it should be dealt with legislatively, for I think that it would be just as undesirable to attempt to deal with that by legislation as we feel that it is undesirable to deal thus with this average of 3 days per car in the hands of the shipping public.

We must admit, of course, that there are some shippers, even in this group, which produced an average detention of one day less than the prescribed free time, who would be affected by this measure. Most of these, however, are in the class previously referred to who are doing everything within their power, including the payment of overtime wages, to release cars as promptly as possible. In most instances the imposition of the drastic penalties provided here, or even if they were ten times more severe, would not speed up the release of those cars. We must also admit that there are in this group some who, we find from our activities in the car efficiency committee work, are dilatory in a few instances. Therefore, the imposition of the penalties provided in this bill would probably speed up somewhat the release of these few cars. A much more satisfactory solution, however, is that which is now being employed, that of placing embargoes against these very few who are negligent. This has the effect of securing as much improvement in the release of cars as could possibly be accomplished by this measure, and it has the further advantage that it does not unduly penalize the cooperative shipper who once in a while finds himself in a position that, even by the payment of overtime wages, and so forth, through conditions beyond his control he is physically unable to unload all of his cars within the 48 hours.

The service bureau of your administrative arm, the Interstate Commerce Commission, now has ample authority to require prompt

release of cars in these few instances by the placing of embargoes. As a matter of fact, and this is quite important, the Interstate Commerce Commission has full and complete authority to do everything that this measure would do, if after their usual thorough investigation and after giving everyone a full opportunity to be heard, they conclude that such demurrage rates and charges are proper. There is no need, therefore, for the enactment of any such measure by Congress.

On this point I want to emphasize the fact that if, and when, increased demurrage charges appear to become the necessary procedure, we already have the proper machinery to bring that about. Under such an arrangement, severe penalty demurrage charges, and we must admit these are extremely stringent, could be relaxed promptly when the need and justification for their application shall have passed. In actual practice, we find that the need for such drastic action if and when it does arise, passes very quickly at times and the enactment of legislation of this kind would be wholly unjustified and most reprehensible from the time the emergency shall have passed until the measure could be repealed, even assuming for a moment that one would consider it desirable to accomplish this result by legislation rather than the more proper means we already have in existence.

I want to explore for just a moment, also, the propriety of the penalties imposed in this measure. That they are essentially penalties and nothing else, we must all agree. In emergencies such as we have now, the use of penalties in proper measure and at proper times is not objectionable. On the other hand, if the emergency passes and under the provisions of this measure we would still be subject to the penalties, they would take on essentially the nature of revenue and, as such, cannot be justified under any stretch of the imagination. The present lowest demurrage charges of $2.20 per day, in fact, can be shown to be too high as revenue for they produce revenue at a rate that would given an exceptionally high return on the investment in the equipment today. Demurrage charges at the rate provided in this measure would produce revenue at a rate that would retire the investment several times each year. Certainly no justification can be offered for such a rate of charge, whenever it shall have become less of a penalty and more of a revenue than it is today. This will unquestionably come, from time to time, as the flow of traffic fluctuates.

We most earnestly urge, therefore, that the Congress refrain from any such action as contemplated here, leaving the matter in the most proper and efficient hands of your administrative arm, the Interstate Commerce Commission, where everything that might be desired to be accomplished by this measure is already being done, or certainly can be done, fairly and promptly, if and as the need therefor arises.

In listening to some of the previous statements, Senator, I am impressed with this fact, that I think we have to keep in mind that since this emergency has been on, particularly through last October, when we had the peak, everybody has been active and everybody has had his shoulders to the wheel, and I doubt if there is a great deal more water in this thing that we can squeeze out. I want you to recognize that everybody is already doing a lot. When you can get the average detention of cars down to one and a half days—and that is the average-there is a great improvement in the situation. We are all working on the fellow who gets dilatory and holds his cars

6, 8, or 10 days. I think we are doing about all we can do. Certainly we are meeting the test. We did, last October. I think conditions are coming along that are going to get us through.

Senator TUNNELL. Raising the demurrage per day would not affect it, if the free time remains the same anyhow. You have got it underneath the free time.

Mr. HOLLOPETER. The average, Senator, is underneath the free time.

Senator REED. The important thing now is the percentage of cars held beyond the free time. Ten percent is a reasonably accurate figure which was arrived at at one time. It might not be accurate right now. It would mean that 10 percent of the freight cars are being held out of service for storage because of failure to unload. That is entirely too large a percentage of freight equipment to be held. It is those folks that we are after, and only those folks.

Mr. HOLLOPETER. From the records that we have I would say that your 10 percent is high. We have very few instances, I think, not more than two or three a month, where the demurrage went over into the arbitrary charge, and we immediately contacted those shippers and worked with them to eliminate that situation.

Most of those things come about because of our emergency and war work; and that certainly is nobody's fault. Everybody is straining to get this job done, and the shippers should not be penalized.

There is one more thing that I would like to present. In connection with demurrage charges, Senator, we had a discussion this morning from representatives of the Commission. Naturally demurrage takes on two characteristics: One is penalty and the other is

revenue.

In times of stress nobody opposes penalties, if they are imposed properly and in a reasonable manner. We think the Commission, through the cooperation of the shippers, has been doing that as much as and whenever it is necessary.

On the other hand, when you get a high demurrage rate it stays on very often beyond the time when the emergency ceases to exist, and it is difficult to take it off; and at those times a high demurrage rate is much more of a revenue than it is a penalty.

Certainly the rates involved here are too high for any such characteristic as that, because, as a matter of fact, they would retire the total investment in the equipment two or three times every year.

I want also to touch on one point that the Senator raised this morning with reference to the demurrage charge during the days of the Railroad Administration. There was a decidedly different situation, Senator, in having that imposed by an order than having it imposed by legislative action, because the order was flexible and we were able to handle it properly.

That is what we have, exactly, in connection with the O. D. T. and the Commission today.

If more drastic demurrage charges are necessary, you will certainly not find us opposing them if they are ascertained to be proper and issued by the Commission and held in the Commission's hands where they can be modified or adjusted as soon as conditions warrant or justify.

Senator TUNNELL. You will understand that I did not intend by my question to indicate that I favored arbitrary application by

statute.

Mr. HOLLOPETER. No, sir; I did not gather that impression, Senator.

Senator REED. The demurrage charges were not too high to arouse interest.

Mr. HOLLOPETER. Senator, they aroused interest.

I found this in our working in cooperation, that we have many shippers who are paying time and a half for overtime for unloading freight cars on Sundays and Saturdays. Of those shippers there are some who from time to time get into situations where they cannot get their cars unloaded in 48 hours, and they have to pay some demurrage, and they say that is loading it on a little bit heavy, when you have asked us to cooperate and we are paying overtime to get these cars unloaded and doing everything we can and then when we get into a situation that is beyond our control you assess a penalty charge like this.

Of course for the man who is dilatory and negligent there is no answer to it. He ought to have 10 times the demurrage that you are proposing here; but there is no practical way to get that man by this measure, it seems to me, without hurting the men who are really cooperating and who ought not to be hurt.

Senator TUNNELL. A great majority of them are already doing it? Mr. HOLLOPETER. Absolutely. I would say that there are less than 1 percent who are really dilatory in this matter.

Senator REED. I am going to ask the Interstate Commerce Commission for a study of this question of the proportion of total carloadings and unloadings that are delayed beyond the free-time period. It was about 10 percent. I made some calculations with reference to demurrage charges where the railroads collected $9,000,000 for the class I roads. $2 a day, which was the prevailing rate, of course with some heavier charges than that, is equivalent to 4,500,000 car-days, using the formula which the Bureau of Statistics of the Interstate Commerce Commission lays down as a general guide, not claiming that it is absolutely accurate. I reduced that 4,500,000 cardays to average freight car movements. That is equivalent to a detention of about 13,000 cars. If you take 4,500,000 car-days and divide that sum by the number of days required for a freight car to make a round trip and be loaded and unloaded, the result would be about 13,000 cars. All of us are trying to reduce that. That is too many cars to be held out of service.

Mr. HOLLOPETER. Senator, with reference to the figure of $9,000,000 of course part of that is in situations that the chairman pointed out a while ago, involving conditions beyond the control of the shipper, such as strikes and other things.

I want to again emphasize what we are actually doing. In January of this year on shipments of foodstuffs going to the Navy they started loading the cars 28,000 pounds per car, but last week the report was that they are loaded 56,000 pounds per car now. Those programs are going on, Senator, with the cooperation of all the shippers. We are not hitting the shipper who is cooperating and working along fine. I am fearful of pressing too far, whether we hold it up as something to scare the shipper or otherwise. Those men are straining their backs and spending their money for overtime to do this job.