reconsignment rules that they have, and what rule you have in effect over there now, and what the result has been.

Mr. KENDALL. It has been the practice among fruit and vegetable shippers, as well as with certain other commodities to be shipped on Potomac Yard "hold for reconsignment," that the amount of cars so held depends upon the commodities that are running. It might be potatoes for a while, or it might be peaches for a while, watermelons, or something like that, although watermelons not so much as other commodities. Two months ago it was found that Potomac Yard was pretty close up to its capacity. They were having difficulty in keeping ahead of the switching requirements. They were handling about 2,200 cars a day over the hump north-bound, and the number of cars placed on the hold track for reconsignment and diversion might run from 100 to 300 daily.

Senator REED. Was that mostly refrigerator traffic?

Mr. KENDALL. These were refrigerators; they are not altogether refrigerator cars.

Senator REED. Not altogether. I think, mostly.

Mr. KENDALL. But to some extent refrigerator cars. Potatoes do not run in refrigerator cars always.

Senator REED. That is right.

Mr. KENDALL. I remember one particular day not long ago there were 138 cars of potatoes that were put over the hump and went to this hold track for diversion. Now, that means after diversion orders are received those cars must be pulled back to the other end of the yard and sorted out and those cars on which diversion orders have been received put over the hump in their regular classifications for forwarding north.

If that had been refrigerator cars, for instance, in a season of refrigeration, and the car had been on hand 24 hours or perhaps longer, it would need re-icing; that car would have to be switched to the icing track, which is at the other end of the yard, and then put over the hump again, or perhaps two or three times, so long as it is held there for reconsignment and diversion.

The Interstate Commerce Commission issued directions about a month ago, I would say, eliminating Potomac Yard as a hold and diversion point. There is a provision that if diversion orders are received by the agency at Potomac Yard up to 3 hours prior to the arrival of the car he has then sufficient time to reconsign that car and put it on the right classification track so it does not have to be hauled back and rehumped. In other words, there is no extraordinary detention to that particular car.

Senator REED. Is that 3 hours? I had the impression it was 4. I take your statement, of course.

Mr. KENDALL. I think it is 3 hours. That is the limit. Those orders are received during sometime prior to that.

Senator TUNNELL. What do you mean by "rehumped"? I don't catch that.

Mr. KENDALL. At a freight yard like Potomac Yard, where there is any large volume of business that is handled, they have a yard that is laid out so that the car moves by gravity. That is, they build up the center of the yard perhaps 8 or 10 feet or more and then push cars up there, and they run by themselves onto the various classification tracks. There are car retarders in some yards that will brake

that car automatically, rather than to put a man on for braking purposes; and, as I say, there are about 2,200 of those cars that go over that hump in each direction here at Potomac Yard every day.

Senator TUNNELL. It is properly named. I did not know what you meant.

Senator REED. It is a simplification of the switching movement. Instead of the switching engine furnishing all of the power directly, the switching engine furnishes just power enough to get the car over the hump. That is the reason they call it that. And then it goes down by gravity. Those yards are designed scientifically so that they have just enough fall to take the car down by gravity onto the field tracks. Mr. KENDALL. They can switch about a hundred cars an hour that way, whereas flat switching would take three or four times as long That has been the cure for the Potomac Yard's trouble.

Senator REED. Go ahead, Mr. Kendall.

Mr. KENDALL. I am all through.

Senator REED. I think I have only a couple of notes here. Do any of you gentlemen want to ask Mr. Kendall any questions? Mr. KENDALL. May I have leave to correct this record? Senator REED. Certainly.

Mr. KENDALL. I want to correct the record in that some of these dates may be in error, and I should like to check them up.

Senator REED. Certainly. The reporter is furnishing me a copy of the record. You mean to check up on what?

Mr. KENDALL. Certain dates as to when the new demurrage rates go into effect.

Senator REED. Do you want to correct those now?

Mr. KENDALL. No. I shall have to check my records with the Interstate Commerce Commission.

Mr. Lacey ought to know about this. Do you know?

Mr. LACEY. On page 5, Mr. Kendall, of your statement, where you say that effective August 1, 1942, the rate of $2.20 will apply to the first 2 days after the expiration of free time, I thought that was June 15. I may be wrong, but I did not know it was August 1.

Senator REED. Just to shorten the record, suppose, Mr. Kendall, if you want to correct it, you get the correct date and make any change in the original testimony, and it will make a good deal simpler record. Senator TUNNELL. The discussion of it here would be long.

Senator REED. Now we shall take on these coal people next, if you gentlemen can agree among yourselves as to the order in which you will proceed. I have Mr. Seal here. But he is for the N. I. T. League and the Baltimore Association of Commerce; Mr. Estes, Mr. Bell, and Mr. Goodyear. Are there any other coal representatives here? (There was no response.)

Senator REED. Can you agree among yourselves as to who should go first?

Mr. BELL. Do you want to go first, Mr. Estes?

Mr. ESTES. It is agreeable to me however you want to handle it, Senator.

Senator REED. All right, Mr. Estes; suppose you start.

STATEMENT OF F. F. ESTES, TRAFFIC MANAGER, NATIONAL COAL ASSOCIATION

Senator REED. Have you a prepared statement?
Mr. ESTES. I have a more or less rough draft.

Senator REED. How many copies have you?

Mr. ESTES. I have enough for the committee and the reporter. My name is F. F. Estes, traffic manager, National Coal Association. I should like to explain that the National Coal Association is the Nation-wide organization of coal producers.

I first want to thank the committee for its courtesy in allowing us to appear and express our views on Senate Joint Resolution 147. Senator REED. Mr. Estes, that is what we are here for.

Mr. ESTES. I also want to say that we are very much pleased with Senator Reed's statement yesterday, and which he restated this morning, that the record would be held open for, I think, 3 months to see how things improve. We have every confidence that by November the operation will be so satisfactory that this bill can be shelved.

Senator REED. Nobody would be happier to shelve it than I would. Mr. ESTES. I am sure you would, Senator.

I should also like to explain before I start that I have in mind the Senator's remarks or statement that he did not want to hear very much about legislative rate making, and if that is in my statement I shall not dwell on it in view of the onus on it.

Senator REED. I am a vigorous opponent of legislative rate making. Mr. ESTES. I know you are.

The bituminous-coal industry has a vital interest in Senate Joint Resolution 147 because bituminous coal in normal times comprises almost one-third of the total tonnage handled by the railroads. Specifically, in 1941 it was 28.1 percent. Not only are we appreciative of the Herculean task that lies ahead for the railroads, and the accompanying necessity of prompt handling of cars, but as shippers of their largest loading single class of freight we have cooperated in every manner possible to load cars promptly and have them unloaded without delay, and have in cooperation with other shippers made what we feel sizable concessions in the demurrage rules. We have pledged our continued and increased cooperation along this line, and our promises will be kept. Our position on this proposed bill is twofold. First, while recognizing the sincerity of purpose of the author of the bill, we do not believe legislation of this character is necessary at the present time and we believe it would slow down rather than speed up the movement of railroad freight cars. Secondly, if the committee should decide to report favorably on this bill, we respectfully request that the handling of coal cars at mines be exempt from the bill's provisions in order that there may be no interruption in the present arrangement which has been in practice for a great number of years and which was worked out between the railroads and the coal producers after long deliberation and was then approved by the Interstate Commerce Commission.

Speaking to the first premise I have stated, the shippers of bituminous coal, in cooperation and corroboration with shippers of other commodities and classes of freight, have conferred on numerous occasions with officials of the Interstate Commerce Commission and

the Office of Defense Transportation on the question of making such amendments to the existing demurrage rules as in the opinion of all concerned would speed up the movement of all freight cars. As a result of those conferences, some practicable amendments have been made. For example, the $2.20 daily demurrage charge, which previously ran for a period of 4 days after the expiration of free time, has now been cut in half to 2 days. That is a sizable concession. As mentioned by previous witnesses, the average agreement rule has been changed so that two credits will offset one debit, instead of one credit against one debit, as heretofore. Furthermore, the rules bave been or will be changed, I believe effective July 10, so that after expiration of the free time Sundays and holidays will be included in the demurrage charges. Other amendments are in the formulative process, and it is our belief that the powers vested in the Interstate Commerce Commission and those now vested in the Office of Defense Transportation are sufficient to insure that such further appropriate and practicable amendments as necessary will be made.

Demurrage has never been viewed solely as a revenue producer for the railroads. It is primarily a penalty charge. Reasonable penalties in the form of demurrage charges have their appropriate place in normal peacetimes, but speaking frankly, and with the most respect, we feel that enactment of this legislation, superimposing upon industry, already befuddled, shackled, and fettered with ultracomplicated regulations, mandates, and instructions, these unheard-of extreme penalties for holding cars, in many cases unpreventable, would be unwise and unnecessary. It is legislative rate making, a principle that we have never favored. We would much prefer, even though unsuccessful as we are at times before them, to leave these matters in the hands of the agencies already set up by Congress, namely, the Interstate Commerce Commission and the new Office of Defense Transportation.

Speaking now to our second premise, practically all coal mines are located in places remote from large towns or railroad headquarters offices. To check each coal mine each day, or perhaps twice each day, would require thousands of employees. Competent and adequate labor is now short on the railroads as well as in the coal mines. There can be no guesswork in assessing demurrage charges. Over a long period of years and under every testing condition imaginable, the coal mines and the railroads worked out a penalty system to apply to cars held at the mines, which is drastic in character, easy of application, and productive of results. Long and tedious hearings and con-ferences before the Interstate Commerce Commission were held, as a result of which that body approved a system of coal-car-distribution. rules which has long been in practice and has worked efficiently. Senator REED. Those grew out of the assigned-car cases? Mr. ESTES. That is true.

Each coal mine is rated as to its ability to produce coal within a specified time; that is, a 7-hour day. It is rated after careful study and survey by the railroad, and the coal operator cooperated byfurnishing the data and information required of him. Let us take, forexample, a mine that is rated at 25 cars per day. The owner may have a standing order for that number of cars or he may order them daily.. If there is a 100-percent car supply of empties, then no problem what-ever is involved. If there is less than a full car supply, the cars are

prorated among the mines that need cars that day. Should the mine operator load only part of his allotment today, he is penalized for having those cars not loaded, including those that are partially loaded at closing time today, and those loaded, but not billed out, recharged against him tomorrow. This penalty is a severe one, and one that makes the shipper exert every effort to load and bill out every car each and every day. There is no doubt at all in my mind that it would cost the railroads more money to collect demurrage on cars at coal mines than they would receive in revenue, even if it were possible to check each mine at least once every day.

In times when cars are plentiful the mine sidings are usually filled, as this affords a convenient place to store the cars against the time when they will be needed. Enactment of this bill without excepting coal cars from its provisions would put the coal operator in a position where he could not afford to have any car on the mine siding unless that car was specifically ordered by him and for which a load of coal had previously been sold. Even then, labor conditions, accidents, or temporary shut-downs, over which he has no control, can penalize him by assessment of these exorbitant charges to the point of tremendous financial loss, and could put him entirely out of business. Strikes of a local nature which do not make the headlines, as do national strikes, seriously interfere with mine operation and loading of coal at the particular mine or mines involved. They are as unpredictable as the weather, and in most instances occur on such short notice that empty cars would be placed at the mines and remain there until the matters in controversy were ironed out.

I might mention there, Senators, that this present week we had some disagreement between the miners and the operators as to whether or not the miners were going to take a vacation period, which involved the payment of $20 a week; and the miners in some places were willing to work and make the extra money, and the others were unwilling to work but wanted to take their vacation and the $20, rather than make the money.

One proposal of the miners in certain fields was that they would work if they had returned to them certain fines that had been held up from their pay for certain illegal strikes, and that was ironed out satisfactorily with only 1 day down, namely, Monday.

Now, had these demurrage rules as proposed here been in effect, that would have cost the operators a considerable amount of money just for the Monday shut-down; and had they been down all week, as they might have been had they not come to terms that were satisfactory mutually to all concerned, then that would have run into a considerable amount of money.

Senator REED. If you had a strike on your hands you would not be charged with these cars set in while you were not operating under that condition, would you?

Mr. ESTES. I believe Chairman Aitchison yesterday referred to several cases that the Commission had handled involving demurrage due to strikes; and I am quite sure that that would have to be adjudicated by the Commission before it was definitely determined as to whether demurrage would be charged or not, as to whether the strike was lawful or whether the operator could have had his cars loaded and put out or not.