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Mr. DUNLEAVY. Yes, sir.
Mr. HALE. Is that under section 229
Mr. DUNLEAVY. Yes, sir.
Mr. HALE. That is all.
Mr. HARRIS. Any further questions?
Well, gentlemen, thank you very much.
Does that conclude all you have to say at this time?

Mr. Rothschild. Mr. Chairman and gentlemen, this does conclude all that we had to say, and we have said it through our statements and through subsequent answers to questions. At this time we would, however, as Mr. Weeks indicated in his opening statement, like to have the privilege of either adding to the record or answering some points at a later time, if your schedule will permit that.

Mr. HARRIS. Well, ordinarily we do ask the agencies involved in these matters to hold themselves available for the committee on any matter in which we feel it might be helpful. So you will undoubtedly be called upon for further information later on down the road. And at that time, of course, you may complete the record as you desire.

Mr. Hinshaw wanted to ask you another question, Mr. Smith.

Mr. HINSHAW. I just wanted to ask Mr. Smith whether the Government-furnished equipment on contracts for defense materials was shipped under section 22 of the determination of rates, or whether it was shipped under commodity rates.

Mr. SMITH. I do not believe I got the question.

Mr. HINSHAW. A great deal of the material that is supplied to the Government under defense contracts requires that certain portions of the material shall be Government furnished. In other words, you acquire engines for airplanes from Pratt & Whitney, from the General Electric Co., the Westinghouse Co., and the General Motors subsidiary, whatever its name is. Now, do you pay commodity rates on those shipments, or do you pay section 22 rates?

Mr. Smith. I think it would be a combination of both. A good deal of that traffic would move on Government bills of lading, and there is a possibility that if there is a commodity rate established, which is considered to be reasonable, that would be paid; on the other hand, if it were felt there was a class rate which was too high, unreasonably high, it might be a reduced rate provided to us through a section 22 tender. It could be a combination of both.

Mr. HINSHAW. Why would it not be a commodity rate!

Mr. SMITH. It would not be a commodity rate if there were no commodity rate there, or if the commodity rate were considered to be unreasonably high.

Mr. HINSHAW. Who is going to consider it unreasonably high?

Mr. SMITH. The Department of Defense, together with the carriers involved.

Mr. HINSHAW. That is what I was talking about a moment or two ago, somebody else substituting its judgment for the Interstate Commerce Commission, which is appointed to represent the Congress for just that very thing.

Mr. Smith. I think that is one of the advantages of this proposed modification in the bill. Because then the Interstate Commerce Commission can be the judge, where they cannot today.


Mr. HINSHAW. The limitations upon the Interstate Commerce Commission under this proposed act are quite unique and will bear a great deal of looking at. That is all.

Mr. HARRIS. Thank you very much. And we want to thank each of you, and the Secretary, too, who had to leave.

We had expected to get to Mr. Arpaia of the Interstate Commerce Commission this afternon, but obviously the session of the committee has gone along with the witnesses from the Department of Commerce and the Defense Establishment to this point, and since the House is considering, under the 5-minute rule, the bill before it, we cannot proceed further this afternoon. Mr. Arpaia will be here in the morning at 10 o'clock. He will be the first witness.

The committee will adjourn until 10 o'clock in the morning in this room,

(Whereupon, at 4 p. m., the hearing was adjourned, to reconvene at 10 a. m. Thursday, April 26, 1956.)

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Washington, D.C. The subcommittee met, pursuant to adjournment, at 10 a. m., in the caucus rom, Old House Office Building, Hon. Oren Harris (chairman of the subcommittee) presiding.

Mr. HARRIS. The committee will please come to order. Permit the Chair to say that it might appear that we are getting along a little slow with this highly important matter, but it is a subject that requires a great deal of consideration and thought. In view of this, I wanted to say that the committee is very appreciative of the fine attendance that we have had and the order that has been maintained in this room. I am sure that our guests will recognize the importance of it in the future as you have in the last couple of days, but I did want to say, for the information of each one of you, we are very grateful for the very splendid cooperation that we have received thus far during the course of the proceedings.

We recall, of course, that we have the situation of the House being called at 11 oclock this morning. It is anticipated that shortly after the House meets there will be a call of the House which will necessitate us having to recess at that time.

In the meantime, we will proceed and complete just as much of the hearings as we can get to this morning. We have with us this morning Mr. Arpaia, Chairman of the Interstate Commerce Commission.

Mr. Arpaia, we recognize that you have stood by for the last full day. We realize, of course, too, that you and your associates have plently of work to do in your own bailiwick down there. We are sorry that you have had to stand by and wait until we could reach you. Nevertheless, we know what this means to the transportation system of our country and what you mean to it, as well as the other members of the Commission.

We realize the position of the Commission from the report that has been filed with the committee.

It was first thought that the Commission would not make a statement until the close of or near the end of the proceedings. However, because of the involvements in the highly technical phases of this entire program, for the record and for the information and for the benefit of the committee, as well as various people interested in this problem throughout the country, we thought that it would be informa

tive and appropriate to have you make a presentation at this time in behalf of the Commission and then be subject to any questions that any member might want to ask at that time.


STATE COMMERCE COMMISSION, WASHINGTON, D. C. Mr. ARPAIA. Mr. Chairman, I might say, Mr. Chairman and members of the committee, that we have present here today some of the Commissioners. Would you like for them to be presented?

Mr. Harris. I think it would be helpful to us and probably to our guests attending if, for the record, we may have you present them to us.

Mr. ARPAIA. Well, we have Commissioner Freas, and I will ask him to come up here, please.

I would like to present Commissioner Minor and Commissioner Walrath.

It may be as the hearings proceed others may arrive and if they do I will present them.

Mr. HARRIS. Very well.

Mr. ARPAIA. We also have present people of our staff, and I would also like to state that we have Director Mullen, of our Bureau of Formal Cases.

We have Director Cox of our Bureau of Rates, Tariffs, and Informal Cases.

We have Mr. Murray of the General Counsel's Office. We also have our General Counsel, Mr. Ginnane, and I would like to have him come up here.

We have Mr. Spicer, legislative counsel; Mr. Emken, Director, Bureau of Accounts, Cost Finding, and Valuation; Mr. Jelsma, Director of the Bureau of Transport Economics and Statistics; Mr. Koch, who is Chief of the Reviewing Section, Formal Cases.

Mr. HARRIS. We are glad to welcome them.
Mr. ARPAIA. I think I have covered all of them.

Mr. HARRIS. Let me say to you, Mr. Commissioner, and also your associates in the great work that you are doing down there, we are glad to have all of you with us here today and certainly your appearance here indicates the interest you have in the subject.

Mr. ARPAIA. My name is Anthony F. Arpaia. I am Chairman of the Interstate Commerce Commission and Chairman of its Committee on Legislation. I have served in these capacities since January 1, 1956, and have been a member of the Commission since July 11, 1952.

I am appearing today to testify in behalf of the Commission with respect to bill H. R. 6141 and the six other bills which the subcommittee has under consideration, and to answer as best I can any questions which the subcommittee members may wish to ask with respect thereto. Inasmuch as the Commission or its Legislative Committee has commented in some detail on these proposed measures by letters addressed to the chairman of the full committee at his request, my statement will be brief. I would like to ask at this time that these letters be introduced into the record.

The letters to which I refer are as follows:

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