"*** We have stated that we would not prescribe alternative rates and minima in the absence of a showing of a general commercial necessity or desirability for such an adjustment." Stimson v. Akron C. & Y. Ry. Co. (262 I. C. C. 418, 423).

***The circumstances and conditions which influenced the movement were abnormal and of a transitory nature. * * *” Reconstruction Finance Corp. v. Akron, C. & Y. Ry. Co. (287 I. C. C. 353, 359, 382).

"***The Commission has stated that it will not ordinarily prescribe alternative rates and minima in the absence of a showing of general commercial need for such an adjustment. See Reconstruction Finance Corp. v. Akron, C. & Y. Ry. Co. (287 I. C. C. 353, 359), and proceedings there cited. No general commercial need for an alternative adjustment on cement is here indicated." United States v. Great Northern Ry. Co. (293 I. C. C. 341).

GENERAL SERVICES ADMINISTRATION,
Washington, D. C., May 1, 1956.

Re H. R. 525.

Hon. J. PERCY PRIEST,

Chairman, Committee on Interstate and Foreign Commerce,

House of Representatives, Washington, D. C.

DEAR MR. CHAIRMAN: The letter of February 28, 1956, from the former Administrator submitted GSA's comments on H. R. 525, a bill to amend section 22 of the Interstate Commerce Act, as amended, and for other purposes.

In that report, it was stated that GSA took no position on whether this bill should be enacted. A number of points for consideration were listed in the enclosure to the letter based on GSA's operational experience. Since the preparation of that report, additional review of these considerations and the other considerations developed by Transportation and Public Utilities Service, GSA, have pointed to the fact that the repeal of section 22 will adversely affect the operations of the Federal Government, as a shipper. Accordingly, it is desired to supplement our prior report to this extent.

In the event of hearings by your committee, GSA will desire to testify in opposition to the bill.

The Bureau of the Budget has advised that there is no objection to the submission of this report to your committee. Sincerely yours,

FRANKLIN G. FLOETE, Administrator.

GENERAL SERVICES ADMINISTRATION,

Washington, D. C., October 12, 1955.

Re H. R. 6141.

Hon. J. PERCY PRIEST,

Chairman, Committee on Interstate and Foreign Commerce,

House of Representatives, Washington, D. C.

DEAR CONGRESSMAN PRIEST: Your letter of May 11 requested the comments of GSA on H. R. 6141, a bill to amend the Interstate Commerce Act, as amended. This bill, as in the case of a companion and identical bill, S. 1920, which is now pending before the Senate Committee on Interstate and Foreign Commerce, carries out the recommendations of the Presidential Advisory Committee on Transport Policy and Organization, issued in April 1955. A review of the bill indicates that, if enacted, the recommendations of that Committee would be given effect.

A detailed analysis of H. R. 6141 is not submitted in view of the length and complexity of the revisions in existing law and the fact that the report of the Presidential Committee provides a full and comprehensive discussion.

GSA is charged with the responsibility of representation for the use of the executive agencies of the Federal Government with respect to transportation and traffic management matters under the Federal Property and Administrative Services Act of 1949, as amended (63 Stat. 377). GSA, therefore, represents the Government only from the viewpoint of a shipper. It took no part in the work of the Presidential Committee which was studying broad problems of transportation and transportation policy.

It appears H. R. 6141 admirably carries out the purposes of the Advisory Committee report. GSA therefore recommends that the Congress thoroughly

study and consider the proposed legislation to determine whether the national transportation system might be improved by its enactment. In the event of bearings on this bill, GSA would be glad to offer its veiews in the light of its operational experience as a shipper.

The Bureau of the Budget has advised that there is no objection to the submission of this report to your Committee.

Cordially yours,

EDMUND F. MANSURE, Administrator.

H. R. 6208

Mr. HYDE. This bill, to amend section 4 (1) of the Interstate Commerce Act, is sponsored by the Interstate Commerce Commission. Its justification is set forth in the Commission's letter to you of May 3, 1955 (Congressional Record, May 12, 1955, p. A3257).

The bill makes two primary changes in the present long and short haul provisions of the act. First, there would be removed from the present act the following quoted language:

The Commission shall not permit the establishment of any charge to or from the more distant point that is not reasonably compensatory for the services performed; * *

Second, carriers over circuitous routes would be given complete authority to meet the rates established over the direct route, subject only to the standards of lawfulness set forth in other sections of the act. This would eliminate the present requirements that any departures from the basic provisions of the section be authorized by the Commission. Whether the removal of these two present requirements would result in wasteful transportation is a matter of conjecture.

Since this change appears to make the different modes of transport competitive so far as section 4 is concerned, it is accordingly recommended that the bill be enacted.

This report is being confirmed in writing. The Bureau of the Budget has no objection to its submission.

Mr. HARRIS. It may be received for the record.
Mr. HYDE. Thank you, sir.

(The information referred to follows:)

GENERAL SERVICES ADMINISTRATION,
Washington, D. C., June 14, 1956.

Re H. R. 6208, amendments to section 4 (1) of the Interstate Commerce Act.
Hon. J. PERCY PRIEST,

Chairman, Committee on Interstate and Foreign Commerce,

House of Representatives, Washington D. C.

DEAR MR. CHAIRMAN: In accordance with our letter of May 17, 1955, there is submitted herewith report of GSA on H. R. 6208, a bill to amend paragraph (1) of section 4 of the Interstate Commerce Act, as amended.

The bill is sponsored by the Interstate Commerce Commission and its justification is set forth in the Commission's letter to you of May 3, 1955 (Congressional Record, May 12, 1955, p. A3257).

The bill makes two primary changes in the present "long- and short-haul provisions of the present act. First, there would be removed from the present act the following quoted language:

* The Commission shall not permit the establishment of any charge to or from the more distant point that is not reasonably compensatory for the service performed:

Second, carriers over circuitous routes would be given complete authority to meet the rates established over the direct route, subject only to the standards of lawfulness set forth in other sections of the act. This would eliminate the present requirement that any departures from the basic provisions of the section

be authorized by the Commission. Whether the removal of these two present requirements would result in wasteful transportation, is a matter of conjecture. The Commission supports these changes on the grounds that experience has shown that the administration of this section has proved to be excessively burdensome.

GSA's interest in this legislation stems from its responsibilities under section 201 (a) of the Federal Property and Administrative Services Act of 1949, as amended (63 Stat. 383), under which it operates as traffic manager for activities of the executive agencies of the Federal Government as shippers. As such, GSA perceives no objection to the proposed legislation. Further, if administration of the act by the Commission will be simplified, this is unquestionably a desirable objective. It is accordingly recommended that the bill be enacted.

The Bureau of the Budget has advised that there is no objection to the submission of this report to your committee.

Sincerely yours,

FRANKLIN G. FLOETE, Administrator.

H. R. 6141

Mr. HYDE. On October 12, 1955, GSA's report on H. R. 6141 was submitted. It was there pointed out that GSA took no part in the work of the Presidential Committee on Transport Policy and Organization, whose report was issued in April 1955, but that bill, H. R. 6141, appeared to carry out the objectives of that report. Our desire to offer our operational experience to the committee was indicated.

Aside from one general observation, this report will deal solely with the problems which can be anticipated by the Government as a shipper under the portions of the bill which would supplant the present section 22 of the Interstate Commerce Act as it related to the United States, State, or municipal governments. The proposed changes are set forth in sections 8 and 9 of the bill.

The experience of GSA has confirmed the existence of the present forces of competition found by the President's Advisory Committee. This competition exists not only between the modes of transportation but within each mode of transportation.

So long as present competitive conditions continue to exist, it usually will be able to secure on its traffic rates which are considered to be just and reasonable by accepted standards. Of course, in the event of an emergency, such as World War II or the Korean situation, different problems would arise.

Turning now to provisions of the present bill as they relate to Government traffic, section 9, paragraph (a) deletes from section 22 of the Interstate Commerce Act (49 U. S. C. 22) the reference to the "United States, State, or municipal governments," in two places where it now appears so that neither the transportation of property nor passengers for the Federal Government would be under that section.

Paragraph (b) of the same section is a savings clause as to reduced rate services rendered prior to the effective date of the bill.

Section 8 of the bill rewrites the present section 15a of the act. Paragraph (5) of that new section is pertinent to Government transportation. The section is set forth below in full but for convenience has been separated into parts which are discussed in separately numbered paragraphs:

1. (5) The establishment, maintenance, publication, and application of rates, fares, charges, and rules and regulations of special application for transportation services to the United States, State, and municipal governments by carriers subject to this act is hereby authorized. Rates, fares, charges, and rules and regulations so limited shall be subject to the tariff filing and publication requirements of the act:

While this provision is in terms of authorization only and supposedly relates to rates of "special application," it will be noted from paragraph 5 below that all transportation services rendered for the Federal Government are made subject to this paragraph. Such rates would need to be neither "free" nor "reduced" and could apparently exceed the commercial published tariff rates which now operate as a ceiling.

2. Provided, however, That (a) such rates, fares, charges and regulations may be filed on short notice or made retroactive where the circumstances so warrant ***.

This proviso, while it does not specify who determines the right to file on short notice or as to retroactivity, presumably places this discretion in the hands of the carriers.

Under the present section 6 (3) of the act, short-notice permission must be granted by the Commission. As to retroactivity, the general rules of practice of the Commission provide a special docket procedure in rule 25 (e) under which retroactivity of up to 2 years is permitted. As is true of the new procedure proposed by this section of the bill, the willingness of the carrier to make retroactive payments is also an essential requirement of the special docket procedure. Under the latter procedure, however, an order of the Commision is required, while it is assumed that under the provisions of the bill such an order would not be required.

3. Provided, however, That ** (b) the provisions of the act with respect to filing, publication and posting of tariff schedules and contracts may be waived where the security of the United States so requires upon the filing of an appropriate statement in writing with the Commission by the head of the Government agency concerned.

Clarification of the meaning of "security" as here used would be helpful.

For example, the entire program of transportation and traffic management of the Department of Defense, regardless of the commodity or nature of the movement, has been declared to be affected by "national security" under the Federal Property and Administrative Services Act of 1949, as amended. See notice of exemption October 2, 1954 (19 F. R. 6611).

Likewise, GSA programs with strategic and critical materials are conducted in the interest of national security. It would, therefore, be helpful to know if it were intended that this exemption provision may be declared on an agencywide basis, by programs or only in the narrow concept of specific movements involving secrecy.

4. Such rates, fares, charges, and rules and regulations shall not be subject to suspension or to the provisions of section 4 but shall be subject to all other applicable provisions of the act.

The exclusion of section 4 to "special application" rates on Government traffic would presumably authorize carriers to charge higher rates for shorter distances than are charged to commercial shippers for longer distances.

Section 4 violations are a specific form of discrimination or prejudice, reviewable under section 2 or 3 of the present act.

Since the special application rates would remain subject to sections 2 and 3, it is not clear whether violations of the principles of section 4 could be attacked under those sections but it is presumed that it is

intended to exclude such rates from review under sections 2 and 3 as well.

Not being subject to suspension either at the request of the Government as the affected shipper, or by other carriers or shippers, it is assumed that rates established by the carriers become subject to complaint by the Government in proceedings before the Commission. Such procedures are generally of considerable duration.

The predominance of Government traffic now moves on regular published tariff rates. This new provision, however, put all Government traffic in the "special" category. The purpose of this is not apparent. It was not contemplated by the report of the Presidential Advisory Committee on Transportation Policy and Organization.

Section III of that report dealt only with "special" Government rates and the origin of this added provision is not known.

This classification of all Government traffic as "special" would, no doubt, result in the Government, as a shipper, receiving less favorable rate treatment than commercial shippers.

In our report on H. R. 525, we have pointed out instances in which the Interstate Commerce Commission has denied the Government's requests on the ground there is no "commercial necessity." This classification of all Government traffic as "special" would lend support to that concept.

Bearing in mind that the published tariffs would no longer operate as ceilings on what could be charged the Government under this proposal, it follows that there will be instances where the Government may be faced with paying higher than commercial rates. But the "special" category of its traffic would probably preclude its obtaining relief from the Interstate Commerce Commission.

5. Transportation services rendered by carriers subject to the act for such governments other than under such rates, fares, charges, and rules and regulations of special application shall be subject to all the provisions hereof : Provided. however, That the provisions of the act with respect to the filing, publication, and posting of tariff schedules and contracts may be waived where the security of the United States so requires in the manner provided herein with respect to waiver for those of "special application."

As already noted, while the section is basically one of authorization only, this sentence and the proviso mandatorily places the rates on all transportation services rendered for the United States, state or municipal governments in the "special" category. This means that all rates on Government traffic will be governed solely under section 15a (5) rather than only the relatively few nontariff rates under the present section 22.

Therefore, the suspension power and section 4 provisions are eliminated on all Government traffic.

In view of the many public criticisms of section 22 rates which the Government receives from carriers, it will be helpful to say a word about the levels of these rates.

There seems to be a widespread impression that because such rates are "reduced," they are unprofitable or below out-of-pocket costs.

I might add in that connection that there is a school of thought in this country which thinks that the Government is getting something that industry is not getting and I would like to discuss that in just a few moments.

I will say this at this point: