You ask for a rate adjustment?

Mr. SMULL. That is correct.

Mr. HINSHAW. Yes.

Well, now that is what we are trying to get rid of is the rate of adjustment under section 22.

Mr. SMULL. But it is only section 22 that will permit the speed of action to get the rate in effect.

Mr. HINSHAW. You mean the adjustment?

Mr. SMULL. The adjusted rate.

Mr. HINSHAW. Exactly so, and that is the thing I want to knock out.

Mr. SMULL. If you do knock it out, then our traffic will move at the excessively high class rates.

Mr. HINSHAW. Oh, no, because you will file a tariff, you can file a commodity rate, and after 30 days it becomes effective fully and, in the meantime, it can be challenged.

Mr. SMULL. Except that our traffic will have moved by the time that goes into effect.

Mr. HINSHAW. So what?

Mr. SMULL. So then the traffic has moved and it has moved on the existing high class rate because the lower commodity rate has not been in effect.

Therefore, we have to go after reparations, after the adjustment, which is extremely expensive. It will cause the Interstate Commerce Commission a terrific workload. They will have to hire more people to perform this work, we will have to hire more people, and so will the carriers.

Mr. HINSHAW. I would like to ask the Interstate Commerce Commission what the procedure would be in connection with something of that sort.

Mr. MURRAY. My name is James A. Murray and I am employed by the Interstate Commerce Commission.

Mr. HINSHAW. Will you answer that question?

Mr. MURRAY. I am not sure of it.

Mr. HARRIS. Read the question, please.

(The question was read by the reporter.)

Mr. MURRAY. If the carrier admits that the rates were unreasonable, it may file with the Commission a special application, and if the Commission admits that the rates were unreasonable, authorize a refund by the carrier in a summary proceeding.

If the carrier contests the claim and is unwilling to concede that the applicable rate was unreasonable or unlawful, there would have to be a reparation claim filed and there might be a hearing and litigation. Mr. HINSHAW. Then the gentleman is correct if the carrier protests?

Mr. MURRAY. Yes.

Mr. HINSHAW. The gentleman admitted that they had at least 30 days' notice in which to file a rate on a movement.

Mr. SMULL. You mean we have advance notice that there is traffic to move?

Mr. HINSHAW. At least 30 days, I believe you said.

Mr. SMULL. No; if I said that I would like to correct the record. There are times when we have as little as 1 day. It is exceptional when we have as much as 30 days.

Mr. HINSHAW. As little as 1 day?

Mr. SMULL. That is correct.

Mr. HINSHAW. Describe to me such a situation.

Mr. SMULL. I am not defending a position now, I am fighting just as hard as you are to straighten this condition out.

A vessel will come into the port of Mobile or any other port and it will have ore or pig lead, whatever it might have for the stockpile program. We do not have information that the ship is coming in and that the traffic is to move to a point where there existed nothing but

class rates.

We have had 1 day notice frequently. There are people in this room that can verify that to perform our adjustments under such conditions were must have section 22. We can't do it otherwise.

If we did not have section 22, traffic would move at the class rates and we would have to go after reparations.

Mr. HINSHAW. If the carrier did not agree with the rate?

Mr. SMULL. There is a joint agreement. We ask for a level rate which we consider to be equitable, and they can agree or disagree. Mr. HINSHAW. If they disagree with the rate, then you have to go after reparations?

Mr. SMULL. That is correct.

Mr. HINSHAW. That is right.

But, if they agree with the rate, well, of course they would agree with it because they would expect a fight if they did not, would they not?

Mr. SMULL. I would say there are many situations where they do not agree, where we have to arrive at a compromise. We want 85 cents and we wind up having 95 cents.

Mr. HINSHAW. I see no objection to your entering a reparations claim the same as anybody else.

Mr. SMULL. I certainly agree with you, except for the expense.
Mr. HINSHAW. You ask for preferential treatment?

Mr. SMULL. Our conditions are different than that of the commercial shipper.

Mr. HINSHAW. I just cannot understand. A lot of commercial shippers must be in the same kind of box if somebody is going to ship ore to them and not let them know it is shipped until it arrives at some port. I never heard of such a condition.

Actually, you have already purchased the ore abroad. Somebody has purchased it, presumably a Government agency and probably the GSA. Now, for goodness sake, when the ore was purchased abroad, that might be 2, 3, 4, 6, 8, 10 months in advance of the time of its receipt and that is plenty of time.

Mr. SMULL. I am not defending the condition; I am stating it.
Mr. HYDE. I can give you an illustration.

We had 20 thousand tons of ore, chrome, over in Turkey. They were undertaking to get it moved. They could not get a ship in there, could not even get a foreign-flag ship in there, Greece or any place, and it was over there about 30 days. We did not know when it was coming in. All we know is that we had some ore coming in and we do not know when or what port it was coming in. It was a North Atlantic port.

It finally got here but we had about 3 or 4 days' notice that it was ready to come in at one of the North Atlantic ports.

Mr. HINSHAW. But you knew at the time that you ordered it that it was due to come in?

Mr. HYDE. We did not know when it was coming in.

Mr. HINSHAW. I did not say that. You knew it was coming in. Mr. HYDE. We know that there is a total tonnage of all these 77 materials. They do not all come in in 1 month. Sometimes they come in, depending on the conditions in these foreign countries. We do not know the ports many times.

Mr. HINSHAW. Do you order them to deliver at a certain port?

Mr. HYDE. Mr. Congressman and members of the committee, we merely purchase the transportation. We do not draw the contract up with reference to the amount of the tonnage. We merely advise these various agencies of Government concerning the rates, whether it is a tramp or berth line, and we try of course to equitably distribute the number of ports where the material is coming into this country, but we do not control the shipping date, whether it leaves Turkey, Brazil, Madagascar, or the Orient, or where it might come from.

Mr. HINSHAW. Well, that seems to me, just offhand, Mr. Hyde, to be rather an unusual type of purchasing. I never heard of that being a Government practice but maybe it has crept in where you are willing to take a shipment at any port in the United States that is made by purchase from some foreign miner or foreign government, or whatever, and then transport it from any port in the United States to the stockpile.

Mr. HYDE. We have a number of stockpiling points in this country. Mr. HINSHAW. Yes.

Mr. HYDE. We have them in different areas. A great many are in the Alleghenies, some in the South, some down in Arkansas or Missouri, for instance. We do not know exactly the destination where we have 3 or 4 different stockpiles, say, manganese for instance, or chrome, or bauxite. It might be going up to Mexico, Mo., it might be going down into Arkansas or down into Texas or Alabama or some other place. We do not know exactly where it is headed for.

Sometimes it is coming in at a southern gulf port. Sometimes they are coming into the North Atlantic port. Sometimes they are coming in on the Pacific coast. But we do not have exact knowledge of the date they are coming nor do we have exact knowledge of the point they are coming to until just a few days beforehand.

Mr. HINSHAW. Well, I am pretty sure that no commercial business could exist doing business that way.

Mr. HYDE. The Government, of course, does do business, I have found in my short experience in Government, a little differently.

Mr. HINSHAW. I would say that one of the reasons you were sought after so hard for a position in Government was to correct just such things.

Mr. HYDE. Now you are being kind and you might be indulging in superlatives, Mr. Congressman. I assure you that I am bringing just a limited knowledge to the Government here, but I am doing the best I can as a country lawyer.

Mr. HINSHAW. You positively shock me with the statement of such loose practices on the part of the Government.

Mr. HYDE. Well, for instance, Mr. Hinshaw, today it is very, very difficult to get, to have available, ships either from our own registry or from the other countries of the world. Shipping costs have gone up on the high seas and we do not know whether we are afoot or horseback or whether industry will be able to get a ship or whether we will be able to get a ship to haul some of these strategic or critical materials.

Within the last 60 days, Russia bought 160 million bushels of wheat up in Canada and immediately they raised $5 a ton for hauling that grain and they siphoned off 106 ships to haul that grain. Then the shippers come into our office and say, "We have some material we want to ship, some grain over to Korea," or some other country, Indonesia, "I have some rice to go to Indonesia; I want to bring back some rubber. Where can I get a ship?"

I said, "It may be necessary with the constantly increasing tonnage to obtain ships from the Maritime Commission-permit their release to industry."

There are a lot of them there, but I do not control that.

Mr. HINSHAW. I can introduce you with great pleasure to some American shipping people who would be delighted to talk with you, I am sure. They are around talking to Congress seeking support for their actions and movements of their ships, and they have a great many upriver with rust hanging on their sides waiting for steam to come up the next time.

Mr. HYDE. I can also say to you that within the last 30 days I assisted Senator Malone in getting some ships on the west coast to haul some iron ore from the Oakland and San Francisco area when he could not get any ships. I helped him get them out of the Maritime Commission to move ore over to Japan, because he could not get ships. Mr. HINSHAW. Well, this is all news to me. I do not want to carry this thing on any further, Mr. Chairman. I know you are scheduled to go to the Appropriations Committee now.

Mr. HYDE. If you will excuse me, I do thank you, Mr. Chairman and members of the committee.

Mr. HALE. May I ask one question?

Mr. HARRIS. Yes.

Mr. HALE. Is it not a fact that these foreign shipping pools control the movement of ships and select the ports of entry in this country? Several years ago the Maine delegation had a long series of sessions with your predecessors about rubber ships out of Indonesia, and at one time it was impossible, your people had no control at all over where the ships would go?

Mr. HYDE. I am very familiar, Congressman Hale, with that problem.

I met in the last few days with a gentleman by the name of Leavitt, connected with the port authority up in Maine. I have met with the port authorities of Boston and several other ports. I am trying desperately, as the Commissioner of Transportation, to effect a more equitable distribution of outgoing as well as incoming traffic through the various ports of this country.

Specific attention is now being given to the Portland port up there in connection with the rubber program. There are several factors which do influence the selection of a port.

One is the location of the stockpile.

Two is the method of purchase, that is to say, the Rubber Trade Association, we do not get title until the rubber gets into this country. The Rubber Trade Association, therefore, by contact with us, unless we can influence them in some manner to bring rubber through some of these other ports, we have very little control over it.

We are undertaking desperately to see to it that other ports get a fair share of Government traffic, including rubber. Believe me, we are trying.

Mr. HALE. You are aware that the port of Portland wants rubber shipments in the worst way?

Mr. HYDE. I know that.

The other day I was able to cause some railroad passenger cars to go out through the port of Portland and some up in the New England area, I believe in Boston.

We believe in an equitable distribution. I do not mean 10 years from now, I mean now. But I am just one man in the Government trying desperately.

Mr. HALE. We think that our port can be used very advantageously by the Government, and I think you agree?

Mr. HYDE. Yes, sir; I certainly do, sir.

Mr. HARRIS. Thank you very much, Mr. Hyde.

You may proceed to your other meeting.

Mr. HYDE. Thank you, gentlemen.

Do you want my assistants to stay with you?

Mr. HARRIS. There may be some other questions.

Mr. HYDE. All right.

First of all, I will leave Mr. Denniston here. I will tell you who

he is.

He is the chief trial lawyer for GSA and has spent his adult life in the service of the Government as a lawyer with the Interstate Commerce Commission, in the Defense Department, and with GSA and I think understands our problem fully.

This is Mr. Mullikin, an Irishman from Maryland, and he also has been in industry and in Government for a number of years and I will vouch for his intellectual capacity and his integrity.

This is Mr. Peters, I forgot him, he is an expert technician down there and comes from Georgia.

Mr. HARRIS. I am not sure there will be many more questions.

Mr. Dolliver?

Mr. DOLLIVER. No questions.
Mr. HARRIS. Mr. Dollinger?
Mr. DOLLINGER. No questions.

Mr. HARRIS. Mr. Hinshaw?

Mr. HINSHAW. You have other products that you ship around besides ore, I take it?

Mr. DENNISTON. Yes, sir.

Mr. HINSHAW. You have products that are shipped purely interstate, do you not?

Mr. DENNISTON. Yes, sir.

Mr. HINSHAW. What is the proportion of the volume of purely interstate shipments to those which arrive at ports for shipment interstate?

Mr. DENNISTON. I do not know that that information is available.