The Department of Defense is interested in the effect such legislation would have on the movement and cost of military traffic, and upon the effect it might have on the health of a national transportation system adequate to meet the needs of national defense. The second proviso of the bill permits carriers operating over circuitous routes to meet charges of carriers operating over more direct routes to or from competitive points, subject to standards of lawfulness appearing elsewhere in parts I and III, without approval from the Interstate Commerce Commission for departure from the long-and-short-haul clause. While permitting lower rates to more distant points, this proviso will, conversely, permit higher rates to intermediate points than would now be permissible without specific Commission approval. The increase of rates to points lying inland from water-andrail competitive seaboard points, as well as those intermediate to the many points which are competitive between rail and motor, would affect traffic to and from many military installations. The extent to which noncompetitive rates to intermediate points might be increased is conjectural and would depend largely on the ratemaking policies of carriers concerned. Similarly, there may be adverse effects on military traffic caused by the exemption from the "aggregate of intermediates" clause as contained in the second proviso of the bill. It is reasonable to assume that this possible adverse effect would be sufficiently limited by other provisions of the Interstate Commerce Act, by the desire of carriers to provide reasonable rates to the United States Government, and by their ability to tender such rates either in tariffs or under section 22 of the act. The speculative effect on military costs does not appear to weigh heavy enough, against the considerations which are understood to have prompted introduction of H. R. 6208. Accordingly, the Department of the Army, on behalf of the Department of Defense, offers no objection to the enactment of H. R. 6208. The fiscal effects of the bill cannot be estimated. This report has been coordinated within the Department of Defense in accordance with procedures prescribed by the Secretary of Defense. The Bureau of the Budget advises that there is no objection to the submission of this report for the consideration of Congress. Chairman, Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D. C. MY DEAR MR. CHAIRMAN: This is in reply to your letter of May 16, 1955, requesting the views of this office with respect to H. R. 6208, a bill to amend paragraph (1) of section 4 of the Interstate Commerce Act, as amended. The Bureau of the Budget would have no objection to enactment of H. R. 6208. Sincerely yours, PERCY RAPPAPORT, Assistant Director. Hon. J. PERCY PRIEST, EXECUTIVE OFFICE OF THE PRESIDENT, Chairman, Committee on Interstate and Foreign Commerce, MY DEAR MR. CHAIRMAN: This is in reply to your letter of February 10, 1956, requesting the views of this office with respect to H. R. 9177, a bill to amend section 405 (a), part IV, of the Interstate Commerce Act. The Chairman of the Interstate Commerce Commission and the Secretary of the Department of Commerce in the reports they are making to your committee on this bill, are recommending against its enactment for the reasons set out therein. The Bureau of the Budget concurs with the views contained in these reports and recommends against enactment. Sincerely yours, PERCY RAPPAPORT, Assistant Director. THE SECRETARY OF COMMERCE, Hon. J. PERCY PRIEST, Chairman, Committee on Interstate and Foreign Commerce, DEAR MR. CHAIRMAN: This letter is in reply to your request of February 10, 1956, for the views of this Department with respect to H. R. 9177, a bill to amend section 405 (a), part IV, of the Interstate Commerce Act. H. R. 9177 would amend section 405 (a), part IV, of the Interstate Commerce Act by adding a new proviso to the effect that nothing in part IV shall be construed as requiring any freight forwarder to publish tariffs stating rates or charges to or from points or places at which the freight forwarder has no agents. Section 405 (a) provides for the filing, printing, posting, and notice of freightforwarder rates and charges and classifications, rules, regulations, and practices with respect thereto. This Department opposes enactment of this legislation, but would defer to the views of the Interstate Commerce Commission should the Commission be of the opinion that the public interest would be better served by its enactment. This bill apparently is intended to clarify the act with respect to the filing of rates by so-called point-to-point freight forwarders. These forwarders, of which there are relatively few, publish rates only between specified assembly and distribution points even though their operating authorities extend over a much wider territory. Such a forwarder accepting traffic to a point to which he publishes no rate merely offers to ship the traffic beyond a rated point via other carriers acting as the shipper's agent and according to the shipper's instructions. The more usual custom is for freight forwarders to publish particular rates to and from points within the territories prescribed by their operating authorities at which they have substantial traffic. To cover other points within their territories, they include in their tariffs general provisions stating that all unnamed points within a broad area, such as a State, shall take a specified rate. These rates are generall at a higher level than rates for particular points in order to protect the forwarders' revenues to all points in the described broad areas. However, should any substantial movement develop at any point, that traffic is usually given a more attractive rate which is published with particularity. In any even under the usual custom, the freight forwarder has a published rate for every point he is authorized to serve and the shipper has or can obtain knowledge thereof prior to any movement. This is not true with respect to the tariffs published by the point-to-point forwarders. This Department would oppose the enactment of H. R. 9177 because in our opinion freight forwarders, as common carriers, should be required to publish and have available for shippers a known rate for any movement within the territory of its operating authority. However, the Department would defer to the views of the Interstate Commerce Commission as the agency charged with the administration of tariff publication should the Commission be of the opinion that the public interest would be better served by this amendment. We have been advised by the Bureau of the Budget that it would interpose no objection to the submission of this report to your committee. Sincerely yours, SINCLAIR WEEKS, Secretary of Commerce EXECUTIVE OFFICE OF THE PRESIDENT, Hon. J. PERCY PRIEST, BUREAU OF THE BUDGET, Washington, D. C., August 16, 1956. Chairman, Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D. C. MY DEAR MR. CHAIRMAN: This is in reply to your letter requesting the views of this office with respect to H. R. 9772, a bill to amend section 410 of the Interstate Commerce Act, as amended, to change the requirements for obtaining a freight forwarder permit. The bill would delete from the Interstate Commerce Act subsection (d) of section 410 which provides that no person shall be denied a freight forwarder permit "solely on the ground that such service will be in competition with the services *** performed by any other freight forwarder or freight forwarders." The bill would tend to restrict entry into freight forwarding. The Secretary of the Department of Commerce in the report he is making to your committee on this bill recommends against enactment for the reasons set out therein. The Deputy Attorney General in the report he is making to the Senate Interstate and Foreign Commerce Committee on S. 3365, an identical bill, does not favor enactment as the bill would lessen competition. In light of these views, the Bureau of the Budget is unable to recommend enactment of H. R. 9772. Sincerely yours, PERCY RAPPAPORT, Assistant Director. Mr. HARRIS. It is the desire of the committee to provide opportunity for everyone who wishes to be heard on this legislation to be heard. The list of witnesses already indicating their wish to speak is a very long one, and to cover them all will take a great deal of time. Without in any way wishing to cut anyone short, permit the Chair to say that I express the hope that the witnesses will feel free to file their statements for the record, or to summarize their proposed testimony, rather than reading it all. I might say that in one request that I had from a group requesting an opportunity to be heard, it was stated that several hours would be required. That is just one expression of the very many that we have indicating the interest in this program. Now, such statements may be filed and a summarization will be permitted where this will do justice to what they have to say. This seems to us most appropriate when the testimony is somewhat repetitious of what already may have been offered. It is contemplated that these hearings will require several weeksat least 3 weeks-and some feel much longer. It may be that we will be unable to continue the hearings to a conclusion without an interruption, because of other work of the committee, and particularly because of executive sessions of the full committee which our chairman has already scheduled during the month of May. We do, however, feel that this matter should be concluded as expeditiously as possible. We feel that this is a most important matter before the Congress, because it has to do with our determination of a sound transportation policy for our country; a policy that will permit the transport industries to serve the great American public. We fully realize there are many far-reaching proposals involved in this report and indicated in this legislation. We fully realize that it is a highly technical subject. We know, therefore, that this will require a great deal of effort on the part of this committee, and I wish to say that the entire membership of this committee realizes its importance. Even though we have a busy schedule, it will be the desire and the feeling of this committee that we wish to get as much out of the hearings as we can and understand the proposals as fully as possible, in order that we may do justice to the subject. Mr. Weeks, Secretary of Commerce, and Chairman of the Presidential Advisory Committee on Transport Policy and Organization, which drafted the legislation which is being considered, will be our first witness. Mr. Secretary, we are pleased to have you back with us today. We, of course, recall that you came before this committee last September, and gave us an explanation of the Cabinet Committee report. At that time we announced, as you will recall, that during this session of this Congress this committee would hold hearings on the proposed bills themselves. We are glad to have you to start the discussion on the legislation today. I note that you are accompanied by the Under Secretary for Transportation, Mr. Louis S. Rothschild, as well as by your General Counsel, Mr. Philip A. Ray, and by the Director of Transportation of the Department of Commerce, Mr. Earl B. Smith. STATEMENT OF HON. SINCLAIR WEEKS, SECRETARY OF COMMERCE, WASHINGTON, D. C. Secretary WEEKS. Thank you, Mr. Chairman and members of the committee. I am delighted to be here to open the discussion on these bills, H. R. 6141 and H. R. 6142. This legislation was drafted by the Department of Commerce to implement the recommendations of the Presidential Advisory Committee on Transport Policy and Organization of which I had the honor to be Chairman. The report, entitled "Revision of Federal Transportation Policy," was transmitted to the President on April 18, 1955. H. R. 6141 was introduced by the distinguished chairman of this committee, the Honorable J. Percy Priest, by request on May 10, 1955. H. R. 6142, an identical bill, was introduced by the Honorable Charles A. Wolverton, by request, also on May 10, 1955. Mr. Chairman, you will recall that I discussed the fundamental concepts of the Advisory Committee's report last September 19 before this subcommittee at hearings convened for the purpose of obtaining a full explanation of the report. I presented in some detail the reasons we were of the opinion that the national transportation regulatory policy should be brought up to date with the competitive facts of life and modernized to protect and strengthen our common-carrier system. I would suggest that my testimony appearing on pages 2 through 54 of the printed hearings, including the text of the report and supplementary memorandums subsequently submitted by the Department be incorporated in this record. I am authorized to request also that the testimony of the other Advisory Committee members, the Honorable Charles E. Wilson, Secretary of Defense, and the Honorable Arthur S. Flemming, Director, Office of Defense Mobilization, be similiarly incorporated. Mr. HARRIS. Mr. Secretary, may I say that the entire record of the proceedings of last September has been printed. Secretary WEEKS. Thank you, sir. You may recall also that on December 2, 1955, I outlined the substance of the Advisory Committee's recommendations to the Select Committee on Small Business, United States Senate, which was holding hearings on the administration of the Motor Carrier Act by the Interstate Commerce Commission as it affects small truckers and shippers. And with your permission, I should like my statement before that committee together with supplementary comments on certain testimony criticizing the report also to be made part of this record. This material appears at pages 285 to 310 of the hearings before the Select Committee on Small Business, United States Senate, 84th Congress, 1st session, on Interstate Commerce Commission administration of the Motor Carrier Act. Mr. HARRIS. We will receive it for the record along with your statement. (The matter referred to is as follows:) Senator DUFF. Mr. Secretary, you may proceed whenever you are ready. STATEMENT OF HON. SINCLAIR WEEKS, SECRETARY OF COMMERCE, ACCOMPANIED BY LOUIS S. ROTHSCHILD, UNDER SECRETARY FOR TRANSPORTATION; PHILIP A. RAY, GENERAL COUNSEL, ED MARGOLIN, OFFICE OF THE UNDER SECRETARY FOR TRANSPORTATION; AL KREBS, GENERAL COUNSEL'S OFFICE, DEPARTMENT OF COMMERCE Secretary WEEKS. Mr. Chairman, I am pleased to be here today. I have a statement that I think I will read if I may and then answer any questions that you have. I would like to identify those who are with me. Mr. Rothschild, Under Secretary for Transportation; Mr. Ray, General Counsel; Mr. Margolin, of the Office of the Under Secretary for Transportation Division of the Department; and Mr. Krebs, of the General Counsel's office. I believe that you are approaching this whole question from the standpoint of both the small trucker and the small shipper. The specific responsibility for administration of the Motor Carrier Act rests exclusively with the ICC. Since the executive branch has no legislative mandate to review this phase of regulation, a review of the efficacy of Commission regulation is properly the function of the Congress. I believe it would be of interest at the outset of my testimony to indicate briefly the statutory responsibility of the Department of Commerce for the promotion of business in general, and the relationship of the transportation functions of the Department to this basic statutory provision. I should then like to discuss the applications and limitations of our responsibilities to the administration of the Motor Carrier Act. A statement of the Department's responsibility toward the business community in general is contained in the Organic Act of the Department of Commerce, approved February 14, 1903 (32 Stat. 826). This act provides that the Department of Commerce shall foster, promote, and develop the foreign and domestic commerce, the manufacturing and shipping industries, and the transportation facilities of the United States. Transportation activities have a very prominent role in the Department of Commerce. They include the promotion of highways and airports, the provision of airway facilities, the promotion of an American-flag merchant marine, and the provision of weather-forecasting services which are of special importance to the transportation industry. The expenditures for these transportation promotional activities constitute over 95 percent of the budget of the Department. All but one of the major Federal transport promotional programs are within the Department of Commerce the exception being the program of navigation improvements by the Army Engineers. There is consequently within our Department the opportunity and responsibility for a continuing central coordination of virtually all such programs carried on by the executive branch of the Government. The Secretary of Commerce has been designated as the President's principal adviser in transportation matters. He is expected to assume leadership in the |