Mr. HARRIS. Now, you say that those rates are secret. They are not public. Mr. STALEY. They are not filed with the Interstate Commerce Commission, and they are not public. Information about them is not generally available to any other commercial shippers, but it is a rather interesting thing. The Department of Defense maintains a public file of those quotations and after so long a time they put that out and there are people in Washington and elsewhere who make a living out of going over to the Department of Defense office and copying off information about these rates, so that somebody else can get them. For $15 a month you can get a report of all section 22 quotations given the Department of Defense. Mr. HARRIS. Here is a practical problem. We are going to be asked about this, and I want to know if you have the answer. If we repeal section 22, there will be no special rates for Government shipments. Now, how much additional burden would the freight cost be to the taxpayers? Mr. STALEY. That is a good question. In my judgment if the Government traffic organizations would approach their rate problem in the same manner that the commercial shippers do, they could get rate adjustments. They cannot get them overnight. But, they can be worked out. I get rate adjustments. I have to wait in line sometimes, but if I have a rate I can justify, I get it; and if the Government has a rate which it can justify, it will get it from the carriers, and they should not have any rates which they cannot justify. I do not know that there should, in the long run, be any real increase in the Government's freight bill. Mr. HARRIS. Well, that leaves me a little bit puzzled. I have the impression from your statement and the statements of other witnesses, that the Government ought to pay a fair rate. Your example of the pig aluminum a moment ago is a question in point. Mr. STALEY. You are right about that, but I said, Mr. Chairman, that the Government should not have any rates which cannot be justified; and it is true that they now have such rates. They will be taken away from them and it will cost them some more money. Mr. HARRIS. How much? Mr. STALEY. Above what they are now paying. Mr. HARRIS. What will the total figure be? We are going to have to answer that question when we go before the House with this. That is the reason I am trying to get the information. We are either going to have to answer it or we are going to have to say that we do not know. Mr. STALEY. I do not know that anybody knows. Of course, as commercial shippers, we have no access to the files of the Government. We could not supply that information. Mr. HARRIS. That is what I want to find out, if that information is available. In other words, we are going to have to give an answer to the question. Mr. STALEY. Yes, sir. Mr. HARRIS. Well, we thank you very much again. Mr. HINSHAW. One question, Mr. Chairman. Mr. HARRIS. Mr. Hinshaw. Mr. HINSHAW. Do you think, Mr. Staley, that the government will find that through their use of section 22 instead of their referring to the tariffs, that they will actually get some reductions in rates if section 22 were abolished! Mr. STALEY. I have had this experience, and it is not an unusual one at all: Now, under the mechanism of making freight rates today, if a shipper asks a railroad association to establish a reduced rate, that is made public here, and every shipper in the country knows what is proposed, and quite often somebody else, some other shipper, or other industry will say, "That rate should not be 95 cents. It should be only 75 cents," and the fellow comes up with a lower rate than he asked for. Now, the people who have been dealing with the Government tell me quite often, if these rate matters were really studied by some of these Government traffic agencies, they could justify the rates that they have. So I would say there would be instances where they would get better rates through having experienced traffic people having a chance to take a shot at them. Mr. HARRIS. Thank you very much, Mr. Staley. We will be gład to have your statement. Mr. STALEY. I want to thank all of you for the kindness of letting me come on at this time. Mr. HARRIS. We thank you very much. We are very glad to have you, and we appreciate your very fine, forcible statement. Mr. STALEY. Thank you. Mr. HARRIS. The committee will adjourn until 10 o'clock tomorrow morning. (Whereupon, at 4: 55 p. m. the committee was recessed, to reconvene at 10 a. m. Thursday, May 3, 1956.) TRANSPORTATION POLICY THURSDAY, MAY 3, 1956 HOUSE OF REPRESENTATIVES, Washington, D. C. The subcommittee met, pursuant to adjournment, at 10 a. m., in room 1334, New House Office Building, Hon. Oren Harris (chairman of the subcommittee) presiding. Mr. WILLIAMS (presiding). The committee will please be in order. At this time, I would like to recognize Mr. George H. Shafer, general traffic manager of the Weyerhaeuser Sales Co. and the Weyerhaeuser Timber Co., with headquarters at St. Paul, Minn., who has a statement that he would like to submit. Request has been made by former Congressman Lyle Boren that we accord this privilege to Mr. Shafer. STATEMENT OF GEORGE H. SHAFER, GENERAL TRAFFIC MANAGER, WEYERHAEUSER SALES CO. AND WEYERHAEUSR TIMBER CO., ST. PAUL, MINN. Mr. SHAFER. Thank you very much, Mr. Congressman. My name is George H. Shafer, general traffic manager of the Weyerhaeuser Sales Co. and the Weyerhaeuser Timber Co., with headquarters at St. Paul, Minn. Our companies produce and distribute various kinds of forest products on a national scale. In this distribution, we employ the services of the railroads, trucking lines, and water carriers. Over 80 percent of the outbound products shipped directly from our mills and plants in Oregon, Idaho, and Washington, moves by rail. We are vitally interested in having, at all times, strong railroads, privately owned and operated, and believe that such is required in the public interest. The report of the Cabinet Committee, which inspired the legislation now before us (H. R. 6141), has been carefully studied and I wish to say, without hesitation, that the overall objectives have my complete approval, particularly the attempt to minimize regulation and thus permit more managerial freedom. Because of the time limit and in view of detailed testimony by others, particularly that of a representative of the National Industrial Traffic League, which has my general approval, I shall comment upon but a few of the statutory changes proposed in the act. DECLARATION OF NATIONAL TRANSPORTATION POLICY Prior to 1940 no declaration of transportation policy preceded the act, although some brief expressions of Congress intended as guides to the Commission were contained in particular provisions. Thus, for over 50 years, the Interstate Commerce Commission successfully administered the act without a declaration of policy, and so far as I know, did not feel any great need for such a pronouncement. I do not know of any real need for such a declaration today and prefer that the powers and duties of the Commission be spelled out in the act itself. When the 1940 legislation was under consideration, the Interstate Commerce Commission, before a congressional committee, took the position that a declaration of policy was "an inept and maybe an ineffective way of making law." They also pointed to the dangers of lack of clarity in such statements. The fears of the Commission have been fully justified with the passing of time, in my opinion. On or about December 22, 1955, the Commission submitted its comments to your committee on the various provisions of H. R. 6141. These comments refer, among other things, to the difficulty in interpreting a declaration of policy and conclude with the following words: For the foregoing reasons we urge that if a statement of national transportation policy is considered desirable the present statement be modified only after careful consideration. [Emphasis mine.] It seems clear to me that the foregoing indicates doubt on the part of the Commission as to the desirability of a declaration of policy. My own doubts are increased by the fact that in the so-called Bricker report (S. Rept. 1039, 82d Cong., 1st sess.), a statement was made that A statement of transportation policy should be treated as an integral part of the substantive law. The Supreme Court in at least one case-namely, American Trucking Associations v. U. S. (344 U. S. 298), the truck-leasing caseseems to have relied somewhat upon the declaration of policy in sustaining the Commission's decision; and, moreover, there is strong evidence that the Commission itself accepts the policy declaration as the equivalent of substantive law, particularly in rejecting rates proposed by one form of transportation because of their possible adverse effect upon a competing form. The declaration of policy should, in my opinion, be treated as a preamble and convey no authority to expand or limit the substantive provisions of the act. It appears that the best way to prevent it from being so used by the courts and the Commission is to have no such declaration. It is realized that there are those who believe that there should be a suitable declaration of policy preceding the act, and it is further argued by some that the Congress will never consent to its complete deletion. If such a policy declaration is to be retained, my sugges tions are contained in the attached document, which would eliminate what I consider to be some objectionable and unnecessary phraseology contained in the Cabinet Committee's recommendation and also adds a caveat which would restrict its use and prevent it from being regarded as substantive law. The deletions and additions would seem to require no comment. A broken line is drawn through the words that would be eliminated and new language is underscored. THE FOURTH SECTION It is proposed to amend section 4 of the act so as to remove the requirement that rail or water carriers must obtain prior approval for charging greater than the aggregate of intermediate rates, and for charging less for longer than for shorter distances over the same line or route in the same direction, under certain conditions, when necessary to meet actual competiiton. Under this proposal, other long-and-short departures would per se continue to be unlawful; but under the pending bill, as I understand it, the provisions under which the Commission may grant relief would be deleted from the act. It has been my thought for some time that the fourth section could now be safely repealed, in view of the requirements contained in other sections of the act. Substantial opposition to repeal, or any real change in this section, has always appeared whenever such proposals were made. In the circumstances, I believe the proposal of the Commission as contained in H. R. 6208, which would eliminate the necessity of carriers securing prior approval for the publication of rates over circuitous routes to meet the rate or rates in effect over direct routes between competitive points, would be an excellent start at solving this problem. SUSPENSION PROVISIONS (SEC. 7 (C)), H. R. 6141 In the interest of expediting suspension cases, I favor the shortening of the suspension period even to 90 days, with a provision for resuspension if necessary. I do not, however, favor shifting the burden of proof to the protestant, even if the protestant be a carrier. The party proposing rate changes is best able to justify them. No doubt under present law suspensions are secured, particularly by competitive carriers, primarily for purposes of delay, but it seems to me the Commission, in administering the act, can detect and correct most of the abuses which result from improper suspension requests, as the exercise of the suspension powers contained in the act is discretionary. Moreover, it is my belief that the three conditions (pp. 11 and 12, H. R. 6141) which the Commission must determine under the proposed legislation before it can exercise its powers of suspension are unduly burdensome, impractical, and highly objectionable. AMENDMENT OF SECTION 15A (2) OF THE ACT There has been much discussion about the proposed changes in the Commission's ratemaking powers. I do not understand that anyone has proposed to change existing provisions of the act which declare undue discrimination and preference to be unlawful. The proposals deal primarily with the Commission's maximum and minimum rate powers, and whether or not the Commission should continue to have the authority to fix the exact rate when the occasion requires. The addition of what has become known as the "three shall-nots" (see proposed sec. 15a (1) in sec. 8 of H. R. 6141) to the present sec |