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Mr. TURNEY. So far as I know, and I have no exception to this, I have never known the Commission to attempt to allocate a fair share or an unfair share, or any kind of a share. If they did, I think it would be illegal under the present act.

Mr. Flynt. Would it also be illegal after the supposed passage of this bill that we have before us?

Mr. TURNEY. No more so than it is now.
Mr. Flynt. You do not think that would be changed ?
Mr. TURNEY. No, sir.

Mr. FLYNT. Then, is there any valid objection to the enactment of that particular section?

Mr. TURNEY. Yes. The assumption would be that you intended to change something. You do not want to change what is there now. Mr. FLYNT. That is all. Thank you.

Mr. HARRIS. Mr. Turney, do you intend to be present during the hearing tomorrow?

Mr. TURNEY. I will hold myself, of course, subject to the desires of the committee.

Mr. Harris. Mr. Dolliver was called out and he has some questions that he wanted to direct to you. He will be here in the morning. He wanted to know if you can be back in the morning.

Mr. TURNEY. I will be glad to be here in the morning.
Mr. HARRIS. Thank you.
It is delightful to have you back with us, gentlemen.
The committee will now adjourn until 10 o'clock in the morning.

(Thereupon, at 4:47 p. m., the committee recessed, to reconvene the following day, May 10, 1956, Thursday, at 10 a. m.)


THURSDAY, MAY 10, 1956


Washington, D.O. 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. HARRIS. The committee will come to order.

When the committee adjourned yesterday we had had the testimony of Mr. John R. Turney. He had responded to questions from several members of the committee. Mr. Dolliver had some questions which he wanted to expound to Mr. Turney.

Mr. Turney, if you will come back to the witness stand, please. STATEMENT OF JOHN R. TURNEY, ATTORNEY, WASHINGTON, D.C.


Mr. TURNEY. Mr. Chairman and gentlemen—
Mr. HARRIS. Mr. Dolliver.

Mr. DOLLIVER. Mr. Chairman, I want to express my appreciation to Mr. Turney for coming back; also for the presentation to us of the very illuminating and well prepared statement.

I think these hearings have been characterized by very fine statements from all sides.

You have presented to us a great many statistics which are of importance with respect to these measures which we are considering. Could you enlighten us as to the source of those statistics?

Mr. TURNEY. The statistics that I gave relating to the tariffs filed and also the number of protests and the number of suspensions were obtained from the Chairman of the Suspension Board of the Interstate Commerce Commission, from a record which he maintains. I did not see the record, but I am positive that he read from it correctly.

The statistics on page 9 are from the Interstate Commerce Commission's statement M-100, for the year 1954; everything except column 5, which is a percentage column. Column 2 is a summation of the column in that statement M-100. They showed the amount of common expenses apportioned to passenger service and the amount apportioned to freight service. They do not show the total. I simply added them together. I am happy to say I did not add them, I had someone who could add add them together. The percentage was obtained, of course, mathematically correct by machine.

The total freight expenses were reported, the out-of-pocket freight expenses were obtained as shown in the column by taking 80 percent of each of the items.

Mr. DOLLIVER. Now, how did you arrive at the 80 percent !

Mr. TURNEY. The 80 percent—and I think Brother Langdon also testified on the same thing—is the part formerly used by the Cost Section of the Interstate Commerce Commission in obtaining the out-of-pocket portion of operating expenses—rents and taxes, exclusive of income taxes, for which a different percentage is used for return on investment.

Mr. DOLLIVER. Is that considered the proper percentage in allocating the freight operations?

Mr. TURNEY. Yes; that was determined by very extensive surveys, including many years of operations to determine the figures. Constant costs are something that we know exists, but nobody has ever been able--at least so far as I know-to say that any particular expense is constant and will not vary with additional volume. I did not agree with them when they first started—they finally convinced me that constant costs apply to all items.

These lines on page 9 are summations of a half dozen lines on this statement 100. “Road properties," for illustration, includes ties, rails, other track material; tracklaying and servicing, et cetera. Otherwise the statement would have been entirely too long.

Page 27: These figures were taken from the actual revenues for the year 1955 and reported. The out-of-pocket cost was computed as outof-pocket cost for January 1, 1955, by commodities reported by the Cost Section of the Commission.

There are several hundred commodity groups in the manufacturers which are all grouped together as one general group. The raw materials are a half a dozen general groups; products of agriculture, et cetera.

The source of the figures on page 36—and go through 39, Mr. Dolliver, are shown in detail, just how they were arrived at and the sources, on pages 46 and 47 of appendix B.

Mr. DOLLIVER. Thank you very much. I think it is important that we know the sources of these figures.

Mr. TURNEY. Yes, sir.

Mr. DOLLIVER. Now, on page 32, as I understand your statement there, you express opposition to any change in the suspension power of the Commission; it is 7 months at the present time.

Mr. TURNEY. The present period is 7 months. And, as I understand the bill, it is 3 months.

Mr. DOLLIVER. You think that the proposal in the bill would not appreciably shorten that period because of the very complexity of the problem?

Mr. TURNEY. I think all of the carriers would welcome a shortened period of suspension. I know that my clients would, and I would; but, frankly, I do not see how it can be shortened, procedurally, with any regard at all to due process, and in most of the important cases they are not concluded in 7 months.

Mr. DOLLIVER. Would an increase in the staff of the Interstate Commerce Commission alleviate that situation to any extent?

Mr. TURNEY. Well, it would alleviate it to the extent that delay is caused by lack of hearing officers, but the procedural processes them

selves, the time that is necessary for extensions to be taken for consideration, for petitions, for reconsideration, for briefs, for the hearing—all of that just adds up to more than 3 months, and generally more than 7 months.

Mr. DOLLIVER. Is there any possibility of shortening those times for taking the appeal or calling for the suspension and filing of briefs, and various steps that are involved?

Mr. TURNEY. Well, of course, Mr. Dolliver, a lawyer never likes to be speeded up if he can avoid it.

I have been on the rules committee of the Practitioners Association, and we have been recommending lengthening them and, as a matter of fact, they did lengthen them last year, because it was found that in 90 percent of the cases counsel asked for additional time and got it.

I wish it were not so, but I do not think those periods can be shortened. Sometimes we have records of many thousands of pages in these I. and S. cases.

Mr. DOLLIVER. Well, the sum and substance of it is, then, that you feel that even if a recommended suspension time were shortened to 3 months, it would have no practical effect whatever by reason of limitations of the human mind in reading exhaustive briefs and getting them prepared and filed. It still would take 7 months. Is that your thought?

Mr. TURNEY. Yes, sir; but I cannot agree that it would not have a practical effect, because suspensions are over then, and the rates go into effect.

Mr.DOLLIVER. Would you view that with alarm!

Mr. TURNEY. Well, I certainly would, because if my throat is going to be cut, there is not much difference between cutting it now and 3 months from now.

Mr. DOLLIVER. Might as well do it next day?
Mr. TURNEY. That is right; get it over with.

Mr. DOLLIVER. It is a fact that where a rail line proposes a new rate that its competitor, the trucks, can come in and get suspensions. Can the trucks do that?

Mr. TURNEY. Yes, sir; that is true. Were you here yesterday when I read the statistics on that?


Mr. TURNEY. There were probably 10 times as many suspensions of truck rates as there were of rail rates.

Mr. DOLLIVER. Do the railroads have the same privilege as competitors of the trucks! Can they get suspension of truck rates!

Mr. TURNEY. Yes, sir. Mr. DOLLIVER. There is no limitation there! Mr. TURNEY. No limitation at all. As a matter of fact, during the last year, the railroads filed 1,152 protests against truck rates.

Mr. DOLLIVER. Now, finally, on page 37, you present some graphs to indicate that even if the railroads put the trucks clear out of business and got some increases in rates, that it would not substantially add to the railroad revenues. Is that the sum and substance of your statistics on page 37 ?

Mr. TURNEY. Not quite, sir. And I do not think probably that I made this clear yesterday.

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