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"for the United States, State or municipal governments, or” and the words "or the transportation of persons for the United States Government free or at reduced rates,".

(H. R. 6208, 84th Cong., 1st sess.) A BILL To amend paragraph (1) of section 4 of the Interstate Commerce Act, as amended

Be it enacted by the Senate and House of Representatives, of the United States of America in Congress assembled, That paragraph (1) of section 4 of the Interstate Commerce Act, as amended (49 U. S. C. 4 (1)), is amended to read as follows:

“(1) It shall be unlawful for any common carrier subject to this part or part III to charge or receive any greater compensation in the aggregate for the transportation of passengers, or of like kind of property, for a shorter than for a longer distance over the same line or route in the same direction, the shorter being included within the longer distance, or to charge any greater compensation as a through rate than the aggregate of the intermediate rates subject to the provisions of this part or part III, but this shall not be construed as authorizing any common carrier within the terms of this part or part III to charge or receive as great compensation for a shorter as for a longer distance: Provided, That upon application to the Commission and after investigation, such carrier, in special cases, may be authorized by the Commission to charge less for longer than for shorter distances for the transportation of passengers or property, and the Commission may from time to time prescribe the extent to which such designated carriers may be relieved from the operation of the foregoing provisions of this section, but in exercising the authority conferred upon it in this proviso, no such authorization shall be granted on account of merely potential water competition not actually in existence: And provided further, That any such carrier or carriers operating over a circuitous line or route may, subject only to the standards of lawfulness set forth in other provisions of this part or part III and without further authorization, meet the charges of such carrier or carriers operating over a more direct line or route, to or from the competitive points : And provided further, That tariffs proposing rates subject to the provisions of this paragraph requiring Commission authorization may be filed when application is made to the Commission under the provisions hereof, and in the event such application is approved, the Commission shall permit such tariffs to become effective upon one day's notice."

(H. R. 9177, 84th Cong.. 2d sess.) A BILL To amend section 405 (a), part IV, of the Interstate Commerce Act Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 405 (a), part IV of the Interstate Commerce Act is hereby amended by striking out the period after the word "consignee", substituting a colon therefor, and adding: "Provided, That nothing in this part 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 agent."

[H. R. 9548, 84th Cong., 2d sess.)

A BILL To amend section 409 of the Interstate Commerce Act, as amended, to authorize

contracts between freight forwarders and railroads for the movement of trailers on flatcars

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That subsection (a) of section 409 of the Interstate Commerce Act, as amended, is amended by inserting “(1)” after “(a)" and by adding at the end of such subsection the following new paragraph :

(2) Nothing in this Act shall be construed to prevent freight forwarders subject to this part from entering into or operating under contracts with common carriers by railroad subject to Part I of this Act, governing the utilization by such freight forwarders of the services and instrumentalities of such common carriers by railroad and the compensation to be paid therefor, for line-haul movement of freight loaded in or on trailers or other containers and transported on railroad cars suitable for such use: Provided, That in the case of such contracts

it shall be the duty of the parties thereto to establish just, reasonable, and equitable terms, conditions, and compensation which shall not unduly prefer or prejudice any of the participants thereto and shall be consistent wtih the national transportation policy declared in this Act.”

SEC. 2. The heading of such section 409 is amended by striking out “BY MOTOR VEHICLE” and inserting in lieu thereof "BY RAILROAD OR MOTOR VEHICLE.

[H. R. 9771, 84th Cong., 2d sess.]

A BILL To amend section 411 of the Interstate Commerce Act, as amended, with respect

to relationships between freight forwarders and other common carriers

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That subsection (a) of section 411 of the Interstate Commerce Act, as amended, is amended to read as follows:

"SEC. 411. (a) (1) Notwithstanding any other provision of this Act, it shall be lawful, with the approval and authorization of the Commission, as provided in paragraph (2) of this subsection, for a freight forwarder subject to this part to acquire control of one or more common carriers subject to part I, II, or III of this Act, through ownership of stock or otherwise; except that this subsection shall not alter, limit, or affect the right of any carrier subject to part I, II, or III of this Act to acquire control of any other carrier subject to part I, II, or III of this Act in accordance with the provisions of section 5 of part I of this Act.

"(2) Whenever a transaction made lawful by paragraph (1) of this subsection is proposed, the freight forwarder seeking authority therefor shall present an application to the Commission, and thereupon the Commission shall give due notice thereof and afford reasonable opportunity for interested parties to be heard, setting the application for public hearing if deemed by the Commission necessary in order to determine whether the findings, specified in paragraph (3) of this subsection may properly be made. If the Commission finds that, subject to such terms and conditions and such modifications as it shall find to be just and reasonable, the proposed transaction is within the scope of paragraph (1) of this subsection and will be consistent with the public interest, it shall enter an order approving and authorizing such transaction, upon the terms and conditions and with the modifications so found to be just and reasonable.

“(3) In passing upon any proposed transaction under the provisions of this section, the Commission shall give weight to the following considerations, among others: (a) The effect of the proposed transaction upon adequate transportation service to the public, and (2) where appropriate, the interest of the carrier employees affected; and the Commission may require, as a prerequisite to its approval of any proposed transaction under the provisions of this section, a fair and equitable arrangement to protect the interests of the employees affected.”

(H. R. 9772, 84th Cong., 2d sess.)

A BILL To amend section 410 of the Interstate Commerce Act, as amended, to change the

requirements for obtaining a freight forwarder permit

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 410 of the Interstate Commerce Act, as amended, is amended by eliminating therefrom subsection (d) in its entirety, and by redesignating subsections (e), (f), (g), (h), and (i) as subsections (d), (e), (f), (g), and (h), respectively. (Departmental reports on the above bills are as follows:)


Washington, D. C., October 31, 1955. Hon. J. PERCY PRIEST, Chairman, Committee on Interstate and Foreign Commerce,

House of Representatives, Washington, D. C. DEAR MR. CHAIRMAN : This letter replies to your request dated May 11, 1955, for the views of this Department with respect to H. R. 6141, a bill to amend the Interstate Commerce Act, as amended so as to provide for a stronger national transportation industry, and for other purposes.

H. R. 6141 incorporates the provisions of draft legislation submitted to the Congress by this Department on May 5, 1955. The Department stated in its transmittal letter that the legislation was designed to implement the Report of the Presidential Advisory Committee on Transport Policy and Organization, and was intended to provide a useful tool for the Congress in considering the recommendations of the Advisory Committee.

The President appointed the Advisory Committee on July 12, 1954, under the chairmanship of the Secretary of Commerce, with the Secretary of Defense and the Director of the Office of Defense Mobilization as members, and the Secretary of the Treasury, the Postmaster General, the Secretary of Agriculture, and the Director of the Bureau of the Budget as ad hoc participating members. A working group of outstanding transportation experts assisted the Advisory Committee in preparing the report.

The President directed the Advisory Committee to examine existing Federal transportation policies and problems for the purpose of determining their effect on the overall needs of the Nation. He stated in his letter establishing the Advisory Committee that the vital interests of this Nation require that the transportation industry of the United States maintain itself at maximum effectiveness. The Government must provide effective leadership in assuring that its policies and programs affecting the various forms of transportation, whose services are so necessary to the public and to industry and which have such a vital bearing upon the national security, are best designed to aid them in performing fully the roles for which each is best suited. The President further stated that "a comprehensive up-to-date review of overall transportation policies and problems is needed as an aid in assuring the overall consistency of Government policies and programs concerning particular branches of the transportation industry.”

Appointment of the Advisory Committee was another step in recent efforts to harmonize transportation policy with the Nation's need for a well-balanced and efficient transportation system. The Committee on Interstate and Foreign Commerce of the House of Representatives of the 80th Congress investigated the transportation situation in the immediate postwar years. The Secretary of Commerce, at the request of the President prepared in 1949 a report outlining major policy issues which needed to be resolved in order to achieve maximum effectiveness and consistency of Federal programs in the field of transportation. The Subcommittee on Domestic Land and Water Transportation of the Committee on Interstate and Foreign Commerce of the Senate issued a report in October 1951, after lengthy hearings and study. Extensive hearings were held during the 820 Congress on a series of proposed amendments to the Interstate Commerce Act, as amended. These and other studies, as well as information furnished by interested groups at invitation of the Advisory Committee, were found to be of value in formulating the recommendations in the report.

The principal purposes of the amendments made by H. R. 6141 to the Interstate Commerce Act, as amended, are (1) to place greater reliance on competitive forces in ratemaking; and (2) to assure the maintenance and further development of a financially strong and modern common-carrier system of transportation.

During the past 30 or more years, a striking change has occurred in the Nation's transportation system. Where once travelers and shippers relied almost solely on railroad facilities with the exception of certain limited areas served by water, they now have available a vast and complex system of different types of transportation service offered by public carriers and may, if they choose, travel or move their goods with their own facilities. The result is that the once-feared monopoly element which formerly characterized transportation and which prompted so much of our present transport policy has given way for all practical purposes to a highly competitive system.

Fair competition is the bulwark of a free economy and its fruits are nowhere more evident than in this country. Yet in the field of transportation the opportunity for fair competition is sharply limited by existing statutory restraints on ratemaking which have prevented the several modes of transportation from realizing their full economie capabiltiies. Placing greater reliance on competi. tive pricing, subject to appropriate control for public protection against discriminatory abuses and destructive competition, will stimulate advances in technology and managerial skills and lead to improved and more efficient service for the general public.

Historically, the common carrier industry has provided the bulk of essential services required to meet the commercial, social, and defense needs of the public for transportation. The law requires these carriers to serve all persons and shippers to the capacity of their facilities, on known schedules, at published rates and without discrimination. Their services are and will remain indispensable to industry, commerce, and agriculture in peace or in the event of war. Unfortunately, the serious financial situation of many of these carriers hinders their efforts to provide more attractive and efficient service. Their financial condition is partly the result of their inability under present regulatory restraints to meet competition from carrier services subject to less regulation and in some instances operating free of economic regulation. To preserve a strong and healthy common carrier industry, the regulatory scheme needs modification to provide a more equitable basis upon which common carriers may compete and attract a fair share of traffic which they are economically capable of handling.

In order to provide appropriate policy guidance for the accomplishment of these basic purposes, the declaration of policy in the Interstate Commerce Act is restated so as to indicate that greater freedom should be allowed to carrier management in pricing of competitive services. Too often, carriers cannot pass on their economic cost advantages to the public because the declaration of policy and rate controls as admini ered by the Interstate Commerce Commission handicap experimentation with new rate and service concepts.

H. R. 6141 amends the ratemaking provisions of the act in the following principal respects: (1) limits the regulatory authority of the Commission to determination of reasonable minimum or maximum rates rather than precise rates; (2) modifies the Commission's power to suspend rates, shortens the suspension period, and shifts the burden of proof to carrier complainants; (3) revises the long-andshort-haul clause to permit carriers, without prior approval, to charge less for a longer than for a shorter haul if necessary to meet actual competition; and (4) makes volume rates lawful if such rates are based on cost differences and are established to meet competition.

The Commission is authorized under existing provisions of the act to prescribe maximum and/or minimum rates for common carriers subject to its jurisdiction upon a finding that the rate in issue is unreasonable or unjustly discriminatory or unduly preferential. The practical effect of these provisions is to allow the Commission to determine and prescribe the precise rate, the ceiling or floor of the rates to be observed, or the range of rates considered lawful. Limiting the Commission's rate authority to the prescription of maximum or minimum rates establishes a "zone of reasonableness" within which carriers would have freedom to adjust their rates and bid for competitive traffic in accordance with their best business judgment.

The Commission would still have adequate authority for curbing any attempts to institute ruinous rate-cutting for competitive traffic, and for preventing carriers from charging excessive rates where competition is limited or absent. In determining what constitutes a minimum reasonable rate, the Commission would be precluded from giving consideration to the effect of such rate on the traffic of any other mode of transportation, or the relationship of such rate to the rate of any other mode of transportation, or whether such rate is lower than necessary to meet the competition of any other mode. However, competitive carriers subject to the act could protect any rates which they believed would constitute less than reasonable charges. With respect to maximum reasonable rates, although the Commission could not prescribe a rate which was below the full cost of performing the service to which it applied, exclusive of losses in other services, it would be specifically charged with preventing the imposition of unreasonably high rates or noncompetitive traffic. No change would be made in the Commission's authority to correct unjustly discriminatory pricing or practices.

Shippers and travelers have available today many alternate methods of transport to fill their transportation needs. Service characteristics such as in-transit time, packaging requirements and other incidental matters, and door-to-door handling vary considerably among the different modes of transport. Users in some instances will require a superior service; in others a less complete service will meet their needs adequately. Under the proposed amendments, carriers could better reflect differences in service quality in their rates and the public could purchase service at a price more in keeping with the quality desired. As the Advisory Committee report states, "If the market is to determine the appropriate use of each form of transportation in accord with shippers' judgments of the utility to them in terms of cost and service, rates must be allowed to reflect

cost advantages whenever they exist and to their full extent.” While the amendments will permit closer alinement of rates with cost characteristics, value-ofservice considerations may still be fully effective within the zone of reasonableness.

H. R. 6141 repeals section 15 (a) of the act, which requires that the Commission in prescribing rates given consideration, among other factors, to "the effect of the (proposed) rates on the movement of traffic by the carrier or carriers for which the rates are prescribed.” This repeal eliminates the requirement that the Commission substitute its business judgment for that of carrier management in these matters.

The proposed legislation makes three basic changes in the act relating to the Commission's power to suspend new rates, fares, or charges pending a decision as to their lawfulness. The first change would shorten the suspension period from 7 to 3 months. This change would assure prompt action in the disposition of such proceedings. The second change would authorize the Commission to suspend rates only when it determines that the proposed rate would probably be unlawful, that it would result in injury to the complainant, and that in the absence of suspension, the complainant has no other adequate remedy. This change would establish the power of suspension as a special and unusual remedy. Under existing provisions, suspension is too frequently invoked by competing carriers to harness the proponent or merely to delay decision. The third change would shift the burden of proof from the proponent to a complainant carrier, which is in accord with the Administrative Procedures Act.

The fourth section of the Interstate Commerce Act would be amended so as to eliminate the procedural requirement that common carriers subject to parts I and III of the act obtain approval of the Commission prior to charging less for a longer than for a shorter distance, and to authorize such carriers to charge less for longer than shorter distances if the charge is necessary to meet actual competition and does not result in less than a just and reasonable minimum charge. The section would also be amended so as to delete provisions prohibiting such common carriers from charging any greater compensation as a through rate than the aggregate of the intermediate rates. Other sections of the act affording adequate remedies against unjust or undue discriminations resulting from the application of rates of this character are not modified.

The bill specifically authorizes carriers to establish incentive and volume rates. The principle and validity of price differentials having suitable relation to the lesser cost of providing goods or services in quantity is generally accepted throughout our economy. However, carriers subject to the act, who possess inherent characteristics that might enable them to move great volumes over long distances, have not been sufficiently free to institute incentive pricing and pass on to the public the cost savings involved in hauling heavy volume traffic from one point of origin to a single destination.

H. R. 6141 makes several basic changes in the act which would strengthen the common carrier industry. These changes do the following ; (1) redefine a private carrier by motor vehicle; (2) redefine motor and water contract carriage and require the filing of actual rather than minimum rates; (3) repeal the drybulk commodity exemption applicable to water carriagers; (4) provide definite statutory standards for determining which nonprofit shipper associations are entitled to continued exemption from the provisions regulating freight forwarders; and (5) empower the Commission to override States service requirements in certain instances.

The proposed redefinition of a private carrier of property by motor vehicle limits the applicable exemption to a person who transports by motor vehicle, property of which he is the owner, leasee or bailee and which property was not acquired for the purpose of such transportation.

The redefinition of contract carriage makes clear that such operations are limited to those of a specialized or individualized character under bilateral contracts or those equivalent to bona fide private carriage.

Neither of these amendments would affect in any way legitimate private or contract operations. In the case of private transportation, certain opportunistic operations which have proved injurious to sound public transportation would be brought under regulatory control. Contract carriers who are in effect operating as common carriers would be required to obtain proper operating authority. Provision is made for granting appropriate operating authority to persons affected by the amendments who are entitled to such authority by virtue of their past operations.

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