used. I will give you something that perhaps might be illustrative of something. The business of the Quaker Oats Co. in a year, if it were in a single freight train, would extend from Cedar Rapids, Iowa, through Rockford and Chicago, Ill., and Tecumseh, Mich., and Toledo and Akron and Pittsburgh, and Harrisburg and Philadelphia, New York City, up to Boston. That would be our business for 1 year.

I could take that business and if it were all between Detroit and Dallas, route every car over a different route and never repeat the routes, for 30 years. That is the complexity of your railroad system. Mr. HALE. Doesn't this show the great development of our railroad system?

Mr. STALEY. Yes, but it is being impoverished by these orders of the Commission that they publish these terrific tomes of nonsense. This used to be a slight little book of 200 pages 15 years ago. Then we began to get these fourth section orders and they published rates and they published a third of a page of rates and 40 pages of routes. Then it got so big they took the alcohol rates out of it. That was 40 pages. Now it is 400 pages. Then it got so big they took the paper rates out. Then it got so big they took the binding twine rates out. Then it got so big they took the pipe rates out. Then it got so big they took some brick rates out. But it still kept growing bigger and bigger. The thing that used to be 250 pages is now 1,194. They have had all these tariffs split out, and it is all because of the fourth section circuity limitations that the Commission has said to you that they don't think is any good.

Mr. HALE. I want to ask you some questions.

Mr. STALEY. Yes, sir.

Mr. HALE. If I want to ship something from Detroit to Dallas, whether it is a motorcar or a package of Quaker Oats, I probably would care acutely how much I would have to pay for getting the job done, but as long as the rate was the same over all the different routes why should I be so excited as to whether the commodity, whatever it was, was going to move by Memphis or by some other route, any one of the 4,717,000 routes.

Mr. STALEY. Mr. Congressman, there are many reasoins why shippers route their freight. In the first place, they want to know where the freight is, so if they have to get out and trace it or reconsign it, they know on what route it is being moved. For example, a man in Dallas, Tex., if he is on the Rock Island Railroad may want to give the Rock Island the haul. That is a kind of long haul out of Dallas up to Chicago. If he is on the T. & P. he may want to give it to the T. & P. There are many reasons why shippers select different routes. Take a railroad like the Katy, which comes to St. Louis. They can't discriminate in what lines beyond St. Louis they will have routes with. They have to give open routes to the New York Central, the Nickel Plate, the B. & O., the Pennsylvania, the C. & E. I. That is what creates this multiplicity of routes.

Mr. HALE. Where is the Quaker Oats Co.'s principal factory? Mr. STALEY. Our largest plant is at Cedar Rapids, Iowa. We also have a large one in Maine, at Lubec.

Mr. HALE. Good for you.

Mr. STALEY. We have about 25 or more of them.

Mr. HALE. If you want to ship a package of Quaker oats from Cedar Rapids, Iowa, to Eldorado, Ark., has not the Quaker Oats

Co. got some favorite way of doing it, or do they do it a different way each time?

Mr. STALEY. We can't use the same route each time. We might like to do so. We might like to give it to the Rock Island Railroad all the way from Cedar Rapids to Eldorado, or we might move it over the Illinois Central and the Missouri Pacific. There are various routes for getting that freight down there. For example, at Cedar Rapids if we ship Quaker oats-we ship many other things besides rolled oats, and if you want me to give you a recitation of our products, I will be glad to put it on the record-we bring grain inbound from various origins on different lines, and the line that brings in the grain gets the product out. I might bring it in on the Illinois Central and I have to ship it out on the Illinois Central. If I bring it in on Milwaukee I ship it out on the Milwaukee. We don't always have complete freedom in the selection of routes.

Mr. HALE. I don't want to prolong this discussion, but it does seem to me that a shipper has every reason to complain of complicated rate structures and big books and the difficulty of finding out whether the rate from Cedar Rapids to Eldorado is x, y, z, but I don't see why you need to complain about the fact that there are a whole lot of routes because that is only because our traffic system is so highly developed.

Mr. STALEY. Mr. Congressman, this little fourth of a page names all of the rates from Missouri and Oklahoma and Texas to every station in 10 Southern States. My rate clerk can check that rate and find the route in a minute. If the railroads have to comply literally with this fourth section order that the Commission has out against these rates-and there are thousands of those horrible orders we will end up with 50 or 60 or 70 pages and it will take a man a long time to ferret through them to find out whether he can ship. We are at Joplin, Mo., for example. You say why don't I ship over the Frisco to Memphis or the Missouri Pacific? The Kansas City Southern comes in to me and they say, "We are hauling some stuff in here at pretty cheap rates. Give us some of this good canned dog food traffic outbound." We say, "We will give you some of that business."

We will ship it K. C. S. to Oklahoma City, Rock Island to Memphis, maybe N. C. & St. L. to Chattanooga. Right away I don't know whether I am within that 333 percent limitation as to circuity. We have to get out three mileage tables and check the mileages of the K. C. S. and check the mileage of the Rock Island and check the mileage of the N. C. & St. L. and then check the short line distance from Joplin to Chattanooga. That is stupid. I don't want to be bothered with that stuff. I know what the rate is from Joplin to Chattanooga. Let me ship it any way that seems reasonable.

Mr. HALE. Would repeal of section 4 make you happier or would your life be easier then?

Mr. STALEY. Mr. Congressman, we are not asking for the repeal of section 4 in 6208. We are only asking that you do what the Commission has recommended, and that is to modify section 4 so that relief for circuitous routes is an automatic thing, and that they won't be required to issue these orders with all of these peculiar and insanitary limitations.

Mr. HALE. That is 6208.

Mr. STALEY. Yes, sir. We favor that.

It would make a very high majority of all the shippers of the country happy.

Mr. HALE. Quite seriously, it will reduce the number of people that you have to employ to figure out shipping routes, and rates is that right?

Mr. STALEY. I think it will very greatly expedite our ability to do business with the carriers and, Mr. Congressman, where it took me 7 months to get my rates in effect after they were approved, I should be able to get them into effect in 45 days. That doesn't apply only to one thing. That is just typical of hundreds and hundreds and hundreds of other rates adjustments that are before the carriers.

Another thing: I call up the railroad company and I say, "We want to talk with you about the rate on"-any commodity, say horse meat, from Lubec, Maine, or some place, Bellows Falls, Vt., to Marion. They say to me, "We would like to check that out," but it may be a month or 2 months before I get an answer, because their rate clerks are tied up on these fourth section orders. They are short of manpower in their traffic departments because they are spending an inordinate amount of time complying with these fantastic and unrealistic orders of the Interstate Commerce Commission.

We would get some results if we got rid of this circuity thing.

Mr. HALE. Let me say that I am very pleased to know that you have a plant in Lubec. I didn't realize you did. It isn't in my district, but Lubec

Mr. STALEY. We ship Puss 'N' Boots from Lubec which is the favorite cat food of many cats.

Mr. HINSHAW. Will you say that again?

Mr. STALEY. We ship Puss 'N' Boots from Lubec, and it is the favorite cat food of many cats.

Mr. HINSHAW. We also have a sizable operation at Bloomington, Calif., where we make this cat food. We are getting ready to make dog food there. We have some other operations in California.

Mr. HALE. In the sardine capital of Maine, do you mix Quaker Oats with sardines?

Mr. STALEY. We make cat food with sardines. Cat food has a sardine base, sardines and Quaker Oats. That is why it is so good. Mr. HALE. I am in favor of it.

Mr. STALEY. I want to emphasize again that we are not asking you to repeal the fourth section or to make it possible for a railroad to make a rate between two points and disregard the fourth section. All that we want you to do is to fix it so that when a railroad has a rate in, any other circuitous route can meet that rate without further ado. Mr. DOLLIVER. I understand from your last statement that you approve of the principle which is supposed to be embodied in long- and short-haul costs, that a higher rate should not be charged for a shorter haul than for a longer haul, is that right?

Mr. STALEY. I would like to answer that in this way: I don't approve of any such thing, but I am here speaking for the league and speaking for the Quaker Oats Co. and as a citizen. I am supporting 6208. If it were in my hands-incidentally, the league is behind this, too-we would go for outright repeal of fourth section, but we are not advocating that now. You have substantially that in 6141. We are taking

no position on that. We are going for 6208, which simply gets away from this circuity limitation deal. If you ask me as Dick Staley what I think about the fourth section

Mr. DOLLIVER. Yes; I ask you.

Mr. STALEY. I think it is an evil thing, but many people don't agree with me, but the majority of the league members agree that the whole fourth section should be repealed. But that isn't the purpose of this discussion. I am not advocating that here.

I hope the day will come when I can advocate it but I don't do it today.

Mr. DOLLIVER. I am glad to hear that Quaker Oats has a good many installations and I know many of them in my congressional district. Mr. STALEY. Thank you, sir.

Mr. DOLLIVER. In fact, in my home town you have quite an office force there, supervising the elevators.

Mr. STALEY. You must be in Fort Dodge.
Mr. DOLLIVER. Yes; in Fort Dodge.

Seriously now, you made a very comprehensive and interesting statement and brought out a segment of this discussion which had not heretofore come to my attention. The thing you are complaining about essentially, as I understand it, is all this paperwork you have to go through in order to comply with section 4; is that it?

Mr. STALEY. Precisely, sir. I can't put this in the record, of course, but when they got my dog food fourth section proposal ready, it consisted of about 11 or 12 pages of narrative description, and then there is 1 page with a map, 2 more, a dozen or 15 pages-the most complicated mess of junk that you ever heard of which is required by the terms of the Commission's rules of practice relating to that. We want to get rid of it and fix it so I can find the rate and not spend half a day finding out how I can rock the ship.

Mr. DOLLIVER. Your complaint at this time is not against section 4 but its administration in which the Commission has said that in order to apply that rule they have to specify all the circuitous routes over which the rate is applicable.

Mr. STALEY. That is substantially right, yes, sir.

Mr. DOLLIVER. If the Commission itself would change its ruling in that respect or get some "nudge" from this committee or the Congress to do it, that would satisfy your complaint, would it not, without interference with the principle embodied in the long-and-short-haul clause?

Mr. STALEY. Mr. Congressman, I am glad you asked that question. The National Industrial Traffic League and this railroad tariff research group believed the Commission could, by taking a fresh look at the law, interpret it in a manner which would permit them to give relief without imposing these onerous limitations and synthetic limitations on the routing of rates. So the railroads filed a petition with the Commission for blanket relief of that kind. We spent many thousands of dollars, literally, in the league in the preparation of testimony. We filed a brief, my name happens to be on it, pointing out these terrible things which happen to us. The Commission finally said "We don't believe that we have that aunthority under the law." They would not agree with us. But they said "We agree with you that these things

which are happening as a result of our orders are no good, and we will ask the Congress to pass a law that will get rid of this thing."

The Commission is in full agreement with this thing. This 6208 was issued at their instance. They could not go along with us and could not interpret the law that they have that authority today. I think they have it, but I am not a lawyer. I couldn't persuade them. Mr. DOLIVER. Isn't it a fact that this 1333 percent limitation on the length of the circuitous route is a wholly artificial and administrative limitation?

Mr. STALEY. Indeed it is.

Mr. DOLLIVER. That isn't the law at all, is it?

Mr. STALEY. It is artificial but they said to us, "we believe that we must do that under the law as it reads today," and this is the reason why: Because the law has certain little words in it. It says they shall not give relief in respect to any rates which are not reasonably compensatory. So in order to salve their consciences they said, "We can't let you take the rate which pays 40 cents a car-mile and apply it over a route which gives you 10-cents a car-mile. We don't think that would be compensatory.

So they hung this limitation on there to salve their consciences, because that was in the act. But they said that in reality and in practicality nobody should use these screwball routes except the United States Government for the routing of its freight. I could tell you about that sometime.

Mr. DOLLIVER. That is another issue in this hearing, section 22. Mr. STALEY. Yes, the wasteful and circuitous routes used by the Government. The Commission said we have to put that limitation on it. We don't believe in that. We don't think it does any good. We agree that it messes up these tariffs. We will ask Congress to change it.

Mr. DOLLIVER. Let me ask you this question: As a practical matter would a railroad which has a circuitous route between two given points in excess of 1331% percent of the short route be likely to offer an identical rate with the short route if they have that many more miles to carry the stuff?

Mr. STALEY. Quite often they can and they do and they likely would and they would make money out of it. For example, we happen to be on the Rock Island Railroad at St. Joseph, Mo. They have a long route to Memphis. We have a delivery that is on the Rock Island Railroad at Memphis. If we turned it over to another railroad they would have to absorb the Rock Island switching charges at St. Jo, the switching charges at Memphis. The Rock Island might just as well put it down there and put it in itself through its coordinated train service and we would get it down there quicker. We would actually get our freight quicker because it would not be interchanged with 2 or 3 other railroads. Surely there would be instances where more circuitous routes would be used. On the other hand, we think it should be left to managerial discretion to determine whether they want to participate in a rate from St. Jo, Mo., or from Cedar Rapids, Iowa, to Memphis, Tenn., over their circuitous route. If they think they can handle it and make money, that is their business.

Mr. DOLLIVER. What does that do, however, to the intermediate points?

Mr. STALEY. It doesn't do anything if this bill is passed. It will remain in status quo. It won't involve the intermediate points. You