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whether the compensation, reward, or consideration is received directly or indirectly, through the device of leasing or renting vehicles, employment, the furnishing of drivers or other employees, or management services, the buying or selling of property, or in any other manner by which compensation, reward, or a consideration is received in return for the direction or control of or the responsibility for vehicles used in transportation by motor vehicle in interstate or foreign commerce."

The Commission explains that its recommended changes in the contract carrier definition, elsewhere in its letter, would have the effect of excluding various for hire or for compensation operations from both the common and contract carrier classifications. The first paragraph of section 203 (c) above, then, would altogether prohibit such operations in interstate commerce, since they would have no certificates of public convenience and necessity or permits. Thus, the Commission's proposals would create a new category of truck operations in interstate commerce-one that would be wholly prohibited.

A reading of the last paragraph of the proposed new section 203 (c) will show how difficult it would be to place any limit on what would constitute transportation for compensation, and therefore (a) common carriage, (b) contract carriage, or (c) that new category of always unlawful truck operation.

As a practical matter, it might make little difference to which of those three classifications a present "private carrier" could be shifted as a result of the amendments, since even if his operations were held to be common or contract it might prove impossible for him to obtain a certificate or permit.

We earnestly appeal to you, and your associates on the House Committee on Interstate and Foreign Comerce, to insist on maintaining "the primary business test" to oppose any tampering with it, and to stop in their incipiency these renewed attacks, which find expression in H. R. 6141 and the Commission's letter, upon the right of American industry to operate its own trucks in the bona fide course of its own nontransportation businesses.

Copies of this statement are being sent to the Interstate Commerce Commission, with the respectful request that the Commission reappraise and reconsider its recommendations here referred to.

Respectfully submitted.

JAMES D. MANN, Managing Director.

Mr. HARRIS. I am advised by the chairman of this committee that due to the primaries in several States on Tuesday of next week the executive session that had been called for that day will be postponed 1 day and will be held on Wednesday. Therefore, this committee will continue hearings on this subject on Tuesday morning. We will not meet on Monday.

It has been expected that a representative of the Railway Labor Executives Association will be here on Wednesday.

We will contact them and see if they cannot be here on Tuesday. Following the brotherhood witnesses will be the Association of American Railroads, which we hope to get to not later than on Thursday.

With that information, the committee will adjourn until 10 o'clock Tuesday of next week.

Mr. HALE. Mr. Chairman, may I say that I would be happy if the Association of American Railroads, in preparing their testimony, would direct some of it to this exact point of competition with the water carriers. I think that would be helpful to the committee.

Mr. HARRIS. Very well. The committee will now adjourn. (Thereupon, at 12:32 p. m., the committee recessed, to reconvene at 10 a. m., Tuesday, May 8, 1956.)

TRANSPORTATION POLICY

TUESDAY, MAY 8, 1956

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON TRANSPORTATION AND COMMUNICATIONS,
OF THE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE,

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. HARRIS. The committee will be in order.

We are resuming the hearings this morning on the transport policy and the bills to carry it out.

The first witness will be Mr. J. Carter Fort, vice president and general counsel of the Association of American Railroads.

I might say, for the record and for the information of those who are interested, it is hoped that we can conclude this week the testimony of the Association of American Railroads, the American Trucking Association, the Short Line Railroad Association, and the Railway Brotherhoods.

That constitutes quite a big order. The Chair hopes that he will have the cooperation of all interested in this objective.

Mr. Fort, you may proceed.

STATEMENT OF J. CARTER FORT, VICE PRESIDENT AND GENERAL COUNSEL, ASSOCIATION OF AMERICAN RAILROADS, WASHINGTON, D. C.

Mr. FORT. May it please the chairman and gentlemen of the committee, My name is J. Carter Fort, and I represent the Association of American Railroads.

You may recall that I appear for that association at the preliminary hearings which your committee held last September.

At this hearing, with the permission of your committee, we shall present two witnesses.

Our first witness will be Mr. Jervis Langdon, Jr., and I will follow him.

Mr. Langdon is chairman of the Association of Southeastern Railroads, and is a member of the law committee of the Association of American Railroads. He will appear here for the Association of American Railroads. His testimony will deal, generally speaking, with the ratemaking proposals of the Presidential Advisory Committee and with the provisions of H. R. 6141 implementing those ratemaking proposals, and particularly those proposals that have to do with competitive rates between different modes of transportation.

My testimony will deal with other features of the report and of the proposed legislation designed to assure a strong system of common carrier transportation, including such features as private carriage, contract carriers, the repeal of the dry bulk exemption for water carriers, the expansion of the authority of the Interstate Commerce Commission over the discontinuance of unprofitable passenger services and like matters.

With the permission of your committee, I will call Mr. Langdon as our witness at this time.

Mr. HARRIS. One of our colleagues has asked me to inquire if you intend to, Mr. Fort, also discuss the proposed bills, and the sections in the bill, and the transport policy, regarding section 22.

Mr. FORT. It is not our purpose to discuss section 22. The interests I represent take no position with respect to section 22 changes. Mr. HARRIS. Very well.

Mr. Langdon?

STATEMENT OF JERVIS LANGDON, JR., CHAIRMAN, ASSOCIATION OF SOUTHEASTERN RAILROADS, APPEARING FOR THE ASSOCIATION OF AMERICAN RAILROADS, WASHINGTON, D. C.

Mr. LANGDON. May it please the committee, my name is Jervis Langdon, Jr. I am chairman of the Association of Southeastern Railroads, with headquarters at Washington, D. C. I appear here today, however, for the Association of American Railroads by authority of its board of directors. That association is a voluntary, unincorporated organization including in its membership railroad companies operating more than 95 percent of the total railroad mileage in this country and having operating revenues which are more than 95 percent of the total railroad operating revenues.

My appearance is in response to the notice of these hearings dated March 26, 1956, which announced that your subcommittee will begin hearings Tuesday, April 24, 1956—

on H. R. 6141, and related bills, incorporating the recommendations made in the report of the Presidential Advisory Committee on Transport Policy and Organization.

It was stated in the notice

that the hearings represent a continuation of the preliminary hearings held by the subcommittee last September during the recess of the Congress, at which time an explanation of the report was made by the Advisory Committee members and by representatives of the four transport industries involved.

It seems unnecessary for me to undertake a comprehensive summary of this report or the recommendations contained therein. Your committee, as pointed out in the notice of these hearings, met during the recess of Congress last September and at that time the report was discussed and explained by members of the Presidential Advisory Committee and others, including a spokesman for the railroad industry. You have heard additional discussion and explanation during the course of these hearings. For me to summarize the report and its recommendations would be unduly repetitious.

1

During the September hearings 1 you invited representatives of the affected transport agencies "to comment upon the basic principles and proposals involved in the (Presidential Advisory Committee's) report." The railroad industry was represented on that occasion by Mr. J. Carter Fort, vice president and general counsel of the Association of American Railroads. He discussed various features of the report and undertook to support, with certain reservations, the general purposes and objectives of the Advisory Committee's several recommendations. His testimony was in large measure restricted, as indicated, to comment upon "basic principles and proposals" in accordance with the pattern of the preliminary hearings.

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3

It is not my purpose at this time to repeat unnecessarily the views of the railroads on the general aims and objectives of the Cabinet Committee report. The record of Mr. Fort's testimony, as well as that of all others who appeared before you during the recess hearings, has been printed and is available for examination and reference.

Furthermore, as we all recognize, the pattern of the present hearings differs from that of those conducted by your committee last September. You are considering now, in much greater detail than you did then, and individually, the several specific recommendations of the Advisory Committee as those recommendations are reflected in the two substantially identical bills, H. R. 6141 and H. R. 6142.

It will be the purpose, therefore, of those of us who appear for the railroad industry during the course of these hearings to deal individually with the specific proposals of the Advisory Committee for amendment of the Interstate Commerce Act, as implemented by the pending bills, and to indicate our support or opposition or lack of a position-with respect to each To some extent, of course, reference to the overall philosophy and objectives of the report will be essential to a complete understanding of the individual proposals.

In his letter transmitting the report of the Presidential Advisory Committee on Transport Policy and Organization to the President, its Chairman, Mr. Weeks, said:

In brief, the principal emphasis of our report is that, in conformity with today's availability of a number of alternate forms of transport, Federal policies should be amended (1) to permit greater reliance on competitive forces in transportation pricing and (2) to assure the maintenance of a modernized and financially strong system of common carrier transportation adequate for the needs of an expanding and dynamic economy and the national security.

To those two ends the Advisory Committee made a number of specific recommendations. With your permission I shall, in my testimony, deal exclusively with those recommendations in the report and features of the proposed legislation that fall within the first of the two categories so described, i. e., “greater reliance on competitive forces in transportation pricing" or, to put it another way, increased freedom in ratemaking by regulated carriers in competitive situations involving different modes of transportation. Mr. Fort, as he pre

1 See the printed record of hearings before a subcommittee of the Committee on Interstate and Foreign Commerce, House of Representatives, 84th Cong., 1st sess., on the Report of the Presidential Advisory Committee on Transportation Policy and Organization, September 19-22, 1955. 2 See notice of hearings dated August 2, 1955.

3 Id.

Revision of Federal Transportation Policy, a Report to the President, prepared by the Presidential Advisory Committee on Transport Policy and Organization, April 1955.

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