carrier competitors. As has been shown herein, the contract carriers under existing law are not in a position to conceal their rates from their competitors. There is no reason, therefore, for this amendment to the act.

To permit motor contract carriers to file in lieu of a schedule a copy of their actual contract for public inspection would be in violation of section 222 (e). The Commission in commenting on this amendment to the act recognized this fact and said:

In addition to the above, section 222 (e) now provides that it shall be unlawful for "any motor carrier" (which by section 203 (a) (16) includes motor contract carriers) knowingly to disclose or permit to be acquired by any person other than the shipper of the consignee any information concerning the nature, kind, quantity, destination, et cetera, of any property tendered or delivered to such carrier for transportation, which may improperly disclose his business transactions to a competitor. The receipt of such information also is made unlawful. Both the publication and posting of contracts and the publication of actual rates, if the names of shippers are shown in connection therewith would seem to be inconsistent with this provision.

The Contract Carrier Conference is opposed to section 12a (a) of H. R. 6141 not only because the amendments are unnecessary, but also because they provide for a method of rate filing which would clearly be in violation of other provisions of the act.

The conference is also opposed to amending section 218 of the act so as to make contract carriers subject to section 217 of the act, as provided in section 12 (a) of the bill. Such an amendment would give the Commission power to prescribe "nondiscriminatory rates and charges" for contract carriers. To give the Commission power to prescribe nondiscriminatory charges would be inconsistent with the definition of a contract carrier and the regulations which the Commission has imposed on such carriers.

Section 2, part I of the interstate Commerce Act makes it unlawful for a rail carrier to unjustly discriminate between shippers. What constitutes unjust discrimination has been passed upon by the courts and the Commission. A consideration of these decisions and the law and regulations governing contract carriers clearly shows that the concept of unjust discrimination is incompatible with contract

carriage.

In Wight v. U. S. (167 U. S. 512 (1897)), the Baltimore and Ohio Railroad offered a shipper a rebate to compensate for drayage costs in an effort to attract the shipper's business from another railroad which had a siding at the shipper's plant. In condemning the practice as an unjust discrimination, because the rebate was not offered to all shippers, the court stated (p. 517):

Whatever the Baltimore & Ohio Co. might lawfully do to draw business from a competing line, whatever inducements it might offer to the customers of that competing line to induce them to change their carrier, is not a question involved in this case. The wrong prohibited by the section is a discrimination between shippers. It was designed to compel every carrier to give equal rights to all shippers over its own road and to forbid it by any device to enforce higher charges against one than another.

The definition of a contract carrier requires that the service offered must not be held out to the general public. This being true such carriers could not lawfully "give equal rights to all shippers" because they are prohibited by law from serving all shippers.

In U. S. v. Hanley (71 Fed. 672, 673 (N. D., Ill., 1896)), the cour in passing upon the question of unjust discrimination stated:

The language of the statute recognizes that a uniform rate between different shippers is not always possible or proper; that the time of service, the kind of traffic, and the circumstances and conditions under which it is transported may materially change the just obligations and duties of the carrier to his patrons. Equality and uniformity of rate, disassociated from considerations of the time, kind, and circumstances of the transaction, is, therefore, not the object aimed at. The object of the statute is to prevent one shipper from getting the advantage over his competitor in the matter of rates only where they both make substan tially a like offering to the carrier.

It is apparent from the statement of the court in the Hanley case, supra, that every difference in rates does not constitute an unjust discrimination, but that such discrimination only exists when the transportation performed and the circumstances surrounding the transaction are substantially the same.

If the service performed by a contract carrier is to be as special and individual as required by the new definition, then, it would not appear that substantially the same service would be required by any other shipper. It would seem, therefore, that by the very nature of the contract carrier's individual service that it would not be able to unjustly discriminate between shippers even though it might be charging different shippers different rates.

In the Matter of Restricted Rates (20 I. C. C. 426, 437), the Commission in finding certain rates to be unjustly discriminatory stated:

The tariffs which contain rates applicable only to the shipments of certain consignees or when a commodity is put to a particular use and the rates which are so restricted to the use of certain shippers alike are in violation of section 2 of the act, and unjustly discriminatory in violation of section 3 of the act, and therefore unlawful.

The Commission in issuing permits to contract carriers has restricted the service to certain classes of shippers, and has imposed restrictions which limit the transportation of certain commodities to a specified type of business or class of consignee. When rates are published pursuant to such permits the application of the rates must be so restricted. It would appear that rates so published by a contract carrier would be discriminatory through no fault of the carrier.

It is apparent from a review of court and Commission decisions, that the concept of unjust discrimination, and that of contract carriage, are entirely inconsistent. This is true because the prohibition against undue discrimination is designed to require carriers who serve the public to treat all shippers alike under the same or similar circumstances, whereas, the law and regulations governing contract carriers are designed to limit the service offered to a particular class or classes of shippers and receivers. The conference, therefore, opposes that part of section 12 (a) which would make contract carrier rates subject to section 217.

Section 12 (b) of the bill would amend section 218 (b) part II of the act by (1) substituting the words "this act" for the words "this part" and (2) striking from the second sentence of the paragraph the requirement that the Commission in prescribing rates for contract carriers give due consideration

to the effect of such minimum rate or charge, or such rule, regulation, or practice, apon the movement of traffic by such carriers.

Under the existing law only the provisions of part II of the act apply to contract carriers. The first amendment to section 218 (b) would make it necessary for the Commission, in prescribing a contract carrier rate, to give consideration to the rates of all forms of transportation subject to the jurisdiction of the Interstate Commerce Commission. Such requirement is not only unnecessary but in direct conflict with other provisions of the bill. It is unnecessary because there is little or no relationship between the rates charged by contract motor carriers and those charged by railroads, water carriers, and freight forwarders. It is in direct conflict with other provisions of the bill because in section 2, which is a restatement of the national transportation policy, it is clear that free enterprise, full competition, the reduction of economic regulation, and the encouragement of fair and impartial regulation are all to be encouraged.

Mr. Jervis Langdon, Jr., appearing on behalf of the Association of American Railroads, supported the restatement of the national transportation policy alleging that competitive forces in rate making "constitutes the cornerstone of a modernized regulatory program." To assure the increased reliance on competitive forces this witness suggested that the Commission be directed not to consider the effect of a prescribed rate on the traffic of any other mode of transportation.

The conference does not endorse the Cabinet Committee report, the restatement of the national transportation policy, or the position of the Association of American Railroads, but if all other forms of transportation are to be given a "free rein" in ratemaking, and the Commission is not to consider the effect of such rates on other forms of transportation, then the contract carriers feel they are entitled to the same opportunities and should not have their rates prescribed on the basis of the rates of other forms of transportation.

As heretofore pointed out, the change in the definition of a contract carrier would place such carriers in direct competition with private carriage and would practically eliminate the competition between common and contract carriers. If the contract carrier is to successfully compete with the private carrier it must be in a position to institute rates which are competitive with the cost of private transportation and the Commission in considering the reasonableness and lawfulness of such rates should be in a position to give consideration to the effect of prescribing a rate on the movement of the traffic by the contract carrier. Otherwise, the Commission might very well arbitrarily prescribe the common-rail-carrier rate for the contract carrier, and such rate, in all probability, would have no relationship to the cost of private carriage and would, in all probability, prohibit the movement by contract carriage. This type of economic regulation, to which the private carrier is not subjected, would preclude contract carriers from substituting their services for private transportation and since the proposed definition limits the contract carrier to this type of service the changes in the ratemaking rule would have the effect of destroying the contract carrier industry. As previously indicated, section 12 (a) would require contract carriers to file their rates and charges, and no reference is made to any obligation on the part of a contract carrier to file a minimum rate or charge. Yet, under subsection (b) of section 12, the Commission would only be permitted to prescribe a minimum rate for a contract

carrier if it "finds that any minimum rate or charge of any contract carrier is unlawful." Obviously, if a contract carrier is under no obligation to file a minimum rate or charge with the Commission, it would be impossible for the Commission to find such minimum_rate or charge to be unlawful. It would appear, therefore, that the Commission under the language of the bill would never be able to make the necessary jurisdictional finding, in order to prescribe a rate for a contract carrier.

Section 12 (c) of the bill would change the suspension powers of the Commission over the rates of contract carriers in much the same way as other sections of the bill would change the suspension powers of the Commission over other carriers. Even though this section of the bill is designed to speed up the regulatory process the conference is opposed to it for the reasons stated by the Commission and the American Trucking Associations, Inc. Most rate litigation arises as the result of the Commission suspending rates. The issues involved in such litigation are often complex questions of law, fact, and administrative policy, and while it is of importance to have such cases completed as quickly as possible, it is of greater importance to have them decided wisely. We do not believe that any substantial number of these cases can be decided in 3 months' time, the suspension period provided for in this section. The conference, therefore, is opposed to this amendment.

Section 24 (a) would require all contract carriers, within 180 days. after passage, to advise the Commission in writing whether they desired to continue operations as a contract carrier or operate as a common carrier, and the Commission would have the power to issue to the carriers either a confirmed or amended permit or a certificate of public convenience and necessity. We believe that if any change is made in the definition of "contract carrier" which tends to eliminate carriers who operate in this class, a procedure should be set up which will enable them to obtain common carrier authority without proving public convenience and necessity. This section, however, goes far beyond protecting those carriers who may not fit the new definition, for it makes all contract carriers file the statement of intention and thus place in litigation the status of their permits. The Commission may change its permit even if there is no question as to the carrier meeting the new definition. The conference objects to this provision because it will place a great financial burden on many carriers, and put in jeopardy their permits without any valid reason for so doing. There are relatively few contract carriers whose present operations are even questioned and it would certainly serve no useful public purpose to subject them to the expense and hazards of making new filings with the Commission as provided in this section.

We recognize the need for a strong common-carrier transportation system, and believe that such a system has not only been developed, but is enjoying and has been enjoying for a number of years a high degree of prosperity. We do not believe that the contract carrier industry has to be hamstrung or destroyed, in order to assure the growth and improvement of the common carrier transportation

System.

The late Mr. Fort in his statement submitted two tables designed to show that the railroad industry is not handling as large a percent

age of the Nation's traffic as it handled in the past. This would almost seem to be axiomatic considering the fact that for many years the railroads had no competition. Be that as it may, table I attached hereto which shows specifically the ton-miles transported by contract carriers and the percentage which it bears to the whole shows clearly that the contract motor carriers have not made any inroads on the traffic handled by rail. This table shows that the contract carriers from 1939 to 1954, the last date for which figures are available, have never enjoyed as much as 1 percent of the total traffic transported, and that in the year 1939 the contract carriers enjoyed a larger percentage of the whole than in any year since that date.

Table II attached hereto compares the ton-miles transported by rail carriers with that transported by private and exempt carriers. These carriers, who need no operating authority from the Commission and who are not subject to rate regulations by the Commission, have enjoyed a consistent growth except for the war years, the ton-miles operated have increased from 33,175 million in 1939 to 145,341 million in 1954, their percentage of all ton-miles operated has increased from 6.1 percent in 1939 to 12.9 percent in 1954. Unregulated for-hire and private carriers have undoubtedly benefited by the regulation of both contract and common motor carriers, but the contract carriers have suffered because they have not grown as much as might be expected in an expanding economy such as the Nation has enjoyed for the past. 16 years. If the rail carriers get all the business now handled by contract carriers it would not increase the percentage of the whole by as much as 1 percentage point. Therefore, if the railroads, whose tonmiles transported has almost doubled from 1939 to 1955, consider that they need new legislation to put their competitors out of business, it would seem that the contract carriers are a poor target at which to aim.

In H. R. 6141, it is proposed to amend the definition of contract carrier by motor vehicle so that those carriers would only be permitted to compete against private carriers and then only to compete against that type of operation in the event the private carriers service was a specialized or individualized service.

At this point I would like to emphasize that the contract carrier business actually is a private business. They are not public utilities as the railroads or the common motor carriers, and actually the only constitutional basis for regulating contract carriers at all is the fact that their business does have some effect on the railroads and common motor carriers who, in turn, of course, are public utilities.

By this amendment, the contract carrier would practically be taken out of competition with the common carrier. He would be put in direct competition with the private carrier. Therefore, of course, the effect which his business could possibly have on that of the railroads or the common motor carriers would be no greater than the effect which the private carrier has upon those modes of transportation.

It would seem, therefore, that if the definition were to be amended as here suggested, the other regulatory features applicable to contract carriers would be relaxed, and at this point, Mr. Chairman, I would like to point out that Mr. J. Carter Ford, who is now deceased, in appearing before this committee, seemed to take the position that the contract carriers were practically an unregulated industry. That is