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unduly burdens or will burden interstate commerce, is supported. Although the ICC has authority under section 13 to permit the abandonment of a complete line whether interstate or intrastate, it does not extend to a situation where discontinuance of unprofitable passenger operations only, is sought. The courts have stated that it is up to Congress to correct this situation (R. 961).

INTERSTATE COMMERCE COMMISSION

(Anthony F. Arpaia) The Commission has no objection to the enlargement of the scope of section 13 to include State service requirements that fail to authorize discontinuance or curtailment of railroad service within 180 days after an application for such authority, since Congress can restrain undue limitation upon the earning power of the interstate commerce system in doing State work (R. 265-266).

NATIONAL COAL ASSOCIATION

(F. F. Estes) There should be immediate enactment of legislation granting to the Interstate Commerce Commission authority to allow railroads to abandon passenger service, both interstate and intrastate, which places an undue burden on interstate commerce. So long as the users of freight service must pay for unprofitable services through higher freight rates prescribed or approved by the ICC, the same Commission should have authority to approve abandonment of unprofitable rail service. There would then be hope at least that the users of freight service might obtain some semblance of relief from high freight rates (R. 866–867).

PROPERTY OWNERS COMMITTEE

(William N. Maddox) This proposal is supported. It has long been recognized that it was necessary for the Commission to have authority over intrastate rates on freight traffic when such rates result in an undue burden on interstate commerce or when such rates are unduly preferential and prejudicial to intrastate and interstate commerce, respectively. It is also felt that the same kind of authority should be granted relative to passenger trains which are incurring enormous deficits each year (R. 1068).

TRANSPORTATION ASSOCIATION OF AMERICA

(George P. Baker) The Commission should be given the power, on appeal from adverse orders of State authorities, to authorize discontinuance of rail services which are a burden upon interstate commerce because they are being carried on by interstate carriers at a financial loss. This power should be based upon the same reasoning which accounts for the Commission's power over intrastate rates in section 13 (4). The adoption of the proposal is of paramount importance if vital seyments of the transportation industry are to be maintained in a sound, solvent position. The ICC should be given jurisdiction when a State commission failed to act within 120 days (R. 358). Additional proponents

A. E. Staley Manufacturing Co., T. C. Burwell (R. 1272).

American National Cattlemen's Association, Lee J. Quasey (R. 1816).

Equitable Life Assurance Society of the United States, Ilunter Holding (R. 1847).

Grand Rapids (Mich.), Chamber of Commerce, C. E. Elerick (R. 1718).

National Council of Farmer Cooperatives (R. 1691).
National Industrial Traffic League, William H. Ott (R. 945).

National Live Stock Producers Association, Lee J. Quasey (R. 1816).

National Wool Growers' Association, Lee J. Quasey (R. 1816).

United Fresh Fruit & Vegetable Association, Durward Seals (R. 1122-1124). Opponents AMERICAN BARGE LINES, INC.; COMMERCIAL BARGE LINES, INC.; COMMERCIAL TRANSPORT CORP., INC. ; UNION BARGE LINE CORP.

(J. Haden Alldredge) A significant change is proposed in section 13 of the act relating to the service requirements of State authorities where they are alleged to impinge upon Federal responsibilities. There is a serious question as to whether by changing the standard of reasonableness in section 1 of the act, the new law, if passed, would not actually curtail the Federal power in this area. State statutes largely reflect the present rate requirements of the Interstate Commerce Act that is, the State regulatory commissions may (and must when their jurisdictions are properly invoked) fix the exact or precise rates to be charged by common-carrier railroads. With such a change in the Federal standards of reasonableness as contemplated by these bills without corresponding changes in the State laws, or under the restrictions on the Interstate Commerce Commission's jurisdiction orer the level of interstate rates, it is not difficult to imagine the beginning of extensive litigation before this subject could be clarified (R. 1700).

NATIONAL ASSOCIATION OF RAILROAD AND UTILITIES

COMMISSIONERS

(Walter R. McDonald) In 1949 the association set up a passenger deficit committee to make findings and recommendations to aid both the carriers and the public in solving this important problem. In 1952 the committee made its first report, reviewing the causes and extent of the losses. competitive factors, and defects in handling the problem by both carriers and State commissions. Other reports were subsequently made which reflect an awareness by the State commissions of their responsibilities in regulating passenger train services, and these alone

should convince this committee that there is no need for the proposed extension of section 13.

A study in 1951 revealed that over 1.200 class I passenger trains, or 24 percent of total passenger train miles, were onerating unprofitably. It has also been found that transportation of United States mail, express, and baggage car shipments, and the operation of dining cars, restaurants, and hotels, classified as "allied services," have accounted for more than half of the recorded passenger deficit. It is important to note that large measure of these losses can be laid at the door of the Federal Government, which does not indicate that the deficit situation will be improved by further intervention of Federal agencies.

The State commissions bitterly resent the contemplated further invasion of States rights. They can perform a better service to the people of the United States in this field than can the ICC, whose guidance is based only on cold, bare statistics. The cooperation of the ICC in our past efforts has been lacking. It has now instituted an investigation into the passenger-deficit problem, and while it is not believed that the investigation will add significantly to the results of the association study, the latter will cooperate willingly.

It is submitted that approval of the proposal would be premature until the pending investigation is completed and a full report made (R. 1836-1839).

NEW ENGLAND GOVERNORS' COMMITTEE ON PUBLIC TRANSPORTATION

(Donald W. Campbell) Disapproval is expressed of the proposal to empower a Federal agency to override State law and regulations. In lieu thereof, a reexamination of the statutes by each New England State is recommended, with a view to the elimination of statutory or regulatory provisions which, in the light of present conditions, may properly be deemed unreasonable and unduly burdensome on the railroads (R. 861).

NORTH DAKOTA PUBLIC SERVICE COMMISSION

(John M. Agrey) Existing remedlies within the States for the discontinuance of unprofitable rail passenger service is entirely adequate, if the railroads will avail themselves of it (R. 795).

PUBLIC SERVICE COMMISSION OF WISCONSIN

(A. Wilford Larson) The instant bill proposes to enlarge jurisdiction of the Interstate Commerce Commission with respect to the discontinuance of passenger service within the States. The Wisconsin commission takes the position that final jurisdiction in such matters should remain with the States. Passenger-train operations are local in character, and the needs of the public can best be evaluated and determined by a State agency. The proposed changes would not be in the public interest (R. 518).

RAILWAY LABOR EXECUTIVES' ASSOCIATION

(G. E. Leighty) The association does not believe that the additional power contemplated by this proposal should be granted to the Interstate Commerce Commission. The problem involved in closing railroad stations or eliminating schedules is local in character and must be solved in the light of local conditions and needs (R. 761). Additional opponents

Atlanta Freight Bureau, C. B. Culpepper (R. 1235). Brotherhood of Locomotive Engineers, Guy L. Brown (R. 1683). Brotherhood of Railroad Trainmen, W. P. Kennedy (R. 762). Montana Citizens Freight Rate Association, Lee Metcalf (R. 825). Order of Railway Conductors and Brakemen, R. O. Hughes (R. 762).

Sears, Roebuck & Co., John C. Allen (R. 1453).

XIII. TRANSPORTATION FREE OR AT REDUCED RATES FOR GOVERNMENTAL

PURPOSES

Provisions of Interstate Commerce Act

Section 22 of the Interstate Commerce Act provides, among other things, that nothing contained in part I of the act (relating to the regulation of railroads, certain water carriers, oil pipelines, and express and sleeping-car companies) shall prevent the carriage, storage, or handling of property free or at reduced ratesfor the United States, State, or municipal governments or the transportation of persons for the United States Gorernment free or at reduced rates

The provisions of section 22 are made applicable to common carriers by motor vehicle by section 217 (b), to common carriers by water by section 306 (c), and to freight forwarders as to transportation or service in the case of property by section 405 (c) of the act. Amendments proposed by H. R.525, H. R.6141, and H. R.6149

H. R. 525 would amend section 22 of the act by striking out the words "for the United States, State, or municipal governments," and the words “or the transportation of persons for the United States Government free or at reduced rates."

Section 9 (a) of H. R. 6141 and H. R. 6412 would also amend section 22 of the act by striking out the words "for the United States, State, or municipal governments," and the words “or the transportation of persons for the United States Government free or at reduced rates."

Section 8 of H. R. 6141 and H. R. 6142 would provide, among other things, for a section 15 (a) (5) authorizing the establishment of rates, fares, charges, and rules and regulations of special application for transportation service to the United States, State, and municipal governments by carriers subject to the act. Such rates would be subject to all of the applicable provisions of the act except those relating to suspension and the long-and-short haul clause. Under certain cir cumstances, the rates could be filed on short notice, or made retroactive, and the filing, publication, and posting requirements of the act could be waived where the security of the United States required such waiver.

Section 9 (b) of H. R. 6141 and H. R. 6142 contains a savings clause preserving the legality of rates, fares, or charges for transportation service rendered prior to the amendment of section 22 by section 9 (a) and requires that outstanding contracts providing for such rates, fares, or charges shall be filed and published as provided in the new section 15 (a) (5). Purpose of amendments

The purpose of the amendments made by H. R. 525 is to prohibit common carriers from granting reduced rates for the transportation of Government property or personnel, except to certain minor respects.

The purpose of the amendments made by H. R. 6141 and H. R. 6142 is to remove the present authority under which common carriers may establish reduced rates for Government traffic, and provide authority for carriers to establish, subject to certain terms and conditions, rates of special application for such traffic. T'estimony

DEPARTMENT OF DEFENSE

(Earl B. Smith)

GENERAL SERVICES ADMINISTRATION

(Edward F. Mansure, Herbert K. Hyde, and C. N. Smull) The Departments indicated views with respect to H. R.525 and H. R. 6141 and to companion bill H. R. 6142, each of which proposed changes to the Interstate Commerce Act as it pertained to rate provisions on Government traffic. Specifically, H. R. 525 proposed the complete abolition of section 22 of the Interstate Commerce Act insofar as it authorizes, by carriers subject to the act, free or reduced rates on traffic of the United States Government. H. R. 6141 and H. R. 6142 in section 9 (a) provided for the amendment of section 22 to eliminate the provisions authorizing free or reduced rates for freight and passenger traffic of the United States, State, or municipal governments. They further provided in section 9' (b), a saving clause to maintain in effect the validity of any free or reduced rates or charges heretofore made available by carriers subject to the act on traffic of the United States, State, or municipal government (p. 213).

Section 8 of H. R. 6141 and H. R. 6142 proposed to repeal section 15 (a) of the Interstate Commerce Act and substitute in section 15 (a) (5), a provision which would authorize the establishment, maintenance and publication and application of rates, fares, charges, rules, and regulations of special application for transportation to the United States, State, and municipal government by carriers subject to the act. Section 8 also provided that such rates, fares, charges, rules, and regulations shall be subject to all provisions of the act except, (a) suspension, (b) when conditions involving the security of the United States justifies a waiver, (c) section of the act shall not apply, and (d) they may be filed on short notice or made retroactive, where the circumstances so warrant (p. 213).

The recommendation of the Government to the committee was that H. R. 525 not be favorably reported (p. 213) and that H. R. 6141 and

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