able restrictions by the Republic of Panama on the use of the highway by United States Government vehicles.

It appears that operating costs would be reduced substantially through the use of motor vehicles, especially if construction of the new highway is avoided and the present transisthmian highway is utilized instead. The use of motor ve hicles should also result in a reduction in the number of United States rate employees and consequent reductions in the various employee services, including housing, required to support such employees.

VII. TRANSPORTATION BY CIVILIAN AGENCIES OF THE GOVERN MENT

Recommendation No. 20

"(a) That existing laws be modified to provide that civilian agencies now exempted from central traffic management by the General Services Administration be no longer so exempted, except for the movement of the mails or for the movement of security-classified goods.

"(b) That the Administrator take the necessary steps to improve the quality of traffic management throughout his organization.

"(c) That the Administrator advise the President as to which agencies should maintain tariff files and where these files should be located."

Several bills have been introduced in the 84th Congress, apparently designed to implement part (a) of recommendation No. 20. See, in this connection, H. R. 6563, H. R. 6854, H. R. 7337, S. 2366, S. 2476, and related proposals. As stated in a report which we made, concerning H. R. 6563, to the chairman of the Committee on Government Operations of the House of Representatives, on June 27, 1955, we believe that centralized control and operations of traffic management functions, and policies related thereto, should result in more uniformity and economy and should serve to eliminate certain duplications inherent in the present arrangements for the performance of those functions. A copy of that report is attached, together with a copy of our letters of June 29, 1955, and July 22, 1955, concerning H. R. 6854-a similar bill-in which certain suggestions were made as to the possible effect of section 602 (d) of the Federal Property and Administrative Services Act of 1949 upon the proposals there under considera

tion.

We believe that giving effect to the recommendations in (b) and (c) above will do much to improve the quality of traffic management through the General Services Administration.

VIII.

NATIONAL TRANSPORTATION POLICY, RATES, AND AGENCY REPRESENTATION

Recommendation No. 21

"(a) That the national transportation policy, as set forth in the Interstate Commerce Act, the Civil Aeronautics Act and the Merchant Marine Act, be studied and revised by the Congress to make it more definite and detailed. When this is done the Government in its capacity as a user of transportation should conform to that policy with respect to its commercial-type traffic.

"(b) That after negotiated rates for Government traffic have been fixed, they immediately be made public except to the extent precluded by national security considerations.

"(c) That the regulatory agencies as necessary, make proper rules and regulations pertaining to movement of classified Government property.

"(d) That regulatory agencies dealing with transportation be authorized to request the Department of Defense and the General Services Administration, and these agencies be required to furnish, unclassified facts and statistics to assist them in the performance of their functions."

With reference to (a) above, and in order to set in its proper perspective the quotation shown on page 94 of the Commission's report, there is quoted below our letter of October 19, 1954, (B-102080) addressed to the chairman, Committee on Transportation, of the Commission on Reorganization of the Executive Branch of the Government.

"Reference is made to your letter of September 9, 1954, concerning the statement of the national transportation policy, as contained in the Interstate Commerce Act, and the discussion of that policy which appears in a letter from this Office to the Administrator of General Services, dated April 13, 1951, B-102080, and in Senate Report No. 2034, on the supplemental appropriation bill, 1955, H. R. 9936, 83d Congress, 2d session. After calling attention to these matters,

you request the opinion of this Office on two specific questions, with an explanation of the reasons why the indicated position is taken by this Office, if such questions are answered in the affirmative. Those questions are:

"1. Do traffic managers for the Federal Government have responsibilities under the national transportation policy which require that they carry out their duties in a manner different from the manner in which they would act if the national transportation policy did not exist?

""2. Is the following a reasonable interpretation of Acting Comptroller General Yates' position?:

""Enforcement of the national transportation policy is not the function of traffic managers of the Federal Government."'

"These questions, in the form stated, seem necessarily to presuppose that traffic managers for the Government are charged with some duty to enforce the national transportation policy so declared. However, no explicit statutory provision imposing such a duty upon them has been found and the consideration given the question of enforcing the policy in decided court cases seems rather to support the view that it was intended to guide the operation of regulatory bodies, such as the Interstate Commerce Commission, in their efforts so to regulate carriers as to result in the establishment of an adequate and efficient transportation system, fair to all types of regulated surface carriers and to the general public as well. In this connection, the Transportation Act of 1940, 54 Stat. 898, 899, which enacted the national transportation policy in amending the Interstate Commerce Act, declared it to be the policy of the Congress '* * * to provide for fair and impartial regulation of all modes of transportation subject to the provisions of this Act * *' and enumerated specific objectives, in substance, as follows:

"1. To recognize and preserve the inherent advantages of each mode of transportation.

"2. To promote safe, adequate, economical, and efficient service.

"3. To foster sound economic conditions in transportation and among the several carriers.

"4. To encourage the establishment and maintenance of reasonable charges, without unjust discriminations, undue preferences or unfair or destructive competitive practices.

"5. To cooperate with duly authorized State officials.

"6. To encourage fair wages and equitable working conditions in the transportation industry.

The closing sentence of the national transportation policy, as enacted, reading 'All of the provisions of this Act shall be administered and enforced with a view to carrying out the above declaration of policy,' indicates that the stated policy is an integral part of each of the ensuing subdivisions, or parts, of the act and must be read as if written separately into each of the several parts.

"The role of the national transportation policy in connection with determinations made by the Interstate Commerce Commission, has been the subject of comment in Interstate Commerce Commission v. Inland Waterways Corporation (319 U. S. 671), especially the dissenting opinion of Mr. Justice Black at pages 697703, McLean Trucking Company v. United States (321 U. S. 67), Eastern Central Motor Carrier Association v. United States (321 U. S. 194), and United States v. Pennsylvania Railroad Company (323 U. S. 612), all of which discuss the policy in more or less general terms and in relation to its impact upon the actions of the Interstate Commerce Commission in connection with its regulatory functions and duties. No mention is made in any of these cases of the effect of the stated policy on the actions of members of the other administrative branches of the Government in their dealings with carriers, and while it does not appear that any action or operation of officials of other administrative branches of the Government were involved in those cases, they do not appear to afford any expression of obligation upon shippers generally in that connection which would serve as a guide or direction to Government officials in the discharge of their duties as traffic managers.

"When other departments or agencies of the Federal Government deal with the carriers, they represent the Government usually as a shipper or user of transportation services, and their relationship to the carriers is comparable to the relationship of other shippers or users of such services to such carriers. commercial shipper, upon locating or establishing a new plant or facility to manufacture or process a product, becomes concerned with the problem of ascer taining whether satisfactory rates are available via carriers by rail, motor,

A

water, or otherwise, both on the raw materials inbound to, and the manufactured products outbound from, the new plant and in undertaking to procure the establishment of such rates, if they are not available. To this end negotiations may be undertaken with the carriers involved and if they are completed satisfactorily, the carriers ordinarily will initiate the necessary action to establish the proper rates by filing tariffs with the Interstate Commerce Commission, such tariff rates to become effective on statutory or other notice, subject to suspension or rejection for due cause by the Interstate Commerce Commission or other controlling regulatory body. Obviously the same process is available when a department or agency of the Federal Government initiates a new program authorized by the Congress, with the exception that if the negotiated rates are less than established tariff rates they may be made available in the form of 'Section 22' tenders or quotations, rather than in the regularly published tariffs to be filed with the Interstate Commerce Commission.

"As pointed out in the letter from this Office dated April 13, 1951, B-102080, to the General Services Administrator, it is difficult to understand how a Government traffic manager, engaged primarily in the procurement of transportation services, properly can give effect, in his day-to-day dealings with the carriers, to the provisions of the national transportation policy which require for their implementation consideration of such variable factors as the reasonableness of charges, the maintenance of sound economic relations in transportation and among the carriers, the prevention of unjust discrimination and destructive competitive practices-all as they may be affected by the particular transportation services which it is the function of the traffic manager to procure. The traffic manager ordinarily does not have readily available the vast amount of data concerning the financial structure of the carriers, their costs of operations, the value of their plant and equipment, the extent of their operations, their current earning position, and many other matters that seem pertinent to the proper enforcement of the national transportation policy. What might seem to one traffic manager or to one set of traffic managers as contributing to 'sound economic conditions in transportation' or as constituting ‘unjust discrimination or destructive competitive practices' might seem to another traffic manager or another set of traffic managers as constituting neither an unjust discrimination, nor a destructive competitive practice, nor as contributing to unsound economic conditions in transportation. The question as to what constitutes an unjust discrimination or a destructive competitive practice must be determined in the light of the pertinent surrounding facts in particular situations. In order that the prime objectives of the Interstate Commerce Act against unjust discrimination, unreasonableness, etc., may be attained uniformly in its administration, the courts generally have required that such matters, constituting administrative questions, be considered as primarily within the jurisdiction of the Interstate Commerce Commission for determination, in the light of the particular facts and circumstances involved. It is believed to be expecting too much to assume that traffic managers for the Government, operating in the widely unrelated fields in which the various departments of the Government have need for transportation services, peculiar to their individual requirements, would attain anything less than chaos in the acceptance or rejection of rate tenders, if the traffic managers are supposed to give effect to their individual ideas of what the national transportation policy requires in relation to the particular services, which it is their function or duty to procure.

"The discussion of the national transportation policy contained in Senate Report No. 2034 on the supplemental appropriation bill, 1955, has been carefully noted and considered. The question of Government appearances in connection with rate increase proposals was discussed in testimony before the Senate Committee on Appropriations by Mr. Edmund F. Mansure, Administrator of the General Services Administration, during hearings on H. R. 9936. Mr. Mansure was questioned by the committee with respect to the appearance of personnel of the General Services Administration before the Interstate Commerce Commission and other regulatory bodies in opposition to general rate increases sought by the carriers or utilities, and was asked to explain the authority for such activities. Mr. Mansure replied that such appearances were authorized and required by the provisions of paragraph (4), section 201 (a) of the Federal Property and Administrative Services Act of 1949, Public Law 152, 81st Congress, and he was granted permission by the committee to furnish subsequently a more complete explanation of such activities by the personnel of his agency. See, in this connection, pages 945 to 949, of the report of hearings before the Senate Committee on Appropriations on the supplemental appropriation bill, 1955,

H. R. 9936. In the material thus furnished, it was explained that since the Government is one of the largest, if not the largest, single user of transportation and utilities services, it was deemed right and proper that it be represented at proceedings before the regulatory bodies during the consideration of requests for general increases in rates and charges, so that it could furnish a proper evaluation of the effect of such general increases upon its costs in connection with future procurement programs. In other words, the Government as a shipper or user of the service should have its day in court' along with other shippers and users, and where proposed increases were considered excessive it did not seem improper for the Government to oppose the granting of the general increases sought by the carrier or utility. This position appears highly logical and in keeping with the terms and provisions of the cited Federal Property and Administrative Services Act of 1949. The General Accounting Office is without information warranting a conclusion that opposition by Government agencies to proposed general increases in rates has been undertaken solely because such increases, if made effective, would increase the cost of Government operations, though, of course, it agrees that such proposed increases should not be opposed solely to accomplish a saving of appropriated funds available to the several departments and agencies. The occasion for, and the extent of, the opposition by Government personnel to requests for general increases would seem to be a matter for the exercise of sound, informed, administrative judgment in individual cases. Abuses of discretion in any case will no doubt be properly adjusted when brought to the attention of the responsible officials in the departments or agencies involved. The General Accounting Office agrees, also, that the bargaining for rates or the playing off of one carrier against another by Government procuring officials, where it is known to the Government negotiators that such procedure is destructive of the ability of the competing carriers to function, is not justified. It is not understood, however, how administrative officials of the Government can assume to determine that rates voluntarily tendered by the carriers should be rejected because, in the opinion of Government personnel involved, the rates may not be sufficiently productive of profitable revenue.

"In view of what has been said above, the answer to the first specific question on page 2 of your letter is that the requirements of the national transportation policy are believed to be too comprehensive and indefinite to permit any satisfactory application by traffic managers for the Government in the discharge of their function in procuring transportation services. With respect to the second question, you are advised that it was and is the considered opinion of the General Accounting Office that traffic managers of the Federal Government are not charged directly with responsibility for the enforcement of the national transportation policy and that any attempt on their part to give it effect in procuring services at proper rates for the Government would result in uncertainty and confusion in the award of Government business, with understandable protest and objection from the carrier or carriers tendering rejected lower rates.

"Considering now your reference particularly to the last paragraph and last sentence of the letter of April 13, 1951, from former Acting Comptroller General Yates to the Administrator of General Services, it is proper to call attention to the fact, as stated in the first paragraph of that letter, that it was written in response to a request from the addressee for review of a proposed regulation and for advice 'as to concurrence or recommendations for changes and improvements therein.' It was in the light of the request so made that the letter of April 13, 1951, was written. The conclusion expressed in that letter with respect to the effect of the national transportation policy is considered proper and will be given effect by this Office in the audit and settlement of transportation accounts. Applying that conclusion, this Office will endeavor to see that payments made for services procured at reduced rates are audited in conformity with the reduced rates tendered and accepted. It will not assume to pass upon any question as to whether the rates so tendered are or are not in conformity with the declarations of national transportation policy for the reason that it considers that the determination of any such question requires a consideration of extensive pertinent factors for the evaluation of which it does not have the necessary facilities, and for the further reason that it does not have authority finally to resolve any question of transgression of the national transportation policy that may be involved. If aggrieved carriers who consider themselves unwarranted victims of a disregard of the national transportation policy, notwithstanding that the award of the Government business by reason of which they may consider themeselves aggrieved was made pursuant to specific statutory 78456-56-pt. 3-35

authority for them to furnish transportation for the United States at free or reduced rates, elect to contest the assumed violation, this Office considers that their protests or objections can be resolved finally and authoritatively only by reference of the question to the Interstate Commerce Commission or the courts." Whether observance of the national transportation policy is to be extended to nonregulatory agencies of the Government, of course, is a policy matter for the Congress. We believe it to be imperative if said policy be so extended that definite standards be established beyond which the nonregulatory agencies are not required to go as it is conceivable if the national transportation policy as presently stated in the Transportation Act of 1940 be extended it might be urged as comprehending disbursing and accounting officers and to be observed by those officials in the construction and application of legally published tariffs lawfully on file with the Interstate Commerce Commission.

Concerning recommendation No. 21 (b) above, the matter of making public so-called section 22 rates is still pending before the Interstate Commerce Commission in Er Parte 192 proceedings and in this connection as reported in the Traffic World of July 9, 1955, pages 15-18, the ICC examiner proposed certain rules respecting the filing of section 22 quotations with the Interstate Commerce Commission and quoting from the examiner's conclusions, the article states in part:

"In the examiner's opinion, the factual situations described of record, the Commission's obligations under the statute, and the principal problems of the parties, pro and con, would be amply accommodated, at least for the time being, by a rule which merely would require the filing of all section 22 quotations or tenders with this Commission at the same time that they are filed with the Government agency to which they are offered."

Respecting recommendations No. 21 (c) and (d) above, these appear to be matters for consideration primarily by the administrative agencies and appear to require no comment from us at this time.

STATEMENT BY LEE J. QUASEY, COMMERCE COUNSEL, ON BEHALF OF THE NATIONAL LIVE STOCK PRODUCERS ASSOCIATION, AMERICAN NATIONAL CATTLEMEN'S ASSOCIATION, AND NATIONAL WOOL GROWERS' ASSOCIATION

The above-named organizations are voluntary association of livestock producers, more particularly described, as follows:

The National Live Stock Producers Association is a cooperative association and represents approximately 555,500 livestock growers and feeders in the livestock producing areas of the country; it is primarily composed of 22 cooperative livestock associations that are engaged in selling and buying livestock on over 86 livestock markets and other points throughout the United States.

The American National Cattlemen's Association is a voluntary nonprofit organization of livestock producers of the United States with principal membership in the 18 Western States and executive office at 801 East 17th Avenue, Denver 18, Colo.

The National Wool Growers' Association is a voluntary nonprofit service organization sponsored and supported largely by woolgrowers' associations of the States of Arizona, California, Colorado, Idaho, Montana, Nevada, Oregon, Texas, Utah, Washington, western South Dakota, and Wyoming, with some individual members in other States, and executive office and post office address at 414 Crandall Building, Salt Lake City 1, Utah.

The livestock associations are opposed, except as otherwise indicated, to the amendments of the Interstate Commerce Act and proposed in bill H. R. 6141 and in similar bills relating to

1. We oppose the amendments of the national transportation policy (sec. 2). 2. We oppose amendments affecting the ratemaking powers of the Commission (secs. 7 and 8 and other sections containing similar provisions).

(a) To repeal the power to prescribe maximum and minimum, or precise rates;

(b) To prohibit the Commission from giving consideration to the effect of rates on the movement of traffic;

(c) To make competition a controlling factor in the determination of minimum rates and make the bare out-of-pocket cost the lowest limit without regard to the many other essential factors and considerations; and (d) Similarly to make fully distributed cost as the basis below which maximum rates could not be prescribed (secs. 7 and 8, and other related provisions).