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The proposal to make competition the magic password to avoid prior justification of lower rates for longer than for shorter distances over the same route practically amounts to an outright repeal. We oppose the amendment of section
Shippers have been given the protection of the aggregate of intermediate clause by paragraph (c) of rule 56 of the Commission's Tariff Circular No. 20, under which the rail carriers are authorized to reduce on 1 day's notice to the public and to the Commission to reduce any higher rate by a given route to the actual sum of the intermediate rates from and to the same points. This fundamental principle has been recognized for many years. It is very important to many shippers and involves substantial amount of money. Elimination of it would cast unnecessary procedural burdens on both shippers and carriers and in all probability would result in much costly and extensive litigation before the Commission and the courts.
There was more controversy about the long- and short-haul clause prior to the time the act was passed in 1887, and since that time than any other provision.
Highly organized and strenuous efforts of railroad and certain shipper interests to repeal the long- and short-haul clause have failed.
Its retention in the act is of vital concern to many areas of the country and important segments of our economy.
Therefore even any modification of it designed to meet present-day conditions merits careful consideration.
We oppose the amendment of the fourth section as proposed. Amendment of section 15
Under section 7 of H. R. 6141, a number of amendments to section 15 of the act are proposed. Section 7 (a) would take away the power of the Commission to prescribe maximum and minimum, or precise rates, so that the Commission could only prescribe either maximum or minimum rates, but not maximum and minimum rates. It appears that in the majority of outstanding rate orders, the Commission has prescribed maximum rates or minimum rates. In doing this, the Commission recognized that it was undesirable to make its orders more restrictive than necessary.
While the exercise of the power to prescribe specific rates has been used to a relatively lesser degree, it is a necessary power to be used ; in some cases involving the removal of undue discrimination or undue preference or prejudice; in the determination of joint rates (particularly in event of refusal by a carrier, or where carriers are unable to agree on the rate); in the establishment of competitive rates in specific situations involving either competition between carriers or competition between shippers, and also in the administration of the fourth section of the act.
We strongly urge that the power of the Commission to prescribe maximum and minimum or precise rates be retained and oppose section 7 (a) and all similar amendments. Amendment of section 15 (7), suspension of rates and charges
We oppose the provisions of paragraph (c), section 7 of the bill relating to the suspension of rates and charges proposed to amend paragraph (7) of section 15 of the act.
The proposed amendment reduces the suspension period from 7 to 3 months and would impose drastic and burdensome requirements as a prerequisite in obtaining a suspension of a tariff containing changes in rates or charges.
Briefly stated, changes in rates could be suspended only if the Commission determined on the basis of proof by a complainant or as a result of its own investigation that (a) the rate, charge, etc., is probably unlawful; (b) that it would result in injury; and (c) that other available remedies are inadequate.
Generally, changes in rates are filed 30 days before they become effective. The rules of the Commission require that protests be filed 12 days prior to the effective date; this would allow a complaining shipper only 18 days in which to conform with the proposed requirements that in many instances would be impossible to comply with within the limited time.
We contend that section 15 (7) be not changed as proposed. Procedural requirement incident to suspension should be left to the discretion of the Commission.
This amendment is definitely against the public interest because it would work an unwarranted hardship and be otherwise detrimental to many shippers in their efforts to protect their interests.
We oppose section 7 (c) of the bill. Amendment of section 15 (a)
The amendment of section 15 (a) of the act as proposed in section 8 of the bill is another matter of vital interest and concern to livestock associations and producers.
Our first objection is to the repeal of that part of the present section 15 (a) that requires the Commission “to give due consideration, among other factors, to the effect of rates on the movement of traffic by the carrier or carriers for which the rates are prescribed"; and the rest of the language.
Stated briefly, our objection is mainly on the grounds that a prohibition of consideration of the effect of rates on the movement of traffic is repugnant to effec. tive regulation of rates in the public interest.
Congress has recognized the value of that principle in ratemaking in the passing of the Hoch-Smith resolution and in the act of 1940, as stated in section 5 (b):
"The Interstate Commerce Commission is authorized and directed to institute an investigation into the rates on manufactured products, agricultural commodities, and raw materials, between points in one classification territory and points in another such territory, and into like rates within any of such territories, maintained by common carriers by rail or water subject to part 1 of the Interstate Commerce Act, as amended, for the purpose of determining whether said rates are unjust and unreasonable or unlawful in any other respect in and of themselves or in their relation to each other, and to enter such orders as may be appropriate for the removal of any unlawfulness which may be found to exist : Provided, That the Commission in its discretion may confine its investigation to such manufactured products, agricultural commodities, and raw materials, and the rates thereon as shippers thereof may specifically request be included in such investigation.”
A carrier by refusing to join in through routes and joint rates to dictate the markets or places from which shippers on its line must purchase, or to limit the territory in which industry on its line must sell or to otherwise restrict fair competition (Continental Roll & Steel Foundry Co. v. Pennsylvania R. Co., 201 I. C. C. 747).
Furthermore, a desire of certain carriers serving particular mines to force the use of coal which they originate an inability for initial and destination lines to agree on divisions do not afford sufficient justification for refusal to become parties to joint rates (Western Kentucky Coal Bureau v. II. Cent. R. CO.. 194 I. C. C. 91–102), and finally the question of the establishment of joint rates is held to be a matter of public concern and one that is not limited to the mere interest of the contending parties (Kansas City Missouri River Navigation Co. v. Chesapeake & Ohio Ry. Co., 34 I. C. C. 67),
We oppose the amendments proposed in paragraphs 1, 2, 3, and 4 of section 8 of the bill and all similar amendments in other sections of the bill.
However, we favor the purpose of paragraph (5) of section 8, designed to accord no more favorable rates on Government traffic than that accorded to shippers generally, except that for security reasons the filing, posting, and publication of tariff and contracts could be waived. Amendment of section 13, Service Deficits
We favor the extension of the scope of section 13 (3), to authorize or permit diseontinuance or curtailment of railroad service or facilities subject to control or jurisdiction of any State agency where found to constitute any undue burden on interstate and foreign commerce. This amendment is designed to afford an effective means by which deficit services may be substantially reduced.
The service deficits attributed principally to passenger service represent a terrific drain on the revenues of the rail carriers. In 1955 it amounted to over 630 millions of dollars. Efforts through committee action and other means have failed to produce any marked results.
It appears that legislative action is necessary.
However, we oppose paragraph (b) of section 6 insofar as it prohibits the Commission from prescribing just and reasonable a maximum and minimum, or a precise rate, as may be required in the public interest in any given case.
In closing, we contend that the statutory tools provided under the present act, as amended, are fundamentally necessary to enable the Commission to further
coordinate the transportation services of the various types of carriers according to their inherent advantages and to effectively protect and promote the public interest.
There is no emergency in transportation. Carriers of all types appear to be enjoying substantial volume of traffic. The railroads especially so--they appear to be chiefly concerned with an adequate car supply to handle business.
Time must be allowed to permit a gradual and orderly adjustment to changing conditions.
The experience gained by the Commission in almost 80 years of its existence and its many thousands of decisions, many of which had the benefit of review by the courts, should not be scuttled or cast aside for drastic changes couched in vague and indefinite language in an attempt to implement a new philosophy that gives questionable promise of wholesome and sound results. In fact, these amendatory bills appear to carry too much sail and too little anchor.
If the new philosophy on which H. R. 6141 and similar bills are based were given legal effect, it would unstabilize all modes of transport and be detrimental to orderly coordination of the various modes of transport, lead to disruption of the uniform classifications rate structures and rate relations on competitive commodities, and otherwise disrupt and obstruct equitable rate adjustments hetween competing shippers.
We appreciate the opportunity to submit this statement.
STATEMENT OF EDWARD (). BOSIIELL, PRESIDENT AND CHAIRMAN OF THE BOARD,
WESTINGHOUSE AIR BRAKE CO. My name is Edward (. Boshell. I am chairman of the board and president of the Westinghouse Air Brake Co., Pittsburgh, Pa. I am also the elected chairman of the Railway Progress Institute, "the voice and the promotional arm of the railway supply industry.” This institute is the successor organization to the 47-year-old Railway Business Association,
As part of your record, I would like to file herewith a list of the officers, executive committee and governing board of the institute and their business affiliations, together with a list of members as of May 1, 1956 ; and a copy of the institute's constitution and bylaws, which includes the organization's credo.
RAILWAY PROGRESS INSTITUTE, CHICAGO, ILL.
OFFICERS E. O, Boshell, chairman; C. L. Heater, vice chairman; Holcombe Parkes, president; T. A. Nooner, Jr., secretary-treasurer.
GOVERNING BOARD *E. 0. Boshell, chairman and president, Westinghouse Air Brake Co. A. D. Bruce, president, Vapor Heating Corp. Muscoe Burnett, Jr., vice president, National Carbon Co. division, Union
Carbide & Carbon Corp. W. A. Callison, vice president, Alco Products, Inc. John D. Cannon, president, Morton Manufacturing Co. 'R. A. Carr, president, Dearborn Chemical Co. John F. Corcoran, vice president, Union Asbestos & Rubber Co. *N. C. Dezendorf, vice president, Electro-Motive division, General Motors Corp. Samuel M. Felton, president, American Car & Foundry division, ACF Indus
James G. Lyne, president, Simmons-Boardman Publishing Corp.
Max K. Ruppert, president, Poor & Co.
MEMBER COMPANIES AS OF MAY 1, 1956
Brake Shoe & Castings Division
Southern Wheel Division
Unit Truck Corp.
Allied Steel Castings Co.
Commonwealth Sales Corp.
Cardinal Suppy Co.
•Members of the executive committee.
Johns-Manville Sales Corp.
Magnus Brass Manufacturing Co.
Baltimore Foundry & Machine Corp.
The P. & M. Co.
The Peerless Equipment Co.
Standard Railway Equipment Manufacturing Co. (Canada), Ltd.
Linde Air Products Co.
National Carbon Co.
American Bridge division
United States Steel Supply division
Air Brake division
Union Switch & Signal division