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rounding the service rendered, each contract differs somewhat in respect to both tangible and intangible factors upon which the charges are computed, such, for example, as distance, time, number of men required for reasons of security, the bulk or mass of the shipments (whether in silver, bills, securities, or valuable objects), the amount of insurance requisite, the terrain, accessibility, and risk to other shipments.

The specific services may be divided into the following general groups:
(1) Payroll work;
(2) Bank work;
(3) Department and chainstore service;
(4) The servicing of currency exchanges ;
(5) Brokerage office work; and

(6) Miscellaneous, such as the servicing of amusement places, ball parks, race tracks, and sporting events.

(1) PAYROLL WORK Broadly speaking, this service falls into the following three major categories:

(a) That in which our member actually draws the money from the bank, places it in the employees' individual pay envelopes in cash, and either delivers said filled pay envelopes to the customer to be distributed by its own representatives or itself distributes the filled pay envelopes to the customer's employees under armed guard.

This type of service is rendered in countless instances in paying mine and mill employees, and munition and shipyard employees, where the mines or plants are in outlying districts and where payment of the workers by check would work inconvenience and hardship.

There are almost endless ramifications to this type of service. Among such ramifications which require varying charges by our members are the use of special pay envelopes, some much more difficult of handling and filling than others; special inserts in the pay envelopes which require additional handling; the insistence by some customers upon use of larger or smaller denominations of bills, which necessitates a different degree of handling; the insistence by some customers that $2 bills be used or not used, as the case may be ; and the insertion in some instances of social-security cards, some rather complicated, which consume additional time in the making up of pay envelopes. It must be manifest that it wonld be quite impossible to make provision in tariffs for such almost innumerable refinements.

Not only is that true, but it would be equally impossible to make provision for the new payroll procedures which are of almost daily occurrence.

(6) That in which the employees are paid by check but in which the armored car takes cash to the plant and, where desired, cashes the checks under armed guard.

In many instances the employer makes no provision for the cashing of the checks, and our member cashes such checks for the employees at a nominal charge to each employee for the time spent in rendering the service.

(c) That in which our member draws money from the bank that is denominated as to coin and currency so as to permit the customer to adequately fill pay envelopes to meet its cash payroll, which money is then delivered to the customer's place of business.

(2) BANK WORK This phase of the business falls into numerous classifications such as (a) taking money and bonds to and from the Federal Reserve banks from and to member banks; (b) taking money and securities from bank to bank; (c) taking money and securities between main banks and branch banks; (d) taking money, checks, drafts, money orders, etc., from stores or other business establishments to banks: (e) taking "change" from banks to department and chainstores or to amusement places, etc.; (f) handling checks, drafts, cash letters, letters of transmittal, etc., between banks and clearinghouses; and (9) picking up or delivering registeredmail shipments.

As a part of this service, our members install safes in the customer's places of business which can be opened only when both the member and the customer are present with their respective keys. Constructively, the money contained in these safes is at all times in the custody of our member.

* Through a slot in the top of the safe the receipts can be dropped by the customer from time to time during the day.

(8) DEPARTMENT AND CHAINSTORE SERVICES As already indicated, the major activities of our members in this classification are the delivery of currency and coins for "change" at the opening of business and the gathering of receipts at or near the close of the day's business.

(4) SERVICE FOR CURRENCY EXCHANGES The "currency exchange” is an institution existing in larger cities such as New York, Chicago, Philadelphia, Detroit, Indianapolis, and St. Louis. It does not have the status of a "bank” but functions as a convenience for the people in cashing checks, selling money orders and travelers checks' receiving payments of public-utility bills, handling the matter of automobile licenses, etc. These institutions do not have adequate facilities to handle or retail large sums of money over long periods under protection and hence require a continuous service by armored cars.

(5) BROKERAGE OFFICES This service consists of the handling of securities and cash from brokerage offices to banks or to other brokerage offices, or to post offices or railway-express offices.

(6) MISCELLANEOUS SERVICES Under this general heading may be listed the services rendered to and for theaters, amusement places, racetracks, sporting events, and the like. For the most part it is a service for "change” and “receipts” similar to that afforded department stores.

SUMMATION I take occasion, in bringing toward a close this description of the services rendered by the members of the association, to make it plain that while the types of service so rendered fall into a relatively few general categories or classifications, there is so great a variety to the measure or quantum of each service that it would be utterly impossible to describe all of them with specificity in a published common-carrier tariff. For example, when entering into contracts with their customers, our members must, of necessity, take into consideration the amount of time spent in a given service. Yet, in performing for a host of customers what may seem on its face to be the same service, our member may and does spend amounts of time which range from a few minutes to hours. The same is true of waiting time at a customer's place of business. There is the further fact that the time devoted to a particular service differs radically at different times of the day, different days of the week, and in different parts of the same city. The service performed during the morning and evening rush hours and on certain days of the week and during certain seasons of the year is usually more diffi'ult and time-consuming than the same service when performed during the normal and usual "off" hours of the day, and the service performed in the congested business areas of large cities is invariably more difficult and time-consuming than a similar service in outlying areas. Then, too, one service may be rendered in a part of a city or at a certain time of the day which obviates any unusual hazard, whereas the same service when rendered in another part of the city or at an unusual time of the day or night may be so extremely hazardous as to require additional guards in each vehicle employed.

To the uninitiated, all these factors may seem to be of scant importance, but the fact is that they bulk large in the making of service charges. So too do the varying number of armed employees and increased insurance coverage required in given instances because of the degrees of hazard and risk involved, as well as many other factors that must necessarily be taken into account in arriving at the contract service charge. They can be evaluated by the armored-car operator and they can and do enter into the fixing of minimum schedules, but we can envision no way in which each of them could be successfully made the subject of an individual charge in a published tariff.

And yet, as I have said, the proposed amendment of the definitions of common and contract carriers by motor vehicle, when combined with the election of status proposed by section 24 (a) of this bill, could quite possibly operate to force our members to operate as common carriers and therefore to set forth all their charges in a published tariff. The very thought of it is appalling.

There is the further fact that the very nature of the business conducted by the association's members makes it imperative that they should not be placed in

the position of holding themselves out to serve the general public. Through the years they have consistently reserved to themselves the exercise of judgment as to whom they will serve. In pursuance of the exercise of their judgment, our members have refused their services where the hazard of strike violence was great, where the danger of floods, tornadoes, and other disturbances of nature were imminent, where investigation of a prospective customer showed him to be a suspicious or undesirable character, or where the services might facilitate the commission of a crime. They could not thus refuse if the status of a common carrier were forced upon them by the proposed statute, and the safe conduct of their respective businesses would be jeopardized. Most assuredly this would be contrary to the public interest and should not be permitted-far less forced in the manner made possible by the proposed amendments.

Still another factor which precludes the association's members from occupying the status of common carriers is the vital necessity for secrecy in their operations. The passage through the streets and over the highways of cargoes of great value is an open invitation to attempted holdups. Every conceivable precaution must be and is taken to prevent them. Our members go to such lengths, for example, as regularly altering the routes followed by their cars and periodically changing the membership of crews on given runs in order to discourage collusion. But if our members were forced to publish tariffs they would find themselves constrained, in order to obtain fair remuneration for the myriad services performed, to publish in one form or another the most intimate details of the contracts with their customers and thus to lose the secrecy and security surrounding the contracts. Valuable information hitherto held secret might well fall into the wrong hands, and this could readily result in a large loss, burglary, or robbery. It is for this very reason that our members are excused by various State regulatory bodies and by the Commission from filing contracts. It would be singularly unfortunate if, without complaint from anyone, they should be forced as common carriers to do what they are relieved of doing as contract carriers.

It may be thought by some that our members are unduly apprehensive of the possibility that under this bill they might be found by the Commission to be common carriers, with all the aforementioned obligations of common carriers. But analysis of the proposed requirements of section 12 (a) will reveal that our members would be placed in a singularly unfortunate position even if under the proposed section 24 (a) they should be found by the Commission to be contract carriers. This is because, even as contract carriers, they would be forced to file, publish, and post actual, rather than minimum, rates, fares, or charges for their services, or, in the alternative, to file, publish, and post contracts covering such transportation. Hence they would be unable to avoid the very tariff publication which, as I have already said, would present a literally insurmountable obstacle to operation as common carriers. Nor would they be able to aroid barring the operating details of their respective businesses to everyoneincluding the criminal elements from which they should be by all means scrupulously concealed. Under the proposed bill there could not possibly be that secrecy of operation which is so vital to the members of our association.

Neither can it be overlooked that if the Commission's proposed substitute for section 10 (b) of the bill were found acceptable by the Congress-even if under the proposed section 24 (a) no change were made by the Commission in the contract-carrier status of armored-car operators—the members of our association would be restricted to service for, at the very most, "a limited number of persons.” But the very nature of the business conducted by the members of our association makes it plain that such a restriction would be a distinct disservice to the public interest.

CONCLUSION

Our members, manifestly, are not the pseudo-contract carriers which have caused difficulty in Federal regulation. Instead, they are engaged in their unique operations "under individual contracts or agreements." Their operations do not resemble common carriage and do not impinge upon the operations of common carriers. And there is no disposition on the part of our members to evade any of their responsibilities as contract carriers. They wish simply to bear their responsibilities unhindered. Perhaps the best evidence that our members do not seek to be unduly favored is found in their cheerful compliance, from the very beginning, with the requirements of the Commission's decision in Contracts of Contract Carriers (1 M. C. C. 628), that is, they transport under written codtracts or agreements which provide for transportation for particular customers, and the contracts are bilateral and impose specific obligations upon both operator

and customer, over a series of shipments during a stated period of time, and are preserved for the required period.

Nor will it ever be the purpose of uor members to resent any reasonable laws, rules, or regulations. The Commission has long recognized the peculiar character of the ouerations of our members, as evidenced by its decision in United States Trucking Corporation Contract Carrier Application (30 M. C. C. 41; 42 M. C. C. 841), we merely ask now that nothing be done which could bring a withdrawal of that recognition.

We take no position in regard to the operations of the conventional common carriers or contract carriers by motor vehicle; we do urge that in simple justice to our industry the changes which we here oppose should be rejected by the Congress unless adequate provision is made for exemptions which will leave the armored-car industry in status quo. By such provision the public interest will continue to have protection. If our position is altered, as contemplated by this bill, grave injury will inevitably result to the armored-car industry and to the general public interest. Respectfully submitted.

NATIONAL ARMORED CAR ASSOCIATION, INC., By EUGENE E. MURPHY,

VERIFICATION STATE OF ILLINOIS,

County Cook, 88: Eugene E. Murphy, being duly sworn, deposes and says: That he is the general counsel of the National Armored-car Association, Inc.; that he has read the foregoing statement, and knows the contents thereof; that the same are true as stated, except as to matters and things, if any, stated on information and belief, and that as those matters and things, he believes them to be true.

EUGENE E. MURPHY. Subscribed and sworn to before me, a notary public in and for the State and county above-named, this 18th day of June 1956. STATE OF ILLINOIS, County of Cook, ss :

FRANCIS D. PARTLAND, Notary Public.

STATEMENT OF MOULTRIE HITT, COMMERCE ATTORNEY FOR GAINESVILLE MIDLAND

RAILROAD Co., GEORGIA & FLORIDA RAILROAD, TENNESSEE, ALABAMA & GEORGIA RAILWAY Co., CONCERNING THE PUBLIC INTEREST IN PRESERVING REASONABLE THROUGH ROUTES AND JOINT RATES IN CONNECTION WITH SHORT LINE RAILROADS

My name is Moultrie Hitt, and my address is 718 Southern Building, 15th and # Streets NW., Washington 5, D. C.

Am an attorney at law and a member of the bar of the courts of the District of Columbia, and the Supreme Court of the United States; and am a lawyer practitioner before the Interstate Commerce Commission.

Before becoming an attorney at law I had many years of railroad service in the executive and managerial departments of three class I steam common carrier railroads, and as secretary of the General Managers Association of the Southwest, and in creating and aiding in the conduct of the Short Line Railroad Association of the Southeast, which later became the American Short Line Railroad Association,

Am familiar with the history of the Interstate Commerce Act, especially as amended by the Transportation Acts of 1920 and 1940, especially in respect to the relation of the national transportation policy to short line railroads.

Most of my clients have been, and are, independent short-line railroads, who I represent in connection with matters before the Interstate Commerce Commission.

This statement is addressed to the proposition that additional legislation is imperatively needed in order to call an effective halt to the ill-advised cancellation of through routes and joint rates presently in progress by the Southern Railway system lines as an example.

The Southern Railway contends that in most instances the present limitations in paragraph 4 of section 15 cannot prevent the cancellation of throngh routes and joint rates which do not afford it its long haul. That contention seems unsound in the light of the decision in U. 8. v. Great Northern (343 U. S. 562),

which holds that the limitations in paragraph 4 applies only when the Commis sion is acting under paragraph 3 to establish new through routes and joint rates, but that contention should be set at rest by an appropriate amendment or amendments removing the limitations on the power of the Commission to require the establishment of reasonable new through routes and joint rates, as well as to prevent the cancellation of such routes which presently exist.

The particular language which is italicized in the following quotation from the presently existing paragraph 4 of section 15 should be excised:

"(4) In establishing any such through route the Commission shall not (epoept as provided in section 3, and except where one of the carriers is a water line) require any carrier by railroad, ucithout its consent, to embrace in such route substantially less than the entire length of its railroad and of any intermediate railroad operated in conjunction and under a common management or control therewith, which lies between the termini of such proposed through route, (a) unless such inclusion of lines would make the through route unreasonably long as compared with aonther practicable through route which could otherwise be established, or (b) unless the Commission finds that the through route proposed to be established is needed in order to provide adequate, and more efficient or more economic transportation: Provided, however, That in prescribing through routes the Commission shall, so far as consistent with the public interest, and subiect to the foregoing limitations in clauses (a) and (), give reasonable preference to the carrier by railroad which originates the traffic. No through route and joint rates applicable thereto shall be established by the Commission for the purpose of assisting any carrier that would participate therein to meet its financial needs. In time of shortage of equipment, congestion of traffic, or other emergency declared by the Commission, it may (either upon complaint or upon its own initiative without complaint, at once, if it so orders, without answer or other formal pleadings by the interested carrier or carriers, and with or without notice, hearing, or the making or filing of a report, according as the Commission may determine) establish temporarily such through routes as in its opinion are necessary or desirable in the public interest."

The said excision from paragraph 4 of section 15 is substantially the same as has heretofore been recommended by the late Joseph B. Eastman as Federal Coordinator of Transportation and, repeatedly, by the Interstate Commerce Commission.

In connection with this statement I want to show some examples with which I am familiar as commerce attorney for three short-line railroads which are presently the victims of aggression by the great Southern Railway system with more than 7,500 miles of main track. These three short lines must continue to be participants in through routes and competitive joint rates in order to continue to efficiently serve the public convenience and necessity. Briefly summarized, the salient facts in these examples are as follows:

(1) The Gainesville Midland Railroad Co. onerates some 42 miles of main line between Athens, Ga., and Gainesville, Ga. The region between these points is dependent upon it for railroad transportation (Gainesville Midland RR. CO. Acquisition and Operation, 221 I. C. C. 1; and I. & S. 6089, 241 I. C. C. 253, 256),

Gainesville, Ga., the most important community to the Gainesville Midland is an important commercial business and industrial community and is a trading center for north Georgia. It is served by both the Southern Railway and the Gainesville Midland Railroad.

When the Gainesville Midland Railroad was in receivership undergoing reorganization the Southern Railway, cognizant of its public convenience and necessity and pursuant to its then enlightened traffic policy, voluntarily helped to preserve this short line by opening to it participation in through routes and joint rates. Recently, however, the Southern Railway has rerersed that policy, and to close such routes has filed new tariff schedules which do not include the Gainesville Midland as a participant in through routes and competitive joint rates.

In justification of its change of policy the Southern Railway makes general contention that economy and efficiency require that the traffic it handles be concentrated in channels which will yield it the longest hauls and greatest revenue, regardless of the adverse effect upon the Gainesville Midland. It is upon that theory that the Southern Railway has attempted, for example, to close routes against participation by the Gainesville Midland on traffic from a paper mill located at Mead, Ga., near Maron. That mill is directly served by both the Central of Georgia and the Southern Railway, and it customarily divides its outbound traffic between these two originating lines.

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