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military shipments are not eligible for published commodity and exception tariff rates, which are lower than the overall class rates, since this military traffic does not coincide with the commercial traffic for which the lower commodity and exception rates are published. To require the Department of Defense to move its traffic on class rates would increase its freight costs. The Bureau recommends against the enactment of H. R. 525 (R. 28–29)..

DEPARTMENT OF JUSTICE

(Warren Olney III) H. R. 525 will greatly increase the cost of transportation to the Government, and in a way that will be inequitable when compared with the cost of normal commercial shippers. Studies by the Interstate Commerce Commission indicate that at the present time the general level of cost of Government shipping is higher than that of normal shippers. This is due to the frequent necessity of the military to ship at class rates in order to perform the military mission involved. In addition our investigations have shown that regulation of rates for shipments of military property by either Federal or State agencies will place a serious burden on the defense effort and disrupt the lines of supply in many instances, particularly in times of emergency (R. 27-28).

FREIGHT FORWARDERS INSTITUTE

(Giles Morrow) While the freight forwarding industry does not advocate any change in section 22 of the act, if faced with the alternative of complete repeal of that section, as provided in H. R. 525, or modification of the section as provided for in the omnibus bills, the forwarding industry would favor the latter (R. 1152).

GRAIN EXCHANGES AND RELATED ORGANIZATIONS AND INDIVIDUAL

FIRMS

(Walter R. Scott) H. R. 525 proposes to amend section 22 to eliminate the provision permitting railroads to carry persons or property for governments free of charge or at reduced rates. When originally enacted, government traffic comprised only a small part of railroad traffic. Among other things the Government is now the largest grain merchant and shipper in the country, and competes with the grain trade which protests the extraordinary business advantage resulting from section 22 rates (R. 597).

Reduced rates to the Government are unjust to private industries because the loss of carrier revenue must be made up by other shippers through higher rates on commercial traffic, and the reduced rates place the taxpaying private industries at a commercial disadvantage. The requirement that rates be published and not changed on less than 30 days' notice should apply to Government transportation as well as to commercial traffic. These organizations, as shippers, resent the secrecy which surrounds the application of section 22, and the desire of the railroads to maintain that cloak in order to cut rates at their whim without advising the private shipper.

It is suggested that H. R. 525 could be improved by adding the positive injunction that full commercial rates shall be paid to common carriers by the United States, as was done in repealing land-grant provisions (R. 599–600).

INTERCOASTAL STEAMSHIP FREIGHT ASSOCIATION

(Harry S. Brown) There are no logical reasons for a different ratemaking standard on Government shipments than on commercial shipments. The provisions of H. R. 6141 fall short of eliminating the abuses of section 22 rates. Instead, the enactment of H. R. 525, which would place the Government on a par with other shippers, is favored. If H. R. 525 cannot pass as it now reads, it is suggested that there be added to it a provision reading substantially as follows (R. 1050):

Section 22 of the Interstate Commerce is hereby further amended by adding the following proviso at the end of said section: "In time of national emergency the President of the United States is hereby authorized to issue to the Interstate Commerce Commission a directive, stating that such an emergency exists, and directing the Commission to issue an order waiving as to United States Government property or personnel, or such limited descriptions thereof as the President may specify, such provisions of the Interstate Commerce Act as the President may specify, and for such period of time as the President may specify. Upon receipt of such a directive, the Commission shall issue an order forthwith executing the President's directive.”

INTERSTATE COMMERCE COMMISSION

(Anthony F. Arpaia) In recent years there has been much justified dissatisfaction with the exemptions accorded to Government shipments by section 22, and that section should be amended. However, any special rates for the governments should be limited to apply only during time of war, or threatened war, or other national emergency, and such rates should be negotiated on a firm and unassailable basis.A study of this matter is warranted.

It is recommended that any change should appear in section 22 or 6 of the act, and for clarity the following wording is suggested in lieu of that proposed (R. 270-271):

The establishment, maintenance, publication, and application 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 this Act is hereby authorized. Such rates, fares, charges, and rules and regulations may be made retroactive where the circumstances so warrant, and shall not be subject to suspension or to the provisions of section 4, but shall be subject to all other applicable provisions of the Act: Provided, however, That the provisions of the Act with respect to filing, publication, and posting of tariff schedules and contracts may be waived where the security of the United States so requires upon the filing of an appropriate statement in writing with the Commission by the head of the Government agency concerned. Transportation services rendered by common carriers subject to the Act for such governments other than under rates, fares, charges, and rules and regulations of special application shall be subject to all the provision of the Act.

H. R. 525 to amend section 22 would in effect eliminate the granting of reduced rates for transportation of Government property or personnel, except in certain minor respects. Section 22 has remained substantially the same since 1887. With the repeal of the land-grant

statute in 1945, section 22 became the main vehicle through which special rates are obtained by the Government.

At the present time, section 22 quotations are filed with the Defense Department. Procurement officers examine bids for even the most inconsequential movements. The Government should pay the full tariff rates on property transported by it, the same as any other shipper. It is not believed, however, that complete elimination of the section 22 privilege would be equitable, or in the interest of national defense. Section 22 contracts should be binding on both parties, in the absence of fraud or clear error. Such amendments would to a great extent remove the cause of much of the present criticism of practices under this section. Three members of the Commission favor the enactment of H. R. 525. The majority, however, does not recommend its enactment at this time (R. 284-286).

INTERSTATE COMMERCE COMMISSION

(E. R. Jelsma) The 1 percent waybill statistics furnished by the Commission and upon which Mr. Smith of the Department of Commerce based his statement that Government rates paid under negotiation were 14 percent higher than the commodity basis of rates, are misleading. The fact that the section 22 level was somewhat higher than average comparable commodity rates is not unexpected in view of the different types of traffic involved. A substantial portion of the section 22 reductions apply where there is infrequent movement or movements in the opposite direction of established volume traffic. An exhibit (R. 303-306) based on a 30-percent representative sample of all bills of lading covering military carload traffic, June 1, 1951, through May 31, 1952, between points in transcontinental territory for which there was a movement of 1 million pounds or over of a particular commodity, shows 75 instances in which the section 22 rate was considerably lower than the otherwise applicable class rates (R. 301-302).

MOVERS CONFERENCE OF AMERICA

(James F. Rowan) Although the proposed section 9 would eliminate the provision for free or reduced rates on Government traffic, section 8 would modify section 15 (a) of the present act, by adding provisions which would (1) permit special tariffs applicable only to Government traffic and distinct from published general tariffs; (2) permit retroactive or short-notice publication of the special tariffs; and (3) deny the Commission the power to suspend and investigate such tariffs. Thus the Government procurement officers would be given a vested right to special concessions to the Government on all movements of Government traffic, whereas, under the present section 22 provision, the privilege of extending rate concessions to the Government rests technically with the carrier. There would be no relief from the unfavorable conditions which presently exist in connection with this problem (R. 901-902).

The Mover's Conference is for the total elimination of the special free or reduced rates privilege extended to Government traffic under

It is suggested that H. R. 525 could be improved by adding the positive injunction that full commercial rates shall be paid to common carriers by the United States, as was done in repealing land-grant provisions (R. 599–600).

INTERCOASTAL STEAMSHIP FREIGHT ASSOCIATION

(Harry S. Brown) There are no logical reasons for a different ratemaking standard on Government shipments than on commercial shipments. The provi. sions of H. R. 6141 fall short of eliminating the abuses of section 22 rates. Instead, the enactment of H. R. 525, which would place the Government on a par with other shippers, is favored. If H. R. 525 cannot pass as it now reads, it is suggested that there be added to it a provision reading substantially as follows (R. 1050):

Section 22 of the Interstate Commerce is hereby further amended by adding the following proviso at the end of said section : "In time of national emergency the President of the United States is hereby authorized to issue to the Interstate Commerce Commission a directive, stating that such an emergency exists, and directing the Commission to issue an order waiving as to United States Government property or personnel, or such limited descriptions thereof as the President may specify, such provisions of the Interstate Commerce Act as the President may specify, and for such period of time as the President may specify. Upon receipt of such a directive, the Commission shall issue an order forthwith executing the President's directive."

INTERSTATE COMMERCE COMMISSION

(Anthony F. Arpaia ) In recent years there has been much justified dissatisfaction with the exemptions accorded to Government shipments by section 22, and that section should be amended. However, any special rates for the gorernments should be limited to apply only during time of war, or threatened war, or other national emergency, and such rates should be negotiated on a firm and unassailable basis.A study of this matter is warranted.

It is recommended that any change should appear in section 22 or 6 of the act, and for clarity the following wording is suggested in lieu of that proposed (R. 270-271):

The establishment, maintenance, publication, and application 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 this Act is hereby authorized. Such rates, fares, charges, and rules and regulations may be made retroactive where the circumstances so warrant, and shall not be subject to suspension or to the provisions of section 4, but shall be subject to all other applicable provisions of the Act : Prorided, however, That the provisions of the Act with respect to filing, publication, and posting of tariff schedules and contracts may be waived where the security of the United States so requires upon the filing of an appropriate statement in writing with the Commission by the head of the Government agency concerned. Transportation services rendered by common carriers subject to the Act for such governments other than under rates, fares, charges, and rules and regulations of special application shall be subject to all the provision of the Act.

H. R. 325 to amend section 22 would in effect eliminate the granting of reduced rates for transportation of Government property or personnel, except in certain minor respects. Section 22 has remained substantially the same since 1887. With the repeal of the land-grant statute in 1945, section 22 became the main vehicle through which special rates are obtained by the Government.

At the present time, section 22 quotations are filed with the Defense Department. Procurement officers examine bids for even the most inconsequential movements. The Government should pay the full tariff rates on property transported by it, the same as any other shipper. It is not believed, however, that complete elimination of the section 22 privilege would be equitable, or in the interest of national defense. Section 22 contracts should be binding on both parties, in the absence of fraud or clear error. Such amendments would to a great extent remove the cause of much of the present criticism of practices under this section. Three members of the Commission favor the enactment of H. R. 525. The majority, however, does not recommend its enactment at this time (R. 284-286).

INTERSTATE COMMERCE COMMISSION

(E. R. Jelsma) The 1 percent waybill statistics furnished by the Commission and upon which Mr. Smith of the Department of Commerce based his statement that Government rates paid under negotiation were 14 percent higher than the commodity basis of rates, are misleading. The fact that the section 22 level was somewhat higher than average comparable commodity rates is not unexpected in view of the different types of traffic involved. A substantial portion of the section 22 reductions apply where there is in frequent movement or movements in the opposite direction of established volume traffic. An exhibit (R. 303-306) based on a 30-percent representative sample of all bills of lading covering military carload traffic, June 1, 1951, through May 31, 1952, between points in transcontinental territory for which there was a movement of 1 million pounds or over of a particular commodity, shows 75 instances in which the section 22 rate was considerably lower than the otherwise applicable class rates (R. 301-302).

MOVERS CONFERENCE OF AMERICA

(James F. Rowan) Although the proposed section 9 would eliminate the provision for free or reduced rates on Government traffic, section 8 would modify section 15 (a) of the present act, by adding provisions which would (1) permit special tariffs applicable only to Government traffic and distinct from published general tariffs; (2) permit retroactive or short-notice publication of the special tariffs; and (3) deny the Commission the power to suspend and investigate such tariffs. Thus the Government procurement officers would be given a vested right to special concessions to the Government on all

movements of Government traffic, whereas, under the present section 22 provision, the privilege of extending rate concessions to the Government rests technically with the carrier. There would be no relief from the unfavorable conditions which presently exist in connection with this problem (R. 901-902).

The Mover's Conference is for the total elimination of the special free or reduced rates privilege extended to Government traffic under

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