Mr. LANE. I think I understand the point that you are making, sir, and mine is purely a gratuitous opinion, and I do not know what it is worth.

I would say that, if the exemption that was first allocated to the agricultural interest in this bill was lived up to, we would not be here quarreling with the agricultural people.

The CHAIRMAN. No, but Mr. Tobin would if that legislation was before us; he would be here and the railroads would be here to strike out that exemption.

Mr. LANE. I guess the railroads would be here anyway.

The CHAIRMAN. I have a feeling that you might have an observation on that.

Mr. LANE. The farmer that you described that came here to Washington, if his return load was confined to products that were utilized by himself on the farm, thereby saving him the freight costs from Washington to his destination in Virginia, I could not get myself in a position to quarrel too much with that.

The CHAIRMAN. You see what is going on in my mind, Mr. Lane: the fact that you conceded to Mr. Hale that he could take back furniture to his neighbor; that is what created the thought in my mind.

Mr. LANE. The reason for that answer, sir, is the neighborhood that I was born and raised in, up there in New England, there was fine neighborly feeling. I do not know whether it is prevalent in the country today or not, but I assumed it.

Mr. WHEELER. May I make a statement, because you brought up the question, and that is that many of the people who are doing the farm hauling are not the farmers themselves. They are trucking companies that haul farm products and claim the exemption because of the fact that they are hauling farm products.

Now, if it was just the farmer that was hauling the product himself to market from Virginia or over here that would be one thing, but these people who haul melons and these people who haul the citrus fruits, they are professionals in the business, and they are not just farmers taking farm products to the market. That is one of the big problems in this whole thing, but they claim the exemption because of the fact that they are hauling farm products and then they are coming in and also claiming that when they haul fish they are also exempt because of that product.

The truth about it is that they are extending this far beyond the intention that was ever intended by the Congress of the United States when it passed. That is because the proposition was put up to us in the Senate by farmers coming in and saying they wanted to haul their milk and they wanted to haul their neighbor's products to market and perhaps bring some stuff back for their neighbors, and that was the reason that the exemption was given. But none of these people, or none of these farmers came in, or the farmers' representatives came in and testified before the Interstate Commerce Commission when this hearing was on, at all.

It was only after the hearing was all over when the Agriculture Department came in, and they came in largely, in my judgment, not from the legitimate farmer out in the country who was hauling his product to market but they came in at the instance of some of these trucking companies. But that is one of the bad features that I am

afraid we have not clearly got in mind when we are talking about the farm exemption.

The CHAIRMAN. It would seem no matter which way we went we could not satisfy everybody.

Mr. WHEELER. Of course not.

The CHAIRMAN. And after all, maybe in view of the fact that it is only interested parties that are testifying here, either for or against, maybe some of us ought to give a little bit of thought to the consumer side of this question and see what the effect is on him.

Are there any further questions?

Mr. HARRIS. I am glad the chairman brought to the attention of the committee this thought, because I brought it up with Mr. Tobin a little while ago, as you will recall, I think while you were out, Mr. Chairman. I brought up the question of these authorized carriers who owned no equipment at all and how they obtained their permit or certificate.

It was stated it was through the grandfather clause, partly, of the Motor Carrier Act, and, of course, nothing could be done about that unless the law was amended.

Second, that the ICC had certificated certain operators since then, and then we raised the question with Mr. Tobin at that time that apparently the ICC was on the one hand condoning the practice, and on the other hand coming to us with a report that we have here in which they were objecting to the practice. That was that the ICC had knowledge of that fact, and they were not, as I understood, certificating other such operators.

I was interested in that phase of it, too, and just how it may be approached I do not know. That is the reason that I also wanted to ask you, Mr. Lane, the question one step further than the question Mr. Hale asked you. He said a carrier in Virginia who took a truckload of perishables, as an example, to the New York market, and brought back fertilizer or furniture or some such product for the farmer, friend, or neighbor, that you would have no objection to that.

Now, suppose that same trucker should lease his equipment to you for you to send some manufactured product to the vicinity of Washington or Virginia, in order that he may have a back-haul movement instead of coming back empty, would you object to that?

Mr. LANE. No, sir.

Mr. HARRIS. You would not?

Mr. LANE. No, sir. In fact, we have used that type of service, and when that man performs that back haul for our company, we consider him our employee, and he is paid so much for the use of his truck and so much for his time and his services.

Mr. HARRIS. In other words, if I may put it this way, and certainly with no reflection on anybody, you are not opposed to the legitimate practice as was intended under the agricultural exemption provision? Mr. LANE. I have no objection to that.

Mr. HARRIS. For back-haul movement?
Mr. LANE. That is right.

Mr. HARRIS. But what you do object to is a trucker taking advantage of the exemption provision, carrying a truckload to the market and then from there he puts himself out to transport any place in the country?

Mr. LANE. That is right.

Mr. HARRIS. And becomes a competitor with the regulated carrier? Mr. LANE. That is what I object to. There is an instance that you have described and which was put very clearly, sir, where you are giving a man who was operating under an agricultural exemption many of the advantages of a common carrier with none of the drawbacks.

Mr. HARRIS. Well, I am somewhat impressed with that viewpoint myself, and I have given a great deal of thought to it. Evidently, there is a justification for what has been done, but when certain abuses develop, then, of course, attention should be given to it.

I am not familiar enough with the record to know, but I am just wondering why the ICC in the several years of study of this did not approach this problem in that way instead of what appears to me to be trying to circumvent the intention of Congress in giving legitimate exemption to farm produce. I would not ask you to comment on that because you are an operator.

Mr. LANE. Thank you.

Mr. HARRIS. But I am just reflecting that viewpoint, as the chairman has indicated a moment ago, that there should be some approach to these questions of abuses, because I saw the ICC report explaining the abuses that have come to their attention under the so-called guise of exemption that was given.

Do you think that, as a general policy, the leasing of motor equipment should be permitted? As a general public policy, do you think it is in the public interest?

Mr. LANE. I see no objection to it if there is some regulation. Mr. HARRIS. Who should be regulated, the man that owns the truck that he leases or the carrier who has a certificate to operate it? Mr. LANE. The carrier who has a certificate to operate it.

Mr. HARRIS. Under present law, is not that carrier regulated? Mr. LANE. Yes, but I think this amendment here is a result of that decision of the Supreme Court's tending to give the ICC a little more rigid control.

Mr. HARRIS. I disagreed with what I understood you to say, in answer to a question of Mr. Heselton a moment ago; it also nullifies completely the legitimate operator under this agricultural exemption provision.

Mr. LANE. Maybe I did not get the analogy correctly.

Mr. HARRIS. Either I do not understand what it will do or I have just got a misapprehension of it.

Mr. LANE. We have gotten this far, sir. I think that where the agriculture hauler carries a commodity from Virginia into New York and then if that hauler undertook to carry a load of general merchandise normally carried by a certificated carrier as a back haul, without any restriction whatsoever, that is the condition we are opposed to. You posed the other point, if he leased his equipment. Mr. HARRIS. That is by a certificated carrier without any regulation whatsoever.

Mr. LANE. I am talking about the agricultural man that is without the regulation.

Mr. HARRIS. When he goes and leases his equipment to that authorized carrier, then he becomes subject to the same regulations, does he not?

Mr. LANE. If he leases the equipment to our company, to a company, rather, and that company retains him solely and exclusively, yes, there is some modicum of regulation there; but where the controversy comes, where he might lease partially to me and partially to someone else, and a part load for me and a part load for someone else. Then where is the restriction?

Mr. HARRIS. I can see where there would be a problem there with respect to responsibility, but at the same time, if a true carrier of agricultural products to the market is required to lease that truck for a period of 30 days, then he is out of business, is he not?

Mr. LANE. As a farmer?

Mr. HARRIS. Yes. That truck, as far as it being available for the transportation of agricultural products is concerned?

Mr. LANE. I would think so.

Mr. HARRIS. He is out of business because the rule says it shall be the exclusive property of the lessor.

Mr. LANE. That is right.

Mr. SCHENCK. Then it does not come under the freight-forwarding situation and is not that also an ICC situation?

Mr. HARRIS. That also is subject to ICC regulation, but it gets into another complicated problem. I would not want to try to explain that.

Then you say the agricultural provision should be continued and the leasing policy should be continued, but as to this so-called operation of a carrier who owns no trucks and no equipment, something should be done about that?

The CHAIRMAN. Are there any further questions?

If not, that will be all, Mr. Lane. May I again express our thanks to you for the assistance that you have given the committee in dealing with this matter. It has been a very real help to us.

We will now hear Mr. Albert Evans.

STATEMENT OF ALBERT EVANS, GENERAL ORGANIZER OF THE INTERNATIONAL BROTHERHOOD OF TEAMSTERS

Mr. EVANS. My residence is at 2528 Ashurst University Heights, Ohio. I am a general organizer for the International Brotherhood of Teamsters, presently assigned to our Washington office.

I was a truckdriver from 1928 through 1938 and also elected secretary-treasurer of my own union, local union 407, of Cleveland, Ohio, in December 1938, a post which I held until December 31, 1948. On January 1, 1949, I went to work as a general organizer for the International Brotherhood of Teamsters.

As secretary-treasurer of my own local union, and as a general organizer for our international union, I have dealt with and represented freight drivers most of the time. Among these freight drivers were many people of the type affeced by the proceedings before the ICC known as MC43. These people own and operate their own truck under a lease arrangement, almost invariably a trip-lease arrangement with some person fortunate enough to hold an ICC certificate. In dealing with these people, I have been obliged many time to attempt to straighten out their accounts with various of the certificate holders for whom they had hauled loads. In these dealings, I quite

often was called upon to make a rather exhaustive study of their operations, particularly the financial dealings between the owner-operator and the certificate holder for whom he may have pulled a trip. I have yet to find an owner-operator who, after all the cost of the truck operation was deducted from his income, finally ended up with an amount equal with the prevailing union wage for himself, to say nothing of any return on his money invested in his truck.

As a result of this skimpy income, these people freely admitted to me that they could not continue to operate and own trucks if they did not overload, speed, drive way beyond the hourly limits provided by the ICC, and operate their equipment until it had deteriorated to the point of being dangerous on the highway, in an effort to keep the equipment from being repossessed.

These people were sold a bill of goods by some certificate holder who told them of the splendid income they would make if only they would buy a truck and go to work as an owner-operator. Since many of these operating companies have a working arrangement with some trucksales agency, between the blandishments of the truck salesmen and the urging of the certificate holder, many of these people bought a unit worth as much as $14,000 when it took the road. However, when explaining to them the fabulous income which they enjoy as a owneroperator, both the certificate holder and the truck salesman were cafeful to make no mention of what the cost of operating such a unit would be.

Just recently I read an ad in a newspaper in Cleveland promising an income in excess of $10,000 a year to anyone who would buy and operate his own truck hauling freight over the road. Any person accepting the offer in this ad is only placing himself at the mercy of truckless trucking companies who represent themselves as common carriers, but who have little or no equipment of their own to offer the shipping public.

They, however, solicit the service of owner-operators. The owneroperator realizing that the loss of only a few days' operation each month means all the difference between retaining and losing his equipment, is not inclined to haggle. He accepts whatever is offered him under whatever conditions it is offered him, being interested only in getting freight loaded on his truck, moving his load to its destination, unloading, and finding another load.

The trip-lease arrangement leaves the certificate holder with no control over the owner-operator, since many certificate holders thoughtfully provide shipping clerks, gas station operators, and restaurant owners with pads of blank trip-lease stickers, the deal is made over the telephone, the owner-operator is provided with a trip-lease sticker from one of these pads, he pulls the load, and after the bills are signed by the consignee, they are mailed back to the office of the truckless truck company, and a check for his share of the revenue is mailed to the owner-operator.

Some of these owner-operators do not destroy this trip-lease sticker after they have pulled the load, but use it as long as it is legible, soliciting loads on their own. Needless to say, these loads are not insured, nor is any liability insurance carried by the owner-operator on such trips. Under a trip-lease arrangement, no public liability insurance is carried by the owner-operator to cover him while he is