think its exercise more crucial than in United States v. Pennsylvania R. Co. The enforcement of only one phase of the act was there endangered; here, practically the entire regulatory scheme is affected by trip-leasing.

"A fair analogy appears between the conditions which brought about the motor carrier act and these sought to be corrected by the present rules, confirming our view of the Commission's jurisdiction."

The court considered the exemption in section 203 (b) (6) of “motor vehicles used in carrying property consisting of ordinary livestock, fish (including shell fish) or agricultural (including horicultural) commodities (not including manufactured products thereof), if such motor vehicles are not used in carrying any other property or passengers for compensation," and the arguments of some of the appellants, particularly the Secretary of Agriculture, that the rules would drastically reduce the significance of this section, in violation of the intent of Congress. With respect to this argument the court stated as follows:

"We are unable, however, to conclude that the economic dangers to the agricultural truckers from these rules constitutes a violation of § 203 (b) (6). The mere fact that commercial carriers of agricultural products will hereafter be required to establish their charges on the basis of an empty return trip is not the same as bringing them within Commission jurisdiction generally. The exemption extends, by its own words, to carriage of the agricultural products, and not to operations where the equipment is used to carry other property. Needless to say the statute is not designed to allow farm truckers to compete with authorized and certificated motor carriers in the carriage of nonagricultural products or manufactured products for off-the-farm use, merely because they have exemption when carrying only agricultural products. We can therefore find nothing in its which implies protection of agricultural truckers' right to haul other property, even though from an economic standpoint that right is important. Regulated truckers must also receive protection upon their restricted routes and limited carriage. A balance between these competing factors, carried out in accordance with congressional purpose, does not seem to us unreasonable or invalid."

As indicated above, the arguments in favor of permitting trip-leasing are largely economic. The vehicles of exempt commodity carriers, itinerant owneroperators, and private carriers provide a pool of equipment available to regulated carriers, even those owning substantial numbers of vehicles, during periods of emergency or peak demand, for which no investment is required and for which no maintenance facilities need be provided. The use of such equipment reduces the empty mileage, not only of private carriers and itinerant owner-operators, but also of authorized carriers which have been granted certificates or permits to transport in one direction only. Such authorities were granted generally to transport particular classes of commodities, upon evidence which justified only the one-way grant. When such carriers later attempt to obtain authority to haul in the reverse direction, they are met by the determined opposition of other carriers in the field, and it is seldom that a need for the additional authority sought can be found to exist. With respect to haulers of agricultural commodities, particularly perishables, it is undoubtedly true that a substantial business has been developed, dependent upon such haulers obtaining return loads of general commodities to their points of departure.

As mentioned in part above, the arguments against permitting trip-leasing of owner-operated equipment are that careful inspection and examination of such equipment and of the drivers' logs, physical condition, and qualification are almost impossible when equipment is leased for a single trip because such inspection and examination consumes too much time. Control over drivers of such equipment is lax, and such drivers are careless in observing company operating requirements, schedules, and routes. On a long haul to his home base, such a driver is inclined to use a route shorter than the one to which the lesseecarrier is restricted. At times when there is an overabundance of agricultural haulers and owner-operators competing for return loads, it is impossible to prevent their exploitation by the authorized carriers. Their utilization in any important degree at such times affords an opportunity to beat down the rate structure to the detriment of the carriers which do not utilize such equipment. Conversely, when the supply of such equipment is short, carriers which depend on it are at the mercy of the owners and may find themselves unable to meet the demands of their customers. The unwillingness of such owner-operators to transport other than solid truckloads leads to a concentration of such traffic with the carriers which utilize their services, tending to a diversion of the less profitable, less-than-truckload freight to the carriers which do not utilize owner

operated equipment. Enforcement of the Commission's safety rules and hours of service is much more difficult in the case of drivers hired for a single trip. The lessee-carriers do not have the same supervision over the drivers of such equipment and the equipment itself, as they do in the case of their own employees and vehicles and those of owner-operators hired on a long-term basis.

We believe that the rules and regulations prescribed by the Commission are sufficiently flexible to enable us to strike a proper balance between the competing factors, that they are necessary, and that they will not impose too great a burden on the carriers. In this connection it should be pointed out that these regulations are subject to ready amendment in the event of any emergency.

For the reasons discussed above we do not recommend the enactment of H. R. 3203.

DEAR MR. WOLVERTON: Under date of March 5, 1953, you submitted to me for comment a bill, H. R. 3203, to amend the Interstate Commerce Act so as to prohibit the Interstate Commerce Commission from regulating the duration of certain leases for the use of equipment by motor carriers, and the amount of compensation to be paid for such use.

This Department supports the proposed legislation. Under it, we believe that the economical and highly efficient system of motor-carrier distribution of the products of agriculture developed during the last 20 years can be retained. There are throughout the United States literally thousands of motor carriers specializing in the transportation of agricultural commodities in interstate commerce. These carriers, including those controlled and operated by farm cooperatives, individual farmers transporting their own products and for-hire truckers, are exempt from the certificate requirements of the Interstate Commerce Act under section 203 (b) thereof. Not being subject to such requirements, these carriers can and do render an expeditious and highly flexible transportation service to the agricultural community. Agricultural producers and shippers are largely dependent upon the services of such carriers who, in many instances, operate directly from farms to consignees located in distant cities. The importance of such expeditious and flexible distribution, particularly of livestock and highly perishable and seasonal commodities, is readily apparent.

For years it has been the practice of these so-called exempt carriers to trip lease their equipment to Commission-certificated carriers for back hauls in order to avoid returning empty to the bases of operations of such haulers. Obviously, the transportation charges on the outbound movements of the agricultural comLodities, in many instances, would be prohibitive without the added revenues received from such trip leases on the back hauls. Moreover, it is sound and economical operation on the part of both the so-called exempt carriers and the Commission-certificated carriers to trip lease otherwise empty equipment whenever it can be so utilized.

Regulations recently promulgated by the Interstate Commerce Commission, requiring that all leases of motor carrier equipment be for a minimum period of 30 days and be for the exclusive use of the leased equipment, destroy the economical and efficient utilization of motor carrier equipment inherent in this trip-leasing practice. Furthermore, it will not be feasible in most cases for the so-called exempt carriers to enter into such leases because of the flexible distribution required on the outbound movements of the products of agriculture.

The Department therefore recommends that H. R. 3203 be passed and requests, if hearings on the bill are proposed, that it be notified in advance and assigned time for oral testimony.

In view of the time situation, we have not obtained advice from the Bureau of the Budget as to the relationship of this proposed legislation to the program of the President.

Sincerely yours,

E. T. BENSON, Secretary.

The CHAIRMAN. I have also received numerous-I almost said "innumerable"-I suppose with time we could at least number themcommunications for and against the legislation. Those communications will be analyzed and properly grouped. The great number of them would prevent their being put into the record in complete form; but they will be analyzed and classified and placed under their appropriate and proper heading.

Now, there had been an intention on the part of the committee in an effort to conserve the time of the committee to limit statements today in the hearings to 15 minutes.

However, that might have worked some injustice in view of the fact of the great number of witnesses, and the necessity, as I have already indicated, of consolidating statements.

We, therefore, take it that there will be an effort made to consolidate statements in the hope that it will be helpful to the committee in conserving its time.

I, therefore, must leave it to those who do the speaking to make certain from those who would wish to speak upon the same side of the question that they have, that there is an arrangement on the part of such individuals for such persons to consume not more than 15 minutes.

Now, if this does not work out in a voluntary way, by groups who are here today, then it will be necessary for the chairman to designate the time.

I leave it in your hands for the present in the hope that you see the necessity of conserving time and will be able, by your own ways and means, to save the time of the committee in this respect. If that is not done, then there will be no other recourse than for the committee, through its chairman, to take such action as may be necessary.

Are there any questions that anyone would like to ask?
If not, we will proceed with the hearing of witnesses.

Are there any Members of Congress present who desire to testify?

STATEMENT OF HON. KARL C. KING, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF PENNSYLVANIA

Mr. KING. Mr. Chairman.

The CHAIRMAN. You speak in favor of or against the bill?
Mr. KING. In favor of the bill.

The CHAIRMAN. Well, we will hear you immediately.

Members of Congress have committee hearings that they necessarily must attend, and for that reason we try to give them that consideration in testifying first.

Mr. KING. Thank you, Mr. Chairman.

I am Karl C. King, Eighth District of Pennsylvania.

The business which makes it possible for me to be a Congressman is vegetable growing. The King Farm operation in eastern Pennsylvania delivers all over the northeastern third of the United States. Most of these deliveries are made on our own motortrucks but at rush times we need to employ motortrucks which are free to make produce deliveries to any point in our whole territory.

In addition to being a vegetable grower, familiar with the problems of produce distribution throughout the country, I am today author

ized to represent the Vegetable Growers Association of America. This is an association of thousands of individual growers, most of whom depend largely on the hiring of trucks for all distant deliveries. I shall be brief in my statement because I know that other competent witnesses will give you many figures and facts pertinent to this problem. I merely want to assure you that thousands of farmers all over the country will be very seriously affected by the pending order of the Interstate Commerce Commission outlawing the privilege of single trip leasing to the thousands of trucks which follow the seasonal harvests of the produce industry.

These trucks, although often slightingly referred to as gypsies or itinerants, are a very important factor in the efficient distribution of foodstuffs and there is no substitute for them in the form of organized trucking lines operating over fixed routes.

Of course, the order banning single trip leasing was not motivated by a desire to destroy independent truck operators or independent farmers, but the obvious effect of this order would be the complete destruction of the distribution system used for years in the development of an enormous produce industry. It may be said that these independent trucks can still operate, but, if the privilege of picking up a return load of regulated merchandise is destroyed, they must either go out of business or practically double their rates so that the general cost of distributing produce is greatly increased. I am sure you will find this general opinion fully substantiated by the detailed information which will be presented to you. I appear here just to express the hope that this committee will act promptly in giving its approval of H. R. 3203 with a strong recommendation that it be passed on the floor of the House.

Thank you, gentlemen.

The CHAIRMAN. May I say before the questioning period starts, there is no desire on the part of the chairman-in fact I have no authority to do so-to restrict anyone in questioning as extensively as they wish, but I assume, in view of the fact that we have asked our witnesses to conserve the time, that the members of the committee may also observe that rule and help our schedule.

Mr. O'HARA. Mr. Chairman.

The CHAIRMAN. Mr. O'Hara.

Mr. O'HARA. Mr. King, just briefly, I presume that it is true that the movement of vegetables and the vegetable crop is a highly seasonable one and that when the vegetables are ready for shipment that they do have to be moved from the farm or production areas to the market as soon as possible; is that correct?

Mr. KING. It is quite true, and being seasonal, of course, the locations of the trucking activities change very rapidly, in a single season, running from the southern section of the United States to the extreme northern section, as we go around with the seasons.

Mr. O'HARA. And what type of vegetables do you raise on your farm?

Mr. KING. About 12 different vegetables. of the most perishable nature, such as broccoli, spinach, and so forth.

Mr. O'HARA. How quickly do they have to be moved and transported from the farm to the market areas in the growing season? I mean from the time you harvest them from the field? What is your situation as to disposing of them at the market place?

Mr. KING. For vegetables of that type it is quite necessary that they be in the terminal market the night following the day of harvest and we give first-night delivery to territory covering more than 40 million people.

be

Mr. O'HARA. And what areas, in miles, would that be; what would your distances that these trucks have to move to the market places? Mr. KING. 500 miles is the limit of what you would call first-night delivery.

Mr. O'HARA. That is all, Mr. Chairman.

The CHAIRMAN. Any further questions?
Mr. CARLYLE. Mr. Chairman.

The CHAIRMAN. Mr. Carlyle.

Mr. CARLYLE. Congressman King to what extent have your constituents found it difficult to get their farm products to market under the present law?

Mr. KING. Under the present law?

Mr. CARLYLE. Yes.

Mr. KING. Well, I am assuming that if the Interstate Commerce Commission proceeds to make effective its order, that everything will be changed for those farmers who depend on these itinerant trucks that move from one field to another as the season progresses.

Now, in all of the vegetable growing districts of the East, there is a definite dependence on that type of truck for the delivery of produce and I think we should not get the idea that these so-called gypsies or itinerant trucks are all poor trucks.

It is true, I think, that they are largely individually owned and are of very different and diverse types, but pretty generally they are good trucks and under the handling of good operators, largely owners. Mr. CARLYLE. Now, of course, we all appreciate the importance of farmers being given an ample opportunity to have their produce marketed and properly transported. Is it an absolute fact that under the present law, if the Interstate Commerce Commission should have the authority to regulate these trucks, would that impede the transportation of farm products?

Mr. KING. Yes, sir; if they stopped the single trip leasing, it will put, in my estimation, a great many of these trucks out of business and those remaining will have to increase their rates substantially to stay in business. The whole produce distributing system in the United States has been built on these trucks that have existed with the returnhaul privilege, and that certainly has been based strictly on singletrip leasing.

The 30-day leasing would be like a complete prohibition. It would not at all be usable by the trucks operating in this produce industry. They come up out of Florida and the South to the North and their rates, coming up are not high enough to permit them to run all of the way back empty.

Mr. ROGERS. Will the gentleman yield?
The CHAIRMAN. Any further questions?
Mr. ROGERS. Will the gentleman yield?

The CHAIRMAN. Mr. Rogers.

Mr. ROGERS. Congressman King, if the rate for transportation increased, that would mean an increase to the consumer of the commodity hauled, would it not?