police work, of catching the violators of the already-clear statute. To change the statute would be no answer to that problem. We respectfully oppose the change in the "private carrier" definition in H. R. 6141 for the reasons (a) that it is unnecessary, since "buy and sell operations" already are clearly prohibited by the present act as applied through the primary business test, so that the problem if any is one of policing, which a change in the statute would not help, (b) that such unnecessary changes are unwise, since they could be interpreted in unforeseen ways, and in any event would enable op ponents of private operation to start the battle of litigation over again (it already has been shown by the comments of the Interstate Commerce Commission that the proposed revision is ambiguous and could lead to absurd results), and (c) that any reopening of the definition could result in still other and ill-advised amendments. THE RECOMMENDATIONS OF THE INTERSTATE COMMERCE COMMISSION The recommendations of the Interstate Commerce Commission regarding the "private carrier" aspect of the bill, in the Commission's letter of December 22, 1955, to Chairman Magnuson, are infinitely worse, we respectfully submit, than the proposal in the bill itself. The "for compensation" test, which would have, by interpretation of the present statute, destroyed much if not all of the right of industry to use trucks for its own materials, products, or services, had that test not been rejected in the Lenoir-Schenley-Brooks Transportation case, as described above. The Commission's letter (with the strange comment that the Commission does not believe this "will have the effect of changing to a carrier for hire any person who was lawfully operating as other than a carrier for hire") proposes to write that rejected "for compensation" test into the statute itself, by adding the following, as part of a proposed new section 203 (c): "A person shall be deemed to be engaged in transportation for compensation if he receives for such services a reward or consideration, regardless as to whether the compensation, reward, or consideration is received directly or indirectly, through the device of leasing or renting vehicles, employment, the furnishing of drivers or other employees, or management services, the buying or selling of property, or in any other manner by which compensation, reward, or a consideration is received in return for the direction or control of or the responsibility for vehicles used in transportation by motor vehicle in interstate or foreign commerce." That reads virtually as though lifted from one of the railroad or for-hire motor carrier briefs in the Lenoir-Schenley-Brooks Transportation proceedings, where those briefs argued that a furniture manufacturer which charged its customers for delivering its own products to them in its own trucks, and received allowances from its suppliers for picking up its supplies and materials, and a whisky wholesaler which charged its customers delivered prices roughly equal to its warehouse prices plus freight, were engaged in transportation "for compensation”— ergo, having no certificates or permits, were engaged in unlawful operation as common or contract carriers. A reading of the Commission's proposed amendment quoted above will show that it could apply to all trucks, leaving none free for "private" operation. The entire text of that new section 203 (c) proposed by the Commission is as follows: "Section 203 (c). Except as provided in section 202 (c), section 203 (b), in the exception in section 203 (a) (14), and in the second proviso of section 206 (a) (1), no person shall engage in any transportation for compensation, by motor vehicle, in interstate or foreign commerce, on any public highway or within any reservation under the exclusive jurisdiction of the United States, unless there is in force with respect to such person a certificate or a permit issued by the Commission authorizing such transportation. "A person shall be deemed to be engaged in transportation if, through the selection, approval, or employment of drivers or other employees (other than as a bona fide officer or employee), through the control over facilities, or through other means, directly or indirectly, he exercises direction or control over the movement of passengers or property, or assumes responsibility for the persons or property being transported or for the operation of the vehicles over the highways. "A person shall be deemed to be engaged in transportation for compensation if he receives for such services a reward or consideration, regardless as to whether the compensation, reward, or consideration is received directly or indirectly, through the device of leasing or renting vehicles, employment, the furnishing of drivers or other employees, or management services, the buying or selling of property, or in any other manner by which compensation, reward, or a consideration is received in return for the direction or control of or the responsibility for vehicles used in transportation by motor vehicle in interstate or foreign commerce." The Commission explains that its recommended changes in the contract carrier definition, elsewhere in its letter, would have the effect of excluding various for hire or for compensation operations from both the common and contract carrier classifications. The first paragraph of section 203 (c) above, then, would altogether prohibit such operations in interstate commerce, since they would have no certificates of public convenience and necessity or permits. Thus, the Commission's proposals would create a new category of truck operations in interstate commerce-one that would be wholly prohibited. A reading of the last paragraph of the proposed new section 203 (c) will show how difficult it would be to place any limit on what would constitute transportation for compensation, and therefore (a) common carriage, (b) contract carriage, or (c) that new category of always unlawful truck operation. As a practical matter, it might make little difference to which of those three classifications a present "private carrier" could be shifted as a result of the amendments, since even if his operations were held to be common or contract it might prove impossible for him to obtain a certificate or permit. We earnestly appeal to you, and your associates on the House Committee on Interstate and Foreign Comerce, to insist on maintaining "the primary business test" to oppose any tampering with it, and to stop in their incipiency these renewed attacks, which find expression in H. R. 6141 and the Commission's letter, upon the right of American industry to operate its own trucks in the bona fide course of its own nontransportation businesses. Copies of this statement are being sent to the Interstate Commerce Commission, with the respectful request that the Commission reappraise and reconsider its recommendations here referred to. Respectfully submitted. JAMES D. MANN, Managing Director. Mr. HARRIS. I am advised by the chairman of this committee that due to the primaries in several States on Tuesday of next week the executive session that had been called for that day will be postponed 1 day and will be held on Wednesday. Therefore, this committee will continue hearings on this subject on Tuesday morning. We will not meet on Monday. It has been expected that a representative of the Railway Labor Executives Association will be here on Wednesday. We will contact them and see if they cannot be here on Tuesday. Following the brotherhood witnesses will be the Association of American Railroads, which we hope to get to not later than on Thursday. With that information, the committee will adjourn until 10 o'clock Tuesday of next week. Mr. HALE. Mr. Chairman, may I say that I would be happy if the Association of American Railroads, in preparing their testimony, would direct some of it to this exact point of competition with the water carriers. I think that would be helpful to the committee. Mr. HARRIS. Very well. The committee will now adjourn. (Thereupon, at 12:32 p. m., the committee recessed, to reconvene at 10 a. m., Tuesday, May 8, 1956.) TRANSPORTATION POLICY TUESDAY, MAY 8, 1956 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON TRANSPORTATION AND COMMUNICATIONS, Washington, D. C. The subcommittee met, pursuant to adjournment, at 10 a. m., in room 1334 New House Office Building, Hon. Oren Harris (chairman of the subcommittee) presiding. Mr. HARRIS. The committee will be in order. We are resuming the hearings this morning on the transport policy and the bills to carry it out. The first witness will be Mr. J. Carter Fort, vice president and general counsel of the Association of American Railroads. I might say, for the record and for the information of those who are interested, it is hoped that we can conclude this week the testimony of the Association of American Railroads, the American Trucking Association, the Short Line Railroad Association, and the Railway Brotherhoods. That constitutes quite a big order. The Chair hopes that he will have the cooperation of all interested in this objective. Mr. Fort, you may proceed. STATEMENT OF J. CARTER FORT, VICE PRESIDENT AND GENERAL COUNSEL, ASSOCIATION OF AMERICAN RAILROADS, WASHINGTON, D. C. Mr. FORT. May it please the chairman and gentlemen of the committee, My name is J. Carter Fort, and I represent the Association of American Railroads. You may recall that I appear for that association at the preliminary hearings which your committee held last September. At this hearing, with the permission of your committee, we shall present two witnesses. Our first witness will be Mr. Jervis Langdon, Jr., and I will follow him. Mr. Langdon is chairman of the Association of Southeastern Railroads, and is a member of the law committee of the Association of American Railroads. He will appear here for the Association of American Railroads. His testimony will deal, generally speaking, with the ratemaking proposals of the Presidential Advisory Committee and with the provisions of H. R. 6141 implementing those ratemaking proposals, and particularly those proposals that have to do with competitive rates between different modes of transportation. My testimony will deal with other features of the report and of the proposed legislation designed to assure a strong system of common carrier transportation, including such features as private carriage, contract carriers, the repeal of the dry bulk exemption for water carriers, the expansion of the authority of the Interstate Commerce Commission over the discontinuance of unprofitable passenger services and like matters. With the permission of your committee, I will call Mr. Langdon as our witness at this time. Mr. HARRIS. One of our colleagues has asked me to inquire if you intend to, Mr. Fort, also discuss the proposed bills, and the sections in the bill, and the transport policy, regarding section 22. Mr. FORT. It is not our purpose to discuss section 22. The interests I represent take no position with respect to section 22 changes. Mr. HARRIS. Very well. Mr. Langdon? STATEMENT OF JERVIS LANGDON, JR., CHAIRMAN, ASSOCIATION OF SOUTHEASTERN RAILROADS, APPEARING FOR THE ASSOCIATION OF AMERICAN RAILROADS, WASHINGTON, D. C. Mr. LANGDON. May it please the committee, my name is Jervis Langdon, Jr. I am chairman of the Association of Southeastern Railroads, with headquarters at Washington, D. C. I appear here today, however, for the Association of American Railroads by authority of its board of directors. That association is a voluntary, unincorporated organization including in its membership railroad companies operating more than 95 percent of the total railroad mileage in this country and having operating revenues which are more than 95 percent of the total railroad operating revenues. My appearance is in response to the notice of these hearings dated March 26, 1956, which announced that your subcommittee will begin hearings Tuesday, April 24, 1956— on H. R. 6141, and related bills, incorporating the recommendations made in the report of the Presidential Advisory Committee on Transport Policy and Organization. It was stated in the notice that the hearings represent a continuation of the preliminary hearings held by the subcommittee last September during the recess of the Congress, at which time an explanation of the report was made by the Advisory Committee members and by representatives of the four transport industries involved. It seems unnecessary for me to undertake a comprehensive summary of this report or the recommendations contained therein. Your committee, as pointed out in the notice of these hearings, met during the recess of Congress last September and at that time the report was discussed and explained by members of the Presidential Advisory Committee and others, including a spokesman for the railroad industry. You have heard additional discussion and explanation during the course of these hearings. For me to summarize the report and its recommendations would be unduly repetitious. |