concerned, their status will be substantially the same as it is today, except for some requirements that they inspect the vehicles to make them safer for operation on the highways.

Further, with respect to vehicles to be driven by the owners thereof, the so-called owner-operated vehicles, the leasing rules only have the effect of requiring those leases to be of over 30 days' duration. So that long-term leases of owner-operated vehicles would still be permitted, there is nothing, for example, in the rules which would prevent a carrier from leasing one of its vehicles to another carrier without a driver.

In Pennsylvania, carriers may not lease equipment except upon securing the specific approval of the Commission. Even in such instances, the leasing of vehicles with drivers, whether on a trip or longterm basis, is prohibited. The same rule applies in the State of Washington. In Texas, carriers may only operate equipment owned by them under a rule which prohibits all leasing. Arkansas also prohibits all leasing of vehicles with drivers. Connecticut only permits vehicles to be leased after specific approval for each vehicle is secured from the State Commission. The Arizona commission will not approve vehicle leases of a lesser duration than 6 months, except in rare instances. In such rare instances, the leases must be of at least 30 days' duration. All leasing of vehicles with drivers is prohibited.

Mississippi holds that if a vehicle is leased with a driver, the lessor has taken on carrier status which is, of course, illegal unless the lessor has a certificate. Nebraska requires carriers to have specific approval from its commission before any leasing may be undertaken. In Virginia, leasing is prohibited, except in extreme emergencies. However, petroleum carriers may engage in leasing, provided the leases are of at least 30 days' duration.

Several States have rules of about the same restrictiveness as those of the Interstate Commerce Commission. For example, Kentucky, by statute, requires leases of vehicles to be driven by the owner to be of at least 30 days' duration. Michigan, by commission regulation, prohibits trip leasing of vehicles from unauthorized carriers. New Mexico accomplishes the same result by a statutory prohibition against trip leasing and a ruling of its commission that vehicle leasing must be of 30 days' duration. North Dakota, by commission ruling, will not permit the leasing of vehicles for less than 30 days. It is the policy of the West Virginia Public Service Commission to decline approval of trip leases. In Minnesota, leases of petroleum-carrying equipment must be of at least 30 days' duration. The rules of the Montana commission have the effect of prohibiting indiscriminate trip leasing and make trip leasing under any circumstances virtually impossible. The same can be said of the Oregon rules.

The State of New York has under study rules which are substantially identical with those of the Interstate Commerce Commission. Senator BRICKER. I see in the audience Mr. Herbert Baker from home. What are the rules in our State?

Mr. HELMETAG. I can tell you that. Ohio, subsequent to the promulgation by the Interstate Commerce Commission of its rules and regulations, took under consideration the promulgation of substantially the same rules.

The Commission has not, as yet, concluded its deliberations on those rules. The provision with respect to 30 days is not in those rules; but the rules, otherwise, are substantially the same.

Senator BRICKER. I have not been in contact with that for some time.

Mr. HELMETAG. They became interested in the problem subsequent to the Interstate Commerce Commission's working on it.

For a fuller analysis of the leasing regulations of the several States, I refer this committee to Commissioner Knudson's review, which is found on pages 478-484, inclusive, of the House committee's record. I might say that I made an independent study of the several States' leasing rules, and the results of my study were in accord with those of the Commission.

The fact that the several States have seen fit to regulate trip leasing along the same, or more stringent lines as the Interstate Commerce Commission, is, itself, pretty conclusive proof that the Commission's rules are the least required to deal with the problem. But there are additional reasons to believe that the States and the Commission have adopted the most workable solution.

At the hearings before the Commission, and in the Federal courts, the State of Washington appeared and argued that its rules prohibiting the leasing of vehicles with drivers worked well, resulted in sounder regulation, and were enthusiastically approved by the motor carriers and the public generally. The Mountain Pacific States Conference of Public Service Commissioners, which is an organization of some 11 Western States, on June 25 of this year passed a resolution urging Congress not to pass legislation that would interfere with the Commission's power to regulate trip leasing.

I have here a copy of that resolution which was adopted by that organization, which consists of the public utility commissions of the following states; namely, Washington, Oregon, California, Montana, Idaho, Utah, Wyoming, Colorado, Arizona, New Mexico, and Nevada.

This is a resolution, as I say, adopted by that group at a recent conference they had, and memorializes this committee not to approve H. R. 3203. I would ask that be incorporated in the record.

Senator GRISWOLD. Without objection, it will be made a part of the record at this point.

(The resolution referred to is as follows:)

Whereas the practice of trip leasing motortruck equipment with driver for short terms for a percentage of revenues earned has increased to such extent as to threaten the operations of responsible motor carriers and other carriers; and Whereas effective regulation and control over the safety of equipment, hours of service of drivers, and efficiency of motor transportation by the Interstate Commerce Commission and the several State commissions requires that such regulatory agencies retain the power to prescribe minimum requirements as to equipment leases and the terms thereof; and

Whereas the United States Supreme Court has sustained the propriety of action by the Interstate Commerce Commission prohibiting leases of trucks with drivers for periods of less than 30 days, which limitation was made after investigation and public hearings conducted over a period of more than 2 years; and Whereas H. R. 3203, and its companion bill, S. 925, now pending before the Congress, would take from the Interstate Commerce Commission the power to regulate and control such leasing practices: Now, therefore, be it

Resolved, That the Mountain Pacific States Conference of Public Service Commissioners does hereby express its opposition to H. R. 3203 and S. 925 and any legislation which would impair the power of regulatory agencies over the leasing of motor equipment.

Mr. HELMETAG. I would also like to point out that the States of Massachusetts and Connecticut have written letters both to this committee and to the House committee, asking that legislation of the type included in H. R. 3203 be not enacted, because they say that such legislation would not only interfere with the Interstate Commerce Commission's effective regulation of trip leasing, but would also interfere with their effective regulation of the motor-carrier industry.

I think this committee should also keep in mind that large and responsible segments of the motor-carrier industry, the railroads, and labor, are of the firm belief that the Commission's solution is the only feasible one.

Despite the careful and thoughtful consideration that the Commission has given to the problem, despite the sound precedent of the workability of similar leasing rules in many States, and despite the contentions of responsible segments of the transportation industry that the leasing rules are urgently required, the House committee recommended a bill that will enfeeble the Commission in its efforts to carry out the regulatory scheme of the Motor Carrier Act. This bill was passed by the House.

What was the force that motivated the House to pass H. R. 3203? Clearly, it was the argument of the agricultural people that the prohibition of trip leasing will nullify the so-called agricultural exemption by depriving the exempt hauler of the privilege of trip leasing for a back haul. This, it is claimed, will increase the farmer's cost in marketing his products.

There is abundant evidence in the Commission's report and order that it is not unmindful of the needs of the agricultural community. The order provides that with respect to vehicles used in hauling agricultural products, the rules shall not become effective until 6 months after the date when the rules become generally effective. During this 6 months, as Commissioner Knudson indicated in his testimony before the House committee-and before this committee yesterday—the Commission will have ample opportunity to reconsider the needs of agriculture. Further evidence that the Commission is fully aware of the farmers' situation, and responsive to it, is the provision in the rules that farmer-owned vehicles may be trip leased for back hauls.

By assuming contrary to the fact that the Commission is not sufficiently considerate of the needs of agriculture, H. R. 3203 goes far beyond what is necessary to insure that the Commission will not dilute or diminish the agricultural exemption.

One would believe from reading the presentations before the House committee that trip leasing for backhauls of trucks moving agricultural commodities to market is the most important phase of the tripleasing problem. Actually, the agricultural haulers rely to a very meager extent upon trip leasing. A Commission survey recently conducted disclosed that little more than 1 percent of the farmers who used their own trucks to market agricultural products rely upon trip leasing for return movements, and that about 75 percent of the agricultural haulers operate without leasing.

Furthermore, the record before the Commission indicates beyond all question that where the haulers of agricultural products lease their vehicles for return movements, the leases are in many instances either for a term, or on a recurring-trip basis that could be satisfactorily

converted to a term basis. If this is so, less than 25 percent of the agricultural hauls are dependent upon trip leasing for return movements. From this it can be seen that the importance of trip leasing to the farmer has been greatly overemphasized and magnified beyond all reason.

Senator BRICKER. A higher percentage of trip leasing would apply to interstate and long-distance hauls?

Mr. HELMETAG. All of these statistics relate only to the interstate and long-haul. None of these statistics relate

Senator BRICKER. They do not include intrastate hauls at all?

Mr. HELMETAG. Not according to my understanding, sir. As a matter of fact, on the intrastate movements, being shorter hauls, and that is what the great bulk of the movement by truck of agricultural commodities is, there is

Senator BRICKER. An immediate market?

Mr. HELMETAG. Immediate primary markets, and there would not be any leasing back to the farmers.

As a matter of fact, Congressman King, when he talked to the House committee, so stated. He is a farmer himself and operates large farms in Pennsylvania and New Jersey. He stated that he has a large fleet of trucks which are never trip leased, that he uses those trucks to move his products into the New York, Philadelphia, Baltimore, and Washington markets, and they return light because the movement is a short-haul one.

What we have involved here are the longer hauls in interstate

commerce.

The real trip-leasing problem is not an agricultural problem, but rather a problem of the transportation industry. The great bulk of the trip leasing that occurs is not for the return movement of vehicles that have handled agricultural products, but occurs without regard to, and totally independent of, the movement of agricultural products. To become a carrier, a person must secure a certificate of convenience and necessity from the Commission. Under the statute, before such a certificate can be secured, the applicant must show that he is fit and able to carry on carrier operations, and that his operations will eliminate inadequacies in the existing service.

Senator BRICKER. That raises a question in regard to Mr. Tobin's testimony here about an operator who has no vehicles, a certified carrier that has no vehicles. I wonder if you have any statistics, either one of you, as to how many of that kind of operator exist that have been certified without the ownership of any equipment?

Mr. HELMETAG. There are several, sir. I do not have statistics on the exact number. There are two types. There are some carriers that have no vehicles owned by the carrier itself, but the vehicles are owned in a subsidiary corporation and then leased on a long-term basis to the carrier.

Senator BRICKER. That would not be affected at all by this rule? Mr. HELMETAG. No, that is not the type of thing we are concerned with here. There are some carriers that own a few vehicles, or no vehicles, and depend entirely on leasing to carry on their carrier operations.

Senator BRICKER. How did they get their certificates?

Mr. HELMETAG. In many instances, sir, those certificates were secured under the so-called grandfather clause, or they may have secured a certificate and then changed their operation, because this practice seems to be growing somewhat, especially among the longer-haul carriers, this practice of relying on leasing.

Very few carriers rely solely on trip leasing. They will rely on some long-term leasing, and supplement it by trip leasing. I know of no carrier that relies wholly on trip leasing. But there are several carriers that rely upon leasing, partly long-term, partly trip leasing, and all from people outside of regulation, that is, people not in the carrier's own family; they are not either a subsidiary of a carrier, or part of the carrier's own organization. They are completely independent contractors from whom they lease.

But today, anyone owning a motor truck can operate without securing a certificate as a carrier by the device of leasing himself and his truck to a carrier on a trip basis. Trip leasing has made it possible for anyone owning a truck to secure the use of a carrier's certificate without the approval of the Commission and without regard to the statutory requirements. This ease of entry into regulated transpotration has created a vast group of itinerant owner-operators who lease themselves first to one carrier, then to another, moving about the country where they can make the best deal. This large and increasing group which is totally unconcerned with the needs of the agricultural areas circulates in areas where the movement of commodities covered by regulation is heaviest. It is this group, and the carriers' exploitation of this group, that have created the problems.

In attempting to preserve the agricultural exemption from erosion, the House committee recommended a bill that will, if enacted into law, tie the Commission's hands in dealing with the larger and more important problem-a problem that affects all transportation and every segment of the Nation's economy.

The railroads believe that the Commission has made it amply clear that it will not allow the agricultural exemption to be destroyed and that, therefore, the House committee's concern over the effect of the leasing rules on agriculture was unnecessarily stimulated. This being so, this committee should not recommend the approval of H. R. 3203. Even assuming that this committee may feel as the House apparently did, that it should provide a statutory direction so that the Commission, in its zeal to carry out the regulatory scheme of the Motor Carrier Act, shall not dilute or lessen the scope of the agricultural exemption, the most that should be done is to recommend a modified bill that would incorporate the substance of the amendment which Mr. Preston, the other rail witness, has brought to your attention.

It is our opinion that if this committee goes further and recommends the enactment of H. R. 3203, as passed by the House, regulation of the motor carrier industry will be completely undermined, and the Commission frustrated in its efforts to carry out the objectives of Congress, as set forth in the Motor Carrier Act.

In short, this committee has before it the fundamental and basic question of whether the motor carrier industry is to be brought under effective regulation, or allowed to retain and add to the chaotic conditions that brought about the need for regulation in the first instance.