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serve, and to equipment leased by one authorized carrier operating over irregular routes to another such carrier and operated between points and within territory which both the lessor and lessee are authorized to serve;

(b) To equipment utilized wholly or in part in the transportation of railway express traffic, or in substituted motor-for-rail transportation of railroad freight moving between points that are railroad stations on railroad billing;

(c) To equipment utilized in transportation performed solely and exclusively within any municipality, contiguous municipalites, or commercial zone, as defined by the Commission;

(d) To equipment utilized by an authorized carrier in transportation performed pursuant to any plan of operation approved by the Commission in a proceeding arising under section 5 of the Interstate Commerce Act.

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§ 207.4 Augmenting equipment.-Other than equipment exchanged between motor common carriers in interchange service as defined in § 207.5 of these rules, authorized carriers may perform authorized transportation in or with equipment which they do not own only under the following conditions:

(a) The contract, lease, or other arrangement for the use of such equipment— (1) Shall be made between the authorized carrier and the owner of the equipment;

(2) Shall be in writing and signed by the parties thereto, or their regular employees or agents duly authorized to act for them in the execution of contracts, leases, or other arrangements;

(3) Shall specify the period for which it applies, which shall be not less than 30 days when the equipment is to be operated for the authorized carrier by the owner or employees of the owner; * * *

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(4) Shall provide for the exclusive possession, control and use of the equipment, and for the complete assumption of responsibility in respect thereto, by the authorized carrier, ***

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(5) Shall specify the compensation to be paid by the lessee for the rental of the leased equipment; provided, however, that such compensation shall not be computed on the basis of any division or percentage of any applicable rate or rates on any commodity or commodities transported in said vehicle or on a division or percentage of any revenue earned by said vehicle during the period for which the lease is effective;

(6) Shall specify the time and date or the circumstance on which the contract, lease, or other arrangement begins, and the time or the circumstance on which it ends. The duration of the contract, lease, or other arrangement shall coincide with the time for the giving of receipts for the equipment, as required by paragraph (b) of this section.

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(c) Inspection of equipment.-It shall be the duty of the authorized carrier, before taking possession of equipment, to inspect the same or to have the same inspected. ***

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(d) Identification of equipment.-The authorized carrier acquiring the use of equipment under this rule shall properly and correctly identify such equipment as operated by it. ***

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(e) Driver of equipment.-Before any person other than a regular employee of the authorized carrier is assigned to drive equipment operated under these rules, it shall be the duty of the authorized carrier to make certain that such driver is familiar with, and that his employment as a driver will not result in violation of any provision of parts 192, 193, 195, and 196 of the Motor Carrier Safety Regulations (Rev.) pertaining to "Driving of Motor Vehicles," "Parts and Accessories Necessary for Safe Operation," "Hours of Service of Drivers," and "Inspection and Maintenance," and to require such driver to furnish a certificate of physical examination in accordance with part 191 of the Motor Carrier Safety Regulations (Rev.) pertaining to "Qualifications of Drivers," or, in lieu thereof, a photostatic copy of the original certificate of physical examination, which shall be retained in the authorized carrier's file.

(f) Record of use of equipment.-The authorized carrier utilizing equipment operated under these rules shall prepare and keep a manifest covering each trip for which the equipment is used in its service, containing the name and address of the owner of such equipment, the make, model, year, serial number, and the State registration number of the equipment, and the name and address of the driver operating the equipment, point of origin, the time and date of departure, the point of final destination, and the authorized carrier's serial number of any identification device affixed to the equipment.

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§ 207.5. Interchange of equipment.—Common carriers of property may by contract, lease, or other arrangement, interchange any equipment defined in § 207.2 of these rules with one or more other common carriers of property, or one of such carriers may receive from another such carrier, any of such equipment, in connection with any through movement of traffic, under the following conditions:

(a) Agreement providing for interchange.-The contract, lease, or other arrangement providing for interchange shall specifically describe the equipment to be interchanged; the specific points of interchange; the use to be made of the equipment and the consideration for such use; and shall be signed by the parties to the contract, lease, or other arrangement, or their regular employees or agents duly authorized to act for them, in the execution of such contracts, leases, or other arrangements.

(b) Authority of carriers participating in interchange.-The certificates of pubic convenience and necessity held by the carriers participating in the interchange arrangement must authorize the transportation of the commodities proposed to be transported in the through movement, and service from and to the point where the physical interchange occurs.

(c) Driver of interchanged equipment.—Each carrier must assign its own driver to operate the equipment that is proposed to be operated from and to the point or points of interchange and over the route or routes or within the territory authorized in the participating carriers' respective certificates of public convenience and necessity.

(d) Through bills of lading. The traffic transported in interchange service must move on through bills of lading, issued by the originating carrier, and the rates charged and revenues collected must be accounted for in the same manner as if there had been no interchange of equipment. Charges for the use of the equipment shall be kept separate and distinct from divisions of the joint rates or the proportions thereof accruing to the carriers by the application of local or proportional rates.

(e) Inspection of equipment.—It shall be the duty of the carrier acquiring the use of equipment in interchange to inspect such equipment, or to have it inspected in the manner provided in § 207.4 (c) of these rules; and equipment which does not meet the requirements of the safety regulations shall not be operated in the respective services of the interchange carriers until the defects have been corrected.

(f) Identification of equipment. The authorized carriers operating equipment in interchange service under this section shall carry with each vehicle so operated a copy of the contract, lease, or other arrangement while the equipment is being operated in the interchange service.

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SUPREME COURT OF THE UNITED STATES

Nos. 26, 35 AND 36.-OCTOBER TERM, 1952

On Appeal From the United States District Court for the Northern District of

Alabama

26. AMERICAN TRUCKING ASSOCIATIONS, INC., ET AL., APPELLANTS, V. THE UNITED STATES OF AMERICA, INTERSTATE COMMERCE COMMISSION, ET AL.

On Appeals From the United States District Court for the Southern District of Indiana

35. EASTERN MOTOR EXPRESS, INC., ET AL., APPELLANTS, V. THE UNITED STATES OF AMERICA AND INTERSTATE COMMERCE COMMISSION, ET AL.

THE SECRETARY OF AGRICULTURE OF THE UNITED STATES, APPELLANT, V. THE UNITED STATES OF AMERICA AND INTERSTATE COMMERCE COMMISSION, ET AL.

[January 12, 1953]

Mr. JUSTICE BLACK, with whom MR. JUSTICE DOUGLAS concurs, dissenting. I agree with the Court that the Interstate Commerce Act grants the Commission broad implied powers to carry out the general purposes outlined in the law. See United States v. Pennsylvania R. Co., 323 U. S. 612, 616. But the Commission is without power to invoke vague implications to defeat the Act's purpose or to override its clearly expressed provisions. This, I think, is what the Commission has done in most of the Commission rules which the Court upholds.. In my view the rules run counter to the Act in three important respects:

A. The congressionally granted right of motor carriers to choose for themserves whether they would use leased or purchased equipment is practically destroyed by the imposition of burdensome restrictions.

B. The exemption from regulation granted carriers of agricultural products by § 203 (b) of Part II of the Act is burdened by restrictive rules that substantially take away the advantages Congress intended to confer by the exemption.

C. Railroads that operate motor vehicles as a part of the business of common carriage are granted special advantages in violation of the express: policy of the Act which requires each method of transportation to be left with its inherent advantages.

A. Motor vehicle common carriage had reached an advanced stage when Congress passed the Motor Carrier Act in 1935.1 Early development of the business was along lines that the carriers found to be advantageous. Some carriers owned their vehicles, while others leased them. The Act did not try to disrupt this system, but left motor carriers free to continue to own or lease equipment in accordance with their best financial judgment. And Congress was content to regulate the common or contract carriers themselves; it made no effort whatever to regulate those who owned the vehicles that were leased to the regulated carriers. Congress was thus talking about the acquisition of equipment by lease as well as by purchase when it provided that the Commission should be without power to restrict the right of carriers to add to their equipment or facilities as the development of their business and the demands of the public required. While this provision is patently not designed to forbid the Commission from limiting the type of vehicles in the interest of safety, the provision just as patently does deprive the Commission of power to forbid the lease and purchase of vehicles which meet the test of safety.

The new rules adopted by the full Commission put burdensome restrictions on the power to lease appropriate vehicles, restrictions which, in my view, go beyond the power of the Commission. These burdensome restrictions had been previously rejected by the Commission members particularly responsible for supervision of motor vehicle affairs as distinguished from supervision of railroad affairs. This record makes plain that enforcement of these burdensome rules will produce violent repercussions in the motor carrier industry; many motor carriers will suffer ruinous losses. The business of leasing vehicles for use by

1 49 Stat. 543, as amended, 54 Stat. 919, 49 U. S. C. § 301.

2 This denial of power to the Commission appears in §§ 208 (a) and 209 (b) of Part II of the Act. 49 U. S. C. §§ 308 (a) and 309 (b).

3 Crescent Express Lines v. United States, 320 U. S. 401, 408-409.

common carriers will be curtailed or perhaps even destroyed. The tendency of the rules is thus to eliminate many small business ventures. It may be, as the Commission seems to think, that the Nation's motor-carrier business can be more efficiently accomplished by a few big companies that own all their equipment, than by a large number of small companies that obtain all or part of their equipment by lease. But if that governmental alteration in our business structure is to be ordained, Congress, not the Commission, should do the ordaining. B. The farmers of the Nation have for a long time been largely dependent upon reasonably priced motor transportation to get their produce to market.'

PERCENTAGES OF SELECTED FARM PRODUCTS TRANSPORTED TO PRINCIPAL MARKETS IN

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Transportation of Selected Agricultural Commodities to Leading Markets by Rail and Motor Truck, 1939-1950, United States Department of Agriculture, Bureau of Agricultural Economics (June 1951), Table 1, p. 10.

When the Motor Carrier Act was under consideration, there was much apprehension expressed lest regulation deprive farmers of this advantage. To meet this feeling, the bill was amended several times and finally was passed with the agricultural exemption set forth in § 203 (b). Except as to certain safety requirements § 203 (b) exempts from regulation motor vehicles of farmers and farm cooperatives used for farm purposes; the same exemption is also granted to all motor vehicles while being used to carry agricultural commodities. There can be no doubt that the Commission's new rules will drive many of these carriers of farm products out of business and that many others will be compelled to increase their rates. Section 207.4 of the new rules is rather obviously designed to make this exemption much less valuable. It forbids authorized carriers to lease motor trucks except for terms of at least 30 days, if the trucks are to be operated by owners or employees of owners. The Commission reported that this rule would completely prohibit trip-leasing. A very large part of all tripleasing takes place between regulated carriers and truckers who are exempt because they carry farm products. An illustration can be found in the carriage of Florida citrus fruits. On delivering fruit in northern states the practice of these exempt truckers has been to lease their motor vehicles to regulated carriers for the transportation of goods to Florida. Unless vehicles that bring citrus fruits north can make such arrangements they must go back to Florida empty. "Empty or partially loaded trucks on return trips may well drive the enterprise to the wall." United States v. Carolina Carriers Corp., 315 U. S. 475, 488. The Commission's rules make it impossible for these exempt carriers of agricultural products to get the advantage of a lease for a return haul. The result is destruction for a large part of that business.

The reason the Commission has adopted a rule so destructive of the agricultural exemption Congress granted is apparent from a colloquy which took place in the District Court. The attorney for the Commission was asked if it was wasteful for a truck to go back to Florida empty. With commendable candor he said: "It does seem uneconomical in requiring it to go back empty, but they can-the difficulty comes, I think, in letting it come up in the first place." In other words the "difficulty comes" because Congress agreed to exempt these farm products. This congressionally created "difficulty" is being cleared up

4 For example, in 1950:

5 For illustration, Congressman Walter Pierce of Oregon said, "Mr. Chairman, I have watched the debate very closely. I wonder why this bill? I am a farmer, living 300 miles from tidewater. I raise wheat and stock. The only relief I have ever seen in my 40 years on that farm from the terrific confiscatory railroad freight rates was when the trucks came.

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"The camel is certainly getting his nose into the tent, and this means the death of the motor transportation which the farmer has had and which has been the only relief that has come to him from the previous excessive railroad rates." 79 Cong. Rec. 12217; see also 12197-12198.

Trip leases can be made by motor carriers specifically exempted from the rules by the Commission-railroad motor carriers, express company motor carriers, and the Allied Van

Lines.

by the Commission. Its new rules against trip-leasing will force these agricultural carriers to raise their rates high enough to frustrate purposes underlying the agricultural exemption.'

C. The Commission has exempted railroads and express companies that carry goods for hire in motor vehicles from all of the regulations except the provisions of § 207.4 (c) and (d), which latter two provisions relate to inspection and identification of equipment. It is rather interesting that while the full Commission granted the railroads this amazing exemption, Division V, the Motor Carrier Division of the Commission, refused to allow it. The Commission at the same time refused to exempt from its new rules motor carriers whose operations were shown to be substantially identical with those performed by railroad and express carriers which the Commission left free from the burdens of the rules. Since the railroads and the independent motor carriers are in competition, it is not strange to find the railroads arguing here that while the railroads' exemption should be sustained, the new rules should be applied in all their vigor to the independent motor carriers. I know of no power which the Commission has to allow railroads which engage in the motor carrier business exemptions and preferences which are denied completely motor carriers not owned by railroads.

The Commission's rules as a whole fashion broad new national transportation policies different from and in conflict with those Congress adopted after mature consideration. I would reverse the judgments of the District Courts and direct that the rules be set aside as beyond the Commission's authority.

Hon. DWIGHT GRISWOLD,

INTERNATIONAL APPLE ASSOCIATION,
Washington 6, D. C. July 13, 1953.

Chairman, Subcommittee on H. R. 3203, Trip Leasing,

Senate Office Building, Washington, D. C.

DEAR SENATOR GRISWOLD: In connection with the hearing held on H. R. 3203, the trip-leasing bill as passed by the House of Representatives, there is a statement in the testimony of Commissioner James K. Knudson which I believe might lead you to an incorrect decision on this legislation.

The sentence to which I refer occurs on page 6, line 19, of his statement, and reads, *** rail carriers are still the principal transporters of agricultural commodities *

I am not speaking for all agricultural commodities. My concern is with fruits and vegetables which are a very important segment of agriculture and to which the use of the truck is vital in their distribution.

With my statement which was filed with your honorable committee (copy herewith), I submitted an exhibit. From it you will note that in 1918 rail carriers originated 15,506,247 tons of fresh fruits and vegetables; in the year 1920 they originated a little over 13 million tons (13,006,186); and in 1950 and 1952 they originated 12,374,171 and 12,330,064 tons, respectively. In order that I may not be charged with picking figures, I wish to say that data for 1949 and 1951 show, respectively, 13,682,276 and 12,440,404 tons of fresh fruits and vegetables originated by rail carriers.

In other words, for the past 3 years, carriers have originated 12,330,064 to 12,440,404 tons of fresh fruits and vegetables, or 80 percent of the tonnage loaded in 1918 or the high year of 1929 (15,691,716 tons), and 5 percent less than in the year 1920. In considering these loading figures, it must be remembered that we are feeding 50 million more people now than we were in 1920.

During the war years with truck movement rigidly controlled and gasoline rationed, the tonnage moved by rail rose, and the record shows 1945 with 18,061.768 tons. The peak in recent years was 19,074,598 in 1946. Since then the decline in movement by rail has been marked.

Since 1920 the population has increased nearly 50 percent, and the data for 1922, which was a favorable year for rail carriers, indicates that at that time they originated about 51 percent of the tonnage available. The records show, for the 10 years, 1932 to 1942, rail carriers never originated more than 50 percent of the tonnage transported, and in some years as low as 41 percent of the tonnage available. These figures are after deducting all tonnage grown for use in processing, also tonnage which was not moved in any form, to wit, cullage.

It

7 This statutory agricultural exemption reflects a congressional belief that “** would be better for the Congress to decide what should be exempted rather than to leave it in the hands of the Commission that might nullify the entire intentions of Congress ***" 79 Cong. Rec. 12225.

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