who are seriously concerned over the drastic effects of the ICC leasing regulations. Many of our members, too, are engaged in manufacturing and distribution fields and are vitally aware of the dangerous potentialities of these rules which they feel would serve no useful purpose in the interests of orderly regulation, but which would cause havoc in our overall industrial economy and would be a factor in slowing up the great industrial and farm activity of this Nation.

STATEMENT OF JOSEPH E. KELLER ON BEHALF OF PRIVATE CARRIER CONFERENCE OF AMERICAN TRUCKING ASSOCIATIONS, APRIL 23, 1953

My name is Joseph E. Keller. I am associated with the law firm of Dow, Lohnes & Albertson, 600 Munsey Building, Washington, D. C. I appear here today on behalf of the Private Carrier Conference of the American Trucking Associations, Inc. The conference has authorized me to make this statement in connection with H. R. 3203.

The Private Carrier Conference is an independent, autonomous association with offices at 1424 16th Street NW., Washington, D. C. Its direct membership is composed of over 1,300 firms which operate private motor trucks in the furtherance of their principal business activity, including mining, lumbering, farming, manufacturing, processing, distribution, etc. In addition, the conference speaks for all of the thousands of private carrier members of State trucking associations affiliated with the American Trucking Associations, Inc. There are 51 such State organizations, 1 in each State and the District of Columbia, with 2 such affiliated groups in the States of Illinois and California. Since 87 percent of the trucks on the Nation's streets and highways are said to be engaged in private carriage, the Private Carrier Conference, as you can see, represents a vast segment of truckowners in the United States.

The conference appears here today in support of H. R. 3203. It believes that enactment of this legislation is essential if the efficiency, economy, and flexibility of the motortruck is to be preserved. If H. R. 3203 is not given favorable consideration by the United States Congress, we feel that the free flow of commerce among the States will be dealt a severe blow and that artificial restraint upon free enterprise, especially as concerns the movement and marketing of farm products, will cause grave repercussions in our agricultural community and attendant increases in prices to consumers.

The Private Carrier Conference numbers among its members many farmers, livestock producers, fresh food and vegetable growers, fish and seafood processors, and other agricultural enterprises. These companies own their own motortruck units and haul their own products to market as private carriers. After unloading at destination, it is sometimes to their advantage to lease their vehicles to authorized common and contract carriers for the return trip. This arrangement has been built up over the years and has proven mutually beneficial to our farmer members as well as the authorized ICC carriers. The farmer is enabled to sell his products at a lower cost as a result of the efficient use of his vehicle in both directions. The common-carrier benefits in that he is not required to purchase additional equipment to meet peak demand. In most cases, the movement of agricultural commodities in one direction coincides with a peake movement of general commodities in the reverse direction, thus adding to the economic advantages of such leasing transactions.

Yet if remedial legislation is not enacted immediately, the leasing regulations promulgated by the Interstate Commerce Commission in Ex parte MC-43 and recently upheld by the United States Supreme Court, will be placed into effect, and historic leasing practices of the above-described nature will be prohibited. Such arbitrary restrictions will destroy completely economical transportation as we know it today, and will require, instead, shameful waste in manpower, equipment, and fuel, increased congestion on the highways by requiring 2 vehicles to do the job of 1, and will ultimately result only in increased cost of food products to the American housewife.

In defense of its restrictive regulations governing truck leasing, the Interstate Commerce Commission has cited safety of operations as a primary reason for such action. The record in the ICC proceeding, Ex parte MC-43, contains a detailed analysis by a number of authorized carriers who operate both leased and owned equipment. This shows owner-operators had safety records considerably better than employee drivers. These were detailed checks involving a period of about 2 years for each of 5 large carriers.

The Private Carrier Conference has consistently maintained its position with reference to trip leasing. In a statement made before the Senate Committee on Interstate and Foreign Commerce at its hearings on March 28, 1952, dealing with bills relative to domestic land and water transportation, it was specifically stated as follows:

"I would like to say a word about the leasing features of the bill, Mr. Chairman, because I think they are important. The leasing restrictions are also most discriminatory. The bill permits common or contract carriers to lease vehicles between themselves but not to or from private carriers. It is more restrictive than the ICC leasing orders now before the courts.

"Private carriers should be permitted to lease vehicles to or from common or contract carriers, as there are seasonal changes in the need for private carrier equipment which makes this most desirable. Private carriers should be permitted to lease specialized equipment, such as pressure trucks, when not using such equipment themselves and when for-hire carriers have need for such equipment.

"Trip leasing by private carriers should also be authorized, since this provides badly needed transport capacity for common carriers and agricultural commodities, and, just as in the case of hauling exempt commodities, assists in lowering costs to the American consumer. Liberalizing of the leasing restrictions would benefit for-hire carriers by providing them with added equipment for their peak periods without the necessity and burden of permanently augmenting their fleets. This would provide greater flexibility and make for the most efficient and economical use of existing transport facilities."

It should be a matter of great interest to this committee that trip leasing, as it is known today, grew as a transportation practice pursuant to the express direction of the Office of Defense Transportation during World War II. At that time, ODT found it to be absolutely essential to not only authorize, but to encourage trip leasing of vehicles. The experience gained during this emergency was valuable indeed and added greatly to the improved transportation facilities which came out of the war effort. The Interstate Commerce Commission, another Government agency, now seeks to strike down all of the gains in efficiency and flexibility which we have found to result from wise trip-leasing practices. Certainly, if trip leasing was essential during an emergency period, its value and broad benefits to the American public certainly ought to be apparent and utilized during the present emergency also.

The Private Carrier Conference also advocates passage of this legislation as a matter of principle. It feels that the Interstate Commerce Commission has invaded a basic right of management in imposing such strict limitations on the rights of common and contract carriers in making available additional transportation facilities when they are so badly needed by the public. Such ICC regulations constitute a monumental barrier to progress and development of America's transportation and distribution system. The promulgation of such rules serves only to bind and shackle a vast segment of our Nation's transportation system. By so restricting progress, literally thousands of individuals will be forced to return to antiquated and uneconomic methods of marketing and distribution. Such unsound, arbitrary intervention by Government would not serve the public interest, but would succeed only in eliminating an economical and indispensable transportation facility to carriers everywhere, and increase the cost of living in a dangerous inflationary era through which our Nation is now passing.

The Private Carrier Conference feels that is is essential that private carriers of this Nation continue to have the freedom of choice in transportation which they have enjoyed in the past and which has made such an outstanding contribution to the growth of the American economy. The trip-leasing regulations promulgated by the ICC strike at the very heart of this freedom of choice in transportation. But, more than that, they do this irreparable harm without any consequential gain to any particular segment of the transportation community. Trip leasing should be permitted and the Interstate Commerce Commission should be restrained from invoking the restrictive, unwarranted, unjustified, and unreasonable regulations which they have issued. The courts and the Commission have refused us relief in the matter. We must now look to the Congress for the kind of relief from this intolerable situation which we feel will be forthcoming. We again urge upon you the favorable recommendation of this legislation and its swift passage by Congress.

HELM'S NEW YORK PITTSBURGH MOTOR EXPRESS, INC.,
Pittsburgh, Pa., July 6, 1953.

Hon. DWIGHT GRISWOLD,
United States Senate,

Washington, D. C.

MY DEAR SENATOR: Two identical bills have been introduced before the House and Senate, H. R. 3203 and S. 925, making a proposal to circumvent regulations prescribed by the Interstate Commerce Commission after hearing and a decision of the United States Supreme Court in the so-called trip-leasing case, involving the use of leased vehicles by motor carriers subject to the Interstate Commerce Act, and it is the purpose of this letter, as a motor carrier, to state our clear opposition to both bills and to ask that they be defeated on the floor of the United States Senate, if they should come to hearing there. We attach hereto a statement of our position on this matter which we hope you will read.

The House of Representatives has already passed H. R. 3203, over the protests of persons like ourselves and others interested in the development of a sound national transportation policy and a decent respect for safety on the highways, and for regulated practices in the business of a motor-carrier operation in interstate commerce. Against the few of us who have spoken out as opposed to these bills, there are arrayed a very powerful group of influences represented by farm blocs, owners of trucking businesses who stand to profit immensely from the legalizing of an unlawful situation and a method of doing business. which is abhorrent to decency, safety, and shows a total lack of disregard for the public interest in all respects. All of these people stand to make personal gains from the passage of these bills. They have apparently influenced many Representatives and perhaps some Senators, too, to do their bidding against the will of the American people, as expressed by a regulatory body created by Congress, namely, the Interstate Commerce Commission, and by the highest Court in the land.

There is an unseeming haste to rush these bills through the legislative processes and make them into law before any real organized effort can be made against them. While the railroads and representatives of union labor have opposed these bills, their opposition, standing alone, has not been great enough to offset the influence brought to bear for their passage, but it is the American people as a whole who stand to be hurt in this matter, and it is on behalf of all of them, rather than as a motor carirer, that I speak to you in opposition to these bills.

We personally would stand to gain with their passage, by insuring to ourselves a greater profit than before and easing of some possibly burdensome regulations upon us, and it would appear that under those circumstances we should favor this bill, but we do not do so for various reasons which will be made clear to you.

We believe that the business of an interstate motor carrier is affected with a public interest, and that those who are proprietors in this type of business cannot callously disregard their responsibility to the public in the operation of motor vehicles in interstate commerce on the highways of the United States. The gypsy type of operation, which began with the shortage of equipment during the recent World War, having once served a temporarily useful purpose, created an opportunity for some persons whose ruthless disregard of the public interest and paramount interest in their own profits caused them to develop and expand this method of doing business.

Now the Congress is being asked to legalize a crime against the American people by passage of this legislation, which would permit this type of operation to be made lawful, and tie the hands of the Interstate Commerce Commission and the courts. If the people generally knew what was going on, we believe they would rise in their wrath against any Congress which passed such a bill and that day will come, should it be passed, when that wrath will be rightly expressed, through the press, radio, and by direct communication to you, criticizing a failure to prevent the law from protecting them.

Since you may not know a great deal about what is meant by a gypsy operation, you will find attached to our statement a copy of a dispatch to the New York Herald Tribune with respect to a truck accident which took place at Linden, N. J., recently. The incident referred to is not an isolated type of case. It speaks eloquently for itself. This is gypsy operation and this is what America faces on its highways if these bills are callously passed in total disregard of that public interest.

It is hoped that you, as a representative of all of the people and as a Senator of the highest legislative body in the world, will reject this vicious attempt to

create conditions on the American highway which defy description, endanger life, and which serve the ends of greed and avarice in total disregard of the rights of others.

I hope you will be found opposing this legislation and helping to serve to defeat it, should it ever come to the floor of the United States Senate.

Sincerely yours,

A. MARKOWITZ, General Traffic Manager.

STATEMENT OF ALEXANDER MARKOWITZ, GENERAL TRAFFIC MANAGER, HELM'S NEW YORK-PITTSBURGH MOTOR EXPRESS, INC.

This statement is submitted by Alexander Markowitz, general traffic manager for Helm's New York-Pittsburgh Motor Express, Inc., a motor common carrier holding a certificate of public convenience and necessity from the Interstate Commerce Commission to transport property over regular routes.

My experience in the transportation business extends over a period of 25 years, and I have been employed by a railroad, 2 shippers, 2 motor carriers, and am a registered practitioner before the Interstate Commerce Commission since 1934, and have participated in numerous proceedings and represented others on many occasions. I testified before the Interstate Commerce Commission in the leasing investigation, ex parte MC-43. A copy of my principal exhibit of record, incorporating my recommendations to the Commission for dealing with this problem, is attached to this statement for your ready information. A large number of such recommendations were adopted by the Commission in its decision.

I am opposed to the legislation before you. It appears to be an attempt on the part of a group of persons, who have in the past profited from an arrangement which, when it was entered into, was unlawful, was found to be unlawful, and proposed to be regulated by the Interstate Commerce Commission by rules, which were challenged and upheld by the Supreme Court. These persons, by the proposed legislation, seek to deprive the Commission of the power to regulate the duration of such a lease and the method of compensation. They are aided in this effort by a group of private carriers, transporting principally agricultural products in one direction, and relying upon compensation received from certificated carriers utilizing their equipment upon the return of the vehicle, through the device of a "trip" lease, and compensation just sufficient to cover the principal vehicle costs of fuel, mileage, and meals, and as much more as can be exacted in addition thereto, usually at so much per ton, per mile, or related, usually by percentage to the rates and charges received by the certificated carrier for handling the shipment.

We commend to you the particular language of the Supreme Court, dealing with the agricultural exemption, section 203 (b) (4a) (5) (6) of the Interstate Commerce Act, wherein the Court stated that it was not intended to be used as a device to promote the practice of trip leasing, by relying upon loads from certificated carriers. The Commission has also permitted certificated carriers to transport agricultural commodities, provided that the vehicle is solely utilized for the trip for that purpose without observing the tariff or certificating provisions of the act (I. C. C. v. Service Trucking Co., Inc., 186 F. (2d) 400; I. C. C. v. Dunn, 166 F. (2d) 116).

Certificated common carriers also provide tariffs for the transportation of agricultural products, which are on file with the Commission and are open to the use of all on equal terms. The agricultural exemption, according to its legislative history, was provided to permit the farmer to transport his own goods or those of his cooperative to market without submitting to the regulation required of public carriers. A separate classification of his activities was thus established, and there was no intent to permit him to augment the facilities of certificated carriers, or to operate as or for a public carrier in any way. The proposed legislation would render the agricultural exemption in the Interstate Commerce Act ineffective.

The line between public and private carriage would be further breached, and the administration of the Interstate Commerce Act made more difficult, while the carrying out of the national transportation policy would seem to require a clear separation. The Commission's jurisdiction over leasing practices is sufficiently flexible, and the Commission's knowledge and wisdom, as an arm of Congress, will permit both of relaxing and tightening of the leasing rules, as required in the public interest from time to time. The Commission should not be deprived by legislation of its administrative and judicial powers as proposed here. The duration of a lease is a very important consideration in determining its bona fide

nature. The Commission should not be deprived of the right of determination of the bona fide nature of the whole arrangement by depriving it of the right to deal with 1 or 2 of the important terms and conditions of the lease.

Trip leasing is the evil. The Commission and the Supreme Court found it so. Does the Congress wish to legislate evil into law? The record before the courts and the Commission is replete with evidence of these evils. They do not require repeating here. You can read this record for yourselves. It is a shameful and degrading one, in which one group of citizens engages in economic exploitation of another group, purely for its own selfish interest and in complete disregard of the public interest.

This is what the Congress is being asked to perpetuate.

As to the method of compensation, the Commission has only said that this compensation may not be computed on the basis of any division or percentage of any applicable rate or rates on any commodity or commodities transported, or on a division or percentage of any revenue earned by the vehicle during the period for which the lease is effective (rule 207.4 (5), Commission's proposed rules). The conclusion then is inescapable. The proponents of this bill want to engage in activities of the very nature which the Commission's rules propose to forbid.

Sections 216 (c), 216 (f) of the Interstate Commerce Act reserves the division of through rates to certificated carriers maintaining through rates. This privilege cannot be extended lawfully to arrangements between carriers and noncarriers. That, however, is what is proposed here. Rates and charges of certificated carriers must be just and reasonable, and not otherwise unlawful, and established under honest, economical, and efficient management. It is not proposed to repeal or modify these sections of the Interstate Commerce Act. Dishonest rate making, if not dishonest management, is proposed to be legislated as lawful in this proposed bill. Carriers having an ownership and investment in their own equipment, obligated to dedicate the use of such equipment to the general public requiring their services, are proposed to be placed at the mercy of "gypsy" competition by which rates are made with a knowledge of how much or how little the gypsy will accept as his "portion."

When these rates find their way into motortruck tariffs, always on the low side, they are in turn set up as pressures for adjustments to and from other points where gypsy competition does not exist, because of disadvantages thus created, and are in turn relied upon by the rail carriers in undertaking to meet this competition. Rail rate reductions have already been made or proposed on such articles as linoleum, candy, iron and steel articles, aluminum, rayon, cigarettes, brass and bronze, alcoholic liquors, roofing materials, sugar, with the result that both rail and truck lines have, during the past several years, sought and obtained emergency action to increase their rates generally by more than 50 percent. Who is kidding who?

The proposed legislation then would have a direct adverse effect on the Commission's ratemaking power and would serve to weaken it, and circumvent the national transportation policy by confusing it. The Congress has in its care since 1887, the regulation of transportation in interstate or foreign commerce, beginning with the railroads, then the trucklines, followed by the domestic water carriers, and then the freight forwarders. This is neither a new undertaking or an unimportant one, for transportation is the very lifeline of the Nation. You have, in turn, created the Interstate Commerce Commission to carry out your will, as expressed in the national transportation policy. The proposed legislation would weaken both the will and the policy by negating the power of the Commission to act to support it. The public interest would be sacrificed to selfish private interest.

This is wrong. Those who lost their case before the Commission and the Supreme Court are powerfully organized and powerfully backed in this effort to obtain, by legislation from the Congress, what they could not obtain in a lawful manner. They propose to change the rules, making law to fit their selfish ends, and the Congress, which represents the whole people, is being asked to legislate against their interest to accommodate the few for their gain. You have historically rejected such legislation. You should do so now.

We have extended our remarks by the attachments hereto, which are made a part of this statement.

1 I. and S. M-4269, Fresh Meats, Louisville, Ky., to New York and Pennsylvania.