RESOLUTION 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, bours 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 wihch would impair the power of regulatory agencies over the leasing of motor equipment. Unanimously adopted by the Mountain-Pacific States Conference of Public Service Commissioners at Yellowstone Park, Wyoming, June 25, 1953. Washington, Oregon, California, Montana, Idaho, Utah, Wyoming, Senator GRISWOLD. I believe Mr. Matt Triggs, assistant legislative director of the American Farm Bureau Federation, is our first witWe will be glad to hear from you, Mr. Triggs. ness. STATEMENT OF MATT TRIGGS, ASSISTANT LEGISLATIVE Mr. TRIGGS. My name is Matt Triggs. I am assistant legislative director of the American Farm Bureau Federation. The other gentlemen in our group are Mr. Charles F. Hawes, representing the National Council of Farmer Cooperatives; Mr. Lloyd Halvorson, representing the National Grange; and Mr. Angus McDonald, representing the National Farmers Union. The chairman of the subcommittee has advised us that the hearing record of the House Interstate and Foreign Commerce Committee on H. R. 3203 is to be incorporated in this hearing, that it is desired not to duplicate such hearings, but rather to bring the record up to date. In order to accomplish this objective, the representatives of the four farm organizations named above have developed what is essentially one statement. We have attempted to avoid duplication of material already incorporated in the House Commerce Committee hearings. Each of us will deal with certain aspects of the problem. In view of the fact that this is one integrated statement by the four of us, it is quite possible that questions that may occur to you in connection with the testimony of the first witnesses may be answered in the testimony of subsequent witnesses. In a further effort to accomplish the chairman's suggestion, we have contacted all of the other organizations that participated as proponents of H. R. 3203 in the House hearings that we could reach in the time available. Most of such organizations have indicated their willingness that the proponents' testimony be handled in this manner, although some of them may file statements. I have listed below a complete list of the names of the organizations-excluding individuals and individual concerns-who testified or filed statement favoring the enactment of H. R. 3203 in the House committee hearings: American Farm Bureau Federation The National Grange National Farmers Union National Council of Farmers Cooperatives United Fresh Fruit and Vegetable Association National Livestock Producers Association American National Cattlemen's Association National Wool Growers Association Texas and Southwestern Cattle Raisers Association Western Growers Association Idaho Shippers Association Northwest Horticultural Council Washington State Apple Commission Rogue River Valley Traffic Association Growers and Shippers League of Florida American Association of Nurserymen, Inc. Private Carrier Conference of American Trucking Associations, Inc. California Grape and Tree Fruit League Dairy Industry Committee Florida Fruit and Vegetable Association Georgia Peach Industry Vegetable Growers Association of America, Inc. National Association of Commissioners, Secretaries and Directors of Agriculture United States Department of Agriculture Missouri Farmers Association National Association of Hothouse Vegetable Growers National Council of Private Motor Truck Owners Nation Onion Association Texas Citrus and Vegetable Growers and Shippers Association Motor Carrier Leasing Conference Florida Citrus Mutual Florida Citrus Commission Florida Growers Association We would like to begin by a brief background summary of the situation. The Interstate Commerce Commission, after hearings, issued an order known as MC-43 which regulated the leasing practices of trucks leased by truck common or contract carriers. This regulation provided, among other things, that all leases of equipment shall be in writing and signed by the parties; shall specify the period of the lease; shall provide for exclusive possession, control, and use of the equipment and the complete assumption of responsibility therefor by the authorized carrier; shall specify the compensation to be paid by the lessee for the rental of the equipment which shall not be on a percentage division of revenue basis; that a copy of such lease shall be carried in the vehicle; that possession and return of equipment shall be evidenced by written receipt; that the equipment shall be inspected by the lessee, and a report of vehicle inspection maintained; that the leased vehicle shall be identified by the identification of the lessee; that the lessee shall require the driver to provide a certificate of physical examination showing compliance with certain standards; that the lessee shall ascertain that the driver is otherwise qualified under certain Commission regulations; that detailed records shall be maintained relative to the use of leased equipment; and that after a period of 6 months from the date of the order, all such leases shall be for at least 30 days. The effective date of the order was deferred by court action, but in January of this year, the Supreme Court held that the order of the Commission was within the Commission's implied powers under the Interstate Commerce Act. H. R. 3203, as approved by the House of Representatives, would affirm the intent of Congress, that the Commission is authorized to regulate the leasing practice for the purpose of establishing carrier responsibility and compliance with regulations, with the exception that the Commission shall not regulate the duration of leases, or fix the amount paid for equipment rental. In other words, the bill would permit the MC-43 order to go into effect with the sole exception of the 30-day lease provision. A number of farm organizations had petitioned the Commission to defer action with respect to the effective date of MC-43 until such time as the Congress had had an opportunity to review the situation. However, after the hearing in the House Commerce Committee had been ended, but before the committee had taken action, the Commission issued an order providing that the effective date of MC-43 would be September 1, 1953. At the same time, the Commission issued an amendment to the order providing that the 30-day limitation would not apply in those cases where a farmer, after having delivered an exempt commodity, desired to lease his vehicle to an authorized carrier to return to a destination within the State of his origin. The Commission's purpose in amending the order in this respect was apparently to placate farm people. It does not, however, at all meet the needs of farm people. Less than 1 percent of trip-leasing is undertaken by farmers. The practice of trip-leasing is practiced by for-hire carriers. Nevertheless, farmers pay the costs associated with the uneconomic use of equipment of for-hire carriers which would be involved by a prohibition of trip-leasing. In its consideration of H. R. 3203, the House Commerce Committee considered various amendments to the bill offered from various sources. It rejected all such amendments, with the exception of an . amendment which clarifies the right of the Commission to regulate the leasing practices of authorized carriers except as to the duration of leases and the fixing of compensation paid for rental of equipment. We the farm organizations—are in thorough accord with the bill, as amended. Five members of the House Commerce Committee did not agree with the report of the majority, and filed a minority report. This minority group concurred with the view of the majority of the committee that protection should be afforded for single-trip leasing of owner-operated trucks for bona fide return movements following movements of exempt products to market but indicated their intention to propose an amendment to the House which would restrict the trip-leasing practice to trucks which had just completed a trip hauling exempt commodities. Such an amendment was offered by Representative Hinshaw. This amendment was opposed by the farm organizations. Mr. Hawes will review this amendment in detail and summarize the reasons it was opposed by farm organizations. The Hinshaw amendment was defeated in the House 136 to 38. Following the defeat of the amendment, the bill, as reported by the House Commerce Committee, was approved by an overwhelming voice vote. From time to time in the hearings in the House Commerce Committee, and in the House debate, appeared the argument that the Congress had delegated to the Commission its authority to regulate transportation and that it was inappropriate for the Congress to disturb the Commission's rulings. This theme appeared in a lead editorial in the Traffic World which commented that in the trip-leasing bill— *** we have a threatened interference with lawful regulation *** which, if resorted to often enough by those unsuccessful in litigation *** may break down regulation of carriers to the point where the welfare of transportation as a whole may be affected adversely. We certainly do not agree with this thesis. If this idea were generally accepted, the Congress would have to abstain from amendment of regulatory laws. We submit that it is proper and desirable that the Congress examine the manner in which regulatory bodies perform their responsibilities; and that if, in the judgment of the Congress, the basic authority of such regulatory bodies should be changed, that it is eminently appropriate that the Congress do so. The American Farm Bureau Federation recommends the enactment of H. R. 3203. At our most recent annual meeting, the following resolution was approved: We are opposed to weakening the agricultural exemption provisions of the Motor Carrier Act. These provisions permit flexibility of movement and rates for agricultural commodities which are beneficial both to farmers and the consuming public. Common carriers cannot provide a comparable service in many circumstances. We will oppose efforts to eliminate trip-leasing of exempt trucks by regulated carriers. The effect of such elimination would be substantially to increase rates for hauling farm products, to put out of business many truckers who provide an economic and essential service, and thus to increase distribution costs. Mr. Chairman, the next portion of our presentation, if that is your pleasure, will be by Mr. Lloyd Halvorson of the National Grange. Senator GRISWOLD. Mr. Halvorson. STATEMENT OF LLOYD C. HALVORSON, ECONOMIST, THE NATIONAL GRANGE Mr. HALVORSON. Mr. Chairman, and members of the committee, Grange members throughout the country feel very strongly that the ICC proposed ban on trip-leasing would be very detrimental and would be unsound national transportation policy. Because the order is scheduled to go into effect September 1, 1953, we urge that H. R. 3203 be enacted into law before Congress adjourns. The full Grange statement on trip-leasing is found in the House hearings. We are glad there is such unanimity among farm organizations and related groups that it is possible for us to divide up the treatment of questions and developments that have come about since the House hearings. I will deal with the matter of whether or not it is sound national transportation policy to assure continuance of tripleasing. The importance to farmers and consumers alike of the agricultural exemption, provided by Congress in the Motor Carrier Act of 1935, has been well established. The hearings before the House Interstate and Foreign Commerce Committee brought out very clearly how the ICC-proposed ban on trip-leasing would, in effect, nullify the agricultural exemption provided by Congress. Congressman Klein, in the House debate, said: I felt it was incumbent upon me to advise the membership of the House that the entire committee is not unanimous on this-support of H. R. 3203. I think, however, we are unanimous in the idea that something ought to be done. Congressman Hinshaw said: I grant that the Committee on Interstate and Foreign Commerce is upset >ver the fact that the Commission. would issue such an order. I, myself, do not agree with the order. The importance of the agricultural exemption to farmers and consumers is generally recognized. Another witness will show why the Hinshaw amendment, which purported to preserve the agricultural exemption, would fail to do so. Last year this committee reorted out a bill which became law which broadened agricultural exemptions. In fact, this committee took a bill, S. 2357, originally designed to restrict or practically abolish agricultural exemption and, instead, used that same bill to broaden agricultural exemption to include certain horticultural products. Because the agricultural exemption is so necessary for consumers and farmers, H. R. 3203 is sound national transportation policy for that reason alone. However, there are many additional reasons, as well. Trip-leasing is essential to efficient, economical and flexible truck transpotration. In this regard, two ICC Commissioners wrote a letter dated March 24, 1953, as follows: During the war, directives of the Office of Defense Transportation, and orders of this Commission, intended to make the fullest use of motor-vehicle capacity and conserve fuel and tires, sanctioned many practices which were permitted only because of the emergency. As a result, leasing among authorized carriers became more prevalent and widespread. In its decision, the Supreme Court said: The necessity of maximum use of transportation resources during the war postponed any action thereafter until 1947. These are, in our opinion, excellent testimonials to the economy inherent in trip-leasing. We do not believe in a rule which forces some trucks to run empty in one direction. Regulated motor carriers have emergency periods and peak demands. The device of trip-leasing enables them to meet these peak demands without investing in a stock of reserve equipment and without the cost of licensing, maintaining, and storing it. We believe that Congress intended economical use of transportation equipment in times of peace, as well as war. It is a well-known fact that the railroads are opposed to trip leasing and want MC-43 to go into effect, as it. It appears to us to be a desire on the part of the railroads to handicap another form of transportation in order that they might gain some more traffic-traffic which, in many cases, they are ill-equipped to handle. We must let the inherent advantages of each mode of transportation develop as it |