before the House committee, which has been incorporated here, you will be convinced that the measure as approved by the House is in the form in which it should become a law.

The Interstate Commerce Commission has set a deadline of September 1 in connection with this matter, so that time is the essence of relief. We earnestly urge your committee to approve this legislation immediately, and report it to the Senate for passage. We further respectfully request that it receive consideration by the Senate and be enacted into law before adjournment of the present session of Congress.

I thank you for your kindness, Mr. Chairman.

Senator GRISWOLD. Thank you, Mr. Ellis. Mr. Ehalt.

STATEMENT OF W. C. EHALT, DIRECTOR OF TRAFFIC, NATIONAL FISHERIES INSTITUTE, INC.

Mr. EHALT. My name is William C. Ehalt, 43 Nassau Boulevard, Garden City, Long Island, N. Y.

I appear in behalf of the National Fisheries Institute, Inc., a national trade organization comprised of producers, distributors, and processors of fishery products.

The position of the fisheries industry with respect to the Interstate Commerce Commission's leasing rules has been explained in the prepared statement of V. L. Hodges of Norfolk, Va., chairman of the institute's traffic committee, whose testimony was presented before the House Committee on Interstate and Foreign Commerce in support of H. R. 3203.

It is respectfully requested that your committee accept this statement in support of H. R. 3203.

There is one point made on page 6 of this statement which requires modification due to recent developments. Mr. Hodges stated that the industry not only was faced with a curtailment of truck service due to the proposed leasing rules, but that there was a possibility of being deprived of express service upon expiration of the present contract between the Railway Express Agency and the owning railroads. During the recent Interstate Commerce Commission hearings in Ex parte 185, it was disclosed that most of the carriers owning the Railway Express Agency had agreed to continue express operations subsequent to February 28, 1954. It would appear, therefore, that consideration need not be given to this point. However, there currently is pending before the Interstate Commerce Commission, a petition for a 23 percent increase in express rates and charges. In the event the Commission grants the full or a substantial portion of the requested increase, there undoubtedly will be a tremendous diversion of fish traffic from express to exempt motor carriers, because the express rates have reached a level where our industry is finding it increasingly difficult to ship to many of the markets formerly served by express. About half of our total volume is shipped via nonregulated carriers and practically all of the balance moves in express service. In the event that express rates are increased again, and Congress fails to protect our exempt truckers from the infamous leasing rules, the fisheries industry will surely be caught in an unprecedented squeeze-play-one which will deal a serious blow to our concerted efforts to make available to the price-conscious housewife a lower-priced high-protein food.

It must be borne in mind that we oppose only the 30-day leasing restrictions of these rules. We encourage the promulgation and enforcement of safety regulations and agree with the House Committee that if the other provisions of the Commission's leasing rules are adequartely enforced, the 30-day leasing rule will be unnecessary. (H. Rept. 519, 83d Cong., 1st sess., p. 2.)

In effect, the Commission is destroying one legislative policy to facilitate the enforcement of others. The benefactors of the agricultural and fishery exemptions contained in section 203 (b) (6) of the Interstate Commerce Act have repeatedly been forced to defend and protect this legislative exemption in the courts and before administrative agencies. Although the present controversy purportedly is based on enforcement of existing regulations, in reality, it is a backdoor approach to the never-ending attempt to certain interests to hamper and restrict the exempt trucking operations upon which the agricultural and fishery industries are so vitally dependent.

All we seek here, is a reaffirmance of the exemption of those able and dependable exempt truckers serving our industry. Regulated common carriers are not sufficiently equipped to adequately protect our commodities in transit, or to furnish the expedited and flexible services offered by the exempt truckers. The experience these truckers have gained in handling perishables during the past years cannot be replaced by an administrative ruling which fails to give consideration to the numerous practical aspects of the problem. Apparently, the sole concern of the Commission is with enforcement of safety and operating regulations. It is also the duty of the Commission to weigh the effects of its rules and regulations upon the shipping and consuming public, and to pay particular attention to the mandates of Congress. That is why we are before you today-to have Congress, once again, make it unquestionably clear, that our fishery products need the services of nonregulated carriers, and that these services are not to be interrupted or hampered by direct or indirect regulations.

Your earnest cooperation in protecting the fisheries industry and fish-consuming public from unwarranted and shortsighted restrictions, is respectfully requested.

Senator GRISWOLD. Thank you very much, Mr. Ehalt. I think the last witness is Mr. W. D. Johnson, representing the Order of Railway Conductors.

STATEMENTS OF J. T. CORBETT, BROTHERHOOD OF LOCOMOTIVE ENGINEERS; J. A. McBRIDE, BROTHERHOOD OF LOCOMOTIVE FIREMEN AND ENGINEMEN; W. D. JOHNSON, ORDER OF RAILWAY CONDUCTORS; AND HARRY SEE, BROTHERHOOD OF RAILROAD TRAINMEN

Mr. JOHNSON. My name is W. D. Johnson. I am the national legislative representative for the Order of Railway Conductors. I reside in Washington, D. C., and maintain an office at 10 Independence Avenue.

I am authorized to represent the Brotherhood of Locomotive Firemen and Enginemen, the Order of Railway Conductors, and the Brotherhood of Railroad Trainmen, and submit this joint statement as a supplement to the statement submitted to the House committee,

in further opposition to H. R. 3203, now before you for consideration. The total membership of the four above-listed organizations is approximately 450,000.

The railroad employees we represent are being deprived of work to which they are normally entitled and their employers are being adversely affected financially by a practice in connection with transportation which has not been approved by the Congress and is contrary to the national transportation policy which the Congress has adopted. We refer to the large number of itinerant owner-operators of trucks who roam the country transporting general freight for compensation without having received any authority whatever from the Interstate Commerce Commission.

The Congress has provided in part II of the Interstate Commerce Act that no person shall engage in interstate or foreign commerce on the public highways for compensation unless such person holds a certificate or permit. Excepted from this requirement are motor vehicles transporting livestock, fish, or agricultural commodities "if such motor vehicles are not used in carrying any other property, or passengers, for compensation." These itinerant truckers occasionally transport agricultural commodities but mainly they are engaged in transportation of general freight. They evade the purpose of the statute by making an arrangement, usually called a trip lease, with a carrier holding a certificate issued by the Interstate Commerce Commission. Theoretically the authorized carrier is performing the transportation, but actually it has practically no control over the trucker except that he must make delivery as directed in order to obtain his compensation. It is generally admitted that the trucker does not observe the safety or hours-of-service regulations of the Commission or directions received from the carrier.

These truck owners generally carry freight on the billing of some carrier holding a certificate from the Commission. There are large numbers of them, and their operations have prevented the effective regulation of motor transportation which was intended by the Congress when it enacted the Motor Carrier Act in 1935.

It appears that the Interstate Commerce Commission has attempted to prevent the abuses which are occurring as a result of these operations. It instituted an investigation and held extensive hearings at which all interests affected by transportation in motor vehicles not owned by authorized carriers were given and took the opportunity to present their views. The Commission adopted regulations concerning such use of vehicles, including one which prohibited an authorized carrier from permitting such itinerant truck owners from operating on its billing for single trips. The bill now before you, H. R. 3203, would take from the Commission the power to prevent such use. The use of the term "trip lease" as applying to such transportation is unfortunate. The practice concerning which we complain and which is intended to be prohibited by the leasing regulations is only that arrangement by which a driver and his vehicle are employed by an authorized carrier to transport general freight on the billing of the authorized carrier. Insofar as it affects a trucker who has hauled agricultural commodities in one direction, the Congress had no intention of permitting him to engage in transportation of general freight in the reverse direction, because the exemption applies only to

motor vehicles which are not used in carrying any other property for compensation. The railroad employees object to unregulated competition from such itinerant and often irresponsible truckowners, and are opposed to the enactment of H. R. 3203. The same consideration that impelled the Congress to enact the Motor Carrier Act, 1935, and thus place motor transportation under regulation should now induce the Congress to reject H. R. 3203. If it is not rejected, the aims and objectives of motor carriers under the Motor Carrier Act will be defeated.

We think this bill would encourage political ratemaking in its worst form by passing a law to counteract a decision of the Supreme Court based on an order of the Interstate Commerce Commission. The Interstate Commerce Commission should be permitted to adjust these leasing rules as the circumstances require. The Commission should be guided by the policy of Congress, but its orders should not be set aside by law to satisfy a minority group, as this bill would do. Therefore, Mr. Chairman and members of the committee, we most respectfully urge you to render an unfavorable report on H. R. 3203. That concludes my statement, Mr. Chairman. I thank you for the time you have given me.

Senator GRISWOLD. Thank you, Mr. Johnson. Is Mr. Speyer present?

Mr. SPEYER. Yes.

Senator GRISWOLD. Did you desire to be heard?

Mr. SPEYER. I would like to be.

Senator GRISWOLD. Will it be brief?

Mr. SPEYER. Very brief.

Senator GRISWOLD. Very well.

STATEMENT OF H. W. SPEYER, PRESIDENT AND GENERAL MANAGER, AAA TRANSPORTATION, INC., INDIANAPOLIS, IND.

Mr. SPEYER. Mr. Chairman, I have this prepared statement. Senator GRISWOLD. I do not know if we have time for you to proceed with that. Do you wish to have this incorporated in the record? Mr. SPEYER. Yes.

Senator GRISWOLD. This entire statement will be incorporated in the committee record.

(The statement referred to is as follows:)

STATEMENT OF H. W. SPEYER, PRESIDENT AND GENERAL MANAGER, A A A TRANSPORTATION, INC., INDIANAPOLIS IND.

This statement covers the following points:

(1) Can ICC nullify the enactment of H. R. 3203 or S. 925?

(2) To what extent did ICC's phrasing of motor carrier operating rights: "To return without transportation for compensation to point of origin" influence and practically compel the employment of owner-operators by many regulated carriers?

(3) What causes the division of views on the merits of MC 43 within the ranks of the regulated motor carriers?

(4) To what extent is the feeling of job insecurity on the part of many ICC employees responsible for the enactment of MC 43?

(5) Are the railroads, etc., engaged in promoting safety or are they merely trying to regain lost business by regulating the inherent efficiencies of truck transportation out of the motor transportation industry-in order to improve their own competitive position?

36105-53-7

(6) What did Mr. Joseph B. Eastman, Chairman of the ICC, say about the status of the owner-operator and ICC Bureau of Motor Carriers notorious ruling No. 4?

Several questions from the members of the House Committee on Interstate and Foreign Commerce revealed a considerable amount of misunderstanding in regard to

(a) The matter of operating rights and the scope of such operating rights of ICC regulated carriers.

(b) What extent the character of such operating rights had a tendency to cause a carrier to operate more or less with leased equipment, or to cause him to condemn leased equipment entirely.

(c) What is an owner-operator (a gypsy or a wildcatter) and what is his normal and proper function in the scheme of trucking?

Let us face the fact that the ICC itself causes many carriers to operate with leased equipment rather than with owned equipment because the greatest number of all operating rights are limited. They expressly say on the end of the outline of authority that the carrier shall return with no transportation for compensation to point of origin.

Broadly speaking, there have been issued by ICC three main types of authori

ties:

(1) The general commodity authority, which is, as a rule, a two-way authority, usually between certain named points (rarely larger areas). They read: e. g., "General commodities between Chicago and Cincinnati, Ohio, and all intermediate points in Indiana over Highway U. S. 52." Please note that such general commodity carriers are almost without exception tied down to certain routes, which they must not leave.

(2) The specified commodity carrier authority, which may be a common or a contract carrier authority, is usually given one or more definite named "points of origin and destination," or a "point" on one end and an "area" on the other.

The writer of this statement himself stacked some $25,000 in lawyers fees and 7 years of legal fights upon the theory that Congress never intended such a ridiculous hairsplitting interpretation, particularly not for those who had in their grandfather's day (operating prior to the Motor Carrier Act of 1935) held themselves out to haul anything, anywhere, anytime. He assumed and had been so advised by Congressman Louis Ludlow that Congress intended every carrier to "carry on his business as heretofore" and practice the same type of operations. But what the ICC did was to freeze him not to the type of business but to the very specific operations which he was performing on the grandfather date. (This compares to licensing a dentist not to practice general dentistry, but to license him to treat only right front upper teeth or only lower left molars and may he never be caught to treat a tooth he was not specifically licensed to treat in his operating authority.)

Thousands of carriers perished and are still perishing, just because their customer went out of business on the particular point they were licensed to serve and in many cases-when the customer moved to a new location--the ICC even refused to transfer the operating rights to the new location and so they let the carrier shrivel on the vine. Many became then owner-operators for other authorized carriers, in order not to lose their equipment.

But when the ICC's ideas of hairsplitting authorities were finally tested in the United States Supreme Court, that Court, as usual, upheld the ICC and only those points were granted to which a carrier could show substantial movements, and he was denied the right to continue operations, which were not substantial enough in the opinion of ICC.

In this manner a very few, very large two-way carrier authorities were created a few medimum-sized carriers, and a lot of very small carriers, who held only very fragmentary rights. Then ICC-so to speak-closed the door, and getting any operating rights at this time (except adjustments and extensions) is almost impossible. This has driven the value of such ICC operating rights to fantastic heights. Rights which could have been bought for as little as $2,500 10 years ago, have been sold for around $100,000.

Now let us look at the practical operating facts of this railroad-inspired ICC truck regulation.

Naturally, the larger two-way general commodity motor carrier, who usually enjoy a reasonably well-balanced freight tonnage over (usually) certain definite routes, can quite successfully operate their own equipment and (usually) do so.