to pass since the hearings last year. It is our understanding that the Interstate Commerce Commission has amended its order which banned the leasing of private motor carriers by common carriers for a period of less than 30 days. The Commission has postponed the effect of its order for a period of a year. We suggest that postponing the problem will not solve it and that the next Congress will be confronted with the same problem which this Congress confronts today. Since legislation has already passed the House, it would seem logical that the matter be settled once and for all in this committee and on the Senate floor.

We indicated our concern at the previous hearing about the possible effect of the trip-leasing ban on our flexible transportation system, and in turn, its effect on the farmer and consumer. Since that time, the economic condition of the⚫ farmer has worsened. Farm prices have further declined and farm net income has been contracting very rapidly due to the fact that farm costs are still extremely high in relation to farm prices. The farmer's share of the consumer's dollar has declined to about 45 percent. Most farm commodities are substantially below parity prices. According to the Department of Agriculture, on April 15 the price of wheat stood at 82 percent of parity, rice at 91 percent, corn at 80 percent, peanuts at 82 percent, potatoes at 46 percent, butterfat at 77 percent, milk at 82 percent. Other nonbasic commodities all were under parity except soybeans, limes, apples, and hogs.

Farm net income, according to USDA, dropped to $12.8 billion in 1953. This was 5 percent less than in 1952, and 13 percent lower than in 1951. As reported in the Farm Income Situation released March 4, 1954, "With cash costs taking a larger proportion of farm income as a result of the growth in mechanization of farm operations, farmers retained as net income in 1953 only 36.5 percent of their realized gross farm income, the smallest percentage for any year since 1932." The CHAIRMAN. The next statement is a statement of the Brotherhood of Railway and Steamship Clerks, Freight Handlers, Express and Station Employees.

(The statement of the Brotherhood of Railway and Steamship Clerks, Freight Handlers, Express and Station Employees is as follows:)

STATEMENT OF HARTMAN BARBER, GENERAL REPRESENTATIVE, BROTHERHOOD OF RAILWAY AND STEAMSHIP CLERKS, FREIGHT HANDLERS, EXPRESS AND STATION EMPLOYEES

Mr. Chairman and members of the committee, although the decision of the Interstate Commerce Commission in the leasing of vehicles by motor carriers (52 M. C. C. 675), has been sustained by the Supreme Court in its decision of January 12, 1953, American Trucking Association, Inc., v. United States (73 S. Ct. 307), we have witnessed a determined attempt to effectively destroy the efforts of the Commission to properly administer and enforce the provisions contained in its order. In their attempt to defeat proper regulation of trip leasing of owner-operated vehicles to certificated carriers, the opponents of the Commission's regulations had introduced legislation, H. R. 3203 in the House and S. 925 in the Senate. This bill, when reported to the House of Representatives, contained the following language:

"Nothing in this part (Act) shall be construed to authorize the Commission to regulate the duration of any lease, contract or other arrangement for the use of motor vehicles *** or the amount of compensation to be paid for such use." The House bill, H. R. 3203, containing this language, was passed by the House of Representatives on June 24, 1953, after several amendments had been offered and defeated. These amendments would have exempted from orders of the Commission all those persons operating under the agricultural exemption found in section 203 (b) (6) of the act after hauling an exempt agricultural or horticultural product. They could return to their homes or points of origin of the exempt load, or to intermediate points, and not be subject to trip leasing regulations. If the bill had been amended in this manner, the farmer would have been adequately protected. It is only the owner-operator of a truck who shops about for lading, who to all intents and purposes is conducting the business of a certified motor carrier, without benefit of a certificate, who would be in any way adversely affected by orders of the Commission covering trip leasing. And, why not? The agriculture exemption was never intended to protect other than

the legitimate movement of agricultural products by farmers and certainly was not intended to protect persons doing a commercial hauling business. The owneroperator who leases his truck to a certificated motor carrier is actually rendering a common carrier service and should not have the protection of section 203 (b) (6).

In any event, the Commission has suspended its orders and still has this question under investigation. It is felt no action should be taken by this committee which would disturb the work of the Commission. The Interstate Commerce Commission has operated since 1887, and has regulated motor carriers since 1935. This is a matter which should be determined by the Commission. Therefore, we urge this committee to take no action on this legislation.

The CHAIRMAN. Then I have a statement of Joseph E. Keller on behalf of Private Carrier Conference of the American Trucking Associations.

(The statement submitted by Mr. Joseph E. Keller is as follows:)

STATEMENT OF JOSEPH E. KELLER, GENERAL COUNSEL, ON BEHALF OF PRIVATE CARRIER CONFERENCE OF ATA

This statement is submitted on behalf of the Private Carrier Conference, Inc., of the American Trucking Associations, Inc., by Joseph E. Keller of the law firm of Dow, Lohnes & Albertson, 600 Munsey Building, Washington, D. C. The conference has authorized me to make this statement in connection with H. R. 3203. The Private Carrier Conference, Inc. wishes to express its strong support of H. R. 3203, as passed by the House of Representatives. It was the original intent of this conference to appear personally before your committee on May 10 and present our views on the pending measure. It is understood however, that your subcommittee is pressed for time in connection with the hearing on this subject. In order to conserve your time, we are submitting this statement, setting forth our views on this legislation, for inclusion in the printed record.

The Private Carrier Conference, Inc., is an independent, autonomous association with offices at 1424 16th Street NW., Washington, D. C. Its direct membership is composed of over 1,500 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 two such affiliated groups in the States of Illinois and California. Since 84 percent of the trucks on the Nation's strets and highways are said to be engaged in private carriage, the Private Carrier Conference, as you can see, represents a vast segment of truck owners in the United States.

In appearing here today, the Private Carrier Conference is expressly grateful to this committee for its continued interest in our problems. We feel that there is much more at stake here today than the future of trip leasing as such. The issuance by the Interstate Commerce Commission of its devastating and all-encompassing trip leasing regulations which in truth and in fact, abolished trip leasing, came as a staggering blow to the private highway carrier and to other carriers also. So broad was the opposition to the regulations that they were immediately challenged in the courts. Because of the wholly exaggerated and unrealistic representation of the safety elements involved, in which the Commission presented to the court a distorted picture not substantiated by its own safety records, the court upheld the regulations, not passing upon the merits of trip leasing, as such, but in the established judicial pattern, looking to the legislative branch to pass upon the wisdom of the regulations and dealing in the courts only with the ultimate power of the Commission to involve the regulations. The only remaining forum for relief and assistance was the Congress. Legislation was introduced in both Houses of the Congress. Hearings were held by the appropriate committees. Then began the most amazing performance of administrative recanting which we have yet seen. The Commission, not once, but repeatedly, parried the opposition, first by postponements, then by amendments which were intended as a sop to some segments of highway transportation, at the expense of other types, to mollify and wean away opposition to the regulations. It is climaxed now by a further hearing on lease and interchange of vehicles by motor carriers. Ex parte No. MC-43, scheduled for next month, a further diversionary effort to defeat correction by the legislative branch of a

matter which cries for legislative action. Significantly, this further move came close on the heels of the hearings scheduled before your committee, another manifestation of the same unwholesome and wholly intolerable manner of dealing with the situation.

The trip leasing regulations, as originally issued by the Commission, stand discredited by the Commission itself, which has on its own motion amended them as previously outlined, until there is no real semblance to their original form. Yet, if it had not been for the wise and timely intervention of the Congress, these regulations would have been put into effect by the Commission in their original disastrous form, with untold damage to our transportation system. As amended and reamended, these regulations are still highly objectionable and should not been invoked. The Commission has shown such a whimsical and quixotic attitude in the matter of trip leasing regulations that it should not be permitted, under the law, to deal with this subject. The Congress should remove this subject from the area of administrative discretion and rulemaking, in view of the lack of wisdom exhibited by the Commission in this matter.

We submit that, against the tragic background of the conflict between the legislative and executive branches of our Government, as exhibited in certain current hearings, in which the Congress examines, although not dispassionately, the basic relationships between two great branches of our Government, it becomes equally important for you to examine, in an objective and constructive manner, the relationship between the legislative branch and an independent administrative agency such as the Interstate Commerce Commission, the creature of the Congress. It is high time for the Congress to call a halt to the patent abuse of administrative discretion shown in the Commission's trip-leasing regulations. It is high time, also, for the Congress to express its disapproval, in every manner, of the wholly unsound way in which the Commission has sought to prevent the Congress from removing the Commission's questionable right to invoke these regulations in the first place. The House has already acted. It now remains for the Senate to complete the matter so that the highway transporters of America may be assured, at long last, that this trip leasing "war of nerves" waged by the Interstate Commerce Commission, will cease.

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 afforded speedy passage by the United States Senate, we feel that the free flow of commerce among the States will be dealt a severe blow and that artificial restraints 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 desirable 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 demands. In most cases, the movement of agricultural commodities in one direction coincides with a peak 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 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 two vehicles to do the job of one, 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.

Furthermore, this bill as amended by the House, gives the Interstate Commerce Commission full power to prescribe rules which would require that all leases be in writing and signed by the parties thereto. It gives the Commission authority to require that all leases shall specify the compensation to be paid by the motor carrier. It requires, further, that a copy of the lease shall be carried on each motor vehicle operating under lease. Under the bill the Commission is also given authority to prescribe such other regulations as may be reasonably necessary to assure that motor carriers operating leased equipment will be fully responsible for the operation of such equipment, including requirements respecting safety of operations. The bill, as passed by the House, however, restricts the Interstate Commerce Commission from regulating the duration of any lease or the amount of compensation to be paid for such use.

The Private Carrier Conference is heartily in accord with the intent of amended H. R. 3203 as it was passed by the House. The Interstate Commerce Commission certainly should have full authority to require that the operator of leased equipment assume full responsibility over such vehicle, while it is in his possession. This is especially true in connection with the lessee's responsibilities respecting safety of operations. In addition, we agree that the Commission should have complete authority to require that the lessor and lessee be fully identified, as would be done if a copy of the written lease is carried on the vehicle. If the objectives of this amendment are carried out by the Commission, all of the abuses alleged to have existed would be remedied in short order.

The House-passed bill takes a positive approach to the entire leasing problem. It is unfortunate that the Interstate Commerce Commission, in issuing its rules and regulations, chose a negative course. As so aptly stated by Congressman Wolverton in the debate before the House of Representatives, "The Commission adopts measures to kill before it has attempted to cure."

That safety was not the primary purpose for the Interstate Commerce Commission's proposed prohibition of trip leasing is apparent from its entire approach to the problem. Ever since the House of Representatives passed the bill now before the committee the Interstate Commerce Commission has engaged in a deliberately calculated campaign to entice its advocates away from support of the bill. This campaign has been waged by the process of modifying the proposed rules in such ways as to unduly discriminate against certain private carriers while favoring others. Thus, the Commission has provided for exemption from the rulemaking of the farm cooperatives but a competing private processor would still be forbidden to trip lease. The discriminatory effect of this approach is so patent as to require no explanation.

Yet this is in no way surprising when it is so very clear that the whole purpose of the Interstate Commerce Commission's anti-trip-lease proposal is to discriminate against the private carrier in favor of the common carriers. Indeed, one need look only at the proposal itself to see that the rulemaking, if allowed to become effective as planned, would make private carriage unduly burdensome for the large majority of producers now using their own vehicles. It is clear that these producers would find private trucking unbearably expensive if they were forced to ship their goods to market and then have their trucks return empty. In this way, private trucking would be forced to use the common carrier and the producer would lose a vital part of his traditional freedom of choice of transportation. Yet, unless this measure is enacted, we can only expect more oppressive rulemaking from the Commission in view of the inconsistency with which it has thus far treated the matter.

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 by this conference at its hearings on March 28, 1952, dealing with bills relative to domestic land and water transportation, it was specifically stated as follows:

"We 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 car36105-54-pt. 2- -2

rier 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 its 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 voluminous record in this entire proceeding convincingly demonstrates the disastrous effects ICC truck leasing regulations would have on the Nation's industrial and agricultural economy. We do not wish to burden the Subcommittee with further material, other than to emphasize the fact that the ICC leasing regulations, if permitted to become effective, would constitute a staggering blow to this Nation at a time when farm prices are declining and when everything possible should be done to reduce, rather than increase, the farmer's transportation and distribution costs. This is especially true in the case of livestock, because if those who haul cattle into the cattle markets cannot get a return load, then they are going to have to charge either the farmer more or the slaughterhouse more; thus there will be an artificial deterrent in the sale of beef to the consumer. Certainly the Congress cannot at this time afford to have one of its administrative agencies interpose such obstacles in the path of the free flow of farm products to the ultimate consumer.

It will be recalled that during the 82d Congress, two separate bills were introduced (upon request) which, in our opinion, would have had almost the same effect as the ICC truck leasing regulations. These bills, S. 2357 and S. 2362, would have curtailed exempt commodity hauling by any person other than a farmer, and would have completely abolished trip leasing. The Senate Subcommittee on Domestic Land and Water Transportation held extensive hearings on these two measures and in its wisdom took no action on these detrimental proposals. Indeed, they recommended broadening the agricultural exemption to include horticultural products, a move which we heartily approved. If Congress, itself, therefore, saw no reason to impose such unrealistic restrictions upon our industrial and agricultural community, why, then should an administrative agency, directly responsible to Congress, take it upon itself to promulgate simi