AMENDMENT TO INTERSTATE COMMERCE ACT (Trip Leasing) TUESDAY, MAY 11, 1954 UNITED STATES SENATE, The committee met at 10:06 a. m., pursuant to recess, in room G-16, in the Capitol, Senator John W. Bricker, chairman, presiding. Present: Senators Bricker (chairman), Payne, Bowring, Hunt, Monroney, and Smathers. Also present: Bertram O. Wissman, chief clerk; and E. R. Jelsma, transportation specialist. The CHAIRMAN. The committee will come to order. Senator Johnston called me yesterday and requested that Mr. J. Roy Jones, commissioner of agriculture for South Carolina, appearing on behalf of the National Association of Commissioners, Secretaries, and Directors of Agriculture, be permitted to testify early. He said he had a campaign on at home. We do not want to hold anybody up from a campaign. Will you please be seated, Mr. Jones. STATEMENT OF J. ROY JONES, COMMISSIONER OF AGRICULTURE FOR SOUTH CAROLINA Mr. JONES. My name is J. Roy Jones. I am commissioner of agriculture for the State of South Carolina. I am here for the purpose of offering testimony in support of H. R. 3203, first, on behalf of the farmers of the State of South Carolina, and, second, as chairman of the transportation committee of the National Association of Commissioners, Secretaries, and Directors of Agriculture. Section 3-6 of the 1952 Code of Laws for South Carolina gives me the right to speak for the farmers of South Carolina. My power to represent the National Association of Commissioners was unanimously endorsed at their 33d national conference, held in November 1951 at Biloxi, Miss. This same 33d conference specifically discussed the subject matter now before your committee. Resolution No. 35 states: Therefore be it resolved by the National Association of Commissioners, Secretaries, and Directors of Agriculture, in convention assembled this 15th day of November 1951, That we be recorded of our purpose to seek from the Congress a mandate to continue in effect the time-honored practice of trip leasing motor vehicles which carry to the markets a large proportion of the food and fiber produced on our farms. It is my understanding that this committee does not wish an extensive amount of testimony from those who have already appeared before committees of the Congress in this legislation. In accordance with this wish, I shall endeavor to confine this statement to a reiteration of the position previously made and submit, as additional support, the statements, telegrams, et cetera, on pages 318 through 329 in the 1953 printed House committee report on H. R. 3203. The agricultural interests I represent favor a change in the Motor Carrier Act. Such change is embodied in H. R. 3203. The record of this legislation is extensive with representation by individual farmers and farm organizations, all supporting unhampered trip-leasing privileges. Subsequent orders of the Interstate Commerce Commission, released following the passage of H. R. 3203, in no way affect the position heretofore taken by the organizations I am representing here. Should the trip-leasing arrangement be prohibited, curtailed, or in any manner restricted as to present operations, such will result in increased transportation charges which are bound to punish the farmer and the consumer. This is an economic fact. Should the Interstate Commerce Act be amended, the Commission would have no control over the time duration of truck leasing, and that is exactly what we want. H. R. 3203, following elaborate consideration by the committee and considerable debate on the floor of the House, has already been passed by the House of Representatives by an overwhelming vote. For some time before the motor trucks came on the highways, farmers hauled their produce by wagon to the first market. In the few instances where good roads prevailed, farmers would haul their produce to a more distant market. In other words, for a great many years there never were laws requiring, or intended to force, the farmer to do business exclusively with common carriers. If present efforts on the part of those in opposition to the farmer's best interest are successful, such would be the outcome, and I wish to emphasize this point. The construction of good roads has made possible the marketing of a greater percentage of fresh fruits and vegetables to the distinct economic and health advantage to both producer and consumer. The Motor Carrier Act of 1935 included the exemption clause because without it farm tonnage would have been subjected to rules and regulations against the best interests of the producers. Incidentally, the exemption part of the Motor Carrier Act would be practically worthless without trip-leasing. The Interstate Commerce Commission, in its decision in Ex parte MC-43, took a long step in the direction of forcing farm products to move to market either by franchised motor carriers and/or railroads. As stated before, it all adds up to force the farmer to do business exclusively with common carriers when he does not wish to operate under such restrictions, the only exception being when a farmer is a member of a cooperative marketing organization, and that organization owns and operates trucks to all available markets. Such situations as these prevail in relatively few instances. The dollar interest of farmers should not be superseded by the dollar interest of private, common, contract, or any other type of carrier. The matter of transportation charges to the farmer should not be secondary in any instance. The present transportation structure in this country will not collapse, as implied by some interests, should motor carriers continue to haul exempt farm products with the trip-leasing privilege retained for return loads. Farm products will continue to be hauled by certified carriers who have been transporting such products over a long period of years. This country is growing in population and no new railroads are in contemplation. There will always be tonnage for transport for all modes of carriers, depending upon their ability to render suitable service on a fair rate basis. Consider, if you please, the huge tonnage now transported by common motor carriers, and the volume is growing; Restrictions against trip leasing will mean that the common carrier can no longer purchase transportation which has heretofore been available. Certificated common carriers now purchase millions of dollars of such transportation annually, at a cost per loaded mile materially less than if using their own equipment. This saving goes to the farmer and the consumer. The amended decision of the Interstate Commerce Commission in its docket MC-43, while a modification of its previous order, is nevertheless a step toward standardizing truck operations in this country. This may be desired by the ICC for the simplification of its bookkeeping, but certainly not advantageous to the economy of the farmers and consumers having their commodities exempt from regulations in the present trip leasing practice. During this past March, the National Association of Market Managers met in Atlanta, Ga. Members of this association are, to a large percentage, marketing officials administering a division of a State department of agriculture. Also attending this conference were a number of commissioners of agriculture. Twenty-two States were represented at this meeting and one of the vital topics discussed was H. R. 3203. These men are closer to farm marketing problems than any other group in the States. They are interested in the farmer, the transporter, and the consumer. They were unanimous in their opinion that H. R. 3203, without any changes, should be favorably reported by this committee. They further asked that the Senate also approve this legislation. A resolution to this effect was passed and placed in your records. The South Carolina Fresh Fruit and Vegetable Association at its March meeting in Columbia, S. C., instructed me to inform this committee that it is most important to keep all distribution costs between the farmer and the markets on the lowest possible level. They state restricted trip leasing will raise transportation costs, will result in staggering waste, will force larger inventories, and curtail distribution even to the extent secondary grades, now profitably marketed, would never leave the farm. Irrespective of the criticism directed to present-day operations by certain interests, the fact remains that competing forms of transportation have created a better and more flexible system as to service and charges than would otherwise be the situation. I can think of no argument against this statement. There is no fault found with ICC regulations as to safety of operations and hours of service of employees. The writer has never heard of any adverse comments against such regulations and it seems such are respected, with very few exceptions. While transportation is only one item in a very broad picture, it is an important item and cannot be overlooked if the farmer is to make a net profit from his operations. Some farmers do not recognize the present perils relating to transportation and, for the most part, are dependent upon overhead organizations with which they are affiliated either directly or indirectly in finding markets for their products and the best ways and means of reaching those markets. In addition, they are likewise dependent upon these organizations to protect their interest in matters of legislation, such as is here proposed, and that is why I am here. In the final analysis, trip-leasing is either good or bad for the farmer, the distributor, and the consumer. We say trip-leasing is good. The Interstate Commerce Commission considers trip-leasing to be legal if for 30 days, but illegal if for a few days. Changing the principles involved in H. R. 3203 would create more problems than solutions. It seems to me all that the committee has to decide in connection with the pending legislation is whether or not they wish to increase the farmer's distribution costs. As chairman of the transportation committee of the National Association of Commissioners, Secretaries, and Directors of Agriculture, our group is bitterly opposed to restrictions on trip-leasing of motor carriers transporting agricultural products. We favor passage of H. R. 3203. We earnestly request that you report this legislation favorably and exert every effort to have it enacted into law by the Senate. The passage of this bill will be an assurance to our producer and his consumer. Please accept my thanks for giving me this opportunity to appear here and state our position. The CHAIRMAN. Thank you, Mr. Jones. It is your feeling, then, that if a truck hauls a load of agricultural products to the market, it ought to be free to go any place it wants to after that until it gets back to its home base? Mr. JONES. I wouldn't go that far. The CHAIRMAN. How far would you go? Mr. JONES. Frankly, I would like to see it go that far. The CHAIRMAN. I got that impression from your statement. Mr. JONES. I thought they ought to be permitted to bring back agricultural products now. The CHAIRMAN. They are permitted now. Mr. JONES. Yes, sir. We had one instance of a carrier going to New York and they wanted to bring back a truckload of bottle tops and they couldn't do it, even under the present regulation. The CHAIRMAN. They can do it now. Mr. JONES. They can now? The CHAIRMAN. Oh, yes; surely. Senator MONRONEY. May I ask a question at this point, Mr. Chairman? The CHAIRMAN. Yes. Senator MONRONEY. Would he have to make a contract with a certified freight line to bring it back? The CHAIRMAN. He would have to trip-lease. Senator MONRONEY. He would have to make that contract. The CHAIRMAN. To bring them back. Senator MONRONEY. Yes. The CHAIRMAN. Of course, this would have no effect on that. What you are saying here, your request would make that situation no different at all unless he was a contract carrier. Are there any other questions? Senator HUNT. I would like to ask, Mr. Jones, have you carefully read section 2 on page 2 of the bill? Mr. JONES. I have last year, sir. Senator HUNT. It seems to me and I cannot quite get this straight-there seems to be some contradiction in there on line 9 of page 2 of the bill, section 2. It says: Such other regulations as may be reasonably necessary in order to assure that while motor vehicles are being so used the motor carriers will have full direction and control of such vehicles and will be fully responsible for the operation thereof in accordance with applicable law and regulations, including the requirements prescribed by or under the provisions of this part with respect to safety of operation and equipment; but nothing in this part shall be construed— And this is the important part: But nothing in this part shall be construed to authorize the Commission to regulate the duration of any such lease, contract, or other arrangement for the use of any motor vehicle, or the amount of compensation to be paid for such use. Now, do you think there is any contradiction between the provisions starting on line 16 and the first part of the provision? Mr. JONES. I think this—and I must say that I have been in a campaign and I haven't had an opportunity to refresh my memory on this but I think that this bill would certainly, if it is passed, would be satisfactory to the farmer and consumer. Senator HUNT. I, too, want a bill that is completely satisfactory to the farmers. That is primarily my interest in this bill. I, too, do not want to go into some legislation that will make a completely haphazard regulation of the entire motor-carrier industry. That is my only interest in this matter. That is all I have, Mr. Chairman. The CHAIRMAN. Senator Payne, do you have any questions? The CHAIRMAN. Senator Monroney? Senator MONRONEY. Would you not think it to be a fact that if the only contracts that could be made between these independent carriers that service largely the peak season of the farm truck movement, if the contracts were limited to a duration of 30 days at the very least, or going up from there, wouldn't you anticipate that such a restriction requiring 30 days' leasing, that hundreds, if not thousands, of these independent truckers would have to go out of business? Mr. JONES. They would go out of business or, if they followed it through with that, they would need about three times as many trucks as they have now. Senator MONRONEY. Wouldn't you anticipate that there would not be the leasing done as is being done now on a day-today basis? Mr. JONES. That is right. Senator MONRONEY. Therefore, the trucking pool that furnishes the transportation for farm commodities, if they hit the peak season throughout this country, would disappear to a certain degree? Mr. JONES. Yes, sir; I do. |