Mr. TURNEY. So far as I know, and I have no exception to this, I have never known the Commission to attempt to allocate a fair share. or an unfair share, or any kind of a share. If they did, I think it would be illegal under the present act.

Mr. FLYNT. Would it also be illegal after the supposed passage of this bill that we have before us?

Mr. TURNEY. No more so than it is now.

Mr. FLYNT. You do not think that would be changed?

Mr. TURNEY. No, sir.

Mr. FLYNT. Then, is there any valid objection to the enactment of that particular section?

Mr. TURNEY. Yes. The assumption would be that you intended to change something. You do not want to change what is there now. Mr. FLYNT. That is all. Thank you.

Mr. HARRIS. Mr. Turney, do you intend to be present during the bearing tomorrow?

Mr. TURNEY. I will hold myself, of course, subject to the desires of the committee.

Mr. HARRIS. Mr. Dolliver was called out and he has some questions at he wanted to direct to you. He will be here in the morning. He wanted to know if you can be back in the morning.

Mr. TURNEY. I will be glad to be here in the morning.

Mr. HARRIS. Thank you.

It is delight ful to have you back with us, gentlemen.

The committee will now adjourn until 10 o'clock in the morning. (Thereupon, at 4: 47 p. m., the committee recessed, to reconvene the following day, May 10, 1956, Thursday, at 10 a. m.)

TRANSPORTATION POLICY

THURSDAY, MAY 10, 1956

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON TRANSPORTATION AND
COMMUNICATIONS, OF THE COMMITTEE ON

INTERSTATE AND FOREIGN COMMERCE,
Washington, D.C.

The subcommittee met, pursuant to adjournment, at 10 a. m., in room 1334 New House Office Building, Hon. Oren Harris (chairman of the subcommittee) presiding.

Mr. HARRIS. The committee will come to order.

When the committee adjourned yesterday we had had the testimony of Mr. John R. Turney. He had responded to questions from several members of the committee. Mr. Dolliver had some questions which he wanted to expound to Mr. Turney.

Mr. Turney, if you will come back to the witness stand, please.

STATEMENT OF JOHN R. TURNEY, ATTORNEY, WASHINGTON, D. C.

Resumed

Mr. TURNEY. Mr. Chairman and gentlemen

Mr. HARRIS, Mr. Dolliver.

Mr. DOLLIVER, Mr. Chairman, I want to express my appreciation to Mr. Turney for coming back; also for the presentation to us of the very illuminating and well prepared statement.

I think these hearings have been characterized by very fine stateants from all sides.

You have presented to us a great many statistics which are of importance with respect to these measures which we are considering. Could you enlighten us as to the source of those statistics?

Mr. TURNEY. The statistics that I gave relating to the tariffs filed and also the number of protests and the number of suspensions were chtained from the Chairman of the Suspension Board of the InterFate Commerce Commission, from a record which he maintains. I 4d not see the record, but I am positive that he read from it correctly. The statistics on page 9 are from the Interstate Commerce Commisson's statement M-100, for the year 1954; everything except column 5, which is a percentage column. Column 2 is a summation of the column in that statement M-100. They showed the amount of common expenses apportioned to passenger service and the amount appor toned to freight service. They do not show the total. I simply added them together. I am happy to say I did not add them, I had someone who could add add them together. The percentage was obtained, of course, mathematically correct by machine.

If this is conceded we come to the question of how a fair share is to be determined. The Commission's function, as I see it, is to accord to the various forms of transport an equality of opportunity. When this is done the fair apportionment of traffic will take care of itself.

Equality of opportunity is created by permitting each carrier involved to establish rates which reflect that carrier's advantages. The carrier which by reason of advantages, inherent or acquired, can perform the service most economically should determine the rate pattern. Within limits, others should be permitted to compete, but those with higher operating costs should not be allowed to break down the rate structure unjustifiably. When the course described is followed the economics of the situation and the desires of the shippers will take care of the division of traffic and wasteful and uneconomic transportation will, at the same time, be avoided.

Mr. ROGERS (presiding). Thank you, sir, for a fine statement.
Are there any questions?

Mr. HARRIS. Mr. Turney, I want to also compliment you for a very thorough job in preparing the statement that you have presented, giving the views of your organization on this highly complicated and controversial problem.

Do I gather from your illustrations here and your testimony, the presentation, that you indicate that the railroads are better off financially by the fact that you have the truckers to give them competition? Mr. TURNEY. I think so.

Mr. HARRIS. In other words, I got the implication if not the direct statement, as illustrated by the chart and explained in your statement that the fact that, with the existence of the truckers, the railroad industry is nearly $200 million better off.

Mr. TURNEY. Than they would be if they cut their rates 20 percent in order to put the trucks out of business, yes.

Mr. HARRIS. That is a pretty interesting analysis. I know the general public will be glad to have that information, too.

I just wondered how big the trucking industry should get and how much of the traffic the trucking industry should assume the burden of taking care of before the railroad industry would not be a lot better off than they are today.

Mr. TURNEY. Mr. Chairman, I want to be perfectly fair about it, but the only reason that the railroad industry is not highly profitable today is their passenger deficit. That deficit amounts to about 7 or 8 percent of their total freight revenue.

If they did not have that deficit, if the passenger traffic, their express, their passengers and their mail, paid its way, the railroad earnings would be well over 6 percent from their freight traffic.

In some of them, in the Pocohontas carriers, it would be up around 10 percent.

Mr. HARRIS. Do you believe this statement, in your opinion, to be a correct policy? The ICC should fix reasonable minimum rates to allow competitive railroad rates to be judged in the light of railroad conditions and the competitive truck rates to be judged in the light of truck conditions.

Mr. TURNEY. No, sir, I do not.

Mr. HARRIS. You do not think that to be the fact?

Mr. TURNEY. No, sir, for the reasons which I have indicated.

Mr. HARRIS. You say that the Interstate Commerce Commission does not, as has been alleged by representatives of the railroad industry, consider the economic effect of another mode of transportation in determining what a particular rate should be.

Mr. TURNEY. That is my judgment, and made after a conscientious study of all the decisions I could find on the subject.

Mr. HARRIS. I have great regard for your knowledge and experience in this field. You have certainly indicated here today your familiarity with the subject.

If that is true, how do you account for the decision of the Interstate Commerce Commission in the illustrations presented to us yesterday by Mr. Jervis Langdon, on page 10 of his statement? Let us just take one of them.

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