There are controversies, of course, and differences of opinion, but I mentioned a few the other day that had developed over the last few years down in my own part of the country. Who is the committee that makes the determination of the rates?

Mr. LANGDON. Sir, we have rate committees in the several rate territories.

We have one in the East, but I want to say quickly that the committee does not make the determination. The individual railroads make the determination, and on our property, and I am sure it is true of the others, we are making rates more and more independently, not through committees, except to advise the committees as to what is being done and what we propose to do in order that they then can take what action they think is necessary in the interests of the shippers who may be located on their line and to have public hearings, with the shippers coming in and stating their views as to various proposals that are made.

In the last year I checked up the other day and I think we have taken more on the B. & O., we have taken more independent actions in relation to rate proposals than in the past 10 years.

It has been decided by the B. &. O that we were going to do this. Sure, we went through the committee procedure to let the others know what we were going to do, giving them an opportunity to come in, if they wanted to, to protect their own shippers, and then, as a result, and this is true of the other carriers, too, the general level on the particular commodity has gone down in the eastern territory where we operate.

The CHAIRMAN. Now, to carry that one step forward, if a particular railroad adopts a policy of nondiscrimination in various areas, is it reasonable for one road to have to pursue a rate to a certain point and a different railroad files tariffs that are two or three times less than that particular railroad?

Is that reasonable under our regulatory system?

Mr. LANGDON. Sir, I am sorry, I am not sure I caught your question. The CHAIRMAN. I brought up a matter the other day with reference to bulk commodity movements, an agricultural movement, in which in one point, New Orleans, La., they charge 47 cents a hundred. Twenty miles away, another railroad, they charged 18 cents a hundred. Now, is that reasonable and fair under the common carrier system in our regulatory procedures?

Mr. LANGDON. Rates ought to be on the same level. Of course, many times different transportation conditions will justify a higher rate in certain cases than in others.

The CHAIRMAN. Yes; in one case they had two mills in different locations competing against each other, fighting for it, and there was no alternative transportation available, and in the other place they did not have that same situation with the mills and they had water transportation available.

Mr. LANGDON. In those circumstances I think the same rate level should apply.

The CHAIRMAN. You think what?

Mr. LANGDON. The same rate level should apply, sir.
The CHAIRMAN. What could we do to bring that about?

Mr. LANGDON. I think in the East certainly this is being brought about now by the carriers' voluntary action. Now, if it is not, if there are instances where it is not, shippers have the right to complain of discriminatory practices, and will continue to have that right before the Interstate Commerce Commission.

The CHAIRMAN. Even if this bill that we refer to on minimum rates were to be passed?

Mr. LANGDON. Yes, sir.

They would continue to have the right to complain of discrimination.

The CHAIRMAN. Of course, what I am very greatly concerned with, and what I am going to pursue, is this question of bringing about an equality of transportation available to all segments of our public. At the same time, I want to see the spirit of competition prevail, and if this approach can help to bring about our total objective, why, it seems to me we have accomplished a great deal.

I am glad you mentioned this question of the fourth section. I am still a little bit puzzled, though, by your position that if all regulations were to be removed, how would the fourth section continue to operate?

Mr. LANGDON. Of course, this bill does not propose the removal of all regulations, sir; only the removal of the Commission's minimum rate power, and my position is that if this is done, the Commission would continue to have full authority to administer section 4 in the way that it has been administered in the past.

The CHAIRMAN. In other words, the minimum rate provided from one point to another point on a long haul; then the short haul would have to be followed accordingly?

Mr. LANGDON. Yes.

Well, you see, sir, section 4 prohibits a special type of discrimination under the long-and-short-haul clause.

The CHAIRMAN. That is right.

Mr. LANGDON. And the Commission has full authority to make exceptions, as the statute says, in special cases. So that when one applies for authority to depart from section 4, one has to prove a special case before the Interstate Commerce Commission.

The only condition that Congress has imposed is that, in any event, the rate to the further distant point be reasonably compensatory. Now, all of this remains completely unchanged under this proposed legislation.

The Commission would continue to have full authority, as I see it, to administer section 4 in exactly the same way that it has been administered in the past. There would be no change.

The CHAIRMAN. You do not contend, then, that the Commission would have authority to set a specific rate, as you mentioned a moment ago, if the minimum rate provision were to prevail?

Mr. LANGDON. Yes, I think it does in the case of of a violation of section 4 or in the case of a violation of section 3 which bar discriminatory rate practices.

I think that once the discrimination is proven, the Commission then retains the power to fix the precise rate that will remove that discrimination.

The CHAIRMAN. Mr. Langdon, thank you very much for your most informative testimony today.

The time has swiftly gone from us, and we will have to adjourn. The House is meeting.

The committee will adjourn until 10 o'clock in the morning, at which time we will have Mr. Don Manion as the first witness.

(Whereupon, at 12:10 p.m., the hearing was adjourned, to reconvene at 10 a.m., Wednesday, July 25, 1962.)

TRANSPORTATION ACTS AMENDMENTS-1962

WEDNESDAY, JULY 25, 1962

HOUSE OF REPRESENTATIVES,

COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE,

Washington, D.C. The committee met at 10 a.m., pursuant to recess, in room 1334, New House Office Building, Hon. Oren Harris (chairman of the committee) presiding.

The CHAIRMAN. The committee will come to order.

The first witness this morning will be Mr. Don Manion, president of the American Short Line Railroad Association. Mr. Manion, you may proceed.

STATEMENT OF D. L. MANION, PRESIDENT, THE AMERICAN SHORT LINE RAILROAD ASSOCIATION, WASHINGTON, D.C.

Mr. MANION. My name is D. L. Manion. I am president of the American Short Line Railroad Association with offices at 2000 Massachusetts Avenue NW., Washington, D.C. I have been an officer of this association since May 16, 1960, and president since August 16, 1961. Prior to coming with this association I served in various operating-maintenance supervisory capacities for 13 years with a common carrier railroad.

On behalf of the member lines of this association, the majority of which are representative of "small business" interests in the railroad industry, I appreciate the opportunity to appear before this committee in support of H.R. 11583 and H.R. 11584.

The American Short Line Railroad Association is a nonprofit, unincorporated association of 254 common carriers by rail representing an investment of about $1.8 billion and operating about 16,000 miles of first main track. During 1960 the member lines of this association earned gross operating revenues in the amount of $569 million, employed about 50,000 persons who were paid $303 million in wages and paid taxes of $70 million.

The importance of short line railroads to the public is in part shown by the fact that many of them provide the only rail service to a town, to an area or to a port. Their importance to the railroad industry as a whole lies in the substantial quantities of freight they originate, terminate, or both, and which is usually handled in line haul service by the larger lines. This proportionate share of traffic originated and terminated on short lines far exceeds their proportionate share of railroad plant.

When short lines are deprived of the opportunity to retain an adequate volume of tonnage or to increase their loadings by effective com