mission to depart from the convictions it now holds and permit the establishment of low competitive rates (compensatory or noncompensatory) when such rates have the tendency to divert traffic from one carrier to another or from one group of carriers to another group of carriers.

Consequently, we are convinced that the Congress should spell out in unequivocal language that the establishment of low competitive rates, where such rates are compensatory, is not to be considered by the Commission as a deterrent to, or a handicap toward, the development of a sound national transportation system. H.R. 11583 does just this; and we, therefore, urge your committee to recommend its passage and the full Congress to approve such recommendation. The CHAIRMAN. Mr. Culpepper, thank you very much for your very forceful and forthright statement.

Mr. Hemphill, do you have any questions?

Mr. HEMPHILL. No, thank you, Mr. Chairman.

The CHAIRMAN. Mr. Younger?

Mr. YOUNGER. Yes, I have one thing, Mr. Chairman.

In your statement on page 8 at the bottom you refer to the 1958 Transportation Act as follows

Rates of a carrier shall not be held up to an active level to protect the traffic of any other mode of transportation, giving due consideration to the objectives of the national transportation policy declared in this Act.

In other words, they were instructed not to hold an umbrella over one mode because they did not have the inherent advantage to give a lower rate; is that true?

Mr. CULPEPPER. That is right.

Mr. YOUNGER. All right.

Now, on page 11 you say:

Finally, we are convinced that the Interstate Commerce Commission will never construe the law as it presently reads to allow the Commission to depart from the convictions it now holds to permit the establishment of low competitive rates (either compensatory or noncompensatory) when such rates have the tendency to divert traffic.

Yet you pay great compliments to the ICC, and in your very statement you say they are not following the law as it was prescribed in 1958. How do you reconcile those two views?

Mr. CULPEPPER. Mr. Congressman, I say they are not following my interpretation of the law or they could follow the law by interpreting it differently. They automatically apparently, and I have given it a good deal of study, feel that if you harm one mode of transportation by permitting another mode of transportation to put in lower rates, you are automatically damaging the national transportation system, and I claim that that is not true, sir.

Mr. YOUNGER. How could you put into effect the 1958 Transportation Act without accomplishing that very purpose?

Mr. CULPEPPER. You could do that very well if you did not have in your mind that automatically to put in a lower rate would hurt another form of transportation, if you would weigh each application on its own basis, but they come along and they won't let the railroads put in a grain rate because it is less than 25 percent higher than the water rate. I am just using one instance. I am not arguing that case, but the Commission has reached the decision that if you

take business away from one mode of transportation you are automatically damaging the national transportation system.

Mr. YOUNGER. That to me is a very, very confusing interpretation of your own statement here.

Mr. CULPEPPER. What I am trying to say is I think the Commission is entirely honest. I think that they have reached the conclusion that they must protect all forms of transportation and they cannot let anybody take a predatory step, one form of transportation, the shipping public, or anybody.

Mr. YOUNGER. That is all.

The CHAIRMAN. Mr. Kornegay, do you have any questions? Mr. KORNEGAY. Just one, Mr. Chairman.

Mr. Culpepper, your organization, the Atlanta Freight Bureau, is composed of railroads?

Mr. CULPEPPER. No, sir, it is composed of shippers from all over the United States. We have over 525 members.

Mr. KORNEGAY. In other words, you are representing the shippers and not any of the modes of transportation?

Mr. CULPEPPER. Yes, sir. In other words, I would feel that this law was good for the trucklines just like it is good for the railroads. I think H.R. 11583 would be just as good for the trucklines as it is for the railroads. I think any form of transportation ought to have a right to put in as low a compensatory rate as it can in order to get business back to the organized and regulated carriers. Mr. KORNEGAY. Thank you, sir, for a very fine statement.

The CHAIRMAN. Mr. Culpepper, we are glad to have you back with the committee. I wish to thank you again for your statement. Mr. CULPEPPER. Thank you, Mr. Chairman. I appreciate your letting me come. I appreciate your being so considerate.

The CHAIRMAN. You are always generous in your comments and we are always glad to have you.

Mr. CULPEPPER. If you will let me say it, like the Texan, I am glad you made that remark, sir, because it is very easy to be generous to you, sir.

The CHAIRMAN. Thank you.

It is always hard to get the last word in with you. Very good. The committee will adjourn until Friday morning at 10 o'clock, at which time Mr. Matt Triggs will be the first witness.

(Whereupon, at 12 noon the hearing was adjourned, to reconvene at 10 a.m., Friday, July 27, 1962.)

TRANSPORTATION ACTS AMENDMENTS-1962

FRIDAY, JULY 27, 1962

HOUSE OF REPRESENTATIVES,

COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE,

Washington, D.C.

The committee met, pursuant to recess, at 10:10 a.m., in room 1334, New House Office Building, Hon. John Bell Williams presiding. Mr. WILLIAMS. The committee will be in order.

The first witness this morning is Mr. Matt Triggs, assistant legislative director of the American Farm Bureau Federation.

STATEMENT OF MATT TRIGGS, ASSISTANT LEGISLATIVE DIRECTOR, AMERICAN FARM BUREAU FEDERATION

Mr. TRIGGS. Thank you, Mr. Chairman.

Gentlemen, we appreciate the opportunity of presenting the views of the American Farm Bureau Federation with respect to the two bills under consideration by the committee.

H.R. 11583: Our board of directors has given consideration to the provisions of this bill and has adopted the following policy statement:

We support the principle of proposed legislation providing for the elimination of ICC minimum rate control for all carriers hauling agricultural or bulk commodities, subject to continued review by the Interstate Commerce Commission with respect to discrimination, and the broadening of the inland waterway bulk commodity exemption to include all bulk commodities irrespective of the composition of the tow.

This is not to be considered as an endorsement of the exact language or detailed provisions of H.R. 11583, but rather as an endorsement of the basic purpose of the bill, which is to provide that rates filed by regulated carriers for hauling agricultural and bulk commodities shall not be suspended solely because they are too low.

As we understand the procedure that would be followed if H.R. 11583 is enacted, rail rates for hauling agricultural and bulk commodities would be filed with the Commission as heretofore. They would not go into effect for 30 days. During this 30-day period the Commission could suspend them and announce hearings if the Commission determines that they are too high, or are discriminatory or violate other specific provisions of the Interstate Commerce Act; but such rates could not be suspended and made the subject of hearings on the sole grounds that they are too low.

H.R. 11583 has been described as extending to the railroads the same exemptions from ICC rate regulation for transportation of agricultural and bulk commodities as are now applicable to truck and/ or inland waterway transportation. H.R. 11583 represents a substantial modification of rail ratemaking policy providing a much broader

area for management discretion, but retains a substantial authority in the Commission to prevent excessive or discriminatory rail rates. In these times of rapid technological change, we believe it is essential to permit efficiencies of new equipment and practices to be reflected promptly in rates to shippers. Where reductions are feasible by reason of cost and competitive factors they should not be denied or long delayed because of their effect on other modes of transportation. A case in point is the recent petition of Southern Railway to reduce rates on multiple-car shipments of grain to about 40 percent of existing rates. This was made possible by new and more efficient equipment and procedures developed and placed in service by Southern Railway. Yet it has been a year since Southern filed its new grain rate tariffs and they are still pending before the Commission.

H.R. 11583 would place reliance on antitrust law to prevent predatory pricing practices by carriers. We do not take the position that this is necessarily the only or the best approach to the problem. We do not pretend to understand the full significance or effect of this proposal. However, the injunctive remedy available to competitors and the liability for treble damages for losses sustained as a result of predatory pricing practices, would appear to represent a reasonably effective bar to rail rate reductions designed primarily to eliminate competitors. This provision would apply to railroads the same antitrust restrictions currently applicable to bulk inland waterway carriers.

The nature of the rate problem of common carriers is well summarized in a recent Department of Commerce publication (p. 26, "Rationale of Federal Transportation Policy," Department of Commerce, April 1960) as follows:

The rate structure which regulated carriers and the regulatory authorities alike have sought to preserve, extends an open invitation to the growth of private transportation and of specialized transportation in the exempt areas, as well as marginal and outright unlawful operations. * ** It tends to divert the most remunerative business and to reduce significantly the base of high revenue traffic. *

The enactment of legislation to eliminate minimum rate control would give regulated carriers a flexibility in ratemaking that would permit them to move more effectively to prevent inroads on traffic by private carriers.

H.R. 11584: We have no policy with respect to any of the amendments to the Interstate Commerce Act, and other acts provided in this bill, and therefore make no recommendations relative thereto.

The agricultural exemption: The recommendation of the Interstate Commerce Commission in opposition to the enactment of H.R. 11583, and proposing in lieu thereof the modification of the agricultural exemption, necessitates the inclusion of this portion of our statement. Agricultural interests have historically supported the exemption from economic regulation of trucks hauling farm products as essential to the efficient marketing of farm products.

There is summarized below the principal reasons the exemption is of vital importance to farmers:

A. To a major extent, the efficient marketing of farm commodities. involves movement from the farm direct to consuming markets: A major portion of cattle, hogs, and sheep move from the farm or ranch direct to packinghouses. Much feeder livestock, grain, and hay moves