In furtherance of its policy of advocating greater responsibility and freedom for carrier management, the league actively participated before the Interstate Commerce Commission in I. & S. docket No. 7151, guaranteed rates, Sault Ste. Marie, Ontario, to Chicago, Ill., wherein the ICC found unlawful a reduced rate for shippers who would guarantee to ship, via certain railroads, at least 90 percent of their Sault Ste. Marie, Ontario, to Chicago pipe or tubing traffic.

It should be noted that a special subcommittee of the league's executive committee has been working on the problem of streamlining traffic department procedures. This subcommittee is cooperating with carrier management in developing simpler and better methods of handling the billing and paperwork involved in transportation. It is also exploring the possibility of adapting electronic data-processing methods and machinery to this problem.

It is significant that the experiments contemplated may be proposed by carriers, shippers, or regulatory agencies and that participation by shippers or common carriers shall be voluntary. In order to accomplish this, the carriers should be permitted to institute experimental procedures on a limited scale and subject to the overall supervision by the regulatory agencies to protect the public interest. The provisions and safeguards contained in subsections (b) through (e) should be adequate to accomplish this purpose.

Section 3 of the bill makes it unlawful for common carriers to discriminate as to service or rates in transportation of loaded or empty vehicles or shipping containers tendered by any shipper or carrier whether or not regulated. The league favors this amendment. Piggyback transportation has increased tremendously over the last few years. No doubt it will increase further. The trailers or other shipping container should be accepted and subject to the same rates whether they are tendered by a forwarder, a shipper, a shippers' association, or another carrier. This legislation gives the carrier-shipper the same competitive opportunity as the noncarrier shipper. The league believes this is a furtherance of a sound transportation policy. Section 4 of the bill provides for the establishment of joint, interagency boards with representatives from the Civil Aeronautics Board, the Interstate Commerce Commission, and the Federal Maritime Commission. The carriers are charged with the duty to establish, where appropriate, through service and joint rates between all modes of transportation. The league believes that through service via all modes of transportation should be provided to shippers at reasonable joint rates. It also believes that the procedure devised by the proposed legislation is a practical solution to the problem of regulating such rates and charges.

Sections 5 and 6 deal with more effective measures of enforcing the provisions of the act. Section 5 would allow the Interstate Commerce Commission to enter into cooperative enforcement agreements with the various States to enforce the State and Federal laws relating to highway transportation. Section 6 would extend the civil forfeiture provisions of the Interstate Commerce Act to unauthorized motor vehicle operations. The league believes that better enforcement of the provisions of the act is absolutely necessary in order to have effective regulation. Furthermore, the deterrent of civil forfeiture provisions instead of criminal sanctions, which are difficult to prosecute, will aid greatly in effective enforcement.

Section 7 provides that air carriers should be subject to payment of reparations when their charges are found unlawfully high. The league is in complete agreement with this proposal.

The league is on record in an appearance before this committee's Subcommittee on Transportation and Aeronautics on June 14 and 15 1961, favoring H.R. 5596, a bill to amend the Interstate Commerce Act in order to provide civil liability for violations of such act by common carriers by motor vehicle and freight forwarders. H.R. 5596 embodies the Interstate Commerce Commission's legislative recommendation No. 11 in its 74th annual report (1960) and renewed as recommendation No. 16 in its 75th annual report. The league there pointed out that H.R. 5596 is one of several pending bills designed to correct an unfair situation which adversely affects the interest of the shipping public. Under parts I and III of the Interstate Commerce Act, a shipper who is injured by a violation of the act by a railroad or a water carrier, has a remedy at law and can obtain damages or reparation where justified. There are no comparable provisions in parts II and IV of the Interstate Commerce Act governing motor carriers and freight forwarders nor in the Federal Aviation Act of 1958 governing air carriers.

What the shipping public needs and desires is the enactment of provisions with respect to motor carriers, freight forwarders and air carriers similar to those which have long existed with respect to railroads and water carriers. The motor carriers, freight forwarders and air carriers have now come of age and should be made responsible in the same way as the railroads and water carriers. Those who enjoy the benefits of regulation should bear the obligations.

That all of these modes of transportation should be subject to the same provisions for reparations is in conformity with the President's transportation message. It is also entirely consistent with greater freedom and responsibility for carrier management. With the additional ratemaking freedom proposed in H.R. 11583 and in H.R. 11584 should go responsibility. Remedies must be provided for shippers injured by unreasonable rates and charges. Under present regulation even common law remedy is denied.

The league endorses the provisions of section 7 of H.R. 11584 and recommends that it be broadened to include similar provisions for reparations by motor carriers and freight forwarders regulated under the Interstate Commerce Act.

Section 9 provides for simplification of procedures governing the special transportation rates afforded to the Federal Government. The league is wholeheartedly in favor of any procedures which might simply the present methods of procuring rates, but opposes any dif ferentiation between establishment of rates for the Government and for the commercial shipper. The preference accorded by section 22 of the Interstate Commerce Act should be removed since there is no reason why Federal, State or municipal governments should be given preferential treatment in transportation.

Rates paid by the Federal Government, the largest single user of the Nation's transportation system, have a profound effect on the revenues of the carriers, and the Government should pay the full applicable commercial rates. Where existing commercial tariff rates are not considered appropriate or satisfactory for movements of Gov

ernment freight or where movements of freight or persons appear to have unusual characteristics (such as the movement of troops and equipment), the establishment by negotiation between the Government and the carrier of agreed rates may be appropriate but they should be set forth in published tariffs filed with the Interstate Commerce Commission on statutory notice, or upon short notice subject to the conditions of section 6 of the Interstate Commerce Act.

The league has long favored authority for the Post Office Department which would permit greater flexibility in the use of motor vehicle common carriers for the transportation of mail. In 1943 the league supported a bill, H.R. 1299, authorizing the Postmaster General to require any common motor carrier to transport mail matter. The league supports the principle of section 9 of H.R. 11584 with respect to the transportation of mail by motor vehicle common carriers.

This completes our statement on the specific portions of H.R. 11584 on which policies have been adopted and which are of special concern to shippers. The league appreciates this opportunity of presenting its views to your committee and hopes that they may receive favorable consideration.

Mr. WILLIAMS. One question I would ask is, would you estimate how many responses to the poll as to their position on the two bills did you receive?

Mr. BOYD. I would like to say that this was a mail vote. Normally we resolve questions of changes of policy in open meetings, but because we felt that there was not sufficient time to hold a meeting of the league, to schedule a meeting of its membership, we took a mail vote. There were in excess of 800 responses to this mail vote.

Mr. WILLIAMS. Approximately 50 percent of your membership? Mr. BOYD. Yes; a little over 50 percent.

Mr. WILLIAMS. Thank you very much for your testimony, Mr. Boyd. Our next witness is Mr. Charles R. Seal, general and commerce counsel for the Virginia State Ports Authority.

STATEMENT OF CHARLES R. SEAL, GENERAL AND COMMERCE COUNSEL, VIRGINIA STATE PORTS AUTHORITY

Mr. SEAL. Thank you, Mr. Chairman.

I appear as general and commerce counsel for the Virginia State Ports Authority, an agency of the Commonwealth of Virginia, having the duty, among others, of protecting and promoting the interests of the ports of Virginia in respect of transportation rates and charges. I also appear on behalf of the North Atlantic Ports Association, the membership of which embraces port interests from Portland, Maine, to Hampton Roads, Va., inclusive. My statement will deal with those provisions of the bill which would amend the Interstate Commerce Act with respect to described bulk commodities, ordinary livestock, agricultural commodities and fish, and is based upon the general premise that there is no public need for the proposed exemptions from regulation, with their harmful effects upon the regulatory system, the public interest and the carriers themselves, whereas there is urgent need for removal of the existing exemptions (except as to farm products and fish to the first destination) and the chaotic rate situations and destructive competitive practices which flow therefrom.

Speaking first of the water carrier bulk exemption, if this were extended to other modes as proposed by the bill, the result would be that some 70 percent of the railroad carload traffic would be exempt from minimum rate regulation. The bulk traffic thus affected is composed of a great variety of commodities, many of them highly competitive as between carriers of different modes as well as of the same modes, and also as between localities, ports, and shippers. So far as ports are concerned, one commodity in particular that represents a large volume of our foreign commerce; namely, export grain, moves extensively by both water and land carriers. Other large volume bulk commodities from which minimum rate regulation would be removed include coal, an important export item, and iron ore, an important import.

As a further illustration of the effect of the bill, the following list of bulk commodities is taken from the operating authority of a tank motor carrier certificated to serve points in 44 States:

The foregoing examples serve to illustrate how widespread the effect of the proposed exemption would be. Some of the commodities mentioned move exclusively or almost entirely by land carriers, and thus the exemption would be extended to commodities and movements that are not competitive with the presently exempt water carriers.

Briefly, with respect to the proposed application of the minimum rate prohibition to agricultural commodities, oridinary livestock and fish, which are now exempt from regulation when transported by truck. The motor carrier exemption was originally intended to apply to transportation from the farm or other origin to the first market, since regulated motor carriers cannot, as a practical matter, provide adequate service in this area. The exemption has, however, been construed to extend far beyond this intended limit and applies to products or commodities that have been sold by the farmer or fish producer and entered commercial trade. It seems somewhat odd in

this connection that foreign tobacco, for example, imported into this country should be treated as an exempt agricultural product when transported by truck.

Some of the commodities coming under the water carrier bulk exemption also move under the truck exemption. One of the more important truck exemptions is grain for export, to which I have previously referred. Information on this point is shown in a decision of the Interstate Commerce Commission of November 14, 1961, and reported at 315 ICC 155, in which there was before the Commission the issue of the lawfulness of rail rates on grain for export from southwestern origins to Texas ports. I quote as follows from page 158 of the Commission's decision in that case:

There is substantial motor-carrier competition from these origins to the ports of Corpus Christi, Galveston, and Houston. The following table sets out the number of rail cars and unregulated motor trucks which moved grain to these destinations during 1958 through the first 10 months of 1960.

Mr. SEAL. It will be noted from the foregoing table that in the first 10 months of 1960, for example, 26,208 unregulated motortrucks of grain moved to Corpus Christi as compared with 10,621 rail cars, and that to Houston the number of unregulated trucks was 60,238 versus 21,834 rail cars. These illustrations emphasize a situation that obviously needs correction, but the answer does not lie in extending the existing exemptions and thereby promoting unregulated and destructive rate competition.

An examination of decisions of the Interstate Commerce Commission will show that in earlier years, including a substantial period following the 1920 grant of minimum rate authority, the majority of rate proceedings to come before the Commission involved the issue of maximum reasonableness or were general rate proceedings not involving the issue of minimum reasonableness. Conversely, in later years, an increasingly large number of rate proceedings has had to do with proposed reduced competitive rates. In this connection, a check shows that of 62 suspension decisions reported in volume 313 of Commission reports, 43 or 70 percent involved proposed reduced rates and that in many instances the protests that resulted in the suspensions were by carriers of the same or a different mode.

In addition to nonbulk commodities, the 43 decisions having to do with reduced rates dealt with various bulk commodities, including wheat products, salt and salt products, bulk cement, lubricating oils, crushed limestone, phosphate rock, phosphate fertilizer, coal, and a variety of acids and chemicals. The other 19 suspension decisions dealt with proposals concerning various matters such as pickup and delivery, route restrictions, assembling charges, switching multiple