Hon. CLAIR ENGLE, PORT OF SAN DIEGO AND LINDBERGH FIELD AIR TERMINALS, Senate Office Building, Washington, D.C. DEAR SENATOR ENGLE: The port of San Diego has reviewed Senate bill S. 3243 and House bill H.R. 11583, which are bills presently before the Congress which would exempt certain carriers from minimum rate regula tion in the transportation of bulk commodities. Due to the vital importance of these bills on the future of transportation, we are submitting our views to you for your consideration. The two bills are companion bills and are practically identical in format and intent. Therefore, the comments made on S. 3243 are equally applicable to H.R. 11583. The port of San Diego is presently handling such bulk commodities as tallow, molasses, and petroleum products in liquid bulk, and alfalfa pellets. flaxseed, and potash in dry bulk form. The new major bulkloader, now under construction will be capable of handling bulk commodities such as iron ore, or concentrates, potash, borax and borates, coal, wheat, corn, and other grains and various other types of dry bulk commodities. These factors were a maj consideration in reviewing the proposed legislation. Under present law, the motor carriers are exempt from rate regulation on agricultural commodities, livestock and fish (including shellfish) as pre vided in section 203 (b) of the Interstate Commerce Act. S. 3243 makes D provision for amending section 203(b) to extend the exemption to other types of bulk commodities, both dry and liquid. However, section 1(23) pr I covering rail carriers); section 303(b) (part III covering water carries in interstate commerce); section 418 (part IV covering freight forwarders of the Interstate Commerce Act extend the much broader exemption to other modes of transportation. Additionally, section 1002 of the Federal Aviati Act of 1958 is to be amended to provide the same exemptions to the carriers (which also include passengers). Section 5(a) of the Interstate Commerce Act and section 15 of the Shipping Act of 1916 and section 414 of the Federal Aviation Act of 1958 are all be amended. These sections are the ones that exempt the carriers from pr cution under the antitrust laws for establishing uniform rates through publishing agencies. The relief from prosecution is to be rescinded ins as bulk commodities and passengers are concerned. There are four basic groups of activity which are to be exempted f:= minimum rate regulation by the Interstate Commerce Commission. These set forth as follows: 1. Commodities in bulk which are loaded and carried without wrapp or containers and received and delivered by the carrier without transp tion mark or count. 2. The transportation of liquid commodities in bulk. 3. Property consisting of ordinary livestock, fish (including shellfish agricultural (including horticultural) commodities (not including mar tured products thereof). 4. Passengers, by carriers subject to parts I, II, III, and IV of the " Should this legislation be enacted it would open "Panoda's box" of and confusion. Discrimination, preference, and prejudice as between con ties, shippers and localities would be the rule rather than the exe The following examples will graphically illustrate the conditions would exist as between competing ports. (a) Commodities in bulk, dry. At the present time there are major! loading facilities in existence, under construction or on the drawing of every major Pacific coast port. The port of San Diego is very compe with the port of Long Beach in developing iron ore, potash, borax, and similar commodities for export. We now have equal rail rates from A and New Mexico sources and are below the port of Stockton. Should S pass the railroads could set lower rates on potash out of Carlsbad, N to Long Beach than to San Diego, that would divert all of that tonta Long Beach. San Diego would be prohibited from petitioning the suspension, even if it found out about the reduction prior to the effective San Diego would be required to go to court under the antitrust laws for" By that time the cargo would be lost and the damage done. (b) Liquid commodities in bulk.-The same situation would apply on commodities such as tallow, molasses, and petroleum. The same factors and same solutions would pertain. (c) Livestock, fish and agricultural commodities.-We cannot object to other carriers having the same exemptions on these commodities that motor carriers are now enjoying. (d) Passengers.-This would remove all restrictions on minimum rates on passengers and would undoubtedly result in a major rate war between railroads, buses, and airlines. The amending of section 1002 of the Federal Aviation Act of 1958 would substantially reduce the minimum rate regulation of the CAB, but they would still have control "in the public interest" but no such control would exist with the railroads and buses under the ICC. Fares would be extremely low until the competition was driven out, then the fares would return to a much higher level. This is extremely dangerous as passenger operations are notoriously marginal at best. The losses encountered in passenger operations would have to be offset by higher rates on general commodities. (e) Jurisdiction.-Another major factor overlooked in this proposed legislation is the fact that all port traffic is interstate or foreign in nature and, therefore, subject to the Interstate Commerce Act on beyond movement by and carriers and is not subject to the jurisdiction of the various State public utilities commissions. Should these import/export type of commodities be exempted from minimum rate regulation of the ICC, then the Federal Governnent has relinquished its jurisdiction and the State then has the right to assume jurisdiction. Since the State of California, through the California Public Utilities Comnission, publishes "minimum rate tariffs" it is only natural to assume that he State would immediately assume jurisdiction, relinquished by the Federal Government and place bulk commodities under its "minimum rate tariffs." The State of California has already assumed jurisdiction over numerous gricultural commodities moving by motor carrier that would otherwise be xempt under section 203 (b) of the Interstate Commerce Act. We would therefore find potash from Carlsbad, N. Mex., free from minimum ate control by the ICC when moving for export, but the Public Utilities ommission publishing minimum rates on potash from Trona for export. 'his could quite easily result in widespread discrimination to California hippers in the export trade in comparison to their competitors in other tates. (f) Transfer of relief from ICC to courts.-To remove the authority and ower of the ICC in determining minimum rates would impose a severe rain on our already overloaded Federal courts. There are hundreds of ousands of rate adjustments made each year, and tens of thousands are allenged as being unreasonably low and discriminatory. This proposed legistion would require these challenges to be made in the Federal courts under titrust laws. The calendar delay of the courts alone would cause irreparle damage to shippers, carriers, and localities before any corrective action uld be undertaken. Once minimum rate control were removed from the ICC, wholesale rate justments would be made by the carriers and in order to protect our interts, the port would be required to add at least two attorneys, with substantial ansportation background, just to handle rate cases before the courts under e antitrust laws. Nonattorney practitioners are not allowed to handle any se in a court of law, therefore transportation attorneys would be required. (g) Opposition by ICC.-This proposed legislation was opposed by Chairman ipert L. Murphy of the Interstate Commerce Commission during his 2-hour, page testimony before the House Interstate and Foreign Commerce Comttee. Chairman Murphy emphasized the "* ** potential for irreparable ury, together with the overriding necessity for protecting the public inter, strongly indicates the need for the availability of a special procedure it assures relief before, rather than after, injury has occurred." Chairman Murphy also stated that removal of minimum rate control would ng intensified unfair or destructive carrier competition. h) Port competition.-The enactment of this proposed legislation on elimtion of minimum rate controls by the ICC would open up a major rate war bulk commodities originating in the Midwest. Ports on the gulf coast and ts on the Pacific coast would be continually whipsawing the carriers for further reductions on grain and other bulk rates. Losses of revenue to the carriers would necessitate further increases in general commodity rates. Due to the greater distances from Midwest points to the Pacific coast than to the gulf coast the increased cost would be greater on commodities moving to or from the Pacific coast. This could cause a shift in general commodity import/ export traffic from Pacific coast ports to gulf coast ports and seriously impede any future growth of the port of San Diego, not only on bulk commodities, but general commodities as well. SUMMARY As presently worded, these bills would be detrimental to the development of the commerce of the State of California, cause substantial confusion as between Federal and State jurisdictions, place the entire Pacific coast at a disadvantage in its competitive position with the gulf coast on import/export commodities, and be particularly prejudicial to the orderly development of the port of San Diego. In view of the above analysis and conclusions, the port of San Diego, through your able representation, wishes to enter its most strenuous opposition to S.3243 and H.R. 11583 in their present form. We trust you will give the above your usual careful consideration in determining your action in this extremely vital matter. Very truly yours, JOHN BATE, Port Director. POTOSI TIE & LUMBER Co., St. Louis, Mo., June 4, 1963. Hon. WARREN G. MAGNUSON, Chairman, Senate Commerce Committee, DEAR SENATOR MAGNUSON: We are vitally interested in the passage of S. 1061, passage of which would help insure fair competition for the country's railroads with other carriers, and stimulate national transportation and corre lated industries such as ours. We respectfully urge your support of this bill and request this letter be made part of the official record of the hearings on these bills. Very truly yours, EDWARD F. SCHLAFLY, Vice President. RESOLUTION OF THE PRINCE GEORGES CHAMBER OF COMMERCE, PRINCE GEORGES COUNTY, MD. Whereas all forms of transportation are essential to the economy of the Nation; and Whereas all modes of transportation should be on an equal opportunity for al basis, without any special preferences; and Whereas Senate bill 1061 and H.R. 4700 would provide all common carriers to provide competitive services at competitive rates: Now, therefore, be it Resolved, That the Prince Georges Chamber of Commerce does hereby and with out reservation support bills S. 1061 and H.R. 4700 providing equal competitive opportunity for all modes of transportation; be it further Resolved, That a copy of this resolution be delivered to the Senators and Congressmen from Maryland, the chairman of the Senate Committee on Com merce, and chairman of the House Committee on Interstate and Foreign Commerce and to the Baltimore & Ohio and Pennsylvania Railroads which serve Prince Georges County. RESOLUTION OF THE PROPELLER CLUB OF THE UNITED STATES, PORT OF BUFFAL^ Whereas the port of Buffalo is the major eastern terminus of the Great Lak system and the western terminus of the Erie Barge Canal; and Whereas Buffalo in large measure owes its position as an industrial and ec merical center to the distinct economic advantges afforded it by low-cost tra: portation of bulk commodities such as iron ore, coal, limestone, and grain o the Great Lakes system; and Whereas such low-cost water transportation continues to be of critical importance to the growth and prosperity of the port of Buffalo and of the entire Nation; and Whereas the economies of such water transportation have been preserved by the presence of Federal minimum rate regulations of competitive rail traffic for the benefit of the citizens of Buffalo, the Niagara frontier, and the public in general by the absence of large-scale below cost rate cutting on the part the railroads which by reason of their vastly superior resources could sustain the ravages of such destructive rate practices, to the ultimate elimination of the inherently lower cost water carrier; and Whereas it is now proposed in S. 1061 and H.R. 4700, now before Congress, to exempt railroads from the regulation of the Interstate Commerce Commission over their minimum rates for carriage of bulk commodities; and Whereas such legislation would seriously endanger the continued survival of the water transportation industry of the Great Lakes upon which the port of Buffalo and the general public so greatly depend: Now, therefore, it is Resolved, That the Propeller Club of the United States, port of Buffalo, strongly opposes any such measures as contained in S. 1061 and H.R. 4700 withdrawing or diminishing the authority of the Interstate Commerce Commission over potentially destructive railroad ratemaking. Further, The port of Buffalo directs that its vigorous opposition to these proposals be communicated to the Congress of the United States through its representatives and the appropriate committees. QUINCY-SOUTH SHORE CHAMBER OF COMMERCE, INC., Quincy, Mass., June 26, 1963. At a duly called meeting held in Quincy on the above date, the board of directors of the Quincy-South Shore Chamber of Commerce by their vote adopted the following resolution: "Resolved, That the Quincy-South Shore Chamber of Commerce, with headquarters in Quincy, Mass., be recorded in favor of the enactment of S. 1061. In the interest of shippers and the localities served, it is requested that the bill be amended to retain the conference method of ratemaking.” Respectfully submitted. WILLIAM A. O'CONNELL, A RESOLUTION OF THE RICE MILLERS' ASSOCIATION Whereas under existing law transportation rates on agricultural products moving by truck are not subject to economic regulation by the Interstate Commerce Commission; Whereas under existing law transportation rates on all commodities moving by rail are subject to economic regulation by the Interstate Commerce Com mission; Whereas the President of the United States in his message to the 88th Congress on the state of the Union, dated January 13, 1963, after stating that "Our economic health depends on having healthy transportation arteries," reiterated his belief that "the way to a more modern, economical choice of national transportation service is through increased competition and decreased regulation”; Whereas bills S. 1061 and H.R. 4700 have been introduced to the Senate and House of Representatives, respectively, to implement the President's messages; and Whereas rates should be made in the light of modern technology so that the several modes of transportation may compete for traffic for which their equipment, service, and cost characteristics are best adapted: Now, then, be it Resolved by the Rice Millers' Association, That the association go on record in support of S. 1061 and H.R. 4700; and be it further Resolved, That a copy of this resolution be forwarded to the Committee on Commerce of the Senate and to the Committee on Interstate and Foreign Commerce of the House of Representatives, urging their support in the passage in the public interest of this much needed legislation. APRIL 12, 1963. 99-564-64-pt. 2- -35 J. P. GAINES, Executive Vice President. Senator MAGNUSON, ROANE COUNTY CHAMBER OF COMMERCE, DEAR SENATOR: The following is a resolution adopted by the Roane County Chamber of Commerce, in support of President Kennedy's legislative recom mendations looking toward a more equal regulation of railroads and general strengthening and improvement of the national transportation system. It is respectfully requested that this resolution be included in the record of the hear ings on Senate bills 1061 and 1062. "RESOLUTION "Whereas this body is vitally interested in a strong and efficient commor carrier transportation system within the United States; "Whereas certain of the Presidential recommendations to Congress have been submitted to Congress in the form of Senate bill 1061, proposing to remove mini mum rate regulation in the transportation of agricultural and fishery products. passengers, and bulk commodities, and Senate bill 1062, proposing to otherwise strengthen and improve the national transportation system; and "Whereas the aforementioned proposed legislation will afford a basis for a competitive and efficient overall transportation system which will benefit agriculture, commerce, industry, and the consuming public: Now, therefore, be it "Resolved, That the Roane County Chamber of Commerce does hereby record its full support of the proposed legislation embodied in Senate bills 1061 and 1062 and urges favorable action thereon at this session of Congress." Yours very truly, WINSTON SAUNDERS, ROCHESTER RAILROAD ASSOCIATION, Hon. KENNETH B. KEATING, Washington, D.C. DEAR MR. SENATOR: The Rochester Railroad Association has endorsed the passage of the minimum rate bill, S. 1061, and has enacted the following result tion, which I hereby quote, for your consideration and support: "Whereas the President of the United States has recommended the enactmen of legislation to extend to all carriers the exemption from the approval or pre scription of minimum rates under the Interstate Commerce Act for the tran portation of bulk commodities, now enjoyed only by water carriers, which w permit the forces of competition an equal opportunity to replace cumbersone regulation for these commodities while protecting the public interest by reta ing Interstate Commerce Commission control over maximum railroad rates an other safeguards such as the prohibition against discrimination, requireme governing car service and common responsibility; "Whereas the President of the United States has further recommended enactment of legislation to exempt from the approval or prescription of minin rates under the Interstate Commerce Act for the transportation of agricultur and fishery products, enjoyed now only by the motor carriers and freight f warders, the Interstate Commerce Commission to retain control of maxin railroad rates and other safeguards to protect the public interest; "Whereas the President of the United States has said that: "The combi effect of extending these bulk and agricultural exemptions will be to red drastically and equalize fairly the regulation of freight rates in this country' that: Freed to exercise normal managerial initiative, carriers will be abl- ́ rationalize their operations and reduce cost; and shippers should consequer enjoy a wider choice, improved service and lower rates; and "Whereas it is to the best interest of the people of this Rochester Railr Association to have the aforesaid enacted by legislation through reduced r bills S. 1061 and H.R. 4700: Now, therefore, be it "Resolved, That copies of this resolution in support of reduced rates legisla be sent concerned Senators and Representatives with the request that they i proper action to enact such legislation." "Resolved this 12th day of June 1963." WILLIAM P. QUINLISK, Presiden: |