TABLE 3.-Inland waterways, including Great Lakes, estimated volume and indexes of growth of intercity freight traffic, public and private 1 Part of these changes resulted from coverage of waterways previously in use but not covered. These changes increased the 1948 estimate by 2.6 billions of ton-miles, the 1951 by 4.3 billions, the 1953 by 6.4 billions and the 1954 by 6.7 billions, each as related to the previous year (1947, 1950, 1952, and 1953 respectively). For details, see "Waterborne Commerce of the United States, Corps of Engineers, Department of the Army. 2 Preliminary. Source: Intercity ton-miles, 1939-59, Interstate Commerce Commission, Bureau of Transport Economics and Statistics. GROWERS AND SHIPPERS LEAGUE OF FLORIDA, Senator W. G. MAGNUSON, Washington, D.C. DEAR SENATOR MAGNUSON: We are enclosing copy of statement prepared by our attorney, M. W. Wells for and on behalf of the Growers and Shippers League of Florida, Florida Citrus Commission, Florida Canners Association, Florida Citrus Mutual and the Florida Fruit and Vegetable Association with respect to Senate bills 1197 and 1089, which bills will be the subject for hearings before the Senate Commerce Committee, beginning May 11. We respectfully ask that this statement be made a part of the record. We further understand that witnesses at the May 11 and 13 hearings will be confined to representatives of the Association of America Railroads, the American Trucking Association, the waterways and the unions, and that subsequent hearings will be scheduled giving shippers an opportunity to be heard. When the additional hearings are scheduled we anticipate requesting time to submit additional testimony verbally. Yours very truly, GORDAN STEDMAN, Executive Vice President. STATEMENT OF M. W. WELLS RESPECTING S. 1197, S. 1089, AND H.R. 5937 My name is Maxwell W. Wells. I am an attorney and a member of the law firm of Maguire, Voohris & Wells, with offices at 135 Wall Street, Orlando, Fla. I have appeared on several occasions before this committee and also before the corresponding committee of the House of Representatives. I have been registered as a class A or attorney practitioner before the Interstate Commerce Commission since the first registration was authorized in 1929; and since 1926 I have appeared before the Commission and the courts in numerous proceedings affecting transportation of Florida citrus fruits and vegetables and products thereof. This statement is prepared and submitted by me as attorney for Growers and Shippers League of Florida and for Florida Fruit and Vegetable Association. The latter is a nonprofit agricultural trade association under the laws of Florida, representing fresh fruit and vegetable growers and shippers, with its principal office at 4401 East Colonial Drive, Orlando, Fla. The former is a voluntary nonprofit corporation whose members are growers and shippers of citrus fruits and vegetables in and from Florida, with offices at 45 West Central Avenue, Orlando, Fla., it being also the transportation agency of Florida Canners Association, Florida Citrus Mutual, and Florida Citrus Commission, the latter commission being the State body charged with the statutory duty of protecting interests of the Florida citrus industry with respect to transportation facilities and transportation rates and charges. We are opposed to the legislative concept of S. 1197 and S. 1089 (and the companion bill H.R. 5937 in the House of Representatives), for the principal reasons that we regard them as being unsound transportation legislation, as being opposed to the long established principle that rates for each mode of transportation should be made for that mode, and they appear to be radical departures from the original purpose of the Interstate Commerce Act to eliminate and prevent discrimination and preferences as to shippers and the general public. In my opinion, these legislative proposals are not in harmony with the national transportation policy of the Congress. I do not think they will improve or promote fair and impartial regulation of all modes of transportation. Certainly, they tend to obscure and prevent the recognition and preservation of the inherent advantages of each mode. I do not believe that they will "promote safe, adequate, economical, and efficient service," nor will they aid in fostering "sound economic conditions in transportation and among the several carriers." It appears to be the intent and purpose of proponents to discourage "the establishment and maintenance of reasonable charges for transportation services, without unjust discriminations, undue preferences or advantages, or unfair or destructive competitive practices." The Florida citrus and vegetable industries use all modes of transportation. We need all modes to transport our products in great volume to the great consuming markets of our Nation. We are convinced that the shipper has, and ought to have, the free right and choice to select the form or mode of transportation which he believes to be best suited to his individual needs. The shipping public, both producers and consumers, is entitled to the continued advances in technological improvements; and they are entitled to share in the benefits therefrom. Further development and improvement ought not to be stifled or impeded by new artificial rules designed to benefit one form of transportation at the expense of others. The right of each mode to exploit their inherent advantages by the making of rates which will permit the free movement of traffic by that mode is likewise of benefit to the general public, and to the growers and shippers, even though there may be a competitive effect on a different mode of transportation who cannot meet the rates because of inherent disadvantages not common to all of the modes of transportation. Some years ago there was a substantial movement of fresh citrus fruit from Florida origins to the North Atlantic ports, by water. For example, in the seasons 1937-38 to 1940-41, the boat movement constituted respectively 54, 52, 42, and 44 percent of the entire movement to those destinations (266 ICC 641). There was intense competition between the rail lines and the water lines for that traffic. In an effort to retain what they considered to be their fair share of the traffic, the rail lines established competitive fourth section rates, which were maintained in the tariffs from the early thirties until 1947. Of course, the water movement ceased entirely in World War II, because of the lack of ships. In fact, in the 1941-42 season, only 1,456 carlots of Florida citrus moved by water to the North Atlantic ports, in contrast with 28,410 rail cars during the same season. In early 1946, following the end of the war, the water lines gave consideration to the resumption of service, but concluded that they were unable to do so "the indicated reason for the failure to resume this service is that the financial losses would have been too great under the existing costs and rates" (266 ICC 637). It is of course common knowledge that water costs skyrocketed during World War II. For example, the costs of a voyage from Jacksonville, Fla., to New York, N.Y., increased from $12,659 in 1940 to $19,922 in 1946, or 57 percent, according to the water lines. A substantial part of that increase was the item of crew wages-135 percent increase (266 ICC 632). In March of 1946 the War Shipping Administration joined by the water lines, sought an order from the Interstate Commerce Commission, first canceling the fourth section relief theretofore granted to the rail lines, and second requiring the rail rates to be not less than 7 cents per standard box of citrus higher than competitive water rates. There was "no claim by any party of record" in that proceeding that the rail "rates are below reasonable minima" (266 ICC 631). On the contrary, "the issue is in effect that the relief (rail) rates and the rates now maintained by the truck-water routes are on a level so low that the water carriers are unable to resume operation" (266 ICC 631). In short, the water lines requested that the Commission "require increases in rates of one type of carrier to permit another type of carrier to share the traffic." The Commission properly held (266 ICC 635): “We agree with counsel that such is not required by the statute." We are here before your committee therefore to urge that sound transportation legislation ought not to require one carrier to raise its rates or to maintain a higher level of rates for the purpose of permitting another type of carrier to share the traffic. Of course, the original act to regulate commerce, the Cullom Act of February 4, 1887, was enacted at a time when only railroads were brought under regulation. Section 1 requiring that all charges for transportation be just and reasonable was in substance the adoption of the long existing common law rule. The first major extension of regulation to another mode or type of carriers was the Motor Carrier Act of 1935. There was a fear at that time that the inclusion of motor carriers in the regulatory scheme would place them in a straitjacket, to be controlled by railroad regulations, rates, and interpretations. The Motor Carrier Act, of course, contained the declaration of policy that transportation by motor carriers should be so regulated "as to recognize and preserve the inherent advantages of, and foster sound economic conditions in, such transportation and among such carriers in the public interest." In an early motor carrier case (4 MCC 755), the Commission recognized that in many instances advantages inherent in motor transport permit motor carriers to charge higher rates than the rails, and that when the services of both are equally attractive to the shippers, the traffic flows to the agency having lower rates. There is nothing in the Motor Carrier Act, as finally adopted, to indicate that motor rates should be fixed at a level to permit free movement of traffic by rail. Indeed, the contrary was specifically set forth in section 216 (49 U.S.C. 316) which states: "In the exercise of its power to prescribe just and reasonable rates for the transportation of passengers or property by common carriers by motor vehicle the Commission shall give due consideration, among other factors, to the inherent advantages of transportation by such carriers, to the effect of rates upon the movement of traffic by such carriers, to the need, in the public interest, of adequate and efficient transportation service by such carriers at the lowest cost consistent with the furnishing of such service; and to the need of revenues sufficient to enable such carriers, under honest, economical, and efficient management, to provide such service." When part III of the act respecting water carriers was added in 1940, the language with respect to the traffic factor, etc., in 49 U.S.C. 907 (f) is pertinent and completely consistent with the established view that rail rates or motor rates are not necessarily the same as water rates "to the effect of rates upon the movement of traffic by the carrier or carriers for which the rates are prescribed; to the need, in the public interest, of adequate and efficient water transportation service at the lowest cost consistent with the furnishing of such service; and to the need of revenues sufficient to enable water carriers, under honest, economical, and efficient management, to provide such service." Similar specific language was enacted when Part IV: Freight Forwarders, was added in 1942 (49 U.S.C. 1006 (d)) now reading in part: "In the exercise of its power to prescribe just and reasonable rates and charges of freight forwarders *** the Commission shall give due consideration * * * to the effect of rates upon the movement of traffic by the freight forwarders for which the rates and charges are prescribed * * *.” Shortly after the Transportation Act of 1940, Chairman Eastman speaking for the Commission in docket 25727, Seatrain Lines Inc. v. Akron C. & Y. Ry. Co. (243 ICC 199) at page 214 of the text said: "*** the rule of ratemaking in section 15a has been recently amended so as to require us, in the exercise of our authority to prescribe just and reasonable rates, to 'give due consideration among other factors to the effect of the rates upon the movement of traffic by the carrier or carriers for which the rates are prescribed ***.' This admonition is repeated in sections 216(i) and 307(f) containing rules for ratemaking relating to motor and water carriers, respectively. The words which have been italicized for emphasis are of particular interest. They were not in either of the bills originally passed by the Senate and the House of Representatives but were added by the committee of conference. Their meaning supported also by the legislative history, seems to be that no carrier should be required to maintain rates which would be unreasonable, judged by other standards, for the purpose of protecting the traffic of a competitor." About a year later, the Commission in I. & S. Docket 4948, Asbestos Waste from Canada and Vermont to New Orleans (248 ICC 143, 146), used similar language as follows: "Protestant's (Pan-Atlantic Steamship Corp.) situation at New Orleans is a disability inherent in its operations, and Seatrain Lines cannot be required to maintain rates higher than it deems advisable simply for the purpose of protecting the revenue of protestant. In commenting on the late amendment to section 15a of the act, where, in prescribing just and reasonable rates, we are required to give due consideration, among other factors, to the effect of rates upon the movement of traffic by the carrier or carriers for which the rates are prescribed.' the Commission said in Seatrain Lines, Inc. v. Akron, C & Y Ry. Co. (243 ICC 199, at p. 214), that the meaning of the above-quoted language seems to be that no carrier should be required to maintain rates which would be unreasonable, judged by other standards, for the purpose of protecting the traffic of a competitor." It was our view that the beneficent amendment of 1958 which added paragraph (3) to section 15a, was intended to lay to rest any further contention or argument that rates might be made for one carrier to protect traffic of another carrier. It appears to me that the added language of S. 1197 is wholly unnecessary, contrary to the long-established basic principles, and is an effort to emasculate the intent, purpose and effect of the 1958 amendment. We earnestly urge that S. 1197 be not enacted into law. S. 1089 is an attempt to attain the ends sought in a somewhat different manner, by adding a new paragraph to section 3(1) and to section 305c (49 U.S.C. 905), one relating to railroads and the other to water carriers. As originally enacted in 1887, section 3(1), the preference and prejudice section, read as follows: "It shall be unlawful for any common carrier *** to make or give any undue or unreasonable preference or advantage to any particular person, company, firm, corporation, or locality, or any particular description of traffic, in any respect whatsoever, or to subject any particular person, company, firm, corporation, or locality, or any particular description of traffic, to any undue or unreasonable prejudice or disadvantage in any respect whatsoever." (NOTE. The amendment of 1935 added "or cause" after give, "association" after corporation, and "port, port district, gateway, transit point" after localityto overcome the Supreme Court decision in Texas & P. Ry. Co. v. United States, 289 U.S. 627.) The Transportation Act of 1940 added significantly the proviso which remains a part of section 3(1), viz: Provided, however, That this paragraph shall not be construed to apply to discrimination, prejudice, or disadvantage to the traffic of any other carrier of whatever description." It is of further significance that a similar proviso separately was incorporated in and remains in the law as to Motor Carriers (par. (d) of 49 U.S.C. 316), Water Carriers (par. (c) of 49 U.S.C. 905), and Freight Forwarders (par. (b) of 49 U.S.C. 1004). Also, in Part III: Water Carriers, there is added to paragraph (c) of 49 U.S.C. 905, the admonition that: "Differences in the classifications, rates, fares, charges, rules, regulations, and practices of a water carrier in respect of water transportation from those in effect by a rail carrier with respect to rail transportation shall not be deemed to constitute unjust discrimination, prejudice, or disadvantage, or an unfair or destructive competitive practice, within the meaning of any provisions of this chapter, and chapters 1 and 8 of this title." I think it reasonable to conclude therefore that the proponents of S. 1089 seek by the proposed legislation to give an advantage and preference to motor carries to the disadvantage and prejudice of the rail lines. It is our poistion that such inequality has no proper place in transportation legislation. A further observation with respect to the specific bills may be appropriate-it seems obvious that if such be enacted into law there will be some conflicts with existing law which is not expressly repealed by the proposed bills. Whether a repeal by implication is intended is always a most difficult question. But in any event there would undoubtedly follow a tremendous volume of litigation to determine whether there is any repeal, and also just what is the proper lawful interpretation and application of the new theory in competitive transportation. RESOLUTION OF THE GLENWOOD SPRINGS, COLO., CHAMBER OF COMMERCE Whereas the Glenwood Springs Chamber of Commerce believes that our American free enterprise system can best be served by free competition wherever possibly, and; Whereas we believe that Government regulation should only be imposed where it serves the public good, and setting of minimum freight rates neither benefits the producer nor the consumer and is contrary to competitive practice so essential to the survival of our free enterprise system: Therefore, be it Resolved, That we urge all of our elected Congressmen and Senators, the Honorable Gordon Allott, the Honorable John A. Carroll, and the Honorable Wayne N. Aspinall to oppose any and all legislation that would set a minimum on freight rates by the Interstate Commerce Commission, and allow minimum rates to be set by free competition. Passed by the Glenwood Springs Chamber of Commerce, Glenwood Springs, Colo., at their regular board of directors meeting this 17th day of May 1961. W. C. MILNER, President, Glenwood Springs Chamber of Commerce. STATEMENT OF C. G. GUNDERSON, PRESIDENT, BOND-GUNDERSON Co., My name is C. G. Gunderson. I am president of the Bond-Gunderson Co. with offices at Grants, N. Mex. We have been in business in the Grants area since 1915. I am here today requesting that S. 1197 be opposed in that it purports to amend section 15a (3) of the Interstate Commerce Act. In my opinion as a shipper and user of transportation services it is necessary that we have reasonable and the lowest possible rates via the railroads of our country in order that we may price our goods in line with their charges rather than in line with the charges of various modes of transportation. It seems vital in the national interests of the country as a whole that the Interstate Commerce Commission be allowed to continue to judge rate requests on the basis of whether they are compensatory to a given carrier and not as to whether said rates would cause a hardship on another mode of transportation. As a shipper and receiver of many commodities in the Southwest, rail transportation is depended upon to move many of our commodities. The amendments proposed to the bill will leave the trucks free to arbitrarily set the level of rates and would prevent the railroads from going below these levels. This definitely would be harmful to the public interests and in effect would assist in pricing many commercial concerns out of business. In appearing today in behalf of the Nation's railroads I respectfully request that opposition to this bill be seriously considered. STATEMENT OF ALAN MILLS, ASSISTANT MANAGER IN CHARGE OF TRAFFIC, CALIFORNIA GRAPE & TREE FRUIT LEAGUE, SAN FRANCISCO, CALIF. Mr. Chairman and members of the subcommittee, my name is Alan Mills. I am assistant manager in charge of traffic of the California Grape & Tree Fruit League. The league is the trade association of the California fresh grape and deciduous tree fruit and berry growers and shippers and represents 85 percent of these commodities moving from California in interstate and foreign commerce. Annually, approximately 48,000 rail carloads and rail carlot equivalents of these commodities are shipped from California. Following is our analysis of the impact that S. 1089 (Yarborough), and S. 1197 (Bartlett), would have on the members of this league and the future of transportation if these bills were enacted. The past decade might be referred to as the dawn of a new era in transportation. In these 10 years, rail carriers have come to know what competition really means. They learned about competition and have learned to adjust their operations to meet competition. Railroads, in addition to having learned these things, had their shackles of regulation loosened enough by the Transportation Act of 1958 so that they were able to make some of the adjustments that were necessary to meet that competition. |