(b) Seatrain, in turn, is dependent upon the individual railroads serving its ports for rates and divisions which permit movement of traffic to and from the ports for water carriage. The railroads with which Seatrain competes are permitted under section 5a of the Interstate Commerce Act to meet with impunity from the antitrust laws and collusively decide upon through joint rates as between themselves which will divert Seatrain's traffic. What is not generally understood is that in these matters they not only decide what joint rates they will make, but they also agree upon what joint rates they will not make. They also decide in these rate bureaus what will be the level of the rates to and from the ports served by water carriers. The railroads are directed by sections 1(4) and 307 (d) to maintain joint rates with water carriers such as Seatrain which will permit the movement of traffic by rail and water through routes. In practice, the railroads in their rate bureaus frustrate these requirements of the act by agreement among themselves not to make such joint rates with water carriers. And if any individual railroad violates this code, the other lines in their rate bureaus have the machinery for bringing that errant carrier into line by refusing approval of joint all-rate rates which that carrier requires, and thus depriving it of important railconnecting traffic. The President's message comments upon the lack of joint rates between railroads and other modes of transportation, and congressional committees in the past have noted the almost complete frustration of the congressional policy in favor of joint rail and water rates expressed in the Transportation Act of 1940. The ability of the railroads collusively to deny joint rates to water carriers is, in my opinion, the primary explanation for this failure. S. 3243, in lines 3 through 15 on page 3, subjects carriers exempted from minimum rate regulation to certain provisions of the antitrust laws. Those, as will be more fully detailed by another witness, are inadequate, but apparently the It would permit these proviso on lines 15 through 21 of page 3 confers antitrust immunity again on railroads which meet collusively to establish joint rates. railroads collectively to make predatory rates below cost, and apparently it would also convey the same immunity they now employ to refuse joint rates to Seatrain and other water carriers. Section 2 of this bill authorVIII. S. 3242: S. 3242 is a so-called omnibus bill intended to implement various other recommendations of the President's message. izes experiments in ratemaking by common carriers and between common carriers. It is extremely vague legislation which does not set forth any standards which rates under the proposed experiments would be required to meet. There is no need for legislation to permit experiments in ratemaking, provided that experimental rates comply with standards of lawfulness and the public interest. In fact, the Commission has authorized numerous such experiments. The enactment of this proposed legislation would leave the Commission and the other regulatory agencies involved in a complete vacuum as to its intent or purpose. We recommend against this section. Section 3 of S. 3242 adds a new subsection to section 2 of the Interstate Commerce Act, and modifies sections 216 (d) and 305 (c) to the following effect: "(b) Common carriers *** shall not unjustly discriminate as to service or rates in the transportation of loaded or empty vehicles or shipping containers tendered for transportation by any shipper or carrier, whether or not regulated." Apparently this proposal arises out of certain evils which have arisen in the transportation of "piggyback" trailers. The water carriers have no objection to its general purposes. However, the words "loaded or empty vehicles" in this section could be construed to relate, inter alia, to railroad box cars, flat cars, gondolas, and privately owned tank cars or refrigerators. If construed in this sense, the enactment of this language could have far reaching consequences on the present-day scheme of transportation. For example, railroads commonly make joint rates for through movements as between themselves, and the division of these rates over any particular railroad may differ considerably from the local rates available to shippers If this proposed amendment were construed to for the same local movement. render such a difference as discriminatory, common carriers could not in the I recommend that this profuture enter into joint rates under presently lawful divisions, and thus the whole joint rate structure of the country would be upset. posal, if enacted, be clarified to insure that it will not have the harmful effects which it could be construed to have. Section 4 of the bill deals with the establishment of through service and joint rates, and provides for the creation of joint boards for such purposes. Again, we endorse the general purposes of this section, but the language is confusing. Under the language, a new rule is provided relative to joint rates between, inter alia, water carriers and railroads. The Interstate Commerce Act presently provides in sections 1(4) and 307 (d) that railroads and water carriers must enter into joint rates, and enforcement is under the jurisdiction of the Interstate Commerce Commission. The amendment of section 1003 of the Federal Aviation Act provided in section 4 of S. 3242 might be interpreted to amend or repudiate the present provisions of sections 1(4) and 307(d) of the Interstate Commerce Act. We doubt that it was the intention of the drafters of this legislation to have this effect, and we urge that the section, if enacted, be amended to insure that it does not have that effect. We have no comments with respect to sections 5, 6, and 7 of S. 3242. Section 9 of S. 3242 deals with simplification of Government transportation rates and procurement; and also transportation of mail by motor vehicle common carriers. We have no interest in the provisions with respect to transportation of mail, but we are vitally interested in the provisions with respect to the procurement of other transportation by Government agencies. In essence, this section provides that Government agencies may procure transportation of Government materials without respect to the laws regulating such transportation for commercial shippers. It has always been the position of the common carriers by water that the Government should pay the same rates for transportation of Government property as would apply for commercial shipments of the same property. No one has ever provided a satisfactory reason why the Government, which has become the biggest single shipper of property, should be entitled to discriminatory rates, thus transferring a portion of its transportation burden to commercial shippers. We favor, in fact, repeal of those provisions in the present section 22 of the Interstate Commerce Act which entitle Government agencies to purchase transportation at rates below commercial levels. We therefore strongly oppose the enactment of section 9 of this bill as it is presently written. Section 10 of S. 3242 transfers to the Secretary of Commerce certain functions of the Civil Aeronautics Board and the Interstate Commerce Commission, including the present authority of the Commission to guarantee loans to railroads. It seems to us that this is a constructive proposal; we never approved of placing the power in the Interstate Commerce Commission to guarantee loans to railroads, because that placed the Commission in the position of being both creditor and regulator of a single mode of carriage under its regulation. We do not believe that a Commission composed of angels could equitably discharge such a responsibility, and we therefore heartily endorse this transfer of functions. Now, Mr. Chairman, to sum up the position of the water common carriers, this legislation before you-in particular S. 3243-is just another step in the continuous propaganda effort of the big railroads conducted over many years to free themselves of regulation by the Interstate Commerce Commission without coming under effective regulation of the anti-trust laws. In this campaign you have had proposal after proposal in every Congress. The newspapers are continuously filled with the railroads' repeated characterizations of the Interstate Commerce Commission as a brutal and domineering overseer of their affairs. They resemble the Communist agitators who continually shout "police brutality." We of the water carriers say that, on the contrary, the Commission, under the constant bludgeoning of this massive railroad propaganda barrage, has been, if anything, lax in its enforcement of present laws against rate discrimination and requiring rail-water coordination. Mr. Ben Heineman says to you that if you will but turn back the clock to the "good old days" of the 19th century-before the Interstate Commerce Act and the antitrust laws-the discriminations which appear throughout the railroad rate structure today would disappear like magic through the exercise of their benevolent and unhampered managerial judgment. Mr. Jervis Langdon threatens you that if you do not remove the restrictions on the railroads' monopolistic powers the Government will have to buy them. I am sure that the members of this Committee are aware that big business never likes regulation or the antitrust laws, and that General Motors, United States Steel, Du Pont, and many other big corporations also fret continually about the restraints on their exercise of management discretion. But this is the 20th century not the 19th. I am sure this committee is not going to turn the clock back to the "good old days" of the last century, and that if it decides a monopoly of transportation is a good thing, it will accept Mr. Langdon's challenge and make it a Government monopoly. In the meantime, if transportation is to be privately owned and operated, as has been the principle in this country, it should be subject to equitable regulation in the public interest. Meanwhile, there is agreed to be a big gap and an inequity in the regulation— the agricultural commodities exempt from regulaton by highway, and the bulk commodities exempt from regulation by water. The constructive step for Congress to take is to remove this inequity by repealing or severely modifying these exemptions. APPENDIX A ROSTER OF MEMBERS-COMMON CARRIER CONFERENCE American Commercial Barge Line Co., Houston, Tex. Arrow Transportation Co., Sheffield, Ala. Bison Steamship Corp., Buffalo, N.Y. Columbia Transportation Division, Oglebay Norton Co., Cleveland, Ohio. Coyle Lines, Inc., New Orleans, La. Federal Barge Lines, Inc., St. Louis, Mo. Foss Launch & Tug Co., Seattle, Wash. Gartland Steamship Co., Chicago, Ill. James Hughes, Inc., New York, N.Y. S. C. Loveland Co., Inc., Philadelphia, Pa. McAllister Lighterage Line, Inc., New York, N.Y. Pacific Inland Navigation Co., Inc., Vancouver, Wash. Puget Sound-Alaska Van Lines, Seattle, Wash. The River Lines, Inc., San Francisco, Calif. Roen Steamship Co., Sturgeon Bay, Wis. Sea-Land Service, Inc., Newark, N.J. Seatrain Lines, Inc., Edgewater, N.J. Shaver Transportation Co., Portland, Oreg. Sioux City & New Orleans Barge Lines, Inc., Houston, Tex. Southern Barge Line Corp., Paducah, Ky. Tidewater Barge Line, Portland, Oreg. Union Barge Line Corp., Pittsburgh, Pa. |