already has an enormous stake in metropolitan transport through Federal aid highway funds spent in these areas and in the billions more that will be spent during the coming years. About 38 percent of all Federal aid highway funds are now going into urban areas.

CHAPTER 8. LIMITATION OF MOTOR VEHICLE SIZE AND WEIGHT

Limitation of motor vehicle size and weight involves reconciliation of carrier and public interests. The carrier is interested in reducing costs and increasing profits. On the other hand, government is interested in highway safety; it needs to insure that the motor carrier pays his incremental share of highway costs; and it has responsibility for coordinating all modes of transport.

Congressional interest in this subject began in 1935. It was manifested in the Federal Aid Highway Act of 1956, which prohibits apportionment of Interstate System funds to any State which lawfully permits use of that system by vehicles in excess of certain weights and widths. That enactment also contains related provisions on vehicular size and weight. Certain reports by the Secretary of Commerce are due on January 3, 1961.

This chapter identifies highway and bridge design features and related costs, which are affected by vehicle size and weight. It discusses progressive development of vehicle size and weight formulas, including the 18,000-pound single-axle load, 32,000-pound tandemaxle loads, and 73,280-pound gross loads set forth in the Federal Aid Highway Act of 1956.

It recommends appropriate action concerning maximum permissible sizes and weights so as to insure that heavy vehicles bear their full share of highway costs as the public interest requires. Maximum allowable axle loadings should be rigidly enforced. Federal leadership should stimulate development of standardized containers for intramodal and intermodal interchange. Where appropriate to the shipment and all other factors are equal, the Federal Government should favor those carriers who will move goods shipped under Government bill of lading in a standardized vehicle or container.

CHAPTER 9. PIGGYBACK AND CONTAINERIZATION

In transportation circles "piggyback" is the generally accepted nickname for the movement of loaded or empty highway trailers on railroad flatcars. Another designation is "trailer on flatcars" (TOFC). The need for physical coordination between segments of our national transportation system has long been recognized. Perhaps the most significant failure in achieving the congressional goals has occurred in the area of intermodal coordination. However, in this latter half of the 20th century, the emergence of piggyback as a popular means of moving freight which is mutually beneficial to carriers of different modes and to shippers and the public provides a tool to bring about the close coordination between modes which has been regarded as desirable and which neither legislation nor administrative action has been able to achieve since 1906.

This chapter reviews the growth and development of piggyback in its various forms. It commends the recent attiude of the Interstate

Commerce Commission in extending its blessing to various forms of piggyback. It lays down the objectives of piggyback.

The recommendation is made that the Department of Transportation (recommended in another part of this report) be given adequate directives and authorization to provide standardization of equipment. Standardization should not be delayed while seeking perfection-particularly since piggyback will probably give way eventually to standardized containers. The Department of Transportation (or the ICC) should be authorized and funded to contract for development of standards by the National Bureau of Standards, the National Academy of Science, or other appropriate agency.

During the period of development, provision should be made to authorize accelerated depreciation on equipment certified by the appropriate agency to conform to standards established to further coordination. Immediate full depreciation should be allowed on nonstandard equipment replaced by standard equipment. Government shipping agencies should be directed to land carriers offering standardized equipment when appropriate to the particular movement. Piggyback rates and services should be standardized as rapidly as possible by the regulatory agency. Certain cautions are called to the attention of the regulatory agency in connection with some piggyback plans.

CHAPTER 10. LABOR AND MANAGEMENT IN TRANSPORTATION

Vehicles and other facilities, without the essential work force, cannot produce transportation. Responsibility for perpetuation of longterm labor differences in transportation must be divided among the public, government, management, and labor leadership. The general public, the greatest loser, has failed to acquaint itself with the facts. Government has the major share of responsibility. Our executive and legislative branches of government seem to avoid preventive action by keeping their hands off until the crisis arrives and then seeking to put out the fire. The remaining responsibility for current conflict can be divided about equally between management and labor leadership.

We recommend that Congress prescribe positive policy direction and necessary resources, so the executive branch can constructively aid in shaping of labor-management relationships in transportation; that Congress vigilantly examine executive implementation of established policy; that the Congress critically examine the Railway Labor Act and associated legislation for appropriate revision; that the executive branch accept responsibility of leadership to acquaint the public with facts regarding obstructive practices wherever they appear in the transportation industry; and that public opinion be directed toward Government-management-labor leadership in transportation as a continuing cooperative effort to approach labor differences from an approach which will produce the best possible product at the lowest reasonable cost in national resources of manpower and materials.

CHAPTER 11. SUSPENSIONS

One of the provisions of the Interstate Commerce Act which has become the subject of acrimonious controversy in recent years is section 15 (7) pertaining to suspensions.

The origin of the present provisions is discussed, and the record of suspensions is reviewed. Industry complaints against suspension procedure are cited and an evaluation of these complaints is made. Consonant with our recommendations elsewhere in the report proposing the adoption of rate policies and rules of ratemaking leading to cost related competitive pricing in transportation, the following rule of ratemaking is recommended as a criterion in suspension actions:

When a protest is filed against a proposed rate which departs further from the fully distributed costs of the proponent than does the existing rate the proposed rate should, in the absence of compelling reasons to the contrary, be suspended pending investigation and decision thereon. When the proposed rate is closer to the fully distributed cost than the existing rate it should not normally be suspended.

A new provision for the posting of bond by the initially successful litigant carrier in a suspension action is provided.

CHAPTER 12. IMPLICATIONS OF GOVERNMENT REGULATION OF SERVICE: THE CROSSROADS

Up to now the Civil Aeronautics Board has exercised rigid regulatory control of air transportation by use of its powers over entry, routes, and rates. In effect, these powers were used to control the means by which competition could be expressed.

By recent use of powers over adequacy of service, however, the Board is reaching out to control competition itself.

The power over adequacy of service has been construed to authorize the Board, after a finding that service to any certificated community is inadequate, to require additional or improved service which could include: type of service, coach, first class, etc.; type of equipment; number of flights and time of day; single plane, nonstop, skip-stop or limited-stop service; and satisfaction of individual needs at neighboring airports.

Obviously, this type of authority in a regulatory agency is fraught with the danger of constant and imprudent interference by the Government in essentially managerial functions which have been traditionally lodged in the management of companies dealing in transportation.

The question raised by this sweeping extension of use of control powers is whether the regulatory structure within which competition. is to operate to satisfy air transportation needs is so designed that the profit incentive will not do the job, requiring, therefore, further governmental control, resulting ultimately in governmental assumption of the managerial role as well as that of regulator-and with this, implicitly, the Government paying the bill for the service ordered.

If this is going to be the outcome, we ought not stumble into it. The limits which should be placed upon the authority of the regulatory agency should be thoroughly explored before embarking upon a course where the Government, upon assuming the responsibilities of making

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critical managerial decisions may face some responsibility of making the companies whole if this exercise of managerial functions results in a serious financial loss to the companies involved.

It is concluded that it is too soon to decide exactly where this new trend in regulation may lead but close watch is considered essential and congressional inquiry is recommended.

CHAPTER 13. THE NATIONAL RAIL FREIGHT CAR PROBLEM

There are two parts to the overall rail freight car problem. One is the question of the car supply. The other is cost associated with our present practices which might be reduced under other conditions thus reducing the cost of transportation to the national economy.

Freight car ownership is declining. Utilization is presently decreasing. The age factor of the cars is not favorable. The number of bad-order cars is excessive. Taken together, decreasing ownership, poorer utilization and an unfavorable age factor do not promise a car fleet in keeping with projected transportation requirements which accompany increased gross national product. Another problem is the quota of cars to be owned by each railroad-a problem which has not been solved and shows no prospect of solution under present concepts. The present practices in the industry are reviewed and the advantages and objections to a national car pool are considered. The conclusion is reached that industry and Government working together should prescribe the details of a charter for a National Rail Freight Car Corporation to be authorized by Congress after a detailed study of such a program.

PART I

INTRODUCTION

CHAPTER 1. THE STUDY CONCEPT

I am not an advocate for frequent changes in laws and constitutions. But laws and institutions must go hand in hand with the progress of the human mind. As that becomes more developed, more enlightened, as new discoveries are made, new truths discovered and manners and opinions change, with the change of circumstances, institutions must advance also to keep pace with the times.-THOMAS JEF

FERSON.

Despite the publicly expressed opinions of some who desire to maintain the status quo, recent legislative history, editorial comment from all corners of our Nation, the writings of assorted transportation authorities and a barrage of complaint from various carriers all point to a growing concern with the present and future ability of our transportation plant to "meet the needs of the commerce of the United States, of the postal service and of the national defense." The following quotation from the report of the Kilday subcommittee of the Committee on Armed Services of the House of Representatives (October 10, 1959) pungently expresses the reactions of that group to the situation:

Transportation is one of the tools required by civilized man to bring order out of chaos. It reaches into every phase and facet of our existence. Viewed from every standpoint, economic, political and military, it is unquestionably the most important industry in the world. You can no more operate a grocery store or a brewery than you can win a war without transportation. The more complex life becomes, the more indispensable are the things that make up our transportation systems.

The history of transportation is the history of adjustment to new situations that are constantly arising in a dynamic economy. Knowing its importance, one would expect that this great industry would be striding forward with giant steps to keep pace with all of the incredible achievements of our times. On the contrary, the picture that emerged from our hearings was one of a plethora of outdated and outmoded equipment, deferred maintenance, inadequate highways, depressed earnings, claims of unfair tax regulations, favored treatment of one mode over the other by subsidization, and the like, all of which reflected an unenviable state of suspended animation, detrimental to the economy and dangerous to the defense of the country.

Each mode of transportation had its complaints, both against competing modes and regulatory practices, and none presented the dynamic outlook and hope for the future that should prevail in this era of fantastic progress. The representatives of each of the modes of transportation devoted much time to indicating why theirs was the best, fastest, most economical in the use of fuel and manpower, and like reasons for indicating that each was the indispensable mode. Despite the complete reliance of our economy and defense on all modes of transportation in varying degrees, no one deemed it necessary or desirable to concern himself with suggestions that might work to the benefit of all, economic and defense-wise, through the cooperative actions of each mode, one with the other.