COMPARATIVE EFFICIENCY Ratio of Equipment WEIGHT Ratio of Equipment COST to carrying capacity The CHAIRMAN. One question, for the record primarily: How does the present law on exemption of bulk commodities affect your or ganization? Mr. TAYLOR. That again is part of Mr. Struble's testimony. We in general feel that common carriers not restricted to water lines would benefit by some exemptions in various parts of the act from regulation. Senator SMATHERS. Thank you, Mr. Taylor. Senator GEORGE A. SMATHERS, THE AMERICAN WATERWAYS OPERATORS, INC., Chairman of Surface Transportation Subcommittee of the Interstate and Foreign Commerce Committee of the United States Senate, Senate Office Building, Washington, D. C. MY DEAR SENATOR SMATHERS: At the time Mr. G. C. Taylor, president of the Mississippi Valley Barge Line Co., a valued member of this association, testified before your subcommittee on March 17, in the current series of hearings on the railroad situation, Senator Frank J. Lausche asked him the following question: "If a rail carrier is in a position to reduce its rate on a given commodity and still earn a profit over its fully distributed costs of operation, should it be allowed to make such a reduction, or should it be prevented from so doing because it might have a harmful effect upon competing modes of transportation?" Because of the importance of this question to the barge and towing industry, Mr. Harry C. Ames, a Washington attorney representing Mr. Taylor's company, has undertaken to answer it in comprehensive fashion in a letter addressed to Senator Lausche on March 21, 1958. Having had an opportunity to see Mr. Ames' very complete discussion of what we consider a crucial factor in the current examination and discussion of competitive rate making, it has occurred to me that it would be beneficial to have Mr. Ames' letter to Senator Lausche included in the record of the hearing of your subcommittee. I am enclosing a copy of Mr. Ames' letter in hope that you will make it a part of the record. Sincerely yours, BRAXTON B. CARR, President. LAW OFFICES OF AMES, HILL & AMES, Hon. FRANK J. LAUSCHE, United States Senate, Washington, D. C. MY DEAR SENATOR: At the hearing on March 17, 1958, before the Smathers subcommittee, you propounded to Mr. G. C. Taylor, president of the Mississippi Valley Barge Line Co., a question which I believe may be phrased as follows: "If a rail carrier is in position to reduce its rate on a given commodity and still earn a profit over its fully distributed costs of operation, should it be allowed to make such a reduction, or should it be prevented from so doing because it might have a harmful effect upon competing modes of transportation?" Out of an experience of 10 years as an attorney-examiner with the Interstate Commerce Commission and 29 years as a member of its bar, I hope you may find the time to read my answer to your question. I cannot pose as a neutral because Mr. Taylor's company has been my client since its inception. I have, however, been confronted with this question in many cases before the Commission and believe I have had as much contact with it as any lawyer in the country. First of all, the question as stated is an outstanding example of oversimplification. If we could deal with the rate situation on 1 commodity, in 1 movement, closing our eyes to all others as well as to the effect of such a reduction, the answer would be plain. The rail carrier should be allowed to make the reduction. But anyone even casually familiar with the freight rate problem knows full well that ratemaking cannot be insulated to such an extent. In competitive ratemaking involving rail carriers and water carriers two truisms must be constantly in mind. They are: |