If a protest is filed, and the Commission considers it frivolous and of no importance, they do not suspend the rate. It might be profitable to speculate what would happen if conference methods of rate making were discontinued. Each railroad and each carrier in other classes of transportation would become isolated and independent and could make rates only point to point on its own line. A tremendous large majority of our shipments go over a combination of lines. A shipper must know his freight costs before he can price his goods. A passenger must likewise know his fare before he can commit himself to a trip. A producer today has a choice of many routes to a desired destination and an established rate related to each other over all routes applicable and in a moment can ascertain the cost thereof at any freight station in America. Were we dealing with one shipper only and one destination and only two or three routes the complications even then would be prohibitive. But when it is borne in mind that there are millions and millions of shippers, thousands upon thousands of railroads, motor carriers, barges, and airplanes, and thousands and thousands of origin and destination points, and a multiplicity of routes, it seems clear that, with these components geometrically developed, there would amass tariff information of such mangitude that perhaps it could not be housed in the Pentagon Building. For instance, there is no accurate estimate of the commodities transported in the United States but the freight classification lists some 60,000 separate articles or units of shipment. The maintenance of a rate on each of these 60,000 articles between each of the 62,000 stations in the United States in both directions would result in a total of slightly more than 200 trillion rates. And there are many other component parts that would turn 200 trillion into hundreds of trillions. This leaves out of account the fact that between most of these 62,000 stations there is a choice of routes and often a very wide choice of routes over which rates are or can be provided. It grows into astronomical terms and no one would be able to find out what his rate is, how to apprize his goods, and confusion would be not describable. Today every minor freight station in the United States has a full set of tariffs where one can readily find and determine a rate on any commodity from that point to any other point in the United States and beyond. In comparison, the total information regarding tariffs is at present housed in the Interstate Commerce Commission in a room much smaller than this hearing room. The personnel of the Interstate Commerce Commission, multiplied many times, would be inadequate to give our transportation advisory supervision were the conference method of rate-making discarded. Without conference rate, chaos would result and the national policy of transportation as written by the Congress of the United States would be a mockery; transportation such as we know in the United States would cease and terminate; and bedlam would result. There was something said here yesterday about a letter written by some railroad person going into the Lincoln case, as to the furniture rates to the Southwest being too low as related to the furniture rates in the Southeast. I tried to find the case, but with other things, an appropriation this morning on the Hill, I was not able to get it. But I got this, something the Interstate Commerce Commission said about furniture, and it reads just like the national transportation policy, upon which the Interstate Commerce Commission models its actions and goals. This was in 1931, 177 I. C. C., paragraph 5: We shall expect the respondents to exercise sedulous care, so far as within or between the territories they may go below the maximum reasonable bases, to avoid creation of undue prejudice and preference as between competing articles and their producers or distributors in reaching common markets. If this is not done, and if any interest shall deem itself placed at an unlawful disadvantage by reason of any special concession to a competitor, the matter may be brought to our further attention with a view to corrective action. That was in the furniture case, as I understand it, and seems to be in line. Referring back to Certificate 44, the War Production Board in asking for Certificate 44 laid down nine rules, with some A's and B's and C's under them, by which the Commission would supervise and direct rate bureaus, and how those matters would be handled. I do not know that it is necessary to read this into the record, or file it. If the chairman would desire to do so, I will. That refers back to Certificate 44. Mr. HALE. What is the document in question? Colonel JOHNSON. Certificate 44 that I discussed when I first began reading my statement, by which the jeopardy of the rate conference was removed during the war. This shows exactly how it was done by the War Production Board and the rules, and regulations laid down then to be followed by the Interstate Commerce Commission. Mr. HALE. That is not a lengthy document, is it? Colonel JOHNSON. Two pages. Mr. HALE. Without objection it may be included. (The document is as follows:) To the ATTORNEY GENERAL: CERTIFICATE NO. 44 Pursuant to the provisions of section 12 of Public Law No. 603, Seventy-seventh Congress (56 Stat. 357). I hereby approve joint action by common carriers or freight forwarders, or their respective representatives, through rate bureaus, rate conferences, or other similar carrier or forwarder organizations, in the initiation and establishment of common carrier and freight forwarder rates, fares, and charges, and carrier and forwarder regulations and practices pertaining thereto: Provided, That such action is taken subject to and in compliance with certain regulations for rate conferences formulated by the Interstate Commerce Commission a copy of which is hereunto annexed and made a part hereof; and after consultation with you, I hereby find and so certify to you that the doing of any act or thing, or the omission to do any act or thing, by any person in compliance with my approval herein expressed, is requisite to the prosecution of the war. DONALD M. NELSON, Chairman, War Production Board. MARCH 20, 1943 REGULATIONS FOR RATE CONFERENCES Rule 1. Definitions as used in these rules: (a) The term "rate conferences" means any two or more common carriers or any two or more freight forwarders who consult together, either directly or by employees or representatives, for the purpose of considering or agreeing upon rates to be charged by them, or of providing for the publication of tariffs containing such rates. (b) The term "publishing agent" means a person or corporation controlled directly or indirectly by a rate conference which publishes and files freight or passenger tariffs. (c) The term "rates" includes fares, charges, and classifications, and all rules, regulations, and practices affecting the charges made for the transportation of freight or passengers and services incidental to such transportation. (d) The term "carrier" means a common carrier or a freight forwarder. Rule 2. Any carrier performing service of the type and within the territorial and organizational scope of a rate conference's rate activities shall be eligible for membership in such rate conference upon application and upon payment of charges applicable to other members of the same class. When a rate conference consists of two or more rate conferences or their representatives, eligibility for membership in any of the rate conferences shall be considered compliance with this rule. Rule 3. On or before April 15, 1943, each rate conference shall register with the Interstate Commerce Commission and shall file with the Commission a copy of its by-laws, the names and addresses of its officers and of the members of the rate and other committees (except special or subcommittees created for temporary functioning), the rules of procedure followed by it, a copy of any agreement or other document which in any way provides for, governs, or affects such procedure, and schedules of its charges to members or, where expenses are divided among the members, statements showing how the expenses are divided; and, if a corporation, a copy of its articles of incorporation. A copy of each change in any of the above shall be filed within 30 days of the effective date of the change. Rule 4. A publishing agent, upon request of any member of the rate conference for which the publishing agent publishes rates and upon payment of the charges, if any, applicable to carriers of that class, shall include the member as a participating carrier in its agency tariffs and publish rates therein for the individual or joint account of such member, except that this shall not require the publishing agent to publish joint rates for the account of carriers who indicate their nonconcurrence therein. Rule 5. Each member of a rate conference may propose to such conference the initiation of or change in rates to be published in the tariffs of the publishing agent for application over the proponent's line or over the lines of other members of the conference performing the service for which the rates are proposed. Rule 6. No rule or practice of a rate conference shall prohibit any member from publishing or having published for his account any rate or rule after 90 days from the date the rate was proposed by him, except that, in the case of a joint rate, the publishing agent shall not publish the rate for application over the line of any carrier who does not join in the request for its publication. Rule 7. Membership in a rate conference shall not preclude a carrier, after rejection of the proposal or after 90 days from the date of the proposal, from filing individual tariffs or from participating in tariffs published by other carriers or other rate conferences. Upon the filing of such individual tariffs or upon participation in tariffs published by other carriers or other rate conferences, the rate conference or conferences in whose tariffs the earlier rates were published shall immediately provide for the removal of any conflicting or duplicating rates in its or their tariffs. Rule 8. No boycott or other means of coercion or intimidation shall be employed by a rate conference, directly or indirectly, to restrain a carrier, either a member or a nonmember, from taking independent action, consistent with these rules, to establish rates other than those approved by a rate conference. Rule 9. Each rate conference shall maintain accounts, records, and memoranda showing its assets, liabilities, income, and expenses; and shall maintain a file for each rate proposal which shall contain the rate proposal, all protests and memoranda submitted respecting the proposed rates, and minutes of any oral hearing which may be held. The accounts, records, memoranda, files, and all correspondence of a rate conference shall be open to inspection by duly authorized representatives of the Interstate Commerce Commission. Rule 10. These rules are subject to modification, change, and addition as the need therefor may be shown. Colonel JOHNSON. That is all I have to say, Mr. Chairman. Mr. HALE. Mr. Carson? Mr. CARSON. Colonel Johnson, it has been amazing to me how you could possibly keep these rates as uniform as you have all over the United States and as I look over the testimony that we have had here during the last few days, and read the hearings, even in the Seventyninth Congress, I can say as far as I am personally concerned that you have done a marvelous job. Summing this up in my estimation there seems to be just two principles involved here so far as we are concerned: Wether we are going to adopt the policy of the Attorney General's Office or adopt the policy of Congress. That is the way I sum this whole legislation up. Looking over the testimony in the last Congress and also this Congress I do not think I have ever seen a more uniform recommendation than we have had from every single type of carrier: Motor, freight and every other kind of carrier. As you look over your testimony on the pages and pages of testimony there are literally thousands of people. We found no one in opposition. That speaks very highly for your good office and also for the Interstate Commerce Commission and I want to compliment you on an excellent job done because it is amazing to me how you can keep these so uniform all over the country. That is all I have to say. Colonel JOHNSON. May I add to what you said: Not only the carriers, but the shippers themselves, the people directly doing business with the carriers, who, if these rates are unjust and illegal, are hurt first. Of course, it hurts every man in America for the rates enter into everything we use. But the people connected with it, Government official bodies, the shippers, the farmers, the agricultural industry, there is no dissent. And you speak of the just distribution of rates by the Commission. It is supervised by the Commission, but the shippers have a voice in proposing rates. Now if the rate bureaus made a rate that was final I might see illegality. But these rates are made subject to review by the United States Government-by the Interstate Commerce Commission from the authority coming out of the Congress, and when these rates are reviewed and fixed by the Commission they are Government made rates, not bureau rates. There are people who come into Washington and hold these conferences to make proposals to Congress. Those proposals if they become effective by congressional action would be legal, but there is no illegality of anybody approaching you gentlemen with the ideas of legislation and if you legislate it the United States legislates it. It is not the lobbyists, it is not the conferees. They bring it to the Government of the United States. And you gentlemen have laid down laws, a preamble as to the policy and definition thereafter, page after page. And you have set the language within which the Interstate Commerce Commission has used its judgment legislatively or judicially. 'If we get out of that, we are wrong and we are corrected. We are normal human beings and we make errors. So does Congress. As long as we have an organization of human beings we make errors. But we correct them as rapidly as possible. The Commission is 60 years old. It is your oldest Commission. I think it has an enviable reputation. You have got to let somebody supervise a thing so vital as rates in America. Who is going to do it? Congress has said for 60 years that the Interstate Commerce Commission shall, within certain limits laid down by Congress, determine these rates. They have done it for 60 years. They think, and I believe you think, they have an enviable reputation. Mr. CARSON. Definitely. I feel that way about it. Mr. BULWINKLE. Colonel, in addition to those favoring it, you mentioned Mr. Carson; perhaps you have brought in contact with the State utilities, or State ration commissions, of whatever they have been called. Colonel JOHNSON. You mean the State commissions? Mr. BULWINKLE. Yes. Colonel JOHNSON. Yes, sir. Mr. BULWINKLE. And they endorse it, too? Colonel JOHNSON. Yes, sir. I think with one exception. Mr. BULWINKLE. One exception? Colonel JOHNSON. I think so, sir. Mr. BULWINKLE. I do not care to ask anything more. Mr. SADOWSKI. Colonel, in your opinion do you think that the passage of this bill would result in lower rates for the public? Colonel JOHNSON. You mean would the bill pass? Mr. SADOWSKI. No. Would it result in lower rates for the public? Colonel JOHNSON. No, sir. I do not think it will result in lower rates. It will immediately result in such confusion Mr. SADOWSKI. Will it result in higher rates? Colonel JOHNSON. In higher rates? If you confuse these railroads you will get higher rates before you get through with it or the Government will pay the bill, one or the other. Mr. SADOWSKI. I asked you whether this bill would result- Colonel JOHNSON. The bill will maintain a status quo. As I read this bill it is to remove the hazard now with which the conference rate is threatened. I think the Bulwinkle bill maintains a státus quo, of what has been going on 50 years. I think it will stabilize and reassure, and have a wholesome effect on rates. Mr. SADOVSKI. The reason I bring up the question of rates and their effect upon the public is because I think that is the thing the public would be interested in. I do not think that they care so much about nonopolies that exist in transportation or any utility, becuase in most utilities monopolies do exist in some form or other. Colonel JOHNSON. Regulated monopolies. Mr. SADOWSKI. We gave them permits to operate. Colonel JOHNSON. That is right. Mr. SADOWSKI. But the important thing to the public is as a result of these agreements will rates be lowered or will they be increased? I think that is the thing the public is interested in. Colonel JOHNSON. Yes, sir. Just look at the bill and see what the public says. They want this bill. And their only motive is profit. They think it will save them money. And it will. Mr. SADOWSKI. Not everybody would say that the State utility commissions are the public. Colonel JOHNSON. The shippers advisory board is an association of several hundred thousand shippers. The National Industrial Traffic League is composed of great industries that ship. The traffic |