clubs all over the United States are traffic people seeking low rates. The various agricultural associations-if anybody presses for low rates at all, and more cars, it is those agricultural associations-and they are all for this bill.

Now, those are shippers. The carriers are for it. You might suspect them. They want profit. The Interstate Commerce Commission is for it. All the State commissions are for it. In fact I can name on my finger one or two who are against it. And those apparently have no direct interest in transportation and certainly have no familiarity with it.

Mr. HALE. Mr. Priest?

Mr. PRIEST. Colonel Johnson, for the sake of the record, at this point, is there in your opinion anything in this bill that would mitigate against any section of the country-I have in particular reference my own section of the country-in the question of so-called discriminatory rates growing out of official zone controversies?

Colonel JOHNSON. On the contrary. And I am from the South, where they have raised more row about any territorial rates, even in your section, where they have worse rates. And I want to see rates moved out.

This bill is a reassurance in a trend that has already started.
Mr. PRIEST. I had that general feeling myself.

Colonel JOHNSON. You are exactly right on the subject. That is exactly right, sir.

Mr. PRIEST. I wanted an authority on the subject to state it.
Mr. HALE. Mr. Sadowski?

Mr. SADOWSKI. Nobody wants to see competition eliminated in business. I think we all would agree that we must have competition in order to have good business, in order to have fair prices, and fair rates. The only justification we would have for eliminating competition as to a certain extent this bill provides, is by showing to the public that this will result in lower rates, or at least that if the bill does not pass there might be increased rates that the public would have to pay. But that would have to be shown, or should be shown, before this bill will have my support.

Colonel JOHNSON. First, you will never eliminate competition in transportation. I do not care whether it is trucks or busses or airplanes or railroads. It will be there no matter what you legislate. It is part of the beast. When the Interstate Commerce Commission was established it was established when we only had railroads, for the protection of the shipper. That is what its first task was. As it went along and we built these good roads and we had the trucks and the airplanes and the busses, the railroads were putting in competitive rates, and competition not only growing between railroads but growing between different forms of transportation, you will have that until the end of time and I warn you today that the Commission prevents rates unreasonably lower, very much more often than denying an application to raise the rates.

The trend now is for transportation to haul something, at a loss, to keep its competitors from moving it. You take the pick-up and deliveries that the railroads are doing today to their sorrow; to compete with the normal pick-up and delivery of trucks that enter into the trip itself, is costing them millions of dollars, and I doubt not

that it is costing them perhaps as much as they get out of the line haul of the picked-up article.

Mr. SADOWSKI. There should not be much competition in that field as far as hauling by truck is concerned because just recently I had the experience of paying $40 for bringing in a sofa and two chairs from the city of Detroit to Washington, by truck. It cost me $40. I tried to find out how that came about, because that rate certainly did not seem fair, but evidently it is done within the rules of the ICC.

The Commission has approved those rates. To me it seems an exorbitant rate to pay for the shipment of three pieces of furniture. Colonel JOHNSON. It does seem high.

Mr. SADOWSKI. The railroad people certainly would not have much competition from trucks on rates, because they could certainly haul it for less than that.

Colonel JOHNSON. They will pick-up and deliver on LCL; that has been one of the most difficult troubles I have had in car service. It is using per week about 115,000 cars a week in LCL. We have a wheat crop out there, the greatest ever grown in history by any nation and the boxcars, nearly 115,000 a week, out of less than 700,000, are put in LCL service and that involves pick up and delivery, and freight forwarders.

Mr. BULWINKLE. Colonel, may I ask you if you know the purpose. of this bill? That it is not a rate-making bill?

Colonel JOHNSON. Yes.

Mr. BULWINKLE. That was, in answer to Mr. Sadowski, not for that purpose at all?

Colonel JOHNSON. I was asked about the effects on the rate.

Mr. BULWINKLE. The ultimate effect. What would happen, assuming for the sake of argument that the Lincoln case and the Georgia case, or any others that may be pending before the courts were found in favor of the Government and the State of Georgia, what would happen in the rate-making field then?

Colonel JOHNSON. I told you what would happen if you stopped the conference rates. I do not think they can be stopped. I do not think there is any way in the world you can stop some sort of a conference, else you will ship to the end of the line and go there and reship, and go to to the next end and reship. It is unthinkable.

Mr. BULWINKLE. That is what was done prior to the days of the Interstate Commerce Commission, was it not?

Colonel JOHNSON. Yes. There had been some interchanging started before that. And some conference. But nobody knew what it meant Everything was in its infancy. But as soon as the idea of continuous passage over more than one line started, conferences started, and it wil stay here as long as we have shipments over more than one line There is no way to escape. It just cannot be done in a country like this, without conferences.

And as long as the conferences are supervised and directed by the Government, and its proposal is submitted to the Government and is subject to review by the Government of the United States, I cannot see how anybody can defend it. Unless they do not trust the Interstate Commerce Commission and want some other governmental agency to do it. That is a matter for the Congress.

Mr. HALE. Thank you, Colonel Johnson.

Colonel JOHNSON. Thank you.

Mr. HALE. Are there any other witnesses to be heard in connection with this legislation?

1

Mr. BULWINKLE. I understand, sir, Mr. Wiprud is here and wants to be heard.

STATEMENT OF ARNE C. WIPRUD, FORMERLY SPECIAL ASSISTANT TO THE ATTORNEY GENERAL, CHIEF OF THE TRANSPORTATION SECTION, ANTITRUST DIVISION, DEPARTMENT OF JUSTICE

Mr. WIPRUD. Mr. Chairman, Congressman O'Hara called me this morning and asked me if I would appear here.

Mr. HALE. The committee would be glad to hear from you.
Mr. BULWINKLE. Have you copies of your statement?

Mr. WIPRUD. I am sorry. When Congressman O'Hara called me I had just several hours to prepare my statement and I had just this one copy.

My name is Arne C. Wiprud. I was formerly special assistant to the Attorney General, Chief of the Transportation Section of the Antitrust Division of the Department of Justice. I am now a practicing attorney in Washington, D. C.

As I stated, I appear at the invitation of Congressman O'Hara to present my views on S. 110. I am particularly happy to do so because I think that this group like any other public body and public tribunal in this country keeps an open mind on this question and is glad to hear both sides of any story.

As Chief of the Transportation Section, Antitrust Division, Department of Justice, from June 1, 1941 to July 10, 1945, I had charge of the Department's investigations of the practices of rate bureaus and rate-making conferences and associations in all fields of interstate transportation. These investigations were initiated following complaints from private and public sources of coercive rate fixing through group action and charges of antitrust violations. Antitrust suits, civil and criminal, were instituted as the result of these investigations, the more important of which are still pending.

In May 1943, on invitation of the Senate Committee on Interstate Commerce, I testified for the Department of Justice on the then pending bill, S. 942, the subject matter of which was identical with. S. 110. My opening statement appears at pages 5 to 67 and my further statements appear at pages 89, 177, 203, 241, 458, 470 and 781 of the printed hearings on S. 942. After extensive hearings, this bill was not reported by that committee. Again, in April 1946, on invitation of the Senate committee, I testified as a private citizen on H. R. 2536, the so-called Bulwinkle bill. My testimony appears at pages 553 to 630 of the printed hearings on that bill.

And again, in January 1947, on invitation of the Senate committee, I testified as a private citizen on S. 110, the so-called Reed-Bulwinkle bill. My testimony appears at pages 118-128 of the printed hearings. I respectfully call the committee's attention to those statements which further studies and developments have reenforced and which I hereby reaffirm:.

S. 110, as introduced, was word for word the Bulwinkle bill (H. R. 2536) as amended and reported by the Senate committee at the last

session, and which failed of passage. The bill as thus reported at the last session has been changed in many material respects from the Bulwinkle bill as originally introduced, and there have been changes in the original Reed-Bulwinkle bill now before the committee, during the course of Senate debate. Therefore, it would seem most helpful to the committee to supplement testimony already given with an analysis of the provisions of the Reed-Bulwinkle bill, as amended, and their public significance.

At the outset I would like to state my conclusions and then the facts and the reasoning in support thereof.

An analysis of the provisions of S. 110, as amended, made in the light of the facts of record and the reports of this committee, compels the conclusion that through its passage the legislative policy of competitive enterprise in public transportation would be supplanted by a Nation-wide cartel-monopoly, under the domination of the Association of American Railroads and the traditional railroad bankers. This is so because the bill would:

1. Effectively repeal the antitrust laws as applied to public transportation.

2. Legalize the continuation and expansion of control over every phase of a carrier's operations by the Association of American Railroads and the traditional railroad bankers;

Insulated from the courts, and without fear of hindrance from other agencies of the Government they would be free to create combinations of carriers, Nation-wide, with power not only to fix rates, but also to determine what part of the rate each carrier shall receive, at what time its trains shall arrive and depart, over what routes they may operate, what equipment shall be built and how it shall be used, and what should be done collectively to promote "adequacy, economy, and efficiency of operation or service;"

In view of the vast powers thus conferred upon the transportation cartel, and the extent of the pressures it would be able to exert upon otherwise independent carriers, it is clear that no carrier could afford to remain long outside the cartel;

3. Undo the public benefits which have resulted, or may be expected to result from antitrust suits involving the Western Agreement, the traditional banking houses of J. P. Morgan & Co., and Kuhn, Loeb & Co., equipment manufacturers, safety and signal monopolies, and rate-fixing combinations dominated by the Association of American Railroads, all of which have been and are adverse to the interests of carriers and large sections of the country.

This legislation cannot be considered apart from its effect upon other businesses and the national economy. As transportation is the basic industry which controls the life or death of many other industries, it is clear that those who control the transportation cartel could dominate the national economy.

Further, and equally important, this legislation would set the pattern for similar legislation in other basic industries, particularly if they are regulated industries, such as insurance, utilities, communications, securities and banking. If you pass this bill, how can you consistently withhold like grant of power to the Federal Communications Commission, the Securities and Exchange Commission, the Federal Power Commission, and other regulatory bodies? Thus this legislation points the road to complete cartelization of all industry

in our country, completely reversing our system of private enterprise. And here it should be stated that there is nothing about the transportation industry that requires different legislative treatment in relation to the antitrust laws than any other private industry, except in the making of joint transportation rates.

And I want to say here that under existing law all connecting carriers and carriers that participate in joint rates and through routes can today enter into agreements and can meet and confer and agree upon joint rates and through routes. There already is that exemption provided in the Interstate Commerce Act. No new legislation is needed.

All have recognized-including the Supreme Court of the United States in the Georgia case that there is a legitimate area of collaboration in the making of joint transportation rates to facilitate commerce. That is already an existing law.

But that is a far cry from what is sought in this bill which, in the final analysis, is a desperate bid for continued domination of transportation companies by the banking houses of Morgan and Kuhn, Loeb. They have been brought to book for their misrule of the railroad industry in antitrust suits in the Federal court at Lincoln, Nebr., and in the Supreme Court; only this bill or similar legislation, can save them.

The analysis of the provisions of the bill which follows supports the above views:

1. The Association of American Railroads, the Western Association of Railway Executives, and every other organization existing in the transportation industry, fall within the terms of paragraph (2), Further, groups such as those formed under the Western Agreement by the traditional railroad bankers, companies manufacturing cars, locomotives, or equipment, and shippers, fall within the terms of paragraph (9). Thus, carrier groups, parties to agreements for joint or collective action, and noncarrier groups taking action to carry out the objects thereof, would be immunized from the antitrust laws.

2. The scope of agreements that may be entered into is industrywide. It includes the power to collectively fix rates, classifications, divisions;

There has been much said here about rate-making. Very little has been said about the other parts of the bill which relates to the rendering of the services and the providing of facilities for transportation. But those agreements, too, are contemplated by this bill.

As I stated, the scope of the agreements that may be entered into is industry-wide. It includes the power to collectively fix rates, classifications, divisions, allowances, time schedules, routes, the interchange of facilities, the settlement of claims, the promotion of safety, "the, promotion of adequacy, economy or efficiency of operation or service." Further, agreements may be made by carriers of different classes limited to freight classifications, as to joint rates or through routes (par. 4).

As most of the commerce of the country moves on joint rates over through routes, and as this provision does not limit such agreements to connecting carriers or carriers participating in the through traffic involved, it is clear that this provision would permit the railroads as a group to agree with motor carriers as a group, or water carriers as a group, or pipelines as a group or for all such groups to sit around