And, there is at that competition and some rate is probably not approved as a result of that, but many of them are, and even in many cases where there is opposition it is not always contested before the Interstate Commerce Commission and, bear in mind, if you please, that recourse stands available even if this legislation is approved. That will not change the shippers' opportunity.

Now, let us go one step further, if I may, please. We are located in Galveston, and in the Southwest we produce a lot of raw material that is shipped to the Eastern States. I might just use cotton as an illustration. That is shipped mostly to the eastern mills and the southern mills. In shipping that cotton, mind you, there is not a single line of railroad from the point of origin or production to destination in southern territory or New England territory. Therefore, the shipper must handle through the bureau or without that he would have to handle with each individual line, but still we find a stumbling block there. Suppose I contacted the Southern Pacific Railroad to New Orleans. They would say, "Yes, we believe you should have that rate."

I would go over and contact the line east of St. Louis or New Orleans and they would say, "But, we cannot give you that rate, because of this umbrella threat of violating the antitrust law." So, where am I; what have I gained?

Now those, gentlemen, are actual feasible problems that would exist if this legislation is not approved, and I personally cannot think of any more devastating thing to the commerce of this country, not even the coal miners' strike as compared with the problem confronting every shipper in this whole Nation, small and large.

I thank you.

Mr. BULWINKLE. Mr. Chairman.

Mr. HALE. Mr. Bulwinkle.

Mr. BULWINKLE. You spoke of uncertain conditions because of the rates being frozen.

Let me ask you if those cases do not also indicate the Department of Justice's attitude as outlined in the letter you referred and if that does not also refer to other agreements between carriers as to other services. Mr. ROBINSON. That is true. There are many of those involving service and I will mention just one.

Take the demurrage on cars. Now, there was some questions asked by one Congressman this morning about freedom of action of the carriers. Just last month we had a situation involving demurrage charges in our territory. The matter went before the bureau and it failed of approval, but one of the lines filed definite notice and the rates were published and become effective this month. They exercised their individual rights which they still could continue to do under this legislation and that is, Mr. Congressman, just representative of any of those matters and there are so many that attach to transportation where there must be a meeting of the minds, a getting together between every party interested.

Mr. BULWINKLE. Would these agreements as to service be frozen too?

Mr. ROBINSON. In my opinion, they would.

Mr. BULWINKLE. And no new agreements could be made?

Mr. ROBINSON. No, sir.

Mr. BULWINKLE. Even on passenger traffic?

64132-47-6

Mr. ROBINSON. Passenger traffic or other services. You have got another thing that confronts you throughout the States, and that is the matter of interchange of switching between switching lines and lines which are known as line haul carriers.

We have situation there in Galveston which I think illustrates that. That is the Galveston Wharves Co. They have a railroad about 51 miles, and it is under the jurisdiction of the Interstate Commerce Commission. They have reciprocal arrangements with the line haul carriers as to switching just as you do at Washington, D. C., or St. Louis, Mo., or San Francisco, Calif.

I think it would be fair to say that it would affect everyone of those services in like manner as I explained in connection with the freight

rates.

Mr. BULWINKLE. Well I take it at the present time that no one could say, with respect to the Attorney General's letter, what activities are permissible or in the permissible area of collaboration.

Mr. ROBINSON. Mr. Congressman, I intend to mention that. I do not know what that area is. There has been some discussion on that, but I do not know what it is.

Mr. BULWINKLE. Well, now, it says that:

The delineation of the permissible area of collaboration should come out of the decisions in one or both of the Georga & Western cases.

Those cases are now being tried.

Do you know anything about those cases?

Mr. ROBINSON. No; other than just general knowledge, is all; I could just make a general statement.

Mr. BULWINKLE. I want to find out for the record what kind of a decision could come out that would show the delineation of the areas of collaboration.

Mr. ROBINSON. I cannot say as to those cases, Mr. Congressman, and I cannot see any decision that would probably deal with that permissible area as to freight bureaus.

Mr. BULWINKLE. It is disturbing my mind a little bit.

That is all, Mr. Chairman.

Mr. ROBINSON. Thank you.

Mr. HALE. Thank you, Mr. Robinson.

Has Mr. Bryan come in?

(There was no response.)

Mr. HALE. Has Mr. Schwiertert come in?

(There was no response.)

Mr. BULWINKLE. Some of those witnesses I think are on for to

morrow.

The CLERK. These are on for today. They were here this morning. Mr. IIALE. Mr. Harry R. Brashear.

STATEMENT OF HARRY R. BRASHEAR, REPRESENTING AIRCRAFT INDUSTRIES ASSOCIATION OF AMERICA, INC.

Mr. BRASHEAR. Mr. Chairman, and gentlemen of the committee: My name is Harry R. Brashear, and I appear in behalf of the Aircraft Industries Association of America, Inc., a trade organization composed of the principal manufacturers of aircraft parts in the United States.

I did not appear in the hearings of any of the previous measures. If this measure were the same as the original bill that Mr. Bulwinkle introduced in the Seventy-eighth Congress, I would not be here today. As rather wide users of service transportation, we are interested in legislation which affects either the rates charged by these transportation agencies or the service rendered by them.

There are three phases of Senate bill 110, passed by the Senate last week, which I wish to discuss. The first relates to relief sought from the provisions of the antitrust statutes as they relate to carrier association agreements respecting rates. The second phase relates to paragraph (4) of S. 110, which would accord relief in connection with agreements between different classes of carriers respecting classifications. The third relates to relief in connection with agreements pertaining to matters other than rates.

Of all the transportation bills introduced into Congress, it seems to us that none has created so much misunderstanding respecting the general public support accorded it as S. 110. From the debate in the Senate, it is certain that a very powerful factor, if not the controlling factor which enlisted such a substantial majority in its favor, was the apparently widespread support accorded by shipper organizations throughout the United States. At page 6747 of the Record, Senator Reed said:

.

This has been designated by propagandists in opposition, as a "railroad" bill.. It is true that the railroads and other carriers are supporting the bill, but it is also true that the shippers of the United States are universally asking that the bill be enacted into laws. I ask unanimous consent to have printed in the Record at this point a tabulation of 958 farm, labor, commercial, and civic organizations who have asked the Congress to enact into law Senate bill 110.

When the first Bulwinkle bill was introduced into Congress, relief from the antitrust statutes was sought only with respect to rate agreements.

When the railroads enlisted support of the shipping public to this legislation, all of the data which were submitted by them, either by means of pamphlets or through the public press, and which came to my attention, was confined to the need for relief from the antitrust statutes in connection with rate agreements exclusively. In these documents and publications no relief which would permit agreements with respect to service, or agreements between different classes of carriers with respect to classifications, was advocated or justified. If one reviews the 2,400-page record built up by the Senate Interstate Commerce Committee in connection with H. R. 2536, it becomes quite clear that the widespread support given to this measure in the Seventy-ninth Congress was for the purpose of granting carriers relief in connection with their rate agreements.

I think the shippers which I represent have the same general desires respecting surface transportation as possessed by those shippers who are on record as favoring S. 110. These desires are: First, the lowest rates compatible with a sound transportation system efficiently operated; second, we are vigorously opposed to agreements in competitive matters of any sort between carriers of different classes because, in our opinion, they are objectionable and wholly unnecessary; and third, we desire a substantially improved service over that which we are getting today.

Dealing first with paragraph (2) of the bill, I wish to say that we favor relief from the antitrust statutes in connection with agreements between carriers of the same class respecting rates, fares, charges, classifications, divisions and allowances. So much has been said already in support of this relief that it need not now be repeated. I will merely say that those carrier associations where rate agreements have been made and are now being made, have been in existence for more than 50 years, and, as a practical matter, our members cannot understand how the carriers could properly function without them. This part of the bill, as well as the remainder, which details the manner in which these rate agreements shall be set up, has our endorsement. The second part of my statement deals with paragraph (4) of S. 110, relating to agreements between different classes of carriers respecting freight classifications and reads as follows:

The Commission shall not approve under this section any agreement between or among carriers of different classes unless it finds that such agreement is limited to freight classifications or to joint rates or through routes;

The objectionable part is the provision embraced by the underscored words, which were not in the original S. 110, but which were inserted after the bill was introduced into the Senate. Railroads, motor carriers, and water carriers constitute carriers of three different classes. They are naturally competitive and the provision quoted would bar agreements respecting competitive rates between the different classes. of carriers, except as to freight classifications. We propose to show why this exception, respecting classifications, should be stricken from the bill.

It, perhaps, would be helpful at this point to explain the purpose of carrier classifications, inasmuch as I fail to find that any explanation has been made to the committee. The Motor Truck Classification is a publication of 471 pages, which determines the various classes assigned to articles which are tendered carriers for transportation. In the thousands of tariffs published by carriers or their associations, and known as class tariffs, rates on the various classes to which freight is assigned are named between substantially all points in the United States. When it is desired to ascertain the rate applicable to an article which is to be transported, reference first is had to the classification to determine the class assigned to the particular article, and, thereafter, it is only necessary to find that particular class rate from and to the points between which the article is to be moved.

The incongruity of this exception in the bill, as passed by the Senate, is illustrated by the following example. Automobile tire chains are assigned third class less truckload in the classification. Assume, for example, that the third class from point A to point B is 70 cents per 100 pounds. Assume, also, that the truck line serving these points feels that the rate of 70 cents is too low on tire chains and desires to increase it to 85 cents, but is prevented from so doing because of railroad competition. The truck operator, under the proposed bill, would be estopped from conferring with the competing railroad to increase the rate. However, with the enactment of S. 110. the Motor Carrier Classification Board could confer and agree with the Railroad Classification Committee to alter the classification on chains from third to second class, and not only would the rate from A to B be increased to 85 cents, but every rate in the United States on tire chains would be increased in a corresponding manner.

Mr. Rice, for the American Trucking Associations, Inc., in Senate committee hearing on H. R. 2536-the Bulwinkle bill of the Seventyninth Congress-pages 357 to 358, in advocating agreements respecting classifications in connection with that measure, said:

Both motor carriers and rail carriers in their classifications provide description of identical commodities. Let us assume that a particular shipper wishes to transport some of his commodities by rail and others by truck. Inasmuch as the commodities are identical there is every reason in the world why the description should be the same in the rail classification and in the motor classification.

In a proceeding before the Interstate Commerce Commission in 1944, in Investigation and Suspension Docket M-2404, the chairman of the Motor Truck Classification Board explained in detail the manner in which the Motor Truck Classification was compiled in 1935. He showed that every effort was made to establish the same rating in the Motor Truck Classification as prevailed in the Railroad Classification. As a result, well over 90 percent of the entries in the Motor Truck Classification, today carry descriptions identical with the Rail Classification, furthermore the classes to which these various articles are assigned are identical. Inasmuch as the objective sought by Mr. Rice, namely, uniformity in descriptions, is more than 90 percent accomplished, it would be helpful to determine, if possible, what would occur if his proposed exception is adopted. In the same ICC proceedings the same witness, chairman of the Motor Truck Classification Board, testified that his board felt certain ratings on bulky articles in the Railroad Classification were too low. Obviously, if the agreements as suggested by Mr. Rice are authorized by this legislation, these truck-line representatives, in conference with the rail carriers, will endeavor to induce the latter to elevate those ratings the motor carriers feel are depressed. It is precisely this kind of an agreement which we most emphatically urge Congress to forbid.

There is this situation, respecting the relative costs of motortruck and rail transportation, which Congress should consider at this time. The ordinary standard 40-foot boxcar ranges in capacity from 3,000 to 3,800 cubic feet. According to witnesses who have represented the Motor Classification Board in hearings before the Interstate Commerce Commission, the average capacity of common carrier trucks on the highways today will not exceed 1,000 cubic feet. It is readily understood, therefore, that a 100-car railroad train, operated by five or six men, will have the capacity of 300 trucks, which must be operated by not less than 150 men even if every unit were a truck and trailer combined. Bare transportation costs by rail, therefore, must be substantially less than the bare transportation costs by truck. Where the total transportation costs by rail are less than by truck, we think that agreements which would result in elevating rail rates, to reflect operating costs of motor trucks, should not be tolerated. In the committee report on S. 110, the following is the only statement made bearing on the exception made with respect to freight classifications:

It is thought to be unwise to prohibit conferences between carriers of different classes looking toward similarity or uniformity in the description and classification of individual items of freight when moved by whatever class of carrier.

That is all that the committee report contained on this subject. There is, therefore, nothing to show how or why the committee arrived at this conclusion.