continuity are as essential for the manufacturer and the shipper as for the common carriers.

May I call attention to the startling fact that no adequate substitute for the present method of rate making has been offered by the Department of Justice? Unless some method of rate making substantially similar to that now in effect is retained, chaos in this important field will result.

As president of the National Association of Shippers Advisory Boards during the years of 1943 and 1944 and in carrying out my present duties, it is necessary for me to visit many of the States and meet a large number of people. During the entire period that this subject has been under public discussion, I have failed to find a single informed shipper, large or small, throughout the country, who is against the enactment of this legislation. All who are enlightened and know the facts want substantially the present system of rate making retained. I am convinced that it is distinctly in the public interest that your committee recommend to the House that S. 110 be promptly enacted into law. It cannot be too strongly emphasized that this legislation is of major importance to the shippers of the United States. It is the shippers and not the railroads that would suffer most if the Department of Justice should succeed in the destruction of present ratemaking practices.

STATEMENT OF J. E. BRYAN, CHAIRMAN, LEGISLATIVE COMMITTEE, NATIONAL INDUSTRIAL TRAFFIC LEAGUE, CHICAGO, ILL.

I

Mr. HALL. The next witness will be Mr. J. E. Bryan, chairman of the Legislative Committee for the National Industrial Traffic League. Mr. BRYAN. Mr. Chairman and gentlemen of the committee: My name is J. E. Bryan. My address is 105 West Monroe Street, Chicago, Ill. I am appearing here today for and in behalf of several organizations of shippers. As chairman of the Legislative Committee, I speak for the National Industrial Traffic League, a Nation-wide organization embracing in its membership individual shippers or industries and commercial or trade organizations representing practically every line of business and industry engaged in shipping. appear also for the Traffic Committee of the American Paper and Pulp Association, a Nation-wide organization of manufacturers of pulp and paper; the Wisconsin Manufacturers Association and for my own employers, the members of the Wisconsin Paper Mills Traffic Association. These interests endorse the principle and purpose of H. R. 221. They have individually and collectively carefully considered the purposes of this bill and its companion bill, S. 110, recently passed by the Senate, and are fully convinced that the enactment of either of these bills (with the exception of one important change in Senate bill S. 110, hereinafter explained), will be in the public interest.

NEED FOR THIS LEGISLATION

The National Industrial Traffic League, particularly, has been concerned with legislation of this character for a number of years, while the other organizations for which I speak became interested at a comparatively recent date, or to be more exact, in 1945 when there was before Congress the original so-called Bulwinkle bill, H. R. 2536. The league, in 1943, after long and serious study of bills then pending S. 942, H. R. 2712 and S. 125-all dealing with rate bureau methods and procedure, adopted the following position:

1. That it is essential to preserve the long standing general plan and procedure whereby proposed changes in rates, fares, rules, practices, classifications, and so forth, are docketed and considered in meet

ings of association of carriers with notice to the interested public and an opportunity for the public to be heard with respect thereto;

2. That it is also essential in the public interest that the fundamental principle of the Sherman Antitrust Act forbidding combinations and conspiracies in restraint of trade and commerce, as construed by the Supreme Court, shall continue to apply against concerted actions of carriers which operate to defeat or obstruct meritorious proposals or to impart or discourage the rights and privileges of industrial management of a carrier or carriers to establish, initiate, or change any rates, and so forth, regardless of committee or association action with respect thereto;

3. That existing laws, if applied according to prior decisions of the Supreme Court, fully authorize proper rate and classification committee procedure with protection of such right of independent action so that no further legislation appears to be necessary.

If the Congress shall determine that it is appropriate to enact further legislation on these matters, such legislation should clearly recognize the foregoing principles.

It will be noted from the foregoing that the League, in 1943, doubted that further legislation was necessary, feeling that existing law was sufficient to protect proper rate and classification procedure, which was established over 25 years ago and which has been improved upon during those years to its present state of efficiency.

While back in 1943 the League did not feel that further legislation was necessary, subsequent developments, including the suit brought at Lincoln, Nebr., by the Department of Justice, have caused the League, and the members of the other organizations for whom I speak, to conclude that new legislation is now desirable and that the interests of the shipper, the consumer generally, should be protected by the enactment of the proposed legislation now before you.

We do not advocate, nor does this proposed legislation provide for, either wholesale or even partial revocation of the antitrust laws. Popular opinion, and our own opinion as well, would dictate otherwise, but what this bill would do is to definitely and clearly state the intent of Congress so as to avoid conflicts which otherwise might arise between the national transportation policy established by Congress and contained in the Interstate Commerce Act on the one hand, and the antitrust laws as interpreted and policed by the Department of Justice on the other hand.

The railroads are regulated-as a matter of fact, thoroughly and strictly regulated by the Interstate Commerce Commission, an agency of Congress reporting directly to Congress. While not infallible, we believe it is generally agreed that the Commission has done a pretty good job in carrying out its functions and duties as prescribed by Congress. We do not believe that the Interstate Commerce Commission, intentionally or otherwise, would permit the railroads or any of their committees to perform any acts or to neglect the performance of any acts, the commission or omission of which would run counter to the antitrust laws. However, some seem to think otherwise; hence, the need for the type of legislation here proposed.

Exemptions from the application of the antitrust laws is not at all new. For an illustration, may I point to the Transportation Act of 1920 in which it was provided that approval by the Interstate Com

merce Commission of transactions and agreements by the carriers involving pooling, mergers, and consolidations, removed such transactions and agreements from the application of the antitrust laws. By that provision, there was placed under the jurisdiction of the Interstate Commerce Commission matters of extreme importance to the public, yet there have been no pooling, mergers, or consolidations authorized by the Commission which have not been in the public interest. If the Commission may be trusted to supervise and approve matters of such great importance as these, all of which could readily adversely affect transportation costs if the authority of the Commission was improperly applied, it would seem that Congress should have no hesitancy in entrusting to the Commission the policing, through approval or disapproval, of rate and classification committee procedure as indicated in this proposed measure and that is particularly so when the purpose and result of the proposed legislation will be to remove doubt and uncertainty that has been created by over enthusiastic and energetic employees of certain governmental agencies.

Under the present procedure for rate making and classification, representatives of groups of carriers in prescribed territories meet as committees to consider proposed adjustments in rates, rules and regulations affecting the transportation of goods and which proposals have been publicly docketed giving notice to all shippers of exactly what is proposed whether it be a request by either a shipper or a carrier involving either reductions or increases or other changes favoring either carrier or shipper. All concerned with transportation and costs are thus informed and may appear at public hearings before these carrier committees to protect their interest in a particular adjustment. They are afforded an opportunity to express their views along with those of the carrier representatives and should final action be opposed to any individual's interest, that individual has the right to appeal to the Interstate Commerce Commission in formal proceedings before that body. No other business transactions in the United States are thus safeguarded against monopolistic practice or transactions contrary to the antitrust laws. This procedure for rate making has been in vogue for upwards of 25 years without complaint from the public, which fact alone speaks favorably for the adequacy of the present procedures and laws.

It has been told to me that a certain gentleman remarked that there are probably 10,000,000 shippers in the country who might be advised of the rate proposals pending before carrier committees but that the other 130,000,000 people of the United States, representing the consumers, had no protection and no way of being advised with respect to proposed rate changes. In answer to that, I would like to say that. in my opinion, there are a great many more than 10,000,000 shippers as referred to by the gentlemen in question and that all of them are the watch dogs for all of the consumers of materials and transportation. Those ten or more million shippers are informed of what is going on in freight rate circles and they are before these committees and before the Interstate Commerce Commission to prevent unjust, unreasonable, discriminatory, and prejudicial rates, rules, and regulations from becoming effective. Likewise, they are before these committees and before the Commission to obtain just, reasonable, nondiscriminatory, and nonprejudicial rates, rules and regulations which when adopted with the approval of the Interstate Commerce Commission give pro

tection to the 130,000,000 consumers. Without these shipper representatives and without the transportation committees to act with respect to proposed adjustments, utter chaos would reign throughout the country so far as transportation costs are concerned. Under the law, a rate change must be published in tariff form 30 days prior to its effectiveness. However, under special circumstances, the Commission may authorize a lesser period of time before the change is made effective. Under present practices we have two chances to protect ourselves against injustices: (1) Before carrier committees, and (2) before the Interstate Commerce Commission.

Prior to the enactment of the original Interstate Commerce Act in 1887, many freight rates were made and put into effect without the knowledge of anyone except those to whom such rates applied. They were hidden in various ways from the public and it was because of that type of rate making and rebating that the act to regulate commerce was passed With the elimination of carrier committees, we will go back to almost the same conditions that existed prior to 1887 and surely back to the very undesirable methods employed for a number of years after the enactment of that law. Under present procedures representatives of both carriers and shippers may sit together informally and publicly, to confer and agree upon matters of mutual interest.

Without advance notice to the public of proposed changes, it will be possible, through the use of the power of tonnage or other patronage, to obtain a rate adjustment on a given commodity between specified points that will not be known to the public until it is published in tariff form 30 days or less prior to its effective date. This means that those who may be injured by the publication of such a rate, must appeal to the Interstate Commerce Commission for a suspension with the attendant delays and costs and uncertainty. It can be readily visualized that such procedures would run into the thousands, that the Interstate Commerce Commission and the State railroad and public utility commissions will be so completely overburdened as to make it utterly impossible to do justice in any given case. enactment of the bill before you would prevent such probabilities. There is nothing in the present procedures that precludes an individual carrier from taking action in any matter involving the adjustment of rates, rules, classification, etc., independent of action taken by a committee, and neither bill H. R. 221 nor Senate bill S. 110, suggests any change in that regard.

The

What these bills propose to do is to give legislative sanction to certain agreements between carriers to work together on matters of mutual interest, provided such agreements first are approved by the Interstate Commerce Commission, in which event procedure pursuant thereto will be removed from the operation of the antitrust laws. I have previously mentioned certain language in S. 110 as passed by the Senate which we believe should be corrected and had reference to subsection (4) of section 5a reading, in part, as follows:

(4) 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 matters relating to freight classifications or to transportation under joint rates or over joint routes, etc.

The comparable provision in H. R. 221 will be found in subsection (3) and does not include the words "freight classifications." This

omission from H. R. 221 is preferable and the Senate bill should be changed by the elimination of the words: "freight classifications or to" making it read in part: "limited to matters relating to transportation under joint rates and over joint routes," etc.

The language used in subsection (4) of the Senate bill seems to separate matters relating to freight classifications from the intent to confine agreements between carriers of different classes to transportation under joint rates and routes. An interpretation of subsection (4) as it now reads would permit carriers of different classes to agree upon classifications for general application via any mode of transportation, including single line movements. Such interpretation if applied would serve to nullify competition as between different types of carriers and that would not be in the public interest. Subsection (4) of section 5a, as passed by the Senate, should be corrected as here suggested.

Subsection 11, of the Senate bill, S. 110, puts into the act the socalled Russell amendment, not to deprive the Supreme Court jurisdiction to hear and to determine, the Georgia case.

Mr. HALL. Have you finished your statement?

Mr. BRYAN. Not quite.

Mr. HALL. I beg your pardon.

Proceed.

Mr. BRYAN. We feel that that amendment to the original S. 110 as set forth in subsection 11, is unnecessary, and while I am not familiar with the issues of the Georgia case-I am not a lawyer-it does seem to me that it completely nulifies the proposed law before it has been enacted, and the shipper's interest in that case is lost.

What we are interested in is preservation of the committee method of making rates, rules and regulations, and this amendment, subsection 11, if carried into the bill will, in our opinion, nulify that part of the bill which we are so deeply interested in.

The amendment, in our opinion, should be striken.

Mr. HALL. Thank you.

Mr. O'HARA. Mr. Chairman.

Mr. HALL. Mr. O'Hara.

Mr. O'HARA. Just what difference would it make to shippers in the future as to what the decision is in that case?

Do you think people ought to be bailed out of law suits after prosecutions are brought?

Mr. BRYAN. I did not get the last part of your question.

Mr. O'HARA. I say, do you think people ought to be bailed out of law suits by legislation? I am speaking now of the railroad cases. Mr. BRYAN. No, I do not; nor do I believe they ought to be put under a law suit or penalized before the case is decided. That is what in effect

Mr. O'HARA (interposing). Where is there anything of that kind? The questions in that law suit, I presume, involve issues of questions of violations of the antitrust laws-that is, the Georgia case, and Lincoln suits.

Now, just why should we pass suit to bail somebody out of it? have anything to worry about. thing.

legislation in the middle of that law If they are not guilty they do not If they are guilty that is another

Mr. BRYAN. That, of course, is the railroads' case. It is the railroads' job to prove whether they are guilty or not guilty.