within the law. And that is the reason that I had in mind. If it is such a good system that you have in mind, I want to know why these things exist.

Mr. MURPHY. I don't recall the particular case, but today under the fourth section provisions we do grant lower rates for longer hauls that are involved than in an immediate haul.

The CHAIRMAN. This is not a longer haul, this is approximately the same distance, and it is going to the same destination, originating in the same area, within 40 miles.

Mr. MURPHY. I am not familiar with what transpired on that. I will look into it. But you do have actual water competition, the statement you made, from Greenville to New Orleans is a water-towater movement.

The CHAIRMAN. And that is what I had in mind, Mr. Chairman, when I said earlier today that I do not believe the Commission is attacking the problems that exist today, I think you are trying to extend the philosophy of the problems that existed 75 years ago.

Mr. MURPHY. Some of the problems you would have today existed then, and I think would exist again today.

The CHAIRMAN. We are trying to meet them with the same vehicle. Mr. MURPHY. I don't understand, Mr. Chairman-if this legislation right here was enacted I don't think it would correct that situation, unless the carriers themselves wanted to correct it.

The CHAIRMAN. I think that is probably true. But you have a certain degree of competition which the carriers themselves indicate that they have got to consider in the whole area under the threat that certain people would take the business away from them. I think if you are going to have regulation that would permit certain ones to require certain things of a carrier, then you ought to give them freedom to operate.

I will show you the file on it, Mr. Chairman, sometime, so you can be in a better position to comment.

Mr. MURPHY. If the carrier from the inland point wants to meet what the competitor is doing as to actual water competition, he is perfectly at liberty to file his rate. I don't know whether the case you are talking about is a normal complaint by a shipper or receiver or whether it is the result of an I and S proceeding where they have attempted to publish such rates. But I will certainly look at it.

The CHAIRMAN. I am not trying to develop-I am sorry to take your time, Mr. Williams-I am not trying to develop any criticism at all, I am just telling you of a situation that exists. And if it exists in this case it exists in many, many places throughout the country. And that is the reason, I think, we have got to develop some kind of approach to meet them. How, I don't know. And that is what I am raising.

Mr. HEMPHILL. Would you yield, Mr. Williams?

Mr. WILLIAMS. Surely.

Mr. HEMPHILL. Getting back to Mississippi, suppose you had this legislation, and under the hypothetical case Mr. Williams gave you, the railroad did charge an exorbitant rate from Memphis to Jackson. Where is the truckline going to be? Can't the truckline come in there and compete under the free enterprise system if you have no minimum rate?

91497-62- -12

Mr. MURPHY. Yes, sir, he is at liberty to compete and is competing today.

Mr. HEMPHILL. If you had the situation outlined by Mr. Williams, the trucking line would have the right to make a rate too, wouldn't he? Mr. MURPHY. Yes, sir.

Mr. HEMPHILL. So therefore there is a potential of an adjustment there between the competing modes of transportation as well as the intrarates between the Illinois Central Railroad from Memphis to Jackson and Memphis to Vicksburg?

Mr. MURPHY. Then, as I see it, you would be pitting one mode of transportation against the other to do just what I have mentioned, and that is to inaugurate some cutthroat competition to drive them down below a reasonable level.

Mr. HEMPHILL. Aren't you doing that today

Mr. MURPHY. No, I do not think so.

Mr. HEMPHILL. When you say that on the Mississippi River, because there are bargelines which have an exemption today-isn't that right, to a certain extent?

Mr. MURPHY. Yes, sir.

Mr. HEMPHILL. There are bargelines on the Mississippi River that have an exemption, and therefore any time a fellow happened to be able to ship down the river he gets cheaper rates than another shipper shipping the same distance by identical modes of transportation for identical purpose, so there is discrimination now, isn't there?

Mr. MURPHY. No, sir-there is some, but not there-I think the way to remedy the situation you describe is to bring it under, as we sug gested that the alternate recommendation of the President be adopted.

Mr. HEMPHILL. And then the public suffers, doesn't it?

Mr. MURPHY. No, sir.

Mr. HEMPHILL. Because the rate structure has then been made to keep in business the modes of transportation rather than to serve the public, that is what I am fearful of. That worries me a great deal. Thank you, Mr. Williams.

Mr. WILLIAMS. Mr. Chairman, I hope the ICC won't take too close a look at that case of Mr. Harris, because as I understand the State of Mississippi came out on top in that.

But seriously speaking, most of the points that I had planned to develop, I think, have been determined by the questioning of Mr. Harris and Mr. Hemphill.

Permit me to ask this further question. You indicated in your answer to my initial question that regardless of whether this legislation could pass or not, the Commission would still have the authority to concern itself with discriminatory rates as between the cities of Jackson and Memphis and the cities of Vicksburg and Memphis, which is the hypothetical case I brought up. Is that correct?

Mr. MURPHY. Yes, sir; that is true.

Mr. WILLIAMS. Not on exempted commodities?
Mr. MURPHY. No. I misunderstood your question.
Mr. WILLIAMS. That is all.

The CHAIRMAN. Mr. Dominick.

Mr. DOMINICK. Thank you, Mr. Chairman.

I am sorry that I didn't get through all of your testimony. But I have scanned a good deal of it. And on page 21, in the third paragraph, I rather gather that what the Commission is saying is that if you exempt the bulk commodities from regulation, that you might as well wind up the ICC, that you really don't have very much else to do.

Is this correct?

Mr. MURPHY. In the statement we point out that 60 to 70 percent of the rail traffic will be exempt under the provision and 90 percent of the water carriers, and I believe 65 percent of the highway transportation.

We say in the paragraph to which you make reference that, in our opinion, we question whether it would be possible to continue effectively ICC rate regulation of any substantial amount of interstate commerce by any mode of carriage. We do not make the statement that we suggest that it be abolished, or a change of that type. Mr. DOMINICK. Let me ask just a couple of questions. I don't think any of us here on the committee are interested in wiping out the trucking industry. And I have gotten a lot of letters, as I presume everybody else has, saying that if this bill is passed this would happen. În getting at, however, the alternative proposal which you suggest, it might be helpful if you could tell us how long it takes following an application to determine whether a minimum rate is or is not a reasonable rate, reasonably compensatory.

Mr. MURPHY. That will depend on the type proceedings and the scope of the proceedings as to how long it will take. Now, we have under your present provisions in I. & S. proceedings, that is, where a rate is published, if for any reason there appears a possibility that it is violating the law, we have 7 months to determine the lawfulness of the suspended rate. If we have not determined it within that time, unless the proponent agrees to postpone for an additional period of time, or indefinitely, that is, until the matter is determined, his rate can automatically go in effect at the expiration of 7 months.

The greater proportion of our I. & S. proceedings-and I think it exceeds the bulk in numbers-is determined within the 7-month period. Mr. DOMINICK. How many additional applications do you feel that you would have if you eliminated the existing exemptions on bulk commodities?

Mr. MURPHY. You mean in proposed rate changes?

Mr. DOMINICK. No. At the present time, as I understand it, the truckers and the bargelines in many cases have exemptions for bulk transportation of certain commodities. And the railroads do not have this. And therefore, in many cases they cannot be competitive. Now, suppose we have the truckers and the bargelines within this same minimum rate regulation, how many additional proceedings would you have to determine whether or not these rates that they are filing with you are compensatory?

Mr. MURPHY. I am trying to understand your question, Mr. Domi

nick.

Mr. DOMINICK. I am trying to see how much more work it would put on you, that is all.

Mr. MURPHY. I think perhaps to begin with there would be quite an increase in the number of rates that would be published. But I

think it would level itself out. And I doubt seriously in the long run if it would add substantially to the volume of work.

Mr. DOMINICK. Isn't it probable that wherever a trucking line or a bargeline proposes a minimum bulk rate which is lower than a rail rate between the same points, that the railroad naturally is going to say that the other rate is not compensatory, and force a hearing?

Mr. MURPHY. When these type rates are filed, and there is a protest made, we do have cost information available to us, and the suspension board has it available to them in passing on the rate.

Mr. DOMINICK. How many proceedings do you estimate that this

would involve?

Mr. MURPHY. I couldn't give you an estimate on it. It would be strictly a guess.

Mr. DOMINICK. It would be a large number, would it not?

Mr. MURPHY. Yes, there would be a substantial increase in it.

Mr. DOMINICK. And about how long do you think it might take to process these new proceedings?

Mr. MURPHY. Well, you would not have to process all of them, that is, through a formal hearing. Many of them would be, I am sure, not suspended. In other words, merely because you have a protest lodged against a rate does not mean that it will be suspended-you would, I am sure, have some that would be suspended and have to hold formal hearings on them. Some that are suspended would be withdrawn. Mr. DOMINICK. How long does it take to determine that they should not be suspended?

Mr. MURPHY. Well, we have from the date of the filing of the publication and the receipt of the protest less than 30 days. There are very few of them, taken by numbers, that are published much more than a 30-day notice which is a statutory requirement.

The CHAIRMAN. Pardon me, Mr. Chairman. I don't understand what rates you are discussing, what type of rates.

Mr. DOMINICK. I was discussing the additional work and time. which might be put on the Commission in the event the alternative proposals were accepted, namely, the elimination of existing bulk exemptions.

The CHAIRMAN. Thank you.

Mr. DOMINICK. How much additional staff would you need to handle this?

Mr. MURPHY. I don't think it would require but very little additional staff. And that is my offhand opinion here. I just don't see it as developing into anything very great.

Mr. DOMINICK. I am somewhat concerned over bringing the trucks and the barge carriers under more regulation. In many instances the time, and the delay that might be created under this type of regulation, would be stifling.

Mr. MURPHY. I say again, I don't think it is going to require any substantial increase

Mr. DOMINICK. The Commission did not make an analysis of this in preparing your recommendations, then?

Mr. MURPHY. Make an analysis of which?

Mr. DOMINICK. The amount of proceedings that might be encompassed if your recommendations were accepted. Mr. MURPHY. No, sir; we did not.

I might mention to you that as I understand the water carriers are very strongly in favor of the repeal of the exemption on the bulk commodity clause which we have previously testified on. That is beside the question. I just couldn't give you a figure other than saying that my own opinion is that it would not be a substantial increase in volume of work or in personnel requirements.

Mr. DOMINICK. That is all I have, Mr. Chairman.

The CHAIRMAN. Mr. Jarman, do you have some more questions? Mr. JARMAN. No; those questions were asked by Mr. Sraggers.

The CHAIRMAN. Mr. Chairman, I think you have made it very clear that the bulk commodities, agricultural and fishery products, passengers-bulk commodities primarily, agricultural and fishery products-insofar as railroad transportation is concerned, are regulated. Mr. MURPHY. Yes, sir.

The CHAIRMAN. And as far as water carriers are concerned, they are not regulated, is that true?

Mr. MURPHY. Except under certain conditions where they haul more than three bulk commodities in the same tow. But generally speaking, that is true, they are not regulated rates.

The CHAIRMAN. But insofar as the motor carriers are concerned, some are regulated and some are not?

Mr. MURPHY. On the exempt commodities, Mr. Chairman, the motor carrier is exempt as to the economic regulation, but is subject to the safety rules and regulations and hours of service of employees.

The CHAIRMAN. Are the motor carriers exempted from hauling such products as bulk fuel oil?

Mr. MURPHY. No, sir.

The CHAIRMAN. Isn't that considered a bulk commodity?

Mr. MURPHY. Yes. But they are not a water carrier, and the water carriers are the ones that are exempt-the bulk commodities-I am not trying to be facetious, Mr. Chairman, but the Motor Carrier Act does not exempt the bulk commodity as such; you do have exemptions on agricultural and fishery products.

The CHAIRMAN. In other words, the motor carriers are, generally speaking, exempted from agricultural products, and so forth, but they are not exempted from bulk products as such?

Mr. MURPHY. That is true. For example, your petroleum haulers or your liquid haulers are 100 percent regulated today.

The CHAIRMAN. Now, the big difficulty of the exempt carriers is that those carriers getting into business has its effect on the regulated carriers?

Mr. MURPHY. Yes, sir. That is something that the Commission. has been concerned about for a number of years.

The CHAIRMAN. Now, if all carriers that is, the exempt carriers now if your recommendation that Mr. Dominick asked about would be adopted, and there would be a repeal of the exempt provisions, could you say that there would be very likely a general increase in rates to the consumer?

Mr. MURPHY. No, sir; I could not say that I would expect that. The CHAIRMAN. Do you think the common carrier would provide the rate under regulation in certain hauls that is now, for example, being given by exempted carriers?