feiture provisions relate only to the failure or refusal to make reports, keep records, and the like. There would also be increases in the amounts of the forfeitures prescribed. The purpose of these two sections of H.R. 11584 is to aid in the elimination of unlawful highway operations (the so-called gray area of trucking) through strengthening the enforcement machinery and reinforcing the regulatory statutes. The railroads solidly endorse and support these two proposals. OTHER SECTIONS OF H.R. 11584 Railroads Sections 7 and 8 of H.R. 11584 would extend to air carriers liability for the payment of reparations to shippers charged unlawfully high rates. and water carriers already have statutory liability for reparations where unlawful rates have been charged. A separate bill (H.R. 5596) now pending before this committee would subject motor carriers and freight forwarders to similar liability. Consistent with our adherence to the principle of equality of regulation for all modes of transportation, we support this proposal. Section 9 of the bill is designed to implement a recommendation of the President that such legislation as is necessary be enacted encouraging experimental rates and services for Government transportation and encouraging, also, in connection with Government transportation, the development of systems that will make rate ascertainment and publication less costly and more convenient. The transportation message stated that "these experiments will be pilot studies for a more general simplification of rates and for the application of new kinds of service to transportation in general." The railroads endorse these objectives of H.R. 11584. The final sections of the bill would transfer to the Department of Commerce the railroad loan guarantee authority of the Interstate Commerce Commission and the aviation loan guarantee authority of the Civil Aeronautics Board. There is merit to this proposal and since, as the transportation message points out, "these problems are not regulatory in nature and are clearly separable from the chief functions of the Interstate Commerce Commission and the Civil Aeronauties Board," we endorse it. CONCLUSION Shippers, as well as the railroads, have been heartened by the President's transportation message and by the recommendations it contains, and their support for the message and its recommendations is wholehearted and enthusiastic. This reaction is echoed by the response of the general public and the nearunanimous endorsement of the Nation's press, which have hailed the recommendations as a long-overdue action in the public welfare. H.R. 11583 and H.R. 11584 embody some very important features of the program of recommended legislative actions and are so drafted, in general, as to implement in appropriate fashion the proposals to which they are directed. The railroads therefore support these two bills and urge this committee's favorable consideration of them at the earliest practicable time. The central theme of the transportation message is that a sound transportation policy can best be achieved by placing greater reliance on competition than on regulation, and by equalizing opportunities for all forms of transportation. To the extent that these objectives are reflected in the two bills this committee is now considering, the focal point is the minimum rate proposal contained in H.R. 11583. It is of vital importance to the railroads that the Congress accept and adopt this proposal that there be extended to all carriers the exemption from minimum rate regulation now, and for many years past, enjoyed by motor carriers in the transportation of agricultural commodities and by water carriers in the transportation of bulk commodities. This Nation cannot enjoy a healthy economic body if the right arm is withered and bound up. The railroads are the right arm of a prosperous economy, and they must be freed of the long outmoded restrictions that bind them if America is to realize its fullest economic potential. Railroads are hard pressed and steadily losing ground in the competitive struggle for traffic. In this competition the scales are weighted against them, for they are subject to comprehensive and rigid rate regulation on substantially all of their traffic while two-thirds of intercity highway ton-miles and nine-tenths of inland waterway tonnage move wholly free of any Interstate Commerce Commission rate regulation-largely in consequence of the agricultural and bulk commodity exemptions. A measure of the railroads' handicap in this regard finds expression, as I have pointed out, in the fact that some 70 percent of railroad tonnage consists of these self-same agricultural and bulk commodities, and some 45 percent of the railroads' gross freight revenues is derived from them. Volume traffic is essential to low-cost transportation. As cost is a key factor in obtaining volume, the railroads seek to translate improved efficiency through technological progress into lower costs and rates. Unless the regulatory drags under which the railroads are required to operate are removed, new-found efficiencies cannot produce their potential benefits for the national economy. It is proposed, in H.R. 11583, to take a step in the direction of equality of competitive opportunity to participate in the transportation of this traffic, and to do so by way of diminished regulation. Regulatory control of the levels of minimum rates for the rail transportation of agricultural and bulk commodities would be eliminated. This step would constitute only partial equality, for it is not proposed to grant to the railroads the complete regulatory exemptions available to highway and waterway operators. Except for the elimination of minimum rate controls the Interstate Commerce Commission's authority and power over rates for the rail movement of agricultural and bulk traffic would be preserved and remain undiminished. The Commission's control over maximum rail rate levels, for example, would be left intact, as would its control over discriminatory rail rate practices. But decontrol of minimum rates would remove the most formidable obstacle faced by the railroads in their competition for agricultural and bulk traffic. Further, it would do so without rendering the railroads' competitors helpless, as is sometimes contended. Reduced rail rates on this traffic would still have to be published and observed, without change except upon statutory notice; and applicable provisions of the antitrust laws would be interposed as protection against the threat of predatory practices. In summary, enactment of the minimum rate legislation would afford greater equality of opportunity among carriers through the removal of artificial and inequitable regulatory restraints, encourage vigorous, but fair, competition for traffic, and thus benefit users and the public through lower rates for transportation services more nearly reflecting the true economic capabilities of the carriers. The transportation system which a strong America must have can be provided if Congress will act favorably on the recommendations contained in the President's transportation message. We urge such action at this session of Congress in order to help bring about the sound and healthy transportation system so essential to our economy and defense. APPENDIX A Tons originated and gross freight revenue, class I railroads, year 1960 1 See following tables for lists of agricultural and bulk commodities. Source: Interstate Commerce Commission, Freight Commodity Statistics. Class I Railroads in the United States. No. Tons originated and gross freight revenue-Class I railroads, year 1960 Agricultural commodities Tons origi- Gross freight revenue Gross freight revenue $264, 231, 809 105, 630, 529 57,818,874 17,666, 836 48, 065, 943 11, 492, 119 1,045, 127 35, 499, 194 36, 620, 902 1,555, 817 1,034, 403, 703 67, 207, 999 226, 904, 321 26,418, 840 4,977, 718 3,256, 264 12, 112, 105 35,650, 522 7,323, 705 76, 219, 355 36, 464, 576 71, 020, 811 84,537, 520 32, 484, 241 4,461, 610 1,295, 918 9,283, 233 25,777, 709 35, 594, 371 47,828, 344 3,203, 289 13,092, 373 7,530, 631 28,573, 797 7, 279, 497 35,384, 271 2,981, 201 37,042, 468 9,643, 923 126,003, 845 8,753, 465 140,883, 873 2,833, 756 1,434, 144 980, 088 13, 436, 138 24, 272, 922 87,389,855 15, 106, 001 150, 961, 710 94,602, 084 9, 238, 361 55, 450, 188 10, 541, 130 835, 737.545 1,240, 788, 692 67.4 3,264,829, 031 8, 401, 685, 733 38.9 APPENDIX B CLARIFYING AMENDMENTS-H.R. 11583 1. Page 1, line 7. Insert the word "interstate" before the word "transportation." The purpose of this amendment is to make certain that the Interstate Commerce Commission will retain authority under section 13(4) to remove unjust discrimination against, or undue burden on, interstate commerce by prescription of the minimum level of intrastate rates. This would be consistent, it appears, with the intended purpose of the bill. During the course of testimony presented before this committee on June 26, 1962, by the Under Secretary of Commerce for Transportation the following colloquy took place: "The CHAIRMAN. Now, then, finally I would like to inquire that with reference to H.R. 11583, where your reference is made to carriers of rates, fares, and charges for transportation of agricultural and bulk commodities—if it is not intended by the bill that the ICC be deprived of its authority to remove unjust discrimination against interstate commerce by prescription of a minimum level of intrastate rates. Now, that question was raised by another member a little while ago. "Mr. MARTIN. No, sir; I don't think so. "The CHAIRMAN. You do not think that that is intended by this provision. "Mr. MARTIN. No, sir." (Tr., p. 96.) 2. Page 2, line 25, and page 3, lines 1 and 2, substitute for the words "The Commission shall have no authority or power to determine that such a rate, fare, or charge is lower than a reasonable minimum" the following "Neither the Commission nor the courts shall have authority or power to determine that such a rate, fare, or charge is unlawful under this Act on the ground that it is lower than a just and reasonable minimum." The purposes are these: (a) Section 1(5) of the Interstate Commerce Act provides that every unjust and unreasonable charge is prohibited and declared to be unlawful. Section 9 of the act provides that any person claiming to be damaged by violation of substantive provisions of the act shall have the right to make complaint to the Commission or to bring suit in designated courts. It might conceivably be argued that the bill deprives the Commission of jurisdiction to determine that a reduced rate violates section 1(5), but that damages could still be sought in court for a violation of section 1(5); (b) insertion of the words “just and" before the word “reasonable" constitutes a technical change to conform the wording in the bill with that in section 1 (4) and (5) of the act, where the reference is to "just and reasonable" rates, fares, and charges. 3. Page 3, line 3, insert the following sentence after the word "charge": "When used in this paragraph, the terms 'rates, fares, or charges' shall include all classifications, regulations, and practices relating thereto." The purpose of this proposed amendment is to make certain that reductions effected by changes in classifications, regulations, and practices will be covered by the limitation on ICC authority effected by the bill. For example, a reduction on freight charges on a particular commodity might be accomplished by a change in classification rating or by creating an exception therefrom. The proposed amendment is consistent with section 15a (1) of the Interstate Commerce Act, which provides: "When used in this section the term 'rates' means rates, fares, and charges, and all classifications, regulations, and practices relating thereto." An alternative form of amendment would add the following language after the word "change" on line 3: "and this limitation shall include any reduced rate, fare, or charge effected by changes in classifications, regulations, and practices relating thereto." When the Secretary of Commerce appeared before this committee on June 26, 1962, he was asked by the chairman: "The minimum rate provision contained in this bill, H.R. 11583, speaks, then, only of rates, fares, and charges, and makes no reference to classification, regulations, and practices, relating to such rates, fares, or charges. Is it intended by this bill to cover in these minimum rate provisions reductions in freight charges that might be accomplished through changes in classification of rates? "Secretary HODGES. I would have no objection to having those put in, Mr. Harris. "The CHAIRMAN. Well, just wondered what is the intention-had that point been thought of in connection with your consideration of this matter. And what is the intention? "Secretary HODGES. Those items are a little more technical. We probably should have included them in the draft. But we are trying to cover the major phases. But if your committee "The CHAIRMAN. Well, would they be reached by the language that you have in the bill? "Secretary HODGES. Probably not. They probably ought to be included" (Tr. p. 68). The CHAIRMAN. Any questions, Mr. Williams? Mr. WILLIAMS. I think congratulations should be in order to Mr. Loomis for the comprehensive and clear presentation of the railroads' position with respect to this legislation now under consideration. Mr. LOOMIS. Thank you, sir. Mr. WILLIAMS. His statement answered most of the questions that I had in mind. However, I do have one. That is with respect to the suggestion that you made on page 28 to the effect that the mixing rule and the three-commodity rule be retained for water carriers. Now, if these are retained, that would not make for exact equality in the shipment of bulk and agricultural commodities, would it? |