life. The national industrial scene is not as bright as had been hoped a few months ago. The production index has risen more slowly this year than predicted, and some economists are even predicting a serious recession in the foreseeable future. We continue to be plagued by a deficit on our balance of payments, and unemployment remains a serious problem.

Passage of this legislation could provide a crucial shot in the arm for the Nation's railroads, and the hundreds of thousands of American workers they employ. It would also be of great benefit in aiding the coal industry to meet foreign residual oil and dumped gas on a more competitive basis, with consequent stimulation of more employment in the coal-producing areas of America.

Thus, in the interest both of national security and to bolster the current economic state of the Nation, we urge the Congress to approve H.R. 11583 at this session. To delay action and pass this matter over to the next Congress could have a most costly and unwelcome consequence.

Mr. Chairman, I personally find it a matter of great satisfaction that these two great American industries recognize so clearly the interrelationships each has in the other. For many years, coal operators and the railroads have fought each other over rates, and neither profited. Now, the representatives of these two great industries have joined together to seek mutually the solutions to the problems that beleaguer them. Today, as members of the National Coal Policy Conference, they sit together around the table, rather than across the table, and amicably discuss their problems and resolve their differences in the national interest.

I am honored that I, as president of NCPC, can appear before you today and plead on behalf of both coal and the railroads for your approval, and for passage by the Congress of H.R. 11583, which will mean so much to both.

Mr. JARMAN. Our next witness is Mr. Richard M. Boyd, on behalf of the National Industrial Traffic League.

STATEMENT OF RICHARD M. BOYD, NATIONAL INDUSTRIAL TRAFFIC LEAGUE

Mr. BOYD. Mr. Chairman, gentlemen, my name is Richard M. Boyd. I am director of traffic and transportation, Pittsburgh Plate Glass Co. Today I appear in my capacity as president of the National Industrial Traffic League, of which my company is a member and in which I have been active for many years.

The National Industrial Traffic League is a nationwide organization of shippers; its membership also includes chambers of commerce, boards of trade, and similar commercial organizations whose members likewise have a substantial interest in transportation matters. The league's more than 1,600 members include companies of all sizesvery large corporations and many small business concerns.

The league has no carriers in its membership. It represents and expresses the interest of those who actually ship and receive freight, the payers of transportation charges. Its membership is drawn from all parts of the United States and includes practically every line of industrial and commercial activity. Members make use of all forms of transportation by rail, motor, water, air, and pipeline. The league is not railroad minded, truck minded, or waterway minded, or slanted in any way other than to foster sound economic transportation.

In the more than 50 years of its existence, the league has endeavored to carry out the purpose for which it was organized. That purpose is succinctly stated in the preamble to the league's constitution as fol

lows:

Believing the requirements of commerce are best served by a thorough understanding upon the part of carriers and the shipping public of each other's needs, this organization stands for and will undertake, through conference, publicity, and other proper means, to promote such knowledge of transporta

tion affairs as will aid in effecting such result; to assist in the enactment of clearly defined laws covering the traffic subject to congressional enactment and the interchange of views regarding intrastate legislation which does or may affect such traffic; to define clearly and make certain the relation of the public to the carriers; and to acquaint regularly established State and National tribunals with the needs of the shipping interests and the effect on commerce of rulings, decisions, and practices within the jurisdiction of such tribunals.

The object of the league is to promote adequate national transportation. The league strives to obtain legislation that will be helpful to commerce and to secure the modification of laws, rulings, and regulations that may be found harmful. To that end the league has appeared before this committee on many occasions and appreciates this opportunity to present its views with respect to H.R. 11583, a bill to exempt certain carriers from minimum rate regulation in the transportation of bulk commodities, agricultural and fishery products, and passengers, and for other purposes.

This statement is directed solely to H.R. 11583-there will be a separate statement relating to H.R. 11584-identified as the Transportation Act of 1962.

In carrying out objectives of the league, its membership at annual and special meetings has adopted policies governing practically all phases of transportation and practices of carriers operating in the field. In keeping with the changing transportation picture, many of these policies have been changed or redrafted on various occasions as changes in the law or circumstances may have dictated.

With respect to the inherent advantages of each mode of transportation, the league has adopted the following policy:

Preserving inherent advantages of each mode of transportation: The inherent advantages of each mode of transportaiton must be preserved so that shippers may have available whatever mode of transportation is best adapted to their particular needs. It is against the best interests of the public and the broad interests of the carriers to allow the Interstate Commerce Commission to allocate traffic among the different modes of transportation, or to direct the channels of traffic which shippers should use.

The league has long advocated greater responsibility and freedom of carrier management as evidenced by the following statement of policy:

Responsibility and freedom of carrier management: There should be the greatest degree of responsibility upon and freedom of carrier management in providing the public with the transportation service which it needs. Regulation should be limited to that reasonably necessary in the public interest and should not encroach upon the proper sphere of managerial discretion and responsibility either in the field of traffic or actual physical operation.

The league supported the change in the ratemaking rule as embodied in section 15 (a) by the Transportation Act of 1958 and endeavoring to support the public interest under that rule, the league has participated in various proceedings before the Interstate Commerce Commission and in the courts urging that the shipping public should benefit from fair competition and that no group of carriers should be prevented from reducing its rates to a lower but profitable level simply because such reductions would adversely affect other

carriers.

In instances where it has appeared that the Interstate Commerce Commission has improperly interpreted the change made by the Transportation Act of 1958, the league has intervened in the courts in an effort to set aside Commission orders. Prominent among such

interventions have been civil action No. 61 C 380 in the Federal district court in St. Louis involving reduced rates published by western railroads on agricultural implements and roadmaking equipment, and the so-called New Haven case involving an Interstate Commerce Commission requirement of a rate differential to protect the water carriers. In both of these cases, the league contended that the Commission was engaging in "umbrella ratemaking" and that to hold up the rates of one carrier to a certain level in order to protect traffic of another carrier was a violation of the Transportation Act of 1958. Both district courts agreed with this contention and the cases are now subject to review by the Supreme Court of the United States. While the league has advocated greater freedom for carrier management in establishing rates in order to meet competition, the membership, prior to introduction of the regulatory concept embodied in H.R. 11583 had no policy with respect to the exemption from regulation contemplated by this legislation.

Because the proposals embodied in H.R. 11583 are of paramount interest to shippers as well as carriers and most likely to be controversial, league officers polled the league membership in order to have an accurate picture of whether the Nation's shippers favor the exemption of certain carriers from minimum rate regulation in the transportation of bulk commodities, agricultural and fishery products, and passengers.

In accordance with the policies proviously cited, league members were asked to indicate whether they favored or did not favor the authorization of league support of the basic object of H.R. 11583 provided the orderly rate procedures under section 5(a) are fully preserved.

An overwhelming majority of the league membership voted to support the basic object of H.R. 11583-a minority opposed such support for various reasons prominent among which are concern with the possible effect on the price structure for certain commodities and the fact that in some instances commodities in bulk would be exempt from minimum rate prescription while the same commodities when packaged would be subject to minimum rate control by the Commission.

At this juncture I should point out that election to membership in the league does not abridge the right of individual action by any member even though such action may be contrary to the league's position on any given question.

The position of the league membership with respect to the basic object of H.R. 11583 is clear. A majority of league membership supports the idea of greater freedom and responsibility of carrier management with more discretion in establishing and maintaining rates under which traffic will move freely and produce revenues necessary to adequate service.

The league membership in voting to support the basic object of H.R. 11583 included a proviso that the orderly rate procedures under section 5(a) be fully preserved and, unless the bill is amended to delete the restriction against conference ratemaking, we cannot support the proposed legislation. The conference method of ratemaking which has been followed by the carriers under the provisions of section 5(a) has served both the shipping public and the carriers well, and it is desirable that all rates be established by this method. The orderly proce

dure of docketing and advertising proposals is important in that it gives all concerned an opportunity to comment on proposed changes and conduct appropriate negotiations prior to publication in tariff form where the rates have the effect of statutes.

As far back as the early 1920's the league considered the problem of orderly rate procedures, joint consideration of rates, and carrier rate bureaus. It concluded that, with maintenance of the right of carrier independent action, shippers' interest could best be served by the continuation of such procedures. To that end an agreement was worked out with the rail carriers in 1921 providing for public docketing of rate proposals, public hearings before the various rate committees, right of appeal, et cetera. That agreement is often referred to as a forerunner of the section 5 (a) agreements presently approved by the Interstate Commerce Commission under the so-called Reed-Bulwinkle Act-now section 5 (a) of the Interstate Commerce Act.

When the carriers were threatened with antitrust prosecutions following suits in the Supreme Court in Georgia v. Pennsylvania Railroad, 324 U.S. 439 (1945) and U.S. v. American Association of Railroads, et al., 4 FRD 510 (1945), the league and its members supported the passage of the Reed-Bulwinkle bill.

The league believes that the Congress acted wisely in overriding a Presidential veto and approving the Reed-Bulwinkle bill. The league's policy with respect to the antitrust laws states:

The antitrust laws: Carriers should have continuing relief from the prohibitions of the antitrust statutes when conducting their affairs according to the regulatory provisions of the Interstate Commerce Act and in accordance with rules and regulations prescribed by the Commission within the scope of and pursuant to the provisions of section 5(a) of the act. Cooperation among, and joint action by, carriers, subject to the right of independent action, is essential to the preservation of carrier services and rate structures and is in the public interest.

The pending bill attempts to distinguish between joint and single line rates, by exempting joint actions of the carriers in establishing joint rates on reasonable through routes from the antitrust laws while making those laws applicable to the procedures followed in establishing single line rates.

To shippers this is a highly artificial distinction. Changes in single line rates and in joint rates are of equal importance and have an equal impact on traffic and competition between shippers.

For example, the Santa Fe has a single line running from Chicago to California. A shipper in Chicago using this carrier would pay a single line rate. However, a shipper of the same product in Rockford, Ill., would have to ship over more than one line to reach California and would pay a joint through rate. Both shippers are vitally interested in both their own rates and their competitor's rate. A change in either rate could have a serious competitive effect on both shippers in their California markets. This competitive effect would be the same regardless of whether the change was in the joint rate or in the single line

rate.

In both cases the shippers need the advance notice and opportunity to be heard on rate changes which are available under the present conference method of ratemaking. These orderly procedures for ratemaking have been completely satisfactory to the shippers and it is their opinion that all rates should continue to go through these orderly procedures.

The exempted commodities include wheat, whether in bulk or in packages, but do not include flour except when in bulk. The tariff rates on wheat and flour are closely tied together where there are movements of both commodities. However, under these bills the railroads could continue to consider changes in rates on flour in packages in rate conferences under 5(a) procedures but not in the case of rates on flour in bulk or on bulk grain.

The league strongly supports the orderly rate procedures provided for under section 5(a) of the act and urges that the Congress not restrict the application of section 5(a) from rates established under the proposed exemption as embodied in this bill.

Finally, the league supports the change in section 303 (b) of the Interstate Commerce Act under which the three commodity or mixing rule would be eliminated. At a hearing on April 11, 1962, before your Subcommittee on Transportation and Aeronautics the league supported H.R. 9046, a bill to permit the application of the bulk commodity exemption when other commodities are concurrently transported in the same vessel.

The league approves retention of the bulk commodity exemptions appearing in sections 303 (b) and (c) of the act, modified or amended by elimination, first, of the present "three commodity" restrictions and, second, of the present "as of June 1, 1939," restriction. Experience under the provisions of section 303 as applied and interpreted through the years since the 1940 amendment providing Commission regulation of water transportation, indicates that the limitation to three exempt commodities in one vessel or tow has unjustly handicapped regulated water carriers in handling bulk commodities and this has been against the general interest of shippers.

In conclusion may I thank this committee on behalf of the members of the National Industrial Traffic League for this opportunity to present their views.

Now I have a statement on 11584. Would you prefer that I proceed with that?

Mr. WILLIAMS. I think we might have your comments on 11584 and then have questions from the committee.

Mr. BOYD. H.R. 11584 contains 13 sections. I shall not attempt to deal with each and every section but will comment only upon those which are of special significance to shippers and on which the league has an established policy.

As indicated in our previous statement, league members through the years at annual and special meetings have adopted policies governing practically all phases of transportation and transportation practices. Those policies are the basis for the league's position with respect to the following sections of H.R. 11584.

The league generally favors section 2 authorizing experiments by common carriers in rate, classification, and documentation systems. It is thoroughly consistent with basic overall policies advocated by the league for many years that carrier management should have the greatest degree of responsibility and freedom in providing the public with the transportation service that it needs. Carrier management should have the authority and should be encouraged to develop new systems of classification and ratemaking which would prove more efficient for the carriers and economical for the shippers.