All carriers are free to quote rates to the Government without regard to the rates on file or the published rates on file.

In 1957 the U.S. District Court for the District of Columbia held that the railroads were not exempt under the terms of the Reed-Bulwinkle Act for concerted section 22 rate-cutting activities aimed at the large independent air carriers, and it purported to restrain them from any concerted price cutting in that respect.

The railroads then, with the support of the U.S. Government, came to this committee and other committees on the Senate side and proposed to Congress, and urged, that the antitrust laws should not be applied to them because, they said, it was impossible and impractical to apply the antitrust laws to ratemaking activities.

This act would apply the antitrust laws to the ratemaking activities, precisely those kind of ratemaking activities that were covered presumably by the decision of the U.S. district court in that air carrier

case.

Now, I have seen nothing in the testimony of the committee or before the committee to suggest that there has been any change, any modification, in the way in which railroad rates are made, or in the possibilities of the ways in which rates are made, that would justify a change in the attitude and yet, presumably, the railroad industry supports this bill.

I suggest, or it seems to me, that the support of the premise of the bill must come from either one of two factors, both of which are kind of terrifying to water carriers.

One is that the bill will not be enacted, without a further exemption allowing full Reed-Bulwinkle protection to rairoad ratemaking activity.

If that is done, then this committee not only has the question before it of whether competition among individual carriers is a good thing for the transportation industry and for the public and for the country, but you have the question before you of whether it is a good thing for the country at large to have the railroads, as a group, competing in rates against individual water carriers.

And you have the second proposition, that the support might spring from an unspoken premise, as I put it in the statement, that the antitrust laws will not be effective or, at least, will not be effective in bringing a lot of cases or in allowing water carriers to maintain cases in rate-cutting activities.

Mr. Chairman, I thank you very much for the opportunity to appear before the committee.

The CHAIRMAN. Thank you, Mr. Layne, for your statement.

I was thinking, from your discussion of the antitrust laws and procedures, that suppose we consider the matter or, that is, the antitrust laws that you have discussed, in reverse.

Instead of the antitrust laws that apply to the railroads, under the proposal in this bill, H.R. 11583, what antitrust laws now apply to water carriers?

Mr. LAYNE. Well, first, of course, as the chairman noted yesterday, the provisions of the Clayton Act, section 3, relating to price discrimination, would not apply to water carriers because the Clayton Act covers commodities and not services.

Secondly, the Federal Trade Commission Act would not apply to

water carriers

The CHAIRMAN. I am not asking you what laws would not apply. I am asking you what laws would apply.

Mr. LAYNE. The Sherman Act would apply.

The CHAIRMAN. To what degree?

Mr. LAYNE. It would apply to the extent that the activities are not regulated by the Interstate Commerce Commission, in my judgment, to a full degree, to the full scope of the antitrust laws of the Sherman Act.

The CHAIRMAN. Well, is it correct that the water carriage of the exempt commodities, not subject to the Interstate Commerce Commission, is subject then to certain antitrust laws under the Sherman Act?

Mr. LAYNE. In my judgment they are, Mr. Chairman.

The CHAIRMAN. Well, then, if that be true, suppose we take two water carriers, and I am seeking advice and information now about this application:

Suppose we have two water carriers, or we have one water carrier and a shipper, which conspire by lowering rates in order to get the traffic away from somebody else or to discriminate in favor of a particular shipper against another shipper, does the shipper have a case under the antitrust laws today?

Mr. LAYNE. I should certainly think so.

The CHAIRMAN. Do you know of any instance where the railroads have ever instituted a case against a water carrier?

Mr. LAYNE. No, I do not.

The CHAIRMAN. Well, apparently, that speaks very well for the water carriers.

Mr. LAYNE. I would think it did.

The CHAIRMAN. Mr. Friedel, do you have any questions?

Mr. FRIEDEL. No, sir.

The CHAIRMAN. Mr. Younger?

Mr. YOUNGER. Just one, Mr. Chairman.

Mr. Layne, in your arguments you use various reasons why it would be difficult to apply the various antitrust laws, and I am wondering whether that reasoning was probably one of the causes for all the waterway carriers' recommendations to rescind the bulk commodity and the agricultural exemptions rather than the minimum rate to the railroads.

Mr. LAYNE. As I understand your question, Mr. Congressmanlet me see if I do understand it correctly.

You are asking me whether or not the difficulties in the application of the antitrust laws are one of the reasons for the proposal to extend the exemption or to eliminate it?

Mr. YOUNGER. Eliminate.

Mr. LAYNE. Eliminate the exemption?

Mr. YOUNGER. Rescind, rescind the bulk commodity in agricultural exemptions.

Mr. LAYNE. It may have been, sir.

Mr. YOUNGER. That is all.

The CHAIRMAN. Mr. Rogers?

Mr. ROGERS of Florida. Thank you, Mr. Chairman.

Mr. Layne, are there provisions in antitrust laws now that permit. an individual, who feels that he is being discriminated against because of pricing, to bring a suit against the carrier if this law were enacted?

91497-62- -36

Mr. LAYNE. If this law were enacted-I think we have to go back to the chairman's question. Let me answer you this way, Mr. Rogers: In the first place, I find it extremely difficult to conceive of a case in which, if this law were enacted, a shipper would have a cause of action under the antitrust law. I cannot think of a case in which a shipper would have a cause of action that he does not now have under the antitrust law.

At the present time, a shipper, feeling himself-and this would be true if this statute were passed, as I understand it a shipper would have a cause of action under the Interstate Commerce Act against a carrier, regulated by the Interstate Commerce Commission, for diserimination, for preference, for undue or unjust advantage, or the like.

And those would be, as far as railroads are concerned, under sections 2 and 3 of the act, and he could bring that case before the Interstate Commerce Commission, and that would be true of all carriers regulated by the Commission."

To the extent that they are not regulated by the Commission, as Mr. Harris, the chairman, has suggested to me, if there is no regulation by the Commission, the present relief would be, if the discrimination amounts to a violation of the Sherman Act, then that shipper would have a cause of action under the Sherman Act.

But discrimination, under the Interstate Commerce Act would not necessarily amount to a conspiracy or a violation of the antitrust laws. Mr. ROGERS of Florida. Yes, but the point I am making is that an individual could bring a suit without having to go through the Government at all?

Mr. LAYNE. Under the antitrust laws an individual may sue for treble damages, that is for damages his business has sustained, and recover three times the amount he is able to prove plus injunctive relief.

Of course, a 4-year-and-3-months' case, civil case, for that, requires a substantial amount of capital to process that kind of litigation.

The ability of a person to maintain that kind of a case may be sharply limited

Mr. ROGERS of Florida. Well, now, suppose the Government, with the passage of this law, keeps a pretty close eye on it, and it is the intent, I imagine, of the Antitrust Division to keep a very close eye on this in any such cases processed through the Government, then what would be your reaction to that?

Mr. LAYNE. Well, if the case were processed by the Government, my reaction to that is that it would be largely after the fact.

The preventive nature of it would be in the form of preventing or giving a warning to somebody else not to do the same thing in the future and, so far as the unfortunate victim is concerned, he is evidence of the offense, but he is not compensated in any Government case for what has happened to him.

Mr. ROGERS of Florida. Would the antitrust laws also apply to the water carriers?

Mr. LAYNE. Yes.

Mr. ROGERS of Florida. They do now?

Mr. LAYNE. Yes; to the extent that they are unregulated by the Interstate Commerce Commission; in my judgment, they are.

Mr. ROGERS of Florida. And an individual could bring suit against them, too?

Mr. LAYNE. Yes.

Mr. ROGERS of Florida. I see.

All right, thank you very much.

Thank you, Mr. Chairman.

The CHAIRMAN. You heard the witness testify yesterday that case of 10 years, however, before the Interstate Commerce Commission, too?

Mr. LAYNE. Yes, sir; I did.

The CHAIRMAN. And that is a problem that is presented over and over again, that under our regulatory procedures the ingenuity of our legal profession, practicing before the Commission, has been such that I started to say "foul everything up," but I will not use that term-but they bog it down, bringing about these interminable delays which, in my judgment, have jeopardized our regulatory proc

esses.

And that is one reason why we have this problem before us now. Mr. ROGERS of Florida. Will the gentleman yield?

The CHAIRMAN. If it will not work one way we have got to do something to make it work another way.

Yes?

Mr. ROGERS of Florida. What is your attitude to the proposal that some have suggested here, that the water carriers and trucks be brought into the regulation on minimum rates by the ICC?

What would be your reaction to that?

Mr. LAYNE. I just do not know enough of the facts about it. I am an antitrust man. I do not know the answer to your question, sir. I wish I did.

Mr. ROGERS of Florida. I see.

Mr. LAYNE. And let me also respond about this business of delay before the Interstate Commerce Commission in the processes, and I can only say that the lawyers who practice in antitrust cases before the U.S. District Courts have likewise found no way in which to expedite the procedure there.

As a matter of fact, as these statistics indicate, it takes much longer to process the enormous economic complexities of an antitrust case than it does, apparently, a rate case.

Mr. ROGERS of Florida. I see. Thank you.

The CHAIRMAN. Thank you very much, Mr. Layne.

Mr. LAYNE. Thank you, Mr. Chairman.

The CHAIRMAN. Mr. David A. Wright.

STATEMENT OF DAVID A. WRIGHT, CHAIRMAN, WATERWAYS BULK TRANSPORTATION COUNCIL, INC., WASHINGTON, D.C.

The CHAIRMAN. Mr. Wright, I believe you are chairman of the Waterways Bulk Transportation Council, Inc.?

Mr. WRIGHT. That is correct.

The CHAIRMAN. You may proceed.

Mr. WRIGHT. Thank you, Mr. Chairman.

My name is David A. Wright, I am president of National Marine Service, Inc., of 21 West Street, New York City, a contract water carrier engaged in the transportation of liquid and dry bulk materials

for the petroleum, cement, and chemical industries, and for agriculture. I appear today, however, as chairman of Waterways Bulk Transportation Council, Inc. The council is a nonprofit organization established originally in 1953 to defend the exemptions from regulation provided in section 303 of the Interstate Commerce Act, and particularly the so-called dry bulk exemption contained in section 303(b). The council is composed of about 125 members, including regulated common carriers by water, exempt water carriers, shippers, public bodies, and a few individuals. I should like to file, as an exhibit to my statement, a list of our members arranged by geographical areas.

With your permission, I would like to file this list of our members arranged by geographical area.

The CHAIRMAN. It may be included in the record.

(The material referred to follows:)

MEMBERSHIP OF WATERWAYS BULK TRANSPORTATION COUNCIL, INC.

EAST COAST REGION

Bouchard Transportation Co., Inc.

Chemical Barge Lines, Inc.

Cities Service Oil Co.

Cleary Brothers, Inc.

Cornell Steamboat Co.

Olin Mathieson Chemical Corp.
Pennsalt Chemicals Corp.

Poling Transportation Corp.
Preferred Oil Co., Inc.

Reinauer Transportation Cos., Inc.

Cornell Transportation Co. Agents, Inc. Seaboard Shipping Corp.

Illinois Grain Corp.

sidiaries

C. H. Hepperla

H. Newton Whittelsey, Inc.

GREAT LAKES REGION

Marquette Cement Manufacturing Co.
Martin Oil Service, Inc.

Material Service Division of General
Dynamics Corp.

A. L. Mechling Barge Lines, Inc.

The Jupiter Steamship Co. and sub- The Pittsburg & Midway Coal Mining

Lake Michigan Corp.

Lake-River Terminals, Inc.

Co.

Rose Barge Line

Seneca Oil & Transport Co.