EXCEL PACKING CO., INC., Hon. GARNER E. SHRIVER, House of Representatives, DEAR GARNER: Please refer to bill H.R. 11583 which is now being considered by the House Committee on Interstate and Foreign Commerce. Our company is dependent on the railroads and trucklines for the transportation of our commodities to various destinations in the United States, with occasional export shipments through the gulf ports and Pacific ports. While each mode of transportation serves our needs depending on the conditions involved such as service, transportation costs, or equipment, we feel that each carrier should be free to compete to their fullest extent without any restriction from any regulatory body as to the minimum rates they can publish. We understand this bill will no longer allow the Interstate Commerce Commission to condemn railroad reduced rates. The railroads know what they must do to meet their competition and should not be restricted in their efforts when their competition is not equally restricted. We sincerely request your favored consideration of bill H.R. 11583 and ask that this letter be made a part of the official record. Sincerely yours, Hon. OREN HARRIS, S. H. MARCUS, President. PELLA CANNING CO., Pella, Iowa, August 10, 1962. Chairman of the House Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D.C. DEAR REPRESENTATIVE HARRIS: Our company is a small independent business with no transportation facilities of its own. We are entirely dependent upon common carriers to deliver raw materials to us and to haul finished merchandise to our customers. We are in agreement with the recommendation made by President Kennedy in his transportation message and request support of House bill, H.R. 11583. We would like to have this letter made part of the official record. Yours very truly, EMERY GAARD, Vice President. PORT OF SAN DIEGO AND LINDBERGH FIELD AIR TERMINALS, Hon. BOB WILSON, DEAR BOB: We were pleased to receive copies of S. 3243 and H.R. 11583, which would exempt certain carriers from minimum rate regulations in the transportation of bulk commodities, and the supporting documentation. The expedited action in forwarding this information is appreciated. As indicated in my original request we have reviewed these bills and hereby submit our evaluation for your consideration. The two bills are companion bills and are practically identical in format and intent. Therefore, the comments made on S. 3243 are equally applicable to H.R. 11583. The Port of San Diego is presently handling such bulk commodities as tallow, mollasses, and petroleum products in liquid bulk, and alfalfa pellets, flaxseed, and potash in dry bulk form. The new major bulk loader, now under construction, will be capable of handling bulk commodities such as iron ore, ore concentrates, potash, borax and borates, coal, wheat, corn and other grains, and various other types of dry bulk commodities. These factors were a major consideration in reviewing the proposed legislation. Under present law, the motor carriers are exempt from rate regulation on agricultural commodities, livestock, and fish (including shellfish) as provided in section 203 (b) of the Interstate Commerce Act. S. 3243 makes no provision for amending section 203 (b) to extend the exemption to other types of bulk com modities, both dry and liquid. However, section 1(23) (pt. I covering rail carriers); section 303 (b) (pt. III covering water carriers in interstate commerce); section 418 (pt. IV covering freight forwarders) of the Interstate Commerce Act extend the much broader exemption to other modes of transportation. Additionally, section 1002 of the Federal Aviation Act of 1958 is to be amended to provide the same exemptions to the air carriers (which also include passengers). Section 5(a) of the Interstate Commerce Act, section 15 of the Shipping Act of 1916, and section 414 of the Federal Aviation Act of 1958 are all to be amended. These sections are the ones that exempt the carriers from prosecution under the antitrust laws for establishing uniform rates through tariff-publishing agencies. The relief from prosecution is to be rescinded insofar as bulk commodities and passengers are concerned. There are four basic groups of activity which are to be exempted from minimum rate regulation by the Interstate Commerce Commission. These are set forth as follows: (1) Commodities in bulk which are loaded and carried without wrappers or containers and received and delivered by the carrier without transportation mark or count. (2) The transportation of liquid commodities in bulk. (3) Property consisting of ordinary livestock, fish (including shellfish), or agricultural (including horticultural) commodities (not including manufactured products thereof). (4) Passengers, by carriers subject to parts I, II, III, and IV of the act. Should this legislation be enacted it would open "Pandora's box" of chaos and confusion. Discrimination, preference, and prejudice as between commodities, shippers, and localities would be the rule rather than the exception. The following examples will graphically illustrate the conditions which would exist as between competing ports. A. COMMODITIES IN BULK, DRY At the present time there are major bulk-loading facilities in existence, under construction, or on the drawing boards of every major Pacific coast port. The port of San Diego is very competitive with the port of Long Beach in developing iron ore, potash, borax, and other similar commodities for export. We now have equal rail rates from Arizona and New Mexico sources and are below the port of Stockton. Should S. 3243 pass the railroads could set lower rates on potash out of Carlsbad, N. Mex., to Long Beach than to San Diego that would divert all of that tonnage to Long Beach. San Diego would be prohibited from petitioning the ICC for suspension, even if it found out about the reduction prior to the effective date. San Diego would be required to go to court under the antitrust laws for relief. By that time the cargo would be lost and the damage done. B. LIQUID COMMODITIES IN BULK The same situation would apply on commodities such as tallow, molasses, and petroleum. The same factors and same solutions would pertain. C. LIVESTOCK, FISH, AND AGRICULTURAL COMMODITIES We cannot object to other carriers having the same exemptions on these commodities that motor carriers are now enjoying. D. PASSENGERS This would remove all restrictions on minimum rates on passengers and would undoubtedly result in a major rate war between railroads, buses, and airlines. The amending of section 1002 of the Federal Aviation Act of 1958 would substantially reduce the minimum rate regulation of the CAB but they would still have control "in the public interest" but no such control would exist with the railroads and buses under the ICC. Fares would be extremely low until the competition was driven out, then the fares would return to a much higher level. This is extremely dangerous as passenger operations are notoriously marginal at best. The losses encountered in passenger operations would have to be offset by higher rates on general commodities. E. JURISDICTION Another major factor overlooked in this proposed legislation is the fact that all port traffic is interstate or foreign in nature and therefore subject to the Interstate Commerce Act on beyond movement by land carriers and is not subject to the jurisdiction of the various State public untilities commissions. Should these import/export type of commodities be exempted from minimum rate regulation of the ICC then, the Federal Government has relinquished its jurisdiction and the State then has the right to assume jurisdiction. Since the State of California, through the California Public Utilities Commission publishes "minimum rate tariffs" it is only natural to assume that the State would immediately assume jurisdiction, relinquished by the Federal Government and place bulk commodities under its "minimum rate tariffs." The State of California has already assumed jurisdiction over numerous agricultural commodities moving by motor carrier that would otherwise be exempt under section 203 (b) of the Interstate Commerce Act. We would therefore find potash from Carlsbad, N. Mex. free from minimum rate control by the ICC when moving for export, but the public utilities commission publishing minimum rates on potash from Trona for export. This could quite easily result in widespread discrimination to California shippers in the export trade in comparison to their competitors in other States. F. TRANSFER OF RELIEF FROM ICC TO COURTS To remove the authority and power of the ICC in determining minimum rates would impose a severe strain on our already overloaded Federal courts. There are hundreds of thousands of rate adjustments made each year, and tens of thousands are challenged as being unreasonably low and discriminatory. This proposed legislation would require these challenges to be made in the Federal courts under antitrust laws. The calendar delay of the courts alone would cause irreparable damage to shippers, carriers, and localities before any corrective action could be undertaken. Once minimum rate control were removed from the ICC, wholesale rate adjustments would be made by the carriers and in order to protect our interests the port would be required to add at least two attorneys, with substantial transportation background, just to handle rate cases before the courts under the antitrust laws. Nonattorney practitioners are not allowed to handle any case in a court of law; therefore, transportation attorneys would be required. G. OPPOSITION BY ICC This proposed legislation was opposed by Chairman Rupert L. Murphy of the Interstate Commerce Commission during his 2-hour, 64-page testimony before the House Interstate and Foreign Commerce Committee. Chairman Murphy emphasized the * * * potential for irreparable injury, together with the overriding necessity for protecting the public interest, strongly indicates the need for the availability of a special procedure that assures relief before, rather than after, injury has occurred." Chairman Murphy also stated that removal of minimum rate control would bring intensified unfair or destructive carrier competition. H. PORT COMPETITION The enactment of this proposed legislation on elimination of minimum rate controls by the ICC would open up a major rate war on bulk commodities originating in the Midwest. Ports on the gulf coast and ports on the Pacific coast would be continually whipsawing the carriers for further reductions on grain and other bulk rates. Losses of revenue to the carriers would necessitate further increases in general commodity rates. Due to the greater distances from Midwest points to the Pacific coast than to the gulf coast the increased cost would be greater on commodities moving to or from the Pacific coast. This could cause a shift in general commodity import/export traffic from Pacific coast ports to gulf coast ports and seriously impede any future growth of the port of San Diego, not only on bulk commodities, but general commodities as well. SUMMARY As presently worded these bill would be detrimental to the development of the commerce of the State of California, cause substantial confusion as between Federal and State jurisdictions, place the entire Pacific coast at a disadvantage in its competitive position with the gulf coast on import/export commodities, and be particularly prejudicial to the orderly development of the port of San Diego. In view of the above analysis and conclusions, the port of San Diego, through your able representation, wishes to enter its most strenuous opposition to S. 3243 and H.R. 11583 in their present form. We trust the above evaluation, as requested in your letter of July 13, will be of assistance to you in determining your position in this most vital matter. It is certainly hoped that after reviewing the above comments we may count on your support in defeating these bills as they are presently worded. Best personal regards. Cordially, Congressman OREN HARRIS, JOHN BATE, Port Director. BARBOUR CHIP CO., INC., Eufaula, Ala., July 12, 1962. Chairman, House Committee on Interstate and Foreign Commerce, DEAR CONGRESSMAN HARRIS: Our attention has been called to some very important proposed transportation legislation in the form of S. 3243 and H.R. 11583, commonly referred to as the "minimum rate" bills. We understand that these bills propose to give all forms of transportation equal opportunity to lower the price for their services on agricultural and bulk commodities. At the same time, the regulatory agency (ICC) will retain control over maximum rates of regulated transportation and provisions of the antitrust laws will prevent monopoly in the transportation industry. It is important that competition between the various modes of transportation, both regulated and unregulated, fix the lowest level of freight rates to the public rather than regulation prescribing the lowest charge for a regu lated carrier while their unregulated counterpart can charge any rates they choose and extend them only to those in the shipping industry of their choice. We respectfully urge that full support be given this vital transportation legislation in order that the public may receive full benefit of free enterprise competition. Also, it is requested that this communication be made a part of the record of your committee proceedings in connection therewith. Very truly yours, WADE B. PERRY, President. SOUTHERN FRUIT DISTRIBUTORS, INC., Hon. OREN HARRIS, Chairman, Committee on Interstate and Foreign Commerce, DEAR MR. HARRIS: It is a pleasure for me to congratulate you on the introduction of House bills H.R. 11583 and H.R. 11584. The passage of these bills will enable the railroads, a vital segment of our transportation system, to have a more equal opportunity to compete with other modes of transportation. The legislation under which the railroads must operate needs to be revised in accordance with changed conditions, so that their services will not be lost to our economy. It is felt that these bills will eliminate some of the inequities of present regulation and I urge you to continue your efforts in this direction. Yours very truly, PHILIP P. CARUSO, Secretary-Treasurer. TENNESSEE EGG CO., INC., Chattanooga, Tenn., July 12, 1962. Congressman OREN HARRIS, Chairman, Committee on Transportation, DEAR CONGRESSMAN HARRIS: Your committee has House bill 11583 before it, which has to do with railroad rates and giving the railroad authority to change tariffs on certain commodities. Feeling that the railroads have been discriminated against (though not necessarily intentionally) by the bargelines and other means of transportation, I would think that they are entitled to full consideration and that this bill should be passed. If you would be kind enough to make this letter a matter of record before your committee, I would greatly appreciate it. With kindest personal regards, I am Sincerely yours, HARRY C. CARBAUGH. Hon. OREN HARRIS, ART FURNITURE MANUFACTURING CO., INC., Chairman, House Committee on Interstate and Foreign Commerce, MY DEAR MR. HARRIS: I understand there is before your committee, House bill No. 11583, dealing with the powers of the Interstate Commerce Commission. The railroads from the earliest days have been an important part of connecting the North with the South and the East with the West. It is important that we strengthen the railroad, and the only way it can be done, in my estimation, is to take away the Interstate Commerce Commission's power to prescribe minimum weights on bulk and agricultural commodities. Trucklines have literally "beat the railroads to death," and the railroads seem to now have a new spark, which if the Congress of the United States sees fit to work with them, will pay off for all concerned. I would appreciate very much your support of this bill, and put us on record as favoring same. With kindest regards. Yours very truly, LEONARD P. KAPLAN, President. ANAHEIM COLD STORAGE, INC., Fullerton, Calif., July 31, 1962. Hon. J. ARTHUR YOUNGER, U.S. Representative, House Office Building, Washington, D.C. DEAR REPRESENTATIVE YOUNGER: To afford greater equality of opportunity among carriers, encourage vigorous competition for traffic, and, thus, benefit users and the public through lower rates for transportation service, I urge you to support H.R. 11583. This bill is designed to carry out important recommendations contained in the President's transportation message of April 5, 1962. It would extend to all carriers an exemption from regulatory control of the level of minimum rates on the transportation of agricultural and bulk commodities. Because railroads are today severely handicapped in their competition with other forms of transportation, I feel that if this bill became law it would extend at least a partial remedy to the grossly discriminatory and inequitable regulatory scheme under which they now operate. It is my request that the views here stated be made a part of the official record. Yours truly, FRANCIS L. TAYLOR, |