pete with other carriers for traffic movements for which their equipment, service, and cost characteristics are well adapted, will be significantly improved. For example, they will be in position to adjust rates to compete with either trucks or water carriers in the movement of agricultural commodities and those bulk commodities adaptable both to rail and water transportation. Also, the ability of the railroads to expand their geographical flexibility will be enhanced by virtue of the ability this bill would provide them to establish truck-rail or truck-rail-truck service, using either their own trucks or, by joint arrangements, independently owned trucks. While our comments here today are general in nature and deal almost exclusively with the very desirable objectives of this legislation and not with its technical details, I should like to assure the committee of the desire of the Department to be helpful in resolving differences in points of view and in solving any problems which may arise. Transportation specialists in the Department, including commerce attorneys in our General Counsel's Office, are available to consult with or assist members of the committee staff in any manner desired. We hope you will feel free to call on them for help. Mr. DICE. Mr. Chairman, the Department wholeheartedly supports both H.R. 11583 and H.R. 11584. We are of course primarily interested in the transportation of agricultural commodities and farm supplies, and because of that interest H.R. 11583 is of primary interest to us. We do endorse H.R. 11584, but I would like to direct my comments primarily to the other bill because it is of greater importance to agriculture and affects it more directly. We very strongly endorse the principle of lessening of regulatory control over rates, and we do believe that the enactment of H.R. 11583 would put greater emphasis on the operation of the forces of competition, and less on the regulatory process. We have for a number of years in the Department attempted to determine the cost of transportation to agriculture. This, of course, reflects the importance of agriculture to the transportation industry. The cost of transporting farm food products for civilian consumption in 1961 was about $4.06 billion. This was about four times the level in 1944 when our statistics series was begun on the costs of transportation. This transportation bill for agricultural commodities has increased each year with two exceptions, 1955 and 1960, when it fell below the preceding year. We think this $4 billion transportation bill very clearly reflects the importance of the transportation of food products to the transportation industry. As nearly as we can estimate, about 20 percent of all of the tonnage hauled by the railroads is made up of agricultural products and supplies which would be freed from minimum-rate regulation by H.R. 11583. A similar estimate for highway carriers would indicate that, for those highway carriers that report to the Interstate Commerce Commission, a comparable figure would be 5 percent. In the case of the rail industry, the estimates show that about $1.6 billion annually is derived by the railroads from the transportation of commodities of the type which would be freed from minimum-rate regulation by this bill, and about $80 million represents the value of the transportation of commodities by motor carrier, which would be freed from minimum-rate regulation by this bill. We feel very strongly that the movement in the direction of less regulation is far preferable to the other alternative which would exist for equalizing competitive opportunity among carriers. 91497-62-7 The representatives of the farm community would have been quite upset, I am sure, if the proposal had been in the other direction, to achieve this equality by repeal of the provisions which are in the transportation laws for the exemption from economic regulation of various agricultural and bulk commodities. We think that by enactment of this legislation, that the ability of the motor carriers to provide the service, the flexibility with respect to service of geographic areas and the flexibility with respect to rates would still be preserved. Similarly, we believe that the provisions that enable water carriers to utilize their particular characteristics in the transportation of agricultural commodities would continue to be available and that in addition the railroads would have considerably greater ability to compete for the traffic which these other carriers are now transporting free of rate regulation. Mr. Chairman, I believe that covers the highlights of our position. We do have available in the Department, Mr. Chairman, some people who have spent a great many years in transportation work, including some people in the office of our General Counsel, and if these folks can be of any help to the committee or the committee's staff at any stage in dealing with this legislation, we hope you will feel free to call on them. The CHAIRMAN. Mr. Dice, I want to compliment you. Your entire statement has been included in the record, and I have gone through the statement with you as you have given a résumé of it. No. 1, it really shows that you knew your statement when you came here. Mr. DICE. Thank you, sir. The CHAIRMAN. Because you have given a very fine résumé of it. I think it about included everything in the résumé, in the brief analysis as I observed that you have in the statement, and I want to thank you for it. Mr. Mack, do you have any questions? Mr. MACK. Yes, Mr. Chairman. This rather staggering figure I presume that is much greater than the expenditures of the General Services Administration. Mr. DICE. Yes. However, that figure of $4 billion, sir, is not intended to represent a Government cost in the movement of commodities. Mr. MACK. Oh, I see. Mr. DICE. This is a cost of movement of these farm food commodities for civilian consumption by all carriers for all shippers. Mr. MACK. How much does the Department of Agriculture spend in the movement of farm commodities? Mr. DICE. I don't have that figure, sir. Mr. MACK. I wonder if you can supply that for the record. Mr. DICE. I believe we probably can develop such a figure, and we certainly will try, and be glad to submit it. Mr. MACK. And you handle the surplus grain, I presume? Mr. DICE. That is handled in another service of the Department of Agriculture from the one that I represent. Mr. MACK. Is that department going to present testimony before this committee? Mr. DICE. The views which I have expressed represent the views of the Department as a whole, sir. I have just been given an estimate of the amount spent on transportation of Government-owned commodities, $160 to $170 million, roughly, in that area, annually. Mr. MACK. Is that on all carriers? Mr. DICE. Yes, sir. No, I am sorry; it does not include the cost of offshore shipments by ocean carrier. Mr. MACK. This bill which you are supporting, I want to join the chairman in commending you on a very fine statement concerning it; this bill would substantially reduce the cost of moving all agricultural products; isn't that correct? Mr. DICE. Sir, I don't know whether it is possible to predict the extent to which costs of movement would be reduced. To the extent that rail rates are reduced to meet competition, and this would be made possible through the elimination of minimum rate regulation in this bill, to that extent then there would be a saving, not only to the Government, but to all shippers of agricultural commodities. Mr. MACK. I have no further questions. The CHAIRMAN. Are there any further questions by members of the committee? Mr. Younger. Mr. YOUNGER. A brief one. I would like to have the record show that you subscribe and your Department subscribes to the theory of compensatory rate, if the bill passes. Mr. DICE. Yes, sir; we believe rates should be compensatory. Mr. YOUNGER. Can you furnish us the cost of the movement of the grain out of the Estes warehouses to wherever it is going now? Mr. DICE. That figure won't be available, of course, sir, for quite a considerable period of time, because the loadout is being accomplished gradually. Mr. YOUNGER. Just one other question. Is any of that grain moving to other warehouses, or is it moving into the trade? Mr. DICE. I think the objective is that to the extent possible that grain is moving out of there either for export or to meet sales under the feed grain program. Mr. YOUNGER. You are not sure that some of it isn't moving to other warehouses? Mr. DICE. I don't believe any is moving to other warehouses, but I am not certain, sir, and I will be glad to get that information and supply it for the record. Mr. YOUNGER. I would appreciate it. Mr. NELSEN. Would the gentleman yield? I would rather have the figures to show what the cost was to move it into Billie Sol's elevators. (The following material was subsequently furnished for the record :) Hon. OREN HARRIS, DEPARTMENT OF AGRICULTURE, Chairman, Committee on Interstate and Foreign Commerce, DEAR MR. CHAIRMAN: At the time Mr. George A. Dice, Director, Special Services Division, Agricultural Marketing Service, testified before your committee in support of the transportation bills H.R. 11583 and H.R. 11584, some questions were asked by committee members to which the answers were not readily available and Mr. Dice offered to furnish them for the record. He was asked what the transportation bill for the Department is annually and gave an estimate of $160 to $170 million. Following are the amounts spent for domestic transportation of commodities under the price support and surplus removal programs: 1956. 1957. 1958. $187, 646, 486 1959 186, 382, 306 1960 173, 279, 896 1961 $164, 434, 359 79,984, 105 156, 351, 593 The smaller amount for 1960 was due to the poor grain harvest which required only about half as much reconcentration of grain stocks from country warehouses as normally. Another question related to whether the grain stocks being moved from the Billie Sol Estes warehouses are being shipped to other warehouses. So far, loading orders have been issued for about 9 million bushels. None of this grain is being shipped to other warehouses for storage. It is being loaded out to port elevators for use on export programs or is being sold for domestic consumption, f.o.b. cars or trucks, at the loading-out warehouses. The exact cost of moving this grain will not be known for some time or until it has all been moved. However, due to the plan of disposal, it is reasonable to assume that the only additional cost will be the 4-cent-per-bushel loading-out charge. Mr. Nelson was interested in the cost of getting the grain into the Estes houses. At my request, the General Accounting Office examined loading orders and supporting documents of CCC-owned grain reconcentrated into four Estes warehouses. The result of that examination, copy of which is attached, indicates that on 531.5 million pounds reconcentrated into the warehouses, only about $650 in transportation costs might be classified as higher than the possible minimum. Actually the grain was moved into these warehouses via routes which will permit it to be shipped to ports for use on export programs and no added costs were incurred which would not have been incurred had it moved to other eligible warehouses. We believe the foregoing fully answers the questions posed. We will be happy to reply to any other unresolved questions. We appreciate the opportunity you gave us to express our views on these transportation bills. Sincerely yours, Enclosure. JOHN P. DUNCAN, Jr., Assistant Secretary. COMPTROLLER GENERAL OF THE UNITED STATES, The Honorable SECRETARY OF AGRICULTURE. The permanent Subcommittee on Investigations of the Committee on Government Operations, U.S. Senate, furnished for our examination 105 loading orders issued by the Kansas City ASCS Commodity Office, involving approximately 502 million pounds of transit tonnage, and 14 loading orders issued by the Dallas ASCS Commodity Office, involving approximately 29.5 million pounds of transit tonnage. These loading orders cover the reconcentration of this quantity of CCC-owned grain into the warehouses located at Plainview, Tulia, and Lubbock, Tex., reported to be operated by Billie Sol Estes and/or associates, from May 1959 to September 1961. None of the loading orders covered reconcentration of grain into the Allied Elevators at Hereford, Tex. Our review consisted of a comparison of freight costs for the transit tonnage applied by the two ASCS commodity offices to the reconcentration movements, with subsequent shipment to Galveston, Tex., as shown in the loading orders and supporting documents, with freight costs available for the same tonnage via alternative routes. Our examination disclosed minor differences in rates applicable via alternative routes, resulting in higher net transportation costs of approximately $650 for 6,679,000 pounds of grain out of the approximate total of 531.5 million pounds of grain reconcentrated into the warehouses named above. A copy of this report is being furnished today to the permanent Subcommittee on Investigations of the Committee on Government Operations, U.S. Senate. Sincerely yours, JOSEPH CAMPBELL, Comptroller General of the United States. The CHAIRMAN. Mr. Dice, thank you very much. I am sorry that the time is running short on it, but we are glad to have your statement, and the views of the Department of Agriculture on this important subject. If there is anything else that the committee might wish, we will give you ample notice. Mr. DICE. If you wish to ask further questions I will be available. The CHAIRMAN. The committee will adjourn until 10 o'clock in the morning, at which time we will hear the Department of Justice and the Civil Aeronautics Board. I would like to ask our guests if they will give us the room as expeditiously as you possibly can. (Whereupon, at 10:55 a.m., the committee adjourned, to reconvene at 10 a.m., Friday, June 29, 1962.) |