it added paragraph (6) to section 17 of the act, giving it this broad and flexible power, except as to special investigations instituted upon the Commission's own motion and except that in contested proceedings requiring public hearings the consent of the parties should be necessary to give authority to a single commissioner or a board of employees to take action. These exceptions were made as a result of representations of the National Industrial Traffic League. Since the amendment of 1933 the Commission has possessed very broad powers to rearrange its organization from time to time to suit the requirements of the laws it administers. Numerous duties which formerly required action by the full Commission or a division thereof are now handled by a single commissioner or by employees. The law is now so flexible that the Commission has power to rearrange its affairs to meet almost any situation which might arise. As an example of how quickly the Commission may act to meet changed legislative situations, the attention of the committee is directed to the fact that on the day after the Motor Carrier Act was enacted in August 1935 the Commission created a special division of three commissioners to administer that act, and Commissioner Eastman was made chairman. The administrative work started on the same day the division was created, and within 36 hours from the time the act was approved by the President. We are informed that the Commission is now giving consideration to the formation of another division of three commissioners to deal with cases involving joint rates of motor carriers and rail or water carriers as such questions may come before it for determination. In the event regulation of port-to-port rates should be placed within the jurisdiction of the Interstate Commerce Commission (which we oppose, as I shall later state), it could in like manner create a special division overnight and build up a special organization to handle such matter. These divisions function under policies which are in general passed upon by the entire Commission, thus achieving a consistent policy of administration of the law. It appeared to be the intent of Congress in the act of August 9, 1917, that the Commission should act in a general way to control all the policies of the divisions. Any division has the right to go to the entire Commission upon any question relating to general policy. It is the view of league members that the Interstate Commerce Commission should be the best judge of what is necessary in the way of organization for the purpose of administering the numerous duties imposed upon it by various laws. It welcomes suggestions, and from time to time committees of the league have conferred with it and presented recommendations with respect to procedure and methods of administration. It is most respectfully urged that no additional legislation on this phase of the subject is necessary. RATE-MAKING RULE On of the most important and highly controversial questions under consideration is the rate-making rule which is found in paragraph 2 of section 15a of the act as applicable to railroad rates. This section, as now in force, received the unqualified endorsement of the league at the time of its enactment in 1933, and, properly interpreted and administered, the league does not concede that the rule requires revision. We do not believe that there is or should be any real controversy between the league and the railroads as to the proper ultimate object of the rate-making rule; that is, to insure national transportation services which are adequate to the needs of commerce and a fair return for the money invested in the property used in transportation service. The Association of American Railroads, in pamphlets of rather general public circulation, has expressed the thought that there is unfortunate language in the present rate-making rule which has impaired the credit of the railroads because a majority of the Commission has not construed the law as directing that the revenue needs of the railroads shall receive proper primary consideration. That association has, therefore, suggested that the present rate-making rule applying to the railroads should be replaced with a rule applicable alike to all forms of transportation, and eliminating any reference to consideration by the Commission of the effect of rates on traffic. Section 30 of the bill recently introduced by Chairman Lea, H. R. 4862 (see pp. 97 and 98), appears to carry out the foregoing suggestion of the railroads. At the special meeting very recently held in Washington the league reaffirmed the action taken at previous meetings approving section 15a as it now stands, and voted against its repeal. It was further resolved, in substance, that the league is opposed to any revision of section 15a which will eliminate the provision that consideration shall be given to the effect of rates on the movement of traffic. If section 30 in the bill, H. R. 4862, should be interpreted to bar consideration by the Commission of the effect of rates on traffic, obviously it would be a false and unwise rule of rate making. The very fact that the Commission is to be instructed to permit rates which will be adequate to accomplish certain purposes seems necessarily to mean that the Commission would have to consider the effect of the rates on traffic, because in no other way could it determine what revenues would result, and, therefore, insure the sufficiency of the revenues to accomplish the desired objects. The league, as stated in its constitution, to which I have made reference, supports a policy of favoring a well-nourished system of railroads, as well as other transportation agencies. It is, therefore, clear that there is no real disagreement between the league and the railroads as to the national policy favoring adequate revenues. But the railroads and the league have been unable to agree on language in a ratemaking rule that will accomplish the principal object just stated, and not be objectionable in other respects. We feel it would be an unfortunate mistake for any language in the act to forbid the Commission from considering the fundamental factor which the railroad managements themselves must consider; that is, the effect of rates on traffic. We have been discussing these questions with the carriers, without thus far reaching an agreement, and these discussions will continue. It is possible that language may be devised which will be acceptable both to the railroads and to the membership of the league as representing the shipping public, for a new rate-making rule to replace section 15a, as well as section 216 (i) of the Motor Carrier Act. In such event, the language of such an agreed rule may be brought to the attention of your committee a little later with the endorsement of both organizations for your consideration. As the matter at present stands, the league is unqualifiedly opposed to proposed section 30 of H. R. 4862. It is opposed to the repeal of both section 15a and section 216 (i) of the act or modification thereof by any language which will eliminate the provision for due consideration of the effect of rates on the movement of traffic. REGULATION OF WATERWAYS In their general legislative program the railroads have been very insistent on equality of treatment by the Government of the railroads with other forms of transportation and urge that the same principles and regulatory provisions should apply to the waterways and highway agencies as are applied to the railroads. The report of the President's Committee of Six advocates adoption by the Government of a definite transportation policy providing for fair, impartial regulation of all modes of transportation, so administered as to preserve the inherent advantage of each. The Committee of Six further definitely advocates the enlargement of the jurisdiction of the Interstate Commerce Commission so that responsibility will be placed in that Commission to administer all regulatory provisions with respect to rates, services, valuation and accounting as to all modes of transportation, together with powers of investigation limited to its jurisdiction. The bill, H. R. 4862, contains various proposals along these lines and involves comprehensive and strict regulation of water carriers by the Interstate Commerce Commission, extending full jurisdiction over port to port rates of carriers in coastwise, intercoastal and inland waterway services. The league has repeatedly voted against any extension of Federal regulation of the rates and services of the water carriers, consequently it is opposed to the water carrier features of H. R. 4862. On the broad suggestion of equality of treatment by the Government of the railroads and other forms of transportation, we have yet to hear a definite suggestion of any present provision in the Interstate Commerce Act governing railroad rates which ought to be repealed, with the exception of the proposed elimination of the longand-short-haul clause of section 4. It is generally accepted apparently by the railroads, as well as shippers, that the Commission should continue to exercise broad powers in the review of freight rates as to their reasonableness, fairness, and propriety, and that the substantive provisions of sections 1, 2, 3, 6, and 15 of the act should be continued without change, and that section 4 should remain in effect, with exception of the long-and-short-haul provision. The reasons for opposing further regulation of port-to-port rates of water carriers have been repeatedly discussed and stated in prior appearances before committees of the Congress. This is one of the most controversial questions which the league has ever considered, and in the limited time at my disposal I cannot undertake to restate these reasons. There is not only the primary question of the wisdom or desirability of further regulation of water carriers, but there is the secondary question as to what tribunal should have jurisdiction if regulation is undertaken. Recently the chairman of another committee of the league appeared before the House Merchant Marine and Fisheries Committee in opposition to the provisions of the Bland bill, H. R. 4307, which would extend the jurisdiction of the Maritime Commission over rates of water carriers. FEDERAL BARGE LINE OPERATION The railroad program, as set forth in pamphlets given general circulation by the Association of American Railroads, contains the following proposal: The Government should withdraw from competition with privately owned and privately operated transportation agencies. At the present time, one of the most conspicuous instances of such unwarranted competition is the operation of the Federal Barge Line on the Mississippi and other rivers. The railroads believe that Congress, by appropriate legislation, should discontinue the operation of the Federal Barge Line and provide for the sale or disposal of its properties, in accordance with the clear intent of Congress at the time the Barge Line Act was passed. That the railroad proposal contemplates immediate disposal of the barge line is indicated by the language in section 401, title IV, of the bill, H. R. 4862 (see p. 183) which directs discontinuance of the services not later than 6 months after the date of enactment of this bill. The Inland Waterways Corporation Act approved June 7, 1924, provides in substance that the Federal Barge Line should be disposed of as soon as its services have been thoroughly established and a responsible purchaser is available who will continue operation of the properties and who is financially able to ensure successful operation. The League has gone on record as favoring the sale of the properties in accordance with the provisions of this act. HIGHWAY TRANSPORTATION Pending bills propose various changes in part II of the act, or in other words, the Motor Carrier Act, 1935; and in H. R. 4862 there is proposed a consolidation of the provisions of parts I and II so that the same regulations shall apply to the railroads and to the highway carriers. It is the general view of the league members that the regulation of common and contract carriers on the highways is still in the experimental stage, that some experience has been gained and some lessons have been learned, but that it is premature to propose any substantial changes in that law. TRANSPORTATION AUTHORITY, BOARD, OR ADMINISTRATOR There are various recommendations in pending or proposed bills for the creation of a transportation authority, or transportation board or administrator, either within, or entirely independent of, the Commission, and with various suggested functions in the way of investigating matters of consolidation and coordination, matters of efficiency and for general planning and promotional work. Without outlining any of these proposals in detail, they are supported by the general suggestion that there is a certain lack of incentive and authority in the Commission under the present law for such investigations and promotional planning, and that such work is entirely separate and distinct from the main duty of the Commission as a tribunal to settle controversies over rates, services, and so forth. The league went on record very definitely against continuation of the office of Coordinator of Transportation for reasons then stated. It was then believed that the majority of his functions could be performed by the Commission itself; and at that time the Association of American Railroads had just been reorganized and it was believed should be afforded opportunity to conduct many of the surveys and studies promulgated by the Coordinator and to put the results into effect. These expectations were not realized. After full discussion of the proposals in pending bills the league adopted a resolution at its recent meeting favoring legislation by which the Interstate Commerce Commission will be empowered to create a transportation board that will investigate matters of consolidation, coordination, economical operation, and plans for the improvement of the transportation system as a whole; such board or agency would make its reports and recommendations for the benefit of the carriers, the public; and the Commission without power to enforce its recommendations or to put them into effect; in other words, performing functions entirely independent of the rate-making functions of the Commission. The carriers and the users of transportation would thereby continue to enjoy the benefit of the judgment of the Commission in all controversies, unprejudiced by any prior investigations of the Commission. It should be clearly understood that this action means that the league is definitely opposed to the appointment by the President of the United States of any such transportation board or administrator, and is opposed to investing any such board or administrator with jurisdiction over various matters that are now within the jurisdiction of the Commission to the extent of making enforceable or effective recommendations or orders. These objections rest on the fundamental idea that jurisdiction of regulating the rates and practices of the carriers should be vested exclusively in an independent tribunal responsible only to the Congress; that is, the Interstate Commerce Commission. No other board or agency should be set up which might tend to exercise a rival or conflicting jurisdiction. CONSOLIDATION OF RAILROADS On the general question of consolidation of railroads, the league has adopted the position of favoring only voluntary consolidations and of opposing consolidation plans which involve regional railroad systems under which existing competition will be substantially curtailed. The league's position, reaffirmed at the recent special meeting, is: That to facilitate voluntary consolidations there should be legislation repealing the present requirements as to a comprehensive plan, balanced systems, maintenance of all possible competition, and preservation of existing trade channels. That the rail carriers should be permitted, subject to the approval of the Interstate Commerce Commission, to bring about such voluntary consolidations and coordinations as will result in economies, assure adequate service, and preserve reasonable competition. |