resources to gain such competitive advantage that competitors would be so detrimentally affected as to preclude their providing adequate service to the public. Once the competition is eliminated, price competition could be stifled and service may be downgraded. The resultant concentration of economic control in just a few companies could further work to eliminate healthy competition. Another barrier to the development of multi-modal companies is the current labor contracts with their protective conditions.

Small shippers and small communities are currently experiencing difficulties in acquiring adequate service. Before a limited number of full-service transportation companies are permitted to develop, it will be necessary to devise an effective regulatory scheme to insure that the entire shipping public receives efficient, economical, safe and adequate service.

In conclusion, while the development of multi-mode transportation companies may be desirable in the future, it appears that their creation at the present time would be a case where the best was an enemy of the good.

Question. Do you support the promotion by the ICC of the maximum possible efficient intermodal transportation? If yes, how should this be done? What steps have been taken to facilitate intermodalism by the Commission in recent years? Answer. Yes. It must be remembered, however, that, as was pointed out in Emery Air Freight Corp. Freight Forwarder Applic., 339 I.C.C. 11, 37 (1971), efforts to effect intermodal coordination and cooperation must, to a great degree, stem from within the industry itself.

As far as the Commission is concerned, I believe that it has made significant regulatory contributions with respect to intermodal transportation. It has explored piggyback practices and the incidental-to-air exemption, and it has joined in cooperative inter-agency liaison programs with the CAB and the FMC. One example of the steps the Commission has taken is Emery, supra, where we granted the applications of two air freight forwarders for nationwide authority to perform surface forwarding service in support of their air forwarding activities. The steps taken by the ICC to facilitate more efficient intermodal competition with respect to traffic handled in part by FMC regulated carriers is fully covered in the next response.

Question. What steps have been taken by the ICC to cooperate with the FMC in establishing and facilitating more efficient intermodal transportation?

Answer. Attached hereto is a copy of a recent speech of mine titled Cooperation in Intermodal Regulation.1 It describes what steps have been taken by the ICC to cooperate with the FMC in establishing and facilitating more efficient intermodal transportation.

Not covered therein, since it was decided after the speech, is Port Royal-Declaratory Order—“LASH” Operations, 344 I.C.C. 876 (1973). A majority of the Commission, in Port Royal, concluded that section 302 (i) of the Interstate Commerce Act required us to assert regulatory control over a petitioner's operations, viz, providing tugboats and pushboats to transport LASH lighters between the mother vessel anchored at Savannah, Ga., or some other major port, on the one hand, and, on the other, various other United States southern Atlantic ports. The FMC contended that no jurisdiction vests in the ICC over LASH operations. The report points out, however, that the failure of the ICC to exercise jurisdiction over LASH operations would be contrary to the underlying purpose of part III of the Act, which was designed to place inland water carriers under essentially the same regulatory controls as parts I and II carriers. This proceeding is presently receiving judicial review and since there is always the possibility that it may be remanded to the Commission, I have limited my decision of this matter to what has been stated in the Commission's report.

Another case decided shortly before the speech is Modern Intermodal Traf. Corp. Investigation, 344 I.C.C. 557 (1973), which deals with the status under part IV of the Interstate Commerce Act of those who arrange for the through transportation of international intermodal shipments, In Modern, PIE, a motor common carrier, and its wholly owned subsidiary, MITCO, performed door-todoor, intermodal, container freight services between points in the contiguous United States, on the one hand, and, on the other, points in Hawaii, Europe and the Orient, at single-factor rates and under both single-carrier responsibility and a through bill of lading. PIE and its subsidiary performed the inland domestic

1 See p. 134.

portion of the transportation pursuant to the former's motor carrier authority, arranged for the ocean transportation in the purported role of a NVO, and effected Hawaiian delivery through local exempt motor carriers, as "agent for the shipper". We found that sections 402 (a) (5) and 203(a) (18) of the Act (the freight forwarder and broker definitions) specifically exclude motor carriers from their purview, and that respondent, PIE, in the performance of the inland domestic portion of the through movement, was merely conducting motor carrier operations, for which no additional authority is required; and that there is no legal impediment to respondent's arranging for the ocean segment of the transportation as an NVO, and combining the functions to provide a through service. However, we reached a contrary conclusion as to MITCO, which holds no motor carrier or freight forwarder authority in its own name.

Question. Many critics of the Commission have suggested that Commission proceedings be streamlined to facilitate the regulatory process. Is such streamlining necessary? Do you have any suggestions for how such streamlining might be achieved?

Answer. In an effort to streamline the regulatory process, the Commission has already initiated several major procedural reforms. We have developed a modified procedure which permits the processing of many applications without an oral hearing. As a further step, in appropriate cases, we have initiated the use of a simplified order thereby enabling the disposition of many matters in substantially less time than that which would be required in the preparation of a complete report reciting all the relevant facts.

Also, we have attempted to make expanded use of verified statements for receiving evidence even in oral hearings. This step serves to help define the issues involved and, thereby, saves both time and expense.

In addition to these procedural steps, the Commission has also taken steps in the substantive area to streamline the administrative process. In its attempt to alleviate major transportation problems, the Commission has instituted, and in some instances concluded, a number of broad investigations and rulemaking proceedings. They include such areas as the quality of the environment, processing loss and damage claims, practices of household goods carriers, the adequacy of rail passenger service, and rail rate structure investigations, to name a few. These proceedings, which look toward the resolution of present and foreseeable problems on a regional or national basis, unquestionably represent an improvement over the generally slower case-by-case approach.

In short, we have made, and will continue to make, attempts to streamline the administrative process. This, however, should not be accomplished at the expense of our statutory obligations and responsibilities to the public.

Question. Is there presently an office of the ICC that has an overall transportation planning mission? If so, is that mission being carried out? If not, what steps, if any, should be taken by the Commission to establish an overall transportation policy?

Answer. No. The overall transportation policy and planning, in the final analysis, is the responsibility of the Commissioners themselves.

Some criticism has been leveled at the Commission to the effect that it is not able to keep up with changing market and commerce conditions. While I am not in a position to challenge or refute such criticism to the extent that it refers to the period before I took office as a Commissioner, I must take strong exception to it to the extent it may refer to the period during which I have held this office. During the last four years the Commission, in my opinion, by its response to the many issues with which it has been faced has demonstrated not only that its policy and planning functions are being satisfactorily handled but that they are being carried out in the most efficient manner possible.

We have made noteworthy advances in the field of household goods carriers and the adequacy of rail passenger service. Our handling of the energy crisis, in my opinion, is praiseworthy. And, we are now in the process of investigating the rail rate structure.

In the recent past the Commission has instituted more rulemaking proceedings dealing with matters of policy and planning than at any other time in its history. In light of this I do not believe that the aforementioned criticism is either fair or accurate.

Our staff presently submits policy matters for our consideration and implements and refines policy established by the Commissioners. In my opinion no

need has been demonstrated for the establishment of an office in the Commission which would have an overall transportation planning mission.

Question. To what degree do you believe that motor carrier entry rights should be limited in cases where there is no demonstration that competition would provide an unreasonable threat to the financial health of other carriers presumably capable of providing for the service to be provided by the applicant?

Answer. Commission decisions regarding the issuance of operating rights are presently based on the following considerations: (1) whether the new operation or service will serve a useful public purpose, responsive to a public demand or need; (2) whether this purpose can or will be served as well by existing lines or carriers; and (3) whether this purpose can be served by applicant with the new operation or service proposed without endangering or impairing the operations of existing carriers contrary to the public interest. Pan-American Bus Lines Operation, 1 M.C.C. 190, 203 (1936). This three-part test has served to give this country a motor carrier system of common and contract carriers which is reliable, available, stable and economic. For that reason the operations and services of existing carriers should not be ignored under any circumstances, and the effect of a grant of new operating authority upon the total quantity and quality of service available to the public should be weighed to determine where on balance the public interest may lie.

Our present motor carrier entry policies represent a well-reasoned, logical and time-tested approach to the problem, an approach that is truly in the public interest. These policies are sufficiently liberal, as well established by the fact that of 5,240 motor carrier applications filed with this Commission in fiscal year 1973, some 4,300 were granted in whole or in part. In 507 instances, the applicant was issued an initial license authorizing it, for the first time, to provide service to the public as a for-hire regulated carrier. These applications were granted following a full and complete review of the evidence presented in the light of the PanAmerican criteria. It would be difficult to envision a more liberal, but still effective, body of standards for entry into the motor or water common carrier fields. Question. Do you believe that the prime factors to be considered in a motor carrier entry case are the elimination of unfit and unsafe transportation and the prevention of economically harmful and wasteful competition? Why or why not? Answer. Without any question, the elimination of unfit and unsafe transportation and the prevention of economically harmful and wasteful competition are among the primary factors to be considered in motor carrier entry cases. Initially, it should be emphasized that the fundamental goals of transportation regulation are, and must be, the promotion of sound economic conditions in transportation and of adequate, economical, and efficient service, which is responsive to our ever-changing national transportation requirements, and which is performed by carriers meeting safety and other fitness standards, at rates which are reasonable and free from unjust preferences or discriminations and from unfair or destructive competitive practices. It is in the light of these goals, that issues of fitness and carrier competition, as well as all other issues, must be considered in motor carrier entry cases.

Pursuant to sections 207(a) and 209 (b)(6) of the Interstate Commerce Act respectively, applicants will be authorized as common or contract carriers only after the Commission determines that these applicants are fit, willing, and able properly to perform the service proposed and to conform to the provisions of the Act and to the requirements, rules, and regulations of the Commission thereunder. Therefore, fitness, including safety fitness, is and should be a primary issue in each motor carrier entry case. Those who use the services of the regulated transportation industry must be able to rely upon the ICC for protection from ill treatment or unlawful conduct by these carriers. All persons have the right to be protected from the senseless accidents which occur on our streets and highways, and regulators have a very grave responsibility to protect them from unsafe or potentially hazardous operations by carriers which are subject to their regulation.

With regard to the competition factor recited in this question, it must be noted that while it is extremely important that very serious consideration be given to the negative side of the issue, (i.e., the prevention of economically harmful and wasteful competition) it is also imperative that full consideration be given to its positive aspects; namely, the creation or promotion of a more healthy competitive situation. In further response to this question and to avoid undue repetition, reference should also be made to my answer to question 45.

Question. Do you believe that each conference, bureau, committee or other organization established or continued pursuant to an agreement approved by the Commission should maintain records of the votes of its members on each matter voted on and maintain such other accounts, files, memoranda, etc., as the Commission may require? Why or why not?

Answer. By order entered June 15, 1973, served June 25, 1973, a copy of which order is attached hereto,1 the Commission instituted an investigation of the practices of rate bureaus or ratemaking organizations operating pursuant to section 5a agreements, which have been approved by the Commission in accordance with the requirements of section 5a. The issues raised by this question are directly addressed in that ongoing investigation in at least three separate areas of inquiry, and have been cxpanded therein to include the consideration of alternatives to existing record-keeping requirements. In view of the fact that this proceeding, Ex Parte No. 297, Rate Bureau Investigation, is pending and as my position on these issues ultimately must be formulated on the basis of all evidence which is developed on that record, it would be inappropriate for me to express my opinion on these issues at this time. Further, an expression of opinion at this time might tend to compromise the information gathered and the future rules and regulations which may be issued as a result. (See my prefatory statement with regard to my position on the subject of pending matters generally.)

Although it would be inappropriate presently to comment on these issues, the following information regarding existing regulations is offered for informational purposes. Present regulations pertaining to rate bureaus and other organizations operating pursuant to an approved section 5a agreement are contained in Part 1253 of the Code of Federal Regulations (49 CFR 1253). Section 1253.10 requires that "Accounts shall be kept by each conference, bureau, committee, or other organization subject to section 5a to record all receipts and expenditures of moneys ***" Section 1253.20, entitled Other records, provides that:

"Each such organization subject to section 5a shall maintain: (a) (1) A file for each proposal relating to rates, fares, classifications, divisions, allowances, or charges * ** or rules and regulations pertaining thereto, which shall contain the complete proposal, all procedural documents issued, protests, memoranda, amendments, reports, etc. submitted aand any other correspondence respecting the matter proposed. Also reports or minutes of all proceedings at any oral, committee or public hearing held thereon and the determination relating thereto; ***

"(b) All accounts and other records covered by this part shall be filed in such manner as to be readily accessible for examination by representatives of the Commission."

This part goes on to describe the periods of time that such records must be maintained, and the procedures for destruction. In addition, section 1253.40 requires that: "All conferences *** subject to section 5a shall file annual reports for the year ended December 31, 1959, and for each succeeding year until further notice in accordance with Annual Report Form RBO be filed *** in the Bureau of Accounts, Interstate Commerce Commission ***."

Therefore, each conference, bureau, committee or other organization established or continued pursuant to an agreement approved by the Commission presently is required to maintain records of matters voted upon, and other accounts, files, etc. These records have always been available for inspection by Commission personnel, and they were, in fact, inspected by field investigation teams prior to the institution of the pending investigation. Any consideration of changes in the present rules should rightfully be reserved until the conclusion of the data gathering stage of the proceeding, at which time the Commission will be in a far better position to assess present record-keeping requirements in light of present-day business requirements and our obligation to the public to insure a sound transportation system.

Question. Should motor carrier conferences, rates bureaus, or committees approved by the Commission be prohibited from protesting or requesting suspension of rates filed by its members in the exercise of their party's right of independent action? Why or why not?

Answer. The issue raised by this question is also directly addressed in several areas of inquiry in the Commission's investigation in Ex Parte No. 297. Accordingly, although it would be improper to render any opinion with regard to the merits of this issue, the following information is offered as background material.

1 The statement is in the Archives.

The question of whether rate bureaus should be allowed to protest or request suspension of rates filed by its members in the exercise of the members' right of independent action is one which has been considered at length by the Commission in previous cases, and which has always been a hotly contested question. In Middle Atlantic Conference-Agreement, 283 I.C.C. 683, 690, the Commission stated the underlying legal problem: "Section 216 (e) provides that 'Any persons, State Board, organization or body politic' may make complaint against any rate in effect or proposed to be put into effect, and section 216 (g) provides that the Commission may suspend the operation of any proposed rate 'upon complaint of any interested party *'" This case concluded that the Commission could not impose a condition of approval prohibiting the exercise of the right by the rate bureaus.

* *

In Southern Motor Carriers-Agreement, 297 I.C.C. 603, 616, the Commission again considered the question, and upheld the reasoning of previous cases with this language:

"The right to take independent action by conference members is distinguished from, and does not conflict with, the equally established right of the conference, or any other body politic to protest or complain of any such action. After a carrier takes independent action, the action taken stands upon exactly the same footing with respect to the conference, in its efforts to foster a sound and stable rate structure in the interest of its members as a whole, as any such action taken by a carrier not a conference member. To interpret section 5a otherwise would not only contravene the provisions of section 216, paragraphs (e) and (g), as stated, and of the national transportation policy, but would jeopardize the full and free hearing so necessary and essential to the development of complete records in proceedings before the Commission."

This decision is presently in force, but I am convinced that at the end of the investigation, this question will have received complete re-examination in light of all the evidence and the public interest, and will be resolved in that manner which will best serve to effectuate the goals set forth in the statement of the National Transportation Policy.

Question. In recent months, the number of complaints against household moving industry has been increasing.

(a) What abuses are most commonly referred to the Commission?

(b) What efforts should the Commission make in this area to correct these abuses?

Answer. (a) During the 12 months beginning October 1, 1972, and ending September 30, 1973, the Commission received 10,512 compaints from disgruntled household goods shippers. The three major trouble areas were: (1) carrier's failure to provide on-time pickup and/or delivery; (2) loss or damage to the shipper's goods; and (3) rates and charges, including underestimating by the carrier's representative of the charges at the time the shipment was solicited. (b) The Commission has asked Congress for authority and sufficient funds to adjudicate loss and damage claims. We have promulgated a number of regulations some of which require (1) the mandatory distribution of public advisory questionnaires to the proposed shipper, (2) each carrier to file with the Commission and furnish to each prospective shipper specific performance statistics on its operations, and (3) the carrier to be absolutely responsible for the actions of their agents. Additionally, we have instituted a number of investigation proceedings into the practices of certain carriers. However, until we are authorized to adjudicate loss and damage claims, we will not be in a position to properly correct one of the worst abuses in this industry.

Questions. The Department of Transportation recently recommended to the Commission that household mover's rates be tied to the accuracy of moving cost estimates made to customers by the mover. In its recent report on modifications of household mover regulations, the Commission did not explain its reason for rejecting this proposal. Do you favor or oppose the principle of this proposal? Why or why not?

Answer. I oppose the principle of this proposal. In the proceeding to which this question refers, Ex Parte No. MC-19 (Sub-No. 19), Practices of Motor Common Carriers of Household Goods, 119 M. C. C. 585, (1974), the Commission adopted regulations to better protect the individual householder. Among these regulations is a requirement that household goods carriers issue performance reports to each prospective customer. These reports will demonstrate the carrier's accuracy in estimating, as well as reliability in picking up and delivering goods on time and the timeliness in which claims for loss or damage are settled. A con