promptly. Now, the efficiency committees of the regional advisory board have had that matter under consideration; and I anticipate an improvement.

Now, the fifth reason is the loan program which was discussed by the representative of the Commodity Credit Corporation. And I want to say, Mr. Chairman, that same matter has been discussed in every one of these meetings. And the result of every one of them is that the Commodity Credit Corporation has decided they cannot stagger these loans. And it is my opinion that if it could be done it would relieve the situation immediately.

Now, as to the Commodity Credit Corporation grain, we have handled an immense amount of Commodity Credit Corporation grain in the Indianapolis market. There is no delay on that in the market. The delay on the Commodity Credit Corporation grain has been at the ports. And while it is the policy of the Corporation to get the grain out of the country, it certainly does not help the situation if you hold the cars around the ports and don't unload them.

The Interstate Commerce Commission recently, through the service order which cut down the free time for unloading from the cars to the vessels from 30 to 7 days-the regulation under section 22 of the Interstate Commerce Act allowed 30 days for unloading export grain from the ports, under the guise of emergency and being Government freight, which the Commission on the service order cut down to 7. I would like to see it shorten that. But that is what the Commission did.

Now, the situation in our territory is eased somewhat because of the early harvest and because of the use of trucks. I have in mind. one grain elevator company which foresaw this car shortage, and they went and contracted with all the truckers in the vicinity of their country elevators to haul their wheat. And I know of wheat that is being trucked to Chicago, a distance of 180 miles, and up to 100 miles into our market.

Senator MONRONEY. By and large, those truck bodies are in good condition, too, so you don't have that element of loss?

Mr. BRADFORD. They don't have loss, that is right. But here is the trouble with trucking again: It is an expensive proposition because grain is usually bought on a freight-rate basis. If the man operating a terminal elevator or mill gets grain in by boxcars, he has what is known as transit billing out. In other words, he pays the inbound local rate and then pays the balance of the through rate. If it comes in by truck, he will lose it; and, therefore, he has got to discount the truck grain enough to reflect that difference. And that would reflect back to the producer.

Senator MONRONEY. He gets the advantage of the long-distance rate, merely stopping in transit; is that it?

Mr. BRADFORD. That is right.

I have touched on the situation as it now exists. And Mr. Peterson and Mr. Harriss have covered it thoroughly. And I think it is demonstrated by the testimony of Mr. Peterson and Mr. Harriss that this is not a local situation; it is nationwide.

Let's look to the future. Based on what is now estimated would be the carryover after this present crop, it will be something in excess of a billion bushels of grain of carryover. Now, that has got to move some way. That is a long-range proposition. But I do not know how

it is going to move unless you can get more cars. And the only way you are going to get more cars is to have the railroads build more cars and repair the cars they have got.

I was at a meeting in Minneapolis last Friday at which time the question of storage was discussed with representatives of the Commodity Credit Corporation. And at that time it was agreed that they would order 47 million bushels for storage. That is tin-can storage, as we call it in the trade. But even at that, it has still got to move sometimes; so, there is another thing in your long-range picture. Now, something was said about capacity in the terminals. I think it was mentioned by the representative of the Commodity Credit Corporation. Our market is one of the smaller markets. We only have a terminal capacity of 13,500,000 bushels. And we had some 70 million bushels of grain last year. I made a check before I left; and in that 1 small market their storage was 4,500,000 bushels of grain.

Something was said about the age of boxcars. And I think it was estimated at 30 years.

Senator MONRONEY. That is the entire life, I think.

Mr. BRADFORD. The entire life; yes. Boxcars are just like a human being; in later life they lose a lot of their usefulness. So I don't think a boxcar 30 years old is fit for grain loading, because it is impossible to have a car run that long and still be fit for grain loading.

So, I think when we talk about 30 years as the life of a boxcar, and these grains demand tight cars, it is foolish to talk about 30 years as the life of a boxcar.

Mr. Peterson mentioned the question of per diem. I agree with Mr. Peterson, although some of my own people do not agree with me. I am definitely of the opinion that if they are going to penalize shippers for delaying cars, there should be some penalty against the railroads. Now, of course, Mr. Peterson's showing would indicate the eastern railroads have a large supply of cars on hand. And I refer particularly to page 7 of his exhibit. And if you take that exhibit, you will find that the grain-loading railroads and especially those serving Buffalo. the Grand Trunk, the Lehigh Valley, the Nickel Plate, and the Wabash, are all less than a hundred percent. That is shown in the last column as of June 15. Nickel Plate is shown at 162.1. They are not a grain-loading railroad.

There should be something done about getting those cars. I want to touch briefly on this situation of the Western railroad cars. We in Indiana and Illinois are situated on the west end of these railroads. And we all know that it is not a money-making proposition to haul empty cars; so, when these orders come out to deliver these empties of western railroads, it is the natural thing for the railroads to doand they do do it, and I don't know that I blame them-to take the empties off the west end of the railroad first. So, when it comes to car shortage, Mr. Chairman, Indiana and Illinois are in as bad shape as any other section of the country. And I have seen them in much worse. I am saying that to show that if there is any relief granted that the whole picture should be taken into consideration, and not any particular section of the country, because it is nationwide.

I think, Mr. Chairman, after adopting the testimony of Mr Peterson and Mr. Harriss, that I will conclude my statement a this point. And I thank you very much.

Senator MONRONEY. We thank you very much for your testimony, Mr. Bradford, and we appreciate your coming before us.

Senator MONRONEY. Mr. L. J. Dorr, executive secretary of the National Industrial Traffic League.

STATEMENT OF L. J. DORR, EXECUTIVE SECRETARY, THE NATIONAL INDUSTRIAL TRAFFIC LEAGUE

Mr. DORR. My name is Lester J. Dorr. I am executive secretary of the National Industrial Traffic League, with offices at 711 14th Street NW., Washington, D. C., the organization for which I am appearing here today.

The National Industrial Traffic League, as its name implies, is a national organization of firms and corporations actually engaged in the shipment and receipt of commodities, also of chambers of commerce, boards of trade and commercial, trade, and traffic organizations dealing with general traffic and transportation matters.

The league membership is distributed throughout the entire United States and represents practically every line of industry. Its members use all forms of transportation, that is, rail, highway, water, air, pipeline, and freight forwarders. It is interested in the development and maintenance of an adequate and efficient national transportation system, privately owned and operated, and in the free and unrestricted flow of commerce.

The problem of an adequate supply of freight cars-and I should say there, all freight cars-has been and continues to be of paramount importance to members of the league. I could go back much further to illustrate the point, but I believe that starting with our November 1953 annual meeting will be sufficient.

The report of the league's transportation instrumentalities and car service committee for that year states:

Your committee has been quite active throughout the year in its negotiations with the Association of American Railroads and its committees, such as the operating-transportation committee, where stress has been put upon both quantity as well as quality of equipment.

The report calls attention to a resolution adopted by the AAR in November of 1952 in which the membership of the AAR reaffirmed its position that the car supply should not be less than 1,850,000 cars; that the individual roads would support such a program to be reached by December 31, 1954; that the construction of 10,000 cars monthly be attained; that the car service division would conduct the study of individual ownership and, when the results were available, the association would handle with member lines as to those who should order more cars of any particular type.

The report continues:

We believe the AAR has used its best efforts to make good on that resolution, but the results have not been encouraging. The maximum number of cars produced in any month during 1952 was 6,310 in December 1952; the average per month during 1953 has been 5,555 cars, or from 1,000 to 1,500 less than during 1951 and 1952.

This same committee, at our November 1954 annual meeting, in commenting on the freight-car acquisition program, reported that the present trend of decline in ownership and serviceable equipment was alarming. The carriers' program of ownership of 1,850,000 cars

adopted August 1, 1950, to be attained in 1954, stands at 1,753,390— 96,610 cars short of the announced goal.

The league's concern about the matter was communicated to Mr. Faricy in November 1953 during his attendance at the meeting of the board of directors of the AAR. His attention was also invited to the fact that a number of private carbuilding plants were being closed because of lack of orders.

The league urged upon him the necessity of an accelerated program of new-car construction in the mutual interest of the carriers and the shippers.

Mr. Faricy, in his reply, advised that the league wire was read to the board of directors of the AAR, and also to those present at the member road meeting the following day. He stated that with the car supply and demand approaching a peacetime balance, and with traffic prospects what they were for 1954, it would not be prudent for railroad management to commit themselves to any accelerated program of car acquisition.

He also stated that they were not abandoning the goal of 1,850,000 cars, but that the timing must adjust itself to the revenue situation. Much concern was expressed over the continual increase in bad-order cars and the tendency of carriers to curtail shop forces. That was in November of last year.

Senator MONRONEY. In November of last year were the railroads in any particular economic distress?

Mr. DORR. Well, last year the loadings were down. There is no question about that, and that was when we had this dropoff in building of cars and in upgrading of cars.

The number of bad-order cars rose steadily during 1954; on October 1 the figure stood at 7.2 percent, as compared with 5.2 percent on September 1, 1953, not a very bright picture. Due to the excessive number of bad-order cars and the prospects for improved business conditions generally which would obviously require more and better equipment, the carriers were urged to immediately take steps to materially reduce this excessive bad-order figure.

At the league's 1954 annual meeting, the league membership authorized its committee on transportation instrumentalities and car service to

Advise rail carriers that the National Industrial Traffic League is greatly concerned about the decline in ownership of freight equipment, the large and growing number of bad-order cars, and decline in orders for new cars;

Urge the carriers to upgrade their existing equipment as rapidly as possible: Urge the carriers to replace obsolete cars, many of which are over 25 years of age, with modern cars to more nearly meet present-day needs; and

Acquaint the traffic officers of the various railroads with the amount of traffic lost to the railroads by reason of shortages of equipment or lack of suitable equipment.

In accordance with this authorization, the league, under date of February 15, 1955, advised Mr. Faricy of its concern over the continued decline in serviceable cars, particularly boxcar equipment, and the steadily mounting increase in the number of bad-order cars awaiting repairs.

After referring to the then current car-service division figures with respect to bad-order cars, new cars installed and new cars on order which, on January 1, 1955, amounted to only 15,038, it was stated that

in view of the general pickup of business which is evidenced by increased carloadings in recent weeks and the prospect of much heavier loadings in the months ahead, the league believes that prompt action should be taken to correct the situation and reverse this unsatisfactory trend.

I would like to point out again that that was back in February of this year, when the shippers or customers of the railroads were urging the railroads to get their house in order for what we could see was going to be increased business.

Mr. Faricy, in his reply of February 17, 1955, asserted that there has been no tendency on the part of the railroads or the association to view the equipment situation with any degree of complacency.

In May of this year the league began receiving complaints from some of its members that the freight-car situation was becoming increasingly difficult and it was asked to urge the Association of American Railroads and the railroads themselves to take the necessary steps to improve the supply of freight cars.

In order to get an appraisal of the situation, the league, under date of June 1955, addressed a questionnaire to its members asking for a report on the freight-car supply as of the week ended June 11, 1955. The results of that questionnaire were summarized in a letter to Mr. Faricy by the chairman of the league's transportation instrumentalities and car-service committee under date of June 22. That letter, together with Mr. Faricy's reply of June 29, were reproduced in a circular to our members, copies of which I will leave with the committee.

I would like to point out that the canvass of our membership during the week ending June 11 brought 629 replies. Now, that is 629 out of a membership of about 1,700. Of that number, of those replying, 111 reported shortages of equipment and generally unsatisfactory condition of cars furnished. Also diversion of shipments to other forms of transportation on the grounds of inability to secure sufficient cars for their needs. Fifty-eight reported shortages, but conditions of cars received generally satisfactory. Thirty-five indicated no shortgaes during the week, but condition of the cars furnished were satisfactory. The others did not report any shortage.

Senator MONRONEY. It was unsatisfactory, you say?

Mr. DORR. That is right. In other words, some 35 indicated they had no shortage, but the conditions of the cars which they did get was unsatisfactory.

Senator MONRONEY. I understood you to say satisfactory.

Mr. DORR. I am sorry.

The Car Service Division of the AAR reports that the average daily shortage of freight cars for the 4 weeks of June 1955 was 10,458, of which 6,103 were boxcars and 2,816 hopper cars. For the week ended July 16 the shortage of cars totaled 13,781, of which 11,356 were boxFor the same week there was a surplus of 8,421 cars, principally of refrigerator and stock cars.

cars.

I think all are familiar with the recent service orders issued by the Interstate Commerce Commission, all of which are aimed at improving the present car situation. In addition, the Commission asked the National Industrial Traffic League and the National Association of Shippers Advisory Boards to urge upon their members the necessity of voluntary cooperation to help alleviate the present situation and to avoid the issuance of punitive orders.