ICC regulations constitute a monumental barrier to progress and development of America's transportation and distribution system. The promulgation of such rules serves only to bind and shackle a vast segment of our Nation's transportation system. By so restricting progress, literally thousands of individuals will be forced to return to antiquated and uneconomic methods of marketing and distribution. Such unsound, arbitrary intervention by Government would not serve the public interest, but would succeed only in eliminating an economical and indispensable transportation facility to carriers everywhere, and increase the cost of living in a dangerous inflationary era through which our Nation is now passing.

The voluminous record in this entire proceeding convincingly demonstrates the disastrous effects ICC truck-leasing regulations would have on the Nation's industrial and agricultural economy. We do not wish to burden the subcommittee with further material, other than to emphasize the fact that the ICC leasing regulations, if permitted to become effective, would constitute a staggering blow to this Nation at a time when farm prices are declining and when everything possible should be done to reduce, rather than increase, the farmer's transportation and distribution costs. This is especially true in the case of livestock, because if those who haul cattle into the cattle markets cannot get a return load, then they are going to have to charge either the farmer more or the slaughterhouse more; thus there will be an artificial deterrent in the sale of beef to the consumer. Certainly the Congress cannot at this time afford to have one of its administrative agencies interpose such obstacles in the path of the free flow of farm products to the ultimate consumer.

It will be recalled that during the 82d Congress, two separate bills were introduced (upon request) which, in our opinion, would have had almost the same effect as the ICC truck-leasing regulations. These bills, S. 2357 and S. 2362, would have curtailed exempt commodity hauling by any person other than a farmer, and would have completely abolished trip leasing. The Senate Subcommittee on Domestic Land and Water Transportation held extensive hearings on these two measures and in its wisdom took no action on these detrimental proposals. Indeed, they recommended broadening the agricultural exemption to include horticultural products, a move which we heartily approved. If Congress, itself, therefore, saw no reason to impose such unrealistic restrictions upon our industrial and agricultural community, why then should an administrative agency, directly responsible to Congress, take it upon itself to promulgate similar restraining regulations. We submit that it was never the intent of Congress to permit the Interstate Commerce Commission to enter this field and prescribe such restrictive, unwarranted, unjustified and unreasonable truck-leasing regulations. The ICC action constitutes a clear usurpation of power which should be terminated.

During the course of House consideration of H. R. 3203 last year, there were several moves designed to sabotage the effectiveness of the bill. The Interstate Commerce Commission itself amended its regulations to permit return hauls in trucks owned and operated by farmers. This was intended to assist agricultural interests, but recognizing it in its true light and being aware of the fact that it would serve little purpose other than to confuse the issue, the Private Carrier Conference and all of the agricultural interests without exception continued to press for passage of H. R. 3203, which was identical with the bill presently before this subcommittee, and the only measure which is universally accepted as giving genuine relief from the arbitrary and capricious actions of the ICC.

During the debate on the House floor last year on H. R. 3203, an amendment to the bill was offered by Representative Hinshaw, of California. The Hinshaw amendment would have limited trip leasing to movements immediately preceding a movement of ordinary livestock, fish, or agricultural commodities. The Private Carrier Conference objected vigorously to this amendment. Many of its members are agricultural cooperatives who haul, in their own trucks, processed commodities not exempt under section 203 (b) (6) of the act. These companies would have been denied trip-leasing rights under the Hinshaw amendment. In addition, many of our farmer members would have been adversely affected in that their use of for-hire exempt commodity carriers would have been severely limited. The Hinshaw amendment, although appearing on the surface to be helpful to the agricultural community, actually was so fraught with restrictions that fast, efficient, and flexible transportation now available to industry and agriculture would have disappeared completely under the heavy restraints of this ill-advised proposal.

The Private Carrier Conference feels that it is essential that private carriers of this Nation continue to have the freedom of choice in transportation which they have enjoyed in the past and which has made such an outstanding contribution to the growth of the American economy. The trip-leasing regulations promulgated by the ICC strike at the very heart of this freedom of choice in transportation. But, more than that, they do this irreparable harm without any consequential gain to any particular segment of the transportation community. Trip leasing should be permitted, and the Interstate Commerce Commission should be restrained from invoking the restrictive, unwarranted, unjustified, and unreasonable regulations which they have issued. The courts and the Commission have refused us relief in the matter. We must now look to the Congress for the kind of relief from this intolerable situation which we feel will be forthcoming. We again urge upon you the immediate enactment of this legislation. Its early passage by the Congress is the only way in which the Interstate Commerce Commission can be deterred from putting into force rulemaking which would clearly discriminate against the private carriers and which could only have a disastrous and crippling effect upon the whole pattern of highway transportation in America.

Mr. KELLER. May I add one point Mr. Triggs did not cover which is important for the committee to consider? That is the question of the congestion on our highways. That is one of the things about which there is great concern at this time. I think it is a very important point. Other committees of the Senate are wrestling with that problem right now. What we are doing is increasing the congestion on the highways by having these empty vehicles going back and sending another truck out to do the job which they could do.

I think there is one other point that I mention in my statement that also should be mentioned, and that is that these trip-leasing requirements were inaugurated by the Government during the war. At that time I was in the Army and was at the Office of Defense Transportation when the order requiring this was done.

have

If it was good at that time it certainly is good at the present time and the Private Carrier Conference, in this statement which you graciously permitted me to submit, stress these various points. I would like to say that we are heartily in favor of S. 898. May I make clear that I represent the Private Carrier Conference, Inc., an independent autonomous association with offices at 1424 Sixteenth Street NW., and its direct membership is composed of over 1,500 firms which operate private motor trucks in furtherance of their principal business activity, including mining, lumbering, farming, manufacturing, processing, distribution, et cetera.

In addition, the conference speaks also for all of the thousands of private carrier members of the State trucking associations affiliated with the American Trucking Association, Inc. There are 51 such State organizations, 1 in each State and the District of Columbia, with 2 such affiliated groups in the States of Illinois and California. Senator SMATHERS. Thank you very much.

Mr. Parker, I understand you represent the National Grange and that you have a statement which you desire to submit for the record at this point?

Mr. PARKER. I would like very much to if that is permissible. Senator SMATHERS. We will be pleased to receive a statement from Mr. Joseph Parker.

STATEMENT OF LLOYD C. HALVORSON, ECONOMIST, THE NATIONAL GRANGE, PRESENTED BY JOSEPH O. PARKER

Mr. PARKER. Dr. Halvorson of the National Grange who has participated I think in all of the hearings both before the House and the Senate, and before the Interstate Commerce Commission, was unable to be here this morning and asked me to appear and submit his statement for the record.

The position of the Grange, very briefly, is that it strongly supports the enactment of S. 898, as being essential for the Congress to establish the policy and settle the policy with respect to trip leasing.

We believe that S. 898 in effect reestablishes and continues the policy which the Congress established in 1953. We further believe that this legislation is essential if farmers are to have efficient transportation for agricultural commodities when they are needed to move to the market. We also believe that the continuation of trip leasing is essential to the maintenance of a sound national transportation policy for our entire national economy.

Thank you very much.

Senator SMATHERS. Thank you very much.

Your written statement will be made a part of the record at this point.

(The prepared statement of Dr. Halvorson is as follows:)

TESTIMONY OF LLOYD C. HALVORSON, ECONOMIST, THE NATIONAL GRANGE, URGING ENACTMENT OF S. 898 (TRIP LEASING), SUBMITTED BY JOSEPH O. PARKER Mr. Chairman and members of the committee, the agricultural exemption in the Motor Carrier Act of 1935 has proved very satisfactory to farmers and to the agricultural truckers, and we know of no legitimate reason to conclude that it is not serving our whole economy well. Even though there is no rate, route, or territory control over these truckers by the ICC, we know of no cutthroat price wars or chaotic conditions that exist in the industry. Of course, there are always some, as in nearly every industry, who fail or sell out. Our overall impression is that the agricultural trucking industry has done well without controls for the past 20 years.

Because there are no ICC regulations over route or territory, the agricultural truckers are free to go where they are needed and when they are needed as crops mature. Consequently, farmers and handlers of farm products have had excellent trucking service; it has been generally adequate, accommodating, and direct, without restrictions on routes or territories. If some agricultural truckers are free to go where they are needed and when they are needed as to cause a single complaint to come to us at the National Grange in the 10 years I have served as the Grange economist.

Under the exemption, agricultural trucking has grown to meet the needs. The benefit has not only been to farmers, but to consumers as well. Trucking has speeded up transportation and this has enabled the consumers to enjoy fresher, riper, and more healthful and flavorful products on their tables.

In the case of perishable farm products, adequate, promptly available, and dependable transportation is a must. A farmer could lose his entire crop and sometimes his shirt, if transportation were not available at the right time; and consumers would at the same time lose the benefits of an abundant supply. Consumers also would lose from deterioration in quality if needless delay is caused. This will inevitably mean higher prices and less selection. If there is some extraordinary demand for trucks in a certain agricultural area, trucks must be free to go there by trip lease, or "deadheading" without redtape. We need also an agricultural trucking industry that is not subject to periodic breakdowns because of strikes such as common carriers are vulnerable to. We believe Congress took all this into account in providing the agricultural exemption in the Motor Carrier Act of 1935 and we should not allow an administrative

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agency to destroy it or whittle away at it. Consumers are clearly more concerned with efficient transportation of food products than any other product. The agricultural exemption in the Motor Carrier Act of 1935 is not a special privilege. Agricultural shippers and agricultural truckers simply recognized in 1935 that normal regulatory procedure does not fit the needs and requirements in initial food transportation, and this has been verified by experience. Other parts of the economy thought they would be best off with regulations, and maybe they were right insofar as their particular industries were concerned.

The passage of the Motor Carrier Act of 1935 did impose some hardship upon agricultural truckers and indirectly upon farmer-shippers. Interstate agricultural truckers were no longer free to look for a load of manufactured goods for the return journey or to freely engage in trucking of manufactured goods in slack agricultural seasons. Instead, they had to find an authorized carrier who was willing to arrange a load on a lease, usually a trip lease. The agricultural trucker would then get only 65 to 75 percent of the revenue from the load instead of all of it. We accepted this situation and in this way agricultural truckers and farmers have borne some of the cost of our present national transportation policy.

We are proud of the fact that we in agriculture have preserved (reasonable) competition in agricultural trucking. We have not been a party to dividing up the agricultural trucking business into somewhat exclusive domains by commodity, route, or territory. As far as I know, there are no rate bureaus to set rates in areas of truck competition. We have not tried to preempt the natural growth of the agricultural trucking industry for the benefit of a limited few. If a man wants to go into the agricultural trucking industry tomorrow, he can do so. The efficient survive and make money. We are proud that we have preserved this free-enterprise situation which is not only American and fair, but also efficient. We do not believe that more regulation here is required in order to maintain an adequate transportation structure.

For agricultural trucking to remain profitable, adequate, and efficient, the operators must have the right to trip lease in order to avoid empty return runs or empty runs to a faraway area of maturing crops. It is perfectly obvious, too, that our whole economy will profit therefrom-in lowered transportation cost. We saw no justification for the ICC order of May 8, 1951 (under ex parte No. MC-43), completely banning trip leasing. The adverse economic effect it would have in increased cost to farmers and their customers cannot be justified. It would have caused much empty operation, even by authorized carriers, whose certificate was such as to result in unbalanced movements in one direction and who, therefore, had resorted to trip leasing to avoid empty runs and hold costs down.

The ban on trip leasing seemed to us to constitute an attempt by an administrative agency to defeat by indirection the agricultural exemption explicitly provided by Congress. The Supreme Court early in 1953 rendered a decision favorable to the ICC, holding that it did have “implicit" power to ban trip leasing, but Justice Black and Justice Douglas dissented.

In this dissent there is related an incident that reflects, we believe, the attitude of the ICC toward the agricultural exemption provided by the Congress. It is as follows:

"The reason the Commission has adopted a rule (prohibiting trip leasing) so destructive of the agricultural exemption Congress granted is apparent from a colloquy which took place in the district court. The attorney for the Commission was asked if it was wasteful for a truck to go back to Florida empty. With commendable candor he said: 'It does seem uneconomical in requiring it to go back empty, but they can the difficulty comes, I think, in letting it come up in the first place.' In other words, the difficulty comes because Congress agreed to exempt these farm products. This congressionally created difficulty is being cleared up by the Commission. Its new rules against trip leasing will force these agricultural carriers to raise their rates high enough to frustrate purposes underlying the agricultural exemption." [Italics by the National Grange.] ·

Before this time we had felt that the ICC had been trying to interpret the agricultural exemption narrowly. These interpretations were, however, fringe matters for the most part. Without accusing the ICC of any improper motives, it is true that no administrative action could have struck more fatally at the heart of the agricultural exemption than the ban on trip leasing.

Because of the Supreme Court decision, there was need now for the Congress to declare whether the implicit power of the ICC (to ban trip leasing) should be used to destroy the value and meaning of the agricultural exemption

explicitly provided by the Congress. The farm groups immediately appealed to the Congress, a higher authority than even the Supreme Court, when questions of its intent are involved. Hastily the ICC began amending its ban on trip leasing, even before the House Interstate and Foreign Commerce Committee could act. It tried to preserve the right of trip leasing for agricultural truckers. The railroads also showed great eagerness to amend the original ban on trip leasing, in order to overcome the agricultural objections and to preserve the congressional intent of the agricultural exemption. At the same time, however, railroadmen were seeking legislation to abolish the agricultural exemption, or to make it meaningless.

This doubletalk did not impress us.

When we made it quite clear that the ICC modification of its original ban on trip leasing did not restore the agricultural exemption to its full value, and that the trip-leasing restriction was unsound national transportation policy, the House of Representatives passed H. R. 3203 with an overwhelming vote on June 24, 1953. This did not leave enough time for Senate action that year. We all know what happened in 1954.

On November 30, 1953, the ICC, taking cognizance of the House passage of H. R. 3203, promulgated what became known as "the agricultural exception" to the trip-leasing order. We assume that the ICC motive in creating this exception was to protect agricultural trucking, but it failed in this and succeeded in making it more difficult for us to explain the need for our bill. The end result was harassment and confusion, making it more difficult for us.

Trip leasing is an industrywide practice. To destroy the practice in large part and then say, "it can be preserved in part for agriculture" is to mislead people. It is nearly like Siamese twins with a common backbone. Destroy one and soon the other dies, too. Agricultural truckers have slack seasons when farm products are not maturing, and so to survive they engage in trip leasing of industrial products. Private trucking of processed farm products will not attain its proper role in a sound national transportation system if return loads by trip lease are prohibited. Increased private trucking costs for the agricultural processing industry will widen the spread between farmers and consumers. The pending ICC rule requiring a previous load of exempt products to qualify for the right to trip lease, would either break down administratively or enforcement of it would become costly and it would so entwine the argicultural trucking industry in redtape that the value of the agricultural exemption would be lost. Even assuming easy enforcement of the ICC rules, the agricultural exception would still fail to preserve the meaning of the agricultural exemption provided by Congress.

It has been argued that the order of the ICC, dated November 30, 1953, providing the agricultural exception in this trip-lease matter, meets all the needs of agriculture, and that we are insatiable and unreasonable in going as far as S. 898. First of all, we are interested in our entire national transportation policy as citizens of the land. Secondly, the pending ICC trip-lease order will still impair the agricultural exemption. No more reliable authority can be found on this question than the Secretary of Agriculture. In a letter to Senator Bricker, dated May 6, 1954, Secretary Benson said:

"We believe, however, that the Commission's amended order does not restore the flexibility which Congress intended should accompany the exemptions set forth in section 203 (b) (4a) (5) and (6) of the Interstate Commerce Act. We wish, therefore, to express our continuing interest in, and supoprt of, the legislation proposed by H. R. 3203."

S. 898 is identical with H. R. 3203 of the 83d Congress. If the amended ICC trip-lease order did not protect the agricultural exemption a year ago, it still does not protect it, because the ICC order is the same as a year ago.

Unless the Congress acts before the ICC order on trip leasing goes into effect, the impact will soon be felt in agriculture. Agricultural income has fallen considerably since the Korean war, and it is still falling, while most all of the economy has been enjoying rising incomes. Farmers sincerely hope that this Congress will prevent destruction of the efficient, dependable, adequate, and economical truck-transportation system, which has grown up for them under the agricultural exemption provided by Congress 20 years ago.

NATIONAL TRANSPORTATION POLICY

In my testimony a year ago before this committee I presented a detailed explanation of why the trip-lease bill, H. R. 3203, now S. 898, was consistent