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The only other items of major consequence are the amounts which have been added for the promotions under the Ramspeck bill. I think they gave us two additional inspectors for the signal safety work, and that is the total addition to our force except they say that they have also given us five additional safety inspectors, but we have got to take care of that out of lapses, we will not get any additional money for it.

Is there anything else that you think ought to be called to the attention of the committee in respect to particular items, Mr. Secretary?

INCREASE REQUESTED IN LIMITATION ON PERSONNEL SERVICES FOR BUREAU OF LOCOMOTIVE INSPECTIONS

Mr. BARTEL. There is only one thing in connection with locomotive inspection. They reduced the amount that we can spend in Washington; and by making these administrative promotions under the Ramspeck bill it will exceed the amount of the District of Columbia limitation.

Mr. WOODRUM. What is the limitation to be, in your judgment, Mr. Bartel?

As of

Mr. BARTEL. I think I have referred to it in my statement. the year 1943, during the fiscal year, assuming that all positions will be filled, as we anticipate that they will, the pay roll will be $71,915. At the present time, the District of Columbia limitation is $71,450, and the Budget have reduced it to $70,700, so that it should be increased at least to $71,915 in order to take care of these administrative promotions.

BUREAU OF SERVICE APPROPRIATION

Mr. EASTMAN. The only other thing that I care to speak about is the Bureau of Service, where we have been given a national-defense appropriation by the Bureau of the Budget in the sum of $220,000. We had an appropriation during the current year of $110,000 for that purpose.

Mr. WOOD. It is $238,165.

Mr. EASTMAN. It is $238,165.

Mr. WOODRUM. Would you say something about that, Mr. Eastman? Mr. EASTMAN. Yes, I will speak very briefly and then ask Colonel Johnson to amplify on that.

When this emergency arose we had only 16 inspectors in the Bureau of Service to cover the entire railroad service of the country. As I have said, there has been a tremendous increase in traffle and a threat of serious congestion ahead, and there may be a need in the future, in the comparatively near future, for the exercise of the emergency powers that we have of laying embargoes, granting priori ties, and that sort of thing.

Mr. WOODRUM. In view of the fact that there have been three declarations of war since these Budget estimates, undoubtedly you will have to have additional funds, I would imagine, in that?

Mr. EASTMAN. Yes. We got from the appropriation we had 24 additional men, making 40 altogether.

Now, under the increase which the Bureau of the Budget proposes, we could add 25 more to that. That would make about 65 for the

country, which is certainly small enough to cover the points of importance which ought to be covered.

Mr. FITZPATRICK. Did you get any money from the national-defense fund?

Mr. EASTMAN. No. I think we got it all from Congress.

REDUCTION IN PASSENGER RATES FOR DEFENSE WORKERS

Mr. HOUSTON. Have you been requested at any time to authorize reduction in passenger rates for defense workers living in an area that has been designated as a defense area, which, however, might be 35 or 40 miles away from where they work?

Mr. EASTMAN. We do not have to authorize reductions. I mean the railroads could go ahead and reduce those rates if they want to, themselves. The only power we have would be to compel a reduction, but we could only do that after a hearing on a proper record.

Mr. HOUSTON. But the railroads could do that, themselves, if they saw fit?

Mr. EASTMAN. They are not held by our orders up to any level. We have set a maximum level, but they can reduce fares below that if they want to, and they have, in the case of soliders and sailors.

Mr. HOUSTON. I had in mind more especially the airplane workers in airplane factories, who are not even living in that immediate vicinity, but who may live from 35 to 40 miles away in a place which has also been designated as a defense area, so that they commute back and forth. They have asked for a reduction, they tell me. Mr. EASTMAN. The railroads could do that, themselves. Mr. FITZPATRICK. You cannot order it, though?

Mr. EASTMAN. We could order it if we heard a complaint at a hearing and got a record which would justify an order.

BUREAU OF SERVICE

INADEQUACY OF ESTIMATE FOR 1943

Mr. WOODRUM. All right, Colonel Johnson, did you want to say something to us?

Mr. JOHNSON. Mr. Chairman and gentlemen, more than a year ago there was much alarm concerning the ability of the railroads to perform their transportation task in the then obvious approaching war situation. This uneasiness was based on the experiences in that respect in the World War. After the World War, almost unlimited authority was by legislation conferred upon the Interstate Commerce Commission in the matter of railroad transportation. To perform its functions and exercise its authority under that legislation, the Bureau of Service was established in the Commission in 1920.

Until July of this year the Bureau had in the United States only 16 field representatives stationed at strategical places. The Commission, realizing the inadequacy of its field forces, submitted an estimate through the Bureau of the Budget for a deficiency appropriation for the balance of this fiscal year. The Bureau of the Budget recommended and the President transmitted to the Congress a deficiency estimate of $220,000. The Congress appropriated $110,000. We have abided by that sum until now, and have a field force of 40 men, having added 24.

As the railroad transportation burden increased, the cooperation between shipper, carrier, and consignee grew into perfection. Hysteria was entirely avoided. Selfishness was absent. The railroads carried their greatest burden in history an early week in October when, with 601,781 less cars, they transported that week, on the basis of the average net ton-miles per car-day, in excess of the former record reached in 1929 smoothly and easily and without complaint. At that time the railroads were performing one and one-third times as much transportation with a car as was performed by a car in 1929. They had reduced the bad-order cars to 4.3, the lowest in history. Now the bad-order cars are reduced to almost 4.0.

When the Russian situation was on the horizon and there was a possibility that our transportation movement would be greatly increased toward the west when Vladivostok was thought of as a port through which Russia would be helped, there was considerable uneasiness engendered in all quarters. The Commission had surveys of the railroad facilities and ports in the West made in preparation for a heavy western movement. Before that emergency developed, it was decided to ship to Russia through the eastern ports. The fall decline in freight movement began to develop. It was thought perhaps we would not experience another transportation crisis by rail before April or May of 1942.

Then suddenly the Japanese situation appears in full force, which means, of course, that there will necessarily be a tremendous transportation problem headed west, and, as American production is tremendously developed, there is no time to perfect the western direction of transportation that heretofore always has flowed eastward. This makes it certain that railroad transportation is going to experience a tremendous burden in supplying our own forces in and around the Pacific.

The $238,000 here requested of Congress was submitted to the Budget before the Japanese situation had developed. I wish very much now that, instead of 40 men in the field, we had 60 or more. We have already transferred many men from key points in the East to the West. I contemplate requesting a deficiency appropriation through the Bureau of the Budget for additional money for the remainder of this year, which means, of course, that a deficiency appropriation will be necessary in addition to this $238,000 for the year 1943. Mr. WOODRUM. You mean before July 1?

Mr. JOHNSON. Yes, sir; and I believe we will have to come back to ask you to increase that $238,000. I wish I had 50, 60, or 75 men today, but you a moment ago sensed the situation-this is the principal war activity of the Commission, and a superlatively important one.

Mr. WOODRUM. Would that situation be helped if this money were made immediately available?

Mr. JOHNSON. It would be helped tremendously. It certainly would

Mr. WOODRUM. This bill will probably pass the House in January. Mr. JOHNSON. So I could begin to draw on that at any time? I had a long conference yesterday afternoon with my Bureau and others, and we wish now we had not tried to live so carefully on the $110,000.

Mr. WOODRUM. Just what do these men do that you say you wish you had 60 men? Just what are their duties, specifically?

Mr. JOHNSON. They go to all the principal railroad centers, study the records every day, and, if there is any one detaining equipment in the least, it is immediately rectified. It would give you great satisfaction to know how quickly they invariably comply.

Mr. WOODRUM. It is for the purpose of expediting transportation? Mr. JOHNSON. Oh, yes, sir. We go through the yards, we see the railroad records as to how quickly they are getting the cars through their yards. That has improved tremendously. You cannot imagine the overburdened task the railroads have performed.

Mr. WOODRUM. Have you asked the Budget for any additional funds on this for the present fiscal year?

Mr. JOHNSON. No, we have not, because we were getting along all right, and I did not expect another bulge until about March or April.

Mr. WOODRUM. Of course you did not, and when you went before the Budget on this you did not have this present situation.

Mr. JOHNSON. No. We were relieved of the Russian situation. It was going east.

Mr. WOODRUM. Why do you not present the matter to the Budget, in the light of the present developments, and see what recommendations they would want to make?

Mr. JOHNSON. You mean as to making this immediately available? Mr. WOODRUM. As to making this immediately available, or additional funds. There will be another deficiency bill coming along. All right, sir. Mr. Wigglesworth, any questions?

Mr. WIGGLESWORTH. No questions.

Mr. JOHNSON. We do not claim all the credit, by far. The railroads themselves have many men in the field.

Mr. WOODRUM. Is there anything else, specifically, Mr. Eastman, you think we ought to know about

Mr. EASTMAN. I think not.

Mr. WOODRUM. Otherwise, your justifications are clear.

STUDIES OF FREIGHT-RATE STRUCTURE OF RAILROADS AND MOTOR CARRIERS

Mr. STARNES. There is one little question, Mr. Chairman. Mr. Eastman, is the Commission making any studies looking toward a more qeuitable freight-rate structure for the country?

Mr. EASTMAN. Yes. I mentioned that briefly in my general statement. We have under way the investigation of practically all the class rates of the country and of the classifications. That applies both to the railroads and to the motor carriers.

Mr. STARNES. It applies to water carriers also?

Mr. EASTMAN. No; not to water carriers.
Mr. STANRES. Just to the motor carriers?

Mr. EASTMAN. Yes; and to the railroads.

Mr. STARNES. There have been a number of adjustments with respect to transportation rates throughout the country during the past few years, which at least makes it more equitable than anything we have had before.

Mr. EASTMAN. Yes.

REGULATION OF RATES OF WATER-CARRIER SERVICE

Mr. STARNES. What have you been doing with reference to water rates, the regulation of water rates, and so forth?

Mr. EASTMAN. We started in our water-carrier regulation last fall. That is to say, the act became effective at that time. As to some provisions, the regulations did not become effective until along about March, as I recall it, but we built up our Bureau of Motor Carriers and enlarged some of the other bureaus of the Commission a little to handle that situation, and they are engaged now principally in the work of determining what certificates and permits should be granted under the so-called grandfather clauses and what exemptions should be made under the various clauses of that bill which exempt certain types of carriers.

Now, so far as the water-carrier service is concerned, that has been greatly depleted by the withdrawals of ships to the foreign trades. The intercoastal boats are not carrying half what they used to carry, because their ships have been taken away, and that also applies to the coastwise operations. There are only one or two lines still operating between north Atlantic ports and the Gulf at the present time, whereas there used to be several.

Mr. STARNES. The things you have mentioned you would consider were the chief problems you had to consider in administering the act with reference to waterways?

Mr. EASTMAN. Waterways. The principal thing right now is determining who has got the right to operate under the law, and how extensive those rights are, and all the details with respect to them, and also what carriers are exempt.

Mr. STARNES. You have not had an opportunity yet, of course, to form any real judgment about how it will affect the question of transportation throughout the country?

Mr. EASTMAN. Why, I do not think that it has had any great effect upon either rates or the service of the water carriers as yet. Of course, we are considering questions with respect to water-carrier rates as they arise, and there have been several of them so far.

Mr. STARNES. I assume you are studying the relationship between water-motor transportation or water-motor-rail transportation as a unified transportation?

Mr. EASTMAN. We have a lot of cases that involve the competitive relation of rates between railroads and motor carriers, and now and then water carriers enter into that picture, too.

Mr. STARNES. I have in mind, of course, the inland waterway systems. I mean the use of the Tennessee and the Ohio, and now, the Tennessee Valley, since that has been opened up and quite a lot of traffic is developing in that area on a joint water-motor haul, and I will now state that they will present to you soon an application for rates on motor-water-rail or water-rail.

Mr. HOUSTON. Has the Missouri River ever become navigable for anything more than a rowboat?

Mr. EASTMAN. Oh, yes; they are running barges up to Kansas City, and soon will have them going to Omaha.

Mr. HOUSTON. How long does it take to go from Kansas City to St. Louis?

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