ICC approval for a person to hold the position of officer or director of more than one railroad where the carriers are commonly controlled, the Transportation Association of America supports this portion of

S. 1150.

The other portion would prevent, without specific ICC approval, the holding by different members of the same firm of the position of officer or director of more than one railroad if they are not under common control. The Transportation Association of America opposes this portion of S. 1150. This proposal was reviewed by our cooperative project, and its user, investor, and railroad panels all opposed it; the other five panels indicated they did not object to the Transportation Association of America's taking a negative position. Reasons for such opposition are that it is too restrictive in nature and that its need has not been shown.

S. 1152, which would place certain restrictions on the use of ICC investigators in court suits involving damage claims, is supported by the Transportation Association of America.

S. 1728, which is identical to the first part of section 4 of S. 1727, with corrections, is supported by the Transporation Association of America.

S. 1732 would make ICC-regulated motor carriers and freight forwarders subject to reparation provisions similar to those now applicable to the railroads. As explained in our testimony covering sections 5 and 6 of S. 1727, the Transportation Association of America favors the passage of modified reparation provisions as set forth therein.

Senator LAUSCHE. How do the provisions of the House bill that has been passed relate themselves to your views?

Mr. GALASPIE. The House bill takes the modified version.
Senator LAUSCHE. Your view?

Mr. GALASPIE. Yes, sir.

Mr. HAMMOND. One hundred percent.

Mr. GALASPIE. S. 1733, as the Transportation Association of America views it, can be separated into two parts. One portion would extend civil forfeiture procedures to illegal for-hire operations and at the same time establish a level of fines for such violations double those now applicable under such procedures. While the Transportation Association of America supported such a proposal last year, it now favors the adoption of section 3 of S. 1727-as it applies to economic violations-because of the primary business test proviso.

The other portion of S. 1733 would extend civil forfeiture procedures to motor carrier safety violations. As indicated before, the Transportation Association of America does not have a position on this proposal.

In summary, we should also like to urge that the subcommittee take favorable action at the earliest possible date on the following bills, with modifications as proposed: Š. 1727, S. 1143, S. 1145, S. 1146, and S. 1152. We say this for several reasons. The economic enforcement provisions of S. 1727 will help considerably in solving a very troublesome problem in the transportation field today-the illegal for-hire trucking problem. This bill would also fill a gap that now exists with respect to motor carrier and freight forwarder reparations. The other bills would relieve the ICC of certain responsibilities no longer considered necessary in the public interest.

Senator LAUSCHE. These panels which studied the various bills which you have discussed are representative of the various segments of the economy that have an interest in this general subject?

Mr. GALASPIE. Yes, sir. The user panel, for example, has, I believe, 83 members, and there is a broad representation from all types of industry.

For example, I am a member of the aluminum industry. We have interests in steel. We have interests in the grain, the farm industry. We have petroleum interests. The president of the private carrier council is a member of the user panel, and he served on my subcommittee, incidentally, when we were considering the provisos we spoke of here.

We have a very broad representation from the entire users of transportation.

In your highway panel you have the presidents or vice presidents of your major motor carriers serving as members on the highway panel, as well as the officials of the American Trucking Associations.

With the railroad panel you have the officials of the AAR as well as presidents of numerous large railroads operating throughout the

Nation.

The same thing can be said right down the line of each panel. In your investors you have the presidents or vice presidents of various investment houses, and so forth.

So we have a broad representation in these various panels, sir. Senator LAUSCHE. The user panel, made up of 83 members, would, of course, be interested, I suppose, primarily in low rates consistent with an assurance that the transportation system of our country will be sound?

Mr. GALASPIE. We have a primary interest in sound transportation, in making certain that our transportation system remains intact and under private ownership. Naturally we are interested as shippers and users of transportation to obtain the lowest rates possible with those

conditions.

Senator LAUSCHE. Was the user panel made up of diverse shippers engaged in different types of business?

Mr. GALASPIE. Yes, sir. As I indicated before, we have numerous industries represented in our user panel. Mr. Hammond, being president of the association, could possibly fill you in better than I. But I know from personal experience that we have shippers represented from the steel industry, the farm industry, the petroleum industry, right on down the line.

Senator LAUSCHE. Has it been the purpose of your association to set up an agency that would give objective and impartial consideration to these matters of transportation and charges and regulations? Mr. HAMMOND. That is correct. I think I might add this one point here of interest. The user panel, of course, is the key panel of all eight, because they represent possibly the closest to being the general public. They are also the ones that pay the bills. And we have to compromise out some of the differences at times, such as on the reparations sections.

It was here that the users were the key members of all 8 panels300 men sitting on these eight panels. It was difficult for the users to accept the modified views or position that was taken, but they

finally realized if there was going to be any reparation legislation at all they would have to accept the compromise views expressed here in this legislation today.

Mr. GALASPIE. I can assure you, Mr. Chairman, it would be much simpler for me as a shipper to go before the ICC with a complaint alleging unreasonableness and attempt to obtain an order for reparation from the Interstate Commerce Commission.

But realizing the facts of life, if you want to put it that way, and the trouble that the motor carriers are placed under, the multitude of small complaints that could be filed-since the motor carriers do handle, I believe I mentioned 97 percent of their shipments in the LTL category-they could be deluged with numerous complaints. And all you have to do is file a piece of paper with the ICC and the motor carrier would have to file an answer and so forth, whereas by taking it to court it would have a deterring effect upon shippers filing small petty claims, you might say, for reparation.

So the user panel, realizing that, finally came to the view that in order to get a reparation feature in we should and must adopt a modified version.

Senator LAUSCHE. Thank very much.

Mr. GALASPIE. Thank you, Mr. Chairman.

Senator LAUSCHE. The next witness will be James F. Pinkney, Chief Counsel, Public Affairs, American Trucking Associations, Inc. Do you have anybody with you?

STATEMENT OF JAMES F. PINKNEY, CHIEF COUNSEL, PUBLIC AFFAIRS, AMERICAN TRUCKING ASSOCIATIONS, INC.

Mr. PINKNEY. Mr. Chairman, I do have some associates in the room. I will call on them if I find it necessary, if I may, sir. Senator LAUSCHE. All right.

Mr. PINKNEY. Mr. Chairman, my name is James F. Pinkney. I appear for the American Trucking Associations, Inc., 1616 P Street NW, Washington, D.C.

Of the several bills under consideration here today, the trucking industry is primarily interested in S. 1727, S. 1147, S. 1728, S. 1731, S. 1732 and S. 1733.

At hearings before this subcommittee in March of 1961 and in February of 1962 (on proposed ways of improving the regulated transportation industry and on S. 2560, respectively) a record was made of the need for legislation such as that contained in bills before you today.

The preceding witness for the Transportation Association of America has also brought out the facts bearing on the problem. Therefore, I shall devote my testimony to a discussion of the specific provisions of the bills themselves.

As to S. 1727 first, S. 1727 first provides for cooperative agreements between the Federal and State Governments to enforce economic and safety laws of the United States concerning highway transportation. This will encourage and permit the exchange of information between the Interstate Commerce Commission and State regulatory bodies in order to bring about better enforcement of the Interstate Commerce Act. We favor this proposal.

Section 2 of S. 1727 provides in effect that a State may require the registration of ICC interstate certificates or permits as a condition to the operations of interstate carriers within that State provided the State conforms its registration law to uniform standards fixed by the States and the ICC. If these standards are met, the State registration law will not be considered to constitute an undue burden on interstate commerce.

Several years ago the executive committee of the American Trucking Associations took the position that the diverse State filing requirements constituted such an unreasonable burden on interstate commerce that the Federal Goverment should prohibit States from imposing them. In furtherance of this policy, American Trucking Associations officially supported H.R. 5175, which was introduced in the House on March 3, 1959, by Congressman Huddleston, to accomplish that aim. But subsequently it became more and more apparent that a major threat from the increase in unlawful carriage faced the regulated carriers, particularly rail and motor common carriers. The Interstate Commerce Commission, with its necessarily limited manpower and necessarily slow enforcement procedures, was then, as now, having difficulty in adequately coping with the situation. It became apparent that State enforcement machinery should be utilized to the greatest extent practicable.

The experience of some of the States, notably Florida and Arkansas, indicated that an effective enforcement device could be created by State requirements for the registration of ICC certificates and permits. By this method, properly authorized interstate carriers can readily be identified, thus focusing a spotlight on those carriers not so identified who might be engaging in illegal interstate operations.

Under such State requirements, the State can arrest and fine such carriers for operating within the State without having on file a properly registered ICC certificate or permit. Thus, the illegal operator can be punished for violation of a State law and this in turn, of course, reinforces the Interstate Commerce Act.

At the same time ATA continued to recognize that because of the lack of uniformity in State filing requirements a severe burden was being, and could increasingly be, imposed upon the trucking industry, and ATA felt that this definitely should be prevented.

Considering what we believed to be the more urgent need for effective action in the enforcement field to deal with the paramount problem of illegal operations, ATA, after much consideration, withdrew its endorsement of H.R. 5175 and gave its support to the State registration of certificates and permits approach.

However, as I have just indicated, it believes that if the States are to continue to require interstate carriers to register or file, such registration and filing requirements must be uniform.

In marshaling all of the forces available in an attempt to foster and protect the national transportation system, it seems the better part of wisdom to encourage these efforts by our State officials. In order to insure use of this weapon to its fullest, without unduly burdening those lawfully engaged in interstate motor transportation, it is necessary to guard against the redtape of multiple filings of different information in a number of States.

Accordingly, section 2 of S. 1727, which we now support, constitutes a recognition or authorization by the Federal Government of the States' right to impose filing requirements on interstate carriers and then insures that they will be uniform if the States do impose them. It also provides, as I have indicated before, that the interested carriers and the State regulatory bodies participate in the promulgation of uniform standards.

I understand that the National Association of Motor Bus Owners will offer a technical amendment to this section so as to recognize self-insurance under rules and regulations of the Commission as well as regular insurance. It will be proposed to amend (c) in line 3, page 3, to read: "filing and maintaining evidence of currently effective insurance or qualifications as a self-insurer under rules and regulations of the Commission, and". We concur.

Senator LAUSCHE. In substance, do I understand that there was a period in which your association opposed what is now sought to be done and you did so because you thought it was an excessive burden on carriers?

Mr. PINKNEY. Yes, sir.

Senator LAUSCHE. But your views have changed in face of the demonstration that was made in the several States that a serviceable and helpful job can be done in driving illegal operators out of business? Is that your recommendation? Is that correct?

Mr. PINKNEY. That is correct.

Senator LAUSCHE. And with regard to the insurance that there shall be uniformity of State regulation, you feel that is achieved by the provisions of this bill?

Mr. PINKNEY. Yes, sir.

Senator LAUSCHE. All right. You may proceed.

Mr. PINKNEY. I might say with respect to the technical amendment I just mentioned, Mr. Chairman, I believe that had the concurrence of all interested parties.

Senator LAUSCHE. And that technical amendment is to insert into the bill language that will qualify self-insurers just as it qualifies those carriers that are insured by coverage of private insurance companies?

Mr. PINKNEY. Yes, sir. That is correct. By "self-insurance" here I mean self-insurance though under the rules and regulations of the Commission, which are very severe.

Senator LAUSCHE. All right.

Mr. PINKNEY. Section 3 of S. 1727, dealing with civil forfeiture actions, would increase the power of the ICC to proceed in civil actions against illegal operations conducted by motor carriers. The fines proposed are substantial. At present there is provision for such civil forfeiture actions in administrative matters.

We believe the change to include civil action against illegal operations will give the Commission an added and valuable tool needed to control such operations. However, we oppose the inclusion in this section of safety rules and regulations..

Our reasons for this opposition to the inclusion of the safety rules can be stated quickly. The Commission's rules and regulations number in the hundreds and include all local traffic rules, and dozens of comparatively minor infractions such as burned out side marker lights.