related to numerous statutory proposals regarding uniformity not only in this area, but with respect to taxation locally, that we keep under study. We have a responsibility to react to those types of proposals, and we will review this matter in the legislative committee, sir. Mr. WATKINS. You are familiar with my thinking on this subject. Mr. TUCKER. I certainly am, sir. Mr. WATKINS. In regard to the carriers. Mr. TUCKER, Yes, sir. Mr. WATKINS. Again another question that I direct to motor carriers. The common carrier by motor truck, and I speak of the common carrier who operates a fleet of trucks, is faced with a very serious situation that I am familiar with and have had expressed to me many times. Competition is certainly something that we all welcome in this country, but fair competition, and I find under the rules of the Interstate Commerce Commission that common carriers, naturally which you have no jurisdication over, 95 percent or I think a little better come under the union contracts. Now, we find that this common carrier is faced, from the complaints that I have had made to me, with the very unfair competition of a carrier to which you issue a certificate authorizing its routes and in the course approving its rates in the regular procedure, but we find that this carrier possesses no equipment whatsoever of his own. In order to give the service to the public that he offers, he hires equipment, the power equipment especially, in some instances not the trailers, that is owned by private individuals that are compensated with a percentage value of the gross and which in many, many cases is not fair to the man that has to hire the equipment; for instance, just an idea, 75 percent of the revenue to the man that owns the tractor, and pays his own wages, pays his own maintenance, pays his own gasoline and oil. This certificated carrier who has the rights then places himself in the position of a common carrier who operates his own equipment who subscribes to union contracts, who must pay his employees approximately 13 paid holidays and anywhere from 3 to 4 weeks vacation for his men, which could run $700 to $800 for vacations alone. These legitimate common carriers competing against this operator that you have given a license to use equipment on what I would call simply a gypsy basis. Am I in order, Mr. Chairman? Mr. CHAIRMAN. Go ahead. Mr. WATKINS. I would like to call to your attention that a tremendous injury is being committed to common carriers that supply their own equipment and meet the union contracts of the men, which is part of this country; no argument with this. I have had none. I think it is high time that a study be made of this situation for the simple reason your rate structure is going out the window. The man that holds a certificate and does not have to pay the expenses of a legitimate carrier is just finding it impossible to compete and will go broke if he tries it. I know that it is the intention of this fine Commission to strengthen the transportation not only of motor trucks but every form of transportation that you govern, and I just wonder has any consideration ever been given to this? Has it been called to your attention? Do you know of this evil that I think exists? Mr. TUCKER. Mr. Watkins, let me say that a great proportion of our enforcement cases are directed at the increasing frequency of the illegal lease agreements. We are constantly looking into that area, and I want to assure the Congressman that it has our close attention and the maximum effort of our personnel. In the rate area we are not doing our job if we approve protested rates based on owner operator costs that are not compensatory. Of course we have no jurisdiction with respect to the labor relations aspect that enter in the cost, but in those two areas we are not doing our job if there is unauthorized leasing arrangements and we can't approve rates even though there is an owner operator involved unless, when those rates are protested, we find them compensatory and not discriminatory or otherwise unlawful. Mr. WATKINS. Mr. Chairman, I appreciate your remarks, but I just wonder if I have gotten through to you that due to your regulations you permit this man to operate this way, whether you have given proper recognition of my statement that I made where the evil exists, because I know of one case in particular of one legitimate common carrier that was affected to the extent that it could have caused a closing of the firm due to the granting of a rate to a carrier that I described to you as the owner operator that put a reduced rate in, and which the Commission accepted, cutting the rate that was already in by the common carrier, and you took the cut rate. You accepted the rate. In other words, the carrier that was a legitimate carrier, who was making only in percentage about 1% percent had to take a reduction in his rate due to the Commission deciding that you would have to accept that lower rate from this carrier who did not own his equipment at all. You are making man rich in this country if you do that. You are making individuals rich that are competing against railroads and legitimate carriers. You are actually making millionaires out of some of them. Mr. TUCKER. I just want to assure the Congressman that through my previous answer I wanted to comment on what problems we had and what we were doing. In no sense do I want to suggest that we won't completely review the Congressman's remarks here in the context of our current activities, sir. Mr. WATKINS. I agree with that. I believe you will do it. But in this case it was the Commission decision that you approve a cut rate that wasn't a fair rate. Yes; for this carrier that filed a rate his percentage of profit is tremendous. It has to be because he does not bear the cost of the transportation that he is offering, the real cost, the ownership of the powerplant, the wages of the men, no vacations, no holidays. You cut this rate. This I know. I would be glad to give you the information. Mr. TUCKER. I am not familiar with the case, Mr. Watkins. Mr. WATKINS. I would say, Mr. Chairman, you have been very tolerant of me to give me this much time; but I wish you would make a study of this situation. Mr. TUCKER. Yes, sir; we will. Mr. WATKINS. I think it is something that is very serious, and if it is I know it is in your jurisdiction. I have no question in my mind, but I hope you will make a study and make a report and promptly report to the Chairman and to me. Mr. TUCKER. Yes, sir. Mr. WATKINS. Thank you. I thank you for the time, Mr. Chair man. The CHAIRMAN. I was going to say to you, Mr. Watkins, if you want any specific items answered if you will put it in writing to them we will see that they get it. Mr. WATKINS. Thank you. The CHAIRMAN. Mr. Adams. Mr. ADAMS. Thank you, Mr. Chairman. Mr. Chairman, I think I can be brief and Mr. Bush may want to answer this or any of you gentlemen, please do it whichever way you want. In your hearing of January 4 in which the Burlington filed its motion to discontinue, did you have a stipulation to agree to an increase in per diem rates? Mr. TUCKER. Did we have an agreed Mr. ADAMS. Agreed increase. Mr. TUCKER. No; we had proposed or put forward a proposed increase of $2.50. Mr. ADAMS. Is your present rate then the same one that has been agreed upon between the railroads for a substantial period of time in the past? Mr. TUCKER. Yes; the present per diem rate. Mr. ADAMS. And does this present per diem rate still have the holes in it that it had before; for example, that certain eastern lines were paying less than a dollar a day under the original interim agreements for the holding of cars? Mr. TUCKER. I didn't quite follow that question. Mr. ADAMS. You remember last year when we were discussing this we determined that some areas had differing rates. What is the per diem rate today on holding of cars? Mr. TUCKER. The standard per diem? Mr. ADAMS. Yes. Mr. TUCKER. Let me ask Mr. Pfahler. Mr. PFAHLER. It is about $2.50. Mr. ADAMS. It is someplace between $2 and $3 a day for some 30,000 to 40,000 cars. Mr. PFAHLER. Up to around $12 a day. Mr. ADAMS. Up to $12, but that is for special type cars. In other words, on a $25,000 or $30,000 boxcar, the per diem price is still $2 to $3 a day, isn't it? Mr. PFAHLER. That is correct. Mr. ADAMS. And there are certain of the eastern lines that are under an interim type special agreement that have refused to pay more than a dollar a day, haven't they? Mr. PHAHLER. $2. Mr. ADAMS. Is it $2 now? Mr. PFAHLER. $2. Mr. ADAMS. There aren't any more of the dollar agreements left. Mr. ADAMS. And you didn't have any break in that pattern in the agreement when you finally postponed the interim hearings? Mr. BUSH. No. Mr. ADAMS. All right. On your future permanent per diem rates which you have been discussing, are you prior to that time going to continue your car service orders? Mr. BUSH. Yes, sir; we will. Mr. ADAMS. In other words, they are still presently in effect. Mr. BUSH. Yes; when and as needed. Mr. ADAMS. Would you supply to the committee so that we can have it the percentage of holdings of cars as compared to ownership which were the facts that we discussed, you will remember, about a year ago? Give us the up-to-date percentages. Are the western lines still holding only between 50 and 60 percent of ownership, or has that shifted? Mr. TUCKER. That would shift from time to time. (The information referred to follows:) STATEMENT OF CHAIRMAN WILLIAM H. TUCKER ON PER DIEM RATES To clarify our discussion of the per diem rates paid by railroads for the use of the car of another railroad, the following table of the scale of per diem rates is furnished: These There are five lines which will not pay per diem rates in excess of $2. are the Boston & Maine, the New York, New Haven & Hartford, the Maryland & Pennsylvania, the Long Island, and the New Jersey & New York Railroads. As requested, the percentage of ownership and location of freight cars by regions are shown in the attached table. |