Mr. TUCKER. The Chairman is the executive head of the Commission. He is elected by the Commission for a term of 1 calendar year. The Chairman is assigned the general executive responsibility for the overall management of the Commission. He is correspondent and spokesman for the Commission in all matters that require an official expression of the Commission.

I might say that the chairmanship has an historical aspect, Mr. Chairman, of working closely with all members of the Commission on all policy matters irrespective of the delegations expressly contained in Commission minutes. The Legislative and Public Information Offices are included in the Chairman's immediate staff.

The Vice Chairman works closely with the Chairman and serves as Acting Chairman in his absence. In addition, our six regulatory bureaus which I will describe later report to the Chairman through the Vice Chairman. The Vice Chairman, as in the case of the Chairman, is selected by the Commission for a 1-year term.

The entire Commission decides only the most important Commission cases, usually those involving issues of general transportation importance. However, under the act, the Commission is permitted to organize its memberships into divisions of not less than three commissioners each.

Currently the Commission maintains three divisions known respectively as Division 1, 2, and 3, each of which is composed of three commissioners and assigned a specific area of decisional responsibility.

Division 1 deals with operating rights; Division 2 with rates, tariffs and valuation; and Division 3 with finance, safety, and service. Each commissioner, other than the Chairman and Vice Chairman, is regularly assigned to one of the three divisions and is given opinion writing responsibility for cases submitted to a Division or the entire Commission for decision.

The staff organization is comprised of 10 major bureaus and offices. These include the Office of the Managing Director which is responsible for day-to-day administration and management of the Commission's staff operations; the Office of Proceedings which is responsible for processing all of our formal proceedings arising or initiated under the Interstate Commerce and related acts that we administer; the Office of the General Counsel which is responsible for defending the Commission's decision in the courts, and advising the Commission generally in legal issues; the Office of the Secretary which is responsible for various ministerial services; and six regulatory bureaus, as I have mentioned, each of which performs functions of a specialized and technical nature primarily in the areas of formulating, interpreting and policing our rules, as well as performing economic research, analytical, and other services in support of the Commission's decisional activities.

Our field forces currently constitute approximately one-third of our total staff. The Commission's 88 field offices are grouped into seven regions, each of which is headed by a regional manager who is responsible for management of all Commission activities within his region. Technical phases of the fieldwork are carried out under the supervision of technical program directors assigned to each of the regions.

The Commission's present organizational structure largely evolved from a series of organizational changes that began in 1961. The organization that I have previously described is that in effect at the present time.

However, as I indicated to you before, Mr. Chairman, with the establishment of the Department of Transportation certain of our functions (primarily safety functions) and approximately 17 percent of our staff will be transferred to the new Department of Transportation.

The principal organizational elements of the Commission being transferred intact to the new Department are identified in the organizational chart.

In the remainder of my statement I would like to touch briefly on some of the policy problems that have been and are a continuing challenge to the Interstate Commerce Commission.

First and foremost is a most immediate and serious problem, that of small shipments. The Commission is very much concerned here with improving the transportation system over which it has jurisdiction. One problem which we intend to study intensively and in depth during 1967 is the transportation of small shipments.

The number of informal shipper complaints about the deterioration of service for the movement of small shipments has been increasing sharply in the past year or two. The carriers, too, are unhappy about the situation, complaining that there is no profit in small shipment transportation.

Whether the root of the problem lies in carrier practices, the rate structure, or somewhere else, we hope and we intend to find solutions. A special planning committee is already at work on this matter.

Closely associated with the small shipment problem is the matter of motor carrier joint rates and through routes. Shippers need motor carrier service between widely scattered points, and must rely to a great extent upon the coordinated services of two or more carriers for the movement of any given shipment.

The Commission now has no power to compel motor carriers to establish through routes and to publish joint rates, although it does have this power with respect to railroads and water carriers. Refusals on the part of motor carriers, which we are running into every day and which are increasing, to handle shipments originating on the lines of other carriers are being brought to our attention with increasing frequency.

We are convinced that if adequate motor service is to be made available to the Nation's small businesses, we must be in a position to require carriers to enter into through route arrangements where there is a public need for the service. We have requested legislation along these lines before, and we are doing so again this year, Mr. Chairman, with increased advocacy.

I might suggest that we are mentioning this morning in our statement one or two of the legislative proposals, particularly the through routes and joint rate proposals, not all of our proposals that are being processed with the committee, and we wouldn't want to deemphasize any of the others that we don't mention this morning, Mr. Chairman, specifically.

On rail passenger service, the Commission also is considering the matter of preserving, within the area, of course, of our own regulatory and adjudicatory responsibilities, essential railroad passenger service. Of particular concern to us are the present statutory provisions relating to the discontinuance of passenger trains.

A railroad proposing a discontinuance must give the Commission at least 30 days' notice, and not less than 10 days before the effective date of the discontinuance the Commission must decide whether an investigation is warranted. We then can require the railroad to continue operations for a 4-month period.

In this time, the Commission must decide whether the service should be continued for a period up to 1 year or discontinued. In proposals involving the elimination of a railroad's entire passenger operations, such as the New Haven case of a year or so ago, or perhaps a large segment of the railroad carrier's operations, we are faced, Mr. Chairman, with insufficient time under the present statute to hear public and railroad witnesses and to make a truly informed decision in this 4-month period that the present law provides for.

The Commission's jurisdiction in this area, including the 4-month time limit, was added to the Interstate Commerce Act in 1958, when the general railroad financial picture was not nearly so bright as it is today, when State action had prevented the discontinuance of many unprofitable trains, and when there was little evidence of the desire to abandon or restructure all service.

Today the situation has changed. We think the time has come to take another look at the train discontinuance procedures, and we now are considering a specific legislative recommendation in this area.

The rail merger picture is far from complete. Extensive proposals to restructure the rail system in the West are now under active consideration. A number of vital aspects in the eastern rail situation are still pending.

Taken together, these proposals involve nearly all of the major railroads in the United States. The ultimate disposition of these cases will therefore determine the structure of the rail system of this country for years to come.

In this area the challenge also includes matters of procedure as well as substance. Merger proposals have been generated, in a large part, by the railroads to meet changing competitive conditions in the transportation industry and to utilize technological advances more fully. Such proposals, soundly conceived and meeting statutory requirements, deserve expeditious handling. It is critical that advanced merger handling techniques be devised to strike a proper balance between the parties' rights to present their evidence and their concomitant right to a determination within a reasonable time.

What we want to achieve always is the development of a more complete record in a shorter period of time. Certain changes in the Commission's administrative procedures have been successful, such as the assignment of major cases during the initial stages to individual Commissioners for administrative handling.

Wider use of prehearing conference procedures, the submission of evidence in written form in advance of oral hearing, and the encouragement of stipulations among the parties are all needed to reduce the decisional time for these cases.

The Commission cannot accomplish this alono and of necessity an increased burden will be placed on the parties to assist in expediting these proceedings.

The next problem area, Mr. Chairman, is the transportation by agricultural cooperatives. A strong prosperous common carrier is the backbone of this country's transport system. Regulated common carriers, charging rates which have been found to be just and reasonable, providing services which have been found to be required by the public convenience and necessity, and required by law to handle all the traffic tendered to them, constantly face competition from those whose operations, for one reason or another, are exempt from the Commission's economic regulation.

One such group-the agricultural cooperative has recently achieved a substantial victory in the courts that enabled it to become a serious competitive threat to regulated carriers. It has been held that an agricultural cooperative may transport commodities having no relation to farming activities from persons who are not farmers to persons who are not farmers, so long as the transportation serves financially to support the cooperative's farm-related activities.

Thus an agricultural cooperative, after transporting its members' products in one direction, can use its vehicles for any other service whatever on the return haul.

We believe that this poses a serious threat to common carriage in all modes. That agricultural cooperatives will attract significant volumes of traffic is indicated from the fact that the Department of Defense has announced its intention of tendering shipments to them.

We already have submitted for your consideration a legislative recommendation which would require that exempt motor transportation performed by agricultural cooperatives for nonmembers be limited to the hauling of farm related commodities.

On the freight car shortage situation, we still have a continuing critical national problem, Mr. Chairman. The situation today is a vast improvement over the same period a year ago.

However, the predictions of heavy grain shipments in the next few months coupled with the drastic decline in equipment orders by the railroads are very ominous signs.

As a result of a recently enacted statute (Public Law 89-340), the Commission has authority to prescribe "incentive per diem" charges which, it is hoped, will effectively stimulate individual railroads to build and maintain their fair share of the freight car fleet required to meet the demands of commerce and the national defense.

Although the Commission is acting expeditiously, it is not realistic to expect that implementation of its authority under this statute will immediately solve the problem.

Accordingly, again this year we will carry on maximum regulatory effort through the issuance of car service orders which affect the practices of shippers and railroads, and car distribution directions by which we attempt to bring about an equitable distribution of available cars. Our field force, which has been of great value in this area, has been reduced by 83 positions as a result of the transfer of the Commission's safety responsibilities to the Department of Transportation.

77-336-67