(4) The Congress, as an emergency measure, created the temporary office of Federal Coordinator of Transportation for a period of 2 years and has seen fit to extend the life of that office for an additional year. Complete reports of the work performed have been transmitted to the Congress. After 3 years' experience with this additional agency with complete reports before it, we believe that Congress is well advised as to whether or not the office should be made permanent.

If in the wisdom of Congress it is decided that the office should be continued permanently, we respectfully suggest the deletion of the provision that the Coordinator may call upon the Commission for the assistance of members of the Commission's staff. While the diversion of employees of the Commission to the service of the Coordinator may have been justified as an emergency action, and while the Commission gladly responded to the arrangement as necessary to meet an emergency, it is our belief that as a permanent arrangement it would result in decreasing the efficiency of the Commission in discharging the responsibilities placed upon it.

(5) The recommendation for legislation providing for dismissal compensation for railroad employees displaced by coordination projects relates to a subject which is not within the scope of any functions which the Congress has hitherto imposed upon us. In our letter of January 23, 1935, transmitting the Coordinator's report for 1934 (H. Doc. 89, 74th Cong., 1st sess.) we stated:

The importance and novelty of the subject are such as to demand wide and careful study and thorough familiarity with wages and working conditions such as we do not possess in our corporate capacity, and could have no present opportunity to obtain without undue delay in transmitting this report. In our current annual report we have recommended:

1. That further statutory provisions be enacted to protect employees from undue financial loss as a consequence of authorized railway abandonments or unifications found to be in the interest of the general public, or otherwise lawfully effected.

Dismissal compensation is one of the measures which has been proposed to, in part at least, meet the above recommendation, and we recommend that it be given consideration by the Congress.

(6) We approve the recommendation that the Congress

enact legislation enabling the Commission to prescribe minimum as well as maximum joint rail-water rates, and to establish through railroad routes where deemed necessary in the public interest regardless of the "short-hauling" of any carrier as set forth in S. 1636 and H. R. 5364 (74th Cong., 1st sess.). In our annual report for 1935 we suggested, at page 97:

2. That the act be amended to include the power to regulate minimum rates of water carriers otherwise within our jurisdiction.

(7) We approve the recommendation that legislation be enacted amending section 4 of Part I, Interstate Commerce Act, by eliminating the so-called equi-distant clause.

(8) In previous reports we have agreed to legislation shortening the statutory periods of limitation with respect to claims against the railroads. Some of the Commissioners now doubt the wisdom or the justice of such legislation. We will undertake, therefore, to give the matter further consideration and bring forward an appropriate recommendation if the results of our investigations indicate a change

to be desirable.

Commissioners McManamy and Lee do not concur in any amendment relating to the fourth section. Commissioner Miller agrees with the Coordinator's recommendations Nos. (3) and (4). Čommissioner Caskie is of the view that if the Commission is to be given broad regulatory authority over domestic water carriers and water terminals or wharfingers in addition to railroads, pipe lines, airmail carriers, and motor carriers, a reorganization of the Commission along such general lines as recommended by the Coordinator, with a permanent Chairman to be elected by the Commission, is necessary in the public interest, and also that the Coordinator's recommendation No. (4) should be approved.

As provided by the statute, we have limited our comments to the recommendations of the Coordinator. They do not extend to the material which he has assembled and which he submits in connection with his recommendations.

Respectfully submitted,

CHARLES D. MAHAFFIE,

Chairman.

REPORT OF THE FEDERAL COORDINATOR OF TRANSPORTA

TION ON TRANSPORTATION LEGISLATION

To the Interstate Commerce Commission:

In accordance with the duty laid upon the Federal Coordinator of Transportation in section 13 of title I of the Emergency Railroad Transportation Act, 1933, the purpose of this report is to submit recommendations for further legislation to improve transportation conditions throughout the country, which the Commission shall transmit with its comments to the President and to the Congress.

Prior reports of similar character have been submitted to the Commission and transmitted by the latter to the President and Congress, as follows:

1. First Report, transmitted on January 20, 1934, and printed as Senate Document No. 119, Seventy-third Congress, second session. 2. Second Report, transmitted on March 10, 1934, and printed as Senate Document No. 152, Seventy-third Congress, second session. 3. Third Report, transmitted on January 23, 1935, and printed as House Document No. 89, Seventy-fourth Congress, first session. Some of the recommendations for legislation made in these reports have been adopted and the laws so recommended are now in force. Others are still under consideration.

It is deemed unnecessary in this report to recount all the facts with respect to transportation conditions which were set forth in the prior reports or to repeat the detailed discussions. A brief and general summary of the situation and of the problems which it presents will suffice.

GENERAL TRANSPORTATION CONDITIONS

Transportation conditions have changed radically since the World War, and they are still in a stage of rapid transformation. This is true throughout the world, but nowhere has there been a greater change than in this country.

Outstanding has been the extraordinary development of intercommunity transport of both persons and property by highway motor vehicle, but there has also been marked development in transport by water, pipe line, and air, and also in the transmission of electric power. A striking feature is the extent to which it is now possible for industries and individuals to provide their own transportation. The private automobile has become the prime means of transporting persons. Large industries can, and often do, carry their own property by motor truck, steamship or barge, or pipe line. Smaller concerns and individuals can, and often do, carry

their own property by motor truck. There is some private transportation, largely of persons, by air.

Highway transportation, in particular, has brought about important changes in industrial and social conditions. It has had much to do with the growth of so-called "hand-to-mouth" buying, and has probably tended to increase short-haul as compared with longhaul transport and spread the production of manufactured goods throughout the country. It is probable, also, that it has materially increased the sum total of labor engaged in transportation, although the number of railroad employees has sharply decreased.1 Certainly it has enormously increased the travel habit of the American people.

The country has gained from these transportation changes. Much service has become quicker, more convenient, or more comfortable, as well as cheaper. But not all of the results have been good, and some of them threaten the future. The problem is to get rid of the evil results and to preserve and multiply the good.

The chief trouble has been that the new conditions have created great waste of one kind or another. The supply of facilities has grown so fast that it has much exceeded the demand, and this has been true, not only of transportation as a whole, but of individual forms of transportation. In consequence, competition has gone beyond normal and wholesome bounds. Carriers have struggled to get or hold business which they could not handle economically. In the pursuit of traffic, rates have often been cut below sound levels, so that carriers have been impoverished. Labor and the public safety have frequently suffered, as well as owners or investors. The immediate advantages to shippers have gone more to big business than to smaller concerns. Instability and uncertainty in rates and charges have developed which, in the long run, hurt shipping interests.

Most carriers have been harassed by these conditions and want to see them corrected. Taking the railroads as typical, the result has been to aggravate the financial effects of the depression, which would have been serious enough in any event. Railroad ability to secure capital funds from private sources has been gravely impaired. It has been necessary to resort to Government loans, and there have been definite limits to these. Many companies have gone into receivership or bankruptcy. Security holders and employees have both suffered greatly. The inability of the railroads to buy the goods which they need has tended to prolong the depression. If they were able to buy all that they ought to have, it would promote prosperity.

Transportation conditions are so serious in their effects on the country that they are of vital concern to the Government. No way has ever been found, anywhere in the world, to secure the best transportation results without some form of Government intervention. In determining what the Government should do, the necessary first step is to have clearly in mind what it is desired to accomplish.

1 One of the present difficulties in studying and dealing with transportation conditions is the lack of any adequate statistics respecting various forms of transportation. Comprehensive statistics of railroad operations are available, and less comprehensive statistics of water, pipe-line, and air operations, but no satisfactory data are available with respect to persons and property carried and labor employed in highway motor vehicle transportation. This situation will be remedied to some considerable extent by the Motor Carrier Act, 1935.