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TUESDAY, JUNE 24, 1969

U.S. SENATE,

COMMITTEE ON COMMERCE,
SUBCOMMITTEE ON SURFACE TRANSPORTATION,

Washington, D.O. The subcommittee met, pursuant to notice, at 10:40 a.m., in room 5110, New Senate Office Building, Senator Vance Hartke (chairman of the subcommittee) presiding.

Present: Senators Hartke, Prouty, Pearson, and Hansen.
Senator HARTKE. Good morning, everyone. Full house.

Good morning, Chairman Brown; good morning, Vice Chairman Stafford, Commissioner Jackson, Commissioner Tierney, Commissioner Murphy, Commissioner Tuggle, Commissioner Hardin, Commissioner Deason, Commissioner Walrath, Commissioner Bush, and Commissioner Burke.

OPENING STATEMENT BY THE CHAIRMAN

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These hearings are a first step in what will be a continuing interest of this subcommittee in insuring that the public's interest in an efficient and economical surface transportation system is being well served by the Interstate Commerce Commission. Every citizen of the United States is affected on a daily basis by the manner in which the ICC regulates those carriers under its jurisdiction.

Transportation costs are reflected in the costs of virtually every item purchased by the consumers of this country. The quality of transportation service enhances or detracts from the quality of every citizen's life.

Congress has a responsibility to the electorate to consider on behalf of the citizenry whether the agencies of the Federal Government are operating in a manner responsive to the best interests of the public.

We would be abdicating our responsibility and contributing to our present transportation problems if we did not find answers to such basic questions as: “Is the system as presently constituted working ?" "If not, what must be done to improve the system?" "Is there a better system?” These questions are not of concern just to citizens who publicly express dissatisfaction. I am convinced that every person in this Nation wants answers to these questions about all the operations of the Government, including agencies such as the ICC.

We intend to carry on a continuing review of Interstate Commerce Commission policies and practices. In this way, the Congress can be of some assistance not only to the public, but also perhaps to the

agency itself.

Staff member assigned to this hearing: A. Daniel O'Neal.

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And with that, we will proceed with Chairman Brown and her statement.

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STATEMENT OF VIRGINIA MAE BROWN, CHAIRMAN, INTERSTATE

COMMERCE COMMISSION Chairman BROWN. Thank you.

Mr. Chairman and members of this committee. On behalf of the Commission I want to express our thanks to the subcommittee for this opportunity to appear before you to discuss the activities of the Commission and the general conduct of its administration of the regulatory laws and policies which Congress has confided in the Commission.

I have an opening statement which I would like to give. And since we have furnished a detailed report on the Commission's activities and affairs previously, why, this statement will be very brief.

Although all matters before the Commission are of concern to every member of the Commission, the volume and complexity of our work necessarily requires a substantial degree of delegation and specialization to individual members of the Commission, either as an individual or as a member of one of our three divisions.

Later in my statement, I will be mentioning some of these delegations in terms of the specific topics set forth in our report to the subcommittee. Following the conclusion of my statement, the Vice Chairman and the Chairman of each of our three divisions will also present a brief statement of their respective areas of responsibility.

We also have a number of key members of our staff present this morning. I will not introduce them at this point. They are, however, available to respond to any question the subcommittee may have.

As previously mentioned, we have furnished the subcommittee with this detailed report on the general state of the Commission and the conduct of its affairs in carrying out the mandate of Congress contained in the national transportation policy and specific provisions of the Interstate Commerce Act and other laws administered by the Commission.

This area is more specifically dealt with in chapter 1 of our report which discusses the overall organization of the Commission and its budgetary and staff resources.

Generally, the Commission has delegated the administrative handling of these and similar matters of the Chairman and the Vice Chairman of the Commission.

The remaining two chapters of our report represent a more detailed discussion of specific phases of the Commission's work.

As mentioned at the beginning of my statement, it may be helpful to the subcommittee for me to go through the list of topics in each chapter and indicate which members of the Commission are primarily responsible for the disposition of matters arising in each specific area.

Chapter II of our report is composed of five major topics, all of which were specifically mentioned in Chairman Hartke's letter to me of May 16, 1969, on these hearings.

1 The report appears in the appendix at p. 264.

Topic A, carrier consolidation and diversification, falls within the responsibilities of the members of Division 3. The Chairman of that Division, Commissioner Tuggle, will indicate the general nature of the Division's work.

Topic B, small shipments, cuts across many different aspects of work. However, because the principal policy problems in this area involve either rates and practices on small shipments or alleged inadequacies of service, the majority of our work in this area is handled by the members of Divisions 1 and 2. The Chairmen of these Divisions, Commissioner Murphy and Commissioner Walrath, will summarize the work of their respective divisions.

Topic C, passenger service, also involves several different areas. Division 3 exercises the principal responsibility for railroad passenger train service, including the administration of section 13a of the act. In addition, a special committee composed of Commissioners Tierney, Tuggle, and Burke has been established to prepare a report for

the Commission on the costs of intercity railroad passenger service. This report was requested by Chairman Magnuson last year and is expected to be transmitted to Congress very soon. Motor carrier passenger service issues involve either Division 1 or Division 2, depending on whether service or rates are involved.

Topic D, intermodal transportation, likewise involves all three Divisions. However, except as issues of mergers or common ownership may be involved, the principal issues in this area involve the work of Division 2.

The major policy issues in Topic E, deregulation, involve all members of the Commission. For the convenience of the subcommittee, I will treat this important policy area as being within the purview of the Chairman of each Division.

Turning to Chapter III we have included three major topics. Although none of these were specifically mentioned in Chairman Hartke's letter, they all involve major and important issues of transportation policy which we feel should be brought to your subcommittee's attention.

In connection with Topic A, household goods carriers, we have very recently instituted two separate rulemaking proceedings in this area in an effort to resolve some of the very serious problems in this area. These and other matters relating to household goods carriers have been administratively handled through my office.

Topic B, motor carrier operating rights problems, is primarily within the jurisdiction of Division 1 while Topic C, general rate increases, is generally within the work of Division 2.

Because of our prior detailed reports and testimony on the rail freight car shortage problem before this subcommittee this topic was not specifically covered in our report. This important area is, however, receiving considerable attention from the Commission and is being handled on a continuing basis by Commissioner Murphy.

In all of these, and other major policy areas as well, I should emphasize that they represent areas of concern to every member of the Commission. Although, as I have mentioned, the volume and complexity of the Commission's work requires a significant amount of delegation and specialization, important matters of policy in all these areas are considered by the entire Commission.

In making these decisions we draw upon the detailed expert knowledge and experience of those members of the Commission and the staff who are familiar with a particular problem on a continuing basis. I am, personally, very appreciative of the interest and knowledge of particular transportation problems that is contributed to our deliberations.

In our report to the subcommittee, we have attempted to show you what we have done to resolve some of the complex regulatory issues in today's transportation. We have also attempted to point out some of the important issues that require increased attention by us or by the Congress.

In the latter area we have specifically invited your attention to the Commission's serious problems with respect to limitations on its staff and budget resources and on its regulatory jurisdiction in such areas as rail passenger service and joint rates and through routes.

In conclusion, we welcome this opportunity to discuss these matters with your subcommittee. We feel it will enable us to present an account of our responsibilities as an agency created by Congress and for us to achieve a better understanding of your views on our activities.

Thank you, Mr. Chairman. This concludes my remarks.
Senator HARTKE. Thank you, Mrs. Brown.
Next is Vice Chairman Stafford.

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STATEMENT OF GEORGE M. STAFFORD, VICE CHAIRMAN,

INTERSTATE COMMERCE COMMISSION

Vice Chairman STAFFORD. Chairman Hartke, Senator Prouty, Senator Pearson, and Senator Hansen. The office of Vice Chairman was created in 1961 for the precise purpose of assisting the Chairman in the overall administration of the agency and at the same time instilling in the Vice Chairman detailed knowledge of our day-to-day business which must be acquired before becoming Chairman. In very practical terms, it is a period of training for the chairmanship.

Thé Vice Chairman has specific administrative duties to oversee our regulatory bureaus. These are, for the record, the Bureaus of Accounts, Economics, Enforcement, Operations, and Traffic. Each Bureau reports to me of their respective operations. Then, too, I conduct a month

, ly meeting with all Directors, the Managing Director, and my personal staff, at which time we discuss general matters which should be known by all Bureaus or problems that may overlap one Bureau to another and on which mutual advice may be needed.

To cite an example of just one aspect of the position, I must authorize all proceedings by the Bureau of Enforcement into the practices of motor carriers, and these run the gamut from unauthorized transportation to the violation of tariffs. Formal action is, of course, preceded by an informal staff investigation. Then a memorandum is sent to me setting forth the matters found during the investigation and a draft order instituting the proceeding which I either approve or disapprove.

Before the office of Vice Chairman was created, the responsibility for the activities of each of the Bureaus rested with a different Commissioner, and this duty was in addition to their membership on a

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