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Commissioner MURPHY. So, if I can say this, then I won't interrupt again-in any of the rate cases that you have, your freight is either f.o.b. origin or f.o.b. destination. So if the parties that are having to purchase this transportation and pay it, the poor person makes very few shipments, but the person that is shipping the flour, or shipping the cloth or whatever it might be, whether he be the shipper or the receiver, either one or both of them are represented generally speaking in these cases.
So, they are holding the rates down as well as the Commission participating in proceedings where they feel it is necessary through the Bureau of Enforcement. So, I don't
Commissioner TIERNEY. Our regulations, Senator, our concept of regulation is one that doesn't affect the consumer directly like many other regulatory agencies.
Senator HARTKE. But you say so in your report. Not me, I didn't write this. You wrote this.
Commissioner MURPHY. I didn't write it.
Senator HARTKE. Let me put it in your own terms. I am just asking you what your own words mean. I remember when President Truman used to say when they asked him, he said it means exactly what it says. Recommendation No. 5 says:
Representation to the poor and agency rulemaking. Our principal rulemaking function is in the area of transportation rates.
Since increased rates ultimately are reflected in retail selling prices the poor have an important interest in the proceedings of this type. The interest is now protected, one, by the Commission in its consideration of the reasonableness of proposed increases.
Really I asked what is reasonable? How do you determine reasonable?
Commissioner WALRATH. You have almost approached the last portion of my answer. I was going to be frank with you and say there is no consumer representative in the sense of a housewife appearing before
But the Department of Transportation has been very active in recent cases, purporting to support that role. Looking at it from the broad consumer viewpoint they have been very effective in some of the cases they have participated in.
Senator HARTKE. How many cases has the Department of Transportation intervened in?
Commissioner WALRATH. In the general increase motor cases last year, I think they were in every one I recall.
Senator HARTKE. As an active participant?
Commissioner WALRATH. Yes, indeed. And in one instance at least, the Middle Atlantic case
Senator HARTKE. Can we have how many?
Commissioner WALRATH. I can get it for you. I can tell you approximately now. I can tell you exactly tomorrow. About half a dozen. That is nationwide, sir.
Senator HARTKE. Of all the cases before the ICC, half a dozen rate cases?
Commissioner HARDIN. No; those are general.
Senator HARTKE. How
many cases? Commissioner WALRATH. I am talking about general increase cases.
Senator HARTKE. All right. You will get that for us tomorrow. You can have one of those good staff members tonight prepare a statement on that.
Commissioner WALRATH. You asked how we determine the reasonableness of rates in the interest of the consuming public.
I think in the free enterprise system we have to approach it first on a cost basis. What does it cost in an efficient operation to render the service? I mentioned earlier that more recently we have placed a heavy burden of proof upon proponents of rate changes that affect broad sections of the public.
Our general rate increase cases require more evidence than we have had in years before because we are conscious of the fact that rate levels affect consumer prices. One illustration and perhaps you have a further question-very recently as doubtless you have read the National Association of Motor Bus Operators filed for a general increase.
It was nationwide in scope, but it did not include all motor bus operators. It included those who were members of the NAMBO. Now, it was met with very few protests. Conscious of the fact that we had no public representation in that proceeding and bus transportation seemed to us to affect the poor people, the lower income people, we instituted a nationwide investigation and brought in all of the bus companies including those who were not members of NAMBO and made the investigation nationwide.
Secondly, although it had never been done before, in the interest of the consuming public, the little individual who takes a bus ride, we placed on the carriers a burden of proof that they would not otherwise have had to assume.
We told them precisely what type of information they had to provide and gave them a reasonable time in which to provide it, to file it, and let it be examined.
We are prepared, if we need to, to ask our Bureau of Enforcement to get in and help clarify that record. We hope we are going to get sufficient information, based on what we required. I would be glad, if you like, to provide for the record a copy of the order we issued in that case. There we took a direct and immediate interest in the interests of the consumer, the purchaser.
Senator HARTKE. I will be glad to incorporate that by reference. I am more interested, however, in what the Department of Transportation really did in these cases when it intervened, how they intervened, and how they really represented the interests of the consumer.
After all, I am not just going to say because the Department of Transportation intervened that they necessarily represent the interests of the consumer.
Commissioner WALRATH. No, I didn't mean to mislead you into believing they came in to represent the housewife as such. They took the broad approach of demanding strict proof of the reasonableness of the proposed increase.
Senator HARTKE. In what terms? Reasonableness to the shipper, to the carrier?
Commissioner WALRATH. Well, they were opposing it in effect. The Department of Agriculture is active in our cases, too. And, of course, that directly affects the cost of food production.
Senator HARTKE. Commissioner Stafford ?
Mr. STAFFORD. I was going to mention the Department of Agriculture has gotten into one of the cases on the rates.
Commissioner WALRATH. Oh, many of them.
Commissioner WALRATH. And General Services Administration. But the Senator asked specifically what the Department of Transportation did. They protested these increases; among other things they urged the trend toward inflation, which I mentioned earlier this morning. Secondly, that increased technology and increased volume should enable the carriers to absorb labor and material cost increases. And they challenged the carriers to prove not only their operating ratios, but a rate of return on investment, rate of return on equity. And they raised these issues which were relatively new in general increase motor cases for the first time.
Senator HARTKE. I want to come back to the rate increases. I will give you a little hint; tomorrow I am going to ask this question, but I am not going to ask it tonight. The question is: just how many times did the Interstate Commerce Commission on its own initiate a rate study? Don't answer that today, because I don't want to get into that today. I just want to leave that with you on the rate cases and this whole field.
On page 14, the report refers to loss and damage claims. What is the extent of the Commission's power to reduce loss and damage claims?
Commissioner BURKE. The extent of the power, you say?
Senator HARTKE. What is the power to reduce loss and damage claims. In other words, what can you do on that? Do you have any power on this at all, specific power?
Commissioner BURKE. Section 20(11), I think, covers it.
Senator HARTKE. Do you believe that generally carriers are handling these cases satisfactorily!
Commissioner BURKE. Well, not with the number of claims there are. I think that is one of the big troubles in household movers, that the claims aren't being handled properly. But the Commission's authority, as I understand it, is only to the effect that we can insist that the carriers carry insurance but we can't adjudicate claims. If there is a dispute, it is usually a dispute between the insurance company and the shipper. And they argue it out and if they don't come to any kind of terms, there is nothing we can do to force the carrier to pay a claim which he says is unjust. Or that he didn't pack it and it was due to poor packaging or some other reason. The result is they go to court. And I believe, and others believe too, that maybe if there was a simplified procedure, that the Commission could be given the authority to set up some kind of a small claims operation. It might take manpower, but I think it would help to adjudicate some of these claims.
Senator HARTKE. We just completed hearings on the reasonable attorney fees legislation. And the shippers almost to a man came in and complained, all of them complained they were not being treated fairly, almost without any regard to what type of shipment it was.
Have you given any consideration or why haven't you given any consideration to holding hearings as to why there has been such an abundance of claims?
Commissioner BURKE. Abundance of claims for loss or damage?
Senator HARTKE. No, why the abundance of complaints, about the fact that the settlement didn't appear to them to be one which was fair.
Commissioner BURKE. We are doing that right now in the household goods movers claim, but not on the others.
Senator HARTKE. We were dealing almost exclusively with railroads in the reasonable attorney fees hearings and I think the railroads felt that I was maybe adding an additional expense to them. I am trying to figure out now how you can cut down that expense for them.
Commissioner TIERNEY. The Department of Transportation is now engaged in a study in depth of loss and damage and we are cooperating with them on that study fully.
Senator HARTKE. Now the CAB is conducting such hearings, isn't that true?
Commissioner TIERNEY. I don't know. Senator HARTKE. Is the Traffic World representative here? I will give him a plug:
VOICE. Yes, sir.
Senator HARTKE. All right. I am just quoting from June 14, 1969, issue, Civil Aeronautics Board News, airlines anticipate more work on changes in existing claim and liability practices, and it goes into great detail about the recommendations that are a direct outgrowth of the air cargo workshops held in 1966 under the sponsorship of the CAB. The CAB reacted by suggesting the carriers study claim rule revisions, authorized the carriers to do so, and that they go through a simplification of their claims settlement operation. Did you ever think of doing anything like that?
Commissioner BURKE. Frankly, I don't know. I would like to ask some of the lawyer members, what is the extent of our authority to do it versus CAB's? I don't think we have the authority legally. I think it would be a good idea.
Senator HARTKE. You ought not to write letters saying you have authority if you don't have it. You wrote to my predecessor in this position, Senator Lausche on October 24, 1967, in a letter which says:
While we repeatedly have held to a lack of jurisdiction over claims for loss and damage nevertheless we did have authority to determine the reasonableness and propriety of carriers' published rules and regulations relating to transporta. tion which would cover provisions relative to those claims. That is your claim of authority to do just what I am talking about.
Commissoner BURKE. I dont know what the then chairman meant, to tell the truth.
Senator HARTKE. Who was that?
Commissioner MURPHY. I would like to hear that one more time, Senator.
Senator HARTKE. The then chairman is the one Commissioner that left us, Mr. Tucker. Maybe we can get the staff to tell us what the Commissioner meant.
Commissioner MURPHY. I will tell you, I have had some experience on it, I will give you my views and won't wait for the staff. Under the law as I read it, and I have tried to interpret it over the years, we do not have the collecting agency authority to compel the payment. The bill of lading provides certain conditions and provisions that must be abided by, which is the law as to the loss and damage claims. For example, there is a limitation within the time within which you must file one for loss and damage. I think what was meant by the letter, and I don't even remember it, was the fact that the Commission does have authority and has a responsibility to the public to see that provision and conditions published in the tariffs or classifications to govern the filing of claims and
acknowledgements of it must be within the provisions of the Bill of Lading Act and the Interstate Commerce Commission Act, and failure to abide by those provisions could mean prosecution.
We do have a little leeway in some of these, and I say if we catch à carrier that has taken care of one shipper, or receiver's damage claims, if not a similar situation appears with others, he is in violation of the act for discriminatory practices or giving rebates or concessions to one. When I get a claim of that type, I try to look at all phases of it to see if it seems arbitrary, to find some way to put him right on it. I think that is what was meant by the letter there, that you have the provisions in there and when they publish their provisions, if they find them to be unlawful or improper; but, Senator, if they have to go to court to collect there is certain information the carrier is entitled to, for example, a description of the shipment, the date, the waybill, something to identify it by, and the provision that the shipper won't file a bogus claim.
So those are the things the Commission has and has to look at.
Senator HARTKE. Why is it that in the hearings on reasonable attorney's fees almost all of the testimony was directed at the railroads and
very little at motor carriers? How do you account for that? Commissioner MURPHY. I think perhaps, in my opinionSenator HARTKE. It was a wide open hearing.
Commissioner MURPHY. In my opinion the bill wasn't limited to just claims against the railroads.
Senator HARTKE. No, it was not.
Commissioner MURPHY. While they might have confined it, perhaps in their support they felt it was better to try to get it through that way without advertising it to everybody, I don't know.
Senator HARTKE. Would there be any reason why the Commission itself would be more likely to be advised of complaints against motor carriers than it would against railroad carriers? Commissioner MURPHY. I think it would be the other
My experience has been the motor carrier complaints have far exceeded the complaints against the railroads.
Commissioner BURKE. Mr. Chairman, I think there is a provision in the law that says the carrier must give notice of the claim, acknowledging the claim within 30 days. Then he has 120 days to process it. At the end of the 120 days if the claim is not settled or something, disposed of, then he must make a status report every 30 days. That is about the only jurisdiction I can see in the act that we have. I studied this a little.
Senator HARTKE. Would it be possible or do you think it is feasible or desirable to have a public counsel to represent the consumer in various cases before the Interstate Commerce Commission, who would