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Now I offer to supply for the record a copy of the order that we entered in that case on our own motion, you might say, in the absence of protest and in the absence of consumer direct representation.
I also said, I say again, that it is the sense of the Commission that if the bus operators of the country in response to that order do not furnish an adequate record upon which we can base a judgment, in the interest of the consumer we will direct our Bureau of Enforcement to become a party to that case and actively participate. In that sense representing the
Senator HARTKE. Now that is one case. But as a general rule in these cases do
you have the staff present the consumer side of the case? Commissioner WALRATHI. Well, in this sense we do, yes, sir. Our cost section
Senator HARTKE. Your what? Commissioner WALRATH. Our cost section. Senator HARTKE. Cost section? Commissioner WALRATH. Yes, our cost-finding section in the Bureau of Accounts is actively engaged, and has been for years, in continuing studies both of platform costs, of line haul costs, and of rail terminal costs and rail line haul costs from region to region. And to the extent that our resources permit
Senator HARTKE. All the emphasis is placed on the side of trying to analyze costs; that is to say, the economies as related to the carrier. What I am asking you is: Do you have a public counsel, or a consumer's counsel? They have such a counsel in the CAB, do they not?
Commissioner WALRATH. They do in the CAB, I am told.
Senator HARTKE. And they do in the Federal Maritime Commission?
Commissioner WALRATH. Yes, and in that sense we do not.
Senator HARTKE. Do you feel they make a mistake in this regard or is this something you should do? If they have seen fit to do it do you think they are wrong? I mean if they are wrong I just want to know. This Commerce Committee still has jurisdiction over those other agencies. I mean I might present the other side of the argument to them and ask why they are wasting the Government's money in having this type of counsel, a public counsel, when the Interstate Commerce Commission gets along without one. I think their answer will be that their primary interest is in the public and they want to make sure the consumer is protected. I am asking you to give me an explanation which you think makes commonsense.
Commissioner WALRATH. Yes, sir. No. 1, Mr. Chairman, I would not presume to criticize their having such counsel. That may be exactly what they need. We have not felt the need of it and have not recommended or reorganized to that extent. We have a means of placing in a sense a public counsel in the record when the occasion requires it.
Senator HARTKE. How many times have you done that?
Commissioner WALRATH. Oh, quite recently in a major matter such as--I think I am correct, and I will ask Commissioner Tuggle to correct me if I am wrong—in the Penn Central case I believe our Bureau of Enforcement was active in it and not only participated, but I believe offered some expert testimony.
Commissioner TUGGLE. Right.
Commissioner WALRATH. We have the power and we exercise it when the public right is involved—and that is what I mentioned a moment ago in the bus case-in order to develop the consumer's interest in that case. If the carriers fail to give us the complete story so that the public and the consumer are protected, at any point in that case we can and will have our Bureau of Enforcement go in and do that. In that sense the Bureau representative is a public counsel.
I want to come back, if you will let me, to the cost feature and why I think that is in the public interest before I finish the answer.
Senator HARTKE. Yes, all right, go right ahead.
Commissioner WALRATH. As I said yesterday briefly, in a free enterprise system we think it not in the public interest to require a carrier, any carrier or group of carriers to operate at bankruptcy rates. Service is important if we are to maintain a viable transportation system. So we look first to the cost. Now we can't and are unwilling to depend upon carrier costs presented to us and simply accept them. And what I was trying to explain is the Commission for a number of years now has had its own cost analysis and cost studies going in all of the regions of the country that we can possibly cover, and in the rail area platform studies and line haul cost studies so that we have some measure to compare with the figures that the carriers present in rate cases.
Senator HARTKE. All right now. Let's come back specifically and see whether or not the record really is that good. I th nk this is one of the disturbing features of what goes on. Now Ex parte 256 and 259 are two of the largest railway cases you have had; right?
Commissioner WALRATH. Yes, sir.
Senator HARTKE. Now I am going to read from the conclusion of the brief on behalf of the intervening plaintiff, the Secretary of Agriculture of the United States. Reading from their conclusion, “From the outset of the proceeding counsel and witness for the Secretary”—that means the Secretary of Agriculture—"urged the Commission to employ its staff to independently analyze the cost submission of the railroads." Now this is what I am talking about, independent analysis as contrasted to that which was presented by the formal parties. “On September 5, 1968, prior to the opening of the hearing, counsel for the Secretary formally moved that
the Commission's Bureau of Accounts be made a party of the proceeding. That motion was denied by the preceding examiner, and on reconsideration by order of the Commission dated September 12, 1968. The Commission”—and I am reading from the brief—“The Commission has the power to obtain cost and traffic evidence to assure an adequate record and should have made the Bureau of Accounts a party to the proceeding for the purpose of developing a record.”
Still quoting, from their brief as they quote from Aberdeen and Rock Island Railroad case, “the nature of our national transportation system should not depend upon evidence either offered or withheld by competing carriers. The Commission does not expect that it merely calls balls and strikes. The ICC is not the prisoner of the parties? submissions."
Now in this case, which is one of the biggest cases that has been before the Commission, here is a department of the Government com
ing in and being very critical of the Commission. What is your comment ?
Commissioner WALRATH. Well, to begin with, the Department of Agriculture is a partisan participant as an opponent in the case. The Commission had a record which in its judgment was sufficient, and we also had our own cost analyses to check against the records that were offered by the railroads. We did do that.
Senator HARTKE. Why wouldn't you go to the Bureau of Accounts?
Commissioner WALRATH. Well, what is the point, sir, when the record is accurate?
Senator HARTKE. The point is simple, to go ahead and develop a complete record outside of the participating parties. The point of it is whether or not the Interstate Commerce Commission is going to free itself of any accusation of not really digging into the facts and taking just one side of the case. I am not saying you did. But all I am saying to you is the suspicion is there and the air is not clean, and this is the type of pollution that needs to be cleared up in relation to governmental activities.
Commissioner WALRATH. Well, I suppose, Senator, that you could take the railroad brief, and if you happen to be this argument that you gave us now is their argument, and the Commission had to base its decision on the record, and we made a careful study of the figures submitted by the railroads.
Senator HARTKE. Did you analyze this independently?
Senator HARTKE. In other words, you are saying that the Agriculture Department in this is absolutely wrong in its statement of the facts?
Commissioner WALRATH. I am saying that there was no occasion for us to put evidence in the record that would have been completely duplicative of the facts that are already there.
Senator HARTKE. Let me ask you this: is it true or not true, that the Secretary urged the Commission to employ its staff to independently analyze the cost submissions of the railroads? Is that true or not true?
Commissioner WALRATH. It is true that they urged us, yes.
Senator HARTKE. All right, is this true or not true, that on September 5, 1968, prior to the opening of the hearings the counsel for the Secretary formally moved that the Commission's Bureau of Accounts be made a party to the proceeding? Is that true or not?
Commissioner WALRATH. That is correct, sir. Senator HARTKE. And was that motion denied by the presiding officer?
Commissioner WALRATH. Yes, sir.
Senator HARTKE. And on reconsideration by the Commission it was denied on September 12, 1968. Those facts are true?
Commissioner WALRATH. Those facts are true.
Commissioner WALRATH. Because we had already made these checks to be sure.
Senator HARTKE. Why, if you made these checks, why on the application of the Department of Agriculture would you not clean the air and take the pollution away from such a hearing?
Commissioner WALRATH. Well, of course, that could have taken some 3 or 4 months to do, to put it formally in the record. It simply would have delayed a decision at a time when the Commission found on the record unanimously that the rail situation had reached the point of desperation. And we were faced with the question whether to take unnecessary time to duplicate something already on the record which we knew to be accurate, which we had checked, which we had analyzed, and put something on the record that would simply have confirmed what the railroads had offered and we had checked. We voted on that record, we were satisfied that the figures were accurate.
Senator HARTKE. Let me say to you, Commissioner, I make no accusations or inferences whatsoever. All I am saying to you is that that is as self-serving a declaration as any judge or any commissioner would ever make. I mean that really doesn't say anything. It is just like us Senators saying we give adequate consideration to the Congressional Record every day, and I hope we do, you know. Have you ever read the Congressional Record every day?
Commissioner WALRATH. I have it read every day, sir.
Senator HARTKE. You don't read it in its entirety any more than I do. You look at those points of interest. If you were going to read the Congressional Record in its entirety every day you would have no time to do anything else, especially as we are doing, having three hearings going at the same time. And there is going to be an executive session in the Finance Committee in about 3 minutes to pass on whether or not we extend the surtax. That's why I am going to recess in a moment and go vote against this arbitrary assumption of power and try to do something for the poor consuming public and try to make sure that that surtax is allowed to die like President Nixon promised. I am trying to help him keep his promise. I am a cooperative soul.
I will tell you this while we are talking about it, for your information, if they are successful in passing it over my head, which I think they will be, I am going to give them a chance to keep another promise
Ι by putting a little social security amendment on to it. I just want to help the President at every step I can.
That interchange really ought to be put down some place in the Finance Committee.
Commissioner JACKSON. Mr. Chairman, may I put in a word? I think the record should show that so far as the shipments or general rate increases on commodities are concerned, that in any hearings involved with those the loudest protestants and the loudest screams of rage and pain come from wholesaler shippers and retailers. So indirectly that protest, while I won't say that it is completely altruistic, nonetheless does serve to make a record in part on behalf of the ultimate consumer of those goods.
Senator HARTKE. Yes, I like this vicarious support of the consumer. I mean that's what you are talking about.
Commissioner JACKSON. I am saying the effect. I don't care from whence it springs.
(Discussion off the record.)
Senator HARTKE. All right, now, Commissioner, you have this wonderful procedure, which is sort of unique to the transportation field. You allow carriers to sit down and agree among themselves as to fixed rates, isn't that true?
Commissioner WALRATH. Under section 5(a) proceedings.
Senator HARTKE. Now these prices then become effective unless the Interstate Commerce Commission takes some action, isn't that true?
Commissioner WALRATH. No, sir; that part of the story, under the 5(a) agreement if they use this business of sitting down and talking together in a region, or nationally even, they must then put that on the public docket and hear the shippers before they can file for that.
Senator HARTKE. Unless the shipper comes in or the carrier comes in and files a protest it becomes effective!
Commissioner WALRATH. Not always, sir; and that was one of the questions you asked me to report on today, and I am prepared to give you some figures on our voluntary suspension activity.
Senator HARTKE. All right, we will hold those for a moment for the record because I want to come back to a little thing which is a tongue twister, and it is not an alliteration but it is awfully hard for me to say yak fat.
Commissioner WALRATH. That's one which I think embarrassed everyone concerned with it, Senator.
Senator HARTKE. Who wants to talk about yak fat? Anybody?
Commissioner WALRATH. I am afraid I am partly responsible for that.
Senator HARTKE. Is there any yak fat outside of Tibet? Commissioner WALRATH. It created a lot of humor at the moment.
Senator HARTKE. I think it creates a great concern of the kind I am talking about.
" Yak fat?' demanded the man at Chicago, Rock Island & Pacific Railroad. 'Are you putting me on?'
“A good many people should have asked that question months ago, because the answer was, 'Yes'--and when the story came out last week, there were red faces in the Interstate Commerce Commission in Washington and in railroad offices all over the Midwest. In a textbook example of the bureaucratic mind at work, the ICC and the railroads had swallowed a colossal hoax.
“The great Yak Fat case (M-19432 in the ICC files) started last March in a huff in the offices at Hilt Truck Lines, Inc., in Lincoln, Nebr., where 26 year old Tom Hilt, son of the owner, was typing out a new rate schedule. The chore was necessary because the railroads had protested Hilt's frozen potato tariff, and the ICC had backed the railroads. As he typed Hilt reflected-in characteristic trucker's style that the railroads always protest anything truckers do, and the ICC automatically goes along.
“The thought was father to the yak. Hilt added a new rate: he offered to ship 80,000 pound lots of yak fat, in suitable containers, between Omaha and Chicago at 45 cents per 100 pounds.
"It was patently absurd. Yaks come from Tibet, live in zoos, and couldn't provide much fat to speak of even if anybody outside of Tibet wanted it. But Hilt's rate for shipping the stuff looked suspiciously low, so the railroads took the bait. Besides the Rock Island Railroad, the Burlington, the Great Western, the Milwaukee, the Northwestern and the Illinois (entral rose in arms to protest to the ICC that Hilt's yak fat rate was unfair, unprofitable, and illegal.
"Gravely, the ICC board of examiners suspended the rate as ‘unjust and unreasonable,' and gave Hilt a month to prove otherwise.