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When he didn't show up, the ICC told him he couldn't ship yak fat any more."

Commissioner WALRATH. That made a great news story.

Senator HARTKE. “Then the case was closed—until a 'Washington reporter-God save us from those, huh? They're nice people. Some of them are even pretty. In the afternoon, the Hilts and the whole trucking industry-chörtled happily. 'I wanted to prove a point, said Tom Hilt. “sure did.' But the railroads retreated to a position of outraged dignity. 'I am practically stunned that anyone should file a joke with such a group as the ICC, sniffed Robert E. Barr, Chairman of the Western Trunkline Committee and the technical author of the railroads' protest. And nobody at all could explain why nobody had reacted to the very idea of yak fat. 'Sometimes, said one railroad man limply, people disguise things.'

I just hope none of you people have brought any yak fat in here.
Commissioner MURPHY. Senator, may I comment on that?
Senator HARTKE. Yes, sir.

Commissioner MURPHY. Under the law and the way it is established, assuming the carriers did come in, you can't prejudge what they do, but if they file a petition which is certified that in their opinion the rate is unlawful for any one or more given reasons, and you look at the per mile earnings, the Commission can't sit down and analyze every one that comes in. And where there is a possibility of it being illegal you have a responsibility to the public and to the carriers to suspend and look at it. We can do it on our own. With the time we have and what we have to do, I am sure we could pull the same trick with some of the things the carriers do some of the time—and I am speaking of the motor carriers.

But it was suspended, this fellow did not come in and respond to it in the 30 days, and as a result the rate didn't go in. But you never had a formal hearing. You never had anything on it. He filed it and then by default he stayed out of it.

Senator HARTKE. Did the railroads examine it and present their petition in this case? I mean did anyone take them to task?

Commissioner WALRATH. Solely on cost, sir. .

Senator HARTKE. On cost. Ship yak fat at 45 cents a pound, it is too low.

Commissioner WALRATH. If there had been such a commodity

Senator HARTKE. How in the world could anyone say it is too low? It may have been extraordinarily high. I mean yak fat. Do you know? Have you ever seen yak fat?

Commissioner WALRATH. Well, no, sir.

Senator HARTKE. I haven't either. I have no idea what it would look like.

Commissioner WALRATH. But there are so many strange commodity names that this would not attract the attention of our technical people on the suspension board level. They would look at the cost factors, the distance, the weights, and determine that it was probably unlawful and probably suspend it. With anything. It wouldn't matter what they called it. I can't think at the moment of some of the strange things that are actually commodities, but they are no stranger than yak fat.

1

1 See list on p. 93.

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Senator HARTKE. Let me say to you quite seriously I think one of the things that most people recognize is that sometimes the better part of judgment is to admit you just plain made a mistake. This is what President Kennedy did about the Bay of Pigs, he said, “I am President and I was wrong." I wish he had said it about some other things, but that's neither here nor there. I don't think you are required to be perfect. I am not saying this is an indictment of the ICC. I think you are all honorable people, I mean really, and I am not trying to belittle. But I am trying to get away from exactly the kind of impression which the people have about the bureaucratic Washington, D.C., and this just lends credence to it, and you know it does, and there is no way under

the sun to make it look better.

Commissioner WALRATH. That's not the whole story, Senator. I menticned yesterday we have 237 plus thousand filings a year.

Senator HARTKE. What about this examiner? Where in the world was he?

Commissioner WALRATH. It was the Board of Suspensions, as I recall it.

Senator HARTKE. Where were they? Did you ever call them up and ask them what happened?

Commmissioner WALRATH. Well, I know what happened, because they don't look at the commodity per se. They look at the weight, the distance, the rates that are proposed. They already have the benefit of cost analysis on those weight levels and those distance shipments, and they base their decision upon the probability of unlawfulness, and that is the first step. It is in order to investigate. Once it became apparent there was no such thing as yak fat it was dismissed, ended.

Senator HARTKE. Doesn't this also go back to the problem of how complicated this whole picture really is, and if we utilized other approaches which would be broader we would eliminate some of this?

Commissioner WALRATH. I think it illustrates the simplicity with which these things are carried out.

Senator HARTKE. All right. Let's go back again to Ex parte 256, and on page 136 of your report to the Congress

Senator WALRATH. Are you speaking of the transcript or the Commission report?

Senator HARTKE. I am talking about the green dragon.
Commissioner WALRATH. Oh, I see. Yes, sir.

Senator HARTKE. We are going to have to recess. I am getting pelted from all sides here. I have to be in Executive Committee in Finance now, and also the Commerce Committee on the other side which I have to go to. Then I will be back, I would say-Mrs. Brown, I don't know what I am going to do about you.

Mrs. Brown. I will be right here, sir. Don't you worry about me. I will be right here.

Senator HARTKE. We will recess until 1 o'clock.

(Whereupon, at 11:10 a.m., the subcommittee recessed, to reconvene at 1 p.m.)

AFTERNOON SESSION

Senator HARTKE. Commissioner Walrath, do you want to give us the answers to the questions I asked yesterday?

Commissioner WALRATH. I will be happy to, Senator. As I recall it, the first question you asked was that we provide information on the extent to which DOT, Department of Transportation, had participated in our general rate cases and other matters of broad importance.

I will very quickly read these just into the record. The so-called Rent-a-Train case, they participated in support. In MC-65, so-called deviation rules for the Interstate Highway System, which is current, they are actively participating in that. In the Middlé Atlantic General Increase case of 1968 they actively participated and offered expert testimony as well as cross-examination.

In the Pacific Inland General Increase Motor case of 1968 they also actively participated as a protestant. They were also in the New Haven inclusion phases of the Penn Central case.

In behalf of the United States as a creditor in MC-68 which is the rulemaking proceeding concerning removal of truckload lot restrictions they participated.

In MC-77 tariff restrictions on the hauling of commodities which is a rulemaking proceeding currently pending, the Department is active in participating. Finally, in the New Haven passenger train discontinuance, which was pre-Penn Central merger, they were active participants.

Now, I didn't want to leave the impression in answering your question procedurally about the Department of Agriculture this morning in E parte 256 and 259 that they had not made great contributions to the work of the Commission.

True, we ruled against them on that procedural question, but the Department of Agriculture has been in every ex parte rail case, at least during my 13 and a fraction years on the Commission, beginning back with 196—these are Ex parte 196, 206, 212, 223, 256, and 259.

In each of those they have made a substantial contribution to the record representing the public interest, the consumer, if you please.

Even in 256 and in 259, although we ruled against them procedurally. we agreed with them in many respects on the merits and held down rates on agricultural commodities that the household consumes. Not all we didn't agree with them in every respect. But in many.

The Department of Defense has been in many cases also, but they are usually in their own interest as shippers of military supplies rather than the public interest.

General Services Administration is in most of these cases along with the Department of Transportation. They have been in for many years in all of our big cases.

Commissioner Bush. In their own interest ?

Commissioner WALRATH. GSA takes a broader interest than just their own shipments. Principally, of course, they are concerned with Government movements many of which move on section 22 rates.

For the last fiscal year in this report on this point, out of a total of 4,949 protests of all types, 77 were from State or Federal Government agencies, so we have had rather active participation by Government agencies.

Senator HARTKE. In Ex parte 259, in which you rule against the Department of Agriculture motion before the hearing itself and then re

i See p. 105 for questions.

affirmed that position, you said, “Independent data was supplied by our own Department." Is that correct, Commissioner Walrath?

Commissioner WALRATH. Yes, sir.
Senator HARTKE. Was that put into the record ?

Commissioner WALRATH. No, but in this sense-well known to the parties, including the Department of Agriculture and all other parties to that case—when that case began, as we do in all such cases, we set up a task force which includes our cost people, our cost analysis people, our Bureau of Economics, our Bureau of Tariff, and those men worked constantly on every item of evidence that is presented as it is presented so that we are really ahead of the parties in analysis and if we found something was not accurate—could not be verified-at that point we would voluntarily put our own witnesses into the case. Senator HARTKE. What I am asking concerns this: you

said

you provided independent data, and made an independent assessment from the Commission. As a lawyer I don't understand how

you
build

a case upon information which is not a part of the record ?

Commissioner WALRATH. We don't. We simply check to find that the evidence that the parties have presented is accurate and is verifiable. At that point we are willing to accept it.

Senator HARTKE. Wouldn't it be the better part of procedure to present the independent data from the Interstate Commerce Commission so that both parties would have access to that to assist them in presenting their own cases.

Commissioner WALRATH. If we find any variance from the evidence that either side of the parties are presenting on cost basis, we would be in there with it. Otherwise it would be purely duplicative.

Senator HARTKE. How would the courts determine that? How would the court make a determination about an independent survey when they don't have it confronting them?

Commissioner WALRATH. They have the benefit of all the extensive cross examination as well as the expert witnesses presented by the protestants who challenge that evidence. It is not a one-sided presentation.

Senator HARTKE. I hear what you are saying, but I am like the Japanese sometime when they say yes. I hear your words, but that doesn't mean when I say yes, that I agree. I am not asking you to make a decision on this point, but I do think that in all fairness you are back to a place which relates to this whole problem I am trying to bring to the attention of the ICC.

That is, that the ICC is not just an adjudicating agency. It has a responsibility above and beyond that function as an independent agency of the Congress to represent the public interest as distinguished from the interests of the parties to an individual case.

Commissioner WALRATH. Senator, Mr. Chairman, I haven't made myself clear I am afraid. Senator HARTKE. I think you have. That is what bothers me.

Commissioner WALRATH. If we found there was anything we could add to that record

Senator HARTKE. I understand. There isn't a man under the sun who doesn't think that when he makes an assessment that he does it fairly. That is why you have appeals courts.

Commissioner WALRATH. I don't mean on a judgment basis. I am talking about if our cost analyst found something that could be helpful in developing the record we would put them in immedately without even a request from the Department of Agriculture or anyone else. We would feel it our duty to build that record. When our cost analysis checks exactly with the figures that the parties are putting in, it would be a duplication of effort and an expenditure of manpower that would serve no useful purpose.

Senator HARTKE. I will tell you one useful purpose. It would have alleviated some of the apprehensions the chairman of the subcommittee has.

Commissioner MURPHY. May I inject one comment? I think maybe we were misunderstood. There is a prescribed formula for the submission of the cost evidence and the figures put in by the railroad.

The underlying figures for that are available for the parties to look at. I think maybe I am not differing with Commissioner Walrath except to this extent where he said they made an independent study. I think he really meant that we made an independent verification and check of the formula that is prescribed for submitting such cost evidence to determine whether it was accurately submitted instead of an independent cost study being made by the Commission, it was a review of the manner in which it was submitted and the figures used.

Senator HARTKE. Now you have me really confused. What you are saying is that really there wasn't any independent survey made but there was an analysis made of the evidence which was submitted. You see, that is an entirely different matter. One of the things that happened which took me away from here this morning to the air traffic controllers was the fact that they just didn't talk about air traffic controllers, so I asked them why not? But you see if I just analyzed their material without reference to any outside information, there wasn't any question that that question would never have been raised. This issue had to come from an independent source, myself, a pretty good independent source ordinarily, I will take that out as a self-serving declaration

(Laughter.)

Let's return to Ex parte 256, in the same realm here. Page 136. We start on the genera] rate increases under C-1. You talk about increased rates in Ex parte 256. Let me read this. "Motivated primarily by wage increases.” I am reading your statements now. I am quoting. “But also by increases in prices of materials and supplies both the railroads and motor carriers have been applying for general rate increases to meet the increased expenses."

“In considering those proposals which have been formally investigated we have been concerned about obtaining more reliable evidence upon which to act."

Then you come down to Ex parte 256 and say this: “We approve the slight modification increases which increasingly become effnctiv, lugust 1967 subject to refund. With respect to the quantum of proof offer we stated ... "while the evidence submitted is here inaccurately explained it is sufficient to justify the increase authorized. We shall expect the petitioning railroads in future general revenue proceedings to make a more complete disclosure of the facts upon which they rely in support of the relief sought.'

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