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We will adduce evidence before the Senate Committee on Interstate and Foreign Commerce accordingly.

Therefore, we recommend that our principals vigorously oppose S. 2363.

NOTE. The statements of Frank A. Leffingwell, secretary-treasurer, Texas Industrial Traffic League, and of Kenneth L. Sater, counsel, Ohio State Industrial Traffic League, in opposition to S. 2363 will be found in the hearings for April 9 under S. 2754 and S. 2349, respectively. (The statement of Frank Tobin, director of research, International Brotherhood of Teamsters, Chauffeurs, Warehousemen, and Helpers of America, AFL, on S. 2363 will be found in the hearings on S. 2362 for April 9.)

DOMESTIC LAND AND WATER TRANSPORTATION

S. 2364, a Bill To Authorize the Revocation of Certain Water-Carrier Certificates.

[S. 2364, 82d Cong., 2d sess., by Mr. Johnson of Colorado (by request)]

A BILL To authorize the Interstate Commerce Commission to revoke or amend, under certain conditions, water-carrier certificates and permits

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 309 of the Interstate Commerce Act (49 U. S. C., sec. 909) is amended by adding at the end thereof the following new subsection:

"(h) Certificates and permits shall be effective from the date specified therein and shall remain in effect until suspended or terminated as herein provided. Any such certificate or permit may, upon application of the holder thereof, in the discretion of the Commission, be amended or revoked, in whole or in part, or may upon complaint, or on the Commission's own initiative, after notice and hearing, be suspended, changed, or revoked, in whole or in part, for willful failure to comply with any provision of part III of the Interstate Commerce Act, or for failure to engage in, or to continue to engage in, the operation authorized by such certificate or permit. The right to engage in transportation in interstate or foreign commerce by virtue of any certificate or permit, or any application filed pursuant to the provisions of subsection (a) of this section, or temporary authority under section 311 (a), may be suspended by the Commission upon reasonable notice of not less than thirty days to the carrier, but without hearing, for failure to comply, and until compliance, with the provisions of section 306 (a) or 306 (e).”

[S. 2364, 82d Cong., 2d sess.]

AMENDMENT (IN THE NATURE OF A SUBSTITUTE)

Submitted March 17, 1952

Intended to be proposed by Mr. JOHNSON of Colorado (by request) to the bill (S. 2364) to authorize the Interstate Commerce Commission to revoke or amend, under certain conditions, water-carrier certificates and permits, viz: Strike out all after the enacting clause and insert in lieu thereof the following:

That section 309 of the Interstate Commerce Act (49 U. S. C., sec. 909) is amended by adding at the end thereof the following new subsection:

"(h) Certificates and permits shall be effective from the date specified therein, and shall remain in effect until suspended or terminated as herein provided. Any such certificate or permit may, upon application of the holder thereof, in the discretion of the Commission, be amended or revoked, in whole or in part, or may upon complaint, or on the Commission's own initiative, after notice and hearing, be suspended, changed, or revoked, in whole or in part, for willful failure to comply with any provision of part III of the Interstate Commerce Act, or with any lawful order, rule, or regulation of the Commission promulgated thereunder, or with any term, condition, or limitation of such certificate or permit. The right to engage in transportation in interstate or foreign commerce by virtue of any certificate or permit, or any application filed pursuant to the provisions of subsection (a) of this section, or temporary authority under section 311 (a), may be suspended by the Commission upon reasonable notice of not less than fifteen days to the carrier, but without hearing, for failure to comply, and until compliance, with the provisions of section 306 (a) or 306 (e) or with any lawful order, rule, or regulation of the Commission promulgated thereunder."

[S. 2364, 82d Cong., 2d sess.]

AMENDMENT (IN THE NATURE OF A SUBSTITUTE)

Submitted April 2, 1952

Intended to be proposed by Mr. JOHNSON of Colorado (by request) to the bill (S. 2364) to authorize the Interstate Commerce Commission to revoke or amend, under certain conditions, water carrier certificates and permits, viz: Strike out all after the enacting clause and insert in lieu thereof the following:

That section 309 of the Interstate Commerce Act (49 U. S. C., sec. 909) is amended by adding at the end thereof the following new subsection:

"(h) Certificates and permits shall be effective from the date specified therein, and shall remain in effect until suspended or terminated as herein provided. Any such certificate or permit may, upon application of the holder thereof, in the discretion of the Commission, be amended or revoked, in whole or in part, or may upon complaint, or on the Commission's own initiative, after notice and hearing, be suspended, changed, or revoked, in whole or in part, for willful failure to comply with any provision of part III of the Interstate Commerce Act, or with any lawful order, rule, or regulation of the Commission promulgated thereunder. or with any term, condition, or limitation of such certificate or permit, or for willful failure to engage in, or to continue to engage in, the operation authorized by such certificate or permit. The right to engage in transportation in interstate or foreign commerce by virtue of any certificate cr permit, or any application filed pursuant to the provisions of subsection (a) of this section, or temporary authority under section 311 (a), may be suspended by the Commission upon reasonable notice of not less than fifteen days to the carrier, but without hearing. for failure to comply, and until compliance, with the provisions of section 306 (a) or 306 (e) or with any lawful order, rule, or regulation of the Commission promulgated thereunder."

UNITED STATES SENATE,

COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, Washington, D. C., Tuesday, March 4, 1952. The committee met, pursuant to adjournment, at 10 a. m., in room G-16, United States Capitol, Washington, D. C., Senator Edwin Johnson of Colorado (chairman) presiding.

Present: Senators Johnson (chairman), Tobey, and Bricker.

Also present: E. R. Jelsma, staff director, Subcommittee on Domestic Land and Water Transportation, and F. J. Keenan, assistant clerk of the committee.

STATEMENT OF CHESTER C. THOMPSON, PRESIDENT, THE AMERICAN WATERWAYS OPERATORS, INC.

Mr. THOMPSON. S. 2364, if enacted into law, would give the Interstate Commerce Commission authority to revoke or amend certificates of convenience and necessity or permits issued by it to water carriers under the provisions of the Transportation Act of 1940. The Commission itself, in several annual reports to Congress, has recommended the enactment of legislation of this nature.

The committee, it is believed, should consider the fact that the regulation by the Interstate Commerce Act of some domestic water carriers is a comparatively new venture, it having been undertaken only a little over 10 years ago. It is true, of course, that there are a few certificates and permits issued water carriers under part III of the act which are not being used presently to provide any service. The water transportation business on the inland rivers and waterways. however, has undergone and is still undergoing many changestechnologically and otherwise. New and cheaper methods of handling

freight at terminals are being developed constantly; much promise of success in this regard is already apparent and more is anticipated.

The Interstate Commerce Commission has authority, under existing law, to issue certificates and permits to water carriers upon a showing that the services contemplated are necessary in the public interest and are not being adequately provided by present holders of such operating authorities. The fact is that nobody is being "hurt" by the operation of the existing law concerning the issuance of certificates and permits to water carriers by the ICC.

The committee should take cognizance of the fact that, like all good businessmen, water carriers are anxious to make money; and if there is an opportunity to do so by providing freight transportation services contemplated by certificates and permits heretofore issued them they will do so promptly. There are many instances, however, when the potential traffic does not presently justify the services originally contemplated when applications for certificates and permits were favorably considered by the Commission.

As previously mentioned, the water transportation industry on the inland rivers and waterways is rapidly changing and, with ever increasing rail freight rates, is constantly and progressively expanding. Thus it could well be that an unprofitable water freight route today will become profitable this year or next, with the result that adequate transportation services will be provided by present holders of certificates or permits.

Neither the Congress nor the Interstate Commerce Commission should "hold a club over the heads" of water carriers and force them to conduct or furnish admittedly unprofitable freight transportation services under the threat of revoking or substantially amending their outstanding certificates or permits. The water transportation industry should be given more time to grow-to expand its services to the shipping public-in the interests of the national economy and national defense.

The enactment of S. 2364 would be most untimely and harmful to domestic water transportation and, therefore, it is hoped that this committee will not favorably report the bill at this time.

(The following letter was inserted in the record at the conclusion of today's hearings by Senator Johnson:)

STATEMENT OF A. T. WOOD, PRESIDENT, THE COPPER STEAMSHIP Co.

Hon. EDWIN C. JOHNSON,

FEBRUARY 29, 1952.

Chairman, Committee on Interstate and Foreign Commerce,

Senate of the United States, Washington, D. C.

DEAR SENATOR JOHNSON: Our company holds a certificate of convenience and necessity issued by the Interstate Commerce Commission shortly after enactment in 1940 of part III of the Interstate Commerce Act. The certificate authorizes us to continue operations under the proviso of section 309 (a) of the act as a common carrier by water of commodities generally between ports on the Great Lakes, their connecting and tributary waters except Lake Ontario.

The purpose of S. 2364, it would seem, is to confer upon the Commission the power to revoke, modify or suspend certificates or permits of water carriers in the same manner as t'e Commission may now proceed against motor carriers under part II. If such be the purpose, we are in general accord with the objectives of the bill. As it is presently drawn, however, the bill goes beyond that purpose. Not only would the Commission be given power to proceed against water carriers who willfully violate the act or regulations or orders of the Commission; the Commission would be given power so to proceed against a water carrier who for

any reason might fail to engage in, or continue to engage in, the operation authorized by its certificate or permit.

It is with respect to this latter broad delegation of power that we object. A water carrier's operations are seldom constant. They are subject to change with changing economic conditions. Trades that are pursued today may be gone tomorrow only to be revived in the years to come. These are matters over which the carrier has no control whatsoever. It seems to us that changes of this sort ought not to lay the basis for a proceeding by the Commission to modify or otherwise impair a water carrier's operating authority. Our view is that, in the revocation, modification, or suspension of a water carrier's certificate or permit for failure to engage in authorized operation, the test should be whether or not such carrier wilfully or intentionally reduces or contracts the scope of its operation. Any other test could well lead to an arbitrary foreclosure of the carrier's right to engage in business. Under other provisions of the bill, the Commission's power to take disciplinary action against a carrier is limited to willful violation of the act or regulations or orders of the Commission. It seems to us that no lesser showing should be made in a proceeding predicated on failure to engage in authorized operation. It is respectfully requested, therefore, that the bill be amended on page 2 by inserting in line 5 after the word "for" the "willful."

Your consideration of this letter in lieu of a personal appearance will be very much appreciate.

Very truly yours,

THE COPPER STEAMSHIP Co. By A. T. WOOD, President.

UNITED STATES SENATE,

COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE,

Washington, D. C., Tuesday, March 11, 1952.

The committee met, pursuant to adjournment, at 10 a. m., in room G-16, United States Capitol, Washington, D. C., Senator Edwin Johnson of Colorado (chairman) presiding.

Present: Senator Johnson of Colorado.

Also present: E. R. Jelsma, staff director of Subcommittee on Domestic Land and Water Transportation.

STATEMENTS OF COMMISSIONERS WALTER M. W. SPLAWN, CHAIRMAN, LEGISLATIVE COMMITTEE, AND CHARLES D. MAHAFFIE, INTERSTATE COMMERCE COMMISSION

Commissioner SPLAWN. We have one other letter, on S. 2364, on which we have not yet had comment. That deals with the revocation of certificates of water carriers. The Bureau of Water Carriers and Freight Forwarders reports to the division of which Commissioner Mahaffie is chairman, and we have asked him to explain or comment on this amendment.

Commissioner MAHAFFIE. Your letter of January 10, 1952, addressed to the members of the Commission and requesting comments and suggestions on a bill, S. 2364, which you introduced on that day, to authorize the Interstate Commerce Commission to revoke or amend, under certain conditions, water carrier certificates and permits, has been referred to our legislative committee. After careful consideration by that committee, I am authorized to submit the following comments in its behalf:

In our annual report for 1950, page 129, we made the following recommendation:

6. We recommend that part III of the act be amended by adding after section 312 a new section (312a) containing provisions for revocation of water-carrier certificates or permits.

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