Data bearing upon the economic importance of the railroads to the State of Utah [Figures obtained from annual reports filed by the various railroads with the Public Utilities Commission]

Operating expenses within ($385,561.24 $364, 993. 86 $545, 990. 46 $1,074, 062. 28 $359, 443. 13
State 1.

$182, 944, 746

$3,045, 808 15, 235, 542 18, 281, 350

$109, 541, 469

37,802 $10, 566, 647

1 Operating expenses in Utah, steam and electric lines, represents money spent by the railroads in the State. Includes cost of maintaining right-of-way, structures, and equipment and takes into account the purchase of supplies and materials in connection therewith. Does not include taxes, which are listed below separately. The largest element entering into operating expenses is that of labor costs, constituting between 60 and 65 percent of all railway operating expenses. Enormous as it is, the total operating expense of the railroads in the State ($18,281,350) is only 54 percent of normal, based on the average for the years 1929 and 1930. Return to normalcy for the rails means impetus to not only the durable goods industry, but a stimulus for all industry as well. To disregard the economic importance of the railroads is to ignore a potential factor in the return of general prosperity.

No segregation is contained in the annual reports of the railroads showing employment separately by States. Employment on the trunk lines serving Utah must, therefore, be estimated on a basis which recognizes the same percentage of employment in the State as that represented in the division of operating expense to the State, plus an adjustment to take in the part-time employees who are subject to seasonal work and who depend upon the railroads for their livelihood. This figure is conservatively placed at 6,537, as above.

Not including affiliated companies.

Number of railroad employees in Utah owning their own homes.

Number of railroad employees in Utah pay in property taxes, approximate..

3,680

$229, 484.80

Number of rail employees in Utah based on 1934 annual reports of all trunk lines and electric roads in the State, as above:

CONTRIBUTION MADE BY THE RAILROADS IN THE FORM OF TAXATION TO THE
SUPPORT OF STATE AND LOCAL GOVERNMENT, STATE OF UTAH

All railroads and affiliated companies, car and terminal companies:
General property tax only, 1934:

Railroads.

Car companies.

Terminal companies..

Railroad employees constitute one of Utah's leading pay-roll groups.

$2,584, 831. 89 63,625. 05 84, 292. 14

2,732, 729. 08

293, 139. 85 131, 471. 59 1,647, 480. 39 197,275. 71 249, 580. 15 213, 672. 09 109.30

2,732, 729. 08

The following figures, published by the Department of Public Instruction, in its book, Utah; Resources and Activities, tell the story of what normal conditions on the railroads would mean by reverting back to the averages of 1929 and 1930:

Railroad employees in Utah.

Persons in Utah dependent upon the railroads.
Annual pay roll for wages..

12,000

50,000

$20, 000, 000

Railroad employment in Utah is now approximately 66 percent of what it was during 1929 and 1930The comeback trail for the railroads must be over the route of public patronage. Modernization by the railroads is their bid for that patronage.

During the 5-year period (1929-34) there has been a net increase in taxes levied against the railroads in the State of Utah of $18,723.98 as compared with a decrease in taxes levied on property other than railroads in the State of Utah, of $3,818,805.76. As a result, the railroads' percent of the total property taxes levied in the State has increased from 12.06 percent in 1929 to 14.78 percent of the total tax in 1934. It might be added that the railroads' percentage of taxes actually paid has increased considerably more than the percentages for taxes levied.

Mr. PELL. We railroad workers of the intermountain States feel that we are entitled to some consideration from the Congress.__Beyond doubt, hundreds of railroad employees in the State of Utah can never again be employed upon the steam railroads unless rail carriers are given an opportunity to compete fairly for all available traffic. Our members are all men of long experience. They are past the age when they could be readily absorbed in other occupations. The continued diversion of transcontinental freight to the intercoastal steamship companies has already led to a very acute railroad unemployment problem and modification of the fourth section as now proposed will be one of the most material factors in again getting our railroad men off the unemployment rolls and back on the payrolls where they belong.

Mr. MARTIN. Does that conclude your statement?

Mr. PELL. That concludes my statement; yes.

Mr. MARTIN. Thank you very much for your statement, Mr. Pell. Mr. PELL. Thank you.

Mr. MARTIN. Does that conclude all the witnesses we have.

Mr. JOHNSON. I think that is all.

Mr. MARTIN. As previously stated, that ends the case for the proponents, and pursuant to explanation made a while back, the committee will stand adjourned until 10 o'clock Monday morning, sharp. (Thereupon, at 5 p. m., an adjournment was taken until 10 a. m., Monday, June 17, 1935.)

AMEND FOURTH SECTION INTERSTATE COMMERCE ACT

MONDAY, JUNE 17, 1935

HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE OF THE COMMITTEE ON

INTERSTATE AND FOREIGN COMMERCE,

Washington, D. C.

The subcommittee met, pursuant to adjournment, in room 115, House Office Building, Hon. John A. Martin presiding, at 10 a. m. Mr. MARTIN. Gentlemen, the committee will be in order. Some of the members of the subcommittee are sitting in other committees this morning and seem to be tied up for the present. We have a rather long schedule, and, following the procedure of our chairman, Mr. Rayburn, we will start promptly at 10 o'clock unless someone objects.

We begin this morning with witnesses in opposition to the fourthsection bill introduced by Congressman Pettengill, and the first witness is Mr. Campbell, representing the Intermediate Rate Association, of Washington, D. C., and he has been assigned all of the time for the morning session.

We will be glad to hear you now, Mr. Campbell.

STATEMENT OF JOHNSTON B. CAMPBELL, REPRESENTING THE INTERMEDIATE RATE ASSOCIATION, WASHINGTON, D. C.

Mr. CAMPBELL. Mr. Chairman and gentlemen of the committee, before I begin my statement on behalf of the intermountain people, Í have a short formal statement to make.

My name is Johnston B. Campbell. In the presentation of the opposition to the repeal of the fong-and-short-haul clause a great number of people desire to be heard. Each witness, or each group of witnesses, will represent the interests for whom they appear. It is hoped that there will be little if any repetition, but that there will be overlapping, of course, must be expected. But where the overlapping occurs on questions which may be asked, the witness who is testifying at that overlapping and that answer will be on behalf of the people they represent only.

There will be representatives here of the intermediate, the intermountain section, the southeastern section, and other intermediate points. There will be representatives of the intercoastal shipping interests; there will be representatives of the inland waterways; there will be representatives of some labor unions, farm organizations, wheat growers, fruit growers, and others. Those interests, as I say, will speak for themselves and from their own standpoint, and I want, as I stated before, to have it clearly understood that when any one person speaks and there may appear to be an overlapping, he is speaking for the interests of his group and does not purport to speak for any other interests who may have a similar argument.

Now, in order that I may be a little further identified, I will say that my home is in the county of Spokane, in the State of Washington; that during the war I was a member of the district traffic committee at Portland, Oreg.; that in 1921 I was appointed to the Interstate Commerce Commission and served on that commission until 1930, when I voluntarily resigned. Since that time I have been practicing law, maintaining an office in Washington, D. C., in Spokane, Wash., and for a couple of years maintained an office in Boston.

I am appearing for the Intermediate Rate Association. I am not prepared to give you a complete list of what that association represents, but others will follow me and will be able to give you in detail membership.

In 1910 I was one of those instrumental-of which I have been greatly proud-in bringing about the amendment to the fourth section. Before 1910 there was not any fourth section worthy of the name. Chaos existed throughout this entire country, and the railroads, because of unrestrained competition and the lack of restraint under which they were operating on the long-and-short hauls, brought themselves to the verge of ruin. It is a conceded fact, I believe-I do not believe any of my railroad friends would want to dispute itthat the Interstate Commerce Act was brought into being in 1887 because of the chaotic conditions of rates and the desperate financial condition of the railroads. It was recognized by everyone that something had to be done.

I was interested in Judge Fletcher's statement on the opening day of these hearings, in which he stated that, while all business was bad, he thought the railroad business was in a worse condition than any other line of business, and he made an appeal for the lessening of control of the railroads. In using as an argument the conditions of other lines of business, Judge Fletcher seems to have forgotten that the railroad business is not like other business.

I can remember when I was a small boy on a farm in Minnesota of the Granger cases in Iowa, when the railroads claimed that they had the right to operate their business exactly as any other line of business was operated, and you all recall even though you may not be old enough to remember those cases themselves, but you have read them and know how the Granger cases of Iowa impressed the railroads with a public interest and the court found that the railroads must be operated in the public interest.

Now in 1886 there was a conimittee appointed by the United States Senate, known as the "Cullom Committee", to investigate the railroads, and I am going to read to you from some of the hearings before the Cullom Committee, and in that hearing the question was asked of the railroads charging more for a short haul than for a longer haul, and that was one of the paramount issues because of the fearful result from uncontrolled competition between themselves. Now, notice, and I want you to bear this in mind in all that I have to say, that the conditions which the railroads find themselves in 1886 is the condition which is due primarily to competition among the carriers themselves. Because of this fierce, intense, and uncontrolled competition between between the carriers themselves, many of the railroads had been brought to the brink of ruin. Rates had reached so low an ebb that many of the carriers were in the hands of receivers.