Now it is not fair to put one group of carriers out of the trade where they can successfully operate just to help out somebody else that is not in a good financial position.

The Interstate Commerce Commission, on page 340 of the Interstate Commerce Reports, volume 21, said this-it is just a short

sentence:

This section, relating to section 4, as it now stands, reveals the mind of Congress that in fairness to carriers they may be allowed, in exceptional cases, to meet exceptional conditions at distant points, but those exceptions should be controlled, not by the whim of the carrier, nor by a desire to give preference, or a desire to increase earnings.

Now, when we talk about section 4 of the act, of eliminating it or amending it, we are talking about business that has a competitive position between the rail lines and the water lines. They want what we have got, and we want more than what we have had, than what we have, and we both want to try to make more money.

Now if each of us are able to ruthlessly go out and name any kind of a rate necessary to get that, we will have nothing but a rate war. We have had them in the steamship industry, have not had for some time, but had before we had proper regulation, but nobody gained anything by the rate war among the steamship companies, nothing but a loss of good feeling resulted, and no one made anything out of it. No one can gain anything out of a rate war.

Now it seems to me that the fourth section is the umpire as between the disputes of the rail carriers on the one hand, and the water carriers on the other hand. And in many respects it is a game; the transportation business is a game; and in almost any kind of a game you must have an umpire, and I think, if you change section 4, it would be just like taking the umpire out of a baseball game. If they had no umpire, I do not know how they could ever play ball; each player would contend that he was right in a dispute. But the Congress has to take a wider view of it and provide umpires between the carriers.

Mr. MARTIN. Of course, the long- and short-haul section is not the umpire; it is just a rule of the game. The Interstate Commerce Commission is the umpire.

Mr. BURLEY. Yes; the Interstate Commerce Commission is the umpire, but the Interstate Commerce Act is simply the rules on which the game is based; the set-up for administering the game. But how could the Interstate Commerce Commission be the umpire if it did not have that section, something to umpire?

I ask, therefore, this Congress, to please make no changes in the present section of the Interstate Commerce Act. There are a good many proposed changes in regulations; there are a number of bills pending before Congress relating to transportation, and Federal Coordinator Eastman is now placed in office for another year. We have cooperated with him in trying to work out our mutual problems. I think we have shown that we have cooperated with the railroad lines, and have not tried to be unfair in getting our share, get a proper division of the traffic, and I think it can be worked out on that basis. Mr. MARTIN. Thank you very much, Mr. Burley, for your interesting discussion. I think you have contributed some new angles, and we thank you.

Mr. BURLEY. I flew all the way from San Francisco to do so.

Mr. MARTIN. I understand that Mr. Dornell, the next witness on the list, is not here.

Now, let us see if we cannot accommodate another witness. We have done so once or twice before. The next witness on the list is Mr. E. L. Hart, of the Atlanta Freight Bureau, and the witness following him is Mr. W. H. Brusche. Mr. Brusche is from New York, and he is anxious to get away. Perhaps we can near both of these witnesses before the noon recess.

We will hear you now, Mr. Hart.

STATEMENT OF E. L. HART, TRAFFIC MANAGER, ATLANTA FREIGHT BUREAU, ATLANTA, GA.

Mr. HART. Mr. Chairman, I have observed that some of the other witnesses have undertaken to qualify. I do not think that it is necessary for me to take the time to do that. I think, at least among the railroad fraternity, most of them know me well enough to pass upon any qualifications that I might offer.

My name is E. L. Hart, and I reside in Atlanta, Ga. I am appearing in opposition to the provisions of the bill known as "H. R. 3263", to amend paragraph 1 of section 4 of the Interstate Commerce Act as amended February 28, 1920, which bill contemplates a complete elimination of the long-and-short-haul clause of that section of the

act.

In expressing opposition to the provisions of this bill I am doing so on behalf of the Atlanta Freight Bureau, of which I am secretary and traffic manager. The Atlanta Freight Bureau is a voluntary organization of the principal shippers and receivers of freight in the so-called "Atlanta industrial district." It is maintained by subscription and is not operated for gain. It was organized 33 years ago and has been in continuous operation since that time. The object and purpose of the Atlanta Freight Bureau is to secure for its members reasonable and nondiscriminatory rates for the transportation of persons and property and to promote the industrial development of Atlanta, particularly, and our section, generally.

While my organization is largely supported by the receivers and shippers of freight in the Atlanta district, it is also financially supported by the city government and county of Fulton, Ga., in which Atlanta is located.

So that in addition to receivers and shippers of freight, as such, in Atlanta, we feel that we may bespeak the sentiments of the taxpayers, generally, of our city and county on general transportation subjects.

Unlike other cities of consequense, we have no preferential rate adjustments. We are neither a basing point nor a port, nor do we ask for any special treatment in the fixation of rates and charges by the carriers, or the prescription of such rates or charges by regulatory tribunals. It is a most significant fact that in all of the history of the Interstate Commerce Commission there is no such thing as any rival community complaining that it enjoyed less favorable rates than enjoyed by Atlanta. It is doubtful if this can be said in connection with any other city of Atlanta's importance in the entire country.

We, therefore, have no special adjustment of rates peculiar to Atlanta, and as a consequence we are never called upon to defend any advantage we might have over some other city or community, regardless of its importance. So much for our very normal rate adjustment..

Atlanta, without any preferential rates and without any advantageous rate adjustments brought about by waterways, has builded a great metropolis in the Southeast. It is, therefore, tremendously concerned in railroad transportation.

The purpose of the Pettengill bill is to repeal the so-called "longand-short-haul clause" of the fourth section of the act to regulate commerce, and thus empower carriers to institute and make effective at their discretion rates between given points of origin and/or destination lower than to intermediate points; or in other words to charge. less on traffic between two points than is charged for shorter hauls to intermediate points.

At the present time the length of haul is an essential measure of the rate, and this principle has been long observed, the obvious purpose being to avoid unjustly discriminatory and preferential rates to the end that equality of opportunity might be preserved as between competitive communities and the burden of transportation cost equitably imposed.

Atlanta is the most important railroad center in the South and it surpasses all other southern cities in airway facilities. Its improved highways are second to none. It outstrips all cities of the south Atlantic coast and, indeed, all cities east of the Mississippi and south of the Ohio River in bank clearances and postal receipts. Articles manufactured and produced in Atlanta have a wide distribution. Much of its business is national in character. In recent years it has become the industrial nerve center of the South; and if there is any American city more dependent upon an efficient and adequate rail transportation system than is Atlanta, we have never heard of it. However, it is fair to say that the advent in recent years of the motor truck has brought about a changed condition in this respect and necessity may compel a much greater use of motor-truck transportation than heretofore.

No doubt the committee has become fully acquainted with the history of the fourth section of the act to regulate commerce. Therefore, it will not be my purpose to take up your time in again reviewing the circumstances which brought this law into existence.

However, I do wish to discuss briefly some of the more important historical features of this section of the Interstate Commerce Act. It must be apparent to every well-informed person that the repeal of the fourth section of the act to regulate commerce would be the beginning of a return to the unfair and discriminatory policy of railroad rate making which existed for many years and reached its fullest development in the southeastern portion of the country. The railroads in their early years encountered stiff competition from many steamboat lines plying upon the waterways and they proceeded to meet this competition ruthlessly. Eventually, they swept the waters clean of the competing craft, except on the ocean and the Gulf, and even there the competition was greatly weakened. This was done by cutting rates where the competition existed to whatever extent was necessary to paralyze it, and at the same time maintaining rates at very high levels elsewhere.

Some large interior cities which did not have water competition were able to utilize the competition of the railroads with each other to break down their rates in somewhat the same manner, but interior points which had little or no competition of any character were out

of luck. Their rates were on what the railroads called a "normal level", which was preposterously high.

All of this made, of course, for a very uneven development of the country, and it was one of the main factors which precipitated the creation of the Interstate Commerce Commission in 1887.

The fourth section, as enacted in 1887, was dominated by the phrase, "under substantially similar circumstances and conditions."

At first it was assumed by the Commission, as well as by the carriers, that this referred to the transportation itself, rather than to the conditions surrounding the transportation service rendered at the nearer and at the more distant points. Under this conception, the Commission was overwhelmed with applications for relief from what was thought to be the requirements of the law, and it finally announced that so far as competition of rail carriers with carriers not subject to the act was concerned, the carriers could, if the competition was of controlling force, meet that competition without first applying to the Commission. In other words, the carrier could act on its own initiative because of the dissimilarity of circumstances and conditions. So far as competition with carriers subject to the act was concerned, that is, railroad competition, it was held that it was necessary to first secure relief from the Commission, and the Commission subsequently held that it was seldom that railroad competition could create such a dissimilarity of circumstances and conditions as to validate departures from the long-and-short-haul clause as would permit it to grant relief. Eventually certain carriers in the Southeast took a case to the Supreme Court (Interstate Commerce Commission v. Alabama Midland Ry. Co. (168 U. S. 144)) which held that competition between carriers subject to the act created such a dissimilarity of circumstances and conditions as to validate departures from the long-and-short-haul clause. The result of that decision was practically to nullify the original fourth section, and from about 1897 until 1910 the Commission proceeded for the most part as though the fourth section had been eliminated from the act.

In response to public agitation, the Mann-Elkins Act of 1910 was passed, striking out the words, "under substantially similar circumstances and conditions." The long-and-short-haul clause as thus amended came before the Supreme Court for review in Intermountain Rate cases (234 U. S. 476) and the Court held that the effect of the amendment was to shift the powers conferred by the section as it originally stood, in that it took "from the carriers the deposit of power previously lodged in them" and vested "it in the Commission as a primary instead of a reviewing function."

The growth of Atlanta industrially can be attributed in a large measure to the prohibitions contained in section 4 of the act as amended in 1910, the requirements of which resulted in the removal of many unjust discriminations against Atlanta as to transportation rates that had existed prior to the 1910 amendment in favor of other southern cities. For instance, prior to that period, when Atlanta first began to grow industrially, the rates on stoves from such a point as Nashville, Tenn., to destinations in the southern portion of the State of Georgia were less in cents per 100 pounds than obtained for stoves manufactured in Atlanta, Ga., to these destinations.

Class and commodity rates applicable on various manufactured articles were in effect from such a point as Chattanooga, Tenn., to destinations in the States of Mississippi and Louisiana lower than

from Atlanta, Ga. Class and commodity rates were lower in amounts from the eastern seaboard via the rail routes to such a point as Birmingham, Ala., than to Atlanta.

Likewise, they were lower to New Orleans, La., and to other Gulf ports than to Atlanta. The rates on classified traffic and on commodity traffic from Ohio and Mississippi River crossings to the South Atlantic ports and from the Virginia cities to the Gulf ports were lower than were the rates to Atlanta, and in some instances the rates. from Virginia cities to the Gulf ports were even lower than were the rates on like commodities from Atlanta, Ga., to the same Gulf ports, although in most instances this traffic passed through Atlanta en route to its final destination.

When it was first proposed by Congressman Pettengill to amend the fourth section of the Interstate Commerce Act, there was not then pending before the Congress intelligently prepared legislation looking toward regulation by the Interstate Commerce Commission of waterway and highway carriers, and it may have seemed at that time that in the absence of adequate regulation of the waterway and highway carriers, the rail carriers should be free to meet the competition of these unregulated carriers by relieving the rail carriers of the long-and-shorthaul clause of the fourth section of the act.

However, there has been for some time before the Congress bills prepared by the Federal Coordinator of Transportation providing for comprehensive and adequate regulation of both highway and water carriers. Certainly until that proposed legislation is disposed of by Congress, no such drastic action should be taken by Congress as is contemplated by the bill we are immediately discussing. It seems unfortunate, indeed, that the regulatory legislation suggested by the Federal Coordinator of Transportation, and which would make unnecessary such a bill as is here being discussed, has apparently been sidetracked by Congress for one reason or another.

If the rail carriers are sincere and I believe they are-in their advocacy of legislation designed to regulate their competitors, particularly the highway and waterway carriers, certainly there can be no justification for insistence upon the passage of the Pettengill bill. The provisions of Mr. Pettengill's bill are inconsistent with the legislation proposed for the regulation of highway and waterway carriers.

However, it is regrettable to observe the apparent passive attitude of the railroads with respect to the proposed legislation looking toward the regulation of the other forms of transport not now under Federal regulation. On the other hand, the railroads have left no stone unturned in their fervent effort to secure support for this particular bill. The propaganda released by the railroads in support of this legislation indeed would do credit to the world-famous Hitler propaganda machine.

They have advanced en masse, so to speak. Many public addresses have been made. The country has been flooded with tons of printed literature. The solicitation force of the railroads was conscripted in a determined effort to secure needed public support. Thousands of telegrams to Members of Congress were sent by small shippers throughout the country at the solicitation of railroad representatives who, generally speaking, represented to these shippers that the repeal of the fourth section of the act to regulate commerce would inure to the shippers' benefit.