In other words, there was a total of 1,134 orders issued by the Commission either granting permanent relief or temporary relief as compared with 453 orders denying relief. Similarly, in 1933 the number of applications filed was 422; orders entered, 336; orders denying relief, 41; orders granting permanent relief, 97; and orders granting temporary relief, 198. In 1934 applications filed, 395; orders entered, 311; orders denying relief, 68; orders granting permanent relief, 77; and orders granting temporary relief, 166. (The statement above referred to is printed in the record as follows:) Statement showing disposition of Interstate Commerce Commission of fourth-section applications, received from carriers for past 10 official years, 1925-34, inclusive [From annual reports of the Interstate Commerce Commission] 1 Commission grants temporary relief in those cases where there is a possibility of elimination of competition and if that should occur the Commission requires that the rail carriers restore the higher rates. Mr. Chairman, I do not think the Commission has been so hardboiled in its interpretation of the long- and short-haul clause or the other provisions of the fourth section of the act as indicated by this record. I think very careful consideration should be given to this record of what the Commission has done during those years. Mr. MARTIN. You have been with the Commission, and I would like to ask you a question or two about the language in the present act. Mr. FERGUSON. Yes. Mr. MARTIN. In reference to the aggregate of the intermediates. The act provides that a carrier shall not charge greater compensation to the distant points than the aggregate of the intermediate, for transportation of passenger or like kind of property. Mr. FERGUSON. Well, you have not finished it. Mr. MARTIN. That is, for a shorter than for a longer distance. I just referred to the provision, how you construed the word "aggregate.' Mr. FERGUSON. I suppose there might be instances where a combination of the locals would be applied, where you would have a rate that would be added together, if added together, would be less than the intermediates. Mr. MARTIN. The way the law reads now is that the carrier shall not receive greater compensation for the transportation of passengers 635-35-60 or of like kind of property; it would seem to qualify the word "passengers", but must apply to rates to all places Mr. FERGUSON. Let me say this: That the same type of property or traffic, you might say Mr. MARTIN (continuing). I do not consider freight a like kind of property to passengers. Mr. FERGUSON. Well, they have tourist rates, first class and tourist rates out in the West, and you have to compare those rates. Mr. MARTIN. What I am trying to get at is the meaning of the transportation of passengers or of like kind of property. Mr. FERGUSON. Well, property has always been understood meaning traffic in goods. Mr. MARTIN. Now, let me ask you a question about the aggregate of the intermediate rates. Would that permit the piling up of the aggregate against one point? Here, for instance, you have 2 or 3 or maybe 4 intermediate points between 2 terminals. Now the carrier cannot charge more for the through rate than the aggregate of the intermediate. Mr. FERGUSON. Yes. Mr. MARTIN. Does that allow them to pile up those intermediates at one place and favor other intermediate places with lower rates? Mr. FERGUSON. I imagine that would be the result if the long- and short-haul clause is repealed. Mr. MARTIN. No; I am not speaking of that. I am asking if that result can be obtained under the present law? Mr. FERGUSON. I doubt it. Mr. MARTIN. A carrier cannot charge a greater compensation for a through rate than the aggregate of the intermediate? Mr. FERGUSON. That is right. Mr. MARTIN. Now, suppose they had 3 intermediate points, could most of the load be put on 1 of those points? Mr. FERGUSON. Not necessarily. Ordinarily in a rate adjustment if they desire relief by changing the transcontinental rate, which, by the way, is the maximum of the rates to the intermediate points, I doubt whether a situation like that could occur. The rate consummation to say Utah or Montana points could be worked out without there being a conflict in the law, where the longer distance would have a lower rate than some of the intermediate points. Mr. MARTIN. Very well. You may proceed. Mr. FERGUSON. Now, we feel that the principal trouble with the carriers today is the loss of traffic. They refer to loss of revenue, and loss of revenue is reflected by the same 50-percent loss of tonnage; loss of freight-car loadings; that is the difficulty with the carriers today and when the condition becomes more relieved you will not have this agitation, sharp agitation that you are dealing with today. Now, I have stated that the Midwest has been the place where most of this agitation has originally taken place. Each section is trying to get the benefit of what the other section has. The Middle West would like to be placed in the same position that the Atlantic seaboard is with regard to traffic and have the benefit of the water transportation but that would prevent New England from getting out to the Central West with their commodities. Mr. MARTIN. Where is "the Central West"? Mr. FERGUSON. Well, what I would term the Central West would include, you might say, the territory west of the Indiana State line, the Indiana and Ohio State lines, and the Missouri River. Mr. MARTIN. The Missouri River? Mr. FERGUSON. Yes; I might include the Ohio, too. Mr. FERGUSON. Probably. And that situation has grown out of the fact that each section wants the benefits that the other section has, and the members of the Commission or the carriers cannot equalize these geographical advantages as far as New England is concerned. It must have the water rates to get to the Southwest, because their connection with the rails from Chicago and St. Louis and other central points are of so much less distance they can get their commodities to those markets at a much lower rate. We have to have our water lines to enable us to do business in the far West and in the Southwest, and that is also true of the southern section of the country. Mr. HOLMES. In connection with the New Bedford Port, is there very much chiseling in and out of New Bedford? Mr. FERGUSON. I do not think so-well, there may be in the motor truck Mr. HOLMES. I am not speaking about that, but water transportation. Mr. FERGUSON. No; I do not think so. Mr. HOLMES. Well, are your lines pretty well regulated as far as rates are concerned in the intercoastal rates from New Bedford? Mr. FERGUSON. No; I do not think so. I would say we had the regulations that come under the intercoastal act of 1933; I think the Shipping Board Bureau endeavored to enforce some regulations and they have issued a proposed report citing many of the practices and rates as unlawful by certain of the carriers; two of the carriers particularly involved are those of the Kalmuth Co. and the Sheppard Steamship Co. Now, Mr. Chairman, the United States Government has invested, within the past 12 years, over $1,000,000 in improving the port at New Bedford. The Commonwealth of Massachusetts has an investment of $600,000-more than that-$750,000. We have 5 regular coastal vessels out of New Bedford; 4 up and down the East coast, and 1 to the Pacific coast, besides that the American-Hawaiian line as well as the Luckenback Line makes the port of Bedford. But I want it clearly understood that I am for regulation of all lines. But I also wanted it understood that I think the Interstate Commerce Commission should be so organized as to treat rates, water rates, truck rates, and rail rates, separately. The rail rates should not involve the water rates, nor the truck rates involve the rail rates. Mr. HOLMES. How does this pending bill handle that; do you feel that it subdivides the transportation? Mr. FERGUSON. It does that by the statute, and we may be able to rely on the Commission to reorganize itself into that manner of division of regulation to divide the methods of transportation within the statutory requirements. Mr. MARTIN. Have you completed? Mr. FERGUSON. Yes; I have completed. Mr. HOLMES. Just one more question. There is plenty of room for improvement insofar as regulation of water carriers is concerned, is there not? Mr. FERGUSON. Yes. Mr. HOLMES. And from your experience you also agree that is true of the motor trucks? Mr. FERGUSON. Yes. I am not for destructive rates of any kind. I think the rates should be compensatory and earn a profit. There is too much chiseling at the present time. Mr. HOLMES. I think perhaps I have made inquiry about this before: In your experience with the Interstate Commerce Commission you are not claiming that there should be no flexibility in the present provision of the long- and short-haul clause of the fourth section? Mr. FERGUSON. I am more or less of the opinion, Mr. Congressman, that the carriers ought to have some chance; there ought to be some possibility for the rail carriers to be in position to reasonably meet competition. But that competition would have to be based on the cost of rail transportation. That is, they should have to make some profit above their out-of-pocket costs and the rails should not be permitted to go out and cut rates to such an extent that would just merely enable them to meet their out-of-pocket cost merely to take traffic away from the water lines. Mr. MARTIN. Is that all? Mr. FERGUSON. I have nothing further. Mr. MARTIN. We thank you very much, Mr. Ferguson, for your statement. Mr. FERGUSON. Thank you. Mr. MARTIN. I believe that concludes the case for the opponents, with the exception of Mr. Furuseth, who will be here this afternoon. Mr. WEST. Mr. Chairman, I would like to be heard for a few moments. Mr. PETTENGILL. How long will it take? Mr. WEST. Only a few minutes, perhaps 10 minutes. I was on the list for yesterday, but could not be here. Mr. PETTENGILL. Very well, we will hear you now. STATEMENT OF HERBERT G. WEST, EXECUTIVE SECRETARY, INLAND EMPIRE WATERWAYS ASSOCIATION, INC., WALLA WALLA, WASH. Mr. WEST. Mr. Chairman and members of the committee, my name is Herbert G. West, of Walla Walla, Wash. My position is executive secretary of the Inland Empire Waterways Association, Inc., an organization whose membership is composed of commercial clubs, chambers of commerce, farm organizations such as the Washington State Grange, Oregon State Grange, Idaho State Grange, Eastern Oregon Wheat League, North Pacific Grain Growers, Inc., fruit organizations, livestock associations, manufacturers, jobbers and wholesalers of all kinds and classes of merchandise, individual producers and consumers living east of the Cascade Mountains in the Columbia and Snake River Watershed, commonly referred to as the "Inland Empire of the Pacific Northwest.' This association was organized in February 1934, bringing together under one head all former existing organizations and associations engaged in development work on the Columbia and Snake Rivers. It is incorporated under the laws of the State of Washington for the express purpose of promoting the navigation development of these rivers in the firm belief that this represents the only method whereby we can round out and develop a balanced transportation system in this territory, giving to the producers and consumers of this great area the same low-cost transportation afforded other sections of this Nation. This association is not an operating company in any sense of the word. We have no political affiliations, no transportation affiliations; its interest in this legislation lies solely in its desire to vigorously oppose any attempt to defeat our objective. We earnestly believe that to repeal the fourth section clause of the Interstate Commerce Act, commonly known as the "long- and shorthaul clause", would be to take a step backward in our transportation life. We earnestly believe that this legislation is based solely on the selfish desires of some to regain a lost monopoly in transportation. If this legislation is enacted to law, it will entail an enormous cost upon the producers and consumers of this territory which domestic and foregin market conditions do not warrant. In view of this, we are vigorously opposed to the passage of the socalled "Pettengill bill", which if enacted into law, would repeal the fourth section of the Interstate Commerce Act, commonly known as the "long- and short-haul clause". The steady, ordered, and progressive growth and development of the interior Pacific Northwest demands a balanced transportation system. Tremendous as has been the expansion of our transportation facilities in recent years, we realize that further and more comprehensive development is essential to serve the growing needs of agriculture, mining, lumbering, industry, and allied services. The balanced transportation of this region must be built upon the facilities of railways, highways, waterways, and airways, coordinated in the double purpose of transporting the farm, forest, mine and manufactured products of this great region to markets at the lowest possible cost to the producer and to insure the minimum transportation tax upon our consuming population. We are a large Nation with a great domestic commerce. The accessibility and cost of transportation are important to every element of the public. Litigation and negotiation has been carried on with the Interstate Commerce Commission for years in an attempt to secure lower and more equitable freight rates on the products of this territory, with but little or no success. However, in July 1932 the Shaver Forwarding Co., Portland, Oreg., started a river transportation service from Klickitat and Skamania Counties in Washington to Portland, Oreg. The rail rate on wheat at that time was $3.60 a ton, or about 10.7 cents a bushel for an average haul of about 95 miles. It was reduced to $2.50 a ton or about 7.5 cents a bushel. This company extended its service to The Dalles, Oreg., during the summer of 1935. The rail rate on wheat was reduced from $2.10 a ton, or about 6.3 cents a bushel, to $1.40 a ton, or about 4.5 cents a bushel. Practically the same ratio has prevailed through all points east to west as affected by water-truck competition. |