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commodities when being used to transport the bulk commodities. The Commission's so-called no-mixing rule has been sustained by the reviewing courts, most recently in Gulf Canal Lines, Inc. v. United States, 258 F. Supp. 864 (S.D. Tex. 1966), aff’d mem., 386 U.S. 348(1967), upholding the Commission's decision in No. W-C-5, Mississippi Valley Barge Co., Exemption, Section 303 (b), 311 I.C.C. 103(1960). The effective date of the Commission's ruling in that proceeding has been postponed from time to time upon the request of the Chairmen of the Senate and House Commerce Committees to permit Congressional consideration of legislative amendments and is now established to be September 28, 1970.

The subject bill, in effect, would abrogate the so-called no-mixing rule and permit the concurrent transportation in a vessel, including tows of barges, of commodities not in bulk and commodities in bulk moving under the exemption of section 303(b) of the Act, subject, however, to the requirement that there be disclosure of the charges for the transportation of the bulk commodities, as provided by the provisions of section 316 of the Act.

While we continue to believe that the best solution is the total repeal of section 303(b) of the Act, the subject bill represents a move in the right direction. At present bulk commodities, such as coal, grain, chemicals and the like, are transported wholly free of regulatory requirements by certain water (arriers, under published rates and the other obligations imposed by the Act, and by other water carriers, at least some of the time. Railroads, of course, are subject to complete economic regulation. Such inconsistency in the burdens imposed upon transportation not only places the railroads at a serious competitive disadvantage in their efforts to solicit traffic within the reach of the waterways, but it is completely disruptive of stability in transportation upon the Nation's rivers and lakes. Obviously, traffic is not likely to move by water carriers which now publish rates and are subject to other regulatory requirements so long as other water carriers are free to handle the identical traffic at negotiated rates and free of any other statutory obligations. In the Commission's view, the matter is best resolved by repealing the bulk commodities exemption of section 303(b) of the Act altogether and subjecting all the affected traffic uniformly to the economic regulations administered by the Commission under the Interstate Commerce Act. The Commission has recommended on a number of occasions that the exemption provided by section 303 (b) be repealed in its entirety in the interest of providing equality of competitive opportunity and regulatory treatment among the several modes of transportation. See, for example, the 76th Annual Report of the Interstate Comerce Commission 208 (1962). ('ontinuance of the present exemption, even as modified by the subject bill, is neither conducive to fair and effective regulation nor to achieving the goals of the National Transportation Policy.

Nevertheless, the subject bill would affect the amendment of the exemption of section 303(b) of the Act in a desirable direction. We favor the requirement that, if the transportation of bulk commodities is to be perunitted free of any other regulatory restraints, at the very minimum there be full disclosure of the rates and charges upon which such exempt transportation is performed. This, as we understand it, the subject bill would accomplish by requiring all water carriers, whether otherwise subject to the requirements of the Act, to publish rates and charges for the transportation of exempt bulk commodities in ta riffs which meet the requirements of section 306 of the Act. Furthermore, we find merit in fostering the maximum utilization of the equipment plying the waterways and in not impeding the efficiency and economy of water carrier operations by precluding the mixing of bulk and non-bulk commodities in a single vessel, including tows of barges, under the differing regulatory requirements that presently apply. Finally, we agree that it is desirable, that the Commission be afforded the opportunity to study the effects of the amendment and to report to the ('ongress at the conclusion of the two-year trial period contemplated by the legislation as to its effect and the need, if any, for further revision of the statute. Thus, although the Commission has consistently favored repeal of section 303(b) of the Act, enactment of the proposed legislation, at this juncture, is acceptable to the Commission. Sincerely yours,

GEORGE M. STAFFORD, Chairman.

DEPARTMENT OF AGRICULTURE,

OFFICE OF THE SECRETARY,

Washington, D.C., September 29, 1970. Hon. W'ARREN. G. MAGNUSOX, (hairman, Committee on Commerce, C.S. Senate.

DEAR MR. CHAIRMAN : This responds to your request for our comments on H.R. $298, an act passed by the House of Representatives on August 12, 1970, "To amend section 303(b) of the Interstate Commerce Act to modernize certain restrictions upon the application and scope of the exemption provided therein.”

The Department recommends passage of the bill as originally introduced in the House.

The original bill would have deleted the "custom of the trade" definition of bulk commodities. This is necessary if we are to recognize the technological advances that have taken place in shipping practices and barge line transportation since this section was enacted in the Transportation Act of 1940. Should this archaic definition be continued, as is contemplated by the present bill, the future development of bulk shipping economies will be denied to agriculture commodities.

The original bill would also have deleted the definition of what constitutes a vessel. This would have set aside the “no mixing” interpretation of the statute by the Interstate Commerce Commission in Mississippi Valley Barge Line Company Eremption, 303(b), 311 ICC 102 ; Order Enforced and Petition Dismissed sub nom. Gulf Canal Lines, Inc. v. United States of America and Interstate Commerce Commission, 258 F. Supp. 864 (S.D. Tex. 1966) aff'd 35 U.S.L.W. 3328 (U.S. Mar. 20, 1967). The “no mixing" interpretation holds that the exemption is lost if the tow contains more than three bulk commodities or if the tow contains any nonbulk commodities. While the present bill will give the regulated carrier the right to mix nonbulk commodities with bulk commodities, it will not give the small unregulated carrier the right to carry more than three bulk commodities. It is quite possible that the efficient use of transportation equipment, through the assembly of large tows without regard to commodity mix, could lead to reduced transportation costs.

Finally, to subject the unregulated water carrier to the provisions of section 306 of the Interstate Commerce Act, as proposed in the amended version, would not be in the best interest of agriculture. This section would require tariff publications designating routes, origins and destinations, rates, rules and charges. Also, once the unregulated carrier has published his minimum rates, he would be required to maintain them for at least 30 days. The added revenue needed to comply with these requirements would most likely appear in the form of increases in transportation changes or curtailments of service to the agricultural shipper. Further, the unregulated carriers could not sit down collectively to set rates as do the regulated carriers without subjecting themselves to the antitrust laws. Thus, in reality, the unregulated carrier would become subject to regulation without obtaining any of the advantages of the regulated carrier.

The Office of Management and Budget advises that there is no objection to the presentation of this report from the standpoint of the Administration's program. Sincerely,

J. PHIL CAMPBELL, Under Secretary.

OFFICE OF THE SECRETARY OF TRANSPORTATION,

Washington, D.C., September 30, 1970. Hon. WARREN G. MAGNUSON, Chairman, Committee on Commerce, U.S. Senate, Washington, D.C.

DEAB MR. CHAIRMAN: This letter offers the views of this Department on H.R. 8298, which has been reported favorably by the House Interstate and Foreign Commerce Committee on September 25, 1969, and passed by the House on August 12, 1970, and which is now pending before your Committee.

As originally introduced, H.R. 8298 would have changed the scope of the exemption from economic regulation afforded by section 303(b) of the Interstate Commerce Act in the following ways:

1. It would have eliminated the obsolete and obscure definition of bulk commodities as being those carried in the "custom of the trade" as of June 1, 1939.

2. It would have expanded the scope of the exemption afforded by the present law which limits the scope of the exemption to not more than three bulk commodities in a “single vessel," a vessel being defined as an entire tow of barges. By eliminating this definition, H.R. 8298 would have permitted the application of the exemption to each barge. In addition to expanding the scope of the exemption generally, this change would have, in effect, overcome

the Commission's "mixing rule" decision at the same time. DOT supported this bill in its comments to the House Interstate and Foreign Commerce Committee. That Committee, however, reported out an amended bill on September 25, 1969, which was passed by the House on August 12, 1970, which would :

1. Require all water carriers (certified or not) hauling bulk commodities to publish tariffs on 30 days notice and abide by them, subject to the usual penalties in the Interstate Commerce Act;

2. Provide that as to unregulated bulk commodities mixed in the same barge with regulated commodities, the exemption from economic regulation under the Interstate Commerce Act as to the regulated commodities would continue, modified only as to the tariff publishing requirements in (1) above;

3. Provide that this legislation shall be in effect for two years from the date of enactment and that 18 months from the date of enactment the ICC will file a report to Congress on the effects of the amendment on transportation operations under section 303(b). The Commission would also be empowered to require reports from water carriers operating under the exemption in (2) above containing such information as the Commission may prescribe. Existing section 303 (b) would not be altered as to water carriers

operating solely within a harbor or within the Great Lakes. As your Committee is aware, the Department would have preferred the enactment of H.R. 8298 as originally introduced since it would have both modernized and liberalized what, in our view, are obsolete and unduly restrictive regulatory requirements that are of doubtful value in present-day competitive transportation conditions. Nevertheless, it is our view that the so-called “mixing rule" dispute which has perplexed the Commission, the courts, the Congress for over a decade requires resolution. This resolution is provided, at least temporarily, by the bill now before your Committee. If favorable consideration is to be given this legislation, however, we would urge that the following amendments be added :

First, we believe that the bill's provisions should be effective for three years, rather than two as proposed in the bill, and that the Department, rather than the Interstate Con berce Commission, she ild conduct the study called for by section 2 of the bill. In our view, the additional year's application is essential for the gathering and assessment of the information required to evaluate the effects of this legislation. Moreover, the issues presented in this legislation involve basic matters of national transportation policy, rather than solely questions of the proper scope of economic regulation by the Commission. For this reason, we believe the Department is the more appropriate agency to conduct the study. We, of course, will invite the support and cooperation of the Commission in this effort.

Second, we believe the bill should be amended so as to eliminate the so-called "custom of the trade” provision. There is no reasonable explanation for the retention of this obsolete and confusing provision of the present law. In lieu of eliminating this provision entirely, we would have no objection to changing the operative date of this provision from June 1, 1939 to January 1, 1970, thus reflecting the economic and technological changes which have occurred over the last 30 years.

Aside from these two amendments, we believe that clarification, either through specific amendments or appropriate legislative history, is required on the following: 1) the extent to which it is legally permissible for water carriers required to file tariffs under section 1 of the bill to designate a common agent for the publication and filings of such ta riffs : 2) clarification of what constitutes, under section of the bill, a water carrier "operating solely within a harbor" and 3) clarification that this bill is not intended nor is to have the effect of subjecting the heretofore exempt water carriers encompassed by it to a definition making them "regulated carriers” or a mode of transportation subject to the Interstate Commerce Act. This would be in accord with the Supreme Court's decision in the Ingot Molds Case (American Lines v. L.&N.R. Co. 392 U.S. 571, 593 (1969)) insofar as it denied the protection of section 15a (3) of the ICC Act to nonregulated carriers. All of the above points are set forth in greater detail in the Department's letter of February 20, 1970, to Chairman Colmer of the House Committee on Rules, a copy of which is enclosed.

in our view, inclusion of all or substantially all of the foregoing amendments and clarifications render H.R. 8298 in its amended form reasonably acceptable. Subject to these comments, we would not object to the enactment of H.R. 8298 since, as noted, it does provide a temporary basis for solving a vexing problem.

The Office of Management and Budget has advised that there is no objection, from the standpoint of the Administration's program, to the submission of this report for the consideration of the Committee. Sincerely,

JAMES A. WASHINGTON.

OFFICE OF THE SECRETARY OF TRANSPORTATION,

Washington, D.C., February 20, 1970. Chairman WILLIAM M, COLMER, House Committee on Rules, The Capitol, Washington, D.C.

DEAR MR. CHAIRMAN: This letter offers the latest views of this Department on H.R. $298, now pending before your Committee.

As originally introduced, H.R. 8298 would have changed the scope of the exemption from economic regulation afforded by section 303(b) of the Interstate Commerce Act in the following ways:

1. It would have eliminated the obsolete and obscure definition of bulk commodities as being those carried in the "custom of the trade" as of June 1, 1939.

2. It would have expanded the scope of the exemption afforded by the present law which limits the scope of the exemption to not more than three bulk commodities in a single vessel," a vessel being defined as an entire tow of barges. By eliminating this definition, H.R. 8298 would have permitted the application of the exemption to each barge. In addition to expanding the scope of the exemption generally, this change would have, in effect,

overcome the Commission's "mixing rule” decision at the same time. DOT supported this bill in its comments to the House Interstate and Foreign Commerce Committee. That Committee, however, reported out an amended bill on September 25, 1969, which would :

1. Require all water carriers (certificated or not) hauling bulk commodities to publish tariffs on 30 days notice and abide by them, subject to the usual penalties in the Interstate Commerce Act;

2. Provide that as to unregulated bulk commodities mixed in the same barge with regulated commodities, the exemption from economic regulation under the Interstate Commerce Act as to the unregulated commodities would continue, modified only as to the tariff publishing requirements in (1) above;

3. Provide that this legislation shall be in effect for two years from the date of enactment and that 18 months from the date of enactment the ICC will file a report to Congress on the effects of the amendment on transportation operations under section 303(b). The Commission would also be empowered to require reports from water carriers operating under the exemption in (2) above containing such information as the Commission may prescribe. Existing section 303(b) would not be altered as to water carriers

operating solely within a harbor or within the Great Lakes. When the reported bill came to your Committee, the granting of a rule was opposed on two occasions by the Department of Transportation and by others. In addition to favoring the original bill on its merits, we were of the view that a more comprehensive and balanced approach should be developed. To this end, we undertook the preparation of both a proposed amendment to the rule of intermodel ratemaking in the Interstate Commerce Act, section 15a (3) and a possible compromise version of H.R. 8298. These amendments were to be viewed as a package. However, as matters developed, no strong support was elicited for this approach from any quarter. In the circumstances, the question was presented as

to what should now be the appropriate posture of this Department. We recognize that both Commerce Committee chairmen in the Congress have shown their support for a legislative resolution of this matter by requesting the ICC to withhold until July 1, 1970, the taking effect of its W-C-5 decision which barred the mixing of regulated and unregulated commodities in the same tow.

While we would prefer the passage of H.R. 8298 as originally proposed were an open rule now to be granted DOT would urge that the following amendments and clarifications be supported :

A. DOT would be substituted for the ICC as the agency to conduct the study with the right to require reports, and the law would be effective for three years with the study due in 30 months. We are of the view that this Department is more disinterested and more appropriate an agency than the ICC to conduct the study. A 30-month study rather than one of 18 months is deemed necessary because of the time frame and the amount of information required on which to base any reasonable evaluation of the effect of the law

B. Elimination of the June 1, 1939 “custom of the trade” provision. There is no reasonable explanation for a retention of this feature of present law. This 30-year old anachronism fails to recognize economic and technological changes which have occurred over the years. Alternatively, we would be agreeable to a change in the "custom of the trade” date to January 1, 1970.

C. The provisions of section 5a of the Interstate Commerce Act should be made specifically applicable to protect the many small carriers who will have to file tariffs. Presently, section 5a protection is available to the railroads, the regulated trucks, and the regulated barge lines. Since the water carriers who would be required to file tariffs would, through the very act of tariff filing on 30-days notice, open themselves to section 5a-protected compeiition, fairness would seem to require that they be accorded similar treatment. Alternatively, we would be agreeable to a clarification in the floor debate to the effect that enactment of H.R. 8298 in its amended form would not preclude water carriers required to file tariffs under its provisions from designating a common agent to arrange for the publication and filings of such ta riffs.

D. Clarification as to what constitutes a water carrier operating solely within a harbor. There is presently a significant number of carriers operating in and also around harbor areas. It would probably be more appropriate and clear to utilize statutory language similar to that contained in section 303 (g) (1) of the Interstate Commerce Act to define the coverage contemplated by the statute.

E. Clarification that this bill is not intended nor is it to have the effect of subjecting the water carriers encompassed by it to a definition making them "regulated carriers" or modes of transportation subject to the Interstate Commerce Act. This would be consistent with the temporary and limited nature of the bill and would be in accord with the Supreme Court's Ingot Molds decision (American Lines v. L. & N.R. Co., 392 U.S. 571, 593 (1969)) insofar as it denied section 15a (3) ratemaking protection to nonregulated

carriers. In sum, we are of the view that all or substantially all of the foregoing amendments and clarifications will render H.R. 8298, as amended, reasonably acceptable. In addition, it will permit the Congress to resolve, at least temprarily, a dispute raging before the Commission, the courts, and the Congress for many years.

The Bureau of the Budget has advised that there is no objection from the standpoint of the Administration's program to the submission of this report for the consideration of the Committee. Sincerely,

JAMES A. WASHINGTON, Jr.,

General Counsel.

NATIONAL GRANGE,

Washington, D.C'., June 2, 1969. Hon. SAMUEL N. FRIEDEL, Chairman, Subcommittee on Transportation and Aeronautics, Committee on

Interstate and Foreign commerce, House of Representatives, Washington,

D.C. DEAR MR. CHAIRMAN : The Transportation Counsel of the National Grange attended all sessions of the hearings before your subcommittee on May 20, 21, and 22, 1969, on the above designated bills to amend Section 303(b) of the Interstate Commerce Act regarding the so-called water carrier mixing rule—and similar

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