motor carrier violations. At present, such cases have to be handled under criminal procedures, a more complicated method.

This provision would also apply a level of fines five times that now provided for under the civil forfeiture statute. Finally, the proviso at the end of this section would assure that in cases where there is a reasonable question of the validity of a private carrier operation in dispute under the primary business test, the ICC should make an initial determination prior to any court action. A clear-cut violation could, however, be handled directly through the courts.

Senator LAUSCHE. Just one moment on that subject. You state:

Finally, the proviso at the end of this section would assuré that in cases where there is a reasonable question of the validity of a private carrier operation in dispute under the primary business test, the ICC should make an initial determination prior to any court action.

By "court action" do you mean a court decision?

Mr. GALASPIE. Actually it means interpreting by the court of the primary business test. That is what we mean here. In other words, if the question arose as to whether or not it was a bona fide private carrier operation and a private carrier was operating under the primary business test, if that came into play the Commission should take jurisdiction and make its determination as to whether or not in its opinion it was a truly bona fide private carrier, in which event the court would take the Commission's decision as prima facie evidence to make its decision.

Senator LAUSCHE. I see. Would an action be brought and, while it is pending and before the court took any action adjudicating the petition, would the Commission exercise its original power?

Mr. GALASPIE. The Commission could enter the case, and, in our opinion, the court would pend its case until the Commission made its determination.

Senator LAUSCHE. That clears it up for me.

Mr. SENDER. These are Commission-brought actions, are they not, sir?

Mr. GALASPIE. That is correct.

Mr. SENDER. Under section 3 the action would be brought by the Commission? These are not actions brought by private parties? Mr. GALASPIE. That is true. These are civil forfeiture actions. Senator LAUSCHE. All right. Proceed.

Mr. GALASPIE. The application of this proposal to economic violations is supported by the Transportation Association of America, and has the specific support of its user, investor, air freight forwarder, highway, railroad, and domestic water carrier panels. The remaining pipeline panel is not opposed to it. TAA does not, however, have a position on its application to safety violations.

While much more needs to be done, the ICC is to be commended for its legal action against unlawful for-hire carriers. A TAA tabulation of ICC cases handled in 1963 found that the Commission completed 432 court cases against illegal for-hire carriers, 379 of which were for operating without authority. The courts levied fines totaling nearly a half million dollars, averaging $1,277 for the 383 fines given.

These ICC cases show that violators are not just gypsy operators, since they included 109 shippers, 352 unregulated carriers, 67 regu

lated carriers, and 50 individuals. In addition, the Commission's legal staff handled 27 cases that resulted in cease-and-desist orders against 58 carriers and 47 shippers. The relatively small number of cease-and-desist cases shows the time-consuming nature of processing a case through the Commission and why direct court action is preferable. With passage of this provision for economic violations, it would be hoped that the number of ICC enforcement cases handled during each year would increase sharply, with a resulting decrease in illegal operations.

The first provision of section 4 of S. 1727 would enable the Interstate Commerce Commission, in court cases involving illegal for-hire operations, to obtain service of process upon motor carriers or brokers and to join other necessary parties without regard to where the carrier or other party may be served.

I understand there has been a change made in the bill as printed in that case and that the parenthetical clause will be included in the final reading of the bill.

Senator LAUSCHE. Yes.

This section is thus identical to S. 1728, another bill now under consideration. Transportation Association of America favors such legislation.

Present rules governing procedures in such court proceedings limit the service of process to the territorial limits of the States in which the court sits. The purpose of this proposal, therefore, is to assure that neither the illegal operator nor the participating shipper avoids service of process, as is now possible, if located, or they remain, outside of the State where the legal action is being taken.

This is very important, since the operations of such carriers often extend into many States.

Such legislation would also serve as a deterrent to shippers who might be considering unlawful operations, particularly large ones very jealous of their reputations with the general public, since they would be more susceptible to becoming a party in an illegal for-hire court case.

It is obvious that without shippers' cooperation, illegal operations could not take place. Even with the limitations now placed in ICC court cases, many shippers are made parties to them. For example, in 1963, the courts found 109 shippers guilty of illegal for-hire operations, or aiding and abetting them, and the ICC issued cease-and-desist orders against 47 shippers for the same offenses.

It can be seen that this provision, coupled with other provisions of S. 1727, should materially strengthen the available enforcement tools to curb illegal for-hire trucking operations.

Part 2 of section 4 of S. 1727 would permit any person injured by an illegal for-hire operation, whether performed by a regulated or unregulated carrier, to seek direct injunctive relief in a Federal district

court.

Now, in the printing of this bill I have here it includes a parenthetical clause which would eliminate regulated carriers, but we understand that parenthetical clause is being removed.

Mr. GALASPIE. The ICC would be served with a copy of any such application for relief, and it could appear as of right in any cases that it believes necessary or desirable. To prevent harassing suits, the plaintiff would be required to post bond, and the party prevailing may,

if the court so decides, recover both court costs and reasonable attorney's fees.

Two provisos are included in this provision. One would assure that the ICC assume responsibility for interpreting, when there is a reasonable question of interpretation, certificates, and permits issued by the Commission.

The other proviso, which is identical to that shown in section 3, would assure that the ICC assume responsibility for making a determination in those cases where there is reasonable question of the validity of a private carrier operation in dispute under the primary business test. If the court feels the initial evidence indicates a clearcut violation, however, it can take jurisdiction. We would have no objection to an additional proviso, if offered, to permit the ICC to take jurisdiction over any case upon notice to the court.

With respect to these two provisos, as well as the one in section 3, I should like to note that they were worked out after very careful consideration by a special subcommittee of the Transportation Associa tion of America user panel, of which I served as chairman. This subcommittee had top-level representation on it of private carrier interests, who agreed to the provisos, which were subsequently approved by the 83-member user panel.

Since this provision would permit parties to bypass the ICC and seek relief directly in the courts, it has been given very careful consideration by the various Transportation Association of America panels. With the provisos and other protections included, such legislation is supported by the Transportation Association of America. More specifically, it has the support of the Transportation Association of America user, investor, freight forwarder, highway, air, railroad, and domestic carrier panels, and its pipeline panel does not oppose it. Passage of this provision would greatly strengthen the enforcement powers available to stop illegal for-hire operations, since it would permit parties other than the Interstate Commerce Commission to take court action against outright violations, yet provide reasonable safeguards against abuse of this privilege.

Sections 5 and 6 of S. 1727 would provide a means by which shippers, including Government shippers, could seek reparations from allegedly unreasonable rates charged them by regulated motor carriers and freight forwarders, even though such rates had been filed in public tariffs and allowed to take effect by the Interstate Commerce Commission. It would do this by permitting a shipper to seek such reparations in a court of competent jurisdiction, and the Interstate Commerce Commission would be called on to make an administrative determination in aid of the court. Transportation Association of America supports this section.

The effect of this legislation would be to nullify the Supreme Court's decision in the TIME case, in which it ruled that neither the Interstate Commerce Commission nor the courts had the power to consider the reasonableness of a motor carrier's rates that had been published in accordance with Interstate Commerce Commission tariff procedures. This particular subject has been given very careful consideration by the various Transportation Association of America panels, since the Interstate Commerce Commission, as well as shipper interests, have for some time been seeking legislation to extend to both motor carriers

INTERSTATE COMMERCE ACT AMENDMENTS

and freight forwarders reparations provisions similar to those now applicable to railroads. The compromise position finally agreed upon by the panels is identical to the procedure proposed in these two sections. The Transportation Association of America user and investor panels specifically approved such a position, while the other six panels did not oppose it.

One argument in support of modified reparations for motor carriers and freight forwarders is the fact that both of these modes primarily handle relatively small shipments, thus are potentially subject to a large number of reparations claims for small amounts if allowed to be processed through the Interstate Commerce Commission.

For example, about 97 percent, or 230 million, of the total number of shipments handled by general property motor carriers in 1962 were for less than truckload-or LTL shipments-handling 22 million of them in 1962; furthermore, these shipments weighed an average of only 400 pounds each.

Several years ago, the Transportation Association of America cooperative project decided to review the various Interstate Commerce Commission legislative recommendations for the purpose of taking positions on any that are of direct interest or concern to any of its panels. Of the 15 Interstate Commerce Commission-sponsored bills now under consideration, the Transportation Association of America. has taken positions on all or parts of 8 of them.

Before stating the association's views on these eight bills, we should like to commend the Commission for its very constructive effortand perhaps a somewhat unique one-to rid itself of what it considers to be excessive areas of regulatory jurisdiction. The very fact that a Government agency is not only willing, but actually seeks, to relinquish areas of its responsibility even though they may be relatively small-deserves praise. The principle of keeping regulation to the minimum required in the public interest is strongly supported by the Transportation Association of America.

As to the bills on the Transportation Association of America has taken positions, in only one instance do we oppose the Commission, and in that case only in part. Therefore, we shall confine our comments to the following very brief description of these bills and of the Transportation Association of America's views:

S. 1143, which would provide, after hearing, for the revocation of dormant water carrier certificates or permits, is supported by the Transportation Association of America.

In

Mr. HAMMOND. Our position says either in whole or in part. other words, we go along with the idea that they could actually revoke a portion of the certificate.

Senator LAUSCHE. What you have just said has a relationship to the statement made by Mr. Webb?

Mr. HAMMOND. That is correct. I am making it for that direct purpose. Yes, sir.

Senator LAUSCHE. Thank you.

Mr. GALASPIE. S. 1145, which would exempt certain types of off-line railroad trackage from ICC regulatory jurisdiction, is supported by the Transportation Association of America.

S. 1150, as the Transportation Association of America views it, would do two things. First, it would eliminate the necessity for prior

ICC approval for a person to hold the position of officer or director of more than one railroad where the carriers are commonly controlled, the Transportation Association of America supports this portion of

S. 1150.

The other portion would prevent, without specific ICC approval, the holding by different members of the same firm of the position of officer or director of more than one railroad if they are not under common control. The Transportation Association of America opposes this portion of S. 1150. This proposal was reviewed by our cooperative project, and its user, investor, and railroad panels all opposed it; the other five panels indicated they did not object to the Transportation Association of America's taking a negative position. Reasons for such opposition are that it is too restrictive in nature and that its need has not been shown.

S. 1152, which would place certain restrictions on the use of ICC investigators in court suits involving damage claims, is supported by the Transportation Association of America.

S. 1728, which is identical to the first part of section 4 of S. 1727, with corrections, is supported by the Transporation Association of America.

S. 1732 would make ICC-regulated motor carriers and freight forwarders subject to reparation provisions similar to those now applicable to the railroads. As explained in our testimony covering sections 5 and 6 of S. 1727, the Transportation Association of America favors the passage of modified reparation provisions as set forth therein.

Senator LAUSCHE. How do the provisions of the House bill that has been passed relate themselves to your views?

Mr. GALASPIE. The House bill takes the modified version.
Senator LAUSCHE. Your view?

Mr. GALASPIE. Yes, sir.

Mr. HAMMOND. One hundred percent.

Mr. GALASPIE. S. 1733, as the Transportation Association of America views it, can be separated into two parts. One portion would extend civil forfeiture procedures to illegal for-hire operations and at the same time establish a level of fines for such violations double those now applicable under such procedures. While the Transportation Association of America supported such a proposal last year, it now favors the adoption of section 3 of S. 1727-as it applies to economic violations-because of the primary business test proviso.

The other portion of S. 1733 would extend civil forfeiture procedures to motor carrier safety violations. As indicated before, the Transportation Association of America does not have a position on this proposal.

In summary, we should also like to urge that the subcommittee take favorable action at the earliest possible date on the following bills, with modifications as proposed: S. 1727, S. 1143, S. 1145, S. 1146, and S. 1152. We say this for several reasons. The economic enforcement provisions of S. 1727 will help considerably in solving a very troublesome problem in the transportation field today-the illegal for-hire trucking problem. This bill would also fill a gap that now exists with respect to motor carrier and freight forwarder reparations. The other bills would relieve the ICC of certain responsibilities no longer considered necessary in the public interest.