Mr. HOBSON. No, sir, they are not, and they do not pay any of these taxes. They just merely go down the highway and in many, many instances I would say approximately 90 to 95 percent of the time they don't have adequate insurance coverage. They could not meet the State requirements nor the Federal requirements as pertain to insurance. They have absolutely no safety programs. They maintain no logs, no systematic inspection reports. They just go down the highway and that is it.

Senator MONRONEY. Do they have to operate under daylight-todusk regulations, or do they move at night at the hazard of other traffic safety?

Mr. HOBSON. Senator, let me answer that in this way: Of course your various States have different regulations insofar as traveling after daylight hours. Pertaining to the modern-day mobile home, which is 10 feet in width, they must conform to the regulations that the State prescribes, and that means no night driving.

However, here again the fact that they are not regulated in any size, shape, or form, they have nothing to lose by operating after night or against the various State restrictions.

Senator MONRONEY. Your list could be taken from a scheduled or regulated carrier?

Mr. HOBSON. From a regulated carrier our list can be revoked, and we cannot place ourselves in that position. However, they have absolutely no regulation so they have nothing to lose.

Senator MONRONEY. When you are regularly listed you also put both State and Federal authorities on notice to come get your taxes? Mr. HOBSON. Yes, sir.

Senator MONRONEY. So you have not much chance of avoiding the tax collector, is that right?

Mr. HOBSON. We have none, sir, absolutely none.

Senator MONRONEY. Can you give us any idea of how much taxes the Federal Government might be losing, and the States, in this unlisted and illegal movement?

Mr. HOBSON. Here again I would say literally hundreds of thousands of dollars yearly. I have no figures here with me.

Senator MONRONEY. The point that I am getting at is that the Congress and the Government are a little selfish in spending money. We like to see a return. What I am getting at is, Do you think several thousand dollars spent in increasing enforcement of the law which no one denies is in existence, to see that unregulated and unlisted carriers are not participating in violation of the Federal laws, that would probably return many times the expense of these enforcement men back in the Federal Treasury and State treasuries through adequate enforcement?

Mr. HOBSON. Very definitely, Senator.

I would like at this time, if I could, to-as I said in my statement. the State of Florida has been most cooperative with the members of our conference. They have been most cooperative.

As I stated previously, the Commission receives this report each month. In the February report of 1961 there was one individual who was picked up on four different occasions, and the State collected $3,000 in fines from this one individual.

Mr. WELLS. Mr. Chairman, I was under the impression that possibly 3 years ago there was a statement filed with your committee by Mr. Jelsman giving an analysis in that regard. I may be in error.

Senator SMATHERS. We did have a statement, but everybody said it was just his own theory about it. He used to work on this committee. He used that argument. He had charts and everything. But it wasn't as convincing as we would have liked to have had it. But I am satisfied it is true. Of course we can speculate as to what things will be in the future, which is always hard to prove.

Mr. WELLS. I don't know of any way in which a precise measurement of the difference could be determined. It relates, of course, to the taxable income of a great variety of classes, and it would be difficult to make any precise estimate on it. But I feel that you are entirely correct.

Senator SMATHERS. And I feel that you are entirely correct. We have to keep saying it with more fervor and with more conviction and maybe we can convince more people.

Mr. WELLS. The Florida citrus and vegetable industries have always endeavored to support not only sound transportation legislation but also sound and practical interpretation and application of the laws as enacted. To that end we have appeared in the numerous proceedings such as the Trip-Leasing case and the Determination of Exempt Commodity proceeding before the Commission; and we supported the Trip-Leasing legislation a few years ago as well as the so-called rollback legislation as to frozen foods in 1958.

As to the latter, we met with representatives of the fruit and vegetable industries and frozen food industries of the Nation, and with representatives of the Association of American Railroads and American Trucking Association, in Washington and Chicago. As a matter of fact, the first proposed bill with respect to the rollback of the legislation affecting the interpretations of certain frozen foods as being exempt agricultural commodities, was presented to the chairman of your subcommittee in company with a representative of AAR and a representative of ATA. At that time it was our impression and understanding that the proposed rollback of the exemption with respect to frozen foods was all that ATA and AAR desired, and that with such enactment they would not further seek to eliminate the exemption under section 203 (b) (6) as it applies to fresh fruits and vegetables. Fruits and vegetables are grown in Florida, principally for sale, either in fresh fruit and vegetable channels or as canned products or as frozen concentrates. Because of the huge volume produced, the amounts consumed in the fresh form in Florida are relatively insignificant. The major consuming area of our fresh fruits and vegetables is the eastern part of the United States, the great centers of population extending from Kansas City to the eastern seaboard.

Our canned citrus products and the more recently developed frozen citrus juice concentrates are marketed in every State of the Union.

Mr. HOBSON. No, sir; I don't believe they are lax in other modes of automotive transportation at all. It is just the fact that there has been nothing done in the mobile home industry.

Senator MONRONEY. After all, if somebody is carrying a truckload of whisky-and sometimes I am sure that whisky gets across State lines where the taxes are lower; and my State was a prohibition State until about a year ago and I am sure that there must have been a vast movement of spiritous beverages coming in there-after all, it would be a little easier to hide a few cases of whisky than it would a house, and I just cannot understand why anybody with even 3030 vision could not detect a house going down the road.

Mr. HOBSON. That is for sure, sir. That is for sure.

As I stated, there are many guises under which the illegal operators operate. The dollar-back lease, the buy-and-sell agreement that was gone into here this morning by the gentleman from the ATA. There are many ways of getting around the regulations.

Here again as to why the Commission has not taken any action against the mobile home industry is beyond me. Because, as you stated, it is pretty hard to hide a 50-foot trailer going down the highway or crossing from one State to another.

Senator MONRONEY. Even if you could not see the house, I understand from one of my constituents, Mr. Rainwater, that one firm in Florida, I believe it was, has gone so far as to expropriate the license number that his company enjoys and that photographs have been submitted to the ICC by a man who painted the sign on the truck, and who has given an affidavit, and all, and this matter was laid before the ICC and still nothing was done about the illegal expropriation of a license given to one company and used without the consent, knowledge, or permission by one of these operators in the State of Florida.

Mr. HOBSON. Yes, sir.

The arrest I referred to, where the State fined him $3,000, is exactly one that you got through citing. The State found this illegal transportation going on and they stopped it. Insofar as the Commission is concerned, I know of no action thus far that has been taken on that. Maybe Mr. Rainwater might be able to answer that better than I, because it was with his particular company.

Mr. RAINWATER. To my knowledge there has been no activity taken on that, even though not only Florida caught the same individual but Arkansas has likewise prosecuted the same individual.

Senator MONRONEY. It is rather adding insult to injury; not only does he engage in the illegal movement of trailers without a Federal license, but then to counterfeit somebody else's license and still not observe this illegal operation going on is really interesting.

Mr. RAINWATER. We anticipate taking legal action against this individual for the use of our permit, and are going to try to recover damages on that basis.

Senator MONRONEY. Won't you wind up, if this is the only way that a man who is successful in all the pleadings and hearings before the ICC in obtaining a license, if all he gets is a do-it-yourself kit to bring about the legal rights, it will be quite expensive.

Have you talked to anybody at the ICC or any of their agents?

Mr. RAINWATER. Yes, we have. Our district supervisor is so cognizant of the fact that he has proposed himself to come into Washington in our behalf and discuss it with the Commission.

Senator MONRONEY. And that is who?
Mr. RAINWATER. Mr. C. L. Phillips.
Senator MONRONEY. Where is he stationed?
Mr. RAINWATER. Oklahoma City.

Senator MONRONEY. He did not come in?

Mr. RAINWATER. No, sir. He was not permitted to come in.
Senator MONRONEY. Who was he not permitted to come in by?

Mr. RAINWATER. His immediate superior.

Senator MONRONEY. Who is his immediate superior, do you know? Mr. RAINWATER. Mr. B. H. English.

Senator MONRONEY. Where is he stationed?

Mr. RAINWATER. Fort Worth.

Senator MONRONEY. For the purpose of the record, would you state your full name and your connection with the company?

Mr. RAINWATER. I am C. A. Rainwater, executive vice president, National Trailer Convoy, home office Tulsa, Okla.

Senator MONRONEY. And you operate a great many tractors engaged in this business?

Mr. RAINWATER. We have on an average 550 tractors operating year round.

Senator MONRONEY. And licensed to operate in how many States? Mr. RAINWATER. All 48.

Senator MONRONEY. Sir?

Mr. RAINWATER. All 48 of the continental States.

Senator MONRONEY. Forty-eight of the fifty States?

Mr. RAINWATER. Yes, sir.

Senator MONRONEY. You do not deliver them to Hawaii yet, or to Alaska?

Mr. RAINWATER. A few to Alaska, yes.

Senator MONRONEY. A few to Alaska?

Mr. RAINWATER. Yes.

Senator MONRONEY. How do you deliver them?

Mr. RAINWATER. We interline with the steamship companies and also have taken some over the Alkan Highway.

Senator MONRONEY. How has this affected your business?

Mr. RAINWATER. Conservatively speaking, we were off at least 40 percent last year over the previous year.

Senator MONRONEY. Forty percent?

Mr. RAINWATER. That is right.

Senator MONRONEY. In other words, this has grown up more in the last year?

Mr. RAINWATER. It is definitely increasing to gigantic proportions as to our revenue. In fact, we might find it is more profitable to operate as they do if it continues as it is.

Senator MONRONEY. Actually the slowdown in business and the building up of unemployment would operate to increase your business, would it not, with more people having mobile homes; there would be more people seeking locations where they could find work?

Mr. RAINWATER. That is true.

Senator MONRONEY. Instead of following the economic trend downward, your business would be presumed to be more active during depression years as people went across the country looking for spots of good business to be employed?

Mr. RAINWATER. That is right.

Senator MONRONEY. And you have lost 40 percent of your business! Mr. RAINWATER. That is right.

Senator MONRONEY. How does that correspond with your business, Mr. Hobson, or the figures of your industry?

Mr. HOBSON. At the conference, that is down approximately 40 percent for all the members of our conference. I might add that there are a couple of our members who operated badly in the red last year as the result of the illegal transportation.

Senator MONRONEY. How much of this illegal transportation which you mentioned occurred in a movement from manufacturing companies?

Mr. HOBSON. Approximately 95 percent of all mobile homes moved from manufacturers to dealers is performed by illegal operators.

Senator MONRONEY. Roughly, how many manufacturers of homes do we have?

Mr. HOBSON. Approximately 404.

Senator MONRONEY. Some larger and some smaller?
Mr. HOBSON. That is correct.

Senator MONRONEY. It would not be too difficult for any investigator, if such there be in the Interstate Commerce Commission, to hang around some of these factories and check some of the departing loads, if 95 percent of this originates with the manufacturers?

Mr. HOBSON. It would be very simple for them, sir.

Senator MONRONEY. They do not even have to go out on the highway.

Mr. HOBSON. No, sir.

Mr. RAINWATER. Senator, not only are they operating illegally from their own factories to the dealers, but they are likewise returning other secondary movements, as the arrest cases in Florida will substantiate.

Senator MONRONEY. You mentioned that these men did not carry insurance, those who are illegally operating. Are they bonded to guarantee delivery at the definite fixed place to which the trailer is to be taken?

Mr. HOBSON. No, sir.

Mr. RAINWATER. I might interject, Senator, on a number of occasions we have had individual owners of trailers find their trailers abandoned alongside the highway, involved in an accident, and the illegal carrier will leave it and they will have a certificated carrier complete the move and they are forced to do their own repairing of the mobile home as the result of the illegal operator's abandonment. Mr. BARTON. Thank you, Mr. Hobson.

Mr. Cyrus B. Weller, chairman of the board, Frozen Food Express. Dallas, Tex.