take it to the railroad station, unload it from the truck, load it into the rail car, and the same thing happens in reverse when reaching destination. Now, those two intermediate handlings would be eliminated and naturally some savings would result from that change. Senator CHURCH. But also, I should think, have a substantial effect upon improving the speed with which mail deliveries would be made in a great many instances, would it not?

Mr. SIEDLE. You are so right on that. One of the complaints we frequently have, people will say to us, well, I can go from here to there in 4 hours in my automobile. But it takes a letter 24 to 36 hours to make the same journey. Why?

Well, it is because, as I said in my testimony, we are adhering to some circuitous routes that we could eliminate if we were free to use the highways.

Senator CHURCH. Do you see any difficulties in this proposed bill other than those of a technical nature that are covered by the technical amendments that have been offered by the Postmaster General, as he understood.

Mr. SIEDLE. I do not, sir. I believe, Mr. Chairman, that it is becoming more and more recognized that the railhead-to-railhead concept of transportation is pretty much a thing of the past and is costing the railroads a great deal of traffic because of the many new communities which are not served by rail.

This would make possible more readily a coordinating of highway, rail, and highway service, under a rate structure prescribed by a regulatory body, the Interstate Commerce Commission, offer through service, something that is needed not alone by mail, but needed also by freight.

Incidentally, that is something we have been advocating for the last 3 or 4 years.

Senator CHURCH. My understanding of the scope of the bill is that it is meant to be applicable to common carriers, that is, bus companies, and truck companies that have been certified as common carriers, and operate under certificates of public convenience and necessity on regularly scheduled routes. It would be so confined?

Mr. SIEDLE. It would with the exception of bus companies, they are are included. But I believe they have in mind offering an amendment to include them.

Senator CHURCH. Has the Postmaster General considered that? Is that included in the amendments offered by the Postmaster General? Mr. WARBURTON. No, sir; it is not. Our position on that score, sir, is that we feel that supplementary legislation, rather than amendment to this basic proposal, would be preferable with respect to the bus companies' desire.

Senator CHURCH. Why is this?

Mr. WARBURTON. We are not basically in agreement with the basic bill, sir.

Mr. WENCHEL. The industry is not in agreement with it, as I understand it.

Senator CHURCH. And the position or the attitude of the Department, if I understand it correctly, is that to amend this bill might complicate the passage of the bill and you would prefer to see Con

gress move on this bill and then take up later the advisability of including within or adding to the coverage, bus companies?

Mr. WARBURTON. Yes, sir; in view of the disagreement within the industry itself. I might say on that score, sir, we need the bus companies, but with this disagreement existing we feel it would be a cleaner way for this to be passed and then let the industry get reconciled to its final view and have subsequent legislation.

Senator CHURCH. I think that is all the questions I have this morning.

I appreciate your coming over, gentlemen. The committee certainly appreciates the benefit of your testimony.

Mr. WARBURTON. Thank you, sir.

May I then at this stage present to you for the record the four technical amendments?

Senator CHURCH. Yes; and these amendments will be in the record at this point.

Mr. WARBURTON. The first amendment is on page 2, in lines 21 and 22. The amendment we propose is to delete the words "without advertising for bids, or under contract," and insert in lieu thereof the following, "with or without formal contract and without advertising for bids."

The reason we propose this amendment, sir, is because our attention has been called to the fact that section 4 does not clearly express the intention which is to permit transportation service to be acquired without advertising and with or without formal contract, and the technical amendment I have just submitted will clarify that intent.

The second amendment is found on page 3, line 13, and our proposal is that the word "made" be stricken, and the word "performed" be inserted. That basically, as the contents indicate, is a grammatical rather than a substantive change.

The third amendment is on page 5, line 1, our proposal is that the period be deleted, that a comma be substituted in lieu of the period, and that the following wording be added, namely, "whichever is the greater." The addition of this language, sir, resolves an ambiguity. It is necessary that it be the greater because mail matter, in a particular instance, within the context of section 7, may not have any intrinsic value. You will note, sir, that this is a section which permits the imposition of a penalty for failure to perform the service as authorized, and the amendment we suggest, in effect, goes to the benefit of the carriers themselves.

Amendment 4, page 6, line 15, we propose the striking of the words, "by any carrier," and also in line 17 of the same page

Senator CHURCH Let's go back for a minute to amendment 3. I am not quite sure I follow the reason there. If this would

Mr. WARBURTON. I beg your pardon, sir, it does not operate to the benefit of the carriers. It imposes a heavier penalty for the failure. Senator CHURCH. Why does the Department take the view that a maximum penalty ought to be imposed if the reasonable value of any mail matter lost, destroyed, or damaged, is not a thousand dollars? Why does the Department take the view that a thousand dollars ought to be the penalty imposed?

Mr. WARBURTON. First, sir, the authority granted by this section is discretionary and not mandatory and there is no basic way by which the actual value of a letter itself can be measured.

Senator CHURCH. Well, since the last sentence on page 5, lines 1 and 2, says, "the Postmaster may remit the whole or any part of any penalty," I don't see what is to be gained by first imposing the greater penalty, and then going on to say that all or any part of it can be remitted.

Mr. WARBURTON. Basically, sir, because there is no way to really assess the actual value, for example, of a personal letter; and secondly, with that concept in view, to follow the particular legal provision with regard to the other forms of transportation. This, in other words, would make this particular authority uniform, as it now currently is applied to rail, air, and so forth. This also, incidentally, gives a form of review with respect to the penalty itself.

Senator CHURCH. All right.

Mr. WARBURTON. I might say on that score, Mr. Siedle just pointed out where you have the question of an imposition of a penalty, this is ordinarily determined in the field itself, and this will permit, as is the practice with regard to the other forms of transportation, the review to determine whether remission should be made by the headquarters here in Washington.

Senator CHURCH. I understand your explanations, gentlemen, but I am not convinced.

Mr. WARBURTON. All right, sir, thank you.

I had started to mention to you, sir, when you wanted to go back to this one, the fourth amendment, found on page 6, line 15, and we suggest the deletion of the words in that line, "by any carrier," and also in line 17, just below, deletion of the words "to carriers," and insertion in lieu thereof, the words "for mail transportation," on line 17 only. That section then would read:

shall be required to be obtained from the commission or from a regulatory body of any city, territory, or possession of the United States and no rate paid for mail transportation shall be subjected to something *

et cetera.

The reason we make this suggestion, sir, is because under section 13 mail service may be obtained from those who are not necessarily within the defined term "carrier" in section 2 (c) of the legislation.

The amendment we propose would make clear that mail transportation so obtained is not subject to regulation by the ICC or by State commission. The insertion of the words "for mail transportation" also makes it clear that the exemption from such regulation applies only to mail transportation.

Senator CHURCH. Very well. Those amendments will be taken into consideration by the subcommittee.

Mr. WARBURTON. Thank you very much, sir.

Senator CHURCH. Incidentally, I think I should say that what must be well known by all of those who are interested in this legislation, that is, in view of the lateness of the session, and the fact that no action has yet been taken either in committee or otherwise in the House of Representatives, it is very unlikely that this bill will be enacted in this session. But I am hopeful that the record that can be made here can be printed and made the basis of early consideration in the next session, to expedite a full consideration by both Houses of the Congress.

Mr. WARBURTON. Even with that realization, sir, we appreciate the opportunity to appear before vou.

Mr. SIEDLE. Mr. Chairman, may I indicate some 20-20 hindsight. You indicated an interest in the star-route carrier and I want you to know we are interested likewise in the star-route carrier. They have done an excellent job for us and we know we are going to continue to need them. I pointed out that 95 percent of them were operations where the compensation was $10,000 or less a year. I should also have added that those 95 percent are using small equipment, small trucks or in many instances passenger cars, to again place emphasis on the fact that it is not the kind of operation that would appeal to a common motor carrier.

Thank you.

Senator CHURCH. Thank you very much, gentlemen.

Our next witness this morning is Mr. John V. Lawrence, managing director of the American Trucking Associations, Inc.

STATEMENT OF JOHN V. LAWRENCE, MANAGING DIRECTOR, AMERICAN TRUCKING ASSOCIATIONS, INC.

Mr. LAWRENCE. Mr. Chairman and gentlemen of the committee, my name is John V. Lawrence, and I am managing director of the American Trucking Associations, Inc. Our offices are located at 1424 16th Street NW., Washington, D. C.

The American Trucking Associations, Inc., is a federation that was established in 1933 as the national trade association of the trucking industry, representing all types of motor carriers of property, both for hire and private. We have affiliated associations in all 48 States and in the District of Columbia.

Our appearance here in favor of S. 3960 has been made purposely brief, not because we consider the measure unimportant. It is most important, we believe. We are endeavoring rather to conserve the committee's time and we hope our briefness will not be misunderstood. S. 3960, the bill now before you, is drafted along the lines of the Railway Mail Act and related acts. It does the following:

1. Authorizes the Postmaster General to tender United States mail to motor common carriers of general commodities at rates prescribed by the Interstate Commerce Commission.

2. Requires that common carriers of general commodities transport mail on scheduled trips at the established rates determined by the Interstate Commerce Commission when the postal service requires it.

3. Provides that the Post Office will publish a statement of services desired of motor common carriers of general commodities, and requires all eligible carriers to file information with the Post Office as to their ability to meet the service requirements.

Now, those three provisions apply to the carriers as defined in section 2. In addition, it

4. Authorizes the Postmaster General to enter into negotiated contracts without regard to advertised bids with any for-hire motor carrier for terms up to 4 years. Contract carriers, film carriers, and local cartage carriers, and all common carriers would be eligible under this provision. That is, under the provision of section 3.

5. Preserves intact the Postmaster General's authority to enter into star-route contacts with any motor carrier. Does not alter in any way present star-route or T-route contracts, and that, we feel, is very impor

tant to set forth. It might be a little surplus in that last section of language, but it was there intended to allay any feeling that it would affect the star route in any manner.

In its letter of July 15 to Senator Johnston, the Post Office Department points to the decline in the number of trains by which mail is transported from over 10,000 trains daily 30 years ago to less than 3,000 at the end of the fiscal year 1957. The Department indicated it must, therefore, take full advantage of available highway transportation facilities to meet its present-day requirements from the standpoint of speed, dependability, frequency of service, and timing of schedules. We believe our industry can fill a real public need in this

way.

To present to the subcommittee the subject of handling mail for motor carriers under the provisions of section 5, we have two witnesses here today, Mr. Orrin Fraley of Menlo Park, Calif., and Mr. S. E. Anderson, of Akron, Ohio.

To speak on the subject of the handling of the mail of negotiated contracts, which would apply in particular to specialized motor common carriers, contract carriers and local cartage carriers, Mr. D. M. Brandon, of New Orleans, La., is here.

In conclusion, may I state on behalf of our organization that we are wholeheartedly in support of S. 3960. We make only one suggestion which would be to eliminate on line 10, page 2, the words "over regular routes." The net result would be to include in section 2 all certificated motor common carriers of general commodities whether over regular or irregular routes. All interested groups in our association are in accord with this change.

In conclusion, Mr. Chairman, may I express our sincere appreciation for your having set this bill down for hearing at this time. Thank

you.

Senator CHURCH. Let me express my appreciation to you for your testimony this morning, Mr. Lawrence. Let me say that there is often great merit in brevity. You have, I think, emphasized the salient points here very clearly and very well. Thank you very much. I would like to call now Mr. Orrin Fraley, of the Consolidated Freightways, who comes from Menlo Park, Calif.

Mr. Fraley, I know your community very well, having taken my college education at Stanford. I was a neighbor of yours for a number of years.

Mr. FRALEY. It is a very interesting community.

Senator CHURCH. It is a very nice one; it certainly is.

I notice that you have a prepared statement. Please feel free to proceed with it. If there are any parts of it that you feel you can summarize for purposes of saving time this morning, it would be appreciated, and the entire statement as it appears here will be included in the record.

STATEMENT OF ORRIN FRALEY, CONSOLIDATED FREIGHTWAYS, INC, MENLO PARK, CALIF.

Mr. FRALEY. Thank you, Mr. Chairman. The statement, as you will notice, is rather short. There may be some portions of it I can omit as I proceed.