and depots or terminals-which could be eliminated if the Post Office Department were as free to contract with regulated motor carriers as with other regulated rail and air carriers.

The deficiency of present laws and the need for correcting the existing situation has been known for many years to the top-level management of the Post Office Department and to the motor carriers. Over a period of time there have been innumerable discussions, proposals and counterproposals, conferences, and other meetings in order to provide suitable legislation which would enable the Post Office Department to make greater use of the flexible, economical motor carrier industry. In recent years the urgency for legislation has increased, due to the curtailment of rail service, due to the proved efficiency of T-route operations, and due also to the rapidly mushrooming and expanding cities and suburban areas. All of these have augmented the need for action to remove the shackles from the Post Office Department as regards their manner of dealing with the existing motor carrier field.

I strongly urge your consideration and support both to the needs of the Post Office Department and to the passage of this bill, designed to cover such needs most comprehensively.

Senator CHURCH. Thank you very much, Mr. Brandon.

Our next witness is Mr. James E. Wilson, general counsel of the National Trailways Bus System.

STATEMENT OF JAMES E. WILSON, GENERAL COUNSEL, NATIONAL TRAILWAYS BUS SYSTEM

Mr. WILSON. Mr. Chairman and members of the subcommittee, my name is James E. Wilson, I am general counsel, National Trailways Bus System, Perpetual Building, 1111 E Street, N. W., Washington, D. C.

National Trailways Bus System is an association of 43 motorbus operators whose operations extend into 45 of the 48 States and the District of Columbia. I appear on behalf of Trailways for the purpose of offering certain amendments to S. 3960. I desire to point out that National Trailways Bus System is not opposed to S. 3960. Its purpose in appearing before the subcommittee today is to request that certain amendments be made to S. 3960.

Attached hereto as appendix A is a detailed statement of amendments to S. 3960 which National Trailways Bus System seeks. Also attached as appendix B is a detailed statement of the reasons for the proposed amendments for application to the bus industry.

It is believed that the suggested amendments appearing in appendix A and the reasons therefor appearing in appendix B are selfexplanatory. Therefore, I will not take the time of the committee to refer to the contents of appendixes A and B in detail. Instead, I will restrict my statements to the subcommittee in an effort to justify the proposed amendments.

Senator CHURCH. May I suggest at this point the amendments, together with the explanations contained in appendixes A and B, be included in the record of these proceedings.

(The above-mentioned material is as follows:)

APPENDIX A

SUGGESTED AMENDMENTS TO S. 3960 PROVIDING FOR THE TRANSPORTATION OF MAIL BY HIGHWAY MOTOR CARRIERS

Amendment No. 1 (sec. 2)

Change section 2 (c) to read as follows "*** for the transportation of passengers or general commodities by motor vehicle ***."

Amendment No. 2 (sec. 6)

Insert section 6 (b), "With respect to motor carriers of passengers, the Post Office Department shall have authority as specifically provided by section 6 (f) hereof, but shall have no authority to require any service which would interrupt, change or add to regularly constituted services and schedules for the carrying of passengers."

Insert section 6 (c), "Changes of bus schedules or bus services, made in accordance with existing laws, shall not be subject to protest of, or interference by, the Post Office Department, except to the extent and in the manner prescribed by such existing laws."

Insert section 6 (d), "No motor carrier of passengers shall be required to carry mail on its regularly constituted passenger bus schedules in excess of the amount of space that is available in the baggage and express compartments of the vehicles operated on such schedules after proper allowance has been made for the handling of the baggage of passengers."

Insert section 6 (e), "No motor carrier of passengers shall be required to carry mail on its regularly constituted passenger bus schedules consisting of things which are not accepted for transportation as express shipments as described in the provisions of lawful express tariffs of such carriers."

Insert section 6 (f), "The Post Office Department shall have authority to require the handling, by motor carriers of passengers, of mail by means other than regularly constituted passenger bus schedules, provided that the compensation for any such services shall be established on the basis of reasonable compensation for the handling of mail as such and not on the basis of handling of mail in connection with, or ancillary to, the transportation of passengers, and of baggage or express in the same vehicle with passengers."

Amend section 6 (b) by renumbering same so that the new number will be section 6 (g).

Amendment No. 3 (sec. 9)

Insert section 9 (c), "With respect to mail transportation by motor carriers of passengers in vehicles operated on, and between places served as regular stops by regularly constituted passenger bus schedules of such carriers, all such carriers shall be placed in the same classification and rates shall be fixed, on either a local, regional, or national area basis, which shall be applicable to all such carriers in each such area or areas, and no other rates shall be applicble to such mail transportation performed by any such carriers."

Amendment No. 4 (new section)

Add as new section 15, "With respect to transportation of mail by highways, it shall be the policy of the Post Office Department to utilize the service of carriers described in section 2 hereof to the greatest extent consistent with the national transportation policy."

Amendment No. 5

Add the words, "Except as otherwise provided herein" at the beginning of each of the following sections: section 2 (b), section 6 (a), section 7, section 12, section 13.

APPENDIX B

JUSTIFICATION FOR SUGGESTED AMENDMENTS TO S. 3960 PROVIDING FOR TRANSPORTATION OF MAIL BY HIGHWAY MOTOR CARRIERS

The following justification states the reasons why it is considered that the attached suggested provisions are reasonable and proper for application to motor carriers of passengers.

Amendment No. 1

The first amendment proposed does nothing more than to insert the words "of passengers" in section 2 (c), thus having the effect of placing motor carriers of passengers, as well as carriers of commodities, under the general purview of the bill.

Amendment No. 2

The basic reason for the proposed sections 6 (b), 6 (c), 6 (d), and 6 (e) in amendment No. 2 is the fact that the first and foremost obligation of a bus company is to conduct its operations so as to provide the best possible service for its passengers, from the viewpoint of the safety, comfort, and convenience of such passengers.

A bus company is in an altogether different situation from a carrier of freight. Its schedules must be fixed so as to best suit the convenience of its passengers; its operations must be conducted so as to best protect the comfort and safety of its passengers; the available space for carrying commodities must first be devoted to the handling of the baggage of its passengers.

Both as a matter of law, and as a matter of right, passengers and their baggage must be taken care of first, before anything else, including mail.

As long as the motor-bus industry operates as such, it does and must continue to prefer passengers and their baggage over any type of cargo. Existing laws, and the theory of existing laws, would, we believe, be in irreconcilable conflict with any proposed new legislation which would require, or even allow, anything to the contrary.

Aside from the duty imposed by law upon the motor-bus operator, the primary source upon which the bus company must depend for income is the revenue derived from the transportation of passengers and their baggage. It is from this source that the busline obtains most of the income necessary to provide and sustain efficient and adequate transportation facilities for the traveling public. To jeopardize the carrier's ability to operate this passenger service in a manner most advantageous to the public and the carrier, would jeopardize the carrier's ability to sustain a proper standard of service.

Any space available in the baggage compartments of passenger buses in excess of requirements for passengers' baggage is offered by the carriers for the transportation of various types of cargo at rates compensatory for the transportation service performed, as provided in tariffs for the transportation of express. Such space is available for the transportation of mail and the buslines desire to provide such mail transportation service. However, by the very nature of the vehicles operated in passenger service, which must be designed primarily for the passengers, there is a definite limitation on the amount and type of cargo that can be carried. This places a corresponding limitation on the amount of revenue which can be obtained from this source, in comparison with passenger revenue. In these circumstances it becomes necessary for the busline to seek to avoid any possibility of endangering its principal source of revenue, and its ability to discharge its obligation of providing the best possible service to meet the requirements of the traveling public.

Motor carriers of commodities are not confronted with these circumstances and we believe they possibly do not exist to the same severe degree with regard to railroads.

The following are illustrations of situations which would be disastrous to a motor carrier of passengers, both from the standpoint of service and the standpoint of revenue:

(a) If the carrier were required to make local stops on what was set up, in the interest of its passenger operations, as an express passenger schedule.

(b) If the carrier were required to deviate from the regular route of its passenger schedules and make deliveries of mail at such places and in such manner as to interfere with its passenger service.

(c) If the carrier were required to institute and operate additional passenger schedules which would not be justified from a passenger-carrying standpoint and which would result in a financial drain upon the carrier.

(d) If the carrier were required to handle on its passenger-carrying schedules quantities of mail exceeding its capacity to a degree which would interfere with its ability to handle the baggage of its passengers.

Disturbance of passenger service undoubtedly would not be intended under provisions of the legislation, and this being the case, we believe there should be

no objection to clarifying the situation for all concerned, now and in the future, by including these provisions in the law.

We emphasize that the proposed limitations on our obligation to carry mail are with respect to regularly constituted passenger schedules only. We willingly accept the mandatory obligation to carry mail on these passenger schedules within these necessary limits, and we willingly accept the obligation to carry the mail by other means in accordance with the provisions of the proposed law without reservation, as provided in the proposed section 6 (f). Amendment No. 3

The specific service of mail transportation in vehicles operated on passenger schedules between places served as regular stops by such schedules is a comparatively constant type of service, which lends itself to the establishment of a fixed rate applicable to all carriers in a specified area. This principle is, in effect, with regard to passenger and package express service of buslines and we believe it would be advantageous for this specific type of mail transportation. An important advantage to the Post Office Department would be simplification of determining costs and elimination of the time consuming and cumbersome process of negotiating with carriers regarding each of the many small movements of mail on passenger buses, a procedure which the Post Office Department seeks to eliminate.

Amendment No. 4

While this provision is in no respect mandatory in nature, it does express, as a view of Congress, the principle that since carriers defined in the legislation are subjected to certain obligations they should be afforded consideration consistent with such obligations, which we believe would be in keeping with the national transportation policy.

Amendment No. 5

This provision modifies various sections of the bill to take into account the above provisions.

Mr. WILSON. The principal type of mail transportation service which the bus industry has been performing is the transportation of mail in pouches, referred to as pouch mail, in the baggage compartments of buses, on regular bus schedules. This usually involves the movement of a few pouches for a comparatively short distance on any particular schedule. The number of pouches normally ranges from 1 to 15 or 20, and occasionally more on a particular schedule. The distance they are carried may range from a few miles to 300 or 400 miles, and occasionally more, with an average distance each pouch is carried estimated to be probably about 100 miles. Each separate movement is comparatively small, and there are a great many such separate movements.

This service is performed under contracts awarded by competitive bid under the so-called star route laws. Generally there is a separate contract for each movement. Buslines are not obligated to perform this service under existing laws.

The bus industry has been performing this service for many years, desires to continue to do so, and, speaking for the members of National Trailways, is quite willing to accept a mandatory obligation to do so. New legislation is needed to permit the Department to use this service without the procedures involved in administering many separate small contracts under present laws, procedures which are burdensome for both the Department and the carriers quite out of proportion to the money involved.

At the same time, National Trailways feels that certain circumstances should be recognized with respect to transportation of pouch mail on regular bus schedules. The present and potential volume of such transportation is comparatively small in relation to the total

movement by rail, truck, and air. A basic reason for this is that the space available in baggage compartments of buses will not accommodate large volume on individual schedules. The information we have, while not authoritative, indicates that the total of all pouch-mail transportation on buses today is probably on the order of $1 million a year. There are thousands of separate regular bus routes and schedules on which mail may be carried."

The extensive network of bus routes and schedules can play a role in the mail transportation pattern which the Department needs and can use to advantage, for reason of both service and economy. New legislation to simplify the use of this service should substantially increase the volume. However, we should not lose sight of the fact that the volume of pouch-mail transportation on regular bus schedules will probably continue to be small in comparison to the total mail

movement.

Pouch-mail transportation on regular bus schedules is a comparatively fixed type of service, that is, it is substantially similar in all cases. In this respect it is different from large bulk movements of mail operated as special service, solely or mainly for mail transportation, where conditions affecting cost of service may vary substantially in each case. For this reason pouch-mail transportation on regular bus schedules lends itself to the establishment of fixed rates on a local, regional, or national basis, applying to all buslines.

It would eliminate the "statement of service" method for this type of mail transportation; it would enable the Department to always know, on a moment's notice, what their cost for any particular movement would be; and it would stabilize rates, all to the advantage of the Department.

This principle has been employed for many years by the bus industry with regard to its rates for the transportation of passengers and package express, the latter quite comparable to pouch mail. There should be no problem in employing the same principle for pouch-mail transportation on regular bus schedules.

It would not involve any difficulty for the Department with regard to having to deal with complicated rates in a great number of tariffs. We visualize a few simple tariffs, probably on a regional basis, stating a simple table of rates according to number of pouches and distance. Individual Department officials in the field, employing this service, would probably have not more than 1 or 2 such simple rate tables for all buslines in their entire area, a considerable improvement over the present situation where they deal with many different rates in the many separate contracts, all of which are subject to frequent change. National Trailways feels that new legislation regarding mail transportation by motor carriers should recognize the place of the bus industry in the mail transportation pattern, and should take into account the circumstances discussed above, particularly with respect to transportation of pouch mail on regular bus schedules.

We sincerely feel that the amendments we propose are fair, reasonable, and proper. We believe that they will not work to the disadvantage of the Post Office Department or the public, nor afford and improper competitive advantage to motor carriers of passengers.

Rather, we think that they will put the transportation of mail by motor carriers of passengers on a sound basis that will best and equally