Mr. WEBB. That is correct, Mr. Chairman.

Senator LAUSCHE. That would mean where the facts showed that, while there are two carriers, they are under a single integrated control, the rule against occupying offices or directorships in two competing carriers would not apply?

Mr. WEBB. That is correct.

Senator LAUSCHE. Now, you say:

In addition, it would make clear that the prohibition against the holding by "any person" of the position of officer or director of more than one railroad applies to the holding of such positions by different members of the same firm. What do you mean by that?

Mr. WEBB. That would mean that if a member of a board of directors was an officer of bank A that another officer of bank A could not also serve.

That is

Senator LAUSCHE. Could not also serve? That is, a bank then could have two of its officers serving on a carrier's board? Is that correct? Mr. WEBB. I would like to ask Director Forbes if he would explain that.

Senator LAUSCHE. All right. Illustrate what they can do.

Mr. FORBES. We have several examples, for instance, where brokerage firms and partnerships are concerned, where one member of brokerage firm would be chairman of a board of one railroad and another member of the same brokerage firm would be a president of a competing carrier.

Senator LAUSCHE. Now, what do you intend to do? Stop that?

Mr. FORBES. Yes, sir. They would have to file applications for authority in order to accomplish such membership on two competing carriers.

Senator LAUSCHE. I subscribe to that, but what does this language mean: "In addition, it would make clear that the prohibition against the holding by 'any person' of the position of officer or director of more than one railroad applies to the holding of such positions by different members of the same firm"?

That is exactly what it means, as I understand it.

Mr. FORBES. Yes, sir.

Senator LAUSCHE. What you have illustrated.

Mr. FORBES. That is what it means.

Senator LAUSCHE. All right.

What would the situation be if you had a law firm?

Mr. FORBES. Well, it would be the same. They would have to come in and file an application with the Commission for authority, and if the Commission saw fit, and it met the criteria, we might grant it. Otherwise it would be denied.

At present, they can just go ahead and be elected to the board or become officers of any competing carrier, because they are

Senator LAUSCHE. The evil you are trying to reach is that there arise at times conflicts of interest?

Mr. WEBB. S. 1152 would amend section 220 (f) of the Interstate Commerce Act, section 8 of the Locomotive Inspection Act, and section 4 of the Accident Reports Act to restrict factual testimony by ICC

investigators to cases where factual evidence is not reasonably available from other sources and to prohibit the use in a damage suit of (1) reports submitted by carriers under the Locomotive Inspection Act; (2) ICC accident investigators' reports; and (3) expert opinion testimony of investigators.

Litigants frequently attempt to compel Commission employees who have investigated an accident to testify in damage suits. We do not believe that this is warranted when factual evidence is available through other sources. Such a practice severely interferes with the Commission work. In addition, S. 1152 would reconcile differences that exist in similar sections of the acts which we adminster.

Senator LAUSCHE. Now, then, in an accident case brought against a carrier, this S. 1152 would prohibit the use in such a case of (1) reports submitted by carriers under the Locomotive Inspection Act-is that right?

Mr. WEBB. That is true.

Senator LAUSCHE (continuing). And (2) the reports of accident investigators

Mr. WEBB. That is correct.

Senator LAUSCHE (continuing). And (3) the opinions prepared for your Board expressly by the testimony of investigators?

Mr. WEBB. That is correct.

Senator LAUSCHE. Now, would this be an absolute prohibition or would it be possible under certain circumstances to call for such testimony?

Mr. WEBB. No; the bill does provide that we could permit such testimony where the factual evidence does not appear to be reasonably available from other sources. It is not an absolute bar.

Senator LAUSCHE. Then it means if and when an injured party has available testimony from ordinary sources, the ability to procure these reports under the three categories which I mentioned would not be available?

Mr. WEBB. That is true.

Senator LAUSCHE. Why is this wanted?

Mr. WEBB. We have a great deal of difficulty in-well, it is primarily to have the time of our investigators who are frequently called unnecessarily we think-to testify. Also, the reports which are submitted by carriers under the Locomotive Inspection Act may now be used in damage suits, and we believe that they should be exempt from disclosure as are the reports submitted by motor carriers and by railroads of their accidents.

Senator LAUSCHE. Is there a different law applicable to different carriers now?

Mr. WEBB. Yes. The reports submitted by carriers under the Locomotive Inspection Act may be used in damage suits, but the reports submitted by railroads under the Safety Appliance Act may not be used in damage suits, nor may the reports of motor carriers be used in damage suits.

Senator LAUSCHE. And this bill contemplates adopting a uniform law?

Mr. WEBB. That is correct.

Senator LAUSCHE. And whenever the plaintiff could show that the testimony desired was not available through the normal sources, he still could have available these reports?

Mr. WEBB. Well, we would make available to him testimony of our investigators.

Senator LAUSCHE. Yes. Would that be discretionary with you or mandatory?

Mr. WEBB. It would be discretionary, Mr. Chairman.

Senator LAUSCHE. It has just been suggested to me that request for similar legislation has been submitted to this committee by the Civil Aeronautics Board. Did you discuss this matter with the Civil Aeronautics Board members?

Mr. WEBB. I do not believe that we have discussed it with them, but they have furnished to us a copy of their legislative recommendation. I believe they did that while they were considering it, before they formally submitted it to the Congress.

Mr. SENDER. In your justification, Mr. Chairman, you point out that one of the purposes of the bill is to protect the integrity of the Commission's accident investigation function and to facilitate the securing of full and complete accident reports. Is that one of the reasons for this bill?

Mr. WEBB. Yes; that is true.

Senator LAUSCHE. Well, it would seem to me that that is an important reason. You want to make certain that you do not put the person interrogated or the company interrogated under fear and the desire not to submit factual reports. Is that correct?

Mr. WEBB. Yes; that is right.

Senator LAUSCHE. All right. Proceed with the next item.

Mr. WALRATH. Mr. Chairman, not to correct my boss, my Chairman, but in 1963 Chairman Boyd and I, when I was then Chairman of the Commission, discussed this legislation we just left-in principle as well as the bill.

us.

Its predecessor was virtually identical with that which is now before

So we were quite aware some 3 years ago of CAB's request, and our reasons and theirs seemed to be the same, just as you stated it.

Senator LAUSCHE. Proceed to the next item.

Mr. WEBB. S. 1153 would amend the Interstate Commerce Act and various related acts by eliminating the mandatory requirement that certain documents be filed under oath, and would grant the Commission discretion to require such an oath when deemed necessary.

Elimination of these mandatory oaths would relieve carriers of a needless burden without in any way impairing the Commission's functions, and would preclude further delays and inconveniences resulting from inadvertent omissions of the oath. Retention of discretionary authority would enable the Commission to require an oath should the need arise.

Senator LAUSCHE. Has there been any controversy about this item? Mr. WEBB. I am not aware of any, Mr. Chairman.

Mr. KENNEY. Would filings made still be subject to the penalties of 18 United States Code for false statement?

Mr. WEBB. Yes. That is right. Even though the statement was not made under oath, title 18, as I understand, it would permit prosecution.

Mr. KENNEY. For false statement?

Mr. WEBB. False statement of material fact; yes, sir.

Senator LAUSCHE. Then the purposes achieved through the requirement that the statement would be under oath are still achievable through the power to prosecute criminally when a false report is filed as set forth in title 18, section 1001?

Mr. WEBB. Yes, that is right.

Senator LAUSCHE. Section 1001 of title 18 provides that whoever files a false report in connection with these laws shall be subject to criminal prosecution.

Mr. WEBB. That is right.

Senator LAUSCHE. Whether he makes his statement under oath or not under oath?

Mr. WEBB. That is right; yes.

Senator LAUSCHE. Proceed.

Mr. WEBB. S. 1731 would amend section 212 (a) of the act to make motor carrier operating authorities subject to suspension, change, or revocation for willful failure to comply with Commission rules or regulations and to provide uniformity between parts II and IV with respect to revocation procedure. It would also permit suspension of motor carrier operating rights, upon notice, for failure to comply with the Commission's insurance regulations.

S. 1731 would enable the Commission to cope more effectively with serious violations of its regulations including those prescribed under the Transportation of Explosives Act. In addition, it would provide an added measure of protection to the public by empowering the Commission to suspend motor carrier rights, on short notice, when their cargo, public-liability, or property-damage insurance lapses or is canceled without replacement.

Senator LAUSCHE. Is S. 1731 applicable only to motor carriers? Mr. WEBB. Yes. I believe that is correct. Only to motor carriers. Senator LAUSCHE. And this would give the Commission the power to suspend, change, or revoke a certificate for willful failure to comply with Commission rules or regulations?

Mr. WEBB. Yes. At the present time section 212 provides for such power for failure to comply with part II or regulations promulgated thereunder, which means under part II. However, the Transportation of Explosives Act is a different act, not part of the Interstate Commerce Act. One of the purposes of this bill is to provide for revocation for willful failure to comply with the Transportation of Explosives Act.

Senator LAUSCHE. And that is the primary purpose of asking for the passage of this bill?

Mr. WEBB. Yes. I think that in my opinion is the major purpose. Senator LAUSCHE. That is, when a motor carrier fails to supply adequate reports dealing with his carriage of explosives, you do not have the power to suspend, change, or revoke?

Mr. WEBB. No. Our power is limited to violations of rules and regulations promulgated under part II.

Senator LAUSCHE. Thanks very much.

Mr. WEBB. Thank you, Mr. Chairman.

Senator LAUSCHE. We will have a 5-minute recess, gentlemen. (Whereupon, a recess was taken.)

Senator LAUSCHE. The next witness will be Mr. L. E. Galaspie, director of transportation of the Reynolds Metals Co. of America. Mr. Galaspie.

STATEMENT OF L. E. GALASPIE, MEMBER OF BOARD OF DIRECTORS, TRANSPORTATION ASSOCIATION OF AMERICA; ACCOMPANIED BY HAROLD HAMMOND, PRESIDENT, AND FRANK SMITH, VICE PRESIDENT

Mr. GALASPIE. Thank you, Mr. Chairman.

Mr. Chairman, before I proceed, I would like to introduce Harold Hammond, president of the Transportation Association of America and Frank Smith, vice president.

In view of your recommendations in the beginning of the hearing, Mr. Chairman, I will not read all of the statement.

The first page simply indicates how the Transportation Association of America formulates its various policies.

The second page gives more or less a description of the problem as it relates to S. 1727.

And, as I understand it, this statement will be placed in the record. Senator LAUSCHE. Yes, it will.

(Prepared statement of Mr. Galaspie appears in the appendix.) Mr. GALASPIE. The seriousness of the problem is indicated on page 3, and I would ask you that you read that carefully.

I should also like to refer to page 4 in connection with the Committee Against Unlawful Transportation. We have been engaged in educational activities for several years now. I served for 3 years as vice chairman of the Committee Against Unlawful Transportation, commonly known as CAUT, and presently am serving as chairman.

We have distributed a number of publications which we have available in case the committee should like a copy for their records.

We think that it has done something at least in trying to educate the general public in regard to the unlawful transportation situation.

There is still a lot to be done, and we are trying to take steps to do the things that we think are necessary.

CAUT, in itself, primarily is an educational activity. It does not permit us to appear as a witness or promulgate any legislation. So I am appearing here as a member of the Board of the Transportation Association of America and not as representing CAUT.

Mr. GALASPIE. Now, in reference to S. 1727, section 1, this section would permit the ICC to make cooperative agreements with the various States to enforce laws dealing with motor carrier operations, and particularly the illegal and the unlawful for-hire trucking operations. The Transportation Association supports this legislation.

The need for this legislation is evident when we recognize that such illegal operations may be carried out by any number of literally millions of trucks moving every day over the Nation's highways. Obviously, the small number of ICC highway enforcement officials-251 fieldmen in 1964 cannot do the enforcement job required in 50 States. These men spend a considerable portion of their time handling administrative details dealing with more than 100,000 motor carriers that are subject to either the ICC's economic or safety regulations.

Therefore, if we are to expect any reasonable enforcement, we must lean heavily on State motor carrier enforcement officials, who are actually in a better position to take effective action against illegal operators because many of them have the power of arrest-a power not given to, nor being sought by, ICC high enforcement officials.

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