Considering the substantially increased fines contemplated by this section and the possibility that a great many unintentional minor safety provision violations can daily occur in a large carrier fleet, we believe it to be basically bad law to place in the hands of any agency the potential power to move against a carrier in a civil action and possibly obtain fines running into thousands of dollars a day.

We know that the ICC is a reasonable body and would, of course, use judgment in seeking the imposition of such fines, but we strongly believe it to be unwise, as a general principle, to give any agency and its agents in the field a virtual power of life and death over carriers which would be exercised as a result of unintentional and sometimes unavoidable minor infractions of the very complex and comprehensive safety regulations of the Commission.

We believe that the statute should remain as it is insofar as safety provisions are concerned. The Interstate Commerce Act now contains a criminal enforcement section, and additionally the Commission immobilizes vehicles found to be unsafe.

We therefore recommend deletion of the following (p. 4, lines 20-23)"; or who shall fail or refuse to comply with any rules, regulation, requirement, or order promulgated by the Commission pursuant to the provisions of section 204 (a) (1), 204 (a) (2), 204(a)(3), 204 (a) (3a)," from section 3. With that amendment made we strongly support this provision and urge its adoption.

Senator LAUSCHE. To refresh my memory, what is the status of the House bill on this item?

Mr. PINKNEY. The House bill does not have the safety provisions in it.

Senator LAUSCHE. And that is in accordance with what you are suggesting?

Mr. PINKNEY. Yes, sir.

Senator LAUSCHE. And is it also in accordance with what Mr. Galaspie recommended?

Mr. PINKNEY. Mr. Galaspie recommended approval of the bill insofar as the illegal operations are concerned. He was silent on the safety provisions, sir.

Senator LAUSCHE. You may proceed.

Mr. PINKNEY. Section 4(b)(1) of S. 1727 is designed to cure a procedural defect which presently interferes with enforcement proceedings. For the reasons already given by the Commission, we recommend passage of this provision.

Subsection (b)(2) of section 4 of S. 1727 would permit suits for injunction to be brought by injured private parties against persons operating in clear and patent violation of the operating authority provisions of the Motor Carrier Act.

When such a suit is filed, the Commission will be notified and then may appear as a matter of right in the proceeding. Further to protect against misuse of the right by private parties, provision is made for the posting of bond. In order to present conflicting court interpretations, it is provided that the Commission is to retain its jurisdiction to interpret or construe certificates and permits and its primary jurisdiction to determine the validity of an operation in dispute under the primary business test.

We believe this section will enable the carriers themselves greatly to assist the Commission in its very difficult task of enforcing the Motor Carrier Act.

We note that there is language in this section-and I was there to comment on the parenthetical phrase. I understand that has been removed, sir, so this part of my testimony is not germane.

I mentioned that there is a proviso in there to protect the Commission's primary jurisdiction to determine the validity of an operation in dispute under the primary business test. In H.R. 5401, which passed the House, a different amendment was included, the one mentioned by the ICC. We subscribe to that amendment. Either of the proposed solutions is agreeable to us, either the way the Senate bill reads or as it was passed by the House. We urge enactment of this section.

Now, Section 5 of S. 1727 is designed to restore to shippers a right they had prior to a certain Supreme Court decision in 1959, the T.I.M.E. case, to obtain reparations, which, as defined in this section, means "damages resulting from charges for transportation services to the extent that the Commission, upon complaint made as provided in section 216(e) of this part, finds them to have been unjust and unreasonable, or unjustly discriminatory or unduly preferential or unduly prejudicial."

It has always been our position that the reparation provisions and procedures are outdated and should neither be reapplied to the motor carriers nor retained for rail and water carriers. They were established prior to the time present day shipper safeguards existed. When written into the Interstate Commerce Act there was comparatively little competition in transportation as compared to today. Shippers did not participate in the ratemaking process as they do today. The right to protest and have proposed rates suspended did not exist, and shippers had no right to file complaints.

However, in an effort to cooperate in the solution of the problem created by the Supreme Court decision of 1959, and by the continuing recommendation of the ICC and shippers for a reparation provision, the trucking industry last year indicated its willingness to have restored to shippers exactly the same rights they had had prior to the Court decision. Therefore, we do not oppose section 5 of S. 1727.

This is not to say we would be willing to accept the unlimited reparation provision recommended by the Commission which appears in S. 1732. We find in the industry solid opposition to that proposal. We submit that the proposal in section 5 of S. 1727 takes care of such problem as may still exist (just as that procedure did prior to 1959), that it is acceptable to the organized shipper community, that it has now been stated to be acceptable (though not preferred) substitute by the Commission, and therefore should be the version adopted if a motor carrier reparation provision is to be enacted by the Congress. Senator LAUSCHE. What position did the House take?

Mr. PINKNEY. The House took the position I have just recommended, sir, and they have restored in the House bill the pre-T.I.M.E. decision procedure.

Senator LAUSCHE. All right.

Mr. PINKNEY. As I have indicated, the Commission stated this is an acceptable though not preferred solution to the problem. The

Transportation Association group, user group, have also gone along with it on about the same basis as the ICC.

Now, turning next to the single subject bills not yet discussed which stem from the ICC's legislative recommendations, on which the trucking industry has a position, I first call attention to S. 1147.

This is a proposal to change the standard to be used in judging whether a motor carrier acquisition or control matter should be scrutinized under section 5 procedures or under the much simpler procedures in section 214.

The cutoff point has been "where the number of *** vehicles * * * does not exceed 20." It is now proposed to fix this point on the basis of combined gross operating revenues. The test proposed is "where the aggregate gross operating revenues of such carriers have not exceeded $300,000 for a period of 12 months."

I might say we too made a study, as did the Commission, on the relationship between the $300,000 and the 20 vehicles, and we find, as they did, in the case of the small carrier, because here the aggregate number of vehicles for the two carriers would not exceed 20, that the $300,000 figure is a good equation of the 20-vehicle rule.

Neither the Commission nor ourselves wish to change the standard, in a sense, just make it more certain.

Senator LAUSCHE. You therefore recommend it?

Mr. PINKNEY. Yes, sir; we recommend enactment of the bill; we favor it.

Senator LAUSCHE. All right.

Mr. PINKNEY. S. 1728, that is the bill which broadens service of process in section 222 court cases. It is identical with section 4(b) (1) of S. 1727. We favor it for reasons previously given.

S. 1731 proposes to make a change in the language of section 212(a), the revocation section of the Motor Carrier Act, so as to permit revocation of operating authority for failure to comply with the insurance section of the act (215) and to permit final revocation of certificates and permits for failure to comply with Commission orders even though such failures are not willful failures.

This is to be accomplished by the deletion of the word “willfully” presently appearing in the first proviso of section 212.

We do not object to the inclusion of the insurance section but we most earnestly do object to the proposal to strike the word "willfully." The proviso in question presently reads (the word "willfully" to be omitted by S. 1731 appears in brackets):

Provided, however, That no such certificate, permit, or license shall be revoked (except upon application of the holder) unless the holder thereof [willfully) fails to comply, within a reasonable time, not less than 30 days, to be fixed by the Commission, with a lawful order of the Commission, made as provided in section 204 (c), commanding obedience to the provisions of this part, or to the rule or regulation of the Commission thereunder, or to the term, condition, or limitation of such certificate, permit, or license, found by the Commission to have been violated by such holder.

I should point out that the principal provision in section 212 (a) provides that certificates and permits shall remain in effect until suspended or terminated either on the holder's request or upon complaint or on the Commission's own initiative, after notice and hearing "for willful failure to comply with any provision of this part, or with any

lawful order, rule, or regulation of the Commission promulgated thereunder, or with any term, condition, or limitation of such certificate, permit, or license." The proviso next above quoted then follows.

In other words, if the Commission, after a hearing, finds that a carrier has been in violation, let us say, of the safety provisions of the act, the Commission can issue an order commanding obedience to those provisions and then if the carrier willfully fails to obey that order in any particular, the Commission can revoke or suspend his certificate. That is the law as it now stands, and with that we do not quarrel. But we do quarrel with this current attempt to remove the word "willfully" from the proviso.

I might say, sir, this has been up before you on a number of occasions down through the years. Once at a hearing at which you presided, I recall, back in 1960 or 1961, I was testifying before you on this same subject then.

There would be little or no problem if the Commission's orders dealt only with some specific type of offense. However, the Commission can and sometimes does require compliance, not only with specifically named rules and regulations, but with an entire category of its rules or regulations, as for example its entire body of safety rules which range into the hundreds in number and which include everything from major type safety provisions to rules covering very minor type infractions. Under this proposal the inadvertent failure by a carrier or one of its employees to comply even with a minor rule could result in immediate revocation of operating authority and the destruction of a going business.

The perilous position of a carrier which has issued against it such a sweeping order is further accentuated by the fact that the Commission has held that these orders run indefinitely. This means that such a carrier would be in imminent danger of having its operating authority revoked at any time in the future for the slightest inadvertent infraction of the body of rules with which it has been ordered to comply.

We realize that the Commission is not prone to act unreasonably or arbitrarily, but we feel it to be basically bad law to place the power of life and death into the hands of any tribunal which can then exercise that power for a very minor second offense.

We respectfully urge that the committee not accept this particular recommendation.

Senator LAUSCHE. Do I understand the Commission can now under existing law issue an order commanding obedience to a previously declared judgment?

Mr. PINKNEY. Yes.

Senator LAUSCHE. You say here:

In other words, if the Commission, after a hearing, finds that a carrier has been in violation, let us say, of the safety provisions of the act, the Commission can issue an order commanding obedience to those provisions and then if the carrier willfully fails to obey that order in any particular, the Commission can revoke or suspend his certificate.

Mr. PINKNEY. That is correct. And that is the way the law now reads, and with that we do not quarrel. It is the removal of that word "willfully" that bothers us.

Senator LAUSCHE. I see.

Mr. PINKNEY. Another Commission recommendation in S. 1731 which the committee should scrutinize is the further proposal to change the words "rule, or regulation of the Commission promulgated thereunder" [presently in section 212 (a)] to "promulgated by the Commission." The present wording limits the rules or regulations to those that might be promulgated under part II of the Interstate Commerce Act.

The changed language would broaden the scope of the bill and might bring into consideration rules and regulations totally unrelated to the transportation activities of the carriers. If the Commission has in mind some particular rule or set of rules not provided for by part II of the act, they should be spelled out.

I noted, from Chairman Webb's testimony, he referred to the Safety of Explosives Act that they made applicable and which are not a part of part II. It would be our recommendation that that be spelled out in the language rather than this very broad coverage that is suggested which could bring into consideration rules and regulations having nothing to do with, as I say, the transportation activities of the carriers. That is simply a technical correction that we would recommend. Senator LAUSCHE. Just a moment.

Mr. KENNEY. As I read S. 1731, it proposes to make about six or seven changes in the Interstate Commerce Act. As I understand your testimony, you are opposed to some, and some you are not opposed to. Mr. PINKNEY. That is correct.

Mr. KENNEY. Would it be fair to ask you to submit to the committee a revised version of S. 1731

Mr. PINKNEY. I would be delighted.

Mr. KENNEY. Containing your recommendations?

Mr. PINKNEY. Yes; I can.

Mr. KENNEY. With specifically, perhaps, if you feel so inclined, the inclusion of the Transportation of Explosives Act.

Senator LAUSCHE. They will be received, Mr. Pinkney, not made a part of the record but placed in the file.

Mr. PINKNEY. Right.

Senator LAUSCHE. Proceed.

Mr. PINKNEY. S. 1732. This is the Commission's reparation bill which goes beyond the reparation sections (5 and 6) in S. 1727. For reasons given in my discussion on said section 5 of S. 1727, we urge enactment of that version-and not S. 1732.

S. 1733. This bill is almost the same as section 3 of S. 1727 in that it, too, proposes to permit civil forfeiture actions to be brought against illegal operations and violators of the Commission's safety rules and regulations. For reasons which I have already stated, we oppose the inclusion of the safety rules in this as we do in section 3 of S. 1727.

Now, Mr. Chairman, I would like to offer, not for the record but for the file, three publications here bearing on the extent and seriousness of the illegal operations taking place in the motor carrier area.

One of them is a very recent article from Transport Topics, the trucking industry's major publication.

There is one from Railway Age, an article entitled "Bootleg Truckers: Nation's No. 1 Lawbreakers."

And the last one is from Fleet Owner, a private magazine, a reprint of an article entitled "Illegal Trucking."