bill would also permit recovery of damages where such damages are nominal in amount, but nevertheless represent a substantial part of the particular transaction. Several specific examples of situations of this character, where the charges assessed by the carrier appear clearly unreasonable, but where recovery was not attempted because of the expense involved, will be cited later.

PERIOD OF LIMITATION FOR RECOVERY OF DAMAGES OR REPARATION

The bill would provide a 2-year period within which actions for the recovery of damages (not based on overcharges) must be brought against motor carriers, water carriers and freight forwarders subject to parts II, III, and IV of the Interstate Commerce Act respectively. This would place the provisions of parts II, III, and IV in harmony with the provisions of part I dealing with railroads.

As previously stated, under part III, the period of limitation is now three years, but under parts II and IV the act contains no provisions thus leaving the matter to be determined by the several state statutes. So far as the shippers are concerned the situation is subject to the same objection of uncertainty and undue burden that exists in connection with the filing of overcharge and undercharge claims. As to the carriers it would appear that the bill is of even greater benefit than to shippers since they are now subject to probable action for much more than the 2-year period provided for.

Under present conditions, if the amount invoved was sufficient to justify the expense of filing a claim against the carrier, the shipper could go back over a period of several years, depending upon the application of the State statute of limitations. In Illinois, for instance, the period is 10 years. This not only would unduly burden the motor carriers and freight forwarders, but may likely result in amounts of such degree as to threaten the solvency of many of the carriers and forwarders. We, therefore, believe it extremely important that the provisions with respect to the recovery of damages not based on overcharges be retained in the bill and that the period of limitation be restricted to 2 years.

SPECIFIC EXAMPLES OF DAMAGES TO SHIPPERS

Many instances could be cited where shippers have been charged unreasonable and unlawful rates to their injury. The Bell case affords an excellent example of the charging of an unreasonable rate by the carrier. However, the following will illustrate other types of cases and, we believe, clearly indicate the necessity of providing for a more direct and equitable method by which recovery for damages may be obtained in order that equity and justness may prevail:

Through rate in excess of aggregate of intermediate rates: On December 7, 1943 the Sauk Rapids Granite Co. made a shipment of 21,800 pounds of polished building granite from Sauk Rapids, Minn., to Tampa, Fla. The motor carrier collected charges of $708.50 on basis of a rate of $3.25. The shipper contended such rate was unreasonable and unlawful. A complaint was filed with the Interstate Commerce Commission which found that the rate charged was unreasonable to the extent it exceeded an aggregate of rates on intermediate points of $2.48.

The Commission has over a period of years found that where joint rates exceed the aggrgate of intermediate rates they are prima facie unreasonable. Nevertheless the joint rate is the published tariff rate and must be charged. Redress can only be obtained by complaint to the Commission; however, under present procedure it is also necessary to proceed in court if the carrier is unwilling to make the refund on basis of the Commission's finding.

Rates from intermediate point higher than from more distant point: On August 11, 1943 the Marionville Refrigerating Co. made a shipment of dressed poultry weighing 26,733 pounds from Marionville, Mo., to Chicago, Ill. The rate charged was $1.29, resulting in transportation charges of $344.86. Marionville, Mo., is located on Federal Highway 60 and is directly intermediate on a route from Neosho, Mo., from which a rate of 48 cents per 100 pounds was maintained by the carrier. Charges on basis of the 48 cent rate would have amounted to $128.32. Although Neosho is 47 miles greater distance from Chicago than is Marionville, and carriers operating from Neosho must pass through Marionville on their way to Chicago they nevertheless charged the shipper at Marionville $216.54 more than they would have charged the shipper at Neosho for the movement of the same quantity and same character of traffic.

The Commission has long held that to receive greater compensation for the transportation of property for a shorter distance than for a longer distance, the shorter distance being included within the longer, was prima facie unreasonable. The shipper, in this instance, did not, however, seek redress because the amount involved was not sufficient to justify the time and expense involved in obtaining a determination of the reasonableness of the rate by the Commission and the recovery of damages in court.

Another instance of a similar character also involving a higher charge from an intermediate point than from a more distant point is found in the case of a shipment of fresh eggs from Little River, Kans., two miles north of Federal Highway Route 50-N, to Chicago, Ill. Charges were paid on basis of a rate of $1.49 per hundredweight. However, at that time the carrier maintained from Great Bend, Kans., a point 43 miles west of Little River, Kans., a rate of 65 cents. Thus the shipper at Little River was required to pay a rate of 84 cents more than 100 percent greater than the shipper at Great Bend, although the shipper at Little River is 43 miles nearer to Chicago and received that much less service from the carrier for transporting the same commodity.. Congress long ago recognized that except under certain specific conditions rates for shorter distances should not be higher than rates for longer distances over the same line or route, and that joint rates should not exceed the aggregate of intermediate rates. Section 4 of the Interstate Commerce Act, when enacted in 1887, contained a provision that rates for shorter distances should not exceed rates for longer distances over the same line or route the shorter distance being included within the longer distance under similar circumstances and conditions. In 1910 this section was modified by eliminating the term "under similar circumstances and conditions" and there was added a provision prohibiting the charging of a higher through rate between two points than the aggregate of intermediate rates, although the Commission had in several cases prior to that time found such situation to be prima facie unreasonable.

Damages resulting from misrouting: In addition to numerous cases involving rates from intermediate points higher than from and to more distant points and joint rates, which exceed the aggregate of intermediate rates, there are numerous instances in which the shipper is charged an excessive rate due to failure of the originating motor carrier to observe shipper's routing instructions.

For example, on June 21, 1946, there was shipped from Columbus, Ohio, a shipment consisting of 34 castings, weighing 12,260 pounds, consigned to Fort Atkinson, Wis. The route specified in the bill of lading was Suburban Motor Freight to Chicago and Liberty Trucking Co. beyond, over which a rate of 52 cents was applicable. The originating carrier, however, instead of delivering the shipment to Liberty Trucking Co. turned the shipment over to the Gateway City Transfer Co., over which route a through rate of 64 cents was applicable; thus the shipper was assessed a rate 12 cents per 100 pounds higher than would have been the case had the shipment moved via the route specified on the bill of lading.

Another example is found in a shipment of cotton bedspreads from Monroe, N. C., made by Manetta Mills and consigned to Alden's, Inc., at Chicago. Shipment was routed via Miller Motor Express, thence Transportation Inc., thence Huber & Huber Motor Express. Over this route a rate of $1.24 was applicable. The initial carrier, however, turned the shipment over to the ET & WNC Transportation Co., who in turn delivered the shipment to Silver Fleet Motor Express. Over the route used the rate was $2.26 per 100 pounds, due to a restriction by the Silver Fleet Motor Express against the application of the $1.24 rate. Thus the shipper was required to pay a rate of $1.02 per 100 pounds higher than was applicable over the route shown on the bill of lading because of the failure of the initial carrier to follow routing instructions.

There is at present no provision in the act which requires the motor carrier to observe shipper's routing. Furthermore, motor carriers have attempted to adapt the rail rate structure to their transportation conditions by a device known as "rate stops" resulting in higher rates for longer distances than would normally apply in connection with. rail transportation and which vary substantially with the different carriers. If, therefore, the motor carrier originating the shipment routes the traffic via a carrier maintaining a "rate stop" higher than that applicable via the carriers making up the route requested by the shipper, the shipper is forced to pay exessive transportation charges because of an unlawful act of the initial carrier.

Many additional examples could be cited, but the above are typical. Many calls are received by us from shippers and carriers with respect to claims for overcharges and undercharges filed on shipments moving 3, 4, 5, and even 6 years ago, and also instances where an unreasonable or unlawful rate has been assessed. In the latter cases shippers are concerned with the procedure or method required to obtain refund of excessive charges.

SUMMARY OF POSITION

Our position is summarized by the four following brief points:

1. No period of time is provided by the Interstate Commerce Act within which claims for undercharges must be filed by carriers, sub

60390-47-4

AMEND THE INTERSTATE COMMERCE ACT

ject to parts II, III, and IV, against shippers, leaving applicable only State statutes which vary greatly and in most cases provide an unreasonably long period of time. This condition results in unjust discrimination and places an undue burden upon shippers. A uniform period of 2 years, as provided for by the bill, should be established.

2. No period of time is provided by the Interstate Commerce Act within which shippers must file claims for overcharges against carriers, subject to parts II and IV, resulting in application of State statutes which vary greatly and which provide an unreasonable length of time. This condition creates unjust discrimination among shippers and places an undue burden against carriers. A uniform period of 2 years, as provided for by the bill, should be established.

3. No provision is contained in parts II and IV of the act authorizing the Interstate Commerce Commission to make an award of reparation thus placing an undue burden upon shippers damaged by unlawful acts of the carriers by requiring expensive and burdensome joint commission-court action. This condition makes it practically impossible for small shippers to obtain redress against injurious acts of the carriers and prevents recovery of damages for nominal amounts which, however, in the aggregate are important. The provision now contained in part I, applicable to railroads, should be made applicable to motor carriers subject to part II and freight forwarders subject to part IV.

4. No Federal period of limitation within which action for recovery for damages (i. e., reparation) may be brought is provided for in connection with parts II and IV of the act leaving State statutes to be applied. Part III, dealing with water carriers, provides a period of limitation of 3 years and part I, applicable to the railroads, a period of 2 years. To eliminate unjust discrimination and undue burdens resulting from this situation, a uniform period of 2 years, as provided for by the bill, should be made applicable to all carriers.

The CHAIRMAN. I have just consulted with Mr. Lea with reference to the executive session. I have suggested to him that it might be well if the bill that we previously had under consideration be submitted to Mr. Perley, so that he may have in mind the suggestions which were made in the report of the Civil Aeronautics Board, and also the amendment suggested by the ICC, which can be acted on tomorrow morning, instead of today.

The CHAIRMAN. Is Mr. Brashear present?

STATEMENT OF HARRY R. BRASHEAR, DIRECTOR OF TRAFFIC
SERVICES OF THE AIRCRAFT INDUSTRIES ASSOCIATION OF
AMERICA, INC.

Mr. BRASHEAR. Yes, sir.

My name is Harry R. Brashear and I am director of traffic services of the Aircraft Industries Association of America, Inc., a trade association comprised of the principal manufacturers of aircraft and aircraft parts in this country. It is in behalf of these members that I speak and I speak in support of H. R. 2324.

In the course of their business, members of this association have occasion to use to a substantial extent services of common carriers by highway and are, therefore, interested in H. R. 2324.

There are a number of reasons why we think the 2-year limitation should be provided by law:

First, that part of the bill which would limit recovery of undercharges by motor carrier to a period within 2 years from the time the cause of action accrues is of especial interest at this time. As there is no Federal statute which limits the time within which such actions may be brought, reliance must be had upon State statutes which may run as long as 4 or even 6 years. Right now in a number of instances our members are called upon to pay additional charges on shipments which were transported by motor carrier 4 years ago. Four years ago, that is in 1943, we were in the middle of the war and many of the shipments involved in these undercharge claims moved to plants that have long since been closed. The personnel that handled these shipments has largely been released and has gone into other activities, making the search of such records a difficult procedure.

Second, some of the carriers that rely upon these State statutes for the collection of their undercharges have published rules in their own tariffs limiting shippers to a 2-year period for the filing of claims for overcharges.

Third, highway carriers publish and file with the Interstate Commerce Commission bill of lading rules which limit the time for recovery of damage for loss or injury to goods to 2 years.

Fourth, part I of the act imposes a 2-year limitation on rail carriers and over a period of years this has been found satisfactory.

The bill also provides for the extension of these rules to carriers under parts III and IV of the act, as well as giving power to the Interstate Commerce Commission to order the payment of reparations by carriers subject to parts II, III, and IV of the act similar to the provisions of part I. These provisions we think are reasonable and we favor their enactment by Congress.

In addition to that, Mr. Chairman, I want to say that I endorse fully the statement that was made by Mr. Estes of the National Industrial Traffic League.

The CHAIRMAN. Thank you, Mr. Brashear.

If you have any desire to add to your statement which you have submitted this morning you may feel free to do so.

Mr. BRASHEAR. Thank you, sir.

The CHAIRMAN. May I inquire from Mr. Morrow, representing the Freight Forwarders Institute, and Mr. Lawrence, representing the American Trucking Association, how long their respective statements may be?

Mr. MORROW. Mr. Chairman, my statement will require almost half an hour to read. It is rather technical. I expect it will bring forth some questions. It will take considerably longer. The CHAIRMAN. Mr. Lawrence?

STATEMENT OF JOHN V. LAWRENCE, MANAGING DIRECTOR, AMERICAN TRUCKING ASSOCIATION, INC., WASHINGTON, D. C.

Mr. LAWRENCE. I think about 15 minutes, Mr. Chairman. The CHAIRMAN. I would suggest to the committee, then, that we hear Mr. Lawrence at this time. Then, at the conclusion of his testimony we will make arrangements with respect to hearing Mr. Morrow.

Mr. LAWRENCE. Mr. Chairman, I would be delighted to go on now or later. It so happened we want to adopt certain of Mr. Morrow's testimony, rather than repeat it ourselves.