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able performance, considering the vast volume of traffic during the war, the tremendous amount of new traffic, the great change in the consistency of the traffic, and the bringing in of so many carriers on the highways into the service of the Government.

So I am not persuaded by rereading this statement that the General Accounting Office cannot meet this postaudit of bills within the 2-year period, and if there is any difficulty, they know how to get the benefit of an extension of the period of limitations.

Senator REED. Is there anything further that occurs to you, Doctor? Mr. SPLAWN. I have nothing further, Mr. Chairman, except that I was impressed by the earnest plea of this gentleman from Rhode Island. We have not considered that. That is a new proposition. We think you were quite right in drawing your bill directing it to the future, and make it applicable after it is passed and becomes effective. On a new question like that, we would want more time to look into than just overnight, the time we have had.

Senator REED. Thank you, Doctor.

Any questions?

Senator MYERS. Just one question, Doctor.

What effect, in your opinion, had the elimination of the preaudit in 1940? What effect did that elimination have upon the final determination of the correctness of a charge from the point of view of determining the time for the filing of a claim for an alleged overcharge? Mr. SPLAWN. Your question is as to the accuracy?

Senator MYERS. No. Do you think it had any effect upon the time limitation, the limitation-elimination of the preaudit?

Mr. SPLAWN. Yes. I think the elimination of the preaudit made for great convenience, because to have an audit you know takes time, and that would have held up the carriers on all this war traffic for so many weeks or months that it would have been quite burdensome.

I think the change there was very beneficial, and I understand that the postaudit is working out in the main satisfactorily.

Senator MYERS. Therefore, you do not believe that the elimination of that preaudit affected the Government in any way in its determination of whether or not it should file a claim for alleged overcharges? Mr. SPLAWN. No. That determination could only be made after an audit, and a postaudit, it seems to me, should be just as thorough as the preaudit.

I don't think that that would affect the judgment of those having the responsibility, particularly.

Senator MYERS. In fact, that elimination gave the Government— Mr. SPLAWN. More time.

Senator MYERS. More time, and therefore the Government itself is in a better position to determine its overcharges as a result of the elimination of the preaudit.

Mr. SPLAWN. I should think so.

Senator HAWKES. Dr. Splawn, I had to step out of the room to take a telephone call. Did I understand that you feel that 2-year provision is ample?

Mr. SPLAWN. For all parties. I think so.

Senator HAWKES. Do you feel that the Government, as the Interstate Commerce Commission has felt for so many years, should be regarded as a shipper in the same sense of the word, as other shippers?

Mr. SPLAWN. I believe that the Government can comply with the 2-year period.

Senator HAWKES. That is what I meant. Thank you very much. Senator REED. Thank you, Doctor.

Let the Chair announce that the hearing set for tomorrow morning will have to be deferred until Friday morning at 10:30, because I am on appropriations and the committee meets tomorrow morning to mark up one of the important bills to determine the amount we are going to appropriate. We will therefore set the hearing on S. 290 on that time, and whatever other bills were announced at that time, for Friday morning at 10:30.

Here is a telegram from the Los Angeles Traffic Managers Conference. Please include it in the record. Also a telegram from R. K. Keas, St. Louis, in behalf of the Illinois Territory Industrial Traffic League, approving the bill, and a letter from Senator Cordon and the acompanying telegram.

(The communications follow :)

Senator CLYDE M. REED,

LOS ANGELES, CALIF., March 29, 1948.

Senate Office Building, Washington, D. C.:

This conference are shippers and users of transportation and observe that your subcommittee will conduct hearings Tuesday and Wednesday on H. R. 2759 and S. 1194, S. 571, and S. 935. While we are in complete sympathy and accord with objectives of S. 1194, a feature most urgently in need of immediate legislative treatment is provision for statute of limitations connection motor carriers part II of Interstate Commerce Act. This conference urges that subcommittee report favorably and promote early passage of H. R. 2759 as passed by House treating with damages and reparation in separate legislation.



Senate Office Building, Washington, D. C.:

ST. LOUIS, Mo., March 29, 1948.

Am just advised your committee will tomorrow begin hearings on S. 1194 fixing a statutory period of limitation for collection of undercharges and overcharges and providing as to certain classes of carriers for award of reparation in the case of unreasonable rates by Interstate Commerce Commission. On behalf of Illinois Territory Industrial Traffic League, an organization of industries and chambers of commerce throughout State of Illinois, I desire to file a written statement in support of bill. Please advise if agreeable, how many copies shall be furnished and when. Regret my inability to appear personally.



March 30, 1948.

Committee on Interstate and Foreign Commerce,

United States Senate, Washington, D. C. DEAR SENATOR: I have received a notice from the clerk of the Committee on Interstate and Foreign Commerce that a subcommittee of that committee, of which you are chairman, will hold hearings today and tomorrow on my bills S. 571 and S. 935, and H. R. 2759, providing limitations on the time in which claims may be made for overcharges and undercharges by or against common carriers.

In the Seventy-ninth Congress I introduced a bill providing a 2-year limitation on carriers other than rail, which purpose is accomplished by H. R. 2759 of the present Congress now pending before your committee. When the committee considered my bill in the Seventy-ninth Congress it was reported with an amend

ment changing the period of the limitation to 3 years due to the fact that a bill providing a 3-year limitation for rail carriers had previously been reported out of the committee and it was agreed that there should be uniformity as between carriers. Both bills failed of enactment during the Seventy-ninth Congress and at the beginning of the Eightieth Congress I introduced S. 571 in the identical form the legislation was passed by the Senate during the Seventy-ninth Congress. I later found that the other bill relating to rail carriers which had been favorably reported from your committee in the Seventy-ninth Congress had not been reintroduced in the Eightieth Congress; therefore, in the interest of uniformity, I introduced S. 935 which includes all carriers and provides for the 3-year limitation.

H. R. 2759 as it passed the House on January 13, 1948 accomplishes the purpose I originally sought and I hope the committee will report it to the Senate in the form it passed the House in the interest of securing final passage of this legislation during the current Congress.

I enclose for your consideration telegrams I have received from the Portland (Oreg.) Industrial Traffic Club and the Seattle Traffic Association as well as the Tacoma (Wash.), Chamber of Commerce endorsing H. R. 2759.

Sincerely yours,


PORTLAND, OREG., March 29, 1948.


Senate Office Building, Washington, D. C.:

We, the Portland Industrial Traffic Club, want to be placed on record as favoring House bill 2759 as it now reads, providing for 2 years' statutory limitation for filing overcharge claims for both shipper and truck carriers and making limitations uniform with rail carriers.



PORTLAND, OREG., March 30, 1948.


Senate Office Building, Washington, D. C.: Seattle Traffic Association urges committee approval of and passage of House bill 2759 fixing 2-year period limitation payment overcharges and undercharges between motor carriers and shippers same as presently in effect between railroads and shippers. Would result in uniform statute of limitations benefiting all concerned.


TACOMA, WASH., March 30, 1948.


Senate Office Building, Washington, D. C.:
Urge support H. R. 2759 statute of limitations motor freight operations.


Senator REED. Let the record show that some time ago a request was made of the Department of Justice for expression of an opinion on H. R. 2759, but no report has been received.

We will recess now until Friday morning at 10:30.

(Whereupon, at 12:20 p. m., the hearings on S. 571, S. 935, S. 1194 and H. R. 2759 were concluded and the subcommittee adjourned until 10:30 a. m., Friday, April 2, 1948.)

(The following statements, letters and telegrams were submitted for the record :)

Chicago 2, Ill., March 29, 1948.

Chairman, Subcommittee,

Senate Interstate and Foreign Commerce Committee,

Washington, D. C.

DEAR SENATOR: I have your telegram advising of the hearings on March 30 and 31 on S. 1194. I regret that previous engagements make it impossible for me to be present on these dates, however, we are very much interested in this bill and I am enclosing herewith five copies of a statement in support of the bill. Fortyfive additional statements for your use are being mailed to the clerk of the committee on Interstate and Foreign Commerce.

The passage of this bill will be beneficial to both carriers and shippers. It will provide equality of treatment in the regulation of all forms of transportation and it will avoid the discrimination and undue burden now placed upon shippers. As indicated in my statement appearing on pages 15 to 22 of the report of the hearings before the House Committee on Interstate and Foreign Commerce in connection with H. R. 2324, there are many instances in which the shippers have been charged unreasonable and unlawful rates and because of the present procedural methods did not obtain redress for damages resulting therefrom. This is particularly true where the shipments are made by small shippers and from and to small communities.

As shown in my statement before the House committee on page 20, small shippers located at Little River, Kans., were required to pay rates more than 100 percent higher than the shippers at Great Bend, Kans., paid on shipments of fresh eggs to Chicago, although Little River is 43 miles closer and is intermediate on a route of movement from Great Bend to Chicago. The only way in which the shipper at Little River can obtain any redress is through the expensive courtCommission-court procedure now necessary.

I sincerely hope that you will incorporate my statement in the record and that your committee will favorably recommend early passage of this much needed legislation.

Yours very truly,

Traffic Director.


The Chicago Association of Commerce and Industry, hereinafter referred to as the association, urges early enactment of S. 1194, a bill to amend the Interstate Commerce Act with respect to the liability of common carriers by motor vehicle, common carriers by water, and freight forwarders for payment of damages to persons injured by them through violations of such act. Primarily, the bill provides a 2-year statute of limitation for the filing of claims for overcharges, undercharges and other damages, hereafter termed "reparation" for common carriers by motor vehicle, common carriers by water and freight forwarders so as to make uniform such statutory period in all four parts of the Interstate Commerce Act.

Such uniformity is not only highly desirable but is necessary in order to provide equal treatment with respect to the transportation via all types of carriers, to avoid the confusion which now exists due to the varying periods of time allowed by State statutes, and to remove the discrimination which exists at present particularly against small shippers.

The association was represented in hearings before the House Committee on Interstate and Foreign Commerce on March 18, 1947 and testified in support of H. R. 2324, a bill similar to S. 1194. The testimony appears on pages 15 to 22 inclusive of the printed report of the hearings and cites numerous examples of the difficulties encountered by shippers under the present State statutes and because the Interstate Commerce Act does not contain in parts II and IV a

provision authorizing the Interstate Commerce Commission to award reparation for the assessment of an unreasonable rate or for other violations of the act by carriers subject thereto. The examples there cited will not be repeated here but illustrate clearly the practical difficulties under which shippers as well as carriers must now operate.

In general terms the bill may be divided into two parts, the first providing for a 2-year period of time within which carriers may file claims for undercharges against the shipper and a 2-year period of time within which shippers may file claims for overcharges against carriers. The second providing that the Interstate Commerce Commission be given the power to award damages (reparation) for a violation of the act and providing a 2-year period of time within which claims for such damages must be filed by the shipper.

In the hearings before the House Committee there appeared to be unanimous support for the early enactment of a uniform 2-year statute of limitation for the filing of claims for overcharges and undercharges. Motor carriers and freight forwarders, however, objected strongly to the enactment of a provision under which the Interstate Commerce Commission would be given the authority to make an award of reparation for violation of the act. Apparently both the motor carriers and freight forwarders proceed on the theory that there is now so such provision in the act and that therefore an award of reparation for damages cannot be made. This, of course, is not the case. However, the present system is cumbersome and expensive and frequently acts as a bar to the recovery of damages, particularly when the amount is not large or when shipments are made by small shippers who do not have a staff of attorneys nor an adequate traffic department to handle claims and suits of this character.

In Bell Potato Chip Company v. Aberdeen Truck Line, et al, 43 M. C. C. 337, decided April 4, 1944, hereafter referred to as the "Bell Case," the Interstate Commerce Commission found that it had the authority to make a determination of the issue of unreasonableness or unlawfulness of rates published and collected by motor vehicles on shipments which had already moved. In order to obtain redress, however, against an unwilling carrier, the shipper must, after having obtained a finding from the Interstate Commerce Commmission that the rate charged on past shipments was unlawful, proceed with an action in court using the Commission's decision as evidence of the unreasonableness or unlawful character of the rate charged but proceeding otherwise like an original suit in court. In the Bell case the Commission suggested that in order to prevent the filing of frivolous or moot complaints, proceedings involving the charges on past shipments should not be brought before it prior to the institution of a suit in court in which damages are sought predicated upon the unlawfulness of the rates alleged in the complaint. The procedure would, therefore, be to file a suit in court, then ask the court to hold the case in abeyance pending the filing of a complain with the Interstate Commerce Commission and a determination of the issues by the Commission. After a finding by the Commission, the shipper goes back to court and continues with the suit brought before the complaint was filed with the Commission.

In Victory Granite v. Central Truck Lines et al, 43 M. C. C. 337, the Commission in commenting on the Bell Case stated that it did not intend to and did not prescribe an inflexible rule requiring that complaints involving reparation must show that a suit has been instituted in court before the Commission may exercise its jurisdiction to make an administrative finding. The Commission stated that generally speaking proceedings of this type should not be brought before it prior to the institution of a suit in court and that the complaint should show that action in court has been brought within the period allowed by the applicable statute of limitation.

It seems to us that this adds still further confusion to the present situation since there is no definitely clear statement as to the procedure which ought to be followed and, therefore, in order to be certain that the complaint will be considered by the Commission a suit in court prior to the filing of the complaint would appear necessary. This, in our opinion, is an unreasonable requirement since it involves an expense which must be incurred before any determination by the Commission as to the lawfulness of the charges under consideration. It may be that the Commission will find that the rates assailed in the complaint were not unreasonable and, of course, then there would be no occasion for any further court action and in fact no suit could be successfully maintained. Favorable action by the Commission is a condition precedent to any court procedure. The proposed bill would clarify this matter and simplify the procedure so that the filing of a complaint could proceed directly with the Commission and it could

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