of a carrier who has filed a tariff or schedule in behalf of such carrier shall be deemed to be due and sufficient service upon the carrier.

An identical sentence was included in subsection 315 (a), the counterpart of subsection 221 (a) in part III, and also in section 16 (5) of part I with an important exception to be mentioned later.

In the case of motor carriers and water carriers this authority to serve notices of this kind, chiefly relating to suspension of tariffs, upon a publishing agent only instead of all the carriers for whom he acts has saved the Commission much time and money and has worked satisfactorily. The economy would be still greater if the authority could be broadened to apply also to situations in which one carrier publishes a joint tariff to which other carriers are parties. The position of the publishing carrier in these circumstances is analogous to that of a publishing agent. We therefore recommend that the sentences in subsection 16 (5), 221 (a) and 315 (a) above referred to be amended to read as suggested in sections 6, 14, and 19 of the bill.

The provision authorizing representative service of suspension notices upon a publishing agent which was added to section 16 (5) in 1940, however, was coupled with an exception:

* * * except where the carrier has designated an agent in the city of Washington, District of Columbia, upon whom service of notices and processes may be made, as provided in section 6 of the act of June 18, 1910.

This exception has prevented the arrangement for representative service on publishing agents from having any important value, for most of the railroad companies and other carriers subject to part I have such agents in Washington. The service of suspension notices on the latter agent is purely a formality, since commonly the publishing agent or carrier is advised by telegraph of the tariff suspension. Under sections 14 and 19 you also propose to amend subsection (a) of section 221 of part II and subsection (a) of section 315 of part III by striking out the word "registered."

Subsections 221 (a) and 315 (a) provide that service of notices or orders in proceedings under part II and part III, respectively, may be made upon a motor carrier or a water carrier—

* * by personal service upon it or upon the person so designated by it, or by registered mail addressed to it or to such person at the address filed. In commenting upon the bills which were the basis of the Transportation Act of 1940, we said of this requirement of service by registered mail:

In view of the very large number of motor carriers whoch often have to be served, the requirement that the mail be registered is costly and causes much delay, and it does not aid materially in proving subsequently that the service has been made. The Commission would continue to serve the principal parties to proceedings by registered mail, but the act requires, in addition, service upon other carriers, often hundreds, who may have a competitive interest.

We therefore approve striking of the word "registered" from subsection 221 (a) and 315 (a). We are supported in this conclusion by the further fact that in the enactment of part IV of the act service on freight forwarders by ordinary mail was authorized in subsection 416 (a), which corresponds to subsections 221 (a) and 315 (a). We have heard no criticisms of subsection 416 (a) on this account.

Sections 14 and 19 also delete the word "registered" where it appears in section 221 (a) and section 315 (a), and would permit serving a great number of motor carriers that have to be served by mail in

some of the proceedings by regular mail instead of registered mail. The next section is No. 7 in the bill. This is really a clarifying amendment which covers 12 sections of the bill and brings in associations so far as making reports to the Commission is concerned and makes their records available to the employees of the Commission. These sections are 7, 8, and 9 of the bill, amending section 20, paragraphs (1), (5), and (8); and 11, 12, and 13 of the bill, amending section 220, paragraphs (a), (d), and (e); and sections 16, 17, and 18 of the bill, amending section 313, paragraphs (a), (f), and (h); and sections 20, 21, and 22 of the bill, amending section 412, paragraphs (a), (d), and (f).

The important item to which I will direct your attention is found at the end of section 9, in the definition of an association.

You will notice that after "association" is defined, as it was originally in the other bills, there now appears in your bill S. 2426, a relative clause at the end of section 9

which performs any service or engages in any activities, in connection with any traffic, transportation, or facilities subject to this Act.

When we appeared before the House committee, Mr. Thompson and Mr. Krebs, representing their respective associations of water carriers, appeared, as did an official from one of the associations on the Pacific coast. As a result of their presentation, this same relative clause was added at the end of section 18, which amends section 313, paragraph (h), I think it is. As a result of their presentation, the House committee placed this same clause at the end of section 18, and then, to make it uniform, they placed it also at the end of section 13 in defining an association of motor carriers, and at the end of section 22 in defining an association of forwarders.

So there is in S. 2426 this same relative clause, as a part of the definition of an association appearing in the appropriate section of the bill amending each part of the act, so far as the definition of an association was concerned.

May we insert the discussion on this point in the record?

Senator REED. Yes.

Commissioner SPLAWN. The Commission's fifth legislative recommendation was as follows:

We recommend that the various provisions of the act, authorizing us to require reports from carriers and others and to inspect and copy accounts, books, records, etc. (secs. 20, 220, 313, and 412), be amended so as to be applicable to associations or organizations maintained by or in the interest of any group of carriers or freight forwarders subject to the act.

The associations or organizations of this kind are numerous. The ones best known are the Association of American Railroads; the American Trucking Associations, Inc.; and Freight Forwarders Institute. They include rate bureaus and similar organizations. Such associations are not at present subject to the provisions of the Interstate Commerce Act which authorizes us to require the filing of reports by common carriers and others. Manifestly, they occupy positions of public importance with respect to transportation and its regulation, and we believe that they might well be required to file reports.

With respect to our right to inspect and copy accounts, records, et cetera, of these associations and organizations some provisions of the Interstate Commerce Act as they now read perhaps are susceptible of an interpretation giving us this authority. Occasionally we have

exercised it with the acquiescence of parties affected, but our authority is none too clear. The amendments proposed in the sections of the bill above enumerated would remove any doubt.

Now, we come to section 10 of the bill, to which I have already referred, which amends section 20a by including a sleeping-car company in paragraph (1).

We might place in the record here the discussion of section 10 from the letter, which merely explains the amendment placing a sleepingcar company in paragraph (1) of section 20a of the act.

There is added to the present bill a new section 10, giving the Interstate Commerce Commission jurisdiction over the issuance of securities by sleeping-car companies. This was the subject of a separate bill, H. R. 2331, which was vetoed by the President in his message of July 30, 1947, because of objections he had to section 2 thereof. In this message, the President found no objection to section 1, and as that section is complete in itself and is not dependent on section 2, to which he found sufficient objection to cause him to veto the bill, the amendment in section 10 is confined to that part of H. R. 2331 which the President approved.

Now, we come to section 15 of the bill, which is the last one and has not been referred to.

Section 15 of the bill adds a new paragraph (h) to section 222 of the act. Section 222 of the act provides penalties and procedure in the courts for violations of the Commission's orders under part II. This new paragraph (h) would give, as an alternative to criminal prosecution, a civil action, that is, an action for forfeiture or recovery into the Treasury of the United States the amounts specified per day for the violation, instead of going to the grand jury.

I will place in the record the discussion of this amendment contained in section 15 of the bill.

The eighth legislative recommendation read in part as follows:

We recommend that section 222 be amended by adding a new paragraph which would provide a remedy by forfeiture for failure of motor carriers, brokers, etc., to keep records in accordance with regulations prescribed under part II of the act or failure to file reports prescribed thereunder. * *

At present motor carriers and other persons subject to part II of the Interstate Commerce Act who fail to file reports or keep records required by statute or regulation of the Commission are punishable by fine in a criminal proceeding. This remedy has been found sumbersome and unsatisfactory. As the reports of this kind must be filed at the office of the Commission in the District of Columbia, the venue of a prosecution for violation of this requirement is also in this district. The Commission has been reluctant to recommend the filing of information for such offenses, which would compel defendants to come from remote sections to Washington for trial. Difficulty has also been encountered in punishing truck drivers who falsify their logs, since the prosecution must be in the judicial district where the false entry was made. As the driver frequently traverses more than one such district, it is often impossible to acertain where the offense was committed.

These difficulties could be removed by provision of a remedy by way of a civil action for forfeiture of a sum of money to the United States as a penalty for such offenses. Suits of this kind need not be

brought in the judicial district where the wrongful act is committed. Section 15 of the bill would afford such a remedy.

This, Mr. Chairman, covers our explanation of your bill, S. 2426. Senator REED. Very well, Doctor.

Is there anything you want to add to your statement?

Commissioner SPLAWN. We recommend, of course, as we have recommended in our annual report with reference to each of these amendments. There is, I believe, agreement on the part of the carriers and the parties involved that these amendments should be adopted, or at least there is acquiescence by most of them and there is no opposition that I know of. There may be some here today.

Senator REED. Who wants to be heard on this bill with reference to the statement that Dr. Splawn has just made?

Mr. Lawrence, do you want to be heard?

Mr. LAWRENCE. Very briefly; yes, sir.

Senator REED. If anybody wants to be heard, we will take a recess This roll call which I was expecting is any time now. It will probably take 15 minutes, so we will take a recess for 15 or 20 minutes.

I will get back just as soon as we complete the roll call. (Thereupon, at 2: 30 p. m., a recess was taken.) Senator REED. The committee will come to order.

Mr. Lawrence, do you want to make a statement?

Mr. LAWRENCE. I do not know if I am in order. Was there not somebody else ahead of me?

Senator REED. I do not have any particular order. According to the list I have here, Mr. Barber is next. He represents the Brotherhood of Railway Clerks, Freight Handlers, Express and Station Employees.

Mr. BARBER. If Mr. Lawrence wants to get away, it is all right with me.

Mr. LAWRENCE. I am in no rush.

Senator REED. Very well. You may proceed, Mr. Barber, please.

STATEMENT OF HARTMAN BARBER, GENERAL REPRESENTATIVE, BROTHERHOOD OF RAILWAY CLERKS, FREIGHT HANDLERS, EXPRESS, AND STATION EMPLOYEES

Senator REED. I would like to get done this afternoon, gentlemen, because I am considerably crowded for time.

Mr. BARBER. I have a short statement, and if I may be permitted, I would like to read it.

Senator REED. All right, Mr. Barber.

Mr. BARBER. Mr. Chairman and members of the committee, my name is Hartman Barber. I am a general representative of the Brotherhood of Railway and Steamship Clerks, Freight Handlers, Express and Station Employees assigned to Washington to handle legislative matters.

Our local office is located at room 301, 10 Independence Avenue SW., Washington 4, D. C., and our headquarters is located at 1015 Vine Street, Cincinnati 2, Ohio.

Section 24 of the bill, S. 290, would amend section 411 (c) of the Interstate Commerce Act which prohibits and has prohibited since May 16, 1942, the control of freight forwarders by any director, officer,

employee, or agent of any common carrier subject to parts I, II, or III, or of any person controlling, controlled by, or under common control with such a common carrier, in his or their own personal pecuniary interest, to own, lease, control, or hold stock in, any freight forwarder, directly or indirectly.

The Interstate Commerce Commission in recommending the amendment of this section would provide that such controls would not be permissible

*

* unless such control, or holding shall have been authorized by order of the Commission, that neither public nor private interests will be adversely affected thereby.

Section 411 (c) as presently worded was enacted into law on May 16, 1942, and the reason for the enactment of this section was to prevent an officer or other employee of a water carrier, motor carrier, or railroad from obtaining control of a freight forwarder and discharging his duties in such a way as to adversely affect the railroad and benefit the forwarder.

While we are mindful of the provisions of section 411 (g), yet the existence of section 411 (c) has acted as a powerful deterrent in forestalling, at least, in part, of practices inimical to railroads, motor carriers, water carriers, and freight forwarders alike by assuring independent operations of freight forwarders and their continuance as a separate industry, although certain freight forwarders have come under the control of various carriers, mostly through the medium of the holding company.

The Commission's amendment would prohibit such ownership, lease, control, or holding unless authorized by the Commission and that neither public or private interests will be adversely affected thereby.

The courts have ruled that the interests of employees are included within the meaning of the word "public." The Interstate Commerce Commission has not hesitated about approving consolidations or mergers when objections were made about the displacement of employees other than to invoke protective measures affecting employees of carriers under parts I, II, and III of the act.

To be perfectly frank, it is thought that if section 411 (c) is amended as requested by the Commission, widespread consolidation will follow of most freight forwarders to the detriment of the employees of these companies, the great bulk of whom are represented by this brotherhood.

We have every reason to believe that the Chesapeake & Ohio Railroad, which controls the National Carloading Co., and which is now seeking control of the New York Central Railroad, will take steps to merge the National Carloading Co. with the Universal, if they secure control of the New York Central. If such an eventuality occursand we have reason to think it quite probable-then other consolidations will follow. No doubt other carriers would view a merger of the National Carloading Co. and the Universal Carloading & Distributing Co. with alarm and form a merger of the other freight forwarders as a competitor of the combined company.

In any event, the employees of the freight forwarders would be the ones to suffer. These pawns in the game of high finance and corporate merger would be decimated. In all probability one-half of the present forces of the freight forwarders would lose their jobs.