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Senator MYERS. But they will not be in the large volume that were prevalent during the war.

Mr. Fort. For a while they were fairly large because there was a postwar adjustment, and things were moved from one point to another.

Senator MYERS. Would all those claims be outlawed now if the 2-year period has expired?

Mr. Fort. In the event that they would not be lifted from the statute by claims having been filed with the railroads and not yet disallowed by the railroads; yes.

Senator MYERS. If the claims had not been filed by the railroads and disallowed or if they had and then the claims had not been filed with the commission, those claims are now outlawed by section 16, are they not?

Mr. FORT. On shipments moving more than 2 years ago.
Seantor REED. Thank you very much, Mr. Fort.
Mr. FORT. Thank you, sir.
Senator REED. Mr. Morrow?

File your statement, please, Mr. Morrow, and discuss the main points.



Mr. MORROW. Mr. Chairman and members of the subcommittee, my name is Giles Morrow. I am executive secretary and general counsel of the Freight Forwarders Institute, and I appear in behalf of the members of that organization.

The institute is the national organiaztion of freight forwarders, subject to part 4 of the Interstate Commerce Act. The offices of the institute are located in the Colorado Building, Washington, D. C.

Mr. Chairman, at your suggestion, I will file this prepared statement and atempt to summarize it as briefly as possible. However, there are some parts of it which are rather technical in nature, and I am very anxious that our position be understood on these.

Senator REED. The committee wants you fully to state your position. In a general way I understand you approve the limitation period. What you object to is the reparation feature of the bill; is that correct ?

Mr. MORROW. That is correct.
Senator REED. You and John Lawrence are in the same position.

Senator HAWKES. I missed that, Mr. Chairman. What does he object to?

Senator REED. The freight forwarders, the same as the truckers, favor a uniform limitation period, which would be 2 years if you made it uniform with the rail carriers. But you do object to, at least you are not in favor of, that part of the bill which pertains to reparation.

Mr. MORROW. We very strongly oppose that part of the bill for reasons that I will state as I

go along The industry endorses fully 8. R. 2759. To the extent that bills S. 571, S. 935, and S. 1194 differ from or conflict with the provisions of H. R. 2759, the industry is opposed to such bills.

I will state first very briefly our reasons for supporting H. R. 2759, and then I will discuss the grounds on which we oppose the 3-year statutory limitation and also the reparations provisions in S. 1194.

So far as I know, there is no opposition to the provision for a uniform statutory period of limitation on overcharges and undercharges.

Senator REED. There is opposition, Mr. Morrow, from some sources.

Mr. MORROW. Yes. I should qualify that. There is some opposition to it, but the great body of shippers, I believe, certainly those represented by Mr. Lacey, favor a uniform period, and I have not heard of any very serious or organized opposition to a uniform period.

Senator MYERS. Is there any opposition other than on the part of the General Accounting Office?

Senator REED. Mr. Morrow is very familiar with this, and so is Mr. Lacey.

Where a shipper is big enough to maintain his own traffic bureau, they usually do so. There has grown up all over the country, including New Jersey and Pennsylvania and Kansas, what is known as a freight-bill bureau or collection bureau, that will take business from the small shippers, collect their freight bills, audit them, check them against the tariffs, and make the claims for overcharges if there be any.

They live, usually, on the basis of dividing what they recover on some agreed percentage basis. Of course, very naturally, those people who are very numerous throughout the country want to have the longest period of limitation that it is possible for them to have. They have to collect these bills.

Some of these shippers are small, and perhaps make a collection only over monthly bases, or 2 or 3 months. I have seen them operate in my territory out there when I was in the active practice before this Commission, where they would have people who went out regularly, looking up claims, sort of like personal injury cases.

Senator MYERS. Do not look at me, Mr. Chairman, when you say that.

Senator REED. Being a lawyer, I knew you would appreciate that. So those people universally oppose any shortening of the period of limitation. They would not have any at all if it were practicable.

Mr. MORROW. That gives me an opportunity to say, somewhat out of text, but it is very appropriate to say it at this time, Senator, and members of the committee, that that is one of the very reasons we oppose reparations.

That type of activity was very much more in evidence during the years when the subject of reparations was important in the case of railroads.

We fear a return of that practice, as I am going to show as I go along.

Senator REED. Out of my knowledge of the subject, Mr. Morrow, I don't object to these rate bureaus. I think they do render small shippers, perhaps, a desirable service. The principal objection is that there are so many fly-by-night fellows who go out and collect freight bills and maybe don't advise their clients as to what they have collected, don't necessarily make a proper settlement with their clients, and sometimes don't make any settlement with them.

I have had cases brought to my attention out in my own country where they would go out and collect freight bills and maybe make collections, and that was the last the shipper who actually diil the



shipping ever heard of it. I do not know how numerous that might be, but there is the main objection, the reliability of some of these freight-bill bureaus.

Mr. MORROW. Yes. If properly operated, I am sure they have a place in our economic system, but my experience under part 4 has been that the few complaints—I say few, perhaps there have been a dozen complaints filed—have almost invariably originated with one of these freight-claim bureaus or a man representing one of these freight-claim bureaus.

If he is forced to take any action which costs his client any money, he generally doesn't press his claim, but so long as he can do something by simply writing a letter or informally getting his position before the Commission, he files claims.

I do not think it is necessary for me to say more on the question of the 2-year period as against the 3-year period of limitation. I think it would work a hardship on the carriers and the shippers to be required to maintain records and perhaps to maintain financial reserves against claims for a period of 3 years.

A period of 2 years seems to be working very satisfactorily in the case of railroads, and we think that is adequate.

Turning to bill S. 1194, I want to point out that this bill is very similar to H. R. 2324, which was before the House of Representatives when hearings were held in March 1947.

As the result of the hearings on that original House bill, H. R. 2759, the House committee was convinced that this was not the proper time to apply reparations provisions to parts 2 and 4 of the act.

I would like to read one provision from the House committee report, No. 208, which accompanied bill H. R. 2759. I am quoting:

This committee held hearings on H. R. 2324, and, on the basis of the testimony given at the hearings, decided that it did not favor, at this time, legislation making reparation provisions applicable to common carriers by motor vehicle and to freight forwarders.

The committee felt, however, that the provisions of the bill insofar as they related to other matters should receive favorable consideration. In consequence of this decision, the bill here being reported was introduced.

My attention was directed just yesterday to one provision of bill S. 1194 that did not appear in the House bill. It relates to an amendment to part 4 that is not made in part 2 by bill S. 1194. Section 5 of bill S. 1944, appearing at the top of page 8, amends subsection 406a of the Interstate Commerce Act; 406a, as it stands in the law today, authorizes the filing of complaints; section 5 is not necessary, of course, to the remaining sections which provide for an award of damages and for limitations on overcharges and undercharges, but for some reason section 406a is proposed to be amended by section 5 of this bill.

I thought at first that might have some significance since this same amendment is not applied in the earlier parts of the bill relating to motor carriers.

I find on a further check that apparently it has no significance. It merely attempts to copy in the provisions of section 13, paragraph 1, from part 1. Then it uses the word "petition” rather than "complaint," but apparently that has no real significance, because the regular complaint procedure is followed under part 1, and I take it that this rewrite was merely for the purpose of uniformity and has no significance otherwise.

I know that the Commission apparently feels that way, because in the part of the appendix to the letter of the legislative committee of May 7, 1946, filed by Dr. Splawn yesterday, I find on page 10 of that opinion that the Commission remarks that this paragraph to which I have been referringfollows to a considerable extent the language of section 13 of part 1, except that it is confined to a complaint by any person, whereas section 13 refers to firms, corporationsand uses other language.

But the commission concludes that the changes are minor.

I did not want to overlook that, because I am afraid some significance might be attached to it since it treats forwarders differently.

Getting back to the reason for our opposition to S. 1194, I would like to read further from House Report No. 208 in which H. R. 2759 was reported.

That report quotes a letter from the Interstate Commerce Commission giving its reasons for supporting the application of reparations provisions for freight forwarders. And this is what the Commission said:

The limited experience under part 4 so far has not shown any important need for a provision authorizing awards of reparation against freight forwarders.

Nevertheless, it seems desirable and logical that all four parts of the act be uniform in providing such a remedy, and the amendment of part 4 here proposed therefore seems opportune.

Reference has been made here by other witnesses to the desirability of uniformity, but as the Commission says, that is about the only excuse that could be given for making reparations provisions applicable to forwarders at the moment. While uniformity may be desirable as a general objective, it is not an end in itself.

We maintain that the incorporation of reparations provisions in part 4, even though they be framed in the same language as that appearing in part 1 of the act, will not bring about uniformity.

We further maintain that even if uniformity of treatment should result, there is no justification for imposing such a burdensome requirement upon freight forwarders.

A provision for the award of damages in part 4 of the act would have a very different effect upon freight forwarders from the effect which it now has as applied to railroads.

Mr. Lawrence referred this morning to the doctrine laid down by the Supreme Court in the Arizona Grocery Co. case (284 U. S. 370). That case, as Mr. Lawrence pointed out, affords quite a large measure of protection to the railroad rate structure insofar as reparations claims are concerned.

In that case, the Supreme Court said that the Interstate Commerce Commission may not award reparation on shipments which have moved under rates prescribed or approved by the Commission. In other words, if the Commission in a proper proceeding declares a rate to be reasonable and lawful for the future, it cannot at a later date, based on the same or additional evidence, declare that rate unreasonable and award reparations.

The Commission has had the power to prescribe maximum reasonable rates for railroads since 1906, and it has exercised that power extensively.

Freight forwarders, as this committee knows, have been regulated only since 1942, and the Commission has had no occasion at all since that time to prescribe any rates for freight forwarders.

Whereas the subject of reparations insofar as the railroads are concerned is apparently of very little importance today, it was at one time very important, and we think that if forwarders are now subjected to reparations, it will become an important question in the forwarding industry.

The Commission at one time was very seriously concerned about the subject of reparations and recommended to the Congress on many occasions, over a long period of years, that the whole subject be considered de novo, and that reparations provisions either be eliminated entirely, or that they be modified so as to bring some uniformity into their application under the decisions of the courts.

Freight forwarder rates are patterned after and to a substantial degree are the same as railroad rates. The application of a reparations provision to the two groups, as I have already pointed out, would have a very different result. Because of the policy laid down by the courts, the Commission's determination as to the reasonableness of railroad rates must operate very largely as to the future, whereas in the case of freight forwarders, it would have a retroactive effect if this bill should be adopted.

In other words, having largely prescribed the railroad rates already, the Commission, upon reexamination, could only say that they will be unreasonable for the future and fix a reasonable rate.

Senator REED. Not in a reparations case, Mr. Morrow. When you bring your reparations case, you go back over shipments already made. That is what you are asking reparations for.

Mr. MORROW. That is true, sir; but if a rate of the railroad is assailed, which is a prescribed rate, as it was held in the Arizona Grocery Co. case, then reparations cannot be collected.

The Commission could only prescribe what would be a reasonable rate in the future.

Senator REED. You and Mr. Fort can correct me if I am wrong. It has been a good many years since I have had any active connection with these matters.

I have the impression that subsequent to the Arizona Grocery case, the Commission did award reparations where it had prescribed a maximum rate, and the court sustained that. Am I wrong, Mr. Fort!

Mr. Fort. I think you are, Senator. I am not sure, but I think you are.

Senator REED. I may be. I had the impression there was a departure from the doctrine described here in the Arizona Grocery case, which was decided back in 1909 or 1910.

Mr. MORROW. No, sir, that was later; 1931, I think.

Here is the Interstate Commerce Commission's 46th annual report, dated December 31, 1932; while they don't give the date of the case they review it apparently for the first time, so it must have been shortly before that.

Mr. Fort. Senator, of course there has been apparently a good amount of difference about the application of that Arizona case, and no doubt that is what you have in mind.

Senator REED. I do have in mind that that was not final and controlling and stopped all arguinents as to whether you could collect

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