Mr. MELIUS. Yes. In other words, I agree with Mr. Dillingham. Senator BARTLETT. That the Interstate Commerce Commission could not divest itself of that responsibility? Mr. MELIUS. Not in my opinion. Senator BARTLETT. I think I speak for all of us here in expressing concern that no local truckers have been or as far as we know are going to appear here to testify. The legislation that may result may have a profound effect on their economic future and the committee would have cared to have heard from representatives of the truckers, and still desires to do so if they will make themselves available. This is just as important to them as to anyone else who has testified or who proposes to testify, I am sure, and I hope that some representatives of the trucking concerns may yet appear. I want to thank you for testifying so helpfully here as you did in Anchorage, Mr. Melius. Mr. MELIUS. I would just like to add one statement, Senator, in regard to the statement made by you then. Selfishly, we are very much concerned because if we are using motor carriers now from Honolulu through to the other side of the island, and if they are not certified by the Interstate Commerce Commission, but are required to be, we are using carriers which we lawfully cannot use. We are only permitted under part IV of the Interstate Commerce Act to use certificated common carriers, except within a commercial zone where they are exempt. Senator BARTLETT. As freight forwarders you would have no legal means, then, to get the goods from Honolulu to the other side of the island? Mr. MELIUS. That is correct, and we are very concerned. Senator BARTLETT. Well, I hope the word may spread and some truckers may appear before us. Thank you, sir. Mr. MELIUS. Thank you very much. Mr. BARTON. In connection with the figures Senator Long mentioned, I have been handed an annual report by the board of harbors for the fiscal year ended June 30, 1958. I suggest that you may wish to place it in the files of committee. Senator BARTLETT. It will be accepted for the file. Now, are there any witnesses who care to be heard this afternoon? In all probability these hearings will be concluded tomorrow. We have all afternoon, and we don't want to face the situation where there won't be sufficient time tomorrow. We will go into recess now and reconvene at 2:30. (Whereupon, at 12:05 p.m., a recess was taken until 2:30 p.m. of the same day.) AFTERNOON SESSION Senator BARTLETT. The committee will be in order. If you will be so good as to identify yourself, sir, for the record, and then proceed. STATEMENT OF SHIRO KASHIWA, STATE ATTORNEY GENERAL Mr. KASHIWA. Senator Bartlett, Senator Long, Mr. Barton, my name is Shiro Kashiwa, State attorney general. I would like to introduce Henry Shigerkane, my deputy, to my right. Our office is in favor of the permissive type of legislation; that is, Senate bill 2452 type of legislation, provided, however, that the bill is so amended that it will not tend to, what we think, create a monopoly in the trucking business with relation to this interstate commerce type of business. What we are worried about is an example: A is an outfit on the mainland, a railroad company; B, is the shipping company, and C the motor carrier down here in Hawaii. If three of them enter into an agreement and file it under this act they have the right to operate together under the rates indicated, but because of the very peculiar nature of the situation here, that is to say party B, there are so few of them, the shipping companies, that by party B getting together with party C, the motor carriers here, it may have a tendency to create a monopoly in this type of business, and by some amendment to that act, to this act, we would like to tee that tendency lessened. Now, it is my understanding that this thing could be worse than the A, B, and C case I put; it could be A, B, and back to A here again, because some of the companies on the mainland are here, and, as I understand it, there is a case where A, on the mainland, has a ship, and it is A, A, A, right down the line. Of course, in a situation like that I guess that is all of their property and we can't do anything about it, but where this monopolizing could be controlled, the possible tendency, we would like to see it as far as possible eliminated. Our suggestion is perhaps this quoting of the rate, quoted only to the Honolulu docks, and thereafter let it go free to any trucker can get to it. Of course, that may not meet the approval of this single bill of lading requirement. It may hamper more than help the situation, but that is a possible solution, we would like to look into that. Another method is to have mandatory rates out here among other truckers. Now, as has been brought out here, so far the trucking business here in Hawaii has not been controlled by the ICC, and neither has the territorial public utilities commission stepped into this field. My deputy, Mr. Shigerkane here, has been working on this State jurisdiction or Federal jurisdiction matter, not only in this field but in other fields, and we are just in the process of working these things out with the Federal Government. If there are any questions on that I am sure Mr. Shigerkane would be only too happy to answer. Now, aside from this statute I would like to make this request, Mr. Chairman, and Senator Long: This Board if created is peculiar to Hawaii and Alaska. The reason why this was created is because we are offshore, and since three Boards are represented on this Joint Board I think that it would be a very good thing if this Joint Board could have regional offices here in Hawaii and, of course, in Alaska. The trouble with, as the first witness testified-many times things are filed in Washington and we don't get notice of it out here until a much later time. Another difficulty is, as Mr. Shigerkane would be willing to testify, we are now involved in the Matson rate case. The difficulty for a State to participate-I think you would have the same difficulty in Alaska, in fact I would be glad to get together with the attorney gen eral of the State of Alaska-to participate in one of those rate hearings involves a lot of work and a lot of time, and we know from our participation in the public utility rate cases over here how much work it takes to present a good case, and it seems to me that if the Joint Board would establish an office, although we may not be able to get all of the information here, at least we have a place where we can go to and ask them to contact a Washington office to get the information. Now, I say this particularly because we here in the islands depend so much on transportation, and here is an ideal Board with three of the main Boards represented on it. If they could establish an office here I think the citizens of the territory would welcome such a move on the part of the Federal Government. As I said, of course, if there is any question on State jurisdiction, Federal jurisdiction, we are trying to work that out at the present time. Mr. Shigerkane here would be only too glad to answer any questions. I thank you. Senator BARTLETT. Senator Long, do you have any questions? I would like to make this comment: The Attorney General in urging the necessity of local offices in echoing a thought that is quite prevalent in our community, and the chairman I think this morning felt the same way when he was, if not critical, implied criticism of the Federal agency sitting in Washington and not being down here where study is being made. We are suffering from that throughout the year, that is agencies with which we are concerned are strangers to us. I think that is a good suggestion that we insist upon representation here at least a part of the time. Senator BARTLETT. Is that all, Senator Long? Senator LONG. That is all; yes. Thank you. Senator BARTLETT. Your recommendation of the moment, sir, is that the joint through rate provision apply only until the freight is unloaded at the dock in Honolulu? Mr. KASHIWA. Yes, the reason for that is we would like the truckers to get at that as quickly as possible, if that is a possibility. This single bill of lading idea may not permit that. If it doesn't, then further statutory amendment perhaps to make some sort of mandaory rate and everybody compete for the business. In other words, it goes into the other act, S. 2451, the mandatory type thing. It may be worked out. I don't know. Senator BARTLETT. How many maritime carriers are there between here and the mainland now that bring freight into Hawaii, in considerable volume I mean. Mr. KASHIWA. There are two in considerable volume, but there are some small ones. Senator BARTLETT. Well, if— Mr. KASHIWA. There are two very large ones, I can say that. Senator BARTLETT. Well, A company, which you described, a strong, responsible company, and B company, carrying the freight to Hawaii from Pacific Coast ports, also a strong company, made an arrangement with the motor carrier C here for a joint through rate, that would not preclude, necessarily, would it, other carriers making simi lar arrangements because there are several maritime carriers between here and the coast. Mr. KASHIWA. That is true, and it is also true that carrier B, maybe a very fair-minded person, and let the contractor enter into an agreement with many other persons, but the purpose of the law is I think if there is a possibility of abusing it we should put something there to stop an abuse. Senator BARTLETT. I would be in complete agreement with that, but, of course, all of us, you, I, every other member of the committee, and the Congress, too, will be anxious simultaneously to arrive at a situation which will permit the lowest possible freight rates to the consumer in Hawaii and the testimony indicates uniformly that this will best be achieved by a joint through rate, and I will ask you this: Theoretically, at least, you can see the advantages of that joint through rate to the consumer, to the consuming public. Mr. KASHIWA. I think so, if it is worked properly by people who will let everybody have a chance, it will work out. Now, there is this, when the practice starts maybe party C puts down a very low rate, and others may be run out of business, but the final effect after others are thrown out of business may be a raise in rates, so the eventual effect may be more detrimental than good. It is to stop a case of that nature. I think the people of the territory would be interested to have some sore of clause in there so that these things would not happen. Senator BARTLETT. The contention has been made before the committee on this very subject by carriers admittedly, that one reason they are not anxious, in fact are opposed to the mandatory provision, is that it might require them to become associated, willy-nilly, with an irresponsible weak carrier which would lead only as they expressed it, I believe, to a chaotic situation. Mr. KASHIWA. It is my position that if the local carriers will have to come under the ICC regulation, then certainly they will have to come within the safety requirements and within the financial responsibility requirements. I think the ICC requires that, and if the public utility commission here is going to take charge of it, I think we will require certain standards, and by requiring those standards I think that anybody who can get over those standards should be permitted to participate. Senator BARTLETT. From a legal standpoint, and referring back to the discussion this morning, and I believe you were in attendance constantly, what is your conclusion as to the application of Federal law in the State of Hawaii bearing upon this subject? Mr. KASHIWA. Well, regarding this S. 2452, section (b), air carriers subject to Federal Aviation Act of 1958, common carriers subject to Interstate Commerce Act, or common carriers by water, it seems that under this S. 2452 they have got to be subject to the act before they can participate in the benefits under this act. Now, as mentioned by counsel here Senator BARTLETT. Mr. Lordan? Mr. KASHIWA. Yes. There is some doubt because of the vigorous position of our motor carriers here, they are neither ICC nor PUC, whether the act fits into the picture, it may be that we should get together with the local truckers and get an ICC regulation here, and get them under control, or to amend this bill and maybe refer to some territorial control, I mean State control. We may be able to get—I am not sure about the State control side. Senator BARTLETT. Let me go a bit more into this. Recalling the letter that the then chairman of the ICC wrote to Senator Jackson in January of 1957 expressing a desire on the part of the ICC not to intervene at all in Hawaii, and, secondly, assuming that none of the legislation we are now considering is enacted into law, would you believe that the ICC would find it possible legally and perhaps constitutionally to divorce itself from applying the Interstate Commerce Act to Hawaii? Mr. KASHIWA. Without looking it up, I would say this, to make an exception of Hawaii under that whole broad law-there may be some exception-because of the small islands here and their geographical status, there may be a reasonable exception whereby it could be read out. I can't say right now, but it may be a possible exception. That is subject to debate. Senator BARTLETT. Well, in Alaska we might urge that we get out on account of the bigness of the State. Do you have any personal feeling as to the desirability of Federal regulation of transportation as opposed to State regulation? Mr. KASHIWA. Well, from the point of view of the trucking group, it is my understanding the Public Utility Commission here at one time approached it. Under the State Public Utility Commission laws they could be regulated. They were once approached, but the majority felt that they wanted it free like the good old days. Now, with the coming of this joint control bill, S. 2452, there may be a reconsideration of this whole matter in view of the recent shipment by container, they may have to give into one or the other and put in some control. As you said, it is very important for the shipper on the mainland to have truckers here with good equipment and safe equipment, and, if that is so, I think it is better to be under some sort of control, but as to which it would be I don't know at the present time. Senator BARTLETT. I believe that you spoke about the process that is now going on of working out something with the Federal Government. Mr. KASHIWA. Yes. Senator BARTLETT. I wonder if you would care to go into a bit more detail on that matter. Mr. KASHIWA. My deputy, Henry Shigerkane, is working on that. Will you take over? Senator BARTLETT. If you please. STATEMENT OF HENRY SHIGERKANE, DEPUTY ATTORNEY GENERAL FOR HAWAII, HONOLULU, HAWAII Mr. SHIGERKANE. I can't say that we are really working on something, but to pick up from that letter that Mr. Clark, Chairman of the Interstate Commerce Commission, wrote in 1957, in the year 1959 when the statehood measure was again before Congress, this matter was again unearthed in section WS-50, and at that time the Interstate Commerce Commission again reiterated its position through the Committee on Insular Affairs and Interior that they felt that they were perfectly willing to abandon or give up their jurisdiction over car |