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THE GENERAL COUNSEL OF THE TREASURY,

Washington, October 27, 1961. Hon. WARREN G. MAGNUSON, Chairman, Committee on Commerce, U.S. Senate, Washington, D.C.

DEAR MR. CHAIRMAN : Reference is made to your request for the views of this Department on S. 1725, to permit the establishment of through service and joint rates for carriers serving Alaska or Hawaii and the other States and to establish a joint board to review such rates.

The bill would authorize air carriers, common carriers, and common carriers by water to establish through service and joint rates and charges in connection with the transportation of property between the States of Alaska and Hawaii and the other States. The bill would also establish a Joint Board composed of one member each from the Civil Aeronauties Board, the Federal Maritime Board, and the Interstate Commerce Commission, which board would review the rates.

The proposed legislation is not of primary interest to this Department and the Department has no comment to make with respect to its general merits.

The Department has been advised by the Bureau of the Budget that there is no objection from the standpoint of the administration's program to the submission of this report to your committee. Sincerely yours,

ROBERT H. KNIGHT,

General Counsel.

GENERAL SERVICES ADMINISTRATION,

Washington, D.C., October 30, 1961. Hon. WARREN G. MAGNUSON, Chairman, Committee on Commerce, U.S. Senate, Washington, D.O.

DEAR MR. CHAIRMAN : Your letter of April 28, 1961, requests comments on S. 1725, a bill to permit the establishment of th gh service and join rates for carriers serving Alaska or Hawaii and the other States and to establish a joint board to review such rates.

This legislative proposal would authorize the establishment of through service and joint rates between air carriers and various rail, motor, and water carriers. This would permit shippers to make one contract with originating carriers and to consult a single tariff in ascertaining the rates for through movements. ACcordingly, shipping contracts would call for the payment of a single transportation charge. The reduced handling costs incident to through service as contemplated in S. 1725 provide the opportunity for possible reductions in shipping costs. GSA is of the opinion that the Government as a shipper would benefit from the proposal along with all prospective shippers.

Under its statute (63 Stat. 383; 40 U.S.C. 481), GSA is interested in transportation and traffic management on behalf of executive agencies from the viewpoint of a user of transportation services, and in our statutory role of representation before Federal, State, and local regulatory bodies. Accordingly, since the provisions of S. 1725 are generally beneficial to shippers of freight, GSA favors the enactment of this legislative proposal.

The Bureau of the Budget has advised that, from the standpoint of the administration's program, there is no objection to the submission of this report to your committee. Sincerely yours,

JOHN L. MOORE, Administrator.

S. 1839

COMPTROLLER GENERAL OF THE UNITED STATES,

Washington, May 31, 1961. Hon. WARREN G. MAGNUSON, Chairman, Committee on Cemmerce, U.S. Senate.

DEAR MR. CHAIRMAN: We again refer to your letter of May 12, 1961, in which you asked for our comments on S. 1839.

S. 1839, which you introduced at the request of the Interstate Commerce Commission to give effect to its legislative recommendation No. 12 (74th Annual

Report of the Interstate Commerce Commission, p. 191) would amend sections 216(c) and 305(b) of the Interstate Commerce Act, as amended (49 U.S.C. 316(c) and 49 U.S.C. 905 (b)), so as to permit the voluntary establishment of through routes and joint rates applicable to interstate traffic between Alaska, Hawaii, and the other States, by motor and water common carriers subject to parts II and III of the Interstate Commerce Act and water common carriers subject to the jurisdiction of the Federal Maritime Board.

We believe that extension of the authority to establish through routes and joint rates is in the public interest, since through rates and through service generally conduce to greater efficiency and speed and to lower transportation costs. The Government, in its capacity as a purchaser of transportation, also benefits from lowered costs and increased efficiency and, as to Alaskan commerce, it is reported that a considerable segment consists of transportation procured by or for the United States. We wish to point out, however, that there is pending before your committee S. 1725, a bill to permit the establishment of through service and joint rates via carriers serving Alaska, Hawaii, and the other States. This authority would also extend to air carriers, which are not included in S. 1839, and the Civil Aeronautics Board, as well as the Interstate Commerce Commission and the Federal Maritime Board, would appoint a représentative to the joint board to be created under S. 1725 to review such joint rates. We furnish you our comments on S. 1725 in our letter of today, B-140351, two copies attached. Sincerely yours,

JOSEPH CAMPBELL, Comptroller General of the United States.

S. 1978

COMPTROLLER GENERAL OF THE UNITED STATES,

Washington, June 9, 1961. Hon. WARREN G. MAGNUSON, Chairman, Committee on Commerce, U.S. Senate.

DEAR MR. CHAIRMAN: We refer again to your letter of May 29, 1961, requesting our comments on S. 1978.

S. 1978 proposes to amend section 202(c) of the Interstate Commerce Act, 49 U.S.C. 302(e), in order to extend the exemptions from regulation therein provided to cover terminal area motor carrier operations performed by or for interstate common carriers by water subject to the Shipping Act of 1916 and the intercoastal Shipping Act of 1933. The proposed change deals with regulatory functions under the Interstate Commerce Aet and would not affect the functions or operations of our Office. However, since it would promote uniformity in the treatment of interstate common carriers, we believe it to be in the public interest and we have no objection to favorable consideration of S. 1978 by your committee. Sincerely yours,

JOSEPH CAMPBELL, Comptroller General of the United States.

DEPARTMENT OF COMMERCE,

Washington, D.C., July 24, 1961. Hon. WARREN G. MAGNUSON, Chairman, Committee on Commerce, U.S. Senate, Washington, D.C.

DEAR MR. CHAIRMAN: This is in reply to your request of May 29, 1961 for the views of this office in regard to S. 1978, a bill to amend section 202 (c) of the Interstate Commerce Act to provide for partial exemption from the provisions of part II of such act of terminal area motor carrier operations performed by or for common carriers by water in interstate commerce subject to the Shipping Act, 1916, and the Intercoastal Shipping Act, 1933.

S. 1978 transfers regulation of motor carriers servicing water carriers subject to the Shipping Act of 1916 and the Intercoastal Shipping Act of 1933 from part II of the Interstate Commerce Act to the Federal Maritime Board. The bill would add to section 202(c) an exemption from part II for motor transpor

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tation within terminal areas in the performance of transfer, collection, or delivery services if performed by or for a common carrier by water in interstate commerce subject to the Shipping Act, 1916, and the Intercoastal Shipping Act, 1933.

Section 202(C) was added to the Interstate Commerce Act by the Transportation Act of 1940 (54 Stat. 898, at 920). This action exempts from certification and rate regulation under part II of that act motor transportation within terminal areas in the performance of transfer, collection, or delivery services, if performed by or for railroads subject to part I, water carriers subject to part III, or freight forwarders subject to part IV. Such terminal area motor transportation which is exempted from part II is regulated as part of the particular line-haul transportation to which it is incidental.

As the law presently stands, section 202 (c) does not exempt from part II terminal area motor transportation incidental to water transportation between the mainland and Alaska, Hawaii, Puerto Rico, or Guam. Although Alaska and Hawaii are now States of the United States, section 18(a) of the Hawaiian Statehood Act (73 Stat. 4), and section 27 (b) of the Alaskan Statehood Act (72 Stat. 339) both provide that the Federal Maritime Board retain its jurisdiction over water transportation between those States and the mainland.

The Commission has held that motor carriers performing service in the port of Seattle in connection with transportation by water to Alaska were not entitled to the exemption because the line-haul carrier was not subject to the act (Consolidated Freightways, Inc., Extension, Seattle, Wash.; 74 M.C.C. 593, 1958). In its decision the Commission stated that Congress had probably intended to exempt from economic regulation all purely local operations, but stated that the remedy appears to lie in additional legislation rather than a forced construction of the present law. The proposed bill is designed to provide such legislation which would apply the exemption uniformly to all modes of transport.

The proposed amendment to section 202 (C) would extend this provision to common carriers by water in interstate commerce who are subject to the Shipping Act of 1916 and the Intercoastal Shipping Act of 1933. These steamship lines operating between the 48 mainland States and Alaska, Hawaii, Puerto Rico, and Guam would be placed in a position to perform their own pickup and delivery services within the port areas that they serve. Thus, an entire rate, including the pickup and delivery service, would be regulated by the Federal Maritime Board. This is a logical sequence in the development of container transportation of water carriers in the offshore domestic trade. Passage of S. 1978, would clearly permit through rates from point of origin within a port area to point of ultimate destination within a port area served by the water carrier, and should facilitate the expansion of these container operations in the offshore domestic trades.

As we interpret the bill, the exemption of "transportation by motor vehicle * * * by a common carrier by water in interstate commerce subject to the Shipping Act, 1916, and the Intercoastal Shipping Act, 1933," subject to the further restrictions of the bill, includes such transportation by common carriers by water who operate between a State of the United States, and a possession of the United States, because of the definition of “common carrier by water in interstate commerce” in the Shipping Act, 1916, includes such carriers, and transportation between a State and possession remains subject to that act and the Intercoastal Shipping Act, 1933. The matter, however, may not be entirely free from doubt, because the bill would amend part II of the Interstate Commerce Act, and the Interstate Commerce Act contains a definition of "interstate commerce" which confines that term to commerce between States or between two places in the same State through another State. To clarify the bill in this repect, the Department recommends that the bill be amended as follows:

(1) By inserting after the word "commerce" on line 7, page 2, the words "as defined in the Shipping Act, 1916, and";

(2) By inserting after the word “carrier" on line 2, page 3, the words "by water”;

(3) By inserting after the word "commerce" on line 2, page 3, the words "as defined in the Shipping Act, 1916, and”.

With the revisions as suggested above the Department does not oppose the enactment of this bill.

The Bureau of the Budget advises there is no objections to the submission
of this report from the standpoint of the administration's program.
Sincerely yours,

EDWARD GUDEMAN,
Acting Secretary of Commerce.

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U.S. DEPARTMENT OF JUSTICE,
OFFICE OF THE DEPUTY ATTORNEY GENERAL,

Washington, D.C., July 11, 1961.
Hon. WARREN G. MAGNUSON,
Chairman, Committee on Commerce,
U.S. Senate, Washington, D.C.

DEAR SENATOR: This is in response to your request for the views of the Department of Justice concerning the bill (S. 1978), to amend section 202(c) of the Interstate Commerce Act to provide for partial exemption from the provisions of part II of such act of terminal area motor carrier operations performed by or for common carriers by water in interstate commerce subject to the Shipping Act, 1916, and the Intercoastal Shipping Act, 1933.

This is a bill to amend section 202(c) of the Interstate Commerce Act (49 U.S.C. 302). In substance, this section exempts from the economic regulations of part II of the Interstate Commerce Act (the part which empowers the Interstate Commerce Commission to regulate motor carriers) transfer, collection and delivery transportation within terminal areas by motor vehicles by or for certain water carriers, railroads, and freight forwarders subject to the Interstate Commerce Act.

The bill would extend this terminal exemption to all common carriers by water in interstate commerce subject to the Shipping Act, 1916; and the Intercoastal Shipping Act, 1933. It provides that terminal transportation by motor vehicle by or for such carriers shall be subject not to part II of the Interstate Commerce Act, but to the Shipping Act, 1916, and the Intercoastal Shipping Act, 1933. The bill further provides that the Interstate Commerce Commission shall have exclusive jurisdiction to determine and prescribe the limits of terminal The Department of Justice has no objection to the enactment of S. 1978.

The Bureau of the Budget has advised that there is no objection to the submission of this report from the standpoint of the administration's program. Sincerely yours,

BYRON R. WHITE, Deputy Attorney General.

areas.

GENERAL SERVICES ADMINISTRATION,

Washington, D.C., July 11, 1961. Hon. WARREN G. MAGNUSON, Chairman, Committee on Interstate and Foreign Commerce, U.S. Senate, Washington, D.O.

DEAR MR. CHAIRMAN: Your letter of May 29, 1961 requests comments on S. 1978, a bill to amend section 202 (c) of the Interstate Commerce Act to provide for partial exemption from the provisions of part II of such act of terminal area motor carrier operations performed by or for common carriers by water in interstate commerce subject to the Shipping Act, 1916, and the Intercoastal Shipping Act, 1933.

Part II of the Interstate Commerce Act covers the regulation of the transportation of passengers or property by motor carriers engaged in interstate or foreign commerce. However, motor transportation within terminal areas of transfer, collection or delivery is, by virtue of the provisions of section 202 (c) of part II of the Interstate Commerce Act, exempt from the certification and rate regulation provisions of part II, if performed by or for railroads, water carriers, or freight forwarders subject to parts I, III, and IV of the act. Such terminal area motor transportation is regulated under the statutory provisions applicable to the line-haul transportation of which it is an incidental part.

The exemption provided by section 202(c) of the act does not apply, however, to motor transportation in terminal areas incidental to line-haul water transportation carriers who are regulated by the Federal Maritime Board under the provisions of the Shipping Act, 1916, and the Intercoastal Shipping Act, 1933. The purpose of the proposed amendment is to include in the exemption provided by section 202(c) motor transportation within terminal areas of transfer, collection or delivery incidental to interstate transportation by common carrier by water subject to the Shipping Act, 1916, and the Intercoastal Shipping Act, 1933.

Under its statute (63 Stat. 383; 40 U.S.C. 481), GSA is interested in transportation and traffic management on behalf of executive agencies from the view

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point of a user of transportation services, and in our statutory role of representation before Federal, State, and local regulatory bodies.

This legislative proposal does not directly affect the mission of the General Services Administration. However, its enactment would appear to be consistent with the exemptions provided for other modes of transportation under the Interstate Commerce Act. Accordingly, GSA has no objection to S. 1978.

The Bureau of the Budget has advised that, from the standpoint of the Administration's program, there is no objection to the submission of this report to your committee. Sincerely yours,

JOHN L. MOORE, Administrator.

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INTERSTATE COMMERCE COMMISSION,

Washington, D.C., June 26, 1961.
Hon. WARREN G. MAGNUSON,
Chairman, Committee on Commerce,
U.S. Senate, Washington, D.C.

DEAR CHAIRAN MAGNUSON: Your letter of May 29, 1961, addressed to the Chairman of the Commission and requesting comments on a bill, S. 1978, introduced by Senator Bartlett, to amend section 202(c) of the Interstate Commerce Act to provide for partial exemption from the provisions of part II of such act of terminal area motor carrier operations performed by or for common carriers by water in interstate commerce subject to the Shipping Act, 1916, and the Intercoastal Shipping Act, 1933, has been referred to our Committee on Legislation. After consideration by that committee, I am authorized to submit the following comments in its behalf:

Section 202 (c) of the Interstate Commerce Act, which s. 1978 would amend, now provides a partial exemption from the provisions of part II of the act of terminal area motor carrier operations performed by or for carriers subject to parts I, II, III, and IV thereof. S. 1978 would extend this partial exemption to such motor carrier operations performed by or for common carriers by water in interstate commerce subject to the Shipping Act, 1916, and the Intercoastal Shipping Act, 1933. The bill also provides that, for the purposes of section 202 (c), the Interstate Commerce Commission shall have exclusive jurisdiction to determine and prescribe the limits of the terminal areas for the various carriers.

We have no objection to the extension of the exemption as proposed in the bill. With respect to terminal areas, the Commission now has, under existing law, the power to determine the limits of terminal areas of carriers subject to parts I, II, III, and IV of the Interstate Commerce Act. See, for example, Central Truck Lines, Inc., et al. v. Pan-Atlantic Steamship Corporation, 82 M.C.C. 395, in which the partial exemption was discussed insofar as it related to a water carrier subject to the Commission's jurisdiction and, in effect, fixed the terminal areas of the defendant carrier at Tampa, Jacksonville, and Miami, Fla. S. 1978 would make it clear that the Commission would also have, for the purposes of section 202(c), jurisdiction to determine the terminal areas of water carriers subject to the Shipping Act and the Intercoastal Shipping Act. Water carriers subject to those acts could not, therefore, without restraint, fix extensive terminal areas of ports within which they could provide motor carrier service free from economic regulation. In the absence of such restraint other carriers could be placed at a distinct competitive disadvantage. Motor carrier terminal services involving a water carrier subject to the shipping acts is the subject of a proceeding now pending before the Commission in docket No. MC-C-3000, Western Motor Tariff Bureau, Inc. v. Matson Navigation Company.

The need for the terminal area provision in S. 1978 becomes even more readily apparent in view of the recent holding of the Federal Maritime Board in docket No. 815, Common Carriers by Water-Status of Express Companies, Truck Lines and Other Non-Vessel Carriers. In that proceeding the Board found that "any person or business association may be classified as a common carrier by water who holds himself out by the establishment and maintenance of tariffs, by advertisement and solicitation, and otherwise, to provide transportation for hire by water in interstate or foreign commerce as defined in the Shipping Act, 1916; assumes responsibility or has liability imposed by law for the safe transportation of the shipments; and arranges in his own name with underlying water carriers

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