Wherever Interstate Commerce Commission control over interstate trucking rates has been made effective, the tendency has been to raise the rates substantially and in many cases to make them roughly equivalent to railroad rates. Increased trucking costs during the last few years have been urged as one justification for this action. Permission to engage in interstate transportation over specific routes or in definite areas is limited under the law to those who were actually engaged in such transportation when the act went into effect or who, starting in business since that time, can show that public convenience or necessity creates a real need for their services. Hence, the effect has been to reduce competition and to raise interstate trucking rates. The extent to which increased rates have curtailed interstate trade could be determined only by detailed studies which would take into account such factors as the amount by which rates had been increased and the elasticity of demand for interstate trucking services. No such studies have been reported.

The regulation of rates does not, of course, apply to intrastate trade. In fact, the Motor Carrier Act, 1935, states that the Interstate Commerce Commission shall not regulate intrastate motor traffic "for the purpose of removing discrimination against interstate commerce or for any other This provision of purpose the law is remarkable, to say the least, in view of the fact that Congress and the courts have for years labored in connection with State railway regulation to guard against regulations or rates that would discriminate unfairly against interstate commerce.

Of course, no problem of discrimination arises where State commissions set up substantially the same regulations and rates as are imposed on interstate trucking. Some States have done this. Others have set intrastate rates lower than those established under the Interstate Commerce Commission, or have attempted no rate regulation at all.

The result of higher rates for interstate than for intrastate trade may obviously be to restrain movement from State to State and to stimulate greater intrastate shipment. The producer lo

cated near a State line may find the cost of his out-of-State shipments increased to such an extent that he will be forced to sell in the markets of his own State, even though their distance is considerably greater than out-of-State markets.

On the other hand, note must be taken of the fact that before the passage of the Transportation Act of 1935, interstate motor traffic often enjoyed an "unfair" advantage over intrastate traffic. This resulted in those cases where States regulated intrastate truck rates. The inability of the States to enforce their regulations and rates on interstate trade meant that producers shipping across State lines might have an appreciable advantage over those making purely intrastate shipments.53

The fear that higher rates for interstate than for intrastate shipments would place farmers near State lines at a disadvantage led agricultural interests to secure important exemptions in the Motor Carrier Act of 1935.54 Under the provisions of this act as finally adopted, powers of the Interstate Commerce Commission over rates do not extend to private carriers (those transporting solely for themselves) nor to certain specifically exempted carriers, the most important of which are those engaged in the transportation of unmanufactured agricultural products. But in actual practice this exemption of unmanufactured agricultural products has not proved so broad as was apparently anticipated by farm interests. The act might have been expected to encourage shippers, especially farm cooperatives, to own their own trucks, and thus avoid the necessity of hiring common or contract carriers the rates for which have typically been advanced under the operation of the Federal law. But the law is so worded that this recourse has not always been possible. The livestock cooperatives have found that the profitable operation of their trucks often requires a return haul of processed or manufactured goods. Likewise, certain fruit and vegetable cooperatives find own

83 See Report of the Federal Coordinator of Transportation on the Regulation of Transportation Agencies Other than Railroads and on Proposed Changes in Railroad Regulation, Senate Document No. 152, 73d Cong., 2d sess., p. 195.

4 Hearing before the House of Representatives Committee on Interstate and Foreign Commerce on H. R. 6836, 73d Cong., 2d sess., 1934. See especially pp. 120-121, 134-135.

ing their own trucks profitable only if, at off seasons of the year, they can utilize their trucks for other than their own needs. In either eventuality an Interstate Commerce Commission license is very likely to be required. Moreover such a license cannot be secured unless it can be shown that motor-vehicle facilities already in existence cannot take care of this business.

In fact, the law so reads and has been so interpreted that, if strictly enforced, large numbers of farmers' trucks could not be exempted. A farmer who owns a truck often expects to do some trucking for his neighbors. But if he collects products from others and transports them to a city across the State line, he must make sure that such products are unmanufactured. As the law has been interpreted unless he first secures an Interstate Commerce Commission license, he cannot transport such products as pasteurized milk or cleaned rice, nor can he bring back from the city a box of corn flakes, a pound of butter, or a sack of fertilizer for a neighbor.

CONCLUSIONS REGARDING REGULATION OF MOTOR

VEHICLES

Relief from the obstacles to interstate commerce that have been set up in the field of motor transportation is clearly needed. But where does the remedy lie? How are present restrictions to be reduced and the increase of such barriers to be avoided in the future? Although no simple or easy answer emerges from our study, we can profitably consider the possibilities in the current situation.

What has been or can be done to decrease the barriers to interstate commerce that arise from State efforts to tax out-of-State motor vehicles? Very little trouble as to license plates now exists in the States on the Atlantic coast from Massachusetts to Virginia, as most of these States have clauses in their laws granting liberal reciprocal privileges to "foreign" motor vehicles. Considerable progress has been made recently in certain parts of the country in the direction of bilateral State reciprocity agreements involving recognition of out-of-State license plates. For instance, Michigan has recently worked out re

ciprocal arrangements with Illinois, Indiana, and Ohio. A similar situation exists in the far West where at least six adjoining States have entered into fairly liberal bilateral reciprocity agreements. If this movement could grow steadily so as to include the whole country an appreciable gain to the free interstate movement of goods would result.

Past experience has indicated, however, that reciprocity agreements have appreciable weaknesses, not the least of which is that they are likely to break down at any time. Sometimes when this happens a severe border war may result, to be followed possibly by a new reciprocity agreement or, as has not infrequently happened in the past, by the rigorous enforcement of retaliatory legislation. Furthermore, even the most liberal of the reciprocity agreements do not go very far. They do not ordinarily give the foreign carrier the right to do any intrastate trucking in the foreign State, nor do they often cover special taxes such as the tonmile or wheel tax. Finally, certain States, like Wyoming and Oklahoma, steadfastly refuse to enter reciprocal agreements.

Although some further development may come along the line of reciprocity agreements, appreciable difficulties stand in the way. Especially persistent is the feeling that the outside trucker should contribute to the State revenue. But other motives, including protection of State interests and retaliation against laws of other States, are also important.

The difficulty of making appreciable progress through voluntary State adoption of broad reciprocity agreements suggests the alternative of Federal action. A Federal law might be passed providing that no further registrations could be required of any motor vehicle moving in interstate commerce which was properly registered in its home State and had, in addition, an Interstate Commerce Commission registration. Such a law might also provide that no State ton-mile, wheel, or other taxes could be levied on interstate motor vehicles which were not also levied on intrastate vehicles. If such a plan were found to involve serious legal difficulties adoption of substantially the same program might be ob

tained in some other way. For example, Federal grants-in-aid might be made only to those States that were willing to cooperate in such a plan. Under such pressure all States might be willing to adopt the scheme.

Such a program would bring obvious advantages to interstate truck movement. But what disadvantages might be anticipated? Some States would undoubtedly object to losing the revenue which comes from taxing the out-ofState truck. This objection might be met by prorating to the States on the basis of the amount of interstate trucking done in each State the income received by the Federal Government from Interstate Commerce Commission licenses. Since only a nominal amount is now charged for Interstate Commerce Commission registration this fee would have to be greatly increased if appreciable revenue were to result. The practical difficulties in the administration of such a plan would have to be carefully studied and evaluated.

Moreover, unless such a program were worked out very carefully it might result, just as has the Motor Carrier Act, 1935, in creating new difficulties for interstate commerce at the same time that it eliminated others. Thus, if the number of trucks given Interstate Commerce Commission licenses were severely limited, or if the cost of the license were high, interstate trade might be discouraged. Certainly if a high license fee were assessed at a flat rate on all trucks, farmers and small business men who make only occasional interstate trips might be largely excluded from such trade. Although these considerations are not necessarily an argument against Federal control, they do indicate the necessity of framing such legislation with the greatest care. No easy solution appears, therefore, to the problems of motor-vehicle registration and taxation as hindrances to interstate commerce. However, unless much greater progress can be made in the direction of State reciprocity agreements, Federal control on one basis or another seems unavoidable.

The problem of the barriers to interstate trade created by State laws having to do with truck size and weight also presents obstacles to easy

solution. State action in the direction of uniformity has been lamentably slow despite the fact that the whole question of uniform standards for size and weight of trucks has been given a great deal of attention by both private and public agencies. A uniform vehicle code was drawn up in 1925-26 by the National Conference on Street and Highway Safety cooperating with the National Conference of Commissioners cn Uniform State Laws. This code has been revised from time to time and, following a conference in which many agencies participated, was published in its most recent form on July 31, 1934, by the Bureau of Public Roads of the Department of Agriculture.

55

It may be that the efforts of these groups have accomplished something in the way of preventing even greater nonuniformity of State laws than now exists. But their influence in securing uniformity has hardly been striking. This can best be appreciated perhaps by comparing the situation as shown in figures 1 and 2 with the standards set up and urged for general adoption by the conference. The conference recommended a maximum length of 45 feet for tractor combinations (35 feet for single units or tractorsemitrailers). Weight limitations per wheel were set at 8,000 pounds for high-pressure and 9,000 pounds for low-pressure pneumatic tires.

Moreover, practically no progress toward standard size and weight limitations has been made by means of State reciprocity agreements. The few States, like New York, that offer general reciprocal treatment on truck weight and size are the ones whose laws are already so liberal as 55 U. S. Department of Commerce; Bureau of Public Roads, U. 8. Department of Agriculture; American Association of Motor Vehicle Administrators; American Automobile Association; American Mutual Alliance; American Railway Association; American Transit Association; Chamber of Commerce of the United States; National Automobile Chamber of Commerce; National Bureau of Casualty and Surety Underwriters; and National Safety Council.

56 From the standpoint of conservation of the roads the wheel or axle weights are considered by many engineers as much more significant than gross weight of vehicle and load. The maximum gross weight according to the wheel limits given above would be 36,000 pounds for a truck having four wheels and equipped with low-pressure tires. In actual practice this would seldom be realized because of the fact that the weight is usually considerably greater on the rear than on the front axles. For the protection of bridges, the American Association of State Highway Officials recommends the following formula: W-700 (L+40) where Wequals the gross weight in pounds and L equals the length in feet between the centers of the first and last axles of a vehicle or combination of vehicles.

to place no appreciable restrictions on interstate truck movement. Although but little help in removing these barriers may be expected to result from State reciprocity agreements, the recent action of the State of South Carolina in repealing its drastic size and weight law indicates that the movement toward lower limitations may be checked. When producers within a State are brought to realize the losses they may suffer from laws of their own State that restrict truck size and weight, they may be expected to put up formidable opposition to such legislation.57

In view of the great difficulty of securing uniform State action there is certainly much to be said for a Federal law that would set maximums on size and weight of trucks moving in interstate commerce. Already this has been accomplished insofar as truck-equipment requirements are concerned. In fact, many believed it was the intent of the Motor Carrier Act of 1935 to empower the Interstate Commerce Commission to regulate truck size and weights, as well as equipment. But court decisions have not yet clearly established the power of the Commission in this respect.

Objections have been urged against Federal legislation to provide for uniform limits on the size and weight of motor vehicles. One contention is that conditions as. to the nature and construction of the roads are so dissimilar in different parts of the country that maximum loads that would be reasonable for one State would be destructive to highways and a menace to safety in another. The question raised is important, but it would hardly be valid against legislation that left ample power to the Interstate Commerce Commission to determine which highways could be suitably used for heavy interstate trucking.

The nature of the highways and their suitability to heavy truck use varies as much within States as between States. Unquestionably there are within every State in the Union many roads that the Interstate Commerce Commission could

57 It may be noted, however, that despite much opposition by trucking interests and certain producer groups, the Texas net-weight law has survived several serious attempts to secure its repeal.

not approve for heavy interstate truck movement. On the other hand, every State has some wellconstructed roads and bridges, built in considerable part at Federal expense and in line with Federal specifications, which are adapted to heavy traffic. Future Federal grants-in-aid for road building might be made (as certainly has been the case in the past, at least in part) with the special purpose of linking up ail sections of the country with wide, strong, and safe highways.

The further objection may be raised that heavy trucks, moving interstate, congest the highways and greatly detract from the pleasure that people derive from automobiles. The question posed here is a broad one of general public policy. Do we, as a people, wish freer and cheaper movement of goods in interstate commerce by motor vehicle or do we prefer roads cleared of trucks, the better to enjoy our automobile rides? Or do we wish both objectives and want them badly enough to build more roads?

These are questions of social objective which the people will have to decide. But should this decision be made by the country as a whole through Federal legislation or should it be left to the individual States? If it is left to the States and a very small number of the States lying across the main routes of commerce decide drastically to limit interstate trucking by putting very low size and weight limitations on trucks, then it is obvious that these States will exercise a privilege that may greatly affect people who live beyond their borders and who can have no part in making the decision.

What of the disadvantages that result to interstate commerce from the port-of-entry system? Undoubtedly the greatest present protection against the spread of this device is the fear of retaliation. However, if the other problems are solved, the port of entry will undoubtedly disappear. But as long as States have drastic differences in size, weight, and insurance requirements, and while they still look upon the "foreign" truck as an important source of revenue or possibly as an agent of outside and therefore unfair or disadvantageous competition-as long

as these conditions hold we shall probably have to be resigned to the continuance of the port-of-entry system in a considerable number of ourStates. Finally, what of these disadvantages to interstate commerce which seem to result from the Motor Carrier Act, 1935? The answer is exceedingly difficult. Much further experience and study are needed for a satisfactory answer. So many other questions are involved―questions of how far we should go in attempting to stabilize the trucking industry, what carrier should come under the act, whether large or small trucking units should be encouraged, to what

extent the object should be to protect the railroads and to keep them in business, and whether railroad ownership of trucks should be promoted or prohibited. Perhaps all that we can ask is that, in the heat of controversy over these issues, the fact shall be clearly recognized that Federal measures affecting motor vehicles will almost inevitably either encourage or discourage interstate commerce. If the latter, should we not try to make sure that the expected benefit in some new direction is at least equal to the loss that results from the restraint set up on interstate trade?