INCIDENTAL BUS CHARTER RIG HTS ’5 1-

7 4

.T o8/4 s , o r a s

e

GOVERNM ENT

H E A R I N G

BEFORE TH E

SUBCOMMITTEE ON TRANSPORTA 

AND AERONAUTICS

OF THE

COMMITTEE ON

INTERS TAT E AND FOREIGN COMMERCE 

HOUSE OF REPRESENTATIV ES

EIGHTY -NINTH CONG RESS

SE CO ND SE SS IO N

ON

H.R. 12916, S. 2893

BIL LS TO AM EN D SE CT IO N 20 8( c) OF T H E IN TERSTATE 

CO MM ER CE AC T TO PR O V ID E THA T C ER TIF IC A TES IS SU ED 

IN T H E FU TU R E TO MO TO R COMMON CARRIE RS OF PA SSE NGER S SH ALL NO T CO NFE R, AS AN IN C ID EN T TO TH E 

GR AN T OF REG ULA R ROUTE AUTH ORIT Y, T H E R IG H T TO 

EN GA GE IN SPECIA L OR CHA RTER OPE RATI ONS

,s

OCT OBE R 12. UMiO

P ri n te d fo r th e us e of th e Com m ittee on In te rs ta te and For ei gn Comm erc e

Serial No. 89-53

U.S . GOVER NM ENT PR INTING OF FIC E

70-084 WA SHING TON : 196 6
n '

hV

oX •

CO MM ITTE E ON IN TE RS TA TE AND FO RE IGN CO MM ER CE

H A R LE Y O. S TA GGERS, West Virginia, Ch air ma n

W ALTER RO GE RS , Texas

SA M U EL N. FR IE DEL, Maryla nd 

TO RBER T 11. M AC DONAL D, Massachusetts 

JOH N JA RM AN , Oklahoma

LE O W. O’ BR IE N, New York

JOH N E. MOSS, California

JOH N D. DI NOELL , Michigan

PA U L G. RO GE RS , Florida

H ORA CE R. K O R N EG A Y, North Carolina 

LI ON EL VAN DEERLIN , California 

J. J. PI CK LE , Texas

FR ED B. RO ON EY , Pennsylvania 

JOH N M. M URP HY, New York 

DAVI D E. SA TTE R FIE LD III, Virginia 

D A N IE L J. RO NA N, Illinois 

J. OL IVA HU OT , New Hampshire 

JA MES A . M A CK A Y, Georgia 

JOHN J. GIL LI GAN , Ohio 

CH ARLE S P. FAR N SLEY, Kentuck y 

JOH N BELL W IL LI AM S, Mississippi 

BRO CK AD AM S, Washington

W. E. 

K enneth J,

W IL LI AM L. SPR IN G ER , Illinois 

J. A RTH U R YO U N G ER , California 

SA M UEL L. D EVIN E, Ohio 

AN CH ER N ELS EN , Minnesota 

HAS TI NGS K EIT H , Massachusetts 

W IL LA RD S. CU R TIN , Pennsylvania 

GL ENN CU N NIN GH AM , Nebraska 

JA MES T. BR O YII IL L, North Carolina 

JA MES H A R V EY, Michigan 

A L B E R T W. W AT SO N, South Carolina 

TI M LE E C A R T E R , Ken tuck y

Williamson, Cler k

Paint er, As sist an t Clerk

Pr ofe ssi onal St af f

A nl rew Stevenso n

K urt Borchardt

Jame s M. M eng eii, Jr. 

Wilijam J. Dixon

S u b c o m m it tee on T ransp or ta tio n an d Aero n au tic s

SAM U EL N. FR IE D EL, Mary land, Chai rman

JOHN D. DIN GELL , Michigan 

J. J. PIC K LE, Texas 

D A N IE L J. RO NA N, Illinois 

J. OL IVA HU OT , New Hampshire 

JOH N B ELL W IL LI AM S, Mississippi

SA M U EL L. D EVIN E, Ohio 

GL ENN CU NNIN GH AM , Nebraska 

A L B E R T W. W AT SO N, South Carolina

n
C O N T E N T S

Page

Text of H.R . 12916______________________ _______________________ 1

Statem ent of—

Bush, Hon. Joh n W., Chairman, Interstate Commerce Comm ission._ 1

Corber, R. J., counsel, National Association of M otor Bus Owners----- 3

Hutchinson, Evere tt, president, National Association of Motor Bus

Owners___________________________________________________ 3

Silverman, Sheldon, Deputy Director, Bureau of Proceedings, In terstate Commerce Commission_________________________________ 1

Smith, Frank A., vice president, Tra nsp ortation Association of

America__________________________________________________ 7

Additional material submitted for t he record b y—

Chamber of Commerce of the United States, sta tem ent of-------------- 11

Hesselgrave, William, telegram from ____________________________ 11

I-V Coaches, Inc., letter from E. C. O’Neil, sec retary -tre asu rer------- 12

Mu rrett, Thomas W., telegram from ____________________________ 12

National Association of M otor Bus Owners: Cases involving abuses of

automatic charter rights_____________________________________ 6

Tra nsporta tion Association of America, sta tem ent of Harold F.

Hamm ond, preside nt_______________________________________ 8

Zinder, Samuel B., letter from ____________________________________ 12

i n

INCIDENTAL BUS CHARTER RIGHTS

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WED NESDAY, OCTOBER 12, 1966

House of Representatives, Subcommittee

on Transportation and Aeronautics of the

Committee on Interstate and Foreign Commerce,

W ashington, D.C.

The subcommittee met, pursuant to notice, at 9 a.m., room 2123, 

Rayburn House Office Building, Hon. Samuel N. Friedel (chairman 

of the subcommittee) presiding.

Mr. Friedel. The subcommittee meeting will now come to order.

This is a hearing on H.R. 12916 introduced by our chairman, Mr. 

Staggers, and S. 2893, which is identical, to amend section 208(c) of 

the Inte rsta te Commerce Act regarding the right to special or charter 

operations by bus.

(The bill, H.R. 12916, follows:)

[H.R. 12916, 89th Cong., 2d sess.]

A BILL To amend section 208(c) of th e Inters tat e Commerce Act to provide tha t certificates issued in the 

futu re to motor common carriers of passengers shall not confer, as an incident to th e grant of regular ro ute 

autho rity , the righ t to engage in special or charter operations

Be it enacted by the Senate and House of Representatives o f the United States of

America in Congress assembled, Tha t section 208(c) of the Inter sta te Commerce 

Act (49 U.S.C. 308(c) is amended to read as follows:

“ (c) Any common carrier by motor vehicle transporting passengers und er a 

certificate issued under this p ar t on or before Ja nuary 1, 1967, or under any reissuance of the operating rights containe d in such certificate, may transp ort in intersta te or foreign commerce to any place special or chartered parties under such 

rules and regulations as the Commission shall have prescribed.”

Mr. Friedel. Our first witness is Hon. John W. Bush, Chairman 

of the Inte rsta te Commerce Commission.

STATEMENT OF HON. JOHN W. BUSH, CHAIRMAN, INTE RSTATE

COMMERCE COMMISSION; ACCOMPANIED BY SHELDON SILVERMAN, DEPUTY DIRECTOR, BUREAU OF PROCEEDINGS, INTERSTATE COMMERCE COMMISSION

Mr. Bush. Thank you, Mr. Chairman.

I have asked Mr. Sheldon Silverman, our Assistant Director of the 

Bureau of Proceedings, to be with me if there are any questions.

I will read, if I may, a short statement.

Mr. Friedel. Yes. You may proceed, Mr. Bush.

Mr. Bush. Thank you.

I appreciate this opportunity to testify on behalf of the Commission 

on S. 2893, and H.R. 12916, introduced by Congressman Staggers, 

bills to amend section 208(c) of the Inte rstate Commerce Commission 

Act to provide tha t certificates issued in the future to motor common

1
2 INCIDENTAL BUS CHARTER RIGHTS

carriers of passengers shall not confer, as an incident to the grant of 

regular route authority, the right to engage in special or charter 

operations. The proposed legislation implements a recommendation 

adopted by the Commission and transmitted to the Congress on 

February 1, 1966.

The purpose of S. 2893 and H.R. 12916 is to require future applicants to the Interstate Commerce Commission for motor common 

carrier passenger operating authority to show a need for the transportation of special or chartered parties, instead of conferring the right 

to perform such transportation as an incident to obtaining a certificate 

to transport passengers over a regular route or routes.

At present, section 208(c) of the Interstate Commerce Act permits 

any regular route common carrier of passengers by motor vehicles to 

transport, under a certificate issued pursuant to the provisions of 

part II of the act, special or chartered parties from any point on an 

authorized route “ to any place” as a destination point. The phrase 

“ to any place” has been interpreted by the Commission to mean “ to 

any place in the United States.” Ex Parte No. MC-29, Regulations 

Governing Special or Chartered Party Service, 29 M.C.C. 25, 48. 

Consequently, any regular route common carrier of passsengers has 

an unlimited number of destination points for charter service.

In 1935, when the Motor Carrier Act was passed, charter services 

were only a small part of common carrier operations. Since 1935, 

charter operations have increased greatly and have accounted for an 

increasingly larger share of passsenger motorbus revenues. For 

example, in 1935 charter operations accounted for approximately 3 

percent of the revenues of class I motor carriers. In 1965, however, 

charter operations accounted for approximately 11 percent of the 

revenue of class I motor carriers. They accounted for nearly 26 

percent of the revenues of class II and class II I motor carriers in 1963, 

the latest year for which these figures are available.

Today many motorbus carriers arc able to render regularly scheduled service essential to thousands of communities because revenues 

from charter service offset opera ing losses incurred on certain in erci y schedules. In some ins ances regular route passenger bus service 

would be discounted were it not for charter revenues.

In recent years abuses have been observed respecting incidental 

charier operations. I t appears to us ha carriers have frequently 

applied for he right to ransport passengers over a shor^ regular 

route solely for the purpose of obtaining .he incidental char.er rights 

from points on such ruu.es to all poin.s in .he Uni cd S a es. Some 

carriers conduct only token opera ions over .heir authorized routes 

in order to retain he righ to engage in tran sp or t ion of char.er 

parries throughout ihe coun.ry. Usually such opera ions are in the 

vicinity of a me ropoli an area which provides access to a large 

charter service marke which already is served adequa ely by exisring 

charier opera.ions.

While ihe Commission is unalterably in favor of improving rail 

passenger service, i is also cognizant tha any improvement in 

rail service u> result from such things as the curren high-speed 

eastern corridor plan will undoubtedly cause a large segment of ihe 

traveling public to swi cii from bus to rail service. This possible 

diversion will place fur.her s rains on the revenue and profi.s of the 

motorbus industry, and in turn require greater dependence on charter 

opera.ions to assure profitable operaring results. Thus, it becomes
INCIDENTAL BUS CHARTER RIGHTS 3

increasingly apparent tha t any further dilution of charter revenues 

could have a severe effect on future opera ions of the motorbus 

indust ry.

The proposed amendment would in no way affect the operations of 

presently authorized carriers. It would require future applicants for 

motor common carrier passenger authority to show a need for the 

service of transporting special or charter parties instead of, as today, 

automatically obtaining such rights as an incident to a grant of 

regular route authority.

In order to make the administration of section 208(c) equitable to 

both common carriers now holding certificates issued under part II 

of the act and applicants for regular route authority under part II 

of the act, whose applications may not be decided before Janu ary 1, 

1967, we propose an amendment to H.R. 12916. We suggest tha t 

following the phrase “under this part ” on line 6, page 1 of H.R. 12916 

tha t the following phrase be inserted, and it is just a five-word inclusion, “pursuant to an application filed,” and it will read after that, 

“prior to January 1, 1967.”

The purpose of this amendment is to confer on all applicants who 

file on or before Janu ary 1, 1967, and who are subsequently granted 

regular route authority the incidental right to transport special or 

charter parties. The reason for this proposed change is to base the 

grant of incidental a utho rity on the date an application is filed rather 

than the date on which the Commission issues a certificate. This 

would prevent a carrier from being denied the incidental right to 

transport special or charter parties because of an administrative delay 

in the processing of an application.

The Commission strongly recommends enactment of S. 2893 and 

H.R. 12916.

Mr. Friedel. Thank you, Mr. Bush.

Any questions?

Mr. Springer. No questions.

Mr. Friedel. Thank you very much. There are no questions.

Mr. Bush. Thank you, sir.

Mr. F riedel. Our next witness will be Mr. Everett Hutchinson, 

president of the National Association of Motor Bus Owners.

STATEMENT OF EVERETT HUTCHINSON, PRESIDENT, NATIONAL

ASSOCIATION OF MOTOR BUS OWNERS; ACCOMPANIED BY

R. J. CORBER, COUNSEL

Mr. Hutchinson. Thank you, Mr. Chairman.

With me at the witness table this morning is Mr. R. J. Corber of the 

law firm of Steptoe and Johnson, who is legal counsel for the National 

Association of Motor Bus Owners, of which I inn president.

The bus industry fully supports the legislation proposed in S. 2893 

and H.R. 12916. We believe it would close a gap in the present law 

and foster sound economic conditions in motor bus operations in keeping with the mandate of the National Transportation Policy of the 

Congress as declared in the Inte rstate Commerce Act.

I have a prepared statement in which our position is set forth in 

detail, and I would like to offer the statement for the record at this 

point, Mr. Chairman, and request that it be included in the transcript.

Air. Friedel. Your full statement will be included in the record.
4 INCIDENTAL BUS CHARTER RIGHTS

Mr. Hutchinson. Thank you, sir.

We believe the amendment suggested by Chairman Bush is highly 

desirable in that it would make it clear that the legislation would not 

apply to applications now pending before the Commission or to any 

application filed on or before January 1, 1967.

The amendment is strongly favored by the motor bus industry. 

It is fair and equitable, and we urge the approval of the amendment.

Further, I would like to emphasize, as pointed out in my statement, 

that these bills would not affect existing charter rights where the 

regular route certificate on which the so-called incidental charter 

authority is based, has to be reissued to the same holder for any reason 

or is reissued to a new owner after a valid transfer, such as the sale 

of the routes. In other words, the original holder or any subsequent 

holder of a certificate would have “grand father” incidental charter 

rights that would remain in force as part of the regular route authority 

as long as the regular route authority remained in full force.

However, the incidental rights cannot be severed from the basic 

regular route authority, that is, there could not be a transfer of the 

incidental rights separate from the basic regular route authority. 

Tha t is true at the present time, and this proposal would not make 

any change in this respect.

I will be glad to answer any questions the subcommittee may have, 

assisted by counsel who sits at the table with me.

(The prepared statement of Mr. Hutchinson follows:)

S ta tem en t of E v e r e t t H u tc h in so n , P r e s id e n t, N a tio n a l Asso cia tio n of

M oto r B us O w n er s

Mr. Chairman, and members of the subcommittee, my name is Evere tt H utchinson. I am preside nt of the National Association of Motor Bus Owners, often 

referred to as NAMBO. Our offices are located at 839 17th Street NW., Washington, D.C. Before becoming president of NAMBO on April 1 last year, I had 

the privilege of serving for 10 years as a member of the Inter sta te Commerce 

Commission and served as its C hairm an in 1961. My purpose to day is to p rese nt 

to your subcommittee the views of the intercity motor bus indu stry on H.R . 12916 

and the companion bill, S. 2893, which was passed by the Senate on Thursday, 

September 1, 1966.

The National Association of Motor Bus Owners is the trade association for the 

inte rcity motor bus industry. • It serves as spokesman for nearly 1,000 carriers 

which provide well over three-fourths of the intercity motor bus transp ortation 

in the United State s. These include Greyhound Lines, companies affiliated with 

the Natio nal Trailways Bus System, and numerous carriers not affiliated with 

either system. In addition to furnishing the only means of transpo rtation, oth er 

tha n by automobile, in thousands of communities, the industry provides extensive 

and expeditious package express and mail service closely coordinated with its 

regular passenger operations.

The intercity bus industry fully supp orts H.R . 12916 and S. 2893 which would 

amend section 208(c) of the Inter sta te Commerce Act by eliminating the existing 

provision for automatic rights to transp ort charter parties, as an incid ent to 

regular route certificates issued under the Act. The effect of the proposed 

amendment would be to make proof of need a prerequisite to future auth oriz atio n 

of charter operations. At the same time it would not affect existing operating 

rights, under which a regular route common carrier of passengers by motor 

vehicle is permitte d to transp ort special charter parties from any point on its 

authorized routes to any place in the United State s.

The existence of widespread abuse of the present provision of section 208(c) 

of the Act relating to charter operations has been widely recognized for more 

tha n a decade and was described by the Inter sta te Commerce Commission in its 

72d Annual Report (1958), as follows:

“* * * Carriers have frequently soug ht autho rity to perform passenger 

service over short regular routes solely for the purpose of obtaining the incidental 

charter rights. In addition, some carriers engage in the practice of conducting
INCIDENTAL BUS CHARTER RIGHTS 5

on ly to ken oper at io ns ov er th ei r auth ori ze d ro ute s in or de r to re ta in th e 

ri ght to pe rf or m su ch nat io nw id e char te r service . The se an d oth er ab us es hav e 

re su lte d in a su rp lu s of ch art er oper at or s, all to th e det ri m ent of so un d co nd ition s in th is se gm en t of th e m ot or ca rr ie r in dust ry .” (p. 136).

Rec og nitio n o f the se pr ob le m s w as refle cted als o in th e fa ct t h a t a b ill, es se ntially 

id en tica l t o H .R . 1291 6 a nd S. 289 3, wa s pas se d by t he S en ate in th e 85t h Con gress.

N um er ou s re ce nt spe cific cases mak e it ev id en t th a t thes e co nclus ion s of th e 

Co mm iss ion ha ve lost no ne of th ei r va lidi ty , a fa ct which is em ph as ized by th e 

ac tion of th e Com miss ion in reco m men di ng en actm ent of th is leg islatio n in th is 

ses sion of th e Co ng res s. Typ ic al ex am ples of ab us es un de r th e pr es en t law’ are 

su m m ar iz ed in ap pe nd ix 1, att ached to my st at em en t. Pr ob lems re su lti ng fro m 

su ch ab us es ar e be co ming increa sin gly ser iou s.

Re ve nu e from chart er op er at io ns is of gre at im po rtan ce to es ta bl is he d ca rriers 

pr ov id in g es se ntial service ov er th e sh or te r re gu la r ro ut es which ty pi ca lly ke ep 

th ou sa nd s of co m m un ities fro m becomi ng en tire ly de pe nden t on th e pri vat e 

au to m ob ile for pa ssen ge r tr an sp ort at io n. A st ud y co nd uc te d in Virg inia in 1965 

sh ow ed 313 id en tif iabl e co mm un iti es with an ag gr eg ate po pu lation of 276 ,437 

th a t ha ve no pu blic pa ssen ge r service ot he r th an bus. App ro xim ately a fo urt h 

of thes e co m m un iti es ha ve po pu la tion s un de r 50. Simila r st ud ie s for oth er Sta te s 

are not av aila bl e b u t wou ld und ou bt ed ly mak e an eq ua lly st ro ng show ing of the 

exte nt to which bu s service is av aila bl e in re m ot e pla ces of th e co untr y. The 

Official M ot or Bu s Guide l ists a pp ro xi m at el y 18,000 bu s te rm in al s in co m m un iti es 

of all sizes, and th er e ar e th ou sa nd s of in te rm ed ia te po in ts to wh ich service is 

pr ov id ed de sp ite insu ffi cie nt tra ffi c vo lume to su ppo rt ev en a sm all term in al .

Pr ob lems facing th es e ca rriers re su lt in larg e p art from th e fa ct th a t muc h 

sc he du led service , par ti cula rl y ov er th e sh ort er ro ut es , te nd s to be un pr of ita bl e, 

an d a ve ry sign ific an t port io n of it is ac tu al ly pr ov id ed a t a loss. Rev en ue fro m 

ch art er bu sin ess ha s i n m an y cas es mad e it po ssible to avo id d isco nt in ui ng es se nt ia l 

re gu la r ro ut e service . F or ex am ple, class I in te rc it y ca rriers of pa ss en ge rs in th e 

E ast ern D is tr ic t w ith annual re ve nu es of less th an $1,000,000, re port ed ov er-all 

oper at in g ex penses fo r th e year 1965, not in cl ud ing inco me taxe s, av er ag in g 50.5 

ce nt s pe r bu s mile, or 94 per ce nt of to ta l re ve nu es which av er ag ed 53.8 ce nt s pe r 

bu s mile. Rev en ue from pa ss en ge r fare s on re gu la r ro ute sche du les av er ag ed 

42.2 ce nt s pe r bu s mile oper at ed on su ch ro ut es , ob viou sly insu ffi cie nt to co ve r 

ex pe nses. Eve n in cl ud in g re ve nu e from tr ansp ort ati on of pa ck ag e ex pres s and 

th e ot her no n- pa ss en ge r service s, th e av erag e per mile for th is im p o rt an t se gm en t 

of pa ss en ge r tr an sp o rt ati o n w’as on ly 48.5 ce nts, or still well un der th e co st (50 .5 

ce nt s pe r mile as note d ab ov e) of pr ov id in g th e servi ce. C har te r service oper ation s mad e th e dif ferenc e be tw ee n a sm all, b u t high ly esse ntial, margin of pr of it 

and a loss.

In ad ditio n to pr ov id in g fr equent an d relia bl e service on ro ut es th ro ughout 

th e co un try, th e ca rr ie rs oper at in g sc he du led serv ice m ust an d do m ai nta in th e 

cap ab ility for oper at in g extr a bu se s to ha nd le increa se d tr avel on wee ke nd s and 

ho lid ay s. A t tim es , th es e ad dit io nal re qu irem en ts re ac h en or m ou s pro po rtio ns . 

F or in stan ce , re gu la rly sc he du le d service ope ra te d by th e G re yh ou nd and T ra ilway s sy stem s be tw ee n W as hi ng to n, D.C ., an d New York C ity du ring 1965 

pr ov id ed a bout 4,0 00 p as se ng er s ea ts da ily in each dire ctio n, b u t tr avel vo lume on 

one pe ak da y du ring th e ye ar , Ja n u ary 3, re qu ired 9,0 00 pa ss en ge r se at s in ea ch 

dire ctio n, or well ov er do ub le th e re gu la r daily service . Fl ex ib ility for ha nd ling 

larg e fluc tu at io ns i n de m an d is ac hiev ed l arge ly by us ing a su bst anti al num ber of 

bu se s in te rc ha ng ea bly in re gula r ro ute service an d ch art er op er at io ns .

I t is ob viou s fro m th e forego ing th a t th e loss of an y su bst anti al p art of chart er 

re ve nu e is ce rtai n to jeo pa rd iz e re gu la r ro ut e service on m an y ro ute s an d to m an y 

co mmun iti es . E nactm ent of th e leg isl ati on pr op os ed in II .R . 12916 an d S. 

2893 will go a lon g w ay to w ard elim in atin g des tr uct iv e co m pe tition for chart er 

bu sin ess fro m ca rriers who do n o t ev en in te nd to op er at e th e re gu la r ro ut e service 

for wh ich th ey ap pl y as a m ea ns of secu rin g ch ar te r righ ts.

C hart er service wa s on ly a sm all p a rt of comm on ca rrier pa ssen ge r op er at io ns 

a t th e tim e section 208 (c) of th e Act wa s passe d. I t wa s th en ac tu al ly inci de nt al 

to re gu la r r ou te o pe ra tio ns . Acc ordin gly, pro of of n ee d f or re gula r r oute a uth ori ty 

w’as a suffi cie nt safe gu ar d to pro te ct th e pu blic fro m th e des tr uct iv e co ns eq ue nc es 

of ov ercrow ding in th e char te r field. F or th a t reason , th e pr ov isions of section 

208 (c) gr an ting char te r ri ghts as an in ci de nt to re gu la r ro ute auth ori ty we re 

suffi cie nt to assu re th e in te gri ty of th e princip les co nt ai ne d in th e N at io nal 

T ra nsp ort ati on Po licy for or de rly de ve lopm en t of an ad equate tr ansp ort ati on 

sy stem .
6 INCIDENTAL BUS CHARTER RIGHTS

Ho we ver, th e s ituat io n ha s ch an ge d sign ifi ca ntly since th a t tim e. T he de m an d 

for ch ar te r service lias inc reased su bst an tial ly an d reve nu e fro m chart er service 

ha s be come hig hly es sential as a su ppo rt for regu lar ro ut e op er at ions . C hart er 

service ha s become such an im port ant p a rt of ou r tr an sp ort at io n sy stem th a t it is 

no long er in ci de nt al to regu lar ro ut e servi ce.

D es pi te th e im po rta nc e of ch ar te r service , th er e ha s no t been orde rly de ve lopm ent in ch ar te r op erations su ch as we ha ve had for re gu la r ro ute op er at io ns . 

The re su lt is th a t the field is trem en do us ly ov ercrow de d. A w as tefu l du pl ic atio n 

of ch art er facilities exist s wh ich ha s led to des truc tive co m pe tition for char te r 

bu sin ess co nt ra ry to the basic pu rpos es of th e In te rs ta te Co mmerce Ac t. We 

believe th e prop osed am en dm en t of se ction 208 (c) wo uld close a loop ho le in th e 

Act an a te nd to co rrec t th is situ at io n.

In view of th e pr es en t im po rtan ce of chart er s erv ice , it s ho ul d not be a ut hor iz ed 

ex ce pt up on pro of of need in th e same way th a t a ne ed m ust be show n fo r re gu la r 

ro ut e auth ori ty . Th e prop os ed am en dm en t wo uld ac co mplish th is ob jective. 

It is tim ely, co ns truc tive legisla tio n. It is in t he p ub lic in te re st . The a m en dm en t 

wo uld redu ce th e exist ing eff ects of ov ercrow ding in th e field w ithout affecti ng 

ex ist ing op er at in g rig hts an d wo uld not ham pe r pe nd ing or bo na fide fu tu re 

ap plicatio ns for char te r service ope ra ting rig hts.

II.R . 12916 an d S. 2893 are id en tic al to S. 1459 which pa ssed th e Sen ate in th e 

85 th Co ng res s ex ce pt for revisio n of th e effecti ve date and inclus ion of lang ua ge 

in th e cu rr en t prop os al in te nd ed to m ak e it clea r th a t “g ra ndfa th er” char te r 

righ ts un de r section 208(c) wo uld be re ta in ed in reiss ue d or am en de d ce rti fica tes 

au th or iz in g re gu la r ro ut e op erations , w ithout ch an ge from co rres po nd in g chart er 

righ ts prov ided un de r ce rti fic ates iss ued pr io r to th e dat e specified in th e bill. 

Th is ad de d ph rase, wh ich rea ds , “ . . . or unde r an y reissu an ce of th e op er at in g 

righ ts co nt ai ne d in su ch ce rtificate . . .” is, in ou r opini on , high ly de sira ble an d 

wo uld leav e no doubt rega rd ing th e in te n t of th e bill not to affect e xistin g ch art er 

righ ts when th e regu lar ro ut e ce rtificate up on wh ich su ch “in cid en ta l” righ ts are 

ba sed is reissu ed, am en de d, or tran sf er re d.

We resp ec tfu lly urg e ea rlv enac tm en t of th e am en dm en t em bo di ed in H .R . 

12916 an d S. 2893.

Mr. Cha irm an , I ap pr ec ia te th e opport unit y to a ppea r before th e s ubco m m itte e 

to pr es en t th e views of t he in te rc ity bu s in du st ry on the se m ea su re s and I will be 

gla d to an w se r an y qu es tio ns yo u m ay h av e conc erning th e pr op os ed legislation.

A p p e n d ix 1

A b u se s o f A uto m ati c C h a r t e r R ig h ts U n d er P r e s e n t L aw

Sum m ar iz ed below ar e re pre se nta tive cas es invo lv ing ab us es of au to m ati c 

ch ar te r ri ghts oc cu rin g un de r se ction 298 (c) of th e In te rs ta te Co mmerce Ac t.

In some in st an ce s th e re al m ot iv e of th e ap pl ic an t to obt ai n chart er ri ghts 

th ro ugh to ke n re gu la r au th o ri ty is clev erly co nc ea led; in oth er s it is in ge nu ou sly 

co nc ed ed . In th e la tt e r ca te go ry ar e th e proc ee ding s in T ii Sla ie Tours , M C - 

12655 (S ub No. 1) whe re th e ap pli cant wa s ope ra ting a st ati on wag on be tw ee n 

Pla ttev ille , Wisc on sin an d th e Sav an na Ord na nc e D ep ot Pro vi ng G ro un d at 

Sav an na , Illin ois purs uant to au th o ri ty gra nte d in MC- 11 27 11 (Sub No . 1). 

The follo wi ng co llo qu y oc cu rred be tw ee n appli cant’s witn es s and coun sel for a 

pro te st ant:

“ Q. And how m an y pa ss en ge rs wo uld yo u say yo u ha nd le a day in th a t o p ­

er at io n?

“ A. Aro un d five. I t va rie s. I t goes up an d down ve ry little .

“ Q. W hy did yo u w an t to ke ep th a t alive?

“ A. Bec ause of the charter rights involved.

“ Q. So, on th e ba sis of han dl in g five pa ssen ge rs a day yo u w an t to be in a 

po sitio n to pe rfo rm char te r ope ra tion s fro m Jo e Da viess C ounty an d oth er 

Wisc on sin po in ts to th e en ti re U ni te d Sta te s?

“ A. That is correct.” (E m ph as is ad de d, Tr. pp. 80 -81, Tri Stale Tours ,

M C -1 26 55 (Sub 1).)

Exa m pl es of cas es in wh ich au th o ri ty for sh or t re gu la r ro ute s we re so ug ht w ith 

th e effect of ga ining na tion w id e ch art er righ ts ar e Sh er id an -Ind ia na po lis Bus

Li ne , In c., M C -1 13105 (Sub No s. 1, 2, an d 3), an d Fra nk lin In lerurban Co mp an y,

M C -1 13062. In th e fo rm er in te rs ta te auth ori ty wa s re qu es te d be tw ee n She rida n 

and In di an ap ol is, a di stan ce les s th an 30 miles, to ad d to in tr a sta te au th o ri ty 

be tw ee n th e same po in ts an d in th e la tt e r th e appli ca nt re ques te d re in st ate m ent 

of a ce rtific at e re vo ke d for do rm an cy wh ich co ve red re gula r ro ute au th o ri ty in 

th e Nashv ill e, Te nn essee area . In both cas es ap plica nts adm it te d dir ec tly or 

in di re ct ly th a t th e re al ob je ct iv e wa s na tion wid e ch art er auth ori ty . In bot h
INCIDENTAL BUS CHARTER RIGHTS 7

ca ses st ro ng pro te st s were file d by co m pe tin g re gu la r ro ute ca rriers be ca us e of 

th e chart er ri ghts invo lv ed .

In some cases th e si tu ati on is reve rs ed— co m pe tin g ca rriers obje ct to th e 

re gu la r ro ute so ug ht by th e appli ca nt as a ba sis for chart er auth ori ty an d wo uld 

ha ve no ob je ct io n to chart er ri ghts lim ited to th e ac tu al ne ed th e ca rr ie r seek s to 

serve. Thu s, in Gary In terc ity Line s, Inc,., M C-8 15 9 (Sub No. 6), th e ap plica nt 

ap plied for re gula r ro ute au th o ri ty be tw ee n Gar y, In di an a, an d Ch ica go , Illinois , 

whe n it s re al ob je ct iv e w as to obta in ch art er ri ghts be tw ee n th e Bethl eh em Stee l 

Pla nt o n th e r eg ul ar ro ute de sc ribe d i n th e a ppl ic at io n an d p oin ts in I lli no is a nd W isconsin. W he n all th e par ti es we re ad vise d of th e tr ue in te re st s of ea ch , appli ca nt 

am en de d its ap pl ic at io n to el im in at e all au th o ri ty ex ce pt chart er ri ghts be tw ee n 

th e Bethl eh em Stee l p la n t an d po in ts in th e st ate s of Ill inois an d W isc on sin , an d 

th e pr ot es ting ca rr ie rs wh o ha d no ob ject io n to th es e lim ited chart er ri ghts w ith ­

dr ew th eir pr ot es ts . In th is case th e tim e an d trouble of th e pro te st s wo uld 

ha ve been sa ve d ha d th e ap pli cant lim ite d its original re ques t to th e char te r 

au th o ri ty tr uly de sir ed . Su ch a sa vi ng of Co mmiss ion tim e an d en ergies, no t to 

m en tion th e ca rriers , wou ld be a re al is tic pro ba bility if au to m ati c chart er ri ghts 

were el im in at ed for th e fu tu re .

Mr. Friedel. Does that conclude your statement?

Mr. Hutchinson. Th at concludes my statement, Mr. Chairman, yes, 

sir.

Mr. Springer. No questions. It is a very good statement.

Mr. H utchinson. Than k you.

Mr. Friedel. Thank you.

We will hear next the testimony of Mr. Harold Hammond, president 

of the Transportation Association of America, whose statement will 

be given by Mr. Frank A. Smith, vice president.

STATEMENT OF FRANK A. SMITH, VICE PRESIDENT, RESEARCH, 

TRANSPO RTATION ASSOCIATION OF AMERICA

Mr. Smith. Thank you, Mr. Chairman.

Mr. Friedel. Would you like to summarize your statement?

Mr. Smith. Yes, sir.

First, I would like to submit the state ment for the record and just 

mention a few points in the record to supplement the comments by 

Chairman Bush and Mr. Hutchinson.

First I would like to say that TAA supports this legislation, and we 

likewise will support the amendm ent recommended by the ICC.

The Transportation Association of America, of course, is an acrossthe-board organization of all types of transportation interests.

I should like to emphasize tha t this particular legislation was considered by all our various interests, and tha t on page 1 we have 

noted tha t our user panel, freight forwarder, highway, railroad, and 

domestic water carrier panels ail took positions specifically in support 

of such legislation.

Our air panel, investor, and pipeline panels took positions of nonopposition. In other words, across-the-board transportation interests definitely support this legislation or do not oppose it. To my 

knowledge, we know of no one who does oppose this legislation.

Mr. Friedel. And the proposed amendment suggested by Mr. 

Bush, Chairman of the ICC?

Mr. S mith. Well, of course, that is fairly recent. That has not had 

a chance to go to our panels, but it is definitely in line with our position, and I am sure we would all support that.

Mr. Friedel. Thank you.

Mr. Smith. The main reason why we are in favor of this legislation 

is to help maintain adequate publicly regulated intercity bus service to
8 INCIDENTAL BUS CHARTER RIGHTS

as many points throughout the United States as possible, and this is 

particularly important because, as we know, there have been quite a 

few railroad passenger train discontinuances to out-of-the-way points, 

and the buslines have been called upon in many instances to be the 

only means of public transportation, passenger transportation, service.

Just about two other points I would like to emphasize are tha t we 

feel that it is important to try to maintain a strong intercity bus 

transportation system mainly because, contrary to what some people 

think, there are still more people from the passenger standpoint tha t 

go by bus in intercity travel than in railroads and airlines put together.

Now, this is not passenger-miles b ut passenger count is what I am 

talking about.

Finally, the bus transportation or basically the people who use it 

are far more cost conscious. In fact, 92 percent of the people who 

travel by bus are doing it for personal reasons and, therefore, they are 

quite cost conscious, and they also need this type of service.

The lower income people are the ones who, of course, rely to the 

greatest extent on bus service. In fact, about 55 percent of total 

intercity trips by bus are taken by persons and members of the families 

with incomes of less than $5,000 per year.

My final point was th at the intercity bus is rapidly becoming, with 

some exceptions, the only means of public transportation, passenger 

transportation, for many people who still do not have access to a car, 

and tha t represents about 15 million family units or 45 million people.

Those are just a couple of points I thought would supplement previous remarks by the other witnesses.

I will be glad to answer any questions.

(The prepared statement of Mr. Hammond follows:)

Sta te men t of H arold F. H am mo nd, P resi dent, T ra ns po rt at ion Assoc iatio n

of America

M y na m e is H ar old F. H am m on d. I am pr es iden t of th e T ra nsp ort ati on 

Assoc iatio n of Ameri ca, which is hea dquart ere d in W as hi ng to n, D.C . I am 

su bm it ti ng th is st ate m ent on be ha lf of th e TA A Boa rd of Dire ctor s ir su pport 

of H .R . 12916, a bil l to pr ov id e th a t fu tu re m ot or bu s ce rti fica tes iss ue d by th e 

In te rs ta te Co mmerce Com miss ion sh all no t confe r, as an in ci de nt to th e gra nt 

of re gu la r-ro ut e auth ori ty , th e ri ght to en gage in ch ar te r op er at io ns .

TA A, for th e reco rd , is a nati onal tr ansp ort ati on po licy or ga ni za tion m ad e up 

of tr an sp o rt users of all kind s, inve stor s, an d ca rriers of all mo des wh o wo rk 

to get her to he lp de ve lop so und nat io nal policies th a t will as su re th e st ro nges t 

po ssible tr ansp ort sy st em under pri vat e en te rp rise principles . In de ve loping 

policy po sit ions, th e 11 5-mem be r TA A Boa rd has th e as sistan ce of eigh t pe rm am en t co mmitt ee s, or pa ne ls, on wh ich se rv e ov er 300 to p ex ec utives of tr an sp o rt 

gr ou ps an d in te re st s of all kind s. Th ese ei ght pa ne ls—us er , in ve stor , air, frei gh t 

forw ar de r, high way , pipe lin e, rail, an d w at er— co nsider policy prop os als an d, 

aft er ta kin g in di vi du al po sitio ns on th em , see k to iro n out an y dif ferences pr io r 

to mak ing final re co m m en da tion s to th e TA A Boa rd .

This pa ne l-r ev iew pr oc ed ur e wa s follow ed in de ve loping a TA A po sition in 

su pport of H .R . 1291 6. W he n th e TA A Boa rd ad opte d a po sitio n a t its M ay 10, 

1966, me eti ng to su p p o rt th is legislation, it wa s ad vi se d th a t th e TA A user, 

fr ei gh t, forw arde r, high way , ra il, an d do mestic w at er ca rr ie r pa ne ls to ok po sitio ns 

specifically in su pport o f it. T he oth er th re e pa ne ls— air , in ve stor , an d pipe lin e— 

sa id th ey were no t op po se d to su ch leg islatio n. Thu s, it ca n be seen th a t a goo d 

cros s-s ec tio n of tr ansp ort ati on in te re st s fa vo r su ch legislation an d no ne ha s indicate d to us its op po sitio n.

Wha t would H .R . 12916 do?

H .R . 12916 wou ld, by a simple am en dm en t to se ct ion 208(c) of th e In te rs ta te 

Co mmerce A ct, close a loop ho le in th e e xistin g lang ua ge th a t pe rm its pe rson s th a t 

obta in c er tif icates to eng ag e in m ot or c om mo n ca rrier bu s serv ice also to pe rform, 

as “i nc id en ta l” op er at in g ri gh ts, char te r service s be tw ee n po in ts on su ch certifi-
INCIDENTAL BUS CHARTER RIGHTS 9

ca te s and an y oth er po in ts in th e U nited Sta te s. Pa ss ag e of H .R . 1291 6 wou ld, 

th er ef or e, re qu ire th a t an y pe rson seek ing IC C auth ori za tion to pe rfor in bu s 

chart er serv ice in th e fu tu re wou ld ha ve to ju st if y a ne ed for such ser vic e.

Wh at would H .R . 12916 not do t

I t sh ou ld be stre ss ed th a t pa ss ag e of H .R . 1291 6 wou ld in no m an ne r affect 

th e op er at in g righ ts, in cl ud in g char te r righ ts, of pe rson s now ho lding in te rc it y 

bu s ce rtificates . I t als o wou ld not afFec t th e oper at in g righ ts of pe rson s wh o 

m ay pu rc ha se such ce rtificates in th e fu tu re , no r pre vent part ie s fro m seek ing 

chart er op er at in g ri ghts from th e IC C .

W hy a need fo r H .R . 12 91 6t

The IC C , which ha s re co m m en de d pa ssag e of su ch legislation on seve ral occasio ns and is th e sp on so r of H .R . 12916, ha s stre ss ed th e ne ed to close th e pre se nt 

loop ho le in th e st atu te s th a t ha s “r es ul te d in a su rp lu s of ch ar te r oper at io ns” 

and ha s be en ab use d to th e exte nt th a t it is det ri m en ta l to so un d co nd iti on s in 

th e in te rc it y bu s in dust ry .

We a gree w ith th e IC C o n th e ne ed fo r p assage of H .R . 12916, w hich s ho ul d he lp 

to m ai nta in ad eq uat e pu blic ly re gu la te d, sche du led in te rc it y bu s service to as 

m an y po in ts t hro ughout th e U nited Sta te s as po ssible and s til l per m it t he ca rriers 

pe rfor min g su ch es se nt ia l serv ice to op er at e a t a re as on ab le pr of it. Su ch a st ep 

will cle arly be in th e in te re st of th e ge ne ral pu blic.

La rgely be ca us e of sh arp co m pe tition fro m th e pri vate au to m ob ile, bot h ra il ­

ro ad s an d bu s lin es ha ve fo un d it ver y dif fic ult to m ai nta in adequate re gula rro ute , sche du led in te rc it y pa ss en ge r service . As ra il pa ss en ge r serv ice s ha ve 

be en di sc on tinu ed , es pe cially to ou t-of -the -w ay po in ts, bu s lin es ha ve be en 

ca lle d up on to co nt in ue some re as on ab le de gree of co mmon ca rr ie r service . In 

m an y in st an ce s th e bu s ha s be co me th e on ly mea ns of pu blicly sche du led pa ss en ­

ge r tr ansp ort ati on, as is th e case in about 300 co m m un itie s in th e S ta te of Vi rgini a alo ne.

It is qu ite ob viou s th a t sc he du led bu s service to mos t of f-th e- m ai n- ro ut e 

po in ts is ei th er un pr of ita bl e or mar gi na l, wh ich m ea ns th a t it s co nt in ua nc e de ­

pe nd s on th e ca rr ie rs ’ ability to offse t an y su ch los ses fro m re ve nu es de rive d 

from oth er ser vic es. Thi s is a char ac te ri st ic of co mmon ca rr ie r serv ice an d on e 

of th e m aj or ju st ific at io ns for pub lic re gu la tion s.

Rev en ue s fro m ch ar te r ope ra tions const itute on e m ea ns of he lpin g an in te rc it y 

bu s co m pa ny m ai nta in re as on ab le serv ice to a max im um nu m ber of po in ts alo ng 

his au th or iz ed ro ut es . T he ap pro xi m at el y 1,300 cla ss II an d III in te rc ity bu s 

lin es c urr en tly o bt ai n o ve r 25 per ce nt of th eir t ota l re ve nu es f ro m ch art er ser vic es. 

E ve n th e 160 larg er cla ss I ca rr ie rs re ly he av ily on chart er reve nu es , wh ich ac ­

co un t for ov er 10 pe rc en t of th eir ov er -a ll reve nu es . Sin ce ch art er op er at io ns 

ar e more pr of ita bl e th an sc he du led op er at io ns , th e fo rm er he lp to offse t an y 

los ses fro m th e la tt er.

Sin ce pa ssag e of H.R . 12916 wo uld no t affect th e pre se nt op er at in g ri ghts of 

an y of th es e ex istin g bu s lines, its im m ed ia te eff ect wo uld not be pr on ou nc ed . 

In a re la tive ly sh or t tim e, ho we ve r, it sh ou ld ha ve a de finite beneficial im pa ct . 

By pr od uc in g gr ea te r st abil it y in th e bu s in dust ry , th e ge ne ral trav el in g pu blic 

will be as su re d of get ting bett er in te rc it y bu s serv ice th an it wo uld un de r pr es en t 

co nd itio ns .

Wh o depends on int ercit y bus service t

W hv is it s o im port ant to he lp im pr ov e th e pre se nt clim at e so th a t th e n ati o n ’s 

in te rc ity bu s in du st ry will be in a bett er po sitio n to p ro vide a deq uat e serv ice in th e 

fu tu re ? One rea son is th a t fa r mor e pe op le t h an m os t of us rea liz e re ly o n th e bu s 

for th ei r in te rc ity trav el needs. To illu st ra te , in 1965, a to ta l of 193 million in te rci ty pa ssen ge rs we re ca rried by class I in te rc ity bu s compa nies, which is sl ig ht ly 

mor e th an th e co mbine d to ta ls of 106 million ca rried by th e ra ilro ad s and 85 

mi llio n ca rried by th e air lin es. The ab ov e fig ures ar e ex clu siv e of all pa ss en ge rs 

mov ing in co m m ut at io n and su burb an service s. In oth er wo rds, from th e sta n d ­

po in t of nu m be rs of i nt er ci ty p asse ng ers on ly—as co mpa re d to in te rc ity pa ss en ge rmiles us ua lly ci te d when co mpa ring mod es of tr ansp ort — th e bu s is still th e m ost 

fr eq ue nt ly used pu blic carrier . Thi s is illu st ra te d in th e follo wing ta bl e, which 

show s th e re la tive role of air, bu s, an d ra il ca rriers du ring th e past 10 ye ar s fro m 

th e st andpoin t of nu m ber of in te rc ity pa ssen ge rs ca rried .
10 INCIDENTAL BUS CHARTER RIGHTS

Inte rcity passengers carried 1

[In m illion s]

A ir (d om es tic 

sc he du le d)

B us 2 (cl ass 1) R a i l 2 (clas s 1)

T o ta l

pa ss en ­

gers

P as se nge rsP erc en t 

of t o ta l

P as se nge rsP er ce nt 

of tota l

Pas se ngers

P erc en t 

of to ta l

Y ea r:

1956 _____ . . . ______ 41.9 9. 4 224.4 50.1 181.5 40.5 447. 9

1957 _____________________ 45.2 10.8 212.4 50.6 162.0 38 .6 419. 6

1958 ___________________ 44.7 12. 0 188.0 50.5 139.8 37 .5 372 .5

1959 . . ______ . . . -- 51 .0 13.7 191.2 51.4 129.8 34.9 372. 0

1960 _________ _______ 52.4 14.5 187.7 51.7 122.7 33.8 362 .8

1961________ _____________ 52.7 14.7 187.5 52 .3 118.1 33. 0 358 .3

1962 ________ _____________ 56.0 15.6 186.1 51.8 117.2 32.6 359 .3

1963 _____________________ 63.9 17.6 185.1 50.9 114.5 31.5 363 .5

1964 __________________ 73 .0 19.3 190.4 50.3 114.8 30.4 378 .2

1965 — __________________ 84.5 22 .0 192.8 50.3 106.3 27.7 383 .6

1 Bas ed o n p as se ng er c ount of e ac h pe rs on bo ar din g a p ubli c ca rr ie r. A r o u n d tr ip b y 1 pe rs on w ould be 

co unte d as a t le as t 2 pa ss en ge rs.

2

 Doc s n o t in cl ud e co m m u ta ti o n o r loca l an d su b u rb an se rv ice.

Inte rcity bus service is also the cheapest form of passenger service from the 

standpoint of fares—costing about 2.74 cents a passenger-mile compared to 2.99 

cents for rail coach and 5.58 cents for air coach. The average bus rider is more 

“cost conscience” and is apt to be h urt more personally by higher fares that could 

result from loss of needed bus cha rter revenues. This is borne out by the N ation al 

Trav el Survey of the 1963 Census of Transportation, which shows th at 92 pe rcent 

of travel by bus is for personal reasons and thus must come out of th e bus riders’ 

own pockets.

The need for keeping scheduled intercity bus fares at the lowest possible level 

is also important because of the fact, that the lower income groups are the ones 

tha t must rely on such service to the grea test extent. This is due to their having 

less money to spend and thus having to use the cheapest mode, and also because 

they are the ones least likely to own automobiles. These relationships are 

illustrated by the following figures:

P er ce nt 

of to ta l 

sp en din g 

u n it s 1 w it h 

no c ar, 1965

P erc en t 

d is tr ib u ti o n 

of trip s 

b y b u s in 

1963 2

F am il y inco me before taxe s:

U nder $1, 000 _____

$1,000 to $1,999_________

$2,000 to $2,999 

$3,000 to $3,999 _ .

$4,000 to $4,9 99______ _

$5,000 to $ 5,999______

$6,000 to $ 7,4 99 .......... ..

$7,500 to $9 ,999 ________

$10,000 an d o v e r .............

65

57

42

39

2418

11

5

12

9

12

10 

126

11 

8

10

1

 A s pen din g u n it c o n sti tu te s all pe rs ons li vin g to geth er w ho p ool t h e ir expe ns es . U niv er si ty o f M ichiga n 

su rv ey .

2

 C en su s of tr a n sp o rt ; 10 pe rc ent of p er so ns d id n ot re p o rt inc om e.

The figures at the right of the table clearly show the heavy reliance on intercity 

buses by th e lower income groups, with 55 percent of the total trips by bus being 

taken by persons th at are members of families with incomes of less tha n $5,090 a 

year.

The figures in the middle column show the direct relationship between automobile ownership and family income and illustrate why low-cost public passenger 

transportation is so im portant to a large share of the general public. Since, on an 

over-all basis, 24 percent of the nation’s tota l Spending Units (see definition in 

footnote of table) do not own an automobile for one reason or another, they must 

rely on one form of public transportation or another. Since each Spending 

Unit represents approximately 3 persons, this means th at over 45 million people 

do not have access to an automobile for travel purposes.

The above relationships are particularly significant to the relatively short-haul 

intercity bus industry because it is the one faced with the sharpest competitive
INCIDENTAL BUS CHARTER RIGHTS 11

im pa ct of th e pr iv at e au to m ob ile . Ce ns us of T ra nsp ort fig ure s show th a t th e 

auto a cc ou nt s for 90 pe rc en t of all trip s up to 200 miles, bu t th en dr op s off sh ar pl y 

to 72 pe rcen t for tr ip s 200 to 499 miles an d only 47 pe rc en t for tr ip s ov er 500 

miles. In ot her wo rds, for sh ort tr ip s th e in te rc ity bu s is ra pi dl y becomi ng , w ith 

som e ex ce ptions, th e on ly mea ns of pu blic pa ssen ge r tr ansp ort ati on for th e perso n 

wh o do es n’t ha ve access to a car.

Concl usion

In su m m ar y, we be lie ve passage of II. R. 12916 is de fin ite ly in th e pu blic 

in te re st. I t will close a loop ho le in pr es en t law th a t th re ate ns to dr ai n esse ntial 

reve nu es fro m char te r ope ra tion s ne ed ed to he lp m ai nt ai n sc he du led in te rc ity 

bu s ser vic e to th e max im um nu m be r of po ints th ro ughout th e co un try. It will 

not affect th e ri gh ts of an y ex ist ing bu s line s, includ ing thos e now prov iding 

char te r ser vic es. It will per m it pa rtie s seeking bu s chart er righ ts to obt ai n them 

th ro ug h pu rc ha se of ex istin g ce rtificates or by ap pl ic atio n to the IC C. It wifi 

he lp assu re low-cos t in te rc ity pu blic pa ssen ge r ser vic e to millio ns of pe rson s who 

m ust co ntin ue to rel y on it be ca us e of th ei r inc om e st atu s or be cause th ey do no t 

ow n a pr iv at e au to m ob ile . Ov er-all, it sh ou ld he lp to assu re bett er an d mo re 

st ab le in te rc ity bu s tr ansp ort ati on service for th e ge ne ral public.

For these reason s, we urge fa vo ra ble co ns id eration of II. R. 12916 by yo ur 

Su bc om m itt ee .

Mr. Friedel. Any questions?

Mr. Springer. No questions.

Mr. Friedel. No questions. Thank you very much.

Are there any other witnesses? If not, the subcommittee will 

stand in recess for about 20 minutes. We have another hearing at 

10 o’clock.

(The following material was submitted for the record:)

Sta te m e n t of t h e C h a m b er o f C om m er ce of t h e U n it ed Sta t e s, P r epa r ed

by G eo r g e II . Se a l , C hair m a n of th e T r a n spo r ta tio n an d C om m unic atio n C o m m it tee an d M e m b e r o f th e N a tio n a l C h a m b er’s B oa rd of

D ir ec to r s

In th e in te re st of co ns istenc y in th e fede ral re gu la to ry proc ess an d a so un d 

nat io nal tr ansp ort ati on s ys tem, it is es se ntial th a t H .l t. 12916, now pe nd ing before 

th e Co ngres s, be pro m ptly en ac te d. 11. R. 12916 wo uld am en d Secti on 268(c) 

of th e In te rs ta te Co mmerce Act to el im in at e th e auto m ati c ac qu isitio n of nati onwide char te r bu s op er at in g ri ghts co nc ur re nt w ith th e re ce ip t from th e In te rs ta te 

Co mmerce Co mm iss ion of ce rtificates of pu blic co nv en ienc e an d ne ce ssity fo r 

re gu la r ro ut e bu s op er at io ns .

Thi s leg islatio n is ne ed ed to co rr ec t an in eq uitab le and co nfusing si tu at io n in 

wh ich m ot or bu s op er at or s ap pl y for insign ifi ca nt re gula r ro ute au th ori ty solely 

to ob ta in so-ca lled “in ci den ta l” ch art er righ ts. The pre se nt wor ding of Se cti on 

208 of th e In te rs ta te Co mmerce A ct pe rm its ho lder s of re gu la r ro ut e au th ori ty 

to p erfo rm ch ar te r serv ice to a ny poin t in th e co ntinen ta l U ni te d Sta te s rega rd less 

of th e scope of th a t au th ori ty .

H .R . 12916 wrou ld br in g or de r and co ns istenc y to th e gr an ting of m ot or bu s 

op er at in g righ ts by m ak in g fu tu re ap plica nts sho w th a t pu blic co nv en ienc e an d 

ne ce ssity re qu ire th e gra nting of chart er righ ts, an d th a t ex istin g char te r ser vic e 

is not ad eq uat e to serv e th e pu bl ic ne ed . Thi s is th e tim e- pr ov en te st ap pl ie d to 

th e gra nting of all oth er m ot or ca rr ie r oper at in g au th ori ty un de r th e In te rs ta te 

Co mmerce Ac t.

This im port ant am en dm en t to P a rt II of th e In te rs ta te Co mmerce Act ha s 

be en one of th e leg islativ e re co m m en dat io ns of th e Co mmiss ion for seve ral ye ar s. 

T he C ha m be r of Co mmerce of th e U nite d Sta te s urge s fa vo ra bl e ac tio n on H .R . 

1291 6 as ne ce ssary an d de sira ble in th e pu blic in te re st .

[Telegram]

P u y a l l u p, W a sh ., Septemb er 13, 1966

S am u el N. F r ie d e l,

Ch air ma n of Sub comm itte e, House Inter sta te an d Foreign Commerce Comm ittee,

Wa shing ton , D. C.:

I ur ge yo u to vo te ag ai ns t H .R . 12916 as th is is pr ej ud ic ed ag ai nst th e sm all 

bu s op er at or s th a t ap ply for IC C ri gh ts . I ha ve my IC C ri ghts b u t w ithout 

th em my bu s bu sin ess wo uld be d is co nt in ue d.

W il lia m H esselg r a v f.
12 INCIDENTAL BUS CHARTER RIGHTS

[Telegram]

H ar tf or d, C on n., October 3, 1966 .

W. E. Wil li am so n,

Clerk, House Comm ittee on Int ersta te Commerce,

Ra yb ur n Build in g, Wa shi ngt on, D.C.:

In te rs ta te Com merce Co mm iss ion an d NAM BO prop os e to am en d th is bill. 

Sub je ct to th is am en dm en t th e Ar row Line , In c. , Al me ida Bus Line s, In c. , an d 

th e C on ne ct ic ut Co ., all su pport th e pa ss ag e of th is legislation. If th e su bco m ­

m itte e de sir es cla rif ication as to th e eff ect on th es e co mpa ni es of th is a m en dm en t, 

ple ase ad vise an d we will ha ve a re pre se nta ti ve appea r be fore th e su bc om m itte e.

T hom as W. M u rrett.

J ama ica, N .Y ., Sep tem ber 13, 1966.

S ub co mm ittee on T ra ns po rt at ion and Aer on au ti cs ,

Hou se Com mitte e on I nt er st at e and F or eign Com mer ce,

U.S. Congress, Wa shing ton , D.C.

Gen tlem en: Our office re pr es en ts seve ral pa ss en ge r bu s oper at or s who are 

in te re st ed in H .l t. 1291C, wh ich legislation will am en d Se cti on 208 (c) of th e In te rst ate Co mmerce Ac t to prov id e th a t ce rtificates issued in th e fu tu re to m ot or 

comm on ca rriers of pa ssen ge rs shall not confe r, as an in ci den t to th e g ra n t of 

re gu la r route, ri ght s to en gage in spe cia l or char te r op erations .

As pro po sed, th e legisla tio n wou ld ap ply to all ap pl ic at io ns which ar e pr es en tly 

on file. On be ha lf of ou r cli ents, we re sp ec tfu lly re ques t th a t th e co m m ittee 

reco ns ider th e re troa ct iv e natu re of th e legisla tio n an d am en d th e bill so th a t 

it would ap pl y on ly to ap pl ic atio ns filed af te r th e effecti ve dat e of th e pr op os ed 

leg islation .

Ve ry tr uly yo urs ,

Sam ue l B. Zin d er.

I- V C oa ch es , I nc. 

Vincennes, In d., Septemb er 12, 1966.

Con gres sm an W. K. Dento n,

House of Rep rese ntative s Office Bu ild ing,

Wa shing ton , D.C .

D ea r C on gr essm an D en to n: As a bu s lin e op er at or in you r d is tr ic t I am 

w riting yo u as ki ng for you r su pport of H .R . 12916.

This is a bill to elim in ate th e gra nting by th e In te rs ta te Com m erce Co mmi ssi on of “auto m ati c” chart er ri ghts whe n a ca rr ie r ap plies fo r re gu la r ro ute 

au th ori ty .

In th e p ast whe n a ca rr ie r ap pl ie d to th e comm iss ion fo r righ ts of co nv en ienc e 

and ne ce ss ity to ha nd le pa ssen ge rs he had to pr ov e th a t th is serv ice was ne ed ed 

by th e proc ess of a pu blic he aring, th en if it wa s prov en he wa s gra nte d th e r ig ht s 

fo r re gula r sc he du led op er at io ns and su ch service th en be ga n. H e wa s also 

gra nte d “au to m ati c” right s to op er at e ch art er or sp ecial bu s service as he w an te d.

T he ev er-g ro win g use of th e au to m ob ile ha s mad e th e ope ra tion of sh ort hau l 

in te rc ity bu sine ss less an d less wh ile th e ch ar te r bu sin ess ha s gro wn to whe re in 

ou r o wn op er at io ns th e ch ar te r re ve nu e am oun ts to about 70 % of o ur t o ta l inco me.

So me ca rriers w ith an eye on th is b ett er en d of th e bu s bu sin ess hav e ap plied 

to th e Co mmiss ion for re gula r ro ut e service on ly w ith th e pre te xt of get ting th e 

auto m ati c chart er righ ts an d are slo wly crow ding ou t th e le gi tim at e ca rrier wh o 

ne ed s th is chart er reve nu e to be ab le to ke ep his sc he du led lin es ope ra ting .

T he pu rp os e of th is bill, II .R . 12916, is to put th e gra nting of ch art er righ ts 

on th e sa m e ba sis as re gu la r ri ghts th a t be ing by proo f of co nv en ienc e an d 

ne ce ss ity th e sa m e for bo th .

On Sep te m be r 1s t th e Sen at e pa ssed S. 2893 to am en d se ction 208(c ) of th e 

In te rs ta te Com merce Act. The bil l re fe rred to ab ov e is th e sa m e on e up for 

Hou se Action.

You r in ve st ig at io n an d con side ra tion of th is bill will be ap pre ci at ed .

Very tr uly yo urs,

E. C. O’N e il , Sec ret ary -Tr easur er.

(Wh ereupo n, at 9:25 a.m . the sub comm itte e recessed.)

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