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Mr. BLANTON. That is the only point that I wanted to make.

Let me ask you one other question. I am in agreement with you that I don't think regulation is the total way to prevent accidents but wouldn't it seem to you that possibly there should be some steps made in regulating this equipment since it is the major cause of our accidents on railroads now?

Mr. DAULTON. Well, I am a great believer in a consensus method of arriving at a standard and I think that if there is to be any sort of regulation then the equipment manufacturers, the users, and the regulatory people should sit down and work out the standard rather than having somebody say, "This is an arbitrary standard. Now live by it." Mr. BLANTON. Certainly there has to be some expertise in deciding the standard for this. We couldn't take a layman to decide the standards.

Would you suggest that in this piece of legislation that maybe we should set out who the experts should be to set the standards. Mr. DAULTON. I think it would be desirable.

Mr. BLANTON. Thank you, Mr. Chairman.

Thank you, Mr. Daulton. I have no further questions.
Mr. FRIEDEL. Mr. Skubitz, do you have questions?

Mr. SKUBITZ. I was quite interested in your statement, Mr. Daulton, on page 3 at the bottom of the page there, "safety is basically a matter of life and limb, and 'train accidents' as such are obviously a poor guide to what is happening in the area of railroad safety."

Just what do you mean by that?

Mr. DAULTON. Well, just a little example.

One day last week here in Washington there were two carloads of beer on a siding. During the night somebody went in and let the handbrakes off those two cars. They rolled down about 7 miles and it was estimated that, by the time they struck the underpass, they were going 45 miles an hour. Those cars were badly damaged. The beer was torn up and broken up. Now, that will be reported by the railroad as a train accident. There was no railroad employee involved. There was no locomotive involved. It was some outside persons who came in and let the handbrakes off.

Mr. SKUBITZ. This is a deliberate act of an individual that caused the accident.

Mr. DAULTON. That is right.

Mr. SKUBITZ. All right.

Mr. DAULTON. Now, what we are talking about in safety is how many men's lives do you save, how many men do you keep from getting hurt, and train accidents don't always, in fact very very seldom do they result in an injury or death.

Mr. SKUBITZ. Would you say there isn't a relationship then at all between train accidents and the safety equipment on the train? Mr. DAULTON. There is a relationship, yes.

Mr. SKUBITZ. Well, is there a great relationship or not?

Mr. DAULTON. I don't think it is an overriding relationship.

Mr. SKUBITZ. Do you think then that because of the fact that a train perhaps would be derailed once every 2 weeks, putting it on that basis, because of roadbeds or defects in cars with nobody injured, that we should do nothing about safety factors then?

Mr. DAULTON. Well, sir, if that happens to the railroad or the railroads it certainly costs them money and I think that they themselves would try to do something about it.

Mr. SKUBITZ. I would think so too but apparently according to some of the statistics we have received the accident rate keeps going up and up. Which guideline do you think would be the best. If you were not representing the railroad and were a member of this staff, what guideline would you offer this staff to follow in determining whether we should do something about these accidents?

Mr. DAULTON. I would use the guideline of lives and limbs.
Mr. SKUBITZ. And not safety factors on the trains at all?
Mr. DAULTON. I would look first at human lives.

Mr. SKUBITZ. I would ask you another question.

What about the safety factors?

Mr. DAULTON. You would have to consider them, too.

Mr. SKUBITZ. I am sorry I didn't have time to read your whole

statement.

Thank you, Mr. Chairman.

Mr. FRIEDEL. You are quite welcome.

Mr. Springer has some questions. In the meantime, I would like to ask one question.

Are there any overall figures as to what the railroads themselves paid out in dollars and cents for traffic accidents?

Mr. DAULTON. You mean grade-crossing accidents, sir?

Mr. FRIEDEL. All accidents.

Mr. DAULTON. I would suppose there are, but I don't have them. I would imagine in their annual reports to the Interstate Commerce Commission such figures are included on one of the tables.

Mr. FRIEDEL. Do you have any questions, Mr. Skubitz.

Mr. SKUBITZ. In examining your roadbed just how do you do that? Do you have a trainmaster or someone that covers so many miles a day to examine the roadbeds?

Mr. DAULTON. Well, the trainmaster is not an engineer, a civil engineer. He is not qualified.

Mr. SKUBITZ. Who does the job?

Mr. DAULTON. In the engineering department you have different categories of people. Different railroads call them different things, but I can speak, of course, for the L. & N. We have what we call a division engineer who is the top engineer, a civil engineer, on his territory. Under him he will have an assistant and then we have what are called roadmasters. They have a certain number of miles. Under the roadmaster is the track supervisor.

Mr. SKUBITZ. How many miles does the road supervisor cover?
Mr. DAULTON. A track supervisor?

Mr. SKUBITZ. Yes.

Mr. DAULTON. The size of the division, the density of traffic governs the amount of territory assigned.

Mr. SKUBITZ. What is the rule of thumb?

Mr. DAULTON. I don't know, sir.

Mr. SKUBITZ. How often does he cover it?

Mr. DAULTON. A track supervisor is supposed to go over his track at least every other day.

Mr. FRIEDEL. I want to thank you, Mr. Daulton.

Our next witness will be Mr. William Moloney, general counsel for the Association of American Railroads.

STATEMENT OF WILLIAM M. MOLONEY, GENERAL COUNSEL, ASSOCIATION OF AMERICAN RAILROADS

Mr. MOLONEY. Mr. Chairman, my name is William M. Moloney, and I am general counsel, the Association of American Railroads. I am appearing on behalf of that association in opposition to the bill that your committee is considering here today.

Mr. Menk and Mr. Daulton have, I think, explained the fundamental reasons why this bill is neither justified nor required.

I agree fully with the reasons that have been presented by those two witnesses and join them in expressing our opposition to passage of the bill. It will be my purpose however rather than dealing with statistics to discuss some of the particular parts of the bill and if I may, Mr. Chairman, I would request that my written statement be incorporated as part of the record because I will not follow it word for word. Mr. FRIEDEL. The full statement will be included in the record. Mr. MOLONEY. Thank you.

(Mr. Moloney's prepared statement follows:)

STATEMENT OF WILLIAM M. MOLONEY, GENERAL COUNSEL, ASSOCIATION OF

AMERICAN RAILROADS

My name is William M. Moloney and I am General Counsel the Association of American Railroads. I am appearing on behalf of that Association in opposition to H.R. 16980. Mr. Menk and Mr. Daulton have already explained fundamental reasons why this bill is neither justified nor required. I agree entirely with those reasons, and I join them in expressing our opposition to passage of the bill.

It will be my purpose to discuss some of the particular parts of the bill, not with a view to suggesting amendments, but because it is important for this Committee and the Congress to understand exactly, if that is possible, what the bill would do. Neither the section-by-section analysis that accompanied Secretary Boyd's letter of transmittal nor the testimony of Mr. Lang describe the full scope and impact of this bill or all the implications to be drawn from its provisions.

The scope and impact of the bill are such as to reach every area of railroad operations and to place the Secretary of Transportation in almost complete control of the very life of the railroad industry. Indeed, as I shall point out, the effect of this bill extends beyond the railroad industry itself. As has been shown by Mr. Menk and Mr. Daulton, the bill is premised largely upon regulation for the mere sake of regulation.

An illustration of this fact is found in the definition of the word “railroad" contained in paragraph (5) of section 2 of the bill. That definition is as follows: "Railroad" means any contrivance now known or hereafter invented, used or designed for operating on, along or through a track, monorail, tube, or other guideway. This definition embraces any "contrivance", whatever that term may mean, "now known or hereafter invented" and includes such contrivances as "monorail", "tube" or "other guideway". There obviously is no need for such forms of transportation to be regulated now. The only apparent reason for including in this definition of "railroad" such contrivances as "monorail", "tube" or "other guideway" now known or hereafter invented is to satisfy the desire of the Secretary to obtain safety authority over them when and if they are invented and become elements of interstate commerce at some time in the future. This very definition is another example of the fact that this bill is predicated upon the concept of Federal regulation for its own sake. I say this because one thing is certain, namely, that the creation of regulatory authority in the Secretary over such contrivances now known or hereafter invented cannot be predicated upon any showing of a lack of safety in their operation.

The definitions contained in paragraphs (5), (6) and (7) of section 2 and their interrelationship are practically incomprehensible. "Rail commerce" means any

operation by railroad in or affecting interstate or foreign commerce or the transportation of mail by railroad. However, the word "railroad" means any contrivance now known or hereafter invented, used or designed for operating on, along or through a track, monorail, tube or other guideway. Thus, a single freight car, or a track motor car, or a weed burner becomes itself a "railroad". And it does not have to be placed in use but may simply be designed for such use.

A "rail carrier" means any person who engages in any operation by any contrivance, now known or hereafter invented, used or designed for operating on, along or through a track, monorail, tube, or other guideway.

As if this were not enough, paragraph (8) of section 2 contains the following definition:

"Rail facilities and equipment" include, without limitation, trackage, roadbed and guideways, and any facility, building, property, locomotive, rolling stock, device, equipment, or appliance used or designed for use in rail commerce, and any part or appurtenance of any of the foregoing.

While this definition lists eleven specific items, many of those items, such as "facility", "property", "device", "equipment", and "appliance", are themselves not specific but include the entire gamut of imagination. Again, and as if we had not already heard enough, this listing is simply an inclusion "without limitation". To make things even more confusing, section 2 states that the definitions therein contained are to mean what the definitions say, "unless the context otherwise requires." Just how, when, and what person, board, forum or court will make this determination as to what the "context otherwise requires" presents, at least, an intriguing question.

While the definitions in section 2 present sufficient problems in themselves, those definitions as used in the context of section 3 of the bill become more involved and the full scope of the bill, whether intended or not, becomes apparent. By this section the Secretary is empowered and there is imposed upon him the duty to promote safety in rail commerce by prescribing and revising from time to time standards, rules and regulations. While a complete understanding of "rail commerce", as I have explained, may be difficult or impossible, the fact remains that the Secretary is empowered and it becomes his duty to promote safety in that area. He is to accomplish this by prescribing and revising from time to time three specific things.

First, he is to prescribe and revise from time to time minimum standards governing the use, design, materials, workmanship, installation, construction and performance of "rail facilities and equipment." Here, I ask that you refer back to the definition of "rail facilities and equipment", as set forth in paragraph (8) of section 2. When you do so you will find that "rail facilities and equipment" include without limitation such things as any facility, building, property, device, equipment or appliance used or designed for use in rail commerce and any part or appurtenance of any of these. Thus, the Secretary can and must, for example, apply this power and duty to railroad buildings, including even the general office building, and the Secretary has complete control over its use, design, materials, workmanship, installation, construction and perform

ance.

Apply it, if you will, to any "device" or "appliance", and you may wind up with a computer. Apply it, if you will, to "any facility" or "property," and you can take your pick. Apply it to rolling stock and locomotives and the Secretary will control not only their use and design, but also the materials, workmanship, installation and construction by their manufacturer, who will usually not be a rail carrier at all. Apply it to the rail and the Secretary will control the design, materials, workmanship and manufacture of rail by the steel industry, and its use by the carriers.

While much more could be said about section 3(a) (1), I move on to the second paragraph of section 3 (a). Under this section, the Secretary's powers would extend beyond the railroad industry itself and embrace a large area of the railroad supply industry. I have already pointed out how paragraph (1) of this section would reach beyond the railroad industry, but paragraph (2) makes it even more clear. Let me take, for example, a private car company manufacturing its own cars and leasing them to either railroads or shippers and, when necessary, receiving such cars back at its own facilities for maintenance, servicing, repair or overhaul. That private car owner would be subject to the Secretary's jurisdiction in performing such work, including the frequency and manner thereof and the eqiupment and facilities required therefor. In other words, the plant itself and all machinery and equipment within the plant required for the performance of the work.

Another example would be the overhaul of a railroad locomotive by the manufacturer thereof. Example after example could be cited but I think the point has been sufficiently made. Any inspection, testing, maintenance, servicing, repair and overhaul of rail facilities and equipment performed by anyone outside the railroad industry would bring such person and his equipment and facilities under the jurisdiction of the Secretary.

Moving to paragraph (3) of section 3(a), the Secretary would be empowered to prescribe rules, regulations, or minimum standards governing qualifications of each and all employees of a railroad insofar as their activities might, in the opinion of the Secretary, relate in any way to safety in rail commerce. As an extreme example, perhaps in the opinion of the Secretary, a man from an operating or safety background would make a better chief executive than a lawyer or an accountant.

As used in this paragraph, the term "practices, methods and procedures" of rail carriers has no limitations and, when applied to any and all employees the meaning of such terms becomes even more difficult to comprehend. “Practices, methods and procedures" would seemingly cover anything and everything that a rail carrier might do. I suppose the standardization and procurement of even office equipment would be considered a practice, methods or procedure.

This section 3(a)(3) will inevitably involve the Secretary in matters that have heretofore been considered bargainable under processes of the Railway Labor Act. Many of the matters embraced within this paragraph have been bargained and have been included in labor contracts. The Secretary would have the power to override such contracts and agreements and to impose his own terms and conditions. I believe it is unnecessary to enlarge on this point and its mere mention should be sufficient to indicate the real scope of the proposed legislation you are now considering.

Another undisclosed consequence would follow from paragraph (3) of section 3(a). It is not an obvious one to those outside our industry, perhaps, but to railroad men it is clear. The Congress also is thorougly familiar with the recent strikes, actual and threatened, by various groups of employees such as firemen and trainmen, in the name of safety. Past Congresses have spent many unpleasant days contemplating such strikes or acting to prevent them. When strikes have taken place, management officials have usually been able to take over the operation of essential trains so that at least some of the necessities of national life can continue to be transported. It is not difficult, however, to envision rules adopted by the Secretary under this paragraph (3) which, though adopted in good faith, would have the effect of disqualifying the management personnel who in the past have put through essential trains.

Section 3 of the bill does nothing toward confining the Secretary or his agent in the exercise of the powers it grants. To be specific, it requires no hearing on any rule, regulation or standard that he may choose to adopt. Under the Administrative Procedure Act, which is the only procedural restraint on the Secretary's rule-making powers under this bill, he need only announce a proposed rule in the Federal Register and receive written comments upon it. He may thereupon adopt it, reject it, or modify it after considering such comments; but his action need not be based on those comments. Unfortunately rule making in matters of railroad safety has been for many years a battleground on which the differences between management and labor have been fought out; and the clashes between the parties on safety rules are as "adversary" as any law suit. It is utterly unrealistic to regard these rule proceedings as "non-adversary." In such matters it is essential that the preservation of the rights of the parties be provided for by the requirement of hearings and decisions on the record.

As I have pointed out, section 3(a) empowers and directs the Secretary "to promote safety" by prescribing, and revising from time to time, rules, regulations and standards. "To promote" something is to advance or elevate it. We assume that any rules that might be adopted by the Secretary initially under the authority of this bill would be sincerely designed to have that effect, even though experience might disclose neither furtherance nor elevation as a result. What would happen, however, if experience under the rule showed that it created inefficiency which could be eliminated by a revision that would in itself not "promote safety" but would, nevertheless, leave safety unaffected and unimpaired?

We know from experience what would happen. The Power Brake Act of 1958, adopted by the Congress over our protests, proves it. When Congress was considering the Power Brake Act in 1957 and 1958 the AAR witnesses asserted and proved by evidence from brotherhood sources that railway labor hoped and

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