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Mr. MENK. No, I don't regard the supervision to be poor. In some areas it is getting more difficult, for instance, in the Washington area it is almost impossible to employ people. I have my own feeling that we are probably in some areas not getting the caliber of person-I think this is true in many industries-that we would like to get maybe. Although we do have strict rules, we do have strict examinations, employee examinations, and we do test them, it seems that we are having more employee negligence than we had before.

We have not cut down the supervision. We have a very vigorous safety program. As I said earlier, we are conducting an average of over 1,300 safety meetings a month. We are going out to the public too and trying to educate them in the area of grade crossings but this isn't responsive.

Mr. SKUBITZ. I think you also testified that the foremen go over the road each day. Is that true of all railroads?

Mr. MENK. I think so.

Mr. SKUBITZ. Can you think of anything that the Department of Transportation would or could do that you are not doing now?

Mr. MENK. I honestly can't think of anything that they could or would do that would be constructive that would be done, that we are not doing now.

Mr. MACDONALD. Would the gentleman yield for one short question? Mr. SKUBITZ. Yes.

Mr. MACDONALD. If that is your true feeling why do you oppose the bill?

Mr. MENK. Because, sir, as I said, I don't know what they are going to do. The bill doesn't say. I don't know what kind of standards they are going to put in. I admittedly cited an exaggerated hypothetical example but insofar as this bill itself is concerned, this could occur. I don't know what they are going to do. Let me say this also, sir. Suppose that we qualify a man

Mr. MACDONALD. I don't want to use up Mr. Skubitz's time.
Mr. SKUBITZ. That is all right. We have plenty of time.

Mr. MENK. Suppose we qualify a man and the union agrees that he is qualified. The DOT comes along and says he is not. The union takes it to the National Railway Labor Board which is the appropriate place and the Labor Board says, "This is a matter of union-management negotiations. You pay the man."

Who pays? There are some questions in this bill that need to be answered.

I have made some suggestions as to how I think this ought to be done in my testimony. Labor and management are willing, at your direction so far as I am concerned, to sit down and work out some standards and work out a safety program. God knows we want safety because the failure to have it costs us enormous sums of money. Personal injury liability costs are one of the big costs in the railroad business.

Mr. SKUBITZ. The next question I would like to ask you, Mr. Menk, is, do you think that heavier equipment and longer trains are responsible for these derailments?

Mr. MENK. Well, we are getting into a matter of scale there. If you say that, the equipment we are buying today is better than any equipment in the history of the railroads. The radios that we use, the

hot box detectors that we have installed along our rights-of-way, the surveillance that we put it through would indicate that we are able to take

Mr. SKUBITZ. What do you mean by hot box detector?

Mr. MENK. An electronic device that measures the heat of each journal box and anytime one exceeds a certain temperature it communicates that information either to a central control point or block signal which stops the train and we get in touch with the train immediately.

Incidentally, we have improved the mileage of incidence of hot boxes between terminals 10 times over a period of 10 years ago as a result of all of the things we are doing, the adoption of roller bearings, journal pads, better lubrication and hot box detectors and better surveillance and so on.

Mr. SKUBITZ. Under this bill, if the Department of Transportation would determine that trains were too long or that you didn't have enough crewmen, do you feel that this bill gives DOT the authority to order the railroads to cut down the length of the train or to hire more employees?

Mr. MENK. I assume that if they correlate it with the interests of safety if that was their opinion that this bill could do that.

Mr. SKUBITZ. What do you think, Mr. Moloney?

Mr. MOLONEY. I think it is very clear that the bill would do that and I think the Secretary of Transportation so stated.

Mr. SKUBITZ. Now, let's get to defects in freight cars. Why are the number of defective cars on the increase?

Mr. MENK. Well, I responded or tried to, to Mr. Brown. I don't know all of the reasons for this but the fleet is getting older. There are fewer cars purchased.

Mr. SKUBITZ. Do you have an inspection system?

Mr. MENK. Yes.

Mr. SKUBITZ. How often?

Mr. MENK. Cars are inspected at every interchange point. They are inspected every time a train stops in a yard by a car inspector. They are inspected by the crews on line of road every time the train stops or at least our rules provide this.

Mr. SKUBITZ. That may be true of a railroad inspecting its own cars. Mr. MENK. That is true of every one.

Mr. SKUBITZ. Suppose your car gets on the Frisco track or on some eastern road. Do they inspect the car properly?

Mr. MENK. They won't take the car from you until it has been inspected.

Mr. SKUBITZ. Is that right?

Mr. MENK. That is right.

Mr. SKUBITZ. One of the witnesses, I think, Mr. Crotty, pointed out that three out of five maintenance jobs have been abolished from 1950 to 1967.

Mr. MENK. That is not so.

Mr. SKUBITZ. Is there a relationship here between the number of accidents and also the reduction of maintenance workers?

Mr. MENK. Maintenance of way employment in 1958 nationally was 134.192. Maintenance of way in 1967 was 90,462. That is not three out of five.

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Mr. MENK. I don't know whether I have that. I don't have that for 1950.

Mr. SKUBITZ. It seemed to me that it was around 260,000 or 270,000. Mr. MENK. By the use of technology we have mechanized our maintenance practices but we are still spending more money on the maintenance of the roadbed than we did and I have the figures 1960 to

1967.

In 1960 we spent $2,751 per mile of road for maintenance of track and in 1967, $3,113 per mile of road by which I think we are maintaining our properties better and more efficiently than we did back in the days when we didn't use power stabbers and ballast regulators and so forth.

Mr. SKUBITZ. We have established one point.

From the standpoint of safety, if the Department of Transportation determined that more men on the line would be necessary you feel they could order the railroads to hire more men, is this correct? Mr. MENK. Yes.

Mr. SKUBITZ. Let me ask this question. We talk about the substantial increase in the number of casualties at grade crossings. I raised this question. If the Department of Transportation determined that the way to cut down these casualties was by building an overpass or underpass, do you think it could order the railroads under this act to do this?

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

Mr. SKUBITZ. What do you think, Mr. Moloney.

Mr. MOLONEY. I would say it is not clear from the bill.

The CHAIRMAN. Your time has expired.

The gentleman from Massachusetts, Mr. Keith.

Mr. KEITH. Thank you, Mr. Chairman.

Pursuing the line of questioning that was started by Mr. Skubitz, if they are able to increase the number of employees could they similarly decrease them?

Mr. MENK. I don't envision this happening but I don't know.

Mr. KEITH. Well, I am interested. I understand that there isn't quite the amount of esteem in back of the bill that we felt that there was going to be by labor and management. It would seem to me that the point that you make is in fact the case, that labor would be similarly concerned that they could decrease them as well as increase them. The bill, as I read it, gives a tremendous amount of authority to the Secretary.

Section 10 (d) which reads, "the Secretary is empowered to perform such acts, to conduct such investigations" and so forth is sort of an open license to do almost anything.

I wonder, as I asked the other day, to what extent this legislation in its formative stages was discussed with representatives of the railroad industry, both management and labor.

Could you speak to that, Mr. Moloney?

Mr. MOLONEY. Yes, sir. I would be glad to.

During their testimony Mr. Lang and Secretary Boyd were asked I think whether they consulted and discussed with the railroad management and with railroad labor the bill that you have before you.

Mr. KEITH. Was it adequately answered in that respect?

Mr. MOLONEY. No, sir. I do not think it was and I know nothing about the DOT's consultations with railroad labor except what I heard the Secretary and his spokesman say; namely, that railroad labor was consulted and did make some suggestions with respect to the bill, some of which had been adopted and some of which had been rejected.

However, I am familiar with and I personally participated in most if not all of the discussions that the Department had with management, and when they first approached us I might describe it this way.

The first approach was on an informal basis pointing to the pendency of another broad safety bill, to wit: the administration's industrial safety bill, I think the health and occupational safety bill, and in substance the suggestion was made by them that the Secretary of Transportation should be given broad and unlimited safety jurisdiction in the railroad area.

We told them then, and told them promptly, that in our opinion no case had been made or presented to us by them that would establish either a need or the desirability for placing such broad authority in the hands of the Secretary, and that in the absence of such a case that we could neither support nor accept such legislation.

We subsequently received from them a memorandum in narrative form outlining in substance what they had in mind in the way of legislation.

We met with them. We discussed that memorandum. We reaffirmed our position of opposition to any such proposal on the basis that no case had been made for its need and we told them that we could not support the legislation.

Now, we don't think anything has been offered here that would change that but I might also add this: That even though we requested the opportunity to review the draft of this legislation such opportunity was denied us and we saw this bill only when it was transmitted to the Congress by the letter of the Secretary of Transportation.

Mr. KEITH. In effect you only had a memorandum for a working paper and the memorandum was not in any sense of the word legislative in form?

Mr. MOLONEY. No, sir. It was not. We saw the bill at that time it was sent to you, to the Congress.

Mr. KEITH. This committee, as most of those present today know, is constantly dealing with industry and executive agencies and it has been our custom to stress to both parties, and when I say the industry I mean management and labor collectively, that industry and the Government agency involved should come to us with legislation that has been developed with a mutual sharing of concern for the public interest and a vertical development, one that starts with a memorandum and then works to a proposed piece of legislation, and then one which is brought with certain areas of agreement and certain areas of disagreement; but I think it is an unhealthy sign that they tend to work in isolation, more or less.

Just by way of background for me, are you familiar with the Jones Act philosophy as it pertains to the merchant marine?

Mr. MOLONEY. No, sir.

Mr. KEITH. There they spell out in the law certain benefits that must be afforded to those who are injured in line of duty in the merchant marine field and it too has its weaknesses.

Mr. MOLONEY. I understand it is a form of workmen's compensation in one sense of the word.

Mr. KEITH. Yes, in one sense of the word.

Mr. MOLONEY. A rather loose sense.

Mr. KEITH. It goes far beyond it in other respects.

Mr. MOLONEY. Yes, sir.

Mr. KEITH. Mr. Menk, diversification is the trend today.

What responsibilities do you have besides running the railroad? Does the railroad have a vast empire of other corporate activities that it pursues and over which you have executive responsibility?

Mr. MENK. Well, of course; no, we don't have a vast empire of corporate activities. We own a truck line for which I have final responsibility.

Mr. SKUBITZ. Will my colleague yield?

Mr. KEITH. Yes.

Mr. SKUBITZ. You don't own a chain of television stations or mutual funds?

Mr. MENK. Not yet, sir.

Mr. SKUBITZ. I know of one railroad that does.

Mr. MENK. Because we do have some timber activities we have a lumber company. I am not an officer of this company but I would have some responsibility there. I am on the board of directors of several of our subsidiary company railroads, Burlington

Mr. KEITH. What about your interest in oil? You don't have any. I would assume, from your answer.

Mr. MENK. Do I have an interest in oil?

Mr. KEITH. No; I asked what portion of your time was devoted to running the railroad as contrasted to other activities.

Mr. MENK. Oh, 90 percent, 95 percent. I don't run the railroad though. Of course, we have an operating vice president who has the prime responsibility for operation.

Mr. KEITH. But 95 percent of your executive effort is spent with reference to the railroad activities?

Mr. MENK. Directly for the railroad activities: yes.

Mr. KEITH. Does the railroad own any oil interests of any extent ? Mr. MENK. Yes, sir. We have some Standard Oil in the Williston Basin.

Mr. KEITH. That is a subsidiary corporation?

Mr. MENK. No, it is not a subsidiary. We consolidate the earnings. It is a separate department operated by an operating vice president. Mr. KEITH. It is an operating vice president and really takes that load from your shoulders?

Mr. MENK. Yes, sir.

Mr. KEITH. What percentage of the income of the corporate entity comes from oil versus rail?

Mr. MENK. Of our net, about 25 percent.
Mr. KEITH. Thank you, Mr. Chairman.
The CHAIRMAN. Mr. Nelsen.

Mr. NELSEN. Thank you, Mr. Chairman.

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