and the Caribbean, chairing conferences that are run from the Atlantic coast and the gulf coast.

At my left is Richard Gage, who is chairman of the North AtlanticUnited Kingdom Conference. There again the name of the conference think speaks for itself. He is also based in New York City.

Now in this instance I appear on behalf of 24 steamship conferences based either in New York or in San Francisco. They operate from the Atlantic, the Gulf and the Pacific Coasts of the United States to most of the important trading areas of the world. Appendix A, which I referred to a minute ago, lists the various conferences and the 106 members, steamship carriers who are members of the one or more of those conferences.

If you look at appendix A, I think it will speak for itself because the names of the conferences show the geographical ranges. The subject matter of S. 1905 is a legal matter on which all of the conferences and their member lines have a common position. Since it is a legal memoandum, I request that all of my statement be incorporated in the ecord. This will give your able staff the benefit of our legal argument, much of which I propose to skim over. I am just going to annotate t in the interest of time-I know we are working against the clock here, Senator BARTLETT. That will be permissible. Your entire statement will be printed in the record.

In addition, I should say now that Admiral Harllee had requested permission to have the draft of the revised bill printed and that will be done also.

Mr. MAHONEY. Apropos of that, the second request granted to Admiral Harllee, we have attached as appendix B to my statement H.R. 9473, H. Rept 920, as it emerged from the House Committee on Merchant Marine and Fisheries. This is the bill which we are supporting, which is the same one which is being urged by Chairman Harllee.

Senator BARTLETT. Do you happen to know when that bill was reported over in the House?

Mr. MAHONEY. I think November 14, 1967, it was reported with mendments, and I think-don't take my word as gospel on thisbut I believe it is going to be on the Day Calendar today. Senator BARTLETT. On the Consent Calendar?

Mr. MAHONEY. Excuse me, that is right, the Consent Calendar in the House I think is the first and third Monday of the month, so I suspect it will go through the Consent Calendar today.

But this is only what I was told last week on information and belief, Senator, so I am not sure.

Senator BARTLETT. And you never can tell when someone will pop up and say "I object."

Mr. MAHONEY. No. As a matter of fact, you never can tell when you are going to get a question that seems off the beaten path, like the question you asked Admiral Harllee about retroactivity.

I must say I was as surprised as he was on it. I am glad you are not wedded to any idea like that.

Before I answer that question, which I am really going to take up first, I want to tell you that we are in 100-percent support of the statement that was made to you by Admiral Harllee, and the questions or dialog between you and the admiral. The only area I think of disagreement and it is not really disagreement, because I think he

appreciated and showed in his answers to your questions a real appreciation of our problems. However, I would say that we are unalterably opposed to such an amendment as you suggested. The reasons are brief.

First, there isn't a single shipper in the 156, or however many there have been, shippers, who have been involved in these special docket situations for the last two and a half years, who has bothered (1) to go to court on the matter, or (2) to come in here. This morning you have a complete absence of any of the people who normally would be looking out for the interest of the shippers, the National Industrial Traffic League, the Commerce & Industry Association, or even a local chamber of commerce or any of the 156 shippers involved.

Senator BARTLETT. Should we call for Betty Furness?

Mr. MAHONEY. I think we ought to as a matter of fact. She might take up the cudgels. As a matter of fact, she might add a little glamour too.

So I would stress what Admiral Harlee touched on. It would be a monumental job to search our records back for a couple of years. The fact is if you people can move quickly on this bill and get it passed in this session in the next few weeks, there will be a 6-month retroactivity feature in there, because as you note at page 3 of appendix B the final clause provides that applications for refunds must be filed with the Commission within 180 days. So you will get a 6-month retroactivity anyway, which would pick up a fair number of these. The most important thing, I think, Mr. Chairman, in this instance is to stress to you the fact that every year based on the Commission's own figures in its report in 1966 there were 500,000 separate rate filings that were given to them. Out of these 500,000, to have only 156, if I have the right figure, errors of inadvertence is really a miniscule percentage.

Now we would hasten to say that we seek perfection, but as you know, the fact is that gremlins creep in. Occasionally somebody will slip and forget to put a weight or a measurement or do the kind of things that the admiral talked about. I am not going to illustrate those or go any further, other than to say considering the huge volume of tariff changes that have been made, I think that these few corrections that are involved don't warrant our going back and searching our records. A lot of them occurred abroad, and the cost is really tremendous. We impressed that on the Commission in the discussions we had with them.

I would say parenthetically that the progress of this bill is a good example of Commission-industry cooperation. When we started out I didn't think we had a chance to have a dialog with the Commission, because Chairman Garmatz called the hearings over in the House on about 6 days' notice. They didn't get their position solidified nor did we until the hearing. One reason is because I have both east coast and west coast clients, so I had trouble getting a common position hammered out.

But subsequent to the House hearing we carried on a useful exchange. It seems to me that the Commission has been very receptive and very understanding of the special problems that the industry has. They recognize that at no time have we ever been anything but in 100-percent agreement with the objectives of the legislation. What we objected to, which is detailed in my statement, is the form that it took first, particularly the rate freeze.

I am not going to go into those differences because it seems to me tey are past history. We are in agreement on them. The important ing as I see it is that because of this dialog and because they have ppreciated our points of view, and realized that particularly we ave an unwarranted expense of going back to search through our ecords in a case which is really pretty much de minimus, I agree that 1,000 for a person that is aggrieved may seem like a large amount, but think you have to take an overview of this and recognize that it is 1,000 out of millions and billions of dollars that are involved.

Now when H.R. 9473 was introduced and considered by the House ommittee, it was in haec verba with S. 1905 which you have before

ou.

During the intervening months H.R. 9473 was reported out of the bcommittee in a revised form, which we suggested. I think that the ggestions have all been incorporated in the text of our appendix B, ith a few changes.

I have really covered the material on page 2 and I just want to say hat to save time I am also going to skip the material which appears in the rest of pages 3, 4, and 5. What it does is set forth in detail our bgal objections to the FMC's covering comments and the material at lines 1 to 15 on page 2 of appendix B; in other words, to the original bill H.R. 9473, and the original bill S. 1905.

It seems to me this has become academic in the light of the Commison's changed position. However your staff, when it is considering his matter, may want possibly to have the reasons we gave in capalized form that I think persuaded the Commission to change its position. Therefore I want to skip down to the bottom of page 5 and alk first about urging your committee to concur in the changes which ave been made by the House of Representatives. I want to outline riefly the areas in which the House bill differs from the original draft before you, and bear down on the points that matter to us.

First, there is no longer any provision for a mandatory rate freeze, retroactive for 30 days and prospective for 90 days. We are at the top f page 6 of my statement now. This requirement has been replaced by the last proviso which states that if permission is granted by the Commission, the carrier or conference will publish an appropriate otice in its tariff, or take such other steps as the Commission may require, to give notice of the rate change and will provide for additional refunds to other shippers who are similarly situated.

This language appears at lines 8 to 16 on page 3 of our appendix B. The legislation in its present form protects the innocent shipper in hose rare cases where through a carrier's inadvertence a shipper has paid a manifestly improper rate. The legislation empowers the Conmission on good cause shown to grant to the carrier authority to correct a clerical or administrative error and to refund the difference. The legislation also provides that relief will be afforded in those ew cases where through inadvertence a carrier or conference fails o file a specific rate promised to a shipper..

I would stress here parenthetically that these are very few cases and we are not talking about any kind of constantly occurring situaion. They come up infrequently. When they do come up, we in the industry want to correct them as much as anybody else, and we want to be sure that anybody else similarly situated gets a similar refund.

Now in the second instance, we appreciate the possibility that th question as to whether relief should be granted hinges on the question of the intent of the particular carrier and shipper applying for relief In such a case, the carrier and shipper alike must bear the heav burden of showing good cause for relief under these exceptiona circumstances.

We think that the revised third proviso adequately protects the rights of similarly situated shippers against discrimination.

In our presentation to the House committee, we pointed up th practical problems involved in giving notice to such similarly situate shippers. This is what I was stressing to your earlier on the retro activity problem. If you think it is difficult, and we think it is ex traordinarily difficult and so persuaded the Commission, to roll back ou records over a 6-month period and search through hundreds, thousand of bills of ladings. As a matter of fact, if you talked about retro activity, we would be talking about tens of thousands of manifests Maybe I am exaggerating if I say millions, but I'm sure hundreds o thousands of bills of lading are involved. Am I exaggerating this Mr. Marshall?

Mr. MARSHALL. No, I think that is a fair statement.

Mr. MAHONEY. This retroactivity thing would cost us an enormou amount of money, all for a very few dollars. It would cost us hundred of thousands of dollars, to refund, probably just about $10,000 on the other wide.

Well, we emphasized it was unfair to thrust on the carriers and the conferences the burden of searching through these bills of lading for the sailings at or about the time in question, and suggested that the Commission might give notice through the Federal Register of a synopsis of the rate mistake and an invitation for any similarly situated shipper to come forward.

Some of the members of the House committee were concerned with whether or not the Federal Register was an adequate vehicle for notice. They were afraid it might get cluttered up with these rate synopses. I think we persuaded them that they come up so infrequently that it didn't matter really and it wouldn't be an inhibiting factor and the subcommittee in the House agreed to that.

However, in talking with the Commission further, we felt if the carrier or conference published a tariff correction notice showing the proper rate of classification that this correction notice would be sufficient for any other alert shipper to claim his rights by a timely application.

Well, the Commission staff didn't share our view as to the efficacy of the Federal Register as an effective method of notice. Maybe we are biased in this regard because we have to comb through it every day to see if there is any action by any one of the Federal agencies that is inimical to the best interests of our clients. But since the Commission entertains reasonable doubts as to its efficacy, our clients are willing to go one step further. This is what was described to you by Admiral Harllee.

Most of the conferences employ a contract rate system under which the shipper who agrees to confine all of his shipments to conference lines receives a discount up to 15 percent. All contract conferences must maintain current lists of all contract shippers. In those conferences where contracts are offered, better than 99 percent of the

eshippers in the trade avail themselves of the contract. Therefore, the nnost effective way to publicize any rate action in such a conference is foy a notice to the contract list. Our clients are prepared to circularize heir contract list with an erratum notice if the Commission grants a Ispecial application. This will provide actual notice to practically everyone who might be affected.

It is an expensive way of correcting an error, but we are confident the number of instances where this will be necessary is so limited that we can shoulder the burden.

Now in those few instances where our clients don't have a dual rate -contract, they still maintain a complete shipper list. If an error happens in such a conference, the conference would undertake to r ircularize the shipper list, thereby giving actual notice to any shipper similarly situated.

- The third possibility would arise in the case of an individual line not a member of a conference, if such line made an application for a refund. In this case the line wouldn't have a contract list and it might not have a shipper list. Under those circumstances the Commission might well condition its approval of the refund on the carrier's undertaking to search its manifests and bills of lading to uncover any other 3 shipper similarly situated.

The final proviso also requires that an application for refund or waiver must be filed with the Commission within 180 days. We approve of this because it will eliminate or minimize stale claims.

Again I can't emphasize too strongly, the fact that we are in a dynamic industry. It is one that is moving fast all of the time with huge amounts of paperwork, and it is difficult enough to go back 180 days to search records if you have to, but to go back for 2 years would be a colossal task and one that I believe is way beyond what should be required.

We are confident that after the full exchange of views we have had, the Commission understands the various possibilities and will use the remedy best suited to the circumstances. Therefore we believe the revised legislation set forth in appendix B, which is the same as the Commission is urging, will do the following:

First, it will provide an effective way to cure the evil that S. 1905 seeks to cure, and second, it will satisfactorily protect the rights of similarly situated shippers and give the Commission sufficient flexibility to condition its relief upon the circumstances involved.

Therefore, we respectfully urge you to substitute the revised language embodied in appendix B for that which is before you in S. 1905. Thank you for your attention. I will endeavor to answer any questions that you might have.

(The complete prepared statement with appendixes follows:)

STATEMENT OF JOHN R. MAHONEY ON BEHALF OF 24 CONFERENCES AND THE 106 COMMON CARRIER MEMBERS OF ONE OR MORE THEREOF

I am John Mahoney of Casey, Lane & Mittendorf, 26 Broadway, New York City. I appear here on behalf of 24 steamship conferences based either in New York or San Francisco which operate from the Atlantic, Gulf and Pacific Coasts of the United States to most of the important trading areas of the world. Appendix A which is attached lists the Conferences and the names of the 106 steamship carriers, members of one or more of these Conferences. If you will take a quick look at Appendix A, you will see that the Conference names themselves indicate the geographical ranges served.