are good. The traveling public does not know in most cases why they are there. Length, weight, and height should require none at all. There are times when we are using three vehicles to move one load. It's really unnecessary with our energy crisis and this to me is wasting fuel.

Now, this applies primarily to Iowa. Across the State of Iowa with a load in excess of 90,000 pounds permitted load, we have to have two escort vehicles as well as the truck that is pulling the load. This escort vehicle running behind you is of no good to you or of no good. to you at all. In a lot of cases the one in front isn't.

The State of South Dakota, we don't use escort vehicles. Yet we get along fine over there. In Nebraska it's not required. I can't see why it should be in Iowa. It should require that all States charge the same ton fee for their licenses regardless of the commodity you haul.

Farmers, for instance, pay one fee, contractors another, and for-hire contractors or carriers still a higher one. To me this is discrimination. In most cases, the farmer and contractor do as much for-hire hauling as does the regulated carrier.

ICC should stop the practice that has started in some States. That is the charging of the use tax on vehicles. In Iowa, for instance, they couldn't charge a State sales tax on a vehicle operated under ICC regulations. So therefore, they implemented in 1973 a State use tax. Now, this use tax in the State of Illinois, it was tried over there and was declared unconstitutional by the Supreme Court of the State of Illinois.

If it's unconstitutional in Illinois, how come it's constitutional in Iowa? In my particular case we have internal revenue services of the State of Ohio after us right now for use tax on three vehicles purchased last year. These vehicles are leased to a Nebraska carrier, base carrier.

We are required to put a Nebraska base plate on these vehicles. Nebraska does not recognize an Iowa title. Therefore the vehicles are titled in Nebraska. I don't feel that we are obligated to this use tax because these vehicles are dispatched out of Chicago, Ill., Minneapolis. Minn.. Omaha, Nebr.. Sioux City, Iowa. But they tell me because I am not a base corporation that I am liable for this tax.

The ICC should set up some hard fast rules for firms that use leased operators. If the leased operator only gets 75 percent of the revenue, then he should only pay 75 percent of the insurance, license, and so on down the line. The lessor should pay his 25 percent as well. They need a set length of time that the lessor can hold your money.

An ICC ruling requires a shipper to pay in 7 days after receiving his bill. Why shouldn't a lessor be required to pay his leased operators in 7 days? Any carrier that violates these rules should be severely fined. No one should be allowed to buv authority and destroy it for the sole purpose of eliminating competition.

There are many pieces of authority lying dormant in the archives of the ICC in Washington, D.C., due to deaths, et cetera, of people that they were issued to originally. These should be made available for reactivation by someone who does not have authority in the areas that they were originally issued to.

Mr. HUNGATE. Are you familiar with an actual situation, with a case?

76-102-76- -33

Mr. McQUADE. Yes. There was a gentleman that had authority that operated out of Sioux City. He had authority for size and weight, articles of size and weight for nine States. He put these up for sale. There was another carrier in Omaha who got wind of this.

He came up here and he bought this authority and took it back to his office and tore it up and threw it in the wastebasket to eliminate competition. The authority was the exact duplicate of the authority that the Omaha carrier had already owned. But by doing this, he got it out of the way. Nobody else could ever get it. It eliminated his competition.

Mr. HUNGATE. Pardon me for interrupting. Go ahead.

Mr. McQUADE. This is about all I have except for one article I would like to mention that is in the testimony that will be submitted for the record. It regards insurance. One of the companies that we were leased to up until last fall had their insurance set up so that we had to issue them a whole harmless clause and we had to carry our own insurance.

They were to furnish us insurance on the interstate shipments as to cargo, liability, and property damage which is required. Their cargo insurance had a $10,000 deductible. Now, a friend of mine in Sioux Falls was also leased to this same company. One of his trucks was involved in an accident, and this is when this first came to light as far as he and I were concerned.

Well, before this happened to me, and I'd be liable for the first $10,000, I went and bought more insurance to cover me for that first $10.000 which is the only way that I would get out of it in case something would happen.

Another thing is these licenses. Last year in September we changed companies. The licenses were issued to the company that we had previously been leased to. We sent in the license to them, turned in to the various States. We had like a $900 refund coming for the balance of the year.

Then when we went to the new company, we had to have the license reissued in the new company's name which cost us an additional $900. To this day I do not have my $900 refund. The money has been paid from the State license reciprocity board in Iowa. The company we were leased to were issued a check.

In the office in Omaha there was a copy of this check that this company in Ohio cashed this check and they are sending our money; $900, I can't hardly afford to hire an attorney to go back to Ohio to wrestle with them for it. The costs would be prohibitive. So all I can do is just write letters and hope that maybe somebody will get bighearted and send me my share. Gentlemen, that's about as much as I have at this time.

Mr. HUNGATE. Thank you very much, Mr. McQuade.

Mr. Bedell?

Mr. BEDELL. How many trucks do you operate?

Mr. McQUADE. At the present time I have three.

Mr. BEDELL. And you lease those on a permanent basis? Is that the way you operate?

Mr. McQUADE. We are on a permanent lease. We have a certificate of authority in the State of Iowa in our own right. Anything we haul intrastate of Iowa is ours 100 percent.

We don't share that with any other hog carrier, but if we cross the State line, we would lease on a 20-80 percentage basis. I pay 20 percent right off the top to go to south Sioux City which is a pretty good chunk of money.

Mr. BEDELL. What is it? I don't want names at all, but the firm from whom you lease to in order to get rights, do they help you get business or do they furnish you quite a little of the business?

Mr. McQUADE. No. I solicit all my own loads. I do all my own paper work as far as billing, making out the shipping bills, et cetera, set up all my own permits for overdimension loads, take care of it 100 percent. When the load is delivered and signed, I submit the signed bill of lading to them and they bill the shipper for the amount due.

Mr. BEDELL. So you pay them 20 percent of the income you get? Mr. McQUADE. Right.

Mr. BEDELL. If it was simple for you to get a certificate so you would be certificated in order to do this without having to lease to them in order to do this, in your opinion about what is it worth, the services they provide you such as insurance and so on? What do you think that's worth?

Mr. McQUADE. Well, we are duplicating insurance because I am carrying insurance enough right now that I wouldn't even need this. Mr. BEDELL. What do you think it is worth? To you what do you think it is worth? If you didn't have to have it in order to operate, what do you think it would be worth?

Mr. McQUADE. Not more than 10 percent. Specialized Carriers and Heavy Haulers Association red book interchange rate for changing authority and paperwork back and forth is 10 percent.

Mr. BEDELL. So you think you have to pay 20 percent for something which you believe is worth about 10 percent to you?

Mr. McQUADE. Right.

Mr. HUNGATE. Mr. Jensen?

Mr. JENSEN. When are the escort vehicles required?

Mr. McQUADE. It will vary from one State to another depending on the size of load you're carrying.

Mr. JENSEN. Let's talk about Iowa then.

Mr. McQUADE. All right. In Iowa anytime you're exceeding half of the roadway or are over 12 feet wide, if you're exceeding 90,000 pounds of gross weight regardless of this width, height or length, if you're over 14 feet 4 inches tall, if you're over 70 feet in length, you're required to have escorts. Sometimes one, sometimes two. Always two if you're above 90,000 gross.

Mr. JENSEN. Thank you. That's all, Mr. Chairman.

Mr.HUNGATE. You seem to have that pretty well in hand.

Mr. Schafer?

Mr. SCHAFER. May I say something again along that line. You got to shut down at sundown. You can't run Saturday, Sundays and holidays. Inclement weather will shut you down real quick. Minnesota sometimes in the afternoon before the Saturday before the holiday or something, you can't run or the forenoon maybe, depending on the load you have got after the holiday. Many people don't know this, this heavy hauling bit, how much more you get penalized.

And yet your rates many times don't come up either. They are probably no better than normal rates.

Mr. HUNGATE. Well, thank you very much, Mr. McQuade. That's the list of the regular scheduled witnesses.

Mr. LYNCH. We have two gentlemen who would like to offer a few comments. Herman Hediger and Mr. Paul Arndt.

Mr. HUNGATE. I will swear both of you in right now. Do you solemnly swear the testimony you are about to give will be the truth, the whole truth and nothing but the truth, so help you God? Mr. HEDIGER. I do.

Mr. ARNDT. I do.

Mr. HUNGATE. Please be seated, gentlemen. If you will start and please give your name and address for the reporter and the subcommittee.

TESTIMONY OF HERMAN HEDIGER, NEILLSVILLE, WIS.,

ACCOMPANIED BY PAUL ARNDT, GLENHAM, S. DAK.

Mr. HEDIGER. First, I'd like to thank the committee here for letting me speak on behalf of all the 1,500 owner-operators in the State of Wisconsin which come from 1,200 towns. So approximately there is a little more than one owner-operator family for each town. By the way, my name is Herman Hediger. I come from rural route 3, Neillsville, Wis.

Mr. HUNGATE. I know that place. Is Judge Beilfuff still around? Mr. HEDIGER. Who?

Mr. HUNGATE. Judge Beilfuff. Bruce Beilfuff.

Mr. HEDIGER. Yes. Just got a promotion.

Mr. HUNGATE. Good, Well, pardon me. It's not every day you meet a man from Neillsville.

Mr. HEDIGER. Because the ground rules require that I don't mention company names, I am going to change a little bit. I will leave these papers in the envelope and I will try not to mention any names. I went back in my records to try and be prepared back in 1935. This family was in trucking before that, approximately 1928. But these records go back to 1935.

I have a picture of a truck in there with the name Herman Hediger on it which is an independent owner-operator. That name is_still carried on my truck. I will not put another name on my truck. I am an independent owner-operator. The money I make from this truck belongs to me.

I operate it under this, for all this time. Now, the reason I have this envelope here is that I have another name from another family on that record. These two families worked in mutual respect for 41 years.

Two years ago the Interstate Commerce Commission came in and gave me this, a permanent injunction for the rest of my life for not doing business with that company. This is my reward from the bureaucracy for giving service and for working with another family. This right here.

Mr. BEDELL. We don't want names, but I think you are going to have to say this a little clearer so we know what you are talking about.

Mr. HEDIGER. These two families have worked on an equal basis.
Mr. BEDELL. Were they both in the trucking business?

Mr. HEDIGER. Both in the dairy business and both in the trucking business.

Mr. BEDELL. Dairy and trucking?

Mr. HEDIGER. Right. Because of bureaucratic rules and regulations, our family went out of the dairy business. Now, my wife and I have eight children. I don't have any mistresses around nor am I a buried soldier.

Mr. BEDELL. It's not advisable generally to make speeches promising that you don't have mistresses.

Mr. HEDIGER. Well, these eight children are proof of that. So the dairy business had to go. The rules and regulations put us out of business, the Federal Food and Drug rules. We couldn't afford to keep on. I kept the trucks and I kept going with what I had and I gave these people service.

Mr. BEDELL. You are hauling for the other family? Is that what you're telling us?

Mr. HEDIGER. Right. I kept on hauling for the other family. The revenue that was there was not enough to make it worthwhile to apply for rights. So I kept on hauling as long as I could. I had four tractors and five trailers. I am now down to one and I owe money on that.

In retrospect, this man that made this inspection had his right to do so but he has been transferred. He has been gone. Now, I have a letter of support from this company of the residue of that inspection and that thing here of the old service that they get from the common carriers. They can't get service. They can't get their product delivered. They want the independent owner-operator to be able to haul their product to market. That I want to get in the record.

Mr. LYNCH. You want to enter all of these into the record: is that correct?

Mr. HEDIGER. Well, I can't mention the names.

Mr. HUNGATE. We can file them as exhibits.

Mr. HEDIGER. I can't mention the name, but I would put in the record.

Mr. LYNCH. Was the inspection by the Interstate Commerce Commission?

Mr. HEDIGER. Inspection by the Interstate Commerce Commission. Mr. BEDELL. Was it milk that you were hauling?

Mr. HEDIGER. Dairy products, yes. Exempt products like milk powder.

Mr. BEDELL. Dry product?

Mr. HEDIGER. Right,

Mr. HUNGATE. Like cheese factors?

Mr. HEDIGER. Cheese factors, right.

Mr. BEDELL. You were hauling for yourself and then when you went out of business you continued to haul for this other family? Mr. HEDIGER. Right.

Mr. BEDELL. You did not have authority to do that hauling, so they came in and told you you couldn't continue?

Mr. HEDIGER. Couldn't continue. This in retrospect is the poor service that they are now getting since 1972. They can't get anybody to