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Veto of Bill To Exempt Certain Carriers in Interstate Commerce From the Antitrust Laws.

June 12, 1948

To the Senate:

I return herewith, without my approval, S. 110, a bill "To amend the Interstate Commerce Act with respect to certain agreements between carriers," because it would permit an important segment of the economy to obtain immunity from the antitrust laws, and would do so without providing adequate safeguards to protect the public interest.

This bill would authorize exemption from the antitrust laws for any carrier acting in concert with one or more competing carriers in the establishment of rates and related matters, if the Interstate Commerce Commission approves the procedural agreements under which such action would be taken. The Commission would be required to approve these agreements if it should find that exemption from the antitrust laws would be in "furtherance of the national transportation policy."

Under this bill private carrier associations and rate bureaus, free from the restraints of the antitrust laws, could exercise broad powers over most forms of domestic transportation, including railroads, trucks and busses, water carriers, pipelines, and freight forwarders. Carriers could agree privately among themselves upon the rates to be filed with, or withheld from, the Interstate Commerce Commission. Acting through these bureaus, groups of carriers could exercise a powerful deterrent influence upon the filing by an individual carrier of proposed rates which might benefit the public.

The exercise by private groups of this substantial control over the transportation industry involves serious potential harm to the public. Transportation rates affect the cost of goods as they move through each phase of production--from raw materials, through finished products, to the consumer. Power to control transportation rates is power to influence the competitive success or failure of other businesses. Legislation furthering the exercise of this power by private groups would dearly be contrary to the public interest.

My disapproval of this bill does not signify opposition to carrier associations as such, or to all of their present functions. Many of their activities are useful and desirable. However, this legislation is not necessary for the continuation of such activities.

No legislation giving a major industry immunity from the antitrust laws should be enacted unless adequate alternative safeguards are provided for the public interest. This measure fails to provide such safeguards. Even the limited safeguards incorporated in the bill as originally passed by the Senate are omitted from the bill in its present form. It would require the Interstate Commerce Commission to approve any agreement which it finds to be in "furtherance of the national transportation policy." This is a vague and general standard and is manifestly neither adequate nor appropriate as a criterion for waiving the protection afforded the public by the antitrust laws.

Furthermore, the Commission would be placed in the position of applying this general criterion to the basic procedural agreements without being able to foresee fully the nature and effect of the joint actions which would be taken thereunder. Nevertheless, the exemption from the antitrust laws would extend to these subsequent actions without the necessity of further Commission approval. It would extend, moreover, even beyond the parties to the basic agreement to any "other persons" who participate in such actions.

Even though transportation rates are subject to regulation by the Interstate Commerce Commission, the public interest nevertheless demands that the general national policy of maintaining competition continue to be applied to this industry. Our present transportation policy contemplates a pattern of partial regulation, within the framework of which the pressures of competition will remain substantially effective. Regulation cannot entirely replace these competitive pressures. It can guard against some of the potential abuses of monopoly power, but it cannot be an effective substitute for the affirmative stimulus toward improved service and lower rates which competition provides. By sanctioning rate control by groups of carriers, this legislation would represent a departure from the present transportation policy of regulated competition. This, I believe, would be a serious mistake, with far-reaching effects on our economy.

Antitrust cases are now before the courts challenging some of the very activities which would be covered by this bill. Pending judicial clarification of the issues raised in these proceedings, it would be inappropriate to provide the immunity proposed by this bill.

I have repeatedly urged upon the Congress the necessity for a vigorous antimonopoly program. This bill would be inconsistent with such a program.

For these compelling reasons, I find it necessary to withhold my approval from the measure.


Note: On June 17 the Congress passed the bill over the President's veto. As enacted, S. 110 is Public Law 662, 80th Congress (62 Stat. 472).

Harry S Truman, Veto of Bill To Exempt Certain Carriers in Interstate Commerce From the Antitrust Laws. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/232462

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