ALICE THROUGH THE STAGGERS ACT

There's no telling how many pending national grievances in need of redress are due to earlier redress of earlier grievances, but in failing to address the Staggers Act the just-adjourned 99th Congress left a historic example for the 100th.

Like many a well-intended reform, the Staggers Act has twisted and been twisted in ways that have delighted social commentators and satirists from the time of Swift through Lewis Carroll on down to today.In fact, the Interstate Commerce Commission's implementation of the act reflects the logic of Mr. Carroll's "Through the Looking Glass" and ''Adventures in Wonderland" in ways that need only a little changing to make it apply directly.

Ignoring the intent of Congress, the ICC has used looking-glass logic in the definitions that make or break Staggers, and then announced to the world that, "what I tell you three times is true . . . sometimes I've believed as many as six impossible things before breakfast."

Passage of the Staggers Rail Act was predicated on creating profitable, modern railroads while preventing their abuse of newly granted powers against shippers with no alternative.

Once passed it went to the ICC where, as Mr. Carroll wrote:

The bowspit got mixed up with

the rudder sometimes,

But the principal failing

occurred in the sailing,

And the shipper,

perplexed and distressed,

Said he had hoped, at least,

when the wind blew due East,

That the ship would not travel

due West.

How far due West? This requires a look at the terms.

Captive Shippers - Of captive shippers and railroads, Mr. Carroll might say what he wrote of the crocodile:

How cheerfully he seems to grin,

How neatly spreads his claws,

And welcomes little captives in

With gently smiling jaws.

In Mr. Carroll's typical my-way-or-no-way fashion, the ICC agrees with the railroads that captivity does not exist if there are any competitive factors at work, and especially if that competition does not involve transportation. By railroad reasoning, shippers of Powder River Basin coal to Texas were not captive to the Burlington Northern when BN was the only originator of that coal. Why? Because, in Texas, Powder River coal competed with oil, gas and coal from other mining regions.

It took the bitterly opposed Chicago and Northwest spur - connecting the Powder River Basin with Union Pacific lines - to show that competition in transportation can reduce consumer costs by 20 percent to 30 percent; and can make crocodiles as lean and as mean as they claim to be.

Some Powder River shippers no longer are captive. Shippers who have not been so fortunate would like to share the invigorating experience of having transportation competition.

Revenue Adequacy - On this concept, Mr. Carroll summed up the Interstate Commerce Commission's first applications, the railroad argument and the shipper's predicament this way:

He though he saw a Rail Rate Clerk

Descending from the bus:

He looked again, and found it was

A hippopotamus:

If this should stay to dine, he said,

There won't be any for us."

No one pretends the railroads don't have a job to do; and they know doing it requires an adequate return on capital. The National Coal Association and others have long recognized that bankrupt railroads carry no coal. In a nutshell, that's why we supported the Staggers Rail Act in the first place.

But being profitable does not mean reaping as much as can be charged where there is no transportation competition. And that's why we now support appropriate amendments.

The Staggers Act granted greater regulatory leeway to "revenue- inadequate" railroads and this was appropriate, considering how burdensome regulation can become no matter how well-meaning and necessary. The hippopotamus came to dine when the ICC continued to find all railroads ''revenue-inadequate" long after everybody else recognized them as anything but financial anorexics.

Stand-alone Costs - The ICC's flirtation with this novel - in all senses of the word - concept best fits these lines from Mr. Carroll:

I can explain all the concepts

that were ever invented -

And a good many that haven't

been invented just yet.

This is another neat theoretical concept, but its effect depends entirely on what is made to stand alone. Given the ICC's record, captive shippers had reason to be concerned.

The commission's recent first application of this Carrollian concept has been reassuring to captive shippers. However gratifying the first application, the captive shippers would like to see it subsequently rendered less subject to looking-glass logic - and semantic and accounting legerdemain - that has made such mockery of the terms "competition" and "revenue adequacy" in their common sense meanings.

Differential Pricing - Here Mr. Carroll gives meaning to the relationship of captive shippers and railroads with his lines on the party the Walrus and the Carpenter threw for the oysters:

The time has come, the Walrus said,

To talk of many things:

Of shoes - and shipments -

and sealing wax -

Of unit trains and kings -

I weep for you, the Walrus said,

I deeply sympathize.

With tears and snorts, he sorted out

Shippers of the largest size,

Holding his pocket handkerchief

Before his streaming eyes.

But answer came there none -

And this was scarcely odd because

They'd eaten every one.

Differential pricing recognizes it is in the captive's interest to have some goods shipped at less than fully allocated costs - however that is determined - just as long as variable costs are covered and some of the fixed cost charge on the captive is reduced.

It does not mean the absence of any restriction on the pricing of captive movement. There is no confusion among captive shippers here. They just don't accept the meaning the railroads give whereby some difference becomes any difference, and every captive shipper becomes the railroads' oyster.

Rail Cost Adjustment Factor - This deals essentially with sharing lowered costs with shippers, and Mr. Carroll summed up the situation with these thoughts:

Contrariwise . . . if it was so, it might be; and if it were so, it would be; but as it isn't, it ain't. That's logic.

Rail cost adjustment is another illustration of the lack of symmetry and equity - looking-glass logic - that has dogged implementation of the Staggers Rail Act. Inflation adjustment factors always are messy things, and to imagine in 1980 that cost would ever decline was not an easy thing - it required as much imagination as even Mr. Carroll possessed.

But costs did decline. If the rates of service are to go up, for no other reason than that input costs have risen, where is the penalty to the railroads to have rates decline when costs do? To do otherwise - to have costs fall and rates stay high - is to send every shipper to the railroads' dinner party.

Congressional definitions and intent do not just have whatever meaning the ICC or the railroads wish to give them. There are good ideas and real intent behind all these terms, and they could be made to work well. But doing so requires they have some meaning and application other than just what the ICC and carriers choose them to mean.

Staggers' principal failing has been in the sailing: Congress wrote orders for a specific course, but the ICC took due East to mean due West and failed to distinguish its bowspit from its rudder.

One of the oldest federal agencies, the ICC has been like Mr. Carroll's Father William, who spoke thusly with his son:

You are old Father William,

the young shipper said,

And you hair has become

very white;

And yet you incessantly

stand on your head -

Do you think, at your age,

it is right?

In my youth, Father William

replied to his son,

I feared it might injure the brain;

But now that I'm perfectly sure

I have none,

Why, I do it again and again.

Railroad and ICC insistence on an "Adventures-in-Wonderland" approach is what has bedeviled implementation of the Staggers Act from the beginning. The amendments advanced by shippers seek simply to provide the needed common meaning.

And, if this meaning is not added, at some point all the well-meant and good ideas will begin to fade like the Cheshire cat, and the only thing left will be the grin of the railroads, which - as Mr. Carroll said - "remained quite some time after the rest was gone."

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