The opinion of the court was delivered by: CLARY
The present action involves a suit for an injunction and treble damages under the Sherman and Clayton Anti-Trust Acts, Sections 1 and 2 of the Act of July 2, 1890, 26 Stat. 209, 15 U.S.C.A. § 1 et seq., and Section 4 of the Act of October 15, 1914, 38 Stat. 731, 15 U.S.C.A. § 15, by 41 interstate long-haul truckers and the Pennsylvania Motor Truck Association, hereinafter called 'PMTA', against some 35 railroads operating in the northeastern part of the United States; the Eastern Railroad Presidents Conference, hereinafter referred to as the 'Conference' or 'ERPC', and Carl Byoir & Associates, Inc., a New York public relations firm, hereinafter called 'Byoir'. Opinions dealing with preliminary motions to dismiss, discovery matters, and a motion to file an amended answer and counterclaim are reported in D.C.E.D.Pa.1953, 113 F.Supp. 737; D.C.E.D.Pa.1953, 14 F.R.D. 189, and D.C.E.D.Pa.1956, 19 F.R.D. 146.
The basic allegation in both the claim and the counterclaim is that the defendants on the one hand conspired to obtain a monopoly of and to drive the plaintiffs out of the business of long-haul freight transportation in the northeastern section of the United States by various and sundry means, which will be more fully discussed later in this opinion, and on the other hand the defendants claim that the plaintiffs themselves were engaged in an illegal conspiracy for the identical purpose to obtain a monopoly of the long-haul freight industry in the same part of the United States and to force the railroads out of that segment of the transportation business in the area.
The individual plaintiffs in this case are each engaged in the trucking business, as stated above, and operate regularly through Pennsylvania in intercity and interstate long distance hauling. Nearly all of the plaintiffs are members of the plaintiff, Pennsylvania Motor Truck Association, which is a corporation chartered on April 24, 1928, in the Court of Common Pleas No. 4 of Philadelphia County, having its principal office at the 7th Floor, Telegraph Building, Harrisburg, Pennsylvania. PMTA has chapters in every county of Pennsylvania and its members are primarily operators of motor trucks who operate in or through Pennsylvania, including industries which operate their own trucks as well as those operating trucks for hire.
The first defendant, Eastern Railroad Presidents Conference ('Conference'), is an unincorporated association maintaining offices at 230 Park Avenue, New York 17, New York, and 143 Liberty Street, New York, New York. The membership of the Conference includes the presidents or trustees of approximately 35 railroads in 17 eastern state of the United States, operating north of the Potomac and east of the Ohio rivers. The presidents and trustees officially represent their respective railroads in the Conference, which is supported, maintained and utilized by said railroads. The Conference maintains a permanent functioning organization and a staff of paid personnel. It has regular meetings of its members and a paid executive director, presently one David I. Mackie. The Conference operates through a number of committees and subcommittees, including a subcommittee on public relations, described in detail later in the opinion, and also maintains a Bureau of Information at Grand Central Terminal, New York 17, New York. The respective railroads are regularly assessed for the cost of operating the Conference, assessments being prorated based on the size and income of the respective roads so that the Conference is in large measure supported by the big railroads, in end result being that the larger railroads contribute proportionately a much larger share for the Conference than do the smaller railroads.
The individual defendants who were originally sued were the presidents or past presidents of the several railroads, members of the Conference at some of the times covered by the complained of actions, or were key members of the Public Relations Subcommittee of the Conference.
The defendant railroads are all Class I railroads, most of which operate in Pennsylvania, and all are active members of the Conference.
The defendant Carl Byoir & Associates, Inc. is a New York corporation, engaged in the public relations business, with its principal office at 10 East 40th Street, New York City, New York.
Plaintiffs in their complaint, after identifying the parties, summarize the respective relations of each defendant in the transportation of passengers and freight in the northeastern section of the United States. The complaint then alleges that in May of 1949 the defendants embarked upon an illegal conspiracy in violation of the antitrust laws of the United States, the purpose and objective of the conspiracy being to eliminate the plaintiffs as well as others in the same industry as competitors to the railroads in the field of long-hauling of freight, and to carve out exclusive railroad monopolistic spheres of operation in the said industry to the end that the railroads would have a monopoly on freight hauling in interstate commerce. The complaint charges that ERPC appointed a Committee on Competitive Transportation (ER-TC), charged with carrying out the details of the conspiracy, and that that committee retained defendant Byoir as its public relations agent for the express purpose of effectuating the object of the conspiracy. Further, that Byoir in conjunction with the ERPC and the railroads, acting through their presidents and/or trustee, or subcommittee of the Committee on Competitive Transportation, embarked upon a campaign designed specifically to impede the operation of the trucker plaintiffs in every possible way, and in pursuance thereof, among other things, vilified and defamed the plaintiffs by circulating to the public generally, to public officials, and to suppliers and customers of the plaintiffs, false and malicious reports of and concerning the plaintiffs in the conduct of their business of hauling freight; formed so-called 'independent' citizens groups organized to circulate false and malicious propaganda attacking the plaintiffs, which propaganda was in fact the product of Byoir and its employees issued on behalf of the railroads but made to appear to emanate from independent sources; sought to secure the passage of legislation favorable to the railroads and injurious to the truckers through the instrumentalities of the so-called 'independent organizations'; attempted to and actually prevented the passage of legislation in Pennsylvania favorable to the truckers (S.B. 615) by using and duping as well as bribing public officials and officials of independent organizations; all to the end that the defendants might bring about the destruction of the plaintiffs' business and the elimination of them as competitors. The complaint charged that the conspiracy continued from 1949 to the date of the institution of the suit on January 17, 1953; has resulted in disparaging the plaintiffs' business in the public mind; has created great public hostility to the plaintiffs; has interfered with the legitimate conduct of their business and the furtherance of their business, resulting in increased cost to shippers and consumers, particularly in areas not served by the railroads; has increased the expense of operation by the plaintiffs, and finally has caused loss of accounts and profits and prospective profits to the plaintiffs.
The defendants originally answered the complaint but did not counterclaim. In their original answers the defendants denied the existence of any conspiracy, alleged that the plaintiffs in competition with the railroads were enjoying enormous public subsidies in the matter of the free use of public highways; that they were unfairly competing with the railroads by carrying loads substantially in excess of the legal weights permitted by the several states; that mere fines for overloading were not sufficiently high to stop the overloading; that the overloaded trucks destroyed the highways; that any effort made on behalf of the railroads to 'improve their competitive position in the climate of competition in the field of long-hauling of freight' was ultimately directed to the attainment of legislative measures which involve the right of free speech and right to petition the legislature, both constitutional guarantees and therefore without the orbit of the antitrust laws; and finally that everything done by the railroads was within the 'rule of reason' in free competitive enterprise. The railroads also contended that as taxpaying citizens they had the right to point up a growing public abuse in that heavy trucks ruined highways, requiring a greater and greater and expenditure of public funds, and that roads and bridges, underpasses and overpasses had to be reconstructed to provide facilities for the increasing volume of traffic and size of vehicles, all of which was to the detriment of the railroads which had to pay part of the reconstruction costs of such facilities.
Early in 1956, after the case had been assigned on October 1, 1956, trial date and during the pendency of discovery procedures, some of the railroads and ERPC sought permission to and were allowed to counterclaim against the truckers,. The counterclaim charged that the truckers themselves were engaged in nefarious practices against the railroads and with the sole purpose and objective of themselves obtaining a monopoly of and driving the railroads out of the long-haul transportation business in the northeastern section of the United States. It averred that the truckers had engaged in identical public relations programs about which the truckers in their complaint had complained of the railroads; that they made use of the same 'third party techniques' charged against the railroads; that they used bogus organizations to advance their cause as against the railroads, and, finally, that they in concert sought to so injure the railroads as to eliminate them as competitors in the long-haul transportation field. On these contentions the case went to trial solely as to the issue of liability. Each side has now concluded its testimony with respect to the question as to whether there was a conspiracy on the part of either, or both, to monopolize longhaul freight transportation in the northeastern part of the United States. The Court will in this opinion resolve that question.
The period in which the factors involved in this case developed has been generally limited in the proofs to the period from 1930 through 1955. The controversy itself involves the loss of business by the railroads to the long-haul trucks in interstate commerce during that particular period. It is candidly admitted by defendant-railroad companies that in the year 1930 the competition for long-haul freight transportation was de minimis. There were only some 28,000 of the so-called 'big trucks' in the entire United States. However, in the early 1930's with the improvement of highways and mechanical equipment, ti became obvious to the railroads that the carriage of goods by trucks, instead of by railroad, was a growing business with which the railroads had to concern themselves. Accordingly, a joint committee of railroads and highway users was instituted to consider the problem. This committee was comprised of truck manufacturers, railroad officials, and officials of motor federations and associations, representing only the then organized automobile clubs. The truckers, as such, had up to that time formed few associations and those in existence were not very forceful in representing the trucker. In any event the truckers were not represented on the committee. That committee filed a report recommending that users of highways be charged for such use as they made of the highways and that a base construction rate for roads should be determined with reference to the smaller private automobile and so-called pickup truck and that any excess cost should be met in increased fees to the heavier vehicles proportional to the amount of the increased cost. The committee also jointly approved standards of road construction, known as the AASHO standards, promulgated by the American Association of State Highway Officials, which standards recommended a maximum of $ 18,000 pounds for axle loads for all vehicles. Significantly, however, the recommendation of the Commissioner of Public Roads of the United States of standards for gross weight and size of vehicles to make these standards uniform among the several states was, primarily at the instance of the railroads, not accepted. In the Atterbury-Swayne Report (containing the Committee's findings) it was recommended that limitations as to these two items be left to individual state action.
That the railroads were very seriously concerned with truck competition in the latter part of the 1930's and lobbied for antitruck legislation, both in Congress and in the Legislatures of the several states, is completely demonstrated in the report of the Committee on Interstate Commerce, pursuant to Senate Resolution 71, (74th Congress) Report No. 26, part 2, rendered on October 16, 1941 to the 1st Session of the 77th Congress, and known as the 'Wheeler Report'. This report condemned the railroads for what the committee termed as being 'more concerned with the selfish interests of a few rather than the needs of the transportation industry as a whole'. The report further pointed out that the method adopted by various railroads and railroad associations to combat the inroads of the trucking industry was not a method designed to meet truck competition by improvement of railroad service, nor was it a means for adjusting the railroad industry to the fact that there are certain functions for which motor vehicles are especially adapted. It concluded that the program as developed at that time planned to impede truck and bus competition by the erection and enforcement of legal barriers. The program had its beginning at least as early as 1932. It had two major aims; the enactment of laws and ordinances designed to harass the trucking industry, and the stimulation of enforcement of such laws, ordinances and regulations. The above noted report further condemned the action of the railroads in secretly subsidizing so-called independent organizations and foundations which stated publicly that they were only interested in the objective 'presentation of facts' but which were actually either completely subsidized or dominated by the railroads through financial support and otherwise.
Despite the combined antitruck opposition of the railroad associations of the United States, the trucking industry continued to flourish. At this point I must, for clarity in this opinion, state that hereafter when the term 'trucking industry' is used, it will be used in connection only with that small segment of the entire trucking industry called the 'long-haul truckers' which has to do with vehicles of a minimum of 18,000 pounds axle load and gross weight of 30,000 pounds and upward. The number of this type of motor vehicles or so-called 'big trucks', while increasing yearly, at present constitutes only 1% of all vehicles using the public highways. The case under consideration is limited to that group.
The trucking industry in the meantime had not rested on its oars. After the Atterbury-Swayne Report the truckers banded together in a national organization, known as the American Trucking Association, and State Trucking Associations, similar to PMTA, were organized in every state. These associations became very active in their respective states, lobbying for increased weight limits so as to permit the carrying of greater 'pay loads'. In general, their activities resulted in success in raising the minimum weight limits and permitting the carrying of heavy loads. In Pennsylvania the weight limit as of 1941 was 18,000 pounds for axle loads. In 1943, as a temporary war measure, they sought and obtained a limit of 20,000 pounds per axle load. In 1945 by Act of the Pennsylvania Legislature 75 P.S. § 453 the temporary war measure became a permanent measure and remained as the axle load limit throughout the period involved in the present proceeding. Again in 1947 and 1949 the truckers sought an increase of weight limits in Pennsylvania, which limitations were actively opposed by the association of railroads as well as several other organizations to be discussed later. The bills were never passed by the Legislature. During this period many unscrupulous truckers violated the weight limits rather consistently on the theory that it was cheaper to pay the nominal fine of $ 50 for overloading than to keep the weight of the truck at legal limits; the excess load paying far greater dividends than the charges in the nature of fines for overloading. It was in this setting that the activities hereafter related occurred.
As aforesaid, the use of long-haul trucks for interstate hauling of freight had increased so enormously by May of 1949 that it was a matter a immediate and vital self-interest to the railroads to do something about the erosion of what had been up to this time almost an exclusive monopoly of long-haul freight transportation. At first blush, to the ordinary person it would appear that the primary concern of the railroads might have been directed to improving service and to attempt to meet by more flexibility and speedy delivery the growing competition of the truckers. The evidence in this case has disclosed there were certain areas wherein the trucks could not compete. It was testified that the trucks could not compete with the railroads in taking the coal out of the mountains of West Virginia since one diesel engine could take a great number of cars on the downgrade of the West Virginia mines to the Norfolk breakwater. That the railroads would continue to enjoy this type of business was completely self-evident. On the other hand, the greater flexibility of the truck and the speedier delivery of goods were elements in the competitive market which the railroads might themselves have attempted to meet by the use of trucks or otherwise. The door-to-door feature of truck delivery was also important. However, the record in this case is barren of any attempt on the part of the railroads to adjust their thinking and their actions to meet this definite threat to a segment of business theretofore enjoyed by them. They engaged in what has been termed throughout the trial of this case as a 'concert of action' to 'improve their position' in the longhaul freight competitive market. And here in how they did it.
In May of 1949 the evidence discloses that the top executives of the Pennsylvania Railroad, before attending the May 19, 1949 meeting of the Conference, were considering a campaign for Federal and State taxes against users of highways, waterways, etc. The recommendation which came out of this consideration was that they should explore the possibility of organizing private motorists and other groups to be held out to the public as completely nonrailroad inspired for the sole purpose of restricting the truckers by making their operations so expensive that they could not operate at a profit. The obvious corollary is that the railroads would be the beneficiaries of these restrictions. On May 198 1949, at a meeting of the Conference, there was appointed a Competitive Transportation Committee with Subcommittees designated Legal, Research, and Public Relations. David I Mackie, then vice-president of the Delaware & Lackawanna Railroad, was made Chairman of the Legal Committee. Raymond J. Littlefield, tax agent and later general agent of the Pennsylvania Railroad, was made Chairman of the Research Committee. Thomas J. Deegan, Jr., then executive vice-president of the Chesapeake & Ohio Railroad, later staff vice-president of the Allegheny Corporation, operators of the New York Central Lines, was made Chairman of the very important Public Relations Subcommittee. While these three subcommittees maintained an effective liaison, the most active and most potent of the committees was the Committee on Public Relations. Deegan and his subcommittee determined on a plan of operation. The single objective of the campaign was harassment of the long-haul truckers. One of the objectives was the enactment of legislation, not under the sponsorship of the railroads but the others acting on their behalf, by what was called in inoffensive and pleasing language, 'The third-party technique'.
The campaign was to begin in New York, New Jersey and Ohio, and other states were to be brought in later as the program developed, consistent with the degree of success of the program. It was also determined that the campaign should be handled through an independent public relations firm. A number of public relations firms were interviewed and of the four or five selected for interview, all were leaders in that particular field. It may be noted in passing that of those interviewed and who submitted proposals, about which proposals testimony was given at the trial, each and every one of the suggested programs provided for a campaign of publicity to put the truckers in a bad light with the public; to encourage normal public resentment of the motoring public to the operation of big trucks on the highways; to secure the assistance of organizations which were apparently 'independent and public spirited' in the campaign against the truckers, and to create a demand for legislation penalizing the truckers either by limitation of size and weight or the imposition of user taxes which would make their operation unprofitable.
A presentation was made by the defendant-Byoir firm prior to the execution of the contract on August 15, 1949. Byoir's presentation laid great stress on the success of that firm in prior legislative campaigns, particularly its success before the Louisiana Legislature in reducing a tax on sulphur; in the Spring of 1938 before the New York Legislature in opposing a chain store tax; in connection with A & P activities which will be discussed later in the opinion; in 1948 before the Congress of the United States in connection with the distilling industry, and finally in connection with the manufacturers of floor and wall tile with regard to building code changes which Byoir claimed his firm had secured for that industry in some two thousand cities. After the contract was awarded a memorandum of agreement was executed providing for payment to Byoir of $ 75,000 a year, plus reimbursement of each and every expense of any sort involved in the campaign. Byoir immediately organized a staff to put the program into effect and execution. The understanding of the Byoir organization as to its duties in connection with the campaign, set forth in extenso in Exhibit P5, is entitled 'The Objectives'.
While the ultimate objective is shrewdly set forth as legislation affecting the truckers, the intermediate goals are also set forth, all designed and aimed at injury to the truckers. These objectives, including the crystallization of motorist resentment arising from commercial heavy truck operations over the roads, were designed to arouse the public generally of the need to obtain new methods of financing public highways and by methods which would not appear to emanate from railroad sources. The total objectives were ostensibly set forth in a memorandum to the Department Heads of Byoir by Reynolds Girdler, Account Executive of the ERPC Account, dated September 13, 1949, in which he paraphrased the National Transportation Policy of Congress to suit his own needs, interpreting it for the purposes of the campaign as a National Legislative Policy and that (1) airlines should be used for speed; (2) trucks for short hauls and (3) only railroads for long hauls. He pointed out that if this program could be made effective through public relations the railroads' financial troubles would be at an end. He also pointed out that 'our' newspaper stories, magazine articles, pictures and radio programs will be concerned with what the national transportation policy should be, dramatizing highways and heavy trucks in the following particulars: (1) highway construction costs; (2) highway safety and the part trucks play in lack of safety on the highways; (3) highway damages by trucks; (4) state revenue and expenditures; (5) general taxation stories; all geared to reflect discredit upon the heavy truck industry and all to be done without attribution to the railroads. The magazine department of Byoir was directed to 'plant' stories in magazines for later use in the campaign as authoritative sources of factual information. More will be said of this later in the opinion.
It was estimated that the cost for the first year would exceed $ 350,000. Girdler's memorandum was circulated to the railroads and rather glowing commendations were received from several of the committee members involved, particularly from Walter Franklin, President of the Pennsylvania Railroad; Raymond J. Littlefield, who has been introduced above; and Walter Touhy, President of the Chesapeake and Ohio Railroad, Chairman of the Competitive Transportation Committee; as well as others.
While it would be very interesting to outline the Byoir campaign over the period 1949 to 1953, the details of which were testified to by the many witnesses called in this proceeding, it would unduly prolong this opinion and such an outline of details is unnecessary for a complete understanding of the case. Therefore, the campaign as inaugurated and carried out by Byoir and the Committee on Competitive Transportation of the Conference and its total effectiveness will be only briefly outlined under activities embracing: (1) The State of New Jersey; (2) The State of New York; (3) The State of Ohio; (4) Magazine Activities; (5) Road Test One -- Maryland and its connotations; (6) The State of Pennsylvania; and (7) The Campaign of Vilification.
While the program was geared for operation throughout the 17 states in the northeastern part of the United States, the Committee on Competitive Transportation determined to center its efforts in three states -- New York, New Jersey and Ohio. At the outset, one C. Coleburn Hardy was selected as the Byoir representative to inaugurate the New Jersey campaign. Hardy had for many years been in the public relations business and had served several terms as a New Jersey Legislator. Liaison was effected with the President of the Associated Railroads of New Jersey, one Blackson, and his assistant, one Simpson, with David I. Mackie, vice-president and general counsel of the Delaware & Lackawanna Railroad; one Pevler, vice-president of the Pennsylvania Railroad, and one Viviano, general counsel for the Lehigh Valley Railroad. It was determined to reactivate an organization known as the New Jersey Automobile Owners, Inc. of which one Stelljes was executive vice-president, and one Fred Fox, secretary. Its offices actually were in the Byoir organization headquarters at 10 E. 40th Street, New York City, New York, with a mailing address from a small apartment in an apartment house in East Orange, New Jersey. In addition there was organized a new group, the New Jersey Citizens Tax Study Foundation, an organization whose dominant member was Hardy, its secretary.
The general purposes of the campaign were: (1) to stir up as much resentment against the trucking industry as was possible among highway users, with special emphasis upon the motorists, farmers and local truckers; (2) the lowering of truck weights and the increase in truck fees; (3) a weight-distance tax whereby users of New Jersey roads would be charged a mileage fee based upon weight carried and distance traveled on the highways of New Jersey. Hardy with his knowledge of New Jersey politics was in a key position to be extremely effective in such a campaign. He had the help of Blackson, David I. Mackie, above mentioned, who was no stranger to legislative halls, and the research facilities of the Eastern Railroad Transportation Committee headed by Raymond J. Littlefield. Macwithey, president; R. J. Stelljes, vice-president, and Robert Fox, secretary, of the New Jersey Automobile Owners, Inc., were all avid publicity seekers who lost no opportunity to make speeches, give press releases of the speeches and demand of the legislative restrictions on the trucking industry. In this they were ably assisted by Hardy who paid all of their expenses, wrote practically all of the speeches, sent out thousands of publicity releases, prepared and printed in New York but mailed in New Jersey by a representative of Byoir. Copies of each release, however, were sent to the three officers in order that they be kept currently informed of Byoir's activities on their apparent behalf. Not one word of the railroads' part in the picture ever seeped through to the objects of their consideration -- the long-haul truckers.
Another suggestion which was made part of the campaign was to create by grass-root methods, through editors of weekly papers, The Grange and other organizations, a demand for more highway funds. The object of this was clearly to point up increasing costs of road building and maintenance, and after having created the demand to suggest and then campaign for the weight-distance tax. The organization of the New Jersey Citizens Tax Study Foundation in this posture of the campaign began to pay dividends. One Fred K. Goodwin was the Executive Director and he was paid by Byoir and worked very closely with Hardy. A questionnaire was prepared and circulated to obtain 'independent public reactions' to possible sources to tax money. The questionnaire was so devised with the help of the Byoir organization to make certain that a weight-distance tax would be the least painful choice to the general public. With that as a statistic and from an apparently independent authoritative source, Byoir was able to step up among editors, writers and other media of communications the clamor for a weight-distance tax. It must also be remembered that all during this time a campaign of vilification against the trucking industry generally was going forward, the outline of which campaign will be later referred to in this opinion.
In connection with the campaign to persuade editors to take an antitruck position, Byoir through Hardy subsidized an apparently independent journalist who distributed a column of political news to the editors of weekly newspapers in New Jersey. Byoir provided complete coverage during the legislative season of eight weeks for all of the weekly newspapers of New Jersey, at no charge. Needless to say the columns so syndicated did nothing to advance the cause of the trucking industry and the columnist was well compensated by Byoir for his efforts on behalf of the railroads, whose connection with the activity was carefully concealed not only from the public but from the editors who used his material.
Representations were made to the then Governor of New Jersey, Alfred E. Driscoll, on behalf of the New Jersey Automobile Owners, Inc., protesting against a rise in the regular gasoline taxes; a rise conceived in the mind of Byoir and one which this record fails to disclose had ever been proposed by any responsible organization. The purpose of this, of course, was to again deliver a broadside against the trucking industry and to urge the imposition of a weight-distance tax against it. Hardy himself together with Stelljes traveled the length and breadth of New Jersey speaking before civic organizations, such as, Lion, Rotary and Kiwanis Clubs, and not one of the thousands of the businessmen of New Jersey who heard these speeches and violent denunciations of the trucking industry had the faintest conception that the ERPC was paying for the very gasoline that brought the speaker to the door of the meeting hall. All in all Hardy and his railroad friends were eminently successful in their attempt to arouse the people of New Jersey to strike out at the trucking industry through the method of weight limitations and higher fees, and that work was not done to help the railroads but to injure the truckers. There was nothing of a constructive nature done by Hardy at any time to obtain better public relations for the railroads nor to secure any legislation favorable to the railroads. The truckers throughout remained the target of this subterranean campaign to place them in a light with the public which was anything but favorable and wholesome.
When Byoir undertook to represent the railroads in the summer of 1949, it found in New York State that the railroads had already enlisted the aid of many civic organizations and were themselves utilizing the 'third-party technique'. Outstanding were two organizations: The Citizens Tax League of Rochester, New York, whose secretary A. J. Menzie apparently delighted in public controversy, and The Citizens Public Expenditure Survey, Inc., an independent public-spirited organization originally formed for the purpose of scrutinizing the budgets of all governmental political divisions and subdivisions from the state itself to the smallest municipality.
Through agricultural agents employed by them the railroads had been able to enlist the sympathetic cooperation of many prominent Grange members to present their viewpoint against the truckers to the public. But they were in need of statistics to bolster their contentions and it was important that any review come from an apparently independent source. They decided that should a survey of highway users and the revenue derived from them for road construction and maintenance be sponsored by the railroads it would be of little, if any, value. Therefore, it was determined to have such a survey made by an independent source. Griffinhagen & Associates, consultants in public administration and finance, with offices in Chicago, New York, Boston and Los Angeles, were chosen to make the survey. The sponsor was The Citizens Public Expenditure Survey, Inc. This survey which was completed and documented in February of 1950 again had no apparent railroad relation and seemingly was what it purported to be, a completely objective independent analysis of the highways and highway use and revenue conditions in the State of New York. To put it in its proper perspective, however, the evidence in this case discloses that during the years 1951, 1952 and 1953, substantial 'subscriptions' in uneven amounts were made to the Citizens Public Expenditure Survey, Inc. by the Pennsylvania Railroad. The evidence also discloses that Mr. Littlefield, after the passage of the weight-distance tax bill on trucks in New York, sought a vote of thanks for Mr. Dugan of the New York Central for his efforts in bringing Griffinhagen to New York for the survey and the results of the survey. Over and above that, weekly reports of Kiely, Byoir's New York representative for the ERPC, clearly indicates that Kiely directed the activities of both Walter Howe, executive director of Citizens, and one Finke, head of its so-called research department. The closely Knit cooperation of these three individuals was such, together with the 'subscriptions' which appear rather to be 'assessments', that the inference is inescapable, and the Court so finds, that the Railroads paid for the survey and subsidized the activities of Messrs. Howe and Finke.
With the Griffinhagen report as a basis, Kiely toured New York State and 'sold' the railroad story to editors, the 'Mayors Conference, County Supervisors, Chief of Police Associations, Rural Letter Carriers, Members of the Grange, and other organizations. He also worked closely with The Citizens Tax League of Rochester, New York, and used that organization for the dissemination of literature unfavorable to the truckers. Byoir absorbed all of the costs of this distribution and paid the secretary Menzie a substantial fee of several hundred dollars for the so-called research, which the Court finds was for the use of his position. In order to obtain more extensive publicity Byoir formed the Empire State Transport League, a strictly paper organization, with its principal office at a desk in a Public Stenographer's office in Albany, New York. Byoir induced many prominent New Yorkers to lend their names to this paper organization. The amount of antitruck literature and news releases critical of the truckers put out by this organization was prodigious. Of course, it was all at the expense of the railroads without any attribution of responsibility to the railroads.
While there is naturally a scarcity of evidence as to the connection of Byoir with the Legislative Committee of the New York State Senate, which had the weight-distance tax bill before it in the year 1950, it is significant that when Senator Manning, the head of that committee, came up for election in a later year he became extremely resentful of rumors that Byoir had written the Senate report recommending the weight-distance tax and refused to let Byoir relate any further remarks to him. The inference is again inescapable, and the Court so finds, that Byoir's representatives were working in close contact with his office during the pendency of this particular piece of legislation and were responsible for many of the news releases which came out under his authorship.
As in the case of Stull in Ohio, who will be later discussed, and Hardy with Pevler and Mackie in New Jersey, Kiely did a magnificent job of grass-root selling. He persuaded the Rural Letter Carriers, the Grange, and the Mayors Conference to adopt resolutions at their state conventions, several of which were actually written by him, denouncing the truckers and urging strict enforcement of the weight-distance tax. Under the letterhead of the Empire State Transportation League he urged the Sheriffs of every county of the state to enforce the strict penal provisions of the weight-distance tax, particularly with regard to overloading. He sought out legislators, particularly members of the Highway Committee, and solicited the introduction of and urged the passage of an act giving local communities, through their local police organizations, the right to arrest the drivers of overladen trucks and impound the trucks if necessary. The bait held out was that local communities could profit from the high penalties set forth in the weight-distance tax law for overloading. He worked also with his friends in the Grange, in the Mayors Conference, and in other organizations to put pressure upon the political leaders to see that the Legislative Committees were composed of legislators favorable to the railroad point of view.
In addition to the Griffinhagen report, the Byoir organization was able to obtain further statistics against the heavy trucks by so-called public opinion polls. The media for obtaining this information was Fact Finders, Inc. and the Princeton Polls, the latter headed by Dr. Robert Sly, head of the New Jersey Tax Study Commission. The questions were framed in the light of a demand carefully nurtured by Byoir, through the Grange, the Mayors Conference and others, to obtain a greater allotment of state funds for local community roads. While very astutely, and apparently innocently worded, the bold import of the questions presented to individual persons ran substantially as follows: Since more money must be obtained for roads, do you prefer: (1) increase in passenger car registration fees; (2) increase in the motor fuel tax; (3) increase in the charges made for the use of the highways by the heavy trucks? It would certainly be less than human if an overwhelming majority of the people approached would not vote for the third proposition, to wit: tax the truckers. These public opinion polls at the cost of many thousands of dollars were inaugurated by and subsidized by Byoir on behalf of and at the expense of the railroads. The results of these polls received the widest publicity that Byoir could give them both on the metropolitan level of all the larger cities of the State of New York, in National magazines, where possible, and with particular emphasis on the country weekly newspapers. In that regard it might also be noted that Kiely was also able to obtain the cooperation of a few editors of weekly newspapers who printed strong editorials against the truckers.
In this posture of the case it might be well be also note that much of the success of Kiely and the others in 'planting' these ideas with editors was due to the fact that apparently independent writers of recognized stature had written articles about the damage that truckers did to roads. As will be related hereafter under the headings 'Magazine Activities' and 'Campaign of Vilification', these articles in outstanding magazines of national circulation, the names of which will also be hereafter related, were based almost exclusively on data furnished by Byoir and written or edited by Byoir before appearing in these magazines.
To keep the case in proper perspective we must recognize that Kiely, Stull, Hardy, et al., were on the payroll of the ERPC through Byoir; that their entire salaries and expenses were reimbursed by ERPC to Byoir; that their job was to create public dissatisfaction with the truckers, arouse animosity against the truckers, and all to the final purpose that the railroads might at the least limit the activities of the truckers in the longhaul industry or if completely successful destroy them as a competitive factor with the railroads. Bluntly stated, all were working to accomplish injury to a business competitor within the prohibition of the Sherman and Clayton Antitrust Acts.
The results of Byoir's work in New York in conjunction with Messrs. Little-field and Deegan were extremely gratifying to the Research Subcommittee of the ERPC. In its report dated June 20, 1951 to Mr. Walter Tuohy, Chairman of the Special Transportation Committee, the following pertinent language is found:
'7. Research Committee has acted more or less as liaison between State Railroad Associations and the Carl Byoir group. In June, 1949, the Policy Committee named the states of New Jersey, New York and Ohio as trial states. The Carl Byoir group, under the direction of Mr. Girdler, placed the facts before state administrations and otherwise gave the states a vast amount of help, resulting in favorable truck legislation in New Jersey and New York.
'8. The Mileage Tax Bill, which passed the New York legislature in April of this year, was of outstanding importance. This is the first state east of the Mississippi to put a substantial mileage tax on trucks. Other states are watching this development. The New York authorities advise that they expect to build 50 weighing stations scattered throughout the State.
'9. After the New York Bill passed, the Carl Byoir people concentrated on Ohio. A Bill was passed increasing truck license fees about 30%. There is much more to be accomplished and the campaign will be resumed at the next session of the legislature.
'10. The first of June, the railroads of Pennsylvania unanimously requested the help of the Carl Byoir people, and a man has been assigned.'
The State of Ohio posed one peculiar problem to the Byoir organization. Representing the Goodrich Tire & Rubber Company, which of course was vitally interested in automotive equipment and the sale of tires, Byoir found itself in the predicament of representing opposing interests. Nevertheless, following the pattern of New Jersey, Byoir threw the weight of its organization behind Donald Stull, who had charge of the Ohio activities. The success of Stull in Ohio in advancing the interests of the Byoir-ERPC plan was little less than phenomenal. T. J. Kauer was Director of the Ohio Department of Highways; Harold Cohen was the Chief of the Bureau of Public Relations for the Ohio Department of Highways. Kauer was also Chairman of the Interregional Council on Highway Transportation which had charge of the Maryland Road Test. Stull had complete access to their offices and worked closely with them. He also, through Kauer, apparently had entree to the office of Governor Lausche. Building up a grass-root campaign against the truckers through the use of 'independent factual data' obtained from sources apparently independent but based completely on Byoir material, he was successful in creating a wave of indignation towards the truckers which resulted in an increase of fees to the truckers in 1951 of approximately 30%. Again, through Kauer, he was able to 'educate' the members of the Ohio Legislative Highway Investigating Committee. In 1952, according to a Byoir report, Stull had done such 'an efficient job of education' that there arose a public demand for taxation on heavy trucks.
There was also a gubernatorial campaign in Ohio that year. Charles Taft, the Republican candidate, adopted the proposition that trucks should pay higher taxes 'based on weight carried and miles traveled'. Stull reported to Byoir that up to three weeks before Election Day, Lausche, the incumbent, had planned to campaign solely on his record and was backing away from the ton-mile tax as a too-familiar story and one already chosen by his opponent. What he needed, he told his aides, was 'a dramatic story that could be told over TV'. That was all Stull needed (according to Byoir). Using newspaper clips, editorials, magazine articles, etc., which as will be demonstrated later were practically all Byoir-inspired and paid for by ERPC, Stull demonstrated the apparent widespread public interest in the ton-mile tax. He also had available a Harper magazine article by Senator Neuberger of Oregon entitled, 'Who Shall Pay For Our Roads?', for the writing of which Byoir 'research' had been made available, and which will be referred to in detail under the heading 'Magazine Activities'. Lausche campaigned just fifteen days. According to reports found in Byoir's files, in all but one speech he talked only the ton-mile tax; in every TV program he centered attention on truck taxation; waving copies of the Harper magazine article before the camera; pointing to placards showing the justice of heavy taxes on trucks; displaying Public Utility Commission records of violations by explosive-hauling truckers (the results of a Byoir-inspired investigation) and repeating the results of the Maryland Road Test (a distorted Byoir interpretation) to prove how badly big trucks damage highways. Again, according to Byoir, the data and, in many cases, the words and props were supplied by Stull. The Cleveland Plain Dealer stated categorically 'Lausche's astonishing victory, against the political tide, can be construed as an endorsement of his highway program'. Stull did his job so well that the truckers were forced to abandon their early charges that the 'bills were railroad inspired' -- which they were.
In addition and as part of his program Stull introduced into Ohio the 'Save Our Highways, Club'. This was an organization founded by railroad employees in Tennessee and its entry into Ohio was completely financed by Byoir for which it was reimbursed by the railroads. Literature in profusion was mailed to legislators, granges, farmers' organizations and automobile clubs. All of it was critical of the trucking industry. All of it was calculated to and did bring the trucking industry into public disrepute. Again, a magnificent job was accomplished in keeping any information as to the true position of the railroads in this campaign from the general public. The rise in fees and the campaign for the weight-distance tax in Ohio were two of the outstanding accomplishments of Byoir for the railroads in the entire campaign.
Two other aspects of the Byoir-Stull campaign are worthy of mention. The records of the Byoir organization introduced in this case demonstrate clearly that copies of Governor Lausche's correspondence with protesting truckers were in the hands of Byoir before the correspondence even reached the United States mails, and to quote Stull, it 'contained our poison'. This again points out that Kauer and Cohen were working diligently for the interests of the railroads.
While defendants have vigorously argued that the term 'poison' was nothing but public relations jargon, I find that Stull meant exactly what he said and in the ordinary context of the words used. It is clearly apparent that the political campaign against the truckers was based on slanted statistics created by Byoir for the railroads and that most of the data used in the speeches, if not the speeches themselves on both sides, Republican and Democratic, stemmed directly from the Byoir organization. While the trucking industry and its members were intellectually certain that this apparent grass root uprising against the industry was definitely railroad inspired, so well did Stull and Byoir work that it was impossible to document and prove it. The net result was that the trucking industry faced a hostile public opinion in Ohio because of the method of distortion and over-emphasis of the admitted shortcomings of the industry on the part of Byoir. This statement will be amplified in the heading 'Vilification Campaign'.
One of the most unusual of Byoir's employees, the head of the Magazine Department, was Patricia Lochridge Hartwell. Mrs. Hartwell, whose professional name while she was with Byoir was Patricia Lochridge, joined the Byoir organization in November of 1949 and was assigned to the ERPC account. She thereupon set out to develop magazine articles which would portray the railroads' point of view and would be unfavorable to the trucking interests. Her method of operation was to interest an editor of a magazine in a story and if the editor thought it had sufficient merit he might assign one of his staff writers or editors to do the piece. In that event Mas. Hartwell would furnish the writer with the data which Byoir had compiled, which data of course was always slanted against the truckers. She also made use of freelance writers. She would interest them in a particular story and pay them while they researched the proposed story at Byoir's or at other places, which amounts in many instances ran into several hundreds of dollars. Since the ultimate aim was to hurt the truckers, any such payments were reimbursed by the railroads, and should the free-lance writer be able to sell the article to a magazine the entire fee went to the writer. In other words, Byoir paid the writer during the preparation of the article and the magazine paid him for writing it. In the extremely limited number of instances that a writer contemplated an article which would be favorable to the railroads' point of view with respect to the truckers, Byoir extended every facility it possessed for use of the writer and at no cost to the writer.
The worth of such a project in the attainment of the ERPR goal cannot be minimized. In addition to the ordinary extensive circulation which the magazines themselves possessed, it was possible, at railroad expense, to circulate reprints of the articles widely to civic organizations, state, city and government officials, as well as to legislators and other individuals who were concerned with public opinion. While it is true that her efforts in every case did not meet with complete success, she was successful in having enough magazine articles released to make an important contribution to the railroads' antitruck campaign. Without attempting to individuate the details of each article, it will be sufficient to recount some of the articles published and Byoir's connection with them.
Early in 1950 Mrs. Hartwell presented an outline of a story about truck damage to roads to the editor of Harper's magazine. This outline was very extensive and Harpers evinced interest in it. Thereafter Mrs. Hartwell contacted Myron Stearn, an independent free-lance writer, interested him in the story, furnished him with all the Byoir data on the trucks, and the completed product appeared in the September, 1950 issue of Harper's magazine under the caption, 'Our Roads Are Going To Pot'. At approximately the same time an article entitled, 'The Rape Of Our Roads', by Frederick Brownell, a Byoir protege, appeared in the Reader's Digest. This article was condensed from a Buffalo Evening News story. These two articles became the first authoritative sources of so-called independent public attacks upon the trucking industry.
Through the good efforts of Clinton Johnson, Director of Publicity for the Maryland Roads Commission, and a close associate of the Byoir organization, David G. Wittels, an outstanding writer for the Saturday Evening Post, in the September 16, 1950 issue of that magazine wrote a very critical article entitled, 'Are Trucks Destroying Our Highways?' Byoir furnished extensive national research in a five thousand word background memorandum to round out his story on the Maryland State Highway Commission Program. It was the same Clinton Johnson who persuaded Mr. Wittels to go to Maryland and actually research the story in the field; live with the highway crew, meet the highway commissioner, and find out what the problems were for himself. While the article justifiably was critical of a certain class of truckers, it must be realized that the initiative for the article stemmed from railroad-inspired sources and portrayed a particularly venal type of trucker as representative of the entire trucking industry. The distortion, however, was so skillfully done and so subtly written as to make a profound impression upon a casual reader of the article. Again, it is a variation of third-party technique approach, which technique in its application to this case will receive further attention.
Hardy Burke, 'a sometime employee of Byoir' and a sometime independent freelance writer, wrote an article in the April, 1952 issue of the National Grange Monthly entitled, 'History, Trucks and Money'. This article was actually authored by a Byoir ghost writer, James Miller, and according to Mrs. Hartwell 'skillfully developed all the major points in the ERPC campaign'. This article, which pictorially highlighted the collapse of a bridge due to an overladen truck attempting to escape a weighing station on a main highway and the destruction of a detour on a main highway over a country road, was skillfully designed to arouse the farmers in opposition to the trucks.
Again, in the August, 1951, Sunday issue of Parade magazine, which is a supplement to hundreds of Sunday newspapers throughout the country, Clinton Johnson assisted Byoir in obtaining the insert of an article entitled, 'Trucks: Help or Headache?'. This article completely critical of trucks contained the words and pictures of the Byoir organization.
In the July 30, 1952 issue of People magazine appeared an article entitled, 'Trucks Wreck Your Roads'. This article again critical of the trucking industry was not only 'planted' by Byoir but extensive circulation of reprints was made with the article appearing as the lead article on the cover of the reprint whereas the original magazine cover contained no such reference.
For some seventeen years one Fred O. Bailey had served as reported and farm editor of the United Press Association. During the years 1945, 1946 and 1947 he had served as Legislative Counsel of the National Grange. Subsequent to 1947 he served a number of national magazines in the farm field as a reporter and columnist. According to the testimony of David I. Mackie, one of those magazines served was the Country Gentleman. During the year 1951 Bailey had discussed the formation of a Farm Roads Foundation but nothing came of it during that year. However, the general idea of such a Foundation was to cooperate with and assist farm organizations and farm groups in planning for an adequate balanced roads program to serve their needs. The first and only function of the Farm Roads Foundation up until May of 1953, the date of Mr. Bailey's deposition in this case, was the distribution of a film, 'Highways and Byways, U.S.A.', based upon the story in the Country Gentleman magazine, 'You Can Have Better Roads'. The evidence in tis case discloses beyond peradventure of doubt that the moving force in the making of this film was the Western Association of Railroads. Bailey was approached by representatives of that association and offered an outright grant of a picture for distribution. It was not until this offer had been made that the Farm Roads Foundation was incorporated and came into being. The evidence is also crystal clear that Byoir, in conjunction with representatives of the Western Railroads Association, had been working on a script for this picture. In fact, Byoir edited the script. Dudley Pictures of Hollywood were commissioned by the association of railroads to make the picture and the cost of making the picture was divided between the Eastern, Western and Southern railroads on a basis of 18% to the Southern railroads and 41% each to the Eastern and Western railroads. The assessment to the Eastern railroads was $ 62,500. Based on the above percentages of assessment it would appear, therefore, that the cost of the film to the three railroad associations exceeded $ 150,000. This film, the cost of the public distribution of which (and it was most extensive) has always been borne through a grant by the railroads, was exhibited at the trial of this case and the film and a transcript thereof have been filed of record. The film is professionally and skillfully done. It demonstrates clearly the needs of the farmers for auxiliary roads and suggests united, combined, intelligent community efforts to obtain the necessary funds to bring about this very desirable result. The lasting impression, however, created by the picture is contained in a very few sentences of the dialogue and as the picture concludes; the lasting impact of the film is that big trucks do not pay their fair share of highway construction and maintenance. While extremely expensive it constituted a very important piece of propaganda carrying a terrific impact upon its viewers. Mr. Bailey whose cooperation had been sought in the editing of the script was completely unaware of the very important role played by Byoir. He had no idea of the cost of the film nor of the cost of distribution which was borne by the railroads. Two distribution companies were employed to distribute the film through their regular agencies to farm groups and other interested parties. It was distributed free of charge for showing in regular moving picture houses. 186 Colored prints were made in 16 millimeter size and 10 black and white 16 millimeter size copies were made for showing on TV. The testimony indicates that considerable use was made of the film on TV. Four 35 millimeter copies were made for showing in regular motion picture theatres. To a viewer of the picture it would appear that the sponsors were the Country Gentleman and the Farm Roads Foundation. No suggestion either in the title, dialogue or screen credits indicated the connection of the railroads with this film. Viewed as it was by millions, the effect was most certainly to build up prejudice in the public mind against the trucking industry.
The final article which appeared shortly before the institution of this suit was an article, 'Who Shall Pay for Our Roads', by The Honorable Richard L. Neuberger, United States Senator from the State of Oregon, Mr. Neuberger before entering politics was a capable newspaperman and writer. He was also a Legislator in Oregon when the first weight-distance tax on heavy trucks was passed in that state. It would follow naturally that he should be an expert in that field. Hearing that Harper's magazine had discussed the writing of an article in connection with highway financing with the Senator, Mrs. Hartwell telephoned him at his home and discussed the article with him. She suggested that Byoir had splendid material on the national picture and suggested that such material might be useful to him in his article. As a result of this conversation the Byoir material was mailed to Mr. Neuberger in Oregon where he was working on the article. That he availed himself of the material is clear from a reading of the article. Byoir had been pyramiding data, mostly 'planted' material, for a period of approximately three years and this was the authoritative material submitted to Mr. Neuberger. His article included generally the same 'statistics' as every other article admittedly 'planted' by Byoir. Byoir, of course, took no part in the reviewing or editing of the article but the impact of its 'help' is clearly discernible throughout.
In commenting upon the above magazine articles it is not intended to convey the impression that the above represented the sum total of the Byoir efforts in the magazine field. They cannot and do not reflect the further extensive efforts of Byoir's Magazine Department and its success in putting over the railroads' point of view in other magazines of lesser importance and circulation. They merely outline the importance of the work of the magazine department in this field, since once articles were published they were extensively used by Byoir's representatives in selling their antitruck story to persons concerned with public opinion.
Road Test One -- Maryland
The conference formed itself into the Interregional Council on Highway Transportation and appointed a Committee on Test Roads. This special committee met in Baltimore, Maryland, on January 9 and 10, 1950, to inspect a test-road location proposed by representatives of the Maryland State Roads Commission. After visiting the site of the proposed test road, the committee decided that the project identified as Road Test One -- Maryland was feasible and recommended that tests be conducted at the joint expense of the participating state highway departments and with Highway Research Board direction of the project. The highway departments of the following states: Connecticut, Delaware, Illinois, Kentucky, Maryland, Michigan, New Jersey, Ohio, Pennsylvania, Virginia, Wisconsin and the District of Columbia, executed contracts with the National Academy of Sciences, of which the Highway Research Board was a component part, agreeing to participate financially in the cooperative venture. The project was administered and supervised by the said Highway Research Board through a small Project Executive Committee and an Advisory Committee. The Advisory Committee included one representative from each participating state, the Bureau of Public Roads, the Automobile Manufacturers Association, the Petroleum Industry, the American Trucking Association, and the Department of the Army. The Bureau of Public Roads provided personnel and instruments for measurements of surface roughness, slab strains and deflections caused by the test loads, soil surveys, and other necessary instrumentation and testing services, and also provided the services of the project engineer and three assistants.
The principal object of the test was to determine the relative effects on a particular concrete pavement of four different axle loadings on two vehicle types. The loads employed were 18,000 and 22,400 pounds per single axle, and 32,000 and 44,800 pounds per tandem axle. The tests were conducted on a 1.1-mile section of Portland-cement-concrete pavement constructed in 1941 on U.S. 301 approximately 9 miles south of La Plata, Maryland. The pavement consisted of two 12-ft. lanes, each having a 9-7-9-in. cross-section and reinforced with wire mesh. The road at the beginning of the test was in fairly good condition and insofar as the records of the Maryland Road Commission could determine the entire length of the test site was constructed on good granular subbase material.
There were four separate test sections. The first, which was the west lane of the southern half mile of the pavement under test, was subject to 18,000 lbs. single axle load; the second, which was the east lane of the southern half mile, was subject to 22,400 lbs. single axle load; the third, which was the west lane of the northern 0.6 mile, was subject to 32,000 lbs. tandem axle load; and the fourth, which was the east lane of the northern 0.6 mile, was subject to 44,800 lbs. tandem axle load.
The test truck operations began on June 12, 1950, for Sections 1 and 2, single axle loads, and the tandem heavier trucks on the eastern end began operation on June 23, 1950. Operations of all test trucks were continuous, on a 24-hour day, seven-day week basis, except when necessary to interrupt operations for vehicle and pavement maintenance and service, meals and rest stops for drivers, and special tests, such as strain and deflections. In addition, operations were suspended for 24 hours for three holidays during 1950: July 4, Labor Day and Thanksgiving Day. The drivers worked three 8-hour shifts and were allowed a 10-minute rest period each hour and 30 minutes for a meal in the middle of the shift. The 18,000-lb. axle load totaled 111,889 miles; the 22,400-lb. axle load totaled 111,792 miles; the 32,000-lb. tandem axle load totaled 106,668 miles; and the 44,800-lb. tandem axle load totaled 59,256 miles due to cessation of operations during the month of November occasioned by excessive damage to that part of the test highway.
This was to be, and was insofar as the Highway Research Board was concerned, a completely objective test. Mr. Herbert S. Fairbanks, Deputy Commissioner of the Bureau of Public Roads and Chairman of the Highway Research Board, estimated in his testimony in this case that the stress placed on the road during the pendency of this test would approximate 40 years of normal usage of the same road. Contrary to the general understanding of the content of the subsoil of the road, it became very evident as the test progressed that certain portions of the road, particularly that over which the heavier trucks ran, had a subgrade which consisted in great part of fine grain soil. When water permeated the fine grain soil the deflection caused by the weight of the trucks would push the water and solid matter from the subbase of the road and eventually this would create a hole or pocket under the road. The weight of the truck would then crack the concrete immediately over the hole or pocket. The water which would lodge in these pockets or holes would be 'pumped' up through the expansion joints of the road. While test procedures might have allowed normal maintenance of the roads, such as filling in and reinforcing these cavities under the road, deliberately and in the interest of scientific knowledge minimal maintenance was indulged in throughout the entire period of the test. Naturally this resulted in much faster deterioration than would be the case had normal maintenance been carried out.
It will be recognized that the impetus for this test came from Governor Lausche of Ohio. His Director of the Ohio Department of Highways, T. J. Kauer, Chairman of the Interregional Council on Highway Transportation, as such, had extremely close contacts with all features of the test. It will also be recalled that Harold Cohen, Chief of Public Relations of the Ohio Department of Highways, was a very close associate of Stull, Byoir's representative in Ohio. The purpose of this test was a scientific determination of what a road of this character could carry safely. The distortion of this aim and purpose, and the peculiar conduct of Messrs. Kauer, Cohen and Clinton Johnson, Director of Publicity for the Maryland Roads Commission, makes an interesting chapter in the Byoir-railroad antitruck campaign. It was the purpose of Byoir to obtain as early as possible any information from this test which would support their theory that the gross weight of the truck (whereas the test was an examination of the effects of axle-load weights) was alone responsible for breaking up roads. With this in mind close liaison was kept with Kauer, Cohen and Johnson. The records of the Byoir organization show that Johnson during the course of this test was a frequent visitor at the Byoir offices in New York and that the expense of his visits were borne by Byoir and reimbursed by the railroads. There also appear in the evidence many vouchers which indicate that the railroads reimbursed Byoir for entertainment of Johnson and his wife. Ultimately he became an employee of the ERPC, receiving $ 1,000 per month plus expenses from December of 1952 through September of 1953. A further inference may be drawn from the fact that in an undated memorandum (P-121) from Hardy, Byoir's New Jersey and Pennsylvania agent, to Mr. Deegan, Hardy noted that in checking over the agenda of an ERPC meeting it occurred to him that Deegan might not want to discuss Johnson at the open meeting. He further mentioned that he talked to Littlefield about this and that he was interested in Deegan's idea. Hardy's explanation that the reason they might not want to discuss Johnson at the open meeting was because it was a mere matter of slight detail does not satisfy the Court. (R. 745.) While out-and-out bribery of Mr. Johnson has not been proven by a preponderance of evidence, the Court is satisfied that the plaintiffs have proved that Mr. Johnson because of the above-mentioned factors was not an objective public employee, but rather was working for the interests of the railroads in order to further his own personal goal of obtaining a lucrative position with the ERPC.
There is no doubt and the record abundantly proves that Byoir actually did get information about the test as it progressed. It was the purpose of Mr. Fairbanks and his associates that no conclusion be published until the full committee had time for a mature consideration of all of the factors involved in the test. From time to time, however, Byoir put out releases which indicated that big trucks, in the sense of gross weights rather than axle loads, were the primary factor in destroying the roads and highways of this country. Byoir even released pictures terming the Maryland Road Test as a 'Crackathon'; pictures which showed the pumping action when heavy trucks ran over joints where the subsoil was of fine grain sand rather than the granular subsurface which withstood the test of all of the weights with remarkable durability. If a 'Crackathon' is a highly technical and scientifically controlled attempt to crowd into a period of several months the effect of roughly four decades of road use in order to determine what factors ultimately result in the break up of roads, Byoir used the proper appellation in describing the Maryland Road Test. But this Court finds that Byoir meant, and the reading public so interpreted it as meaning, that a 'Crackathon' was the result which invariably followed from the use of heavy trucks on concrete roads. In a word -- big trucks are the sole procuring cause of road destruction, rather than the true nature of the test which was to crack the road under controlled conditions.
Mrs. Hartwell likewise entered into this picture. She spent about a week at the site of the test, taking notes and watching the progress of the test, and did her best to get releases which would favor the railroads. She also sent a woman free-lance writer to the scene with instructions to represent herself as an editor of Colliers, which she was not. As such purported editor she was well received by all at the site including representatives of the American Trucking Association and she was accorded every courtesy possible. Her report to Mrs. Hartwell is a masterpiece of the venomous approach which any one connected with Byoir took toward the heavy trucks.
One particular feature of the test and Byoir's approach to it deserves special mention. A running motion picture of the test at selected times was made for the Bureau of Public Roads. At the conclusion of the test and with the approval of Mr. Fairbanks, this motion picture was edited and narrated by a competent Washington, D.C. news commentator. The original so-called 'long version' of the motion picture was shown at the trial of the case and the Court was impressed with the completely objective approach to the problem and the fair comments of the narrator. Viewing the motion picture at the end of one day's session, the Court felt that the picture clearly demonstrated that the most important cause of cracking of concrete highways was the presence of a fine grain silty or clay soil subgrade. One important statement was made in the long version of the film:
The film was in three parts. The first part showed pictures at the actual site with the narrator explaining methods of operation, the purpose, and some of the results. The second part was devoted almost entirely to a precise engineering explanation of the test and its purpose, illustrated by model trucks and drawings. The third part was the conclusion in which the narrator summarized the test, its purpose, and results. It was at this point that Byoir directly entered the scene. One of the Byoir representatives in Washington called upon Mr. Fairbanks and told him that the Byoir organization representing the railroads would like to have a copy of the film for distribution and showing to selected groups. Mr. Fairbanks demurred at the suggestion of Byoir that a shortened version of the film would be adequate to show the purpose and results of the test. Under considerable pressing by Byoir, Mr. Fairbanks said he would consider a shortened version of the film, if it could be demonstrated to him that it did not distort in any way the purpose of the test and the results obtained therefrom. Byoir then suggested that certain portions of the film be shown consisting of the first part of the film and the last part of the narrator's summary. The shortened version of the film was thereafter shown to Mr. Fairbanks and his associates and after one viewing Fairbanks approved the release of the shortened version of the film to Byoir for the railroads. It was only when Mr. Fairbanks received a proposed brochure from Mackie, representing the railroads, which brochure was intended to be sent out with the film, that he realized there might be possible distortion. His statement in a letter dated April 3, 1953 to Mr. Mackie makes that extremely clear:
'However, we do not regard the film as an indictment of large or even heavy trucks per se; and certainly, it would be foreign to our purpose were the film in any way to become an instrument of partisan attack upon highway transportation or the trucking industry.'
In addition, he suggested that the Bureau of Public Roads should not appear as the sponsor of the picture, if such use was intended to be made of it. Mackie thereupon agreed not to distribute it with the brochure and asked permission to exhibit the shortened version of the film already purchased by Byoir on behalf of the railroads. Since Mr. Fairbanks was honestly of the opinion at that time that the film did not distort the purpose and the results of the test he agreed that they might retain the copies and exhibit them.
As stated above, the long version of the film was exhibited on one of the trial days. On the next day the shortened version of the film was exhibited. The profound impact on the Court of the short film was that big trucks per se were the sole cause of damage to the highways. Important language which would have made clear the results of the test, particularly with respect to bad subgrade soil and pumping, were entirely eliminated. The impression left with the Court at the conclusion of the short film disagreed entirely with the sworn statements of Mr. Fairbanks regarding the results of the test. His statements agreed with those made in the long version of the film as previously set forth. That the distortion was intentional as well as effective is clearly evident from an overall reading of this record. Mr. Fairbanks viewed the exhibition of both films in the courtroom. On the basis of his sworn testimony the Court finds that Mr. Fairbanks was fooled by Byoir and tricked into approving a distorted film. This particular episode in the Byoir-railroad antitruck campaign is a classic example of the 'use' of public officials by the Byoir organization in furtherance of its campaign. Such was an everyday occurrence in the Byoir approach to public officials in this case, and I have particular reference to the above situation as well as the 'use' of Governor Lausche and Messrs. Taft, Manning, Dimit and Schmidt; the latter two being referred to under 'Pennsylvania Activities'. On the other hand, any 'use' of individuals such as Clinton Johnson, Menzie, Kauer, Cohen and 'Cappy' Thomson (of Pennsylvania) was with their complete knowledge and for the purpose of advancing their own personal interests rather than those of the public that they represented. These and other instances will be referred to in more detail in other headings of this opinion. It is only fair to Mr. Fairbanks at this point to say that the Court considered him a fine, honorable and dedicated public servant, who in giving permission for the shortened version of the film never contemplated that it would be used for the very purpose which he decried in his letter of April 3, 1953 as 'an instrument of partisan attack upon highway transportation or the trucking industry'.
Needless to say, Byoir made full use of its publicity outlets to tell the world that big trucks crack roads. It was a complete distortion not only of the test but of Mr. Fairbanks' opinion that the road tested could carry gross weights without danger as high as 73,280 pounds (R. 3318).
On or about January 8 of 1951 there was distributed to the members of the Advisory Committee a proposed copy of the findings or in other words the tentative committee report of Road Test One -- Maryland. Kauer's copy was in the hands of Byoir within a remarkably short time after its receipt by him despite the Advisory Board's decision that the data was not to be issued to the general public at that time. Byoir summarized the tentative findings and gave them to News Week, where they appeared as completed studies, although the final report was not approved until May of 1951 and the printed copies not available until sometime after October of 1951 (R. 3322-3326). The results as given to News Week and printed in a box in that magazine completely distorted the purpose and results of the test and attributed all road damage to big trucks, the position taken by Byoir from the outset and entirely false insofar as the objective findings of the test are concerned.
It might be well at this point to set out what the actual conclusions of the officials in charge of the test were as officially reported in Publication 227 of the National Research Council. There were 19 technical findings which are carefully set out in technical engineering language. Briefly stated with respect to the point under discussion in this case that big trucks break roads, they are as follows: (1) That where the road was built on granular soil very little damage occurred no matter what type of vehicle was used; (2) That where the test road was built on fine grain soil, there was no damage until the fine grain soil became permeated with water; (3) That in the presence of water, the subsoil was pumped from under the concrete slab through joints in the road; (4) That the degree of pumping was faster and the amount greater upon the application of the heavier vehicles; (5) That with the subsoil removed the concrete would and did crack, with the heavier vehicles doing the greater and quicker damage.
As publicized by Byoir, both in its releases and in the shortened version of the film, one conclusion was bound to be reached by the ordinary observer from the reading of the releases or viewing of the short film -- that only big trucks did damage to the highways and that without regard to any other contributing factor.
As stated at the outset of this opinion, after 1943 the attempts of the trucking industry to increase axle loads and gross weights in the legislative sessions of 1945 and 1947 failed. In the 1949 session the then Governor, James A. Duff, ordered the Chairman of the Legislative Committee on Highways not to send any bill to his desk increasing the said weights. With complete administrative support the railroads had no difficulty in controlling the restrictions on trucks and by legally acceptable means.
Pennsylvania had a lower gross weight than all of its surrounding states and the net result was that many of the trucks could not legally carry through Pennsylvania loads which would be legal in other states. One incongruity of that situation ws that at the western end of the state in shipments from steel mills only the first 60 miles of a trip to surrounding states of many hundreds of miles was off limits for a full load. Naturally it created a considerable problem for the truckers engaged in the long-haul steel industry. That the situations was favorable to the railroads was fully recognized and every attempt was made on behalf of the railroads to keep that weight limitation by statute, and of course for the express purpose of helping railroad revenues. Again, this was entirely proper. The situation was such that in 1949 Pennsylvania did not need the services of Byoir. William A. Reiter, Chairman of the Associated Railroads of Pennsylvania, had a good working team operating in Harrisburg. Joab K. Mahood, Secretary of the Grange, together with H. A. Thomson, better known as 'Cappy' Thomson, Secretary of the Pennsylvania State Association of Township Supervisors, worked in close cooperation with Mr. Reiter. However, improper activities were also present. That the Pennsylvania Railroad used the Byoir third-party technique in creating ill will against the trucks when House Bill 560, The Big Truck Bill of 1949, was pending, is clear from two advertisements printed during the months of March and April of 1949. While it is true that one advertisement designated as 3P-5192 was put out under the Associated Railroads of Pennsylvania, two advertisements designated 3P-5205, 'You Can't Satisfy A. Road Hog', showing a big truck in the form of a hog at a large trough marked House Bill 560, and 3P-5203, 'Mr. Taxpayer and Motorist We've Had Enough * * * Haven't You?', were put out under the name of the Pennsylvania State Association of Township Supervisors, H. A. Thomson, Secretary. The advertisement 3P-5202, Road Hog, appeared in 135 Pennsylvania newspapers, while advertisement 3P-5203, Mr. Taxpayer, was limited to the newspapers of the larger cities of Pennsylvania. The Pennsylvania State Association of Township Supervisors is created by statute. Public monies are appropriated for its support and it would be impossible for that association under statutory budgetary requirements to use public money to pay for advertisements of this sort. Mr. Reiter's naive explanation was that Mr. Thomson wanted to run the advertisements and that he had Al Paul Lefton, P.R.R.' § advertising agency, prepare them for the association, had them inserted in the respective newspapers, and did not discuss the payment of the charges until sometime thereafter; then, out of the goodness of his heart and so as not to embarrass Mr. Thomson, he persuaded the railroad to pay the charges of preparing the ads and inserting them in the newspapers. That explanation the Court does not accept. To the contrary it finds that they were prepared with prior financial and academic approval of the same Mr. Reiter. These advertisements were in line with the Byoir technique designed to vilify the trucking industry as such.
It is apparent from the record made in this case that Mr. Mahood and Mr. Thomson were both members of Mr. Reiter's team in opposition to any increase in truck sizes or weights. They had worked together for a good many years and had worked well together. However, in 1951 after the introduction of The Big Truck Bill in May of that year in the Legislature, it became evident to all three that Senate Bill 615 had a good chance of passing and being signed by the Governor of the State, then the Honorable john S. Fine. At a dinner-meeting, paid for by Reiter, it was decided to call upon the services of a publicity agent to help them in their campaign against the bill. Reiter went to Littlefield and as a result of that conference, the Carl Byoir organization was called upon to move into Pennsylvania in the fight against The Big Truck Bill. With almost three years of experience in this particular field behind it, Byoir, through Colburn C. Hardy, assisted at times by Kiely, Marine and Stull, immediately started its third-party technique operations. It was not necessary in Pennsylvania to set up bogus organizations. As aforesaid, Reiter had working closely with him the Secretary of the Pennsylvania Society of Professional Engineers, the Pennsylvania Grange, and the Pennsylvania State Association of Township Supervisors. These three organizations, but principally the latter two, were the springboards for the publicity in Pennsylvania. The state was divided into sections: Stull in the western, Hardy in the central, and Marine in the northeast. Every editor of every newspaper was contacted and personally wherever possible. The Byoir 'kit', a composite of all statistical information created by Byoir, was made available to these editors. Release after release denouncing S.B. 615 was given to the newspapers. It was also at this time that it appeared Mr. Mahood would retire as Secretary of the Pennsylvania Grange to be succeeded by Dr. B. H. Dimit, who was retiring from the profession of teaching at one of the State Teachers Colleges. Investigation by Reiter, et al. showed that one of his close personal friends and associates was Robert K. Fisher, an attorney on retainer by the New York Central lines. Their first connection with Dr. Dimit was through Mr. Fisher, and through Fisher the Byoir 'kit' was made available to Dimit. Dr. Dimit was an ideal associate to have join the team since the considered opinion of the 'team' was that Dr. Dimit was a person who would be very glad to have someone else do his research for him. From that time Dr. Dimit was putty in the hands of Byoir. Completely unknown to him Byoir so manipulated him that no speech, letter, or news release was delivered, sent out, or released until it had been carefully edited by Byoir and in at least one instance cleared with Mr. Littlefield of the Pennsylvania Railroad.
Hardy took up his quarters in the office of the Grange, used Grange stationery, and the bills for publicity were sent to the Pennsylvania Grange c/o Mr. Hardy. The caption of the bills clearly indicates that the printing houses and newspaper services regarded Hardy as a member of the Grange. Hardy also had an address attacking the bill made over a Lancaster Broadcasting System station under the name Pennsylvania State Association of Township Supervisors. Although the station must have known, since Byoir was billed for the broadcast, that it was made under the auspices of at least Byoir and not the association, nevertheless, and in violation of the Federal Communications Act, 47 U.S.C.A. § 151 et seq., no mention was made at the conclusion of the broadcast that it was being paid for by an independent organization. This bill as well as the other bills above referred to were paid in the first instance by Byoir and all reimbursed by the ERPC.
The Trucking Bill had hard sledding due to this organized opposition. However, on the agenda of the Legislature was another bill that caused tremendous difficulty -- The Pennsylvania Sales Tax Bill. Controversy over this kept the Legislature in session until the end of the year. Despite the terrific resistance created by Byoir and its third-party technique as well as the opposition of the railroads, the bill passed by a resounding majority of each House and was sent to the Governor. Exhibit P-53 contained in a memorandum of Reynolds Girdler, the account executive of ERPC, dated February 15, 1952, to John Stahr, summarized Byoir's accomplishments from Byoir's viewpoint in helping to bring about the ultimate veto of the bill. It is well worth repeating it at this point in toto:
'Nomination for December Award
'Achievement: Defeat of 'Big Truck' bill in Pennsylvania.
'This law maximum in Pennsylvania is very irksome to the heavy trucking industry because it keeps them from getting a large share of the very profitable steel hauling business between major cities in Pennsylvania and Ohio.
'Consequently, the trucking industry started back in the middle of 1950 to lay the groundwork for a piece of legislation which would increase the Pennsylvania maximum from 50,000 to 60,000 pounds. The trucking industry bought an elaborate system of television and radio programs blanketing Pennsylvania. They went through the major cities of Pennsylvania and worked out promotional special trucking sections with all the important newspapers, thus giving each important newspaper very substantial and profitable advertising. In addition, the trucking industry smartly inveigled the Pennsylvania Railroad into a discussion of their agreeing on an increase in the allowable maximum, and the Pennsylvania Railroad very stupidly agreed not to oppose an increase up to 50,000 pounds. This agreement was thoroughly publicized throughout the political world of Pennsylvania.
'The trucking industry went further. It got up a committee and $ 200,000 for the campaign for the Republican candidate for governor, and he was elected. The trucking industry also heavily subsidized various members of the Pennsylvania legislature during the November, 1950, election.
'When January, 1951, opened there seemed every reason to believe that the truckers would get their bill through, increasing the allowable weight to 60,000 pounds.
'The 17 railroads of Pennsylvania then started fighting -- without our help. They fought the bill for four months, and then threw up the sponge. They reported to their superiors that they were licked. Even so, the lobbyists in control of the railroad activity continued to oppose allowing the C.B. & A. people to operate in Pennsylvania.
'Their superiors then thrust us down their throats.
'The team went to work in Pennsylvania beginning in June, 1951. Not only did they begin to generate publicity against the bill, but they were successful in getting a long list of organizations and individuals publicly to oppose the bill. Those organizations ranged from the CIO to the Pennsylvania State Grange. The individuals ranged from a 'crusading coroner' of Pittsburgh to John L. Lewis. The clamor against the bill grew and grew. Even so, the Republican majority in the Pennsylvania Legislature was so thoroughly committed to the trucking industry that the bill finally went through both the lower and upper houses. However, so violent was the fight that it kept the Pennsylvania legislators in session for nine months -- a record in Pennsylvania.
'Even after the bill was passed by both houses, the clamor against the bill continued. Day by day went by without the Governor's signing the bill. Finally, he announced that the opposition was so great that he would have to hold a public hearing. He scheduled the public hearing to be held in his own chambers.
'The C.B. & A. team thereupon went out and organized 21 witnesses for 21 organizations against the bill. They prepared their statements and the publicity together with it.
'The repercussions on the trucking industry were nationwide, and embittered comments went into newspapers all over the country. In Ohio the truckers were so stupid as to state publicly that 'All the ATA money didn't do (them) any good.' They went on to say that they thought they had the bill bought.
'Veto of this bill meant that some $ 5,000,000 worth of freight was retained on the Pennsylvania Railroad, because the trucking limit was not raised.
'This represented one of the most dramatic illustrations of the power of organized public opinion that anybody could hope to find. While the award must go to Colburn Hardy as head of the team, he must share the award with Lyon, Stull, Marine and Kiely, because it was a team job.
'I attach as evidence copy of the letter written by the top railroad lobbyist, who originally fought hardest to keep us from being allowed to operate in Pennsylvania. I don't think anybody in the history of Byoir ever received a more impressive tribute.
While the record in this case clearly discloses that some of the statements constituted 'puffing', Hardy himself admitted on cross-examination that the veto was his greatest accomplishment in the public relations field up until that time and that it constituted 'his finest hour'. However, the record and the Governor's veto message also clearly indicate that Byoir was extremely effective and that its organized opposition had much to do with the Governor's veto. And how was that accomplished over and above the use of the third-party technique?
To begin with Pennsylvania was one of the constituent states of the Maryland Road Test. The Governor's veto, P-282, was dated January 21, 1952. It will be recalled that the first tentative draft of the Maryland Road Test Report was to have been issued on January 15th of 1951. Byoir had obtained advance copies and had publicized the railroad theory that big trucks alone break roads. The final draft was not printed and distributed until 1952. The State Highway Department of Pennsylvania through the Secretary of Highways was against the bill. One of the reasons that the Chief Engineer was against the bill and urged the Governor to veto it was based upon statistics drafted by his own department. An objective analysis of the statistics presented, however, finds that they came in the first instance from the desk space organization created by Byoir in New York, the Empire State Transport League. In the second place one Mr. Marine, the same Mr. Marine of Byoir, a statistician of great merit in presenting trucking statistics in such a way as to damn the trucking industry, was the chief source to Mr. Van Riper, Assistant Chief Engineer of the Pennsylvania Highway Department, of the trucking statistics upon which Mr. Schmidt, then secretary, relied in urging the veto to Governor Fine. It will be seen that there was here, as there was in the United States Bureau of Public Roads, considerably less than complete objectivity in the presentation of facts to public officials, upon which facts public officials were urged and did exercise executive judgment favorable to the railroads and injurious to the truckers.
In addition to the above, Byoir, at the request of Reiter, wrote speeches for legislators in opposition to the bill. Hardy also prepared all of the press releases of Dimit and Thomson when they appeared at the Governor's open public hearing on the bill. These releases, skillfully drawn, stressed those elements chosen by Byoir and the railroads for particular attack.
There is no doubt that Dr. Dimit admitted on the stand that he had, without his knowledge, been 'used' by the Byoir organization. The effect of the testimony of 'Cappy' Thomson on cross-examination, even though he attempted to vehemently deny the fact, was that he too had been 'used' by the Byoir organization. From his appearance, manner and testimony, the Court was persuaded that Mr. Thomson knew he was being used by the Byoir organization and was perfectly happy in that status.
Having successfully repulsed the truckers in their efforts to clear Pennsylvania as a bridge state, for the next year and up until the institution of this suit the record is abundantly clear that Byoir worked hand-in-hand with Littlefield and with Reiter to promote the introduction and passage of a weight-distance tax, using exactly the same methods that had been used in the other states of the program. While there is no direct testimony on that subject, it is the opinion of the Court that it was the institution of the present suit which prevented further action along that particular line of attack. However, up to a few days before the institution of this suit, extensive plans were being made for Byoir to again enter Pennsylvania and to push ...