which would be today or tomorrow, and if they are able to prepare it within that time, it should be here relatively shortly, and the association and its committee and the various members of the association would like an opportunity of submitting for the consideration of this subcommittee their reaction to the general situation based upon a study of this factual data. It will be recalled that the present objection to this legislation has been not only that it would increase tolls in general but that it would redistribute them Mr. LEA. May I ask when that committee was appointed? Mr. EWERS. Some time last October, or November, I believe, and they had several meetings with Governor Schley when he was here, which would be last fall some time. Several propositions were advanced to Governor Schley at that time to which he promised to give consideration but as yet we have received no intimation as to what his attitude would be. As I was observing, the difficulty is that even though the gross amount of tolls collected from the Canal operations should remain the same, the affect of this legislation would be to redistribute the toll burden amongst the different classes of vessels transiting the Canal. Some classes of vessels as such would benefit. Other classes would have to bear the burden to the extent that others are benefited and the association's committee has been approaching the study of this situation with an idea of determining whether that redistribution of tolls between them would conform to the basic theory of the toll system that vessels should pay tolls pursuant to their earning capacity. We have found several instances which tend to indicate that the proposed legislation would not only produce further inequities in that connection, but we have asked for statistics that would indicate the extent of those inequities. In the hearings before the committee previously, I believe it has been generally recognized that although perhaps this legislation would correct one loophole in the law, or one inequitable situation, that still further inequities would remain and that some inequities would result from the legislation itself. At a hearing granted by the Secretary of War, shortly after this hearing last year, the Secretary of War and the Canal officials apparently recognized that the legislation as recommended would produce hardships on the industry as such. The Secretary of War addressed a letter to Congressman Lea that it was his purpose to recommend, perhaps, that for laden vessels, the tolls should not exceed 90 cents a ton, which would minimize the inequities resulting from this legislation but not entirely dispose of them. We find, however, in the annual report of the Governor of the Panama Canal still further reference to the reasonableness of the efficacy of the $1 rate, and would like to be informed whether there is any disagreement on that score or whether the 90-cent rate will be recommended. In the annual report of Secretary of Commerce Roper, for the fiscal year ended June 30, 1934, this general situation is commented upon, with respect to the Canal tolls as such. The Secretary also makes reference to international inequities in the admeasurement systems, and recommends still further consideration of a recent proposal for an international basis of admeasurement which would pos sibly serve as the basis for an international agreement on toll charges, lighterage dues, harbor charges, and so forth, which possibly would be capable of conversion into a satisfactory basis, for Suez tolls and Panama Canal tolls; but our committee's progress has been such that we are inclined to believe that a piecemeal disposition of this troublesome problem like starting in with the ordinary approach of an especially pure theory of assessment would not be proper at this time. I am not able to say when we will receive the information we have requested, or when we will be able to make some report to this subcommittee as to our reactions to this legislation. I do not know whether Governor Schley has communicated to the committee his reactions to several proposals that were made to him during the conferences in New York, but it seems to me and I am sure others are similarly disposed-that it is manifestly unfair for the officials of the Government to take the position that this legislation should be enacted and leave to further consideration admitted inequities, and speaking purely for myself now, and not as a representative of the association, it occurs to me that the only proper method of disposing of this subject in an intelligent and complete manner would be to refer for investigation the general situation to a committee that could take cognizance not only of the changes which the Lea bill proposes, but of the other inequities which are admitted to exist, the other hardships which would result from this legislation, so that the general situation will be as relatively free from inequities as it is possible for such a study to make it. Now, concerning the present legislation, it will be observed that the relationship of ballast rates to laden rates, has been eliminated from the legislation so that the ballast rates now need only be less than the laden rates without any fixed percentage of difference, and we have further indicated that the rates upon ballast vessels would be increased beyond the present relationship. And, I am sure that we would all like to know whether that removal of the limitation on the ballast rates was actuated by a desire to increase ballast rates or to decrease them. It is capable of approach in either manner. Once the limitation is removed, of course, the relation of the ballast rates to the laden rates might be increased or reduced. In that connection, I think it might be helpful in our further consideration to have that point clarified. I am not prepared on behalf of the association to say that the ballast rates should be increased or decreased, but I do think that the further consideration of that will be helpful. Mr. WOLVERTON. Why are you not in a position to say definitely what your opinion is with regard to that? Mr. EWERS. Because the association, as such, has taken no action upon it, Mr. Wolverton. Mr. WOLVERTON. Why not? Mr. EWERS. We have merely studied the matter to determine what the relationship of ballast tolls should be to laden vessels. Mr. WOLVERTON. Is it because there is any difference of opinion or conflict of interest in your association that makes it inadvisable for them to take a position one way or the other? Mr. EWERS. No, sir; I would not say that. There may be such conflicting interests, and generally is some conflict in a large organization. Rather it has been in the factual data which we have requested from the Canal officials. Among the other questions we have asked were the number of laden and ballast transits which have been made of the Canal by the different types of vessels; that is, the general cargo carriers, combination passenger and cargo vessels, and the tank steamer traffic, and all of the factual data upon which that study will be predicated is available. The Association as such would not be able to pass upon it, and I do not believe that the committee would until it knew the extent of laden and ballast rates. Mr. WOLVERTON. Well, is the factual data that you desire any different from the data that appears in the report of the Panama Canal Commission? Mr. EWERS. Yes, it is. The Canal Commission divides traffic between general cargo steamers, which comprehends every type of carrier except tanker tonnage, whereas for the purpose of our study, we desire a still further break-down of tonnage other than carrier tonnage. Mr. WOLVERTON. Is the information which you are seeking and which you have stated will probably be here within another day or two any different in character from information that you have previously had with respect to that matter? Mr. EWERS. The information which we have had heretofore, Mr. Wolverton, has been largely of representative inequities; that is to say, we know that certain types of vessels would benefit or be injured according to the application of this system. We have not had factual data indicating the extent of that benefit or its distribution among the several types of carriers, and for that reason, we have asked that that be broken down in that manner. Mr. WOLVERTON. From whom do you expect to receive that information? Mr. EWERS. From the officials on the Isthmus and the telephonic inquiries of Mr. Flint, since this hearing was announced indicates that the Canal officials had information that they expected to forward so that it would be here on or about the 24th, but that was an estimate which they might not be able to live within. Mr. WOLVERTON. Will you give the committee the benefit of the inquiry that you made for information, so that we may determine how important the information is that you are seeking? Mr. EWERS. I should be very happy to submit for the record a copy of the letter of inquiry and of the questions propounded of the officials, that the committee may know. Mr. WOLVERTON. We would like to have it. Mr. LEA. That may be incorporated in the record. (The document referred to is as follows:) Mr. A. L. FLINT, AMERICAN STEAMSHIP OWNERS' ASSOCIATION Chief of Office, The Panama Canal, Washington, D. C. MY DEAR MR. FLINT: In connection with our studies of Panama Canal activities we should like to have the information requested on the enclosed memorandum, covering the fiscal year ended June 30, 1934. I do not know whether this is all available in your office, but if it is not available will you have the information forwarded from the Canal? Very truly yours, R. J. BAKER, President. PANAMA CANAL PARTICULARS FOR FISCAL YEAR ENDING JUNE 30, 1934 The following data is requested as referred to by item numbers under headings following: (1) Number of transits laden. (2) Number of transits in ballast. (3) Tolls paid laden. (4) Tolls paid in ballast. (5) Panama Canal net tonnage (exclusive of deck loads). (6) United States equivalent tonnage. (7) Deck loads as measured under Panama Canal rules. (8) Measurement, under Panama Canal rules, of cargo spaces exempted under United States rules. (9) Measurement, under Panama Canal rules, of cargo spaces exempted under United States rules, coming under general classification of poop, bridge, or forecastle decks or combined spaces. (10) Measurement, under Panama Canal rules, of cargo spaces exempted under United States rules, coming under general classification of shelter decks. (11) Measurement, under Panama Canal rules, of passenger spaces exempted under United States rules. (12) Approximate measurement under Panama Canal rules of public spaces devoted to feeding, recreation, and entertainment of passengers. (13) Tons of cargo carried. (14) For non-cargo-carrying vessels: Tonnage upon which payment of tolls is based, i. e., Panama Canal net or displacement. (15) For toll-free ships: Tolls that would have accrued if vessels were not exempted by law. (16) For toll-free ships: Tonnage on which tolls would have been assessed. A. For Passenger Vessels of United States registry: items 1, 2, 3, 4, 5, 6, 7, 8, 11, 12, and 13. B. For passenger vessels of all other nationalities: items 1, 2, 3, 4, 5, 6, 7, 8, 11, 12, and 13. NOTE.-By passenger vessels is meant vessels in which a substantial portion of the capacity is devoted to the carriage of passengers; this is not intended to cover freighters with passenger accommodations limited to 16 passengers or by International Safety of Life at Sea Agreement. NOTE." Cargo ships", items C to H, includes all cargo-carrying vessels with not over 16 passengers. C. General cargo ships (not "shelterdeckers") of United States registry; Items 1, 2, 3, 4, 5, 6, 7, 9, 13. D. General cargo ships (not "shelterdeckers") of all other nationalities: Items 1, 2, 3, 4, 5, 6, 7, 9, 13. E. General cargo ships of the United States registry with closed shelter deck spaces: Items 1, 2, 3, 4, 5, 6, 7, 9, 10, 13. F. General cargo ships of all other nationalities with closed shelter deck spaces: Items 1, 2, 3, 4, 5, 6, 7, 9, 10, 13. G. General cargo ships of United States registry with open shelter deck spaces: Items 1, 2, 3, 4, 5, 6, 7, 9, 10, 13. H. General cargo ships of all other nationalities with open shelter deck spaces: Items 1, 2, 3, 4, 5, 6, 7, 9, 10, 13. I. Tankers of United States registry: Items 1, 2, 3, 4, 5, 6, 9, 10, 13. J. Tankers of all other nationalities: Items 1, 2, 3, 4, 5, 6, 9, 10, 13. K. Non-cargo-carrying ships of all nationalities: Items 1 (not laden), 3 (not laden), 14. L. Toll free ships: Items 1-15, 16. M. Separate tabulation for passenger and cargo ships in United States intercoastal trade (exclusive of tankers): Items 1, 2, 3, 4, 5, 6, 7, 13. Mr. EWERS. I might say that from time to time in our discussion of this situation with the interested Government officials, including the Canal officials and the Secretary of War, and I believe this committee, they have recognized that there are certain existing inequities in addition to those alleged in the situation covered by the last bill to which at some future date they would give consideration, and have that satisfactorily disposed of. But we rather feel that that is a piecemeal disposing of the subject which should be remedied in its entirety at the same time, and I would like for the record to show at this time what apparently is the thought of the Secretary of Commerce with respect to that situation. Quoting from the Twentysecond Annual Report of the Secretary of Commerce for 1934, after a paragraph relating to the general duties of their Division of Administration, the Secretary says: The admeasurement of vessels under our law as affecting the tonnage of vessels transiting the Panama Canal has been under special consideration. Difficulties which have arisen in some of the maritime ports of other nations also have emphasized the advisability of the adoption by the maritime nations. of the world of an international admeasurement system." Now, I have not regarded myself as testifying, because I have tried to refrain from a rehash of the arguments, for and against the system, and the system as modified, but I have endeavored to point out some of the considerations which are engaging the attention of our committee and it seems to me that it would be most equitable and most fair for all existing inequities in the present system of adineasurement from the standpoint of purity of theory alone to base the tolls on earning capacities of vessels if that is the proper basis of assessment of tolls, should be dealt with in its entirety rather than a piecemeal disposition of it which purports to correct one inequity and creates a hardship amongst other classes of carriers, and I want the position of the association made clear in that connection in that there exists inequities and some of those inequities will probably remain after this legislation. Some further inequities will result from this legislation and it seems to be a very unscientific method of disposing of it, particularly when some of the existing situations have generally been recognized as demanding further consideration. Now, I might just say that there has been some discussion within and without the association as to the fundamental theory of basing tolls upon earning capacity. The legislation itself does not preserve entirely that theory, because it provides reductions for vessels in ballast which have the same earning capacity as laden vessels and it is a subject which seems to me should not be lightly dealt with when so many other situations are dependent upon it; rate structures in the intercoastal trade; marketing agreements; relations of land and water traffic. Any number of other national situations will probably be affected in greater or less degree by this legislation. I might say that I have a telegram this morning from one of the companies inquiring concerning the elimination of the ballast rate and I might say also for the record that in discussing the subject with one of the Canal officials I was given to understand that perhaps the ballast rate should have the arbitrary percentage limitation removed to enable the possible lowering of ballast rates, and, while that may have been the intention of those who made the change from the legislation heretofore considered, it will be apparent that yet a |
