TO AMEND SECTION 28 OF THE MERCHANT MARINE ACT OF 1920 COMMITTEE ON THE MERCHANT MARINE AND FISHERIES, HOUSE OF REPRESENTATIVES, Thursday, April 3, 1924. The committee met at 10.30 o'clock, a. m., Hon. William S. Greene (chairman) presiding. The CHAIRMAN. The hearing this morning is on H. R. 8091, introduced by Mr. Newton of Minnesota, and I will call on him to present his case first. Then we will call the members from the Shipping Board to present their views and then, as far as we can, I would like to alternate with those who desire to be heard. We will be as patient as we can, but we want you to be as brief as possible, because we might be called over to the House about 12 o'clock. (The bill H. R. 8091 and sections 8 and 28 of the Merchant Marine Act of 1920 are as follows :) [H. R. 8091, Sixty-eighth Congress, first session] A Bill To amend section 28 of the Merchant Marine Act, an Act of 1920. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 28 of the Merchant Marine Act of 1920 be amended to read as follows: "That no common carrier shall charge, collect, or receive for transportation subject to the Interstate Commerce Act of persons or property under any joint rate, fare, or charge, or under any export, import, or other proportional rate, fare, or charge which is based in whole or in part on the fact that the persons or property affected thereby is to be transported to, or has been transported from, any port in a possession or dependency of the United States, or in a foreign country, by a carrier by water in foreign commerce, any lower rate, fare, or charge than that charged, collected, or received by it for the transportation of persons, or of a like kind of property, for the same distance in the same direction and over the same route in connection with commerce wholly within the United States, unless the vessel so transporting such persons or property is, or unless it was at the time of such transportation by water, documented under the law of the United States. Whenever the board is of the opinion, however, that adequate shipping facilities to or from any port in a possession or dependency of the United States or a foreign country are not afforded by vessels so documented, it shall certify this fact to the Interstate Commerce Commission and the commission may by order suspend the operation of the provisions of this section with respect to the rates, fares, and charges for the transportation by rail of persons and property transported from, or to be transported to, such ports for such length of time and under such terms and conditions as it may prescribe in such order, or in any order supplemental thereto. Such suspension of operation of the provisions of this section may be terminated in whole or in part by order of the commission as to any rates, fares, charges, rules, regulations, or practices for or in regard to the transportation of persons or property or any special commodity or commodities to or from any port in the United States, in the discretion of the commission, either on its own initiative or after full hearing whenever the board is of the opinion that adequate shipping facilities by such vessels to such ports are afforded and shall so certify to the commission." 1 SECTIONS 8 AND 28 OF THE MERCHANT MARINE ACT OF 1920 SECTION EIGHT. That it shall be the duty of the board, in cooperation with the Secretary of War, with the object of promoting, encouraging, and developing ports and transportation facilities in connection with water commerce over which it has jurisdiction, to investigate territorial regions and zones tributary to such ports, taking into consideration the economies of transportation by rail, water, and highway, and the natural direction of the flow of commerce; to investigate the causes of the congestion of commerce at ports and the remedies applicable thereto; to investigate the subject of water terminals, including the necessary docks, warehouses, apparatus, equipment, and appliances in connection therewith, with a view to devising and suggesting the types most appropriate for different locations and for the most expeditious and economical transfer or interchange of passengers or property between carriers by water and carriers by rail; to advise with communities regarding the appropriate location and plan of construction of wharves, piers, and water terminals; to investigate the practicability and advantages of harbor, river, and port improvements in connection with foreign and coastwise trade; and to investigate any other matter that may tend to promote and encourage the use by vessels of ports adequate to care for the freight which would naturally pass through such ports: Provided, That if after such investigation the board shall be of the opinion that rates, charges, rules, or regulations of common carriers by rail subject to the jurisdiction of the Interstate Commerce Commission are detrimental to the declared object of this section, or that new rates, charges, rules, or regulations, new or additional port terminal facilities, or affirmative action on the part of such common carriers by rail is necessary to promote the objects of this section, the board may submit its findings to the Interstate Commerce Commission for such action as such commission may consider proper under existing law. SECTION TWENTY-EIGHT. That no common carrier shall charge, collect, or receive, for transportation subject to the Interstate Commerce Act of persons or property, under any joint rate, fare, or charge, or under any export, import, or other proportional rate, fare, or charge, which is based in whole or in part on the fact that the persons or property affected thereby is to be transported to, or has been transported from, any port in a possession or dependency of the United States, or in a foreign country, by a carrier by water in foreign commerce, any lower rate, fare, or charge than that charged, collected, or received by it for the transportation of persons, or of a like kind of property, for the same distance, in the same direction, and over the same route, in connection with commerce wholly within the United States, unless the vessel so transporting such persons or property is, or unless it was at the time of such transportation by water, documented under the laws of the United States. Whenever the board is of the opinion, however, that adequate shipping facilities to or from any port in a possession or dependency of the United States or a foreign country are not afforded by vessels so documented, it shall certify this fact to the Interstate Commerce Commission, and the commission may, by order, suspend the operation of the provisions of this section with respect to the rates, fares, and charges for the transportation by rail of persons and property transported from, or to be transported, to such ports, for such length of time and under such terms and conditions as it may prescribe in such order, or in any order supplemental thereto. Such suspension of operation of the provisions of this section may be terminated by order of the commission whenever the board is of the opinion that adequate shipping facilities by such vessels to such ports are afforded and shall so certify to the commission. STATEMENT OF HON. WALTER H. NEWTON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MINNESOTA Mr. NEWTON. Mr. Chairman and gentlemen of the committee, I want to express my appreciation of the response of the committee in reference to the request that has been made here for an early hearing upon this, because of the fact that the order of the Interstate Commerce Commission, based upon the findings of the Shipping Board, will go into effect on May 20, next; so that time is one of the very most important elements in connection with any relief that this committee may deem it advisable to recommend to the House. Mr. EDMONDS. May 20? Mr. NEWTON. May 20, yes. Now, the protestants here to this legislation, so far as I am advised, and I have talked with a very large number of them, are in accord with myself in that we are firm believers in the building up of an American merchant marine. We have questioned the present policy of applying the provisions of section 28, because we are fearful that if it is applied, in the long run, if not immediately, its effect will be just the opposite from that which is intended; because the fear is-and it is based not up on rumors but upon facts that the effect will be to destroy a gre at percentage or a considerable percentage of the American exportable commodities and thereby take away that much tonnage from American ships, as well as to injure American industry. Here is a proposition that involves not only this question of the building up of an American merchant marine, but it also involves the American export trade and, in addition to that, it involves the entire freight-rate structure of the country. So that it involves three very important measures, merchant marine and its upbuilding, which is so important to our own country; it involves our exportable surplus of something over two and a quarter billion dollars annually, and it goes into the making up of probably the most delicate fabric that there is pertaining to business, the rate structure of the country. So such relief as is asked for is for the fear that the first will not be accomplished and that the exportable business of the country and the rate structure, so closely tied up to it, will be seriously disarranged. Now, for years the railroads of the country have been permitted to grant a rate on an exportable commodity which is lower from the point of origin to the port than the domestic rate. That was questioned by the Interstate Commerce Commission some years ago as being a discrimination under the provisions of section 2 of the Interstate Commerce Act; but the right of the railroads to do so was affirmed by the Supreme Court of the United States in the Texas Pacific case, found in 162 United States Reports; and, since that time, it has been a cardinal principle of American railway rate-making to allow the railroads to grant a lower export rate than what the domestic rate is. Now the purpose of that is outlined very clearly in a letter from the chairman of the Interstate Commerce Commission.. Mr. BRIGGS. Mr. Newton, just to interrupt you there: Is that strictly true? Is it true at all ports, for instance, there is a difference in the export and domestic rates? Mr. NEWTON. As to all rates? Mr. BRIGGS. Yes. Mr. NEWTON. No. Mr. BRIGGS. I mean as to export and domestic rates. Mr. NEWTON. No. I said the railroads have been permitted to do so. Mr. BRIGGS. I understand that; but I mean with reference to the various ports. Is it not true, for instance, if a port happens to be located in a certain group, it is put in the rate structure of that group? Mr. NEWTON. Oh, yes. |