question. And I am sure that Mr. Clark, of the Interstate Commerce Commission, as he has already himself stated in this hearing. would say that they did not wish or intend, in any suggestion they have made about this bill, to include this business. And the matter has been thoroughly considered by the Interstate Commerce Commission, by its legislative committee, and taken up with their general counsel, he informs me, and through their instrumentalities there. Further than that, Mr. Clark says that the legislative committee and their counsel had the idea that the bulk freighters would not be drawn in by the language of this bill, but these chamber of commerce men, shore people, people dependent upon and relying upon this transportation, had come, and that was before we thought about it except as our notion was that we were not involved. These shore people had expressed some fear-and it really amounted to a fear-that somebody might claim that bulk freighters were included or that there would be a disturbance of some kind, so that Mr. Clark, in deference to their feeling, wrote this provision, which I will read, and he filed it with this committee: Provided, further, That so-called tramp cargo-carrying vessels, and other water craft operating as private carriers, not on regular routes I suggested that he might add "or schedules." He did not care much whether that was in or out. [Reading further:] Shall not be considered common carriers within the terms of this act He also added the following as a saving clause-perhaps necessary and perhaps not, but put in to cover attempt to evade the law: Unless after investigation the commission shall find that such vessels or craft are being operated as common carriers, in which event the provisions of this act shall apply thereto. He would say to anybody in respect to that that the point in putting that in was simply to prevent false pretense. Now, in closing, there is one feature I omitted, and I think it has great importance. The water route is in the very nature of things open, free, and untrammeled. Anyone, everyone, who sees fit may build and freely operate such tonnage and they are doing it—always have and should always be free to do so, and some engaged in the various businesses find advantage in supplementing with bulk freighters of their own to carry part of their needs, owing to the varying volume and demands, and so you will find a great many ships up there owned by consumers of iron ore or by shippers of iron ore. That is true to some extent in the coal trade, carrying entirely for themselves, or almost entirely for themselves, taking outside cargoes occasionally. That practice was somewhat varied by the exigencies of the war when the vessel owners of the Lakes appointed their committee, in connection with Mr. Barnes, as to the movement of grain, and with various other Government committees and agencies as to this bulk movement of grain, ore, and coal, for the fullest utilization of all facilities and effort. Everyone in the trade, producers, consumers, ships, setting aside mere convenience patriotically put all in the hands of the committees to avoid congestion; here and there cargoes were traded off, ships were traded off, everybody acting from motives of broad patriotism. and many letters of recognition were received; and it was accomplished by devoting constant attention, changes being made every day, hourly, and frequently within but a few minutes-and largely the business done by telegraph and telephone. That was war exigency but illustrated how impracticable would be anything in the nature of rigid regulation of such a business fixed in advance. As to any general fixing of rates or fixing minimum rate, or anything of that kind, it would be a very unfortunate thing to attempt to deal with that. There is no occasion for it. This letter that I have read and the other communications filed are expressive of the belief and the knowledge of the men who pay the freight that by the present competition those rates are low and satisfactory. The CHAIRMAN. Does the amendment you have suggested meet your needs? Mr. GOULDER. I think so. It is very possible I would phrase it in a little different language, but anything would meet our needs that would definitely and clearly, beyond all question, say that those ships engaged in that transportation are not included in this bill. Now, Mr. Clark thought that this would do it, and I have submitted it to some of our people, who think that that would do it. The CHAIRMAN. You have incorporated it in the record already? Mr. GOULDER. Yes, sir. The CHAIRMAN. It has been read into the record? Mr. GOULDER. Yes. The CHAIRMAN. Were there any other amendments which you would suggest? Mr. GOULDER. None. That is the sole point I want to make, but I may add this: There was at one time talk in Congress that they wanted something in reference to the Harter Act. They came out in that and said they did not care anything about that for the lakes; that there was no trouble up there in their arrangements between shippers and ships. That is part of the printed report of the Senate on the Nelson bill, back as far as 1912, and as already pointed out in the consideration and enactment of the shipping act in 1916. And, as I have said, I have not seen, in Congress or out of Congress, where a mind has been directed to this subject, where it has occurred, where anybody has urged-and if they have I have not encountered itthat that business can be handled in any better way than it is, or that way that it is now handled is not the best way for all concerned; and they say that any interference with that would be a mistake and would embarrass and retard and would put obstacles in the way of a free, cheap flow of commerce, which is the admiration in that and perhaps some other respects of the people who know about it. I should like to file printed copy of the reasons against such a proposal submitted by the Canadian Manufacturers' Association, April, 1919, to the Canadian Parliament which rejected the proposal and left the bulk freighters free the same as our own are. The statement is as follows: the REASONS SUBMITTED BY THE CANADIAN MANUFACTURERS' ASSOCIATION TO THE SPECIAL COMMITTEE ON THE RAILWAY BILL, APRIL 30, 1919, AGAINST THE PROPOSAL OF MR. J. E. ARMSTRONG, MEMBER OF PARLIAMENT, TO PLACE ALL BOATS UNDER THE RAILWAY COMMISSION. The Canadian Manufacturers' Association objects to the proposed amendments to the railway act, placing Canadian vessels under the jurisdiction of the railway commission. The association realizes fully the benefits which have accrued to the public in the past through the supervision of the railway commission over railway companies, in matters of rates, etc., and is desirous of seeing the list extended as rapidly as possible to include all railway companies which can justly be so dealt with but submits that vessels are in an entirely different category. Steamship companies have no monopoly. They are given franchise eliminating competition. They receive no assistance in the way of grants or subsidies. The water routes are open to all vessels and the greater the number of vessels competing for business the lower will be the rates. If vessels are placed under the jurisdiction of the railway commission they will be required to file tariffs. We submit that fixed rates for vessels are neither feasible, desirable, or necessary. Fixed rates in the case of vessels are not feasible on account of: (1) Variation in carrying capacity. (2) Variation in speed. (3) Variation in cost of insurance. (4) Variation in cost of operation at different seasons of the year. (A fair rate in summer might be a ruinous rate in November.) (5) Variation in cost of operation because of: (a) Different depths of water in different years; (b) different depth of water at different times in same year; (c) difference in loading facilities at different elevators, wharves, or ports; (d) difference in unloading facilities at different elevators, wharves, or ports. Fixed rates in the case of vessels are not desirable because they would: (1) Result in an elimination of competition. (2) Place Canadian vessels at a disadvantage in competing against United States boats whose rates in ordinary times are regulated only by the law of supply and demand. (3) Result in vessels lying idle when set rate was unprofitable. (4) Discourage the building of further vessels. Fixed rates in the case of vessels are not necessary, because to get business now boats must: (1) Underbid the rail rate. (2) Underbid or meet rates charged by boats already under railway commission. (3) Offer fair rates, or other boats will be built. Special committees which investigated this matter during 1914 and 1917 received representations along the above lines from the following: Transportation companies.-Dominion Marine Association, Montreal Transportation Co., Canada Steamship Lines, Great Lakes Transportation Co., St. Lawrence & Chicago Steam Navigation Co., Ottawa Transportation Co. Manufacturers and shippers.-Montreal Corn Exchange; Ashdown Hardware Co., Winnipeg.; Collingwood Shipbuilding Co.; Kingston Shipbuilding Co.; Port Arthur Shipbuilding Co.; Davidson & Smith Elevator, Fort William; Lake Port Elevator Co., Fort William; Western Salt Co., Mooretown; Dominion Sugar Co., Chatham; Dominion Glass Co., Wallaceburg; Canada Atlantic Grain Co., Winnipeg; Gooderham, Melady & Co. (Ltd.), Winnipeg; Parrish & Heimbecker, Winnipeg; Baird & Botterell, Winnipeg; E. R. Wayland & Co., Winnipeg; Fort William Elevator Co.; Midland Elevator Co.; Western Salt Co.; International Harvester Co.; Steel Co. of Canada; Canada Salt Co.; Page, Hersey Iron, Tube & Lead Co.; Ogilvie Flour Mills Co. (Ltd.). Boards of trade.-St. John, New Brunswick; Quebec, Three Rivers, Montreal, Kingston, Toronto, Windsor, Ford, Walkerville, Sandwich, Ojibway, Wiarton, Sarnia, Chatham, Hamilton, Port Arthur, Fort William, Winnipeg. The Canadian Manufacturers' Association submits that with such an unanimity of opinions among transportation interests, manufacturers, shippers, and boards of trade as to the inadvisability of this legislation, the proposal to place vessels under the jurisdiction of the railway commission should be abandoned. Mr. GOULDER. I thank you. The CHAIRMAN. We will take a recess until to-morrow morning at 10 o'clock. (Thereupon, at 5.20 p. m., the committee adjourned until tomorrow, Friday, August 29, 1919, at 10 o'clock a. m.) COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, HOUSE OF REPRESENTATIVES, AFTER RECESS. Friday, August 29, 1919. The committee reassembled at 1.30 o'clock p. m., after the expiration of the recess. The CHAIRMAN. There is a gentleman present from Baltimore who wishes to read a letter. You may give your name and address to the reporter and state whom you represent. STATEMENT OF MR. THADDEUS H. SWANK, COUNSEL FOR THE MERCHANTS & MINERS' TRANSPORTATION CO., BALTIMORE, MD. Mr. SWANK. Mr. Chairman, I would like at this time to present, and ask that it be made a part of the record, a letter written by Mr. A. D. Stebbins, president and general manager of the Merchants & Miners' Transportation Co., Baltimore, giving briefly that company's views in reference to the proposed taking in under the interstate-commerce act of its purely local traffic from port to port and wholly by water. The CHAIRMAN. The letter will be made a part of the record. (The letter referred to is as follows:) MERCAHANTS & MINERS' TRANSPORTATION CO., Hon. JOHN J. ESCH, Chairman Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D. C. DEAR SIR: With reference to your kind letter of August 7 to our traffic manager, I beg leave to respectfully present the following as representing the views of this company on pending legislation bearing on the subject of control by the Interstate Commerce Commission of port-to-port traffic as found in the railroad bill, H. R. 4378. At the present time this company is filing tariffs with the commission on traffic to and from the interior and its ports, and is also filing tariffs with the United States Shipping Board on port-to-port traffic. Should our revenues be attacked in a manner requiring prompt action, we can, with approval, make reductions in freight and passenger rates on one day's notice. When advances in rates are necessary, they can be made on 10 days' notice. Should control of port-to-port traffic pass to the Interstate Commerce Commission without the present regulations of the Shipping Board pertaining to reductions and advances in rates on short notice to meet competition, this company would undoubtedly suffer in consequence thereof. Another and even more serious objection would be the possible elimination of certain exemptions under the Cummins amendment to the interstatecommerce act. The exemptions referred to, amongst which is the Harter Act, are conditions that have been recognized as only fair and just in water transportation, and their elimination would be a severe blow to the coastwise merchant marine. Section 10 of this bill gives the commission power to fix minimum rates. This would be quite a departure, and consequently the existing privilege of reductions and advances under Shipping Board authority should also apply as to minimum rates if the commission were to control port-to-port traffic In the readjustment period, just ahead of us, this company would feel safe in presenting to the commission all matters of differences of opinion between this company and railroad connections as to differential territory of origin and destination, differential rates and divisions of rates, together with any other matters wherein arbitration with official authority for action became necessary; but in the event traffic committees should be formed or continued for the purpose of analyzing applications for rate changes or divisions, determining differential territory of origin or destination, the size of differential figures, etc., and no way be provded for prompt appeal from the conclusions of said committee to the commission, we should feel that public interests, as well as our own, were not adequately protected. Permit me to say that this company began operation of a Baltimore-Boston steamship line in 1854. This has continued with but slight interruption to this time, and there are now two weekly sailings of freight and passenger steamers each way between the two ports. Through the year there are also two freight and passenger steamers each way weekly between Boston and Philadelphia. There are weekly sailings each way between Boston and Norfolk, also between Providence and Baltimore. Beyond this, there are weekly sailings each way between Philadelphia, Savannah, and Jacksonville, and also between Baltimore, Savannah, and Jacksonville. This, I think, will present a clear idea of the extent of our coastwise service. In this connection, and not to record a complaint, but to illustrate the need of prompt approach to the commission, should irreconciliable differences between a suggested traffic committee and this company arise, or should undue delay in action occur, let me say that this company was returned to corporate control March 1, 1919. While under Federal control our freight rates were advanced to all-rail basis, and with return of our property for operation we found sundry changes proposed, many of them not having our approval. The controversy continues, and our differential rates have not been restored although tariffs are in process of issuance. We have not considered approaching the commission on this subject. It may not be amiss to say that in our opinion the Interstate Commerce Commission can be relied upon to deal justly with all subjects subImitted to it. The effect of the delay has been our loss of traffic to rail lines and to Canadian differential lines, which we should be carrying, especially between New England and the West, via Norfolk and Baltimore. We naturally fear that a traffic committee might not only fail to restore prewar conditions, which were those of competition and experience, but perpetuate the present intolerable conditions of an American coastwise steamship line of experience and high standing being obliged to operate on an all-rail basis to and from New England, and see traffic that it is entitled to carry move all-rail, or via Canadian differential lines. Our objection is not to the jurisdiction of the Interstate Commerce Commission but to the application of the regulations which were primarily made to regulate rail traffic, without any consideration whatever for the different conditions under which the water lines operate, and the exemptions extended them by statutes, which do recognize protection that water lines are entitled to. In view of the opportunity to thus state the position of our company, no claim will be made for verbal presentation of our views, nor, unless desired, will a brief be submitted. Respectfully, yours, A. D. STEBBINS, President and General Manager. STATEMENT OF MR. W. P. LEVIS, FREIGHT TRAFFIC MANAGER, CLYDE AND MALLORY STEAMSHIP COS. Mr. LEVIS. Mr. Chairman, the Clyde Steamship Co. and the Mallory Steamship Co. are subsidiaries of the "AGWI" Lines, or, I might say, that the Atlantic, Gulf & West Indies Lines is the holding organization of the Clyde Line and the Mallory Line, and of the Southern Steamship Co., the New York & Cuba Mail Steamship Co., and the New York & Porto Rico Steamship Co. I am authorized by President Mooney, of the New York & Porto Rico Steamship Co., to speak for his company, and I am authorized by Mr. H. H. Raymond, who is president of the Clyde and Mallory Steamship Cos., to speak indirectly for him as a director of the New York & Cuba |