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in Alaska. Hearings were held at Seattle and at five points in Alaska. A tentative report has been prepared and served upon the parties, the 'conclusion of which report was that the rates were not shown to be unreasonable. A petition to reopen the case, in view of changed conditions resulting from cessation of the war, has been filed on behalf of certain parties and is now receiving consideration by the board.
Section 15 of the shipping act imposes upon all common carriers by water in interstate and foreign commerce, or other persons subject to the act, such as forwarders, the obligation of filing with the board copies or complete memoranda of all agreements or conferences with other carriers or other persons subject to the actfixing or regulating transportation rates or fares; giving or receiving special rates, accommodations, or other special privileges or advantages; controlling, regulating, preventing, or destroying competition; pooling or apportioning earnings, losses or traffic; allotting ports or restricting or otherwise regulating the number and character of sailings between ports; limiting or regulating in any way the volume or character of freight or passenger traffic to be carried ; or in any manner providing for an exclusive, preferential, or cooperative working arrangement. The term “ agreement” in this section includes understandings, conferences, and other arrangements.
The provisions of this section were called to the attention of carriers and other persons subject to the act by means of a circular issued by the board in the summer of 1917, instructing carriers and other persons subject to the act to file with the board agreements of the character set forth. To date 142 carriers' contracts and 35 conferences and conference agreements have been filed: 75 steamship companies have filed concurrences in these conferences and conference agreements. Generally speaking, the agreements on file are necessary working arrangements and violate neither the spirit nor the letter of the statute.
In addition to the formal complaints heretofore mentioned, letters of protests or objections to the rates or practices of carriers have been received from time to time. Upon receipt of such letters, they are docketed as informal complaints, and the board, through correspondence and informal conferences, endeavors to adjust the matter complained of. To date 142 informal complaints have been filed. With respect to 17 of them the differences between the parties were irreconcilable and the complainants were advised that if they desired to pursue the matter further they could avail themselves of the privilege of filing formal complaints; 120 complaints were adjusted upon a basis satisfactory to all parties, thus leaving out of the total number filed only five complains now pending.
It will be seen from the preceding statement that there has been little cause for complaint on the part of shippers against the rates and practices of interstate water carriers since they have been under the regulatory jurisdiction of the Shipping Board. The relation between the shippers and carriers has been decidedly harmonious and they have cheerfully cooperated with the board in the adjustment of complaints and the administration of the regulatory act. It is significant that most of the interstate water lines subject to the regulatory jurisdiction of the board are comparatively small companies, more than 50 per cent of them being capitalized at less than $200,000 and operating less than five vessels each.
As I read the Esch bill, the effect of its passage will be to divest the Shipping Board of its jurisdiction over common carriers by water in interstate commerce and to invest the Interstate Commerce Commission with a very broad jurisdiction over, not only such water carriers, but also terminals and terminal facilities of every character, whether owned by railroads, water carriers or others. It will give the commission a more complete control over water carriers than has ever been entrusted to the Shipping Board, and will transfer much of the board's present jurisdiction over contracts respecting terminal facilities, by reason of which many contracts now filed with the board by interstate and foreign carriers and persons carrying on the business of forwarding or furnishing wharfage, dock, warehouse or other terminal facilities will be subject to, and must be filed with, the commission instead of with the board.
Moreover, in all cases of doubt as to which body would have jurisdiction over a specific matter, by virtue of section 33 of the shipping act providing that the act shall not be construed to affect the power or jurisdiction of the Interstate Commerce Commission, nor to confer upon the board concurrent power or jurisdiction over any matter within the power or jurisdiction of such commission, the board would have to yield to the commission.
Without attempting to predict what will be done in respect to this bill, and particularly in respect to water carriers, I wish only to state that the experience of the board has demonstrated that the regulation of water transportation is a very serious matter and calls for liberal rules and sympathetic treatment in order to encourage the development and operation of interstate water lines.
That is all I have to say, Mr. Chairman. The CHAIRMAN. We have present Judge Alexander and Mr. Edmonds, of the Merchant Marine and Fisheries Committee of the House; and, in view of their large experience and knowledge in shipping matters, we will be glad to hear from them. STATEMENT OF HON. J. W. ALEXANDER, MEMBER OF THE COMMITTEE ON THE MERCHANT MARINE AND FISHERIES OF THE HOUSE OF REPRESENTATIVES.
Mr. ALEXANDER. Mr. Edmonds and myself have been selected by the Committee on the Merchant Marine to voice the opposition of that committee to the further extension of the powers of the Interstate Commerce Commission to water-borne traffic. It is not my purpose to discuss the question involved here in detail, but in outlîne to very briefly give you the history of the shipping act, which embodies the views of the Committee on the Merchant Mariné and Fisheries, as regards the regulation of water-borne traffic.
The House of Representatives, in the Sixty-second Congress, passed a resolution, H. R. 587, under which the Committee on the Merchant Marine and Fisheries was empowered to investigate shipping combinations, it then being the thought that all regular lines engaged in coastwise and foreign commerce were in some form of combination. The sum of $25,000 was appropriated to defray the expenses of that investigation. With the consent of the committee, I employed Dr. S. S. Huebner, of the University of Pennsylvania, as our expert, and Dr. Huebner and I had direct control and direction of the investigation, of course subject to the approval of the committee. The investigation continued over a period of about two years. It was very thorough; it extended to every trade area in the world. We were empowered to send for persons and papers, administer oaths; and, through our ambassadors and ministers and consular agents, we obtained valuable and accurate information as regards the practices of other countries.
We sent out a questionnaire to every railroad company in this country in any way interested in or connected with water transportation. Those questionnaires were returned under oath. As a result, it was shown, as I recall it now—I have not had a chance to go over this matter and refresh my mind with it—that about 92 per cent of the lines engaged in regular traffic in our coastwise traffic were either owned or controlled by the railroads, and practically all the regular lines engaged in overseas trade were in some form of combination.
As the result of our investigation, we made a report in the Sixtythird Congress, which embodied our recommendations relating to water carriers engaged in foreign trade and recommendations relating to water carriers engaged in domestic trade, which will be found in volume 4 of our report, beginning on page 145; and it would be worth while if the committee would read that report.
Mr. HAMILTON. You found that the coastwise business was very largely controlled by monopolies and combinations!
Mr. ALEXANDER. The regular lines?
Mr. HAMILTON. And they apportioned the ports among themselves, as I remember it?
Mr. ALEXANDER. Yes, sir.
Following that report, I prepared a bill, with the assistance of our expert, embodying our views of what should be enacted by Congress in the way of the regulation of water-borne commerce. I introduced that bill, and it was pending before the committee when the shipping act was introduced by me, the original shipping act. I first introduced what was known as the ship-purchase bill in August, 1914, just after the beginning of the war in Europe. In the following year, 1915, I introduced the bill now known as the shipping act; and it was in connection with that bill, and carrying out the recommendations of the committee as regards the regulation of water-borne traffic, that we incorporated in it substantially the recommendations of the committee as contained in our report to the Congress.
When I originally introduced the bill to regulate our water-borne commerce, it provided that the powers of the interstate commerce commission should be extended to and cover water transportation, not only on our inland waterways and the Great Lakes, but in coastwise and foreign trade; but this other governmental agency having been proposed in the meantime-the Shipping Board--we vested in the Shipping Board the powers which we had originally recommended should be vested in the Interstate Commerce Commission.
Mr. Denison. When was the Shipping Board created ?
It has always been my opinion that we ought to have some governmental agency whose duty it is directly and primarily to supervise and foster our water-borne commerce. I felt then, the Committee on the Merchant Marine and Fisheries felt then, that the Interstate Commerce Commission had very large, comprehensive, and involved duties; and if they were vested with this power it would be necessary to increase the commission and have a marine section of the commission, whose duty it should be primarily to exercise the powers now vested in the Shipping Board, in coordination, of course, with the section of the Interstate Commerce Commission charged with the regulation of rail traffic.
Our committee made a careful investigation and gave very great consideration to this question, when the shipping act was under consideration, and particularly the regulatory features of the act, and we were engaged for many months in evolving what you now find in the regulatory features of the act. I do not know how many different drafts of the bill were prepared, but the committee as a whole took an intense interest in it, and there was not a section or paragraph or line or word of the bill that was not gone over with the greatest care, with the result—if you will have the patience to read the regulatory provisions of the shipping act I think you will find it is very complete legislation. Now, for the most part it is fashioned after the interstate-commerce law and embodies many of the features of the interstate-commerce law; that is, the regulatory features, the matter of making reports and all of that, but it was intended that our water-borne commerce, both coastwise and foreign, involving as it does so many different elements and conditions, should be treated separately and should be under a separate tribunal. When the bill was under consideration by the committee, I took the matter up with Mr. Clark, of the Interstate Commerce Commission, who had been designated by the Interstate Commerce Commission to confer with me with a view to avoiding possible conflict between the two. Of course, there will always be a twilight zone, but we undertook to frame a law that would avoid any serious conflict and that the two acts, one relating to rail transportation and the other to water-borne transportation, might be coordinated and made harmonious.
Of course, the war came on very shortly afterwards, and the regulatory features of the shipping act have not been tried out yet to any large extent, and it is too soon to say just what possible conflicts there might be, but I reflect the sentiment of the committee when I say that we are very much opposed to extending the provisions of the interstate-commerce law to our water-borne traffic; we are very much opposed to taking away from the Shipping Board any power vested in it under the shipping act or, on the other hand, extending to the Interstate Commerce Commission any power now vested in the Shipping Board.
The CHAIRMAN. As I understand, the shipping act did not give the Shipping Board jurisdiction of navigation or transportation on the inland rivers?
Mr. ALEXANDER. It did originally, as it passed the House; but it was amended in the Senate. I think that in doing so the mistake was committed; but that is quite aside from this question.
Now, in our coastwise trade, of course, this act provides that portto-port traffic by regular lines, those lines which are in essence common carriers, shall come under the regulatory powers of the Shipping Board, and the Shipping Board shall have supervision of their rates and for all purposes has the same general power affecting their rates that the Interstate Commerce Commission has over the rates of rail carriers. It also provides that those regular lines may not reduce these rates, the purpose of which is to crush out competition, for the same reason and under like conditions that the railroads, where they are in competition with water-borne traffic, may not reduce their rates to kill water-borne traffic and then restore them again, unless it is done for some other reason than the absence of competition.
One question that troubled us more than any other was what should be done with what is known as the tramp steamer, both in our coastwise and in our foreign commerce, and after the most mature consideration we concluded that tramp steamers should not be brought under the supervision of the law; that for the most part they were bulk carriers and were therefore private carriers, chartered by some person, firm, or corporation for the purpose of carrying a cargo of coal or of wheat or fertilizer, or some other commodity, and they should be free to make or accept such rates as healthy competition would suggest; that they would be the only active competition on our waterways these other water lines would have. If we are going to make water transportation, either inland, coastwise, or foreign, the handmaid in the development of our commerce, we ought to make it just as free as possible, especially what we understand to be the tramp steamer, and whenever regular lines in service as common carriers from port to port in the coastwise trade, the rates should be regulated under the provisions of the shipping act.
I do not know how you would have a through route and a joint rate unless some regulatory power is extended to the water lines. That is obvious to my mind. Of course the Interstate Commerce Commission now has jurisdiction over all through routes and joint rates, and for that reason exercise direct control over very much of our coastwise water-borne traffic, but in the past it has been chiefly exercised with reference to those water lines that have been owned or controlled by the railroads.
Of course the Congress by legislation has undertaken to break up, to divorce the railroads from water-borne tonnage, and that was very wise, too. It will be much better to my mind if the control of the Interstate Commerce Commission would end at the water line, or at the port, and then, as now, have the Shipping Board exercise power over the water-borne traffic; but, as I say, on the regular lines the traffic rates should be fixed by the Shipping Board; the rates to the railroads should be fixed by the Interstate Commerce Commission, but in cooperation, and if there be a through route and joint rate they could be coordinated, and I do not see any difficulty from a practical standpoint in doing that.
Mr. DENSION. What do you think ought to be done with river transportation-inland transportation?
Mr. ALEXANDER. The Committee on the Merchant Marine made some provision with reference to inland transportation as it did with reference to coast wise trade, so far as that is concerned, but that provision of the shipping act was eliminated in the Senate, and the