1 ་ fentration of the regulatory powers. The bill. as it stands, dong e a iriste powers over accounting or sil bersons wil geet to the juris་དུསཚུལ་Tsextbct$cv} act These nowers should extend to all persons under t of the new agenev, indadeg all Ame? est fag colon carriers ut***u%1?z& Al erica 'ject to the spong Act of 1916 mare, the power to prescribe metods of nece trga 1 to re pire * the case of contractors should not be limited to t e contract transas w trout complete statements or exam hat on of the consete accounts ***- traws of nich statements etc cant be ascert vine 1 I ́e need for a ar of 15m, dy cannot be ver:hed without exam test on of the entire Desperise a counts In this connection it to wigzeste i tist of page 27, 28 tire 25 top 29 line 2 the world relation to such contract and atre and onerations of the vessels * Prices To ites and lites covered "a t be omitted, and that in his 15 line 7 a ter the word Authorarted the words "h, ance sheets, prout and lows and surplus covering all of the transactions of t e contractor and such other " • gatested that the des rot og of all stedete, comba jew il section mae to correspond exactly with that suggested wits respect to 1 rity may be in a position, to proverb cry out even dates terep after stel ose 1, it wand appear that would also isty of onseriig the unifu accomiting reg Pemer ts . the Dpartment of Corimerce In its orvial forn thin met wo 14 pro Vi lave bile ..f ལutf!,ng {ra {« a, * fsa! ༞ ཨྰཿམྦྷོ སནྟོ The rest on infontem Serate Committee Prut No 2 is beloved to be much Investment - od at least be permutter in Government bot an, It is animatgested that Pais section, be amen li to prov. de sabe bogry, holding company, or orlaw? 1 for any for tractor its ar the officers of die tor tercaf to own, operate chatter or act as efore 2 Vesse's or for an interests, unless and until permission is first the Authority in accordance with reg lations and or lers pre cred 7517 P New Wie se tion 11 g of the Merchant Marine Act 1920, fed provides for instrat ce protection for atto ints advanced as constrietid til if that provision wo. I extend to the ecrstruction -dv. It im rested therefore that at the end of sect. it. 317 1- 1 a new subdivision, to the folowing effect owner of any vessel einstructed unde e for Vistors of ** f ·}a red to ca”A INSTA eo pa sa to the lote! States in addition to T red to be carried b. meton 11 of the Merchant Marte Act lah atoa teal to the an-int of any str chon liferetat, al sabe • vesse! 2 • eutection the question also grea whether the performance of the med by a recipient of a construct, in, in a call me PVC for a certain period M A reference to this matter found in the first sentence of sext. 5, 30, of ** gibaly introduced ? askeer on, fed i Serate Color thee Frut No of prova le i for ir, sector 201as antarer fly for a limite i prpose It is trata proveton, be inc ded a tseneng and directing the Vather.tv 1. Twenty, in the form of a bud, Lin, ete to be given to protect et fit,terest in this matter 01 The new cot-triction s Esidy provide 1 for in, th.- 1,ll as expressly to stop for forengi tra le but there exists considera' le doubt under the is as to whether a construction leat, should be granted in aid of service eer gaged in domestic commerce This don t is one of policy rather as to legs, power and it may be des.ra' le to remove it in correct on with the actuent of section, 11 of the Merchant Marte Act 1920 On the ore lard etly ang ed that all domestic commerce is a protected trade, and within trade our operation should not be favored over another by additional Govern ment aid. On the other hand a deep sea coastwise ship is just as valuable as any other in time of national emergency and in the interests of both safety and of replacements there is much to be said for the policy of making the construction loan fund available in the domestic trade. Section 602: While section 302 of the Merchant Marine Act, 1928, authorized enlargement of the constrction loan fund to a total amount of $250,000,000, the amount actually in the fund at present is only $150,500,000, of which $39,392,150.35 is now available in cash and the balance is represented by unpaid construction loans. This blance may well prove inadequate for the increased demands which will be made upon the fund under the terms of the present bill. It is suggested therefore that proceeds from sales of ships and surplus property and/or interest on construction loans be authorized to be added to the construction loan fund subject to the total limitation provided in section 302. REGULATION Section 701: Subdivision (1) gives the Authority specific power to prescribe minimum rates in interstate commerce. Subdivision (3) gives it specific power to prescribe minimum rates in intercoastal commerce but only in connection with suspension proceedings. The proposed change in section 18 of the Shipping Act, 1916, fails to require the filing of actual rates and the change in the Intercoastal Shipping Act fails to specifically say that minimum rate power can be exercised in complaint proceedings as well as in suspension proceedings. Great confusion will result if these two additional provisions are not specifically enacted and it is highly improbable that failure to put such provisions in the bill is intentional. The simplest way to accomplish this appears to be the following: On page 32, line 3, (p. 33, line 18) strike out the words "the last paragraph of" and strike out all of lines 5 to 11 (p. 33, line 20, to p. 34, line 2). In lieu thereof insert the first paragraph of section 18 of the present Shipping Act, 1916, omit the remaining paragraphs, and add a new paragraph to read as follows: The provisions of the Intercoastal Shipping Act, 1933, as amended, shall also apply to all interstate transportation engaged in by any common carrier by water in interstate commerce as defined in section 1 of the Shipping Act, 1916, and every such carrier is hereby made subject to the provisions of said Intercoastal Shipping Act, 1933, as amended." On page 33, line 18 (p. 35, line 9) the words "and may prescribe" should be struck out and on the same page in line 23 (line 14) the word "and" should be changed to "or." In lieu of the words "and may prescribe" in line 18 (line 9) put a period after "effective" and insert "Such orders, whether issued in suspension proceedings or under section 22 of the Shipping Act, 1916, as amended, may in appropriate cases prescribe." Some question has arisen under section 19 of the Merchant Marine Act, 1920, as it reads today, as to our power to enforce obedience to any rules and regulations. Section 29 of the Shipping Act, 1916, provides a method of enforcing orders and it therefore seems best to have section 19 provide for the fixing of rates, regulations, rules, etc., by orders. This can be done by making the following changes on page 32: In line 14 (line 5) strike out the word "make" and insert in lieu thereof "prescribe and order enforced" and in line 22 (line 13) after the word "prescribe" insert "and order enforced the." A number of apparent typographical errors appear in this section 19 as amended on page 32 (page 34). These can be corrected by the following: In line 14 (line 5) change the word "a" to "the". In line 18 (line 9) insert the word "in" after the word "or". In line 23 (line 14) strike out the words "rules and practices." In line 24 (line 15) strike out the words "and enforced" and insert in lieu thereof "and rules and practices to be observed". Section 702 (c): The question arises whether purely advisory powers conferred upon the Joint Transportation Board are sufficient, or whether that Board should have authority to make a controlling decision in the event of conflict between rail and water policies or between decisions of the two agencies. It is difficult to answer such a question a priori. Under all the conditions it is perhaps unnecessary to do so because if a few months' experience shows the desirability of giving the Board greater power that can readily be done by subsequent legislation. Section 1005: It is recommended, be rewritten to give the Authority discretion as to when it should participate in conference discussions and negotiations, for the reason, among other things, that it would be practically impossible to have sufficient personnel to sit in on every such meeting held. This section should also be amended so that such representatives would not be voting upon con The actions taken as a result of such decisions will frequently re the Authority in its regulatory duties to decide whether or not such ates the law. It is believed that a proper penalty for the refusal by a to permit representatives of the Authority to sit in on discussions te t-approval of the agreement The first change has already been made Ste Corinattee Prist No. 2 and can be effected in H. R. 7521 by striking e words "and directed" page 48, lines 16-17. The other change can be *.tit.tig the word "negotiations" for the word "decisions" in tem (5, page 46, l' es 14 and 20 page 48, lines 18 and 24), and by striking es 21 and 22 on page 46 lines 1 and 2 on page 49 and substituting in lieu temd te words "be deemed sufficient reason for the disapproval of such pool, or nasociation agreement”. 1006. T ́is section should be amended to cover receivers of freight as I view of the use of the word "contract" in section 1009 it confusing to use the word "contract" in section 1006. It is also ««i t'at t'is section should be limited to conferences in foreign trade. a' ges can be effected by striking out in line 24, page 46 line 4, p. 49), enter into contracts and substituting "agree in writing", by striking it is in line 25 line 5 providing for a" and inserting in heu thereof avers of freight in foreign trade to", by striking out the first word "of" 3. and by inserting the words "or receiver of freight" twice in each time after the word "shipper." As so amended the section follows thority shall have the power to permit members of conferences to riting with shippers or receivers of freight in foreign trade to return a 1 part of freight moneys to the shipper or receiver of freight in conof the shipper or receiver of freight confining his shipments to lines ls which are members of the conference." present form, this section may prove ambiguous as to whether it goes to e extent of authorizing deferred rebates as prohibited in section 14 of the ShipA t of 1916 This Baren 1 is not prepared to recommend sich a relaxation pretation now found in section 14. It is also suggested that it might be carify túas section and remove possible ambiguity by adding an approin 1009 In view of the prohibition in section 14 against fighting ships to permit American-flag fighting ships to operate while probabiting gslups to so operate might be in violation of treaties, it is believed that sold be substantially modified. It is suggested that this be done out all of the section appearing after the word "vessel" in line 3, lite 6 page 50), and by inserting in line 1 line 4 between the words ia: the following. "in such manner as it deems advisable ". new). A new section should be written prohibiting false billing This is something which carriers are unanimous in desiring and no stupper or anyone else can properly oppose. False Filling by shippers is practice widely used today. It is suggested that a section similar cated in the Fastman bill introduced by Mr. Wheeler S 1632) wi This provision is found on page 47 of that bill, section 221 (e). Dew: One of the weaknesses of the present situation is the fact there is no specific penalty for a violation of an order issued by the Shipping It is ggested that section 32 of the Shipping Act of 1916 should be ei to read as follows: whoever violates any provision of this Act or any order promulgated by Urated States Maritime Authority, except where a different penalty is probe guilts of a misdemeanor, punishable by a fine not to exceed $5,000 ** ORGANIZATION AND ADMINISTRATION want the comments have related to the proposed new substantive The full provides also for major changes in organization and adminmost important of which is the creation of a United States Maritime Our comments on this phase of the bill are prefaced with a brief ent as to the widely varying nature of the functions to be adu nastered. w!,e}; is now at the same time charged with administration of Elatters, with administration of some but not all of the existing subai with amir istration of the Government's busities in terests as owner, m. *gage, and or irure, etc of vorsels feels that it should briefly more of the considerations bearing on the question whether all of these The cansen of functions should be exercised by the same agency. This ques tion becomes even more important if the new direct subsidies proposed in the pending bill are enacted. The exercise of the sovereign power of regulation should ordinarily be separated as completely as possible from all conflicting influences. There is an incongruity in a Government agency in its regulatory capacity passing in a quasi-judicial manner on the possibly conflicting interests of several lines, one of which may be independent or foreign whereas another may be Government owned and operated, or subsidized by, mortaged to, and/or insured by that same agency. But the regulation of deep-sea carriers by water is a very different matter from regulation of domestic carriers and public utilities with which we are so familiar in this country. Its occasion and purpose are not merely the protection of shippers and users, but, especially with the addition of the minimum rate provisions now proposed, extend also to the protection of carriers (both Americanflag and foreign) against each other, to the protection of American-flag carriers against lower cost foreign carriers, and finally to the protection of the taxpayer who, in the last analysis, pays the subsidy. There is an inevitable relation between subsidy and regulation which cannot be ignored, whether the two functions are in the same or in different agencies. There is little question that the same agency should not administer regulation and also administer the Government's business interests as owner, operator, mortgagee, and/or insurer, etc. The experience of the former Shipping Board also indicates that one would almost inevitabley be subordinated to the other. On the other hand, as has just been seen, there is a relation between regulation and subsidies which from one standpoint would justify the administration of the one and the granting of the other being handled by the same quasi-judicial agency. This was recognized in the report of the Interdepartmental Committee on Shipping Policy transmitted to Congress with the President's message of March 4, 1935. That report contemplated the merging of these two functions in a single agency and the retention in the Department of Commerce of the administration of all the Government's business interests as well as the day-by-day detail of administering the subsidy contracts. This Bureau questions the advisability of merging all three of these classes of functions in the same agency, as is proposed to a greater or less extent by the pending bill. Concretely, it believes that the proposed Maritime Authority should in any event not be burdened with the latter group of what may for want of a better term be referred to as the Government's business interests. It is recognized that there are arguments both ways as to whether the first two groups should be united in the same agency. Probably the best immediate solution would be to transfer to the Maritime Authority at this time a limited list of functions, viz: 1. Administration of the regulatory powers; 2. Authority to adjust and settle all existing contracts between shipping companies and the Government (including Shipping Board as well as postal contracts); 3. Award of new subsidies (including construction loans) and possibly 4. Conducting all or some of the studies and investigations called for in sections 202 and 203 of the bill. The seemingly short list of functions just mentioned can well employ the full time and attention for the first 10 or 12 months of the highest-caliber Maritime Authority that could be assembled. We feel that the best results toward upbuilding a merchant marine will be accomplished if the Authority is not burdened from the outset with multitudinous and time-consuming administrative duties. We therefore suggest that only the above-mentioned duties be transferred to the Authority at this time. Congress will be in session again the first of the year, and further adjustment of functions, if found advisable, can then be made. It would appear that this suggestion substantially conforms with both the spirit and letter of Senate Committee Print No. 2, with a few exceptions, the most notable of which are the provisions of sections 602 and 603 transferring to the Authority the administration of construction loan notes and mortgages, etc., and the administration of the insurance fund. In accordance with the suggestions just made, it would seem that these functions should for the time being remain in the Department of Commerce. Specific changes in the bill necessary to effect these suggestions would be to omit entirely sections 602, 603, and 901. The latter section would appear to be unnecessary because all the power and authority therein referred to and not transferred to the new Authority are now already vested in the Department of Com t Fleet Corvorstion, and furthermore the cor clade git ro Milti, t nii such powers would be vested it De Secretary of saya d unnecessarily disarrange the presetacca.......at iɔ partiiert and the Verchant Fest Corperat oʻ it it be we to add to the bill a new general provision, to the *** made erary facial aid or co2 struction lean Vancat ved tito III, IV, Vor VI of this Act, the entire matter all be transmitted by the At crits to the if wat away sent a imustestion thereof at the same tha her agence as are tow availa' le to fun in Ue adhafistration tesop the former N, jag Board " to corre pordi guy an end Section, 601 by addig at the Con.matted E5, † No 2 the wor sparasties relate for and the granting of and prescritag the cor fitios of con 1 MISCELLANEOUS I am chathere are many other provisions of law which affet the I are stil, cited in effect, it is agrested that the word for the worst s Act inie 140 page 2 * ¥ * a I la prusa tform this provastiti sextos ton aunted It is at at the e. 1 of 1 e 2 ou pare 7 iPe 26 of page 6 there be he importers and exporters of the United i to give prefere, ce to vesels under United States registry Vauverte, g and scnotation on the part of the operators The words "of t'e Prated States" on page 8 lie 8 line 31 be “in the 1 ted States W le * propo ed new Maritime Authority world, in e ng Beard birvai Lave power to super‚å wifi ennem, ristors matters, experience han mi wn the need for ttern afters w the reed w The even greater in connection * 11. fixed upon the Astronity under sections 202, 203, 204, and Smlar power is also given under the securities Act If such dered res sats for the protection of investers they are equally II text on, of tæpa ens It is gated there are that the ། ཝཱ ཏི*སྡེ? Wi classabotat : is the same as the correspondu g pro11te added action, 203 the purpose of WV HLvestigation wher ry a trorfor the enforcement of any offer or er blot ee designate 1} ➢s;।a! titu"t‚?c, a A in the opinion of the ft. ***, a' feller it is empower to nda witnesses, taxe ev DAT DE af or other dee Such attend ree of wit ནོ ཨམཝཾ w 1a! }f£ཐཱs mentary evidence may be rec, ured fr 155 parce in the Territory at gay dengated place of besring Is a id.tion to the scrapping sut sady provided in this section, o made for the poss, le placi og back in sey of Cre'd yemele ma of vessels as thathor a case arose in which, the pterests of the merchant Test? note i if the Denartre ↑ of Commerce had posRE atk 2 veseis prev lised to a l e were as a re-it of it was ford that 2 other vese it. eir land-lip feet world 1: d Tefter sdapted to its service st: hard and better adapted to the preser↑ preds of the It is abos ggested that the last sentence be rytie i to permit so T${i= es, til as well as those acquired under this sector, and to or tv to scrap includes t'at to well for serai jai g 1st after the words "res or ghle vabo el page 11 are 10 te ad fed “in the world maret", and that after · su.fable etrere le adued' provided there is a shortage of tonnage in, sich, service |