There are now in your committee two bills introduced by me on J. n'iry 23, 1.65 (H. R. 4525 and II. R. 4526), either of which, if adopted, would have erreted the cor-dition existing at San Dago. As one of these balls (HR. would proably have disera är ited against certain inland ports, I . ! to only ask consideration of the bill H. R 4528. Knowing that the benyte Committee on Interstate Commerce was holding hearings on their ater cartier bl (8–1652), I requested Senator Burton K. Wheeler, chairman a ommittee, in letter dated March 19, 1935, to incorporate in the bill the su' stance of my bill H. R. 4526, as un amendment to be inserted sertiola 2–3 cd), on page 55, line 4, after the word "order", as Provided, That it shall be unlawful for any common carrier by water, *her direty or indirestij through the medium of an agreement, conference, Bonnie'. l, unserstanding, or otherwise, to prevent or attempt to prevent nu à enrer from extending service to any port located on any ika I. Cut let project authorized by Congress, at the same rates which it it its beatest regular port of Gill, provide that said improvement and all belle, latest port of call sha'l both He within one of the following a dat is of the United States, to wit - The Pacific coast from the Canadian t the Mexican border; the Gulf coast from the Mexican border add incuding Key West; the Atlantic coast from Key West (exclusive) j- Hatteras; the Atlantic coast from Cape Hatteras to the Canadian At that time the House water carrier bill was in the Committee on Interstate Bores,ʼn Comtuerce In view of the nature of the proposed legislation new ge to derved by your committee the proposed at endment sent to you with aug writer of April 1 may be more appropriate thin le che quoted Hated ifciy Il-wever, it is vital to the future of San Diego and the surrounding territory that relief be given It should be mentioned that failing to get the fun zu vef desired, the Shipping Board Bure, u was appealed to to lift the arbitratɔ jaced up nisl jy ong cut of San D; 20 H bor several years 8jo Tis 1. AL Wh as the Trans Pacific arbitrary case" Slaw the hearing held in 11 is cam in September 1963, at which time a brief was submitted in behalf of the part of San Diego, the steamship Unes involved in this trade have found « l« f; m mon'h to month to cause the Shipping Board Bureau to postpone vas a live the limit date set for filing of steamship sites" brief Their brief is ade on May 1, but it would not be sti:prising to again see the time exter ded. Even should it not be, the port of San Diego must then file an answer to their Beraf before the matter can be studied by the examiner who held hearings at San Diego in September 1963 It will probably take several months for him to render his recommencation, following which counsel on both sides will fle jestions if the examiner's recou mendation is not in accord to their respective eve fetitions, Ench de then has the privilege of answering the other's oljee. 1. as brief. Then the matter is up to the Shipping Board Bureau for final Camasan It will, therefore, be at least another year before a decision is reached the Trans Pacific arbitrary case, In the meantime the port of San Diego will be deprived of the opportunity of parating in any of this business which will not only result in a great loss to its own slipping but will keep hundreds from participating in gain'ul operaThis will resuit naturally, notwithstanding the fact that San Diego has car of the finest natural harbors in the United States and its port facilities are rst extensive and modern. Let the here quote from title I of your bid H. R. Declaration of Policy as follows: Sa 10x 1. It is necessary for the national defense and development of its ren and domestic commerce that the United States shall have a merchant marine (1) sumcient to carry at least one-half of the foreign commerce of the Uz.ted States and to provide shipping service on all routes essential for maintaining the flow of national commerce at all times, (2) capable of serving as a masmi and military auxiliary in time of war or national emergency. (3) owned atei operated under the United States flag by citizens of the United States and ses exerated and regulated as to secure to the shipper of American products clesinate service and parity of rates to foreign markets. Ï him in just what we are asking for the port of San Diego—“ to secure to the shipper of American products adequate service and parity of rates to foreign markets” Under present conference discriminations the port of Sun Diego and the fertile territory for which the port is the natural outlet is deprived of the shipping business of hundreds of shippers of agriculture of all kinds, in cluding fruits, fruit juices, and extracts, cotton, vegetables, olives, and nuts, canned fish, and many other valuable products. This will continue until this conference restraint or trade business is broken up. Most of the steamship conferences are comprised of foreign-flag lines. Not that American-flag lines do not approve of conferences, but there are more foreign-flag lines operating to and from our ports in foreign trade. Too, all foreign-flag lines do not belong to conferences. However, the conferences existing exert sufficient power to influence nonconference operators, whether American or foreign flag. We have a very recent case of the Pacific Coast-European Conference, composed entirely of foreign-flag lines-17 or 18 lines-exerting this influence upon the only American-flag line-nonconference-in the PacificEuropean trade. This line, the Isthmian Line, has been calling at the port of San Diego for some time-irregularly in the beginning, but with a great deal of regularity in the past year-lifting grapefruit juice manufactured in National City, destined to London, and miscellaneous cargo. Regularity of calls was just beginning to be such that cotton shippers in the interior could depend upon it when the Pacific Coast-European Conference of 17 or 18 ship lines put through a rule that no vessel would be permitted to call at the port of San Diego for less than $1,500 revenue per call. While the Isthmian Line is not a member of the conference, the conference exerts sufficient influence to cause the Isthmian Line to abide by its rules. An Isthmian Line representative sits in the conference meetings but has no vote. However, the rules and regulations laid down by the conference are followed by the Isthmian Line. It is apparent that the Isthmian Line must abide by the rules and regulations of the conference to avoid gang throat cutting by conference lines. Another recent incident is the promulgation of an arbitrary of $1 per ton and a 500-ton minimum against the port of San Diego over Los Angeles Harbor by the Argentine-Brazil-River Platte Conference. It is my understanding this conference is comprised in the majority of foreign lines. This action came swiftly following efforts of San Diego to develop a movement of Argentine corn through that port, followed by efforts to induce one of the lines in the trade to call their vessels direct with the tonnage. The conference apparently realized that whatever lines succumbed to the pleas of San Diego to call their vessels direct would have an advantage for that particular business over the. lines that did not desire to call direct. Consequently, the conference set out to prevent this happening and did, for it is obvious that the shipping of the Port of San Diego cannot be increased in the face of arbitraries and the many other prohibitions. As stated above these conferences are composed in the majority of foreign steamship lines. Several American lines are members of the conference and receive subsidies from the Government now in the form of mail contracts. Other American-flag lines in the conference have received construction loans, etc. If they were prohibited in the manner I have suggested in any shipping subsidy legislation formulated by your committee, they could not belong to this foreign-controlled conference, else it would have to be a part of the preamble of the conference not to interfere or attempt to interfere with any line desiring to serve any ports. We only ask for equality of rates with other ports and that conference restrictions be not placed upon the port of San Diego and the communities served thereby. I enclose, and make a part of this letter, a statement going into different phases of this situation, and sincerely trust these will be given the careful and favorable consideration of your committee that they deserve. Respectfully submitted. GEO. BURNHAM. BASIC PRINCIPLES JUSTIFYING THE AMENDMENT TO THE SHIPPING ACT OF 1916, PROPOSED IN H. R. 4525 AND H. R. 4526 Introduced by Congressman George Burnham, Twentieth District of California, San Diego 1. The provisions of H. R. 4526, in part, are now a law as to intercoastal steamship lines only through the Panama Canal. Experience has proved their value in connection with the intercoastal operators; and it has been found that the proposed law is absolutely necessary for the port of San Diego and ports similarly situated, as protection from discriminatory practices by lines plying between foreign ports and ports of the United States and its possessions, and by lines plying in the coastwise trade. 2 € o lunations in restraint of trade are illegal in all lines of business ex opat ocean shipping, as permitted by the Shipping Act of 1916. aie Sopping Act recognizes combinations of steamship companies, per1. Valg rothiines, conferences, or associations to initiate action either in service rates, subject to approval by the United States Shipping Board Bureau; if such actions are considered discriminatory, or otherwise unlawful of jen tuota de to certain ports and shippers, a long drawn out hearing and 1 seng ortak briefing of facts and arguments are fieces,ry to correct the situa Ir-twit, standing the fact that a member line of such conterence may desire to extend its service to additional ports at rates the same as it charges its realest regular port of call. To date conferences have not permitted individual - r the prerogative of following their desires in this regard. 15e United States Shipping Board Bureau authority over foreign and rastu, se rates (interstate) is limited only to maximum rates, which are required to be flied with the Board by the carriers, thereby enabling conferences afe to inutvidual members rates at variance as between different ports. I e Intercoastal Shipping Act of 1933, in which there is incorporated the prox sions of HR 4526 in part, confers regulatory powers on the Shipping Earl Furyau only as to intercoastal shipping through the Panama Canal, and ** Lot Pullove the right of conferences, etc., to establish rates, rules, and es in foreign and coastwise services in variance as between different ports. • Ile Slapping Act of 1916 does not require the establishment of service, what such action in the hands of combinations of shipping companies, or dral shipping companies when permitted by conferences, etc., thereby 12 it possible for combinations, conferences, and associations to prevent is macht, which they do, of service to ports additional to those aiready at rates charged the nearest port of call to the added port. 71 Fevral Government, on recommendations of the War Department, of A. my Ei gineers, are continually approving new harbor and waterway **ts which are, for the most part, justified by a result in saving in transtation comt, relieving congestion and providing additional national defense. teter, Me Shapping Act, as amended to date, is an instrument tending to 3 the fui væ'ue of Federal expenditures on new port and waterway ofa through absence of prohibition of combinations, conferences, etc., to tumen bers of such agreements, combines, associations, and conferences ter¿ the new facilities at rates permitting their use as contemplated by War Department, Board of Army Engineers, when the projects were * U19sestionably it is wrong for the Federal Government to expend the ta 13% jers` money on harbor and waterway improvements, and at the same time private steamship companies through agreements, combines, conferences, **** **pon® to nullify the Tui vaite of these expenditures. A for the purpose of serving certain areas better than are, or may be, served sting facilities, are new harbor and waterway projects recommended by Baru of Army Engineers and autorized by Congress, thereby assisting in captent and prosperity of area concerned However, this purpose may and is defeated and development and prosperity greatly retarded through we bination of private interests which are unsound and not in the publie *** The Shipping Act of 1916 should be amended, making illegal these prae-*;*rmatted by law and actusly done by groups of shipping interests, thereby wing at v member of combines, conferences, associations, ete, who so desires, next rod service to any terminal or port at rates which it charges for service Learest regular port of call 11 Present practices aid porties of conferences preventing individual mem?« from extending service to additional ports and charging rates the same as Forged their tearest regular port of call retards the development of certain its of this country, and such business as can withstand the practice and aurs of the conferer ces, causing higher transportation cost, is forced through eyrapetang ports and from the port to which it naturally belongs and should To through 12 The port of San Diego, Calif., experiences at the present time a case it at that of the Pacific Westbound Comerence prohibiting member lines eating slips at the port to lift cotton and general cargo at terminal rates or tates which are the same as in effect at Los Angeles Harbor, with the exception of gypsum and scrap iron for oriental ports. The trans-Pacific Line cailing at túm jort at present to lift gypsum and scrap iron is a member of that con ference and desires to lift cotton and other general cargo at the rates applied at its nearest regular port of call, Los Angeles Harbor; but the conference has prohibited this, and requires that tonnage lifted at the port of San Diego, with the exception of these two commodities, be assessed an arbitrary of $2.50 per ton over and above terminal rates, which are the rates charged at the nearest regular port of call of the line, notwithstanding the fact that vessels may be in port loading one or the other or both of these commodities, and the cotton and general cargo could be taken by said vessels. In addition, handling charges averaging 60 cents per ton are exacted, which are double like charges at the nearest regular port of call of the line, or are not exacted at all at said port or other ports of call of the line's vessels. 13. This conflict or lack of coordination in the merchant-marine policy affecting the development of United States ports and waterways is not in the public interest or the interest of the merchant marine and should be promptly rectified. Nearly a million dollars has been expended by the Federal Government in the past few years in deepening and widening the San Diego Harbor entrance channel, the value of which is at least partially nullified by the action of the Pacific Westbound Conference; $1,800,000 more has been recommended by the War Department Board of Army Engineers and the Rivers and Harbors Committee for widening the inside channel. 14. The Congress recognized the policy of providing for equalization of rates to new or additional ports with rates applying at the nearest port of call in passing the Intercoastal Shipping Act of 1933, applying to the intercoastal trade through the Panama Canal, by withholding from the Shipping Board Bureau the right to prevent equal rates, which act also prevents combinations of private interests from preventing members to accord equal rates, leaving the individual members free to do as they wish, but the law does not apply to foreign and coastwise operators. The proposed amendment is designed to correct this evil and lack of regulation. 15. At the committee hearing on the Intercoastal Shipping Act of 1933 an amendment was requested recognizing the soundness of allowing no one to prevent steamers from going to additional ports at the rates they charge at their nearest regular port of call, and amendment was made in view of the fact when the amendment was presented, representatives of shipping companies (who strongly urged passage of the intercoastal bill) were asked whether they saw any objection to the amendment, and it is understood their replies were they did not see any objection, and others not asked interposed no objection; consequently, it is felt they would not now oppose the proposed amendment, which simply makes effective the amendment already incorporated in the Intercoastal Shipping Act of 1933, applicable to foreign and coastwise lines. 16. Problems of the port of San Diego, in addition to the trans-Pacific arbitrary, already outlined in paragraph 12, which the proposed amendment will solve, include A. The Pacific Coastwise Conference, covering the carriers in the Pacific coastwise trade, prevents member lines according San Diego the same rates as Los Angeles Harbor, or a more equitable relationship of rates, notwithstanding certain members of the conference desire to do so. Such practices are not permitted in the Interstate Commerce Act applying to the rail carriers, each carrier being free to do as they like and prohibited from interfering with another only through complaint to the Interstate Commerce Commission. B. Handling charges exacted by steamship lines calling at the port of San Diego, through the guise of the San Diego Steamship Association, which is unknown, the lines calling in reality being dictated to by the Los Angeles Steamship Association, to which they and many others not calling at San Diego are members, are double like charges at Los Angeles Harbor. No handling charges at all are exacted at San Francisco. The port of San Diego is endeavoring to handle inland tonnage tributary to the port and has found it very difficultin fact, practically impossible due to the steamship lines calling at San Diego also calling at the port of Los Angeles, which is able to serve practically the same tributary territory cheaper than the port of San Diego, due to the handling charge there being one-half of the amount exacted at San Diego. 17. The Federal Government expenditures on San Diego Harbor approximate $14,000,000 to date, and the community expenditures $6,000,000, with the 5-year plan of the San Diego Harbor Commission calling for the expenditure of approximately $1,000,000 for general improvements, including piers and bulkheads, etc., all of which will be nullified to a large degree by rates, rules, ns, and practices of steamship conferences, associations, combines, „Tremebis, 18 at is a deplorable situation, where one arm of the Federal Government is pooja zaide for the expenditure of large sums for harbor and waterway improvewe ́s, and another aim of the Federal Government is either without authority - wer to, or will not, initiate action to prevent private shipping interests, c.h combines, conferences, associations, or otherwise, to nully the full Ta.. f the expenditures made through the arm of the Federal Government first ed Tue proposed amendment will coordinate and rectify this situation. alear encucnt is not meant to, and will not, force any steamship com*@_tv_ex'x Dj service. The amendment simply makes it possible for any steamLy to extend service and apply rates for such service according to the um.rem où the particu¡ ir steamship company without interference frota any other * aật (Vok]mkny, either directly or indirectið. He SHY'ʻR O, BLAND, WASHINGTON, D. C., April 29, 1935. Chairman Committed on Merchant Marine and Fisheries, House of Representatives. 1%. & MR. CHAIRMAN: Supplementing my letter to you dated April 27, I now se three cup es of Senate Joint Resolution No. 16 (California) relative to al gislation granting subsidy or assistance to the American Merchant M》*。, intro uced in the Senate of California April 24, 1935. Will you kindly ize "porate the resolution referred to in my statement of April 27? tl is entfcction I also invite your attention to the printed hearings of the T ton] Mites Senate Committee on Interstate Commerce and the Merchant Mir ne saben mittee of the Committee on Commerce, United States Senate, part 2. Water Carrier Act, 1935, wherein is printed Con pp. 1295 and 1296) my after dated March 6, 1965, addressed to Hen Burton K. Wheeler, Chairman mattoe en Interstate Commerce, United States Senate, together with a copy 751HR 4726 1. »,«fily submitted. GED BURNHAM. Senate Joint RESOLUTION No. 16 RELATIVE TO FEDERAL LEGISLATION GRANTING SUBSIDY OR ASSISTANCE TO THE AMERICAN MERCHANT MARINE Whereas it is deemed desirous by the Government of the United States to give mes for tion to the development of the American Merchant Marine through wance by the Government in the matter of sale of vessels constructed by the rent, in the matter of subsidies, mail contracts, or otherwise; and Where stempships operating over the various trade routes of the world *** grouped into conférer ces or associations granting to the shipping industry a de alle unt of seif government and coordination in the matter of rates and and Where as under Federal laws enacted by the Congress these conferences or tet are relieved of the Sherman Act preventing combinations in the restraint * and Whereas these conferences in the majority of cases, having a preponderance ef foreign ownership through their policies and rules, have seen fit to prevent her members from serving certain American ports, and Whereas it is believed to be a sound policy for the Government of the United *ates to require that all vessels receiving assistance from it through the medium why, ship purchase, or otherwise, should partake in a free and unre stricted flow of traffe through all ports of the United States which have been ved by the use of Federal funds: Now, therefore, be it Ree'red by the Legislature of the State of California, That the Congress of the United States, in connection with any legislation granting subsidy or assistance to the American merchant marine, be requested to incorporate therein the provision that no steam-hip line operating vessels belonging to the United Sa's or purchased or being purchased from the United States or any agency thereof; or any steamship company receiving from the United States or any agency thereof any subsidy or payment through contract for the carrying of ral's or otherwise, shall belong to any conference or association relieved of the Sherman Act which, either through official acts or policies, prevents or at1.336 33---32 |