Section 303 (g): Explanatory note regarding the leaving of definition of "ocean tramp", as it presently appears in the Shipping Act, states that this definition will leave to the determination of the Commission in the light of the circumstances surrounding particular operations whether a tramp operator is a common carrier. The definition refers to the vessel. Tramps are thought of as vessels open to charter for bulk cargoes and open to charter on any trade instead of running to a definite schedule. However, in the trans-Atlantic trades a tramp vessel comes westbound with, say, a cargo of ore, wood pulp, clay, or coal and offers for employment and may be picked up by a common carrier operator of tramp type vessels or others and placed on berth for return voyage to Europe. On the other hand, she may be chartered for a full cargo of grain from the United States or Canada to Europe, or go to Cuba for sugar, to Europe, or the Far East. This is a cargo boat commonly called a tramp but she is only a tramp when employed as such and the definition should draw this distinction as the British do in their tramp subsidy payments. This might be accomplished by adding to the proviso "except when operated as a common carrier."

Section 303 (h) "wharfinger": This and other sections relating to wharfingers presents many possibilities and care should be taken to either be very specific or to leave the Commission sufficient discretion in determining to what operations this term applies. We gather that this is the purpose and we note that stevedoring in the loading or unloading of vessels is exempted. It would appear from this that it was intended to eliminate the normal functions of the common carrier. Some of the functions of the common carrier in the receiving and delivering of cargo and transfer of cargo to other vessels might appear to bring them within the term "wharfinger." We have an example under part II which has been enacted whereby the Commission is calling for data from all concerned in trucking freight about New York Harbor area, simply because trucking from New York warehouse to Jersey piers or vice versa is interstate commerce. This, of course, is perfectly ridiculous. Such trucking should not be subject to regulation any more than trucking within the harbor on the New York side only or the Jersey side only.

Some of our carriers deliver their freight into the custody of a separate terminal company, sometimes their own, and said "terminal company handles the cargo and delivers it. Others do this work themselves. Therefore, it would appear that you have a situation where the consignee of freight ex the vessels of a carrier performing the work themselves is not forced to remove his cargo or incur charges for having left it an unusual time on the pier whereas he would incur charges for an identical operation on cargo ex a vessel delivering through a carrier whose terminal delivery operations were in the hands of a separate company. These separate companies are very necessary in many cases because the piers are used by more than one line.

Section 304: In this respect I refer you to my separate letter of February 29 regarding hazardous cargo regulations.

Section 305 (b), line 15: Footnote indicates was intended to strike out word "loading" as well as unloading.

Section 306 (a) provides that every interstate common carrier by water shall file its tariffs covering transportation on the route of such carrier and the route of any carrier by water in foreign commerce when a through route and joint rate shall have been established and the following lettered paragraphs of this section provide that there shall be no change except on 30 days' notice unless approved by the Commission. This act as I read it covers transportation to and from a foreign country. The intercoastal and transAtlantic carriers handle considerable business from the Pacific coast to Europe and from Europe to the Pacific coast. The rates applied to this traffic are usually the rates of the Pacific coast European conference on traffic from the Pacific coast to Europe, and of various European conferences on traffic from Europe to the Pacific coast, but this is not necessarily so nor is it certain that there will always be a conference to keep the rates stable. The intercoastal carriers would appear to have to make rates on traffic from Europe to the Pacific coast when they are not the initiating carriers and per paragraph (b) in dollars even though the rates of the direct lines are in foreign currency the dollar value of which may fluctuate. Of course, the Commission is granted considerable discretion in this respect and one must assume that until such time as the Government proves it can enforce the provisions of section 324 the provisions of section 306 in respect of foreign commerce will not be invoked as joint-rate carriers must have the same amount of flexibility as the carriers with whom they are competing. This same situation holds true in respect to traffic between the Atlantic and the Far East and Australia and traffic between the Pacific and India, South Africa, and other places. Section 307 (d) states that the Commission shall order and prescribe equitable divisions to be received by several parties. The transshipment agreements mentioned in the previous section provide for a division of the freight revenue between the respective carriers, but at least until such time as they can control the rates of the carriers in foreign commerce I do not think they should have the power to prescribe divisions. Even then it would appear to be something that aside from discrimination should be left to the carriers.

Section 323 This section contemplates agreements between common carriers by water in foreign commerce and railroads. The carriers should thereby be permitted to make agreements involving through rates from the interior to foreign destination so that in the treatment of export problems the railroads and the carriers can each share the burden of facilitating exports. To accomplish this a full tariff of export rates should be provided, and they should be entirely divorced from domestic rates so that export problems may be considered strictly on their merits. As it is now the railroad rates are so inflexible that the ocean carriers must absorb the entire cut if they are to effectually meet an exporter's problem involving reduction in transportation charges. The rail and ocean carriers should be permitted to work out through rates, and such rates should not be subject to the provisions of section 25 (4) regarding separation of charges. This could be accomplished by inserting in the second sentence of this paragraph (4) between "bill of lading" and "shall" the words "unless a through rate is established per paragraph (6) of this section." A new paragraph (6) should be added to provide for the

making of through rates and permission for either rail or ocean carrier to withdraw from arrangement on 30 days' notice except where specifically contracted for a longer period.

Section 324: I think the Commission will find it very difficult to apply the provisions of this section on inbound traffic.

Section 326 (1): This should be amended along the lines of section 1106 of H. R. 8555.

Section 327 (2): This should be amended to include in respect of foreign commerce provisions of 321 (c) or the provisions of section 1110 of H. R. 8555.

Section 327 (3): Should this not be amended to make it a misdemeanor for marine insurance company or underwriter to discriminate against carriers?

Section 328: This should include all subject to the act. It is based on section 21 of the Shipping Act, which applies to common carriers by water and other persons subject to the act.

Section 329 makes reference to provisions of section 302 (j). There does not appear to be any section 302 (j) in the act. This section also refers to provisions of section 319. No doubt some language should be used to show that the application of section 319 in this respect shall be understood as applying to water carriers in foreign

commerce.

Section 331: The sections referred to are of such importance that I think they should be specifically inserted and leave no doubt as to their application in foreign commerce; but if the recommendation in respect of section 327 is followed this will be changed somewhat.

FRED S. KEISER, CHAIRMAN, INLAND WATERWAYS COMMITTEE, THE NATIONAL INDUSTRIAL TRAFFIC LEAGUE, DULUTH, MINN.

(Letter of Mar. 2, 1936)

I am enclosing herewith the most recent decision of the Interstate Commerce Commission involving rail-water rates. A perusal of the decision shows conclusively that the entire decision of the Commission is that of measuring water rates and water service with a direct and fixed relation to the more expensive rail service, the net result of which is to further penalize by higher freight rates the shipping and receiving public. To illustrate-the normal basis of rates, first-class, maintained by the water carriers from New York for many years was $1.29. Under this decision this rate is made 65 cents under the corresponding rail rate, which results in a rate to Duluth of $1.52, a raise of 23 cents per hundred pounds. The interior, in part, is raised the same amounts; the lower classes, being made a percentage relation of first-class, are raised correspondingly.

It has been the position of the National Industrial Traffic League and of practically 100 percent of the shipping and receiving public living on the water, and by virtue of water transportation, that the Interstate Commerce Commission would measure water rates by the more expensive rail rates and for that reason the National Industrial Traffic League and others have strenuously opposed the adoption of

the so-called Eastman water bill which gives the Interstate Commerce Commission jurisdiction over water-borne traffic.

Coordinator Eastman has denied repeatedly that the Interstate Commerce Commission would measure water rates by rail rates. Yet here is the latest decision by that august body where every rail-water rate is made a fixed relation to the rail rates. Even the Coordinator's own decision in the Eastern Class Rate case made the rail-water rates from New York to Chicago 90 percent of the all-rail rates from New York to Chicago.

The National Industrial Traffic League fears very strongly that it would be a serious blunder on the part of Congress to vest the control of water rates in the hands of the Interstate Commerce Commission and decisions such as the one we are sending herewith fully justify the fear as to what the Commission will do with our water traffic.

If your committee has been in any doubt as to whether water rates will be measured by rail rates by the Interstate Commerce Commission, this decision certainly will dissipate any such idea, Mr. Eastman to the contrary notwithstanding. The situation would be laughable, if it were not so pathetic.

INTERSTATE COMMERCE COMMISSION

INVESTIGATION AND SUSPENSION DOCKET NO. 3662, LAKE AND RAIL CLASS AND COMMODITY RATES

Submitted June 27, 1935. Decided February 10, 1936.

Upon reargument and reconsideration, findings in prior report, 205 I. C. C. 101, prescribing bases for maximum reasonable joint lake-rail class rates, and rate on certain articles related thereto, between official territory and western trunk-line-Illinois territories, via Lake Superior and Lake Michigan ports,

affirmed

E. H. Burgess, D. P. Connell, R. C. Fyfe, and A. H. Lossow for rail respondents and defendants.

Ernest S. Ballard and Frank W. Sullivan for lake-line respondents and defendants.

Herman L. Bode for complainant.

B. J. Drummond, A. H. Ferguson, Karl Knox Gartner, Fred S. Keiser, R. J. Laubenstein, A. H. Schwietert, Frank B. Townsend, and Neal E. Williams for protestants or also interveners.

SUPPLEMENTAL REPORT OF THE COMMISSION, ON REARGUMENT

MCMANAMY, Commissioner:

In our original report, 205 I. C. C. 101, we found not justified, as a whole, the revised adjustment of joint lake-rail class rates, and rates on certain articles related thereto, between defined portions of official territory and western trunk-line-Illinois territories, via Lake Superior and Lake Michigan ports, proposed by respondents in schedules suspended in I. and S. No. 2662, and after shortened suspension period permitted to become effective March 20, 1932. The

1 This report also embraces No. 24913, Board of Railroad Commissioners of State of South Dakota v. Baltimore & Ohio Railroad Co. et al.; and Investigation and Suspension Docket No. 3805, Class Rates via Rail-Lake-Rail Routes.

same finding was made with respect to the modification of certain of those rates proposed in I. and S. No. 3805. Respondents were required to establish, in lieu of those they had proposed, joint rates over standard lake-rail routes not in excess of the maximum reasonable bases prescribed, or specific differentials below corresponding all-rail rates. We found the rates in issue in no. 24913, between South Dakota and official territory, unreasonable to the extent that they exceeded the bases above described.

A map outlining the territorial scope of the proceeding and the eastern and western areas as defined for rate-making purposes appears as page 199 of the prior report.

Rates and differentials given herein are stated in cents per 100 pounds, and apply to class 1 unless otherwise specified. They do not include authorized emergency charges.

Among the more important changes produced by the bases prescribed in the original report, when contrasted with the situation that existed prior to respondents' revised adjustment, the following may be mentioned: Disruption of parity of Duluth, Minn., with Chicago, Ill., in westbound class rates from New England and most of trunk-line territory, but to a lesser degree than proposed by respondents; lake-rail rates to the Twin Cities (Minneapolis and St. Paul, Minn.) made differentially below corresponding all-rail rates instead of arbitrarily over Duluth; and joint lake-rail rates to and from all western trunkine territory instead of combinations. Changes to and from Lake Michigan ports were less marked. Lake-rail rates were made subject to the same classifications as fixed in the sixth supplemental report in Western class-rate case to govern interterritorial all-rail rates. A special basis was provided for dairy products moving from the producing region (western areas A and B) using lake-rail routes to the heavy consuming territory (eastern area A).

Upon petitions filed by Duluth Chamber of Commerce, jointly by Minneapolis Traffic Association and Saint Paul Association of Commerce, and by rail respondents, seeking modification of the original report as to particular phases, we reopened these proceedings for reargument and reconsideration upon all issues. We thereby recognized the possibility that any action upon matters presented in the petitions might entail a review also of related parts of the readjustment previously prescribed. Reopening was not allowed to delay establishment of that readjustment on August 20, 1935, simultaneously with the readjustment of interritorial all-rail rates required by the sixth supplemental report in Western class-rate case, because of close relation to the latter in which substantial changes, especially as to governing classifications, were to become effective on that date.

Duluth-Chicago parity.-Again of paramount importance is the question of disruption of Duluth's rate parity with Chicago on westbound traffic from eastern territory. Parity never existed in eastbound rates.

The Duluth cases are again cited by Duluth Chamber of Commerce and heavily relied upon. In the first of them we found that westbound lake-rail class rates from trunk-line territory to Duluth in excess of those to Chicago were unduly prejudicial to Duluth and preferential of Chicago. We prescribed rates maintained at that time from New York, N. Y., to Chicago as reasonable to Duluth. From other eastern points to Duluth rates were required to be reduced so as to bear about the same relation to rates from New York as then existed.

Conceding that we are not bound by the rule of stare decisis, Duluth declares our practice to be opposed to changing a decision unless there is a change in conditions, and emphatically denies that there has been any such change insofar as westbound rates to Duluth are concerned. Reference is made to the opinion expressed by the chief witness for the one boat line that operates in both Lake Michigan and Lake Superior services, Great Lakes Transit,* that if there is any advantage it is at Duluth, because absorptions compelled at Chicago in order to meet competition of ocean-rail routes largely offset expenses incurred by reason of 93 miles greater water distance to Duluth. Attention is directed to the attitude of the principal lake lines, Great Lakes Transit and MinnesotaAtlantic Transit, of willingness to restore parity with Chicago's present $1.37

2 Western Trunk-Line Class Rates. Citations of the original and supplemental reports therein are: 164 I. C. C. 1, 173 I. C. C. 637, 178 I. C. C. 619, 181 I. C. C. 301, 196 I. C. C. 494, 197 I. C. C. 57, 204 I. C. C. 595 (the sixth supplemental report), and 210 I. C. C. 312. 3 Commercial Club of Duluth v. Baltimore & O. R. Co., 27 I. C. C. 639, decided June 9, 1913; and Second Duluth Case, 46 I. C. C. 585, decided June 21, 1917.

4 The shortened terms used herein for the names of lake-boat lines and railroads are the same as given in footnote 6 to p. 104 of the prior report.