I made such a report last year, which was printed as Senate Document No. 152, and another one this year, which was printed as House Document No. 89, and in both of those documents you will find what was intended to be a thorough consideration of the water transportation situation and the reasons for the legislation which is recommended. The bill that I am going to discuss this morning is really one part of a comprehensive program which I recommended under section 13 of the Emergency Transportation Act for the improvement of transportation conditions generally. At the outset, I would like to give you, quite briefly, the background for the bill. During the past two decades there has been, as you know, a great change in transportation conditions in this country. Prior to that time and for many years the railroads were by all odds the predominant agency in transportation. They had practically swept the inland waterways, the rivers and the canals, free of the competition of water craft and about the only competition that they met was from steamships on the Great Lakes and along the coast. In the past 20 years or so that situation has completely changed and our investigation shows, according to the best estimates which we could make, that since 1920 there has been invested in transportation facilities which are in one way or another competitive with the railroads a sum equal to as much as 20 billions of dollars. In the same period of time, the railroads have themselves invested in additional facilities about 6 billions of dollars. Most of that large investment has gone into the tremendous system of paved highways which have been constructed throughout the country and on which millions of automotive vehicles now operate. However, the situation has also changed with reference to water carriers. Perhaps the principal reason for the change has been the construction of the Panama Canal, which, as you know, opened up an opportunity for very extensive trade by water between the two coasts of the country. Along with that, there have gone Government expenditures on inland waterways and an improvement at the same time in the character of barge transportation, which are bringing back to the rivers and canals in the interior the craft which, for some years, had completely disappeared. That development in the inland waterways situation has been helped by the regulation of the railroads through the strengthening of the Fourth Section of the Interstate Commerce Act, which prohibits the charging of a lower rate between any two points than is charged to or from intermediate points, except with the approval of the Commission.. And it has also been helped by the provisions in the act which give the Commission power to fix minimum rates for railroads and to establish through routes and joint rates between railroads and connecting water carriers. At the same time, there has been a very extensive development in pipe lines, which carry the bulk of the crude oil and also now carry refined oil and natural gas. There has also been an extensive development, as you know, of airplane service and of electric transmission lines. Now all of these developments which have taken place in the past 20 years or so have resulted in an over supply of transportation faciliies and in a very widespread and bitter competition, not only between he different forms of transportation, but within each particular branch of the industry. Furthermore, there is at present an unfair nd unbalanced situation with respect to competition. The railroads, as you know, are subjected to a very comprehensive and complete system of public regulation. To mention some of the things which are required of them and which affect them in competition with other agencies, the railroads must publish and adhere to their rates. They cannot make changes without previous notice and those changes are subject to protest and to suspension by the Commission, and the protest can be made by competing carriers as well as by the public. The Commission cannot only fix maximum rates, but it can fix minimum rates, and one of the reasons for giving it the power to fix minimum rates, which was granted in 1920, was the protection of other forms of transportation. I have already spoken of the fourth section and how that affects the competitive situation of the railroads. They are under the obligation of joining, upon order of the Commission, through routes and joint rates with connecting water lines, even if it results in short-hauling their own lines, and the Commission can fix reasonable divisions of those joint rates. Furthermore and this has a bearing on their competition with water carriers the railroads have not been permitted by the Commission to establish cargo or train-load rates. The carload is the largest quantity for which they can make a particular rate. Now in the case of the water carriers, we find they are regulated by the Interstate Commerce Commission so far as joint rates with railroads are concerned; we also find that any water lines which the Commission has permitted, under the Panama Canal Act, to be controlled by railroads are subject to its jurisdiction over all of their rates, including their port to port rates. In the case of the intercoastal trade, there is supervision by the Shipping Board Bureau of the Department of Commerce, and that Bureau can fix maximum rates and, while there is some doubt about it, I believe the Board has interpreted the law to permit it also to fix minimum rates. The CHAIRMAN. That is the Intercoastal Act you are talking to? Mr. EASTMAN. The Intercoastal Act, yes, sir. Mr. BREWSTER. I wonder if I might ask a question as you go along? The CHAIRMAN. I would be very glad to have you do so, to amplify it. Mr. BREWSTER. I wonder if you at any point gave the relative change in the transportation of freight between, say, 1920 and 1935, in percentages? Did you give any rough approximation of that shift? Mr. EASTMAN. No, we did not go back to 1920 for that. Mr. EASTMAN. But we did endeavor to find out, as well as we could, what portion for the traffic was being hauled by each particular agency. Mr. BREWSTER. That is what I want. Mr. EASTMAN. First, in 1929, and then in 1932. wish these percentages? Mr. BREWSTER. Yes, I do. In 1929-do you Mr. EASTMAN. Stated in terms of ton-miles, the steam railroads were hauling 72.9 percent; the Great Lakes carriers, 15.8 percent; the pipe lines (of petroleum), 5.2 percent; the intercity trucks, 4.2 percent; the inland waterways, 1.4 percent, and the electric railways and airplanes, 0.5 percent. Now that did not include the coastwise and intercoastal trades, because we were unable to get their traffic stated in ton-miles. Brief submitted by-Continued. Fant, A. P., director industrial division, Memphis, Tenn., Chamber of Commerce_. Page 366 Long, Howard M., solicitor Vessel Owners' and Captains' Association of Philadelphia_. 366 Machen, W. H., representing certain owners of coastwise coal-carrying steamers-- 369 Manghum, H. E., representing Sacramento, Calif., Chamber of Com merce 371 Mathews, David, secretary-treasurer the Pittsburgh Coal Exchange of Philadelphia. 372 McGinnis, J. B., Memphis, Tenn., Harbor Commission__ 373 376 376 HOUSE OF REPRESENTATIVES, COMMITTEE ON THE MERCHANT MARINE AND FISHERIES, Washington, D. C. The committee met at 10 a. m., Hon. Schuyler O. Bland (chairman) presiding. The CHAIRMAN. The hearing is called this morning on H. R. 5379. Mr. Eastman suggested certain amendments and explanations which have been set out in a committee print. We are ready to hear you, Mr. Eastman. STATEMENT OF HON. JOSEPH B. EASTMAN, FEDERAL COORDINATOR OF TRANSPORTATION Mr. EASTMAN. Mr. Chairman, my name is Joseph B. Eastman. I am a member of the Interstate Commerce Commission, now occupying the position of Federal Coordinator of Transportation under the Emergency Railroad Transportation Act, 1933. I appear in support of H. R. 5379 and, before I conclude, I shall present some amendments to the bill as it was originally recommended. The CHAIRMAN. Those are contained in a committee print, are they not? Mr. EASTMAN. They are sir. I desire to call your attention to the provisions of section 13 of the Emergency Act, which imposes upon the Coordinator The CHAIRMAN. Give the reference if you will, Mr. Eastman. Mr. EASTMAN. Section 13 of the Emergency Railroad Transportation Act, 1933. The CHAIRMAN. Public number what? If you have the original act, you will find it on the first page. Mr. EASTMAN. I have the Commission's reprint and apparently it is United States Code, title 49, section 251. Section 13 of that act authorizes and directs the Coordinator forthwith to investigate and consider means, not provided for in this title, of improving transportation conditions throughout the country, including cost finding in rail transportation and the ability, financial or otherwise, of the carriers to improve their properties and furnish service and charge rates which will promote the commerce and industry of the country. It also directs him from time to time to submit to the Commission "such recommendations calling for further legislation to these ends as he may deem necessary or desirable in the public interest." Those are transmitted by the Commission to the President and the Congress with the Commission's recommendations thereon. 1 I made such a report last year, which was printed as Senate Document No. 152, and another one this year, which was printed as House Document No. 89, and in both of those documents you will find what was intended to be a thorough consideration of the water transportation situation and the reasons for the legislation which is recommended. The bill that I am going to discuss this morning is really one part of a comprehensive program which I recommended under section 13 of the Emergency Transportation Act for the improvement of transportation conditions generally. At the outset, I would like to give you, quite briefly, the background for the bill. During the past two decades there has been, as you know, a great change in transportation conditions in this country. Prior to that time and for many years the railroads were by all odds the predominant agency in transportation. They had practically swept the inland waterways, the rivers and the canals, free of the competition of water craft and about the only competition that they met was from steamships on the Great Lakes and along the coast. In the past 20 years or so that situation has completely changed and our investigation shows, according to the best estimates which we could make, that since 1920 there has been invested in transportation facilities which are in one way or another competitive with the railroads a sum equal to as much as 20 billions of dollars. In the same period of time, the railroads have themselves invested in additional facilities about 6 billions of dollars. Most of that large investment has gone into the tremendous system of paved highways which have been constructed throughout the country and on which millions of automotive vehicles now operate. However, the situation has also changed with reference to water carriers. Perhaps the principal reason for the change has been the construction of the Panama Canal, which, as you know, opened up an opportunity for very extensive trade by water between the two coasts of the country. Along with that, there have gone Government expenditures on inland waterways and an improvement at the same time in the character of barge transportation, which are bringing back to the rivers and canals in the interior the craft which, for some years, had completely disappeared. That development in the inland waterways situation has been helped by the regulation of the railroads through the strengthening of the Fourth Section of the Interstate Commerce Act, which prohibits the charging of a lower rate between any two points than is charged to or from intermediate points, except with the approval of the Commission.. And it has also been helped by the provisions in the act which give the Commission power to fix minimum rates for railroads and to establish through routes and joint rates between railroads and connecting water carriers. At the same time, there has been a very extensive development in pipe lines, which carry the bulk of the crude oil and also now carry refined oil and natural gas. There has also been an extensive development, as you know, of airplane service and of electric transmission lines. Now all of these developments which have taken place in the past 20 years or so have resulted in an over supply of transportation facilities and in a very widespread and bitter competition, not only between the different forms of transportation, but within each particular branch of the industry. Furthermore, there is at present an unfair and unbalanced situation with respect to competition. |
