the war, the ports served, and the large number of employees directly engaged in the service. The table below indicates the tonnage moving in coastwise service. It is taken from the Annual Report, 1937, Chief of Engineers, United States Army, and shows the coastwise traffic originated (in cargo tons of 2,240 pounds) at the Atlantic and Gulf ports during the calendar year of 1937, the last year for which separation of this traffic from other domestic traffic can be made. 1 Includes cement; coal and coke; fertilizer and fertilizer materials; wood pulp and pulpwood; petroleum; sand, gravel, and stone; sugar; sirup and molasses; lumber and other forest products. At the end of 1940 there were 516 vessels, of over 1,000 gross tons each, operating in the coastwise trade and some 100,000 persons were directly employed in that trade. Of the 516 vessels engaged in the trade, 125 were owned by 15 lines engaged in regular scheduled service. Attached hereto and marked "A" is a summary statement showing the lines operating in regular coastwise service, the ports served by each, and the number of vessels operated by each prior to the interruption of service due to war necessities. That the regular operators in coastwise service plan to resume service when conditions permit, is indicated by the fact that all of them have filed applications for certificate of public convenience and necessity under part III of the Interstate Commerce Act, most of which have already been granted by the Interstate Commerce Commission. THE ECONOMIC IMPORTANCE OF COASTWISE SERVICES Coastwise service is of inestimable value to the ports and businesses there located, and to shippers at the ports and in the interior; and the present interruption in service in no way indicates that resumption of service is not essential. The commercial importance of coastwise service is apparent from the tremendous volume of traffic handled in the pre-war period. Coastwise shipping forms an important background of port business and, without it, many ports could not survive. Permanent loss of coastwise business would result in deterioration of port facilities in which vast amounts of public and private funds have been invested, and would seriously and adversely affect, if not destroy, many auxiliary port businesses, such as those of warehousing, ship supplying, marine insurance, bunkering, stevedoring, shipyards, and freight forwarding. Coastwise services have afforded economy of transportation to shippers located at the ports. In fact, many industries were located at or in the vicinity of the ports in reliance on the low-cost service afforded. Illustrative of such industries are the soap factories, automobile manufacturers, oil mills, aluminum plants, sugar refineries, the fertilizer industry, the paper and pulpboard mills, and others too numerous to mention. The low value of many basic raw materials precludes their shipment for long distances under normal conditions except by this economical means of transportation. These services have been not merely of benefit to shippers at the ports but also to shippers at interior points. The Interstate Commerce Commission, recognizing the important place which the coastwise service occupies in the Nation's transportation system, has in numerous instances granted fourth section relief to permit the establishment and maintenance of differential rates over ocean-rail routes, related to all-rail rates. The water services, moreover, extend the area of desirable market competition. Thus, for example, under normal conditions, shippers at the Atlantic port cities and in adjacent interior territory distribute a variety of commodities in the Southwest in competition with distributors located in the Middle West. Because of the Midwest competition, the eastern shippers have been dependent upon the ocean-rail and rail-ocean-rail service and rates to reach southwestern markets. Business has been developed and sustained by reason of the existence of these low-cost water services, which have been of advantage also to the areas of distribution through giving them access to competitive sources of products. The service has also enabled producers in the South and Southwest to market rawmaterials and products in Atlantic seaboard territory. The fact that, since the enforced interruption of coastwise service, transportation has been largely provided by land agencies, in no way tends to indicate that the water carriers are dispensable under normal or peacetime conditions. Without in any way depreciating the admirable performance of the land carriers, it is quite obvious that, from the standpoint of ports and shippers, the present commerce of the country, and the conditions under which it is transported, bear no resemblance to normal peacetime trade. The war has forced a radical change in the kinds of commodities manufactured and transported, in the place of production and consumption, and in the directions of traffic movement. The normal factors of supply and demand have not today the same influence in determining where an article will be made or where it will be marketed or used. The great bulk of the present traffic is shipped by or for account of the Government, and the cost of transportation is not a controlling factor. A return to a peacetime basis of commercial enterprise, without prompt restoration of interrupted domestic water services, would leave much of the commercial trade in such a disrupted and dislocated condition as to be a serious threat to the post-war economy of the country. THE PUBLIC IMPORTANCE OF COASTWISE AND INTERCOASTAL SERVICE HAS BEEN CONSTANTLY RECOGNIZED BY CONGRESS AND BY THE UNITED STATES MARITIME COMMISSION Congress has in many ways indicated its views as to the importance of the maintenance of an adequate domestic service. This it did in the preamble to the Merchant Marine Act, 1920, in its declaration policy in the Merchant Marine Act, 1936, in the declaration of national transportation policy in the Transportation Act, 1940, and in its amendment to section 3 (4) of part I of the Interstate Commerce Act. In this connection the declaration of policy set forth in title I, section 101, of the Merchant Marine Act, 1936, is of particular sginificance: "It is necessary for the national defense and development of its foreign and domestic commerce that the United States shall have a merchant marine (a) sufficient to carry its domestic water-borne commerce and a substantial portion of the water-borne export and import foreign commerce of the United States and to provide shipping service on all routes essential for maintainng the flow of such domestic and foreign water-borne commerce at all times, (b) capable of serving as a naval and military auxiliary in time of war or national emergency, (c) owned and operated under the United States flag by citizens of the United States insofar as may be practicable, and (d) composed of the best-equipped, safest, and most suitable types of vessels, constructed in the United States and manned with a trained and efficient citizen personnel. It is hereby declared to be the policy of the United States to foster the development and encoursge the maintenance of such a merchant marine." Similarly, in recognition of the great public importance of the maintenance of adequate domestic water service, the Commission, in its Economic Survey of Coastwise and Intercoastal Shipping, 1939, stated: "It is axiomatic that both the railroads and water carriers are essential in the transportation structure in the territory generally east of the Mississippi River and in the Southwest. Jointly and severally they carry the traffic in an economic area in which the volume of business transacted is probably as great as that of any area of equal extent located elsewhere in the world. Due to the ramifications of the economy in this region, many classes of traffic move in full carload and shipload lots. Every conceivable type of ocean-going carrier, including generalcargo vessels, bulk-freight vessels, tankers, and other specialized equipment, ply the Atlantic and Gulf coast waters, while the railroads operating to and from the seaboards, connecting as they do with the water lines, extend the economies of water transportation to the hinterland. Both types of carriers have been operating for generations; both have legitimate functions; both are "necessary to the national economy. It should also be borne in mind that the coastwise water lines existed long before the railroads and were important factors in the development of that section of the country served by them. These carriers are essential to the national transportation structure" (p. 23). THE PROGRAM RECOMMENDED The value of the coastwise services to the ports and port business, to shippers at the ports and in the interior, and to the national economy calls for restoration of coastwise shipping to its established place in the national transportation system at as early a date as possible. The war building program has generally produced vessels not suitably adapted to operation in coastwise service for the reasons, among others, that they are too large and too slow for economical and profitable operation and are not the sideport type required for many coastwise operations. Vessels of the coast wise lines were taken by the Government for war use and to a large extent have been expended in the war service. The construction program has not so far provided vessels with which these lines could resume operations. In consequence, unless prompt and proper steps are now taken by the Government, the coastwise lines will be prevented from restoring service upon the conclusion of European hostilitise, for lack of suitable vessels, and some of them, if not all, will be permanently put out of business. Wartime ship construction necessarily involves extraordinary costs. These are a part of the general cost of war and cannot be borne by peacetime domestic operators. To the coastwise lines, the post-war value of suitable vessels constructed in wartime can only be measured by a price which will permit profitable operation with efficient management and under economical operating conditions. Unlike other forms of transportation, the nature of the required participation of water carriers in the war effort has necessitated complete suspension of their normal operations. Speaking specifically of the coastwise carriers, it is important that the situation of these carriers be approached with a full appreciation and understanding of this fact and of their operating problems, including the competitive rate ceilings under which they must operate and the effect of the war on handling costs. Resumption of coastwise service will be under conditions which cannot now be fully foreseen but may be substantially different from pre-war conditions, at least at the beginning. The lines will experience a development stage of resumed operations. Their ability to pay for vessels restored on a shortterm basis is, therefore, uncertain and doubtful. I. The conference accordingly recommends that the Government proceed with plans for making available to the coastwise lines any suitable vessels which are now in its possession, and that, if such vessels are not now available in adequate number, preference be given to construction of vessels which can be used in the war effort and later made available to the coastwise lines. II. The conference further recommends that prompt steps be taken to establish a program governing vessel disposals, providing bases for determining prices to and terms of settlement by operators which shall, so far as practicable, permit profitable post-war commercial operations, and that the agencies to which this memorandum is addressed continue to advocate legislation along these lines. The Commission and the Administration are urged to give the foregoing recommendations, and such other procedures as to them may seem appropriate, the earliest practicable consideration. Respectfully submitted. North Atlantic Ports Traffic Conference, by Henry E. Foley (Boston DECEMBER 14, 1944. Coastwise lines operating regular service-Ports served and vessels operated prior to present war Line Agwilines, Inc. (Clyde Mallory Lines). Colonial Navigation Co. Eastern Steamship Lines.. Lykes-Coastwise Line, Inc.. Ports served Boston, New York, Charleston, Jacksonville, New York, Providence, New Bedford. Boston, Baltimore, Norfolk, Galveston, Houston, Merchant & Miners Transportation Co... Boston, Providence, Philadelphia. Baltimore, Mooremack Gulf Lines, Inc.. Newtex Steamship Corporation. Philadelphia & Norfolk Steamship Co... Seatrain Lines, Inc Southern Pacific Co. (Southern Pacific Total (15 lines). Norfolk, Savannah, Jacksonville, Miami. New York, Houston, Brownsville.. Boston, New York, Savannah. Boston, New Bedford, Philadelphia, Camden, New York, Tampa, Port Everglades, Fort Pierce, New York, New Orleans, Texas City. Boston, New Bedford, New York, Baltimore, BRIEF OF THE NATIONAL INDUSTRIAL TRAFFIC LEAGUE Hon. S. O. BLAND, Number of vessels 17 Washington, D. C., February 28, 1945. Chairman, House Committee on the Merchant Marine and Fisheries, House Office Building, Washington, D. C. MY DEAR JUDGE BLAND: The National Industrial Traffic League has not requested time to be heard by your committee in connection with H. R. 1425, a bill to provide for the sale of certain Government-owned merchant vessels, and for other purposes, which has now been reassigned for hearing beginning March 1, 1945, but presents the following statement for the benefit of the record. The National Industrial Traffic League is a national organization of firms and corporations actually engaged in the shipment and receipt of commodities, also, commercial trade and traffic organizations dealing with traffic and transportation matters located within the United States. It has, as you will recall, appeared before your committee from time to time, either through committee chairmen or off cers, in connection with various measures under consideration. The league is not in a position to present any detailed information regarding the proposed sale of certain Government-owned merchant vessels, but its members are very vitally interested in the reestablishment under private ownership and management, of intercoastal and coastwise steamship service at the earliest possible moment. That phase of the subject was considered at the annual meeting of the membership held in Chicago, November 18 and 19, 1943, at which the following resolution was adopted: "The National Industrial Traffic League endorses the principle that coast wise and intercoastal steamship service is essential to the national defense of our Nation and also to the economic development of the country, and that the resumption of full commercial service should not be delayed beyond the actual necessities for the successful prosecution of our current war effort, and further, that such service should be under private ownership and management." The subject was again discussed at our last annual meeting held at New York City, November 16 and 17, 1944, at which its previous position was reconfirmed. It also was the unanimous view of the league that there should be made available an adequate number of suitable ships for the post-war coastwise and intercoastal fleet so that there may be restored by domestic operators, under private management, coastwise and intercoastal service as promptly as may be consistent with the current war effort. We will greatly appreciate your kindness in incorporating this statement as a part of the record in connection with the hearing on the bill above mentioned. Very truly yours, E. F. LACEY, Executive Secretary. (Further statements supplied for the record by the Maritime Commission:) MARCH 7, 1945. STATEMENT OF PRE-WAR WORLD MERCHANT TONNAGE TOTALS Various apparently conflicting figures of 1939 world merchant shipping tonnage are quoted from time to time from different sources. These figures are generally correct, but differ, owing to different bases and units. Confusion therefore arises. Accordingly the following figures are quoted to be of aid in keeping the statistics straight: ! Includes steam and motor ships, sailing vessels, barges, and special types (channel vessels, yachts, whaling tankers, cable ships, etc.) Includes all iron and steel steam and motor vessels built for seagoing, except vessels operating on the Great Lakes and special tyres (except channel vessels). Includes all iron and steel steam and motor merchant vessels built for ocean service. It excludes all Great Lake vessels and all special type vessels. 4 Estimated. Statement of number, gross and dead-weight tonnage of American-flag pre-war merchant vessels, for specified sizes and periods of time [Division of Economics and Statistics, U. S. Maritime Commission, Mar. 13, 1945] Source: Lloyd's Register. Includes all steam and motorships, sailing vessels, barges, and special types (channel vessels, yachts, whaling tankers, cable ships, etc.), except 537 Great Lakes vessels of 2,538,000 gross tons. Source: U. S. Maritime Commission. Includes all seagoing iron and steel steam and motor merchant vessels. Excludes vessels employed on the Great Lakes and special types. (Includes 52 vessels of 381,000 gross tons and 463,000 dead-weight tons in military status.) 3 Source: U. S. Maritime Commission. Includes all oceangoing iron and steel steam and motor mer- PERSONNEL OF POST-WAR PLANNING COMMITTEE R. E. Anderson. James L. Bates. F. M. Darr. Hugh D. Butler. Gerald H. Helmbold. John Miller. |