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Cia. Chilena de Nave.
(tacion Interoceanica.

Cia. Chilena de Nave.
Gacion Interoceanica.

Chiloe, Tarapaca, Magallanes.
State Railways..

Puyehue (ex Alfonso), Villarica (ex Alejandro),

Alondra.
Same vessles as above.

Vorwerk & Co

3 No passengers.

4 Chilean currency.

PACIFIC Coast CEMENT INSTITUTE,

Los Angeles, January 24, 1940.

MEMORANDUM

To: All members of the Pacific Coast Cement Institute.
Subject: Steamship service from Pacific coast ports to the Panama Canal Zone.

For your information, the following communication dated January 17, 1940, was sent to the Honorable Leland M. Ford, Member of the House of Representatives from the Sixteenth District of California and also a member of the Special Committee on National Defense, in reply to his letter of January 8 (copy of his letter was furnished you under date of January 23) requesting a statement of facts "regarding discrimination of rates on steamships carrying freight to and from the Panama Canal Zone.'

JANUARY 17, 1940. Subjects: (1) Discrimination in Steamship Service and Freight Rates Between

New York and Atlantic Coast Ports and Pacific Coast Ports to the Panama Canal Zone. (2) Lack of Steamship Service From Pacific Coast Ports to

Central and South America. Hon. LELAND M. FORD, United States Congressman, and Member of the Special Committee on National

Defense,

House of Representatives, Washington, D. C. HONORABLE SIR: Acknowledging your letter of January 8 requesting a statement of facts pertaining to the discrimination in steamship service and freight rates from the Atlantic and Pacific ports to the Panama Canal Zone.

Steamship service from the Atlantic coast to the Panama Canal Zone.—The Panama Railroad Steamship Co. operates a weekly service exclusively from New York to Cristobal on the Atlantic side of the Panama Canal; this company has been completely owned and controlled by the United States Government since 1904, being operated by the President of the United States as Commander in Chief of the Army under the direct supervision of the Secretary of War. During the past 2 years the Panama Railroad Steamship Co. has had constructed for its use three steamers at a cost of approximately $5,000,000 each which handle 150 passengers and from 6,000 to 7,500 tons of cargo freight; the ships have a dead weight capacity of 10,000 tons.

The other lines operating from New York, Philadelphia, and Baltimore are the Grace and United Fruit Lines; also there are services from New Orleans via the Standard Fruit & Steamship Co. and the United Fruit Co. as well as occasional sailings from Texas and Florida ports by the Lykes Line when tonnage is offered.

Steamship service from Pacific coast ports to the Panama Canal Zone.—There is no comparable service or freight rates from Pacific coast ports to the Panama Canal Zone. However, the following lines flying the American ilag go through or by the Canal:

Grace Line: Operating a monthly service from San Francisco to Centra and South American ports, but at the present time does not stop at the Cana' Zone.

McCormick Steamship Co.: Operates a line known as the Pacific-ArgentineBrazil Line, but will not handle cement to the Canal Zone.

Baltimore Mail Steamship Co.: Operates an intercoastal service between New York and Pacific coast ports, but does not handle freight to the Canal Zone except what might be termed express freight in limited quantities.

Swayne and Hoyt Line: Operates a service from San Francisco and Los Angeles, via the Panama Canal, to the Caribbean Sea and Gulf ports, but does not handle freight to the Canal Zone. Recently this line filed an application with the Maritime Commission for authority to sell six of its boats to A. G. Pappadakis, a Greek citizen residing at Galetz, Rumania, with transfer to Greek registry. (See U. S. Maritime Commission Release PR 469, January

9, 1940.) The intercoastal lines operating between Atlantic and Pacific ports (who are fully protected in this service by laws providing that no foreign lines can handle tonnage in coastwise service) will not handle tonnage to the Canal Zone. The American-Hawaiian Steamship Co. is the largest of the intercoastal lines, and a Maritime Commission on Release of January 13, 1940 (PR 472) states that they have filed an application for authority to sell four of their steamers to Runciman (London) Ltd., London, with transfer to British registry.

Cents per

Freight rates on cement from New York and Pacific coast ports to the Panama Canal Zone when consigned to U. S. Government agencies

hundred lbs. Panama Railroad Steamship Co. rate from New York to Canal Zone.. 1774 Rate from Pacific coast ports to Panama Canal Zone.-

35 To both of the rates indicated the Panama Canal Commission makes a charge at the Canal Zone for the use of docks, handling charges, moving over wharfs, etc., of $1 per ton.

If the private lines operating from New York, etc., desire any cement tonnage to the Canal Zone, they have to, and do, meet the rates quoted by the Panama Railroad Steamship Co.

On the Pacific coast the $7 per ton rate as heretofore indicated (35 cents per 100 pounds) is governed by the Central America-Panama Canal Freight Conference and applies to all intermediate ports in Central America; the following are the participating conference carriers: Baltimore Mail Steamship Co.--

Panama Pacific Line. Compagnie Generale Transatlantique.

French Line.
Grace Line, Inc..

Grace Line.
Hamburg-Amerikanische Packetfahrt Aktien- Hamburg-American Line.

Gesellschaft.
"Italia” Sicieta Anonima di Navigazione. Italian Line.
Kawasaki Kisen Kaisha..

K. Line.
Kerr Steamship Co.
Norddeutscher Lloy-

North German Lloyd.
N. V. Nederlandsch-Amerikaansche Stoomvaart Holland America Line.

Maatschappij.
N. V. Stoomvaart Maatschappij “Nederland”.-- Java Pacific Line..
N. V. Rotterdamsche Lloyd.
Roderiaktiebolagot Nordstjernan..

Johnson Line.
Royal Mail Lines, Ltd.

The same situation applies to the west coast of South America. The following are members of the Pacific/West Coast of South America Conference: Compagnie Generale Transatlantique..

French Line.
Grace Line, Inc.---.

Grace Line.
Hamburg-Amerikanische Packetfahrt Aktien- Hamburg-American Line.

Gesellschaft.
Kawasaki Kisen Kaisha...

K. Line.
Kerr Steamship Co.
Knut Knutsen 0. A. S..

Knutsen Line.
Latin America Line,
Nippon Yusen Kaisya...

N. Y. K. Line.
Norddeutscher Lloyd..

North German Lloyd.
N. V. Nederlandsch-Amerikansche Stoomvaart Holland-America Line.

Maatschappij.
N. V. Stoomvaart Maatschappij “Nederland”.
N. V. Rotterdamsche Lloyd ---

Java Pacific Line.i
Royal Mail Lines, Ltd.
Westfal-Larsen and Co. A/S.

Westfal-Larson Co. Line. 1 Denotes change.

The rates on cement from Pacific coast ports to ports in South America are $6 per ton of 2,240 pounds. The Grace Line is the only company flying the American flag, and this company maintains a service once a month out of Pacific coast ports. The balance of the lines are owned or controlled by European or Japanese companies, and their charges for hauling cement from Japan are $3.50 per ton of 1,000 kilos or approximately $3 per net ton and from continental Europe are 20 shillings per 2,240 pounds, making a net rate of $3.60 per ton. We are attaching a statement prepared by the American consul at Valparaiso, Chile, showing the steamship lines maintaining regular services between foreign countries and Valparaiso, Chile. The statement indicates that to the west coast of South America 28 steamship companies maintain regular service, flying various flags, and only 1 of these said services flies an American flag with a once a month schedule out of San Francisco and Los Angeles. The number of foreign steamer lines plying from Europe and Japan to Central and South American ports bordering on the Pacific Ocean would certainly indicate a large potential tonnage.

229991–40

On tonnage consigned to the United States Government the specifications all provide that the shipments must be made on steamers flying the American flag, and if it were possible to make shipments on foreign boats they are governed by conference rates to Central America of $7 per ton as indicated. If it should be possible for a shipper to secure a tramp steamer, his rates would be increased 20 percent if he again had to use the conference lines. However, the lines operating to Central America which fly the American flag will not handle tonnage to the Canal Zone, so it is impossible for Pacific coast shippers of cement to secure, first, a service; second, freight rates that will enable them to compete with the rates and service accorded by the United States Government-owned lines operating from New York to the Panama Canal.

As far as the foreign lines indicated are concerned, they belong to these so-called conferences governing rates on tonnage moving out of Pacific coast ports to the Canal Zone and points in Central and South America, but on tonnage moving from their home ports in Europe and Japan they are not governed by any conferences and quote rates to move the tonnage. Illustration: The following are excerpts from letters recently received from the American consular representatives at San Jose, Costa Rica, and Lima, Peru: EXCERPT FROM LETTER FROM THE AMERICAN CONSUL AT SAN JOSE, COSTA RICA,

DATED OCTOBER 23, 1939
The following steamship lines ply from Pacific coast ports of the United States
to Puntarenas:
Regular service:

Grace Line.
K-Line (Japanese).

Fred Olson Line (Norwegian).
Irregular Service:

McCormick Steamship Co. (American).
Knutson Line (Scandinavian).
Blue Star Line (British).
Westfal-Larson Line (Scandinavian).
East Asiatic Co. (Danish).
Mosvold Line (British).
French Line.
Italian Line.
Royal Mail Lines (British).

Inter-Ocean Line (Scandinavian). One might gather from the above list that the service from United States ports on the Pacific to Puntarenas is ample, but in actual fact this is not the case, for calls at Puntarenas are infrequent. The Grace Line, like the United Fruit Co., is said not to be interested in handling cement shipments, except for its own account. A number of importers of cement in Costa Rica have complained that although they are willing to import from the United States they cannot find transportation facilities.

Freight rates from Japan are understood to be approximately $3.50 per 1,000 kilograms (approximately $3 per net ton). There are at the present time no quotations for cement from European ports. The rate from New York to Port Limon and from New Orleans to Port Limon is given by the United Fruit Co. as $0.80 per barrel (four sacks). EXCERPT FROM LETTER FROM THE AMERICAN CONSUL AT LIMA, PERU, DATED

OCTOBER 27, 1939 The rate from the United Kingdom to Callao was given as 20 shillings per ton of 2,240 pounds (conversion at the current rate of exchange would make the freight rate approximately $3.66 per ton), plus Callao port charges of 7 percent on the cost of the freight, plus Callao surcharge of 7 shillings per ton. (The rates from continental European ports were issued as being applicable through the end of April 1940. They were, however, issued prior to the outbreak of hostilities in Europe, and they may have been changed considerably on account of war conditions. For more accurate information, it is suggested that you consult with your freight broker.)

The rate from Japanese ports to Callao was given as $3.50 per ton of 1,000 kilos, plus 20 percent, and plus Callao surcharge of $3 per ton. (It is understood that the 20-percent additional charge included above was recently added on account of war conditions.)

NOTE.-It will be noted that the freight rates on cement from Europe and Japan to ports in Central and South America are less than 50 percent of the cement rates from Pacific coast ports to the Panama Canal Zone and to other points in Central and South America,

THE UNITED STATES MARITIME COMMISSION'S POSITION REGARDING THIS UNJUST

DISCRIMINATION IN SERVICE AND FREIGHT RATES BETWEEN ATLANTIC AND PACIFIC PORTS TO THE CANAL ZONE

Zone."

Rear Admiral Land, Chairman of the United States Maritime Commission, wrote various parties under date of November 16, 1939, stating that the situation was called to the attention of the Commission's predecessor, the United States Shipping Board, by the Los Angeles Chamber of Commerce as long ago as October 1932, and the matter was referred to the War Department under whose jurisdiction the Panama Railroad Steamship Co. is operated. The Secretary of War replied as follows:

"The reason for the higher freight rate charged the Pacific coast is not that there is any discrimination on the part of the Government or the steamship lines, but that Pacific coast ports are so much farther from the Canal Zone than is New York."

It does not appear that the Pacific coast can reasonably expect to compete successfully in the furnishing of such a low-priced article as cement to the Canal

If the United States Government would establish from California to the Canal Zone a similar service at the same rates as now exist on the service furnished by the Government from New York to the Canal Zone, there is no question of a doubt in our mind but what the California manufacturers, producers, and growers could compete successfully with New York and other Atlantic ports for Canal business.

As far as freight rates and distances are concerned, desire to draw your attention to the following tables of distances and freight rates on cement from Europe and Japan to Central and South America and from New York to the east coast of South America which indicate, regardless of differences in distance, that the rates are the same.

COMPARISON OF DISTANCES The Secretary of War advised under date of November 30, 1939, that: Distance from New York to the Canal Zone is 1,980 miles, and that Miles distance is increased by calls at Port Au Prince, Haiti, to.

2, 133 Distance from Los Angeles to Panama Canal Zone is.-

2, 913

Difference from Los Angeles to the Canal Zone than from New

York to the Canal Zone.-

780

Distance from San Francisco to the Canal Zone is.
Distance from New York to the Canal Zone is.

3, 365 2, 133

Difference from San Francisco to the Canal Zone than from New

York to the Canal Zone.-

1, 232

To

From

Miles

Hamburg, Germany....

Callao, Peru.
Valparaiso, Chile....

6, 459
7, 729

Difference...

1, 270

Liverpool, England...

Callao, Peru.
Valparaiso, Chile..

5, 937
7, 207

Difference...

1, 270

Hamburg, Germany..

San Jose, Guatemala.
Valparaiso, Chile...

5, 999
7, 729

Difference...

1, 730

New York...

5, 871 4, 770

1, 101

Yokohama, Japan...

Buenos Aires, Argentina.
Rio de Janeiro, Brazil.

Difference...
Canal Zone (via great circle to Cape Lucas, 7,682

miles).
Valparaiso, Chile..

Difference...

7, 781 11, 824

4,043

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