APPENDIX DATA TO BE PRESENTED TO THE UNITED STATES MARITIME PACIFIC COAST ASSOCIATION OF PORT AUTHORITIES, Re Shortage of intercoastal and coastwise cargo space. Chairman, United States Maritime Commission, Washington, D. C. My DEAR SIR: The Pacific Coast Association of Port Authorities under date of April 11, 1940, petitioned your honorable body (see exhibit A and A-1) for an opportunity to appear before you in connection with the shortage of cargo space in our domestic services. Having been extended the courtesy of a hearing, this committee, representing the Pacific Coast Association of Port Authorities, various shippers and interested organizations, desires to set forth certain facts in connection with our domestic services for the earnest consideration of the United States Maritime Commission. The present committee now meeting with the United States Maritime Commission was appointed following the meeting called by the Pacific Coast Association of Port Authorities in San Francisco on March 11, 1940. A list of those who attended said meeting is hereto appended as exhibit B. Under separate cover we are submitting a transcript of the proceedings at San Francisco on April 11, 1940, but most of the exhibits appended hereto were introduced with statements presented by various groups in attendance at that meeting. This committee of the Pacific Coast Association of Port Authorities on space shortage consists of the following: Smith Wilson, port of Seattle, Seattle, Wash., chairman. T. H. Banfield, the commission of public docks, Portland, Oreg., vice chairman. J. F. Marias (Mark Gates, alternate), State board of harbor commissioners, San Francisco, Calif., vice chairman. George Moore, board of harbor commissioners, Los Angeles, Calif., vice chairman. Philip H. Carroll, the commission of public docks, Portland, Oreg., secretary. The Merchant Marine Act of 1936 states in part: "TITLE I-DECLARATION OF POLICY "SECTION 101. 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 maintaining the flow of such domestic and foreign water-borne commerce at all times * * * "" We respectfully call to your attention the following factual data: 1. Carriers. (a) A comparison of services furnished to the Pacific coast in the summer of 1939 as against the services now offered (exhibit C) shows a decrease in the number of vessels of approximately 15 percent in the intercoastal trade, and 33 percent in the coastwise trade. Exhibit C does not reflect true conditions n respect to general cargo space available, inasmuch as most of the lines showing 67 an increase in vessels or sustained services are those in a class of semi-industrial carriers, west-bound, with east-bound space limited more or less to lumber. (b) Because of the European war, sale and charter values of vessels in foreign trades have appreciated substantially. Likewise offshore freight rates have been steadily increasing because of hostilities abroad. Similar increases have not obtained in the intercoastal and coastwise services where the rates are dominated by the competing rail line and where in some cases the granting of fourth-section relief had already placed a serious handicap on the steamship operator. Under the circumstances, it is but natural that some of the operators in our domestic services took advantage of the tempting offers to sell or to charter their vessels. While good business justifies the operator in selling or chartering recent experience and a possible continued curtailment of domestic service vessels leaves the shipper insecure and without definite assurance of a continuation of the essential form of transportation which he needs. If the rumored movement of supplies from Australia and the Orient to the United Kingdom via intercoastal service from the Pacific coast to the Atlantic becomes a reality, still greater burdens will aggravate this already inadequate domestic service. Likewise further depletion of our domestic services by sale or charter will only make a bad matter worse unless replacement with other vesslels is made possible. To those familiar with the shortage of cargo space in domestic services as it now stands it is obvious that a commercial emergency actually exists at this time; more especially because space preference is being given to better-paying classes of cargo at the expense of bulk and low-rate commodities and the freight of small shippers who cannot afford to avail themselves of rail transportation. A comparison of ocean freight rates on some typical intercoastal commodities (exhibit D) shows only an average increase effective May 1, 1940, over August 1939 of approximately 9 percent. As against this, trans-Pacific rates have already increased 200 percent or more and European rates 50 percent to 125 percent, depending upon zones. 2. Commodities.-(a) The vital importance of adequate intercoastal and coastwise services to the Pacific coast lumber industry is graphically illustrated in the statement of the West Coast Lumbermen's Association and those of the Industrial Conference Board of Tacoma, Wash., the Tacoma Chamber of Commerce and of specific mills. (Exhibits E-E1-2-3-4-5-6.) These show intercoastal volume of lumber from the west coast for the years 1937-39, inclusive, to have been as follows: 1937. Board feet Included are tabulations showing numbers of vessels necessary to sustain average intercoastal volume of lumber shipments, the effects of present curtailment of services, as well as the effect on the large coastwise volume of lumber shipments by the diversion of vessels from coastwise services. As lumber and allied wood products (plywood, doors, etc.) constitute the major industry of the Pacific Northwest, limitation of output or of marketing affects and whole economic structure of that area. (b) The wood-pulp industry, another of the major industries of the Northwest, is particularly affected by intercoastal space limitation due to the bulky nature of its manufactured commodity and to space preference being given to cargo of more compact stowage. Statements under exhibits F-1-2 from the Pacific Coast Pulp Traffic Committee and from individual companies, indicate that with present services the industry is short space for 15,000 tons of its normal monthly space requirement of 25,000 tons. That this lack is adding to the exchange advantages of Canadian pulp manufacturers is shown by the increasing imports of the Canadian product. The export of manufactured paper even exceeds that of pulp, intercoastal, and domestic exports from the Columbia district alone having exceeded 155,000 tons early in 1938 and 1939. (c) From point of actual cargo tons involved, flour manufacturing is, next to lumber, perhaps that industry of the Northwest most affected by any limitation of intercoastal shipping space. Statements of the North Pacific Millers Associa tion and interested mills (exhibit G-1-2-3) emphasizes the size of this movement by pointing out that, with the exception of the 1938 and 1939 season, shipments of flour to the Atlantic coast for the last 5 years ran from 250,000 to 325,000 tons a year. Last season, even with the disadvantage of prices as compared with Midwest production, shipments amounted to 126,000 tons due to the widening of the wheat spread. At the beginning of this season Pacific coast flour again became attractive, and a minimum potential business was in sight for 350,000 tons. tonnage. Byproducts, such as other manufactured cereal foods, add to this potential (d) The industry, both of the Pacific Northwest and Southwest, which shows possibly the greatest expansion in the last few years is the canning industry, particularly in reference to the canning of fruit and vegetables. Curtailment of space requirements of this industry severely affects the economic status of large Pacific coast agricultural areas which are devoted to supplying the industry. Statement of the Northwest Canners Association (exhibit H-H-1) shows that, based on the 1938-39 movement, the space requirements of the Northwest alone for 1940 will be 270,000 tons intercoastal and 35,000 tons coastwise. An allied industry, that of salmon canning, represents an investment of over $100,000,000 in Alaska and the Northwest, with an annual production value of $50,000,000 and with 35,000 persons engaged. According to statement of the Pacific Canned Salmon Distributors Association (exhibit H-2), the annual pack comprises approximately 10 percent of the shipment from Puget Sound, and it is estimated that intercoastal space for only 60,000 tons is available this season to take care of the annual requirements of 125,000 tons. (e) The domestic export of fresh fruits is primarily a problem of California ports and the vast size of the fresh-fruit industry, and its needs for sustained intercoastal space is brought out in statements of California interests. In the Northwest domestic-fruit exports are mostly in the form of canned and dried products. However, there is a definitely expanding space requirement for such commodities as barreled cherries in brine and frozen fruits, for which new eastern markets are being developed. (f) While export demands and Eastern crop conditions more or less have considerable bearing on the annual volume of wheat shipments to the Atlantic and Gulf ports, a consistent demand for Northwest wheat has been built up in the Southeastern States within the last few years. Exhibits J-1-2, particularly the statement of the Eastern Oregon Wheat League, give statistics as to wheat production and acreage involved and emphasize dependence of large areas upon market outlets for this staple commodity, whether in the form of flour or as a raw product. The diversion of tonnage has already disastrously impeded the intercoastal movement of grain. Due to the fact that the Pacific Northwest is absolutely dependent on the usual offshore movement as an outlet for its grain and milling products, continued or increased curtailment of services and space will definitely lead to a depressing accumulation of stocks and affect the financial status of the populations of very extensive farm communities. (g) Wool is a Pacific coast commodity largely dependent upon intercoastal space for its economic marketing in eastern wool centers. While not a major item of east-bound tonnage, in dollar value and in its relation to the financial status of vast interior districts tributary to California, Washington, and Oregon ports, it is a very important item of commerce, and from its stowage disadvantages, one of the first to suffer from space curtailment. (See exhibit K.) (h) Exhibit L is comprised of a statement from the Pacific States Butter, Eggs, Cheese & Poultry Association of San Francisco, Calif. This statement gives statistics, particularly in respect to domestic export of eggs, and sets forth the space needs of this important industry. (1) Exhibit M is made up of letters, statements, and tables setting forth the problems of those firms primarily interested in the west-bound intercoastal imports of steel and of articles or commodities of eastern manufacture. (j) A series of studies submitted by the Pacific Coast Cement Institute is entered here as exhibit N. The matter involved in this exhibit was given separate consideration at the San Francisco meeting in view of certain questions it raised which were thought to be irrelevant to the immediate subject under discussion. However, in view of the importance of the industry and its direct bearing on the Panama Canal Zone phase of intercoastal shipping, it has been herewith included. 3. Ports and terminals.—(a) The large investment in Pacific coast terminals, both public and private, and the stake which waterfront labor enjoys through pay rolls is indicated in exhibit O. and the sums involved would undoubtedly be trebled if the Gulf and Atlantic ports were included in the exhibit. Some of the ports of the Pacific coast are filing individual statements, but the following exhibits contain information pertinent to the ports named: 0-1 Port of Astoria, Oreg. 0-2 Port of Longview, Wash. 0-3 Port of Willapa Harbor, Wash. 0-4 Port of Vancouver, Wash. 0-5 Board of Harbor Commissioners, San Diego, Calif. 0-6 Port of Tacoma, Wash. 0-7 Board of Harbor Commissioners, Los Angeles, Calif. 0-10 Port Traffic Development bureau, Portland, Oreg. (b) A review of the statements submitted by the various ports indicates that a cargo-space shortage exists on the east coast and in the Gulf, as well as on the Pacific slope, though in varying degrees of intensity, and it is therefore obvious that the present emergency is general in its scope and not localized in any particular section of the country. 4. Miscellaneous.-(a) Under exhibit Q is contained a statement by Edgar F. Luckenbach, of the steamship company bearing his name, which was read at the San Francisco meeting on April 11 by George W. Osgood, of the port of Tacoma. Exhibit Q-1 is a statement prepared by Roger D. Lapham, chairman of the board of the American-Hawaiian Steamship Co., which statement was submitted at the San Francisco meeting on April 11. (b) It is the earnest desire of this committee to cooperate to the fullest with the established operators both in the intercoastal and in the coastwise trades, in a sincere endeavor to help them in any possible way to provide adequate domestic services on a fair and reasonable basis to shippers and operators alike. (c) Exhibit Q-2, which was submitted at the meeting in San Francisco on April 11, contains an exchange of telegrams between Col. W. C. Bickford, of Seattle, and Senator Schwellenbach. Exhibit Q-3 contains an exchange of telegrams between Congressman Frank H. Buck and Col. B. C. Allin. In conclusion, this committee respectfully requests that the United States Maritime Commission, in the light of the existing emergency, make available in such manner as it deems best, a sufficient number of laid-up vessels to replace those which have been, or may be, withdrawn from our domestic services since the summer of 1939. Respectfully submitted. PACIFIC COAST ASSOCIATION OF PORT AUTHORITIES By PHILIP H. CARROLL, Secretary. EXHIBIT A PACIFIC COAST ASSOCIATION OF PORT AUTHORITIES, Hon. EMORY S. LAND, Washington, D. C. April 11, 1940. MY DEAR ADMIRAL: Due to the distress attendant upon shippers, consignees, manufacturers, ports, labor, and business generally, resulting from the sharp reduction in intercoastal and coatwise cargo space, I, as president of the Pacific Coast Association of Port Authorities, called a coast-wide meeting for today, April 11, 1940, at San Francisco in an effort to fully develop the difficulty being experienced and the economic result of such shortage to those above mentioned and with a further idea of seeking ways and means of remedying the vicious situation. At this meeting, attended by representatives from every major and minor port on the Pacific coast, together with representatives of all of our basic industries who in their businesses have experier ced grave difficulty in either the shipping or receiving of cargo, after detailed discussion of the problem appointed a committee to draft a petition later adopted unanimously by the conference, which is attached hereto. The meeting also appointed a committee which is delegated to make a thorough study of the factual data presented at this conference together with any other studies which they may choose and in turn make such presentation to you as they may deem necessary. was directed by the conference to request for this committee an appointment with the Maritime Commission. I have appointed as chairman of the delegation from our association Mr. Smith M. Wilson, vice president of the port of Seattle commission. Our association would appreciate it very much if you would, at your earliest convenience, communicate with Mr. Wilson at Seattle, giving him definite indication of an appointment in Washington when our committee could meet with your body and discuss this all-important problem of the Pacific coast. Yours very sincerely, G. E. ARBOGAST, President, Pacific Coast Association of Port Authorities. EXHIBIT A-1 PALACE HOTEL, San Francisco, Calif., April 11, 1940. Subject: Shortage of intercoastal and coastwise cargo space. Chairman, United States Maritime Commission, Washington, D. C. MY DEAR SIR: Because of the distress attendant upon shippers, ports, business generally, and labor, and at their urgent demand because of the sharp reduction in intercoastal and coastwise cargo space, the Pacific Coast Association of Port Authorities called a coast-wide meeting for today, April 11, 1940, at San Francisco, to seek a solution of this alarming situation. After detailed discussion of the problem, the more than 150 delegates representing all interested groups on the Pacific coast in attendance at this meeting respectfully petition the United States Maritime Commission through you, as chairman, to afford our domestic maritime commerce prompt relief, as contemplated by Congress in its declarations of policy and as set forth in existing statutes regulating the merchant marine. The delegates in attendance at this meeting earnestly suggest for the United States Maritime Commission's consideration the following proposals: 1. That the United States Maritime Commission make available a sufficient number of the laid up vessels to replace those which have been, or may be withdrawn since the summer of 1939. 2. That the laid up vessels be made available for intercoastal and coastwise service only, and that these vessels be not transferred to any foreign service. 3. The shortage of cargo space constitutes a vicious thrust at the industry of the Pacific coast and thereby creates a very definite commercial emergency which cannot be remedied by any other means of transportation. It is the firm resolve of this body assembled to pledge to you our full, aggressive, and continuous support and to that end a representative committee has been named to present the facts and personally appear before your honorable body. Respectfully submitted, PACIFIC COAST ASSOCIATION OF PORT AUTHORITIES, By G. E. ARBOGAST, President. ROSTER OF ATTENDANCE AT MEETING CALLED BY THE PACIFIC COAST ASSOCIATION Abel, Arthur H., port manager and chief engineer, port of Oakland, Calif. Anderson, A. W., secretary-treasurer, California Container Corporation, Emeryville, Calif. Anderson, J. H., traffic manager, the River Lines, San Francisco, Calif. Banfield, T. H., president, Iron Fireman Manufacturing Co., representing Commission of Public Docks, Portland, Oreg. Bartlett, R. R., manager and chief engineer, port of Astoria, Astoria, Oreg. Batchelder, K. C., traffic manager, West Coast Lumbermen's Association, Seattle, Wash. Bearss, H. J., Railroad Rate Department, Public Utilities Commission of Oregon, Salem, Oreg. Bickford, W. C., general manager, chief engineer, port of Seattle, Seattle, Wash. Bishop, L. R., president, Bishop & Bahler, traffic managers, San Francisco, representing Western Pipe & Steel, and others. |