The CHAIRMAN. That is what has caused the decline in employment, the Canadian lumber? But Mrs. HANSEN. It is just one of the facets, Mr. Chairman. There are many facets to the unemployment situation. This is one. the importation of the lumber from Canada is a major factor, and I am sure that southern mills and eastern industry have found this same situation because they have shared many meetings that we have attended together where this subject has been of major importance and has been a subject for discussion. The CHAIRMAN. You say: According to a report of the U.S. Department of Commerce, imports of softwood lumber from Canada increased from 2,748 million board feet in 1954 to 3,941 million board feet in 1961. One from this might believe that the major trouble there is the import of lumber. Mrs. HANSEN. It is one of the major troubles. The CHAIRMAN. Instead of the rate problem? Mrs. HANSEN. It is all of the problems together combined. The CHAIRMAN. Which is the major problem? Mrs. HANSEN. The major problem, as far as the mills that ship by water, is the tariff, the rate filing. Also, and you can't ignore it, the imports from Canada are of major importance. You can't discuss it without mentioning that. The CHAIRMAN. It is a little difficult to understand, Mrs. Hansen, if Canadians can ship lumber into a lumber-producing area at this rate, how a lower tariff rate on export freight would cure the situation. Mr. TOLLEFSON. Would the gentleman yield? The CHAIRMAN. Yes. I just wanted to clear that in the light of this statement. Mr. TOLLEFSON. In Mrs. Hansen's statement she mentions in the first paragraph that there are several factors and we have endeavored to deal with the several factors separately by introducing different kinds of bills. Mrs. HANSEN. That is right. Mr. TOLLEFSON. And this is one of the bills that we have introduced which has had almost unanimous support and this is one that we think has the best chance of receiving favorable action, as it did on the Senate side, and I think Mrs. Hansen would agree with me that, while the importation of Canadian plywood into this country is a factor, nonetheless, it is important that our producers be permitted to compete with the Canadians in the United Kingdom market, and this is primarily what this bill attempts to do. Mrs. HANSEN. That is right. The CHAIRMAN. Mr. Casey? Mr. CASEY. I don't believe I have any questions. Mr. GLENN. I have no questions, Mr. Chairman. The CHAIRMAN. Thank you very much. Mrs. HANSEN. Thank you again, Mr. Chairman. The CHAIRMAN. Thank you very much. The next witness is Mr. Stakem, the Chairman of the Federal Maritime Commission. STATEMENT OF THOMAS E. STAKEM, CHAIRMAN, FEDERAL MARI- Mr. STAKEM. Good morning, Mr. Chairman. Mr. STAKEM. Mr. Chairman, I am happy to appear before your committee this morning on H.R. 1157, a bill to amend the Shipping Act, 1916, so as to exclude lumber from the tariff-filing requirements contained in section 18 (b)(1) of that act. It is the Commission's opinion that the proposed amendment is unnecessary. Under section 18(b) all common carriers and conferences of such carriers are required to file their tariffs with the Commission, and increases in rates must be filed 30 days in advance of their effective date while decreases in rates become effective when filed. Section 18(b) authorizes the Commission to permit rate increases to become effective on less than 30 days' notice when good cause is shown. Under section 18(b) conferences and carriers may only charge the filed rate. As the Commission understands it, the purpose of the proposed bill is to enable shippers of lumber from the west coast to compete more effectively with their competitors shipping lumber out of Canada. It is urged that the requirements of section 18(b) (1) prevent the common carries and conferences serving our west coast shippers of lumber from meeting the rate competition of "tramp" operators and unregulated carriers serving Canada, and the resulting disparity of rates in favor of Canadian shippers places our shippers at a competitive disadvantage. The Commission believes that the objective sought by the bill can be achieved under the present statute and the procedures which the Commission has adopted for the administration of its requirements. Under the Commission's present rules governing the filing of rates, any decrease in rates may be filed by telegram or cable and the rate becomes effective when received by the Commission. Thus, any decreases in rates put into effect by "tramps" or Canadian operators can be immediately met by the carriers or conferences serving our west coast trades. In addition, the Commission under section 18 (b) (2) is authorized upon a showing of good cause to permit increases in rates to become effective on less than 30 days' advance filing notice. Here, again, these requests for increases on less than 30 days' notice may be filed by telegram or cable, and the Commission has delegated the authority to grant special permission to a staff committee. Past experience has shown that this committee can and does handle these rate requests most expeditiously. Our records indicate that only one request to increase rates on lumber on less than 30 days' notice has been received by the Commission. In this case, permission for the increase was granted the same date it was received and the rate requested went into effect that day. Tariff filings do not indicate that there have been any substantial number of rate changes in the Pacific coast lumber trade. This demonstrates that either shippers of lumber from the west coast have not sought rate reductions to meet their competition, or, if they have, the carriers and conferences serving them have not been responsive to their demands. If the latter is true, the Commission does not feel that the carriers and conferences involved can justify their inaction on the basis of the requirements in section 18 (b) (1). The exemption of a commodity from these requirements does not automatically produce a decrease in rates, and the Commission feels that before an enactment of Congress is amended the parties subject to it should make every effort to conduct their operations within its framework. The Commission is in sympathy with the plight of our lumber shippers on the west coast and we are certainly not attempting to minimize the problem they face in exporting their products. But the Commission feels that the procedures we have adopted for administering the requirements of section 18(b) (1) remove any disability on the part of the carriers and conferences serving the west coast to expeditiously adjust their rates to meet the request of lumber shippers if they so desire. Section 18(b) was enacted by Congress for the purpose of requiring carriers and conferences in our trades to file and make public their rates and charges. Under section 18(b) the only rate which may be charged is the filed rate. Thus, shippers not only know what the transportation cost is to them but to their competitors as well. When rates are subjected to requirements such as those of section 18(b), opportunities for unlawful discriminations and prejudices are greatly diminished. In this regard, the requirements of section 18 complement and buttress the provisions of sections 15 and 17 of the Shipping Act, 1916. Under section 15 the Commission is to withdraw its approval of any conference agreement when it finds after hearing that the member lines are fixing rates which are unjustly discriminatory between shippers or ports, or unduly prejudicial to exporters of the United States as compared with their foreign competitors or detrimental to the commerce of the United States or contrary to the public interest. Section 17 prohibits carriers from charging rates which are unjustly discriminatory between shippers or ports of unduly prejudicial to exporters of the United States as compared to their foreign competitors. I have instructed our field staff to undertake an investigation of the situation to determine the extent to which, if any, conferences or carriers serving the Pacific Northwest have fixed rates on lumber which are unlawfully discriminatory or prejudicial or detrimental to the commerce of the United States, or contrary to the public interest. We welcome any information from lumber shippers bearing on this problem. We realize that our position as to the enactment of H.R. 1157 is contrary to that taken by the Commission on similar amendments introduced last year. However, in the light of our experience over the past year, we believe that the results sought by the recommended legislation can and will be achieved under the existing law and the procedures adopted by the Commission for its administration. 27-207-64- -3 In view of the foregoing, it is the recommendation of the Commission that H.R. 1157 not be enacted into law. Mr. Chairman, I would like to supplement the statement by stating that the Bureau of the Budget has advised that they have no objections to the submission of this statement to the committee and I also would like to deal with the record for a moment on the rate changes that we have had in lumber products in the Pacific coast European tariff, which is essentially what we are talking about here today. The records of the Commission show that we have on file about 143 separate rates and from the period of January 2, 1962, to the present time that is since Public Law 87-346 was enacted-there have been 73 rate changes on lumber products that have been filed in this conference tariff. Six of these changes were for increases and they were made on the regular statutory notice and no request was received by the Commission for permission to put the rate into effect on short notice. The other 67 rate changes were decreases and of course these decreases became effective immediately upon the filing with the Commision. The 67 decreases do not appear to be short-term temporary decreases, but have remained in effect for a substantial period of time. A general examination of the level of rates on lumber products in the conference tariff from the latter part of the year 1961, prior to the enactment of Public Law 87-346, to the present time indicates that there have been no substantial increases in rates on lumber moving under this tariff since the tariff filing requirements were placed in the law. Now, one other further fact, Mr. Chairman. I have been seeking for the purpose of presenting to this committee a copy of the tariff of the West Canadian European Conference, so that we could compare the liner rates in the Canada to United Kingdom and to the continent with the rates of the Pacific European Conference. I have succeeded in obtaining a copy of that tariff, but I do not have it with me today. It is in the mail en route to my office and I would like to present it to the committee to supplement my statement when it is received. (The information referred to follows:) WESTERN CANADA-EUROPE CONFERENCE FREIGHT TARIFF No. 1 [Original Page 27] LUMBER RULES SECTION In addition to the rules set forth in the General Rules Section of this Tariff, the following rules, where applicable, will also apply on Lumber cargoes. 1. Hull Clause. The following clause must appear on contracts and bills of lading covering shipments of all classes of lumber to Hull, England: "Consignees of lumber at Hull to pay to the carrying vessel 4/9d. per standard as their proportion of labour costs for delivery to railway wagons and/or bogies: if consignees elect to take delivery by road vehicles, consignees to pay to the vessel 18/6d. per standard as their proportion of the labour costs for delivery to road vehicles; if delivery to craft and/or shed and/or quay any extra charges for receiver's account." 2. Tariff Trading Period. See Rule 5. Tariff Trading Period; General Rules Section, for provisions with respect to trading period on lumber. 3. Freight Brokerage. In accordance with Rule 20, Page 0, Freight Brokerage, payment of freight brokerage is not permitted on lumber or logs regardless of where booking is made. 4. Loading Ports. Rates named in this Lumber Section apply from the terminal loading port of Vancouver; for application of rates from other loading ports see provisions set forth in individual commodity items. 5. Overside Delivery at Antwerp. Granting of overside delivery of lumber at Antwerp, Belgium, is at the option of the carrier. If carrier elects to grant such delivery, Clauses 1 and 2 shown below must appear on bills of lading. The use of Clause 3 is optional with the carrier. Antwerp Lumber Overside Delivery Clauses: 1. Overside delivery of lumber onto lighters will be allowed at Antwerp provided stowage permits and further provided that, in the Master's opinion, no delay and/or expense will be occasioned thereby to the vessel. Consignees must furnish lighters immediately on vessel's arrival and take delivery as fast as vessel can discharge, either by day and/or night, on Sunday and/or holidays if requested by the Master, otherwise the vessel will discharge the lumber onto dock or quay or into hired lighters at consignee's and/or shipper's risk and expense. 2. Ship's tackle delivery of lumber onto dock or quay is not permitted under this bill of lading. 3. Scheldt Quays delivery is excluded under this bill of lading. [1st Rev. Page 28] 6. Group 6 Terminal Ports-Lumber Rates. Except as otherwise specifically provided, Group 5 rates for lumber as set forth in this section shall apply to Group 6 terminal ports as described in Rule 4, General Rules Section, for direct call only. 7. Mediterranean Post-Terminal Ports-Lumber Rates. Except as otherwise provided, Group 6 rates for lumber as set forth in this section shall apply to Mediterranean Post-Terminal ports, either by direct call or with transshipment at any terminal port, at the option of the carrier. Exceptions: (i) Group 5 rates applicable to lumber as set forth in this section shall apply to Atlantic or Mediterranean ports of Spain, including the Canary Islands, and Oran, Algeria, subject to a minimum of 150 MBM, for direct call only. (ii) Group 5 rates applicable to lumber as set forth in this section shall apply to Italian and Yugoslavian Post-Terminal ports, subject to the terms of Rule 4, Note 4, of the General Rules Section. For the purposes of minimum "tonnage" requirements, 150 MBM shall be considered equivalent to 250 long tons. (R) (iii) Effective January 21, 1963, expiring June 30, 1963, Group 5 rates applicable to Lumber as set forth in this section shall apply to Alexandria, Egypt, subject to a minimum of 300 MBM for direct call only. (R) Reduction effective 21 Jan. 68. |