The Seattle Star Newspaper, June 28, 1920, Page 8

e Di On June 6th, 1920, the New Merchant Marine Act passed by the Congress of the United States t into effect. ‘Section 28 of the Act as passed, which was originally section 30 of the Hl, reads as follows: ‘That no common carrier shall charge, collect, or Feceive, for transportation subject to the interstate commerce act of persons OF property, under any joint rate, fare, or charge, or under any export, im- rt, or other proportional rate, fare, or charge, which is based in whole or in rt on the fact that the persons or property affected thereby is to be trans- orted to, or has been transported from, any port in a possession or depend- =cy of the United States, or in a foreign country, by a carrier by water in dereign commerce, any lower rate, fare, or charge than that charged, collected, received by it, for the transportation of persons, or of a like kind of prop- ty, for the same distance, in the same direction, and over the same route, Mi connection with commerce wholly within the United States, unless the ves- sel so transporting such persons or property is, or unless it was at the time 3 f such transportation by water, documented under the laws of the United ates. Whenever the board is of the opinion, however, that adequate ship- facilities to or from any port in a possession or dependency of the Unit- tates or a foreign country are not afforded by vessels so documented, it all certify this fact to the interstate commerce commission, and the com- asion may, by order, suspend the operation of the provisions of this sec- Son with respect to the rates, fares and charges for the transportation by il of persons and property transported from, or to be transported to, such “ts, for such length of time and under such terms and conditions as it prescribe in such order, or in any order supplemental thereto. Such spension of operation of the provisions of this section may be terminated order of the commission whenever the board is of the opinion that ade- ate shipping facilities by such vessels to such ports are afforded and shall certify to the commission.” © In order to understand what this section means one must know about’ the sis upon which transcontinental railroad rates have been formed. There ‘ve been two general classes of railroad rates to and from points east of 2 Mississippi River to Pacific Coast points: (1) The domestic rate, and (2) fic import and export rate. The domestic is the rate which applies from ae eastern point, for example, Pittsburg, to some point wholly within the ited States, for example, Seattle. The export and import rates apply "om some point, say Pittsburg, to commodities which are destined to foreign “nts, say for example, Kobe, Japan. As most of the freight to the Orient “ginates at or near the Atlantic seaboard, it is apparent that such freight « THE SEATTLE STAR astrous Effects of Section 28 of the Merchant Marine Act Sponsored by Senator Jones ....0f Washington.... will be noted that this equality of rates so established by the railroads re- duced the Western railroad rate fo a point so low that, when added to the ocean rate, the combined rail and water rate through the Pacific ports was substantially equal to the combined rail and water rate moving through the Atlantic ports. Suppose, however, that the railroads were not permitted to establish these low rates for exports. Then the charge of carrying steel from Pittsburg to Seattle would be the Domestic Rate. This rate is $1,371 per hundred pounds as compared to the export rate of 60c. The result of this would be to transport one hundred pounds of steel from Pittsburg to Japan by way of New York would cost 27c for the rail haul plus 89%¢ for the ocean haul, making a total of $1.16; to-transport steel from Pittsburg through Seattle to Japan would be $1.9744 per hundred pounds, being $1.3744 for rail haul and 60c for ocean. As the section quoted in the Jones Bill prohibited railroads from charging less than their domestic rates on import and export traffic unless the ocean transportation is by an American ship, steel carried on American ships from Seattle will cost the shipper $1.20 a hundred, but if carried on foreign ships it will cost $1.9714 per hundred. But if moving through New York it will only cost $1.16 a hundred pounds irrespective of whether it is carried on an American ship or on a foreign ship. The foregoing shows it will not aid American ships. It is contended by Senator Jones, who as chairman of the Commerce Committee is directly responsible for this Bill, that this clause will aid American ships. It will not aid American ships, but it will aid New York and other Atlantic ports by taking away the Oriental commerce from the Pacific Coast ports and deliver- ing it to the Atlantic ports. Coming back to our illustration of iron and steel products, during the months of January, February and March there were exported to the Orient iron and steel products through New York approximating thirteen mil- lions of dollars in value. During the same period there were exported through Seattle iron and steel products approximating two and a half millions of dol- lars in value. During the same period the combined rail and ocean rate through New York was $1.16 a hundred, and through Seattle $1.20 a hun- dred pounds. Because of the difference of de in favor of New York, New York got $13,000,000 worth of business as against our $2,500,000. Under the Jénes Act the rate through New York will remain at $1.16 for foreign MONDAY, JUN 2%, 1920. S ‘As seen by W. T. CHRISTENSEN Port Commissioner of Port of Seattle Boston and Philadelphia American and foreign lines soliciting cargo and make ing inducements to shippers to patronize their lines. The Jones Bill will stimulate and increase competition out of Atlantic ports, and at the port of Seattle and other Pacific Coast ports there will be no such competition and business will dwindle and dwindle until the shipping board will find it neces- sary to take away from our operators the shipping board vessels we now have. Retaliatory Measures by Foreign Countries | Finally it should be borne in mind that foreign nations engaged in shippin will not sit with their hands folded and permit the United States to adopt preferential clauses favoring American ships without retaliation. A New York journal, “The Nautical Gazette,” in its issue of June 19th; says: “The unwisdom of embarking on a policy of preferring our own shipping and ~ , penalizing those of other nations has been repeatedly pointed out by us. If jj we should seek by discriminatory measures to discourage alien vessels from | | visiting our shores, we should undoubtedly be paid back in our own coin with — the result that our ships would be unable to enter foreign ports on the same footing as those of other nations. All chance of competing on equal terms / ‘ ij (1) To drive out all foreign vessels operating from the Pa- cific ports of the United States to the Orient. (2) To reduce the volume of shipments from the Pacific The Result of the Jones Bill Will. Be: which comes from competition of lines soliciting business. (4) After the foreign lines have gone and competition has ceased foreign commerce will dwindle and dwindle until @ eaeyed Kevkaad nS aici ali coast ports to the Oriegt, and to divert them to Vancouver, the shipping board will find it unprofitable to operate ship- yg B. C., or Atlantic ports. ee See ping board vessels, and these will be taken off. sl (3) This will result from the taking off of the foreign ships (5) Final result, the practical loss of all foreign shipping to with consequent reduction of the great volume of business the Port of Seattle and other Pacific coast ports. would naturally move to New York or some other Atlantic seaboard ports and then by water to the port in the Orient. For several years Seattle and San Francisco have, however, enjoyed a busi- ness running into millions of dollars of freight which has been carried by the transcontinental railroads to these ports and then shipped in vessels ‘to the Orient. This great commerce has’ moved to the Pacific Coast ports because the railroads made a rail rate from eastern points sufficiently low to over- come the low rate to the Atlantic seaboard; these low rates to Pacific ports ave called export and import rates. One illustration will show how the railroads brought commodities overland 8,000 miles to Pacific coast ports instead of having these commodities all going through the Atlantic coast ports. Take as an illustration iron and steel products. The rail rate from Pittsburg to New York on iron and steel _was 27c a hundred pounds; the ocean rate from New York to the Orient was 9c a hundred pounds. This made the combined rail and ocean rate from ‘Pittsburg to the Orient $1.16. The ocean rate from Pacific Coast ports to the Orient was 60c per hundred pounds and in order to put the Pacific Coast vorts on a parity or equality with New York the railroads adopted an export rate of 60c per hundred pounds. The result was that a shipper could ship gieel from Pittsburg to the Orient via New York at $1.16 a hundred pounds _and from Pittsburg to the Orient via Seattle at $1.20 per hundred pounds. It vessels as well as American vessels, but the rate through Seattle will be $1.97 for foreign vessels and $1.20 for American vessels. 1918 and 1919, when Seattle did such a vast Oriental % of the vessels bringing us that business were foreign ves- These vessels cannot carry freight for nothing, but if a foreign vessel should make no charge out of the port of Seattle to Oriental ports the com- bined rail and water rate on steel products would be 2314c a hundred pounds more than the rate to the Orient via New York. It is apparent that thése foreign vessels will be driven from the Pacific coast ports of the United States. Where will they go? Some of them will go to Vancouver, B. C., our competing Canadian port; but a very large number, perhaps a greater number, will go to New York, Philadelphia and Boston. Foreign vessels run- ning out of these Atlantic ports will be on the same basis as American vessels. During the y commerce, over sels. So, instead of this bill helping the American merchant marine, its net re- sult will be to increase competition of foreign vessels and the American mer- chant marine on routes terminating at the Atlantic ports. It will only de- stroy competition between American vessels and foreign vessels with routes terminating at Pacific Coast ports. Every one knows that where you have competition there the business will develop. As a result of this bill you will have at the ports of New York, ‘ NORTHWEST INDUSTRIAL EDUCATIONAL BUREAU : with other maritime rivals for the carrying trade of the world would then be ended. “Another questionable provision of the new law requires the interstate com- merce commission, whenever sufficient domestic tonnage is available, to give preferential railway rates on goods imported or exported in American bot- toms. It would not be at all surprising if foreign shipping circles were to re- gard this method of favoring our home vessels as a species of unfair compe- tition, in which event retaliatory legislation directed against our merchant marine is to be apprehended. As it will affect their shipping on the Pacific adversely, the Japanese will be certain to resent this preferential railway \* rate ‘policy. : "i “Our new shipping legislation promises, therefore, to embroil us with the ~ other leading maritime powers and may induce them to act in concert against i { us so as to bring about its modification or repeal. This would be a very unfortunate outcome, for we can only hope to bid successfully for a large share of, the world’s carrying trade by securing the good will and not the // enmity of the great trading countries. To pass an act arousing their antago- }) nism and one which violates existing treaties is not the way to further the interests of our merchant marine.” La A recent visitor to Seattle, who has had wide experience in shipping, stated that at one time Germany sought to favor its shipping by such preferential provisions and that it brought upon its head the combined force and enmity of all other nations engaged in shipping, and finally was compelled to repeal its legislation, \ ee