use of them might be regulated, but that the ownership of such publicly owned facilities did not require regulation. I do not attempt to speak of his point of view, of course.

Mr. WELCH. If I understood him correctly, there was no demand for any regulation of that part of the Port of Philadelphia that is under public ownership, and no complaint from those that use that part of the port.

Mr. SORRELL. It would not be fair at all for me to stand here and state what he said. I listened intently to what he stated. I am merely stating my impression of it, you understand, of course, I thought that he did state that where the use of such facilities in interstate commerce was involved, the use of them might appropriately be regulated, but not the ownership.

Mr. MANSFIELD. Not the ownership or rental, as I understood it.
Mr. SORRELL. Not the ownership or rental, that is right.
Mr. WELCH. You are here speaking for the bill?

Mr. SORRELL. For the rate and service sections of them as related to the common and contract carriers, but I stated very specifically that I am not saying anything about the wharfinger section, for which I am not authorized to speak.

Mr. WELCH. Have you given any study to the wharfinger provisions in the proposed act?

Mr. SORRELL. No, sir; not sufficient to warrant my taking any of your time here. I do not think I am competent to speak on it from my own personal knowledge. I would be glad to if I could, but I do not think it is warranted.

The CHAIRMAN. Any further questions?

Thank you, Mr. Sorrell.

STATEMENT OF JOHN F. FITZGERALD OF BOSTON

Mr. FITZGERALD. Mr. Chairman and members of the committee: I am a member of the Boston Port Authority. I know Mr. Eastman very well, and have discussed this bill with him at different times privately. I think the time has come when some such legislation should be enacted into law. Steamship men with whom I talked, with headquarters in Boston, feel that the steamship interests are in much better position if they are recognized by the Interstate Commerce Commission as being part of it than under the present situation, where, because the discussions and the appeals are concerning railroads, the average member of the Interstate Commerce Commission is railroad-minded, and therefore when these matters come before the Interstate Commerce Commission, the men on that Commission are rather inclined to favor railroads against the water carriers; that if they were men familiar with the water carriers and with water-carrier transportation, the water carriers would get a better break than they are doing at the present time.

I came over from Boston the other night on one of the Eastern Steamship Lines' ships. They have wonderful equipment, I think about the best boats in the country, largely built on Boston initiative with Boston money, helped, of course, by the very generous provisions of the Merchant Marine Act. I do not think there are finer passenger boats in the world. Yet I was very much surprised and disappointed at the few people that were aboard that boat, and at the very poor business that those boats are doing at the present time.

I think I know what Mr. Eastman's point of view is, what every sensible man's point of view is, that unless there is some regulation of the means of transportation other than the railroads, the railroads will be ruined in a very short time, and the millions of dollars of money that have been invested, largely held now by savings banks and insurance companies, which securities belong to the every-day citizen, are going to be in a pretty serious situation.

The CHAIRMAN. Evidently those boats are not doing any harm to them from the number of passengers who were on them.

Mr. FITZGERALD. I was coming to that, Mr. Chairman, if you will please allow me. It is the serious inroads that are being made because the country is motor-minded, where the population of this country, which is 8 percent of the population of the world, have 70 percent of the automobiles, where practically every public man, including myself, at the present time is fighting for almost a billion more to build roads that are putting the railroads and the steamship companies out of business. It is about time that some such legislation as is embraced in this bill becomes the law of the land, because not only would the reailroads be ruined, but the steamship companies would be ruined by the more than generous expenditures on the part of every State and city, and the Nation itself, because of automobiles purchased with money 75 percent of which is borrowed on the value of the machines, which is putting a lot of families on the edge of bankruptcy and almost bankrupting the cities and the States, and perhaps the Nation itself.

The CHAIRMAN. You are going to regulate the motor car?
Mr. FITZGERALD. Yes, sir.

The CHAIRMAN. The passenger car?

Mr. FITZGERALD. Exactly.

The CHAIRMAN. Passenger cars as well as the others?

Mr. FITZGERALD. Exactly.

The CHAIRMAN. You would put them all under regulation?

Mr. FITZGERALD. Whatever regulation is required to protect the railroads and the 14 million dollars of United States money that is in the railroads owned, I repeat again, by the savings banks and the life-insurance companies of the country.

The CHAIRMAN. You are going to deprive me of the right to buy an automobile and ride on the highway?

Mr. FITZGERALD. I want you to help pay for your right-of-way proportionately, which is not the case at the present time, where the roads are given freely by the United States Government. That is what I want done.

Mr. LEHLBACH. In other words, tax the ownership of automobiles sufficiently to deprive people of the opportunity to own them, in order to force them to ride in railroad trains?

Mr. FITZGERALD. No, not exactly; but I say again, you will find, in my opinion, that it is going to be a pretty serious menace in a few years, where the United States, which has 8 percent of the population of the world and 70 percent of the machines in the country, purchased 25 million out of 30 million on borrowed money, will face a pretty serious question. I do not want to be in the United States when the railroads are ruined, as everybody knows is being done at the present time, where there is not a bank in the United States that will lend a dollar to the railroads-and the railroads need a lot of

money to put themselves in the position where they ought to be to give us the best transportation.

In my own city, for instance, they ought to have abandoned a lot of terminals that are useless at the present time. They ought to do it in New York City. They ought to do it in every city. The railroad system of the country ought to be reorganized. But where are they going to get the money, except Uncle Sam gives it to them, if Uncle Sam makes it easy for every one of us to get a machine, borrow 75 percent of the purchase price to buy it, mortgage our house in order to get it, and use it for pleasure purposes? I think it is a pretty serious proposition, much as I like the machine.

Mr. LEHLBACH. But that is not hurting the railroads particularly. Nobody is going to take a ride on a railroad instead of taking an afternoon spin in his car, if he does not have a car, you know.

Mr. FITZGERALD. My dear man, I know people that never ride on a railroad train even to New York, now. They take a Ford car and five passengers in it, and they ride from Boston to New York and back again for one-fifth of the cost of the railroad. Everybody knows that.

Mr. LEHLBACH. That shows the railroads on such hauls are becoming obsolescent.

Mr. FITZGERALD. I agree that they are becoming obsolescent, but I maintain that the money of the United States should not be expended as it is at the present time, providing free highways to the ruin of the railroads, which have, I repeat again, securities amounting to $14,000,000,000 in the savings banks and in the life-insurance companies; and the record shows that 95 percent of the management does not own a dollar of the railroads. When you are ruining them you are ruining the average city in the country.

Mr. MANSFIELD. Mr. Fitzgerald, you speak of the highway traffic as being injurious to the railroads and depriving them of a great deal of business. I think there is a good deal to that. But can you name any waterway inland or upon the high seas or Great Lakes that is injuring any railroad in the United States?

Mr. FITZGERALD. I am with the waterways and I appear here today in behalf of the steamship lines about which I am speaking, saying that they would like to be represented upon the Interstate Commerce Commission for the reason that they see now that the men that are on there have been discussing railroads and when the steamship companies come in, as they will, where there are charges against the rates, the men that are on there are more railroad-minded than they ought to be. I am appearing for regulation.

Mr. MANSFIELD. For a good many years I have been a member of the committee on Rivers and Harbors. I do not recall a waterway improvement that has been enacted or proposed in the last 18 years, except inland waterways, that the railroads did not come before our committee and advocate it.

Mr. FITZGERALD. I think that is true. I do not think the railroads have any difficulty with the waterways, and I am not appealing in behalf of the railroads. I am looking out for the $14,000,000,000 that belong to the American people, and that is going out like that, and every one of you here knows it.

Mr. WELCH. The port of Boston is privately owned, is it not?

141408-35-PT 1--16

Mr. FITZGERALD. Except the Commonwealth Dock is publicly owned, one dock owned by the State; but the other piers are privately owned.

Mr. WELCH. How are the port charges fixed?

Mr. FITZGERALD. They are fixed largely by the Port Authority. That point that you raise there is very serious with us now, because in New York, as you probably know, the docks are owned by the city itself, and in a great many of the other communities. In Boston the New York Central owns some of the docks, the New York, New Haven & Hartford owns some of the docks, and the Boston & Maine owns some of the docks. We are having difficulty all the time, and New York has taken a lot of trade away from us, because by various means they are able to undersell us on these things, and the railroad charges are not the same.

Mr. WELCH. What percentage of the port of Boston is publicly owned?

Mr. FITZGERALD. Very small, I should say hardly one. We have one big dock owned by the Commonwealth of Massachusetts; none owned by the city. It is all privately owned.

Mr. WELCH. Are the wharfage and dockage rates on the Commonwealth dock the same as the rates on publicly owned docks?

Mr. FITZGERALD. There are no publicly owned docks but the Commonwealth.

Mr. WELCH. The privately owned docks.

Mr. FITZGERALD. There is a question about that. I think some of the shippers coming in there figure that the Commonwealth is charging a little higher than what they ought to in wharfage charges; but it is not a very serious situation, because we have only one dock, that is, the Commonwealth pier.

Mr. MANSFIELD. The business of the port of Boston has increased enormously in the past few years. It is one of our best ports. Mr. FITZGERALD. No, I beg your pardon. We have lost. We have no foreign business re-exported at all; it is negligible. We have lost a lot of business because Canada has put a differential of 10 percent against commodities entering Canada through the United States. At the present time we have bills introduced by Congressman McCormack and Senator Walsh to correct that situation, but we have not gotten very far with it. But our business is very poor. Of course, we are not finding much fault with that, because the foreign commerce or the commerce of the world has dropped from 64 billions to 28 billions. That is a lot.

I thank you, Mr. Chairman, for your courtesy.
The CHAIRMAN. Thank you, Mr. Fitzgerald.

STATEMENT OF GEORGE J. MILLER, EXECUTIVE SECRETARY, MISSOURI RIVER NAVIGATION ASSOCIATION

Mr. MILLER. I have a prepared statement which I shall skip through and read only the parts that I want to stress before the committee.

The CHAIRMAN. Your statement will be filed with the committee. Mr. MILLER. To begin with, I am generally sympathetic with the idea of regulation of waterways. I, however, would be opposed to this bill as it stands without amendment, and I shall devote my

remarks to suggestions for the consideration of the committee as to what those amendments should be.

There are three questions involved in the consideration of this bill:
First: Do the water carriers need regulation?
Second: The kind of regulation required?

Third: If regulation is needed, how can this bill be made to meet the requirements of water transportation?

In answering the first question, it is my judgment that the water lines should have regulation. It is needed to preserve the integrity of the water lines; it is needed in the public interest. We have witnessed, during these years of depression, a slashing of rates between the competing water lines that may have resulted in some savings to shippers, but such savings are bound to be temporary, and these depressed rates have resulted in greatly depleted revenue to the waterway operators and a deficit in their net returns. I am looking at this solely from the viewpoint of the public, believing that rate wars will eventually destroy the very service we are trying to obtain. The value of water transportation to the public depends upon three things; (a) low rates; (b) adequate facilities; and (c) dependable service; and no barge line can give this kind of service to the public unless the business is profitable and it cannot be profitable unless protected from cut-throat competition.

We believe the shipping public will profit in the long run by paying a profitable rate, for unprofitable rates will sooner or later end the service. We have no interest in any barge line or shipping company and the above statement is made entirely from the viewpoint of the shipping public. It is my judgment that regulation of the waterways will inevitably come and if not now, later on, and that the day will come when all responsible carriers will want regulation.

This brings us to consideration of the kind of regulation waterways should have. It is apparent that most of the objection to this bill is based upon the belief that regulation under this bill would mean a raising of the water rates up to or approaching the rail rates, and if the bill should be passed as now drawn, doubtless this would be the case. It is a well-known fact that the demand for regulation of the waterways, in the main, comes from the railroads and the rail lines are sponsoring it with the idea that water rates will be brought up to a level approaching the rail rates. If this were done, the water lines would certainly be unable to obtain traffic and would be put out of business.

The big question involved in this bill, and one which Congress alone must determine, is what shall be the basis of waterway rates under regulation; whether rates shall be made upon the basis of the cost of the waterway service without regard to rates of any other form of transportation, in order that the public may have the benefit of low-cost water transportation.

The third question is how can this bill be made to meet the needs of water transportation. As stated above, the big question is the policy of Congress as to waterways and this policy should be clearly defined by an amendment to section 202, which is the declaration of the policy of Congress. I would suggest for the consideration of the committee that this section be amended to read as follows:

SEC. 202 (a). It is hereby declared to be the policy of Congress to promote, encourage, and regulate transportation by water carriers in such manner as to