cease. differentials reduced to the point where joint rail and water traffic will virtually This broad proceeding involves all of the joint rates thus far established in connection with water lines on the Mississippi, Ohio, and Warrior Rivers. This case is now set down for hearing at New Orleans on the 20th of this month. While we agree with the Coordinator that his earlier opinions were valuable in the extension of joint rail and water service in the public interest, the Interstate Commerce Commission, in the later ex-parte decisions, has shown an attitude of hostility toward this whole effort at coordination. The railroads have been quick to sense this change in the attitude of the Commission and this mass attack by them upon the whole existing basis of joint rates we deem to be the result of their belief, that the Interstate Commerce Commission will be inclined to use these proceedings as a basis to further reduce the joint rail and water traffic which has been built up in the public interest over a period of 15 years, narrow the advantages which the shipper enjoys from these joint rates and thus automatically return a large part of this traffic to the all-rail routes at a tremendous cost to the shippers of the interior. With constant observation of these tendencies on the part of the Interstate Commerce Commission to use its discretionary powers to minimize water transportation in interstate commerce, the shippers are unalterably opposed to the enactment of any such law as is proposed in S. 1632 which gives to the Commission powers which put water transportation completely at its mercy. The shipping interests which I represent fear and object to the character of legislation proposed in S. 1632 because we believe that water transportation carried on upon the public waterways should be on a competitive basis. If the character of regulation here proposed is made effective, it will not only tend toward monopoly and limitation of service, but by its very terms and by placing the regulation of both waterways, highways, and railroads under the jurisdiction of the Interstate Commerce Commission it offers the opportunity for a very substantial elevation in the whole scheme of rates by all forms of interstate carriage, a thing which we believe to be against the public interest. It gives the Commission the power to increase the cost of domestic transportation by hundreds of millions of dollars annually. This, in our judgment, is not the road to recovery. Mr. MANSFIELD. Mr. Brent, I live in Texas, as you know. Texas normally produces about one-third of the cotton crop of the United States. Mr. BRENT. Yes, sir. Mr. MANSFIELD. Normally ranging from 4 to 5 million bales. 'Mr. MANSFIELD. Practically all of that cotton is manufactured outside of Texas. Mr. BRENT. Correct. Mr. MANSFIELD. We have very, very few mills. Mr. BRENT. That is true. Mr. MANSFIELD. The rate on that cotton to the mills in New England by rail from Houston and Galveston, which is the greatest cotton center, to Fall River, is $1.54 per hundredweight, or $7.70 a bale. Mr. BRENT. Correct. Mr. MANSFIELD. It is the same to New Bedford, the same to Taunton, Willimantic, and Danielson, in Massachusetts and Connecticut. The rate on the same cotton by ship in the intercoastal trade is 35 cents a hundred pounds to Falls River, and to New Bedford, or $1.75 a bale. Mr. BRENT. Yes. Mr. MANSFIELD. Approximately $6 a bale less than the all-rail rate. Mr. BRENT. That is about the relation generally. Mr. MANSFIELD. If all this is put under one organization to coordinate it, what in your judgment would be the effect on these rates? What would be the result? Mr. BRENT. They would go up. Mr. MANSFIELD. The water rate would go up? Mr. MANSFIELD. Would the rail rate come down? Mr. BRENT. No; because those rates have been fixed by the Interstate Commerce Commission as reasonable maximum rates. You let them try to bring them down and see how many railroad lawyers there will be right around telling them that they have once fixed them and that their costs are getting greater and not less; and they will not have a leg to stand on to reduce them, and they will not reduce them. Mr. MANSFIELD. The rail rates to the mills in North and South Carolina is $1.22 a hundered, or $6.10 a bale. Mr. BRENT. Yes, sir. Mr. MANSFIELD. We have no water rates to the Carolina mills. The Shipping Board advises me that none have been filed and no ships are actually in operation carrying cotton from Texas around to those ports. Mr. BRENT. The Baltimore & Carolina has had a rate from Corpus Christi to Charleston and Savannah-Charleston, I think—of 30 cents a hundred for the last four or five sesons. Mr. MANSFIELD. Is that still in operation? Mr. BRENT. Yes, sir; certainly it is. I think they take some cotton from Corpus Christi. They have done it year after year. Mr. MANSFIELD. Possibly so. I investigated only as to Houston and Galveston. I omitted Corpus Christi. Mr. BRENT. They do not take cotton from Houston and Galveston, but they have a low rate in there. It does put cotton into the Carolinas at a much lower rate than the railroad rate. Certainly it is going to be advanced if we get this handicapping committee sitting here in Washington trying to make all of these things coordinated. I want to say just one word about this word "coordination." There is a lot of talk about coordination, but the only kind of coordination that I know anything about that means anything between rail and water lines is joint rates and through bills of lading. So far as the public is concerned, that is what they are interested in, a through obligation of carriage at a known rate. I started in 1918 to begin to build up those joint rates when I took charge of the Federal Barge Line. We got a few of them under the Railroad Administration, but mighty few. When we went out from under the Railroad Administration into the War Department, March 1, 1920, I filed a petition with the Interstate Commerce Commission asking for a broad basis of rates. I did not get a decision in that case until 1923. Then it was not an order. It merely remanded us to what they called "friendly negotiation" with the railroads. That opinion was written by Mr. Eastman, and it was a very constructive opinion. We did go to work with the railroads, and we got in a lot of joint rates. The result was that our joint traffic began to build up, because the public liked joint service. When I left the Barge Line in 1927, 70 percent of the total traffic of that line was coordinated as far as it will ever be coordinated under any law that we will ever put on the statute books, because that is what it means. All through that period every railroad organization in the country was opposing that thing. We had to make a fight for everything we got. And since that time the Interstate Commerce Commission has been whittling down the differentials and taking out the privileges that go with those joint rates. They have done nothing for coordination, and neither have the railroads. There is no reason to write the water lines into this thing for regulation in order to get coordination. They are the ones that want it. But the law gives the Commission the right to coordinate today, and they are not doing it. The result is that last year the general traffic of the Federal Barge Line had dropped to 30 percent instead of 70 percent, as it was when I was there. We can have coordination under the present law if the Interstate Commerce Commission will do what the law mandates it to do, but we do not have it and we are not going to get it until they have all the power over everybody in their hands, and then I doubt if we will get any coordination because there will not be any water lines left. The CHAIRMAN. What is the limit to which they go in this regulation of the water lines? Suppose there is some small line that is transporting from one State to the other, like from Maryland to Virginia and Virginia to Maryland. Mr. BRENT. It is permissive, Mr. Chairman. If a water line asks for joint rates, the Commission will enter a hearing and unless the railroads object too strenuously they will possibly put in some rates. The CHAIRMAN. I mean under this proposed bill. Mr. BRENT. It was perfectly mandatory before. I believe that he has made it discretionary now. He has cut out some of the mandatory provisions. The water lines were mandated to join with the rail lines and truck lines before. The truck lines did not want it and the rail lines did not want it. So now he has kept the same permissive provision which is in the law now, that the Commission can fix these rates. But we have another statute, called the "Dension Act," which since 1928 has mandated the Commission that when anyone came to it who was engaged or about to engage in water transportation on the inland waterways he could come to the Commission and get a certificate of convenience and thereupon-that is the wording of the law-thereupon the Commission was mandated to fix joint rates and if necessary fix reasonable divisions. The only joint rates that they have fixed since they have cut the differentials in half-and they have cut the privileges so that they are not worth anything on one of the decisions it was taken to the Supreme Court and the whole thing was remanded. The CHAIRMAN. The point that I want to get is, how far this bill goes in reaching the small carriers that are simply carrying goods from one State to another. Mr. BRENT. So far as this bill goes, the Commission, I think, can order in joint rates between the railroads and these water lines. The CHAIRMAN. Suppose they are not connecting with the railroads at all, but are transporting commodities from one State to another? Mr. BRENT. At first it was very mandatory. As I recall some of these committee prints, I think he has written part of that out of it. Some of it is perfectly preposterous. In the first place I have a line where I would not mind having some joint rates, but I have never had the money to go before the Interstate Commerce Commission. I cannot afford to do it and take on the proceedings, the year or two that it takes to get a decision. Now, I do not think that this law is so drastic that it would force a small contract carrier, let us say, to make a joint rate with a railroad unless the Commission found it in the public interest. If they did, it would be done. The CHAIRMAN. Suppose they are not connected with the railroad at all? This applies to all carriers. Mr. BRENT. Yes; it applies to every water line. We have a "mosquito fleet" down in the bayous of Louisiana. All they do is to haul barges for other people. They will become contract carriers as sure as fate under this law. To what extent the Commission can extend the idea of coordination through joint rates to them is entirely, in my judgment, in the discretion of the Commission. That is why I object to this law. Nobody knows where it is going, nobody knows what the rights of the individual are, or what his duties are. It is all to be determined by a certificate to be given by the Commission, in which they say-and that is part of the lawthat they have the right to change or revise or revoke this permission at any time as they may see fit. The law gives them the right to give him the power to continue or a part or all of his line. They can cut his line in two if they want to, even in the first instance or afterward. Nobody knows what they can do with it. Every principal provision of this law is purely discretionary. And I want to tell you that the administration of the discretionary provisions of the law, particularly the fourth section, by the Interstate Commerce Commission, gives no water line any assurance, gives no water line any hope, or any desire, to go under the jurisdiction of that institution. The CHAIRMAN. You made the statement a while ago that there were probably hundreds in your section who knew nothing about this bill. Mr. BRENT. Certainly there are. The CHAIRMAN. It occurs to me that there may be many thousands throughout the United States. Mr. BRENT. There are. I am merely speaking of the bayous and the waterways in the immediate vicinity, along the Gulf coast of Alabama, Mississippi, and Louisiana, and a little in Texas. We know that there are 350 of those small operators there, in Florida, from Florida all the way up along the inlets of the Atlantic Ocean and the bayous and sounds clear up into New England. I say there are 100,000 operators, and I do not think I am far wrong. We do not have any clear list of them yet, because some of those boats are so small that they are not even registered in the Steamboat Inspection Service, yet they do a big business. They are merely pullers. The CHAIRMAN. That is under 5 tons, then? Mr. BRENT. No; 50 tons. They do not have to register under 50 tons, but they may have a 350-horsepower engine in that boat, and that is what they frequently have. The minute that they pick up a barge and begin to haul somebody's sugarcane from a plantation up to a railroad station or somewhere else, they are going to become contract carriers and they are going to come under this bill. What in the world do they know about their obligations as contract carrier, and why should they know about them? They perform an essential service, but there is no reason under Heaven to put that kind of boats in here, except to get away from competitors of the railroads. The CHAIRMAN. Any further questions? Thank you, Mr. Brent. Mr. MANSFIELD. Mr. Chairman, for the purpose solely of keeping the record straight, I want to submit just a few figures here. The CHAIRMAN. We would be very glad to have you do so. Mr. MANSFIELD. When Mr. Fitzgerald was before us an hour or so ago, I called his attention to the fact that his port had increased its business, but he would not allow me to compliment it. He said that they had lost enormously and that the ships had lost enormously. I find that the annual report of the Chief of Engineers of the War Department shows that as to the tonnage in 1932 and 1933, Boston in 1932 had 14,012,172 tons, and it 1933, it had increased to 15,378,133 tons. The value in 1932 was $437,499,622, while in 1933, it had increased to $548,550,364. I know of no other American port that had such an enormous increase in business for that year. For the sole purpose of keeping the record straight I desire to make a brief statement with reference to the business of the port of Boston in the last year or two. The mayor of Boston, in reply to my question, stated that the business was diminishing enormously under present conditions and was not recovering. In reply to that I will say that the last Annual Report of the Chief of Engineers of the War Department shows that in 1932 the commerce of the port of Boston was 14,012,172 tons, with a valuation of $437,499,622. In 1933 it had increased to 15,378,133 tons, with a valuation of $548,550,364. In other words, in that 1 year the tonnage increased by 1,365,961 tons, and the valuation was increased by $111,050,742. This is the last year for which we have official returns. I do not know of any other American port having such a large increase in business. for that year. That is all I have. The CHAIRMAN. We will stand adjourned until tomorrow morning at 10 o'clock. (Whereupon, at 5:05 p. m., the committee adjourned until 10 a. m., Saturday, May 11, 1935.) |
