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Why West Coast Fears Ship Act Pacific Marine Interests Are Alarmed by Section 28, Foreseeing Effective Retaliation By Foreign Lines HILE enthusiastic over the W plans for an American mer- chant marine and endorsing almost in its entirety the Jones act in- tended to accomplish that purpose, never- theless the Pacific coast is deeply con- cerned over the effects which Section 28 of that measure may have on the future of shipping from north Pacific gateways. While it is true that Section 28 has its staunch defenders on the Pacific, the majority of shipping opinion on that coast believes that this pro- vision of the law is likely to drive business from the Pacific 'coast and send foreign ships to gulf and Atlan- tic ports. The fact that the section in question has been suspended for the remainder of 1920 has not tended to quiet the fears of those opposed to the much discussed clause. The Pa- cific coast, as it views the law now. will not rest easy until Section 28 has been repealed. Shipping men of the state of Wash- ington are gratified that the senior senator from -that state should have been the prime mover in enacting a bill so comprehensive and containing so many splendid provisions for build- ing up and maintaining a large mer- chant marine under the flag of the United States. The preamble to the bill is considered an excellent outline of what the government should do for its shipping. It is a strange fact, how- ever, that the ports of Senator Jones' Own state and the adjacent common- wealths to the south, fear that Section 2% will work an irreparable injury to the shipping of California, Oregon and ashington and drive carriers to other sections of the United States. What the West Fears Because the position of north Pacific Ports is not understood, it is not strange that the East should be surprised at the opposition on that coast to Section ® Brielly stated this is the basis of Protest : Most of the export and import com- Modities Passing through Pacific gate- we are subject to the long trans- ronan rail haul. If the prefer- a ete rates of Section 28 are put Pte all the foreign carriers now NS to that coast will naturally riven to Canadian ports where BY BR. C. BILL no discrimination will be practised or they will be diverted to gulf and At- lantic ports where they can compete on a parity with American vessels. Advocates of Section 28 reply that it will be well to have none but Amer- ican carriers operating out of Pacific ports. The answer to this is that ill feeling abroad will be engendered which will be reflected in discriminatory regu- lations against American vessels in other parts of the world. Further, for- eign buyers usually nominate the car- riers by which their goods shall be shipped. They will naturally favor their own ships. Thus cargo originat- ing in the interior or close to the At- lantic seaboard will be moved to the East and then by the all-water route. The Pacific coast will thus lose its shipping. In few words, these are the outstanding arguments of both. sides. To. understand the situation, it' must be kept in mind that a large propor- tion of the cargo loaded. or. discharged at Pacific ports is neither of local origin nor is it. consigned to- local points. Consequently, much of the com- merce of the Pacific gateways will be affected by Section 28. Of local cargo alone, such as lumber, salmon, salt fish, flour, fruits, coal, grain and canned milk,. there is far from sufficient to fill the ship space now regularly oper- ating out of Pacific ports. Thousands of tons of manufactured products mar- keted in the Orient are moved over- land and shipped from the west coast. Likewise great quantities of manufac- tured articles or raw materials are land- ed there for shipment by rail to all parts of the United States. The competition for handling this overland business has always been very keen between the Atlantic, gulf and Pa- cific ports. Panama canal, some business has been diverted to the all-water route between the Orient and New York--business, that in the days before the canal moved to Seattle or other Pacific ports. For years, special rail rates have been al- lowed by the railroads to permit some of this cargo, having its origin or final destination east of the Mississivpi, to move across the country and through the Pacific terminals. This was advan- tageous to the railroads for it helped to furnish freight for their cars in both directions. The cars that came west 457 ports. Since the opening of the with export steel products from the manufacturing centers near Pittsburgh returned to the East with Pacific lum- ber or oriental imports. Otherwise, many cars would have come west emp-_ ty. These rates on through freight are in many cases considerably lower than the domestic rates on the same com- modities. In this manner transpacific trade has been fostered. Some of the foreign steamship lines have for years had traffic agreements with American railroads. This special rate structure is designed to preserve q parity of the through ocean and rail combination of rates via both the Atlantic and Pacific gate- ways. For its foundation, it has the rail rates between representative interior territory and New York plus the ocean rates between New York and the Orient. These tariffs are so adjusted as to en- able the transcontinental lines to com- pete against the combination of the do-5 mestic rail rates and the ocean rates -- applying from points on the Atlantic seaboard. They also apply on _ the Canadian lines between points in the United States and British Columbia - East Has Advantage Notwithstanding the low through rates, freight designed for foreign des- tination naturally flows through the At- lantic seaboard and the Pacific ports have always had to meet the keenest competition from eastern ports. As an illustration the following table shows the small proportion of freight which was moved across the country as against that passing through New York. On a few of the larger items, customs reports of exports, by value, during the first quarter ef 1920 show the follow- ing totals: From From Commodity New York Seattle Autos 3 $10,650,000 $ 120,500 Auto patts.2.-. 1,300,000 30,000 Iron and steel ar- ticles 5.1.4.4; 13,000,000 2,500,000 Machinery ....... 9,000,000 750,000 Cigarets =.,....4- 2,000,000 730,000 It is true that during the period in question, Pacific ports were under an additional handicap because of the car shortage and railroad disturbances. All the business mentioned above originat- ed near the Atlantic coast and was hauled to New York under regular