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Unfair Competition, a Handicap to the Merchant Marine By H. B. Walker* United States in times of peace transports its men and sup- plies for military stations outside its borders on government transports. It is admitted that when the transport services of our army and navy were started there was not the frequency of service which private lines main- tain today and in many cases no serv- ice at all to the points where the army and navy desired to convey their men and supplies. This condi- tion no longer exists and lack or in- frequency of service cannot be said to be a reason for their continuance. There is a far greater frequency of sailings maintained by private lines than the transports can supply. These lines are entirely able to take care of the transportation needs of the war and navy departments at a cost substantially less than the cost of the maintenance and operation of the transports. N’ NATION other than the Transportation Would Cost Less If the army and navy departments were to transport their personnel and supplies by the private lines there would be a material saving to the government in transportation costs. From the best information which we are able to obtain, if the transporta- tion of the personnel of the army and their supplies were turned over to the private lines, there would be a saving of from two to two and one- half million dollars annually in ad- dition to more frequent service. There is also the indirect aid which would accrue, and this is also true with respect to naval supplies, of an increased purchasing market. Private lines not only operate their vessels from the American ports from which the army and navy transports oper- ate, but from a great many other ports. If their freight was to be handled by the private lines, a great many more suppliers in the United States would have an opportunity to bid, knowing that they would not be barred because of higher inland freight rates: than other competing manufacturers and suppliers enjoy. Shippers in the Middle West would have an opportunity of bidding and shipping via the most economical *Abstract of an address by H. B. Walker, president of the American Steamship Owners’ Association before A naa cies age Conference on the erchan arine, Washington, : 27-28, 1982. id oo 12 route, where now if they bid they are compelled to ship to the ports from which the army and navy trans- ports depart, and figure in their bid the cost of the inland transportation. From the point of view of the man- ufacturer or supplier it. would, there- fore, put all on a basis as nearly equal as their location to the vari- ous ports will permit. This fact has been recognized by the Mississippi Valley association which at their thirteenth annual meeting at St. Louis, Nov. 28-24, 1931, adopted the following: “We note with regret and dis- favor the continued operation of army and navy transports out of the port of New York and San Francisco, and of the govern- ment-owned Panama. Railroad Co. steamship lines out of New York. These services are un- necessary and uneconomic and constitute a geographical dis- crimination against the Gulf ports and the producing inter- ests of the Mississippi valley.’’ The Middle West Foreign Trade committee, in annual convention at Louisville, Ky., Oct. 27 and 28, 1931, adopted a resolution favoring the en- actment of legislation: “To discontinue the govern- ment-owned Panama Railroad Steamship Co. and the army and navy transport services. Govern- ment-aided private American ocean lines and the remaining unsold shipping board lines fur- nish adequate service in all trades and there would seem no justification for maintaining the Panama, army and navy serv- ices by the government. Any services which it is necessary for the government to maintain un- til private enterprises can take them over should be under con- trol of the shipping board.”’ The Panama Railroad Steamship Line With respect to the Panama Rail- road Steamship line it can be said that there was a real need for the service it rendered at the time of its commencement. This service to- day is operated in competition with private lines without the slightest justification. They not only carry government freight but furnish very virulent competition for the carriage of private freight. As a matter of fact, this line not only engages in MARINE Revirw—March, 1932 the transportation business between the Panama canal and New York, but until recently operated a service down the West coast of South Amer- ica, and since its withdrawal has placed the boats in the trade between the Canal, Haiti, and New York. There is no fair reason for making the ports of Haiti ports of call as there is now and has been for some time a service between New York and Haiti which has been able to fully take care of the requirements of the trade. The fact that the Pana- ma Railroad Steamship Co. is accept- ing freight for these ports makes only more difficult the operation of the privately-owned line in this trade. This statement is equally true with respect to the business carried on by the Panama Railroad Steamship line to the Canal Zone. In normal times there is in addition to the lines regu- larly serving the Canal Zone prac- - tically an intercoastal sailing a day from New York and numerous sail- ings to and from other ports. These services are more than ample to take care of the needs of the canal. As a matter of fact, the Panama Rail- road Steamship line here again not only carries government freight but its extends its activities to competi- tion with the regularly established lines for commercial freight. To what extent this is true may I quote from a statement showing the freight tonnage carried to and from various ports by the Panama Railroad Steam- ship line during the fiscal year end- ing June 30, 1931: Private’ Freight Is Carried The total southbound movement of government freight equaled 60,530 tons and produced $404,225.22 in revenue, as against a _ total south- bound movement of 63,679 tons of commercial freight producing $479,- 729.95 in revenue. Northbound there was a total movement of 795 tons of government freight producing $9,- 689.23 in revenue, as against a to- tal northbound movement of. 38,460 tons of commercial freight, producing revenue amounting to $287,794.97. The total movement, both north and southbound for the year equaled 163,463 tons, of which private freight totaled 102,139 tons and gov- ernment freight 61,325 tons, the to- tal freight revenue being $1,181,- 439.37, of which commercial cargo paid $767,524.92 and government cargo $413,914.45. These figures speak for themselves and show very definitely, that not only is there no real value to the government in a continuance of this service but that it constitutes a se- rious handicap to the private lines operating in this trade. This line is being operated as a loss to the gov- ernment and in the interests of econ- omy should be discontinued, togeth- er with the army and navy transport services, without delay.