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A frequently stated figure of toll charges for a typical C-3-type vessel is $7,000 per transit of the Canal, or a total of $14,000 per round trip.

Charter hire for intercoastal vessels is set at an extremely low rate by the Government to encourage revival of domestic shipping, and Congress has before it legislation to continue this practice from the present June 30 deadline to September 30.

At that point, these operators face the option of buying the ships or discontinuing operations. It is not an easy decision to make in the face of a $14,000 toll charge per round voyage, with a prospective increase.

In 1939, the United States had 53 combination passenger and freight ships and 415 freight ships in its domestic trade. The fleet, as did a similar fleet in World War I, bore the early brunt of wartime shipping until United States shipbuilding industry could get under way and provide ships. As a result, the fleet was largely sunk.

Today, there is no such domestic fleet. The coastwise trades are dead, and the lone bright spot is represented by approximately 52 ships surviving in the intercoastal trade, half of which are under charter from the Government.

It is the development of this fleet that is adversely affected by the present toll-rate structure, and it is upon this fleet that the seaports of the United States must pin their hopes for the maintenance of industry and population at port centers.

Foreign-trade tonnages at ports are dwindling after a postwar peak, and domestic tonnage thus becomes vitally important. The port of San Francisco had an intercoastal traffic prewar averaging a million and a half tons a year. In 1948 this figure dropped to half a million, and the port of San Francisco must look to the intercoastal fleet for increased tonnage for continued port activity.

In 1939, the intercoastal trades carried 421,985 net tons through the port of New Orleans. Last year this same figure was 76,200 net tons.

These are just two examples. Every important seaport in the Nation can show similar figures. That is why unanimous expression on Panama Canal tolls appears

in the resolutions of the American Association of Port Authorities, representing the port industry as a whole; the various regional port associations; and the various affected industries. I request of the committee permission to lodge these resolutions for the record.

Mr. O'TOOLE. That permission is granted. (The matter referred to is as follows:)



Whereas the maintenance of a strong intercoastal fleet is necessary to the national economy and in the interest of national defense; and

Whereas the amount of tolls charged for the transit of the Panama Canal has a direct bearing on the existence of that fleet : Therefore be it

Resolved, That the American Association of Port Authorities hereby urges Congress to enact legislation providing for the fixing of tolls to be paid by commercial vessels for transit of the Panama Canal in an amount not greater that their proportionate share of the costs based upon the tonnage of such vessels in relation to the total tonnage of all vessels using the canal.

(United States members only.)


ATLANTIC PORTS ASSOCIATION, INC., WASHINGTON, D. C., APRIL 21, 1950 On March 2, 1950, the House Merchant Marine and Fisheries Committee adopted and issued its second interim report of its Subcommittee on Panama Canal Tolls and, briefly stated, decided to postpone action on changes in tolls until some changes recommended by Bureau of the Budget on January 31, 1950, were accomplished.

The President promptly issued a proclamation on March 4, 1950, postponing to April 1, 1951, any action on increasing tolls.

The changes recommended by the Bureau of the Budget are

(a) A division of the governmental and commercial functions of the Canal, the former to be placed under a newly created “Canal Zone Government,” the latter in the presently existing Panama Railroad Company, name of which would be changed to "Panama Canal Company.” The military to be billed for services rendered by either newly created organization and free tolls to Government vessels to be eliminated.

Recommendation: It is recommended that this association support this viewpoint on assumption that there will be a reasonable allocation of costs.

(b) That in the division of government and commercial functions, a transfer of capitalization takes place, and interest on the full capital cost of building and improving the Canal continue to be paid.

Recommendation: The National Federation of American Shipping believes this to be an untenable position (their Bulletin No. 5 of March 13, 1950), feeling, if accepted no recognition would be given to national-defense value, that Canal was built for dual purposes of national defense and commerce and it is impossible to determine which purpose was primary. The federation believes, under the circumstances, that a substantial part of the investment cost should be charged off as national defense but are agreeable to an even (50–50) division when absolute segregation is difficult.

It is recommended that this association join in efforts to have adequate recognition given to defense cost and value of Canal in the capital base for toll purposes.

(c) Authority given to Board of Directors of Panama Canal Company, when constituted, to establish toll rates, subject to President's approval.

Recommendation : Provided there is an equitable basis or formula determined upon (as mentioned in subparagraph (6) above), it would appear, if the Panama Canal Company is created, there could be no valid objection to such authority being given to its Board of Directors, and our association is advised to take such a stand.

Aside from whatever action of comment this association may desire to take on the above-mentioned Bureau of the Budget proposed changes, the situation as of date of this meeting appears to be the awaiting of introduction of a bill establishing a new tolls formula.

When such a bill is introduced and your committee has had an opportunity to study it, and especially what is said in reference to interest charges and capitalization of the proposed Panama Canal Company, we can better determine our course of action. If the bill makes an equitable recognition between defense and commercial features, provides for Government ships to pay their own way and fairly divides the cost of dual-purpose activities, it would appear we can support it. If otherwise, our association should be prepared to vigorously fight the portions of the bill which appear inequitable to our industry.

L. J. COUGHLIN, Chairman.


Miami 15, Fla. Subject: Panama Tolls. To: Members of Congress of the States of North Carolina, South Carolina, Geor

gia, and Florida. At a special meeting, held in Savannah, Ga., April 17 and 18, 1950, the South Atlantic and Florida Ports Conference, a voluntary nonprofit corporation, went on record as supporting the report made by the Association of American Steamship Operators to the Bureau of Budget regarding Panama Canal tolls.

Of the many reports and surveys which have been conducted by various associations and studied by the South Atlantic and Florida Ports Conference, the survey and report of the Association of American Steamship Operators appears to be the most comprehensive and well planned. Their formula for computing the tolls to be charged is the most equitable of any advanced so far.

Since the South Atlantic and Florida Ports Conference has as its purpose the promotion and encouragement of transportation and is dedicated to assisting in the development of transportation, it has taken an active interest in the intercoastal operation. It appears to the conference that the present practice of charging the entire cost of operation of the Canal Zone to shipping and making no provision for the Canal's contribution to national defense is entirely inequitable. The present form of accounting makes the tolls charged exorbitant. The conference feels that particular attention should be paid to the following four points:

(1) Commercial shipping should pay only its own way, with tolls reflecting the true cost of providing transit.

(2) Interest should not be charged on funds used to build the Canal. No interest or tolls is charged on the 12 other Federal-built canals. Panama Canal interest charges should be eliminated as a minimum acknowledgement of its national defense.

(3) All vessels should pay tolls at the Canal. Government vessels now transit the Canal toll-free.

(4) Commercial shipping should pay through tolls no more than half the cost of the dual-purpose expenses at the Canal. Military and civil government activities should bear the remaining one-half.

The South Atlantic and Florida Ports Conference respectfully submits that the present application of the Panama Canal tolls is working to the detriment of intercoastal shipping, and that any increase in the tolls would completely throttle those operations. Your assistance in bringing about equitable determination of Canal tolls is urgently sought by this conference. Yours very truly,

Capt. CHARLES A. OLSEN, President, South Atlantic and Florida Ports Conference.


Mobile, Ala., March 28, 1950. The Gulf Ports Association, at a special meeting held in Washington March 23, adopted the following resolution :

"That Panama Canal toll rates be based on fair and equitable principles established by Congress, and that the shipping industry should pay the full, actual, out-of-pocket cost of commercial transits only, without profit, loss or interest and without including elements of military and civil government expense.”



List of Pacific coast organizations passing formal resolutions urging the estab

lishment of a new formula for determining tolls on commercial vessels at the

Panama Canal
Seattle-Puget Sound area :

Aberdeen Chamber of Commerce
Associated General Contractors of America, Inc., Mountain Pacific Chapter
Inland Empire Waterways Association
Northwest Marine Terminal Association
Propeller Club of the United States, port of Seattle
Seattle Chamber of (Commerce

Tacoma Port Commission
Portland-Columbia River:

Commission of Public Docks
Northwest Canners' Association
Propeiler Club of the United States, port of Portland

San Francisco-Bay area :

Alameda Chamber of Commerce
Bay Area Maritime Committee
Board of Port Commissioners, port of Redwood City
California Association of Port Authorities
('alifornia Legislature, senate joint resolution
California State Chamber of Commerce
Canners' League of California
Export Managers Association of San Francisco
ILWU, local 10
Marine Exchange, Inc.
Monterey Fish Canners
Oakland Board of Port Commissioners
Oakland Chamber of Commerce
Oakland World Trade Club
Pacific Traffic Association of San Francisco
Propeller Club of the United States, port of San Francisco
Sacramento Chamber of Commerce
San Francisco Chamber of Commerce
State of California Governor's Conference on Employment

Women's Organization for the American Merchant Marine
Los Angeles-Long Beach area :

Board of Harbor Commissioners, Los Angeles
Board of Supervisors, Los Angeles County
California-Arizona Cotton Association
California Fish Canners' Association
Harbor Commission, city of San Diego
Foreign Trade Association of Southern California
Long Beach Board of Harbor Commissioners
Long Beach Chamber of Commerce
Los Angeles Chamber of Commerce
Los Angeles Traffic Managers Conference
Marine Association of Commerce
Marine Underwriters Association
Motor Truck Association of Southern California
Printing Industries, Inc., of Southern California
Propeller Club of the United States, port of Los Angeles
San Diego Chamber of Commerce
San Pedro Chamber of Commerce

RESOLUTION OF THE ABERDEEN CHAMBER OF COMMERCE, JANUARY 10, 1950 Whereas the Aberdeen Chamber of Commerce of Aberdeen, Wash., representing the industrial and commercial interests of this community, is interested in maintaining a solvent and healthy American merchant marine; and

Whereas the present method of computing Panama Canal tolls is inequitable, unduly burdensome on commercial shipping, and results in higher freight rates that restrict the markets for commodities produced in the Pacific Northwest: Now, therefore, be it

Resolved, That the Congress be requested to provide a method of fixing tolls against commercial vessels using the Panama Canal which will reflect the true cost of operation and maintenance properly chargeable against such traffic and eliminate (1) the cost of providing free transit to Government vessels, (2) interest charge on the investment, and (3) at least one-half the cost of carrying on governmental functions in the Canal Zone.

HAL Boss, Manager.



Whereas maritime commerce is essential to the economic welfare of the entire Puget Sound a rea; and


Whereas the cost of the intercoastal maritime trade is a positive factor in the cost of construction in the Puget Sound area ; and

Whereas the present accounting system of the Panama Canal, particularly the methods of assessing and computing tolls is such that an unfair burden is placed on Pacific coast shipping cargoes to cover the cost of unrelated Government activities at the Panama Canal; and

Whereas commercial shipping is being further burdened with the cost of national defense features of the Panama Canal which have no immediate relation to Canal operation for the transiting of commercial vessels: Now, therefore, be it

Resolved by the Mountain Pacific Chapter of the Associated General Contractors of America, Inc., as follows:

1. That Congress should recognize the proper relationship of commercial shipping in its use of the Panama Canal.

2. That Congress should recognize the national defense features of the Panama Canal which have no immediate relation to commercial shipping.

3. That Congress should adopt a proper corporate accounting system for the Panama Canal providing that the tolls to be exacted of commercial shipping should not include costs of unrelated Government activities or for the free passage of Government ships.

4. That present interest charges should be discontinued. 5. That all Panama Canal tolls be computed under a fair and equitable formula.

That this resolution be communicated to the President of the United States, members of the Washington delegation to the United States Congress, to the House Merchant Marine and Fisheries Committee, and the Senate Interstate and Foreign Commerce Committee.

Adopted by the board of trustees of the Mountain Pacific Chapter of the Associated General Contractors of America, Inc., at their regular meeting January 9, 1950.

WAYNE C. SUTTON, President.



Whereas this association has an interest in the promotion and preservation of our American merchant marine; and

Whereas the said merchant marine is being penalized by bearing an unduly large percentage of the amortization and maintenance costs of the Panama Canal: Now, therefore, be it

Resolved, That this association support legislation that the tolls for the use of said Canal be apportioned among all of its users, together with a reasonable share of said tolls being chargeable to national defense; and be it further

Resolved, That copies of this resolution be transmitted to each and every member of the congressional delegations of the States of Washington, Oregon, Idaho, Montana, and Wyoming, urging them to take necessary steps for the accomplishment of the aims of this resolution.


Whereas a healthy American merchant marine is important to marine terminals and to the general welfare of the Northwest, and

Whereas the present method of computing Panama Canal tolls is most unfail to commercial shipping: Therefore be it

Resolved, That Congress provide a formula for computing Panama Canal tolls that will reflect the true cost of providing transit of commercial vessels, eliminating the cost of certain dual-purpose items as well as the cost of providing free transit to Government vessels; be it further

Resolved, That the president of the Northwest Marine Terminal Association is requested to furnish copies of this resolution to the President of the United States, the Washington and Oregon delegations in Congress, and to members of the House Merchant Marine and Fisheries Committee, and the Senate Interstate and Foreign Commerce Committee. Respectfully submitted.

D. J. McGARITY, President.

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