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Budget covering the within subject, take into consideration the matters submitted herein and act favorably upon the suggested policy hereinabove stated; and be it further

Resolved, That a copy of this resolution be forwarded to each Member of the Congress from the State of California.


SOUTHERN CALIFORNIA, LOS ANGELES, CALIF., FEBRUARY 23, 1950 Whereas the Panama Canal is a national-defense utility and also available to commercial ocean transportation to southern California and the Pacific coast, and

Whereas sound economic development of southern California is a desirable objective, and

Whereas inequitable freight levies charged against products needed in the economy of southern California put its industries in an unfavorable competitive. position coastwise, and

Whereas all freight carried commercially including a large bulk of lumber, pulp, and paper products shipped via the Panama Canal bear the burden of present toll before being available to the printer to produce the essential products of the press, and

Whereas the present method of computing Panama Canal tolls is unfair to commercial carriers of products that printing and other industries require: Now, therefore, be it

Resolved, That the Congress of the United States provide a formula for establishing a definite policy for assessing tolls on commercial shipping through the Panama Canal. Such formula should be based solely on the cost of providing transit to commercial vessels. All expenses properly chargeable to the national defense should be so allocated and not to be considered as factors in the toll formula ; be it further

Resolved, That copies of this resolution be sent to proper interested official parties.


LONG BEACH, AUGUST 19, 1949 Whereas the Propeller Club of the United States, Port of Los Angeles-Long Beach, in accordance with its policies to regard the welfare of the merchant marine as important to the welfare and security of the people of the United States, takes cognizance of the Panama Canal and its functions as vital to the continuing growth and progress of American shipping; and

Whereas it appears that the financial operation of the Panama Canal, more particularly the methods of assessing and computing tolls, is such as to inhibit the growth, progress, and security of the merchant marine; and

Whereas it further appears that the burden of maintenance of the Canal, including the support of certain Government functions not rightly considered to be a part of those directly related to the transists of commercial vessels, are nevertheless considered in the computing of tolls for the transits of such vessels : Now, therefore, be it

Resolved, That the Propeller Club of the United States, Port of Los AngelesLong Beach, recommends to the Congress of the United States, and such other authorities as may be deemed fitting and proper in the premises, that a formula for fixing Panama Canal tolls be fixed so that such tolls will reflect the true costs of handling and otherwise servicing the transits of commercial vessels through the Canal and that consideration be given to the fact that the present method of financing and assessing tolls places an inequitable and unjustifiable burden upon commercial shipping in that it includes expenses rightly chargeable to certain governmental and military functions not a part of commercial shipping costs.




RESOLUTION OF SAN DIEGO CHAMBER OF COMMERCE, AUGUST 24, 1949 Whereas the Panama Canal was built mainly to fulfill our military necessity for a two-ocean navy, as well as supply a convenience to commercial shipping ; and

Whereas the trend of population and industry is moving westward, creating an increased demand for water-borne commercial shipping through the Canal ; and

Whereas the present operating costs of American merchant vessels have increased out of proportion to revenue, discouraging the revival of American merchant shipping; and

Whereas transit tolls at the Panama Canal represent a very important item in the operating cost of many American merchant vessels, particularly those engaged continuously in the intercoastal trade; and

Whereas any deterioration of merchant shipping must have a most disastrous effect upon the port, whose very existence and economy depend upon waterborne commerce; and

Whereas the interests of national defense require that merchant shipping as well as ports be in operation and available in emergency; and

Whereas the Panama Canal pays no interest to the Treasury and the so-called interest exists only on the books of the Canal, and it is used as a cost factor in calculating toll rates; and

Whereas, through tolls, commercial shipping has more than paid its own expenses and civil government expenses and has provided a considerable surplus : Now, therefore, be it

Resolved, That the board of directors of the San Diego Chamber of Commerce earnestly urge the Congress of the United States to establish a fair and equitable formula for computing tolls on all shipment through the Panama Canal, eliminating toll-free Government ships and charging tolls on commercial ships on the basis of costs attributal to the transits of commercial vessels, thus encouraging revival of American shipping, which in turn will increase tonnage through the Panama Canal.


Whereas San Pedro, Los Angeles Harbor, is largely dependent on shipping, and the welfare of the merchant marine is of prime importance to San Pedro; and

Whereas the Pacific coast ports handle 64 percent of the combined foreign and intercoastal tonnage passing through the Canal; and

Whereas the operation of the Panama Canal is costing shipping more than seems equitable: Now, therefore, be it

Resolved by the board of directors of the San Pedro Chamber of Commerce, That our Representatives in Congress be urged to vote for the establishment of a fair and equitable formula for computing tolls for commercial shipping and that there be charged to commercial shipping only those costs attributable to the transits of commercial vessels.

Passed September 27, 1949.
Mr. O'TOOLE. Are there any questions, Mr. Thompson?
Mr. THOMPSON. No, thank you.
Mr. O'TOOLE. Mr. Weichel.

Mr. WEICHEL. How much capital outlay did the commercial shipping of the country provide for the Panama Canal ?

Mr. AMUNDSEN. I am not too familiar with that.
Mr. WEICHEL. It did not provide any, did it?

Mr. WEICHEL. Then you are familiar with it, and you know that it did not provide any of the capital. Then what do you mean by paying their share if they did not provide any of the capital !

Mr. AMUNDSEN. Well, I would assume that there are certain direct charges and certain Canal overhead which is definitely allocated to the movement of commercial ships through the Canal.

Mr. WEICHEL. If they did not provide any of the capital, there is not any fair share of the capital, and what you are talking about is a fair share of the cost of operation?

Mr. AMUNDSEN. Yes, sir.

Mr. WEICHIEL. They had a free ride on the capital investment in the Canal. Now, how much of a free ride do you think they should have in the operation of it?

Mr. AMUNDSEN. I cannot answer that question, sir. I am just conveying

here the feelings of these groups about this matter. Mr. WEICHEL. With reference to toll rates, what was the rate before the war in 1938 and 1939, what was the rate for toll per ton?

Mr. AMUNDSEN. The toll rates!
Mr. AMUNDSEN. I am not familiar with those.
Mr. WEICHEL. You do not know anything about them?
Mr. AMUNDSEN. No, sir.

Mr. WEICHEL. You make the statement there that the survival of the commercial fleet depends on this fair division of the cost to bring back this intercoastal and coastal trade, and yet you do not know what the rate was before the war.

Mr. AMUNDSEN. No, sir; I do not.

Mr. WEICHEL. Then why do you think this is going to bring it back if you do not know that?

Mr. AMUNDSEN. I am simply here conveying the feeling of these various groups who have investigated that question.

Mr. WEICHEL. You are here explaining somebody else'e feelings, but you do not know anything about what you are talking about; is that it?

Mr. AMUNDSEN. Oh, yes; I do.
Mr. WEICHEL. All right, then; what is the rate now?

Mr. AMUNDSEN. I do not know it offhand, but it was quoted here yesterday several times.

Mr. WEICHEL. I know, but you are coming in here as an authority, and you do not know what the rate is now, and you do not know what it was before the war. What is the percetnage of foreign-flag ships as compared to the American-flag ships that transit the Canal ?

Mr. AMUNDSEN. I do not know that, sir.
Mr. WEICHEL. Do they pay the same rate?

Mr. WEICHEL. Then anything you talk about getting in the way of a reduction in tolls would be giving it to all of the world for the benefit of a few vessels here; is not that a fact?

Mr. AMUNDSEN. No; not a few.
Mr. WEICHEL. Well, how many.

Mr. AMUNDSEN. Before the war domestic shipping provided for a relatively larger share of the commerce in all of the ports of the Nation than foreign-flag shipping. That situation has been reversed because of the boom in foreign trade postwar and the decline of the domestic fleet because of the war.

Mr. WEICHEL. Is that the reason?
Mr. AMUNDSEN. Yes, sir.

Mr. WEICHEL. You know, there has been testimony given before this committee to the effect that the reason there is no intercoastal or coastal trade is because of the high rates that the coastal and intercoastal people have to pay for unloading, and that the rate charged for carriage is set by the Interstate Commerce Commission. That is the testimony that has been given before this committee.

Mr. AMUNDSEN. Yes, sir; we recognize that; but we also recognize the fact that tolls are a major factor also.

Mr. WEICHEL. Well, you do not know what the present tolls are or what they were, so you cannot talk about that; but supposing they were the same, the testimony given before the committee was with reference to stevedoring that the price of stevedoring had gone up 200 to 300 or 400 percent. That was the testimony given before this committee, and I am talking about operating since the war is over.

Mr. 'AMUNDSEN. Yes; stevedoring is a recognized factor in that.

Mr. WEICHEL. What is the increase in the price of stevedoring in the intercoastal trade?

Mr. AMUNDSEN. Well, it is several hundred percent.
Mr. WEICHEL. What was the price before the war?

Mr. AMUNDSEN. Well, there was a 10 percent differential rate applied to domestic shipping.

Mr. WEICHEL. What was it by the ton?

Mr. AMUNDSEN. I do not know the exact figure; I do not try to carry these figures in my head.

Mr. WEICHEL. Well, you are here as the representative of the American Association of Port Authorities. How do they charge for stevedoring—by the ton?

Mr. AMUNDSEN. They do not charge for stevedoring—-
Mr. WEICHEL. Well, they know what is going on, do they not?
Mr. AMUNDSEN. Yes, sir.

Mr. WEICHEL. Is it charged for by the ton; is that the way the charge is made now?

Mr. AMUNDSEN. Yes, sir.

Mr. WEICHEL. How much is the charge per ton for loading and unloading ?

Mr. AMUNDSEN. It would vary with the commodity.
Mr. WEICHEL. What?
Mr. AMUNDSEN. It would vary with the commodity.
Mr. WEICHEL. It would vary with the commodity!
Mr. WEICHEL. What is it on canned goods ?
Mr. AMUNDSEN. I cannot name you those commodity prices.

Mr. WEICHEL. You have been talking about the increase in Canal tolls. That has nothing to do with the increase in the amount of intercoastal business at all, according to the testimony we have had here since 1945.

Mr. AMUNDSEN. Well, but it is a factor in revịving these ports.

Mr. WEICHEL, But the big factor is the cost of loading and unloading and the rates charged for that.

Mr. AMUNDSEN. That is one factor.

Mr. WEICHEL. You do not have any control over the rates. The toll cost has not changed very much, but you do not even know how much it has changed. Do you know how much it has changed?

Mr. AMUNDSEN. No; I do not.

Mr. WEICHEL. You do not know whether the rate has changed at all, do you?

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Mr. AMUNDSEN. I know that there was a prospective increase earlier

this year.

Mr. WEICHEL. How much was the amount of that prospective increase?

Mr. AMUNDSEN. I think it was 11 percent; I do not recall.
Mr. WEICHEL. Eleven percent of what? What was it before?

Mr. AMUNDSEN. I have already stated that I do not know the previous rate.

Mr. WEICHEL. That is all.
Mr. O'TOOLE. Mr. Allen?
Mr. ALLEN. I have no questions.
Mr. O'TOOLE. Thank you, Mr. Amundsen.


TION OF AMERICAN RAILROADS Mr. O'TOOLE. Mr. Julius H. Parmelee or Mr. Gregory Prince, representing the Association of American Railroads.

Mr. PRINCE. Mr. Chairman and gentlemen of the committee, my name is Gregory S. Prince, assistant general counsel of Association of American Railroads.

If the chairman finds it consistent, I would like to submit a statements for the record by the 10th of July stating our position on this bill.

Mr. O'TOOLE. You may do whatever you wish. If you wish to be questioned now, I will ask the committee. Mr. Fugate, do you have any questions?

Mr. FUGATE. Are you submitting your statement now, Mr. Prince?

Mr. Prince. No; I ask permission to file a statement stating the views of the railroads with respect to H. R. 8677 by the 10th of July.

Mr. FUGATE. By when?
Mr. PRINCE. By the 10th of July.
Mr. FUGATE. I think that would be a little late.

Mr. PRINCE. I understood from the chairman that, in view of the anticipated recess, if we had the statement in by the 10th of July that would be satisfactory.

Mr. FUGATE. The Committee would like to finish the hearings today, as the chairman has just said. Would it be possible for you to submit your statement at an earlier date?

Mr. PRINCE. Our difficulty, Mr. Fugate, is this, that the railroads, the members of our association who are primarily interested in this, are the transcontinental lines.

Mr. FUGATE. You do not think that you could submit your statement earlier than July 10?

Mr. Prince. What date do you think would suit the convenience of the committee?

Mr. FUGATE. Of course, there is the possibility of a recess, and it is possible that we will not dispose of this bill before then, but we would prefer to have your statement at an earlier date.

Mr. PRINCE. You see, the difficulty is this; we want to get the views of our members on certain of the matters dealt with in this bill. Mr. O'TOOLE. We are not at all certain that there is going to be a

We were under the impression that there was going to be a recess; but, in view of the crisis that has arisen, at this moment we are


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