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Mr. MUNRO. Yes, but the condition is arising at the present time whereby you can offset this migration of workers away from the Canal Zone by a careful study of the situation.

Mr. WEICHEL. Well, the fact of it is that they go down there and they want to stay there, and, in fact, you cannot pull them away. When there is no available housing for them to stay in there, they go to Costa Rica and other places, is not that a fact?

Mr. MUNRO. A small percentage of them do; yes.

Mr. WEICHEL. And so, it cannot be as bad as you say it is if they want to stay down there.

Mr. MUNRO. There is a very small percentage of people who do that, and when they do there are personal reasons which enter into those conditions.

Mr. WEICHEL. That is all.

Mr. O'TOOLE. Mr. Thompson.

Mr. THOMPSON. I have no questions.

Mr. O'TOOLE. Mr. Fugate?

Mr. FUGATE. I have no questions, Mr. Chairman.

Mr. O'TOOLE. Mr. Allen.

Mr. ALLEN. I have no questions, thank you.

Mr. O'TOOLE. Thank you very much, Mr. Munro.


Mr. O'TOOLE. Mr. Paul A. Amundsen, secretary treasurer of the American Association of Port Authorities.

Mr. AMUNDSEN. Yes, sir.

Mr. O'TOOLE. Will you state for the record what organization you represent?

Mr. AMUNDSEN. Mr. Chairman and members of the committee, my rame is Paul A. Amundsen and I am secretary treasurer of the American Association of Port Authorities.

As secretary of the association, I represent here an organization made up of State and municipal governing boards and bodies having jurisdiction over the various ports of the United States. There are more than 50 corporate member ports of the American Association of Port Authorities, including among others such ports as Boston, New York, Philadelphia, Norfolk, Charleston, Savannah, Miami, Mobile, New Orleans, Galveston, Houston, Long Beach, Los Angeles, San Francisco, Oakland, Seattle, Portland, Milwaukee, Toledo, and many more. These are merely cited to indicate the character of our membership.

The American Association of Port Authorities at its last annual convention in October 1949 enacted a resolution bearing on Panama Canal tolls by unanimous vote of its United States corporate members.

I am appearing before you to request that that resolution may be made a part of the record of these hearings, and have also been delegated by the North Atlantic Ports Association, that is a regional port association representing Atlantic coast ports from the port of Norfolk north; South Atlantic and Florida Ports Conference, representing the South Atlantic and Florida ports; the Gulf Ports Association, including public and private terminal operators of the Gulf of Mexico, United States ports; and 47 Pacific coast ports, port associations,

trade associations, commerce, and industry groups and organizations to lodge their official resolutions bearing upon Panama Canal tolls.

It is the consensus of each and every one of these resolutions that commercial shipping should pay only its own way, and that tolls charged to commercial shipping reflect only the true cost of providing such transit through the Canal.

To save the committee's valuable time, I simply wish to file all of these resolutions for the record. They will speak for themselves. However, I would like to call to the attention of the committee briefly the basic economic factors which have united every port and terminal entity in the United States on this particular subject.

Ports and port areas have a tremendous impact on local and national economies. As one example, Houston, Tex., was a relatively small city of 44,000 inhabitants 45 years ago when Congress authorized the construction of a channel from the Gulf to Houston to accommodate water traffic. By 1948 Houston's population had grown to 650,000. In 1930 bank deposits were about $140,000,000. In 1948 they were nearly $900,000,000.

Thirty years ago Los Angeles was a charming winter resort. The city annexed all the lands between itself and the Pacific Ocean and proceeded to develop a port. Today it is a city of 3,000,000 people and one of the primary industrial and commercial centers of the country.

Both the industries and the populations of these port centers depend upon ships and shipping. Industry locates at a port center to take advantage of low-cost deep-water transportation. Population locates there for the job opportunties offered.

Of direct concern to the public, the port of Baltimore in early 1948 released a survey stating that the average cargo ship visiting the port disburses over $57,000 each time she calls. These disbursements are direct, being wages, food, stores, maintenance, fuel, stevedoring, and the like. Earlier this year, the port of Mobile, Ala., revealed that over $23,000,000 was spent in Mobile during 1949 by steamships serving that port, while large sums were also expended by passengers and crewmen in port. Twenty-three million dollars represents a lot of jobs traceable to the ships, aside from the jobs indirectly traceable through the location of industry at the port center.

The port authorities of the Nation, those responsible for port development, are hotly competitive for cargo, but they present a unanimous united front on matters affecting the development of shipping and the resulting benefits of the port area.

The question of commercial shipping paying only its fair share of Panama Canal tolls has been thoroughly analyzed by all of the port and industrial organizations whose resolutions I present, and it is basically regarded in the over-all as a question of whether a certain number of ships stay on or are removed from the high seas, and whether more ships can be added to the United States-flag fleet in domestic waters.

The shipping industry itself has released some very compelling research on this subject, but it is not necessary to take the shipping in dustry's word alone on the importance of Canal tolls as a factor in intercoastal shipping economics.

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.)


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 (b) 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.

Subject: Panama Tolls.


Miami 15, Fla.

To: Members of Congress of the States of North Carolina, South Carolina, Georgia, 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.

GULF PORTS ASSOCIATION, 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 establishment 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

Propeller Club of the United States, port of Portland

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