（\\\\ \\\^（\\ （\S^s（\S^ ¿ &！！！！！！！！!！！ （º º）， ſae ſae* ***** ¿№، ·ae--->¿?? **x=&º.… ~ ~ ~ ~ ~ ~--~ ~--~*** • • •* • • ► ■ * * * · * * ººº - <> • < **<< ∞， ∞， ∞， ∞; ∞，∞， ∞. ' * * * * * · * * * （ <> ）=-- ~ ~ ~ ~ Saesºs • • №ssae saes= <！--∞ √∞∞∞ * - * _*=_º * *•* • ** ** **， g*******¿¿ e ¡sſae º : * • ** ** ** *æ， ， *< *<！«■- º:！= --！ ******** • • •¿•）›› º • • • •=…， ¿ºs， ºs º sºší • • •· ！ • • • • • • • • • • • | - -， -º-º-º…?！！！?！！?！…?.?）（?： * ~ ~ ~ ~ * * * => '*<> * <- ！！ ） ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■*** № < ∞， №-~~<！--∞ • :） --★ → • • • • • •■■■■ …“， „（… （-- - - - . '. ， …• ſºº-, *ae ſae aerº！！！ ！！！ ~~~~ ~~~~ ~~~~ °. -- ~- - - - - . .• **<< •••••••••• <∞ → • ， ！！！！！！！！！！！！！！!！！！ T - （-） ---， -（！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！ ！！！！！！！！！！！！！！！！ （№*****<<==<！-！> ſaeºs，-ſºs， aes！！！ ！！！！！！!！！<！，! º gº （~~~~ ~~~~！！！！！!！！！！!！！！！！！！！！！！！！！！！！！!！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！!！№ №ºrſ_№ ==3== √+ √æ√æ ！=, 3=~~~~）; *（=sae aes，ſae№ №tºj************** <-4 •••••••••=~：：~~=++~~~~，~~~~~！！！！！！！！！！！！！！ №ſſº№：！！！！！！！！Saeſaes：|- ✉--~~~~<！-- *= <== №∞ √≠ √æ√° ***Ķs， «osº №. ！= - ººººº ！saeaeae ！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！--Stae_sraec._ſººs************ PRINT ***áswm），*，*\，-，-，-，-，*** --~~~~ ~~ąrºr « »， «»«. × … • • • ******************* «*********~*=~：：~~=-- ~~~~ ~~~. ：） ~- （~~~~***************~*=~&&*************¿¿.*: «…ººº..ººº…， ¿ ~ ~ ~ ~ ******… • • • • • ►yº?…»rwae！！！--~~~~ … ..-…« *…*.*.* <->~~~~••* • *~~~~ ~~~~） • → …« …***--~~~~*~~~~ ！， mis （= <！-， -， +，-，- of FICE y vERNMENT H y- gE i OCEAN RATES AND TERMINAL CHARGES REPORT ‘. . *.*, W. Jº- \; -- By A. J EMORY RºjoHNSON 0. --- WASHINGTON GOVERNMENT PRINTING OFFICE 1919 f f &º CONTENTS a. - Page Chapter I. Purpose and scope of the report. . . . . . . . . . . . . . . . . . . ... ----------- 5. II. Requisition rates ------------------------------------ ... • * * * * * - - - - - 8. III. Ocean charter and freight rates..... . . . . . . . . . . . - - - - - - - - - - - - - - - - - - 1]. --> IV. Terminal services and charges.................................. 23, W. Costs and rates. . . . . . . - - - - - - - - - - - - - - - - - - - - - - - - - - - - ------------- 27. VI. Rate making and rate control by the Shipping Board . . . . . . . . . . . . 32. VII. Rate regulation by the Shipping Board . . . . . . . . . . . . . . . . . . . . . . . . . 35. VIII. Organization for regulation of ocean rates and terminal charges. . . . 40 TX. Summary and recommendations-------------------------------. 46 Appendix I. Memorandum on requisition rates, recommending a new scale. II. Memorandum on return on investment (interest, depreciation, amortiza- - tion) to be earned on Shipping Board ships. III. Sample cards from the file of charter rates. Sample sheets from the summaries of trip charter and time charter rates. IV. Report on investigation of freight rates at Atlantic and Gulf ports. W. Report on investigation of freight rates at Pacific ports. VI. Notes upon making ocean rates based on costs. 3. CHAPTER I. - PURPOSE AND SCOPE OF THE REPORT. At the end of May, 1918, the United States Shipping Board re- quested the Director of the Division of Planning and Statistics to have an investigation made of the subject of ocean rates. This is a report of that investigation. The compilation of freight rates was at once undertaken in order both to learn what rates on the exports and imports of the United States had been, and had not been, fixed by the Shipping Board or by the Governments of Great Britain and France with the formal or tacit approval of the United States, and also to discover what Ocean rates, in the absence of Government control, were being charged by the carriers engaged in the trade of the United States with different parts of the world. It was also thought that actual rates should be ascertained as a preliminary to such subsequent control or regulation of rates as the Shipping Board might decide to exercise. The freight rates which ocean carriers were asked to report were those that had been charged during the year ending June 30, 1918, the year preced- ing the date of the inquiry. - f The investigation as first planned was to include an analysis of the costs of the freight services performed by vessels owned and operated by the Shipping Board and by vessels requisitioned by the board and operated by its agents. The costs were to include those incident to investment and to operation and were to be analyzed for Voyages and for periods of time. . When the investigation was started, it was supposed that the desired cost data could readily be secured from the accounts of the comptroller of the Shipping Board; but during the latter half of 1918 the comptroller was reorganizing the accounts of the board, and it was not until January, 1919, that his records and tabulating facilities were such as to make possible the analyses from which the costs of freight services could be calculated. These cost analyses thus be- came possible two months after the signing of the armistice, and at a time when data as to the cost of operating vessels during the period of the war were no longer of much significance. Analyses of the costs of service will, however, be of assistance in the future in the making and regulation of ocean rates. This report discusses the place which shall be given cost in the deter- mination of rates but, for obvious reasons, does not attempt to show what rates for the main ocean trades would have corresponded to the costs of service at the close of 1918. - . 5 6 OCEAN RATES AND TERMINAL CHARGES. After the investigation was started, two additions were made to the work. In July, the Law Division was requested by the Shipping Board to inquire into and to report upon the schedule of rates paid for requisitioned vessels. The Law Division asked the Rate Investigation to secure information regarding the cost to the owners of vessels requisitioned and the expenses incurred by companies that Operated such vessels for the Shipping Board under time form charter. The information having been obtained, a “Memorandum on requisi- tion rates recommending a new schedule” was prepared. In accord- ance with the wishes of the Law Division, this memorandum was, on the 8th of November, 1918, submitted to the Director of the Division of Planning and Statistics, who transmitted the memorandum to the board with his approval. The memorandum forms Appendix I of this report. The other addition to the investigation was occasioned by the enactment of the law of July 16, 1918, section 12 of which empow- ered the President to prescribe the order of priority of the use of the various port and terminal facilities and services, and to “deter- mine, prescribe, and enforce the rates, terms, and conditions charged or required for the furnishing of such services.” By Executive order, issued December 3, 1918, the President authorized the Shipping Board to exercise the power conferred on him by section 12 of this act, stipulating, however, that the power thus delegated should “not extend to any dry docks, wharves, lighterage systems, or loading or discharging terminal facilities or warehouses, equipment, or terminal railways which are now or may hereafter be placed under the juris- diction or control of the Secretary of War, or Secretary of the Navy, or the Director General of Railroads.” r It was decided that an investigation should be made of ocean terminal services and charges to secure information needed for the enforcement, not only of the section of the law just quoted but also of the shipping act of September, 1916, which gives the Ship- ping Board authority over the regulations and practices of individ- uals or companies “carrying on the business of forwarding of fur- nishing wharfage, dock, warehouse, or other terminal facilities in connection with a common carrier by water.” The addition to this study appreciably increased the work to be done. The investigation of terminal charges has been made by Dr. C. O. Ruggles, who has prepared a comprehensive and valuable report. It was understood that the general purpose of the board in pro- viding for the investigation of rates was to secure the facts to be considered in determining a policy of rate control for the period of the war, and of rate regulation after the war. The period of active warfare having come to an end while this investigation was in progress, the data secured have significance with regard to future OCEAN RATES AND TERMINAL CHARGES. 7 rate regulation rather than with reference to the making of rates incident to the war-time control of shipping. The Shipping Board met the problems of rate making and rate control during the period of the war, in accordance with each situation as it developed. The time has now come for the formation of the definite policy of future rate regulation in so far as such regulation is imposed upon the board by the shipping act of September 7, 1916. This report sug- gests a policy of rate regulation, and recommends an organization for giving effect to that policy. CHAPTER II. REQUISITION RATES. The rates which the Shipping Board has paid for vessels requisi- tioned were announced by the board September 27, 1917, the rates to be effective October 15, 1917. The scale adopted was as follows: REQUISITION RATES. (These rates apply to full power driven vessels operating under the requisition. charter.) - I. CARGO SHIPS AND TANKERs. 1. Ships operating under “Time form.” Tons dead-weight capacity: Fº Over 10,000----------------------------------------------------------- $5.75 8,001-10,000----------------------------------------------------------- 6.00 6,001-8,000----------------------------------------, - - - - - - - - - - - - - - - - - - - - 6.25 4,001-6,000------------------------------------------------------------ 6. 50. 3,001–4,000... . . . . . . . . . . . . . . . . . . . ., - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 6.75 2,500–3,000------------------------------------------------------------ 7.00: Wessels of speed in excess of 11 knots to be allowed 50 cents per ton dead weight per month for each knot or part of a knot over 11 knots. 2. Ships operating under “Bare boat form.” Per dead-weight ton per month. Up to and including 11 knots----------------------------------------------- $4.15. For each knot or part of knot over 11 knots. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50. II. PASSENGER Ships. 1. Ships operating on “Time form.” Class A.—Ships with permanent accommodations for more than 150 |Per ton gross passengers: register per month. Over 10 and not exceeding 11 knots. --------. . . . . . . . . . . . . . . . . . . . . . . . . . . . $9.00 Over 11 and not exceeding 12 knots. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9. 50 Over 12 and not exceeding 13 knots. . . . . . . . . . . . . . . - - - - - - - - - - - - - - - - - - - - - - 10.00 Over 13 and not exceeding 14 knots. . . . . . . . . . . . - - - - - - - - - - - - - - - - - - - - - - - - - 10. 50 Over 14 and not exceeding 15 knots. ---------. . . . . . . . . . . . . . . . . . . . . . . . . . . 11. 00 Over 15 knots------. . . . . . . . . . . . . . . . . - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 11. 50 Class B: Ships with permanent accommodations for from 75 to 150 Per ton groSS Sengers: register per month. Over 10 and not exceeding Il knots. . . . . . . . . . . . . . . . . . . . ----------------- $8.00 Over 11 and not exceeding 12 knots. . . . . . . . . . . . . . . ---------------------- 8. 50 Over 12 and not exceeding 13 knots. . . . . . . . . . . . . . ----------------------- 9. 00 Over 13 and not exceeding 14 knots... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9. 50 Over 14 and not exceeding 15 knots... . . . . . . . . . . . . . . -------------------- 10.00 Over 15 knots. . . . . '• * * * * * * * * * * * - - - - - - - - - - - - - - - - * * * * * * * * * * * * * * * * * * * * * * * * 10, 50 8 OCEAN RATES AND TERMINAL CHARGES. 9. * e & 4 -- - 7 j P * t * 2. ship. operating under “bareboat form. regiº, #ºnth Up to and including 11 knots. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - - - - - - - - - - - - - - - - $5. 75. For each knot or part of knot over 11 knots. . . . . . . . . . . . . . . - - - - - - - - - - - - - - - - - - - . 50. The above rates will govern.— 1. All vessels requisitioned under the general order of October 12, 1917. 2. All vessels individually requisitioned by the Shipping Board before October 12, 1917. The rates are subject to revision by the Shipping Board at intervals of 90 days. (commencing Oct. 15, 1917). Action looking toward a change in the foregoing rates was taken in the spring of 1918 when the board announced a reduction, effective June 1, of 50 cents per dead-weight ton per month in the bareboat. rate. Objection having been raised to this reduction, the board post- poned the change, and the Law Division was requested to make an investigation of, and submit a report upon, requisition rates. The Law Division asked the Rate Investigation to secure the information needed to pass upon the reasonableness of the scale of requisition rates in force. In response to that request, the subject was studied by the Rate Investigation, with the assistance of the contract depart- ment of the Division of Operations; and on the 8th of November, with the approval of the Law Division, there was submitted to the Director of the Division of Planning and Statistics, for transmission to the board, a memorandum containing the following schedule of requisition rates, which were recommended for adoption by the board. NEW SCALE OF REQUISITION RATES. TIME FORM OF REQUISITION CHARTER. Steel cargo vessels and tankcrs. Per dead-weight ton per month. Over 10,000 tons dead-weight, time form of requisition charter . . . . . . . . . . . . . . . $5.25 8,001–10,000 tons dead-weight, time form of requisition charter. . . . . . . . . . . . . . . 5. 50. 6,001–8,000 tons dead-weight, time form of requisition charter. . . . . . . . . . . . . . . . 5. 75 4,001–6,000 tons dead-weight, time form of requisition charter. . . . . . . . . . . . . . . . 6. 00. 3,001–4,000 tons dead-weight, time form of requisition charter. . . . . . . . . . . . . . . . 6. 25. 2,501–3,000 tons dead-weight, time form of requisition charter. . . . . . . . . . . . . . . . 6. 50 2,500 and under----------------------------------------------------------- 6. 75 Jin addition to the above rates, the owner will be reimbursed for all proper war bonuses paid to officers and crews and for all proper increases in wages over the standard wage Scale established by the United States Shipping Board as of May 4, 1918. Wessels of speed in excess of 11 knots will be allowed 15 cents per dead-weight ton per month for each knot or part of a knot over 11 knots. Passenger steamers. There will be only one class of passenger steamers, instead of two, as heretofore. Steamers with a capacity of over 75 passengers will be regarded as passenger vessels. If a passenger vessel would receive a greater hire at the rate for steel cargo vessels and tankers, her hire will be paid at that rate. Time form of requisition charter, $8 per ton gross register per month. 10 OCEAN RATES AND TERMINAL CHARGES. In addition to the above rate, the owner will be reimbursed for all proper war bonuses paid to officers and crews and for all proper increases in wages over the standard wage scale established by the United States Shipping Board as of May 4, 1918. Wessels of speed in excess of 11 knots will be allowed 15 cents per ton gross register per month for each knot or part of a knot over 11 knots. This allowance will not stop at 15 knots, as heretofore. BAREBOAT ForM OF REQUISITION CHARTER. Steel cargo vessels and tankers. Per dead-weight ton per month. Up to and including 11 knots----------------------------------------------- $3.35 Tor each knot or part of a knot over 11 knots.------------ - - - - - - - - - - - - - - - - - - - - . 15 Passenger steamers. Per ton gross register per month. Up to and including 11 knots----------------------------------------------- $4.35 For each knot or part of knot over 11 knots....... . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 The memorandum recommending the foregoing revised schedule of rates was submitted within a few days of the signing of the armistice, and the matter of requisition rates ceased to be of pressing importance. For that reason, doubtless, no change has been made in the original scale of compensation for requisitioned vessels. The facts considered in arriving at the rates contained in the pro- posed scale may have more than an historical value for those who may be questioned as to the equity of the requisition rates that have been paid by the Shipping Board or as to the liberality of the charter rates which the board has paid the owners of neutral vessels chartered to the United States Navy during the war. The memorandum of November 8, 1918, containing the proposed scale of requisition rates and the reasons for the rates recommended, is made Appendix I of this report. To that memorandum is added a summary of the rates paid by the British Government for the vessels which it requisitioned. CHAPTER III. OCEAN CHARTER AND FREIGHT RATES. In controlling or regulating ocean charter and freight rates, action in a particular instance or in determining a general policy ought presumably to be taken with a knowledge both of the rates in force at the time the action was taken and of the charges that had pre- vailed for an antecedent period of reasonable length. The Govern- ment authority that changes rates should know what it is changing. Such information can be readily commanded only when a rate or tariff file can be consulted. Comparatively few ocean carriers engaged in international trade print their tariffs. The regular lines operating between the United States and the West Indies and Mexico publish their rates, and there are printed tariffs applying to the west coast of South America. A few trans-Pacific rates are also published. American lines oper- ating coastwise and to Alaska have printed tariffs, but, for most of the foreign trade of the United States, ocean carriers—even those having regular line services—operate without printed tariffs. No tariffs of charter rates are published, charter rates always being matters of individual bargaining. Carriers operating line vessels feel free to vary their rates at will, either by individual action or in conference with rivals, and to make such contracts with shippers as may seem best in view of the momentary conditions of competition or of the conference agreements which they may have promised to observe. A file of ocean tariffs, such as can be made of railroad tariffs, being impossible, the only means of ascertaining what ocean rates are now in force or have been charged is to secure special reports from the carriers and to compile or catalogue the rates reported. To keep such a compilation up to date is somewhat expensive, but a com- pilation of ocean rates would seem to have the same relation to the regulation of such charges as a file of railroad tariffs has to the regu- lation of railroad charges. If the Government is to regulate the rates of carriers by water, as provided for by the shipping act of 1916, or as may possibly be required by future legislation, a compilation or file of the rates subject to regulation, or even subject to scrutiny or supervision, seems necessary. - - In the prosecution of this investigation, three rate compilations have been made, (1) the rates that were fixed by authority of the Shipping Board and those that have been fixed by the British and French Governments, (2) representative charter rates for 1914, 1915, 11 12 OCEAN RATES AND TERMINAL CHARGES. 1916, 1917, and 1918, (3) freight rates for the year July 1, 1917, to June 30, 1918, on “general cargo” and leading commodities at the Atlantic and Gulf ports of the United States, and freight rates for the same period on all commodities at American Pacific ports. The cataloguing of rates fixed by the Shipping Board and the British and French Governments was easily done. While useful for reference, this file did not contribute materially to the information in the possession of those branches of the board that are concerned with making rates. The catalogues of charter and freight rates, compiled from data in the reports received from carriers, contain a record that is both of present assistance and of probable future value. Charter rates to and from the ports of the Atlantic and Gulf seaboards of the United States were compiled for a period beginning with 1914 and ending with August 31, 1918. For the purpose of the present investigation, it was not deemed necessary to compile charter rates at the Pacific ports of the United States. The aim was to compile a sufficient number of rates for each year to show the general level and the range of rates before and during the European war. The card file to the end of August, 1918, contains 695 time charter rates and 1,461 trip charter rates—2,156 in all. To these were subsequently added representative rates for the last four months of 1918, in order that the catalogue might show the trend of rates past the period of actual war. This compilation was made from information obtained from Bennet Hvoslef & Co., 18 Broadway, New York City. They kindly loaned their records from January 1, 1914, to August 31, 1918. The data thus secured was supplemented by information procured by personal interviews with the company’s Officials, and transcribed upon cards. A card index was compiled, containing for each charter a card stating the “trade,” delivery, commodity, date charter closed, trip or period, rate per unit, name of ship, flag, net registered tonnage, motive power of vessel, and name of charterer. Lloyd's Register of Shipping was used when necessary to supplement the data regarding the vessels listed in the company’s record of charters fixed. To show the general average of charter rates between the same ports, and for each year of the period, summaries were prepared on appropriately designed forms, there being one set of forms for time charters and another set for trip charters. The summaries also group. the rates by trades, the rates being recorded from the North and South Atlantic ports of the United States to Europe, Africa, Asia, Australia, South America, the West Indies, and Canada, and to the 1 In the card indices, both of charter rates and of freight rates, export and import rates have been filed separately, and the classification of rates for each year is as follows: I. Ports of United States, alphabetically arranged. A. Continents, alphabetically arranged. 1. Foreign ports, alphabetically arranged. (a) Commodities, alphabetically arranged. OCEAN RATES AND TERMINAT, CIHARGES. 13 appropriate subdivisions of these sections of the world. Charter rates for some commodities moved coastwise between the two sea- boards of the United States were also compiled and summarized. A study of these averages indicates the extent to which charter rates increased from the beginning of 1914 to the latter part of 1918. These averages probably afford the best possible index obtainable of the effect of war conditions and scarcity of tonnage upon ocean rates. - Appendix ITT reproduces sample cards from the index file of charter rates, also sample sheets from the summary of charter rates by years and trades. - - The increases in charter rates from the beginning of 1914 to the end of 1918 are illustrated by the following brief table, stating rates upon a few of the more important commodities. The rates in each case are not the actual rates, but the averages for the year. Table showing advances in charter rates on typical commodities. (The rates stated are averages for the year.) STEAM. Commodity. Trade. 1914 1915 1916 1917 1918 nited States—River Plate. - - - - - - - $3.78 $7.91 || $17.93 $18.60 $19.50 Coal, perton.---------------- {#####:#;: *; º;| *; ::::::::::::::: & nited States—French Atlantic- - - - . 73 e * **** | * * * * * = * * | * * * * * * * . Grain, per quarter----....... §§ºn: tº #. #| ##|...","..]-sº nited States—Frenc tlantic.... * ſº 3.66 |........ 8. 06 Cotton, per 100 pounds. . . . . . #####!ºingdom: ;| ##| ##| #; º; inite ates—Australia........... & * & 1. 50 11.35 Petroleum, per case. . . . . . . . . {{#: §::::::::A * * * * * * = & e ºs º ºs *...*.*, *śl, ſºlº nited States—Sou merica.------------|-------- ſº 1 40.00 35.00 General Cargo, per ton-...... United States-Europe............. 7. 20 | 16.80 | 40.20 - - - - - - - - 66.67 * South America–United States..... 5. 21 | 11.93 || 25.10 29. 52 30.44 Nitrate, perton-...-----.... South America-United Kingdom |....... 18.30 --------|--------|------- C §§*k, d 30 59 }UIO8–Unite Ingdom - - - - - - - - - - - º g * * * * * * * * * | * * * * * * * * | * e ºs e as a sº Sugar, per 100 pounds....... Cuba–United States--------.......l....... .21 | .44 .43 |....... Ore, per ton British India-United States....... 4.92 12.60 || 31.20 |........ 40.00 • per UOIl-- - - - - - - - - - - - - - - - Spain-United States. ------------- 2.08 || 3.29 || 4.20 | 5. 76 |....... Coffee, per bag.............. South America—United States..... • 25 |-------- 1.00 1. 67 1, 70 Mahogany, per M feet....... Africa-United States.-------------|-------|-------. 122.00 | 128.00 | 40.00 1 Sail. The index file and the summary sheets of charter rates also show in a striking way the great fluctuations in rates during the period of the war. These fluctuations imposed a great handicap upon business and placed heavy burdens upon the buyers and users of commodities. The policy of Government control of rates that was adopted is fully justified by the facts shown in this record of charter rates. Indeed, the showing would indicate that the Government might properly have gone further than it went in the standardization or stabilization of ocean rates. Freight rates are often charter rates. The owner or time charterer of a vessel that transports a full cargo usually charges the shipper a rate based on the cargo. The shipper has the service of a vessel, for which service he pays a freight rate which is the charter rate. The 14 OCEAN RATES AND TERMINAL CHARGES. basis of time charter rates, on the contrary, is the tonnage of the vessel—usually the dead-weight tonnage or carrying capacity, in the case of a freight vessel, and the gross register tonnage if the vessel is a passenger ship. There are also lump-sum charters, the payment being a fixed sum per month or for a voyage. Line vessels, whether freighters or combination freight and passenger ships, charge commodity or “general merchandise” or “general cargo.” freight rates, which are usually based upon a unit of weight or space, i. e., a ton, a hundred pounds, a cubic foot, or the “measurement ton,” which is most often 40 cubic feet. The freight charge may also be per customary package or unit, as per case, barrel, or sack, in which case, however, the rate is indirectly determined by the weight of or space occupied by the commodity unit. For many articles, possibly for the majority, rates are quoted weight or measurement (W/M), ship's option, the carrier reserving the right to levy his charges upon the basis or unit that will produce the larger revenue. The compilations of ocean-freight rates that have been made necessarily include both rates paid for bulk cargoes (which are, in effect, trip-charter rates) and rates applying on the far larger number of commodities that are not ordinarily shipped as full- vessel cargoes. A compilation of ocean rates must also necessarily include both charter rates (payments for the use or service of an entire vessel) and freight rates generally. As explained above, representative charter rates at the Atlantic and Gulf ports have been compiled and summarized. Another and much larger file has been made of freight rates in general. g - This investigation of freight rates having been started in June, 1918, it was decided to compile freight rates for the 12 months ending June 30, 1918. The compilation, indexing, and summarizing of ocean rates at Atlantic and Gulf ports was under the direction of Asst. Prof. T. W. Van Metre, and the work was done at New York. The expert advice of Mr. Harry Fowler, a man experienced in the business of freight brokerage and freight forwarding, was of great assistance. It was considered impracticable, and for the purposes of the investigation unnecessary, to compile ocean rates upon every one of the many commodities comprised in the export and import trade of the United States at Atlantic and Gulf ports. To bring the inquiry within reasonable limits and at the same time to secure information that would be representative of all ocean- freight traffic at Atlantic and Gulf ports, rates were obtained upon “general cargo,” 29 important special commodities, and 7 other commodities ordinarily handled as “complete or bulk cargo.” The ocean carriers at New York and some of the principal carriers at other Atlantic ports and at Gulf ports were requested to report the high, low, and monthly average rate upon each of the designated OCEAN RATES AND TERMINAL CHARGES. 15, commodities for each quarter of the year ending June 30, 1918. The rates were reported, upon appropriate forms, and from the reports received from the companies a card file or index of the rates was made. rates on imports. This index includes 4,916 rates on exports and 974 The manner in which the investigation was car- ried out is described in a report submitted by Dr. Van Metre under date of December 16, 1918. This statement is reproduced as Appendix IV to this report. As is stated in Dr. Van Metre's report, there was “wide fluctuation of commercial freight rates during the year ending June 30, 1918, with the trend of change steadily upward.” rates upon a limited number of important exports indicates the fluctuations and particularly the large increase in rates during the latter part of the 12 months' period: The following table of Average ocean-freight rates on selected commodities exported from New York, New Orleans, and Savannah to designated foreign ports. QUARTERLY-JULY 1, 1917, To JUNE 30, 1918. GENERAL CAR.G.O. July-Sep- October– January– April– TJ nit. tember, December, March, June, 1917. 1918. 1918. FROM NEW YORK TO- Africa - - - - - - - - - - - - - - - - - - - - - - - W/M. . . . . . . . $60.60 ------------|------------|-----------. Algoa Bay, Afric §* as a se e s sº * : * * * * * * * * * * * * $4.25 ------------|------------. Ath Greece - - - - - - - - - - - - - - - - - - - - - - - - - -li WY/M1- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - $250.00. thens, Gr º:- £5°l iº "sºlº B lona, Spain. ... - - - - - - - - - - - - - - - - - - - -] W IM1- - - - - - - - & . 00 $55.00 72.50 arCelona, Sp Cu. ft. ------ 1.31 1.02 ... 7 . 81 Buenos Aires, South America.----------- W/M. . . . . . . . 70.00 40.67 32.50 35.00s WiMtº sº as º ºs & sº sº ; ; ; % 32. 28 36.25 Capetown, Africa... -- - - - - - - - - - - - - - - - - - - - -] W.J.M.-- - - - - - - ge & Wºº º ºs º e º s = s. m. s. sº s 60.00. Čačić, Špain......................------- W/M. . . . . . . . 49:00 ------------|------------|------------. tº º º – Cu. ft. ------ 1.69 1. 75 1. 75 1. 75 Christiania, Norway - - - - - - - - - - - - - - - - - - - - - 100 lbs. . . . . . 3. 50 3. 50 3. 50 3. 50 Freemantle, Australia. - - - - - - - - - - - - - - - - - - W/M... . . . . . . 52.50 60.00 60.00 60.00 - Cu. ft. ------ 3. 27 3.67 3.97 4.69 Genoa, Italy. ----> -- - - - - - - - - - - - - - - - - - - - - 100 lbs.... -- 6.69 7. 13 8. 16 9.82 W/M-- - - - - - - 11.25 11. 25 11.25 11.25 Habana, Cuba.-------------------------- Cu. ft. ------ . 375 . 375 . 375 . 375; 100 lbs. . . . . . 7 . 75 7 . 75 . 75 . 75 Havre, France--------------------------- (Wººl...º.º.º.º. ºf ...º- Hongkong, China------------------------|Wº: 1.% ºš ºš ºš Lisbon, Portugal.------------------------ {. ft. III. 3.75 3.75 3.75 4.öö - - ----do ------ 1. 74 1.97 2. 75 3. 50 Liverpool, England... -------------------- 100 lbs - - - - - - 3428 3.49 5. 69 7. 56*** - - . . W/M. . . . . . . . 1 14, 28 1 14, 28 1 19: 64- 1 19.64 ---- Manila, P. I.----------------------------- W/M........ 37, 17 37.50 40.00 45.00 Singapore, Straits Settlements. . . . . . . . . . . W/M. . . . . . . . 43.33 40.00 45.00 48.33 - Vladivostok, Siberia.--------------------. W/M.-- - - - - - 47. 50 47.50 ------------|------------. Yokohama, Japan. ----------------------| W/M-------- 37. 50 32.50 32, 50 43. 13 FROM NEW ORLEANS TO- Habana, Cuba........................... W----------- 26. 87 26. 87 26. 87 26, 87. Havre, France--------------------------- W/M--------|------------|------------------------ 38.00-~~~~ Liverpool, England.----. . . . . . . . . . . . . . . . . W/M. - - - - - - - 9. 60 9. 60 19.80 19.80, Valparaiso, Chile. ----------------------- W/M. - - - - - - - 25. 03 25.03, 25.03, 25.03. FROM SAVANNAH To— Senoa, Italy.---------------------------- 100 lbs. . . . . . 8, 38 8.75 ------------ 6. 68 Liverpool, England.--------------4------|----. do.. 3.23 3.23 3.47 3.22 1 British Ministry rates. 16 OCEAN RATES AND TERMINAL CHARGES. Average ocean-freight rates on selected commodities exported from New York, New Orleans, - and Savannah to designated foreign ports—Continued. QUARTERLY-JULY 1, 1917, To JUNE 30, 1918. 1 British Ministry rates. COTTON. July–Sep- || October– January– April— Unit. tember, December, March, June, 1918. 1918. FROM NEW YORK TO— Batavia, Dutch East Indies - - - - - - - - - - - - - W/M. . . . . . . . $38.00 ------------|------------|----------- I3uenos Aires, South America.... . . . . = − = • WW s, e = * * * * * * * * | * * * * * * * * * * * = | * : * * * * * * * = - - - $30.00"|------------ *Christiania, Norway..................... 100 lbs. - - - - - 6. 00 $6.00 6.00 $6.00 Genoa, Italy.----------------------------|----- do------- 8.00 8.46 7, 88 10.33 Havre, France---------------------------|-----do------- 5. 55 4.00 5.00 7.38 Lisbon, Portugal.-----------------------|----- § * = * * * * % ; º ; § º # § * ----ClO------- & $ º Liverpool, England.--------------------- {W.” tº º ºs = 1 9, 52 1 9.52 1 19, 64 1 19.64 Marseille, France. . . . . . ** = * * * * * * * * * * * * * * * = 100 lbs. . . . . . 10.00 ------------|------------|------------ FROM NEW ORLEANS TO- Barcelona, Spain------------------------|----- do------- 3.93 5. 55 ------------ 6. 00 Christiania, Norway---------------------|----- do------- 5.00 ------------|----------§ - - - - - - - - - - - - - - 'Genoa, Italy-----------------------------|----- do-------------------|------------|------------ 15.00 Havre, France---------------------------|----- do------ 6.50 ------------ 6. 00 6. 00 Liverpool, England----------------------|----- do------- 5.46 6, 10 6, 25 6.25 FROM SAVANNAH TO- - Barcelona, Spain------------------------|--- --do........----------- 4.25 ------------|------------ Genoa, Italy-----------------------------|----- do-------|------------ 8. 57 8.95 ------------ Liverpool, England ---------------------|----. do------- 5.25 ------------|------------|------------ *- FLOUIR. FROM NEW YORK TO— Athens, Greece-------------------------- Cu. ft.------|------------ $4.00 ------------|------------ Batavia, Dutch East Indies. - - - - - - - - - - - - W/M-- - - - - - - $38.00 ------------|------------|------------ Christiania, Norway. . . . . . . . . . . . . . . . . . . . . 100 lbs. . . . . . 2. 79 3.00 $3.00 $2.55 Genoa, Italy-----------------------------|----- do------- 6. 34 6. 00 6.25 7.00 Habana, Cuba--------------------------- W----------- 8.75 8.75 8.75 8. 75 Lagos, West Africa.-----...--------------- W/M. . . . . . . . 20.40 20.40 27.00 27.00 Liverpool, England.--------------------- W..... 11. 32 11. 32 21.42 21.42 Rio Janeiro, South America....... - - - - - - Cu. ft. ------ 1.08 ------------|------------|------------ Valparaíso, South America.............:{w....... ſºft| 1:#| |}}| 1: FROM NEW ORLEANS TO- Genoa, Italy----------------------------- W-----------|------------|------------ 150.00 ------------ Habana, Cuba--------------------------- W----------- 9.25 9. 50 9. 50 9. 50 Havre, France--------------------------- 100 lbs - - - - - - 2. 50 41.00 ------------|------------ ‘Liverpool, England.----------- - - - - - - - - - - Long ton-...- 13. 20 13. 20 24.00 24.00 Valparaíso, Sonth America- - - - - - - - - - - - - -] W........... 16.88 16, 88 j6. 88 16.88 FROM SAVANNAEI TO- Habana, Cuba--------------------------- 100 lbs------|------------|------------------------ . 60 Liverpool, England.--------------------- W-----------|------------|------------ 21.60 21.60 I,UB]RICATING OTL. FROM NEW YORK TO- Algoa Bay, Africa.------------------ , ſº tº gº tº gº WIM--------|------------ $30.00 ------------|------------ Athens, Greece-------------------------- (j. :::::::::::....... **]:::::::::::-----. $6.25 Auckland, New Zealand. . . . . . . . . . . . . . sº sº º |M.------- $20.00 ------------|------------|------------ fatavia, futch East indies sº e º sº * * * * * * * * * W/M........ 38.00 ------------|------------|------------ . - Cu. ft.------- 1.25 .87% $0.75 ... 81 Buenos Aires, South America...... .*s as sº º sº tº W/M........ 80.00 40.00 30.00 37.50 W-----------|------------ 42.50 ------------ 32.50 OCEAN RATES AND TERMINAL CHARGES. 17 Average ocean-freight rates on selected commodities exported from New York, New Orleans, - and Savannah to designated foreign ports—Continued. QUARTERLY-JULY 1, 1917, To JUNE 30, 1918. LUBRICATING OIL–Continued. July–Sep- || October– January– April– Unit. tember, December, March, June, . 1917. 1917. 1918. 1918. FROM NEW YORK TO- Capetown, Africa.----------------------- W/M.-------|------------|------------|------------ $50.00 Cadiz, Spain----------------------------- bbl.--------- $15.00 ------------|------------|------------ Čhristiafia, Norway--------------------- 100 lbs...... 4. 19 $4.25 $4.25 3. 78 Genoa, Italy-----------------------------|----- do------- 1. § 1. § 1. § 1. § Habana, Cuba.-------------------------- ióðibs...... .50 .50 .50 .56 Hongkong, China------------------------ |M.------- 30.00 30.00 32.50 ------------ Lagos, West Africa.--------------------- W/M........ 21. 40 21. 40 27.00 34.75 - - 100 lbs...... 4.38 5.00 5.22% ------------ Lisbon, Portugal.----------------------- bl.--------- 25.00 ------------ 36.00 36.00 §:...]” 2.33 |II.I.I.I.I.I 5.7; l......” e S- - - - - - 4-fº ºver I is is is sº se * - - - - - - e tº ºf f * * * * * * * * * * * * Liverpool, England.--------------------- {} s sº ºn º ºs ºn tº sº * * * 119.04 19.04 28. 56 28. 56 Manila, P. T.---------------------------- º * * * * * * * * ; º s º gº tº º sº a de tº º sº tº 35.00 ------------ Marseille, France------------------------ ióðibs............ ::...]------ 7.35 | ***** 7.75"| " " ' 3.06 Singapore, Straits Settlements........... Wºas sº * * * * * * 30. ; 30. § 30. § e tº s º ºs º ºs º is 65 & e Cll. ge e g º ºs e º s e e e tº Valparaiso, South America.------------- &|M.------- 18, 75 18, 75 18. 75 18.75 Yokohama, Japan.---------------------- |M.------- 30.00 30, 00 30.00 ------------ FROM New Orleans to— Habana, Cuba.;;------------------------ W----------- 10. 00 10. 00 10, 00 10.00 Valparaiso, South America. - - - - - - - - - - - - - W/M........ 18. 75 18. 75 18.75 18.75 MACEITNERY. º FROM NEW YORK TO- - Algoa Bay, Africa.----------------------- Y} º, e s sº s = e s e = * $43.75 $60.00 |-----------. … Barcelona, Spain. -----------------------|{T. W.III. "45.35 II.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I. Batavia, Dutch East Indies... ---------- ſºge is e º s = º º s: % ge º ºs º gº º 1.3i "|’’ ‘’’ $0.75 | $6.84 - g & Cll...TU- - - - - - - - • {} & e e Buenos Aires, South America is e º sº ºn tº sº º is º º sº WJM sº e s as s º a sm 70. 00 - 42. 50 35. 00 37. 50 Cape Town, Africa.------------- e = sº º tº gº tº º º \; se is a e º is e i s = *** * 3.38 * * * : * * * * *ge & 3.56 & sº sº e ºs º ºs’ gº 3.50 % § - tº . . . . . e. * S- - - - - - º e * º Christiania, Norway.--------------------|{.{{...... 1.69 1.75 1. 75 1.58 - cu. ft.------- 3.34 3.53 3.95 4. 72 Genoa, Italy----------------------------- 100 lbs...... 7.06 7. 18 8.33 9.85 . ||W/M. . . . . . . 132. 50 127.50 ------------|------------ W/M........ 12.50 12, 50 12, 50 12, 50 Habana, Cuba.-------------------------- 100 lbs...... .625 ------------|------------|------------ - { cu. ft.------- . 3125 ------------|------------|------------ Havre, France--------------------------- W/M-------. 79.00 94.78 93.75 56.25 Lagos, West Africa.--------------------- W/M........ 17.00 17.00 27.00 27.00 . W/M........ 29, 64 29. 64 24. 40 24. 40 Liverpool, England.--------------------- cu. ft.------- 1. 69 1.92 2. 72 3, 19 100 lbs...... 3.25 3. 50 5. 50 7.25 Manila, P. I as ºs e º ºs ºs ºs s is as wº º sº sº tº se tº sº e º e º 'º we s as s as * Yºſ g = * * * * * * * * * * ig3.56 tº gº ºr sº º º ºs 202.75 40. 00 * * * * * * is s º ºs e ºs * * Orl- - - - - - - - - e tº ºf H sº * * * * * * * * * * * | * * * * * * * * * * * * Marseille, France............-----------. (. ft--------|------------|------------ 3.75 ------------ Piraeus, Greece--------------------------| W----- * * * * = • I - - - - - - - - - - - - I - - - - - - - - - - - - - - - - - - - - - - - - 250.00 100 lbs...... 1. 275 1, 275 1, 275 1. 275 Valparaiso, South America.............. cu. ft.------- ... 79 . 70 . 71 . 71 - * W/M........ 26. 25 26.25 26, 25 26, 25 Vladivostok, Siberia..................... WIM........ 50.00 ------------|------------|------------ FROM NEw orLEANS To- Buenos Aires, South America............ W/M........ 60.00 ------------------------|------------ Habana, Cuba--------------------------- W/M. . . . . . . . 12.50 12, 50 12, 50 12, 50 Liverpool, England.--------------------- Long ton... 9. 60 9, 60 19, 80 19.80 Valparaiso, South America.............. W/M........ 26.25 ------------|------------|---------- -- 1 British Ministry cargo. 118231–19—2 18 OCEAN RATES AND TERMINAL CHARGES. Average oceanfreight rates on selected commodities exported from New York, New Orleans, and Savannah to designated foreign ports—Continued. QUARTERLY-JULY 1, 1917, To JUNE 30, 1918. STEEL PLATES. July–Sep- || October– January– April– |Unit. tember, December, March, June, 1917. 1917. 1918. 1918. FROM NEW YORK TO- Athens, Greece----------------------- ---| W.----------|------------ $180.00 $200.00 - - - - - - - - - - - - Batavia, Dutch East Indies... -- - - - - - - - - W/M........ $35.00 ------------|----------- - I - - - - - - - - - - - - Bombay, India-------------------------- W----------- 40.00 50, 00 50.00 $50.00 Buenos Aires, South America............ Wii: #}| ##|...*.*.*.* Capetown, Africa------------------------ |M.-------|------------|--------- - - - I - - - - - - - - - - - - 60.00 Christiania, Norway.-------------------- 100 lbs. . . . . . 3. 38 3. 50 3. 50 3.00 Genoa, Italy-----------------------------|----- do------- 5, 89 6.25 7. 13 7.75 Habana, Cuba.-------------------------- W----------- 11.25 11. 25 11.25 11.25 Havre, france...I.I.I.I.I.I.I.I.I.I.I. W. - ... Te s - - - - 75. 00 . 75.00 75.00 75.00 Lagos, West Africa. . . . . . . . . . . * - - - - - - - - - - W/M........ 18, 60 18, 60 24.00 24.00 Tisbon, Portugal.--------------------- - - - Yº ibs...... § #. tº e º 'º as sº tº 3.75"| ‘’’ 5.00 nº § Liverpool, England---------------------- (º: 13.5% 19.5% 1 13.64 1 15.64 Marseille, France------------------------|W----------- 105.00 75.00 120.00 - 65.00 Sydney, Australia.----------------------- W/M........ 23. 10 24.00 ||--------- - - - - - - - - - - - - - - - Valparaiso, South America. . . . . . . . . . . . . . W----------- 21. 76 20.94 22.49 - 21.95 Yokohama, Japan.---------------------- W/M........ 29.75 ------------ 32.50 ------------ FROM NEW ORLEANS TO- - - Habana, Cuba-5:------------------------ W----------- 10.63 10, 63 10.63 10. 63 Valparaiso, South America. . . . . . . . . . . . . . W----------- - 16, 88 16. 88 16. 88 16.88 1 British Ministry rates. The ocean rates at Pacific ports were secured from the carriers by Mr. W. D. Benson, of Seattle, who was selected for this task because of the special knowledge which he has secured of ocean rates, both in connection with the shipping business and as secretary of the Pacific Coast-Oriental Tariff Bureau. The number of commodities handled in the Pacific trades being fewer than those handled at Atlantic ports, it was possible to compile rates on all commodities. The compilation of rates both at Pacific and at Atlantic and Gulf ports is larger and more nearly complete for exported than for imported commodities, the rates on exports being established in the United States, whereas the freight charges for imports are ordinarily fixed at foreign points of shipment. The card index on rates at Pacific ports includes 3,993 rates on exports and 1,140 rates on imports, a total of 5,133. The manner in which the compilation of Pacific rates was made and the more important facts ascertained by the investigation are briefly described and set forth in a memo- randum which is made Appendix V to this report. The fluctuations in rates at Pacific ports were less than those on the Atlantic coast, but the increases were large, particularly during the latter half of the year 1917, before Government control came to be general. Some of the changes are indicated in the following brief table stating the rates for a limited number of representative com- modities for the years 1912 to 1917 and for each quarter of the year ending June 30, 1918. - - OCEAN RATES AND TERMINAL CIHARGES. 19 GENERAL MERCHANDISE. [By W/M.] July– º Janu- Sep- De- ary– April– 1911 || 1912 | 1913 | 1914 | 1915 1916 | tem- cem- |March June, ber, ber 1918 *| 1918. 1917. j 1917. FROM SAN FRANCISCO TO- South America----------------|-------|-------|-------|------- $15.00, $20.00, $27.50, $25.00; $25.00, $25.00, Mexico. -----------------------|------- $7.001-------|------- 10.00 - - - - - - - 17. 50, 17. 50, 17. 50 21.00 Central America.---------------|------- 8.00-------|------- 12.00 - - - - - - - 17. 50, 17. 50, 17. 50 21.00 Asia, East Coast - - - - - - - - - - - - - - $10.001-------|-------i-------|------- 22.50. 20.00. 25.00. 25.00 35.00 Asia, Indies.------------------ 10.00-------|-------|-------|------- 22.50; 20.00. 25.00. 25.00 35.00 Australasia--------------------------- 12.00|-------|-------|-------|------- 40.00; 40.00. 40.00. 40.00 FROM SEATTLE To– South America----------------|-------|-------|-------|-------|------- 20.00; 32.50. 27. 50 27. 50 27.50 Mexico.-------------------------------|-------|--------------|-------|------- 17. 50, 17. 50, 17. 50 21.00 Central America---------------|-------|-------|-------|-------|-------|------- 17. 50, 17. 50|| 17. 50 21.00 Asia, East Coast - - - - - - - - - - - - - - 10.001-------|-------|-------|-------|------- 20.00). 20.00. 20.00. 25.00 Asia, Indies. . . . . . . . . . . . . . . . . . . 10.00|- - - - - - -|-- * * * * * * | * * * * * * * : * * * * * * * : * * * * * * * 20.00. 20.00. 20.00 "25.00 FROM TACOMA TO- Asia, East Coast. . . . . . . . . . . . . 10.001-------|-------|-------|-------|------- 20.00; 20.00; 20.00. 25.00 Asia, Indies. . . . . . . . . . . . . . . . . . . 10.001-------|-------|-------|-------|------- 20.00| 20.00; 20.00. 25.00 FROM VANCO UVIER, TO- - Asia, East Coast. . . . . . . . . . . . . . 10.001. ------|-------|-------|-------|------- 18.00| 18.00; 18.00. 20.00 Asia, Indies---------------.... 10.001-------|-------|-------|-------|------- 20.00. 20.00| 20.00. 25.00 W MACHINERY. & * [By W/M.] FROM SAN FRANCISCO TO- South America. . . . . . . . . . . . . …l.…l.….l.…..…..… $20.00; $25.00, $25.00, $25.00, $25.00 exico.------------------------|------- $8.00, $8.00 - - - - - - - $15.00 12.00. 15.00 15.00. 15.00 18.00 Central America....... . . . . . . . . . . . . . . . 10.00| 10.00 - - - - - - - 17.00|| 14.00, 17. 50, 17. 50, 17. 50 21.00 Asia, East Coast --------------|-------|-------|-------|------- 12.00. 20, 00 20.00, 20.00. 20.00. 25.00 Asia, Indies-------------------|-------|-------|-------|------- 12.00| 20.00| 18.00 18.00 18.00 25.00 Australia----------------------|-------|--------------|------- 10.00|- - - - - - - 40.00 40,00| 40,00; 40.00 FROM SEATTLE TO- South America----------------|-------|-------|------ *-------|------. 20.00|| 25.00. 25.00. 25.00; 25.00 Mexico.------------------------|-------|-------|-------|--------------|------- 15.00. 15.00. 15.00. 15.00 Central America---------------|-------|-------|-------|-------|-------|------- 17.50; 17. 50, 17. 50, 17. 50 Asia, East Coast--------------|-------|-------|-------|-------|-------|------- 20.00. 20.00; 20.00. 25.00 Asia, Indies-------------------|-------|-------|-°- - - - - - || - - - - - - - - - - - - - - || - - - - - - - 20.00. 20.00. 20.00. 25.00 FROM TACOMA TO- - Asia, East Coast--------------|-------|-------|-------|-------|-------|------. 18.00. 18.00 18.00. 20.00 Asia, Indies-------------------|-------|-------|-------|-------|----- y- - - - - - - - - 20.00. 20.00. 20.00. 25.00 FROM VANCOUVER, TO- Asia, Past Coast--------------|-------|-------|-------|-------|-------|------- 20.00| 20.00. 20.00; 30.00 Asia, Indies-------------------|-------|-------|-------|-------|-------|------- 18.00 i8. O0 18.00. 25.00 FI, OTſ R. [By weight.] FROM SAN FRANCISCO TO- South America----------------|-------|-------|-------|------- $13.00, $20.00 $25.00, $25.00 $25.00, $25.00 Mexico.------------------------|---- ...] $6.00.------|------- 8,00| 8.00| 12.50| 12.50 12.50 15.00 Central America.--------------|----... 6.001-------|------- 8.00; 8.00 12.50| 12.50 12.50) 15.00 Australia----------------------|--------------|-------------- 10.00 10.00-------|-------|-------|------- 20 * : OCEAN RATES AND TERMINAL CHARGES. FLOUR-Continued. [By weight.] Octo- - º: ber— | Janu- s *P*. De- ary— April– 1911 1912 || 1913 1914 | 1915 | 1916 tem- Cem- |March June, ber 9| 1918. 1917 ber, 1918. * | 1917. FROM SEATTLE TO- South America----------------|-------|-------|-------|-------|------- $20,00| $25.00 $25.00 $25.00, $25.00 Mexico.-----------------------|--------------|-------|-------|--- '• - - - I - - - - - - - 12, 50 12.50 12, 50 12.50 Central America---------------|-------|--------------|-------|-------|------- 12. 50 12.50 12, 50 12.50 Asia, East Coast--------------|-------|------- $4.00, $3.50) $8.00) 15.00/-...----|-------|-------|--...-- Asia, Indies-------------------|-------|------- 5.50 5.00, 8:00 17.00..............]... ----|-----.. FROM TACOMA TO- Asia, East Coast--------------|-------|------- 4.00 3.50 8.00. 15.00. 17.00. 17.00. 20.00; 20.00 Asia, Indies-------------------|-------|------- 5. 50 5.00 8.00. 17.00. 17.00, 17.00, 20, 00 20.00 FROM VANCOUVER TO— Asia, East Coast.-------------|-------|------- 4.00 3.50 8.00. 15.00/-...----|-------|-------|--..... Asia, Indies-------------------|-------|------- 5.50 5.00) 8.00. 17.001-------|-------|-------|------- LUMBER. [Per 1,000 ft. b. m.) FROM SAN FRANCISCO TO- - Mexico.------------------------------ $12.50|| $12.50|....... $15.00) $15.00 $22.50 $22.50 $22.50 $27.00 Central America----...........l....... 14.00. 14.00|....... 17.00, 17.00. 26.25| 26.25| 26, 25, 31.50 Asia, Indies-------------------|-------|-------|-------|-------|-------|------- 40,00| 40.00; 40.00, 40.00 FROM SEATTLE To— '-- * Mexico-------------------------------|-------|---------------------------- 22. 50 22. 50 22. 50 22.50 Central America---------------|-------|-------|------- !------|-------|------- , 26.25| 26, 25, 26. 25, 26.25 Asia, East Coast. .......------|------- 10.00| 13.00, $8.00 9.00. 25.00. 25.00. 25.00. 25.00, 40.00 Asia, Indies-------------------|------- 12.00. 13.00 12.00. 11.00. 25.00).......l.......l.......l....... FROM TACOMA TO- Asia, East Coast--------------|------- 10.00. 13.00 8.00 9.00. 25.00. 25.00. 25.00. 25.00, 30.00 Asia, Indies-------------------|------- 12.00. 13.00 12.00. 11.00) 25.00) ....... [... ----|-------|------- FROM VANCOUVER To– ..", Asia, East Coast. ... -----------|------- 10.00. 13.00 8.00 9.00. 25.00. 25.00; 25.00. 25.00, 30.00 Asia, Indies-------------------|------- 12.00. 13.00 12.00. 11.00. 25.00.......l.......l.......l....... GENERAL MERCHANDISE. [By WIM.] TO SAN FRANCISCO FROM- Mexico------------------------ $10.001-------|-------|------- $10.00]....... $13.75 $13.75 $13.75|| $13.75 Central America.--------....... 4.00-------|-------|------- 12.00l....... 15,00|| 15.00. 15.00. 15.00 ASla, East Coast - - - -.......... 7.50)-------|------- $8.00 8.00, $20.00. 40.00. 40.00. 40.00. 40.00 Asia, Indies-------------------|-------|-------|-------|--------------|------- 50, 00, 50.00 50.00, 60.00 To SEATTLE FROM- - Asia, East Coast.------------- 7.50-------|------- 8.00 8.00. 20.00, 40.00. 40.00. 40.00. 40.00 Asia, Indies-------------------|-------|-------|-------|-------|-------|------- 50.00. 60.00. 60,00| 60.00 TO TACOMA FROM- Asia, East Coast -------------. 7.50-------|------- 8.00 8.00 20, 00, 40.00. 40.00. 40.00, 40.00 Asia, Indies-------------------|-------|-------|-------|-------|-------|------. 50,00) 60.00) 60.00. 60.00 TO VANCOUVER FROM – Asia, East Coast.............. 7. 50-------|------- 8.00 8.00. 20.00. 40.00, 40.00. 40.00. 40.00 Asia, Indies----------. • * * * * * * * 1 - e º sº a se e i s m e ºs e º e i s e s m = • * ºn º ºs e º e º i s as a s m = e i s m s m = * * 50, 00, 60.00) 60.00. 60.00 OCEAN RATES AND TERMINAL CHARGES. 21 HIDES. Octo- . . " July– - Sep- º: ºr April— 1911 | 1912 | 1913 | 1914 || 1915 1916 tem- | c. M. June, - ber, ber igiš * 1918. 3. - 1917. ſº. TO SAN FRANCISCO FROM – Mexico------------------------ *$12.00-------|-------|------- 1$17.50|....... 1$21,00||1321.00||1321.001 $21.00 Central America............... 1 20.00l....... - - * 1 m s tº as a - - 1 20.00|... . . . . 1 25.00 1 25.00 1 25.00 1 25.00 Asia, East Coast......... ----. * 8.50-------|------. 2 $8.00) 28.00|2$20.00 2 50.00 250.00 250, 00 250.00 TO SEATTLE FROM- - Asia, East Coast.............. *8. 50-------|------- 28.00|| 2 8.00|| 2 20, 00 2.30.00. 2 40.00. 2 40,00|240.00 Asia, Indies-------------------|-------|-------|-------|-------|-------|------- 3 58.00|| 3 58.00|| 3 65,00| 3 65.00 TO TACOMA FROM- Asia, East Coast. ............. * 8.50-------|------- 28.00. 28.00 220.00; 2 30.00|240, 00 2 40.00] 2 40. 00 TO VANCOUVER FROM- - - - Asia, East Coast. ---.......... *8. 50-------------. 28.00] 2 8.00] 2 20, 00 2 40.00. 2 40.00|2 55.00|2 55.00, RICE FROM SAN FRANCISCO TO— © Asia, East Coast. . . . . . . . . . . . . . l $6.50 l $5.00 - - - - - - - 1 $3.50 1 $5.00|1318.00||1340.00||1340,00||1350.00;1$50.00 To SEATTLE FROM- Asia, East Coast.............. 16. 50 l 5.00|... . . . . 1 3. 50 l 7.00 l 15,00|| 1 40.00 l 50.00|| 1 50, 00 1 55.00 Asia, Indies--------------------------|-------|-------|-------|-------|------- 1 50.00 i 50.00. 1 50.00. 1 50.00 To TACOMA FROM- Asia, East Coast. ------------- | 16.50, 15.00l....... 13.50 15.00|| 18.00 || 25.00 || 25.00 || 25.00 || 40.00 TO VANCOUVER, FROM- Asia, East Coast. . . . . . . . . . . . . . 16. 50| 1 5. 001. . . . . . . 3.50 5.00|l i8.00 a 50.00|s 50.00 s 50.00|s 55.00. R.U.B.B.E.R. TO SAN FRANCISCO FROM- Mexico.----------------------- '824.00--------------|------- 1$24.00||1324.00 1$24.00||1324.00||1324.00 1$24.00 Central America.-------------. * 24.00-------|-------|------- 1 24.00|. . . . . . . l 24.00 1 24.00 1 24, 00|| 1 24.00 Asia, East Coast --------------|-------|-------------- 2 $8.00 2 10.00|226. 50 2 30.00|2 75.00 2 75.00 2 90.00 Asia, Indies......... - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 2 17. 50] 2 30.00| 8 65.00, 365. 00; 3 95.00 395.00 TO SEATTTE FROM- - Asia, East Coast --------------|-------|-------|------- 28.00 2 10.00|226. 50 2 75.00 2.75.00 2 75.00 2 75.00 Asia, Indies-------------------|--------------|-------|-------|-------|------- 2 65.00 2 65.00 2 95.00| 2.95.00 TO TACOMA. IFROM- Asia, East Coast--------------|-------|-------|------- 28.00 2 10.00; 2 26.50|..............|.... * - - I - - - - - - - Asia, Indies-------------------|-------|-------|-------|-------|-------|------- 2 75.00] 2 75.00| 2 90.00] 2 90.00 TO VANCOUVER FROM- Asia, East Coast --------------|-------|-------------- * 8.00) * 10.00 ° 26, 50l............ --|-...- ..]-...---- Asia, Indies-------------------|-------|-------|-------|-------|-------|------- 245, 00 2 45.00|| 2 75, 00 2 75.00 I W. 2 M. * 22 OCEAN RATES AND TERMINAT, CHARGES. NOTE ON RATE FILES. The several files referred to in the foregoing chapter include: 1. Rates established by the United States Shipping Board and by the British and French Governments during the war periods. 2. Representative charter rates at Atlantic and Gulf ports. This file includes 2,156 rates. 3. Freight rates for the year ending June 30, 1918, at Atlantic and Gulf ports; total number of rates, 5,890. 4. Freight rates for the year ending June 30, 1918, at Pacific ports; total number of rates, 5,133. In addition to these files, there is a catalogue of vessels that were owned or controlled by the Shipping Board during 1918. Detailed facts regarding the tonnage, type, ownership, date of construction, and operating company are recorded for each ship. These files ought to be of value for reference, and if revised and brought down to date from time to time should be of assistance in the control or regulation of rates. * CHAPTER IV. - TERMINAL SERVICES AND CHARGES. The charges for terminal services are as much a part of the costs of ocean transportation as are the freight rates. Both the shipper and the carrier are interested in securing adequate terminal Services at reasonable costs; and the Shipping Board, in regulating ocean carriers and in carrying out plans for the development of the mer- chant marine, must necessarily give careful consideration to the growth and organization of terminal facilities, and to the enforce- ment of rules and practices by terminal companies that will be fair to those they serve. - . - The shipping act of September 7, 1916, applies to two classes of ocean carriers and to terminal companies serving such carriers. By this act, the Shipping Board is given jurisdiction over each “com- mon carrier by water in foreign commerce " " * running on regu- lar routes” and to each “common carrier by waterin interstate com- merce . * * * engaged in transportation by water of passengers or property on the high seas or the Great Lakes on regular routes,” and also, as regards certain provisions of the act, jurisdiction over “other person subject to this act,” this last phrase being defined by section 1 of the law to mean “any person not included in the term ‘common carrier by water' carrying on the business of forwarding, or furnishing wharfage, dock, warehouse, or other terminal facili- ties in connection with a common carrier by water.” - g By section 17 of the act, the Shipping Board is given the follow- ing regulatory powers over terminal companies: “Every other person subject to this act shall establish, observe, and enforce just and reasonable regulations and practices related to or connected with the receiving, handling, storing, or delivering of property. Whenever the board finds that any such regulation or practice is unjust or unreasonable, it may determine, prescribe, and Order en- forced a just and reasonable regulation or practice.” This provi- sion of the act does not give the Shipping Board the power to pre- scribe the rates to be charged for terminal services, but the preced- ing section of the law, which prohibits unreasonable discrimina- tions and unjust and unfair devices, applies to “any common car- rier by water or other person subject to this act.” By the act of July 18, 1918, and the President's proclamation of December 3, 1918, the Shipping Board has complete power to regu- late the services and charges of terminal companies until the final 23 i 24 OCEAN RATES AND TERMINAL CHARGES. treaty of peace shall have been proclaimed and for a possible period of nine months thereafter if, in the judgment of the President, the national interests require the life of the statute to be continued for that time after the proclamation of peace. This legislation was passed because of the severe congestion of traffic at several ports of the United States, and because of the very large increase that had been made in terminal charges, particularly for dockage and wharf- age at certain of the ports. While the subject was under considera- tion by Congress, and when it was evident that the law would be enacted, the study of terminal services and charges was made a part of the investigation of rates. A report upon terminal Services and charges, prepared by Prof. C. O. Ruggles, although separately pub- lished is a part of this report upon the investigation of Ocean rates. Part I of the report of Dr. Ruggles contains a general description of terminal charges at the ports of the United States, a comparison of charges at different terminals, and a statement regarding the ad- vance in port charges during the war. The consequences of present policies concerning port charges and services are discussed, and recommendations are made for the future regulation of ports and for their development. Part II, which comprises the larger part of the report, is devoted to a general description of terminal facilities and to a statement of port charges, first, at 10 important Atlantic, Gulf, and Pacific coast ports, and, second, at 17 others. The in- formation here presented is more complete than has previously been compiled. A request was received early in February from the London office of the Shipping Board for a statement of terminal charges at the ports of the United States, and a detailed statement of charges at 27 ports was copied from Part II of Dr. Ruggles's report and sent to London. g ,” In discussing the consequences of present policies concerning port charges and services, Dr. Ruggles points out that “private owner- ship or long-time lease of piers and wharves may furnish the oppor- tunity for favoritism toward certain industries or carriers, or prevent the use of port facilities in the most efficient manner.” Attention is also called to the fact that “the industrial and commercial uses of a port sometimes conflict with each other.” The use of deep- water frontage at American ports by industrial concerns is common practice, and it has had the effect of limiting the available commercial facilities at some of the larger American ports. Dr. Ruggles emphasizes the importance of bringing about the unification of railroad terminal facilities at all the important ports of the United States. He states that “railroad ownership or control of strategic terminal facilities is the natural outcome of competition among railroads”; that “Government control over railroad rates has intensified railroad competition in terminals,” and that “rail- roads have vied with each other in offering ample terminal facilities, OCEAN RATES AND TERMINAL CELARGES. 25, and this practice has resulted in duplication of expensive terminals without adequate provision for their physical coordination.” The result of railroad competition at the ports of the United States has been that the railroads, in order to obtain traffic, have granted services which were wholly or partly gratuitous. It has been the common, although not universal, practice of the railroads to absorb port terminal charges upon traffic for which the rail carrier has the line haul; in some instances, switching, drayage, and insurance charges have been absorbed by the railroads at terminals. These practices of the railroads have been discussed in various reports of the Interstate Commerce Commission (31 I. C. C., 351, 408, and 29; I. C. C., 212). It is the opinion of Dr. Ruggles that “the ownership of port terminal facilities by a number of railroads” has brought about the “lack of coordination both among the railroads themselves and between rail and water carriers;” and he adds: “It is a common provision in terminal tariffs that a railroad “does not obligate itself to provide wharfage, storage, or handling for property which has not been transported or is not intended to be transported’ Over its line; or that it ‘reserves the absolute right to the use of its piers or docks’ ” “ ”. Such a practice makes as many separate ports within a port as there are deep-water terminals controlled by the different railroad companies. It sometimes means, too, that there is congestion at the water terminals of some railroads, while others are not used to their capacity.” Dr. Ruggles also observes that “the restriction of strategic port terminal facilities to its own use is an attempt by a railroad to secure the line haul of the traffic. While this is a failure to appreciate the fact that railroads are common carriers, it is the natural result of railway competition in the terminals. Moreover, it is probably true that this competition has made terminal charges so low that a railroad which has expensive rail and water terminals could not afford to permit their use by other railroads unless it were to receive more remuneration than the present scale of terminal charges yields.” - Another effect of the absorption of terminal charges, as is pointed out by Dr. Ruggles, is that the practice makes it difficult for States or municipalities to maintain self-supporting public piers in competition with the railroad piers. This difficulty has been emphasized by statements made by the director of the port of Boston and the director of wharves, docks, and ferries at Philadelphia. - In his recommendations concerning port charges and services, Dr. Ruggles says: “The character of service at any port depends upon a large variety of factors " " " but the big problems in all ports are the same. First, adequate facilities should be provided to care for the volume of traffic offered; second, private interests should not be permitted to utilize port facilities to their own ad- vantage; and, third, there should be complete coordination among 26 OCEAN RATES AND TERMINAL CHARGES. rail carriers themselves, and between rail and water carriers.” Concerning the coordination of rail and water terminal facilities, Dr. Ruggles states that “a belt line railway meets only part of the difficulty; it does not provide coordination of rail and water terminals * * *. There ought to be complete freedom of movement of traffic within a port from any railroad to any pier, and vice versa.” Dr. Ruggles does not offer a definite plan for bringing this about, but suggests that the United States Shipping Board and the Interstate Commerce Commission should jointly seek to answer the following Questions: - Should there be a separately organized terminal company in each of the important ports of the United States to supersede control by various private concerns and by individual railroad companies? Should all terminal facilities be publicly owned, and if publicly owned, should they be publicly or privately operated . Should railroad rates to and from the ports be so constructed as to divide the charge for the line haul from the terminal charge, and the terminal charges be made equal to the costs of terminal services? To assist in finding the right answer to these questions, Dr. Ruggles recommends the establishment by the Shipping Board of a Bureau of Port Terminal Charges and Services. It is recommended that “this bureau, in cooperation with the Interstate Commerce Commission and local port authorities, make an exhaustive and comprehensive study of all conditions affecting the efficiency of service at all important ports of the United States.” It is also suggested that a study be made of some important European ports, and that complete data regarding port terminal charges be collected and filed. “With the fund of information that would thus be provided, the Shipping Board would be in position to take intelligent action with the Interstate Commerce Commission and with local port authorities for the solution of port terminal problems.” Dr. Ruggles closes his report with the recom- mendation that “there be provided adequate means for the control of port terminal charges and services in the interests of commerce.” The main purpose of the investigation of terminal services and charges has been to prepare for the beginning of such regulation of terminal services as the Shipping Board may deem to be its duty to exercise in enforcing the shipping act of September 7, 1916, or such future legislation amendatory thereto as may be enacted. A later chapter will consider the organization which it may be wise for the Shipping Board to create, not only for the regulation of the practices of terminal companies, but also for assisting in bringing about, in so far as practicable, the unification of the rail and ocean terminal facilities and their systematic development at the leading ports of the United States. - - . CHAPTER v. COSTS AND RATES. The investigation, as first planned, included the ascertainment of the costs of freight services rendered by vessels operated by or for the Shipping Board, i. e., the capital and current expenses per vessel and per voyage. The purpose of this inquiry into the costs of services was to discover what revenues, and thus what minimum freight rates, were required to meet operating expenses and to yield a proper rate of return on investment. The difficulties ordinarily confronted in seeking to determine the cost of transportation services, whether of carriers by land or by water, were understood, but the conditions seemed favorable for securing the facts as to the costs of the freight services performed. by the Shipping Board and its agents. The Shipping Board was the owner of a large number of vessels and was operating more than 100 of those vessels. It had also chartered and requisitioned an even larger number of vessels, the majority of which were being operated for the board by some 65 companies with which the board had made agreements that required, among other things, that the companies should account to the board for freight receipts obtained and for expenses, other than charter hire, to be borne by the Shipping Board, Emergency Fleet Corporation. - . The main sources from which information as to costs of freight services was to be sought were the comptroller of the Shipping Board and of its Division of Operations, the comptroller of the Emergency Fleet Corporation, and the companies with which the Shipping Board, Emergency Fleet Corporation, had operating agreements. + The comptroller of the Shipping Board, Division of Operations, was requested to furnish cost data regarding: 1. The maintenance and operating expenses of vessels operated directly by the Shipping Board. - 2. The maintenance and operating expenses for Government account of vessels operated by agents of the Shipping Board. 3. The cost of acquisition of vessels purchased by the United States Shipping Board, i. e., vessels of which the comptroller of the Division of Operations has data. . For information regarding the cost of vessels constructed by the Shipping Board, application was made to the comptroller of the Emergency Fleet Corporation at Philadelphia, from whom figures were obtained giving the cost of ships, grouped in three classes: 1. Partly built ships taken over and completed by the Fleet Cor- oration. º p 27 28 OCEAN RATES AND TERMINAT, CIHARGES. 2. Tonnage contracted for by the corporation up to August 15, 1918. - 3. Tonnage to be constructed during the period ending December 31, 1919. To secure detailed facts regarding the maintenance and operating expenses of vessels operated by agents of the Shipping Board, the Director of the Division of Operations called upon the 65 companies (operating 261 vessels) with which agreements for the operation of vessels had been made by the Shipping Board to report for each vessel the expenses of operation covered by the “time form”; i. e., expenses properly incurred for owner's account under the “time form” of requi- sition charter. These expenses did not include interest, depreciation, amortization, or profit. The companies, however, were requested to report overhead expenses attributable to each vessel for the period covered by the report. A collateral line of inquiry was followed to secure information by which to determine the rate of return on Shipping Board vessels. required to cover interest, depreciation, and proper amortization. The builders of the vessels that had been requisitioned by the Shipping Board were asked to state the cost of each of the several vessels. Reports were received from nearly all of the shipbuilders, and figures as to original cost of requisitioned vessels were obtained. The prewar costs of vessels thus obtained were helpful in estimating the probable postwar costs and values to which it would be desirable, if practicable, to amortize the wartime costs of shipping. The data received from the comptroller of the Emergency Fleet Corporation as to the cost of constructing vessels showed the average. capital investment per dead-weight ton which the United States was making in ships of different classes; and on the 27th of September, 1918, the following brief report was made to the Shipping Board upon the “Rate of return on investment in Shipping Board vessels to cover depreciation, interest, and amortization”: t - An investigation has been made to ascertain the return upon investment necessary to be secured from cargo vessels owned or hired by the Shipping Board to cover depreciation, interest, and amortization. It has been found that $5.10 per dead- weight ton per month needs to be secured on the average to cover— | Depreciation of investment to which amortization is not applied, at the rate of 10 per cent per annum for the next three years, and at 5 per cent thereafter; Interest at 5 per cent per annum; and - Amortization of 33% per cent per annum during the coming three years of the differ- ence between the present war-time costs of vessels and their estimated post-war costs. Depreciation of the unamortized part of the investment at the rate of 10 per cent. per annum for the three years during which it is probable war conditions will prevail. is at double the normal rate of depreciation, and this rate has been accepted for the probable period of the war and of readjustment thereafter, because of the hard usage. to which vessels are necessarily being put at the present time. OCEAN RATES AND TERMINAL CHARGES. 29 The interest rate of 5 per cent per annum represents the Government's approximate cost of securing funds. It is a low rate, but one that covers the Government's outlay for Securing capital. The amortization each year, for three years, of 33% per cent of the excess of the present costs to the Government of vessels over the probable post-war costs is deemed advisable, and funds for this purpose should, if possible, be secured from the freight rates charged. f It is respectfully recommended that the Shipping Board adopt $5.10 per dead- weight ton per month as the amount to be earned from freight rates on cargo vessels owned or hired by the board to cover depreciation, interest, and amortization. The data and analyses upon which the foregoing recommendations were based were presented in a memorandum prepared by Mr. Walter T. Fisher and which is made Appendix II of this report. The fact should be emphasized that the recommendation that $5.10 per dead- weight ton per month should be secured from freight rates on cargo vessels owned or hired by the board to cover depreciation, interest, and amortization had reference entirely to conditions created by the war. It is no longer desirable or possible for the Shipping Board to charge freight rates that will yield over $5 per dead-weight ton per month in addition to the amount necessary to meet current operating expenses. Freight rates are already subject to competition and are much lower than they were during the war, and it is no longer possi- ble to carry out the program of amortizing within a period of three years the difference between war-time costs of Shipping Board ves- sels and their estimated post-war costs. For some time following the submission of the above report and recommendation, the basic costs of the services of Shipping Board vessels were determined by including $5.10 per dead-weight ton per month as the amount to be earned from freight rates on Shipping Board vessels, to cover depreciation, interest, and amortization. The rapid approach of peace-time conditions makes it necessary to fix rates with reference to competition as well as with regard to theo- retically desirable revenues. To determine the cost of owning, maintaining, and using vessels in the performance of freight services it is necessary to know what is required for depreciation, interest, and amortization, and also what is necessary to meet actual expenses of operation and maintenance. These cost data, to be useful for rate-making purposes, must be dis- tributed per vessel, and also per voyage or per month. When this in- vestigation was undertaken it was thought that the comptroller of the Shipping Board would be able to make these cost analyses. It was found, however, that the accounts of the comptroller's office were in the process of reorganization, and it later developed that it was not until January, 1919, that the desired cost analyses could be made by the comptroller. This statement is not made in criticism of 30 OCEAN RATES AND TERMINAL CHARGES. the comptroller, who had a most difficult problem to work out and who would have furnished the information when requested had it been possible for him to do so. As has been previously stated, the Division of Operations sent out a questionnaire to secure information regarding the maintenance and operating expenses of vessels operated by agents of the Shipping Board. Of the 65 companies with which agreements for the operation of vessels had been made by the Shipping Board only 18 companies reported the expenses of operation which the companies were re- quired to meet under the conditions of the “time form” requisition charter. The small number of replies received was probably due to the fact the questionnaire was sent out at the time when the military efforts of the country were at the maximum and when all shipping companies were doing their utmost to keep their vessels moving. While the questionnaire was still before the majority of the companies the armistice was signed and the companies doubtless as- sumed that the information requested was no longer earnestly desired. The reports received from the 18 companies that responded to the request for operating expenses gave data regarding only 61 vessels. The number and types of vessels concerning which expense accounts were received were too few to indicate the average expenses incurred in operating under the “time form ‘’ charter. The data were not suffi- cient to be helpful in ascertaining what revenues and what rates would correspond to costs of service. However, the data received from the companies operating vessels for the Shipping Board were sufficient to be of some service in working out the schedule of requisi- tion rates which the board was recommended to adopt, but which, for reasons stated in Chapter II, have not been put into force. - Soon after the armistice was signed, frequent changes in rates were made, and since the beginning of January, 1919, several large reductions have been made in the rates. It has been evident since November, 1918, that analyses of the costs of freight services during the period of active warfare would not be useful to the Shipping Board in fixing ocean rates to be charged in the future. It will, however, be advisable for the Shipping Board officials, who fix the rates charged for the services of vessels owned and operated by the Government to ascertain as nearly as may be the basic costs of service in the several ocean trades in order that rates may be made sufficient, at least, to cover costs and in order that the Shipping Board may know to what extent it is making rates that will yield a profit to the Government. The comptroller's office is now in a posi- tion to make the analyses necessary for the determination of basic costs of service in the different trades for the principal types of carriers. oCEAN RATES AND TERMINAL CHARGES. 31 The difficulty of fixing freight rates that correspond with costs— after the expenses or costs of service for vessels of different types have been ascertained with a fair degree of accuracy for the various trades—is not especially great when the rates apply to a full cargo consisting of one to three or four commodities offered and carried in known and definite quantities or tonnages. The complications of rate making, however, are intricate when different rates are to be made for each of numerous commodities, and are to apply to any quantity that may be offered. The relative costs of service for trans- porting different articles of different weights, densities, perishability, strength, and fragility, value, etc., are hardly determinable with close accuracy. This is the well-known problem of making freight rates— rail or ocean—according to the costs of service when it is impossible to allocate total costs with close accuracy among a large number of dissimilar services simultaneously performed. There are definite limitations to the practical application of the cost theory or method of making freight rates, although it is possible to allocate with ap- proximate accuracy the aggregate costs among the several Services rendered and to base rates upon estimated costs. Appendix WT of this report contains some “Notes upon making ocean rates based on costs.” - How far the costs of services, when determinable, should be con- trolling in making ocean-freight rates is a question the answer to which will depend upon the policy of rate making or rate regulation that may be adopted. In most instances other facts should be con- sidered along with costs in deciding what freight charges shall be imposed or permitted, but it will seldom happen that rates yielding less than costs are justifiable. In all cases, those responsible for making or approving ocean rates will prefer to act with a knowledge of the fixed and current expenses to be met from the revenues secured from the rates in question. The policy of rate control and regulation and the principles that should be controlling are considered in later chapters. CHAPTER VI. - RATE MAKING AND RATE CONTROL BY THE SHIPPING BOARD. . As long as the Shipping Board is the owner and operator of vessels, it must fix rates for the services rendered. During the period of the war, and doubtless for a time after peace is restored, the board will also have the problem of determining the charges that may be made by vessels controlled, but not owned, by the Government. Rate control, exercised because of the scarcity of tonnage and the increased traffic created by the war, will merge into rate regulation as normal conditions are gradually restored. The initiation and making of ocean rates will continue certainly while the board operates vessels, and probably as long as the board owns them. • In making rates for the freight services performed by Shipping Board vessels, consideration must needs be given to the obligations of the board to serve other departments of the Government, to be of assistance in building up a larger and more prosperous American merchant marine, and to employ business methods in managing the Government's fleet, in so far as that can be done without interfering with the accomplishment of public aims. When the Shipping Board provides vessels, or performs freight services, for the Army or Navy or other departments of the Govern- ment, costs, so far as ascertainable, should be the basis and measure of the charges. The board can have no reason for making profits from such services. As between different parts of the Government, charges are a matter of interdepartmental accounting. Payments are from one Government pocket to another. - It being the purpose of the Shipping Board to promote the develop- ment of the American merchant marine, the board will not desire to make rates for Shipping Board vessels' that may prevent private owners, who may wish to compete with Government-owned vessels, from making reasonably profitable charges for their service. The owners of American vessels must compete in the world's trade with vessels under foreign flags, and successful competition will not be easy even if conditions are made as favorable as it is practicable to make them. The Government's participation in the ocean-carrying trade ought to help, rather than handicap, private shipping under the American flag; otherwise, the Government will defeat the primary purpose it seeks to accomplish by operating vessels. Strict adherence to the methods followed in commercial enter- prises conducted for profit is neither possible nor altogether desirable 32 - OCEAN RATES AND TERMINAL CHARGES. 33 in managing vessels operated by the Shipping Board. The securing of business profits must be subordinated to the accomplishment of public aims—to serving other departments of the Government at rates that equal or approximate the costs of service, to fostering the growth and increasing the competitive strength of the American marine. - - - . . . In so far as the conditions of international competition will permit, the rates on commercial freight carried in vessels owned and operated by the Shipping Board, or controlled by the board under requisition or charter and operated for its account, should yield the Government current business profits, except when it is clearly evident that a re- duction of the rates to a cost basis will further the general public interest. : . . . . Shipping Board vessels will necessarily com ete with privately owned vessels. Where shippers are able to chº between Govern- ment vessels and private vessels, the rates fixe the Government will determine those that may be charged by J. companies. If the Government foregoes profits, other carriers in ust do likewise. Moreover, the ocean rates fixed by the Government for the services performed by its vessels will establish a general standard or level to which shippers will expect all ocean carriers to conform—those that do not, as well as those that do, compete directly with the vessels or lines operated by or for the Government. The rates for all vessels, Government and private, should be reasonable, but the Government should do nothing to limit the development of private shipping. . . . . Until peace has been established by treaty, and while the great scarcity of ocean shipping created by the war is gradually being over- come and normal tonnage conditions are being restored, the Shipping Board must concern itself with rate control as well as rate making. The necessity for rate control was created by the war, and it will last while war conditions prevail, the need for control (as contrasted with regulation), diminishing as the situation, due to the war, gives way to normal peace-time conditions of ample tonnage and of active general competition among ocean carriers. . • . . . . The war-time rate control exercised by the Division of Opera- tions and the Chartering Committee of the Shipping Board was begun in 1917 as a part of the measures taken to meet a war crisis. It was a military necessity for the United States and the Allies to control shipping, both tonnage and rates. The act of July 18, 1918, gave the President statutory authority for the control which, as a war measure, was being exercised, and also gave the President con- trol over ocean terminal facilities, services, and charges. By procla- mation issued July 21, 1918, the President conferred upon the Ship- ping Board the power to control ocean rates. The authority over terminal facilities, services, and charges was vested in the Shipping 118231—19—3 3. i 34 OCEAN RATES AND TERMINAL CHARGES. Board by an Executive order dated December 3, 1918. The powers granted by the act of July 18, 1918, will “cease upon the proclama- tion of the final treaty of peace” unless, “in the judgment of the President, the tonnage shortage at such time is so severe that national interests of the United States are jeopardized,” in which case, he may extend the act for a period of not exceeding nine months. The shortage of tonnage in American commerce will still be so great when peace is proclaimed that it will probably be considered advisable to extend the life of the act of July 18, 1918, for the possible period of nine months in order that the Shipping Board may continue to exercise the control necessary to prevent extortionate ocean freight and terminal charges, to keep discriminations among shippers and between ports within reasonable bounds, and, in general, so to stabilize ocean rates and terminal charges as to enable manufacturers and traders to engage in foreign commerce and to make plans for the future with the assurance that ocean rates will be kept within limits that make profitable business possible. Freight forwarders and steamship operators, especially those connected with regular steamship lines, have emphasized the neces- sity of stabilizing ocean rates during times such as now prevail, when competition among ocean carriers is absent or only partial. When shippers may be required to pay widely varying rates for simi- lar services, no exporter can be certain whether the rates he pays are similar to those charged his competitors. In the absence of Government control of ocean rates, it is impossible to make contracts for the sale or purchase of goods with a knowledge of what the ocean charges will be. Without doubt, there will be such a shortage in ocean tonnage throughout the year 1919 as to make desirable the stabilization of ocean rates through Government control. What is true of ocean-freight rates applies in greater or less degree to terminal charges. For the reasons here briefly outlined, it is recommended that the Shipping Board continue its control over rates until the serious shortage in tonnage, due to the war, has been overcome. Then control should merge into regulation, as provided for by the act of September 7, 1918, or by such legislation as may be enacted to sup- plement that law. It would not be desirable for rate control to be followed by an inactive policy on the part of the Government of complete noninterference with ocean rates and terminal charges. The problems of rate regulation are considered in the following chapter. CHAPTER VII. - RATE REGULATION BY THE SHHPPING BOARD). The enforcement of the provisions of the United States Shipping act of September 7, 1916, which provide for the regulation of the services and rates of carriers subject to the act, concerns carriers, shippers, and the public. Regulation will affect the income of the carriers, the development of the merchant marine, and the condi- tions under which foreign and interstate commerce may be carried on. The public as a whole has an interest in the policy and practice that may be followed in regulating ocean shipping. The act of 1916 applies to common carriers by water running on regular routes in the foreign and interstate commerce of the United States. Some of the provisions of the law apply to common carriers by water and to “other persons subject to this act,” and the statute defines “other persons subject to this act” as “any person not included in the term ‘common carrier by water' carrying on the business of forwarding, or furnishing wharfage, dock, warehouse, or other terminal facilities in connection with a common carrier by water.” It is provided “that a cargo boat, commonly called an ‘ocean tramp,' shall not be deemed” a “common carrier by water in foreign commerce.” r The statute (sec. 16) makes it unlawful for any common carrier by water, or other person subject to the act, to give any unreasonable preference or advantage to any particular person, locality, or descrip- tion of traffic; to allow any person to obtain transportation services for less than the regular rates by means of false billing, classification, or weight of traffic; and to persuade any company not to give a competing carrier by water as favorable rates of insurance as are granted to a carrier or other person subject to the act. The prohibi- tions in section 16 run against all carriers subject to the act. Section 17 prohibits common carriers by water in foreign commerce from making unjust discriminations between shippers or ports. When the Shipping Board finds that such unjust discriminations are being practiced, the board may make an order requiring the carrier or carriers to “discontinue demanding, charging, or collecting any unjustly dis- criminatory or prejudicial rate, fare, or charge.” Section 18 applies. to common carriers by water in the interstate commerce of the United States, and requires such carriers to establish reasonable charges, classifications, and regulations, and to file their maximum charges with the Shipping Board. The rates thus filed may not be increased “except with the approval of the board, and after 10 days' public notice.” When the board finds any charge, classification, or regulation to be unjust or unreasonable, “it may determine, prescribe, and order enforced a just and reasonable maximum rate, fare, or 35 36 OCEAN RATES AND TERMINAT, CIHARGES. charge, or just and reasonable classification, tariff, regulation, or practice.” Section 19 provides that when a carrier reduces its rates below “a fair and remunerative basis with the intent of driving out and otherwise injuring a competitive carrier by water, it shall not increase such rates unless, after hearing, the board finds that such proposed increase rests upon changed conditions other than the elimination of said competition.” . In general, the shipping act applies to regular-line carriers in the interstate and foreign commerce of the United States, prohibits all such carriers from making unreasonable discriminations as between persons and ports, and requires regular lines engaged in the interstate commerce of the United States to charge reasonable rates and file them with the Shipping Board. The board is given power to deter- mine the reasonableness of the charges and practices of interstate carriers, and to prescribe maximum rates. i The law states what carriers by water must do, and what the Shipping Board may do. The fact, however, that the board is per- mitted rather than required to exercise its authority does not in any way affect the obligations of the board to enforce the principles and provisions of the act. The Shipping Board exists primarily to inter- pret, administer, and enforce the act of September 7, 1916; and, with the restoration of peace and the return of normal conditions of ocean shipping, the sections of the shipping act having to do with rate and service regulation, rather than the sections concerning the construction and operation of vessels, will chiefly concern the Shipping Board. Is the regulation of the services and charges of ocean carriers and terminal agencies wise and desirable? This question may be said to have becn answered affirmatively, as regards ocean-line carriers engaged in interstate commerce, when Congress passed the shipping act. The answer is less definite regarding carriers in foreign com- merce and the agencies that perform terminal services, but even in their case the law prohibits unreasonable and unfair discriminations, and when the Shipping Board finds that a carrier by water in foreign commerce has made rates that are “unjustly discriminatory between shippers or ports,” the board “may alter the same to the extent necessary to correct such unjust discrimination or prejudice.” The act also requires those rendering terminal services in connection with a common carrier by water subject to the act “to observe and enforce ..just and reasonable regulations and practices;” and if the board finds this is not being done, it may prescribe “a just and reasonable regulation or practice.” The board does not have the authority to fix the charges for terminal services, but it has other regulatory powers over such charges. - • * , It was clearly the intention of Congress that carriers by water engaged “on regular routes” in the interstate commerce of the United States and, to a less degree, such carriers employed in transporting OCEAN RATES AND TERMINAL CHARGES. 37 the foreign commerce of the United States should be regulated; but shortly after the Shipping Board was organized the United States was drawn into the World War, and for regulation by the board was temporarily substituted practically complete Government control of American shipping and the construction and operation of vessels by the Emergency Fleet Corporation. Consequently, the experiment of Government regulation of ocean carriers has not yet been tried out. Many persons engaged in the ocean-shipping business question both the desirability and the possibility of giving effect to the regulatory principles and provisions of the shipping act of September 7, 1916. In support of this view, it is argued that ocean transportation is a highly competitive business; that the traffic created by foreign com- merce is sought by shipping of all flags; and that the resulting com- petition is world-wide, all pervasive, and quite beyond the control or effective limitation of carriers or of Government. It is also con- tended that, even though the United States Government has the power under the Constitution and as a sovereign State to regulate commerce with foreign nations, the effective exercise of that power is limited not only by the sovereign rights of other nations to regulate their commerce with the United States, but also by the fact that owners of ships will be disposed to employ their vessels in the trade of those countries that impose the fewest regulations and the lightest burdens upon shipping. If any particular country seeks to regulate shipping while the other principal maritime nations do not, that country may prevent the development of its merchant marine. Experience in applying the shipping act will best determine how far it is practicable or wise to go in regulating the services and charges of ocean carriers and the terminal companies by which they are served. The problem of enforcing the act is one of making a prac- tical application of sound principles. The law aims to keep the discriminations of ocean carriers within reasonable limits, and that would be in the interest of producers and merchants who trade with regions reached by water routes; it would also benefit American com- merce to keep one port from being given unfair preference over other ports; and the carriers themselves would be the gainers if their com- petition were made open and fair instead of secret and destructive. For many years there was opposition to the interstate commerce law, the purpose of which has been to make the charges for railroad services public instead of secret, fair and just instead of willfully discriminatory, as among persons, places, and commodities, and stable instead of fluctuating with every change in the force or cir- cumstances of competition. At present, however, everyone recognizes that railroad charges should be public and stable as well as absolutely and relatively reasonable. - The fact that the services and charges of ocean carriers are of a public nature will hardly find general acceptance in a day, and it will 38 * OCEAN RATES AND TERMINAL CHARGEs. doubtless require time to convince everybody that carriers by water as well as by rail ought to conduct their business openly and in accord- ance with standards fixed by the Government. It was nearly 20 years after the interstate commerce act of 1887 was enacted before its underlying principles were accepted without question, and the law, reinforced by the Elkins Act of 1903 and the Hepburn Act of 1906, was made really effective. It ought not to take 20 years to solve the problem of regulating carriers by water. The experience had in regulating the railroads will be helpful, but it is not to be supposed that it will be possible to eliminate entirely the usual period of experimentation and of refinement of methods and machinery of administration. That the regulation even of line carriers by water—the present law does not apply to vessels employed in irregular, i.e., tramp, services— presents real difficulties must be frankly admitted; but the provisions of the shipping act allowing carriers by water to form conferences and to enter into agreements as to their services and charges, which agreements are subject to the approval, modification, or cancellation of the Shipping Board, seem to make the regulation of line services and rates possible and practicable. At the time the bill which became the shipping act was under consideration, a careful investigation was made of Ocean conferences and shipping agreements, and it was decided so to amend the Sherman Antitrust Act as to permit shipping companies to enter into confer- ence agreements. The shipping law, as enacted, prohibits deferred rebates, the operation of “fighting” ships, and other unfair practices, and then permits the carriers to enter into conference agreements in accordance with previous practice. As is well known, those agree- ments cover rates and fares, the apportionment of earnings and traffic, the regulation of sailings, the distribution of tonnage among ports, and other matters of common interest to competing carriers. When several carriers, whether railroad or steamship lines, connect the same points and compete for traffic free to move by any one of the several lines, it is necessary to the carriers and desirable for the public that there should be associated action in arranging services and making rates. Unless there is a common understanding among the rivals, there will be discriminations in rates injurious alike to carrier and shipper. Experience shows that competition unregulated by railway or steamship associations tends to become destructive. Rate wars among railroads and among ocean lines were the natural consequence of unregulated competition. º The principal lines operating in each of the trades from and to the Atlantic, Gulf, and Pacific ports of the United States are mem- bers of one or more conferences. Through its power to approve, modify, or cancel these agreements, the Shipping Board possesses the power to regulate ocean line carriers as regards their practices, OCEAN RATES AND TERMINAL CHARGES. 39 services, and charges. Moreover, it is a power which the board not only may employ, but will be obliged to exercise, if it formally ap- proves, modifies, or cancels the agreements which the associations of ocean carriers are required to file. - - + . The regulation of steamship lines, through its control over the provisions of the conference agreements, will enable the Shipping Board not only to regulate the services, charges, and practices of the lines engaged in interstate commerce, but also to supervise and, in large measure, to regulate the lines operated in the foreign trade of the United States. The ocean lines engaged in the foreign trade will have reason for welcoming Government regulation through formal approval of the conference agreements. It will be easier for the carriers to enforce their agreements because of the fact that the agreements must be filed with the Shipping Board and “shall be lawful only when and as long as approved by the board.” The conferences are formed to enable the carriers to make enforceable agreements stabilizing rates and regulating services and practices. The line carriers especially desire to maintain stable rates; and, if the rates are reasonable, the shipper benefits from the stabilization. The Shipping Board can aid the conferences to accomplish their legitimate purpose, and in so doing the board can exercise in a practical way a large measure of control over the carriers subject to the shipping act. - The extent to which it is desirable to go in the regulation of terminal facilities and charges is indicated by the facts presented in Chapter IV of this report. Here, as in the regulation of ocean rates, the Federal Government enters upon a new field, and its course must be guided by experience. Whatever regulation is undertaken by the Federal Government must be exercised by cooperation with State and municipal authorities and with the Interstate Commerce Com- mission or other Federal agency having jurisdiction over railroads. In the regulation of ocean rates and terminal charges, the Ship- ping Board has a permanent task. There will be opposition to all regulation, which, however, may be expected to lessen and eventually to end as the problems of regulation are successfully solved. Twenty years ago the future of railroad regulation seemed doubtful; to-day the only question is how far shall Government regulation or control be extended. It may not, probably will not, be necessary ever to regulate ocean carriers as completely as carriers by rail; but the fundamental relations or obligations to the public being the same for carriers by water as for carriers by rail, the Shipping Board will seek to give practical and helpful effect to the same principles that have been followed in working out the regulation of railroads. Success in regulation will depend largely upon the organization developed for the task. A suggested plan of organization is outlined in the following chapter. CHAPTER VIII. ORGANIZATION FOR REGULATION OF OCEAN RATES AND TERMINAL CHARGES. The Shipping Board has three duties as regards ocean rates and terminal charges: * 1. Until peace has been brought about and fairly normal condi- tions of ocean transportation have been restored, the Shipping Board will need to continue its war-time control of such charter and other ocean rates as are now being fixed by the board. It will doubtless be possible and desirable for the board to reduce the degree and extent of its control over those rates as the effects of the war are outgrown. - , # 2. The making of rates for the services performed by vessels operated by the Emergency Fleet Corporation of the Shipping Board. In all probability, the board will continue for some time after the proclamation of peace to operate some if not all of the vessels it owns. Moreover, when the board charters its vessels to companies or individuals to operate, it will doubtless not only determine the rates at which the vessels are chartered but will also prescribe the maximum rates that may be imposed by the charterers. - 3. The permanent regulation of the rates and services of Ocean carriers in so far as that regulation is required by the provisions of the shipping act of September 7, 1916. Should the provisions of this initial act for the regulation of the shipping business not be increased and strengthened by subsequent legislation, the Shipping Board will, after it ceases to exercise its present war-time control over shipping, have increasingly important functions to perform in the regulation of ocean carriers. - The present war-time control of charter and other rates was exer- cised by the Board's Division of Operations and the Chartering Committee. It is assumed that the Division of Operations and the officials who operate the vessels owned by the board will work out the charges for the freight services performed by such vessels. With a view to obtaining a clear conception of the task of making and controlling rates, conferences have been had with the Director and Assistant Directors of the Division of Operations, and others. All agreed that a definite organization should be created within the Division of Operations, the organization to be such that the detailed work of rate making may be performed in a prompt and practical manner, and in such a way as to relieve the Director of Operations of the consideration of all questions except those of general policy. 40 OCEAN RATES AND TERMINAL CHARGES. º 41 \ Of the plans of organization that have been suggested, the one by Mr. A. E. Clegg, formerly associated with the work of the Ship- ping Control Committee, and Assistant Director of Operations, seems especially practicable and commendable. It is recommended that Mr. Clegg's plan be adopted and tried out in practice. Mr. Clegg's statement of his plan is as follows: It is my opinion that machinery must be established which will enable the Ship- ping Board to work as quickly and efficiently and with as full a knowledge of the world rate market as would a private company operating in the steamship business for its own account. In order to do this, it will be necessary to have the main rate organization at New York, for it is at New York that the reports from all over the world to steamship companies, importers, exporters, brokers, etc., are made avail- able each day. I have a very simple plan in mind which I believe covers the necessities of the situation—a plan which would enable Washington to have its hands fully on world trade, rates and conditions and have the voice of authority in the establishing or chang- ing of rates. - No. 1. In Washington should be situated an executive to handle rate matters only, in whose hands should be the power to, without delay, approve or disapprove rates. This executive should receive reports daily from New York as a center for the Atlantic district, New Orleans for the Gulf district, and San Francisco for the Pacific coast. (San Francisco would report by wire, if necessary.) These reports (more fully outlined in a later paragraph) would give the executive a complete review of any changes in rates in all trades—rates quoted outward or homeward by British, Japanese, or other flag steamers; rates which the American exporter or importer needs in order to do special lines of business, or continue old lines; information con- cerning large contracts which are in the market for Supplying and shipping, and for the manufacturing of which England, Germany, or other countries are in competition with this country; information as to rates being quoted from England or other coun- tries to world points as against rates to the same world points in effect from United States ports, etc.—and would give him such a complete world picture that, after taking into consideration any particular policy of the Shipping Board, would make it a simple matter for him to act quickly and give permission for a rate to be established either for a period or for an individual parcel of cargo, as the case may be. No. 2. New York organization.—A department comprising one experienced man, as manager, with five assistants, would, for the time being, be all that would be required for instituting this work. The manager would direct these assistants (each assistant taking certain trades so as gradually to become a specialist in such trades) to spend all of their time circulating amongst the steamship people, brokers, exporters, and importers. These men would gather day by day all information connected with the foreign markets, and the information received by the steamship people, brokers, exporters, and importers through various channels would, in the very nature of things, be made available to such rate department representatives, as each inter- est would be looking to the Shipping Board for assistance of one sort or another. Each rate department representative would make up each night a full report of the information gathered during the day for such trade or trades as he was handling, a copy of which would be delivered to the manager who is operating that trade in this office, so that each would be advised of the rate situation in the trade over which he has jurisdiction. All reports for the day would be given to the manager of the rate department, and he would pick out the vital matter and make up a central report covering all trades, which he would dispatch every evening to the Washington execu- tive. The manager would also keep compiled in his department records of all Ship- 42 . " OCEAN RATES AND TERMINAL CHARGES. ping Board steamers, separately as to trades, which would give information as to the homeward business in sight or closed for each individual steamer, and the rate at which the operator has closed or been given authority to close. It must then be arranged that operators of ships which come under the jurisdiction of New York would, on hearing from their agents abroad, communicate with the manager of the rate department here, who, after communicating with the Washington executive by telephone, would be in a position to authorize the operator without delay to close up promptly for, or quote immediately upon, any prospective business. As actually, therefore, the working authority and the records would be maintained in New York, there would be no danger of one Shipping Board steamer competing with another for one parcel of cargo, and the lines could be kept very easy from entangling in any way. No. 3. Advisory committee.—It would, to my mind be extremely helpful and would tend to draw those interested in American commerce more closely together if an advisory committee on rates was nominated to meet the manager of the rate depart- ment twice weekly for the purpose of discussion and giving helpful advice. This committee could be made up of three steamship men and three men from export and import houses—men chosen who are interested in and acquainted with the larg- est number of principal trades. These exporters and steamship men will have, of course, opposite viewpoints, but this will be more helpful than otherwise, par- ticularly if an intelligent man is appointed as manager of the department. After all, the entire committee will be working for American interests, and the “happy medium” in a rate situation would soon be arrived at. No. 4. New Orleans organization.—I would recommend that a similar department be organized at New Orleans to take care of the Gulf situation. The department there need only, of course, be on a modified scale, and an advisory committee need not be made a feature. ,” No. 5. Pacific coast.—I am not acquainted with Pacific coast conditions, but un- doubtedly similar information will be desirable from the Pacific coast; and if the Washington executive could receive daily a report which gives the market features for the previous day at Atlantic ports, Gulf ports, and Pacific coast ports, he would have very complete knowledge on which to base his rulings. A PROPOSED ORGANIZATION FOR REGULATION OF RATES AND TERMINAL, CHARGES. As an operator of vessels, the Shipping Board will be a competitor of the companies and individuals engaged in the business of ocean transportation. The private companies and individuals who compete with the Shipping Board vessels may and doubtless will feel that the board itself, or some designated officials of the board not con- nected with the Division of Operations, should hear and determine questions that may arise as to the absolute and relative reasonableness of the charges for the services performed by Shipping Board vessels. It will be felt by the companies and individuals operating as private carriers that the board, or its designated officials, should regulate private carriers and also have power to review the charges that have been fixed for services rendered by Government vessels. Under the act of July 18, 1918, and the President's proclamation of December 3 of the same year—which law and proclamation will presumably be in force for the allowable statutory period of nine OCEAN RATES AND TERMINAL CHARGES. 43 months after the signing of peace—the Shipping Board has large powers and duties as regards the services and charges of companies and individuals owning ocean terminals and performing port and terminal services. The Shipping Board's division or its officials that regulate the rates and services of ocean carriers should also enforce the authority over terminals which the Shipping Board may deem necessary to exercise. It is especially important that the Shipping Board should develop an appropriate organization through which to function in the regula- tion of the services and rates of ocean carriers, as required by the act of September 7, 1916. It was primarily for the regulation of ocean carriers engaged in American commerce and for the development of the merchant marine of the United States that the Shipping Board was created. The fact that the European war was in progress at the time this law was enacted, and the possibility that the United States might become involved in that war, fortunately caused Con- gress to include in the shipping act provisions authorizing the board to construct, own, and operate vessels, the period of operation being limited to five years after the close of the European war. Although the war made the construction and operation of vessels and the control of all shipping engaged in American commerce the first and most important duty of the Shipping Board, the return of peace will give first place to the work of regulating ocean carriers and developing American shipping. It would be a mistake for the board not to organize for the effective enforcement of the regulatory provisions of the shipping act. . - On the 11th of September, 1918, while the war was still in progress and when there was no anticipation of an early armistice, the following recommendations concerning the making and control of ocean rates by the Shipping Board were submitted to the Director of the Division of Planning and Statistics for transmission to the board: 1. That the board establish a Division of Rates and confer upon the division the duty and power— (a) To announce or publish all rates fixed by authority of the board. (b) To call upon the Division of Operations to name to the Division of Rates the freight and charter rates that need to be established,” the rates so named to be subject to such review and amendment as the Division of Rates may deem necessary for the enforcement of the board’s rate policies. In the future, as at present, rates shall be named in the first instance by the Division of Operations, either directly or through the Chartering Committee. , (c) To hear complaints of ocean carriers and of shippers as to freight rates and ter- minal charges. (d) To recommend requisition rates for adoption by the board. (e) To regulate port and terminal charges in so far as may be necessary for the enforcement of section 12 of the shipping act of July 18, 1918. 1 This phraseology might better have been: To obtain from the Division of Operations the freight and charter rates that have been established, etc. 44 OCEAN RATES AND TERMINAL CELARGES. (f) With the cooperation of the Law Division, to enforce established rates and compel observance of orders, rules, and regulations regarding rates. (g) To represent the board in negotiations with foreign Governments, through the State Department and otherwise, concerning rates. - 2. That the Division of Rates be so organized as to obtain the judgment upon rate questions of three men of differentiated technical knowledge. This may be done by providing for a director and two assistant directors, or for a committee of three, the chairman of the committee to act as head or director of the division, and the two other members to have the executive duties that assistant directors would have. If the organization provide for a director and two assistant directors, the three men shall sit as a board or committee to hear complaints as to rates. The foregoing memorandum recommended the establishment of a Division of Rates, headed by a director aided by two assistant direc- tors. Under this plan, the director would have charge of the division as a whole, and would be concerned with problems of administration and questions of general policy. One assistant director would spe- cialize in the regulation of ocean rates; the other assistant director would be concerned with the regulation of terminal services and charges. The three men—the director and two assistant directors— would sit as a board to hear complaints. It is believed that for the present, and for some time to come, the Shipping Board will have so many duties that it can not act as a board to hear and determine complaints as to rates or services. It must provide an appropriate Organization for the regulation of carriers under the shipping act. When the organization above outlined was suggested, in September, 1918, the schedule of rates paid by the Shipping Board for vessels taken upon requisition was under consideration, but requisition rates have since ceased to be of importance. For reasons already stated, it is believed that the functions of rate regulation should be exercised by a Division of Rates which, functioning for the board itself, should act as a semijudicial as well as an executive body for the enforcement of the regulatory provisions of the shipping act. Within the Division of Rates there would be the office of a secre- tary to handle correspondence, keep the files, and to prepare and issue orders. The secretary would report to the director. There would also need to be a Bureau of Research to make such cost inves- tigations and other studies as are needed to secure the information required for the intelligent consideration of rates that come before the Division for Review. A Bureau of Law would be required to enforce the observance by carriers and shippers of the provisions of the statute and of the rates and orders promulgated by the Shipping Board. The chief of the Bureau of Law might well be selected by the board from its Division of Law. Both the bureaus of research and of law would have duties in connection with the regulation of terminal charges and services. OCEAN RATES AND TERMINAL CHARGES. 45 It will be best to determine by experience the administrative organization which the proposed Division of Rates will need to develop in order to secure information regarding terminal facilities and charges at the several ports of the United States, and to enforce the provisions of the statute and the rules of the board regarding terminal services and rates. It is probable that the Assistant Direc- tor of the Division of Rates who has direct charge of terminal matters will need to have at each important port a superintendent whose duty it will be to keep informed as to local conditions; to assist in enforcing the orders, rules, and regulations of the Shipping Board; and to meet carriers and shippers who desire information as to the requirements of the Shipping Board, or who desire to suggest changes in the rules and regulations of the board. It is especially desirable that the Shipping Board should concern itself with the organization of terminal facilities at all important ports of the United States, and should seek to bring about a more economical and efficient performance of port and terminal services. By cooperating with the State and local authorities, and by a wise exercise of the powers possessed by the National Government, the Shipping Board can render a great service to the carriers and shippers engaged in American maritime commerce. The board will here enter a new field of Federal supervision in which there is large opportunity for constructive service. . e' CHAPTER IX. SUMMARY AND RECOMMENDATIONS. The ocean charter and freight rates and port terminal charges during the war have been ascertained, and comparisons have been made with prewar charges. This enables future action of the Shipping Board in making rates and in regulating the charges of carriers and terminal companies to be taken with a knowledge of previous rates. - CONTINUANCE OF RATE CONTROL. The Shipping Board will need to continue its control over charter and freight rates until the serious shortage in shipping tonnage due to the war has been overcome. This control should merge into the regulation of ocean carriers, as provided for by the shipping act of September 7, 1916, or by such legislation as may be enacted to supplement that law. SUPERVISION OF TERMINALS AND REGULATION OF TERMINAL SERVICES AND CHARGES. ! Under the act of July 18, 1918, and the President's proclamation of December 3, 1918, the Shipping Board has complete power to regulate the Services and charges of terminal companies until the treaty of peace has been proclaimed and for a possible period of nine months thereafter. By the shipping act of September 7, 1916, the board has permanent authority over the regulations and prac- tices of those “carrying on the business of forwarding or furnishing wharfage, dock, warehouse, or other terminal facilities in connection with a common carrier by water.” The need for the exercise of this authority is shown by the large variations in charges for similar terminal services within the same port and as among ports; by the lack of coordination of water terminals with each other and with railroad terminals; and by the discriminations in services and charges now practiced in the absence of Government regulation. As Dr. Ruggles states in his report upon terminal charges at United States ports— The big problems in all ports are the same: 1. Adequate facilities should be provided to care for the volume of traffic offered. 2. Private interests should not be permitted to utilize port facilities to their own advantage. •, 3. There should be complete coordination among rail carriers themselves and between rail and water carriers. 46 OCEAN RATES AND TERMINAL CHARGES. 47 The solution of these problems can not be made by the Shipping Board alone. Cooperation with the Interstate Commerce Commis- sion and with local port authorities will be necessary. The investi- gation of terminal services and charges was made to prepare for the beginning of such regulation of the practices of terminal com- panies by the Shipping Board as may be required to enforce the act of September 7, 1916, and such legislation amendatory thereto as may be enacted. REGULATION OF OCEAN-FREIGHT RATES. By the shipping act the board is given authority to regulate the charges of common carriers by water running on regular routes in interstate commerce and is given authority to prevent unreasonable discriminations in the charges and practices of carriers by water running on regular routes in the foreign commerce of the United States. While the act of July 18, 1918, is in force the board will have complete authority over the charges of ocean carriers engaged in American commerce. The charges of coastwise carriers can be regulated as completely as the Shipping Board may deem advisable. Less authority can be exercised over the charges of carriers in foreign commerce. Practically all steamship lines engaged in the foreign commerce of the United States are members of conferences. Through its power to approve, modify, or cancel the agreements made by members of these conferences the Shipping Board possesses power to regulate ocean-line carriers as regards their practices, services, and charges. This power is, moreover, one which the board will be obliged to exercise if it formally approves, modifies, or cancels the agreements which the associations of ocean carriers are required by law to file with the Shipping Board. r In the regulation of ocean rates the Federal Government enters upon a new field and its course must be guided by experience. There will be opposition to all regulation as there formerly was to the regulation of railroads. It may not, probably will not, be necessary ever to regulate ocean carriers as completely as carriers by rail; but the fundamental relations or obligations to the public being the same for carriers by water as for carriers by rail, the Ship- ping Board will necessarily seek to give practical and helpful effect to the same principles that have been followed in working out the regulation of railroads. ORGANIZATION FOR MAIKING OCEAN RATES. It is assumed that the Division of Operations will continue to fix rates for Shipping Board vessels, and it is understood that an organization is being developed with a view to handling the detail work of rate making in a prompt and practical manner. It would 48 OCEAN RATES AND TERMINAL CHARGES. seem advisable that this organization should provide for performing most of the work of rate making at New York, New Orleans, and San Francisco, where the work could be done by those in constant touch with the shippers and carriers. The executive in charge of the work at Washington should have the power, without delay, to approve or disapprove rates proposed by those in charge of the offices at New York, New Orleans, and San Francisco. ORGANIZATION FOR THE REGULATION OF OCEAN RATES AND TERMINAL CHARGES. It is especially important that the Shipping Board should de- velop an appropriate organization through which to function in the regulation of the services and rates of ocean carriers, as required by the act of September 7, 1916. It was for this, primarily, that the Shipping Board was created. The war has temporarily required the board to give its attention mainly to the construction and opera- tion of vessels. The time has now come for the board to organize for the effective enforcement of the regulatory provisions of the shipping act. - It is recommended that a division of rates be established, headed by a director aided by two assistant directors. The director should have charge of the division as a whole, and be concerned with prob- lems of administration and questions of general policy. One as- sistant director should specialize in the regulation of ocean rates, and the other assistant director should be concerned with the regu- lation of terminal services and charges. The three men—the di- rector' and two assistant directors—should sit as a board to hear complaints. The assistant director in direct charge of terminal matters would need to be represented at each important port by a superintendent, whose duty it would be to keep informed as to local conditions and to assist in enforcing the orders, rules, and regula- tions of the board. - It is especially urged that the Shipping Board seek to bring about a more economical and efficient performance of port and terminal services. In this field of Federal supervision the board has a large opportunity for helpful services. - - APPEN DICES TO REPORT ON OCEAN RATES AND TERMINAL CHARGES 118231—19–4 49 APPENDIx I. NovKMBER 8, 1918. MEMORANDUM ON REQUISITION RATES, RECOMMENDING A NEW SCALE. [Memorandum for Prof. Johnson.] The board, in announcing the original requisition scale now in effect, said, on September 27, 1917: All the foregoing rates are tentative. The board will carefully examine the results of operation under the requisition rates and from the results, as certified by expert examiners, will determine upon such revision as fair and equitable treatment of the owners of the requisitioned vessels may require. Revisions will be made. if reasons therefor are found to exist, at intervals of not more than 90 days. At the request of the board, the present investigation was undertaken in order to carry out the plan of periodic revision. It was hoped that it would be possible to obtain complete costs of operation of vessels operated by the board, for the purpose of comparison with such costs of operation as might be obtained from private ship- owners. The Shipping Board’s accounts, however, are not yet in a condition to furnish figures by which comparison can be made with the cost accounts as kept by private shipowners. Accordingly, as far as operating expenses are concerned, the investigation has necessarily been limited to figures furnished by shipowners. The contract department of the Division of Operations has sent to all shipowners who have operated vessels under the time form of requisition charter a form to be filled out showing their operating expenses. The response to this request for information has been unsatisfactory, reports having been received on but few vessels. More reports are expected by the contract department, but it has not been deemed wise to delay this report further on that account. Expenses of operation are, moreover, only a part of the basis for requisition rates. The data on cost of construction of vessels are fairly complete. Practically all the American shipbuilders have furnished to the board the costs of the ships constructed by them. Nevertheless, figures are meager for many classes and speeds of vessels. In spite of the incompleteness of the information upon which the present recom- mendations are based, it is believed that they are the best that can now be made. The rates recommended are, on the whole, higher than the British rates. (The British Scale is appended to this memorandum, for the purpose of comparison.) Revision, in the light of additional information, can, if desired, be made at the end of 90 days. An equitable requisition rate can not be based solely on statistical data. In making up the present scale, it has been constantly borne in mind that the question of how much should be paid to the owners of requisitioned ships is the practical one of what is fair compensation for the property taken. Although it is recognized that the Shipping Board, acting as trustee of public funds in making payments to the owners of requisitioned ships, can not pay more than the just compensation to which the owners are legally entitled, nevertheless what is just compensation can not be deter- mined with mathematical exactness. It is believed, however, that the board will be justified in adopting the scale now recommended. º As a result of the investigation, the following scale of requisition rates is recom- mended for adoption by the board: 51 52 OCEAN RATES AND TERMINAL CHARGEs. NEW SCALE OF REQUISITION RATES. TIME FORM OF REQUISITION CHARTER. Steel cargo vessels and tankers. Per dead-weight . . . - ton per month. Over 10,000 tons dead-weight, time form of requisition charter. . . . . . . . . . . . . . . $5.25 8,001 to 10,000 tons dead-weight, time form of requisition charter. . . . . . . . . . . . 5. 50 6,001 to 8,000 tons, dead-weight, time form of requisition charter . . . . . . . . . . . . . 5.75 4,001 to 6,000 tons dead-weight, time form of requisition charter. . . . . . . . . . . . . . 5.00 3,001 to 4,000 tons dead-weight, time form of requisition charter. . . . . . ** * * * * * * 6. 25 2,501 to 3,000 tons dead-weight, time form of requisition charter. . . . . . . . . . . . . 6. 50 2,500 and under, dead-weight, time form of requisition charter. . . . . . . - - - - - - - - 6. /5 In addition to the above rates, the owner will be reimbursed for all proper war bonuses paid to officers and crews and for all proper increases in wages over the standard wage scale established by the United States Shipping Board as of May 4, 1918. Vessels of speed in excess of 11 knots will be allowed 15 cents per dead-weight ton per month for each knot or part of a knot over 11 knots. Passenger steamers. There will be only one class of passenger steamers, instead of two, as heretofore. Steamers with a capacity of over 75 passengers will be regarded as passenger vessels. If a passenger vessel would receive a greater hire at the rate for steel cargo vessels and tankers, her hire will be paid at that rate. Time form of requisition charter, $8 per ton gross register per month. In addition to the above rate, the owner will be reimbursed for all proper war bonuses paid to officers and crews and for all proper increases in wages over the standard wage scale established by the United States Shipping Board as of May 4, 1918. Wessels of speed in excess of 11 knots will be allowed 15 cents per ton gross register per month for each knot or part of a knot over 11 knots. This allowance will not stop at 15 knots, as heretofore. BAR.E.B.O AT FORM OF REQUISITION CHARTER. Steel cargo vessels and tankers. Per dead-weight - ton per month. Up to and including 11 knots.-------. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3.25 For each knot or part of a knot over 11 knots. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Passenger steamers. Per ton gross register - per month. Up to and including 11 knots. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *ś4, 35 For each knot or part of knot over 11 knots . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 REASONs WHY THE FOREGOING SCALE IS RECOMMENDED. THE SAME RATE FOR OLD AND NEW SEIIPS. Ships are paid the same rate regardless of age or condition. This is true of the requisition scale now in force, and is the British practice. The labor involved in making a separate valuation of each vessel would be so great that the adoption of an average is necessary. . A classification according to the year, or period of years, in which the vessel was built would not be fair because of the large number of vessels which have, in recent years, been reconstructed. Moreover, the charter value of a ship does not ordinarily vary much according to age. DEPRECIATION AND RETURN ON INVESTMENT. The rate under the time form of charter consists of the bareboat rate plus cost of operation and compensation for services rendered. Since, under the bareboat form of . ...--- . OCEAN RATES AND TERMINAL CHARGES. 53 charter the owner is relieved of all operating duties, the bareboat rate is purely for depreciation and return on investment. The figure of $3.35 per dead-weight ton per month has been arrived at by taking 20 per cent per annum of a valuation of $200 per dead-weight ton. Twenty per cent per annum may seem a large return, especially on a valuation as high as $200, but it is believed to be justifiable. Five per cent for normal depreciation, 5 per cent for the heavy depreciation due to the wear and tear of war conditions, and 10 per cent return on investment seems fair and even liberal. No further profits should be allowed, since the Government has assumed all risks. It is thought that the rates may be based on a valuation of $200 in order to give due allow- ance to all the changed conditions produced by the war. If $200 is taken as the basis of the requisition schedule, the owner should not, however, be allowed anything for amortization, since in practically all cases he is being paid a return on a valuation much in excess of actual costs. Reports to the Shipping Board from shipbuilders on 143 requisitioned cargo vessels and tankers, of 11 knots and less, half of which were built since January, 1915, show an average cost of $71. Only 8 of these ships cost over $100. Of these, 3 cost between $100 and $110, 2 cost between $120 and $130, 1 cost $143, and 2 cost between $170 and $180. º An alternative basis of calculation leads to the same figure of $3.35 per dead-weight, von per month. If, instead of taking the valuation of $200, we take $145, which is a liberal figure for the actual construction costs of these ships, and do allow the ship- owners to amortize that construction cost down to $100 in three years from January 1, 1918, we have as follows: - - - Per annum. 5 per cent of $100, for normal depreciation. . . . . . . . . . . . . . . . . . • * * * * * * * * * * * * * * * * * * * $5.00 5 per cent of $100, for depreciation due to war conditions . . . . . . . . . . . . . . . . . . . . . 5.00 10 per cent of $145, return on investment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14, 50° % of $45, amortization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , - - - - - - - - - - - 15, 00) 39. 50 13. 29 The British time-form rate, in the case of tugs and similar craft where the rate is fixed specially for each ship and not in accordance with a general scale, is based on “the actual running expenses plus depreciation at 4 per cent on prime cost, plus 15 per cent on prewar value, or, if acquired during the war, on first cost to the present Owner.’’ * DEPRECIATION AND RETURN ON INVESTMENT—PASSENGER STEAMERS. The old requisition scale now in effect defines passenger steamers as those with a . capacity of over 75 passengers. The present investigation indicates that this classifi- cation is correct. A steamer accommodating less than 75 passengers is substantially a freighter. The bareboat rate for passenger steamers has been obtained by taking 20 per cent per annum on a valuation of $260 perton, gross register. This figure is possibly greater than present reproduction costs, but it bears the same relation to $200 per dead-weight, ton as the construction cost of requisitioned passenger vessels bears to the construction cost of requisitioned cargo vessels and tankers. The shipbuilder's reports above referred to show that requisitioned passenger vessels of 11 knots cost less than $91 per ton, gross. If $71 be taken, for this purpose, as the average cost of cargo boats and tankers, then 71:91=200:260 approximately. It should be borne in mind that this valuation is for a passenger ship making 11 knots or under. Most passenger vessels are of greater speed, and receive an allowance for the greater cost due to that factor. The allowance for speed is discussed below. 1 Per month. 54 OCEAN RATES AND TERMINAL CHARGES. " (The allowance for speed amounts to a return of 20 per cent on a capital investment of $9 per knot perton, gross register.) - It may, nevertheless, be equitable for the board to make an additional allowance in special cases for large, high-class passenger liners and other passenger vessels with peculiarly expensive equipment. - OPERATING EXPENSEs. The old requisition rates now in effect do not differentiate between war zone, and safe zone, and hence discriminate against the owners who may pay war bonuses to officers and crews. The fairest solution seems to be to base rates on costs in safe trades, the Government to pay all war bonuses. - - - - - - The allowances for expenses of operation are based on the reports, already referred to, made to the Contract Department by shipowners operating under the time form of requisition charter. The following reports, all on cargo boats in safe trades, have been received: - Expenses per f dead-weight Dead-weight tonnage of ship reported on— Pºy º:ed ;. º y - including overhead. 11,300----------------------------------------------------------------- 67 $1.95 .9,200----------------------------------------------------------------------- 188 1. 55 ,800----------------------------------------------------------------------- 205 1. 70 §::::::::::::::::::::::::: * - * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * ** ; #; 3.300.....I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I. 230 ' ' ' ' ' ' 2.08 !?, 750----------------------------------------------------------------------- 234 . . . . 2.82 . On the basis of these reports, $3.40 has been added to the bareboat rate on steamers of less than 2,500 tons to cover operating expenses, overhead, and compensation for services rendered; $3.15 on steamers of 2,501 to 3,000 tons; $2.90 on steamers of 3,00 to 4,000 tons; and similar reductions for larger vessels, as follows: - ... i Allowance | Total (i.e., & º: § .* |for operating time-iorm’ Dead-weight tonnage. dº ht expenses (per , rate per €1. In .# }| dead weight| dead weight p ‘’ per month). per month). Over 10,000--------------------------------------------------- $3.35 $1.90 $5.25 8,001 to 10,000--------------------------------------. ---------- 3.35 2. 15 5.50 6,001 to 8,000-------------------------------------------------- 3.35 2.40 5. 75 4,001 to 6,000-------------------------------------------------- 3.35 2.65 6.00 3,001 to 4,000-------------------------------------------------. 3.35 2.90 6, 25 2,501 to 3,000----------------------------------. --------------- 3.35 3.15 6.50 2,500 and under.---------------------------------------------- 3.35 3. 40 6.75 OPERATING ExPENSEs—PASSENGER STEAMERS. The original requisition Scale now in effect gives a higher rate for passenger vessels with a capacity of Over 150 passengers than for those of less than 150 passengers. In the scale here recommended this classification has not been retained. Expenses per ton normally decrease as the size of the ship increases. The data at hand, however, are not sufficient to warrant making a reduction for the larger ships. - f OUEAN RATES AND TERMINAL CHARGES. 55 Expenses of passenger liners, in Safe trades, as shown by the reports to the Contract Department, are as follows: ". . . - . . . . . Bxpenses per Days cov- ton, gross per Gross tonnage of ship reported on. - ered by month, - - report. includin \ - overhead. 10:261----------------------------------------------------------------------- 156 2.40 723........I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I. 87 2.32 6,797------------------------------------------------------------------------ 82 3.37 6,135-------------."---------------------------------------------------------- 189 3,93 8,282------------------------------------------------------------------------ 190 3.18 6,279------------------------------------------------------------------------ 187 35 On the basis of these figures, the rate of $8 in the old scale has been retained. This amounts to an addition to the bare boat rate of $3.65 per ton, gross, for operating expenses. t - . . " - w The allowance for operating expenses, both for passenger and freight vessels, are increases over the old rates now in effect. These allowances have been made upon the understanding that new charter forms will be adopted containing the usual commercial offhire clause, as explained below. - - f - . ALLOWANCE FOR SPEED. . I. Steel cargo vessels and tankers.-The justification for an extra allowance for speed lies (1) in the extra cost of machinery necessary to make a ship move faster than 11 knots, and (2) the hire lost by reason of the decreased dead-weight due to the weight of the extra machinery. 1 - - - . º Under the old scale now in effect, the increase began with vessels of over 11 knots. The correctness of beginning the extra allowance at this point is borne out by this investigation. One hundred and sixteen requisitioned vessels of up to and including 10 knots, on which figures were obtainable, show an average of 0.305 horsepower per dead-weight ton, and 47 vessels of over 10 and including 11 knots average 0.318 horsepower per dead-weight ton, whereas 19 vessels of over 11 and up to 12 knots average 0.409 horsepower per dead-weight ton, and for the higher speeds the increase of horsepower per dead-weight ton is similarly large. . . . . . . . . . . . . . . . . The loss of dead-weight capacity due to greater speed was reached in the following Iſlan IlêI * * - - ** - - - * * * * * * * * * - - * * - Let x=loss in dead-weight of any known ship of over 11 knots. . . . . . . . . . .310=assumed horsepower per dead-weight ton on vessels of 11 knots and less. .2=assumed weight in tons of machinery necessary to develop l horsepower. h.p. =known horsepower of the known ship of over 11 knots. - d. w. =dead-weight of the known ship of over 11 knots. Then x=0.2 horsepower. 0.310 (dead-weight x). ¥ & 0.2 horsepower.- 0.062 dead-weight. • - 1.062 By applying this formula to various typical ships of speeds in excess of 11 knots, it is found that the loss in dead-weight, at $3.35 per month, when distributed over the actual dead-weight of the ship, amounts to about 6% cents per knot per dead-weight ton per month. t • The horsepower per dead-weight ton per knot on requisitioned vessels upon which data were available averages about 0.100. If $50 per horsepower be assumed as the cost of machinery, then $50 X0.100, or $5, is the cost of machinery per dead-weight ton per knot. Using the basic rate of return of 20 per cent per annum, this would be $0.083 per dead-weight ton per month per knot; $0.083 added to 6% cents makes the 15-cent allowance in the Scale. - - 56 OCEAN RATES AND TERMINAL CHARGES. An attempt was made to check this allowance by comparing the construction costs of vessels of the various speeds. These costs, as shown by the shipbuilders' reports already referred to, are as follows: * Average - Number of cost per Speed in knots. vessels dead- reported on. Weight , ton. 12.-------------------------- ---------- ------- ----------------------------------- - 142 $71 13------------------------------------------------------ ------------------------- • 32 - 72 14---------------------------- --------------------------------------------------- 4 87 16------------------------------------------------------------------------------. 4 78 16------------------------------------------------------------------------------- 5 144 Over 16............... * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * 1 83 ... These costs are obviously inconclusive. . They indicate, however, that other factors are as important as speed in effecting cost of construction, and if these other factors are disregarded in the requisition rate, that too much attention should not be given to speed. If $50 a horsepower seems low, in view of war conditions, these costs are a reason for not increasing it. . . " eſ . . . . . . . . . . . . . . * + 2. Passenger steamers.-Since the hire of passenger vessels is paid on their grosston- nage, no allowance should be made for loss of dead-weight capacity due to increased speed. The only factor is an increased cost of engines. The average difference per knot was found to be 0.140 horsepower per ton, gross. At $50 a horsepower, the con- struction cost of machinery would be $7 per knot per ton, gross. At 20 per cent per annum, this would be $0.115 per knot per month perton, gross. In order not to allow less per ton, gross, for passenger ships than per dead-weight ton for freight vessels, 15 cents has been adopted for passenger vessels. . . The shipbuilders' reports on the costs of passenger vessels' capacity are as unsatis- factory as those on cargo boats. They are as follows: wr - - Number of Average Speed in knots. vessels re- cost per - ported on. ton gross. 11------------------------------------------------------------------------------ 2 $89 12------------------------------------------------------------------------------ 1 76 13------------------------------------------------------------------------------ 1 150 14------------------------------------------------------------------------------ 3 139 15.----------------------------------------------------------------------------- 6 132 16------------------------------------------------------------------------------ 2 105 17------------------------------------------------------------------------------ 1. 118 18------------------------------------------------------------------------------|------------|------------ 19------------------------------------------------------------------------------ 2 318 REQUISITION CHARTER, In general the rates have been predicted on the operation of the vessels under the regular requisition charter (U. S. S. B. Charter Form No. 2). As the rate schedule is based, however, on operating expenses in Safe trades, all war bonuses are to be paid by the Government. The old schedule, which contemplated the payment of war bonuses by the owners, was less favorable to ships employed in the trans-Atlantic service than to those employed elsewhere. The time form owners have been allowed a larger differential over the bareboat rate than was allowed under the old schedule, not only because it was thought a fairly liberal compensation should be made for the services of the owners’ organization, but because it is assumed that the time form requisition charter will be modified so as to place the vessels offhire in event of their inefficiency, in accordance with the usual Government form time charter. . OCEAN RATES AND TERMINAL CHARGES. 57 It is understood that the Admiralty Counsel contemplates certain other changes in the requisition charter to safeguard the board’s legal rights. These would not, how- ever, have any direct bearing on the requisition schedule. BRITISH REQUISITION RATES. These are the present British rates, containing the changes effective March 1, 1918: Exchange has been computed. at $4.75 per pound sterling. OCEAN PASSENGER LINE.R.S. Class 1.—Armed merchant crwisers. “B2” Form Charter—with demise to the Crown. Rate of hire per Speed of vessel. . . . ton gross register * per month. * , - * * * . . s. Dollars. 22 knots and over.-------------------------------------------------------------------- 25 5.94. 21 knots and under 22----------------------------------------------------------------- 24 5.70 20 knots and under 21---------------------------------------. * * * * * * * * * * * * * * * * * * * * * * * * * 23 5.46. 19 knots and under 20----------------------------------------------------------------- 22 5. 23 18 knots and under 19...................... * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * 21 4.99 17 knots and under 18----------------------------------------------------------------- 20 4.75 16 knots and under 17---------------............... ------------------------------------ 17 4.04 15 knots and under 16------------------------------------------------------ as tº e s sº º tº a tº w gº 15 3.56 14 knots and under 15------------------------------------------------------ * tº º ºs º º sº m ºn tº º - . 14 3.33 Period—three months certain. If period of employment is in excess of three months rate to be 1s, per ton less in each case in respect of any period in excess of three months. \ - The rates to be reduced by 30 per cent in the case of vessels of 17 knots and over and by 20 per cent in the case of vessels of less than 17 knots, the reduction to take effect as from 1st October, 1915, if the vessels had then been on Service for one year, and from date of completion of one year's service in other cases. Class II.-Wessels conveying troops, etc., for the Expeditionary Forces. * r * * [Expeditionary Force charter.] - Rate of hire per Speed of vessel. ton groSS ºter per month. S. d. Dollars 15 knots and under 17----------------------------------- 's e s = * * * * * * * * * * * * * * * * * * * * * * * * * * 17 6 4. 16 14 knots and under 15---------------------------------------. a ſº e º a tº sº º w tº º ºs sº e e º ºs e s is as a s e = 16 6 3.92 13 knots and under 14........ * * s e º tº ºs ºs ºs e º ºs e º is tº e º ºr gº ºs º ºs º ºs º ºs º ºs º as tº s º is º is tº dº e º ſº as º dº tº e º tº as e º e s tº º & 15 6 3.68 12 knots and under 18----------------------------------------------------------------- 14 6 3.44 Under 12 knots-------------------------------------------------------- - - - - - - tº as as a se sº º sm e 13 6 3.21 If period on hire be less than one month, special terms to be arranged. If period is in excess of two months, rate to be 6d. per ton less in each case in respect of any period in excess of two months. Class III.—Hospital ships and hospital carriers. [“A” form charter.] - - Rate of hire per Speed of vessels. • . ton gross register t * per month. ge S. d. Dollars. 14 knots and over--------------------------------------------------------------------. 17 6 4. 16 Under 14 knots----------------------------------------------------------------------- 16 6 3. 92 Period—three months certain. * 58 OCEAN RATES AND TERMINAL CHARGES. * If period of employment is in excess of three months, rate to be 6d. per ton less in each case in respect of any period in excess of three months, such reduction being applicable to the whole period of employment in the event of its exceeding six months in all. - - - - CARGO LINERS. Class I.--Wessels of 4,000 tons and over. Expeditionary Force charter party.]" . Rate of hire per ton gross register per month. Speed of vessel. - - First; 2 - months. After 2 months. S. d. S. d. Dollars 13 knots and over------------------------------------------------------ 3 * 15 3 14 9 3.50 12 knots and under 13---------------------------------------------------- 14 3 13 9 3.27 11 knots and under 12---------------------------------------------------- 13 3 12 9 3.03 . 10 knots and under 11 - - - - - - - - - - - - - - - - - - * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * - - 12 9 12 3 2.91 Under 10............* - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- * * * * * * * * * * * * ~ * 12 3 11 9 2.79 Minimum period of hire to be one calendar month, but this is to be reduced where owners have been able to employ their vessels before the expiry of a month. - **Vessels of 3,000 tons and under 4,000, 6d. extra. - Wessels of 2,000 tons and under 3,000, Is. extra. ... Wessels under 2,000 tons, 1s. 6d. extra. . . . . ; " ; . . . . Vessels with shelter-deck accommodations not included in the gross tonnage should have special consideration beyond these rates. - - CLAss II.-SUPPLY SHIPs. CHARTER PARTY B (WITH DEMISE TO THE CROWN). . . , t , , The ships to receive the same rates as Class I, with appropriate reduction for differ- ence in terms between A and B form of charter. - The question as to which class individual requisitioned vessels should be placed in should be settled between the Admiralty and the owners. PASSENGER, COASTING, AND CHANNEL STEAMERS. I (a) Passenger and cargo ships—Expeditionary Force charter party.—The subcom- mittee recommend the following scale, based on the recommendations of the ocean passenger liner's subcommittee, with an addition to meet the case of these small ves- sels, which are almost all under 2,000 tons gross and of good speed. - Rate of hire per Speed. - - ton gross ºter per month. S. d. Dollars. 20 4. 15 knots and under 16----------------------------------------------------------------- 0 75 14 knots and under 15----------------------------------------------------------------- 18 9 4.46 13 knots and under 14----------------------------------------------------------------- 17 6 4. 16 12 knots and under 13----------------------------------------------------------------- 16 6 3. 86 Under 12 knots-------------------------------------------- • * * * * * * * * * * * * * * * * * * * * * * * * * * g. 15 0 3.56 oCEAN RATES AND TERMINAL CHARGES. 59 If period of employment is in excess of two months, rate to be 6d. per ton less in each case for any period in excess of two months. º Special arrangements to be made if period of employment is less than one month and the owner on redelivery can not at once utilize his ship. The above scale not to apply to railway ships, which come under the general set- tlement between the Government and the railway companies, or to Some exceptional cases, where a whole fleet of fast ships was requisitioned by Government at one time and special treatment must clearly be accorded. I (b) Cargo ships only—Expeditionary Force charter party.—The subcommittee recommend the scale laid down by the cargo liner's subcommittee for vessels of the size in question, viz: - *. ,- - * - - - - Rate of hire per ton goss - º • , - register per month. Speed. . . - - Tons, 2,000 w and under Tons, under 2,000. 3,000. . . . . . 8. d. S. d. Dollars. 13 knots and over. . . . . . . . . . . . . . . -------------- -------------- -------------- 16 3 16 9 3.98 12 knots and under 13. . . . . . . . . . . . . . . . . . . . . t - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 15 3 15 9 3.74 , 11 knots and under 12---------------------------- ---, - - - - - - - - - - - - - - - - - - - - - - - 14 3. 14 9, ... 3. 50 10 knots and under 11........... ---------.--------------------------------- 13 9 14 3. 3.38 Under 10 knots.--------------------------------!-------------------------- 13 3 13 .9 3.27 ! beyond one month. -' . . . The same stipulation as under I (a) for periods of less than one month. Wessels with shelter-deck accommodation not included in the gross tonnage should have special consideration beyond these rates. - . . II. Admirality charter party B.-For the general run of the coasting and short traders working under this charter party the subcommittee recommend the above Scales, less an agreed allowance per gross ton per month for the cost of crew and stores. - The questions as to which class individual requisitioned vessels should be placed in will be settled between the Admiralty and the owners. . A reduction of 6d. perton to be made in all cases for any period the ship is employed Tank steamers. Dead-weight tons. - - §§ —w S. d. Dollars. 10,001 and over------------------------------------------------------------------------ 9 3 2. 20 9,001-10,000---------------------------------------------------------------------------- 1 9 6 2.26 §öji-ji...I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I.I. 9 9 2. 32 7,00-8,000----------------------------------------------------------------------------- 9 9 2. 32 6,00-7,000----------------------------------------------------------------------------- 10 0 2.38 5,001-6000----------------------------------------------------------------------------- 10 3 2.43 #99.5%:--------------------------------------------------------------------------. 10 6 2.49 Under 4,000---------------------------------------------------------------------------- 11 0 2. 61 The Admiralty agree to refund to the tank steamship owners the extra wages paid to the crews of requisitioned ships in excess of those normally obtained at the begin- ning of the war, as from the date of requisition, and other conditions being agreed to as per Blue Book. - - 60 OCEAN RATES, AND TERMINAL CHARGES. TRAMPS AND SMALL STEAMERS. The following Revised Scale (N. of S. 185/18) for application only in the case of vessels classed as tramps or small steamers has been fixed by the controller of ship- ping, with the agreement of the Chamber of Shipping of the United Kingdom, the rates to come into force on and from March 1, 1918: - - Rate to “ - - , - ſº Feb. 28, Rate from Mar: . Class. 1918 (per | 1, 1918 (per gross - gross regis- register ton). terton). " . Aº ! # 4 7 - sº & ~~~~ - - S. d. S. d. Dollars. 301–450 gross register......... * = * * * * * * * * * * * * * * * * * * * * * * * * - - - - - - - - - - - - - - - - - - - 19 6 29 0 6. 89 451-600, gross register------------------------------------------------------ 18 6 25 0 5.94 601–760, gross register------------------------------------------------------ .17 6 23 0 5.46. 751-900, gross register--------------......... ---. 's e e s a e ºs e is e a s e = * * * * * * * * * * * * * 16 0 21 6 5, 11 900, gross register—1,300 dead-Weight....................................... 15 6 20 0 4.75 1,301–1,000 dead-Weight---------------------------------------------------- 13 6 17, 6 4, 16 1,801–2,200 dead-weight...... ---------------------------------------------- 13 0 17 0 4.04 2,301-3,000 dead-Weight---------------------------------------------------- 12 6 17 0 4.04 3,001-4,000 dead-Weight.--------------------------------------------------. 12 0 16 6 3.92 4,001-5,000 dead-Weight---------------------------------------------------- 11 6 15 0 3, 56 5,001-7,000 dead-Weight.--------------------------------------------------- 11 0 14 0 3.33. Över 7,000 dead-weight.............................I.I.I.I.I.I.I.I.I.I. 11 0 13 6 3.21 NOTE:-The following allowances are still payable in addition to the revised rates: (1) Any allowances granted in consideration of shelter deck or other spaces excluded from the gross register tonnage. Per gross.ton (2) For ships under 4,001 tons dead-weight: - per month. { Double derricks and double winches at each hatch.......................................... .90. Self-trimmers.---------------------------------------------------... ------------------------ 6d. (3) For yessels over 1,300 tons dead-weight: . . . On home ficef Service--------------------------------------------------------------------- ... 6d. On French Service Within coasting limits................................................... 3d. (4) For vessels over 1,300 and under 4,001 tons dead-weight while on fleet service in foreign waters... A 3d. Respectfully submitted. - * . . - WALTER T. FISHER. APPENDIX II. SEPTEMBER 20, 1918. RETURN ON INVESTMENT (INTEREST, DEPRECIATION, AMORTIZATION) TO BE EARNED ON SHIPPING BOARD SHIPS. [Memorandum for Prof. Johnson.] As a result of examination into the subject of what constitutes a proper return on the Shipping Board’s investment in ships, I recommend that $5.10 per dead-weight ton per month be earned in order to cover interest, depreciation, and amortization; i. e., that $5.10 be adopted as the theoretical bareboat rate used in calculating costs in making freight rates on cargo vessels owned or hired by the board. This rate has been arrived at in the manner indicated by the table following. 61 Table showing calculations to determine monthly return on investment in steel cargo steamers. [Cost: $215 per dead-weight ton.] Total amount Monthly *x per annum return which Interest tst d * .#be *be * : * * † tº Interest. On OUDSLand.In earned. On Ships; earned. On Year. Depreciation. Amortization. investment. g owned by p ships owned United States by United Shipping. States Ship- Board. ping Board. First-------------------------------------- 10 per cent of $100, or $10 One-third of $115, or $38.34 5 per cent of $215.00, or $10.75 $59.09 || $4.9 * Second------------------------------------ 10 per cent of 100, or 10 One-third of 115, or 38.33 5 per cent of 166.66, or 8.3 56.67 4.72% I $4.72 Third------------------------------------- 10 per cent of 100, or 10 One-third of 115, or 38.33 5 per cent of 118.33, or 5.92 54.25 4.52 Fourth------------------------------------ 5 per cent of 100, or 5 5 per cent of 70.00, or 3.50 8.50 . 71.) Fifth-------------------------------------- 5 per cent of 100, or 5 5 per cent of 65.00, or 3.25 8.25 . 69 Sixth-------------------------------------- 5 per cent of 100, or 5 5 per cent of 60.00, or 3.00 8.00 .67 Seventh----------------------------------- 5 per cent of 100, or 5 5 per cent of 55.00, or 2.75 7.75 . 65 Eighth------------------------------------ 5 per cent of 100, or 5 5 per cent of 50.00, or 2.50 7.50 .63 Ninth------------------------------------- 5 per cent of 100, or 5 5 per cent of 45.00, or 2.25 7.25 | . . 60] . . Tenth------------------------------------- 5 per cent of 100, or 5 5 per cent of 40.00, or 2.00 • 7.00 -č) .. 2 .57 Eleventh---------------------------------- 5 per cent of 100, or 5 5 per cent of 35.00, or 1.75 6.75 | . 56 [ s Twelfth---------------------------------- ,- 5 per cent of 100, or 5 5 per cent of 30.00, or 1.50 6.50 .54 Thirteenth-------------------------------- 5 per cent of 100, or 5 5 per cent of 25.00, or 1.25 6, 25 .52 Fourteenth-------------------------------- 5 per cent of 100, or 5 5 per cent of 20.00, or 1.00 6.00 .50 Fifteenth---------------------------------- 5 per cent of 100, or 5 5 per cent of 15.00, or .75 5. 75 . 48 Sixteenth--------------------------------- 5 per cent of 100, Ör 5 || 5 per cent of 10.00, or .50 5.50 .46 Seventeenth------------------------------- 5 per cent of 100, or 5 5 per cent of 5.00, or .25 5.25 .44) 100 100 115.00 1 War average. ? Average. Average bareboat rate paid for tonnage requisitioned by, and chartered to United States Shipping Board Average theoretical bareboat rate which must be earned on United States Shipping Board ships owned or hired Or, with an allowance for contingencies and in round numbers * * * * * * * * * * * * * * * * * * * * * * *, * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * s e s m is * s m = < e < * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * = - e. e. e = * * * * * * * * * * * * * * § OCEAN RATES AND TERMINAL CHARGES. w 63 1. Amortization.—After the war, when normal conditions are restored, it will be impossible for ships to earn more than a normal depreciation allowance. Accordingly, it is necessary that some of the high costs of building ships, due to war conditions, be gotten back by the Government during the period of the war. The return which is thus obtained may be called an amortization allowance. One hundred dollars a dead-weight ton—one-third more than the prewar cost—seems a fair estimate of the post-war cost of constructing steel cargo vessels, and three years a safe period to allow for the duration of war conditions, including the period of actual war, peace nego- tiations, bringing home troops, and the continuance of high freight rates and values thereafter. This means that we should plan to amortize each year for the next three years one-third of the difference between the actual cost of ships and $100 per ton. This same recommendation has been made by Marwick, Mitchell, Peat & Co., account- ants, in a report to the Director of Operations on Depreciation and Amortization, dated June 24, 1918, and by Messrs. Lockhart and Houston, of the Division of Opera- tions, in their comment upon that report. ... 2. Interest.—The cost of capital to the Government, including the expenses of floating loans, is probably not far from 5 per cent. The United States is charging the Allies 4% per cent for loans now being made to them and would be justified in charging them 5 per cent on capital in ships as part of freight rates based on cost. 3. Depreciation.—By depreciation is meant the yearly loss in value, due to wear and tear, not compensated for by current repairs. The rate of depreciation to be adopted is largely determined by the number of years the ship will last. As to the probable life of ships, opinions differ widely, some estimates being as low as 10 years for steel cargo vessels. Under war conditions, ships are driven harder and are not treated so well as they are in peace times, and hence will have a shorter life. Furthermore, the depreciation rate will be fast during the war. This fact suggests that the solu- tion of the depreciation problem lies in charging a heavy depreciation during the war. Mr. Frank S. Martin, chairman of the Board of Survey and Consulting Engi- neers, has suggested that the rate of depreciation be 10 per cent per annum during the war and 5 per cent per annum thereafter; and this suggestion has been adopted with the exception that, in order to allow still further for war conditions, these per- centages have been taken each year as percentages of the total valuation and not of the residual value (i.e., of the post-war cost of new tonnage, and not of the inventory value each year after the previous year’s depreciation has been deducted). That will result in writing off the entire value of the steel cargo boats at the end of 17 years, assuming three years of war conditions. * * Marwick, Mitchell, Peat & Co., in their report already referred to, have expressed depreciation as a percentage of the total cost, including the amount which is being amor- tized. However, when a certain part of the total cost is being written off by amorti- zation, and a certain other part—all the rest—is being written off by depreciation, it seems clear that the annual depreciation allowance is not related to the amount that is written off by amortization, and that it is misleading to express depreciation as to a percentage of an amount which includes the amount to be amortized. In the foregoing table, depreciation is expressed as a percentage of the estimated post- war cost of construction; i.e., of $100, * * * * 4. Construction costs.-Freight rates are made for the future. When a rate is once decided upon—and this is especially true of such a rate as that of wheat from the Pacific coast, which is the result of conference and agreement with important inter- ests and with governmental bodies—it is not advisable to change it for a number of months. For the purpose of making freight rates, therefore, the cost of ships during the coming year is the important thing and not the cost of ships already delivered. Hence, Marwick, Mitchell, Peat & Co.'s estimates of the cost of particular ships already delivered, as stated in the report above referred to, are probably not so sig- 64 OCEAN RATES AND TERMINAL CHARGES. nificant for the present purpose as the estimates made by the Fleet Corporation in Philadelphia, as of August 15, 1918, of the costs of ships in the following classes: Class 1. Partly built ships taken over and completed. Class 2. Tonnage contracted for up to August 15, 1918. . Class 3. Additional program for completion up to December 31, 1919. These estimates (based on Emergency Fleet Corporation Confidential Table of Estimated Construction and Expenditure, 100–815–1) shows the following costs: STEEL CARGO vessELs. . Average Dead-weight | COSt. per tons. ton. " Class 1------------------------------------------------------------------------ 1,897, 126 $174.00 Class 2------------------------------------------------------------------------ 8, 152,605 197.00 lass 3------------------------------------------------------------------------ 331,449 223.00 All-Steel cargo vessels---------------------------------------------------- 10,381, 180 193. 50 WOODEN CARGO VESSELS. Class 1------------------------------------------------------------------------ None. --------- --- Class 2------------------------------------------------------------------------ 2,217,750 $191.00 Class 3------------------------------------------------------------------------ 611,000 168. All-wooden Cargo Vessels------------------------------------------------------ 2,828,750 186.00 The wooden tonnage must be averaged in some way with the steel, since freight rates will be the same on wooden ships as on steel ships. Wooden ships depreciate faster than steel, and in the long run they will probably be no cheaper than the steel ships. Hence if $215 be taken to be the proper valuation of steel ships, a return on this amount may also be taken as a proper return on wooden ships. To illustrate, if we should depreciate and amortize $186, the average cost per dead-weight ton of wooden ships, by the method of writing off $85* by depreciation and the remainder ($101) by amortization, and assume a life of seven years as Messrs. Lockhart and Hous- ton have done, a table made out on the same principles as the table for steel ships would be as follows: - - Table showing calculations to determine monthly return on investment in wooden cargo * - Sté07mérS. [Cost: $186—7-year life.] Total * Deprecia- Amortiza- * |ºl eprecla- Amortiza- WºłłC monthly Year. tion. tion. Interest. mºst he ºf . earned per rate. ' a ſlidll Iſl. * 1------------------------------------------ s17.00 $33.67 $9.30 $59.97 .00 2------------------------------------------ 17.00 33. 67 6.77 57. 44 4. 79 3------------------------------------------ 17.00 33. 66 4. 23 54, 90 4. 58 4------------------------------------------ 8.50 ------------|------------|------------|------------ 5------------------------------------------ 8.50 ------------|------------------------|------------ 6------------------------------------------ 8.50 ------------|------------|------------------------ 7------------------------------------------ 8.50 ------------|------------|------------|------------ 85. 00 101.00 ------------|------------------------ 1 $85 has been selected because it bears the same ratio to $100—the estimated nage—as $186 does to $225. postwar cost of steel ton- OCEAN RATES AND TERMINAL CHARGES. 65 The figures for the theoretical bareboat rate resulting from the foregoing calcula- tion—i.e., $5 and the average figure of $4.79 for the three war years—are so near the steel figures that it is simpler and approximates the same thing to disregard the wooden tonnage for the purpose of making freight rates, and base rates solely on steel costs. This means, in substance, that the fact that wooden ships are cheaper than steel does not warrant making lower freight rates than would be made on Steel alone, and, on the other hand, an estimated life of seven years for wooden ships is so low that we would not be justified in charging higher rates than those based solely on steel tonnage. The assumption of a 10-year life for wooden vessels would produce the following results: - Table showing calculations to determine monthly return on investment in wooden cargo 8teamerS. [Cost: $186—10-year life.] Total D ia- A t º ºl. 7. eprecia- Iſl()I{ IZ8- . . . . whic monthly Year. tion. tion. Interest. mile jº. - earned per rate. &nnum. !------------------------------------------ $13.80 $33.67 $9.30 $56.05 $4.68 *------------------------------------------ 13.08 33.67 6.96 53. 71 4.48 3------------------------------------------ 13.08 33.66 4.63 51.37 4. 28 4------------------------------------------ 6.54 |------------ 2.29 8.83 74 9------------------------------------------ 6.54, ------------ 1.96 8.50 71 °------------------------------------------ 6.54 |------------ 1.63 8. 17 68. 7------------------------------------------ 6. 54 |------------ 1.31 7.85 65 8------------------------------------------ 6.54 ------------ . 97. 7. 51 62 9------------------------------------------ 6.53 |------------ . 61 7. 14 59 10------------------- !--------------------- 6.53 |------------ . 33 6.86 57 85.00 101.00 ------------|------------|------------ The cost figure of $215 per dead-weight ton, which has been taken for steel cargo steamers, seems, all things, considered, a fair valuation. It is $8 less than the Fleet Corporation now estimates that future costs will be; but, on the other hand, it is $21.50 more than the cost of the 13,000,000 tons for which contracts have been let, even with the future program averaged in. Much of this tonnage contracted for will of course not be completed for a long time. One hundred thousand tons of Japanese ships (two years old or less) cost $243 per dead-weight ton, but these are offset by 245,000 tons of new construction in Japan costing $175 and by 132,000 tons of Great Lakes steamers costing $150. It is estimated that the 300,000 tons of concrete ships will cost $140 per ton, but their future freight-earning power is so problematical that a reduction of the $215 figure on their account would hardly be justified. The charter hire. paid for the 435,000 tons (in commercial service) of requisitioned and chartered shipping, bareboat, must be averaged with the return on owned ves- sels in order to obtain the average theoretical bareboat rate which must be earned on Shipping Board cargo ships to enable the Government to break even. The cost of this hired shipping, largely Dutch, is $7.05 per dead-weight ton per month. If these 435,000 tons are averaged with a total program of owned tonnage of, say, 14,000,000 tons (Fleet Corporation, steel and wood, 13,209,930; Japanese, 345,000; Great Lakes, 132,000; concrete, 300,000; total, 13,986,930) at $4.92 per dead-weight ton per month, the result will be only $5. This figure is low in view of the fact that $7.05 is now being paid for 435,000 tons of shipping in actual existence, whereas the 14,000,000 tons are largely accounted for by ships yet to be built. On the basis of 7,000,000 tons, however, the average would still be as low as $5.08. To provide this slight margin above $5, $5.10 has been recommended. 118231—19—5 66 OCEAN RATES AND TERMINAL CHARGES. The rate department of the Division of Operations is now basing rates upon a theoretical bareboat return of $2.66; i. e., $2.66 per dead-weight ton per month is allowed to cover interest and depreciation, and no allowance is made for amortiza- tion. Recognizing that $2.66 is too low, the rate department adds to its final total costs for the various trips a large sum for contingencies. This allowance is, however, probably not large enough to bring the theoretical bareboat rate up to $5.10. The adoption of $5.10 as the basic return on Shipping Board ships does not involve paying an equally high return to the owners of requisitioned vessels, for the following FG3 SOIAS: 1. The Shipping Board must earn enough to enable it to meet the high cost of foreign requisitioned and purchased ships. Dutch ships cost $8.31 per month, and the Japanese two-year old ships cost $243 per dead-weight ton. 2. The Shipping Board must earn enough to enable it to meet the high cost of the ships which it has constructed. These costs are much higher than the costs of build- ing the American ships which have been requisitioned. A theoretical bareboat rate for tankers and refrigerator ships may be worked out on the same principles as have been applied to cargo boats. Respectfully submitted. WALTER T. FISHER. APPENDIx III. - SAMPLE CARDS FROM THE FILE OF CHARTER RATES-SAMPLE SHEETs FROM THE SUMMARIES OF TRIP CHARTER AND TIME CHARTER RATES, - Charter rates. Trade: West Indies—United States. Commodity: . . . . . . . . . . . . Delivery—range: Delivery North Hatteras. - Date charter * - Trip or - - * * or Steam e fººd period. Charter rate. Ship. - Elag. Tonnage. . Charterer. Nov. 1, 1916. - 9 months...| 37/6 per D. W. T. Huftero. American. - 898.N. R.T. Steam...] Bennett— per month. Hvoslef ^. Co. Remarks: Charter rates. Trade: United States—West Indies. Commodity: Coal. Delivery—range: Delivery Guantanamo. Date charter & - º ... Charter rate. Ship. Flag. Tonnage. * Charterer. Jan. 28, 1915.. º Bal- $2.75 per D. W. T. Beacon...] Norwegian. 715 N. R.T. Steam... Munson Co. IIIlOI’e. * Remarks: Ocean charter rates. [Rates between designated districts.] (Export: Steam. Commodity, cotton. Jan. 1, 1914, to Aug. 30, 1918. Rates in United States currency. United States Shipping Board rate investigation.) 1915–TRIP CHARTER. One way. i.º. , Gross form. ‘. . e Per 100 lbs. | Per 100 lbs. South Atlantic-United Kingdom (east coast).................................... $1.61 ------------ South Atlantic-French Atlantic.------------------------...--------------------- - 1.77 ------------ South Atlantic-Holland.-------------------------------------------------------- 2.34 ------------ South Atlantigº Mediterranean. ------------------------------------------------- 1.80 ------------ Gulf—United Kingdom (east coast) ---........................................... 1.28 ------------ Gulf–French Atlantic----------------------------------------------------------- 1.51 ------------ Gulf-Holland------------------------------------------------------------------- 2.40 l.----------- South Atlantic-Scandinavia.---------------------------------------------------------------- $1.9 0--------------------------------------------------------------------------|-- - - - - - - - - - - I 19,466.66 South Atlantic—Holland---------------------------------------------------------|------------ 2.40 Gulf—United Kingdom (east coast) ---------------------------...----------------|-----------. 1. 40 Gulº-Scandinavia---------------------------------------------------------------|------------ 1.92 Gulf—Germany - - - - - - ------------------------------------------------------------|------------ 3. 30 Gulf-Mediterranean-------------------------------------------------------------|------------ 1.44 Gulf–French Atlantic-----------------------------------------------------------|------------|. 1.86 1 Lump Sum. 67 68 OCEAN RATES AND TERMINAL CHARGES. (Jan. 1, 1914, to Aug. 30, 1918. Rates in Un Ocean charter rates. [Rates between designated districts.] 1914—TIME CHARTER. ited States currency. United States Shipping Board rate investigation.] i. Gross form. D w T _{ri form, & W ºf º = i. e. One way. Hºp Period. D. W. T. ºp per º per * Per day Per month, month * | month. United States-----------------|---------|--------------------- $35,000.00 |. . . . . . . . . ..] Europe (1). United States-l----------------|---------|----------- $1,000.00 |...........|......... Europe (2). ! . - United States----------|-----------|----------|----------. $0.72 ſ ; (3). United States----------|-----------|----------|----------- .86 Europe (4), United States-l-------------------------|---------------------|----------- . 75 United King- dom (2). United States--------------------------|-----------|----------|----------- 1. 14 United King- . dom. (3). 4. p United States---------------------|----------|----------- .84 United King- dom. (5). United States-l.--------|-----------|----------|----------- 1. 26 United King- dom. (6). South Atlantic- |--------------------------------|------------------------------|----------- 1. 26 Mediterranean. South Atlantic— i.---------------|----------------|--------- $19,466.00 ----------|-----------|-........ Scandinavia. South Atlantic- ----------------|----------------|---------|-------------------------------. 5. 28 Denmark. North Atlantic-----------------|----------------|--------------------|----------|----------. 2.76 Scandinavia. North Atlantic- |----------------|----------------|--------- 15,000.00 ----------|-----------|--....... Mediterranean. * North Atlantic— i.---------------|---------------- $7.20 -----------|---------------------|--------- Fº Atlantic. 0- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 94, b00. UU - - - - - - - - - - - - - - - - - - - - - - - - - - - -.. 52,560.00 APPENDIX IV. REPORT UPON THE INVESTIGATION OF OCEAN FREIGHT RATES AT ATLANTIC AND GULF PORTS, FOR THE YEAR JULY 1, 1917, TO JUNE 30, 1918. - By Dr. T. W. WAN METRE. * NEw York, December 16, 1918. Prof. EMORY R. JoHNson, United States Shipping Board, Washington, D. C. My Dear Prof. JoHNson: On June 18, 1918, at your request, I undertook an investi- gation of the freight rates charged on traffic exported from the Atlantic and Gulf ports of the United States to foreign countries during the year ending June 30, 1918. It was understood that, to whatever extent possible, I should secure information con- cerning import rates. I am now ready to make a report on this investigation. The plan of work adopted was as follows: (1) Steamship companies at all Atlantic - and Gulfports were to be asked to report, upon special forms, their export rates on a selected list of commodities, and any importrates of which they might have knowledge. (2) A card index was to be made of all rates reported. - This plan has been carried out and the work is completed. It was your thought, as it was mine, that it would be unnecessary for the Shipping Board to make any formal order upon the steamship companies for a report covering rates charged. We decided to depend entirely upon the willingness of the companies to cooperate in a work which was to be of service to the Government. That we were not mistaken in feeling that we could depend upon voluntary cooperation has been indicated by the almost unanimous response to the requests which were sent out. Of the companies operating vessels during the year ending June 30, 1918, to which requests for rates were directed, only two refused to respond. These two were the Luckenbach Steamship Co. and the United States & Brazil Line, both of New York. Requests for rates were sent to the following companies: New York: New York—Continued. American Line. Houlder Weir & Boyd. American Union Line. American Cuban Line. Atlantic Transport Line. Anchor Line. Bacon, Daniel. Barber Steamship Line. Benham & Boysen. Booth & Co. Bliss Dallett & Co. Castriotis & Co. Cosmopolitan Shipping Corporation. Cunard Line. Elwell & Co. (Fabre Line). Federal Line. French Line. Funch Edye & Co. Furness Withy & Co. Globe Line. Grace, W. R., & Co. Holland-American Line. Houston Line. Italia-America Line. Job, W. S., & Co. Kerr Steamship Corporation. Lamport & Holt'Line. Lloyd Brasileiro. McDonnell & Truda. Moore & McCormack & Co. (Com- mercial South America). Munson Line. Nafra Co. National Steam Navigation Co. of Greece. - New York & American (South) Line, Norton Lilly & Co. Ocean Transportation Co. Otrophon Steamship Corporation. Oriental Navigation Co. Pierce Bros. Red Star Line. - 69 70 ocEAN RATES AND TERMINAL CHARGEs. New York–Continued. Richards, C. B., & Co. Raporel Steamship Line. South American Steamship Corpora- tion. Spanish Royal Mail Line. States Marine Commercial Co. Scandanavian-American Line. Taya. Jose & Sons. Trinidad Line. - Universal Transportation Co. United States & Australasian Co. United Fruit Co. • * Ward'Line. Wardrop West African Line. Wessel Duval & Co. White Star Line. Wilson Line (Sanderson & Co.). Winchester, J.H., & Co. Ybarra Line. - Each request consisted of the following: Savannah: Strachan Shipping Co. Mobile: S. A. Le Blanc. New Orleans: - Cuyamel Fruit Co. Le Blanc, Alfred. Richard Meyer & Co. George Plant. . Ross & Heyn. Wolvin Line. Vila & Co. South Atlantic Steamship Line. Norton Lilly & Co. -- Galveston: - United Steamship Co. Fowler & McVitie. Wm. Parr & Co. Thomas Rice. S. Sgitcovich & Co. Philadelphia: Gailey Davis & Co. Baltimore: Garland Steamship Co. 1. A letter indicating the nature of the request. 2. A list of instructions. 3. A list of commodities upon which export rates were desired. 4. A number of blank schedules upon which rates were to be reported. A copy of the schedule used in reporting rates is attached to this report, marked “Exhibit A.” The use of this schedule made all reports uniform in character and greatly facilitated the compilation of the card index. The “instructions” for the guidance of those requested to report rates are reproduced in Exhibit B. The list of commodities upon which rates were requested was as follows: I. General cargo. II. Special commodities: 1. Agricultural machinery. . Alcohol. . Automobiles. Barb wire. Binder twine. Brass. Coffee. . Coffee bags. . Copper. 10. Corn sirup. ll. Cotton. 12. Dried fruits. 13. Flour. 14. Flour bags. 15. Grain. 16. Iron pipe. 17. Leaf tobacco. 18. Tubricating oil. II. Special commodities—Continued. 19. Machinery. 20. Oil, refined. 21. Provisions. 22. Rails. 23. Rosin. 24. Sewing machines. 25. Spelter. 26. Steel plates. 27. Tin plate. 28. Wax. 29. Zinc. III. Complete or bulk cargo: 1. Cotton. Coal. Flour. Grain (oats, wheat, etc.). Lumber. Oil, barrel. . Oil, case, i OCEAN RATES AND TERMINAL CHARGES. 7I As the reports were submitted by the steamship companies, the rates were trans- scribed upon cards. A sample card, marked “Exhibit C,” accompanies this report. The blank spaces, for information other than the statement of rates, were included in the card at your request. - - The card index which has been compiled gives fairly complete information con- cerning export freight rates from the Atlantic and Gulf ports of the United States during the year ending June 30, 1918. A large number of import rates are also included in the file, separately indexed. The card index has been made in duplicate, the cards arranged according to the following divisions and subdivisions: I. Ports of United States, alphabetically arranged. A. Continents, alphabetically arranged. - 1. Foreign ports, alphabetically arranged. (a) Commodities, alphabetically arranged. In order to give Some indication of the general level of freight rates during the year covered by the investigation, I have transcribed on Summary sheets the high, low, and the monthly average rates on certain commodities between selected ports of the United States and selected ports in foreign countries. A sample of the summary sheets is appended as Exhibit D. The summary sheets do not in any way represent all the rates contained in the card index. They have been prepared to indicate in a brief manner the character of the work done during the investigation. - A study of the rates Submitted by the various companies shows that there was a wide fluctuation of commercial freight rates during the year ending June 30, with the trend of changes steadily upward. * I desire to express my sense of obligation to Mr. Harry Fowler, of Caldwell & Co., for his constant counsel and assistance during all phases of the investigation. I am also under obligation to Mr. Aaron Houtman, of the Shipping Control Committee; Mr. Walter Moore, of Lunham & Moore; and Mr. Armstrong, of Loeser, Robinson & Armstrong, for advice and counsel in devising the schedule upon which rates were reported, and in compiling the lists of commodities and of steamship companies. Mrs. Elsa Potter, the office manager, is entitled to a special word of acknowledgment for her capable and earnest work during the entire course of the investigation. During my enforced absences from the office, Mrs. Potter has carried on the work in a com- pletely satisfactory manner. Miss Wadley, the other office assistant, has done her work faithfully and efficiently. May I acknowledge my indebtedness to you for the help you have given in solving tle many problems which arose during this work? Very truly, yours, T. W. WAN METRE. ExHIBIT A. Ocean Freight Rates. [United States Shipping Board rate investigation.] (Rates in United States currency unless otherwise indicated.) * * * * * * * * * * * * * * * * * *s s = e as º is we tº as sº tº sº e º sº, º º * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * High. Low. Monthly average. Per (cu. ft., 100 lbs. High. LOW. Monthly average. High. Low. Monthly average. * = e º º sº º sº * Commodity: ... . . . . . * * * * * * * * * * * * * * * * * * sº sº as sº ºr s sº * * * * * * * * * * Year. High. Low. Monthly average. * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * = sº a sº a tº as a º º is * * * * * * * * * * * * * * * * * * * * * * * * * * *s s = * * * * * * * * * * * * * º ºs e º ºs º º sº sº, sº sº, º m + = * * * * * * * * * * * * * * * * * * * * * * * * * * 1917 1918 1917 1918 1917 1918 1917 sº e º e º ºs º º as ºs º ºs ºs ºs º º tº se & as * * * * gº tº gº ºn tº gº & s * = e º a sº dº is * I e º is tº dº º sº tº & & Cº. º. º. ºº & # * tº sº as º as sº sº sº * = e º º ºs = ºr gº is me as & e º me * * * * * * * * s sº ºr tº º ºs e as * e º sº * * * * sº s º ºs º º sº se * * * gº tº e º ºs * * * * * * * * gº º ºs º ſº gº tº s = ~ * * * * * * * * * * * * * * * * * * * * * * s sº e º 'º º º is º º is gº º sº tº as * * * * * * * * * * * * * * * * as º º º & º 'º -> is sº e º sº sº º is es º gº º º sº sº gº tº tº gº º sº as as tº * tº ſº tº 4- tº- tº tº as sº * * * * * * º, ſº gº º sº º ºs & * * * * * * * * * * * * * * * * tº sº º º ºs º gº º * * * * * * * * * * * * * * * * * e tº * * * * * * * sº º sº sº sº sº as * > * * * * * * * * * * = * * * * * * * tº gº & º ºs e dº º & * * * * * * * * * Per (cu. ft., 100 lbs. ton, etc. * * * * * * * * * gº sº as sº as ºs º º º s sº sº tº * * * * * * * * * * * * * * & e ºs º ºs as a dº sº * * * * * * * * * * * * * * * * * s = g º ºs º 'º º ge s s a tº sº * * * * * * * * * * as º ºs e º ºs º ºs * * * * * * * * * * sº as ºr * * * * * * * * * * * sº sº & ºn tº a tº º * * * * * * * * * * * * * * * * * sº gº º sº e º ſº tº º s & sº e s sº & º * s º ºs e e s sº * * is sº ºn as wº, as * * * se as as e s tº sº, º º as s as ºn e s sº * * a & sº as a se is º º s sº a sº º is tº ºn º * = an e º e º 'º º es e º & eº as sº * * * * * * * * * * * * * * * * * * * * tº º ºs º e º is gº tº * = * * * s is º Aº sº m º ºs s is e º 'º' * * * * * * * * * * * * * * * * * * * * e s º is as * * & s is tº a ne sº * * * * * * * * * º gº º ºs º dº º sº. ge º 'º º ºs º º sº * = tº e º º ºs & & e º ºs º gº tº * º nº e s sº * * * - - - - - - - - gº tº gº tº º sº º ºs s & e ºs º ºs º ºs sº º is sº º sº tº º * * * * * * * * sº e s sº * * * * as a º ºs º ºs º º - - - - - - - - s sº sº e s = * * as e º ºs e º 'º - = e º a sº sº º is as sº sº e s m = * * * * * * * * * s sº sº e s e º 'º * * * * * * * * s sº as ºn as ºs º º s & sº ºn as * * * * * * * * * * * * = e º ºs e º 'º' a g º as tº e º & as ºn as a m = * * sº e º is as sº e ºs * † m e º º sº º º, e = * * * * * is gº ºs º º is sº & sº e g º ºs sº * * * * * * * * * * as sº nº sº * * * * e ſº e º e s tº * • * * * * * * * sº º ºs e º e º ºs * * * * * * * * se as e º sº * * * as sº e ºs as sº º º * * * * * * * * sº e º 'º a º 'º º ge sº e s sº use * * sº a sº e º 'º, º a * * * * * * * * * * * * * * * * tº e º sº e º 'º º sº as e s is is º ºs * * * * * * * * sº gº sº s ºr e º º as sº e º s = * * * * * * * * * * * * * * * * * * tº º sº, e = * * * se s ∈ sº as º º ºs *...* e = * * * * sº gº as e º gº º ºs ºs - - - - - - - - - sº gº º ºs e º 'º fºº # => is a s as º is sº es & mº º sº sº gº tº º e & * * * * * * * * * s = e º ºs e ºs º º sº e º 'º gº ºs º º º tº gº tº º ºs º ºs º mº e º ºs ºs sº ºn sº º ºs. * * * * * * * * * s = ºs º º ºs s = * - - - - - - - - - - - - - - - - - - a sº e s as tº sº º ºn e = * * * * * * * a e º e s tº gº tº * s sº me s is a s = * is e m s m e º º * sº g sº me tº gº as * * º, º gº ºr se is is º º s sº as sº e s sº * * * * * * * * * * * * * * * * * * * * * * * * sº * * * * * * * * * * * * * s tº º ºs º ºs we dº * sº e º gº ºs ºs e º 'º' sº tº gº tº dº s is º º * * * * * * * * * = * * = * * * * * • * * * g e s sº * * * * * * * * * * * * * * * * * * * * * * * = * * * & e º e º & E * • e ∈ E tº * * * as a sm as sº * * * * * * * * * * * s ºr e º e º 'º º sº e º ºs = < * * sº e º ºs s m = * s sº º ºs º ºs º ºs as as s a ºn tº * * s sº as s sº * * * • * * * * * * * s = e º º sº º º s e º ºs e º 'º - is me s sº e = * * • e º sº sº * * * as a s = sº sº * * • * * * * * * * & e ºs ºs s tº * * * * * * * * * * • * * * * * * * * * * * * * * * tº e º º ºs s = & * * * * * * * * tº sº º sº e ºs & 8 * * * * * * * * & s a s is sº s > * * * * * * * * sº º te sº e s we sº as sº e º ºs e º 'º * * * * * * * * ge e s e º is tº * * * * * * * * * a sº º ºs º ºs º ºs e e s m º ºs º º - - - - - - - - * * * * * * * * as e a s is sº * * a. * * * * * * * e sº sº e º is º º º, as & sº tº as * * * * * * * * * * tº g º gº tº gº º tº as º ºs s = * * * * * * * is º gº tº s ºn tº sº, º sº * * as e ºs e º ºs º ºs es º gº tº ºn tº e ºs * * * *s s = * * as sº * * * * * * * * * * * * * * sº º ºs is ºs é à tº tº gº º º sº e º & us * * * * * ºn tº sº s: º ºs e & s & tº * * = * * * * * * * sº sº sº e º se tº e sº • * * * * * * * * * * * * * * * * * • * * * * * * * * as sº gº ºn as sº & º & • * * * * * * * * as s as as º sº sº º º * * * * * * * * * * * * * * * * * * sº sº, s = * * * * * as as is sº e º ºs º ºr sº sº se m gº tº sº sº tº es e º is ºn e s = * a g º ºs º ºr sº * * as º ºs º º tº º sº º * * * * * * * * * as sº º sm is a s is s * = * * * * * * * * - - - - - - - - - ge º sº º & ºr e º & sº e = * * * * * * s: º ºs ºs º & sº sº * * * * * * * * * * * * * * * s a e & as & sº º sº *s & & ſº tº º gº º ºs º ºs º is º, º sºn & e º & & e * * * g º º E & tº * * * e º º ºs e º sº is sº sº º sº * * * eºs tº as dº * * * * * is tº º & & º º sº * * * * is ºs s & tº s sº e º ºs & sº sº sº us * * * * * * * * * * * * * * * * * * tº e e s = * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * as ºr e º & & s is sº se sº º ºs ºs º ºs e sº es e º ºs ºs & sº º ºr • * ~ * ~ * - - - * = * * * * * * * tº º º & º º sº, sº tº tº º sº º ºs º ºs º ºs g is is e s & sº a sº * * * * * * * * as * * * * * * * * * * * * * * * * = * * * * * * * * * * R cae)• • • • • • • • • t>• → • • • • • • • • • • • • • • • • • • • • • • æ • • • • • • • • • • • • • • • • • • • • - - - … • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •- • • • • • • • • • - • • • • • • • • - - - - • • • • = - - - - - … • æ - - - - - ， «» - «æ • • • • • • • • • • - - - - -> • • • → - - - - - … • • • • - - - - • • • • → - - - - -> «» «-» ， • • • • • • • • • • - - - - - - - - - • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - - -> • • • • • - • • • • • • • • • • • • • • • • • • - • • • • • • • • - - - - = s • • <- - - • • • • • • • • • • • • • • • • OCEAN RATES AND TERMINAL CHARGES. • • • • • • • • • - - - • • • • • ► • • • • • • • • • « «» «» • • • • • • • • • • • • • e « - - - - - • • • • • • • • • • • •* • • - - - - - • • • • • - - - - • • • • ∞ → • • • • • • • • • • • • • • • • • - - - - - - -> -> • • • • • • • • • = - - - • • • • • • - - - --- « «» «） *** • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - - - - … • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - - - - - • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • → - • • • • • • • • • • • • • • • • • • - • • • • • • • • • • • • • • • • • • • • • • • • • «-» ， «» º «c» e œ è © © ： «» e «» ， «» & § = − → • • • • • • • • • • • • • • • • • • • • • • • ► • • • • • • • • • • • • • • • • • • • • • - • - - - - - - • • • • • • • • • • • • • • • • • • • • • • • • • • • • - - - - -------- • • • • • • ► ► ► ！= -> «-» - … • • • • • • • • • • • • • • • • • - - • • • • • • • • - • • • • • • • ■ ■ • • • • • • • • • • • • • • - - - - - - - - • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - • • • • • • • • • • • • • • • • - - - - • • • • - • • • • • • • • - «-» «…» «… • • • • … - - -> • • • • • - - - - ~ ~ • • • • • • • • • • • • • • • • - • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - - - - - - ， -s æ, ， ， • • • • • - → • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - - - - - - -， → • - - - … • • • • • • • • • • • «» • • • • • • • * • • • • • • • = • • • • • • • • • • • • • • • • • • • • • ► -> «+» • • •- «-» - «…» «…» «…» • • • • • • • • = ∞ → • • • • • • • → → → → → - • • • • • • • • • • • • • • • • • • • • • • • • • • • • - - - - • • - - - - - - • • • • • • • • = ， ！» «… • • • • • • • • • • • • • • • • • • • • = e− → • - - - - ！= <-» ， • • • • • • • • • • • • • ± • • • • • • • • • • • • - … • • • • • • • • • • • • • - - - - • • • • • • • • æ æ ， æ • • • • • • • • • • • • • • • • - - - - • • • • • - - - • • • • • • • • • • • • • • • • • • • • • • • • • • • • - - - - • • • • - - - - • • • • • • - • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - - - - • • • • • • • • • ！ …» «…» «…» «… ：-） • • • • • • • • • • • • - - - - • • • • • • - - - • • • • • • • • = æ æ - - - - - ■ ■ ■* • • • • • • • • • • • • • • • • • • - - - → → → → → → → • • • • • • - … • «» ， º «» ） » • • • • • • • • • • • • • • • • • • • • • → • • • • - - - • → → • • • • - • • • • • • • • - - • • • • • • • • - - → → → → → → → → → - → • • • • • - - - -} = … • • • - - • • • • • • • • • • → ← → • • • • • • • • • • • • • • - - • • • • • • - - - → → → → → • • - • • • • • • • • • • • • • • • • • • • • • • • • • • - - • • • • • • • • • • • • • • • • • - - → • § → • • • - - • • § € ← → • • • • • • • • • • • • • • • • • • • • • • • • • • • • - - - - • • • • • • - - • • • • • • • • • • • • • • • • • • • • • • •- - - - --> • • • • • • • • • • • • • • • • • •- • • • • • • • • • ----- - - - - • • • • • • • - - • • • • • • • - - - • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - - • • • • • • • • • - • • → • • • • • - • • • • • • • • • • • • • • • • • • • • • • • • - - - • • • • • • - - - • • • • • - - - - • • • • • • • - - • • • • • • • • • • • • • • • • • - • • ► ► - - - - - • • • • • • • • • • • • • • • • • • «» ， čº & © • • • • • & & * • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •- • • • • • • • • • • • • • • • • • • • • • • • • • • • • - • • • • • • - - - • • • • • • • • • • • • • • • • • * -> • • • → • • • - • • • • • • • • • • • • • • • • • - • • • • • - - - • • • • • • • • • • • • • • • • • • • • • • • • • • •- •.• • • • • • • • • • • • • • • • •- • • • • • • • • • • • • • • • • • • • • • • • • •=. - - • • • • → → → • - - • • • • • • • • - • • • • • • - - - • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - - - -s • • • - - - • • • • • • • • - • • • → • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • → • • • • - • • • • • • • • • • • • • • • • - - • • • • • • • • - → • • • • • • • - - - - - - • • • • • • • • • • • • • • • & & & & & � �…» «…» • • • • • • • • • • • • • • • • • • • • • • • • • - • • • • • • • • • • • • → • • - - -） ∈， √≠ ≤ ∞ → • • • • • • • • - • • • • • • • • • • • • • • • • • • •■ ■ ■ ■ ■ --• • • • • • • • - • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - • • • • • • • - • • • • • • • • • • • • •* • • • • • • • • • • • • • • • • • • • • • • • • • • - - - • • • • • • • • • • • • • - • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - • • • • • • • •- • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - • • • • • • - • • • • • • • - • • • • • • • •» • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • «» «» & � � � � �* • • • • • • • • - - - • • • • • - • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - - - - - * * * «-» ， • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - • • • • • • • • • • • • • • • • • • • • • • • - - - • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - - - - -， → • • • • • • • • • • • - • • • • • • • • • • • • • • - - - - • • • • - • • • • • • • - - - -> • • • • • - • • • es œ • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • & & & & & & & & e º • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - - - - - - - - - • • - - - - - - ~~ • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - - - - - - • • • • • • • • • • • • → → → → • • • • • <！-- - - -> • • • • • - - - - - - • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - - - - … • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • → → - - - - • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - • • • • • • • • - - - - - - - - - - - - - - … • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • & & & & & & & & & * º *■ ø •• • • • • • • - - - - - • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - - - - - - - • • <！-- - - - - - - • • • • • • • • • • • • → • • • • • • • • • • • • • • • • • - - - - - - - • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • → - - - • • • • • - - - - - • • • • • • • • • • • • • • • • • • • • • • → → → → → • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - - - - • • • - - - - - • • • • • • • • • • • • • «… • • • • • • • • • • • • • • • • • • • •- - - • • • → - - - - - - - - • ！• • • • • • • • • ！• • • • • • • • • • • • • • • • • • • • - - - • • • • • • • • • • • • • → → → → → → → → → • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • æ, ， ） --- « » «» ， • • & & Ō Ō «» «» «» ， « » r. º « • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - - - - - - - - • • • •- - - - - • • • • • • • • ± 4ſ， − • • • • • • ！ - -> • • • • → → → • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • → → → → → → - • • • • • • • • • • • • • • • • • • • • • • • • • - - - - - - - • → → → → → → - • - - - - - - - • • • • • • • • • • • • • • • • • • • • • • • • • • • • - - • • • • • • • • • • «） • • • • • • • • • • • • • • • → • • • • • • • • • • • • • • • • • • - - - - - • • • • • • • • �» * → • • • • • → ← → • • • • • → → → → → - - - • • • • • • • • • • • • • • • • • • & & & & & & & • * * * * * • • • • • • • • • • • • • • • • • • • • I • • • • • • • • • • • • • • • • - • • • • • • • • | | | • • • • • • • • • • • • • • - - • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - …» • • • • • - - - • • • • • • • • • • • • • • • • • • • • • • • - • • • • • • • • • • • • • • • • • • • • • - - - - - - - - - - - • • • «… --★ → • • • • • • • • • - •* • • • • - - - • • • • … - - - • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - - - • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - • → • • • - - - • • • • • - - - • • • • • • • • • • • • • • • • • • • • • • - • • • • • • • • - • • •= • • • - - • • • • • • • • • • • • • • • • • • • • • - - - • • • • • • • - • • • • • • • • • & -3 • • • • • • • • • • • • • • • • • • • • • • • • • • • - - → • • • • • - - • ） es • • • • • & & & & & ſº ou « » e a es * * • • • • • • • • • • • • • • • • • • • • • - - - º ） • • •- - • • • • • • • • • • • • • • • • • • - - ， ， ） → • • • • • • • • • • • • - - -， ， ， ， - - - • → • • • • • • • • • • • • •* • • • - - -> • • • • • • • • • • • • • • • • - - … • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - • • • • • • • • - - … • • • • - …» -> -> • • • • • • • • • • • • • • • • • • • • • • • • • • - → • • • • - - - • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - → • • • • • - - • • • • • • ► - - • • • • • • - • • • • • • • • • • • - - es œ • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - • • → → → → • • • • • • • • • • • - • • • • • • • • • • • • • • • • • - • • • • • •- - - • • • • • • • • • -- «-* * = <= <！ --★ → • → → • • • • • - - - - • • • • • • • • • • • • • • • • • • • • • • • • • • → ∞， ∞, ∞; ∞, ∞， ∞ « • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - • • • • • • • • • • • • • • • • • • • • • • • • • • - • • • • • • • • • • • • • • • • • • • • • • • • • • - • • • • • • • • - • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • § € ± • • • • • • • • • • • - -> • • • • • • • • • • • • • • • • - • • • • • • • • • • • • • • • • • - … • • • • • • • - - - • • • • • • - - - • • • • • • • • • • • → • • • • • • • • • • • • • • • • • • • • • - • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - - - • • • • • • - - -> • • • • • • • • • • • • • • • - … - * * * • • • • • • • • • • • • - - --- «-» ， «» - - - - - - - -> • • • • - • • • • • • - - • • • • • • • • • - • • • • • • • • • • • • • • • • • - - - • • • • - - • • • • • • • • • • • • • • • • • • * * & & & & • • • • • • • • • • • • • • • • • • • - - - - • • • • - • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - • • • • = • •= • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - - - - - - - - - • • • • • • • • • • • • • • • - - - • • • • • - - - - - • • • - • • • • • • • - • • • • • • • - • • • • • • • - • • • • • • • - - … • • • • • - - - • • • • • - • • • • • • • • • • • • • • • - • • • • • • • • • • • • • • • - - - - • • • • - • • • • • • • • • • • • • • • * • • • • • • • • • • • • • • • - → -+ → • • • • - • • • • • • • - - - - - ， ， ， - - - ， • • • • - - - • • • • • - - - -> = e− → • - - … • • • • • - • • • • • • • • • • • • • • • - → • • • • • • - - - - «… • • • • • • • • • • • • • • • • • • • � � � � è • • © • • • • • • • • • • • • • • • • • • • • • • • • • • - - - - • • • • • • • • • • • • • • • • • • • -------- • • • • • • • • - - - - - - - • • • • • • • • • • • • • • • • • • - - -> • • • • • - - - - • • • • - - - - …» «… • • • • - - - - • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • - • • • • • • • • • • • • • • • • • • • • - - - -, → e- → - • • • • • • • • • • • • • • • - - - -> • • • • • → - +→ • • • • • • • • • • • • • • • • • • • • • - - - - - - - - - - - - -> • • • • • • • • • • • - - - - - æ æ * • • • • • • • • - - - - … • • - -'• • • • • • - - - - -> • • • • • • • • • • • -- «- - - - • • • • - - - - • • • • • • • • • • • - - - - - - - • → → → → → → • • • • • • • • • • -- - - - - • • • - - - - - - * * - - - - - • • • • • • • • • • • • • • • • • • • • • • • • • • • 8I6I LĪ6I 8I6T /T6I 8I6I ZI6I 8I6I 1.I6I 8I6T ZI6I 8I6T ZI6'ſ 8I6I • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • ExHIBIT A-Continued. Ocean Freight Rates–Continued • (United States Shipping Board rate investigation.] (Rates in United States currency unless otherwise indicated. ) Bigh. Low. Monthly average. Per (cu. ft., 100 lbs. |Bigh, LOw. Monthly aVerage. Per (cu. ft. ióðibs. ton, etc. To– Year. Low. Monthly average. ( ‘Per ióðiðs. High. LOw. Monthly aVerage. * † º 'º ºp sº ſº tº a º ºr º: º is sº tº tº g º gº e * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * 1917 1918 1917 1918 s sº sº tº º sº me s * * * * * * * is º, º gº º sº tº gº tº “s º e s sº e s sº • * * * * * ~ * º gº e º e º 'º º sº gº tº Gº º sº gº gº sº gº tº º sº º sº º gº tº º sº tº tº º gº ge tº gº tº gº tº gº º * * * * > < e & e tº sº º sº e º gº * * g º & sº tº º a s tº gº is tº gº tº ºs º ºs º & º ſº ge * * g º ºs e º ge * * * * * * * * sº º gº º sº tº sº e sº º sº º ºs º º º tº as tº sº tº sº s sº * tº sº gº tº sº tº gº tº º tº º sº sº sº tº gº tº * * s s gº sº º ºs º is sº º sº gº º & º º sº tº º ºs º ºs º gº tº º s = º gº is tº gº º sº & ºm s tº dº e º tº sº s tº e º ºs º gº ºn tº e - sº e ºs e º us & s = e º sº º ºs º º “º º ºs ºs º º ºs º º * * *ge sº ºn tº º ºs ºn * * * * * * * s tº * * * * * * * * * tº º sº º ºs º º sº * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * s e e s tº s as tº sº * * * * *s º ºs º is * * * * * * * * * * * * * * * * * * s sº sº ºn se e s = ºr : • - - - - - - - * = s. sº sº ºr ºs e is * tº es e º sº sº gº º * * * * * s sº sº gº * * * * * * s = e sº tº sº sº gº tº º ºs * * * * * * * * • - - - - - - - as as gº º tº e s tº gº ºs e º sº gº º º s sº º º sº e º ºs sº º º ſº º gº tº $º tº gº tº e º sº º Pº * * * * * * * * * * * * * * * * sº tº º º is gº & º s sº º sº tº sº, º gº * * * * * * * * *s º ºs ºr tº gº º º sº º sº tº sº as º º as as tº ºn sº e s we s is as º gº tº sº as * * * * * * * * • - - - - - - - tº se as sº tº gº sº º tº º ºs º gº tº tº & fºr tº sº tº gº tº sº º * * * we tº we as s gº º ºs ºº e º 4-3 & sº tº e º ºs tº e ºs e e s ºr e º 'º º * * * * * * * * e tº sº dº º ºs º º * * * * * * * * gº tº º ºs e º sº º sº e º ºs º ºs e º ºs g is tº º ºs e º ºs ºs & sº * * * * * * * * * * * * * * * > s sº e º sº sº gº º tº us tº e º sº sº s º ºs is * * * * * * * * * * * * * * * * * sº º sº sº sº sº tºº & Eº * * * * * * * * * * * * * * * * * tº tº gº º ºs e º 'º * * * * g º & º * * * * * * * * e º 'º & sº * * * * º gº tº sº ºn tº gº as e s sº gº sº gº º * * * * * * * * s sº sº we as º ºs & * * * * * * sº -> * * * *s & se sº tº º as ºs e º ºs sº º & ſº * * * * * * * * * * gº º ºs º ºs º gº tº es tº dº sº º sº º sº tº - - - - - - - - - s ºr tº gº E sº e := & ge º sº º ſº º sº º ºs sº º sº gº tº E & º & • * * * * * * * * sº e s tº se w as * * gº º sº º is is ºr * * • * * * * = = • * is tº sº sº tº tº & tº e * * * sº sº * * * * • * e º ºs e º s º «s a sº ſº e º ºr e = * * * * * * * * * as tº us as * s tº gº sº s tº as as e s tº s gº * tº e s sº º sº as gº * * * * * * * * * * e º sº, sº * * * * s is sº s º gº sº tº e * * * * * * * * e * * * * * * * is ge * * * * * * * * * - - - - - s • * = s sº e s sº sº dº e ge ºr e º 'º as sº tº sº tº * * * * * * * * * sº sº gº sº sº sº º sº as º ºs ºº & gº sº sº sº e º 'º sº sº gº ºs ge & gº & tº dº º ºr * * e º 'º º is is * * * * * * * * s sº sº º ºs º º is & * * * * * * > E = * & ºs = * * * * * * * * * * * * * * * * * * * * * * * * * > * * * * * * * * * * * * * * * we sº wº ºr e º gº is sº is is sº us is sº º s = - * * * * * * * * * * * * * * * * * * * * * * * * * * * tº º sº * * * * * * *s º ºr º e º sº ºn as S OCEAN RATES AND TERMINAT, CIHARGES. 75 ExHIBIT B. INSTRUCTIONS. In reporting rates upon the accompanying form, please be guided by the following rules: - 1. Give rates between specific ports, filling in the names of ports from which traffic moves in the blank spaces provided at the top of the schedule, and names of ports to which traffic moves in the blank spaces on the left-hand margin. Give rates between all ports of the United States and foreign ports which your company serves. 2. Do not give rates for more than one commodity, except for general cargo, on a single sheet. . Give the name of the commodity in the space provided in the upper left-hand corner of the schedule. - 3. Give import rates, where available, upon the leading articles of traffic imported from each country from which you have transportation service. 4. In the column headed “per (cu. ft. 100 lbs. ton W/M, etc.),” give the unit upon which rate is quoted. The amount of the rate will then indicate so much per 100 pounds or per ton (gross or net), or per cubic foot, or per ton W/M, etc. 5. To obtain the monthly average rate on any commodity, compute first the average for each month of the quarter and give the average of these averages. . 6. Give Sailing vessel rates, when available, on Separate sheets, marking such sheets with the words “Sailing vessel rates.” 7. Give complete cargo rates (export) if any have been employed for commodities listed under “III: Complete or bulk cargo.” 8. Give export rates on the articles enumerated in the “List of commodities.” EXHIBIT C. To: -------------------- From? -------------------- tº Rate - Monthly Cost of Service. recommended. Year. Quarter. Power. High. Low. average. Unit. - Amount. Unit. Amount. Unit. July, August, Steam................... ~|~|~|~!…..… September. º w 1917 Sail-----|----------------|---------|------------------|--------|----------|-------- October, Steam--|--------|--------|----------------- November, Remarks. December. Sail-------------|--------|------------------------------------------------------ January, Steam... ----------------|- - - - - - - - - 1 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -* * * * * * * February, March. Sail-----|--------|--------|---------|--------|---------------------- --------------- 1918 - April, May, Steam-----------|-------------------------------------------------------------- June. Sail---------------------|---------|--------------------------------------------- Rates quoted by: Commodity: Agricultural machinery. Steam. [United States Shipping Board Rate Investigation.] ExHIBIT D. Ocean freight rates. (High, low, and monthly average rates between designated ports for the year, July 1, 1917, to June 30, 1918. Rates in United States currency.) From- New York. Savannah. New Orleans. - Monthly - e Monthly * Monthly 3 -i-. |Monthly TO- High. Low. average. Per High. Low average. Per— | High. Low. aVerage. Per— | High. Ilow. aVerage. Per— South America (East Coast): - Rio de Janeiro. -- - - - - - - - ------- $60.00 $30.00 | $43.50 Ton----|----------------|----------------------------------|------------------|----------------|--------- Santos-------------------------| 50.0 50.00 50.00 ---do------------|--------|-------------------------------------------|-----------------|--------|--------- Buenos Aires------------------- 75.00 30.00 42.00 ---do------------|--------------------------|--------|-----------------|-----------------|--------|--------- Montevideo. ------------------- 75.00 || 30.00 40.50 ---do--------------------|--------------------------|------------------------------------------|--------- South America (West Coast): Callao-------------------------- 28.60 | 18.75 24.00 |...do----|--------|--------|---------|---------| $18.75 $18.75 ſ $18.75 | T/WM ---------|--------|--------- Iquique----------- ------------- 26.40 26.40 26.40 ---do----|--------|-----------------|---------|--------|-----------------|---------|--------|--------|---------|--------- Antofagasta ---------- - - - - - - - - - - 26.40 || 26.40 26.40 ---do----|----------------|------------------|- • * ~ * - I • * * * * * * * : * ~ * * * * * = • | * ~ * * * * - - - ) • * * * * * * * | * * * * * * * * * * * * * * * ~ * = Valparais0---------------------- 26.40 26.40 26.40 ---do----|---------------------------------- 18.75 | 18.75 18.75 T/WM.]--------|--------|--------- West Indies, Caribbean: Habana------------------------ 12.50 | 12, 50 12.50 | T/WM-1--------|--------|---------|--------- 12.50 | 12.50 12.50 | T/WM---------|--------|--------- Ringston.---------------------- 12.00 | 12.00 12.00 T/WM-1--------|--------|---------|--------- 12.00 | 12.00 12.00 | T/WM---... * - - I - - - - - - - - - - - - - - - - - Trinidad----------------------- 10.00 8.00 8.25 | T/M----|--------|--------|---------|---------|--------|--------|---------|---------|--------|--------|--------- - Curaçao------------------------ 18.37 15.75 16.40 T/M.---|--------|--------|---------|---------|--------|--------|---------|---------|--------|--------|--------- Scandinavian ports: - 50 5 45 C c. t * : * ~ * 1. 1.2 1. Ul. It - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Christiania..................... { ##| ##| #}|{}}...]:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: - or 1. 50 | 1. 1. Ul. It - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Gothenburg-------------------- #| || ##|{}}...]:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: 1. 50 1. e Žll. It - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Copenhagen.-------------------- 3.00 3.00 i 3.00 100 lbs---------|--------|---------|-----------------|--------|---------|-----------------|--------|--------- England, Western France: Liverpool---------------------- 120.00 40.00 60.00 | TOn.... $1.10 || $1.10 $1.10 Cu. ft--|--------|--------|---------|---------|--------|--------|--------- London------------------------ 60.00 40.00 50.00 T/M----|--------|-----------------|---------|--------|-----------------|---------|--------|--------|--------- HaVre-------------------------- 110.00 60.00 75.00 T/M----|--------|-----------------|---------|--------|--------|---------|---------|--------|--------|--------- Bordeaux--------- ... * * - - as a º ºs º- - - - - - 143.00 88.00 112.00 | TOn------------|--------|---------|-------------------------|---------|---------|--------|--------|---------|--------- Spain, Portugal, Southern France: - - Lisbon------------------------- 145.75 || 110.00 | 130.00 || T/M----|--------|--------|---------|------ - - - i - - - - - - - - - - - - - - - - - - - - - - - - - I - - - - - - - - - - - - - - - - - - - - - - - - - I - - - - - - - - - Cadiz------------ * * * * * * * * * * * * * * * 47.00 46.00 46.50 T/M----|--------|--------|---------|---------|--------|--------|---------|---------|--------|--------|--------- BarCelona---------------------- 52.00 || 52.00 52.00 | T/M----|--------|--------|---------|---------|--------|-----------------|---------|--------|--------|--------- Marseille----------------------- 120, 00 | 33.00 55.00 'T/M----'--------'--------'-------------------------------------------'---------'------------------------- 3. - - - e º as a se - - - - - - * * * * * * - - - - - - South and East Africa: CapetOWn---------------------- Port Natal.--------------------- Delagoa Bay------------------- Algoa Bay--------------------- Asia º: Coast): Hongkong - - - - - e s sº - - - - * * * * * - - - - - - - - sº e s - - - - - - • * * * * * * - * * * * * * * * * * * * * * * * - - - - - - * * * * * * * * * * * es e º - - - - - - * * * - - - - - - us e º 'º - - - - - e se e º 'º - e. w - * * * * * * * * * * * * * * - - - - * * * * * - - - - * * * * - - - - - * * * * * * - - - s sº º ºs º ºr - - - * * * * * * * * * * * = ** - - - - - * * * * * * - - - * * * * * * * * * sº e s s e º sº - - * * * * * * * * * - * * * * * * - - - -º º – º - - - - - - - - - * * * * - - - - - s sº sº a º 'º - - - * * * * - - - - - sº e se e e º 'º - - - º ºs e s - - - - * * * * * * * - - * * * sº º ºs º º “ * * * * * * * * - * * * * * * * - - • * * * * * * * - - - - - - º 4- - - - * * * * * - - - e º is sº º • * - - - - - - s & sº * * - - - - tº s sº º ºr - - - - * * * * - - - - - * * * * * - - - - • = • * * * * * * * * * *- :- - - - - * - tº * * - - - - - Manila------------------------- Asia (Indies): Bombay----------------------- Calcutta------------------------ Singapore---------------------. Batavia------------------------ Australia, New Zealand: Freemantle--------------------- Sydney------------------------ Melbourne--------------------- Auckland.--------------------- * * * * * * * * * * * * * * * - - - * * * * * s s” - - - - - e. e. e. e º sº a • * * * * e se e º ºs e - * * s s e a wº e º - * * * * * * - - - - * - tº s sº * * * * * * * * * * * - I - e º ºr a se tº º - I - * * * * * * * - * * * * * * * - - - - - w e s sº • * * * * * * s * * * * * * * * * * * * * * * * * * * - - - - - - e sº º ºr ea º º 'º as as e º se e s - - - * * * * * *- - - - * * * * * * * - - * * * * * * * * * e is a s e º 'º & - * * * * * - - - - • * * * * * - - - • * * * e º 'º ſº º - - - e < * * * - - * * * * * * - - * * * * * * - - - e º ºs º ºs - * * * * * * * - - - - - - * * º, e = ** - - - - - * * * * - - - - - * * * * * * * * * sº e º e º - - - - * * * * * * * * * * * * * - - - - - * * * * * - - - - * * * * * * * - - • * s e º ºs e - - * * * *s e = - - - tº sº as s ºr - - - - - - - - - - - - - - - - e º sº tº - - - gº tº sº tº ºr • * * * * * * * * - - - - - - ºn - - - - - - - * - - - - - - - - * - - - - - - as - - - - - - - - • * * * * * * * * • ** = * * * * * * * * g º º sº º sº a is APPENDIX W. REPORT UPON THE INVESTIGATION OF FREIGHT RATES AT PACIFIC - PORTS. By ALTHEA. M. BEHRENs. [Memorandum to Dr. Emory R. Johnson.] The investigation of freight rates charged on export and import commodities of the Pacific coast during the year ending June 30, 1918, was begun in June, 1918. The freight rates were those of companies carrying traffic between the Pacific ports and ports of Mexico, Central America, South America, the Indies, Australia, and New Zealand. The first step in the investigation was the Securing of freight rates from the steam- ship companies for the year ending June 30, 1918. This was in charge of Mr. W. D. Benson, of Seattle, Wash., a task for which he was admirably fitted because of his position as secretary of the Pacific Coast-Oriental Tariff Bureau; his own thorough knowledge of rates, and his experience in the shipping business. - Export rates proved easier to secure than import rates, since Mr. Benson could make personal application for them at the home offices of the steamship companies. The export rates of the tariff bureau were secured; also the rates of individual companies. The following are the companies included in the tariff bureau: The Bank Line (Ltd.). Ocean Steamship Co. (Ltd.) Canadian Pacific Ocean Services (Ltd.). Osaka Shosen Kaisha. China Mutual Steam Navigation Co. H. F. Ostrander. (Ltd.). | Portland and Asiatic Steamship Co. Great Northern Steamship Co. The Royal Mail Steam Packet Co. Hamburg-American Line. Frank Waterhouse & Co. Java-Pacific Line of the Java-China-Japan | Trans-Oceanic Co. Line. Dodwell & Co. Nippon Yusen Kaisha. The companies not members of the tariff bureau who reported rates are: Caldwell & Co. * Oceanic Steamship Co. Dodwell & Co. (Ltd.). Pacific Steamship Co. Robert Dollar Co. - Pacific Mail. East Asiatic Co. - South American Pacific Line. A. M. Gillespie (Inc.). Struthers & Dixon (Inc.). W. R. Grace & Co. Toyo Kisen Kaisha, James Griffiths & Sons. Trans-Oceanic Co. Mitsui & Co. (Inc.). The import rates were obtained through correspondence with foreign offices, and the reports are not so complete as those for exports. The steamship companies from which import rates were received are the following: Caldwell & Co. H. F. Ostrander. Robert Dollar Co. Pacific Mail Steamship Line. East Asiatic Co. (Ltd.). Pacific Steamship Co. A. M. Gillespie (Inc.). Struthers-Dixon Co. James Griffiths & Sons. Toyo Kisen Kaisha. Java Pacific Line. Trans-Oceanic Co. Mitsui Co. - Frank Waterhouse & Co. Osaka Shosen Kaisha. Oriental Tariff Bureau. The second step was the transcribing of the rates which had been sent in by the steamship companies from the record sheets to cards. (See Exhibit C, attached to 78 OCEAN RATES AND TERMINAL CHARGES. - 79 Appendix IV.) Cards were made from all records with the exception of the records of the Mitsui Co., whose rates were received too late for compilation. The cards were then filed, one file for exports and one for imports, with commodities alphabetically arranged under foreign ports. The arrangement in the files is as follows: I. Canadian ports: - III. (C) Central America and Mexico: Vancouver. Acajutla, Salvador. Victoria. Acapulco, Mexico. II. United States ports: - Amapala, Honduras. Portland. - Balboa, Panama. ‘San Francisco. Champérico, Guatemala. Seattle. Corinto, Nicaragua. Tacoma. La Libertad, Salvador. III. (A) Asia and the Indies: La Union, Mexico. Calcutta, India. Manzanillo, Mexico. Colombo, Ceylon. Mazatlan, Mexico. Hongkong, China. * . Punta Arenas, Costa Rico. . . Kobe, Japan. Salina Cruz, Mexico. Manila, P. I. - San Blas, Mexico. Moji, Japan. San Jose, Guatemala. Nagasaki, Japan. . . . San Juan del Sur, Nicaragua. Samarang, Java. | "(D) South America: - Shanghai, China. * - , Antofogasta, Chile. Singapore, Straits Settle- Arica, Chile. - mentS. - - Bahia, Colombia. Vladivostok, Siberia. Buenaventura, Colombia. Yokohama, Japan. • V Callao, Peru. (B) Australasia: Guyaquil, Ecuador. :Australia, Sydney. Mollendo, Peru. New Zealand, Wellington Valparaiso, Chile. . The final step in the work was a summary of the export and the import rates. This was made on large sheets, one sheet for each commodity. (A sample sheet, marked “Exhibit A,” is attached to this report.) Only exports from and imports to San Francisco, Seattle, Tacoma, and Vancouver were summarized, and only a limited and representative number of foreign ports was taken into consideration. A distinction was made between subsidized and nonsubsidized steamer rates, so that a commodity for which both rates were given had a sheet for each set of rates. The only subsidized steamers were those aided by the Japanese Government. The only sail rates are to Manila, and are few in number. It was not deemed necessary to summarize them on separate sheets, but the Sail rates are included with appropriate designation in the summary of rates for steamers. FACTS ASCERTAINED. I. The rates show a steady rise throughout the year with a more marked advance for the last three months than for any other time, especially marked in conference rates where the rates for the first three-quarters are fairly stationary, but sudden advance comes for the last quarter. - II. A comparison of subsidized and nonsubsidized rates shows that the great majority of subsidized steamers were enabled by this help from the Government to carry their cargoes at lower rates than those not so aided. III. War surcharges of 25 per cent were often added in the case of Mexican and Central American exports and imports, this surcharge being 50 per cent at Balboa. IV. Sail rates are to be had only in the case of exports to Manila. 1 Export rates were received to Central American, Mexican, and South American ports only in the case of trade from San Francisco and Seattle, the trade from Portland, Tacoma, Vancouver, and Victoria being with Asia and the Indies. This is true also of import rates. Commodity: General merchandise. ExHIBIT A. Ocean freight rates. [United States Shipping Board rate investigation.} Steam. High, low, and monthly average rates between designated ports for the year (July 1, 1917, to June 30, 1918. Rates in United States Currency.) From ------------------------------ San Francisco, Cal. Seattle. Tacoma. Vancouver. gº Monthly g | Monthl tº - || Monthl & Monthly - To— High. Low. aVerage. Per— High. Low. sº Per— | High. Low. ; Per— High. Low. average. Per South America (East coast): ------|--------|--------|---------|---------|--------|--------|---------|---------|--------|--------|---------|---------|--------|-----------------|--------- South America (West coast): --- Buenaventura------------------ 21. 25 | 21. 25 21.25 WIM- - - 21.25 || 21.25 21.25 | WIM---|--------|-----------------|---------|----------------|---------|--------- allao-------------------------- 27.50 25.00 26.25 WIM...] 27.50 25.00 26.25 | WIM---|--------|--------|---------|---------|--------|--------|---------|--------- Arica.-------------------------- 25.00 25.00 25.00 WIM. . . 25.00 25.00 25.00 WIM---|--------|-------- S.-- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Valparaiso.--------------------- 32.50 | 27.50 30.00 W/M...] 32.50 27.50 30.00 WTM-----------|--------|---------|---------|----------------|---------|--------- Mexico (West coast): - Mazatlan----------------------- 15.00 | 12.50 13. 13 WIM...] 12.50 | 12.50 12.50 | WIM---|--------|--------|---------|---------|--------|--------|---------|--------- Manzanillo--------------------- 18.00 15.00 15.75 W/M...] 15.00 15.00 15.00 i WIM---|--------|--------|---------|---------|----------------|------------------ Capulco.---------------------- 18.00 15.00 15. 75 - - - 15.00 15.00 15.00 WIM-----------|--------|---------|---------|--------|--------|---------|--------- Salina Cruz-------------------- 21. 00 || 17. 50 18.38 W/M...] 17.50 17.50 17.50 | WIM---|--------|--------|---------|---------|--------|--------|---------|--------- Central America (West coast): San Jose.----------------------- 21.00 17. 50 18.38 || W/M...] 17.50 17.50 17.50 | WIM-----------|-----------------|-------------------------|---------|--------- La Libertad-------------------- 21.00 || 17. 50 18.38 WIM----------------------------|-------------------------|---------|---------|--------|--------|---------|--------- Corinto. ----------------------- 21.00 || 17. 50 18.38 W/M-- . 17. 50 17.50 17. 50 WIM-----------|--------|---------|---------|--------|--------|---------|-------- * Balboa------------------------- 21.00 17. 50 18.81 W/M-- - 21.00 21.00 21.00 WTM-----------|--------|---------|---------|--------|--------|---------|--------- Asia (East COast): okohama--------------------- 35.00 | 18.00 22.40 || WIM... 25.00 | 18.00 19. 13 W/M... 25.00 18.00 19. 13 W/M. . . 25.00 | 18.00 19. 13 WIM. Kobe-------------------------- 35.00 | 18.00 22. 17 | W/M...] 30.00 | 18.00 21.63 W/M...] 30.00 18.00 23.63 WIM... 25.00 | 18.00 19. 13 W/M. Hongkong--------------------- 35.00 20.00 25.83 || W/M... 30.00 20.00 25.00 | W/M...] 30.00 20.00 25.00 W/M...] 30.00 20.00 25.00 | WIM A º * * * * * * * * * * * * * * * * * * * * * * * 35.00 | 20.00 25.42 W/M...] 30.00 20.00 25.00 |M... 30.00 20.00 25.00 | W/M...] 30.00 20.00 25.00 || W/M Sia, LeS). - - * Manila------------------------- 30.00 | 20.00 24.58 W/M...] 30.00 20.00 25.00 || WIM...] 30.00 20.00 25.00 W/M-...}, 30.00 20.00 25.00 W/M. Singapore---------------------- 30.00 30.00 30.00 WIM---|-------------------------|----------------------------------|---------|--------|--------|---------|--------- Samarang---------------------- 25.00 22.00 23.50 W/M---|--------|--...... !---------|---------|--------|--------|---------|---------|--------|--------|---------|--------- Calcutta.------------------------ 40.00 40.00 40.00 | WIM-----------|-----------------|---------|--------|-----------------|---------|--------|--------|---------|--------- Australia: Sydney----------------- 45.00 || 45.00 45.00 l WIM-------------------|---------|---------|--------|--------|---------|---------|--------|--------|---------|--------- New Zealand: Wellington.-- - - - - - - - - 45.00 45.00 45.00 | WIM---|--------|--------|---------|---------|--------|--------|---------|---------|--------|--------|---------|--------- 38 APPENDIX VI. NOTES UPON MAKING OCEAN RATES BASED ON COSTS. Having ascertained the normal capital costs and current expenses for a vessel or group of vessels of given size and speed operated in a designated trade, the expenses for a voyage or for a year, divided by the number of units of service, actual or possible, will give the amount or rate that must be obtained from each Service to cover costs and expenses. If profits are to be made or allowed, the rates will be put at such a level above the cost basis as circumstances may Warrant Or informed judgment may dictate. - The ascertainment of the costs of individual transportation services increases in difficulty, at more than a proportionate ratio, with the increase in the number and the variety of services simultaneously performed by a carrier, whether by railroad or ocean vessel. The capital costs and many of the operating expenses being incurred for all the services in the aggregate have only an indirect relation to the divers and 'diverse services for which separate rates must be made, and it is difficult so to allocate, even approximately, the common costs and expenses as to arrive at figures expressive of the costs of the several services. The allocation of expenses among the different articles transported must be to some extent arbitrary and inaccurate, and it is thus, impossible to work out schedules of commodity or even of class rates that correspond exactly to costs of service. In this connection, it may be well to refer to the fact accepted generally by those who have given special consideration to rate making, that the charges for transporta- tion services ought seldom if ever to be strictly in accordance with the costs of service. There are other factors than costs that must be taken into consideration in scientific rate making. If articles having widely different value cost practically the same to transport, as is often the case, rates based strictly upon costs of Service might be pro- hibitive for one article and unjustifiably low for the other. Differences in value of commodities must influence rail and ocean freight rates. The same is true of dif- ferences in risks of transportation, perishability of commodities, and other physical or intrinsic characteristics affecting the classification, packing, handling, and other incidents of the transportation of freight. ... " In deciding upon the rates of compensation to be made for vessels whose use is requisitioned by the Government, a direct and comparatively simple use can be made of ascertained costs in fixing rates. The requisition rates are in part a com- pensation for property of whose use the owners are temporarily deprived, and in part a payment to cover expenses which the owners incur while their property is under the control of the Government. When a vessel is requisitioned “bare boat,” the owner has no expenses to meet after he has delivered his vessel to the United States “tight, staunch, strong, and well and sufficiently tackled, appareled, furnished, outfitted and equipped, and in every way Seaworthy and in good running order and condition.” If the vessel thus taken by the Shipping Board is assigned to the owner to operate for the board, he has no operating expenses; they are all borne by the Government. The bare boat requisition rate is a compensation for the use of property. The Government temporarily carries the owner's capital costs, and has generously made him a payment which included Some of the profits that the owner might have made had he been allowed the use of his property. The bare boat requisition rate is determined by fixing a value for the '118231—19—6 81 82 OCEAN RATES AND TERMINAL CEIARGES. vessel, or class of vessels, taken and by calculating what payment per dead-weight ton per month will give the owner an income equal to, or somewhat exceeding, the costs of carrying the capital he has invested in the property taken temporarily by the Government. When the owners of requisitioned vessels are compensated upon the basis of a “time form” charter, the owner not only provides the vessel but also pays “for all provisions, wages, bonuses, and consular shipping and discharging fees of the master, . officers, and crew, and * * * for all cabin, deck, engine room, and other necessary stores.” He must also maintain the ship and her equipment during the requisition period. In addition to capital costs, the owner has certain operating and maintenance expenses when his vessel is requisitioned by the Government and turned over to him to operate under a time form charter. The rate of pay for a vessel requisitioned time form is, thus, the amount payable under the bare form increased by the amount of the owner’s current expenses. Having ascertained the owner's capital costs and the operating and maintenance expenses that he has to bear, it is easy to calculate the equivalent monthly payment or requisition rate per dead-weight ton per month. Requisition rates, both bare boat and time form, can readily be worked out upon the cost basis. When the problem of rate making is that of fixing charges for the transportation of a full vessel cargo composed of a single commodity to be transported to any given destination in a ship whose size and speed are known, and when the normal capital costs and operating expenses of a vessel of the class to which the ship in question belongs are known, the task is comparatively easy. If the cost data have previously been worked out for vessels of the class to which the ship being considered belongs, it is necessary only to calculate the expenses for the time that will be consumed in making the voyage, including time spent at terminals, and to divide the total capital costs and current expenses by the number of tons, or number of units, of cargo, and the quotient will be the freight rate corresponding to costs of the Service. That rate, increased by whatever percentage it is deemed proper to add to make the services profitable to those who perform it, will be the rate for the Government authority to establish. In the trade between the United States and all sections of the world, there are both commodity freight rates and rates applicable to “general cargo.” The unit upon which the charges for general cargo is based is in most cases a ton either of 40 cubic feet or 2,240 pounds, and ordinarily the carrier may decide whether the charge shall be for the measurement or for the weight ton; in other words, the rate is quoted as SO much per ton, weight or measurement, ship's option. The general cargo rate is in reality a charge based upon space. Experience shows that a vessel of a certain dead- weight tonnage can be loaded with a known number of tons of general cargo; and general cargo rates are such charges as multiplied by the number of units of general cargo freight (that may be transported) will produce the income necessary to cover the costs of service for the vessels for which charges are made, or will equal the costs of service plus such profits as the owner may desire to make or may be allowed by Government authorities to obtain. º Experience in the operation of vessels gives the data upon which the capital costs and current expenses for voyages in each “Ocean trade,” such as the Brazilian, Argentine, Australian trades, etc., may be calculated for different classes of vessels. The expenses being known, and also the number of tons of general cargo that can normally be carried, it is possible readily to arrive at a proper general cargo rate for each of the several ocean trades. The amount of cost data required is large, and it is only by detailed studies of the results of actual experience that the requisite informa- tion can be obtained; but when once it has been secured the calculation of general cargo rates is not especially difficult. OCEAN RATES AND TERMINAT, CHARGES. 83 “Berth rates” have many points in common with general cargo rates. In ordinary times, when rates are not fixed by the Government, the owner or charterer of the vessel placed upon the berth sells space at berth rates; in other words, he accepts cargo at such rates per ton, weight or measurement, and in such quantities as may be agreed upon by carrier and shipper. - - The berth rates charged by the carrier and allowed by Government authority must be sufficient to cover the owner's capital costs and current expenses, or the charterer's necessary payments to the owner for the hire of the vessel and the Operating expenses which the charterer must bear under the terms of the charter party. For placing a vessel upon the berth and taking the chance of securing a full and economical lading of cargo within a reasonable time, the owner or charterer is entitled to compensation or profits proportionate to the risk incurred and to the business ability necessary to the successful management of the enterprise. When Ocean rates are determined by competition, and fluctuate generally and locally with every change in the relation of tonnage supply and traffic demand, berth rates often apply Only to such parts of a vessel as have not been taken up by regular cargo. The agents or masters of the ship offer to dispose of the unoccupied space on a vessel nearly laden at attractive berth rates. It often happens also that a vessel, particularly a tramp, may not be able to secure promptly a lading of bulk cargo, in which case the owners or charterers of the vessel may place the ship “On the berth” and announce that up to a certain date space will be sold or berth cargo accepted at rates to be agreed upon with the shipper. Under ordinary competitive conditions, berth rates usually are lower than corresponding commodity or general cargo rates. - When a commodity is regularly shipped in full cargo lots, or in bulk in large quan- tities, the freight rate will naturally be lower than for “package freight” or for an article regularly shipped in relatively small amounts. If the commodity be coal, ore, or any other article of low value per weight or bulk, the rate must be correspond- ingly low. The calculation of rates for commodities regularly handled, as bulk cargo, is in fact the problem of determining “charter rates,” as explained above. In the case of commodities that are shipped in relatively small quantities, and which are combined with a score and possibly many score of other articles in the lading of an Ocean vessel, the making of freight rates is a difficult task. The costs of service assignable to the several dissimilar articles can be only approximately determined, and resort to estimates and to arbitrary rules for the allocation of costs is necessary in working out a schedule of freight rates based on costs of service. But the fact that perfection can not be achieved is never a reason for not seeking to secure the best obtainable results; and this rule of conduct holds true of efforts to determine freight rates corresponding to costs of service. Having ascertained the aggregate income which a given vessel carrying mixed cargo must secure to meet the costs and expenses of a voyage, or of the period of time required to perform the services for which charges are to be levied, the rate maker must allocate the total amount among the several commodities by considering the space occupied by different articles, their relative weights, their liability to damage, and, in short, the various factors affecting relative costs of service. The judgment and expert knowledge of the rate maker, rather than accounting or other rules, must often deter- mine the decision reached. Moreover, as is well known, the rates finally decided upon must necessarily reflect differences in the values of the commodities, as well as dissimilarities in costs of service, if the rates are to be equitable to shippers and are to be in harmony with industrial and trade requirements. The cost of service, as a basis of freight rates, has its limitations. The rates for services by sailing vessels are ordinarily appreciably less than the rates for the services of steamships. The amount of the differential between sailing and steam rates is determined, when competition is prevalent, by the relative 84 OCEAN RATES AND TERMINAT, CIHARGES. advantages of the services by the two classes of vessels as employed in different trades. For some trades and routes Sailing vessels are better adapted than others, and their rates will correspond to service efficiency. When all vessels are scarce, the normal difference between the rates of sailing vessels and steamers may be largely disregarded. In general, rates made to meet war conditions have been especially attractive to sail- ing vessels in order to induce them to enter trades from which the withdrawal of steamers was especially to be desired. In establishing and controlling Sailing vessel rates it seems advisable to agree upon the proper relationship between the rates of sailing vessels and steamers in each of the leading trades, and to establish rates by sailing vessels having a relation to the rates by steamers that correspond with differ- entials found to be reasonable. O - §§§ §§§ º ºfºº § ----- § §§ ºś . > § Nº ºx w § § §§ º º ſº º º º g §§ § ºº::..º * ºr ºxº º §§ º §§§ §§ §§ : ºš º º ºz º.º. tºº > - §§§ §§§ §§§ºś §§§ §§ iº ºğ # § º º - º º §: §§ - - º º Bºº § - º DATE DUE ſº § § º § ; º § *.* ; ſº º § º $º § §: flº § ºš §§§ º º º ºś - º 4.3% ºś ; § º § ;º §. º º º §§§ ºś º sº º kºº § § § §§§ §§ sº: § ºº: §§ º §§ § - º § § § § wº § º & 5 º §º. § - § &º § § ; º º § f º º º º § º §§§ § §§§ - § º - §º § § § § º § § º ; º º º § §§ § § § º §§§ §: § §§ § * §§ - §º § º * º º Žº º º i * 4 º: § # § f ſº §º ; à. p t t § tº tº: § § § § } §§ § § § #i ; §§ ; ºğ % º º 32 º § *º * º ń º: § § § * § - § º º £º º ſº i - § 3. e § º § * § §:; §§ § §§ § § § § s º * §§§ §§ § ---- º § . § * ; §§ § 3. § º **:: § §: º § º *. sº § § §: §§ §§ ś 3º § § § X ºf º º § i. § sº . º sºft º º §§§ §§§ § º º- º§ §: gº ×ºğ § º § º º C š : § § § - *'gº § ź § sº. #8% § § : º - §: § - *. - §: y § - * § - - - § § §§ºś § § . § § ** § § § § § sº § *: $ §§ § º § fºr: § § º § tº'º. ! {-º § & §: # #& § § g º * Yºgi. sº § ; *; ; § f; * # * §:{{:}. ãºğ § § ; 5. § § § \º § r) § º y E. §: § § §§§ º: §§ §§§ Żºłºś. § sºº º º & § § § & ; *k * º §§ sº : §§ § - $º. § º ; º 3. º t †: § § - º -- § § § § § # ; § - § § : s º ſ: º § § § º i - sº §§ º § § - ºf: § º §§ º § $'. § §§§ ; § § §: * º º §§§ # º § §§ º jºš. § $º: f § .. # *:::fff; § § º § º: § - º - § º -º#§ # # ; 3. $ #. º § § { ºś § f ||||| | UNIVERSITY OF MICHIGAN | 3 9015 07373 MUTIILATE [ ARD |---- > G=) – ！= |---- ©， }） G=) ---- (<=) ©=à Gaylord Bros. Makers Syracuse, N. Y. PAT. JAN, 21, 1903 … ：-）…— • • • • • • • • • ••••••••• • •-■7 «… ！<--！:Saer • • • • ••••••••••■ • × → → → → → ·） <！-- <; • • • • • • • ******** • **<=rpasº • • • • • • • • • • • • • • • • • • • • • a*x + √≠ ≤ ∞ √≥s.<< ∞ < ∞, ∞, ∞; ∞, ∞; ∞ și №ſº-º--：- :：：:：::：:：:：:：::：：::：：:：：:：：::：:...！！！,，，.，:.，...） : . ::F : ' . . .----~f : 7 · · * * 3،~^ſaegae~--~ № = ∞，∞） × == v） ··→ ~ ~ ~ ~ ~ ~ ~ ~--~~~~ ºse 4-sesº！ ！！f（3）！！！！！！！！！！!！！！！！！！！！！！ :::：::s º·， . ）● ● ●·~--~■~~ ~~~~--~... • • • •-+- …：… *** • • • •********~*~*~*~> •* •– →→→ → • §= √æ•-， → → → → → → → →- wae§ ~~，~--~--~~~~----，~----*-- （~~~~ ~~~~！！！！！！！！！！！！！！！！！！！！！± − ×-.*}· · · *-• • • • • • • ** ** ** • ** ************ → √æ√¶√∞æææ æ æ ， æ æ^№ ：=≡≡ №* <！-- ***， Caeſae -ººs- （~~~~ ~~№ № < < :--... * … … *L.... 7. * … “ - „ “ （…*..* - - - - - ~. — • • ~~~~==+++==+==~~~==--~~~~ 4 * ws«; »<！！！！！！！！！！！！！！！！！！！！！！！！！！！！！！!！ ~ ~ ~ ~ ~ | ~ ~ ~ _* _* __T__ * * * · * * * · * （ , ， ， … * * * .~--~--~-----~--~--~--~»- - -~ - ---• ¶ • • • • • •*=~~~~ ~~~~æ æ ， æ （ ææ æ ， æ æææ ：=， svaessae; s-w ** * * * · * *_* _ - _* _ º _ （|-·--- ** * * * …----|-~---， ----’ （ ）•* ：№: ***• №№ſae！ -：-•-·----~----, ， ， ， ， .-·■■■■■■~∞∞∞№ * ∞ &aeſae ،、、。 ！·• ∞∞∞###### ############ ±±± ¿??¿* ſº *>{！！！！！！!！！！！šºšºſ šž§ głºſę， ſi§} ºa：º ae aeae， §§ ¶√≠√∞∞¿ºff &∞ ×* ĢģĞğ$§§§£§!ſae§§§§§:№ §.∞ √：· ----∞ §§§§§§§ſaeae、、。șžºj∞∞∞ ， ， ， ，¿：£） （zaev （aeº ， ， ， ， ， ºº，"*****）ºlae、。 ſaeae:¿№ºși，#######§§§§ ��■■; * * *ſº… ***șae №.ºjſae£ § … sº