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National Transportation Committee on Railroads and Waterway Competition T THE request of a large group A of savings banks, insurance companies and colleges, a na- tional transportation committee was organized Oct. 7 last. The late Cal- vin Coolidge was chairman of this committee and the other members are Bernard M. Baruch, vice chair- man; Clark Howell, publisher, The Atlanta Constitution; Alexander Legge, president, International Har- vester Co.; and Alfred E. Smith, for- mer governor of New York. This com- mittee was organized to investigate the condition of the railroads and transportation generally. For four months it has given this subject in- tensive study and many hearings have been held in which the various interests involved presented their views and data. Calvin Coolidge died on Jan. 5 after the committee had nearly completed its research, but before the report had been prepared. In issuing the report on Feb. 15, Vice Chairman Baruch announced that the committee felt that its findings would have had the full, approval of its late leader. Following is the complete report of the committee insofar as it affects water transportation. Though gen- erally in agreement with this report, Alfred E. Smith issued a minority report in which, as he said, he could use his own words and place the proper emphasis on those matters he felt should be emphasized. What Alfred E. Smith has to say about wa- ter transportation in his minority re- port is also published in full below. Waterways and Railroads Majority Report Railroads should be _ permit- ted to own and operate com- peting services, including water lines, but regulatory jurisdiction should be extended to water rates and practices in coastal, inter- coastal and lake shipping to re- lieve commerce of present chaotic conditions. Congress should promptly clarify its intention on the long-and-short-haul clause of the transportation act.. Restrictions on the ownership by railroads of water-borne, automo- tive or other competing services seem anomalous in a regime which has demonstrated its effective control of both rates and practices. There are certain competitive sit- uations where railroad rates between two ports are fixed by regulation and unregulated water rates are in chaos. This is disturbing to commerce and unfair to railroads. For this and other reasoas we believe that the jurisdiction of the regulating body should be extended to cover intercoast- al, coastal and lake commerce. We do not mean to recommend that water rates, based on actual lower costs, should be regulated upawrd to equal- ize traffic in favor of railroads, but we do believe that, in such a situation, some stabilizing influence should be applied in the interest of commerce generally as well as in fairness to railroads. The law prohibits a railroad from charging less for a longer than for a shorter haul, over the same line, in the same direction, the shorter being included in the longer, but permits the interstate commerce com- Mr. Smith on Waterways Minority Report S TO water transportation, with A particular reference to inland waterways, I believe that government subsidies in this field should be cur- tailed, not primarily because they re- sult in unfair competition with the railroads, but because these subsidies have not proved effective. Certainly the New York State Barge canal can- not be said to compete with the ex- isting railroads, because in spite of construction and maintenance by the state and free tolls, the barge canal carries so little freight that it pre- sents no problem to the railroads. The New York State Barge canal is an heirloom. Sentiment rather than common sense makes us keep it up. I am cpposed at this time to the construction of the St. Lawrence waterway because it would be a waste of public funds. Present rail facili- ties are more than adequate to pro- vide for everything which the proposed canal can accomplish. The cost of moving grain would not be lowered by this canal sufficiently to justify the enormous expenditures which it would involve; keeping in mind also that this waterway would be open only for a part of the year and that the railroads would have to be used anyway the rest of the year. I be- lieve that a special investigation should be conducted into the Inland Waterways Corp. to discover exactly what it costs the war department to operate this corporation and whether or not further expenditures for this purpose should cease. [SPANNER A TIT NPIL ETL MARINE REviEw—March, 1933 mission a discretion to relieve this restriction. The law is not altogether clear and the commission’s interpretation and decisions have been the subject of long and persistent controversy. Grave consequences affecting wide economic areas are involved and the situation requires prompt clarification Two pending suggestions by the in- terstate commerce commission and one by the house committee might contribute thereto. If jurisdiction of the commission be extended to in- clude intercoastal commerce, or if a new rule of ratemaking be adopt- ed, the problem would be simplified. But if neither of these things is done, it is important that congress act at once to declare its intention on this important application of the so-called “long-and-short-haul”’ controversy. 9 Government assumption of all or part of the costs of ineffi- cient competing transport as a de- fense against monopoly is-no long- er warranted and should be aban- doned. As a general principle in- land waterways should bear all costs of amortization, interest, maintenance and operation of the facilities for their navigation. If they cannot bear such charges and compete with other forms of trans- port, they should be abandoned. The St. Lawrence waterway should be tested by this rule of self- support and if it fails in that test the pending treaty with Canada should not be ratified. Govern- mental commercial operation of the actual facilities of transporta- tion, such as barge-lines, should not be continued. Creation and maintenance, by goy- ernment, of competing methods of transport, where the result is not (as in the Panama canal) to pro- vide more efficient service at lower cost, but only (as in some inland waterways) to maintain at the tax- payers’ expense, more costly and less efficient service can no longer be justified as a defense against monopoly. This government has long been committed to the improvement and maintenance of shipways and of at least the outer harbors of ports accessible to great naturally navi- gable waterways. This involves ex- pense, defrayed by taxation of the whole nation, but applied at par- ticular points, in the development of the instrumentalities of inter- state and international commerce. To an extent, these waterways are the railroads’ competitors, and, as 17