ORDER

At a Session of the FEDERAL MARITIME BOARD, held at its office in Washington, D. C., on the 2nd day of April A.D. 1952

No. 696

FELDMAN FAMILY CLOTHING EXPORT & SHIPPING CORPORATION

υ.

PETER BOGATY ET AL.

This case being at issue upon complaint and answer on file, and having been duly heard and submitted by the parties, and full investigation of the matters and things involved having been had, and the Board, on the date hereof, having made and entered of record a report stating its conclusions, decision, and findings thereon, which report is hereby referred to and made a part hereof;

It is ordered, That the complaint be, and it is hereby, dismissed.

By the Board.

(Sgd.) A. J. WILLIAMS,

4 F. M. B.

Secretary.

FEDERAL MARITIME BOARD

No. S-18

IN THE MATTER OF THE APPLICATION OF PACIFIC TRANSPORT LINES, INC., FOR OPERATING-DIFFERENTIAL SUBSIDY (TRADE ROUTE 29, SERVICE 2) UNDER TITLE VI, MERCHANT MARINE ACT, 1936

No. S-19

IN THE MATTER OF THE APPLICATION OF PACIFIC FAR EAST LINE, INC., FOR OPERATING-DIFFERENTIAL SUBSIDY (TRADE ROUTE 29, SERVICE 2) UNDER TITLE VI, MERCHANT MARINE ACT, 1936

Submitted December 18, 1951. Decided April 8, 1952

Applicants Pacific Transport Lines, Inc., and Pacific Far East Line, Inc., are operating existing services on Service 2 of Trade Route No. 29 within the meaning of section 605 (c) of the Merchant Marine Act, 1936.

The effect of the granting of operating-differential subsidy contracts to both of the applicants to the extent of their operations on Service 2 of Trade Route No. 29 at the time of the filing of their applications would not be to give undue advantage or be unduly prejudicial as between citizens of the United States in the operation of vessels on the route.

The provisions of section 605 (c) of the Act do not interpose a bar to the granting of operating-differential subsidy contracts to both of the applicants for the operation of cargo vessels on Service 2 of Trade Route 29 to the extent of their operations thereon at the time of the filing of their applications. All further questions which may arise under this or other sections of the Act are expressly reserved for future determination.

James L. Adams and John F. Porter for Pacific Transport Lines, Inc.

William Radner and Odell Kominers for Pacific Far East Line, Inc. Chalmers G. Graham, Clarence G. Morse, Robert B. Mackenzie, Leonard G. James, Reginald S. Laughlin, and Willis R. Deming for American President Lines, Ltd., Wm. I. Denning, Earl C. Walck, Edward P. Cotter, and Paul H. Matson for States Steamship Com

pany, John Tilney Carpenter for States Marine Corporation, and Thomas F. Lynch, A. E. King, A. E. Blake, and John J. Jacobs for Isthmian Steamship Company, interveners.

John Ambler, Albert E. Stephan, and L. W. Hartman for American Mail Line, Ltd., amicus curiae.

Paul D. Page, Jr., John Mason, George F. Galland, and Joseph A. Klausner for the Board.

REPORT OF The Board

This proceeding concerns the application of Pacific Transport Lines, Inc., filed on June 27, 1949, and the application of Pacific Far East Line, Inc., filed on October 12, 1949, for operating-differential subsidies under Title VI of the Merchant Marine Act, 1936, as amended, both applicants seeking subsidies for operations to be performed on Service 2 of Trade Route No. 29. Pursuant to the provisions of sections 605 (c) and 805 (a) of the Merchant Marine Act, 1936, as amended (hereinafter referred to as "the Act"), hearings were held before the chief examiner on a consolidated record at various times between December 6, 1949, and August 8, 1950, at Washington, D. C., and San Francisco, Calif.

Pacific Transport Lines, Inc. (hereinafter referred to as PTL), and Pacific Far East Line, Inc. (hereinafter referred to as PFEL), each intervened in the proceeding involving the other's application. American President Lines, Ltd. (hereinafter referred to as APL), States Steamship Company (hereinafter referred to as States), American Mail Line, Ltd. (hereinafter referred to as AML), States Marine Corporation, and Isthmian Steamship Company intervened generally in opposition to both applications. Of the interveners, however, only APL and States produced testimony in opposition to the applications.

Service 2 of Trade Route No. 29 (hereinafter sometimes referred to as the route) is described in the report of the Maritime Commission on Essential Foreign Trade Routes of the American Merchant Marine as follows:

Freight Service:

Itinerary: Between the California ports of Los Angeles and San Francisco and Yokohama, Osaka, Kobe, other Japanese ports (as traffic offers) Shanghai, other North China ports and ports in Manchuria and Korea (as traffic offers), Hong Kong, Manila, Philippine Islands outports, French Indo-China and Siam (as traffic offers): with privilege of calls at ports of U. S. S. R. in Asia. Sailing Frequency: 24-26 sailings per year.

Number and Type of Ships: 5 C3 type freighters.

PTL seeks a subsidy for from 26 to 32 sailings yearly for its 5

owned vessels (4 C-3 and 1 Victory type), with calls at Guam and Honolulu. PFEL seeks a subsidy for from 47 to 57 sailings yearly for its 5 owned C-2 type vessels and for 5 or 6 vessels, as determined by the Board, to be acquired if subsidized, with calls at Guam, Midway, Wake, and Trust Territories. The examiner found at the outset, and we agree, that the issues raised under section 805 (a) of the Act for request to serve the above-mentioned off-route areas, with the exception of Hawaii and the Trust Territories, were settled by the Maritime Administrator in Docket No. S-20, 3 M. A. 450, where he ruled that steamship service between the continental United States and Guam, Midway, and Wake was not "domestic intercoastal or coast wise service" within the meaning of section 805 (a).1

The present proceeding is thus limited to the determinations which the Board is required to make upon relevant issues arising under section 605 (c) of the Act, which section provides as follows:

(1) No contract shall be made under this title with respect to a vessel to be cperated on a service, route, or line served by citizens of the United States which would be in addition to the existing service, or services, unless the Commission shall determine after proper hearing of all parties that the service already provided by vessels of United States registry in such service, route, or line is inadequate, and that in the accomplishment of the purposes and policy of this Act additional vessels should be operated thereon; and

(2) no contract shall be made with respect to a vessel operated or to be operated in a service, route, or line served by two or more citizens of the United States with vessels of United States registry, if the Commission shall determine the effect of such a contract would be to give undue advantage or be unduly prejudicial, as between citizens of the United States, in the operation of vessels in competitive services, routes, or lines, unless following public hearing, due notice of which shall be given to each line serving the route, the Commission shall find that it is necessary to enter into such contract in order to provide adequate service by vessels of United States registry. The Commission, in determining for the purposes of this section whether services are competitive, shall take into consideration the type, size, and speed of the vessels employed, whether passenger or cargo, or combination passenger and cargo, vessels, the ports or ranges between which they run, the character of cargo carried, and such other facts as it may deem proper. [Numbering and paragraphing supplied.]

Both of the present applicants have maintained regular berth services on the route since 1946. In 1949, PTL made 26 outbound

'The original application of PTL was amended to include permission to call at Hawali, but no action was taken to expand the section 805(a) issues to include Hawaii or to give notice thereof in the Federal Register. The ruling of the Administrator in Docket No. 8-20 does not apply to Hawaii, Puerto Rico, or Alaska. Before permission can be granted to any subsidized operator to serve Hawaii, it will be required that such intention be published in the Federal Register, giving any interested party the opportunity for a public hearing under section 805 (a) of the Act. The ruling of the Administrator also does not expressly include the Trust Territories; the question thus raised with respect to this off-route area will be reserved for the Administrator's final determination.