Ask the Scholar
Document scope · 1 page
Scholar
Ask about this object, its catalog metadata, its source description, or the page inventory.
For page-specific OCR and visual context, open one of the page chats.
Scholar Source Context
Document identity
localId
12004501
label
1974/10/27 S355 Motor Vehicle and School Bus Safety Amendments of 1974 (2)
core
doc
dtoType
document
citationUrl
pageCount
1
Source metadata
id
12004501
sourceUrl
contentType
document
title
1974/10/27 S355 Motor Vehicle and School Bus Safety Amendments of 1974 (2)
citationUrl
collections
White House Records Office: Legislation Case Files
Legislation Case Files
subjects
Legislation
Motor vehicles
Safety
thumbnailUrl
largeImageUrl
imageCount
1
hasImages
yes
source
import
hasTranscription
no
Source extras
naId
12004501
coverageEndDate
logicalDate
1974-10-31
month
10
year
1974
coverageStartDate
logicalDate
1974-10-01
month
10
year
1974
levelOfDescription
fileUnit
recordType
description
ocrSource
nara-archive
Single page context
seq
1
pageIndex
0
type
document
mediaId
42ffdf338190a01a
ocrText
The original documents are located in Box 11, folder "1974/10/26 HR13561 Intercoastal
Shipping Act Amendments" of the White House Records Office: Legislation Case Files at
the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Exact duplicates within this folder were not digitized.
Digitized from Box 11 of the White House Records Office Legislation Case Files at the Gerald R. Ford Presidential Library
THE WHITE HOUSE
ACTION
WASHINGTON
Last Day - October 29
October 25, 1974
MEMORANDUM FOR:
THE PRESIDENT
FROM:
KEN CODE
SUBJECT:
Enrolled Bill H.R. 13561
Intercoastal Shipping
Act Amendments
Attached for your consideration is House bill, H.R. 13561,
sponsored by Representative Sullivan, which eliminates the
carriage, storage or handling of governmental or charitable
property free or at reduced rates in the intercoastal trade
of the United States.
Roy Ash recommends approval and provides you with additional
background information in his enrolled bill report (Tab A).
We have checked with the Counsel's office (Chapman) and
Bill Timmons who both recommend approval.
RECOMMENDATION
That you sign House bill, H.R. 13561 (Tab B).
APPROVED
EXECUTIVE OFFICE OF THE PRESIDENT
OCT 26 1974
OFFICE OF management AND BUDGET
WASHINGTON, D.C. 20503
OCT 2 3 1974
MEMORANDUM FOR THE PRESIDENT
Posted
Subject: Enrolled Bill H.R. 13561 - Intercoastal Shipping
Act amendments
84/01
Sponsors - Rep. Sullivan (D) Missouri and 5 others
Jo Orchie
Last Day for Action
10/29
October 29, 1974 - Tuesday
Purpose
Eliminates the carriage, storage or handling of governmental
or charitable property free or at reduced rates in the
intercoastal trade of the United States.
Agency Recommendations
Office of Management and Budget
Approval
Department of Commerce
Approval
Department of Transportation
Approval
Federal Maritime Commission
Approval
Department of Defense
No objection
(informally)
General Services Administration
Does not recommend
a veto
Discussion
The Intercoastal Shipping Act authorizes the Federal Maritime
Commission (FMC) to exercise economic regulation of common
carriers by water in the intercoastal trade of the United
States and between the continental United States and the
noncontiguous States and dependencies. Generally, the Act
authorizes the FMC to enforce maximum and minimum rates and
just and reasonable trade practices. Section 6 of the Act
provides, however, that " nothing in this Act shall prevent
the carriage, storage, or handling of property free or at
reduced rates, for the United States, State, or municipal
FORD & LIBRARY 070875
2
Governments, or for charitable purposes. II The effect of
Section 6 of the Act has been that substantial amounts of
Government cargoes are carried at lower ocean freight rates
than those applying to commercial cargoes. The enrolled
bill would amend the Intercoastal Shipping Act by deleting
Section 6.
Section 6 is virtually identical in purpose to section 22
of the Interstate Commerce Act, which is applicable to trans-
portation by rail and motor common carriers regulated by
that Act. The Administration has proposed a bill, the
Transportation Improvement Act of 1974 (S. 3237, H.R. 12891),
which would, among other things, repeal section 22. Accord-
ingly, deletion of Section 6 would be consistent with that
Administration proposal.
The purpose of these repeals is to place private and public
shippers on an equal footing and to require the Government
to pay its fair share of the nation's transportation costs.
The Federal Government is presently the largest purchaser
of intercoastal transportation services. Most agencies have
argued that the rates for Government cargoes, which are
substantially lower than those applicable to comparable com-
mercial cargoes, may have caused an artificial and excessive
inflation of rates charged commercial shippers.
On the other hand, Defense has argued that its rates are
adequate to cover costs plus a profit and that lower Govern-
ment rates have not caused higher commercial rates. It esti-
mates increased transportation costs of $5 million a year as
a result of this legislation. It earlier estimated that
repeal of section 22 might cost it as much as $240 million a
year in increased costs until it could convert to a new rate
system.
DOT and we have doubted that Defense's costs would increase in
the magnitude it estimates although agreeing that there would
be some transition costs. Both of us felt that repeal of
section 22 was a price that had to be paid if the Administra-
tion was to get the other regulatory improvements which were
incorporated in the Administration's proposed Transportation
Improvement Act.
The enrolled bill would also amend Section 5 of the Inter-
coastal Shipping Act to expressly apply the other regulatory
provisions of that Act to the carriage, storage, and handling
3
of Government and charitable cargo. As stated in the Report
of the House Committee on Merchant Marine and Fisheries,
this provision is included in the enrolled bill:
"
to make it clear that the intention of
H.R. 13561 is to insure that rates charged for
the carriage of government and charitable
cargo in the domestic offshore commerce of
the United States are subject to the same type
of economic regulation by the Federal Maritime
Commission as the Commission presently exer-
cises over commercial rates in these trades.
If
Wufred H Romael
Assistant Director for
Legislative Reference
Enclosures
UNITED STATES OF AMERICA
*
*
4
GENERAL SERVICES ADMINISTRATION
#
*
WASHINGTON, DC 20405
*
*
GENERAL SERVICES
* ADMINISTRATION
*
*
*
OCT 1 8 1974
Honorable Roy L. Ash
Director, Office of
Management and Budget
Washington, DC 20503
Dear Mr. Ash:
By referral dated October 16, 1974, from the Assistant Director for
Legislative Reference, your office requested the views of the General
Services Administration on enrolled bill H.R. 13561, 93rd Congress,
an act "To amend the Intercoastal Shipping Act, 1933."
The bill would repeal section 6 of the Act which presently permits
the carriage of property in intercoastal trade, free or at reduced
rates, for the Federal Government or a State or local government
or for a charitable purpose. It would provide for the regulation
of such transportation by the Federal Maritime Commission.
Although we have expressed opposition to this bill on the same
grounds as those advanced by the Department of Defense, its effect
on GSA will be very small by comparison. In view of this, and
the strong support of the bill by other agencies of the executive
branch, we do not recommend a veto of the bill.
Sincerely
Arthur F. Sampson
Administrator
Keep Freedom in Your Future With U.S. Savings Bonds
DEPARTMENT OF TRANSPORTATION
OFFICE OF THE SECRETARY OF TRANSPORTATION
WASHINGTON, D.C. 20590
UNITED STATES OF AMERICA
OCT 1 7 1974
Honorable Roy L. Ash
Director, Office of
Management and Budget
Washington, D.C. 20503
Dear Mr. Ash:
You have asked for our comments on H.R. 13561, an enrolled bill
"To amend the Intercoastal Shipping Act, 1933."
This bill would delete from the Act, Section 6 which permits a
common carrier by water in intercoastal commerce to carry, store,
or handle property free or at reduced rates (1) for the United
States, State, or municipal governments, or (2) for charitable
purposes. The bill would also amend Section 5 so as to expressly
apply the other provisions of the Act to the classes of cargo
mentioned in (1) and (2) above.
We note that the enrolled bill is similar in certain respects to
Section 7 of an Administration bill proposed by this Department as
the Transportation Improvement Act of 1974 which now appears as
Section 501 of the Surface Transportation Act of 1974 (H.R. 5385).
Section 501 repeals that portion of Section 22 of the Interstate
Commerce Act which permits rail and motor carriers to provide
transportation to Federal, state, and municipal governments at
no cost or at rates below those charged private shippers. Carriers
may still provide such services at reduced rates in time of war,
or when the shipment involves commodities that are exempt from
economic regulation under the provisions of Part II or Part III
of the Interstate Commerce Act.
Both the enrolled bill and the provision in the surface transportation
legislation place private and public shippers on a more equal footing
and require government, as a shipper, to pay its share of the nation's
freight bill instead of placing a substantial burden on private
shippers or carriers. This was the reason that we supported the
enactment of S. 3173, the Senate companion to the enrolled bill in
a letter to the Chairman of the Senate Commerce Committee dated
June 7, 1974. For the same reason, we recommend that the President
sign the enrolled bill.
Sincerely,
Rodney E. Eyster
General Counsel
DIPARTMENT OF COMMERCE
GENERAL COUNSEL OF THE
DEPARTMENT OF COMMERCE
UNITED STATES OF AMERICA
Washington, D.C. 20230
OCT 18 1974
Honorable Roy L. Ash
Director, Office of Management
and Budget
Washington, D. C. 20503
Attention: Assistant Director for Legislative Reference
Dear Mr. Ash:
This is in reply to your request for the views of this Department
concerning H.R. 13561, an enrolled enactment
"To amend the Intercoastal Shipping Act, 1933.'
H.R. 13561 would amend the Intercoastal Shipping Act by deleting
Section 6 which authorizes free or reduced rate carriage of
government cargoes, and by amending Section 5 to subject government
cargoes to the economic regulation of the Federal Maritime Commis-
sion in the same manner as private cargo is subject to such
regulation.
The Department of Commerce recommends approval by the President of
H.R. 13561. The maintenance of stable rates and services in the
intercoastal trade requires uniform treatment of all shippers and
under no circumstance should private shippers be compelled to
subsidize the transport of government cargo as is possible under
the present provisions of the Intercoastal Shipping Act of 1933.
Enactment of H.R. 13561 would require no additional appropriations
for this Department.
Sincerely,
Karl E. Bakke
General Counsel
STATEMENT E/F DEVENSI
DEPARTMENT OF THE NAVY
OFFICE OF THE SECRETARY
WASHINGTON. D. C. 20350
NAME
23 October 1974
Honorable Roy L. Ash
Director, Office of Management and Budget
Washington, D.C. 20503
Dear Mr. Ash:
Your transmittal sheet dated 16 October 1974, enclosing an enrolled bill
of Congress, H.R. 13561, "To amend the Intercoastal Shipping Act, 1933,"
and requesting comment of the Department of Defense has been received.
The Department of the Navy has been assigned the responsibility for
the preparation of a report thereon expressing the views of the Department
of Defense.
H.R. 13561 repeals section 6 of the Intercoastal Shipping Act, 1933
(46 U.S.C. 846) which has provided that common carriers by water in the
domestic offshore trades may lawfully transport cargo for the U.S. Govern-
ment, inter alia, at free or reduced rates. Additionally, H.R. 13561
amends section 5 of the Intercoastal Shipping Act, 1933 (46 U.S.C. 845b)
by explicitly extending the application of the whole Intercoastal Shipping
Act, 1933, to the carriage, storage or handling of property by the United
States, or municipal governments, or for charitable purposes.
The Department of the Navy on behalf of the Department of Defense, opposed
enactment of H.R. 13561 in its report to the Chairman of the House Merchant
Marine and Fisheries Committee dated 6 August 1974 because the act contra-
venes the common law right of the sovereign to reduced shipping rates for
its cargo, and because the current negotiated contracts between the Military
Sealift Command and waterborne common carriers in the domestic offshore
trades allow a reasonable profit to the carrier, thus overcoming an appar-
ent objective of the bill.
While the cost impact on DOD cannot be evaluated precisely, it is estimated
to be $5 million annually. However DOD is more deeply concerned with the
unsound fiscal precedent established by this legislation at a time when
efforts are being mounted against rising costs. If this same legislative
action were taken with respect to the current authority for reduced rates for
domestic inland surface transportation under section 22 of the Interstate
Commerce Act, the cost impact could amount to $240 million in the first
year. Legislation is currently before the Congress to remove this authority.
Although the Department of Defense has reservations as to the legislation
as indicated above, it does not feel that they form a sufficiently strong
basis on which to recommend a Presidential veto.
Sincerely yours,
NSPoths
D. S. Potter
Acting Secretary of the Navy
MARITIME
Federal Maritime Commission
Washington, D.C. 20573
1961
Office of the Chairman
October 17, 1974
Honorable Roy L. Ash
Director, Office of Management
and Budget
Washington, D. C. 20503
Dear Mr. Ash:
I am writing in reply to your request for the views and recommen-
dations of the Federal Maritime Commission on H.R. 13561, an enrolled
bill
To amend the Intercoastal Shipping Act, 1933.
H.R. 13561 would delete Section 6 of the Intercoastal Shipping
Act, 1933, which provides
That nothing in this Act shall prevent the
carriage, storage, or handling of property
free or at reduced rates, for the United
States, State, or municipal Governments,
or for charitable purposes.
Section 5 of the Act is amended to expressly apply the provisions
of the Act to the cargos described in Section 6 which move in the do-
mestic offshore trades of the United States. Signing of H.R. 13561
would insure the same statutory standards of reasonableness and fair-
ness to governmental and charitable cargos which presently apply to the
transportation of commercial cargos. The economic regulatory authority
of this Commission over rates charged for the carriage of governmental
and charitable cargos in the domestic offshore trades would be identi-
cal to existing authority over commercial cargos. No additional costs
will be entailed by this Commission should H.R. 13561 become law.
In our testimony before the Congress your office approved and
found in accord with the program of the President, our reason for sup-
porting H.R. 13561: it is inherently unfair for carriers in the domes-
- 2 -
tic offshore trades, commercial shippers, and our offshore citizens to
subsidize by inflated rates governmental or charitable shippers.
Accordingly, the Federal Maritime Commission would recommend that
the President affix his signature to the enrolled bill H.R. 13561.
Sincerely,
Helen Delich Bentley
Chairman
Warren Hundride q.m.
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
11:20
OCT 23 1974
MEMORANDUM FOR THE PRESIDENT
Subject: Enrolled Bill H.R. 13561 - Intercoastal Shipping
Act amendments
Sponsors - Rep. Sullivan (D) Missouri and 5 others
Last Day for Action
October 29, 1974 - Tuesday
Purpose
Eliminates the carriage, storage or handling of governmental
or charitable property free or at reduced rates in the
intercoastal trade of the United States.
Agency Recommendations
Office of Management and Budget
Approval
Department of Commerce
Approval
Department of Transportation
Approval
Federal Maritime Commission
Approval
Department of Defense
No objection
(informally)
General Services Administration
Does not recommend
a veto
Discussion
The Intercoastal Shipping Act authorizes the Federal Maritime
Commission (FMC) to exercise economic regulation of common
carriers by water in the intercoastal trade of the United
States and between the continental United States and the
noncontiguous States and dependencies. Generally, the Act
authorizes the FMC to enforce maximum and minimum rates and
just and reasonable trade practices. Section 6 of the Act
provides, however, that " nothing in this Act shall prevent
the carriage, storage, or handling of property free or at
reduced rates, for the United States, State, or municipal
ACTION
Last Day - October 29
October 25, 1974
MEMORANDUM FOR:
THE PRESIDENT
FROM:
KEN COLE
SUBJECT:
Enrolled Bill H.R. 13561
Intercoastal Shipping
Act Amendments
Attached for your consideration is House bill, H.R. 13561,
sponsored by Representative Sullivan, which eliminates the
carriage, storage or handling of governmental or charitable
property free or at reduced rates in the intercoastal trade
of the United States.
Roy Ash recommends approval and provides you with additional
background information in his enrolled bill report (Tab A).
We have checked with the Counsel's office (Chapman) and
Bill Timmons who both recommend approval.
I
RECOMMENDATION
That you sign House bill, H.R. 13561 (Tab B).
ACTION
Last Day - October 29
October 25, 1974
MEMORANDUM FOR:
THE PRESIDENT
FROM:
KEN COLE
SUBJECT:
Enrolled Bill H.R. 13561
Intercoastal Shipping
Act Amendments
Attached for your consideration is House bill, H.R. 13561,
sponsored by Representative Sullivan, which eliminates the
carriage, storage or handling of governmental or charitable
property free or at reduced rates in the intercoastal trade
of the United States.
Roy Ash recommends approval and provides you with additional
background information in his enrolled bill report (Tab A).
We have checked with the Counsel's office (Chapman) and
Bill Timmons who both recommend approval.
RECOMMENDATION
That you sign House bill, H.R. 13561 (Tab B).
ACTION
Last Day - October 29
October 25, 1974
MEMORANDUM FOR:
THE PRESIDENT
FROM:
KEN COLE
SUBJECT:
Enrolled Bill H.R. 13561
Intercoastal Shipping
Act Amendments
Attached for your consideration is House bill, H.R. 13561,
sponsored by Representative Sullivan, which eliminates the
carriage, storage or handling of governmental or charitable
property free or at reduced rates in the intercoastal trade
of the United States.
Roy Ash recommends approval and provides you with additional
background information in his enrolled bill report (Tab A).
We have checked with the Counsel's office (Chapman) and
Bill Timmons who both recommend approval.
RECOMMENDATION
That you sign House bill, H.R. 13561 (Tab B).
THE WHITE HOUSE
ACTION MEMORANDUM
WASHINGTON
LOG NO.: 696
Date:
October 23, 1974
Time:
12:00 Noon
FOR ACTION:
Michael Duval
CC (for information): : Warren K. Hendriks
Phil Buchen
Jerry Jones
Bill Timmons
Paul Theis
FROM THE STAFF SECRETARY
DUE: Date:
Friday, October 25, 1974
Time:
2:00
p.m.
SUBJECT:
Enrolled Bill H.R. 13561 - Intercoastal Shipping
Act amendments
ACTION REQUESTED:
For Necessary Action
XX For Your Recommendations
Prepare Agenda and Brief
Draft Reply
For Your Comments
Draft Remarks
REMARKS:
Please return to Kathy Tindle - West Wing
No objection
D.C.
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
Warren K. Hendriks
telephone the Staff Secretary immediately.
For the President
THE WHITE HOUSE
ACTION MEMORANDUM
WASHINGTON
LOG NO.: 696
Date:
October 23, 1974
Time:
12:00 Noon
FOR ACTION:
Michael Duval
CC (for information): Warren K. Hendriks
Phil Buchen
Jerry Jones
Bill Timmons
Paul Theis
FROM THE STAFF SECRETARY
DUE: Date:
Friday, October 25, 1974 Time: 2:00 p.m.
SUBJECT:
Enrolled Bill H.R. 13561 - Intercoastal Shipping
Act amendments
ACTION REQUESTED:
For Necessary Action
XX For Your Recommendations
Prepare Agenda and Brief
Draft Reply
For Your Comments
Draft Remarks
REMARKS:
Please return to Kathy Tindle - West Wing
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
Warren K. Hendriks
telephone the Staff Secretary immediately.
For the President
THE WHITE HOUSE
WASHINGTON
October 24, 1974
MEMORANDUM FOR: MR. WARREN HENDRIKS
FROM:
WILLIAM E. TIMMONS
SUBJECT:
Action Memorandum - Log No. 696
Enrolled Bill H. R. 13561 - Intercoastal
Shipping Act amendments
The Office of Legislative Affairs concurs in the attached
proposal and has no additional recommendations.
Attachment
THE WHITE HOUSE
ACTION MEMORANDUM
WASHINGTON
LOG NO.: 696
Date:
October 23, 1974
Time:
12:00 Noon
FOR ACTION: Michael Duval
CC (for information): Warren K. Hendriks
Thil Buchen
Jerry Jones
Bill Timmons
Paul Theis
FROM THE STAFF SECRETARY
DUE: Date:
Friday, October 25, 1974 Time: 2:00 p.m.
SUBJECT:
Enrolled Bill H.R. 13561 - Intercoastal Shipping
Act amendments
ACTION REQUESTED:
For Necessary Action
XX For Your Recommendations
Prepare Agenda and Brief
Draft Reply
For Your Comments
Draft Remarks
REMARKS:
Please return to Kathy Tindle - West Wing
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
K. R. COLE, JR.
telephone the Staff Secretary immediately.
For the President
MEMORANDUM
THE WHITE HOUSE
ACTION
WASHINGTON
Last Day October 29
MEMORANDUM FOR:
THE PRESIDENT
FROM:
KEN COLE
SUBJECT:
Enrolled Bill H.R. 13561
Intercoastal Shipping
Act amendments
Attached for your consideration is House bill, H.R. 13561,
sponsored by Representative Sullivan, which eliminates the
carriage, storage or handling of governmental or charitable
property free or at reduced rates in the intercoastal trade
of the United States.
Roy Ash recommends approval etc.
We have checked with the Counsel's office (Chapman) and
Bill Timmons who both recommend approval.
RECOMMENDATION
That you sign House bill, H.R. 13561 (Tab B).
THE WHITE HOUSE
ACTION MEMORANDUM
WASHINGTON
LOG NO.: 696
Date:
October 23, 1974
Time:
12:00 Noon
FOR ACTION: Michael Duval
CC (for information): Warren K. Hendriks
Phil Buchen
Jerry Jones
Bill Timmons
Paul Theis
FROM THE STAFF SECRETARY
DUE: Date:
Friday, October 25, 1974 Time: 2:00 p.m.
SUBJECT:
Enrolled Bill H.R. 13561 - Intercoastal Shipping
Act amendments
ACTION REQUESTED:
For Necessary Action
XX For Your Recommendations
Prepare Agenda and Brief
Draft Reply
For Your Comments
1
Draft Remarks
REMARKS: OK Mrs Donal
Please return to Kathy Tindle - West Wing
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
Warren K. Hendriks
telephone the Staff Secretary immediately.
For the President
93D CONGRESS
HOUSE OF REPRESENTATIVES
REPORT
2d Session
No. 93-1348
ECONOMIC REGULATION BY FEDERAL MARITIME COM-
MISSION OF GOVERNMENT AND CHARITABLE CARGO
IN U.S. DOMESTIC OFFSHORE COMMERCE
SEPTEMBER 11, 1974.-Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
Mrs. SULLIVAN, from the Committee on Merchant Marine and
Fisheries, submitted the following
REPORT
[To accompany H.R. 13561]
The committee on Merchant Marine and Fisheries, to whom was
referred the bill (H.R. 13561) to amend the Intercoastal Shipping
Act, 1933, having considered the same, report favorably thereon with
an amendment and recommend that the bill as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert in lieu thereof the
following:
That section 5 of the Intercoastal Shipping Act, 1933, as amended (46 U.S.C.
845b), is amended by changing the period to a comma at the end and adding
the words: "and shall apply to the carriage, storage or handling of property
for the United States, State or municipal governments, or for charitable
purposes.".
SECTION 2. Section 6 of the Intercoastal Shipping Act, 1933, as amended (46
U.S.C. 846), is deleted.
PURPOSE OF THE BILL
The purpose of the bill, H.R. 13561, is to provide for economic regu-
lation by the Federal Maritime Commission of ocean freight rates
applicable to the transportation of government and charitable cargo
in the domestic offshore trades of the United States in order to insure
that such rates meet the same statutory standards of reasonableness
and fairness as presently apply to rates charged for the transportation
of commercial cargo in these trades. This purpose would be accom-
plished by deleting Section 6 of the Intercoastal Shipping Act, 1933,
a provision which specifically permits the carriage of government and
charitable cargo in the domestic offshore trades at free or reduced
rates, and by adding language to Section 5 which would expressly
apply the other provisions of the Act to government and charitable
cargo.
38-006
2
3
BACKGROUND OF THE LEGISLATION
the same economic regulatory authority over such rates as it exercises
over commercial rates.
The Shipping Act, 1916, and the Intercoastal Shipping Act, 1933,
In its negotiations with the various steamship companies servicing
authorize the Federal Maritime Commission to exercise economic regu-
our Nation's domestic offshore commerce, the Military Sealift Com-
lation over the rates and practices of common carriers by water in
mand adheres to the Armed Services Procurement Regulations which
the domestic offshore trades of the United States, i.e., the trades be-
disallow a number of substantial operating costs of the carriers,
tween the continental United States and Alaska, Hawaii, Puerto Rico,
thereby producing preferential or lower rates for the carriage of mili-
Guam, American Samoa or the U.S. Virgin Islands. These statutes
tary cargo. These differentials must either be absorbed by the carriers
authorize the Federal Maritime Commission, among other things, to
or passed on to the shipping public, and ultimately to the consumer,
make, approve, suspend, or nullify rules and regulations of common
in the form of higher transportation costs.
carriers by water in the domestic offshore trades; to investigate dis-
The Federal Maritime Commission informed the Merchant Marine
criminatory rates, charges, classifications, and practices of such car-
Subcommittee of your Committee that a recent study by the Commis-
riers; to conduct hearings and make determinations prescribed by law
sion revealed that government military rates for the carriage of several
relating to the regulation of common carriers by water in these trades;
commodities from the West Coast of the United States to Guam ranged
to receive, examine and accept their tariffs for filing; to make analyses
from 12% to 139% below commercial rates. A spot analysis by the
of the financial position of carriers servicing these trades and of their
Commission of the Hawaiian trade showed government military rates
need for increased or lower tariff revenues; and, either upon com-
as much as 122% below commercial rates. A similar analysis of the
plaint or its own motion, to suspend rate changes by carriers servicing
Puerto Rican trade indicated disparities between government and
these trades for a period of four months pending a hearing.
commercial rates of between 5% and 127%.
The Intercoastal Shipping Act, 1933, was originally enacted for the
At the present time there are no tariffs on file with the Federal Mari-
purpose of subjecting carriers operating by water between the United
time Commission for the carriage of charitable cargo in our domestic
States Atlantic/Gulf and Pacific Coasts via the Panama Canal to
offshore trades. It is the view of the Federal Maritime Commission
complete economic regulation by the Federal Maritime Commission's
that if a steamship company wishes to assist a charity, it should make a
predecessor agency. The legislative history of the Act reveals that
direct contribution out of its own profits. The transportation of chari-
Section 6 (originally Section 4) was proposed as an amendment to the
table cargo at free or reduced rates would be included in the operating
introduced bill by the Federal Coordinating Service (a predecessor
expenses of the carrier and may ultimately have to be absorbed by its
agency of the General Services Administration) for the sole purpose
commercial rate payers.
of placing intercoastal steamship carriers on a parity with rail car-
riers, with which they were presumably competing. (Section 22 of the
GENERAL STATEMENT
Interstate Commerce Act permitted railroads to grant reduced rates
to the Government in consideration of their land grants from the
Your Committee has concluded that H.R. 13561, as amended, would
Government).
correct the inequities which have resulted from permitting the car-
In 1938 the provisions of the Intercoastal Shipping Act, including
riage of government and charitable cargo at preferential rates in the
Section 6, were extended to those domestic offshore carriers providing
domestic offshore commerce of the United States. Tariffs covering
service between the continental United States and Alaska, Guam,
these shipments would be required to be filed with the Federal Mari-
Hawaii, Puerto Rico, the U.S. Virgin Islands, or American Samoa.
time Commission in the same manner and for the same regulatory
The Transportation Act of 1940 transferred to the Interstate Com-
objectives as tariffs pertaining to commercial shipments are required
merce Commission jurisdiction over intercoastal water carriers, i.e.,
to be filed with the Commission.
those carriers operating by water between the United States Atlantic/
Under H.R. 13561 the economic regulatory authority of the Federal
Gulf and Pacific Coasts via the Panama Canal, and which the 1933 Act
Maritime Commission over rates charged for the carriage of govern-
was originally intended to regulate. Domestic offshore carriers were,
ment and charitable cargo in the domestic offshore trades would be
therefore, left subject to a statutory provision which was designed
identical with the Commission's present economic regulatory authority
neither historically nor economically for them. Your Committee found
over rates charged for the carriage of commercial cargo in these trades.
that for the past thirty-four years the Federal Maritime Commission
The same standards and cost bases which presently determine appro-
has been in the position of having to administer an anachronism.
priate levels of commercial rates in these trades would be applied in
The principal beneficiary of Section 6 of the 1933 Act has been the
establishing fair and reasonable rates for the carriage of government
Federal Government, primarily the Department of Defense. Pursuant
and charitable cargo. Moreover, shippers of government and charitable
to Section 6, a considerable amount of military cargo is transported
cargo would have the same standing before the Federal Maritime Com-
in the domestic offshore trades of the United States at freight rates
mission as commercial shippers to protest the reasonableness and fair-
which are established through direct negotiation between the Military
ness of rates charged for the carriage of their cargo.
Sealift Command of the Department of the Navy and the carrier. Such
tariffs are filed with the Federal Maritime Commission on an informa-
HEARINGS
tional basis only. Section 6 prevents this Commission from exercising
At the hearings on H.R. 13561 before the Merchant Marine Sub-
committee of your Committee strong testimony in support of the legis-
H.R. 1348
H.R. 1348
4
5
lation was received from the Honorable Spark M. Matsunaga (D-
Hawaii), the Honorable Helen Delich Bentley, Chairman of the
DEPARTMENTAL REPORTS
Federal Maritime Commission; John R. Kuykendall, Vice-President
H.R. 13561 was referred for comment to the Department of Com-
of Matson Navigation Company; and Albert E. May, Vice-President
merce, the Department of Defense and the Federal Maritime Com-
of the American Institute of Merchant Shipping. Statements in strong
mission. The Federal Maritime Commission offered strong testimony
support of the bill were received from the Honorable Antonio Borja
in support of the bill in lieu of a report. The text of reports from the
Won Pat, Delegate from Guam; the Honorable Carlos G. Camacho,
Department of Commerce and the Department of the Navy follow
Governor of Guam; the Transportation Association of America; and
herewith:
the National Industrial Traffic League.
The Military Sealift Command of the Department of the Navy pre-
GENERAL COUNSEL OF THE DEPARTMENT OF COMMERCE,
sented the only adverse testimony on H.R. 13561, which did not repre-
Washington, D.C., July 25, 1974.
sent the position of the Administration.
Hon. LEONOR K. SULLIVAN,
AMENDMENT TO H.R. 13561
Chairman, Committee on Merchant Marine and Fisheries, House of
Representatives, Washington, D.C.
Among the reasons stated by the Military Sealift Command for its
DEAR MADAM CHAIRMAN This is in response to your request for the
opposition to the bill was its belief that if the legislation were enacted,
views of the Department of Commerce concerning H.R. 13561; a bill
the military, in the absence of an express statutory prohibition, would
to amend the Intercoastal Shipping Act, 1933, by deleting section 6
retain a residual or common law right of the sovereign to have its cargo
thereof.
transported at preferential rates. In support of this position the witness
The Intercoastal Shipping Act, 1933, 46 U.S.C. 843-848 (the Act)
cited two decisions by the Federal Maritime Commission and the 1928
provides for the economic regulation of water carriers in the non-
Supreme Court case of U.S. Shipping Board, Emergency Fleet Cor-
contiguous domestic trade by the Federal Maritime Commission
poration V. Western Union Company. The Merchant Marine Subcom-
(FMC). Generally, the Act authorizes the FMC to enforce just and
mittee of your Committee found this argument, as well as the other
reasonable maximum and minimum rates and trade practices. Section
arguments of the Military Sealift Command, to be self-serving,
6 of the Act provides, however, that nothing in the Act shall prevent
without merit, and not representative of the position of the
the carriage, storage or handling of property free or at reduced rates
Administration.
for the United States, State or municipal governments, or for chari-
However, in order to make it clear that the intention of H.R. 13561
table purposes.
is to insure that rates charged for the carriage of government and
The effect of section 6 of the Act has been that substantial amounts
charitable cargo in the domestic offshore commerce of the United
of Federal government cargoes are carried at lower rates than those
States are subject to the same type of economic regulation by the Fed-
applying to commercial cargoes. It can be surmised that a degree of
eral Maritime Commission as the Commission presently exercises over
subsidization of the government rates by the higher commercial rates
commercial rates in these trades, an amendment to H.R. 13561 was
must necessarily result from this disparate treatment of shippers.
presented to the Merchant Marine Subcommittee by the Honorable
Further, the section 6 exemption removes a significant segment of
Frank M. Clark. The Clark Amendment to Section 5 of the Inter-
shipping from regulatory oversight that is intended to protect the
coastal Shipping Act, 1933, specifically applies to the carriage, storage
carriers as well as shippers. As a result of charging unrealistically
and handling of government and charitable cargo all of the existing
low rates in order to obtain government cargoes, the economic viability
provisions of the Intercoastal Shipping Act, 1933. The Amendment
of the carriers and ultimately the service that is available to all ship-
was unanimously adopted by the Merchant Marine Subcommittee.
pers may well be affected.
H.R. 13561 was unanimously reported by both the Merchant Marine
The maintenance of stable rates and services in the trade involved
Subcommittee and by the Committee on Merchant Marine and
requires uniform treatment of all shippers, and under no circumstances
Fisheries.
should private shippers be compelled to subsidize the transport of
COST OF THE LEGISLATION
government cargoes. For these reasons, the Department of Commerce
recommends enactment of the bill.
It is not possible to accurately estimate the cost to the government
The Office of Management and Budget has advised us that there
of H.R. 13561 because such an estimate would depend largely on the
is no objection to the submission of this report and that enactment
future tonnage requirements of the Department of Defense. In re-
of H.R. 13561 would be in accord with the program of the President.
sponse to an inquiry from the Merchant Marine Subcommittee of your
An Administration bill, the Transportation Improvement Act, in-
Committee, the Military Sealift Command of the Department of the
troduced as S. 3237 and H.R. 12891 has a similar provision relating to
Navy testified that the transportation of its cargo in the domestic
section 22 of the ICC Act which is similar to section 6 of the Inter-
offshore commerce of the United States at commercial rate levels
coastal Act.
would result in an increased cost of approximately $5 million annually.
Sincerely,
The Federal Maritime Commission testified that H.R. 13561 would
BERNARD V. PARRETTE,
entail no additional costs to that agency.
Deputy General Counsel.
H.R. 1348
H.R. 1348
6
7
DEPARTMENT OF THE NAVY,
OFFICE OF LEGISLATIVE AFFAIRS,
contracts with various ocean carriers offering service in the domestic
Washington, D.C., August 9, 1974.
offshore trades. The more recent contracts have been negotiated after
Hon. LEONOR K. SULLIVAN,
analysis of cost data furnished by the carriers and audited by the De-
Chairman, Committee on Merchant Marine and Fisheries, House of
fense Contract Audit Agency. The resulting contracts recover all ap-
Representatives, Washington, D.C.
plicable costs plus a profit. Since the Military Sealift Command con-
DEAR MADAM CHAIRMAN: Your request for comment on H.R. 13561,
tracts provide for only three "class" rates (vehicles, refrigerated cargo,
a bill "To amend the Intercoastal Shipping Act, 1933," has been
and cargo not otherwise specified) and commercial tariffs contained
assigned to this Department by the Secretary of Defense for the
hundreds of specific commodity rates, a comparison with commercial
preparation of a report expressing the views of the Department of
rates is difficult. However, since the negotiated military rates are prof-
Defense.
itable, the Government should not be required to pay the commercial
The bill would amend the Intercoastal Shipping Act, 1933 (46
tariff rates, an apparent objective of the bill.
U.S.C. § 843 et seq.) by deleting section 6 thereof (46 U.S.C. § 846),
In view of the above, the Department of the Navy, on behalf of the
which provides that common carriers by water in the domestic off-
Department of Defense, is opposed to the enactment of H.R. 13561.
shore trades may lawfully transport cargo for the U.S. Government,
This report has been coordinated within the Department of Defense
inter alia, at free or reduced rates. (Section 6 of the Intercoastal
in accordance with procedures prescribed by the Secretary of Defense.
Shipping Act is virtually identical in purpose to section 22 of the
While the Office of Management and Budget has no objection to the
Interstate Commerce Act (49 U.S.C. § 22) applicable to transportation
presentation of this report, it has advised us that enactment of H.R.
by surface common carriers regulated by that Act. Bills designed to
13561 would be in accord with the program of the President. An Ad-
repeal section 22 of the Interstate Commerce Act have also been intro-
ministration bill, the Transportation Improvement Act, introduced as
duced (H.R. 12891 and S. 3237).
H.R. 12891, has a similar provision relating to section 22 of the I.C.C.
A fundamental precept in U.S. Government regulation of both land
Act, which is similar to section 6 of the Intercoastal Shipping Act.
and water common carriers is that all shippers should be treated alike
For the Secretary of the Navy.
by the carriers SO that no shipper gains a competitive advantage over
Sincerely yours,
another through preferential or discriminatory arrangements for
E. H. WILLETT,
transportation charges. Such practices are forbidden. Since the Gov-
Captain, U.S. Navy,
ernment in transporting military cargo for defense purposes is not
Deputy Chief.
competing with any shipper, the reason for prohibitions against
preference and discrimination does not exist. Therefore, the Inter-
CHANGES IN EXISTING LAW
state Commerce Act and the Intercoastal Shipping Act, 1933, specifi-
cally provide that a carrier who transports Government cargo at free
In compliance with clause 3 of rule XIII of the Rules of the House
or reduced rates will not be found guilty of engaging in discrimina-
of Representatives, as amended, changes in existing law made by the
tory or preferential practices which would be condemned if accorded
bill as reported are shown as follows (existing law proposed to be
one commercial shipper, but not another.
omitted is enclosed in black brackets, new matter is printed in italic,
Pursuant to 46 U.S.C. § 883, only U.S.-flag vessels may engage in
existing law in which no change is proposed is shown in roman)
ocean transportation in the domestic offshore trade (i.e., between the
48 contiguous states and Alaska, Hawaii, Puerto Rico and other U.S.
SECTIONS 5 AND 6 OF THE INTERCOASTAL SHIPPING ACT, 1933, AS AMENDED
overseas territories and possessions). Since the Government has pro-
tected U.S.-flag carriers serving these trades from foreign-flag com-
(47 Stat. 1427, 46 U.S.C. 845b, 846)
petition, it is not unreasonable to expect that the protected U.S.-flag
carriers may lawfully accord the Government reduced rates under
SEC. 5. The provisions of this Act are extended and shall apply to
appropriate circumstances.
every common carrier by water in interstate commerce, as defined in
The Government's entitlement to transportation services at reduced
section 1 of the Shipping Act, 1916, and shall apply to the carriage,
rates has been supported on a broad basis. Nashville, Chattanooga &
storage or handling of property for the United States, State or mu-
St. Louis Railway et al. v. Tennessee, 262 U.S. 318 (1923) ; In the
nicipal Governments, or for charitable purposes.
Matter of the Carriage of Military Cargo, 10 FMC 69, 81 (note 19)
[SEC. 6. That nothing in this Act shall prevent the carriage, storage,
(1966) ; Assembly Time-Port of San Diego, 13 FMC 1, 6 (note 7)
or handling of property free or at reduced rates, for the United States,
(1969) ; Emergency Fleet Corporation, U.S. Shipping Board V. West-
State, or municipal Governments, or for charitable purposes.
ern Union Telegraph Company, 275 U.S. 415, 425 (1928).
In addition, the bill is not needed to ensure that military rates do
not burden commercial rates, which appears to be a purpose of the bill.
At the present time the Military Sealift Command has entered into
H.R. 1348
H.R. 1348
CORRECTED SHEET
H. R. 13561
Ninety-third Congress of the United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Monday, the twenty-first day of January,
one thousand nine hundred and seventy-four
An Act
To amend the Intercoastal Shipping Act, 1933.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, That section 5 of the
Intercoastal Shipping Act, 1933, as amended (46 U.S.C. 845b), is
amended by changing the period to a comma at the end and adding
the words: "and shall apply to the carriage, storage or handling of
property for the United States, State or municipal governments, or for
charitable purposes.".
SEC. 2. Section 6 of the Intercoastal Shipping Act, 1933, as amended
(46 U.S.C. 846), is deleted.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.
HH
October 17, 1974
Dear Mr. Director:
The following bills were received at the White House on
October 17th:
S.J. Res. 236
S. 2840
H.R. 7768
H.R. 14225
S.J. Res. 250
S. 3007
H.R. 7780
H.R. 14597
S.J. Res. 251
S. 3234
H.R. 11221
H.R. 15148
S. 355
S. 3473
H.R. 11251
H.R. 15427
S. 605
S. 3698
H.R. 11452
H.R. 15540
S. 628
S. 3792
H.R. 11830!
H.R. 15643
S. 1411
S. 3838
H.R. 12035
H.R. 16857
S. 1412
S. 3979
H.R. 12281
H.R. 17027
S. 1769
H.R. 6624
H.R. 13561
S. 2348
H.R. 6642
H.R. 13631
Please let the President have reports and recommendations
as to the approval of these bills as soon as possible.
Sincerely,
Robert D. Linder
Chief Executive Clerk
The Honorable Roy L. Ash
Director
Office of Management and Budget
Washington, D. C.