AMERICAN TRADE AND FOREIGN SHIPPING MONOPOLIES.

MAY 1, 1912.-Referred to the House Calendar and ordered to be printed.

Mr. HUMPHREY of Washington, from the Committee on the Merchant Marine and Fisheries, submitted the following

REPORT.

[To accompany H. R. 23470.]

The Sherman antitrust law invests the several courts of the United States with jurisdiction to prevent and restrain violations of the act, and the Supreme Court has given very broad construction to this enactment. In the Northern Securities case (193 U. S., 197) Justice Harlan, in writing the opinion of the court, said:

If there was a combination or conspiracy in violation of the act of Congress between the stockholders of the Great Northern and the Northern Pacific Railway Cos., whereby the Northern Securities Co. was formed as a holding corporation, and whereby interstate commerce over the lines of the constituent companies was restrained, it must follow that the court, in execution of that act, and to defeat the efforts to evade it, could prohibit the parties to the combination from doing the specific things which, being done, would affect the result denounced by the act. To say that the court could not go so far is to say that it is powerless to enforce the act or to suppress the illegal combination, and powerless to protect the rights of the public as against that combination. (Pp. 356–357.)

In the case of United States v. American Tobacco Co. the court held that, in order to enable it to award relief coterminous with the ultimate redress of the wrongs which it found to exist, it must approach the subject of relief from an original point of view, and stated that

We might at once resort to one or the other of the two general remedies-(a) the allowance of a permanent injunction restraining the combination as a universality and all the individuals and corporations which form a part of or cooperate in it in any manner or form from continuing to engage in interstate commerce until the illegal situation be cured, a measure of relief which would accord in substantial effect with that awarded below to the extent that the court found illegal combinations to exist; or (b) to direct the appointment of a receiver to take charge of the assets and property in this country of the combination in all its ramifications for the purpose of preventing a continued violation of the law, and thus working out by a sale of the property of the combination or otherwise, a condition of things which would not be repugnant to the prohibitions of the act. (221 U. S., pp. 186–187.)

Nevertheless, for the reasons stated in the opinion, the court remanded the case to the circuit court for the purpose of working out a plan or method of dissolving the combination before the court in that case and of recreating out of the elements composing it a new condition honestly in harmony with and not repugnant to the law.

In the equity suits brought by the Attorney General against the North Atlantic shipping pool and the Asiatic shipping pools, respectively, the prayer for relief, among other things, asked the court to adjudge the combination to be illegal and to enjoin the ships employed in the combination from making clearance at the ports of the United States until such combination shall be dissolved. There seems to be no doubt of the power of the Federal courts under the act, as construed by the Supreme Court, to award such relief, if it shall deem it necessary, in order to accomplish the ends of justice; but such relief would be secured under the existing law only by way of injunction against the owners of the ship from making entry or applying for clearance, whereas there is no distinct prohibition against the officials of the United States acting upon such applications. In order to make it perfectly clear that in case of an adjudication that an unlawful combination of shipowners exists in violation of the Sherman antitrust law, a dissolution of that combination may be effectually secured by prohibiting all entry and clearance privileges until the combination is dissolved. This bill makes it unlawful for such vessel or vessels to so enter or clear until the court shall find that the unlawful combination has been dissolved and imposes a penalty upon the vessel which makes entry or clearance in violation of the provisions of such decree. It also authorizes and directs the Postmaster General to cancel any contract for carrying the ocean mails upon satisfactory evidence to him that any vessel performing such service under such contract at the time of performing service is owned, operated, or controlled by any party to such unlawful combination.

The act, therefore, makes more effectual the remedies for violation of the law and will tend to compel foreign shipowners to respect a law which they are now systematically violating.

It is a matter of common knowledge that more than 90 per cent of the over-sea trade of this country is carried by foreign ships that belong to rings, pools, conferences, and combines. Between these ships there is absolutely no competition. Each conference or combine is a complete monopoly. Freight and passenger rates are fixed by agreement. The lines in these combines distribute the business, pool their earnings, and divide their profits. They agree as to the number of vessels that each company shall run. They agree as to the amount of traffic that each line shall carry. They combine to drive out any independent lines. To do this they designate what they call "fighting" ships, and these ships are run over the same course on practically the same schedule as the independent vessels, with instructions to cut rates to any extent necessary to drive the independent line out of business. When this is accomplished the loss sustained is divided among the lines in the combine.

These foreign steamship monopolies also largely dictate the ports of this country through which both freight and passenger traffic shall pass. They also largely control railroad rates in this country, both freight and passenger. Our railroad agents are instructed that they will

receive no commission on the sale of passenger tickets from interior points to Europe unless that ticket reads over one of the conference lines of steamships.

These foreign monopolies also practice the rebate system in all its iniquitous and devious ways. The rate that every ton of freight and every passenger must pay to cross the Atlantic Ocean is fixed by written agreement made in advance in Europe. In the fixing of these rates American interests are not considered. Only the interests of the foreign steamship lines are represented.

The foreign steamship combinations carrying our over-sea trade are the most complete monopolies in the world. Being monopolies, their rates are unjust and oppressive. The rates between this country and Europe and between this country and South America are exorbitant and far higher than a fair compensation for the services performed. These combines annually unjustly levy millions upon American commerce. To a great extent they have destroyed our foreign trade, not only by exorbitant freight rates, but by discriminating against us in all the ports of the world in favor of the products of their own country. These lines admit all the charges that have been made against them-that they are in combination to suppress competition; to fix rates; to increase their earnings; to advance the commercial interests of the nation whose flag they fly. They admit that they openly violate our law. Their answer to these charges is that what they do is legal in their own country; that they do not believe in the laws of our country or have any respect for them, and they ask this question: "We are foreign ships belonging to foreign corporations and owe allegiance to a foreign government and if we do not choose to obey your laws what are you going to do about it?"

This bill is answer to this impudent and defiant question. This country will not have one law for our own people and another for the foreigner that does business in this country. We are to-day in a most humiliating condition. Our ships have practically disappeared from the sea. Our commerce is at the mercy of foreigners. They dictate the terms upon which it is carried and openly violate our laws. It is not conceivable that this Government stands helpless before this giant foreign monopoly.

It is the unanimous report of the committee that the bill do pas.

2d Session.

No. 633.

LEGISLATIVE, EXECUTIVE, AND JUDICIAL APPROPRIATION BILL.

MAY 1, 1912.-Committed to the Committee of the Whole House on the state of the Union and ordered to be printed.

Mr. JOHNSON of South Carolina, from the Committee on Appropriations, submitted the following

REPORT.

[To accompany H. R. 24023.]

In presenting the bill making appropriations for the legislative, executive, and judicial expenses of the Government for the fiscal year ending June 30, 1913, the Committee on Appropriations submit the following in explanation thereof:

The estimates on which the bill is based will be found on pages 9 to 108, inclusive, of the Book of Estimates for the fiscal year 1913, and amount to $35,684,347.40.

The total appropriations made for the current fiscal year 1912 for the objects provided for in the accompanying bill amount to $36,157,209.85, which sum includes $500,000 for the Thirteenth Census, appropriated at the present session in the urgent deficiency act, and also $225,665, the amount expended at the mints during the fiscal year 1911 out of the permanent appropriation for parting and refining bullion, which sum is used by the Treasury in approximating the total appropriations for mints and assay offices for the fiscal year 1912. The permanent appropriation in question is repealed, to take effect at the close of the current fiscal year, and therefore specific appropriations are necessarily made in this bill in its stead for the next year.

The accompanying bill appropriates $33,519,594.06 and makes specific appropriations for 14,877 salaries.

Comparing it with the appropriations for the current year and with the estimates submitted to Congress for the ensuing fiscal year, the following results are shown, namely:

It appropriates $2,637,615.79 less than was appropriated for the same service for the current year.

It appropriates $2,164,753.34 less than was submitted to Congress in the estimates of the departments.

It provides for 406 fewer specific salaries than are appropriated for this year.

It provides for 706 fewer salaries than were recommended in the estimates, or 603, less than were specifically estimated for after deduct