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composed of both public and private terminals, sir. They are all joined together in the same conference agreement, are all subject to the same regulation by the Federal Maritime Board-all rates and charges and practices are filed with the Federal Maritime Boardand extensive rate hearings have been held before that agency both by the Northwest group and also by the California group, sir.

The CHAIRMAN. So there are uniform charges for all of those terminal facilities however they may be owned?

Mr. GRAHAM. That is correct, sir. Not only are the charges required by the terms of the agreement to be just and reasonable and with uniform rates, but that contractual obligation is the obligation which is enforced by the Maritime Board and in the rate proceedings before the Federal Maritime Board the rate structures are obviously the same for all of the ports in the respective areas.

The CHAIRMAN. If there are no questions, you may stand aside. We are glad to have your views.

Mr. NICHOLSON. Is the Maritime Board appointed by the Gov

ernor?

Mr. GRAHAM. The Maritime Board, sir, was formerly the United States Maritime Commission, an independent agency of the United States Government. It is now known as the Federal Maritime Board, and under, I believe, Reorganization Order No. 21, if I recall correctly; the functions of the Maritime Commission were transferred to the Department of Commerce and the Maritime Board, I believe, technically, is under the jurisdiction of the Department of Commerce at the moment.

It is a Federal board, sir, it is not a State regulatory body.

Mr. NICHOLSON. Well would this not have one Federal branch of the Government opposing the other?

Mr. GRAHAM. That is precisely the predicament we have been in since last June at this time, and a principal objection to the present interpretation of the statute by the Office of Price Stabilization is that we are placed in the impossible situation of regulation by two agencies.

As pointed out in our statement, it is entirely probable-not only possible that in the conflicting regulations, if the public ports, which have been decontrolled, should advance the tariffs which they publish, and in which the private terminals concur, the private terminals, for example, would be placed in violation of the Shipping Act, as well as the Defense Production Act.

The CHAIRMAN. You make your charges conform to the charges that have been fixed by the Maritime Board?

Mr. GRAHAM. I beg your pardon, sir?

The CHAIRMAN. Are your charges comparable to the charges fixed by the Maritime Board for other terminal facilities?

Mr. GRAHAM. Well, they are fixed by the Maritime Board, sir. Public ports, as well as private ports, have been held to be subject to the jurisdiction of the Maritime Board, and all of the terminal operators, whether they be public or private, must file their tariffs with the Federal Maritime Board under these agreements to which I have referred. And, as may be indicated by reference to the Maritime Board docket proceedings, those tariffs are subject to the express approval, in the event the Board, on its own motion, or upon complaint, or upon petition of the filing parties, undertakes an investigation of the rates.

And that has been done, sir, in times past. There was one proceeding closed only in recent months, so far as the Pacific Northwest is concerned, sir.

The CHAIRMAN. If there are no further questions, you may stand aside, sir.

Mr. GRAHAM. Thank you, Mr. Chairman.

(The following statement was submitted by Daniel B. Goldberg, for inclusion in the record of the hearing:)

STATEMENT BY DANIEL B. GOLDBERG, ASSISTANT GENERAL COUNSEL OF THE PORT OF NEW YORK AUTHORITY, ON BEHALF OF THE AMERICAN ASSOCIATION OF PORT AUTHORITIES, INC., AND NORTHWEST MARINE TERMINAL ASSOCIATION, CALIFORNIA ASSOCIATION OF PORT AUTHORITIES, NORTH ATLANTIC PORTS ASSOCIATION, GULF PORTS ASSOCIATION, AND SOUTH ATLANTIC PORTS CONFERENCE

Mr. Chairman and members of the committee, I appear on behalf of the United States members of the American Association of Port Authorities, Northwest Marine Terminal Association, California Association of Port Authorities, North Atlantic Ports Association, Gulf Ports Association, and South Atlantic Ports Conference to support legislation such as H. R. 7079, to clarify the exemption of public utilities in the Defense Production Act so as to assure that charges made by State and municipal agencies, including public port authorities, are not subject to a duplicative control by the Office of Price Stabilization.

The American Association of Port Authorities is an organization made up of the State and municipal governing boards and bodies having jurisdiction over the public ports of the United States. There are more than 50 corporate member ports of the American Association of Port Authorities, including, among others, such ports as Boston, New York, Philadelphia, Norfolk, Charleston, Savannah, Miami, Mobile, New Orleans, Galveston, Houston, Long Beach, Los Angeles, San Francisco, Seattle, Portland, Milwaukee, Toledo, and many more. The other associations which I represent are regional groups of such ports.

Ports and marine terminals are traditionally complex service organizations, carrying on three distinct lines of activity combined under one administration. First, there is the wharfinger activity having to do with furnishing dock facilities and services to vessels and vessel cargoes during the so-called free time period during which the cargoes remain on the piers. Secondly, there is the activity of renting structures or open land along the water front in port and terminal areas to tenants extensively engaged in shipping by water. The third activity is public warehousing designed to accommodate water-borne tonnages which remain in the port areas beyond the free time period permitted on the piers themselves in situations where the owners of cargo do not desire to rent structures or open areas for exclusive use or to act as their own custodian of the cargo.

Most of the ports in this country providing this complex of services are administered by public agencies. Certain of our public corporate members are agencies or departments of their local governments; others are State commissions; and still others are public authorities, independently incorporated. Almost all of the port commissioners are unpaid public servants, appointed by governors, mayors, city councils, or in some cases by local election.

My testimony here relates to section 402 of the Defense Production Act of 1950, wherein, in subsection (e) (v), the act provides, with reference to the stabilization of prices, in part as follows:

"(e) The authority conferred by this title shall not be exercised with respect to

"(v) Rates charged by any common carrier or other public utility;". Briefly stated, it is our view that in the interests of the foreign and domestic water-borne commerce of the United States, the American merchant marine, and the operation of public ports in the United States, the rates and charges for services rendered by public ports are not and should not be subject to Federal price control in addition to Federal Maritime Board regulation. Our purpose would be served by H. R. 7079.

This problem is a real and present one to the public ports who find the established pattern of port operation disrupted by attempts at OPS regulation in spite of the obvious intent of the act to exempt them as public utilities.

For example, the port of Seattle and the port of Tacoma are presently contesting in the Emergency Court of Appeals an OPS ruling to the effect that these public port organizations are not public utilities within the meaning of the congressional

exemption. It is the position of these ports in the litigation that the Defense Production Act exempts them as it stands. But the advantages must be obvious of having the Congress clarify its intent so as to make unnecessary any further controversy between the public officials who administer our ports and the representatives of the Office of Price Stabilization.

The effect upon the public ports goes far beyond the two cases of litigation just mentioned. The mere pendency of OPS regulation claims has made for hesitancy and disruption in the closely interrelated operations of port commerce.

In general, public port operators hope merely to cover the cost of operation of their terminal facilities while tax moneys meet the debt for capital expense. If an increase in the cost of operation cannot be met with an increase in charges against the persons who use our terminal facilities, then in most of our ports the only recourse we have is to add to the taxpayer's existing burden of our capital expenditures the further burden of making up our operating deficits. In other words, the choice is not only one of increasing or not increasing port charges, but of increasing port charges as against increasing taxes in the community in which our facilities are located.

The OPS interpretation of the act appears to be that outside regulation is necessary before a facility can be classed as a public utility and exempt under the act. The OPS, nevertheless, not as a matter of statutory exemption but under its authority to issue general overriding regulations, originally exempted almost all of the services provided by public agencies whether or not subject to outside regulation. The exception was in the case of public port operators. And yet, peculiarly enough, that is almost the only field of State and local operation which already is subject to Federal regulation. I refer to the decision of the Supreme Court against the State of California under which public port operators are "other persons" subject to regulation by the Federal Maritime Board under the Shipping Act.

More recently, however, apparently as the result of chiding by the Senate Banking and Currency Committee, the Director of Price Stabilization has repealed the exception so that, at the present time, his general overriding regulation exempts all public service charges including those by our public port agencies.

However, we cannot consider this action adequate. It does not recognize the statutory right of our public port agencies to an exemption granted by the Congress. In fact, by using the vehicle of a general overriding regulation, it actually asserts the right at any time to impose price control on public port charges regardless of the intent of Congress.

The present OPS position contrasts vividly with the position taken by its predecessor agency, the Office of Price Administration, under the identical congressional exempting language in the former act. In a United States Maritime Commission proceeding based upon certain price increases proposed by various of our port members in the State of California, the OPA did not take the position that it could disapprove the price increases. On the contrary, it protested to the Maritime Commission, recognizing the right of the ports to disregard OPA protests and recognizing that the only Federal control over such price increases was vested in the Maritime Commission.

An historical study of the trend of prices for port services reveals another cogent argument against superimposing OPS price control upon local control and Federal Maritime Board control. Traditionally, port operation is a depressed operation economically, with net revenues usually below the cost of providing the facilities and services. There has existed no inflationary tendency to push prices upward during times such as the present and so there is no need for price control. As a matter of fact, the price level of port operations has been responsive to depression conditions causing wholesale reduction in prices without any corresponding tendency upward during times of intense business activity. It is a truism among American public port operators that they are perpetually in a struggle to be even self-supporting.

Other incongruities arise from OPS attempts at regulation of public ports. A seaport is a point of interchange between common carriers, which the act says are not subject to regulation. Both principal types of common carriers, railroads and steamship lines, are themselves operators of port facilities, in some cases in competition with public port bodies. This gives rise to a peculiar situation in which, in the view of OPS, privately owned terminals may not be subject to regulation while publicly owned terminals are under OPS control.

Let me give a recent example. The port of Beaumont performs car loading and unloading services for the various railroads entering the port as their agent for this service, billing the railroads. On the occasion of a recent port labor wage increase, the port notified the railroads of an increase in cost of the service. The

railroads in turn notified the shippers involved and as exempt common carrier, began to collect the increase from the shippers. The railroads, however, would not pass the increase along to the port without OPS approval.

This port sought relief with OPS, preserving its legal right to assert its statutory exemption. This relief was granted, but not retroactively, with the result of a net loss to the port. The net result was that the OPS interpreted the congressional intent to permit the railroads to increase their charge for the service performed by the port and refused to acknowledge that the public port operator was covered by the same congressional exemption. It is the possibility of such an interpretation and confusion resulting therefrom which we are seeking to avoid by this petition for the enactment of H. R. 7079.

Those in OPS who seek to regulate port charges apparently overlook the effect of the express exemption of rentals of real estate. Thus, certain ports traditionally employ the method of renting their piers to individual water carriers for stated periods of time. Other public pier operators, for one reason or another, employ the method of holding themselves out as public wharfingers, charging on a tariff or public utility basis. The choice of technique is with the local port authority. Yet the OPS contends that the port operator who chooses the rental technique has been exempted by Congress but that the port operator who acts as a public wharfinger has no exemption. So far as the effect of charges for public terminal facilities is concerned, there is no difference between the two methods of procedure, although the OPS purports to see a different congressional intent in the two cases.

In another respect, the position of the OPS would give to this Federal agency the final word to decide upon the survival or destruction of port operations entrusted to local officials by State governments. That situation recently occurred in the case of the port of Olympia, Wash. The public port operater was faced with an economic inability to survive without an increase in its charges. We would contend as a matter of policy and as a matter of congressional intention under the act that the decision as to whether those charges should be increased and the port should continue to function was within the sphere of local government and was not an OPS function. Yet OPS insisted that the decision could not be made without its approval and proudly proclaimed in a press release that it had, as a matter of its grace, permitted the increases in charges which made the difference between the continuance or discontinuance of this State function.

It has seemed to us that the OPS position has not only the fault of incongruity and is not only vicious as a violation of our dual form of government, but actually it attempts to legislate by administrative fiat what the Congress has expressly refused to legislate. I refer to the amendment introduced by Congressman Kennedy in 1951 which the House of Representatives actually adopted and which would have limited the public utility exemption to situations in which the public operator's charges are subject to outside control by some public regulatory body. You will see that the substance of this amendment embodied exactly the same interpretation which the OPS now gives to the term “public utility.” Without the amendment, the term was unqualified. The amendment would have introduced the qualification of outside public regulation. But the amendment was not accepted by the Senate and it failed of enactment. That would seem to us to have disposed of any possibility of imputing to Congress an intention to qualify the public utility exemption. But the OPS continues to insist that the term is qualified anyway. In other words, it seeks by its administrative interpretation to substitute itself for the Congress and accomplish the result which Congress refused to enact.

H. R. 7079 would confirm the congressional intention to exempt port operators as public utilities. While my representation is on behalf of public agencies, we also support the provisions of H. R. 7079 which would make clear that the public utility exemption in the existing legislation applies also to the private port operators who are already subject to the Federal Shipping Act of 1916. The interest of public agencies in this feature of the bill arises from the fact that in many areas public port authorities have entered into agreements with private operators under section 15 of the Shipping Act with the approval of the Federal Maritime Board so that they may not increase their charges above the level of charges made by the private operators with whom they have agreed. The result is that so long as the private operators are prevented from effectively raising their charges when necessary because of OPS opposition, the public bodies are unable, because of section 15 of the Shipping Act, to raise their charges although these latter have been decontrolled.

Of course, there is no danger from the proposal to clarify the exemption of private operations as well as public. The private operators may not increase

their charges beyond the levels agreed to by the public operators and we have already established that the public operators will not agree to rates which are oppressive upon the public. Furthermore, under section 15 of the Shipping Act, we already have one Federal regulatory agency, the Federal Maritime Board, which has jurisdiction to approve or disapprove all changes in rates by signatories to agreements under section 15 of the Shipping Act. Superimposition of OPS jurisdiction is not only unnecessary, but would inevitably interfere with the discretion delegated to the Maritime Board with regard to both public and private operators in this respect.

Our support for H. R. 7079 is therefore made to clarify the intention of Congress, to avoid discrimination between public and private port operators and between public agencies operating ports and operating other facilities, to avoid the necessity of continued litigation between State and Federal officials, to avoid conflict between two Federal agencies, and to leave to the local representatives of the people the decision as to the best method of defraying increases in the cost of local services.

I am submitting, with the committee's permission, a copy of the American Association of Port Authorities resolution on the subject for inclusion in the record. With the committee's permission, also, I should like to have included in the record a statement by the California Association of Port Authorities and the Northwest Marine Terminals Association on the subject. It was filed in support of S. 2722 with the Senate Banking and Currency Committee; while it is nominally addressed to that Senate bill, it applies equally to H. R. 7079, the companion bill in the House.

Thank you.

The CHAIRMAN. The clerk will call the next witness.

The CLERK. The next witness is Mr. C. L. Snavely, representing the National Association of Frozen Food Packers.

The CHAIRMAN. You may proceed, Mr. Snavely.

STATEMENT OF C. L. SNAVELY, PRESIDENT, NATIONAL
ASSOCIATION OF FROZEN FOOD PACKERS

Mr. SNAVELY. My name is Clarence Snavely. I am president of the Consumers Packing Co. of Lancaster, Pa., and also president of the National Association of Frozen Food Packers. This association is a voluntary, nonprofit trade association whose members produce approximately 75 percent of the national volume of frozen fruits, vegetables, and juices.

The position of the National Association of Frozen Food Packers in regard to price control is clearly set forth in the following resolution, unanimously adopted by its board of directors at a meeting held March 6, 1952:

The National Association of Frozen Food Packers, being conscious of the dangers of inflation to the American economy and of the potentially serious consequences of inflation upon the frozen fruit, berry, vegetable, and juice industry, but being vigorously opposed to nonessential and uneconomic price controls, submits the following considerations and resolution for the attention of the Office of Price Stabilization:

That, as of February 1, 1952, supplies of frozen fruits, berries, vegetables, and juices were 12 percent greater than on the same date of 1951;

That during the year 1951 the average consumer purchased 30 percent more frozen fruits, berries, vegetables, and juices than in 1950, according to the report of Industrial Surveys, Inc.;

That in 1951 the Quartermaster Corps of the Army purchased 100 percent more of those products than it purchased in 1950;

That, despite this greatly increased usage during that period, retail prices of those products, as calculated by the Bureau of Labor Statistics, declined 5 percent; That it is evident that under present conditions supplies of such products are adequate to meet existing and prospective civilian and military demand;

That it is further evident that price controls on such products are not necessary for the protection of consumers;

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