UNION OF SOVIET SOCIALIST REPUBLICS

With the exception of the combination passenger and cargo service between Leningrad and London, during the ice-free months, the Soviet Union does not maintain scheduled liner services.

Like other industries, shipping in the Soviet Union is a monopoly of the State. The People's Commissariat for Water Transport establishes rates for the transportation of merchandise and passengers on Soviet vessels. Authorization therefor is contained in a decree bearing the date of February 2, 1932, which appears in the Collection of Laws and Orders of the Workers' and Peasants' Government of the Union of Soviet Socialist Republics, 1932, No. 8, article 43b, paragraph 2 "o."

The People's Commissariat for Water Transport has the following functions: * ** Draws up and applies, in the prescribed manner, rates for the transportation of passengers, baggage, and freight by water and in direct railway and water communications and rates of additional charges connected with the effecting of water transportation.

SOVIET UNION DOES NOT PARTICIPATE IN CONFERENCES

The rates established by the People's Commissariat, referred to in the preceding paragraph, are determined independently of foreign shipowners, inasmuch as the Soviet Union does not participate in international shipping conferences. This does not mean, however, that Soviet vessels adhere to a policy of under-cutting the rates of foreign vessels. The Soviet Journal "Foreign Trade," No. 7 of April 15, 1936, comments as follows with respect to the employment of Soviet vessels: "The facts have shown that Soviet boats are fair competitors for the business, their rates on coal, for example, having been seldom below, and often above those quoted by other maritime carriers."

The Soviet merchant marine, in its present stage of development, is a factor in the freight market, mainly with respect to Soviet trade. The employment of Soviet vessels between foreign ports has not been negligible, however, inasmuch as 10 percent of the total cargo carried by Soviet vessels in 1936 was foreign cargo. The actual amount thereof is not stated, but presumably it was greater than that carried in 1935, which reached the figure of 625,000 tons.

"SOVFRAKHT" CHARTERS FOREIGN SHIPS

To the extent that foreign ships are necessary to supplement national ships, they are chartered by Sovfrakht (the All-Union Combine for the Chartering of Foreign Ships), Moscow.

For many years Soviet chartering of foreign vessels was transacted abroad through officers maintained at such ports as Oslo, Stockholm, Hamburg, and London. Transfer of this business to the Soviet Union, however, was begun in April 1935, and by the end of 1936 it was reported that the proportion of foreign tonnage chartered directly from Moscow and Leningrad had reached 70 percent of the total. Comment by the Union of Soviet Socialist Republics Chamber of Commerce was to the effect that the transfer had led to centralization of the work and to the promotion of better relations with foreign shipowners and shipbrokers; moreover, that an increasing number of owners and brokers were making personal visits to the

Union of Soviet Socialist Republics and representatives of Sovfrakht were making regular journeys to foreign shipping markets. The chamber also reported that telephone communications had been established with all shipping markets.

SOVIET FLEET CARRIES MOST OF FOREIGN TRADE

The development of the Soviet fleet is indicated by the following extract from an article published in the Monthly Review of March 1938, issued by the Union of Soviet Socialist Republics Trade Delegation in the United Kingdom.

Important changes took place in connection with the Soviet marine in the period of the second Five-Year Plan. Both the capacity and the quality of the Soviet fleet improved; more Diesel-engined vessels were constructed. Shipbuilding became specialized and the most modern American and European methods of construction were introduced. The Union of Soviet Socialist Republics built in that period, and ordered from abroad a number of timbercarrying vessels, oil tankers, refrigerating vessels, and so on. Another change was that larger vessels were built for the Soviet fleet.

The following index table shows the changes that have taken place in the Soviet fleet and in world mercantile tonnage between 1929 and 1936:

1

While under the first Five-Year Plan, in the period 1928-32, transport in Soviet vessels increased from 7,900,000 to 14,800,000 tons, in the years of the second plan 1933-37, the transportation capacity of the Soviet fleet increased from 14,800,000 tons in 1933, to 30,800,000 in 1936. The increase in the capacity of the Soviet Fleet is seen in the increase in the quantities of goods carried in Soviet vessels. The following table shows the growth in the percentage of transportation.

Growth in the Percentage of Transportation

PEOPLE'S COMMISSARIAT FOR FOREIGN TRADE ACTS AS SHIPPER

The actual handling of goods shipped to and from the Soviet Union is under the control of the transport division of the People's Commissariat for Foreign Trade. This organization is subdivided into regional agencies for convenience as follows:

Dalvneshtrans (The Transport Agency for handling foreign cargoes and goods in the far eastern region of the U. S. S. R.), Vladivostok.

The term "capacity" is not explained.

Lenvneshtrans (The Leningrad transport agency for handling foreign cargoes and goods), Leningrad.

Yuzhyneshtrans (the transport agency for the handling of foreign cargoes and goods in the south of the U. S. S. R.), Odessa.

There are, moreover, certain export combines included in the system of the People's Commissariat for Foreign Trade which represent shippers of Soviet goods and which are empowered to conduct certain foreign trade transactions. A list of these follows:

Eksportlen (the all-union combine for the export of flax and hemp and the products of flax and hemp cultivation), Moscow.

Eksportles (the all-union combine for the export of timber and timber products), Moscow.

Eksportstroi (the all-union combine for the installation of Soviet machines and equipment exported to eastern countries, and for technical assistance to such countries), Moscow.

Raznoeksport (the all-union combine for the export of miscellaneous articles),

Moscow.

Soyuznefteeksport (the all-union combine for the export of petroleum and petroleum products), Moscow.

Soyuzpromeksport (the all-union combine for the export of industrial goods),

Moscow.

Soyuzpushnina (the all-union combine for the export of furs and skins),

Moscow.

Soyuzugleeksport (the all-union combine for the export of coal), Moscow. Tekhnoeksport (the all-union combine for the export of technical products),

Moscow.

Eksportkhleb (the all-union combine for the export of grain products),

Moscow.

Intorgkino (the all-union combine for the export and import of motion picture films, photo-chemicals, and motion picture equipment), Moscow.

Mezhdunarodnaya kniga-antikvariat (the all-Union Combine for the Import and export of lithographic products, office supplies, and antiques), Moscow. Promsyreimport (the all-union combine for the import of cotton, jute, other textile raw materials and chemicals quoted on the exchanges of non-ferrous metals, and India rubber; and for the export of cotton), Moscow.

Soyuzfoto (the all-union trust for the publishing of photographs and photoillustrations), Moscow.

OTHER COUNTRIES

ARGENTINA

A number of liner conferences operate in the trade of Argentina. They vary somewhat in their organization, but are without distinctive features. Inasmuch as the trade is served altogether by foreign shipping companies, the headquarters of these companies and of their conferences are located abroad. The lines employ the contract system to some extent in the trade to the United States and either the contract or the deferred rebate system in the trade to Europe. Rate negotiations by shippers are more or less informal, as there are no trade organizations active in collective bargaining.

The outstanding development in recent years affecting Argentina has been the establishment, by the tramp shipping administrative committee, beginning in 1935, of the River Plate minimum freight scheme applicable to both liner and tramp rates on grain to Europe. This scheme is described at length in the section on the United Kingdom.

The Argentine Government does not exercise any authority over

rates.

BELGIUM

Lines out of Belgium generally hold membership in one or more of the many conferences that fix rates from the whole continental range of ports, among them being Antwerp which ranks in importance with Hamburg and Rotterdam.

The proceedings and agreements of the conferences are held confidential. Tarifl's likewise are not made public and are circulated only to general port agents. The reason given for withholding tariffs is the lack of uniformity in rate quotations. When copies of tariffs were supplied to all representatives of a line, it often occurred that numerous additions and amendments were not received promptly; resulting in an agent quoting a different rate than a subagent in a remote locality on the same day.

Applications for adjustments are submitted by individual shippers, also by trade associations and chambers of commerce, the principal ones being the Asociation des Importateurs et Exportateurs (Association of Importers and Exporters) and the chambers of commerce in the various cities. These chambers have among their members the majority of firms or individuals composing such organizations as the Union of Forwarding Agents and the Union of Merchants and Exporters, and it is generally through the chambers of commerce that representations are made to the conferences on behalf of shippers.

In order to induce regular or exclusive patronage, conference lines apply the contract or deferred rebate systems. The shippers in some trades apparently have the option of one or the other. (See copy of the continental Far East conference memorandum of agreement reproduced in the section on the Netherlands.)

The Government does not exercise any authority over rates, although it does manifest an interest in seeing that Belgian lines adhere to rate schedules that insure profitable operation.

TRAMP RATES

The tonnage of tramps under the Belgian flag is not large, and therefore Belgium does not play a prominent role in the world charter market. A majority of Belgian tramp owners, however, are members of the Baltic and International Maritime Conference and participate in the Baltwhite Timber Scheme, described in the section under that heading.

The Government does not exercise any authority over tramp rates.

CANADA

LINER RATES

PRIVATE CONTROL

Conferences prevail in the liner trades of Canada, with various degrees of organization in relation to the traffic and competitive situation on respective routes. In most instances rates from Canada are determined by conferences which also operate out of the United States. The contract system rather than the deferred rebate system

is employed for the inducement of regular or exclusive patronage. Rate negotiations between shippers and conferences are more or less informal. In some instances they are undertaken by individual shippers and in others by trade associations.

GOVERNMENT CONTROL

The Government exercises limited authority over rates through subsidy contracts which contain one or the other of the following clauses, except in the case of the following services of the Canadian Pacific Railway: Trans-Atlantic service and trans-Pacific service to China and Japan.

Subsidy Form D20.-The contractors' shall carry on each steamer running under this contract according to its capacity, on all voyages, all the freight and passengers which may be reasonably offered or obtained, and at tariff rates, both as to passengers and freights, which may be from time to time approved by the Minister,2 and the contractors shall furnish to the Minister such documents, information, and evidence as may be required by the Minister, to show the volume, extent, and value of the trade carried on by the said steamers, and such customs certificates, documents, and evidence as may be necessary, or as may be required by the Minister to prove the performance of the services herein contracted for, and to enable the Minister to judge as to whether this contract is being carefully and faithfully carried out and performed, and the furnishing of such certificates, documents, information and evidence as hereinbefore specified shall be a condition precedent to the payment of the subsidy herein provided for or any portion thereof, and the contractors shall allow any officer or officers named by the Minister free access to such accounts, and all books, papers, and documents connected therewith.

*** The contractors shall at all times during the performance of this contract well and faithfully abide by and conform to all such orders and regulations as may be made by the Minister with regard to the business of the said steamers in the performance of this contract.

Subsidy Form D.-The Minister shall at any time have the right to revise the freight and passenger rates charged by the said company or prescribe the maximum rates which may be charged upon any steamer performing the service under this contract, which freight and passenger rates shall be made available at all times to the public at the head office and the offices of the agents of the contractors. After the freight and passenger rates have been fixed or approved by the Minister, they shall not be raised by the contractors without the permission of the Minister first having been obtained.

Moreover, there is a clause in each of the two subsidy contracts with the North Pacific Shipping Co. forbidding the company to participate in conferences. One of these contracts is for the trade between British Columbia and China and/or Australia, the other applies between British Columbia and South Africa.

Subsidy forms D20 and D4 are not included in the subsidy contract with the Canadian Pacific Railway for the trans-Atlantic service nor for the trans-Pacific service to China and Japan. In some other contracts the wording is changed somewhat although the general meaning is the same.

Subsidies for ocean services are provided in the estimates for the fiscal years ended March 31, 1938 and 1939, as follows:

1 Receivers of the Government subsidy.

2 Minister of Trade and Commerce.