tion 21 of the Shipping Act, 1916, requiring the appellant to file with the Secretary on December 16, 1935, a copy or summary of its books and records for a given period, which should show each commodity carried from the United States to a foreign country, with point of shipment, point of destination, rate charged or collected, the effective date of rate, and transshipment and terminal charges and rules affecting rates or value of the service rendered.

Five causes of action were set forth as follows:

1. That the order is invalid because Congress did not intend by the Legislative Appropriation Act of 1932 to authorize the President to abolish the Shipping Board and transfer its functions to the Secretary of Commerce; and if so, the Act was unconstitutional.

2. That the order is invalid as in substance the attempt of a competitor to regulate or stabilize the appellant's rates and to compel it to charge rates fixed by a shipping monopoly of which appellant's competitor is a member. (United States Merchant Fleet Corporation.) The further allegation is that the constitutional separation of powers between legislative, judicial, and executive branches and the fifth amendment of the Constitution forbid the exercise of regulatory or quasi-judicial functions such as were entrusted to the United States Shipping Board by persons or agencies having the interests described, and require that the Secretary's order be held for naught.

3. That the order was issued not for a public purpose authorized by Congress but for a plan to compel the appellant, an independent nonconference carrier, either to join a conference or shipping monopoly, or else suffer damage by disclosure to competitors of current business records showing rates charged and commodities transported. The order is alleged to have been issued to promote and foster a monopoly of appellant's competitors.

4. This cause of action relates to unjust discrimination, which is forbidden by the fifth amendment. Further, that the order issued under section 21 of the Shipping Act entails penalties for disobedience, whereas orders issued by the Secretary to appellant's competitors were not issued under section 21 or any other section of the Shipping Act, carried no penalties, and called only for information which those competitors were already required by law to file under section 15 of the Shipping Act of 1916, because they were members of a conference or shipping combination.

5. This cause of action is that the order should be enjoined because the Secretary rejected appellant's offer to file records on condition that they would not be communicated to appellant's competitors to the damage of appellant ** that the Secretary stated his purpose was to turn the records over to the public * *

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In short, the grounds of complaint fall into two general classes: Upon the assumption that the powers and duties of the Shipping Board were effectively transferred to the Secretary of Commerce, the claim is that the order was beyond the statutory authority conferred by the Shipping Act, amounted to an illegal search and seizure, and was invalid because arbitrary and unreasonable. But, in addition, it is asserted that transfer of the Board's powers and duties to the Secretary was unauthorized by action of Congress and, if so authorized, was in violation of the Constitution.

The Supreme Court held that the order issued by the Secretary was plainly within the terms of section 21 of the Shipping Act, 1916, which provides:

The Board may require any common carrier by water, or other person subject to this chapter, or any officer, receiver, trustee, lessee, agent, or employee thereof, to file with it any periodical or special report, or any account, record, rate, or charge, or any memorandum of any facts and transactions appertaining to the business of such carrier or other person subject to this chapter. Such report, account, record, rate, charge, or memorandum shall be under oath whenever the Board so requires, and shall be furnished in the form and within the time prescribed by the Board. Whoever fails to file any report,

account, record, rate, charge, or memorandum as required by this section shall forfeit to the United States the sum of $100 for each day of such default.

The Supreme Court further stated that:

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*

Congress appears to have recognized the validity of the transfer [Shipping Board to Commerce Department] and ratified the President's action by the appropriation acts all of which make appropriations to the Department of Commerce for salaries and expenses to carry out the provisions of the Shipping Act as amended and refer to the Executive order. On June 29, 1936, Congress adopted the Merchant Marine Act. By Section 204 (a) of that statute it was provided: "All functions, powers, and duties vested in the former United States Shipping Board by the Shipping Act, 1916, and amendments, and now vested in the Department of Commerce pursuant to section 12 of the President's Executive order of June 10, 1933, are hereby transferred to the United States Maritime Commission."

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**

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We are of the opinion that the Act of 1936 renders moot the constitutional questions sought and raised by the appellant even though we assume, without deciding, that the Secretary of Commerce had no power to issue the order of November 18, 1935. That order was administrative in character *. It determined no rights and prescribed no duties * * It demanded the filing of data. No notice or hearing was prerequisite to its issue. It was still in fieri when the United States Maritime Commission came into existence and the appellant is commanded to obey it. Decree

*

affirmed.

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MARITIME COMMISSION ACTIVITIES

Each year the Maritime Commission submits a report of its activities to Congress and includes therein a chapter on the regulation of carriers subject to its jurisdiction. The following is a summary extract of the report for the year ended October 25, 1937, which deals jointly with carriers engaged in foreign and interstate commerce. Although the Commission's jurisdiction over carriers engaged in foreign commerce is limited, considerable control is exercised through conference agreements. Since carriers are granted exemption from the antitrust acts when operating under approved agreements, careful examination is made of all agreements filed, rate changes made, and the minutes of conference action with a view to preventing violations. of the regulatory provisions of the shipping acts or any action prohibited by section 15 of the Shipping Act, 1916, or detrimental to the commerce of the United States.

During the past year a cooperative working arrangement for the handling of certain regulatory matters has been consummated with the Interstate Commerce Commission. Under this arrangement each Commission will promptly notify the other of the filing of cases in which they have a mutual interest, with the purpose of keeping each other constantly informed and of taking consistent action, if possible, under their respective regulatory acts. Progress has been made in expediting decisions under this arrangement.

Pursuant to section 212 (e) of the Merchant Marine Act, 1936, a study was made of the export and import rates in certain trades to determine whether any discrimination existed. The report of this study indicates that services and conditions in the two trades are radically different; that the articles in these trades vary widely, both as to character and value, and method of packing and volume of movement; and that no conclusion on the question of discrimination can be drawn without a more thorough investigation and formal hearing. This has not as yet been undertaken by the Commission.

Formal docket.-On October 26, 1936, there were pending 233 formal complaints and/or investigations. Subsequently, 27 formal complaints were filed and 13 investigations instituted by the Commission on its own motion. Hearings were held in 241 cases, of which 200 involved assembling and distributing charges on intercoastal shipments. These cases dealt with the legality of handling charges assessed at Los Angeles, Long Beach, and San Diego, Calif., and sought reparation of approximately $270,000. Hearings were held at various ports throughout the country over a period of 58 days. In addition, 12 formal complaints, filed by 261 complainants and interveners attacking similar handling charges on foreign shipments handled at Pacific coast ports, asked reparation of approximately $400,000. Hearings in these cases are being conducted.

Final reports containing the Commission's conclusions and the orders necessary to put them into effect were prepared in 13 cases; 10 cases were disposed of by order without reports; 2 cases were closed when the carriers complied with the order instituting the proceeding; 15 proposed reports were issued, and oral arguments were conducted in 9 cases.

A number of cases on the docket involved comprehensive adjustments of rates or major revisions of practices in the domestic and foreign trades. In Docket No. 416, eastbound intercoastal lumber, the commission conducted an exhaustive investigation into the rate structure on lumber from the Pacific coast to Gulf and Atlantic ports. The decision laid down fundamental principles of rate-making applicable not only to the lumber trade but to the whole field of transportation by water. Docket No. 438 dealt with commodity rates between Atlantic and Gulf ports. Similar rates of carriers subject to the jurisdiction of the Interstate Commerce Commission also were in issue. The cases were heard jointly by the two Commissions and both cooperated in their consideration of the cases, notwithstanding that their jurisdiction is derived from different regulatory acts. In Docket No. 423, Phelps Bro. & Co., Inc., v. Consulich-Societa et al., a conference had refused complainant membership in the conference on equal terms with each of the present members. The Commission found that complainant was entitled to membership in the conference, thus condemning the discrimination and unreasonable prejudice resulting from the refusal of the conference to admit complainant to membership. The complainant was subsequently admitted to membership in the conference.

Informal docket.-An informal docket is maintained by the Commission to assist shippers, carriers, and other persons in the adjustment of controversies which arise in the matter of rates, fares, and charges for transportation. Many informal complaints are handled by correspondence or adjusted through informal conference, thereby obviating the delay and expense incident to formal procedure.

Special docket. In instances where carriers believe that the charges collected for transportation are unlawful and they do not desire to defend the unlawful rates, they may establish reasonable rates for future shipments and may make application on the special docket for authority to make reparation to a reasonable basis. Applications for such authority must admit that the rate charged was unreasonable, and these are considered the equivalent of informal complaints and

answer thereto admitting the cause for complaint. They require careful consideration in order to avoid the possibility of, in effect, granting rebates to favored shippers. During the period under review three special docket applications were granted.

Agreements under section 15, Shipping Act, 1916.-During this period 1,257 new agreements were filed. This number includes modifications and cancelations of approved agreements. At the end of the period there were on file 2,653 effective agreements, 123 of which were conference agreements. Under the latter, the parties cooperate in the matter of fixing rates, rules, and regulations for transportation, thus insuring the maintenance of a uniform and stable rate structure and minimizing unfair competition between the carriers.

Foreign tariffs.-Under a regulation dated July 12, 1935, common carriers by water in foreign commerce are required to file with the Commission schedules showing the rates and charges for or in connection with transportation of property, except cargo loaded and carried in bulk without mark or count, from points in the continental United States, not including Alaska or the Canal Zone, to foreign ports, such schedules to be filed within 30 days from the date they become effective. During the period, 8,952 rate filings of schedules and supplements were made pursuant to the above order. In addition, 2,086 filings were made by conference carriers covering homeward and other trades.

TRAMP RATES

Very few vessels under the American flag are employed in tramp services. Rates for United States trades are fixed in the open market, with the limitation, however, of the scheme of minimum rates for grain established by the Tramp Shipping Administrative Committee, London, for the trade from the St. Lawrence and Northern Range, U. S. A. (eastward), to the United Kingdom and the Continent. Details regarding this scheme appear in the section on the United Kingdom.

UNITED KINGDOM

Private regulation of shipping, liner and tramp, has reached a high plane of development in the United Kingdom. Government participation has been indirect through advisory bodies and through loans and subsidies of an emergency and temporary nature. Such loans and subsidies have been granted to British liner and tramp owners on the condition that they organize so as to avoid wasteful competition, especially among themselves. In practice, these owners have sought the cooperation of foreign owners and have met with remarkable success.

The Government's first extensive study of rate-making in modern times dates from the appointment of the Royal Commission on Shipping Rings, in November 1906. The scope of the Commission's inquiry is indicated by the fact that it did not finish its work until May 1909. Its report, in two large volumes, has become a standard reference, although space does not permit of more than summary citations therefrom in this publication. These are inserted in this section under the title of the Commission.

The next measure of importance taken by the Government was the formation in 1918 of the Imperial Shipping Committee, for the purpose of investigating rates and other matters affecting British shipowners and shippers in imperial trades. This Committee has functioned continuously to date, and, although it acts solely in an advisory capacity it reports satisfactory accomplishments through the publicity it gives to its reports and recommendations.

Both the Royal Commission on Shipping Rings and the Imperial Shipping Committee have endorsed the conference system. At the same time, however, they have recommended an equivalent organization of shippers for the purpose of collective bargaining. Although progress has been made in this direction, it has been rather limited in

extent.

The evolution of rate-control, both liner and tramp, since the time of the Royal Commission on Shipping Rings, is summarized in the following paragraphs.

ROYAL COMMISSION ON SHIPPING RINGS

An exhaustive study of conferences was undertaken by the United Kingdom in 1906. By warrant of the King, a Royal Commission on Shipping Rings was appointed to inquire into the operation of conferences generally, and to report whether such operations had caused or were likely to cause injury to British or colonial trade, and, if so, what remedial action, if any, should be taken by legislation or otherwise. The Commission was granted full power to call witnesses, and had access to all books, documents, and records.

After lengthy investigation the Commission submitted its report in 1909, signed by all of its members, but with reservations by two members. In the main, the Commission endorsed the conference system, but adopted certain recommendations for the prevention and correction of abuses. These recommendations are discussed in the following paragraphs.

ASSOCIATIONS OF MERCHANTS AND SHIPPERS

It was suggested by some of the witnesses that all that was required to check abuses of the conference system was that the shippers and merchants in a given trade should form themselves into an association, so that they might be able to present a united front to the conference when any controversy arose.

This suggestion was adopted as the main recommendation of the Commission. The general grounds on which this was done are as follows:

1. There is a community of interest between shippers and shipowners as a whole, though the interests of particular shippers and those of the conference may be divergent. We consider that it is desirable that shipowners in any action which they may take should ascertain and take into account the collective opinion of the whole trade.

2. There are numerous important questions arising between merchants and shipowners which cannot be properly determined by legislation and which must be left for settlement by bargaining and negotiation. But shipowners, combined as they are in conference, possess the great power derived from collective bargaining, a power which in most cases individual merchants and shippers who are not in combination are not able to resist.

3. We consider that most, if not all, the serious abuses to which the system is liable can be remedied by such counter-combinations on the part of merchants