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in this region.

distance between Whitehead Island and Schoodic is approximately 65 miles. A site is available at Head Harbor, and this location would place the Coast Guard Service in a position to carry forward effectively its duties of protection to merine commerce and of law enforcement

Consideration by your committee of the establishment of Coast Guard stations on the Schoodic Peninsula and on Isle au Haut also involved the question of the establishment of a station at or near Frenchboro, Hancock County, Maine, provided for in H. R. 1600. The Treasury Department has advised that the location at Frenchboro is considered unsuitable and does not possess topographic conditions essential for the proper operation of a Coast Guard station. With the establishment of the Coast Guard stations at Isle au Haut and on the Schoodic Peninsula, a reasonable measure of protection could be afforded to the waters adjacent to Long Island, in which vicinity the Frenchboro Station would be located, and the Department has, therefore, recommended against the establishment of this station. The Department also advises that the establishment of a Coast Guard station at or near French boro, Hancock County, Maine, is not in accord with the program of the President.

The Department advises, however, that the bill, H. R. 3031, as amended by your committee, is in accord with the program of the President, and the Department further recommends the passage of this legislation so as to provide for the establishment of stations on Isle au Haut and on the Schoodic Peninsula, as the establishment of these stations is considered essential in a systematic arrangement for Coast Guard protection and service along this section of the Maine coast.

Your committee considers the need for the establishment of these Coast Guard stations, warrants the passage of the bill, H. R. 3031, as amended, and recommends early and favorable consideration of this

bill.

The letter of the Acting Secretary of the Treasury, dated April 22, 1937, to the chairman of your committee reads as follows:

TREASURY DEPARTMENT,

Washington, April 22, 1937. Hon. S. O. BLAND, Chairman, Committee on Merchant Marine and Fisheries,

House of Representatives. DEAR MR. CHAIRMAN: Reference is made to your letters of January 16, 1937, er.closing copies of bills H. R. 1600 and H. R. 3031, Seventy-fifth Congress, first session, to provide for the establishment of Coast Guard stations at certain locaions on the Maine coast and requesting the views and recommendations of the Department thereon.

The Coast Guard in making a study of these proposals gave most careful thought and consideration to the needs in the general coastal area embraced in the localities specified in these hills, including the region of Isle au Haut, as referred to in bill H. R. 12445, introduced during the Seventy-fourth Congress, escond session. The matter of Coast Guard protection along this section of the Maine coast was the subject of an independent survey made about a year ago by the Coast Guard, with the view of deciding upon Coast Guard needs along the coasts of the Coited States and the most advantageous locations for any units deemed necessary to conduct efficiently the duties with which the service is charged. As a part of the result of that survey it was recommended that Coast Guard stations be established at or in the vicinity of Isle au Haut and on Schoodic Peninsula.

In presenting the views of the Department upon the bills referred to, the Coast Guard had a board of officcrs inquire thoroughly into the need for the Coast Guard stations proposed. At the present time there is located between White

H. Repts., 75–1, vol. 2-15

head Island and Great Wass Island, a distance of approximately 110 miles, one Coast Guard station (Cranberry Island). This section of the coast abounds with rugged headlands, islets, rocks, reefs, and intricate channels and swift currents, and is particularly hazardous for marine commerce during fog, a high percentage of which prevails along its coastal region. This condition emphasizes the need for strategically located stations in this area to provide reasonable means for the Coast Guard to afford protection to marine activities and to carry on its other prescribed duties. The Coast Guard has concluded, based upon the result of its current study and the one previously made, that the needs of service call for the establishment of stations at İsle au Haut and on Schoodic Peninsula.

The station proposed on the Schoodic Peninsula, for which an advantageous site has been selected and which would be available to the Government without cost, would command an excellent view in all directions along the coast and out to sea for affording Coast Guard protection to coastal commerce and the fishing industry, and its location at a point where considerable boating and yachting exist will provide the Coast Guard with the means for exercising supervision over marine activities in the Frenchmans Bay region and adjacent coastal waters. Coastwise traffic bound to Bangor and points west pass within visibility of Schoodic Peninsula. With the establishment of a station on Schoodic Peninsula, no additional operating expense would have to be borne by the Coast Guard, as it would serve as a replacement of the existing Cranberry Island Station, approximately 12 miles distant, the latter station to be discontinued in view of the greater advantages of the location on the Schoodic Peninsula.

The establishment of a Coast Guard station on the Isle au Haut would fill a need of the Coast Guard for having available along this section of the coast a unit situated approximately midway between Whitehead Island (Coast Guard station) and Frenchmans Bay. A suitable site is available at Head Harbor, and such location would place the Service in a position to carry forward effectively its duties of protection to marine commerce and a law enforcement.

For the above reasons, the Department recommends the passage of bill H. R. 3031, amended as follows, so as to provide for a station at Isle au Haut, which is considered essential in a systematic arrangement for Coast Guard protection and service along this section of the Maine coast, based upon two independent studies made of the needs of the Coast Guard:

*

"A BILL To provide for the establishment of Coast Guard stations along the Maine coast

That the Secretary of the Treasury is authorized to establish a Coast Guard station on Schoodic Peninsula, and a Coast Guard station at or near Isle au Haut, on the coast of Maine, at such points as the Commandant of the Coast Guard may recommend."

I am advised that the legislation proposed in bill H. R. 3031, amended as above, is in accord with the program of the President.

In the study made of the proposal for the establishment of a station at or near Frenchboro (Long Island), Maine, the Coast Guard found that with the establishment of stations as proposed at Isle au Haut and on Schoodic Peninsula, a reasonable measure of protection could be afforded to the waters adjacent to Long Island, which location is considered unsuitable and as not possessing topographic conditions essential for the proper operation of a Coast Guard station. The Department, therefore, recommends against the enactment of bill H. R. 1600, to provide for the establishment of a Coast Guard station at or near Frenchboro, Hancock County, Maine. I am advised that the legislation proposed by this bill is not in accord with the program of the President. Very truly yours,

STEPHEN B. GIBBONS,

Acting Secretary of the Treasury. O

PANAMA CANAL TOLLS

MAY 11, 1937.—Committed to the Committee of the Whole House on the state

of the Union and ordered to be printed

Mr. BLAND, from the Committee on Merchant Marine and Fisheries,

submitted the following

REPORT

(To accompany H. R. 5417]

The Committee on Merchant Marine and Fisheries, to whom was referred the bill (H. R. 5417) to provide for the measurement of vessels using the Panama Canal, and for other purposes, having considered the same, report thereon with a recommendation that the bill

do pass.

President.

Under date of February 26, 1937, the President sent a message to the Congress in which he said:

I cannot too strongly urge the enactment of legislation that will so amend the existing law as to provide:

(1) That tolls for the use of the Panama Canal shall be based upon vessel tonnage determined by the Panama Canal rules of measurement as prescribed by the

2) That the tolls upon commercial vessels, Army and Navy transports, colliers, supply and hospital ships shall not exceed $1 per Panama Canal net ton, and shali not be less than 75 cents per Panama Canal net ton, when such vessels are laden.

(3) That a rate of tolls lower than is levied on laden vessels may be prescribed for vessels in ballast, without passengers or cargo. The President transmitted with his message the report of the Special Committee on Panama Canal Tolls and Vessel Measurement Rules, which had been appointed under the provisions of the act approved April 13, 1936. That act authorized the President to appoint a neutral committee of three members for the purpose of making an independent study and investigation of the rules for the measurement of vessels using the Panama Canal and the tolls that should be charged therefor, and to hold hearings thereon at which interested parties should have full opportunity to present their views. The act provided that the committee should report to the President upon said matters prior to January 1, 1937, and should make such advisory recommendations of changes and modifications of the Rules for the Measurement of Vessels for the Panama Canal and the determination of tolls as it should find necessary or desirable to provide a prac tical, just, and equitable system of measuring such vessels and levying such tolls.

The President appointed the following committee: Dr. Emory R. Johnson, of the University of Pennsylvania, who was a member of the first Isthmian Canal Commission in 1899; Rear Admiral George H. Rock, of New York City, former Chief of the Bureau of Construction and Repair, Navy Department, now retired; and Hon. Arthur J. Weaver, of Falls City, Nebr., a former Governor of the State of Nebraska.

Dr. Johnson served as special commissioner in 1911, and worked with General Goethals and then Secretary of War Stimson in the preparation of the rules of measurement adopted when the Canal was originally placed in operation. Dr. Johnson was made chairman of the committee.

The committee held hearings at which interested parties had full opportunity to present their views. The committee visited the Canal Zone, inspected transiting ships, and studied the measurement procedure in determining the net tonnage upon which tolls are assessed.

The committee submitted a unanimous report as to its conclusions and recommendations. The report is comprehensive and illuminating.

The committee reached the following conclusions:

(1) That the present situation as regards the measurement of vessels and the levying of tolls at the Panama Canal should be promptly corrected by appropriate legislation; that the present dual system should be brought to an end; that the exercise of authority over Canal charges necessarily involves fixing the rate of tolls and prescribing the rules for the measurement of vessels to determine the tonnage upon which the rate of tolls is levied; that the authority of the President to determine the tonnage upon which the Canal charges shall be levied, and thus to determine what the Canal revenues shall be, bas been nullified by an interpretation which has been given the Panama Canal Act of 1912 that requires vessels transiting the Canal to be measured by rules over which the President has no control; that until the President is given authority to determine the tonnage upon which Canal charges are levied, it will be impossible for him to carry out, within such general limits as may be fixed by Congress, a definite policy in the administration of the Panama Canal; that without such authority it will be impossible for the President to adjust Canal tolls with reference to the total revenue that may be required to carry out an administrative policy that Congress may adopt; that without such authority the President will be unable to assure the levying of charges that will be equitable as between vessels of like capacity and as among vessels of different types; that without such authority it will not be possible for the President to provide for "the determination of tolls" such as he "finds necessary or desirable to provide a practical, just and equitable system of measuring such vessels and levying such tolls”; and that it is essential that the Congress give the President authority over the Panama Canal vessel-measurement rules as definite as that over the rate of tolls that shall be charged.

(2) That the Panama Canal vessel measurement rules promulgated by the President in 1913 were based upon the sound principle that the charges paid by commercial vessels for the use of the Panama Canal should be levied upon their earning capacity accurately determined;

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that warships do not have an earning capacity, and accordingly are properly required to pay upon their displacement tonnage.

(3) That in order to levy tolls upon the actual earning capacity of commercial vessels it is necessary to determine net tonnage by rules different from those employed by the United States in measuring vessels for national registration; that Fanama Canal charges cannot be levied upon the earning capacity of vessels, nor can the charges be made equitable as between ships of like capacity and as among vessels of different types and countries, if the tolls are based upon net tonnage determined by rules that are employed in measuring vessels for national registration; and that for a satisfactory administration of the Panama Canal it is necessary that the charges for its use shall be levied upon a tonnage determined by rules that apply with like equity to all vessels by rules that are prescribed by the authority responsible for the adjustment of tolls and revenues, and for administering the Canal in accordance with the general policy adopted by Congress.

The committee recommerded:

(1) That the dual system of measurement be abolished, and that the Panama Canal measurement rules, with tonnage reduction covering additional spaces for the operation of the ship and other spaces which are not sold and, therefore, are not strictly earning spaces, be restored. The Panama Canal rules are solely for the purpose of the administration of the Canal, while the United States rules are a standard of registry for United States ships on a basis comparable with other nations. No other basis than the rules prescribed for the Panama Canal would afford certainty of securing sufficient revenue to cover the operating and maintenance expenses of the Canal and an interest return to the Government on its investment. Under the present dual system (hereinafter discussed) Panama Canal toll charges are practically fixed by foreign nations, because the United States rules of tonnage registry must meet foreign registry tonnage so as to protect American ships on harbor service charges.

(2) That for the purpose of providing a sufficient rate of toll to assure the Canal a self-supporting status and a fixed return of 3-percent interest on a sound and justified capitalization as outlined in the report, legislation should be enacted fixing tolls as follows:

(a) That Congress establish a maximum toll, payable by laden commercial Fessels of $1 per net ton of earning capacity, the tonnage to be determined by rules prescribed by the President, to be known as the Panama Canal rules of measurement;

(6) That the statutory minimum rate of tolls for laden commercial vessels be fixed at 75 cents per ton of earning capacity, determined by rules prescribed by the President; and

(c) That the legislation enacted authorize the President to fix a lower rate of tolls for vessels in ballast than for vessels with passengers or cargo, and to fix tolls for war ships upon a basis different from that for tolls upon vessels of com

a

merce.

In this connection it was recommended that beginning January 1, 1938, or as soon thereafter as practicable, the following rates of tolls be fixed by the President for the use of the Canal:

(1) For commercial vessels with passengers or cargo, and for Army and Navy transports, colliers, supply and hospital ships, 90 cents per net ton, the tonnago to be determined by measurement rules prescribed by the President.

(2) For vessels in ballast, without passengers or cargo, 72 cents per net ton, the tonnage to be determined by rules prescribed by the President.

(3) For warships, other than transports, colliers, supply and hospital ships, 50 cents per ton of displacement at the time of transiting the Canal.

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