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Show The economic desirability of a domestic water naviga- tion project is dependent mainly on three things: 1. The direct transportation savings effected. 2. The indirect effects of the project on other parts of the economy, including the rest of the transportation system. 3. The worth of the project in comparison with alterna- tive uses of the funds involved. Absence of Common or Unified Promotional and Regu- latory Policy.-It is generally agreed that Federal promo- tional activities encourage entrance into and expansion of water transportation services. It is likewise true that regulatory restrictions tend to limit in some degree such enterprise and thereby inhibit utilization of waterway facil- ities. This conflict between regulatory and promotional policy further points up the need for a centralized and unified promotional and regulatory policy which will as- sure the Nation of an efficient and adequate transportation system. The fundamental objective of Federal regulation of transportation is preservation for the public of adequate low-cost and nondiscriminatory service. Decision with respect to the extension or relaxation of regulatory controls over water carriers should be made on the basis of the net and ultimate effect upon the transportation user. It may be that effective price and service competition would be superior to the limited regulation now under Inter- state Commerce Commission jurisdiction. Since the basic water facilities are provided by the Government for all who wish to use them, and water services can be estab- lished with moderate amounts of capital, and shippers, if rates became excessive, could always resort to other methods of transportation, there is little reason to suppose that water carriers would not provide services in adequate volume and at minimum cost. However, removal or further relaxation of present regulatory controls over water carriers would seem to accentuate the need for the imposi- tion of user charges. Nature and Extent of Federal Regulatory Restrictions Upon Inland Waterway Transportation.-Although, over the years, domestic water transportation has been brought under generally increasing regulation, it is still only par- tially regulated today. A number of types of water trans- portation are wholly exempt from regulation under the Interstate Commerce Act by reason either of an outright statutory provision or of action by the Commission under a so-called conditional exemption, while the water carriers which are regulated are not subject to certain provisions which apply to other modes of transportation (e. g., con- trol over abandonment of service and issuance of securities; also, the commodities clause, applied to the railroads is absent in the case of water carriers). Because waterways are public highways, they are used by private individuals and corporations for the transportation of their own prop- erty, as well as by carriers for hire. The exemption of bulk carriers in part III of the Interstate Commerce Act excludes a large and important part of domestic for-hire water transportation from the jurisdiction of the Commission. An analysis of the evolution of control for this type of carrier over inland waterways reveals that regulation developed more slowly than regulation for railroad car- riers, and that it is not as comprehensive in its coverage or as complete in its controls as railroad regulation. An obvious reason for this situation is that inland water trans- portation is not as easily monopolized as railroad trans- portation and competitive conditions are more likely to prevail. Competition between railroads, therefore, re- quires a duplication of the railway with its large invest- ment. Competing carriers by water, however, can operate over the same waterway, and no duplication of the invest- ment is necessary. Common carriers over a waterway, moreover, encounter substantial competition from contract carriers and private carriers. As a result, there are fewer opportunities for monopoly charges by water carriers, and complaints of excessive rates are infrequent. Provisions of the Transportation Act of 1940 for regu- lation of water carriers are generally similar to those applicable to other carriers except that issuance of securi- ties by water carriers is not regulated and safety standards for such carriers are left to the Coast Guard. There are also extensive exemptions to water-carrier regulation. The provisions affecting through routes, joint classi- fications, joint rates, fares, and charges already in effect when the 1940 act was passed, were carried forward in the 1940 act. Some Effects of Regulatory Restrictions on Development of Water Transportation Services.-Regulatory restric- tions on water transportation generally have retarded to some degree the volume of water transportation and the relative further development of additional common car- riers. Regulated water carriers on domestic waterways have been controlled less restrictively than intercity motor carriers, but the more liberal treatment of water carriers does not appear to be the result of specific legislative direction. Under certificate and permit provisions, very similar to those applying to motor carriers since 1940, the Commission has been liberal in granting operating authority to domestic water carriers in "grandfather" cases, but in recent years largely has closed the door to the small-business man who would seek to enter the regu- lated common carrier water transport field. A petition presented to the ICC for such a certificate is invariably followed by lengthy litigation, a series of hearings in different cities, further hearings, compilation of additional evidence and presentation of testimony, all of which costs so much that many small-business men are fearful of mak- ing the gamble. Most water lines do not have the wide and diversified range of traffic enjoyed by the railroads and generally cannot afford the time and expense entailed in uncertain rate litigation before the Interstate Commerce Commis- sion, whereas the railroads severally and jointly have legal and technical staffs quite well prepared to engage indefi- nitely in a lawsuit over rate matters. The result usually is that barge lines turn away from the prospect of such litigation and prefer to stick to uncontested traffic. Rep- resentatives of the barge lines maintain that if proceed- ings before the Commission were not required or were simpler and conducted against more specific standards, the barge line industry would be more aggressive in ex- panding its traffic, thereby increasing the tonnage and variety of traffic on the river system. The benefits of cheaper water transportation resulting from the large expenditures of public funds on the improvement of chan- nels would flow in an increasing volume to an expanding segment of the shipping public. 433 |