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Show The Panama Canal Act of 1912 broadened considerably the Commission's jurisdiction over water-rail transporta- tion. The general purpose of the act was to prohibit or sharply restrict the ownership, operation, or control by railroads of water carriers of freight and passengers on routes with which such railroads do or may compete. The prohibition was absolute as to water carriers operating through the Panama Canal. The continuance or acqui- sition of such railroad ownership, operation, or control of water carriers on other routes, including all waterways, was also prohibited unless and until authorized by the Interstate Commerce Commission, after full hearings, on a showing that competition between the railroad and the water carriers would not be excluded, prevented, or re- duced and that the public convenience and needs of com- merce would be served thereby. This statute gave the first indication of congressional attitude toward common ownership or control of two competing carrier agencies. As a general rule the Commission has authorized con- tinuance of railroad ownership, control, or operation of competing water carriers when the evidence before it affirmatively showed that such action would be in the interest of the public, of advantage to the convenience and the commerce of the people, and would neither ex- clude, prevent, nor reduce competition on the route by water. The Federal Control Act of March 21, 1918, the Trans- portation Act of 1920, and the Denison Act, 1928, all continued the program of coordination of rail and water transportation similar to that established by the Panama Canal Act of 1912, in which routes and interchange of traffic were required. Common carriers by water may establish through routes and fares, charges, and classifica- tions applicable thereto with common carriers by motor vehicle. The ICC has about the same authority over rates, fares, and through routes and joint rates for water com- mon carriers as for the railroads. It also has the authority to establish reasonable differentials between all-rail rates and joint rail-water rates or joint water-motor rates. Joint Rail-Barge Rates.-In ICC docket 26712, the key issue was whether point rail-barge rates should be established in the Mississippi Valley at levels somewhat lower than the through all-rail rates. The existence of a lower rate for shipments jointly by rail and by barge, is, of course, necessary if the barge lines are to obtain any business from inland points which do not have direct access to water transportation. Where the rates are no lower than the all-rail rate, shippers will route their ship- ments by rail and the barge lines will be unable to obtain any of this traffic. The railroads established a limited number of joint rates under compulsion but in recent years have refused to establish any more and have chal- lenged the existing differentials on the grounds that joint rail-barge transportation is now more expensive than all- rail transportation. In reaching its decision the ICC recognized the validity of the railroads' argument with respect to cost but concluded, nonetheless, that the con- tinuing policy of the Congress toward waterway opera- tions indicated the legislative intent for the establishment and maintenance of joint rail-barge rates, and accordingly ordered that differentials should be maintained on class rates and on commodity rates. The Commission did not prescribe the new set of rates, but issued a finding that the suggested differentials were reasonable. It then left the record open for the actual establishment of rates by negotiation between the barge lines and the railroads which would substantially con- form to the proposals of the Commission. It has been 2 years since the Commission issued its order in this case, and because of a suit in court to set aside the order, it has been continually postponing the effective date of the order, which presently is postponed to December 31, 1950. This decision in the rail-barge case, which had been under consideration for approximately 13 years, unfortu- nately comes to them at a time when it is not likely to do them much good, as now the terminal costs of the water carriers are exceptionally high and the volume of joint rail-barge traffic has been decreasing. The net result may be to give the water carriers additional traffic, but it may also be to give them that traffic at rate levels which in many cases are no longer compensatory. In joint traffic the barge lines division may be much smaller than the revenue which it would obtain on a port-to-port traffic movement. Extent to Which Provision of Waterway Facilities Has Fostered Competition Between the Several Modes of Transportation.-Competition fostered by the provision of waterway facilities has been primarily between carriers by water and carriers by railroad. An estimate of the complete extent of such competition would be difficult to determine. Competition between carriers by water and carriers by highway has been very limited, largely be- cause of the marked differences in the two types of opera- tion and the lack of adaptability of motor trucks to the transportation of the traffic that constitutes the bulk of the water movement, particularly on the inland water- ways. Prior to the war there was some degree of com- petition between motor trucks and steamships when the latter were being operated in package-freight service along the Atlantic coast and on the Great Lakes. This service by water has not been revived to any appreciable extent since the war. To a limited extent trucks compete with railroads in conjunction with water operations through the performance of feeder or delivery service to and from interior points on traffic as to which the major portion of the transportation is by water. It has been estimated that 90 percent of the total traffic on the inland waterways is accounted for by not more than 20 commodities, although a sizable variety of other commodities moves in comparatively small volume. On the Great Lakes, iron ore and lake cargo coal account for 75 percent or more of the total lake commerce. The transportation of these commodities across the Lakes can- not be classed as competitive with railroad transportation. Rather, the water segment is a part of a through or con- tinuous movement by rail and water. The volume of this traffic is such, furthermore, that it is to be doubted that the railroads could handle it efficiently as a physical proposition. On the other hand, these commodities go into the production of articles which are adapted to movement by rail and so move extensively. Other important movements on the Great Lakes are grain; stone, including sand and gravel; and iron and steel articles. The normal route for grain has been across the Lakes to eastern ports, principally Buffalo, and thence by rail. There has been some competition between this 437 |