New-York tribune., 1920-09-04
Ocean Freight
Fixing Seen as
Trade Benefit
Prof. Emory Johnson Holds
Ship Lines Conferences
Advantages More Than
Offset the Disadvantages
"Aid Foreign Commerce.
Congress Committee Told
Shipping Agreements Are
Generally Participated In

Prosecutions instituted Dy the gov
eminent against large number Of
steamship companies and freight
brokerage concerns on charges of con-
spiracy to fix ocean freight rates and
form monopoly in violation of the
Sherman law again bring into the lime
light the system of conference agree
ments which has been in vogue among
shipping companies for many years.
Investigation into the operations
here and abroad have been held on
several previous occasions. The House
Committee on Merchant Marine and
Fisheries made an inquiry into the SUBJ
jeet in 1914. In the course of this,
which was styled an investigation of
shipping combinations, Professor S. S.
Huebner, Of the University of Penn
sylvania. made the statement to the
committee that:
"As regards nearly every foreign
trade route, practically all the estab-
lished lines operating to and from
American ports work in harmonious CO.
operation, either through written or
F. oral agreements. conference arrange
ments or gertlemen's understandings.
The few instances where two or more
nneS serve inc SAINT route ana nave
denied the existence of written or oral
agreements for the regulation of the
trade are exceptions and not the rule"
Conferences the Rule
A British Royal Commission, in
report on shipping rings, made in 1909,
showed that line conferences and agree
ments were almost universal in the in
ternational trade of foreign countries.
Much has been written regarding
the merits and demerits of the con.
ference plan. Professor Emory r.
Johnson, of the University of Penn
syivana. in his work on Principles of
Ocean Transportation, goes into the
question in some detail.
"The conferences, agreements and
understandings of ocean lines," he
states, "have sometimes been COM
planned of on the grounds that their
monopolistic power, even though not
always complete, is liable to abuse.
They have a. times prevented the estab-
lishment of new lines and crushed non
conference lines; or they may have ex-
erted q certain degree of arbitrary
power over rates, dominated shippers.
been Indifferent as to the landing of
freight in proper condition and slow
to settle claims. They have sometimes
granted special rates and accomm oda-
tions to large shippers and refused to
Their secrecy, the questionable prac-
tice of paying deferred rebates and
their occasional operation Of fighting
ships have especially been sources of
complaint
Remedies in Legislation
There is nothing inherent in the COM
plants mentioned, he states, however,
that cannot be remedied by proper leg
islaton, and he adds that the advan-
tsges Of ocean conferences and agree
ments both to the lines and to the ship
pers need not be sacrificed in order to
eliminate their disadvantages.
Commenting on the advantages, he
says that arbitrary rate discrimina-
ton is the exception.
"For every such instance" he adds,
"there are many in which the con-
ferences, by controlling unrestricted
competition, have made the rates to
all shippers at a given port more uni
from. For every arbitrary discrim-
nation between countries there. are
many instances in which conferences
have maintained the rates from the
United States to foreign markets on
parity with those from other coun-
tries"
Benefit in Stabilized Rates
Another benefit from ocean confer
ences, adds Professor Johnson, is that
they stabilize rates. THE merchant
engaged in international trade" he
says. desires an adequate service at
rates that are reasonable and fairly
stable; fuctuating rates seriously in
terfere with trade. whether it be
domestic or international. Reasonable
stability of rates reduces the specula-
tive uncertainty Of shipping; it facili-
tates the calculation Of net prices; it
reduces the complaints Of foreign Gus
toners. steadics the flow of interna
tlonal trade, and makes it possible for
both shippers and carriers to enter
more readily into forward contracts
for the carriage Of freight"
But the chief benefit to shippers
through ocean conferences, he says, is
the improved service which they make
possible. They reduce the cost of the
snipping line service, he declares, and
line, it also makes possible lower
isrel Of rates and Z higher standard OF
service. AZ result, he continues,
there is greater regularity of service,
better distribution of sailings, and
Ultimately tie operation of more and
better vessels than the lines would
have dared to provide if intcrline rate
competition were absolutely unre-
stricted.
Nowhere in the world" says Pro
lessor Johnson, "has such progress in
snip construction and service improve
Ment been made as in the North At
isa.c passenger business, and yet the
great line that compete so keenly as
regards he 1ind of service rendered
are parties 70 rate agreements and
pooling arrangements. Conference con-
stoi OYER rate competition so enhances
me security Of tire capital invested in
.hese ocean lines az to render it easier
i'f thesa conz.antly to improve their
.sciiities and yield to the demands OF
ms travelling public"
Boards Soon To Be Named to