195 Code/23

The Norwegian Legation to the Department of State


The attention of the Norwegian Government has been called to the proposed “Code of Fair Competition for the Shipping Industry”, submitted by the American Shipowners Association and which was subject to hearings by the National Recovery Administration on January 31st and February 1st 1934. The submitted code, in Article III, states that it shall not only apply to American ships but to vessels of all flags engaged in foreign and domestic commerce.

The Norwegian Government which has presumed that the National Industrial Recovery Act and the codes set up under the Act were only intended to apply to American industry, has learned with much concern that it would seem to be the intention to make a shipping code, established under the said act, to a great extent applicable also to foreign shipping. A study of the submitted code has given the impression that several provisions of same will interfere with the hitherto free development of trade and navigation between the two countries in a way that will prove detrimental to Norwegian legitimate shipping and commercial interests.

Without going into a detailed discussion of all those code provisions which affect foreign ships the Minister of Norway begs to point out some of the principal provisions which deal with foreign vessels.

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The general code and every Division Code—such as Foreign Trade Division Codes—supplemental thereto, when approved by the President, will be binding upon every foreign shipowner trading with the United States, whether he does or does not assent thereto by signing either the General Code or a Division Code, but those who do not file an assent are barred from participating in the “Self-Government” set up under the Code. (Article I, Section 1; Article III, Section 1; Article VII, Section 2 (a).)

Foreign shipowners assenting to the Code and joining the Foreign Trade Division, will be forced to accept the ruling of the Division Code Authority on any question upon which American and foreign flag owners may differ. Moreover, the Division Code Authority has the power, upon the complaint of any owner, to overrule any action taken by the Foreign Trade Division. (Article IV, Sections 7, 10 (d) (e).)

The members of the Division Code Authority in the Foreign Trade Division will be elected, one-half by the foreign flag owners, and one-half by the American flag owners. (Article IV, Section 9 (a)). If the members of the Code Authority should divide equally on any question and so reach a deadlock, decision shall be given by the Administrator.

As regards the labor provisions—Article V—it seems to be the intention that minimum wages for seagoing personal hours of labor and conditions of employment shall only apply to American ships. With regard to the other labor provisions—such as the collective bargaining clause—the jurisdiction of the Divisional Labor Boards and the National Labor Board, no distinction is made between American and Foreign vessels.

Article VII, Stabilization and Regulation, provides for the fixing of minimum rates and fares, and rules and regulations, and authorizes the Division Code Authority to provide for the regulation of any other matter with which the division or subdivision is especially concerned. This would seem to imply that the Code Authority could fix not only minimum rates and fares, but minimum wages. Previous drafts contained a clause to the effect that under rules and regulations would come “among other things provisions covering matters of service frequency, limitation of vessels’ tonnage, duplication of services and excess competition.” Though this definition has been left out of the last draft, it would seem that the Code Authority might possibly maintain a right to regulate these matters under the general clause: “provide for the regulation of any other matter with which the division or subdivision is especially concerned.”

The Norwegian Government having received information to the effect that the American Government may contemplate acceptance of a shipping code mainly on the lines of the submitted code, and consequently, [Page 687] applicable to foreign vessels, feels seriously concerned over the possibility of such policy being adopted by the United States which would thereby abandon its traditional policy of freedom of navigation, so clearly evinced on earlier occasions, and which has been recognized in a number of treaties signed by the United States.

The Treaty of Friendship, Commerce and Consular Rights between Norway and the United States, of June 5, 1928,8 contains, i. a. the following provision regarding shipping:

Article VII: “Between the territories of the High Contracting Parties there shall be freedom of commerce and navigation. The nationals of each of the High Contracting Parties equally with those of the most favored nation, shall have liberty freely to come with their vessels and cargoes to all places, ports and waters of every kind within the territorial limits of the other which are or may be open to foreign commerce and navigation.”

Freedom of navigation is thus secured by the treaty and it is the view of the Norwegian Government that the proposed code could hardly be compatible with the treaty and the principle underlying same inasmuch as it would infringe on the freedom of navigation by subjecting Norwegian ships to i. a. minimum rates and fares, possibly minimum wages and possibly also limitation of sailings and tonnage.

As it is known Article VII of the Treaty further indicates those limitations of the freedom of navigation which the Contracting Parties regarded as natural and necessary when the Treaty was signed. It is stated that each Contracting Party reserves itself the right to impose, on such terms as it may see fit, regulations for the protection of human life, animal or plant health or regulations for the inforcement of revenue and police laws, including laws prohibiting or restricting the importation or sale of alcoholic beverages or narcotics. The provisions of the submitted code go considerably further than the reservations taken in Article VII.