Foreign Relations of the United States Diplomatic Papers, 1935, General, The Near East and Africa, Volume I

811.801/593a

Resolution Adopted by the Executive Committee on Commercial Policy ¹⁰ May 10, 1935

May 10, 1935

The Executive Committee on Commercial Policy, having noted the provisions in the pending ship subsidy bills (H. R. 7521¹¹ and S. 2582¹²) and also in the Eastman water carrier regulation bills (H. R. 5379 and S. 1632) granting authority to the Federal Government to regulate rates, fares and charges of foreign ships with respect to traffic into and out of ports of the United States, desires to express the view of the committee that these provisions, if enacted into law, will prove injurious to American foreign trade, will be certain to encounter grave difficulties of enforcement, and will be an impediment to the maintenance of friendly commercial relations with other maritime countries.

With respect to the effect upon our foreign trade, the Committee is of the opinion that establishment of minimum rates, fares and charges by national authority, and the rigidity of rate structure in the carrying of our foreign trade that will result, will definitely handicap our export trade in competing abroad with similar goods brought into foreign markets from countries which do not subject foreign shipping to such rate regulation. In this matter it is essential to bear in mind the fundamental distinction between rate regulation within our own boundaries or in inter-coastal shipping by such a body as the Interstate Commerce Commission and such regulation as applied to international trade.

With respect to the effect upon our international relations, the Committee desires to stress the fact that such unilateral assumption of authority over foreign shipping will be contrary to the accepted practices of international law and in conflict with those provisions in our treaties guaranteeing in return for the right of free access of foreign shipping to American ports, free access for American shipping to foreign ports. Moreover, even though no technical violation of treaties were involved, such arbitrary assumption of regulatory powers over the rates charged by foreign vessels would be almost certain to lead to retaliatory measures in foreign countries against the ships and commerce of the United States. To the initial burdens upon our commerce would therefore be added those arising from such retaliation; and in the final outcome both American shipping and American foreign trade, upon which the prosperity of our shipping depends, instead of being assisted, would be seriously handicapped.

10. Committee with representation from the Departments of State, Treasury, Commerce, and Agriculture, Agricultural Adjustment Administration, National Recovery Administration, and United States Tariff Commission. See Department of State. Press Releases, November 25, 1933, p. 283.
11. Congressional Record, vol. 79, pt. 5, p. 5721.
12. Ibid., p. 5617.