[NOTE. The text of the Neutrality Act of 1939, the President's proclamations, the regulations and rulings under the act issued by the State, Treasury, Justice, Post Office, and Commerce Departments, together with the analytical studies entitled "Geolexigraph of the Neutrality Act of 1939," with charts, maps, and forms, and, in addition, the documents relating to the moral embargo, are compiled in Comparative Law Series, the monthly world review of laws affecting American commerce ior May 1940, published by the Bureau of Foreign and Domestic Commerce and available from the Superintendent of Documents, Washington, D. C., at $1 per year.]

ARGENTINA

Argentina exercises no control over ocean freight rates; with the exception of a few Argentine ships which operate between Argentina and Paraguay, Uruguay, and Brazil, the country's foreign trade is transported by ships of other nationalities.

Shipments from Argentina to the United States and a few other countries after the outbreak of war continued subject to ordinary freight-rate negotiations between shipper and shipping company, but the majority of shipments to Europe (which is the major destination for Argentine exports) became subject largely to the official control of foreign governments. European homeward-bound rates from Argentina for British and Allied shipping were rigidly established, and cargoes were assigned. In fact, some shippers complained that they were under such strict orders that their functions were little more than of a clerical nature.

Shortly after the beginning of the war a typical fixed rate for British ships on grain homeward bound from Argentina was 32s. 6d. per ton. On December 5, 1939, it was announced that this would be increased to 43s. 6d., retroactive from November 1. A further development occurred on February 1, 1940, when the British Government took over the operation of its mercantile marine, causing the rates as regards British-controlled shipping to become virtually meaningless. Neutral ships asked considerably more than the former British rate for cargoes to the United Kingdom and other belligerent areas. some cases the British Government had to pay neutrals almost double the rate which it paid to its own ships. As a result, however, of the various risks and inspection delays incurred by the neutral ships, it is questionable whether their net profits were any greater. In fact, some neutral owners preferred to accept British time charters, in which case their boats traveled under convoy.

In

Full details are not available as to the limited amount of local charterings for "dangerous" European destinations, although the losses from submarines and mines have caused heavy increases in For example, freight for neutral tonnage to Antwerp had more than doubled to a level of around $22 per ton by February 1940, with the result that freight on a cargo of wheat from Argentina to Belgium became more than the value of the cargo itself f. o. b. Rosario.

6

With the Tramp Shipping Administrative Committee no longer establishing conference rates for the bulk of Argentine shipments to Europe, the only formal conference affecting Argentine exports is the Pacific Coast-River Plate-Brazil Conference, with headquarters at San Francisco, which controls both north-bound and south-bound rates between the River Plate and United States Pacific-coast ports.

A pre-war committee of shipowners engaged in fixing minimum freights for tramps. See Trade Promotion Series No. 185, "Control of Ocean Freight Rates in Foreign Trade."

There is a south-bound conference from the United States Atlantic and Gulf ports to the River Plate, but as yet there is no formal north-bound conference." Compared with ships of other nationalities, American vessels since the outbreak of the European War have been fairly plentiful in the River Plate, and rates to the United States are said not to have been abnormally high.

The Argentine freight-market situation was briefly summarized in February 1940 by a local shipping journal, The Times of Argentina, which commented on the lack of normal shipping transactions, as follows:

It is not easy to pen an interesting freight report in these days because there is very little real business passing. Both owners and shippers seem to be almost completely under orders, and this extends to neutrals as well. For instance, Scandinavian business is today f. o. b. The shipper here does not know the rate that the ship is charging. He merely receives orders to place on board at a given price, and there his interest ceases. One gathers that this sort of thing will expand and extend as the weeks pass. The independent owner and shipper will cease to exist. As a result, chartering, as in the days of old, is practically extinct, except in the trade to the States and, in less degree, to the Mediterranean and Belgium. * * * General cargo is moving, but, except for An.werp, all business is at fixed rates. * * * There has been no business reported for Italy, mainly because there has been no space offering. * * *

For several years there has been agitation for an Argentine mercantile marine, and the war has crystallized local sentiment to the effect that Argentina should not be so dependent on foreign shipping services. The Government has recently designated another commission to draw up a preliminary plan for organizing a national mercantile marine, and it is possible that future legislation will include provisions affecting rates.

AUSTRALIA

On January 5, 1940, the British Ministry of Shipping announced the requisitioning at an early date of all ships on the United Kingdom and colonial registers engaged in deep-sea liner trades. This does not apply to ships on Dominion registers. It was stated that most of the ships would be requisitioned by February 1, 1940.

As a sequel to the decision of the British Government, on January 15 the Commonwealth Government appointed a committee to direct shipping activities between Australia and Great Britain. The following is a declaration of its purpose: "Shipping 'operations are to be regulated to give priority to the most important cargoes, to effect economies in the disposition of ships while they are in Australian waters, and to insure that the fullest use is made of available space." The committee is to run ships on behalf of the British Government, but the management and general conduct of the services are to remain in the hands of shipping organizations. The members of the committee, which is comprised of the Australian representatives of the British Ministry of Shipping, a representative of the Commonwealth Government, and Australian representatives of British lines engaged in the Australia-United Kingdom trade, are:

Sir Thomas Gordon, representative of the British Ministry of Shipping in Australia. E. McCarthy, Commonwealth Department of Commerce.

G. R. Rickards, partner of MacDonald Hamilton & Co., Sydney, agents for Peninsular and Oriental S. N. Co., England.

7 Lines operating from River Plate ports to United States Atlantic and Gulf ports are at present (June 1940) cooperating in the quoting of uniform rates pending adoption of a formal conference agreement now in course of preparation by the parties in the trade.

C. E. Whitaker, managing director of W. G. Deuchar & Co., Ltd., Sydney, agents for Ellerman & Bucknell S. S. Co., Ltd., England.

D. F. Middleton, manager Gibbs Bright & Co., Sydney, directors of Port Lines, England.

S. V. Jones, manager of Australian office of Blue Star Line, Ltd., England, A. G. Potter, director of Birt & Co., Pty. Ltd., representing Federal Steam Navigation Co., Ltd.

Mr. Rickards, who is chairman of the Overseas Shipping Representatives Association, is chairman of this newly appointed committee. Before the outbreak of war in September 1939, freight rates from Australia to the United Kingdom and Europe were established by the Australian Oversea Transport Association, an organization of producers, exporters, importers, and shipowners.8

Freight agreements existing in the Australia-United KingdomContinent trade before the outbreak of war would have expired on June 30, 1940, and under normal conditions it was expected that new forms of agreements would have been drafted early in 1940. With the outbreak of war, however, in September 1939, all existing freight contracts were canceled, and rates of freight by all vessels sailing from Australia to the United Kingdom were increased by 25 percent under instructions from British shipowners. On October 13 a further surcharge of 25 percent was made on freights from Australia to the United Kingdom and the Continent, making an increase of 50 percent over the rates in effect to these countries before the outbreak of Since then these surcharges have been replaced by net rates for various products, which show a general increase of 50 percent. Rebates are no longer granted.

war.

A comparison of parcel freight rates on regular liners from Australia to United Kingdom-Continent before the war and on February 1, 1940, on some of Australia's principal export products, is given in the following table:

Freight Rates (Sterling), Regular Liners, Australia-Europe

With the requisitioning of all British ships on February 1, 1940, the British Ministry of Shipping assumed power to fix freight rates on those ships between Australia and the United Kingdom.

Soon after the commencement of the war Great Britain completed agreements with Australia to purchase Australia's entire wool production for the duration of the war, together with all Australian surpluses of butter, cheese, eggs, meat, sugar, canned fruits, dried fruits, and some metals. Britain also purchased some of the remaining exportable surplus of the 1938-39 wheat crop, and early in 1940 pur

& See Trade Promotion Series No. 185, p. 101.

chased 56,000,000 bushels of wheat and 150,000 tons of flour from the 1939-40 crop.

A great difficulty which confronted the Australian and British Governments following the outbreak of the war was the shortage of tramp tonnage to lift cargoes other than those carried by regular liners, such as the quantities of wheat purchased from Australia by Great Britain. It is reported that neutral ships in January 1940 asked 100s. sterling, upward, per ton for the carriage of wheat from Australia to the United Kingdom, whereas British charter rates were much lower, namely, 55s. per ton.

BELGIUM

Although most European countries resorted to state control of freight rates with the advent of war, Belgium did not adopt Government control either of rates or of tonnage. Freight rates on commodities carried between the United States and Belgium, both eastbound and west-bound, were fixed by the various conferences, covering shipping services between Belgium and the United States. These conferences met from time to time to fix the minimum rates, which became valid for a prescribed period.

There were outsiders in this trade, but their rates were influenced by the rates of the conferences, although they were not necessarily the same. In general, it may be stated that the rate structure of the conference lines, prior to the invasion of Belgium, was affected by general market conditions.

In January 1940, rates were about 75 percent higher than those in effect just prior to the outbreak of the war. This increase resulted from higher costs of operation in the form of wages, fuel prices, and insurance premiums.

BRAZIL

No wartime steps have been taken by the Government of Brazil to exercise control over ocean freight rates. The situation remains as reported in Trade Promotion Series No. 185.

CANADA

It does not appear that, following the outbreak of the war, any special wartime measures were taken in Canada with respect to ocean freight rates. Canadian authorities, however, worked closely with the British Ministry of Shipping, and, presumably, the former coordinated their policy with that of the latter that is, keeping rates for vessels under their control rather closely in line with operating costs.

It

Broad authority over shipping was undertaken by the War Measures Act. This act established a licensing board to regulate sailings of all ships registered in Canada of more then 500 gross tons. covered traffic between Canadian and non-Canadian ports, and vice versa, or traffic of Canadian vessels between any two points outside of Canada. The control was summarized in an official statement as follows:

Licenses may be granted either for particular voyages or at the discretion of the Board a general license may be granted to a ship to engage in a specified trade for a period of not longer than 3 months. Ship owners should take it for granted that the Board will always view with favor, should there be no reason

for not doing so, contemplated voyages, and everything possible will be done to facilitate the issuing of such licenses. The Board desires to do its utmost to facilitate shipping, avoid unnecessary voyages in ballast, and, as far as possible, to regulate voyages to the congested ports.

At the outset, the control of external movements of Canadian ships was exercised by the Ship Licensing Board. Later, as an administrative measure, this work came under the scope of the Canadian Shipping Board headed by the Deputy Minister of Trade and Commerce. Under this organization a Ship Licensing Committee functions as the control agency.

The personnel of the Canadian Shipping Board was announced, early in January 1940, as comprising Maj. J. G. Parmalee, Deputy Minister of Trade and Commerce, as chairman, and Hugh L. Keenleyside, of the Department of External Affairs; R. K. Smith, Director of Marine Services of the Department of Transport; A. W. Merriam, of the War Regulations and Censorship Section of the Department of National Revenue; and Commander J. A. Heenan, of the Steamship Subsidies Branch of the Department of Trade and Commerceall as members.

The press was informed by the chairman of the Canadian Shipping Board that it would work closely with the British Ministry of Shipping and would cooperate fully with United Kingdom Government agencies in the matter of securing ship tonnage during the war. It was pointed out that Canada had virtually no merchant marine and must rely on outside sources to carry Canadian goods to export markets, this implying the necessity of chartering tonnage whenever ships, either neutral or Allied, were available. The principal duties of the Board, which held its first meeting January 3, are to deal with all applications for transportation and priority of movement with respect to the transport by sea of materials and supplies other than those consigned to the Government of the United Kingdom or any other power; to recommend to departments concerned, or to the Government, policies or specific measures designed to assist in providing ocean transport for Canadian export trade; and through its London representatives to maintain constant contact with the United Kingdom Shipping Ministry; and to insure the fullest cooperation toward meeting the needs of Canadian export trade.

CHILE

The Government of Chile has not passed any wartime laws or issued any orders or regulations tending to control ocean freight rates in foreign trade, as regards either national or foreign vessels.

COLOMBIA

Colombia has no merchant marine or national-flag vessels operating on international trade routes.

All traffic moving between Colombia and foreign countries is carried in foreign vessels, and the freight schedules in force for the transportation of goods in these vessels are determined by conference or other methods over which the Government of Colombia does not exercise any control.

245910-404