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Under section 27 of the Merchant Marine Act, 1920, it is provided in effect that no merchandise shall be transported in our coastwise trade, on penalty of forfeiture thereof, except in vessels built in and owned by persons who are citizens of the United States. Under section 38 of the same act it is provided that the word "citizen" as used in that act means, in the case of corporations, that 75 percent of the stock must be American owned.

The Central Vermont Transportation Co. is operating vessels between New London and New York, the stock of the company however not being 75 percent American owned. The Grand Trunk Railway System is operating car ferries from Milwaukee to Grand Haven and Muskegon as a continuation and part of its railway system. The capital stock of that corporation is not 75 percent American owned.

Both of these companies were operating vessels as part and continuation of their railway services prior to the passage of the act of June 5, 1920, and such operation was then in accord with our law. It is understood that these companies, because of the acts cited above, as interpreted by the Supreme Court of the United States, October term, 1934, are in a difficult position possibly involving the discontinuance of some of their services.

The amendment to section 27 of the Merchant Marine Act covered by S. 619 is an effort to remedy this condition and permit the said companies to continue their operations in accordance with law.

When the question which was later adjudicated by the Supreme Court was before the Circuit Court of Appeals, that court expressed regret that it was necessary to decide the case against one of these companies because of the hardship which would be involved. This Department also has before it the difficulties in which these companies find themselves and therefore does not offer objection to the bill, provided, there are incorporated in the bill the following amendments:

In line 10, after the word "vessel” insert the words “as part of a rail and water route".

In line 11, after the words “common carrier”, insert the words “by water".

On page 2, line 2, after the words “common carrier", insert the words "by water”.

At the end of line 7, page 2, insert the words "and if such car ferries and vessels are documented under the laws of the United States",

In considering this amendment the Department has given full consideration to the care which should be exercised to prevent the opening of our coastwise trade to vessels owned or controlled by alien interests, and has considered that the effect of this bill will be so limited as to avoid such a result.

J. B. WEAVER, Director.


Washington, January 23, 1935. Hon. ROYAL S. COPELAND, Chairman Committee on Commerce,

United States Senate, Washington, D. C. MY DEAR MR. CHAIRMAN: The Chairman of the Commission has referred to our legislative committee your request of the 18th instant for a report on S. 619, introduced by Senator McNary, and entitled “A bill to amend section 27 of the Merchant Marine Act, 1920.” This bill has been given careful consideration by our legislative committee and it has authorized me to submit the following report:

Section 27 of the Merchant Marine Act, 1920, prolibits transportation by water or land and water between points within the United States in any vessel not documented under the laws of the United States and owned by citizeus of the United States. There is a proviso that this shall not apply to transportation between points within the continental United States over routes recognized by this Commission, for which rate tariffs are on file with it, “when such routes are in part over Canadian rail lines and their own or other connecting water facilities."

Recently the Supreme Court rendered a decision in the case of Central Vermont Transportation Co. v. Harry M. Durning, Collector of Customs of the Port of New York. This decision held that the exemption of the above-mentioned proviso did not exempt traffic moving over the Central Vermont Transportation Co.'s steamship line on Long Island Sound and the Central Vermont Railway, which is owned by the Canadian National Railways Co., because no part of the transportation took place in Canada. We assume that the amendment proposed in S. 619 is prompted by that decision of the Supreme Court and intended to extend the exemption to cases where the traffic does not actually move through Canada. So far as we know at this time, there are only two situations to which the amendment would apply: First, that of the Central Vermont Transportation Co.'s steamship line on Long Island Sound; and, second, the Canadian lines' car ferries across Lake Michigan. These lines may have to go out of business if such an amendment is not adopted. We believe that these lines are performing an efficient transportation service and that their continuance is in the public interest. We have no objection, therefore, to adoption of the proposed amendment. Respectfully submitted.

FRANK McMANAMY, Chairman Legislative Committee.


January 23, 1935.
Chairman Senate Committee on Commerce,

Senate Office Building. MY DEAR SENATOR COPELAND: It is of great importance that S. 619 (now in the Commerce Committee) be reported at this week's meeting of the committee if possible because it is very much of an emergency measure. It was introduced by Senator McNary but it deals chiefly and almost exclusively with a navigation problem on the Great Lakes.

It has suddenly developed-after many years—that the Grand Trunk car ferries on Lake Michigan and the Mackinac-St. Ignace car ferry are owned by Canadian interests in greater degree than is permitted by our coastwise laws. Therefore, the Department of Commerce will have no alternative except to force them to suspend. This of course will be a terrific wrench to our existing transportation facilities particularly in the wintertime because the car ferries are the only ones which can keep open a lane of transportation through the ice.

It was never intended, of course, that the Merchant Marine Act should interfere with this type of coastwise transportation. The Department of Commerce is entirely agreeable to an amendment as contained in S. 619. It will recommend S. 619 to the committee with a brief amendment to make it even more obvious that we are not opening up our coastwise trade to foreign ships but that we are merely exempting car-ferry transportation which was in existence as standard practice prior to the original adoption of the Merchant Marine Act. I understand that the bill would affect no other situation in the country except these Lake Michigan ferries and one situation involving the Vermont Railroad.

I may not be able to attend the Commerce Committee meeting tomorrow morning because of conflicting engagements, although I shall try to get in before ad. journment. In either event I shall appreciate it if this necessity can be laid before the committee and a favorable report authorized. I believe that Senator White is familiar with the situation. With warm personal regards and best wishes, Cordially and faithfully,





18t Session


No. 25


JANUARY 21 (calendar day, JANUARY 25), 1935.-Ordered to be printed

Mr. Adams, from the Committee on Appropriations, submitted the



[To accompany H. J. Res. 88)

The Committee on Appropriations, to which was referred the joint resolution (H. J. Res. 88) making additional appropriations for the Federal Communications Commission, the National Mediation Board, and the Securities and Exchange Commission for the fiscal year ending June 30, 1935, reports the same to the Senate with various amendments, and presents herewith information relative to the changes made: Amount of resolution as passed the House

$1,477, 750 Amount added by Senate.

369, 00 Amount carried by resolution as reported to Senate -

1, 846, 750 The changes in the amounts of the House Resolution recommended by the committee are as follows:


75, 000


Miscellaneous items, exclusive of labor...
Inquiries and investigations-

Total, Senate
District of Columbia-Virginia Boundary Commission.
Securities and Exchange Commission.--

215, 000

4, 000 150,000

Total increase
Amount of resolution as reported to the Senate-

369, 000 1, 846, 750

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