202 TRANSPORTATION 



Second that these combinations and rings have led to the 

 formation of great shipping trusts. These trusts control not 

 only the lines directly owned by them, but also control, to a great 

 extent, the traffic of the tramp ships, which gives them a power- 

 ful monopoly. 



Third that these monopolies give rise to and maintain exces- 

 sive and unjust rates, and by use of " fighting ships" and by 

 rebates to large shippers, tend also to bring forth other and danger- 

 ous monopolies, monopolies in buying and monopolies in selling. 



Competition is spoken of in these words: 



"Unrestricted competition, based on the survival of the fittest, 

 tends to restrict the development of the lines, and in the end must 

 result in monopoly . . . Competition in the steamship business 

 was regarded as the demoralization rather than the life of trade; 

 as the means of introducing uncertainty instead of certainty, and 

 inefficiency instead of efficiency." The steamship companies ad- 

 vanced this statement, on the same subject: " Competition has 

 never established a reasonable rate nor maintained a stable rate 

 . . . Rate wars tend to the monopolization of trade by the larger 

 shippers. Unless the warring steamship factions come to some 

 agreement, the result is more or less of a monopoly on the part 

 of the most powerful carrier engaged in the conflict." 



These rings gave stability to rates on high-priced freight. But 

 these rings did not cover heavy bulk traffic, such as grain, flour, 

 oil cake, cotton, and similar commodities. The " package traffic" 

 (the high-priced freight) constituted 22 per cent of the tonnage, 

 while the bulk traffic constituted 78 per cent. That is, 78 per cent 

 of the tonnage, unregulated by agreements, consisted mainly in 

 the staples of agriculture. On the staples, ocean freight rates 

 varied not merely from month to month, but from day to day and 

 from hour to hour. This introduced an element of risk, which in 

 turn necessarily reflected itself in the price of the commodity. 

 In other words, the foreign buyer or American exporter would be 

 forced to hedge his risk, so far as possible, by paying a lower price 

 for the commodity. 



The situation is beyond the reach of any one nation. An 

 International Commerce Commission, strongly urged by Hon. 

 David Lubin, Delegate of the United States to the International 

 Institute of Agriculture at Rome, offers one feasible solution to 

 the problem. 



The World War brought a new element into the situation, 

 when the United States entered the field of ocean transportation. 



