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5 and 35 percent below conference levels have become prevalent. 
The Commission advocates rates as low as economically feasible to 
‘permit our importers and exporters to compete in international mar- 
kets, but at the same time sufficiently compensatory to encourage 
carriers to offer regular and efficient transport services and to sustain 
a financially viable steamship industry. 
Some contend that the rate-cutting policies being practiced by these 
predatory carriers can be countered through a strict enforcement of 
the Shipping Act. The advocates of this approach indicate that 18 
(b)(5) of the Shipping Act of 1916 already provides sufficient author- 
ity for the Federal eae Commission to “disapprove any rate 
or charge filed by a common carrier by water in the foreign commerce 
of the ‘United States or conference of carriers, which, after hearing, 
it finds to be so unreasonably high or low as to be deterimental 
to the commerce of the United States.” By employing this existing 
provision in an expeditious manner, it is maintained that the Commis- 
sion could take actions to disapprove predatory rates. Those who 
discard this approach point out that the type of hearing required 
under the provisions of 18 (b)(5) requires that each respondent be 
accorded the full measure of protection under established rules and 
procedures; and that under these circumstances, the time consumed 
to conduct hearings of this nature would be of such duration that 
immeasurable harm to our foreign commere could result or at least 
continue unchecked during these lengthy proceedings. Moreover, ex- 
perience has shown that whenever foreign-flag carriers are subpenaed 
to submit cost data related to rate levels, their immediate reaction 
is to raise national prohibitions against the submission of this type 
of information to a foreign government. 
Another point of view contends that given the tendency of certain 
carriers to engage in predatory practices for profit or political gain 
in our foreign trades, unless strong and immediate corrective measures 
are undertaken, the United States will find itself in an unprotected 
position without a strong merchant fleet and in a situation where 
even the nunpredatory cross-traders will be driven from the seas. 
Accordingly, it is suggested that some form of bilateral arrangements 
be established at an early date to exclude most of the third-flag 
participation in U.S. foreign commerce. Many of the less-developed 
and certain other countries seeking to develop a merchant marine 
rapidly have been instituting this practice. Those who object to the 
adoption of this practice as a national policy maintain it could result 
in a swift reaction from many of our Western trading partners, and 
that it would be contrary to our own best interests in that it would 
tend to discourage competition to a degree detrimental to the opera- 
tions of our exporters and importers who are forced to compete 
in foreign markets. 
The Commission has consistently supported a bill submitted by 
Senator Daniel K. Inouye, of Hawaii, in the 93d Congress and which 
has again been introduced by him before the 94th Congress as S. 
868. S. 868 has as its primary objective the regulation of the rate- 
cutting practices of third-flag carriers operating in the U.S. trades. 
The bill would require that non-national-flag carriers demonstrate that 
their rates are compensatory on a commercial cost basis. These car- 
riers would be prohibited from charging rates lower than the lowest 
