Wi EE aero Ne 
that the conference et eae ae 
admittedly imperfect, institution that should be 
alleed toyperis: B but which should be closely regi u- 
This report SHR provided ‘much of the basis 
for the regulatory provisions of the Shipping Act of 
1916, which today remains a major statutory author- 
ity for the Federal economic regulation of shipping. 
The following two paragraphs from the Alexander 
Report *1 summarize its findings and the general 
philosophy upon which the Shipping Act of 1916 
was predicated. 
“Tt is the view of the Committee that open 
competition cannot be assured for any 
length of time by ordering existing agree- 
ments terminated. The entire history of 
steamship agreements shows that in ocean 
commerce there is no happy medium be- 
tween war and peace when several lines 
engage in the same trade. Most of the 
numerous agreements and conference ar- 
rangements discussed in the foregoing re- 
port were the outcome of rate wars and 
represent a truce between the contending 
lines. To terminate existing agreements 
would necessarily bring about one of two 
results: the lines would either engage in 
rate wars, which would mean the elimina- 
tion of the weak and the survival of the 
strong, or to avoid a costly struggle, they 
would consolidate through common owner- 
ship. Neither result can be prevented by 
legislation, and either would mean a 
monopoly fully as effective, and it is be- 
lieved more so, than can exist by virtue of 
an agreement. Moreover, steamship agree- 
ments and conferences are not confined to 
the lines engaging in the foreign trade of 
the United States. They are as universally 
used in the foreign trade of other countries\/ 
as in their own. The merchants of these 
countries now enjoy the foregoing advan- 
tages of cooperative arrangements, and to 
would place. Te eres at ta dis- 
advantage in many markets as s as compared 
with their foreign competitors. — 
“While admitting their many advantages, 
the Committee is not disposed to recognize 
steamship agreements and conferences, un- 
less the same are brought under some form 
of effective government supervision. To 
permit such agreements without govern- 
ment supervision would mean giving the 
parties thereto unrestricted right of action. 
Abuses exist, and the numerous complaints 
received by the Committee show that they 
must be recognized. In nearly all of the 
trade routes to and from the United States 
the conference lines have virtually a mo- 
nopoly of the line service. The committee 
believes that the disadvantage and abuses 
connected with steamship agreements and 
conferences as now conducted are inher- 
ent, and can only be eliminated by effective 
government control; and it is such control 
that the committee recommends as the 
means of preserving to American exporters 
and importers the advantages enumerated, 
and of preventing the abuses complained 
of.” 
Regulation of Foreign Trade Shipping 
With enactment of the Shipping Ac , the 
United States became unique among major maritime 
nations in its assertion of the 1 the 
terms_and conditions of competition in the carriage 
of_its_waterborne_international commerce. While 
other major trading nations have, from time to time, 
investigated and expressed concern about the power 
of shipping conferences, only the United States has 
31 U.S. Congress, House Committee on Merchant Marine and 
Fisheries. Steamship Agreements and Affiliations in the American 
Foreign and Domestic Trade. Washington, D.C., 1914. It should 
be noted that while the views expressed in the Alexander Report 
provide much of the foundation for contemporary U.S. regula- 
tory policies, this philosophy has not gone unchallenged. Over 
the years there has been a substantial body of opinion which 
has held that the public would be better served by less govern- 
ment regulation and greater application of U.S. antitrust policies 
to the liner shipping industry. Proponents of this position argue 
that the presumption that unrestrained competition in liner 
shipping is inevitably destructive has been overdrawn. 
chosen the path of regulation to control this power. 
For example, 5 years before the release of the 
Alexander Report, the Royal Commission on Ship- 
ping in Great Britain released a similar extensive 
report on shipping conference practices. While the 
Royal Commission also found serious abuses asso- 
ciated with the conference system, it recommended 
a private rather than public solution, Recognizing 
the value of conferences as stabilizing influences in 
ocean transportation, the Commission felt that the 
benefits of the conference system could be best main- 
tained_and the abuses—best—controlled through the 
encouragement oO 1 ymbinations of 
shippers and me ch bargain collec- 
tively from_a ith the shipping 
conferences. Over the years this has been the gen- 
eral tactic adopted by most of the rest of the world 
and the United States has been frequently criticized 
V-19 
