This rate regulation authority is substantially less 
extensive than that exercised by the Federal Govern- 
ment with respect to domestic water carriage. As 
noted in a recently published Justice Department 
study, the Shipping Act of 1916 and the Intercoastal 
Shipping Act of 1933 provide the Federal Govern- 
ment with extensive ratemaking authority with re- 
spect to domestic waterborne common carriage.** 
It is to this domestic waterborne transportation regu- 
lation that attention will now be directed. 
Regulation of Domestic Trade Shipping 
Under the terms of the Shipping Act of 1916, the 
regulatory authority granted to the United States 
Shipping Board extended to ocean and Great Lakes 
common carriers in interstate domestic commerce as 
well as to common carriers in the U.S. foreign trades. 
But while the major trade practice prohibitions and 
requirements imposed on foreign trade common car- 
riers applied equally to domestic common carriers, 
the domestic carriage rate regulation authority of 
the Board was, from the beginning, far greater than 
its foreign trade rate regulation authority. For exam- 
ple, while it was not until 1961 that foreign trade 
tariffs of independent carriers were required to be 
filed with the Federal Government, tariffs for domes- 
tic ocean and Great Lakes common carriage were 
required under Section 18 of the Shipping Act as 
originally enacted. 
It is important to note, however, that this early 
authority to regulate domestic rates, while clearly 
greater than the authority to regulate foreign trade 
rates, was limited in two important respects. First, 
the 1916 Act required only that maximum rates be 
filed with the Shipping Board and left carriers free 
to charge rates below the maximum so long as some 
other provision of the Act was not violated in the 
process. The Board was, however, granted authority 
to prescribe a new maximum rate upon finding a 
particular rate unjust or unreasonable, and unjust or 
unreasonable trade practices could also be set aside. 
Nonetheless, the original domestic trade ratemaking 
authority available under this rate ceiling approach 
was significantly more constrained than the author- 
ity exercised today by the Federal Government in 
this area. 
The other major limitation on the original author- 
ity of the Shipping Board with respect to domestic 
water carriage regulation derives from the definition 
contained in the Act of domestic carriers subject to 
its provisions. Because only ocean and Great Lakes 
interstate common carriers were included in the 
domestic water carrier definition, the entire inland 
waterway system was excluded from the regulatory 
authority of the Government (except, of course, for 
the rail-related regulatory authority exercised by 
ICC). Furthermore, all contract and private carriers 
in the domestic ocean trades were beyond Federal 
jurisdiction under this definition. 
The first important expansion of Federal domestic 
38 U.S. Department of Justice, op. cit. note 36, p. 36. 
trade regulatory authority came in 1933. Following 
World War I, intense competition developed in the 
carriage of intercoastal domestic commerce via the 
Panama Canal and demands for expanded Federal 
regulation to control this situation began to emerge. 
In 1933, the Congress responded with enactment of 
the Intercoastal Shipping Act, which required both 
common and contract carriers to file tariffs with the 
Shipping Board for all domestic intercoastal carriage 
provided via Panama. Such tariffs were required to 
specify the exact rate to be charged rather than a 
minimum, maximum, or range of rates, and the 
Shipping Board was given broad authority to suspend 
unjust or unreasonable rates and practices. Hence, in 
this one trade area, Federal regulatory authority was 
simultaneously extended to include contract carriers 
and substantially expanded with respect to ratemak- 
ing and rate regulation. 
In 1938 the relevance of the Intercoastal Shipping 
Act, with respect to the regulation of domestic ship- 
ping, was greatly enlarged by an amendment which 
extended the provisions of the 1933 law to all 
domestic trade common carriers as defined in the 
Shipping Act of 1916.°° With this amendment, the 
Intercoastal Shipping Act of 1933 became the pri- 
mary statutory authority for Federal regulation of 
domestic water transportation rates. In compliance 
with this legislation, domestic ocean and Great Lakes 
common carriers were required to file new tariffs 
with the U.S. Maritime Commission (which by this 
time had assumed the responsibilities of the Shipping 
Board) reflecting actual, rather than maximum, rates 
for domestic service. In addition, all such carriers 
became subject to expanded Federal ratemaking 
authority because it was no longer a rate ceiling 
which had to be fair and just, but a specific rate. 
Under this expanded authority, rates could be sus- 
pended by the Maritime Commission if found to be 
either too high or too low, and the Commission was 
authorized under such circumstances to prescribe 
appropriate rates for the services in question. Thus, 
together, the Shipping Act of 1916 and the Inter- 
coastal Shipping Act of 1933 became the two prin- 
39 Interestingly, the 1938 amendment did not include extension 
_ of the rate provisions.of the Intercoastal Shipping Act to other 
domestic contract carriers. Thus, while common carriers in all 
domestic interstate ocean and Great Lakes trades became subject 
to the Intercoastal Shipping Act, the only domestic contract 
carriers subject to this legislation were those operated in inter- 
coastal services via the Panama Canal as originally specified 
when the Act was first passed. 
V-22 
