Port Operation

Berthing Charges.

Another difference in European and American port operation is in business methods. Under the American system the steamship company assumes the entire charge for the berthing of the ship—paying for its berthing as well as its pier space which it uses to discharge or assemble its cargo. The shipper generally does not have imposed upon him any additional or auxiliary charges other than the freight rate which the ocean craft makes for the ocean movement or the flat rate which the inland railroad may charge for the movement to and from the port and to and from the particular pier at which a ship awaiting or discharging the cargo may be berthed.

With no progressive ocean freight or inland freight charge there is no inducement to the merchant, the shipper or consignee, to move his merchandise in any particular fashion which might reduce the cost of such movement, except where speed may be a factor. Moreover, because of the length of time which the merchant is given to move his material and because of certain local customs, the merchant prefers to have all of the merchandise discharged to the dock, sorted out and there held, availing himelf of the oppor tunity of selling direct from the dock or holding in case of a lower market. Thus the American system of handling merchandise at ports respecting international trade, involving the co-ordination of the inland system of transportation with the ocean system of transportation, is carried on in a relatively expensive manner. This being true, and the expenses being borne by not more than two parties—the owner of the steamship or the inland system of transportation—has caused the erroneous statement to be made that the cost of handling freight in American ports is lower per ton than in European ports.

Location and Development of Ports.

A tendency to de velop greater inland ports has been noticed in recent years. Nota ble instances are the Canadian port of Montreal, and, in the United States, the artificially created port of Houston, Texas, also the agitation for the St. Lawrence waterway development. This latter is an effort to make ocean ports out of strictly lake ports and other interior points. Location of American ports near the coast-line generally has been possible because of favourable geo graphical advantages. Illustrating the advantages in this respect are the ports of New York, Norfolk, Newport News and Boston. Competition in sections of the United States for the creation of port facilities has caused some States to create ports artificially and to take other means than the general development of that of the older and more important ports on the Atlantic coast. This has sometimes led to the erection by public agencies of facilities operated at a loss in order to attract tonnage from the more important and older ports.

Until quite recently all port development in the United States has been of a private character while that of many other countries has been carried on by sovereign authority, either national, State or municipal and in many instances by a combination of the three, or through the activity of railroad companies. In 1928,

however, there was a tendency to establish the development of ports by quasi-public bodies. The reason for this change of atti tude is the increased importance placed on ports which the con duct of governmental operations under emergencies of war brought vividly before all public officers and public bodies. More over the development of ports situated in adjoining States has been of such great value to industrial progress, that the building of "outports" or smaller ports is being vigorously prosecuted.

Thus due to the difficulty of development by private interests of a system of public control, the construction and operation of ports by the creation of "port authorities" is rapidly spreading.

The recently established American port authorities follow, in many respects, the fundamentals and basic organization of the port authorities of other countries. The water-front facilities have become so important to the place at which they exist that it has become a matter of police power of the sovereignty to see that public rights are protected. However, with the con flicts which exist in the legislation of some 48 States, there is no single method of port authority control in the United States.

Some port authorities are organized without actual power to purchase, construct or operate port facilities but have police power. Others are formed with police power and with an indirect authority to purchase, construct, manage and operate port facili ties on the basis of issuance of bonds, but without the credit of the State pledged to such bonds. Such port authorities have ad vantage of the low interest rates of sovereignty which creates it. In this respect alone, such authorities have an advantage in the matter of development not within the power of the private enterprise. The port authority is generally not subject to real estate taxes and other taxes which the private enterprise must bear. With this advantage, a development is more easily origi nated and carried to conclusion by a sovereign power operating through its agency of the port authority than might be expected for a development of the same facility by private capital.

Some of these adventures by quasi or public agencies repre senting a sovereign power have been attended by marked success, but the value of this phase has not been fully demonstrated to the degree of ownership, control, management and operations such as similar institutions in other countries have demonstrated. Federal regulation of ports rests with two departments of the Government. The War Department has exercised its power through the Corps of Engineers of the U.S. army. Since the World War, legislation has been passed which has placed in the hands of the War Department the duty of assisting in the matter of the development of ports and protection of ports to a greater degree than heretofore existed. Legislation creating the U.S. Ship ping Board, likewise instituted a control jurisdiction over ports in certain respects by this body, comparable to that which the Interstate Commerce Commission exercises over the interstate commerce of the country by railways. (P. L. G.)