Agreements may be informal or may be based upon documents. Mr. R. W. Boisevain, general traffic manager of the United Fruit Company, in testify ing before the House Committee gave a description of one of these informal agreements : We have no agreement or understanding or arrangement with any of the companies named, except in this way, that when we entered the trade we did not try to cut the rates, but came in on an equal basis. It was tacitly understood, with out any prearranged agreement, that we would quote the same rates without the necessity of adhering strictly to them, and without the necessity on our part of giving previous notice if we wished to change the rate. But we have no legal agreement or arrangement of any kind. There is a verbal agreement in some cases. Last year when we started to call at two ports on the Colombia line, we did not give notice, but in and quoted rates. BUt there has always been a tacit understanding between the Hamburg American and the Royal Mail that we would stick more or less to their rates.
This statement applied to the relation between the United Fruit Company Line and the Hamburg American Line, the Atlas Service, the Royal Mail, the Panama Railroad Company and the Atlantic Fruit and Steamship Company, all of whom were competing for traffic from a number of Central American ports. The Hamburg—American and the Royal Mail were the strongest competitorsin this ser vice.
The formal agreement may be a conference or a pool. A conference is usually limited to rate main tenance. The pool is a contract to share, on an agreed basis, the freight to be carried, the territory to be served or the profits derived from the business. The character of such a steamship pool may be seen from a concrete example.
7. Hamburg–Ame•ican and Royal Mail Pool.— The Hamburg–American Line and the Royal Mail, though allowing the United Fruit Company to com pete as long as no rate cutting took place, were bound by a written agreement. The agreement reads : Memorandum of agreement entered into this 21st day of February, 1908, between the Hamburg-American Line of Hamburg and the Royal Mail Steam Packet Company of London: 1. It is agreed that commencing from 1st March, 1908, 50 per cent of the freight earned (excluding earnings on refrigerated cargo, bananas and large contract shipments of cement or clinkers for the Isthmian Canal Commission) in their respective services between New York, Jamaica, Co lombian ports, Colon, and vice versa, are to be pooled on the basis of per cent to the Hamburg-American Line and per cent to the Royal Mail Steam Packet Company.
2. A margin of five per cent on the above proportions to be allowed each company, and if, at the end of the year, it should be found that the actual total earnings of each com pany have amounted to less than the respective proportions of per cent by the Hamburg-American Line and per cent by.the Royal Mail Steam Packet Company ; then
the difference . between these minimum proportions and the proportions actually earned shall be adjusted in accordance with the following example: If Hamburg-American Line shall only have earned, say, 70 per cent of the total earnings of both companies, they shall pay to the Royal Mail Steam Packet Company, one half of two and one-half per cent of the pooled freight.
On the other hand, if the Royal Mail Steam Packet Com pany shall only have earned, say, 15 per cent of the total earnings of both companies, they shall pay to the Hamburg American Line one-half of two and one-half per cent of the pooled freight.
It is also agreed to ascertain, month by month, the quan tity of cargo carried by the respective lines with a view to arrange carriage in the agreed proportions, as far as pos sible.
3. A joint freight tariff to be agreed between the agencies of the companies in New York.
4. The parties further agree to run their passenger steamers between New York and Colon alternately, as far as possible.
5. The Royal Mail Steam Packet Company bind them selves not to extend their services to Haitian ports and Santa Marta, as far as sailings to and from New York are concerned, except that in case of war with the Koninklijke West-Indische Maildienst (Dutch Line) the Royal Mail Steam Packet Company shall have the privilege of calling at Haitian ports served by the Dutch Line.
As regards Port Limon, it is not the intention of the Royal Mail Steam Packet Company to extend their present serv ices to that port, but they reserve the right to call there and in the event of any steamers of the Royal Mail Steam Packet Company requiring to call, it is agreed that the two compa nies shall meet and endeavor to make such arrangements as will least interfere with the interests of each other.
6. The Hamburg-American Line bind themselves not to call at Trinidad and Granada from and to New York, ex cepting with their cruising steamers.
7. The service between New York and Puerto Barrios to be reserved to the Hamburg-American Line, but if more than a four-weekly steamer should be required the Royal Mail Steam Packet Company to have the option to divide alternate steamers for the additional sailings. The Royal Mail Steam Packet Company are in no way to be precluded from calling at Puerto Barrios with their intercolonial steamers.