Secretary of War shall, upon complaint, or may upon his own initiative without complaint, and after notice and hearing, at any time and from time to time prescribe, the just and reasonable rates of toll for such transit over such bridges, and the rates so prescribed shall be the legal rates and shall be the rates demanded and received for such transit.

Since the enactment of the above act of March 4, 1927, it is no longer necessary for Congress to pass private bridge bills for bridges over the Red River in order to regulate the tolls, and since the decision of the Supreme Court in Oklahoma v. Texas (258 U. S.), it is no longer necessary for Congress to pass private bridge bills for bridges over that part of the Red River in order to regulate or protect navigation on the river.

But it appeared at the hearings that the States of Oklahoma and Texas had entered into certain agreements or compacts by which they have purchased and are operating certain existing highway bridges over the Red River, and that the said States had entered into certain agreements or compacts by which they proposed jointly to construct, maintain, and operate certain other bridges over that part of the Red River. Section 10, Article I, of the United States Constitution prohibits States from entering into any agreements or compacts without the consent of Congress. It was the view of the committee, therefore, that general consent and approval of Congress ought to be granted to all agreements or compacts that have heretofore been or may hereafter be entered into between the States of Oklahoma and Texas for the purpose of purchasing, condemning, constructing, and maintaining any highway bridges over the Red River for the purpose of connecting up their respective highway systems.

The committee therefore amended the bill H. R. 7968 by striking out all after the enacting clause and inserting a new bill.

Section 1 of the new bill, in compliance with the Constitution of the United States, grants the general consent of Congress to any agreements or compacts that have heretofore been or may hereafter be entered into between the two States for the purpose of purchasing, condemning, constructing, and maintaining highway bridges over the Red River at such points as the States may agree upon for the purpose of connecting up their highways.

Section 2 provides that if any part of the bed of the Red River where it adjoins the boundary between the two States is the property of the United States, or is unallotted lands of Indian tribes under any treaty made by the United States, the consent of Congress is granted to the two States for rights of way for the purpose of constructing highways and bridges over such lands.

Section 3 grants to the two States acting jointly the right of eminent domain for the purpose of acquiring any lands needed for the construction of such highways or bridges.

It is the judgment of the Committee on Interstate and Foreign Commerce that this bill as amended ought to be passed and that when enacted into law the States of Oklahoma and Texas can properly enter into any agreements or compacts for the purchase or condemnation of existing bridges over the Red River, or for the purpose of constructing and maintaining new bridges thereover at such points as they may agree upon for the purpose of connecting up their respective highway systems.

O

GOVERNMENT TO PAY

ARRASTRE CHARGES IN THE

AUTHORIZING THE UNITED STATES
CHECKING CHARGES AND
PHILIPPINE ISLANDS

MARCH 7, 1930.-Committed to the Committee of the Whole House on the state of the Union and ordered to be printed

Mr. SWING, from the Committee on Expenditures in Executive Departments, submitted the following

REPORT

[To accompany H. R. 6127]

The Committee on Expenditures to which was referred H. R. 6127, authorizing the payment of checking charges and arrastre charges on consignments of goods shipped to the Philippine Islands, having considered the same, reports the same back favorably with an amendment as follows:

On page 2, line 12, strike out the remainder of the line after the word "services" and all of lines 13 and 14, together with the word "concerned" in line 15.

In 1922, the Philippine Legislature, acting within its authority, passed an act to create a harbor board for the port of Manila and provided for the collection of certain charges in connection with imports and exports through the port. These charges include checking charges and arrastre charges. The Manila Harbor Board, representing the Philippine government, was authorized to and did contract with a commercial agency, to wit, the Manila Terminal Co., for the operation of the insular-owned piers, warehouses, and other terminal facilities and for the collection of said charges. The arrastre charge became due when a ship discharged its cargo upon a pier and the goods were taken possession of by the Manila Terminal Co. and listed by it as to articles and condition on arrival and stored in the warehouses ready for delivery to the consignee. Checking charges arose when cargo was discharged ship-side directly to the consignee's boat or lighter. Here again the Manila Terminal Co. would list the articles discharged and certify their condition. This was necessary in order to complete the statistics regarding the business of the harbor, to insure the collection of the customs charges, and for the protection

of the consignee in case of dispute as to the condition in which the goods arrived.

The act of the Philippine Legislature having been called to the attention of the Comptroller General, he promptly held that it was inoperative as to shipments made by the United States Government, although the matter had been prviously passed upon by the Quartermaster General of the United States Army, the Judge Advocate General of the War Department, and the Secretary of War himself, all of whom held that the services rendered were necessary, and that the charges in connection therewith were proper and should be paid. The Manila Harbor Board, considering the fact that its agent, the Terminal Co., had to expend money in hiring laborers to handle the Government's shipments from commercial vessels, decided, in view of the Comptroller General's decision, to refuse to land or handle any more goods. As that would have impeded the operation of the United States Government there, the Governor General directed that the services be continued pending negotiations for a final determination of the matter. Hence, Congress was appealed to for relief.

The amount of these charges checked from 1922 up to November 6, 1929, was as follows: For the United States Navy for checking charges, $574.03, and for arrastre charges, $25,135.13; making a total of $25,709.16. For the United States Army, for checking charges, $927.95, and nothing for arrastre charges. The total of all charges unpaid until November 6, 1929, for both Army and Navy, is $26,637.11. The bill authorizes the payment of these past charges as well as future charges.

The committee feels that the United States Government, having created the Philippine government, and authorized it to enact laws within certain prescribed limitations, should be the first one to observe these laws. Hence, in this particular instance, the United States Government ought not to claim an exception but should voluntarily submit itself to the same regulations and charges that are prescribed for commercial concerns enjoying the same services in the Philippine harbor. The passage of the bill, the committee believes, would create a favorable impression in the Philippine Islands.

The amendment is recommended because in the body of the bill, authorization is made for the payment of checking charges while in the proviso the language striken out would raise a question as to whether checking charges would ever be paid in actual practice. The committee feels that the proviso requiring the charges in no case to exceed those charged commercial concerns for like service and also that no charges shall ever be imposed for delivery made to pier owned or operated by the United States Government is sufficient protection against any unreasonable charges in the future. The War Department and Navy Department have each made favorable report on the bill as follows:

WAR DEPARTMENT REPORT ON H. R. 6127

WASHINGTON, November 27, 1929.

The CHAIRMAN COMMITTEE ON WAYS AND MEANS,

House of Representatives.

DEAR MR. CHAIRMAN: There is transmitted herewith the copy of a proposed bill (see inclosure 1), which is submitted for the consideration of your committee, with the request that it be introduced in the Congress. The purpose of this bill

is to legalize the payment of past and future accounts for so-called arrastre charges and checking charges incident to the handling or checking, in the port of Manila, of cargoes unloaded from commercial vessels (otherwise than upon piers operated by the United States Government), and consigned to agencies of departments or bureaus of the United States Government in the Philippine Islands. The nature of the charges in question and the justification of their imposition are hereinafter explained.

The necessity of a bill to legalize the payment of arrastre charges and checking charges is due to decisions of the Comptroller General of the United States in which he has held that there is no authority under existing law to pay such charges from the appropriations of the Army and Navy, which, as far as known, are the only two United States governmental agencies involved in the matter up to this time.

Act No. 3002 of the Philippine Legislature, approved by the Governor General of the Philippine Islands, March 7, 1922 (see inclosure 2), created the Manila Harbor Board. The act provides that the Manila Harbor Board shall have general supervision, regulation, and control of the receiving and handling, custody, and delivery of merchandise on the wharves and piers of the port of Manila and also when ship-side delivery is employed; shall fix the rates charged for such services; shall furnish the insular collector of customs with a complete and correct list of the amount and kind of cargo discharged by each vessel entering Manila Harbor; and shall have authority, subject to the approval of the Governor General, to contract with persons, associations, or corporations to carry out the actual operation of receiving, handling, custody, and delivery of merchandise in the port of Manila. The act further provides that any such contract shall include a statement of the charges to be charged consignees for the services rendered and of the security to be given for the efficient handling, custody, and delivery of merchandise and for the prompt payment of all losses thereof, the charges so prescribed to be subject to the approval of the Governor General.

Pursuant to the provisions of Act No. 3002, the Manila Harbor Board, with the approval of the Governor General, has entered into successive contracts with the Manila Terminal Co. to receive, handle, and deliver to consignees all merchandise received from commercial vessels at the port of Manila. The charge for the service involved, when made by the Manila Terminal Co., under the law and contract cited, in connection with cargo landed on a pier or wharf, is known as an "arrastre charge"; that made for such service as is involved in the case of cargo delivered "ship-side delivery" (from a ship to a lighter alongside without the additional operations incident to landing on a pier or wharf), is known as a "checking charge." These charges are hereinafter discussed sepa

rately under the respective heading.

The original contract of the Manila Terminal Co. with the Manila Harbor Board under Act No. 3002 became effective June 1, 1922, and was to be effective for three years unless sooner terminated. A subsequent contract was entered into on December 1, 1924, and a third contract (now in effect) became effective June 1, 1928.

Among the provisions found in all of the contracts (though not always with the same paragraph numbers) were those appearing as paragraphs 4, 5, 6, 7, 8, 10, 15, and 27 of the contract of 1922. Copies of those paragraphs are appended hereto.

Other paragraphs, the substance of which was common to all three contracts, set forth the uniform scale of charges for the several services to be performed by the Manila Terminal Co. For instance, charges were stated in connection with: "Receiving imported cargo from the ship's tackle, distribution and stacking on the piers, rehandling from the piers onto transportation for the consignee, or for transportation furnished by bonded warehouses."

It was also provided that:

"Merchandise for export shall be received from the exporter's transportation, landed and stored onto the pier in convenient places for loading, and placed into ship's tackle

Additional provisions covered the lease by the Manila Harbor Board to the contractor, subject to certain payments, of the appropriate tools, machinery, and equipment of the board and held the contractor responsible for the proper and efficient performance of the services required by its contract and for loss or damage to shippers, consignees, or others. The board was (subject to certain stated exceptions) to receive 5 per cent of the contractor's gross receipts accruing from the authorized charges.

Paragraph 18 of the original contract of 1922 covered the matter of the so-called "checking charge". This paragraph was modified by paragraphs 2 (approved October 24, 1922) and 5 (approved November 14, 1922) of the Regulations of the Manila Harbor Board issued in connection with the contract with the Manila Terminal Co. Copies of paragraph 18 and the modifying regulations mentioned are appended hereto as Inclosure 4. Other modifying orders merely lowered the checking charge, by successive steps, from P0.20 to P0.12% per ton.

Arrastre. The arrastre charge is in no way a wharfage charge or other imposition in the nature of a tax. In commercial practice, when incoming cargo is landed on a pier, the ship's responsibility under the bill of lading ceases. It is clear that some agency must provide the personal and nonpersonal services incident to the further operations which must intervene before the transaction is completed by satisfactory delivery of the cargo to the consignee. Those operations must include the service incident to the receiving, handling, caring for and final delivery of the cargo. Obviously a check, such as will establish the fact of full receipt and full delivery of the shipment and the condition of the merchandise, is necessary for the due protection of both the carrier and the consignee. The service thus involved includes labor, the use of mechanical equipment provided for such purposes, and similar items. Unless some agency regularly organized, manned, and equipped to render this service did so render it the consignee would have to make his own arrangements for laborers, mechanical equipment, guards to insure safety, etc. Such a procedure would, in general, be uneconomical and difficult of practical operation. Under the procedure that has obtained in Manila, the services in question (there collectively termed "arrastre") are performed, as indicated above, by the Manila Terminal Co. under contract with the Manila Harbor Board. The service thus provided by the Manila Terminal Co. naturally includes an appropriate check of the cargo in order that the subsequent adjustment of any claims for shortages and damaged cargo may be effected as required by the law in question, which is designed for the due protection of both shippers and consignees. This check is also the basis for furnishing to the insular collector of customs a correct list of the amount and kind of cargo discharged.

It should be clearly understood that the arrastre charge incident to the receipt, handling, care, and delivery to consignee or cargo landed on the pier or wharf by the ship's tackle is for services similar to those performed by railroads in this country in connection with the passage through a freight station, and delivery to the consignee, of freight unloaded from the cars of a freight train. Railway rates ordinarily include provision for such handling at a freights tation, and the charge for service does not, therefore, appear as a separate charge. Ocean shipping companies, however, do not own their docks in the port of Manila and the services covered by their rates do not include handling services after the merchandise is unloaded from the ship. As such handling is obviously necessary and as neither economy or convenience, for shipper or consignee, would ordinarily be subserved by requiring each individual consignee to make his own arrangements for the service involved, the latter is effected by the Manila Terminal Co. under its contract with the Manila Harbor Board.

Checking charge.-When, upon receipt of an appropriate request to the Manila Harbor Board from an interested party, delivery is authorized and made "ship side" instead of over a pier, there is charged (with the exceptions indicated in inclosure 4) only the small checking charge for which the contract with the Manila Terminal Co. provides. The service involved in this case involves the checking and listing of the cargo and the preparation end certification, by the contractor, of lists showing the cargo delivered, overages, shortages, and damaged cargo. The certificates tend to the protection of the carrier, consignee, and others concerned and are available in connection with any claims for loss, damage, etc.; they are also used as the basis for certain records of port operations compiled by the collector of customs of Manila.

In 1925 an Army disbursing officer in Manila raised a question as to the legality of the checking charge. No question was raised then or later by the military authorities, in so far as known, to the propriety or legality of the much more important charge for arrastre. The question was ultimately presented to the Comptroller General who, in a decision rendered on September 10, 1925 (inclosure 5), declared that the checking charge could not be paid, under existing law, from appropriations of the War Department. This original decision was based upon a law that had been repealed at the time and, it is believed, upon a mistaken conception of the facts. The decision, was, however, confirmed upon reconsideration, by subsequent decisions dated September 26, 1925 (inclosure 6) and May 11, 1926 (inclosure 7), respectively.