International Apple Association, Los Angeles Chamber of Commerce, Maritime Law Association of the United States, Merchants Association of New York, Miller's National Federation, National Confectioners Association of the United States, National Industrial Traffic League, National Petroleum Association, New York Committee on Foreign Banking, Radio Manufacturers Assocition, San Francisco Chamber of Commerce, Seattle Chamber of Commerce, Tobacco Association of the United States.

The representatives of these organizations met in conference in 1930 under the auspices of the Chamber of Commerce of the United States. Both of the former chiefs of this division and the former chief of the Commercial Laws Division, attended that conference, having been named by the Secretary of Commerce, then in office, to represent this department. The chamber, in pursuance of the matter, has been in frequent communication with many of these organizations since 1930 and none of them has signified any intention of disapproving or withdrawing the endorsement of its representative.

Although I recommend that this Bureau concur with the Shipping Board Bureau in its approval of the bill, I take the occasion to comment on that Bureau's suggestion no. 1 with respect thereto. The suggestion, insofar as it relates to the enlargement of the bill to include domestic commerce, has been made on previous occasions. I have in mind at the moment the proposal included among those submitted by the American Bar Association at the conference held by the Chamber of Commerce of the United States in 1930. At that time, however, Mr. Norman Draper, of the Institute of American Meat Packers, and Mr. W. H. Chandler, of the Merchants' Association of New York, opposed the motion and, after discussion, won the unanimous agreement of the conference that such an amendment was not desirable or necessary. Hence the view there prevailed that the bill should be framed so as to leave its application to the domestic trade permissive rather than mandatory. The question arises, therefore, whether a similar motion at this time would meet with renewed opposition, and the answer appears to be in the affirmative. In any event, it seems that such a motion might delay action on the bill indefinitely for the reason that organizations representative of the domestic trade have not been active in considering the bill because of its optional provision in its applicaton of them.

For lack of time I am concluding my memorandum at this point. I believe, however, that I have dealt with the essentials.

RALPH L. DEWEY, Chief, Transportation Division.

AUGUST 21, 1935.

MY DEAR MR. CHAIRMAN: Having reference to your oral request today for report on S. 1152, a bill relating to carriage of goods by sea, I hand you herewith copies of a memorandum addressed to me this day by the Director, United States Shipping Board Bureau, in which I concur.

Very sincerely yours,

To: Secretary of Commerce.
Subject: S. 1152.

DANIEL C. ROPER, Secretary of Commerce.

AUGUST 21, 1935.

Reference is made to oral request made today by the chairman of the Committee on Merchant Marine and Fisheries of the House of Representatives for a report on S. 1152, Seventy-fourth Congress, first session, a bill relating to carriage of goods by sea, which passed the Senate on August 16, 1935, and which is now pending in the House of Representatives.

March 25, 1935, a memorandum was addressed to you by this Bureau on the subject of this bill, and copy of the same on March 29, 1935, was transmitted by you with your approval to the chairman of the Committee on Commerce of the Senate.

In the aforementioned memorandum of Mar. 25, 1935, section 4 (4) of the bill was adversely criticized (p. 21, Hearings Senate Committee on Commerce). At the time of transmittal of the memorandum of March 25, 1935, the word "deviation" as used in section 4 (4) was understood to mean departure from the direct route. Further discussion and consideration of this particular part

of the bill have made it apparent that the word "deviation" as there used means departure from the contract voyage.

It is thought that enactment of this bill in its present form not only would make for clarity in the law but also would accomplish the even more desirable result of bringing the law of the United States into conformity with the laws of other principal maritime States; and, since the attainment of these ends is more desirable, enactment during the present session of Congress should be accomplished if possible.

J. C. PEACOCK, Director.

DECEMBER 24, 1935.

MY DEAR MR. CHAIRMAN: I have your letter of August 20, requesting my views regarding a bill (S. 1152) relating to the carriage of goods by sea.

I take pleasure in enclosing for your use a memorandum on the subject prepared in this Department and dated December 13.

Sincerely yours,

HOMER CUMMINGS,

Attorney General.

MEMORANDUM FOR THE ACTING ASSISTANT ΤΟ THE ATTORNEY GENERAL. RE: S. 1152, ENTITLED "AN ACT RELATING TO THE CARRIAGE OF GOODS BY SEA"

An international convention for the unification of certain rules relating to bills of lading was held in Brussels, 1922-23, which adopted certain rules now known as the Hague rules. The convention was approved by the leading maritime countries and the Hague rules, with slight modifications, have been adopted by Great Britain and other leading countries. As adopted by Great Britain, they are known as the Carriage of Goods by Sea Act, 1924. The convention was sent to the Senate February 26, 1927, and it gave its advice and consent to its ratification on April 1, 1935. We understand the formal ratification of the convention was withheld until the passage of an act making effective the rules adopted.

S. 1152 embodies the text of the Hague rules, with some modifications to be noted. On May 13, 1935, the Senate Committee on Commerce brought in a favorable report (Rept. No. 742, 74th Cong., 1st sess.), and the bill was passed July 29, 1935, and referred to the House Committee on Merchant Marine and Fisheries.

The bill consists of two titles, title 1 incorporating the terms of the Hague rules and the British Act of 1924 with some modifications here noted, and title II prescribed certain reservations and modifying provisions to accord with our law and practices. It applies to foreign commerce by sea only.

We discuss the sections of the bill in order, with reference (a) to substantial changes which the act makes to the text of either the Hague rules of the British Carriage of Goods by Sea Act; and (b) the present applicable rule in this country. With respect to paragraph 4 of section 3 (p. 4 of the bill) which reads:

"Such a bill of lading shall be prima-facie evidence of the receipt by the carrier of the goods as therein described in accordance with paragraphs (3) (a), (b), and (c) of this section: Provided, That nothing in this act shall be construed as repealing or limiting the application of any part of the act, as amended, entitled 'An act relating to bills of lading in interstate and foreign commerce', approved August 29, 1916 (U. S. C., title 49, secs. 81-124), commonly known as the Pomerene Bills of Lading Act."

The proviso is new. It intends to preserve the provisions of the Pomerene Act which holds a carrier liable for receipt of goods signed by its representatives, even though they may not have actually been received. The Senate committee report states that this amendment "would also leave in effect the provisions of the Pomerene Act in possible cases where loading of shipments is going by ocean transport may be done by the shippers, cases which are not otherwise adequately provided for by the bill," Lines 13 to 15 of paragraph 6 (p. 5 of the bill) reading:

"Said notice of loss or damage may be endorsed upon the receipt for the goods given by the person taking delivery thereof."

are new and serve to clarify.

With respect to effecting changes in the present state of the law, we may observe that paragraphs 1, 2, 3, 4, and 5 of section 3 substantially incorporate the present doctrines. With respect to paragraph 6, which relates to notice of claim, the terms of current bills of lading vary, and, if reasonable, strict compliance with such terms is required, they may bar the owner of the goods from bringing an action. Bombace v. American Bauxite Co., 39 F. (2d) 867. The proviso beginning with line 23 on page 5, reading:

"Provided, That if a notice of loss or damage, either apparent or concealed, is not given as provided for in this section, that fact shall not affect or prejudice the right of the shipper to bring suit within 1 year after the delivery of the goods or the date when the goods should have been delivered"—

is new. Apparently failure to give notice in certain circumstances will not bar suit if brought within the 1-year period.

With respect to the time to bring suit provisions of paragraph 6 (lines 19-22 on p. 5), the bills of lading now in use provide varying date from 3 months, 6 months, 9 months, and a year as the limit within which suit may be brought. The question whether such clauses are valid depends upon the reasonableness of the prescribed period. For example, 30-day limit for suit on a shipment from China to New York is unreasonably short and void (the President Polk, 43 F. (2d) 695), whereas a similar clause for shipment between Buenos Aires and New York has been held valid (Schnell v. United States, 30 F. (2d) 676). The bill fixes 1 year as the time to sue limitation in all cases.

With respect to the last sentence of paragraph 8 (beginning with line 25 on p. 6), which reads:

"A benefit of insurance in favor of the carrier, or similar clause, shall be deemed to be a clause relieving the carrier from liability."

Benefit of insurance clauses are common in all bills of lading. Their proper application has been determined in Luckenback v. McCahan Sugar Refining Co., 248 U. S. 139, and the Turret Crown, 297 Fed. 766. Cargo shippers have been able to recover from the carrier where the bill of lading contains a benefit of insurance clause in circumstances where the cargo underwriter has made an advancement to the shipper only, under common forms of borrow-and-loan receipts. This clause in the bill is broader than the usual similar clauses in existing bills of lading, and there is opportunity to have the courts decide that the incorporation of any benefit of insurance clause without relation to the manner in which underwriter may make adjustment with its insured relieves the carrier from liability.

With respect to section 4, the proviso under (j) of paragraph 2, which reads: "Provided, That nothing herein contained shall be construed to relieve a carrier from responsibility from the carrier's own acts."

is new. The Senate committee report states that this "is intended to clarify the provisions of the bill which fails to place upon the carrier responsibility for due consideration of the interest of cargo in connection with labor difficulties" and "would require the shipowner to give proper consideration to the rights of cargo under such circumstances."

The provisio of paragraph 4 of this section (lines 14 to 16 on p. 9) which reads:

"Provided, however, That if the deviation is for the purpose of loading or unloading cargo or passengers, it shall, prima facie, be regarded as unreasonable."

is new. The amendment increases possible liabilities of carriers. It has been approved by the American Steamship Owners Association. According to the Senate committee report, its inclusion was upon the insistence of certain groups of shippers. The propriety of the amendment is a legislative question. Neither the Hague Rules nor the British act contain such a proviso. The state of the law is that deviation is a departure without necessity from the contracted voyage. The liberties clause of the bill of lading is intended to define such contractual rights. This clause is varying in its wording and scope and frequently permits the vessel to receive and discharge cargo at various ports without relation to the physical position of the ports or what in the usual course would be a regular order for call at the ports. The proviso may at least affect the burden of proof in such situations. Neither the Hague Rules nor the British act contain a similar proviso.

Paragraph 5 of section 4 is the valuation clause and lines 21 and 22 on page 9 of the bill reading:

"or in case of goods not shipped in packages, per customary freight unit, or the equivalent of that sum in other currency,'

are new. Lines 7 and 8 on page 10 of the bill reading:

"In no event shall the carrier be liable for more than the amount of damage actually sustained."

And the words in lines 10 and 11 on page 10, reading:

"the transportation of the"

And in line 12 "and fraudulently" are new. The effect of these latter is to narrow the exception from all kinds of situations to merely transportation situations.

Under the existing law the right to limit value depends upon the carrier offering a choice of rates. The Caledonier (42 F. (2d) 856); E. Gerli & Co. v. Cunard S. S. Co. (48 F. (2d) 115). The limitation of value may be fixed by the amount upon which the parties may agree. Paragraph 5 does permit the shipper to have inserted in the bill of lading such limitation value as may be declared by the shipper. This should permit the adjustment of freight rates accordingly. Line 20 on page 9 fixes the limitation amount in "lawful money of the United States", which is proper. Paragraph 6 of section 4 adds nothing to the usual rule applicable to the carriage of goods of a dangerous nature. The provisions of section 5 are in accordance with the Hague Rules. We see no objection to the provisions of this section.

In section 6, the words "regarding seaworthiness", line 24 on page 11 of the bill, are new. There are no practical objections to the conditions of this section.

Section 7 is in the wording of the like paragraph in the Hague Rules. We see no objection to this section.

Lines 1 to 4 on page 13 of the bill (sec. 8) reading:

"the Shipping Act, 1916, or under the provisions of sections 4281 and 4289, inclusive, of the Revised Statutes of the United States, or of any amendments thereto; or under the provisions of any other enactment", are new. It simply preserves rights existing under the benefits of our shipping act and the rights of the shipowner to limitation of liability.

The provisions of title II, entirely new, are in the nature of reservations or modifying provisions, protecting rights of shippers or owner which are secured by related legislation or practices.

As

Section 12 of title II does make an important change with respect to the application of the Harter Act (U. S. C., title 46, secs. 190-195, inclusive). the Senate committee report points out, the bill will, with respect to foreign commerce, supersede the provisions of the Harter Act from the time the goods are loaded on until the time they are discharged from the shin. This change is necessary to make effective the terms and conditions of the bill. It secures uniformity, which is the reason for the legislation.

We are informed that the bill has the approval of both the American shippers and owners. We see no objections, from a legal standpoint, to any of its

provisions.

For convenience of reference by you, we are handing you document no. 211, issued June 1935, by the Maritime Law Association of the United States, which has printed in order Senate Report No. 742 (pp. 2156-2162); the bill as passed by the Senate (pp. 2163-2173); the Hague Rules as adopted by the Brussels Convention (pp. 2176-2183); and a statement pointing out the differences in text between the present bill and the Hague Rules; also copy of the British Carriage of Goods by Sea Act, 1923, as printed in 1924 American Maritime Cases, beginning on page 1335.

Respectfully,

JAMES W. MORRIS, Assistant Attorney General.

The CHAIRMAN. You may proceed, Mr. Barber.

STATEMENT OF A. B. BARBER, MANAGER, TRANSPORTATION AND COMMUNICATIONS DEPARTMENT, CHAMBER OF COMMERCE OF THE UNITED STATES

Mr. BARBER. My name is A. B. Barber. I am manager, transportation and communications department, Chamber of Commerce of the United States.

The CHAIRMAN. May I add, just before you begin, for the benefit of the committee, that just as soon as you get the printed hearings in your hand, in the report of the Secretary of Commerce you will find a very complete analysis of the present bill and the existing

law.

I requested the Department of Commerce to analyze the bill and present to the committee an analysis of the pending bill, showing the differences between the pending bill and existing law, and you will find a very complete analysis in the report of the Department of Commerce. I won't take the time to read it now, but it covers several pages and quotes quite freely from decisions of the Supreme Court.

Mr. BARBER. Mr. Chairman, I appear on behalf of the Conference on Uniform Ocean Bills of Lading which was held in November 1930, for the purpose of reconciling long-standing differences of views which existed among representatives of the principal organizations interested in that subject as evidenced in hearings before this committee in the preceding years. The conference was successful in bringing about agreement but in the 5 years which have elapsed legislation to secure uniform ocean bills of lading has been pushed aside by emergency matters.

The CHAIRMAN. This relates only to cargo, I believe?
Mr. BARBER. Yes, sir.

The CHAIRMAN. It has nothing to do with passengers?

Mr. BARBER. No, sir. We have reason to believe, however, from numerous communications with members of the conference, that the agreement reached in 1930 upon the recommendations then made stills holds good. In fact, additional organizations have since concurred in those recommendations which, as far as we are aware, can now be said to represent the unanimous views of American interests concerned with Uniform Ocean Bills of Lading.

To indicate more definitely the composition of the conference, I may say that the following commercial organizations and associations were represented:

American Bankers Association, American Institute of Marine Underwriters, American Paper & Pulp Association, American Petroleum Institute, American Warehousemen's Association, Canners League of California, Chamber of Commerce of the State of New York, Chamber of Commerce of the United States, Cincinnati Chamber of Commerce, Dried Fruit Association of California. Farm Seed Association of North America, International Chamber of Commerce, Institute of American Meat Packers, International Apple Association, Los Angeles Chamber of Commerce, Maritime Law Association of the United States, Merchants Association of New York, Millers' National Federation, National Confectioners Association of the United States, National Industrial Traffic League, National Petroleum Association, New York Committee on Foreign Banking, Radio Manufacturers Association, San Francisco Chamber of Commerce, Seattle Chamber of Commerce, Tobacco Association of the United States.