Full Volume 19 - Federal Maritime Commission

702 FEDERAL MARITIME COMMISSION
313 U S 450 1941 contends that the evidence shows that the rentals
proposed to be charged by the Port Authority under the involved leases
constitute not less than the fair rental value of the properties involved
are in all respects reasonable non discriminatory and lawful and should
not be disapproved by the Commission
Union Pacific arose under the Elkins Act forbidding rebates conces
sions or discrimination with respect to the transportation of property by
railroad as covered by the Interstate Commerce Act 49 U S C Section
41 1 Dealing with subnormal rentals offered by the City of Kansas City
Kansas to produce merchants for quarters in a municipal produce
terminal the District Court had ordered the City to assess rentals
adequate to cover operating expenses and a fair return on the
investment The Supreme Court held this to be in error and decided that
the highest rentals which the City might be required to assess should be
determined by the standard of fair rental value rather than a
compensatory return The Supreme Court said pp 473 474
Fair rental value rather than a compensatory return upon full value of the market
facilities is the standard by which the City s schedule of rates is to be judged To
determine fair rental value the going rates of rental for similar facilities in the
community are significant as are the rentals prospective tenants are willing to pay
Likewise evidence of the over all cost and the over all value of the properties would be
material The cost of furnishing the facilities including normal return on capital
employed in like enterprises would have weight Other pertinent factors would doubtless
emerge in a controversy to have determined judicially whether certain rentals received
are or are not fair When enough evidence is offered to justify a conclusion based upon
judgement and not guesswork the requirements of the judicial process are met
In line with the Supreme Court decision the present record shows that
the 2 00 per ton rental charge proposed to be assessed under the
involved leases is as high or higher than
I Similar rental charges for other marine terminal properties throughout the Port of
New York s
2 Similar rental charges for marine terminal properties at other Atlantic ports ranging
from Boston to Miami at the Gulf ports of New Orleans Mobile and Houston and at
the Pacific Coast ports of Los Angeles Oakland and Seattle and
3 The Port Authority Public Tariff No P S 9 charge at the Port of New York of
2 00 per ton 10
Pouch contends that in Union Pacific the Supreme Court also observed
that the ICC could require that rentals equal costs where the ICC sought
to root out competitive evils in discriminatory warehousing indulged in
by carriers in an effort to acquire traffic 313 U S 450 at p 474 see also
Baltimore Ohio Railway Co v United States 305 U S 507 523524
1939
Pouch does not believe that any decisions dealing with the Elkins Act
are applicable to the Shipping Act 1916 It argues that the concept of
fair rental value would seem to have little or no applicability to ocean
8 Ex 20 21
9 Exs 22 23
10 Ex 9 pp 1415
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