B-138816, MARCH 20, 1959, 38 COMP. GEN. 621

B-138816: Mar 20, 1959

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ARE NOT PRECLUDED. 1959: REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 24. PASSENGERS AND FREIGHT ARE CARRIED NORTHBOUND FROM SOUTH AMERICA AND THE CARIBBEAN TO PORT EVERGLADES. IT IS UNDERSTOOD THAT THE GRACE LINE PLANS. IT IS INDISPUTABLE THAT THE FINAL RESULT OF THE PROPOSED ARRANGEMENT IS THE LANDING AT PORT EVERGLADES OF PASSENGERS WHO HAD EMBARKED AT NEW YORK. THE STRAIGHT STEAMING DISTANCE FROM NEW YORK TO PORT EVERGLADES IS 958 MILES. IT SEEMS OBVIOUS THAT THE PRIMARY PURPOSE AND OBJECT OF PASSENGERS SAILING FROM NEW YORK UNDER THE ARRANGEMENT PROPOSED IS NOT TRANSPORTATION FROM NEW YORK TO PORT EVERGLADES. SINCE THE PRIMARY PURPOSE OF THE VOYAGE WAS TO PROVIDE A WORLD CRUISE. IN VIEW OF THE BRIEF LENGTH OF TIME PASSENGERS ARE OFF THE SHIP IN NEW YORK.

B-138816, MARCH 20, 1959, 38 COMP. GEN. 621

MARITIME MATTERS - SUBSIDIES - ELIGIBILITY - COASTWISE V. FOREIGN VOYAGES A PROPOSED ARRANGEMENT BY A STEAMSHIP LINE FOR THE TRANSPORTATION OF PASSENGERS TO AND FROM PORT EVERGLADES, FLORIDA, EN ROUTE TO AND FROM SOUTH AMERICAN AND CARIBBEAN PORTS VIA NEW YORK, WHICH ARRANGEMENT INVOLVES A MUCH LONGER DISTANCE AND A GREATER FARE THAN FOR DIRECT TRAVEL BETWEEN NEW YORK AND PORT EVERGLADES, NEED NOT BE REGARDED AS A COASTWISE VOYAGE BUT AS A FOREIGN VOYAGE WITH NEW YORK AS AN INTERMEDIATE PORT OF CALL SO THAT RECEIPT BY THE LINE OF OPERATION DIFFERENTIAL SUBSIDIES UNDER SECTIONS 506, 605 (A) AND 805 (A) OF THE MERCHANT MARINE ACT, 1936, 46 U.S.C. 1156, 1175 (A) AND 1223 (A), ARE NOT PRECLUDED.

TO THE CHAIRMAN, FEDERAL MARITIME BOARD, MARCH 20, 1959:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 24, 1959, REQUESTING OUR OPINION AS TO WHETHER THE PROPOSED TRANSPORTATION OF PASSENGERS TO AND FROM PORT EVERGLADES, FLORIDA, EN ROUTE TO AND FROM SOUTH AMERICAN AND CARIBBEAN PORTS VIA NEW YORK WOULD CONSTITUTE COASTWISE TRADE WITHIN THE MEANING OF SECTIONS 506, 46 U.S.C. 1156, 605 (A), 46 U.S.C. 1175 (A), AND 805 (A), 46 U.S.C. 1223 (A), OF THE MERCHANT MARINE ACT, 1936, AS AMENDED.

IT APPEARS THAT UNDER CURRENT SCHEDULES THE S.S. SANTA ROSA AND THE S.S. SANTA PAULA DEPART FROM THE PORT OF NEW YORK UPON ALTERNATE FRIDAYS, WITH SOUTHBOUND PASSENGERS AND FREIGHT DESTINED FOR SOUTH AMERICA AND THE CARIBBEAN, AND WITH CRUISE PASSENGERS DESTINED FOR RETURN TO NEW YORK. PURSUANT TO THE CONTRACTUAL PROVISIONS RELATING TO REQUIRED AND PRIVILEGED SERVICES ON LINE C, THE VESSELS CURRENTLY CALL AT CURACAO, LA GUAIRA, ARUBA, KINGSTON, NASSAU AND PORT EVERGLADES, RETURNING ON A THURSDAY MORNING, TWO WEEKS LATER, TO NEW YORK. PASSENGERS AND FREIGHT ARE CARRIED NORTHBOUND FROM SOUTH AMERICA AND THE CARIBBEAN TO PORT EVERGLADES, OR THROUGH TO NEW YORK. IN ADDITION, THE VESSELS CARRY FREIGHT FROM PORT EVERGLADES THROUGH TO FOREIGN PORTS ON THE SERVICE. IN ORDER TO UTILIZE TO THE UTMOST THE FULL POTENTIALITIES OF LINE C, IT IS UNDERSTOOD THAT THE GRACE LINE PLANS, WHEN VESSELS CALL AT PORT EVERGLADES EN ROUTE NORTHBOUND FROM SOUTH AMERICA TO NEW YORK, THE FOLLOWING:

1. TO PERMIT PASSENGERS WHO HAD BOARDED THE VESSELS IN NEW YORK TO DISEMBARK AT PORT EVERGLADES IF THEY SO DESIRE, RATHER THAN RETURN TO NEW YORK;

2. TO EMBARK PASSENGERS AT PORT EVERGLADES AND CARRY THEM VIA NEW YORK TO THEIR FOREIGN PORTS OF DESTINATION ON THE TRADE ROUTE, AND

3. TO EMBARK PASSENGERS AT PORT EVERGLADES AND CARRY THEM FULL CIRCUIT ON THE TRADE ROUTE BACK TO PORT EVERGLADES, THEIR PORT OF EMBARKATION.

AS TO ITEM 1, IT IS INDISPUTABLE THAT THE FINAL RESULT OF THE PROPOSED ARRANGEMENT IS THE LANDING AT PORT EVERGLADES OF PASSENGERS WHO HAD EMBARKED AT NEW YORK, AND THERE CAN BE NO DOUBT THAT SUCH TRANSPORTATION IF PERFORMED BY DIRECT ROUTE WOULD CONSTITUTE COASTWISE TRADE WITHIN THE MEANING OF SECTIONS 506, 605 (A), AND 805 (A) OF THE MERCHANT MARINE ACT, 1936, AS AMENDED. HOWEVER, WE BELIEVE BECAUSE OF THE DIFFERENCE BETWEEN THE ARRANGEMENTS PROPOSED AND DIRECT TRANSPORTATION BETWEEN THE TWO PORTS INVOLVED, THAT IT SHOULD NOT BE CONSIDERED COASTWISE TRADE. THE STRAIGHT STEAMING DISTANCE FROM NEW YORK TO PORT EVERGLADES IS 958 MILES, REQUIRING A STEAMING TIME OF ONE DAY AND 20 HOURS. UNDER THE PROPOSED ARRANGEMENTS, THE VESSELS WOULD TRAVEL SOME 3,500 MILES, AND WOULD BE ON THE HIGH SEAS AND IN SOUTH AMERICAN AND CARIBBEAN WATERS A TOTAL OF TEN DAYS AND 15 HOURS BEFORE TOUCHING AT PORT EVERGLADES EN ROUTE BACK TO NEW YORK. SIMILAR DIFFERENCE EXISTS BETWEEN THE COST OF DIRECT TRANSPORTATION BETWEEN NEW YORK AND PORT EVERGLADES AND THAT UNDER THE PROPOSED ARRANGEMENT.

IT SEEMS OBVIOUS THAT THE PRIMARY PURPOSE AND OBJECT OF PASSENGERS SAILING FROM NEW YORK UNDER THE ARRANGEMENT PROPOSED IS NOT TRANSPORTATION FROM NEW YORK TO PORT EVERGLADES, BUT A SEA VOYAGE OR CRUISE IN FOREIGN WATERS, WITH THE INCIDENTAL RIGHT TO DISEMBARK AT THE FIRST UNITED STATES PORT OF CALL ON THE VESSEL'S RETURN TO THE AMERICAN COAST. IN CONNECTION WITH THE QUESTION WHETHER SUCH TRANSPORTATION SHOULD BE CONSIDERED COASTWISE TRADE, CONSIDERATION MAY BE GIVEN TO THE PROVISIONS OF SECTION 289, TITLE 46, U.S.C. WHICH PROHIBITS FOREIGN FLAG VESSELS FROM TRANSPORTING PASSENGERS BETWEEN UNITED STATES PORTS. THE ATTORNEY GENERAL RULED IN THE CASE OF THE CLEVELAND, 28 OP. ATTY. GEN. 204, THAT THE FOREIGN FLAG TRANSPORTATION OF PASSENGERS FROM NEW YORK TO SAN FRANCISCO VIA THE SUEZ CANAL DID NOT VIOLATE THIS STATUTE, SINCE THE PRIMARY PURPOSE OF THE VOYAGE WAS TO PROVIDE A WORLD CRUISE. SEE, ALSO, THE GRANADA, 35 F. SUPP. 892. IF SUCH TRANSPORTATION WOULD NOT BE BARRED TO FOREIGN FLAG VESSELS, AS SEEMS PROBABLE UNDER THE RULINGS CITED, WE DO NOT BELIEVE IT SHOULD BE CONSIDERED COASTWISE TRADE UNDER THE MERCHANT MARINE ACT, 1936.

UNDER ITEMS 2 AND 3, IT APPEARS THAT PASSENGERS EMBARKING AT PORT EVERGLADES, WHETHER DESTINED FOR A FOREIGN PORT OR FOR RETURN TO PORT EVERGLADES AFTER A FOREIGN CRUISE, WOULD BE REQUIRED TO SPEND SOME 32 HOURS ASHORE IN NEW YORK IN ORDER TO PERMIT ROUTINE SHIP PROVISIONING, MAINTENANCE, AND SHORE LEAVE FOR THE CREW. HOWEVER, PASSENGERS' PERSONAL EFFECTS, LUGGAGE, AND CLOTHING WOULD BE LEFT IN THEIR STATEROOMS. APPARENTLY, NO QUESTION AS TO THE PROPRIETY OF THE TRANSPORTATION WOULD ARISE IF THE PASSENGERS REMAINED ABOARD SHIP IN NEW YORK, AS DOES FREIGHT NOW LOADED AT PORT EVERGLADES DESTINED FOR FOREIGN PORTS. IN VIEW OF THE BRIEF LENGTH OF TIME PASSENGERS ARE OFF THE SHIP IN NEW YORK, WHICH IS NECESSARY FOR THE CONVENIENCE OF THE SHIP RATHER THAN OF THE PASSENGERS, WE BELIEVE THIS STOP SHOULD BE CONSIDERED MERELY AN INTERMEDIATE PORT OF CALL ON THE FOREIGN VOYAGE. DEFINITELY IT IS NOT THE TERMINATION OF A COASTWISE VOYAGE, AND WE HAVE BEEN ADVISED INFORMALLY THAT A PASSENGER EMBARKING AT PORT EVERGLADES WHO DECLINED TO CONTINUE HIS VOYAGE FROM NEW YORK WOULD NOT BE ALLOWED ANY REFUND ON HIS TICKET.

IN THE CIRCUMSTANCES OUTLINED ABOVE, WE CONCUR IN THE OPINION OF YOUR GENERAL COUNSEL THAT THE PROPOSAL OF THE OPERATOR WOULD NOT CONSTITUTE COASTWISE TRADE WITHIN THE PURVIEW OF SECTION 506, 605 (A), OR 805 (A) OF THE MERCHANT MARINE ACT, 1936, AS AMENDED.