methods by congressional committees did the public, or Congress itself, gain access to the facts. Without these data it would have been impossible to get public support for the extension of Federal regulation as now embodied in law.

This experience, similar to that of industrial relations and in commercial and investment banking, points directly to the need for Federal legislation which will enable the Government to discover and inform the voters of developments in the lobbying field. The failure of the railroads, in the absence of competing forms of transportation, to provide modern and up-to-date service at reasonable rates is well known. Similarly, the failure of the electric utilities to extend their service, particularly into the rural areas, before the advent of the Rural Electrification Administration, is also well known. It would appear that only through a combination of Federal regulation, as now provided by law, and an informed public can the gains achieved in these sectors of public policy be secured and extended.

CHAPTER X

SHIPPING AND AIR TRANSPORT

In the formulation of public policy with respect to merchant shipping and commercial air transport, one factor predominates which is not present in connection with other sectors of economic activity. This factor is the wartime value of shipping and of commercial air transport. It is the critical consideration in formulating public policy in these two fields.

Potentially, of course, all business is affected with a public interest when it comes to national defense. The present European war makes it unnecessary to dwell upon this truth. However, except in time of war or crisis, the defense value of business generally figures more importantly in planning than in the administration and execution of policy. This is not true of merchant shipping and commercial air transport. To a very large degree their wartime value determines national peacetime policy towards them. The same thing is true, in only slightly lesser degree, as regards iron and steel, shipbuilding, and the chemical industry. These industries, recognizing their strategic position, have exploited it to the utmost. Congressional committees, particularly the Special Senate Committee to Investigate the Munitions Industry, have shown the various methods by which they have done so. Generally, it appears that the pattern is continuing in the 1940 national defense crisis.

Various business and other groups are active in expounding the doctrine of the defense value of a merchant marine and in attempting to secure a national policy in this field which reflects this philosophy. These groups can be divided into two classifications: Those who merely expound the doctrine, and the second group with a definite economic interest which benefits from the patriotic coloring afforded the philosophy by the former.

The Chamber of Commerce of the United States emphasizes the defense value of a merchant marine, and argues that public subsidy is necessary for the maintenance of such a marine. The Navy League is another group active in expounding the value of merchant shipping to the Nation's defense forces. Patriotic groups, such as the Daughters of the American Revolution, the American Legion, and others, pass resolutions endorsing public support of a merchant marine because of its defense value. These latter groups emphasize the patriotic angle, hence lend valuable public relations aid to the groups which are active because of their economic interest.

THE NAVY LEAGUE

In this connection the Navy League is in a category almost by itself and warrants a further word. Its importance with respect to shipping policy grows out of three things: First, the philosophy it holds; second,

its relations with naval shipbuilding and the ship-owning and operating interests; and third, the methods which it employs.

The Navy League of the United States, founded in 1902 and incorporated the following year, subscribes completely to the philosophy of history expounded by Mahan that sea power is the decisive factor in shaping history; hence, since the United States is "insular," an adequate navy is necessary to protect its overseas interests, its lines of communication to strategic supplies, and its merchant shipping. Its formula of defense and of foreign policy is simple and can be clearly stated. According to the Navy League, the United States should possess an adequate navy, by that meaning a navy as strong as the strongest; it should have numerous naval bases, a merchant marine to serve as a naval auxiliary and a naval reserve, a naval militia, and a naval air force. This formula has been stated by the Navy League in the following words:

When the United States has a navy second to none, a merchant fleet carrying all our coastwise trade, and at least half our foreign trade in world competition and an all-American system of world communications free from foreign stockownership, management and operators and subject to untrammeled Government control in emergency-then only will America exercise its rightful influence on world opinion, world trade, and world peace.1

Because of this value of a merchant fleet to the Navy, public subsidy is justified. The Navy League view is that by itself a fleet is incomplete and must have as a reserve a fully manned merchant marine. In addition, the merchant marine must be government-subsidized, since costs are higher here than abroad.2

The cordial relations obtaining between the Navy League and the United States Navy Department, the iron and steel industry, and the shipbuilding, ship-owning, and operating industries are important not so much because of any interlocking directorates, but because all these groups share the same philosophy. The Navy League's officers and directors are civilians. With the exception of two appointed officers, they are elected and serve without pay. Neither active nor retired naval cfficers (except a few retired officers admitted before revision of the by-laws) are eligible for membership. Shipbuilders and munition-makers and those having an independent financial interest in naval construction or the manufacture of munitions are ineligible as members or contributors. Shipowning and operating companies, however, are not disqualified as contributors. Individuals, even though they are officers of shipbuilding and munitions-manufacturing companies, are eligible for membership. The league has solicited and received contributions from the Standard Shipping Co., the Grace Lines, the Atlantic and Caribbean, and the Chile Steamship Co.3 Charles M. Schwab and Eugene Grace of Bethlehem Steel are founders as well as life members. The Navy League asserts its freedom from "all outside influence whether political, naval or personal" and maintains that this "is well known to newspaper editors."

The Navy League is a publicity organization. The league's relations with the Navy Department and the Nation's press are cordial,

1 The quotations and data in this section are taken from Navy League publications. "No nation, as history shows, has successfully competed in world markets without making that competition a matter of government concern. Lacking Government subsidies to restore the higher cost differential of American shipbuilding and operation, our merchant marine engaged in foreign trade would be swept from the seas by foreign competition." Therefore "our merchant shipping depends upon Government support.' 3 New York Times, February 11, 1936, reporting special testimony before the Special Senate Committee Investigating the Munitions Industry.

enabling it to magnify the force of its voice many times. The league realizes that the Navy and the merchant marine depend upon public opinion for support. While the President's views of the Navy and merchant marine are important, public opinion is necessary whether the President is warm in his support or is neutral. Members of Congress come mostly from interior and inland States. Hence, in the view of the Navy League, they and their constituents need information regarding national defense and shipping policies.5

Sound public opinion on naval affairs, in the words of the Navy League, must rest upon Nation-wide information-dependable, adequate, and timely. The Navy Department is not in a position to release and disseminate such information. When disseminated by such an organization as the Navy League, however, it attracts newspapers' attention and receives Nation-wide publicity. This is the role in which the Navy League casts itself."

In order to give "to the American people through the press, in signed statements, accurate and current information and matured comment on naval and maritime affairs," the Navy League uses a variety of publicity methods. It issues its own publication, Sea Power, which resumed publication in 1935 after a lapse of 14 years. From time to time it issues tracts and pamphlets. Its officers are active in speechmaking and public relations work. Through cooperation with the Navy Department, the league prepares and distributes its press releases and its publications on special projects. Such a project was the Pathé News reel, Our Navy, released May 26, 1934, and based on information and graphs supplied by the Navy League. According to the league's executive secretary, the news reel cost it nothing, but the film was seen and heard by some 22 million people in more than 2,500 theaters throughout the country. For publicizing the need for a long-time naval construction program, the film won the thanks of the Secretary of the Navy.

BUSINESS INTERESTS AND DEFENSE

In addition to the patriotic groups who expound the doctrine of defense value of merchant shipping and of air transport, there are business groups which capitalize on the value of this alliance of patriotism and economics. Among these groups are the American Merchant Marine Institute (formerly the American Steamship Owners Association), the Air Transportation Association, and various corporations, individually and collectively.

Effective citizen groups organized to counteract business activity in these fields are conspicuous by their absence. The only active groups,

"When the President does not favor an adequate navy and merchant marine, Congress usually shows inertia unless influenced by aroused public opinion. When the President does favor strong naval and shipping policies, both he and Congress need informed public opinion to assist such policies. Through changing administrations, informed and sound public opinion is the only available means under our form of government to secure continuity of sound naval and shipping policy." [Italics in the original.] "Most Members of Con 'ress represent inland States, the majority of whose citizens lack the experience and contact with ocean trade shipping and naval protection essential to a ready appreciation of their values. Therefore the constituents of most Members of Congress need almost constantly to be informed and educated on naval and shipping matters."

Dependable, adequate, and timely "information, when issued by the Navy Department, is limited by considerations of policy, both diplomatic and political, and of necessity is largely confined to matters and policies already determined. Such dependable, adequate, and timely information, however, issued freely with frank comment by the Navy League, a disinterested and non-partisan organization of citizens, wins the interest of editors and gets national publicity."

generally speaking, are professional peace groups which concentrate more on matters of broad foreign policy than on the economic factors in national defense. Some of these peace groups are active in lobby. ing, such as the Women's International League for Peace and Freedom, the National Council for the Prevention of War, and the League of Nations Association. Others confine their activity mostly to educational and research efforts. Among these are the Foreign Policy Association, the American Peace Society, and the Carnegie Endowment for International Peace.

Occasionally one of these professional peace groups exerts appreciable force on policy determination. This was the case with the 1935 Neutrality Act which grew out of the reports and recommendations of the Senate Munitions Investigating Committee. Committee Chairman Nye (North Dakota) was persuaded to initiate this investigation by Miss Dorothy Detzer, lobbyist for the Women's International League for Peace and Freedom. The National Council for the Prevention of War claims to have been responsible for cutting the 1929 naval expansion program to a third of the size originally planned."

The same group took the initiative in 1928 in putting pressure upon Congress to adopt a resolution favoring arbitration of the dispute with Mexico, growing out of the passage there of a statute confiscating all oil lands held by aliens.10

While important on occasion, the staying power, resources, and plausibility of program of these peace groups are hardly in the same class as those of the business groups with an economic stake in shipping policy. The peace groups by and large are considered either radical or unrealistic; the business groups, on the other hand, are generally regarded as "sound."

PUBLIC SUBSIDIES FOR PRIVATE SHIPPING COMPANIES

For many years shipping policy has been framed and administered in a way highly lucrative for shipping and shipbuilding interests.

8 Kenneth G. Crawford, The Pressure Boys, Messner, 1939, p. 211. See also p. 44.

10 In 1926 Mexico passed a statute confiscating all oil lands held by aliens. Since many of these lands were owned by American firms, much indignation was aroused in this country against Mexico. On January 13, 1927, leading New York newspapers warned the American people that if they wanted peace with Mexico they must begin to fight for it. The National Council for the Prevention of War was in a position to act without delay and raised at once a fund of $12,000. A small committee of well-known men and women was quickly formed, who signed and sent a telegram to 1,000 prominent people throughout the 48 States asking if they fa ored arbitration of the dispute with Mexico. A proposed statement was included in the telegram.

Of the 1,000 persons, more than 400 replied within 24 hours. The statement with their signatures was printed, and this document, together with the warning editorials from the New York papers, was mailed to every one of the 13,600 newspapers in the United States.

Next was required a technical statement to prove the issue was arbitrable. This was prepared by a professor of international law at Columbia University. Immediately it was sent by special delivery air mail to 240 professors of political science, international law, and history in the leading educational institutions of the country, asking if they approved it. One hundred and one of them assented within 48 hours, and this document, too, with signatures was printed and released to the newspapers.

On 3 days' notice representatives of 30 peace organizations met in Washington and agreed to send as many letters and telegrams as possible to the President and to Members of the Senate, on whom pressure was being exerted by oil interests.

An appeal was mailed by the Federal Council of Churches of Christ for similar action, together with necessary information, to 75,000 ministers. Many thousands of influential people were also reached with copies of conciliatory speeches made by Members of the United States Senate. Letters to local papers were urged.

The effect of this intensive campaign was immediate and decisive. Washington corre spondents reported that not in many years in Washington had they seen such an outpouring of public opinion. The Senate voted 79 to 0 in favor of arbitrating the dispute. The flare-up of the controversy in 1938 resulted again in intensive propaganda efforts by both sides. The newspapers generally took the side of the oil companies, but aroused less public indignation than might have been expected from the vigor of the campaign.