Mr. BENDIX. Yes; the Maritime Provinces of Canada--Halifax, Yarmouth, and so forth.

You build a couple of ships today and just give them enough money to run a minimum number of voyages, which they do during the summer season, which, of course, they did in the case of the Evangeline and the Arcadia. They take them off that route during the winter season and put them on a run between New York and Boston?

The CHAIRMAN. Do they get any pay for making that run?

Mr. BENDIX. No, sir; there is no subsidy for that. Of course that injures the business of the New Haven Railroad, which of course, should not own these ships. Nobody could get any part of the trade now. It would be impossible. You might with a subsidized line like the I. M. M. holding companies--and holding companies can serve no good purpose in shipbuilding.

The CHAIRMAN. What do you think about public utilities?

Mr. BENDIX. You have had that experience in public utilities and you will probably have the same experience in shipping if you give them time. It serves no good purpose at all. You cannot sell stock in ships. It don't assist in shipping; it just assists in building up a big organization of high-salaried men, many of whom have never been down in a hold in their lives.

Mr. SIROVICH. How many people do you think hold stock in the British shipping companies?

Mr. BENDIX. I do not think these people own any at all. You have heard of dirt farmers. I am a hard-working steamship man and I am interested in ships, not manipulations of that sort, I don't get much money.

The CHAIRMAN. What is your business?

Mr. BENDIX. Ship broker. I have been in it for 30 years. I perform the same services in ships as a real-estate agent performs in real estate. I buy and sell them and I charter them and I keep in touch with the world markets. There is no chance at the present time, with the terrible conditions existing in the shipping business throughout the world, for a ship broker to make much money.

Mr. O'LEARY. If a ship-subsidy program were voted, would that put you out of business?

Mr. BENDIX. No, sir; that would not affect my business in the least.

Mr. O'LEARY. If there were no ships constructed except for replacements, there would be no reason to sell them.

Mr. BENDIX. Yes, there would. It would not hurt my business. Mr. O'LEARY. How could you give anybody a commission for a replacement?

Mr. BENDIX. Because the men would sell the old ships.

Mr. O'LEARY. For junk?

Mr. BENDIX. For junk or for other purposes.

Mr. O'LEARY. Your commission would not be as great as if you sold it for other purposes?

Mr. BENDIX. The commission would be the same.

Mr. O'LEARY. The junk value of a ship would not be as great as it would be if it was to be used for other commercial purposes.

Mr. BENDIX. My dear sir, at the present time, under present conditions, the junk value of ships is higher in the United States than

2

the size for operations. We could pay you right now more cash the Lemathan for junk than anybody in the world could pay you that ship for operation.

1

Mr O LEARY What is the value of the Leviathan for junk today? Mr BENDIX. About $100,000.

Mr O LEARY. About $100,000?

Mr BENDIX Yes, sir; whereas it would cost considerable money to move her from where she is. The Leviathan burns a thousand Carrels of oil a day, lying up at the dock, and she has a large comple- ert of engineering othcers and operating officers and a large crew. it costs a lot of money to pay them in addition to the oil she burns, thug up at the dock.

:

Mr WLCH. Why does she have to burn a thousand barrels of a day if she is tied up?

Mr BENDIX You have got to keep the steam lines up, to keep ber trom freezing.

Mr. SIROVICH, Do you think it would be possible that the Leriathan t be run economically?

Mr BENDIX. No, sir; she could not be operated economically at the present time. She could not when she was new.

Mr SIROVICH. Then if the Leriathan can only be operated at a we are justified in junking her.

Mr BENDIX I don't know whether they are justified in junking ter, because they have made an arrangement with the United States Strong Board whereby they enjoyed certain benefits in connection with the Leviathan, but I don't know what that arrangement called

Bat the actual owners of that ship, the people who are paying teles on her, could not do better than junk her right now.

Î1⁄4e Chairman. And put that money into new ships?

Mr BENDIX. Absolutely; and they should have junked her long

Mr WELCH, How many barrels of oil does the Leriathan use in al service?

Mr. BENDIX. I should guess about 6,100 barrels per day. I do not

Now, I have been working 10 years with Congress, as a matter of on subsidies and you have listened to the ship owners, ship jes, ship operators, shippers, and so on, and this is as it should However, the public, who have the larger stake in shipping, nothing about the shipping business or the fundamentals of tre T. commerce as it relates to shipping, and they have never been Le and though they are called upon to pay the cost.

M SROVICH Are you in favor of subsidies?

Mr. BENDIX. Absolutely.

Mr SIROVICH. How would you like to use them and have them

Mr BENDIX You have always listened to the shipowner ---The CHAIRMAN interposing. I have been in a number of hearings and we have heard everybody who came before the committee. We a ad one or two hearings that ran for 4 months, as I recall.

Mr BENDIX. Yes, sir; you have listened to the shipowners and the soperators and you have listened to the port developers.

The CHAIRMAN I am sure there was nobody who asked an opporLinity to come before the committee and be heard that was not given that opportunity.

Mr. BENDIX. No, sir. Congressmen could not be expected to do otherwise than to ask the shipowners to come and give their views. But you may be able to use some of the information I am giving you right now.

Port developments, as you well know, under the present legislation, under which you are operating, are also committed to the Shipping Board, which is charged with the development of ports. Now, these same instrumentalities, a semijudicial body, that has to do with the regulation and control of American shipping, should have nothing to do with port development. Those are conflicting interests. You cannot run ships from all of these ports we have built up.

The CHAIRMAN. Don't you think that we should try to develop the ports of the country, so that there would be an equitable distribution of the shipping and it would not center in one or two large ports?

Mr. BENDIX. You are right, Mr. Chairman; but the function of developing ports should be in the hands of another Department.

Mr. CULKIN. Is it not in the hands of another Department? Mr. BENDIX. No, sir; it is in the hands of the Shipping Board Bureau.

Mr. CULKIN. No; I understood it was in the hands of the Corps of Engineers of the United States Army.

Mr. BENDIX. No, sir; that is the rivers and harbors work. The Shipping Board Bureau is charged with the development of ports and they should not be.

Mr. CULKIN. What do you mean by the development of ports? The building of piers and so forth?

Mr. BENDIX. No, sir. I mean trying to force the traffic through them. The Shipping Board originally tried to run ships to many different ports.

Mr. CULKIN. What you mean is that the Shipping Board has charge of the stimulation of trade, commerce, and tonnage.

Mr. BENDIX. Yes, sir; and they are also charged in the act with the development of ports themselves, the port terminals and terminal railroads. In Philadelphia they own a great big terminal; they do in Boston; they do in Brooklyn; they do in Newark.

Mr. CULKIN. Where would you put that power?

Mr. BENDIX. I am discussing at the present time the development of the American merchant marine. The port development is an entirely different problem and should be handled by a different body. Mr. CULKIN. You were discussing the port development. Where would you put the matter of port development, if not in this group connected with the merchant marine?

Mr. BENDIX. I think that port development is a State matter and the Federal Government should not interfere with the ports.

Mr. CULKIN. You are prescribing an entirely new formula. You realize that, of course.

Mr. BENDIX. I realize that and I am going to give you a new formula entirely. This port development has interfered with the Shipping Board and the proper performance of its other functions, because they had some little jerk-water port which would bring pressure to bear on them and they lost their control of shipping problems.

Mr. SIROVICH. The President has recommended the creation of one coordinated agency to control all forms of transportation, to have

bus lines, inland waterways, airways, coastwise and intrapp.ng united under one group.

M BENDIX Absolutely; but he did not say anything about the ipment of ports under that group. That would naturally arter the control of the State government. Now, undoubtedly, a-tr.an's report on railroads will have to do with the relation(*ween all forms of transportation and undoubtedly will make rtations for the correction of many evils. That, however, reting to do with port development nor the building of ports. KICH Do you know of any port on the Pacific coast, on the test, that the Shipping Board or any other governmental has developed to any great extent?

Boxx Yes. At one time your north Pacific ports, in the and area, had entirely too many services for the traffic and at the present time they have too many.

OPAIRMAN. Where would you carry all the trade? To New

BENDIX No, sir; I would not bring all the trade to New York. at the trade gravitate to its proper level, just as water seeks

℗ CHAIRMAN. Have not the railroads prevented by the effect the Interstate Commerce Commission and have not the rates put trohout the country, done much to prevent this trading seek1's natural channels?

FENDIX. They have interfered with that.

Mr Wich. You are conveying information here, or trying to arvey information, that does not represent the conditions on the arite coast. I represent the San Francisco district, a large Pacific ast port, and I have never heard of that.

Ar BENDIX. Well, prior to the war, San Francisco probably hanees Ni percent of your traffic on the Pacific coast and today quite a 1. of st traihe has been diverted to a number of other places. Vr WALCH. You are speaking of port development?

Ar BENDIX. Yes, sir.

Mr WELCH. The construction and reconstruction of port facilities? Mr BENDIX. And the laying out of lines to those ports.

Mr Wilch. We have no complaint to make The port of Seattle 28 a rival port as well as the port of Los Angeles, but we have never teari those things out on the Pacific; and I would like for you to tell te con mattee just what developments the Shipping Board has *t about that are detrimental.

Mr BENDIX. I will have to do it from memory; but I will do it this

Mr WLCH. (interposing). You should state something from the -1 and you should not do it from memory. You had better give fats that will stand up.

Mr BENDIX. During the war

Mr SIROVICH (interposing). You have the Port Authority of New 1

Mr BENDIX. The Port of New York Authority is the State author.:v and port development is a matter for the States.

Mr. SIROVICH. That is a combination of the forces of New York a: New Jersey?

Mr BENDIX. Yes.

Mr. SIROVICH. Are you complaining of the work that they have been doing?

Mr. BENDIX. No, sir; I am not objecting to any port authority. What I do claim and say is that the authority which is charged with the development of an American merchant marine should not also be charged with the development of the ports, as is the case at present. Mr. SIROVICH. I think you had better go on with your subject. We did not want to divert you.

Mr. BENDIX. Now, no subsidized ship of the United States should be permitted to carry cargo in the coastwise or protected trade, as they are at the present time.

Mr. CULKIN. What is that, again? I did not quite get it.

Mr. BENDIX. No subsidized steamer or motor ship of the United States should be permitted to run in the protected trade or to carry cargo on the coastwise routes. They should remain on registry and should not be issued a coastwise license. Construction-loan funds should not be used on ships that run in the protected and coastwise trade. Ships that are in any way subsidized should be kept in the foreign trades entirely.

The wages of all officers and crews in the American merchant marine should be raised so that at all times it would be possible to get men of high moral and mental ability to take up the sea as a livelihood. There should be a pension system, a sick system, a health system. The licenses should not be issued as at present. All crews on American coastwise ships and subsidized ships under the American flag should be American citizens. There is no excuse for anything else.

Not only should the men be paid more money than they are at the present time, but the subsidy should take the form of a cash payment to those officers and to that crew themselves, at the time that they are paid off before the shipping commissioners in United States ports--and you know, it is required that a shipping commissioner be present when they are paid off-and before the consular agents in the foreign ports, as is customary.

The America shipowner should pay to his men an amount equivalent to what his competitors pay them and the difference should be made up by a cash payment to the men at the time that they are paid off by the United States shipping commissioners or the consular agents.

That would take care of the differential in wages, and the differential in the cost of building ships should be taken care of by the Government at the time the ships are built.

I say that the cost in the United States of building ships is too high. It should be brought down. However, it will always be higher than the costs in competitive nations. But, regardless of how high it is, the difference between the cost of constructing a steamer in the United States and constructing the same steamer in a foreign country should be paid in cash to the shipyard when they deliver the vessel, or in graduated payments-it don't make any difference which way it is handled. That would take care of the labor subsidy, the wage differential, and would take care of the building differential.

The construction loan fund should lend up to 75 percent of the value of new ships-for ships in foreign trades only; and the money should be loaned at 2 percent per annum, and no mortgage should be