by Navy or Army Reservists. Then when trouble came we would have what we need and where we needed it. There is nothing new about this plan; this has been done for years now by Germany, Britain, France, Italy, and Japan, and so forth. Why cannot we do the same thing! This would enable us to build Normandies, Queen Marys, Bremena, or any other type or size that our experts in the Navy and Army decided that they wanted.

The bidder who made the best bid, with suitable financial guarantees, would be permitted to operate the boats as agent, with such restrictions and under such conditions as the Navy and Army officials considered wise. Such contractor would be at liberty to make as much money as he could out of the operation of the boats when they were not needed by the Army and Navy; he could pay himself and his associates any salaries or bonuses that he saw fit, as long as he pad the Government his installments of charter hire. He could run up any expense accounts that he wished, as long as he complied with the conditions of his contract, and we would not have the horror of reading about the princely salaries that some of these American shipping otheials receive, together with their bonuses and expense accounts, when they at the same time owe the United States Governmert hundreds of thousands of dollars, past due, with no effort whatever being made to pay it.

But this is by no stretch of the imagination a merchant marine; such ships, as above roughly described, cannot be used profitably as merchantmen under any flag. In the case of France, Germany, Italy, and so forth, they maintain these great ships as naval auxili aries, for use in time of war or national emergency, and during peace times they are used to attract tourists to their respective countries, and they are thus enabled to make these great ships earn some direct or indirect revenue during peace times, but they are not merchant ships in any sense of the word--they are naval ships pure and simple.

It might be well for me to state right here that such ships derive most of their revenue by far from Americans leaving their country on vacations and jaunts of all kinds, and Congress might well subscribe to the old slogan, “See America first "; and since it's impossible to see America first, last, or any other time, without paying. direct and indirect, taxes of all kinds and descriptions, Congress might well give the poor man a better break by collecting a sub-tantial tax on steamship tickets to all foreign destinations, whether on American ships or foreign ships. This would not affect American steamers any more than it would affect foreign steamers, and it would reduce the burden on the poor suckers who take their trips to Europe and Asia, and so forth, in the movies,

So much for an Army transport fleet and a naval auxiliary fleet. Lets charge it up where it belongs, call it what it is: lets follow the President when he says, "Away with the subterfuges,"

Now for an American merchant marine. In this same declaration of policy I read of a merchant marine - I quote:

Su lent to carry at least one h lf of the foreign commerce of the United

I assume that the water borne foreign commerce of the United States is meant. Now, gentlemen, the water-borne foreign commerce

of the United States is a fluctuating quantity, fluctuating as to total and fluctuating as to specific movements from originating points to points of destination, and if it were possible for any human being on this earth to arrive at the amount of tonnage required to put this declaration of policy into effect, even within a wide range, shipping would be very easy, and, dear sirs, shipping is not an easy business by any stretch of the imagination.

Then I read-I quote:

And to provide shipping service for all routes essential for maintaining the flow of national commerce at all times.

Here, again, gentlemen, if this could be ascertained with any reasonable degree of certainty, we never would have had a shipping problem and would not have one now.

There are no set tonnages or requirements in shipping; it is a fluctuating operation-it is a hazardous business under any flag. Movements of commerce and shipping are affected by a multiplicity of conditions. The future cannot be gaged, and in shipping it is almost impossible to guess at what the future holds. This has always been the case, and it is the case now more so than ever. Fleets of ships, as well as individual ships, must be operated in such a way that they will maintain the services in the best possible manner. If there is a shortage of ships from a certain sector, then commerce suffers, and if there is a surplus of ships from a certain sector, then shipping suffers. Neither commerce nor shipping can earn sufficient profits, without charging exorbitant rates, to be able to absorb easily the losses that are bound to come to either in the case of a surplus of shipping or a shortage of shipping. It is for this reason that ships and shipping must be operated in such a way that their movement is elastic. It is impossible to state with any degree of certainty that a certain service should have a sailing of a certain-size steamer at a specific period. For instance, one might say that four steamers of 8,000 tons each, each month from New Orleans to Rotterdam would be a fair guess of the requirements of that service. But over the period of 10 years there will be many times when 8 steamers of this size would be required to handle the traffic, and there would be other times when 1 steamer of this size or smaller would be sufficient to handle the traffic and render the necessary service. It is for this reason that no line of steamers should be subsidized as such-individual ships should be subsidized-and in this way our American ships would be able to freely and fairly compete in the international trades of the world. They would not be tied to a barren berth when possibly other world trades would offer profitable employment. To arbitrarily insist on maintaining sailings from a certain sector to a certain general destination when there is not sufficient traffic to carry serves no good purpose whatever. It is horribly expensive and unsettles world freight market conditions, with no benefit to anyone whatever, and is detrimental to the commodity price structure of the American producer of agricultural and industrial products.

So that it will be easily understood and easily complied with, I suggest that the legislation under discussion, as far as the declaration of policy is concerned be changed to read as follows:

Section 1. It is necessary for the development of its foreign and domestic commerce that the United States shall have a merchant marine (1) so that

In times of peace, subsidies granted by other nations, shipping combines and ather restrictive or rebating methods may well be used to the detriment of American shippers (2) so as to maintain fair and free competition in the carrage of our foreign and domestic commerce (3) so that in the event of a Major war in which the United States is not involved, our commerce shall Bot find itself seriously crippled because of its inability to secure bottoms for reutial pesceful foreign trade (4) so that in the event of a war in which the United States itself might be er gaged. American flag ships shall be available for the maintenance of reasonable and necessary commercial intercourse with other nations (5) and because the American people want to use American shijs and their Government owes it to then to make certain that such ships are in keeping with our national pride au nationun needs

It is hereby declared to be the policy of the United States to foster the develop mert and encourage the maintenance of such a merchant marine by the means bereafter expressly provided in this Act and by any other means which the Congress from time to time may devti hevesnatz A far as not inconwistent with the express provisions of this act, the agencies of the United *tate® Govert ment charged with the admit istration of tlbs Act and shipping la es shall, in such administration and in the making of rules and regulations, keep always in view the purpose and object of the policies herein expressed as the primary end to be attainesi,

This is the policy that the President of the United States charted in his message to Congress on March 4, 1935, and it leaves no room for misinterpretation.

Tim II- UNITED STATES MARITIME AUTHORITY

This is simply the Shipping Board under a new name, There is no doubt whatever but that informed persons are utterly opposed to the rehabilitation on any such Board or Authority. The Shipping Board came into being during the hysteria of war in 1916; and a care fui reading of the Black investigation testimony will show how this Board functioned in the past; it spent billions of the taxpavers money and got little or no return for it; its policy in shipping did more to bring on the world depression than any other single factor; it proved beyond a doubt that such a Board could not be divorced from politics and politics and shipping do not mix--and, one of the first offcial acts of the present administration on assuming responsibility in Washington was to wind up the affairs of the Shipping Board as quickly as possible and transfer its fune tions to the Department of Commerce. As a matter of fact, the Hoover adnunistration had started thus liquidation.

There is no need of any such Board or Authority, so, please, gentlemen, do not inflet another Shipping Board on us,

INVESTIGATIONS

The American people elect their Representatives and Senators and it is to them that we look for investigations when there is any evidence that investigations are necessary The American people have confidence in their duly elected officals, but they have no confidence in any semijudicial boards or authorities or public service commissions any more, after what they have found out during the past 6 years,

A to the investigations specifically enumerated under this title, the following can be stated definitely:

(1) The scrapping of old or obsolete tonnage owned by the United States or in use in the merchant marine.

Surely you do not have to investigate this; the Shipping Board Bureau in the Department of Commerce can offer the whole fleet for sale, for cash, in single unit or in fleets, on the basis of "as is and where is", to American and foreigner alike, with the understanding that the ships cannot be used in the protected trades of the United States, and, further, with the provision that the ships cannot enjoy subsidy benefits. Give them to the highest bidder for real cash money, and see for yourself if the ship breaker won't be the high bidder. Don't be afraid to sell these ships to foreigners; sell them to anybody who will pay the most for them-have no fear that the foreigners will use these ships to compete with us. If he does, he will be out of business shortly. It is also very important that we open the bids to foreign buyers on these boats. Remember they are laid up, they cannot run without being supplied with equipment and repaired, which cost a lot of money, or, in lieu of running them, they could be towed to foreign break-up yards. The cost of such repairs to steam them to a foreign yard, or the cost of such towage to tow them to a foreign break-up yard, is sufficient protection to American ship breakers. Remember, gentlemen, there are many privately owned American ships that should be sold for scrap, and would be sold for scrap, if this great fleet owned by the Government were broken up and taken out of the market.

Last, but by no means least, until this fleet of ships owned by the Government is scrapped there is no chance of anyone investing his own money in new American tonnage. These hulks which the Government have have been hanging over the world market like a pall. If there is any investigation required to bear out these statements, such investigation can be handled by one man in 2 or 3 days.

(2) Tramp shipping service and the advisability of participating in such service with vessels under United States register.

It is very evident that the gentlemen of this committee are not entirely familiar with the term "tramp shipping." There is no doubt about it, this is a glaring illustration of a poor choice for a name. has nothing to do with the type, size, or description of a ship. It has only to do with its mode of operation. Would it surprise you gentlemen to know that, with very few exceptions, all steamers are tramp steamers? Would it surprise you gentlemen to know that the great trans-Atlantic liners engage in tramp operations very often-every winter in fact? They, of course, call it "cruises", but in many cases they are chartered in the open market for such cruises, and it's a tramping operation pure and simple-and therefore they are tramps. If there is any line of demarkation between an ordinary ship and a tramp, I would like to know what it is. With a very few exceptions, every ship on earth can be chartered at certain times; and if a ship can be chartered, then she must be a tramp ship.

While surely there is no basis for an investigation into the subject, as this question of whether or not a ship is a tramp ship or not, I am in hopes of having settled in the legislation that comes out of this committee after these hearings; but while on this subject, would it not have been a wonderful thing for the American merchant marine had the purchasers of Shipping Board tonnage for regular-line services acquired only as many steamers as were necessary to maintain a minimum service, and then as more bottoms were needed they could

have chartered some of these so-called " tramp" ships and operated rohtably to themselves and satisfactorily to shippers of cargo. It might have been possible then for them to pay for the ships that they dad buy from the Government, as when the traffic died down all they had to do was to let the tramps go to seek other business elsewhere and they could have maintained their minimized services with the ship that they had. Instead of this, however, they bought enough ship to maintain their maximum services in most cases, and when the trafhe died they took their ships and laid them up or, worse still, ran them back and forth with little or no cargo at ruinous rates, Now, with few exceptions, they are all broke financially; and if they are not broke, why is it that they are not made to pay the United States Government the millions of dollars that they owe, a large percentage of which is long past due.

I repeat that no investigation is necessary of the tramp-ship subject; all that it is necessary for you gentlemen to do is to try to collect the money that is past due the Government from these owners and operators of lines of ships purchased from the Government and subsidized liberally by the Government. If you do this, you will be told, wherever you go to collect, that they are short of money because they are trying to maintain their lines of steamers. This will prove better than any investigation, whether you need tramp operation of American ships and the resiliency and elasticity that only tramp operation", so-called, can give you. In closing this subject I cannot be too clear on this point: A ship must be in operation from the date of its launching until its scrapping, with the exception, of course, of ur avoidable repairs, and so forth, in order for it to be profitable, and if you cannot find employment in one trade, then you have to find it In another trade; this makes them tramp. There is no other way to make money out of ships and serve a purpose with them than to use them.

(3) The construction by or with the aid of the United States of superliners, especially with a view to their use in national emergency. If such an investigation is to be conducted - and I believe one should be conducted -- there is no better qualified authority to conduct such an investigation than the experts of our Army and Navy. I have covered this in a preceding paragraph. The only superliners in the world are naval auxiliaries and Army transports. None of them operate at a profit, even with the large subsidies that they enjoy, and no one in his sound senses would invest any money in them with the idea of making a profit. This is a Government function and it should be done open and above board-again let us do away with the subterfuges.

(4) The relative cost of construction of comparable ocean vessels in the various coastal districts of the United States, together with recommendations as to how su h differentials may be equalized.

The Federal Trade Commission, if I am not mistaken, has in its files the result of such an investigation. If they have not, they can make another investigation immediately and report to you gentlemen within a week or 10 days. I personally think that they can make such an investigation without leaving Washington.

At a previous hearing here before this committee I explained that the cost of building ships in the United States was too high entirely,