lines that have been operated over a period of years should be adequately protected from outsiders coming into the business after they have taken the depressed times over a period of years. I am sure that if the Maritime Commission is given these added powers they will carry them through to the satisfaction of everyone.

The CHAIRMAN. Are you proposing an amendment?

Mr. TAYLOR. We propose to give them the powers they have not got now under section 605.

The CHAIRMAN. Are you proposing an amendment to H. J. Res. 519 that we are now considering?

Mr. TAYLOR. Yes; that is right.

The CHAIRMAN. Let us have the specific language of the amendment. Write it out and hand it in to the reporter this afternoon so that we may have it before us tomorrow.

Mr. CULKIN. Whom do you represent, Mr. Taylor?

Mr. TAYLOR. I am president of the American Merchant Marine Institute, Inc.

Mr. CULKIN. How much tonnage do they represent?

Mr. TAYLOR. They represent over 4,000,000 tons. We have all of the large American-flag lines that are now in operation, coastwise, offshore, and intercoastal. We have no objection to this legislation, as I said before, but we do want to make sure that there is protection so that we do not have some outside interests coming in with probably cheap tonnage, coming in in competition with already existing lines until and unless these companies have been given an opportunity for a hearing, where the Commission says that there is an emergency. It is very sound reasoning, and any person in business would do that.

Mr. WELCH. The witness referred to normal times in his statement. If times were normal we would not be considering this resolution, would we?

Mr. TAYLOR. That is perfectly right, Mr. Congressman. Yet it is understood by everyone who has considered it, and it is believed from the report that has been submitted after exhaustive survey by the Maritime Commission, that there is no emergency existing at the present time, yet there is nothing that should stop anyone from getting into a state of preparedness.

Mr. WELCH. Do you believe that no emergency exists?

Mr. TAYLOR. No; there is not any emergency existing, not at the present time, except the testimony that is being given here today, as far as intercoastal trade is concerned.

Mr. WELCH. If you do not go beyond the testimony, it is quite evident an emergency exists insofar as intercoastal trade is concerned. Mr. TAYLOR. You have not the facts outside of what has been introduced here today.

Mr. WELCH. We have the fact that the trade is not able to keep up with it; it is entirely inadequate to serve industries on the West coast.

Mr. TAYLOR. If it is a thing that we desire most I think it is fair that there be adequate protection given to the already existing fleets that are in that service with outsiders coming in.

Mr. CULKIN. Do you represent them also?

Mr. TAYLOR. We do; we speak for the intercoastal group also. Mr. CULKIN. You speak for the intercoastal group? Mr. TAYOLR. Yes; we do speak for the intercoastal group, some of them, but not all of them.

Mr. CULKIN. With the present rate of sinkings going on abroad is not this emergency actually here now, in your judgment?

Mr. TAYLOR. You would have to go into that, Congressman, with all of the detail at hand, because there is a rerouting all of the time of vessels. For instance, in the Scandinavian countries, you get it in the public press that they are being taken over by the British. If that is so they fill up those gaps that have occurred after the Neutrality Act was passed

Mr. CULKIN. That does not consider what I suggested. I was speaking of sinkings by submarines, bombs, and mines and that type of destruction.

Mr. TAYLOR. The sinkings are very great among the belligerent

nations.

Mr. CULKIN. You did not think it was held within the belligerent nations, did you, because, as I read the newspapers the matter is pretty indiscriminate.

Mr. TAYLOR. Well, that is true, but they are being done by the belligerent nations.

Mr. CULKIN. Yes; that is true.

Mr. TAYLOR. And the percentage, as I understand it, as compared with the last World War is only 25 percent, and that has gradually been drifting off. It has been getting very small as far as the sinkings are concerned, but the point that you would like to know, Congressman, I think is this: On the filling up of the gaps where there is a drought or shortage in the shipment you find that on the rearrangement in shipping that goes on-after the Neutrality Act was passed there was a blanket put over all American shipping

Mr. CULKIN. Then you had to readjust that.

Mr. TAYLOR. Yes; then we had to readjust that. Now, you have part of that readjustment coming there where the belligerents were compelled to pull their vessels out, and when they do that the American vessels are coming into that trade. We had quite a time for 2 or 3 months after the Neutrality Act was passed before you got transportation stabilized.

Mr. CULKIN. Those were lean days for the lines.

Mr. TAYLOR. We have had lean days for the lines for many years, Congressman.

Mr. CULKIN. Evidently, and I think that I have heard that before. Mr. TAYLOR. The records show that. When a survey was made last year for the coastal and intercoastal trade, of the very subject that is being discussed here, it showed that for a period of 10 years 37 of the lines that were engaged in the intercoastal trade had a net loss, after paying taxes and depreciation, of $1,567,000.

Mr. CULKIN. Suppose they had not had these tolls on the Panama Canal; would you have had any loss?

Mr. TAYLOR. In that event I do not say that the loss would have been that high. I cannot calculate what, in fact, would have been the loss.

Mr. CULKIN. It would be a considerable part of it.

Mr. TAYLOR. It would have been impossible to offset in taking up the deficit.

Mr. Chairman, do I understand that anyone who is here today will be given the privilege of filing any further data that they think would probably be helpful to the committee?

The CHAIRMAN. Yes; but it will have to be done immediately because we want to get this under way pretty soon, and any amendments will have to be in specific language handed to the clerk of the committee by 9:30 tomorrow morning, so that they can be considered in executive session.

Mr. TAYLOR. Thank you, Mr. Chairman.
The CHAIRMAN. All right, Mr. Keitz.

STATEMENT OF H. A. KEITZ, NEWPORT NEWS, VA.

Mr. KEITZ. Mr. Chairman, I had no idea of testifying today. I was surprised on being called.

The CHAIRMAN. The reason I called you is because somebody sent your name in and said you wanted to testify.

Mr. KEITZ. I did not know I was to be called upon, but, nevertheless, I must disagree with the preceding witness. I think that a state of emergency does exist, and I think it is up to the Maritime Commission to get out all of the ships that are available at the present time and put them in condition to operate them, whether they are put out under charter conditions, or whether they are sold, or whether they are put under the operation of some designated operator.

Now, we have been talking about the intercoastal service most of the morning, but the coal interests are vitally concerned in this. There is an abundance of coal that has to be moved, particularly from Hampton Roads to the Mediterranean and South American ports, and there are no bottoms available for it. One of the gentlemen who testified this morning laid stress on the fact that labor in the lumber industry was being laid off. Now, it is my impression that the coal interests employ two or three times more labor than the lumber interests. So, therefore, in making a decision the Commission should, at least, give some consideration to the coal interests. In addition to that, we, at Hampton Roads, particularly, are faced with a situation where the warehouses are full back as far as Richmond with tobacco which we are unable to move on account of not having bottoms in which to move it. We have appealed to the Maritime Commission and they promised a ship a month, or perhaps two ships a month, and in April we had none. We had to resort

finally to inducing Japanese bottoms to come to Newport News and to Norfolk to lift the tobacco that we are vitally interested in, as far as the South is concerned. That is about all I have to say.

Mr. CULKIN. This coal is going to Italy?

Mr. KEITZ. Italy and South America mainly.

Mr. CULKIN. Of course, if Italy becomes a belligerent, under the Neutrality Act those shipments are out.

Mr. KEITZ. That is right.

The CHAIRMAN. Are there any further questions? Mr. Wagner.

STATEMENT OF H. J. WAGNER, DIRECTOR OF THE NORFOLK PORT TRAFFIC COMMISSION, NORFOLK, VA.

Mr. WAGNER. Mr. Chairman and gentlemen of the committee, there is very little that I can add to what Mr. Keitz has said, but I am wondering which of the members of Mr. Taylor's institute is familiar with the situation at Hampton Roads, so that he is in a position to state that no emergency exists there as far as ship bottoms are concerned. As Mr. Keitz says, we are unable to move our tobacco, we are unable to move our lumber, and we are unable to move our coal, the three principal commodities moving through the port for export. We are in probably one of the worst positions of any North Atlantic port, because we do not have grain and steel there which the Allies need. As the result of that they are putting their ships into New York, Philadelphia, and Baltimore. They are not calling at Norfolk and Newport News, except occasionally, and then there is very little space available.

We feel with all of us laid up, if there is any way in the world in which the Government can help our export trade, it seems to me nothing should be left undone to do it. I thank you.

in?

The CHAIRMAN. Are there any questions? Has Mr. Gasaway come

Mr. GASAWAY. Yes, Mr. Chairman.

The CHAIRMAN. All right, Mr. Gasaway.

Mr. GASAWAY. May I apologize, Mr. Chairman, for being late, but I was called to another meeting and could not get here sooner.

The CHAIRMAN. No apologies are necessary as we have had plenty of witnesses here.

STATEMENT OF GERRISH GASAWAY, SECRETARY, DELAWARE STATE CHAMBER OF COMMERCE, WILMINGTON, DEL.

Mr. GASAWAY. Mr. Chairman and gentlemen of the committee, we have noted a diminution in the number of vessels formerly engaged in the intercoastal trade. We have also noted an increase in the freight rates. Our members, 1,500 of them in the State of Delaware, comprise manufacturers, shippers, and importers from the west coast, and they confirm the reports to me that their shipments both to the west coast and also shipments from the west coast are being unreasonably delayed because space is not available. We are heartily in favor of the H. J. Res. 519 amendment as proposed, and we believe that it will afford one solution to a condition which we believe at this time is an emergency. That is all. Thank you, Mr. Chairman.

The CHAIRMAN. Are there any questions? All right, thank you very much, Mr. Gasaway. If there are no questions, stand aside. (The following statement was subsequently filed for the record by Mr. Gasaway.)

Re intercoastal steamship rates.
Memorandum to Mr. Gasaway:

April 22, 1940.

Effective May 1, 1940, practically all commodity rates west-bound and numer

ous commodity rates east-bound will be increased from 4 to 8 cents which on a percentage basis is from 3 to 10 percent.

I am showing below present as well as the new rates together with their percentage change, which rates are representative.

STATEMENT OF CAPT. W. J. PETERSEN, REPRESENTING THE PACIFIC AMERICAN STEAMSHIP ASSOCIATION, AND SHIP. OWNERS ASSOCIATION OF THE PACIFIC COAST, WASHINGTON, D. C.

Captain PETERSEN. Mr. Chairman, representing the Pacific American Steamship Association and the Shipowners Association of the Pacific, I have nothing to say at this time other than to support the contention made by Mr. Taylor, of the Merchant Marine Institute, and we reserve to ourselves the opportunity which you have granted of presenting an amendment to the law which would make it effective. The CHAIRMAN. You understand that it must be in by 9:30 tomorrow morning?

Captain PETERSEN. Yes, sir, Mr. Chairman, I do.

The CHAIRMAN. Mr. Francis H. Robinson.

STATEMENT OF FRANCIS H. ROBINSON, NEW YORK CITY, STEAMSHIP AGENT AND OPERATOR

Mr. ROBINSON. Mr. Chairman, my name is Francis H. Robinson, I reside at 118 West Fifty-seventh Street, New York City, and am en