To state such a proposition, and we believe we have stated it fairly. is to answer it. The problem is not fairly one for the shipping industry, as such to assume.

I might say that it is my recollection that all of the actuarial data which has been submitted by ourselves and by other groups in support of the present proposal seems to overlook the anticipated unemployment that will result again, as it did after 1917, a short time after the emergency was over.

Now, let us look for a moment at that branch of the industry for which I speak and which is asked to assume unemployment responsibility for these emergency seamen of the Government's program. And, in answer to Mr. Standard's suggestion, I might say that these figures are kept in strict accord with the universal accounting practices of the Interstate Commerce Commission and the United States Maritime Commission, and they are open to the public, available at the Interstate Commerce Commission to anyone who cares to see them.

During 1940 from operations in the Atlantic and Gulf coastwise trades the companies lost the amounts set opposite their names; the substantial amounts. I will quote you briefly the amounts which they lost, and the amounts paid in ship wages, and add 3 percent to those wages and give you the total increase which this proposal would have occasioned in 1940. In 1940 one company lost $394,000. It paid during that year $1,368,000 in ship wages. Adding to that 3 percent of the ship wages and it gives $41,040, making a total loss on operations in that year of $435,399.

Another company lost during that year $313,979, and during that year it paid in ship wages $1,595,000. Three percent of that amount would have been $47,850, and it would have increased its loss during that year to $361,829. Another company in the same group lost during that year 1940, $111,711. It paid during that year in ship wages $1,234,000. Three percent of that amount would have been $37,020, thus increasing the amount of the loss to $148,731.

At the previous hearing I gave to the committee the losses of these companies during preceding years. It seems to me that we are being asked to assume a burden that is not properly hours, and to pay for it by adding it to losses that are rapidly driving operators from the coastwise trade.

I have attached hereto a statement showing that from a high in 1926 of 50 passenger ships of 208,561 gross tons, we have already reduced to 16 ships of 82,797 gross tons, and from 177 cargo ships in the same year to 117 as of June 30, 1941, since which date there have been other withdrawals. It will be observed that the diversion has been only in small part due to the emergency and that even in normal times the vessels were diverted to more lucrative trades. The effect of adding to the losses of these companies it seems to us might bring about the only unemployment that can be anticipated within the industry not due to emergency causes.

These are our basic reasons for opposing the bill, and there is one more. We would be asked to assume the unemployment compensation for emergency employees of the United States Government. After being required to pay more than we can afford to alleviate a situation for which we are in no wise responsible, it has been admitted that such

contributions in the aggregate would be deficient, and at the previous hearings this was conceded by everyone. The only disagreement was as to the magnitude of the deficiency, and we believe that all the previous actuarial data was based entirely upon peacetime experiences and overlooked the emergency situation that has since developed, and which undoubtedly will multiply the deficiency.

No satisfactory suggestion has been made as to how that deficiency can be met. In our many enlightening discussions with Chairman Latimer, that deficiency has been left to be offset or paid by a policy of equalization or reinsurance, whereby areas or industries whose standard contributions are not exhausted by standard claim allowances will contribute the excess to those areas or industries where there is a deficiency. The difference between Mr. Latimer and ourselves is that he thinks we should go along in the hope that some such plan may at some time be provided whereas we have taken the position that we would be glad to review our consideration of the general subject after such a plan has been enacted. That plan, as we understand it, also contemplates some increase in the standards of unemployment compensation, but appears to have made little or no progress.

The trouble we have in this problem is trying to look at it as an industry, whereas within the so-called industry there are many different problems. There was an average of about 36 in a ship's crew in 1921 and possibly 44 is the average in 1941.

If the Government began to relinquish the use of its emergency fleet and to lay up 1,000 ships which it needed in the lease-lend or all-out aid program it would substantially throw out of employment 40,000 men, of which the industry has never had any use. The Government has profited to the extent that they have been used and at the termination of the emergency the few remaining companies which conduct normal peacetime operations are asked to assume the unemployment responsibility of those crews.

It seems rather to me that in that aspect of the problem, which I think is the most acute one, it falls within that reasoning of the last annual report of the Social Security Board which recognizes in different industries that there are apt to be violent displacements as a result of this emergency, and that report states some further study has to be given as to the way in which emergency people can be prevented from going into unemployment, but I cannot see how the private shipping industry, or such of it as remains after the termination of the emergency, should be asked to assume the unemployment responsibility for 40,000 ex-seamen that the Government only has used during the emergency. That would not seem to me to be a problem of the industry. As I say, we have, in discussing it with our people, been worried about the excess contributions as well as the original contribution of 3 percent which I have shown you, from the figures, is bad enough. If that should happen to be 8 percent or 10 percent or as high as 20 percent, as has been estimated, it would be perfectly ruinous.

The CHAIRMAN. Are there any questions?

Mr. BRADLEY. Mr. Ewers, what is the attitude of your group, if we will eliminate for the purposes of the present discussion the emergency situation, and I agree with you on that, but coming back to

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the normal peacetime requirements, what is the attitude of your group about providing unemployment insurance?

Mr. EWERS. Mr. Latimer and I have conferred on that on a dozen occasions, and in the first place the actuarial data used in the previous discussion has been far from reliable, and the reason we are approaching the problem in this manner is because of the fact that we have not had actuarial data. In the discussions we had on this subject, I think at our last meeting I told Mr. Latimer that if he could make some provision to guarantee us against us having to make a contribution in excess of 3 percent, which is the standard contribution for other industries, that I should be most happy to present the whole program to my people for consideration. Since that time, very frankly, which has been some months ago, the present emergency program has assumed such proportions as to cause us to compare it with the same situation that existed after the last World War. The chairman knows that is one of the problems of this committee, as to what we are going to do after this emergency is over. Mr. BRADLEY. I think that is a separate question.

Mr. EWERS. I think you will find that we will have laid up, shortly after the present emergency is over, probably as many if not more ships than we had after the previous emergency; we will have laid up some thousand-odd ships and some forty thousand-and-odd seamen that have never been employed in the industry. In other words, the present program is 104 new ships now delivered and already we are anticipating difficulty in obtaining men. That might be classed very properly as the long-range program which included some 700 or 800 ships. Now, on top of that so-called long-range program the Government has added admittedly an emergency program of vessels which are vessels which are needed now, but for which after the emergency they have planned or can anticipate no permanent employment.

Mr. BRADLEY. But I am trying to get back to this fundamental point. We are trying to consider whether we are going to make some provision for unemployment insurance in the maritime industry. I do not see how this Congress can, and I certainly am not as a member of this committee, going to shirk my responsibility to study this question simply by saying we have an emergency now, and we are not going to provide now in this bill for taking care of 40,000 unemployed seamen. That, to me, is an entirely separate question, although it is a fact, as pointed out by Mr. Standard, that many of the vessel owners are making more money than ever in history.

Mr. EWERS. The difficulty of that is taking the evidence collectively. I have given you figures of companies that are not so prosperous and which have suffered losses during the last year and will suffer them this year. This whole industry probably numbers 160 or 170 companies that go to make up the industry.

Mr. BRADLEY. I grant you that. I was not associated with the industry for 28 years for nothing.

Mr. EWERS. Yes, sir; that is correct.

Mr. BRADLEY. I am trying to get back to the question, and that is what the attitude of your group is going to be on the broad question of unemployment insurance within the industry aside from this emergency situation. I agree with you in the statement you make about the emergency, but I think that ought to be taken care of in an entirely separate manner.

Mr. EWERS. If we could have a reasonable assurance that there would not be added to our responsibility the emergency seamen and that our contributions would not exceed the standard 3 percent L should be very glad to submit it to the companies for whom I speak for their consideration, but I do appreciate that I am appearing in a representative capacity under instructions from them, and I do not think it would be fair for me or fair to the committee for me to anticipate what their reactions would be.

Mr. BRADLEY. I think unfair to the committee. I certainly have no desire to be unfair with your group any more than I have to be unfair with the seamen. I should think it certainly should be put up to the companies at this time, when this matter is before this committee. As has been pointed out here several times by the other witnesses, this question has been before the Congress in one bill or another for the past 6 or 7 years, and certainly I, for one, do not want to have the implication made that this committee is shirking its responsibility.

The CHAIRMAN. We will be happy to have you people get with Mr. Latimer to try to work out something.

Mr. EWERS. We have tried to do so, Mr. Chairman, but in addition to the administrative objections we have always been confronted by the actuarial data indicating that the original fixed 3-percent contribution in all admitted probability would not be sufficient. Dr. Latimer says he thinks that might not be true today, but in our previous discussions his estimates were as low as 4.6, and ran as high as 5.4 of the pay roll as the tax that would be necessary to sustain this burden.

This bill and the previous bill provided we would pay 3 percent of it, and then we objected to a contribution some time later, to the necessity of paying a deficiency. Some of our actuaries have estimated that the total cost under the rotating hiring system that Mr. Curran has described, might run as high as 15 or 20 percent of the pay roll in tax, and, naturally, we were reluctant to let the camel come in at 3 percent that might get up to 15 or 20 percent. Whether I have construed my discussion with the industry accurately, that has been my impression, but if it is the desire of the committee, I can put it up to my clients as to what their attitude would be if their contribution should be on the basis that it would not exceed 3 percent.

The CHAIRMAN. The committee has this proposition before them. It is up to you to take up with your people anything that you desire to take up, or anything that you may think would be of help to them in helping the program.

Mr. EWERS. Frankly, I do not know how a deficiency, if there is to be one, can be accommodated, nor has Dr. Latimer given me any satisfactory explanation of how he proposes it should be taken care of. We have had hopes that maybe some time in the future there would be an equalization program or, perhaps, a pooling agreement or a federally authorized system of taking care of some of these deficiencies, but at this writing there has been no plan to take care of that, and as far as I can find out he has not made any progress in that direction. With the anticipated cost from the actuarial data previously compiled, which entirely leaves out the emergency situa

tion, and then if you add the emergency situation to it it does present a problem, particularly a money problem, to many companies whose earnings are not so large as to permit them to be generous.

Mr. BRADLEY. I think there should be some provision made in this bill for this emergency situation, and that your point is very well taken.

The CHAIRMAN. The Chair is open to any suggestions as to amendments that may come from any source.

Mr. EWERS. We would have been very happy to have made them before this if we knew where we could meet the deficiency and not have to pay it ourselves.

The CHAIRMAN. We would be very glad to consider any amendments or suggestions that may come in.

Mr. EWERS. It is my purpose, in accordance with the permission granted by the chairman, to file such statement, containing such suggestions as they or I can contribute to this general study.

The CHAIRMAN. Are there any further questions? Thank you. (The tabulation referred to by Mr. Ewers is as follows:)

United States passenger and cargo vessels over 1,000 gross tons employed in the Atlantic and Gulf coastwise trade on June 30

NOTE.-Figures before 1925 not available. Since June 30, 1941, there have been numerous other with

drawals.

The CHAIRMAN. All right, Mr. Walker, do you desire to come on now?

Mr. WALKER. Yes; Mr. Chairman.

The CHAIRMAN. Proceed, Mr. Walker.

STATEMENT OF FRANCIS S. WALKER, REPRESENTING THE AMERICAN MERCHANT MARINE INSTITUTE, INC.

Mr. WALKER. Mr. Chairman and gentlemen of the committee, my name is Francis S. Walker, and I appear on behalf of the American Merchant Marine Institute, Inc., which has offices at 11 Broadway, New York City. For identification in the record it may be stated that the American Merchant Marine Institute, Inc., is a trade association, including in its membership a majority of the Americanflag ocean-going shipping engaged in foreign, coastwise, and intercoastal trades.

This hearing happens to have been called at a time which is particularly difficult for us in view of the pending negotiations for