DEVELOPMENT AND MAINTENANCE OF INTERCOASTAL SHIPPING TUESDAY, JANUARY 18, 1938 UNITED STATES SENATE, The committee met, pursuant to adjournment from yesterday, Monday, January 17, 1938, in the committee room, Capitol Building, Senator Royal S. Copeland (chairman) presiding. Present: Senators Copeland (chairman), Clark, McNary, and Johnson. Present also: Senator McAdoo of California. The CHAIRMAN. The committee will be in order. here? Mr. PAGE. I am here, Senator Copeland. The CHAIRMAN. Are you ready to proceed? Mr. PAGE. Yes, sir. Is Mr. Page STATEMENT OF CHARLES PAGE, EXECUTIVE VICE PRESIDENT, SAN FRANCISCO, CALIF., CHAMBER OF COMMERCE Mr. PAGE. Mr. Chairman and gentlemen, I did not prepare any sort of statement, because I thought I would comment briefly on one or two points that might be of interest. Those who were here yesterday have covered the field pretty widely, but I thought it might be interesting to make just one or two comments. The national defense aspect of this situation is one that has been of considerable interest to me. I do not know how many of you have realized how limited we are out there on the Pacific coast in the larger vessels that might be used in the event of an emergency as naval auxiliaries. Some time ago when we were discussing this situation, after the withdrawal of the Grace Line and the proposed withdrawal of the Panama-Pacific Line, we went into that very thoroughly. It was interesting to me to find out that we have only five vessels on the coast of over 5,000 tons, less than 20 years of age, which can make more than 21 knots. Three of them are in the foreign trade. We have only two of them in the Hawaiian trade, that might be available immediately, not subject to capture, seizure, or internment. When we come to the smaller vessels of the same type, over 5,000 tons, capable of speeds from 15 to 18 knots, we have on the coast 10 vessels which can qualify as naval auxiliaries, and all 10 are the so-called "535" type of ship, operated by the Dollar Line in the foreign trade, and most of them are subject to seizure. 63 All of us on the coast feel that this national defense aspect is a very serious problem, particularly with our fleet assembled there, for reasons best known to those who direct the policies of the Navy Department; and we feel that in the consideration of the naval problem which is now before the Congress, a great deal of thought ought to be given to this subject of naval auxiliaries. Another phase that has struck us rather forcibly, of course, is the one that deals with the question from the commercial standpoint. I mean by that the transportation of passengers and cargo. The suggestion has been made in the past that perhaps the Government is not interested in that, but we do not believe that is true, because, after all, commerce and transportation to a great extent are the lifeblood of those major communities on the Pacific coast, and we feel that the Government has a very great interest in the transportation of cargo, as well as passengers, to and from the west coast. Without those ships we will have practically no refrigerated cargo space, as I believe was pointed out yesterday, for the carriage of perishable cargoes. In San Francisco we have these great valleys to the east and north and to the southeast, which are tributary to the Bay of San Francisco, and all that cargo goes through there. A great part of that perishable cargo is carried on these fast ships. We have a limited amount of refrigerated space on some of the other vessels, but they are much slower. If that service is removed we are deprived of that service entirely. I think it is an interesting comment, in passing, that those ships have carried a tremendous number of people to and from those ports. To a certain extent the prosperity of the community has depended on the carriage of cargo and passengers to and from the ports, and these lines have played a very important part in that respect. It seems to us out there that in taking these ships away from the Pacific coast run, or the intercoastal run, and offering them a subsidy to go into some other foreign service, a very serious mistake is being made, and every effort ought to be made instead to find some means to either continue their former subsidy, or something along similar lines, that will keep them in the present service, rather than take them into some new service. There is one other thought that struck me, that I thought I would suggest to you. There may be a number of things that you gentlemen are interested in that we have not brought out clearly in the last day or two here. It seems to me that if you wish to go into these facts more fully and more specifically, perhaps, than we have here, it might be advisable to conduct some sort of survey along independent lines, by competent people, with the thought of finding out just what the situation is, and what can be done to maintain and develop this very valuable service. I feel, without the shadow of a doubt, that you would obtain all the information you need. The CHAIRMAN. Mr. Page, have you any comparative figures to show what your total available tonnage was before these changes, and how much you have lost by reason of the withdrawal of the vessels? Mr. PAGE. I have some figures, Mr. Chairman, that might be of interest to you. I think I will just read these few figures to you, if I may. I have no end of information on this subject, but I thought that the field has been so well covered that I would skip over it pretty quickly. The CHAIRMAN. May I say to you, Mr. Page, that I think we are all convinced of the necessity for the naval auxiliaries. Mr. PAGE. That is correct. The CHAIRMAN. And the disposition of tonnage with reference to protection; but, of course, we have to justify this on other grounds besides those. So, if you have figures that indicate what your loss is, then we will be better prepared to know what to do about it. Mr. PAGE. These figures, I think, will be of interest. In the past 4 years vessels of the Panama-Pacific Line have transported 244,188 tons of cargo from the Atlantic to the Pacific, and 538,149 tons of cargo from the Pacific to Atlantic ports. Those are the Panama-Pacific ships alone. That represents somewhere around 800,000 tons of cargo. The CHAIRMAN. How many east-bound? Mr. PAGE. East-bound, 538,149 tons of cargo. Senator MCADOO. That is for the 4-year period. Mr. PAGE. That is for the 4-year period, Senator McAdoo. The Grace Line, whose ships have been taken off entirely in the intercoastal run, transported west-bound 241,793 tons, and east-bound 356,718 tons. The CHAIRMAN. In the same period? Mr. PAGE. In the same period. That tonnage has been somewhat decreased as compared with what it would normally have been, because of labor troubles and tie-ups on the coast. During that 4-year period we had several tie-ups. Senator McADOO. What about passengers? Mr. PAGE. The last year that I was able to get figures for, ending last June, approximately 35,000 people Senator CLARK. Those are mostly pleasure cruises. Mr. PAGE. Mostly. Senator CLARK. Do you think it is justifiable for the people of the United States to be taxed to afford facilities for pleasure cruises? Mr. PAGE. No; I do not think I do, Senator. I could not justify it on that ground. Senator McADOO. Do you think that the railroads ought to be restricted to the carriage of people who have to go across the country from necessity? Senator CLARK. You are taxing them to give a subsidy Senator MCADOO. You are taxing us by putting up the railroad rates all the time. Senator CLARK. I hold no brief for the railroads, but I do not see what justification there is to come in here and say that all the people of the United States ought to be taxed for a lot of pleasure cruises. Senator MCADOO. We are not proposing to tax the whole people for the benefit of a few pleasure cruises. I want to correct the impression my colleague has. These vessels carry people who want to go on pleasure cruises as well as those who travel from necessity. Senator CLARK. There has never been any question, in any discussion I have heard on this thing, that the great majority of the passengers are on pleasure cruises. The ships themselves are described as "luxury liners." Senator MCADOO. That is not a correct description, and we repudiate the "luxury liner" idea. They are no better than any other firstclass ships. The CHAIRMAN. We must not forget that the railroads were very largely subsidized in the beginning of their construction. Mr. PAGE. That is right. Senator MCADOO. Let me invite attention to the fact that the people of the United States are being taxed today through higher rates on the railroads in order to enable them to provide, as they claim, the necessary service. That covers pleasure travel and every other kind of travel, and also all kinds of freight. Senator CLARK. That is precisely what I object to, Senator. I do not want to enter into any discussion of it at this time. Senator MCADOO. I beg your pardon. I just want to complete this one sentence. Recently the railroads, in a desperate attempt to get back the passenger business which they have lost largely through inept management during the last 10 to 20 years, have been putting on streamlined trains, special-fare trains, and reducing the time between the Pacific coast and the Atlantic coast, all of which is in the right direction. They are asking for an increase in rates from the American people to make up the losses which they say they are incurring in the transportation of freight and passengers in the United States. That taxes us all to maintain the railroads. Why should it be any more of an offense-if that is an offense-to tax the people, let us say, to maintain these ships in service? Senator CLARK. I agree with you entirely about that, Senator. That is another question entirely. The question of what ought to be done about the railroads is an entirely different question. What I am objecting to is taxing the people, for example, in my section of the country, who have to pay these extortionate railroad rates, an additional tax for the benefit of the east and west coasts. Senator MCADOO. You will not be taxed any more. Senator CLARK. We will be taxed. Every dollar that comes out of the Treasury of the United States comes proportionately from the Mississippi Valley. Senator MCADOO. Are you objecting to having the Mississippi Valley receive the benefit of our great trade which we have with you, and which we give you because you have certain advantages in the way of deliveries to California? These things do not work one way. You get a benefit, as every part of the United States does, from the provision of all available means of transportation and intercourse between the States. Senator CLARK. We do not get any benefit when the economic advantage which has been given to the east and west coasts by the construction of the Panama Canal at public expense-which was entirely justifiable then-is accentuated by an additional tax to accentuate that advantage. Senator MCADOO. We all pay the same tax. It is a national tax. Senator CLARK. But you get the advantage, and we do not. Senator McADOO. I do not think that is a correct statement, my dear friend, because we are dealing with the United States as a whole. Would you abolish the commerce of the Pacific and Atlantic coasts in order that the Mississippi Valley might get a greater advantage? |