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AMENDING THE MERCHANT

MARINE ACT: OF 1936

HEARINGS

BEFORE THE

COMMITTEE ON COMMERCE

AND THE

COMMITTEE ON EDUCATION AND LABOR

UNITED STATES SENATE

SEVENTY-FIFTH CONGRESS

THIRD SESSION

ON

S. 3078

A BILL TO AMEND THE MERCHANT MARINE ACT OF 1936

AND FOR OTHER PURPOSES

PART 13

MARCH 24, 1938

Printed for the use of the Conulma vee on
Commerce and the Committee on Education and Labor

[blocks in formation]

COMMITTEE ON COMMERCE

ROYAL S. COPELAND, New York, Chairman MORRIS SHEPPARD, Texas

CHARLES LMONARY, Oregon JOSIAH WILLIAM BAILEY, North Carolina HIRAM W. JOHNSON, California HATTIE W. CARAWAY, Arkansas

GERALD P. NYE, North Dakota BENNETT CHAMP CLARK, Missouri ARTHUR H. VANDENBERG, Michigan JOHN H. OVERTON, Louisiana

WALLACE H. WHITE, JR., Maine
THEODORE G. BILBO, Mississippi

ERNEST W. GIBSOX, Vermont
VIC DONAHEY, Ohio
JOSEPH F. GUFFEY, Pennsylvania
FRANCIS T. MALONEY, Connecticut
GEORGE L. RADCLIFFE, Maryland
CLAL'DE PEPPER, Florida
JOSH LEE, Oklahoma
GEORGE L. BERRY, Tennessee

GRACE MCELDOWNEY, Cierk
Roger WILLIAMSON, A88istant Clerk

COMMITTEE ON EDUCATION AND LABOR

ELBERT D. TUOMAS, Utah, Chairman ROYAL S. COPELAND, New York

WILLIAM E. BORAH, Idaho DAVID I. WALSH, Massachusetts

ROBERT M. LA FOLLETTE, JR., Wisconsin JAMES E. MURRAY, Montana

JAMES J. DAVIS, Pennsylvania
VIC DONAUEY, Ohio
RUSI D. HOLT, West Virginia
CLAUDE PEPPER, Florida
ALLEN J. ELLENDER, Louisiana
JOSH LEE, Oklahoma
DIXIE BIBB GRAVES, Alabama

EARL WIXCEY, Clerk

KENNETH C. ROBERTSON, A88istant Clerk

TO AMEND THE MERCHANT MARINE ACT OF 1936

THURSDAY, MARCH 24, 1938

UNITED STATES SENATE,
COMMITTEE ON COMMERCE,

Washington, D. C. The committee met, pursuant to call, at 10 a. m., in the Commerce Committee room, Capitol Building, Senator Royal S. Copeland, chairman of the committee, presiding.

Present: Senators Copeland (chairman), Caraway, Overton, Maoney, Berry, and Gibson.

The Chairman. The committee will please come to order.

May I say to you gentlemen that we are so crowded in the Senate with various committee hearings that it is unlikely that there will be many Senators here this morning? But you need not be disturbed about that, because we shall be making the record and it will be read at the proper time. So, if they are not here in any numbers, do not be disturbed about that; it is not due to any lack of interest; it is just physically impossible for a Senator to divide himself into three parts.

We have in the bill before us a section 215. I am going to read this so that it will be fresh in my mind as well as in yours. This is the bill recommended to us by the Maritime Commission, desiring amendments to the Merchant Marine Act, 1936. The proposal in regard to section 215 is as follows (reading]:

Sec. 215. The provisions of this act, insofar as they are practically or appropriately applicable, are extended to the construction and operation of aircraft used in transportation for hire of passengers and property in overseas trade between the United States, its Territories, possessions, or the Canal Zone, and foreign countries; and between the United States and its Territories, possessions, or the Canal Zone; and between such Territories or possessions and be. tween the Canal Zone and such Territories or possessions.

The significance of this amendment is that the same advantages of law which are now given to steamships shall be extended to aircraft. You may recall that in the maritime law the Maritime Commission may give a construction subsidy. That subsidy under certain circumstances may go as high as 33% percent; or even as high as 50 percent, under certain circumstances.

Likewise the law prescribes that an operating-differential subsidy may be given to put the American operator on a parity with the foreign operator. It is a fact, of course, in steamship operation that foreign countries-operators under foreign flags-have lower standards of living and less rigid requirements as regards living quarters on the ships. And the purpose of the maritime law is to recompense the American operator for the actual difference between the cost of operation under American standards and those of a competing line under a foreign flag. So, in theory, at least, the purpose of this proposal of the Maritime Commission is to apply the same advantages to aviation.

The explanation which was given us by the Maritime Commission, regarding this amendment, is as follows (reading] :

This amendment is designed to allow the Commission to grant to all kinds of aircraft engaged in overseas commerce the same aids for construction and operation as those granted to vessels with the same limitations and safeguards as recommended in the Commission's report to Congress pursuant to section 211 (g) of the act. At the present time the necessity for such aids is becoming apparent and it is foreseen that occasion may arise shortly to take steps to protect the aircraft in their active attempts to develop this commerce. The increased activity of foreign countries, including the granting of subsidies, in the development of their aircraft engaged in foreign and overseas commerce will create a need for future aid of our aircraft. The United States should uot, through delay, allow the foreign countries to jeopardize or perhaps destroy the remarkable start our aircraft have already made. To do so would repeat our past experience in maritime shipping.

The last sentence is very significant, because we have at the present time, of ships of 10 years of age or less, only 41—only 41. I impress this upon you, because the Maritime Commission has made a very pertinent remark here. The economic life of a vessel is considered to be 20 years. Of modern ships of 10 years of age or less, the British have 704, the Germans 132, Japanese 115, the French 64, the Italians 42, and the United States 41.

And as regards tonnage, the British lead with 4,407,000 tons, while the United States has but 417,000 tons.

Therefore you can see why it is that the Congress is so desirous of building up the merchant marine. And, as I have already indicated to you, the fear is that unless the same aid is extended as to shipping, we may have the same trouble as regards aircraft.

In the Economic Survey of the American Merchant Marine, on pages 23, 24, and 25 there is a dissertation on the part of the Commission, pointing out the relationship of aircraft as an important competitor of passenger vessels. This statement is as follows, under the heading of Aircraft and the Merchant Marine":

Transoceanic aviation looms as an important competitor of express passenger vessels of the superliner type, as will be shown by a forthcoming report of the Commission to Congress. Flying boats, carrying 40 to 50 passengers, capable of crossing the Atlantic Ocean on a nonstop flight in 20 hours, and with transportation costs under those of the superliners of today, appear to be a reality in the near future.

To determine the probable effect of transoceanic aircraft on shipping, a comparison has been made between the superliner and aircraft-designed and likely to be developed in the near future-on the basis of reliability and safety, comfort, costs, and traffic loads. Except for some possible loss of mail revenue, it is not believed that aircraft will injure to any appreciable extent the types of passenger vessels recommended for the American merchant marine, which do not include superliners. Aviation, obviously, will have no effect so far as freight vessels are concerned.

The reliability of aircraft, and their ability to maintain schedules, have become increasingly impressive. The problem of safe transoceanic aviation is essentially one of range and size of craft. Actual design and construction technique appear to offer in the immediate future several 120 000-pound flying boats of 5.000mile nonstop range, carrying 40 to 50 passengers at an average speed of 175 miles per hour. This nonstop range completely changes the possibilities of transoceanic flying, as weather hazards and delays are greatly reduced. Instrument flying and radio are conquering fog, and thunderstorms have become ineffective commonplaces to fast aircraft.

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