It has been the suggestion of those of us in the Northwest that that type of control might best be exercised by some method of licensing or incorporation. Because without such an arrangement, then should there ultimately develop on the part of labor an unwillingness to negotiate-in fairness not only to themselves but to the public at large then the right to negotiate itself might be placed in jeopardy. The CHAIRMAN. Of course, if we proposed that plan, the result would be to bring down fireworks that would startle this Capitol. We would have many, many groups and interests fighting the idea of incorporation of the unions.

Mr. BENTON. Mr. Chairman, at the Oregon State Legislature last year, I talked a good many times on this point, as did the other agricultural representatives at that legislature; and we heard all that you might have here ourselves. We realize just what is involved. Nevertheless we do feel that basically there is one clean-cut factor-a basic plea on the part of the unions and the Department of Labor today-which is this: That in the period of organization and nationalization, the development period in unions, no restrictions should be set upon them.

Now, basically, that is their plea against this type of regulation that is implicated in title 10: That whenever they become established, then-as in the older unions' cases-they will be willing to accept some type of restriction.

The CHAIRMAN. That is what they say here.

Mr. BENTON. Our plea, from the Northwest, is this: We want to be alive, in business, when that takes place. But we do not believe we can exist until that time comes if present conditions continue. In the meantime, while these adjustments are being made, we believe that a third party, or perhaps a fourth party-the shipping and consuming public-will have to be considered in the adjustment of these disputes. And it is that plea which brings me here from the Northwest.

These different groups are not absolutely specific in demanding any particular set-up such as the Labor Relations Board; but we want to accomplish the same result as has been accomplished on the railroads.

There is one specific case of break-down which disturbs us very greatly in connection with labor disputes, and that has taken place since the settlement of the 1936 strike in February or March of last year. There was incorporated in that settlement a definite clause that these maritime unions would not go out on sympathetic strikes taking place away from seaboards. We are under the impression that there have been several cases where attempts have been made in some of the different Pacific coast ports to call sympathetic strikes in order to force some type of organization connected with this jurisdictional dispute away from the seaboard. This is a matter of grave concern to us. And we think that in those instances to which I refer, the solution preventing such sympathetic strikes came not from the unions' attitude but from the fact that the shipping organizations insisted, in each case where there was an attempt to call a strike, that the whole port would be tied up; as I understand it, in those instances that was the only factor which actually kept strikes from taking place for more than a few hours in those ports.

In other words, we do not feel it safe to leave this matter of the interpretation of these things to the unions or, so far as we are concerned, to the shipping companies themselves. We feel that our interests, as consumers and producers, must be a factor to be considered, and that some other agency or some other factor in these mediations should be introduced to protect our interests.

This bill provides, in another clause, for subsidies. These subsidies, in a rough way-figuring on a coastwise voyage with our products, of approximately 5,000 miles-would amount to about 6 cents a box on our product-or about 10 percent of the total freight load. We believe that the problem of maintaining these ships is a problem of maintaining tonnage for those ships; and we believe that we, as contributors furnishing 90 percent of the money receipts-the income to the lines should be considered as a necessary party to the continuation of free, unrestricted commerce.

Finally I want to bring this plea to you: We are a sick industry, there on the Pacific coast. The f. o. b. New York auction returns, as stated by the Bureau of Economics' compilations, have dropped in the past 10 years, on apples, from $2.64 per box, in New York, to $1.73; and on pears, on bushels, from $2.08 to $1.20. This drop in prices has made our industry very near the border line; and I would say that approximately 30 percent of the acreage has been cut out. In other words, we are not talking from the standpoint of an industry which can "take more on the chin" and continue to operate. The fresh-fruit branch of our industry has not proved able to use the Panama Canal intercoastal service for shipments to the eastern coat, in any degree. The Panama Canal has been used, by us, almost entirely for export shipments to Europe, those shipments taking the bulk of our exports.

However, in regard to canned fruits, a large percentage of our movement has taken place through the Panama Canal. On account of the weight involved and the competition that we receive from eastern sections, in canned fruits, it is very difficult for us to ship overland and meet that competition and bring anything back to the Northwest. By way of illustration, I can point out, as a specific case, those cherries which go into maraschino cherries: At the time of the strike in 1936, there was a general cancelation, on the part of New York and eastern buyers, of orders during that strike, owing to the extra cost of delivering that kind of fruit by freight overland. Italian cherries could be brought in at lower figures.

I have one further item, if you please.

The CHAIRMAN. Under our laws, can you hold your apples in one of your ports and ship directly to Europe in a foreign ship? Mr. BENTON. Yes.

The CHAIRMAN. Did you do that to a considerable extent while we were having these maritime strikes?

Mr. BENTON. We could not load them because of the longshoremen and the loading crews. In fact, during the strike we were confronted with the situation that prior to the strike we had stored in the municipal terminal in Portland a considerable body of fruit. It was necessary for longshoremen to load that fruit from the municipal warehouse to cars, to go to New Westminister. It was necessary for those cars to be billed to the eastern seaboard; because if they were billed to New Westminister, the longshoremen, under their

agreement, could not touch them. So, in order to move the fruit and at the same time keep the longshoremen straight, and still get this fruit out of storage, it was necessary for us to fake bills of lading.

It has been a matter of grave concern to us that, with that big shipping industry, all through the winter of 1936 we have had to sing, "God Save the King," in order to move our tonnage out of this country.

In California there has been developed a slogan, by the organized farmers of that district-and, incidentally, they are organized in a new organization, which has one and only one function: To meet their problems in labor relations. This organization has made the statement that, "To the farmer, the freedom of the highways"-and, as far as we are concerned, of the seas-"is as sacred as the freedom of speech." We believe that the matter of freedom on the part of agriculture to move its products when and where it pleases, should not be under the dictation of any person or group of persons, except in acting under specific public interest. And it is in behalf of that general public interest that I come to beg of you that some method of mediation be set up, as this bill suggests, so as to bring about conditions under which, in the majority of cases, there will be no cessation of shipments.

The CHAIRMAN. I think I read that when you were having trouble, out there, the farmers threatened to go down to the shore and move those apples.

Mr. BENTON. I was one of those farmers myself, Senator. And I followed that line of thought for some time, until we came up against this: We could have loaded one or two ships, but we could not load ships that did not sail from other ports because they knew there was port trouble in the Northwest.

There is another factor of loss that took place in this Portland strike. There was a threat, on the part of longshoremen, to unload grain in Portland. Finally that was settled and the longshoremen unloaded the ship. But in the holding up of the ship in Portland the supplies of that type of grain became so depleted in the Northwest that the balanced rations of feed for dairies and for chickens, were definitely affected, thus throwing a number of farmers' flocks and herds off of their feed, with a resultant loss from the discontinuation of production of eggs and milk that can never be estimated. That is just one of the byproducts of such trouble.

In closing, I should like to say, in repetition, that we are sympathetic with the problems of organizing labor and labor unions; we believe union labor is an essential step in our national economy; but we believe that in this organization some method must be set up by which the producing and consuming public will be protected in the regular transshipment of commodities that today is made essential by the hand-to-mouth buying that exists in America and in the world at large.

The CHAIRMAN. Thank you very much.

STATEMENT OF CAPT. HOWARD G. COPELAND, UNITED STATES NAVY, OFFICE OF THE CHIEF OF NAVAL OPERATIONS, ON BEHALF OF THE BUREAU OF NAVIGATION

The CHAIRMAN. Captain Copeland, we have kept you waiting a long time. I am sorry. Please proceed.

Captain COPELAND. My name is Capt. H. G. Copeland, attached to the office of the Chief of Naval Operations, but presenting the comment of the Bureau of Navigation regarding S. 3078.

I should like to say, Mr. Chairman, that this comment of the Navy Department bears no relation to the President's program.

The CHAIRMAN. I see.

Captain COPELAND. This committee, Mr. Chairman, asked the Navy Department to comment on S. 3078. The official comment will be along in a few days; but because of a delay, the Department was anxious to get its viewpoint before the committee. And I have prepared a statement to that effect, in as brief a manner as possible.

I should like to say that in the event of national emergency or war, the Navy Department will be called upon to take over vessels that have been inspected by naval officers and declared to be suitable for use as naval auxiliaries; and that in order to man the number of vessels which the Navy Department estimates, it will be necessary to take over some 5,000 officers and 35,000 men, who will be necessary. That represents the Department's paramount interest in the situation. The CHAIRMAN. How many men?

Captain COPELAND. Five thousand officers and 35,000 men.

In view of the importance of the merchant marine as a factor for national defense, and of the far-reaching influence that the character of its personnel has on its value as such, the Bureau of Navigation, as the Bureau charged with the responsibility for personnel matters, desires to include in its comments on S. 3078 some accepted principles and basic considerations with regard to the merchant marine in relation to the national defense.

National policy: The Congress, in section 101 of the Merchant Marine Act of 1936, declared, "It is necessary for the national defense that the United States shall have a merchant marine capable of serving as a naval and military auxiliary in time of war or national emergency." It is obvious that the discipline and efficiency of the licensed and unlicensed personnel, not only in their purely merchantmarine capacity but also in their role as forming an important factor in the national defense, are of the utmost importance. Insofar as the national defense is concerned, undisciplined and incompetent personnel will convert the fighting ship into a liability rather than an asset. Since the Navy Department is responsible for the operation of merchant ships when they are converted to naval auxiliary use or are chartered to serve the fleet, it is the department of the Government which is primarily concerned with any training or measures which may be intended to prepare the merchant-marine personnel, licensed and unlicensed, to perform their duties with respect to the national defense. The Navy Department is prepared to discharge its responsibility through its Merchant Marine Naval Reserve. The Navy Department is prepared also to cooperate to the fullest extent with

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other agencies of the Federal Government in their efforts to train personnel for the efficient performance of their merchant-marine duties. However, it considers any steps intended primarily to fit licensed and unlicensed personnel to discharge their duties in behalf of the national defense as specifically a matter properly coming under the jurisdiction of the Secretary of the Navy.

Therefore the Department of the Navy is opposed to the establishment of such activities under other agencies, and the appropriation of funds to other agencies for these purposes. Such funds as can be devoted to making the merchant marine a more efficient factor in the national defense, should, insofar as personnel is concerned, be used to train the Merchant Marine Naval Reserve.

With respect to the matter of State schoolships, under the provisions of an act of Congress entitled "An act to encourage the establishment of public marine schools and for other purposes," and amendments thereto, four States maintain and operate nautical schools: Massachusetts, New York, Pennsylvania, and California.. These schools bear a special relationship to the Navy Department, which under the provisions of the act referred to-gives an annual cash grant of $25,000 and the loan of a vessel, with all of its equipment and furnishings, to each of these States. In addition, the Navy Department makes all of the necessary repairs on each vessel, so run; and these repairs are chargeable to regular naval appropriations. The commanding officers of the training vessels are retired captains of the Navy. The course of training and discipline at these four schools enhances the usefulness of their graduates and as potential Naval Reserve officers. In view of the very special and important personnel and matériel interest the Navy Department has in the schoolships and the State schoolship system, the Navy Department is opposed to any development that would interfere with their continued operation under the auspices of the States and the Navy Department, unless and until a satisfactory substitute system, such as a Federal Merchant Marine Academy, is first established and put into successful operation. These schoolships constitute a part of the regularly established educational system of their States. They offer specialized training in their fields, in the same way that other State institutions offer training in engineering, law, and so forth. In view of the important contribution these schools have made and are making in fitting students for licensed positions in the merchant marine, and the valuable training those students receive to fit them as Naval Reserve officers, any curtailment of their activities would at present not be justified.

Based on the foregoing considerations, the following major recommendations for change in S. 3078, as to personnel features, are made: Section 44, page 32 (a): The Navy Department recommends against enactment of the proposed new section 216 (b).

The CHAIRMAN. You recommend against (a)?

Captain COPELAND. Yes, sir; section 44 on page 32, section 216 (b). The CHAIRMAN. Yes. You recommend against (b)?

Captain COPELAND. Yes, sir. It appears that the proposed United States Merchant Marine Service will duplicate the Merchant Marine Naval Reserve. No advantage can readily be seen for the establishment of such a service over the existing Naval Reserve. This organization now is operative, naval ranks and ratings are accorded, and