COMMITTEE ON RULES

BERTRAND H. SNELL, New York, Chairman

MAUD A. REED, Clerk

TO CREATE A SELECT COMMITTEE TO INVESTIGATE THE UNITED STATES SHIPPING BOARD

SATURDAY, JUNE 14, 1930

HOUSE OF REPRESENTATIVES,
COMMITTEE ON RULES,
Washington, D. C.

The committee met at 10.30 o'clock a. m., Hon. Bertrand H. Snell (chairman) presiding.

The CHAIRMAN. Mr. Lehlbach, acting chairman of the Committee on the Merchant Marine and Fisheries, desires to be heard on House Resolution No. 240, to create a select committee to investigate the United States Shipping Board.

[H. Res. 240, Seventy-first Congress, second session]

Resolved, That the Speaker of the House of Representatives be, and he is hereby, directed to appoint from the membership of the House a select committee of seven Members, for the Seventy-first Congress, and which said commtitee is hereby authorized and directed to inquire into the operations, policies, and affairs of the United States Shipping Board, and any agency, branch, or subsidiary thereof; said inquiry shall particularly include an investigation of sales or negotiations for sale of any established steamship line operated under the control of any subsidiary of the United States Shipping Board, and generally contracts, leases, settlements, accounts, expenditures, receipts, assets, liabilities, properties, and any and all transactions, affairs, policies, and plans of the United States Shipping Board, including its administration of the construction loan fund and of any corporations, firms, individuals, or agencies having dealings with the United States Shipping Board from the 1st day of January, 1925, together with an inquiry into such other pertinent matters as may aid the committee in determining and recommending future policies with respect to the United States Shipping Board and the properties and agencies under its control.

Resolved further, That said committee is also hereby authorized and empowered to appoint such subcommittees as it may deem advisable, and the said committee or any subcommittee thereof is hereby authorized to sit during the sessions of the House or during any recess of the House, and to hold its sessions in such places as the committee may determine; to require by subpoena or otherwise the attendance of witnesses, the production of books, papers, and documents, to administer oaths and affirmations, and to take testimony.

Resolved further, That the Speaker is hereby authorized to issue subpoenas to witnesses upon the request of the committee or any subcommittee thereof at any time, including any recess of Congress; and the Sergeant at Arms is hereby empowered and directed to serve all subpoenas and other processes put into his hands by said committee or any subcommittee thereof.

Resolved further, That said select committee shall have the right at any time to report to the House in one or more reports the results of its inquiries with such recommendations as it may deem advisable.

Resolved further, That the select committee is hereby authorized to employ such stenographic, legal, and clerical assistance, including accountants and investigators, as it may deem necessary, and is further authorized to have such printing and binding done as it may require.

STATEMENT OF HON. FREDERICK R. LEHLBACH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY, AND ACTING CHAIRMAN OF THE COMMITTEE ON THE MERCHANT MARINE AND FISHERIES

Mr. LEHLBACH. Mr. Chairman, I introduced this resolution to provide a select committee to investigate certain activities of the United States Shipping Board, particularly with respect to the sales it has heretofore made of steamship lines and the sales of such lines as it has in prospect.

You are probably aware that within the last year the chairman of the Committee on Appropriations, Mr. Wood, in the course of hearings before his committee, has attacked certain sales heretofore made of steamship lines in a very extravagant manner, calling them criminal, and stating that they ought to be subject to indictment, and so forth. He has also commented on proposed sales which are now pending and sales which are in prospect. Then, the gentleman from New York, Mr. LaGuardia, has repeatedly on the floor attacked various policies and acts pursuant to those policies performed by the Shipping Board, with respect to lines that are operated, and that have been or are now being sold to private enterprises.

The CHAIRMAN. You do not think we should authorize an investigation every time Mr. LaGuardia attacks something, do you? Mr. LEHLBACH. No, sir; nor when Mr. Wood does, either. Now, as a matter of fact, the policy of the Committee on the Merchant Marine and Fisheries since 1920 has consistently been this: The Shipping Board, under the act of 1920, set up a number of steamship lines, about 37 in all, running from the major ports of the Atlantic, Pacific, and Gulf, to the various ports of the world. That was done for the purpose of supplying a well-rounded merchant marine, to carry the commerce of the United States, or, at least, the major part of it. Originally, all of those lines were owned by the Government and operated by the Government through agents. There was a good deal of experimentation in connection with it. There were many of these lines, and there was comparatively speaking little discrimination exercised at first in the selection of agents, who were known as the managing operators. In the course of time the routes were consolidated, and of those 37 or 38 services, that are to all intents and purposes permanent, about half were sold. About half of them, or 19 of those routes, have been sold, and 18 of them are either under negotiation for sale, as to some of them, or they are potentially for sale. All of them are potentially for sale. Now, the policy, under section 7 of the merchant marine act of 1920, has been to seek to build up the operators who are agents of the Government, in the running of the Government lines, to a point where, by reason of the accumulated good will, good business practices, economies, and so forth, they may operate efficiently. In the operation of those lines, the managers have been brought to the point, where with some Government assistance, they can afford to buy those lines and operate them. Whenever a line is sold, the purchaser is under a contract to maintain the service that the Government heretofore has rendered the shippers of the country.