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are supposed to do, in compliance with the intent and the purposes of the act previously enacted by Congress.

Mr. HART. And which, even if they have that, they need not take advantage of it?

Mr. KAUFMAN. Surely.

Mr. HART. So there cannot possibly come any harm from it?

Mr. KAUFMAN. It is entirely discretionary, and all this does is to remove the restriction upon their discretion. I cannot see any sound objection to it by anybody.

Mr. SIROVICH. They might decide not to award the lines to you gentlemen, anyhow, and it simply gives them a longer period of time to deliberate.

Mr. KAUFMAN. It simply affords them a longer period of time to investigate and consider and arrive at what we hope would be a proper conclusion.

The CHAIRMAN. Of course that would remove, then, the trouble under the Comptroller's decision and would extend the period within which they could finance you.

Mr. KAUFMAN. That is right.

The CHAIRMAN. Then there would be involved the question of making an appropriation to pay you people, I think.

Mr. KAUFMAN. Naturally.

Mr. SIROVICH. Do you not think the Maritime Commission has already come to a conclusion, based on this report, as evidenced by the thing you are discussing?

Mr. KAUFMAN. We have never had any opportunity whatsoever for a discussion of this matter with the Maritime Commission as such. We heard there was this determination to consolidate these two services and just offer them for charter.

Mr. SIROVICH. Here is my opinion, that the Maritime Commission, based upon whatever evidence or testimony it has already adducedwhether your group has been holding hearings with them or not, I do not know; but in view of the fact they have already arrived at a conclusion, it must be based upon facts or statements or some testimony; and whether we prolong the time from June 29 to a year later, their conclusion is already stated here that they favor the amalgamation or fusion of the America-France Line, the Yankee and Oriole Line.

Mr. KAUFMAN. That seems to be apparent, not only from that memorandum but also from the fact they are asking for bids on the combined service and are not asking for bids on the individual services.

Mr. SIROVICH. I want to ask what would be the use even of the House and the Senate passing this resolution giving another year's time for them to consider and deliberate when they have already formed a conclusion.

Mr. KAUFMAN. Of course, it would serve no useful purpose unless the Maritime Commission, in the light of the action which Congress has taken, felt at least there was an implied mandate of Congress that further time and consideration be accorded to the matter.

The CHAIRMAN. It would give them an opportunity to hear all of the interested parties, which they have not done at this time? Mr. KAUFMAN. That is right. It would remove, at least, the force of necessity.

Mr. SIROVICH. The logic of the case I am trying to present to your consideration is this: It is my contention, as a member of this committee who hardly missed a meeting when we were considering the ship-subsidy legislation, and who considered every aspect of it, that the Maritime Commission of five men should be appointed-five men who would be approved by the Senate and who would be functioning to determine the future maritime policy. And here we find three men who are temporary appointments, with two other men still missing, and those three men, who have not had any experience, which Congress intended they should have, and here, without calling on the men involved, who have been serving their communities, as you so intelligently brought out for Hampton Roads, and the other witnesses for their particular communities, never have had a chance to present the case on the basis you have presented it before this committee; and we as a committee find ourselves with a report signed by the chairman of the Commission, in which they go unequivocally against_this_resolution and have already made their recommendation. Now, do you think it would be fair for this committee to report the bill of Mr. O'Leary, which I am going to vote for, if this Maritime Commission has already made up its mind?

Mr. KAUFMAN. Of course, whether it would serve a useful purpose or not would depend entirely on the way the Maritime Commission construed the action of the committee and, perhaps subsequently, of Congress. What that would be would naturally be only a guess on my part. I would assume, however, they would construe favorable action on this bill by Congress as evidence of Congress' view and wish that they should accord the matter further and fuller consideration.

The CHAIRMAN. Are there any questions? If not, we will hear you now, Mr. Turin.

Mr. KAUFMAN. Thank you very much.

STATEMENT OF F. E. TURIN, NORFOLK ASSOCIATION OF

COMMERCE

Mr. TURIN. Mr. Chairman, I am representing the Norfolk Advertising Board, Inc., which is affiliated with the Norfolk Association of Commerce.

The CHAIRMAN. Just for your information, Mr. Turin, I may say that there will be inserted in the record a resolution adopted by the city council of Newport News, in line with the position you are taking here.

Mr. TURIN. What I wish to bring out here is that while I can understand the average person does mistake us, for instance, as being part of the association of commerce, because we go right along with them, have our offices in the same building, and to the outsider we are one and the same

Mr. HAMILTON. That is a matter of detail; give us a statement of the facts.

Mr. TURIN. We began back in 1925, as the chairman knows, to try to develop the Norfolk-Portsmouth-Newport News area from a money standpoint. We finally decided the two chief problems were those of resort and shipping, and along with shipping went industry, of

course.

Our organization has spent approximately $700,000 trying to develop that area. Much of that money, at least $200,000 of it, has been spent in advertising it as an industrial port area. One of the things we are struck with more than anything else is that nothing should be done to throttle the development of any port. We regard the American Hampton Roads Line as strictly a home-owned line, something that we need, and we consider the gentlemen who head that line as reputable and as employing themselves in an energetic manner to develop that port.

Students of economics, especially as it relates to the development of any industrial port area, will first begin to look to see where the tributary_territory is and you gentlemen have access to the Department of Commerce's records and you will find that in 1930 there was prepared by Mr. Cooper and by Mr. Dulin, I believe, a complete analysis of the birth of American commerce, and it shows it was born on the James River and it carries right on down. It shows where at one time the Hampton Roads port area was the port of the country and as the result of wars, embargoes, and governmental action, finally the port business fell away to almost nothing.

The CHAIRMAN. As a matter of fact, during the time of the World War, it was the second largest port, second to New York?

Mr. TURIN. The Hampton Roads port had reached its stride again; but what we are most anxious for is to have a home-owned line where we know that the people are concerned with just one thing only, and that is the development of that port area, and we recognize the gentlemen who are with the Southgate Nelson Corporation and operate the American Hampton Roads Line as qualifying under that heading.

FURTHER STATEMENT OF S. D. SCHELL

Mr. SCHELL. Mr. Chairman and gentlemen of the committee, at the very outset I wish to make it very emphatic that what the Maritime Commission has done in offering these vessels for charter is absolutely as directed by Congress in the Merchant Marine Act of 1936, and they have been offered on such a basis as was contemplated by the Merchant Marine Act of 1936. I would like to read section 704

The CHAIRMAN. Do not you think the act of 1936 contemplated hearings would be given to these people and there should be a permanent commission appointed?

Mr. SCHELL. I imagine, Judge Bland, that the Merchant Marine Act did contemplate a commission of five members, but I have no control whatsoever over that.

The CHAIRMAN. I know it; I am not criticizing you.

Mr. O'LEARY. Was there any hearing in regard to these contracts? Mr. SCHELL. Mr. O'Leary, I do not know that the act imposes upon the Commission any obligation to hold a hearing as to what disposition shall be made of the Government-owned vessels, because the law very clearly states that is entirely a matter of discretion with the Commission and that the managing agents are its agents; that the sole management and direction of those vessels are in the hands of the Commission.

We have conferred many times with our managing agents. We have daily contacts with every one of them, with the chief executive

officers all the way down to the minor employees in those organizations.

Mr. O'LEARY. But the act does say that the Commission should promulgate what a prudent business organization or prudent businessman would do, does it not?

Mr. SCHELL. Well, in my judgment, the Commission has attempted to act on what in its mind a prudent businessman would do. Mr. O'LEARY. That is your judgment?

Mr. SCHELL. And I imagine it is the judgment of the Commission. Now, with the consent of the committee, I will proceed to read section 704:

All vessels transferred to or otherwise acquired by the Commission in any manner may be chartered or sold by the Commission pursuant to the further provisions of this act. All vessels transferred to the Commission by this act and now being operated by private operators on lines in foreign commerce of the United States may be temporarily operated by the Commission for his account by private operators until such time and upon such operating agreements as the Commission may deem advantageous, but the Commission shall arrange as soon as practicable to offer all such lines of vessels for charter as hereinafter provided and all operation of the Commission's vessels by private operators under such operating agreements shall be discontinued within 1 year after the passage of this act.

Mr. O'LEARY. Right there, what philosophy dictated a 1-year charter party?

Mr. SCHELL. I was just coming to that. I now read section 711

Mr. HART. Along the line of what the chairman has suggested, you are adhering to a strict construction of section 704. Now, will you please turn to section 201 and read what is meant in this act by the "Commission."

Mr. SCHELL. I conceded that to Judge Bland, Congressman Hart. Mr. HART. But I would like to have it in the record in view of the statement you just made as to the strict observance as to the intent of Congress by the present members of the Commission.

Mr. SCHELL. You will recall I said I had no control over the appointment of the Commission.

Mr. HART. I am not charging you with any control over the appointment of the Commission; I am simply asking you to hook up the definition of the Commission with your emphasis on the duty of the Commission.

Mr. SCHELL. I am going to do that. I am now reading section 201 appended to the Merchant Marine Act of 1936.

Mr. HART. Just the first two sentences.

Mr. SCHELL (reading):

An agency is hereby created, to be known as the United States Maritime Commission (hereinafter referred to as the Commission). The Commission shall be composed of five persons, in this title referred to as members, to be appointed by the President by and with the advice and consent of the Senate. Mr. HART. The present members of the Maritime Commission have not been confirmed by the Senate?

Mr. SCHELL. In connection with that, however, I would like to read another section which says that a vacancy in the Commission shall not impair their right to function, with the full power of the Com

mission.

Mr. HART. I understand that, but the Commission as defined by the act is a body of men appointed by the President and confirmed by the Senate. After we have reached that conclusion, then, of course, if the Commission is not fully equipped, the personnel is not complete, the others are members of the Commission as defined by the

act.

Mr. SCHELL. These three appointments now are what are known as recess appointments.

Mr. O'LEARY. But we are not in recess.

Mr. SCHELL. But they were made during the recess.

Mr. O'LEARY. But we are not in recess now, and the Senate has not confirmed those appointments.

Mr. SCHELL. Under the law, the tenure of a recess appointment continues

Mr. HART. I do not think we ought to assail Mr. Schell because the Commissioners have not been confirmed.

Mr. SCHELL. I am not taking this as personal at all.

Mr. HART. But he laid such emphasis on the duty of the Commission and emphasized Commission in such a hearty manner, I thought it might be well to have hooked up with that a reading of the definition of the Commission as stated in the act.

So the Commission that is now acting is not at all the commission contemplated by Congress at the time of the passage of the act? Mr. SIROVICH. Do you think the Supreme Court of the United States would declare the action of those three members who are today functioning as the Maritime Commission as constitutional, since they have not been confirmed by the Senate and the law states this commission can only function when they have been approved by the Senate of the United States before three would constitute quorum and then vacancies occur?

Mr. SCHELL. I would say, Congressman Sirovich, that the Supreme Court of the United States would hold this action is constitutional, because there is a statute to the effect that all recess appointments continue in office until the end of the next session of Congress. Mr. SIROVICH. That is your observation, and the language you have just read, I wish you would read again the first sentence in which their confirmation by the Senate is made one of the parts to their appointment.

Mr. SCHELL. Section 201 says:

Appointment by and with the advice and consent of the Senate.

Mr. SIROVICH. Read the exact language as stated in the act.
Mr. SCHELL [reading]:

The Commission shall be composed of five persons, in this title referred to as members to be appointed by the President by and with the advice and consent of the Senate.

Mr. SIROVICH. Now, the consent of the Senate has not been obtained and so they are only serving as recess appointments.

Mr. SCHELL. They are only serving as recess appointments; right. Mr. SIROVICH. Now read further.

- Mr. SCHELL [reading]:

The President shall designate the member to act as Chairman of the Commission, and the Commission may elect one of its members as vice chairman.

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