Senator CLARK. Under the present system, it is my understanding they may receive a subsidy from the Government on the basis of increased labor costs. There is no insurance that the payment out of the Treasury, on the basis of the increased labor costs, actually goes to labor. Mr. WILLIAMS. No, sir; there is no assurance. Senator CLARK, What provision is there in this bill to see that labor gets the differential paid out of the Treasury of the United States on the basis of the difference in labor costs? Mr. WILLIAMS. I can best explain that, sir, by the provisions of section 6 in which any man who enters into a contract with the Commission agrees to certain provisions, and included in those provisions is the right of appeal. Senator CLARK. To go to whom? Mr. WILLIAMS. To the Commission, the Coast Guard, or Labor Department. Section 6 says, "The owner or operator will comply with such further requirements respecting the officers and other members of the crew as the Commission shall prescribe." Senator CLARK. But there is no insurance that the actual differential shall go to labor. Mr. WILLIAMS. Not specifically; no, sir. Senator CLARK. Unless the Commission or Labor Department sees fit to take an appeal and take the matter to court? Mr. WILLIAMS. Yes, sir. Senator CLARK. In other words, on the fairness of the shipowner, the ship operator, except in such cases as the Commission sees fit to take the matter to court? Mr. WILLIAMS. Yes, sir. There is one other point I would like to make. Page 5, line 10. Senator CLARK. Just before you come to that, Captain. Mr. WILLIAMS. Yes, sir. Senator CLARK. Don't you think that the taxpayers of the United States, if they are to be taxed for the purpose of equalizing labor costs in the United States and abroad, that some specific provision ought to be made to see that labor gets the benefit of those payments? Mr. WILLIAMS. Yes, sir; I do, sir. I feel very strongly on that point, because we have a case today, sir, where a man is carrying the responsibility of a vessel on his shoulders, we will say he is next to the captain on the ship, if that captain dies that man is entirely responsible, and we find he got $6 a day. That is what he gets paid for carrying the full responsibility. Senator CLARK. Do you happen to know how much the captain of the Morro Castle was receiving? Mr. WILLIAMS. I could not say, exactly, sir. I think it was around $325. That is the pay of the master of the ship. Senator CLARK. I may be mistaken about this, and the chairman can correct me, because he is chairman of the subcommittee that investigated it, but I understood the man who was actually in charge of the vessel at the moment of disaster, as master, was receiving a salary of something around $115 a month. The CHAIRMAN. He was the mate. You remember the captain died a few hours before. Mr. WILLIAMS. I did not quite understand your question. The captain that died received a certain salary, we will say slightly over $300 a month. The man that had to step in his place, the man that had to be trained equally well, who had to have a training equal to the qualifications of that captain, because no man can be first mate or chief officer unless he does possess the qualifications of a captain, that man I could not say exactly, but I dare say he did not receive 1 cent over $175 or $180 a month. Senator CLARK. Mr. Chairman, am I in error about that? I understand he received $115 a month. Is that correct? The CHAIRMAN. I do not remember the amount, but he received the salary of a mate. Mr. WILLIAMS. Yes, sir. Senator CLARK. I was told the other day that he received a salary of $115 a month. Senator GIBSON. He is the man that was responsible? Senator CLARK. Yes; he was the man that was responsible. Senator CLARK. On that point, Mr. Chairman, I might suggest that if the steamship companies had paid a man a sufficient salary, if they had paid a sufficient salary to have a man qualified to step into the responsibility that he might have to step into at any moment in any voyage, they might have had a better man in that situation. The CHAIRMAN. I am in full accord with you, Senator. Senator GIBSON. Is there any other suggestion that you wanted to make to the committee? Mr. WILLIAMS. Yes, sir. On page 5, after line 10, after "American" insert The CHAIRMAN. What page is that? Mr. WILLIAMS. Page 5, line 16. I will get it straight now. After "foreign vessels" insert: In an economic or commercial emergency the Commission is hereby authorized to aid the farmers and cotton producers in any section of the United States, in the transportation and landing of their products in any foreign ports, which products can be carried in dry-cargo vessels. The Commission shall have the right to reduce rates, to supply additional tonnage to any American operator; or, the vessels may be operated by the Commission directly until such time as the Commission deems such special rate reduction and operation necessary for the benefit of the American farmers and cotton producers. Senator GIBSON. Well, is it true that the conference have any power to stop a vessel from going into any particular port? Mr. WILLIAMS. I could not say that they have any power to stop it, but by their conference agreement, by a violation of the mutual agreement, the agreement of the conference would serve to keep the vessel from operating in any port. The CHAIRMAN. The Senator from Vermont will be interested in the fact that the West-Italy-American conference just raised the price of produce or merchandise into Boston a dollar and a quarter above New York. That is what the conference has done in one case. Of course, it is good for New York. Senator CLARK. Captain, as far as this conference matter is concerned, if it were a matter of domestic concern purely, it would be what is known under the law as an illegal agreement in restraint of trade; is that correct? Mr. WILLIAMS. I do not know the interpretation of that. Mr. WILLIAMS. If it were under purely a local administration and affected just the United States I would say it would be in restraint of trade. Senator CLARK. There is no question about it being in restraint of trade, I take it from your statement. It is what is forbidden by law in the United States, in interstate commerce. Mr. WILLIAMS. Yes, sir. Senator CLARK. As I understand it, the lines which receive subsidies were also parties to this conference at a certain time? Mr. WILLIAMS. That is right, sir. Senator CLARK. They are engaged in a practice which is not only outlawed but is made a criminal offense by the laws of the United States as to interstate commerce. Mr. WILLIAMS. Yes, sir. Senator GIBSON. And those conferences are in many cases controlled by foreign shipowners, is that right? Mr. WILLIAMS. That is right. The CHAIRMAN. Do you have anything else? Mr. WILLIAMS. That is all. The CHAIRMAN. Thank you. We will next hear from Mr. Bayless. STATEMENT OF HERMAN A. BAYLESS, COUNSEL FOR MISSISSIPPI RIVER SYSTEM CARRIERS' ASSOCIATION The CHAIRMAN. Give your name to the stenographer. Mr. BAYLESS. Herman A. Bayless. I am counsel for the Mississippi River System Carriers' Association. The CHAIRMAN. All right, Colonel, you may go ahead. Mr. BAYLESS. The Mississippi River Carriers' Association, which I represent as counsel, comprising almost all of the common, contract, and private industrial carriers (with the exception of the Federal Barge Lines) on the Mississippi River system from the headwaters of navigation to the Gulf, including the Ohio River and other tributaries, carries approximately 90 percent of the total annual tonnage of about 50 million tons. The carriers on this system, with the exception of a trivial amount of passenger traffic, transports freight by means of towboats and barges. These carriers, in seeking Government appropriations for the improvement of the Mississippi and Ohio Rivers and their tributaries, have given consistent and earnest assurances that if the waterways are improved with public funds the carriers will privately finance the construction of all necessary equipment and will operate without a Government subsidy or any Government financing. They do not now desire any subsidy. They therefore urge the amendment of section 503-b of committee print S. 3500 at page 38, providing for Reconstruction Finance Corporation loans for the construction or reconditioning of vessels for "use in coastwise service or on inland waterways" by adding the following after the word "waterways" on line 9 "excepting vessels engaged solely in the transportation of property on inland rivers and canals exclusively." Senator CLARK. Just a minute, Colonel. The CHAIRMAN. The line reference is wrong. Mr. BAYLESS. I am sorry. Senator CLARK. You probably have a different print, Colonel. Mr. BAYLESS. The page is correct, sir. The CHAIRMAN. I think it is on line 12 rather than line 9. Don't you think so? Mr. BAYLESS. When I prepared this statement I did not have the committee print before me, I had the former copy. The CHAIRMAN. What page is it? Mr. BAYLESS. Page 38, sir. You are right, Mr. Chairman, it is line 12 that I refer to. In section 503 (b), I will repeat the amendment which we propose: excepting vessels engaged solely in the transportation of property on inland rivers and canals exclusively. They also urge the amendment of section 509 of committee print S. 3500 at page 51, providing for application to the Authority for aid in the construction of a new vessel to be operated in the domestic trade by substituting a comma for a period after the word "trade” at the end of line6, by adding the following words: excepting vessels engaged solely in the transportation of property on inland rivers and canals exclusively. It should be a source of satisfaction to you and the members of your committee to know that there is one large group of water carriers who feel that they can operate without requesting public funds to finance the construction or reconditioning of their vessels. We realize that the coastwise and ocean carriers have a different problem and therefore, with this amendment, we support the bill. Senator CLARK. Colonel, if I understand you correctly, it is the position of your association that the inland waterway carriers do not need any subsidy? Mr. BAYLESS. Yes, sir. Senator CLARK. And therefore you deliberately propose to except inland water carriers from the operation of this act? Mr. BAYLESS. Yes, sir; especially as the act was drafted to include inland waterway carriers. Senator CLARK. I understand that. I think that is highly commendable on the part of the inland waterway carriers. The CHAIRMAN. I will ask the reporter to include at the end of Mr. Bayless' testimony the figures that were asked for about what might be called inland waterways report from Mr. Weaver. Memorandum for Colonel Johnson: MARCH 10, 1936. Referring to Senate bill 3500 and particularly to page 38, section 5, which liberalizes the scope of the Reconstruction Finance Corporation, the following facts may be of interest and may indicate that this proposed act is much more far reaching in its effect than the present discussions would indicate. The rehabilitation of our domestic water-borne transportation will be a direct result of the passage of this act. Owing to the various requirements in connection with safety at sea it has come to my attention that approximately $100,000,000 worth of new ship construction may be expected to result in the domestic transportation field. The following table indicates the status of our small passenger vessels, a large percentage of which will be scrapped and replaced with new vessels if this act becomes law: Passenger vessels of over 50 gross tons operating on lakes, bays, sounds, and inland rivers: 484 140 110 10 200 740, 841 Over 20 years old. Rough approximation of the districts in which these vessels are now em ployed: East coast_. Midwest rivers_. Great Lakes____. Gulf West coast__. Approximate total gross tonnage. Director, Bureau of Navigation and Steamboat Inspection, J. B. WEAVER, Department of Commerce. STATEMENT OF THEODORE BRENT, INLAND WATERWAYS, NEW ORLEANS, LA. The CHAIRMAN. All right, Mr. Brent, you may proceed. Mr. BRENT. I do not suppose, Mr. Chairman, that I have to quality myself. I will, if you wish. The CHAIRMAN. No; you have been qualified and requalified and re-requalified. Mr. BRENT. I merely want to say that the language to which Mr. Bayless refers is possibly inserted at my request. I did ask to have the language broadened. Insofar as I am concerned, I am perfectly willing to accept the amendment which he offers, because, as he says, the conditions in the inland-waterway trade are different from those in the coastwise. trade. The coastwise trade is not seeking subsidy, but sooner or later the coastwise trade will have to have a place to come for loans for construction and reconstruction, because we haven't found a market yet for shipping stocks which will permit the replacement of coastwise fleets except through some such means as is provided in this bill. Senator CLARK. Of course, the inland water carriers do not have what the coastwise trade has, a monopoly by law, do they, Mr. Brent? Mr. BRENT. Oh, yes, they do; exactly the same. We are all in the domestic trades. No foreign ship can include itself in those trades. The conditions are exactly the same. Senator CLARK. Yes; but the conditions of the inland-waterway carriers are highly competitive, both with rail transportation and truck transportation, are they not? Mr. BRENT. And so are the coastwise trade. I am speaking from experience, because I am running a small coast wise line in competition with both rail and busses. Senator CLARK. But there is a definite monopoly on water transportation, coast wise, which does not exist as to the inland-waterway transportation, is there not? Mr. BRENT. No, sir. 54085-36-11 |