MERCHANT MARINE ACT, 1935 HEARINGS

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					MERCHANT MARINE ACT, 1935

                      HEARINGS
                            BEFORE Till


    COMMITTEE ON COMMERCE
      UNITED STATES SENATE .
          SEVENTY-FOURTH CONGRESS
                         FIRST SESSION
                                  ON

                           S. 2582
A BILL TO DEVELOP A STRONG AMERICAN MERCHANT
   MARINE. TO PROMOTE THE COMMERCE OF THE
         UNITED STATES, TO AID NATIONAL
            DEFENSE. AND FOR OTHER
                   PURPOSES



                              PART 5
                           Jl'NK 5, 1935



     Pritiu-i f»r tin- ii-ii? «l .in1 Ci'timitti   >n Commerce




                                                    Room 7016

                          UNITBn STATU
                        iiKsr^^itumNg-
                        WASIIINGTON : ll
                      COMMITTEE OS COMMERCE

                   ROYAL S. COI'ILAKD/KrW-rork.
DCSCAX U. FLETCHER, Florida       '- -      CHARLES L. McNAttT,
MOKKIS SHEPI'AKD. Tezu                      HIRAH W. JOHNSON. C«H(orul>
JOSIAII WILUUtRAJUCr. Nortk Cwolfau         •OnUUk r. NTK. North.Okkau.
IUTTIE W. CAKAWAT.                          ABTOCBII. TANDEVBEUO. Jllchlpm
BENNETT CRAMP CLARK.                         WALLACE It WHITE/J*,.
LODIS MUBPHT. low.     ..                   BBMX8T V. OIBIOX, Vermont
JOHN II. OVKRTON. Ix>ni§lMM
NATIUN L. BAO.IUAN. t»D
TIUXIIIORE ti. nil-BO.
TIC DO.VAnrV. Oblo
JOSi:i'H K. GrFFEY. I'rnnijIviinU
FKA.NCIR T. MA1.0MCV, Com- Unit
(]RORRR L. BAHCLIITK.
                            duct              . Cler*
                       M. C. I'AkRnMi. Jr..
                       CONTENTS                                                   !
empiit of— "                 ."                                         *••-
Hut.. Mom* Shcpnard, sartor Senator from the State of Texas           . 54,9
R. C. Fulbright, HoiwVin. Tex., gencrid counsel for tbe Southern Pine
  Association, American Cotton Shippers' Association, and various
  individual concerns                                               _   570
Frederic Brcnckman. Washington rcnrojentativc of the National
  Granar, 630 Indiana Avenue NW., Washington, D C                       583
]{. J. Wagner, chairman .rf ihi occ»n, iiilrrrow-tal. and Coastwise            . 1
  tran(^x>rtatio:i connn'ttcA Xatirui»i liiilndrial Traffic I^eaguc     586      •.
Edward P. Farley, chaihii^i of tne executive committee, American-                1
  Hawaiian Steamship Co., anil trustee of the MUIMOU Steamship
  Cv                                                                     Ml
ITarrv S. Bruwn, chief of tbe division of regulation, United States
  Shipping Board Bureau, Department of Commerce.              .....     597
                                                                m
                MERCHANT MABINE ACT, 1935

                     WEDNESDAY. JOTZ 5. 1935
                       \
                                    UNITED STATES' SESATE,
                                     COMMITTEE ox COMMERCE.
                                                  Wa*hiuyt*Hit If. C.
  The comirutu-e in : vur wnt to call, at 10 a. in., in tlie Capitol,
Senator Royal 8. C« "•- .an<l-presiding.
  Present: 'Senators Coin-land (chairman). Sheppard, Donabey,
Mis. Caraway, Xye, and Gibson.
  The CHAIRMAN". The committee will please come to order. Senator
Shepimrd, I believe you wished to present *omething this morning.
STATEMENT OF HOH. MORUS SHEPPAED, THE 8EHIOE SENATOR
                    FKOM TEXAS

   Senator SuErrAKU. Mr. Chairman ami members of the committee,
 I v ish to say primarily that the entire agricultural interests of my
 State have bitterly protested the inclusion of such regulatory pro-
 visions in S. 258-2'a*, have bc*n added in nei-tion 70}. paragraphs 2,
3. and 4. and section HUG.
    All the Texas cotton interette. and our other exporting interests,
 fur tliat matter, are opjnwed to such extreme regulation, which is
ile«tined to destroy frve t-oiupetition on the high •*«* for tlie ex]>ort
traffic of Texrus
   The objectionable provisions in t^-tion 701 of the bill plaw aii
absolute minimum rate-making jwwer in the Federal regulatory
Unly, which is for the pur|Xfee of destroying the tramp steamers and
irregular lines which have eiiablcd the cotton fchiupcrs to get reason-
ublo rut«>s. I might add that those trani]> shii»s are among our great-
est facilities, at our ports, and \M jH-nvnt of the cotton of Texas —
ami Texas produces one-fourth of the cotton of the Tnion and one-
fifth of the cotton of tlie wor'd— and, as I started out to say, ft)
^rcent of this prtNluction goes abroad.
   The CH.MKMAK. In the matter «f ca.'go rates, does the shipprr
take tlie whole sliipf
   Senator SHEJ-I-ARD. I will wsk Mr. Fulbright to answer that ques-
tion.
   Mr. FIUUWHIT. They do not. as a rule. They are a part of tlie
cargo.
   The CHAIRMAN. They are common carriers, as 1 iinderstanil.
   Mr. FCUUIIGIIT. I intend to cover that in some detail in my stnte-
       that I ho|M<-to iiuikc here.
    ctuidtnle vcnir statement.
570                 ilEBCHAXT MABIXE ACT,        1935

    Senator SIIEITARD. If one of these lines publishes a reduced rate,
 the projK**<l Federal board could suspend the rate for a period of
4 months. which would make it possible for tin-in to revoke any iv-
duction that might be made on agricultural products, and suspend
 it until tin- main shipping season is over.
    Section HOG would authorize rebates to be made where shippers
 will agree to confine their shipments to certain lines which are mem-
bers of the so-called "conferences." Such rebates have been con-
demned by the courts and the Board, and yet the law would legalize
them if- made by some of the steamship lines which belong to the
trust. If a ship does not belong to the trust, it cannot give any rebates
without violating the law.
    I will now ask Mr. Fulhright to enlarge on these points and make
anv other*-- lie may wish 'o make.
    The CHAIRMAN. All right. Mr. Fulbright, the committee will be
glad to hear you. Please give your name, address, whom you rcpre-
t-cnt. and any background that may be of interest for tin- purpose of
I he record.
STATEMENT OF R C. FULBRIGHT, HOUSTON. TEX., GENERAL
  COUNSEL FOR THE SOUTHERN FINE ASSOCIATION. AMERICAN
  COTTON SHIPPERS' ASSOCIATION. AND VARIOUS INDIVIDUAL
  CONCERNS
   Mr. FrtnmonT. Mr. Chairman and gentlemen of the committee,
my name is R. C. Fulbright, I reside at Houston. Tex. I ant an
attorney- and have been representing the cotton, lumber, and other
agricultural interests largely with re,sj>cct to rate and traffic problems
and commerce problem.- for more than 2o years, I appear here in mv
capacity as general counsel for the Southern Pine Association, winch
is the southern lumber industry, a large part of which is in Texas, by
the wav: f«r the American Cotton Snippers' Association, for whom
Mr. AV)iii<- apiM-nrod lx-fi>r«* vour committee heretofore; ami for vari-
ous individual concerns, such as, for example, thi> Standanl Rice Co..
which is the largest exporter of rice in the Uni'tod'States.
   I am a member of the law firm of Fulbright, Crooker A: Freeman.
This firm represents the largest cotton concern there is in the world—
Anderson. Clayton & Co. Thai concern, and i>erlmp> one other
concern, coujd use full-cnrgo bouts, could «'harter their own Iniats
mill fhip their own cotton, and would derive a distinct advantage if
this legislation should bo enacted and the policy which is therein
provided were, carried out. But I am authorized to state for that
firm ilint they do not ask anv .such advantage and do not think that
it would be in the interest of" the cotton industry as a whole.
   The CIIAIKMAN. I think they also entered n protest.
   Mr. Fi'UiKHiiiT. Thev entered a protest. I know, with nvpeet to
tlif KHK( limn water hill, ajuMlipy may have entered a protest in
regain !<• this bill: but if so, it did not come through my hands.
   I HIII not ^'oing to repeal what has been put in before your hon-
orable committee, hut tliore are two or three things that I should like
to imike clear which I fe.ir are not clear in your record as it has
  In the first plai-e, our interests all favor a direct subsidy. We
fuvor the general purpose behind this bill.
                     MERCHANT MARINE ACT, 1935                            571

    Our interests also believe that the administration of that subsidy,
 questions dealing with the operation of ships and such matters as
 that, are matters that are executive in character: that they are mat-
 ters which can, be and are properly performed by the executive
 branch of the Government, that the Department of Commerce or
 the Secretary of Commerce is the proper authority to handle those
 matters. The Department of Commerce is handling them today as
 the chairman of this committee well knows.
    Also I may say we favor the provision of this bill which would
constitute the Maritime Authority as the regulatory agency, and
 transfer to that Maritime Authority all of the numerous regulatory
 provisions in the several acts of Congress which heretofore have been
 n as^il and in which the Shipping Board has been given jurisdiction.
   ut we do not favor also conferring upon that same Authority tiie
 jurisdiction and the duty to carry out the executive provisions of
 the law.
    We Iwlieve it was upon that rock the old Shipping Board went to
 piftre. As shippers we found ourselves constantly at outs with the
Shipping Board because the Shipping Board was interested, at
 least to our minds, more in the operation of the ships from the
standpoint of ship operator than it was as the general representative
of the public, or an arbiter in our controversies as to rates.
    I may say that the Dim-tor of the Shipping Board Bureau in his
presentation before your committee expressed this general view : That
theoretically at least the regulatory functions should be divorced
from the executive functions. This bill does contain an option for
certain of that work to be done, and we believe that the hill should be
broadened, but I have not the. time here now to designate just how
I think sucU an amendment could be made. However, I should IK*
 iery plad to furnish s.uch k suggestion to the committee if I may b«
jtennittcd to do so later.
   The CHAIRMAN. The committee will bo very glad to have y»ur
suggestions along that line,
   Mr. FruuuoiiT. f pon that question I do not think there is any
disagreement of opinion on the pnrt of the administration, the Secre-
tary of Commerce, or so far as I know, any pnit of the administra-
tion and our shipper interests.
   Also I wisli to remind the committee that my particular State of
Texa.% H.S Senator Sheppard has said, is more ]>eculiarly dependent
upon foivign commerce than any State in the, Union. Ninety per-
cent of our cotton normally is sold in foreign market?* all over the
world. It moves as a seasonal commodity. Cottonseed moducts
under normal conditions find their market* all over the world, a Urge
part of them going to Europe. Our lumber finds markets in i^outh
America, the West Indies, and prior to the recent influx of Russian
lumUtr we sold a great deal of lumWr in Euroite. That has gone
down considerably hut there is still lumU-r sold and exjKirted to
Europe.
   Texas raise* rice and that rice primarily finds its markets in Latin-
American countries, but it also is exported to EurojRj and to thu
various nations of the world.
   T)iir~ ikM ~ I'n'tTwIfwn rrsourav~are-ihe -sttiT«'h'«i«l-f'»r. Urn world's _
market of petroleum products. Our refineries ship to every coun-
try on earth that Use* petroleum products. In short, all tlie l<at»ic
572                 MERCHANT     MAKJXE ACT, 1935

Industrie* of our State are dependent in large measure upon the
free movement of export commerce. I mention that to show the
great interest we have in it. And that is true to * greater or lesser
extent of the South as a whole.
   I want, respectfully, to direct the attention <if the committee to
the fact that in the message from the President which is set forth
in the report heretofore fifed bv your romiiiittee, the President did
not m-ommcnd the inclusion of additional regulatory jniwers under
this bill. lie stated that the quasi-legislaiivc duties* of the present
Shipping Board Bureau of the Department of Commerce should
be transferred for the present to the Interstate Commerce Commis-
sion— -
   The CHAIRMAN (interring). I am glad you placed the emphasis
on the words ** for the present."
   Mr. FLLUKIOHT. I notice that it w:i> not a definite und final deter-
mination. And I confidently believe that upon further study the
President will conclude that the Maritime Authority is the Getter
place to put tbat regulation, to leave it in an agency that can study
the peculiar problems of that matter.
   And I ma;: say that I have practiced In-fore the Interstate Com-
merce Commission for more than '25 years, ami I have no criticism
to make of that Commission except to say that it is dealing with
something here which is so essentially dffferent that it is not the
place for tin- regulations. And I do not think I need argue that
I>oint with Che chairman of thi* committee.
   Tlie President also says that purely administrative functions
should remain in the Department of Commerce. Therefore, the
President did not ;n his message suggest that additional or added
regulatory JHIWCIV Ixv-plnced in this bill.
   The Cii.uiiM.vx. You mean for the present i
   Mr. IM i.Kiuiiirr. Yes; that is correct.
   The Cu.MiiMrX. And that is where you placed the emphasis.
   Mr. FrijuiiciiT. Been us*-. Mr. Chairman. lwJ»r>t thing we need
to do is TO get this question «.f subsidy settle*!/ We should not.
clutter it up with this controversy which for years has gone on
between my friend over here representing the conference lines and
the agricultural >ind shipping interests of this country. It is an oKL
controversy, and you know that time after time they have lieen
v;> here ai.d tried to get this sort of legislation, and that lin.i- after
lime the commit 'ee luis decided they should not have it. We do yot
Ix-licve the committee should undertake to put in that highly_,con-
troversial siibjeci in connection with this subsidy subject, a sub-
ject \vLidi we should like to sec settled at this session of Congress
if MOSHllle.
   The CiiwiiMAN. I understand that you have a very positive bat-
tle with Mr Kastman on S. }(W.
   Mr. Ki i m;it;iiT. On bis l.ill S. NW-J I believe tin- shipping in-
tercets of HiU country are ulino-t litO |M>rccnt opposeil. as .-liowu
hy (lie hearings.
   The C u \ U I M . \ \ . Ai'il you would IK- no Mtcr oil" under liis bill
tlian under tlii- bill.
  Mr.... Iii'iAiuuuii^ MiV-CUiLU'iium^ llitav. K nu-jLuiilL^jJi'iiuiiid.lur -
regulation of rates and charge* in foreign commerce now. The
onh demund is from the groii|>>c|i:vM-iitcd by Mr. Hiipper. Hie
                               MKKCIIAXT "MARINK ACT. isss                                              573

   M>-r:ill<v1 "conference lines." That is the <»nly demand. They have
   drummed uj> a little support but they are few. and if you will look
  over tin- record of these hearings vim will find the «rreat body of
  opinion, and hen? is the representative sitting here of the National
   Industrial Traffic League, who appeared before you and testified
   fi>r the. shippers of the country, and their .irtion was almost
  iin.-iiiniioiis.
      I wish to direct the attention of the committee to ilie fact that
  nn ll»- Kith of May the Honorable Secretary of State addressed a
  Miiiiinnniaition. together with a resolution, to the C'hairmaii of the
  Committee on Interstate Commerce of the Senate.
      Tin* CHAIRMAN*. I also had tlie same letter
      Mr. FruutioiiT. Tliat letter rails attention to the fact that the
  L-Jrpiirtment uf State considers that any attempt by this (lovenmient
  to prescril»c mininitun rate* which might be-charged by foreign vc.—
  sel>o»i cargoes wliieh they carry la-tween American and foreign |wirts
  would fint In- in harmony with the basic principles in our rrcaty
 vtnieiiirc under which we haw jfrmitcd to foreign shipping the ri^'ht
 of free aivi-ss to mir |x»rts and.in return have obtained for our .ship-
 the n-rlit of free nm».<s to forcijr/1 ports.
     Tin- Cii.\ii»i.iN. 1 want you to U-ar in mind that the Secretary of
 Slate, when lie wn»te that letter, thought we \vere trying to «!o ex-
 actly what was proj>oM>il in the ecnle. to re^pilate not only exports
 but .'ilso import*.. He was under ^ misapprehciiHon in hi> major
 premisp when he wrote that letter.
     Mr. Kci.nicuiiiT. The jm-at Ixnly of our tonnage is exjiort toimajre
 which moves necessarily in foreign bottoms from the South. Tlie
 jin-at majority of the conference lines an- foreign lines. This let-
 ter lias not Ixvii made :i matter of record in your hearings, and I
 respect fully request that there IK- made as a part of my rtntomeiit the
 letti-i- and enclosure from the Secretary of State,
     The CHAIRMAN. It will he made a part of the record as you n-ijue.-t.
 and following it I will include in the record my reply.
    Mr. FrLHRtGilT. I will be very <rlad to have the Uiu-fit oj- that
  reply.
                                                                     r»KI'\BT>IKXT OK STNTt..
                                                                                       Mav /<•'. /.''•!••.
 Tin- Ilifimriilile ]'» i.itiN K W H I I I I R .
     Chun limn ruiiiiiii'l' i'ii lull mlillf Cum HI'i'<>.
                                                     I nitnl N/i//'*     Hi null.
      MY I'KAK SK\ \TI«K Wnm»3c: I inn liifuniu^l ilnii tin- \v.il.T-<.irrlcr l.ill
  ,S. Huf2' iinw )«»niliiiu tx'fcrc tlie ('uiiiiiiit'ii- mi Inii-rxluli- ('oinMi'riv miitiilim
 iin>\Miiiiv f»r t|n< nt:ill:itliiii liv tfoviTi.tnvliInl ;iiuiinrit> «f i                     l'iin-«. tunl
 i'li.-irei"« uf f-irriyii >li||iv In niir mniiiHrt.f niirl as ilii* iMiiiM illn^i/.i nflTfi'i dir
 fun-Jim r'-liilinli.o :iinl llic prolilrins n f i n i ^in.r< l:il )nilii-y wllli w h i i l i inv Pi-]<:irt-
 mi-Hi i-i (iiin'i'iiiisl. I ft "1 Hint I ••liniilil tint fjill tn niiiUi- i-lrar tin- I'M-t tli;it
 oiicli i<r<iv|vlniii. ;in-. in my mind. U|H'|I in ivriiiln -<>rliin > < uliji't'll'ins.
      I :iu mi'lriM.'iihl dm' t|M. rr^xiiiili'ti <>f MIC nilrv i-li;irk'|-'l liy M->M'!S jii mir
 •|i)im».i|f cnniiiicri-i IM:I> i.i i,."i-.sjir\. Inn I ihink li iui|>"rliiii< in ki>c|i i'!"irl\
 in n.iii'l llu- rxsfiihiil < l i » l l i M ' N U-i \MIII ili.it i-iiiiiiiifii i- \\lili-li Imlli II..-IIIM
 :iinl ijnl- \vllln.i i'.ii iiTi|inr\ .iinl llif furi'i'Jii i-'inmiiTu- vvhlrli ;il nin- f i l l or
 ll        '(n't rtitt-rx fi« .liin-illilL.ii uf iiinrdii-r C'lvcriiiin-iii.
      > ill IK>I fn'l Mm! :DI :itti'iii).t |i\ t]iN <;n\i.niiiii-iii In |in^iTiU' ininii nun
 riil«'> 'Aliirll IIIHV !«• i lull (.'ill liy fnri-lKil M^M-I- mi llii- rjireur < \\nii-li lin-y
 r-jrry U'lwii-n Anii-rlcnii .nul fcrolyn J M I I I X \\-i.iilil U- In liiinn.iny w i i h ilisit li:iRle
"V.i-iM.-JrV-i:: ^-.t:r ••!".~«j- <*'<•> ••iJiri^.jin.lcr jvliiuli- isx-.JuiV'e. _£i5inl
 >lii|i|>lliK l l l i - -1i ) B l i r of frii- ;|iri"*s I ir |MI|-|» ;llnl In i'fVllTll iillVi'
 i'iir ^lilns I In rlnlit uf Iri^- :iri-<-,s in forrl^n \mrt«.          tvrt:iliil> vm li
574                              MERCHANT MA-KINE ACT,

           lie ID <-"iidli-t wicli the Cewrally ««v|ilr«l praclirv» of Ilileriiutii'lul law.
 It in pvriimtit (n oliserve lUat when, U»M yeur. a code of fair <i..m|'<-titi"ii ("T
tbf Mhlppin:; iudustrr was iimlcr i-nnnldeKnlon. wblrli w< ulil have «uthorix»-d
tbf regulation of tlM* rates of fureien resscte witli res|>e«-t to tniflV- Iut» and
"Ut <tf our jtorti.. repivwfiliitiiitK were made by wveral foreign governments
 in tin- ««ffeet that xneli regain uu would IK- in viul:itl<m »f tn-uiv rich!*. OH
Miin-h 1\ I transmitted to von * <i>{'.v «f a note from the l>:mlsh Minister in
 Washington express!!!;: his toiveninient'rt objeciioiw. on similar grounds. to th>>
relevant provisions of the K.istimin water -orrier bills.
    A> Voa are douhlle.ss ::f:ir<-. tin- pr<>|xi>cil ei.de of f:iir <-»m|>eti(Ioii f.»r the
sliipliinj; iiiiluvtry refiTrn] to iilnivi- failiM to ret-eive tin- I'resiili-nlV :i|i|ir»ral.
tin! oi.'e of the prinel|ial odjt-t-tlons rnisnl Hc:iin-t it rel:ite<! to the ]ir"vi<ioiis
for rc-Kaliifion "f rat«-s in forejcii enroim-riv.
    In niv (.pinlou. a nn>st wri«rtj» dijci-tloii lo ;inv un(l:itiT:il attempt by thix
<;o\crniiienr to lut rntes in foreign eomiiieriv li<-s in the fm-t that tliis jif^-v-
dun- uoiilil udii HIM- more f'-rin of reMrieiimi to the eiit:in^Ie<l :ind <-onfliilin;
miss of n:itlounlNtie ro1rictioii>i from wliirli mir fm'el^ii trnde is "ilAVnnc
today. Tin- ini|iraetii-jiliility .if >-ueli <iuil:ilrr:il r<-.iil.itlnii cjin ri-j(lil> In-
ii|i|ir<i-iiiii-<l If one voiisIiliTii (lie ini|m>M- tlint woiilil rc«ult Jf aiiotlicr c«vern-
liient >h"i)M Jiil<>, I the Kiiur praciiiv. l>ut >ln>nld iin-^riN- rate> eoveriii^ its
I rude willi !]•• illfTcriim fruin tlioM- our ;inlli< ri:icv pn-stTilxfl for the very
>:inif tnide. It N fiiixl.-iniental tlmt .in\ nn'flinl of coiitrol or staliillzjition
of slii|i|iine rules, fares. IIIM! eharce* in forcien comnierei* nniM. if it is to
operate sati-ifHi-diril.'. •*' rormuhitiil with due n.i:inl in the fact that the
• :irr\inu of our foreign trndi* ttike> jil.-ie** in |i:irl on tin.- lii^h seas • ,nl in
part \vliliin the jnriMlicllmi of forolcn c<>rerniiieiit<.
   The ]>' • ? • < < ! • ('oinniitlii' on r<>inincreial I'oll'.v lui- :ido|ite«l. ;HK] re<inesteil
me to (r.ii.-n ,i • • you. a resolution on ttiK Milje<-t which lias my full rn,.i-nr-
ri-iiet*. mid win' li 1 am nerordlnu'ly wilding to you us :m o:u-losure to tliis
letter. I tio|n iluit tin- Commillee on Interstate ('(iiiiiiUTce will IK- p»«l
eliouch In tsi\i             -ulenilimi to the reiiinrks I hn\e ex|»ret~scd in tlie fore.

          Slnit-ri>l.v »"iir-.
                                                                                                        Ilt'u.

                  Aimrrm in Tilt rafx-fnvi. 4-ojuiiTrra nx IXIMUERCUI, pourv. MAY
                                        in. in'..'-
    'l*hc ^xei-utive roiiuiiittvc on ('oiiiinerc-inl I'olloy, hnvi;ic untttl the provisions
in the ireinllii-' s)il]i-subsidy bills (II. 1C. "til ami 8. li%82l :nn| iilso in the
K:istm:iii wnter-cirrier reuuiatiiHi iiiiis »H. II. 53T!> mill S. ](!32i. KniniiiiK
iiinlinrlly tn the K'^leral Go\eriii:'<-iit to n^nlate rates, faros, and r)iiir^rr.< of
           shifts with n-siMi't to trattii; Into and out of jmrls of the Culled States,
           to ejpresi the view of the roinniiHee ilnit these provisions, if eimctfd
iiiln law. will |>rott> injurious (o Ainerlcin fnreinn trade, will In- certain
to eiiorinl'T i.nt\i- illlltmllii^ of eiifori-euieiik, mid will !H> :in lni|M><liniiiit to
ilie niainieiinfi-e of friendly commercial -elutioiiK with other lunrilim tin-
irli-...
    With revjufi t" the effect uimn our foreign mule, the couinilttee is of the
opinion that e^iiilill-lnncm of minimum rates, fures. nml i-lmrees by national
niilhiirlt.v. Hiul the rlirlillly of rule itrmiure In the cariyluK of our foreign
irjule thai will reviilt. will definitely liaiidlfHp our ev|Hiii mule In roin|>eilnu
iilirtmil \\ith similar KIHH|X liroiiKln into foreign market- frmu i-iMintries
vliirll do not subject forelKll shjppiiiK In Ml'li rate reRtllations. Ill lhl> iniitter
it Is c^seiilinl to hear III mind (he fl|lidiibi<iilal ilistinrlioii ^lelueen rale n-Jllln
inn wllliin mir imn iMiuii'lurles or fu intercniiKial ?liii»|>int by siii h it tunly
;i» tlie Intervale Coiniin ! > < • ('omnilwloii and such U'Killnllon »t, Hpplled to
iiiiernniliiiinl tnule.
    \\illi res|HK'l |o (hi* effect u|mn our ilileriniMonal relalNilis. ll,e iiiiiilnillee
ilcvirci- lo stress the I'DI-I ihui such unilateral ussuinpiimi of aiiihorliy over
Inreiun »hl|»|>liii.' will IK- eoiilrary to the necopieil pracllcex of iiiti-riiatlonal
l:iw mid in eoiiHIet wlih ilm*- pruvisloiiK in mir treallei. inmrniiievliii: In return
liir Die rluhl of fret- nri»» of foreign Hlilppllie lo Ainerli'iili iHirls. free IIIVINS
.r..»t—^-<n..yi.*MT>-*|*M.» i*. *>-«.» -f— .-.-i^*   T ••***•     "" !^^
                                                                -M ' - ' '   i'VV!!   1 ir"!!^!*" !I-    r ': t! l"
                                                                                                        l Ti ! i ^ l

vlnlHiioii of treaties were tnvolvitl. sued iirlilirary Hi>siiiiiption of regulator;
|»,M,.|S ,,ver the rales eharseil hy fureltn VI<SM-|N wollbl lie almost eertalli
                               Mfcl:< 1UST MAUIXE ACT.

  TO Irfi-J I" retaliatory men sure* in 'i'r*-U:n omnirUs against ilw suiji> aii'i
  luniiirt-p*- of the 1'nited Stales. T" (lie initial hardens ujk»n »ur niiiiUM-nt?
  u«,alil llnrefnrM IK- :i«]i|«l !!>••>•• arMim from *iH-li retaliation: ami in the
  (in:ii outi-iKiM- i"-lli Anxriitin Mliiniing a'i'l American foreljni tra-N-. UJKIU
  wli|i-li tin- |ir"!>|wTit.v of «mr »lii|>piiiK ilcjHiKN. instead »f brine .assisted. would
                                  .
     (Al Hiis i»iint »ill IH> iiriiiied Hie re|.lr <>f Chairman <\.jN-Iauil in tin-
   -J?«T:>
     The CHAIRMAN. Y«>» may j>r«M-e€-o! with your Matt-menu Mr.

     Mr. Fi u-.KK.iiT. I \vi*I> als-o to <-nll to the attention of tlie i-oin-
 miUee t'ie fact th:it uiulcr <lnte of May 13. 1W4. the Hoin.rahlf
 Cliark-r. Kvans Hu^lu^. ilion Svri-lary «>f Statv. atliln^MMl a letter
 In Senator I^Kl^t-. tlu-n Cliairnraii of the Senate Gmiinittee on Fur-
 ••i«ni K4-l:ai<tn-. wherein lit1 express*-"! views whicli are alnxM i«lent-
 ii-iil with tlioH- vd forth in (In- n-rciit <-<'iiiniiiiiic:iti<'ti frmn the
 preM-nt Svrt'tnry «>f Stnl<-. Ami with the j>eriiii«.sion of the <-ha!r-
 111:111 of tin- uunmittee I >lioii] ( | like ut this- tiine to tile that letter
 from the I'ormer &-«Tetary of Slate, tin- Honorable Charles Evans
 Hiifrhe.-.
     The CH.VRMAN. It \\i" Ite made « part of the record.
        If Iln- Tti'ln! Sluli - iv in linvi 1 ii> |ir<i)HT phiii- ;i> :i iiiiiritiim* ]xi»i-r ni»l Its
 v.-^-i^ iir>- i" <-iiii-r ilu- i«iri> i.f tin- \\s.ild. It iniii-i in-ixt II|HIII fnxiloin frmn
 ill- riniiniilinir. iii vi1(.|i \ ,,*<•. li> tin- rcsixi'tivr xixcn-i^iis in reFtitinn t<> lln-ir
  I.HI, vi-oi-l' Ii'i'W i~ t i n - t'liiti-il Siati->* t.> ul'iniii vm-Ji fni'dnni fruin dlv
  iTlii'iiiiiili'ii^': 1: i- Niiil tliat It m:i> rctullatv: Imt. in this sense, ri-liilintion
  i-. nijh :< inraiiv TI> ;ii: del. iiinl lln- mil i"- 1" ••htiiiii tin- ilesiiril fn-^iloMi frmn
 • !M nini f i:iti"li. Tin- wnj !<• n»«-uri- tlii- fri-"il..rn Is liv :i^rccinriil. nnil. nf ii»nrm«,
  v\li:il (In- I'liiltil Sl.iiv. ;i-k« il Iini^l jiv.-. Tim-- \v<- liiivr. :i-- a n:itnr:i) r.-Milr.
 t l i > lii^t<iri'- iiinvixioii- ni' inir • niiinnTi-ial lri-:iiii-> » < l h rc-im-i i.. ni'i|>rm-al
 ii:iii"ii:il irratir.i-ni. prnvi^jxiiv nf Mii>. \y\*- hnvr IHI-HIIH- •••iiiiuuMi in :unl
 :ip|N':ir in 'lie irmtie- nf l>nirlic;ill\ all liMlimi-. • • « Killier «i- HIV In
 liuvf a (Kilii-v <>f iliMTiiiiiniiiinii ur a )Milii\\ uf uliiiiiniim inniniiiily from ill>-
 iTiliiiiiatiniio. H ih, liiii-T |H.lu-\ i- ailui'liil, tln-n «f :i<liiv\i' < nr |iu,-|>"~i- In
 -.rriiilni: a^'it ini'iilx l>\ \\lnrli Sfiili-i will lint ill-rrimlli:i(e :u':iili>l il-.
        I »li.inli| li.inlU Miiiik il ini'i".-.arj t<> nrciii1 ll»- i|»i«-»ti«>n whclher a T'lllry -
 •if ill>.< i iniiii.-iiioiix. ;iv :MI I-IK| In ItM'lf \\nnlil IK- In mir luterevt. fur our lii^inrv
  uf>;il(l -rii» Miilirii-Miv in ..IKIW tliiii it \iniiiil iinl. I'!M ri:iiii.n:!iiii:. in !':^»r <>f
 mir oun \i-><fl- M{|| ivrt:iinl\ nriHliiii- rt-iiilialimi li> furrimi -lali's \\lu^.
 liiiiiiic'f N :nlviTMl\ nfTiH-tuI l>> (lie AniiTlcsm dlM-riinlinilory ui'tlon If we
 illi|MiM- ilistTlniillliliiiy li'llllll^'r i'I i II run illllii-. tlicv «fll IM- |||||H>MI| li\ :»rri;ftl
 |H>\MT» :ipiili>-l mir vi-vM'K Tin- rfTn I nf --iirli rdallnlnrv inrn-iiii-v w>>ii|il
 |ip>li:ilil> IH- iLiil if A n u r i < : i n slii|r. i-niiiiiii; from aiiriiail i-ntiTi-il Aiin-ri<-;iii
 |Miri^ \ \ i i l i full ratuix-*. ilicj wmilil go Iwii-k i*in|>t}. An.\ alli-inpi li> ( 1 «niu'n->»
 I" alli-viaii- tlit- vitiiininii |,\ li-xvriiln^ i-liiiiut-x fur lriin>]Hir(atli>n <-<HI!I| IM-
 ini-t liy like action on tlie l>:irt nf (lie foreign xtuto (<> whl'-ii cx|>,irt« fmin the
 I'nliiil Siati->. UITC (li"-(jii''i| A luillf.v <if <llM-rimin:ili»M ami n-i:ilinii"ii. an mi
 • •ml In ItseU. ti-oiiM !K> n [NI||I-.\ f;i!;il to our InK-r^l lioi niii.v in llic liiuhext
 il'-uicc cinliiirni'^iiii: <-n lar ;iv mir >lil|i|ilii^ inirreKls -ire i-nini-riii-l. IMII lia\in-
 I.J|irni|l|i Is III re-rllllM-lit Illl'l ill «ill Mini ill the i-liriillrilgclllelll nf iillier i-lTnrl-
 In irt^ile mir trinl:- v. luili ttiiillil niiiki- il- ii;i> i|earl\ fur mir i \i"-riiii.'iil . A
 l«illi-> nf <llMTiniin:itl<i|i vlul n-laliiitlun. nm a> an i;iii| In ilM-lf. Iinl iiicri-l\ in
 uifiiriT |in>|ier n-i'jinl fur mir n«n inii-ri--io h.v fni-l *; n« frmn •1lM-riiii,nHii>nio
 ;ilirn:nl \\niilil llnil il-- iiini ai lili-.eil In ;!>:r'i-im n!» -.iirli j|s ( I n - in'inlinu lri-nt\
 \ \ i l l i (fiTiniiii\ ami nilii i UiMin-- nf liki- lin|«iri, nmler \vhlrli iliM-riiiiiiiiiilni:K
 \\MII|I| he |iii|""-*lliii-

    1'h- aliiii-il iiiinei 1 nl > n | | i i i < .il iiiiliMinil liealliii-nl \\illi (In- ili-»i^li nf |N-
 nilllliik' illM|-iiiilniili<r\ iniiiiii^c nii'l raiuo ilniiis fH\nralile In Anieriran -lii|1>ini:
-a-:::!--1- i-!srt-il!»- J—»I«.I«JIH'-. ..f Ji-liliu-o; ^irlfu .in...\vlili-li nairJ'-jl. »;".i|l(|_i;i.||n«
 lelirinal ami t i n - very inlere«l>- MillKlK I" IK- U'liellliil wmifil IH> jiii
 TII Mt-k -ni'li n »in iik MI mil In )(»fli un|||i] set-in to IN- a i|i-«|<>ni(<-
 576                          M E R C H A N T M A R I N E ACT, I»3.'i

  If |« believed (hit Aiiwrlrnn >lil|>i<lnK will pri»|ier fur iw»re greully liy • |«ili<y
  whlcli ImMirvK fur It Ilin/u^li np|irii|irlni<- \Mrn<ttb>\\:>\ *\i\ fwi\\t> luimiiiilfy
  fruin
    Tin- CUAIHMAK. Yon may continue, Mr.
    Mr. JM uiKN.HT. Now. Mr. nmirinun, I wirf: also t/> direct (he
 attention of ihp committee l<; I!IP furl timt when tin* Director of tlw
 Shipping Hoard Iliirejn appeared In-fore tin* comniitipe lie i|j<I not
 appear as an active advocalp of the \wyn*fil re^nlutory |x>wr>> thul
 arc conferred under lliis bill. He did not oppose lliein but lie llimle
             i;!. it* shown HI puge ',->'.) <if (lie r.vord of your I
     In (iii-J, wi- ure MjKgiwlluir llinl |>r»l>iilil> (lie ln>> wilnfjun, »« fomillln'iK un-
 rlgli; HOW. w/iiil'l lii' i!u- iriiiicfer i» (lie Ailllii.rily ui (Ids llnir n( a Ilinlle*!
 Mi.1 <>( fiiiirrlinih. |irlii<l|Mill)- llic inliiilnlhlriidiiii i if tin- r'-ituliilory imui-tv, ihe
         illlll III'' ItoVl'IIIIIIflll.

   I M i.-ll ill-') ill dlre.'l Ihe iiltelilioll of the < > nnil,iittee to tile ti'slilllollV
 of tile diclillf?lli!>licd coi|||i.p| for (lie conference lilie.s Mr. HOW-OP H.
, HI||||IIT. » Very illile HI id very ex<-el|enl p'lltlelililll. to be found Ut
jmj;:' ll'M uf Vtinr jinnl«'d |iroceedin^r- wliere be imide it very clear I lint
 life Utfdble iliey b.-irl wa> lllill t,lie >'o|iferences \\oiild blow up Ixviinse
 Milne ||o||corifi-reii'-e line would |lllbli.-ll lower rntis illld then Mime of
 llie weaker line* Aoiild in-f excited ;I|MHI( it. and tbni the solution of
 thi li'iiilili- uiiul.l IN (<) Imve lixeil rdle.s. n repihilion of the rute> in
             ilflr li'iide iiiuJ Imve nil (lie lH):it> in il. \}*> ulim lir wn-
       l the ((notion if il wu.- (ml » fact thul it was llie foreign sieiini-
        tli il Mere niiikii)^' the (rouble IIP replied:
        illllli-iilly \\i- li.ivr, Sriiiil.u. l» fr- in (lir Miirx wiikli I Ililnk j.n> ni'^H\
       i mi lino
     \\'i ic>|n'cl fully ^nbinil lint thr iiroviNJoii;- of ||i<> bill M-t forlb on
 pti(.v- '.»;( to i'.'i. MI >ub|iiini^ii!i|'lK '2. ;). mid 4 of M-elion T<'|, an- 1..,, in
 the public intereM, that (hey will promote inoiiopoly by the confer* .ice
 line-, -md ^ill deMroy I're'ed.iiu of competition upon the liipli .M-a.-.
 which freedom of competition We believe is the nio.-t villllllble HcsJ't
 the Anieriran export and import trails can Imve nl the preM>nl lime.
 \V>-(ire inivin^^reii! iiiliii'iiii\ tu miiininin our foreign commerce.
     Al"'», **• liiiilie ih.'^ •.liieolijpetioh to the rebate proviximi which \\i\*
 mentioned by iln- M-nior Sennlor from Te\ii.x. Senator Khejipard. in
        remark^ nl the oHMiinjr of today'* henrin^. >•<•( forth in section
  HIM; and veciinn 1100, whicb nrsild confer upon (lie Authority (be
 lij-Li 'to iis4> (he fund' of the Aulhorii.t or of the (iovej'nmenl in iiffhl-
 iiifT -li)|- M>rvice. That wordinpr In^ IH-.-II cbnnp'd -li^liily but it Mil!
 iciu;ri]i* >o Iliiii (hat may IH done.
     Tlie CHAIIDIAN. In trade promoliou,
     Mr. Fi ijiiin.in. I'nrely MH a iniitltT of Hade |iromo;i<m VM> luivr no
 iibjeciion to it, Mi. ('h'liriiiiin. hul the .M>ciion ih not MI re.-lncled. I
 Hi>ll iiNn |o-lnle lliiil (here ale IMHIIV doinestii' lilies illlll I'llll iire^MI-
 lur servicex (lull ure mil ip ill ..... mfei Mice. This is not foreign prop-
 Hgiindii. Tlii'Ke three ^rciil farm oii/anmilion» that have jiinte.sled
 (lli> Mil'l of le^islillioli before llie Ki'lmlc ('.Hiilllillee on Flllel'slille
  CoimiK'ive \\jn-ji it \\i\~ lioldim.' heiirino '"' '!"' Kirlman hill, mid
  wll»>e h(aleiin<lil> were li|rd l|c|c II!MI before your ^'omiliiKee. .•-ij.'lied
  li\ ivjin M-iiliiln«'h uf all of (hem they Ini.im.' in.il hin^f In do with
. foivii/ii liliet.. They BPIV not iiibtiquli'i'l bv foreign lii.es: 1 kmtw llie ^ .
          and luiuTwi jnleresla were not.                             ' -', "
                          MKKCIUXT MARINE ACT, 1 9 3 5                                      577

   Xof only (hat. but * rtceni decision of the Wiiitpinp Hoard Bureau.
ur re|j«rt from that Bureau. »hou> that i>f (he varioui-confcrcii"' lines
(here were? over 70 forciffli-fliir lines anil some rfti American confer-
ence ii lies (hit a.p{M'«red in support «f the eonferi-ni t- rate* and prac-
tice
  Now, (his ic roujrhly the pro|K>rlion. tiiat more tliiin tlnt'c-fo rtli-
of Kie coiifcrefM'i- Ji/jcs" nre foreijjfl-flajf line*. nn<l (hey of^oiirM-. a*
Mr. Huppr pointed out. have strongly siip|>orted thi> chawler of
legislation,
      Ho far a* the rebate provision of the hijl is- oin<vrned I may say
thai our cotton t-lii|)|MT.- do not U'licvc. aiul our lilnilxT ^l)i|i|»iTs do
not U'lii-n1. th'Tf nn-miy n>l>a<^ l>ein^ practin'd in our trudc* tinluv,
 If tin1}' an> tln-y are .so ncjrliVil'l'' tliut (hey do not iiiftm-nct- u Mib
ctunlial movement of tin- ••"tniiH-rci'. and tlmt »|>plie> to id I tlif lim---.
We therefore do not m*> the necfc-*ilv for reb:iU* U'trixlation.
       In (liD Transatlantic Associated Freight Conference there arc 4o
foreign conference lini^. and 12 Ainerieun confen>nce line*. In the
South African trade there are 5 foreign conference lim* and I
 Aiii<-f iciiu conference line. There are ulso iim-.s plying Ix-twci-n
hind and South Afriea, wiiuc of them U-iiifr the ^anie line^, a
iniiiiy more bailing hein^ from England.
       Now, we Imve (he world market to meet. The trump >hip> (hat
liav" lM*en talked nhoiit so much itre. necessarily under exiMinj.' con-
ditions. coiifini'i) to veK-i-Is- that are con*tn"""fl aiul dix'iimented un-
der foivi^n Hn(;i-. The only »iil*Hdy we have hud as you '•'"•'.w i»
the |H»(nl hiil»idv. under which you had to have a 'regular iine.
I'lile--, there is some provij-iuh for siih«idv tliat would allow irregular
lii:e^. tramp lint-h, to {ret boinc heiiefit of it, we are piin^ to eonlinuc
to I I H V O the tramp M>r\ ice in foreign lines priinurily.
      Now. theru ur         niinilx-r of lines that an- irregular, t)>ut are not
<-oiifiTciicc lines hut they do operate re^uhir M>rvices I should say
instead of irrefriHur service*. We have quite a few of these in the
( j i i l f service. For instance, (here is the (iidf State Steamship Co..
with headquarter* at Houston, my home town; and also the Ktato
Marine Co. at the same nluce. Also o|H-ratinur out of the (iiilf i>
the I'ap'-I/Hote Co. of New Orleans, the (loiidraini Line; and then
the Silver Line ji|M-ra(<'s iu,,)confcrence fr«ni the (Jiilf to South
Africii. iilllmii^li I Ix-l.i «e it is a nii'iiilx'r r ',M>IIIC conferences in
nlher M-r\ ice,-. We have the Norton-Little LJ,..', (he Keanloii-Siiiilli
I,inr, tin- American-South African I/me. which operate on confer-
ence < . nf Neu York and nonconference from the Uulf. Now, I
inn p\ IMK you (he Aniei-icaii lines (hat niv enpi^e.l in this M-rviee,
      In ai('lilioi) t-o (hem (here are irregular herviceM. pure tramps (hut
are (he hounds of the sen. that j.ro wherever eaiyo i.* alliwil. And
w i t h w'llMUlill coimi)odi(ie> like we liuve from (he (iiilf. whirl) will
not -iistain regular line operations (o a siiliKtantiHl decree (hnni^li
mil (In- yeur, it is almost neccii»arv lhal we have available I'.ii'
                        and t h ) » traniji coin|>e(ilion. Iie»ii|e,s lliev are wlml
          the competitive market, I think it i» (M-rfedly olivious \«.n
         i II x one M'| of rates to 111 all >(eaiiiship 'ines compel in^ I'm
i-j.,^^..}^. \,,u — I *4uu jiuihuiU- _UiuL ji-iiaii! jdiL'ii . A'yij. JIT'!, j !i"i ! i.n^._^ii h
       is
I in- liasjc cominodilie.- s                          e
                              .- such as we produce in the Hoiiili and
      n- CIUIKMAK. Mr. Fulliriirht. are you under (lie impression thi»
     uoi prohibit tramp »hip* from ojM-i'atinc^
     uoiih!
578     ,             MKWH-ANT M A K I N K ACT, I!M5
  :
    Mr, KriJWKiiiT. I am under the distinct impression that through
 I lie rebate provision and through the aiitliority t/> fix maximum HIM!
 minimum rite* in foreign trade, the conference lines will ohinin what
 would amount to n monopoly of the lixed rule.-. It will destroy the
 frw roinjwtitiofi that has Int'ii the !>one of contention for 10 rears in
 various conference that have bit-it held up lien*, and so long us the
 re«/ulatory Authority is also charged with executive duties. I am
saying if 'there are subsidies provided there is going to be the natural
tendency to *upj>ort the conference line.*.
     To ,.u mind it is obvious that an irregular line eoul.l not ho|N» i<>
get business at the same rates as a conference line. We ran up
against that. Mr. Chairman and gentlemen of the committee, when
w*. Merc dealing with the codes. I hod something to /Jo with some
industries thut weie illi'ier those codes. We Mould take, for iiict:mce,
a lumlxT company that had n Urge organization nnd was nationulh
advertised, and WHS well known over the fount ry ami the people
kn<'" the name of its product. it had a distinct advantage over the
little fellow who hud no such organization, wits not nationally :ni\;er-
(i»4*d. and <• !X*MI priMluct was not so well known.
     In ihe matter of gasoline stations we found the same ditticulty.
The Standard Oil group, the Texas Co.. und such as those, that were
nationally advertised were in a |>o.-itioii where people would drive
iij) tit Nations and get their gas in prefen-iH-e to some ii)de)M>iidenr
if they hud to pay j lie s-ame price.
     There mu>r IN* some diflferenlinl ;> ojil'-i i» give tlie little fellow
a xlioi H( it. We helieve the tend< ii \ • . , n- hi)! i* jo do (he very
thing -
     The CHAIRMAN (iiil.Tponing). Thai is a preiix general condeimiu-
lion of the public.
     Mr. Fi'MUiKiiiT (loiitiniiing). That wan nrgued against in tho
admin 'ration of the codes, namely, that the little fellow did nol
get iin equal shot nt the business. Furthermore, we iK-lievc (hut il
(lii> Congress is going to conxider going into n policy of adilitioual
regulation of either coast wist- or foreign Dipping, it should he taken
up mid thoi'oiighly gone into rnllier than to be tied onto a bill li'>
thin which we should like tit see jiill through ill this session of (he
Congress us to its principal provisions.
    Tlicse tramp lines also bring in fertili/er luateiinl- and other raw
liriHliicis. imd mamifactiited pro.liid- to MIIIH- i-Ment in our country.
Ill I lie Smith.
    The <'n MUM \\. Of course they are not denied l>\ (his hill.
     Mr l-Yi iiUHiiri. Mr. Chairman. \ve iiisl cann»i ngree (hat thut
would IN- true under this hill IH-CIIM-C both irgular and irregular lines
in our opinion niv going io !H> forced into the cunferi -nee- as a nere>-
xiiry miiKi'i'. And (hen. fiirtheriiioiv. (he |iro\i>ioii of niithni'iiv to
fix-;       --
  The Cii.MHMiN (interposing). Mr. Kiilbiight. imr-lon me ri^hi
there for a mmuenl : You are milking a stiuiig argnim-m it- n-gnrds
exports, hill when vmi utleiiipt to bring in iiij|>or(- \n\\ are on -lii fl-
ing Minds |N-CIIIIS«> (In iv is nothing in (his bill. I think, tlml ha- U ,i|o

  Mr. !• i i.iiuniiii. Of I-OIII'M> (In- H'ction I refer to i- to presi-riU>
foreign (rude. And I may >a\, Senutor ('"pelainl. that »ur interests
are niiich more in export traffic (linn in iin|>iii'( trathV.
   ._ '              MERCHANT MABINK ACT, J » 3 5                        579

    Tlie CHAIKMAX, Well, you are nuking a good argument for that.
     Mr. I'i UUOGHT. And we. <lo not believe that minimum or maximum
 rate-making power should be conferred upon any Federal agency at
 tlie present time with n^jxrt to vestals engaged in foreign trade.
 Wt- do not N-C how you could do that with re.-peet to one without
 duing it with re»pwf to the other. We feel that the efforts should
 IK- directed towan) t-in-li i <n»|>orativc action among the nations as could
 I*' brought about.
    Certainly we are under very sewn- comj»eiition in (In* matter of the
 iii'M <>f our product- with other nut ions today in world markets,
 OMI cotton mid nut roltofi products ure highly eom|>etitive. The
 g*nn' in true •»> to rice. Tlio name is true us to lumber. Every com-
 modity whirl) we produce in the South and cxjwrt is meeting com-
 petition from other nations in the consuming markets of the world,
 ,md we cannot fix rates from our country without somebody in jolhei
 lountries taking advantage of it to the detriment of «>nr own com-
-iwice.
    That, Senator*, is uboul what I wished to say. 1 do want to point
 t!ii> mil. however: That in tln> former proceedings a representative
 nf tlir I'oojxTuiMe cotjon organization:] of the various Southern
 Slates, Mr. L. I). Estes, Mpjx-Hrod Iji-foiv your committee, and he
 filed with the committee a gencrjil slntcinent >igned liy the Americiin
 Fiirm Bureau Federal ion, the Xationnl (irangc, nn<| the Cooperative
 Council, protesting agniusl nny regulation of foreign rates, of for-
eign trade particularly, any action which might have a tendency in
 restrict or liam|>cr free c<>ni)X'tition of tramp ships in that trade,
 'Hi iii I know is nlill their |K>silion. Mr. Chester dray hud to go to
 Chicago and could not lx> here ihis niorning. I talked the mutter
over with Ins office, ami was authorized to state that is his position
 now.
    Mr. Fred Hivii.'kiiian js here, this morning. He *|>okc on tiii>
 vc ry subject. JM'forc the Committee on InlciMate Commerce of (he
 Senate with reaped to the j>rovisioiiK of (lie Euxtumu liill.
     Now. when you have »uch hroud public oppor-itioii n* t h a t , ainl
 it liu- IM i-ii a fniiiliimentiil opposition running through the year>,
 with (In- only proponents being the conference lines, us to which
 Jine> Mr. Hnpper frankly MIJS they would like *•> get everything
 fixed u) that they would 'have the tiite< uhxilutely lixed. and m:iKi>
 all line- come into the Mifeii-ngjs if they can. you can M-C how the
 niiitter ^tjinds. We know that i- nliat tlie conference lines arc after.
 and were after with the old Shipping Hoard,, and the seemed to
                            ping
 get from the old Shipping Hoard, and we had ronlrovciNies right
 in ( h i v very room with them.
     U'llli that filiation livfore you. ceriainly we feel (hat thi
 uouhl not want to trv to enact. IcgNatioii right now going into thai
 <iil>jei't, Imt raider tliut you should confine yuiirse|v<^ to the main
 matter :if hand which the* J'rc.sii|''iil M-I forth in hi- nichMige, niimely.
 (In- working out of this subsidy |)roblem. and the mere transfer of
 the existing regulatory duties 'to some regulatory iigeii'-y. such ux
 (he Maritime Authority contemplated in this bill.
  -J_tti»Ji-talhnnlt..ViMLf«»r A'oiij'.kiiui.coi^idcration and cimrtesj- ui
 my ippcaranw before you. I hat>penei| join- in Textiff                  ^
 had your f»rnicr licaringn ami could not, lie present .
580                   MKIiCHAKT MAHISE ACT, JJ»35

  Senator DONAHET. Do I understand that you are opposed to this
measure as i*?
  Mr, FCUUUGIIT. We are in favor of the measure as to the matter
of subsidy.
     Senator DoNAiucr. I mean the whole, bill.
     Mr. FtutKioHT. W<* »          ..<>' jbjeel inp to the pi? rticular provisions
  which we think undertake to put additional rcgidatorj authority
  over foreign and coastwise commerce in an agency of tlie Federal
 (iovcirunent .-it the present time, There arc nniwrous laws in effect
 today giving various regulatory authority to the old Shipping Hoard
 and which by Executive order were transferred to the Shipping
 Board Bureau. This hill would transfer all those to the new Mari-
 linii' Authority, and we tliink that is a good tiling mid favor it. Hut
  we do not l>elieve you should undertake it the same tiim> 0> enact leg-
  islation for which the conference line* have fought for years. The
 majority of them arc foreign lines. It it not just an -American
 proposition. And a largo niiinber of the jion, < • fi-rence lines are
 American li?K>M ton. It i» not a question of foreign interests And
 American interest*. The great American shipping intereolK are ai-
 inofit united in opiHwition to it.
     The CIIAIUM AN. Senator Donahey, I tJii'ik in a word, Mr, Ful-
 brifliiV objection is tt> giving power niiil aiitliority to make mini-
 mum rates,
    Mr. FuiJimujiT. Well, they have the jxiwer of KU*peiiM<>n then
 too, und that ih jutit MS vicious,
    The ('ii.uitMAX. \V«'II. (hut \Miiild IM- in connection with the >ame
 Ujing.
    Mr. FruiBKiin1, Then the rehnto provision i* very had. I do not
believu in logulmnj; rehntes, Tliun- ix no commcrciul necehsity for it
 that we cnit •-»''•. Tlie fighting-ship provision of course we have al-
 WH\V In'i'ii oppoM'd to. r.Miig American fiiii<N fur fighting hhijw.
    'i'lic CifAiiiMAN. Von spoke of your objection to the deferred re.-
h;itc, und ;;ai«l in your opinioir it wn> n»»t pnict-i""! !>;' foreign lim'«,
    Mr. FnjiKKiiiT. Not In any grcut extent.
    The ('IIAIKMAN. Hut it js pnietiivd. IK it not?
    Mr. Fi umiiiiiT. Of coiirKe. it i» ulwuy» diflieult to determine the
exit-lit to which relmting nni.v In- practiced in foreign comnierre. \Ve
miplit nndertuke to i\\ rate» in foreign commerce, and they still
could gel uroiind us when they got on the other side, TLii is <>ne of
(he practical difliciilti«»h. The'miinile vou undertake by coiniHiUion to
fix rules and prohibit rebates, you will encourage them, Tlie minute
yon attempt to give a conference Hue the right t<> make a rebate [
am referring to. Now. mind you. an indc|>cndcnt line, a trump, can-
liol make a rebate, hut (he conference line ha» the rebate legalized
ri(.'lit here. You muv ti\ in the foreign trade rnle> on both undei
this bill, but --
    Tlic Cu.-.iijMAv (interpoxing). The purpoM> of this hill is to Iniild
up an American nierchunl marine, aiul thiit is all the piif|»ose, is it
not f
    Mr. IMXHHHJIIT. Ves. >ir: aji'l the >-iib»ii|v provisioiic up|>ei)r to me.
to l» directed todiul end verv iippropriiitefy. nut ---
     - ' * ' - " " "                                 '       "             ~ " ~
provided for is an o|Miruling sul^i.ly. If we |MTinil foreign line* to
            u l m t will k< brought out pretty MKHI by 11 different plan, of
                          JIKKCHAST MAK1VE ACT, 1935                            581

 offering 10-p'rcent discount on any American rate offered, is that
 conducive to 'Jw building up of «n'American merchant marine?
    Mr. KrutNKjiiT. If the conditions of competition are Mich that
 thai line ''an afford to continue the policy of coin|>etinjrf of cutting
 lltow rates, ir<- believe that free competition wjJJ take, care of the.
 filiation ai'd give (he public the benefit of those rates.
    The CIIAIBMAN. Of cour>»> the rcMilt of that W'Hil«l !*• to itn-rcaw
 the operating MiU-idv. Therefore die 10-|>ercer<; reliatc or discount
 which you get would ni'-an to a<M <nt ttt I'ncJe JKMJ ih<- burden of
 the additional annum! of money neediil to operate our American
    Mr. FruiBiisiiT. Vi»: but Senator O'opcland. with that policv de-
 clHrwl on the part of our Government, the incentive to the fotvign
 line to cut H rate !>• largely remove*!. He know« he ]•* up against the
 hiib-iily iNilicy of thU country.
    The ( IIAIUMAK. Suppose you have two lines going out of any
 |H>rt. one American line and the other a foreign line, and siippox>
 the Aii'.erii-an line were to establish c rnte and then tlw foreign line
 wonlil advenise to your ex|M»rtere: We will give you a 10-percent
 discount <ui any rate offered bv the American line." Would that l>e
 conducive to the building uu of an American "'• reliant marmr?
    Mr. Vi i.HKUjjiT. It if conducive to fr«-e cr.inpctition. aii'l free «nu.
    The CJVAIHM'AN (interposing). Hut you have not atifft.-n-J my
 question.
    Mr. rn.uKHiiiT. T siy it ilepcm^ on the condition* of the trade.
 V»Y [i.i<! fi-< ri.n,|icti( K>ii when wt- liad n fm> movement of exiwrt
 coiniiii-rce. iiml we had then u.s many tnimp^ as we !<av.' now. Tliiic
 w:i-> no dilliciilty aU»ul it
    The CiiAiKMAX. JJut tliere I- a new oblig/ition orecled UJH>;I ibi-?
   Mr. I''l I.HIIHJIIT.   Yes.
   Tin- CHAIRMAN. If we are going to Kutaidizc the AineriiMir mer-
 chant mnruie, and then if we pciiii<r u foreign line !•.> coine into our
 inuilet mid make u deduction of 1U |>erceiit under our rate, that
 umiltl mem (hut ]Mior old Uncle S-.im would have (o pay oiu tliat

      Mr. JM I.IIKIKIIT. I niny i-iiy that tliat i* c.varjly what )»<p|w;>cil in
  I'.'.'ii .11. ! l'>27. when, under the leadership of the Shipping! Hoiml
 ciiiif. ii'iicv riitc- \\crc otalili-hi'd at lixed rate>> on c«>lton >il ft) to
  7u rmiv> (u ilic Orient iiml :;» .*i() and (V) cents to Eiir<i)M-an pnrt>. MIK!
  (In- rniifefciH'e liiiij> uiiilerliid tueiu iiml broke down 2lu> rate, and if
  it luiil not hccii for that we would never liuve gotten thilt rate down.
  If it hud U-en left, the conference lines would have (-hurled ( h u t rate
 yci iiinf i( \\(.nli| liuve greatly li«m[xT<vl ilt<> c.\jx)rlu<i/;;i i>{ our
 < n| Inn,
      The C I I A I H M A N . I- there in.Uiun^ in thih hill (hut would |M'rniit
 the Maritime Authority (<> fix a speciiir rate on cotton/
      Mr. K» i.iiiiii.iir. Vi'i-. k ir: t«i th<- very provinion tliat it tihall have
  (h<- ri^rlil to imperil*' niinimuiirand maximum nten. And if it can
  preM'rilH* minimum and maximum ratifi and chnrgcK which may U-
• '-•'••j!««'«J. in. luL'iuinL_U'.u<lcj_L .<!«lt'l"l ^w1 why it cannot fix a rue
                                                                 r
  tlii-ivhy.                                                                  '~
       The'( 'n MUM AN. Hul I liink iJ' you will ruml over on the next page
    on will NT Mimdliinu clso.
           us-sfr— ITS
 582                   MERCHANT MAC1XC ArT.          1 i !'

        Mr. FfTuniGirr. Oil. for certain ihiiigx it !•* provided. If you fix
     the minimum of CO cents to *-hij> from a (»ulf |jort NIK! a maximum of
    65 wnl*. you have fixed the minimum. That i> all UM- ; is to it.
        The CUAIXMAX. flut'vfMt are forgetting th«* .situation for the mo-
     ment. Consider vomwU what vou an-, and I know you to I* an
     upstanding American citizen.. \\'f are attMiipting to build up an
    Ajiieriran merchant marine. J)o you Mieve as an American citizen
    fhat with what we have in mind vrv should (imiiit foreign slii^s to
    «nne in here and underi>id «»nr shipping?
       Mr. FL-UUDGHT. I certainly do. as contrasted with *uiuethin£ that
 'would make for mono|>oly. I helievl if Ann-rica caiiiiol cn^a^e in
    comiK'tition. on the tcrnts of competition with otlior nati<ms of the
    world, frit- competition: if wo cminot. with mir vasl ivsoiin-cs. enable
    our frhips to en^a^p in that free coni|»etitioii. we ought to <|iiit. N'o\v.
    if we can. hy cooiKTation with other nation-, arrive at a jxilicy by
    wliidi there mav be a general levelinjr up of rate* or -unietliin^ like
   that, that is n Jifferent pro|M>sition. Itnt. (o<Iay. we \\»\v thai com-
   petition and we tmiht meet it; nnd rertninly if f«nvi{rn nations will
   Mib^idi/^ and encoi)nt(re tlieir ,-hip^ or make it |><>»ilile for their
' £\i\\i< to hnul traflic chea|M*r tiinn Amerk-aii h<>ltom>. Ameriea either
   ha> to t-nloidixe her xhip* and let them ttay in the trade or <-l-e <he
   must jret out of the traffic. .Therefore I am for free ci)iii|K'titi<)ii
   wilji the siiliM'dy.
       The CIUIKMAN. The .'o^ic of your posiliou i» that if we needed
   to we iui<rht Ix-tler fn to the point of free S4'«> iW l!ie.-e export*.'.
       Mr. l-'ri-itirirjiiT. I realize that if there -hotild .-»me a day iiinoiifr
   the lotions as to how much each would .,iil>-idi?<j you would ultj-
   j/iufply roach the- vnni>liinp point of free. M-:IS. Tlicrefore I aj:reo
   with Sri retnry Hull tnat the pro]>er app' arli tu this matter is to
  coo|>er:ite with other nutions and preserve a pidi'-y (hat will not l>c
  destructive aiuoti^ the nations of the earth.
       The CHAIRMAN. We are not iinjxwinir upon foreign >hippin^ nny-
  tliinjrtlmt we are not inipo>inj,r upon American shi]ipin>r.
       Mr. KiiuiKKiiiT. Hut American Commerce ha- to swk foreign mar-
  kvts where foreign bottom*, from other cmintrii'- .ire diking (he smr.-
  coiniuoilities in coni|»ctition.
       The CIIAIIIJIAN. Ves: bid if we say we are goin^' to x-nd cotton
  to Knro|H> do not we PL.tiir.illy want it (41 go on an American >hip
  if \ve can have il go on an Ametican M\)'(
       Mr. Kri.imiiiiiT. (Vsrtainly.
      The CMAIIIMAN'. Alh! if it it demonstrated lliut a lower tale can
  l*e had. if it is demonRUiil<''3 1>V investigation by the Maritime! Au-
  thority that ii lower rule con IM* had. the minimum rate can be
  lowered.
       Mr. KrMiKiiiiiT. Certainly.
      The CIIUIIMAN. Hut if you create n xituution where you are going
 (o permit a Dnnihli shiji to advuktise, thut it will, under ;ill .•nviiiu-
 >tunc(s, lower the rule offered hy an American ,-liip hy 1<> |H>rcen(,
 is theiv no slreiigth or |Hiwcr or authority on the part of our (iov-
 ernnieiit to >.i«y we arc iiot going to IHTIIUI our American merchant
     iajdnt Ui_bc iWi^i!L'd_b.v_lhjd jHU'Li>Lj»JJU|M'LilionL
      Mr. I-'i i.iiiiiuji'r. Well, we might have to increase oiu siilisidy.
      The CIIAIIIMAN. That ix exacily it.
      Mr.
                    MIWCHAKT XAJtIKE ACT. 1932                         583

   The CHAIBMAX. So jou are willing. I take it. to have the Treasury
of the United State* give all the money necessary io order to eat,
cut, cut, to try to meet the foreign rate!
   Mr. FnjBiaHT. Provided you maintain free competition, and
provided further that YOU cannot pparh this denred fjtuation through
dealing with other nations through the Department of State and the
treaty-making power of the Government.        -
   Tlie CHAJKMAX. Senator Sbeppard. hare you any other witnesses?
  Senator SHETTAJU». Have you any others. Mr. Fulbright i
   Mr. Fruunr.HT. Mr. Brtnckiiian and Mr. Wagner are here and
may want to be heanl.
  The CUAIRMAV. All right.
   Mr. FfuiRioHT. But we do not want * monoj>oly created at th»*
expense of American trade which must wimjjete with foreign trade
in tht: various countries of the worM.          • -'--
   (Thereupon Mr. Fiilbright left the committee table )
  TV CHAIRMAN', We will now hear Mr. Bivnckman.
STATEfcEHT OF FREDERIC BBEKCKKAU, WASHIHQTOH REFBE-
  SEITATIVE OF THE IATIOIAL GRAHOE, WASHIVOTOV, D. C.
   Mr. BUKXCKMAX. Mr. Chairman, inv name js Km! Brenckman.
 I am tlie Washington representative of (he National (irangr.
   The CiiAWiiAS. And 3-011 are very weJcowp here.
   .\Ir. BBEXCKMAX. I tlunk yon.
   Tlie CIMIUMAX. Vi'ii may prom-<l to innke your Matement.
   Mr. BRENCKMAX. I knou* that then- uiv thox- \vlio hold that we
should let tliose nations curry our ocean conuiu'n-e that will do it
cheapest; but I am not in nwonl with tlio.-e who Ix-licve in that tlu--
orv, and neither is the National (irun^e.
    He had a very expensive -.jjirf disMxtrou^ Vswm in that connection
:tt the tin1*- of ilio NVnrld \V«r when the \ierinun shipN that had
!„ i-n i-urryihg our exjwrt ctiiniiii-rce were swept off the seas, and
when the English hhi|« were witli<lr.iwn for w«r pur posses, and thi'
prwluction of the- American farm-, was piled up in warehou.v- and
on Jocks and there v ;is no way of p-i ing it to market. As I recall
(he situation when that emergency "(IK at i'* hciaht. the price of
                a bushel c* wheat frcm liiilveston to Liverpiml rose to
                                                          erpi
   . a hiihliel, and the price of atrrvirt^ « bnlc of <v^ton bc(w<v>i]
tho* two ports went as high as $50 K bale.
   Since that time— —
   The CHAIRMAN (interposing). And during the coal strike ako.
   Mr. BRENCKMAX. Yes indeed. Since the iirodiu-er is the one
who has to pay the freight to get his product to tn.ukct tlni><- trenicii-
ilous freight fates nwehsarily <'aiue out of the imckeH of American
farmer*. When there was no otlicr way of getting hhip< than to
biiilil them we proceeded to build a maritime fleet at a ro-.t of $3.000.-
Odct.ootl, i>rohably about six times us much us it would have cost
us to hiiifd those'shi|>^ under normal condition^ And go noted and
disiiM rous an ex|>erience for (he- American ]>eople should not be
  I U'he. vn (hnt the United States as one of the greatest commercial
nation* of the world should Ituve iU own American merchant nmrine.
The National Orange Mipporteii the J(.iK'K-\Vlii(e bill in 1928 with
 584                  MEKCHAN'T MAKJNE ACT, 1935

    the idea tlmt we wantol to 'do something constructive to put the
   American merchant ourine oo a sound utd eudurin; basis. Arid
   we hare dune everything we could by war of using our influence to
                                                        :
   promote (lie American merchant maYine.*
       We: have been very miicli disturbed, lu.wever, dmiug tlie last year
   or two at the va/jous proposal* which have been advanced for rcgu-
   lating American shipping. For example, wiien the proponed code
:^5j the shipping industry came up for hearing we objected very
   strenuously to the idea that shipping rates should be fixed by that
   code authority.
      There was a provision iu (lie code for fixing minimum rate*. We
   objected to it very much ou the ground that theretofore in tlie mak-
   ing of rate!> (he sole pur|>orie was t<» protect the public against
   exoehhive rates and charges, and we stated that tlier- could be only
   one construction put on the proposal for fixing uiitiiniuin ratos and
   that was that the exiting rates might not be high enough and we.
   were therefore going to give authority under the code to make them
   higher.                                   W
      There was no difTi-ivntial jiroridcd \ i,the code. If minimum rates
  iiad been fixed it would necessarily hay icaiit that they would have
   Iteen fixed at a jxrim where the fust oci-ui.^iners < > fnild have carrie<l
   freight (o the other .side, and that would have meant that tik- .-low-
  going tramp steaniers would Imve been put out of commi.ss-ioir, Tlu-y
   would not have Ix-en alilc to get the business if they could lift render
  the service thnt thcx- txvan liners were in a tu»ition to render.
      We also objected to the provisions of the so-called " Kut-ifiujji
   water-carrier bill " when tin- licarings on thut bill were heard before
  the committees of House and Senate.
      In gcnernl U-nns, we ure in favor of the provisions of this bill,
  Init I mil not in fuvor of nil the provisions nnd am in entire accord
  with everything I Inn was said by Mr. FuJbriglit. Wo object to the
  idea of givin-r this Maritinu- Authority the right to fix rates and
  to et-tablif-h minimum rates.
      I bplicvc Uicrc i* only one \\a ( \ to have fuii and iva*t»nal)l»' rates
  and that is through open oomiM'tition. We see no reason why if this
  legislation should bu enacted thut thut provision of the bill should
  lie included in it. and we are opjMtsed to it. We hope if the legisla-
  tion propuM-d is enact<>d tlmt it will )M> eliminuted.
      There is nobody who ha^ a greater int«re>t in fair nnd ri-asoiuble
  legislation reg-inling foreign roiumera- than the Americun farmer,
  InTBUse in normal times approximately <i» percent uf all our exports
  are c,oni]H»Mul of agi'iculturul commoili(ii>». The cotton M'ctions of
  the coiintry 4iv very much interested in thnt idea in particular; and
 the wheat groww* and all other- who M'll their Miriuiu; commodities
 in f«»rcigu murkcl> an- likewise very much iiiterc.»(cd.
     So M'e an* hopeful (hat you will be able to enact some legislation
 here that will really help (lie American iiieivlnmt marine, that will
  put it on a sound l>a>is. put it on u busis tocoin[H>U! with the merchant
 marine of oilier cmintrie*. l>ut will take out (hi* provision that we
 U-lieve will be harmful to tlie American peoiile as a whole.
     The CIIAIHMAN. Majy- I ask you a «|ue.»tinii!
 —Mj^Hyv'V'*-11-'*—'AjjN-.^i'j .„'    ^^
  The C'lfAiNNA.v. lou ufe Vc/ry niiicTr Triu'roitcil in rm-~AmVncah "
fn finer f
                    MEBCHAXT MABTXT. ACT, J*35                     585

     Mr. BRCXCKXAK. Yes.
     The CHAIKM AX. Von have ]x>inted out that during tb« war we had
   certain conditions to deal with.
     Mr. BRCKCKXAX. I called your attention to the coal strike. You
   remember all the foreign vessels that were ««eJ to carry coal.
     TIi" CHAJRXAX. If it had not been for the ships we had in the
  American merchant marine, and under the Shipping Board, we
  would h»v* been up again* it,
     Mr. BREXCKMAX. TWe oertainlj would.
     Tlie CHAIUMAX. n other words, we hare to have the American
  merchant marine.
     Mr. BRKXCKMAX. We Jo.
     The CHAIKMAX. Do you realize that the great majority of our
  -hifx ("day are more than 13 years oldI
     Mr, BffexccirAX. I believe no.
     The CHAIRITAX. No babies are being born. Pretty soon we will
  not hire an}' American merchant marine, except for a few monopo-
  listic concerns. So we are agreed that we hare to hare the American
 merchant marine.
     Mr. BRKXUCXAX. Yes.
     The CHAIRMAN*. You and I agree, fully on that.
     Mr. BRKXCKMAX. Yes, *ir.
     Tlic CHAIRMAX. Will you tell me how it is» possible for us to hmld
 up the American merchant marine unless we have some method of
 preventing that deliberate cutting on the part of foreign Hues, and
 foreign ships below our prices) It n* onh > carrying cargoes that
 wo «nn have an American merchant marine. How can we do it<
 We haw -.«"t .done it in the past,
     Mr. liRRXCKMAN. When you speak of fixing minimum rates, how
 are fte going to prevent foreign ships from charging whatever mtes
 they pleased I do not underhand that. I am asking for infor-
 mation. ^ s'
     The CHAIRMAX. Very well. If you are asking for information,
 the Maritime Authority can look into the matter of competition, «nd
 the nm»%sity of rates out of Galveston. or some other (mint, and can
determine that in order to move those products and to make them
fallible :tl>road, the rate shouM :nt be higher than a certain point.
 Yi.ii would agref- to that. But if we are going to take out the bottom
.unl leave it bottomless, it would mean, then, that tramp ships and
 fnreijrh f.lnris would conic here and take that business, because no
nintter wlmt pri(v the American line might charge, the. foreign lino
 will £ct below it. Now. it will lie brought out by some of the testi-
mony that one of these great Danish lines hits a standing offer of a
 10-percent reduction under any American price offered. Can we
build np an American men-hunt marine on thnt basis? It cannot be
<low.
    Senator SHEITA-MX Mr. Chnirinnm nrt we huiliimg «.;fan Ameri-
can merchant marine, when three-fourths of thc^n ships tfwit get the
benefit of these conference rntes are foreign Khij^'J
    The Cn.tiNMAN. We are giving consideration to our o«:i ships.
    SenRtor SitxpfARn. I know; but why do we not build up an ar-
r H D ' w i t of our,i«ttJUAp,pJi'ing to our own ships? - '-'•"
          CII.MKMAN. Senat«»r, are vfo wiUiMg—— ~
586                 MEUl'UAST MAKIXE ACT. 1*35

   Senaior SiiEfiMRn. I am iu.-i asking for information. Why <lo
we call it an American merchant mirine. when three-fourths of the
ships getting the bewfit of this hill arc foreign ships?
   The CIIAUHAN. HOW are titty getting Uie benefit'.
   Senator SiiKrrAM). Are they not getting the right to enter into
the>e -onference arrangements?
   'flu- CHAIKUAN. Yes.
   ifr. WACNCR. And the minimum Rite* they want the Board to fix
apply to the foreign lines, which predominate in the conference.
   .Viulor SiiufAMt. Ye>.
   The CHAIRMAN. All right. Let u> take out the minimum rat*.
Tln-n where are we? It costs us more to operate American ships.
Ail (he testimony indicate that. It costs more to build an American
.-hip in our -hipyards. A ship that would cost $1.000.0U> in «i
American shipyard could be bujlt abr^tad for $600.000. It cost
materially more to operate our ships, bWAuse undtr Uie La FolletU-
Ails we have three watches; we have standards of wagi's: w have
>r:ii)dards of living conditions, air spaw, toilet faciiitir.-. quality of
food, ami x> foilh. Tlio testimony brought out in our hearings is
that it <-«Ms u- nunx- to do it. So that these ships can come. in.
Tin-re i> no <|iie>tiori about it. These ftvign ships can come in and
foi:i|N-te u illi u> in such a manner as alisolntely to put us off the map.
   Tin- only way I '"in see. if we are going to have an o|>eruting sub-
sidy. i> ju.-l to'go on and on indelinitelv. As the prices come down
and down. Vnrlc Sam will have to dig A* .per juid dtvjier in his
porkeU to maintain his MTYHV until, a- Mr. Fulbright says, you
reach the vaiii>hing ]Miiut after awhile. If wi> are going to build
up an Aim-rican incrchaut marine, anil if \M- are going to actually
have shi{». and make it an object to tlioM- slii|>s to operate, it mu>t
be done in Midi manner (hat they will not he knifed and ruined by
foreign coni]K-tition. because you can bring in .lajmiu-M- »hips, Chi-
neM1 slii|>s, or Ih'iijbh ship", which could be ojMTateil so nnn'li more
cheaply than ours. Unless we give our slii|» some degree of pro-
tei'tion*, w«». will not build i»p mi American mt-rdiant marine.
   Have you any other witnesses?
FUBTHER STATEMENT OF H. J. WAQNEB, CHAISMAN OCEAH,
  DTTEBCOASTAI, ABB COASTWISE TRANSPORTATION COM-
  MITTEE. DTDUSTRIAL TRAFFIC LEAGUE
   Mr. WAGM.H. Mr. Chairman ami gentlemen, I am chairman of
the <HVHII. inter<'ou>tul. and coastwise trans]H)rtntion cominittoe of
the National Industrial Traflic I>4>ague. I dp]x>aivd iN'fore the com-
mittee at the fin-l hearing. A> I Mated then, this organization is
Nation-wide, and represents shipjH-i>. and conimeroiiil organi/.ations
from one »-nil of this country to the other. At oi r last meeting in
Cincinnati 've went on ni-ord. as we have previously, year in and
year out, ju op;M*silion to this proposed minimum-rau- jiower which
you have incorporated in every provi>ion of your bill.
   Si-iator Siici'p.uui. Will you touch on thi-'l«i-1 l»oiiit we were di«-
ciis&ing before yon f i n i s h ' .
   Mr. WAONI.R, I certainly will, Senator.
                               MKP.OIUST MAKIXE ACT, 1*35                                                587

    TIM- theoiTuhat you have. Mr. Chairman, that the only way you
can build np'aV AmVrican merchant marine is through the niiniinum-
ratt- penvr, I think is most fallacious.
    The CnAiitMA.v. The .-4«U-juent I made is that you can buiH uu
an Anglican merchant marine only by giving protection to Ameri-
can ships.                                             " -•
    Mr. WA<:NCK. Vou are not doing it in this bill. You an- equaliz-
ing the differences in cost and operation, under tlie subsidy, provi-
sions of your bill.
    Tlie CHAIRMAN. Ye*.
    Mr. WAGNER. When YOU subsidize the American merchant marine.
you then ~»it it on a parity with the foreign operator, do yon not?
   The CirXiKMAV. Not wholly.
   Mr. WAGNER. You are trying to do it.
   The CHAIRMAN. \\V are trying to do it. but we an- well aware
that there are hidden .-tnVidios. hidden promotion plans on the part
of foreign shi|>s. So. I'M-n when we put tlioni up to a parity on tin;
nli\ ;"iis difference- in uperatii'ii. we have not brought them up to a
parity in reality, and the President brings; that out very well in his
    Mr. \V\i;st:i:. So matter what yen do. you art- never {Toing to
rcai-li that Mvivt -\\\fl. You have a minimum-rate ]>r»\isioii in
y<nir hill, \\hicli I iln not think you can i-nforct- as a«rain>t foreipn
iin<-. I do not think you have the power on export any more than
_\ini have on import. You have no control U-yond yoiir ports. You
"liav<" no coiitml over what foreiim lines do on the liijih 'V-is or in
forripn ]Mirts. and if you attrinpt to bur foreipi line.- frmu the
purt.- <if tlii- emu try 1» i-:iu-e tin y \ ifilate Mime onler «-f »n American
eoniiiiissiori. you an- pom? to start another littli- war. You are not
jjoinjr to dn it. It ha* m-vi-r lieen uttetnptod by any foreign .•"iintry.
    The CIIUKM.IN. .1»»t a moment. Are you <|iiiu> ripht in tTuit la^-t
    Mr. W.w.Nf.it. Ye>. -ir: nito in foreipn trad" have nev»-r '» i-u
ifjjui'.jli-d by any fon-icn eoun<..y.
   Mr. KAIM.KV. ( m. yes.
   Mr. W.»fsxi:R. You m.'iilc the !-tateiiient thai y«»u are n<>t impo-in^
jinytliinc on foivijrn Inn- timt yon are not ini|Ni.»iii<r on Ameriran
lint's. May I read to you from psipe !»4 of the bill, il-e lir.-t i a-
lTi:i|ili. in \\liirli you provide that this Itoard which v<ui Si>t up -liwll
iuiM- tin- jMiwn tn lix miniiniiiii and iiiaxinmin rati-sf fRendinp: |
   \Vlii-n 1 sni'li ruiiiiH'litlvf incllniils «ir iinn'Mn-s li;4\i- IMI-II fninul to i-\W--
   l\\ \\hnt l i i u - ? Ily Anierieiin lines-.
   Tin- CIIAIIJMAN. Any t • >*'.
   Mr. WAr.N't.K. N<»: you du not say that. You s,iy:
   « 'i'iu|K'(lt[Tc i i n l l > i « l - «>r |ir;ii (iivs «-IH|I|II\IH| liy nvMii>r». ••[KTHturv. ;ii'Mi(», nr
iniixtiTK nf vi--s4>N i if ;i t»n-l^ii i>niiii|r.\,
    Whsit if nn Amcii iin liin- prartii-ej. i n t r cutting ^ What liapjjens
tlu-ti tn ihi- uthei Amciicar rinpline-^
    T h f C i i M M M A N . I tlmik Vi-ii an- xjilittinj: words here.
    Mr. U'AI.NK.H. No: I nm not. Mr. Chairman.
 -. 'Win.L'nAiiot.o{. IfLthvrt1 is nny ijouht about the lanpuape, it slionhf
lio made cli-ar that it is to apply to all i-liips bfriuw we nVifnt*Mwk-i<r~
588                JO3CHAXT MAIUNE ACT, 1925

 impcK* upon any foreign ship any conditions which we do not impose
 upon every Atrtrkan chip.
    Mr. WAGNER. You do it in that paragraph on page M.
    The CHAIRMAN. If there is an* doabt about the language, we can
 fihd language to make it dear that the imposition of the conditions is
 identic al.
    Mr. WARNER. A great deal of stress has been laid on this rate cut-
ting by foreign lines. How much of the traffic of this country in the
 foreign trade, when- there are conference}!, has l»een carried by these
 riUMrutting lines? Has anybody told you that I They talk about this
Danish line. How many boats have they, and how mm u of the traffic
that mores between the*ports they serve and the United States ports
has that line carried ?
    The CHAIRMAN. Suppose we ask Mr, Fulbright how mudi of his
traffic is sent on foreign lines.        _      ...
    Mr. WAGNER. I did not say foreign lines. I said the;* rate-cutting
line* von are talking about. The bulk of our trade is on -foreign
lines because we hare not the American tonnage to carry it. That
necessarily follows. But I am talking now aliout the tonnage that
moves on these rate-cutting lines that these people talk so much
about before your committee. It is an infinitesimal part of tin* for-
eign trade of*this country. I think you are letting the tail wag the
dog_ when von are stressing in this bill this minimum-rate provision,
which is the most obnoxious thing to the shipjxTS of this country
that I know of. I am speaking for the shippers generally through-
out this country.
   The CHAIRMAN. Yet von testified tiic other day that you are in
favor of an operating Differential.
   Mr. WAGNER. I am. unquestionably; but I am in favor of free
competition, just as Mr. Fulliright ami the people he represents an*.
   The CHAIRMAN. How are you going to protect the American
merchant marine and the Treasury of the United Stale.- Hnlessyoii
have some, definite form of regulation which will make certain that
the American shipowner ami operator have exactly the same rondi-
lions to face that the other fellow has {
   Mr. WA<:NKH. He has. That is what I cannot understand. You
are applying your minimum-rate provision to your foreign and
your domestic'lines. If you fix n minimum rat*', the Itciictit of it
will go to the foreign lines predominantly, liecaiisc they an* largely
the shi|K)wners. They Tarry the hulk of your trade, 'if you fix a
minimum rate
   The CHAIRMAN. A little while ago you snul it was infinitesimal.
   Mr. WAGNKR. On the rate-rutting lines. That is the thing I do
not N-em to make clear to you. The bulk of your foreign trade
moves on foreign-flag vessels. That is agreed, is'it not I
   The CHAIRMAN. Yes.
   Mr. WAONKK. I am talking niton! the rate-cutting foreign !iw>
that have bepji sirwsrd Ix-forc you. I want to know if Hiiylxxly In-re
has ever testified In-fore youi committee as to the amount of that
traffic. What they will tell you is that those rute-ciiUing lines have
forced down the rales of the foreign lines. That may be true. You
harejdiRljtkualiiiii un. VOMCJula.nd_wAtcrj^Yj^_Yutt Jiius.jit the rx-.
pense of the Unitexl States Government—with nil due rcs|Mvt to the
          s along the Mississippi—a lino that U financed by the I'nited
                     MEIlOlAXT MARINE ACT. 1S35                         589

    ** Government for the purpose of giving rate> less thin the rail
rales, mt the npere* of the taxpayers- of this country. That is. what
you are going fo no in the foreign trade, if you want to keep Un-
American flag flying.
[•eared
her* th
T.II«-. and then von go over here and you .*ay that a conference line
may rebate. \vou do not say how niucli. I a>k you this: If tlte
 Hoard were to fix a minimum rate of 50 cents anil a maximum rate
nf a dollar, what is there to prevent a foreign-flag line that is :i
 member of a conference from cutting those rates '£* or .V) |»ercent.
 provided the shijip<r ajrr«ies to -hip on .1 foreign line? What is to
.-top It! What i.- to bcrnmc nf your ininiitiiiui rate? How <lo you
know liow iniirh your forrigr !,nc> ai> <iivin« back as a relwte!
They can j:o int«i ihi- confen-nre. «n«l hr'that very -provision, lepaliz-
 in<r wliat lias own illogal and is made illegal in every act today
•ru\vmii)£ tlieci.uiiiicrcp of this country, rail and wau-r. and do wha't
you are condemning them for doing. You propose to make legal
what every Congress has declaml to be illegal, hirth rail and water,
:ind by that very provi>ion you make it nae«ihlc for the foreign lines
tu ilo'what you' are condemning them lor doing on page 94. It is
these jmiviMons, and fiml that we are wholly, according to the ad-
sion vtrti M-t up tlien- i> legal or constitutioral. There is no standard
by \vhich this Hoard may determine the reasonahleness <if a maximum
or minimum rate.
   Tin- C'IC.UKMAN. Art- yon a lawyer?
   Mr. WA«NMI. I am.
   Tho CIIAIKMAN. 1 am not. but I have taken eminent advice on
tlicx- |.rovi>ion*. and find that we are wholly, according to the ad*
v'nv given UK-, within the Constitution, and not in violation of any
V,.i.\.
   Mr. WARNHR. I am not arguing it from that >tandp<iinr. I am
:irgiiing tliut you an* giving the Koiird no stiindnrd hy which to
jnilgf ;i maximum or minimum rate. If there is foreign competi-
tion. n nd conditions unfavorable to shipping in the foreign trade
resulting from foreign laws, rule?., or regulation*. 01 from coirijii-ti-
ii\i- method;, or practices employed by tho>e fon-ign lines, then
thi> Uoiinl liny fix ma\ mum and minimum rate-. I do not think
that i- a le<ml provision at ail. I do no think yon give the Board
liny >tniidiu    The maximum rate which tlu-y fix may not lie rea-
somih]i> jtt ni, ]']))• minimuii. rate may not IH> reasonable. You
>«y nothing alxnit A n-asonabh- rate, or a dix'riminatory rate. You
jn>t say they have the power to fix minimum mid maximum rates.
I do not think tliHt -nch u provision is in the interest of flnyhody,
a- :i matter of fact, IMI-HUV it givc^ the Hoard tin- bmadcst Mis^ible
  The C'liAliiMAN. I)'K-- the In(eiv(ate Cuiniiicrrc ('oniinis.^ioii have.
that |H)\vcrf
   Mr. WAI>M:R. So: hy no means. They can only fix the maximum
Hi.il iiiiniiiiiim reiiMinniile rates. The league Im* taken this ]>osition.
i!r, l%ai!-!«»i».-.w.ith._n*inccL.to the Interfile. Couimi'n'e Art, with
i' 'jiinl to die minimiiiii rate ]K>\\IT. and that is tlnit it should nrily
In- exerciM-d to tho ext4'iit that a rate innv not be less than cost.
590                   MERCHANT UAIIINE ACT,

  There is no such provision in here. A> a matter of fart. under
 this bill you will.I fix exactly UM> .-an* minimum and maximum rate.
 There is nothing to stop the Board from doinp that. Notwithstand-
  ing that provision again-1 « tpwific rate. ]( the Hoard finds one
  rate to be a reasonable maximum and minimum rate, they can cstab-
  li-h it under that provision.
     Tin CHAIRMAN. You want to l>uild up an American merchant
 marine.
     Mr. W.MJXKK. I do.                                                     :
     The CIIAIKM AN. How are you ^'oiujr to d<> it'.
     Mr. WAGNF.K. By -ul»idy: not by rate regulation.
     Tin- CIIAIK.M.\\" Are you pfiinp'to have that s-nlwdy >o MII that
  no matter how nnicli it i-o-t- the Treasury, it i- still jroin«r to I*
 •riven over to o|H-ratin«: these sbip>'.
     Mr. WA«;.M:I;. Mr. Chairman. y«m just .i-«uiue that thex- foreign
 lino are jroin«r to nit to nothing, ami are ^oin<r to operate itt a !<»-.
  I say they an- not yoin^ to do it. They arc not in I'li-uwss for Io\e.
     The CIIAIKM \\. Then why are you worried about it \
     Mr. WA«;\KK. I am not worrie<I iihoiit it. I am worried al>oiit tin-
 hill, where yon propose to put the minimum-rate IHIWCP-. in a iMianl
 and free/e t?n .ati1?. of tlu> country. There is n«» roa-<iii t»i a^»ui<-
 that we cannot build uj) an Ann-rii-ari merchant marine without thi>
 reifiilntimi. Other countric- have done ir. You a-Miine that the r4>-;>
 of Great Hritain an- etiiial to the ci^ts of J.i|>iin in opi-ratui^ iM>ai-
 <ir coii*?riictinj5 tlii-m. |)ot!icv iiee*!. in (itvat Hritain. minimuiu-r.-ile
 jHiWeis in finlei to enable their traffic to im-ve on tlieir Uiatv in c. t.,.
.petition witk .I,I|H-IH-M Iniat'        twei-n Canada and the Far East;
 They ujn-ratc. and their <-o»t- .in- ^rea'iT. They do not iii-ed to have
 ilieir <-niintry lix a niinimniii r.ite as ai r ain>t the JajianeM- compcti-
 t;"U. AVUy MumM w< If it i- truv «if that situation, it i> tr«v »»i
 i'Vt-i^ imlustry in thi^ country. We miirlil t<> lix ;i miniiuiim r.ite at
 which in-line ran lie xild. We oii^ht to >tifle c<in>|H'litinn. What
 you are d"iu» here i- creating a monopoly f«ir which there is no
 jiistificatii    ind which i< ioj|ir:iry t" every princ'i'lv «'f t»ur ••••iintry.
     Your provision hen- make* ii unlawful fur a line mit.-i'lc the con-
 fereinv to rebate. You cannot control it. You rannoi <.|iip what a
 foreiirn line dmv- in (ircal Britain <-r \\luit it dix-- buck in (fenuany
or Fraiuv. no matter what \oii >a\ in tlii- bill. Thev will ««i ahead
 «ml iln U. II«m an? \I»H -!i>ni)l to ieai-h i\ i
   Yotl t«lk IllHilit M-cret Mll»idie>.     You w i l l hrtVe Mi-ret rebate*.
What \(Ui say a]i|>lic» to export*. Why do you not vay it a> to im-
lM)rt*f You have a> much c«mlrol over ini|Hirts a> you have over
exports. A vc**cl i hie.- nut make moiii \ carrying rarjio onlv one way.
Why do you not protect the-e Aiiierican-llai,' ship- on the Import.- to
the same extent you dn on the exports ( You have as much control
over oii!> as over (he other.
    The CIIAIIIMAN. I dn not think sn.
    Mr. WAKNKM. Why not f When your bout come.- to this port yon
have coiitri'l. When ii lca\c- tin- |x»i: you lose control.
    The CHAIRMAN, (io ahead with your argument.
    Mr. WAGNEK. I have linishiil. thank you.
   The CHAIKXAN. All right. Have you somebody elx, Mr. Ful-
!:r:jrht-f
   Mr. FriJuuoiiT. That is ill
                           MERCHANT MABIXE ACT. 1935                                           591

    Mr. WACNER. Ifcforr I leave, Mr. Chairman. hen you talk mljoiit
thi- forei-rii-fla" influence. may I n-ftr to a decir-ion by th? United
t»tal«-s .Shipping IloanL handed down on January 2U. llfcia? That
wa> in a «•*•<• iiivnlvin-r a lijrht between the Gulf and the North At-
lantic line*. UK- >\»rth Atlantic. South Atlantic, ami Gulf coiifor-
eii<-«-> had Mitemi into an agreement fixing the differentials lietween
Uie various- pnni|r> of |x*rt*. 'ITiat was ujurratinfr to the di:«advan-
t:i^<- of the <iu]f j»orts. *> tin* Shipping Itoard line* out of the Gulf
annual. and this- procctiiin^ «'a> in^itutfd i>y tlie £!iippiu<r J Joan I
fur th«? |nir|xr*«- of pa--*ins on thi> aprt-^inoiU wliHi was filwl with
ihc Ifcianl niuler that »••!. Thi> ^i<miticant >tatriiu-nt is- made. T
am ivadin^ from jwp- 73 | reading] :
   Ii i- ilwrvfoiv otirlcii- tliat Ihi- dilTcn'iitUl ,-itn.itH'n If i-Hii-tlv«'ly futiiroIUi)
l.\ l In- X-rtli Atl.ihtir liiH->. In lliU .-iriinrrlj.^ it rfionlil !-• ]»'int^l ««Jt tliat
                   of tin- N'-n! AtL-mti. cuiiferetHx-s Is ]>riil<-iiiiuanil.r foreign.
   Mr. HnpfM-r .-puki- for thw i-nnforriio-s U-for*' yon [continuing

                                                              riii? l>v f;ir ill"-'- i«f U* .\infri-
i:u, TiiiinU-r*. i|<ii:iiii:iti"<. lln- iriiurliti- itfu'oreiio* ami tlic ntto .ili|i|i'"il'If to
                        iic^ inuring in Aiivrimii lx>t(i>tn^ from Anx-rimn i>»n>.
              an- tlu- cunfrri'iirfs that you want to luiild U]i in this hill.
 t'V prnhiliitin^ lin*^ n»t iin'iiilH-rs of the i-onfi-n-nn-.-. fn>ni ni:ikiii^r
rcli.ili».. Tf,o InwrJ M-I n>i«lc tliat ••onfvn-noc ajrrwnu'nt, and as a
n-ult (In- (iulf lino nijiuvd tlu-ir rate>. The I'nilcd Stales Ship-
I'injr llo:ird \\w^. M-t up hy the- I'nitod States Govi-nuncnt. n-ilticitl
thi-ir nit*-- from tin- (!n!f on romjii'titaT traffic. »-o ns to In- no hi^'lu-r
tli:in the rat«-* from the North Atlantic. notivithMandiiiirtluTp w:i> an
;id<litji>ual distance nr time of sailimr of afwuit ."• day-. Tin- Hoard,
nmler existing regulation, nu-t that -ituation. I say thnt tl>-y liave
.iinpl<> pn\\er under e\i>tinp law to meet all the >ituations that r<»n-
front tin- American men lumt mnriiie tiwlay. and that you do imt need
tin- udilitional power that you want t»i confer upon the Board.
    'I !te ('IIAIKMAN. Have you Unir-hed?
    Mr. AVAHNUt. \ i > . >ir.'
     (Tliereiipiiii Mr. Wairner lei- lie committee tahle. )
STATEMENT OF EDWARD F. FARLEY. CHAIRMAN EXECUTIVE
  COMMITTEE, AMERICAN-HAWAIIAN STEAMSHIP CO.; TRUSTEE
  MTJNSON STEAMSHIP CO.
     Mr. KAUM-Y. Mr. Cli;.irni:ui and p-ntli-meii of tin- coinmittti-, my
 name i- Kduard 1*. Fsirley. 1 am chairman of the cxex-mive com-
 ii'iiii-i- nf tin- American Hawaiian Steamship Co.. and tritMee of
the Munxiii Stvam-hip Co.. in n-ceivei-liip under M-ction 77 (10
of Mie r>iinkriipt<-y Act.
     I -hould like to address a few remarks to what Mr. Kulhri^ht
.-aid, hut in the meantime. MI that I tin not forjM what my pred-
• ci— or -aid. In- -slid that I had no intcrot in the South American
M-H nv. I hiip^K*n t<i l»e tru-ter> «if n line which is Imiikrupl INTAII^
«if -Mi-h competition to a jjrcat extent. At least, irrespective "f Any
tiling elM«, their income has not equaled their mil^o in niniiiii^ a
         m nifuUi .-Limcc_to_iiuutlL AIUIT'ICA^ p«>M>iijB>r ainl Jn-ijjht.
               Siir.!>r\»n. Whut is that line?
592                      MERCHANT MAIIINF. APT. 103S

     Mr. FARLET. The Munson Steamship Line, which rims f<mr lar«re
 j^v^nper ami freight ship froni New York. R:o. Santo-. HUCIIO?
 Aires. Montevideo, and bark. (iarcia & Piaz. an American concern
 of the tyj»e I think Mr. Fulbright referm! to. charter foreign chips.
 They have recently made a dcinsmd upon tin- conference for a
 perreiitajre of the traffic .southbound. Tht- conference >hi|>s are
 «:oin«j partly empty. The freight rate>; are not only iif»i rcniiinci*-
 tive. hut th«-y arv nut making the outgo. I mi«r*it .-ay that on the
 Munson Line, for the large part of tin- lust '2 year.-, tlw income
did not etjual the out<ro. phi- the mail r-.iy.
     < inn-is & Diaz then derided that if they were no! zriven some of
 the i»tluT lines* btisine.-s. which they had built up thro ijrh years, nnd
 in many yors when they hail taken their IIKHV. and \vry few
years when they had tnken their |)|-olil> since i!*^<i—they «^»iil " We
 will arrange that for y<»u ni«vly." S<» the;- rut the coffee rate. We
 rarn- iMMM) Im^ on a ship. They ..irry lO.fHKi |);l.rs Tlu-v cut tlie
 rolni- rate from .%n eeJit.s t«i .'til ci-nt>. A> tru^e*^ :m<l receivers of
 the Mim-on Line, what can we t\'>*. Our >hip|H-is will not patronize
 a-* unless we <juot« the lowest n.tc in the- business.-. U:ite^ an- like
 water. They flow d »wnward to tin* lowest level. While t'ni> •renth'-
 nian --TIV- then- may he only one rate-cutter, one rate-cutter can do
 the'business. Everybody meets it. You may 11 ' 1 <»ut for'? inoiith>
 nr a year, but, nevertheless, you eventual.'*: come down or he in-
creases the inimlHT of ships. He does not 'require an organization,
 lie line* not have, to <jet in contact with your ship|icrs all over the
 I'nited State* and have solicitors. lie ran send out |x»t;ii canls
 with an «ilvertiseinent of rates: 10 percent below the conference
 rate>. We name the rates. What thi- bill n-«|iiire> i> that you pub-,
 li-h the rates and let the public know what they are. mill that no
 iii.in In- jii\en an op|Kirluiiity. after .-irinjr tho>e rate>, to .-jiv "I
 «i!l »ive y«iii a discount.*' nf '•oui'M-. he will fill hi* »hip up.
 Of course he will make a jirntit. us ion^ ;i> he c:in luin^ on to that
 |nT'-.'ni;i^... (iut it is a constant circle downward. It make- no
diuVn-ncc ulicllicr it i- American nr furci^n
     The other tiling 1 would lik<- to a<hlie--. niy-elf to i- the question
of how the rale- lire imide. The lin— iu::ke th- nite-. Tin- confer-
ence liiie.- have not the ability I" lix nite- up l» >:iti-fy (lie top fellow,
or down, to sitNfy the low fellow. They barter ami trade. They
can back out of them, and •.'!> unt-iilc :>- they M-C lit. A man miiy IN*
in it fur i! nioiith> and mil of it f«>r «'• inmit!i-. He m.iy -ay "H'oyr..
^ive Hie -nine mure o| I will ^et nllt." That i 1 - Hot ^IHH] bll.-ilies- for
the American -hip|H-r. I t h i n k 1 can -]x-jik a- an American >hip|>cr.
For yeiir- my familv IIM- IHTH -lii|>i>iiiir food product- from Cali-
 fornia. We plant IH.IKHI acres of corn iiinl pea- in the Middle West,
and -hip them .ill mcr—to Ku<.'l:md ;iinl c\ cry where. I think 1
know Miiiietlun^ abmit the fanning lm-iiu>- a- well. I know you
cnniiot build an Aiiierii';in nicivhiint marine unlc>- ymi have :i rato
-(rudure. A)MI I \\a- Cliairimiu of tin- Shipping Hoard when we
were s|N-ndin^ million- of dollar- of your money, and were implored
to ilo -o by |N'o|'l> from your territory. Senator Shei_pnrd. and from
the Smth.-I- >i             -1\ .1- from any other part of Jhe miintry.
     Hi-flire the uai <nt(iiii \\ii- -hi]iped mil of the (Jiilf. There were
ffitiif-Tfii'^- iTTir^-tiiin,• t"",• STiil Tnrv ^Tt".;;Iti Tfrtit iiftnf ,*r«"(C TOitii tnry~
had practically tilled tln-ir -hip>. and then (hey would sail. There
                       MEl.'CHA.VT MAIJIN'E ACT. 1>33                        593

    was n<» regular sailing date fdr tin- :n.ij«iriiy nf tin* freighters. just as
   there is no regular sailingrdate for tramps today. Tlw shipjiers of
   rotten in the South saLL "This is terrible.** There was no sailing
   list with regular sailing f«>r the small IUMII ivho wanted to ship. so
   the United &t«tes Shipping Board spent millions of dollars in doing
  JU J u.4d to r-ign the checks mid it tiuriiftl me:iip when I did it,
   h>ratist» I do not like to pay for lnsst~, thai iJcnov could be remedied
   by tin- Government. It y*.- not a ^jufstion of making iiMiiit-y. It w»s
   imt n «]U<^t:oQ.'-pf making rut«*. It \vu> a question of meeting the
   l«w?sl-p<!rt?ibli'rate.
   : The Government always kept nu-oting the. ly\vt-st rate. It "was
   nol only tlie lowest rate that ruined them.' \\'r put on shijis and we
   saile<l fin a Thursday whet her Wv- had 50 bales of < "tton or 500 bales,
   and the ship went in, to Havre, or Mandicster, and came back, with
   a red iiik fijnire ofj?40.tKlO. or t*nne other figure. That built a busi-
      .-y:. I rfo not want to HV it thrown away. These are trade routes
      at, have, been built up with millions of dollars of the Government's-
   liioney. They .-litmlil be inaintainci.! nnd sUiiiKirttxl. an.l we >hould
   have the s=iil'- : .'.i- (o tlo it, hut tliere t>Uo iieeu of waking the subsk^y
   10 <>r 1.1 (iiiu^fls 1/jg as nefr-ssary.
      With n-jrifd to tlie question of a mininiuni rate- that ha« lan-n 5^>
  s-triniply discussed here, I i-annot nmrcive of anylioJy I>e3ng aj»-
  |M>intc(I oji a commission —an<l, by tlie way. rates are not waived
  aside. It nnjuires a public b"«rijjr. 1 ea'nnot cimceive of any fair-
  iiiinJ^l man employed by the (iovernnient, under oath, a fair,
  n-a^onahle. and imbiasvd man, silting uj« there ainl making a ntmi-
  miini raUr that is a profitable rate. I >aiuiot conceive of anybody
  making minimum ratos that are not ku-cd on the co^ts cf all the
  linos as a whole. That dues not nu-aii the higli-priced Anx-rican
  lines, or the high-m-t tliis, or the high-cost that. It has just been
  proven, in an inv<teti^ation in the intentinstal business, that the >m»ll
  lines that had been the rate cutters had been saying, in public state-
  ments, without producing facts— just as it is so «.•«>>• to say — "We
  :irv tlie low-i-iixt jx;ople." When they prodm-vd their tig1"'0-", tlieir
'cost of transptirtinga t«m of cargo finin New York to S:m I-'ruiicisco
 was almost -iO percent higher than my line, which runs twi^e a week.
  Bu: it' they give thr.it » 10-percent 'discount off my rato, they will
  till up, iiinl we will go half empty.
      The CHMKMAX. V«m mean if'ihpy give the ship|n-i> that rate?
      Mr. KARLUV. In uny tni:isjM>ii:itinn. I am talking about raUs
           inin>|M>rtnTion any wlnTe. ll makes im dilTen-nce whether
                                  '
      Mr. \V.\r.\Kn. If yu'ii I'm- the >aiu»- nites. you will get all the
 business and they will srot nmie.
      Mr. I'AHU.Y. They have tlie jiiivilege of incrriising the. number
 ••f shiji-.
      Mr. WAONKK. Or iiuTea.-ing tin- ^i^'il.
      Mr. K.v^i.rv. Or iin-reasiiii; tlie ^pet-d. Tliere i> no reasuii why
 a ln.iii .-liouM say " 1 have the right to live. <jid you must i>;iy ini-
 individually, and not everybody i-Ne." Thai i- exactly what I!M'M
 fell<i\\- are sayinc. Othor line-i have bigger uiul faster ship- than
 mine. I do not >a\ that I am entitled to a rate that will jM-rmit im.
 to live us against them, and make tin- (iovernmeiit pay it.
     >i-iimi.r Surnv4:u.-\vtiH'-jl" you *a.y.abuiii ijehiyijig the decision
 until a i»n(y \\lm thinks he has a g ( K«| rate ciin no longer IIM« iff
594                    MERCHAXT       M \IMXE    ACT,   1935   -                 '

    Mr. FARLEY. I do n^t understand the question.
    Senator SircpvAun. Suppose a man shipping cotton gets a rate
 from a tramp ship?
    Mr. FARLEY. Hear in mind. Senator
    Senator SIIEITARI>. You asked me for an illustration. I want to
 finish it. That rate is *usi>ended, umler tin- law. for 4 months.
 By that time the shipping season is over for cotton.
   'Mr. FARLEY. It would not l>e suspended unless tl- '••• was good
 reason advancer] for doing so. There wouM have to be a public
 hearing.
    Senator SHEITARH. It is susiiendod automatically.
    Mr. WARNER. I ihiiik that is limited to the intvrcnastnl trade.
    Mr. FARLEY. Even if it wen- foreign. I cannot imagine any Gov-
eminent \K?\\ suspending anything unless there was a fair reason
 for its suspension.
    Senator SHKW,\RI». Tin- Interstate Commerce Commission ha> the
power to suspend nniomiitically until tt can Iic.ir it. That hap|>eiis
every day.
    Mr. FARLEY. Tho<e ca>es are usually whore the rate lias IK-I-II
established for some time, and somebody is reducing it.
    Senator SIIKITARD. That is what I have in mind.
    Mr. FARLEY. Ix?t me say this: I have no objection to tin- elimina-
tion of whole-cargo tramp ships. I have no objection to the i lim-
inaUoii of hulk carriers, or oil carriers, or anybody who ninintaus
a bulk carjro solely—one commodity for the ship.
    The CHAIRMAN.* They are not in'the bill.
    Mr. FARLKY. I have no objection to their elimination. A great
deal of talk about tramps would W cured if it were made clear
that that wa.«. never intended. At least it should not IK- intended.
   The CHAIRMAN. Senator, that provision about the susi^nsion of
rau-j-. applies to the intercoastal trade.
   Senator SHKITARD. lam ju>t a;-ki;i<: lnni lnV opinion of n situation
of that kind.
    Mr. K*«r.FY, My upipion i< thnt the tramp rate for a full «irgo
lot would not IM- >i^pi>nded. If there is a full cargo commodity,
and the tramp comes along and say> "We will move that com-
modity"
   Senator SIIIITARD. The reptilation doe> apply in tin- coastwise
tn\il««. There i* this sinlden. aiitonnitii siis|>en>ion of 4 months
   Mr. FARLEY. Yes: and so far as I can see it lVn« worked no hard-
»liil> mi any «.' them except the individual who may want a particu-
lar sidvanlajre.                                       /
   Senator SHKITAMII. I can see where it v 1 work a hardship, if
you (lid not have hearing- on the morifr                 ". until it was too late
for liiin to ship.
   Mr. FAHLKY. I ilo not quite follow your question. Senator, I am
not rontciif|TinTin<r the susjx-nsion of any full cargo lot.
   Senator Snr.iTXRD. Why do you distingui>l) between full cargo
anrl fiAct cargo?
   Mr. FARI.FY. Heraus<» the other man, who does a general cargo
business, carries all kinds of commodities, and is there to serve the
public, the. little man nnd the big man equally. He is open for cargo
uv.Tfi TJTiTr.Tit-. "lit-IfTTiut iv^tt ntv<l." He i» aupjiowil lii run"'rvjguliiriy.
                      M K W H A X 7 M A R I N E .WT.   1935                  595

 h is exactly like -A railroad. Hf ha- t» -ail. Some other man may
!iav«- a bii.-". or some-thing. and In- can go when he pleases. But if
 von are g"Jiig i>» hold yi»ur.-elf out to 'the public to serve it, you
>h«iild have some protection from the public at tin- •quiw time. It is
niilv f;iir. a;nl it L- neres-ary oecan-e orherwi-e shijis would disap-
 |H-:lr. The rhairtnan ha*sai<'l that prartirallyall the American s-hips
.1 vvnige well over IS years of age, and they are fast disappearing. All
.
tlieM- millions tliat you have spent are fast disap|»earin«r. It does no
good to give me a >iil«idy of $.r» a mile, and then have somebody like
r;:«n-ia and Diaz rut tin- rate 1<» jxreont. and all the rates come down.
 If the grpsv revenue the lines take in is SIOO/KW.OOO. and the gross
operatuV i.rj>etise;> are $!'K),<WKi.«KtO. and «i»tne one ruts the rate, and
vvefinrnllv th.-v ir«-t into a rate war, and they iret only j-SHl.oOO.OOO.
thnt is a 'los-, of $10.(Nll)jnQA.
      Another pn»j»osition tliat was addressed t«i you wa> on tlie jrround
r.lmt all the rates would fro up. Bear in mind that there is a maximum
 r.r.i- jHiwer. and all the sliipjH-r hns to do is to appeal to the repilat-
 \Atl Itodv for ]irotei-tion on the maximum. I oolite a^ree that the
 w.Trd ~ reasmiable "* >lu«ild b? Hs-ed in the bill—n-a^mable maximum
 rates. The Supreme Court has decided what is- a n-asonnblc maxi-
 iiiiiin nite. That is a rate that serves the public and permits t'ie
rarriers in the trade as a whole a reasonable profit, a fair profit. It
 •liM-s not sav that- it pennits a man with the high COM to obtain •> fair
 profit. It is based upon a study of all the line-- and the fijruii.- .md
 fa- L< related to all the lines sen-ing the jiublie in that traile.
      I shoiilii >ay. in connection with a minimum rate, thai if you jnit
 ir she won I "rea-i mable". there is no reason t«> believe that :i iniiii-
  iMinu rate, should equal tin- amount of a profitable rate. It must
 f ••• a rate lower than a profitable rate. It inu.-t In- a rate to prevent
 .'i-tnictive rate ciitfin^. I am in favor i»f rate cult ing. I nm in
  f:«vor of competition. I do not believe in conference.- which build
 i.p rates that are unreasonably high, becaus1 they <*annot IK- held.
 am) the stuff will flow from some other diret tion. We as shipowners
 m':-1 go out and get the business; and the minute we IOM- 1 tun of
 . argo bccaiiM' we have hold too high a rate, we are foolish. We. as a
  \\ hole, have to go out and get the business, and it is up to us to make
  rait- low enough to get that business. There is no other way.
       Mi. Fnlbright mentioned n number of nonronference lines, or
 .•oiifereiitv line-, running out of the Gulf. I would like to ji.-k that
  I In- names of the lines and the flags they fly be put into the record.
    1 ln-y are American companies, American 'incorporated companies.
 operating foreign ships. The American-South Africnn is not. I
 • !<> not know whether -my of the others operate American ships or not.
  lint I do not recognize any of them as companies oj»erating American
 -hi]i- to any extent.
       emigres.- has ji])|Hiiutti] n man to mnke a <tudy of sl)i]ming. It is
  - iiil by Mime that he wn«. not ajiimintcd to investigate the foreign end
  nt' it. luit I t h i n k very few will question lii> i|iiHlificnti(tns to dti it.
   That i> Mr. Eastman. If it were possible— and I ask it — I should
   like to have tlie-e remark- reviewed by Mr. KaMmanV organization,
  \\liii-h is Ix-ing paid nt tin* cxjicnsc of (\>iigrc.-s to study trun>porta-
   i n'li. I am not shaking in relation to the Ka*l<nan hill, or any
   t'niiii? r«M-r1iV,T ^JTrst tiif^ ifir.arfa -made here teAyy, I Uunk-iJ»V
596                 MERCHANT MAHISE ACT, 1935

could be answered by him f^r better than I car. answer them, and far
more clearly. I am'afraid I would wander if I attempted to do *oc
   In referring to Mr Hupper
   The CHAUUIAX. Excuse me just a minute-. Mr. Fulbriglit. what
are the lines that you use from Texas? What line* are used i
   Mr. FciBKicin-r I named a number of lines operating from the
Gulf. I have not the information as to the extent to which they
charter foreign ships. I know the majority of them art- foreign
ships. There are some of them that are not. Also there are lines
winch I did not name. There are some lines operating from the
Great Lakes. I do not hay* the names of them. Tin u- are some
small lines that carry lumber and forest products in the coa.*twi*«
traffic, I do not hare the data as to all of those. Those are American
bottoms, but that is relatively a small part of the COM merer.
   The CHAIRMAN. Go ahead,* Mr. Farley.
   Sir. FARLEY. That is about all. Mr. Fulbright referred to Mr.
Huoper. stating that a great many of the lines were American line*.
I have forgotten just exactly what the connection i>. but I would
tike to ask him also if a great many of those lines he referral to
were not American lines chartering foreign ships, just as this <i.ii> 13
& Dia.. outfit ib .in American company chartering foreign shi|».
   Mr. FrrJtRimiT. I tliink tliat is correct,
   Mr. FAHLKY. A Jiian bus a ship during these liard time.-. and lio
will charter it. Me is hoping for better tiim-.-. All the.-c foreigners
are sitting over there w i t h ships tliat tliey will charter for the bare,
aiiifiunt to keep them going. They are all hoping that freight rates
will go up. when we will have :i shipowner's market instead of a
shipper's nmrkct, ami thex- <<eiitleiiicii will In- down II-TC with tear.-,
in their eves talking iilxuit the mnximum rate. They have been here
In-fore. I do not mean tlitx> particular gentlemen, but I mean the
shippers.
   Mr. WA«;XEU. May I point out that Mr. FarUy is quite uilling
to IIHVC the full cargo tramp boats out of the bill, and I understand
thev are out. but Anderson C'Javton is probably the only slup|K-r out
<if Texas who could utilixe a full carg? shipment of cotton. That
shipi>er ran gi-t any rate out of that tramp owner he wants, but if
it takes the five shipjH-rs of cotton out of Texas to fill the sune ship,
this Hoard can fix a minimum rate that those, five shippers will have
to pay. It may U- far in excess of what Anderson Clayton, the big
>liipjK-r, can get this full cargo for. The little shipper is at the
nieivy of the Hoard. The big ship|»er is out,from under.
   Mr. FAKI.EY. Senator, that is not quite true. In the first place.
I .said that no rate should be made as a 'i.inimum which wcs n profit-
able rate. The only thing that will happen is that if a ship hap-
wiied to be in a position to take it. Anderson Clayton might get a
lower rate (ban the conference rctc. But, .Clayton cannot always
wait for a tramp. They will use the conference lines. If the rates
are published, and if they are open for their information, then- may
Ix1 no need for conferences. We have no conferences in the inter-
coastal business,
   Mr. WICKER. But you have the Shipping Board holding up tlio
rates.
              r, And
                    MEUCHAXT MAUINE ACT, 1935                          597

  .Mr. WAGNER. It is just as pood as a conference. They cannot
clause them.
   Mr. FARLET. Ami properlv so. Tl»ey an- fair and »|>ei> to every-
body.
   Jlr. WAGNER. There is another example of your i»owe.r. whet* the
Shipping Board is attempting to iui]x*>e on the <•< .ueiwe of (Ms
country between tho east and nest coasts—at least west boimd-^a
single rate, regardless of the character of vessel, the time in i i-ansit,
or anything else.
   The CHAIRMAN. Why <lo you say a single rate?
    >lr. WAGNER.. I mean one rate, with no differential for slow service.
   Mr. FAKLLT. HJiey hare not objected to a premium. Tliey s*y the
rate shall be that, "but I see nothing to prevent Us frum charging
more if we could cet it.
   Mr. WACNER. Thx-y prevent the Shipping Board line from charg-
ing less than what is fixed.
   Mr. FARI.KY. Thev are doing exactly what has* been referred to
IHTV. They ;ire chiseling. They are riding under our umbrella,
when their costs are higher than ours.
   Mr. WARNER. You object to the shipj»or g<:(ling the advantage of
an inferior service at lower rates.
   Mr. PARLEY. He Iiought his ^lips from the Government nt $S
or $J> a t«»n. We paid a» much as 5-iOO :» ton ftir some of ours, and
hi- roiiifs in and chisels on iix
   TIu* CH.UHMAX. Ju>( a moment. OIK- at a time. Ar«- you
thnxigh (
   Mr. FAHi.tv. Ye>.
   Tin- CHAIRMAN. Mr. Hrown.
STATEMENT OF HARHY S. BEOWN, CHIEF, DIVISION OF REGULA-
  TION, UKITED STATES SHIPPING BOAED BUBEAU. DEPA&TMENT
  OF COMMERCE
    Mr. HKIIWX. Mr. ('luiinu.-iii. my n.niic is Hairy S. Drown. I am
 clurf of the Diri>ioii nf I^-gulaliuii. T'niud t>t«tes Shjpjnii^ Ho:ir<l
 linn-aii <>f the Dcpjirtiiii'iit of ('oininen-c.
    Tin- CHAIRMAN. How lonjr have von Ut-n tliere, Mr. Hrown!
    Mr. HROW.N. I havi- ln-i-u thi-n- -iin-o tne f»ll of ISt-JT. I have liwn
 cliii'f1 <>f tiic ilivisinn ;i ycnr und a half.
    Tin CII.UK.M ix. We will U- glud to have your comment on what
 ,MUI havi- IicanI tjii*. iiidrning. ami \vc shall !H> glad lo hear any
 ^iiggotiiiii.- you wi-h to make.
    Mr. ItimwN. I think 1 ought to >av tirM that anything I say is my
 piTMiiial opinion. I am nut f|M-aking for thf I)"])ai1nu i iit as a
 whole.
    I thiiik p<**iltly the record ought to olpar u]i the quolion of the
 >M-|H-n>iiin |Ni\vcr. Then- i> nothing in the bill as drafted which
 givi'.» nii.v power «>f Mj^H-m-'mn t«> the Maritime Authority on any
 rate* in foreign coiniueive. Kver »inco '2 years ago, when the inter-
 conMiil shi]iping act wa« cji;n'(ed. '.he Shipping lioard Kurenu has
 had tin- power t«i .-impend rate* in inU«ivoast«l ciunmerce. The pres-
 ent act extends that | HI WIT of siis|>«>nsion to other coast-wise rom-
jncrce^_Ih.c.Jbwi£i«a^e of the regulatory provisions, or, rather, th«
598                  MERCHANT MARlSr: \<'T, 19.tr.

bill as originally re|Hirted out, I hax-e never -sw-n until it was reported
out. I have, at the request of the committee. from time to time
assisted :n changing the language. mainly for clarification purpo-e-.
but I hare made a -study of the art and'l think I understand what
is intended and what would be accomplished.
    The only change in foreign commerce regulation is that <-oiitained
in the cha'nge in section U» nf the Merchant Marine Art. Some Qf
the objections to that section 10 that have bmi made to it. if th.'.v
urc valid, are equally goo;J now. because the language <-oi!tains >*)me
of those same provision* . For example. tin- language today provides.
in general terms, everything that i;- here t«ida\. without saying spe-
cifically what can U done, At the time the Merchant Marine Art of
192(1- was report*.'*! o;it by tin- Senate committee and the House corn-
ifiiMw.* it. waf staled that it was the purpose of ihat swtion to give
iJi£ brtw.di*r powers conceivable to the Shipping Board, which then
administered tiie regulator}- provisions of the act.
  "I think it is absolutely 'nwessary at this time that at least that
section lx> clarified, in view of the Supreme Court V decision that
broad delegations of power, without being .»pecific. an- mi'-onstit'i-
tional. Certainly, with respect to the objection as t«» then- being no
n-ijiiirenient that the niuiiiniim and inaximuiu rates br n-;is<iunli]o.
the word " reasonable *' should be insertwl there to tnki- «-are orthat.-
    I cannot subscribe to any interpretation of this bill that says that
rates aft" going to lw fro/.en in foreign commerce. It is only pro-
vided that minimum rates or maximum rates can be fixed, when it is
 found that unfair competitive methods arc being employed by for-
eign-flag carriers. I see no objection to changing that so that it will
meet one of Uie objections of Mr. Wagner, that tlion- practices arc
eqipllv reprehensible if c:.,j>btycd by American-Hag owner-. I do
not think there will IH> any objection to that from anyone.
    The CHAIRMAN". Certainly I tvould have no sucli objection.
    Mr. UHOWX. The minimiiin-ratc power that is provided in there
could only l»c n^-d by the Maritime Authority where it found that
 an unfair practice or unfair method of comjwlition. existed. Tlic
more fad tliul stiiiu'tjines a rate in foreign commerce is lower than
somclmdy olst^V rate docs not nwan that that is an unfair jiractice.
    If I \tcro called upon to interpret today what an unfair practice,
 is. I could think immediately of two kinds of unfair practice which
 I think should !*• corrected -either by the use of (he minimum rate or
 by the requirement of the filing of tariffs- and tin- publication of
 rates with advance notice. Those two practices an1:
     1. The practice \yliicb i.s indulged in by a email number of foreign-
 flag carriers : that is. carriers who operate ship.- flying foreign flairs.
 of either saying thut their rate.- are a fixed penvntage under the
 rates that anyl»ody el.se mav offer, or of countering every attempt of
 the. so-called " conference lines" to meet their lower rate's by making
 promptly still lower rates, giving the shippeis to understand thai nt
 all time,*! they will do that. We hnvo had a very prolonged investi-
 gation by the Shipping Board Bureau in which 'we have determined
 that this practice exists.
    The second practice is n practice nf the nature of which Mr. Farley
 sjxikp. That nan also l»een used where conferences have ]>oo!s, o'r
.?JP*rl3i°Jf 5«JiM}JI|?-.^hi<'h luiyj?_he«i_ approv j>d-by Urn Shipping-Board -
                          MF.KCIIANT MARIN-E A<T. 193.1                                   599

Hnro.ni. They 6n<l that a new carrier coming into the trade
mantis that tfic pool bo adjusted to permit him a certain share of
lhf> traffic, or that the spacing of Billing* be changed so that that
carrier mav have a certain percent ace <>f the sailings. although in
mo-t cases lu- has not been in the trade liefore.
    I'ndcr the Shipping Board Act as it exists today those new car-
r\»Tf ' oining into the trade could go to the Shipping Board and
complain that the action of the conference in not consenting to a
.••hare in the p»>ol lor the new carriers. or the spacing of ve.-*ek, was
unfair <ir detrimental to commerce, or any one of a number of other
thing*. If the Shippbg Board finds tlmt those things exist, it can
disapprove the conference agreement, throwing open the free coni-
]>etitivc condition- which Mr. Wagner. Mr. Fulbright. and others
ses>m to want.
    Tlu>se carriers do not, however. c<mic lien-, Tliey prefer, instead
«f that, to cut tin- rate.- of the conference ami continue to demand
their price, and if they cannot get their price, they will keep it up
indefinitely until finally the hack of the conference is broken and
their rates come down, ai.d there is a rate war, and the thing is com-
promised. and then the rates are jacked up to pav for the rate war.
Tin- .Chipper pays. That has l»ecn the history of the foreign trade
and tlie intercoastal trade fnr many year*. It has happened again
and again.
    Those are two illustrations of the kinds of unfair practices with
 iv.-pect to which the Maritime Authority, after due investigation.
if it finds they exist, I think will hn\v to n>e its minimum rate power
•liven under this- hill, or tlie other provision requiring the filing of
tariffs with advance notice.
    Mr. WAOXKK, Not if that situation results from a foreign law.
    Mr. Httow.v. If tlie committee desires me to talk alwiut that, I will.
    The.. CHAIRMAN'. Yon go ahead in your own way, Mr. Brown. Mr.
 \Vagm?r luis asked a question. If you think it requires an answer,
 I -hall ^H> glad to have it.
    Mr. lti(ii\\.\. So far nstlr.it j.~ concerned, the n'.-t at the present time
authorizes the I)ip:irtment of Commerce, through the Shipping
 Itourd Bureau, to make -uch rules and regulations as it deems ncces-
-ary to meet these conditions when Mich conditions arise from foreign
 law-, rules, and regulation*. There i- no change in that provision
 in tin'- lu'II.
    Mr. W.vr.NKK. It doe- not authorize you to fix maximum and mini-
 mum rates. It is ju-t rules mid regulation.-. You are providing
 here that this Authority shall have power to fix maximum and mini-
 mum rate- to meet foreign law conditions.
    Mr. HitoWN. I U-g your pardon. It docs not so provide.
    Mi.WAr.xr.it. H"iiiiing from the hill on page 94:
     To IIPI-M-I IU- iiinl iinJer ruforreil ruli>s ami rrgiilnf Infix JiflWiiiig xhlp|>InK
  ill Ilir fi'lfUTl ti'llili- ll«t til r»li!l|ct With tin- lll\V fll nfiliT (<i HiljUSl or Mifl
  (.vin-riil <>r N|M<<'ifiI ruiiclllioiis iinfa^orfldlf t<i flipping In <lie forelfif (rttilc-.
  wliciln-r iii nii\ iNiriii-iilnr trmlc or ii|«in iiny iinnli-uUr rnute nr in niiiiiiu>ro«>
  Ufiirnili.v iiml \\hli-li :irUe <>ui nf nr romlt fnnu fordtni l»wx, rnlo*. or retrain-
  linns. >ir trom ri>ni|ifiitlve iiietln>i|- «v immiccx enipli^itl t.y (nvnern, niHTiitorf.
  iici-iii-. ur niiisiiT- <>f Mvolh cif a fiiri'im ruiinlr.v. anil In u]i|»ni|>riati- CHMI«
  \\lliTi- M|rh ii>lll|M>tlthi- Ilii-tluxls IIP ]>r«rl|rr». have l>e»rll fi»Ullil tu i-xNt. |n
" pp>T->irii-"Mn« vriilvr tT»«r.'»^,i :!:?- »;J::i::n:Rr ~ir.\ ~as!s:«!« riafts. ......... -  -
 and so forth.
600                    MERCHANT MAHIXF. ACT, IStSJ                             "i

     Either it is the result of foreign laws and what follows, or else
 there is no use having tlie provision* in there with re-pect to foreign
 laws. nil*'.-.. or reflations.
     Mr. HMOWN. I assume the provision a.s to foreign laws. rtUe.-. or
 regulations was left in there Itet-juiso it has been HI there since U>20.
 but you read the language, and it very dearly says that the minimum
 rate power and the filing of rates L- to be used only in appropriate
 cases where j-uch comjH'titivi- methods and practices have Itecn found
 to exist.
    Mr. WAKXEK. But it says ~ which arise out of or result from foreign
 laws."
    Mr, Bitowv The language is plain. I do not want to get into an
argument.
    Tlif CHAIRMAN. (io ahead.
    Mr. liiioWN. There i- one other thing I want to say about foreign
 c-oniinerce. So far as the power or the authority to enforce iho*;
 thinirs i> comvrncd under tin- present act. discrimination and miJut
 preference und prejudice in foreign commerce, are already unlawful.
 \Ve had <me «isc i« which an imj>ort rate from France to the United
States, made in France-, the rate payable in francs, was found by the
Shipping Hoard to IK- unduly preferential and prejudicial to any
other slnp|M'i's. The carrier was ordered t<« pay reparation of MUIIP
.•?.V).(lOO. The American Tobacco C'o.. the HJinpiaiiixnt. t<Kik the case
to the eourt.sjtrt-fiiforce (he order. The French line refuse«l to pay.
The case was" heard in the lower court ami the order of the Hoard
wa* siirtiiiiied. It was n]i|M'iile(l to a higher court. I'lie lower court
w:.- sustained. A writ of certiorari to the Supreme Court was :i.*kcd.
and the Supreme O>urt denie<I it. In the two lo\\er cuiirt> Hie argu-
ments that the I'nited States hail no right to regulate foreign coni-
mcivc. (lie argument^ that have IH-CII brought out here, and oilier
argument.-* wviv sidvnnceil. Xcvi-rthele.-.-. the court decided that the
jxi\\(T i'.\i>ted.
    'I lie Smith African (ioveriimeiit has for miiiiv year> regulated
m: .\iiuiiiii rates of uarriers, American ilair and fureitru flajr. It ex-
i-n j-.'s a considi-rable control o\er minimum iate>, requiring i-arrier.-
in the iiii|>ort trade t-i South Africa, both American Jlag ;nnl foreign
(lag. (o so adjusi their minimum ralo lli;»t they will not bring
|ir«Mlui-(-- into South Afrii-n i>n a 'cc-i^ which \\oiilij uiiike tln-ni com-
pete u n f a i r l y \\itli ]iriidinl^ pnidnccd or manufactured <lomi'.>tirully
in Soiilli Africa. Some other coiintrio have u imasuiv of t b i < IM-II-
Irol in HH-eign commerce. ;il(lioiigli none to the < xti-nt proviiled IUTC
and umler the South African l u u . so far as I know.
    In tin- administration of the recent British subsidy bill for tramps,
tin- trump.- who are ivn-iving the siibsidv. which. «if coiir.-e. are nil
l>nti-h-tlag tramps lire re(|inred toestablisli miniinmii nih- on such
a liasis that (hey will pn'tcrt (he liner- in that tra>ie. They :ire
further re(|iiireil to enter into -ui-h agreements w i t h >-uch other for-
eign (rump, .as Nurwegii.u mid Danish, as may com|>c(c w i t h tin-m in
those trade.-, that will li\ the MII.IC m i n i m u m rates for vessel- of nl!
the coiiiilrics ctiiniM-ting in (Im-e trader. I might -ny that outside the
l'ni(ed-Stales you do not find, in long-voyage trade.-. a> many d i f -
fct • .t fliig«- represented us you tlo here. There is not (hut freedom
vf -.".••!!p?lil-i«.«u. That -iy *l\\y- in -vari'-'i- va't-i-.-.- <-)JH- -jvaM"j.-t«f-
         e, is the fuel that in most coun(rie>. the deferred rebate, which
                                             MARINE ACT, 193.1                            601

      is prohibits! in this country and is still prohibited in this p
      bill. is liiwful. ami it is iM-d by the e«nf«-renres in th<»>e trades, many
      <if which compete with our ^>wn trades. to stop the rliiseler from
     i-omiug in.
          Tin* bill [imliiliif- drfprml rt-l>a!t->. "and th»-y lunv alwa.x;; be^n
      proh<hiii*d sine*- IJMfi. There- is. jiowpver. a siKrifir ri<rht «riv«n t<i
     the Maritime Authority ^o jn-riiiit <'onfm-in es who*- ajrreoment*;
     Iia»r been approved by tin- Shipping Board to have rebate. I do not
     iiiU-rpn-t thni to mean that the conferein-es may have reSales without
     spivifii- permission from tlii- Maritime Author-it \. I :I|M> intcrjjrt't
     it tn mean that *!)»• Maritime Authority ha< tlio rifilit tc. iiujnisc
     runiiitions in tlk-«rraiicinjr of t-hn-e rcbat«'>. If it hx* noi that ri^ht,
     the bill shnnM MI iii'licutc.
         'I'hi' <lifl"i'iviiiv U-t \\«-vii •'•»• ilc-ffireii rt-hatc :u>il tlu« onlinnry n-hatv
     i- itiis. A.-> I rt-a.l tlic Itill the Maritinu- Antlmrity cniilj pi-nnit a
     miifrrrii(V t" "'iiti-r into aiin-piiu-nr- with »lnp|HTs whi'n-hy :i .-hipjHT
     Hlnrn«»ri'«il — anil livi-il up to in.sa<5iv«'jnv|it to jfjve alJ liis lui>im>^ to
 .   t i n - l'mc> nf tlw roiifcn-ii'-!- .iuriii<r a stati-il pt-riml of, say. a y^*ar,
     tti-iilil. afti-r tlic i-J<isi'of that, y«§ar. rwi-ivc ,i r«-liat«'of JOjK-nvnt «.•!• dis
     fivi^ht. such robati' to IN- «i\vn to any - ,'I"T wli«> wantfj it. largi'
     III' S l l l i l l l .
         Tin- •I< i f« > rn > <| rt-bati* which, a.- I s;iy. i~ Jawful uinlcr most j-iirisi!:!-.
     (inn-, but not under our-, has this <li>tinrti<>n. If th<* IHT'KM] of tht*
     a«iv» •i.-H-iit i> for a y«r. tin-re is tlic further r«i|ii]n»iiicnl that ihiring
     tin 1 followinjr '• iiHMiths tin- >liip|M>r m\if\ <rivt' all his Iiiisiiif.-s to th(^
     ii'iifi-rciu-i- lini"-, ;«iul if lie di 10-, not <](v (hat, he tint only l<»e> liis
     leriato for tlial ('• munih^. hut In- loses hi* rebate for the \t-.-ir. That
     l::^ IHH-II , rohihitrij- .inn- 1!>H>. I thiitk it shouhl IH> proliibitvl.
         '1'ln-re is just ou'. other thJiii.'. Mr. Wa«iK-r inaile *u\\w renuiiks
     !il«>iil tin* Shipping: Ttoanl Huix-au. H f u i n i I are pivtty ^INM! frii-ii'ls.
     Imt I iin'irlit -av that In- is <iii<- <>f the niiiulicr <if int<-iV-.(s wlii.-)j ;TC
    toilay :j>kinvr us to IIM- ivHain junvei-s in tin- iinjxirt forcitru lm»iiiess
     nhii.-h. if w have tin-in. w«- have them by the skin of our teeth, an T I
     \\.irn hiiit now dint he hml lM-tti-r IIIH&C a IIIKK! ruse, becau>e it is
    yoii-jr tn In- very haul to prove that we have tl»« jMiwer.
         Mr. W.U;M:H. You have the |M>wcr. You Imve some othei-s you arn
    t r \ i n ^ to i-xerfi-f in tin- niten-oiisinl investigation.
        The CIIAIHMAX. Tliern is one othi-r matter I should like tv have
    y«m tiiui-h on. It hiis bi'i-u iv]K-Jif«'illy su^eMed in these heariiifr*
    that there are foreign lim-s who advertise, or at h-iist indulge in tin-
    praetiri- of (iflerini; « pi-nvnta^'e ili<eoiint i>n rates. Ihis your inves-
    tigation ilisfloxfi] anything in. that roiiiii>i\~'jii{
        Mr. ItuoU'N, Ye-: 1 do not t h i n k tiiere^ ^e aiiv ailveriisi-inenf.-.
    bin tbeiv lire leti.i-r- -ent t«> <.hi;>p»r.<. and >N ''v is dMinu'M that
    the |ilie>, or repr« •-rli1|»n,ivc^ ,»f (he line-, had ihadt- MIrli viale'iiient-.
    li iv triu- thai tho-e Carrier, (hut do carry a mall pi-rci-nta«;i' of
    <>nr .•onnneive. It \\onhl not In- a M-rioii-. thiny; for the l i n - > iv«u-
    iaiiy in (lie trade. nlthoii<:]i it >l"i-. n-ult in (lie few shippers who
   are able to u>e those lines h a \ i n ^ aii advjnlai;e ovi-r tin- oilier >hip-
   l»ers; lnil it would not In- a M'rioii> lliinn: ii then- \veiv pi -nty of
   ri.iiimeivi- llowintr. However. ;it ( I n - present limr, and for a loii}{
__ t u n e in the paM. llie volume of frei^hl moving iu our export i.. it-
   iiTui irf riir"-nriiiif—"ri«""i7«Mi"-"iMr; Inr:; -:i::-l:-il»at--«'V-"»>-»tiiJi -j-uuijul* .
   nii-iit-. of -ailing (hat h a \ i > taken phi<-«-. then* is i-ol anywhere near
602                         MEKCHAXT MAIJINK ACT, 19.T-",

euouy'i to fill al! the shijK iii the trade. The man who will adopt
the jxjlicy of saying to snip|KT- tliiit " no natter Chat rate you «:et
from the. conference, you come to me an<! I will jjive you :i lower
rale " is £oin<r t<i fill hi- -liijts. without brin-rinfr any new business
into the trade ut nil. Furthermore, he is ^uiu<r to cut his xilicitatioii
costs to a minimum. It is simply n«_j»ary for -.hipjier?. to know
that they ran «ret that lower rate by froin<r to him. He does not
have to maintain M»li< itor- to go around the eonntry. One of tho-e
companies which lia- made that a practice, like jiio>t of tlu-ni. i> ;in
American i-orj>«*ration. although not all nf them are American wr\»>-
ratidiis. Tliat particular one is. It i-liarter.- all foreifrn >liip~—never
American .-hips. M«»>t of the *}\\i>*- it cliarler> are from an a-*-m-i-
ateil company in Denmark.
  The OIAIKMAN. I*' >'«'" reiiieinlier ihe name of the company I
   Mr. ItKowx. The 1'iiited Slat«-s c«i..,pany is I*hr:ni<!tMiii-Mo(>lh.'.
  The CiiAiitM.vN. That i- :t Danish roneernf
   Mr. Bitowx. That is an American curporation.
  The CIIAIKMAN. Cliarteriiii; Danish >lii|is and <>|ieratin<; tlu-m :t-
an American company?
   Mr. Bitowx. t'liartt-riii}: almost exclusively l);mi>Ii >hips. From
the information that lia> IH-OI fiirnishi-i] the Di\iMon -S. He<rulation.
the company fr«mi which it charters mo>t of it> >Iiip.>-. a l>:ini>h cor-
poration, last year paid l~> pen-cut in dividends: the year Ix-forc it
]>ni(l S |M>nvnt: anu the year before ."• |M-ri-ent. I>iiriii<; the period
of alHiiit •'{ year* durin;; the heart of this world-wide ih-pre.-sion the
value of its >t<K-k on the I):ini-Ii market more than doubled in pri<-r.
  Seiintor SHKITAIHI. I> thiit the American corjKinitioti or the owner-
of the Dani-h -hipsf
  Mr. liimux. They are tlie owners of the Daniel shi]>-. \\lioso ship*
are iMtl liy the Aiiicrican cnmpany. A^- to what the American com-
pany made, of coiu>e. the American company if obviously im-ivly a
eoi orate devici*.
  ^<enat«ir SiiKi'i'.iHii. \\\mi is tlie inline of the American company?
  Mr. Bitowx. I>brandts<m.M<>elIcr. The partinT> in that company
Hli- Ml. I.-l>la]tdt-oh. \ v h < > l i i u l i a ^ i - t h c tTuIi>|n>rt4iti<>li < ltd <»f ill.' lili-i
ness here, and Mr. Moeller. who is a Danish shipbuilder.
   The CIIAIKMAX. The fir*t <;entlem:iii has his office in New York.
   Mr. BKOWN. That i- ri«lit.
   The CIIAIKMAX. The oilier man i* in Denmark.
   Mr. BKOWX. I <|o not think Mr. Moeller ha- Very much '^ do \\ith
tlie transportat ifii end of it. I think he concent rate.- on the -bip-
buildin<r end.
   Tlie CHAIKMAX. Did ymi lin-l letter- and other evidence imli«-jit-
injr that there was-udi a prai-ticc of ciittjn<r definitely under Amer-
ican rates?
   Mr. Bitowx. Yes. We had te-limoiK .ider oath fr«mi -hipifi-
                                                                         N
und other-, and were furnishi-d letter-.
   I ' h i n k I oiijrlit to -ay t h i s : T-here wn- another comp:in\, tile
TTnited Slates Navigation Co.. a'-o an American cor|Miration, which
charteis fmei^'ii lla<: >hip*. It o|N-nite- in tin- Tniled Kinirdom
1ra«lc and the South Afric.m tnnle. Tli- South African trade oper-
ate- Illi'lel the nallie " BilMHi Lille."
   After lhe__i'Io«>e of our iccent : n\e-ti^iition. diiiinj! \\hi' - h iicilhii 1
                '          ilorYlie .Viuerlcliii ".•\im|rai"roii"C"o.
                      MKKCIIAXT MAKIXF. ACT. li':.."                       603

   although invited to appear, we <-,dle«l »|>oii llio-c two comjHiiiie* to
    furni.-h u- copi«-> of their tariffs of rate-. Tin- I'nited States Navi-
   gation Co. lias furnished tln»c tariff*, and although \ve have not
   had an op|M»rtunity to make a foiii|Jeie examination of them, surh
   examination a,- wo made show.- a ireiieral cut U-|ow the conference
   endi time that tlie conference had made a nit. We checked to .-ee.
        The C'fiAiurfAN. That i;-. the-o Atiieriian corporations operating
   foiviirn ship- have Ix-en engaged systematically in ehiM'lin«r. l«» the
   di-advanta'.'e nf ihe American >hij»s.
        Mr. liiaiws. That word is usually u^-d to doM-rilie that. With re-
   sjM-ct to I>brniii]tMiii-M<N-Iler. \\r have a.-kei! them to do the same
   tiling.
        Tlie CIIUKMAN. Ymi mean to lile the tariff^'J                          '
        Mr. HI.MW.*:. Ve>. It was teMih'i-d. liowcver, hy others (Hiring tliis
   investigation that l>!irai:<liMin-Moeller had no tari<T>. They told us
   sunn- 7 or 8 \vi,tjv> a<_'<> tliut they would compile their tariffs and send
   (Ix-iii in. \Ve aski-<l (hem if (hey did not have any tariffs that they
   I'niilil •-end in. ami they were rather <'Va>ivc. Tiiey told us it would
   In- iicce>-.avy to con>uh the >hi|i.-" m:inife<ls for the individual voy-
   ajL'e.- to mid out what rate* were charged. We liave mad- it a prac-
   tice, for tin- Ia>t year and a half at lwi«-t. to nijuire the confen-iu-es
-'to keep on lile with us their actual nite-. Anyone who want> to se<-
   tin-in is privileged to s-«- them. It i-. certMinly ijitite apart from the
   iniiiiiiniin-rate power. It i> not a             <hin^ t«> permit any carrier
   In function without hnvin<r it> nitt-> pulilic j)ro|>erty if the other
  carrier- arc compelled to have them jmhlic property. I do not think
  ap]in>\ul should In- ^iven to tlie conference agreement •jnle.** the rates
  they make are puhlic pro|>erty.
       Tin- CUAIK.MAN. I have IK-CM told dial a <;reat automohile manufac.
  Hirer make- UN- of certain of the-e ship* in order that he may jret
  tlii> chiM-|ed rale. I> there any evidence on lile to that effect'.
        Mr. lti:o\vN. There i> some evidence, if yon can use the word "* evi-
  dence." Tlu-re an- other tliiiifj> for which you can only use the uvml
  " 5fi.!icaticii:s "—Imt they ure preUy siroiiy—that Henry Ford i-m-
  ph-\!- tlii> company wherever he can. Whether he hns u contract
  \ \ i t l i them or what'Ihe rates are. I do not know at the pre.-cnt time,
  lint I do know that the (ieiiernl Motor.- Corporation is hrin^'in^
  heavy piv>-ure to In-ar on the various line.- to.hrintr their rate- down
  i<t \\imt I|H-V i'l:iiin—:illlTi»^'li tJ«'v evii]ei)t)y d» jjol know for sure-
  Mr. Ford i- paying I.-hrattdtxui^IooIler.
       Tin- ('II.\I:JM.\X. Mr. Ford, then, apparently i- taking advantage
  of hi- o]i|Kirtiinitic.- to ir^iin n very, low late, lower than some other
  manufacturers have l«vn ahle to j;el.
        Mr. liiiowx. I do not know wlmt rate Mr. Ford is ]>ayin<; Is-
  lirainlt-iiii-Moeller. and I will not knn\v until we <;i-( this information
 from I-hraiidtson-Mix-ller. Then I w i l l know whs:! rate- they have
  charged.
       The CKAIKMA.N. l>o you think, from your experience, tliat it i-
 a healthy tiling and helpful to the Ameri;an merchant marine to
  have condition* c\i-tin>; w h u l i uiulermine ottr efforts to build up
 our American shi]>pin^f
       Mr. HKOWN. I iio not tlnnk it is a healthy tliintr for the Amerii'Hii
 nien-iiani iiniiine. 1 «1o »«"'t Tiitnkit r-n rijrht t,1;:::}: •{«r-tht-£«m«m—
 tla^ currii-n* as a whole, and I dn not think it" a ripht thing for
                                            MAIHSK ACT, j u y . i ,       .
tin- KhipixTs, I <lo noi tliinlc (hi* hill would bring about M millen-
nium. siul I tin not think imy bill von ronld draw would twinjr uboul
n inilkjiniiini fur any of tlc'in. W» I thii.k u wi*- usi* of (h.- jxiutfr*
given in that bill will improyc. dn> Munition wry iniicli.                              -
      In i?{fiiri| io I In-; obji-j-lions of Mr. Fulhrifrht, u.'Uioiiidi In- ap-
|.Hr«'iil|v iifked i<> have nil iln- refriihitory clinriftfs stricken nut. I
jiijJtfc from fii* testimony thaf In- WHS .-oiii-enied only with fon-ijrn
                   or
n «JIIITC«*. 1 ui lea>t fiirjri'i.v I'nnrvnM'il with i f<n'"i^n riiiiiiiii*iv<>.
I nittik flu i'<iin...iti«v iiinl (lit Mi'iulM'r: nf ih« A-miii -lioni«| ^li»-:
 liii/:uisli iM'iwccn I|IIM- (wo tilings in tukiijir nny vole on Mrikiiitf
nut nr clniii^iii^ iinv ri'fruliit'irv jir«;yisimis.
     Tin1 t'luntWAN. t)u ynii !•<•(• iiny inipniprii'ly. frmn your i'X|M'ri-
i-nci , in l[n- pn.viMon- on ]m^<* 04. tc <;iv<- fu'olt-ciinn to tin- Ann'ric.'iM
iiimvliaui- niiirini' iiy tin* iiivvi'iilioii of unfuir '•mnpi'tilivi'
(In- nowi'i1 in IM- px«'i'cisi'i| in iijipropnatc cn«'.-^
     .\fr. Miunvs. NII; I XT no olijcdiuii to tluii. I mipil MIV (lint in
involifiiition wliidi we liud of nlli'^i'i) 'infnir prm-tii'i^ in tiu
rcniini-rci1. mil »{ ii vcrv hup* nuiiiU'i' of t-liip|nT> only three
(In* rcijiioi of ((IP c'Miiici-i'iii'i's, \\liirh wiis. in I'lTci't. (nut llif
 fi-n-iiiv liin'>.lM' i'oni|H'lli>il io cluirp- flic rijifi-ti'iuvj-iiii-*. A lin^'i
iMiiilwruf Nlii^iM'rKiicdiiilly iiilviii'iili'il (lull ami uppcii.'cil i^ro^-ivdy
 t»r il iiiiil (•'Miipliiiiicil MTV hiHi-rly I.....uii-r n Miinll niutilxT of
»lii]i|.tt-iv 'UMiiilly Imp' hlii)i|ii'r~- -IIM-I| llii-n- iininoiifiMviiiv Uni'- that
'jniil<{ jnnki' rule cuts.mid bc^nicil mi iuf\iniiiif.'<' in furci^n ncirki'ls.
     'I'lu Wlu;;jiiii^ Honrd JlinviiiiV report, w'lidi lm> not ln-cn iclnptf-it
I iv ti^- I )cp:i)'l mi-lit us y<>t. proviilcil ^iiin'lliiii^ I-|M'. ]( iliil not fin
:Jmi|r with Ihn T<'<|iii'.*l (hut (In* iioiicoiifcri'iii'c lines IK- .'nmjM'llcd to
i linr^f thi' niiifcrcii'-c rnti>>. My oun view IK linit (lint sliniifil not lx>
iluin-. It i|ji|. limvi'vrr, iiiiili-r sectinii liHi^ i( iri written in tln> piv.M-nt
IP t. ri'i'iiniiiH'Mil (li'il nil lines |H> r^qiiin-il (n lili> tiu-ir nites iiinl, exiv-pt
iiiiiUTii xlinwiii^ of mi I'lin-i'tri'in'V. not rlnm^i' them for :K> diiys. I
think (lull M'i'lioii is LJoiililfnl, in \\i-W of (he ilcrisiun of (lie Supreme
I'fiirH.iil1 lit iei|!-t fiiesei't'oli slioiiIiMie I'inl'ilicii in view nf till? ili't'MOIl
of (he Kiiprenii' Court of the Cniteil Sdito. If you i|<> not u'lint to
          to the Aulhorily (he po'M'i1 yojt have uivn here, or if you ilo not
           tu jrivc (hem .my other ^iM-i'irt.' rjowe'r, yon hiul IH^I.T Mrik.' ttie
            i out. IM'I'IIIJM' \M- tire ^'oiiifj to lie iir^'i'il (n i|o Miinetliih^ inulev
.Action !'.». MI | (lrin!*v'»u oiijjrhc in let us know whnl we run do. If yon
do iml WHiit MS t> f_ lui^-. inn! ynJi e:iiiiiot siiy xinielliin^ -p'-u'lie, I
Ihilik Mill 'ImiiliJ dike il out entirely,
      The CHUHMAN. My own view is that if \M- are pnn^ in -uli-iili'/.n
 AtMirii'.'iii >lnp> unit ''nil! In en k ,ll:i- Tivii-iiiy we uill !inve to have
Millie pliitei'liuli     il^HM'-l    tile r|ii>e|er> who W i . J i t to hreilk iluull olir
ini'ivluiiil, nun iiie, .--         \
   Mr. Uimwv 1 i'.                 ,ii is lii^'ily de>irnhle.     lii I'ni'l. I think ii i-
Ile«'i-siry. The llfi_r<' I hill the >-'i-C]|||i>d "I'llivli'l 1 " i> ||eri".'lll'ilv_'l
^IMIlll fi'lhiU i^ II l-o IIIIUIII 'I'lUlli'd.  Ill Collie i-ii-e-, \i-- ; Illl'l III other
I'll -l_-.i I III' \ nil' Mill Mlllll1 III nil.
      \\M, (In llli'<il\ lh:K their >4'r\'ice i- V- M>|||I> \\llv jlll'riliil li> ill"
ntlii'i1- in; t'lilliii-imi-,   lii Mime i-iiM's ii iniiv I'1. l"i iu Jiiniiy iu-f» il
llnil the Shrpiuird SieniiK-'liip Co., j« whii'li Mr. W'lyu-i imnle ivTi-r-
elice, jh illfi'l'iul' Io I III'    Allierii'iin IlllWlliillll. c\eept ill)   llle. i[ne-lion
of fiviiiienry of Milling. '\'\w lime in Irnii-it helweeo llii' 1n>l purl
                            MEHCHAKT MAHINK ACT, 1935                                 6(l5

 of lomling in I lie Kg»t and the tirrt port of discharge in the
 is very nmch the «iine.
    Mr. WAONEB. But tike the Panama-Pacific.
    TV CHAIRMAN. What was hi* question?
    Mr. DBOWN. He ai-ked me to take the Panama-Pacific.
    Mr. WACKIER. Take tlie time they are in transit.
    Mr. BROWK. 'flic American-Hawaiian IIMK to t>»iii|K-te with them.
    There are two more things on th-t; ;-:nl then I will be through,
 Tnke Uu> case of very fart iJiips. in extreme case*—the Xortniunllf-
 in the trans-Atlantic trade, and the Panama-Pacific, since Mr, Wag
 lier mentioned it. in the intcivoadal trade. Thot* carriers, to a roii-
 fcidfrnblr extent, cannot stop to pick up the typ of cargo tiiUt tl)n
 other nhips must rely ii|ioii as 11 whole. They take the very high-
 grade cargo. The rates on that class of carpn are made with the
 l»r(j:e, fa>t tliip in mind. Small i>lii|w do noi ^etit. On tlie other
 hand, (hone 'd*l khips, t<> kivp their »cliedijh*> ax pu^-n^er reeM-lb,
 oini.ol *,((.,> i<> ))ick up the ciu-jro tin- other vesseU can. They must
 logyc when their hohedulc oilU for ^lilintf. The other vesM-1 can
 wait a day. or even longer than that, in order to allow w>inc ><hip|H>r
 to ffet Milne hluff ill,                                                   •   (
       Kurt hci'iiiorr. bo faf o friHjuciicy of sailing \» coni'eriu'd1, it would
  kr a fant astir thing (o t>av that 4 he man with infrequent builingc is
  i-niitlci} ton lower rate than the man with frequeiu MI i lings, Tlie
  mini with infrequent sailings lias it in his power to go out and get
  inure- *hij»s. • Secondly, one man with a fai>t ship that could muke
  (lie1 trip in 1*2 day*, hut who had only one ship, would he entitled to
  a lower rate than the mun with 20 »li'ipt>, who tirnk a longer time, hut
  who Imd a greater frequency.
       fvimtor niim'-uin, Doe* Mr. Fulhright winh to i»ay something !»>•
  fore \vi' rlntief
J> Mr. !<'{'U(Hi<>HT Tin1 attitude here cxpre^^ed hy (he re)irese.ntatiyek
 of (In- Shipping Bon rd Jin rr«u is the traditional altitude the sliip-
  ]>«r- Imvc I'lK'oiiiiU'ivil hince K>fore 1W7. when they went U'fore that
  orgiuiixutioii. Mr. Karley exi)re>,N>s (ho xuiiii 1 altitude, nnnieiy, thai-
  unyojiii who cnit~openili> hhips mori' cheaply and charge H lower
  nite uutl make money out of it is a chiM'ler. ami slmuld IK- put out
  «f hiixifK-M, and (he puhlic sliould )H> deprived of the heneht of lluif
 rouipctitioii. Thai is what they term " I'luM-ling "— a term of oppro-
  liriiiui. Tliul is the theory that no mutter whether he tuk.'s 1!) nays
  or 'jx i|n\>, :»• IIUM *j Hiirmgx a week, lik» Mr. KurleyV line, or 1
 >niiiiig 11 i/ii.'inh, liki' tin- oljn-r line mentioned by Mr. Wagner, they
  »h<iiild uli charge the nimc, Thai i* jiut a d<>moiiM ration of what
 tin- -liip|H>i^ nlijcd in. Wi;li the present Ship|)i(,g liouril >..y>iU'tii
  \\i- will have mil' lixed for even^nnly iimj the little fellow will IM'
         1111,1 of IIIIMIII'S!.. ''.'he 111,11' ''\ }t (lie infrequent s.iilingx in put
  on it pu'rii.v w i t h the oilier-, ic «• '        'now lliiM a monopoly will there-
  liy hi- m-ttted, Mini the rale), «\ ' > '.d he niiM>i]. Mr, Kilrlj'y's Kl«le-
                          \i<'iTi'iit \\itii ftfi''f[att'nn')t\ of ihi' rcprcM-j/taii)!' of
 i lie 1flipping Hoard Huirnu. Tln-y hu\e fought logei-her for many
  vein -. The shipper^ of this i-oiiiHry have fought the old Shipping
  Monijl, i It i» ahii'-ii 1 chiiiviigi'. We' will never agree, mid MI there is
 TT.--;w-:;i g:iij:^-aJiy!i«-!-b«!-. ----- • -•                     ----------------------
       I II!MI point out (lint Mr, Karley Maled (hut the Shipping lioiird
 remedies this xiiuaiioii h\ Miying tlmt hi* line may charge u premium,
606                      MERCHANT MARIXK ACT,               19.15

It is ataurd to -u) tliut 01 •' 'jnc that has u higher service1 ni:ir\ charge
» premium. What liiipiW^ ^ that you prohibit tin- other lin«» from
churning any lower, ll<.s line is not /roin-r lo diar-re H premium if
it will drive'iiway any of the liu-irii'.-.-. He want* to nionopoliw the
    I H u n t to call attention i« one tiling I ovcilook'-d
    The. CIIAIKMA.V. What is the answer to this?
    Mr. HIK %\. I w a n t to say this. \Ve can only la!,'- casc.s a> we haw
 had tin-in. I cannot talk about .somethLjr (lint may hapjKMi next
year or next moiith. We had one case in tin- inlcreoaMal trade. a>
 Mr. KaiJey nointcd <.nt. in which tin- report of the exami;.- r, which
ha* not yet Ix-en adopted by tin- Department. >lmw> tl at there is not
aiiylliin-r in tlu> -lury that (In- Slicp)):ird Line, for inquire, !,.-i^ a
lower co>t.
    .\fr. Fri 1 1 mm1. I was sp?ukin^' of (In- ^eneriil statement niinle !>y
the ^eiitli'inun, an. I I wish dir .say this. ||, ( i this Mi-called %i inve^tipa'-
tion" was not p-nerally nnd-r-toiMl \>y the >hi|i|H>r» of this i-oimtry.
The -rreal orpanixations kiU'u nntlnn^ aliout it. It was hnndled by
till- conference line.s. The lioni oliference lilies, of n:.irst>. klleW of it.
 Itnt the protest, they have recri\i>d from yn-iit national and general
or^iini/.iii'iiir- ii^niin-t the rpcommenda(!nii~ linn h<i\e minlc ha\e licen
very ^'reat. Tin re him- lieen pouerful protots liU-i| w i t h (he Secre-
tary of C'oiiimerce apiinsl the net inn they have there recommended.
    Some of tliuM- \\ lin ap|N>an d iN'lon- this comiiiirtee >(:itn| that they
diil not know a n\ tiling almnt it. Some of them »t;itcd du>y ap]ieared
there ami protested it.
    At this time I u i > h to call attention to UN- fact t h a t in M-riioii 1 1 In,
on pii^i' 111. tlie ilip'r words in lini' In " a t t e m p t to olttain " create
a situation uhich 1 think >honld not exist, and those words should
lie -tricken out. Tin- elfect of th"~c \\ords i-, that if a shipper at
ii'iiipls to ohtiiin tninsporlii'ioii of properly at los t h a n the iv^..lnr
ti»n\<! HI'CS he >hall he guilty of a misdemeanor, and lined not IOM-,
(linn $l.rrfMi nor more than x.Voiin Tin- \\ould lx> int<-nin>ted as
|i!iiiishiiiH a -hipjxT whn !ii;dcrj<;i.l; to p-t n -lured n i t t ^ for the
 future, [ ( M n k it ,s well taken caivjif in line lo. where it ver\
pioperly says lli.it if U- atdmtpLs to olitiiin n refund.                     i|llo\\aii.-e
or rclmir it wiodd he punishable. Hut it -lnuild '                                tjiat lie
sliniild he punished if he attempts to ;M a rcdnctic
   The C I I A I I I M A N You would .strike it out (                        " "
    Mr. IM i.iutiiiiiT. .l'i>t llic Ilircf u..rd- " a t i e m p t to ohlnin " in line
10, |c;i\ in^ die hiime phnisi- in line Hi, lio\\c\vr.
   Mr. HiiuWN. I \\.Hilil not -iih-rnhc to t l n i ' I Me (he point, hut
T would not Mihscrihe t o s l r i k i i ^ it out.
    Mr. I 1 ' i r.iiiin.irr. At least it -.11011111 he chirilied, oei-aiisr 1 k:n>\\
you i|o not mean it as T iiilcrmvl it.
    Mr. B l u m s , That can he clurilied.
   The iiMine of Mr. K-le> was mei.tioned \i\ Mr. K i i l l n i g h t , a- the
reiiii'^'iilativi' of the American CoKon <'ooperati\e AfMicnilion. lie
was one of the three shippers ll|ipeiirill(; III the hi.ilin^s of the
Shippint; Hoard, who oppo-ed this rcpoit. Since dial report Mr.
I'Ntcs lids np|M>aleil to (lie Slii|ipiii)r Heard.' ' slop UH illcfeiise ill the
colloll I'llle out of (he ( i i i l f . from ••'$.*! ivi'llt^iO 'A* I'dlls. The iln rease,
ft* lie il^krd Us tn do, wns sto{ipi«j.
                                                                M A R I N K ACT, l t f 3 S                                             607

      Mr. VAIUAY. Mr. Wagm-j brought in the question of Mio Shipping
   liourd line. I merely pointed out that the .Shippinjr BcmrJ line «loeg
  not oiK-rate more cheaply llian mir line. Our line opi-rttiw mow
  < heaplv, but we nslc no favors on that account. We. will compete
  with them on the .-aim- forms. We do not a>k them to rui-e their
  itito to our?. It does not make any difference wln.t the level is if
  it i- nil fine rale. We do not want them to fill their >hips hy charging
  (• •«!•!•.

       The I'aiiaiiia-I'acilic was mentioned. They li^ve faster hhip* than
  nur*. They lake the fn-ifiht away from n*. We ilo not object to
  tii.it. We 'will have to build some <lay to meet that <-mu|M>tition.
  J'li.-it i- fair competition. They have put the money into it. ami we
     i' ilo it if wif want Jo. If \M- do not. .ve de-em- to IOM-. We do
•~Jinl ;i-k tills (ioViTlllllcIlt I" liold U> ll|).
    I do not say t h a t everylwdy is a ehi-»c|er \\lio charges a lower rate,
 li»' I MIV a initn is a cliieeler who say* " V>iu inn-i Imld your ratu
 up Mini -jive tin- a lower rate so that I ran live.'1 Mr. >'!ieppard has
 tfi.nc before the Shipping Hoard and made that btaleiiMit thnm^h
 hi.- :t<iorney or Ins repre.-entative. und I believe he made that state-
 in-'M liiiiM-lf in Au^iL-t of I!i:i:'.
                                   A itauiu x-ii.tw.ur.t.v h'rriwKRir Co.,
                                             -        .VI-IP Yuri,; June 4. IM.7.
 ir ii i IIUHKI.I iiru.
       fill    I' IUl'11 ll\   NI'll'
                l>i IKII-III.I-III m Mull , \\inlniiutnn. It. r.
   In \i< Mil St. i t-i MI) ; Mr S:iyrr liin- vi iv kimlly -<-ni im> :i rupy of I ho Ht8t*
 I>r|i: •MIIII-III - II-|IM»I. tn tin1 \>tf>* u| Mil) .Mil, In U'llicll I* ll|H«1i'lc(] u IM|.\ «(
  ti.in- ii-iii-r ni Jln.v hi iii Sx-n:iii>r U iitflrr Dlijifilnu t-- iln- iruiilntfnn of water
 • in i in-- In i lie lun-L1!. 'i.i.l, i>r (lie I'i i!iil Hiiiii"*. u" j>r»U<liil for In •>. 14>U.
     V'ii r\|in-N Mn> ii|iiiiinii i imi kiii'ii ri-uniiitluii l> nut "tn Imrmuny with that
 !..!>!<• |irliii-ipli> In niir "'-ulj -ini'ii.,.- iiTiili-r \\liirli \\ ( . li;ivi- KniMcil ID fun-I^n
 i-hl|'|ilii'/ ilu> rl;;lit ni tni* in-ifxh l<i mir i«pr(" iiml In n'liini Imvc nlifjilm- 1 fur
 >•>,. i.i|» ili' 1 rlk'lit ni tin iii-i-i>— in iinvltfii i»iri-" I mi HIM >IIIT whi'iluT,
 l>\ ii.i- Miiii'im-iil. \,ni ill-sin |IM-I,IIV.'> [lie linjir -Inn iliui (In- iirnvl-iiin" nf tlie
 l i l l t M..lll[|- MII.V ( I V I l l p r . ill I III- [ M i n i StHleh.             |f \i,|||- ktallMIUHll M i l s )!')!                f"
   Inii -inii'il. iiirii, I i|ilnl< It n> -''i ui'H I" 1 i l i r i l i i i l •« |KIVS|| '.. Minir innv imi MI
  ii ,'iin i)ii>iiiiuiii'*il ,i . -..inl,..j, . : iln- ;.r»xi:.|t n~ nf mir LrciUlw I'ruin M fulluru
  In inllii-n in u li.ix.i- |iilin-i|i|i- nf nur lii'iily vtriii-iun 1 .
        V.iiir li'iiei- uiiiliimrv •Tfiiiiiiiiy Mirli ri'Kni.iiliiii umilil In- In rimflln uldi
  tin- L-i-iniiilly HII <-|ilril pi in ll.Ts ni (MI rii.i 1 iniinl IHU ". I/in ii ....... I ^«i-||\ what
  | i ' i i n i i ' i' 1 liiii'MiiitlnTiiil l.iu N \liilnli-il. Mni'i'iivi'i. I liu\e IMTII ailrlneil thnt
  l i n n - 1" .iiniili* iiiiilmrliy i" Mi|>i»<ri the Kiivi'ii-ii:ii'» riclit I" n>KHliiie nries* t»
  u- I . M I I - .\h iln- Sii|>ii.nii. ('..iiri I'.'inii-il "in in Cuimiil X. If. t'n. \: Urlloit i'M'2
  \ . s. imi, f j l i Hit- mil' nf ^'iiTiiMitiiiiHl l.i\v n-siiirilini: -liipiin i: (»,\\ ^'iieniily
 ir."Viil/<il. iMiiiiliilniii'il I. Jir t'nhiiuiir ( 7 < 'iMiirli, 1 1ll. l.'(*i. I l l ) where Chief
 .liMii i- Miirxliull, .s|ii.-ii,uii; fi'.r t|,,. C.iurt N.I|I| :
       "'the Jiirikilli MUM "I ilie N.iiinii wltlilii 1»- uwn li-nilnr.v I- ni-ci«n:irlly ox-
 , ,i. .11- iin.l :I|IMI|I||I< ll !-• Mi-<i'|il|Mi> ,.| MII Ilinlliillnii (nil lm|K»vil li.V ll-clf.
 Any fi - i l i i l m i iiiinii ii -I. mini: Mili.llh i'ri in MII ''Xtrniiil wiirn', umild Imply
 n .ii MM. in >MII ni u- -ii\iTi.|i.inv in ihc ' .'I'Mi ni ili. 1 rr-ilrl'-lliiii. mill nn Invc*!-
 ii.i-ni ni' linn -.itciri^iii.v in tin- SIMM i.\(i ni In linn |np\\i-r whli h i-niilil lni|».^o
 •in ll l> ''Hull
    'All CX'r|il|i'll-          l l i i ' l i ri.ll-. Iii Ilic l u l l mil) i'niu|i||.|i |in\\i>r nf II Illlllnll                wltlllll
 Hi- invli liTflliirli-i. iniiNl in- (mini up t't Ilie <'««»<'«[ u( tln> li illoli ilni-lf. Tllcf
 mil l|i.\\ f i u i n lin ulln-i li-i;.|liiiiili> Mitinv.
      •                 *                               •              •                •                         •                  •
      U'll'll p l l * i l l - l l l ' l i v l ' l ' l ||K nf iilif rillll.'ll K|>IV,lll l l l l ' I M M ' I V i > I 111 lllllill llll»llli'r,
 iiv Im-lii,.^ iir i j i j . r i . i - iu;i.\ illri'il. inliit'l 1 ' . lii'lN ilniliiMli'l.v with the Inhiili
 I M i i i i ^ .il Ihill nlln-r '-r Klirli linTi'li . > > ! Vi'h><rU rliliT !'• 'I 111. |ilH|fiS(-H nf 1 1 lull',
 608                                 MEHCHAXT M A R I N E ACT,                           1!»35

 lit* law* in i-untlnUHl Infrni-tlnii, Mini I In- pivt-riiiiNMii tn «l«.Tm<latl'»n, if
 InrtlvMtiaU <>r mrrrtuntx did in* owv irtnporiiry mul l««r»l Mllndin'v,
 wwv not aiwfiaulf tn tin- Jnri*ll<-tliMi .if tin- ci mm 17 N«r ran tin-
 •orrrebjni b«rr any imKlTc for wixulni: »»• 1> i*Kfui|ill>>n          III* kulijcct* I!IUK
 IMWfnic liiio forvifii riiuiiirlw. ur<- nut Hn|ilo>r<l I'j blui, II<T ar«- iln-y enwijjiil
 in tin 1 1 Mini iiurmilt-. O'liMiiiiiiiil), (Lt-n- uri- imwi-rful inotlves for n»i i-x-
 •»Di;itliij£ I»TMI]I-. nf till* dc*Ti|>tlnn from ihn Jurii*l(>ifi>n of tin- country In
               y ;m> fmiiu!. mul im nin> iinHln' fur ruiulrlni: ii. Tin- Imi'lM        UI*
                 utiiUr wliicli rnr.v i-nii-r, mn iirvi-r IT roimiriiiil i«i ymui

    On Mil* i|iu-Mllou. tin- follow INK I H < > wnlniiv* friHii Mr. Clmrli* <'|H-III-.V
 Hfitf'x wurlc mi Intcnmlioiiiil I<NW, vulutnt* I. Ht'limi IKT, ;irt- II!MP rrli v vnnl;
    •-A« tin HiillftH) Slntc Jifn«-»trs ID IM' rrcunliil HI. |I:IT!U^ ill'- ritflit I" Isufati-
 ItHflf wlwdly from llir iHil--ii|e wurtil «r to ri-tuulii nl<Mif fpiui :>)! L'uiiiuiorciiil
 ur ii'oiininli- Inieniiuix u n i t ii. ihcrc u-uulil MVIII in IK' u i'<i>Ti>imiiiliti|:
 nlill^llloll Ill||»iH-<l UJxill <>;ir)l Illlirlllllll- IHIWIT Hill tn < l f \ r \ \ < - fnrrljll \l'SM'ls
 •if ••iniilin i' •• nf nii-i-hh in ;ill nf UK |h>rls. llic (frrll'«ri:il MHi-n-lsn im^^-iM-}..
 iH-Vi-rtlM-li^K, (In- lin^iil1*! rlutll In diMiTlllllir Wlli''h nf tin-in -.lull IK- n|u-|i
 In iTijiiiiiiTrr. «" ^''II :i»> ft. ri-^Tilaic »••••*•>•* tlwrH"."
     I think ll Ji|>(ir.i|irUtr In |Hp|iK nut tli*l Ilif /iri-I •;liti > im <>f till-. i|il'p|jilion
 IIIIH IHIMI I'lti-il If Mr. CliurlrK s. Uiil^li'. :iitoriif> for r.Ti;iiii fnrricn >lil|i-
 nwiii'TM. In i>|ijKmJiijr Hits li>cf»l!itfi«; nii'l In KU|i|iort of tlic vlvu I'Vpri-Mxil In
 your li-ili-r. I ivinmt I-M nix- the roiu-liiKlnii tli:ii |i\ i|iiollim uir »riilrii<v
 wtilnnt the ntluT. Mr. Unliflif IIIIK Kiiiiztr in riti> Mr. 1 1 >•')«• In >ii|p|«iri nf a
 i-oii u-li.ii ulilrh IK HI ilirt-i-i viirl.nci' w l t l i t l i H t cxprti>*il \>\ tin miilior In
 tin -'•nil-nil- Iniirii'ilhili Ij folljiuln^ tin <>iii- i|ii>iiit|. KMrilii'riiion-. I ililnk
 it ,- nut Irrdi'THiit In |n,int niit tli-ii Mr. KulKln's ri>r\ |ilnn-llili- pirn !>. in:nli>
 • ••I li'luilf nf »• .c nf I lie K-iini' fiirfiKiiiivviii-il >hl|i> Mint !iri> ri>iMin<-|l>li- for tin-
 H)HI--I<H mill iniliilr 'iiiri|H'llii<iii wlijrli i h|s bill ><<*-ki. to iiirni<i. Nnr i|n I
 Illlllk II |>rn|MT thill (In- v l i - W N of I hew >lli|H)W|irrs ohnlllil In- i-nlixiili-n-il \i\
 llir lit Jilirllllclll linli-x- ii|Hiil o'liwlilrrnlli'll In IlkrwlM- ^'ivi-ll In ||ir \' HTinill
 UIKl to nl'lrr fnrcli;!! •.IlllmUllcrs w l i n h:ivi- t-llffiTiil f I M||| llu-r iinii-lHTN.
     I rtnil It illllliult 10 folliiM- vour rrnniiiilag In this niiin«-i :i~ u I* nut vi-ry
 Y'liMr rt« (u JUKI whm jcMi iiii.-iin ii.\ " fm> Mitws in niir |Kiri>> ". nor iln \oii imint
 »ul In M'hut n'H|»'ct t.iirj, IIVI-XK IK ilrliliil oi ri'»l rlciiil by I In- |«'iiiliiik' hill. I
 think )t muni be niif|ili-<l nv H X ' f . i i n i i l r Unit tin- nniccpi 'of friiilnni liihi-ivjilly
 tmplli-x t|)i> i4)lf(rntl"ii to ri'j-|«i r ilin rlglil of ntlit-o, mul llini tin- rlulil of fnv
 ntt--** in our |n»rtii I'linvi-jh IK- llit'iiw f» ilMinn(ti' AtiKTlfiin or oiln-i fori-luii
 H|K|I|I||IK or iiur fnn-lKH rnnnncrri-. If nny AIIHTJIMII nr fnn-iKii xhlii In t-Krr-
 i-lt-lllt lliln rlclll HII cniiillli'tK jlsi-lf us to (In \Mtllloll ilillllJKi' 1o Alllcrli'MII <-ilill-
  iiKT'-i- (i ml to (ilht-r Anii-rlrmi mul fon-lun slil]i.s In our foii'iun tr:nli-. 1 i|n not
 (illllk II xll'iulll |H> i-olili-liiU I I hilt tin I'llllcl Stlltl'h. Illld solni- MIU'll KCHCTRl
 (iljiiiM* SIN ' l i c l i l i if fiii- H I I I - N in our |H)ilh" in olili^nli-'I li> iiitrt.nitliiintil
 i-uiiiliy in iNTinli tin- Miiniiin lUnuit'f In c-»iillmic
     Cli'iirly. tin- f»rel(n ulilp nluiulil not Inivr nrn» to our liiirlKii-x Unit Imvi-
 U-<'r. lniiirnii-d mul nrc liclnit inniiilnlniil »i Inrgc (iiihllc CX|M.»IIM-, wlllmut con-
 Irlhllllliir UN lnlr khiin> In Illln I-UKI. S l l i i l l i n l \ . It MUM |H> nxviunlM-il Illilt hllcli
 niTtiwi l> |/i(i|HTl\ fiHMlllliinfil mi cnniiilliinrf wild otlii-r rrfpilnilniih too niiinrr-
 tills to liifllllon. Vlllli'll ili'rlVf tllrlr illllhorlt.N from sliillltrK di-jllllif will) rllnloni
 linijonu. |rtihllr lii jill Ii. linnilL > r jiilon. t-;ifrty nf lif«- iiinl projHTt.v. niiilninil ilc-
 ffiuM*. Ninl oi her innllcrti wiili'h lire pnijicr stilijtvlh for i-ltlicr Stuli- or Ki-ili-nil
  li-k'lHllllloli      I Inivi- no ilolll'l \ c » U Ivr-HIEIllM' III'' |To|ir|i-I.V of |||CM- roli'lltliilis
  xiirrouiiilliu' tin* MX)- of our imrth uii'l ilo imt view iln>ni n> ilmyliiu' "ini- in
  ri**" to tlir >lil|ix of oilier n u i l ' i i i k . Your li'ttrr Klvr* no olup HH to \vliy rrg\i-
  I n I Ion of nili'* nnd jn'iicllccH nloiu1. nf nil thi*i' rrNiiirilonK. xlnmlil in- ilivmiil
  In di -i.\ In the fiirrlun »hl|i lln- riulii nf frn- inrc^H to niir |H.ru           In inv Jndi;
  IIH'lll. li-k'liiliillon mi lliU -llliji'it by oil) iiiil|o|i:ll <'oli|:rf»» IN ii|llull> li|)|Hn
  prliili- mul iiiiiply jn              'ii-U.
      Your Idle! ul\i'- nlii' (llf lili|irr>»-fMM t h i l l |IOK-||I|> ii'li'il'l" 11 ' "iHM'ti'i i l l l n l i Inix
 ll"l \»fl\ KIM'll In (In- Itii-l Illilt tin- I l l l i * illiil IH'lirllrri. ol' torrlUH »lll|i* ll'i^i'
 l.MH'li hllhjrrl In |-*i-i|i-|ji| rrKUhlllon slli'T II'IH. Mini Illiil till- hill JlfcMllr.t wllll'h
    •ill JlllM' Illll rV'l"!''! Midi vliTiiiioll^ olijorllnll l«. Ill ll Ilirui- lll.-II-.lllr. l l l i l i ' l > M
  Ilinlr u l i l r l l ) li-liili'lhi'Ml of r X I s l l h ^ |lll|ll"lll,V \\liirli i n i l l l l i ' x Illr |il'o\ Islnilh
  iif r l N l l l I K Inu mill i < l p l | i | l l \ ili'lun'. Ii- r i ' l l i i l l l |Hr H^^ W I l l i i l l i i n n x li.'lli: Jell
  Mm' ulliM'h miifi iinl iii'lin'i'l|\. Mm-iMirr. lln* \ill H i i n » l i T s llir ••vivlxr
---- f- 11..^,- .M..^.... ... „,_. li..U.i»i..K.i.i          ..n.-l-Li.!!..!..!^..^ i. .1-^1.. i.          ( r..».. ..!• .i.ln.lli-
                 i!i liltrlllli'lll of t i l l (inM'l I inrhl whirl) U rll..li;r(l by l i i W \ \ l l l i ]il'o-
                        MKRCHAXT MA RISK ACT,               1035

Diotlng and encouraging the derrlupnieuf of the American Merchant Unrtne to
c.*npeiliJon with UfMf of other maritime nation*. I am rare It Is not oectc-
«ry t«» rerite here to* many waya In whlrh the Department of Commerce now
n-Kulutea die ratcK Miid practice* of water carrier* lu foreign comment. Bow-
•rer. I Iblnk It wlgbt be lllnmlnatiui: to die m-tlc*i 17 of tbe Shipping Art,
H>15. and port of aectlon 10 of far Her.bant Marine Act, 10», aa lUuttratlfe.
of tbe rery broad puwer* already conferred:
                                  allim.NC ATT.   l»l«8

   " Src. 17. That no KuniDMin carrier by water In foreign rvtaym* rtwll de-
mand, charge, or collect any rate, fare, or etwnte. wblHi U unjUNtiy dtaerjm-
inaiory b*t»'t»ti olUpprn or |>ort«, or unjiwtljr pn-juilk-lal to exporter* of (he
I'nly-t Si^tw «n *»im,»ure«| with (Mr foreipft cnmt«tlt»n. Whenever the
hi«r«T flndM Uut any »ucu rale. fire, or Hi.irce Ix deiuniwleij. rlinreed. <>r
mllettiHt it uwy ulur the naaw to the extent ncQeiu<vjr t" rurreii nucli onjui*
dlmTtiiifiiHtifi or prejudice and make an order (hNt tbe carrier «>uiU <IU-
mntlnue deniandlug. rliandDC. or coltectlnjt «ny mu-li unjtwlly ilbHTiiuliiiitory
IT prejiidb-ial rate, fare or rharxv.
   " Every Mtrb carrier and ererj otlwr peraon «ubject to tbU Act xlwiU
inlnMlnh. observe, NIK! enforce jut and remMiaabk> regulation* and practice*
rrlallnj: to or connected with tne recHriUK, handling. »t«>rlnr, or dWlverinp of
liiilierly. Wbeuerer tbe Hoard flnda that any xucb regaUtlon nr prartliv I*
unjuiK or onrpanoNuble it may determine, pnwirfbe. «nd order enforced a
ja*t and roniHinaMe regulation nr practice."
                             UnrHAilT MARINE ACT, U:<>

    "Htf.     lit. (1) Tw Itoard U authnriiftl «nd directed lb aid of the «<•-
 ii.in|i!Uhmeot of tlie purpnfw* of thl* Art:
    •• («> To make all necewNarr rules and ntrulailmM to carry out tlk- pro-
 \l»loiiH of (hi* Ad;
    •• Hi) To make rule* ami regulatiiMi* affecting vlilpplni; In the forflgn
 i null- nut In conflict with la» In order to adjnut or meet general or niNi-ial
iiind.llonK uofmumble )<» >>hl|»))lne In tlie foreign trade, whether In nny |«r-
 (I'-uIur tnidc or upon nny pnrtlcular route or in commerce gcnerHlly and
 which nrW oat «>f nr result from forelen IHWH. nili-w. or regtilallnn or from
ii>in|N'iltlve mpih'HlH or practice! employed lo ownerx. openiiniv, igvnln, or
nimlern "f r<*MH>l«-nf • foreign cinintry: awl • • •."
    If nny fon'lKii |M»wer ban contended that t\u-»? itrovlNintiK fn 'exlnt{nt;.1iiw*
ili-ny to Itn nhl|w thi> rlKhi of free n<ve»n tn our poriM, or rio).\tc ltn irfHileM
 with nn, I am unuwiirc of It. Nor, I l»ellt>\i\ have retaliatyry mmaunv r»-
 Niilt»l frimi '»• enforcement at them> timvUlonM. I think t'.im- fudf itro
 imrtlrularly • nlflmut HK the IKPWM-H delcimled ninlcr 8. 1032 arc nwentially
 »im'lflr In <-b/r;ictcr.
     In your letter to H«>n*lor Wbeelcr. you nlx<i expnim the opinion thai "a taaft
 wrloiiK ohJ*c'l"M to Hny unllnteral attempt \>y ibln GoverunMHit to A" rnte«
-In foreign comiurm> lira In DM' fHrt thiit IhU proceilure would mid oue. ninre.
 furm of n>*(rlclliin to (he rntunckfl and cimOli-ilnn IUHIN of nallonailntk re-
 xtrl< tl»n« from which our forelim trade IK KiifferlnR UMlay." Ik> you f«el tbat
 It fv riitlrclx cuiiNiMieni with the factn to cbaroctcrlxc Hit- i-rovlK|ou« of tt. 1632
 n« "nallonallNlIc rwtrlctlnnK 1 ' wlihln Ibr; umully iicccpt^l mewing of thin
 ii-rmv To me. MiU cbht-ncif-rlutliin would Imply (hut Hie 1>H1 IUUHMH.- nitric-
 MniiN •») forelen >)<>iv< tluit are not ioipoNeil on >>hl|i>> fljliar our own flan, or
 Unit It granm prcierciiceN to tbe Amerlcnn «hl|i tu the prejudice of It* foreign
 iiinilN-iltor. TliU in mil (he CAM> with S. lU'ti M|IHV It pre«crllN>M the Name
 klinl mid decru' „{ n'tfiiliitlun of thi- niti'H und pnidlcrii of American ahlfHi
 n•- i.i foreign. UNI) iTeuli-. unlforin »(iiiiilHnlK \ \ l t h which M||||M of all natloiiM
 «iniM IM- refjiilinl tu coliip|> wllliniit I||MT|III|IIJI||H|I MUHllixt iHie or fHVur to
 II      I her.
     Ymir Idler H!>K. refer* to the ImpractlcnMllt.i of iinllnlernl regnlntliMi, and
 imlnfK mil tin- liiiiuixw HiHi you feur would re.iilt klioiild another K"\eminent
                 rnle» eo\i>rhiR UN trmle with u» differing imui HHINI- nur authorltleM
                 for tin- \cr.\ -nine trmle." I tlilnk I)I|N dlnV'iilly Is largely iln-o-
 rethiil other imili'iw limy, iiiul fr<H|UenHy huve. im^wd IHWH dealing with
Hiifety. renjiitivinen-U of N!I|JHI. MIU i^f Indlnt.' |Ilhlon>, HUil nil mirla of other
mnrtern reinrins in WippTnf.'wInrh hnVp'riTnflFrhii wifp ihip>p nr n i ' - "
6iO                                MF.KOIAXT MAK1NK AtT,                            U'3.',

      -,         . r t n o m-rluiiii lmj»ui.i-- b,i« rf*ullf«l n x tln-w                      ,
  hare Itn-n nti»lii-<l mi iiiutimll} -jiiihfin-torv icrww in Inx-nwrloniil matft>tinii»
  l<i wblrti HM- nurltliiM- lulum* bare aillWfl. JCorro\»-r. diK erifleiMm ,-«-m>
  t<> m? to lw iHn-i-tnl to the i«o-*IMe iiialailiiilnlKirsilufi «if fix* rf?iiuiti>r> \»>wr
  rutlwr thin to It* dekxmjon. A" I h:i\e aUnnlv |xilnii«l ..lit. similar J-WIT
  ttmm \**n VMfpd In the !*iili«il Smii-n Shipping Itnnril ami In tin- I*T»rtm«f)r
  of CVmniPfvp. *lnw IftlU. ..«•! I ku»« of IHI i-jiM- whore It li»» 1n»«i *» rxiT-
  clued UK I" cn-atr n eiiiirtli-i i.f jiirlwllrtloii Mi.-h a>> y»u hurt- (ildunil. I <l"
  not iliiabt Hint If tin* i •"*•<• r in jir<-^Tll«-<l minimum r.iti* »h<iuM IN- di'!i-;::ir<-.|
  aotlcr tbi- prupuMil li.'ll. It will !«• I-X.JV|M-.| Jni|l<-l<'ii-l> :m<l w l t l m n t in.rlncli:=
  np«»n U» rlclit" »f "Itwr /mli.-n-. «r nilv-Tm-ly :ifTi-<-iliit iliHr iniiTi-*!* X < - » -
  Pltbl-lMM, It W-MDS il<-Or*l>I<' t.i Jilt- IllUt i-llrll JHIWIT ^<nil<l )H> iif|«'-^ntii| ill l-Tlli-
  Kuflk-lHilljr Itritad l<i '•inlcriiv tin- iiilln- fV-|il of |M»i>ilili- nrtd.n. aii'l 'lint tin-
  rej:ul:itlii< agency hlmiilil n«t I* fini-lu^-J In mlvNim 1 fn>ni ilc.-ilfnp i-Kivtl\t>\f
  with nil <'niii|«-tltlu- i.|(untl<ins rii|ulrinp a rrii*<lj.
      Yniir Irlti-r !I|MI lr^lll^n^ll^ :i n~<iliitl«>ii »f tin- i-ji-rtniri- <-i<iiuiiilti*r nil «'nni-
  IIHTcinl \»'\iff. I'lliHTsillU iflijii'tliillx "illlll:ir (n I)M^«' ili-J I|-M'r| ;I|MIV«'. II"U.
 CV-T. flic ifiiiitnlltit' I* ;il^»:i|i|ip'hi-n-lM- l<^' "lir j.in-l^ii trnili- IM- bnii'll^il 1 '--'!
  hj f l u - rljil'lltv of rHf<- >ini«-tnri' tbai tin 1 * fi-^r -nil I n~.nl: fpim FIH'I n^nin-
  lion. I- It ti'il :i|i|iiir>'iii ilr.it ilih iir^uim-iit !<• Ui-j-'l "ii tlu* ns-nni|ii!i.n tb.it
  (Ik? rcjfiilntur}' nji'iirj will MI i-xiTr|M- I|r iiutlmrliv :i> t» iI»-lVnt tbi' < i|>r«^i.l\
                   IIIHI^' fur whli-h tin- IM.WIT .N yraii.nl. :V«n I-. «•• "filler iinil |«ri-
               In lli»- imlillr InttTf-t. :i tr:rii"|xirtiitl"ii KVM^H |im|ii>rl\ .id«|itiii t» tli.-
            * nf tl ....... inniiT'f ••( I lit« I'nllitl State- • • *." It fiirilit-r a^miu'4
 tbiir f l u - <':irrlcrj- ihi>ni^->u-n. |HII)I AIIIITJ.-III niul ii.rri^n. \\i»ali| Iriiil.-iti- -it'll
  r:iti"> :i- Mniilil < l r \ r . i l tin- liiim-iiKiit ••( triifll^ frnin AiniTifiiu |Mirt>. I tlilnk
 Mi;. I l« rtli tip- -vlf Intc-ri'-i nf tin. i-iirrli'Th. jiii'! flu"' i i i n n l n l r nf tin- iin>|Hivi^|
 IIIAV \\niilil ii'iiiliiiii- In prrunt y:i' ^in-Ii rr*illr.
     Fiirihriniiiri'. It M<-III> in nu* tl.nl j"iir Irlirr ilm- nut <lr;il ivltli wbni. hi in\
 jiiilciiu'lil. i> 'In- |.rlni'||k-il |>xin> livnlvi-il I.) IbN li't'li-l:ili<.ii. Ax [ H-I- It. tin-
 V i l J l l l-i-tn- InviilVi-il IliTi- 5> ll'it MI HlWli ttlirlliiT furi-i^N Khi|^ >ln;''M ur oliiiilM
 in>i li:ivc t i n - rlcht nf free nii-itiH in n|ir r TK Imt. nitli-T. \\lnMK-.- tlil» rlcbt
 L'|VI-S t i n ' fiTci^n sbliMiuiiiT n liifiiM- r .'I'liKii.:-1 In pim-ii'i^ \vbl<'li mir linii-rii-
 incut, nftcr n ninsi tbnrnncli Jiii'l lni|i.ir(l:il iiui->ti^:ili"ii. li;i» iiindc!i.iic<l UK
 luijiroiMT ,iinl unfair. :inil injurii'U-. Nil I, i« "t.r i-iininiiTi^ 1 iin<l in utir I.H rrli.uil
 iiiiirliii-. I fii-l MTV i|if|ily 1)1:11 tbl>. iv"Ui' -hoiild licit !><• mni'liil un<l. u n t i l It
 IK ile«lt wllli franklj innl f u l l j . \nur ilvi-arliucnJ nbould ultiilioM Il> object I"U<
 in rlil» lo^'Ulatliin.
     I tllillk IliiVc rim IH- tin i!0i^t|n|| :is <-i HlC itlifillr rnlnlM-lltliili (lull i-xlHlx.
 Tli;il It 'liK's i vi^I IN lint liu'l-'ly my nun view ur Ibnl "f ullirr Aliirrlmu -hip-
 iiwiu-r*. Imf 1lil» l» n I K" (In 1 n.tixl<lrrc<l foiio)nf.|»ii ttrrlvi-il nt |i> tin- l)i-|i:iriiiiini
 •>f CiiramiTiv ,.if(i-r n inn^i ilmrnii^li nnil im|i.tri[ui iii\r>ll-_'nli")i of -.nine nf
.our r<>n-lKirt i.?<!'•* Inviiiii: fur ulinuot 11 >r;ir. 'I'ln- r,-\mrl »t t i n - Slil|i|.|ni; Idiiinl
 Ilil i. -.in hi (IiN C.IM- ( ] > i « K i - t N... TJNi r i t l t i r In . ..[,-!. l.nil.t. Jct.ill llic <o;n
p c t l t l V f p.ryrlll'nl IIIICOMTl^l III t l l l v |llVi-s|l^llt|n|l. Mini i l l ' l l l n l i x t n |fN   W l l l l Kr«'llt
rlnrlly lln< i|i>trlliii>iitjil I'lTit't nf ||H>H<> |iim ll«'cs nn Imili niir fi'iulii'T.i 1 :n;il
nu otir inivrbiiiii iniirlin'. Aiiymu- dt'iillnc .Kb IliU ipn »tlnii wK{ flint tlilr- nn
liupiirilul nnil Illninlniiiln^ n*|Nirl. I'rHi-tl'-cv ;-]K-< lllr:ill\ i-»'(w1|l'tii'''c'|l ni"1'
ri-f'Tntl tn In tin- fnllnnlni; i»ini^ni|i|i, Qiintcil tbiTi-fruiii:
   " Kntm tlu> niiinl in ililn ln\i>.(li;ii(l"n It I* rluir tbiii tlii-ri- exist
lmv<- t-xlhli'd In ilir pn>-t iiiiii||i|nn>. nnfiivnnibli' In tlilppln;: lii tin*
irnilr nrlxliiK mil of HIM! reKUltlnu from roiniN-lltlvp int'lli'Hln fji'iilnyi^I |,y i. WH-
IT* iiin!/iir njirnitiir* <if <i>>st*|i< «if f<irdfii iiinnlrli-. HII>! ilmr-fl)"- <iffii'iM nf t i n -
H .• li!->lll|P dcIU'l-Kciiifl U;HI|| our eX|mrl irflilr Illivr lierli Ilileliklflei) Ji> lllci-. . oln
IH'tlllVc nn'lh'KN. The Illiri'lili t-pedfliiilly rninlciiiliH (be folloV.'lhj; |pr:nl|ie>, n»
Illlffllr iilul iletrimenlill In till- itMlilllrrre of till- I'lil'iil h'liilei- IKld llu- ill Velnji
incnt ..f nu nde<|U8ie Aiiicrliiin nien'liunl lunrlin".
   " 1. Tl, vo|lellHl|iili or |irm1irenielit of fivlxllt by iifflTv tu Ulii|i-ri|lintl< illl.v
mil- wblrlj iinnilier i-nrrlcr or iiirrlein inny 'jlKKe.
   •• IV Tin- II-H- of riiti> I'liltlut! n» n eliili In ivni|ie) <.t!ier mrrler» In ;ido|ii )MHillny
iiUrceiiH-n(o. rnii> lilffiTi'iitlhN, KiiHi'lnj; of -iilllii:.s mrwineiilx. i/r ntln-r

   Mnrixiier, ibc r«>|Hiri very |irn|iorly i-nll" iilieiiitnn in ilie •• uilntTiiMliiy nf
mir •iinf"r< i .I'M. rntc nirrnMiirniH lieiwwti Kiiljipliik' HneM wlil'li. by ibe Shlpiiln^
Ai-l'.' DMA. n Vi- |ir.>lilldlol 'r-HM Il-Iliif llic ileferrei) rebale H}«.|elii eliipln>t>i|
i.llii'i'1 nnhiTMilly In Hie i>x|*>ri inulekiif nthi-r loiinirb-K n» 11 prolii'tlmi JIUM|II>I
^iiuli <i.ii>,i>iCllliill " -Uiunrli          4liU liniiill.-iiji jtffi4li ( tl j.iir— OiliM. tn <)4»>Ul.u—wdli -
                           •r
                       XXVCiMST MAEIXE ACT, 1*35                                   fill

«'Lfij«'»lil«)i >lwiilil cither be removal or rompomated for l\ making nrailaMc
an f|ii«ti.v *ffe<ilre wrapun.
   I jipi'rcriate aod aui In accord with UK- policy which j-uiir Dejumnimi ha<
-.ii-.r-y^fttJiy currfa] out. «f nwititalnlnic frJ«-i«Ily rrl.tUwin with utlirr nivt-m^n
JKIV. rs. HvWtn-cr, I feel wirrantiil in rasp^tln^ wltb vvcn- ilt-frit-ntr- t<> jrour
>l.-Vr in tlil^ matter, that thin tidjwUve in tint i^mwiwiilly «ttniii«l by failnrp
in rpuiiilj- [>rn<-tii*7< which are comleunMj an iintalr by <}>eGaT«*nitii<iit liun-ao
liuirf.") »lUi tin- ailmliilntratJ.iu uf tbew mwltcr.- unit tvliii'li thU liurrau HIM|K
in U- delrioieiilal f> tix- nimnM-nr i'f tlie rnftol Stittf ami in tin- ii. idniiiiM-iii
uf it- nwrdiant marlut*. Mitreover. I f«vl iliat the iibjmiiiiiii mlraiitvd l>r yn
d> tin- rriiM-dial lexIMnti'in ri^ifmic the riclit of fr<f n<tti* to our |«irt- with a
HIVIJX- in I iiJon- our fnn-l'/M tmrtq ami flu* iiKiliuiu »f tniiix|Hirtniii*ii nc<ii
wliii'ti ll I|*IHIK|K, b) Ibr UM> «>f unfair


                    at 12:1"> ji. in., the Jicarin-r- wen- ••Ic>-< > 'l.(