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that is, work in excess of 8 hours per day without extra pay, insofar as preparations for loading and discharging and work in getting ready to go to sea. This obligation no longer exists. Now the working time at sea, in port, and

in the roadstead is lumped together and if the aggregate time thus calculated exceeds 8 hours per day during the port working time, overtime must be paid. The prin. ciple of the 8-hour day has thus been applied in such cases. It is incumbent upon the shipmaster and his officers to see that the amount of such overtime is reduced to the minimum and this they expect to provide through a certain organization of hours and working conditions aboard ship. The latest information we have is that they have a strict agreement to carry through the 45-hour week for seamen employed in port and in roadsteads. The plan adopted is to cease work at 1 p. m. on Saturdays, unless the vessel is scheduled to leave port within the next 24 hours, that is, prior to 1 p. m. on Sunday. Working hours for those persons who are employed on passenger ships, especially in the catering department, are limited to 14 hours a day when at sea and to 12 hours a day when in port. This time includes 2 consecutive hours set aside for rest at noon. Hence the normal working hours will be 12 hours at sea and 10 hours in port.

By holidays, I mean time off, vacations. The initial vacation is now 6 working days as against 4 working days hitherto. The maximum is 20 working days and the men are not allowed to waive their right to a holiday. I presume that the 20 working days refer to an annual basis, because it is stated they may combine their holidays in 2 successive years and make them cumulative if service conditions so require. But a postponement beyond the second year in taking their holidays or vacations is not permitted and it is provided that if a seaman takes a holiday or a vacation from the ship he is not to lose his employment. Infringement of the holiday reg. ulations are not permitted.

Men may not overlook these vacation periods; they must take them. They must be assured of reemployment when they come back to their ship. Again I want to qualify these statements by saying this information comes from trade journals.

Mr. Culkin. Have you any memorandum there as to the retire. ment provisions and the character of retirement they give in the German service?

Mr. SAUGSTAD. No, sir; I have not that.
Mr. CULKIN. That does exist, as I assume you know?
Mr. SAUGSTAD. Yes, sir; may I make a statement on that later on!
Mr. CULKIN. Yes.
The CHAIRMAN. Does that finish on Germany?
Mr. SAUGSTAD. That is all I have to say on Germany.

(In order to complete the testimony in respect of aid for rebuilding the German Fleet since the war, as indicated by questions of Congressman Sirovich and Congressman Culkin, the following statement on reconstruction finance of German tonnage, as contained in Bureau of Foreign and Domestic Com. merce, Trade Promotion Series No. 129, “ Shipping and Shipbuilding Subsidies", is cited :)

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During the war the German Government laid plans to rehabilitate its shipping. A bill introduced in the Reichstag on July 11, 1917, and enacted on November 7, 1917, provided funds to enable German shipowners to replace vessels that had been destroyed by the enemy and to reimburse them for expenses incurred by vessels that were interned in foreign ports.

The purpose of the act was to make it possible for German shipping to resume operations inmediately upon the declaration of peace. The shipowner was to give to the Government title to the ship or pay 5-percent interest on the amount provided by the Government from the day the vessel went into commission. He likewise agreed to insure the vessel in favor of the Government, to reimburse the Government for the amount of this principal according to terms to be laid down by the Chancellor, and not to sell or charter the ship to aliens without the consent of the Government.

The law further provided that if the cost of construction after the war should be greater than in 1914 the Government could grant supplementary amounts of 60 to 80 cent of the or nal sum during the first 3 years, 40 to 60 rcent during the next 3 years, and 20 to 40 percent during the following 3 years. In November 1918 the Reichstag passed a law adopting the cost of construction as of October 1918 as the cost basis of vessels for further calculations.

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RECONSTRUCTION FUND OF 1921 In 1921 German shipowners requested the sum of 37,000,000,000 marks from the Government, with which to replace the fleets that had been turned over to the Allies or had been lost. A compromise was effected and approved by the Reichstag March 12, 1921, under which a shipowners' trust or bank was to be organized to handle funds appropriated by the Government. The sum of 4,700,000,000 marks was voted. Previously 3,500,000,000 marks had been voted but not expended. Other credits had been extended in 1919 and 1920, so that a total of 11,970,000,000 marks had been placed at the disposal of the owners. An arbitration tribunal subsequently decided that the Government must advance a further sum of 18,000,000,000 marks demanded by the shipowners' bank, making in all an appropriation of 30,000,000,000 marks.

In return for these grants the shipowners agreed: To build or buy within 10 years, beginning January 10, 1920, 2,500,000 dead-weight tons, or one-third the tonnage lost to Germany as a result of the war; to build 90 percent of the tonnage in Germany; to have 95 percent of the German shipowners assent to the provisions.

In 1921 and 1922 German yards launched 437 ships of 1,084,000 dead-weight tons, so that in 2 years upward of half the 10-year programı had been met, although not all of this construction came under the plan. At the time of the agreement the German mark was quoted 60 to the dollar, and the agreement assumed as a valuation per ton the sum of 4,000 marks, or $67.

By a decree of July 29, 1921, German shipowners were forbidden to repurchase surrendered tonnage in excess of 150,000 tons, and such purchases were to be trade from their private funds. This regulation was further restricted in September 1921 to prohibit such repurchase to any company that had not been in the business prior to June 17, 1921. This prohibition was apparently not stringent, since the German Shipping Yearbook for 1923 indicated that 130 ships of 491,600 gross tons had been repurchased.

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In the early part of 1925 the German Government authorized a loan fund of 50,000,000 marks ($11,900,000), to be made available for new construction under certain conditions. The basis and operation of the loan were somewhat after the manner of the British Trade Facilities Act, the main purpose being to decrease unemployment in the German shipbuilding industry. Under this plan loans were granted up to 50 percent of the construction price agreed upon with the shipyard, the remainder being supplied by the builder or shipowner, as the case might be. Interest on this loan was established at 4 percent during the tirst year after completion of vessel and 5 percent and 6 percent in the following years,

The 50,000,000-mark fund was exhausted by October 15, 1926, and in December announcement was made that the interest accruing to the Government would be employed in reducing interest charges on money expended by shipowners between October 16, 1926, and March 31, 1927, on new vessels or for any conversion by which the economic value of existing vessels might be increased. In effect, this plan subsidized the German shipowners to a small extent by absorbing the interest cost differential that he must pay for money in the open market as compared with the interest charges he paid to the Government for its 50-percent advance against new construction. The usual stipulations as to German yards and German material were included.

In a British Board of Trade report on economic and financial conditions in Germany to July 1927 appears the following statement on the workings of this loan fund:

“As the Government credit of 50,000,000 marks placed at the disposal of shipping firms early in 1925 was exhausted on October 16, 1926, the Government produced a further scheme of financial assistance under which an annual amount of 3,000,000 marks ($710,000) is to be provided during a period of 6 years. These sums will be used for making advances in respect of new construction. The advances will be on a sliding scale as follows: During the period of construction and the first year following delivery, 312 percent of the value of the order; subsequently the contribution will be reduced yearly by 1 percent. In the case of orders of less than 3,000,000 marks, 4 percent of the value will be granted. The average rate of the Government advance in respect of annual interest will remain at 212 percent below the prevailing Reichsbank rate. For smaller orders the advance may, however, exceed the Reichsbank rate. If the order exceeds 10,000,000 marks in value, or should an order be placed with one yard for several vessels of the same type, the above procedure may be modified.

“The funds for such advances will be contributed three-quarters by the Reich and one-quarter by the government of the State in which the order is placed."

The city-state of Hamburg allotted the sums accruing in respect of interest on its share in the 50,000,000-mark loan as follows: For the financial year 1926–27, 135,000 marks; 1927–28, 270,000 marks; 1928–29, 230,000 marks; 1929–30, 190,000 marks; 1930-31, 190,000 marks; 1931–32, 190,000 marks; 1932–33, 95,000 marks.

By November 1926 it was estimated that under this loan-fund plan Blohm & Voss, of Hamburg, had obtained 10,000,000 marks, the Vulcan Yard at Vegesak about 8,000,000 marks, the Flensburger Shipbuilding Co. about 2.250,000 marks, the Weser Yard at Bremen 4,000,000 marks, and the Vulcan Yard at Hamburg 1,500,000 marks.

The CHAIRMAN. Just at this point, the question arose as to the condition of the construction-loan fund, and I am advised by the Shipping Board, over the phone, that there is now available for construction in the construction-loan fund, as of December 31, 1934, $37,800,000, and that may be increased, of course, by payments coming from loans previously made.

The original act, as I recall, provided $125,000,000. There was later, in the 1928 act, an authorization for $250,000,000 as the limit to which the fund could be extended, but that was reduced by later legislation to $150,000,000.

The construction-loan fund was obtained out of proceeds from the sale of vessels. The total amount actually appropriated by Congress going into this fund was $35,000,000, which was made in the independent offices appropriation bill of February 23, 1931.

Loans ontstanding as of this time are $112,600,000. I might read the statement appearing in the series prepared by Mr. Saugstad, in the first of the series, Trade Promotion Series No. 129, on page 71, under the heading of loans authorized, where he says

Under provisions of the several acts creating the constructionloan fund, the Shipping Board authorized between May 22, 1923, and June 30, 1931, loans to an aggregate of $145,131,165.

The construction of 56 new vessels of 584,310 gross tons has been undertaken and 19 vessels of 157,407 gross tons have been reconditioned or converted with the aid of the construction-loan fund.

Interest rates charged on vessels in the foreign trade vary from 414 to 514 percent. On two loans authorized previous to the passage of the 1928 act the interest rate at that time was 414 percent on vessels engaging in the foreign trade. For those authorized under the 1928 act, before the amendment of February 2, 1931, some interest rates as low as one-quarter of 1 percent have been charged, although generally they are above 212 percent. Loans authorized subsequent to February 2, 1931, are at the rate of 31/2 percent for vessels engaged in the foreign trade.

I may add that that low rate of interest before the act of February 2, 1931, was the occasion for the enactment of the law of February 2, 1931, as loans were being made at a rate of interest never contemplated by this committee because of an interpretation of the law which was not intended to authorize those low rates of interest.

(Thereupon the committee took a recess until 2:30 p. m.)


(Upon the expiration of the noon recess the hearing was resumed at 2:30 p. m.)

The CHAIRMAN. I am going to let Colonel Ryons go on for the present.


Colonel Ryons. Mr, Chairman, my name is Lt. Col. Fred B. Ryons. I am appearing as chairman of the legislative committee of the Military Order of the World War, an organization of officers who served with the allied forces in the World War,

At this time I would like to present a resolution passed by our order at its national convention.

The CHAIRMAN. Without objection, it will be incorporated at this point.

(The resolution presented by Colonel Ryons appears in full as



Whereas the Government of the United States and our people always have heen committed to a policy of an adequate merchant marine as a necessity for national defense purposes and for a growth of domestic and foreign commerce; and

Whereas because of the high standards of living in this country, more money is required to build ships in American shipyards and to operate them by American seamen and the cost of fuel, provisions, and repairs is greater in the operation of American ships than those flying other flags; and

Whereas under present business conditions most American ships are being operated at a loss : Now, therefore, be it

Resolved by the Military Order of the World War in National Convention Assembled in Miami, Fa., October 14-17, 1934, inclusive, That we urge the continuance of Federal aid to our American merchant marine and shipping in order that this most necessary adjunct to the national defense may be available at all times; Provided, That ships receiving any Federal assistance be required

to employ only American-born seamen or seamen who are naturalized citizens : And provided further, That the officers and crews of all ships flying the American flag be thoroughly trained and disciplined.

Colonel Ryons. I draw your attention to that part of the resolution which states :

That ships receiving Federal assistance be required to employ only American-born seamen, or seamen who are fully nationalized American citizens.

Paragraph 12 of the President's message, page 24, which reads: That with the exception of the steward's department, the licensed and unlicensed ship personnel be 100 percent American, either native-born or naturalized, unless ruled otherwise by the Secretary of Commerce.

The CHAIRMAN. What page is that?
Colonel Ryons. Page 24, sir; no. 12.

The CHAIRMAN. That is the recommendation of the interdepartmental committee which accompanies the President's message, but is not actually a part of it.

Colonel Ryons. I see. This paragraph will conform to the ideas of our organization if changed to read: “That the licensed and unlicensed ship personnel be 100-percent American, either nativeborn or fully naturalized."

Our order pushes this subject from a standpoint of national defense, appreciating also the subject's important bearing on the unemployment situation now so serious in our country. Your committee will agree that a Navy is more than ships; that trained per: sonnel, supply ships, and their trained personnel, are important elements that go to make up the efficient Navy; also that a part of our citizens should be sea-faring folks, from which experienced seamen and employees for our Navy may be drawn in an emergency: This is a position our country may reasonably aspire to attain, and it was with this desire in mind that our Congress so wisely provided and will maintain an American merchant marine.

We appreciate that during the World War, due to a lack of trained and fully qualified American seamen, it was necessary to modify the requirement as to full citizenship. That condition no longer exists. Today we must be training Americans on the ships of our American merchant marine, so that in future emergencies our Navy and the ships which supply and tend our Navy may be manned by Americans and the ships which carry out commerce on the seven seas may be manned by American seamen and employees.

That is a program embracing the training, in whole or in part, of a very large number of young Americans. At the present time this number could be had from among our unemployed college graduates, but all of this number need not be college graduates. Many are available who are skilled mechanics or farmer boys accustomed to hard work.

The success of our Navy may some day in the near future rest upon the carrying into effect of this policy. Remember, our rotating reserve of naval ships and our naval service of supply. They must be manned by Americans. Let us not only hope but plan to that end.

For whose Navy are we training personnel on these ships of our American merchant marine? It is a question to conjure if not investigate. Let me quote from the report of the congressional com

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