ow did we get to work in those yards? It takes years to cornetent shipbuilder, to serve your apprenticeship, and all of thing. We had to take barbers, tailors, prize fighters and qe shipbuilders out of them. There was no time for planexcept to produce the tonnage that the War Departinent sit our heads together: “What can we do; what have we got?" ~ one question was speed - how soon can we get it? It question then - "What are we going to do after the war?", mjestion of how much tonnage we could produce in the short fue time. ever was made We found we did not have enough yards to of the number of ships we needed. We had to build s vards to build the ships, so when we came down to the ́s to be bunt, there were suggestions, and many of them w of mine were "Why build ships like these? Have such ships before, are the plans available, the patterns, the templates, tree ice that ship quicker than another type?" "Yes.” st benid them sed in the shipbuilders and asked, "How many ways have "Have you room for any more?" "Yes." go ahead and build some more ways." And when we the types of ships that could be built quickly, we took the had baut before the war and said, “We have to build 100 of • of this 300 of this type", and so on in order to meet the urirements. And even after we did that and with all of the construction we found we could not meet the demands. d: 1 have a lot of lumber, and some one suggested, “What is weg with building wood ships; if a ship pays for itself in one or *ges, why hesitate?" the Army in France did not care whether their food and espe in steel ships, stone ships, or wooden ships, and we did he stone or concrete ships. CIKIN You built some concrete ships. Mr HA We had to meet the requirements of those divisions re being sent abroad and to do it with the utmost speed and as no time to quibble about the kind of ships or what the of those vesels would be. We did not know when the war was end the result was we did finally finish 2,300 vessels of a little over Mr HAAG No: because the Kaiser quit before that. Mr. HAAG. Few of the ships that were built under original Government contract came into use before 1918. The CHAIRMAN. The war terminated some 2 years earlier than it was expected to terminate. Mr. HAAG. We were getting ready to send another large army abroad and the new demand would have made necessary hundreds of additional ships. Now there has been great criticism and there is another point I want to clear up-why we continued to build after the war ended. We are charged with considerable waste and there was some waste, not only in shipping but in other industries. But we had constructed yards that fabricated ships, and the raw materials for those ships were manufactured and they were fabricated 100 or a thousand miles away from the shipyard. That work was all done and the manufactured materials were ready to go together and in the assembly plants we had, like Hog Island, the Submarine Boat, the Merchant Shipbuilding Corporation, and some of the others, it merely meant the assembling of that material. And certainly with all the material ready, and even the machinery and equipment ready to go in the ships-the sensible thing, the most practical thing, the most economical thing, was to finish the ships. But we did make a careful survey and found that we could economically scrap 958 contracts, and we did. Now, when we had that fleet finally finished (2,300 vessels of 9 million tons) a law was passed in 1920 which authorized an investigation be made to determine what services were necessary upon essential trade routes, and a survey was made and some of the best ships we had (practically all of them averaging 10 knots, and practically all of them pre-war design) were put in service. We attempted to make good use of those ships. They were put to work and in 1920 we had a thousand ships in the foreign trade. They were doing good work and at first really making money. We have had to use tools that were not suitable for the purpose. In the post-war era, we should have had ships that were comparable to those of our competitors, particularly if we were to entrench ourselves in such a well-established business as international carrying where countries for years, for decades and for centuries had been established in that business and we, with these poor tools, endeavored to compete with nations that knew shipping and had better equipment than we. And that is what we are still trying to do with the obsolete ships. That is the reason during the post-war era why we have not made any better progress. And it is not the fault of anyone that we did not build competitive ships. The prime purpose at the time was to meet the situation and to produce the tonnage the quickest way, and we did. And that is what we have now. Now if we had supported our shipping for the 50 years prior to 1914 and had paid this $20,000,000 a year that it has averaged in the last 6 years, it would have cost the Nation one billion dollars and, in 1914, we would have had an adequate merchant marine, in fact, such a fleet would not have cost $20,000,000 a year for all of those years. But, assume it did, it would only have amounted to $1,000,000,000 and it is very likely we would have saved two of the three billion dollars invested in 1917-18 and for which we have very little to show today. We would have had available in 1914 such a merchant fleet that is very questionable whether Germany would have challenged United States because we would have had a fleet suflicient to rt and maintain our troops abroad. A. CHAIRMAN. I think that is unquestionably true. ir (ULKIN. My question was primarily directed to this question: Wat is our present status as to equipment and yards at the present for the purpose of building this contemplated marine you suggest Mr Haag. I think the conditions are that such a program can be ately met right now. Y. CULKIN. And technically met? Mr SIROVICH. After listening to your interesting exposition, I t to say to you that in 1858 the American merchant marine had d the British through the Collins Line and other lines that oty jering the seas through the combination of steam and sailing ... and the cause of the destruction of the Collins Line, based Le study I have given to it, was the fact that our merchant was destroyed because we took away the subsidy from the s Lane and other lines and devoted it to the railroads that were developed in the interior. That was the responsible cause for sintegration of the merchant marine, because we were then ₫ 75 percent of our cargoes, of our country's exports, and we d down to 1890 and 1900 when we only had 15 to 16 percent carrying capacity of our own exports. If we had gone on, if *he giving of the subsidy had continued as we were doing through the ne, we would have developed a merchant marine by 1914 ated have saved us billions of dollars afterwards. N. HAAG A merchant marine probably more in proportion to that Great britain and what we had at the time when we nearly matched Britain about the middle of the last century. Mr SIROVICH. You remember that the Collins Line subsidy was LA'S AWAY. M: HAAG. I recall that. Mr Chow Then you would recommend, if the lack of an adequate tertant marine led us into war, that perhaps a sufficient merchant kanne might deter us or keep us from getting into another war in the .. Would that be your opinion? Mr HAAG. That would have a very great influence. You cannot take an adequate navy unless you have an adequate merchant marine the merchant ships that the Navy needs. CHAIRMAN. And it is not a fact that it was a disgrace to the ted States, when Theodore Roosevelt sent the Navy around the that he had to go to foreign nations to get colliers and the ry staps and tenders to accompany that fleet on its way around HAAG That fleet, when it went around the world, was accomjaes, by foreign-flag ships. ME HAMLIN. I do want to say how much pleased I am to hear you the war. Being in Portland and knowing the ship concerns the shapyards that we started in the war and started through besa ase everything, of course, was ships, ships to carry our men -even assuming that the foreign nations won't pay their bills which they owe us for winning the war, it is your opinion that proper subsidies we can have a proper merchant marine? Mr. HAAG. With proper subsidies we can have as competitive a merchant marine as any in the world. We can only acquire a proper share of our commerce to be carried in American ships when we have such a merchant marine. And I think that will come about automatically when we place at the disposal of the traveling and shipping public, ships on an equality with the competitor's. Our ships will be patronized, as has been demonstrated by the new ships we have put in the services in the last 5 years. Now there are two things that make for success in the shipping business: One is to operate as economically as you can and the other is to make it as attractive as you can to those using your ships. The CHAIRMAN. And is it not true, in your opinion, for I would like to have your independent opinion upon it, that without American ships upon the high seas and American presence at the conferences that are held by foreign companies to determine the rates at which they will carry the commerce of any particular country, and in this case that of the United States, that they could run up the rates on the commerce of the United States to such an extent that eventually they would make us pay their debts to the United States? Mr. HAAG. Well let me answer that this way: For a dozen years, foreign countries have carried almost 70 percent of the foreign trade of the United States in their ships. It has been stated that we are making it difficult for other countries to pay their debts by not letting them render us their shipping services. Now if for a dozen years they have carried the bulk of our commerce, it would seem that they did have an opportunity, if that is the medium by which they can pay their debts, to have paid part of their debts, or else it is not an effective way to do it. The CHAIRMAN. At a former hearing on another occasion, the statement was made that in the Boer War, in which we had no part, the withdrawal of ships from the normal trade and the increased rates of insurance and the increased rates of cargo carrying, resulted in the fact that we paid a large part of England's war bill. Mr. HAAG. I have heard that statement repeatedly, but I cannot prove that is so. The CHAIRMAN. As a matter of fact, it is true, is it not, that when the war commenced we had relied upon Great Britain to carry our trade and her ships were either withdrawn or the insurance rates run up and we had to pay the increased charges in the freight? Mr. HAAG. Well, it has been estimated that from the time when the World War began up until the time we got into it The CHAIRMAN. I am speaking now of the Boer War. Mr. HAAG. But the World War has a bearing on that question. An official report made by the Secretary of the Treasury in 1915 estimated that agriculture and industry paid foreign shipowners in increased freight rates during that year alone $311,684,000. It was estimated that our people were taxed over a billion dollars during the 3 years before our entry into the World War for transporting their products through increased freight rates. This vast sum went mostly into the pockets of foreign shipowners. The CHAIRMAN. Was it not about the time of the Boer War the withdrawal of the British ships caused a condition that the southern farmer could not send his cotton abroad and we had our "buy-a-baleof-cotton" campaign throughout the United States, in order to help thetton farmers of the South, because they could not ship on the mers of other nations that were withdrawn from our commerce? V- H、、g. I believe that slogan was inspired by conditions during the World War. The Chairman. I call attention to another thing: It has been before this committee on other occasions that after the World a when there was a British coal strike and foreign ships that were 2 our trade were withdrawn from our services, as a result of L'ey were not available to move the crops of the United States, on of the fact we had constructed so many ships in the war, arof which were laid up, the Shipping Board was able to put into .ce from 50 to 75 ships and to ship wheat and cotton out of Gulf 3 and it is estimated and has been frequently stated before this "ittee that the services of those ships in the movement of grain text $ 50 000,000, or brought $650,000,000 into the pockets of the *x* era as increased prices over what they could have gotten if they ka↑ not been able to ship their grain. Mr HAAG I think that was the report of the select committee of CHAIRMAN I am glad you mention that. I will say, for the t of the committee, that in the report of the Select Committee es, consisting of Members of the Senate and Members of se appointed to conduct an investigation into the operations Shipping Board, that statement is made as a part of the report. we saved at least that much. And in the testimony before committee in 1931, it was stated that, prior to the depression in 2 in 1921, the Shipping Board actually turned large sums of ev into the Treasury of the United States and that the total read to the Treasury up to that time, or subsequently, was 447 5. Have you any information on that? V- HAAG I think that is in one of the reports. HAIRMAN. It was certainly brought out in the former hearings tis committee that, in addition to that, the Shipping Board d to the War Department without charge services valued at ** (*) and, to the Navy Department, services valued at $8,500,banging the total of direct returns in savings to the Treasury, the $145.000,000 included, of $300,447,565. that with this merchant marine costing 34 million dollars, the sernment has gotten benefit from it so far ---Mr HAAG. Has received some benefits. The CHAIRMAN. And if we had had a subsidy, or an ocean-mail netract as you say of $20,000,000 running along through the period, d have had ships and the Kaiser would have hesitated a long before he would have affronted the United States and forced the Ted States into the war, if he knew she had the ships to carry our - the seas Mr WELCH Mr. Haag, in your answer to Judge Culkin's question the ability of American shipyards to construct merchant ships et any emergency, are you aware of the fact that not one vessel tever the foreign trade or intercoastal trade has been constructed Pacife coast since the war? Mr HAAG. I knew of that condition. Mr WELCH. And that shipbuilding for merchant ships has, in fact, a lost art on the west coast? |