Mr. HAAG. I knew it had declined very much

Mr. WELCH. Have you anything to suggest to this committee that might create a revival of shipbuilding on the Pacific coast?

Mr. HAAG. My opinion is that if a replacement program is started, even in the modest amount that has been stated, there will be sufficient work for the yards on both coasts.

Mr. WELCH. We have in the past asked for a differential of one-half of 1 percent, for that margin, and it has been denied us by the Department to which the bill was referred, and that margin was in favor of the Pacific coast shipyards.

Mr. HAAG. Is that still a differential of 1 percent?

Mr. WELCH. The yards asked for a differential of one-half of 1 percent and the report came back unfavorable. The purpose was to revive shipbuilding on the Pacific coast-not entirely to give employment or to revive shipbuilding insofar as it might affect the owners of the shipyards, but for the purpose of the national defense; for, to build a merchant marine on the east coast, it has to go through the Canal or around the Horn in case of emergency and that is a bad and a dangerous condition to have with this country at this or any other time.

Mr. HAAG. From the standpoint of strategy, it would appear there should be some yards on the Pacific coast.

Mr. WELCH. And the Government should do something to encourage those yards as a matter of national defense. But the Government up to this time has refused every appeal made from California, Oregon, and Washington for a revival of shipbuilding on the Pacific coast as a matter of the national defense.

Mr. O'LEARY. Have you any large yards there now?

Mr. WELCH. Perhaps there is one yard on the Pacific coast where a vessel of magnitude or size or importance could be built, and even in that yard they would have to build ways at a cost of half a million dollars. In case of emergency tomorrow, there is not a shipyard from San Diego to Puget Sound which could lay a keel for an off-shore vessel.

Mr. SIROVICH. Mr. Chairman, I am in full sympathy with Mr. Welch, of California, that we ought to have a development of the marchant marine, of the docks and yards there on the Pacific coast, because in the event of war on the Pacific we would have nothing to protect ourselves. And I would like to ask this question: Have you any idea, in the construction of a ship, say we spent a million dollars for the construction of a ship, what percentage of the million dollars goes to labor and what percentage of the money goes just for material? Mr. HAAG. I would say roughly 90 percent goes for labor.

Mr. SIROVICH. In other words, 90 percent of the construction of all ships goes for labor and 10 percent goes for equipment, and I had Mr. Harris tell me, of the United Fruit Co., that 85 percent of all the money that goes for construction goes for labor, and 15 percent goes for equipment. Therefore, by developing yards throughout the country and the construction of ships and purchasing of boat material in our own country, we would help to do away with a great deal of the economic depression we are going through, besides developing the merchant marine and helping unemployment?

Mr. HAAG. It would make for permanent recovery.

→ CHATEMAN You mean that much for labor, of course, in the ; in the allied industries.

T&AG Ortside, yes; because much of the material like shapes sies are gotten from the steel plants to build the ship, and much Las been put on those items starting from the raw materials. w.......i sav, so far as the labor in building ships is concerned, o consider the labor all told, not only that in the shipyard to je, it would run upward of 90 percent. And it also means » sv of employment that it is not only the seaboard that profits ship, but in the building of a ship every State in the Union sted, and in the operation of the ship every State in the 1 rep esented. So employment is well distributed throughout stry in both the building and operation of ships. KABAUT. Mr. Haag, is it your opinion that the devalued * assist our shipping?

I would prefer not to answer that question; I am not .ty on that.

Rabatt. I mean on account of its relation to the moneys and 7 systems of other countries.

HAAG I know so little about the monetary question that I am ano and to answer that.

Raneur. I have one more question to ask you: It has been - : tfore this committee by other witnesses that there have the abuses in the industry in the form of large salaries being it at the top of the ladder and then, too, in all industries there

of great prosperity and times of lesser activity which are erative, of course, in proportion to the work that is being done tistry. Now, if over a period of the life of the ships, for etal e, 20 years, we have both good and bad times, and if proper

was paid to earnings, would not shipping more or less be able riich to assist itself as an industry if there were not abuses in tastic structure, in the expenditure of funds such as has wet. re.eased here? Is not that a place, in other words, for a great

to be made, so as not to put this industry in an improper

HAAG. I do not know about a great correction. There may me abruses, there are abuses in every industry and those, I think, entere tiled and I feel, if there is a permanent policy for the ng industry and, what has already been advocated, a proper n of the company's books and a uniform system of bookthat in the future there would be no chance for any such That is all a matter of the administration of the law. 1. CHAIRMAN. I think it might be well to say right here that they it to be corrected and those who would receive this aid and who e teen gulty of those abuses might just as well learn now that rv Lave got to go along on an honest basis with the Government, or ..e the friends they have.

V- REBAT I have one more question. Now, in the type of vows in the construction of ships, we have a great many of the a that industry and there must have been some of those men at deve ped who did not have the 7 years' apprenticeship during period, but they had some experience in building ships and vet r any of those men would be getting up into the age of 40 years

and over, and there is a great feeling on the part of the American public that that type of labor is being discriminated against and that this would be an outlet for a good many men of that age if we go into this merchant marine ship building program. Do not you feel that? Mr. HAAG. Yes; I feel it would, because shipbuilders of long experience are always in demand. And this has been my experience around shipyards

Mr. REBAUT. They would not be apt to discriminate against them for age reasons, like they are being discriminated against in some of the modern speed-up production systems?

Mr. HAAG. No; I do not think so.

The CHAIRMAN. I think part of that discrimination arises out of the fact that in many cases they are dangerous occupations and they have to carry compensation insurance, and compensation insurance carries such a high premium on account of age that it automatically works a discrimination against them.

Mr. REBAUT. You are absolutely right.

Mr. HAMLIN. If more subsidy obtains, I am wondering whether the small ship-building concerns that is, places where there was formerly shipbuilding would probably start up, for I am a great friend of the small ship-building folks, the small works. For instance in Freeport, in my district, they used to do a great deal of shipbuilding there and I have now a Mr. Saul importuning me and wondering, for he is a very efficient man, if it is not going to be possible for him to start something there if a subsidy is obtained, and these smaller places will perhaps be started up in that line?

Mr. HAAG. I think it would stimulate the business of the existing small places; because all that goes with an expansion in the business means the building of tugs and lighters and miscellaneous craft which these smaller yards can very well handle without going to the initial expense of investing in ship ways and cranes.

Mr. HAMLIN. And would result in the bringing in of those men Mr. Rebaut speaks of, of whom there are so many around Freeport, that worked during the war for 2 or 3 years. I am glad you bring that out. Mr. HAAG. That would make a market for men of that kind.

Mr. O'LEARY. Mr. Haag, can you tell the committee why the International Mercantile Marine can operate the Majestic and yet cannot operate the Leviathan?

Mr. HAAG. I am not in a position to say. I know so little about operations that it would not be fair for me even to give an opinion on that.

Mr. O'LEARY. They are practically of the same tonnage and are sister ships.

Mr. HAAG. Practically the same.

Mr. O'LEARY. And the Leviathan is the fastest.

Mr. HAAG. I do not think there is much difference in speed between the Majestic and the Leviathan.

Mr. O'LEARY. I can recall making a trip across on the Leviathan, and it beat the time of the Majestic.

Mr. HAAG. I think the Majestic is probably a little longer than the Leviathan.

Mr. O'LEARY. Possibly a foot or two; that is all.

Mr. HAAG. Yes. But I do not know; I cannot answer your question, because I am not acquainted with the facts.

M O LEARY. You do not know of anyone who could, do you? HAA. There may be, but I do not know right offhand anyone NHS ROVICH. Does the gentleman know that in the operation of than they lose every trip from $50,000 to $90,000 a trip?

LPARY. So they state; nevertheless, I want to get at the n of it to find out the reason why.

HAA In answer to part of your question, let me put it this consumption on ships like the Leviathan and Majestic I *e type of machinery in those ships is identical. OLEARY I think so, too; they are sister ships, are they not? HAA5 Not exactly; the Leviathan was a little larger in tonnage Majestic a little longer. But I think, so far as the general are concerned, they are practically sister ships. But crave the old type of marine propulsion and the old type of hull. Las, tag% consumes about 900 tons of fuel per day or, roughly, Now, modern ships like the Bremen and some of the oges probably consume at the same speed about 600 tons. So is constay to operate those old vessels in competition with the ern ships. And, of course, if you have two vessels that to operate and you can eliminate one, there is a saving. y the one was eliminated instead of the other, I do not know. OLARY That is what I want to find out, because I do know este is in regular trans-Atlantic runs. HAAG Yes Whether she is a little more modernized than , I do not know. That may have something to do

O LEARY Well there was considerable money spent on the ag of the Leriathan here recently, in the last 2 or 3 years, to age- I will say the last 3 years.

Mr H Not being familiar with what was done to improve one of the ships, I cannot answer that question why one is run

↑ tue other.

SUROVICH The salaries on the Majestic, so far as the crew is **** ; are about half what they are on the Leviathan.

V OLEARY But then there is the mail subsidy, is there not? SEROVICH. That is why they took the Leriathan off.

CHAIRMAN There is no subsidy on the Leriathan.
ROVICH No; none at all.

S. COLKIN Does your program contemplate the stimulation of rnnel of the American merchant marine by any procedure

it is given an adequate, permanent status?

CHAIRMAN I do not know that the witness is here with a he is here simply to testify as to facts

(ULKIN Perhaps that was a little bit inclusive, but there to be a lot of inclusive questions here However, I will put it different form: Is it contemplated--what is your status way Mr Hang: what is your position?

He Chief of the Division of Shipping Research, Depart

! Commerce

CEIXIN And, of course, you are going into the question of are you not?

HAAG To some extent.

Mr. CULKIN. Well, is there any suggested procedure as to getting a permanent personnel after the fashion of the English, or the Italian, or the Germans?

Mr. HAAG. Well, we have a sufficient number of men available to draw from so far as personnel is concerned.

Mr. CULKIN. Is it not true that the American ships are manned sort of casually and from trip to trip, and the English sailors-I refer to the common sailor, the man of that type- remain permanently in the service with a prospect of retirement and that sort of thing? Have you gone into that at all?

Mr. HAAG. Well, you have there again a situation where a country and its shipping are firmly entrenched and it has existed for decades. Mr. CULKIN. I understand that, but what I am getting at is it contemplated now that they should be given some definite status? Mr. HAAG. Yes.

Mr. CULKIN. Have you any recommendations available on that? Mr. HAAG. I think there are some recommendations in the reports. as to improving the conditions for the American seamen and the personnel of the ships.

The CHAIRMAN. În the departmental reports you will find something on that-in the reports which are attached to the President's

message.

Mr. HAAG. In other words, to bring up the morale and the discipline and whatever is necessary to put them on a high standard, and also to encourage enlistment in the so-called "merchant marine. naval reserve.'

Mr. WELCH. Mr. Chairman, might I add, with reference to the matter referred to by me, for the benefit of the committee and of the witness, that the original appeal from the Pacific Coast States for a differential of one-half of 1 percent in the construction of vessels on the Pacific coast only applied to vessels whose home ports would be on the Pacific and operating from Pacific ports; therefore, not in competition with eastern shipyards or eastern shipping.

Mr. SIROVICH. Would that be just for export, or for intercoastal and foreign?

Mr. WELCH. For vessels operating from the Pacific coast. If they change the registry, they would cease to get the benefit of the one-half of 1 percent differential made by the Government. Even that was denied us.

Mr. SIROVICH. That bill was up before the committee 4 years ago. Mr. WELCH. It was referred by the committee to the Department, and the Department turned it down. If that is the national defense, I have another name for it.

STATEMENT OF VINCENT B. BENDIX, NEW YORK

The CHAIRMAN. Mr. Bendix, you asked me to hear you, I believe. You are a ship and freight broker in New York City. Will you state your street address?

Mr. BENDIX. No. 39 Cortlandt Street.

The CHAIRMAN. All right, sir. You have asked to be heard.

Mr. BENDIX. The fundamental foundation of a merchant marine in any country is the ship-building and ship-repairing industry. The United States can never have a merchant marine unless we have a ship-building and ship-repairing industry.