ger than 15 years. No American ship requires more subsidy Snovich You would grant subsidies to intracoastal lines? Vir SOVICH How about the differential in the personnel operathem For instance, would you make the wage higher to 1. senten, our own American personnel, than on foreign lines? Mr Expry You would be surprised to know that, at the present st differential is very small it, as I have just stated, in the foreign trade, the wages paid by tearest foreign competitors should be paid in cash by the Ameria.. st.p-owner to his men; and the difference, as ascertained from time 1 - ta on, would be paid in cash by the United States shipping commisers at the Ameri an ports and in cash by the consular representato of the rated States Government in foreign ports; and the ships de subsidized as individual units. re would be no interference with anybody who wanted to run a ...e of staps to any place. We would not interfere with any mail ents pist pay the poundage rate. M- O LEARY. How are you going to take care of any overhead in ༣༽་ BENDIX There should not be any difference in the overhead; ; ; there is not, in fact, any difference, in well-regulated offices. You arn the foreign ship, operating out of an American port, with overhead. Mr O LEARY There is a certain amount of overhead attached to and every unit, is there not? Mr BENDIX. Yes, sir; but there is no office overhead in connection ... A. en an ships that does not apply to foreign ships running in trade As a matter of fact, I think that the foreign agents in York receive more money and pay their employees, in their more money than the American companies pay for similar Mr O LEAKY. That is contrary to all that has been presented to expaattee before. We have been led to believe that the Amerian echipanies are paying more money all along the line. Mr BENDIX. You are led to believe that; but further investigation stow that much of the moneys which the American ship companies are paving are entirely unnecessary. The only differentials in the cost of operating the American ship re for the wages and food, which cost a little more, to feed and build repair, and the repairing costs do not amount to a great deal. Mr O LEARY. And the carrying of the differences in the interest e. arges in this country and the cost abroad and the insurance pre Mr BENDIX. The insurance premiums and the interest costs, I have said, should be taken care of by 75-percent mortgages, at 2perent interest. Mr. O LEARY. That is how you intend to take up this difference in the insurance costs and the difference in the cost of the fuel? Mr BENDIX. The difference in the insurance costs is very, very Mr. O'LEARY The difference in the insurance costs is very little? We had it testified here this morning that the difference in cost in a million-dollar ship, for construction, was roughly four hundred thouand; and, necessarily, if the cost of that ship is to be insured, the insurance, naturally, should cover that difference in the cost, because that much money has been expended. Now, is it your idea that the cut in the interest rate, of 1% percentit is 3% percent interest now, is it not? The CHAIRMAN. Yes. Mr. O'LEARY. Is it your idea that the 11⁄2 percent cut in the interest would take up all this difference? Mr. BENDIX. You have heard it testified that a ship that costs, in the United States, a million dollars to build, that ship costs four hundred thousand more in the United States than in a foreign country; and I have just testified that that ship costs too much in the United States; and that we will have to bring down that cost. Mr. O'LEARY. Let us admit that we have just been told, this morning, that the greater part of the cost of the ship is labor. Mr. BENDIX. Yes. Mr. O'LEARY. So we are paying too much for the labor and, according to your statement, we will have to bring down that labor cost in the construction of our ships? Mr. BENDIX. They told you that, but it is not the fact. It is due to the tie-up between the steel mills and the shipbuilding interests Mr. CULKIN. What is that tie-up between the steel mills and the shipping interests? Mr. BENDIX. And the American ship steel competes with British ship steel over on the other side. The CHAIRMAN. What lines in this country are owned by the steel companies? Mr. BENDIX. Steamship lines? The CHAIRMAN. Yes. Mr. BENDIX. The Isthmian Line. The CHAIRMAN. What other lines? Mr. BENDIX. The Calmar Line. The CHAIRMAN. Who owns the Calmar Line? Mr. BENDIX. The Bethlehem Steel Co. owns that line. The CHAIRMAN. Now, you take the other 31 ship lines, as I recall, that are receiving ocean mail-probably more than that-how many of them are owned by steel companies? Mr. BENDIX. Oh, I do not know offhand; but, as I get down the line I will The CHAIRMAN (interposing). You made a general statement. The CHAIRMAN. That the steel companies owned interests in the ship lines. Mr. BENDIX. No; in the shipbuilding companies, in the shipyards. The CHAIRMAN. What shipyards? Mr. BENDIX. The Quincy plant of the Bethlehem Shipbuilding Corporation is one and the Federal Shipbuilding Corporation is owned by the United States Steel Corporation. The Bethlehem Shipbuilding Corporation, in Baltimore, is owned by the Bethlehem Steel Co. The Union Iron Works, in San Francisco, is also owned by the Bethlehem Steel Co. The Newport News plant is independent; but it has a close tie-up with the Bethlehem Steel Co. all the way around. Those are the principal concerns. The CHAIRMAN. What tie-up has the Newport News plant? ↑ @ Chairman. That is a general statement. Now, give the facts BENDIX. Well, they usually, according to the hearings on disanent, by the disarmament committee over here you could y get more information on what that tie-up is from them. But Corated the work that the United States Navy did. it in any event, there is a tie-up between the Bethlehem Shipg Co. which is the biggest in the United States, and the Febern Steel Corporation. Now, the Bethlehem Steel Corpora actually exports ship steel to Great Britain, where there is etition from the foreign steel makers. NT RABAUT What proportion of the cost of a ship would the steel VT BENDIX Well, in a 10,000-ton ship there is approximately 45 betres tons of steel; and your approximate cost, I assume, of that would be about $150 a ton. Air Strovich Well, even on the basis of those figures, according the testimony which has been rendered here today--let us take a rete ilustration: We build a ship that costs a million dollars in e private shipyard, irrespective of who owns it. If 85 to 90 perof that cost is for labor, then, out of the million dollars, there is ou to $500,000 that would go for labor for the work that they ne in converting the raw materials. Is that right? Mr BENDIX No, sir; I do not think that 85 percent of that cost stip is for the labor. STKOVICH, Well, that is the statement of experienced men, who thorities on the construction of ships, just like you are an anty on the selling of the ships. You are not an authority on nstruction of ships, are you?" Mr BENDIX I am an authority on market conditions, Mr. S.ROVICH And market conditions are the conditions that the in the market are conversant with, because they are the men by and sell; and the costs and conditions of construction are conditions that men engaged in the construction of ships are ..iar with, including the cost for labor. w, if that be assumed, that is, as to the labor item, that it is greater than all the balance and is 85 to 90 percent of the total, t... on the million-dollar ship, the balance that is left, $150,000, d go for the other elements of cost and the materials that are try to be put into the ship, like the steel, machinery, and other t' that go in to make the finished product. Is that correct? Vr Bendix. On that assumption, yes. Mr SIROVICH. I am assuming that the facts and figures given us we correct. Now, you come here and say that that is entirely wrong. Mr BENDIX That is not fair to me. Mr SIROVICH. You have attacked that statement; and it is unfair tate then who come here in good faith, to challenge their statements e you are going to give us the facts as to those costs. Mr BENDIX. I will challenge the statement to the point of saying at I do not admit that 85 percent of the cost of the ship is labor. Mr SIROVICH What percentage of the cost of construction is labor? Mr BENDIX. I would say 60 percent. Mr. SIROVICH. On what do you base your statement? Mr. BENDIX. On the actual costs of doing work, which I know from the ships that I have repaired, just how the labor costs are made up. Mr. WELCH. If I am permitted to state at this time, I think that, perhaps, a confusion has arisen. Perhaps you refer to the fabrication and the assembling of the materials that go into the ship under actual construction; and the Doctor has in mind, following the testimony, as we all have, that the construction of a ship, as far as labor is concerned, goes back of the actual fabrication and assembling of the particular parts. It goes back to the mines, back to the raw materials used. Mr. BENDIX. Yes, sir. Mr. WELCH. And, going back that far, it reaches 85 percent to 90 percent. Mr. BENDIX. It reaches about 60 percent. Your taxes are Я considerable element. Mr. WELCH. Your figures are contrary to those of every other authority. Mr. CULKIN. What is the cost of constructing a 10,000-ton ship in the United States? Mr. BENDIX. In the United States today the regular 3-island ship, the cheap ship, around $111 per dead-weight ton. Mr. CULKIN. How much does that amount to per ship? Mr. BENDIX. That is $1,100,000 for a 10,000-ton ship. Mr. CULKIN. You said that approximately 4,500 tons of steel go into that ship? Mr. BENDIX. Approximately 4,500 tons is steel. Mr. CULKIN. And you say that steel costs $150 per ton? Mr. BENDIX. Approximately, averaging the cost. Mr. CULKIN. And that would make an item in the construction of this 10,000-ton ship of $675,000? Is that right? Mr. BENDIX. About. Mr. CULKIN. And you attribute the high cost of that steel to the tie-up between the shipbuilding companies and the steel concerns? Mr. BENDIX. No. No; now you are changing it. it. Mr. CULKIN. I do not want to change it. I want to be fair about Mr. BENDIX. The $150 per ton is on the actual steel, the weight of the steel in the ship. In other words, $675,000 of that $1,100,000 is the cost of the steel and the fabrication, putting it together in the ship. Mr. CULKIN. That includes the work on the ship, in the fabrication of the steel? Mr. BENDIX. Yes, sir; and your other $400,000, approximately, is for your interest and so forth. You have practically got the ship built. Mr. RABAUT. About $350,000 of that would be the steel in the job? Mr. BENDIX. Yes. Mr. RABAUT. All right. What is the cost of the steel before it goes into the job? Mr. BENDIX. It is the railroad freight and labor. That is the reason we can't get any ships. Mr. RABAUT We hope that a great deal of this is labor. We are set in inbor BENDIX Yes. industrial carriers should not, by any stretch of the imaginaa.owed to receive any of the construction loan fund money, tridies They should be abolished in the protected trades e United States has jurisdiction and no subsidy should bo them in the foreign trades. Industrial companies use these s to ti rottle competition, and are doing so at the present time, 1.29 is being done partly with Government construction loan a: 4 Government subsidies. elated Fruit Co., which had never owned an American steamer formation and, with few exceptions, had never even chartered erican steamer until the war, and fought the American merchant - when they could, engaged in a rate war with the Shipping and, when they finally found they could not beat the United Ates Treasury, they became advocates of the American merchant and came down and got Government money to build ships a mail-contract subsidy to run them in the intercoastal Mr RABAT. You have made some statements that I would like ve you back up. Why should they not run them in the inter trade Mr Baspix. Because they are competing with American comthat paid for their ships and enjoy no subsidies whatever and sto..d not be subsidized to run over their competitors in the Postal trade, where there is no question of competition with -Lipparat have in those services such concerns as the Luckenbach Co., D Mallory Co, and the American Hawaiian Steamship Co., - went out and paid for their ships and got no subsidies and are t practically entirely upon operating in the protected trades. ertainly it is most unfair to take those ships, built with Govern1 fnds, at low rates of interest, and give them subsidies and t them to run a subsidy mail contract along protected routes m; ary of those other concerns, who have investments in their Vir KABAUT Wait a minute. How safe would these investments ese compames be if our whole country were in jeopardy? And are of the opinion at this time that it is about time that we should feet the old U S. A BENDIX. You should protect the U. S. A., and in protecting A you should not interfere with our constwise, practically terre s-tal, lines What we should do is to build up an American hant marine for foreign trade. Mr. S.ROVICH. How about some of the intercoastal ships that get a ady and that run through Central America and stop off for 5 hours and then go through the Canal? : BENDIX. That is thoroughly and entirely unjustified. Mr SIROVICH. Is not that taking away the protected trade of the M BENDIX. Certainly the Luckenbach Steamship Co. went out and to ght their ships and paid $350 a ton for ships that they are - in competition against these subsidized companies. I don't they can do it and live. |