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ment the 1,000,000 cotton farmers who cut their output will receive about $409,000,000, or more than $400 per farmer, the Institute estimated.

The corn and hog producers of about 150 counties in the Middle West will receive payments and loans of about $550,000,000, or an average of $315 per farmer, the survey continued. The loan feature of this form of relief, the survey said, was growing rapidly and might be expected to reach $1,000,000 a day in the near future. The estimated crop reduction in corn in 1934 was put at 20,000,000 acres and the reduction in the number of hogs at about 25,000,000 head.

"About 450,000 tobacco growers in five Southeastern States will get about $40,000 in direct subsidies from the Government, in addition to aid through price differentials and other devices ", the survey said.

The survey closed with the prediction that the $200,000,000 expenditure contemplated for the relief of beef and dairy farmers might be found too low and that pressure from the beef and dairy interests might ultimately increase the umount to twice as much.

That statement I will insert in the record, with the further statement that I have no objection to those subsidies if absolutely necessary, but that shows that we are subsidizing various other interests, and yet the question comes whether we shall subsidize this business, which is more competitive with foreign countries than any others.

Mr. NEWTON. What appeals to me is that here is the one place where the subsidy is absolutely essential to the existence of the merchant marine. We pour subsidies into other places amounting to billions, and we get economical and parsimonious when we strike the one thing where the continuation of the existence of the commercial activity depends on it. I think the country generally does not realize how important it is.

The CHAIRMAN. After all, these are but the different delivery wagons

Mr. NEWTON. That is right.

The CHAIRMAN. Of industry and of agriculture and of commerce in this country.

Mr. NEWTON. Absolutely.

Mr. CULKIN. Sometimes the patient dies under some form of these subsidies, does he not, Mr. Newton ?

Mr. Newton. I think that the farmers that get subsidies in these various forms realize fully how essential it is, but I do not think they realize the full import of the need for this subsidy. However, I remember the day when I was in the campaign trying to overcome the handicap about the Panama Canal in my section. I realized that Missouri had lost three seats in Congress in 2 years and Kansas had lost 2, and that Iowa had lost 2, and that we had lost 17 seats in that section when I saw industries moving out of our Mississippi Valley to the eastern seaboard in order to enable themselves to sell their commodities on the western seaboard and even on the Gulf Coast-I went to work to try to do something to overcome that handicap, and I thought that low-cost water service would be the only way we could do it, and I never realized until we began to unload our goods at the Gulf that we had not gotten anywhere when we got them there, that we had to have ships that would be interested in carrying those goods to the markets of Central and South America, and to other foreign ports as well as the East and West of the United States before we get the full benefit out of the great expenditure we had made to open those channels in the valley.

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I think the farmer when he realizes that when he gets to the coast he has not gotten anywhere unless he has a ship that is interested in his goods and that will carry them to the place where there is a market, will then support a merchant marine with all his might.

The CHAIRMAN. I think that is absolutely desirable. But more desirable even than that is that the beneficiaries of these subsidies shall realize that they are not constituted for their private gain, and that these abuses which have existed in the last few years must stop.

Mr. NEWTON. Mr. Chairman, I think that if those abuses were removed, the problem of our subsidies would disappear. I do not think that they are all violating; I do not think they are all unfaithful; but the few bad examples have made a bad impression.

The CHAIRMAN. That is undoubtedly true; they are not all guilty.

Mr. NEWTON. But the few examples of the abuse of the subsidy has made the people sick and disgusted with the whole proposition. Of course, that is a matter of administration, but if we are going to have a merchant marine we must not only give Government aid but it must be administered so that the public has confidence in that administration.

Mr. CULKIN. And it must have an adequate and trained personnel.

Mr. NEWTON. Absolutely. We do not want to take the sailors on our merchant ships and pay them our money, and then when the time comes when we need them as transport auxiliaries for the Navy they are not American citizens.

The CHAIRMAN. And they must realize that the funds that are being received by the shipowners are accountable to the United States in their expenditures, and the closest scrutiny will be had of those expenses.

Mr. NEWTON. And we wonder sometimes in the interior whether the Government, in the use of those moneys, scrutinize closely enough the necessities of having ships that will be of real service as auxiliaries, because one of the purposes of giving financial aid to these lines is that they shall be auxiliaries, and if you give them to lines that are operating only for the profit they can get out of it and are not building up a personnel and are not building up a type of ship that will be Iseful when an emergency comes, then we are wasting our money. The CHAIRMAN. Thank you very much, Mr. Newton.

Any other witnesses to appear this afternoon? Because when we close this afternoon we will probably close subject to call of the chair, until we have the merchant-marine bill ready. If there is anyone clse who wants to appear now, we will be glad to hear him. When we get the bill ready we will want to have hearings in connection with the bill.

If there is no one else who wishes to be heard, we will stand ad. journed subject to the call of the chair.

(Whereupon, at 3:15 p. m., the committee adjourned, subject to the call of the chairman.)

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PART II. MERCHANT MARINE ACT, 1935

Hearings on H. R. 7521

14,4-35

TO DEVELOP AN AMERICAN MERCHANT MARINE

PART II, MERCHANT MARINE ACT, 1935

TUESDAY, APRIL 30, 1935

HOUSE OF REPRESENTATIVES,
COMMITTEE ON THE MERCHANT MARINE AND FISHERIES,

Washington, D. C. The committee met at 10 a. m., Hon. Schuyler O. Bland (chairman) presiding.

The CHAIRMAN. This is really a continuation of the hearings we had some time ago on the merchant-marine policy, based on the message of the President and also the interdepartmental committee's report. Opportunity was given many witnesses to appear before us at that time. If they did not appear it was their own fault, and we are going to push these hearings along to a conclusion. I want to get them through this week. There is no use to be putting off and delaying appearance, and persons who want to be heard can come up and be heard.

We will necessarily have to proceed a little out of the usual orderly way for the reason that tomorrow the hearings will begin again on the Senate side. There have been two hearings on the Senate side; but they have gone but little beyond the scope that we have already covered in our hearings, and we must proceed as rapidly as possible this week to dispose of these hearings, as we have hearings set on another matter for next week.

Now, there will be before the members of the committee, and also those present, committee prints of the bill on which the hearings will be based, this committee print being dated April 26, 1935. It may not be identically the same, but is practically the same as was used in the Senate at its last hearing and consists very largely of the elimination of the ocean-mail contracts, which do not appear in the Senate committee print, and also the Assistant Secretary of Commerce. That is not in the original committee print. There will doubtless be before the Senate committee another committee print which will contain suggestions—which will also be considered by this committee later-which have been worked on by Senator Copeland and myself. We have been cooperating in the preparation of these measures and constantly new questions arise, new problems and new amendments, and we are working them in as much as possible, in an effort to have the bills as nearly identical as possible, in order to save time.

We have also finished the hearings on all or most of the seamen's bills

, and the safety of life at sea, except the limitation of liability and, if there are any shipowners here, I will say hearings will be

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