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faily operating for 42 years, and has supplied the Government any ship officers during war.

I am authorized by the commissioners of the Massachusetts Nautiu. Snool to speak for them in this matter.

I am submatting to the committee with this letter a catalog of the Massachusetts Nautical School for the year 1934 35, and an annual t of the school for the year 1934.

11.9 CHAIRMAN. Thank you very much.

STATEMENT OF R. H. HORTON, MANAGER OF THE PORT OF PHILADELPHIA OCEAN TRAFFIC BUREAU

Mr. HORTON, My name is R. H. Horton. I am the manager of the Port of Philadelphia Ocean Traffic Bureau, which is a civic body compd of representatives of numerous other trade and civic bodies in tty, for the purpose of giving a unified opinion and action conng such matters as affected the port.

When I testched before the Senate con.mittee I gave my personal or in regard to title VII of the act. Since that time the Traffic Whispidished an editorial opinion, and it is a very important

al. It is perhaps the outstanding publication in regard to rates, services, and practices by carriers. I should like to read that es, total comment into the record:

We think the authors of the ship sul sidy merchant marine bill introduced in Cog gross liỷ. Senator Copeiand, of New York, and Representative Bland, of Var

a erode a mistake in providing for the creation of a body – the United Maritime Authority- to administer the prop sed subsidies and at the et me to exercise the regulatory powers conferred by the shipping act, the The sets and the Intercoustal Shipping Act of 1933. 1» Govert ment body charged with the duty of finding how much the various * Les provided for should be and of making contracts under the subsidy and aan provisions should have nothing to do with regulation of rates and practices. It is not sound to mix promotional and regulatory activities The CopelandFan-1 bill obviously contemplates that the Maritime Authority shall do all it can to promote the development of an American merchant mar.ne It would Be the Government agency through which various forms of Federal aid would to exteralex to the ocean shipping industry; it could not at the same time poswa?' at impartiality that should be found without question in a body that is toreviate

It seems to us there should be no question as to what the proper disposation Để thìn canne should be. One important reason why the Shipping Board did not command the respect it might have had was that it was a shipowner, a promo* a: Institution, and a regulating agency For years, when it controlled the largest single merchant fleet in the world, it paid little or no attention to its regulatory duties. Only recently have the provisions of law relating to regu„atun of ocean shipping been receiving the attention they should receive and era, resent set up is not a desirable one. The abolition of the Shipping Board by Executive order of the President and its transfer to the Department of Comrørre has not changed the fundamental situation. The Department of Commerem is simply carrying on the duties of the Shipping Board, though it is paying ore attention to the regulatory side of its work than did the Shipping Board. Adminstration of the subsidies proposed for the American merchant marine, It seems to us, could well be left to the Department of Commerce That Department could also carry out the promotional activities directed by law and adminlater the navigation laws, as it does now. However, it is immaterial, we think, where this phase of the work is carried on, if provision is made for regulation by armpartial, competent agency, not charged with financial or promotional activities. There might be a separate agency created or the Eastman proposal for a water division in a reorganized Interstate Commerce Commission might be adopted.

If there is to be new shipping legislation enacted at this session of Congress, we hope the mistake will not be made of creating such a body, with the duties outlined, as proposed in the Copeland-Bland bill. Such a body would be seriously handicapped at the start and it probably would wind up just as did the Shipping Board-without a tear being shed for it when the ax fell.

The CHAIRMAN. Mr. Horton, this bill undertakes to separate administrative functions from the quasi-judicial and regulatory functions, because the old Shipping Board was swamped in administrative functions.

Mr. HORTON. I am sorry, but it would appear to me that title VII, regulation of rates and practices, was in the hands of the Authority, and they are the ones that grant the subsidies.

The CHAIRMAN. Yes; that is true.

Mr. HORTON. That is the point that we make. Let us say the Board sits today in conference with shipowners or operators, and they determine that they will promote a line to a certain district, and they grant it subsidies and loans and help it to build ships. They are interested in that traffic, and they are interested in that trade. The next day they turn around and, with a shipper as a litigant and that same company as a litigant, they sit as a judge, when yesterday they were promoting that company. It is a difficult situation for any one man to undertake with clear impartiality, which I think is difficult in any case. It takes a particular type of mind.

Mr. WEARIN. In line with that thought, I presume you are acquainted with the fact that the President recommended in his message that the quasi-judicial and the quasi-legislative duties of the United States Shipping Board be transferred to the Interstate Commerce Commission?

Mr. HORTON. I am aware of that; yes.

The CHAIRMAN. Do you think the Interstate Commerce Commission is a body to be properly vested with these rate and regulatory powers over water carriers?

Mr. HORTON. I think it could be.

The CHAIRMAN. I do not agree with you-at present, anyway.
Mr. HORTON. There is a lot of disagreement on that point.

The CHAIRMAN. I will still be open to conviction, but at the present time I do not agree with you.

Mr. HORTON. I will tell you on what I base that, Mr. Chairman. It is this: You have a group of men there that are doing a very splendid job for the railroads, a regulatory job.

The CHAIRMAN. Some people think they are almost regulating them out of existence.

Mr. HORTON. There is something to be said on both sides. But regulation is a job in itself. I think a group of men can be brought together to regulate water carriers, but whether they go under the banner of the Interstate Commerce Commission or not I do not think makes much difference.

The CHAIRMAN. When you deal with foreign commerce and foreign transportation, they know absolutely nothing about the competitive conditions among water carriers.

Mr. HORTON. I think that is true. I think they ought to be distinctly separate, but with a liaison machinery such as you have set up in here with this interrelation board, which, though I am not

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a to talk about the water carriers' bill, appears to function in that through the control board.

Mr WEARIN. If this authority were to be vested in the Interstate Coerce Commission, in all probability in the future a portion of tat Commission would devote its time to this particular problem. Mr. HORTON. That is the way I view it.

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CHAIRMAN. Yes; and be out voted by the rest of the Com

Mr Hors As I understood it, each section made its own decither the control group had 1 truck man, 1 air man, 1 water man, (1 val man.

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HARMAN. That is three against one.

Mr H RION. I do not like that.

19,6 CHATEMAN. Then another organization was to be set up, in Mr Eastman was to be the man at the top, the dictator. Vr. HORTON. I am really not prepared to go into the detail of that. 1 - CHAIRMAN. Nor am I.

Mr Heros. The only point I make here is that I think the regulation should be separate from the promotional activity.

Isere is one other thing, in section 506 (b). I appeared at your at 125 previons to the introduction of this bill. I think sonie of mrs will remember that I mentioned the fact that the bill 1 be so drafted that it would perm.t Philadelphia to obtun 1st services which we are now prepared to promote; 506 (b) reads: u i, evntract shall be ma le with reget to a vessel to be oper, ted on a rite served by citizens of the Urf d States u boss the A.' [. denta de boat the service already pro di mon sich route of te, and that in the public interest ad l.tional vess is shall be operated

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I will cite an example to make it a little more brief. Let us take ---rvice in South Africa. I think there are four of five British

operating there and one American line. There is a sailing t once a week by the British lines, and an American ship sails topce a month. There are plenty of ships to carry all the that is offered.

1. CHAIRMAN. Your objection to that is that it ought to -how at there is not an adequate service of ships under the American flair!

Mr HRTON. Under the American flag and relate back to the 50perent provision.

The CHAIRMAN. I agree with you. That was intended at the time, ai I think there is a doubt about the expression. I thought so wien you testified before the Senate committee the other day. Mr HORTON. Thank you, sir.

The CHAIRMAN. Your point is well taken on that.
Thank you very much, Mr. Horton.

STATEMENT OF FRED B. RYONS, CHAIRMAN OF THE LEGISLATIVE COMMITTEE OF THE MILITARY ORDER OF THE WORLD WAR

Mr. Rrox. My name is Lt. Col. Fred B. Ryons. I am chairman of the legislative committee of the Military Order of the World War, an organization composed of officers who served with the Allies dur

ing the World War. We are here to try to be helpful in the establishment of a merchant marine.

Under section 801, as I testified before the Senate committee, we would like to have the wording of this section changed to read:

All vessels operated under any contract made under and pursuant to this act shall be manned in their deck and engine rooms and steward department exclusively by citizens of the United States, native born or completely naturalized. Section 802 has our entire endorsement. We believe that the establishment of an academy is necessary and desirable. We believe it should be under the Navy Department; that the training should be carried on along the applicatory system-that is, including the theoretical training and the practical training on board ship at the same time. We commend the very good work that is being done by the several States in this line.

On page 49, under "Repeals ", we believe that a provision should be added to that section incorporating the language contained in H. R. 67, known as the "Bland bill ", which has passed the House.

Our organization believes that a merchant marine is absolutely necessary for the proper functioning of the Navy.

The CHAIRMAN. The bill to which you there refer, H. R. 67, is a bill repealing the language of the immigration and naturalization law which permitted 3-year-certificate men to have the benefit of being considered American seamen.

Mr. RYONS. Yes, sir.

The CHAIRMAN. The bill has passed the House half a dozen times and is now pending in the Senate.

Mr. RYONS. It is necessary in order to make this bill complete in its objective, which the committee that prepared this bill intended it should be, that these ships be owned and manned by Americans, inasmuch as the Navy depends very largely on the service of these ships of the merchant marine to supply it and tend it in case of an

emergency.

Mr. WEARIN. Would you say exclusively?

Mr. RYONS. Exclusively.

The thought is that in giving this subsidy to the shipping companies we are doing something that is absolutely necessary for their continuation at the present time. To visualize the merchant marine of the future, such as we all desire, we would add to that the very necessary element of tonnage. Tonnage is the backbone of any successful merchant marine.

Our country has grown to an extent where great distances enter into all of our calculations and considerations. During the period of the clipper ship, when the country was limited to a small strip of land along the sea coast, the question of distance did not enter into the consideration and our clipper ship was operated successfully.

Today, as you have heard explained, the development of coal, the development of iron, the development of cotton in our great Mississippi Valley, the development of wheat and agricultural products, all come into the picture.

If it is necessary in order to make the operation of our merchant marine a success, it may be practical and desirable that the Govern

rt absorb the freight rate on all the commodities produced in this try, or produced and processed in this country, from their point origin to the seacoast, on the proviso that they be shipped abroad : American bottoms.

It is a subsidy which will function in this way: It will encour12 the agricultural element of the country to produce more; it will freight for the railroads to carry; it will create a buying wer in the agricultural elements which will put the factories to ward will solve the unemployment problem in large measure. Ihared out, roughly, that to start it would take about $225,000,000, It w save the railroads from going into bankruptcy. It will rete the farmers and the small producers that are located a large -tae from the seacoast. It will enable all of those industries to exert their surpluses. And the greater the amount is, of course, the **ater amount of freight rate that would have to be absorbed by the Fal Government. But the money will be returned to the Federa, Grovernment in taxes which these people will be able to pay, which they are not able to pay today.

in the last anlysis it will not cost the Government anything; it rhailitate the agricultural industries in the interior; it will give torage to the railroads; it will start the factories to working; it will 1e unemployment; and it will guarantee to the merchant marine, the American bottoms, the tonnage which is absolutely essential to their fir al success.

I just offer this as a thought: It occurs to me that the problem is a question of subsidy. That will serve the immediate necessities, ⚫t the immediate problem that you must solve is the problem of prog tonnage for these American bottoms to carry abroad.

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I tae CHAIRMAN. There is a lower freight rate on shipments to go a-l than on domestic shipments, is there not?

Mr RYONS, Yes, sir; there is at the present time.

I. CHAIRMAN. But in that export freight rate there is no dison made as between ultimate shipments in American and in n_bottom!

Mr. RYONS. That is the thought.

156 CHAIRMAN. There is legislation on the statute books under which a benefit could be given to American shipping; but that, too, one of the measures which have not been carried into effect. Mr. Ryons. As I visualize this, if you are going to put the mercant marine across as you and Dr. Sirovich this morning expressed ur desire to do, it is necessary to have every State in the Union d it, to have the entire country behind the movement. Then we will get a merchant marine such as we all desire and such as I far the shipping interests have never visualized. We can get to tr. at point by making it put dollars in the pockets of the men in the interior, the small manufacturer, the producer of cotton, and the prosincer of other commodities. Then you will get the country behind it, and then you will get a merchant marine, and you will have torrage for these ships to carry, and your subsidy will not appear to be the all-important problem it appears to be at the present time. at these hearings.

The CHAIRMAN. Thank you very much.

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