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: Mr. Bull. That is one thing I want to speak of right here. In our service to Puerto Rico we are the only line--we run a weekly service out of New York and weekly service out of Baltimore to that island--that has not either directly or indirectly through subsidiaries a mail contract under the Jones-White bill. In this bill you note that you said under section 504, I think in the old bill, 505, that any ship that gets a subsidy shall be operated exclusively in the foreign trade.

Then if you turn back to the definitions that are in this typewritten article here, on page 38, section 1011, you will see after the first two lines, then commencing there, that it cuts out that requirement as far as Puerto Rico is concerned, and the same competition that we are having at the present time with subsidized lines will continue under this bill. That, I think, is unfair. In the case of a rate war, how could we compete with them?

Mr. LEHLBACH. Is not that a request of some years' standing of the Governor of Puerto Rico?

Mr. Bull. I do not know who put it in there, sir, but even so, that does not make it fair that we have to use our own money. If he wants me to have that instead of competing, all right, give me a subsidy down there. But I do not know who put it in.

The CHAIRMAN. In other words, the provision of which you complain provides for subsidized lines to Puerto Rico.

Mr. Bull. It provides for their going in there. How can I build another ship or go on building for that trade?

The CHAIRMAN. Puerto Rico is in our coastwise trade.

Mr. Bull. It is in our coastwise service. The Governor says, "You ought to build more ships." I say, “ All right, I will build more ships.” But I cannot go in and run the risk if every line going to South America has a subsidy and can stop at Puerto Rico and compete

How can I? Mr. LEHLBACH. You may recall, Mr. Chairman, that the Governors of Puerto Rico have for some years been agitating the question of letting ships in foreign commerce make calls there in order to give Puerto Rico more adequate service and better connection with the United States.

The CHAIRMAN. I did not recall that as to Puerto Rico. I recall that very distinctly as to the Virgin Islands. One reason that we have not granted that permission to the Virgin Islands is because we are satisfied the minute we did it Puerto Rico would be right in the same boat.

Mr. LEHLBACH. We have never done it. It is proposed in this bill as new legislation.

The CHAIRMAN. That provision is in the bill.

Mr. Bull. Last year there was a bill introduced in Congress by Mr. Lanzetta to open up the trade there.

The CHAIRMAN. I think there was, and I think there is such a bill pending now. It has never been considered by the committee.

Mr. Bull. The Chamber of Commerce of Puerto Rico at that time made a very exhaustive study, and I should be very glad to send the committee a copy of that. They have no complaint, and they say they have no complaint of the service we have rendered out there; and I think you will find that the Government will say the same thing.

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with me.

The CHAIRMAN. I know this, that a Governor of the Virgin Islands was very insistent that the Virgin Islands should be taken out of the coastwise law.

Mr. Bull. Yes, sir. The CHAIRMAN. This committee has never favorably reported that bill. One of the reasons that has given me a great deal of concern, and I think the other members of the committee, too, has been that if we did take the Virgin Islands out of the coastwise laws it would mean the diversion of business from Puerto Rico which was in the coastwise laws.

Mr. Bull. I think that is correct. The Virgin Islands are still under the authority of the President. The coastwise laws do not apply to the Virgin Islands, but he can enforce the coastwise laws at any time he sees fit.

The CHAIRMAN. It is by order entered every year, excepting the Virgin Islands?

Mr. Bull. Yes, sir.

The CHAIRMAN. They wanted us to except them until such time as they should be brought by law into the coastwise laws. Then they expected to go ahead and build up docks and that sort of thing.

Mr. Bull. Yes, sir.

The CHAIRMAN. We felt that if we gave them that advantage and let them build up the docks, they would then come back and say that having gotten that advantage they ought not be brought back into tke coastwise laws again.

Mr. Bull. I think that would be correct.

The CHAIRMAN. In the meantime there would be a diversion of business from Puerto Rico to the Virgin Islands.

Mr. BULL. I think you are correct. The CHAIRMAN. That is the trouble that has always appeared. That bill is still pending before this committee at this time, introduced by me but introduced simply by request because it came from the Department of the Interior. Personally, they have not convinced me yet.

Will you please proceed, now?

Mr. BULL. That is all I want to say. I do want to say this, that I think the construction loan—I do not mean the subsidy connected with it, but if we cannot borrow money from bankers, I think that on coastwise services where you want to replace a boat with a better boat and build a better boat to replace a boat, you should turn the boat over to the Government or scrap it. I would like to see that provision.

The CHAIRMAN. Personally, I want to congratulate you and the Bull Steamship Co. that it has not been an applicant for Government aid, that it has stood on its own feet.

Mr. BULL. Thank you very much.

The CHAIRMAN. We will adjourn until 10 o'clock tomorrow morning, at which time Mr. Campbell will resume.

(Whereupon, at 5:10 p. m., the committee adjourned until 10 a. m. Friday, May 3, 1935.)

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TO DEVELOP AN AMERICAN MERCHANT MARINE

PART II. MERCHANT MARINE ACT, 1935

FRIDAY, MAY 3, 1935

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

Washington, D. C.
The Committee met at 10 a. m., Hon. Schuyler 0. Bland (chairman)
presiding.

The CHAIRMAN. We will hear first Mr. Moran, who is a Member of
Congress.

STATEMENT OF HON. EDWARD C. MORAN, JR., A REPRESENTA

TIVE IN CONGRESS FROM THE STATE OF MAINE

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Mr. MORAN. Mr. Chairman, on March 4, last, the President of the United States, in a message to Congress, presented the question as to whether or not the United States should have an adequate merchant marine. He answered that question in the affirmative. In a vigorous message, he enunciated as an integral part of the administration's national policy, that the abuses, waste and subterfuge which had accompanied the previous pouring out of vast sums of public moneys, with no substantial result except the enrichment of a few privileged insiders, should cease. He demanded that the American people should be given the opportunity to have and to use American ships. He called for legislation which provided not only for adequate appropriations to that end, but also safeguards for their expenditure and, consequently, for a complete reorganization of the machinery for the administration of these public moneys.

It is my contention, proved by ample evidence produced by the Postmaster General's investigation, that that high and desirable purpose of our great leader in the White House is not only no nearer fulfillment by the bill-or, shall I say, by the various bills which are being confusedly presented to Congress—but that his purpose is being grossly frustrated and betrayed. It is my opinion that the pending legislation not only perpetuates the flagrant abuses of the past, but intensifies, magnifies, and aggravates them.

The CHAIRMAN. How do you come to that conclusion? Mr. Moran. I was going to ask, Mr. Chairman, if I could just follow that along in that way, just stating things I am going to try to demonstrate then, from then on, I am going to try to demonstrate them, if I may be permitted to go on down in that way. Then, if I do not do it, I will be glad to answer questions.

The Chairman. It is a surprising conclusion. Go ahead.

Mr. MORAN. Ample evidence has already been collected, much of it not yet made public, by the Postmaster General's investigation

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to make it plain that the special privilege and favoritism which have characterized the conduct of our merchant marine are continuing and will continue unabated. Again, as before, it is the beneficiaries, the few powerful individuals enriched from the Public Treasury to the detriment of 100 million American people, who are dictating, are shaping, indeed are actually writing the legislation which it is proposed to present as an evidence that there is a "new deal” in shipping. There is no “new deal” in shipping if this legislation passes. It is the same old steal played with jokers and with aces up the sleeves of those who have received millions and given the American people next to nothing in return.

The CHAIRMAN. Well, those are general statements and they are very surprising statements and I certainly want you to present your proof of them. And you can prepare a bill

Mr. MORAN. I have a bill

The CHAIRMAN. But every effort has been made to protect the American people; all the framers of this bill have had that definitely in mind and they have adopted a course which they believe will protect them.

Mr. Moran. Mr. Chairman, I have prepared a bill —

The CHAIRMAN. It is such a vicious attack that I want for one, that you submit your bill.

Mr. MORAN. Mr. Chairman, I have written such a bill. I introduced it in the House yesterday and it is being printed. I have made efforts to get it this morning, so far without success. I imagine in a matter of minutes or hours the bill will be available.

(See appendix.)

I for one propose to uphold the President. I shall not be silent in the face of this crass nullification and betrayal of his high and worthy purpose.

It is difficult to know where to begin in analyzing this thoroughly vicious bill, particularly vicious, I may say, as its various provisions seem to shift and change like a kaleidoscope. The President said that the present system of mail contracts "is an unsatisfactory and not an honest way of providing the aid that the Government ought to give to shipping", but the bills now pending before this committee (I refer to title III) continues this "dishonest" system in aggravated form. It is true that it takes away from the Postmaster General supervision over the mail contracts, but it gives this new Maritime Authority unlimited discretion to continue this dishonest subterfuge for an indefinite period.

The CHAIRMAN. I call your attention to the fact that in the committee prints which have been available now for some days, the ocean mail contracts have been entirely eliminated.

Mr. MORAN. Of course it has been difficult, Mr. Chairman, to follow the various committee prints and I secured the one I obtained yesterday here at the desk and was talking along that line on that particular point.

The CHAIRMAN. And of course the necessity for speed and the importance of the consideration has prevented consideration of many matters, except as we proceeded with the bill. This bill was prepared by Senator Copeland and myself and I am very much surprised at such an attack.

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