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Mr. DOCKWEILER. Mr. Chairman, I want to put the Sixteenth Congressional District of California in the record here as favoring, first of all, this new milestone, which I consider a great advance in the method of handling our merchant marine from the Government standpoint. Of course I have always believed in a subsidy; I believe it should be called by its proper name because a rose by any other name smells as sweet to some people.

Now you do not need any argument sustaining your bill as prepared along the lines of our good President's address and, aside from the arguments that my other colleagues from the Pacific coast have given. Directing my remarks particularly to the Welch amendment which I have read, let me call your attention to this fact—that he asks in his amendment that there be a differential in favor of the Pacific coast builders and repairers of ships of three-quarters of 1 percent in either category of loans that would be made under the terms of the bill now before you. Three-quarters of 1 percent is a slight advantage to California, Oregon, and Washington. It does not measure the full advantage that should be given on the Pacific coast, but we are happy to have this advantage.

All through the history of this Nation, the Pacific coast market, manufacturer, and merchant has been penalized to exceed 1 percent as compared with eastern manufacturers, merchandisers, and the like. Interest rates in our banks always exceed by 1 to 1% percent, interest rates of your eastern banks. It is an economic recognition of the span of 3,000 miles that exists between the Pacific coast and the Atlantic coast, and across those 3,000 miles there are barriers still—those same barriers that the pioneers met with, to wit: The marshy lands that lie in the Mississippi Valley, crossing over them and advancing to the desert-like country with the thirst and heat that overtakes the traveler, and then crossing and climbing up the heights of the Rockies before you can dip down on the Pacific slope. Those same barriers exist today and will always exist as between the Pacific and the Atlantic coast just as much for the storekeeper today as the pioneer of 100 years ago, and our interest rates will always be a percent or a percent and a half more on real property, when the loan is made against real property, or commercial paper, as against your advantage in the East.

So I call your attention to this single item, that what you are doing is that you are recognizing, for the first time by legislation of Congress, the economic differential that we always have to overcome. not by virtue of this act actually giving us construction, but you are giving us just an opportunity to again enter the field of competition, which is a good doctrine and a wholesome and sound doctrine in anything that the Government undertakes. You are opening up our opportunity in that vast competitive field.

The philosophy of this measure is in entire consonance with Mr. Welch's amendment. The philosophy of the bill is taking the United States as a unit and looking externally to the other nations in the family of nations and saying "Well, now, if we have to do business with England and sell to them and carry our goods in our bottoms,

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we have to recognize what the costs are and the advantages are in England,” and we have to do the same with respect to other nations. So the philosophy of this bill is setting up a rule of conduct so as to place the American shipper, shipbuilder and ship repairer upon the same footing, if we intend to stay upon the high seas. But by the same token it was never intended by our President--and I believe if it was called to his attention he would have included this item in his message—that we should militate against the zones in our own country in all of our enactments in this recent "new deal” Congress, if you are in sympathy with it, there is a recognition of a zone condition in our own country. We have taken the far South and said to the cotton raisers, what? We have said to them “You have got to come into the city with your farm dollar, which is affected through the years by a parity. Its value is affected, and, in order to equalize the economic process, we give you an advantage by a processing tax which is spread out among you, the cotton raisers." And so we have gone into the Middle West, the Northwest, the great wheat areas, and tried to equalize that situation as against the city folks.

Now it would be entirely within good logic and good legislation to equalize the situation existing, so far as this industry is concerned, between the Pacific and the Atlantic coast.

I thank you.



Mr. BURNHAM. Mr. Chairman, the ground has been very thoroughly covered and there is little that I can say.

We have no ship-building industry in my district. We did, I will say for the benefit of my good friend, Mr. Lehlbach, build two concrete ships during the war and, unfortunately, I was a member of the board of directors of the concern that built them, the Pacific Marine Construction Co. They were built, of course, as an emergency undertaking We had to bring all of our builders, or experienced men, from Philadelphia. But they were successful concrete ships; those two ships were the best concrete ships ever built in the world and they are in service today as tankers--and that is what they were built for. That yard, however, was given over to the Government afterward and it is now a destroyer repair base operated by the United States Navy.

I am very, very anxious, as are all of the people of the Pacific coast, to see some encouragement given to the ship-building industry on the Pacific coast and I think this suggestion of Mr. Welch's is very timely. If we can get an amendment of this kind incorporated in this bill which you are now considering, I believe it will give the assistance necessary to resuscitate the ship-building industry on the Pacific coast.

It is a very small item, only three-quarters of 1 percent on the money they shall borrow from the Government and I am very, very anxious to see this amendment incorporated.

I thank you very much.



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Mr. Tolan. Mr. Chairman and gentlemen of the committee, anything that I might say about this matter would be more or less a repetition. I am from the Seventh Congressional District of California; that is, Oakland and Berkeley, just across the bay from Mr. Welch's district, and it is really pathetic, gentlemen, to see those idle shipyards there.

Now I have always been in favor of a ship subsidy. I debated that at one time in the university and remember it very well, because I lost the debate. You always remember longest the things you lose. But it has always struck me as a citizen, not as a Congressman, with our richness, with out brains and intelligence, that such a small percentage of the shipping of the world is carried in American ships. I look upon that really as an insult to our intelligence. And we have known for countless years that we cannot compete with them on account of labor. We have known this, but we have not remedied it, and one of the finest suggestions that I have heard since I have been in Congress is the chairman's suggestion that we should have a committee on foreign commerce.

I just want to say, in conclusion, that nothing could better serve to stir up the feeling on the Pacific coast than this proposed amendment of Mr. Welch, and there is nothing I can go back to Oakland with that they would treat as better news than legislation of this kind.

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Mr. LLOYD. Mr. Chairman and gentlemen of the committee, I regret I was not here in time to hear the discussion as it has thus far progressed upon the subject. I fancy that each community, each locality on the Pacific coast is desirous of obtaining some differential that will rehabilitate our shipbuilding interests upon that coast. I am not particularly concerned with the question of whether this shipbuilding is going to the North Pacific or the South Pacific, but I am concerned, as a nationalist, in that whatever differential is reasonable and proper be granted to the Pacific coast, to the end that shipbuilding generally upon that coast may be, as I said, rehabilitated.

No man can see around the bend of the road; no man can look over the hilltop; but if past history is any guide to future events it would be wise indeed—and I speak of this country generally--to provide adequate shipbuilding facilities upon the Pacific coast now. That can only be done by granting reasonable differentials. I have urged and have introduced a bill providing for a differential which would cover in part the cost of freight between the Atlantic and the Pacific coast. As a factor of economy, it would be wise for the Government to do that; because it is cheaper to ship the metal used in ships around in ship bottoms than it is to move the completed ship after it is built.

We have wonderful opportunities on the Pacific coast for shipbuilding. Our days are longer; our working days are more numerous

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and we can, if the business and opportunity affords, erect shipbuilding yards from the North Pacific, at Seattle, Tacoma, and Portland, down as far as San Diego Harbor. The time may comeI hope that such an eventuality will never occur-but if the time does come when it is necessary to repair ships in time of emergency, our Government yards will never suffice. And I hope that whatever can be done by way of the Welch amendment, or whatever other proceeding seems proper, may be carried out, with the ultimate idea in view of providing adequate shipbuilding and ship-repair facilities that may be used in any eventuality.

I thank you.



Mr. KRAMER. Mr. Chairman and gentlemen of the committee, I believe you have heard quite a repetition on the need of shipbuilding on the Pacific coast. However, I heartily am in favor of the amendment and of this bill, but I do not believe my colleague and friend, Mr. Welch, has gone quite far enough.

My colleague, Mr. Dockweiler, emphasized the fact that the interest rates are higher on the Pacific coast than they are in the East and Middle West, but he did not emphasize to what extent. He said they were probably 1 percent higher. Well, in my experience, in dealing with financial matters in the Middle West as against the East, you will find there is a differential in that distance of 1 to 2 points in the interest rates; and, to my great amazement, when you go out on the Pacific coast, your interest rates go all the way from 1 to 3 points higher than they are in the Atlantic States or the Eastern States. Therefore, in order to carry on all projects on the Pacific coast, there must be some differential—not alone in that line, but also as to the amount that would be given as a differential in the cost of building.

Now it costs something to bring ore or other materials that are necessary in construction that are not on the Pacific coast, from the Middle West and whether the ship was originally built on the east coast, you will find, after the time it is transported back there and passes through the Canal, it is going to carry a certain overhead in order to bring it over into that Pacific coast area.

The Thirteenth District of California, which I represent, has the largest manufacturing industry west of Chicago. I know the northern part of the State, San Francisco, has a large industry, but they do not have the steel mills and the other machinery industry that we have, particularly in the Thirteenth District. And I dare say that the Thirteenth District in that particular area has fast been growing. There is a vast number of men there who are in the field and "r'aring to go as soon as we give them the opportunity, and I feel if this amendment of Mr. Welch's was reconsidered and if you would make that, instead of three-quarters of 1, from 1 to 1%, it would probably alleviate the situation a great deal better than it would by leaving it at the present rate.

I know our Pacific coast. As has been said before, you can build these ships and build them almost the entire 365 days that we have in the year. We have wonderful facilities there. As some of you men who have been on the coast know, there are a great many advan

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tages in that respect that they do not have on the Atlantic coast. However, we do not wish to take the construction of ships away entirely from the Atlantic coast. There is a great deal that they can maintain. I have some very dear friends on the Atlantic coast, in the Government navy yard, at Brooklyn, and I know he has often remarked to me it was very peculiar that we did not have a merchant marine shipbuilding industry on the Pacific coast.

So I want to emphasize again the fact I am heartily in favor of this and hope you will reconsider it and see if you cannot raise this a point, to at least 1 or to 1%, instead of three-quarters to 1 percent.

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Mr. McCABE. Congressman Costello, of the Fifteenth California District, was detained at the Military Affairs Committee meeting and he asked me to come here and tell this committee he is entirely in accord with what has been said in behalf of Mr. Welch's proposal by his colleagues from California and the other Western States.

His district lies entirely in the residential section of Los Angeles and he has nothing to gain by this particular bill. There is no possibility of shipbuilding in his district. But he does feel, as he is interested in the development of the West and western industry, that this proposal should be enacted.

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Mr. COLDEN. Mr. Chairman, would you indulge me a few minutes for a little further statement?

The CHAIRMAN. We will be very glad to have it.

Mr. COLDEN. Mr. Chairman and gentlemen of the committee, I was very much intrigued by the remark made by the chairman of this committee concerning the necessity and desirability of a committee on foreign trade and, in the further discussions of the Pacific trade, the question of the oriental trade was touched upon. That is one of my pet subjects.

I was awakened to the possibilities of that by a trip through the Orient a few years ago, and at Tokyo I attended å luncheon which was addressed by Mr. George Bronson Rhea, the editor of the Far Eastern Review. Very much to my surprise, he made the statement, as I recall it, that about 70 percent of our trade with China is not of record, for the reason that the Japanese control what we call the wholesale trade of China to a very large extent, and that Americans generally do not appreciate the value of the Chinese trade.

I also want to call attention of the members of this committee, all of whom are necessarily very much interested in the foreign trade, that China is the only country on the face of the globe that affords a possible market for our two great surplus products, cotton and wheat. It has been said it is an old saying about the Chinaman's shirt, but there is no question but if the Chinese were properly clothed, if the average workingman could have the clothes of comfort that he ought to have, that China would absorb the surplus cotton of this country. And we must recall-it is a sad story-that probably 100,000,000 of

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