Mr. SANDBERG. Yes; I do.

Mr. BLAND. Will you outline them-the conditions which make the legislation necessary?

Mr. SANDBERG. Well, I understand this bill is gotten up for the purpose of furnishing aid only to American shipowners who own American ships outright and, if they charter foreign vessels, that they are not entitled to receive help or aid from the Government in the way of a subvention-mail subvention.

Mr. BLAND. Yes; but my inquiry was directed to the actual conditions, now-what companies will be affected injuriously by that legislation, if you know; I want the facts.

Mr. SANDBERG. Well, I know of one.

Mr. BLAND. Which is that?

Mr. SANDBERG. The Munson Line.

Mr. BLAND. The Munson Line?

Mr. SANDBERG. Yes.

Mr. BLAND. The United Fruit was discussed this morning.

Mr. SANDBERG. Yes; they have been discussed.

Mr. BLAND. Now what is the situation as to the Munson Line?

Mr. SANDBERG. As I understand it, the Munson Line are owners of American flag ships and also charter some foreign ships.

Mr. BLAND. Do they own any under foreign flags?

Mr. SANDBERG. Not that I know of. They charter them, I believe. The CHAIRMAN. I think they own two or three.

Mr. DAVIS. They own three or four ships, Mr. Sandberg.

Mr. SANDBERG. I did not know they owned any; I thought they chartered.

Mr. BLAND. That is, they charter them to use in what services? Mr. SANDBERG. In the South American service.

Mr. BLAND. Between what ports?

Mr. SANDBERG. The North Atlantic.

Mr. BLAND. Do you know of any other lines that would be affected? Mr. SANDBERG. No; I do not know of any others, off-hand.

Mr. BLAND. I simply wanted to get at the facts upon which the legislation is based.

Mr. SANDBERG. Yes.

Mr. BLAND. I have no further questions.

The CHAIRMAN. Is there anything further? If not, we are very much obliged to you, Mr. Sandberg.

Now, Commissioner Smith, we will be very glad to have you make a statement, if you care to.

STATEMENT OF HON. R. K. SMITH, COMMISSIONER, UNITED STATES SHIPPING BOARD

Mr. SMITH. My opinion of the bill is that it is entirely right in principle. I am certain that it will be right in detail and I have no suggestion to offer for any change in it, as it is written, that will make it any stronger than it appears to be now.

Mr. REID. Even Judge Davis could not quarrel with that. [Laughter.]

The CHAIRMAN. Is there anything further?

Mr. DAVIS. I will ask you if you do not think it would be advisable to amend this bill so as to provide that if a mail contract is

awarded to an American operator who comes within the purview of the first amendment there, and was given a 10-year contract and, subsequently, even though at the time of the award he is not operating foreign ships in competition with American ships, but subse-quently he commences doing that, it should be provided that his contract should then become null and void?

Mr. SMITH. I do not know exactly the ethics, but my answer to that would have to be that you had already told me you were going to fix it that way. [Laughter.]

Mr. DAVIS. Yes; I did.

Mr. SMITH. I do not want to be controversial here about it, since the suggestion I did make you told me would be inserted.

Mr. DAVIS. That is the fact, Mr. Commissioner.

Mr. BLAND. I am afraid this is a prejudiced witness; he has already talked to him. [Laughter.]

Mr. DAVIS. I will state, Mr. Commissioner, that I stated publicly, in the first day's hearing on this bill, I intended to offer an amendment of that kind. I simply wanted to know whether or not you indorsed an amendment of that kind.

Mr. SMITH. Yes; I do. I think it quite essential that that be done if, in the judgment of the legislators, it does not detract from some other part of the bill, and I do not think it does.

Mr. Davis. In other words, if we do not do that, even if a man qualified for a mail contract and received it, the next day or the next month he could subvert the purpose of the bill, after he had obtained a contract, by putting in operation foreign flag ships in competition with American-flag ships, if there were no amendment adopted to prevent that?

Mr. SMITH. Yes, sir.

Mr. DAVIS. I will ask, Admiral Cone, do you agree with such an amendment?

Mr. CONE. Yes, sir.

Mr. DAVIS. Mr. Sandberg, I want to know if you indorse the amendment about the mail contracts? In other words, if the bill as it stands now, becomes a law, under which a mail contract could not be awarded to any operator who was operating foreign-flag ships in competition with American ships, in order to protect that situation it should also be provided that, if subsequently, he commences operating foreign-flag ships in competition with American-flag ships, the contract should become null and void.

Mr. SANDBERG. Yes, sir.

Mr. BLAND. Had you talked to this witness, too? [Laughter.] Mr. DAVIS. No. You approve of that, do you, Mr. Commissioner?

Mr. BLAND. Mr. Smith, do you know of any other particular lines, or interests, that are involved in this amendment than those that have been mentioned by the other commissioners?

Mr. SMITH. I do not think that is half so important, sir, as the preventive features of the bill for the future.

Mr. BLAND. Is it thought that there would probably be built up in the future lines that would own foreign-flag ships, or some of those that are now purely American would acquire foreign-flag ships?

Mr. SMITH. I think the bill is directed at a case exactly of that kind, that might be repeated indefinitely in the future, if it were not checked. Mr. BLAND. What case is that?

Mr. SMITH. Munson.

Mr. BLAND. I see.

Then this bill deals particularly with the Munson Line and the United Fruit Line; is that the situation?

Mr. SMITH. I should not think so at all, sir, and I would like to repeat that I think the virtues of the bill are more important in their preventive features for the future, than for any small case that might have occurred in the past.

Mr. BLAND. But remedial legislation is generally based upon existing facts, and I wanted to know, as far as possible, what were the existing facts which, in your opinion, justified remedial legislation. The CHAIRMAN. Are there any further questions? If not, we are very much obliged to you.

Mr. DAVIS. Chairman O'Connor, Commissioner Plummer is ill and unable to be here today; is that a fact?

Mr. O'CONNOR. I can say to you that Commissioner Plummer indorses this bill.

Mr. DAVIS. He does?

Mr. O'CONNOR. Yes; put him on record as in favor of it.

Mr. DAVIS. And Commissioner Myers?

Mr. SANDBERG. Commissioner Myers told me he indorses it.

The CHAIRMAN. I think that accounts for all of the members of the Shipping Board.

Mr. DAVIS. Yes.

The CHAIRMAN. Now are there any other persons present who desire to be heard in support of the bill? Judge Davis, do you know of anyone else?

Mr. DAVIS. No; I do not, aside from some written statements that have been sent in.

The CHAIRMAN. I have a telegram from the Shipowners Association 'saying they will be in Washington to-morrow to present their views. I have no knowledge as to whether their views are in accord with the bill, or are antagonistic to the bill, but I think we ought to hear them to-morrow morning.

Mr. DAVIS. Yes; I will be glad to do that.

The CHAIRMAN. Now, is there any one here who wants to speak in opposition to the measure; if not, it seems to me we might adjourn this afternoon.

Mr. DAVIS. About the American Steamship Owners Association, do you understand that some one representing them will appear here in person?

The CHAIRMAN. I understand officials of the association will appear here in person to-morrow morning, so I conclude that we can close the hearings for this afternoon, except as to those statements you want to put into the record, and we will meet again to-morrow morning at 10.30 o'clock. Is that agreeable to the members of the committee? I hear no objection and that is understood, then. Now, Judge Davis, do you want to read a statement or statements into the record?

Mr. DAVIS. Mr. Chairman and gentlemen, here is a communication from the Middle West foreign trade committee:

Hon. EWIN L. DAVIS,

House Office Building, Washington, D. C.

JANUARY 14, 1930.

MY DEAR JUDGE DAVIS: Our organization is in thorough accord with your amendment to forbid the award of mail contracts to companies operating, directly or indirectly, foreign-flag ships in competition with American-flag ships. It would be a remarkable state of affairs if Government money is to be used in fostering the competition of foreign-flag ships with our own ships.

The Middle West foreign trade committee has actively supported the establishment and maintenance of our American-flag shipping services and all legislation proposed for the purpose of insuring the maintenance of these lines. We urged the enactment of the Jones-White bill because we felt it made sure of the maintenance of our services and their transfer to the local private companies as conditions warranted, with the mail aids to enable these private companies to become successful owners. We hope the Congress will soon amend the law to insure the award of the mail contracts to the local companies when they purchase the lines they have very materially helped to build up.

I notice in the hearing on the Post Office appropriation bill some of our Government officials, who ought to know better, referred to Shipping Board sales as "hocus pocus" and some legal views on the powers of the board as "curbstone' and "horseback" opinions. I wonder how these gentlemen would classify the so-called opinion of the Comptroller General, that the Postmaster General could not award the Gulf-South American mail contract to the Mississippi Shipping Co., the only qualified bidder under the previous advertisement. I am quite sure that the gentlemen, in and out of the Government, who urged the Postmaster General to award the contract to the Mississippi Shipping Co., knew more about the laws than the Comptroller General.

However, after some of these Government officials learn a little more about our foreign commerce and our merchant marine laws they will probably agree with us that Congress intended our shipping lines to be owned by the domestic communities primarily interested and it intended the mail aids should be given the purchasers of these lines, and that the well-established policy of the Shipping Board of preference to operators in sales is sound and in accord with the law.

We want no monopolies and we want no Government money given to operators of foreign flag ships. Neither do we see why industrial companies should be aided under the Jones-White law. Our committee hopes the Congress will make your amendment a part of the law before any more mail contracts are awarded. Best wishes and kindest regards, I am,

Very sincerely yours,

MALCOLM M. STEWART, Chairman.

I have another statement which I will just wait until to-morrow morning to read, because it is short and most of the members have gone and, in that connection, I want to ask you if you have received a statement from the Propellor Club of New York in regard to this bill?

The CHAIRMAN. I think not.

Mr. DAVIS. I was advised that one would be mailed.

The CHAIRMAN. No. I have a telegram here, but it does not indicate it is from any club. It seems to be a personal telegram.

Mr. DAVIS. It was agreed the other day, Mr. Chairman, while we had closed the oral testimony upon your bill, that we might still receive statements in regard to it.

The CHAIRMAN. Yes.

Mr. DAVIS. I wish to file, Mr. Chairman, for insertion in the record, certain official data in regard to the matter of preference and foreign flag ownership and operation, and also some data furnished by the Shipping Board giving the commerce in and out of the different sections of the country and the different ports.

The CHAIRMAN. Without objection, that will be included as a part of the hearings on the White bill. Is there anything further? Mr. DAVIS. That is all.

(Thereupon, the committee adjourned until to-morrow, Tuesday, January 28, 1930, at 10.30 o'clock a. m.)

97876-30-6

HOUSE OF REPRESENTATIVES,

COMMITTEE ON MERCHANT MARINE AND FISHERIES, Tuesday, January 28, 1930. The committee met at 10.30 o'clock a. m., Hon. Wallace H. White, jr. (chairman), presiding.

The CHAIRMAN. We adjourned until this morning that we might continue, at this time, the hearing on H. R. 8361. It was understood that representatives of the Steamship Owners' Association would be here at this time and would be prepared to present their views. It has been intimated to me also that Mr. Furuseth might wish to make a brief statement. We would be glad to hear you now, Mr. Furuseth. STATEMENT of Andrew FURUSETH, PRESIDENT OF THE INTERNATIONAL SEAMEN'S UNION OF AMERICA

Mr. FURUSETH. Mr. Chairman and members of the committee, my name is Andrew Furuseth; I am president of the International Seamen's Union of America and chairman of its legislative committee. I just come before you, gentlemen, for the purpose of suggesting that it would be a very good thing indeed to pass what it now known as the Davis bill, and we seamen feel absolutely free to indorse it without any amendments. We do not think that American money should be paid to shipowners who are just using it in their own way and employing foreign ships in competition with American ships.

That is all I want to say.

The CHAIRMAN. Are there any questions?

Mr. DAVIS. Do you think there is any sound reason for making or authorizing any exceptions?

Mr. FURUSETH. I do not think so. The proposition that I have been told about, to change it so as to make it read against linescompeting against established lines-that will leave the condition just as it is, or substantially as it is.

Mr. DAVIS. You do not think that would be wise?

Mr. FURUSETH. No; I do not think it would be wise at all for the purpose of building up an American merchant marine. You are now dealing, so far as I understand it, with the question of shipping. What we are trying to do is to get American ships; we are not dealing with the question of American sea power, because that might mean more than ships; but you are dealing with ships. Now if the men who have the power and the opportunity can go over to Norway, Sweden, Denmark, Holland, or elsewhere and charter ships and use them in the American trade-what we call American trade anyway, especially between here and Cuba-if they can do that kind of a thing, necessarily it defeats the very purpose of the law that you have passed here for the purpose of building up ships.

The CHAIRMAN. Is there anything further?

Mr. FURUSETH. That is all, as far as I am concerned. If anybody wants to ask any questions, I will be glad to answer them.

The CHAIRMAN. Now are the representatives of the Steamship Owners' Association prepared to go on?

Mr. WALKER. Yes, sir.

The CHAIRMAN. Will you give your name and the capacity in which you appear, Mr. Walker.