The CHAIRMAN. Have you concluded your statement? Mr. HARDING. That is all. Mr. DAVIS. Mr. Harding, for the information of the committee, will you please state the nature of the Journal and Marine News which you are editing, and where your patronage comes from—by way of subscribers and advertisers? Mr. HARDING. The Marine News is the largest American marine publication, both in size of the paper and in the size of its circulation. We have the advertisements of a great many steamship companies, both American and foreign; yet our policy has always been for American shipping. We have carried a slogan on our masthead ever since, I think, the paper was started, 16 years ago, "See America Lead," and, as I say, while we carry the advertisements of a great many steamship companies and shipbuilders, the bulk of our advertising is from the people who supply the steamship companies and shipbuilders, and our circulation, I should say, is about half of each-half being those that are engaged in the industry and the other half being those who supply the industry. Mr. DAVIS. And your sole interest is in behalf of building up and maintaining a real American merchant marine? Mr. HARDING. Yes, sir. Mr. DAVIS. I have no further questions. Mr. BRIGGS. Mr. Harding, are you familiar with the extent to which chartered vessels are operated? Mr. HARDING. In what way do you mean? There are a number of chartered vessels. Mr. BRIGGS. I mean by American companies. Mr. HARDING. No; I have not the figures. Mr. BRIGGS. American companies operating foreign vessels. Mr. HARDING. I have no figures, except that I know certain lines are operating foreign ships under charter. The matter of the digging up of the information would be a more or less extensive job and I have never had the time to go into it in detail. Mr. BRIGGS. What do you think of the effect of that, if any? Mr. HARDING. Why you are just depriving American workmen of a livelihood-American industry. Mr. DAVIS. Now, Mr. Harding, on the question of American ship operators chartering foreign vessels, maybe temporarily, for operation in American foreign trade and in competition with Americanowned ships, I will ask you if that is not the very worst species of competition? Mr. HARDING. Yes. Mr. DAVIS. In other words, for an American line, as most of the American lines do, own their American-flag ships and either operate them the year around, or at least having their investment and the cost of maintenance, and so forth, the year around, to have to compete with another American line that will go abroad and pick up idle foreign tonnage anywhere he can find it, of any kind and character, and at as low a price as possible, bring it over here 100 per cent foreign manned, both as to officers and crew, and put that tonnage into that trade, in competition with those American owned and manned ships is decidedly a worse species competition than if those companies owned the foreign ships; is not that true? Mr. HARDING. I believe you are right. Mr. Herbermann said before that one man can not serve two masters, and, under the same premise, it is impossible for a shipowner who owns American ships and also operates foreign ships not to let the right hand know what the left hand is doing. And particularly is this so in the case where he is receiving money from the Government for a mail contract. The very money that he receives from the Government, together with his other income, on both American and foreign ships, is one source of revenue to him. You can not do business otherwise. And that money he is receiving from the Government is perhaps helping to pay his general overhead, which includes that of the chartered ships. Mr. DAVIS. Now about a year ago the Cunard Line, a British line, placed one of their ships-the Mauretania, I believe-in the Cuba-New York trade. They took it out of the North Atlantic trade, because the trade was slack in the North Atlantic, in the winter, and placed it in the trade between Cuba and New York? Mr. HARDING. Yes. Mr. DAVIS. In competition with the Ward Line, an American line, and there was a great deal said about it-a great great deal of criticism on the ground that that was unfair competition for them just to take a ship, temporarily, out of the trade in which they used it during spring and summer and fall months, when there was a press of business, and place it in competition with an American line during the period that the American line would perhaps make up for the slim summer months in which the trade was slack to Cuba. And then I believe that same company is now doing the same thing from Boston to Cuba. Is not that correct, Mr. Chairman? The CHAIRMAN. Well, I would not want to make an affirmative statement about it. Mr. DAVIS. I am advised that it is from New York; that while, last year, they placed one ship in that New York-Habana trade, this winter they are placing three, taking them out of the North Atlantic trade, and Americans have referred to that as a specie of fighting ship and unfair. And, if it is unfair for a foreigner to do that in competition with American ships, it certainly is unfair for an American citizen to do it, is it not? Mr. HARDING. From an ethical point of view, I think the action of the Cunard Line last year ill advised. Legally, they had every right to do it. Mr. DAVIS. I am not questioning the legality. Mr. HARDING. Incidentally, I understand this year there were two ships placed in that trade, but the business is very slim and perhaps the Mauritania that was advertised to make one voyage will not make that trip. That, however, was a purely foreign operation and the Cunard Line was receiving no money from the United States Government under any mail contract. Mr. DAVIS. In other words, if this pending bill is passed, it will not prevent any American citizen from owning and operating, or chartering and operating, as many foreign ships as he wants to; but it simply means that if he prefers to engage in the operation of foreign ships he shall not at the same time have one of these valuable contracts in order to fight some other American line or lines operating American ships; that is all. Mr. HARDING. That is correct. Mr. DAVIS. And furthermore, it could not hurt the transportation of our mail for the reason, even if this amendment is adopted, that the Postmaster General, wherever he deems it wise or expedient, can give to an American line operating American and foreign flag ships, or to one operating foreign-flag ships entirely, or even to a foreign line, mail to be transported but to be paid for on the poundage basis. Mr. HARDING. Yes. Mr. DAVIS. And not under this contract basis. Mr. HARDING. Yes. Mr. DAVIS. That is the distinction. Mr. HARDING. That is correct. Mr. DAVIS. And your idea is that, as this valuable aid is designed to build up a real American merchant marine, it ought to be confined to those who are willing to engage in the service 100 per cent and no portion of it be given to those who are not only not doing that, but who are engaging in this foreign competition with American ships. Mr. HARDING. That is correct. Mr. DAVIS. And I want to ask you this, as a matter of information: Do you know whether or not the Panama Railroad Steamship Line, which is owned by the United States Government and operated between New York and Panama, is agent for various foreign steamship lines? Mr. HARDING. I have never heard that statement made. Mr. FREE. Do you know, when they charter vessels, where they get them? Mr. HARDING. Where who gets them? Mr. FREE. Where the Panama Railroad charters vessels. They only have two or three vessels, I understand, in their service; but they charter a goodly number of vessels, and do you know where they get them? Mr. HARDING. No; I do not. I presume in the open market. Mr. HARDING. I do not know. Mr. WALKER. American ships. Mr. DAVIS. Now, Mr. Harding, on the question of American shipowners owning foreign-flag ships which, as you suggested, of course, they would have to dispose of before they would be able to obtain a mail contract in the future, if this amendment is adopted-I will ask you if it is not a fact that, under the law, they can now transfer from foreign registry to American registry any ship, even though constructed abroad, for operation in the foreign trade and with the exception that they could not then carry mail? Mr. HARDING. That is right. Mr. DAVIS. Under a mail contract on ships that are thus transferred subsequent to a date fixed last year? Mr. HARDING. Yes; the date was February 1, I believe, 1928. Mr. DAVIS. In other words, the Jones-White Act provided that a contract for the carriage of mail should be awarded only to companies that would use either ships of American construction, or constructed in American shipyards, or those for which contracts had already been let at the time of the passage of the act. Mr. HARDING. Yes. Mr. DAVIS. Or those of foreign construction which may have been transferred to American registry prior to February 1, 1928? Mr. HARDING. That is correct. Mr. DAVIS. So that they can even use the foreign-constructed ships under a mail contract, but which hereafter is confined as explained. But, at the same time, there is nothing in that or any other law to prevent the owner of any foreign-built ships and those now flying the foreign flag, at any time they want to, from transferring them to American registry and putting them in the same trade in which they are now engaged and it not being necessary for them to sell their ships; that is true, is it not? Mr. HARDING. Correct. Mr. DAVIS. And another thing, right in that connection Mr. FREE. Let me interrupt you there; I want to get that clear. The only penalty is they could not carry mail? Mr. DAVIS. That is the only penalty-under a mail contract. They could still carry mail, Mr. Free, but they would have to do it on the poundage basis. But they would not be eligible to carry mail under one of the mail contracts provided for in the 1928 act; that would be the only penalty if they transferred to American registry. Mr. BLAND. They would lose the benefit of that route the route that was advertiseď. Mr. DAVIS. No; they can still operate on that route, but they can not carry mail. Mr. BLAND. I understand that. I am not inimical to the proposition; but the loss of that route, not the service, but the route that is advertised by the Postmaster General, the forfeiture of their right as to that, would it not create a situation in which there could be a new advertisement and another line brought it? Mr. DAVIS. No. But right on that point, suppose this bill does not pass and a company that owns American ships and foreign ships wants to bid on it and does bid on it and gets the contract, even if my amendment does not pass, they can not use any of those foreign-flag ships for carrying out that contract, because the time has passed within which they can transfer to American registry and use them in performing that contract. But they can still use them in that same trade or any other trade that they want to in the carrying of passengers and cargoes; that is correct? Mr. HARDING. Yes. Mr. ABERNETHY. Or they can carry mail on a poundage basis? Mr. DAVIS. Yes; on a poundage basis. And another thing: Of course, if the Postmaster General advertises for bids on a mail contract and a person should bid for that contract who is the lowest bidder and, we will assume, the bidder to whom the Postmaster General desires to award the contract, but it happens that that bidder is either owning or operating foreign-flag ships under charter, is it not a fact that the Postmaster General could say to him, "Now, as long as you are operating any ships in the foreign trade in competition with American ships, I can not award you this contract; but if you will divest yourself of your foreign-flag tonnage, either by transfer of registry or sale, or turn back your chartered ships, then I can legally do it and will award you the contract," and then it would leave it wholly within the will and action of the operator as to when he got rid of that tonnage; is not that a fact? Mr. HARDING. Yes. Mr. LEHLBACH. May I ask a question there for my information and probably that of some of the others? Mr. DAVIS. Surely. Mr. LEHLBACH. I do not recall under what conditions and circumstances a foreign-built ship, under foreign registry, may be transferred to American registry. Can you, right here, tell us that? Mr. DAVIS. If you are asking Mr. Harding, if he does not know, I can tell you. Mr. LEHLBACH. Can you tell us that, Mr. Harding? Mr. HARDING. Under what circumstances a foreign-built ship can be transferred to American registry? Mr. LEHLBACH. Yes. Mr. HARDING. I do not know what the procedure is, but I do not know anything to stop it. Mr. DAVIS. Well, I will state this, that under the law a foreignbuilt ship may be transferred to American registry at any time for operation in the foreign trade. It can not be transferred for operation in the coastwise trade and, subsequent to February 1, 1928, it can not be transferred under the law as it now stands, from foreign registry to American registry and used in performing an ocean-mail contract under the 1928 act. Mr. LEHLBACH. Now, a foreign-built ship, if transferred to American registry, may, nevertheless, not engage, even incidentally, in American coastwise trade, may it? Mr. DAVIS. No. Mr. LEHLBACH. Even if it is part of a foreign voyage? Mr. DAVIS. Well, now, I do not know; in other words, if it makes different ports of call, as to whether it could carry the cargo from one American port to another American port? Mr. LEHLBACH. Yes. Mr. DAVIS. Well, I do not think it could. Mr. LEHLBACH. A foreign-built ship. Mr. DAVIS. A foreign-built ship can not be transferred to American registry for the purpose of engaging in the American coastwise trade, either in whole or in part. Mr. LEHLBACH. A line going from Galveston to New York and thence to Liverpool could not run under the American flag a ship that was built abroad? Mr. HARDING. Not if it carried cargo from Galveston for New York. Mr. LEHLBACH. Not even if, incidentally, it dumped some of its cargo at New York and took on cargo at New York for Liverpool? Mr. HARDING. It would cost them money. Mr. LEHLBACH. They can not do it, can they, Mr. Herbermann? Mr. HERBERMANN. No; the American ship running in the foreign trade can not do it. Mr. DAVIS. Now, Mr. Lehlbach, a ship may make several ports of call. In other words, a ship can go to Philadelphia, Norfolk, New York, either delivering cargo from abroad or picking up cargo for 97876 302 |