next load they wanted to give them would not have gone to that operator, they would have gone to a foreigner; and so that the operator could keep that trade coming through his office, we gave him permission to operate that one ship.

Mr. DAVIS. Is that the only instance where you have done that? Mr. O'CONNOR. I think that is the only instance where we have done that. We have had other applications along that line and after we investigated we refused to give permission.

Mr. DAVIS. Now assuming there should be certain isolated cases in which it would work a hardship on the American operator receiving mail pay not to be permitted to operate a foreign flag ship, I will ask you, Mr. Chairman, in the light of your long experience and study of this subject, if you do not think, by and large, and in the final analysis, that this amendment would do far more towards building up an American merchant marine and ultimately better serving the American commerce, than it would be to permit an occasional exception?

Mr. O'CONNOR. Well, of course, we would do that operator an injury by refusing to let him have that particular ship to carry that particular load.

Mr. DAVIS. Yes, and under the very policy that we are inveighing against, of Americans operating foreign flag ships, it does a great injury to an American merchant marine, does it not?

Mr. O'CONNOR. But, Mr. Davis, that man could not have gotten that permission unless it was almost entirely right to ask for it; he could not have gotten the permission just by wiring in and asking for a privilege of that kind. I guess he was three or four days before he got an answer.

Mr. DAVIS. Now, with respect to the first suggestion, which I understood you practically withdrew, after suggesting it

Mr. O'CONNOR. Well, I said I did not think it went far enough. Mr. DAVIS. Yes; that the Postmaster General be given discretion to make exceptions. He has that discretion now, has he not?

Mr. O'CONNOR. I did not say the Postmaster General; I meant the administrative officer and this Committee to say who the administrator should be-whether it be the Shipping Board or the Postmaster General.

Mr. DAVIS. Now let us take the Postmaster General: Under the existing law he may grant to or withhold from an American citizen operating foreign flag ships a mail contract, may he not?

Mr. O'CONNOR. He may.

Mr. DAVIS. Yes, he may do that now?

Mr. O'CONNOR. Yes.

Mr. DAVIS. So that if an amendment of that character were adopted it would nullify my amendment, would it not-leave it just where it is now; is not that a fact?

Mr. O'CONNOR. Yes; if it were left entirely in his hands.

Mr. DAVIS. Just the way it is now?

Mr. O'CONNOR. When I spoke on that, I did not know whether it went far enough.

Mr. DAVIS. Right on that point, are you for or against my amendment?

Mr. O'CONNOR. I am for your amendment, but I would like to see some discretion in a man.

Mr. DAVIS. I will ask you if you do not consider it is right-100 per cent right?

Mr. O'CONNOR. In principle, it is entirely right.

Mr. DAVIS. And in Americanism?

Mr. O'CONNOR. Yes.

Mr. DAVIS. And I will ask you if it is not designed, as much as any proposal that is made, ultimately to promote an American merchant marine?

Mr. O'CONNOR. Just ask that question again.

Mr. DAVIS. I will ask you if you do not think it is designed, as much as any proposal that is made, ultimately, to promote an American merchant marine?

Mr. O'CONNOR. Yes, and to make them all Americans and not have them only part sea-minded Americans.

Mr. DAVIS. Yes. Now you read two resolutions which were adopted by the Shipping Board?

Mr. O'CONNOR. Yes.

Mr. DAVIS. And I want heartily to endorse those.

Mr. O'CONNOR. That was our notion right along.

Mr. DAVIS. Now the chairman of our committee asked whether they had taken any action on that question recently. I will ask you if a resolution once adopted by the Shipping Board with reference to policy does not remain the policy of the Shipping Board until it is changed?

The CHAIRMAN. My question was whether they had taken action on this particular bill.

Mr. DAVIS. I thought you said on that policy.

Mr. O'CONNOR. That resolution is in effect in the Shipping Board to-day, just the same as the day it was passed.

Mr. DAVIS. Yes; and that has been the policy and practice of the Shipping Board.

Mr. O'CONNOR. Yes; but I brought them in to show you, when we sold a line, we lost control and they could then go and do as they felt like.

Mr. DAVIS. But, at the same time, has it not been the uniform policy and practice of the Shipping Board, when you sold a line of American ships for operation in the American trade and under the American flag, that you have uniformly refused to sell any ships, whether they are laid up or not, to anybody else for permission to operate in competition with the other lines you sold?

Mr. O'CONNOR. Yes, sir; that has been our action.

Mr. DAVIS. And you never have, in any instance, have you, sold other ships to individual American citizens or anybody else, to operate in competition with one of your American lines?

Mr. O'CONNOR. No, we have not; but if we sell a ship unrestricted, a man can put that ship in any trade he feels like; that is, he pays the high price, the unrestricted price, and then he can put that ship in any trade he feels like. But there has not much of that happened; very little of it.

Mr. DAVIS. And during the nine years you have been with the Shipping Board, only one instance and, in that case, of only one ship, has arisen that you feel the exigencies of the occasion require a departure from that practice; that is a fact, is it not?

Mr. O'CONNOR. There was only one occasion we granted it; there was more than one that arose.

Mr. DAVIS. I say there was only one in which you say the exigency arose that you departed from your purpose?

Mr. O'CONNOR. That is the only one.

Mr. DAVIS. Now let us take up the cases you conceive would be affected by this amendment.

Mr. O'CONNOR. I have mentioned them all.

Mr. DAVIS. Then let us take the United Fruit. In the first place, the United Fruit Co. is an industrial carrier, is it not?

Mr. O'CONNOR. Practically, yes. They are listed

Mr. DAVIS. They are supposed to have practically a monopoly of bananas in this country?

Mr. O'CONNOR. Yes, but they are listed as common carriers, too, you know.

Mr. DAVIS. Is it not a fact that they are common carriers when it suits them, and they are industrial carriers when it suits them? Mr. O'CONNOR. Well, people have made that charge.

Mr. DAVIS. Is it not a fact they are primarily industrial carriers; in other words, they are delivery wagons, the ships they are operating are delivery wagons, of the new United Fruit Co.?

Mr. O'CONNOR. They carry their supplies down and bring their products back.

Mr. DAVIS. And I will ask you if there have not been complaints of some of their competitors in the fruit business that they have not been given the same consideration that they would have been given if the United Fruit Co. was a common carrier, strictly?

Mr. O'CONNOR. I do not recall a complaint of that kind. There may have been complaints come in, but I do not recall.

Mr. DAVIS. But, generally speaking, it would be a pretty harsh proposition to impose upon one merchant the requirement that he should deliver his goods in the delivery wagons of his competitor, would it not?

Mr. O'CONNOR. That is not a good policy, that is true.

Mr. DAVIS. Yes; yet that is just exactly what the American Government would be doing if it grants valuable mail contracts to an industrial carrier; is not that true?

Mr. O'CONNOR. Now, my opinion here on this United Fruit Co., if I understood it rightly, the only vessels they were asking contracts on were those new vessels they are going to build. I do not think they are asking for it on the others; they may do that; I do not know. Mr. DAVIS. They have gotten the loans or are to get the loans, and my amendment does not affect the loans.

Mr. O'CONNOR. No.

Mr. DAVIS. Perhaps it should, but it is not drafted that way. Mr. O'CONNOR. Of course, the committee must act on this, but I do not think they would build those ships in this country if they did not get a mail contract.

Mr. DAVIS. I want to ask you if you do not think some other company would build and put ships on that same service if they knew they would get a valuable mail contract?

Mr. O'CONNOR. I do not think they would, Congressman, because, as you say there, part of their carrying is industrial.

Mr. DAVIS. And they are going to operate those ships just like they have done, whether they get a mail contract or not?

Mr. O'CONNOR. Yes; but they won't build those ships.

Mr. DAVIS. And I will ask you if they are not a profitable concern, one of the most profitable shipping lines in this country?

Mr. O'CONNOR. They are in the world, I guess.

Mr. DAVIS. And, as a matter of fact, then, they do not need any aid, do they?

Mr. O'CONNOR. No; I guess they can get along without it.

Mr. DAVIS. Then do you agree with what the Postmaster General said the other day, that he did not think this valuable mail subvention should be paid to any operator who is already so prosperous that he does not need it?

Mr. O'CONNOR. I quite agree with him on that.

Mr. DAVIS. So do I.

Mr. O'CONNOR. But I think some time we have to get to that, to limit the mail pay to a line when it starts to making money, so that they do not get too big a profit with that mail pay and it can be cut down to meet conditions.

Mr. DAVIS. Now let us take the Barber Line, which you say is operating to the west coast of Africa and which is the agent for some foreign line in the same service.

Mr. O'CONNOR. That is all they are-agents.

Mr. DAVIS. As I said, unless they control the operations of those ships, they would not come within the purview of this amendment. Mr. O'CONNOR. That would clear them.

Mr. DAVIS. That would clear them.

Mr. O'CONNOR. I think you see my point on that, do you not, that if we made Barber give up the operation of those vessels, it would mean they would go into hands that would cause almost immediately a rate war on that particular route, that is, if they did not work along the way they do now.

Mr. DAVIS. Well I am not prepared to admit that, because I believe if the foreign lines thought it was to their interest to enter into a rate war, they would very promptly withdraw their ships from Barber & Co. and proceed to make a rate war.

Mr. O'CONNOR. I think you are right on that.

Mr. ABERNETHY. If I understand, your amendment would not affect the Barber Line?

Mr. DAVIS. No; not under his statement of the facts.

Mr. ABERNETHY. Then the only one we have to consider is the United Fruit Co.; that prevents it with the United Fruit Co., is that so?

Mr. O'CONNOR. Yes.

Mr. DAVIS. Then you mentioned Moore & McCormack.

Mr. O'CONNOR. That is another line.

Mr. DAVIS. Which has a mail contract in one service and is operating foreign ships in direct competition with another American service? Mr. O'CONNOR. Yes, sir.

Mr. DAVIS. And you say you think it ought to apply to them? Mr. O'CONNOR. I think it certainly ought to.

Mr. DAVIS. I think so, too.

Mr. WELCH. Has the Shipping Board the ships that it can press into service to meet the condition you refer to on the Pacific coast and against the seasonal condition referred to by Mr. Free?

Mr. O'CONNOR. The seasonal condition-that is the sugar you are talking about?

Mr. WELCH. Yes.

Mr. O'CONNOR. No. We have a lot of vessels, but it would only be losing money to get them out and put them into a three or four months trade and it would not hardly pay any particular operator to get ships out just to carry sugar.

Mr. DAVIS. Now, Mr. Chairman, for many years the Shipping Board has operated ships through managing directors, or managing operators, very generally at a loss, all of which we considered justified, because we felt we were building up an American merchant marine and establishing regular liner services.

Mr. O'CONNOR. Well you have done that, Mr. Congressman.

Mr. DAVIS. Yes. Now I will ask you if you do not think the Shipping Board would be justified to incur some losses also on chartered ships and go to the extent of meeting the world charter prices upon their laid-up fleet, wherever they were desired by American operators? Mr. O'CONNOR. We went into that some years ago, to get out a lot of our lakers, and it readily showed us that we would run into about $2 a ton loss on every pound of sugar brought up here; so that we gave the matter up--that is, to compete with the Scandinavian ships that are in that trade.

Mr. DAVIS. Now, right in that connection, I will ask you if the worst species of competition that American ships have to meet is not for an American operator to go abroad and pick up old idle ships any place he can and at whatever charter price he can get them, bring them over here manned, 100 per cent, foreign officers and crew, hire them for just so long as he may need them in the trade, and then put them in a trade against American owned and operated ships, where the owners own them the year around and have a year-around expense, and to have those tramp, chartered ships come in there and simply grab off the cream?

Mr. O'CONNOR. They do not do it in that trade, Mr. Congressman. Mr. DAVIS. In which trade?

You mean that

Mr. O'CONNOR. In that sugar trade. That is the only trade that this seasonal proposition applies to, that I know of. Mr. DAVIS. Well, I do not know what you mean. they do not charter those foreign ships for that trade? Mr. O'CONNOR. Not against any regularly operated American ships.

Mr. DAVIS. You understand, Mr. Chairman, that the bill under consideration does not prevent American lines from operating foreign ships except in competition with American ships?

Mr. O'CONNOR. Well, I am 100 per cent back of that bill.

Mr. DAVIS. Yes.

Mr. O'CONNOR. There is no question in my mind on that. I was just citing those things to show you what the Shipping Board has been up against in the past and that they probably would go up against the same arguments in the future.

Mr. DAVIS. Now I want to ask you this further, if you think it is going to be likely that we can build up established lines, that we can build up and maintain liner services, if we have to start in in competition with those foreign tramp ships, brought over here and put into service against American-owned ships?