of ours, so that we may be protected from the competition that must necessarily arise if such a thing as contained in the Postmaster General's statement is true.

That is all I have to say.

The CHAIRMAN. I think the Black hearing pretty well developed that that was true in some sections, especially under the system that obtained before the award of mail contracts. I do not know how far it is true since they awarded mail contracts, but it is my recollection that there was evidence before the Black committee, and I have read the better part of their testimony, that when they were receiving a lump sum many of them organized stevedoring companies and towboat companies and other companies of that kind, for which they paid very high wages and, of course, reduced the profit to the steamboat company and increased the lump-sum compensation which they were receiving for running these companies. I think it was something of that kind.

Mr. CULKIN. Have the independent operators of these various facilities, the towboat companies, and such activities, at present sufficient facilities to handle the situation?

Mr. CONWAY. Yes, sir.

Mr. CULKIN. You are in New York City, are you not?

Mr. CONWAY. Yes, sir.

Mr. CULKIN. So that the introduction of these subsidiaries, in part created by the Government, you read as unfair competition? Mr. CONWAY. Yes, sir.

Mr. SIROVICH. As I read this paragraph it states:

OPERATIONS UNDER MAIL CONTRACTS

The liberal treatment accorded to the operators under the ocean-mail contracts has resulted in much waste and extravagance. Too many of the contractors have diverted these grants or subsidies, or by whatever name this aid may be called, to other than sound shipping operations. Many of them have employed lobbyists and special representatives at enormous fees. They have paid high salaries and excessive dividends. In order to pipe these funds away from the mail contracting company, they have organized holding companies, operating companies, terminal companies, towboat companies, and supply companies, thus freezing out independent firms.

Is that right?

Mr. CONWAY. That is the statement.

Mr. SIROVICH. Any marine organization who is getting a subsidy from the Government has a perfect right to do that. You are only objecting, as I understand it, to any merchant marine company that is getting a Government subsidy operating in any other division or department that is foreign to their work; is that right?

Mr. CONWAY. I have no objection, Mr. Sirovich, if a company does get a mail contract or a subsidy and they feel that they can run their business by buying their own towboats and using them in the operation of docking and undocking and the lighterage facilities and operations necessary to carry out the conduct of that ship. I have no objection to that. My organization has no objection to it. However, we do not want those people to get out in open competition with us who have invested our own money and who enjoy no subsidy. They can conduct the operation of that ship with those towboats, but don't let them get into competitive business with us.

Mr. SIROVICH. In other words, let me see if I get you right: It is your theory that if any of these merchant marine organizations that are getting a governmental subsidy should utilize that subsidy for whatever purpose they want for their own shipping interest, without operating those tugboats and competing with you private and other operators?

Mr. CONWAY. Exactly. That is all, gentlemen.

The CHAIRMAN. Have you read the recommendations of the interdepartmental committee? Those recommendations begin on page 19, and it is my recollection, although I would not state it as a fact, that the interdepartmenal committee suggested that they should be separated from these affiliated concerns.

Mr. CONWAY. I have not read that, Mr. Chairman.

The CHAIRMAN. I am satisfied that was given consideration by the interdepartmental committee. What I probably had in mind was recommendation no. 8 on page 38 here:

The committee feels that the Secretary of Commerce should have the same authority to require reports to be made by companies engaged in the business of chartering, or managing, or furnishing stevedoring services, as he now has with respect to steamship operating companies.

Mr. CULKIN. You have no quarrel with them going out and doing business in their own line, but do object to going out in competition with you in the open field?

Mr. CONWAY. Yes, sir; that is all, Mr. Chairman. Thank you. The CHAIRMAN. Is Mr. Haddock here?

Mr. HADDOCK. Yes.

The CHAIRMAN. Do you want to go on now?

Mr. HADDOCK. Yes.

STATEMENT OF HOYT S. HADDOCK, PRESIDENT OF THE AMERICAN RADIO TELEGRAPHISTS ASSOCIATION, NEW YORK CITY

The CHAIRMAN. Give your name and organization to the reporter, please.

Mr. HADDOCK. Hoyt S. Haddock, president of the American Radio Telegraphists Association, 10 Bridge Street, New York.

Mr. Chairman and Congressmen, what I have to say will deal almost entirely with the interdepartmental recommendations made to the President, and in referring to these recommendations

The CHAIRMAN. That is, the interdepartmental?

Mr. HADDOCK. Yes, sir; the interdepartmental recommendationson page 22 of the pamphlet which you have before you, our views coincide with the views set out in this report, subparagraph 1 of recommendation no. 6.

In subparagraph 2 we differ with this committee, and insofar as the last sentence of that paragraph is concerned, which reads:

In determining the amount to be paid as an operating subsidy, consideration should be given to the possibility of a substitution in part for crews' wages by an allowance to be paid to said personnel as members of the United States Merchant Marine Naval Reserve.

Mr. CULKIN. Where are you reading?

Mr. HADDOCK. Page 22.

Mr. CULKIN. Subparagraph 2, you say?

Mr. HADDOCK. Yes, sir; the last sentence in there.

Mr. CULKIN. Oh, yes.

Mr. HADDOCK. In our opinion the Navy is a governmental agency primarily for war. A merchant marine should be a privately owned merchant marine operated to carry on the commerce of these United States. This merchant marine should not be tied down with any restrictions on its personnel by the Navy Department.

I know in our own particular instance, that of the radio operators, many of our colleagues belong to the Naval Reserve. Belonging to this Reserve and being on a commercial ship has absolutely no value to the Navy. The Navy can obtain these men at any time that it becomes necessary. They are trained at all times. They can apply for ratings in the Naval Reserve and obtain those ratings. If it were possible to get in the Navy at the present time, their salaries would be more than triple what they are in the merchant marine.

Mr. SIROVICH. What is their salary in the merchant marine now? Mr. HADDOCK. In August 1934, it averaged $91. I would say it probably averages a little over a hundred right today.

Mr. SIROVICH. A month?

Mr. HADDOCK. A month.

Mr. SIROVICH. What do they get in the Navy?

The CHAIRMAN. They are allowed subsistence of course?

Mr. HADDOCK. Yes, sir; that is with subsistence. In the Navy I do not know what the first rating of an ensign is, but the next rating below an ensign is $210 per month. That is the chief radio electrician. And incidentally, on the question of wages of radio operators I may also state that in comparison to other personnel in the crew the radio operator is far underneath him in regard to pay.

For instance, in the nine leading maritime nations of the world, the comparison shows that the average American seaman receives approximately 239 percent more salary than the average seaman in the other merchant marines, while the radio operator receives 60 percent more. The radio operator in the merchant marine of the United States is recognized as the most efficient in the world today, and there is no nation in the world that can compare with him, with the exception of the German radio operator, who can compare favorably with the United States. The commercial operator in the American merchant marine cannot be compared with the naval radio operator. His ability is far superior. His technique is far superior. The Navy Department is fast recognizing this fact.

The CHAIRMAN. Would not, however, his recognition as a part of the Naval Reserve in accordance with this recommendation permit him to be sent on naval ships for a certain period each year and thus acquaint himself with the duties on the naval vessel and so be in a better position to perform those duties if called on to serve?

Mr. HADDOCK. I don't think so, because the average commercial operator knows the duty of the naval operator. I would say that the proper procedure there would be to send the naval operator on a commercial ship and let him learn something about handling traffic. The CHAIRMAN. How about exchanging them both, then?

Mr. HADDOCK. Just as an example of that, I made a trip recently to the west coast and returned down the Gulf. Some of the fellows down there started up in the Naval Reserve. So we timed the procedure on Naval Reserve. After the Naval Reserve was over, I went through the same procedure, handled commercial, and we found that a

30-minute drill period for Navy took 12 minutes for commercial handling. Now, that is an example of the inefficiency of the naval radio system.

Mr. CULKIN. Do you suppose the Navy would admit that?

Mr. HADDOCK. I do not know. If you will read Maritime Review recently, where Captain Hooper made quite an attack upon radio operators, and then read his retraction of that as published in our official organ, and have a talk with him, you may ascertain that he pretty well agrees with our viewpoint on the subject.

Mr. CULKIN. I congratulate you on your efficiency.

The CHAIRMAN. What is this drill that you are referring to? What was the nature of it?

Mr. HADDOCK. Well, twice a week the Naval Reserve sends out over amateur frequencies different data relating to the operation of radio communications in the Navy. This is procedure and practice, that is, rules and regulations governing procedure and practice, and the procedure and practice they go through is that inefficient as compared with the commercial procedure. They are required to learn many procedures, rules, and so forth, which when used only delay traffic.

The CHAIRMAN. But can you point out specifically some of those? Mr. HADDOCK. Yes. For instance, the Navy have what they call "Z" signals. The Navy operator has to learn those. In the commercial field we have what we call "Q" signals. He also has to learn those. The "Z" signals are reproduction of the "Q" signals and mean practically the same thing. That is one element of inefficiency.

Other elements are manner in which the messages are handled, preambles to the messages, and so forth.

The CHAIRMAN. What do you mean by that?

Mr. HADDOCK. The preamble consists of the number of the message, the word "radio," the origin of the message, in commercial practice. In the Navy it consists of much more than that, that is, of no use to the operator or to the Department.

The CHAIRMAN. May that not be of use to the operator in the Naval Service?

Mr. HADDOCK. No; absolutely no use to him; just a bunch of red tape.

The CHAIRMAN. You say Captain Hooper agrees with you on that? Mr. HADDOCK. I think he pretty well agrees to. He seems to in his recent communications.

The CHAIRMAN. Has he not charge of that service in the Navy? Mr. HADDOCK. Yes; he is in charge of communications.

The CHAIRMAN. Why does he not put them into effect, then? Mr. HADDOCK. I am afraid that we overlook one important factor in the Government functions. Now, I am personally of the opinionthis is not any viewpoint of our organization, but I am personally of the opinion that many of our bureaus endeavor to build up red tape so their departments may build up and thereby give them a better job. The CHAIRMAN. What particular bureau and what particular practices have you reference to?

Mr. HADDOCK. I have come in close contact with a number of governmental departments, and I find that they are very jealous. of functions which they may have. They are afraid that some other

division or some other governmental agency will take over that particular function and relieve them of it and thereby reduce their personnel and their activities.

Mr. CULKIN. I suppose you include the alphabetical agencies? Mr. HADDOCK. I include all that I have come in contact with. Some of the alphabetical agencies are there also.

Mr. SIROVICH. Is not that the characteristic of every bureaucracy? Mr. HADDOCK. I think so, yes; very much so.

Subparagraph 3, we concur in the committee's report there.

The CHAIRMAN. That is subparagraph 3 of the Interdepartmental Committee report which is found on page 22 of the President's message?

Mr. HADDOCK. Yes.

Paragraph 4: We would amend that to read:

That the use of the construction loan fund and insurance fund be continued and that its purpose be broadened to meet life, disability, unemployment, and effect insurance, together with retirement insurance of seamen.

Mr. CULKIN. That is all groups of seamen, you mean?
Mr. HADDOCK. Yes; all groups of seamen; all classes.

In connection with that, I may point out that the American seaman on a vessel today, if he gets hurt in any manner, gets disabled, it is just too bad. He is a ward of charity from then on. If he loses any of his effects, that also is just too bad; he must go buy them. There is absolutely nothing which he takes aboard the ship with him, regardless of its value, that he can reclaim, including his life. Mr. SIROVICH. Is there not workmen's compensation aboard ships? Mr. HADDOCK. There is not.

The CHAIRMAN. As a matter of fact, have the seamen not been rather opposed to that?

Mr. HADDOCK. The seamen are opposed to it?

The CHAIRMAN. I say, have they been?

Mr. HADDOCK. Not to my knowledge. I think they would favor it. Mr. CULKIN. Does that apply in a foreign port, too, your general indictment of his status? That is, he has no security in the event of injury; that is true in a foreign port?

Mr. HADDOCK. It is true upon any vessel upon which he may be employed.

Mr. CULKIN. Either in a domestic or foreign port?

Mr. HADDOCK. That is true. The mere fact that he is in a foreign port does not mean anything. He is still under the jurisdiction of the master in a foreign port, still a part of the vessel.

Mr. CULKIN. There is no legal obligation then on the part of the master, upon the part of the line or the master representing the line, to take care of him in the event of his disability, to take care of him in a foreign port?

Mr. HADDOCK. There is no legal and apparently no moral obligation, because he is never taken care of. I say "never"-there are exceptions to that rule. Some companies do on rare occasions take care of their personnel. I refer there particularly to the Standard Shipping Co. and the United Fruit Co.

Mr. CULKIN. Your theory is that the result of that situation is that you get a lowered and demoralized service? Mr. HADDOCK. Absolutely.