The Federal Maritime Authority should report to the Secretary of Commerce, but in certain matters its decision should be final including the following; provided, however, that where rates are concerned the decision shall be subject to review by the courts: 1. Where aid is granted the determination of trade routes, types of vessels, services, and subsidies, including the granting of construction loans and adjustment of present contracts. 2. Equitable solution and determination of any contractual obligations involving Government aid that may be referred to this Authority. 3. Findings in regard to the regulation of rates, and correction of unfair and discriminatory practices. 4. Review and settlement of all maritime labor problems. 5. The promulgation of rules and regulations to protect the public interests in the handling of financial aid. 6. Prescribing of uniform accounting system. The committee feels that the Authority can accomplish its purpose with a small permanent personnel. Since all conference and pooling agreements between American and foreign operators would be subject to the approval of the Federal Maritime Authority, consideration should be given to the advis ability of having a representative of the Authority attend meetings held in connection with the various conferences and pools. The presence of such a representative would strengthen the negotiations of our ship operators. Backed by the authority of the Government and having the benefit of the various powers which are at the disposal of said Authority they will be enabled to secure proper considerations for the just demands of our shipping interests. This should result in securing for our ship interests their equitable proportion of our commerce. In determining trade routes the Authority should give due consideration to the public convenience and the requirements for national defense. Operators under the direct subsidy system should have sufficient financial standing to discharge their obligations under the contract, as well as be officered by practical and experienced shipping men. The Authority should encourage the consolidation of existing companies which are lacking in this respect, as it is felt that a few strong operating companies would be much better than many weak financial organizations. The Committee further recommends the establishment of the Office of Maritime Affairs as an administrative body in the Department of Commerce under an Assistant Secretary for Maritime Affairs whosetenure of office as a matter of policy should be made as permanent as practicable. Under this office should be grouped the activities of the Government dealing with merchant-marine affairs. It is the purpose of this recommendation that the Government administrative functions in connection with the merchant marine shall be in the Office of Maritime Affairs of the Department of Commerce as distinguished from the quasi-judicial and deliberative-policy functions of the Federal Maritime Authority. It is believed that this consolidation of bureaus under an Assistant Secretary for Maritime Affairs will result in the elimination of overlapping activities and will result in reduction in personnel and improvement of efficiency. 135956-35--72 RECOMMENDATION NO. 8 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. These companies render important service in ocean transportation and are often closely affiliated with operating companies. RECOMMENDATION NO. 9 Under the Shipping Act of 1916, as amended by the Intercoastal Act of 1933, the Department of Commerce has the authority to require the filing by the carriers of rates pertaining to the intercoastal traffic, as well as those companies that are members of conferences. The Committee believes that the shippers, the carriers and the Government are entitled to know the rates that are charged by all operators for the services that they render. RECOMMENDATION NO. 10 The act of 1925 created a Merchant Marine Naval Reserve and provided that its members might be paid, as a retainer, 1 month's salary per year of their grade as enrolled in the Reserve. It was further provided that members might be ordered to perform each year 14 days' training duty with pay, thus making it possible for a member to receive a total of 44 days pay per year, provided he performed the 14 days' training duty with pay. Since the passage of this act no funds have been provided for pay of the Merchant Marine Naval Reserve, and therefore, the Reserve has not been sufficiently attractive to gain much headway. No unlicensed personnel has joined and although over 3,200 merchant marine officers have joined the Merchant Marine Naval Reserve, they have had only such naval training as has been available through correspondence courses. The advantage of basic naval training in discipline, gunnery, communications, and so forth, have not been developed because no funds have been available with which to pay the officers and men for training duty. The following needs now have to be faced: (a) The need of improving the efficiency of officers and men in the merchant marine and thereby getting better discipline and safer operation. (b) The need of an operating subsidy for ships in foreign trade. The former (a) can be met by the extension of the Merchant Marine Naval Reserve. The initial material must be satisfactory to naval standards and will be given naval training at intervals and thus be kept in an increasing state of efficiency. The latter (b), if it is to be undertaken by the Government, includes among its elements a pay differential. If such a pay differential is to be met, it will work to the Government's interest to have part of it take the form of Naval Reserve pay and thus assure the procurement by the Government of a body of sea-going officers and men who meet naval requirements, receiving annual naval training and thus creating a splendid reserve for the national defense. When Great Britain entered the war in 1914, she mobilized immediately 16,000 officers and men of her Merchant Marine Reserve. When we entered the war in 1917, we not only had no Merchant Marine Reserve to call into service in naval ships, but on the contrary, on account of the predomination of foreigners therein the Navy had to furnish officers and men to man the merchant marine. RECOMMENDATION NO. 11 The proposed changes in our laws controlling employment conditions of seamen are purposely directed to the correction of certain conditions on our vessels which tend toward the lack of discipline and seriously affect the well-being of our seamen. The three specific suggestions mentioned are current practice in other maritime nations. RECOMMENDATION NO. 12 This recommendation, dealing further with conditions aboard ship and contemplating now legislation, is made with the definite thought in mind that discipline on our vessels must be improved, certain safeguards must be thrown around the conditions under which seamen are employed, and proper machinery should be provided for the determination of minimum wages and the settlement of labor disputes. It is believed that by manning our ships with American citizens and by licensing or issuing certificates to certain classes of the crew that a definite improvement will be realized in discipline and efficiency. The three-watch system should be extended to apply to the deck as well as the engine room and a fine or penalty provided for each offense on the part of the ship operator. The present law in regard to threewatch systems in the engine room is without teeth. Many of the recent labor troubles have developed to serious proportions due to the fact that proper machinery has not existed for the settlement of such problems and it is believed that the Federal Maritime Authority can fill this urgent requirement. Such an organization, in order to be effective, must have a thorough knowledge of the conditions surrounding such problems, so that both labor and industry will have confidence in the personnel of the Authority otherwise its decisions will not be effective. As labor rates and working conditions have a definite effect upon operating costs, the Federal Maritime Authority can take all phases of the problem into consideration in making its decisions. RECOMMENDATION NO. 13 At the time of submitting this recommendation, no report has been made by the Post Office Department as to its finding in the pending inquiry into steamship mail contracts. It is possible that some of these contracts may be changed. If the Congress should adopt a new subsidy policy and other forms of Government aid along the lines covered in this report, it would be most desirable that thereafter there should only be one administrative agency responsible for administering Government assistance. The Committee is of the opinion the Federal Maritime Authority (herein before recommended) should be given authority to make all necessary adjustments with operators, and other interested parties, of obligations and rights under present form of Government aid, including contracts so as to bring the existing status into harmony with the future Government program. Adjustments should be made on a fair and equitable basis, with due consideration of the public convenience and necessity in each case. RECOMMENDATION NO. 14 With respect to the present laid-up fleet under the control of the Shipping Board Bureau, the Committee is of the opinion that this fleet should be retained until such time as it can be determined by the proposed Federal Maritime Authority as to what part of the fleet is suitable only for scrapping purposes and what part could be otherwise disposed of. RECOMMENDATION NO. 15 In recommending that adequate facilities for an efficient shipping and employment service be maintained by the Government in the principal ports of the United States for the purpose of providing employment service, the Committee feels that the present Sea Service Bureau might be extended and thus eliminate certain undesirable practices which have grown up under present conditions in connection with the matter of procurement of personnel for ships of the merchant marine. RECOMMENDATION NO. 16 It is felt by the committee that if its recommendations are followed, there will be no necessity whatsoever for a "master shipping code" for the marine industry or for codes dealing with various divisions thereof. By the establishment of the proposed Federal Maritime Authority with control of rates and unfair practices provided as one of its functions and by assignment to this Authority of the duty to determine minimum wage rates and settlement of labor disputes, the important features of the codes as previously developed for approval are, in the judgment of the committee, amply provided for. In the event that the Federal Maritime Authority is not set up as herein before recommended, the Committee members representing the Department of Labor and the National Recovery Administration believe that there should be a code which will include minimum wages, working conditions, and collective bargaining. RECOMMENDATION NO. 17 1. The statistics of international trade for the world at large include both land-borne and sea-borne commerce, inasmuch as some countries do not segregate the two. It is a reasonable assumption, however, that the general trend of one parallels the other in close degree, since both are subject to the same underlying influences. These statistics may be compared, therefore, with those of world shipping to indicate broadly whether cargo and shipping space balance. It appears from index numbers compiled by the Bureau of Foreign and Domestic Commerce that the volume of international trade has not kept pace with ship construction since 1913. These index numbers are reproduced for consecutive years in the attached table and for 3-year intervals below: The index numbers of shipping are more than conservative, for they make no allowance for increased efficiency. In comparison with 1913, the average ship of today is speedier and its cargo capacity is greater. Moreover, port facilities are better and turn-arounds are quicker. It is apparent from these index numbers that space in recent years has been greatly in excess of cargo. The idle tonnage confirms this, for in 1913 there was little or none, whereas in 1933 there was 11,500,000 tons. Moreover, the empty space in vessels in service is greater; figures compiled by the Liverpool Steamship Owners' Association give evidence of this. They show that the vessels clearing United Kingdom ports for foreign countries in 1913, excepting tramps with coal, averaged 51 tons of cargo per 100 net tons of shipping, whereas by 1933 the ratio had declined to 27 per 100. Correspondingly, the vessels entering the United Kingdom from foreign countries in 1913 averaged 114 tons of cargo per 100 net tons of shipping, compared with only 92 per 100 in 1933. Suez Canal and other reports also confirm the declining ratio in post-war years. In this connection it should be observed that the total world tonnage of vessels of 100 gross tons and over has increased from 1922 to 1933 in the amount of 6,319,000 gross tons, while for the same period the tonnage of the United States shows a decrease of 2,500,000 gross tons. Further, in 1922 the American vessels registered for foreign trade totaled 10,720,000 gross tons and in 1933 the tonnage registered was 4,700,000 gross tons, showing a reduction of vessels registered for foreign trade of about 6,000,000 gross tons. 2. Under date of July 18, 1934, our Embassy in London forwarded a communication from Sir John Simon dated July 16 enclosing a printed Memorandum on the Shipping Situation. In his letter Sir John asked our Government to furnish to Great Britain our views (1) on the shipping situation generally and (2) on the matters to which special attention was invited in the memorandum. A copy of the printed memorandum apparently had been simultaneously sent to each of the principal maritime countries. After setting forth the British position with regard to the situation of its tramp shipowners and liner shipowners, the memorandum goes on to say that a number of the European countries, viz, Denmark, the Netherlands, Norway, Sweden, Germany, Greece (France and Italy are in general accord) had theretofore suggested to Great Britain that it should convene a maritime conference for the purpose of discussing, among other things, (1) the abolition of limitation of |