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subsidies, and (2) the restoration of equilibrium in the shipping trade by adjusting the supply of tonnage to actual world requirements. The memorandum points out that Great Britain could see no useful purpose of an international conference of maritime governments until it was clear that the interested countries were ready in principle to join in international measures for remedying present difficulties and were in general agreement as to the measures to be taken; that so far as stabilization or rationalization might be the remedy for the present unprofitable condition, Great Britain felt that the formulation of schemes should be undertaken in the first instant by shipowners in the principal countries; that while it felt that there would be difficulty in getting anywhere on this line so long as the question of subsidies was undisposed of, nevertheless, it had urged British shipowners through their international organizations to press on other shipowners the framing of proposals along the line of rationalization; and the memorandum then expressed the hope that the governments of the other countries will similarly urge their shipowners to cooperate to this end.

In accordance with this formal statement of the position of the British Government, the shipowners' organization in Great Britain several months ago suggested that representatives of American shipowners join with them and representatives of other countries in an international conference.

Pursuant to the suggestion of the British Government that this country should urge its shipowners to cooperate with those of other countries to see if it could be possible to agree upon any plan for adjusting the supply of tonnage to actual world requirements, a member of the Interdepartmental Committee on Shipping Policy, with the approval of the Committee, and with the further approval of Secretary Hull and Secretary Roper, informed a gathering of steamship operators in New York at the office of the American Steamship Owners' Association that this Government recommended to the American shipowners that they accept this invitation, with certain reservations. A copy of the statement made to the shipowners appears at the end of this section.

After having the matter under consideration for some time, we have been advised that the American Steamship Owners' Association has arranged to send two delegates to a preliminary conference to be held in London on or about January 14, 1935, for the purpose of endeavoring to prepare an agenda for the consideration of a full international conference of shipowners to be held at a later date.

3. It seems to be obvious that the position to be taken by the American representatives at an international conference should be strictly in accord with the administration's merchant marine policy. That policy is still in its formative state although, of course, the Merchant Marine Acts of 1920 and 1928, until modified, remain in effect. These acts declare, among other things, that it is the policy of the United States to have a merchant marine of the best equipped and most suitable types of vessels sufficient to carry the greater portion of its commerce. Such is not the condition at the present time and there is no evidence that it will be for a considerable period in the future. Nevertheless, until some decision is reached by Congress to the contrary it would seem clear that the attitude of this country in an international conference must be that we cannot become a party to an agreement which fixes our ultimate share in the carrying trade to less than the amount indicated by Congress. As a temporary matter, however, and in view of the present depressed condition in shipping resulting from the greatly diminished volume of trade, and the further substantial excess of tonnage to move this trade, as heretofore pointed out in this report, there seems to be no good reason why the operators of this country cannot cooperate with the operators of other countries wherever it may be practicable to bring about a condition where ships may be run at a profit. If it becomes necessary, therefore, for the American representatives to commit themselves before the present administration's policy is definitely enacted, we submit that the following general statements be used as a guide in determining the American position at the conference:

(a) The operators are willing to agree to any plan for the elimination of surplus tonnage and stabilization of rates which is not in conflict with this Government's merchant-marine policy.

(6) For such a temporary period of time as may be mutually agreeable to consider eliminating over-tonnage on any particular trade route or service and to participate in the reduction of such tonnage, but in doing so to retain the same percentage of the commerce thereafter as we now carry.

(c) That the owners of vessels which might be temporarily retired under such plan be compensated out of a pool to be contributed to by the vessels left in operation in the particular service.

It would seem to be reasonably clear that any agreement along this line, while undoubtedly having the effect of improving the earning position of the world's fleet, would in no way interfere with any plan which this administration might adopt looking to the building of a really modern fleet to replace the one now becoming obsolescent. STATEMENT TO BE MADE BY MR. THOMAS HEWES, A MEMBER OF THE


1. That this Government recommends to the shipowners that they accept the invitation of the British shipowners to be represented at an International Conference of Shipowners.

2. That this Government recommends to the shipowners that in accepting the invitation, the shipowners state that they are not committing themselves either in principle or detail to any plan of rationalization or limitation of subsidy.

3. That this Government, in recommending acceptance, advises the shipowners that it (the Government) is still studying all of the related problems of world shipping and the position of the American Merchant Marine, and has reached no conclusions as yet, and that therefore it must be understood by the shipowners and the conference that nothing the shipowners may say or do in connection with said Conference can be construed as having the approval or acquiescence of this Government.

Value of world trade (imports and exports combined), 1913–55

[Index numbers of prices and volume (1913=100)

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NOTE.-These trade figures include landborne as well as waterborne; separate figures for the latter en
not available. It is a reasonable assumption, however, that the trend in general was the same.

Number and gross tonnage of the vessels of 100 tons gross and upwards (steam,

motor, and sail) belonging to each of the several countries of the world, as recorded
in Lloyd's register

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The Committee recommends the establishment of a merchant
marine to be privately owned and operated. The Committee feels
that the Government should discontinue the practice of competing
with well-established and adequate privately operated services in the
carrying of passengers and cargo.

An effort has been made to present the salient facts of this study
in the briefest and most direct manner. Analysis of world-trade con-
ditions, the economics of foreign trade routes, or the complicated
nature of our present merchant marine as aided by the Government's
efforts since the World War has required the Committee to deal with
masses of data which have but one uniform characteristic—that of
constant change. In order to understand the part the Government
should play in the growth and development of our foreign commerce,
this kinetic property of the controlling facts must be kept constantly in mind, and it points the way to a continuous study of the problem. Respectfully submitted.


Commerce Department. TURNER W. BATTLE,

Labor Department.

Post Office Department.
Agricultural Adjustment Administration.

Únited States Navy.
Thomas HEWES,

State Department.

National Recovery Administration.
Chairman Committee on Shipping,
Business Advisory and Planning Council.




Whereas section 5 of the Independent Offices Appropriation Act, 1934, approved June 16, 1933 (Public, No. 78, 73d Cong.), provides

"Whenever it shall appear to the President, in respect of any contract entered into by the United States prior to the date of enactment of this act for the transportation of persons and/or things, that the full performance of such contract is not required in the public interest, and that modification or cancelation of such contract will result in substantial savings to the United States, the President is hereby, upon giving 60 days' notice and opportunity for public hearings to the parties to such contract, authorized, in his discretion, on or before April 30, 1935, to modify or cancel such contract. Whenever the President shall modify or cancel any such contract, he shall determine just compensation therefor; and if the amount thereof, so determined by the President, is unsatisfactory to the individual, firm, or corporation entitled to receive the same, such individual, firm, or corporation shall be entitled to receive such portion thereof as the President shall determine and shall be entitled to sue the United States to recover such further sum as added to said portion so received, will make up such amount as will be just compensation therefor, in the manner provided for by paragraph 20 of section 41 and section 250 of title 28 of the United States Code:

Now, therefore, by virtue of and pursuant to the authority vested in me by the aforesaid section 5 of the Independent Offices Appropriation Act, 1934, and in order to effectuate the purposes thereof, it is hereby ordered as follows:

The Postmaster General and such officers of the postal service as he may designate are hereby authorized and directed, upon giving the 60 days' notice required by the aforesaid section, to hold public hearings with respect to any foreign air-mail contract and ocean-mail contract under the Merchant Marine Act, 1928, entered into prior to June 16, 1933 (at which hearings the parties to such contracts may appear or be represented), to consider all the evidence adduced at such hearings and to report to the President, within 6 months from the date hereof, their findings and conclusions as to whether such contracts or any of them should be modified or canceled and, if so, in what respect, with substantial savings to the United States, pursuant to the provisions of the aforesaid section.



The Postmaster General is further authorized to employ such attorneys, technical experts, clerks, and other employees as may be necessary to carry out the provisions of this order.


July 11, 1934.





House Office Building, Washington, D. C. DEAR MR. BLAND: On behalf of the Cosmopolitan Shipping Co., I had intended to ask for a few minutes before your committee to propose an amendment to House bill no. 7521, which is the bill dealing with ship subsidies. I understand, however, that you are desirous of closing these hearings today, and therefore will refrain from asking for time to appear before your committee. I am, therefore, submitting to you a suggested amendment which

we desire to have inserted in the bill, and I respectfully request that this suggested amendment be printed in the hearings. The amendment is short, and its purpose is 80 plain that it seems to require no particular argument to support it, for I am sure it is the intent of the committee to restrict needless competition between American-flag services. To grant financial aid to two lines serving the same route would be justified only in the most exceptional cases. Respectfully yours,



Add on page 40 at the end of part 4, title 5, a new section, as follows: Sec. 519. Should the Authority, determine to grant financial aid under this title to one of two or more American-flag services between the same American port or ports and the same foreign port or ports, the Authority shall regard as essential elements entitling a service to preferential consideration, the experience, the length of time during which such service, route, or line has been established, and the volume of cargo which has been carried by such line: Provided, That only in exceptional cases, and where the Authority determines that two or more services on the same route are essential to serve the same, shall financial aid be granted to more than one applicant covering said route.


New York, N. Y., April 3, 1935. Hon. ScHUYLER OTIS BLAND,

House of Representatives, Washington, D. C. DEAR Sır: We have read with great interest of President Roosevelt's proposal that a direct subsidy be granted to American shipping.

While our association heartily endorses Government help to American shipowners with a view of enabling them to compete with foreign interests and of developing a strong American merchant marine, it seems to us that since the question of subsidy involves the earning power of the steamship compaines, anything which would increase that earning power is an important element.

If American shipowners were to depend exclusively upon Government subsidy and would neglect the regular channels of trade in order to maintain and develop their services, such Government help would be but a burden upon the taxpayers and would fail to bring about the desired effect.

Our association is composed of travel agencies located all over the United States. A major portion of the passenger transportation to and from United States ports comes through, or is originated by, the travel agents. They are not merely sellers of tickets but, on the contrary, experience has shown that the travel agents are responsible for the origination of business through advertising and personal contact. Many thousands of dollars are spent each year by

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