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BUCYRUS-ERIE Co.,

Hon. SCHUYLER OTIS BLAND,

South Milwaukee, Wis., April 24, 1935.

Chairman of the House Committee on Merchant Marine and Fisheries,

House Office Building, Washington, D. C.

DEAR SIR: Our attention has been called to the above bills providing for the creation of a Maritime Authority, and conferring upon that authority the power the prescribe minimum and maximum rates, fares and charges, rules and practices which may be charged and enforced by vessels documented under the laws of the United States or foreign vessels in the foreign trade of the United States.

As exporters of heavy machinery to practically all parts of the world, we find ourselves out of sympathy with legislation that will have the tendency to increase ocean freight rates and does not permit of the flexibility to meet foreign competition that is most necessary to carry on foreign commerce.

It would appear from the information we have received that the provision quoted above in these bills would eliminate independent competition resulting in higher freight rates that might seriously jeopardize our export business.

According to the best information we have been able to obtain, the majority of rates from the United Kingdom and Continental European ports are lower than rates from American ports to corresponding ports abroad, and our European competitors are regularly in a position to sell their equipment at lower prices delivered at their works than those for which we can afford to sell our equipment if we are to retain a reasonable margin of profit. In a great many cases we can offset this disadvantage to a certain extent by the quality of our product, but the handicap is tremendous if one considers also such obstacles as tariffs preferences for home products, exchange restrictions, etc.

For these reasons we look with disfavor on any legislation which would tend to place us at a further disadvantage such as higher ocean freight rates. It would appear that the provision quoted above in these bills is somewhat similar to the objectionable part of the Shipping Industry Code, through the Shipping Board hearings under section 19, and also through the Eastman bill, both of which were discarded as impractical and harmful to American foreign trade.

In view of the foregoing, it is hoped that you will give careful consideration to the manufacturer's and shipper's viewpoint in any legislation for the creation of a Maritime Authority.

Yours very truly

M. T. SMITH, Contract Manager.

ATLAS ASBESTOS Co.,

Hon. SCHUYLER OTIS BLAND,

NORTH WALES, PA., April 24, 1935.

Chairman House Committee on Merchant Marine and Fisheries,

Washington, D. C.

DEAR SIR: We are writing you with regard to Bland bill, H. R. 7521, and particularly with regard to that part of it which we understand deals with the regulation of traffic in foreign commerce.

We are unalterably opposed to any attempt to regulate freight rates in foreign commerce. This company sells a considerable percentage of its products for export. At the present time we are confronted with serious competition from Japan, England, and Germany as well as one or two countries in Central Europe which seem to be coming into the picture. Naturally, we do not want to be placed at any greater disadvantage in competing with these foreign people, and it seems to us obvious that if a bottom is placed on freight charges, it will simply discriminate against American manufacturers.

We have no fault to find with the principle of subsidizing shipping to a reasonable extent, but we do oppose any attempt to regulate freight charges and we trust that your influence will be used against this particular feature.

Yours very truly,

J. CARROLL JOHNSTON, President.

Hon. Representative BLAND,

THE GEROLD Co.,
New York, N. Y., May 9, 1935.

House Committee on Merchant Marine and Fisheries,

Washington, D. C.

DEAR SIR: The undersigned noticed the matter of the proposed Ship Subsidy Act, S. 2582, H. R. 7521, introduced into Congress by you on April 15, 1935.

We have done considerable importing and exporting of machinery and engineering equipment from the United States to various parts of the world, particularly Europe, in the past 20 years.

It is our opinion that very little advantage would accrue to America by the passage of this act. It is difficult to see how any control can be maintained on freight rates and regulation of the foreign-flag portion of shipping, particularly since this always has constituted the most substantial fraction of bottoms in which our freight has been carried.

Although we are naturally in hearty agreement with the fundamental principles involved, tending toward the establishment of an American merchant marine to fit our needs, it seems to us that the fixing of freight rates would eliminate fair competition amongst freight carriers and would reduce the prospects of business by increasing our costs of transportation. On our class of goods these costs are very considerable, and any tendency toward increase would be reflected in a lessened volume of exports.

At any rate it has been our experience in years past that, all conditions being equal, our clients abroad have insisted upon our using all ships of their own nationals. We therefore believe and respectfully wish to say that, from these several angles, it would be unwise to enact this legislation.

Respectfully yours,

L. B. GUDY.

FOREIGN TRADERS ASSOCIATION OF PHILADELPHIA,
Philadelphia, April 30, 1935.

Hon. SCHUYLER OTIS BLAND,

United States Congress, Washington, D. C.

SIR: The Foreign Traders Association of Philadelphia, at its regular meeting on Thursday, April 25, unanimously adopted the following resolution:

"We strongly oppose the rate-fixing provisions contained in title VII, section 701, of the bill H. R. 7521."

Considerable discussion was devoted to this question. In general, the feeling was expressed that the bill was desirable in every respect, with the exception of the rate-fixing provisions.

In view of the unfair position in which we feel American or other lines in the foreign trade of the United States would be placed in competition with lines operating from our principal competitors, we are decidedly against the rate-fixing provisions of the bill. Moreover, the situation existing between conference and

nonconference lines is such that we believe the rate-fixing provisions of this bill would be burdensome to American foreign trade.

Respectfully,

ROLAND L. KRAMER, Secretary.

Copies to Hon. Daniel C. Roper, Hon. John Dickinson, Hon. Harry C. Ransley, Hon. Wm. H. Wilson, Hon. Claire G. Fenerty, Hon. John B. Daly, Hon. Frank J. G. Dorsey, Hon. Michael J. Stack, Hon. George P. Darrow, Hon. James Wolfenden, Mr. H. S. Brown.

PHOSPHATE EXPORT ASSOCIATION,
New York, May 2, 1935.
FISHERIES,

HOUSE COMMITTEE, MERCHANT MARINE AND
House Office Building, Washington, D. C.
DEAR SIRS: I beg to write you in connection with S. 2582 and H. R. 7521,
known as the "Merchant Marine Act of 1935" or the "ship-subsidy bill", and
would say that in the conduct of our business it is necessary for us to charter or
have to do with the chartering of from 800,000 to 1,000,000 tons of freight space
per annum. We cannot conduct our business in competition with foreign pro-
ducers of phosphate unless the shipowners of all nations with whom we deal are

free to make us immediate and favorable rate quotations and are free to change these quotations immediately in order to fit the changing conditions of the freight market.

As I think you know, an attempt to put the foreign freight market in a "straitjacket" was made in the general Shipping Code which was finally disapproved by the President and which we fought in every proper way that we could, believing then, as we now do, with reference to section 701 of the bill that its effect might be to put us entirely out of business.

In our business the ocean freight often amounts to from one-third to one-half of the cost, insurance, and freight-landed cost in a foreign country and it is therefore easily seen that our ability to secure immediately whatever freight rate is necessary in order to have us do the business is essential.

Congress cannot possibly subject the commerce between two foreign countries to its regulatory powers, but if it subjects the foreign commerce of the United States to regulatory powers of the nature complained of, the American exporter will meet the foreign exporter in the international battleground with one hand tied behind his back.

We beg to remind you that the export of phosphate from the United States amounts to around 40 percent of the total production and if this business should be lost, it would have serious repercussions. For the year 1934 the American share of the foreign market in phosphates was about 14 percent.

We ask you to so amend the bill that the freight market in United States foreign trade may be left free and untrammelled and subject only to the laws of supply and demand.

Yours respectfully

M. H. GRACE, President.

THE PHOSPHATE MINING Co.,
New York, May 3, 1935.

COMMITTEE ON MERCHANT MARINE AND FISHERIES,

The House of Representatives,

House Office Building, Washington, D. C.

DEAR SIRS: In the proposed Merchant Marine Act of 1935 (ship-subsidy bill, S. 2582, H. R. 7521) we understand that provision is make for the establishment of an authority with power to fix all freight rates of American and foreign vessels engaged in foreign trade with the United States, including tramp ships and both liner and full cargo services. We wish to protest such legislation and to ask for your efforts actively in opposition to it.

Phosphate rock is exported from Florida even now at the rate of about 1,000,000 tons yearly, and successful competition of the United States product in our principal export markets is in great degree dependent on the freedom of ocean carriers to quote, immediately and favorably, on business negotiated up to the point of sale. Carriers fit their rates to the continually changing conditions of the freight market, and any limitation placed on their freedom so to quote would have a highly injurious effect on our industry.

Yours very truly.

FRANKLIN FARLEY, Assistant Treasurer.

BUCYRUS-MONIGHAN CO.,
Chicago, May 2, 1935.

Subject: Copeland bill, S. 2582, and the Bland bill, H. R. 7521, now before Congress on shipping subsidies and dealing with regulation of traffic in foreign

commerce.

The HONORABLE SCHUYLER OTIS BLAND,

Chairman of the House Committee on Merchant Marine and Fisheries,

House Office Building, Washington, D. C.

DEAR SIR: Out attention has been called to the above bills providing for the creation of a maritime authority and conferring upon that authority the power to prescribe minimum and maximum rates, fares and charges, rules, and practices which may be charged and enforced by vessels documented under the laws of the United States or foreign vessels in the foreign trade of the United States.

As exporters of heavy machinery to practically all parts of the world, we find ourselves out of sympathy with legislation that will have the tendency to increase 135956-35--74

ocean freight rates and does not permit of the flexibility to meet foreign competition that is most necessary to carry on foreign commerce.

It would appear from the information we have received that the provision quoted above in these bills would eliminate independent competition resulting in higher freight rates that might seriously jeopardize our export business.

According to the best information we have been able to obtain, the majority of rates from the United Kingdom and continental European ports are lower than rates from American ports to corresponding rates abroad, and our European competitors are regularly in a position to sell their equipment at lower prices delivered at their works than those for which we can afford to sell our equipment if we are to retain a reasonable margin of profit. In a great many cases we can offset this disadvantage to a certain extent by the quality of our product, but the handicap is tremendous if one considers also such obstacles as tariffs, preferences for home products, exchange restrictions, etc. For these reasons we look with disfavor on any legislation which would tend to place us at a further disadvantage, such as higher ocean freight rates.

It would appear that the provision quoted above in these bills is somewhat similar to the objectionable part of the Shipping Industry Code, through the Shipping Board hearings under section 19, and also through the Eastman bill, both of which were discarded as impractical and harmful to American foreign trade.

In view of the foregoing it is hoped that you will give careful consideration to the manufacturer and shipper's viewpoint in any legislation for the creation of a maritime authority.

Very truly yours,

O. J. MARTINSON, President.

Hon. SCHUYLER OTIS BLAND,

United States House of Representatives,

PAGE, L'HOTE Co., LTD.,
New Orleans, U. S. A., May 3, 1935.

Washington, D. C.

DEAR SIR: We wish to file our protest against sections 701, 1002, 1006, and 1009 of bill H. R. 7521, known as the "Bland bill."

Everyone agrees that American merchant ships should have a generous subsidy to offset the difference in cost of building, and the difference in cost of operating American ships in competition with foreign ships, and also that this subsidy should include a sufficient amount to offset any subsidy that foreign ships may be receiving from their respective Governments, but what every exporter and independent shipping man in this country does object to is that after giving American shipowners the above benefits, the American and foreign conference lines should be given a complete monopoly of the export business of this country, and it is for the Senate and House of Representatives to decide, whether the entire export business of this country is to be put into the hands of a few American conference lines and a large number of foreign conference lines to the detriment of the American exporter who has to compete with exporters from other countries, or whether the Senate and House of Representatives consider the interests of the exporters of this country is more important to the welfare of this country. The same group who are behind this bill are the very ones who first tried to accomplish their purpose of securing a monopoly of the American export business through the contract and no-contract system. Not being successful in this, they then tried to obtain their objective by wiring section 7 into the Shipping Code, which was successfully defeated. Their next effort was by writing certain features into the Eastman bill, and their present effort is to endeavor to obtain their purpose through sections 701, 1002, 1006, and 1009 of the Copeland bill.

Under section 701, the so-called "Marine Authority" would have the right to prescribe minimum, as well as maximum rates, and there is no set of human beings who can tell in advance what minimum rates an exporter will require in order to enable him to successfully compete with the exporter from a foreign country.

Under section 1002, the Marine Authority is authorized to spend public funds to finance rate wars.

Under section 1006, the Marine Authority has the right to permit members of the conference to make deferred rebates to shippers, which, in the present ship

ping law, is illegal, and should remain so. The dynamite in this section is so obvious, that we do not consider it necessary to go into details, except to say that, the majority of the lines in the conference are foreign lines, and that by legalizing deferred rebates you are putting a weapon into the hands of foreign competitors, the extent of which, it is impossible to guess.

Under section 1009, the Marine Authority is authorized to finance subsidized shipowners with public funds to aid and support fighting ships. In other words, after the subsidized lines have been well taken care of, they can apply to the Marine Authority for Government funds to furnish them with fighting ships to meet the competition of those who are willing to carry the products of this country at lower than the authorized minimum rates which they may be willing to take. In conclusion, we can only reiterate that, it is for the Senate and House of Representatives to decide which is the most important; the profits of a few wealthy and highly subsidized American steamship lines and the profits of the large foreign conference lines, or the welfare of the exporters of this country, who are trying to build up a market for our surplus products.

Respectfully submitted,

JULES C. L'HOTE, President.

Hon. SCHUYLER OTIS BLAND,

VOGEMANN-GOUDRIAAN Co., Inc.,
New Orleans, La., May 1, 1935.

Chairman House Committee on Merchant Marine and Fisheries,

House Office Building, Washington, D. C.

SIR: These bills provide for the creation of a Maritime Authority, which, among other things, would provide for subsidies and the power to fix all ocean rates of both foreign and domestic vessels for the carriage of all cargo, passengers, both into and from United States.

The subsidy provisions of the bill seem sound and in accordance with the recommendation of the President, although their successful operation would depend to a great extent upon the wisdom, judgment, and disinterestedness of the individuals who would administer them.

Under section 701 the authority would have arbitrary and unlimited power "to prescribe minimum and maximum rates, fares and charges, rules and practices, which may be charged and enforced by vessels documented under the laws of the United States, or foreign vessels in the foreign trade of the United States, although no standard of rate-making has been suggested." Rate fixing in foreign trade was unsuccessfully attempted in the General Shipping Code which was not approved by the President. Congress refused to enact rate-fixing in the so-called "Johnson bill." It was strenuously opposed when attempted in the rules and regulations under section 19 of the Merchant Marine Act, 1920, when recently proposed in the Shipping Board Bureau; and it was most strenuously opposed in the Eastman water carrier bill (S. 1632) on which hearings have recently been concluded.

This provision is not found in the President's message or in the report which were submitted to Congress, and raises far reaching and highly controversial problems of international and domestic law of foreign-trade economics. It would empower the authority to prescribe all rates of American and foreign vessels in foreign trade, including tramp ships and nonconference lines, together with both liner and full cargo services. No other country in the world attempts to fix rates in its foreign trade. The subject of rate fixing was carefully investigated, considered, and rejected by the Democratic Congress in 1912-14. The Committee on Merchant Marine and Fisheries of the House of Representatives (commonly known as the "Alexander committee") in the Sixty-second and Sixtythird Congresses, after exhaustive investigation and consideration, reported that rate-fixing would be “particularly objectionable to American exporters, who are competing with foreign markets and are often dependent upon an immediate and favorable rate quotation in order to close business.' It will provoke resentment among foreign nations and retaliation will result, thus bringing about a very chaotic condition.

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Section 1006, authorizing the authority to permit members of conferences to make deferred rebates to shippers in consideration of exclusive patronage, has no relation to either a system of subsidies to American shipowners or to the promotion of American export trade. Section 14 of the Shipping Act, 1916, forbids in very positive terms the granting of deferred rebates, and the authority

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