ering this bill in any way whatever. The only reason we are not speaking in relation to the bill today is because we want to be in accord and present our views as a unit, and I assure you, Mr. Chairman, that the committees that have been considering this bill, both on the Atlantic and Pacific coasts, are very nearly agreed and I think you will find they will be in accord on this legislation when they present their views tomorrow, and I do not want you to think they are trying to avoid their responsibility.

The CHAIRMAN. The only thing is, when we fix the time for the hearing, we would like them to be ready.

Mr. PETERSEN. They are only waiting to have this accord between the Atlantic and Pacific coasts.

The CHAIRMAN. If they cannot get together, we will try to get together for them and they will have to take what we give them. Mr. O'LEARY. Under your explanation of "cadet tional qualifications does the cadet have to possess?

what educa

Mr. PETERSEN. Practically no educational qualifications at all. When they receive their appointment on board the ship, they are simply unemployed young men who have applied to be placed as cadets on board a vessel and there to be trained by the officers on board of the ship.

The CHAIRMAN. As I see it, the one duty they had in the case of the Morro Castle was when they had drills, when they were to go around and collect up the cards of the men who were at the boats and supposed to be taking part in the drill, and to turn them over to the captain, and half the time they were not there.

Mr. PETERSEN. The cadets on some of those ships were sometimes used as captain's clerks and officers' clerks on board the ship.

Mr. O'LEARY. Is there any established curriculum of study in their training?

Mr. PETERSEN. No, sir; there is no curriculum at all, except the curriculum as set up by the officers on the ship.

STATEMENT OF CHARLES S. HAIGHT, ON BEHALF OF THE OPERATORS AND OWNERS OF TRAMP TONNAGE

Mr. HAIGHT. Mr. Chairman and gentlemen of the committee, I appear to discuss only the regulatory provisions of this bill as they affect the carriers engaged in foreign commerce.

The CHAIRMAN. First let me ask you this, Mr. Haight: You are an attorney?

Mr. HAIGHT. Yes, sir.

The CHAIRMAN. Are you representing any particular interests here?

Mr. HAIGHT. I am, sir. I am representing the American Association of Tramp Operators in the Canadian and West Indies trades; I am representing, also, the Association of Ship Brokers & Agents, a New York organization, and I have also been asked to bring to the attention of this committee the serious complications which would result if, as this bill proposes, the United States should depart from the principles of international law as laid down in the law itself and as guaranteed in practically all of our commercial treaties.

The CHAIRMAN. These Canadian tramps are foreign-flag boats, are they not-foreign-flag ships?

Mr. HAIGHT. All foreign-flag ships, sir.

The CHAIRMAN. And these brokers and other people you represent represent foreign interests, too, do they not?

Mr. HAIGHT. Quite right, sir.

The CHAIRMAN. You are an attorney and pretty generally active in admiralty practice and have a very large foreign clientele, have you not?

Mr. HAIGHT. I have, sir; but the American Association of Tramp Operators are all of them American concerns which are engaged in the movement of American cargo, but do charter foreign tonnage for that purpose, but I think are rendering a very great service to the American exporters in the handling of their cargoes at rates which are lower than they could ever get elsewhere-rates which alone make it possible for them to export. And by the handling of tramp tonnage, they are able to accommodate American shippers and move American cargoes which simply could not be moved by liners at all.

Mr. SIROVICH. What do you suggest as a recommendation, with all of your learned ability as an admiralty lawyer, that we could do to transpose these American groups to help develop our American Merchant Marine, and carry that cargo upon American ships; because we are not interested-at least I am not-in helping to develop American interests that are trying to destroy an American Merchant Marine; I am interested in a subsidy that will promote and develop an American Merchant Marine that to at least the extent of 50 percent will carry our own cargoes?

Mr. HAIGHT. I do not think, Dr. Sirovich, there will be any difference of opinion between us as to the importance of maintaining an American merchant marine. But I do not believe it will do us any good to build American ships for peace-time operations and then to so handle the situation as to destroy all chance for the export or transportation of any American goods. My suggestion is that you should not undertake in a bill of this kind to disregard world conditions and to lift American freight rates above world freight rates and apply locally a remedy which, if it is going to be of any value at all, has got to be applied internationally.

Mr. SIROVICH. Well, we are doing this in the bill right now; we are paying the operating deficit

Mr. HAIGHT. Yes.

Mr. SIROVICH. In the form of a subsidy to open up foreign markets. Mr. HAIGHT. Yes.

Mr. SIROVICH. In order to carry our exportable products to those foreign countries.

Mr. HAIGHT. Yes.

Mr. SIROVICH. And surely I would not be in favor of voting a subsidy for an American merchant marine which would destroy the possibility of carrying their cargo.

Mr. HAIGHT. Right.

Mr. SIROVICH. And to go out and employ foreign ships and permit some of the American shippers who are here to make money at the expense of our own merchant marine.

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Mr. HAIGHT. You would not, I am sure, be in favor of taking any action which would make it impossible for the American exporter to sell to South America and give the manufacturer in Europe the absolute control of the market in South America.

Mr. SIROVICH. I would rather give that man a direct subsidy.
Mr. HAIGHT. Right.

Mr. SIROVICH. Knowing it is a subsidy which will help to employ these American people here.

Mr. HAIGHT. Right.

Mr. SIROVICH. Than to lose that opportunity at the price of American labor.

Mr. HAIGHT. Quite right. Therefore, my thought is and my argument is that you should equalize the situation from the standpoint of the American ship operator by giving him all the subsidy that is

necessary.

Mr. SIROVICH. But that is not the ship operator-which is the only agency you are representing-that acts as an agency for foreign ships. Mr. HAIGHT. I am afraid, sir, you have not got my thought. I say, when we undertake to regulate foreign trade, to do as this bill does to give an American governmental agency the power to fix rates for the transportation of passengers and cargoes on all ships in the world, foreign and domestic, both in and out of American ports-we violate every treaty we have with every foreign nation; we violate all of the principles of international law for which we have contended for 150 years, and we admit that what we can do every other nation can do. And when we have said that the present rate from New York to the Far East of $4 is ridiculous and should be raised to $8, and the Far East says, "Not at all; the present rate is the world rate and it stays $4 ", you then fix it so that the goods cannot possibly move in either direction without incurring a fine of $5,000 for every offense. Then what is going to happen?

The CHAIRMAN. Do not you think the authority that is charged with this responsibility would have sufficient intelligence to take those things into consideration? And if it did not have, there ought to be a commission in lunacy held on them.

Mr. SIROVICH. You have the regulatory power in that agency.

Mr. HAIGHT. It seems to me, sir, that when you grant powers it is supposed they will be exercised.

The CHAIRMAN. When necessary.

Mr. HAIGHT. Yes; but if you did not think it was proper to exercise such powers, you certainly would not confer them and I submit that the world market today is the result of nothing in the world but world conditions. You have had an expert, perhaps my best expert on subsidies, before the committee and I heard him testify last week before the Senate committee, and he said the movement of trade internationally had dropped 66 percent in volume and the world tonnage in the meantime has actually increased. Now, what are you going to do about it, when you have twice as many ships as you have possible cargoes to transport in them and freight rates internationally are down and are about down to the bottom? There is an easy way of fixing that and that way is now being seriously discussed. It is an international agreement for the laying up of surplus tonnage, which has been successful twice already

The CHAIRMAN. Will you please name any international conference we have ever participated in in which we have not gotten the short end of it.

Mr. HAIGHT. Well, sir, we did participate on the 14th day of January of this year in a conference called in London, the sole purpose of which was to try to arrive at an international agreement under which surplus tonnage would be eliminated, and the theory is simplicity itself, that the governments which combine in that movement are to impose a small tonnage tax upon ships in operation and the fund so created to be administered internationally, and with that fund any man who runs a ship today at a loss will be offered a reasonable figure to lay his ship up.

The CHAIRMAN. This is to be another international bank, then, is it?

Mr. HAIGHT. No; it is not a bank, sir, at all.

The CHAIRMAN. It will be operated in the manner of a bank; it has the same effect, the same purpose.

Mr. HAIGHT. No. To show you what has happened, all of the owners of tanker tonnage abroad found themselves with a surplus of tonnage and not enough cargo to move, to operate it successfully. They combined and they said "We will pay into a fund 15 percent of our gross freights when our ship operates, and out of that fund we will compensate people who are willing to lay their ships up."

Out of that fund we will compensate the people who are willing to lay their ships up. As a result of that movement, the man who wanted to move his oil, crude or refined, at a price less than cost, found that no tank steamer was willing any longer to carry his stuff at less than cost. They would rather take 3 shillings a ton gross and lay their ships up.

The CHAIRMAN. Can we rely upon foreign nations to perform their obligations under such an agreement as that any more than they perform their agreements about paying their debts to the United States?

Mr. HAIGHT. Well, sir, Mr. Baker, representing the American Steamship Owners, was in London on the 15th of January, and he can tell you better than I can what happened.

I only know that that conference has been reconvened for the 1st of July; and that, as a result of the recommendation made in the January meeting, the Governments of Norway, Sweden, Denmark, Holland, Germany, France, Italy, Great Britain, and Japan have, all of them, agreed, as governments, to go into the arrangement, and to create, by the imposition of a small tax, an international fund for the purpose of eliminating the world surplus in tonnage, which alone will correct world conditions.

The CHAIRMAN. Will Germany pay any more attention to that than she has paid to her agreement not to build submarines?

Mr. HAIGHT. Well, I cannot say.

The CHAIRMAN. Or observe the Versailles Treaty?

Mr. HAIGHT. Well, I do not sit here, sir, as a prophet. I only say that the plan has worked successfully, once in regard to the whaleback ships and once in regard to the tanker ships.

But I suggest, Mr. Chairman, that before we undertake to regulate freight rates in and out of American ports we consider this question: Upon what theory would you say to a Japanese owner or say

to a Norwegian owner or say to a French owner or say to an Italian owner, "Under your treaty with the United States you have the right of free access to our ports to come in without regulation, but you cannot discharge either a passenger or a pound of cargo unless, when you took on your passenger or loaded your cargo, be it in Oslo, Le Havre, or Genoa, you then charged a price which we have fixed in Washington." What is going to happen? The foreign government is going to say to whatever department it is dealing with this: "My dear sir, we have treaties with the United States, in which we are guaranteed free access to American ports." As far back as the days of Commodore Perry

Mr. SIROVICH (interposing). Yes; but we can go ahead and let these foreign ships enter our ports, as you state; but I think something can be done by Congress that would enable the American shipowners to meet the competition, the world market price, of these foreign ships, and give them a subsidy on top of that.

Mr. HAIGHT. Right. Do it by subsidy.

Mr. SIROVICH. That is what we are going to do.

Mr. HAIGHT. No; you are this is not providing for a subsidy. In addition, nobody intended-certainly, so far as the President's message is concerned, or any other document that I have seen, nobody intended that the United States should add to the subsidy bill the power to fix rates in foreign commerce, to violate our treaties and the principles of international law, for which we have contended since we sent Commodore Perry, with warships, to Japan, to demand the right of free access to the Japanese ports. You cannot say that unless you are willing to have an American ship told when it arrives in a Japanese port that it cannot discharge its cargo unless the price which it charged when it loaded in New York is the price the Japanese Government has fixed in Japan-or any ship discharging in any other country of the world, anywhere else.

You are starting here on something that the President never suggested. Nobody else has ever proposed such practice or requirement and there is absolutely no precedent for it anywhere.

Mr. SIROVICH. How would you expect to develop the American merchant marine, when we have got to compete with the foreign governments of the world, with their cheap labor and their cheap ships, unless we do just as I stated before?

Mr. HAIGHT. I agree that you should do what you stated before. Mr. SIROVICH. What?

Mr. HAIGHT. I agree that you should do what you said before, and grant the American steamship owner all the subsidy in the world that is necessary to put him on a equality with anybody else, and maintain that equality. Do not invite the rest of the world to destroy the chances of operating our merchant marine by telling them that we have scrapped our treaties, all of them, that we have abandoned the theory that our ships have the right of free access to foreign ports; that we have adopted the theory that we are going to fix rates coming to and going from America on every side; and we admit that you can do the same thing.

I ask you, Doctor, what would happen to the trade between the United States and Brazil if we should fix the rate for the transpor