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we need to export all of the goods from this country. I also believe it will stimulate business all over the country if we can get our reasonable share. We do not want it all, by any means; but we do want a reasonable chance to build ships there on a parity with the rest of the country. And I think we can if we are given a little help, and I am sure this bill will be just about the help we need.

STATEMENT OF HON. THOMAS F. FORD, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF CALIFORNIA

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Mr. Ford. Mr. Chairman and members of the committee, it seems to me this amendment is in absolute harmony with the philosophy of the bill and for this reason: The President has stated that he wishes to subsidize the merchant marine openly and fairly and honestly, so that everybody may know exactly what we are doing. This subsidy is for several purposes; one being to take up the difference in the cost of construction here and abroad, in addition to the cheap labor and all that.

Now what we are asking in this amendment is not to equalize for us, so as to counteract the effect of cheap labor on the east coast, but merely to take up that stretch of a long transportation haul. And if we are going to develop this country in a balanced and even way, it seems to me every part of the country that has the genius and the skill to perform any type of service effectively and efficiently ought to be given an equal opportunity with every other part. This is what Mr. Welch's amendment would do for the shipbuilding industry of the west coast.

There is another phase of it that appeals to me; that is, in the event of an emergency and if there were no shipping facilities on the Pacific coast, no building facilities, and for the time being they had to be conducted on the east coast, there would be that long trip to get the ships around there where they were needed. That would be a very important factor in case of an emergency. Whereas, if built on the coast, they would be there and would obviate the necessity of the trip—not quite as long as the Oregon made, because of the Canal having cut off some of the distance—and I mean now merchant ships—but one almost as long. So that is a factor, it seems to me, that ought to be given every consideration by the committee and I am sure it will be.

But the thing that appeals to me the strongest is that the amendment is absolutely in harmony with the philosophy of the bill; because it attempts to do in America, between the different geographical divisions, what we are trying to accomplish with reference to other countries. The bill gives this country an even break with the others. Mr. Welch's amendment gives the west coast an even break with the east coast. The bill makes it possible to loan our shipbuilders money and to give them a rate of interest that will enable them to compete. And if, we are going to do that for the whole country in reference to Europe, or any other part of the world that is building ships, why not do it to the Pacific coast with reference to the Atlantic coast on absolutely the same principle? I do not believe any member of the committee will disagree with me that that is sound as regards the bill.

The CHAIRMAN. And you think it would give you a stabilized class of employees and officials, draftsmen, and so forth?

Mr. Ford. I do.

The Chairman. Who would be there in event of emergency and we would not have the conditions that existed during the World War, when some of the men were drawn from the East, from the shipyards then, when the emergency ceased, they lost their employment there and they were permanently out.

Mr. FORD. They were stranded.

The CHAIRMAN. Which embarrassed the yards in the West in getting the best type of draftsmen and skilled mechanics and employees?

Mr. FORD. Yes. And I notice there is a clause in the amendment which seems to be eminently fair; that is, that in order that we not appear as attempting to take from the east coast anything that is their right and properly their province, we have stated in this amendment that these ships shall confine their activities to the Pacific coast and western waters and, whenever they cease to do that, whenever they leave their home port, then the rate of interest, which we are asking as a differential, three-quarters of 1 percent, shall cease to operate. That seems to me to make the thing eminently fair.

Now there has seen some statement made as to the commerce on the Pacific coast. Foreign trade happens to be one of my pet subjects. It happens that this has been the problem I have paid more attention to than any other subject.

The CHAIRMAN. Just on that line, may I ask you this question, which I have thought about very seriously quite often: Should not we really have a committee in this House devoted particularly to foreign trade.

Mr. FORD. Absolutely.

The CHAIRMAN To foreign commerce, and devoting its efforts and energies to the building up of the foreign commerce of this country?

Mr. FORD. We absolutely should, and it seems to me the Congress or the leadership has been remiss in not having done that long before. We have a great Department of Commerce, many of whose activities are connected with foreign trade; but, of course, it takes in a number of other things. But I just want to make this statement; I think it was Theodore Roosevelt who, in a speech at one time, pointed out the steps by which commerce had developed-in the Mediterranean first and then the Atlantic. And now we are coming to the Pacific and, in the next hundred years, that probably will be the great theater of the commerce of the world; because on the other side of the Pacific there is that tremendous and ever-increasing population. Our commerce with oriental nations has given them a larger purchasing power. On the other hand we have increased their demand, not only for their necessities, but for the things that the western civilization produces and they are becoming educated up to that point where their standard of living is gradually rising. And a very small rise in the standard of living in the oriental country, with its teeming millions, means : tremendous increase in commerce. It has been said, if we added 2 inches to the tail of a Chinaman's shirt, it would keep all of the spinning mills in America busy 24 hours a day-just that small addition.

We are sending a great deal of machinery to the Orient now. It is true we are probably doing what Europe did when they built up America—we are building a Frankenstein; but that will be a long time in the future. And it seems to me in order that that commerce may be developed we should have our own ships and those ships should carry our commerce and see to it that it is delivered and that no other nation is given possession of information that enables their commercial agents to compete with us in an unfair way. That has been one of our troubles in the handling of our foreign commerce.

Mr. WEARIN. Ana in all probability the oriental market is the most fertile field for the disposition of American products at the present time?

Mr. FORD. That is absolutely ture, and there are reasons for it: They do not owe us any money, and the balance of trade is not so badly out of line. Of course so long as the situation exists in Europe with our being creditors of Europe to the extent we are, it is going to be impossible to do much business there; unless, through the medium of our reciprocal treaties, we develop a certain amount of balanced trade. But I am perfectly frank to say that from the standpoint of sound economics it is impossible for us to develop very much more trade in Europe until this cloud of debt that hangs over and is always bearing down on the exchange possibilities is removed in some way other than by cancellation.

Now we have in the Orient this great opportunity with ships carrying things back and forth, and we could commence building those ships today on the Pacific coast without in any manner injuring any other part of the United States. In fact, such a program will have a tendency to stimulate business; because, if we get Government money out there to build ships, there will certainly come a time in the very near future when private money will go into it, and that will draw from the East and other parts of the country large quantities of steel and other materials that we have to have to fabricate those ships. And not only would it be an advantage to us, but it would be a tremendous advantage to them, because it would give them a new market for their products on the west coast.

I certainly thank the committee for its attention, Mr. Chairman, and I hope you will favorably consider this amendment and consider it in the light that it is absolutely in harmony with the philosophy of the bill.

Mr. LEHLBACH. When you establish those yards, you won't try to build any more concrete ships out there, will you?

Mr. FORD. Well, I do not believe we will go as far as that. (Laughter.)

Mr. LEHLBACH. You did during the war, you know.

Mr. FORD. I know; but that was one man's idea and every man who had an idea in those days had a hearing on it.

The Chairman. That was a day of emergency ideas. Mr. FORD. It was, and everybody was frightened to death. Now let us develop our shipbuilding, so that if an emergency arises we won't have to go into a panic about it.

STATEMENT OF HON. ALBERT E. CARTER, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF CALIFORNIA Mr. Carter. Mr. Chairman and gentlemen of the committee, as was suggested by your chairman a few moments ago, I believe the best trade ambassador that this Nation can send into the foreign ports of the world is a well-equipped, modern, American merchant marine. That is the way we are going to get the business, and we are not going to get foreign business by having two-thirds of our own goods carried in foreign bottoms and distributed about over the world.

The CHAIRMAN. I will say, Mr. Carter, our record here shows that Great Britain carries 61 percent; I think, Germany, 61 percent; France, 64 percent; Japan, 76 percent, while the United States has 35 percent.

Mr. CARTER. Well those figures tell the story. I believe this legislation is very timely, because I think we must modernize the American merchant marine, too; if we are going to compete with other modern ships, we cannot use those old vessels that burn twice as much oil and fuel as the modern vessel. Therefore, a rebuilding of the American merchant marine is necessary.

Now I am one of those from the Pacific coast who happens to have some shipyards within my district. We have not done much in the way of building out there in the past number of years. We have done some repair work. We did, in one particular yard, build a few ships for the Coast Guard; but the shipbuilding has been at a very low ebb. There has been some number of ships; I think approximately $150,000,000 has been spent in merchant marine construction under the present act; but that has been spent in yards on the Atlantic coast. And I have no particular quarrel with that, except we would like to get a share of it out there and we feel, in the interest of national defense, in the interest of building up a substantial merchant marine, that we must have a shipbuilding industry on the Pacific coast.

I am very much in sympathy with the suggestion of Mr. Welch. In fact, for a number of years, I introduced a similar bill—not exactly the same rate, but a similar bill—but it was never enacted into law, and so I am here to endorse the suggestion of Mr. Welch and trust this committee, in the interest of the country generally, in the interest of our merchant marine, in the interest of national safety, will incorporate it into the bill. I thank you very much. STATEMENT OF HON. JAMES W. MOTT, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF OREGON Mr. Mott. Mr. Chairman, I have a meeting which I have to attend. I just want to put the State of Oregon and particularly the First District, which I represent, on record as being in favor of Mr. Welch's suggestion. STATEMENT OF HON. MARION A. ZIONCHECK, A REPRESENTA

TIVE IN CONGRESS FROM THE STATE OF WASHINGTON Mr. ZIONCHECK. Mr. Chairman, I can say we are all back of Mr. Welch's proposal out in the State of Washington, and we could stand a little shipbuilding too.

The Chairman. You believe it would help to stabilize the industry and help your commerce?

Mr. ZIONCHECK. I do that.

STATEMENT OF HON. JOHN F. DOCKWEILER, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF CALIFORNIA

Mr. DOCKWEILER. Mr. Chairman, I want to put the Sixteenth Congressional District of California in the record here as favoring, first of all, this new milestone, which I consider a great advance in the method of handling our merchant marine from the Government standpoint. Of course I have always believed in a subsidy; I believe it should be called by its proper name because a rose by any other name smells as sweet to some people.

Now you do not need any argument sustaining your bill as prepared along the lines of our good President's address and, aside from the arguments that my other colleagues from the Pacific coast have given. Directing my remarks particularly to the Welch amendment which I have read, let me call your attention to this fact—that he asks in his amendment that there be a differential in favor of the Pacific coast builders and repairers of ships of three-quarters of 1 percent in either category of loans that would be made under the terms of the bill now before you. Three-quarters of 1 percent is a slight advantage to California, Oregon, and Washington. It does not measure the full advantage that should be given on the Pacific coast, but we are happy to have this advantage.

All through the history of this Nation, the Pacific coast market, manufacturer, and merchant has been penalized to exceed 1 percent as compared with eastern manufacturers, merchandisers, and the like. Interest rates in our banks always exceed by 1 to 1 percent, interest rates of your eastern banks. It is an economic recognition of the span of 3,000 miles that exists between the Pacific coast and the Atlantic coast, and across those 3,000 miles there are barriers still—those same barriers that the pioneers met with, to wit: The marshy lands that lie in the Mississippi Valley, crossing over them and advancing to the desert-like country with the thirst and heat that overtakes the traveler, and then crossing and climbing up the heights of the Rockies before you can dip down on the Pacific slope. Those same barriers exist today and will always exist as between the Pacific and the Atlantic coast just as much for the storekeeper today as the pioneer of 100 years ago, and our interest rates will always be a percent or a percent and a half more on real property, when the loan is made against real property, or commercial paper, as against your advantage in the East.

So I call your attention to this single item, that what you are doing is that you are recognizing, for the first time by legislation of Congress, the economic differential that we always have to overcome. not by virtue of this act actually giving us construction, but you are giving us just an opportunity to again enter the field of competition, which is a good doctrine and a wholesome and sound doctrine in anything that the Government undertakes. You are opening up our opportunity in that vast competitive field.

The philosophy of this measure is in entire consonance with Mr. Welch's amendment. The philosophy of the bill is taking the United States as a unit and looking externally to the other nations in the family of nations and saying "Well, now, if we have to do business with England and sell to them and carry our goods in our bottoms,

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