every line of railway, the building of every highway means drawing upon America for materials.

I live in a seaport town called San Pedro. If you walk along the wharves of San Pedro and watch the ships going to the Orient, one of the things you will take notice of is the kerosene 5-gallon cans piled upon the wharves by the thousands. And where do they go? They go to China; they go to the interior where the people use lamps-the lamps of our forefathers as they are still in the kerosene age. Of course, the cities are now being electrified and that stage is passing out. But the possibilities of China for foreign trade are the greatest, I believe, on the face of the globe and it seems to me the American people are not awake to the possibilities that we have there.

I just want to leave this thought, because the chairman suggested to me what I thought was a very splendid idea.

The CHAIRMAN. Thank you very much.

Are there any others present who are interested in this particular problem, who desire to be heard? If not, we will hear from Mr. Newton.

Mr. WELCH. Mr. Chairman, I desire to thank you and the committee for the consideration you have given to the Pacific coast delegation in presenting a matter that is very important to them.

The CHAIRMAN. We are under a debt of gratitude to you and the members who attended, who have given us the valuable information and their time.

STATEMENT OF CLEVELAND A. NEWTON, ON BEHALF OF THE MISSISSIPPI VALLEY ASSOCIATION

The CHAIRMAN. We pass now from the Pacific coast to the Mississippi Valley.

Mr. NEWTON. Yes. Mr. Chairman and gentlemen of the committee, I appeared before the bill was introduced, in the general hearings. We are very much interested, I might say in sympathy, with the amendment of Mr. Welch. We in the Midwest have a feeling that in building up a great national merchant marine we have got to have the cooperation, sentiment and support of the whole country, and we think there is no way of insuring that support more certainly than by a general diffusion of the benefits of the building and operating of the merchant marine. We think it is bad policy to have all the ships built in one section, or to have all the shipping lines owned in one section.

The Mississippi Valley Association, for a number of years now, has been trying to promote and encourage the merchant marine sentiment in the Middle West. We have made a great deal of progress, but we have not made enough progress. The best evidence that our efforts have not been as successful as we would like is the fact that it is seldom that a Member of Congress from the great interior finds enough interest in his district in a merchant marine to encourage him to try to get a place on this committee. It is not surprising that the committee should be made up largely of Members who come from seaboard cities; because, thus far, that is where the primary interest is. And if we can get sufficient interest in the Middle West to have the people feel, as they should feel, about the importance of a national merchant

marine, we will have more Members of Congress trying to get places with you on this committee.

The CHAIRMAN. We have a valuable Member present from Indiana. Mr. NEWTON. I know we have, and we are very happy that one Member from the Middle West had enough foresight to desire a place on this committee. I remember what our good old friend, Jim Mann, said at one time when they raised the question when I wanted to get on the Rivers and Harbors Committee, and somebody said "Well, he is primarily interested in rivers and harbors." He said "Well, maybe it is right that a man interested in rivers and harbors should not be on the Rivers and Harbors Committee, and maybe it is sound that a man who has a shipbuilding industry in his district should not be on the committee concerned about that, and so on down the line; but" he said "if you undertake to make the American Congress up of people who are not interested in the subject in which they get committee assignments, you won't make much progress in Congress. And I think that is perfectly sound.

Now we cannot ask for shipyards; we have no place to build shipyards. We could not float the ships out if they were built. We feel, however, that the same opportunity which applies to the west coast would apply to the Gulf coast, where shipyards exist. We think it is a fundamental principle. But Congress has done some things which have helped us to promote that midwestern sentiment, and an act of Congress which promoted the Government-aid sentiment in the Middle West was that provision in the Merchant Marine Act of 1920 which provided that—

preference, in the sale or assignment of vessels for operation on steamship lines, shall be given to persons who are citizens of the United States and who have the support, financial or otherwise, of the domestic communities primarily interested in such lines.

That aroused interest in the Middle West.

As a result of that provision, there was a group out through the valley that organized and put their money into a ship line from New Orleans to South America. There were investments in that line as far north as Chicago and the same in St. Louis. They began to watch this ship line activity; they began to see the possibilities and the operators of that line undertook to arouse the interest of the shippers of the Middle West and to show them the possibilities for markets in South America which the line interested in that section was trying to promote, and the shippers began to get interested because they felt they had an American-flag line owned in their section which would be interested in promoting the sale of their products in South American markets. And it has had a very wholesome effect.

We believe that in that provision Congress established a wise precedent. Our people feel it is bad public policy for the ocean line operating out of one section to be owned by persons primarily interested in the competing section. An ocean line operating from one section will be interested in promoting commerce and industry in that section and from the maintenance of that policy a wholesome competition will result which will produce a superior service for the whole country.

The policy established by Congress in section 7 of the Merchant Marine Act of 1920, for the disposal of Government ships, has done

much to promote marine sentiment in the Middle West and nothing could do more to create a willingness on the part of the interior to share the burden of Government aid essential to a merchant marine than an extension of that policy to the disposal of Government aid to merchant lines. If you would have the interior enthuse about Government aid for the merchant marine, then you should make American flag ships available for the use of commerce, industry, and agriculture in the interior.

We believe public interest will be best served if this act requires the Maritime Authority, in extending Government aid as provided by the act, to recognize the relative needs of commerce in the various sections of the country and to give aid to merchant lines which have the support, financial and otherwise, of the domestic communities primarily interested in such lines.

We believe that a Maritime Authority composed of five members, as provided in the bill, to have charge of maritime matters is a wise provision and essential to the adequate development, maintenance, and regulation of an American merchant marine. We believe, however, that public interest in the merchant marine would be promoted if the act required that the membership of the Maritime Authority be fairly distributed to the various regions of the country. We believe it would have a wholesome effect in arousing public interest if it be required that 1 member be selected from the Pacific Coast States, 1 from the Gulf States, 1 from the Atlantic Coast States, 1 from the States adjacent to the Great Lakes, and 1 member fairly representative of the great interior of the country.

The CHAIRMAN. There was some thought given to that, but it was suggested that they regarded themselves as advocates of the particular section. It was our hope that we would get five men sufficiently broad minded to take a national view and to consider the development of the entire country. I am in thorough accord that there should be a development of all ports and of all sections of the country. Mr. LEHLBACH. Furthermore, Mr. Newton, in the past it has been found that sectional restrictions seemed to militate against the selection of the best men. An outstanding man whom everybody endorsed, including the section that he did not happen to live in, his choice was out of the question simply because of these hampering and embarrassing regional restrictions. And if they want to be averted, why they can be. We have seen two members of the Shipping Board from the State of New York, one representing the Great Lakes and one representing the Atlantic seaboard. So, in the first place, you can beat the game as far as having real regional representation and, in the second place, the restrictions sometimes so hamper the appointing authority that he may not make the best selection which at the time would be of great benefit and advantage. As a general policy, in making appointments, not only to a specific Board like this, but generally, geographic considerations are taken into consideration by all executives in making all appointments and to write it in a bill serves no useful purpose, but it does hamper and restrict and may at times work to the detriment of the best interests of the activity to be served by the Board, or the Authority.

Mr. NEWTON. Would it be possible to put in a declaration of policy indicating a desire to see that the Board is thoroughly representative?

Now in bringing up a bill we have found by past experience that naturally people who are primarily interested seek places on your committee and seek places on the Board, and if you get a Maritime Authority which appears to be representative of only the big shipping interests, for instance, of the Atlantic and North Atlantic States, you make it possible for certain men who oppose the merchant marine to go out through the great interior and make it very difficult for us by having them go out there and charge your Board is made up of those who are interested only in one section. Of course, we feel the whole country is interested in the merchant marine and we have to have the support of the whole country if we are going to build it up. And it is because of the fact we have not had the support of the whole country that we are where we are now in maritime matters.

I agree with Congressman Lehlbach that a too rigid regulation might be harmful; but it does seem to me there ought to be some declaration of policy so that if this bill comes up the country and particularly the interior could feel the committee is trying to see that there is a diffusion of the benefits in proportion to the needs of commerce throughout the interior of the country.

I am very glad to have had the opportunity to add this statement to what has been stated in the general hearings.

(The committee thereupon adjourned until Monday, May 6, 1935, at 10 a. m.)

TO DEVELOP AN AMERICAN MERCHANT MARINE

PART II. MERCHANT MARINE ACT, 1935

MONDAY, MAY 6, 1935

HOUSE OF REPRESENTATIVES,

COMMITTEE ON THE MERCHANT MARINE AND FISHERIES,

Washington, D. C. The committee met at 10 a. m., Hon. Schuyler O. Bland (chairman) presiding.

The CHAIRMAN. I have promised to hear first Mr. McVay. I will say, Mr. McVay, that after giving your statement it may be supplemented by a brief, and I hope you will do that as far as possible, because we are under terrific pressure this morning.

STATEMENT OF J. H. McVAY, LINDBERGH APARTMENTS, WASHINGTON, D. C.

Mr. McVAY. Mr. Chairman, I am speaking in favor of H. R. 7521. The CHAIRMAN. There have been several committee prints, as you know. The last committee print is April 30.

Mr. McVAY. My remarks would be primarily along the line of the personnel rather than discussing the bill in its entirety.

On January 4 the President of the United States addressed the Members of Congress. In the President's message he stated, quoting in part:

A definite program for putting people to work, of which I shall speak in a moment, is a component part of this greater program of the security of livelihood through a better use of our natural resources.

On March 4, 1935, the President of the United States sent a message to the Members of Congress with his views and two reports on the subject of an adequate merchant marine. I refer to page 21 of the report submitted by the interdepartmental committee on shipping policy to recommendation no. 2:

That vessels of this merchant marine be built in the United States, be operated under the American flag, and be manned by American officers and men. Further in this recommendation we find, on page 24, recommendation no. 12:

That with the exception of the stewards' department, the licensed and unlicensed ship personnel be 100 percent American, either native born or naturalized, unless ruled otherwise by the Secretary of Commerce.