defense will properly be borne by the Government, as this bill provides. These vessels are to be built on plans which are to be submitted to the Navy, under contracts in which the Navy is going to participate. There is no commercial advantage that is going to accrue to the oil-tanker people for these vessels whatsoever, yet after providing in the bill for the submission of plans to the Navy for construction in accordance with contracts which they approve, the bill goes on to provide that the owner shall warrant for 16 years the speed of the vessels, and if the vessels fall down from their warranted speed, apparently the amount of the excess cost is to be returned to the Government by the owners. The oil-tanker owners believe this is unfair to them, and is unacceptable to them, to impose upon them a warranty of speed when it is of no commercial interest to them. The CHAIRMAN. I think I get the point you have in mind, Mr. Campbell. No favor is conferred upon the tanker company to have these tankers built in this way, yet the tankers we ask you to build in this way under plans approved by the Navy, then after you have accommodated us, if they do not keep up the speed we are going to charge you 62 percent; is that it? Mr. CAMPBELL. Exactly. The CHAIRMAN. I understand you, and I think that is a perfectly fair criticism. Mr. CAMPBELL. May I make one further suggestion while I am here? The CHAIRMAN. Very well. Mr. CAMPBELL. That suggestion on behalf of the association is that if you will take this committee print of March 3 of S. 3550 and restore to that bill the provisions which you have deleted by drawing lines through them, and take the criticisms we make of the portions appearing in italics and strike out those parts, I will say I think you will have a bill upon which you will have no difficulty in getting the shipping interests and your committee to agree. The CHAIRMAN. You mean to restore all of the deletions we have made? Mr. CAMPBELL. Yes; strike out of the bills the parts in italics which we have criticised in our memorandum and restore the parts you have stricken out by running a line through them, and you will get a bill upon which we will come to close agreement very certainly, and I want to say this, I shall be very glad if you want to consider that, to take the matter up and submit to you a written memorandum upon that type of a bill. The CHAIRMAN. Let me ask you one further question. I think Mr. Lee said that the particular objection to this bill lies in connection with sections 5 to 9. Mr. CAMPBELL. Yes; he said that, and I dislike to differ with the members of my own association, but Mr. Lee is speaking for Mr. Lee. He happens to represent a company which has built no new ships, and therefore he has not on his hands the problem of adjustment which other companies have. I do not think he is in a position to say that the other criticisms of sections than 5 to 9 are academic. The CHAIRMAN. Are you not asking us to practically restore this bill to the way in which I introduced it in the first place? say come close to an agreement upon it, and I will be glad to submit a memorandum from the association on that. There never was a day in American history when we needed a merchant marine like we do now, and all we have got to do is to read the papers for the last 48 hours to ascertain that fact. It is a pity if this committee in this Congress charged with this duty, and the shipowners, cannot sit around a table and get a bill which will give us a merchant marine. The CHAIRMAN. Let me give you the other side of the picture: Suppose Senator Clark and the others succeeded in defeating subsidy legislation, and suppose Congress accepts the report of the Appropriations Committee made yesterday, what is going to happen then to the merchant marine? Mr. CAMPBELL. America is going to have one of the worst catastrophes on her hands that she ever had. The CHAIRMAN. I agree with you, but, after all, there was another Roosevelt who said we are practical men. Senator CLARK. I do not know whether it is necessary to save exceptions to every point, but if so, I ask that they be saved at this time. I think it is absolutely necessary, if the Government is going to pay for the ships, that the Government should own and operate the ships. Mr. CAMPBELL. May I attempt to answer that question? You say if the Government is going to pay for the ships they should own the ships. The Government is going to pay for this building differential, it is true, and it is also going to lend them 75 percent, to these shipping interests, but they have got to give their promissory note, and pay the note, and they have got to put their money in the ships, so how can you say the Government is going to pay for them? Senator GUFFEY. It is 15 percent they put in to start out. The CHAIRMAN. Let us not discuss the question of Government ownership against private ownership. If there are any steamship men who desire to present briefs we will include them in the record, but for the time being we will go on with the hearing. Captain Delaney, we will hear you. STATEMENT OF JAMES J. DELANEY, PRESIDENT OF THE NATIONAL Mr. DELANEY. Mr. Chairman and gentlemen, I am president of the National Organization of Masters, Mates, and Pilots of America, and am also speaking for the National Marine Engineers Beneficiary Association. If you will concede to me the same concessions you have made to Mr. Furuseth, I will not consume so much of your time. The CHAIRMAN. That is, to put in your testimony of the last year in this record? Mr. DELANEY. Yes, Mr. Chairman; and with this in addition. 1 RES OF AMERICA; ALSO REPRESENTING AMERICAN MARINE ENGINEERS' BENEFICIAL ASSOCIATION MAY 5, 1935. Mr. DELANEY. The organizations which I represent are opposed to section 512 (a), which concerns the carrying of cadets for the purpose of serving an apprenticeship to become officers. We are opposed to it because we believe it to be against the best interest of our American merchant marine. We believe it to be un-American because it does not place every man on an equal footing; it gives them a handicap on a vast number of seamen who should have the desire, if they are to be any credit to our merchant marine. We believe that there should be no short cuts to promotion-only skill and ability obtained by experience. We also believe that this is a highly specialized industry and can only be learned properly by going from the bottom up. We are also afraid that it will tend to deprive our merchant marine from attracting some of our finest young American boys. We are opposed to anything that will weaken or destroy the incentive for our boys to enter it. They will enter it, we believe, if the incentive is created to attract them. Why shouldn't they? The work is healthful and attractive, gives them a decent wage and reasonable working conditions, and you will get the men; in other, words, make it attractive, and you will have the men; and we also believe that if the American people are to continue to donate millions of their money for our merchant marine, they will insist that it be made attractive and manned by our American boys. The CHAIRMAN. Is that system of cadets universal? I mean to say, are cadets now carried on all vessels? Mr. DELANEY. Not on all vessels. They are carried on some. The CHAIRMAN. Not on the majority of vessels? Mr. DELANEY. NO. The CHAIRMAN. Proceed. Mr. DELANEY. We are opposed to section 512 (b) because we are afraid that it might be a check on the natural development of officers in our merchant marine, and we believe that this would not only be a detriment to the men but that it would be a great detriment to our country, because we are not unmindful of the fact that during the war our merchant marine supplied hundreds of officers to our Navy; and that is as it should be from an economical standpoint, and we are wondering if this very valuable source is to be permitted to be destroyed, and we are afraid that it will be. If so, where will the Navy draw from in an emergency? This Merchant Marine Act is intended to strengthen and support our Navy in time of war. We fear that this section would tend to weaken it; in other words, have the reverse effect from what was intended. Instead of relieving unemployment, it would increase unemployment. We do not believe that it is the intention of this committee to do that. But it is only natural to assume that some of the shipowners might look with favor on having the Government pay one-half of these officer's wages. We believe in all sincerity that this section is by far more detrimental than it is beneficial, and we respectfully request that it be deleted from the bill. We are now and have been for many years in favor of a subsidy, but I sometimes wonder if we are not kidding ourselves, because the fact is, Mr. Chairman, that while I have listened to Mr. Haag of the Shipping Board and others testifying before the House Committee on Merchant Marine and Fisheries, stating that the subsidy was to pay the wage differential, and while I have heard the owners state the same thing at the Post Office investigation of the ocean-mail contracts, nevertheless, Mr. Chairman, the wages were higher and the working conditions better before the subsidies were granted. In that connection I am presenting a brief with facts and figures to sustain this statement. The history of it is that from the time the subsidies were granted until the strike broke out on the west coast, wages were reduced and working conditions made so deplorable that the men walked off the ships. We are surprised and disappointed to find that the bill does not contain any labor provisions for the licensed personnel; while it does not that the seamen and others shall only work 8 hours in 24, no mention is made of the licensed personnel. The CHAIRMAN. Has any amendment been offered to take care of the licensed personnel? Mr. DELANEY. Not as yet. The CHAIRMAN. Are you going to offer one? Mr. DELANEY. Yes. The CHAIRMAN. All right. Mr. DELANEY. We believe that they are entitled to the same consideration. At least, we felt sure that the Black investigation, the Post Office investigation, and others carried on by other departments, gave plenty of evidence to warrant the need of such labor provisions. The fact is, Mr. Chairman, that on the Atlantic coast today you cannot get a conference to negotiate an agreement for wages and working conditions unless you call a strike or threaten to do so. The proof of that is that but a year ago, after the seamen got tired trying to get a conference for that purpose without any success, they called a strike. The Government then stepped into the picture, bringing pressure to bear, brought both sides together and an agreement was made with the seamen's organization and because the licensed personnel were not involved in the strike, the shipowners refused to meet their representatives for the same purpose. And while I have consistently tried to meet the owners for that purpose, I have been unsuccessful. I say this, Mr. Chairman, without animosity, for, as far as I know, only the most cordial feelings exist between the steamship owners and myself. I am in hopes that the day is gone by when strikes have to be called to remedy such conditions. Strikes are not only an economic waste, but they are like wars everybody loses. I believe that the cause of our strikes is the lack of the instrumentality to prevent them. I believe that that has been pointed out very clearly in the railroad industry. Regardless of all the strikes taking place throughout our country, the railroad industry stands out as the great major industry devoid of strikes. The answer is that, I believe, is that the instrumentality is there to prevent it. The Railroad Labor Act is a sane and logical way to settle disputes and misunderstandings. With that thought in mind I am presenting a proposed labor amendment with the request that you give it the serious consideration I believe it to be worthy of, and the hope that it may be made a part of this bill, and with the request that it be included in the record. The CHAIRMAN. It will be included. (The proposed amendment and brief in support thereof, referred to and submitted by the witness, will be found at the end of the testimony of the witness.) The CHAIRMAN. There is one provision in this bill for conference. read it? Mr. DELANEY. Yes. The CHAIRMAN. Is there any virtue in that? Have you Mr. DELANEY. Well, I have not studied it enough to make a decision. The CHAIRMAN. Our thought was, when we gave it consideration, that there would be some advantage in having representatives of the Authority to sit in at these conferences; not to take part in decisions but to know what was going on. It has been testified by others that we ought not to do that, because the Authority will, in the last analysis, have to act on what the conference does. Mr. DELANEY. That seems very logical. The CHAIRMAN. We are very much obliged to you, and will give serious thought to your recommendations. Captain DULANEY. I also would like to have included as a part of my statement the following: SEC. 5. (1) There is hereby established a board to be known as the National Maritime Board of Adjustment, the members of which shall be selected within 30 days after approval of this act and it is hereby provided— (a) That the said adjustment board shall consist of eight members, four of whom shall be selected by the shipowners and four by such labor organizations of the employees, national in scope, as has been or may be organized. (b) The shipowners acting each through its board of directors or its receivers, trustee or trustees or through an officer or officers designated for that purpose by such board, trustee or trustees or receiver or receivers, shall prescribe the rules under which its representative shall be selected and shall select the representatives of the shipowners on the adjustment board. (c) The national labor organizations, as defined in paragraph (a) of this section, acting each through the chief executive or other medium designated by the organization or association thereof, shall prescribe the rules for the labor members of the adjustment board. (d) In case of a permanent or temporary vacancy on the adjustment board, the vacancy shall be filled by selection in the same manner as in the original selection. (e) If either the owners or the labor organizations of the employees fail to select and designate representatives to the adjustment board, as provided in paragraphs (b) and (c) of this section, respectively, within 60 days after the passage of this act, in case of any original appointment to office, of a member of the adjustment board, or in case of a vacancy in any such office within 30 days after such vacancy occurs, the Secretary of Labor shall thereupon directly make the appointment and shall select an individual associated in interest with the owners or the group of labor organizations of employees, whichever, he is to represent. (f) In the event a dispute arises as to the right of any national labor organization to participate as per paragraph (c) of this section in the selection any designation of the labor members of the adjustment board, the Secretary of Labor shall investigate the claim of such labor organization to participate, and if such claim in the judgment of the Secretary of Labor has merit, the Secretary shall request those national labor organizations duly qualified as per paragraph (c) of this section to participate in the selection and designation of the labor members of the adjustment board to select a representative. Such representative, together with a representative likewise designated by the claimant, and a third or neutral party, designated by the Secretary of Labor, constituting a board of three, shall within 30 days after the appointment of the neutral member, investigate the claims of the labor organization desiring such participation and decide whether or not it was organized in accordance with section 2, hereof, and is otherwise properly qualified to participate in the selection of the labor members of the adjustment board, and the finding of such board of three shall be final and binding. (g) Each member of the adjustment board shall be compensated by the party or parties he is to represent. Each third or neutral party selected under the provisions of (f) of this section shall receive from the Under Secretary of Commerce for Maritime Affairs such compensation as the Secretary of Labor may fix, together with his necessary traveling expenses and expenses actually incurred for subsistence, or per diem allowance in lieu thereof, subject to the provisions of law applicable thereto, while serving as such third or neutral party. The Under Secretary of Commerce for Maritime Affairs is hereby authorized and directed to make such payments. (h) The disputes between an employee or group of employees and a shipowner or shipowners, growing out of grievances or out of the interpretation of application of agreements concerning rates of pay, rules, or working conditions shall be handled in the usual manner up to and including the chief operating officer of the owner designated to handle such disputes; but, failing to reach an adjustment in this manner, the disputes may be referred by petition of the parties or by either party to the adjustment board with a full statement of the facts and all supporting data bearing upon the disputes. (i) Parties may be heard either in person, by counsel, or by other representatives, as they may respectively elect, and the adjustment board shall give due notice of all hearings to the employee or employees and the owner or owners involved in any dispute submitted to them. (j) The adjustment board shall have authority to empower two or more of its members to conduct hearings and make findings upon disputes, when properly submitted, at any place designated by the board; provided, however, that final awards as to any dispute must be made by the entire board. (k) Upon failure of the adjustment board to agree upon an award because of a deadlock or inability to secure a majority vote of the members, as provided in paragraph (n) of this section, then said board shall forthwith agree upon and select a neutral person, to be known as a referee; to sit with the board as a member thereof and make an award. Should the board fail to agree upon and select a referee within 10 days of the date of the deadlock or inability to secure a majority vote, then the board, or any member thereof, or the parties or either party to the dispute, may certify that fact to the Secretary of Labor, which Secretary of Labor, within 10 days from the date of receiving such certificate, select and name the referee to sit with the board as a member thereof and make an award. The Secretary of Labor shall be bound by the same provisions in the appointment of these neutral referees as are provided |