are getting better than a fair share of the trathe, because sern and they are as fine a ship as there is afloat today 1. kner ty nie. Now to what do you attribute their unus ial sjeress, they do not mesure up in speed and tonnage to these Pranardy because the rate on the cabin liner is some. tap on the first-class passenger liner. New fo is come to the cargo ships Have we any stess that are comparable to these ships of foreign nations Now is at your ti cory, since this is a hearing on a if we would develop these three principles, we might ertant ma: ne such as you call to our attention, because ne... ghtened my seif, because England has 21 mill, on tons We are -posed to have, you said, over 13 million tons i. Over hon tons, yes, of 100 gross tons and upward gitcllanco is types. eview And when it comes down to the elimination of all ops and mscellaneous conglomeration and of all the ts, all we have to compete with, as I understand you, is n. on tons of modern ships" Just a little under 3 million; but with that 3 million, tolupetit ve power is concerned, it is the last among the ja, nations NOVICH In other words, the American people ought to far as our cargo and passenger ships are concerned, that we t of all the civilized nations of the world in standing" A We are the last among the principal maritime nations es to cargo ships and to the superliners. MANSFIELD And age” ovter. And stiil, since you are a very brilliant authority, sgne with me A、o I do not agree I am a brilliant authority. NICH Well, you are; there is no doubt about it From sea of the tonnage of the world at that time, England bad ** Dom tons we had about 5,500,000, and the rest of the 7.1 put together or iv had about 5,500,000 AAS. That is about right. OVICH Do not you think that a proper subsidy by the ent with proper regulation, with a proper differential on etion of stups in America and Europe, with a proper er to ta je care of the operating expenses and American rates, a corinassion to look after that and to regulate it, we can p in the next 7 to 10 years a merchant marine that would to that of any nation of the world? A We can match the competition of any nation in the flat basis OVICH Let us take up, therefore, the principles of a subIf we subsidize the shipyards that are constructing ships for erican operators and used a differential based on the cost of production in America, and gave a subsidy to the shipyards for that differential, that would look after the difference of cost of construction; is that right? Mr. HAAG. Well, the shipyard gets that today; it is reflected in the American cost. The shipyard gets that differential today. Mr. SIROVICH. Then the American operator is put at a disadvantage when he comes to purchase the ship, when you compare American standards of living and of workmanship in comparison to foreign countries. Mr. HAAG. Well the mail pay that is given takes care of the- Mr. IGOE. Now, let him finish. The CHAIRMAN. Yes. Mr. HAAG. The mail pay today does just the very thing you mention; it wipes out that differential. Mr. IGOE. They have been getting plenty of money; it is just a question of what they do with that money. Mr. HAAG. In other words, the mail pay equalizes the American and foreign costs both as to capital and operating costs. Mr. SIROVICH. What I want to bring out is the fact that in the message of the President to the House and the message sent to this committee, the President is opposed to the mail subsidy; he prefers to give a direct subsidy and to provide that this subsidy will operate under given conditions and the given conditions are, first, that this differential between European costs and our own costs of construction will be equalized so that the American operator has a ship which is on a parity with the foreign operator; is that right? Mr. HAAG. That is correct. Mr. SIROVICH. The second thing is where you have a differential would be in the operation of the ship; is that right? Mr. HAAG. That is correct. Mr. SIROVICH. Now, do you think that we could equalize that differential in operation by a subsidy which could be diminished. year in and year out, if we had a commission or a group of representatives of the Government that would be either a board or in an advisory capacity to the shipping interest, that would hold down the great salaries that officials are getting and see that the ship is run on a basis of economy, plus the principle of seeing there is a minimum rate for traffic all over our country? Mr. HAAG. Well, the shipping business is a very hazardous one. There are years of depression. It is very difficult to forecast what the conditions will be, say, in the next 10 years. The nominal life of a ship is 20 years and when a contract is made for building the ship you expect at least to get the use of 20 years out of it. In any contract that is made, consideration should be given as to what the conditions will be over the life of this ship on which the Government helps to equalize the cost differential between American and foreign countries. Now, supposing in the next 3 years business picked up and profits were made. It is a very difficult thing and I am not qualified to say what a reasonable profit is. You have to anticipate lean years. Not knowing how many lean years there will be out of the 20, it may not be fair to the company to limit their profits because they may not be able to set up a proper reserve fund to take care of the lean years. eve that all companies will cooperate with this Government M. He. Well I just have the feeling that the industry is willing rate, if the Government, on the one hand, assists to enable to con pete successfully with foreign ships. That has not been the history of the industry, has it? has We have had a very poor history of the shipping Along that very line, isn't it? Mr HAAG Take the 50 years prior to the World War, our shipping reign trade was on the decline; very few paid any attention 'erested in American shipping. Then the world war Before we got into the war is the one time that the attenentire country was called to the importance of the shipping because when the commerce reached the seaboard there ships to carry it beyond. 1r Bat since the war, they have been getting plenty of * the Government. My Has Now, since the World War-- excepting the period up ↑ March 1920, the water-borne volume of world trade dest continually. At no time has there been such a dein the world shipping industry as during the post-war period. this period that the United States Government pioneered tes essential to the commerce of the United States. ex. The Government was not conducting the Dollar Line, i'. It was conducting an around-the-world service. 1. And at the same time this man Dollar was drawing down for hired thousand dollars a year. • Ioos You do not think he was helping the Government make out of the shipping industry, do you? H、o I am not in a position to pass judgment on that. loog I understand you are quite familiar with all the facts neeted with the shipping industry. A HAAG No: I do not pretend to be familiar with all the facts eted with the shipping industry. I am familiar with some facts. Mr og Are you familiar with that fact? HAAG NO. Vr loog Who is familiar with it? M: HAAG I should think those handling the finances on the Board. Mr Is it not true, Mr. Witness, that an investigation was selurted somewhere here in Washington involving these different es that had to do with 30, 35, or 40 different routes, and a compete and a full hearing was had; is that true? Mr HAAG. Yes, to my knowledge that is true. Moot Now who is the man that has that testimony? T: CHAIRMAN. That testimony is public, is it not? M: I understand it is not public. The Chairman. Is not that the Black testimony? Mr. IGOE. No; it is not the Black testimony. You had a witness here, Mr. Crowley The CHAIRMAN. Mr. Crowley was in this interdepartmental investigation. Mr. IGOE. Yes, sir; and he is the man who has the testimony, and that is the testimony I think this committee ought to have. Mr. SIROVICH. It is in this record here [indicating]. Mr. IGOE. No; it is not in there. The CHAIRMAN. It is in the individual reports of each one of those lines. Mr. IGOE. It is in the individual reports of each one of those lines and I understood this witness suggested a subsidy of $35,000,000 a year for about 4 years would build up a pretty good fleet of cargo vessels. Mr. HAAG. I said it would build up a splendid fleet of cargo vessels costing about a million dollars each in American shipyards. Mr. IGOE. That is even better than I said; yet the testimony in the report. here indicates that the shipping industry of the country has been receiving a little more than $30,000,000 a year for several years past and it is estimated the cost of carrying the mail which they did carry was only $3,000,000, so that they have had a subsidy of about $27,000,000 a year. Now what have they done with it? Mr. HAAG. They have had a subsidy since they started which averaged 20 million a year, roughly. Mr. IGOE. That is not what this report indicates. Mr. HAAG. For 6 years they have had a total of $120,000,000, which is about $20,000,000 a year. The CHAIRMAN. As I tried to point out yesterday, there were several other considerations passing to the Government besides the carrying of the mail for which it was paying. Mr. CULKIN. Do all of the payments amount to $31,000,000 including the mail and everything? The CHAIRMAN. Not for the whole period. Mr. CULKIN. For 1 year, I mean. The CHAIRMAN. For last year? Mr. HAAG. It was $29,650,000 during the fiscal year 1934. Mr. CULKIN. What was the total subsidy paid by the Government for mail and all other contributions? The CHAIRMAN. The report shows the total subsidy, but it does not give the break-down. Mr. CULKIN. What I am getting at is the total amount paid towards the construction or in any way towards the encouragement of the American merchant marine. What was the total amount paid last year? Mr. HAAG. $29,650,000. Mr. CULKIN. During the life of this subsidy, the total was what? Mr. HAAG. One hundred and twenty million for 6 years. Mr. SIROVICH. To what do you attribute the phenominal growth and development of the British merchant marine? Is it due to a subsidy, or to what? Mr. HAAG. The British merchant marine, the policy there has been to foster the shipping lines of Great Britain. When steam came in, just before the middle of the last century Mr. SIROVICH. You mean the Cunards? Yes, the Cunard Line was probably one of the first; the V. was another one. H. They received subsidies? I might say this, that about 90 years ago the mail pay -u, of subsidy granted by the British Government was nearly as that in principle, under the act of 1928. A: The English subsidy? HAAG Yes The contract entered into, I think, with the Ma.. Neam Packet Co. shows they paid on the mileage basis pose of expanding the trade of Great Britain; also for Late ships for national defense mounted with the heaviest de at the time, and the contract reads very closely in to that of our 1928 act insofar as aiding their shipping in er trades are concerned. until this last year have they done much in aiding what ... their cargo ships, but in the last few months I think they -2 those ships. .A.N. Dos Great Britain allow those fabulous salaries to d of cials that our American merchant-marine supervisors it I am not acquainted with the salaries of the British ott. .als, but I have heard it said that the salaries are large. LAN. Is there any limitation to their earning capacity? Ex、. Their earning capacity that is, in salaries? KIN In laries and dividends. vo. That I do not know. CAN Shat they can put away enough to amortize their -- to build and replace their ships with new ones for the et slaps they have? I am not a quainted with that. A. Yogater it acquainted as to the formuin of foreign there, la ment of obsolete shups? E、、s To lae best of my knowledge, insofar as it applies to sa pang n...ion in the world, I think for many years pare hve replaced about 1,000,000 tenis a year. And whst are the principies under which it retires That I a Lot a quainted with. MAN AS & matter of fact, Mr. Hang, Great Britain for 169 down through 184 had practically a monopoly to all of the trace of the world dealing with Great Britain, 1、4. Well a great part of the trade of the world. HALLMAN And he has her associations. 1st is correct. CA HAIRMAN, Which enabled her to build up her trade. |