Evening Star Newspaper, April 27, 1924, Page 41

EDITORIAL SECTION The Sundiay Stae WASHINGTON, D. C, EDlTORlAL PAGE NATIONAL PROBLEMS SPECIAL ARTICLES Part 2—12 Pages SUNDAY MORNING, APRIL 27, 1924. FALSE HOPE TO FARMERS IN PRICE-FIXING SCHEME Leading Agricultural Authorities Show Fallacies of Relief Promised in McNary-Haugen Bill. BY SHELDON S. DETERMINED effort made on Capitol weele to get the Haugen bill before the House is to be Hill of Representatives for debate and an) early vot Its proponents claim, with every air of confident assurance. that if the measure is permitted to come to its passage is certain Tt already is before the Senate with i favorable report from the commit- o on agriculture. It is proposed to press for favorable action in the Benate itself as soon as the revenue bill is out of the war. It is difficult to believe that the American Congress is in a mood to enact this astounding measure into 1w, but. difficult as belief may be, Congress appears to be in that identical a vote Political Vengeance Threatened. Why tch 4 ive been \nierican are members of Congress in mood”? Primarily because they made to helieve that the farmers imoring for slation oth political par- all the committe legislati 1 industry Huugen 1 backing o ready to th out are ¢ and practically re mbers t reliet and the determined to go to any punish any man who op- r program. They say so evasion or equivocation. It is easier for members of Congress lection to comply with sist their demands. For of the approa hing elec. e much iifference A Hauger, scheme insound, workable or whether it will do the or good. The votes will counted long beforo the ould be put into operation harm or benetits determined, are the deter- men political rmer harm ‘What the Bill Proposes. Briefly, the McNary-Haugen bill Jroposes to make the growing of wheat and other farm crops profita- ble by a scheme of government price fxing. On its face it looks plausible. Jt seemingly would benefit agricul- tural producers at the expense of the consumers of agricultural products. But a study of the scheme leads In- ovitably to the conclusion that, even £ it could be made to work, it would henedit relatively only & few farmers for a season or two, and that in the eng the farmers as a whole would be the greatest sufferers because of it. The scheme of the McNary-Haugen bill is so complicated that it is diffi- cult tv explain it clearly except at zreat length. A bald outline of its provisions is as follows: That thero shall be set up a fed- eral asricultural export commission and a federal agricultural export cor- poration, the latter with a capital stock of $200,000,000, to be provided from the United States Treasury. The purpose ef the act is to main- tain farm products at the same level of prices compared with the prices of all other commodities that they averaged during the ten years prior to the war. To Dump Surplus Abroad. The export commission is to deter- mine from month to month what this “fair” ratio price should, be. When a given product falls 10 per cent be low the “fair” price an “emergenc: is to be declared and the export cor- poration is to go into the market and buy all that is offered at the “fair’ price. Whatever it buys and cannot sell at home without a loss it will sell abroad at whatever it will fetch. Export losses and operating costs would be apportioned among the pro- ducers of an “emergency” crop by an ingenious scheme of making every purchase of that commodity, whether by the government corporation or a private buyer, payable partly in cash and partly in ‘“scrip” at a previously determined ratio. The scrip would be redeemable for whatever percent- ago of its face value it might be worth out of any funds left in the hands of the corporation after that particular “emergency” was over. Tariff rates would be readjusted monthly or as often as might be nec- essury to prevent imported farm prod- ucts from selling below the price de- creed by the government to be fair, Making Water Run Uphill Clarence Ousley, former assistant secretary of agriculture, says of the il “As a piece of economics the scheme is a futile effort to make water run upnill. If it should succeeed for the ume being in holding the price of farm products to a satisfactory level it would Induce greater production. The longer it succeeded the greater would be the ultimate disaster. The farmer who assents to any process of government control of prices be- trays himself into the hands of his trade enemies. There are more con- sumers than producers of wheat or any other commodity. In popular zovernment any public agency or ad- ninistration sooner or later comes to reflect the will of the majority. Hence public control of prices is majority control, and the majority will cause the prices to be fixed low or will cause the agency of control to cease operation.” There is abundant food here for agricultural reflection. - Are those who advocate that no farm product prices should be permitted to fall below the pre-war level prepared to concede that no farm product prices <hould be permitted to soar above that level? If they are, then cotton and tobacco and numerous other products will have to be brought down at the same time that wheat ind beef are brought up. If they are not prepared to make thie con- ’ this | MeNary- | the | for | by some of the foremost agricultural | expect to get any | ized consumers, particularly the labor cession, how long do they imagine the great consuming public would permit thelr price-fixing scheme to operate? Faveritism, Not Equity. And are they prepared to consent to government intervention to keep the wages of labor and the prices of manufactured articles up to a pre- war relationship level? If they are not, it is favoritism and not equity |’ which they ask. | Suppose that in the very first year | of the operation of the MecNary- | Haugen plan there should come a | world war or droughts in other wheat-producing countries and the | world price of wheat should sear 'way above the pre-war ratio price Are the proponents of the scheme willing the government should inter- vene to keep the price of wheat to the American consumer down to the pre-war ratio price? If they are,! they will not tind a baker's dozen | among the millions of American farmers who will support their! project. 1f they are not, they cannot | considerable num- ber of consumers to support it. The MeNary-Haugen bill is opposed | economists of the country—men who have studied the proposal solely from the standpoint of whether it would| benefit agriculture and who have| come to the conclusion that it is un- workable and unsound. Yet these men, nagionally known for their lead- | ership in agricultural. progress, were | not asked to appear before the agri- cultural committees of either the Sen- ate or House when the bill was under consideration. List an Imposing One. i The list of such authorities who have spoken and written against the | bill is an imposing one. They oppose | it, first, because they do not believe | it will accomplish what is promised | for it, and, second, becauso if it did| tulfill its promises the public reac- tion would be such that the farmer eventually and inevitably would be made to suffer a great deal more than he possibly could bemefit. For example, the National Council of Farmers' Co-operative Marketing As- sociations, meeting in Washington | last February, adopted resolutiops | of which the following is a para-| graph: | “That we are opposed to all forms | of price fixing by government, first, because it would be a perversion bf government authority and would ulti- mately bring ruin to farmers and endanger the government, and, sec- ond, because if the principle of gov- ernment control of prices of farm products should be established, pro- ducers of agricultural products be- ing, in the case of each commodity, a minority of the total population, would be compeiled to accept prices fixed by a consumers’ majority.” Other Nations Weuld Retaliate. W. I Drummond, chairman of the International Farm Congress of America, argues that not only is the proposal for government dumping abroad of farm surpluses immoral in itself, but that it would bring re- taliation which probably would close those markets entirely to American farm products. Then he puts his finger on a spot which seems entirely to have escaped the attention of McNary-Haugen bill enthusiasts. “In the case of nations, if any,” he says, “that would permit us to dump oeur surpluses, we would be supplying their working people with an abun- dance of cheap food, produced by our farmers at a loss, thereby contribut- ing still further to the low produce tion costs of competing countries, which already are such a factor in our difficulties.” And he adds this thought-compelling observation: ., “It is useless to consider this yf¥sure as a temporary one. The existence of an emergency is given as the sole reason for it, and there is nearly always an emergency in the case of one or ‘more of the commodities.” Dr. Alonzo E. Taylor, head of the food research institute of Stanford University and one of the world's foremost agricultural economists, has made an elaborate analysis of the McNary-Haugen scheme, and has come to this conclusion: “A study of the present relations between family income and the cost of living in the different groups of our population makes it clear that two reactions would be provoked— unorganized consumers (the salaried group, civil servants, rentiers) would readjust their expenditures to avoid inroads on the family income; orsan- unions, would react with demands for wage advances. If such demands were to be granted, the inereased labor cost would promptly reappear in the prices of finished goods, which would again throw the farm prices for basic .agricultural .commodities out of line. We would thus have in- augurated the same vicious circle of pyramiding of which we have had 8o many illustrations in Europe since the war." Pyramiding Means Disaster. It is recognized by farmers, of course, that they cannot prosper un- less the country as a whole is pros- perous; yet the promise held out by the McNary-Haugen bill, if it prom- ises anything at all, is farm pros- perity at the expense of general pros- perity. It is proposed to bring the price of the enumerated products which may be below the ‘all-commodity index up to that level. If this is done with- out at the same time reducing to that level the prices of all commodities that are above it, it will at once pyr: mid_prices. _The _all-commodity _in- (Continued on Third Page.) Immediate European War Unlikely, But Armed Peace May Prevail BY FRANK H. SIMOND: T the close of ten weeks in Europe there {s one American question that remains to be answered. When I left ‘Washington the singlé interrogation which seemed to lodge In most minds was— “Is Europe marching directly and deliber- ately toward another war?” On the whole, like all questions as broad and general, it is hardly possible to answer it by a single afirmation or a simple denfal. 1t is true, beyond question, that Europe, speaking broadly, is more anxious for peace than at any moment since the close of the world struggle. But it is also true that every person whom I have seen coming out of Ger- many, together with most of the people whom 1 have encountered who live in countries bor- dering on Germany, is frankly apprehensive and unmistakably fearful. Not since 1914, perhaps. has Germany seemed in such an ob- scure and menacing mood. As for France: Is France militaristic, im- perialistic? That again is a familiar Ameri- can question. As to this, I can only say that during many weeks in Paris, in which I met men of every rank and station in life—sol- diers, statesmen, simple citizens—1 never heard a single word spoken which suggested anything beyond the profoundest desire for peace, coupled with a moving sadness grow- ing out of the feeling that, after all, peace was not to be had. Franee Desires Security. Prance, as 1 saw her in her present mood, had only one consuming passion—the desirc for security, the desire for some method insuring against the return of the invader and the repetition of the destruction which she has so valiantly striven to repalr in the past five years. But how is the security to be attained? There, I think, is the real trag- edy of the situation, so far as the French people are concerned. Back of the question of security lies that of reparations, but it s a tremendous distance behind. The occupation of the Ruhr was, os- tensibly, a step toward reparations; the mass of the French people—and I think Poincare and his advisers, who were responsible for it —believed that it would be a short and cer- tain way to.bring about payment. In this they were mistaken, as perhaps they were bound to be mistaken, but if it did not pro- duce reparations payments-—and it has not yet—it did offer France the single conceivable physical guarantee against a speedy attack by a Germany economically intact. The Frenchman believes that Germany will attack him if he is weak; that weakness would inevitably Invite, even insure, atta He ments that kindness and even generosity to the German would have brought about an entirely new German mentality, with a cer- tain sad denial. He is not even angry, as he used to be when I was last in France, at these arguments. He simply points to the lestimony of the American members of the expert commission as abiding proof that he was right when he charged the German with willful evasion and actual capacity to pay; to the new German expressions of passion to prove he was equally right as to German purpose. Dilemma Now Faced. Always one comes down to this dilemma: To make Germany pay you must use force, but to use force is perhaps to inflame still further the German resentment. By contrast, to consent to let Germany escape without payment is to consent to the ruin of France, the fiscal ruin. France, struggling under the burden of the costs of reconstructing her ruins, would confront a Germany unburdened, superior in wealth, In resources, in numbers. Yet, in France, in quarters where one would least expect it, there is the surprising belief that the solution, the hope of solution—such hope as there is—lies in some sort of ar- rangement directly with the Germans, a busi- ness arrangement, made with the conviction that with the passage of time habit and mu- tual interest would cement the combination and war passions and political rivalries would give way to solid material advantages on both sides of the frontier. Speaking specifically, it is impossible to make any real estimate of European possi- bilities until two elections are over—the Ger- man, on May 4, the French, on May 11. Be- vond much doubt, the German elections will %o very far to the right; that is, in the di- rcction of the old gang. But what will be effect of this movement upon the French ctions. Normally, France would go in the opposite direction; that is, toward more mod- erate men and more moderate ideas. But practically, this would not necessarily mean that Poincare would o, but that he would surround himself with more liberal associates, as, in fact, he did in the recent cabinet change, for, fundamentally, he belongs at the left. But if the Germans go wildly and violently toward reaction, what will the French elector do the next week? Will he still follow the pathway in which he has entered, or will he retrace his steps and go back to that old situation: that is, will he send back to the Chamber of Deputies all or nearly all of the nationalistic group, which has so far dominated since the war? And, with Germany going also to extremes, may not the two ex- tremes in the two countries come into vio- jent collision? There is the problem. For myselt, judging from what information I have been able to collect—and I confess it is contradictory and confusing—I do not be- lieve Germany means now to risk war, but neither do I see the smallest reason to be- lieve that she means to seek peace by ac- cepting any reasonable settlement of the rep- arations problem. The single real chance lies in the course of Britain. What, then, is the British state of mind? I have written much on this subject already, but it is perhaps interesting, after having written of Britain from London, to write of it from Paris, and even from Geneva. Cer- tainly the British desire peace. You may go from one end of France to the other and never hear a Frenchman speak of war with Great Britaln. Impatience, resentment and disappointment over British policies, yes, much of all three, but that is all. On the contrary, in London you will be struck by the number of Englishmen who speak of France as the hereditary enemy. It you talk with a Frenchman about an Anglo-French war he looks at you with frank amazement, incredulity. It is not a thing which enters into his range of vision. But it Is not quite the same in Britain, and for an odd but obvious reason. The mass of the British people resent French air strength as much—almost as much, certainly-—as they did the German naval challenge twenty years ago. There is a sense of uneasiness and resentment that at the present moment London should be—as, In fact, it ls—completely at the mercy of French air fleets. Alr Fleets Mean Protection. Ior France these fleets mean protection against Germany In the element in which all experts believe that the next war will be fought. Supremacy in the air seems as nat- ural and inevitable as supremacy at sea has seemed to the British for generations. But, unhappily, the French air fleets, mobilized against Germany, could be used against Britain, and a real sense of insecurity results. 1 confess to a degree of astonishment in hear- ing the debate in the House of Commons the other night over air appropriations and policies. Now, the British demand, perhaps not of- ficially spoken, is that France disarm. The glishman believes that unless France r duces her air fleets he must build—he is, in fact, building—and in a curious fashion he clings to the notion that in armament lies the cause of war and that France, by main- taining armaments, is not only compelling him to arm, but is keeping Europe armed and preventing real peace. meets all the American and British argu- FRENCH BAR PLAN MAY BE COSTLY Isolation Likely if TO DAWES Reparations Settle- ment Is Not Reached on Proposed Basis Now Acceptable to Others. BY OLIVER OWEN KUHN. REMIER POINCARE of France begins to raise obstacles to ful- filment of recommendations of the Dawes financial commisgion, which sought and has found—in the opinion of the leading minds the world over—a method by which Germany may pay her reparations bill and the con- tinent of Europe once more set going economically and financially speaking. ‘With his hedging on the removal of established sanctions in the Rhineland | and the Ruhr, with his attempt to pick | flaws in apportionment of proposed reparations payments, with his effort to | link such payments with debt cancella- | tion—through which no nation save France can profit—the French premier at once causes conjecture as to whether | France again, as in varlous conferences between allied statesmen since the treaty of Versailles, will prevent concerted | agreement and permit France to exploit the prevailing European situation to her own ends—at least follow her own dic- tates in the application of purportedly needed panaceas. Other Powers Agree. England has agreed to the experts’ report on reparations. Belglum and Italy likewise have voiced their fa- vorable interest. Entirely contrary to expectations, .the .German .govern- ment itself has quickly and freely consented to the adoption of the Dawes recommendations and has agreed to hasten construction of ma- chinery through which recommenda- tions may be put into effect at the earliest moment. Only France, if her standpoint is made clear by Poincare, will take ‘advantage of the situation and delay speedy favorable conclu- sions. In view of this situation sev- eral conclusions necessarily are drawn as to the future of the Dawes pro- posals. They are: France must bend her desires more in accordance with the wishes of all other powers or the Dawes commis- sion plan will prove sterile. Poincare must fall into line, else France will face isolation on the con- tinent, if not the political world. German compliance will prove Ber- lin's good faith and put the burden of defense upon France, thersby prov- ing the German contention as well as the British, that France marely has sought to preserve her own national- isttc interest by continued disor- ganization in Germany and elsewhere. Many Pitfalls Akead. It Poincare is sincere there are many pitfalls ahead of not only the Dawes report, but France as well, for there is every Indication that Belgium is falling away from the in- transigeant attitude of Paris and is more inclined to listen to the British viewpoint, as long as Belgium's share of the reparations account made certain. Most certainly Belgium is willing to listen to any nroposal that will permit restoration of her commerce—a thing now impossible by irtue of the impasse which has ex-, isted as a result of dilatory setile- ‘ment of the whole reparations Gues- tion. England and Russia are look- ing toward rapprochement; most cer- ainly England and Germany may be expected to draw clos togather in case France remains the ons country blocking economic and financial res- toration of continental affai Italy likewise woos England's fa- vor and, with Italy, Spain, though not | a party to present negotiations, like- wise would veer to the general Brit- ish viewpoint that reparations prob- lems, should be put out of the way once and for all time, that some meas- ure of equilibrium prevail. France would be isolated save in the sense of her political agreements with the | smaller nations of southeastern Eu- rope, and these pacts indeed would be puny affairs if the greater nations of the continent went ahead not con- sidering France's interests. Through such close arrangements between other nations political Alignments in- |imical to French interest eventually would be certain. May Be Smoke Clouds. It is not believed that Poincare will dare throw a monkey wrench in the proposed machfnery for reparations settlement. Those who believe that France eventually will square her- self with continental, even world, de- sires believe that the smoke clouds that have emanated from Quai d'Orsay in the past week, all having a dampening effect upon the repara- tions commission and other friends of settlement, have been designed to bolster the strong nationalistic cause in the coming French elections. Once these are over and Poincare has weathered the storm he may be in a position to make modifications in his stand. Most certainly is it true that he now is keenly sensitive to the demand of a great element in French life that France's grip on the Ruhr or Rhineland be not sur- rendered at any hazard. Further- more, a momentary manufactured hazard to the fulfiliment of the Dawes proposals might strengthen Poin- care's hand in negotiations in regard to debt cancellation. In other words, the friends of France who refuse to be blindfolded and are unbiased in analyzing political trends are finding excuse for the apparent flareback to the Polncare policy of French might and national interest as against com- mon weal. Whether Poincare intends to re- main firm throughout in the face of almost unanimous decision to put in- to effect the Dawes proposals, of course only Poincare knows. But it nevertheless is generally agreed that upon France's action in the course of the next two months may depend the salvation ot Europe. Eagland Sees Way Out. There is pretty definite idea in England that the Dawes proposals are the keys thrcugh which the doors of the land of peace and plenty may be unlocked. Eng- land, though not ready to-entirely sub- ordinate British political interest on the continent, nevertheless is ready to g0 far in compromises in order that trade and commerce may be restored and ‘vexatious problems, always nettling, al- "7 (Cohtinued on Third Page.) j with tremendous speed, it would be (Continued on Tenth Page.) WORLD MAY TALK ENGLISH AS RESULT OF THE RADIO Gen. Harbord Sees Language as Tongu of the Twenty-First Cen- tury World. BY EDWARD F. ROBERTS. ADIO may make English the language of the world This is one startling pos- sibility of the enormous EX-! pansion of science’s latest marvel in | the opinion of Maj. Gen. James G. Harbord, president of the Radio Cor- poration of America. “Radio is in its infancy,” says Gen. Harbord, “and while it is developing difficult to exaggerate the possibil- ities of its effect on our civilization. 1 firmly believe that it will exert a powerful influence in breaking down the language barriers which separate nations today. Indeed, it requires but little vision to dream of the English language as the tongue of a twenty- first century world as one result of the world-wide use of raglio com- munigation.” “Why necessarily English?” “For many reasons, but principally because English is today the lan- guage of business in the leading countries of the world and also be- cause the control and development of radio apparatué is largely in the English-speaking lands. The British empire is today girdled by radio out- posts, while in the United States wire- less communication in all its forms has, of course, had its greatest and wildest development. The English language dominates the air today and its notes will grow even louder as the years pass.” English a Business Need. “Does that imply,” I asked, “that the natives of other countries will learn to speak English?” “Business necessity will urge them along that path,” replied Gen. Har- bord. “The great business centers of the world today are the two Eng- lish-speaking cities of New York and London. The daily business develop- ments of those two cities are of vital importance to business men in every country in the world. News of those developments is at present spread through the newspapers of the differ- ent countries, where It appears trans. lated in their respective languages. But with the development of radio | 1east sufficiently the business man who understands English can get the news he wants from the air far faster and more com- pletely than he could by waiting to read it in his own newspaper. “Take, for instance, a merchant in China to whom the operations of the New York cotton market are of the utmost importance. If he knew Eng- lish he could tune in on New York and get that information instantly, as soon as if it was broadcast at the close of the market. He would not dare walt for the news through the ordinary channels it radio facilities were at the disposal of an English- understanding rival. “The same situation would hold good in every other country in the world where business is transacted. The business man who understood English would have an important ad- vantage over his competitors, and the natural result woumld be ‘that all business men whose operations were tected vement of the Eng- ‘l?lb sndh yAgl:r:::n m-rlau md thut | means a substantial majority of the business men of the world, would be compelled to learn English—at to understand the spoken tongue. “An important factor in the break- ing down of language barriers by | radio,* continued Gen. Harbobd, “is that it involves something much more simple than learning to read or write a foreign language. A man does not require any education in order to be able to listen to spoken words, and | even a man who cannot either read or write his own tongue can very quickly pick up a spoken language. If the time does come when all the| nations in the world can use a com- mon laguage the effect on human progress will be incalculable. It Wwould be difficult to overestimate the part which language barriers play in fostering national prejudices and in creating those misunderstandings which lie at the root of wars. The ability of all nations to use a com- mon tongue Would be a long step to- ward that final abelition of war of which we all dream.” “What do you regard as the great- est present accomplishment of radio?” 1 asked. “Its service in bringing knowledge and pleasure to remote and isolated villages and communitie: responded Gen. Harbord promptly. “The great cities no longer have a monopoly of the finest fruits of our culture in such things as music, oratory and easy contact with our scientists and scholars. Through radio the greatest singers, the master musicians, the fa- mous scientists, scholars and thinkers of the world can and do reach an au- dience which extends from the heart of New York or London to the lone- liest farm on the western prairies or the most isolated mountain village. The far-reaching influence of radio in this respect camnot but have a profound effect in raising the cultural level of our race.” “To what extent has it thus far affected the business world?" “Probably its most important re- sult to date in that direction has been the facilitating and cheapening of communication. About 25 per cent of all transatlantic messages are now being sent by radio and about 50 per cent of transatlantic communications. One result of this development has been the reduction of cable rates in 1923, ‘the first to take place in a gen- eration.” “Will the radio eventually supplant the cable?” “No, I don’t think that is at all likely or even desirable. Competition is a good thing, and the cables have their own service to perform and will continue to do so. _ “One Interesting effect which radio has had on business is in relation to the public utility companies. I was recently told by some of the execu- tives of the big electrical companies that the spread of radio has resulted in a tremendous increase in the con- sumption of electricity for light. Peo- ple are staying at home in the eve- nings more than they ever did, and I think that anything which makes the home more attractive is a. {decided as- set to the -dn." e BY GOULD LINCOLN. PPONENTS of the now famous section 28 of the merchan marine act of 1920, which is designed to give goods for export and import carried in Ameri- can merchant vessels preferential freight rates over the railroads of the United States, to and from American ports, apparently have won the first round in the fight to prevent that section of the law being applied to the present time. At their earnest solicitation, the Interstate Commerce Commission has ordered that the date set for the discrimination in favor of merchandise shipped in American bot- toms be June 20 instead of May 20, as originally designated by the commis- sion In its order of March 11, 1920. With this respite granted, the op- ponents of section 28 are redoubling their efforts to get legislation through Congress postponing at least until | July 1, 1925, the operation of this sec- | tion of the law. Bills for this pur- pose have been introduced in the House, one by Representative Newton, and also in the Senate Senator Lodge | has sponsored such a proposal at the Tequest of New England interests. Modifications Expected. A joint committee of the Shipping Board and the Interstate Commerce Commission has been considering what | further steps should be taken in the | matter of delaying the application of section 25, either in part or in full. There is a growing belief that in some | quarters modifications in the order will be forthcoming, so that either a num- ber of commodities will be excepted from the operation of section 28 or | that perhaps a six months’ extension of time may be given to the business ! interests affected before putting it into | effect at an. | Suggestions have been made that it | would be advisable to try out section 128 in one or two areas at a time. In fact, members of Congress who had | part in drafting the law say that it | was the intent to begin its operation in | that way, since it was scarcely deemed | poseible that adequate American ship- ping facilities to handle all the foreign traffie offered could be developed out of | all American ports at the same time. On the other hand, however, the ques- tion a% to whether it would be Consti tutional to apply the law to one section | and not another has been raised Four Years Old; Not Used. | For something like four years sec- {tion 28 has been on the statute books without being called into operation. The law specifies that it shall be |operative unless the United States | Ghipping Board shall certify to the Interstate Commerce Commission that “adequate shipping facilities” to and from American ports to foreign countries are not afforded. Back in| 1920, soon after the passage of the | lmerchnnL marine act, the Shipping | |Board, not being ready to declare that the shipping facilities afforded by | Americun vessels were adequate to handle the traffic offered, certified | the situation to the Interstate Com- merce Commission, and section 28 was |ordered suspended. But on March 1 of this year the In- | terstate Commerce Commission re- ceived from the Shipping Board a |resolution certifying that the pro- {visions of section 28 should not be '(urll’l?r suspended, far as relates to all commodities except grain trans- ported between ports of the United States and those of Great Britain and northern Ireland and the Irish Free State, and the ports of continental Europe north of and including Bor- deaux and the east coast of Asia, the islands of the Pacific ocean, Australia and the East Indian islands, and the ports of Central and South America." The order of the Interstate Commerce | Commission, which was issued March 11, following the receipt of this reso- lution from the Shipping Board, made section 28 effective as of May 20. Strong Protests Made. Immediately there was a roar of protest from various interests which felt that they would be adversely af- fected. Commissioner Frederic I Thompson of the Shipping Board, a stanch supporter of the enforcement of section 28, has said that the oppo- sition emanates from railroads hav- ing preferential interchange of freight agreements or understanding; from ship operators and certain organiza- tions closely identified with the oper- ation of vessels under foreign regis- try, and from exporters whose buyers in foreign countries sought to desig- nate the transport of the commodities purchased by them in ships of their own nation. And back of these, it has been charged, are to be found the foreign shipping interests themselves. Undoubtedly, however, many of the American interests protesting against the application of section 28 at this time are honestly and firmly convinced that it would be injurious to some of the producers, exporters and hnporters in this country. Other countries have in the past given preferential rail rates to goods destined for export or import in ves- sels of their own flag. Germany adopt- ed such a policy, with fine results for the German merchant marine, it is pointed out. When Congress passed the merchant marine act of 1920 it had every intention of extending this kind of aid to American merchant shipping. It went further, and in section 34 of the same act provided for giving preference in the matter of tariff duties to goods shipped in American merchant vessels to this country. But the executive branch of the government has declined to'make section 34 effective. To do so meant the abrogation of many commercial { e ADVOCATES OF U. S. MARINE SEEK TO APPLY AID ACT Deferring of Preferential Rail Rate on Cargoes for American Ships for Long Period Opposed. right to say when it should becom effective. The practice of granting preferential railroad freight rates on goods intended for export and import, as compared with the rates on goods for domestic consumption, had devel- oped during a long period, and the Su preme Court had sustained the prac- tice. Ever since the cnactment of the merchant marine act of 1920 there have been loud protests from British Italian and other shipping interes against those clauses intended to give preference to American shipping. They dubbed it “flag discrimination™ and fulminated against it on man occasions. And now, when the first real effort to make effective ome cf these clauses is made, members of the Senate and House have been swamped with pleas not to permit the very thing which Corigress declared should be done to help build up the Americar merchant marine. First the ship subsidy plan of direct aid to mer chant vessels was opposed by the for eign interests, and because sentime in this country was against ut sidies” to private interests the sl cubsidy failed to be acted upon and has apparently been dropped, at least for the time. And now the same kind of a fight is being made against th indirect aid contained in section S Senators for Application. Sentiment in favor of the =pplica tion of section 28 with as little deia as possible exists strongly among many of the senatore. There will be no at tempt to bring forward legislation to postpone it in that body now, it is said 1t the House should pass a bill for this purpose the Senate committee on commerce will then consider the mat- ter, but the no wssurance that it will consider it favorably. The proof of the pudding is in tt eating, and, according to senators who favor the application of section 25, it will be impossible to determine what will be resuits of that legitia- tion unless it is put into effect. The very outcry which is raised against it by foreign shipping interests is indicative to these senators that it may be expeoted to benefit American shipping. As for the American ex- rorters and importers, it is believed that onco the section has been in op- eration conditions will soon adjust themselves so that they will not suf- fer, so that their goods will be han- dled adequately in American-flag ves- sels. ise of Objections. The protestants, who include, for example. the National Industrial Traf- fic League, the Millers' National Fed- eration, the Maritime Association of the Boston Chamber of Commeroe and the Western Petroleum Refiners As- sociation, maintain, on the other hand, that the traffic would be required to pay the higher domestic rates in place of the lower export and import rates, because there would not be American ships to carry all this traf- d, too, that many Semerant. eserters huve contracted for tonnage in foreign vessels to move within the next few months, and that their commitments were made in the belief that tion 2% would not beceme cffective on such ort notice, and that to apply it now would work a hardship on them. It has becn argued also that the ap- plication of section 28 might result in discrimination in faver of one American port over another and in one Americzn exporter or importer over another. The Shipping Board, through a committee consisting of Commission- ers Plummer and Thompson, held hearings on the question of applying section 28 at Boston, New York, New Orleans, Portland, Oreg.; San Fran- cisco, Los Angeles, Chicago and St. Louis before determining that the American shipping facilities were ad- equate to handle the traffic in the meaning of section 28 The opponents of the present applica- tion of section 28 point out, however, that the investigation of conditions was made two years ago. They insist that what is needed is a most thorough study of conditions as they exist today. Many of the supporters of section 28 concur in the belief that it should not be made effective until all the facts are in hand as to the service that can be rendered. Such studies, it is learned, are now under way. On April 1, 1924, the services maintained by the United States Shipping Board Emer- gency Fleet Corporation numbered 76, divided as follows: European trades, 41; Mediterranean trades, 7; South American trades, 9, and far eastern trades, 19. The number of vessels employed in these services was 356. The total number of vessels in the European services was 168; in the Mediterranean services, 38; in the South American services, 36, and in the far east and long voyage sery- ices, 114. There are certain American privately owned ships engaged in overseas trade, but the great bulk of this traffic is handled in the govern- ment-owned ships, workde at present through private operators under con- tracts with the government. Other Vessels Available. If the traffic desiring to go in American bottoms increases greatly under the operation of section 28—as its proponents hope it will—the Ship- ping Board Emergency Fleet Corpo- ration has other vessels which can be put into the services. It must be borne in mind, however, that Ameri- can merchant vessels are costing more to operate than they bring in under existing conditions. The mora ships operated at a loss the greater the deficit. The Congress this year is treaties with foreign nations. But in the case of section 28 the Shipping Board alone was given the appropriating some $14,000,000 less ta meet operating costs than it did last year. o &