Evening Star Newspaper, June 15, 1937, Page 16

A—16 THE EVE NG _STAR WASHINGTON, D. C., TUESDAY, JUNE 15, 1937 *——_——-———_——————————J————-*_————__—_M NEW 1. FEE SN BY CFEY Adequate Merchant Marine Described by Senator in Forum Talk. A new and modern fleet of commer- | cial ships, created as a result of the maritime act, will be sailing the seas under the American flag within the next three years, Senator Guffey of Pennsylvania predicted last night. He spoke on the National Radio Forum sponsored by The Star and broadcast ower a Nation-wide net- work of the National Broadcasting Co. “I predict that within the next three years we shall see the American flag floating over a fleet of new ships, mod- ern in every respect, and providing ade- quate protection for passengers and crew from every peril of the sea,” Guffey said. “Those are the kind of vessels au- thorized by the new act. I predict that through their construction the business men of the Nation will receive a new impetus—that the farmer will have the facilities required to carry his grain to forelgn markets—that the | worker will experience a pride in hav- ing produced vessels comparable with those of any nation on earth—and that our people will again feel secure in the possession of a second line of defense, capable of meeting any contingency | which may face the Nation. Approve Investment. “I am satisfied the American people Discusses Merchant Marine SENATOR GUFFEY. —Star Staff Photo. mails between the United States and foreign countries, on established mail routes. The holders of such contracts were to be paid, not on a poundage basis for the mail carried, but on the basis will approve the invesiment we shall make in America’s new trade ships.” | The Pennsylvanian reviewed the | history of the Nation’s merchant marine since the World War, its de- pletion and inadequacy, and measures | taken in recent years to restore it to| a point where it can be of real service | to the Nation's commerce. He cited the President’s message to Congress delivered March 4, 1935, referring to “‘our necessity for a merchant marine, | not merely to serve the needs of our | commerce, but also as a naval auxili- | ary, if we became involved in an- other war.” The text of Senator Guffey's speech | follows: | From time to time you have read in the newspapers, or you have heard some speakers make the perfunctory | statement: “This country must have | an adequate merchant marine.” Just what does that statement mean? s it important, and if so, how im- portant? Does “must” mean some- thing imperative? My* answer is my appearance here tonight | Seventeen years ago, in the mer- ! chant marine act of 1920, Congress | declared it to be our national policy | that the United States shall have and maintain a privately owned merchant marine sufficient to car- the greater | portion of its commerce That act was adopted by a Con- gress that remembered the stagger-| ing cost to build ships—upward of three billion dollars were spent—when we were confronted with the emer- | gency of war. Soon after the 1920 act was passed | we had a surplus of new ships. Many | people thought we were literally “sit- ting om top of the world” so far as merchant seapower was concerned, because we had our new emergency | fleet, while the other great maritime nations had lost a great many of their | vessels through enemy sinkings, and | the remainder had grown old. Fleet Was Unbalanced. But, as we learned later, our new | fleet was unbalanced. We had too many ships of one type. We had too many slow cargo vessels and not! enough oil tankers and speedy pas-| senger carriers. We had built for | quantity and not to meet trade needs. | Soon after the 1920 act was ap- proved the world-wide post-war de- | pression set in. Our foreign trade fell off. Ocean freight rates de- clined, and to make matters worse, our American steamship operators | began to meet severe competition from | new and fast foreign-built tonnage. | All of the maritime nations had | started to rebuild their merchant ma- rines. And they kept on building. In 1928 it was represented to Con- gress that owners and operators of American merchant vessels were at 8 great disadvantage in competing | with foreign-owned vessels. This was 80, because it costs less to build ships in foreign yards and sts less to operate foreign ships. The foreigner’s cost is less, because his wage scales are lower and hours of labor are longer and working con- ditions are less wholesome than those | paid to and worked and enjoyed by workers in our shipyards and the crews on American vessels. Besides, the foreigner's ships were new and ours were growing old. Congress tried to meet this foreign competition by passing a new act. The 1928 act authorized the Post- master General to enter into long- term contracts, for the carriage of of the speed of the ship that carried the mail and the number of miles that ship traveled. This was a subsidy under an alias In the same act, Congress author- ized the Shipping Board to finance the cost of building new vessels for pri- vate owners, loans at low interest rates. another subsidy under another alias. I am convinced that the Senators and members of the House who sup- ported the 1928 act were sincere in per year, and the low interest-bearing loans, would supply the American shipping industry with the necessary capital to build new ships. Congress realized fully that our merchant fleet | | was becoming obsolete and that we must build new ships. But the 1928 act did not produce the expected ship replacements. A few vessels were built—a very few— but a great deal of this subsidy, dis- guised as “mail pay,” the payment of excessive salaries, bonuses and dividends, to officials and | ping if any, should be substituted, stockholders of the steamship lines favored with the mail contracts. The hearing before the Senate In- vestigating Committee, which was headed by my able colleague, Senator Hugo Black of Alabama, and the in- vestigations carried on under the di- rection of Postmaster General Farley, demonstrated the necessity for a bet- ter plan for Government aid to the merchant marine. A plan that would insure the building of the ships now so badly needed. Roosevelt Called for Action. President Roosevelt is ship-minded He has not forgotten the crisis of 1917, when the cry was for ships and more ships. In a special message to Congress, delivered on March 4, 1935 the President referred to our necessity for a merchant marine—not merely to serve the needs of our commerce, but also as a naval auxiliary, if we be- came involved in another war. He commented vigorously upon the fail- re of the 1928 act to accomplish the expected results. He then said. I quote: “This lending of money for ship- building has in practice been a fail- ure. Few ships have been built and many difficulties have arisen over the repayment of the loans. Similar dif- ficulties have attended the granting of ocean mail contracts’ The Govern- ment today is paying annually about $30,000,000 for the carrying of mails which would cost, under normal ocean rates, only $3,000,000. The difference, $27,000,000, is a subsidy and nothing but a subsidy. But, given under this disguised form, it is an unsatisfactory and not an honest way of providing the aid that Government ought to give to shipping. “I propose that we end this subter- fuge. If the Congress decides that it will maintain a reasonably adequate American merchant marine, I be- lieve that it can well afford honestly to call a subsidy by its right name.” Saw Need of Subsidy. The President’s message referred to the higher cost of shipbuilding in this country and the higher wages and living standards enjoyed by our seamen, which makes a subsidy nec- essary, as I have stated tonight. He then said: “Approached in this way, a sub- sidy amounts to a comparatively sim= ple thing. It must be based upon pro- by granting long-term | That was was diverted to | viding for American shipping—Gov- ernment aid to make up the differ- ential between American and foreign shipping costs. It should cover, first, the difference in the cost of building | ships; second, the difference in the cost of operating ships, and finally, it should take into consideration the liberal subsidies that many foreign governments provide for their ship- ping. “Only by meeting this threefold differential can we expect to main- tain a reasonable place in ocean com- merce for ships flying the American flag, and at the same time maintain American standards. In the Seventy-fourth Congress I | | introduced a bill designed to carry their belief that the mail pay Whirhi amounted to $25,000,000 or $30,000,000 out the President's recommendations. I confess, to you listeners in the radio audience, that I found I had thrown my hat into a ring, where the hats of several of my sistinguished col- | leagues were already resting. In fact, the ring was crowded with hats, and good hats, too. Several other bills, sponsored by able gentle- men on both sides of the Capitol, and dealing with the same subject had been introduced. There was a great diversity of opinion as to what should be done with the existing ocean mail contracts and what new aids to ship- Finally, a compromise measure was worked out, between Senator Gibson, other members of the Senate Com- merce Committee and myself. This compromise measure was enacted as the merchant marine act, 1936. It became & law on June 29, 1936. No one has ever claimed that this new act is perfect. A compromise is almost by necessity imperfect. It was formulated and passed in the hectic rush that usually precedes an ad- journment of Congress. There may be minor defects in the act that should be cured by amendments. But I believe the fundamental prin- ciples of the act are sound, construc- tive and workable. I believe the more the act is studied the more its merits will be appreciated. ‘The outstanding feature of this new act is that it assures in any event the building of the ships we sorely need. America is to have an adequate fleet of new trade ships and we can start building them now! ‘The act is to be administered by a maritime commission of five members, That commission has recently taken office. The Presldent exercised great care in selecting the commissioners. I understand the names of nearly 300 persons were suggested. President Roosevelt prevailed upon Joseph P. Kennedy to accept the chairmanship. Mr. Kennedy had made a distinguished record as the first chairman of the Securities and Exchange Commission. He had ac- complished the difficult task of regu- lating the stock exchanges of the country and having them like it. He has now received a more difficult as- signment. The way he has started out on his new job, as I shall here- after point out, shows that the Presi- dent picked the right man for the task. Commissioners Qualified. The bther four commissioners were selected for their special qualifica- tions. Mr. Moran, a former Repre- sentative from Maine, had, for a long time, been a student of our shipping | problems, and had introduced a bill | in the House of Representatives, which contained many provisions sub- | sequently incorporated in the 1936 | act. Mr. Woodward had served as a member of the Advisory Committee of the Shipping Board Bureau and thus became familiar with the administra- tive and regulatory problem: that must be met and solved. Admiral Land is & ship construction expert, and, up to the beginning of this year, he was chief of the Bureau of Construction and Repair of the Navy. Admiral Wiley has had a dis-| tinguished career in the Navy and | brings to the commission a wealth of experience. | Iam convinced we have a good law. | We have an able commission. We are now ready to go places! All I have said -0 far is preliminary to my real message to you tonight. | | Last Tuesday, upon the recommen- | i dation of Chairman Kennedy, the! | building the vessel. President sent to Congress a request for the immediate appropriation of $10,000,000 and for authority to the Maritime Commission to make con- tracts for $150,000,000 additional for ship construction. The commission already has to its credit about $69,- 000,000 in the construction loan fund, which was established under the 1928 act. Altogether the commission plans to use about $256,000,000 for the new program in the next two years. Thus the money to build ships is imme- diately . available. Its program involves the construc- tion of cargo ships, combined pas- senger and cargo ships, high-speed tankers and one fast passenger liner. Altogether contracts for 95 new ships are to be awarded on competitive bids. The cargo ships will be completed in from 12 to 24 months. The pas- senger ships will be completed in from 24 to 36 months. You may question whether we have | immediate need for so many new vessels. ‘The answer to that question is, that after making a survey, the new commission has found that with the exception of oil tankers there is not a single sea-going vessel now under construction in any American ship- yard. More than that—for the past 15 years not a single sea-going vessel of the general cargo carrying type has been built in an American ship- yard for foreign trade, and during the same period very few have been constructed for our coastal and inter- coastal trade. Most Ready for Scrap Heap. Most of our ships are so old that 85 per cent of them will be ready for the scrap heap in the next five years. This does not mean that they are un- safe, but most of them should be re- tired now because they are slow and more expensive to operate than the newer foreign ships that are compet- ing for our foreign trade. Quite a number of these new ships are to be built for private owners for operation in our foreign trade. Under the new act the commission is author- | ized to contribute up to 33'; per cent of the cost of building a vessel in an American yard, to make up the differ- ence between American and foreign shipbuilding costs. In very exceptional cases the com- mission may contribute up to 50 per cent of the American cost. This construction differential sub- sidy does not go to the private owner of the new ship. The privat. owner | pays the shipyard the amount it would cost to build the same ship in a foreign yard. The Government pays the ship- builder the balance of his price for So the shop- owner does not receive one penny of the constrution differential subsidy. Moreover, the shipbuilder's profit on the actual cost of limited to 10 per cent. Upon com pletion of the job, if the shipbuilder's | books show a profit of more than 10 e OPEN EVERY NIGHT o LAST 4 DAYS! LIQUIDATING ENTIRE WAREHOUSE STOCK FINE FURNITURE USE OUR BUDGET PLAN! 2-PIECE HEAVILY CARVED OAK LIVING ROOM SUITE covered in blue cut frieze. Originally $279.95. TAKE 12 MONTHS TO PAY! If Purchased on Our 12-Month Budget Plan, a Small Carrying Charge Is Added LIVING ROOM FURNITURE and More construction s | | 5139 per cent he must return the excess to the Government. Profiteering to Be Blocked. And let me assure you right here, that the commission’s auditors will go over the shipbuilder's costs with a fine-tooth comb. There will be no profiteering on these contracts! Who, then, you may inquire, benefits by the construction subsidy? First, th. Government and the people of this country benefit, because it pro- vides & way to obtain American-built vessels which will be available to the Nation in an emergency. Second, our farmers and other pro- ducers will have the protection of an adequate number of American vessels to carry their products to our foreign customers. A protection that was lacking in 1917. Third, American ship operators will benefit because they will be able to ebtain modern and faster vessels to meet present-day competition. Fourth, the shipyard owners will be benefited because it will provide work for their yards. Fifth, and most important, tens of thousands of skilled and unskilled mechanics will benefit by steady em- ployment at good wages in the ship- yards, and other thousands of work- men will have employment in the steel, copper, electric, lumber, paint, glass and other industries that supply materials for ships. The American workman, above all others, will benefit by the ship-construction subsidies. This should lighten the burden of un- employment relief in many communi- ties. In fact, the whole Nation is benefited by the contemplated ship- building program. New Operating Plan. Not only will there be new ships but there is a new plan for operating them. Should the Government build the ships entirely with public money they will be chartered to private oper- ators, who will hire the ships*for a specified time and operate them on trade routes considered by the com- mission essential to the Nation's for- eign trade. This plan of Government ownership and private operation is one of the outstanding features of the new act. But there will be no repetition of the | errors of the past in the ‘operation of the Government-owned fleet. Under the old plan the Shipping Board assigned its vessels to private operators, who managed them as the Government's agents. The operator took no risks. He was paid a certain percentage on the freight revenues. The Government paid all the expenses of operation and repairs—took all the risks of profit or loss. And usually it took a loss. ‘The operator had no incentive to be careful, prudent or thrifty. If the Government lost money, it was just too bad, but the operator received his compensation just the same. Under the new act, such form of operatjon is prohibited. In future the Government wiil rent the ships to the operator for a specified rate per month or per year, and it will be up to the operator to make a profit if he can. If he loses money on a voyage, it is his loss, not the Government's loss. Operating Differential Subsidy. Another aid to the American ship operator authorized by the act is the operating differential subsidy. This ald applies equally to the operator of privately owned and Government- owned vessels. It is the intent of the new act to put our American operators in for- operators of foreign ships. The com- mission is authorized to pay to the American operator an agreed sum which will make up the difference be- tween the high cost for crew’s wages, subsistence, repairs and other voyage expenses on American ships, as com- pared with the lower costs for such expenses on foreign vessels Who benefits by this subsidy? Of course, the operator benefits, be- cause it puts him upon a parity with his competitor in the foreign trade He can operate with the assurance that he is not at a disadvantage, be- cause his competitor has lower oper- ating costs. However, the American operator who receives such a subsidy will not be allowed to pile up excessive profits at the expense of the Government. The new law provides that, if the operator’s profits, in any five-year pe- riod, exceed 10 per cent per annum on his invested capital, then half of such excess shall be paid to the com- mission, until the amount so paid has reimbursed the Government for the amounts it has advanced for the op- erating subsidy. ‘The operator is not prevented from making high profits, but if he does he must repay the Government for the aid it has extended. of American vessels. The commission fixes their wages, hours of employ- ment and working conditions. Any in= crease in their wages is borne by the Government through the operating Th ip operator has no subsidy. eign trade upon an equality with the | But the outstanding beneficiaries of | | the operating subsidies are the crews | incentive to haggle over wages and hours. The commission attends to that. ‘Phis feature of the new act should remove all excuse for labor disturbances between operators and maritime workers. Confident Funds Will Be Allowed. I confidently predict that Congress will act favorably upon the President's recommendation for the modest appro= priation requested now, and will give the Maritime Commission authority to proceed with its plan. I also predict that within the next three years we shall see the American flag floating over a fleet of new ships, modern in every respect, and providirg adequate protection for passengers and crew from every peril of the sea, Those are the kind of vessels authore ized by the new act. I predict thht, through their construction, the busis ness men of the Nation will receive a new impetus—that the farmer will have the facilities required to carry his grain to foreign markets—that tha worker will experience a pride in hav- ing produced vessels comparable with | those of any nation on earth—and | that all our people will again fee] se- cure in the possession of a second lina of defense, capable of meeting any contingency which may face the Nae tion. I am satisfied the American peopls will approve the investment we shall make in America's new trade ships. - vy SEPAINTS I, | Use Cabot's Non-Fading Green | 4 | for your blind and trellis work. {922 N. Y. Ave., Natl. 8610 LOOK FOR THIS EMBLEM WHEN YOU LOOK FOR A USED CAR SEE_YOUR FORD DEALER s WEY MATCHES LOWES PRICED CARS IN T GAS AND OIL ECONOMY! Featiore aflet feativse THAT OTHER CARS And DON'T OFFER! on your present car will be all the money you need to swing the deal, monthly terms that nobody in LIQUIDATION PRICE 2-PIECE MODERN LIVING ROOM SUITE, cov- ed with striped chenille in combination with leather. Originally $264.95. 8'29.95 LIQUIDATION PRICE ____ BEAUT!FUL 2-PIECE LIVING ROOM SUITE, town can better will be arranged. LARGE MODERN EASY CHAIR, covered in beautiful damask. Originally wsa 3 $89.95. LIQUIDATION PRICE . LARGE GREEN TAPESTRY EASY CHAIR. Mas- sive roll arms. Originally $39.85. s's 95 il LIQUIDATION PRICE Studebaker is the only car with non. slam doors that click lightly, tightly and silently :..the only car with Helen Dryden interior styl. ing ... the first car offering both thevautomatic hill holder and triply sealed feather-touch hy- YOU take the time to shop every automobile salesroom in town, you won't find a car that offers you so much of everything you want as the smartly styled new 1937 Studebaker. i / covered in rust cut friexe. Carved frame. s 3 Golden Gate Bridge from Fisberman's Wharf Originally $198.95, LIQUIDATION 98 u]kown _TAP[STIY! EASY CHAIR. Floor sam- And the marvel of it is its amazing low price. draulic brakes. . . the first car offering the dual PRICE ple. OfllmfllgE $48.00. LIQUI- SIQ 95 F : the lowest priced cars cost less €conomy of the sensational Fram oil cleaner and *__GIANT The Chapter in Your Life DATIONRRRICE. - 7 O Hof,Exen the JoVest D B s ohi the gas-saving automatic overdrive. REDWOODS 2-PIECE MODERN LIVING ROOM SUITE, cov- QUEEP:( AENE !QSY“C;;;II, covered in rose when you figure in Studebaker’s astonishing ; ered in Karakud. Originally domask. _Originally $69.55. economy of gas and oil, Studebaker’s wealth of See fi decisi .:::::::' entitled $239.95. LIQUIDATION PRICE s‘ I9.95 IEIAQsliIDAcLIi)Ir; N:LS:}] - _’_'m h;m oy inno‘;nions, S“: dEhilers solid) sonnd] o ::h:xg::lr:ell; ;'?zexicfi':filfl es.r:d:;:l::;z: DEL MONTE s AN' PR ANCI MODERN 2-PIECE LIVING ROOM SUITE, cor. Originally $49.55. LIQUIDA- 824 95 long-lasting construction. ber, Studebaker insurance rates are at rock- CARMEL f::.dh.'," ‘3’,?:;'::5',"5;729'5'"" ”“6 oF IIAC;: P:’:izl“l‘fl """ e o.'A I More likely than not, the trade-in allowance bottom and Studebaker resale value is high. & el , N rus e . SANTA CRUZ s o o LIQUIDATION PRICE.. - Y $49.95. LIQUIDATION it '4'9'55' STUDEBAKER'S C. I. T. BUDGET PLAN OFFERS LOW TIME PAYMENTS - sEATHER RIVER | Oce the world’s two greatest bridges: actoss the Bay 2-PIECE LIVING ROOM SUITE; sofid mahogany [l e e SRR a : San Francisco and over its Golden Gate. Sec Fishermen’s trame; covered in green Italian velvet. Orig- ADJUSTABLE BACK EASY CHAIR, in rust I Ph District 0110 RN R Whicr and e fable waterfzont i Chisiows, 14 Speaish inally $218.95. LIQUIDATION $I09 (o, O ssn T eod gf 1138 Conn. Ave. NW. LEE D. BUTLER, INC. phone 0 MT. SHASTA | Mission Dolores. Play on the ocean beach and in 1000-acre PRICE _ LIQUIDATION PRICE.. U ALBER & McNEIL NORRIS, IN MT. LASSEN Golden Gate Park. Spend days in the sun, outdoors; cool : s 1418 P St. N.W. 2018 14th St. N.W. OOLD COUNTRY | summereveningsincosmopolitanhotelsand gay night places. HINSON MOTOR CO. COLLEGE PARK AUTO PLACE BANFIELD MOTORS OF "4y Free book tells all about the nearby wonderland as wellt Cottage City, Md. College Park, Md. = Tfipéfi"iff)’fgfi = CALIFORNIANS, INC. Dept. 6605. 703 Market Bt. 'S Oscs (] BOYD.(‘:&?.E:‘::“MQE‘OR Co. PARIS Ag;l;(n)fistljk‘\v.lcl‘i. INC. Silver Spring, Md, 3 ) Please send your new, ilsirated book and Offcial Tourist o JOHN T. PARRAN GORDON'S I(I"A{‘,AGE SHEN%}:I’]Z%;\}(I‘AOE\?OTOR : Plenty o No Traffic Indian Head, Md. Timberville, Va. St Ve L R, ER—— 4 ”s f 804 Rhode Island Ave. N.E. Delays DELLINGER BROS. LYNCHBURG AUTO SERVICE ALBEMARLE MOTOR CO., ING, p e greine. pace : Winchester, Va. Lyn Ch v ) A i 4 A