tonnage or make them still more favorable to the United States by a policy of discriminating duties, since the subsidy policy has been closed to us?

Representative DAVIS. No; in that connection, Senator, we have been operating about 425 ships of the Shipping Board at a voyage loss of less than $5,000,000 per annum. The balance of the former $50,000,000 expense and of the $35,000,000 expense for last year, was made up in administrative and other expenses, and my study of the problem leads me to the conclusion that if those operations were put on a business-like basis instead of under those M. O.-4 contracts which everybody denounces but which they still retain, these ships can be operated at a profit even though at the present time and for the past two or three years we have had what all authorities recognize as the worst depression in the history of shipping, which has been absolutely world wide in scope and not confined in any sense to the United States. There is not a maritime nation on earth, with the exception of Germany, which has not in the past two or three years had a lot of laid-up tonnage not Government tonnage but privately owned tonnage because of a lack of cargoes; and the reason for the exception in the case of Germany is that she was deprived of all of her merchant marine during the World War and has been gradually acquiring shipping, and has not yet acquired a shipping at all commensurate with the importance of her commerce; so that all the ships she has are in actual operation.

Senator PEPPER. Then, is it your opinion, sir, that without the aid of subsidies and without the assistance of discriminatory duties, and with the handicap of the LaFollette law relating to the compensation and subsistence of our crews, we could nevertheless successfully compete with Great Britain in building up a merchant marine, if proper management and good maritime practice were to characterize the administration of our fleet?

Representative DAVIS. Yes; I will state that my study of this problem for the past several years has led me to the conclusion that if citizens of the United States would employ the same efficient, businesslike methods that they employ in other industries and in which they excel all the other nations of the earth, we could likewise compete with the world in shipping; and I have expressed my views fully, giving the reasons therefor in detail, in speeches which are in the Congressional Record.

And I want to say in that same connection that I have submitted, which are likewise in the record, full, definite recommendations as to the policies which I think should be employed for the purpose of putting the American merchant marine on a safe, sound, permanent, and successful basis.

Senator SWANSON. How lately have you made a speech on this subject?

Representative DAVIS. Last spring.

Senator SWANSON. Could you fix up in your statement to be enlarged because it is evident that you have given this subject a great deal of study and everybody tells me you are the best qualified man in the House on that subject

Representative DAVIS. I certainly appreciate the compliment, even though I do not deserve it.

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Senator SWANSON. Could you fix up a statement-I know that it would be conjectural-first, as to how it would affect the merchant marine itself in tonnage, by the discriminatory duties, whether it would be advantageous or disadvantageous, or whether it would increase or decrease the tonnage by this duty? Of course, it would be more or less conjectural. Then, second, if you decide that it would increase the tonnage and be beneficial to the merchant marine, to what extent would it injure the larger interests of the country by this retaliation?

The CHAIRMAN. Of course, retaliation is guesswork.

Senator SWANSON. Of course, most of it is conjecture; but I would like to reach a conclusion, first, as to whether or not it would be beneficial to the merchant marine itself. If it is not, there is no use entering on the venture at all. If it is and the merchant marine would be benefited, then to what extent would the other and larger mercantile interests of the country be injured? That would enable me to reach a conclusion upon this subject, which I have not been able to do up to this time.

Representative DAVIS. The best way to determine what may occur in the future is to see what has occurrred in the past under similar conditions. As was suggested by this report of the shipping shipping board, the chief reason laid in favor of a return to discriminatory duties is because it is alleged that it worked successfully in the past.

In the first place, I want to ask if it is reasonable to reach such a conclusion, when practically every maritime nation at one time or another in the past has employed this method in an effort to build up its merchant marine, and when every one of them, after thorough trial, abandoned the policy, and none of them except this country has seriously considered again embarking upon the policy except the United States and France in 1872, which she was compelled to abandon after a very brief trial, and a very unsuccessful and unsatisfactory warfare?

Now, take it with regard to the United States. The time that discriminatory duties were employed by this country-really in retaliation to those employed by other countries, but when they were generally employed, and certainly employed by this country to the full and against every nation-was from 1789 to 1815. Commencing in 1815, we began making treaties with different nations, culminating finally in treaties with thirty or forty nations under which this discriminatory policy was mutually abandoned.

During this period from 1789 to 1815 it is true that our merchant marine had a healthy, steady growth; but what were the conditions which then obtained? The Napoleonic wars were then raging, in which Great Britain, the greatest maritime nation even at that time

The CHAIRMAN. Oh, yes.

Representative DAVIS. And France, which was the second maritime nation in the world at that time. I suppose it was the second greatest maritime nation, except the United States.

The CHAIRMAN. Well, except the United States.

Representative DAVIS. I am talking about European nations. In other words, the two greatest maritime nations in Europe were at war with each other, during which their merchant marines and their

commerce with other nations necessarily suffered, just as ours did during the time we were in the Civil War, and just as any nation at war always suffers; and by the way, here during the Napoleonic wars about 1,500 of the ships of Great Britain and France were destroyed and captured, which was a very large number for that time, if you gentlemen will recall. So that we were then operating under exceedingly favorable conditions for the promotion of an American merchant marine. And yet, remember that the condition. became so onerous, and looking to the future the prospect was so uninviting along the line of discriminatory duties, that the Congress by unanimous vote an unheard of proposition, almost, with regard to what has been a national policy-abandoned that policy. Now, they did not do that without reason. If you gentlemen will examine the debates at the time, you will find that they are illuminating on that question; and then continuing on until the reciprocal treaties were finally consummated with different nations.

Now, what was the result? Did our merchant marine benefit or did it suffer? I am going to read again from this book by Winthrop L. Marvin, who is a shipping man and who is the vice president and general manager now of the American Steamship Owners' Association, and who is in favor, just like practically all of the shipping men themselves are, of Government aid to shipping. In dealing with this subject, after discussing the warfare that had raged on the question of discriminatory duties on pages 177 to 180 of this work, Mr. Marvin says this:

Beginning with 1820, there had been a remarkably steady growth in the American merchant tonnage registered for deep-sea commerce. This tonnage rose from 583,657 to a high-water mark of 757,998 in 1828.

(At this point, at 12.05 o'clock p. m., the committee adjourned until Tuesday, March 11, 1924, at 10.30 o'clock a. m.)

TREATY OF COMMERCE AND CONSULAR RIGHTS WITH

GERMANY.

TUESDAY, MARCH 11, 1924.

UNITED STATES SENATE,

COMMITTEE ON FOREIGN RELATIONS,

Washington, D. C.

The committee met, pursuant to adjournment, at 10.30 o'clock a. m., Senator Henry Cabot Lodge presiding.

Present: Senators Lodge (chairman), Borah, Moses, McCormick, Wadsworth, Willis, Pepper, Swanson, and Pittman.

STATEMENT OF HON. EWIN L. DAVIS-Resumed.

The CHAIRMAN. For those who were not here at the last hearing, I will say that Mr. Davis appeared before the committee on last Friday and made a statement in regard to the provisions in the German treaty affecting differential tonnage. He did not complete his statement, and we asked him to continue to-day.

Representative DAVIS. In that connection, for the benefit of you gentlemen who were not here Friday, I desire to be permitted to say that I did not appear at my own request or instance, because I never thought of making any such request, but an invitation came to me from the committee, I presume at the suggestion of Senator Robinson. The CHAIRMAN. Yes. Judge Davis is a Member of the House, and he was asked by Senator Robinson.

Representative DAVIS. As there are a number of members of the committee here to-day who were not here the other day, and in order to get the connection, I wish to state that I had previously explained the history of the experience of this country and of other countries in pursuing a policy of discriminating duties, and had called attention to the fact that practically every maritime nation has at one time or another in the past tried out such a policy, yet all of them abandoned that policy many, many years ago, and that there has been no effort to return to such a policy since 1872, when France undertook such a policy and became involved in such a warfare of reprisals and methods, that after a year or so she was compelled to abandon it; and with the further exception that our tariff acts since 1890 have contained provisions looking to that end, which have been inoperative and ineffective because, by reason of our treaties with the various maritime nations, they could not be put into force and effect.

Senator MCCORMICK. May I interrupt you there, Representative Davis?

Representative DAVIS. Certainly.