11. New vessels and replacements: A full subsidy should assure replacements, as contractual obligations, and thus assure permanency to our merchant marine in foreign trade. (See letters, p. 48 and p. 53; also chs. 5 and 6 hereof.) Page (a) The tests or factors in vessel accounting by which to measure (b) Contracts made not only include these but greatly exceed all 6 (8) 23 (19) (c) Notwithstanding this, most of the contracts mentioned do (f) "Mutually agree": A provision that new vessels will be built 66 the 12. Modern vessels and equipment contemplated but not required___ (b) The trend in world trade is and has been for finer and faster 23 ཧི (16) 49 (50) 20, 49 (17) (c) The development of motor vessels, Diesel engines, a fac- 20, 49 (12-13) (d) The vessels subsidized include many of the now archaic 19, 20 13. Sales price of vessels sold by the Government: 13 (14) (c) Distinction between cost of construction and market 13 (14) (d) "Postal contracts" to such lines thus became a double subsidy when at maximum rates___. 11, 19 (11) 14. Reservations in contracts: Contracts were modified and extended in radical ways, without complying with legal requirements, on ground that reserved powers authorize them-- (a) Such reservations, if valid, destroy competitive features_- 15. All-American vessels and fleets: The vessels subsidized are, of course, (6) (7) (7) (7) 15 (51) (a) The law requires that new subsidized vessels shall be built (b) But the law has a proviso under which two new vessels of 16 (51) 8, 16 (10) (c) Maximum rates had reference to construction costs in Amer- 16 (11) 15. All-American vessels and fleets, etc.-Continued. (e) Exclusive operation of American vessels: Whether owner of (f) Congressman Davis's references to foreign vessels operated Page (14) (14) 16. Transportation of mails: A true subsidy system does not necessarily (a) The 1928 postal contract law is phrased to exclude all refer- 7 (10) (36) (c) Statement by Postmaster General that such contracts were (d) Certain Senators and Representatives, when the law was (1) 17. Preferential treatment of bidders: (a) Monopoly in bidding-- 4 (3) (b) Competition, in substance, intentionally excluded, though 5 (3) (c) Advertisements for bids were so framed that they favored 5 (d) Reasonable time not given to encourage competition by new 5 (4) (e) Requirements prescribed could be met only by special per sons.. 5 (4) (f) Transportation requirements in our foreign trade not duly 5 (3) (2,36) (g) Debtors to Government not entitled to preference_-. 18. Subsidized services with Philippine Islands: Our relations with the (a) Present subsidies to the Dollar Lines, one from San Fran- 48 (29) (b) A direct route, from San Francisco to Manila, faster by (d) Concurrent with vast subsidies to Dollars, for trans-Pa- 66 (31) 5 (32) (32) 19. Discrimination against South Atlantic ports: The policy of section 8, merchant marine act of 1920, and the express provisions of the 1928 law that these contracts should be distributed so as to equitably serve" the various geographical areas, demanded an equitable award of contracts to South Atlantic ports----- 25, 30 19. Discrimination against South Atlantic ports, etc.-Continued. (b) Letter of John Nicolson, then of the United States Ship- (c) Criticism by Commissioner Plummer of Mr. Nicolson's ac- (e) Savannah, Ga., the only Atlantic port south of Baltimore (f) References to shipping and commerce of Savannah__ (h) Southern ports entitled to benefits though Southern repre- 20. Loans for ship construction: The lower cost of these loans to the (a) Law intended interest rate should not be lower than inter- (b) Loans have, in fact, been made at interest as low as 1% (c) Comments by Senators on Senator Vandenberg's bill, then (d) Article from The Log, introduced by Senator Dill, review- 21. References to earlier acts: (a) Significance of the repeal of section 24, merchant marine 8,9 56 16, 21, 56 (b) Section 24 of the 1920 act clearly authorized subsidizing 16, 21, 56 (c) Ocean mail act, 1891. 22. References to the text of the 1928 law: 19 (a) Full text of Title IV of the merchant marine act of 1928--- (50) (b) Its phraseology indicates transportation contracts only, not subsidies were intended__ 18 (1) (c) Former subsidy provisions expressly repealed by it.. 16 (1) 16 (e) Competitive bidding prescribed by it (secs. 406-407) was in 4 (3) (f) That it was not intended as a subsidy when enacted was OCEAN MAIL CONTRACTS CHAPTER I RELATIVE TO ITEMS IN THE RECORD OF DECEMBER 20, 1930, UNDER THE TITLE: TREASURY AND POST OFFICE APPROPRIATIONS Mr. KING. I want to ask the Senator if the greater part of that appropriation is not a pure subsidy, and is in excess even of the operating expenses of the ships? Mr. Moses. Mr. President, the latter part of that question I can not answer, and I do not think anybody in the Post Office Committee of either House or Senate can answer it. As to the first part of the question, undeniably a certain portion of this sum is in the nature of a subsidy. I have never sought to conceal my view about that, but inasmuch as the Congress has apparently determined that this is the method in which it will undertake to encourage ocean-borne commerce, I accept it, although for myself I would much rather frankly appropriate money for a subsidy, and call it such. Mr. KING. Mr. President, will the Senator let me have the floor for a few minutes? Mr. MOSES. I yield the floor to the Senator. Mr. KING. Mr. President, I have a letter written me by one of the most distinguished Senators upon the floor, one who has perhaps given more attention to merchant-marine problems than any man in public life. I refer to the senior Senator from Florida [Mr. Fletcher]. In that letter he directs my attention to an important publication presented by the Senator from Tennessee [Mr. McKellar] on June 30, 1930, and printed as a public document. The publication is entitled "The Truth About the Postal Contracts." In the letter to which I refer appears: The facts revealed in this Senate document relate to a field with which I am fairly familiar, and the document itself has been carefully examined by me. It is a splendid piece of work, and the author has rendered a fine public service. The abuses not only obviously possible under the present law but which have been actually committed in existing contracts are so flagrant that we should be prompted to review and give consideration to all legislation employing postal contracts as an aid to our merchant marine. I am speaking as a friend of the merchant marine, and it is needless to mention to a colleague that I have been a firm supporter in the Senate for many years in aid of our merchant marine. When we find, for instance, such contracts on the Atlantic as that with the Munson Line, between New York and Buenos Aires, where the company not only received an initial subsidy of many millions in being sold four magnificent vessels for about one million each, which cost the Government over seven million each to build, and is then given a mail contract which will yield it over $13,000,000, and without any obligation whatever to build a single new vessel in return for this munificent bonus from the Public Treasury, and when |