OCEAN MAIL CONTRACTS examine into the contracts, but the expert is not able to tell for how much the Government is going to be obligated each and every year for the next 10 years on account of these shipping contracts. * * * Mr. MCKELLAR. Mr. President, it is a fact that Mr. Nicolson, who is a very great expert, has gone into this matter very carefully, and some of the facts which he submits, and which have not been denied, and can not be denied, show a perfectly astounding situation. For instance, the Shipping Board is shown to have sold a ship to a company for, say, $40,000, and then immediately entered into a mail contract by which it would pay to that very company sometimes $120,000, sometimes $300,000, several times more than the ship cost, probably making a very fine return for the shipowners who got it. Mr. NORRIS. Mr. President Mr. MCKELLAR. If the Senator will let me finish, the Postmaster General has to pay these subsidies; and surely the poor people of the country who use the parcel post ought not to be required, through taxation-because that is what it means-to have their parcels taxed for the purpose of paying these great ship bounties and ship subsidies. * Mr. MOSES. Mr. President, this testimony is all ex parte. If the investigation which the Senator from Tennessee is seeking, and with which I will cooperate, can be brought about, we will find out all of these things. This, however, is going far afield from the question of asking the Postmaster General not to press his demand for additional rates on parcel post. Mr. NORRIS. I should like to say, in answer to the suggestion made by the Senator from Tennessee, that I do not think it is going far afield. Something of this kind must be called to the attention of the Senate and the country, or the Postmaster General, who is carrying out the law of Congress in giving these enormous subsidies to other branches of the Post Office Department, will carry out his intention of picking out the parcel post as one that he is going to put out of business without doing anything to interefere with the subsidies in all these other lines that go away beyond the subsidy that comes to the parcel post. So far as I know, no move has been made to prevent the carrying out of these subsidies. I think the law was bad when it was passed; but we have the law, and the Postmaster General is carrying it out. Unless, however, the Senator from Tennessee or some other Senator calls attention to these enormous subsidies that are being paid to the millionaire shipowners, we shall not be able to have anything done here to save the poor people who have to patronize the parcel post. If the Senator will permit me just a word more- Mr. NORRIS. I remember when this law was passed, giving to the Postmaster General the authority that he is now trying to exercise. On the floor of the Senate I called attention then to what would happen some day if we passed that law; and it is here now. I called attention then to the fact that there would come a time when some Postmaster General would undertake to interfere with the parcel-post business in the very way that this law gives him the authority to do, and at the time I was laughed at. Mr. MCKELLAR. No; the Senator was not laughed at; but I will tell him what happened. I was one of those on the floor at the time, and I took part in the colloquy. The Senator from New Hampshire [Mr. Moses] was another; and this is what happened: The Senator did take that position at that time, and very properly so; but up to that time, which I think was in 1927, no Postmaster General had done anything except to make some slight corrections in measurements of receptacles, and things of that sort; some small matter. Both the Senator from New Hampshire and I took the position that that was all that the measure was intended to do; that it was not intended in any way to confer upon the Postmaster General or the Interstate Commerce Commission power to increase the rates generally. Mr. MOSES. No; Mr. President. Mr. MCKELLAR. I know I did, and I thought the Senator from New Hampshire did. Mr. MOSES. No; I did not go that far Mr. MCKELLAR. If the Senator did not go that far, I take his word for it. * Mr. FLETCHER. Mr. President, in the discussion of this matter the remarks this morning went very much afield, perhaps, particularly when the subject of postal contracts was alluded to by the Senator from Nebraska [Mr. Norris], the Senator from Alabama [Mr. Black], and the Senator from Utah [Mr. King]. We had quite a discussion of that subject on December 20, and having had some part in it then, I feel like saying something at this time by way of attempting to be fair and just to the Post Office Department and the Postmaster General and all concerned, and laying some more facts in that connection before the Senate. I have full confidence in Mr. Nicolson's article published as a Senate document. I think it is substantially correct. There has been an attempt to meet it by a statement from one of the commissioners published in the CONGRESSIONAL RECORD, and he has replied very explicitly, as will be found on page 4490 of the RECORD of February 9. I would invite the attention of Senators to Mr. Nicolson's article inserted in the RECORD at that time by the Senator from Tennessee [Mr. McKellar]. One of the points made on the 20th of December was that the Shipping Board had sacrificed ships at almost nominal prices without requiring any replacement, and that without any condition it had made contracts that the lines were to be operated for five years, or something like that, without requiring any replacement whatever. I understand the present Postmaster General has made no contract at this time, under the authority of the merchant marine act of 1928, which does not require replacement and other vessels to be built by the lines holding postal contracts. I have here a statement showing the awards under the provisions of the merchant marine act of 1928 for carrying foreign mails. It is noted that this statement shows the number and estimated cost of new vessels required, vessels required conditionally, and remodeling SD-71-3-VOL 15— -54 or reconstruction of vessels required. The estimated cost of these requirements is as follows: New vessels required $230,947,365; vessels required conditionally, $40,750,000; reconstruction, $14,700,644, being a total of $286,398,009 of new construction required by reason of postal contracts and the aid furnished to shipbuilders and ship operators in connection with with these postal contracts. Mr. KING. Mr. President, will the Senator from Florida yield to me in order that I may ask a question for information? The PRESIDING OFFICER. Does the Senator from Florida yield to the Senator from Utah? Mr. FLETCHER. I yield. Mr. KING. I did not hear the beginning of the statement made by the Senator. Does the Senator state that contracts are now in esse which do not require the construction of new ships? Mr. FLETCHER. Oh, yes; sales of ships were made without requiring any reconstruction, and the lines that purchased the ships were awarded mail contracts without any requirement of reconstruction. That is one thing we criticized on December 20. Mr. KING. Contracts have been entered into and subsidies granted, for instance, to the Dollar Line. That line will have received in 10 years subsidies amounting to between forty-five and fifty million dollars? Mr. FLETCHER. Precisely. Mr. KING. Those subsidies are given to a line under contracts, according to which no new ships are to be constructed? Mr. FLETCHER. That is quite true; but, as I have said, I want to be fair, and my understanding is and my information is that the present Postmaster General has awarded no mail contracts which did not require both new construction and reconditioning. In other words, the department has got away from the practice that was indulged in for some years, and in many instances where, under contracts awarded by the previous administration, no construction was specifically required, contractors have actually built new vessels and remodeled old vessels. That is the present situation, as I understand. REFERENCES TO THE NEW DOLLAR VESSELS Mr. COPELAND. Mr. President, will the Senator from Florida yield to me? Mr. FLETCHER. I yield to the Senator from New York. Mr. COPELAND. I do not think the statement made by the Senator from Utah [Mr. King] is quite fair. As to the Dollar Line, I know I had an invitation in my mail a day or two ago to attend the launching of another large ship, the second one within a very short time, and, as I understand, they are spending a million dollars in the building of ships. Mr. FLETCHER. That may be in pursuance of a new contract, I will say to the Senator. Mr. KING. Mr. President, may I say to the Senator there are three contracts between the Dollar Line and the Government, and under the first two contracts the Dollar Line is receiving $27,000,000 in subsidies? I have a statement from Mr. Nicolson, which I have compared with the data I have, and if the Senator will allow me, I should like to refer to it. Mr. FLETCHER. I yield to the Senator from Utah. Mr. KING. In his letter Mr. Nicolson criticizes Mr. Plummer's attempt to discredit his statement. In the attempt to discredit the Senate document in its reference to two contracts given the Robert Dollars for their two lines to Manila (under which they will receive $27,000,000, and yet neither contract requires the building of a single vessel), the commission says the fact is they are building two fine, large vessels, meaning, of course, they are doing so incident to these contracts the Senate document criticized; and he applies the $27,000,000 to the construction— handicap the owners suffer-in respect to these vessels, which handicap he puts at $9,000,000, wanting to justify the $27,000,000 to that extent. The vice chairman Speaking of Mr. Plummer, who attempted to criticize Mr. Nicolson and to discredit his statement The vice chairman fails to mention that the two vessels are being built for the postal route (the round-the-world service) covered by a third contract, which contract is not mentioned at all in the criticism of the Senate document. That is the document which was presented written by Mr. Nicolson. Mr. FLETCHER. That is what I supposed; that was my impression. Mr. KING. Mr. Nicolson continues: Under this third contract the Dollars are receiving $14,000,000 more in addition to the $27,000,000 paid under the two contracts criticized. Of course, that $9,000,000 handicap for the two vessels they are now building are chargeable to this $14,000,000 subsidy, thus leaving the $27,000,000 untouched and payable under two contracts which, we repeat, do not require any new vessels to be built, thus leaving the Senate document intact and true. Mr. FLETCHER. I understood that to be the situation, and, as I have stated, the practice followed some time ago was to let these contracts without requiring new vessels to be constructed; but I understand the present Postmaster General does not follow that practice. Mr. COPELAND. Mr. President, will the Senator yield? Mr. FLETCHER. Mr. President, I do not want to take the time of the Senate when we have under consideration the appropriation bill, but I will yield if the Senator from New York will not take much time. Mr. COPELAND. I merely want to say that the Postmaster General, in my opinion, has been acting in good faith in administering this law. It is true, as the Senator from Florida has stated, that certain lines which have not had building contracts in the past have been given these mail subsidies, but under the policy now being followed by the Postmaster General, where contracts are given in the form of mail subsidies there must be a building program associated with them. Mr. FLETCHER. Yes; I have stated what the attitude is, as I understand it. Now, Mr. President, I offer for the Record a list of the contracts let under the merchant marine act of 1928 and ask to have them printed. The VICE PRESIDENT. Without objection, the list will be printed in the Record. The list is as follows: |