Evening star., 1935-12-30
COPELAND PLANS
SHIP SUBSIDY BILL
Announcement Follows Far
Iey's Call for End of
Present Program.
RzCKCROUND

uuLeS from ISZU, Unen EQD UQS
passed authorizing loans for ship
construction and subsidies in form
of mail contracts: more liberal
legislation enacted in 1928.
Democratic administration at
tackled both air and ship mail sub
sidy set-upS. After Investigations,
President cancelled dirnldiI con-
tracts in February, 1884, turned
job of flying mail oUer to Army:
ne1U Short-term contracts let to
priUdte companies in tollot0iHg May.
Last March 4. President recon-
nlended netO merchant marine Iegis-
ldtion. House subsequently, passed
Bland Copeland bill. but Senate
did not; measure did not conform
to administration ,Uishes.
Merchant marine legislation was
back in the spotlight today as Post
master General Farley. in his an
nual report, called for direct subsidies
to Supplant the present system Of con-
struction loans and operation grants
and Senator Copeland. Democrat. of
New York, announced his intention Of
introducing bills that would embody
this principle and at the same time
terminate existing ocean mail con-
tracts
In the report also, which showed
the previously announced postal sur
plus for the year was $4,964,14e, Far
ley patiently replied to critics with a
defense of the basis on which this
was established.
Brought Fight in Congress.
The move for direct ship subsidies
is a renewal Of that made at the last
session of Congress concurrently with
an investigation o. ocean mail con-
tracts ordered by President Roosevelt
The subsidy program succeeded
only in stirring a fight, however, as
opponents charged that it would open
the Treasury to the shipping trust" !"
Farley said the inquiry saved S946.-
898 and that additional economies
were in prospect as vessels were being
tested to see if they met speed re-
quirements.
Pointing out that last year the
Government expended s29, ,536, 733 for
carrying mail which could have been
handled on a poundage basis for
S3.266.780 the Postmaster General
declared the existing system failure
and said the direct subsidy plan, COW
ering the difference between American
and foreign construction and operat-
ing costs would seem the best So
luton"
Would Authorize Loans.
Copeland asserted "the foreign
service Of the American merchant ma
rine will disappear unless wise action
is taken"
Besides subsidies, Copeland's bill
would permit Reconstruction Finance
Corp. loans to ship owners and set up
a maritime authority to improve ship
ping. 1t also would call for three
watches on American ships ant re-
quire that most of the crews of SUBJ
sidized vessels be American citizens.
While seeing nothing good in the
ocean mail contract system which
was inherited from the Republican
administration, Farley had high praise
of the new airmail set up, revamped
after all the old contracts were can
celed.
He said existing legislation Is sat
isfactory" and eliminates many Of
the abuses that formerly existed. The
airmail cost 1888, ,905.67 last year.
The Postmaster General advocated
an appropriation for starting trans
Atlantic service, but specified no
amount. He forecast that the trans
Pacific service would be so successful
it would hasten the Inauguration of
that spanning the Atlantic.
Farley's defense OF the 1885 surOlus
served also for that If 1934-S12, ,000,-
00O-which critics called "bookkeep-
ing"
The Postmaster General explained
at the outset that the department does
these things: Handles without charge
mail matter for Congress and other
governmental agencies; carries free
reading matter for the blind and news
papers for delivery within the county
Of publication, and carries without
collection at the zone rates Of postage
certain publications entitled under the
law to preferential treatment: pro-
vides quarters and other facilities in
post Office buildings for other govern
mental agencies without compenSa-
tion; pays. in the form of mail con-
tracts, subsidies for the maintenance
of an American merchant marine and
for the promotion and development of
aviation.
Draws on General Funds.
Obviously" the report said, mo
business organization could provide the
money necessary to maintain the
gratuitous service and to pay the sub
sides from its normal business income.
Therefore, the Post Office Department,
OF necessity. drew on the general funds
in the Treasury to make these pay
ments.
The revenues for the fiscal year
were $3.50, 795. .302, while the audited
expenditures, including ship and avia-
ton subsidies, free mail and other
non-postal and adjusted items, were
s696, ,6o3,25 Taking credit for these
non-postal and adjusted items,
amounting to $7o,772, 100, there was
net surplus Of s4,964,143 with respect
to that part of the departments
services which are rendered for hire"
For 1886 Farley estimates revenues
at $670,000 900 and receipts of $780,
900, 900, which would indicate a gross
deficit of $4,000, 900 and-providing
the adjusted items remain at the
same level as this year-a net deficit
of about $20,000.00o. w. L. Slattery.
controller, however, forecasts another
surplus, even though the department
is running into additional expense as
the result of the 4o-hour week The
subsidies for the past year were $S.-
474,738 for airmail and $2S,292,S41
for ocean mail.
The Postmaster General took steps
to head on any move in Congress
to restore the 2-cent rate for nom
local flrst-claSs mail warning this
would unquestionably result In a
large postal deficit" The Scent rate