Evening star., 1935-06-18
WASTE IS CHARGED
IN SHIP REPORT.
U. S. Ownership and Private
Operation Proposed by
Subsidy Probers.
(Continued From First Page.)

also investigated Oil uAoA SoA"A S'~'o'
said:
private ownership ana operation
of merchant and aerial tranSporta-
ton with Government subsidy has re-
suited in a saturnalia of waste, ineff1-
cheney, unearned exorbitant salaries
and bonuses and other forms of COM
pensation,' corrupting expense ac-
counts, exploitation Of the public by
the sale and manipulation Of stock,
the values of which are largely based
on the hope of profit from robbing
the taxpayer"
Half Of Ships Built.
The whole subsidy program of the
past dozen years, the report explained,
was based on an attempt to build up
q merchant marine. But it stated that
of the 43 mail pay" contracts in ef-
feet under the 1928 JoneS-White act,
only 20 required building of new ships.
OF the 81 ships called for in the con-
tracts, only % have been built.
The report was packed with In
stances in which, it was alleged, COM
panies violated the spirit" of the
contracts to pipe" profits into their
own tills instead of devoting the
money to building up the merchant
marine.
The report said j. P. Grace, presi-
dent of the w. R. Grace & Co., oper-
ator of several Grace lines, together
with banking and other business in
terests, received in 1928 salary, COM
missions and dividends of $971,660.
AS another instance the commit
tee declared that "R. Stanley Dollar
received from his Dollar Steamship
Line and Admiral Oriental Line
S6ss,750 as commission incident to
the purchase of ships from the United
States Government at low prices"
Cites Millions in Profits.
The report said the Admiral ORR
entail Line, with a $500 capitalization,
operated Government ships at
a net profit of S4,640,204 in three
years and five months.
AS another item. the report cited:
1.-The Roosevelt Steamship Co.,
which took its name from Kermit
Roosevelt in 1920, with then out
standing capital of $4,000, made
profits under a lump-sum agreement
from 1881 to 1888, inclusive, amount
ing to $371,987."
Competitive bidding for the mail
pay" contracts was evaded, the re-
port charged, and it quoted w. Irving
Glover, former Second Assistant Post
master General in the Hoover admin
iStration, as saying in connection with
the negotiation of one contract that
ST think it is well to word your ad-
vertisement so that it might fall into
the lap of the Colombian Steamship
Co." The statement was made, the
report said, during an executive meet
ing in which the awarding of con-
tracts was discussed.
Of the results of ship subsidy policy
in general, the Black committee re-
port said:
Responsibility for this country's
failure to secure that which it sought
and for which it was willing to expend
and have expended hundreds Of mil
lions of dollars in taxpayers money
must lie at the door of three classes
of people. First, this burden of costly
failure rests upon the enactment of
any ill-advised compromise law. Sec
ond, upon certain public officials who
fagrantly betrayed their trust and NAL
administered those laws. Third, upon
those individuals who publicly posing
as patriots, prostituted those laws for
their private profit"
Would Limit Profits.
While commenting that 'the history
of marine subsidy in the United States
does not encourage this committee to
believe that such subsidy is likely to
be honestly administered in the
future" the committee nevertheless
recommended limitation of ship opera
tors salaries to $17,50o a year, and
proposed that the Government recap
ture any profits above 6 per cent on
subsidized lines.
After seven weeks deliberation, the
House Merchant Marine Committee
yesterday approved a measure under
which ocean mail subsidies would be
revised and the Government would
pay the difference In costs between
American and foreign ship construc-
tion and operation.
Into the measure, too, was written
a heavy increase in the liability of
ship owners for loss of life at sea.
Committee members said the bill
would be recommended to the House
formally next week and probably a
o+ol1y 30
legislation to be brought promptly to
the floor.
A new f1ve-man Federal board, the
United States Maritime Authority
would be set up under the bill to foster
a merchant marine which would be:
Able to carry all domestic water
borne commerce and at least half the
import and export trade.
Could Be Used IN War.
Capable of serving as a naval and
military auxiliary in war or national
emergency.
Composed of vessels built in the
United States and manned with citizen
personnel.
Owned and operated under the
American flag and so regulated as to
assure shippers adequate service and
parity of rates to foreign markets.
The loSs-of-life liability provisions
were inserted unanimously at the re-
quest of Representative Sirovich,
Democrat, of New York. Owners
would be required to carry liability
insurance of $50 for each registered