Evening star., 1935-03-05
COMMITTEES SCAN
SHIP SUBSIDY DATA
Documents Used as Basis
of Roosevelt Request
Are Being Studied.
~ the Associated Press.

Dy the Associated Press.
Two committees of Congress turned
their attention today from the Capitol
to the ship lanes of the high seas as
they prepared to begin a study OF
President RooSevelt's message on the
merchant marine.
They delved into a bulky pile of
documents dispatched from the White
House as evidence to support the
presidential request that the merchant
service be granted a direct subsidy
from the Government
A congressional study of these re-
ports, said Senator Copeland. Demo-
crat, Of New York. chairman of the
Senate Commerce Committee, will be
necessary before legislation can be
drafted.
Documents Outline Problems.
The documents, compiled by spe-
cial departmental committees of the
Government. outline problems OF
maintaining American mail and cargo
services between this. country and the
principal sea cities of the world.
The study is to be made BY both
Senator Copeland's committee and
the House Merchant Marine Commit
tee. headed by Representative Bland,
Democrat. of Virginia.
Senator Copeland said the PreSi-
dents proposal was agreeable.
The Presidents message has recon-
mended an end to the "subterfuge" of
"diSguiSed subsidies"
Text Of Message.
The full text of the Presidents
message follows:
To the Congress of the United
States.
I present to the Congress the
question of whether or not the
United States should have an ade-
quate merchant marine.
To me there are three reasons
for answering this question in the
Affirmative. The first is that in
time of peace subsidies granted by
other nations, shipping combines.
and other restrictive or rebating
methods may we'll be used to the
detriment of American shippers.
The maintenance of fair competi-
ton alone calls for American flag
ships of sufficient tonnage to carry
reasonable portion of our foreign
commerce
Second, in the event of a major
war in which the United States is
not involved, our commerce. in the
absence of an adequate American
merchant marine. might find itself
seriously crippled because of its in
ability to secure bottoms for neu-
tral peaceful foreign trade.
Ships Needed in War.
Third, in the event OF war in
which the United States itself
might be engaged. American flag
ships are obviously needed not only
for naval auxiliaries, but also for
the maintenance of reasonable and
necessary commercial intercourse
with other nations. We should re-
member lessons learned in the last
war.
In many instances in our history
the Congress has provided for vari-
Gus kinds of disguised subsidies to
American shipping. In recent years
the Congress has provided this aid
in the form of lending money at
low rates of interest to American
shipping companies for the pur-
pose of building new ships for
foreign trade. II has, in addition,
appropriated large annual sums
under the guise of payments for
ocean mail contracts
This lending of money for ship
building has in practice been a
failure. Few ships have been built
and many difficulties have arisen
over the repayment of the loans.
Similar difficulties have attended
the granting of ocean mail con-
tracts. The Government today is
paying annually about $3O,000,000
for the carrying of mails which
would cost, under normal ocean
rate, only 100000. The differ
ence. $27.000,o00. is subsidy, and
nothing but a subsidy But given
under this disguised form it is an
unsatisfactory and not an honest
way of providing the aid that
Government ought to give to
shipping.
I propose that we end this sub
terfuge. If the Congress decides
that it will maintain reasonably
adequate American merchant ma
rine I believe that it can we'll
afford honestly to call subsidy
by its right name.
Approached in this way a sub
sidy amounts to a comparatively
simple thing. 1t must be based
upon providing for American
shipping Government aid to make
up the differential between Amer
tcan and foreign shipping costs.
1t should cover first the difference
in the cost of building ships; sec
ond, the difference in the cost Of
oneratinp shins and finally 1t