Evening star., 1937-06-15

mails between the United States and
foreign countries, on established mail
routes.
The holders OF such contracts were
to be paid, not on poundage basis
for the mail carried, but on the basis
of the speed of the ship that carried
the mail and the number of miles that
ship travelled. This was subsidy
under an alias.
In the same act, Congress author
lied the Shipping Board to finance the
cost of building new vessels for pri-
vate owners, by granting long-term
loans at low interest rates. That was
another subsidy under another alias.
l am convinced that the Senators
and members of the House who sup
ported the 1928 act were sincere in
their belief that the mail pay which
amounted to 5000, 900 or S30,000,000
per year, and the low interest bearing
loans, would supply the American
shipping industry with the necessary
capital to build new ships Congress
iedIlHSo 1ully lildI Jul AiSi SiAoAit AooV
was becoming obsolete and that We
must build new ships.
But the 1928 act did not produce
the expected ship requirements. A
few vessels were built-a very few
but great deal of this subsidy, dis
guised as mail pay" was diverted to
the payment of excessive salaries,
bonuses and dividends, to officials and
stockholders of the steamship lines
favored with the mail contracts.
The hearing before the Senate In
vestigating Committee, which was
headed by my able colleague. Senator
Hugo Black of Ala bama, and the in
vestigations carried on under the di-
rection of Postmaster General Farley
demonstrated the necessity for bet
ter plan for Government aid to the
merchant marine. A plan that would
insure the building of the ships now
so badly needed
Roosevelt Called for Action.
President Roosevelt is ship-minded
He has not forgotten the crisis OF
1917, when the cry was for ships and
more ships.
In a special message to Congress
delivered on March 4, 1885, the
President referred to our necessity fol-
merchant marine-not merely tc
serve the needs of our commerce, but
also as naval auxiliary, If We be.
| came involved in another war. He
! commented vigorously upon the fail.
ure of the 1928 act to accomplish the
expected results. He then said.
quote:
This lending of money for ship
building has in practice been a fail
ure. Few ships have been built ano
many difficulties have arisen over the
repayment of the loans. Similar diff
flculties have attended the granting ot
ocean mail contracts The Govern.
ment today is paying annually about
s3O,000,0O0 for the carrying of mail.
which would cost, under normal ocear
rates, only 100000. The difference
S27.O00,000, is subsidy and nothing
but subsidy. But, given under thi,
disguised form, it Is an unsatisfactory
and not an honest way of providing
the aid that Government ought tt
give to shipping.
II propose that We end this subter.
fuge. If the Congress decides that II
will maintain a reasonably adequate
American merchant marine, l be.
lieve that it can well afford honestly
to call a subsidy by its right name"
Saw Need of Subsidy.
The Presidents message referred
to the higher cost of shipbuilding ir
this country and the higher wage.
and living standards enjoyed by ou,
seamen, which makes a subsidy nee.
essary, as I have stated tonight HI
then said:
approached in this way, sub.
sidy amounts to comparatively sim.
Pile thing. 1t must be based upon pro.