Mr. MORGAN. What I had particularly in mind in that portion of my statement was that the Maritime Commission, in its last annual report, said that it was doing a great deal of work on the post-war shipping problems, and that when it was completed it would report to this committee, or to the Congress.

Mr. CHURCH. A study?

Mr. MORGAN. A study.

Mr. CHURCH. And that is the purpose under the Merchant Marine Act of 1936?

Mr. MORGAN. Yes. I assume that that study is not yet complete. Mr. CHURCH. When do you anticipate that that study will be available sufficiently for you, in fairness to your clients, to present a proper bill?

Mr. MORGAN. There is another source of information that I think we all hope will be very helpful, and that is the Harvard study. The CHAIRMAN. That will probably not be available until about June, I think.

Mr. MORGAN. I had understood that a preliminary report might be made this month.

The CHAIRMAN. Is there anyone from the Maritime Commission present who can advise me about that?

Mr. R. E. ANDERSON (Director, Division of Finance, U. S. Maritime Commission). I think the study referred to is the trade route study. Mr. CHURCH. What do you mean by the Harvard study? Who is doing that?

Mr. MORGAN. I understand that the Harvard Business School is doing it for the Maritime Commission and the Navy Department. Mr. CHURCH. Is the industry acquainted with the professors? Mr. MORGAN. I understand so; yes. The men that have been engaged in the study have called on a great many of the companies in the industry and have asked for information which has been given to them.

Mr. CHURCH. Well, is it in the nature of a group of professors, or a class? Is it in preparation for a master's degree, or what?

The CHAIRMAN. It was requested jointly by the Maritime Commission and the Navy Department at a suggestion of members of this committee, and is being made by the Harvard Business School, I think. I have met some of the gentlemen who are connected with it, simply through their coming in and getting information. I could not give their names now. Possibly Mr. Herter may know something about it.

Mr. HERTER. A man named Mr. Cullerton is chairman of the research group. As I understand it, the contract calls for a report on the 1st of June, the original contract. I am told that there is a chance that that will be ready prior to that date.

The CHAIRMAN. I know they have been very diligent.

Mr. HERTER. They are unwilling to pin themselves down to a day. The CHAIRMAN. Does that give you the information you want?' Mr. CHURCH. Other than Mr. Cullerton, are you familiar with the personnel that is directing it or working on it?

Mr. MORGAN. No; I am not.

Mr. CHURCH. Do you know Mr. Cullerton?

Mr. MORGAN. No; I do not.

Mr. CHURCH. Did any of this group interview your industry?

Mr. MORGAN. My industry, yes; but they have not consulted with me. They have consulted with my principals.

Mr. CHURCH. They apparently will get the advantage of these hearings, though, before they are ready on June 1?

Mr. MORGAN. I presume so, sir.

Mr. CHURCH. Have you any hope of their ability to produce a solution, a proper amendment to the act of 1936?

Mr. MORGAN. Well, they have done some very valuable other economic studies, I am advised. I hope that they will have some helpful information, Mr. Church.

Mr. CHURCH. Mr. Chairman, I understand Mr. Herter has a list, and therefore I would like to have that list go in here.

Mr. HERTER. Mr. Chairman, I think that should properly come from the Maritime Commission. As I understand it, a preliminary report was made to the Maritime Commission in which the personnel of the full research staff was given.

The CHAIRMAN. Will you get that and put it in the record?

Mr. HERTER. I received a copy of it from Mr. Keller, of the Maritime Commission.

The CHAIRMAN. Mr. Anderson, will you supply that and have a copy sent to Mr. Church?

Mr. ANDERSON. I am not acquainted with what is referred to. If there is a copy, yes.

The CHAIRMAN. The Chair will undertake to secure the names of the staff and give what information he can about that. The clerk will please make a note that we want to supply a list of the Harvard Business School research staff to Mr. Church.

(The information requested was subsequently given Mr. Church.) Mr. CHURCH. Now, Mr. Chairman, I would like to give Mr. Morgan a little encouragement here to prepare the best sort of bill or amendment that he believes will satisfy his group. At the same time, Mr. Morgan, is it not fair to ask you to keep in mind the first paragraph of the 1936 act? Your philosophy agrees with that, does it not?

Mr. MORGAN. I do not think there is any question about that, sir. I do not see how it could be otherwise.

The CHAIRMAN. Any further questions?

Mr. CHURCH. What percentage of the trade generally has been carried on by your group? How much of the commerce has been carried on by your group?

Mr. MORGAN. I do not have cargo statistics available. I have seen figures.

Mr. CHURCH. You are talking about these 16 older steamship companies, is that right?

Mr. MORGAN. Yes, sir. I would not have, broken down, the proportion of business that was done by our particular owners. I have seen, and I believe it is in both the Economic Survey and the Economic Survey of the Coastal and Inter-Coastal Trades, some tonnage figures showing the comparison of the domestic trade to the foreign trade, and the domestic is, of course, very much more substantial.

Mr. CHURCH. And your shipping companies have both?
Mr. MORGAN. Our companies have both.

Mr. CHURCH. Is it a third of the total?

Mr. MORGAN. I could not estimate, Mr. Church. that figure for you.

I will try to get

The CHAIRMAN. If you will do that, and supply it for the record and send Mr. Church a copy, we will appreciate it.

Mr. MORGAN. I will try to do that.

Mr. CHURCH. In your opinion, is it the subsidized or the unsubsidized that encourages and increases the commerce of the United States or the world?

Mr. MORGAN. I think they both do that. I think they both contribute, and certainly they both are working to develop the commerce of the world.

Mr. CHURCH. There is one element that encourages it. What is it? Is it the possibility of making a profit?

Mr. MORGAN. Undoubtedly that is the element that keeps all of us engaged, I think.

Mr. CHURCH. And then when you come to restrictions, that begins to drop, is that correct?

Mr. MORGAN. We feel that those restrictions limit our opportunity to engage profitably in business.

Mr. CHURCH. Do you believe the bill that is before us is in keeping with the spirit of section 1, paragraph 1, of the '36 act, or do you believe it would get away from it?

Mr. MORGAN. We do not think, if these ships are going to be sold for use here and there, that you can build up the American merchant marine. We think the ships have got to have opportunity to go where there are earning possibilities.

Mr. CHURCH. In other words, there has to be an over-all profit for everyone in order to participate by any group?

Mr. MORGAN. That is what we strongly believe.

Mr. CHURCH. Do you think this bill that you will prepare will be along those lines, or can be along those lines?

Mr. MORGAN. It will have to be along those lines, Mr. Church. Mr. CHURCH. You spoke of various forms of subsidy contracts and agreements, and yet your clients are not dealing with subsidies, mostly. Have you had those to study?

Mr. MORGAN. No; I have not. I understand that there is a compilation now being put together by the Commission, and I know that I had a number of others are anxious to see it, because it will throw considerable light on the question.

Mr. CHURCH. The members of the committee have been furnished with some of those. That is the reason I asked you awhile ago. You are going to have some time to devote to this matter, are you

not?

Mr. MORGAN. Yes, sir.

Mr. CHURCH. I think that is one of the things you should be furnished with by the Commission, the numerous different kinds of subsidy agreements, and all of that.

The CHAIRMAN. I am sure the Commission will furnish the gentleman with anything and everything they have available. If they will not do it, let them say so now, or ever after hold their peace.

Mr. MANSFIELD. Mr. Morgan, you represent approximately 2,000,000 dead-weight tons of our merchant marine?

Mr. MORGAN. Pre-war.

Mr. MANSFIELD. What was the total of American tonnage, to your knowledge?

Mr. MORGAN. Eight to ten million, or eleven million.

Mr. MANSFIELD. You do not know to what extent the other seven or eight million availed themselves of the subsidies, do you?

Mr. MORGAN. Yes, sir; those figures are available. I have figures for various periods, Mr. Mansfield, on the tonnages of the subsidized operators. On September 30, 1939, there were 141 ships that had been approved for operating differential subsidies, of a gross tonnage of 1,027,000 tons.

Mr. MANSFIELD. Just a little over a million tons?

Mr. MORGAN. Yes, sir.

Mr. MANSFIELD. Out of eight or ten million, or eleven million did you say was the total?

Mr. MORGAN. Yes, sir.

Mr. MANSFIELD. Tankers owned and operated by the oil companies are not eligible, are they?

Mr. MORGAN. I think in some instances they are eligible, but no operating subsidies have ever been extended to them.

The CHAIRMAN. Anything else, Mr. Mansfield?

Mr. MANSFIELD. No.

Mr. BONNER. In the negotiations, trying to reach a solution between your group and, I will call it, the other group, did you offer a proposal to them of what would be a fair solution, or did they offer a proposal to you of what would be a fair solution of this question?

be

Mr. MORGAN. Well, sir, we told them what we thought it would

Mr. BONNER. Wait a minute, before you answer. If you did, I would like to see a copy of your proposal and I would like to see a copy of their proposal.

Mr. MORGAN. We made no proposal. We have had a number of discussions.

Mr. BONNER. You would write out what you think would be a fair proposal, and they could write out what they thought would be a fair proposal. You made the proposal between you?

Mr. MORGAN. In oral discussions; yes, sir.

Mr. BONNER. Could you give us that? I would like to have it. The CHAIRMAN. I understand he is going to do better than that. Mr. BONNER. I was trying to get the two views and lay them as a comparison.

We

Mr. MORGAN. I tried to express our view to the committee. advanced it to the other group with every conviction that it was a fair proposal.

Mr. BONNER. And then they advanced you an idea?

Mr. MORGAN. Well, I would rather let them tell you what they think is fair.

Mr. BONNER. Will you insert here in the record, at your convenience, what you thought was a fair proposal?

Mr. MORGAN. Yes, sir; I will be glad to do that.

Mr. BONNER. I am going to ask the other side the same thing.
Mr. MORGAN. I will be glad to do that.

(The information was not furnished for the record.)

Mr. CHURCH. On the first part of your statement you mentioned' that the United States Government, in cooperation with the Governments of Belgium, the Netherlands, Great Britain, France, and so on, have entered into an agreement extending until 6 months after the

cessation of hostilities. It provides that all merchant shipping_will be operated under the joint control of these Governments. Thus they will not be operated for private account.

Now, it is true that that agreement appears-underlining "appears"-to contemplate possible restoration to private operation at an early date, but the fact remains that any ships bought by a citizen today would immediately be taken for use by this Government. That is merely a brief summary of your conclusion of what that agreement does. Have you a copy of the full statement or agreement that is referred to there?

Mr. MORGAN. Oh, yes. That has been published, Mr. Church. Mr. CHURCH. I know it.

Mr. MORGAN. I do not have it with me.

The CHAIRMAN. I think it is in Document 55 (a); is it not?

Mr. CHURCH. I have that here, Mr. Chairman.

The CHAIRMAN. Do you know the page? The page number can be inserted here. I do not mean to insert the document.

page number in the record.

(Page 341 of Committee Doc. 55-a, 78th Cong.)

The CHAIRMAN. Stand aside.

Insert the

Mr. Joseph J. Geary, of the Shipowners Association of the Pacific Coast.

Mr. Ira Ewers (representing certain Alaska companies). Mr. Ewers found it necessary to communicate with the coast for additional information, and will not be here until this afternoon.

The CHAIRMAN. Mr. Parmelee, vice president, Atlantic Gulf & West Indies Lines.

STATEMENT OF L. D. PARMELEE, EXECUTIVE VICE PRESIDENT OF ATLANTIC GULF & WEST INDIES STEAMSHIP LINES AND SUBSIDIARY OPERATING COMPANIES

Mr. PARMELEE. My name is L. D. Parmelee. I hold the position of executive vice president and director of Atlantic Gulf & West Indies Steamship Lines and subsidiary operating companies, including the New York & Porto Rico Steamship Co., New York & Cuba Mail Steamship Co., Agwilines, Inc. (Clyde-Mallory Lines), and Southern Steamship Co. (of which I am a director only).

My office is located at pier 13 East River, New York City.

I am in accord with the general purposes of the proposed bill. I believe that the new fast ships should be sold or chartered to American citizens for operation in both our foreign and domestic trades at prices at which they can be successfully operated in competition with foreigners and on an economically sound basis.

My particular purpose in appearing before this committee stems from our interest in the domestic trade. Agwilines, Inc., commonly known as Clyde-Mallory Lines, has been providing regular commoncarrier service along the Atlantic coast and in the Gulf of Mexico for over a hundred years. The Southern Steamship Co. has furnished a regular coastwise freight service between Philadelphia and Houston since 1914.

I appeared before this committee at the hearing held on June 15, 1944, in connection with H. R. 4486, the predecessor bill. My