did not want or could not carry. * * * And I think that anything that would establish a set-up of a single-rate structure would put 60 per cent. of the tonnage in the trade in a very hazardous and perhaps impossible position to operate.' Record of Investigation, pp. 3410-3411.) At the time of the proposal to establish a Code of Fair Competition for the shipping industry, the situation in the intercoastal trade received extensive study by Mr. William H. Davis, a distinguished lawyer, then Deputy Administrator of the N. R. A. in charge of Shipping. As a result of that study, Mr. Davis made public announcement of his conviction that any regulation of water carriers operating in the intercoastal trade must provide for differentials for the varying services. He stated: *** * * But I do say that you must in some form reintroduce into the intercoastal trade a competitive condition that will, either by agreement or by the pressure of necessity, develop a differential for different services. I do not care whether it is agreed on beforehand by rational men who know the value of their services or whether the industry is forced to come to agreement about it by selling their service for what it is worth in order to live. But unless I am wholly mistaken, and if I am I want to be corrected, it is necessary, to solve the problems of that branch of the industry, that that idea should be introduced some way.' (Speech before the Propeller Club of the United States, Port of New York, December 14, 1933.) [Italics ours.] IV. THE PRINCIPLE OF CHEAPER RATES FOR CHEAPER TYPES OF SERVICE SHOULD NOT BE LEFT TO IMPLICATION BUT SHOULD BE EXPRESSLY DE CLARED In the nature of things, the Authority to be set up under the Bill will have to rely for information and suggestion upon the industry itself. The powerful lines have been in a position in the past, and will be in a position in the future, to spend the time and effort necessary for a continuous and persistent presentation of their point of view and of their special interests. The smaller carriers and the often unorganized shipping public are not in a position to do so. In the light of past experience, there is just cause for concern that, if not accompanied by further safeguards, the new rate fixing power will be exercised to the exclusive advantage of the powerful lines maintaining superior services, causing the elimination of their more modest competitors, to the detriment of the public interest. This can only be avoided by enacting the express proviso suggested herein. Dated New York, April 21, 1935. HAROLD S. DEMING, LASZLO KORMENDI, Counsel. SHEPARD STEAMSHIP Co. The CHAIRMAN. Mr. Shepard, I now want to ask you a question. Have you seen the committee print with the explanation of the different sections as made by the Maritime Commission on page 40? I do not think you have quite answered the explanation or the criticism that was made by the Commission about the importance of filing these rates, both maximum and minimum, on 10 days' notice. The charge made is: They may charge different rates from different shippers for the same services, provided such rates are lower than the maximum rates, and may increase their actual rates without notice provided the increased rates are not higher than the maximum rates. These privileges and the lack of publicity lend themselves to secret rebates, trading, and discrimination. Do you disagree with that? Mr. SHEPARD. Yes, sir; I decidedly do. I should like permission, if I may, to furnish a short brief in refuting that statement. The CHAIRMAN. I think you should, because this bill that we have before us is the bill which was suggested to us by the Maritime Commission. These explanations included in the paper we have before us are the explanations provided by the Commission, and here this definite charge is made that the present arrangement lends itself to secret rebates, trading and discrimination. So if you care to furnish it to us, we shall be glad to have your brief on that particular subject. Mr. SHEPARD. Yes. I shall appreciate the opportunity to present it. Senator THOMAS. Mr. Shepard, you made reference to section 4 of the Transportation Act. There is nothing in section 43 of this bill which would affect the law as it stands under section 4 today, is there? Mr. SHEPARD. Section 4 is the part of the Transportation Act covering rail carriers. There is nothing in this bill that would have any effect on that. Senator THOMAS. You used it, though, as a reference, did you not, in your argument? Mr. SHEPARD. I referred to it to point out the necessity for minimum rate power in the case of the railroads, which necessity is absent in the case of water carriers, The CHAIRMAN. For the benefit of the committee I wish to call attention to the Economic Survey of the American Merchant Marine, prepared by the United States Maritime Commission. It will be recalled that the chairman, Mr. Joseph P. Kennedy, in his letter of transmittal said: It should be pointed out that Commissioner Moran feels that there should be no amendments to the 1936 act, as the Commission suggests in the survey, until it has had a longer period of experience in the administration of such act. At the conclusion of the last hearing I wrote to Commissioner Moran, because I knew that several members of the committee were anxious to hear him, and I certainly have been anxious to hear him. The letter which I wrote to Commissioner Moran is as follows: Hon. EDWARD C. MORAN, Jr., Commissioner, United States Maritime Commission, DECEMBER 8, 1937. Washington, D. C. MY DEAR COMMISSIONER MORAN: This morning in making a statement to the Commerce Committee, Chairman Kennedy stated that you were not in full accord with the recommendations of the remaining members of the Board. Mr. Kennedy made a strong appeal for modification of existing law. Naturally we are anxious to hear all sides of the question. We would be happy to have you express your views. Would it be agreeable to you to appear before the Commerce Committee on Friday morning of this week at 11 o'clock? If so, I shall notify them so all the members of the committee may be present. With kind personal regards, Cordially, ROYAL S. Copeland. The reply from Commissioner Moran is as follows: Hon. ROYAL S. COPELAND, UNITED STATES MARITIME COMMISSION, Chairman, Committee on Commerce, United States Senate, Washington, D. C. MY DEAR SENATOR: I appreciate your kindness and courtesy in extending to me an invitation, on behalf of the Committee on Commerce, United States Senate, to appear before your committee and express my views concerning the proposed amendments to the Merchant Marine Act, 1936. The statement of Chairman Kennedy before your committee was full and complete, and was the result of a painstaking study of the shipping problem. Since my views, generally speaking, are set forth in the Economic Survey of the American Merchant Marine and letter of transmittal submitted therewith, sent to Congress by the United States Maritime Commission, I feel there is nothing further to add, and therefore I do not plan to accept your invitation to appear before your committee. With kind personal regards, I remain, EDWARD C. MORAN, Jr., Commissioner. We came together this morning particularly to hear witnesses who care to speak regarding the labor recommendations to the Maritime Commission. I suggest that there be printed in the record at this point the pages from the Economic Survey of the American Merchant Marine, dealing with the subject, Labor, beginning at the bottom of page 43, where the statement is made that labor conditions are deplorable, and up to the subject of Training, but not including it, near the top of page 50. (The matter referred to, being under the heading Labor, in the Economic Survey of the American Merchant Marine, prepared by the United States Maritime Commission, is printed in the record, as follows:) LABOR One of the most difficult problems with which the Commission is confronted today is that of seagoing personnel, Labor conditions in the American merchant marine are deplorable. Unless something is done to reduce interunion friction, to increase the efficiency of our crews, and to restore order and discipline upon our ships, all Government efforts to develop a strong American fleet will be futile. A merchant marine built upon inadequate and unsatisfactory personnel is little better than no merchant marine at all. Labor relations in the shipping industry have long been characterized by an unenlightened attitude on the part of both employer and employee. The employer, for his part, has in the past imposed long hours, low wages, and cramped quarters. The employee, meanwhile, has abused his employment in a manner that would not be tolerated in any other industry. The result of these things has been that shipping, despite the marvelous technical progress of the past century, has remained in a backward state so far as labor relations are concerned. The Commission found, in approaching the labor problem, little information upon which to proceed. There are available practically no statistics relating to the employment of seamen on ocean-going vessels. The earnings of seamen, their conditions of labor, the average length of service, and similar matters affecting seafaring men seem to have been overlooked. The Commission was forced to undertake some rather unusual research in order to establish a proper basis for its study of the labor problem. It was found, first off, that no one knew exactly how many men were employed on our subsidized vessels. The study revealed that there is a total of approximately 10,000 men employed on the 155 vessels now under subsidy contracts. The next step, in the determination of conditions among seamen, was to inquire into wages and earnings. Although the Federal Government now publishes a table which compares American wages with those paid on foreign ships, these figures do not provide a proper comparison. For one thing, they are distorted by currency fluctuations; for another, they do not take into account subsistence, security, pensions, or the purchasing power of the seaman's wages in his home country. It was accordingly necessary to work up a mass of original data in order to arrive at a true conception of the conditions of American seamen, both as compared with foreign seamen and with domestic workers ashore. To make up for statistical deficiencies, and to get the very latest information about American seamen, the Commission arranged with a private agency in New York to interview 1,000 men. Interviews were secured in various parts of the city to secure as large a spread as possible. The replies reveal some interesting facts about the men who man our vessels. The men interviewed have been at sea anywhere from 1 month to 40 years. They come preponderantly from seaboard States. The majority are sailing in capacities below what they consider themselves qualified by experience and licensing to fill. Most of the men are single; practically none have bank accounts; few vote. 32437-37-pt. 2-3 An interesting part of this study has to do with continuity of employment: Almost without exception the replies indicate an excessive turn-over. Although practically all of the men regard their occupation as permanent, few stay long on one vessel. Thus many seamen report 8 and 10 years of service, of which perhaps not more than 4 months have been spent on one ship or even in one line. The replies also reveal that even during prosperous times the men spend an average of several weeks a year "on the beach," or unemployed. The only way to ascertain working conditions, it was decided, was to give the men an opportunity to lay their grievances before the Commission. Accordingly, hearings were held at various ports on the three coasts, at which representatives of both labor and employers appeared to discuss conditions abord American vessels. The regional hearings were followed by a general hearing held in Washington. In all, 185 witnesses were heard. In addition to holding hearings, members of the Commission went aboard more than 40 vessels in order to see for themselves the conditions under which our seamen were working. They found that in many cases the complaints of the men were justified. Quarters were found to be crowded, insanitary, and poorly ventilated. The result was a series of orders for the remodeling of crew quarters on subsidized vessels that should go a long way toward removing dissatisfaction with the living conditions aboard ship. It must be recognized, of course, that it is exceedingly difficult and expensive to attempt to remodel old vessels to meet the needs of today. New vessels being designed by the Commission contain advanced accommodations, including a recreation room for the use of men on their watch below. Adequate messrooms also will be provided for all members of the crew, men will be berthed 3 and 4 to a room on cargo vessels and not more than 10 to a room on passenger ships. Improved heating and ventilating systems will be installed, decks and crew quarters will be covered with moisture-proof material, and bulkheads insulated. safety measure, the quarters will be placed aft of the collision bulkhead. These improvements will be incorporated in all new vessels and are being effected, so far as practicable, on existing vessels. As a The Commission has also prescribed minimum-wage scales for subsidized ships and is preparing additional rules with regard to manning scales and working con ditions. The Commission further has provided for vacations for both licensed and unlicensed personnel. In making its recommendations, the Commission has disclaimed any attempt to abridge the rights of employers and employees to establish higher wages, increased manning scales, and better working conditions by collective bargaining or otherwise. Spokesmen for the ship operators have agreed that minimum standards will not be regarded by them as maximum standards and that the employees' right of bargaining collectively will not be impaired by the Commission's action. Despite the efforts made by the Commission to give American seamen on subsidized vessels superior working conditions and decent wages, there is little likelihood of an early solution of the serious labor situation with which we are confronted. Conditions in the American merchant marine are disgraceful. Order and discipline have in many cases disappeared. Passengers complain of insolent treatment. Vessels have been delayed by the frequent use of the "sit down". and "quickie." Such conditions must be remedied and remedied forthwith. With conditions remaining as they are today it is only a question of time before disgusted shippers and worried travelers turn to the vessels of our competitors. Shippers and travelers realize that disorderly vessels are likely to be unsafe vessels. Safety at sea is based upon order and discipline as much as, if not more than, the quality of equipment. "Personnel is to material," said the great Nelson, "as three is to one." The man with a rifle makes the army; good forecastle hands make the ship. The sea is no place for divided authority. When a man puts foot on the deck of a ship he becomes part of a disciplined organism subject to the navigation laws of the United States. Seamen must recognize that the nature of their calling, which gives them a uniuqe status under the law, also imposes upon them obligations not common to shore occupations. It should be admitted in any discussion of the labor problem that the shipowners themselves are in no small measure responsible for the present unfortunate situation. During the war thousands of fine young Americans were brought from every section of the country to man the vessels acquired by the Shipping Board. They learned quickly, demonstrating that American seamer, given decent working conditions and proper encouragement, are the equal of any. Then came the era of liquidation, when the Government began to withdraw from shipping. Lines were one by one discontinued or turned over to private enterprises. Wages fell and working conditions grew steadily worse until, at the depth of the depression, some American seamen were receiving as little as $25 a month, living under wretched conditions, eating unpalatable food, and working 12 hours or more a day. "The result of such conditions was bound to be disastrous. Many of our young men left the sea, never to return. Questionable elements filtered into the ranks of our seafarers. The men grew bitter and desperate. An explosion was bound to occur. The shipping industry in now paying for its shortsightedness in repressing labor for so many years. Some of the operators who paid low wages during the depression were at the same time receiving substantial subsidies from the Government for the preservation of an American standard of living. By denying their employees the right to organize, shipowners created a condition favorable to un-American doctrine. For 11 years owners refused even to answer requests of their workers for collective agreements. When the seamen finally did organize and forced the owners to hear their demands, these demands were naturally distorted by the repressions of the preceding years. Seamen and operator alike must not lose sight of the fact that shipping is primarily an international business. Losses incurred by domestic enterprise as a result of labor difficulties may be made up later. The situation with respect to shipping is vastly different. The business which American lines are unable to handle is likely to go to our foreign competitors. Some of it may be recovered, but much of it will never come back. The present situation is complicated by conflicts now raging among different unions. The Commission has remained strictly neutral in these conflicts; it has not and will not assist any section of maritime labor at the expense of the others. The Commission's interest is to see that all of our seamen get a square deal and that factionalism between labor unions does not disrupt the country's attempt to rehabilitate our merchant marine. If our attempt to rebuild American shipping is to succeed, the labor situation must be greatly improved. Order and discipline aboard American vessels must be restored; men must learn to abide by their articles, and to obey their officers. Officers must be mindful of their responsibilities. On passenger vessels there must be a new concept of service. The shocking conditions now prevalent aboard our vessels have led to a variety of proposals for the adjudication of labor disputes in the shipping industry. Among these proposals is the suggestion that there be set up in the industry an agency similar to the National Maritime Board in England. That board has been singularly successful in settling disputes of British shipping for over 20 years. Although it is essentially a private agency, composed of representatives of the owners and the men, it has Government support. There has not been a serious disturbance in the British merchant marine since the Maritime Board was established. It is obvious that, were such a plan adopted, it would mark a long step forward in having the "conference table replace the picket line." Any such method would, of course, have the wholehearted support of the Commission. However, the burden of establishing such a board rests upon the shipowners and the unions. The lack of united labor organizations, and the lack of understanding that now exists between the owners and the men, make the early creation of such a board unlikely. For this reason, the Commission has concluded that the establishment of a mediation board similar to that provided in the Railway Labor Act is desirable at this time. The Railway Mediation Board has been conspicuously successful in minimizing labor strife in that field. Under the act, when a labor controversy arises, either or both of the parties may invoke the service of the Mediation Board, or the Board may proffer its services. In the event that mediation fails to produce an agreement, the act provides a method of arbitration which is, however, not compulsory. If the Board is successful in neither mediation nor arbitration, both parties are free to act. However, if the action of either party threatens to deprive the Nation of an essential service, the Board notifies the President of the United States, who may appoint a special fact-finding board. That board is required to investigate the dispute promptly and report to the President within 30 days. During this period, and for 30 days thereafter, the parties are forbidden to alter the employer-employee relationship by strike, lockout, or other action except by mutual agreement. The experience of the railroad industry reveals that the technique employedconferences and delay-is effective not only in eliminating the hasty acts which beget strikes but also in bringing about mutually satisfactory settlements. |