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 U.S. CONGRESS. SENATE. COIiC^ITTEE ON 
 COm-'ERCE 
 
 Promotion and maintenance of the American 
 merchant marine
 
 UNIVERSITY OF CALIFORNIA 
 AT LOS ANGELES 
 
 I
 
 Calendar No. 520. 
 
 TH Congress, ) SENATE. j Report 
 
 M ^Session, f 1 No. 573. 
 
 C/.S . e'o! '^^Lc ^.j . '- -^ i- .-r. . :: . ^^<^ '- ' ^f ^ ''^'' ^ <^ ' 1 
 
 PROMOTION AND MAINTENANCE OF IT^^^VMERICAN 
 MERCHANT MARINE. ^/^f., 
 
 May 4, 1920.— Ordered to be p1Snt(^. ^/^ <^^ -^ 
 
 ^ - •■ /Ob * %/ 
 
 Mr. Jones of Washington, from the Committee on Com*clfcrce7Hub- ' 
 mitted the following ^S 
 
 REPORT. 
 
 [To accompany H. R. 10378.1 
 
 The Committee on Commerce, to whom was referred the bill (H. R. 
 10378) to provide for the promotion and maintenance of the Ameri- 
 can merchant marine, to repeal certain emergency legislation, and 
 provide for the disposition, regulation, and use of property acquired 
 thereunder, and for other purposes, having considered the same, 
 report it with an amendment, and as amended recommend its 
 passage. 
 
 For many years the amount of our foreign trade carried in ships 
 flying our flag was constantly growing less. It seemed a hopeless 
 task to make any eftort to remedy the situation. Everyone was in 
 favor of an adeciuate American merchant marhie. Political plat- 
 forms vied with each other in declaring for an American merchant 
 marine, built in American shipyards by American labor, manned 
 by American seamen, flying the American flag and carrying Ameri- 
 can products to every port in the world. This sounded flue, but it 
 did not brhig us a merchant marine. We seemed to be unable to 
 pass any effective legislation, and when the World War began less 
 than 10 per cent of our foreign trade was being carried in American 
 ships. 
 
 The Commerce Committee takes it for granted that every patriotic 
 citizen now wishes to see a merchant marine under the American 
 flag large enough to carry the major part of our own foreign trade 
 and such part of the world's carrying trade as may be commensurate 
 with our wealth, power, and standing among the nations of the world, 
 and that whatever is necessary to bring that about they want done. 
 We need such a fleet, not only for our commercial growth but for 
 the Nation's defense in time of war and tlie stability of domestic 
 industry in time of peace. We have kept before us, in framing the 
 recommendations we make, the supreme need for such a merchant 
 
 / 
 45iG67
 
 2 PKOMOTIOX AXD MMXTENANCE OF THE AMERICAlf MARIN x.. 
 
 marine, and hare not pormittod differences over details to divide 
 us upon the means to attain this end. No partisan bias has had 
 any place in our deliberations and what we submit is that which we 
 as patriotic Americans believe will attain the great object sought by 
 all. 
 
 Xo hiterests but American interests have been kept in view. We 
 are sure that other nations will look after their citizens and their 
 needs, and if our bushiess is to be cared for, we must do it. Years 
 ago our great commercial rivals said, "To hell with American ships!" 
 That spirit exists to-day. It is expressed in milder terms, but with 
 no less certainty. Fair Play, the great shipping organ, of London, 
 said a short tune ago: 
 
 Senator Jones and otlier enunoiators of golden periods must clearly understand this, 
 that things being as they are, so far as Cfreat Britain is concerned there can be no 
 question of mutuality of sacrifice. We have al\va>'s been generous and. in the matter 
 of or;' interpretation of free trade, fools; but when it has been a question of the sur- 
 Wval of the fittest we have invariably done our level best to crush or mold opposition, 
 and. as re'.:ards America's new mercantile marine, we shall go on doing it and expect 
 her to do the same by us. 
 
 This is what we must meet. We are going to meet it not in the 
 spirit of destruction, but m the spirit of fair pla}^ and with a determi- 
 nation to secure our just portion of the world's carrying trade. 
 
 The nations that have been doing the ocean carrying trade during 
 the last 50 years are not going to give it up ^nthout a liercc struggle. 
 They arc not willing for us to do a fair part. They know the business. 
 They have the ex})erience and the business facilities and connections 
 throughout the world that give them a great advantage. Govern- 
 menttil aid and power will be coordinated with private energy and 
 initiative to maintain their position, and must be met in the same wa^^ 
 
 Nations are not free that depend upon foreign fleets to cany their 
 products and bring to them their supplies. The peace of the world is 
 not secure so long as one nation wholly dominates the ocean trade. 
 We do not seek to drive other nations from the sea. We do not seek 
 to dominate ocean trade. But we do seek to do a just and proper 
 part of it, and especially of our own. If we can not attain this end 
 now we never can do it. No halting, hesitating, doubting policy will 
 succeed. We must take risks. We must encourage our caj)ital and 
 energ)' to go into this contest and assure them that Ave are behind 
 them to build up and sustain rather than tear down. With this 
 assurance no one can doubt our success. 
 
 We have a large tonnagC now. This, however, does not make a 
 permanent marine. Steamship lines must be established and regidar, 
 certain, and permanent ser\ice secured. This will lead to the estab- 
 lishment of commercial agencies and the creation of business facilities 
 which we do not now have but whicli are necessary to success. Worn- 
 out shij)s nuist be replaced with new ones. More elllcient and better 
 types of vessels must be built to take on important services for which 
 we iiav(! Tjo vessels now. ( )ur shipowners and ship operators must be 
 placed as nearly as possible on an equality in operating costs and 
 operating conditions with their competitors, l^nless i)roper steps are 
 taken to do these things it will be but a short time until our licet will 
 be (lissij)ated and our Mag <lriven from the sea, and we will again be 
 in the same dependent and humiliating position we were before the 
 war. These genei'al considerations hav(> moved the committee in 
 determining its rejjort. We feel conlident that if our recommenda-
 
 nq 
 
 PROMOTION AND MAINTENANCE OF THE AMERICAN MARINE. d 
 
 tions are adopted the foundation will be laid upon which can be built 
 a policy that will maintain an ample American merchant marine 
 under the American flag and ultimately in private owncrshij). 
 
 We take the Greene bill as the basis of our rq)ort. It was given 
 long and careful consideration in the House. It dealt solely with 
 thebaic and disposition of the Government ships, the House com- 
 mittee expecting to consider and deal with the other shipping 
 problems m a subsequent measure. Two or three other bills liave 
 passed the House dealing with special features of the shipping 
 problem, and several of these measm-es we have recommended as 
 anuMidments to the Greene bill. Some of these provisions are quite 
 im])ortant and have been given much stud}' bv the House committee, 
 and we feel that the Merchant Marine and iFisheries Committee of 
 the House is entitled to great credit for what it has done on this 
 important question. H the sale and disposition of our Government 
 ships were the only problem to be met in connection with the mer- 
 chant marine the "Greene bill might well be passed with but little, 
 if any, amendment. From our viewpoint, however, the most im- 
 portant question, and the most difficult one, is to take care of the 
 fu ture of our merchant marine and make it what it ought to be, 
 Not only must this be kept in view in the disposal of our ships, but 
 we must make provision so that they can be operated and main- 
 tained in competition with the world. We deem it wise to embody 
 provisions dealing with both of these problems in one bill. 
 
 We assert the need of a merchant marine for the national defense 
 and for om' commercial growth and declare it to be our policy to 
 do whatever may be necessary to meet this need. 
 
 The Shipping"^ Board membership is made seven instead of five, 
 the salary is increased to $12,000 per annum, and minor changes are 
 made with reference to the qualifications of the members. Success 
 in carrying out our policies will depend largely upon the executive 
 agency intrusted with the power to act. The Shipping Board is the 
 body created for that purpose. It was provided for in the shipping 
 act of 1916 and is composed of five members. Thirteen different 
 persons have been appointed to it since its organization. There are 
 three members serving now. For one of the two vacancies no one 
 has been named. No efficient work can be done — no settled adminis- 
 trative policies worked out or carried on — with such a constantly 
 changing personnel. The law provided that geography should be 
 considered in selecting the members of the board. This has been 
 wholly disregarded. This should not be. It may be well to place 
 ^ some restrictions upon the private interests or activities of members 
 \ of the board, but we should have men upon it of the highest business 
 .^ character and the widest possible experience, and their interest in 
 ^ shipping should be taken as a recommendation rather than otherwise. 
 ^ We should have men on the Shipping Board who know the shipping 
 ( business, who can meet those dealing with the board on -their own 
 ground, and who can anticipate the moves and methods of our com- 
 petitors. Men of character and standing can be depended upon to 
 take better care of the interests of the Government in matters with 
 which they are experienced than can men who are ignorant of 
 such needs and without such experience. There is more danger 
 of loss, injury, or failure tlu-t>ugh mistaken action than tlu'ough
 
 4 PROMOTION AND MAINTENANCE OF THE AMERICAN MARINE. 
 
 improper action. Every important section of the country should 
 be represented on tliis great board and men of standino; and 
 experience in shipping, commerce, agriculture, labor, and industry, 
 should be upon it. It has the most difficult, as well as the most 
 important work to do. Not only must it establish and carry out 
 great administrative policies within the limits prescribed by Congress, 
 but Congress must depend upon it largely for recommendations for 
 leo-islative action. Tliis board will make or mar oiu- merchant marine. 
 Not only should it be composed of men of the greatest ability, widest 
 experience and highest character, but these men should give their 
 time largely to the study of policies and measures that will enable 
 our shipping interests to hold their own with those of other nations. 
 While they are looking after the disposal of our ships in such a way 
 as to care for the future they should be studying our laws, world con- 
 ditions, and methods of competition, so that they can aid Congress in 
 doing what is needed to secure a permanent merchant marine. 
 
 The sale and disposition of our ships must necessarily be left largely 
 to the discretion of the Shipping Board. We have endeavored to 
 indicate clearly the administrative policy which we want followed. 
 Our ships are owned by the Government. They have been built 
 with the people's money. They are the people's property. Per- 
 manent Government ownership and operation of ships is less to be 
 thought of than Government ownership and operation of railroads, 
 and should not be adopted as a permanent policy except as a last 
 resort. We have Government ownership of these ships, however, 
 and they should not be sold at bargain prices merely to get them 
 quickly into private hands. They should he dealt with in a business- 
 like way and dispose^ of as a prudent business man would dispose of 
 such property as he does not desire to keep, but is not forced to sell. 
 Tliis we have tried to make clear by the amendments which we pro- 
 pose to the House text. With foreign competition thoroughly 
 organized as it is and the general uiifamiliarity of our people with 
 shipping, and with our lack of organized facilities, it would be worse 
 than useless to dispose of these ships without extending every aid 
 possible and going as far as we can to guarantee their maintenance 
 in the W'Orld's carrying trade. Speedy and injudicious disposition 
 of our ships without consideration of other factors would likely result 
 in a repetition of that fiasco of a century ago when inexperienced 
 capital was attracted to the shipping business in time of unusual 
 demand and soon succumbed when comj^etition became keen. Only 
 with the Government acting as a buffer in this era of reorganization 
 of our merchant marine can we avoid the dissipation of our present 
 assets and return our Hag with security to the commercial seas. 
 
 Several provisions are recomnKMided under which it is hoped new 
 and up-to-date ships will be built, desirable lines established and 
 regular, certain, and peimaneiit services maintained. This is essen- 
 tial for the stability of our fleet and the <^rowth of our commerce. 
 We can take our ])roper place in the South American and oriental 
 trades in no other way. 
 
 The control of docks, piers, warehouses, wharves, and terminal 
 equi|)inent and faciliti(>s acquired during the war have been ])lacod 
 in the possession and under llic control of the Sliij)ping lioard. 
 These should be used to the great advantage of our merchant marine,
 
 PROMOTION AND MAINTENANCE OF THE AMERICAN MARINE. 
 
 and siiroly no at^cncy of the Govornmont can better })e entrusted 
 with them tlian that agency whose primary duty is tlie building up 
 of the merciiant marine. Ample provision for their use l)y tlie Army 
 and the Navy is nuide in case of need. 
 
 The transfer of ships, whether privately or Government owned, to 
 aliens, exce|)t with the approval of the Shipping Board, is prohibited. 
 
 TJie board is to determine what a])])rentices sliould be carried upon 
 American shi|)s, and while this will l)e only atlvisory so far as ships in 
 private ownershi]> are concerned the board is authorized and directed 
 to prescribe the number and require the carrying of aj)|:)rentices on 
 ships sold by the board, on shij)s operated by the board, and on 
 shi|)s having contracts for the carrying of the mails. This is very 
 important, especially in the way of developing and training men to 
 be ollicers. 
 
 Far-reaching power is placed in the Shipping Board to make and 
 control rules and regulations affecting shipping, and to meet foreign 
 com)>etition. We must do something of this kind, if we would meet 
 the practices and methods of other countries. Through their orders 
 in council and other semilegislative acts of administrative bodies 
 they interfere with and handicap our merchant marine in many 
 dift'erent ways. Tliis must be met in a similar way. Another very 
 desirable and necessary thing is to coordinate the rules and regula- 
 tions issued by different bureaus and departments of the Government 
 which affect our merchant marine. They should in general be 
 brought under one control and made to harmonize and promote the 
 welfare of our merchant marine, rather than handicap it. Tliis can 
 be done, and we hojic will be done, under the authority we have given 
 the Shipping Board. 
 
 Sections 14 and 16 of the shipping act prohibit rebates, fighting 
 ships, retaliation, unfair and unjustly discriminatory contracts, undue 
 preference, and otiier unfair practices, but no adequate provision is 
 made for preventing such things being done by foreign carriers. We 
 have made provision to prevent the ships of companies or individuals 
 engaging in such methods and practices from entering or leaving our 
 ports. This will go a long way toward stopping this sort of com- 
 petition. 
 
 We require our mails to be carried on American ships wherever 
 practicable. We are now spending several millions of dollars a year 
 lor the transportation of United States mail and about two-thirds of 
 this money is being paid to foreign ships. This is notliing more nor 
 less than a direct subsidy to them and should cease. 
 
 We hope to develop and build up an American Bureau of Shipping 
 that will be an American Lloyds and eventually have the standing in 
 the world's shipping that the great English agency has to-day. 
 Lloyds agency is one of the great factors in the maintenance of the 
 British merchant marine, and we should have an American agency of 
 that kind of equal ])otency in the shipping world. 
 
 Under the law now preference or lower rates can be made on rail- 
 roads upon products for import or export, whether carried in American 
 or alien ships. We provide that this preference or lower rate can be 
 given on railroads only, except under certain conditions, when the 
 goods are ex])orted or imported in American ships. This is a prac- 
 tice followed by other countries and it can be and should be followed
 
 6 PEOMOTIOX AXD MAINTENANCE OF THE AMERICAN MARINE. 
 
 most offectively by us. The Shipping Board urges this strongly in 
 the following letters and memorandum: 
 
 United States Shipping Board, 
 
 Washington, April 19, 1920. 
 Hon. W. L. Jones, 
 
 Chairman Commerce Committee. United Slafes Senate. 
 
 My Dear Senator: It is the undoubted desire of Congi'ess to legislate in whatever 
 manner will insure the success of the United States merchant marine. It is the 
 expressed fear of American operators and the boast of foreign operators that with a 
 return to normal conditions, the American fleet will be tied up in ports unable, by 
 reason of its greater initial cost and its greater operating cost, inch.sive of labor, to 
 compete with the vessels of other flags. 
 
 Other nations have, by direct subsidy, guaranteed the operation of their fleets in 
 world competition. We believe it unnecessary for the United States to adopt a like 
 policy. If we can confine to vessels of the United States an existing advantage now 
 guaranteed by United States statutes to vessels of all nations, it will be entirely pos- 
 sible for our fleet, notAvithstanding the handicaps of labor or of capital investment, 
 to permanently sail the seas with the commerce of the United States. 
 
 By legislating to that end, we but follow policies which adopted by other nations 
 guaranteed their success in the carrying of their own commerce. If we can but 
 handle the foreign commerce of the Ignited States, or a considerable portion thereof, 
 in vessels of the United States, it will be ample to insure the success of a fleet larger 
 than that we now possess. 
 
 It was by such measures that Germany guaranteed 60 per cent of its exports and 50 
 per cent of its imports in German vessels. By like policy Japan prevented even 
 American transcontiental railroads owning shi])s from successfully operating them 
 across the Paciiic in competition with vessels of Japan, making it necessary for such 
 transcontinental roads to enter into contracts with Japanese carriers and give to vessels 
 of such carrier freight, which, if carried by their own American vessels, would have 
 insured their success. The protection referred to is that of restricting the preferential 
 rail rates within the country, known as "export" and "import" rates, to the vessels 
 of the flag of such country. We therefore strongly recommend the enactment in 
 the merchant-marine legislation, now before the committee, of the following sec- 
 tion, with full knowledge that like discrimination by other nations still leaves to 
 vessels of the United States an 80 per cent advantage. 
 
 (The amendment proj^osed is here omitted as it is incorporated in the bill.) 
 Yours, very truly, 
 
 W. S. Benson, Chairman. 
 
 United States Shipping Board, 
 
 Washington, April 27, 1920. 
 Hon. W. L. Jones, 
 
 United States Senate. 
 My Dear Senator: Referring to the two letters of April 19 from Admiral Benson 
 to yotirself, recommending certain amendments to the merchant marine bill, I beg 
 to inclose herewith a memorandum giving in greater detail some of the reasons and 
 arguments for such legislation and which may be of use to you in connection with 
 presentation of the merits of these amendments before the committee and the Senate. 
 \'ery sincerely, yours, 
 
 R. A. Dean, General Counsel. 
 
 The United States now owns approximately 2,000 merchant vessels, of which 1,149 
 are a desirable type of steel vessels, aggregating in round numbers 7,000,000 ton'^. In 
 its operation this fleet constitutes the greatest commercial enterprise in the world, an 
 enterprise which must inevitably result in unparalleled success or most colossal failure. 
 Its destinies lie with Congress, and whether Government owned and operated or trans- 
 ferred to priv^ate ownership for operation by American citi/.ens, it is absolutely essen- 
 tial tliat Congress establish by law policies whic-li will insure that these vessels of the 
 United States shall be successful in tluur competition witli vessels of other nations, 
 at loa.st for the commcirce afforded by Tnited States markets. 
 
 Ah matters now stand, tliis Ih^'t represents an iinestinent per registered ton far 
 greater than like investment in the vessels of any other nation. The costs of operation 
 un<h'r corifiitions .such as ol)tain for the I'nited States lieet are far greater than for other 
 nation.s. It is imperative that ('ongress by proper enactment i)rovide for vessels of 
 thci Cnitc'd States, when owned by American citizens, an artilicial advantage which 
 will in a measure offset the.se stated and other adverse conditions, and so insure the 
 continued successful operation of United States vessels in competition with the world
 
 PROMOTION AND MAINTENANCE OF THE AMERICAN MARINE. 7 
 
 at large. To aoconiplish this requires no subsidy; only a proper protection for Ameri- 
 can vessels in the enjoyment of our own water-borne commerce, on the following lines: 
 
 Coastinq tradcx of (he United Slates. — No vessels should be jiermitted operation in 
 the coastin<r trades of the United States unless it shall at all times be wholly owned by 
 citizens of the Ignited States as to the value of all sec\irities issued ap;ainst it. 
 
 Except as to certain foreitjn-built ships heretofore admitted to United States registry 
 under 7)rovisions of law, or vessels now owned by the United States, tiie coasting privi- 
 lege should be absolutely confined to vessels built in the United States. 
 
 Such policy obtained from the foundation of our (Jovcrnment until very recent 
 years, and under that policy we became possessed of a tonnage in vessels greater than 
 the combined coastwise fleets of the leading maritime nations of the world. In 1914 
 we were rated the .second maritime nation of the world, our tonnage in seagoing ships 
 being exceeded only by that of (ireat Uritian. 
 
 Hxcept for the American-built seagoing tonnage developed und^r that policy, 
 we would ha\e been in sorry plight at the time of our entrance into the World War. 
 However, influences adverse to the interests of the I'nited States have accomplished 
 relaxation of statutory reouirements, and of interpretation of statutes contrary to 
 the intent of Congress in their enactment, resulting in many encroachments upon 
 the theretofore purely American occupation of our coasting trades, so that — 
 
 (a) Vessels under foreign lings have since Utl.3 (not through the medium of the 
 emergency war legislation of 1917) participated in the carrying of domestic commerce 
 from one to another point in the United States, including carriage of domestic com- 
 merce from coast to coast through the Panama Canal. 
 
 (6) Subjects of foreign (lovernments, and even foreign Governments themselves, 
 now own and operate vessels of the Ignited States in our domestic coasting trades. 
 This is accomplished through the medium of corporations of the United States, the 
 actual ownership of all or a majority of the securities of which are vested in foreign 
 subjects, so that the corporations are in fact but "dummies," ostensibly held by 
 American citizens but in reality a "camouflage"' to the foreign ownership. 
 
 Unless our coasting fleet be wholly and unequivocally owned by loyal American 
 citizens, it can not be rated a dependable unit in time of national emergenc\. We 
 must insure that it w'U always be dependable by repairinsj the breaches njade in our 
 coasting laws so that 100 per cent bona tide American ownership shall be the only key 
 to our coasting trades. 
 
 That is ostensibly the present requirement from individual owners in both coasting 
 and foreign trades of the United States, and it is through the corporation or association 
 holding American tonnage that the door is opened to foreigners. 
 
 The requirement in respect of corporations, partnerships, or associations is that a 
 control of such corporations, partnerships, or associations shall be vested in citizens 
 of the United States. It may be expedient, so far as the foreign trades are concerned, 
 that foreign capital be admitted in the ownership of ve.'^sels in such trades: but if so, 
 Buch ownership l)y foreigners should not be permitted beyond 25 per cent of the total 
 value of all the securities of such shipping organization. 
 
 Only by such provisions can the United States realize benefits from its shipping 
 akin to that which the British Government described as "Great Britain's invisilple 
 exports," viz, the returns to Great Britain of the receipts from the operation of its 
 British-owned merchant marine, of a sum sufliciently great to not only compensate 
 for the excess of Britain's imports over exports, but to insure an additional balance 
 in favor of Britain, sufliciently large to have always forced the flow of gold from other 
 nations to Britain, estaldishing London as the money center of the world. 
 
 Before the war England was sea carrier for all nations and owned half the merchant 
 tonnage of the world. Unless we are ■\\T.lling to insist on citizen ownership of Amer- 
 ican vessels, and protect such citizens in the world's trades, we can not successfully 
 compete with Britain even for the export and import commerce of our own country. 
 
 Foreign trades. — No nation ever grew to maritime ])rominence without artificial 
 protection. This can be successfully accomplished for the American merchant 
 marine without subsidy. 
 
 The fact that we suddenly find ourselves with a merchant marine almost equaling 
 that of Great Britain does not justify the belief that we shall, without artificially 
 created advantage, be able to hold to our fleets even a considerable part of the com- 
 merce of the United States. If our merchant marine is to be successful, that .success 
 must be guaranteed by our water-borne domestic and foreign commerce. In such 
 enactment we would but follow the illustroiis example of Cireat Britain which until 
 1854 (when its fleet had been dcvelo]ied to magnificent proportions) prohibited the 
 vessels of all other nations from importing into the Ignited Kingdom, or any British 
 possession in Asia, Australia, or America, any good unless such goods were the product 
 of the coimtry to which such vessel belonged, and were imported directly from the 
 country of origin. Foreign vessels were also ab.solutely excluded not only from the 
 coasting trades of the United Kingdom but from interimperial trades as well.
 
 8 PROMOTION AXD MAINTENANCE OF THE AMERICAN MARINE. 
 
 There was no relaxation of these regulation until the growinc; necessitie? of Britain 
 for commercial expansion by sea made it seem desirable to relax in a measure these 
 provisions, as a basis of securing further advantage for its fleet in the exclusive trades 
 of other nations. > 
 
 Prior to 1860. the United States, possessed of a Adgorous foreign policy, never carried 
 in its fleet less than from 50 to 60 per cent of our own foreign commerce. Just before 
 the World War, to our shame, we carried of that commerce less than 10 per cent. 
 Foreign carriers handled more than 90 per cent of our trades, and 50 per cent of our 
 total commerce was exported or imported in vessels of Great Britain. We supplied 
 noarlv three-fourths in weight and over 60 per cent in value of the Brtish Empire's 
 imports from countries outside of Europe, and furnished market for approximately 40 
 per cent of the Empire's exports to countries outside of Europe, ilore than one-half 
 of the British tonnage engaged in ocean trades traded with America. 
 
 AVe have in striking contrast with our failure in that direction, the successes of both 
 Germany and Japan in building and holding their own sea trades against encroach- 
 ment by vessels of any other nation. The successes of each of these countries in the 
 development of shipping in foreign commerce is mainly due, a])art from any subsidy, 
 to the wise policy of gi^'ing special advantages to their vessels, tlirough the medium of 
 preferential rail freight rales, apphdng only to exports and imports when handled in 
 ■vessels of the home flag of such countries. 
 
 In Germany this method resulted in German vessels enjoying the carriage of 60 
 per cent of the volume of that country's exports and over 50 per cent of the volume of 
 that country's imports. 
 
 In Japan this provision which, according to informed shipowners on the Pacific 
 lias obtained for a period of 20 years or more, has given to the vessels of Japan ascend- 
 ency over vessels of Britain, the United States, and of all other countries, in the 
 carr\ing trades of the Pacific. 
 
 Mr. James J. Hill, with all of the leverage resultant from the control by a trans- 
 continental railroad of freight for trans-Pacific destinations, found it impracticable 
 to operate his o^vn American-documented vessels from the United States to Japan in 
 competition with the vessels of Japan, because of the preferential rail rate in Japan 
 upon the .freight carried in Japanese vessels, and was obliged, as a protection to his 
 rail interests in. the United States, to enter into contract with a Japanese carrier and 
 to give to the vessels of that can'ier freight, the carriage of which would have insured 
 the success of his own American trans-Pacific service. 
 
 The Hill service, by United States vessels, was eventually and necessarily with- 
 draAvn from the trans-Pacific competition, and so were all other American documented 
 carriers long prior to the outbreak of the war. 
 
 The ad\antage to German ships from like practice in German}'' was so great that 
 together vdth the other advantages, such as the passenger-control system, it gave to 
 German steamshij) companies the dominating influence in prewar European vessel 
 conferences. Furthermore, it is admitted by Britain to be an advantage which they 
 could not overcome, an advantage however the elimination of which could not, in 
 the opinion of that goA-ernment, be made the subject of special treaty provision. 
 
 We can insure the success of American shipping in the foreign trades by adopting 
 the present practices of Japan, the practice of Germany during the entire period 
 when tliat nation owned a merchant marine, viz. establishing that the preferential 
 rail-freight rate on export and import freight in the United States rail carriers, now 
 given indiscriminately to the ve.'^sels of all nations for the purpose of balancing rail 
 traffic, shall a])])ly only to vessels of the United States. 
 
 Such provision of flag advantage for American vessels is not a contravention of 
 the most favored nation clauses of any treaties. Unlike discriminating duties which 
 are the subject of treaties with many nations, we are as free to establish this advantage 
 for American .shipping as we are to establish an import duty upon any commodity 
 imported into the United States. 
 
 I point to a single example, imder such provision of law, of advantage to American 
 shipping as engaged in oriental trades from the Pacific coast. 
 
 The domestic rate to the Pacific coast on steel is !S1.25, whereas the export rate to the 
 Pacific is 60 cents per hundred pounds. This represents a differential which would, 
 under such provision of law, accrue to an American ship as against a competitor by 
 any other nation, of $14. .50 per long ton of steel. 
 
 It may be argued that if we were to enact such provision, other nations would dis- 
 criminate in like manner. We suggest this enactment in so far as Ja])an is concerned 
 would but counteract existing like discriminations by that coimtry against our own 
 vessels. 
 
 The average rail liaul in the United States for export or import freight from either 
 coast i.s so much greater than the average rail haul in any foreign country as to leave 
 to the United States under like discrimination an advantage of approximately 80 
 per cent.
 
 PROMOTION AND MAINTENANCE OF THE AMERICAN MARINE. 9 
 
 In this connection British shipowners have been warned l)y the British Govern- 
 ment that they must not expect either natural or artificial advantaj^es in countries 
 wliere the markets are not BritLsh, and have lieen pointed this moral with reference 
 to onr own mnrkets. 
 
 It is little .'<hort of camouflas^e to discuss the desirability of possessing a great mer- 
 chant marine under the American flag, imlcss. regardle-!S of protests from foreign 
 nations or from individuals within the United States more interested in foreign nations 
 than our own, we are willing to legislate in such manner as shall give to our "lustry 
 infant merchant marine" an advantage in trade which will permit it contiiuied 
 exist'i'nce. 
 
 These provisions do not in any manner interfere with the mo\-ement through 
 Canada and over Canadian rail lines, at any rate they may choose to establish, of 
 merchandise in export or import from the United States or moving l)etween points 
 in the I'nitcd Sfiti's tlirough Canada. So far as the domestic trades are concerned 
 it simply reestal)lislies conditions as they existed from the beginning of our Govern- 
 ment down to and including the year 1912. 
 
 Under certain conditions we relieve marine insurance associations 
 or companies from the restrictions" of the antitrust laAvs. We believe 
 that the interests of our country are fully protected by the limitations 
 placed upon these associations, and if we can develop marine insur- 
 ance as it shoidd be developed in this country we can do nothing 
 better for an American marine. Only about 10 per cent of our hull 
 insurance and only al)out 25 or 30 per cent of all kinds of our marine 
 insurance are done to-day by American companies. 
 
 ^Mortgage security on ships now is practically worthless. We 
 make it good except as to certain demands that should be superior 
 to everything else, such as wages. W^e want our people and capital 
 interested in shipping and shipping securities. If we can bring this 
 about one of the greatest problems of our merchant marine will be 
 solved. The Engtish people are financially interested in their ship- 
 ping. We must have our people interested in ours. 
 
 For many years the United States has been prevented from doing 
 what was clearly to its advantage to do in order to build up the mer- 
 chant marine by restrictions imposed upon it through commercial 
 treaties. There can be no more opportune time to abrogate these 
 treaties and make new commercial arrangements, if they are deemed 
 desirable, than now. France has already notified us of her desire 
 to abrogate her treaty with us, and we should put ourselves in a 
 position where we can do whatever we deem necessary to promote 
 our commercial or marine welfare. We may not desire to go back to 
 the policy of the fathers under which our ships were our Nation's 
 pride, but we ought to be free to do it if we want to. We have made 
 provision for this by directing the President to give the notice neces- 
 sarv to abrogate such treaties. 
 
 We require our coastwise shipping to be wholly owned by Americans 
 and our shipping in the foreign trade to be at least three-fourths 
 owned by Americans. This is strongly urged by the Shipping Board 
 in the following letter: 
 
 United States Shipping Board, 
 
 Washiyigton, April 19, 1920. 
 Hon. W. L. Jones, 
 
 Chairman Commerce Comviittte, Uniled States Senate. 
 My Deau Senator: I have the following suggested amendments to the second 
 committee print of the merchant marine act of 1920: 
 
 1. Believing that it is essential that our coasting fleet be wholly owned by American 
 citizens, I respectfully suggest that section 29 of the second committee print be 
 amended by inserting after the word "act," in line 11, on page 26, the words "and 
 wholly owned by citizens of the United States." Section 29 as so amended should be 
 enacted, as I deem the same vital for the preservation of our maritime security.
 
 10 PROMOTIOI^ AI^i3 MAINTENAIS^CE OF THE AMERICAN MARINE. 
 
 2. As a corollarv to the suggestion contained in paragraph 1, it follows that "citizen- 
 ship" in the "Shipping Board act, 1916," should be redefined, aud I submit the fol- 
 lowing. It \\'ill be noted that at the end of this substituted section, a pro\ision is 
 made for foreign commerce which may be deemed necessary during the period of 
 transition • 
 
 "That section 2 of the shipping act of 1916 be and the same is hereby amended to 
 read as follows: 
 
 '"gp-c — That within the meaning of this act no corporation, partnership, or 
 association shall be deemed a "citizen of the United States" unless all of the securi- 
 ties of such corporation, partnership, or association are at all times wholly and bona 
 fide ownied by citizens of the United States, and in the case of a corporation, unless 
 in addition to such requirement, its president and directors are citizensof the United 
 States, and the corporation itself is organized under the laws of the United States, or 
 of a State, Territory, District, or possession thereof. 
 
 " 'A corporation "shall not be deemed to be so owned by citizens of the United 
 States (a) if the title to all of the value of its stock and other securities is not vested 
 in such citizens, free from any trust or fiduciary ol)ligation in favor of any person not 
 a citizen of the United States"; or (b) if all the voting power in such corporation is not 
 vested in citizens of the United States; or (c) if, through any contract or uiider- 
 etanding, it is so arranged that voting power in such corporation may be exercised, 
 directly or indirectly, in behalf of any person who is not a citizen of tlie United States; 
 or (d) if by any other means whatsoever control of any interest in the corporation is 
 conferred upon or permitted to be exercised by any person who is not a citizen of the 
 United States: Provided, however, That for the purpose of operating vessels exclu- 
 sively in commerce with foreign nations, a corporation, partnership, or association 
 organized and officered as provided in this section shall be deemed a citizen of the 
 United States if at least 75 per cent of the value of all the securities of such corpora- 
 tion, partnership, or association are at all times bona lide owned l;y citizens of the 
 United States, free from any trust or fiduciary obligation in favor of any person not 
 a citizen of the United States. ' " 
 
 Unless our coasting fleet be wholly and unequivocally owned by loyal United 
 States » itizens, it can not be rated a dependable unit in time of national emergency. 
 Such dependability must always be insured, and this can only be accomplished by 
 making 100 per cent bona fide American ownership the only key to our coasting trade, 
 and inso far as consistent with present conditions, to establish the same requirement 
 for our foreign commerce. 
 Yours, very truly, 
 
 W. S. Benson, Chairman. 
 
 These are some of the main provisions of the House bill with the 
 amendments we propose. ' It is not a perfect measure, but it is a 
 purely patriotic attempt to do what the people of this country, 
 without regard to occupation, party, or section, want done. A 
 great responsibility is placed upon the Shipping Board. This we 
 can not avoid. If the men who compose that board are tlie right 
 kind of men and moved by the right spirit they wiU do a great work 
 for their country and bring immortal fame to themselves. 
 
 The following is the text of the bill with the amendments we pro- 
 pose incorporated therein: 
 
 [H. R. 10378, Sixty-sixth Congress, first session.] 
 
 AN ACT To provide for the promotion and maintenance of the American merchant marine, to repeal 
 certain emergency legislation, and provide for the disposition, regulation, and use of property acquired 
 thereunder, and for other purposes. 
 
 Be it enacted hj the Senate and Bouse of Representatives of the United States of America 
 in Congress assembled, That it is necessary for the national defense and for the proper 
 gro^vth of its foreign and domestic covrmerre that the United Stales shall have a merchant 
 marine of the best equipped and most siritable Igpes of vessels sufficient to carry the greater 
 portion of its commerce and serve as a naval or military auxiliary in time of tear or national 
 emergency, vltviualely to be owned and operated privately by citizens of the United States; 
 and it is hereby declared to be the policy of the United States to do whatever may be nec- 
 essary to develop and enconrnge the maintenance of such a merchant marine, and, insofar 
 as may not be inconsistent with the express provisions of this Act, the United States Ship- 
 ping hoard shall, in the disposition of vessels and shipping property as hereinafter pro- 
 vided, in the making of rules and regulations, and in the administration of the shipping 
 laws keep always in view this purpose and object as the primary end to be attained.
 
 PROMOTION AND MAINTENANCE OF THE AMERICAN MARINE, 11 
 
 Sec. 2. (a) That the following Acts and parts of Acts are hereby repealed, subject 
 to the limitations and exceptions hereinafter, in this section, provided: 
 
 (1) The enierconcy shippini^ fund jjrovisions of the Act entitled "An Act making 
 appropriations to supjily urgent deficiencies in appropriations for the ^fiiitary and 
 Naval Establislunents on account of war expenses for the fiscal year ending June 30, 
 1917. and for other pin-po«es," approved June 15, 1917, as amended by the Act en- 
 titled "An Act to aii t'lul luc Ciuergcncy shi]jping fund provisions of the ['rgent 
 jjeliciency Appropriation Act, approved June 15, l!)17, so as to empower the Presi- 
 dent and his designated agents to take over certain transi)ortntion systems for the 
 transportation of shipyard and plant employees, and for other purjjoses," a])proved 
 April 22, 19iS, and as further amended by the Act entitled "An Act making aj^pro- 
 priation to svipply deficiencies in appropriations for the fiscal year ending June 30, 
 1919, and prior I'iscal years, on account of war expenses, and for other purposes," 
 approved November 4, 1918; 
 
 (2) Section 3 of such Act of April 22, 191S; 
 
 (3) Tlie paragraphs numbered 2 and 3 under the heading "Emergency shipping 
 fund" in s^uch Act of November 4, 1918; and 
 
 (1 ) The Act entitled "An Act to confer on the President power to prescribe charter 
 rat<'s and freight rates and to requisition vessels, and for other purposes," approved 
 Julv 18. 1918. 
 
 (5) Sections 5, 7, and F, Shipping Act, 19T6. 
 
 (b) The repeal of such Acts or parts of Acts is subject to the following limitations: 
 
 ( 1) All contracts or agreements lawfully entered into before the passage of this 
 Act under any such Act or. part of Act shall be assumed and carried out by the 
 United States Shipping Board, hereinafter called "the board." 
 
 (2) All rights, interests, or remedies accruing or to accrue as a result of any such 
 coHtract or agreement or of any action taken in pursuance of any such Act or paf* 
 varls of A-e4^ Acts shall be in all respects as valid, and may be exercised and enforced 
 in like mannt>r, suliject to the provisions of subdivision (c) of this section, as if this 
 Act had not Ijeen passed; 
 
 (3) The repeal shall not have the effect of extinguishing any penalty incurred 
 under such tAet Acts or part parts of Act, wh ieh Acts, but such Acts or parts of Acts 
 shall remain in force for the purpose of sustaining a prosecution for the enforcement 
 of s uch the penalty thf rein provided for the violation thereof. 
 
 (4) The board shall have full power and authoritj/ to complete or conclude any con- 
 struction tvork begun in accordance with the provisions of such Acts or parts of Acts if, 
 in the opinion of the hoard, the completion or conclusion thereof is for the "best interests of 
 the United States. 
 
 (c) As soon as practicable after the passage of this Act the board shall adjust, 
 settle, and liquidate all matters arising out of or incident to the exercise by or through 
 the President of any of the powers or duties conferred or imposed upon the President 
 by any such Act or part parts of Aet Acts; and for this purpose the board, instead of 
 the President, shall have and exercise any of such powers and duties relating to the 
 determination and payment of just compensation; Prorieled. That any person dissatis- 
 fied trith any decisioJi of the board shall have the same right to sue the United States as he 
 tvould have had if the decision had been made by the President of the United States under 
 the Acts hen by repealed. 
 
 Sec. 3. That section 3 of the "Shipping Act, 1916" is amended to read asfolloius: 
 ''Sec. 3. That a hoard is hereby created, to he hnovn as the United Stales Shipping 
 Board, and hereinafter referred to as the hoard. The board shall he composed of seven 
 commissioners, to be appointed by the President, by and ivith the advice and consent of the 
 Senate; and the President shall designate the member to act as chairman of the board, and 
 the hoard may elect one of its members as vice chairman. Such coniviissioiiers shall he 
 appointed as soon as practicable after the enactment of this act and shidl continue in office 
 tuo for a term of one year, and the remaining five for terms oj tuo, three, four, five, and 
 six years, respectively, from the date of their appointment, the term of each to he designated 
 by the President, hut their successors shall he appointed for terms of six years, except that 
 any person chosen to fill a vacancy shall be appointed only for the unexpired term of the 
 commissioner whom he succeeds. The commissioners shall be appointed ivith due regard 
 to their fitness for the efficient discharge of the duties imposed on them by this act, and two 
 shall he appointed from the Slates touching the Pacific Ocean, tuo from the Stales touching 
 the Atlantic Ocean, one from the States touching the Gulf of Mexico, one from the States 
 touching the Great Lakes, and one from the interior, hut not more than one shedl he ap- 
 pointed from the same Slate. A vacancy in the board shall be filled in the same manner 
 as the original appointment. No cotnmissioner shall take any part in the consideration 
 or decision of ayiy claim or particular controversy in trhich he has a pecuniary interest. 
 Each commissioner shall devote his time to the duties of his office and sludl not be in the
 
 12 PROMOTION AND MAINTENANCE OF THE AMERICAN MARINE. 
 
 employ of or hold any official relation to any common carrier or other pa'son subject to 
 this act, nor uhile holding such office acquire any stock or bonds thereof or become pecu- 
 niarily interested in any such carrier. The duties of the board may be so divided that under 
 its supervision the directorship of various activities niay be assigned to one or more com- 
 missioners. Any commissio7ier may be removed by the President for inefficiency, neglect 
 of duty, or malfeasance in office. A vacancy in the board shall not impair the right of 
 the remaining membeis of the board to exercise all its powers, and ^our members shall 
 constitute a quorum. The board shall have an official seal, which shall be judicially 
 noticed. The board may adopt rules and regulations in regard to its procedure and the 
 conduct of its business. Each member of the board shall receive a salary of $12,000 per 
 annum. The board may employ, icithin the limits of appropriations made therefor by 
 Congress, such attorneys as it finds necessary for proper legal service to the board in the 
 conduct of its ivorh, or for proper representation of the public interests in investigations 
 made by it or cases or proceedings pending before it ivhether at the board's own instance 
 or upon complaint, or to appear for or represent the board in any case in court or other 
 tribunal, any provision of law to the contrary yiolvithstanding . 
 
 Sec. 3 4. That all mcrcha eti vessels and other property or interests of -n-hatsoever 
 kind, including vessels or property in course of construction or contracted for, acquii'ed 
 by the President through any agencies whatsoever in pursuance of authority conferred 
 by the Acts asd or parts of Acts repealed by section i 2 of this Act, or in pursuance of 
 the joint resolution entitled ' 'Joint resolution authorizing the President to take over 
 for the United States the possession and title of any vessel within its jurisdiction, 
 which at the time of coming therein was owned in whole or in part by any corporation, 
 citizen, or subject of any nation with which the United States may be at war, or was 
 under register of any such nation, and for other purposes," approved May 12, 1917, 
 with the exception of vessels and property the use of which is in the opinion of the 
 President required in the military and naval by any other bra7^ch of the Government 
 service of the United States, shall bo arc hereby transferred to the board. 
 
 Sec. 3 .5. That in order that the merchant vcoocla now owned or controlled by tho 
 United Statca may be returned to or placed under private owncrchip and operation, ' 
 and to the end that an efficient merchant marine, adeciuate to meet the requircmenta 
 of our ocean borne oommoreo and to oerve ao a naval auxiliary in time of war or national 
 emergency, may be catabli^jhed and operated by citizens of the United Statco 
 to accom plisli the declared purposes of this Act, and to carry out the pohcy declared in section 1 
 hereof, the board is hereby authorized and directed to sell, as soon as practicable, 
 consistent with good business methods ajid the objects and purposes to be attained by this 
 Act, to persons who are citizens of the United States (as defined in oection 2 of tho 
 Shipping Act, 1916, aa amended) except as provided in section 4 6 of this Act, all of 
 the vessels referred to in section 3 4 of this Act or otherwise acquired by the board. 
 Such sale shall be made at such prices and on such terms and conditions as the board 
 may prescribe, but the completion of the payment of the purchase price and interest 
 shall not be deferred more than fifteen twenty years after the making of the contract of 
 sale. The board in fixing or accepting the sale price of such vessels is authorized to shall 
 take into consideration in fixing the aalc price of ouch vcooclo the prevailing domestic 
 and foreign market price of, the available supply of, and the demand for xoi'sels, freights 
 received and prospects of their maintenance, the cost of constructing vessels of similar 
 types under prevailing conditions, as well as the cost of the construction or purchase 
 price of the vessels to be sold, and any other facts or conditions that would influence a 
 prudent, solvent business man in the sale of similar vessels or property which he is not 
 forced to sell: Provided, That no sale shall be made at a less price than the cost at the time of 
 making such sale of constructing vessels of similar types in private yards in the United 
 States, after deducting the depreciation cliarge against the vessels sold generally allowed in 
 ahipving operations. All sales made under the authority of this Act shall be stibject 
 to tne limitations and restrictions of section 9 of the "Shipping Act, ei 1916" as 
 amended. 
 
 Sec. 4 6. That the board is hereby authorized and empowered, if unable to sell to 
 American citizens after diligent effort so to do, to sell to aliens, at such i)rices and on such 
 terms and conditions as it may determine, oubjcot to the oamc limitation as to comp fe- 
 tion of time of payments ao provided in occtiou i j except that payment therefor shall be 
 completed within ten years, such vessels having a dead-weight tonnage of not exceeding 
 six thousand tons, unless such vessels arc over ten years of age, as it shall, after careful 
 investigation, deem unnecessary to the promotion and maintenance of an efficient 
 American merchant marine, ana it shall make as a part of its records a full statement of its 
 reasons for making such sale. 
 
 Sec. 7. That the board is authorized and directed to investigate and determine as promptly 
 as possible after the enactment of this Act and from time to time thereafter what steamship 
 lines should be established and put in operation from ports in the TJnited States or any 
 Territory, District, or possession thereof vjhere adequate terminal connections with rail
 
 PROMOTION AND MAINTENANCE OF THE AMERICAN MARINE. 13 
 
 carriers cnn and irill be made or already exist to such vorld markets as in its judgment are 
 desirable for the prnmotioyi, development, expansion, and maintenance of the foreign and 
 coasttvi^e trade of the United States and an adequate postal service, and to determine the 
 type, size, speed, and other requirements of the vessels to be employed upon such lines and 
 the frequenci/ and regularity of their sailings, with a view to furnishing adequate, regular, 
 certain, and perwancnt seri'ice. The board is authorized to sell, and if a sati-sfactory sale 
 can not he made, to rharter such of the vessels oj the United Stales as vnll meet these require- 
 ments to respniisihle persons uho are citizens of the Utiiled Slates vho agree to establish 
 and maintain such lines upon such terms of payment and other conditions as the hoard 
 may deem just and necessarij to secure and maintain the service desired; and if any such 
 steamship line is deemed desirable and necessary, and if no such citizen can be securrd to 
 supply such service by the purchase or charter of vessels on terms satisfactory to the board, 
 the board shall operate vessels on such line until the business is developed so that such vessels 
 may be sold on satisfactory terms and the service maintaiyted, or unless it shall appear 
 icithin a reasoyiahle time that snrh line can not be made self-suMaining. The Postmaster 
 General is authorized to contract for the carri/ing of the mails over such lines at such price 
 as may be agreed upon by the board and the Postmaster General: Provided, That preference 
 in the sale or assignment of vessels for operation on s\ich steamship lines shall be given to 
 persons who are citizens of the United Slates who have the support , financial and otherivise, 
 of the domestic communities primarily interested in such lines if the board is satisfied of 
 the ability of such pcrsotis to maintain the service desired and proposed to be maintained, 
 or to persons who are citizens of the United States vho may then be maintaining a service 
 from the port of the United Stoics to or in the general direction of the trorld market port to 
 which the board has determined that such service should be eslahlished: Provided further, 
 That where steainship lines and regular service have been established and are being main- 
 tained by ships of the bcxird at the time of the enactment of this Act, such lines and service 
 shall be inaintained by the board until, in the opinion of the hoard, the maintenance thereof 
 is U7}businesslike and against the public interests. 
 
 Sec. S. That it shall be the duty of the board, with the object of promoting, encouraging, 
 and developing ports and transportation facilities in connection with water commerce over 
 which it has jurisdiction, to investigate territorial regions and zones tributary to such ports, 
 taking into consideration the economies of transportation by rail and highway and the 
 natural direction of the flow of commerce; to investigate the causes of the congestion of 
 commerce at ports and the remedies applicable thereto; to investigate the subject of water 
 terminals, including the necessary docks, warehouses, apparatus, equipment, and appliances 
 in connection therewith, with a view to devising and suggesting the types most appropriate 
 for different locations and for the most expeditious and economical transfer or interchnnge 
 of passengers or property between carriers by water and carriers by rail; to advise with com- 
 munities regarding the appropriate location and plan of construction of wharves, piers, 
 arul water terminals; to investigate the practicability and advantages of harbor, river, and 
 port improvements in connection ivith foreign and coastwise trade; and to investigate any 
 other matter that 7nay tend to promote and encourage the use by vessels of ports adequate to 
 care for the freight which tcould naturally pass through such ports: Provided, That if after 
 such investigation the board shall be of the opinion that rates, charges, rules, or regulations 
 of common carriers by rail subject to the jurisdiction of the Interstate Commerce Commis- 
 sion are detrimental to the declared object of this section, or that new rates, charges, rules, 
 or regulations, new or additional port terminal facilities, or affirmative action on the part 
 of such commo7i carriers by rail is necessary to promote the objects of this section the board 
 may submit its findings to the Interstate ('ommcrce Commission for such action as such 
 commission may consider proper under existing lau\ 
 
 Skc. & 9. That if tho terms and conditions of any sale of a vessel made under the 
 provisions of this Act inrlude deferred payments of the purchase price, the board (i» 
 
 have additional oceurity for the paymont of the b alaH ee -o f -tfae-^ttfebage-fjri^e-aB^ 
 cbargca) shall require af part of tbe such terms and conditions, that thf purchaser of 
 th(> vessel shall keep the same insured (a) against loss or damage by fire, and against 
 ftii marine risks and disasters, and war and other risks if the board so specities, with 
 such insurance companies, association^or underwriters, and under such forms of policies, 
 and fo .s»c/? an amount, approved by as ibc board may prescribe or approve, which 
 j nouranec ohall be made payable to it in the event of partial looo or oollioion liability ; 
 and (b) by protection and indemnity insurance with such insurance companies, asso- 
 ciations, <n- ui.tlerwriters and under such forms of policies, and to such an amount 
 approved by thc - board as the board may prescribe or approve. The i)isurance required 
 to be carried under this section shall be made payable to the board and/or to the parties as 
 interest may appear. The board u authorized to enter into any agreement that it deems 
 wise in respect to the payment and/or the guarantee of premiums of insuruyice.
 
 14 pro:motiox and maintenance of the American marine. 
 
 Sec. 6 10. That the board may create out of net revenue from operations and salo:^ 
 and maintain and administer, a ?tparate insurance fund, is which it may use to insure 
 in whole or ir part, asainst all hazards usually commonly covered by insurance polici;' 
 in such cases, any interest of the United States (1) in any vessel, either construct''' 
 or in process of construction, and (2) in any plants or materials heretofore or hereafic 
 acquired bv the board or hereby/ transferred to the hoard. The board ohall at all tinu 
 
 e oourc any such policico, and to oceurc the rcaoonabiC ' oo s to, cxpcnocs, „^vi ^i.«if,^ 
 of maintaining ouch iruurancc fund, and ohall annually pay into the Treasury of th < 
 United gtatco, aa misccllancoua rcocipta, any net protito realized from the opcratio t 
 of juch imrairanec fund. 
 
 Sic.'ll. That during a period of Jive years from the enactment of this Act the board ma; 
 anmtally set aside out of th£ revenues from sales and operations a sum not exccediru 
 ^■50,000,000, to be hnoun as its construction fund, to be used in the construction or ii 
 aid of the constniction of vessels of the best and most efficient type for the establishment an( 
 maintenance of service on steamship lines deemed desirable and necessary by the board, an( 
 such vessels shall be equipped tvith the most modern, the most efficient, and the most eco- 
 nomical machinery and commercial appliances. The board shall use such fund to tht 
 extent required upon such terms as the board may prescribe to aid persons citizens of thi 
 United States in the construction by them in private shipyards in the United States of tht 
 foregoinq class of vessels. No aid shall be for a greater sum than for tico-thirds of thecosi 
 of the vessel or vessels to be constructed and the board shall recjuire such security, including (■ 
 fir.^t lien upon the entire interest in the vessel or vessels so constructed, as it shall deem 
 necessary to insure the repayment of such sum ivith interest thereon and the maintenance oj 
 the service for which such vessel or vessels are built. If there are routes upon which th< 
 board deems it highly important to establish service requiring vessels of the kind descrihco 
 in this section and responsible persons citizens of the United States can not be found tc 
 construct the same, the board may consti-uct such vessels out of such fund in private ship- 
 yards in the United States, but no contract for such construction shall be let on a cost-pluk 
 basis; and when such vessels are sold the board shall require a cash payment of not less 
 than 25 per centum of the purchase price and ample securitiifor deferred payments. Interest 
 on loans made under this section and on deferred payments shall be at a rate not less than 
 4 per centum per annum, payable semiannually. 
 
 Sec. ? 12. That all vessels set until sold shall be managed and operated by the 
 board or chartered or leased by it on such terms and conditions as the board shall deem 
 ■\visf for tlie proniotion and maintenance of an efficient merchant marine, 
 provided the operation, charter, or lease of such v eeeel B by t he-beafd-efeall-be-lJaH€4 
 to the time fixed pursuant to the policy and purposes declared in sections 1 and -o of this 
 Ad; and the United States Emergency Fleet Corporation shall continue in existence and 
 have authority to operate vessels until all vessels are sold in accordance with the provisions 
 of this Act, the provision in section 11 of the "Shipping Act, 1916," to the contrary not- 
 withstanding. 
 
 Sec. 8 IJ. That the board is further authorized to sell aey all property other than 
 vessels transferred to it imder section 3 4 und er upon such terms and conditions as the 
 IxKirrl may determine and prescribe^-, ]>ut e o mplction of payment of the purehapc price 
 eb all be within five years from the date of the contract of m ie. 
 
 Sec. 9 14. That the net proceeds derived by the board prior to July 1, i939 1921, 
 from any activities authorized by this Act, or by the "Shipping Act, 1916," or by the 
 Acts specified in section 2 of this Act oavc except such an amoimt as the board shall deem 
 neces.sary to \nthhold as operating capital, for the purposes of section ? 12 of- thiaAet 
 hereif, er and for the insurance fund authorized in section 6 10 hereof, and for the con- 
 struction fund authorized in section 11 hereof, shall be (-overed into the Treasury of the 
 United States to the credit of the board and may be expended by it, wdthin the limits 
 of the amounts heretofore or hereafter authorized, for the construction, requisitioning, 
 or i)urchasing of vessels. After July 1, i930 1921, such net proceeds, less such an 
 amount as may be authorized annually by Congress to be withheld as operating capital, 
 ef and less such sums as may be needed for such insurance and construction i^ii4 funds 
 shall be covered into the Treasury of the United States as miscellaneous receipts. 
 The board shall, as rapidly as it deems advisable, withdraw investment of Covern- 
 mcnt funds made during the emergency under the authority conferred by the Aet Acts 
 or part.s of .Acts repealed by section i J of this vVct and cover the net proceeds thereof 
 into the Treasury of the United States as miscellaneous receii)t8. 
 
 Sec. -19 l.j. Tiiat the board shall not nujuire ])aynient from the War Department 
 for tin* charter liin; of vc^ssois oicncd by the United Stales Government furnished by the 
 board {r>,u\ .]\\\y I. lOIK, lo .Iiinc :{(), I') in, inclusive, for t lie use of the SHc/t department 
 when uueh vcDiJclo arc owned by the United Statca Government .
 
 PROMOTION AND MAINTENANCE OF THE AMERICAN MARINE. 15 
 
 Skc. a 16. That all authorization to purrhm^r, loiihl. ron'iii«itir>n. Irnsc, er oxrhan.Jre, 
 or otherwise nrrpiire houses, er huildinss or t o purchflgc or requisition land undr^r the 
 Aft entitled "An Art to authorize and empower tlie United .States Shippinj? lioard 
 Eineruienfy Fleet Corporation to purchase, lease, requisition, or otherwise aequire, 
 and t() sell or othermse dispose of improved or unimprovod hands, jiouses, buildin,s:s, 
 and for other p\irposos," approved March 1, 101S, is o u n pendcd herehij tcnnivnted: 
 I'rnridfd, hoirerer, That expenditviros may l)e made; uiid<-r said Act for the f cpaifB 
 repair of houses and buildin,y:s already constructed, and llic completion of sucli houses 
 or 1)uildin2:s as have heretofore l)cen contracted for aftd or are under construction, 
 if considered advisable, and the Itoard is authorized and directed to dispose of fill 
 such properties or the interest of the United States in all such properties at as early 
 a date as practicable, consistent with (jood business and the best interests of the United 
 States. 
 
 Sec. 17. That the board is authorized and directed to faJce over the possession and control 
 of all dorks, piers, varehoiises, vharves, and terminal erpripment and facilities, inrhiding 
 (ill leasehold easenienis, rights ofuaij, riparian rights, and other rights, estates, mid inter- 
 ests therein or appurtenant thereto, acquired by the President by or vnder the Act entitled 
 ".l7(. Act making appropriations to supply urgent deficiencies in appropriations for the 
 fiscal year eruling June 30, 191S, and prior fiscal years, on account of war expenses, and 
 for other purposes," approved March 28, 1918: Provided, That the President may at any 
 time he may deem it necessary by order setting out the need therefor and fixing the period 
 of such need, tran.sfer the possession and control of any part of such properties to the War 
 Department or the N'avy Department, and when such need therefor ceases such property 
 shall return to the board, and none of such propeiiy shall be disposed of except as may be 
 herenfler provided by law. 
 
 Sec. 18. That section 9 of the "Shipping A ct, 1916, ' ' is amended to read asfolloirs: 
 
 "Sec. 9. That any vessel purchased, chartered, or leased from the board, by persons ivho 
 ire citizens of the United States, may be registered or enrolled and licensed, or both regis- 
 tered and enrolled and licensed, as a vessel of the United States and entitled to the benefits 
 and privileges appertaining thereto: Provided, That foreign-built ves.^els admitted to 
 American registry or enrollment and license under this Act, and vessels owned by any 
 corporation in ivhich the United States is a stockholder, and vessels sold, leased, or char- 
 tered to any person a citizen of the United States, as provided in this Act, may engage in 
 the coastirise trade of the United States while owned, leased, or chartered by such a person. 
 
 "Every vessel purchased, chartered, or leased from the board shall, unless otherwise 
 lutliorized by the board, be operated only under such registry or enrollment and iiceifse. 
 ^uch vessels while employed solely as merchant vessels shall be subject to all laws, regula- 
 'ions, and liabilities governing merchant vessels, ivhether the United States be interested 
 therein as owner, in whole or in part, or hold any mortgage, lien, or other interest therein. 
 
 "It shall be unlauful to charter, sell, transfer, or mortgage any vessel purchased from 
 'he board or documented under the laws of the United States to any person not a citizen of 
 'he United States, or to put the same under a foreign registry or fag, without first obtain- 
 <ng the board's approval, and in giving its consent to the sale of privately owned vessels 
 locum ented under the laws of the United States to aliens, the board shall, so far as it deems 
 'rise, require the proceeds of such sales to be invested and used in the construction in ship- 
 lards in the United States of other vessels of a superior type to be operated under the flag 
 y the United States: Provided, That the board may make provision for trip charters to 
 i liens. 
 
 "Any vessel chartered, sold, transferred, or mortgaged to an alien or placed under a 
 ''oreign registry or flag, or operated, in violation of any provision of this section shall be 
 •orfeited to the United States, and whoever violates any provision of this section shall be 
 luilty of a misdemeanor and subject to a fine of not more than $5,000, or to imprisonment 
 'or not more than fire years, or both." 
 
 Sec. 19. That the board, as soon as practicable after the enactment of this act and from 
 'ime to time thereafter, is authorized and directed to detemnine what apprentices should be 
 •arried upon vessels documented under the laws of the United States and to prescribe the 
 luties, compensation, and conditions of employment of such apprentices and to make rules 
 md regulations requirinj such apprentices to be carried on the vessels of the board, on 
 'essels sold by it, and on vessels having contracts for the carrying of the mails, and the 
 loard is directed to submit to Congress from time to time its recommendations for addi- 
 ional legislation to make available a sufficient number of officers and able seamen who 
 ire citizens of the United States to ofiicer and man the merchant marine of the United States 
 'n such an extent as it may deem desirable: Provided, That nothing in titis act shall be 
 'pnstrued to impair any existing j)ouer or authority of Uie board to organize or maintain 
 ts recruiting service. 
 
 Sec. 20. That the board is authorised and directed in aid of the accomplishment of the 
 pu-poses of this Act to make rules and regulations to carry into effect the provisions of this 
 Act, and to make and to change at will such rules and regulations relating to vessels and
 
 16 PROMOTIOK AI^D MAINTENANCE OF THE AMERICAN MARINE. 
 
 foreign and coastirixe shipping, not in conflict xrith existing law. as will adjust or mtef 
 general or special conditions unfavorable to such shipping, whether in any particular trade 
 or upon any particular route or in commerce generally and arising out of or resulting from 
 foreign laws, regulations, or rules or from competitive methods or practices employed by 
 oicners, operators, agents, or masters of vessels under a foreign flag, and existing rules or 
 regulations affecting foreign or coastwise shipping or trade, other than those relating to the 
 Public Health and the Steamboat- Inspection Service, heretofore issued by any Govern- 
 ment department, bureau, or agency inay he suspended, modified, or annulled upon request 
 of the board: and no rule or regulation affecting foreign or coastwise shipping or trade, 
 except those affecting the Public Tlealth and the Steamboat- Inspection Service, shall hereafter 
 be issued or promulgated by any department, bureau, or agency of tlu United SUihs unless 
 and until the same shall be approved by the board: and no rule or regulation shall be issued 
 by the board favoring in any way vessels owned by the United States over vessels privately 
 owned and documented unejer the laics of the United States: Provided. That in case of a 
 disagreement betireen the board and the head of any department, bureau, or agenqj over the 
 sxispension. modification, or annulment of rules and regulations heretofore issued by such 
 department, bureau, or agency, or over the issuance or promulgation of rules and regulations 
 hereafter made, such disagreement shall be submitted to the President and action tahcn in 
 accord ivith his decision thereon. 
 
 Sec. 21 . That whenever the b'oard shall have satisfactory reason to believe that any person 
 owning or operating a vessel under a foreign flag has violated any of the provisions of 
 sections 14 or 16 of the "Shipping Act. 1916," it is hereby authorized to issue an order to 
 that effect and notify the Secretary of Covimerce thereof, and thereafter no vessel in which 
 such person, or in case such person is a firm, association, or corporation, any member or 
 director thereof, has any interest, and no vessel operated by or belonging to any affiliated 
 person shall be permitted to enter any of the ports of the United States until the board is 
 convinced that such practices have been abandoned and issues an order declaring such to be 
 the case and notifies the Secretary of Commerce thereof. 
 
 Sec. 22. That the board shcdl ascertain and determine the need for vessels between the 
 ocean terminal of the Government railroad in Alaska and Pacific and other ports, and if 
 suitable and satisfactory arrangements can not be perfected to meet such need through 
 vessels privately owned and operated the board is directed to furnish suitable service until 
 it can be tuhen over and suppUed by private capital and enterprise. 
 
 Sec. 23. That from and after one year from, the enactment of this act the coastwise laws of 
 the United States shall extend to the island Territories and possessions of the United States 
 no% now covered thereby, and the board is directed prior to the expiration of such year to have 
 established adequate steamship service at reasonable rates to accommodate the commerce and 
 the passenger travel of said islands and to maintain and operate such service until it can be 
 taken over and operated and maintained upon satisfactory terms by private capital and 
 enterprise: Provided, That if adequate shipping service is not established uithin a year the 
 President shall extend the period herein allowed for the establishment of such service in the 
 case of any island Territory or possession for such time as may be necessary for the establish- 
 ment (f adequate shipping facilities therefor. 
 
 Sec. 24- That the act entitled "An act giving the United States Shipping Board power to 
 suspend present provisions of law and permit vessels of foreign registry a7id foreign-built 
 vessels admitted to American registry under the act of August 18, 1914, to engage in the coast- 
 wise trade during the present war and for a period of one hundred and twenty days thereafter, 
 except the coastwise trade ivith Alaska," approved October 6, 1917. is hereby repealed: 
 Provided, That all foreign-built vessels admitted to the coastwise trade under such act for the 
 full period covered by the act and which are wholly owned by persons who are citizens of the 
 United States, and foreign-built vessels opened by the United States at the time of the enact- 
 ment of this act, if sold to such persons, may operate in the coastwise trade so long as they are 
 owned by such persons. 
 
 Sec. 25. That the owner of a vessel documented under the laws of the United States and 
 operated in foreign trade shall, for each of the ten taxable years beginning with the first taxable 
 year ending after the enactment of Oils Act, be allowed as a deduction for the purpose of ascer- 
 taining his net income subject to the ivar-profits and excess-profits taxes imposed by Title III 
 of the Revenue Act ofl91S an amount eeiuivalent to the net earnings of such vessel during such 
 taxable year, determined in accordance with rules and regulations to be made by the board: 
 Provided, That such owner shall not he entitled to such deduction unless during such taxable 
 year he invested, or set aside binder rules aiid regulations to be made by the board in a trust 
 fund for investment, in the building in shipyards in the United States of new vessels of a 
 type and kind apjiroved by the board, an amount, to be determined by the Secretary of the 
 Treasury and certified by him to the board, etjuivalent to the war-profits and excess-profits 
 taxes that would have been payable by such owner on account of the net earnings of such 
 vessels but for the deduction allowed under the provisions of this section, or unless such 
 oumer, vAth the approval of the board {to be given only if because of the smallness of f
 
 PROMOTION AND MAINTENANCE OF THE AMERICAN MARINE. 17 
 
 amount involved the board deems it best for the interests of the United States), applies such 
 amount on any mortgage indebtedness due to the United States for the purchtise of ships. 
 
 That during the period of ten years from the enactment of this Act any person a citizen 
 of the United States who may sell a ressel built prior to January 1, 1914, shall be exempt 
 from all income taxes that would be payable upon, any of the proceeds of such sale if the 
 entire proceeds thereof shall be invested in the building of new ships in American shipyards, 
 such sfiips to be documented under the laws of the United States and to be of a type approved 
 by the board. 
 
 The Secretary of the Treasury, the Secretary of Commerce, and Oie chairman of the board 
 are hereby authorized and directed to determine from time to time what shall be alloued for 
 annual depreciation of vessels purchased from the. UnAted States, or vessels completed in the 
 United States, since November 11, 1918, in order that the owners of such vessels shall, with 
 respect to the capital cost thereof, be put as nearly as may be on a parity ivith the owners of 
 ships under the flag of our foreign competitors in the world's carrying trade, and sudi 
 allowances shall be embraced in the deductions allowed by law in determining the net income 
 subject to income taxes and war-profits and excess-profits taxes; and if said Secretaries and 
 the chairman of the board are unable to reach a unanimous decision in such matter, it shall 
 be referred to the President and his decision shall govern therein. 
 
 Sec. 2S. That all mails oj the United States shipped or carried on vessels shall, if prac- 
 ticable, be shipped or carried on American-built vessels documented under the laws of the 
 United States. No contract vnth the I'ostntaster General for carrying mails on vessels so 
 built and documented shall be assigned or sublet, and no mails covered by such contract 
 shall be carried on any vessel not so built and documented. No money shdl be paid out 
 of the Treasury of the Unittd States on or in relation to any contract for carrying mails on 
 vessels so built and documented when such contract has been assigned or sublet or when 
 mails covered by such contract are in violation of the terms thereof carried on any vessel not 
 80 built and documented. The board and the Postmaster General, in aid of the develop- 
 ment of a merchant marine adequate to proviik for the maintenance and expansion of the 
 foreign or coastwiae trade of the United States and of a satisfactory postal service in con- 
 nection therewith, shall from time to time determine the proper rate of compensation to be 
 paid for such service, and the Postnuister General is hereby authorized to enter into con- 
 tracts to pay for the carrying of such mails in such vessels at such rate. 
 
 Sec. 21 . That for the classification of vessels owned by the United States, and for such 
 other purposes in connection therewith as are the proper functions of a classification bureau, 
 all departments, boards, bureaus, and commissions of the Government are hereby directed 
 to recognize the American Bureau of Shipping or any other similar organization approved 
 by the board composed of American citizens, chartered in the United States, and 90 pe^ 
 centum of whose surveyors shall be American citizens, as their agency so long as the Ameri- 
 can Bureau of Shipping or such approved organization continues to be maintained as an 
 organization which has no capital stock and pays no dividends: Provided, That the Secre- 
 tary of Ccmimerce and the chairman of the board shall each appoint one representative who 
 shall represent the Government upon the executive committee of the American Bureau of 
 Shipping, and the Bureau shall agree that these representatives shall be accepted by them 
 as active members of such committee. Such representatives of the Government shall serve 
 without any compensation, except necessary traveling expenses: Provided further. That 
 the official list of merchant vessels published by the Government shall hereafter contain a 
 notation clearly indicating all vessels classed by the American Bureau of Shipping. 
 
 Sec. 28. That cargo vessels documejited under the laws of the United States may carry 
 not to exceed twelve persons in addition to the crew between any ports or places in the United 
 States or its Districts, Territories, or possessions, or between any such port or place and 
 any foreign port, or from any foreign port to another foreign port, and such vessels shall 
 not be held to be "passenger vessels" or "vessels carrying passengers" within the meaning 
 of the inspection laws and the rules and regulations thereunder: Provided, That nothing 
 herein shall be taken to exempt such vessels from the laws, rules, and regulations respecting 
 life-saving equipment: Provided further, That when any such vessel carries persons other 
 than the crew as herein provided for, the owner, agent, or master of the vessel shall first 
 notify such persons of the presence on board of any dangerous articles, as defined by law, 
 or of any other condition or circumstance which would constitute a risk of safety for pas- 
 senger or crew. 
 
 Failure on the part of the owner, agent, or master of the vessel to give such notice shall 
 subject the vessel to a penalty of f. 500, which may be mitigated or remitted by the Secretary 
 of Commerce upon a proper representation of the facts. 
 
 Sec. 29. That no merchandise shall be transported by water, or by land and ivater, on 
 penalty of forfeiture thereof, between points in the United States, including Districts, Ter- 
 ritories, and possessions thereof embraced within the coastwise laivs, either directly or via 
 a foreign port, or for any part of the transportation, in any other vessel than a vessel built 
 
 116737—20 2
 
 18 PROMOTION AND MAINTENANCE OF THE AMERICAN MARINE. 
 
 in artd documented under the loics of the United States and wholly owned by persons who 
 are citizens of the United States, or vessels to which the privilege of engaging in the coast- 
 wise trade is extended by sections IS or 2 A of this Act. No agent or employee of a common 
 carrier shall check baggage, issue bills of lading, or otherwise arrange for through carriage 
 of property between ports or places in the United States, including Districts, Territories, 
 and possessions embraced u'ithin the coastrvise laws, when all or any part of the carriage is 
 in a foreign vessel, and no person in the capacity of agent or otherwise, directly or indi- 
 rectly, by means of a ticket, understanding , order, or any form of contract whatsoever, shall 
 sell or contract to sell to any person the right to travel by water, or by land and tvater, either 
 directly or via a foreign port, or for any part of the transportation, on a foreign ship, 
 between ports or places in the United States, including Districts, Territories, and posses- 
 sions embraced icithin the coastwise laivs. Any person violating any of the provisions of 
 this section shall, upon conviction, be fined in any sum not exceeding ■fil,000. 
 
 Sec. 30. That no common carrier shall charge, collect, or receive, for transportation 
 subject to the Interstate Commerce Act of persons or property, under any joint 
 rate, fare, or charge, or under any export, import, or other proportional rate, fare, 
 or charge, which is based in whole or in part on the fact that the persons or property affected 
 thereby is to be transported to, or has been transported from, any port in a possession or 
 dependency of the United States, or in a foreign country, by a carrier by water in foreign 
 commerce, any lower rate, fare, or charge than that charged, collected, or received by it for 
 the transportation of persons, or of a like kind of property, for the same distance, in the 
 same direction, and over the same route, in connection with commerce tvholly ivithin the 
 United States, unless the vessel so transporting such persons or property is, or unless it 
 was at the time of such transportation by water, documented under the laws of the United 
 States, and owned by persons ivho are citizens of the United States. Whenever the board 
 is of the opinion, however, that adequate shipping facilities to or from any port in a pos- 
 session or dependency of the United States or a foreign country are not afforded by vessels 
 so documented and owned, it shall certify this fact to the Interstate Commerce Commission, 
 and the commission may, by order, suspend the operation of the provisions of this section 
 with respect to the rates, fares, and charges for the transportation by rail of persons and 
 property transported from, or to be transported, to such ports, for such length of time and 
 under such terms and conditions as it may prescribe in such order, or in any order supple- 
 mental thereto. Such suspension of operation of the provisions of this section shall be 
 terminated by order of the commission whenever the board is of the opinion that adequate 
 shipping facilities-by such vessels to such ports are afforded and shall so certify to the com- 
 mission. 
 
 Sec. 31. That the word "association," wherever used in this section, means any asso- 
 ciation, exchange, pool, combination, or other arrangement between or among persons. 
 
 That the words "marine insurance companies," wherever used in this section, means any 
 persons authorized to write marine insurance or reinsurance under the laws of the United 
 States or of a State, Territory, District, or possession thereof. 
 
 That nothing contained in the Act entitled "Aii Act to protect trade and commerce 
 against unlawful restraints and monopolies," approved Jxdy 2, 1890, or in the Act entitled 
 "An Act to supplement existing laws against unlawful restraints and monopolies, and 
 for other purposes," approved October 15, 1914, or in any other antitrust law, shall be 
 construed as declaring to be illegal an association entered into by marine insurance com- 
 panies for thefollowing purposes only: {1) Reinsuring or otherwise distributing or dividing 
 their risks on hulls, cargo, or other interests entering into our inland, coastwise, or foreign 
 trade; and (2) transacting an insurance or reinsurance business in foreign countries, pro- 
 vided such association is not used in furthering unfair methods of competition against 
 domestic competitors, or is otherwise unfairly restraining trade. 
 
 That every association, in order to obtain the benefits of this section, shall within thirty 
 days after the enactment of this Act or after its creation file ivith the board (1) a verified 
 written statement setting forth the names and location of its officers, managers, and members, 
 and, if a corporation, a copy of its certificate or articles of incorporation and by-laws, and, 
 if unincorporated, a copy of its articles or contract of association, and on the 1st day of 
 January of each year thereafter it shall make a like statement of the location of its ojjlces 
 or places of business and the names and addresses of all its officers, managers, and members 
 and of all amendments to and changes in its articles or certificate of incorporation or in 
 its articles or contract of association; (2) a true copy, or, if oral, a true and complete memo- 
 randum, of every agreement or arrangement, or modification or cancellation thereof, which 
 may have been entered into for purposes of reinsurance or division of risks; and {3) such 
 information as the board may require as to its organization, business conduct, practices, 
 management, and relation to other associations or persons. 
 
 Whenever the board believes that an association or any agreement or arrangement made 
 or act done by such association is furthering unfair methods of competition against donwslic 
 competitors, or otherwise unfairly restrains traile within the United Sidles, or any Territory, 
 District, or possession thereof, it shall summon such association, its officers, managers, and
 
 PROMOTION AND MAINTENANCE OF THE AMERICAN MARINE. 19 
 
 agents, or officers, mnnaqer, and afjents of the marine insurance companies composing or 
 affiliated with the assoriation, and thereafter conduct an investigation into the facts. Upon 
 investigation, if it shall conclude that the association or any act done kij the association is 
 furthering unfair methods of competition or is unfairly restraining trade, it may make to 
 t,uch assoanion recommendations for the readjustment of its b^tsiness. Ijf snch association 
 fails to comply with such recommendations, th board shall refer its findings and recommeiida- 
 tions to the Attorney General of the United States for such action thereon as he may deem 
 ■proper. 
 
 For the purpose of enforcing the provisions of this section the board shall have all the 
 powers, so far as applicable, given to it in the "Shipping Act, 1916." 
 
 Sec. S2. Any person hereafter furnishing repairs, supplies, or other necessaries, including 
 toivage and the use of dry dock or murine railiray, to any vessel, whether foreign or domestic, 
 upon the order of the owner of such vessel, or of a person by them or him authorized, shall 
 hare a maritime Hen on the vessel which may be enforced by proceeding in rem, and it shall 
 not be necessary to allege or prove that credit v:as given to tlie vessel; but such lien, and all 
 other liens hereafter arising out of, or created by, any contract, express or implied, or for 
 damages in the nature of demurrage not arising out of tort, except liens for wages of crew 
 and of stevedores vheyi employed by the owner, master, ship's husband, or agent of said 
 vessel, general average and .vdvage, including contract salvage (which shall be known as pre- 
 ferred liens and rank among themselves as they now do under the maritime law) shall be 
 subordinate to the lien of any mortgage duly recorded in the office of the collector of customs 
 and noted on the certificate of registry, or of enrollment and license, as hereinafier provided, 
 prior to the creating of such lien or liens, and any vessel sold under any such subordinate 
 lien shall be sold subject to, and such sale shall not impair, the lien of any such prior re- 
 corded and noted mortgage. 
 
 If any mortgaged vessel is sold under a decree in admiralty founded on a preferred lien 
 as hereinabove defined, or on a iparitime tort, s^ich sale shall divest all liens as they now are 
 divested by the maritime law of the United States on similar judicial sales, and the proceeds 
 derived therefrom, after deducting marshal's fees, poundage, and other costs taxed by the 
 court, shall be distributed to the parties and intervenors in such proceedings in accordance 
 with the priorities of their respective liens on the vessel. 
 
 That no mortgage on the whole of any vessel of the United States of two hundred gross 
 tons and upward shall be valid against any person other than the mortgagor, his or its 
 heirs, administrators, executors, successors, or assigns, and persons having actual notice 
 thereof, or shall be subject to the provisions of this section, unless such mortgage is accom- 
 panied by the affidavits of the mortgagor and the mortgagee that it is made in good faith 
 and without any design to hinder, delay, or defraud existing or future creditors of the mort- 
 gagor or lienors of the mortgaged vessel, and unless it is recorded and indorsements are 
 made upon said vessel's certificates of registry or of enrollment and license, as hereinafter 
 provided. Such mortgage, luhen in compliayice with this section, shall constitute a lien 
 on the vessel, and the mortgm^e indebtedness shall bear such rate of interest as shall be 
 agreed by the parties. 
 
 Such mortgage shall not be given, or assigned, to anyone other than a person who is a 
 citizen of the United States, without the consent of the board. 
 
 If the parties to any mortgage on any vessel ofth9 United States shall so stipulate therein, 
 such mortgage shall not be subject to the provisioyis of this section, but shall remain subject 
 to the provisions of sections 4192, 4193, and 4194 of the Revised Statutes of the United 
 States. 
 
 A mortgage within the purview of the preceding paragraphs of this section shall be recorded 
 in the office of the collector of customs where the mortgaged vessel is permanently registered, 
 or enrolled and licensed: Proiyided, That if n permanent certificate of registry, or of enroll- 
 ment and license, has not been issued at the lime of the execution of the mortgage, such 
 mortgage shall be temporarily recorded in the office of the collector of customs xvhere such 
 vessel is then temporarily registered, or enrolled and licensed, and shall thereafter be rere- 
 corded in the office of the collector of customs where and at the time such vessel is permanently 
 registered, or enrolled and licensed. Such rerecording shall ipso facto discharge the tem- 
 porary record. 
 
 Certificates of partial payments, and of final discharge, of the mortgage indebtedness, 
 executed by the mortgagee, shall be filed by the mortgagor, and notices of claims of liens 
 on any mortgaged vessels, and certificates of discharge thereof, may be filed by any lienor, 
 in the office of the collector of customs where any such mortgage is of record. Such afore- 
 said notice shall set forth the name and address of the lienor, the date of creation of the lien, 
 the amount thereof, and briefl.y the nature of the lien. Said mortgages, certificates, and 
 notices shall he acknowledged before a notary public or other officer authorized to take 
 acknowledgment of deeds. ' 
 
 Collectors of customs, in whose offices any such mortgages are recorded, shall indorse 
 upon the mortgaged vessel's certificate of registry, or of enrollment and license, a notation 
 sett ing forth the place and date of the recording of such mortgage, the date of maturity thereof,
 
 20 PROMOTION AND MAINTENANCE OF THE AMERICAN MARINE. 
 
 the names of the mortgagor and mortgagee, the amount of secured indebtedness stated in the 
 mortgage, and the amounts and dates of any partial payments stated in the recorded certifi- 
 cates thereof : Provided, That if such mortgage cova's more than one vessel or other property, 
 said indorsement shall also state the amount upon payment of which said vessel may he 
 discharged from such mortgage. 
 
 Said indorsement shall thereafter be made by all collectors of customs upon each and 
 ecery certificate of registry, or of enrollment and license, whether permanent or temporary, 
 issued by them., under which said vessel shall operate, until the mortgage is fully discharged. 
 Jf at the time of recording the mortgage or any certificates of partial payvunts or of final 
 di^scharge, the mortgaged vessel is not in a port of the United States, or is in a port of the 
 United States without the district in which such instruments are recorded, then the collector 
 of customs recording such instruments shall, upon request of the mortgagor or the mortagagee, 
 or his or their assigns, notify, in writing or by telegram, the collector of cu^tov^s for the 
 district in which said vessel is the^i situated, or, if said vessel is not then in a United States 
 port, ihe collector of customs for the district in which said vessel thereafter first enters, of the 
 recording of such mortgage and of any cei'tificates of partial payment, or of final discharge, 
 and of ihe facts necessary to make the aforesaid indorsements, and upon receipt of such 
 advices it shall be the duty of the collector of customs so notified forthwith to indorse such 
 notations upon the vessel's certificate of registry, or of enrollment and license. N^o clear- 
 ance shall be granted any mortgaged vessel unless such certificate bears such indorsement. 
 The collector of customs recording such mortgage shall certify to and deliver one or more 
 copies thereof to the mortgagor, tcho shall place and tise due diligence to retain one copy on 
 board such mortgaged vessel, and shall also use such diligmce to cause such copy and the 
 certificate of registry, or of enrollment and license, to be exhibited by the master to any person 
 having business with sucJi vessel, or the oivner thereof, which may give rise to a maritime lien 
 thereon . 
 
 Collectors of customs shall record all such aforesaid instruments, and the fact and date 
 of the indorsement of any notation on certificates of registry, or of enrollment and license, 
 in books kept for that pier pose, which shall be indexed to show the name of the mortgaged 
 'vessel, the names of the parties to any such instrument, and the time of filing for record, 
 and shall certify to the status of the mortgage record at any tiine upon the request of any 
 person. 
 
 Collectors of customs shall receive for recording any instrument, or taking any acknorvledg- 
 ment, or giving any notice, or furnishing any certificate required by this section, a fee of 
 fl; and for furnishing a certified copy of any recorded mortgage or of any certificate of 
 partial payment, or of final discharge, or of any notice of claim of lien, or certificate of 
 discharge thereof, a fee of ^2; and shall be paid the co.'st of any telegram sent to other collectors. 
 
 The mortgagor shall disclose to the mortgagee in writing, prior to the execution of any 
 mortgage, the existence of any obligation or liability constituting a lien on the vessel to 
 be mortqaqed then known to such mortgagor, and shall not incur- any contractual obliga- 
 tion creating a lien upon the vessel without the consent of the mortgagee, other than for 
 crews' and stevedores' ivages when incurred as hereinafter provided, general average and 
 salvage, including contract salvage, after the execution of any such mortgage and before 
 the mortgagee shall have had a reasonable time to record the mortgage and to have the nota- 
 tion hereinbefore provided for indorsed upon the certificate of registry, or of enrollment 
 and license. The mortgagor, and if the mortgagor be a corporation, the president, or other 
 principal executive officer thereof who willfully violates any provision of this section shall 
 be guilty of a misdevuanor. and punishable for each offense by a fine not exceeding $1,000, 
 or by imprisonment not exceeding two years, or both, in the discretion of the court, and the 
 mortgage indebtedness shall thereupon immediately become due and payable at the election 
 of the mortgagee. The failure of the mastei- of any mortgaged vessel to exhibit the copy of 
 any mortgage placed on board thereof, or the vesscVs certificate of registry, or of enrollment 
 and licen.se, to any person entitled to examine the same, shall render his license subject to 
 suspension or cancellation by the officers of the United States Steamboat-Inspection Service 
 having jurisdiction thereof. 
 
 Any person who willjully and knowingly deposes falsely in the affidavit required by this 
 section to accompany the mortgage shall be guilty of perjury and punishable by a fine not 
 exceeding -^5,000, or by imprisonment not exceeding five years, or both, in the discretion of 
 the court. 
 
 If any person enters into any contract with the owner, master, ship's husband, or other 
 agent of any vessels affected by such mortgage as may be filed, reiorded, and noted as herein 
 provided, and suffers pecuniary loss, damage, or injury by reason of any failure to make 
 the notations or disrlasurcs, or to communicate the information required by this section 
 in respect of such mortgage, or by reason (f any misreprese ntations concerning the same or 
 tlie bona fides of the mortgage, the party so injured may have and maintain, in any court 
 obtaining by personal service jurisdiction of the person of the defendant, an action to recover 
 damages compercsatory for su'xl loss, damage or injury, such action to be brought against
 
 PROMOTION AND MAINTENANCE OF THE AMERICAN MARINE. 21 
 
 the, prrann by vhnae act. omisrAon, or negligence suck loss, damage, or injury was caused. 
 The failure of any collector of customs to record any of the aforesaid instruments filed for 
 record, or to furnish certified copies thereof pur.sii ant to rei/uest, or to furnish to other col- 
 lectors of customs the information, ref/uired to ht furnished by this .section, shall constitute 
 actionable acts, omissions, and negligence. If any plaintiff in any such action recover 
 judgment for damages, hov;ever small, it shall be the duty of the court entering judgment 
 to allow and add to said judgment so entered a reasonable counsel fee, assessed by the court, 
 which shall be a part of said judgment, and for the recovery of ivliicJi ulainlill shall be entitled 
 to all the ronedies availahlefor the enforcement e)f any judgment at laio. 
 
 The district courts of the United States are hen by given jurisdiction, but not to the ex- 
 clusion of the cinirts of the .several States, Territories, Districts, and possessions ejf the 
 United States, of any such action, irrespective of the amount in controversy or the citizen- 
 ship or residence of the parties, whenever the action is begun by personal service on a de- 
 fendant uithin the limits of the district in which such action is brought. 
 
 Jurisdiction is hereby veste/1 in the district courts of the United States to impose the penalties 
 hereinbefore provided and to foreclose any mortgage recorded and note/I on the certificates of 
 registry, or of enrollment and license, as hereinbefore provided, upon the maturity of any such 
 mortgage or defau It in am/ of the terms or conditions thereof. Siiitfor suchforeclosure may be 
 commenced and maintained in a proceeding in equity in which the mortgaged vessel itself 
 shall be named as the defendant in any district court of the Unit&l States in which the vessel 
 is situated by atlwhing the vessel and by such pitblication of process of such district court, 
 with citidion to all the trorld, as the court .shall order. Notice of the pendency of such suit 
 shall also be given by serving a copy of said citation upon the master or other ranking 
 officer or careial'er of the vessel, and also on the mortgagor or owner, and all lienors who 
 shall have recorded, ami not discharged of record, any notices of claims of liens, as heretofore 
 provided, wherever they may bej'ound uithin the United States, unless after search expressly 
 found by the court to have been made diligently and satisfactorily by the plaintiff they can 
 not be located therein. All persons having any liens on the mortgaged vessel must proceed 
 upon the same in such suit, unless the vessel be released as hereinafter provided prior to 
 intervention therefor, and shall be forever barred from thereafter proceeding thereon against 
 such vessel. 
 
 In any such suit the court may appoint a receiver and, in its discretion, authorize his 
 operation of the mortgaged vessel. Such receiver may be empowered and directed to take, 
 seize, and possess himself of said vessel, notwithstaiuling that it is at the time in the posses- 
 sion or under the control of a person claiming a 2)o,ssessory or common-lav: lien, and such 
 lien is hereby specifically subordinated to the lien of any prior mortgage recorded and noted 
 in compliance ivilh this section. 
 
 The mortgaged vessel shall be released on claim by the owner from said attachment, 
 and thereby freed from the lien of the mortgage, and from any other liens for xckich inter- 
 vention shall have been made prior to such release, but not otherwise, if the amounts of 
 the mortgagee's and intervenor's claims, ivith interest and costs already accrued, are paid 
 into court, or, if an approved stipidation, with surety, be fded tvith the court, in such form 
 and amount as the court shall direct, for the payment of such final decrees xvith interest 
 and costs, as may be made by the court, or by the appellate court, if an appeal intervenes. 
 
 IJ ihe mortgaged vessel is not released as provided m the preceding paragraph, the court, 
 on sati.'<factory proof that the vessel is in danger of lo.ss or depreciation, may, and on entry 
 of a decree of foreclosure against the defendant vessel shall, cause the vessel to be sold by 
 tJie United States marshal for the district in which such suit is brought under a writ of 
 venditioni exponas, after such notice thereof as the court shall order, to any person who 
 is a citizen of the United States, to answer any judgment that has been or may be entered 
 in such suit. On confirmation by the court of any such sale all liens on the vessel shall 
 terminate and shall thereafter attach only to the proceeds derived from such sale in accord- 
 ance with the respective priorities which the liens had or the vessel, and the purchaser of 
 the vessel shall acquire indefeasible title thereto, free and clear of all liens, as against all 
 the v)orld: and the said United States marshal making such sale, or his duly qualijied suc- 
 cessor, shall, on order by the court, execute a good and suffcient bill of sale to said property, 
 vesting such title thereto in the purchaser. The proceeds derived from such sale, after de- 
 duction of expenses alloived ana costs tared by the court, shall be applied to the payment 
 of such judgment as may be entered in such suit and of any other liens on the mortgaged 
 vessel for which intervention shall have been made, all in accordance with their respective 
 priorities: and the residue, if any, shall be paid to the mortgagor or the owner, or other 
 parties intervening, his or their heirs, executors, administrators, successors, or assigns, as 
 their interests sluill appear. 
 
 Proceedings in foreclosure under this section shall conform as nearly as may be to pro- 
 ceedings in rem in admiralty. 
 
 The mortgagee may join (he mortgagor as a party defendant in such suit by serving the 
 mortgagor personally with process of such district court wherever the mortgagor may be 
 found within the United States, and if so prayed, judgment against the mortgagor may
 
 22 PROMOTION ANn MAINTENANCE OF THE AMERICAN MARINE. 
 
 also be entered in such suit for the amount of the mortgage indebtedness, or for any deficiency 
 in the full payment of the mortgage indebtedness remaining unpaid after the application 
 thereto of all or any of the proceeds derived from the sale of the mortgaged vessel as herein- 
 before jrrovided. 
 
 Nothing contained in this section shall be construed to prejudice the mortgagee from pro- 
 ceedings in personam against the mortgagor in any other court for said mortgage indebted- 
 ness or for any deficiency in the full payment thereof. 
 
 If the mortgaged vessel is not idthin the United States at the time the right to foreclose 
 the mortgage lien accrues, the mortgagee inay mmntain an action in personam for the 
 mortgage indebtedness against the mortgagor in the district court of the United States 
 uithin the jurisdication of uhich the viortgagor resides, by serving process of such court 
 personally upon the mortgagor wherever found uithin the United States. In such suit 
 the mortgagee shall have the right to have the validity of the mortgage lien on the mortgaged 
 vessel adjudicated. 
 
 Nothing contained in this section shall be deemed to change the priority fixed by the viari- 
 time law of the United States as between preferred liens and liens arising from maritime 
 torts. 
 
 ThefoUoidng persons shall be presumed to have authority from the oumer or ovmers to 
 procure repairs, supplies, and other necessaries for the vessel: The managing owner, ship's 
 husband, master, or any person to whom the management of the vessel at the port of supply 
 is intrusted. No person tortiously or unlaicfully in possession or charge of a vessel shall 
 have authority to bind the vessel. 
 
 The officers and agents of a vessel specified in the preceding paragraph of this section 
 shall be taken to include such officers and agents ichen appointed by a charterer, by an oumer 
 pro hac vice, or by an agreed purchaser in possession of the vessel, but nothing in this sec- 
 tion shall be construed to confer a lien when the furnisher knew, or by exercise of reasonable 
 diligence could have ascertained, that because of the terms of a charter party, agreement for 
 sale of the vessel, or for any other reason, the person ordering the repairs, supplies, or other 
 necessaries was without authority to bind the vessel therefor. 
 
 This section shall supersede the provisions of all State statutes conferring liens on ves- 
 sels, in so far as the same purport to create rights of action to be enforced by proceedings in 
 rem against vessels for repairs, supplies, and other necessaries. 
 
 The lien of any mortgage may be waived, or subordinated to any other lien, by the mort- 
 gagee, or by any trustee under the mortgage tf, and to the amount, authorized by the mortgage. 
 
 This section shall not apply to any existing mortgage, or to any mortgage hereafter placed 
 on any vessel now under an existing mortgage, unless and until the mortgagor and mortgagee 
 of any such existing mortgage mutually agree in writing to be bound by the provisions 
 hereof and comply therewith. 
 
 As used in this section, the word "mortgagee" shall include a trustee under any mortgage 
 subject to the provisions of this section. 
 
 The Secretary of Commerce is hereby authorized and directed to furnish collectors of 
 customs with all necessary books and records, and with certificates of registry and of enroll- 
 ment and license in such form as shall provide for the making of the hereinbefore required 
 indorsements on the back thereof. 
 
 The Act entitled "An Act relating to liens on vessels for repairs, supplies, or other nec- 
 essaries," approved June 23, 1910, and all other Acts or parts of Acts are hereby repealed 
 80 far as they are inconsistent with the provisions of this section. 
 
 Sec. .33. Tliat section 4530 of the Revised Statutes of the United States is amended to 
 read asfolloivs: 
 
 "Sec. 4-530. Every seaman on a vessel of the United States shall be entitled to receive 
 on demand from the master of the vessel to which he belongs one-half part of the balance of 
 his wages earned and remaining unpaid at the time when such demand is made at every port 
 where such vessel, after the voyage has been commenced, shall load or deliver cargo or take 
 in fuel before the voyage is ended, and all stipulations in the contract to the contrary shall 
 he void: Provided, Such a demand shall not he made before the expiration of, nor oftcner 
 than once in, five days nor more than once in the same harbor on the same entry. Any 
 failure on the part of the master to comply with this deniand shall release the seaman from 
 his contract and he shall be entitled to full payment of ivages earned. And ivhen the voyage 
 is ended every such seaman shall be entitled to the remainder of the inigcs which shall be 
 then due him. as provided in .tection 45^9 of the Revised Statutes: Provided further, That 
 notwithstnndirig any release signed by any seaman under section 455i of the Revised Statutes 
 any court having jurisdiction may upon good cause shouii set aside such release and take 
 such action as justice shall require: And provided further, That this section shall apply to 
 seamen on foreign vessels irhile in, harbors of the United States, and the courts of the United 
 Stfiles shall he open to .such seamen for its enforcement. " 
 
 Sec. 34. That paragraph (a) of section 11 of the Act entitled "An Act to remove certain 
 burdens on the American merchant mxirine and encourage the American foreign carrying 
 trade, and for other purposes," approved June 26, 1834, as amended, is hereby amended 
 to read as follows:
 
 PROMOTION AND MAINTENANCE OF THE AMERICAN MARINE. 23 
 
 "Sec. 10. (a) That it shall be, and is hereby, made nnlairful in any case to pay any 
 seaman waqes in advance nj the time when he has actually earned the same, or to pay such 
 arlvdvce ica(/es, or to make any order, or note, or other evidence cjf indebtedness therefor to 
 any oilier person, or to pay any person, for the shipment of seamen vhen payment is deducted 
 or to be deducted from a seaman's waqes. Any person violating any of the foreyoing pro- 
 visions of this section shall be deemed miilty of a misdemeanor, and upon conviction shall 
 be pnnishc/ by a fine of nut Ic.t.s tiuin ^J5 nor more than $100, and may also be imprison&l 
 for a period of not exceeding six months, at the discretion of the co-urt. The piayment of 
 such advance wages or allotment, whether made within or without the United Stoics or 
 territory subicct to the jurisdiction thereof, shall in no cose except as herein provideil rdisolve 
 the vessel or the master or the owner thereof from the full payment of wages after the same 
 shall have been acliudly earned, and shall be no defense to a libel suit or action for the 
 recovery of such wages. Jf any person shall demand or receive, either directly or indirccily, 
 from, any seaman or other person seeking employment, as seaman, or from any person on 
 his behalf, any remuneration whatever for providing him with employment, he shall for 
 every such offense be deemed guilty of a misdemeanor and shall be imprisoned not more 
 than s/.r months or fined not more than $500.^' 
 
 Sec. .35. That the second proviso of the first paragraph of section IS of the Act entitled 
 "An Act to promote the welfare of American seamen in the merchant marine of the United 
 Slates, to abolish arrest and imprisonment as a penalty for desertion and to secure the 
 ahrogalion of treaty provisions in relation thereto, and to promote safety at sea,'^ approved 
 March 4, 191f>, is amended to read asfolloujsi 
 
 " Provided further, That upon examination under rules prescribed by the Department of 
 Commerce as to eyesight, hearing, physical condition, and knowledge of the duties of sea- 
 manship, a citizen of the United States found competent may be rated as able seaman 
 after having served on deck twelve months at sea or on the Great Lakes; but seamen exam- 
 ined and rated able seamen under this proviso shall not in any case compose more than 
 one-fourth of the number of able seamen required by this section to be shipped or emjdoyed 
 upon any vessel except that any American citizen rated as able seaman under this proviso, 
 who has served one year at sea or on the Great Lakes after securing such rating, shall not 
 be included as composing a part of the one-fourth of such able seamen under this proviso.^' 
 
 Sec. 36. That section 20 of such Act of March 4, 1915, be, and is, amended to read as 
 follows: 
 
 "Sec. 20. That any seaman who shall suffer personal injury in the course of his em- 
 ployment may, at his election, maintain an action for damages at law, with the right of 
 trial by jury, and in such action all statutes of the United States modifying or extending 
 the cominon-law right or remedy in cases of personal injury to railway employees shall 
 apply; and in case of the death of any seaman as a result of any such personal injury the 
 personal representative of such seaman may maintain an action for damages at law with 
 the right of trial by jury, and in such action all statutes of the United States conferring or 
 regulating the right of action for death in the case of railway employees shall be applicable." 
 
 Sec. 37. That in the judgment of Congress, articles or provisions in treaties or con- 
 ventions to which the United States is a party, tchich restrict the right of the United States 
 to impose disiriminating customs duties on imports entering tlie United States in foreign 
 vessels and in vessels of the United States, and ichich also restrict the right of the United 
 States to impose discriminatory tonnage dues on foreign vessels and on vessels of the United 
 States entering the United States should be terminated, and the President is hereby author- 
 ized arid directed within ninety days after this Act becomes laiv to give notice to the several 
 Governments, respectively, parties to such treaties or conventions, that so much thereof 
 as imposes any such restriction on the United States will terminate on the expiration of 
 such periods as may be required for the giving of such notice by the provisions of such 
 treaties or conventions. 
 
 Sec. i3 3S. That tlie power and authority vested in the board by this Act, except 
 as herein othervrise provided, may be exercised directly by the board, or by it through 
 the United States Shi])|)inff Board Emergency Fleet Corporation or other agcncic o 
 
 tPcftt'^tl pllrSlrtiiii. t'O" ilvl I HOI 1 1\' 01 ItiW . 
 
 Sec. 8d 39. That if any provision of this Act is declared unconstitutional or the appli- 
 cation of any provision to certain circumstances be held invalid, the remainder of Uie Act 
 ami the application of such provisions to circumstances other than those as to which it is 
 held invalid shall not be affected thereby. 
 
 Sec. 36 40. That when used in this Act, unless the sontext othericise requires, the 
 terms "person," "vessel," " documented under the laws of the Uriited States," and "citizen 
 of the United States"' shall have the meaning assigned to them by sections 1 and 2 of the 
 "Shipping Act, 1916," as amended by this Act. 
 
 Sec. 41- That section 2 of the "Shipping Act, 1916," is amended to read asfolloivs: 
 
 "Sec. 2. That within the meaning of this Act no corporation, partnership, or associa- 
 tion shall be deemed a citizen of the United States unless all the stock and securities of such 
 corporation, partnership, or association are at all times wholly and bona fide owned by
 
 24 PROMOTION AND MAINTENANCE OF THE AMERICAN MARINE. 
 
 citizens of the United States, and, in the case of a corporation, unless in addition to such 
 requirement, its president and directors are citizens of the United States, and the corpora- 
 tion itself is organized under the laws of the United States, or of a State, Territory, District, 
 or possession thereof. 
 
 A corporation shall not be deemed to be so oivned by citizens of the United States (a) if 
 the title to all of its stock and other securities is not vested in such citizens, free from any 
 trust or fiduciary obligation in favor of any person not a citizen of the United States; or 
 (b) if all the voting power in such corporation is not vested in citizens of the United States; 
 or{c) if, through any contract or understanding, it is so arranged that voting power in such 
 corporation may be exercised, directly or indirectly, in behalf of any person who is not a 
 citizen of the United States; or {d) if by any other means u^hatsoever control of any interest 
 in the corporation is conferred upon or permitted to be exercised by any person who is not 
 a citizen of the United States: Provided, That for the purpose of operating vesseb exclu- 
 sively in foreign commerce a corporation, partnership, or association organized and offi- 
 cered as provided in this section shall be deemed a citizen of the United States if at least 75 
 per centum of its stock and other securities are at all times bona fide owned by citizens of 
 the United States, free from any trust or fiduciary obligation in favor of any person not a 
 citizen of the United Stales." 
 
 Sec. iS 42. That this Act may be cited as the Merchant Marine Act, i9i& 1920. 
 
 Passed the House ot Representatives November 8, 1919. 
 
 Attest: Wm. Tyler Page, Clerk. 
 
 The follomng are statements and tables submitted by Judge John 
 Barton Payne and excerpts from his testimony before the Committee 
 on Commerce when he was chairman of the Shipping Board: 
 
 ORIGINAL CONSTRUCTION PROGRAM. 
 
 Ships placed by contracts and requisitioned by Emergency Fleet Corporation. 
 
 
 Original program. 
 
 Canceled. 
 
 Active. 
 
 Class. 
 
 Number. 
 
 Dead- 
 weight 
 tons. 
 
 Number. 
 
 Dead- 
 weight 
 tons. 
 
 Number. 
 
 Dead- 
 weight 
 tons. 
 
 
 419 
 
 1,727 
 
 1,017 
 
 50 
 
 43 
 
 2,963,406 
 11,756,920 
 
 3,052,200 
 175,000 
 302,000 
 
 35 
 422 
 425 
 32 
 31 
 
 276, 140 
 
 2,884,475 
 
 1, 155, 700 
 
 122,000 
 
 228,500 
 
 384 
 1, 305 
 
 592 
 18 
 12 
 
 2,687,266 
 
 
 8,872,445 
 
 
 1,896,500 
 
 
 63,000 
 
 
 73,500 
 
 
 
 Total 
 
 3, 250 
 
 18,249,526 
 
 945 
 
 4,656,815 
 
 2,311 
 
 13,592,711 
 
 
 
 Program analyzed. 
 
 Dead-weight 
 
 tons. 
 
 Delivered 10, 064, 477 
 
 Being outfitted 1, 204, 826 
 
 On ways 3,916,608 
 
 Keels not laid 406, 800 
 
 Total 33, 592, 711 
 
 Analysis of active program, 2,311 vessels of 13,592,711 dead-weight tons. 
 
 Dead- 
 weight 
 ton.s. 
 
 Vessels sold 
 
 Wooden vessels 
 
 Wooden hulls, no machinery. 
 
 tileel delivered 
 
 Bteel yet to come 
 
 Wood yet to come 
 
 Concrete yet to como 
 
 13,594,811 
 2,100 
 
 Net 13,592,711 
 
 Total 
 
 Deduct difTerence between contract tonnage and actual . 
 
 1,134,586 
 
 1,060,660 
 
 808,000 
 
 7,063,335 
 
 3,381,030 
 
 87,200 
 
 60,000
 
 PROMOTION AND MAINTENANCE OF THE AMERICAN MARINE. 25 
 
 Steel vessels on hand and to he constructed by Emergency Fleet Cor-poration. 
 
 Class. 
 
 Steel 
 Steel 
 Steel 
 Steel 
 Steel 
 Steel 
 Steel 
 
 eargo 
 
 tankers 
 
 refiif.'erator 
 
 transports 
 
 iiassenger and cargo. 
 
 liari;es 
 
 tugs 
 
 Total 
 
 Vessels on hand. 
 
 Number. 
 
 1,018 
 
 48 
 10 
 
 34 
 
 Dead- 
 weight 
 tons. 
 
 Vessels to be 
 constructed. 
 
 Number. 
 
 6,478,850 
 
 438,445 
 117,090 
 
 Dead- 
 weight 
 tons. 
 
 297 
 52 
 
 1 
 
 12 
 20 
 
 5 
 11 
 
 2,221, 
 
 498, 
 
 y, 
 
 90, 
 33S, 
 20, 
 
 1.119 7,049,935 
 
 404 3,183,504 
 
 Total. 
 
 Number. 
 
 1,315 
 100 
 17 
 12 
 29 
 5 
 45 
 
 1,523 
 
 Dead- 
 weight 
 tons. 
 
 8,699,939 
 937, 120 
 127,090 
 
 96,000 
 352,950 
 
 20,400 
 
 10,233,499 
 
 Oil burners in active program as of Feb. 10, 1920. 
 
 
 Percent. 
 
 Dead- 
 weight 
 tons. 
 
 Oil, dead- 
 weight 
 tons 
 
 Delivered: 
 
 Oil 
 
 30 
 33 
 25 
 
 3,023,212 
 3,925,140 
 2. .Mli 120 
 
 3,023,212 
 
 Coal 
 
 Coal and oil 
 
 
 Building: 
 
 Oil 
 
 47 1 1,407,034 
 13 4n.->.7^i 
 
 1,407,034 
 
 Coal 
 
 Coal and oil 
 
 40 
 
 63 
 37 
 
 1,248,574 
 
 200,285 
 149,515 
 
 
 Number keels laid: 
 
 Oil 
 
 206,285 
 
 Coal and oil 
 
 
 
 Analysis of all vessels owned and operated by the United Stales Shipping Board. 
 
 Steel cargo 
 
 Wood cargo 
 
 Steel tankers 
 
 Wood tanker 
 
 Steel refrigerators . 
 Steel passengers... 
 Steel tugs 
 
 ,046 
 276 
 48 
 1 
 16 
 39 
 34 
 
 Wood tugs 
 
 Steel barges 
 
 Wood barges.. . 
 Concrete cargo. 
 
 Total.... 
 
 34 
 10 
 
 14 
 4 
 
 1,523 
 
 Built owned steel cargo vessels by sizes. 
 
 
 Cargo. 
 
 Refrigerators. 
 
 Tankers. 
 
 Total. 
 
 
 Num- 
 ber. 
 
 Dead- 
 weight 
 tons. 
 
 Num- 
 ber. 
 
 Dead- 
 weight 
 tons. 
 
 Num- 
 ber. 
 
 Dead- 
 weight 
 tons. 
 
 Num- 
 ber. 
 
 Dead- 
 weight 
 tons. 
 
 2,999 dead- weight tons and under. 
 3,000 to 3,999 dea<l- weight tons 
 
 44 
 
 189 
 186 
 118 
 13 
 125 
 
 121,633 
 701,307 
 
 706, 898 
 
 040,940 
 
 82, 803 
 
 999. 823 
 
 
 
 
 44 
 189 
 187 
 122 
 
 18 
 133 
 228 
 124 
 
 65 
 
 121 633 
 
 1 
 
 
 701 367 
 
 4,000 to 4,999 dead-weight tons 
 
 5,000 to 5,999 dead- weight tons 
 
 6,000 to 6,999 dead-weiglit toas 
 
 7,000 to 7,999 dead-weight tons 
 
 
 i 4,800 
 
 771 698 
 
 4 2i,034 
 3 ! 18,282 
 
 602, 574 
 
 114,082 
 
 1,057 524 
 
 2 
 8 
 5 
 9 
 23 
 
 12,997 
 57, 701 
 44,895 
 82,037 
 236,015 
 
 8,000 to 8,999 dead-weight tons 
 
 9,000 to 9,999 dead-weight tons 
 
 10,000 dead-weight tons and over. . 
 
 217 11,825,253 
 112 '1,055,700 
 42 481,977 
 
 6 ! 49,574 
 3 1 28,200 
 
 1,919,722 
 
 1,160,511 
 
 717,992 
 
 
 
 
 Total 
 
 1,046 0.070.908 
 
 16 117.090 
 
 48 4.38. 44.=; 
 
 1,110 
 
 7, 233, 103 
 
 
 
 
 
 
 
 ' 
 
 
 451667
 
 26 pro:motion axd maintenance of the American marine. 
 
 Mr. Payxe. Financial. Total appropriations by Congress, $3,181,451,000; total 
 other receipts, $244,840,726.75: total appropriations and receipts, $3,426,291,726.75; 
 total expenditures, $3,137,311,816.61; total available balance to date, January 31, 
 1919, $288,979,910.14. 
 
 Estimated available fimds from January 1 to June 30, 1920, not including money 
 due from the Armv but including the above balance, operations, sales of ships, and 
 sales of supplies, $372,000,000. 
 
 Estimate disbursements for same period, not including cost of reconstruction of 
 ex-German ships, $307,000,000. 
 
 Estimated balance June 30, 1920, $65,000,000. 
 
 The Chairm.a-n. That table may go in the record at this point. 
 
 (The table referred to is as foUoWs:) 
 
 Consolidated statement of construction appropriations, receipts, and expenditures as at 
 
 Jan. 31, 1920. 
 
 Total appropriations $3, 181, 451, 000. 00 
 
 Total receipts 244, 840, 726. 75 
 
 Total appropriations and receipts: 3, 426, 291, 726. 75 
 
 Total expenditures 3, 137, 311, 816. 61 
 
 Total available balance to date 288, 979, 910. 14 
 
 Estimated available funds from Jan. 1 to June 30, 1920, not in- 
 cluding money due from Army but including above balance, 
 operations, sales of ships, and sales of supplies 372, 000, 000. 00 
 
 Estimated disbursements for same period, not including cost of 
 reconstruction of ex-German ships 307, 000, 000. 00 
 
 Estimated balance June 30, 1920 65, 000, 000. 00 
 
 Mr. Payne. Eesults of operation. Voyage revenues from operations to June 30, 
 1919. as reflected in condensed balance sheet of June 30. 1919, owned and chartered 
 vessels, $433,774,877.48; for requisitioned vessels, $140,252,279.03; total 
 $574,027,156.50. 
 
 Senator Fletcher. That is for what? 
 
 Mr. Payne. That is the total revenue from operations from the beginning to the 
 30th of last June. 
 
 Senator Fletcher. Gross revenues? 
 
 Mr. Payne. Gross revenues. Operating expenses were $196,843,411.53; charter 
 hire, $150, 050, 278.86; insurance, $31,149,007.29; repairs, $29,498,463.77; total ex- 
 penses, $407,533,161.65. A net revenue is shown of $166,493,994.85. 
 
 The Chairman. That table may go in the record at this point. 
 
 (The table referred to is as follows:) 
 
 Voyage revenues from operations to June SO, 1919, as reflected in condensed balance sheet 
 
 of June 30, 1919. 
 Income: 
 
 Owned and chartered vessels $433, 774, 877. 48 
 
 Requisitioned vessels 140, 252, 279. 03 
 
 $574, 027, 156. 50 
 
 Charges: 
 
 Operating expense 196, 843, 411. 73 
 
 Charter hire 150, 050, 278. 86 
 
 Insurance 31,149,007.29 
 
 Repairs 29, 490, 4G3. 77 
 
 407,533,161.65 
 
 Net revenue to Juno 30, 1 91 9 166, 493, 994. 85 
 
 Mr. Payne. Cash receipts and disbursements from operations to December 31, 
 1919, six months more than the last one I jii.st read. 
 
 Cash receipts from re(|uisitioned vessels, $170,124,266.39; other than requisitioned 
 vessels, $409,719,406.65; cash in bank, trust accounts, $22,758,000; total receipts, 
 $602,601,6.-^3.04.- 
 
 Ca:ih disbur.«ements, reqiiisitioned vessels, $119,589,167.44; other than requisi- 
 tioned vessels, $336,255,115.97; recruiting service, $9,207,840.66; total disburse- 
 menta, $465,052,124.07; with a net cash balance of $137,549,508.97.
 
 Illllililllllilillllll 
 
 PROMOTION AND MAINTENANCE OF THE AMERICAN MARINE. 27 
 
 The (^HAiRMAN. That table may ^o in the record at this point. 
 (The paper referred to is as follows:) 
 
 Cash receipts and disbursements from o-perations to Dec. 31, 1919. 
 
 Cash receipts: 
 
 Re(.;iiLMtioiiod vessels $170,124,220.39 
 
 Other tliau re(|insitioned vessels 409, 719. 400. 05 
 
 Cash in bank, trust accouuts 22, 758, 000. 00 
 
 $602, 601, 633. 04 
 
 Cash disbursements: 
 
 RequLsitionea vessels 11 9, 589, 167. 44 
 
 Other than requisitioneH vpssrIs 336, 255, 115. 97 
 
 Recruiting service 9, 207, 840. 06 
 
 405,052,124.07 
 
 Balance 137, 549, 508. 97 
 
 No amount is charged off for interest, depreciation, or insurance. 
 
 The followinj; statement of total cash receipts and disbursements in 
 connection with operation of vessels solely, from the bcginninf^ of 
 such operation to March 31, 1920, has been submitted by the Shipping 
 Board : 
 
 Receipts: 
 
 Requisition vessels $182, 433, 428. 40 
 
 Owned vessels 440, 234, 042. 16 
 
 Total receipts 622, 667, 470. 56 
 
 Disbursements: 
 
 Requisition vessels 122, 594, 271. 18 
 
 Owned vessels 367, 289, 418. 09 
 
 Total disbursements 489, 883, 689. 27 
 
 Balance 132, 783, 781. 29 
 
 o
 
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 LOS ANGH.es 
 
 LIBRARY j
 
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