ship operators, and the only way by which they can compete is for our Government to pay a subsidy.

Now, to operate at full blast and give you boys on the sea the same advantages as exist for shore workers, you could not any more operate the merchant marine than I could make gold out of sand. It is not in the cards; you just cannot do it.

Mr. MCKENZIE. If we say we are in favor of subsidies that will take up the slack, you will vote for the 65 cents?

Senator ELLENDER. Where will you get the money? Someone has to pay for that. You are putting yourself in a class where you want to make the other fellow pay. You are putting burdens on other people.

Mr. MCKENZIE. We are happy to pay taxes if we can afford to pay them.

Senator ELLENDER. There is a big howl now to pass the present tax bill and get 10,000,000 men from under who are complaining because they pay taxes.

Mr. HADDOCK. Mr. Chairman, just to get away from the question of subsidies, I would like for our research consultant to say a few words on it. This is a very broad question, and we are not prepared to go into it fully. Mr. McKenzie made a basic recommendation in answering Senator Ellender with respect to an international conference on this subject.

Mr. LEVINE. I would like to wait until Senator Ellender returns, because he has some misinformation which I would like to correct. Senator ELLENDER. You may correct it for the record but not for me.

Mr. LEVINE. This country does not subsidize any of its domestic shipping, and that is more than half of its merchant fleet

Senator ELLENDER. What do you mean by domestic shipping?
Mr. LEVINE. All coastal and intercoastal shipping.

Senator ELLENDER. That is within the United States?

Mr. LEVINE. Within the United States itself.

Senator ELLENDER. That is where operators are not in competition with foreign shippers?

Mr. LEVINE. They have problems. The railroads compete with them, and we are out to get an over-all program to enable shipping to live.

Now, insofar as our foreign commerce is concerned, not more than half of our ships are subsidized.

Senator ELLENDER. Why is that; why aren't they?

Mr. LEVINE. Because what you are paying subsidies for under the Merchant Marine Act is more than competition with foreign countries; you are paying a subsidy for a man to operate on a specific trade route to build up American commerce and not for the operation of ships alone. You are paying for him to run a ship on the same sea route whether there are cargoes or not, because you want the American flag to fly in that port and because you want to have an agent there to encourage business between that country and America. The con panies which do not take that commitment to sail consistently betwee particular ports but are allowed to tramp around and have great flex ibility do not receive subsidies. Many companies take the position it is more profitable for them not to take these special commitments and therefore they do not receive subsidies.

In your home port of New Orleans I think you have the Mississippi Shipping Co., which happens to be a subsidized line, but you have more unsubsidized than subsidized lines in foreign commerce.

Senator ELLENDER. Those ply between New Orleans and Florida. Mr. LEVINE. No; those ply between New Orleans and Great Brittain, South America, and the entire world. We do not subsidize our shipping solely for the benefit of American seamen. In fact, I think they should get more of the subsidy than they are getting.

Now, some facts about the actual cost of subsidies. The actual cost to the Government is limited by the recapture provision. The shipowner is allowed 10 percent of the capital invested but over and above 10 percent they have to turn the money back. On these 12 subsidized lines in the period 1936 to 1942, when subsidized operations were discontinued, after recapture your total susbidy is only about $35,000,000.

Senator ELLENDER. For how many ships?

Mr. LEVINE. Something like 155 vessels.

Senator ELLENDER. For a period of what time?

Mr. LEVINE. 1937 through 1942. For those 5 years I believe it was about $35,000,000. These companies made very large profits. It may not be so profitable in the postwar period, but your subsidy is terribly exaggerated in terms of public impression. The money we have expended in subsidies has come back to the United States in terms of having trained manpower, new ships, and great shipyards to prepare for this war. The $35,000,000 you expended on subsidies between 1937 and 1942 is nothing in comparison with the $17,000,000,000 which you expended in building a fleet during the war. It is true that the maritime unions are in favor of properly regulated subsidies. The Japanese, with a $18 wage scale, pay subsidies. We need to have an international conference and arrange rate schedules, fairness of competition, and to bring working standards everywhere up to a decent minimum, and then we will get away from subsidies.

Senator TUNNELL. If we are to have time to hear the rest of your testimony Mr. McKenzie, we should hear your additional witnesses now. You said you wanted to put two witnesses on for a few minutes. Mr. MCKENZIE. Yes.

Senator TUNNELL. Will you give your name?

Mr. SMITH. William C. Smith.

Senator TUNNELL. And your position?

Mr. SMITH. Special representative of the Pacific Coast Marine Firemen, Oilers, Water Tenders, and Wipers' Association, Independent.

TESTIMONY OF WILLIAM C. SMITH, SPECIAL REPRESENTATIVE, PACIFIC COAST MARINE FIREMEN, OILERS, WATER TENDERS, AND WIPERS' ASSOCIATION, INDEPENDENT

Mr. SMITH. Mr. Chairman and gentlemen, there are several points here that I think could be clarified a little bit. One, in particular, refers to the character of the seamen. Since the war began, our income has increased due to the bonuses that we have had. As a result, we are able to get a nicer, cleaner group of men on those ships and it has actually turned out to be a more efficient group. Now

that the war has stopped, most of them want to go home to their families, because they find they cannot make enough money on ships We do not want to lose those fellows.

There was a time in the merchant marine when the money paid to them was not enough for a decent man to rent a hotel room and get himself cleaned up in between trips, and it is almost that way now. So this 65 cents an hour minimum wage has to go through for us. These men who have started out to sea during the war are not going to stand for that differential between their job and a comparable job ashore, and it will reduce the efficiency of the merchant marine, and after all we are primarily interested in the efficiency of it.

Now, I would like to say a few words about the problem on the rivers, all of the rivers in the Central States. They are working a 12-hour day, 7 days a week, 6 hours on and 6 hours off. You do not even get proper sleep in 6 hours. Out of those 6 hours off they have to wash their faces and hands or take a shower, and eat their meals and prepare themselves for bed and get up and eat again possibly, if it is a watch where they eat twice in the same period, and then go back to work again. Those men have recently received an increase in wages, but up until just recently they were getting paid as low as 18 cents an hour. Skilled men such as deckhands were getting 42 cents an hour and they just received an increase recently that gives them a bare 55 cents. I went down there after a job on one of those ships, and I went aboard. They have women mess girls and women waitresses on those ships, and they are the filthiest characters you have ever seen, the kind of people you would not want to handle food.

Senator ELLENDER. Where are those ships operated?

Mr. SMITH. On the Mississippi River, the Ohio River, the Illinois River, the Missouri River; the Inland Waterways Corporation operates some of them.

Senator ELLENDER. That is under Government control, is it not? Mr. SMITH. Yes, sir. If I am informed correctly, the equipment is owned by the Government but operated by a private corporation. I am not sure of that but I believe that is the way the thing is handled down there.

The class of people you get on those jobs at those wages just knocks the whole thing in the head. I would not take the job after I saw the food handlers and the men I would have to be shipmates with. I have been a merchant seaman for 13 years now.

Senator SMITH. You are speaking of the morale of the whole seafaring class?

Mr. SMITH. Yes, sir. I believe, if we are given 65 cents, along with the rest of the shore-side industry, I believe we can get a finer personnel on those ships.

Senator SMITH. You want to be equalized with the shore-siders? Mr. SMITH. Yes, sir.

Senator SMITH. Do you think you can maintain in the shipping business anything like the number that have been in there during the

war?

Mr. SMITH. No; I do not think we can keep anything near that number. I do not think anywhere near that number will care to go Most of them are going to sea just because of the wartime

to sea.

emergency.

Senator SMITH. And because they got special pay for it?

Mr. SMITH. That is right. But on the other hand there are a lot of youngsters that are developing into wonderful men and are better equipped to handle the work than many we have had before. They are smart kids, but they work for less than men get ashore, and you cannot expect them to continue.

I work in the engine department, and I will cite a case in the engine department. A fireman or a water tender is a highly skilled man with the complex mechanical machinery we have in ships today. As a matter of fact, the machinery is getting more and more complex. So a fireman-water tender is getting just 65 cents an hour. A stationary engineer ashore who does comparable work will range from $1.03 to $1.20 an hour in most localities. I believe there are some places where they pay a little less, but as a general rule it is from $1.03 to $1.20 an hour.

You take a man that can go ashore and take a job at 33% percent more in wages, he certainly is not going to want a job on a ship. It is an important job and one that necessarily has to have a good, steady, dependable man, as he is handling high-pressure boilers that could kill somebody and blow up half a town.

Senator TUNNELL. You think those on the water should have comparable wages with those on the land?

Mr. SMITH. That is right. I think the merchant seamen should be included in this minimum wage bill.

I think that is about all I have.

Senator TUNNELL. Any questions? [No response.]

Where is your other man?

Mr. MCKENZIE. Coming up.

Senator TUNNELL. Give your name.

TESTIMONY OF SCIPIO COLLINS, SPECIAL REPRESENTATIVE OF

THE MARINE COOKS AND STEWARDS ASSOCIATION OF THE PACIFIC CIO

Mr. COLLINS. Scipio Collins.

Senator TUNNELL. What is your work?

Mr. COLLINS. I am a waiter aboard transports. My salary is $132 a month, with the recent increase. I have here to show you why I believe we should have an increase. This is my last take-home pay [exhibiting].

Senator TUNNELL. How much is that an hour?

Mr. COLLINS. 55 cents. I drew $284.14 for a 2 months' trip, and my rent alone is $60 a month. Prices have not come down with wages. During the war I was able to get along, with the bonuses, but now I find it difficult.

Senator TUNNELL. You mean where your family lives?

Mr. COLLINS. Yes. I feel as though we should be given this increase so we can maintain our home. I was not able to marry before the war, but I got married during the war.

Senator TUNNELL. Where is your home?

Mr. COLLINS. I am making my home in New York now.

Senator ELLENDER. How much were you getting before the war? Mr. COLLINS. $55 a month.

Senator ELLENDER, What is the extra pay that the witness said seamen were getting, amounting to $80?

Mr. COLLINS. That was the war bonus.

Senator ELLENDER, Was that during the war?

Mr. COLLINS. Yes. It started right after we went into the war. Senator ELLENDER. Then, when the witness testified a moment ago that the rate of pay before the war was different, he said it was plus the bonus, the bonus did not come into being until when the war started?

Mr. COLLINS. That is right.

Senator ELLENDER. I see.

Mr. COLLINS. Brother McKenzie has elaborated on everything I would like to say.

Senator SMITH. Are you a member of a union?

Mr. COLLINS. Yes; the Marine Cooks and Stewards of the Pacific Coast affiliated with the CIO.

Senator TUNNELL. Cooks and stewards?

Mr. COLLINS. Yes; we handle all of the food on ships.
Senator ELLENDER. How do they feed you on ships?
Mr. COLLINS. The best that can be expected.

Senator TUNNELL. "How do you feed the rest of them?" should be the question.

Senator ELLENDER. I believe the waiter takes care of himself; he looks mighty fat and in good health.

Mr. COLLINS. My wife has fattened me up since I have been home. Senator ELLENDER. I see. I suspected you would have an answer for it.

Senator TUNNELL. I think that covers it.

Senator SMITH. I think so.

Mr. MCKENZIE. In connection with the statement I have made, you can check with the records of the War Shipping AdministrationSenator ELLENDER. The reason I asked the question again was because we had a witness who lived at Baltimore and he said that his per-month pay before the war was, I think, $65 or $70, and that he got a bonus during the war. Now, the question I asked awhile ago was, as I understood it, if you were getting that all along.

Mr. MCKENZIE. I negotiated those contracts, so I know they were there.

Senator ELLENDER. But they were given during the war?
Mr. MCKENZIE. Yes, and prior to the war, too.

Senator ELLENDER. I remember asking the question, and he said he did not want to lose his bonus.

Mr. MCKENZIE. That is right.

(The statement and data submitted by Mr. McKenzie are as appear in the appendix.)

Senator TUNNELL. The committee will adjourn until Thursday morning at 10 o'clock.

(Thereupon, at 4:45 p. m., an adjournment was taken until Thursday, October 18, 1945, at 10 a. m.)