and equipment, designed for the rapid handling of cargoes in these special trades.

It is obvious that the larger the vessel the greater is its ability to absorb an increased cost of operation or to reduce the costs of transportation and in order to adjust such costs to an equitable basis the ships in our association have been classified according to their size. The classes are designated by letters, as A, B, C, D, and E. Roughly speaking

Class A are ships of over 600 feet length and upward of 7,000 tons gross register.

Class B are ships of 500 to 600 feet length and from 6,000 to 7,000 tons register.

Class C are of 400 to 500 feet length and from 4,500 to 6,000 tons register. Class D are from 350 to 400 feet length and from 3,500 to 4,500 tons register. Class E is a special class consisting mostly of small ships that are in the St. Lawrence River trades, where their size is limited by the locks to a maximum length of 255 feet and a width of 44 feet. These ships are about 2,000 to 2,200 tons registry. There are a few vessels in class E not in the St. Lawrence trade that have a length of between 250 and 300 feet and run up as high as about 3,000 tons.

A few years ago our members made a very careful study of the possibilities of establishing the three-watch system on the ships in our association, and 2 years ago voluntarily established three watches throughout the vessels in classes A, B, and C; that is, on ships of 4,500 tons and over.

In the class D ships-those from 3,500 to 4,500 tons-three watches were established, except for the officers, studies revealing that this would create a burden which would result in the laying up of these ships. The establishment of three watches on these vessels was a voluntary action taken by our association entirely without pressure other than the President's appeal to all industry to "put men to work", and the laying up of these ships would, on the contrary, throw about 30 men out of employment for each unit withdrawn from service. On many of these and larger ships it was necessary to build quarters for the additional men.

The placing of three crews on class E vessels was found to be entirely out of the question. It was not even debatable. These ships cannot stand the financial overload, and the creation of quarters for the additional crew presents a physical problem the solution of which is not even now in sight. These vessels have a capacity of about 2,500 tons. They are built as compactly as possible and are constructed to exactly fit the St. Lawrence Canal locks. The present law requires that each man shall have at least 16 square feet of floor space and 120 feet of cubic space; it is also required that not more than one berth shall be placed above another. That means that for the extra officers and seamen that would be required for these vessels there would have to be provided four rooms in addition to those now provided.

It should not be, and probably is not, the intention of Congress to require anyone to do the impossible, and it is not evident to us how the additional rooms that would be required for the enlarged crews called for by the bills in question could be provided on such vessels.

The commerce of the Great Lakes is carried at the lowest rates of freight prevailing anywhere in the world, and it is only by such low transportation costs that the agricultural, mining, and industrial developments of the Nation have been possible. The average Lake haul is about 800 miles. For a period of years, the average rate on grain has been about 2 cents per bushel. The average rate from lower lake ports to upper lake ports on coal has been about 45 cents per ton, and on iron ore from the head of the Lakes to the ports of transshipment on Lake Erie has been 70 cents per gross ton. These rates are not flexible, and on account of competition cannot be adjusted upward to meet increasing costs. Your committee may not be aware that iron ore from Chile can be delivered to the eastern furnaces at a lower cost per ton of iron produced than the iron ore of the Lake Superior region. In fact, the Lake Superior iron ore does not now go beyond the Allegheny Mountain which is the meeting point on cost of delivery of the imported and the domestic ores.

The major portion of western grain transported by lake is now of Canadian origin, and in the transportation of this grain our vessels are in sharp competition with those of Canadian ownership and to some extent with ships of European countries. This grain all moves from Fort William to Port Arthur, Ontario, to lower Lakes and St. Lawrence River ports, and I am submitting 60032-36-3

herewith a statement which shows the number of cargoes and the amount of
grain shipped in American vessels as compared with the number of cargoes and
amount of grain shipped in Canadian vessels from 1920 to 1935, inclusive:

NOTE. From 1920 to 1930 United States ships carried 36 percent of the cargoes and 45 percent of the
grain. From 1931 to 1935 United States ships carried 13 percent of the cargoes and 23 percent of the grain.

In the movement of coal the normal Canadian imports from the United
States have for many years been in the neighborhood of 17,000,000 tons,
6,000,000 tons of which were normally moved from United States ports to
Canadian ports by Great Lakes vessels. There has been in recent years a
determined effort upon the part of Canadian interests to reduce the importation
of United States coal in favor of the Nova Scotian and British product, and
the effects of this activity may be readily discerned from the following
statement:

In the movement of United States coal to Canada the low costs of operation
of Canadian ships, to which we will refer hereafter, has resulted in the transfer
of such competitive cargoes from the American vessels to those of Canadian
ownership.

There are now 301 Canadian vessels in commercial trades on the Great Lakes. The manning requirements of these vessels are much lower than those of the American ships. Notwithstanding this, the officers and crews of American vessels have always enjoyed a wage scale tremendously in excess of that of Canadian officers and seamen. A comparison of the wages and manning scales of the American vessels with those of our Canadian competitors is given herewith:

This shows that our vessels now carry in excess of corresponding Canadian vessels, 38 percent more men in the A and B classes; 27 percent more in the C class; 19 percent more in the D class; and 20 percent more in the E class; and that our pay roll is 130 percent more in A and B classes; 102 percent more in C class; 82 percent more in D class; and 88 percent more in E class. If third mates and third assistant engineers are required on our D-class vessels, as proposed in the bills under consideration, it would further increase the excess above similar Canadian ships to 25 percent in personnel and about 95 percent in pay roll. On E-class ships the excess of personnel would be 40 percent and the excess of pay roll about 115 percent. If three crews are required thhroughout to man these 2,000- to 3,000-ton vessels their manning scale would be 65 percent greater than that of the Canadian ships of the same size, and the pay roll would be increased to 240 percent in excess of such competing vessels. Furthermore, the capital investment in the Canadian ships is, as a rule, only a fraction of that of the American ships, as nearly all of the small vessels are British built at a cost of 40 to 50 percent of American construction and the larger ships have been purchased second-hand from American operators at a fraction of their original cost.

It may be seen, therefore, that the Canadian vessels can carry two, and and even three, cargoes for what it costs the American ship to carry one, even under the present manning and wage scales. I venture to say there are 10 or 12 million tons of freight annually that the American vessels cannot touch under present conditions-a commerce which we formerly enjoyed.

It is true that a large proportion of our lake commerce is strictly coastwise business and, consequently, to that extent noncompetitive with Canadian ships. Were this not so the American ships on the Great Lakes could not operate under the competitive conditions described.

There are in our association 107 vessels of the D class and 23 vessels of the E class. If these vessels were all operated with the full-manning scale as contemplated by the bills, it would create employment for something like 400 additional men. On the other hand, to the extent that these vessels were withdrawn from operation because of the increased expense it would create unemployment at the rate of approximately 30 men per unit, or, if all such vessels were withdrawn, a maximum of about 3,900 men. Whatever the degree of withdrawal from operation between zero and 130 ships the amount of unemployment would be in the ratio of 30 men thrown out of employment to every 2 to 6 given employment. In other words, if one ship is taken out of service it means the unemployment of 30 men. Any ship of these classes operated with the additional crew required would mean the employment of from two to six men in addition to those now serving on such vessels. The aggregate of unemployment would probably be considerably amplified by the fact that most of the vessels outside of our association are of the classes so affected. Notwithstanding these disastrous effects, we feel that the most serious objection to these bills is the rigid and inflexible character of the requirements as to an 8-hour day for licensed officers. As heretofore stated, our association has undertaken to establish as nearly as may be attainable in our operations

the three-watch system on an 8-hour basis on the vessels which can stand that additional burden. So far as the unlicensed personnel is concerned the 8-hour day does not seem to be an insurmountable undertaking. On the other hand, the peculiarities of our trade on the Great Lakes will not permit, with a due regard to safety, such rigid enforcement of hours in the duties of licensed officers and in this respect we feel that while the measures proposed are ostensibly for the purpose of promoting safety at sea the actual result of the enforcement of such regulations in Great Lakes operations would have a directly opposite effect and would, therefore, defeat the very purposes of the proposed laws.

Our association has been safety-minded for 50 years. In 1888 our association proposed to Congress the establishment of a lead-line law and made active effort to induce Congress to adopt such legislation. Not until 1935 was such a law, applicable to the Great Lakes, adopted by Congress. In 1890 our association took action to require that the wheel chains be so rove that the head of the vessel and the rudder would turn in the same direction as the wheel. Not until 1935 was such a law adopted by Congress. Our association and the masters of our vessels originated the present rules of the road which have since been adopted by our Congress and by the Dominion of Canada. And so it has been through all these years that the vessel owners of the Great Lakes have at all times been concerned with the question of safe navigation and many of the present regulations of the Steamboat Inspection Service have originated in our committees.

Since 1909 there has been within our association an organization which has undertaken the sharing of losses up to 50 percent of the hull valuation, thus giving to each member of that organization a financial and moral interest in the methods of operation and navigation of every other vessel in its membership. Furthermore, about 200 vessels in our association carry their own insurance risks in their entirety. A large number carry a partial risk. There is but a small proportion of the vessels in our association that are fully insured, It is evident, therefore, that from the standpoint of safety there is no body of shipping that is more concerned with the safety of the vessels than are the members of our association and consideration is being constantly given to safety measures by frequent gatherings of shipmasters and engineers for the purpose both in navigation and in the internal operation of these ships.

When we state that we believe that the bills themselves defeat the objective of safety, we mean just that. In the first place, safety at sea cannot be secured by diminishing the authority of masters or chief engineers as the executive officers of the ships. They must have full authority to call upon any officer or any members of the crew to perform duties required for the ship's operation regardless of the question of whether an emergency may or may not at the moment exist. The question of what constitutes an emergency is always open to interpretation and no restraint should be placed upon the master or chief engineer of a vessel to exercise his own judgment as to what constitutes the necessity for his calling upon members of the crew to render service regardless of watches. In our normal operation on the Great Lakes we require, as a safety measure, that the masters and chief engineers shall be at their posts when the vessel is entering or leaving a port. That is a safety measure. When a vessel is navigating through the Detroit, St. Clair, or St. Marys Rivers we require that masters and chief engineers shall be at their posts. That is a safety measure. When vessels are passing through the canals and locks at Sault Ste. Marie, we require that masters and chief engineers shall be at their posts. That is a safety measure. When vessels are loading, the mates are held responsible for the safe distribution and stowage of the cargo. That is a safety measure. These obligations may come upon the officers at a time when they are off watch but in no such case can such responsibilities be evaded, by law or otherwise, without, to that extent, reducing the safety of the ship and cargo. While at sea a vessel should be under the supreme command of the master without restriction; even the interests of the owner are subservient to the judgment of the master in all questions pertaining to the handling of his vessel. It must therefore be recognized that under no circumstances should any junior officer or any member of the crew be placed in a position by the laws of the country whereby he can question the authority of the officers charged with the responsibility of the safe operation of the vessel. There should be as rigid adherence to this principle in the merchant marine as there must necessarily be in the Navy. There should be no provision of law which gives a subordinate officer or the unlicensed personnel of the crew the right to question the authority of a master or chief engineer of a ship.

It is also a matter of grave concern in the operation of shipping that there should be proposed any statutory requirement as to the number of officers and men to be employed upon the vessels. Statutory requirements have no flexibility and yet, from the statements which have been made to your committee in the hearings of January 21 and 22, it is apparent that there are many trades, many varieties of ships, many diverse conditions, which cannot with reason and justice be regulated by a rigid, invariable, and inelastic statute. The Steamboat Inspection Service has, for many years, been charged with the duty of determining the number of licensed officers and crew required for the safe navigation of the ships. Their determinations may be based upon the character of the vessel, the nature of the trade, the waters in which the vessels operate, and the conditions applicable in each case. Local and supervising inspectors are all holders of licenses as masters or chief engineers. They have had steamboat experience. They know the difficulties and the possibilities of steamboat operation and the fullest reliance may be placed upon their judgment in any question as to what constitutes the safe manning of a ship. We are, therefore, strongly of the opinion that the question of manning the vessels should not have statutory rigidity but should have the elasticity of regulation; that this should not be a matter of legislation but that the responsibility for safe manning should be lodged in the hands of the Steamboat Inspection Service, where it has been for many years.

It is a well-known fact that the members of the Lake Carriers' Association have always given the utmost consideration to the welfare of the men on board the vessels. They have not only established wage scales far in excess of those of competitive shipping but have provided the most comfortable and sanitary quarters aboard ship for the crews, have given them the most wholesome food, and have adhered to the best working conditions compatible with the operation of ships. Not until 1932 were wages on the Great Lakes reduced from the 1929 scale. During that year, with the ore movement reduced 95 percent, the wages were cut 20 percent. This, however, was soon thereafter followed by two increases of 10 percent each, practically restoring the 1929 scale of wages. During 1934 the iron-ore movement, which is the backbone of our lake trade, had only recovered to the amount of 44 percent of the 1929 movement; 113 ships belonging to this association did not turn a wheel. Many of them have not operated for 5 years. Two fleets have been sold under the marshal's hammer, and nearly all of these vessels have been purchased by our Canadian competitiors.

It is the firm conviction of members of this association that the increased costs of operation which would result from the enactment of either of the bills under consideration would result in many of the D and E class vessels being permanently removed from service and that the provisions of the bills rigidly fixing an 8-hour day for licensed officers would not only destroy the authority of the master and chief engineer but would detract from the safety of operation and this, in our judgment, is a matter that merits the most cautious and careful consideration of your committee. We feel very keenly that the enactment of either of these bills would have the most disastrous effect upon lake commerce and upon the safe operation of the American vessels engaged therein. Respectfully,

LAKE CARRIERS' ASSOCIATION, By GEO. A. MARR, Vice President.

Mr. LECKIE. At any rate, just to get it before you generally now, a comparison of the wages and manning scales of the American vessels with those of our Canadian competitors shows that on vessels in class A and B we carry a crew of 36-these are freight boats, now; and the monthly wages are $4,775. Canadian comparable ships carry 26 in the crew; and the monthly wages are $2,075. And so on down the line. And expressed in percentage, we carry a greater crew in those various types of ships of from 38 percent down to 20 percent, and we pay wages of 130 percent down to 88 percent greater than they do. As I say, that is on freight boats.

I personally cannot vouch for that, but I know Mr. Marr very well and I know he is very careful, and I would be satisfied it is pretty correct. At any rate, it serves our purpose to show the difference in the expense of operation as to freight boats.