be stated to the owners as soon as the charterers hear about it. No deduction to be made in the hire on account of total loss, particular average or other damage over which owners have no control.

4. The boats to be taken over with the gear and inventory which is on board on delivery to the charterers. Other gear and all running expenses such as wages, fuel oil, provisions, stores, harbor dues, etc., to be for charterers account.

5. That all salvage (except for all kinds of whales, ambergris, and vessels belonging to or hired by the charterers, for which no salvage can be claimed) shall be for owners and charterers equal benefit after deducting owners and charterers expenses and crew's proportion.

6. Charter is running from the dates the boats are taken over by the charterers. 7. Charterers to take over and pay for oil and unbroken stores on delivery of the vessels, and owners to take over oil and unbroken stores on board on redelivery of the boats. In both cases the current prices at the ports of delivery and redelivery at the time to be paid.

8. The owners to keep the vessels fully insured for a full

range.

The premium to be refunded by the charterers. The charterers are responsible for breakage and damage to the boats and their equipment. Deduction made by the underwriters for difference between old and new for ice damage to be refunded by the charterers.

9. Charterers to have the option of renewing this contract for the season notice of such renewal to be given not later than

10. Any dispute that may arise under this charter shall be settled at New York by arbitration. In case of an arbitration, one arbitrator shall be appointed by the master or owners, one arbitrator shall be appointed by the charterers, and a third arbitrator shall be appointed by the two arbitrators so chosen. The decision of the arbitrators shall be final.

This contract to be made and executed in two copies.

THE AMERICAN WHALING Co.,

The CHAIRMAN. If there is nothing further, you may stand aside. Is there someone here representing the Bureau of Fisheries? Mr. JACKSON. Yes, Mr. Chairman.

STATEMENT OF CHARLES E. JACKSON, DEPUTY COMMISSIONER, UNITED STATES BUREAU OF FISHERIES

The CHAIRMAN. What I wanted to get from you, Mr. Jackson, if there is any opinion, or if the matter was discussed or considered, as to the right to issue a license to these Norwegian killer boats; and if any opinion was rendered, to get a copy of that opinion.

Mr. JACKSON. No formal opinion has been received on that, Mr. Chairman, from the Solicitor.

The CHAIRMAN. Well, it was considered in the Bureau, and can you state the facts on which the Bureau issued the licenses? Your Bureau issues the licenses, does it not?

Mr. JACKSON. Yes; our Bureau issues the licenses, and there was nothing in the Whaling Act which prohibited the issuance of licenses to Norwegian whaling vessels, or foreign killer ships. There was a full hearing before the Foreign Relations Committee of the House, and it is generally understood there are no killer ships in this country except for a few on the west coast, and those are all very old vessels, so that the Bureau issued these licenses, because there was nothing in the law on the subject.

The CHAIRMAN. Are there any questions? If not, you may stand aside.

Now the Bureau of Marine Inspection and Navigation. Mr. Jones, do you have any statement you want to make in connection with this?

STATEMENT OF ALLAN D. JONES, ASSISTANT DIRECTOR, BUREAU OF MARINE INSPECTION AND NAVIGATION

Mr. JONES. Captain Sweet and I are here to answer any questions that may appear to be of interest to the committee.

My name is Allan D. Jones, Assistant Director of the Bureau of Marine Inspection and Navigation, dealing with the imposition of navigation fines.

The question which our Bureau had under consideration related to the duties. It related to the entry of the cargoes brought in on foreign vessels from either one of these expeditions. The question was raised in August and a response to the letter was made, asking for information. Mr. Wyatt, who is of the firm of Lord, Day & Lord, or at least, is employed by them at the Washington office, came to the Bureau on several occasions to discuss this matter. We expressed the opinion that notwithstanding the ruling by the Treasury, while their province reached duties, that in our province fell the question of whether the cargo might be introduced into the commerce of this country in a foreign bottom, and we indicated our view that it might not be done. As I say, these discussions were had with an attorney representing the Western Operating Co.-those who owned the Ulysses. I assume that Mr. Wyatt communicated the conversations which he had with us to his principals. In any event, in the week just prior to the probably time that the cargo was to be brought in, Mr. Lord and Mr. Isbrandtsen called at the Bureau and were not satisfied with the disposition of the Bureau toward this cargo and undertook to discuss and persuade us that our interpretation of the law in that connection was not correct.

It appears from the record as made here, particularly the testimony of Mr. Lord, that a former letter or a former ruling of the Treasury indicated that if it was sought to transport the cargo from the Ulysses in a foreign bottom, that might not be done, because the Treasury at that time and perhaps they are of the same opinion now, although I have not been able to ascertain just what their opinion may be took the position that the Ulysses, being a vessel of the United States and on the high seas, or in foreign territorial waters, from that vessel a cargo might not be taken destined to the United States in any other than a vessel of the United States, because that was domestic commerce as opposed to foreign commerce, and, being domestic, their cil would have to be transported in an American bottom. That was the position which the Bureau took, which was concurred in by the Secretary of Commerce, and, under the Secretary's order, the cargo of the Norwegian steamer Charles Racine was seized by the collector of customs at the port of Norfolk for forfeiture to the United States, for violation of our navigation laws, in that merchandise was transported in the coastwise or domestic commerce, which was violative of the law. Of course the vessel underwent no penalties; there was no question that involved the State Department, nor the Norwegian Government, nor the Norwegian owners of the Racine.

The CHAIRMAN. As a means of determining that question, as I understand, if the cargo was seized, claimed, and bonded, it would be competent for the Attorney General to consider by way of com-promise any offer made?

Mr. JONES. Yes, sir.

The CHAIRMAN. Or the matter could be thrashed out and finally determined by the court?

Mr. JONES. I believe the Department of Justice felt the question to be somewhat involved; at least, it was presented so strenuously by the owners of the vessel that our position was entirely unfounded. It was suggested that a bond of $250,000 would be ample.

The CHAIRMAN. Did that cover cargo of a value of a million and a half?

Mr. JONES. Yes; the cargo was worth more than a million and a half dollars and, if dutiable, would have paid into the Treasury of the United States eight or nine hundred thousand dollars. But in the situation in which we found ourselves, we were not concerned in that; although, of course, we brought it to the attention of the Treasury Department. We were confronted with conflicting opinions and I submit, conflicting opinions of the court-on what constituted an American fishery. And out of that situation I think has come the attempt of this committee to clarify that situation so that we may hereafter know whether an American fishery may be operated as this industry has been operated.

The CHAIRMAN. Is there any reason prejudicial to the Government, or its case, why the memorandum that was prepared by the Assistant Director to the Secretary of Commerce, discussing the legal phases, should not be put into the record?

Mr. JONES. I know of none, sir.

The CHAIRMAN. Then, if no objections are raised, I shall be very glad to have that. It discusses the legal phases?

Mr. JONES. With the permission of the committee and under the direction of the Secretary of Commerce, if he deems it advisable, sir,. our Bureau would like to submit a memorandum for the record in that case, so as to make our position transparently plain.

The CHAIRMAN. Of course, that matter is pending in the court, is it not?

Mr. JONES. Yes, sir.

The CHAIRMAN. But it would be of importance to the committee to know just what legal questions are involved.

Mr. JONES. Of course the case, as Mr. Lord says, may not be reached until the latter part of April, and I assume, should it be decided adversely to the Government, the Government might be interested to take an appeal, as they would should the decision be adverse to them.

The CHAIRMAN. Of course, if that is put in, I have no objection, in the time that has been allowed, to Mr. Lord filing a memorandum as to their legal views in connection with it. I doubt if he could get up a brief on the case in time to send it down here; but, if you desire to do so, you may.

Mr. LORD. I see no point at all, Mr. Chairman, in submitting a memorandum on this question, which we are not concerned with at all, and I put those letters in without any comment at all, just as a part of the record.

The CHAIRMAN. Very well. That is just a privilege extended to you; you may avail of it or not.

Mr. LORD. It seems to me if Mr. Jones cares to comment on the reasonableness and the fairness of the Department of Commerce's. attitude, I would like to comment on the other side; but I would prefer not to try my case in another forum. I expect to try it in the

court.

The CHAIRMAN. The only thing now is, this memorandum will go in, and if you wish to submit a memorandum in reply, you are at liberty to do so.

Mr. LORD. I would be very glad to have Mr. Jones' authorities before the trial of the case, because that will be of the greatest assistance to me. Furthermore, I would like to correct one impression. Mr. Jones is quite correct in saying the Department, on that occasion, only stated they thought this was a violation of the coastwise laws; but my conversations with Mr. Trimble, at which Mr. Jones was present, were substantially as follows:

I said to Mr. Trimble: "Are you going to maintain that this is a violation of the coastwise laws?" I said it on November 11, 1937, in the presence of Mr. Jones, Mr. Isbrandtsen, Mr. Joe Quigley, and Mr. O'Hara. Mr. Trimble said, "We have not yet decided the question." I said, "When are you going to decide it? The ship is coming in within 2 days." He said, "Just as soon as we have heard from the. Treasury Department. We have submitted it to them."

I called him up the next morning from New York and said, "We expect an answer." He said, "We have not decided it yet." I called him up that afternoon and he said, "We have not decided it yet." I said, "What is the trouble; why hasn't it been decided?" He said, "It has not been decided because we cannot seem to decide, on the authorities, what the law should be."

I am not going to make any comment on that, but I want that to go in the record, so long as Mr. Jones is testifying.

The CHAIRMAN. And, of course, without putting this memorandum in at this time, Mr. Jones, I would be glad if you would confer with the Secretary, and if it is deemed it is prejudicial to the Government's case, it will just be supplied to the committee.

Mr. JONES. Yes, sir; but I would not like to pass this point without having the record rather clarify the situation. I do not object to being quoted. I do object, rather, to having my position misunderstood. I had not suggested we proposed to make any apologies for any apparent lack of diligence on the part of the Bureau to undertake to decide a very complicated question. I am one of the Government's. employees who does not believe that we have to decide, in advance, cases that involve tremendous sums of money; and if we appear to take the time necessary to determine that question, it would seem even now that the magnitude of the question would have justified the position which we took. And it was not my purpose in any statement that I might make to go into this record in any sense to undertake to say that the conduct of the Bureau in connection with the consideration given this question was lacking in diligence in making our reply. The question was raised and we are attempting to answer it.

in

The only memorandum which I desire to file, sir, would demonstrate, my opinion, that the Treasury decisions which were submitted here today do not sustain the position of the Treasury and that this is

58715-38-14

clearly domestic commerce as opposed to foreign commerce and, as Congressman Welch indicated a while ago, which evidently was bothering the Congressman, namely, not that the fish were taken on either the Frango or the Ulysses, but the American fisheries historically have caught fish and captured fish in the whaling days when whaling was a New England enterprise, and the vessels that brought the whale oil in captured the whales. But the Frango nor the Ulysses are not whaling ships; they are factories. And I submit for consideration that if the whales that were captured by these Norwegian vessels had been processed upon the Norwegian ship and brought in here, we would have no question but what it was a product of a foreign fishery and would have been subject to duty. And not being brought in by the American vessel nor caught by an American vessel, by what process of transmutation did a whale that was caught by a Norwegian killer gain the indication that it was a product of American fisheries. That is the question that is before the committee.

The CHAIRMAN. That is a very important question before the committee, not only in this but in various other matters; because I have a very serious question as to the extent to which these reduction plants of the canneries can be considered engaged in fishery operations. it has got to be clarified.

Mr. PETERSON. The same analogy might be drawn of a case out in Mr. Welch's section, the sardines and pilchard. They might be caught by foreign boats, brought in and canned on factory boats there. Mr. JONES. Yes, sir.

Mr. PETERSON. And I might draw even a further analogy by the situation existing on the Alaska coast, of Japanese fishermen bringing them into the cannery and processing them on a ship under the American flag and then have them come in and claim they are a product of an American fishery.

Mr. JONES. Quite right. We had tied up in it the desire to settle this question; that is what impelled us. We were impelled to make this decision because the matter was so unsettled, and the questions you speak of were all taken into consideration by the Secretary of Commerce in directing us to make the seizure.

Mr. PETERSON. And it might have gone on getting bigger and bigger?

Mr. JONES. Absolutely.

The CHAIRMAN. And it really involves a question that is more important than this whale industry, because we long have had a certain amount of reduction of whales; but these other ships are after the pilchard and the salmon, and they are practically putting out of business the shore plants, and the question is whether they can be given the privilege of fisheries, or not. I have grave doubt about it.

Mr. WELCH. Yesterday I asked if it would be possible to furnish this committee with information as to the ability of whales to reproduce in proportion to the number killed.

Mr. JACKSON. Dr. Kellogg, if I may suggest, could answer that, Mr. Chariman.

The CHAIRMAN. I think, so far as that is concerned, if Mr. Welch will formulate either now or hereafter the inquiry he wants answered, we will be very glad to have a brief prepared on that subject from Dr. Kellogg.