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-tpasial probiem. oe — ufttion, howerer. that may force us to reexamine the whole inter- That is the qubtstion of national defense. The President, concerned by the un- settled condition of world affairs, hes urged Congress to strengthen our facilities for--defense. The Mereant Marine is an’ integral part of the defense mechanism of the Nation. Cereful stidys of all possible ftonlingencles indicates that the miliary forecs would require, in ihe event of war with & major powcr. a minimum of 1000 mer- chant ships of all types, aggre- Zating about 6,030,000 gross tons. These vessels vould be required dn thle carly stoves of a conflict fey technical tiflilary purposes and represent but a fraction of the number tha’ would ultimately nw a mvalanaad he iiecessaty in case of prolonged Anelilivies, Available Ships We now have available under the Aimerican blag some 1400 sca- going vessels af 2000 gross tons or more. Four hundred of these ves- sels gle encarel in foreign trade; nearly £0C, including 300 tankers, ate in domestic trade; approxi- mately 200 are in ley up. It will thus be seen that the thousand vessels considered necessary for minimum military requirements fre at present available, although the majorily cf the ships are old and sloy and some do not meet technisal requirements with re- pard to size, J! will also be seen that more than half of the vescels are engaged in domestic service. It appears, therefore, that the Unit'd States might well con+ sider the subsic, ing of vessels in dementies (rode po a matter of na- fone delener, Angier amlter of great interest fe dhe Wel Coust ds ship corn Ss rtie. Alfboudh eberage @ Yoni af ver. capable of turn- @gsgeteocean going vessqlaangd . although many fine ships were launched here during the war period, this area has not partici- pated to any great extent in the building of recent vears. The American merchant marine is rapidly approaching obso- lescence. Hundreds of new ves- sels will he requir-d during the next few years if we are to pre- serve any semblance of efficiency in the various tradcs, domestic and foreign. Some ef this con- struction, it seems to me, should be undertaken in West Coast yards, Now Seeks Hids Iam glad to report that there is every indication {hat this will be the case, The commission is now secking bids en 12 standard- fzed freight ships. West Coast shipyards. like the Intercoastal lines, sre victims of the inexorable Jaws of econamics. The materials that go inte a ship are 50 distributed as to give East- erm yards a decided advantage in construction costs. It is cheaper to assemble ihe materials in the East, build the ship: there and then sail them to the Pacific than it is to transport iron and coal and machinery overiand. Over private construction the Commission has no control what- ever. With regard to subsidized construction, however, we are permitted—under thr 1936 act— to allow West Coast vards a dif- ferential of 6 per cent over the lowest bid received from any other section of the country. I do not think that this differcntial is suf- ficient to assure you any sub- stantial volume of construction under ordinary — circumstances. With the volume of work in Prespect today, however, there ts atrong diketihood of considerable building caming to iit section of the country. Permanent Value ahe_only Way to pscweetrre manent volume of construction Coast yards. it appears is by allocation of a defindin per- centage of subsidized construction. The Maritime Commission, in that ease, should be authorized to absorb the difference between your costs and those available elsewhere, I Kave discussed the situation with the President and he feels very strongly that something has a dane te ma should be done to maintain and even to expand West Coast facilities. The Commission has received numerous Inquiries relative to the trealment of certain Hines serving the West Coast which formerly received subsidies under the mail contract system. Bix mail ton- trach lines which served Pacific Coast ports are no longer re- ' geiving subsidies. None of these lines, however, was denied a sub- nF tn Barbas sidy by action of the Maritime Commission. Line Discontinues One line—The Tacoma Oriental Steamship Company — discon- tinued operations a year and a half before the Merchant Marine’ act of 1936 came into effect, Three lines—Grace, Panama Pacific and the Gulf Pacific Mail Line, Ltd, —were refered ineligible in the provision in the act denying sub- sidies to vessels operating between pert terminals in the United States. The two remaining lines —the Oceanic & Oriental Naviga- tion Company and the: States Steamship Company — did not choose to ask for Government aid. The first named line has been dissolved; the latter is operating without a subsidy. I hope thai this explanation will clear up any misunderstand- ing that may have developed over the aititudae of ine Commission to- ward lines serving the West Coast. attire West Const Untaaceemow