river, which will safely carry the flood waters of the Colorado to the Gulf without menace to the Imperial Valley and without danger of undue silting. We turn now to consider measures pending in Congress for the construction by the Federal Government of a huge storage dam near Boulder Canyon, the creation of a 1,000,000-horsepower plant and the digging of an all-American canal to turn the waters of the river into the Imperial Valley through a channel lying in the United States alone. The Reclamation Service estimates the total cost of the above projects at $125,000,000. Others have estimated the cost at double that amount, but whatever the cost, it will be by all odds the largest business adventure within the boundaries of the United States which the Federal Government has ever attempted. The merits and demerits of this proposed all-American canal involve a long story which will not be entered into here. Suffice it to say that a board of Government engineers has reported the canal to be feasible at a cost of approximately $31,000,000, but it also suggested that if the canal were to be built and a larger area of land watered storage would be necessary against the low-water season. The search for storage aroused the interest of Los Angeles. The managers of the municipal electric system there had for some time been perturbed over the necessity of buying from a private corporation a major portion of the electricity that it sold to its customers. The citizens were not, however, prepared to vote a huge bond issue that would enable the city to develop its own hydroelectric system and the suggestion of storage on the Colorado for the benefit of the Imperial Valley seemed to open the possibilities of Federal aid. Astute politicians combined forces and one step has led to another until the early plan to irrigate a few thousand acres of mesa lands above the Imperial Valley has developed into a project to secure Federal construction of an irrigation, storage, and hydroelectric development of enormous proportions. This project is claimed to be the only sound method of protecting the Imperial Valley against floods, which have twice swept into it and which now threaten its existence. It is universally conceded that the Federal Government should take adequate steps to protect the Imperial Valley from another disastrous flood. The valley is menaced, not primarily because of the size of the Colorado flood, but because the original stream bed of the river became clogged during the two years or thereabouts when it flowed into the valley. Recently, American engineers, in consultation with Señor Mejorada, a distinguished Mexican engineer, have revived and improved the plan for an adequate channel protected by levees from the international border to the Gulf and they estimate its present cost at $5,000,000! If this plan is carried through the Imperial Valley will be adequately protected against all floods and a channel provided which will maintain itself by natural erosion and with little, if any, annual cost. It is a plan approved by Mexico and undoubtedly the United States Government can secure the right for the construction and maintenance of this channel if proper representations are made at Mexico City. Yet we hear nothing of this project, though it is the least expensive and most adequate plan for protecting the Imperial Valley against floods. This channel is needed whether or not storage is constructed on the main Colorado River, for the Gila River and other streams entering below the proposed site of the Boulder Canyon Dam produce short floods of as great height, but of less duration, as those of the main river. The Boulder Canyon project would in no way protect the Imperial Valley from the Gila River floods. The most available site for storage is probably the Mojave Canyon site below Needles, sometimes known as the Topock site, where a dam of moderate height will impound 10,000,000 acre-feet at a cost estimated between $10,000,000 and $15,000,000. This project was seriously recommended some years ago by Secretaries Weeks, Work, and Wallace, who then comprised the Federal Power Board. It did not meet with favor in southern California because it did not include a great power development or an all-American canal. Storage should, of course, be created in the upper stretches of the river above its rapid drop so that the flow may be regulated and conserved for all the potential power plants of the stream. In the upper basin there are two or three sites at which large storage can be created, and on the main river there are three additional sites. Of these last, at the upper site, Lees Ferry, where 20,000,000 acre-feet can be stored and the river regulated to an even flow of about 15,000 second-feet, the most desirable location appears to exist for a great storage reservoir. This is at the head of the canyon section of the main river and would make possible the development of the entire stream for power. A second site is at Boulder Canyon, or Black Canyou, where a storage of equal size can be created, and finally there is the Topock site below Needles, in the Mojave Canyon, where a reservoir of any size up to 20,000,000 acre-feet can be created. A storage of 6,000,000 acre-feet is more than sufficient to prevent destructive floods on the lower river. With the floods of the main river regulated by a reservoir at Lees Ferry the construction problem of all the lower dam sites on the river will be greatly simplified. Preliminary borings indicate rock of a suit able character, but much further detailed study should be given to this site before any work is started. A dam at Boulder or Black Canyon, near the foot of the rapid water of the Colorado River, is also probably feasible, although the bedrock is so far below the water level as to make the problem of building the foundation under a torrent rushing through a box canyon quite unprecedented and some engineers say all but impossible. The storage capacity of Boulder Canyon will be of value in regulating the stream for any power plant located at that dam, or for further irrigation in the Imperial Valley and in Mexico, but it will have no value for the great power plants which will eventually utilize the main power of the river. At some time in the future storage must be created either at Lees Ferry or in the upper basin to regulate the flow of the Colorado for the 13 or 14 power plants which will ultimately be built to utilize the fall in the Grand Canyon. When this upper storage is created the storage at Boulder Canyon will be unnecessary and the Boulder Dam will become a power dam without other function. At the Topock site a storage of from 6,000,000 to 10,000,000 acrefeet can be created at a cost of from $10,000,000 to $15,000.000, or a storage up to 24,000,000 acre-feet at a corresponding additional cost. A 6,000,000 acre-foot storage will be of ample size to reduce the floods on the main river to a point that will in no way threaten Imperial Valley and substantially to increase the low water flow of the Colorado during the irrigation season, but no great amount of power can be developed at Topock. For this reason this project has not appealed to the managers of the municipal plant of Los Angeles, who desire to have the Federal Government supply them with electrical energy, or to the promoters in the Imperial Valley who wish to have the carrying charges of the all-American canal met from the sale of power. The Boulder Canyon project is a power project pure and simple and is an effort to inject the Federal Government into the business of generating electricity. Boulder Canyon is not the proper location for a storage dam for the regulation of the main river. A river should be regulated at the head of its rapids and not at the foot. Again, the Boulder Dam is entirely unnecessary for the protection of or for irrigation in the Imperial Valley, because both of these objects can be attained at a small fraction of the cost of the Boulder Dam by the construction of a dam at Topock. BOULDER DAM IN ITS TRUE LIGHT Let us examine the Boulder project in its true light as a project to force the Federal Government into an investment of not less than $125,000,000 for the purpose of generating power for the cities of southern California. and for the further purpose of building an allAmerican canal which the Imperial Valley can not afford to carry. If the project is carried out there will be developed at Boulder approximately 1,000,000 horsepower, or 750,000 kilowatt, on a 55 per cent load factor. This means the annual production of about 3,500,000,000 kilowatt-hours. The Federal Power Commission, which has carefully examined the market for Boulder energy, estimates that it will take southern California from 9 to 10 years to absorb this block of power after delivery is begun. It further estimates that the cost of Boulder power delivered at Los Angeles, including all transmission costs and losses, will be between 4 and 5 mills per kilowatt-hour. This is on the assumption that the Boulder project, including the all-American canal, will cost not exceeding $125,000,000. If the cost of the project should exceed that amount the cost of energy delivered in southern California would be increased proportionately. STEAM POWER COSTS DECREASING The cost of power from Boulder Dam in fairness should be compared to the cost of power generated in a modern steam plant near Los Angeles. The Southern California Edison Co. is now producing power, all charges included, in its Long Beach plant at slightly less than 4% mills per kilowatt-hour. In its new and improved plant now under construction it is expected that the cost will be reduced to 3% mills per kilowatt-hour, and in view of the remarkable strides that are being made in increasing the efficiency of steam plants it is not fanciful to imagine that the cost of steam power in southern California, with oil at its present price, will be approximately 3 mills at the time when the Boulder Dam project can be completed. Even if the oil supply of southern California is exhausted and it is necessary to turn to Utah coal, energy cost should not exceed 4 mills per kilowatt-hour. Thus the power users of southern California will be paying a mill a kilowatt more for Boulder energy, with the uncertainties of long-distance transmission, than for steam energy generated at their door. This will mean an annual loss of $3,500,000, and it may be twice that amount. Boulder power at 44 mills is based upon the assumption that the dam itself can be built for $40,000,000, yet it must be recognized that the project is one of great hazard, that a dam 550 feet high has never as yet been constructed; that it is necessary to go 127 feet below the channel of the river in order to find bedrock and to excavate perhaps 20 or 30 feet into this bedrock, thus making the total height of the dam from bedrock to crest nearly 700 feet; and that the work of clear ing and preparing the foundations must be done in a stream less than 300 feet wide and carrying each year floods of half the volume of the water which passes over Niagara Falls, and in some years a flow equal to the flow of Niagara. Competent engineers have estimated the cost of the Boulder Dam at from $90,000,000 to $100,000,000, and some say that the project is almost impossible of accomplishment because of the unsurpassed difficulties in building such a huge dam in such a narrow gorge carrying such enormous floods. be It is urged that stored water from the Colorado River is necessary in order that Los Angeles and the other cities of southern California may have adequate domestic water supply. Los Angeles now gets its water supply from local sources and from the Owens River, and the best engineering evidence would indicate that this supply can doubled before it is necessary to turn to the Colorado. Obviously the water of the Colorado should not be used by Los Angeles until every other source has been exhausted because of the great distance which it must be carried and the fact that it must be pumped over a ridge of the coast range 1,500 feet high. When the population of Los Angeles reaches 5,000,000 it may be necessary for her to secure a part of her water supply from the Colorado, but even western optimism must admit that such a contingency will not arise for several decades. It is further urged that the Boulder project is required in order to protect the Imperial Valley from floods, yet we have seen that this protection can be supplied in other ways at a fraction of the cost. Again, it is stated that Boulder power is required by southern California. While admitting the great growth of the power demand of the Sunset State, we have seen that its power requirements can be furnished at a very much lower cost from steam. Finally, the need of additional stored water for irrigation is stressed. Such additional supply can be had at moderate cost from the Topock Dam, and further engineering study will reveal where the main storage of the Colorado should be located. A SANE PROGRAM What, then, is a sane program for the development of the Colorado River? The one pressing need is the protection of the Imperial Valley from floods. This protection can best be supplied by the construction of a suitable channel from the international border to the Gulf of California, and it is suggested that the first step should be the negotiation of a treaty with Mexico providing for the construction of such a channel. As a second step the Topock Dam should be constructed both for flood protection and for irrigation. The construction of this dam requires no treaty with Mexico, and work on it can be started at once. The new channel and the Topock Dam can together be constructed at a cost of from $15,000,000 to $20,000,000, and together they will protect the Imperial Valley from floods and they will furnish it with such addi tional irrigation supply as may be required in the next decade. With these two projects under way the Engineer Corps of the United States Army, assisted, possibly, by other engineering departments of the Government, should be given an adequate appropriation with which to make a complete study of the entire river. Such a study should include borings at all possible dam sites, complete surveys and a comprehensive plan which will most efficiently provide for the future development of power and irrigation. Such a program is sane, constructive, and relatively inexpensive and will avoid costly mistakes and a wasteful use of one of the greatest resources of the far West. THE MERCHANT MARINE CONFERENCE REPORT Is there objection? Mr. JONES. Mr. President, I desire to call up the conference report on the merchant marine bill. The PRESIDING OFFICER. There being no objection the Senate proceeded to consider the report of the committee of conference on the disagreeing votes of the two Houses on the amendment of the House to the bill (S. 744) to further develop an American merchant marine, to assure its permanence in the transportation of the foreign trade of the United States, and for other purposes. The conference report is as follows: The committee of conference on the disagreeing votes of the two Houses on the amendment of the House to the bill (S. 744) to further develop an American merchant marine, to assure its permanence in the transportation of the foreign trade of the United States, and for other purposes, having met, after full and free conference, have agreed to recommend and do recommend to their respective Houses as follows: That the Senate recede from its disagreement to the amendment of the House, and agree to the same with an amendment, as follows: In lieu of the matter proposed to be inserted by said amendment insert the following: "TITLE I-DECLARATION OF POLICY "SEC. 1. The policy and the primary purpose declared in section 1 of the merchant marine act, 1920 (U. S. C., title 46, sec. 861), are hereby confirmed. | REMODELING AND IMPROVING "SEC. 202. In addition to its power to recondition and repair vessels under section 12 of the merchant marine act, 1920, as amended (U. S. C., title 46, sec. 871), the board may remodel and improve vessels owned by the United States and in its possession or under its control, so as to equip them adequately for competition in the foreign trade of the United States. Any vessel so remodeled or improved shall be documented under the laws of the United States and shall remain documented under such laws for not less than five years from the date of the completion of the remodeling or improving and so long as there remains due the United States any money or interest on account of such vessel, and during such period it shall be operated only on voyages which are not exclusively coastwise. "REPLACEMENTS "SEC. 203. The necessity for the replacement of vessels owned by the United States and in the possession or under the control of the board and the construction for the board of additional up-to-date cargo, combination cargo and passenger, and passenger ships, to give the United States an adequate merchant marine, is hereby recognized, and the board is authorized and directed to present to Congress, from time to time, recommendations setting forth what new vessels are required for permanent operation under the United States flag in foreign trade, and the estimated cost thereof, to the end that Congress may, from time to time, make provision for replacements and additions. All vessels built for the board shall be built in the United States, and they shall be planned with reference to their possible usefulness as auxiliaries to the naval and military services of the United States. "TITLE III-CONSTRUCTION LOAN FUND "TERMS AND CONDITIONS OF LOANS "SEC. 301. (a) Section 11 of the merchant marine act, 1920, as amended (U. S. C. title 46, sec. 870; 44 Stat. L., pt. 2, 1451), is amended to read as follows: "SEC. 11. (a) That the board may set aside, out of the revenues from sales, including proceeds of securities consisting of notes, letters of credit, or other evidences of debt, taken by it for deferred payments on purchase money from sales by the board, whether such securities are to the order of the United States, the United States Shipping Board, the United States Shipping Board Emergency Fleet Corporation, or the United States Shipping Board Merchant Fleet Corporation, either directly or by indorsement, until the amounts thus set aside from time to time aggregate $125,000,000. thus set aside shall be known as the construction loan fund. The amount The board may use such fund to the extent it thinks proper, upon such terms as the board may prescribe, in making loans to aid persons citizens of the United States in the construction by them in private shipyards or navy yards in the United establishment or maintenance of service on lines deemed deStates of vessels of the best and most efficient type for the sirable or necessary by the board, provided such vessels shall be fitted and equipped with the most modern, the most efficient, and the most economical engines, machinery. and commercial appliances; or in the outfitting and equipment by them in private shipyards or navy yards in the United States of vessels already built, with engines, machinery, and commercial aping, remodeling, or improvement by them in private shipyards pliances of the type and kind mentioned; or in the reconditionor navy yards in the United States of vessels already built. section, shall be construed to mean a vessel or vessels to aid "(b) The term "vessel " or vessels," where used in this in whose construction, equipment, reconditioning, remodeling, or improvement, a loan is made from the construction loan fund of the board. All such vessels shall be documented under the laws of the United States and shall remain documented under such laws for not less than 20 years from the date the loan is made, and so long as there remains due the United States any principal or interest on account of such loan. (c) No loan shall be made for a longer time than 20 years. the first advance on the loan is made by the board the princiIf it is not to be repaid within two years from the date when pal shall be payable in equal annual installments, to be definitely prescribed in the instruments. The loan may be paid at any time, on 30 days' written notice to the board, with interest computed to date of payment. (d) All such loans shall bear interest at rates as follows, payable not less frequently than annually: During any period in which the vessel is operated exclusively in coastwise trade, or is inactive, the rate of interest shall be as fixed by the board, but not less than 54 per cent per annum. During any period in which the vessel is operated in foreign trade the rate shall be the lowest rates of yield (to the nearest one-eighth of 1 per cent) of any Government obligation bearing a date of issue subsequent to April 6, 1917 (except postal-savings bonds), and outstanding at the time the loan is made by the board, as certified by the Secretary of the Treasury to the board upon its request. The board may prescribe rules for determining the amount of interest payable under the provisions of this paragraph. "(e) No loan shall be for a greater sum than three-fourths the cost of the vessel or vessels to be constructed or than three-fourths the cost of the reconditioning, remodeling, improving, or equipping hereinbefore authorized for a vessel already built. "(f) The board shall require such security as it shall deem necessary to insure the completion of the construction, reconditioning, remodeling, improving, or equipping of the vessel within a reasonable time and the repayment of the loan with interest; when the construction, reconditioning, remodeling, improving, or equipping of the vessel is completed the security shall include a preferred mortgage on the vessel, complying with the provisions of the ship mortgage act, 1920 (U. S. C., title 46, chap. 25), which mortgage shall contain appropriate covenants and provisions to insure the proper physical maintenance of the vessel, and its protection against liens for taxes, penalties, claims, or liabilities of any kind whatever, which might impair the security for the debt. It shall also contain any other covenants and provisions the board may prescribe, including a provision for the summary maturing of the entire debt, for causes to be enumerated in the mortgage. "(g) The board shall also require and the security furnished shall provide that the owner of the vessel shall keep the same insured against loss or damage by fire, and against marine risks and disasters, and against any and all other insurable risks the board specifies, with such insurance companies, associations, or underwriters, and under such forms of policies, and to such an amount, as the board may prescribe or approve; such insurance shall be made payable to the board and/or to the parties, as interest may appear: The board is authorized to enter into any agreement that it deems wise in respect to the payment and for the guaranty of premiums of insurance.' "(b) Section 11 of the merchant marine act, 1920, as in force immediately prior to the enactment of this act, shall remain in force in respect of all loans made before the enactment of this act. 66 "INCREASE OF CONSTRUCTION LOAN FUND SEC. 302. (a) There is authorized to be appropriated, to be credited to and for the purposes of the construction loan fund created by section 11 of the merchant marine act, 1920, as amended, such amounts as will, when added to the amounts credited to such fund by the United States Shipping Board under authority of law (exclusive of repayments on loans from the fund). make the aggregate of the amounts credited to such fund (exclusive of such repayments) equal to $250,000,000. "(b) When $250,000,000 has been credited to such fund (whether by the board under authority of law or from appropriations authorized by this section, but exclusive of repay ments on loans from the fund) then no further sums (except such repayments) shall be credited by the board to such fund. "(c) The construction loan fund shall continue to be a revolving fund. Repayments on loans from the fund shall be credited to the fund, but interest on such loans shall be covered into the Treasury as miscellaneous receipts. "TITLE IV-OCEAN MAIL SERVICE "SCOPE OF TITLE "SEC. 401. All mails of the United States carried on vessels between ports (exclusive of ports in the Dominion of Canada other than ports in Nova Scotia) between which it is lawful under the navigation laws for a vessel not documented under the laws of the United States to carry merchandise shall, if practicable, be carried on vessels in respect of which a contract is made under this title. "REQUIREMENTS OF POSTAL SERVICE "SEC. 402. As soon as practicable after the enactment of this act, and from time to time thereafter, it shall be the duty of the Postmaster General to certify to the United States Shipping Beard what ocean mail routes, in his opinion, should be established and/or operated for the carrying of mails of the United States between ports (exclusive of ports in the Dominion of Canada other than ports in Nova Scotia) between which it is lawful under the navigation laws for a vessel not documented under the laws of the United States to carry merchandise, distributed so as equitably to serve the Atlantic, Mexican Gulf, and Pacific coast ports, the volume of mail then moving over such routes and the estimated volume thereof during the next five years, the times deemed by him advisable for the departure of the vessels carrying such mails, and other requirements necessary to provide an adequate postal service between such ports. 66 "RECOMMENDATIONS BY SHIPPING BOARD SEC. 403. The board shall, as soon as practicable after receipt of such certification from the Postmaster General, determine and certify to him the type, size, speed, and other charac teristics of the vessels which should be employed on each such route, the frequency and regularity of their sailings, and all other facts which bear upon the capacity of the vessels to meet the requirements of the service stated by the Postmaster General. The board in making its determination shall take into consideration the desirability of having the mail service performed by vessels constructed in accordance with the latest and most approved types, with modern improvements and appli"AUTHORITY TO MAKE CONTRACTS ances. "SEC. 404. The Postmaster General is authorized to enter into contracts with citizens of the United States whose bids are accepted, for the carrying of mails between ports (exclusive of ports in the Dominion of Canada other than ports in Nova Scotia) between which it is lawful under the navigation laws for a vessel not documented under the laws of the United States to carry merchandise. He shall include in such contracts such requirements and conditions as in his best judgment will insure the full and efficient performance thereof and the protection of the interests of the Government. Performance under any such contract shall begin not more than three years after the contract is let, and the term of the contract shall not exceed 10 years. 66 "VESSELS SEC. 405. (a) The vessels employed in ocean mail service under a contract made under this title shall be steel vessels, shall be steam or motor vessels, and shall be either (1) American-built and registered under the laws of the United States during the entire time of such employment, or (2) registered under the laws of the United States not later than February 1, 1928, and so registered during the entire time of such employment, or (3) actually ordered and under construction for the account of citizens of the United States prior to February 1, 1928, and registered under the laws of the United States during the entire time of such employment. "(b) A vessel for the services of which a contract is entered into under authority of this title, and the construction of which is hereafter begun, shall be either (1) a vessel constructed, according to plans and specifications approved by the Secretary of the Navy, with particular reference to economical conversion into an auxiliary naval vessel, or (2) a vessel which will be otherwise useful to the United States in time of national emergency. "(c) From and after the enactment of this act all licensed officers of vessels documented under the laws of the United States, as now required by law, shall be citizens of the United States; from and after the enactment of this act and for a period of four years, upon each departure from the United States of a vessel employed in ocean mail service under this title, one-half of the crew (crew including all employees of the ship other than officers) shall be citizens of the United States and thereafter two-thirds of the crew as above defined shall be citizens of the United States. "ADVERTISING FOR BIDS "SEC. 406. Before making any contract for carrying ocean mails under this title the Postmaster General shall give public notice by advertisement once a week for three weeks in such daily newspapers as he shall select in each of the cities of Boston, New York, Philadelphia, Baltimore, New Orleans, Charleston, Norfolk, Savannah, Jacksonville, Galveston, Houston, and Mobile, calling for bids for carrying of such ocean mails; or when the proposed service is to be on the Pacific Ocean then in Los Angeles, San Francisco, Portland, Tacoma, and Seattle. Such notice shall describe the proposed route, the time when such contract will be made, the number of trips a year, the schedule required, the time when the service shall commence, the character of the vessels required, and all other information deemed by the Postmaster General to be necessary to inform prospective bidders as to the character of the service to be required. 04 AWARDING CONTRACTS "SEC. 407. Each contract for the carrying of ocean mails under this title shall be awarded to the lowest bidder who, in the judgment of the Postmaster General, possesses such qualifications as to insure proper performance of the mail service under the contract. "CLASSIFICATION OF VESSELS “SEC. 408. (a) The vessels employed in ocean mail service | under this title shall be divided into classes as follows: "Class 7. Vessels capable of maintaining a speed of 10 knots at sea in ordinary weather, and of a gross registered tonnage of not less than 2,500 tons. **Class 6. Vessels capable of maintaining a speed of 10 knots at sea in ordinary weather, and of a gross registered tonnage of net less than 4,000 tons. "Class 5. Vessels capable of maintaining a speed of 13 knots at sea in ordinary weather, and of a gross registered tonnage of not less than 8,000 tons. "Class 4. Vessels capable of maintaining a speed of 16 knots at sea in ordinary weather, and of a gross registered tonnage of not less than 10,000 tons. Class 3. Vessels capable of maintaining a speed of 18 knots at sea in ordinary weather, and of a gross registered tonnage of not less than 12,000 tons. "Class 2. Vessels capable of maintaining a speed of 20 knots at sea in ordinary weather, and of a gross registered tonnage of not less than 16,000 tons. "Class 1. Vessels capable of maintaining a speed of 24 knots at sea in ordinary weather, and of a gross registered tonnage of not less than 20,000 tons. "(b) The classification of a vessel may be based upon its speed without regard to its tonnage if the Postmaster General is of opinion that speed is especially important on the particular route on which the vessel is to be employed, and that a suitable vessel documented under the laws of the United States of a higher classification is not available on reasonable terms and conditions, or, on account of the character of the ports served or for other reasons, can not be safely or economically employed on such route. "COMPENSATION UNDER CONTRACTS "SEC. 409. (a) The rate of compensation to be paid under this title for ocean mail service shall be fixed in the contract. Such rate shall not exceed: For vessels of class 7, $1.50 per nautical mile; for vessels of class 6, $2.50 per nautical mile; for vessels of class 5, $4 per nautical mile; for vessels of class 4, $6 per nautical mile; for vessels of class 3, $8 per nautical mile; for vessels of class 2, $10 per nautical mile; and for vessels of class 1, $12 per nautical mile. As used in this section the term 'nautical mile' means 6.080 feet. "(b) When the Postmaster General is of opinion that the interests of the Postal Service will be served thereby he may, in the case of a vessel of class 1 capable of maintaining a speed in excess of 24 knots at sea in ordinary weather, contract for the payment of compensation in excess of the maximum compensation authorized in subsection (a), but the compensation per nautical mile authorized by this subsection shall not be greater than an amount which bears the same ratio to $12 as the speed which such vessel is capable of maintaining at sea in ordinary weather bears to 24 knots. "(c) If the Postmaster General is of opinion that to expedite and maintain satisfactory service under a contract made under this title airplanes or airships are required to be used in conjunction with vessels, he may allow additional compensation, in amounts to be determined by him, on account of the use of such airplanes or airships. Such airplanes or airships shall be American-built and owned, officered, and manned by citizens of the United States. "(d) The Postmaster General shall determine the number of nautical miles by the shortest practicable route between the ports involved and payments under any contract made under this title shall be made for such number of miles on each outward voyage regardless of the actual mileage traveled. "SEC. 410. In the case of failure of a vessel from any cause to perform any regular voyage required by a contract made under this title a pro rata deduction shall be made from the contract price on account of such omitted voyage; and suitable deductions, to be determined by the Postmaster General, may be made from the compensation payable under the contract for delays, failures to properly safeguard the mails, or other irregularities in the performance of the contract. Deductions so determined upon shall be deducted by the Postmaster General from the payments otherwise due and payable under the terms of the contract. The Postmaster General may, in case of emergency, permit the substitution for a particular voyage of a vessel not within the provisions of the contract, even though not conforming to the requirements of section 405. "PASSENGERS, FREIGHT, AND EXPRESS SEC. 411. Any vessel operating under a contract made under this title may carry passengers and their baggage, and freight and express, and may do all ordinary business done by similar vessels. "NAVAL OFFICERS "SEC. 412. Naval officers of the United States on the active list may volunteer for service on any vessel employed in mail service under a contract made under the provisions of this title, and when accepted by the owner or master thereof may be assigned to such duty by the Secretary of the Navy. While in such employment such officers shall receive from the Government half pay, exclusive of allowances, and such other compensation from the owner or master as may be agreed upon by the parties; but such officers while in such employment shall be required to perform only such duties as appertain to the merchant marine. "MAIL MESSENGERS "SEC. 413. Upon each vessel employed in ocean-mail service under a contract made under this title, the Postmaster General shall be entitled to have transported such mail messengers as he may require, for whom shall be provided subsistence, suitable staterooms, and working quarters, all free of charge. "AMENDMENTS AND REPEALS "SEC. 414. (a) Section 24 of the merchant marine act, 1920 (U. S. C., title 46, sec. 880), is amended to read as follows: "SEC. 24. That all mails of the United States shipped or carried on vessels shall, if practicable, be shipped or carried on American-built vessels documented under the laws of the United States. No contract hereafter made with the Postmaster 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. States on or in relation to any such contract for carrying mails No money shall be paid out of the Treasury of the United 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 so built and documented. This section shall not be applicable in the case of contracts made under Title IV of the merchant marine act, 1928.' "(b) Section 7 of the merchant marine act, 1920 (U. S. C., title 46, sec. 866), is amended by striking out so much thereof as reads as follows: The Postmaster General is authorized, notwithstanding the act entitled "An act to provide for ocean mail service between the United States and foreign ports, and to promote commerce," approved March 3, 1891, to contract for the carrying of the mails over such lines at such price as may be agreed upon by the board and the Postmaster General.' "(c) The act entitled 'An act to provide for ocean mail service between the United States and foreign ports, and to promote commerce,' approved March 3, 1891 (U. S. C., title 39, secs. 657665), is repealed. "(d) So much of the act entitled 'An act making appropriations for the service of the Post Office Department for the fiscal year ending June 30, 1918, and for other purposes,' approved March 3, 1917, as provides for contracts for the carrying of mails between the United States and Great Britain (U. S. C., title 39, sec. 666), is repealed. "(e) Subdivision (b) of section 4009 of the Revised Statutes, as amended (44 Stat. L., pt. 2, 900), is amended to read as follows: (b) The provisions of subdivision (a) of this section shall not limit the compensation for transportation of mail which the Postmaster General may pay under contracts entered into in accordance with the provisions of section 4007 of the Revised Statutes (U. S. C., title 39, sec. 652), section 24 of the merchant marine act, 1920 (U. S. C., title 46, sec. 880), or title 4 of the merchant marine act, 1928.' "(f) Any contract made prior to the enactment of this act shall remain in force and effect in the same manner and to the same extent as though this act had not been enacted. Any such contract which expires on June 30, 1928, may be extended for a period of not more than one year from such date. "TITLE V-INSURANCE FUND "SEC. 501. Section 10 of the merchant marine act, 1920 (U. S. C., title 46, sec. 869), is amended to read as follows: "SEC. 10. That the board may create out of insurance premiums, and revenue from operations and sales, and maintain and administer separate insurance funds which it may use to ingure in whole or in part against all hazards commonly covered by insurance policies in such cases, any legal or equitable in terest of the United States (1) in any vessel constructed or in process of construction; and (2) in any plants or property in the possession or under the authority of the board. The United States shall be held to have such an interest in any vessel toward the construction, reconditioning, remodeling, improving, or equipping of which a loan has been made under the authority of this act, in any vessel upon which it holds a mortgage or lien of any character, or in any vessel which is obligated by contract with the owner to perform any service in behalf of the United States, to the extent of the Government's interest therein.' "TITLE VI-TRANSPORTATION OF GOVERNMENT OFFICIALS "SEC. 601. Any oflicer or employee of the United States traveling on official business overseas to foreign countries, or to any of the possessions of the United States, shall travel and transport his personal effects on ships registered under the laws of the United States when such ships are available, unless the necessity of his mission requires the use of a ship under a foreign flag: Provided, That the Comptroller General of the United States shall not credit any allowance for travel or shipping expenses incurred on a foreign ship in the absence of satisfactory proof of the necessity therefor. "TITLE VII-MISCELLANEOUS "SEC. 701. The appropriations necessary to carry out the provisions and accomplish the purposes of this act are hereby authorized. "REQUISITION OF VESSELS "SEC. 702. (a) The following vessels may be taken and purchased or used by the United States for national defense or during any national emergency declared by proclamation of the President: "(1) Any vessel in respect of which, under a contract hereafter entered into, a loan is made from the construction loan fund created by section 11 of the merchant marine act, 1920, as amended at any time until the principal and interest of the loan has been paid; and "(2) Any vessel in respect of which an ocean mail contract is made under title 4 of this act-at any time during the period for which the contract is made. “(b) In such event the owner shall be paid the fair actual value of the vessel at the time of taking, or paid the fair compensation for her use based upon such fair actual value; but in neither case shall such fair actual value be enhanced by the causes necessitating the taking. In the case of a vessel taken and used, but not purchased, the vessel shall be restored to the owner in a condition at least as good as when taken, less reasonable wear and tear, or the owner shall be paid an amount for reconditioning sufficient to place the vessel in such condition. The owner shall not be paid for any consequential damages arising from such taking and purchase or use. "(c) The President shall ascertain the fair compensation for such taking and purchase or use and shall certify to Congress the amount so found by him to be due, for appropriation and payment to the person entitled thereto. If the amount found by the President to be due is unsatisfactory to the person entitled thereto, such person shall be entitled to sue the United States for the amount of such fair compensation and such suit shall be brought in the manner provided by paragraph 20 of section 24 or by section 145 of the Judicial Code, as amended (U. S. C., title 28, secs. 41, 250). "DEFINITIONS "SEC. 703. (a) When used in this act, and for the purposes of this act only, the words "foreign trade" mean trade between the United States, its Territories or possessions, or the District of Columbia and a foreign country: Provided, however, That the loading or the unloading of cargo, mail, or passengers at any port in any Territory or possession of the United States shall be construed to be foreign trade if the stop at such Territory or possession is an intermediate stop on what would otherwise be a voyage in foreign trade. "(b) When used in this act the term "citizen of the United States" includes a corporation, partnership, or association only if it is a citizen of the United States within the meaning of section 2 of the shipping act, 1916, as amended (U. S. C., title 46, sec. 802). "REAFFIRMATION OF POLICY "SEC. 704. The policy and the primary purpose declared in section 7 of the Merchant Marine Act, 1920 (U. S. C., title 46, sec. 866), are hereby reaffirmed. "SHIP OPERATIONS “SEC. 705. In the allocations of the operations of the ships, the Shipping Board shall distribute them as far as possible and without detriment to the service among the various ports of the country. Mr. EDGE. Mr. President, did the conferees agree to change the provision of the bill as it left the Senate which requires unanimous consent of the board in order to sell any of the property under the jurisdiction of the board? Mr. JONES. It was changed to provide that a vote of five would be sufficient. Mr. EDGE. I have read some things in the newspapers, and I want to confirm them. I understand that the construction fund has been changed from 50, or 66% per cent, as was provided, to 75 per cent. Mr. JONES. Yes; 75 per cent. Mr. EDGE. The original bill provided for 50 per cent and in some cases to 66% per cent. Mr. JONES. Yes. Mr. EDGE. I want to congratulate the Senator for improving the bill very much. Mr. BLAINE. Mr. President, I want merely to suggest to the Senator from Washington that I understand that some of the Senators desire to discuss some of the provisions of this conference report. I do not believe it can be done this evening. Mr. JONES. I have spoken to all those where there was any indication that they would like to talk about it, and they all said they did not care to speak on it. There may be others, of course. In my Mr. BLAINE. I was discussing the matter with one of the Senators, and he advised me that he desired to look into the report, and he expected to do so this evening. I think this is too important a proposition to be hastily acted upon. opinion, I do not believe that the conference report ought to be adopted. I do not want to enter upon a discussion of it at this time unless it becomes necessary. My remarks will be brief when the opportunity is afforded to discuss the conference report, at the time when it may be up for disposal. Mr. JONES. Does not the Senator think we might reach a vote on it by half past 5? Mr. BLAINE. The Senator who discussed the matter with me is not in the Chamber at this time. Mr. JONES. Does the Senator mind telling who it was? I have talked to several. Mr. BLAINE. The senior Senator from Idaho [Mr. BORAH] is one with whom I discussed this matter. Mr. JONES. I have not talked with him. Mr. BLAINE. He procured the report, and I understand has left the Chamber, and expected to investigate the report and perhaps discuss it. At this time I have some questions I would like to ask the Senator from Washington, and they might be disposed of now. Mr. JONES. I would be glad to answer them if possible. Mr. BLAINE. So that I may not be mistaken about the fact as to what the bill attempts to accomplish. I understand the bill provides for a loan fund of $125,000,000 out of revenues. Mr. JONES. Yes. Mr. BLAINE. And then additions to the loan fund, bringing it up to $250.000.000, out of an appropriation, if it is authorized. Mr. JONES. The first provision is practically the law as it is now, the act of 1920. Mr. BLAINE. Then, I understand that in the construction of vessels that are to be used in the coastwise trade, that are built by private industry, they are required to pay not less than 54 per cent per annum for the money they borrow. Mr. JONES. That is the existing law, the act of 1920. Mr. BLAINE. Am I correct in the understanding that vessels engaged in foreign trade may obtain loans at a rate of interest as low as 21⁄2 per cent? Mr. JONES. No; I do not understand it is that low. I understand that the lowest rate is about 34 per cent. Mr. FLETCHER. It is whatever the Government rate is. Mr. JONES. Yes; it is the Government rate. |