Statement on the United States Shipping Board.

THE PRESIDENT said:

"I do not propose to fill the vacancy on the Shipping Board, created by the death of Mr. Plummer, for the present. I am in hopes that Congress will pass the legislation necessary to reorganize the whole of our merchant marine activities in order that we may make drastic reduction of expenditures in this session. If so, the situation as to membership of the Board might be greatly altered.

"I have pointed out in messages and elsewhere on several occasions the importance of this matter in production of sound economy. We have merchant marine activities in many different departments and independent establishments. We now expend in aid and loans to the merchant marine services, directly and indirectly, about $100 million per annum. We cannot remedy the situation without legislation.

"The present Shipping Board should be abolished. Its administrative functions should be transferred to the departments. This is not a criticism of the Board but a criticism of an impossible and expensive form of organization and divided responsibility. The Board was designed originally for regulatory purposes, and was set up by Congress independent of the Executive. It has been subsequently given enormous administrative and financial functions. The President has no authority or control over its activities. With regional and bipartisan bases of selection, together with independence from all control except the indirect pressures of Congress, it has had extreme difficulty in functioning cohesively, and in any event no board or commission can successfully function in executive work.

"Moreover, the Board's authority in certain matters is divided with the Postmaster General. We are under the law giving ship subsidies as mail contracts. The Postmaster General necessarily looks at them as a matter of mail, the Shipping Board as a matter of trade routes and a matter of selling ships with a mail subsidy attachment. There can be no adequate check or coordinated direction of expenditure or commitments.

"There is a function in regulation of shipping rates which should be extended to intercoastal rates and to inland water rates, which is a much needed function for the development of shipping, and which could be administered at a comparatively small sum per annum by a new organism comprised of the present members of the Shipping Board, for their experience is most valuable.

"As I have said, there are many other merchant marine activities in the Government, and if we are to secure real economies we must have drastic consolidation and more definite responsibility."