The President's News Conference
OCEAN MAIL CONTRACTS
THE PRESIDENT. Once or twice I have had questions on the mail contracts let under the new Merchant Marine Act. I haven't been able to reply to them because we had no determination from the Interdepartmental Board. That Board, as you know, comprises the Postmaster General, the Secretary of Commerce, the Secretary of the Navy, and the Chairman of the Shipping Board.
They came to some conclusions yesterday and made some recommendations to me. The whole correspondence we will hand out to you mimeographed, which will explain itself.
BACKGROUND DISCUSSION OF NAVAL DISARMAMENT NEGOTIATIONS
Now, when we first undertook to revise our press relations here we divided our discussions into two or three categories, one of which was purely background material. I would be prepared to discuss with you now the background on the negotiations that have proceeded in the matter of naval agreement, but my understanding at that time was that background material was not quotable or was not attributable, but it was simply for your information so that you may be guided rightly in making up your own discussions.
I felt some limitations because there seems to have been some misunderstanding as to whether or not it could be attributed to the White House or high officials or something, and it makes it much more difficult for me to give you information which I think would be of use to you. If you wish to use it, it is on your own authority. You have no occasion to use it if you do not want to. It is not propaganda. It is merely a question of trying to keep you on the right track as to what is going on. I recognize your ability to represent the fact as you see it here in Washington. But I have a responsibility in these matters, and I do not wish that such information by some comma or sentence be distorted [p.285] and produce difficulties for us in our negotiations. If that can be our understanding on this occasion I will go to some extent into this discussion as it exists today.
Now, the great purpose of all those negotiations has been to bring about a reduction and a limitation of arms of all categories--naval arms, the primary purpose of a stronger foundation for peace and the limitation of competitive armament. As a secondary purpose, it is also important for the reduction of expenses.
As you are aware, the discussion was taken up as between ourselves and the British in the first instance. That is more or less the outgrowth of the fact that the Geneva Conference split on differences between the United States and Great Britain. It has been felt if we could plane out our difficulties--the difficulties between the two powers--that we would be in a much more favorable position to bring about an international agreement at a subsequent conference.
In the discussion with the British we have endeavored to develop a series of principles upon which we could enter the conference, those principles relating entirely to relationships between ourselves and the British. Now, the first of the principles to be established was that there should be brought about a parity in all categories of naval ships. We have found on examination that this parity can be best brought about as at 1936. That date has two purposes. The first is that that represents the expiration of the Washington Arms Agreement, when the agreement covering battleships and aircraft carriers comes to an end, and it has the further advantage that we can reach that date without the scrapping of any ships on the American side except by obsolescence-without any premature scrapping you might say. But we can reach it by obsolescence and the natural scrapping of ships that have outlived their time. We will, therefore, propose that date for reaching parity.
One purpose in arriving at that date also has been that there would naturally be a further conference over naval arms in 1936 to take up the questions of the Washington Arms Conference, and if we have all of the major navies stabilized at that time that conference could undertake further steps for the limitation and reduction of armament that is not [p.286] possible while we are in the situation of very largely unbalanced navies between the major powers.
I have already stated that one of the principles was to arrive at parity, and that parity to be arrived at by separate categories, that is, battleships, aircraft carriers, cruisers, destroyers, and submarines. Such parity by categories in aggregate makes for more complete parity in fleets as a whole.
Now, in the matter of battleships, as you know, that situation is stabilized under the treaty until 1936--also aircraft carriers--and we propose at the conference that there should be a delay in replacement in such fashion as to considerably reduce the expenditure programs which will be necessary if we make all of the replacements required under the arms treaty. And at the same time we make a more mobile situation for the probable conference that would take place in 1936.
In the matter of submarines, obsolescence will greatly reduce both navies below their present strength before 1936, and a maximum tonnage can be agreed upon in that category very much below the present naval strength. The precise figures have not yet been determined, and it does not represent any difficulties between ourselves and the British. The discussion is largely with other powers.
Likewise in destroyers we have hoped for a result which will reduce the present combined naval strength in destroyers by something like 200,000 tons. As you will recollect, we have some 300,000 tons of destroyers now, and the British I think have something like 200 in construction and operation, and by obsolescence our figures will fall far below these two amounts, and we hope to agree upon some figure far below our present strength. That figure has not been determined, but it will probably be somewhere in the neighborhood of 125,000 to 150,000 tons apiece, to represent a decrease in present naval strength of somewhere about 200,000 tons.
The question of cruisers is more difficult, and has always been more difficult because of the difference in the character of national need. The British have very widespread islands and coastline, which they practically garrison or police in peace times with small cruisers. We, on the other hand, require our predominant strength in cruisers in wider [p.287] steaming strength because we have more widely spaced naval bases than have the British.
It has been stated in the London dispatches that the British have considered that they require 340,000 tons of cruisers so as to cover both the elements of police duty and the balance of other naval equipment. You will realize that that is a major concession from the positions hitherto occupied by the British Government; that at the Geneva Conference the minimum was somewhere in the neighborhood of 450,000 tons.
The problem between us at the present moment on cruisers is not a question of tonnage. It is solely a question of the character of the ships, although I should have preferred a less high mark in gross tonnage. But differences in point of view on that question have now narrowed down to what part of the American tonnage should be represented by the large 10,000-ton, 8-inch cruisers and the balance to be required to arrive at parity to be made up of the lighter type of cruisers with 6-inch guns.
In any event, the British are willing to limit themselves to 15 of the larger cruisers, that is 15 cruisers with guns in excess of 6 inches. They have some cruisers which do not quite approach that which they will be doing away with. And it means they have stopped construction of these.
Now, one problem naturally enters into the whole question of bringing about equality in categories, and that is a factor that must be introduced for difference in the age of vessels in the different fleets. That factor was introduced, although it was not stated as part of the agreement, but was introduced in the considerations and the discussions bringing about parity in battleships, and it becomes even more vividly necessary in other categories because of the wide disparity in the average ages of our fleets, and those ages will vary at different periods. At one period we will have the newer and the more modern fleet in a given category, and the British will have the older and less modern fleet, and then with replacements they will become more modern and ours less modern. It is, therefore, necessary to find an age factor. There is also a factor to be found representing some differential as between the ships equipped with 8-inch and 6-inch guns. We do not believe there is any difficulty in [p.288] that particular. In the larger sense it must be borne in mind that the total tonnage of each of the two navies as they stand today is somewhere in the amount of 1,200,000 tons of fighting ships.
Our problems in this particular discussion are narrowed down practically to the one item as to whether 30,000 tons of our cruiser strength shall be represented by three cruisers with 8-inch guns, or whether it should be represented by four or five cruisers of 6-inch guns. There is no discussion of the question of tonnage. It is a question of minor dimensions in that character. In the larger picture of 1,200,000 tons that should not represent a difference that is impossible of reconciliation in some fashion when we get to actual conference.
Now, if we can by international agreement bring about between ourselves and the other powers limitation of arms on some of these lines, we shall have tremendously reduced the total naval tonnage of the world. We shall have reduced our own naval tonnage as well. We shall have saved the world billions of expenditure which will inevitably follow in the absence of some agreement of this character, and we shall by such an agreement have stabilized our own Navy and taken it out of the questions of constant dispute and propaganda and constant contention that it has, and difficulties that it has in obtaining appropriations.
And we shall have secured the major purposes over all that we will have stopped the discussion which constantly vibrates from all countries as to relative naval strength and a consequent stirring up of distrust and lack of confidence, and in the end we shall have also created a situation where the naval powers may convene in 1936 again in a very much more advanced situation than at present and can look forward at that time to a better developed public opinion, better understanding in it to even a larger step than would be possible at the present moment. That is not said to minimize the importance of the present step, but only to emphasize how important it is that we should come to an agreement now, if that is possible. And it is my impression that we have reached a position, at least so far as Great Britain and ourselves are concerned, where we can go into a conference with confidence that we will come out with an agreement. That is all.
Q. Do we understand that there will be no international conference until 1936?
THE PRESIDENT. It is proposed that we shall have a conference of the major naval powers some time as early in December as possible to carry out this proposal. I only mentioned 1936 as the time when there should be an opportunity for a second conference, at which time the navies of the world would have all been stabilized, and it would be possible to make even greater steps.
Note: President Hoover's forty-ninth news conference was held in the White House at 4 p.m. on Friday, September 13, 1929.
In conjunction with the President's remarks on ocean mail contracts, the White House released a letter, dated September 12, from the Postmaster General and a resolution by the Interdepartmental Committee, as follows:
My dear Mr. President:
I have the honor to report that since the passage of the Merchant Marine Act of 1928 the Post Office Department has awarded twenty-five ocean mail contracts involving an annual expenditure of $12,561,249.00. Expenditure of all of the monies appropriated by Congress pursuant to the provisions of that Act has been authorized except $3,194,312.00 of the Deficiency Appropriation of 1930.
The contracts already awarded require the placing in service of forty-one larger and faster vessels than those now in service and the equipping of four vessels already in service with refrigeration, and with facilities for carrying passengers. Ten new vessels will be supplied and others will be completely reconditioned. New vessels and reconditioning will be provided by American ship yards.
For several weeks the Interdepartmental Committee appointed by the President to advise the Post Office Department with respect to the duties enjoined upon it by Congress in the administration of the Merchant Marine Act of 1928, has had under consideration two bids for carrying the mails from New Orleans to ports on the East Coast of South America.
One of the bids, that of the Mississippi Shipping Company, Inc., of New Orleans, Louisiana, offers to carry the mails in Class 6 vessels for $2.50 per mile. The other bid, that of the Munson Steamship Line of New York, offers to carry the mails in Class 6 vessels for $2.00 per mile. The difference between the two bids for a ten-year contract period would amount to approximately $1,118,715.00.
The vessels of the Mississippi Shipping Company, which I am informed is owned by citizens of New Orleans, were purchased from the United States Shipping Board with the assurance that the purchaser would be awarded a mail contract under the provisions of the Merchant Marine Act of 1928.
On the other hand, Section 406 of the Merchant Marine Act of 1928 requires the Postmaster General, before making any contract for carrying ocean mails, to invite competitive bids by public notice in the daily newspapers in the cities of Boston, New York, Philadelphia, Baltimore, New Orleans, Charleston, Norfolk, Savannah, Jacksonville, Galveston, Houston, and Mobile.
Section 407 of the Merchant Marine Act of 1928 is as follows:
"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."
The Comptroller General has advised the Post Office Department that contracts for the carrying of ocean mails must be awarded to the lowest responsible bidder.
I need not say that the Post Office Department is wholly in sympathy with the general policy of the Merchant Marine Acts of 1920 and 1928; to wit, the policy of establishing and maintaining an American Merchant Marine.
I need not say that the Post Office Department in the matter of administering the Merchant Marine Act, as in all other matters, stands ready to carry out the will of Congress as enacted into law. It is indispensable, however, that we should know precisely what the mandate of Congress is.
In view of the widely divergent constructions which have been placed upon the various laws relating to the Merchant Marine, the Interdepartmental Committee has unanimously adopted a resolution, a copy of which is transmitted herewith. I am of the opinion that the course recommended by the Interdepartmental Committee should be followed, and hope that Congress, by an appropriate amendment to the Merchant Marine Act of 1928, will make it clear whether in the award of ocean mail contracts under the provisions of that act preference is to be given to locally owned shipping lines operating vessels purchased from the United States Shipping Board, or whether such contracts shall be awarded to the lowest responsible bidder, regardless of present or previous ownership of the vessels offered for service.
WALTER F. BROWN
[The Honorable President of the United States]
WHEREAS it is claimed on behalf of certain shipping companies which have purchased vessels from the United States Shipping Board, that such purchase was made with the assurance that such companies would be awarded mail contracts under the provisions of the Merchant Marine Act of 1928,
AND WHEREAS it is further claimed on behalf of said shipping companies that [p.291] certain sums of money were appropriated by Congress for the purpose of awarding mail contracts to such companies,
AND WHEREAS the Postmaster General, in accordance with the provisions of Section 406 of the Merchant Marine Act of 1928, has invited competitive bids for carrying the mails on certain trade routes operated by shipping companies which have purchased vessels from the United States Shipping Board,
AND WHEREAS in at least one case the company operating vessels purchased from the Shipping Board is not the lowest responsible bidder,
AND WHEREAS Section 407 of the Merchant Marine Act of 1928 provides "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";
BE IT RESOLVED by the Interdepartmental Committee that the Postmaster General be advised to reject all pending bids for mail contracts under the provisions of the Merchant Marine Act of 1928, and that further action under the provisions of said Act be deferred until Congress shall have had an opportunity to clarify existing legislation with respect to the award of ocean mail contracts.
Herbert Hoover, The President's News Conference Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/207176