bill, because it is just the mere fact of statehood that might make the present Maritime Act ambiguous. We are not changing the Maritime Act in any respect.

The CHAIRMAN. What you mean is that the enabling act itself setting up a State creates an ambiguity with reference to the application of the present maritime law.

Mr. KLINE. That is right, sir. There is no change in law. Otherwise that should be before the Merchant Marine Committee, of course. The CHAIRMAN. Dr. Miller and I have to go over to the Rules Committee to present our resolution referred to at our last meeting. Mr. Aspinall will take over.

Mr. ASPINALL (presiding). We have one more witness to hear this morning. Ralph B. Dewey, Washington representative of the Association of Pacific Steamship Companies.

Take the witness chair and give your name to the reporter and statement of whom you represent.

STATEMENT OF RALPH B. DEWEY, WASHINGTON REPRESENTATIVE, ASSOCIATION OF PACIFIC STEAMSHIP COS.

Mr. DEWEY. Thank you, sir. My name is Ralph B. Dewey, Washington representative, Pacific American Steamship Association.

Mr. Chairman, I have no prepared statement and I simply would like at this time to identify myself with the statement of Mr. Kline, and to identify the three steamship lines for whom I speak this morning the American President Lines, the Oceanic Steamship Company, and Pacific Transport Lines. Those three companies fall into the same category under the present subsidy program of the Maritime Administration as does the United States Lines, and I join myself with that statement and ask for this clarifying technical amendment,

sir.

Mr. ASPINALL. Any questions?

Mr. WESTLAND. One question. Mr. Dewey, are there any known subsidized lines running to the Hawaiian Islands from the Pacific coast?

Mr. DEWEY. Yes, sir, the Matson Navigation Co. runs to Hawaii. They are purely a coastwise carrier and for the reason that the coastwise trade is reserved these various prohibitions have been written into the Merchant Marine Act. With the exception, however, that on the course of a foreign voyage these vessels may call at Hawaii but receive no subsidy for that portion of their total foreign voyage.

Mr. WESTLAND. How much farther than the Hawaiian Islands would you have to go in order to constitute a foreign trip or a foreign Voyage?

Mr. DEWEY. I don't believe that the law specifically sets it out in that fashion, Mr. Westland.

Mr. WESTLAND. For example, if Hawaii became a State and Palmyra is excluded, could you go to Palmyra and that would be a foreign Voyage?

Mr. DEWEY. Theoretically, yes, sir; but in practice the essential trade routes that the foreign trade operators ply extend another two, three, and four thousand miles beyond Hawaii in their outward leg.

Mr. WESTLAND. If you were to do that, if you were to merely go to Palmyra, then your subsidy would be in a much smaller ratio, is that correct? Because the distance from Hawaii to Palmyra is so much shorter.

Mr. DEWEY. In that case it would be according to the revenue that the domestic portion of your total voyage receives. Now, I would seriously doubt that very much foreign trade would generate or be discharged at Palmyra, in which case your entire foreign voyage would be almost all domestic and you would get no subsidy anyway.

Mr. ASPINALL. Any further questions?

Mr. SHUFORD. Then under this amendment and if Hawaii was admitted to the Union, it would have an advantage over the other States of the Union?

Mr. DEWEY. In respect to

Mr. SHUFORD. In respect to the shipping?

Mr. DEWEY. If I interpret your question correctly, sir, the same advantage that now redounds to Hawaii as a Territory could redound to any other State in the Union.

Mr. SHUFORD. If the amendment was offered for the other States? Mr. DEWEY. No, at the present time a foreign trade operator who is on a subsidy, if he gets permission from the Maritime Board, can incorporate in his total foreign voyage an intercoastal leg of the voyage. American President Lines, for example, travels on a round-theworld service. Now part of that round-the-world service goes from New York to California and then proceeds on across the Pacific through Singapore, Suez, and to New York. Now the portion represented by the New York to California leg is a domestic portion and is between 2 States of the present 48 States.

Mr. SHUFORD. And there would be no subsidy for that?

Mr. DEWEY. That company gets no subsidy for that leg. They get that permission through this exception clause in the Merchant Marine Act just as do those carriers going out to the Far East get permission to call at Hawaii but forego any subsidy on a formula based on the revenues between domestic ports.

Mr. SHUFORD. The fact is, Hawaii would have an advantage under this amendment that does not accrue to the other States of the Union. Mr. DEWEY. I don't believe I understand exactly what you mean by "advantage."

Mr. SHUFORD. In other words, you would give a subsidy under your amendment to boats that go to the State of Hawaii if it is admitted? Mr. DEWEY. No, sir, I am sorry. At the present time there is no subsidy.

Mr. SHUFORD. I don't mean at the present time. I say if it is admitted with this amendment.

Mr. DEWEY. No, sir, it would not change in one iota, change in any way the present provision.

Mr. SHUFORD. Which you have now.

Mr. DEWEY. Which we have now.

Mr. SHUFORD. Other States do not get that?

Mr. DEWEY. Excuse me.

Mr. WESTLAND. Will the gentleman yield?

Mr. SHUFORD. Yes.

Mr. WESTLAND. Wouldn't this merely permit you to stop at Hawaii, which you otherwise couldn't do without this?

Mr. DEWEY. It would permit us to continue to stop at Hawaii.
Mr. WESTLAND. Yes.

Mr. DEWEY. Which, by designation in law, is island Territory and if that becomes an island State then a question arises as to whether all of these contracts that are written really apply to Hawaii because it is no longer an island Territory.

Mr. SHUFORD. That is all.

Mr. ASPINALL. In other words, as I understand it, it is permissive for the Territory but with no advantage as far as the shipper or receiver is concerned. Isn't that correct?

Mr. DEWEY. That is roughly correct, Mr. Chairman. I would only say this: That the Hawaiian economy gets the benefit primarily of the service from Hawaii to the Far East, for example, and from the Far East to Hawaii, which, without these permissive calls that service just wouldn't be there and it would all go to foreign lines probably. Mr. ASPINALL. Mr. Pillion?

Mr. PILLION. I still don't quite understand the difference in the sibsidy. The foreign shipper shipping to the Far East from New York stops at California and then proceeds on to one of the Far East ports, do I understand that that shipper may apply to the Maritime Commission for a subsidy on that part or that leg of the trip between New York and California?

Mr. DEWEY. No, sir, he may not. He may simply apply to the Maritime Board for the subsidy on the foreign portion with permission to call at the domestic portion, as you have explained, the New York to California portion. He will be permitted to continue that service in the course of his longer foreign voyage. And the only subsidy he can apply for is the foreign part of it and his application is in two parts: (1), for subsidy on the foreign part, and (2), for permission to call at the domestic port.

Mr. PILLION. I see. Now, how does the Maritime Commission determine the eligibility of that foreign shipper to receive a subsidy on that portion of the trip from California to the Far East, permitting that stop? What is that discretion based upon? What is the standard by which it judges?

Mr. DEWEY. May I clarify the question. Do you mean, for instance, an American operator sailing from San Francisco to the Far East, wishes permission to stop at Hawaii en route?

Mr. PILLION. No. The shipper who ships from New York and stops in California and then proceeds on to the Far East.

Mr. DEWEY. Right.

Mr. PILLION. He can, you say, by applying and getting permission, chtain a subsidy for shipping for that part of the trip between California and a foreign port in the Far East?

Mr. DEWEY. That is right.

Mr. PILION. Now, is that automatic?

Mr. DEWEY. No, sir.

Mr. PILLION. That is what I am trying to get at. it is automatic.

But with Hawaii

Mr. DEWEY. No, sir. It is a permissive hearing. There is a whole hearing machinery set up. I might say, parenthetically, I sat through ne of those hearings which extended over a period of 6 months whereby all of the parties involved including the Matson Navigation Co.,

who has exclusive rights, presented its case and actually opposed this particular request to call. They did not oppose. I want to clarify that. They opposed certain portions of it which were removed. And the criteria upon which the Maritime Board finally gave this particular company permission to call at Hawaii was that it would not injure the exclusive carrier, namely, the Matson Co., who was a nonsubsidized carrier, as you asked in your original question. You can't impose a subsidized line upon a nonsubsidized service and get permission unless the injury is recognized to be negligible.

I don't know if I have answered your question, but this permissive business is the result of an extremely elaborate hearing machinery whereby all parties at interest have an opportunity to be heard and it is only after the Board determines that injury is not a great one or is not significant that the permission is granted.

Mr. PILLION. As I understand it then, the advantages, whatever they may be, apply with equal force to the States and to the stops from one State to another along the coast.

Mr. DEWEY. That is correct, sir.

Mr. PILLION. And there would be no difference, even after the amendment.

Mr. DEWEY. That is right. It is there now and it would just continue.

Mr. ASPINALL. Thank you, very much.

Mr. DEWEY. Thank you, Mr. Chairman.

Mr. ASPINALL. The committee will now resume its hearing on explanations of the bill. Today we are asking Dr. Taylor, our staff member, to begin with title I relative to Hawii and give his explanation of the different sections.

(There was discussion off the record.)

Mr. TAYLOR. Thank you, Mr. Chairman.

I think it would be well for us this morning to ask the Delegate from Hawaii to come down to the witness table if she would, to offer assistance at the proper times.

Mr. HALEY (presiding). All right, Mrs. Farrington.

STATEMENTS OF HON. ELIZABETH P. FARRINGTON, DELEGATE IN THE HOUSE OF REPRESENTATIVES FROM THE TERRITORY OF HAWAII; AND DR. JOHN L. TAYLOR, PROFESSIONAL STAFF MEMBER OF THE COMMITTEE ON INTERIOR AND INSULAR AFFAIRS OF THE HOUSE OF REPRESENTATIVES

Mr. TAYLOR. Section 101 of H. R. 2535 on page 1 authorizes the citizens of the United States who are bona fide residents of the Territory of Hawaii to form a constitution and a State government and through proper procedures to have the present Territory of Hawaii become a State.

Mr. DAWSON. Mr. Chairman, is it my understanding that we are at liberty to propound questions as we go along?

Mr. HALEY. That is correct. Does the gentlemen have any now? Mr. DAWSON. Just at that point. Hawaii has adopted a constitution.

Mr. TAYLOR. That is right.

Mr. DAWSON. Is it my understanding that this constitution is the same one we will readopt after they become a State?

Mr. TAYLOR. That constitution has already been adopted. The constitutional convention has been held and the constitution has been adopted by the constitutional convention.

Mr. DAWSON. Now that is a proposed constitution, they are not yet a State.

Mr. TAYLOR. Well, the constitution is proposed.

Mrs. FARRINGTON. Mr. Dawson, we have had a constitutional convention and passed our constitution which has been ratified by the people of Hawaii at a regular election. And I assume that when the time comes, if this bill should pass, there will be some adjustment by the Congress, such as language in the present bill that will make it possible to accept this constitution.

Mr. DAWSON. Do you have a further explanation, Mr. Abbott?

Mr. ABBOTT. On that point, Mr. Dawson, the Territory of Hawaii ratified the constitution as Delegate Farrington stated, and it is therefore in compliance with the enabling act which sets out the constitution content requirement. It will be noted, as Dr. Taylor explained in the bill, that there are two additional propositions which must be submitted to the people in a subsequent proposition submission. But the Territory having had before it the requirements of that constitution did, as has been explained, convene a constitutional convention, they drew up their constitution, it was submitted to the people and ratified, which falls, therefore, within the requirements of the enabling

act.

Mr. DAWSON. But as it stands now, it is a Territorial constitution? Mr. ABBOTT. It is the proposed constitution of the new State of Hawaii. I believe that is the label on it.

Mr. DAWSON. That was my original question. That it is a proposed constitution.

Mr. TAYLOR. It is not being used at the present time. Nor can it be used until Hawaii becomes a State and then I assume that it will be readopted as the State constitution upon the passage of this bill. Mrs. FARRINGTON. By the Congress.

Mr. DAWSON. Am I correct?

Mr. SHUFORD. Will the gentleman yield there?

Mr. DAWSON. Yes.

Mr. SHUFORD. Under section 102, I note the provisions for the adoption of that constitution. Isn't that correct?

Mr. TAYLOR. On section 102, page 2, yes

sections 2 and 3 of the act of the Territorial Legislature of Hawaii, "An act to provide for constitutional convention”—

et cetera. Then skipping down to line 19

are hereby ratified, and the convention for which provision is made in said act of the Territorial legislature shall be, and is hereby recognized as the body authorized to form a constitution and State government for said proposed State. That constitution has been ratified by the constitutional convention and the people of Hawaii by a 3 to 1 vote. Section 102 authorizes that constitutional convention and recognizes it is the body that has been authorized to prepare it. When proper procedures have been followed, then the Presidential proclamation will certify the vote and the ratification and establish the Territory of Hawaii as a State.