Commissioner PLUMMER. Yes * On the other hand, if the United States shall not be obligated to pay the above named sums or any part of them, I would refer it to your good judgmeent to determine whether we should accept an offer of $60,000 for a vessel which the department of ship sales and all my technical advisers inform me is worth in the neighborhood of $400,000. Mr. DAVIS. Now, Mr. Freund, the general counsel, does not undertake to say, or even give an opinion there, that we were liable, does he? Commissioner PLUMMER. No; he simply states the two propo sitions. Mr. DAVIS. Is it not a fact, Mr. Plummer, that the general counsel advised against doing this thing? Commissioner PLUMMER. Well, I do not recall that he did. Mr. DAVIS. Now, look at that last paragraph. What does he say about its liability? If it is likely that the Congress or executive department of the Government, pursuant to authority to be given by Congress, shall determine hereafter that the claimants of this vessel should be paid its value at the time of taking— Now does not he predicate it entirely upon subsequent action by Congress? Commissioner PLUMMER. Apparently. Mr. DAVIS. And does not that recognize the fact that it is a matter to be determined by Congress alone? Commissioner PLUMMER. Yes. But two months later he brings in this resolution. Mr. DAVIS. Yes. Now what happened between then to cause that, do you know? Commissioner PLUMMER. No; the matter was in the hands of the chairman. Mr. DAVIS. Is it not a fact, as appears from the correspondence between the State Department and the Shipping Board, a copy of which you have before you there, that at first the chairman of the Shipping Board and the general counsel showed very unmistakably that they were bitterly opposed to doing this thing, and it was only after a course of correspondence and various conferences that are referred to in this correspondence for several months before, they finally yielded to the importunities of the State Department? Commissioner PLUMMER. I would not say that, Judge, that they were bitterly opposed, because they state both propositions here. First he says this, "If we are liable for claims, or even a considerable percentage of the claims, then it would be desirable from all points of view to accept the offer." He states it both ways. Mr. DAVIS. Yes; but the word "if" is in there? Commissioner PLUMMER. Yes. Mr. DAVIS. And "if subsequent action is taken by Congress fixing such liability "? Commissioner PLUMMER. Yes. Mr. DAVIS. And that never has been done, has it? Commissioner PLUMMER. No. Mr. DAVIS. Another thing, you say that the Martha Washington is 6,500 dead-weight tons? Commissioner PLUMMER. No; 5,300 and something net, and 8,000 and something gross. Mr. DAVIS. Well, your Shipping Board report says she is 6.500 dead weight. Commissioner PLUMMER. Well, I do not know how they could have dead weight in it, because passenger ships do no have dead weight. Mr. DAVIS. But that is the way you gave it. Commissioner PLUMMER. There are a lot of other people in the Shipping Board besides me. Mr. DAVIS. Well, if you want to measure her by dead-weight tons, as a matter of fact the Leviathan is only 15,000 dead weight? Commissioner PLUMMER. NO: because there is not any such thing as dead weight in connection with a passenger steamer. Mr. DAVIS. There is as much dead weight in regard to the Leriathan as there is the Martha Washington? Commissioner PLUMMER. Yes: but there is not with either. Mr. DAVIS. But you referred two or three times to the dead-weight tonnage of the Martha Washington. Mr. CONNALLY. No; he said "net." Mr. DAVIS. Then, I beg your pardon. Commissioner PLUMMER. Passenger ships have two tonnage measurements, gross and net. A freight vessel has gross, dead weight and net. Your gross includes your whole thing. Mr. DAVIS. I want to say there is your Shipping Board report, one of them, and that it does give dead-weight tonnage both for the Leviathan and the Martha Washington, does it not [handing paper to witness]? Commissioner PLUMMER. Yes. If that is in there, it shows I never supervised it, because I never put dead weight onto a passenger ship. Mr. DAVIS. Of course, I do not propose to be responsible for any errors made by the Shipping Board. Commissioner PLUMMER. I do not want to be, Judge; although I am liable to be held responsible. Mr. DAVIS. But we assume, and we have a right to assume your own figures as being a proper basis for questioning. Commissioner PLUMMER. But the official record there you will find in Lloyds. Mr. COOPER. Who wrote that record? Commissioner PLUMMER. Oh, some of our clerks; I do not know. Mr. DAVIS. It is their own report-the United States Shipping Board. Mr. COOPER. I know. You say "some of your clerks." Is that the way the board allows things to be sent out like that in which, according to your statement, there is no real common sense? The board is responsible for its own clerks. Commissioner PLUMMER. Why, Mr. Philbin makes up his part of the report Mr. COOPER. What is the title of that? Mr. LINEBERGER. Fourth Annual Report of the United States Shipping Board, June 30, 1923. Commissioner PLUMMER (continuing). And if he should make a mistake, which Harry very seldom does, why it would be in there. Mr. DAVIS. Now what is the gross tonnage of the Martha Washington? Commissioner PLUMMER. It is 8,312 tons. That is the cubical contents of the vessel measured in feet tons. Mr. DAVIS. If you keep talking about what a worthless vessel this was Commissioner PLUMMER. I did not call her a worthless vessel; no indeed. I said she was tied up. Mr. DAVIS. I want to ask you if it is not a fact, as shown by your records, that at first the Government undertook to buy this vessel from this Austrian company, who owned it, instead of requisitioning it, and that they first asked $3,000,000 for her and finally $2,500,000, and finally $2,250,000, which was the lowest they would come to, after which we requisitioned her? Commissioner PLUMMER. Yes. Mr. DAVIS. I will ask you if it is not a further fact that we used her during the war in transporting over 23,000 troops to Europe? Commissioner PLUMMER. I think that is right. Mr. DAVIS. And used her to bring them back? Commissioner PLUMMER. Yes. Mr. DAVIS. I will ask you if it is not a further fact that while she was still a transport, and before she had been reconditioned, the International Mercantile Marine, to wit, in January, 1920, offered the Shipping Board $1,100,000 for her, under an agreement to operate her all of her life in the foreign trade and under the American flag? Commissioner PLUMMER. Yes; about the same time they offered more than that for the Agamemnon and Mount Vernon, and we have still got them tied up and they are an expense to us. Mr. DAVIS. I want to ask you if it is not a further fact that the experts of the Shipping Board appraised this vessel for over $400,000 at the time and under existing conditions and according to the market value, as stated by Mr. Freund in this letter of September 13, 1919. Commissioner PLUMMER. Yes; he says "about $400,000." Mr. DAVIS. Now on the question as to whether the Shipping Board had a right to dispose of this vessel or not, you say that it was not called to the attention of you members as to what the position had been of Mr. Charles E. Hughes as attorney for this company. Commissioner PLUMMER. Oh, yes; we knew he had been attorney for the company. That was brought out during the talk. Mr. DAVIS. But were you not advised as to what position he had taken in regard to that? Commissioner PLUMMER. No; I do not think anything was discussed except the fact that the then Secretary of State had, previous to taking that office, been an attorney seeking to get the Martha Washington returned to her previous owners. Mr. DAVIS. In what connection was that brought up and discussed? Commissioner PLUMMER. Well, I do not remember. It came out in the general talk. Mr. DAVIS. In other words, the question arose in discussion that "here is the State Department, of which Mr. Hughes is Secretary, now urging that this vessel be returned for $60,000, and he had previously been attorney for the company to which this resolution proposed it should be returned"? Commissioner PLUMMER. Yes. Mr. DAVIS. What opinion was expressed by the Shipping Board as to the propriety of such a proposition? Commissioner PLUMMER. Well, I do not recall that any opinion was expressed. But I know that as far as I was concerned, and I think as far as Senator Chamberlain was concerned, the fact that Mr. Hughes had been advocating the return of this vessel did not influence our decision in the matter. Mr. DAVIS. I do not mean that; but I never have ascertained just how it happened you all had been discussing the fact he had been the attorney for them. Commissioner PLUMMER. Why, the matter had been brought to the chairman's attention by the State Department, by Mr. Phillips, and he had expressed the opinion that it would be desirable to have this vessel returned to its former owner; that we were liable to have to meet considerable expenses, and that was his advice. That brought the matter squarely up to the board. Mr. DAVIS. That was who's advice? Commissioner PLUMMER. Assistant Secretary of State, I think. Mr. DAVIS (continuing). Undersecretary of State, and Mr. Hughes was Secretary of State. Commissioner PLUMMER. Yes; oh, yes. Mr. DAVIS. Now let us read the next preamble of this resolution, which the board adopted on October 11, 1922, which is as follows: And whereas the Department of State has advised the board, by letter to the chairman thereof, dated September 30, 1922, that the Cosulich Line lost its American status and became an Italian company upon the transfer of Trieste to Italy in pursuance of the treaty of St. Germain; that it is probable that the United States will be called upon to compensate the former owners for the use and retention of the said vessel by the United States and that for reasons of policy it is desirable that the offer of the Cosulich Line above referred to be accepted: Be it resolved- And so forth. Now, that, as stated in the preamble, was one of the reasons that prompted your action, was it not? Commissioner PLUMMER. Yes; that we were liable to have to pay bills; and if we based the prospective bills on the rate of compensation we had already paid-that is, over half a million dollars-for a vessel that then was worth only $400,000, the best thing we could do was to settle the matter right there. Mr. DAVIS. In other words, you were influenced by those representatives of the Department of State? Commissioner PLUMMER. So far as they showed that we were liable to have to pay claims. Mr. DAVIS. Yes. Commissioner PLUMMER. Of course we had nothing to do with policies. Mr. DAVIS. Now, if, as a matter of fact, they were not liable, then this transfer was made upon a misapprehension, was it not? Commissioner PLUMMER. Yes. Mr. DAVIS. You have there photostatic copies of the letters from the State Department, have you not? Commissioner PLUMMER. Yes, Judge. Mr. DAVIS. Turn to the one of July 10, 1922. Commissioner PLUMMER. Beginning "United States Shipping Board"? Mr. DAVIS. Yes. That is on the stationery of the Department of State, Washington, is it? Commissioner PLUMMER. Yes. "In reply, refer to "; that is what it says up in the corner. Mr. DAVIS. Now, will you just read that letter? Referring to previous correspondence concerning the steamship' Martha Washington, I beg to inclose, for your consideration and such comments as you may care to make, copies of two notes, dated June 20 and 27, respectively, from the Italian Embassy at Washington, in relation to the claim with respect to this vessel of the Cosulich Societá Triestina di Navigazione, which it appears was the owner at the time title and possession were acquired by the United States. There are also transmitted the memorandum prepared by Messrs. Haight, Sandford, Smith, and Griffin, and translations of the other two documents inclosed with the embassy's note of June 20. The department would be pleased to have this memorandum returned when it has served your purpose. In further relation to this case I beg to state that the department is in receipt of a letter, dated June 29, 1922, from Mr. Charles S. Haight, representing the claimants, in which he states that the Cosulich Societá Triestina di Navigazione "now offers to accept the steamer in her present condition, pay to the United States Government $60,000, and execute a general release covering all claims that it may have in connection with her condemnation and use, the purchase, of course, to include the right of transfer to the Italian flag." I shall appreciate being informed whether it would be possible under the existing law for the United States Shipping Board to accept the proposal outlined in Mr. Haight's letter. If so, since it appears that the Cosulich Societá Triestina di Navigazione is now an Italian concern, the majority of the stock of which is owned by persons who became Italians in pursuance of the treaty of St. Germain, it might be advisable to accept the present offer in settlement of this case, provided the company is also willing, in acquiring title, to give adequate guaranty to protect the United States against any other claimants. If, as indicated in the embassy's memorandum of June 27, the Shipping Board is contemplating selling this vessel at auction, I shall appreciate it if you will postpone action pending a final decision with respect to the claim of the Cosulich Societá Triestina di Navigazione. I am, gentlemen, your obedient servant, WILLIAM PHILLIPS, Undersecretary. Mr. DAVIS. Now that is signed "For the Secretary of State"? Mr. DAVIS. William Phillips, undersecretary? Mr. DAVIS. Mr. Charles E. Hughes was Secretary of State on that date, was he not? Commissioner PLUMMER. He was. Then it says, "Inclosures: From Italian Embassy. June 20 and 27, 1922. Two documents. Memorandum from Messrs. Haight, Sandford, Smith, and Griffin." Mr. Lasker's reply to that is brief and seems to refer to some of the statements that had been made. Shall I read it? Mr. DAVIS. Suppose you just read it in this connection. 101440-24-PT 2- 41 |