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The CHAIRMAN. Will you submit it to the counsel for this committee?

Mr. SULLIVAN. The report has not yet been submitted to the committee.

The CHAIRMAN. When it is submitted, will you submit it to Mr. Meade?

Commissioner MELLEN. (U. S. Maritime Commission). I don't like Mr. Dow to direct our officials as to what they shall do before this committee, and this has not been submitted to the Commission as such as yet at all; and until it is, and is reviewed by us, I think it is untimely for any other witness, disconnected from us, to call upon our people to testify to you.

The CHAIRMAN. Will you submit it when it is submitted to you? Commissioner MELLEN. I will submit it after we shall have reviewed it. I do not know whether we will approve it or agree to it. The CHAIRMAN. All right. We won't have any quarrel about that. (With the permission of the chairman, the following statement was filed by Mr. Matthew Dushane:)

Mr. Chairman and members of the committee, my name is Matthew Dushane, and I am appearing in behalf of the Seafarers International Union, an affiliate of the American Federation of Labor. This organization has a membership of 40,000 unlicensed seamen in the deck, engine, and stewards' departments.

Our people are in favor of the provisions of H. R. 1340. They are of the opinion that this bill will correct any misunderstanding that now exists under the present ERP amendment, and makes it mandatory that at least 50 percent of all relief cargo shall be carried in United States documented vessels.

After hearing the testimony of the previous witnesses, I feel that there is nothing further that I can offer which would be of a constructive nature to this committee which could assist them in making a wise and just decision. I therefore urge that this committee act very favorably on H. R. 1340.

The CHAIRMAN. The committee stands adjourned until tomorrow morning.

(Whereupon, at 4:30 p. m., the committee adjourned, to reconvene on the following day, Thursday, January 27, 1949, at 10 a. m.)

85414-49- -11

SALE, CHARTER, AND OPERATION OF VESSELS

THURSDAY, JANUARY 27, 1949

HOUSE OF REPRESENTATIVES,

COMMITTEE ON MERCHANT MARINE AND FISHERIES,

Washington, D. C. The committee met at 10 a. m., the Honorable Schuyler Otis Bland (chairman) presiding.

The CHAIRMAN. All right, gentlemen, it is 10 o'clock, and I believe one of our witnesses, Mr. Levine, is here. I think Mr. Haddock is here. Are there any other of our witnesses here now?

Mr. LEVINE. Mr. Haddock was called to the Economic Cooperation Administration. It seems that the labor adviser suggests that they have some changes to make in the bill. I don't know why they called Mr. Haddock.

The CHAIRMAN. Is Mr. Parry here?

STATEMENT OF ALFRED W. PARRY, JR., PRESIDENT, PARRY LINES, INC., NEW YORK CITY

Mr. PARRY. I am sorry to be late, sir. I thought there were some other witnesses ahead of me.

The CHAIRMAN. Mr. Dushane was coming on, but he placed a memorandum in the record yesterday.

Mr. PARRY. Mr. Chairman and gentlemen of the committee, my name is Alfred W. Parry, Jr. I do not represent any organization. I appear before you as an individual deeply interested in the American merchant marine. I have spent 38 years of my life in the shipping business, nearly all of which has been directly connected with American flag ship operations, and therefore I feel justified in asking you gentlemen to consider my views in opposition to H. R. 1340.

My opposition is directed against the method, rather than the objective, of the bill. I am convinced that it is wrong to divert our ECA charity funds to subsidize American tramp ship operations through the payment of higher freight charges for American-flag steamers, because this has no permanent value to our American merchant marine and I know what we are seeking is permanence.

It is well recognized that foreign-flag ships operate at about one-half of the cost of American-flag vessels. So it is clear that American-flag vessels cannot compete in world trade without Government aid. And it is now proposed to give this aid by a law to force the use of American-flag ships on 50 percent of the Government-financed cargoes at substantially higher rates.

It is perfectly clear if this bill passes that American tramp ship operations will be temporarily benefited. ECA money will give more

employment to seamen and will create some profits to American shipping companies. But the American-flag tramp fleet will then operate exclusively in the European ECA trade where these bonus rates are obtainable.

Don't we want our tramp ships to trade between the United States and South America and Africa and India and China and Australia and Japan? We don't just want them to go back and forth to Europe carrying charity cargoes. And under this bill, if it is enacted, at the end of the ECA program our tramp fleet will have to go back to the boneyard because they just can't compete in a world where foreign ships operate at half of our costs.

There is a second and powerful argument against this bill. One of our basic concerns in the European recovery program must necessarily be with sound commodity prices. If the commodities we send to Europe must pay higher freight rates for American-flag operations, then we are putting these commodities abroad on an inflationary price level, and then we raise the price level to foreign suppliers too, so our loss is compounded, because the ECA spends many millions of dollars in buying Russian coal, for example, and British coal, for delivery to France and Italy, and here the ECA has to pay more money for the coal delivered in these countries only because we have set a higher price for coal through loading this price with a concealed subsidy to Americanflag shipping.

The same thing that I have referred to in coal will likewise apply to all other commodities. Competition is the lifeblood of international trade. If we want to remain potent in international commerce, we must give our tramp ships enough subsidy to enable them to trade at competitive freight rates throughout the world. And while we are spending so much money on the Marshall plan, we should keep a weather eye on our place in international commerce at the end of the Marshall plan. ECA should buy its transportation to the best possible advantage, and thus control the price level in foreign countries to which commodities are shipped. Nothing can be gained under a dual rate system which would endure under this bill except confusion and a temporary and ineffective shot in the arm to our American merchant

marine.

I am for the biggest and the best American merchant marine we can possible have. I have witnessed two world wars and I have served in the Army of both of them, and I know what the American merchant marine means to us. I am in favor of the subsidized lines having at least 50 percent of all the Government-financed cargo, and I think they can make an awfully good case for more than 50 percent. I am in favor of having a great American tramp fleet which will carry not only 50 percent of our Government-finanaced cargo but 50 percent of all of our imports and exports throughout the world. I feel, however, that everything should be put in its proper place to make a complete picture.

Everyone in the shipping business knows and has known for years that during normal times tramp ships carry the preponderance of the water-borne commerce of the world. This has been estimated at as high as 80 percent. With our large number of ships available and with a heavy demand for the movement of bulk commodities, our American shipping industry and our Maritime Commission have

failed to provide a place in our merchant marine for any tramp operations.

I have long advocated the policy of subsidizing tramp shipping. I have tried to get the trade organizations and the Maritime Commission to advocate a tramp-ship subsidy without success. The President's committee, which made an exhaustive study of the merchant marine, reported in November 1947, against a tramp-ship subsidy. The Maritime Commission found no place in its postwar plans for a tramp fleet. Now I understand the matter is being reviewed, but why wait? Three years have passed since the war, and if we are going to have a tramp fleet we ought to be doing something about it.

The issue before this committee, Mr. Chairman, is far greater than a simple 50-50 division of Government controlled cargo. The issue is clearly, Do we want our merchant marine to include a tramp fleet? If we do, we have got to get busy about it and subsidize it over a long term, so that its future can be planned now when we have a lot of business to move, and we can look forward with reasonable assurance to its permanent success.

I advocate that instead of rushing the proposed bill through the Congress, you substitute a bill to subsidize American tramp-ship operations. Mr. Hoffman has agreed to continue the 50-50 division until April 1 by which time perhaps a subsidy bill can be enacted. If not, I suspect Mr. Hoffman could be persuaded to wait a little longer.

Judge Bland, who has been a great benefactor to the American merchant marine, I am positive could whip a tramp ship subsidy bill into shape very quickly. If you will just do for American tramps what you have already done for American lines, the future of our American merchant marine is perfectly assured.

If you pass H. R. 1340, I believe you will have to extend bare-boat chartering, because otherwise I do not believe sufficient Americanflag vessels will be available to meet the needs of the ECA. If you pass this bill, you are in fact subsidizing American-flag ships out of ECA funds only for the 4-year estimated life of the ECA, and then what happens to your tramp fleet?

Now, if, as I advocate, you pass instead a tramp ship subsidy bill, you will not only meet all of the difficulties of this perplexing situation, but you will make a market for the sale of a substantial number of ships. You will give the Maritime Commission a chance to get out of the shipping business and you will establish the American merchant marine in its proper place.

Thank you.

The CHAIRMAN. We are much obliged to you. Have you the text of the legislation providing the subsidy for tramp ships that it was thought one time would go through?

Mr. PARRY. No, sir; I do not. I have with me the President's committee report, and I will be glad to read the section on tramp shipping if any of the members have not read it.

The CHAIRMAN. We will be very glad to have it.

Mr. PARRY. The report was made in November 1947, and it is a printed report of 59 or 60 pages.

The CHAIRMAN. I mean that part to which you referred.

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