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Please be assured of our willingness to be of any possible assistance in this matter.

Very truly yours,

WINDSOR NAVIGATION CO., INC.,
JOHN HODGES, President.

SAN FRANCISCO, CALIF., January 31, 1949.

Congressman SCHUYLER OTIS BLAND,

Chairman, House Merchant Marine and Fisheries Committee,

House Office Building, Wshington, D. C.

The Sailors Union of the Pacific strongly supports and urges favorable consideration and action by the Congress on House Joint Resolution 92 which provides for the continuation until March 1, 1950, of ship sales and chartering to American citizens as provided by the Merchant Ship Sales Act of 1946 and amendments thereto.

Being entirely familiar with what is happening to the American merchant marine because of continuous sniping and pressure from foreign steamship interests in the handling of ECA and other relief cargoes financed by this Government we vigorously oppose any program which would further decrease the quantity of American ships available for continued operation by American labor at American standards of living.

Further, we urge the vital necessity of doing all possible to rebuild the American domestic services, both intercoastal and coastwise, which are so vital from a national defense angle. We are convinced that continued full chartering privileges for American citizens is imperative if such domestic and coastwise services are to be revitalized. As an example, before World War II our organization manned upwards of 70 ships operating in Pacific coastwise trades for various Pacific coastwise operators such as W. R. Chamberlin & Co., Burns Steamship Co., Olympic Steamship Co., Coastwise Line, James Griffith Steamship Co., Pope & Talbot, Inc., and many others. Today only a paltry half dozen vessels are being operated in this trade, although these companies are hanging on by their eyebrows to their organizations in an endeavor to again get the ships sailing. They, and like operators, as well as our members who manned, not only these ships but hundreds of ships in the intercoastal trade, are entitled to all the support and assistance that the Government, through the chartering program, can give, and we most earnestly urge your support to legislation authorizing continued fullscale chartering of American ships to American citizens for operation in both the domestic and foreign trades regardless of whether such charterers do or do not at this time own dry-cargo ships.

If House Joint Resolution 92 is not amended to allow American citizens to charter American vessels, regardless of whether they are owners or not, it will mean that foreign operators will carry this cargo in foreign-flag ships, which will mean a loss of thousands of jobs to American seamen.

HARRY LUNDEBERG,

Secretary-Treasurer, Sailors Union of the Pacific, President, Seafarers
International Union of North America (affiliated with the American
Federation of Labor).

NEW YORK BOARD OF TRADE, INC.,

The CHAIRMAN,

House Merchant Marine Committee,

INTERNATIONAL TRADE SECTION,
New York 7, N. Y., January 24, 1949.

House of Representatives, Washington, D. C.

DEAR SIR: For your information and records, I have been directed to send you the attached resolution unanimously adopted by the executive committee of this International Trade Section, advocating full support to the Schuyler Otis Bland bill which would assure American-flag ships of at least 50 percent of all Government-financed bulk cargoes.

Very truly yours,

A. J. BARNAUD, Secretary.

INTERNATIONAL TRADE SECTION, NEW YORK BOARD OF TRADE, INC.

RESOLUTION

Whereas it is deemed essential that we maintain a merchant marine of our own with our own trained officers and crews for purposes not only of national security but also for the maintenance of American standards of living and adequate protection of American private shipping investments; and

Whereas the Economic Cooperation Administration has issued a directive to disregard the Eightieth Congress-approved mandate giving American ships half of ECA's bulk cargoes: Therefore be it

Resolved, That the International Trade Section advocates strongly the continued policy of alloting shipment of at least 50 percent of ECA's bulk cargoes to United States-flag vessels; and be it further

Resolved, That full support be hereby given to the bill now before the Congress, as introduced by the Honorable Schuyler Otis Bland, to force compliance with the 50-percent rule, thus making 50-percent ratio mandatory; and be it further

Resolved, That this resolution be placed in the hands of:

Congressman Schuyler Otis Bland; the United States Maritime Commission; the Administrator of the Economic Cooperation Administration; the House Merchant Marine Committee; the Senate Interstate and Foreign Commerce Committee; and other governmental and private agencies interested. Done at New York, N. Y., this 30th day of December 1948.

Mr. A. J. BARNAUD,

JANUARY 27, 1949.

Secretary, International Trade Section, New York Board of Trade, Inc.

New York 7, N. Y.

DEAR Mr. BARNAUD: This will acknowledge the resolution adopted by the executive committee of the International Trade Section advocating support of H. R. 1340.

I will be very pleased to have this resolution placed in the record of the hearings. Very truly yours,

HUGH A. MEADE,

General Counsel, Merchant Marine and Fisheries Committee.

Honorable SCHUYLER OTIS BLAND,

LAW OFFICES, PAUL V. MCNUTT, Washington, D. C., January 27, 1949.

House of Representatives, Washington, D. C.

My DEAR JUDGE BLAND: We are writing this letter in support of bill H. R. 1340 now under consideration by your Committee on Merchant Marine and Fisheries, and to suggest an amendment which would further the purpose of this bill. In writing this letter, we represent American International Underwriters Corp., a corporation organized under the laws of the State of New York and having its principal office at 111 John Street, New York City.

Since May 1929, American International Underwriters Corp. has represented a number of American-owned and American-chartered insurance companies in developing and handling international and foreign insurance business. The bulk of this international and foreign insurance is written on ocean steamships and their cargoes.

The history of every great maritime nation has proved conclusively that a necessary adjunct to an efficient, strong, and adequate national merchant marine is an efficient, strong, and adequate marine insurance service. This fact has been recognized by the Congress of the United States and inculcated in its statement of policy contained in the Merchant Ship Sales Act of 1946 wherein it is stated (50 U. S. C. A., sec. 1735):

"(a) It is necessary for the national security and development and maintenance of the domestic and the export and import foreign commerce of the United States that the United States have an efficient and adequate American

owned merchant marine supplementing by efficient American-owned facilities for shipbuilding and ship repair, marine insurance, and other auxiliary services."

H. R. 1340, as presently drawn, will assist in effecting this policy by requiring that a substantial portion of this country's water-borne exports, arising out of United States Government financed foreign assistance programs, be transported on United States-flag vessels at market rates for United States-flag vessels. This requirement, of course, will keep a substantially larger number of American ships in operation and this will indirectly assist American marine insurance companies, such as American International Underwriters Corp., which are attempting to develop and maintain an efficient, strong, and adequate American marine insurance service.

We believe, however, that the above-stated congressional policy of developing an efficient, strong, and adequate American-owned marine insurance service would be directly and more effectively accomplished by amending this bill so as to require that the ships and cargoes, making up the 50 percent of the gross tonnage required by the bill to be transported on United States-flag vessels, be insured by American-owned marine insurance companies. To this end we would suggest that paragraph (a) of the bill be revised to read as follows: "That (a) notwithstanding any other provisions of law, except the provisions of the Act of April 28, 1904 (33 Stat. 518), whenever the United States Govern ment, or any department, agency, or instrumentality thereof, procures, or makes any loans, grants-in-aid, or provides credits or funds for the procurement of any commodities for transportation by water, at least 50 per centum of the gross tonnage of such commodities, computed by countries, and separately for dry bulk carriers, dry cargo liner and tanker services, shall be transported on United States-flag vessels which are insured both as to the vessel and the cargo by American-owned marine insurance organizations, at market rates for United States flag vessels, unless the United States Maritime Commission, after investigation, shall certify to the department, agency, or instrumentality of the Government charged with the administration of the laws under which such funds are made available with which the commodities are procured, that United States flag vessels are not available in suflicient numbers or at market rates for United States-flag vessels to effectuate the purposes of this section. No recipient of commodities of the character described in this section shall be entitled to reimbursement for expenditures already made unless at least 50 per centum of any cargo to be paid for thereby shall have been transported in United Statesflag vessels and insured by American-owned insurance organizations as herein provided." [Amendment italicized.]

The young and struggling American-owned marine insurance companies are bending every effort to assist in providing for the American merchant marine an efficient, strong and adequate marine insurance service. However, like the operators of the American merchant marine, they are faced with the formidable foreign competition. The large foreign marine insurance organizations are impregnably entrenched through centuries of operations and world-wide business and financial connections. If the bill is amended as suggested in this letter, it will place these American-owned marine insurance organizations in a better position to develop an efficient, strong, and adequate marine insurance service for the United States merchant marine by placing these insurance companies in a better position to compete with these foreign marine insurance organizations. The keen competition between the American-owned marine insurance organizations will assure reasonable insurance rates for American merchant marine operators.

It will be greatly appreciated if your committee will include this letter in the record of its hearings on H. R. 1340, and that we be accorded an opportunity to appear before the subcommittee, to which this bill is to be referred, in order that we may present for the benefit of that subcommittee a detailed statistical statement for the record in this matter.

Thanking you for your consideration of this request, we remain,

Very truly yours,

HENRY A. DUDLEY.
BOLLING R. POWELL, Jr.

85414-49- -13

PACIFIC FAR EAST CO.,
January 28, 1949.

HON. SCHUYLER OTIS BLAND,

Chairman, House Committee on Merchant Marine and Fisheries,

House Office Building, Washington, D. C.

DEAR CONGRESSMAN BLAND: We have followed with interest the introduction of your measure, H. R. 92, calling for reenactment of legislation to continue in effect for another year the Maritime Commission's authority to sell and charter vessels. We are completely in accord with the measure as introduced.

We note, however, that in the hearings being held there have been proposed several amendments of a restrictive nature. This letter is prompted by our feeling that the incorporation of some of these amendments may react to the definite disadvantage of some of the smaller and newer steamship companies and thus to our American merchant marine as a whole.

We are not opposed to the principal that prewar or postwar ownership and investment in ships should be recognized in formulating a charter policy. To convert that simple principle, however, to one that ties the number of permissible charters to a ratio of vessels owned by a given operator at a given time, however, will in our opinion react to inhibit rather than to foster additional purchases.

For example, our own company was organized after the war, and we have thus far purchased five C-2 vessels at a cost of approximately 5% million dollars. We operate a number of vessels under charter and have in contemplation plans for substantial expansion on an ownership basis. But we are still in the process of building our operations, our assets and resources to the point where we can make such additional purchases. Meanwhile, we have been instrumental in diverting to American-flag vessels cargoes that otherwise would be controlled by foreign competitors, and we believe that we have strengthened the position of the American merchant marine.

The same reasoning leads us to oppose the inclusion of one of the proposed amendments which would actually put into the law a prohibition against the Commission's chartering vessels unless the required transportation is unobtainable by privately owned vessels. Here, again, the philosophy may be well-intentioned, but the effect is likely to stifle the progress of young, aggressive organizations, who have already invested and intend to invest more, but require the flexibility of the present legislation in order to build up American-flag operations. We believe, therefore, that the new law should be in the form in which you introduced it-a simple extension of the present act, with the addition, of course, of the Philippine interisland provision. The law itself should not set up further restrictions to American-flag operation and development. The Maritime Commission has the policy of our Nation well in hand, and can implement that policy toward the desired long-range objectives under a simple extension of the present legislation. Until such time as long-range plans, including subsidy contracts, etc., are developed further, the Commission should be permitted the flexibility necessary to take care of special situations, as for example, fully refrigerated vessels, coastwise operation, hardship cases, etc. Such problems are not capable of solution by legislation, nor can they be solved if over-all restrictions become a part of the law.

In presenting these ideas, we do not wish to impose the viewpoint of a single operator, or a minority group, but rather to point out pitfalls which through handicapping certain operations will have a detrimental effect on the whole American-flag goal, to the advantage of no one but the foreign lines. There are other problems besides our own, and we feel all these special questions can be recognized and solved by the Commission under proper policy pronouncement, provided the Commission is not prevented from so doing by restrictive legislation. The fundamental question is one of permitting and fostering active, aggressive operators to promote and develop the American merchant marine by ownership and charter. Support to those ventures should be predicated upon past and present activity and evidence of sincere, long-range devotion to the building of our American-flag fleet.

With your many, many years of devotion to this same objective in the Congress, we feel you will understand and sympathize with these ideas. We will indeed be grateful for your support, and for an expression of your views.

Sincerely yours,

T. E. CUFFE, President.

The CHAIRMAN. Mr. Hoffman, we are delighted to hear you. We will hear from Mr. Hoffman now.

STATEMENT OF PAUL G. HOFFMAN, ADMINISTRATOR, ACCOMPANIED BY ALEX I. HENDERSON, GENERAL COUNSEL, AND ARTHUR G. SYRAN, DIRECTOR OF TRANSPORTATION, ECONOMIC COOPERATION ADMINISTRATION

Mr. HOFFMAN. Mr. Chairman, while I am waiting for my chart may I say that I very much appreciate the opportunity of appearing before the committee. First of all I would like to give an accounting of our stewardship.

The CHAIRMAN. We will be very glad to hear from you.

Mr. HOFFMAN. And to tell you just exactly how we have carried out the provision of the law that required the shipment of 50 percent as far as practicable, and at market rates, in United States bottoms.

So far as the bulk shipments are concerned, approximately 50 percent has gone as required in United States ships. So far as the berth liner is concerned, 60 percent; so far as tankers are concerned, 23 percent. The tanker shipments have been the low figure simply because of the unavailability of tankers until lately. We believe that that situation will improve. That has been the record up to date.

I think the committee is familiar with what precipitated this whole discussion, namely my letter to the joint committee, and I would like to make clear that the purpose of that letter was to obtain a clear directive from Congress. The language of the ECA Act states, and I would just like to repeat this if I may, that at least 50 per centum of the gross tonnage of commodities procured within the United States out of funds made available under this title, and transported abroad on ocean vessels, is so transported on United States flag vessels to the extent such vessels are available at market rates. If by "market rates" the Congress has in mind United States-flag ship rates, the Administrator is then justified in the use of American bottoms even though higher costs are involved. On the other hand, if by "market rates" the Congress has in mind world rates, then it is doubtful that the Administrator is justified in using United States flag vessels if foreign flag vessels become available at substantially lower rates.

In raising this question for clarification, it is not my purpose to question the desirability of the United States having a strong merchant marine. I happen to believe that that is most desirable. Nor do I intend to pass any judgment on the question of how the merchant marine should be supported. I hold the strong view that the support should be direct, rather than indirect, but that is beside the point.

I have a further responsibility, and that is when my views are asked by Congress on new legislation to point out as clearly as I can the effect of such legislation on the European recovery program. Even assuming that it was the intent of Congress to interpret market rates as United States flagship rates, there are certain provisions proposed in H. R. 1340 that place, it seems to me, an unnecessary and an unwise burden on the European recovery program.

The first is the provision that 50 percent of the ECA financed shipments to each individual country must move in United States bottoms. The present ECA statute permits the proportion to vary for individual countries, provided the stated percentage of total shipments is met. There are vast differences between the European countries in the matter of ocean shipping services. Norway, for example,

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