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European program-Reported shipments by flag of vessel'—Continued

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1 Reported shipments based on shipping documents presented to ECA, supplemented by reports from U. S. Government agencies and purchasing missions of participating countries; total shipments reported are less than actual movements because of the lag in receipt of shipping documents.

2 Excluding 241,000 tons (1 percent) shipped in vessels of unidentified registry.

Source: Office of the Controller, Reports and Analysis Branch, Division of Statistics and Reports. Jan. 14, 1949.

85414-49- -16

SCHEDULE A. Schedule of United States flag participation to occupied areasBizone, Austria, and Trieste in relation to the entire program

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Occupied areas percent of total tonnage, 6 percent; occupied areas United States-flag percent of total, 12 percent.

STATEMENT OF HON. JOSEPH E. CARSON, MEMBER, UNITED

STATES MARITIME COMMISSION

Commissioner CARSON. Mr. Chairman, I do not believe there would be any good purpose served in me covering the ground that the Chairman and Commissioner Mellen have covered, but by way of affirming what has been said, I am in agreement with the other members of the Commission that the question of dividing the cargoes 50-50 by countries has difficulties connected with it so that I don't believe it is entirely practicable. The same thing, in my opinion, goes for the cross trading, whether it is related to the dry cargo or to the liquid movement of petroleum products.

Further than that I don't think there is anything that I could offer. I might say this, in connection with the questions that were asked by Congressman Nelson. It is true that the bill as now written would place in the hands of the Commission considerable latitude and considerable areas of discretion.

The CHAIRMAN. You mean the amendment as now proposed?

Commissioner CARSON. The amendment as has been submitted. But I submit, Mr. Chairman, that the position of the Commission on this whole matter is very well known, and perhaps had the Commission been taken fully into consideration and consultation on this matter at the outset of the ECA I very gravely doubt if it world be necessary for us to be up here this afternoon.

I do not think I know of anything more to say.
The CHAIRMAN. Are there any questions?

Mr. WEICHEL. One question: In view of what you said, that this great discretion is placed in the hands of the Commission, I just wonder how well the Commission will use it, in view of the fact that the very same Commission of which you were a member came before the committee last spring and, when you had the full discretion with reference to selling or not to sell ships foreign, this committee by law had to absolutely tie your hands against selling them foreign. Will we have to do the same thing on this in a few months, that you cannot restrain yourselves?

Commissioner CARSON. I think I have already given the answer, Mr. Weichel. The answer is "No," but I don't call it a parallel case at all.

In the first place, the question of whether war-built tonnage is to be sold foreign is a question of national policy. It is a question very simple to answer. It is "Yes" or "No."

I thought at the time we had sold as much or more of the warbuilt tonnage than should have been sold, but I was always aware that while most of it had been sold before I was a member of the Commission, this Government had made certain commitments to certain nations that were our allies and were also belligerents during the war, and that is that we would see to it that if they placed their tonnage at the disposal of the Allies to prosecute the war, we would see to it that they were given an opportunity to replace that capacity of tonnage that they had. I think that has been done generously, perhaps a little more so than would have been necessary to meet the actual commitments, but I think that having been done, and the Congress having been informed that that was so, it was perfectly proper to relieve the agency, namely the Maritime Commission, of the duty of having to tell people time and time again, and also to relieve various Government agencies from the importuning on the part of foreign embassies who would have certain of their nationals that would have their particular fish to fry.

Mr. WEICHEL. That is just exactly what I mean. The Commission had complete discretion to sell or not to sell, and they overdid it, and then after they overdid it, they said, "Come up and tie our hands. We are afraid of ourselves."

Are you going to be afraid of yourself again when we give you all this discretion?

Commissioner CARSON. No.

Mr. WEICHEL. How many times do we have to make the same mistake?

Commissioner CARSON. I do not think any mistake was made.

The CHAIRMAN. In the difficult period that we have ahead of us now, or that we have passed through, I cannot criticize anybody for making mistakes. The Lord knows I have made them myself-plenty

of them.

Are there any further questions?

Mr. WEICHEL. That is all.

The CHAIRMAN. Mr. McKeough, personally I would be very glad to hear from you. You have given this matter some considerable study.

STATEMENT OF HON. RAYMOND S. McKEOUGH, JR., MEMBER, UNITED STATES MARITIME COMMISSION

Commissioner MCKEOUGH. Mr. Chairman and gentlemen of the committee, I doubt very much that I can add anything to what has already been offered by those who have testified today, except that possibly I may add to the confusion that may have been aroused by reason of some of the questions and answers.

I think that Mr. Hoffman this morning pretty well indicated to the members of the committee his specific and peculiar responsibility under the ECA Act, which is one of recovery of the so-called Marshall

plan nations. I think he was eminently fair and well disposed in the several meetings that the Commission held with him and his representatives over the past week. He has to be protected by law, because, thank God, we are still a nation of laws and not of men. And when he raised the question with relation to the 50-50 division, I think he was perfectly justified. Until the ambiguities that his counsel indicated to him had arisen in his efforts to try and apply the 50 percent at market rates were overcome, he was compelled to protect the expenditures of the moneys allocated to his administration by the action of the Congress as far as he could.

It was regrettable, I think, and I am quite convinced that it wasn't at all malicious on his part, that he crystallized the issue in the letter that has been much discussed, in which he indicated that unless prohibited by action of the Congress, he was, effective the 1st of January, to cease and desist from expending the money voted to him for recovery under the Marshall plan to pay the differentiation between what he could buy in the way of transportation service in foreign bottoms of the nationals who benefited in the recovery expenditures, as compared with what he was compelled to pay for the movement in American bottoms.

Therein we ran, of course, head-on. The Maritime Commission, in spite of the fact that it is made up of just very normal people who make no claims, at least speaking for myself, at being expert in any field, attempts to do the best it can to meet the statutory obligations that are theirs, specifically, in the enactments by Congress over the years. It is our fundamental duty, and there is no choice or discretion resting with us, to protect the American merchant marine, owned and operated by American citizens under the American flag. I personally yield to no one in the direction that I very seriously consider that responsibility.

One of the Congressmen has referred to the necessity of having us restricted against ourselves in the selling of war-built ships foreign.. I know that my colleagues have very seriously considered their responsibilities, and while at times I have differed with the conclusions in respect to the sale of war-built ships foreign, I am quite confident that when I differed they were as honest in their convictions as was I in mine.

I have felt from the beginning, and while it is not so stipulated in the Ship Sales Act, that when, as, and if those that were belligerents in the last war, who fortunately were allied with us, had reached the point of total dead-weight tonnage that they had possessed on September 1, 1939, when Mr. Hitler moved into Poland, that I could not vote to sell them any more, and I didn't. I was not unmindful, of course, that in the purchase of the war-built ships several things developed to the interests of our allies.

No. 1, if we merely made a comparison of the deadweight tonnage, we found to the interest of our allies that every ship that they purchased from us was obviously a relatively young ship, opposed to ships that they had lost in the war which were reaching rather mature agefrom the standpoint of efficient ship operation.

No. 2, they were faster ships, so that the tonnage multiplied by the increased transportation speed more modernized their fleet than the ones that they had lost.

That, coupled together with information that we very seriously gathered in our efforts to secure data on shipbuilding, was constantly kept before us by the statistical and research people of our section, and I think collectively the Commission recognized as a whole that when we had reached that point we had done practically everything that might be expected of us in restoring the foreign fleets.

There were some ships sold foreign to countries that were not allied with us. We had the peculiar responsibility of attempting to balance the teeter-totter, first to recover to the Government through the sale of ships every possible dollar that might be recovered without doing permanent injury to the American merchant marine.

The Congress in its wisdom in the enactment of that legislation provided that the most desirable ships that were then war built and possessed by the Government should obviously be sold American. There were two exceptions, as I recall it, one involving the Philippines and the other, I think, the country of Norway.

The Commission, I think, did, and I am sure you will pardon me for the personal references to this body of Americans, a very constructive job. I know that unhappily we do not enjoy the finest reputation, but I don't believe it is because of any vicious or malicious or perverted sense of responsibility individually or collectively as a Commission.

The CHAIRMAN. Don't you suppose your reputation is better since you are getting in so many millions of dollars from operating subsidies?

Commissioner MCKEOUGH. I am very grateful to the chairman for making that observation, but unhappily we have never had much credit given to us in that respect. I think in total we have recovered, and I am subject to correction, better than a billion dollars, and better than one and a half when we figure the money recovered in the chartering of the war-built ships to the American operators. So that if the total expenditure was $15,000,000,000, which has been very, very broadly tossed about in the expenditure of the shipbuilding program, making all the mistakes that were alleged or even committed, there is a 10 percent recovery of 12 billion dollars, and since that has been evolved the appropriations have been very seriously cut with relation to our personnel, so that from a high of 15,000 people at the peak of the war we are chiseled down to a low of about 3,000, and we still have all the hang-overs of the war that are uncompleted, with everybody wanting their money-and I can't argue with them. I think they ought to have it. Everybody wants to get it as quickly as he can, and we would like to be able to give it to them, and just that quickly, but unhappily we are human beings, and I trust that this committee, and I am confident

Mr. WEICHEL. What money is this that you want to give away so quickly? You said everybody wants it as quickly as he can get it.

Commissioner MCKEOUGH. He wants the money that is claimed against the Government of the United States relating to the maritime activities, that the Government compelled the Maritime Commission to handle. We are not giving it away. Unfortunately we are compelled to very seriously study those claims, and they take time. I think it is only fair

Mr. WEICHEL. You have been 9 years at it now; have you not?
Commissioner MCKEOUGH. No.

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