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rine" type vessels during the past several years has been the means of furnishing otherwise unavailable transportation facilities for the movement of displaced persons, relief and rehabilitation workers, United States and foreign government officials and employees, and many other persons traveling in the national interest, and has been conducted at all times under the general direction of the Department of State. The Commission has been unsuccessful in all its attempts to sell or bare-boat charter these vessels to private companies to take over this business.

The Displaced Persons Act of 1948 authorizes the admission into the United States during a 2-year period ending June 30, 1950, of 200,000 persons, and indications point to early consideration by the Eighty-first Congress to expand the scope of the act and otherwise liberalize its provisions with a view to admitting a total of 400,000 persons over a period of 4 years from the date of the original enactment. Up to the present time, only a very limited number of displaced persons have actually been brought into the United States, due to administrative and other difficulties experienced in the administration of the present law. The Commission is now operating five vessels continuously in the service of the International Refugee Organization for the transportation of displaced persons, and three other vessels in national interest operations involving other than displaced persons. The International Refugee Oragnization has advised that it anticipates a need during the coming 1950 fiscal year of a minimum of at least 6 vessels and a maximum of 10 to be operated for its direct account, such estimate being predicated upon the assumption that other similar operations now being performed for them by the Department of the Army will also be continued.

The Commission is of the opinion that any required Government operation which is commercial in character or competitive, either directly or indirectly, with private ownership and operation should be under the control of the Commission. The Commission believe that the congressional policy for the promotion of private ownership and operation under the Merchant Marine Act, 1936, and the Merchant Ship Sales Act of 1946 should not be defeated in any degree by the conduct of commercial operations by the Government, and that, insofar as any supplementary operation is required in the public interest, it should be done by or through the Commission.

I would like to add on the item in the bill about chartering to the Philippines under the Philippine Rehabilitation Act. I know the waters and the distances are great. The type of ship they are using, the CS-MAV-1 and the M-3 coastal type, are small and not competitive to United States shipping. As a matter of fact, they are a help to United States shipping because they act as a feeder service to bring the products of the southern islands to Manila, where they can be exported in American or other ships.

We have prepared, Mr. Chairman, some amendments to this bill which I would like to submit to you for your consideration.

Mr. GOERTNER. I think all I need to say is that we have prepared these amendments by underlining matters which have been added and striking out the matters which have been deleted. It is in the form I believe your committee desires. It consists of the original bill, with a change of date, and various provisions under (b), under a new section

(b), and four subsections dealing with various questions that were raised by the amendments proposed by various people here and adopted to the extent that the Commission thought they could properly be included in legislation.

The fact that certain amendments have not been incorporated in here is no indication that the Commission is opposed to their policy. Chairman Smith said in his statement that the Commission proposes to follow certain policies that have been publicly announced. It did not seem essential for some of them that they be put in the bill. That, of course, is a question of judgment for the committee, as to whether or not you approve of what we have put in or whether you feel that other things could be well left to administrative regulation and discretion.

The CHAIRMAN. Are there any questions?

Mr. HART. I would like to ask a few questions, Mr. Chairman, please. Admiral, on page 2, the last clause of the first sentence is unclear to me, where you state that the Commission has given notice that charters shall not be issued to companies which have affiliations with foreign-flag vessel owners and operators which are considered to be detrimental to the interests of the American merchant marine. Does that mean that the Commission considers that all such companies are a detriment to the American merchant marine, or that there are good and bad among them?

Admiral SMITH. No, sir; it does not.

Mr. HART. Which does it mean, that there are meritorious cases of companies that have foreign-flag affiliations to which charters may be issued?

Admiral SMITH. I think, Mr. Hart, it is very well covered in section 804 of the 1946 act, which reads:

It shall be unlawful for any contractor receiving an operating differential subsidy under title VI, or for any charterer of vessels under title VII of this Act, or any holding company, subsidiary, affiliate, or associate of such contractor or such charterer, or any officer, director, agent, or executive thereof, directly or indirectly to own, charter, act as agent or broker for, and operate any foreign-flag vessel which competes with any American-flag service deemed by the Commission to be essential as provided in section 211 of this Act: Provided, however, That under special circumstances and for good cause shown, the Commission may, in its discretion, waive the provisions of this section as to any contractor for a specified period of time by affirmative vote of four of its members, except as otherwise provided in section 201 (a).

We first notified them that we would put this into effect I believe the 1st of November, and then we had hearings. We told them that every case would be considered on its merits, that we would like to hear their cases, and hearings were held, and then we have extended the date until the 28th of February. We do not object, for example, to an American company being the agent for a foreign company if it is merely as a husbanding agent, but if he controls foreign-flag cargo ships, and if he solocits cargo for those foreign lines, and he may give the best cargo to the foreign lines and then put the cheap cargo on the chartered ship he gets from us, that is why we intend to hear everybody-we have already heard them-but anyone can come in with any complaint, and by four votes of the Commission we can change it.

There are companies, for example-I believe Alcoa is one of themthat came in and told us what they were doing, and asked if it was all

right. They had two small foreign ships runnings from Dutch Guiana to Trinidad as a feeder service with bauxite. I have been in both places and you couldn't get me to run between them or live in either one of them, and we told them that that was all right. We would not throw them out of permission to charter because of that fact.

There are other cases. As you say, there are some good and some bad. We expect to separate the sheep from the goats.

Mr. HART. This does not imply any change in the policy you have

heretofore carried out?

Admiral SMITH. No, sir; it does not.

Mr. HART. With respect to the five continuous vessels devoted to the carrying of displaced persons, it is my understanding that only 4,000 displaced persons have come to the United States since the law was enacted. What use would there be for five vessels continuously operating in that trade when only 4,000 people have come here?

Admiral SMITH. They carry other passengers, and in summers we have had two in this school-exchange program. I believe Mr. McGuire can give you all the detailed information on that much better than I can.

Mr. HART. I do not want to make any great point of it. I just wanted to be sure I understood your statement directly.

STATEMENT OF CHARLES H. MCGUIRE, ASSISTANT CHIEF, TRAFFIC DIVISION, UNITED STATES MARITIME COMMISSION Mr. MCGUIRE. The Displaced Persons Commission was appointed under the Displaced Persons Act of 1948, becoming effective on the 1st of July last year. That Commission has been very slow in swinging into action to bring these people here, largely because of the difficulties embodied in the law, the hampering restrictions of the law. They have, up until the 1st of February, moved to this country only 3,504 displaced persons. There have moved into this country, however, some thousands of displaced persons prior to the enactment of that act. In other words, prior to the effective date of the act, on July 1 of last year, those displaced persons were carried prior to the coming into force of that act under the Presidential directive issued by President Truman on December 22, 1945.

Mr. HART. That admitted them up to 37,000, did it not?

Mr. MCGUIRE. It admitted the full limit permissible under the then prevailing quotas.

Mr. HART. Right.

Mr. MCGUIRE. There have been moved a great many thousands. At that time they came in under the auspices and expense of the socalled voluntary agencies set up by various religious groups.

These vessels have also brought into Canada a number of displaced persons. These displaced persons moved from, largely, Germany, from the concentration camps or what were formerly concentration camps in Germany. People are assembled there. They are brought out at the expense of the International Refugee Organization, of which the United States Government pays the substantial part of the administrative and operating cost.

Our estimate from the International Refugee Organization calls for the use of from 6 to 10 vessels during the balance of the time

available to bring those people under the act, which now expires June 30, 1950. They have established in the act a total of 200,000 persons, as was mentioned.

In order to bring anywhere nearly the quota as provided by the act, or permitted by the act, they will have to reach very shortly a substantial monthly movement of displaced persons. During this month of February we will in total have 6 shiploads aggregating 3,500 persons to come in under this act. That is the first sign of volume movement.

Mr. HART. Can it be stated, briefly, that these five vessels that have been continuously, according to the language of the momorandum, in the use of the International Refugee Organization have been reasonably well used?

Mr. MCGUIRE. That is correct. They have been fully used.

Mr. HART. Even though only 3,500-plus refugees have come to this country, there have been other uses that would justify the assignment of five vessels to the Commission?

Mr. MCGUIRE. That is correct.

Mr. HART. Admiral, in the last paragraph, with respect to the opinion of the Commission respecting operations competitive or commercial in character, is that circumlocution by which you say you want the Army removed from that field?

Admiral SMITH. That is something that I believe this committee is going to consider, Mr. Hart. We hope they do.

Mr. Chairman, I would like to say that we are due to appear before the Bureau of the Budget on the 16th of February on the 1950 appropriation, but because this one did break into a fiscal year, the Bureau of the Budget has informed us they will not send the budget message to the Appropriations Committee on these last 4 months of 1949 until this resolution passes the House. They will not wait for it to become law. If it passes the House they figure it is going through, and after it passes the House they will send it down. Meanwhile, after the first of March we will have no money.

The CHAIRMAN. That is a very persuasive argument to pass the law.
Are there any further questions? Is there anyone else?
Mr. Meade, do you have anything else?

Mr. MEADE. That is all I have.

Mr. FRAZER A. BAILEY. Mr. Chairman, this is the first time the industry has had a chance to look at these amendments which have been proposed. Some of them are very substantial in character. We would like very much the opportunity of studying them and putting the industry's views before the committee. The bill, particularly the ECA bill, is quite different from the bill that was before us when we gave our testimony.

The CHAIRMAN. If we hear you, the other fellows will come and they will want to be heard. We have to reach an end to this thing. Mr. BAILEY. Would you like us to put it in the way of a brief, or can we have 15 minutes?

The CHAIRMAN. You can put in a brief. We will be glad to have a brief.

I am not going to shut anybody off. We will be here on Tuesday morning. I am going to call the committee to be present at 10 o'clock Tuesday morning for the executive consideration of this bill. Now,.

if you have something on which you want to be heard, and the committee desires to hear you, be here at that time.

Mr. BAILEY. We will be on hand at that time. We would like 15 minutes if the committee decides we may have it.

The CHAIRMAN. It is not my purpose to hold a further meeting of the committee. They have been faithful, attentive, and prompt in coming here on a very tiresome question, and it will be my purpose when I close the committee this afternoon to adjourn, to meet again on Tuesday at 10 in the morning.

All right, gentlemen. The committee now stands adjourned until 10 a. m. on Tuesday.

(Whereupon at 4: 05 p. m., the committee was adjourned, to reconvene in executive session on Tuesday, February 8, 1949, at 10 a. m.)

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