additional allocations. Any other result would be tantamount to a breach of faith in respect of owners, such as we, who have purchased one or more vessels in reliance upon continuation of the right to charter war-built vessels without artificial restrictions. Respectfully submitted. DICHMANN, WRIGHT & PUGH, INC. Dichmann, Wright & Pugh, Inc., terminated and unterminated voyages coveriny 3 years, 1946, 1947, and 1948, showing revenue, expense, and net profit MY DEAR CONGRESSMAN: The purpose of this letter is to report further on the position of the A. F. of L. in connection with the pending bill for ship sales and charter extension. Our basic position is set forth in Mr. Lundeberg's wire of January 31, 1949, a copy of which is attached. We are opposed to any restrictions on chartering at this time, whether by legislative or administrative action. If any restrictions are to be imposed, however, we offer two suggestions: 1. We suggest that the restrictions not be made retroactive, but prospective only, so that vessels now allocated will not be withdrawn, the employment of crews, officers, and shoreside personnel will be maintained, and cancellation of commitments to the Army can be avoided. To accomplish this, we urge that section (b) (1) of the amendments proposed by the Maritime Commission be further amended by inserting the word "new" at the end of the first line thereof, after the words "acting upon any," and that the word "new" also be inserted in the second line of subsection (b) (2) after the word "between" and before the words "United States." We further urge that section (b) (3) be similarly amended by inserting the word "new" in the first line thereof after the word "No" and before the words "charter shall be made" and by striking out the words "or continued in effect after June 30, 1949." 2. We strongly recommend the addition of a new section (c) to the Maritime Commission proposal, reading as follows: "(c) The provisions of Section (b) shall not apply to allocation of vessels in cases where the Commission finds that departures from the preference rules therein set forth will promote the policy of the Merchant Ship Sales Act of 1946, and the Merchant Marine Act of 1936, including Section 809 thereof, (1) by developing and maintaining locally owned steamship companies providing regional or outport bulk cargo services or (2) by preserving in full vigor skilled and experienced operators in the Atlantic or Pacific coastwise trades, through temporary offshore bulk cargo charter operation, pending rehabilitation of such trades." This provision should achieve a substantial part of our objective, the preservation of the small west coast companies in which we are interested and which we hope will ultimately be able to operate between 70 and 100 ships in the Pacific coastwise trade, as was the case before the war, as compared with the half-dozen now operating. We earnestly beseech your support of these suggestions. WM. GREEN, President, American Federation of Labor. COPY OF TELEGRAM DATED JANUARY 31, 1949, TRANSMITTED TO EACH MEMBER OF MERCHANT MARINE COMMITTEE BY HARRY LUNDEBERG 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 charternig 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 continuing 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 upward 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 full scale 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 MEMORANDUM Representative Bennett, of Florida, called Mr. Bland. FEBRUARY 7, 1949. He said his district (Jacksonville, Fla.) is a highly maritime area and he wanted to say that he personally is very much in favor of the proposal to have shipping in American bottoms. He said that as to amendments which Mr. Hoffman suggested, he was not there for the cross-examination. As to the bill dealing with chartering, Mr. Bennett said he does not have any firm convictions, but is inclined to believe we should continue in the chartering business. The CHAIRMAN. Does anyone else have a statement? My purpose is next to call on Mr. Bailey, Mr. Haddock, and Mr. Dushane. I would like to finish the testimony, if any, to be given on H. R. 1340, or House Joint Resolution 92, specifying which it is at the time the testimony is offered, and get through these hearings as speedily as possible. I want then to take up in executive session House Joint Resolution 92, which is the most important, because the charter expires, I think, the first of the month. On the other, we have another month on it, and we want to consider a little more seriously H. R. 1340. We can do it because we have a little longer time. Mr. Bailey, we are ready to hear you. STATEMENT OF FRAZER A. BAILEY, PRESIDENT, NATIONAL Mr. BAILEY. Mr. Chairman and gentlemen of the committee, for the record my name is Frazer Bailey, president of the National Federation of American Shipping. I am authorized by Mr. Hoyt Haddock to say that the statements which I make to you he subscribes to on behalf of the CIO. I am authorized by Mr. Dushane to say that the statements which I make to you he subscribes to in behalf of the American Federation of Labor. Both gentlemen are in the room for confirmation, if the committee desires. On January 25 I had the pleasure of appearing before your committee in connection with H. R. 1340. On February 3, 1949, the Maritime Commission submitted a new draft of this bill which contains amendments of such a substantial character that the shipping industry which I represent desires to state to you their views with respect to new or modified proposals contained therein. First, the elimination of cross trades. Bill H. R. 1340, dated January 13, 1949, as introduced by Judge Bland, provides that at least 50 percent of all cargoes procured by funds made available under Government-aid programs be transported on United States-flag vessels. As modified by the Maritime Commission redraft, only such commodities "from the United States or to the United States" are required to be so transported. For reasons we have already stated to this committee, we feel that it is not unreasonable to require transportation in United States-flag vessels of at least 50 percent of all such cargoes wherever procured. As an example, certain commodities are procured by funds made available under the ECA or other Government-aid programs and moved from one foreign port to another foreign port on routes regularly and frequently served by American-flag berth services. In some instances American ships are denied participation in the movement of this traffic and such commodities are moving exclusively on foreign-flag vessels. 85414-49-18 Such wayport-to-wayport cargo is important to these established American shipping services, some of which are under contract to the Maritime Commission to provide services over these routes. A provision should be included which will permit their participation in this traffic upon a basis of not less than 50 percent thereof. Secondly, I would like to talk about the provision of country-bycountry computation. H. R. 1340 of January 13 required that the shipment of at least 50 percent of such commodities be "computed by countries." As amended by the Maritime Commission, this requirement would be deleted. It is extremely important that the administration of this provision be on a country-by-country basis. In his testimony, Mr. Hoffman made reference to certain of the recipient nations who customarily engaged to a greater degree in maritime shipping, and justified the deletion of this provision by saying that they should be allowed a larger participation in the shipment of such commodities, which would be made up by greater shipments on the part of the lesser maritime nations. It so happens that nations of the character referred to by Mr. Hoffman are concentrated in one area in Scandinavia and northern Europe. If they be allowed to decrease their shipments by American ships to a minimum, it would result in the American lines regularly serving that area being practically put out of business. As the matter stands, according to a survey by the ECA up to the end of December, Denmark gave us 9.5 percent of her business. May I say there, this is a later survey than the one I referred to in my previous statement in which Denmark had given us 5 percent up to that time. The United Kingdom has given us 19.7 percent of this ECA business; the Netherlands, 27.7 percent: Norway, 26.7 percent and so forth. Certain American lines serving these countries are under contract to the United States Government to operate frequent, regular, American-flag services. Commercial cargoes are now moving in very small volume, being displaced by commodities shipped under the ECA program. If these American lines cannot obtain commercial cargoes because they are not moving, and are denied reasonable participation in the ECA program, they will be starved for traffic, and the result might be financially disastrous. We understand both the ECA and the Maritime Commission to stress administrative difficulties of dealing with this matter country by country. The reverse is true. Neither party specified any particular difficulty. Country by country in our opinion is the only manner in which this 50-percent provision can be properly administered. Under the theory of 50 percent of the aggregate, these maritime countries would always contend that their deficiencies will be made up by shipments to other participating nations. It would be impossible to tell whether this is true until the period has ended and the figures as to the shipments to other participating nations are available. No one could tell to what extent the shipments of the participating maritime nations of Europe might be reduced within the aggregate. Mr. Hoffman, and the Maritime Commission in their presentation on February 3, emphasized that certain of these maritime countries. lived by the sea. I think it should be pointed out to this committee that such maritime nations do not themselves exist upon commerce to and from their particular country. They are carriers of the commerce of other countries, to a very large degree. Just as an example, in Pacific Ocean trades you will find large numbers of Danish, British, Dutch, and Norwegian ships serving trades which are completely extraneous to their homelands. They are not, therefore, as dependent upon ECA cargoes to be delivered to their respective countries as you might otherwise be led to believe. Nor would they suffer a great hardship by allowing at least 50-percent participation therein by the United States-flag ships. Third, I would like to speak about the Maritime Commission administration of these ships. The new draft of H. R. 1340 provides that the Maritime Commission may waive the 50-percent provisions with respect to any contemplated transactions when found to be impracticable, or not in the best interest of the United States. We suggest that this is a very large delegation of power by the Congress. We have confidence in the present Maritime Commission and its present Commissioners, but we do not know who may constitute the Maritime Commission during the whole remaining period of the ECA program. More important, we call your attention to the provision that such waiver shall be "in consultation with the appropriate department, agency, or instrumentality of the government" and we suggest to you that the decision to waive may not be the decision of the Maritime Commission, and may be substantially influenced by other agencies of the Government, some of whose recommendations have not found favor with this committee. We understood Admiral Smith to say that this provision was intended primarily to deal with imports of strategic materials. If such is the case, it narrows considerably the area of our objection. We call your attention to the fact that the Maritime Commission draft has reinserted the term "insofar as practicable." In the past the ECA has advanced this language of the existing law as justification for reducing shipments in United States vessels below the 50 percent level. If this term remains in the act, we see no need for the waiver provision if very extraordinary circumstances arise. We suggest that a waiver such as is now suggested would amount to an invitation to waive the 50 percent requirement in any circumstances varying even slightly from the orthodox. It would certainly be so urged by the recipient nations to the embarrassment of the administering officials. We note that the Maritime Commission redraft has changed the term "market rates" to "reasonable rates." No one can object to reasonable rates. We assume the Maritime Commission would determine the reasonableness of such rates, and we think the term carries with it the implication that they would have to examine into all of the elements making up such rates. |