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REPORT OF THE UNITED STATES MARITIME COMMISSION ON THE
ACTIVITIES AND TRANSACTIONS OF THE COMMISSION UNDER THE
MERCHANT SHIP SALES ACT OF 1946, FROM OCTOBER 1, 1918,
THROUGH DECEMBER 31, 1948

UNITED STATES MARITIME COMMISSION,
Washington, January 14, 1949

The Honorable SCHUYLER OTIS BLAND,

Chairman, Committee on Merchant Marine and Fisheries,

House of Representatives.

DEAR JUDGE BLAND: I have the honor to present herewith the quarterly report of the United States Maritime Commission on the activities and transactions of the Commission under the Merchant Ship Sales Act of 1946, from October 1, 1948, through December 31, 1948, in accordance with section 13 of such act.

Sincerely yours,

W. W. SMITH, Chairman.

REPORT OF UNITED STATES MARITIME COMMISSION ON THE ACTIVITIES AND TRANSACTIONS OF THE MARITIME COMMISSION UNDER THE MERCHANT SHIP SALES ACT OF 1946, OCTOBER 1, 1948, THROUGH DECEMBER 31, 1948.

RÉSUMÉ

Cancellation of previous approvals again resulted in a net decrease in the number of vessels approved for sale under the Merchant Ship Sales Act of 1946 as of December 31, 1948. During the quarter only one additional vessel was approved for sale. The total at the close of the quarter stood at 1,773 vessels compared to 1,788 on September 30, 1948, and represented total sales of approximately $1,713,000,000. During the quarter a net decrease of 140 vessels chartered under the act occurred, reducing the number on charter under this authority to 349 at the end of the period compared to 489 on September 30. The continued redelivery of chartered vessels to the Commission was again due primarily to the Pacific coast dock strike. New policies with respect to bare-boat charter of vessels for operation in berth services in the foreign commerce of the United States were adopted by the Commission on December 6 and are quoted in this report. The effective date of resolutions adopted by the Commission on September 22 and 24, relating to the eligibility of operators for the charter of vessels under the Ship Sales Act, has been extended to January 31, 1949. The reserve fleets showed a net increase of 148 vessels, the total standing at 1,966 at the end of the quarter compared to 1,818 at the beginning. The number of vessels for which adjustments for prior sales to citizens has been approved by the Commission stood at 72 at the end of the quarter, adjustments for 12 vessels having been approved during the quarter.

SHIP SALES

As of December 31, 1948, the Commission had approved the sale of 1,773 vessels, 660 for American-flag operation and 1,113 for foreign-flag operation. During the quarter the sale of 1 additional vessel was approved. The Commission canceled approvals of 12 vessels for American-flag operation and 4 vessels for foreignflag operation, generally at the request of the approved applicants, leaving a net decrease of 15 vessels from the total of 1,788 (671 for American-flag operation and 1,117 for foreign-flag operation) reported as of September 30, 1948.

The vessels for American-flag operation have been approved for sale to 164 operators (appendix B). Those for foreign-flag operation have been approved for registry under the flags of 34 nations (appendix C).

At the end of the quarter, ships approved for sale for American-flag operation comprised 403 dry-cargo vessels and 1 passenger vessel and 256 tankers. The dry-cargo vessels comprised 377 of large types, including 232 C type (20 C1, 124 C2, and 88 C3), 119 Libertys, and 26 Victorys and 26 coastal types. Tanker approvals comprised 202 large T type, 49 Liberty type, and 5 coastal tankers.

MORTGAGE SALES TO NONCITIZENS

Appendix E shows that the lines of credit to foreign purchasers of war-built vessels as recommended by the National Advisory Council have generally not been reached, and that credits granted by the Commission are within $115,424,550 of the $377,100,000 approved by the NAC. Credits totaling $30,622,493 approved by the Commission have been unused.

ADJUSTMENT FOR PRIOR SALES TO CITIZENS

As previously reported, the number of vessels for which applications have been filed for adjustment for prior sales to citizens under section 9 of the Merchant Ship Sales Act of 1946 is 204, of which 11 vessels were subsequently withdrawn, leaving for consideration applications covering a total of 193 vessels.

The number of vessels for which adjustments had been approved by the Maritime Commission stood at 72 as of December 31, 1948, adjustments for 12 vessels having been approved during the quarter. The number of vessels for which adjustment agreements had been executed was 47 at the end of the period, adjustment agreements for 8 vessels having been executed during the quarter. Vessels for which adjustment agreement had not been executed by the end of the quarter totaled 25, including 13 cases affected by certain policy decisions recently adopted with reference to computing charter hire and application of credits. The processing of applications covering an additional 50 vessels is approaching completion.

VESSEL CHARTERS

As of December 31, 1948, there were 362 vessels under charter or allocated for charter (appendix F), a decrease of 145 from the corresponding total at the close of the preceding quarter. Of this number 349 were chartered to United States citizens and one Philippine company under provisions of the Merchant Ship Sales Act of 1946, as amended. (Thirteen were under charter pursuant to other authorities of law: three prewar-built passenger vessels chartered under the Merchant Marine Act of 1936 to Moore-McCormack Lines, one prewarbuilt vessel to United States Lines under Public Law 101 of the 77th Cong., and nine war-built vessels to Philippine companies under the Philippine Rehabilitation Act of 1946.)

The prolonged dock strike on the Pacific coast was a prime factor in the continued redelivery of chartered vessels. American ship operators were severely affected by an announcement near the close of the quarter by the Economic Cooperation Administrator that from January 1, 1949 (subsequently postponed for 1 month), he would no longer require that 50 percent of the ECA bulk cargoes be carried in United States-flag ships unless such ships were available at competitive rates.

The number of chartered vessels employed in the coastwise and intercoastal trades again showed a slight decrease. Forty-six vessels were chartered or allocated for operation in these services at the end of the quarter, all under the terms and conditions outlined in the Commission's report for the quarter ending September 30, 1947.

Hearings were held on November 15, 1948, with various charterers on their applications for exception to provisions of the resolutions adopted by the Commission on September 22 and 24, relating to the eligibility of operators for the charter of vessels under the Ship Sales Act. (The text of these resolutions appeared in the Commission's report for the third quarter of 1948.)

All interested charterers have been notified of the extension, until January 31, 1949, of the effective date of these resolutions and that no further extension will be granted by the Commission unless directed by Congress.

The Commission on December 6, 1948, adopted the following policies with respect to the bare-boat charter of vessels for operation in berth services in the foreign commerce of the United States:

1. All companies which, prior to the war, were operating regular Americanflag berth services, both subsidized and unsubsidized, on various trade routes of the world, will be permitted to bare-boat charter one United States Maritime Commission vessel for use in a specified berth service for each American-flag vessel which they own and maintain in such regular berth service.

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Such use of United States Maritime Commission vessels shall be conditioned upon a showing that all vessels of types suitable for the particular berth operation, which are owned by these companies, are regularly employed by them in the maintenance of such berth services.

2. Established companies which did not, prior to the war, operate regular American-flag berth services in certain trades, but which have since the war inaugurated such services, and new companies established since the war and which now operate regular American-flag berth services with owned vessels, will be permitted to bare-boat charter United States Maritime Commission vessels for use in regular operation on such berths. Such approval will be granted only in those cases where an operator has maintained with its owned and/or chartered privately owned American-flag vessels a service of not less than 6 months' duration and with an average of not less than one sailing per month. Additionally the operator shall be required to keep all its owned vessels of type suitable for such berth service in its own berth operations. Where such minimum qualifications and conditions are met, the operator will be permitted to bare-boat charter not in excess of one United States Maritime Commission vessel for use in the specified berth service for each American-flag vessel which the operator owns and maintains in regular operation on the particular berth. 3. Operators who are otherwise qualified will be permitted to bare-boat charter United States Maritime Commission vessels, without restriction as to number or as to the restrictions fixed in paragraphs 1 and 2 hereof, for operation in berth services between Pacific coast ports and continental European, Mediterranean, South and East African, and Persian Gulf ports, established since the war, which trade routes were not regularly served prior to the war by privately owned American-flag vessels.

4. All operators of United States Maritime Commission bare-boat chartered vessels shall be required to abide by all regulations and restrictions of the Commission with respect to rates and employment of all chartered vessels in berth services, including compliance with conference rules and regulations where required.

5. Any request for the allocation of United States Maritime Commission bareboat chartered vessels for berth service in excess of the number permitted under paragraphs 1 and 2 hereof, or otherwise than as herein permitted, will require the specific approval of the United States Maritime Commission.

6. Nothing contained in the preceding numbered paragraphs 1 to 5, inclusive, shall be construed as in any way modifying the over-all requirements with respect to the number of vessels permitted to be chartered, as related to the number of vessels owned, as set forth in the Commission's resolution of September 24, 1948, as amended, nor as waiving any disqualification for the charter of Commission-owned vessels by reason of certain types of foreign-flag affiliations as therein set forth.

RESERVE FLEETS

The survey of the condition of vessels now in the reserve fleets is being continued to provide a current record for those as well as the vessels being placed in the fleets. It will reflect the estimated cost of necessary repairs to the vessels and is being used as a basis for the selection of vessels for the permanent National Defense Reserve Fleet. This survey is approximately 80 percent complete. All vessels delivered to the fleets have had primary protective measures applied including mooring, draining, and the application of preservation compound to exposed working parts. Final preservation measures, averaging 57 percent of completion, have been accomplished on all permanent reserve types and on the better-type vessels which have been in the fleets a sufficient length of time to make such action necessary to prevent deterioration. The increase from 55 to 57 percent in the completion of final preservation work was effected during the quarter despite the large number of vessels newly placed in the reserve fleets during that period.

Following is a tabulation of the vessels in the reserve fleets as of September 30 and December 31, 1948, and the vessel movements during the quarter:

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Merchant Ship Sales Act of 1946 (Dec. 31, 1948) status of sales

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1 Subject to changing requirements of the Government.

Includes 1 vessel approved for sale, but definitive papers incomplete.

Z-ET1-tanker-from Liberty group not included in this figure; see major type tanker group.

APPENDIX A-Continued

Merchant Ship Sales Act of 1946 (Dec. 31, 1948) status of sales--Continued

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Subject to changing requirements of the Government.

Z-ET1-tanker-from Liberty group not included in this figure; see major type tanker group.

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