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we lose the 50-50, and we go bankrupt, everyone who bought a ship does, and we are finished, and that is the end of it. But if you give us a tramp ship subsidy, which simply means to amend the act so that "essential services" is interpreted to mean anything that is essential for the welfare and safety of the United States, you will have to include tramps.

The CHAIRMAN. You are speaking of the amendment to the original act?

Mr. Dow. The subsidy act; yes, sir. That is all you need. And this committee whipped it into good shape last year. I think it went through at least two revisions, did it not, Mr. Weichel?

Mr. WEICHEL. Yes.

Mr. Dow. As to ECA, I should bring that out a little more. Both Mr. Hoffman and Howard Bruce brought out that one of their greatest problems in the 32-point ECA program is the lowering of prices abroad, and the stabilizing of their currencies. The tail is now wagging the dog. The little shipping industry, which they did not think would be so important, is now, with the 50-50 split, landing coal in France at $21 a ton; and the British are selling coal at from 50 to 65 cents a ton under that, and so are the Poles. But the British domestic price, plus Channel freight, is still $4. And Heaven knows what it costs the Poles to dig a ton of coal, with whoever they use to do it. I think Mr. Hoffman put it very well when he said, "We are making the market, and they are riding it."

Now, you take the two basic commodities of coal and grain, and you hold them up artificially throughout all of Europe, and the result is that it is impossible to get down the cost of all the other commodities that depend upon food, heat, and power. You cannot do it. Neither can you stabilize the currency.

The 50-50 split, says Mr. Hoffman, does not answer that problem at all. It answers the American merchant marine's temporary needs, but not that basic problem at all. And the only thing that will is the ship subsidy. And there is no more reason why you should not subsidize tramps than line services. Two wars have proved them both very essential.

The CHAIRMAN. Any questions? Mr. Weichel?
Mr. WEICHEL. This tramp operators' group-

Mr. Dow. This is an owners' group, Mr. Weichel, not an operators' group.

Mr. WEICHEL. Well, owners' group. Before the war there were no American-flag ships in the tramp service, as you say.

Mr. Dow. That is correct; yes, sir.

Mr. WEICHEL. And these people that you represent were in the business in the United States of chartering foreign ships, because there were no American-flag ships to charter.

Mr. Dow. That is correct. And they have no foreign connections today.

Mr. WEICHEL. They do not have any today, because there are no foreign ships to charter. There have not been any during the war and after the war.

Mr. Dow. Oh, yes. There are oodles of them. And many men are chartering them; but not our organizations.

Mr. WEICHEL. But right after the war, you people could not go back to the business of chartering foreign ships, because they did not have enough, and they were buying some over here.

Mr. Dow. We could have, and some of the men did. But the members of this Institute did not.

Mr. WEICHEL. You mean a few of them did not?

Mr. Dow. No, sir. I mean a few of them did; most of them did not. Most of them bought.

Mr. WEICHEL. Well, then, as I understand it, these people you are talking about never did have any ships before the war. They were chartering foreign ships. And after the war they were not able to charter foreign ships. And as offal of the war, we had about four or five thousand dry cargo ships. And, as we indicated here this morning, the War Shipping Administration, after the passage of the 1946 act, went into the chartering business. All your people then were in business as tramp ship operators; and now you want to stay in business, and want this industry nursed along. Is that about it? Mr. Dow. No, sir, that is dead wrong on about three counts. Mr. WEICHEL. I thought you were here to get a little mercy for this industry that you say needs help.

Mr. Dow. In the first place, we could have chartered foreign ships, and some did. Some actually dropped out of our institute and went into chartering foreign ships, because they gave up any hope that there would be any aid forthcoming.

Mr. WEICHEL. How many ships did your people buy? We had them in here last year. We found that one company collected $50,000,000 off of the Government in charter fees, and all that, and they actually invested $500,000 in American ships. How many ships do your people own now?

Mr. Dow. Just a moment. It was not our people that made any $50,000,000. I can tell you that.

Mr. WEICHEL. But how many ships does this association actually own now? How many ships did they buy this past year, in 1948? How many did they buy and pay for, would you say?

Mr. Dow. About 40.

Mr. WEICHEL. Forty.

Mr. Dow. That is $20,000,000 worth of ships.

Mr. WEICHEL. Twenty million dollars? You pay $5,000,000 apiece for them?

Mr. Dow. No, half a million. Half of 40 is 20.

Mr. WEICHEL. How much money did you actually pay?

Mr. Dow. Well, they paid $10,000,000 down at that rate, and kept another $10,000,000 in the till for the Maritime Commission to count every few months.

Mr. WEICHEL. I would like to have you put in the record the names of the people who bought 40 ships in the last year and paid for them. And how many did they buy in 1947?

Mr. Dow. None.

Mr. WEICHEL. None. That is what I thought.

Mr. Dow. No, 20.

Mr. WEICHEL. Well, that does not quite agree with the testimony here last summer. So if they bought 40 since the testimony last summer, that is very fine; bought them and paid for them.

Mr. Dow. And we want to buy more, Mr. Weichel. We do not want to charter these vessels.

Mr. WEICHEL. Will not the Maritime Commission sell you any?
Mr. Dow. I beg your pardon?

Mr. WEICHEL. Will not the Maritime Commission sell any?

Mr. Dow. You cannot buy a thing, Mr. Weichel, that you have got to use for 20 years to get your money out of it, or 10 or 15 anyway, when you can only see some kind of a profit for 4 years. No business worth a nickel will do it.

Mr. WEICHEL. What do you want? A guaranteed business, or something?

Mr. Dow. We want a guarantee that we can stay in business competitively. You have done it for 12 subsidized lines. Why not us? What is the difference? We are just as important as they are.

Mr. WEICHEL. You mean subsidize everybody? That is what you mean, is it not? I am for that, of course. We are doing it for the whole world. There is no disagreement. [Laughter.]

Mr. Dow. Subsidize the American merchant marine as a whole; not piecemeal, and not selectively. Subsidize them as a whole, and have a well-balanced, well-rounded merchant marine that any foreign aggressor is going to take two or three looks at before he pulls a gunand you have got something. And if you do not do it, what will be the situation when this Marshall plan cargo is gone-even if Russia is in her place, if that will ever come.

The American shipper and the American manufacturer, and all the people from your State of Ohio that make everything from soup to nuts out there will want to ship to the rest of the world. They will come to the water's edge, and some fellow that "no speak English" will want $14 or $15 a ton for bulk cargo. And if there is no American merchant marine, you will pay it, or you will keep it in Ohio and use it yourself.

Mr. WEICHEL. We have not had to worry about that, down to this minute.

Mr. Dow. Still a buyer's market out there?

Mr. WEICHEL. That is all.

I would like to have the Maritime Commission have you give the names to Admiral Smith of the companies you referred to, what ships they bought and paid for.

Mr. Dow. When you say "paid for," you mean paid at least 25 percent down; not paid for in full. There are very few ships owned anywhere that are paid for in full.

Mr. WEICHEL. Then show how many dollars in cash out of the chartering profits that you got, that you, through your faith in the American merchant marine put back in.

I would like, Admiral, to have put in the record the number of ships each one of these companies bought, the actual cash they paid you, and then the actual cash that each one of these companies has received from the United States Government since January 1, 1942. Then we can see how much faith they have in the American merchant marine. I would like to have that go in this record.

Mr. Dow. Well, now, Mr. Weichel, when you say "cash to the United States Government," I do not know offhand except for vessels chartered to the Army

Mr. WEICHEL. Chartered in any way; chartering, requisitioning for hire, anything, for which these same people got this money from the United States Government. I want that shown.

Mr. Dow. Well, if I understand you rightly, we will do the best

we can.

Mr. WEICHEL. No, the Maritime Commission will get that for us, and put it in.

Mr. Dow. That is fine, because they do have the figures.

The CHAIRMAN. They can get the information, and we will be glad to have it.

(The information referred to is as follows:)

Hon. S. O. BLAND,

WASHINGTON 25, D. C., February 1, 1949.
File: BA-11.

Chairman, Committee on Merchant Marine and Fisheries,

House of Representatives.

MY DEAR MR. BLAND: Enclosed for your information is copy of a letter dated February 1, 1940, with supporting data, addressed to the Honorable Alvin F. Weichel of your committee who, through Mr. Caras of the staff of the committee, requested certain additional information with respect to the following seven companies: Fribourg Steamship Co., 2 Broadway, New York 4, N. Y.; Marine Operating Co., Inc., Marine Transportation Group, 11 Broadway, New York 4, N. Y.; Polarus Steamship Co., 30 Broad Street, New York 4, N. Y.; Smith & Johnson Steamship Corp., 60 Beaver Street, New York 4, N. Y.; T. J. Stevenson Co., Inc., 80 Broad Street, New York, N. Y.; United States Navigation Co., Inc., 17 Battery Place, New York, N. Y.; West India Steamship Co., 26 Beaver Street, New York 4, N. Y.

Similar data for these companies covering earlier periods were included in a special report prepared and transmitted to your committee, February 16, 1918. Sincerely yours,

W. W. SMITH, Chairman.

WASHINGTON 25, D. C., February 1, 1949.
File: BA-11.

Hon. ALVIN F. WEICHEL,

Committee on Merchant Marine and Fisheries,

House of Representatives.

MY DEAR MR. WEICHEL: Mr. G. S. Caras, of the staff of your committee, informally requested last Thursday that we adjust the amounts for item Nos. 1, 2, and 3 for seven companies, which were included in the special report prepared February 16, 1948, and sent to you while you were chairman of the Merchant Marine and Fisheries Committee. He requested that item No. 2 be shown by vessels.

The report referred to was printed and included in the hearings of February 12, 13, 16, and 17, 1948, which were held by your committee. They are shown on pages 675 to 783 of the printed hearings.

The companies involved are shown hereunder: Fribourg Steamship Co., 2 Broadway, New York 4, N. Y.; Marine Operating Co., Inc., Marine Transportation Group, 11 Broadway, New York 4, N. Y.; Polarus Steamship Co., 30 Broad Street, New York 4, N. Y.; Smith & Johnson Steamship Corp., 60 Beaver Street, New York 4, N. Y.; T. J. Stevenson Co., Inc., 80 Broad Street, New York, N. Y.; United States Navigation Co., Inc., 17 Battery Place, New York, N. Y.; West India Steamship Co., 26 Beaver Street, New York 4, N. Y.

The three items have been adjusted to December 31, 1948 and the information shown on the enclosed forms.

Sincerely yours,

W. W. SMITH, Chairman.

85414-49- -4

Fribourg Steamship Co., 2 Broadway, New York 4, N. Y.

1. Charter-hire payments to owners of vessels (not under Merchant Ship Sales Act of 1946): estimated accruals, May 1, 1941, to Dec. 31, 1948--- $0 2. General agency fees:

Jan. 1-Dec. 31, 1942.
Jan. 1-Dec. 31, 1943_.
Jan. 1-Dec. 31, 1944.
Jan. 1-Dec. 31, 1945_-

Jan. 1-Dec. 31, 1946-
Jan. 1-Dec. 31, 1947.

Jan. 1-Dec. 31, 1948

Total, Jan. 1, 1942, to Dec. 31, 1948_.

3. Payments for purchase of ships:

From May 1, 1941, to Dec. 31, 1948:

Payments for vessels purchased (including trade-ins).
Payments for vessels requisitioned for title_---
Payments for lost chartered vessels---

Total, May 1, 1941, to Dec. 31, 1948

Total, item Nos. 1 to 3..

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Marine Operating Co., Inc., Marine Transport Lines, Ins.,
11 Broadway, New York 4, N. Y.

1. Charter-hire payments to owners of vessels (not under Merchant
Ship Sales Act of 1946): Estimated accruals, May 1, 1941,

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$1,096, 030. 42

7, 115, 202. 88

600, 000. 00

1943

424,950.00

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