if it becomes law, would permit American-flag passenger liners to operate in the winter Caribbean cruise trade in what would otherwise be the off-season for the vessel. The port of Boston ranks next to the port of New York among the U.S. North Atlantic ports from the point of view of passenger steamship sailings. For the period from February 7, 1961, through the end of the calendar year, there are scheduled 39 sailings of passenger vessels from the port of Boston to overseas destinations. Every one of the vessels so scheduled is of foreign registration, and American-flag passenger liners are conspicuous by their absence. Some of the scheduled sailings from the port of Boston are in the so-called Caribbean cruise trade. Many of the passenger liners sailing from the port of Boston use the facilities of Commonwealth Pier No. 5 in South Boston. This pier is one of the finest passenger piers in the country. It is a double-decked structure some 1,200 feet long, with ease of access over broad highways and automobile parking facilities under cover adjacent to the berth, which permits expedient embarking of passengers. The staff of the Massachusetts, Port Authority has been and is continually endeavoring to increase the Caribbean cruise sailings from the port of Boston, and it is regrettable that such promotional activities must always be conducted with foreign-flag steamship companies when this country has so many fine passenger liners of American registry, flying the house flags of American shipping companies known the world over. If S. 677 becomes law, American-flag passenger liners will be permitted in the winter months to operate in the prosperous Caribbean cruise trade, and the Massachusetts Port Authority would thereby be permitted to invite Americanflag steamship companies to bring their famous liners to Boston for such cruises. American-flag participation in this business would not only enhance the prestige of the port of Boston, but would also enhance the prestige of the American-flag steamship companies, and would greatly assist the steamship lines in their revenue needs in what otherwise would be the poorly productive off-season. Hon. WARREN G. MAGNUSON, UNITED STATES LINES CO., DEAR SENATOR MAGNUSON: One of the major problems that has always faced the operators of passenger ships is the seasonal aspect of the passenger business. In recent years this has become more acute. United States Lines Co., along with other operators of American-flag passenger ships, is at a serious disadvantage vis-a-vis our foreign competitors because we have been unable as our foreign competitors have, to operate our passenger ships on a cruise basis in the off-season. Basic in the Merchant Marine Act of 1936 is the principle of parity. This is supported by the provision of operating and construction differential subsidies, but with respect to the operation of passenger ships, American operators do not have parity of competitive opportunity. Foreign-flag lines are able to operate their passenger liners more efficiently by scheduling them for cruises from the United States to the Caribbean, South America, and the Mediterranean areas. This winter there were 100 cruises scheduled out of New York by foreign ships diverted from their regular routes for this purpose. American subsidized passenger liners, by contrast, are restricted to operation on their essential trade routes even when the demand for service in the winter months has sharply declined. We wholeheartedly subscribe to the principle of essential trade routes but we believe that arbitrary adherence to this principle in the case of passenger vessels is no longer practicable or desirable. U.S. subsidized operators are required by their contracts to operate in an efficient and economical manner. In the passenger business this should mean that American operators should be permitted the necessary flexibility, under reasonable control, to permit them to improve earnings by giving them parity of competitive opportunity with foreign-flag ships. Only by such means can American operators be encouraged to maintain the essential passenger service under our own flag which is required for our commerce and defense. S. 677 is intended to accomplish this purpose and we believe that it is necessary legislation. We suggest that consideration be given to amending section 613 (d) so as to provide that when the operating differential subsidy contracts are amended to authorize operating differential subsidy for cruises, it should also be provided that such authority shall be for a period of 1 year subject to annual extension during the life of the contract unless the Board finds that continuation of such permission would give undue advantage or be unduly prejudicial as between American-flag operators or is not otherwise justified. In our opinion, such a provision would serve as a protection to other American operators and the Government and would be a desirable amendment to the bill. Subject to such amendment and for the reasons heretofore stated, United States Lines Co. supports the provisions of S. 677 and requests that this statement of support be made a part of the record of the hearings on this bill. Very truly yours, W. B. RAND, Executive Vice President. MATSON NAVIGATION Co., Washington, D.C., February 20, 1961. Re S. 677, a bill to amend title VI of the Merchant Marine Act, 1936, to authorize the payment of operating differential subsidy for cruises. Hon. WARREN G. MAGNUSON, Chairman, Interstate and Foreign Commerce Committee, U.S. Senate, Washington, D.C. DEAR SENATOR MAGNUSON: I understand that you have set hearings on the above bill before your committee on February 23, 1961. I am submitting the following information on the subject matter of this bill, which we would very much appreciate having placed in the record. S. 677 would authorize the payment of operating differential subsidy for passenger vessels while engaged in cruises on routes other than those presently authorized by operating differential subsidy agreements. This legislation would permit the removal of passenger vessels from their essential trade routes during their slow season and permit such vessels to cruise during such slow season without reduction in operating differential subsidy. Although the principle of this legislation is desirable, and although Matson Navigation Co., a nonsubsidized line operating passenger ships in the California/Hawaiian service, and the Oceanic Steamship Co., a subsidized line operating passenger vessels on trade route No. 27 United States/Australia-New Zealand, have no objection to this principle, we urge that the details of such legislation be carefully examined before it is introduced in Congress. There is one sentence in this bill to which we strenuously object. This appears in section 613 (c) and simply states: "Section 605 (c) of this act shall not apply to cruises authorized under this section." This simple and seemingly innocuous statement would deprive Oceanic of its rights to a public hearing under the 1936 act. At the present time, before any operator may receive operating subsidy on trade route 27, it must submit an application to the Federal Maritime Board for permission to serve such route, such permission to be granted only after a public hearing under section 605 (c) has been held and Oceanic, or any intervener, has an opportunity to be heard. In 1956, Oceanic invested $27 million in the acquisition of the SS Mariposa and SS Monterey, and at the time of such investment section 605 (c) protection was present and presumed to continue. Now, 5 years after such investment, legislation is being considered which would permit other subsidized operators to enter trade route No. 27 or any substantial segment of it, without requisite section 605 (c) public hearings. This we believe to be tantamount to a breach of the Government's agreement with the Oceanic Steamship Co. Our objections are not capricious since almost 50 percent of the passenger revenue of these vessels is derived from cruise passengers who remain with the vessels throughout their entire journey. An additional 25 percent of the revenue of these vessels is derived from round-trip business where the passengers may disembark at New Zealand or Australia and then join a subsequent voyage for the return segment of their journey. A seemingly compelling argument has been advanced by some operators that the right of foreign lines to cruise at any time and to any area, places Americanflag operators at a disadvantage. This is not convincing in that no similar proposal has been made by such operators that this concept be applied to freighters. There is no reason for violating the essential trade route concept of the 1936 act for passenger vessels without doing similarly as regards freighters. Each of the affected subsidized lines has invested substantially in the construction and purchase of passenger vessels. We appreciate that one or two ships may be facing financial burdens resulting from reduced passenger traffic. We, too, have felt the pinch. However, to alleviate one situation as regards a particular vessel of a particular company, and to create difficulties for other vessels of other companies, does not serve the immediate or the long-range objectives of the American merchant marine. Each of us must promote passenger traffic on American-flag vessels in our services, jointly and separately. Every effort should first be made to operate within the framework of the principles of the present law before moving forward unwisely on a program which would pit American-flag subsidized operators against American-flag subsidized operators. We wholeheartedly support the principle of legislation which would permit subsidy on cruises. However, we do not believe that there is a reason for weakening or destroying the fabric of section 605 (c) of the Merchant Marine Act. Sincerely, A. J. PESSEL. FARRELL LINES, New York, N.Y., March 21, 1961. Re S. 677 (H.R. 3160) to authorize the payment of operating-differential subsidy for cruises Hon. WARREN G. MAGNUSON, Chairman, Committee on Interstate and Foreign Commerce, U.S. Senate, Washington, D.C. DEAR SENATOR MAGNUSON: We understand that hearings on S. 677 (H.R. 3160) have been completed and that the bill is in conference, where certain changes may be made in what will become the final text of the bill. As we understand it, S. 677 prohibits cruise ships from lifting off-route cargo and, if possible for purposes of clarification-we suggest that this prohibition clearly state that it is applicable even if an operator has a cargo service on the cruise route and that he may not use an off-route, passenger ship to lift cargo. Yours very truly, W. CLIFFORD SHIELDS, Vice President. STATEMENT OF THE GEORGIA PORTS AUTHORITY, ATLANTA, Ga., on S. 677 Mr. Chairman and members of the committee, the Georgia Ports Authority is an agency of the State, created by an act of the General Assembly of Georgia. As an instrumentality of the State of Georgia it is charged with the responsibility of developing activity, both freight and passenger at the seaports of Georgia, located at Brunswick, Ga., and Savannah, Ga. Both seaports, Brunswick and Savannah are ideally situated and equipped to handle cruise ships and passenger ships. Ample hotel and motel accommodations are presently available to take care of passengers embarking and disembarking. Both seaports have port facilities to dock such ships and channels with ample depth (32 feet or more at mean low tide) to accommodate them. Both ports have inland regular passenger service by rail, air, and bus, and modern highways providing excellent access to the ports. Notwithstanding these favorable aspects the two seaports have had cruise service in only one tourist season, during year 1960, and no regular passenger service by vessel since World War II. Cruises by ship from our seaports are feasible as was borne out by the enthusiastic reception and support accorded the cruises in 1960. The cruises in 1960 (six in number) were all foreign-flag ships sailing from Savannah. The American-flag ships simply could not compete without an operating-differential subsidy. The Georgia Ports Authority supports the favorable consideration of S. 677 because we believe: 1. The American-flag operators should be given an opportunity to compete for this trade on equal basis at our ports. 2. That with passage of this act more ships will be available capable of serving Brunswick and Savannah in eruise service as a practical operation. 3. That with such service at our seaports the public interest in Georgia and neighboring States will expand to support it, and continue its growth. 4. That this legislation conforms with the policy of the United States as declared in the Merchant Marine Shipping Act of 1936 and will contribute to the achievements outlined therein as necessary for the national defense and development of foreign and domestic commerce. STATEMENT BY D. LEON WILLIAMS, EXECUTIVE DIRECTOR, NORTH CAROLINA STATE PORTS AUTHORITY, RALEIGH, N.C., ON S. 677 Mr. Chairman and members of the committee, the North Carolina State Ports Authority is an instrumentality of the State of North Carolina with corporate powers, charged with the responsibility of promoting, constructing, maintaining, and operating deep water terminals at seaports in North Carolina. The North Carolina State Ports Authority operates modern deep water terminals at Wilmington and Morehead City, N.C. Both terminals have, in the past, handled many cruise ships. These cruise ships calling at North Carolina ports in the past have been foreign-flag vessels. In 1960 the number of cruise vessels handled at North Carolina seaports were limited to two. Prior to 1960 North Carolina seaports usually handled from four to six cruises in the spring and fall. The interest in frequent visits of luxury liners to North Carolina was statewide. It is the policy of the North Carolina State Ports Authority to cooperate fully with the State as a whole, the major port cities, the travel bureaus, and agencies, in increasing regular callings of cruise vessels to North Carolina ports. Both Morehead City and Wilmington are excellently served by overland transportation and air service. Hotel and motel accommodations at both cities are adequate to serve this trade in the spring and fall. The North Carolina State Ports Authority supports the favorable consideration of S. 677 because it believes that the American-flag vessels should be given the opportunity to compete in this service in which greater interest is being shown annually. In addition to attracting passengers from North Carolina to participate in these cruises, it is noted that many passengers from inland States avail themselves of the opportunity to embark at North Carolina ports. On behalf of the North Carolina State Ports Authority, we respectfully urge favorable consideration of S. 677. STATEMENT ON BEHALF OF BRUNSWICK-GLYNN COUNTY CHAMBER OF COMMERCE, BRUNSWICK, Ga., on S. 677 Mr. Chairman and members of the committee, I have been authorized by the Brunswick-Glynn County (of Georgia) Chamber of Commerce to appear before your honorable body for the purpose of requesting favorable consideration of S. 677. The passage of this bill will mean an opportunity for the port of Brunswick to enjoy passenger and cruise service by American-owned vessels, and will greatly benefit the community's growing resort and convention business. Such service has not been offered in the past by foreign-flag vessels. Brunswick, Ga., the county seat of Glynn County, is a city of importance from the standpoint of its deep water port and modern docks, its three nationally known all-year beach resorts, and its fine rail, highway, air, and water transportation facilities afford access to and from all parts of the country. Public investments in two new and modern docks at the port of Brunswick during the past 2 years have amounted to approximately $4,500,000, and the Corps of Engineers, U.S. Army, has spent about $1,500,000, exclusive of maintenance, on further improving the harbor and bringing the channel depths on the bar up to 32 feet at mean low water. These facilities at the port of Brunswick include the locally owned dock on East River, and the Georgia Ports Authority's modern facilities, with its transit shed, dock, and berthing space for oceangoing vessels. Brunswick's modern dock facilities, only 8 miles from the open sea, are ample to accommodate cruise ships engaged in transporting passengers, and our people are interested in promoting such trips through the port of Brunswick. Modern accommodations in the Brunswick area are sufficient to accommodate large groups overnight or for longer period. A total of 2,020 rooms are available in modern hotels and motor courts, and convention facilities here are sufficient to accommodate groups of up to 2,000. Although we are ideally equipped to handle cruises, no foreign-flag service has indicated an interest in serving the people of Georgia and adjacent States through our port. The American-flag ships operating on a subsidy are a necessary burden on the taxpayers of our Nation. It is entirely reasonable that we should offer these lines every opportunity to compete with foreign-flag lines on equal basis at all American ports. It follows that the more profitable these American flags can operate the less subsidy will be required. The extra tonnage available for cruises created by passage of S. 677 will impel ship operators to seek new ports for embarkation and we feel that Brunswick port will share in this expansion of port operations. The economy of this area is dependent largely upon the development of our port business. The enactment of this measure will not only give our American ships an opportunity to enter the passenger and cruise business on an equal basis with foreign-flag vessels, but will make it possible for some of this passenger and cruise business to be brought to the port of Brunswick, where adequate facilities are available for handling both ships and passengers. (The following telegrams were received for the record:) Hon. WARREN G. MAGNUSON, BALTIMORE, MD., March 6, 1961. Chairman, Interstate and Foreign Commerce Committee, The Propeller Club of the United States, port of Baltimore, wishes to voice support of Senate bill S. 677 which is deemed necessary for further strengthening the American merchant marine and should be a factor toward retaining dollars in the United States. EDWARD R. COLLINS, Executive Vice President. BALTIMORE, MD. Senator WARREN G. MAGNUSON, Senate Interstate and Foreign Commerce Committee, The Baltimore Maritime Exchange heartily endorses Senate bill 677. Hon. WARREN G. MAGNUSON, E. A. SEIDL, President. BALTIMORE, MD., March 3, 1961. Chairman, Interstate and Foreign Commerce Committee, The Maryland Port Authority desires to register approval of Senate bill S. 677 to be considered by the Merchant Marine and Fisheries Subcommittee of the Senate Interstate and Foreign Commerce Committee at the hearing on March 9 or 10. This bill will permit American flag carriers wider participation in offseason cruise business and should strengthen American merchant ship industry substantially. At present cruise industry is largely foreign flag and we be lieve restrictions preventing American flag participation should be removed. J. L. STANTON, Executive Director, Maryland Port Authority, Pier 2. BALTIMORE, MD., March 6, 1961. Senator WARREN G. MAGNUSON, Chairman, Interstate and Foreign Commerce Committee, The Women's Organization for the American Merchant Marine, Baltimore Club, urges your committee prompt approval of Senate bill 677. This bill will permit American passenger ships to compete in off-season cruise business and help keep gold in United States. Discrimination against American passenger ships should be removed. Mrs. S. O. COLEMAN, President, WOAMM, Baltimore, Club. 68542-61-7 |