date, and that Congress appropriate money therefor as authorized in the George Washington Memorial Parkway Act. If, however, Congress does not consider such appropriation feasible at this time, the Commission offers no objection to the proposed toll bridge, provided the bill is amended in the following essential particulars: 1. Page 2, lines 6, 7, 8, and 9, should be amended to read: "The location and design of such bridge and the approaches thereto shall be subject to the approval of the Secretary of War and the National Capital Park and Planning Commission." 2. Page 2, beginning at line 23, the language should be amended to read: "or political subdivisions thereof, and including also such lands appurtenant to the Washington Aqueduct Dam and conduit and park and recreation lands" as in the judgment of the Secretary of War and the Secretary of the Interior may be occupied without damage to the proper uses of those structures and areas." (The Secretary of the Interior now has under his jurisdiction the development of the Chesapeake & Ohio Canal and other park properties which will be needed for the bridge and approaches.) 3. The present bill provides that after the toll bridge is paid for title shall be conveyed to the States of Maryland and Virginia. The Commission recommends amending the bill so that title shall be conveyed to the United States and the bridge and approaches shall become a part of the George Washington Memorial Parkway. Section 6 (a), page 8, beginning at line 20, should therefore be amended to read "After payment of the bonds issued by the Commission and the interest thereon, or after a sinking fund sufficient for such payment shall be provided and shall be held for that purpose, the Commission shall convey to the United States of America all the interest of the Commission in and to such bridge, and it shall become a part of the George Washington Memorial Parkway, and be maintained and operated as a free bridge by the National Park Service, as provided in the Act of May 29, 1930, as amended (46 Stat. 482)." (All subsequent language in the bill inconsistent with this amendment should be stricken out or revised.) 4. Page 13, lines 7, 8, and 9 might well be revised to read: "At the time of such dissolution all moneys in the hands of or to the credit of the Commission shall be divided and distributed equitably between the States of Virginia and Maryland and the United States of America in such manner as may be determined by the Commissioner of Public Roads of the Federal Works Agency." 5. There should be inserted between sections 11 and 12 a new section authorizing the United States to take over at any time the bridge and its approaches at cost plus 10 percent, as follows: "The United States may at any time acquire and take over all right, title, and interest in such bridge, its approaches and approach roads, and any interest in real property necessary therefor, by purchase or by condemnation, paying therefor not more than the cost less depreciation and obsolescence of said bridge and its approaches and approach roads, as determined by the Secretary of War." 6. And finally the preamble to the bill beginning at line 3 should be amended to read: "That in order to facilitate interstate commerce, improve postal service, and provide for military and other purposes, and the acquisition and development of the George Washington Memorial Parkway." This report has been submitted to the Bureau of the Budget and it offers no objection thereto. Respectfully yours, FREDERIC A. DELANO, Chairman. 76TH CONGRESS 3d Session } SENATE { REPORT No. 1554 REMOVAL OF RESTRICTION ON USE OF LAID-UP FLEET APRIL 30 (legislative day, APRIL 24), 1940.-Ordered to be printed Mr. BAILEY, from the Committee on Commerce, submitted the following REPORT [To accompany S. J. Res. 246] The Committee on Commerce, to whom was referred the resolution (S. J. Res. 246) to suspend section 510 (g) of the Merchant Marine Act, 1936, having considered the same, report favorably thereon with amendments and recommend that the resolution as amended do pass. The amendments are to conform with the amendments of the resolution as reported to the House (H. J. Res. 519). The Maritime Commission reported favorably on the resolution to the chairman of the Senate Committee on Commerce. This letter is identical with that which appears in the report of the House Committee on Merchant Marine and Fisheries which follows herewith: [H. Rept. No. 2020, 76th Cong., 3d sess.] The Committee on Merchant Marine and Fisheries, to whom was referred the joint resolution (H. J. Res. 519) to suspend section 510 (g) of the Merchant Marine Act, 1936, during the present European war, and for other purposes, having considered the same, report it back to the House without amendment and recommend that the bill do pass. Since the enactment on August 4, 1939, of section 510 (g) of the 1936 act, changed shipping conditions arising largely in connection with the war in Europe call for a reconsideration of the problems involved in the use or disposition of laidup vessels owned by the Commission. Much concern has been manifested as to the effect of these changing conditions on facilities for shipping, particularly in the intercoastal trade. The committee is of the opinion, after holding hearings on the pending resolutions relating to this subject, that some legislation of a temporary nature is needed to meet the conditions testified to at the hearings, so that the Government can make proper use or disposition of its vessels to meet any acute situations or sudden upheavals in the shipping trades, domestic or foreign. The changing conditions are due largely to the war, and the proposals for legislation limit the life of the legislation to the war period. The emergent, unpredictable, and temporary nature of the problems arising from these conditions is an important factor in the consideration of the pending legislation. Your committee approve the joint resolution as legislation of a temporary nature designed to cope with emergency conditions arising under the upheaval caused by the war abroad. The legislation does not prescribe any permanent policy and is strictly limited to the duration of the war. Section 1 of the joint resolution (H. J. Res. 519) would suspend, during the European war, section 510 (g) of the Merchant Marine Act, 1936, as amended (Public No. 259, 76th Cong., approved August 4, 1939). Section 510 (g), which is a part of the "turn-in-and-build" amendment to the 1936 act, prohibits the use for commercial operation (except in certain limited cases) of vessels over 20 years old, which were in the Commission's laid-up fleet on August 4, 1939, or are turned in under the "turn-in-and-build" provisions (sec. 510). Section 1 of the joint resolution would lift such prohibition on the use of such vessels, and would permit the Commission to sell, charter, or use vessels in the laid-up fleet or the turned-in vessels, pursuant to the Merchant Marine Acts in force prior to August 4, 1939. Section 2 of the joint resolution would permit the Maritime Commission to sell or charter its vessels (other than those constructed under the Merchant Marine Act, 1936), including those in the laid-up fleet, upon such terms and conditions and subject to such limitations as the Commission may deem necessary or desirable in the furtherance of the public interest. The authority to sell or charter old vessels under the Merchant Marine Acts is somewhat restricted, and not suited to flexible temporary or emergency use. It appears from the testimony at the hearings on the joint resolution that it is desirable that the Commission have adequate authority to use the laid-up vessels to meet conditions in the intercoastal trade, which is considered by many shippers to be reaching a critical condition so far as the availability of cargo space is concerned. Since the outbreak of the war in Europe a small portion of the intercoastal tonnage has been transferred to foreign ownership. An economic benefit inures to the trade and to the American merchant marine by thus removing obso lete tonnage so long as such removal does not deprive shippers and consumers of needed water-transporation facilities. Such transfer foreign, however, combined with diversion from the intercoastal trade by charter or sale, without transfer foreign, for use in off-shore trades may bring about an actual shortage of cargo space. Likewise, emergent conditions may arise in the coastwise or in the foreign trades. The Commission has a laid-up fleet of 116 vessels, about 1,000,000 tons, which have been deemed to be of sufficient value to warrant preservation for a national or commercial emergency. While the vital machinery of these vessels has been preserved, the vessels will require reconditioning before they can be put into service in any trade. It appears that to enable the Government to be in a position to make effective disposition of its old vessels in any shipping emergency in foreign or domestic trade, it would be desirable to lift the restrictions of section 510 (g), and to vest in the Commission broad and flexible authority to sell or charter its vessels, including those in the laid-up fleet, for use in the coastwise or intercoastal trades, as well as to sell or charter for use in the foreign trade. It is impossible to foresee just what shipping conditions will arise from time to time in the course of changes due to war abroad and its repercussions at home. It is expected, therefore, that the Commission, if vested with a broad authority to meet such conditions, insofar as they can be met by either temporary or permanent disposition of the Commission's old vessels, will use such authority in such ways as to avoid harmful results to the merchant marine, the national defense, or other national or public interests. The committee realizes that the Commission will take certain matters into consideration in exercising the authority which will be vested in it by this legisla tion. Thus, the Commission will have in mind the danger of putting obsolete tonnage on the market in such amount or on such terms as would hinder the acquisition of new vessels for replacement of old or obsolete vessels, or create a likelihood of surplus of old tonnage in any trade. It would also have in mind the possibility that an operator might attempt to take advantage of the availability of old Government-owned tonnage by diverting his own vessels to other more remunerative trades and using the Government vessels for replacement of his own vessels. Another important consideration would be the desirability of encouraging the use of proceeds of vessels disposed of abroad to aid in the acquisi tion of new vessels for replacement of the old vessels so disposed of. The Commission will undoubtedly keep in mind the danger involved in making old Government vessels available to such an extent or in such a way as to forestall the economic improvement in rate structure, the setting up of replace ment reserves, or the reduction in excess of old tonnage, now manifesting itself even in the domestic trades. It is not contemplated that the vessels will be made available for use in any service or trade to the detriment of existing services provided by American citizens which are adequate to the needs of the commerce affected. It would be very unfortunate if the post World War experiences were to be repeated by the addition of old tonnage in any trade, creating a potential surplus which will become a real surplus when the present abnormal demand for tonnage ceases. In meeting emergent or acute shipping situations, more or less temporary in nature, the long range objectives of merchant-marine legislation must not be forgotten. The Maritime Commission has submitted a report on one of the joint resolutions (H. J. Res. 509) referred to the committee, favoring the enactment of that resolution with an amendment thereto which is substantially embodied in section 2 of the joint resolution (H. J. Res. 519) now reported favorably by your committee. The letter of the Chairman of the Maritime Commission to the chairman of your committee under date of April 19, 1940, is appended hereto. Hon. S. O. BLAND, UNITED STATES MARITIME COMMISSION, Chairman, Committee on Merchant Marine and Fisheries, DEAR JUDGE BLAND: You have requested the views and recommendations of the Commission with respect to House Joint Resolution 509, a joint resolution to suspend section 510 (g) of the Merchant Marine Act, 1936, during the present European war. The resolution would suspend, during the present European war, section 510 (g) of the Merchant Marine Act, 1936, as amended (Public, No. 259, 76th Cong., approved August 4, 1939), which provides as follows: "(g) An obsolete vessel acquired by the Commission under this section which is or becomes 20 years old or more, and vessels presently in the Commission's laid-up fleet which are or become 20 years old or more, shall in no case be used for commercial operation, except that any such obsolete vessel, or any such vessel in the laid-up fleet, may be used, during any period in which vessels may be requisitioned under section 902 of this act, as amended, and except as otherwise provided in this act for the employment of the Commission's vessels in steamship lines on trade routes exclusively serving the foreign trade of the United States." Subsection (g) is a part of section 510, which was enacted on August 4, 1939, as an amendment to the 1936 act. The section provides for a "turn-in-and-build" program designed to facilitate the removal from service of old or obsolete tonnage (whether in domestic or foreign trade) and the replacement thereof with modern vessels. The program was recommended to Congress on the basis of the Commission's survey of coastwise and intercoastal shipping. The survey showed an excess of tonnage in the coastwise and intercoastal trades, arising from the disposition at bargain prices of Government-owned vessels built during and just after the World War. It also showed an unsatisfactory financial condition of carriers in such trades, the obsolescence of their fleets, and a failure to provide adequate vessel replacements. Subsection (g) prohibits the use for commercial operation (except in certain limited cases) of vessels over 20 years old, which were in the Commission's laid-up fleet on August 4, 1939, or are turned in under section 510. It was designed to prevent any increasing of an already excessive obsolete tonnage and to remove a hindrance to new construction arising from the possibility or probability of acquiring from the Government old or obsolete vessels at bargain prices for use in the domestic trades. The joint resolution by suspending section 510 (g) would restore to the Commission, for the period of the European war, its discretionary authority to sell, charter, or otherwise dispose of its old vessels for commercial operation, pursuant to the provisions of the merchant marine acts in force prior to the enactment of section 510. There are at present 116 vessels in the laid-up fleet, some 96 of which, being over 20 years old, are "sterilized" by subsection (g). No vessels have as yet been turned in under section 510. The vessels in the laid-up fleet consist of cargo vessels (except four ex-German passenger vessels) constructed during or immediately after the World War. These vessels have been classified as being of sufficient military or commercial value to warrant their preservation for possible use in case of a commercial or national emergency. Changed conditions arising largely in connection with the war in Europe, which broke out a few weeks after the enactment of section 510, impel a reconsideration of the problems involved in section 510 (g). The possibility of a large increase in the Commission's holdings of obsolete vessels under section 510 has not materialized (probably because of war conditions) and, on the other hand, conditions attendant upon the war have brought about a reduction in the amount of tonnage employed in the domestic trades, especially the intercoastal trade. The Commission has had under way for some time a survey of the problems involved, including the need for using Government vessels for private operation in the affected trades. The unsettled and rapidly changing conditions prevent any final conclusions on these matters, but certain tentative conclusions as to current conditions can be made on the basis of this survey, which will be continued in order to meet conditions as they arise. Much helpful information is being acquired through the Commission's investigation of the intercoastal rate structure. Considerable concern has been manifested as to the effect of the changing conditions in intercoastal shipping. Since the outbreak of the war, there has been transferred to foreign ownership and registry an appreciable percentage (about 12 percent) of the gross tonnage then employed in the intercoastal trade. Since that time an appreciable percentage (about 22 percent) of the tonnage has been removed from the intercoastal trade by charter or other diversion to offshore trade. This diversion results from steps taken by the intercoastal operators to take advantage of greater return in the offshore trade. During this period, however, a few vessels have been brought into the intercoastal trade from other trades. While the net diversion to tonnage from the intercoastal trade is considerable on the basis of tonnage figures alone, it must be remembered that up to the beginning of the war the tonnage was definitely in excess of needs. From the available data, it does not appear that any emergency exists in the intercoastal trade so far as available space is concerned at this time. Insofar as there exist increased demands for cargo space in the intercoastal trade, this increase in considerable part is based on an anticipation of increased rates, possibly of shortage of space, and the desire to protect against possibilities of the future rather than present conditions. There has been a considerable amount of advanced booking, some for the protection against increased rates on future sales, and some of which is wholly speculative in character. The complaints as to lack of cargo space must also, to some extent, be attributed to lack of space at the rates existing, rather than to an absolute lack of space. To offset possible adverse effects of the reduction in tonnage, the cargo-carryng capacity of the vessels remaining in the trade and the earning capacity of these vessels may well be increased by rearrangement and speeding up of schedules and by carrying fuller cargoes at remunerative rates. Steps to this end have been taken by some of the operators. Notwithstanding the preceding considerations, it is possible that an emergency may develop in intercoastal or coastwise trades, or also in some foreign trades. It is therefore desirable that the Commission have discretion to meet problems as they arise, insofar as they can be met by some use or disposition of the Commission's vessels. The Commission consequently favors the enactment of the joint resolution to suspend, during the European war, the restrictions of section 510 (g) on the use or disposition of vessels in the Commission's laid-up fleet, together with an amendment which would vest in the Commission complete authority to make effective disposition of its vessels as needs therefor may arise during the continuance of the war. Such amendment should vest in the Commission general authority, during the European war, to sell or charter its vessels, including those in the laid-up fleet, under such terms and conditions and subject to such limitations as the Commission deems necessary or desirable. It is impossible to foresee just what emergent conditions may require use of the Commission's vessels in commercial operation, and a broad flexibility of authority to meet such conditions promptly in the national interest is necessary to make really effective use of such vessels. To attain such flexibility, it is desirable that the Commission have certain authority in addition to and in modification of existing law. For example, it would be desirable that the Commission have authority to charter vessels for use in the coastwise or intercoastal trades, as well as to charter vessels for operation in foreign trades other than in lines or on essential routes in the foreign trade of the United States. It would also be desirable in attaining the objectives of the joint resolution to broaden the Commission's authority to sell vessels individually for operation in other than lines or essential trade routes. Such a grant of wide discretion does not mean that any unreasonable or unlimited use of the authority is contemplated as either necessary or desirable. Such grant is suggested only because it is impossible to foresee exactly what restric tions will be necessary or desirable in meeting conditions which cannot be predicted at the present time. Some conditions and limitations will necessarily be imposed |