freight revenues collected in foreign currencies which are not freely convertible into dollars, net of disbursements in the same foreign currency at the official rate of exchange. This measure would help overcome foreign currency restrictions. (4) Authorize FOA to include ships wholly owned by American nationals, directly or through subsidiaries, under convenience flags (Panama, Honduras, Liberia) among the non-American-flag ships eligibel to carry cargoes financed by FOA. (5) Under such conditions it would be entirely reasonable to impose upon owners the obligation to respect trading limits desired by the Maritime Administration; and not to resell the vessel except to another American firm without prior approval of the Maritime Administration. C. If the answer is in the affirmative (that policy requires American tramps to remain under American registry) then it is obviously essential for Congress to provide a climate in which the tramp section of the private merchant marine can exist and this will necessitate the following measures: (1) Require 50 percent or more of all cargoes financed by the United States Government irrespective of origin or destination to move on American-flag vessels at compensatory rates (after the war the then War Shipping Administration established rate schedules for American-flag movements all over the world as maxima. This can serve as guide providing the minimum is also set). A summary of United States Government cargoes now requiring, respectively not requiring transportation by American-flag commercial vessels are these: (a) A portion of military cargoes. MSTS space requirements are preferentially covered by recourse to regular lines (mostly subsidized). The dearth of commercial cargoes and reduction of MSTS requirements has resulted in a severe drop of the number of tramps chartered by MSTS (MSTS estimates they will need about 20 instead of up to 140 tramps a year ago). (b) FOA-financed cargoes. These move 50 percent American flag providing they emanate in the United States. Bulk cargoes available to tramps financed by FOA are severally curtailed because: Regular liners, mostly subsidized, take an increasing percentage of bulk cargoes such as grain, fertilizer, sulfur, and coal which should go on tramps, due to dearth of other cargoes. FOA increasingly purchases offshore rather than in the United States. Offshore procurement is moving entirely on foreign-flag vessels. (c) The entire stockpiling program under General Services Administration is purchased on a delivered basis, not requiring American-flag transportation. This comprises large quantities of ores for which tramps are eminently suitable but are entirely lost to American-flag vessels at present. (2) Equalize by means of an operating subsidy the cost differential in operating a tramp vessel under American versus foreign registry. (a) Such a subsidy can be coupled with the requirement that profits exceeding 10 percent of invested capital are set aside in a new building fund similar to provisions now governing subsidies for liner vessels. (b) The subsidy is necessary as a long-range measure since the temporary relief which would be affored to some extent by requiring all Government-financed movements to go at least partially on American flag cannot be expected to last indefinitely. AMERICAN EXPORT LINES STEAMSHIP "EXCALIBUR," HON. JOHN MARSHALL BUTLER, Senate Office Building, Washington, D. C. PIER D, JERSEY CITY, N. J., At Sea, January 30, 1954. DEAR SIR: The crew of the steamship Excalibur has asked me to appeal to you to use your influence to prevent the termination of the free medical and hospital care now afforded merchant seamen in the marine hospitals. This service to seamen was established by legislative action in 1779, and is traditional, not only in the United States, but in all maritime countries. To deny the American seaman this traditional right would be discrimination of the rankest sort. If this move is in the interests of economy, it is a mistake. The local hospitals that would be compelled to absorb the load are unable to handle their present commitments and the USPHS is the only health agency that has the experience and the facilities to properly screen the returning American and foreign seamen, who are exposed to disease and contagion all over the world, and to move promptly and efficiently to prevent the spread of disease that could be of epidemic proportions. All this is in addition to the training afforded the medical profession in research and clinical experience with tropical and other rare disease that cannot be obtained in other hospitals. Won't you please give this your earnest consideration and oppose any legisla tive or administrative action that would tend to change the present program? I assure you that such action on your part would be in the best interest of all. Very sincerely, JOHN P. TALBOT. FEBRUARY 17, 1954. MR. JOHN P. TALBOT Steamship "Excalibur," Pier D, Jersey City, N. J. DEAR MR. TALBOT: Thank you for your letter of January 30, in which you appeal to me, in behalf of the crew of the steamship Excalibur, to use my influence to prevent the termination of the free medical and hospital care now afforded merchant seamen in the marine hospitals. I know what these services have meant to the merchant marine in the past and am anxious to do anything I can to be of assistance. I will take your letter up with the members of the Subcommittee on Water Transportation of which I am chairman, and be assured that your letter will receive the fullest consideration. DEAR SIR: Please accept my thanks in behalf of the crew of the Ercalibur for your reply to my letter concerning the marine hospitals. It is gratifying to know that you consider this matter important enough to warrant your attention. However since then a matter of much more importance has come up, the transfer of American ships to foreign registry. This problem started with the Maritime Administration's liberalization policy which permitted the transfer of 15 tankers to foreign registry and the Administration's consideration of the American Tramp Steamship Association's request to transfer 160 Liberty ships to foreign registry. These transfers have been permitted in spite of the statement of the Department of Defense that the American merchant marine is deficient in 165 dry-cargo ships, 6 passenger ships, and 43 tankers. I wish to emphasize the fact that these transfers constitute the most serious threat to the existence of the industry. If the Maritime Administration permits the transfer of American ships to continue, the marine hospital issue, and all other issues affecting the Maritime service will become academic because there will be no merchant marine. As chairman of the Subcommittee on Water Transportation, you are in a position to recommend legislation that will put an end to this suicidal policy. I hope that you will see fit to take whatever action is necessary to restrain the Maritime Administration from further depleting the Nation's merchant marine until suitable legislation can be enacted to prevent us from being driven from the seas. Sincerely yours, JOHN P. TALBOT. INDUSTRIAL UNION OF MARINE AND SHIPBUILDING WORKERS OF AMERICA, Camden, N. J., April 14, 1954. LOUIS S. ROTHSCHILD, Administrator, Maritime Administration United States Department of Commerce, Washington, D. C. DEAR MR. ROTHSCHILD: The Industrial Union of Marine and Shipbuilding Workers of America is opposed to your policy and practices of transferring American merchant ships to foreign operations. We think that our Government is permitting our merchant marine to be depleted by allowing such transfers. Our Government, from 1945 through 1952, has permitted the transfer of 532 privately owned American ships to foreign flags. In the past the Government had usually specified that American ships transferred to foreign flag could not come into direct competition with American-flag ships. American maritime labor emphatically stated that even with that policy, every ship transferred meant that two ships were lost to the American Merchant Marine. This was so because the transferred ship would release another foreign-flag ship from another trade which would then come into competition with American ships. It is important to realize that this practice is made even easier for standard cargo and tank ships than it is for passenger ships. Also, we wish to point out that this practice of having transferred ships release other ships to restricted trades is a means of offsetting the requirement that the transferred ship shall not ply in the trades with Communist countries in accordance with the Department of Commerce's transportation orders T-1 and T-2. We do not think that ships under the "runaway" flags will be available to us in the next national emergency. Unlike the crews of American-flag ships, the seamen aboard the runaway flag ships are not screened for loyalty. Based on the knowledge that the Communists have issued orders to their agents to become seamen aboard these ships, it would be folly to believe that they are not aboard these ships. This is especially true because many of the crews aboard these ships are from such countries where many of the people are avowed Communists. All of us are familiar with the fact that the Communist Party in this country had ordered its agents to seek employment aboard United States merchant ships especially those which transit the Panama Canal. In time of war it would be amazingly foolish for our Government to permit ships flying the runaway flags to transit the Panama Canal which is so vital to our national defense. Also, we will not find enough loyal, skilled American seamen to man these ships if we permit the runaway-flag ships to drive us off the high seas. The American Tramp Shipowners Association has already requested that the Maritime Administration's new relaxed tanker policy now become applicable to their dry-cargo, Liberty-type tramp ships. They have made applications for the wholesale transfer of 60 of their ships to the runaway flags. Their argument is that at the present time 100 of their 150 tramp ships are laid up because of lack of economic military-aid cargoes. They state that the transfer foreign of 60 of their ships will permit the remaining 90 to remain under the American flag. The transfer of the 60 tramp ships to the runaway flags will result in direct competition of those ships with the tramp ships of bona fide foreign maritime nations, as well as with our nontramp ships which frequently carry bulk cargoes in order to offset overhead expenses. We firmly believe that our Government should make a complete study of the need of an American tramp fleet and provide means for maintaining this fleet in competition with low-operating-cost foreign tramps. However, we believe that until such a study is made and legislation is enacted, the American tramps shall not be transferred to the runaway flags. In 1924, Lloyds Register recorded only 15 ships flying the Panamanian flag. As of June 30, 1953, there were 533 ships, aggregating 5,765,000 deadweight tons, under the Panamanian flag (Annual Report of the Federal Maritime Board and Maritime Administration 1953, p. 67). On that date there were 145 ships, aggregating 2,277,000 deadweight tons, flying the Liberian flag, and 73 ships, aggregating 570,000 deadweight tons, flying the Honduran flag. This is a total of 751 ships, aggregating 8,612,000 deadweight tons, under the 3 runaway flags. As of January 1, 1954, there were a total of 346 ships of 1,000 gross tons and over owned by American companies and operated under foreign flags. Also, there were a total of 72 ships which were being constructed for these companies to operate under foreign flags. These 418 ships are 34 percent of the privately owned ships under the United States flag. Of these 418 ships, 207 are under the runaway flags of Panama, Honduras, and Liberia. The argument often used by the American companies is that they operate their older ships under foreign flag. This is not true. In their 1952 annual report Lloyds Register of Shipping reported that only 5 percent of the tankers registered under the American flag were under 5 years old. On the other hand, the percentages of tankers under 5 years old in the runaway fleets was as follows: Honduras Liberia Panama Percent 60 78 31 It is paradoxical that the large American companies that dodge paying Ameri can taxes are the same ones having large foreign holdings which require the protection of our Government. We hope that the Maritime Administration will reverse its relaxation of that statement of policy issued under date of July 11, 1952, which now permits the transfer of Liberty-type tank ships to foreign account or registry. Very truly yours, JOHN J. GROGAN, President. (MARITIME SUBSIDY POLICY) HEARING BEFORE A SUBCOMMITTEE OF THE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE UNITED STATES SENATE EIGHTY-THIRD CONGRESS SECOND SESSION PURSUANT TO S. Res. 173 TO INVESTIGATE CERTAIN PROBLEMS RELATING TO MAY 3, 1954 PART 2 Printed for the use of the Committee on Interstate and Foreign Commerce |