Gambar halaman
PDF
ePub

Senator BARTLETT. Thank you, Mr. Haddock.

Do you have anything to say, sir?

Mr. OATES. Mr. Chairman, I just would like to address myself to one or two points that the Maritime Administrator made. One, I think the main thrust of his arguments was that passage of this bill would jeopardize the 50-50 act, the Cargo Preference Act, and the American-flag participation, and I would hope that my colleagues could express a judgment on that, I couldn't.

But in another point, he said that this bill would be harmful to the U.S. shipyard industry and I don't think any of our members would subscribe to that. During a question that put to him, Mr. Chairman, as to the number of ships we are talking about, I think he mentioned that there were two. As of April 1 of this year in the private shipyards, there were a total of about 20 major commercial ship conversions, including jumboizing and other major overhauls, major revisions, and we feel that at stake here is just about all of the major conversion work which is substantial that the yards are doing and have done in recent years. As of the first of this year, we had 24 major conversions. And I think it is ludicrous for him to say we would be unharmed by this measure.

And as Mr. Coles, I think, said a moment ago, it is not merely the reconstruction work, but each one of these vessels would displace a potential new contract for new construction.

Finally, I think that Mr. Foster's questioning showed very clearly that the Defense Department is in no way inhibited or would be inhibited by this legislation.

Senator BARTLETT. Thank you.

Any further questions?

Senator DOMINICK. I have just one and perhaps this has been gone into before, but let me ask for educational purposes. Is my understanding correct or incorrect that the American merchant marine is being used just about up to the limit at the present time? In other words, there are no empty bottoms going around as far as transportation of defense or any other kind of cargo?

Mr. HADDOCK. I think it is true that the depleted American merchant marine that has been depleted by maladministration on the part of the executive branches of the Government is being utilized to its limits, yes.

Senator DOMINICK. So that our present merchant marine fleet is being used to its limit just about now?

Mr. HADDOCK. Yes, sir, it is; no question about it.

And may I just add, Senator Dominick, when the 1936 act, which is the present maritime policy, was adopted, American ships were carrying more than 25 percent of the export-import commerce of the United States and the Congress in adopting this policy said that we must carry more cargo in our merchant marine, that this is too small a quantity to carry and then gave several reasons why.

At the present time, we are carrying less than 8 percent because of the maladministration on the part of the executive agencies of this legislation and frequent disregard of the intent of Congress, well, constand disregard with respect to the policy set forth in the act.

Mr. SHAPIRO. Senator Dominick, if the import of your question was, would redefining American-flag vessels result perhaps in either

the military or farm surplus commodities or even commercial trade, and commercial trade is not involved in this, would any of those movements be frustrated by limiting this definition of American-flag vessels or really returning it to what the Congress intended instead of the broadened impact that MSTS and the Maritime Administration have given it, the answer is "No."

We have absolutely no intention through this legislation of frustrating deliveries of merchandise and the military can go outside of this limited number of vessels, if you will, for essential deliveries and we constantly have the problem of waivers under the Cargo Preference Act, if in fact, the American-flag vessels are not available. So, there is no intention here to frustrate and no impact here that can possibly frustrate the physical delivery of materials which I suspect is what you are very much concerned about.

Senator DOMINICK. Thank you.

Senator BARTLETT. Thank you, gentlemen.
Mr. SHAPIRO. Thank you, sir.

Senator BARTLETT. Henry R. Dowd, Transocean Petroleum Carriers of New York.

We are glad to have you, Mr. Dowd.

STATEMENT OF HENRY R. DOWD, PRESIDENT, TRANSOCEAN PETROLEUM CARRIERS, INC., NEW YORK, N.Y.; ACCOMPANIED BY CAPT. V. BRUER, PRESIDENT OF MARINE CARRIERS

Mr. Dowd. Mr. Chairman, I thank you for this opportunity to appear here. I would like to introduce Captain Bruer, president of Marine Carriers.

I am president and director of Transocean Petroleum Carriers, Inc., and an officer and director of Marine Carriers Corp., U.S. Tankers Corp., and Virginia Lines, Inc., on whose behalf I appear here today. These companies own and operate seven American-flag vessels, which includes two 24,000-ton bulk carriers, two tankers, and three general cargo vessels. We are opposed to the passage of the proposed legislation in its present form, as we believe it is detrimental to the development and expansion of the American merchant marine. Since this bill will primarily affect independent American operators, I will limit my comment to this phase of the industry.

I would like to interpose here, that prior to Mr. Shapiro, AMI and other people indicated that conversions were being done. The majority of these are being done with subsidy funds where the people are reimbursed 50 percent of the cost.

Senator BARTLETT. Will you please restate that? I didn't quite get it.

Mr. Down. The majority of conversions previously referred to are being done by subsidized lines who recover 50 percent of the cost through subsidy. Now this is not available to the independent operator. I think this substantially changes the number of conversions that has been done since the passage of the law in 1961.

I will present our position in two sections; namely, (1) detrimental results following passage of the proposed law; and (2) positive action which could result by allowing additional vessels to be registered under the U.S. flag.

1. DETRIMENTAL RESULTS FOLLOWING PASSAGE OF THE PROPOSED LAW

(a) Stagnation and continued deterioration of the independently owned American fleet. Mr. Chairman, you gentlemen have listened to unending testimony setting forth the decline of the American merchant marine, and it is almost the unanimous consensus of opinion that additional American-flag tonnage is required.

It seems paradoxical that the purpose of the proposed bill is to prevent additional vessels from being documented under the flag of the United States when only during this past week, the Department of Defense has requested subsidized lines to supply 23 ships in order to fulfill military requirements and the subsidized lines propose to charter foreign-flag vessels to operate on American liner service to replace vessels withdrawn for the military. If we subscribe to any philosophy of preventing additional tonnage under the American flag, I believe the result will be a fatal blow to American merchant marine. Every expedient to keep American ships sailing should be utilized until a long-range maritime program is formulated.

(1) When the general agency ships are redelivered to the Maritime Administration, we will not have sufficient tonnage available, if the fleet continues to decline, to insure employment for qualified officers and seamen. We are faced with a serious problem of qualified personnel due to the retirement of older officers and seamen who started their seagoing careers during World War II. Therefore, we have, with the cooperation of the unions, encouraged your seamen to advance themselves as officers in the merchant marine by operating school for said

seamen.

(2) If we prevent additional vessels from entering the American merchant marine, established independent companies will have to reduce the number of office personnel and technical staffs, as the reduced number of ships due to obsolescence and scrapping will not be able to financially bear the overhead burden.

(3) As a result of lack of opportunity, capital will be diverted from the American shipping industry and seek other sources of income. Unfortunately, this trend is already established with many of the American operators investing in foreign tonnage. This fact can be supported by the actions of some of the individuals who are testifying in favor of the proposed bill as directly or indirectly they have substantially increased their ownership of foreign tonnage.

(b) Statistics to support the decline of the American fleet have been presented in many hearings and perhaps the most unfortunate one is that we have had only 130 vessels built for American-flag operations since 1945, or an average of less than 7 vessels per year, which is less than one-half the number of vessels for the subsidized lines and 1 tanker. The total American merchant marine is comprised of approximately 900 vessels of which 600 ships will soon be or are obsolete because they are over 20 years old, and will have to be scrapped in the near future.

Our companies have been directly challenged with this problem as we primarily operated tankers, and have scrapped seven American war-built vessels totaling over 100,000 tons during the past 18 months, since we no longer could economically operate the vessels. We believe

our position is representative of many independent operators, as a substantial number of vessels have been scrapped during the past 3 years. The World War II vessels are getting older and the necessity of scrapping will increase in the next 4 years.

(c) In addition to the direct effects on the American merchant marine, the continued decline as a result of scrapping vessels leads to a loss of lifting capability for American vessels and foreign vessels automatically replace the American ships. This diversion of freight results in a serious loss of dollar earnings which adversely affects the Government's foreign exchange problem..

[ocr errors]

2. POSITIVE ACTION WHICH COULD RESULT BY ALLOWING ADDITIONAL VESSELS TO BE REGISTERED UNDER U.S. FLAG

(a) Registration of additional American vessels from foreign flag would enable the Defense Department to utilize privately owned American vessels and not force the subsidized lines to withdraw their vessels from commercial service. If the proposed legislation is amended and it is the intent of the Senate that American vessels be utilized in the present emergency, American owners would purchase foreign vessels and charter them to the military at competitive rates which would be more economical than reactivating vessels from the reserve fleet and operating them as general agency ships. Bringing some tonnage back from foreign flag with U.S. Government agency charters would not solve the problems of the American merchant marine, but it would enable many in the industry to survive a period of indecision which now confronts us.

At present it is economically impossible for independent operators to build new American vessels, as no subsidy is available. The possibility exists that a subsidy for building will be granted in the future or that the law will be changed so that American ships can be built in foreign countries. The uncertainty about the future, however, prohibits a prudent operator from building without a subsidy as others might have the same vessel within the next 5 years at a cost of less than 50 percent of the price of a ship contracted for today. If we optimistically assume that this uncertain situation will be clarified within 2 years, subsidy approved and the funds appropriated by Congress, it would still be a minimum of 4 years, or 1970, before any new independent owned vessels could be operating.

This hiatus should not be tolerated. I challenge the supporters of the proposed legislation to suggest any alternate action which might change the present difficult position. I do not believe that any injustice will be experienced by any American operators, if additional vessels are documented under the American flag as the demand for ships is greater than the supply, both now and for at least the next 5 years. Title II tanker owners have been afforded many considerations by mortgage moratoriums and trade-out privileges, and should now be willing to face the normal competition of the marketplace.

The last addition of independent tonnage was in 1962 when approximately 15 bulk carriers were redocumented under the American flag. This was prior to passage of Public Law 87-266 as amended September 21, 1961, 75 Stat. 565, which prohibited redocumented vessels from carrying Public Law 480 cargoes. These vessels have proved the most efficient in our merchant marine. They have employed Amer

67-483-66—12

ican officers and seamen and carried the major portion of bulk commodities in our foreign trade. These vessels were documented under U.S. flag without cost to the U.S. Government, and they proved so economical that they are penalized under current Government regulations in carrying Public Law 480 cargoes at rates 20 percent below authorized rates paid to vessels under 15,000 tons, including the subsidized operators.

In freight cost alone, excluding the cost of subsidy for the subsidized operators, these vessels have saved the U.S. Government a minimum of $5 million per year compared to the freight rate that would have been paid to the smaller, less efficient tonnage. If additional American vessels will offer at economical rates, I see no valid reason why the Department of Defense should not be able to charter American-flag vessels, employing American seamen, under the best rates and conditions available.

Furthermore, contrary to forecasts in 1961 bringing back the 15 bulk carriers did not disturb the freight market, and the shipyards have profited by substantial increased work and repairs.

Since the U.S. Department of Agriculture recently has increased acreage allocations by 15 percent for the current crop, primarily due to the requirements of foreign countries, it is reasonable to conclude that additional American ships will be required if we are to carry relatively the same percentage as in the past. I do not believe that anyone can seriously challenge the fact that the U.S. merchant marine is carrying a disproportionately low percentage of our foreign trade as the average figure is approximately 9 percent of our total foreign commerce. Surely we should strive to keep at least this minimum percentage. This can only be accomplished by redocumenting additional American tonnage.

We require new concepts in the industry, and the independent operators have made substantial contributions in the past: (a) the development of containerization by Sealand; (b) the concept of carrying grain in tankers and the adoption of American farm machinery to discharge the grain from tankers; and (c) the utilization of jumboized vessels, using World War II powerplants, greatly increasing productivity. However, we require ships to operate and cannot continue with obsolete tonnage.

In conclusion, I wish to clarify our position, that we concur with the intent and language of the bill to line 5 on page 2, which we understand is a reiteration but clarification of present legislation. We believe that lines 6 through 22 on page 2 should be deleted, and that American operators should be encouraged to redocument vessels under the U.S. flag in accordance with American Bureau of Shipping and U.S. Coast Guard regulations.

Senator BARTLETT. Thank you, Mr. Dowd.

Senator Dominick, do you have any questions?

Senator DOMINICK. I am interested in his last statement. Mr. Dowd, you say that the bill up to line 5 on page 2 is a clarification of present legislation. Is it identical in language?

Mr. Down. I was informed of this by our counsel, sir. I am not legal. I had previously mentioned that it was the same. I couldn't dispute it.

Senator DOMINICK. What you are saying in your testimony is that if you should be permitted to document vessels modified or

« SebelumnyaLanjutkan »