FUNCTIONS OF THE UNITED STATES SHIPPING BOARD MERCHANT FLEET CORPORATION LETTER FROM THE CHAIRMAN OF THE UNITED STATES SHIPPING BOARD TRANSMITTING IN RESPONSE TO SENATE RESOLUTION NO. 351 (72D CONG.) A REPORT OF ALL FUNCTIONS OF THE UNITED STATES SHIPPING BOARD MERCHANT FLEET CORPORATION AND THE ANNUAL COST THEREOF APRIL 17 (calendar day, APRIL 20), 1933.-Ordered to lie on the table and to be printed UNITED STATES SHIPPING BOARD, The PRESIDENT OF THE SENATE, United States Senate, Washington, D.C. SIR: I have the honor to transmit herewith two copies of a report of the organization and functions of the United States Shipping Board Merchant Fleet Corporation as submitted by the President of that Corporation, in compliance with Senate Resolution 351, Seventysecond Congress. Respectfully, H. I. CONE, Chairman. ORGANIZATION AND FUNCTIONS OF THE UNITED STATES SHIPPING BOARD MERCHANT FLEET CORPORATION UNITED STATES SHIPPING BOARD From: President, Merchant Fleet Corporation. April 12, 1933. Under date of February 8, 1933, the Senate of the United States resolved (S. Res. 351) that The heads of all departments, independent establishments, and Governmentowned and/or controlled corporations be, and are hereby, directed to submit on or before April 15, 1933, to the President of the United States and to the Senate of the United States a detailed report of all functions, including accounting, disbursing, collecting, purchasing, and personnel, performed by said departments, establishments, and corporations, together with the authority for the performance of each function and the annual cost thereof. On February 24, 1933, Senator Wheeler had inserted in the Congressional Record three pro forma statements set up so as to indicate 162302-33 the form in which the information required by the foregoing resolution might be submitted. From the appearance of them it is judged that those statements were designed to fit the requirements of the "regular" departments and establishments of the Government. They were not considered to be exactly suited to a reflection of the organization and activities of the Fleet Corporation which is organized along commercial lines much as would be a privately owned corporation engaged in the shipping business. It has been thought desirable, therefore, to depart somewhat from the forms suggested by Senator Wheeler in order that a clear and concise presentation of our organization and its functions might be made, and I am submitting the following report to you with the hope that it conveys such a presentation and will meet with your approval. ELMER E. CROWLEY, President. FOREWORD The Shipping Act, 1916, created the United States Shipping Board and provided (sec. 11) that the board * * * may form under the laws of the District of Columbia one or more corporations for the purchase, construction, equipment, lease, charter, maintenance and operation of merchant vessels in the commerce of the United States. * * * The United States Shipping Board Emergency (now Merchant) Fleet Corporation accordingly was organized, the certificate of incorporation being dated April 16, 1917. The Shipping Act, 1916, limited the life of the Corporation by providing that At the expiration of 5 years from the conclusion of the present European war the operation of vessels on the part of any such corporation in which the United States is then a stockholder shall cease and the said corporation stand dissolved. but the Merchant Marine Act, 1920 (sec. 12) lifted that limitation by providing that— the United States Shipping Board Emergency Fleet Corporation shall continue in existence * * * until all vessels are sold. And, under these basic statutory authorities, the Corporation was brought into being and has continued to function to the present time. While, as the Supreme Court of the United States in the case of the United States ex rel. Skinner & Eddy Corporation v. McCarl, Comptroller General (275 U.S. 1) stated: The Fleet Corporation is an entity distinct from the United States and from any of its departments or boards. the fact is that it functions only as an agency of the United States represented by the United States Shipping Board and along lines and within limits indicated and defined by that Board and by the Congress in the annual Independent Offices Appropriations Acts. It is organized along commercial corporate lines, much as would be any privately owned corporation engaged in the shipping business. A copy of its bylaws is enclosed. The reduction of both personnel and expenses of the Fleet Corporation has been so marked that a report of expenses as at any present date cannot serve as a proper indication of what expenses will be over future periods. For that reason, in the following report the salaries and wages of personnel are stated at their annual rate as of February 28, 1933, and the other expenses reported are those of our Budget estimates for the present fiscal year, these estimates so closely approximating the actual expenses for the 8 months which have passed that it has been deemed advisable to utilize them for the full year. They are based upon the assumption that our organization will continue substantially in its present form (but not at present size) to the end of the fiscal year. Personnel, salaries, and wages, etc., as at Feb. 28, 1933 This report does not include 124 employees, with annual salaries aggregating $347,400, assigned to the Shipping Board, which has reported upon them. Gross amounts of salaries and wages are given. Furlough and economy" savings are deductible therefrom. CORPORATE FUNCTIONS GENERAL The Fleet Corporation is charged with the performance (as to vessels and properties controlled by the United States Shipping Board or in which the United States, represented by the Shipping Board, has interest) of all functions incidental to the past and present operation, maintenance, repair, reconditioning, and construction of vessels; operation of all piers and pier facilities; leasing, rental, and operation of offices, warehouses, docks, and storage facilities; operation and sale of housing projects, real estate, railroad, and other similar property; sale of vessels; custody and sale of other property and materials; insurance of vessels owned by the United States (Shipping Board) or in which the United States has legal or equitable interest. The Shipping Board has reserved to itself the power to determine what lines shall be established or discontinued; to select the "operators" of lines and to determine the conditions of operating agreements; to prescribe the prices, terms, and conditions upon which vessels and real estate, etc., may be sold, and to accept or reject offers received therefor; to authorize and approve compromise settlements of matters involving in excess of $25,000; to authorize all modifications, extensions, etc., of sales and loans contracts; to authorize construction loans and expenditures of unusual nature and/or substantial amount; to lease piers or pier facilities and to authorize expenditures for the improvement of them; to limit personnel and to control litigation. The Fleet Corporation, in acting as to these matters, follows the specific authorizations and directions of the Board. Subject to the foregoing limitations the organization of the Fleet Corporation was responsible, as at December 31, 1932, for theControl and/or administration of— Cash and unrequisitioned appropriations-available for Realization upon notes, mortgages, and accounts receivable and Operation, maintenance, utilization and/or disposition (by sale of otherwise) of Ships, active and inactive....... Real estate and equipment used in operation (terminals at Operating supplies- Land, structures, and equipment for sale. Satisfaction and liquidation of accounts payable and other lia- Prosecution and defense of claims in favor of and against the Supervision and control of operations, fiscal and physical, of Maintenance of inactive (merchant type) ships of the Navy. $28, 226, 606. 26 59, 538, 101. 00 181, 998, 313. 25 46, 280, 641. 00 11, 232, 518. 58 1, 494, 400. 05 46, 123. 86 6, 387, 857. 25 85, 968, 995. 61 To discharge these responsibilities the Fleet Corporation has personnel at Washington, Boston, New York, Philadelphia, Baltimore, Norfolk, Charleston, New Orleans, Galveston, San Francisco, and London-all functioning in their respective departments of the organization as hereinafter indicated. DEPARTMENTAL AND DIVISIONAL BOARD OF TRUSTEES The affairs of the Fleet Corporation are managed by a board of seven trustees elected at the annual meeting of the stockholders of the Corporation. (All of the stock of the Corporation, except quali |