you are not authorized to arrive at. But you can certainly give us a constructive hand in coming up with language that you think might fit. Then we will take the responsibilty for putting it together in final form and give you an opportunity to go back to you own people to be sure we have it right.

I would like to do that. And if you can meet this afternoon with Mr. Webster or at some convenient time, I will try to get time and come over and sit down with you. I would like to do that.

Mr. JAMES. That is fine.

Mr. BJÖRKLUND. Mr. Chairman, I would just like to say what Mr. Keville said about the British Government, that they don't interfere with the shipping industry. I think the same goes with the Swedish Government. They have not, as far as I understand, found that conference system is against the Swedish interests, the interest of the Swedish public and they do not interfere with Swedish interests in that respect, and I doubt if they would like to take part in a conference regulating international shipping.

Senator ENGLE. This is the kind of information we need.

Mr. GRENANDER. Mr. Chairman, may I add one thing. We have an international organization called "The Intergovernmental Consultative Maritime Organization" with IMCO. In the statutes of IMCO, there is a provision saying that this international organization can handle commercial shipping matters and also technical and nautical shipping matters.

The commercial shipping matters named in the convention are liner conferences and when this international convention came into being in 1948, there was a quite a struggle about this provision dealing with liner conferences. It took about 10 years before a sufficient. number of governments had ratified the convention. And when doing so, many governments made reservations about the possibility for the IMCO to deal with commercial shipping matters.

I know that the Swedish Government and also other governments have stated that if there should be an international organization on the governmental level dealing with economic or commercial shipping matters, then the Swedish Government and also these other governments would have to think about leaving the IMCO. Therefore, Mr. Chairman, I think it would be somewhat dangerous to have the governments taking part in a conference of the sort you have suggested before and I think if we make it on a more informal basis, and on a private level, that would bring the result. I am quite sure that in my country, shipowners would be quite willing to cooperate in the direction you have suggested.

Senator ENGLE. Thank you very much. We will start the conference right away before you leave for your homelands so that while. you are here we can at least get the framework of this bill together.

Our problem is that the Supreme Court cast doubt on the legality of these conference rate systems. We passed a bill that said the decision would be suspended for a while. Now that expired on the last day of June. We then extended it to the 15th of September and we are being pounded over the head to come up with a bill between now and then. I am not sure we can.

It seems to me if we could get the framework of a bill and put it together and take the House bill and amend it and send it back to them, if they want to argue extensively with us about it, they can give an extension of the present moratorium until such time as we can come up with an agreement between the two Houses on this legislation, because it is perfectly obvious that we are not going to agree at the present time.

The people over on the House side seem to think that you can enforce the antitrust laws in an area where you have a monopoly indicated as the best method of doing things. And in addition to that, we have other people who seem to think that the U.S. Government can extend its regulatory powers into the foreign countries of the foreignflag lines.

Now on those two issues, we are absolutely at odds. In the first place, it is my opinion, and I think it will be the opinion of this committee, that the conference system is necessary. The conference system is inherently monopolistic and as a consequence, you can't authorize monopoly and turn around and deauthorize it. No. 2, we can't extend into foreign countries the regulatory power of the United States over foreign-flag lines. We have to get an agreement on those two points. But, if you can sit with us this afternoon or sometime before you leave, at your convenience, with Mr. Webster, and whatever other help we can get in here, we will try to get some language together and start to move.

Mr. JAMES. Can we do it this afternoon, Mr. Engle? Some of these gentlemen have their reservations. This afternoon would be ideal.

Mr. WEBSTER. Certainly. As far as I am concerned I will make myself available at any time that is convenient to the parties at interest, to you, Mr. James, and the people whom you represent, and if the others wish to join in that, or meet separately at times convenient to them, I am sure we can do as Senator Engle suggests, and make some progress in this.

Senator ENGLE. I will ask Mr. Webster to get together with you. informally. This will be of great benefit to us, and I hope that Mr. van Houten will be able to meet with us, too.

Mr. VAN HOUTEN. May I suggest at 2 o'clock, because we are all leaving tonight by plane.

Senator ENGLE. That will be excellent. If you will tell me where the meeting is I will try to get over this afternoon.

Thank you, gentlemen, very much.

We have one other group of witnesses, Mr. Georg Andersen, director and general manager of the Maersk Line, appearing for Danish Shipowners' Association, accompanied by Mr. Niels Kamper, director, Danish Shipowners' Association, Mr. Per Schmidt, assistant to Mr. Andersen, Mr. Charles S. Haight, Esquire, and Mr. Thomas K. Roche, Esquire, partners, Haight, Gardiner, Poor & Havens, counsel, Danish Shipowners' Association.

Mr. Andersen, I observe you have a statement here. You may either read it or submit it for the record as if read and summarize it, as you choose.

STATEMENT OF GEORG ANDERSEN, DIRECTOR AND GENERAL MANAGER, MAERSK LINE, APPEARING FOR THE DANISH SHIPOWNERS' ASSOCIATION; ACCOMPANIED BY NIELS KAMPER, DIRECTOR, DANISH SHIPOWNERS' ASSOCIATION: PER SCHMIDT, ASSISTANT TO MR. ANDERSEN; CHARLES S. HAIGHT AND THOMAS K. ROCHE, PARTNERS, HAIGHT, GARDINER, POOR & HAVENS, COUNSEL, DANISH SHIPOWNERS' ASSOCIATION

Mr. ANDERSEN. I have no desire whatever to read it, Mr. Chairman. Senator ENGLE. You have no desire to read it. Then without objection the statement will be made a part of the record as if read. Mr. ANDERSEN. Yes, please.

(Full text of statement follows:)

Mr. Chairman, and members of the committee, my name is Georg Andersen. I am a subject of Denmark and an executive of the A. P. Moller concern which operates the Maersk Line. I joined the concern in 1922 as an apprentice and have been working for it ever since, with the exception of a couple of years spent abroad. Since 1945, I have been and still am general manager in charge of all Maersk Line services. The Maersk Line is a member of about 67 conferences and agreements, of which 27 serve the United States.

I have come from Copenhagen, together with Mr. Niels Kamper, director of Danish Shipowners' Association, and Mr. Per Schmidt, my assistant.

I am accompanied by Mr. Charles S. Haight and Mr. Thomas K. Roche, of the firm of Haight, Gardiner, Poor & Havens, 80 Broad Street, New York, counsel for Danish Shipowners' Association.

In addressing the committee I am not using my mother tongue, and for any errors in grammar, pronunciation or expression which do not cover the full meaning of what I have in mind, I ask your forbearance. Also, I was on vacation when my Danish colleagues honored be by asking me to undertake this voyage and, therefore, have had little time to prepare myself.

I speak here on behalf of Danish shipowners, naturally including the Maersk Line. The Danish owners have asked me to convey to you their sincere appreciation of your kind invitation to appear.

The Kingdom of Denmark is an old country, and its seafaring tradition goes back many centuries. It is not large and has no natural resources like eoal, ore, oil, timber or water power, but must find its living on farming, industry and shipping. Counting tonnage per inhabitant, Denmark ranks among the leading maritime nations of the world, and shipping is a factor of vital importance to the Danish economy. Danish shipowners enjoy no cargo preference in trades to and from Denmark, nor do they receive any subsidies, but must stand on their own feet. To a very great extent Danish shipping is employed in trades not touching Denmark.

Danish owners maintain regular services practically all the world over and are, therefore, greatly affected by any American legislation which pertains to international trade.

Danish shipowners have for many years taken part in providing space for imports of goods into America and exports of American goods to many countries. For instance, the United Steamship Co. has been operating for 65 years; the East Asiatic Co. for over 45 years, and the Maersk Line for more than 30 years. They have served shippers before and during the depression of the early thirties. During the Second World War, even before Pearl Harbor, the Danish tonnage in the United States was made available to the U.S. Government. Thus, Danish ships served the common cause during the last war and arrangements, as you know, have been made for them to serve in future common causes.

The Danish Government and the Danish owners view with considerable anxiety the proposed bill, H.R. 6775. The bill aims at further regulation of the foreign trade of the United States, i.e., the import of foreign goods into the United States and the export of American goods to foreign countries. The Danish owners believe that the very words "foreign trade" indicate that it is not alone an American affair. In each case, another sovereign

nation is involved to the same extent. Danish owners fear that foreign countries may react in the following way: "If the American Government can legislate about foregin trade, so can we," and the Danish owners would then find themselves one day in a postion where they have an American law and a conflicting law of the foreign country. Now then, being law-abiding people, which law should we obey? The bill also aims at regulation applying to transportation on the high seas. You will understand that Danish shipowners are very concerned about the attempt by any one nation to impose its will on international transportation on the high seas. We respectfully submit that no country is entitled so to do.

The proposed bill concerns the entire conference system. Danish shipowners believe that conferences are an essential part of the task of properly serving international trade. We are upholders of the conference system. We believe that the conference system is in the true interests of merchants and shipowners and, therefore, in the true interest of international commerce including the commerce of the United States.

We are aware that the conference system has been criticized by some, but we firmly believe that a close study of the history of the conferences serving the trade to and from the United States will show that the system has been a good one and has been very valuable to the commerce of the United States. It places at shippers' and consignees' convenience regular service maintained by well-trained, knowledgeable and experienced people at sea and on shore. It gives the shippers and consignees the choice of picking the ship which is most suitable to them in position of loading dates and arrival dates at port of destination. It gives them the benefit of stable rates and equal treatment of all shippers and consignees. The conference lines carry all kinds of cargoes offering, be it well-paying or low-paying cargo, and many, in fact I believe most of the ships are specially built for the convenience of the trade with special equipment for deeptanks for the carriage of oils, special compartments for refrigerated cargo, strong-rooms for valuable cargo, special deck heights, and special gear to accommodate heavyweight cargo. All these features, which are very costly, are for the convenience of shippers and consignees, and are regularly furnished during good times and bad times. To operate a regular liner service requires a number of ships, not just one or two, and costly organizations and facilities ashore. This means a substantial investment by the shipowner for a special trade, and such investment can only be made when the shipowner has reasonable prospects of obtaining fair and reasonable support by the shippers.

I firmly believe that to provide proper liner services over a long period, in good times and bad, with the high quality of fast tonnage that American importers and exporters desire, there must be conferences with some form of dual rate system that assures stability and provides for the conference lines some measure of knowledge of the extent to which they can count on shippers' and consignees' support, which is essential also for proper long-range planning. In the alternative. I fear that the present conferences cannot continue to exist, and the result can only be chaos, to the detriment of shippers, consignees and shipowners alike.

I believe the committee would like to have my views on H.R. 6775 as referred to the committee. I would, however, like to say that I am restricting myself to certain points only, which in the limited time available appear to me to be the most obvious ones.

I have already expressed my views on the necessity of some protection for the conferences, and I feel that the provisions of H.R. 6775, to which provisions I have just referred, are much too far-reaching and difficult of construction to be of any material remedy for the conferences.

On the fact of it the bill seems to permit the use of a dual rate system, but so many restrictions and exclusions are embodied that I think the aim is defeated.

I refer to the language contained on page 2 of the bill in lines 10-12, which makes the legality of a dual-rate system contingent on a finding by the Board that the system is not intended and will not be reasonably likely to cause the exclusion of any other carrier from the trade, and to the similar language contained on page 3 of the bill in lines 20-22-"that the use of such contract tends to cause the elimination from, or prevent the entry into, the trade of any carrier" and page 5 in lines 24 and 25-"whose probable effect will be reasonably likely to exclude any other carrier from the trade."

The foregoing provisions in the bill would make impossible, in the opinion of Danish shipowners, the carrying on of any dual-rate system.

I fail to see how any contract/noncontract system could be devised which would not have some effect on those lines who prefer to operate outside the conference in a given trade. The very object of the dual-rate system is to enable conference members to be reasonably assured of some support of shippers and consignees. In my opinion, the benefits that shippers and consignees as well as the regular operators gain from the conference system outweigh the possible effect of the dual-rate system on lines who prefer to operate outside the conference. It might well be argued: Why should a line which by its own free will chooses to operate outside the conference be entitled to special consideration? He is not like conference members who are bound to quote the same rates to all shippers, as he can at any time he chooses alter his freight rates from sailing to sailing. He uses the conference tariff as an umbrella, and he is by no means bound to it. He does not participate in the sometimes rather heavy cost of running a conference.

The conference members are generally required to supply their own tonnage, whereas the outsider can take whichever ship suits him on time charter, and use it as long as he pleases-and if he sees prospects of employing his tonnage more profitably elsewhere, there is nothing to stop him from just shifting over to another trade.

To give you an example of what conditions are today, outsiders fill their vessels from Japan to this country with up to 10,000 or 11,000 tons just by underquoting the conference rates, whereas the conference members are lucky if they can get 3,000 or 4,000 tons-and then they must watch their vessels sail with empty space. Turning to page 2, lines 22-24, dealing with the f.o.b/f.a.s. problem, this is not a new problem, but one which has been faced by practically all conferences. While I agree it is not an easy one, I do not think it is an unsolvable problem. Perhaps it is of a nature which should no be regulated by law.

In my opinion, the shipper's contract with the conference should be made as clear and concise as possible and the shipper should be entitled to release from his conference contract only in cases where he has, prior to shipment, proved to the satisfaction or some impartial party that he, the shipper, cannot possibly reconcile his obligations to the purchaser of his goods with his obligations under the conference contract.

I will now proceed to the provision on page 3, lines 15-17, stipulating that the shipper's contract shall contain such other provisions not inconsistent herewith as the Board shall require or permit. It is essential, we believe, that the provisions in regard to an acceptable dual-rate system be clearly set forth and specified in the bill itself. Otherwise, great uncertainty will no doubt be the consequence, and we would much prefer that the provisions on the dual-rate system are contained in law.

Referred to the requirement of providing records or other information wherever located-page 6, lines 10-14, and page 13, lines 4-8-I must say that the Danish owners are absolutely opposed to these controversial provisions. The Danish Government has already protested officially twice, and has expressed the sincere hope that the U.S. authorities in the interest of harmonious international relations will refrain from enacting these provisions. The seriousness with which the Danish Government views the matter is shown by the statement of the Government in its aide memoire, dated June 9, 1961, that "in the circumstances the Danish Government may feel obliged to take measures similar to those already taken by a number of other countries to restrain Danish companies from compliance with such orders."

The seriousness of this international question is emphasized by the fact that some 12 foreign nations have protested against this provision in the bill.

The Danish owners are fearful that in these days of rising nationalism— especially amongst the new sovereign states-similar demands may be made by other nations which might result in conflicts of jurisdiction, and at the very least would impose upon owners an extremely burdensome and virtually impossible task.

I furthermore suggest that the United States with its big commercial interests and investments in foreign countries may wish to resitate to introduce provisions of this sort in its national law. This may very well turn out to be a boomerang. As mentioned above, other countries will be encouraged to follow the example of the United States and to introduce similar or even more far-reaching provisions in their national laws, and considerable damage to American interests