SIGFRIED OLSEN FEBRUARY 18, 1945.-Committed to the Committee of the Whole House and ordered to be printed Mr. PITTENGER, from the Committee on Claims, submitted the following REPORT [To accompany H. R. 1566] The Committee on Claims, to whom was referred the bill (H. R. 1566) for the relief of Sigfried Olsen, doing business as Sigfried Olsen Shipping Co., having considered the same, report favorably thereon without amendment and recommend that the bill do pass. An identical bill was favorably reported by this committee, passed the House and Senate and was vetoed by the President in the Seventyeighth Congress. In the President's veto message he states "It appears that the claimant was not legally bound to make the voyages as to which the alleged losses were sustained." The committee realizes this point; however, had Mr. Olsen refused to make these trips his ships would have been requisitioned and he would not have had any chance whatever to recover. In the President's veto message he also states "it is believed that approval of the measure would create a precedent for the assertion. of similar claims." Mr. Radner, of the War Shipping Administration, stated before this committee in answer to a question: I would say that the Olsen case is peculiar only to the extent that we are dealing only with the charterer who took a licking in complying with our request, and those are relatively few. I do not know of any other case where a similar claim has been filed. In another paragraph in the President's veto message he states: It appears that Mr. Olsen realized a net profit on other voyages made by the ships in question during the period under the provisions of the Ship Warrant Act. It appears that this should have been taken into account in measuring the extent of the equitable relief to be accorded. It is the belief of this committee that Mr. Olsen was entitled to a reasonable profit on all trips and should not be penalized on account of small profits made on other voyages. [H. Rept. No. 1579, 78th Cong., 2d sess.) The purpose of the proposed legislation is to appropriate the sum of $48,562.35 to Sigfried Olsen, doing business as Sigfried Olsen Shipping Co., his heirs or assigns, as just compensation for actual cash losses necessarily incurred by him in the operation of two vessels to South America and return in the fall of 1941 in compliance with specific directions of the United States Maritime Commission, carrying in the interest of national defense cargoes specified and at rates designated by the Commission, out-bound and return. H. Repts., 79-1, vol. 1-50 STATEMENT OF FACTS In 1941 the claimant operated two vessels, the steamship James Griffiths and the steamship Stanley A. Griffiths. This operation was done under the direction and supervision of the United States Maritime Commission in connection with the war emegrency. There appears from the testimony before the committee that three voyages were involved. The first was a voyage from October 28, 1941, to November 14, 1941, from New Orleans to Cuba in ballast, and then from Cuba to the United States in which a cargo of sugar was carried by the steamship Stanley A. Griffiths, resulting in an operating profit of $1,242.76. It appears from the evidence that the United States Maritime Commission ordered and directed that this voyage be made although the claimant had requested permission to carry other types of cargo. This evidence appears from a telegram dated August 26, 1941, and was signed by a representative of the Commission who advised Captain Olsen that upon the discharge of the sugar the vessels, steamship Stanley A. Griffiths and steamship James Griffiths, must be available for the purpose of undertaking voyages carrying coal from a North Atlantic port to Rio de Janeiro, and return voyages with cargoes of manganese ore. The three voyages resulted in a net loss in the operation of these two vessels in the sum above named. The Committee on Claims has given careful consideration to the facts involved in H. R. 2825. Testimony was taken and Mr. William Radner, general counsel of the War Shipping Administration, and Mr. James L. Pimper, assistant legislative counsel of the Commission appeared before the committee. Likewise the claimant, Sigfried Olsen, also gave testimony in substantiation of his claim. After hearing the witnesses, and considering the evidence, the above report was adopted by the committee. Mr. Olsen, in effect, made these voyages at the direction of the United States Maritime Commission. Had he failed to make these voyages your committee is of the opinion that the Maritime Commission would have taken over the boats and would have made a profit of $1,245.76 on the one voyage, and would have sustained a loss of $49,808.11 on the other voyages. In other words, the operating loss, if the Maritime Commission had conducted these operations, would have been exactly the same as that sustained by Mr. Olsen. We are not unmindful of the fact that the report of the United States Maritime Commission recommends against enactment of this legislation at this time, and they do so on the theory that this might set a precedent for other claims. The testimony before the committee, however, did not indicate that there were other claims of this character. Consequently, your committee believes that no precedent for payment of damages incident to loss by individuals on account of changing from a peacetime economy to a wartime economy is involved in this legislation. It is true that the Maritime Commission report suggests that Mr. Olsen conducted other operations, on some of which he made a profit and on some where he sustained a loss. Those operations, however, were different in character from the ones involved in the pending legislation. They were not carried on under compulsion, but it is clear from the testimony that in connection with three operations, Mr. Olsen had no alternative. He either had to comply with the directions of the Maritime Commission officials, or else he would get no more permits for voyages, and the Commission would take over. It is significant that when these voyages were completed, the Commission did requisition the boats in question, and left Mr. Olsen with a number of unpaid creditors. In order to save the expense of printing various exhibits, including printing of the testimony, this is omitted from this report, but same is available in the files of the Committee on Claims. Going further into detail the testimony before the committee shows, with no contradictions, that Mr. Olsen had chartered these vessels from the owner and was operating them at a profit. On May 27, 1941, the Presidential declaration of unlimited national emergency was issued and the Maritime Commission immediately proceeded to direct the operators of vessels as to the nature and kind of cargoes they could carry, the destination, etc. From that date they had to submit for approval by the Maritime Commission whatever voyages they wanted to undertake. Previous to the two voyages involved in this bill, Mr. Olsen's company was engaged very largely in shipping of supplies, lumber, cement, etc., for the benefit of the War Department and contractors who were engaged in building various Army and Navy bases. On June 14, 1941, the Ship Warrants Act was passed which placed jurisdiction over shipping as a war measure in the War Shipping Administration. Admiral Land is Chairman of the Maritime Commission and Administrator of the War Shipping Administration and apparently the two agencies were operated as one. The same administrative personnel is employed. The voluminous correspondence and data submitted to the committee shows that Mr. Olsen submitted various proposed voyages. and was uniformly told that his proposals could not be approved because the two boats referred to in this bill were earmarked for other purposes. Mr. Olsen sometime previous had chartered two boats and was under a liability of $1,100 per day for each boat and other expenses and of course, it was necessary for him to keep these boats in operation because of this liability. In August 1941 the Maritime Commission requested that one of these vessels, the steamship Stanley A. Griffiths, undertake a carriage of manganese ore from Cuba to an American port. In view of the fact, however, that no ore was immediately available, the carriage of a cargo of sugar from Cuba to an American port was authorized upon the condition that upon the discharge of the sugar the vessel would be made available to carry a cargo of coal from Norfolk to Brazil and a return cargo of manganese ore from Brazil to Baltimore. A month later the same procedure was followed with reference to the steamship James Griffiths. Both of these voyages were undertaken in accordance with specific direction of the Maritime Commission and the cargoes carried were for the account of shippers designated and specified by the Maritime Commission. These materials were very essential on account of the war emergency. At that time mines were being closed in Brazil because of lack of coal and there was of course, a shortage of manganese ore in the United States and this was very badly needed in connection with our war program. Without going into details, both of these voyages were undertaken and successfully completed and the evidence before the committee shows that Mr. Olsen suffered a loss of $49,808.11. We have already referred to the report of the Maritime Commission which suggests that Mr. Olsen made a profit on some other voyages and rather implies that this is a reason for not recommending approval of this bill "at this time". The Commission had specified earlier in 1941 the charter rate which Olsen was authorized to pay for these vessels, namely, $1,100 a day for each vessel. Upon the occasion of the two voyages in question the Commission fixed the freight rate which the vessels could earn in undertaking the trips to Brazil and return. Hence, both the principal items of expense and the measure of the only revenue possible to these vessels were controlled and specified by the Maritime Commission. Mr. Olsen had no choice in the matter and if he had not carried out the directions of the Maritime Commission they could have immobilized the vessels. In other words, they could have refused to issue warrants and Mr. Olsen would have been faced with a liability of $2,200 a day and other expenses and no permission to carry cargoes. It is significant to note that Mr. Olsen pointed out that he did not want to use these vessels for these particular voyages. The fact is that this type of vessel could not be profitably used in voyages of this nature. Mr. Olsen proposed other voyages more in keeping with the nature of his transportation business, but could not get the approval of the Maritime Commission because they advised him that these ships were earmarked for the carrying of coal and manganese ore. The fact is that Mr. Olsen in effect had to operate his boats under the direction of the Maritime Commission or not operate at all. The entire transaction was under the control of a Government agency, and to all intents and purposes these particular voyages, Olsen acted exactly as the Maritime Commission would have, if it and not Olsen had possession of the vessels. He rendered a highly patriotic service and it is the opinion of your committee that the report of the War Shipping Administration recongizes this fact. Relative to the suggestion in the Maritime Commission report that Mr. Olsen made a profit on some voyages at other times, it is proper to state that no provate individual is required to carry on transactions for the Government at a loss. The voyages where his profit was made were made by Olsen on his own responsibility and not by the specific direction of the Maritime Commission. One of these voyages, where a profit was made, was actually made between two foreign countries with a Yugoslav ship, operating under a foreign flag. It should also be noted that Olsen sustained losses on some of his ventures and had to depend on a profit on other ventures if he was to continue in business. It should also be noted that Mr. Olsen is suffering from a legal technicality which is admitted by the Maritime Commission in its report to the committee. Had it not been for the fact that not being the owner, he chartered these vessels, he would have been able as owner, to recover his losses under the law. In other words, had he been the owner of these vessels there would have been a legal basis whereby the Maritime Commission in all probability would have paid a specific charter hire and all expenses of the vessel, and in event of any losses incurred, would have met such losses. It is significant to note that upon the return from these two voyages, the ships were promptly requisitioned under the Ship Warrant Act and since that time have been operated by the United States War Shipping Administration, and Mr. Olsen was thereby put out of business and deprived of any income whatever from his ship operations which up to that time had been his means of livelihood. As matters now stand, unless his claim is paid, he is out of pocket $48,562.35. We do not believe that the Maritime Commission wishes this result to obtain, and we feel certain that the Members of Congress want to take fair and equitable action under these cir cumstances. Therefore, your committee recommends favorable consideration to the proposed bill, as amended. Appended hereto is the report of the United States Maritime Commission, together with other pertinent evidence. Hon. DAN R. McGEHEE, UNITED STATES MARITIME COMMISSION, Chairman, Committee on Claims, House of Representatives. DEAR CONGRESSMAN MCGEHEE: You have requested the views of the Maritime Commission on H. R. 2825, a bill "For the relief of Sigfried Olsen, doing business as Sigfried Olsen Shipping Co." The bill would authorize the Secretary of the Treasury to pay to Sigfried Olsen, doing business as Sigfried Olsen Shipping Co., his heirs and assigns, the sum of $49,808.11 for losses alleged to have been sustained by him in the operation of two vessels (the steamship James Griffith and the steamship Stanley A. Griffith) to South America and return in the fall of 1941, in compliance with specific directions of the United States Maritime Commission, carrying, in the interest of national defense, specified cargoes at rates designated by the Commission. Inasmuch as the authority vested in the Maritime Commission by the provisions of the so-called Ship Warrants Act (approved July 14, 1941) has been transferred to the War Shipping Administration, the views expressed herein are those of the War Shipping Administration as well as the Maritime Commission. The facts in connection with the vessel operations in question may be summarized as follows: STEAMSHIP "JAMES GRIFFITH" On June 9, 1941, the Coastwise Steamship & Barge Co., owner of the vessel, submitted to the Maritime Commission for approval a copy of a charter of the vessel to Sigfried Olsen for a period of 180 to 200 days at the rate of $1,375 per day (approximately $8.25 per deadweight ton per month), the vessel to be placed at Olsen's disposal between the 5th and 25th of August 1941. The Commission stated it would approve the charter provided the rate was reduced to $6.60 per deadweight ton per month. The rate was changed accordingly to $1,100 per day, and as changed, approved by the Commission. On September 20, 1941, following the enactment of the so-called Ship Warrants Act (approved July 14, 1941), Olsen requested the Commission's approval of a charter for a cargo of sugar from Peru to Galveston, Tex., and New Orleans, at the rate of $14.50 a ton. About the same time he applied to the Commission for a warrant to be issued in accordance with the provisions of the Ship Warrants Act, and executed in connection with the issuance of such warrant an undertaking wherein he agreed, among other things, to divert the vessel from its route to the extent necessary to transport materials specified by the Commission, to operate the vessel on routes specified, and to enter into no charter at rates in excess of those fair and reasonable rates prescribed by the Commission. The charter was approved and a warrant issued to Olsen on October 2, 1941, this warrant entitling him to priority as to certain services and facilities essential to the vessel's operation. On October 10, 1941, the Commission wrote Olsen requesting that it be advised of the next employment of the vessel in order that "we may pass on same." |