going to be an intolerable situation where you will not have any interest in dealing with the Maritime Board or the Government, either the construction program or the operating program. I hope they will bring some semblance of justice out of this controversy that has developed over the past year and will establish a policy so that a ship operator will know when he enters into a contract with the Government, he can plan on that contract remaining in effect without it being constantly brought into review. If the Maritime Board makes mistakes, there are means of handling that. That is the responsibility of the Board. As long as you give the Board the discretionary power, which they should have, you have to abide by their judgment. Mr. CLARK. It is very well observed, sir. Senator, that brings me to the end of one complete section of my testimony. I am at your disposal for such other questions as you may desire to ask. This ends my formal presentation at this time. Mr. DREWRY. Mr. Clark, we discussed the possibility of an error in one of your charts. For the record, would you refer to the particular ones? Mr. CLARK. The error in the chart was in the title, I believe. Mr. Stakem, will you make that correction? Mr. STAKEM. We are in the process of rerunning the chart. We found a second error in addition to the one that Mr. Drewry called attention to. His was on chart No. 19, where column (b) of that chart for each year was shown as "active" and column (c) as "inactive." That should be "foreign" and "domestic," column (b) being foreign and (c) domestic. A rerun is being made for that purpose. On chart 14, in 1951 they had privately owned ships inactive in column (c) way out of line. That should be a shaded area instead of a dark area, and the chart will be rerun to show that correction. Mr. CLARK. These charts will be fully corrected before they are given to the committee? Mr. STAKEM. Yes. Mr. DREWRY. I have a few more questions myself, and there were certain questions addressed to Admiral Wilson during his testimony which the admiral referred to Maritime as being the proper source for an answer. In view of the ringing of the bells, I think we'd probably better adjourn now. Would you be able to come back on Wednesday? Mr. CLARK. Yes, sir. Mr. DREWRY. If we do not have a chance to get into these questions, maybe they could be submitted for the record. I think it is better if you are questioned on them because they may raise further questions. We will not meet tomorrow. We will meet Wednesday, and Mr. Frazier Bailey, of the Federation of American Shipping, is scheduled to appear. If there is time after you have come back on the stand, and Mr. Bailey's testimony, Senator Ball, I believe, representing the Assosication of American Shipowners, will testify. On Thursday, we had originally expected to meet but will not be able to do so. We will take up again on Friday, if we have finished with the Federal Association of American Shipowners, the American Tramp Shipowners Association, with Mr. Riker Clark, to be followed by the CIO Maritime Union, with testimony from Mr. Hoyt Haddock, I believe. Then the following week, while it has not been set firmly, we expect to hear from the shipbuilders and the shipbuilding unions. If you can make yourself available on Wednesday morning, we will see you then. Senator POTTER. Mr. Clark, we regret we have taken so much of your time. I feel it quite essential that we make as complete a record as possible. I want to thank you for your patience with us and the work that you have put into your testimony. before you Mr. CLARK. It is always a pleasure, Senator, to appear and your committee, and we do not mind at all. time. Call us back any Senator POTTER. We are adjourned until Wednesday at 10 o'clock. (Whereupon, at 12:07 p. m., the committee recessed to reconvene at 10 a. m., Wednesday, July 8, 1953.) MERCHANT-MARINE STUDIES WEDNESDAY, JULY 8, 1953 UNITED STATES SENATE, SPECIAL SUBCOMMITTEE ON MARITIME, SUBSIDIES OF THE COMMITTEE ON The subcommittee met, pursuant to call, in room G-16, Capitol, at 10:10 a. m. Present: Senator Potter. Also present: Mr. John M. Drewry, special counsel to the subcommittee. Mr. DREWRY. The meeting is in session. Senator Potter is delayed, by virtue of having to go to the Rules Committee to seek additional funds to continue this investigation, so he asked that I continue with Mr. Clark until he returns. STATEMENT OF EARL W. CLARK, DEPUTY MARITIME ADMINISTRATOR-RESUMED Mr. DREWRY. Mr. Clark, you had completed your prepared statement on Monday, at our last meeting, but at that time there were still a few questions which we wanted to cover. At the close of your statement you mentioned that there had been certain instances in the past several months where tankers had been canceled. Could you tell us for the record what those vessels were and what the circumstances were, if you know? Mr. CLARK. Yes; I would be happy to do that. The Maritime Administration, as a result of investigation, transmitted to the Department of Justice for appropriate action reports concerning four companies. The first was the North American Shipping & Trading. Second, was United States Petroleum Carriers. Third, was American Overseas Tanker Corp. Fourth, the United Tanker Corp. The reports transmitted presented certain facts which indicated that perhaps certain laws of the United States had been violated by the above corporations in connection with the acquisition of vessels from the former Maritime Commission. The Department of Justice has filed libels for the forfeiture of some 19 tankers owned by the 4 mentioned companies or their affiliates. In addition, certain matters in connection with acquisition of these vessels had been presented to the Federal grand jury in the District of Columbia. Proceedings before the Federal grand jury resulted in the presenting of an indictment in one case. Now, in connection with the granting of authority under section 37 of the Shipping Act to construct vessels in this country and to transfer them to foreign flags during periods of emergency, the Maritime Administration has imposed three conditions. The first condition limits the right to transfer these vessels without the approval of the Maritime Administration. As the counsel well knows, section 37 of the Shipping Act comes into play during the period of national emergency, requiring that that restriction be effective. Secondly, we provided that the vessels be made available to the United States Government in case of emergency; and that, Mr. Drewry, falls under section 902 of the Merchant Marine Act, applicable in case of periods of national emergency. The third restriction that we imposed on these transfers was that the ships should not be used in trade in violation of the Department of Commerce transportation orders, T-1 and T-2. Those orders are now quite well known and are important ones among the shipping people and, of course, have to do with restricting trade which goes behind certain countries, behind the Iron Curtain. T-1 applies to certain countries generally, and T-2 applies to the China situation in general. Now, in connection with the above conditions, a bond is required. These conditions are similar to those which are imposed with any transfer. Mr. DREWRY. Excuse me, Mr. Clark. Is this leading up to the answer? Mr. CLARK. I am leading up to the direct answer of your question, the cancellation. These conditions are similar to those imposed with any transfer, to assure that the vessel will not get into unfriendly hands and will be available to the country in time of emergency. Now, Mr. Drewry, those conditions fall clearly within what we feel the Maritime Administration and also the Department of Commerce itself-are conditions that must be imposed during the present emergency. I am going to add this a little bit gratuitously, if you will permit me: It has been indicated to us on some occasions that there is harassment. My answer to that question is that if in enforcing the provisions of the 1916 act and enforcing the provisions of T-1 and T-2, which restrict trade to certain areas of the world, where those restrictions serve as a protection to the United States Government and to its people, if applying those provisions is harassment, then I shall have to plead guilty to this committee. We do not hold that it is harassment, but it is a true, direct, and proper exercise of the regulations and functions which devolve upon us in Maritime. As a result, however, of the application of these restrictions, we have had some cancellations on the part of companies who had formerly contracted to build some ships in this country, and I will now enter into the record those ships which have been canceled. At Bethlehem Quincy, one ship for World Tankers Co. That was being built for foreign flag. At Bethlehem Quincy, one ship for Orion Shipbuilding Co. That was for United States flag. |