of all the dollars expended for liner services by the agency for the period April 1948 to June 1952 have gone to American-flag operators. Mr. DREWRY. How does that stack up on the 50 percent? That is considerably more than 50 percent in money, is it not?

Colonel SYRAN. The explanation for that is this: While we have attained 50 percent we do not pay, for instance, a French vessel tarrying goods from the United States to France. The theory was that we would pay dollars where dollars were required. But since the operating cost in the main of a French vessel was in francs, we do not pay dollars to that nation.

We only pay, shall we say, to an English vessel or a Norwegian vessel on this berth service, if it should carry goods from the United States to France. There the normal custom of the trade requires the dollar payments.

So there is this 84 percent which has gone to American-flag operators in tonnage which represents only 50 percent, or thereabouts.

The biggest portion, of course, of this has gone to American operators on shipments ex-the United States.

You will see that the amount of money diminishes as the program diminished. From April 1948 to June 1949 United States flagberth line operators received in round numbers $57 million. In the fiscal year 1949-50, it received $51 million; the fiscal year 1950-51, $41 million; and in the fiscal year 1952, $31 million.

So it drops from $57 million down to $31 million, making a total of $181 million of shipments ex-the United States.

Senator POTTER. In projecting to the future, do you anticipate this type of cargo will decrease or increase?

Colonel SYRAN. Sir, there has been the tendency in this kind of program to go away from low-cost, high-volume and weight cargo, such as coal and grain, to more expensive cargo of less cubic in weight. Senator POTTER. While the dollar value may increase, the cargo requirements may decrease?

Colonel SYRAN. Precisely. As an actual fact, that has continued, where I believe 3 years ago the average value of the berth-line cargo was approximately $250 a ton, valuewise, it is now running around $900 a ton, valuewise.

This is offset, of course, by the large volume of coal and grain that was shipped during certain periods, not sold today, but a year and a half ago it was in great volume, from June of 1950, until about April of 1952.

Mr. DREWRY. You say you are not prepared with the figures of the bulk cargo and the tankers. Could you supply them for the record, because we are interested in looking at the overall requirements?

Colonel SYRAN. Yes, I will be glad to give you a schedule on those. Senator POTTER. Without objection, the material will be inserted in the record at this point.

(The material referred to follows:)

1 No data available prior to Korean outbreak. However, it is estimated very little paid to tramp or tanker vessel.

PAYMENTS TO TANKER VESSELS

Mr. DREWRY. There are proposals, or rumors of proposals, that would indicate that aid to tramps, for instance, may be projected in the near future. We would want to see what the situation was in that regard.

Colonel SYRAN. Very good. Senator, I would like to add one thing more in this study that you are making.

Senator POTTER. We are happy to have your comments.

Colonel SYRAN. This 50 percent provision is in the nature of a subsidy. There are other statutes involved in this, which you no doubt are familiar with. It is in the MDAP law. It is in the old 1904 defense law for defense activities, and the like. I think, in my personal opinion, that no real approach can be made to the subsidy question without recognizing the other facets that have a direct bearing on this subject, because subsidy alone may establish parity, but the absence of business itself, with all these other statutes, does not give the complete picture.

I think sometimes people are prone to neglect them a little bit. Senator POTTER. I am glad you emphasized that because it is true that, while the subsidy program is for parity, other factors can enter in, which is part of the law.

Colonel SYRAN. You have the MSA law, the MDAP law. There is a 1904 statute which controls the Defense Department shipments. So that you have troop-support cargo going on American lines, as Admiral Wilson testified, as well as the MDAP cargo. There is the Technical Cooperation Administration. Then, there is the Public Resolution 17 of the Export-Import Bank. You have a number of these. I assume that Maritime has the information. Unless all of them are looked at at one time, one doesn't get the full understanding of the various facets.

Senator POTTER. We will take that up with the Department of Commerce and the Maritime people when we further resume our hearings. It is a good suggestion.

We have nothing else, Colonel. I want to thank you for taking the time to come up and to be with us. This concludes the preliminary study.

Mr. KLEMMER. Mr. Chairman, I think I should bring you up to date on that construction subsidy determination. As of now, they have a totally different approach to it. The matter of getting the price of ships is no longer germane, because they are using a different system over at Maritime. They are breaking down ships into a lot of component parts. Our present operation is giving them the price of those parts, like winches, propellers, steel, wage rates, and productivity, and all that. So that we are no longer getting the price of ships from shipyards; so the matter of whether or not they were in collusion wouldn't arise now. I didn't want to leave you with the wrong impression on that.

Senator POTTER. Mr. Drewry.

Mr. DREWRY. Mr. Chairman, before you adjourn, I would like to suggest that we insert in the record this statement of Admiral Nimitz in connection with the television program, Victory at Sea. Senator POTTER. It is so ordered.

(The material referred to follows:)

DESIGN FOR PEACE

Statement of Fleet Adm. Chester W. Nimitz, United States Navy

In Victory at Sea, your television has presented the pictorial history of your Navy in World War II. You have seen how prewar neglect and parsimony aided the enemy to inflict staggering damage. You know the high cost of ultimate victory. World conditions today are no less sinister than in those prewar days.

The National Broadcasting Co., in cooperation with the Navy, has brought you this authentic story to provide a clearer understanding of the vital significance of seapower. Every concept of our military security rests on the assumption that the United States will control the seas in times of emergency. The foundation of our national security is seapower, in all its forms, all its weapons-submarine, surface, aerial, and amphibious assault. We hope that victory at sea, by showing the successive steps against aggression that forced the enemy's surrender on the battleship Missouri, has demonstrated that seapower is a tremendous instrument of national strength.

Adequate seapower insures that no future war will be fought on American soil. Seapower extends America's peaceful frontiers to the opposite shores of all oceans. Seapower, useful in countless ways, brings the world's products to our shores. That is the message of Victory at Sea, for victory at sea guarantees peace ashore. Senator POTTER. We plan on resuming our hearings, probably, within a couple or 3 weeks. The plan, now, will be that they will be on more specific phases of the maritime problems than have been enunciated here. We anticipate there will be open hearings.

Thank you, gentlemen, for being here. You have been very kind, indeed.

(Whereupon, at 4:30 p. m., the subcommittee adjourned.)

MERCHANT MARINE STUDIES

TUESDAY, JUNE 16, 1953

UNITED STATES SENATE,

SPECIAL SUBCOMMITTEE ON MARITIME

SUBSIDIES OF THE COMMITTEE ON

INTERSTATE AND FOREIGN COMMERCE,

Washington, D. C.

The subcommittee met, pursuant to call, in room G-16, Capitol, at 10:06 a. m., Senator Charles E. Potter presiding.

Present: Senators Potter, Pastore, and Smathers.

Also present: Mr. John M. Drewry, special counsel to the subcom

mittee.

Senator POTTER. The subcommittee will come to order. The other two members of the subcommittee are not present at the moment. Senator Butler of Maryland has not arrived as yet. He may be here a little later. Senator Magnuson happens to be out of the country at the present time. If you will bear with me, we will have a one-man subcommittee at the present time.

Since this is the first public hearing to be held by this subcommittee, I think it is desirable to make a preliminary statement in regard to our studies before hearing the first witness.

As you all know, in April, Chairman Tobey, of the Interstate and Foreign Commerce Committee, appointed this special subcommittee on maritime subsidies to make a study and analysis of constructiondifferential and operating-differential subsidies in the maritime field.

In a letter to Secretary Weeks of the Department of Commerce, under date of April 24, 1953, I attempted to outline, in broad fashion, the scope of our inquiry. Within the area covered in our letter to Mr. Weeks, we wrote, also, to Secretary Wilson of the Defense Department, Secretary Dulles of the Department of State, and the Honorable Harold Stassen, Director of the Mutual Security Agency, to request their respective views on the aspects of merchant shipping with which they are most vitally concerned and interested. Before these studies are over, we will want to have the views of other Government agencies such as the Treasury Department, the Comptroller General, and others, when the appropriate times arrive.

We wrote, first, to the above-mentioned Government agencies because of the apparent fact that the United States must have a merchant marine to meet its essential potential national-defense needs and carry its essential commerce. Therefore, we want the departments of the Government which are concerned with these problems to tell us how they view the national needs from their standpoint.

For years, representatives of the shipping and shipbuilding industries have been proclaiming to Congress the importance to the national defense and our national economic policy of a healthy maritime in