Admiral COLLINS. From the viewpoint of the Navy, Mr. Chairman, there is no difference.

The CHAIRMAN. I understand. I appreciate that, but you say that there is no shortage of tankers in the reserve fleet.

Admiral COLLINS. That is right.

The CHAIRMAN. There seems to be a tremendous interest in the building of new tankers.

Admiral COLLINS. Yes, sir.

The CHAIRMAN. There seems to be more effort being placed behind that. Of course, it is through the operation of the Maritime Administration to a great extent that these tankers are being rapidly contracted for or under construction now or receiving a little more attention than the vessels that you say we need.

Admiral COLLINS. That is correct, sir.

The CHAIRMAN. Why is that?

Admiral COLLINS. I think primarily the Suez situation has motivated the construction of tankers. I would like to pass this question to Admiral Will who, I think, is better acquainted with the details.

Admiral WILL. Mr. Chairman, I think that the tanker requirements and the shortage of tanker requirements is one that we are faced with under normal operating conditions actually in peacetime.

The CHAIRMAN. If I understood the main witness, I understood him to say there was no shortage of tankers.

Admiral WILL. There is no shortage of tankers on mobilization because I think that you will have a rationing of petroleum products, and the normal economy and the military requirements will be taken care of. You have your ships under effective American control. The tankers are under effective American control in the number that will be taken over. I do not think you will have any shortage at that time.

Mr. ALLEN. Mr. Chairman, will you yield?

The CHAIRMAN. Yes, Mr. Allen.

Mr. ALLEN. Admiral Will, as I remember the testimony of Admiral Denebrink on this subject, at one time he said that there would possibly be enough tankers for the military needs or enough for the domestic needs, but not both. I am wondering whether in your statements that say there is no deficiency in tankers there is, in addition to the Navy requirements, the consideration of the tankers which normally supply the New England coast, for example, with domestic needs, particularly in the wintertime.

Admiral WILL. Yes; I think those are included. I think actually Admiral Gano, who has been involved in drawing up this report and whose committee, together with MARAD, have determined the requirements and arrived at the conclusion that there is no tanker deficiency, could probably better answer how that decision was arrived

at.

Mr. ALLEN. Thank you.

The CHAIRMAN. In your general statement there is one subject in which I have been interested. What is your policy on speed? That has been boxed around here quite a bit. One operator is allowed one speed and one is allowed another. One says this speed does not suit.

his trade. Another man gets a certain speed. Maritime says that the Navy controls this speed question. Would you discuss that?

Admiral COLLINS. Our requirements, Mr. Chairman, are as much speed as we can get in any ship which may ultimately have to be used. The CHAIRMAN. You are like these fellows about whom they are complaining in the drag racing on the highways. You want as much speed as you can get.

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Admiral COLLINS. We want it for two reasons. One is because if ship is converted to a Navy auxiliary it must be capable of keeping up with the other elements of an amphibious group. We want it for another reason. If this ship must be protected in convoy or sail singly in time of war, the more speed it has the better chance it has of evading submarine attacks, so that our policy is to get as much speed as we can in each ship. We have an agreement here with Mr. Morse, signed by the Secretary of the Navy, which states that we would like to get at least 18 knots in each ship that is built and as much as 20 for amphibious ships. We do not demand that this amount of speed be placed in each ship, but each case is decided on its merits and, if a construction subsidy is involved, the Secretary of the Navy considers the ship as an individual case to approve for the Navy the speed which it proposes to put into the ship. If there is no construction subsidy involved, the Maritime Administrator makes the determination on what is acceptable.

The CHAIRMAN. Last night on the news broadcast it was said that you are going to have submarines that go 60 miles an hour under the water. What effect is that going to have on speed eventually?

Admiral COLLINS. Well, it will make it very difficult for a merchant ship traveling at 20 knots to evade a submarine under those conditions. During World War II the so-called monsters, which were capable of 20 knots, almost invariably could sail singly with a good chance of getting through. With the increase in submarine speeds underneath the surface, of course, we need higher speeds for surface ships, and it is for that reason that we are seeking them.

The CHAIRMAN. But you said the Navy did not demand the speed. Admiral COLLINS. That is right.

The CHAIRMAN. But the operator does not get the final approval of his proposed replacement program unless he does agree with this speed.

Admiral COLLINS. No, sir. I do not believe that that is true. We seek 18 knots, but we have an agreement. Shall I read the specific cases which we have? I think it will clarify it.

The CHAIRMAN. Yes.

Admiral COLLINS (reading):

For those ships which are suitable for speedy and economical conversion to naval or military auxiliaries, a minimum speed of 20 knots is desired.

For those ships which are suitable for use by the United States Government in time of war or national emergency, a minimum speed of 18 knots is desired. For ships of less than 8,500 deadweight tons, excluding passenger ships, the best suited commercial speed is acceptable.

The CHAIRMAN. What was that tonnage? Admiral COLLINS. 8,500, sir.

For tankers where a trade-in allowance under section 510 (h) of the Merchant Marine Act of 1936, as amended, is involved, speeds of from 16 to 20 knots are acceptable, seeking wherever possible an 18-knot speed even though the payment of a national defense allowance is involved. Where no trade-in allowance is

involved, the best suited commercial speed as determined by the Maritime Administrator and/or the Federal Maritime Board, but not less than 16 knots, is acceptable.

The CHAIRMAN. What does that trade-in allowance have to do with the setting of the speed?

Admiral COLLINS. Where trade-in is involved Government funds are involved, and perhaps we should have something to say about what speed goes into the ship.

The CHAIRMAN. Otherwise there would be a subsidy.

Admiral COLLINS. Sir?

The CHAIRMAN. Did you mean that where subsidy and trade-in allowance are involved you would have more jurisdiction over speed? Admiral COLLINS. No.

The CHAIRMAN. Read the sentence.

Admiral COLLINS (reading):

Where no trade-in allowance is involved, the best suited commercial speed as determined by the Maritime Administrator and/or the Federal Maritime Board, but not less than 16 knots is acceptable.

The CHAIRMAN. But otherwise it would be a higher speed.
Admiral COLLINS. If we can get it.

Perhaps I can clarify this. We had quite a time determining how to acquire this speed. As far as the Navy is concerned, it is an effort to get what speed we can into the ship without recommending changes which will materially change the plans. We have no way of forcing it unless the Maritime Administrator is willing to provide a national defense subsidy to acquire it.

The CHAIRMAN. You have no way of enforcing it but, as Mr. Morse and the committee discussed, the reason they have no additional funds in the appropriations is that the programs that the various operators have designed to put into effect with replacement of their fleets have been delayed. That is what we are interested in here. We are interested in expediting these programs because by the delay of the program not only has it cost us in subsidy but it has cost private operators in increased cost. Since you are so interested in the replacement of this fleet, what have you done to try to get some steel to build these ships that you are so desirous of building?

Admiral COLLINS. We have done nothing about that, sir.

The CHAIRMAN. You get priority on battleships and other war ships. It is generally understood that you cannot successfully operate without this auxiliary commercial fleet of which we are talking. Admiral COLLINS. That is right.

The CHAIRMAN. Do you not think you should do a little something to try to help them get some steel to try to build it to the place you want?

Admiral COLLINS. We will support the Maritime Commission in their efforts to get whatever is necessary to build new ships.

The CHAIRMAN. That is very splendid, but you know that when the national defense speaks everybody around here sits up and takes notice and so would the Office of Defense Mobilization. If you told Mobilization that you would be greatly handicapped and crippled in respect to the national defense should you not have this reserve fleet, this ready operating American-flag fleet, you would have more influence than anyone else could have.

Admiral COLLINS. I would like to reply to that, sir, by saying that these plans for construction of new cargo ships to replace those in the fleet have just come into the market.

The CHAIRMAN. What would be the period of just coming into the market?

Admiral COLLINS. Well, around the end of January.

The CHAIRMAN. Have they not been pending for a year?

Admiral COLLINS. They have not come to our attention, sir, before that. With these new arrivals our procedure is to present them to the Bureau of Ships for comment as to their suitability, technical advice. We ask MSTS what purpose they might serve in their organization. We even refer them to the Transportation Corps of the Army for

comment.

The CHAIRMAN. You would not mind the record showing that it would be very pleasing to you and to the national defense if Defense Mobilization would make some arrangements to get a little more steel for the shipyards so that these ships would be built?

Admiral COLLINS. No, sir. I have no objection to that.

The CHAIRMAN. That would be a fine endorsement on your part and on the part of the agency that you represent.

Mr. MAILLIARD. Would the chairman yield?

The CHAIRMAN. Mr. Mailliard.

Mr. MAILLIARD. On page 11 of this joint MarAd-Navy planning group statement on which I certainly would like to focus attention, there is a statement under paragraph 9g:

The group feels that the use of priorities by DOD for ships should be extended to merchant ships construction when industry fails in peacetime to provide enough materials to permit the maintenance of an adequate shipbuilding and ship-repair mobilization base. (This is presently true with respect to a shortage of shipbuilding steel.)

I hope that perhaps the Chief of Naval Operations might find himself in agreement with that and put a little steam behind it.

The CHAIRMAN. I am glad you called that to the attention of the committee and got it in the record.

Mr. TOLLEFSON. Mr. Chairman.

Did you take into consideration, when you approved or did not approve tankers, the contemplated or current tanker program? Did that have an effect?

Admiral COLLINS. May I refer that to Admiral Gano.

Admiral GANO. We took our inventory as of the 31st of December of last year, for instance, and it does not take into consideration any shipbuilding since that time. When the inventory is next taken on the 30th of June and also the next 31st of December, that inventory will include those ships which are building at the time.

Mr. TOLLEFSON. I have one other question. The mere fact that you suggest a deficiency of ships for mobilization purposes indicates that the Defense Department considers the American merchant marine essential for war purposes.

Admiral COLLINS. Absolutely.

Mr. TOLLEFSON. That is not only the position of the Navy, but that is the position of the Defense Department.

Admiral COLLINS. That is correct.

Mr. TOLLEFSON. That is all, Mr. Chairman.

Mr. ALLEN. Mr. Chairman.

The CHAIRMAN. Mr. Allen.
Mr. ALLEN. Mr. Chairman.

Admiral, referring again to the letter which Secretary Thomas wrote to me under the date of February 20, 1957, and going back to this question of effective United States control, he says at the outset of the letter, talking about the subject:

In cases where vessels are transferred to foreign registry, a careful investigation is made in each case to insure

(1) That the ship is not needed for national defense purposes.

Is it still true that no consent to transfer would be given on the part of the Navy unless it was determined that the ship was not needed for national-defense purposes? I have in mind particularly transfers of the T-2 tankers and now some Victorys and ships of that type.

Admiral COLLINS. Where new construction is a consideration we do not object to trade out provided the usual arrangements are made by Maritime to assure that the ship will be under effective United States control.

Mr. ALLEN. Thank you, Mr. Chairman.

The CHAIRMAN. Without objection, the letter will be made a part of the record.

(The letter referred to follows:)

Hon. JOHN J. ALLEN, Jr.,

DEPARTMENT OF THE NAVY,

OFFICE OF THE SECRETARY, Washington 25, D. C., February 20, 1957.

House of Representatives, Washington 25, D. C.

MY DEAR MR. ALLEN: At a recent meeting you asked for information on provisions which are in existence for gaining control of United States owned shipping which is flying foreign flags.

In cases where vessels are transferred to foreign registry, a careful investigation is made in each case to insure:

(1) That the ship is not needed for national defense purposes.

(2) That the Maritime Administration considers the ship is not needed to meet the requirements of foreign and domestic commerce of the United States.

(3) That the Department of State determines that the transfer of registry is not inconsistent with the foreign policy of the United States.

(4) That the Office of International Trade, the Director of Naval Intelligence and the Central Intelligence Agency considers that the transferee is of good character and integrity and can reasonably be expected to carry out the conditions imposed on the approval of the foreign transfer.

When the above conditions have been satisfactorily met, the transfer may be made subject to the following conditions:

(1) That the ship shall not engage in any trade prohibited to the United States flag ships.

(2) That the ship shall be chartered to the United States on demand.

(3) That there shall be no change in registry without prior approval of the Maritime Administrator.

(4) That a surety bond guaranteeing adherence to the conditions imposed by the Maritime Administrator shall be provided.

It would seem, therefore, that from the viewpoint of management control, there is reasonable insurance that these ships will be made available for use in event of an emergency.

The conditions described above refer primarily to slow speed, overage ships transferred on an individual basis. In the case of ships not considered over age, or which are otherwise considered suitable for national defense purposes, transfers are permitted only upon condition that compensatory newly constructed tonnage for United States flag operation is contracted for. Conditions of transfer similar to those set forth above are imposed.