eign carriers. We believe that these procedures assure that due regard is In view of the effect on west coast lumber shipments resulting from section 4 of Public Law 87-877, it would appear desirable that a thorough reappraisal be made during the next 2 years of the effect of the Jones Act on the present state of the U.S. merchant marine and the domestic economy generally. For the foregoing reasons the Department does not believe that it would be desirable to provide an indefinite extension of section 4 of Public Law 87-877 and recommends that S. 2100 be modified to provide for a 2-year extension of that section. The Bureau of the Budget has advised that there would be no objection to the submission of this report from the standpoint of the administration's program. Sincerely, ROBERT E. GILES. COMPTROLLER GENERAL OF THE UNITED STATES, Hon. WARREN G. MAGNUSON, Chairman, Committee on Commerce, DEAR MR. CHAIRMAN: Further reference is made to your letter of August 29, 1963, acknowledged on September 3, requesting the comments of the General Accounting Office concerning S. 2100, 88th Congress, 1st session, entitled “A bill to continue certain authority of the Secretary of Commerce to suspend proposed legislation and, therefore, we make no recommendation with respect to the transportation of lumber." We have no special information or knowledge as to the desirability of the proposed legislation and, therefore, we make no recommendation with respect to its enactment. DEAR SENATOR: This is in response to your request for the views of the Department of Justice on S. 2100, a bill "To continue certain authority of the Secretary of Commerce to suspend the provisions of section 27 of the Merchant Marine Act, 1920, with respect to the transportation of lumber." This bill has been examined, but since its subject matter does not directly affect the activities of the Department of Justice, we would prefer not to offer any comment concerning it. Sincerely yours, NICHOLAS DEB. KATZENBACH, Hon. E. L. BARTLETT, Senate Office Building, Washington, D.C. DEAR SENATOR BARTLETT: I note that on September 23 hearings will be held before the Subcommittee on Merchant Marine and Fisheries on S. 2100 and that you will preside over these hearings. S. 2100 introduced by Senator Magnuson and Senator Jackson would continue the authority of the Secretary of Commerce to suspend the provision of section 27 of the Merchant Marine Act of 1920 with respect to the transportation of lumber to Puerto Rico. In effect, the bill would permit lumber from the Pacific Northwest to compete with Canadian lumber in the Puerto Rico marketplace. S. 2100 has my full support because it would enable purchasers in Puerto Rico the opportunity to use domestic lumber rather than foreign lumber without increasing construction costs. This, naturally, we would prefer so as to enable us to make further contributions to the national economy. Sincerely, Hon. WARREN G. MAGNUSON, U.S. Senator, Senate Office Building, A. FERNÓS-ISERN, Resident Commissioner. OLYMPIA, WASH., September 20, 1963. I have been informed that the cargo lumber industry will appear before the Senate Merchant Marine Subcommittee on September 23 in connection with S. 2100 to extend lumber shipping privileges to Puerto Rico. In previous letter of July 31 I expressed my great concern and my strong interest in the need for extending Public Law 87-877 beyond its October 1963 expiration date. I want to reiterate with added emphasis my support of S. 2100 and urge its favorable consideration by the subcommittee. Senator WARREN G. MAGNUSON, Washington, D.C.: ALBERT D. ROSELLINI, PORT ANGELES, WASH., September 21, 1963. We are very much in favor of the amendment to the Jones Act allowing U.S. lumber to be shipped in foreign ships to Puerto Rico. Urge you to use all possible influence for passage of Senate bill S. 2100. A. H. HALEY. ABERDEEN, WASH., September 20, 1963. Senator WARREN G. MAGNUSON, DEAR SENATOR MAGNUSON: With unequal freight rates set by our Government, the United States shipped no lumber to Puerto Rico. With the temporary amendment, which we hope you will renew, by passing S. 2100, the United States at least got a start in recapturing some of this market. This perhaps demonstrates that if you take the millstones from about our necks, we, the west coast cargo lumber producers, can compete in U.S. markets with foreigners. We urge that you continue this first-minute step in the salvation of our business. Yours sincerely, ANDERSON MIDDLETON LUMBER CO., By RICHARD W. MIDDLETON. Senator WARREN G. MAGNUSON, OLYMPIA, WASH., September 20, 1963. Washington, D.C.: Urge your favorable support of bill to extend Jones Act exemption to permit shipment of lumber to Puerto Rico. This act critical to several smaller ports dependent on cargo lumber for a major portion of their business. WASHINGTON PUBLIC PORTS ASSOCIATION, By RICHARD D. FORD. WARREN G. MAGNUSON, BELLINGHAM, WASH., September 20, 1963. Chairman, Senate Commerce Committee, At hearings commencing Monday on Puerto Rico lumber shipments, request register support of our organization for extension of the Puerto Rican amendment to Jones Act. DAVID MORSE, President, Bellingham Chamber of Commerce. Senator WARREN G. MAGNUSON, LONGVIEW, WASH., September 18, 1963. Senate Office Building, Washington, D.C.: Wholeheartedly favor your bill S. 2100 extended Puerto Rican shipping amendment because of Canadian competition in our domestic markets. Continued opportunity to increase sales in Puerto Rico important to coastal lumber shippers. RAINIER MANUFACTURING CO., DON BELLAMY. SEATTLE, WASH., September 18, 1963. Hon. WARREN G. MAGNUSON, Hon. WARREN G. MAGNUSON, H. M. BURKE, General Manager, Port of Seattle. SEABOARD LUMBER CO., Seattle, Wash., September 17, 1963. MY DEAR SENATOR: I understand that bill S. 2100 is coming up for consideration by the Senate Maritime Committee next week. I believe this bill has to do with the extension of the restricted rights of American sawmills to ship lumber to Puerto Rico on foreign-flag ships. Seaboard Lumber Co. was one of the west coast companies that was granted this right. For the first time in many years, we were able to compete with Canadian lumber producers and did ship some lumber to Puerto Rico. Puerto Rico is mainly a market for low-grade lumber items which are the most difficult for us to merchandise. We feel that if this privilege of shipping on foreign flags could be extended, we could increase considerably our lumber shipments. I would like to have this letter submitted as evidence before your committee. Yours very truly, A. P. SUMMY, President. AT SEA, July 22, 1963. DEAR SENATOR MAGNUSON: We the crew of the SS Comayagua wish to express to you our concern over the further proposals for infringements on the Jones Act. This law was made to protect the American merchant marine and its actions in its own home waters. The arguments used for this action are very flimsy to say the least. To sacrifice one part of an industry for the benefit of another could be rightly termed not as progress, but cannibalistic. In the last war these same people who seem so anxious now to decimate the merchant fleet, were crying for us seamen to keep the lifelines going and be patriotic. It is our opinion that we did our job well, and at great personal sacrifices. It is now their turn to show their patriotism which, contrary to their opinion, should be shown in wartime as well as peace. We hope that you, and your colleagues, will vote against any more of these, and other unfair legislation. We thank you for any cooperation you will give us in this matter. Respectfully yours, Hon. WARREN G. MAGNUSON, RUTHVEN L. SWANSTON, Ship's Chairman. EFRAIM RODRIGUES, Deck Delegate. CARLTON H. BLACK, Engineroom Delegate. LEONARD J. COATES, Steward's Delegate. SHIPBUILDERS COUNCIL OF AMERICA, Chairman, Committee on Commerce, U.S. Senate, Washington, D.C. DEAR SENATOR MAGNUSON: Your continuing attention to the maritime problems of the Nation has been a constant source of encouragement to the commercial shipyard industry of the United States which in a substantial sense has commingled its destiny with that of the U.S. merchant marine. With you, we have felt that a strong, modern, and adequate fleet of merchant vessels to serve all types of U.S. waterborne commerce and a modern, efficient, and adequate shipyard industry are inseparable in the national interest. But, like the vine that wilted for lack of nourishment, the weakening of either of these taproots of maritime strength can only adversely affect the other. Unfortunately, the U.S. domestic ocean transportation industry has been progressively deteriorating, for a variety of reasons, some unknown, some unrealized, and some unappreciated, with similar deteriorating effects upon the commercial shipyard industry. We therefore applaud your efforts to get to the “rockbottom" of this problem, though you would surely agree we could hardly be expected to endorse or support any move which is intended to give preferential attention to foreign-built ships at the expense of domestically built vessels. On this single basis, we have no alternative but to oppose S. 2100 as now written-just as we did last year when section 4 (a) of Public Law 87-877 was enacted. This is not a capricious stand, for as you will note from the attached copy of a recent letter (concerning other legislation) to Under Secretary of Commerce Franklin D. Roosevelt, Jr., we have carefully evaluated the economic repercussions which can result from reliance on foreign shipyards to the detriment of U.S. shipyards. Your particular attention is directed to this comment on page 6: "With the operators and the naval architects and marine engineers, we are confident the U.S. shipyard industry can design and build ships at minimum costs to service all of the domestic trades. With the enlightened cooperation of maritime and shipyard labor, we believe the outlook for the future could be improved. Through joint and coordinated efforts-and even leadership-on the part of Government, labor, shipyard and ship operators, we feel some solid chances for progress can be developed. To this end, a conference of U.S. shipbuilding, labor, and Government officials, under the auspices of the Department of Commerce might prove timely and beneficial." We are confident these objectives would coincide with yours. They apply as well to the lumber situation. However, our request for a joint conference is still pending. Therefore, should the committee, in its wisdom, decide that an immediate remedy is imperative, we would hope that any action with respect to S. 2100 would be limited to a period of 1 year so as to permit a unified congressional, administration, labor, and industry attack upon the problem in all of its many facets. We respectfully request that this letter, and the enclosure, be incorporated as a part of the record of your hearings. With highest personal regards always, I am, Cordially, EDWIN M. Hoop, President. SHIPBUILDERS COUNCIL OF AMERICA, Hon. FRANKLIN D. ROOSEVELT, Jr., Under Secretary of Commerce, Washington, D.C. DEAR MR. SECRETARY: As you know, bills have been proposed in the Congress which would permit domestic shipping operators to procure foreign-built ships in the event that a construction-differential subsidy is refused by the Federal Government. We feel the mere introduction of such legislation calls for a reaction from us. Against the background of our very pleasant conversation some weeks ago about general maritime conditions, and your kind letter of July 29, I am taking the liberty of passing these thoughts along to you. Recommendation 21 of the Maritime Evaluation Committee would seem to provide an added reason for writing you on this subject. The domestic waters of the United States have long been restricted to U.S.built ships. The genesis of this restriction-or the coastwise principle as it has come to be known-can be traced to the Continental Congress in early Colonial days. There is no question that this pattern through the years has been helpful to U.S. shipyards as well as to operators in the coastal and intercoastal, the Great Lakes, and more recently the noncontiguous trades. The pattern, of necessity, was distributed by urgent requirements at the outset of World War II when ships in these services were taken over as a first line of immediately available transportation capacity. The importance of those vessels is beyond calculation, for had they not been on hand, in being, the war effort would have been even more costly in terms of losses in men, materiel, and time. Parenthetically, the "on hand, in being" philosophy has somehow lost its meaning and significance in this contemporary age, and it may be that the resulting losses in men, materiel, and time in the next great conflict, if ever there should be one, will be measurable in exact, finite numbers. Of course, during the war, commodities, previously carried by ships in the domestic trades, were shifted to transportation by railroads and trucks predominantly, and the historic pattern has never since been restored. Through selective ratemaking, the railroads in the postwar years have been able to prevent a rebirth of domestic water shipping, even though there are reams of reports indicating that the absence of such resources is a national peril. To correct this situation, there are those who now argue, with self-serving motives, that lower cost foreign-built ships should be permitted to operate in the domestic trades. Standing alone, the rationale of this argument can be deceptive and an illusion. From these preceding paragraphs, it can be seen that the problem goes far beyond domestic shipping and domestic shipyards. To admit foreign-built ships would be to ignore ramifications which could deeply affect our economic stature, our balance of international payments, our defense strategy, and our transportation complex, and our way of life. Our comments on each of these points may be of interest to you: A. Economic stature.-It is said the use of foreign-built ships will not adversely affect the U.S. commercial shipyard industry for the reason that only a limited number of deepwater vessels have been built for the domestic trades in U.S. shipyards during the last 10 years. With respect to "common carrier" vessels this, of course, is an accurate statement, but we can certify to you-and have already done so with the Congress-that of the 300 oceangoing vessels of 1,000 gross tons and over built in U.S. yards for registry under the U.S. flag in the years 1947-62, 152 (slightly more than half) were built on the basis of the historic coastwise principle. Additionally, in the same period, a total of 9,970 various nonpropelled and self-propelled smaller vessels including a wide variety of floating equipment), approximately 5,500,000 gross tons, were delivered by U.S. yards. Practically all of these vessels were built for use in the domestic waters of the United States. Any further exceptions, then, to the historic pattern could only lead the operators of these vessels and the owners of this floating equipment to conclude with reasonable justification that they too should have the privilege of taking advantage of the lower wages and material costs abroad. So, at once, the impact on the U.S. commercial shipyard industry is placed in sharp focus, and since each of the 50 States furnishes components and/or materials for shipyard |