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Is that your statement?

Mr. SHOEMAKER. I did not say solely on national policy, sir.
Mr. ZINCKE. Based on national policy?

Mr. SHOEMAKER. That is my understanding that they do. Mr. ZINCKE. And not on the commercial requirements of the port? Mr. SHOEMAKER. It is my understanding that that has been done both with respect to ocean shipping and with respect to air shipping. Mr. ZINCKE. Well, the Federal Maritime Board, as you know, has no control over any air activities.

Mr. SHOEMAKER. But the Civil Aeronautics Board does, sir.

Mr. ZINCKE. And you also referred to the elimination of annual losses incurred by continuation of this Government service. To what losses do you refer, sir?

Mr. SHOEMAKER. At the time of our study of the second Hoover Commission, the losses were outlined in our report.

We are informed by the Bureau of the Budget that their new studies show a continuation of these losses.

Mr. ZINCKE. And your study was made when, 7 years ago?
Mr. SHOEMAKER. It was released in the spring of 1955.

Mr. ZINCKE. Your study was made the year before?

Mr. SHOEMAKER. Yes.

Mr. ZINCKE. That is all I have.

Mrs. SULLIVAN. Are there any further questions?

Thank you very much, Mr. Shoemaker.

Mr. SHOEMAKER. Thank you.

Mrs. SULLIVAN. We appreciate your courtesy.

The committee will stand in recess pending permission for the committee to sit this afternoon during general debate on the floor. If we get that permission, we will convene again at 2 o'clock. (Whereupon, at 12:25 p.in., a recess was taken until 2 p.m. of this same day.)

AFTERNOON SESSION

Mrs. SULLIVAN. The Subcommittee on the Panama Canal Zone will come to order.

Our first witness this afternoon is Mr. Lane C. Kendall. STATEMENT OF LANE C. KENDALL, COMMERCIAL SHIPPING ADVISER TO THE COMMANDER, MILITARY SEA TRANSPORTATION SERVICE; ACCOMPANIED BY CAPT. H. CLAUDIUS, ASSISTANT CHIEF OF STAFF (OPERATIONS); CAPT. E. C. RIDER, ASSISTANT CHIEF OF STAFF (PLANS); JOSEPH A. BROGAN, ASSISTANT DIRECTOR, PASSENGER DIVISION; AND DONALD M. GARDNER, ASSISTANT CHIEF, CARGO SHIP OPERATIONS BRANCH, MILITARY SEA TRANSPORTATION SERVICE

Mr. KENDALL. I would like to introduce the other members from the MSTS, Captain Claudius, Assistant Chief of Staff (Operations), Mr. Donald M. Gardner, Assistant Chief of the Cargo Ship Operations Branch, Mr. Joseph Brogan, Assistant Head of the Passenger Division, and Capt. Eugene Rider, who is the Assistant Chief of Staff for Plans.

Mrs. SULLIVAN. You have a prepared statement. It is short, so that you will probably want to read it.

Mr. KENDALL. Yes, ma'am; I would like to read it.

Mrs. SULLIVAN. Proceed.

Mr. KENDALL. My name is Lane C. Kendall. I am the commercial shipping adviser to the commander, Military Sea Transportation Service. I am here to supply information on the operations of MSTS between the United States and the Canal Zone.

MSTS maintains service for passengers only from New York. The ships used are the USNS Upshur, the USNS Geiger, and the U.S.S. Randall. These ships have a speed of about 18.5 knots. The Upshur-class transports have a cabin-class capacity of 382 passengers and troop space for 1,227 men, berthed three high. The Randall has 364 cabin-class berths and 1,968 troop berths, three high. These ships provide one sailing a month between New York, San Juan, Guantanamo Bay, and the Canal Zone. The total time for such a round trip is 17 days. The three ships normally are assigned to the New York-Bremerhaven service and the run to the Canal Zone is phased into the schedule of the transatlantic operation. If sufficient traffic were to develop to justify regular sailings every third week instead of once a month, this could be achieved by rescheduling: it would not be necessary to assign another ship to the transatlantic-Caribbean service.

As to the commercial operators on this route, we find there are periods of maximum and minimum patronage. For example, in January 1961, a month in the "off season," we carried only 119 cabin passengers to San Juan, 28 to Guantanamo Bay, and 66 to the Canal Zone, or a total of 213, 55 percent of the USNS Upshur's capacity of 382 cabin-class passengers. Troop space occupancy was very low, amounting to only 21 percent of the 1,227 berths in the ship.

On the other hand, in September 1960, in the "peak season" for this route, there were 114 cabin passengers for Puerto Rico, 26 for Guantanamo Bay, and 193 for the Canal Zone.

This represented 87 percent utilization of the available berths in this class; for all practical purposes, the ship was filled. Troop berthing never is very heavy, and the ship carried on this voyage only 22 percent of capacity.

The homeward movement follows the same pattern. The January sailing carried 23 passengers from the Canal Zone, 44 from Guantanamo Bay, and 42 from San Juan, a total of 109 out of 382, or 28 percent of capability. Troop berthing was only 8 percent of capacity. In September, on the other hand, the booking record shows 71 from the Canal Zone, 67 from Guantanamo Bay, and 142 from Puerto Rico, totaling 280 out of 382, or 73 percent of capacity. Troop space was used only to 20 percent of capacity.

During fiscal year 1961, we have booked with the Panama Line 4 outbound passengers and 42 homeboard. Except for a party of four who came from Panama to New York in November, the movement was confined to July 1960.

Our three transports, assigned to this particular service, the Geiger, Upshur and Randall, have comparatively small cargo space. The Upshur and Geiger have 88,530 cubic feet for dry cargo (approximately 2,200 measurement tons) and the Randall has 109,349 cubic feet (approximately 2,700 measurement tons). Normally, this space is used for privately owned vehicles of service personnel traveling in the

ship, mail, household goods, and other high-priority cargo which can be handled rapidly without delaying the ships for cargo work.

Average loadings of these three ships to the Canal Zone have been on the order of 800 measurement tons per sailing. The USNS Geiger sailed on October 19, 1960, with 672 measurement tons. The U.S.S. Randall sailed on November 24th with 472 measurement tons. The Geiger sailed on December 19th with 939 measurement tons and the Upshur sailed on January 18, 1961, with 391 measurement tons. This is a reasonable cross section of the outbound loadings for the Canal Zone in these ships.

There are, in the MSTS fleet, 13 Victory-type cargo ships, 4 of which MSTS operates in a worldwide cargo service. These sail approximately once a month from New York and as a general rule do not carry an appreciable amount of cargo to the Canal Zone. They are used principally for intercoastal and foreign cargo, such as privately owned vehicles and specialized cargo. The sailings are spaced irregularly and whatever they carry to the Canal Zone represents only a small proportion of their total cargo.

Out of New Orleans, MSTS operates two ships, both 338 feet long, 50 feet wide, with a draft of 231⁄2 feet. They have a cruising speed of 10 knots and were built in 1945. The MS Laurentia has 103,420 cubic feet (2,585 measurement tons) of refrigerated cargo space and 57,080 cubic feet (1,427 measurement tons) of general cargo space. Cargo booms have a maximum capacity of 10 tons.

The MS Short Splice has 191,270 cubic feet (4,782 measurement tons) of general cargo space and 9,830 cubic feet (245 measurement tons) of refrigerated space. She has two booms of 80-ton capacity; eight 10-ton booms; two 5-ton booms and two 11⁄2-ton booms.

These vessels are scheduled regularly from New Orleans to San Juan and Balboa. Voyages take about 1 month and sailings are arranged so that there are two departures per month from New Orleans. The Short Splice in four trips carried 16,164 tons of cargo and obtained a utilization of about 80 percent of capacity. The Laurentia, in six trips, carried 19,692 tons of cargo which filled about 81 percent of the ship's capacity.

The cargo carried by the Laurentia and the Short Splice is generated by the armed services and the pattern which I have outlined is reasonably typical of the volume in which this cargo has moved for some time past. The volume is controlled by the needs of the military installations in the Caribbean and unless there is a noticeable increase, these two ships, plus commercial augmentation, will be able to meet the transportation requirements imposed upon MSTS.

Since the beginning of fiscal year 1961, MSTS booked with the Panama Line, outbound and homeward, a total of about 2,500 measurement tons of cargo, and 4,500 pounds of mail, with a total payment to Panama Line of about $35,000. The largest consignment moving at one time was 1,162 measurement tons, paying $14,867 in freight.

Mrs. SULLIVAN. Mr. Kendall, you have lost me in figures.

Let me ask if we can begin to develop some of the pertinent things that we need to know.

First, why did the Hoover Commission say that the Panama Line should take over your shipments to the Canal Zone?

Mr. KENDALL. I am not qualified to answer, Madam. I have not been with MSTS long enough and I do not know.

Mrs. SULLIVAN. Would any of the other gentlemen know that? Mr. BROGAN. I will try to venture it. I hesitate to guess as to why the Hoover Commission thought so but, nevertheless, it probably was because of the fact that there are in effect, or on the face of it, two Government steamship agencies servicing the same area.

This, however, has to be examined in much greater detail.

There is a military reason for the existence of MSTS, and the necessity for MSTS to service the Caribbean area.

To my knowledge, there is no similar reason for such service by the Panama Line.

Viewed in this light, we in MSTS feel that our service must be maintained as long as we receive requirements from the individual military departments to service the Caribbean area and as long as the Military Sea Transportation Service is required to operate a specified number of ships by the Joint Chiefs of Staff.

Mrs. SULLIVAN. Your answer there leads to the next question I was going to ask you. What is the military reason for keeping the service?

Mr. BROGAN. Essentially the military reason for maintaining our fleet in operation is to provide an immediate readiness capability to meet emergency and mobilization requirements.

This requirement to operate a specified number of ships in substantially full operation was one that was imposed upon MSTS by the Joint Chiefs of Staff.

In effect, they said we must maintain 17 ships in substantially full operation for this purpose.

Mrs. SULLIVAN. As to your figures that you mentioned of the number of passengers that you carried from the Canal Zone, from Guantanamo, and so forth, would they have made the entire trip? When you say 44 from the Canal Zone and 42 from Guantanamo, would those 44 stay on for the whole voyage and pick up 42 more at Guantanamo, and so on?

Mr. BROGAN. Our itinerary is essentially New York to San Juan where we debark passengers from New York. We next call at Guantanamo and debark those passengers and then proceed to Canal Zone where we debark Canal Zone passengers and embark passengers originating there for New York and we call again at Guantanamo and San Juan for inbound passengers.

Mrs. SULLIVAN. Would you be picking up people from, say, your first stop after you leave New York and carrying them to one or two of the other ports? In other words, if you first stop at San Juan, would you be picking up people at San Juan for any reason and carrying them to Guantanamo?

Mr. BROGAN. Yes; we do carry a certain number of passengers from San Juan to Guantanamo and also from San Juan to Canal Zone. Mrs. SULLIVAN. Would they be traveling on military orders? Mr. BROGAN. A certain number do. This traffic is not heavy but there are a certain number traveling under a permanent change of station.

Mrs. SULLIVAN. During peacetime is the carrying of your troops always as low as you mentioned in these items, in one place 20 percent of capacity, in another one 22 percent of capacity?

Mr. BROGAN. On the Carribbean route, our troop utilization is traditionally low. This is simply because the troop population in that area is low.

Mrs. SULLIVAN. You carry very little cargo of a military nature. Most of it is transporting of families and the families' household goods or their automobiles, or something for the family use.

Mr. BROGAN. That is correct.

Mr. KENDALL. That is on board these transports which are carrying the personnel.

Mrs. SULLIVAN. Say that again, Mr. Kendall.

Mr. KENDALL. The cargo which is carried on the troop transports would be of the nature you described, household goods, automobiles, and similar nonmilitary equipment.

The military cargo would be moved in the cargo ships either out of New Orleans on the Laurentia and the Short Splice or out of New York on commercial vessels which have contracts with MSTS to handle such cargoes as we may give them.

Mrs. SULLIVAN. So that the MSTS is not basically for carrying military cargo?

Mr. KENDALL. The MSTS is a worldwide organization, Madam Chairman, which carries about 10 million tons of dry cargo of every description all over the world.

We carry everything from the heaviest tanks to post exchange supplies, depending upon what may be given to us by the shipper services, which are the Army, the Navy, the Marine Corps, and the Air Force.

Mrs. SULLIVAN. But in this area of the Canal Zone and the Caribbean area, it is more family cargo rather than the military?

Mr. KENDALL. Only on the transports. If the Department of Defense wishes to move tanks to Panama, this movement would be handled through MSTS and would be put on a ship which had the capability to handle the tanks.

Mrs. SULLIVAN. Then they would not be handling the passengers in quantity?

Mr. KENDALL. No, ma'am. We have the three ships which normally operate transatlantic which are scheduled to make the once a month trip to Panama.

These are specially built and handled as what we call dependent transports. They are able to handle women and children.

The cabin class to which I referred is this class where women and children can be transported.

Troop class is just what the name would imply. It is, if you will, converted cargo space which has been equipped with adequate ventilation and good lights, comfortable bunks, but it is on a barracktype accommodation rather than a cabin-type accommodation.

Mrs. SULLIVAN. And the ships which travel from New York to the Canal Zone, at least from the example you have given us, have not been fully utilized for troopships. You mentioned that about 20 to 22 percent of the troop capacity was utilized.

Mr. KENDALL. This is correct, merely because the Armed Forces in the Caribbean do not have very many troops which require change of station.

Mrs. SULLIVAN. What about Haiti? Is there anyway that you could serve Port-au-Prince, Haiti?

Mr. KENDALL. We are not in the commercial business, Madam Chairman, and, unless the Department of Defense wishes us to go there as part of its military activities, we would have no reason to go to Haiti.

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