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Subsidized vessels (including overage vessels) having terminations from July 1, 1941, to June 30, 1942, as follows: American Export Lines, Inc., 10; American Mail Line, Ltd., 9; American President Lines, Ltd., 11; American South African Line, Inc., 5; Grace Line, Inc., 9; Lykes Bros. Steamship Co., Inc., 25 ; Mississippi Shipping Co., Inc., 8; Moore McCormack Lines, Inc., 17; New York & Cuba Mail Steamship Co., 7; Oceanic Steamship Co., 2; Seas Shipping Co., 11 ; United States Lines, 21 ; total, 135.
PROCEDURE IN TAKING OVER SHIPS
Mr. WIGGLESWORTH. How do you arrive at prices when you take over ships? Is it a process of negotiation, or do you make your own appraisal and let the owner take it or leave it? What is the general basis?
Admiral LAND. That is one of the most serious problems that face us at the present time; it is not a Maritime Commission problem any more. It is a War Shipping Administration problem, but I am perfectly willing to discuss it.
Mr. WIGGLESWORTH. You are in charge of both organizations?
Admiral Land. Yes, sir. We are in a controversy with the Comptroller General as to the time requisitioning of vessels was permitted. We felt that the emergency of September 8, 1939, being a limited emergency, did not affect the Maritime Commission in any way; but the unlimited emergency of May 1941, declared by the President, did affect the Maritime Commission and brought into operation section 902 (a), which not only requires just compensation, but has the enhancement clause in it. That is a subject that is being thoroughly discussed between congressional committees, the Comptroller General, the Maritime Commission, and the War Shipping Administration, and, so far is I can see at the present time, there will be no solution of it without congressional action. We have stopped payments of any kind, with certain exceptions, due to the decision of the Comptroller General that September 8, 1939, is the time that we must make the valuation, and that any enhancement thereafter is prohibited by section 902 (a).
Mr. WIGGLESWORTH. You have been governed by that to date?
Admiral LAND. We have been governed by that since the decision was made; and I would be very glad to put in the record our announcement to all operators, because it not only goes to valuation but also to charter rates—a circular letter sent out by W. S. A. covering the subject. It is a very difficult problem and, as I say, in my judgment it will not be settled without congressional action.
Mr. WIGGLESWORTH. Regradless of which date governs, is it a process of negotiation?
Admiral LAND. Yes, sir; and it is a process of negotiation based on facts and figures that we have, as compared with facts and figures that any prospective charterer or contractor may present.
Mr. WIGGLESWORTH. The company takes what you give them, in the last analysis, whether they like it or not?
Admiral LAND. They always can fall back on the law. If they are not satisfied with what we give them, they can sue in the Court of Claims. But we went ahead on a normal business basis for a long time, and finally took it up with the Comptroller General, and in my judgment he cleared the Commission and the W. S. A. of any illegal
action on the basis of his second decision, but did not clear us as to any solution of the matter. I do not know how there can be a solution of the matter without advice and help from the Congress, either by an adjudication board of some kind, a board of review, or by a formula that Congress will fix to determine the matter. It is an extremely difficult problem, involving world prices, scrap prices, construction prices, original prices, and deterioration due to age, or depreciation.
SHIPS PURCHASED SINCE JULY 1, 1940, WITH DATE OF PURCHASE, AGE,
ORIGINAL CONSTRUCTION COST, AND PURCHASE PRICE
Mr. WIGGLESWORTH. Would you put a table in the record that will show the ships purchased during the period from, say, July 1, 1940, with the name of the seller, the date of purchase, the age, the original construction cost, and the purchase price paid ?
Admiral LAND. Yes, sir.
(NOTE.—This material will not be supplied for the record, but will be started and supplied to the committee at a later date.)
REIMBURSEMENT BY NAVY DEPARTMENT TO COMMISSION FOR COST OF SHIPS
PURCHASED FOR THEIR ACCOUNT
Mr. WIGGLESWORTH. Under what conditions, if any, is the Navy Department asked to reimburse the Commission when you buy a ship for their account, for the construction subsidy?
Admiral LAND. For the full amount of the cost to the Commission, and the subsidy goes back into our revolving fund. When we transfer either to the Navy or to the War Department, we do it as any businessman would do it; we get value received, and the subsidy part goes into our construction fund, and it means that much less that we ask Congress for when we come up
here. Mr. WIGGLESWORTH. In other words, you charge the Navy Department for the purchase price of the ship?
Admiral LAND. Yes.
Admiral LAND. Well, that is part of the price of the ship-the construction subsidy. We charge the Navy Department the cost of the ship. We would have paid the subsidy ourselves if it went to a private purchaser or operator, and we think it is only proper that the full cost should come back to us if the ship goes to the Government. It is just as broad as it is long.
Mr. WIGGLESWORTH. It creates a revolving fund so far as you are concerned ?
Admiral LAND. Yes, sir. That is what you give us, and it is perfectly proper, we think, to do it that way, because you have given us this revolving fund.
Mr. WIGGLESWORTH. What is the basis of your charter-hire rates!
Admiral LAND. It is again on a negotiable basis insofar as our judgment is concerned, but it is based on the world market, the conditions, the danger of the loss of ships, the insurance rates, and the liabilities going all the way through—bonuses, compensation, work
men's compensation, and things of that kind—where they have to be reimbursed. But it is done generally on a market basis.
Mr. WIGGLESWORTH. The market value of the ship?
Admiral LAND. Yes; and when you get to that you take into consideration, for example, the displacement, whether it is refrigerated or not, and whether it has a certain speed. It is done on a sound and logical basis. Whether it is absolutely correct from every point of view is just a question of the judgment of the people doing it.
Mr. WIGGLESWORTH. I wish you would give us another table. if you can, which would show, by ship and company, the dates of the charterhire agreements.
Admiral Land. Mr. Wigglesworth may I interrupt? All of this has nothing to do with this bill before you. It is all War Shipping Administration. I would be happy to do it, but it would mean that it is not pertinent to this record. I am perfectly willing to do anything you ask me to do, but it has nothing to do whatsoever with the appropriation bill before you, because it is War Shipping Administration entirely.
Mr. WIGGLESWORTH. Well, I want to get a picture, either for the record or for myself—I do not care which way you do it
Admiral LAND. I will do it, but, as I say, it is not pertinent to this bill, and I would not like to delay the hearings, because you are asking for quite a job, all of which will be prepared for the War Shipping hearings.
Mr. WIGGLESWORTH. When will W. S. A.'s request come up?
Mr. Kirsch. Probably in February or March. Possibly 1,200 ships have been chartered on which bare-boat charter rates or time charter rates have been specified, and you can appreciate how large a job it would be at this particular time and for this particular purpose.
Mr. WIGGLESWORTH. If I cannot get it for this record, I would like to get it individually. Mr. KIRSCH. We can work it out for
sir. Admiral LAND. I will put it in process, because we have got to have something of that kind for the W. S. A.; but I hate to duplicate it. It is a tremendous job and we are shorthanded.
Mr. WIGGLESWORTH. For an understanding of the picture as a whole, what I would like to get by ship and company is the charter rates paid, the dates of charter, the age of the ships, the original construction cost, and the earnings since charter.
Admiral LAND. You are not going to get some of that in time for these hearings. There are some of these things that we do not know but we can obtain in due course of time.
Mr. WIGGLESWORTH. You cannot furnish this information?
Admiral Land. It is possible, but it is going to take a tremendous lot of work to dig it out. I would like to have your charity a little bit on getting out the original cost of the ships.
Mr. WOODRUM. Give him the best statement you can. Admiral LAND. I will put it in process right away. Mr. WIGGLESWORTH. If we cannot get it for the record I would like it individually.
Admiral Land. All right. It is all there, but it is a tremendous job, because 1,200 is not half the story. There are many more than 1,200 now.
Mr. WIGGLESWORTH. How about your insurance?
Admiral LAND. That again is all under W. S. A., and is one of ple dans the most complicated things we have to deal with, all of which will
be prepared in proper form for you when you take up the W. S. A. appropriation.
Mr. WIGGLESWORTH. Again I do not want to impose any undue burden, but I would like to get individually, if not for the record, some kind of a table which would show since July 1, 1940, by ship and
of the ship, the original cost of construction, and the insurance placed on the ship and paid in the event of loss. Admiral LAND. All right. It is going to be some table, though.
STEAMSHIP "PRESIDENT COOLIDGE"
Mr. WIGGLESWORTH. You wrote a letter recently to Congressman
Jones of Ohio, a member of the full committee, in reference to the im President Coolidge in this general connection.
Admiral LAND. Yes.
Mr. WIGGLES WORTH. I would like to put that in the record, Mr. Ft Chairman, if there is no objection.
Mr. WOODRUM. Without objection, it will go in the record.
WAR SHIPPING ADMINISTRATION,
Washington, January 5, 1943. Hon. ROBERT F. JONES,
House of Representatives, Washington, D. C. My DEAR MR. JONES: In compliance with the request contained in your letter dated December 24, 1942, please be advised that the steamship President Coolidge was delivered by the builders on October 1, 1931, at the cost of $7,871,971.84. The owners of the vessel, American President Lines, Ltd., expented an additional $63 588.97 for betterments, thereby making the total cost plus betterments $7,935,560.81. · Depreciation from the date of delivery (October 1, 1931) to the date of sinking (October 25, 1942), calculated in accordance with the provisions of the United States Maritime Commission General Order No. 24, amounted to $4,275,027.71. It follows, therefore, that the net book value of the vessel at the time of sinking was $3,660,533.10. However, this figure is not conclusive upon the owner, except for the purpose of determining capital employed in subsidized operations, which operations have been suspended for the duration. We have no knowledge of the depreciation formula used by the owner for internal-revenue purposes but are aware of the fact that the vessel, prior to her operation for the account of the Government, was insured commercially for the sum of $8,000,000.
At the time of the casualty, the vessel was operating under hare-boat charter
E. S. LAND, Administrator.
COLLECTION OF EXCESS PROFITS
Mr. WIGGLESWORTH. What about the matter of the collection of excess profits? Is that also W. S. A. ?
Admiral LAND. No; not on ships. Shipbuilding is all under the Maritime Commission. It is all part of the contract basis and the renegotiation basis.
Mr. WIGGLESWORTH. Can you give us the total excess profits collected to date, broken down by companies?
Admiral LAND. Yes, sir.
Recapture of profits-construction, reconditioning and subcontracts as at
Dec. 31, 1942
Alabama Paint Co.----
$3. 79 International Silver Co- $954. 76 Algard, Fenton & Co---
208. 32 Interstate Flooring American Brass Co----- 7, 770. 79 Construction Co.----
95. 87 American Laundry Ma
Kidde, Walter & Co., Inc. 41, 673. 36 chinery Co----
3, 340.90 Kingsbury Machine American Rolling Mill
2, 970. 93 Co-2, 477, 40 Leblond, R. K. Co__
3, 091, 51 American Steel Wire
Lidgerwood ManufacturCo 41, 817. 61 ing Co--
2, 230, 61 Atwood & Morrill Co---
45. 56 Lovell-Dressel Co., Inc--- 3, 011. 11 Babcock & Wilcox Co31, 298. 46 Lukenweld, Icc
15, 096. 71 Baldwin Locomotive
Moore Dry Dock Co----- 1, 451, 912. 57 Works__
20, 244. 31 National Tube Co---- 52, 438. 15 Bethlehem Steel Co---- 19.7, 560. 80 Newport News ShipbuildCamden Forge Co--
16, 031. 56 ing & Dry Dock Co. 4, 852, 195. 01 Carey Machinery & Sup
Okonite Co., the.-
938. 85 ply Co.---
618.68 Phelps Dodge Copper Carrier Corporation.6, 505. 00 Products Co
1, 770. 87 Chase Brass & Copper
Republic Steel CorporaCo., Inc 421. 18 tion.-
1, 344. 31 Cochrane Corporation
5, 364. 84 Rerere Copper & Brass, C-O-Two Fire Equipment
7, 573. 68 Co
2, 331, 31 Söndusky Foundry & MaCrane Co43, 009. 01 chine Co.
1, 575. 59 Cutler, Hammer, Inc. 2, 519. 42 Shenango Penn Mold Co. 533. 39 DeLaval Steam Turbine
Sterling Bronze Co., Inc.
135. 86 Co
299, 338. 46 Sun Shipbuilding & Dry Elliott Co---271. 26 Dock Co.--
5, 044. 06 Engineering Specialties- 2,570. 86 Tennessee Coal, Iron & Erie Forge Co33, 269, 23 Railroad Co
21, 369. 79 Falk Co., The_
134, 835. 97 Valley Forge Sales CorFederal Shipbuilding &
180. 44 Dry Dock Co.
697, 226. 83 Weatherby Machinery Co. 818.00 Foster Wheeler Corpora
Westinghouse Electric & tion
5, 742. 29 Manufacturing Co----- 15, 200. 07 General Electric Co---- 97, 275. 09 Wood, Alan, Steel Co.-. 2, 923. 46 Hopeman Bros., Inc--- 324, 291. 80 Worthington Pump & MaHyde Windlass Co---- 40, 756. 05 chinery Corporation -
13, 284. 68 Ingalls Iron Works Co--- 2, 831. 46 Ingersoll-Rand Co------- 11, 773. 03
8, 591, 314. 91 Mr. WIGGLESWORTH. Can you give us the total that may have accrued that has not been collected ?
Admiral LAND. I do not know whether we could do that or not. It is pretty hard to say what has accrued and what has not been collected until you get å final audit, and all of those, of course, are delayed.