certain floors. On the C1-MAV-1 type vessel the floor price is $693, 862. 15. Mr. LUCKEY. Depreciated to what date? Mr. SHAPIRO. Until the closing of the act. Mr. LUCKEY. In other words, until March 1, 1948, and not January Mr. SHAPIRO. No, Mr. Luckey, that is not quite it. The statute itself said that no sales price shall be, in the case of a dry-cargo vessel, below 35 percent of the domestic war cost. Thirtyfive percent of the domestic war cost on this vessel is $693,862. In the case of Liberties, it said 312 percent of the domestic war cost, and that brought it down to five-hundred-forty-four-thousand-and-someodd-dollars. Mr. LUCKEY. So this is 35 percent of the domestic war cost, undepreciated, at all? Mr. SHAPIRO. That is right. Mr. LUCKEY. I have no further question. Senator COTTON. Thank you, Mr. Shapiro. You have a statement, Mr. Anderson. Do you wish to read the statement? STATEMENT OF J. C. ANDERSON, EXECUTIVE SECRETARY, AMERICAN TRAMP SHIPOWNERS ASSOCIATION, INC.; ACCOMPANIED BY MARVIN J. COLES, COUNSEL TO AMERICAN TRAMP SHIPOWNERS ASSOCIATION, INC. Mr. ANDERSON. We will submit the statement if desired. However, t is only two and a half pages. Senator COTTON. Go right ahead. Mr. ANDERSON. My name is James C. Anderson. I am executive ecretary of the American Tramp Shipowners Association, Inc., which as a membership of 21 companies owning 44 American tramp vessels rincipally of the Liberty type. I desire on behalf of the association to dd a short supplement to the joint statement given by the representave of the American Merchant Marine Institute on behalf of the inustry, in which we concur. The purpose of this supplementary stateent is to emphasize one aspect in the proposed legislation which more rticularly affects American tramp shipping. The sale of vessels to foreign registry for transportation of coal om the United States to Western European nations is of great conrn to our membership. The export of coal is a very important part our United States foreign commerce. The Merchant Marine Act 1936 sets forth very clearly the policy of the United States as rerds the protection and development of its foreign commerce. This claration of policy in effect says that the United States shall have - this purpose a merchant marine owned and operated under the ited States flag by citizens of the United States and composed of most suitable type of vessels sufficient to carry 50 percent of our erborne export and import foreign commerce. In spite of this laration of policy it is proposed to sell surplus United States Govment-owned vessels to foreign nationals to be used by them in the nsatlantic coal trades, not only to their individual countries but ther NATO nations. The trade in which these vessels will be operated under foreign flag is generally referred to as the service between the east coast of the United States and the Bayonne-Hamburg range of Western Europe. I would like to submit the following figures compiled by our association from the monthly reports of the Bureau of the Census-report FT 1000-for the year 1956, covering the oceanborne dry-cargo statistics for this service: Bayonne-Hamburg range—Oceanborne dry-cargo exports from east coast, United States, 1956 It will be noted that foreign vessels during the last year carried 92.3 percent of our exports in this, the most important trade route, insofar as cargo tons are concerned, in our foreign commerce. It will be further noted that the foreign tramp ships alone carried 85.4 percent of this vast tonnage, 11 times the tonnage carried by our American merchant marine-liners and tramps combined. It is obvious that there is no need on the part of this Nation to increase foreign flag tonnage in this trade. It is the feeling of our membership that our Nation at this time should rather be devoting its thought and energies to the protection of our foreign commerce by increasing the percentage of carriage of these cargoes by privately owned American rather than foreign tramp vessels. We have long and earnestly advocated extension of the operating differential subsidy provisions of the act of 1936 to American tramp vessels. There is presently a bill in committee on this subject. Given such assistance and support by its Government, American tramp vessels would be enabled to actively compete with the tramp vessels of foreign nations and the rates for coal cargoes would in due course be reduced to a level making American coal competitive in price in our foreign markets. The American Tramp Ship Owners Association is deeply disappointed that means are being sought by which the United States is asked to develop the bulk-carrying fleets of foreign nations, while the American tramp fleet is dependent solely for its existence upon the uncertain continuance of 50-50 Government-sponsored cargoes. Our members are ever faced with the grim certainty that the moment such cargoes are no longer available to their vessels, the American tramp fleet will be driven from the seas. Senator POTTER. Mr. Anderson, we have with us this morning Mr. Marvin Coles, your attorney. We also have with us Senator Cooper, who is here, and he has another committee meeting to attend. If we could break into your testimony now that you have finished your prepared statement Senator COOPER. May I interrupt and say, Senator Potter, I appreciate very much your courtesy, but if it is all right, I would like to listen to Mr. Anderson. I thank you. Senator POTTER. Mr. Anderson, in other words, your tramp fleet today is really in existence just because of the 50-50 percent provisions, that we are to carry 50 percent of Government cargo? Mr. ANDERSON. Very largely, yes. Senator POTTER. Is it the feeling of your association that the sale of these ships below world market price would be in direct competition with the American-owned tramp fleet, is that correct? Mr. ANDERSON. That is correct. Senator POTTER. And you are having a difficult time maintaining a competitive position as it is? Mr. ANDERSON. We are having a difficult time maintaining our ships in operation even with the 50-50 cargoes. Mr. LUCKEY. Mr. Anderson, for the record, would you submit a list of your membership in the American Tramp Ship Owners Association? Mr. ANDERSON. I will be glad to. (The document above referred to is as follows:) Membership of American Tramp Shipowners Association, Inc., June 1957, and number of owned vessels on Jan. 1, 1957 Active members: Arrow Steamship Co., Inc.. Elam Shipping Corp-- Liberty Navigation, Inc----. Starboard Shipping, Inc_. Overseas Navigation Corp--- Blidberg Rothchild Co., Inc--- Orion Shipping & Trading Co., Inc---- Actium Shipping Corp.. A. L. Burbank & Co., Ltd__. American Union Transport, Inc. T. J. Stevenson & Co., Inc.-. Victory Carriers, Inc____ Kea Steamship Corp_ Maritime Overseas Corp__ Navigation Steamship Corp--. ssociate members: Polarus Steamship Co., Inc.-. American Foreign Steamship Corp--- Mr. LUCKEY. You give the figures and statistics on the Bayonneamburg range. The 5.3 percent is represented by the tramps on ge 1. Mr. ANDERSON. No, there are other tramp vessels as well. There s been a breakout of ships from the Government reserve fleet. They - all included in this figure. Mr. LUCKEY. What was the size of the American tramp fleet about ear or 18 months ago? Ir. ANDERSON. It was close to 95 or 100 ships. Ir. LUCKEY. What happened to the other ships? Ir. ANDERSON. Due to economic conditions, it was necessary for the mp owners to transfer some of them to foreign flags. Mr. LUCKEY. In your foreign tramps, there are statistics here of 85.4 percent. Does that include the American flag ships that have been transferred to foreign flags? Mr. ANDERSON. It might include some of them, yes. Mr. LUCKEY. I wonder if you could give us a breakdown of American flag ships that have been transferred to foreign flags, what percentage of this cargo they carry? Mr. ANDERSON. I doubt if even the Bureau of the Census could give the carryings, here, ship by ship, and that would be necessary because there is no classification there. They are classified as foreign ships. Mr. LUCKEY. Every time an American flag tramp is transferred to a foreign flag, then it becomes a foreign flag even though it is owned by an American company? Mr. ANDERSON. That is correct. Mr. LUCKEY. And, therefore, it becomes competitive to an American flag tramp, is that not correct? Mr. ANDERSON. In certain respects, except that the American tramps at the present time because of the world rates cannot compete in the foreign market. So to that extent they are not competitive. Mr. LUCKEY. They are also not competitive in the 50-50 cargoes that are available to American-flag tramps only? Mr. ANDERSON. The 50 percent is reserved for American-flag vessels. Mr. LUCKEY. The point I am trying to make is when an Americanflag tramp is transferred foreign, all of the cargo that it carries merely falls into the statistics of a foreign-flag vessel, even though it previously was an American-flag tramp and at present is owned by an American citizen. Mr. ANDERSON. That is correct. Of course, we must bear in mind, too, that the number transferred, which I believe was 60, is only a very minute portion of the foreignflag tramp fleet. Mr. LUCKEY. That is what I was trying to find out because I believe your statistics are somewhat misleading inasmuch as they indicate that the foreign tramps consist of foreigners only, when as an actual fact, it consists of American owners of foreign-flag ships. Mr. ANDERSON. There are American owners of foreign-flag ships in all of the categories in the merchant marine. Mr. LUCKEY. That is true. Mr. ANDERSON. Many of our tankers are foreign-flag owned by Americans. Mr. LUCKEY. That is correct. Mr. ANDERSON. But this was a case of dire necessity. It was a case of transferring those ships or going out of business. There was no way of avoiding it. We had 90 ships in lay-up at the time, costing about $4,000 a month for maintenance. An individual owner of 1 or 2 ships can't afford that expense. Mr. LUCKEY. No, that is true, sir, but it seems to me that when you transfer an American-flag vessel foreign you are merely giving yourself a foreign competitor, immediately. Mr. ANDERSON. To the extent of the number of ships. It was only a small part of the foreign tramp fleet. Mr. LUCKEY. Is there any way you can give the committee the percentage of cargo carried by that small portion? Mr. ANDERSON. They are engaged in the worldwide trade and there is no way of finding out what they have in any particular service. Mr. LUCKY. Where do you get your figures? Mr. ANDERSON. From the Bureau of the Census. But this is for the whole service and the only classification is foreign ships and American ships. There is no subclassification of the foreign ships as to whether they are American owned or otherwise. Mr. LUCKEY. But the Bureau of the Census gives the total carriage by the names of the vessels. Mr. ANDERSON. Not by individual names. Mr. LUCKEY. How do they compile them? Mr. ANDERSON. They probably have punchcards that are made up from individual reports. But there are thousands of these ships and I doubt if they could even run them through for a period of a year. Senator POTTER. Of your 44 ships owned by the 21 companies that you represent, I assume all those ships were bought under the Ship Sales Act? Mr. ANDERSON. No, not all of them. Some were bought under the Ship Sales Act and members have acquired ships since. They have picked up a number of Victories and a number of C-2's that have been sold by some of the liner companies. Senator POTTER. They were still purchased under the act, weren't they? Mr. ANDERSON. They were originally sold to other owners under the act, oh, yes. Senator POTTER. But the ships to be sold foreign as proposed in these various bills would actually give your foreign purchasers a much better bargain than they gave you, isn't that correct? Mr. ANDERSON. Absolutely it would. We concur in the statement made by the American Merchant Marine Institute to that effect. Senator POTTER. I remember when I was a Member of the House of Representatives and served on the Merchant Marine Committee over there, there was always a great fear by the maritime industry hat the very thing would happen that is happening now, that ships would be sold foreign and at lower price. Mr. ANDERSON. I would like to comment for a moment on the bill proposed by the Maritime Administration: We are in sympathy ith the desire of any nation to carry its coastwise cargoes in the ational flag vessels. There are two points, however, that we might question in this bill. ne is that as far as we can see with a quick reading of the bill, here is no stipulation in that bill and I don't see how, if it were at in, how it could be policed. That these vessels purchased for se in the coast wise trade might not replace other vessels which would released, then, to the worldwide trade in competition with the merican ships. And a second point is that the Government in selling these vessels the conditions proposed which are quite favorable to the Governent, is adopting a policy which is denied to the private shipowners. Now, our war-built tonnage is getting old. We will have to prole ways and means or find ways and means to replace these vessels ve are to continue in the tramp trade. The private owner does not have the right to sell his ships foreign I obtain a reasonable rate for his ship which might assist him in |