this committee should determine that the Ship Sales Act of 1946 would be open for these people to purchase these vessels. Mr. Rosas just heard of this hearing the other day and of this legislation and the chairman at the outset of this hearing stated that there would be a time in which to file a statement and facts and data in support of anything presented here.

Senator BIBLE. The hearings will be kept open.

Mr. O'DONNELL. I would like to respectfully request that we be given an opportunity to file such a statement.

Senator BIBLE. That will be granted, and you will have a reasonable time in which to file such a statement. Perhaps you could develop what the company you refer to is. Is that a corporation?

Mr. O'DONNELL. That is a Mexican corporation. It is a small-line operator.

Senator BIBLE. How large a corporation is it?

Mr. O'DONNELL. I really don't know.

Senator BIBLE. Will you supply that information for the record? Mr. O'DONNELL. I will.

(The information requested was received, and is as follows:)

SUPPLEMENTARY STATEMENT OF JOHN A. O'DONNELL, COUNSEL, LINEAS TRES M, MARINA MERCANTE MEXICANA, MEXICO CITY, D. F.

It is respectfully requested that S. 1644, now pending before the Committee on Interstate and Foreign Commerce of the United States Senate, be amended to permit the purchase by Marina Mercante Mexicana of five Liberty ships from the reserve fleet of the United States.

Three M Lines, Marina Mercante Mexicana, is a Mexican corporation (Sociedad Anonima), organized under the laws of Mexico, being a stock company under which issues will be made for the purchase of these ships to be used in the merchant marine service under the Mexican flag.

Application was made to the President of the Republic, Mr. Adolfo Ruiz Cortines, through the Ministry of the Navy, to which the Mexican Government, in a letter dated February 8, 1957, authorized the necessary support to the negotiations of Lineas Tres M before the Government in Washington for the purchase of the vessels herein requested.

The sale of these ships to Mexico will contribute importantly to the economic development of the country thus enhancing the interest of the foreign aid policy of the United States. The fact is that Mexican purchases from the United States last year amouned to $628 million. Seventy-five percent of Mexico's export trade is with the United States. She has always been a good friend and next-door neighbor, and she comes now asking our assistance in the development of her merchant marine.

This proposed amendment will be fully in accordance with the conclusions arrived at in the third reunion of the Ministers of Foreign Relations of the American Republics held in Rio de Janeiro in January 1942, in which the necessity of developing the marine transportation in the American countries was declared to be a vital measure to facilitate the defense of the continent.

CONCLUSION

1. The proposed amendment will not adversely affect any United States shipping interests.

2. The proposed amendment will not cause any expense to the United States taxpayer. To the contrary, it will result in a diminution of expense.

3. The proposed amendment will benefit the Mexican economy, and will help the Mexican people.

4. By so doing, the proposed amendment is in line with United States foreign policy as it pertains to Mexico.

5. Equity and justice will be served by the adoption of the proposed amendment. Mr. O'DONNELL. I believe the Mexican Government is making rep resentations to our State Department with respect to this line at this time.

r. LUCKEY. When you file that statement, will you include therein ther or not if it is on the deferred-payment plan under which you to purchase these vessels, the Government of Mexico would guare payment and whether reconversion work would be done in Amershipyards?

ATEMENT OF HARRY BOWEN, REPRESENTING W. R. CHAMBERLIN & CO., PORTLAND, OREG.

r. BOWEN. I represent W. R. Chamberlin Co., which is a small nship company out on the Pacific coast. Mr. Tennant wasn't able

here.

his is bill S. 2241. This is in regard to a very special type of vesN3-M-A1. There are only about nine of these vessels available. 3 or 4 of them have ever been sold. They were constructed at beginning to transport narrow-gage locomotives. The capacity e vessel is much less than of a Liberty ship and it has a very shaldraft. Because of these characteristics it can be modified for the age of lumber but it is not worth very much in any other kind of de. It could not be duplicated by construction today, because er just couldn't pay the rate that would be necessary to cover the of new construction.

>w, those questions will be asked of previous witnesses and I ed to get that out right away, Senator.

give you some idea about the Chamberlin Co. we have filed a ment, but briefly this is a contract carrier by water operating in Pacific coastwise trade pursuant to authority granted by the ICC. a California corporation with its principal office in Portland. company has been engaged in this business for almost 50 years, ing lumber and lumber byproducts. Our operations extend up lown the entire coast.

e fleet consists of three of these vessels, this N3-M-A1 type. e ships are actually the only vessels of their type which were sold nited States citizens under the Merchant Ship Sales Act of 1946. of them is owned by the company and the other two are under term charter. Chamberlin has equipped all of these ships with al handling gear to carry specific lumber primarily from the west lumber points to the Los Angeles harbor area and San o. The company now applies 72 percent on the ships and 12 d.

e volume of the company has increased. It increased from 1,00 in 1955 to 2,291,000 last year. During the year 1956, the compaid wages to American seamen in excess of $600,000. And paid repairs in American yards of almost $164,000. The comis being offered more volume than it can carry. This, incidentis a reversal of the trend of the last several decades. In the 5, the lumber schooner fleet in the Pacific coastwise trade numover 100. Today, it is down to six vessels.

r need for this particular type of vessel is based on its ability to de into a lumber carrier. A standard vessel, such as the Liberty is unsuitable since the draft is too deep to enter the ports from a lumber will be taken. Likewise, the prewar type of specially ned lumber vessel is no longer suitable by reason of the fact that of the lumber on the Pacific coast has been cut away from the

deep water lumber ports, and the vast majority of ports at which lumber is now available have facilities only for vessels with extremely shallow draft. It might further be added on the subject of prewar vessels that the cost of loading and discharging lumber from these vessels has been so great as to render transportation impractical from a commercial point of view.

Now, as to the possibility of a bare-boat charter, it is necessary to expend a considerable amount of money on these ships. We estimate that it will cost at least $250,000 to reequip each one of them, and therefore the company would be unwilling to spend that kind of money on a chartered ship. Now, I think that puts together the facts in support of this application and this bill. If there is anything you would like us to furnish, we would be glad to.

Senator BIBLE. Do you have any questions, Mr. Luckey?
Mr. LUCKEY. No, sir.

Senator BIBLE. Mr. Bourbon?

I think I have no questions. We are very happy to have this testimony on behalf of Senate 2241.

Will you put me clear as to exactly why you can't go before the Maritime Commission and receive consideration there under existing law? Is that because of the expiration of the Shipbuilding Act of 1946 which expired as to American citizens in 1951?

Mr. BOWEN. Yes, sir.

Senator BIBLE. Is that a correct statement?

Mr. BOWEN. Yes, sir.

Senator BIBLE. That is the basis for seeking this type of legislation? Mr. BOWEN. That is right.

(Mr. Tennant's statement follows:)

TESTIMONY OF JOHN J. TENNANT, PRESIDENT OF W. R. CHAMBERLIN & Co., IN SUPPORT OF S. 2241

W. R. Chamberlin & Co. is a contract carrier by water operating in the Pacific coastwise trade, pursuant to authority granted by the Interstate Commerce Commission. It is a California corporation with its principal office in Portland, Oreg. Since 1902, Chamberlin (or its predecessors) has been engaged in the shipping business, principally in the coastwise carriage of lumber and lumber byproducts. Our operations extend to and from all ports on the Pacific coast.

Our present fleet consists of three N3-M-A1 type vessels. These ships are actually the only vessels of their type which were sold to United States citizens under the Merchant Ship Sales Act of 1946. One of them is owned by Chamberlin, and the other two are under long-term charter from the Ocean Towing Co. Chamberlin has equipped all of these ships with special handling gear to carry Pacific lumber primarily from the Northwest lumber ports to the Los Angeles Harbor area in San Diego. The total number of personnel employed on board these 3 ships number some 72 persons. In addition to these personnel, a further 12 persons are employed shoreside at the 3 offices of the company in Portland, Oreg., Wilmington, Calif., and Crescent City, Calif.

The volume of business done by Chamberlin is increasing. In 1955, our volume of business was in excess of $1,400,000. Last year the volume increased over 50 percent and reached a total of $2,219,000. With this increase in business, we expect continued and expanding employment for American seamen, American yards, and American stevedores. During the year 1956, W. R. Chamberlin & Co. paid wages to American seamen in an amount in excess of $608,000. This amount does not include vacation pay and other fringe benefits. Similarly, in the same period, W. R. Chamberlin & Co. caused various repairs to be made in American yards in an amount of almost $164,000. To these amounts there should also be added substantial amounts resulting from the employment of stevedores and others as a result of the operations of W. R. Chamberlin & Co.

e are being offered more business than we can handle with our present This is a reversal of the trend of the last three decades. In the thirties, umber schooner fleet in the Pacific coastwise trade numbered over 100it is down to 6 vessels.

R. Chamberlin & Co. is wholeheartedly in support of S. 2241. We believe the bill will be highly beneficial to any coastwise operator whose operations re the type of vessel specified in the bill.

r need for the N3-M-A1 type of vessels is based on the fact that this type is fully suited to the type of lumber carriage in which we engage. Standessels such as Liberty type vessels are unsuitable, since their draft is too to enter all the ports from which lumber will be taken. Likewise, the ar type of specially designed lumber vessel is no longer suitable and indeed st obsolete by reason of the fact that most of the lumber on the Pacific coast een cut away from the deepwater lumber ports, and the vast majority of at which lumber is now available have facilities only for vessels with mely shallow draft. It might further be added, on the subject of prewar Is, that the cost of loading and discharging lumber from these vessels has so great in the past as to render transportation on these vessels imprace from a commercial point of view. The availability of American-flag is for use in coastwise trade is limited not only by the requirement of a w-draft vessel, but also by the fact that, even if deep-draft vessels could be red, the cost of converting them to a lumber operation would be prohibitive ms of the vessels' earning capacity.

does the possibility of a bareboat charter of these ships from the Governoffer any reasonable solution to the problem of getting more tonnage into astwise lumber trade. The reason for this is that the high cost of reactivaand the special handling gear that would have to be installed to make a c lumber operation successful would require an extremely substantial capivestment. Consequently, it is not feasible to expend in reactivation and ipment an amount of capital which, in all probability, would exceed the cost rchasing the ship from the Government. If it is necessary to expend a capital investment, it seems to us to be only good business practice that ould also be able to purchase and obtain title to the vessel on which we ying out our capital.

è capital outlay for reactivation and reequipment may run into several ed thousand dollars. Reactivation (including scraping down, repainting, ng, possible new radio requirements, etc.) will be in the nature of $125,000. sum will be required for reequipment, depending upon the type of equipinstalled. For example, the cost of a pair of cranes suitable for a lumber ion may run anywhere from $90,000 to $200,000. Furthermore, other outwill be necessary for certain other lumber-type equipment; for example, ximately $16,000 worth of special lumber slings will be required to put ssel into effective coastwise lumber operation.

respectfully submit that when a capital outlay for reactivation and rement in an amount of $250,000 is required, it becomes almost essential from ness point of view that the vessel should be purchased rather than merely -red by the party who is required to expend the capital.

The

his legislation becomes effective, Chamberlin will be fully qualified as a ective purchaser of this type of vessel. We have over 50 years of experience emonstrated ability to operate in the Pacific coastwise lumber trade. ve the necessary financial resources and other qualifications called for by l or which the Maritime Administrator could reasonably insist upon. sels of the N3-M-A1 type are virtually the only ones suitable for our type ration. None of them is available other than in the reserve fleet. ition of such a vessel would be no temporary thing. We desire to expand o be able to carry the cargo which is presently being offered to us and is more than we have available space to move. The passage of S. 2241 result in yet another American-flag vessel being put into active service. seamen, stevedores, and shipyard men would be employed as a result of tivation of these vessels, and more space would be available on the Pacific for the carriage of lumber necessary to meet the demands of the aboveal-average expansion of the west coast economy.

ally, I would like to thank the committee for the time and the attention hey have given me. In our opinion S. 2241 is a bill of real importance will make available to shippers capacity which would otherwise remain rage. It will make available to operators a very special type of vessel is, in practical effect, unobtainable elsewhere.

Senator BIBLE. Mr. John Laxalt, representing Transportes Maritimos Mexicanos, S. A.

Mr. Laxalt, we are very happy to have you with us and you may be accompanied by whoever you have with you.

STATEMENT OF JOHN M. LAXALT, REPRESENTING TRANSPORTES MARITIMOS MEXICANOS, S. A.

Mr. LAXALT. I am accompanied by Mr. Enrique Rojas, general manager of Transportes Maritimos Mexicanos.

Senator BIBLE. I wonder if you would tell us something about the company. Is that a Mexican corporation?

Mr. LAXALT. It is a Mexican corporation, Mr. Chairman, and I have an economically drafted prepared statement here which I would like to read, if possible, and later it can be amplified.

Senator BIBLE. In the statement do you elaborate upon the nature of the corporation?

Mr. LAXALT. I do not dwell upon the nature of the corporation at all in the statement, but I can say a few perfunctory remarks with regard to it and then I will turn to Mr. Rojas to develop the nature of the corporation in detail.

Senator BIBLE. I think it might be well before you get into your prepared statement, if you do not cover that point, to make the record clear as to exactly what type of corporation that is.

Mr. LAXALT. It is a Mexican corporation incorporated in Mexico, 2 years ago, and has operated as a steamship company in Mexico since that time. They presently have two vessels in operation. The principals involved in the company.

Senator BIBLE. Where do you operate the two vessels?

Mr. ROJAS. Right now we have been operating mainly Mexican cargoes, bringing some cargo to the United States, but mainly Mexican

cargoes.

Senator BIBLE. From what ports to what ports?

Mr. ROJAS. Right now we have been operating mainly between American ports and Mexican ports.

Senator BIBLE. You may proceed, Mr. Laxalt.

Mr. LAXALT. Do you care for more details on the corporation, Mr. Chairman?

Senator BIBLE. Whatever further information you have.

Mr. LAXALT. I would like to mention some of the individuals in the corporation.

One is Mr. Juan Cortina, board of directors, Banco de Londres y Mexico, S. A., and also head of important Mexican insurance companies. Other individuals are Julio Serrand, who is the director general of one of the largest cement plants in Mexico.

Jorge Larrea, who is a principal contractor in Mexico, and Mr. Enrique Rojas, who is present here today, is a former executive of a subsidiary company of Banco Nacional de Mexico.

Senator BIBLE. Thank you. You may proceed with your prepared

statement.

Mr. LAXALT. Senator, I am here on behalf of S. 1644, which is a bill to authorize the sale of four merchant-type vessels to citizens of Mex1eo for use in the intercoastal trade of Mexico.