Senator BIBLE. Mr. Bourbon.

Mr. BOURBON. You say you would like to get ships that are under charter now and being returned, and therefore you wouldn't add any new ships to the number of operation.

Mr. SMETHURST. That would be the preference; yes.

Mr. BOURBON. Isn't it a fact though, that the ships will be returned from charter for one specific reason, and that is that the companies who have them believe that there is not enough business to justify keeping them. As a matter of fact, some of them already, I think, have been returned for that very reason.

Mr. SMETHURST. I think that is a good estimate; I don't know. It may be that the use the ship has been put to by a particular company may have the need for it may have terminated, but there may be another area where that ship could be employed properly. I just don't know.

Mr. BOURBON. Now you do say in your statement that you expect it would take 10 years to earn the $412 million that would represent the construction differential subsidy. When would you build your ships, at the end of that 10 years?

Mr. SMETHURST. No, sir; this plan is to proceed immediately.

Mr. LUCKY. One more question, sir. If you operate these vessels and do not make a profit

Mr. SMETHURST. That is our risk.

Mr. LUCKEY. You would still build?

Mr. SMETHURST. That is right.

Mr. LUCKEY. Very well.

Mr. BOURBON. That is all.

Senator BIBLE. Any further questions?
Thank you, Mr. Smethurst.

WASHINGTON, D. C., July 17, 1957.

Re supplemental information re hearings on S. 2403.

SENATE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE,

(Attention: Mr. Bourbon, Senate Office Building, Washington, D. C.) Gentlemen: On July 11, during the hearings on miscellaneous ship-sales bills, I was requested to submit additional information regarding ownership of National Shipping and Trading Corp., names of other companies through which stockholders of National Shipping may have purchased other vessels from Maritime and finally, suggestions for amendment of S. 2403 to provide charter, rather than sale, of reserve fleet vessels in consideration of new construction in American yards.

I am informed by my clients that Thomas A. Spears, president of the National Shipping and Trading Corp., owns 75 percent of the stock of that company. The remaining 25 percent is owned by Mr. John Theodoracopulos, also an American citizen.

Attached hereto is data supplied by National Shipping listing vessels purchased by other corporations in which Messrs. Spears and Theodoracopulos are stockholders.

Also attached is suggested revisions of S. 2403 incorporating charter authorization and miscellaneous changes designed to meet objections raised by a representative of the Association of American Railroads and other points raised during the public hearing.

May I emphasize again that National Shipping and Trading Corp. is not proposing a ship-construction program to begin sometime in the indefinite future. It proposes to begin immediately, provided legislative authorization should be forthcoming. May I also point out, with reference to the purchase price formula in S. 2403, that the construction aid sought by our clients seems not greatly different than the aid presently available to ship operators under the trade-in and build program.

ne further point should be emphasized. Our clients do not propose, nor we believe S. 2403 results in discrimination against subsidized carriers. Purse of vessels would be open to any qualified ship operator, subsidized or bsidized. However, neither the ships purchased, nor the new vessels to uilt, would be eligible for operating differential subsidy. And that appeared ur clients as designed to minimize the burden on the taxpayer and not to tion the need or desirability of construction or operating subsidy in services re subsidy is now needed or is appropriate.

Very truly yours,

We have one final witness, Mr. John Ingoldsby.

R. S. SMETHurst.

r. BOURBON. Senator, Mr. Ingoldsby was on last week and didn't ify, and asked his statement be put in the record. Here is his origstatement, and he wants to make a statement in addition to that. has already asked this statement be inserted.

r. INGOLDSBY. I think it will get the same consideration, Mr. irman, by submitting it. I wish to appear only for the purpose of wering the testimony of

enator BIBLE. Before you proceed, let's place in the record in full tatement that you have handed to the Chair together with a letter ransmittal and certain supporting letters that you have from the nber of Commerce of Greater Wilkes-Barre and the Anthracite tute. This will be made a part of the record at this point and porated in full, and now you may comment upon your testimony. The material referred to is as follows:)

Statement of JOHN L. INGOLDSBY, JR.

Chairman, I am appearing before your committee in support of S. 2378 on f of my client, Antoine Vloeberghs, S. A., of Antwerp, Belgium.

· Vloeberghs organization is one of the three principal coal importers of im. It operates a fully integrated coal processing and distribution system t imports and distributes throughout Belgium and neighboring countries reds of thousands of tons of coal per year.

lieve that Senator Clark and other witnesses have and will have explained è committee the development of the sale of Pennsylvania anthracite to erghs for distribution in Belgium and the Netherlands, and I will save mmittee's time by skipping over the background and coming directly to int of what our problem is today.

Vloeberghs stands committed to purchase in excess of 1 million tons of cite per year from the Pennsylvania mines provided he can move this om the port of Philadelphia to ports in Belgium and the Netherlands at sonable rate for this particular commodity. Our big problem is that a able rate for this commodity is a lower rate than what is generally con 1 reasonable for the shipping industry as a whole.

sylvania anthracite in the export market is competitive with anthracite Wales and from Russia. I am informed by experts in the Vloeberghs zation and in the Hudson Coal Co., which is and will continue to be a al supplier of Vloeberghs, that the ocean freight rate on this coal cannot average exceed $6.50 per ton and continue to be competitive with coal Cussia and Wales.

ar as Vloeberghs is concerned he has no control over what ocean rate is able or unreasonable. If the rate goes beyond a certain point, sound ss requires him to purchase less from Pennsylvania and more from an anthracite producers. Vloeberghs is anxious to satisfy the increas gian consumer demand for Pennsylvania anthracite and to substantially se his purchases, should it be possible to stabilize the delivered price of cite by stabilizing the ocean freight rate. This Belgian consumer demand nnsylvania anthracite can only be satisfied by the importer if he can to the Belgian consumer a stabilized delivery price and a constant source ly of uniform quality.

to 1956 Vloeberghs had not purchased any Pennsylvania anthracite. In o meet the demand of the Belgian anthracite consumers, he chartered

foreign flag vessels at the going market rate and actually imported approximately 290,000 tons of anthracite.

In February, March, and April of 1956 I conducted extensive negotiations with New York shipowners and brokers endeavoring to work out some longrange charter at a low rate. The idea was that if we would offer a sufficiently long-term guaranty of employment of several ships, the owners might feel justified in granting us a rate which was sufficiently under the then existing market, to justify the reduction. We were never able to work this out because the shipowners elected to gamble on the possibility of high rates in the future rather than settle for smaller but fixed long-term rates. And sure enough, the owners were right, at least up to the present time, because in late February or early March of this year, having been caught in a desperate situation, we were forced to charter a vessel at a rate of $17.50 per ton.

In the summer of 1956 we were hopeful that the newly formed American Coal Shipping Co., with its plans for the charter of 30 Government-owned vessels, would provide the solution to the Pennsylvania anthracite-Vloeberghs problem, and at that time we commenced negotiations with that company for the charter of four Liberty-type vessels. When negotiations commenced, we had every indication that we could obtain from that company four 1-year charters at a rate some place between $8 and $8.50 per ton. This figure is not in conflict with the $6.50 figure which I have stated would be reasonable for this commodity. This was in the nature of a desperate move in order to get through the 1956–57 season. We encountered a variety of delays and finally succeeded in executing a charter for 1 year for only 1 ship instead of 4 and the market had gone upward so rapidly that the charter rate was $11.75 per ton. As time went on, the situation became even worse and we were never able to obtain delivery of even the one vessel from American Coal Shipping.

I do not mean to imply the slightest criticism of American Coal Shipping. They were cooperative and they tried desperately to be of assistance to the anthracite industry. Labor difficulties and other circumstances beyond their control made it impossible for them to be of assistance. Nonetheless, we are grateful to them for the assistance which they tried to give and for the spirit in which they tried. I believe it unnecessary to labor the point further.

We have for more than a year and a half continuously worked with the charter market, both American and foreign flag, and we have never been able to work any reasonably long-term arrangement under which Pennsylvania anthracite can move to the European ports.

The obvious alternative is to negotiate in the ships sales market, but that offered no escape from the problem which Vloeberghs had. When these ships were desperately needed in late 1956 and early 1957, the foreign-flag Liberty market had reached the astonishing price of $1,900,000 for a Liberty vessel. While the price has dropped considerably from February and March of this year, up to the present time the market still does not justify Vloeberghs purchasing these vessels under existing conditions.

We have worked in close cooperation with the Hudson Coal Co. and with other coal companies in Pennsylvania and neither they nor we can find any solution which will permit Pennsylvania anthracite to move in large volume from the mines to the ports of Belgium and the Netherlands other than to seek authority from the Congress to purchase sufficient Liberty dry-cargo coal-carrying vessels to transport this commodity at a rate which will be competitive.

We are hopeful that the unique circumstances which relate to the anthracite industry and to the needs of the people of Belgium and neighboring countries will be found by this committee to be sufficient to justify the exceptional consideration which we ask. The acquisition of five Liberty ships by Belgium or its citizens would assure stabilized ocean freight rates for anthracite so as to make it advantageous for the Belgian consumer to maintain a continuing and expanding relationship with American anthracite producers. The assurance of a regular source of supply, sufficient to meet the requirements, and a stable price for anthracite are factors which no doubt would contribute to the economy of Belgium.

The unfortunate fact is that no matter how much Mr. Vloeberghs wants to purchase Pennsylvania anthracite in substantial tonnage, the economics of the situation are such that it will be impossible to do so without a low and stabilized ocean freight rate. We trust that the circumstances of this particular situation will justify the committee's favorable consideration of S. 2378.

I assume I should be permitted to file with the committee the written views of the various interested parties in support of this bill prior to the close of the hearings.

1. WARREN G. MAGNUSON,

WASHINGTON, D. C., July 8, 1957.

Chairman, Senate Interstate and Foreign Commerce Committee,

Washington, D. C.

EAR SENATOR MAGNUSON: I wish to submit herewith for the consideration of committee the following letters and documents in support of S. 2378:

1. Letter from Scranton Chamber of Commerce, dated June 7, 1957;

2. Letter from Greater Wilkes-Barre Chamber of Commerce, dated June 7, 1957;

3. Letter from the Anthracite Institute, Wilkes-Barre, Pa., dated June 7, 1957, together with the Anthracite Institute Bulletin of May 29, 1957. though these letters request the committee's consideration of H. R. 7899, are either directly or in principle in support of S. 2378. At the time they e prepared the Senate bill had not been presented and proper identification impossible.

Very truly yours,

JOHN L. INGOLDSBY, Jr.

WARREN G. MAGNUSON,

SCRANTON CHAMBER OF COMMERCE,
Scranton, Pa., June 7, 1957.

Chairman, Senate Interstate and Foreign Commerce Committee,
Washington, D. C.

AR SENATOR MAGNUSON: With reference to House bill H. R. 7899 and the x companion bill to H. R. 7899 authorizing the Secretary of Commerce to fer not more than five Liberty type dry-cargo merchant vessels to the Govent of Belgium or to the citizens of Belgium under certain terms of payment estricting the use of said vessels to the export of anthracite coal from the of Philadelphia to ports in Belgium and the Netherlands:

s our understanding that such vessels would implement the exportation of sylvania anthracite to Western Europe through stabilization of transportaposts. As you know, Scranton is in class 4 labor surplus category, with ximately 10 percent of the labor forces unemployed.

e export of anthracite to Western Europe has shown tremendous increase he past year and movement of this product to Western Europe has resulted es of this commodity over and above the normal markets in the United and Canada, thus increasing employment in the anthracite industry and ing work for our people.

Scranton Chamber of Commerce, in urging the passing of these bills, is in the interest of the people of our area. The anthracite industry is y important to us, as you well know. We are fighting a terrific battle to ain jobs in our area, and our people have pitched in on a self-help program known the country over.

have appreciated tremendously the understanding help that our legisrepresentatives have given. We are still a labor surplus area with almost cent of our population unemployed. We need your continued help and t and hope that in this instance you will see your way clear to support the tion referred to.

kindest regards,

Sincerely yours,

WILLIS W. JONES, Executive Vice President.

GREATER WII KES-BARRE CHAMBER OF COMMERCE,
Wilkes-Barre, Pa., June 7, 1957.

ARREN G. MAGNUSON,
airman, Senate Interstate and Foreign Commerce Committee.

MR. MAGNUSON: The Greater Wilkes-Barre Chamber of Commerce, 1 in northeastern Pennsylvania in the heart of the anthracite region, y supports the Senate bill which is a similar bill relating to House 9. This bill in part states that the Secretary of Commerce be authorized Senate and the House in the United States of America, within a period onths, to transfer to the Government of Belgium or to the citizens of 1, 5 dry cargo vessels provided that such vessels be used by the GovernBelgium in the hauling of anthracite coal.

Inasmuch as this area has suffered a setback due in part to the reduction of the mining industry, we are in favor of this bill, the theory being that it would increase our mining production.

Yours very truly,

EDMUND H. POGGI, Jr.,

President, Greater Wilkes-Barre Chamber of Commerce.

Hon. WARREN G. MAGNUSON,

ANTHRACITE INSTITUTE, Wilkes-Barre, Pa., June 7, 1957.

Chairman, Interstate and Foreign Commerce Committee,
United States Senate, Washington, D. C.

DEAR SENATOR MAGNUSON: We request your favorable consideration of H. R. 7899 covering the sale of five Liberty-type cargo merchant vessels to Belgium. The anthracite industry tonnage has been declining for several years but showed a slight increase in the year 1956 due almost entirely to overseas exports. Page 3 of our May 29 Bulletin, atached, shows our exports by countries including substantial shipments to Belgium and The Netherlands.

A serious obstacle to anthracite exports is the scarcity of ships to transport the coal. This scarcity is reflected by the fact that ocean freight rates to Antwerp-Rotterdam were as hight as $16.50 per ton last year.

Sincerely yours,

F. W. EARNEST, Jr., President.

[Anthracite Institute Bulletin, May 29, 1957]

COAL YEAR OVERSEAS EXPORTS

Exports of anthracite to countries other than Canada amounted to 285,000 tons in March, as compared with 201,000 in February and with 119,000 tons in March a year ago.

As a result, the coal year total was 3,269,000 tons, a gain of 2,268,000 tons or 227 percent over 1955–56.

Comparisons are shown below by periods of months and by countries of destination during the past 2 coal years. Also shown, are Bureau of Mines estimates of the tonnages of the different sizes exported in March and the first quarter of this year. A large proportion of the tonnage shipped to The Netherlands was reconsigned to other countries of ultimate destination.