On or about January 26, 1972, the NCA, AGC, CEC, and IECIC presented to your committee their views concerning the proposed legislation to encourage the expansion of foreign trade under the export Expansion Act S. 2754. The H. K. Ferguson Company wishes to advise you that we wholly support the proposals presented and request your serious consideration of that bill. Very truly yours, L. R. MANNING, Secretary-Treasurer. Hon. WARREN G. MAGNUSON, U.S. Senator, Old Senate Building, BECHTEL CORP., DEAR SENATOR MAGNUSON: Bechtel Corporation is one of the world's leading engineering-construction and management services organizations with diversified activities under way in 30 countries on seven continents, and in 30 states across the United States. Its corporate headquarters are in San Francisco. Permanent offices are located in Los Angeles, New York, Houston, Washington, D. C., Toronto, Montreal, Paris, London, The Hague, Melbourne, Mexico City and Tokyo. We are active in projects for many basic industries. These activities include environmental and nuclear power, mining, chemical, petrochemical, refinery, pipeline, food and paper. It also serves and public sector with work in water use and conservation, pollution control, rapid transit, airport development and space programs. We support the proposed legislation encouraging the expansion of foreign trade and improving commercial services available in the U. S., and overseas, and support the objectives of this bill. This bill recognizes and proposes to remedy some problems which contributed to the poor Balance of Trade, and the resulting negative Balance of Payments in 1971, contributing to the domestic and international conditions which brought about the New Economic Policy inaugurated in mid-August, 1971. We feel that this bill promotes and fosters an attitude consistent with our philosophy of competitive endeavor in the world market. The bill also provides U. S. exporters elements of support which have been lacking in the past, and eliminates handicaps which have hampered efforts in meeting foreign competition. In conclusion, we concur with the intent of this bill, and express our support enabling us to better meet foreign competition on a more equal basis. We respectfully urge your favorable consideration when this legislation comes to a vote. Yours very truly, R. ERIC MILLER, Vice President. COMMERCIAL SHEARING & STAMPING CO., Hon. DANIEL K. INOUYE, SIR: We reply to your letter of February 15, 1972, regarding bill S. 2754 which the Senate Subcommittee on Foreign Commerce and Tourism currently has under consideration. Title IX of bill S. 2754 proposes measures dealing with freight rate disparities such as have been experienced by Commercial Shearing & Stamping Company. The problem of freight rate disparities was first brought to our attention in September of 1969 by Mr. James Mazure, Director, Bureau of Compliance, Federal Maritime Commission. Since that time we have applied to both the Far East Conference and the Pacific Westbound Conference for adjustment in our rates and both Conferences have refused to make any adjustment whatsoever in the ocean rates on our products. On July 14, 1971, we wrote to Mrs. Helen Delich Bentley, Chairman, Federa Maritime Commission, furnishing her with copies of our applications for adjustment and the correspondence pertaining thereto with both of the aforementioned conferences. No further action has been taken. In order that you might be completely advised of the action we have taken and the results thereof, we are attaching hereto a complete file of our applications to the Far East Conference and the Pacific Westbound Conference as well as brochures pertaining to the products involved. In Japan, one of the major factors used in determining what hydraulic components are used on an application is cost. If the freight rates can be reduced by 30%, this should have an extremely beneficial effect on our sales in the Japanese market; especially since duties and handling fees are based upon a C.I.F. value. If we could equalize our competitive position by reduction of the freight rates, we feel that an immediate increase of 10% would directly result. In the long range view (two years) we could possibly realize an increase of 35% of our sales volume directly related to a reduction of our cost. Commercial Shearing & Stamping Company wholeheartedly endorses enactment of such legislation as is proposed to Title IX of bill S. 2754. We trust that the attached files will help you to clearly understand our competitive position without the protection as would be afforded us under the provisions proposed in Title IX of bill S. 2754. Commercial Shearing & Stamping Company respectfully requests that this legilsation be acted upon expeditiously and favorably by your Committee. Very truly yours, Hon. DANIEL K. INOUYE, J. L. THORNBURG, Traffic Manager. DRAVO CORP., Pittsburgh, Pa., February 17, 1972. Old Senate Office Building, Washington, D.C. DEAR SENATOR INOUYE: We urge your support and favorable consideration of the legislation proposed in Bill S. 2754 which would create a more favorable exporting environment by establishing various programs and facilities. We feel this Bill will support our efforts to meet foreign competition more equally and help create a balance of payments more favorable to the U.S. Dravo Croporation and its subsidiary companies are actively engaged throughout the free world in the engineering and construction of a variety of major projects; the total value of which is currently in excess of $160,000,000. Provisions of this Bill would provide Dravo Corporation and other U.S. companies similarly situated with the kind of support which has been lacking in the past, but which our foreign competitors have long benefited from. It is respectfully requested that Bill S. 2754 be reported favorably by your Subcommittee. DEAR MR. ROUVELAS: I am writing at the suggestion of Senator Inouye in response to his letter of February 15th. Because we are shipping a commodity of very low unit value in relation to weight, ocean rates are critical to us in our attempt to compete with European and Far Eastern made merchandise. I am enclosing a copy of my letter of September 30, 1969 addressed to James E. Mazure, and as you are most probably aware, rates have increased substantially since that time. Most of what is trying to be accomplished by the federal government, as well as the private sector, in the effort to expand United States exports, is being off-set by the constantly increasing costs of moving the product. This would include inland freight, pier delivery and port handling charges, as we as the constantly increasing ocean freight rates. I most heartily welcome the Senate's interest and activity in this field. I have been involved in international trade for more than 25 years and it has long been my feeling that those involved in the movement of goods and material, both labor and management, have exhibited little in the way of responsibility, and in general shown great contempt for the consequences of their actions which ultimately will cause us to suffer. Sincerely, LEONARD M. GOLDSTEIN, Director of International Sales. SEPTEMBER 30, 1969. Enclosure Mr. JAMES E. MAZURE, Director, Bureau of Compliance Federal Maritime Commission, Washington, D.C. DEAR MR. MAZURE: Our Mr. Narens has referred your letter of September 22nd to us for handling, and we very much appreciate your interest in this situation. The ocean freight rate on tire repair cement to Japan has always appeared to us to be exhorbitant and did not make much sense, inasmuch as the inland freight on cement is lower than the rate on our tire patches themselves. We have a New York-Yokohama rate of $66.25 for patches and $94.25 for rubber cement, and on shipments to Yokohama through San Francisco, the relationship is $63.00 for cement and $57.00 for patches. As you can well imagine, a product line such as ours, repair material for tires, is extremely difficult to sell in such a highly competitive market as Japan. Nevertheless, we have had some success and there is no question in my mind but what our volume could be increased if our ocean freight rates could be improved. Certainly the discrepancy insofar as the rate on cement is concerned, stands out and should be corrected. But since the major portion of our line consists of the tire patches themselves, we would be very much interested in anything that could be done to reduce the ocean freight rates from both New York and San Francisco to Yokohama on the entire line. We very much appreciate your assistance, Mr. Mazure, and look forward to hearing from you. Sincerely. Senator DANIEL K. INOUYE, LEONARD M. GOLDSTEIN, Director of International Sales. SINGER, Rochester, N.Y., February 18, 1972. Trade Counsel, Senate Office Building, Washington, D.C. 20510 DEAR SENATOR INOUYE: I have your letter of February 15, 1972 in regard to bill, S. 2754 now under consideration. Some time ago, in October of 1969 to be exact, there was correspondence between myself and Mr. James Mazure of the Federal Maritime Commission in regard to ocean freight rate disparities concerning our exports to Japan. The ocean freight at that time was $88.25 per 2000 lbs. or 40 cubic feet outbound and $50.75 or $74.00 per 2000 lbs. or 40 cubic feet inbound. The $50.75 rate applied if the value of the commodity did not exceed $1300.00 per revenue ton F.O.B. The $74.00 rate applied if the value exceeded $1300.00. In 1968 the Friden Division of the Singer Company exported Flexowriters and other business machine products to Japan at a value of approximately $2,000,000. F.O.B. Our figures for the year 1969 were equal to those of 1968. At the time, it did not seem as if the prevailing rates would be a deterrent to our exports to Japan, but we did believe that our exports could be accelerated if the outbound tariff were in closer proximity to the inbound rates. Now, some two and one half years later, I am reluctant to report that we no longer export Flexowriters to Japan from our Rochester, New York facility. These machines are now manufactured in, and exported from, our plant in Nijmegen, The Netherlands. As a matter of fact, the Friden Division of the Singer Company in Rochester, New York is about to be phased out and will close for good in approximately six months. Please bear in mind that shipping rates had nothing to do with the projected closing as we manufactured business machine products for the domestic market as well as for international trade. However, there is no doubt that as soon as the dock strike on the west coast is terminated freight rates will be increased. Even now, due to the dollar devaluation shippers are expected to pay an additional surcharge of some 6%. I realize that the above information is just one case in point and is of little value in the support of said bill. However, it is my belief that dock strikes which take place whenever existing contracts expire are the biggest disadvantage American exporters are faced with, and during the time new contracts are being negotiated these exporters usually have but two choices, either wait out the strike or ship by airfreight. As mentioned earlier, the Singer Business Machine Co. in Rochester, N.Y. will close within the next few months, and it is therefore suggested that if further assistance is required you contact my counterpart: Mr. D. D. Kempton, Export Manager, Singer Business Machine Co., 2350 Washington Avenue, San Leandro, Calif. 94577. Respectfully yours, M. W. BIALLA, Export Manager. DALLAS MARKET CENTER Co., Senator WARREN MAGNUSON, Senate Office Building, Washington, D.C. DEAR SENATOR MAGNUSON: I have just read your Bill S. 2754-and as an individual who has been working for export expansion for the United States for several years (I am a member of the National Export Expansion Council and am Chairman of the Regional Export Expansion Council for North Texas/Oklahoma), I must say that I think you have done a fine job. I have written to our Senators, asking for their help in supporting your Bill, and copies of my letters are enclosed. Please keep up the good work! Very truly yours, EMANUEL L. ROUVELAS, ESQUIRE, Trade Counsel, Committee on Commerce U.S. Senate, Washington, D.C. W. E. COOPER, President. AIR TRANSPORT ASSOCIATION, Washington, D.C., February 22, 1972. DEAR MR. ROUVELAS: This is in response to your request for comments on S. 2754, and the related testimony of Dr. N. R. Danielian. Senator Inouye's bill is quite comprehensive and, as a member of the business community, I am in accord with its goal of fostering the international commerce of the United States, in order to develop a more favorable balance of trade. The concept of an International Commerce Service of the United States appears quite feasible. Dr. Danielian's comments on the Export-Import Bank policy are very provocative. Unquestionably the U.S. scheduled air carriers would be very interested in reducing the interest which they must pay in order to purchase new aircraft, since this burden is running at approximately $350 million a year. It would certainly be advisable to pursue every possible means of strengthening U.S. carriers' competitive posture in relation to foreign air carriers. I have asked ATA's Economic and Finance Department to do a thorough analysis of the present operation of this international funding entity, to determine if specific changes are needed. As soon as the review is completed, I will send you in-depth comments on this matter. We will also comment on other areas of discrimination against U.S. carriers. Thank you for providing an opportunity to express my views on this issue. Cordially, S. G. TIPTON, President. Hon. DANIEL K. INOUYE, Senate Office Building C. H. DEXTER DIVISION, (Attention: Mr. Emanuel Rouvelas, Trade Counsel). MY DEAR SENATOR INOUYE: Thank you for your letter of February 15, 1972 concerning S.2754, and expressing an interest in our problems with ocean freight rate disparities. May I first take this opportunity to mention that Title IX of S.2754 is well intended and, if enacted, should serve to protect the interests of U. S. exporters. I note, however, that Title IX declares unreasonable inbound-outbound disparities and unreasonable third-country disparities as detrimental to the commerce of the United States. The experience which we communicated to the Federal Maritime Commission in August and September of 1971 dealt principally with the publication by two U. S. Conferences of widely dissimilar outbound rates on the same commodity (Tissue Paper Stock) from two U. S. Coasts to a foreign trade area, viz., the Far East. This type of situation does not seem to be covered by Title IX. Full particulars of our experience are on file with the Federal Maritime Commission. Briefly, we requested the Far East Conference to establish a rate based on a weight ton freighting unit for a commodity which is of relatively low-density, i.e. having a stowage ratio of approximately 4 to 1, measurement over weight. Our requests were denied. While communicating with this Conference, we kept abreast of rate activity in respect to an analogous commodity moving from U. S. West Coast Ports to the Far East, and noted that the members of the Pacific Westbound Conference elected to rescind their announcement to change the rate for the commodity involved from one based solely on weight to one which would be rateable on the basis of weight or measurment. In other words, their action to retain the weight freighting unit as the basis for assessing freight charges, while the Far East Conference did not, created a more attractive basis for shipping via the Pacific Coast. It was the appearance of this set of circumstances, through tariff publication, that prompted us to call it to the attention of the Commission. On October 18, 1971, the Commission wrote to the Far East Conference and asked that our rate applications be reviewed. Since then, we have utilized the services of the Pacific Westbound Conference lines to move our products, as well as those of non-conference carriers serving the Atlantic Coast Ports. Rather than pursue the matter further through the Commission, we elected to confine our problems in the area of rates to direct didcussions with the Far East Conference members at their New York office. Accordingly, we asked the Commission not to communicate further with the Conference, since we intended to formulate a new rate proposal for their consideration. The subject is still active. We thought that this approach would be more prudent and would, hopefully, lead to an acceptable arrangement. As you are aware, carriers operating from the U. S. ports are presently plagued with labor problems and conditions which make it extremely difficult for them to respond to the needs of the shipping public in every instance. We feel that for the Commission to have exerted any pressure on the Conference during the past couple of months, as well as at this time and, under present conditions, would have operated to jeopardize our chances for a mutually satisfactory agreement. I appreciate your interest and support the proposed bill. It might be worthwhile, however, if Title IX were expanded to cover situations similar to the one we have outlined above, i.e., where widely dissimilar rates for a given commodity exist from two U. S. Coasts to a given trade area. If I can be of any further assistance, please let me know. Sincerely yours, M. J. BISHOP, Traffic Manager. |