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PURCHASE OF SHIPS Mr. WIGGLESWORTH. As to your purchase item, you want $30,000,000, as compared with $28,000,000 in the current fiscal year.
I do not want to get into the old argument on what is or what is not a proper basis for valuation, but is my understanding correct that according to your present policy section 902 of the act applies only to those ships which have had both operating and construction subsidies?
Admiral LAND. Section 902 is the requisition part of the act and applies to all ships purchased or registered under that provision of law. Section 802 applies to ships purchased with construction subsidies.
Mr. WIGGLESWORTH. Section 802 applies only to those that have construction subsidies and are now under operating subsidies?
Admiral LAND. Section 802 applies to every ship purchased with a construction subsidy under the 1936 act regardless of whether the ship also received an operating subsidy. Incidentally, operating subsidies have not been paid since requisitioning was instituted in 1942.
Mr. WIGGLESWORTH. It is your position as to other ships that you are applying section 902 properly interpreted?
Admiral Land. Yes. The answer to that is “Yes.”
Mr. WIGGLESWORTH. That is based upon the well-known opinion of the Advisory Board, that our friend Congressman Bland referred to as a “Study in Greek”?
Admiral LAND. Well, it is a very good study. Mr. WIGGLESWORTH. How many ships did you acquire during the last fiscal year? Is there a table on that somewhere?
Admiral Land. Yes, sir.
Mr. Johnson. Page 113 shows the number acquired between June 30 and December 20, 1944. That is at the foot of page 113.
Mr. WIGGLESWORTH. Could you break that down into a table that would show ship, age, tonnage, and price paid?
Admiral LAND. Yes; we can give you a table showing each ship. Yes; we have that and shall place it in the record.
(The table is as follows:) List of vessels to which title has been requisitioned during period from June 30, 1944,
to Dec. 20, 1944
1919 1916 1942 1919 1919 1919 1918 1940 1910 1920 1902 1913 1920 1919 1918 1919
8,000 8.700 9, 434 5, 200 11,953
8, 010 10, 820 3, 170 9,925 10,551
4, 425 10, 175 10, 400 8.000 3,055 9, 860
I Not detached.
AMERICAN PRESIDENT LINES
Mr. WIGGLESWORTH. I want to ask you about two or three specific instances, that have been referred to; for instance, the American President Lines deal where, if my information is correct, you acquired nine ships, eight of them 20 years old or more, and one ship 10 years old or more, for $14,800,000 plus $500,000 representing delay in payment. Those figures are substantially correct, are they not?
Amiral LAND. I think the over-all figures are, yes.
Mr. WIGGLESWORTH. What was the yardstick used in that instance to arrive at the over-all figure of $15,300,000 for those nine ships?
Admiral LAND. About every yardstick there is. We went through the claims with a fine-tooth comb and over the whole record.' Two full reports on the settlements were submitted to the House Merchant Marine and Fisheries Committee. I shall be very glad to place it in the record. Mr. WIGGLESWORTH. How long is it?
Admiral LAND. It is nine pages of printed type, No. 20-E; and then this is No. 20-H.
Mr. WOODRUM. That has already been printed in the hearings before Judge Bland's committee?
Admiral LAND. Yes. Mr. WIGGLESWORTH. What is the number of that document? Admiral LAND. There are two documents, 20-E and 20-H. Mr. WIGGLESWORTH. Is it a fact that five of those vessels had been sold back in 1924 for $550,000 each, and that three more had been sold back in 1925 for $1,125,000 each?
Admiral LAND. Without reading this through, I would not be able to answer that. I do not know whether or not anybody here can answer that. The complete history is there, but without going over it, I am not sure. At any rate, we will answer the question in the record.
(The information referred to is as follows:) Our records indicate that seven ships of the 502 type were purchased in 1924 for $3,850,000 with certain operating commitments, and that five vessels of the 535 type were purchased in 1925 for $5,625,000, together with certain operating commitments. The vessels covered in the settlement were included in these sales.
Mr. WIGGLESWORTH. Ninety percent of the stock of this company belongs to the Maritime Commission, does it not?
Admiral LAND. The Commission owns about 90 percent of the voting stock control.
Mr. TABER. How much of an interest do you have in that company? Any, really?
Admiral LAND. We own that much of the stock, sir. Mr. TABER. Of voting stock; but how much, upon dissolution, would you be entitled to?
Mr. "RADNER. About 80 percent of the assets allocable to the common stockholders' interest, after providing for the preferred stock. About 80 percent of the common stock equity belongs to the United States. According to the last published statement the book value of 80 percent of the indicated equity allocable to the common stock would be over $9,000,000.
Mr. WIGGLESWORTH. Has there been an offer fairly recently for that stock?
Admiral Land. Nothing you could put your teeth into. They have been fooling around for about 5 years with half-baked offers, but nothing specific.
Mr. WIGGLESWORTH. Did not Mr. Grady, president of the line, make an offer for it?
Admiral Land. Yes; but it was really a suggestion as to the basis of a possible offer, rather than an offer. Mr. WIGGLESWORTH. How much was it? Admiral LAND. I do not remember; I have it at the office. Mr. WIGGLESWORTH. Three and a half million; something like that? Admiral LAND. I do not remember the figure, Mr. Wigglesworth. Mr. WIGGLESWORTH. Will you place that figure in the record? Admiral LAND. Yes. (The statement is as follows:)
Mr. Grady suggested a purchase for a figure of $7,000,000, but of this total figure, only $500,000 was payable unconditionally and the balance was to be made dependent upon future earnings of the company. We have not advertised the company for sale or received any formal offers other than Mr. Grady's suggestion since over a year ago. The offers received over a year ago ranged from $1,000,000 to nearly $4,000,000.
Mr. WIGGLESWORTH. And indicate whether that was the highest offer you had.
Admiral Land. There was no competition on that. That was an individual suggestion. It was the highest and lowest. Because of the contingent nature of the suggested price it is not comparable to the offers made over a year ago.
Mr. WIGGLESWORTH. Did you not call for bids?
Admiral LAND. No, sir; it was an informal proposal that we felt had insufficient merit to follow up.
Mr. WIGGLESWORTH. How did they happen to make the offer?
Admiral LAND. They said they would like to buy it and would like to keep the company with the operating personnel that now operates it. We are always receptive to suggestions looking toward the return of this company to private ownership on a fair basis.
Mr. WIGGLESWORTH. Did you ever have a higher offer for it?
Admiral LAND. We put out a year or two ago a suggestion of offers without mentioning them, and we had a number of bids, none of which the Commission felt justified in accepting. The offer recently submitted by the company official also was not satisfactory to the Commission.
Mr. WIGGLESWORTH. Was it the highest that you got?
Admiral LAND. In view of its contingent nature I do not know how it could be compared with the previous offers.
Mr. WIGGLESWORTH. Will you indicate whether or not it was, when you revise your remarks?
Admiral LAND. Yes, sir. The offers of a year ago have little significance today. We are confident that on a public offering now the stock would attract much more favorable offers than the best heretofore received.
Mr. WIGGLESWORTH. Was this particular transaction of $15,300,000 approved by all the Commission?
* Admiral Land. It happened to be a W. S. A. show, so I guess it was not. It was approved by me as Shipping Administrator. It indicates approval of all the people concerned, in the documents just mentioned. The Commission has in recent years fixed insurance values for these vessels which were the same or higher than those finally allowed.
Mr. WIGGLESWORTH. You pass on those things as Administrator? Admiral LAND. Yes, sir.
Mr. WIGGLESWORTH. The $15,300,000 went into the special reserve fund?
Admiral LAND. The capital reserve fund.
Mr. WIGGLESWORTH. I wonder if you could give us a table that would show payments to this line during the life of the agency (a) with respect to charter hire, (b) with respect to vessels requisitioned for title, and (c) on account of insurance.
Admiral LAND. Yes. Most of that has been submitted, but we can bring it up to date. Two large blue booklets on this line have been submitted to the Congress.
Mr. WIGGLESWORTH. To whom? The Merchant Marine Committee?
Admiral LAND. No; I do not know where they went. There are plenty of them around, though. It is one of the most voluminous jobs we have ever had. I shall be very glad to bring it up to date.
(The information is as follows:)
The payments made to American President Lines for charter hire to March 1, 1945, insurance due to total loss of vessels and requisition for title of vessels are as follows: CHARTER HIRE
Amount President Buchanan...
$565, 409. 29 President Coolidge
918, 000. 95 President Fillmore
523, 937. 59 President Garfield.
155, 390. 65 President Grant
698, 748. 97 President Johnson..
1, 045, 351, 22 President Madison.
235, 863. 82 President Monroe..
931, 554. 48 President Polk.
999, 614, 61 President Taylor..
192, 024. 30 Do...
900, 740. 88 Total...
7, 166, 636. 76
INSURANCE DUE TO TOTAL LOSS OF VESSELS President Coolidge.
271, 955. 12 7, 271, 955. 12
REQUISITION FOR TITLE OF VESSELS Prezident Buchanan, President Fillmore, President Grant, President Madison, President Taylor.
1$4, 843, 270. 68 Prezident Garfield, by cash..
527, 948. 15 Indebtedness cancelation of mortgage
1, 542, 749. 34 President Jackson, by cash..
484, 887. 64 Cancelation of mortgage indebtedness..
1, 626, 790. 83 Prezident Van Buren, by cash --
511, 886. 65 Cancelation of mortgage indebtedness
1, 629, 318. 19 Prevident Hayes, by cash.
509, 807. 80 Caneeled mortgage indebtedness.
1, 644, 199. 75 President Taft, President Cleveland, President Pierce
3, 171, 004. 00 Total...
16, 491, 863. 03 Grand total...
30, 930, 454. 91 Ledades Insurance for total loss of stearnships President Grant and President Taylor.