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DEPARTMENT OF COMMERCE, MARITIME ADMINISTRATION
Flag of registry, name of ship
Italian (8 ships)-
F I C P
Polish (10 ships) -
Yugoslav (6 ships)
Norwegian ( 4 ships)-
5, 252 11, 737 4, 750
See footnotes at end of table, p. 137.
DEPARTMENT OF COMMERCE, MARITIME ADMINISTRATION
Gro88 tonnage French (4 ships) -
6, 490 Finnish (1 ship) Valny (tanker)
11, 691 Indian Jalaganga' (trip to Cuba under ex-name, Silverlake, British flag). Chinese (Formosa) Comfort' (trip to Cuba under ex-name, Guinee, French flag). Panamanian Jezreel' (trip to Cuba under ex-name, Tine, Norwegian flag).
1 Ships appearing on the list that have been scrapped or have had changes in name and/or flags of registry.
Added to report No. 24 appearing in the Federal Register issue of Jan. 17, 1964.
Section 2. In accordance with approved procedures, the vessels listed below which called at Cuba after January 1, 1963, have reacquired eligibility to carry U.S. Government-financed cargoes from the United States by virtue of the persons who control the vessels having given satisfactory certification and assurance:
(a) That such vessels will not, thenceforth, be employed in the Cuba trade so long as it remains the policy of the U.S. Government to discourage such trade; and
(0) That no other vessels under their control will thenceforth be employed in the Cuba trade, except as provided in paragraph (c); and
(0) That vessels under their control which are covered by contractual obligations, including charters, entered into prior to December 16, 1963, requiring their employment in the Cuba trade shall be withdrawn from such trade at the earliest opportunity consistent with such contractual obligations. (a) Since last report:
(6) Previous reports : Flag of registry, name of ship Gro88
Number British (2 ships):
of ships London Confidence
1 London Independence German (West).
2 Greek: (1 ship) Hydraios III-. 5, 239
1 Norwegian: (1 ship) Kongs
Section 3. The ships listed in sections 1 and 2 have made the following number of trips to Cuba since January 1, 1963, based on information received through January 17, 1964:
1 salo pri
Number of trips
Flag of registry
Jan.- Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan, Total
NOTE.-Trip totals in this section exceed ship totals in secs. 1 and 2 because some of the ships made more than 1 trip to Cuba. Dated : January 24 1964.
J. W. GULICK,
Deputy Maritime Administrator. Mr. DOWNING. Mr. Tollefson?
Mr. TOLLEFSON. Coming back to the financial participation of the Government in this transaction, in addition to the Export-Import Bank credit, or guarantee, or whatever it is, as I understand it, in this particular transaction there are a million tons of grain involved.
Mr. JOHNSON. That is my understanding, yes.
Mr. TOLLEFSON. But the total program involves a possible 41/2 million tons ?
Mr. Johnson. Approximately 4 million, including the satellites;
Mr. TOLLEFSON. Using the figure supplied in yesterday's testimony on the amount of export subsidies, which includes this ocean freight differential, the total subsidy averages according to the testimony yesterday 7212 cents a bushel.
According to my arithmetic 1 million tons is equal to 36,666,000 bushels. Multiplying that by 721,2 cents on the million tons the Government's actual financial participation is $27,582,000. If we multiply that by four times, which takes care of the 4 million tons, then the American Government's participation would run in excess of $100 million. My arithmetic may not be correct.
Mr. JOHNSON. The Government's financial participation in this sense, I should think, Mr. Tollefson, would not be any different from its financial participation in any export wheat sales, whether to the United Kingdom or Japan, or otherwise.
Mr. TOLLEFSON. You are talking about the 480?
Mr. JOHNSON. No, no; not Public Law 480, but normal commercial sales carry with them an export price which is lower than the domestic price by the amount of the subsidy.
Mr. TOLLEFSON. But it in no case reaches 7212 cents?
Mr. JOHNSON. This I don't know, sir. I am not familiar with the details of wheat pricing, which is very complicated.
Mr. TOLLEFSON. Inasmuch as my colleague, Mr. Downing, brought up the financial participation of the Government I was curious to know what it amounted to in dollars or dollar value and, as I say, on the million bushels it runs $271/2 million and on 4 million tons it would be four times that.
Mr. DOWNING. Approximately $100 million it would cost us. Of course it would help the balance of payments.
The counsel would like to ask you a question.
Mr. DREWRY. Mr. Secretary, it is still not exactly clear to me what took place in the beginning when the decision was made to use American-flag ships, “when available,” in this transaction. After the traders came to you to ask whether this sort of thing were possible, the initial discussions were between State and other representatives, say, Commerce, Agriculture, perhaps, and Russian representatives. Is that correct?
Mr. JOHNSON. No, sir; there were no discussions—I think I am correct in this with the representatives of the Soviet Union prior to the determination to go ahead with the program.
Mr. DREWRY. Then when the upper levels considered the thing and they went to the Russians and said here is what we can do, that was when they were told that it would be on American ships when available?
Mr. JOHNSON. That is correct, sir.
Mr. DREWRY. Was it because of the consideration to balance of payments?
Mr. JOHNSON. It was made I would say in the first place with background that the Soviet representative had already indicated a willingness on the part of the Soviet Union to use American ships. That being the case it was decided to put this in as one of the ground rules, as a method, I assume, of assisting the U.S. merchant marine.
Mr. DREWRY. You say they had previously indicated a willingness. They were asked whether they would be willing to, or did they ask for American-flag ships? I have heard stories to that effect, that at one point they themselves were asking that American-flag ships be used.
Mr. JOHNSON. This subject first came up, as I mentioned in my opening statement, at the time when an informal approach was made to the Soviet Union to find out whether they were seriously interested in a sizable purchase of wheat.
In the course of this discussion with the Soviet representative this willingness on their part to use American ships came out. I was not myself at this discussion. I can't testify as to exactly the way in
which this willingness on their part developed or whether the indication of their willingness developed.
Mr. DREWRY. What I am trying to get at or trying to learn is-you say to help the American merchant marine--whether this was just a general thing that it would help the American merchant marine if American-flag ships were used. Or was there any particular planning in mind, including a study of the availability of the American ships at that time.
It seems to be a very firm decision and one in which as you mentioned a little while ago was not even negotiable. I wondered just whether it was to help the American merchant marine, to help the balance of payments or to help something else.
Mr. Johnson. I think all of those factors were considered. I don't believe there was any effort at that point to determine with any precision the extent to which American ships were available, but it was felt that there would be substantial numbers available and if they were available they should be used.
This was about the sum and substance of it.
Mr. DREWRY. When the first discussions at your level were had, before it got to the commercial aspects of it, was there any discussion of terms at all? Did the Russians say, “We want this on a delivered basis, on cost-and-freight terms"!
Mr. JOHNSON. There was a discussion of the basis, the terms, at one time with the Soviet representatives, the purpose of which was from our standpoint to ascertain whether they were prepared to accept various kinds of terms; in other words, whether they were prepared to accept free on board American ports, free alongside ship Soviet ports, and we found out that they were prepared to accept either type of terms.
Mr. DREWRY. Was it a matter of insistence on their part that the wheat be sold at the world price?
Mr. JOHNSON. They made it quite clear that they were not prepared to pay in excess of the world price.
However, of course, the decision was in terms of the world price of wheat. We didn't get into a discussion of the shipping prices.
Mr. DREWRY. Of course the Russians knew as well as we did that our freight costs are higher than foreign-flag costs, and if they were willing to take it on a cost-and-freight basis wasn't there any discussion of how to put the freight on a world basis too!
Mr. JOHNSON. No, sir. We assumed, of course, that they did know, as I say, the fact that American ship costs were generally at that time higher, and are now, but we did not discuss the question with the Russians of how this particular problem could be handled. This was, as I say, not a negotiable requirement.
We felt that this was a matter, and we so told them, that would have to be dealt with in the contractual negotiations between the private American traders and themselves.
Mr. DREWRY. At least as far as the Department of State was concerned this was the case ?
Mr. JOHNSON. Yes; that is correct.
Mr. DREWRY. You mentioned that the Russians themselves balked on the idea of the transaction being handled on a government-to-government basis under cargo preference.