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APPENDIX

HEARING HELD BY THE MARITIME ADMINISTRATION, DEPARTMENT OF COMMERCE, THURSDAY, FEBRUARY 6, 1964, ROBERT E. GILES, ACTING MARITIME ADMINISTRATOR, PRESIDING

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CONTINENTAL GRAIN CO. WAIVER REQUEST ON USE

OF U.S. SHIPS FOR GRAIN SHIPMENTS TO RUSSIA

THURSDAY, FEBRUARY 6, 1964

MARITIME ADMINISTRATION,

Washington, D.C. The meeting commenced at 11:30 a.m., in room 4519, General Accounting Office, Mr. Robert E. Giles, Acting Administrator, Federal Maritime Administration, presiding.

Mr. GILES. Good morning, gentlemen and lady; as you all know, we announced yesterday that we would have this meeting this morning to consider the waiver application submitted by Continental Grain Co. in connection with shipment of a total of 1 million tons of wheat to the Soviet Union.

Now, this is a formal business session. We are going to be considering business. This is not just an open meeting where people will come to comment on matters generally but this is an open meeting so that all of those who are interested—and there are many who are interested in the subject will have an opportunity to focus on the specifics that we have got involved in and see and know what we are doing and why.

I would like to have a few general comments for the record simply to lay the background on why we are here today.

Last January 7 we published our final notice of waiver procedure which would be followed in the event any exporter was not able or said he was not able to get the full American tonnage in compliance with the 50-percent requirement that you all know about. That was published on January 7 as our final notice of procedure and here is a copy for the record :

NOTICE TO EXPORTERS AND AMERICAN SHIPOWNERS ON SHIPMENT OF WHEAT AND

WHEAT FLOUR TO SOVIET BLOC COUNTRIES Current Export Bulletin No. 883 issued by the Office of Export Control, Department of Commerce, on November 13, 1963, requires that at least 50 percent of the wheat and wheat flour to subgroup A countries will be exported on U.S.-flag carriers and that if such carriers are not available at reasonable rates, the exporters must obtain prior authorization from the Maritime Administration to ship less than 50 percent on U.S.-flag carriers.

Any application by an exporter to the Maritime Administration for waiver of the foregoing requirement must be accompanied by a certification that solicitation of all owners and/or operators in all segments of the American steamship trade for necessary shipping space has been made including posting at the New York Maritime Exchange, 80 Broad Street, New York, N.Y., for the required U.S.-flag shipping. Application may be made at any time subsequent to the date of prompt solicitation after a sales contract has been signed and after allowing 5 days for response thereto. The results of such solicitation must be clearly and fully itemized including the dates of all tenders, shipping dates, rates, terms and conditions, loading and discharge ports, cargó tonnage offered, and full response to such tenders. Exporters are advised that waivers will not be considered unless

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U.S.-flag ships have been given a reasonable period to meet the shipping schedules, and in any event the shipping schedules (laydays) for U.S.-flag ships shall extend over the same period applicable for other shipping but should be not less. than 30 calendar days after the date of solicitation unless compelling circumstances require a shorter period.

Upon receipt of an application for a waiver of the U.S.-flag shipping requirement, the Maritime Administration will promptly issue a public notice including posting of a notice at the New York Maritime Exchange, 80 Broad Street, New York, N.Y., giving full details of the waiver application, stating that a request for waiver has been received and unless evidence within 5 days from date of such notice is received showing that U.S.-flag, shipping is offered, capable of meeting the reasonable shipping schedules of the exporters at applicable guideline rates for wheat in bulk_published by the Maritime Administration, Department of Commerce, in the Federal Register issue of November 16, 1963, and any other supplemental guideline rates published for other port areas applicable to ships of 15,600 to 30,000 total deadweight tons will govern. If wheat flour in bags is to be shipped under Current Export Bulletin No. 883, supplemental guideline rates will be published.

As background to that procedure and to this final notice of procedure published January 7, we circulated in December to shipping association representatives, to grain exporters, and to interested citizens a proposed draft of waiver procedure. That was sent out around December 11 and we solicited comments and suggestions at that time. Simply representative of what we received, I would like to make note of these letters and put these letters in the record.

This letter is from Mr. Ralph B. Dewey and is dated December 17, 1963. Mr. Dewey represents the Pacific American Steamship Association. The letter is addressed to me,

First it expresses thanks for sending the draft notice and then it has these two paragraphs and I will put the entire letter in the record.

(The letter referred to follows:) DEAR MR. ADMINISTRATOR: Many thanks for sending me the draft of "Notice to Exporters and American Shipowners on Shipment of Wheat and Wheat Flour to Soviet-bloc Countries" which you plan to publish soon in the Federal Register.

I have not canvassed every member of my organization but, on my own responsibility, will indicate to you that the notification plan therein by which American operators are given 30 days advance notice of bloc country shipments seems quite satisfactory. Your Department's extreme caution in insuring maximum participation by U.S.-flag vessels is greatly appreciated.

This has been a difficult matter for your Department and we commend you and your staff for finding a fair and equitable solution.

We, of course, appreciated those comments from Mr. Dewey.

This letter is dated December 19, 1963, and is from Ralph E. Casey, president of American Merchant Marine Institute and reads as follows:

DEAR MR. GILES : Thank you for sending me a copy of your proposed "Notice to Exporters and American Shipowners on Shipment of Wheat and Wheat Flour to Soviet-bloc Countries,” which I note has been sent to all American steamship owners or managing agents, the Association of Ship Brokers & Agents, Inc., and is being made available to grain exporters.

The revised procedure for the granting of waivers appears to be generally satisfactory and should assure proper participation by U.S.-flag vessels.

This letter dated December 16, 1963, is from Mr. J. Smith, chairman of the American Tramp Shipowners Association and is addressed to Mr. Martin L. Goodman. The letter reads as follows:

GENTLEMEN : This will acknowledge receipt of your letter of December 11, 1963, enclosing a proposed draft of "Notice to Exporters and American Ship owners on Shipment of Wheat and Wheat Flour to Soviet-bloc Countries."

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Our association feels that your suggested handling of waivers is good and wishes me to tell you that they will cooperate with you to the fullest extent and they also are very much pleased and grateful to Mr. Roosevelt, Mr. Giles, and yourselves in connection with the other matters discussed in our recent meeting.

The next letter is from Mr. Max Harrison, president of the American Maritime Association and is addressed to Capt. M. I. Goodman and reads as follows:

DEAR MARTY: We were advised at a meeting of AMA member companies today that the owners have received your letter requesting comments on the proposed procedure governing the shipment of wheat and wheat flour to Soviet bloc countries. I have been ask to inform you that in accordance with our comments in Washington on Tuesday, the owners consider 30 days' notice insufficient to meet the shipping schedules and would like 60 days' notice. However, in light of the special circumstances in these deals, they would appreciate 45 days notice, if that is possible.

That was the only comment from AMA. It was not possible or we did not conclude that we could have 45 days' minimum notice in our waiver of procedure, rather it is 30 and on that point I would like to read the precise language in our waiver notice as it finally went out:

Exporters, and I quote are advised that waivers will not be considered unless U.S.-flag ships have been given a reasonable period to meet the shipping schedule and in any event the shipping schedule for U.S.-flag ships shall extend over the same period applicable for other shipping but should not be less than 30 calendar days after the date of solicitation unless compelling circumstances require a shorter period. In other words, we did not word this in such

way as to say that 30 days is all it should be but we stated it in such a way that there should be more than 30 days under the circumstances if that was indicated and certainly it should be the same as for foreign shipping and only if compelling circumstances indicated, should there or could there be less than 30 days.

This letter is from the Association of Ship Brokers & Agents, it is addressed to Captain Goodman and is signed by the president of that association, Mr. Glosky. It reads as follows:

GENTLEMEN : We have your letter of December 11 addressed to this association and we submit herewith our suggestions for a modus operandi designed to give American shipowners every reasonable opportunity to em their own tonnage on any possible offer, if such tonnage is available at reasonable rates.

Over a century of experience has shown that the surest and most expeditious way to bring full cargoes and the ships to carry them together, has been a broker using his own individual efforts and methods, whatever they may be.

There is no daily shipping paper that is published on all our coasts. To attempt to assure the Maritime Administration that American-flag tonnage is not avail. able at reasonable rates by such a method would be cumbersome, expensive, and time consuming.

We suggest the following procedure.

1. All requests for waivers will be filed with Maritime Administration. Such request shall give the following data :

(a) Date of tender.
(6) Shipping dates.
(c) Rates.
(d) Terms and conditions.
(e) Loading and discharge ports.
(f) Cargo tonnage offered.
(9) Full response, if any, to such tenders.

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