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Mr. DoWNING. But wasn't it generally known then that the American tramps and berth liners couldn't take this wheat to Russia for the guideline rates set out in their category because that was Public Law 480 minus 20 percent? Isn't that right?
Mr. GILES. No. We had only one guideline on the Public Law 480 and that was the top guideline, if I may use that adjective, the top one, and small vessels and
large ones were under that guideline. As a matter of actual business practice on the Public Law 480 program many of the vessel owners made actual shipments during the past 2 or 3 years very substantially under our published guideline, and most of those, of course, were our larger vessels which are more efficient and could quote a lower price, but it was the competitive situation among American shipowners that produced these lower prices.
Mr. DoWNING. Well, for practical purposes did you finally wind up with one guideline rate, or do you still have two?
Mr. GILES. We have two guideline rates for Public Law 480. If a larger vessel carries Public Law 480 cargo, he carries it at the minus 20 percent rate because we don't want to say that the Soviet shipments are going to get a lower rate than Public Law 480, particularly when the U.S. Government is going to be paying the cost, and particularly when we have good justification for saying that that is a reasonable rate based on our own business practice.
On Public Law 480 there are two rates, one for the smaller vessels and one for the larger. With respect to the larger vessels over 15,600, sir, their top rate is 20 percent under the smaller vessel rate. On the Soviet bloc shipments there is only one rate, the minus 20 percent.
Mr. DOWNING. Which is the supership rate.
Mr. DoWNING. Which the superships can take and come out, isn't that right?
Mr. Giles. I prefer to use the term the “larger ships.” A berth liner could do it. Let me quote you some figures here on berth liners.
Mr. DoWNING. Maybe you can supply them for the record, but I am trying to get over a point I don't seem to be doing too well— that your supership rate was the one which you set and which you expected to use and you expected to use superships, and the other smaller ship operators said, "All right, that's a pretty good compromise. We will take the 480 stuff and let the superships take the wheat to Russia.”
But then we find out that many of the superships have too much draft to go into the Russian ports, so that eliminates them, or some of them, from this wheat sale to Russia.
It also eliminates the smaller ships because they can't do it for the price set on the lower guideline. Isn't that a fair understanding of it?
Mr. GILES. If that result came about it would be unfair, Mr. Downing, but as of this moment no ship has been eliminated by action of the Government from the Soviet shipments, this Continental shipment, on the basis of draft.
Mr. DoWNING. No ship has been eliminated on the basis of draft?
Mr. GILES. That is right. We have not ruled out any ship. If we get to the point where the larger ships are offered in and Continental makes a convincing case that they should not take a ship because of the draft problem and we have to grant a waiver on that basis, then ob
viously we are not going to say that that ship cannot have the other kind of business.
Mr. DoWNING. Is it your contention that our superships can go in the Russian harbors and unload.
Mr. GILES. The vast majority of the ships that we have, and how many, Captain Goodman, are the real large ships? The Manhattan of course is the largest, which presents a real special problem of its own, and there are what? Three or four others?
Captain GOODMAN. Possibly seven or eight, but I think, Mr. Downing, to answer your question specifically, one of the large superships, the Sister Katingo, is firmly booked at 32,000 tons at a 32-foot draft right at the present time. This is a fact. Mr. TOLLEFSON. Will you yield there? Mr. DOWNING. Yes, sir.
Mr. TOLLEFSON. Could you supply for the record what the situation is as of now with respect to American-flag ship participation ? I don't mean to put it in right now, but put it at this place in the record.
Mr. GILES. We are informed that as of this morning Continental has actually chartered as of right now something in excess of 150,000 tons and they have others under negotiation and consideration, but we will be glad to supply for the record the latest information we have.
(The following information was subsequently received for the record :) As of January 30, 1964, 213,000 long tons have been fixed.
Mr. TOLLEFSON. You don't know the percentage of American-flag ship participation ?
Mr. GILES. Sir?
Mr. TOLLEFSON. You don't know the percentage of American-flag ship participation in that?
Mr. GILES. Well, I am saying 150,000 tons American, and what we are aiming at is 500,000 tons. That is the 50 percent.
Mr. TOLLEFSON. Thank you very much. Thank you.
Mr. DOWNING. How many superships do we have that can go into the Russian ports?
Mr. GILES. Could we define superships as being those above 15,600 deadweight tons? That is our dividing line, Mr. Downing.
Mr. DoWNING. That is your dividing line, but weren't you figuring on the 30,000- and 40,000-ton ships?
Mr. GILES. We were figuring on 20,000, 22,000—tonnage in that area.
Captain Goodman, would you comment on that?
Captain GOODMAN. Yes. Mr. Downing, perhaps this will answer it. The ships that over the past few years, all ships in excess of 15,600 tons, that had been engaged in grain movement at one time or another and you do, I know, understand that many of the supertankers are not available for grain-they have moved back and forth from oil to grain-at one time or another over the past few years ships that had been engaged in grain movement, came to, if memory serves me correctly, about 1,700,000 tons. This was the potential available for all of these movements.
If you set a dividing line of a 31-foot draft you would effectively eliminate 1,200,000 tons of this tonnage. If you go up to a 32-foot draft you automatically restore about 700,000 tons.
I am just giving you indications of the various categories of the ships. As far as the real large supertankers that draw in excess, we will say of 40 feet, there are actually very few of those.
The Manhattan is a good illustration. That draws 50 feet, and there are some of the others. They are very few, but
you have a great number of ships, let's say, in the 28- to 33-foot draft. This is where the large majority of your available tonnage comes, in that category. Let's say 28 to 33 feet.
(The following letter and attachments were received in connection with the preceding testimony :)
U.S. DEPARTMENT OF COMMERCE,
Washington, D.C., February 5, 1964. Mr. JOHN M. DREWRY, Chief, Counsel, Committee on Merchant Marine and Fisheries, House of Representatives, Washington, D.C.
DEAR MR. DREWRY: In accordance with your telephone request of February 4, 1964, there are attached hereto
(1) List of the names, owners/operators, type of vessel, and TDWT of vessels which have been engaged in the carriage of bulk commodities (grain) over the past 2 years; and
(2) List of the same vessels indicating the managing agent/operator. It is understood that this is to be incorporated in the record of the present hearings
the louse Me chant Marine and Fisheries Committee on the movement of bulk wheat to the Soviet bloc countries. Sincerely yours,
M. I. GOODMAN, Chief, Office of Ship Operations.
Owners-operators of vessels engaged in the carriage of bulk commodities
11, 315 19, 200 10, 767 16, 567 12, 865 12, 900 12,778 10, 767 10, 511 10, 800 19, 979 14,819 25,014 10, 920 10, 846 10, 920 10, 669 21, 931 11, 019
9, 312 11, 027 16, 533 10, 758 24, 200 10, 757 10, 745 23, 349 21,835 15, 200 16,640 12, 390 24, 427 10, 500 10, 750 12, 358 14,827
12,367 16,408 16, 346 10,584 10, 660 33, 070 10, 503 10, 831 12,358 21, 729 21, 968 21, 939 24, 930 10, 702 12, 900 16, 679 21,824 19, 200 10,584 12,565 15, 107 11,000 12, 490 10, 844 10, 767 10, 831 20, 127 19, 165 12, 815 10,503 10, 745 108,400 10, 745 16, 597 11,030 10, 774 11,004
Owners-operators of vessels engaged in the carriage of bulk commodities-Con.
Vessel and owner-operator
10, 920 11, 027 11,023 11, 015 10,921 19,807 12, 383 16, 287 47, 700
7,005 47, 164 20, 105 10, 566 67, 400 17,803 10, 507 24, 177 10, 733 12, 409 10, 775 10, 624 10, 483
14, 761 35, 504
12, 128 12, 390
12, 600 11, 270 16, 255 33, 173
Marine Ranger, Marine Navigation Co., Inc...
Ocean Transportation Co.-Maritime Overseas Corp. C-4.
owners Agency, Inc.
15, 349 10, 750 15, 400 12, 219 23, 858 11, 045 16, 545 16, 255 12, 900 10, 818 23,000 21, 964 16, 527 12, 375 18, 615 10, 660 10,813
9, 670 23, 928 10, 750 24, 427 12, 200
10,658 33, 081 10, 658 10, 753 10, 658 10, 500 10, 725
10, 696 10, 500
10, 734 10, 607 10, 650 10, 669
10, 720 24, 603 10, 717