(Report of United States Maritime Commission :)

Hon. JOSIAH W. BAILEY,

UNITED STATES MARITIME COMMISSION,
Washington, April 30, 1941.

Chairman, Committee on Commerce, United States Senate.

DEAR SENATOR BAILEY: You have requested the views of the Commission with respect to S. J. Res. 67, a resolution authorizing the purchase of foreign merchant vessels for national defense, and for other purposes.

This resolution is the proposal which was transmitted to the Congress by the President on April 10, 1941. It would authorize the President, during the existence of the present emergency and acting through such agency or officer as he shall designate, to purchase, requisition, or take over the title to, or the possession of, any foreign merchant vessel which is lying idle in waters within the jurisdiction of the United States and which is necessary to the national defense, for such use or disposition as the President shall direct. Just compensation for the taking or use of any such vessel would be directed to be made in accordance with the applicable provisions of section 902 of the Merchant Marine Act, 1936, as amended. Funds to carry out the provisions of the resolution would be made available from the lend-lease appropriation.

There are 231 vessels of foreign registry immobilized in ports of the Western Hemisphere, of which 83 are lying idle in ports of the United States. In view of the urgent need for additional vessels to meet the commercial and national defense needs of the United States, the Maritime Commission favors legislation which would authorize the acquisition of available vessels, either by voluntary transaction, through charter or purchase, or by requisition, with just compensation to be paid for the property so taken.

There has been reported to the House of Representatives by the Committee on the Merchant Marine and Fisheries a bill, H. R. 4466, the first two sections of which are almost identical with the resolution under consideration. The additional provisions of the House bill would authorize the Maritime Commission to acquire, by charter or purchase, and to make use of, through subcharter or by direct operation, such vessels as might be available for such acquisition and use. Additional provisions for the repair and operation of any foreign vessels that may be acquired by or made available to the Maritime Commission are also contained in the bill.

In connection with the legislation pending before the House of Representatives, the Maritime Commission has submitted memoranda setting forth the situation with respect to shipping in the United States, and describing the urgent need for additional vessels. These memoranda have been printed by the Committee on the Merchant Marine and Fisheries as committee print No. 13. Extensive hearings have also been held by the House committee. Although the testimony was received by the committee in executive session, it has been printed and released.

There are attached, for your convenience, copies of the report of the Committee on the Merchant Marine and Fisheries on H. R. 4466 and of the hearings conducted in executive session, which include the memoranda contained in committee print No. 13.

As appears from the memoranda submitted by the Commission and from the testimony of the chairman before the House committee, the Maritime Commission favors the enactment of the legislation contained in Senate Joint Resolution 67, and further recommends the addition of provisions (such as those contained in the pending House bill, H. R. 4466) necessary to permit the use and operation of any vessels so acquired.

The Commission would also favor the insertion of language which would make it clear that ports in the Philippine Islands are included in "waters within the jurisdiction of the United States." There are four Danish vessels in the Philippines which should be made subject to the authority contained in the proposed legislation. Specific reference to the Philippine Islands is required by the terms of the act of August 29, 1916 (48 U. S. C., 1003), which provides that:

"The statutory laws of the United States enacted subsequent to August 29, 1916, shall not apply to the Philippine Islands, except when they specifically so provide, or it is so provided in this chapter."

This report has been submitted to the Director of the Bureau of the Budget, and his advice will be transmitted when received.

Sincerely yours,

E. S. LAND, Chairman.

The CHAIRMAN. All right, Admiral Land, we will hear from you

now.

STATEMENT OF ADMIRAL EMORY S. LAND, CHAIRMAN, MARITIME COMMISSION

Admiral LAND. Mr. Chairman and members of the committee, this legislation is looked upon as emergency legislation in the interests of national defense.

There is a shortage of bottoms which becomes continuously greater from day to day, primarily on account of the vast sinkings that occur, and, secondarily, due to the diversion of foreign flat vessels from their normal routes, lines, and services to other routes, lines, and services more directly connected with the war effort of Europe.

Our efforts have been, insofar as possible, to take the places of these diverted ships to the limit of our ability, and for the general purpose of national defense.

Coupled with that goes the tremendous increase in tonnage of strategic materials, which is an abnormal situation as compared with the summer of 1939.

I can only stress to the utmost of my ability the necessity for haste and the urgency of the matter on the basis that we must do certain things, and, therefore, it is better to utilize idle tonange which has been laid up for an indefinite period, some of it for a year, which, in the phraseology of the trade, the ships and crews are "eating their heads off," and the ships are rusting idly at the docks.

I am not an international lawyer, but I believe in constitutional rights of the United States of America to do what it chooses in its own interests, be they selfish or be they the first law of nature, or be they due to an emergency which exists and which confronts us.

It, therefore, seems to me that under our statutes we have the perfect right to take these ships into protective custody as the first step; second, in my undersanding of law, a ship that has been sabotaged becomes forfeit.

It is not contemplated, under this act, to do anything insofar as my knowledge goes, that we wouldn't do to our own citizens, and that is that we will give them just compensation, which has been standard practice throughout the world, with all decent nations, at least, in carrying out the objectives.

I would like to give the committee an example of what I mean by treatment of our own citizens.

There is in the city of Chester, Pa., a shipbuilding plant, and in the interests of national defense we want to expand that plant. Let us say the value of the property, in the judgment of those who should know, is $1,500,000. It being owned by various people who are interested in real estate, and they knowing the Government wants it, promptly raise the price to $2,500,000. By the right of eminent domain we go in and condemn the property, as the Government has a perfect right

to do, treating the citizens with all the equity and all the justice and all the law there is.

Now, that is being done today, and that is a very good analogy, in my opinion, as to what is proposed to do with these ships.

So far as the sabotaged ships are concerned, I think we have even more right, and the question of compensation is a legal question, because the thing becomes forfeit, and the ownership passes, and the receiver of the forfeit is entitled to do as he chooses.

Now that, in brief, is the situation as it affects the matter.

There have been doubts raised about handling the personnel aboard. There have been doubts raised about the uses. The personnel will be taken care of in as nearly similar fashion as if they were United States citizens, depending upon their wishes and the wishes of those

in control.

So far as the use of these ships is concerned, the State Department, the War Department, the Navy Department, and the Maritime Commission would very much like the law as elastic as practicable, without restrictions and without any strings to it whatsoever, in order to safeguard the national defense.

We, therefore, propose to put these ships in a pool to be used for the benefit of national defense, with as much equity and justice as what little brains God gave me, and any of us that are handling it, are capable of utilizing in the distribution and occupation of the ships. No one can tell how, when, or where, this pool of ships, or an individual ship in the pool, will be used.

As a cold-blooded measure, it seems to me that we ought to be far more thoughtful of ships that fly the American flag than we should of ships that fly foreign flags. At the same time, we should treat, we should certainly treat neutrals with the same consideration as we would treat our own citizens.

That is our intent, and that will be our endeavor in carrying out any directions that the Congress may give us with regard to these ships.

Senator VANDENBERG. Will these ships fly the American flag after they are taken over?

Admiral LAND. I am unable to answer that question in finality, because the authority we requested covers four things-requisition, charter, sale, and insurance.

Now, I don't know, in all cases or in an individual case, just what category they would fall under. It would be a question of using our best judgment in trying to fit the exigencies of the service to the abilities of the ship.

For example, let's assume we chartered a ship, we would charter it either bare-boat or time charter. If we chartered it time charter, it would remain with its officers and crew and its flag. As a bareboat charter, it might remain with its flag but with different officers and crew. If we bought the ship, it would fall under our own flag; and if we subsequently disposed of it, it might be or might not be under the American flag.

It is contemplated safeguarding our own interests-for example, to have on these ships, if they sail under foreign flag and with foreign crews, a proper guard, be it Coast Guard or Navy, with particular control of communications.

Senator VANDENBERG. Do you mean that you would have a ship at sea, under a foreign flag, policed by American marines or sailors. Admiral LAND. That would be possible; yes, sir.

Senator MCNARY. What is the idea? I don't quite grasp that. Would it be under convoy, as you say?

Admiral LAND. No; I have no interest in the term. It would be under protection and guidance. One of the great difficulties, gentlemen, with these ships is the fact that you cannot insure them. Mind you, they have been laid up here since the 9th of April. Every possible effort has been made to charter these ships, to buy the ships, and to put them into use in some way. These efforts have been made by American citizens or groups of American citizens; long before the sabotage occurred, many of our citizens made efforts to buy these German and Italian ships. These negotiations continued and continued and continued, and you will hear a great deal of it from the gentlemen that are waiting here.

Incidentally, there is a family fued in this Isbrandtsen-Moller Line. Isbrandtsen maintains that he owns the ships or has the right to charter the ships. In other words, so far as use of the ships is concerned, he maintains that he has that.

Senator MCNARY. What ships are these?

Admiral LAND. These are the Danish ships.

On the other hand, Mr. Moller's son, who is in this country, maintains that he is "it." I don't know how to express it in technical language, but one claims control and the other claims the same thing. One claims he has it in writing, and the other claims he has it, subsequent to the German invasion of Denmark. And there is a difference of opinion in the executive offices of the American Government as to who is right. It is a very complicated and unsatisfactory situation, and in my humble opinion can only be cured by legislation in which, by due process of law, equity, and justice, so far as can be given, will be given, and the determination of where the final funds go, because after all that is what it amounts to, will be determined by a proper judicial body or a court of claims, or an arbitration committee, which is the common practice and was frequently done in the last war.

Senator VANDENBERG. Now, Admiral, I would like to pursue the ships for a moment, particularly in the light of your rather startling statement a moment ago.

What are you going to do when you get these ships? Are you going to confine them to South American and Central American trade routes?

Admiral LAND. Not necessarily; no, sir. We want permission to use them wherever we think best in the interests of national defense. Senator VANDENBERG. Where do you think you would use them? Admiral LAND. Well, there are so many different sizes of ships, and so many different types of ships, that I couldn't say definitely as to where we would use them. I know we would use some-I shouldn't say "know," because I don't know anything-but I believe we would use some of them in coastal and intercoastal trade, and some of them in the South American trade. I believe we would use some in the Philippine trade; I believe we will use some in the African and Indian trade, and some of them may be chartered and used in the black-out area, if they run under their own flag.

We have no idea whatsoever of going contrary to the laws on the books with regard to ships under the American flag.

The CHAIRMAN. Before you proceed, I am just informed that the Department of Justice has sent a representative here who wishes to sit in as an observer. He has no testimony to give and no statement to make. He is in the other room. Is there objection to him being present, to having him here?

Senator VANDENBERG. No; let him come in.

The CHAIRMAN. Very well.

Senator VANDENBERG. When Assistant Secretary of State Breckinridge Long was here yesterday, I am very sorry his testimony was not taken down.

The CHAIRMAN. I have a letter from him this morning, if you wish it read.

Senator VANDENBERG. Nevertheless, I am very sorry his testimony wasn't taken down, because it may become very important. If I understood him correctly, he said there was no intention to use these recaptured ships in anything except the regular trade routes upon which we are accustomed to run our ships, and that there was no present intention to transfer their registry to any belligerent power. Would you agree to that?

Admiral LAND. No; because the Maritime Commission has asked for wide open legislation, with no strings on it whatsoever. I therefore couldn't agree with that, and I am rather surprised because I heard Secretary Long testify before the House committee, and it was my understanding that there were to be no strings whatsoever on the use of these ships. I again refer to the ships that have been sabotaged and are therefore forfeit. Why you shouldn't use those in any place you like, why you shouldn't use those in preference to putting your own ships or selling your own ships and seeing them used there, is beyond my comprehension, either morally, ethically, or any other way.

Senator VANDENBERG. This applies to something besides sabotaged ships?

Admiral LAND. The law covers them all.

Senator VANDENBERG. Do you make the same statement about the morals and the equities, and so forth, as to ships that have not been sabotaged?

Admiral LAND. No; I do not; but if we got the ships, then I believe that we would have a right to do what the interests of national defense dictated.

Senator VANDENBERG. Let me follow it through. You want wide open authority so that if, in your judgment, the national defense required the use of one of these ships in the transportation of munitions of war to a European belligerent you could use it for that purpose? Admiral LAND. Under a foreign flag.

Senator VANDENBERG. All right; under a foreign flag; meanwhile you are going to put an American guard on the ship under a foreign flag carrying munitions; isn't that correct?

Admiral LAND. No, sir.

Senator VANDENBERG. Isn't that what you said?

Admiral LAND. No; I said that it is contemplated in certain instances to use that, but not under that condition. I have no idea of putting a guard on a ship that goes into black-out, because that is not,