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UNITED STATES LINES

Mr. WIGGLEsworth. What about the United States Lines? You spoke about the Manhattan and the Washington. There has been some talk about them. That was $19,200,000 for two ships, one 10 years old and one 9 years old, if my information is correct. Admiral LAND. That is about right. Mr. WIGGLEsworth. They originally cost around $21,000,000. What was the yardstick used there? Admiral LAND. The same as in all others—the complete gamut of all yardsticks. It is all reported in Document No. 20–B. Mr. WIGGLEsworth. The detailed report to the Merchant Marine and Fisheries Committee? Admiral LAND. Yes, sir. Mr. W1GGLEsworth. Was that sum paid out of the insurance fund, or did that come out of the revolving fund? Mr. CHUBB. One of the ships was purchased, and that came out of the revolving fund; the other ship was insured by the Maritime Commission before the War Shipping Administration was formed. So a portion of the insurance money came from the insurance fund. Mr. WIGGLEsworth. The court held you could not pay it out of the insurance fund? Mr. RADNER. The question in the district court in that case was whether they could sue in the district court or be forced to sue in the Court of Claims. After exceptive allegations filed by the Attorney General, the court held on the papers then before it that suit would have to be dismissed and instituted in the Court of Claims. However, he gave the owners leave to submit additional material to prove, if they could, that there was insurance coverage in this case. The settlement having occurred shortly after that, there never was a full presentation of evidence and final decree or ruling based on such evidence. To the extent the ruling has significance, it would indicate that there was some question as to whether this was an insurance loss and we were guided accordingly. Mr. WIGGLEsworth. There was no contract of insurance? Mr. RADNER. The question before the court was whether a bareboat charter constituted a contract of insurance as well as a contract of charter. f M. CHUBB. No money was paid the owners from the insurance Ull 101. AMERICAN-HAWAIIAN LINE

Mr. WIGGLEsworth. Tell me about one other transaction, the American-Hawaiian Line, $7,200,000-plus for 11 ships built between 1910 and 1921. Admiral LAND. That is a recent transaction. Mr. RADNER. They rejected that tender as inadequate. Mr. W1GGLEsworth. So it was merely an offer on your part? Admiral LAND. It was an offer of settlement, as far as we were concerned. They rejected settlement, and they have the privilege of collecting 75 percent and then suing in the Court of Claims for whatever they think they can get. Mr. WIGGLEsworth. Was the same yardstick used in that case? Admiral LAND. Yes; we applied the rules of the Advisory Board.

Mr. WIGGLEsworth. That, I assume, has not been submitted? Admiral LAND. That has not been submitted yet, because it has been rejected and, therefore, was not of sufficient value to submit now. There is no finality in it, so it has not been submitted. Mr. WIGGLEsworth. You have a Division of Large Vessel Procurement. Do these determinations fall within its jurisdiction? Admiral LAND. Yes. Mr. WIGGLEsworth. It makes determinations in the first instance? Admiral LAND. Yes. Mr. WIGGLEsworth. Who is the head of that? Admiral LAND. Mr. Chubb. Mr. CHUBB. The committee reports to me. The special committee on vessel compensation. It is made up of four members. Mr. WIGGLEsworth. Do you have a Division of Small Wessel Procurement also? Admiral LAND. Yes, sir; headed by Commodore Moran. I brought here some of Commodore Moran's charts, showing how it has been done, but I do not want to take up a lot of time. If anybody is interested, we can show how we have taken care of about 2,900 “spit boxes,” as I call them, ships under 1,000 tons.

STATUS OF WALUATION LITIGATION

Mr. Wigglesworth. You said that 80 percent of the cases requiring determination of just compensation have been completed. That determination was made before we went to the $47.50 basis? Admiral LAND. Yes, they were; because April 20 was only a few days ago. Mr. WIGGLEsworth. Does that 80 percent include cases just referred to-individual cases? Admiral LAND. Yes. Mr. WIGGLEsworth. Has there been any litigation yet in respect to any of the valuations? Admiral LAND. Oh, there have been a number of suits that are started. Some of them are completed; some of them are still in the courts. There will probably be more. Mr. WIGGLEsworth. What has been the result of those that have been completed? Admiral LAND. So far as small vessel procurement is concerned, I do not know of any case where they got to first base; but I am trusting to memory; there may have been one or two. Mr. RADNER. I might explain the situation on litigation. We have about 50 cases pending in various courts, and about 50 others threatened. Some of the smaller ones have recovered either exactly the amount we offered or a somewhat higher amount, but in all cases with interest of 6 or 7 percent, which is substantially more than we would allow—seven-eighths of 1 percent. No large vessel case has reached finality except the Olson case, where the court allowed them a $3 per dead-weight ton bareboat charter hire for use of a ship in 1941–42. There are two or three large vessel cases heading into the higher courts on jurisdictional points, including one on certiorari to the Supreme Court, the question there being, whether the owner of a time chartered vessel, where no agreed value exists, is entitled to sue in district court on the theory that he has an insurance contract or whether the action should proceed in the Court of Claims.

Mr. WIGGLEsworth. Was the court allowance in that one case more or less than the value you had offered?

Mr. RADNER. The courts have not reached the question of value o in the cases of small craft.

r. WIGGLEsworth. I thought you said there was one case?

Mr. RADNER. That was a charter hire case and the decision is published in Document 20A. The court allowed $3 per dead-weight ton per month compared with our rate of $1.25. That was a determination by the court as to fair value for the use of a ship chartered by Navy subcontractors for use during the latter part of 1941 and the early part of 1942.

AGENCY FEES

Mr. WIGGLEsworth. You gave us a year ago tables covering agency, cost, and compensation by company, I think. I wonder if you could bring that up to date. Admiral LAND. Yes; I think we have that. (The statement is as follows:)

Statement reflecting number of vessels assigned to the below listed agents at the date indicated, compensation accrued under various service agreements and net results before and after application of pars. 10 and 11 of General Order No. 12 for the period July 1 to Dec. 31, 1942 (as reported by the agents)

Co ti No profit mpensation or loss to No. agent after Name of agent signed as to * *ia ture, renego-| Recapture | .” . at Peo;31, ‘’B. S." tiation and renegoti 1942 - - - --- taxes enegotiaagreements tion and taxes American President Lines, Ltd----- 39 $625,991.38 $329,842.70 || $247,382.09 || $82,460. 70 Grace Line, Inc.-------------- - 44 502, 178.32 13, 867.50 10,400.63 3,466.87 Matson Navigation Co------- -- 48 618, 665. 77 182,424.99 136,818.74 45, 605.25 Moore-McCormack Lines, Inc.------- 40 655, 556.79 10,275.03 10,275.03 United States Lines Co------- - 48 646,901.31 £3,287.30 £3,887.50 American Export Lines, Inc 29 281,478. 07 9,752.79 9,752.79 American-Hawaiian Steamship Co -- 46 215, 388.99 197,888.09 197,888.09 Isthmian Steamship Co.------------ 36 286,018.00 8,735. 55 8,735. 55 Lykes Bros., Steamship Co., Inc.---- 55 334, 965.15 18,924. 55 - 18, 924. 55 Waterman Steamship Corporation--- 54 208,741.79 10,386.29 10,386.22 Agwi Group------------------------- 38 361,190.84 93, 460.68 23,365.17

37 403, 465. 14 107,199.47 $6,339, 60 2,789.st

Bull, A. H. & Co., Inc.------- - ***** 41 190, 526.11 241,814.67 181,361.00 60,453.67

inckenbach steamship Co., Inc Pope & Talbot, Inc. (McCormick

Steamship Co. Division).---------- 27 265,773.96 211,568. 29 158,676.22 52.892.07 Alaska Steamship Co----- 14 615, 159.98 289, 550.57 217, 162.93 72,387.64 Alcoa Steamship Co------ 25 159, 661.26 46, 817.81 -------------- 46, 817.21 American Mail Line, Ltd -- 27 538, 424.70 347,262.11 260,446.58 86,815.53 American South African Line, Inc.--- 20 339,634.71 199,330.76 149,498. 07 49.832.69

27 296,316.94 209,080.49 156,810.37 52,270. 12
23 287,086. 49 152,072.45 114,054.34 38,018.11
20 215,386, 74 165,651. 11 124, 238.33 41,412.78
18 204, 818.43 112, 152.71 84, 114.53 28,038.18

Mississippi Shipping Co., Inc.---
Pacific-Atlantic Steamship Co
Seas Shipping Co

Weyerhaeuser Steamship

American West African Line,
Barber Steamship Co---------- } 12 248,996.29 || 8, 199.98 ||-------------- 8, 199.98
Calmar Steamship Corporation- 19 212,754.00 158,489.00 118,866.75 39, 622.25
Coastwise (Pacific Far East) Line--- 13 255, 711.83 171,836.25 128,877. 19 42,959.06
International Freighting Corpora-
tion------------------------------- 13 209,348.21 126,306. 37 94, 729.78 31, 576.59
South Atlantic Steamship Line- 11 173,890.31 72, 802.76 54,602. 07 18,200.69
Sudden & Christenson, Inc.------ 14 227,833. 19 34,640.67 25, 980. 50 8,660. 17
Eastern Steamship Lines, Inc. 11 156,638.26 253,239.94 117,478.70 || 135,761.24
Winchester, J. H. & Co., Inc.-------- 12 110,212.97 15,466.90 11,600.18 3,866.72
Total (30)--------------------- 861 9,848,715.93 3, 153,793.76 2,543,594. 11 610, 199.65

NotE.-Italics denote red figures (loss).

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Statement reflecting number of vessels assigned to the below listed agents at the date indicated, compensation accrued under various service agreements, and net results before and after application of pars. 10 and 11 of General Order No. 12 for the period Jan. 1 to Dec. 31, 1943 (as reported by the agents)

No profit - Compensation or loss to Number of 1. Net results vessels as- * older before reop. o: * Name of agent signed as | Tö. and to renego Recapture biore at Deco. ‘’B.'s. A tiation, and renegotiaber 15, 1943 - - - --- taxes - agreements tion and taxes American President Lines, Ltd.----- 65 31,986,972.18 - $79,267.05 Grace Line, Inc.------------ 69 1,845,398.94 - - 15, 185.85 Matson Navigation Co----- 63 1,728,403.75 07.37 87,607.37 Moore-McCormack Lines, Inc. 59 1,667,701.88 * **** 142,806. 12 United States Lines Co------- 72 2,330,458.23 550, 269.43 412,702.07 || 137,567.36 American Export Lines, Inc.--------- 59 1,275,854.52 189,505, 12 142,128.85 47,376.27 American-Hawaiian Steamship Co-- 65 1,260,021.44 22,977.10 -------------- £8,977.10Isthmian Steamship Co------------- 64 1,500,743.43 352,994.18 264,745.64 88,248.54 Lykes Bros. Steamship Co., Inc.----- 72 1, 169,457.28 391, 138.02 293,353.52 97,784. 50. aterman Steamship Corporation.-- 73 1,382,416.96 8,482.54 -------------- 2,482.54 Agwi Group - 55 1, 516, 368.84 1, 296.60 45,972.45 15,324. 15. Bull, A. H. & Co., Inc.----- - 49 1, 258,310.19 346,024.68 259, 518.51 86, 506.17 Luckenbach Steamship Co., Inc.----- 55 784,929.08 368, 635.71 276,476.78 92, 158.93. Pope & Talbot, Inc., (McCormick teamship Co. Division).---------- 43 | 1,027,653.74 538,968.05 404,226. 134,742.02 Alaska Steamship Co----- 35 | 1,587,234.45 919,601. 80 689,701.35 229,900.45 Alcoa Steamship Co---- 45 690,562. 37 10,829.91 -------------- 10,889.91 American Mail Line, Ltd -- 43 1,350,344. 07 953, 841.36 715,381.02 || 238,460.34 American South African Line, Inc 40 | 1,063,933.61 683,156.54 512,367.41 170,789. 13. Mississippi Shipping Co., Inc.. 42 945,033.86 698,240.94 523,680.70 || 174, 560.24 Pacific-Atlantic Steamship Co 43 | 1,046,776. 33 680,337.03 510,252.77 170,084.26. Seas Shipping Co.------------ 41 864,424.70 593,633.82 445,225.37 148,408.45. Yo. so ‘ī -- 41 947,294.22 630,926.06 473, 194. 55 157,731.51 American West African Line, Inc.---- Barber Steamship Co } 32 974,520.47 171,574.78 || 128,681.09 || 42,893.69 Calmar Steamship Corporation----- 39 816,459.00 732,750.00 549,562.50 | 183,187.50 Coastwise (Pacific Far East) Line---- 27 | 1,016, 947.42 722,825. 28 542, 118.96 180,706. 32 International Freighting Corporation. 25 | 1,084,684.91 591,779. 32 443,834. 49 147,944.83 South Atlantic Steamship Line------ 32 899,835.94 541, 155.24 405,866.43 135,288.81 Sudden & Christenson, Inc.----- 27 890,840.49 455,490.07 341,617. 55 113,872. 52 Eastern Steamship Lines, Inc.-- 18 731,062.47 | 1,020, 254. 44 548,296.85 471,957.59 Winchester, J. H., & Co., Inc.------- 21 718, 589.29 423,470.47 317,602.85 105,867.62 Total (30)-------- ------------ 1,414 o, 363,234.06 o 367,138.90 9,912,727.30 [3,454,411.60

NotE.-Italics denote red figures (loss).

Statement reflecting number of vessels assigned to the below-listed agents at the date indicated, compensation accrued under variuos service agreements and net results before and after application of sec. 306.96 of General Order No. 34 for the period Jan 1 to Sept. 30, 1944 (as reported by the agents)

C ion N o profit ompensat or loss to No. accured under *::::::::: agent after Name of agent signed as To * *ia ture renego | Recapture | .” #. at October | * * *** *** tiation and ut before 31. 1944 B. J. A. taxes renegotiar agreements tion and taxes American President Lines, Ltd.----- 79 ($1,946,326.38 $45,883.48 $41,295. 13 $309, 598.01 Grace Line, Inc.---------------- - 90 2,226,370.15 42,369. 69 |-------------- 1263,798. 20 Matson Navigation Co--------- - 84 2,015,937.30 162,796.96 146, 517.26 284,759.70 Moore-McCormack Lines, Inc.-- - 74 1,619,601.16 174,986.01 157,487.41 272,023.60 United States Lines Co--------- - 88 2, 249,240.47 407,461. 55 366,715.39 350,748. 40 American Export Lines, Inc.--------- 83 1,818,427. 69 637,757.55 573,981.80 340, 715.75 American-Hawaiian Steamship Co-- 85 1,694,080.00 55,954.89 50,359.40 314,610.49 Isthmian Steamship Co-------- 83 2,040,233. 12 551,597.47 496,437.72 329,579. 75 Lykes Bros. Steamship Co., Inc.----- 85 1,757,713.00 455, 163.05 409,646.75 318,376. 30. Waterman Steamship Corporation.-- 88 1,936,936. 14 56,095.19 |-------------- 1265,904.81 Agwi Group---------------- --------- 63 1,581,981.09 184, 107.84 165,697.06 256,438. 28. Bull, A. H. & Co., Inc.-------------- 62 1,438,396.80 487,012.87 438,311.58 271,871.29 Luckenbach Steamship Co., Inc.---- 62 1,239,250. 14 238,616.94 214,755.25 250,911.69. Pope & Talbot, Inc., (McCormick Steamship Co. Division).---------- 61 | 1,253,793. 18 484, 693. 14 436,223.83 || 273,664.31

1 Allowable profit.

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Statement reflecting number of vessels assigned to the below-listed agents at the date indicated, compensation accrued under various service agreements and net results before and after application of sec. 306.96 of General Order No. 34 for the period Jan. 1 to Sept. 30, 1944 (as reported by the agents)—Continued.

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--- No ‘ompensa or less No! accrued under o: agent after Name of agent signed as to * *id ture, renego- Recapture jo ‘. at Dec. 31, * * * * * tiation and renegoti 1942 - - - --- taxes negotiaagreements tion and taxes Alaska Steamship Co---------------- 53 $1,326,592.34 $574,557.75 $517, 101.97 $251,435.78 Alcoa Steamship Co--------- - 56 889,432.63 105,812, 16 ||-------------- 105,812. 16 American Mail Line, Ltd 54 1, 150, 966. 14 588,957. 13 530,061.42 262, 445.71 American South African Line, Inc.--- 53 1,063, 543.73 339, 693. 55 305,724. 19 216,564.36 Mississippi Shipping Co., Inc. ------ 52 1,012, 513. 36 367, 394.42 330,654. 98 || 211,784.44 Pacific-Atlantic Steamship Co------- 53 | 1,085, 123.32 470,281.99 423,253.79 247,773.20 Seas Shipping Co------------- - 50 988,082.93 272,640. 39 245,376.35 | 200,769.04 Weyerhaeuser Steamship Co... 52 985, 588.67 384,443.25 345.998. 222, 489.32 follo) 43 || 776,294.01 32,563.60 -------------- 1 101,381. 40 Calmar jo, Corporation. 40 752, 980.00 354,708.00 319,237.20 180,250.80 Coastwise (Pacific Far East) Line---- 38 760, 523.54 271,957.02 244,761.32 164,390.70 International Freighting Corpora- tion------------------------------- 35 831, 890.61 142,290.77 128,061.69 145,679.08 South Atlantic Steamship Line- 49 955, 903.77 395, 844.06 356,259.65 189,709. 41 Sudden & Christenson, 38 710,011. 18 275,292.19 247,762. 97 157,594.22 Eastern Steamship Lines, Inc.”------|--------------------------|----------------------------|-----------Winchester, J. H. & Co., Inc.- - 26 453,416.31 145,302.85 | 130,772.56 99, 585.29 Total (30)--------------------- 1,779 (38,561, 149.16 8,232,554.48 7,622,455.60 o, 649,041.17 1 Allowable profit.

* Statement not secured from agent. NotE.-Italics denote red figures (loss).

RECAPTURE AND RENEGOTIATION

Mr. WIGGLEsworth. You spoke a little this morning about recapture and renegotiation. The over-all figure you gave was $20,000,000 for both. I assume there have been no further results in reference to the Red Sea charters? Admiral LAND. They are still in the courts. Mr. WIGGLEsworth. Only two companies have paid up? Admiral LAND. Yes; only two. As far as Red Sea profits are concerned, I have felt for some time that they were excessive. The owners still maintain that the profits, however large, were not excessive because the basic rates were no higher than those earned from commercial operations in other trade routes in 1941. We have been trying for the past year, without great success, to achieve adjustments by renegotiation. The owners contend that the renegotiation law is not applicable to these charters principally on the ground that the reneotiation law of 1942 does not apply to contracts made with the British vernment agencies, even though they were financed under lendlease and various other asserted ambiguities in the renegotiation law. From present indications, these questions ultimately will have to be resolved by the courts. We feel that the courts will ultimately sustain the soundness of our legal position. The Renegotiation Act of 1943 was originally enacted as the Sixth Supplemental National Defense Appropriation Act of 1942, in section 403, and the questions therefore may be of some concern to this committee. In view of the committee's interest in the matter, I hope the committee will consider whether or not further assistance is required in the

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