Mr. OBERSCHALL. If I get the charter for March 15 for 15,700 tons, at 5 percent, more or less bulk free, I will take the business. Whether I would prefer some other business is really of no consequence at all. To be truthful, I might prefer other business. I am Hungarian and not very happy about shipping wheat to Russians, but since the regulations are made by the Maritime and my being an American shipowner, I will comply with all the regulations, as long as it is not a financial hardship on us. U.S. North Atlantic loading would be very difficult, therefore, we offered U.S. gulf only. I might point out in that charter point, Continental has to give some notice for a ship that comes back into on ballast from the Mediterranean on past the Malta. That is about 15 or 16 days steaming. In other words, if my ship is ready on February 15, Continental would have to declare the loading range on this vessel. Mr. STOVALL. We had hoped at this stage we would have fully covered the entire chartering operation for this program, but in our efforts to give maximum amount of U.S. tonnage participation in this program, we deferred application for waivers from January 22, until January 31, again with the 5-day waiting period. When this tender was published, we had hoped by February 1 we would have fully booked both American and foreign vessels. If this had been possible, our tonnage allocation of shipment could have been made. Mr. GOODMAN. Mr. Stovall, could you or some other member of Continental tell us approximately how much time it takes for you to order your cargo in from Seaboard to its source? I have in mind particularly this March 1 to 15. How much time does it normally take to move it from Seaboard to any place in the gulf? Mr. NORTON. My name is Ben Norton. I think the ordering of the cargo is a rather immaterial point. We operate various Seaboard elevators and some of the positions are determined at the last minute. In other words, we want to control the vessel until practically the last minute. We can have congestion in Galveston or Houston and maybe we might want to go to Boston. We want flexibility of loading elsewhere. Mr. GOODMAN. I appreciate that, but, Mr. Oberschall, I concur with what you said. Normally you would have to declare any vessel coming out of Malta normally around the 15th. In relation to that, if you were positioning a foreign ship, when would you reasonably know? I can't quite follow Mr. Stovall's reply to the original question. When would you know you can use the ship in the gulf or someplace else? When your charter is known, you would have to know? Mr. STOVALL. Was this in the form of a question? Mr. GOODMAN. Yes. Mr. STOVALL. I believe with the speed of these vessels, 15 days would be a bit of a long voyage. Ten days would possibly be more in order. Here again, we don't expect that every American ship we are going to charter would be coming from the Mediterranean in ballast-only a small percentage would be. Again, as a said, we had hoped by February 1 to be fully covered charterwise, so if there was two or three or four vessels returning from India or Pakistan we would be in position to declare ourselves, and we might require the owner to go to the gulf to load. This has happened with foreigners. We have vessels that we have withheld declarations of loading date right today. Because of this hearing it has been necessary to renegotiate some of the foreign charters. Americanwise this program is based largely on the utilization of tankers operating coastwise alternatively bulk carriers in ballast the same as Penn Carrier. This would automatically preclude declaration 10 or 15 days ahead of schedule as to the loading area. These points were all discussed and dealt with, however, we felt on American ships, the necessity of making arrangements to receive the vessel if coming from the Mediterranean, certainly before he passed Gibraltar outbound. If at all possible, we could give the ship orders as early as possible. Mr. GILES. Mr. Stovall, does it come down to this, as far as early March, as to your shipping arrangements whether they would be out of the gulf or North Atlantic, you will give the word to the shipowners, those you have already chartered as early as possible? Mr. STOVALL. Yes, sir. Mr. GILES. There is no contractual commitment right now. I want to be sure on this point, I want to be sure that you will give a set number of days' notice. Take a ship you have already chartered out of the gulf or North Atlantic, what is the latest date you can give the ship notice as to where to go, whether to the gulf or North Atlantic, for the first half of March? Mr. STOVALL. There are many vessels that would not require orders before Mr. GILES. Does that depend on each situation? Mr. STOVALL. I think so, yes. Mr. GILES. That is not covered by your charters? Mr. STOVALL. No, sir. We did determine that a vessel coming from the Mediterranean would apply for orders, as to the loading areathey would apply at Malta and the loading area would be declared 48 hours afterward or before arrival Gibraltar and his loading port 5 days prior to his estimated time of arrival at loading area. Mr. GILES. Five days prior to? Mr. STOVALL. Yes, sir. Mr. GILES. That is on the respective number of days in your charter? Mr. STOVALL. Yes, sir; only with respect to foreign vessels. It is negotiable and some owners have requested 5 days after sailing from the other side, other have requested 7 days and others asked for 48 hours off USNH. It has been a negotiable item depending on speed. Mr. GILES. As I understand it, I would sum it up this way: you actually have American vessels for the gulf or North Atlantic and you will be actually informing the shipowner which port area-I am talking of the first half of March-you will be informing the shipowners at various times, depending on each case. Some may have a month's notice, others may have only 5 or 6 days. But all have at least 5 days? Mr. STOVALL. I would say yes, all would have at least 5 days. Mr. GILES. I would say if Mr. Oberschall would give you a definite commitment for February 20 and on your part you would give him a commitment that you would take him out of the gulf, if that could be arranged-but you would not know for certain until February 20— but if he gave you an option until that date, would you agree to that? Mr. STOVALL. On declaring the range or loading? Mr. GILES. We limit it to the gulf-you say now you are not in a position to state definitely whether or not you could use this ship out of the gulf in the first half of March? What I am driving at is when would you be in position to make that judgment? Now, if Mr. Oberschall gave you an option on his ship to February 20, could you accept that? I asked this question, stating at the same time, that I recognize it is outside the terms of the tender and, on that basis, under our stated procedure you are justified and have a valid reason-I won't say justified-I will say you have a valid reason for not accepting it. We are interested in working these matters out on the merits so far as we can. You have the option arrangement provision in your tender in order to meet the requirements of our whole shipping schedule in handling this large amount. If Mr. Oberschall will say, "I will give you an option on my vessel until February 20 and then you let me know at that time whether you can or cannot use it out of the gulf during the first half of March," would you agree to that? Mr. STOVALL. I believe we could, but I would like to understand it fully. This is at his option, February 20. If we declared it was not workable out of the gulf at that date, it would be his option to cancel? Mr. GILES. That is right. And I also want the understanding on Continental's part that you would use that ship out of the gulf-let's forget the differential in weights-but if you could reasonably use the ship-we have a fairly good check on that because we would be able to know and would know what foreign charters are arranged out of the gulf for that period and so on. What I am saying really is, would you consider giving the maximum advantage in time to make this decision, would you consider taking the option from Mr. Oberschall as of February 20 if he gave it to you? Mr. STOVALL. I would say yes, but I would like to state with this option it would leave us in somewhat of a tenable position if on February 20 we could not arrange gulf and Mr. Oberschall should decide to cancel out, then we are faced with finding rather prompt tonnage as replacement. Mr. GILES. No, he could not cancel out if he gave you his option through that date. Mr. STOVALL. But if on February 20, we declare USNH as the loading area and he decided that he would withdraw from the business at that time, it would leave us in the position of trying to cover for the first half of March. If the foreign market should rise it could mean a loss to Continental and conversely, if the market depreciated Chairman GILES. I understand, so would you drop that back to February 15? That would give you more of an opportunity timewise in case you could not work it out. Would you consider a firm option from Mr. Oberschall good to February 15? STATEMENT OF VICTOR OBERSCHALL, JR.-Resumed Mr. OBERSCHALL. May I say something? Mr. GILES. Yes. Mr. OBERSCHALL. I could never give him an option like that anyway, so what Mr. Stovall-we are wasting time. Mr. GILES. Thank you. I was under the impression there was some area where you might get together. Let me ask, is there any number of days-well, the 15th is not far off. Let me ask you this way you would need to settle this here today or tomorrow? Mr. OBERSCHALL. I pretty much would have to have it, yes. Mr. OBERSCHALL. Frankly, there is a possibility of chartering to India today from the same position, from the gulf only, and any delay in this would work to the shipowners disadvantage. Mr. GILES. Well, I have gone into this because I wanted to try to consider the substance of the case aside from the mere technicality of the action, but as I understand it you really are not in a position to give any leeway here to Continental on this time. It does seem that way to me, again forgetting the precise language of the tender and considering the substance of Continental's position, it does seem to me I could not waive not only the wording of the tender which in and of itself has its value and should be respected by both parties, I think, but on the merits of it, I could really ask or urge Continental to make a judgment here today or tomorrow on this. So, on the basis of what I have heard, I would indicate my conclusion at this point and it is a tentative conclusion subject to our further checking out and going over it all either this afternoon or in the morning. I would indicate my conclusion that I believe your offer not being in compliance with the tender was rejected by Continental with appropriate cause. Now, that is my tentative conclusion at this point and I appreciate very much your being here and the very frank statements you have made as to your position. It has been very helpful. Would you like to say anything else at this point? Mr. GILES. Thank you very much, Mr. Oberschall. Before we take up the next specific case, ladies and gentlemen, I would like to indicate we are not going to complete all matters before lunch and I would like to suggest that we will adjourn at 1:15 and return at 2 unless I hear strenuous objection. We have a cafeteria on the third floor just beneath us and I am suggesting that if we could do it, it would be helpful. If there is a feeling among the parties, or the group, against it, then we will have the full hour. I see some heads shaking affirmatively on the hour. All right, we will adjourn at 1 and return promptly at 2. I would like to urge the shipowners involved in these specific matters to be here as well as the Continental. We will go as far on Marine as we can. I understand Mr. Dowd is here now. I want to announce what I think are now our totals that I was fumbling with awhile ago. We didn't have them added up as to the ships now in issue. That totaled 165,000 tons. For a grand total added to those definitely chartered it gave us a figure of 476,900 tons. We have referred generally to this tonnage. In metric tons, that is 1,500,000 tons. As you know, when we get down to business in charters, we deal in long tons and the Continental for an equivalent of 988,000 long tons, one-half of that is 494,000; 494,000 is 50 percent and that is what we would endeavor to get American-flag shipping for if it is available. As of right now, not having made a final decision on Mr. Oberschall's case, I will announce to you that to the best of our knowledge and according to our records, in any event 17,100 tons cannot be in issue-17,100, I get that by subtracting 476,900 from 494,000 and those figures are in long tons. Mr. Dowd, would you please come forward? I appreciate your coming down on relatively short notice, Mr. Dowd. STATEMENT OF HENRY R. DOWD, VICE PRESIDENT, MARINE CARRIERS CORP., ON BEHALF OF OCEANIC PETROLEUM CARRIERS, INC. Mr. Dowd. My name is Henry R. Dowd. Mr. GILES. Mr. Dowd represents Oceanic Petroleum Carriers, Inc., which has offered the Elemir, a T-2 tanker for the amount of 10,700 tons, and the Marine, a T-2 tanker, owned by U.S. Shipping Corp. Both of those vessels were rejected by Continental Grain Co. Mr. Dowd, thank you for coming, and will you just go right ahead and state the facts of your offer as you know it and any conclusion you may have for us. Mr. Down. I apologize for not being here at the original call, but the plane was delayed by fog. The Elemir, A T-2 tanker, was offered to list a cargo of 16,000 tons, 5 percent, from the U.S. North Pacific to Nakhadka, a Siberian port. At the preliminary negotiations as to terms and conditions, with McLoskey & Co., acting on behalf of Continental Grain Co., we agreed on terms and conditions and then we were advised that the receivers, the U.S.S.R., were not agreeable to accepting tankers into port. This was approximately on January 28. We have the original communications. We then with that ship tried to secure other business as a ship is due on the west coast in 10 days. Again yesterday we offered it to Continental on the terms of the Maritime Administration. They again informed us the ship could not be accepted, because the receiver, U.S.S.R., was unwilling to use tankers in a North Pacific port. At the present time, the ship is without employment and heading for the west coast. Mr. GILES. Mr. Dowd, may I ask just one question before we hear from Continental? Could either one of these ships get in position on the east coast or the gulf? Mr. Down. Elemir is for loading on the west coast and to arrive on the east coast would be a substantial loss, it would be catastrophic. The Marine is loading on the U.S. gulf. Mr. GILES. Excuse me. I was thinking both were from the west coast. The Marine is from the gulf? Now, you have explained your offer there on the Elemir. Would you explain your offer on the Marine? Mr. Down. The T-2 flag Marine was offered for a cargo from the U.S. gulf only loading March 10 to 25. |