and they went out on that basis on the U.S. gulf and Atlantic in four different time periods.

Am I correct? Or was it three?

Mr. STOVALL. Four equal periods.

Mr. GOODMAN. Four equal periods, which we at the time were fully in agreement with, and I am still in agreement that that was a very reasonable policy to follow, which allowed all shipping available in the next 60 days to participate, rather than any one concentration.

The same thing applied to the west coast, even though there was just a small amount of tonnage, 150,000. But that, too, was spread over equal periods.

This particular issue of Mr. Dowd's with the Marine-just listening to Continental up to this moment, I hadn't realized that their entire quota for that particular quarter was already booked, and as such, I must say that Continental, on that particular issue, is in accordance with the understanding, and the agreement, and the terms for that period in relation to this particular ship.

Mr. Down. Could I comment, Mr. Giles?
Mr. GILES. Mr. Dowd.

STATEMENT OF HENRY R. DOWD-Resumed

Mr. Down. I think we are cutting fine lines, here. When we get down to this, I don't think Continental can schedule this close. If you get down to a ship scheduling U.S.-gulf, you have a time differential of 5 to 7 days.

I am sure if they examine their program and the estimated time of arrival, they could switch around 40,000 to 50,000 tons either to first half March or second half March. I don't think the ships run on that schedule. I don't think the programs are handled that way. I think they are being quite arbitrary about it because it suits their conveni

ence.

Mr. GILES. Mr. Dowd, is this point correct, that the tender that was put out in the last 5 days did not specify this particular period of March?

Mr. Down. I don't have the tender in front of me. I don't recall, sir.

We looked at it as 500,000 tons to be scheduled in a relatively short period in February and March. And there were relatively protracted terms, and the owners couldn't keep their terms for February, and it was never our understanding that there was any definite schedule set as to how much American would be sent in the beginning or end of February, the beginning or end of March.

If that had been the case, some of us might have rearranged our schedule, but we had no knowledge of this.

Mr. GILES. You understand, Mr. Dowd, that in our initial discussions we did recommend, on our part, that they spread this evenly over these 2 months.

What is your comment on that, as a general approach that we adopt here in Maritime? Do you see anything wrong with that as a general principle that we suggested they follow?

Mr. Down. No. As a general principle, I think it is wise to spread out the program over a period, but I knew there were going to be efforts made to accommodate American shipping.

American shipping is much more limited than foreign ships. On all Public Law 480 cargoes, all the foreign missions always give preference in dates and positions to the American vessels so that they can live up to the requirement of 50 percent.

There are two ways to approach it. If you approach it on a negative position, you can find reasons that might sound valid when you analyze them, but in the course of negotiations in business, they don't stand up. I think this is a negative approach.

Mr. GILES. Well, Mr. Dowd, how about your point of the gulf only? Isn't that outside the tender terms?

Mr. Dowd. On gulf only, I also would like to comment on that.

One thing I would like to say: Mr. Oberschall, the last witness, condescended to have shipping excluded. He mentioned he had certain very strong personal reasons, for which he should be admired, for not pushing for the Russian business. He lost his family in Hungary and has no desire to.

Mr. Oberschall, it is true, also said he would just as soon have other business.

Mr. GILES. Excuse me. I want to state what my understanding was of what he said.

I did understand that Mr. Oberschall had offered this on the terms he did, and if that could be found acceptable he would definitely take the business.

Now, is that your recollection?

Mr. Dowd. He would, yes, for this reason. He has very little option at the present time to keep his ship employed elsewhere, and the American T-2's are taking this business as minimum profit compared to other business, which doesn't enter into it.

Mr. GILES. On this, let's let Mr. Oberschall speak for himself. He made it clear to me that he wanted the business if it could be accomplished on the basis he offered.

He also, and I accept this as his personal situation, not prejudicing what you may feel for your situation-he also made it clear that he did not feel strongly about this particular job offer, here.

Now, you certainly are not governed, as a matter of precedent, by his feeling on that.

Now, you may go ahead, please, sir.

Mr. Dowd. The reason he had no preference for this business is that today you have India business, which you have the opportunity of returning with cargo, which makes the voyage more profitable. Therefore, he felt that if he does not take the Russian grain business, he will probably obtain the Indian business today.

Now, the reason I think Continental should allow gulf loading only, in spite of the tender terms, which were not considered in detail by us--it was a rather abnormal condition-but in most cases the supply is waived.

In cases of any quantity such as this, where you have 200,000 tons of shipping loading in 1 month, I see no difficult in allocating. They know approximately how much tonnage is moving from the gulf.

It might be 50,000 tons to 150,000. Therefore, as a minimum of 50,000 tons, they can definitely take three American ships for gulf loading only. That is more than have been offered for only gulf.

It does not limit their flexibility. They don't need flexibility on every ship; 200,000 tons is very easy to allocate this definite amount for gulf.

The majority of cargo moves historically from the gulf. It is not customary for other chartering firms to ask for the option to load on the range or the gulf.

In addition, we have a specific reason, we have two good reasons, for not going to USNH with a tanker.

No. 1, at the Continental terminal in Norfolk, we are assigned to go there, and it costs us 75 cents a ton to load. It is a self-administered terminal by Continental, and they arbitrarily set the rate of loading at 75 cents.

Everywhere in the U.S. gulf where we have our option to select a stevedore, it costs us 20 to 25 cents a ton. That is a difference of 50 cents a ton it costs us with a tanker to go to Norfolk. On a cargo of this size, it is $8,000. We don't think this is a burden the ship should accept to obtain this business.

Mr. GILES. Mr. Dowd, many other shipowners have accepted that term, haven't they?

Mr. Down. There haven't been many tankers chartered on this business, I believe.

Mr. GILES. You mean this reference you made applies only to tankers?

Mr. Down. That is correct, sir.

Mr. GILES. All right. Let me ask you this question, Mr. Dowd. What is your comment-we have been talking to the substance of what would be good business or what would be feasible on the part of Continental. Now let's focus on what I would call the technical point or the ground rules.

What is your comment, now, on the desirability or the feasibility, on my part, or the justification, for, in effect, changing the ground rules here for one case? Would you just comment with respect to that?

Mr. Dowd. I believe the ground rules have been so flexible for the last 3 weeks-I am underestimating; for the last month-we have been negotiating terms and program in general. The last bulletin issued by Maritime Administration was dated January 31.

Now, I believe there have been three or four revisions prior to this. Another revision I don't think would change the general tempo and basis of negotiations.

Mr. GILES. Well, you are correct. I don't agree with your exact choice of words about the ground rules being changed. That is not

accurate.

Mr. Down. Pardon me. I will change that.

Mr. GILES. We have, as everyone knows, over a period of weeks had to make adjustments or decisions on one detail after another. And I think that changes, if you would call them that, have been more in the nature of our making the decision the first time.

Then I think we also have the situation, Mr. Dowd, of where we have made these clarifications or made these decisions, as being applicable across the board for all shipowners.

And the problem, or the question I have in my mind at the moment, on your specific case, is that it appears I would be making a departure from our so-called ground rules for one case or for one owner and one ship.

I am just suggesting that the point is there, apart from these other, more substantive matters that you have raised.

But I would like to hear from Continental now.

Setting aside, for the moment, our ground rule, our technicality of the tender, I would like to hear from you on the major point Mr. Dowd made, that really you can work this out, that you are in a position of just taking advantage of a "technicality."

And I believe what Mr. Dowd is really saying, if I can interpret his point-he did not use these words-is that but for the difference in the cost to Continental of American shipping, or using his ship, but for that difference Continental would, as a matter of ordinary business practice, and for its own ordinary convenience, really not have any difficulty in working him in on the last half of March, notwithstanding that your schedule has already been completed, as we initially agreed with Continental would be a proper schedule.

Mr. Stovall, would you comment on that?

Mr. STOVALL. Mr. Giles, I would like to say that when this program was first scheduled, and having been in Washington and having discussed the program with you people, it was made clear to us that the American shipping schedule must be in complete accord and in complete conformance with the foreign shipping schedule.

Therefore, with some 840,000 metric tons to move in a period of 2 months of the USNH or gulf, again realizing the logistical problems, which the interior as well as the seaboard elevators face, it was deemed fair and reasonable to spread this quantity evenly at approximately 210,000 tons in each 15-day shipping period. That would mean that some 200,000 tons would fall in the last 15 days of this contract period; namely, March 15-30.

Flexibility must be maintained in order to properly schedule and in order to properly execute a contract of this size.

The interior and the seaboard elevators must be aware of the quantities that are going to move through the ports for any 15-day period. The purchase of the grain, the movement from the interior, is something that Mr. O'Neill can comment on.

But in the chartering activities, whether it be commercial or Government sponsored, a 15-day shipping period is normally adopted. Under Public Law 480, in many cases the foreign missions will purchase grain prior to chartering of freight with optional load and they know the loading range. In our particular case, with the immensity of the program, at the time the schedule was set up, it was impossible to determine. The only fair way to allow the maximum amount of U.S. tonnage to participate was to spread it evenly.

Therefore, 210,000 tons was allocated for a March 15-30 shipping schedule, and we have chartered 103,500 tons American, which is 50 percent in that period.

We made no application for waiver in that period, and I see no way that we could deviate at this time.

Mr. GILES. Mr. Stovall, Mr. Dowd offered this for the last half of March. What is your situation with respect to the first half of March? Is it fully covered?

Mr. STOVALL. No, sir. The first half of March is open in accordance with the application for waivers for 36,000 tons.

Mr. GILES. Mr. Dowd, can you possibly fit your ship into the first half of March?

Mr. Dowd. No. It is not feasible at this time. We probably will arrive in the gulf actually about March 18, and we couldn't take that risk, because then it would be Continental's option to cancel the vessel, and we would be without employment.

I would like to ask Continental one question.

When they keep mentioning the immensity of the program and their scheduling and moving grain into the elevators, there are two things I would like to ask, just to clarify the statements.

What portion, of 200,000 tons a month, of their Russian sales, is that? It is not their large and only business.

And, No. 2, does Continental mean to say they are not going to sell any more cargoes for the second half of March? I believe they will. They always have in the past.

Mr. STOVALL. Mr. Dowd, first of all, your figures are wrong. It is 400,000 tons a months, not 200,000-200,000 tons of foreign and 200,000 of American.

Mr. Down. I am talking for a 15-day period-200,000 tons.

Mr. STOVALL. We are talking strictly about the fact there will certainly be no further business done in this period for Black Sea or U.S.S.R.

Mr. Dowd. Is Continental going to do any other business in that period?

I am not worrying about Black Sea for the moment. Let's say with the question of unloading, here.

Mr. STOVALL. I couldn't comment on the question of whether any further business will be done or not. I doubt very seriously if it will for this period.

But you mentioned the fact that there are very few tankers. I would like to mention at this point that 50 percent of the American vessels chartered are tankers, and this is including three liners. Out of the 12 U.S. tramp vessels, of various sizes that were chartered, 8 of them are tankers.

Mr. Down. I don't think anyone will object to all-gulf loading. Mr. GILES. It seems to me that is an important point.

You made the point a while ago about this extra charge that the tanker incurred, and therefore you were limiting your offer to the gulf. And it seems to me and I just accepted it at the time-that there were no other tankers in this particular situation.

It seems to me that is an important point. If you got all these other tankers in it, they have accepted these terms. They have come in on the optional basis. And I just wonder what good basis we could have for making an exception for one owner on that point.

Mr. Dowd. All right. I would like to also make one other point on basic issues.

We offered the ship, and from U.S. gulf loading, on these dates. We were originally told cargo was not available. Yesterday we were