Mr. GILES. Well, Mr. Coles, taking the record as we now have it, there is evidence of efforts on the part of Continental to get the buyers to increase their draft limitations, and there is the statement from the buyers that they cannot do this, and he explains it on the basis, apparently, of the double handling and the congestion in this particular period of heavy arrivals of grain.

Now, I do not understand these letters to say we could not physically do this, if we did not have heavy arrivals of grain during this period, but if this were the only shipload of grain going in, then perhaps the Soviet buyers would be persuaded to go into this.

But under these circumstances, it seems to me this is a plausible explanation, on the face of it.

Mr. COLES. Mr. Administrator, I have no personal knowledge, but I have just received a note that some Black Sea grain will be offloaded directly into barges at the river port of Novorossisk. And there is a question mark next to the name of the port.

Now, under those circumstances, it would merely mean that the barges would have to come out a little bit to get roughly 6 feet of the draft off this big boat, and then she moves right into the port like anybody else.

Mr GILES. All right.

Now, under our rule of evidence, which we talked about, we said the affirmative burden of proof should be on Continental to show that they have done all that they reasonably can to work this out.

It appears to me from the record that they have done that.

Now, I would like to ask you this question: Would your company be in a position, within the matter of the next 3 or 4 days, to send someone to the Soviet Union and to have full information about your ship, and attempt to persuade the Soviet officials that your vessel can be used, notwithstanding its size and draft? And would you like to do that and hold this open for that period of time?

Mr. COLES. I can't answer, but I certainly would recommend it.
Mr. GILES. Do you think that would be desirable to do?

Mr. COLES. I certainly do.

Now, there is a problem of getting visas. In other words, I don't know how you would get a visa to get into Russia.

Mr. GILES. I don't have much influence in this Government, but if I can help you, you let me know.

Mr. COLES. Let me say that I tried just within the last couple of days to get some help from Maritime for an owner who wants to supervise the discharge of a ship from the State Department, and they said there was nothing they could do.

Mr. GILES. I am going to reverse that "nothing we can do."

Mr. GOODMAN. Mr. Coles, I fully appreciate that anyone can change their mind, but I am a little disturbed at your conversation, or surprised.

Last evening, in my talking to Captain Bennett, I believe it is, or Mr. Spears, on this very subject, Mr. Spears strongly indicated to me, and this was a telephone conversation, that he was fully satisfied that the National Defender could not reasonably be handled.

Could you explain the difference in position?

Mr. COLES. No, I can't.

I have here a note written by Bob Hoppel of my office telling me what the National Defender's owners wanted presented. I have presented it.

I am more surprised than you are, because I know they applied for the business, and obviously, if they didn't think it could be used, they wouldn't have.

Mr. GILES. On that point, since we are dealing with what is before us on the record, we will let Mr. Spears verbally change his mind. overnight, if that is what he has done.

I do not want to know at this point what specific points or ground rules, again, I should indicate, but I would like for Mr. Coles and for the Continental representatives to consider specific days right here within the near future, how many days we can give National Transport Co. to afford them the opportunity, if they desire, to send their representative to the Soviet Union, and explain their situation, and if they can succeed where Continental has failed in persuading the buyers that this ship really can be utilized, then I would regard that as an advance forward for us as a whole.

And I think this would be in line with our general approach, to show that the larger draft vessels could not actually be used, or, to refine it a little bit closer, Mr. Coles, that the Soviets will not take them.

I think you would agree with me that even if in the balanced judgment of all of use here we concluded that the Soviets ought to use them, and could as a physical matter, if in fact they would not, I assume you would agree with me that we should not force Continental to take something that they can't really sell.

Mr. COLES. I am not sure I do, Mr. Giles. I don't think I will argue the point.

Mr. GILES. That is an important point, Mr. Coles.

I want to zero in on that. You just give me the light of reason here. Where, assuming the Soviets stick with the record they have made which on the face of it is plausible, assuming they do that, on what basis could the Government then say to Continental, "You have got to use this ship"?

Mr. COLES. I think it is simple. You start off with the hypothesis that the Russians do not want to use high-cost American ships. I think that is clear. It took months before we got over that hump.

No. 2, the Government of the United States is insisting they make American vessels. According to your hypothesis the Russians say "we will not use vessels over 33-foot draft or over 29-foot draft or over 21-foot draft" and they could indirectly do what the Government of the United States has not permitted them to do directly.

you

Mr. GILES. I agree with you on that. I have used a little better example than you used. The Soviets could look at all we have going on in our discussions here in the United States, it has been quite open. They can say, we are going to have a contract which says we can't use any vessels over 15,500 tons and that would accomplish what are suggesting even better. I am not arguing the broad principle. I do not concede, as I have informed the Continental representatives on several occasions when we were discussing the draft, I cannot concede and do not in there adopt the principle that merely what is in a contract is going to govern, merely what is in the contract. But if we have a situation where there is, to the best of our knowledge and judg

39-375-64--15

ment, some actual plausibility and rationale, or rationality to support it, plus an inability to persuade the buyer to do otherwise, then it seems to me that the charter will have met his affirmative burden of proof because we can't adopt your indicated principle all the way literally any more than we can the other.

If we did that, we would be saying, instead of the buyer specifying he would like to have wheat delivered in 1964, we would like to rewrite it and say you take it in 1965, and so on, ad infinitum. I do want to explore this further. I have no indication and will not indicate tentatively otherwise any conclusion on this. It is open subject to further factual development as the National Transport Co. may be able to assist us on that.

Mr. Stovall.

Mr. STOVALL. Mr. Giles, may I reiterate that this vessel's position with ETA March 12 to 13 in the range, and March 16 to 17 in the gulf makes it physically impossible to use the vessel under any circumstances despite whether the Russians might accept or reject, despite whether the owners would run the risk of the safety of the vessel in the Black Sea and in ports which are deemed unsuitable.

Even if the vessel could make a March 1 to 15 position, we have only applied for waivers in the amount of 33,600 tons. Consequently, there would be no cargo available for this ship for the entire month of March.

Mr. GILES. Captain, do you have the detail on that?

Mr. GOODMAN. Yes. Our information is that he has offered in U.S. Black Sea ports for loading, lay days March 10 to 25, alternatively U.S. late days March 14 to 31.

Mr. STOVALL. ETA March 12 to 13 USNH March 16 to 17, gulf. Mr. GOODMAN. I see no ETA on this.

Mr. STOVALL. He refers to subject vessel loading at one U.S. gulf port, charterers option, suitable elevator at owner's option such as Oswego. This vessel of 810 feet or more is almost impossible to handle in any facility other than an oil facility for which this vessel was constructed originally. I doubt that more than one or two facilities of any type in the United States could accommodate this ship safely. Certainly our elevators are not suitable for it.

As a matter of fact, the one elevator which this owner points out as being suitable is the same elevator as to which we received letters of complaint that the elevator was unsuitable for this. This happens to be under Public Law 480 program that he was loading. He held us liable and responsible for any damages to his vessel. We were the suppliers under the Public Law 480 program where it was the United Arab Republic or Pakistan mission for charter. He discussed this matter with the Continental Grain Co. I don't see how the vessel has suddenly, in view of the Russian business, become suitable both at loading and discharging facilities. I am surprised because I had a discussion with the owner of the vessel and Mr. Tom Spears, and they showed absolutely no interest in this business and said that they wanted to make it over, that they felt they should make it over but they understood it would be declined. They understood also that the vessel was unsuitable.

Mr. GILES. I would like for one of the Continental representatives to go to the telephone if they can and call Mr. Spears, unless Mr. Coles have you just talked with him?

Mr. COLES. No, I tried to get him at lunch and was unable to do so. Mr. GILES. Would you have any objection if Continental representatives could call him and have him send in a wire?

Mr. COLES. No. What sort of wire?

Mr. GILES. A wire as to whether he is interested in having the Defender used.

Mr. COLES. Unless he is kidding me he is. Other than that I will be glad to call him myself.

Mr. GILES. Will you do that, please?

Mr. COLES. Certainly.

Mr. GILES. Captain Goodman, do you have any comments on the points he raised? I am not familiar with the details.

Mr. GOODMAN. For record purposes in relation to all of the large vessels in the deep draft, we have gone to as many sources as we could to develop information in relation to draft in Russia-particularly the Black Sea ports. We have gotten quite a bit of information through the Canadians in relation to the ships that they loaded. Up to this point and that includes most of the ships that have been quoted in news accounts and so forth, we have been unable to find any ship that arrived in the Black Sea with more than a 32-foot draft.

I think some of the reasons for the confusion, there were ships that left Canada with drafts as much as 35 feet. Certain parts of it, I am not sure about the fresh water but that enters into it, too. But we have found in checking those ships through that most of them went in and offloaded a partial cargo at Hamburg and some other port and then continued on to Odessa. I think that is the reason for some of the erroneous interpretation. I must admit that I have been unable to find any ship that has arrived in the Black Sea with a draft in excess of 32 feet.

Mr. GILES. Do you have any comments on these last points that Mr. Stovall made about the scheduled dates?

Mr. GOODMAN. No. That was covered before. The same discussion. Mr. GILES. We will set this one aside. I will, subject to further checking on your part, Mr. Coles. I want to consider our total situation with you and with Continental's representative to see if he would be sensible from your point of view to have an actual visit in an effort to work this out on the other side.

We will further define and redefine, Mr. Stovall, where we stand on these other points that you raised. If we conclude that the situation would be resolved on the basis of the dates offered or the position of the vessel, then we will so inform Mr. Coles. If that settles the issue, then regardless of his thoughts on the other, he would not want to take a trip that would not do him any good. It seems to me there are so many dangling facts that we can not resolve them at this point, we will open the record on this matter. I will be available later today and we will decide at the conclusion of this meeting what we will do and what schedule we will follow on all of these items that we have left open.

Thank you very much, Mr. Coles.

At this time I would like to recognize Mr. Thomas Gleason, who is president of the Longshoremen's Association.

We appreciate Mr. Gleason's being here today. As is generally known, I received a telegram here yesterday signed jointly by Mr. Paul

Hall, Mr. Gleason, and Mr. Calhoon. In response to that, I sent an answer giving my point of view and inviting them to be present here today. We will put Mr. Gleason on, assuming you have no objection, and put a copy of your telegram and my answer into the record at this point.

In the interest of time, I am not going to comment specifically on those wires, although I may have some general comments later on. (The material referred to follow :)

MARITIME ADMINISTRATION,
U.S. DEPARTMENT OF COMMERCE,
February 5, 1964.

(Text of telegram sent today by Acting Maritime Administrator Robert E. Giles, in answer to telegram from Paul Hall, President Seafarers International Union of North America, Thomas Gleason, President International Longshoremen's Association, J. M. Calhoon, President, Marine Engineers Beneficial Association, text of which follows Mr. Giles' reply.)

Mr. PAUL HALL,

President, Seafarers International Union of North American (AFL-CIO),
Brooklyn, N.Y.

Mr. J. M. CALHOON,

President, Marine Engineers Beneficial Association,

New York, N.Y.

Mr. THOMAS GLEASON,

President, International Longshoremen's Association,
New York, N.Y.:

This acknowledges your telegram of this date regarding shipping waiver application by Continental. I do not know whether this waiver should be granted and we cannot possibly know until shipowners have had the full time to file their specific offers with the Maritime Administration in accordance with our waiver notice issued last Friday. Shipowners should have filed with Maritime Administration their offers on Continental shipments in compliance with terms and conditions published by Maritime Administration.

To extent American shipowners offer ships in compliance with terms and conditions of last Friday's notice, no waiver will be granted. To extent American shipowners do not offer American-flag tonnage to cover shipments in question, the Maritime Administration will have no choice but to grant waiver. Am sure you understand we will have to follow our published procedure, which was fully circulated among the shipping industry representatives that it was a proper and reasonable procedure for us to adopt. For purposes of informing all interested groups concerning our action on Continental waiver application, I am setting meeting at this agency Thursday morning, 11:30 a.m., room 4519, GAO Building. Am asking that Continental Grain Co. representatives and shipowners or their representatives who have specific offers in issue be present at that meeting. Am also asking that representatives of AMA, AMMI, CASL and PASSA be present. Am inviting interested representatives of maritime labor to attend this meeting and will greatly appreciate if you or your designated representative will be there. This meeting will be held before any final decision is made on waiver application and every effort will be made to explain fully any specific case in issue between shipowners and Continental and to explain fully the basis of Maritime Administration's decision on those specific cases if we are called upon to decide them. I can appreciate the fact that on an issue of this sort difficulties and misunderstandings can often occur because of misinformation or lack of information as to what the facts are. You have the cooperation of this agency in every respect in getting information and being fully informed as to what the basis of our decisions will be.

In turn, I would appreciate your cooperation in helping all of us to focus on specific cases and endeavor to decide specific cases on the merits rather than deal in unsupported generalities. Will you please let me know if you or your designated representatives will be at 11:30 a.m. meeting tomorrow.

ROBERT E. GILES, Acting Maritime Administrator.