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Mr. GILES. Well, I hope that is not what I have been doing. Let me just say this, Mr. Gleason. I think I probably was as surprised as maybe you were when we got into this thing and I was confronted with all of the details that we were called upon to resolve or sort have been in the middle. We started out. I said, well, we got rates, so we took our rates over from the Public Law 480 program. While many shipowners did not particularly like that I think it was generally recognized that that was a reasonable decision to make under all the circumstances. I did not, at that time, anticipate having to get into all of these minute items, who is going to pay the insurance, who is going to have the overtime and when does it start, and what exactly is going to be the draft and how clean is the ship going to be and who is going to stand that. What of the laydays, what of this and that? All of the hundreds of items that do go into a charter. But once the Government sets off, in effect, a market and says, "50 percent of this is going to be for American vessels," once we take that step and we set our rates, if we just sat by and let the two parties go to it, that is the shipowners and the grain exporters, we just have so many items in controversy and in issue that I am afraid we would never get anything settled. We would just have sort of jungle warfare. It sort of works on both sides because in that situation the grain exporter can go over the line too far as against and to the prejudice of the shipowner and the shipowner who wants to get the business and get the best bargain, he can go a little too far. All I am saying is that when we have a situation like this it is not the same as the ordinary business situation where the shipowner and the broker or the exporter can sit down and they work it out on a private, competitive enterprise basis.

I am frank to say we have simply had no choice here but to get into all of these details. There have been many items on which we have had to make a judgment where the grain exporter violently disagreed and many items on which the shipowners did. All I can say is that we have tried to do the best we can. The record will have to speak for itself. I recognize the difference of opinion and there is a lot of room for difference of opinion, but I would express this hope to you, sir. I would hope that the labor unions, the labor union officials, will try to see the total picture before they make any final judgments with regard to picket lines and that sort of thing. I just hope that they will take all of that into account. I feel very strongly, for example, in the Cargill matter where we had to issue a waiver, I feel very strongly that some of the labor officials were misled there. They were misled by, according to my information, by one or two or a very few shipowners who did not work it out, themselves. So they gave their story from their point of view to some labor union officials and then some action was taken on that basis.

I would like to say to you, Mr. Gleason, that the shipowners as a whole, the vast, vast majority have cooperated with the Government in this. They have cooperated with us in setting up this program and working out these basic arrangements. Most of the basic decisions we have made on this really came from suggestions made by shipowners and their representatives.

We could not have done it otherwise because they know the business much better than we possibly can. I would hope before your union or any other union accepts the final word from any person involved

in this that we have acted arbitrarily or capriciously against somebody in ruling for Continental as against the shipowners, I would hope that you at least would let us have an opportunity to go into that specific case and show you what the facts are as we see them.

Mr. GLEASON. Mr. Administrator, up until the Tulsa Hill we made our commitment to load this grain and I told you it was not unanimous. A lot of people were running around picketing, knocking ships off. We took a stand that it was going to benefit the American sailor, benefit the American Government, it would help our balance of payments and what have you. We went along with this program but listening here today, at the evidence, why does Continental book 50 percent of its foreign tonnage first before it books the American tonnage? Now, I am not a seaman. I am a longshoreman for 48 years on the docks. I have loaded ships, I have superintended ships, I have maneuvered ships around, I have changed ships from one port to another. What I heard here this morning from Continental does not jibe with what a practical man in the steamship business-it does not jibe. I don't understand again why they book 50 percent of the foreign tonnage before they book any American tonnage at all.

Mr. GILES. Mr. Gleason, and, Captain, you get ready to pull out of your files specific cases-Mr. Gleason, one of the reasons that Continental did not get to book or charter the American tonnage as rapidly as I thought they would was that some of our owners from the very beginning made offers which were clearly outside those basic terms and conditions we had already passed on.

Now, I don't know what the situation was in some of those cases except I think the owner must have been in an individual situation where he really did not have to make a decision at that time as to whether he wanted this business or some other business and perhaps he had his eye on some other business that was really more desirable and he really did not want to commit himself. So the fact is, and we are going to cite some of them here, in those early days of this several shipowners sent in offers which, on the face of it right off the bat, Continental could lawfully and properly turn down. Now I think as an example which demonstrates exactly what I am saying and supports it, when Continental filed their application here last Friday they had actually booked only 213,000 Tong tons. In this 5-day period which ended last evening an additional 98,500 tons was chartered. Mr. Gleason, they were on the same terms and conditions that had been on the board and for the same periods that had been on the board very clearly since January 17. Now I am not criticizing those shipowners for not coming in here 2, 3, 4 weeks ago because I am going to say that is their own business judgment. All I will say is that I do know, and it is clear to us here, that for their own purposes and perhaps for very good reason, on their own part, many American shipowners who are now actually chartered on this program waited pretty much until the last minute and perhaps very well for a good business reason.

Again I would say that there have been many items that Continental did that we did not agree with and we had to ask them to change, not that we could order them too. We simply informed them in advance that if you ever get around to having to apply for a waiver these are

the ground rules, if I have to use that term, that we will have to go by.

Captain Goodman, do you have some specific items?

Mr. GLEASON. I am just reminded here now more than 200,000 tons of foreign tonnage bought before tender issued for one American ship by Continental.

Mr. GILES. Would you repeat that?

Mr. GLEASON. More than 200,000 tons of foreign tonnage was booked before tender issued for one American ship by Continental. Before they at least booked for one American ship they booked 200,000 tons foreign ships. In no other country in the world could you do this.

Mr. GILES. Mr. Stoval, will you respond to that? As I recall, Mr. Gleason, we got with Continental very soon after we knew they had a contract. Now, will you respond to this particular point?

STATEMENT OF L. C. STOVALL-Resumed

Mr. STOVALL. I would like to preface my remarks by saying under the Public Law 480 program and ICA program the foreign missions are allowed to book foreign or American as long as they balance off at the end of the shipping period.

Mr. GLEASON. I am not interested in Public Law 480. I am interested in this Russian stuff.

Mr. STOVALL. This contract was concluded on January 2, which was a Thursday, late in the afternoon. Friday was January 3. It was practically done by a transatlantic telephone call becoming a transatlantic handshake. The American market, since the Government has put ceiling rates on it, cannot move, consequently there is little fluctuation. The owner is entitled to ask the ceiling without any trading. We can't negotiate on rate. We must pay maximum rates if he sees fit to request. The foreign market on the other hand has been extremely erratic and it has been very volatile since last August and September.

We have experienced increases and decreases, as much as two and a half dollars a ton over a short period of 3 to 4 weeks. Considering the size of this program, 500,000 tons of foreign and 500,000 tons of American, we deemed it prudent the minute the business was concluded to protect ourselves by getting at least 100,000 or 200,000 tons of foreignflag tonnage booked where owners were willing to fix before the market moved or additional business came along and the market took a jump which would create a tremendous loss on our freight operation. It was on the 3d of January that about 80,000 tons was booked. The following week we booked another 30,000 or possibly another 50,000.

Shortly thereafter, within a day or so, we were in Washington to sit down with these gentlemen to work out the contract terms and tender terms for the American-flag ships. Believe me, our first tender, the responses were nil. Our second tender, the responses were nil. It was the owner's option under the guidelines set forth by the Maritime Administration to work any business he saw fit and to still keep us hanging until the last minute and come in and book this cargo. Consequently, there was no advantage to the American owner to come in and book right away unless he specifically wanted to. We were successful in booking a few ships in the very early stages. Then there

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was practically no activity. Then there was another brief period of activity. Then the owners sat back and said, "We have until 5 p.m.' We did not come in and apply for the waiver after the 5 days as we could have. We postponed that for some 8 or 9 days. We agreed with the Maritime Administration even during the 5-day period we would solicit trade as prescribed by current export Bulletin 883—we would continue to negotiate and did so.

These owners had the opportunity and exercised their option of holding off until the last minute and then coming in and saying "we book, book, book."

Mr. GILES. What was the date of your contract?

Mr. STOVALL. January 2 it is dated

Mr. GILES. What was the date of your first tender?

Mr. STOVALL. The first tender was January 7-I am sorry, January 7 we were in Washington, January 6 we were in Washington and we went back and prepared the tender.

Mr. KLOSTY. January 8.

Mr. GILES. Do you have the information? Do you have the information how much foreign tonnage did you book between January 2 and January 8?

Mr. STOVALL. I would say approximately, Mr. Gleason's figure, of 200,000 tons. I believe it was 180,000 to be exact. I don't say it was all chartered during that period. I believe the first 3 days we chartered 110,000 and then we took a ship here and there. We took a couple of time-chartered boats to maintain some flexibility in the business. Then we withheld chartering foreign flag. We could not hold off forever and since American tonnage did not respond immediately we could not hold off chartering foreign flags because we knew we would require 500,000 tons of foreign flags.

Mr. GLEASON. You made the ground rules for the 500,000 tons. There was not any ground rules made with the American union when we were requested to move this grain, about 500,000 tons going into foreign ships and 500,000 tons going into American ships. We were of the opinion that all the American ships that were available would be used to carry this grain. But you made the ground rules that gave 50 percent of this cargo to the foreign bottoms.

Mr. GILES. Mr. Gleason, that is not right. Such ground rules as we have here today

Mr. GLEASON. I am talking about originally. Originally when Mr. Reynolds came in to us, Mr. Rosell followed through when a ship was picketed in Albania. I believe Cargill got a waiver on that ship. Came in again. We told them we were not anxious to move this grain but we wanted the American ships to handle it. Now we got plenty of American ships who are in the passenger business. We don't have too many American ships in the freight business. It was probably our understanding and our belief that many of the American ships were to be taken out of mothballs and put American seamen to work to carry this grain to Russia. This is what we were attempting to do and by creating some jobs for the American seamen, not to create jobs for some other people because we had a firm policy that we did not want to handle it. We only handled it because we were requested by the Maritime Union to do it.

Mr. GILES. I don't think there was any suggestion on the part of this agency that I know about or the Department of Commerce or the Government that ships would be taken out of the mothball fleet. The average cost of taking a vessel out is about $200,000. We are talking about a program here

Mr. GLEASON. Would that be too much? Look at what we gave Tito, Kadar, Gomulka, and those guys. Would that be too much to give to the American seamen?

Mr. GILES. It depends on how many owners you could find who would have that much money to spend to take the ship out.

Mr. GLEASON. I am talking about the Government. You are subsidizing 17 of the lines already. Would it be any more trouble to subsidize some of those ships to take the ships out of the mothballs?

Mr. GILES. We have a subsidy in the Public Law 480, too. That is quite substantial as you know. Mr. Gleason, you have heard the comments here and as to these reasons there is certainly room for disagreement on honest disagreement on many of these items. I would say again, because it is my job to try to do the best we can here. I do think on these basic issues where our Government has taken a position, I do think there is an obligation on the part of all of us, whatever is our position, private or in the Government, to try to help the Government to carry out these basic decisions. That means primarily with respect to our foreign trade, international policy. I would like to say again that if we could find, or if I am told of a specific case where we have manipulated or been in "collusion"-that is a pretty rough word to bandy about and get in all the newspapers-you know, "collusion" in the dictionary says that is a secret agreement or cooperative effort for a fraudulent or deceitful purpose.

Mr. GLEASON. I did not look it up this morning.

Mr. GILES. I was so impressed with that word that I looked it up. You know, the ironic thing about this is no longer ago than the day before yesterday Mr. Johnson back there of Continental Grain was by and he as much as charged me with the same thing, as being in "cahoots" in the shipowners. He did not use the same word, he was far more polite. He said it in private. His words were, "Well, I just can't help but feel that you people here are going over the line and you are just too zealous-zealous about getting these American ships. I confess I had an interest in getting them but I also told him we were trying to administer the thing with due regard for the exporters interest and the shipowners'. That is what we are going to do, what we have tried to do, and will continue to do it.

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I do appreciate your being here. Do you have a further statement? Mr. GLEASON. I wish you would take a little interest in the seamen, too, besides the shipowners and Continental Grain Exports. I was hopeful by the time that statement was put in the paper that Bobby Baker would be involved in this grain situation. He is in everything else. I am very happy to have been here, Mr. Administrator. That is, for the privilege.

Mr. GILES. Thank you, Mr. Gleason.

We now have next, still in issue on the Continental waiver, two ships, Transbay and Transhartford, owned by Mr. Joseph Kahn. This is Hudson Waterways Corp. Someone has suggested to me that we should take a 5-minute break. I am amenable to that if that is the

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