general desire. It is the general desire, so that we will break for 5 minutes only.

(Short recess.)

Mr. GILES. Mr. Kahn. We appreciate Mr. Kahn's being here. There are two vessels owned by his company, the Transbay, a T-2 tanker, and the Transhartford, a T-2 tanker, each of these, I believe, Mr. Kahn, with a tonnage of 16,000 deadweight.

Mr. KAHN. That is correct.

Mr. GILES. We would like to hear first from Mr. Kahn concerning his offer and his understanding as to why it was not accepted, and his comments as to his present position, and then we will hear from Continental representatives. Mr. Kahn.

STATEMENT OF JOSEPH KAHN, PRESIDENT, TRANSEASTERN

SHIPPING CORP.

Mr. KAHN. Yesterday we were trading three vessels with Continental. One of them was fixed, the Transerie. Incidentally, I might say that I received notice of this meeting at 8 o'clock last night. I don't have any of the records with me since I didn't visit my office, so I will ask for Continental or Mr. Goodman to correct my mistakes.

Be that as it may, we fixed the Transerie. The Transbay is presently in a shipyard in Galveston. In the case of the Transbay, we could not possibly give them the option of gulf or U.S. North of Hatteras, so that we excluded U.S. North of Hatteras on the Transbay. She is March 1-15, U.S. gulf ports only.

In the case of the Transorleans, she is coming out of the Mediterranean. Although initially we offered that ship with March 1-15 laydays, we have to correct our Telex to Continental and state that if U.S. North of Hatteras is declared, that the position of that ship north of Hatteras is the 23d.

I will ask Mr. Stovall or Mr. Klosky to say whether that is correct.
Mr. STOVALL. We fixed the Transorleans with you, Mr. Kahn..
Mr. KAHN. Did I make a mistake on the Orleans?

Mr. STOVALL. It is the Transhartford.

Mr. GILES. Do you have any comment?

Mr. KAHN. That is the story.

Mr. GILES. These two ships were offered gulf only?

Mr. KAHN. No. In the case of the Transbay, it is gulf only because she is in a U.S. gulf shipyard presently. In the case of the Transhartford, she is coming out of the Mediterranean. We have to change the laydays for that to be February 23 if U.S. north of Hatteras is declared. If it is U.S. gulf, then it is February 1-15.

I believe these are the facts.

Mr. GILES. All right, Mr. Stovall.

Mr. STOVALL. We chartered two of Mr. Kahn's boats; namely, the Transerie in March 1-15 position and the Transorleans in the February 14-29 position. The Transbay, which he offered, as he stated, was offered gulf only. He wasn't interested in giving the range option in March 1-15. We declined the vessel on the grounds of no USNH option.

Mr. GILES. That is the only point there; in other words, it was gulf only.

Mr. STOVALL. I believe so. I don't know of any other points. Otherwise the tender was in accordance with the terms. He said he could not give USNH option. Unless we could agree gulf only, he preferred other business.

The Transhartford was offered, as he stated. He advised she was ballasting from the Mediterranean and he would require split dates of February 23 and I believe March 5 on her. We said we regret, unless he could do a clean February 14-29 or March 1-15 position, we would have to decline her. So we declined the two and to my knowledge there was no protest of the declination. It did not fit into his position and did not fit into our position.

Mr. GILES. Now, Mr. Kahn, on what basis can I say that Continental should take your ship?

Mr. KAHN. Mr. Giles, I am not here to recommend any basis to you. I think that the offers and the declinations or the acceptances speak for themselves, and I just as soon leave that to you to make the decision on that.

Mr. GILES. On the Transbay, it is not possible for you to give the North Atlantic option?

Mr. KAHN. Yes; it is possible if I were to spend $20,000 going to the North Atlantic, but I would not do that and then accept a rate of $1.50 lower. I mean, I am in the gulf. It is impractical, Mr. Administrator, to move a ship that is in a shipyard, in a higher paying area, and then spend 6 days ballasting when you are in an area that normally pays a higher rate and, in addition to spending $20,000 for the ballast voyage, to receive a rate of $1.50 less or thereabouts. We would not, to answer your question specifically, we would not ballast the Transbay from U.S. gulf to U.S. north of Hatteras.

Mr. GILES. Captain, do you have any questions?

Mr. GOODMAN. Also, Mr. Kahn, because I am not clear on your offer, is it correct that the Transbay you have offered March 1-15? Mr. KAHN. Right.

Mr. GOODMAN. On the Transhartford, and I can't tell from your wire, you gave no laydays, just February 23. Then I am confused. Then you say gulf March 1-15. Am I interpreting this right? The Transhartford you offered firm gulf March 1-15, which is in accordance with the tender. What does this February 23 mean here?

Mr. KAHN. That means that if I were to fix this ship and if they were to nominate the ship to load in north of Hatteras, say Norfolk, I would tender on the 24th and not on the 1st of March, and expect to be accepted. I cannot wait 7 days awaiting for the laydays to

commence.

Mr. GOODMAN. Mr. Stovall, aren't you still short a very considerable amount of tonnage in the February 14-29 range?

Mr. STOVALL. Yes; we are.

Mr. GOODMAN. Either North Atlantic or gulf?

Mr. STOVALL. Yes; we are.

Mr. GOODMAN. What makes it so difficult to fit this ship in with this great amount of tonnage that you are short? Certainly you don't have it scheduled because you don't have it. There are 93,000 tons that are

open.

Mr. STOVALL. 93,0000 tons? Where do you get that?

Mr. GOODMAN. 93,000 tons, February 14-29; isn't that it?

Mr. STOVALL. Yes, but only 38,000 tons is open.

Mr. GOODMAN. Whatever it is, is it what the tender was?

Mr. STOVALL. Yes.

Mr. GOODMAN. You said you were still short. You were short 34,000?

Mr. STOVALL. Yes.

Mr. GOODMAN. What makes it so difficult to fit this ship in right in the middle of the period on this February 23?

Mr. STOVALL. Captain Goodman, I haven't stated it was so difficult. We have been requesting, in accordance with the tender terms and conditions, February 14-29. He said he could not fit those dates, that he would need February 23-March 5. So we would not know at this point which position the boat was going to be in.

Mr. GOODMAN. There is no way you could work that one out?

Mr. STOVALL. I didn't realize there was any contest on either of these boats. We have fixed two. I thought Mr. Kahn was pleased with those two and he realized that the other two didn't fit his position or our position.

Mr. GILES. While Mr. Kahn is here, he has made his offer, I understand from what he has said and the fact that he is here is that he would like to have a ruling that his offers are acceptable if on the facts we can do that.

Is that right?

Mr. KAHN. Mr. Administrator, as the normal rule of trade, when the other man says yes, you are fixed; we have made the offers and they are either acceptable or not. If they are not acceptable, I am not here to fight for them.

Mr. GILES. Let me ask you this: If I understand what you are saying, are you in a position, or would it meet the justice of the situation, for you to talk this out with Continental on a direct, private, ordinary business basis, and not put the issue before me?

Mr. KAHN. Mr. Giles, I didn't know I would be called to Washington to justify my offer, frankly. I didn't realize that. When I offered my ships to Continental, and when Continental accepted two ships and then rejected the other two vessels, I just assumed that either their program was completed for that period or they did not fit their dates. I didn't know. In one instance, or both instances, I am prepared to take the business. Our ships are the right size ships. One is in the gulf, one is on split dates. If they are acceptable, we will carry the grain.

Mr. GILES. All right. Let me ask you this, then: Do you want me to make a ruling on this in terms of passing on the waiver? In other words, the reason we informed you and notified you on this is that on the basis of our information in our files, we thought this was still in controversy; that is, you had made an offer, it was turned down, and on the basis of our record we felt that you should be given an opportunity, since I was going to have to apparently pass on it for purposes of the waiver, you and Mr. Stovall should be given an opportunity to fill us in. Now my question is, Are you asking that I make a decision on this?

Mr. KAHN. Yes, sir.
Mr. GILES. All right.

39-375-64- -16

Mr. STOVALL. I believe, I might state, that Mr. Kahn is probably as surprised as I am that there is a controversy on these two ships. It was in the normal course of trading.

Mr. GILES. All right. Mr. Kahn advised us yesterday by wire that he had offered the boats and they were not accepted.

Mr. STOVALL. We had many offers that came in and the owners realized immediately they were not workable.

Mr. GILES. He is here today. He says this is an issue. He would like to put this before us. So we have no choice but to do so. I am impressed with what Captain Goodman has indicated on these dates, Mr. Stovall, particularly the Transhartford; that is, the gulf and North Atlantic. On the basis of this offer, is that not acceptable, Mr. Stovall?

Mr. STOVALL. I can only state, Mr. Giles, that it is outside the tender terms and conditions as laid down, and with the split dates it does not satisfy either position. I don't know. Possibly

Mr. GOODMAN. Mr. Stovall, are you still short on the March 1-15 position?

Mr. STOVALL. Yes, we are.

Mr. GOODMAN. In other words, there is quite a bit of tonnage to be fit in someplace other than foreign tonnage.

Mr. STOVALL. Yes.

Mr. GOODMAN. Both positions of this ship are offered in either the February USNH or the gulf 1-15. There is still a deficiency of tonnage in American ships.

Mr. STOVALL. Yes. If the vessel comes in with either of those laydays in accordance with the terms, of course, we have

Mr. GILES. I am not sure I understand this February 21 date. Will you explain it?

Mr. STOVALL. The laydays which Mr. Kahn offered was February 23-March 5, which again does not fit into the February 14-29 position, nor does it fit into the March 1-15 position without imposing a hardship on him of waiting, which he, of course, as he stated before, was not willing to do. It leaves us hanging in the balance for a February 14-29 position in the event that the vessel should then lose some days coming across or if she was sent to the gulf she would then be February 29 in the gulf, which would put her out of the February 14-29 position. Mr. GILES. Do you have any further questions, Captain?

Mr. GOODMAN. No, just to confirm again that there is open tonnage in both of these two dates, the February 14-29 and the March 1-15. You still have a considerable amount of American tonnage open and not fixed; is that right?

Mr. STOVALL. That is correct.

Mr. GILES. It seems to me that you have overlapped there in both instances, both on your February period and March. I don't quite see, Mr. Stovall, how that literally differs from that precise language in the tender. I don't see how that could prejudice you.

Mr. STOVALL. If we book March 1-15 fully and this vessel comes in and falls in the March 1-15 position, there is no cargo for the vessel. In the event the vessel is fixed 14-27, then in view of his ETA he would come in at the latter part of the dates and it would mean that we would have cargo and grain on demurrage; consequently, we would not make our February 14-29 shipment days.

The schedules set forth in the shipping schedule and approved by the Maritime Administration are the shipping schedules and the laydays required.

Mr. GOODMAN. Mr. Stovall, it is now February 6. Your February 14 tender-correct me if I am wrong-was for 93,000 tons.

Mr. STOVALL. Our February 14 tender?

Mr. GOODMAN. The open dates, your February 14-29, your tonnage. How much of that do you have open at the present time?

Mr. STOVALL. 38,000 tons.

Mr. GOODMAN. It is now February 6. In laydays you start loading conceivably. How will you know when you can fix the ship or not? What are you going to do in this very position now?

Mr. STOVALL. We know right now, Captain Goodman, and, of course, these delays, first of all in the filing of the waivers and the delay in processing the waivers, has created a hardship because we will have to go out immediately and book tonnage, but we must book it in the position which suits the shipping schedule as has been established.

Mr. GOODMAN. You anticipate no difficulty in booking foreign tonnage starting, let us say, tonight or tomorrow, February 17, to meet this 14-29 date for 38,000 tons, but there is no way you can figure out to work Mr. Kahn's ship in that will be ready Febuary 23 to March 5?

Mr. STOVALL. I am saying that the February 14-29 balance of cargo with split dates, we have no way of knowing in which position to allocate this vessel or what shipping dates he is going to be able to make. Mr. GILES. Again, how soon will you be able to make that decision? Mr. STOVALL. I don't know, Mr. Giles, without discussing it with the grain people and the interior offices who handle the routing of the grains to the ports.

Mr. GILES. Within 5 days? Within the next 5 days?

Mr. STOVALL. I am not sure within the next 5 days, but I don't believe we could wait another 5 days-I don't know what position we will be in as far as trying to cover in the event the vessel wasn't fixed. I don't know whether Mr. Kahn wants to run the risk of the split dates or not, This, I think, is a decision he should make.

Mr. GILES. That is the basis of his offer. This is his responsibility. Mr. STOVALL. But the offer was declined, and he did not reoffer before 5 o'clock. He is as surprised as I am that there is a conflict.

Mr. GILES. Let us get this straight. The fact that the offer was declined, he did not reoffer, that does not settle the issue.

Mr. STOVALL. No, it was settled as far as I was concerned. He was no longer interested in the business.

Mr. GILES. Now we have it before us. We have to deal with it.

Mr. Kahn, can you suggest any point, such as a matter of days such as we discussed a while ago, in which you give, say, 5 days or whatever, giving something to Continental so that they will be protected here on this point?

Mr. STOVALL. Is it possible that Mr. Kahn would be able to work the boat in the March 1-15 position?

Mr. KAHN. If it is U.S. gulf.

Mr. Giles, just to further clarify, to make sure that you understand, we have a ship coming out of Gibraltar. When that ship hits Norfolk, she is there on the 23d. When that ship hits U.S. gulf, she is there