ATTACHMENT No. 4 Berth line bookings of grain to Hungary via Hamburg and/or Gdynia, December 1963 to January 1964 NOTICE TO EXPORTERS AND AMERICAN SHIPOWNERS ON SHIPMENT OF WHEAT AND WHEAT FLOUR TO SOVIET BLOC COUNTRIES Current Export Bulletin No. 883 issued by the Office of Export Control, Department of Commerce, on November 13, 1963, requires that at least 50 percent of the wheat and wheat flour to subgroup A countries will be exported on U.S.-flag carriers and that if such carriers are not available at reasonable rates, the exporters must obtain prior authorization from the Maritime Administration to ship less than 50 percent on U.S.-flag carriers. Any application by an exporter to the Maritime Administration for waiver of the foregoing requirement must be accompanied by a certification that solicitation of all owners and/or operators in all segments of the American steamship trade for necessary shipping space has been made, including posting at the New York Maritime Exchange, 80 Broad Street, New York, N.Y., for the required U.S.-flag shipping. Application may be made at any time subsequent to the date of prompt solicitation after a sales contract has been signed and after allowing 5 days for response thereto. The results of such solicitation must be clearly and fully itemized, including the dates of all tenders, shipping dates, rates, terms and conditions, loading and discharge ports, cargo tonnage offered, and full response to such tenders. Exporters are advised that waivers will not be considered unless U.S.-flag ships have been given a reasonable period to meet the shipping schedules, and in any event the shipping schedules (laydays) for U.S.flag ships shall extend over the same period applicable for other shipping but should be not less than 30 calendar days after the date of solicitation unless compelling circumstances require a shorter period. Upon receipt of an application for a waiver of the U.S.-flag shipping require ment, the Maritime Administration will promptly issue a public notice including posting of a notice at the New York Maritime Exchange, 80 Broad Street, New York, N.Y., giving full details of the waiver application, stating that a request for waiver has been received and unless evidence within 5 days from date of such notice is received showing that U.S.-flag shipping is offered, capable of meeting the reasonable shipping schedules of the exporters at applicable guideline rates, the waiver will be granted. Exporters and American shipowners are advised that on these commercial transactions the supplemental guideline rates for wheat in bulk published by the Maritime Administration, Department of Commerce, in the Federal Register issue of November 16, 1963, and any other supplemental guideline rates published for other port areas applicable to ships of 15,600 to 30,000 TDWT will govern. If wheat flour in bags is to be shipped under Current Export Bulletin No. 883, supplemental guidline rates will be published. JANUARY 7, 1964. ATTACHMENT No. 6 [From the Baltimore Sun, Nov. 9, 1963] SOVIET DEALS LIKELY AFTER HUNGARY OK NEGOTIATORS AGREE ON DIRECT RUSSIAN-TRADER TALKS (By Philip Potter, Washington Bureau of the Sun) WASHINGTON, November 8.-The Commerce Department announced tonight the granting of an export license for the sale of 100,000 tons of wheat to Hungary and indicated wheat transactions with Russia soon would follow. Negotiators for the United States and the Soviet Union apparently paved the way for such sales to the Soviet bloc when they reached an agreement today under which the Communist states will deal directly with American grain traders operating under "guidelines" established by the Commerce Department as to how much of the grain must go in American-flag vessels. 50 PERCENT SHIPPING FORMULA The Department announced a formula providing that 50 percent of the wheat must go in American ships if they are "available." The U.S. shipping industry, it was announced, has agreed to lower by 20 percent rates hitherto charged for carrying surplus wheat sold or given away by the U.S. Government under Public Law 480. This, Franklin D. Roosevelt, Jr., Under Secretary of Commerce, said, will bring American rates in close proximity to those charged by other maritime nations, whose rates are rising. In consequence, it is believed, the Russians may close deals for wheat within a day or two. Their negotiators first had sought a government-to-government deal, but this was rejected, as was their next suggestion that a private organization be set up here to deal with them as an entity. U.S. negotiators said the antitrust laws forbade this. The Soviet-bloc nations are said to want 4 million tons, of which 2,500,000 would go to the Soviet Union. The approximate value would be $250 million. The Hungarian deal now consummated is said to involve $7,600,000. BLACK SEA COAST DELIVERY All sales are to be made on "C and F" basis, officials said, with American dealers quoting prices based on the price of the wheat plus customs and freight costs to delivery points on Russia's Black Sea coast. Dean Rusk, Secretary of State, only this morning had told a news conference that he agreed with Soviet Premier Khrushchev, who announced yesterday in Moscow that "some progress" was being made in the wheat negotiations. A few hours later, Llewellyn E. Thompson, State Department adviser on Soviet affairs, disclosed an "understanding" between American negotiators headed by George W. Ball, Under Secretary of State, and a Soviet team headed by Sergei Borisov. PRESIDENTIAL POSITION State Department officials represented the Russians as accepting the idea of a "mix" of American and prevailing world shipping rates, but said that whether deals were consummated still depended on the price. Russia was said to want the wheat, but as grain reserves and would draw on them rather than pay much more than the current world price for wheat plus freight at world rates. The President had declared a policy of giving preference to American shipping when "available," leaving it to the Commerce Department to define "availability" after consultation with the Maritime Commission and a survey of the world shipping scene. 25 PERCENT OF DEAL LIMIT The American grain dealers, no one of whom will be allowed to transact more than a fourth of the trade with the Soviet Union, must ge export licenses from the Commerce Department. Thus, they will be bound by its "guidelines" as to shipping. The delegation headed by Borisov was informed today what these will be. His delegation now is returning to Moscow, leaving transactions to be worked out by a Soviet wheat purchasing commission. One State Department official, apparently more bearish than Roosevelt, said it still was "anybody's guess" whether deals would be consummated. He said it still was not known here what the Russians would consider a reasonable "C and F"' price. American officials likened any forthcoming transactions to "cold commercial" deals. Rusk told his news conference that as far as the United States is concerned "this is not a gesture of philanthropy," but a question of whether its self-interest is served by exchanging wheat for convertible currency or gold. ON UNIFORM ALLIED POLICY He was asked whether the United States and its allies were making progress toward working out uniform credit policies applicable to the Soviet Union. He replied in the negative, saying there would be further discussions of such matters by the Organization of Economic Coordination and Development and NATO. Turning to other matters, Rusk told his news conference that Soviet harassment of allied convoys on the autobahn to West Berlin was "very serious," since access to that city by the West was "utterly fundamental." GRAVE IMPLICATIONS He said he was unable to "understand" the three recent incidents involving American vehicles since they seem to "cut across and interrupt" what the Russians have been saying about peaceful coexistence and are not in keeping with efforts to find new points of East-West agreement after the signing of the nuclear test ban treaty. Rusk said that, although such incidents might look like an "elaborate minuet" about procedures, they had grave implications. If the West conceded the Soviet right to compel the lowering of tailgates on allied vehicles, or accepted other procedures dictated by them, he said, the Russians * [From the Baltimore Sun, Nov. 11, 1963] CASEY HAILS U.S. POSITION PRAISES "FIRM, FAIR WAY" WHEAT DEAL IS HANDLED NEW YORK, November 10 (Special).-The administration's position regarding the use of American-flag ships in the transportation of any wheat sold to Russia was praised today by a spokesman for a large segment of the American maritime industry. But, at the same time, Ralph E. Casey, president of the American Merchant Marine Institute, lashed out at foreign maritime nations because of their protests concerning any governmental preference for American-flag ships in moving such grain. ROOSEVELT PRAISED Casey's statement praised Franklin D. Roosevelt, Jr., Under Secretary of Commerce, for "the firm and fair way in which the problem has been handled." On Friday, Roosevelt said that at least 50 percent of any wheat going to Russia would move on American-flag bottoms. It also was revealed Friday that transactions involving the sale of about 2,500,000 tons of wheat to Russia would soon be made. Negotiators for the United States and the Soviet Union agreed Friday that the Communists would deal directly with American grain dealers, who will be acting under "guidelines" set up by the Commerce Department. STUMBLING BLOCK When he announced Government approval of the wheat sale, President Kennedy said that American-flag ships would be given preference. Since then higher rates on American vessels have been a stumbling block in negotiations. Guidelines announced Friday by the Commerce Department are $18 per ton from gulf ports to Odessa and $16 to Leningrad. Casey noted that throughout negotiations for the wheat transaction, the maritime industry has insisted that freight rates "for these shipments had to be compensatory for American-flag vessels, reasonably taking into account their higher operating costs." He declared that "the Soviets have found not only sympathy but active support in their resistance to the use of American ships from many sources outside the Soviet Union." He said that it has been reported that 11 maritime nations registered protests with the State Department about the preferential treatment for American ships. "This foreign protest is, of course, nothing new. But at this juncture, our friendly allies in Western Europe, and elsewhere, have become more brash in their statements concerning American shipping than ever before," Casey said. "In fact, the further we get from World War II, when American shipping saved the free world from axis domination, the more forgetful these friends become of the essential part that American shipping has played, and will continue to play, in world conflict. "In brief, they apparently feel that an American merchant fleet should not exist, regardless of U.S. national interest." Casey also criticized the American press for having, "unwittingly aided the Soviets in the current negotiations with stories and editorials which have tended to malign American shipping as exerting almost a subversive influence on the wheat transaction." [From the New York Times, Nov. 11, 1963] SHIP GROUPS BACK GRAIN-SALE RULES SEE UNITED STATES PROTECTING INTEREST OF THE MERCHANT MARINE The U.S. shipping industry generally approves of the guidelines established by the Government for the sale of wheat and other grains to the Soviet Union and Soviet satellites. Two shipping trade associations announced over the weekend that they ap proved the ground rules, which set up an average rate of $18 a ton for shipment to Black Sea ports and stipulated that half of the 150 million bushels of wheat to be sold to the Russians would move in American vessels. Ralph E. Casey, president of the American Merchant Marine Institute, said the industry felt that the Government had shown gratifying concern for the welfare of the merchant marine. The Committee of American Steamship Lines issued a statement approving the handling of the transaction and the surveillance over the rights of the merchant marine. Shipping men noted that the grain was being sold to the Communist nations at less than market prices and hence was in the nature of an aid cargo. Federal law stipulates that cargo financed by the United States must be moved up to 50 percent on American ships. Critics of the industry, however, held that the wheat deal was strictly a commercial transaction and that this was a term applied to it by President Kennedy when he announced approval of the sales last month. Mr. Casey participated with other industry representatives in talks on the wheat deal with Under Secretary of Commerce Franklin D. Roosevelt, Jr., Under Secretary of State George W. Ball, and others. In all the meetings the industry took the position that transport of the grain had to be at compensatory rates. Foreign-flag rates for bulk cargoes run considerably lower than those on U.S. ships. On so-called berth-line ships, which carry general cargo, American rates and foreign rates are usually identical. This is possible because general or package cargo carriers usually operate under Government subsidy. Mr. Casey said Soviet resistance to the higher bulk rates of American trampship operators had found support in sources outside the United States. He said foreign maritime nations had protested the American plan to the State Department. They wanted the grain shipped under conditions that would have permitted them to carry all the wheat, Mr. Casey said. "Even parts of the American press," he said, "have unwittingly aided the Soviets in the current negotiations with stories and editorials which have tended to malign American shipping as exerting almost a subversive influence on the wheat transaction." ATTACHMENT No. 7 U.S. DEPARTMENT OF COMMERCE, MARITIME ADMINISTRATION, Washington, D.C., December 11, 1963. (This letter was sent to all shipowners or managing agents of vessels engaged in the grain trade. In addition it was sent to AMA, AMMI, PASSA, CASL, and Association of Ship Brokers & Agents and via the Department of Agriculture to grain exporters.) GENTLEMEN: Attached hereto is a proposed draft of "Notice to Exporters and American Shipowners on Shipment of Wheat and Wheat Flour to Soviet Bloc Countries." The Maritime Administration, Department of Commerce, would appreciate your comments or suggestions, if any, relative to procedures involved in this notice prior to its publication. There is an immediate need for a thorough understanding by all concerned of the procedures so outlined, and it will be appreciated if your comments or suggestions are submitted as early as possible, but not later than December 17, 1963. DEAR MR. ADMINISTRATOR: Many thanks for sending me the draft of "Notice to Exporters and American Shipowners on Shipment of Wheat and Wheat Flour to Soviet Bloc Countries" which you plan to publish soon in the Federal Register. I have not canvassed every member of my organization but, on my own responsibility, will indicate to you that the notification plan therein by which American operators are given 30 days' advance notice of "bloc" country shipments seems quite satisfactory. Your department's extreme caution in insuring maximum participation by U.S.-flag vessels is greatly appreciated. This has been a difficult matter for your department and we commend you and your staff for finding a fair and equitable solution. Very truly yours, ATTACHMENT No. 9 RALPH B. DEWEY. U.S. DEPARTMENT OF COMMERCE, CONTINENTAL GRAIN REQUESTS WAIVER ON USE OF U.S. SHIPS FOR 281,000 TONS OF GRAIN Continental Grain Co. has asked the Maritime Administration of the U.S. Department of Commerce for a waiver permitting shipment of less than 50 percent of its order of grain to Russia on U.S.-flag ships. The waiver requested is in the amount of 281,000 long tons. Continental Grain Co. has informed the Maritime Administration that it has fixed charters for shipment of 213,000 long tons of grain on U.S.-flag vessels but they have been unable to contract for U.S.-flag shipment of the 281,000 long |