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Turkey.

Yugoslavia_

Communications received by committee-

Dewey, Ralph B., president, Pacific American Steamship Association,
letter dated January 24, 1964, with attachments..
Giles, Robert E., Acting Maritime Administrator-

Letter dated February 4, 1964...

Telegram to Mr. J. Max Harrison, president, American Maritime
Association, dated January 22, 1964..

Harrison, Max, president, American Maritime Association, dated
January 22, 1964, to Robert Giles, Maritime Administrator____

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Dowd, Henry R., vice president, Marine Carriers Corp., on behalf of
Oceanic Petroleum Carriers, Inc.-

192, 198

Oberschall, Victor, Jr., executive vice president, Penn Shipping Co.,

Inc...

Shepard, Earl, vice president, Atlantic Coast, Seafarers International

Union..

Simpkins, Tal, AFL-CIO Maritime Committee.......

Spalding, Peter, executive vice president, Victory Carriers, Inc..
Stovall, L. C., assistant vice president, Continental Grain
Co...

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Communications submitted to the Administration-

Calhoon, Jesse M., president, Marine Engineers Beneficial Association,

telegram...

Giles, Robert E., Maritime Administrator, telegram to Paul Hall,
J. M. Calhoon, and Thomas Gleason, dated February 5, 1964..
Gleason, Thomas W., president, International Longshoremen's
Association, telegram

Hall, Paul, president, Seafarers International Union, telegram.........

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OCEAN TRANSPORTATION OF GRAIN TO RUSSIA

TUESDAY, JANUARY 28, 1964

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON MERCHANT MARINE OF THE

MERCHANT MARINE AND FISHERIES COMMITTEE,

Washington, D.C.

The subcommittee met at 10 a.m., pursuant to call, in room 219, Cannon House Office Building, Hon. Herbert C. Bonner (chairman of the subcommittee) presiding.

The CHAIRMAN. The subcommittee will come to order.

Let the record show that the committee has permission of the House to sit during general debate.

The purpose of this hearing this morning is to review the development and progress of the current program to sell large quantities of wheat and grain products to Russia and her satellites, with a requirement for shipment of the commodities in U.S. bottoms "when available."

The program was announced by President Kennedy in early October of last year, and it has been discussed extensively in the press since that time.

In identical letters to the Secretaries of State, Commerce, and Agriculture, on January 16, I expressed the view that we did not have a clear picture of the facts from the published accounts. Accordingly, I requested those agencies-directly involved in the program-to present testimony to this committee concerning the background and present status of the program, with particular regard to the ocean transportation aspects, and I hope this hearing will not be diverted to other phases of this program, but will stick consistently close to getting a fair share of the transportation for American-flag vessels.

The American merchant marine is a diverse industry. Tramps, liners, and tankers are all diversely interested among the management groups. Seagoing maritime labor is interested. Longshore maritime labor is interested. And we are interested in hearing all of their views.

I, or my committee staff, have received many inquiries as to just what "angle" the Chair had in mind when he scheduled these hearings.

There was no "angle"-there was no pressure to make this inquiry. These hearings were scheduled simply to find and record the facts in a major shipping program where the American merchant marine has been called upon to supply the major part of the necessary transport. It is our responsibility to review this program as it has developed to date to criticize it if criticism is justified-and to express our views in any constructive way that is warranted by the facts.

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When the program was first announced, as I recall, there was to be a hundred percent utilization of American-flag vessels. Of course I and others knew at that time that that was impossible, but it is the desire of this committee to see that at least 50 percent of this program is handled in American-flag vessels. The first witness this morning is Congressman Findley. Step right up here.

STATEMENT OF HON. PAUL FINDLEY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS

Mr. FINDLEY. Mr. Chairman, I have several copies of the statement if you would like to have it for reference.

The CHAIRMAN. Yes, sir. Mr. Findley, would you desire to make your statement first, or to hear these witnesses?

Mr. FINDLEY. I am at your pleasure, Mr. Chairman. It doesn't matter to me.

The CHAIRMAN. It is always the custom of this committee to hear Members of Congress first and we are glad for your interest in this subject. You may be the judge of that.

Mr. TOLLEFSON. Mr. Chairman, if I may, may I suggest that we hear from Representative Findley first, for the very simple reason the next witness is Mr. Giles and when we get him on the stand there may be many questions.

The CHAIRMAN. Go ahead.

Mr. FINDLEY. Mr. Chairman, I do commend you for holding this inquiry. I feel that Russian wheat sale does deserve your attention and public attention and it is not a normal commercial transaction by any stretch of the imagination. It is public business and the two Departments-Commerce and Agriculture are up to their necks in it, and so are the taxpayers.

By reference to just two transactions, as a result of our new policy on using U.S. vessels, the taxpayers have taken a loss amounting to $381,000. That is a result of a little known and actually unwritten policy of the U.S. Department of Agriculture in connection with Public Law 480 on shipments in U.S.-flag vessels. It was begun, I am sure, as a way to pressure certain U.S. vessels into hauling wheat to Russia, but as a result it has increased the direct cost to the U.S. taxpayers by that amount, $381,000, and it has also indirectly boosted tax costs at least $150,000 because of the adverse effect it has had on the cost of shipping U.S. Government oil products from the Persian Gulf area. These are not just pulled out of the air. I have verified these by direct reference to the shipping interests, and by verification with the Department of Agriculture, and with the Military Sea Transportation system, which has to do with the shipment of U.S. Government oil products from the Persian Gulf.

Under this policy the U.S. Department of Agriculture, cooperating with the Commerce Department, is disqualifying certain U.S. vessels from bidding on Public Law 480 shipments to friendly countries, like Pakistan, until the Russian wheat shipment problem is solved. That is the central and little known and I think vitally important fact that ought to be brought to light and considered.

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