WATERMAN STEAMSHIP CORPORATION WEDNESDAY, DECEMBER 16, 1942 HOUSE OF REPRESENTATIVES, COMMITTEE ON THE MERCHANT MARINE AND FISHERIES, Washington, D. C. The committee met, pursuant to adjournment of yesterday, at 10:30 a. m., Hon. Schuyler O. Bland, chairman, presiding, for further consideration of House Document 840. The CHAIRMAN. All right, gentlemen, we will come to order. The next witness is Mr. Houlihan from the War Shipping Administration, to present the question of charter with this company. I may say in connection with that, while that will be brought out with reference to this particular hearing, in all probability that matter of charter hire is one that we are going to be compelled to investigate as to the entire field, and, of course, this will be brought in then. It would be my desire to go into it this morning only insofar as it affects the Waterman case, and if we do not go into it any further than its effect on the Waterman Company, it will be understood that if we can get the investigation authority in the next Congress, which we shall seek, that it is one of the first problems we will undertake. Whether we do or not, we will have to take it up, because we will have that section 902 (a) on forwarders. I hope I can mention it without getting into controversy, but I found over in the Senate that the sentiment of the Members over there, with reference to the shortness of time and the impossibility of doing anything in the limited time we have remaining in this Congress, was just as definite as it was in the House. Mr. CULKIN. That whole thing goes over to the next session? The CHAIRMAN. Yes, the whole thing goes over to the next session. First, the proposal came up as to whether we would have an amendment which the Senate considered to section 902. It is a bill as we passed it in the House, but one of the Senators was not entirely satisfied with that, so they found it was necessary to carry the whole bill over, and I am going to reintroduce the omnibus bill, which I think I shall reintroduce without the Senate amendments amending section 902 (a). Mr. CULKIN. I am in full accord with the chairman's attitude, and I just merely wish to make this observation, that I think the whole subject matter of an amendment to section 902 ought to be the subject of full committee hearings. The CHAIRMAN. Full committee hearings? Mr. CULKIN. Yes. I do not think the country will be satisfied with anything less than that. 47 The CHAIRMAN. Full committee hearings confined to that one problem; I agree with that. All right, Mr. Hayes. Mr. HAYES. Mr. Zincke. STATEMENT OF D. F. HOULIHAN, ASSISTANT DEPUTY ADMINISTRATOR OF FISCAL AFFAIRS, WAR SHIPPING ADMINISTRATION, WASHINGTON, D. C. Mr. ZINCKE. Your title, Mr. Houlihan? Mr. HOULIHAN. Assistant Deputy Administrator of Fiscal Affairs, War Shipping Administration." Mr. ZINCKE. And your full name? Mr. HOULIHAN. D. F. Houlihan. Mr. HAYES. How do you spell your last name? How do you spell Houlihan? Mr. HOULIHAN. H-o-u-l-i-h-a-n. Mr. ZINCKE. Now, Mr. Houlihan, you are familiar with the transaction whereby the War Shipping Administration chartered five vessels from the Waterman Steamship Corporation? Mr. HOULIHAN. Yes, sir. Mr. ZINCKE. The five being the Bayou Chico, City of Weatherford, George Peirce, Salaam, and Yapalaga? Mr. HOULIHAN. Yes, sir. Mr. ZINCKE. Will you briefly give the details of the charter arrangement? Mr. HOULIHAN. I presume you mean the amount of charter hire? Mr. ZINCKE. And briefly the terms of the charter. Mr. HOULIHAN. The charter itself, as far as terms were concerned, was on our usual standard form of requisition charter which we have used in the case of all the time-chartered fleet of American flag vessels. The CHAIRMAN. I wonder, for convenience, if that should not be incorporated in the record so that we would have it before us? Mr. HOULIHAN. Yes, sir. (The standard charter form referred to is as follows:) WAR SHIPPING ADMINISTRATION WASHINGTON GENERAL ORDER NO. 11 Whereas an unlimited national emergency was proclaimed by the President of the United States on May 27, 1941; Whereas, by Executive Order No. 9054, dated February 7, 1942, the President of the United States conferred upon the War Shipping Administration the functions, duties, and powers with respect to the provisions of section 902 of the Merchant Marine Act, 1936, as amended, to requisition or charter the use of any vessel or other watercraft owned by citizens of the United States or under construction within the United States, for any period during such emergency; Whereas vessels in addition to those otherwise available are and will be necessary for transportation of foreign commerce of the United States or of commodities essential to the national defense and to the prosecution of the war; and Whereas pursuant to the aforesaid proclamation and Executive order of the ''resident and the provisions of section 902 of the Merchant Marine Act, 1936, as amended, the Administrator, War Shipping Administration, has requisitioned and will from time to time requisition the use on a time-charter basis of vessels owned by citizens of the United States or under construction within the United States. Now, therefore, it is hereby ordered that: 1. Time charters entered into by the United States of America, acting by and through the Administrator, War Shipping Administration, for dry cargo vessels included in General Order No. 8, shall consist of two parts, designated respectively, Part I and Part II. 2. The form of Part I for dry cargo vessels requisitioned or chartered in lieu of requisition shall be as follows: the "Vessel"), with hull, machinery, and equipment in a thoroughly efficient state, as far as the exercise of due diligence can make her so, and UNITED STATES OF AMERICA, CHARTERER: Vessel's particulars as follows: Deadweight capacity for cargo, fresh water and stores about lbs.), including Permanent Bunkers for fuel Mean draft Classed Normal Summer Freeboard) Bale capacity in cubic feet, about.. Speed about tons (2,240 tons/barrels, ON. inches. knots fully laden under good weather conditions. Consumption best grade fuel per 24 hours about tons. tons/barrels. OWNER agrees to let and CHARTERER agrees to hire the VESSEL, from time of delivery for trading subject to the following terms: PART I A. PERIOD OF CHARTER: From the time of delivery to the time of expiration of the voyage current at the end of the emergency proclaimed by the President May 27, 1941: Provided, That after September 1, 1942, either party may sooner terminate this Charter (the Vessel to be redelivered as hereinafter provided) upon not less than 30 days' written or telegraphic notice. B. TRADING LIMITS: World wide. C. RATE: Option I.-A basic rate of $- per deadweight ton per month computed in accordance with the Charterer's General Order No. 8, together with any appropriate adjustments or premiums in accordance with such General Order, which full rate shall be subject to revision not more often than once in every 120 days as in paragraph D below provided; or Option II.—75 per centum of the full rate payable in accordance with Option I above and such further sum, if any, adjudicated to be necessary to make up just compensation for the use of the Vessel and the services required in connection therewith under the terms of this Charter, pursuant to the provisions of Section 902 of the Merchant Marine Act, 1936, as amended. D. RATE REVISION (Option I only): At any time after September 1, 1942, but not more often than once every 120 days, either party may request a redetermination of the rate of charter hire upon 30 days' written or telegraphic notice to the other. If a revised rate is determined and agreed upon within such 30-day period, it shall become effective as of the date specified in the determination and shall continue for the balance of the period of this Charter subject to further redetermination in accordance with the provisions of this paragraph. If a revised rate is not determined or agreed upon within such 30-day period, then the rate of hire in effect at the time of such notice shall apply only until noon (EWT) of the day after the end of such 30-day period, and charter hire for the balance of the period of this Charter shall be just compensation within the meaning of Section 902 of the Merchant Marine Act, 1936, as amended, and shall be established and paid as therein provided. In such latter event, the use of the Vessel, if not theretofore requisitioned, shall be deemed to have been requisitioned pursuant to Section 902 as of noon (EWT) of the day after the end of such 30day period. This paragraph shall not operate so as to terminate the period of or otherwise modify the provisions of this Charter, notwithstanding any such modifications, adjustments, or terminations of the charter hire provisions of this Charter by operation of this paragraph. E. WAR RISK INSURANCE VALUATION: Option I.-The sum of $. per deadweight ton computed in accordance with General Order No. 9 of the Charterer together with any premiums or adjustments, or any assumption of war risk, general average, collision, or salvage risks or liabilities as may be provided for in said General Order and which are applicable to the Vessel by the terms of said General Order; Provided, That if said General Order No. 9 does not set forth a formula for ascertaining such valuation, then Option II below shall apply; or Option II.-Just compensation to be determined in accordance with Section 902 of the Merchant Marine Act, 1936, as amended, for any loss or damage due to the operation of a risk assumed by the Charterer under the terms of this Charter to the extent the person entitled thereto is not reimbursed therefor through policies of insurance against such loss or damage. F. PORT OF DELIVERY: G. PORT OF REDELIVERY: Not less favorable to either party than the port of delivery, unless otherwise agreed. H. NOTICE OF REDELIVERY: I. UNIFORM TERMS: This Charter consists of this Part I and Part II, the Uniform Time Charter Terms and Conditions for Dry Cargo Vessels, published in the Federal Register of 1942. Unless in this Part I otherwise expressly provided, all of the provisions of said Part II shall be part of this Charter as though fully incorporated herein. J. SPECIAL PROVISIONS: 1. Unless the Owner otherwise indicates in the execution hereof, or unless the proviso in War Risk Insurance Valuation Option I applies to the Vessel which will be indicated if the sum in said Option I is written "$ none," Rate Option I and War Risk Insurance Valuation Option I shall apply and in such event, in consideration of the compensation provided and the other obligations assumed by the Charterer hereunder, the Owner accepts this Charter in full satisfaction of any and all claims he has or may have against the Charterer arising out of the requisition of the Vessel and accepts the compensation herein provided for as the compensation required by law. If the Owner in the execution hereof elects Rate Option I and War Risk Insurance Valuation Option II, then the Owner shall accept this Charter and such hire in full satisfaction of any and all claims he has or may have against the Charterer arising out of the requisition of the Vessel and as the compensation required by law except as to any loss or damage due to the operation of a risk assumed by the Charterer under the terms of this Charter to the extent the person entitled thereto is not reimbursed therefor through policies of insurance against such loss or damage. 2. IN WITNESS WHEREOF, the parties hereto have executed this Agreement in triplicate the day and year first above written, and the Owner has elected Rate Option and War Risk Insurance Valuation Option. I, Secretary of certify that I am the duly chosen, qualified, and acting a party to this Agreement, and, as such, I am the custodian of its official records and the minute books of its governing body; that who signed this Agreement on behalf of said corpora of said corporation, was then the duly qualified__ tion; that said officer affixed his manual signature to said Agreement in his official capacity as said officer for and on behalf of said corporation by authority and direction of its governing body duly made and taken; that said Agreement is within the scope of the corporate and lawful powers of this corporation. [CORPORATE SEAL] Secretary. 3. The uniform terms and conditions designated Part II applicable to all dry cargo vessels time chartered by the War Shipping Administration, which shall be incorporated by reference in and need not be attached to Part I of the Charter, shall be as follows: Form No. 101 Washiptime 5/16/42 WAR SHIPPING ADMINISTRATION UNIFORM TIME CHARTER TERMS AND CONDITIONS FOR DRY CARGO VESSELS PART II CLAUSE 1. The Vessel shall be placed at the disposal of the Charterer at the port of delivery at such safe ready dock, wharf, or place as the Charterer may direct. Any time lost by the Vessel awaiting the availability of such dock, wharf, or place shall count as time on hire. The Vessel on her delivery shall be ready to receive cargo with clean-swept holds and, as far as due diligence can make her so, tight, staunch, strong, and in every way fitted for service, having water ballast, winches, and power, sufficient to run all the winches at one and the same time and a Master and a full complement of officers and crew for a vessel of her tonnage, and due diligence shall be exercised by the Owner to maintain her in such state during the currency of this Charter. The Vessel shall be employed in carrying passengers (to the extent permitted by law and available accommodations) and lawful merchandise, including petroleum or its products in proper containers, in lawful trades between safe ports or places within the trading limits of this Charter, as the Charterer or its agents shall direct. CLAUSE 2. The whole reach and burthen of the Vessel's holds, decks, and usual places of loading (but not more than she can reasonably stow and carry), shall be at the Charterer's disposal, reserving only space proper and sufficient in the opinion of the Master for Vessel's officers and crew, Master's cabin, tackle, apparel, furniture, provisions, fresh water, stores, and fuel. CLAUSE 3. The Charterer shall (except as otherwise expressly provided herein) pay hire for the use of the Vessel at the rate provided in Part I per calendar month or pro rata for any portion thereof, beginning with the time of her delivery, and continuing until the time of her redelivery in like good order and condition, ordinary wear and tear excepted, to the Owner at the port of redelivery, unless the parties hereto otherwise agree, or if the Vessel shall be lost, until the time of her loss, if known, otherwise to the time last heard from; or in the case of a constructive total loss to the time of the casualty resulting in such constructive total loss, except that where two or more successive casualties contribute to such loss, the time of the casualty last occurring shall be the time when hire ceases. Redelivery shall not be made until completion of repairs of any damage arising from causes specified in Clause 4 (i), and full hire shall continue until completion of such repairs, except to the extent that loss of time is caused by failure of the Owner to exercise due diligence to have such repairs effected promptly and to prevent loss of time. The hired provided for in this Charter and all other monies accruing in any month in favor of the Owner shall be due and payable on the first day of each calendar month for the preceding month or portion thereof. Unless otherwise provided, the Charterer shall give the Owner written or telegraphic notice of the Vessel's expected date and port of redelivery as provided in Part I. Cash for any expenses which are for the Owner's account under this Charter may be advanced by the Charterer or its agents, and the Owner shall reimburse or secure the Charterer for such advances, or, at the Charterer's election, the |