The CHAIRMAN. All right, Mr. Tollefson. I was going to skip around and let someone else have a turn. Mr. TOLLEFSON. Mr. Gulick, this committee approved this bill last year, as I recall it. Mr. GULICK. Yes, sir. Mr. TOLLEFSON. I was reading your statement and trying to rack my memory. This case complied with the amendment that we had previously approved. In other words, there was a contract to convert, or rebuild, or whatever you want to call it, in existence before the deadline in the bill? Mr. GULICK. Yes, sir. Mr. TOLLEFSON. The deadline was September 21, 1962. Is that correct? Mr. GULICK. Yes, sir. Mr. TOLLEFSON. And you said yourself, and your records so indicate, that the contract for the conversion of the two vessels was in existence between the owner of the ship and the Spanish shipyard? Mr. GULICK. Yes, sir. Mr. TOLLEFSON. Now, then, that being the case, the owner of the ship had 1 year's time from the date of the enactment of the bill into law within which to complete that conversion? Mr. GULICK. That is correct, sir. Mr. TOLLEFSON. And the thing that held up the conversion, as I remember it, was a strike against the Spanish shipyard. Mr. GULICK. This is our understanding; yes, sir. Mr. TOLLEFSON. This is kind of the crux of the whole matter; isn't it? There wouldn't have been any question if the ship had been constructed or converted within the year's time from the date of the enactment of our amendment and the return to the U.S. port? Mr. GULICK. That is correct, sir. Mr. TOLLEFSON. But he couldn't do that because of the strike against the shipyard? Mr. GULICK. Yes, sir. Mr. TOLLEFSON. You granted an extension of time? Mr. GULICK. We have granted a series of extensions. The latest runs to August of this year. This, of course, is under the original contract between the owner and the Maritime Administration for the joining together of the two vessels, Buffalo and Syracuse, and their documentation under the U.S. flag. Mr. TOLLEFSON. The only reason for the necessity for this bill is the fact that they couldn't get the ship converted and back into our port by September 21, 1962? Mr. GULICK. That is right, sir. Of course, the whole purpose was to get it back in order to be able to participate in cargo preference carryings. Mr. TOLLEFSON. That is right. That is what your amendment had to deal with? Mr. GULICK. Yes, sir. Mr. TOLLEFSON. I have no other questions, Mr. Chairman. Mr. MAILLIARD. Do I still have the floor? The CHAIRMAN. Mr. Mailliard? Mr. MAILLIARD. There is one question that bothered me on the Spitfire case. You recall that there were three vessels involved orig inally and there were some rather more complicated questions, we felt, with regard to the other two ships, but the committee did approve the bill on this ship because it appeared to be clearer and that the contractual relationships were timely. On the others there was some doubt in the minds of some of us. The only provision with regard to the Spitfire that I still have a question on is this, and I am quoting from Mr. Alexander's letter of December 17, 1962, to the chairman of this committee. He says: On November 9, 1961, General Cargo Corp. filed with the Maritime Administration a copy of an assignment to it, dated August 16, 1961, of a contract between Progressive Steamship Corp., Inc., and a Spanish shipyard, dated August 2, 1961, for the conversion of the Esso Buffalo or substitute vessel. The only thing that is not quite clear in my mind is whether the Maritime Administration has satisfactory evidence that that assignment which was dated August 16, which was therefore timely, but which was not filed with the Maritime Administration until November 9, which as well past the date, was in fact a contract executed on August 16. Mr. GULICK. Our investigation, Mr. Mailliard, has led us to no reason to suspect the validity of this contract. As far as we are concerned we are satisfied that the contract assignment was executed on the date of August 16, 1961. Mr. MAILLIARD. With respect to some of the other transactions among these same people, there were contentions that contracts signed many months later were confirmations of oral agreements, and so forth, but as far as you are able to determine there is no such question with respect to this assignment of contract? Mr. GULICK. That is correct, sir. Mr. MAILLIARD. Thank you, Mr. Chairman. The CHAIRMAN. Mr. Casey? Mr. CASEY. He asked a question. My recollection was that they were supposed to check in. The CHAIRMAN. You did make the examination? Mr. GULICK. Yes, sir. We have studied all of the cases of these three vessels. The CHAIRMAN. But we are talking about this particular vessel in respect to Mr. Mailliard's question? Mr. GULICK. Yes, sir. Mr. CASEY. No questions, Mr. Chairman. The CHAIRMAN. Thank you very much. Mr. GULICK. Thank you, sir. The CHAIRMAN. The committee will go into executive session. (Whereupon, at 11:55 a.m., the subcommittee proceeded in executive session.) MISCELLANEOUS MERCHANT MARINE LEGISLATION "SPITFIRE" TUESDAY, JULY 9, 1963 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON MERCHANT MARINE OF THE Washington, D.C. The subcommittee met at 10 a.m., pursuant to notice, in room 219, Cannon House Office Building, Hon. Herbert C. Bonner (chairman of the subcommittee) presiding. The CHAIRMAN. The committee will come to order. This is a continuation of the hearing of June 27 on H.R. 2457. In the previous hearing on June 27, the Maritime Administration appeared before the committee and testified favorably on the bill. This morning we have Mr. Wang, president of American Bulk Carriers. Mr. Wang? STATEMENT OF SAMUEL H. WANG, PRESIDENT; ACCOMPANIED BY GERALD B. GREENWALD, COUNSEL, AMERICAN BULK CARRIERS, INC. The CHAIRMAN. Mr. Wang, you testified once before on this bill, did you not? Mr. WANG. Yes, Mr. Chairman. The CHAIRMAN. Do you have anything new to testify about here this morning? Mr. WANG. Except that the vessel is now ready and is expected to come here within the next couple of weeks. The CHAIRMAN. Go ahead. Mr. WANG. I Would like to read my statement, if I may. The CHAIRMAN. All right. Mr. WANG. Mr. Chairman, my name is Samuel H. Wang. I appear here on behalf of the General Cargo Corp., a New York corporation owned by American citizens. The SS Spitfire, which is the subject of H.R. 2457, is owned by this corporation. I respect fully urge this committee to give favorable consideration to H.R. 2457. This bill provides for an extension of the time limit of Public Law 87-266, in order that the vessel Spitfire may be redocumented in accordance with the provisions of that law. H.R. 2457 remedies an inequity and an innocently sustained hardship. It makes provision for those rights which would have been 27-498-64—— 12 available to the Spitfire under Public Law 87-266 had it not been for intervening circumstances beyond the control of the owners. The merits of this bill were recognized by the Maritime Administration which recommended favorable consideration of the bill at the committee's hearing on June 27, 1963, on the ground that the Spitfire— ** is an excellent vessel which we would like to have in operation under the American flag ***. It appears to us that the only reasonable solution, in the light of the merchant marine policy of the United States, is for Congress to enact the bill so as to permit the vessel to participate in preference cargo reserved for privately owned U.S.-flag vessels ***. H.R. 2457 is concerned only with that portion of Public Law 87-266 which requires that, when the owner has completed the conversion work abroad, the vessel be returned to the United States and redocumented in the United States on or before September 21, 1962, which was 1 year from the date of the enactment of the law. In reviewing the hearings and floor discussion in the 87th Congress on Public Law 87-266, it would appear that the time limit set forth in that law for redocumentation of qualified vessels to wit, 1 year from the date of enactment-was expressly so provided to prevent inequities and hardships to companies which, acting in good faith under the then existing law, were planning to convert vessels abroad. In the normal course of events, the 1-year time limit would have been sufficient in which to complete all unfinished or contracted work abroad. Either by inadvertence or oversight, no provision was made in Public Law 87-266 for the possibility of force majeure, unusual delay, or catastrophe, which, through no fault of the owners of such vessels then being converted, would prevent compliance within the time limit set forth in Public Law 87-266. It is this provision of the law with which H.R. 2457 is concerned and for which the relief for the Spitfire is respectfully requested. The facts and background concerning the Spitfire are as follows: The Spitfire is a 25,000-deadweight-ton bulk carrier. It is one of the largest and most modern bulk carriers in the entire U.S. merchant marine. It was reconstructed from two American-built tankers which were being consigned to a scrap heap in a foreign shipyard. On February 1, 1961, the Maritime Administration had consented to the sale of the two vessels, the Esso Buffalo and the Esso Syracuse to an Italian corporation for scrapping. Shortly thereafter the plan was conceived to make a single ship of these two tankers because most of the engine room of the Esso Syracuse had been removed but the hull was in excellent condition, whereas the engine of the Esso Buffalo was in very good condition but the hull was inferior. Plans were submitted to the American Bureau of Shipping, and on April 26, 1961, we received preliminary ABS approval for this project. The Italian corporation then applied to the Maritime Administration to sell these vessels (instead of scrapping them) to the General Cargo Corp., a New York company, which proposed to reconstruct from parts of the Esso Buffalo and the Esso Syracuse a 25,000-deadweight-ton bulk carrier for U.S.-flag documentation. The Maritime Administration approved of this proposal, and on August 25, 1961, it consented to the sale of the Esso Buffalo and the Esso Syracuse to the General Cargo Corp. On the same date, the General Cargo Corp. contracted with |