Page images

tracts wOHAPERO. What diffe from

Mr. DREWRY. Those contracts existed ?
Mr. SHAPIRO. Yes, sir.
Mr. DREWRY. And in timely fashion ?
Mr. SHAPIRO. Yes, sir.

Mr. DREWRY. But there was not a contract or you do not know of a contract that calls for carrying out the agreement that was made with the Maritime Administration, is that your point?

Mr. SHAPIRO. No contract with the Spanish yard; right.
Mr. DREWRY. To join the vessels ?
Mr. SHAPIRO. Yes; that is my point.

Mr. DREWRY. In what respect does the lack of presence of such a contract alter the equities and intent of the provisos in this bill to begin with? This bill we have before us would correct the change of decision from having two individual vessels and putting them together?

Mr. SHAPIRO. No, Mr. Drewry. I think the language of the bill before you would postpone that first arrival date.

I still think it is highly subject to question as to whether in fact the original proviso of the law [87–266] has been lived up to, that proviso which says that there must have been a contract prior to September 21, 1961, whether the vessel came back in time or not.

Mr. DREWRY. But they had a contract for each of the vessels ?
Mr. SHAPIRO. Different contracts.

Mr. Drewry. But I say from the standpoint of the spirit and intent of those provisios what difference does it make?

Mr. SHAPIRO. Well, for one thing, each of these individual contracts would have called for bringing back two vessels not one, if you are speaking about, what difference does it substantially make? It would have brought back two vessels rather than one and there is the very serious problem of are we talking about a contract existing. The Congress of the United States provided that that contract exists.

Mr. DREWRY. The Congress can change its mind and say "Here is a situation."

Mr. SHAPIRO. No, Mr. Drewry; in this bill before you, since what you are amending in this bill before you is the entire proviso rather than just the language that says date of arrival, I would concede that you are right, but in issue here, basically, regardless of how the bill is drafted, is the date of rearrival in the United States. It doesn't substantively get to the issue of did a contract exist or did a contract not exist. This is stepping into a fool's paradise for me, but I would suggest that supposing last year's bill were passed, for instance, that which provided for the December 31 arrival and the vessel arrived prior to December 31. They would have lived up to the law in respect to the arrival date. They would not have lived up to the law, as far as I know, in respect to did a contract exist.

Mr. DREWRY. There may not be any question about that at all as far as last year's law is concerned.

Mr. SHAPIRO. Then, Mr. Drewry, the question that you raise then is really one of forget about everything that was done. Forget about whether a contract exists, and this is what the bill provides. Forget about whether a contract exists, and I seriously must question whether Mrs. Sullivan really meant that in her bill but I will leave it to her to speak on that point. Everything to date here has been they lived up

to the law, they did this, and that, and all of these things, but the vessel was delayed in the Spanish yard. Now, this is not the point that I am raising

Mr. DREWRY. The whole issue in the provisos was the question of equity. Mr. SHAPIRO. In the provisos was a question of equity; yes, sir.

Mr. DREWRY. Do you question the fact that the owner did proceed to work out plans prior to the time of even the introduction of the basic bill? Mr. SHAPIRO. I concede that; yes, sir.

Mr. DREWRY. Then you do not question the fact that he went to the Maritime Administration prior, in plenty of time to come under the bill?

Mr. SHAPIRO. Right. I concede that.

Mr. DREWRY. And you concede it as to the individual contracts for the Esso Syracuse and the E880 Buffalo or substitutes therefor?

Mr. SHAPIRO. Yes, sir.

Mr. DREWRY. But you say that you question the time and you question the existence or timeliness at least of a contract for the vessel which ultimately came out ?

Mr. SHAPIRO. That is all we are talking about, the Spitfire, the vessel that came out.

Mr. DREWRY. This bill would correct that lack if there is such a lack but the equities are exactly the same, it seems to me.

Mr. SHAPIRO. Yes, but, Mr. Drewry, this bill does not intend to say, even if you didn't have a contract, the Spitfire can go in. Completely apart from the language in the drafting, this bill intends—and Mrs. Sullivan who introduced it can correct me—this bill says that he did everything completely appropriate including having a contract with the Spanish yard from which the vessel emerged, a contract from which the Spitfire emerged, but because of the strike he was delayed. Therefore, we are going to postpone that date of first arrival to the United States. This is what the bill intends doing but I am reasonably certain that this bill does not intend to say that, even if a contract didn't exist, this man is entitled to bring his vessel back because then I know lots of people who would want this privilege. I know people who would want this privilege today even if a contract didn't exist.

Mr. DREWRY. Are there other people who in timely fashion did part of what they were supposed to do and now are feeling deprived ?

Mr. SHAPIRO. Of the 33 applicants for this privilege, if you will, that is 33 vessels that were involved in presumably having contracts abroad but not being able to get them back within a year because the yard couldn't make delivery in a year, I believe 18 of them actually came back and fully lived up to the law. There are three in question and the rest simply canceled out. This is one of the ones that are in question.

Incidentally, this one which is in question is built from a contract covering another one that is in question which called for the Esso Syracuse or substitute. You have a contract for the Esso Syracuse. You have a contract for the Esso Buffalo, both of those presumably valid contracts with the yard. One emerges as the Spitfire combining those. There is still a vessel, the Montauk, I believe, that is still a vessel subject to question.

Mr. DREWRY. That gets complicated.
Mr. SHAPIRO. It certainly does, Mr. Drewry. It certainly does.

Mr. DREWRY. I am just struggling with whether or not there has been any lack of good faith.

Mr. SHAPIRO. No, I don't charge that, sir. I don't charge lack of good faith. Mr. DREWRY. The sole purpose was equity.

Now, the Maritime Administration is satisfied both as to the timeliness of the thing and as to the joining of the two vessels.

Mr. SHAPIRO. Mr. Drewry, I say the Maritime Administration is faultily satisfied. The Maritime Administration quotes their satisfaction in a contract with them. A contract with them is absolutely meaningless in terms of what this law was passed to do. It was a contract with the yard. It is a contract with the yard.

Mr. DREWRY. But you concede that they had the right to both vessels?

Mr. SHAPIRO. Pardon me?
Mr. DREWRY. You concede that the owner had the two vessels?
Mr. SHAPIRO. He had them, yes.

Mr. Drewry. The only missing link is the contract for the joining of the two.

Mr. SHAPIRO. That is right, exactly.

Mr. DREWRY. And Maritime, in timely fashion, not only approved but had them under contract and committed to deliver a joined vessel within a period of a year?

Mr. SHAPIRO. No, the Maritime Administration simply says, “The Maritime Administration acknowledges the intent * * *» listen to this language:

* m me acknowledges the intent of General Cargo Corp., to document, under U.S. laws, a dry cargo bulk carrier to be constructed from portions of the tankers E880 Buffalo and E880 Syracuse. In that connection, it is requested that General Cargo Corp. furnish the Maritime Administration with a certified copy of the executed contract with the shipyard for the construction of the new ship.

Nothing could be clearer than that.
The CHAIRMAN. That was last year's hearing?

Mr. SHAPIRO. It is this year's hearing. I am reading from Mr. Gulick's statement on June 27.

Then comes the reply:

This letter is based upon General Cargo Corp.'s August 25, 1961, contract with the Maritime Administration, and upon our opinion that this vessel is eligible to qualify under subdivision (1) of the proviso to section 901 (b).

Now, the August 25 contract with the Maritime Administration originates in the separate contracts of the Esso Buffalo and the Esso Syracuse and does not visualize a Spitfire at all. It is a jumboizing of two separate Panamanian tankers.

Mrs. SULLIVAN. That was recognized when he testified and when he agreed to that contract in August, because he mentions the single vessel. This corporation really had contracts, it was true, to build two ships and they did change in the middle of the stream and built one better ship than two.

Mr. SHAPIRO. I wouldn't say that.

Mrs. SULLIVAN. Whether or not a new contract was needed to be shown to the Maritime, I cannot answer. I am not a lawyer. I feel that the man did it in good faith. He merely changed his mind to build a different kind of a ship, using a part of two ships to make one large bulk cargo ship. Mr. SHAPIRO. Right.

Mrs. SULLIVAN. And it had been accepted by Maritime even when they knew that it was to be combined into one ship rather than two.

Mr. SHAPIRO. Right.

Mrs. SULLIVAN. And when I heard those facts I was satisfied that it was a legitimate proposal.

Mr. SHAPIRO. Oh, yes, yes.
Mrs. SULLIVAN. It was all started prior to the time.
Mrs. SULLIVAN. When this Public Law 87–266 was passed.
Mr. SHAPIRO. Exactly.

Mrs. SULLIVAN. So I cannot see that this is an argument against competition coming in as far as where ships are built-believe me, I want to see ships built in the United States. I have been on this committee 11 years and I fought for work to be done in our own U.S. shipyards.

Mr. SHAPIRO. Very diligently. Mrs. SULLIVAN. But I still think that in this particular case we have two sides of the picture, one proposing his own entry into the field, and the other proposing to eliminate a newcomer into the field.

Mr. SHAPIRO. This is not my position.
Mrs. SULLIVAN. Well, it sounds like it is.
Mr. SHAPIRO. I want to make that clear.
Mrs. SULLIVAN. You say he does not have a contract.
He showed the Administration that he had a contract.

On whether or not the combining of the two requires a new kind of contract, someone legally qualified must decide.

Mr. SHAPIRO. That is right, since the law is rather specific I would hope that this committee is firmly persuaded and sees evidence that such a contract does exist.

Mrs. SULLIVAN. Mr. Chairman, the only thing I can say is that if counsel wishes to question Mr. Wang on that particular point, all right, but I have no more questions.

Mr. DREWRY. I think the question having been raised, we ought to have Mr. Wang's explanation as background.

The CHAIRMAN. All right, Mr. Wang.

STATEMENT OF SAMUEL H. WANG, PRESIDENT; ACCOMPANIED BY GERALD B. GREENWALD, COUNSEL, AMERICAN BULK CARRIERS, INC.—Resumed Mr. Wang. Mr. Chairman, I am very happy to know that Mr. Shapiro, once he is satisfied, will withdraw his objection. I am perfectly willing to satisfy him or anybody else who wants to get the right answers.

On August 2, we have signed a contract for the conversion of the Esso Buffalo.

The CHAIRMAN. What year? August 2 of what year?
Mr. Wang. In 1961. We are talking all about 1961.

Two weeks later on August 16 we have amended the contract which is amendment No. 1, a copy of which has been furnished to the Mari. time Administration, as per page 4 of the Maritime report which says: “Copy of an assignment to it dated August 16, 1961."

In the amendment it shows distinctly the new length of the vessel. Instead of 521 feet between perpendiculars in the original length, the new length would be 603 feet because an additional section has been added. This has been given in time and the amendment No. 1 to the contract is dated August 16, 1961.

Besides that, I would like to give a little information and I am sure that the lawyers here will bear me out.

The CHAIRMAN. I am not talking about bearing you out.
Do you have a copy of that amended contract?

Mr. Wang. Mr. Chairman, I don't have it here but I can supply it to counsel within the next hour or so.

The CHAIRMAN. Furnish a certified copy of it.
Mr. WANG. Yes, sir.

I would like to add that the original vessel, the vessel that was the original vessel containing the engine, is the remaining vessel, the Esso Buffalo having had 60 percent of its existing hull with the engine is the remaining vessel and will so be recorded when it arrives back to the United States.

Mr. Coles, even though my adversary, will bear me out that when you jumboize the vessel even though you had a complete new midbody, even with a new bow, still the old remaining stern of the vessel with the engine is the remaining part and retains the old name of the vessel. Thus in this instance no matter what we did forward of the engine of the Esso Buffalo, it is still the original vessel and the original contract with the addendum of August 16 which has been given to the Maritime Administration applies.

Mr. DREWRY. So you could have brought back two lengthened vessels but you only chose to bring back one and you cannibalized one of them to help build the other one?

Mr. Wang. Mr. Drewry, in our application to Maritime Administration of June 1961, long before any legislation was enacted, we have stated to Captain Kriner at the Maritime Administration that the Syracuse engineroom has been pilfered and is no more recoverable.

However, the Esso Buffalo has a good engine and the hull of the Syracuse is of better quality than the Buffalo. Therefore, it lends itself to cut 65 percent off each of the vessels and join them together.

Incidentally, this is the first time an operation like that was made by civilian people.

Mr. DREWRY. What arrangements did you make with the shipyard in connection with the joining of the two?

Mr. Wang. The arrangement was made with an Italian shipyard to join them. The moment it was a new, a joined vessel, we then named it Spitfire. There was no name Spitfire before. We only then named it Spitfire when it was a new joined vessel.

Mr. DREWRY. Do you have the contract with the Italian shipyard ?
Mr. Wang. Oh, yes.
The CHAIRMAN. I thought it was a Spanish shipyard.
Mr. WANG. That was for the joining.

« PreviousContinue »