Annual Report of the FEDERAL MARITIME BOARD MARITIME ADMINISTRATION 1951 S UNITED STATES DEPARTMENT OF COMMERCE UNITED STATES DEPARTMENT OF COMMERCE CHARLES SAWYER Secretary Washington D C FEDERAL MARITIME BOARD EDWARD L COCHRANE Chairman ROBERT W WILLIAMS Vice Chairman ALBERT W GATOV A J WILLIAMS Secretaah MARITIME ADMINISTRATION EDWARD L COCHRANE 1laritime Administrator EART W CLARK Deputy Maritime Administrate Foi sale by the Sulxtimtendent of Documents US UQVCIllltlnt 1iinliog Olhec Washington 25 D O llnw 35 cvuts Pap rover Letters of Transmittal UNITED STATES DEPARTMENT OF COMMEROE MARITIME ADMINISTRATION Iiashdngton25 D C January 1 1952 To The Secretary of Commerce FRoM Chairman Federal 13aritime Board and Administrator Mari time Administration SUBJECT Annual Report forfiscal year 1951 1 am submitting herewith the report of the Federal Maritime Board and Maritime Administration for the fiscal year ending June 30 1951 This report covers the first full year of operation of these two agencies It has been it year which once more has demonstrated the importance of the merchant marine to the national economy and defense E L COCHRANE Chairman Federal Maritime Board and Maritime Administrator THE SECRETARY OF COMMERCE TFashington 25 D C To the Congress I have the honor to present the annual report of the Federal Mari time Board and Maritime Administration of the United States Depart ment of Commerce for the fiscal year ended June 30 1951 Secretary of Commerce iii Table of Contents INTRODUCTION 1age INTRODUCTION I The need for ships 1 The initial breakout 2 The National Shipping Authority 3 A start toward a modern fleet 4 Tankers for defense 6 Maritime strength for the free world fi Men to man the ships 7 Shoreside facilities 8 The basic task 9 Reorgan ization 9 Backlogs 10 Ship construction subsidies 10 Postwar operating subsidies 11 FISCAL YEAR ACTIVITIES NATIONAL SHIPPIN AUTHORITY 13 General agency activities 15 Charters 17 General agency vessels 18 Ship repair and maintenance 19 Reserve fleets 21 Development of fleet sites 21 Fleet service activities 21 Vessel preservation 22 Research and tests 22 Tanker cervices AIDS TO SFQPPINo 24 Calculation of construction subsidies 24 Construction differential subsidy aid 25 Calculation of operating subsidies 27 Operating differential subsidy rates for the years 1940 to 1951 28 Operating differential subsidy aid 28 Construction financing aid without subsidy and tradeins 32 Construction reserve funds 32 Federal Sllip Mortgage Lnuranee aid 33 Miscellaneous 33 STUDIES AND REPORTS Vessel data 35 Reports 35 Cargodata 37 Special studies 38 Labor data 38 Trade routes 38 page SHIPBUILDING 40 New construction 10 Material control 41 Conversions 42 Technical developments 42 Scientific equipment 44 Vessel trial and guarantee surveys 44 SHIP SA15 AND TRANSFERS 15 Merchant Ship Sales Act of 1946 as amended 45 Merchant Marine Acts of 1936 and 1920 45 Transfers to foreign ownership andor registry 46 Disapprovals 47 New construction 47 General Order 58 second revision 47 Mortgages to aliens 48 Charters to aliens 48 Violations 48 Surrender of marine documents 48 PLRSONNEI 49 Safety program 49 MARITIML LABOR RELATIONS 51 Seamen 51 Shipyard labor 53 MARITIME TRAINING 54 Cadet midshipmen 54 United States Maritime Service 55 Medical program 56 Seamen services 56 PROPERTY AND SUPPLY 57 Shipyards 57 Terminals 58 Warehouses 58 Port development 59 Miscellaneous 59 Inventories 60 industrial mobilization planning 60 Disposal of surplus property 61 Domestic freight traffic tit Material control W Purchasing 61 FINANCE 62 Internal audits and procedures staff 62 Accounting 62 Auditing 63 Insurance 64 Analysis of financial statements 66 Reserve funds of subsidized operators fib CLAIMS 68 LEGAL ACTIVITIES 70 Legislation 70 72 Contracts Litigation claims and renegotiation 75 Regulation 76 Admiralty and labor law 76 Vi LEGAL ACTIVITIESCOnttlnlerl 11aie 78 JustcomFpensation 78 Tortclaims REOHLATION OF CARRIERS 79 Conference and other agreements 79 Foreign froight rates 80 Terminals 80 Freight forwarders 80 Freight rates United States Territories and possessions 81 Dockets 81 HFARINGs BBFORF TRIAL FXAMINERS 82 Final decisions of the Board 82 Recommended decisions of hearing examiners 86 Pending proceedings 87 INTERNATIONALNIARIT @11 AFFIRF 90 FINANCIAL STATEMENTS liXHIRIP 1 Balance ShectJune 30 1951 93 FXHIBrr 2 Statement of Operations for the Year Ended June 30 1951 94 EXHIBIT 3 Statement of Equity of the united States Government for the Year Ended June 30 1951 95 Notes to Financial Statements 95 SCHEDULE 1 Land and Site Uecelopnneut Structure and Equipment June 30 1951 96 Smmu E 2 National Shipping Authority Statement of Operation of Vessels by General Agents From Inception to June 30 1951 97 APPENDIXES APPENDIX A Pmploynent of United States Flag Merchant Vessels on June 30 1951 98 B Merchant Fleets of tile World on June 30 1951 100 CDeliveries of New Alerchant VcsselsFiscal Year Ended June 30 1951 102 DBareboat Chartered Vessels by Months Fiscal Year 1951 104 E Vessels in Reserve Fleets by Morths Fiscal Year 1951 104 FStatus of Operating Subsidy Agreements on June 30 1951 105 GPending Applications for operating Differential Subsidies on June 30 1951 106 HOperating Subsidy and Recapture Accruals and Payments to the Government for First Recapture Periods Ending oil or Before December 31 1950 107 IVessels Delivered by Uuitecl States Shipyards July 1 1050 to June 30 1951 108 1Progress of Construction oil Vessels Under Maritime Administra tion Contracts on June 30 1951 109 KNew Ship Construction on June 301951 110 vii APFUNm Continued I 4latus Of Salcs Under NI erehaIIt S ip SDIes Ac of l6111 as an unde1 Pae On June 30 1951 IlI NIVessels Approved for Transfer to Alien tlcnerhip and or Hceit ry and rlag for Fiscal bear 1051 113 N Sl at utory Capital and Special lienvrve FDndh of Subsidized Operators on Jwne 30 1951 114 0Claims on Hand on June 30 1951 114 CHARTS INVENTORY OF ICFOItDPA CLAIL 115 CLAIMS PROCESSED 116 INVENTORY OF INSUR4NCE CLAIMS 117 CONSTRUCTION AUDPrS COMPLFTIin 118 GEINFRAI ACCOUNTINO OFFICE EXUEPTIONS WORELOAI 119 AQENTS ACCOUNTS To JIM LIQUIDATIM 120 1I6RIRSFAIENT VOUCHER 121 I F LINQUFNTACCOII NTSIt1CEIVARIECLFAREI 122 IELINQUI ACCOUNTS RECEIVABLE WORKLOAD 123 GENERAL ACCOUNTING OFFICE EXCIUITIONS CLEARED 121 ORGANIZATION OF MARP19ME ADpIiNISTRITIQN AND FEDERAL MARITIME BOARD 125 i Vlil Introduction Against a backdrop of hostilities in Korea a mobilization program at home and increased aid to free nations overseas the American merchant marine experienced a year of challenge and change daring 1951 Hardly had the Federal Nfaritime Board and the Maritime Admini stration been established on May 24 1950 within the Department of Commerce when Communist aggression flared to touch off the United Nations action in Korea almost overnight logistic requirements of supplying thousands of U fighting men imposed heavy demands and responsibilities on the merchant marine and upon the newly created Federal agencies which had succeeded the former United States Maritime Commission When the Federal Maritime Board and the Maritime Administra tion were established it appeared that the principal goals during their initial year would be a thoroughgoing reorganization for the more efficient administration of the laws affecting the merchant marine and the prompt reduction of a backlog of ark remaining from previous years both of prime importance to the Government and to the privately owned merchant marine Almost immediately there was superimposed upon this program a burden of utmost urgency and of great complexity when the North Korean Communists attacked across the thirty eighth parallel It became essential for the agencies first to reinforce the existing private merchant fleet and to gear the mobilization of the American merchant marine into the natiomd mobilization program But at the same time it was rrecessary to insure continued progress in thoso activities under the law aimed at the development and furtherance of a merchant marine adequate for the trade and defense of tine United States The need for ships Twice within a decade there arose the demand for additional numbers of merchant ships over aml above trine capacity of the privately owned commercial fleets to carry out the security policies of the Nation When the United Nations ordered armed intervention to halt Red aggression in Korea the United States merchant marine had reached what probably was its nearest approach to a stabilized level Of operation since VJ day Sufficient tonnage both Americant flag and foreign was available to lift commercial foreign aid and military cargoes lost of the lips flying the American flag were privately owned very few were on charter from the Government How the picture changed during fiscal 1951 can be shown by these figures On June 30 1950 at the start of file ftsctd year the active Americanflag seagoing Beet numbered 1145 vessels virtually Al in private ownership By June 30 1951 this figure had mounted to 1723 and by December 31 1951 the merchant fleets seagoing sUvngth was 2009 ships Tho increased tonnage without which it would have been impossible to meet supply commitments in Ilona and foreignaid commitments elsewhere came entirely front the National Defense Reserve Fleet of the Iaritine Administration Over all 18month period beginning with Korean hostilities 778 Governmentowned ships were withdrawn repaired refitted and put info service at file rate of more thaar 3 vessels every 2 days The initial breakout The first call for additional