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Senator METCALF. Nor would it be useful or appropriate. I mentioned that as I understand it the Federal Maritime Commission received a joint report with the Interstate Commerce Commission and you also have joint information with the Commerce Department. Is that correct?
MS. BENTLEY. Yes.
Senator METCALF. We have been trying to inquire as to the benefits. of standardizing some of these forms in the regulatory agencies so we can follow through the ownership of these regulated businesses having a central place where this information could be deposited and you seem to stepped a little bit in advance of the others in having joint reporting with other regulatory agencies. Have you found that useful?
MS. BENTLEY. Yes, very; and I think the industry is happy they don't have to fill out two sets of forms.
Senator METCALF. The industry has found it useful, too.
Senator METCALF. I would think that maybe some of the others who read these records might explore that avenue, too, as to whether or not joint reports wouldn't be appropriate. Many of the things that go into FCC, for instance, are reported in the Interstate Commerce Commission or your agency, or somewhere else.
I want to compliment you on taking immediate steps to carry out some of the suggestions that this committee made when we found out that we had an inadequate sort of reporting and disclosure of some of the information to the Congress and I believe the regulatory agencies, too, feel it is necessary to carry out the job.
I also want to compliment you on carrying through and following through on the matter of regulation of the Commission. I think that in some areas perhaps you should follow through a little more. MS. BENTLEY. I quite agree.
Senator METCALF. I can understand. There you are down there with R. J. Reynolds and you have volumes of hearings, and so forth, and you just feel that everybody knows just as much as you do about it.
Nevertheless your responses indicate that you are reluctant to go behind surface ownerships as Sealand and McLean. In addition it would appear that the failure of most companies to report on time should be questioned. These reports should be filed and the leniency demonstrated is not helpful to the industry.
So I thank you for coming and thank you for your patience. Thank you for bringing your staff with you today, Madam Chairman.
What proportion of U.S.-flag carrying shipping is regulated by the Federal Maritime Commission? I am told that we want to distinguish between the subsidized shipping that is regulated over in the Department of Commerce and the U.S. flag carrying. Would that be the nonsubsidized part of the shipping?
MS. BENTLEY. There are several segments of the maritime industry. and all of the domestic and, I shouldn't say all, but most of the domestic carriers are only under our jurisdiction. For instance going up to Alaska that does not involve our jurisdiction. It is under ICC jurisdiction. All of the freight rates that are involved in foreign
commerce by all American-flag carriers involving foreign commerce are subject to our jurisdiction.
All of those who have anything to do with the section 15, or any part of the Shipping Act of 1916, come under us, but there are certain segments that don't. I would like to supply the exact details for the record.
Senator METCALF. As I say, I am groping here, Madam Chairman, in an area in which I am not completely familiar. I think you know what I am after; the percentages; and you indicated that you can find out these various segments. If you will supply it for the record, we would appreciate it.
Ms. BENTLEY. Yes; in one way or the other, they probably all do, but it is just a little bit here, maybe, and a big bit here.
Senator METCALF. Give us those various percentages if you will and if you can.
[The information referred to and subsequently supplied follows:]
FEDERAL MARITIME COMMISSION,
Attention Ms. Jeanne McNaughton.
Chairman, Subcommittee of Budgeting, Management and Expenditures, Committee on Government Operations, U.S. Senate, Washington, D.C.
DEAR SENATOR METCALF: As agreed in my testimony before you on June 25, 1974, I am submitting this answer to your inquiry regarding the extent of Federal Maritime Commission regulation of U.S. flag shipping.
You asked, in sum, what percentage of U.S. flag shipping falls under the regulatory authority of this Commission. While it may seem rather simplistic, the answer to that question is merely this. One hundred per cent of U.S. flag common carrier service which is not engaged purely in interstate or intrastate commerce is under our regulation. Those common carriers involved solely in interstate or intrastate commerce do not fall within our regulatory authority. I sincerely hope that this information is adequate for your record. Should you require anything further we stand ready to assist your inquiries in whatever ways
(S) HELEN DELICH BENTLEY,
Senator METCALF. Thank you very much.
MS. BENTLEY. Thank you, sir, and thank you for pointing out our shortcomings. We will try to rectify those right away. Senator METCALF. Thank you for coming.
[The prepared statement of Ms. Bentley follows:]
PREPARED STATEMENT OF HELEN DELICH BENTLEY, CHAIRMAN, FEDERAL MARITIME COMMISSION
Mr. Chairman, I am accompanied this morning by John Ridlon of our Office of General Counsel; Leroy Fuller, Director of our Bureau of Certification and Licensing; and Andrew Weissler, Deputy Director, Bureau of Industry Economics. We are pleased to respond to your requests for comments regarding Federal Maritime Commission collection, tabulation, and dissemination of information showing corporate structure, stock ownership, debt holding, and related data pertinent to the shipping industry as subject to the jurisdiction of the Maritime Commission.
Information regarding corporate structure, ownership, and related data is gathered by FMC on an annual basis through the medium of two annual reports which are required to be submitted to this Commission. These reports represent joint reporting forms. One is used by the Interstate Commerce Commission, the Maritime Administration, and the Federal Maritime Commission, and is designated by us as FMC-64. It is required to be filed on an annual basis by common carriers by water (using self-propelled vessels) in offshore foreign commerce, coastwise and intercoastal commerce, and domestic offshore commerce. This form is designated form M by the ICC and form MA-172 by the Maritime Administration. Use of the joint form was intended to minimize the burden of financial reporting of affected parties. The second of these reports is a form used jointly by this Commission and the ICC. It must be filed on an annual basis by tug and barge carriers who operate in the offshore foreign commerce, coastwise and intercoastal commerce and domestic offshore commerce. This form is designated form FMC-63 by the Maritime Commission and form K-A by the ICC. Originally an Interstate Commerce Commission form, this report was adopted by the FMC in order to minimize the reporting burden on affected parties. Both reports require the submission of detailed financial information of the persons filing them. For purposes of this subcommittee's present interest, only certain pages of each report provide pertinent information.
Form FMC-63, filed by tug and barge carriers, contains relevant data on pages 1 through 6, 14 through 19, and 26 through 31. Since copies of this report form previously have been distributed to your staff, I shall only briefly outline the information requested on these pages. Page 1 provides details of the identity of the filing party such as full name; date and place of incorporation; if formed as a result of a merger, the identity of merged companies; name of an operating company having control of the filing party's property at close of the year, if any; and so on. Page 2 is reserved only for notes or remarks.
Page 3 is composed of two parts. Item 102 of page 2 provides for identification of corporate directors, their terms and shares actually or beneficially owned by them. Item 103 on this page covers identification of the principal officers of the corporations, receiver or trustee, their departments and shares of stock actually or beneficially owned by them.
Page 4 is also divided into two parts. Item 104A provides for the identification of corporations controlled by the reporting entity other than through title to securities and the extent of control, while item 104B details the same information regarding corporations indirectly controlled by the filing entity, the extent of such control, and any intermediaries through which indirect control is exercised.
The information sought on page 5 pertains to corporate control by others over the reporting entity. Details of any such control are sought relating to how such control was established; the extent of such control and whether it is direct or indirect; name of an intermediary, if any, through which control was established; and trust information, if applicable.
Page 6 solicits information regarding stock of the reporting entityits value, voting rights information, classes of stock involved, shares held by various persons, and the voting powers of such holdings.
Turning to page 14, item 217 on that page requests information relating to investments of the reporting entity in affiliated companies. This item carries over onto page 15 as well.
Item 218 on pages 16 and 17 requires submission of similar information regarding investments of the reporting entity in other than affiliated companies. Item 221 on pages 18 and 19 requires the submission of information relating to securities and certain intangibles owned or controlled by the reporting entity through nonreporting subsidiaries showing the issuing company in which the investment is made and the name of the subsidiary or subsidiaries of the reporting party involved.
Pages 26 through 31 pertain to debt and capital stock information. While the debt information gathered is extensive, the identity of the holder of such obligations is not provided in this form. The information regarding capital stock on pages 30 and 31 is financial data only and is self-explanatory.
The pages of report form FMC-64 pertinent to this inquiry are pages 2 through 6, pages 11 through 13, pages 17 through 19, pages 21 through 24, pages 26 and 27, pages 38 through 48, pages 50 and 51, and pages 72 through 75.
Pages 2 through 6 provide information parallel to that found on pages 1 through 6 of form FMC-63. Page 11 of FMC-64 provides for details of marketable securities held by the reporting entity categorized by carrier, number of units held, class of the security, and value. Page 12 provides information relating to notes receivable showing name of debtor, character of the asset involved, rate of interest, and so forth. Page 13 provides similar information limited to related companies.
Pages 17 and 19 request submission of data regarding special funds and deposits of the reporting entity. The data includes amounts, kind of fund or deposit, and names of trustees or depository.
The information sought on pages 21 and 22 relates to securities of related companies held by the reporting entity and corresponds precisely to that found in pages 14 and 15 of form FMC-63. The information found on page 24 of FMC-64 corresponds exactly to that found in FMC-63 at pages 18 and 19 regarding securities and certain intangibles owned or controlled by the reporting entity through nonreporting subsidiaries.
The information regarding other investments of the reporting entity sought on pages 26 and 27 of FMC-64 corresponds to that found on pages 16 and 17 of FMC-63.
Pages 38 through 48 of form FMC-64 relate to debt information applicable to the reporting entity. Page 38 concerns notes payable and details the creditor, character of liability, and so forth. This page corresponds to item 288 on page 25 of FMC-63. Page 39 details notes and accounts payable-related companies, and noncurrent payables-related companies. The greater portion of the remaining information through page 48 is financial and deals with long-term debt figures only.
Pages 50 and 51 of FMC-64 correspond to pages 30 and 31 of FMC63 regarding capital stock and capital stock changes during the year. Finally, pages 72 through 75 deal with assets held as security for receivables (pp. 72 and 73) and assets pledged as security and not available for general purposes (pp. 74 and 75).
This cursory outline sketches the extent of the corporate structure and ownership information which is submitted to the FMC on a regular basis. The members of my staff accompanying me this morning will be happy to answer specific questions you may have regarding these forms or to furnish such information as you may request for the record. In addition to the regular instructions for these forms, at the request of this committee, on March 4 and 5, 1974, special instructions regarding the providing of this corporate information were distributed to all affected persons. A copy of those instructions is included in ach package containing FMC forms 63 and 64. These instructions specifically require as follows:
Give names of the 30 principal voting stockholders at the date of the latest closing of the stock book or compilation of list of stockholders of the respondent (if within one year prior to the actual filing of this report). In responding to this request, it is important to keep in mind that the proprietary (legal) owner, whether it be an institution or an individual empowered to vote the stock, must be identified; that the stock must be reported in the name of the institution or individual (rather than in a street name); that various accounts controlled by a single such institution or individual must be aggregated for reporting purposes; and that a complete mailing address of each of the 30 top institutional and or individual stockholders must be included in this report. The requirements of these special instructions were applicable to reports due at the FMC by April 1, 1974. As of this time we have received 19 such reports. The information contained in these filings. may be inspected at our offices at 1100 L Street NW., Washington, D.C., or we would be happy to furnish this information upon request. We do wish to note here, however, that such filings are submitted to us in confidence. While we have no hesitation in furnishing these reports to this committee, we do wish to emphasize their confidential nature.
There remains one other area in which corporate ownership information is gathered by this Commission in furtherance of our regulatory duties. Both the Shipping Act, 1916, and the Commission's regulations prohibit a forwarder from being a shipper, a consignee, or a seller or purchaser of shipments to foreign countries, or from having any beneficial interest therein, nor may they directly or indirectly control or be controlled by such shipper or consignee or by any person having such a beneficial interest. In our procedure for licensing of independent ocean freight forwarders, the application which must be filed with our agency requires certification of certain facts showing the independence of the forwarder requesting license approval.
Some of this information relates to ownership of the forwarder. In certain instances these applications bring to our attention the possibility that a given forwarder may not, in fact, be independent. In such instances of questionable ownership or control of a forwarder, this Commission conducts thorough investigations to determine the true corporate ownership of the forwarder. This sort of investigation can and does produce detailed ownership information allowing our licensing proceedings to be conducted in the most enlightened manner possible. I would like to emphasize here, however, two particular concerns. First, you will note that these investigations are conducted in an ad hoc basis as conditions show the need. Second, it is noteworthy