INTERSTATE AND FOREIGN COMMERCE UNITED STATES SENATE EIGHTY-FOURTH CONGRESS SECOND SESSION ON S. 4020 A BILL TO AMEND CERTAIN PROVISIONS OF TITLE XI OF THE JULY 3, 1956 Printed for the use of the Committee on Interstate and Foreign Commerce Andrews, Graydon L., attorney, Audit Division, General Accounting Bernstein, Arnold, president, Arnold Bernstein Shipping Corporation, Hall, Paul, secretary-treasurer, Seafarers' International Union, Atlantic and Gulf District, Sheraton Park Hotel, Washington, etters and telegrams submitted by- Purdon, Alexander, executive director, Committee_of_ American Sanford, L. R., president, Shipbuilders' Council of America, 21 West 6 Shapiro, Alvin, vice president, American Merchant Marine Institute, Department of Commerce, dated July 18, 1956.. III 100 PERCENT INSURANCE ON SHIP MORTGAGES TUESDAY, JULY 3, 1956 UNITED STATES SENATE, COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, SUBCOMMITTEE ON MERCHANT MARINE AND FISHERIES, Washington, D. C. The subcommittee met at 11:40 a. m., in room G-16, United States Capitol, Senator Charles E. Potter, chairman of the subcommittee, presiding. Present: Senator Potter. Senator POTTER. The committee will be in order. The purpose of this bill is to amend certain provisions of title XI of the Merchant Marine Act of 1936, as amended, to facilitate the private financing of new merchant ship construction. Under existing law ship construction or reconstruction may be financed by direct Government loans, secured by first preferred ship mortgages, covering not more than 75 percent of the purchase price on vessels on which construction subsidy is allowed, and not more than 87% percent of vessels on which no construction subsidy is allowed. In addition, Public Law 781, 83d Congress, 2d session, amended the 1936 act to authorize the Government to insure the interest on and 90 percent of the unpaid principal of privately financed loans and mortgages on vessels, except that in the case of "special purpose" vessels the insurance may cover the interest and 100 percent of the unpaid principal. Under this law the requirements for cash downpayment of at least 25 percent of the construction or reconstruction cost of a vessel under construction subsidy, and at least 12%1⁄2 percent of the construction or reconstruction cost of other vessels of approved size and speed, are the same as provided in the case of construction loans made directly by the Government. This bill would amend the mortgage insurance provisions of the 1936 act so as to authorize 100 percent insurance of the interest and the unpaid principal of all ship loans and mortgages covering the construction and conversion of vessels needed in the American merchant marine to carry out the national maritime policey as declared in the Merchant Marine Act of 1936. Thus, the present limitation of 100 percent mortgage insurance applicable to so-called special purpose vessels would be removed and the authority would be extended to construction and reconstruction projects for all types of ships required in the national interest. Without objection, the bill, S. 4020, will appear in the record at this point. (S. 4020 follows:) NOTE. Staff member assigned to this hearing, Albert Luckey, Jr. |