White House Press Release

312 IMMEDIATE RELEASE JULY 2, 1948 The President has received the following letter from the Secretary of Defense and the Chairman of the Maritime Commission: "July 1, 1948 The President The White House My dear Mr. President: In your letter of April 15, 1948, addressed to the Chairman of the Maritime Commission, and your memorandum of the same date addressed to the Secretary of Defense, you requested that immediate steps be taken to determine what additional merchant ship construction may be economically justified at this time as evidenced by a. willingness on the part of the shipping industry to participate in a program of such construction. The purpose of this letter is to serve as an interim report on the progress which has been made to date toward the accomplishment of this objective. In accordance with your request that the closest working relationship be established between the Maritime Commission and the National Military Establishment in order that such merchant ship construction as may be initiated may be properly integrated with the national security program, a liaison committee was organized, des- ignated as the Maritime Commission-Military and Industry Liaison Committee, which hereinafter will be referred to simply as "the NARA Committee". Initially the Committee found that there were reason- ably good prospects of undertaking a program of merchant ship construction in cooperation with industry consisting of the following: (a) eighteen (18) modern passenger and combination passenger-cargo vessels for purchase by eight (8) American shipowning companies under construction subsidy contracts (as well as, with one exception, operating subsidy contracts); (b) twenty (20) modern, high-speed tankers to be constructed by private owners with Government participation limited to the cost of the national defense feature of increased. speed; (c) two (2) passenger-trailer vessels designed for coast-wise operation to be constructed by an experienced West Coast operator with Government mortgage-credit assistance. This proposed program, requiring a total contract author- ization of approximately $400,000,000 with cash expenditures extending over a period of three years, was discussed with the House Committee on Appropriations in conjunction with the hearings on the Supplemental Independent Offices Appropriations Bill, 1949. The Bill as finally enacted by the Congress made available $94, 000,000 in contract authorization in fiscal year 1949 and extended the avail- ability of $84,000,000 for ship construction for fiscal year 1948 for a ninety (90) day period ending September 30, 1948. Thus there is presently available a total of $178,000,000 of contract authorization for new merchant ship construction. The prompt commitment of these funds would make it possible to initiate a substantial portion of the proposed program outlined above. In its exploratory discussions with members of the shipping industry, the Committee found an understandable reluctance on their part to enter into firm commitments for the construction and pur- chase of ships while there was pending before Congress legislation *in the form of H.J. Res. 412 and H.J. Res. 413, and their counter- parts in the Senate, S. 2649 and S. 2696, under the terms of which increased construction subsidy and other benefits would be extended to the industry through the medium of amendments to the Merchant Marine Act of 1936. This proposed legislation having failed of (OVER)