B-136530, OCT. 14, 1959

B-136530, OCT. 14, 1959

TO THE SECRETARY OF AGRICULTURE:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 6, 1959, CONCERNING THE FINANCING OF OCEAN FREIGHT SHIPPED UNDER THE REQUIREMENTS OF THE CARGO PREFERENCE ACT, PUBLIC LAW 664, 83D CONGRESS (46 U.S.C. 1241), WHICH HAS BEEN THE SUBJECT OF OUR LETTERS TO YOU DATED SEPTEMBER 23, 1958, AND AUGUST 28, 1959.

WE CONCLUDED IN OUR OPINION OF AUGUST 28, 1959, FOR THE REASONS SET FORTH THEREIN, THAT UNDER THE STATUTE AT LEAST FIFTY PERCENT OF ALL CARGOES SUBJECT TO THE CARGO PREFERENCES ACT WHICH ARE TRANSPORTED IN DRY BULK CARRIERS MUST BE CARRIED IN AMERICAN-FLAG DRY BULK CARRIERS; THAT FOREIGN FLAG LINERS SHOULD NOT BE PERMITTED TO CARRY MORE OF SUCH CARGO THAN AMERICAN-FLAG LINERS, AND THAT AT LEAST FIFTY PERCENT OF ALL CARGOES TRANSPORTED IN TANKERS MUST BE CARRIED IN AMERICAN-FLAG TANKERS. WE ALSO POINTED OUT THAT SINCE THE PLAN PROPOSED BY YOUR DEPARTMENT APPEARED TO BE DIRECTED TOWARD THAT END, WE FOUND NO GROUND FOR OBJECTION THERETO, AND ADDED THAT ANY MODIFICATION OR FURTHER IMPLEMENTATION OF YOUR DEPARTMENT'S PLAN WHICH IN YOUR JUDGMENT IS ,NECESSARY AND PRACTICABLE" TO ASSURE THE STATED OBJECTIVE WOULD BE WITHIN YOUR ADMINISTRATIVE DISCRETION.

SUBSEQUENT TO THE ABOVE OPINION, HOWEVER, YOU RECEIVED A JOINT LETTER DATED SEPTEMBER 22, 1959, FROM THE CHAIRMEN OF THE SENATE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE AND HOUSE COMMITTEE ON MERCHANT MARINE AND FISHERIES, INCLOSING RESOLUTIONS DESIGNED TO "CLARIFY THE MEANING AND INTENT OF CONGRESS WITH RESPECT TO SUBSECTION (B) OF THE CARGO PREFERENCE ACT (P.L. 664-83D CONGRESS), AN OPINION OF THE GENERAL ACCOUNTING OFFICE DATED AUGUST 28, 1959, TO THE CONTRARY NOTWITHSTANDING.' THE CHAIRMEN ALSO EXPRESSED THE HOPE THAT YOUR DEPARTMENT WOULD BE GUIDED BY THESE RESOLUTIONS IN FUTURE PLACEMENT OF CARGOES UNDER THE PURVIEW OF SECTION 901 OF THE MERCHANT MARINE ACT, 1936--- AT LEAST UNTIL CONGRESS HAS HAD TIME TO STUDY AND ACT ON THE ISSUES INVOLVED. WE ALSO HAVE BEEN INFORMED BY THE CHAIRMAN OF THE HOUSE COMMITTEE THAT THE MATTER WILL BE GONE INTO FULLY WHEN THE CONGRESS RECONVENES NEXT JANUARY.

IN VIEW OF THE POSITION TAKEN BY THE SENATE AND HOUSE COMMITTEES WE WILL NOT INSIST UPON ADHERENCE TO OUR OPINION DATED AUGUST 28, 1959, UNTIL SUCH TIME AS THE CONGRESS HAS HAD AN OPPORTUNITY TO RECONSIDER THE PROVISIONS OF THE CARGO PREFERENCE ACT.