B-156080, MAY 11, 1965

B-156080, MAY 11, 1965

TO NORTH AMERICAN MANUFACTURERS EXPORT ASSOCIATES, INCORPORATED:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 27, 1965, CONCERNING THE ACTION TAKEN BY UNITED STATES MARITIME COMMISSION AND DEPARTMENT OF STATE OFFICIALS IN CONNECTION WITH YOUR ATTEMPTS IN MAY AND JUNE 1947 TO PURCHASE THREE SURPLUS SHIPS, ACONCAGUA, COPIAPO, AND IMPERIAL, FROM THE UNITED STATES MARITIME COMMISSION.

IT APPEARS THAT ON MARCH 28, 1947, THE MARITIME COMMISSION ISSUED INVITATION FOR BIDS NO. PD-X-337, OFFERING FOR SALE THE THREE VESSELS MENTIONED ABOVE. THE INVITATION PROVIDED THAT BIDDING WAS LIMITED TO CITIZENS OF THE UNITED STATES AS DEFINED IN SECTION 2 OF THE SHIPPING ACT, 1916, AS AMENDED, AND THAT THE BUYER WAS PROHIBITED FROM RESELLING ANY OF THE VESSELS PURCHASED (EXCEPT FOR SCRAPPING PURPOSES) AND FROM OPERATING THE VESSELS, EXCEPT UNDER UNITED STATES DOCUMENTATION. ALSO PARAGRAPH 6 OF THE TERMS AND CONDITIONS OF THE SALE SPECIFICALLY PROVIDED THAT THE COMMISSION RESERVED THE RIGHT TO REJECT ANY OR ALL BIDS.

THE BIDS RECEIVED WERE PUBLICLY OPENED ON MAY 1, 1947. NORTH AMERICAN MANUFACTURERS EXPORT ASSOCIATES, INCORPORATED, SUBMITTED A BID FOR THE VESSELS INDIVIDUALLY IN THE AMOUNT OF $276,000 EACH FOR THE ACONCAGUA AND COPIAPO AND $273,000 FOR THE IMPERIAL. ALSO, INCLUDED ON THE FACE OF THE OFFER WAS AN ALTERNATE BID FOR ALL THREE OF THE VESSELS WITH THE STATEMENT: "IF THE COMMISSION WILL PERMIT THE TRANSFER OF ANY TWO OF THESE VESSELS TO FOREIGN REGISTRY, WE WILL INCREASE THIS BID TO A TOTAL SUM OF $1,425,000.' IN A LETTER OF MAY 1, 1947, ACCOMPANYING THE BID, IT WAS STATED: "SHOULD TRANSFER BE AUTHORIZED BY THE COMMISSION, THE VESSELS WILL BE TRANSFERRED TO THE TURKISH STATE RAILWAYS, SEAWAYS, AND HARBORS ADMINISTRATION, UNDER THE FLAG OF THE TURKISH REPUBLIC.' TWO OTHER BIDS WERE RECEIVED, ONE ON THE COPIAPO INDIVIDUALLY FOR $16,688.60 AND THE OTHER ON THE IMPERIAL INDIVIDUALLY FOR $3,050.

SUBSEQUENTLY IT WAS DETERMINED THAT ALL BIDS SHOULD BE REJECTED AND ALL BIDDERS WERE NOTIFIED BY LETTER OF JULY 3, 1947, THAT THEIR BIDS HAD BEEN REJECTED. THEREAFTER, THE SECRETARY OF STATE, UNDER SECTION 1 OF EXECUTIVE ORDER 9857 (12 F.R. 331) OF MAY 22, 1947, PURSUANT TO PUBLIC LAW 75, 80TH CONGRESS (AN ACT TO PROVIDE FOR ASSISTANCE TO GREECE AND TURKEY), AUTHORIZED AND REQUESTED THE MARITIME COMMISSION TO NEGOTIATE TERMS, PRICES, AND CONDITIONS FOR THE SALE OF CERTAIN VESSELS, INCLUDING THE VESSELS ACONCAGUA, COPIAPO, AND IMPERIAL, WITH THE PURCHASING DELEGATION OF THE TURKISH REPUBLIC. PURSUANT THERETO A CONTRACT WAS SIGNED ON AUGUST 19, 1947, BY THE MARITIME COMMISSION AND THE PURCHASING DELEGATION FOR THE REPUBLIC OF TURKEY, FOR THE SALE OF CERTAIN VESSELS, INCLUDING THE THREE HERE INVOLVED. THE PRICE FOR THE THREE VESSELS HERE INVOLVED WAS $483,333.33 EACH, A TOTAL PRICE OF $1,450,000. ALSO THE TERMS OF THE SALE REQUIRED THAT THE VESSELS BE RECONDITIONED IN AMERICAN SHIPYARDS, AND THAT THE VESSELS WOULD BE SUBJECT TO REQUISITION BY THE UNITED STATES GOVERNMENT IN THE EVENT OF A NATIONAL EMERGENCY.

YOUR PRINCIPAL CONTENTION SEEMS TO BE THAT THE UNITED STATES MARITIME COMMISSION AND DEPARTMENT OF STATE OFFICIALS BY SELLING THE VESSELS INVOLVED TO THE REPUBLIC OF TURKEY, INTERFERED WITH A CONTRACT (LETTER OF CREDIT ON THE CHASE NATIONAL BANK) WHICH YOU HAD WITH THE TURKISH STATE RAILWAYS, SEAWAYS, AND HARBORS ADMINISTRATION FOR THE SALE OF TWO OF THESE VESSELS FOR $1,500,000, SHOULD YOU HAVE BEEN ABLE TO OBTAIN TITLE TO THE VESSELS. IT IS URGED THAT THE GOVERNMENT WAS UNDER AN OBLIGATION TO RECOGNIZE YOUR AGREEMENT WITH TURKEY BY ACCEPTING YOUR BID AND THEREAFTER PERMITTING THE TRANSFER TO FOREIGN INTERESTS OR TO NEGOTIATE A SALE WITH YOU AT YOUR HIGHER ALTERNATE BID PRICE.

UNDOUBTEDLY IT WOULD HAVE BEEN HIGHLY ADVANTAGEOUS TO YOU IF YOU COULD HAVE OBTAINED THE THREE VESSELS FOR YOUR ALTERNATE (AND UNACCEPTABLE) BID PRICE OF $1,425,000, AND IN TURN BEEN ABLE TO SELL TWO OF THE THREE VESSELS TO TURKISH INTERESTS FOR $1,500,000 PURSUANT TO YOUR LETTER OF CREDIT WITH THEM. THIS WOULD HAVE LEFT YOU WITH ONE VESSEL FREE AND CLEAR PLUS $75,000 CASH. HOWEVER, IT IS TO BE NOTED THAT NONE OF THE THREE VESSELS WAS EVER OFFERED PUBLICLY BY THE UNITED STATES MARITIME COMMISSION FOR SALE TO OTHER THAN UNITED STATES CITIZENS AND FOR OPERATIONS OTHER THAN UNDER UNITED STATES DOCUMENTATION.

THE RECORD DISCLOSES THAT SEVERAL FIRMS WERE INTERESTED IN THESE VESSELS IF THEY COULD HAVE BEEN PURCHASED BY FOREIGN INTERESTS OR COULD HAVE LATER BEEN TRANSFERRED TO FOREIGN INTERESTS. THESE FIRMS APPARENTLY DID NOT SUBMIT BIDS UNDER INVITATION FOR BIDS NO. PD-X-337 BECAUSE THE SALE WAS LIMITED TO UNITED STATES CITIZENS AND THE VESSELS WERE REQUIRED TO BE OPERATED UNDER UNITED STATES DOCUMENTATION. IF THE VESSELS WERE TO BE SOLD UNRESTRICTED OR IF TRANSFER TO FOREIGN INTERESTS WAS TO BE PERMITTED, THEY SHOULD HAVE BEEN PUBLICLY ADVERTISED FOR SALE ON THAT BASIS. WE ARE NOT AWARE OF ANY PROVISION OF LAW UNDER WHICH THE UNITED STATES MARITIME COMMISSION WOULD HAVE BEEN AUTHORIZED TO NEGOTIATE A SALE SOLELY WITH YOU ON THE BASIS THAT YOU HAD A CONTRACT FOR THE SALE OF SUCH VESSELS IF YOU COULD OBTAIN TITLE. WE DO NOT SEEK HOW THE UNITED STATES INTERFERED WITH YOUR CONTRACT TO SELL VESSELS WHICH YOU DID NOT OWN, EXCEPT BY REFUSING TO SELL SUCH VESSELS TO YOU TO FULFILL THE CONTRACT, WHICH THE MARITIME COMMISSION WAS NEITHER REQUIRED NOR AUTHORIZED TO DO. ALSO IT APPEARS THAT CERTAIN ASPECTS OF YOUR ALLEGED RIGHTS IN THIS MATTER WERE JUDICIALLY DETERMINED IN NORTH AMERICAN MANUFACTURERS EXPORT ASSOCIATES, INC. V. CHASE NATIONAL BANK, 77 F.SUPP. 55, U.S.D.C., S.D.N.Y. (1948).

FOR THE FOREGOING REASONS WE FIND NO BASIS TO QUESTION THE ADMINISTRATIVE ACTION TAKEN IN THE MATTER. FURTHERMORE, ANY CLAIM BY YOU IN CONNECTION WITH THE MATTER IS BARRED BY THE PROVISIONS OF THE ACT OF OCTOBER 9, 1940, 54 STAT. 1061, 31 U.S.C. 71A.