U.S. Ships (Purchase) (Hansard, 10 February 1947)

§ Mr. Barnes

I have at present 229 war built ocean going cargo ships of the Liberty type on bare-boat charter from the U.S.A., together with some 42 smaller ships of short sea type, and a few specialised ships unsuitable for civilian cargoes. Charter hire for these ships is being paid at the rate of just over two million dollars a month. Discussions have been proceeding for some time with the United States Government and I made proposals last November for the purchase 11W of some of these ships and for the redelivery of the remainder. British shipowners have been authorised to purchase 100 of the ships of the Liberty type, in addition to about 40 ships of faster types, and I have proposed to commence redelivery of the balance of the ships of Liberty type in June at an initial rate of ten ships a month. I have proposed also to purchase some of the short sea ships and to redeliver the balance, together with the specialised ships, during 1947.

The following is a fuller statement of the position: I have a large number of ships at present on bare-boat charter from the United States Government under an informal arrangement originally made in 1943 as part of the general plan for the most effective use of Anglo-American combined shipping and shipbuilding resources. The arrangement was formalised by an exchange of letters between H.M. Government and the United States Government in November, 1944, which provided that the ships would remain under the British flag until six months after the termination of the present war as proclaimed by the President of the United States, or such earlier time as the Congress of the United States by concurrent resolution or the President of the United States by proclamation might designate. Upon the termination of Lend-Lease it was agreed that, as from December, 1945, H.M. Government should pay hire in dollars for the ships on the same basis as hire charged to U.S. charterers of similar vesels, but not exceeding 15 per cent. per annum of the statutory sales price fixed for such vessels under United States law. Having regard to the rate of hire settled for ships on charter to United States citizens, H.M. Government subsequently agreed that hire should be calculated on the statutory sales price without deduction for age of the vessels, and at the rate of 15 per cent. per annum. The monthly amount currently paid in hire is just over 2 million dollars. The ships currently on bare-boat charter under these arrangements include 229 war-built ocean-going cargo carriers of the "Liberty" type, some 42 smaller ships of short sea type and a few specialised ships unsuitable for civilian cargoes. The effect of redelivery of these ships would be to reduce the volume of cargo-carrying tonnage available for our essential needs by approximately 2½ million deadweight tons, representing imports into the United Kingdom of between 7 and 8 million tons of cargo per annum. All these ships are operated solely for the account of H.M. Government, in the essential employment assigned to them by my Department. The House will readily understand the serious effect on our economy of an immediate loss of shipping of this magnitude, for even including this tonnage our total resources for dry cargo shipping amount at present to only 16,700,000 tons deadweight compared with 17,200,000 tons deadweight in 1939. On the other hand, these ships are mainly of 12W "Liberty" type, large numbers of which have already been laid up by the United States Government. Discussions were initiated last year with a view to agreeing upon an orderly winding up of these bare-boat chartering arrangements between the two Governments, and H.M. Government submitted proposals in November last for the purchase of a proportion of the ships and the redelivery of the remainder over a reasonable period, hire, of course, continuing to be payable until their redelivery. H.M Government have now authorised British shipowners to purchase about 100 of the ships of "Liberty" type. The rate of redelivery of the remaining ships of this type is still under discussion with the United States Government. It seems clear that redelivery should be arranged with regard to what is physically practicable, and also so as to avoid any undue dislocation of world shipping, but H.M. Government have informed the United States Government that while these difficult matters are under discussion they will commence redelivery in June at the initial rate of ten ships a month. H.M. Government also propose to purchase a number of the smaller types of ships and to redeliver the remainder of these this year. The specialised ships will also be redelivered in the next few months. It will be readily recognised on both sides of the Atlantic that the amount of this tonnage that can be purchased for the United Kingdom is strictly limited by our dollar resources. Nevertheless these proposals represent a very substantial contribution to the problem of disposing of United States surplus war-built tonnage. I should mention that United Kingdom owners were also authorised last year to purchase about 40 U.S. ships of faster types, surplus to U.S. requirements. The purchase of all these ships would involve expenditure of over 100 million dollars. So far only a very small number of the United Kingdom bids for faster types have been successful, but H.M. Government are confident that no less favourable consideration will be given to these bids than to those of other countries. These matters are at present under consideration by the United States Government, who I am sure share our anxiety to avoid any step at this juncture which would unduly interfere with the process of restoration of international trade.