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The CHAIRMAN. Without objection, it may be incorporated. And I may say that any tables you think are illustrative of your remarks will be inserted in the record, without objection.
Mr. SAUGSTAD. I think I will just touch on the high spots in each table, and then submit the table for the record. The CHAIRMAN. That will be entirely satisfactory. (The table referred to follows:)
ANALYSIS OF SHIPBUILDING PROJECT ON THE NEW VESSELS Mr. Saugstad. Twelve shipping companies availed themselves of replacement shipbuilding under the subsidy program. The Nippon Yusen Kaisha leads both in the number and tonnage of ships laid down, as well as in the amount of subsidy allotted. The important thing is that 22.7 percent of the subsidy of 2,365,200 yen was paid to the N. Y. K. for its six ships having a total of 43,800 gross tons. I will submit a table analyzing the tonnage held by all the companies.
Tonnage built-Summary of Companies—tonnage and subsidies
Number Gross Percent Subsidy
of vessels tons of total (yen)
Percent of total
The vessel replacement subsidy law of Japan limits new vessels to a minimum size of 4,000 gross tons,
As a result of this provision, there are no small vessels in the building program to replace the small vessels scrapped as stated above, although 10 of the 31 vessels projected are of less than 5,000 gross tons. About one-half of the new tonnage is in the 7,000 gross-ton category. Forty-seven percent of the new tonnage built comes within the size group of 7,000 to 8,000 tons.
I submit a table for the record showing a complete analysis of the
SPEED OF VESSELS TO BE BUILT Mr. SAUGSTAD. No characteristic of the vessel replacement program of Japan is more significant than the speed built into the new feet. No vessel is less than 15 knots. Thirteen vessels are of 16 knots and 15 vessels are of 18 knots and over. This is a departure from the minimum speed of 13 knots required under the legislation. One Kokusai Kisen's Shikano Maru of 6,900 gross tons is designed for 18.75 knots and will probably be the fastest cargo vessel under Japanese registry.
Twenty-six of the thirty-one vessels are equipped with Diesel or internal combustion engines. The three vessels projected by the Osaka Shosen Kaisha and two vessels for the Nippon Yusen Kaisha's Kinkai Yusen subsidiary are all turbine-driven.
Mr. Hamlin. If I do not interrupt you, may I ask do these vessels you are speaking of lend themselves to competition in fishing here, you might say?
Mr. SAUGSTAD. I should say not, sir. These are a group of very high class, high grade, fast cargo vessels for the liner services, mostly.
Mr. HÁMLIN. We have had a good deal of testimony here in regard to competition in fishing and I did not know whether those vessels competed at all in that industry, or not.
Mr. SAUGSTAD. The minimum size provision of the law, which requires vessels to be at least 4,000 gross tons, would prohibit them from being fishing vessels as such, as we understand fishing ships. Of course, that does not mean they cannot carry fishing products.
The significant thing about the speed group is that 13 of the vessels are of 18 knots. I will submit for the record an analytical table showing the tonnage to be built by speed groups.
DISTRIBUTION OF NEW TONNAGE BY SHIPYARDS
Among the shipyards building the new tonnage under the replacement program, the Mitsubishi shipyards at Nagasaki and Kobe are first, having obtained contracts for 13 vessels of 79,435 gross tons, or more than 40 percent of the total. I will submit a table for the record to show the tonnage to be built and the distribution by yards, number of vessels, size of vessels, and the owning companies.
Tonnage to be built-Distribution by shipyards
The price of new tonnage in Japan has increased. It has been reported that in 1932 the price of new tonnage ranged from 130 to 150 yen per ton-tonnage category not stated, but presumably deadweight-but has since advanced to more than 200 yen per ton. While the general improvement in the iron and steel markets of Japan has been credited with causing the upturn in tonnage prices, it is also generally considered that the vessel replacement program's time limitation of about 2 years effectively increased the cost of new tonnage. Completion of allotments under the law in 1% years indicates considerable additional stimulation to the Japanese shipbuilding industry.
Competition between Japanese and British shipyards on a French tender for two 9,000-deadweight-ton freighters indicates that Japanese costs are higher than British costs, since the Japanese
bidders were unsuccessful. The reported higher cost of Japanese materials and high royalties on engine installations may account for this. It has been estimated that in September 1934 an 18-knot, 10,000-deadweight-ton motor-powered freighter would cost approximately 300 yen per ton which, at the then exchange, would work out at about $90 per deadweight-ton.
Now, Mr. Chairman, I will submit for the record a table which shows the owning companies, the names or, in lieu of the names, the number of hulls laid down under contract; the designed tonnage, and designed speed, the date the keel was laid, the date of proposed completion, the subsidy per ton, the total subsidy on the ship, and the constructing yard, for the record. The CHAIRMAN. Without objection, that may be incorporated.
Tonnage to be built-details of new construction
394, 200 Yokohama.
bishi). 410, 400 Tama (Mitsui). 410, 400 Do.
351, 000 Do.
bisbi). 372, 500
Mitsui Bussan Kaisha:
No. 1. Azumasan
No. 6. (Undecided).
No. 1. Uyo Maru..
No.4. (Undecided). Kokusai Kisen:
No. 1. Shika no
No. 3. Kongo Maru lino Shoji:
No. 1. Toa Maru...
No. 1. (Undecided)
No. 3. (Undecided)
No. 1. (Undecided)
No. 2. (Undecided) Takachiho Shosen: Ta.
kaei Maru Shinko Shosen (unde.
cided). Shimaya Kisen (unde
220,000 Nagasaki (Mitsu
bishi). 220,000 Do. 220,000 Do. 220.000 Yokobama. 220,000
Do. 340,000 Nagasaki. 320,000 Yokohama. 220, 800 Tama (Mitsui). 209, 250
bishi). 207, 500 Do.
i The builders are: Nagasaki and Kobe works of the Mitsubishi Heavy Industrial Co., Ltd; Tema works of the Mitsui Shipbuilding Yard; Yokohama Dockyard Co., Ltd.; Uraga Dockyard Co., Ltd.; Kawasaki Dockyard Co., Ltd.; Harima Shipbuilding Yard, Ltd.
EFFECT ON SHIPBUILDING INDUSTRY OF JAPAN
Mr. Saugstad. The prosperity of Japanese shipbuilding resulting from the scrap-and-build plan and from naval construction has been such that the Finance Ministry demanded that the unit cost of construction on naval vessels be reduced, and indicated that it might be advisable to impose extra taxes on shipbuilding as coming within the category of a war industry. The Ministry pointed out that owing to navy construction and the Government's encouragement of construction of commercial tonnage, the shipbuilding industry had been doing an excellent business. To this, the Japanese Shipbuilders Association replied in a memorandum to the Navy, in September, that since general commodity prices maintained high levels and since steel and iron prices were soaring, it was difficult for shipbuilders
to reduce the per-ton cost of construction and that, if reduced cost of construction was to be effected, it should be carried out in individual items and not through fixed percentage reduction from total costs. It was stated that the industry had not been as prosperous as indicated and that the industry's books were open to naval authorities in verification of that assertion.
When the Mitsubishi Heavy Industries Co. offered 400,000 shares of stock for public sale on August 1, 1934, the block was oversubscribed 50 times. The selling price was 65 yen per share, representing 50 yen paid-up capital. The oversubscription was cited as an indication of the public confidence in the future of shipbuilding in Japan. The sale of shares in the Mitsubishi Heavy Industries Co. followed the formation of that company in April through amalgamation of the former Mitsubishi Shipbuilding Co. with the Mitsubishi Aircraft Co. The Mitsubishi Shipbuilding Co. had its principal shipyards at Nagasaki and Kobe, and was Japan's largest and oldest private shipyard. In celebration of the amalgamation of these companies and of the fiftieth anniversary of the shipbuilding company, 800 officers and 20,000 workers on June 20, 1934, received a bonus equal to 2 months' salary.
The eight principal shipyards declared dividends of more than 2 percent for the latter half of 1933 and more than 4 percent for the first half of 1934. The consolidated results are shown in an analytical table covering the situation, which I will submit for the record.
The CHAIRMAN. Without objection, it may be incorporated. (The table referred to follows:)
Income and expenditure (1,000 yen) 8 principal shipyards in Japan
1931: Second hall. 1932:
Second hall. 1933:
29, 268 38, 569 37, 593
28, 612 37, 073 34, 823
656 1, 496 2, 770
Second hall. 1934: First hall.
903 1, 441
4 2.6 4. 2