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Mr. MUSTER. We have. I am not sure at this moment that wewell, it is a rather difficult position because we would like to, but we feel that we are already pretty far out on a limb here to ask this much assistance from Congress. We didn't really want to be included in the 89–777, but it has seriously damaged our business prospects unless we can construct a new boat and get the economic relief that we need.

Senator BARTLETT. Well, if you don't have a new vessel ready for 1969, you will be out of business?

Mr. MUSTER. In effect; yes, sir.
Senator BARTLETT. What do you mean "in effect”?

Mr. MUSTER. Well, we will be out of business. We can't operate a boat if it isn't approved by the Coast Guard, and we are a common carrier.

Senator BARTLETT. Now, you maintain offices, you say, in Los Angeles and New York?

Mr. MUSTER. That is right.

Senator BARTLETT. Isn't that rather expensive, to have offices in two cities? What is your home port?

Mr. MUSTER. The office in New York is a sales office operated by an organization that represents two or three companies, and so we share their costs. The office is Los Angeles is, fortunately, where the majority stockholder, myself, lives.

Senator BARTLETT. You don't live on the banks of the Mississippi?
Mr. MUSTER. I would enjoy it, but I don't; no, sir.
Senator BARTLETT. What is your position in the company?
Mr. MUSTER. I am executive vice president.
Senator BARTLETT. How old is the Delta Queen?
Mr. MUSTER. It was built in 1928.

Senator BARTLETT. Is there any other passenger boat on the Mississippi now?

Mr. MUSTER. There is no other overnight passenger boat on the Mississippi, Ohio, or Tennessee Rivers.

Senator BARTLETT. We can take literally the statement that appears in this brochure saying that passengers may rest assured that this establishment is more pleasurable and more expeditious than any other steamboat with overnight accommodations?

Mr. MUSTER. I believe you could; yes, sir.

Senator BARTLETT. And should we likewise take at full faith the further statement that the Delta Queen has a more courteous crew and a superior pilot?

Mr. MUSTER. We would love for you to find out for yourself. I would like you to take that trip to New Orleans. I think you would find it enlightening and delightful all the way.

Senator BARTLETT. How long does the round trip from Cincinnati to New Orleans take?

Mr. MUSTER. It is about 7 days down and 5 days back. Senator BARTLETT. What is the fare? Mr. MUSTER. It varies, depending upon the accommodations, The only figure that comes to mind at the moment is $611 for a round trip this year, first-class accommodations.

Senator BARTLETT. How many passengers can the Delta Queen accommodate?

Mr. MUSTER. 186.

Senator BARTLETT. In light of what has been said here today, do you entertain the same fear that I hold in my own degree that passage

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bf the bill you seek by both Houses of Congress might wind up in a teto? ! Mr. MUSTER. I am disturbed by the opposition of the administration, and—yes, it is a problem, and we do fear it.

Senator BARTLETT. I want to say again that that opposition is combletely beyond my understanding. If we do pass the bill, and I will be very frank to say to you that I hope we do, and I personally will want to do all I can to prevent a veto from being imposed. Entirely aside irom the fortunes of your company, I think it would be a tragedy if, on the Mississippi River, one of the great rivers of this country, we couldn't have at least one passenger-carrying ship. We do need to preserve something of that which originated in our day. | As previously stated, the letter from E. Michael Cassady, executive rice president of the Mississippi Valley Association, warmly endorses this legislation, and it will be placed in the record at the appropriate point.

(The letter above referred to will be found at the end of this hearing.) Senator BARTLETT. Now, Mr. Muster, do you have any shipyard

, in mind that is prepared to build a craft of this type?

Mr. MUSTER. We have held discussions with Avendale in New Orleans, and Todd in Houston. Both companies have indicated a positive interest in building a boat. Both companies have also indicated that construction of it to meet the deadline is possible. However, it is difficult to guarantee, and our boat could be usurped by other projects, either Government or other things of priority. We have also talked to other shipyards that would be considered.

Senator BARTLETT. What are the dimensions of the Delta Queen in reference to tonnage, length, breadth?

Mr. MUSTER. The Delta Queen is rated at 1,600 gross tons. The displacement weight is about 2,200 tons. It is 285 feet long, 54 feet beam, and has a bridge clearance of 51 feet, I believe, with the stack on.

Senator BARTLETT. Will its replacement be a paddle-wheel steamer?

Mr. MUSTER. We hope so. There are serious difficulties in operating a paddle-wheel boat as large as the Delta Queen, and many of the experts have advised us that it would be even more impractical in this day and age when better methods are available to build another boat that is as inmaneuverable as the Delta Queen. It is quite difficult when it is nearly 300 feet long to turn or maneuver into a wharf, so I really can't answer your question. We would like it to be a paddle wheel

Senator BARTLETT. This is to be determined in the future?

Mr. MUSTER. Yes. We have two alternatives that are being proposed to the Coast Guard, and the final decision will come after the Coast Guard approval.

Senator BARTLETT. What is the fuel used by the Delta Queen?

Mr. MUSTER. The Delta Queen uses bunker C, which is an oceangoing fuel, primarily.

Senator BARTLETT. How much did the Delta Queen cost?

Mr. MUSTER. My understanding is that it cost almost a million dollars to build.

Senator BARTLETT. Its replacement would be a bit over four times that amount? Mr. MUSTER. It would appear so; yes, sir.

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Senator BARTLETT. Now, as to fueling, I won't make this as suggestion to you, but only as a comment. Twenty years ago, or se n Alaska we had plying the waters of the Chena, Tanana, and Yukoji Rivers, a freight and passenger carrying paddle wheel steamer and i burned wood. And when the wood supply was exhausted, the steame would tie up at the bank of whatever stream it was on and the skipper who was also the owner, would make the passengers go out and cu wood until they had a sufficient supply.

Now, this might cut your cost.
Mr. MUSTER. That is a little tough to do nowadays.

Senator BARTLETT. Well, with this physical fitness program under way, I think this would fit in perfectly. (Laughter.]

I had another question in mind but happily for you it escaped me

Mr. MUSTER. Just as an aside, this is a publication which we mus assume to be Russian; we really aren't quite sure, but it reprinted & Holiday magazine article about the Delta Queen. The boat is, through out many foreign countries, the last remaining symbol of our rivei transportation.

Senator BARTLETT. You might desire, if it is available, to furnish a copy of that Holiday article in a language more readable to us foi the files. You might direct it to my personal attention.

Mr. MUSTER. Fine, we shall.

Since you brought up the paddle wheel, I would like to contribute that it will look like an old boat, no matter what is inside, it will look like the original. Mr. BARER. Under Public Law 89–777, you are compelled to cease

U operations of the Delta Queen, is that correct?

Mr. MUSTER. That is right.

Mr. BARER. You are being treated like any deep draft passenger vessel?

Mr. MUSTER. That is right.

Mr. BARER. Any deep draft passenger vessel that is required to case operations from that public law, could receive title XI mortgage insurance up to 8712 percent?

Mr. MUSTER. That is right.

Mr. BARER. You want to be treated as a deep draft passenger vessel for mortgage insurance purposes as well as for safety purposes, is that correct?

Mr. MUSTER. That is right.
Senator BARTLETT. Does the Delta Queen carry any freight?

Mr. MUSTER. We do not carry any freight at the present time. We, as a promotional device, we would like to carry parcels, you ship by steamboat from New Orleans, things like this, but we don't at the moment.

Senator BARTLETT. So you won't be in competition with the railroads or the trucks, or the river barges, whatever?

Mr. MUSTER. Oh, no; it takes--no, sir.
Senator BARTLETT. What is the draft of the Delta Queen?
Mr. MUSTER. Seven and a half feet.

Senator BARTLETT. There are times, I suppose, during the season, when the water is pretty low for a ship with such draft?

Mr. MUSTER. The Government guarantee of the channel is 9 feet.

However, that 9-foot channel, our paddle wheel can't get enough water to propel the boat efficiently, but we can operate where we don't go aground.

Senator BARTLETT. Why don't you operate the year round?

Mr. MUSTER. Well, we come pretty close to it. This next year we are starting Mardi Gras, our trip will leave in mid-February, and end, unfortunately, November 1, 1968; but the weather is too cold and inclement throughout the river system to really attract passengers.

Senator BARTLETT. I understand.
Thank you gentlemen very much.
Mr. MUSTER. Thank you, sir.

Senator BARTLETT. Mr. Hans Hvide, Port Everglades Towing Co., accompanied by Robert Whitehead, attorney at Jacksonville, and Mr. Knudsen, maritime consultant from Boca Raton.

STATEMENT OF HANS HVIDE, PORT EVERGLADES TOWING CO.,

, LTD., FORT LAUDERDALE, FLA.; ACCOMPANIED BY ROBERT WHITEHEAD, ATTORNEY, JACKSONVILLE, FLA., AND CAPT. FRANK KNUDSEN, MARITIME CONSULTANT, BOCA RATON, · FLA.

Mr. HyIDE. Mr. Chairman, gentlemen, my name is H. J. Hvide. 1 reside in Boca Raton, Fla., and conduct a business in Fort Lauderdale, Fla., under the name of Port Everglades Towing Co., Ltd.

After I complete my statement, we will be happy to answer any questions you may have.

Mr. Chairman, may I ask, in an effort to save time, that my prepared statement be made a part of the record?

Senator BARTLETT. It will be done.

Mr. HvIDE. And I would like to, instead, to add a few comments in view of the sudden changes of the position of the administration, or, rather, of the Bureau of the Budget.

I might say that I have worked with the Maritime Administrator, with the staff of the Maritime Administration for several years, to promote my efforts to determine probabilities of mortgage insurance, et cetera, and I have received great encouragement throughout and complete cooperation, and the change, of course, was a very sudden surprise.

I would like to first clarify that we are not seeking any aid. We are not seeking any subsidies, we are not seeking any differentiations. We are seeking only mortgage insurance.

I would also like to point out that the 12}-percent equity capital proposed is only a part of the equity capital that would go into this type of project. As you know, the Maritime Administration has rather stringent rules and regulations for additional working capital for contingencies, marine insurance, et cetera.

I would like particularly to point out that the need for long-term financing is one of the major reasons why the mortgage insurance is necessary, to this extent. We operate under the American flag. We are subject to American taxation, and we do need to make an effort to keep the mortgage amortization pretty much in balance with the taxload and depreciation. This is even more necessary when in bulk-cargo transportation you go out and you are going to try to

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compete with foreign-flag owners, some of them, we know, are not taxed at all.

I would like to point out that there is a need for a tug and barge operator who wishes to enter into a larger and more advanced tug and barge program to be able to start program of sufficient consequence, to be able to work from a position of strength. When you deal with your cargo shippers, you are not in a very good position to attract his cargoes unless you have backup equipment, and he certainly isn't going to change to a tug and barge system if all you have is one or two tugs and barges to operate.

In talking to insurance underwriters, you need the advantage of fleet coverage, and last, but not least, if we are to attract the type of personnel that we need, and we know are available, we need to be able to demonstrate to these men that you have a sufficient fleet to be able to show them the possibilities of a career.

Now, some comparison was made as if there was a difference between bulk carriers and barges. There is, of course, a difference between self-propelled bulk carriers and barges.

I would like to make a few comments in this area. Before I do, I would like to elaborate a little on my particular qualifications in bulk cargo transportation.

I have been actively engaged in bulk cargo transportation most of it self-propelled for more than 32 years. I have in my possession a plan of a self-propelled bulk carrier that is equal to, and has all of the advanced features of any bulk carrier of today. This design was sent to me by George Sharp, the famous naval architect, on May 23, 1953. Unfortunately, a friend of mine beat me to building the first one. I made the mistake of telling him about it, but I did build the i second and the third.

In bulk-cargo transportation, the only thing that matters is the efficiency, the dependability, and the economy of that transportation. That cargo of grain or other doesn't know, and cares less whether the exhaust pipe comes out of the vessel itself, or in a separate unit. The modern barges are competitive with self-propelled bulk carriers. Speed is of relative unimportance, although in the design that we are working on we are contemplating fully loaded speeds of at least 11 knots, probably 12 knots, and ballast, or light speed of 13 to 14 knots.

We have been engaged in barge transportation with large oceangoing barges for more than 7 years. One advantage we have is that we don't use ballast at all unless in unusual circumstances we need in- ! crement water to deepen the draft of the vessel. Otherwise, we have achieved greater efficiency by not loading the vessel down with unnecessary salt water. Barges do offer many advantages over self

1 propelled transfer vessels.

First of all, the American tug and barge industry is quite far advanced compared to that of European and Asiatic countries. We are able to build tug and barge units at much lower costs than comparablesized self-propelled vessels. In fact, the total cost of tug and barge would only be somewhat a little higher than the European built self-propelled vessels of the same size and speed.

ba You have other advantages. You can build a barge of much greater size and lower draft than a comparable self-propelled. The maneuverability of a tug and barge is much greater than that of a self-propelled vessel. You don't need nearly the same tug assistance in ports, and

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