EXPERTS REVERSED ON NUCLEAR SHIP

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80M01009A000701110020-8
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 23, 2016
• Document Release Date: April 30, 2013
• Sequence Number: 20
• Publication Date: January 17, 1962
• Content Type: OPEN SOURCE

V7 -
Experts Reversed on Nuclear'Ship
By Drew Pearson
The biggest prize in the
shipping world in the last tour
years has been the operation
of the first atomic merchant
vessel ever
built, the Sa-
vannah. Every
'qualified ship-
ping line in the`` '
United Statesf`
has wanted to get it
It ended up ,
through a mys. -
terious set ofd
circumstances, 111lllwwwwww~~~,~iiiiii
in the hands Pearson
of States Marine. which oper-
ates a large number of for-
eign-flag ships manned by for-
eign crews, but which hap-
pens to be in partnership with
John A. McCone, who at the
time the Savannah contract
was let was chairman of the
Atomic Energy Commission.
McCone is now up for con-
firmation to be head of the all-
important Central Intelligence
'Agency, and a long set of cir-
cumstances put him in the po-
sition of having favored close
business associates, such as
the Henry Kaiser interests,
when he has been in Govern.
ment.
The inside facts in the
award of the S& Savannah to
the States Marine Line, which
has a working partnership
with McCone's personally
owned Joshua Hendy Line,
are hitherto unpublished.
IIn the spring of 1958, as
seven steamship lines applied
to operate the Savannah, Clar-
ence Morse, then Maritime
Administrator, appointed a
special selection board of
maritime experts to recom-
mend the most qualified.
They recommended the
American President Lines,
with more than 30 years of
American-flagship experience
behind it, as the best qualified.
The others, in order of their
qualification, were: Isbrandt-
sen, Farrell, Moore-McCor-
mack, Pacific For East States
Marine, and U. S. Lines.
In other words, States Ma-
rine, the line with which John
McCone has a working part-
nership. was next to last. Yet
it ended up with the contract.
What happened was that
Maritime Commissioner Morse,
answerable directly to Secre.
tary of Commerce Sinclair
Weeks, overrode his own board
of experts. Morse explained
lamely that the board had put
too mu6h emphasis on pas-
senger service.
So the,board went back into
session, eliminated passenger
experience as a criterion, and,
adding up all the remaining
factors, still came up ? with
American President Lines as
the best qualified ship op-
erator.
However, States Marine, no
longer handicapped by its lack
of passenger experience, rated
second. Higher ups in the
Commerce Department then
gave the contract to States
Marine as if the board had
never met
When I asked Under Secre-
tary Louis Rothschild, now re-
tired, why he reversed the
board of experts, he replied:
"There had been too much
lobbying."
He did not elucidate.
"But States Marine chiefly
operates foreign-flag ships," I
pointed out. "The Savannah
is to be the pride of the U. S.
Merchant Marine. Did Jnhn
McCone talk to you about
this?"
"No," protested Rothschild
calling the shots. He came be-
fore our Committee and told
us that States Marine was go-
ing to get the Savannah. There
must have been a terrific lot
of influence used to give this
to States Marine."
Whatever influence may have
been used probably took place
before John McCone took of-
fice as Atomic Energy chair-
man. He was confirmed on
July 9, 1958, and' the Savan-
nah contract was awarded on
emphatically. He added that'July 25.
one of States Marine's sub- IA busy Senate paid little
sidiaries operated under the attention to all this. Only
American flag.
"Besides," he said. "the
House Merchant Marine Com-
mittee completely approved
our decision."
Weeks Stepped In
Congressman Herbert Bon-
ner, North Carolina Democrat,
chairman of the House Mer?
chant Marine Committee, told
a different story. He had in-
troduced the bill authorizing
an atomic merchant vessel.
"We never approved their
decision," said Rep. Bonner.
"They came down here and
told us what they were going
to do and that was that.
"Morse had talked about
putting the Savannah in the
hands of different companies
-the United States Lines in
the Atlantic, the American
Export Lines in the' Mediter-
ranean, Moore-McCormack in
Latin America, and the Ameri-
can President Lines in the
Pacific.
"But Sinclair Weeks, the
Secretary of Commerce, was
one Congressman, Bonner of
North Carolina, "father" of
the SS Savannah, challenged
McCone's apparent conflict of
interest. In a speech on the
House Boor, Aug. 21, Bonner
said:
"I have no concern with the
arrangements made by Mr.
McCone to meet the technical
requirements of the law in re-
gard to the difficult problem
of avoiding conflicts of inter.
est faced by so many able and
successful businessmen when
called to public service.
"However, the facts concern-
ing the intimate business re-
lationships which have existed
between Mr. McCone and Mr.
Mercer (head of the States
Marnie Lines) raise certain ob-
vious questions when we seek
to find the answer to the appar-
ently illogical assignment of
the nuclear ship Savannah to
States Marine Lines by the
Department of Commerce and
the Atomic Energy Commis-
sion."
Coprrleht. 1962. Bell avndlcste. The.
Declassified and Approved For Release 2013/04/30: CIA-RDP80M01009A000701110020-8