Energy Transportation

On December 30, 1974, President Ford vetoed II.R. 8193, the Energy Transportation Security Act of 1974. The bill would have required that 20 percent initially, and by June 30, 1977, 30 percent of the oil imported into the United States be transported on U.S.-flag commercial vessels to the extent that such vessels were available at fair and reasonable rates. The Senate Report on the legislation stated that it would "improve our national security posture by reducing the Nation's nearly total dependence on foreign-flag vessels to meet our energy transportation needs. It will also significantly benefit the balance-of-payments position of the United States and provide increased protection to our marine environment. By creating a fleet of modern U.S.-flag tankers, the bill will provide thousands of jobs for American workers aboard ship and in shipbuilding, ship repair and support industries."

President Ford, in a memorandum of disapproval dated December 30, 1974, said the following, in relevant part:

This bill would have the most serious consequences. It would have an adverse impact on the United States economy and on our foreign relations. It would create serious inflationary pressures by increasing the cost of oil and raising the prices of all products and services which depend on oil. It would further stimulate inflation in the ship construction industry and cut into the industry's ability to meet ship construction for the U.S. Navy.

In addition, the bill would serve as a precedent for other countries to increase protection of their industries, resulting in a serious deterioration in beneficial international competition and trade. This is directly contrary to the objectives of the trade bill which the Congress has just passed. In addition, it would violate a large number of our treaties of Friendship, Commerce, and Navigation.

Although this bill would undoubtedly benefit a limited group of our working population, such benefit would entail disproportionate costs and produce undesirable effects which could extend into other areas and industries. The waiver provisions which the Congress included in an effort to meet a few of my concerns fail to overcome the serious objections I have to the legislation.

Weekly Compilation of Presidential Documents, Vol. 11, No. 1, Jan. 6, 1975, p. 5. See also Senate Rept. No. 93-1031, 93d Cong., 2d Sess., July 25, 1974, and Rept. No. 93-1242, 93d Cong., 2d Sess., Oct. 7, 1974; House Rept. No. 93-1437, 93d Cong., 2d Sess., Oct. 7, 1974.

On May 20, 1971, Julius L. Katz, Acting Assistant Secretary of State for Economic and Business Affairs, made a statement on the bill before the Subcommittee on Merchant Marine of the Senate Committee on Commerce. With respect to

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FCN treaties, Mr. Katz said: "We have repeatedly stated that the adoption of H.R. 8193 or its Senate equivalent, S. 2089, would violate many of our Friendship, Commerce, and Navigation treaties. The United States has a treaty obligation in many of them to give treatment to flag vessels of our treaty partner equal to that which we give to our own vessels with respect to carriage of commercial cargoes. This grants a right to vessels of the treaty partner freely to pick up and discharge commercial cargo. These obligations would in many cases be violated by the adoption of [the bill]." For the full text of the statement, see the Dept. of State Bulletin, Vol. LXX, No. 1825, June 17, 1974, pp. 670–672.

The Jones Act

In Xerakis v. Greek Line, Inc., 382 F.Supp. 774 (1974), decided by the U.S. District Court for the Eastern District of Pennsylvania on September 10, 1974, it was held that the Jones Act, § 20, 46 U.S.C.A. 688, was inapplicable since the plaintiff administratrix had failed to meet her burden of proving more than minimum contacts of the incident in question, an apparent suicide, with the United States. The case was dismissed on grounds of forum non conveniens.

Plaintiff's husband, a citizen of Greece, had been a merchant seaman aboard a Greek flag ship from which he jumped into the Hudson River and drowned as the vessel was departing from the port of New York. He left surviving him a widow and two minor children in Greece. Plaintiff commenced an action in Greece, seeking indemnity in damages from the Transoceanic Navigation Corporation for the death of the decedent. Plaintiff also sought compensation before the U.S. District Court, relying on the Jones Act.

The District Court, citing Bartholomew v. Universe Tankships, Inc., 263 F.2d 437 (2d Cir. 1959), stated that the issue was whether the contacts in the United States were something between minimal and preponderant contacts so as to justify application of the Jones Act. The Court found that plaintiff had not met the burden of proving more than minimal contacts, listing the following facts: (1) plaintiff was a citizen and resident of Greece; (2) Transoceanic Navigation Corporation, owner of the vessel from which the decedent jumped, was a corporation organized and existing under the laws of Liberia, and was neither owned nor controlled by United States citizens; (3) none of the stock of the corporation was owned by a U.S. citizen; it was all in the form of various shares in the control of and voted by Greek nationals; (4) the vessel was engaged in carrying passengers and was registered under the laws of Greece; (5) decedent, a Greek citizen, joined the crew of the vessel in Greece and agreed that any claim arising out of his employment would be settled according to Greek law; (6) the vessel was departing from New York harbor when decedent apparently committed suicide.

The Court then said that the mere death in New York harbor on these facts did not as a matter of law create the substantiality of contacts necessary to make the Jones Act applicable. After a review of several relevant factors with respect to forum non conveniens, the Court dismissed the case on the basis of that doctrine. Defendant Transoceanic Navigation Corporation had agreed to continue to appear and defend an identical action previously brought by plaintiff in a Greek court.

Plaintiff had also argued that Greek law was inequitable, harsh, and unfair to seamen, in contrast to the more liberal benefits provided under the Jones Act. To this the Court replied:

we live in an international community and by definition from the view of certain interests the laws of some other countries may be more or less favorable to that special interest. But we are not a super court of international jurisdiction; and there is nothing in the record to suggest that a federal court in the United States can more wisely interpret Greek law than the Greek lawyers and jurists themselves who would have to be called upon to define their law in any adjudication before us.

Despite the assertions of plaintiff's counsel, I do not conclude that she cannot get a fair trial in her own native land. It is not this court's responsibility that the Greek law is purportedly less liberal than the United States maritime law in the rights and benefits provided seamen.

Safety on the Great Lakes

The 1973 Agreement between the United States and Canada for Promotion of Safety on the Great Lakes by Means of Radio (see the 1973 Digest, Ch. 7, § 12, pp. 300-301), was ratified by both parties on May 6, 1974. The Agreement will enter into force on May 6, 1975.

On January 15, 1974, the United States and Bermuda signed an agreement on preclearance (TIAS 7801; 25 UST 288; entered into force January 15, 1974) stating the conditions for the continuance of preclearance at Hamilton, Bermuda. Under "preclearance" persons destined by air to the United States are inspected by U.S. Customs, Immigration and Naturalization Service, and Agriculture in Bermuda before departure.

The agreement requires the Government of Bermuda to provide adequate facilities and law enforcement assistance to assure effective inspection in Bermuda of air travelers, aircraft crew, baggage, and aircraft stores destined nonstop to the United States. The United States is required to provide sufficient inspection personnel to perform preclearance with reasonable speed and efficiency.

Law enforcement assistance is to be furnished to U.S. inspectors by Bermuda. This includes search of passengers subject to preclearance by a Bermudian law enforcement officer if requested by a U.S. inspector. In addition, Bermuda is to permit U.S. inspection agencies to install and operate modern inspection aids, such as the Treasury Enforcement Communications System (TECS).

U.S.-Bahamas

The United States and the Bahamas signed a very similar preclearance agreement on April 23, 1974 (TIAS 7816; 25 UST 646; entered into force April 23, 1974) providing for the continuance of preclearance at Nassau, Bahamas.

U.S.-Canada

The United States and Canada, on May 8, 1974, signed an Agreement on Air Transport Preclearance (TIAS 7825; 25 UST 763; en