November 20, 1945

LIB

Clarence Decatur Howe (Minister of Reconstruction; Minister of Munitions and Supply)

Liberal

Mr. HOWE:

Mr. Chairman, at the last sitting I undertook to answer certain questions, and I will now do so.

Questions were asked by the hon. member for Regina City (Mr. Probe) in connection with the Park Steamship company. He asked first: How many ships does Park Steamship company now own? The answer is 154.

What is the present value? I cannot answer that, because I have no recent valuation.

How many have been sold? The answer is that there have been five 3,600-ton tankers, and fourteen 4,700-ton merchant ships.

To whom, and at what prices? There have been ten 4,700-ton ships to the French government at $415,000 per vessel, less a brokerage charge on each ship of $43,000, or a net of $372,000; one 4,700-ton ship to the Swedish government on the same terms; three 4,700-ton ships to Brazilian interests at $390,000 each, less a brokerage of five per cent, leaving a net of $370,500; four 3,600-ton tankers to Branch Lines Limited at $350,000 each; one 3,600-ton tanker to Canada Oils at $350,000.

The next question is: At what fraction of cost? The basis of sales price in relation to cost is set out in a sales formula which I shall give in a minute, in reply to a question of the hon. member for Yorkton.

Then, the following question from the hon. member for York South: How many tankers in the Park fleet? The answer is five of 3,600 tons and twelve of 10,000 tons.

The cost of each type? The answer is for the 3,600-ton type, approximately $1 million each, and for the 10,000-ton type approximately $1,750,000 each.

Then, the number sold and: the selling price: Five 3,600-ton tankers at $350,000 each.

Then, a question by the hon. member for Yorkton with respect to Park Steamship company, dealing with an item of $23,380,058,

cargo vessels operated by Park Steamship Company Limited, and the actual expenditures from April 1 to August 31, 1945:

(a) What vessels were delivered? The answer is 17.

(b) The names and amounts of tonnage? The answer is as follows:

Name of Ship-Tonnage-Type -Cost

Garden Park, 10,000, Canadian $1,650,000

Simcoe Park, 10,000, Canadian 1,650,000

Albert Park, 10,000. Canadian 1,650,000

Lakeside Park 10,000, Canadian ... 1,65Q,0Q0

Evangeline Park, 4,700, Revised Gray 1,100,000 Mulgrave Park 4,700, Revised Gray 1,100,000

Rupert Park, 10,000, Canadian 1,650,000

Sutherland Park, 4,700, Dominion .. 1,150,000

Bell Park, 4,700, Dominion 1,150,000

Highland Park, 10,000, Canadian ... 1,650,000

Argyle Park 4,700, Revised Gray ... 1,100,000

Rockland Park, 4,700, Revised Gray, 1,100,000

Lome Park, 4,700, Dominion 1,150,000

Hamilton Park, 4,700, Revised Gray 1,100,000 Seven Oaks Park, 10,000, Canadian.. 1,650,000

Gasperian Park, 10,000, Canadian .. 1,650,000

Cartier Park, 4,700, Revised Gray .. 1,100,000

The equipment for above is placed at $130,058, which brings a total price of $23,380,058, for a total of 122,300 tons.

The second question was a request for the formula for fixing the price for ship sales. The answer is that the sales formula has been worked out in conformity with the sales formula of the United States and the United Kingdom for similar classes of ships. The price is based on the estimated domestic cost as at January 1, 1941, less allowances for increased wartime building costs, obsolescence of types and depreciation at accelerated rates * occasioned by wartime service.

Ships of the "Liberty" class are being sold by the United States government at a net cost to United States purchasers of $5531,500. "Empire" vessels of the 10,500-ton "T" class are being sold by the United Kingdom government to British buyers at $551,S00. The 10,000-ton vessels of the "Canadian," "Victory", and "North Sands" types are being sold by the Canadian government to Canadian purchasers at $625,000, $600,000 and $575,000 respectively.

The hon. member for Dauphin asked this question: What fees have been paid to Park operators? The answer is that the total amounts paid to Park operators from the period April 1, 1942 to August 31, 1945 are as follows: Management and operating, $960,277; agency fees and commissions, $4,334,638.

The next was a question by the hon. member for Vancouver South, who asked the terms for the sale of ships. Therf following statement, which I shall ask to have placed on Hansard, sets out the prices of the various types of vessels and the terms of payment for Canadian operators who will operate the vessels under

22s6 COMMONS

Demobilization-Munitions and Supply

Canadian registry. Will it be satisfactory to the hon. member if this information is placed on Hansard ?

Topic:   DEPARTMENT OF MUNITIONS AND SUPPLY
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PC
LIB

Clarence Decatur Howe (Minister of Reconstruction; Minister of Munitions and Supply)

Liberal

Mr. HOWE:

It is as follows:

10,000-TON VESSELS

Type

(a) "Canadian" ('Scotch Boilers-Oil

burners) * $625,000(b) "Victory" (Water tube boilersoil burners)

600,000(c) "North Sands" (Scotch Boilerscoal burners)

575,000Reduction $25,000 per vessel up to three Floor price-(a) $575,000 (b) $550,000(c) $525,000

Depreciation 5 per cent ordinary and 3 per cent special (war) depreciation on asking price up to 2nd March, 1946; thereafter at 6 per cent.

>

4,700-ton vessels

(a) Tween deck type $475,000

(b) Improved type 450,000

, (c) Original type 425,000

Reduction $15,000 per vessel up to three. Floor price, (a) $445,000; (b) $420,000 (c) $395,000.

Depreciation 5 per cent ordinary depreciation plus 3 per cent special (war) depreciation on asking price, up to March 2, 1946, 6 per cent thereafter.

Terms of payment:

-10 per cent on signing contract.

-15 per cent on delivery.

-Balancey-TS per cent in fifteen (15) equal annual instalments.

-Amount outstanding to bear 3J per cent interest.

Buyers to have option to pay balance at any time without prejudice or penalty.

Delivery will be made within thirty days of cessation of U.M.A. control which is presently indicated as March 2, 1946, or of the date commercial liberty is given Canadian flag vessels, whichever of the two dates comes first.

The next is a Question by the hon. member for Eglinton regarding wartime housing.

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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. MACDONNELL (Muskoka-Ontario):

May I ask the minister to elucidate one point? I understood him to mention a commission of $43,000. If I understood him correctly, this was for the sale of a ship at a price of $430,000; is that correct? I understood the minister to give that figure of ten per cent, and if so it struck me as a generous, if not a most extravagant, commission.

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LIB

Clarence Decatur Howe (Minister of Reconstruction; Minister of Munitions and Supply)

Liberal

Mr. HOWE:

I think there is an error in my statement, and I should like permission to check on it. It is mv understanding that the brokerage fee was seifen per cent, and that does not agree with the figure I have given.

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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. MACDONNELL (Muskoka-Ontario):

Well, that sounds better than ten per cent. I

hope it is only seven, although for such a large amount even that would seem to me an extravagant commission.

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LIB

Clarence Decatur Howe (Minister of Reconstruction; Minister of Munitions and Supply)

Liberal

Mr. HOWE:

We look at the net price. If a broker offers a net price which conforms to our schedule for the sale of ships, we worry less about the brokerage than we do about the net price.

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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. MACDONNELL (Muskoka-Ontario):

How far would the minister carry that? Does he not care what the broker gets?

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LIB

Clarence Decatur Howe (Minister of Reconstruction; Minister of Munitions and Supply)

Liberal

Mr. HOWE:

Oh, yes. We have had proposals put to us which involved brokerage fees that obviously were not legitimate, and in such cases we have refused to consider offers. Nevertheless, a seven per cent brokerage fee for the sale of ships is not extravagant, because the broker performs certain services that involve expenditures. Ordinary fees for ship brokerage run between five and seven per cent.

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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. MACDONNELL (Muskoka-Ontario):

Did the same broker sell all these ships?

Topic:   DEPARTMENT OF MUNITIONS AND SUPPLY
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LIB

Clarence Decatur Howe (Minister of Reconstruction; Minister of Munitions and Supply)

Liberal

Mr. HOWE:

The broker offered for ten ships.

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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. MACDONNELL (Muskoka-Ontario):

Did he get a commission of $430,000?

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LIB

Clarence Decatur Howe (Minister of Reconstruction; Minister of Munitions and Supply)

Liberal

Mr. HOWE:

I will give the exact

particulars.

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CCF

Major James William Coldwell

Co-operative Commonwealth Federation (C.C.F.)

Mr. COLDWELL:

This was a deal between two governments^ Was it necessary to have a broker when the governments would have their own inspection services?

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LIB

Clarence Decatur Howe (Minister of Reconstruction; Minister of Munitions and Supply)

Liberal

Mr. HOWE:

It was only after we had accepted the offer that we discovered it was an offer from a government. The brokers offered for an unknown party. That is the usual practice. When we found out we immediately took steps to advise the French government that in the future we would not deal through brokers; if they wished to offer they could deal direct and the transaction would be on that basis.

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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. MACDONNELL (Muskoka-Ontario):

Who was the broker?

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LIB

Clarence Decatur Howe (Minister of Reconstruction; Minister of Munitions and Supply)

Liberal

Mr. HOWE:

The American Ship Brokerage Corporation of New York.

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PC

Alan Cockeram

Progressive Conservative

Mr. COCKERAM:

What service did the American Ship Brokerage Corporation give for that amount of commission?

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LIB

Clarence Decatur Howe (Minister of Reconstruction; Minister of Munitions and Supply)

Liberal

Mr. HOWE:

I am told that there are services; otherwise I presume that brokers would not get a commission. I am told that this is the usual commission. I am sure my hon. friend does not know any more about it than I do.

_____________Demobilization-Munitions and Supply

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PC

Julian Harcourt Ferguson

Progressive Conservative

Mr. FERGUSON:

Would the minister give us the personnel of the American Ship Brokerage Corporation?

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November 20, 1945