Letter to the Secretary of the Treasury on the Tax Benefits of the Shipping Industry.

[ Released August 13, 1952. Dated August 11, 1952 ]

My dear Mr. Secretary:

As you know, the Congress passed in the closing days of the recent session S.241--the so-called "Long-Range Shipping Bill"-which I approved on July 17, 1952, and which is now P.L. 586, 82nd Congress. In approving this bill, I issued a statement expressing certain reservations with regard to its provisions. In particular, I pointed out that this legislation does not provide a balanced readjustment of the Merchant Marine Act of 1936, since it does not include any provisions to adjust existing tax benefits of the shipping industry.

The tax treatment accorded this industry under the Merchant Marine Act of 1936 has been the subject of recent studies by both the Treasury Department and the Department of Commerce. After considering these studies, I have indicated on several occasions my strong view that the tax benefits now enjoyed by the shipping industry are excessive in amount. I have further stated that tax concessions are in themselves a basically unsound means of assisting the maritime industry, and that they should be replaced as soon as possible with whatever form and amount of direct aid may actually be required to achieve our national objectives with regard to promotion of this industry.

I have received assurances from the chairmen of the legislative committees which handled S. 241 that the subject of maritime tax benefits will be considered promptly upon the convening of the next session of the Congress. I desire that the executive branch furnish the Congress with all further information needed to permit a complete correction of the present maritime tax situation. Accordingly, I should like to have you revise your report of March 8, 1951, in order to bring it up-to-date, and to include any new or altered factors which may have a bearing on this problem.

I am at the same time asking the Secretary of Commerce to undertake a study to determine whether the complete elimination of existing tax benefits would require some increase in direct subsidy for this industry. A copy of my letter to the Secretary of Commerce is attached for your information.

In order that these studies may provide the basis for prompt legislative recommendations to the new Congress, I am requesting that they be submitted to me by October 15, 1952.

Sincerely yours,

HARRY S. TRUMAN

[The Honorable John W. Snyder, The Secretary of the Treasury]