Full Volume 19 - Federal Maritime Commission

AGREEMENT NOS 97183 9731 5 359
erized vessels to be IJsed in the Japan U S Pacific trades The
Development Bank of Japan is an instrumentality of the Government of
Japan and provided subsidy to the Japanese flag shipping companies in
the nature of construction loans at a rate of interest below the rates
commercially available The percentage of the cost of any particular
vessel which the Bank would loan was directly related to the desirability
ofthe construction of that vessel in the view of the Government of Japan
In the case of the vessels employed by Respondents in the Japan U S
Pacific Coast trade the percentage was quite high For example the
Bank loaned 80 percent of the cost of construction of the Hakusan Maru
employed pursuant to Agreement No 9731
Upon receipt ofthe loans Respondents negotiated with shipbuilding
companies for the construction of the containerships Respondents let
contracts for the construction of the vessels one to one and one half years
before the vessels were delivered to Respondents At the inception of
these two agreements it was determined that Japan Line Kawasaki
Kisen Kaisha Mitsui O S K Line and Yamashita Shinnihon Steamship
Company would operate four vessels pursuant to Agreement No 9718
and that Nippon Yusen Kaisha and Showa Shipping Company would
operate two vessels pursuant to Agreement No 9731 Those six vessels
were delivered to Respondents and placed in service in the Japan
California trades in the period August through November 1968
In 1968 an arrangement similar to Agreement Nos 9718 and 9731 was
devised for the Japan Pacific Northwest trades It is Agreement No 9835
At its inception it was decided that the six Respondents would operate
three vessels in the Japan Pacific Northwest trades
As of 1974 Respondents had 18 containerships inthe Japan U S Pacific
Coast trades Those vessels were put in service over several years
Sometime before March of 1970 Respondents agreed to build three more
containerships to be used in the Japan California trades Sometime before
April of 1971 Respondents agreed to build three additional vessels to be
used in the Japan California trades and three additional vessels to be used
in the Japan Pacific Northwest trades Those vessels were placed in
service in the Japan Californiatrades as follows to be employed pursuant
to Agreement No 9718 one vessel in November 1971 one vessel in
February 1972 one vessel in May 1973 and one vessel in June 1973 to
be operated pursuant to Agreement No 9731 one vessel in April 1972
and one vessel in June 1973 The vessels operated pursuant to Agreement
No 9835 in the Japan Pacific Northwest trades were placed in service as
follows one vessel in May 1970 one vessel in September 1970 one in
December 1971 which was removed in February 1972 and not replaced
until August of 1973 and one each in April May and October 1974
The consortium of four Respondents operating pursuant to Agreement
No 9718 provides twice weekly service between Japan and California
The consortium of two Respondents operating pursuant to Agreement
No 9731 provides weekly service between Japan and California The
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