industry representatives on the submission of each of these two reorganization plans have come to fruition. At first, it was thought that the Maritime Administrator was under obligation to clear with the Under Secretary of Commerce only matters strictly in the policy area. As time went on-and a short period of time at that-the Maritime Administrator found himself in a position where everything he did, or even thought of doing, had to be analyzed, diagnosed, or reviewed in minute detail by the staff of the Under Secretary of Commerce. There is vivid in my memory an outstanding example of just what I am saying. As many of you know, I have been most closely associated with the Maritime Administration and its predecessor agency for almost 25 years. Shortly after the maritime agency lost its independent status, one of the heads of the agency voiced strong sentiments with respect to his lack of power or authority to move without clearing first with the Under Secretary of Commerce. A year or so later, this man became Under Secretary of Commerce and, believe it or not, I heard the same criticism from his successor in the MARAD job. While the decline of the merchant marine cannot be attributed solely to the fact that the administration of that service was transferred from an independent Commission to a subordinate Board, the fact remains, as it has rightly been said, that "it is much more than a coincidence that the decline which set in some 16 years ago has accelerated as its importance has been successively downgraded." Without the guidance of an independent agency, the needs of the industry have been subordinated to the concerns and problems of larger groups, and without a free, clear, and strong voice speaking on its behalf it has been wandering aimlessly in the maze of competing Government bureaus and departments. As we said in our statement on "A New National Maritime Policy," issued earlier this year: In its present status the Maritime Administration is a subordinate agency of the Government, subject to authorities and interests which do not have as their primary objective or concern the well-being of the American merchant marine. Under these circumstances, it would be almost too much to expect that the needs of the merchant marine would receive proper recognition and that the means of meeting these needs would be vigorously and persistently advanced in the channels of the Government-this, even if the leadership of the agency had the desire and the will to do so. An industry administered by a relatively subordinate agency of the Government will almost inevitably suffer when it vies for Government attention and Government funds with other industries whose sponsors occupy a more independent and powerful position in the halls of Government. It is essential, therefore, if the merchant marine industry is to be revitalized, that one of the first steps on this road should be the reestablishment of the Maritime Administration as a separate and independent agency of the Govern ment. The events of the past 16 years have borne this out all too clearly. Indeed, the fate of the domestic oceangoing merchant marine since the enactment of the Transportation Act of 1940, by which the domestic coast wise carriers were placed under the control of the Interstate Commerce Commission, foreshadowed the fate which later befell the entire merchant marine when the independence of the Maritime Commission. was ended. 67-225-66- -6 It emphasizes what can happen to an industry when it is administered by an agency which does not have the welfare of that industry as its primary responsibility, even when that agency itself, as in the case of the ICC, is a separate and independent one. To accomplish the objective of a sound and viable merchant marine industry, it is necessary that the agency responsible for its well-being be a separate and independent body and one whose sole responsibility and objective is the welfare of that industry. Of course, the most logical question members of this committee will be asked by your associates on the floor of the House is: What is so unusual about the maritime industry to justify its promotion and administration by an independent agency? Mr. Chairman, there are direct and proximate relationships among many forms of transportation, such as trucks, buses, railroads, pipelines and domestic airlines. But I submit that oceangoing vessels in the foreign trades not only do not compete with other segments of the American transportation industry, but our problems are completely different. Our vessels in the foreign trade constitute a separate and distinct transportation service which is in direct competition with the vessels of other nations in the solicitation of cargoes. As such, there is brought into play a myriad of problems and questions which are in no way involved in domestic transportation and which, of their very nature, require an authoritative, knowledgeable, and independent body to deal with them. To subordinate water carriers to other forms of transportation will lead, inevitably, to the continuing decline of the oceangoing water transportation industry. After all, viewing the situation realistically, it would be asking too much to expect the establishment and enforcement of an effective program for the development and maintenance of a vigorous American merchant marine by à Government department which did not have that goal as its one and only target. A mere reference to the numerous studies which have been made under Government auspices over the past 20 years conclusively proves just how peculiar in nature the maritime industry really is. It is not my intention here today to discuss in detall the particular bills which have been introduced. Suffice it to say, that we strongly support the establishment of an independent agency not under any other department, agency, or instrumentality of the executive branch of the Government, together with the establishment of a Maritime Subsidy Board within that agency with complete and final authority to pass upon all matters related to construction-diferential and operating-differential subsidies. In connection with the Subsidy Board, we would favor a three-man Board, one of whom would be the Maritime Administrator, and the other two members would be appointed by the President, with the advice and consent of the Senate, whose terms wen'd not expire at the same time. I might say, Mr. Chairman, that having heardd the testimony both yesterday and today, I think in this last pangmapà I might have done somewhat inadvertently what I did not intend to do and this was to favor a particular bill I have in mind partiumlarly the discussion Mr. Mall and had yester day with M- Hal, I think basically, we would for the group of bills starting with the Clark bill as against the earlier bills, but I have in mind some of the questions Mr. Mailliard asked and I think that some melding of the two bills probably would be in order as a better bill than either of the two. The CHAIRMAN. Mr. Downing. Mr. DOWNING. That was a very fine statement, Mr. Casey. I have no questions. The CHAIRMAN. Mr. Mailliard. Mr. MAILLIARD. No, Mr. Chairman, I don't think I have any questions. The CHAIRMAN. Mr. Pelly. Mr. PELLY. Mr. Chairman, I just would like to ask Mr. Casey, because he has had long experience in the legislative procedure, whether he doesn't think that the reporting of any of these bills would be rather "love's labor lost" and maybe we should concentrate on an amendment to the transportation bill itself? Mr. CASEY. Well, Mr. Pelly, I anticipated that type of question might be asked. In the legislative process, I have seen many surprises over the past 20 years. I know that we thought we were going to have a tough job getting an Agriculture Department appropriation amended to provide for 50-50 prior to the enactment of the 50-50 law itself, and I was amazed to sit in the gallery and find the support that we had on the floor when all segments of management and labor supported the 50-50 amendment. Before the House and Senate Government Operations Committees I testified on somewhat of a fallback position, having in mind that it looked as if we had a big uphill fight to get an independent agency. My position here, of course, today, when I am called to testify on bills to establish an independent agency, is that I strongly support the enactment of those bills. I am not inclined to think that it is as hopeless as some might think to get this accomplished with all segments of the industry in support of it. Mr. PELLY. Well, pursuing that just one step further, I wonder if you feel that there will be an attempt to work out some sort of compromise; maybe someone will propose that Maritime be given under the Transportation Act, an amendment to it, some little upgrading and that this in turn would be in the nature of, as I said yesterday, throwing a bone to the maritime industry and yet that this would be maybe the very worst thing that could happen because it would remove the issue somewhat and be rather in the way of killing the opposition to this proposal which has been made. Mr. CASEY. Of course, you would have to first know what the bone was. I would have to see how they could possibly upgrade. Mr. PELLY. Giving a title and raising the salary of the maritime man maybe over some of the others and indicating, as has been known in the past, that there would be more authority and independence possibly when really that would not result at all. Mr. CASEY. I don't think that would help at all. Mr. PELLY. I have heard that that is one of the plans that is in the back of certain minds. In other words, the obvious opposition of the maritime unions and the industry, itself, is something that no member of the administration likes to contemplate because it is an election. year. On the other hand, I have heard that those close to the administration thought maybe they could remove some of that bitterness by possibly amending the bill to some degree. I know that Mr. Hall was very clear when he testified that that could not satisfy him. I would like to know whether you feel the same way. Mr. CASEY. Upgrading insofar as title or salary or anything else and keep it in the Department of Transportation would not satisfy me, as a direct answer to your question. Mr. PELLY. Even going so far as Mr. Mailliard suggested, maybe transferring the subsidy functions to the Maritime Commission? There would be an example of where maybe you might feel that you would be more comfortable with that than you would without it. Mr. CASEY. I would have to confess that there is a great degree of logic in Mr. Mailliard's suggestion that you would certainly have the subsidy function then in a quasi-judicial independent body. I think, perhaps, that the subsidy function is so peculiar in itself to the other matters within the Federal Maritime Commission that I would personally prefer to see a Maritime Subsidy Board whose functions would be solely the rulings on subsidy under the 1936 act. But I concede that if they did this that it could be supported from a logical standpoint. Mr. PELLY. It might soften the blow a little bit but it does not seem to me that is going to in any way provide for the basic problems that face the industry today. Mr. CASEY. No, I don't think it would. I have to disagree with Mr. Hall in one statement he made in response to a question by you, Mr. Pelly, and that is whether or not, if a committee were established under the Vice President and if, perhaps, a program were announced to revitalize the merchant marine "Wouldn't that be a step in the right direction," was your question. I believe Mr. Hall's answer was that, no matter what programs you got, if you were buried in the Department of Transportation that they wouldn't do any good. Mr. PELLY. As I gathered that, he felt he did not want to be kissed off with a renewed promise of some prospect of a new policy. Mr. CASEY. I prefer also to maintain the distinction that Mr. Mailliard made between policy and programs. I don't think there is much wrong with this merchant marine that money would not cure. Mr. PELLY. I think I would agree with you that anything that brings to a head this matter of uncertainty that exists over future policy would be a step in the right direction. I agree with you. Mr. CASEY. I think so. Mr. PELLY. On the other hand, I recognize that Mr. Hall just doesn't want to have a prospect held out of a policy forthcoming and that this is going to satisfy everybody that wants an independent agency. Mr. CASEY. Well, the industry today is in such a terrible state of confusion that something must be done to straighten it out. The task force report raised questions about the policies of the 1936 act, whether they are going to be adhered to by the Administration. I think that has to be straightened out. Mr. PELLY. I don't think necessarily either that the objection raised by Mr. Hall is valid that you have to know about maritime affairs. A very able man like the Vice President, I agree, could get those who do know together and come up with something that might be satisfactory to everybody. Mr. CASEY. I agree. Mr. PELLY. Thank you. I got off the subject a little bit. The CHAIRMAN. Mr. Edwards. Mr. EDWARDS. Thank you, Mr. Chairman. The Government Operations Committee used as one of its primary reasons for putting the Maritime Administration in the Department of Transportation, the fact that we have many more prepackaged shipments today, we have much greater containerization. A shipment will start in Kansas City, for example, prepackaged and containerized and go to the dock and be loaded on a ship and to this extent it is a continuous movement. I wonder what answer you would make to that point. Mr. CASEY. I read that in the report, Mr. Edwards. It sounds as if it might have logic and there is certainly bound to be some coordination between the truck and the ship in the container operation, but this is not a matter that needs these two forms in the Department of Transportation. The fact is that the merchant marine problems start with the ship leaving the port and the building up of the merchant marine and the maintaining of the ships is a pretty different proposition than the maintaining of the trucks and so forth. True, they have contracts for trucks and containers, but I don't think this is a valid argument for putting the merchant marine in the Department of Transportation. Mr. EDWARDS. Thank you. The CHAIRMAN. Counsel has a few questions. Mr. DREWRY. Mr. Casey, you said on page 2 of your statement that "All the doubts and fears voiced by industry representatives on the submission of each of these two reorganization plans-21 and 7-have come to fruition." Could we ask you as we did Admiral James to supply examples of the inadequacies of the operations of plans 21 and 7 over the years? Mr. CASEY. I believe the question you asked Admiral James was the chairman's question, to supply specific examples where the Maritime Subsidy Board had treated with subsidy matters that were not satisfactory. Mr. DREWRY. That is right. That was the precise question. Mr. CASEY. Well, actually Mr. Drewry, my submission on that would be precisely the same as Admiral James' because the AMMI supplies the information on this to CASL and I would certainly say that whatever they supply would be a submission from me. I would be glad to cooperate with him. Mr. DREWRY. If you have any thoughts either on your own or with them in connection with inadequacies of the previous two plans, I think it would be helpful to have them before the committee and available to the committee. The CHAIRMAN. Mr. Mailliard. Mr. MAILLIARD. I am a little surprised, Mr. Casey, that you throw Reorganization Plans 21 and 7 together because Reorganization Plan |