and forgotten in the vast bureaucracy of the Department of Commerce.

Creation of an independent agency, in conjunction with the maritime appropriations authorization bill recently passed by the House, will assure that our maritime budget will no longer be pared to the bone, our merchant fleet will no longer be starved off the seas, our shipbuilding industry and its skilled craftsmen will no longer decline for want of adequate funds.

Mr. Chairman, I heartily endorse the efforts of this committee to secure passage of H.R. 159, the independent maritime agency bill, and pledge you my vote when this bill reaches the House floor.

Let's pass H.R. 159 during this session of Congress so we can put the American flag back on the seas of the world where it truly belongs. The CHAIRMAN. Thank you, Mr. Brasco. Are there any questions? Mr. Brasco, the committee appreciates the helpful information you have brought us in your statement. Thank you.

Mr. BRASCO. Thank you.

The CHAIRMAN. The committee will now hear from Congressman James J. Howard of New Jersey. Mr. Howard, you may proceed. STATEMENT OF HON. JAMES J. HOWARD, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY

Mr. HOWARD. I am delighted to be here today, Mr. Chairman, not only to support the pending legislation to create an independent maritime administration but also to commend this committee for its admirable and energetic work.

The efforts of the committee, Mr. Chairman, are accomplishing a twofold task vital to the rebirth of a flourishing merchant marine. That twofold task is facilitating the establishment of an independent maritime authority and, perhaps even more important, focusing the attention of the American people on the tragic and danger-fraught condition of the merchant marine in the United States today.

Today, when the United States is engaged in an arduous and bitter struggle halfway around the globe, and when U.S. responsibilities, as well as U.S. needs, involve many farflung lands, our Nation, more than ever, has a vital need for a strong, modern, and growing merchant marine.

Yet, in this time of urgent and rapidly expanding need, our merchant marine, suffering from the neglect of the past 20 years, is in a weak and vulnerable condition, inadequately equipped, undermanned, its growth stunted by an unrealistic Federal maritime program which fails to grasp the importance of a strong merchant fleet to our national security and to our continuing economic health.

The atrophy of our merchant marine during the past 20 years has been disastrous. During World War II, when an independent maritime administration directed merchant marine programs, the U.S.-flag merchant fleet contained more than 5,000 ships. Today our active merchant fleet includes fewer than 1,000 privately owned and slightly more than 200 Government-owned merchant bottoms.

While at the conclusion of World War II, U.S.-flag merchant ships carried 40 percent of our foreign-trade cargoes, today the American

merchant marine carries less than 9 percent of our waterborne commerce. And while the United States is the world's foremost power in almost every other respect, our active merchant fleet is sixth in size among seafaring nations and our Nation ranks 14th in ship construction.

At present, the U.S. merchant fleet is stretched to the limits of its capability fulfilling vital military needs. To meet our requirements in Southeast Asia, the merchant force has mounted a massive sealift. Ninety-eight percent of all supplies and two-thirds of all troops are arriving by ship in Vietnam. To maintain this sealift, a major portion of the merchant fleet has been diverted from the carriage of commercial cargo, and the merchant force has been made to employ tired and inefficient and perhaps unseaworthy-reserve vessels from World War II.

Under current maritime policies, the present tragic situation will deteriorate rather than improve. The majority of our merchant ships, built during World War II, are now absolete and can operate for only a very few more years at most. Our shipbuilding program at home is continuing at a snail's pace, and the few ships we produce are insufficient to meet present needs, much less the very large future requirements which the "block obsolescence" crisis will very shortly procduce. The first step we must take in the solution of this crucial problem is to create an independent Maritime Administration. Historically, our merchant marine has been at its strongest and most efficient when an independent administration has existed. An independet status for the Maritime Administration will, perhaps most importantly, enhance its visibility. Rather than being buried in a Cabinet-level departmentinsulated and isolated from the President, the Congress and the public-the Maritime Administration would be in full view of those to whom it owes responsibility.

Independent status for the Maritime Administration will not solve all of the insufficiencies of our merchant marine force, but it is an absolutely necessary beginning.

The CHAIRMAN. Mr. Howard, you have given the committee an excellent summary of the situation. Thank you.

Mr. HOWARD. Thank you.

The CHAIRMAN. Our next witness is the Honorable Alexander B. Trowbridge, Secretary of Commerce, who will be accompanied by Mr. James Gulick, Acting Maritime Administrator.

STATEMENT OF HON. ALEXANDER B. TROWBRIDGE, SECRETARY OF COMMERCE; ACCOMPANIED BY JAMES W. GULICK, ACTING MARITIME ADMINISTRATOR; AND CARL C. DAVIS, GENERAL COUNSEL, MARITIME ADMINISTRATION

Secretary TROWBRIDGE. Mr. Chairman, I am accompanied by Mr. James Gulick, the Acting Administrator of the Martime Administration, and also Mr. Carl Davis, the General Counsel of the Maritime Administration.

I appreciate very much, Mr. Chairman, and members of the committee this opportunity to appear before your committee to discuss H.R. 159 and a number of related bills to establish an independent Federal Maritime Administration.

I strongly believe that enactment of these proposals would serve neither the national interest nor the interests of the maritime industry. In my view, these interests would best be served by incorporating the Maritime Administration in the Department of Transportation. Three considerations lead me to this position:

First, to establish an independent Federal Maritime Administration would be incompatible with the President's efforts to improve the management and quality of Government by organizing the executive structure along functional lines;

Second, it would hinder our progress toward a balanced, integrated transportation system that can be fully responsive to growing national requirements, including those of international trade;

Third, it would make more difficult the important task of restoring vitality to the maritime component of our national transportation system.

As a principle of management, it is now widely held that consolidation of Federal agencies having related function under common policy direction and management can help bring about more effective Government services. Recent expressions of this thinking can be found, of course, in the creation since 1947 of the Departments of Defense; Health, Education, and Welfare; Housing and Urban Development; and, most recently, Transportation.

To separate responsibility for developing marine transportation from development of other transportation components would confront the President with two managers of what is essentially the same system and thereby defeat the purposes, from a management point of view, of creating a Department of Transportation.

But there is more at stake here than just effective management. For the first time in our history we have in the Department of Transportation an instrument for providing central leadership both in development of uniform transportation policies and in execution of Federal programs intended to carry out these policies. If the Federal Government is to grasp fully this opportunity to devise and carry out policies to facilitate the growth and movement of domestic and international traffic, it must develop the transportation complex as an integrated system. Our oceanborne traffic is a pivotal component of this complex system and should not be treated as existing in a vacuum. Goods moving in U.S. oceanborne trade do not rely on vessels alone. Imports and exports move through a continuing chain of interconnecting modes from within the interior of the country of origin, through port complexes on either side of the ocean, and on into the interior of the country of final destination. Since oceangoing vessels are an important component of this continuum, reduction of the time and costs of transportation requires that our ships be developed in a way compatible with other features of the system such as cargo-handling, port configuration, rolling stock, and other facilities of inland transportation. Cohesive development is now especially necessary since technological developments have brought about an increasing degree of interdependence among the various modes of transportation. Large, specialized vessels such as container ships require close integration with connecting land components to be efficient and competitive. Efficient employment of these new vessels will require, in turn, coordination

among the modes in developing policies covering such matters as documentation, inspection, interchange, and standardization. In my view, this coordination can best be achieved under the guidance of a single department of Government having responsibility for the entire

process.

I recognize, of course, that H.R. 159 and its companion proposals are intended to strengthen the maritime industry and to insure its vigorous growth. To my way of thinking, however, this wholly desirable objective will not be secured by creation of an independent agency.

Although it is understandable to believe that an independent agency within the executive branch can best act as the advocate of the interests of a particular industry, proposals of this kind are likely to be selfdefeating even where examined solely from the point of view of the objectives of the particular industry involved.

In the context of a Federal Government of growing complexity and of increasing demands on the President's time, a relatively small, single-purpose agency would be at a serious disadvantage in the competition for limited resources. The basic budgetary procedures for presentation to the President and review of requests for allocation of funds would be largely the same regardless of the organizational location of the Maritime Administration. But it is only realistic to presume that funding proposals would receive more weight in this process when advanced by the Cabinet officer upon whom the President relies to determine the overall needs of our national transportation system, than when put forward by an agency operating outside that context and in acknowledged advocacy of a particular interest. More important, however, would be the lost opportunity for the maritime industry to participate at all levels of the Department of Transportation in research, in planning, and in development of policies all of which will vitally affect the interests and future of the industry. To return to an earlier example, this industry has a growing investment in large, expensive, specialized carriers. The dimensions of this investment make it increasingly important for the industry to obtain the most efficient use possible of this costly equipment. Any industry that does not participate in the planning and coordinating process for the system in which these vessels will operate will secure for itself, in my view, less than optimum consideration.

It is for these reasons of management, development of an effective transportation system, and development of the maritime industry, that I recommend against enactment of these bills. I urge instead reexamination of the proposal put forward by the President last year for inclusion of the Maritime Administration in the Department of Transportation.

That completes my statement, Mr. Chairman.

Thank you.

The CHAIRMAN. Mr. Ashley.

Mr. ASHLEY. Mr. Secretary, I think you have made a very cogent and persuasive case. It is a good statement. Would you agree with me that the real key in considering whether the Maritime should be placed in an independent agency or under the umbrella of the Department of Transportation is the question of where the better funding will come from. It essentially is a matter of funding, isn't it? Isn't that

what we are really getting at, where is the merchant marine going to get best consideration in terms of funding?

Secretary TROWBRIDGE. I think that is a very important part of it, Congressman. It seems to me that the thing that we are all looking for is a comprehensive program nationwide of a transportation system but within that system a good maritime program and the creation and approval of that program with its funding is really what we are all seeking. The administrative arrangements to get to it and to implement, it seems to me, follow the determination of what the program is.

I think that the inclusion of the implementing agency within a strong department of Government with its Cabinet level advocate would help the funding implementation of the program.

Mr. ASHLEY. As a spokesman for the Administration, what you are saying, of course, is that the chances of adequate funding are better for Maritime if it is within the Department of Transportation than would be the case if it were an independent agency.

Secretary TROWBRIDGE. Yes, sir.

Mr. ASHLEY. Doesn't it follow then that those who strongly advocate, as many here do, the establishment of an independent agency, advocate a self-defeating proposition as far as the merchant marine is concerned? I mean if we are going to get less consideration as far as funding is concerned then the very interests that they seek to promote are being jeopardized. Wouldn't that tend to follow?

Secretary TROWBRIDGE. I think that would tend to follow; yes, sir. Mr. ASHLEY. We hear a great deal said about the promulgation of a new maritime policy. Again as a spokesman for the Administration from whence this policy must be coming, do you think that the establishment of an independent agency would serve as a catalyst insofar as the development of a so-called new maritime policy is concerned?

Secretary TROWBRIDGE. No, I don't, Congressman. I think the inclusion of the Maritime Administration within that Department of Government dedicated to the total transportation problem of the United States would strengthen the maritime portion of the administration's attack on transportation problems. I think it would make for a stronger maritime program to put the Maritime Administration under the Department of Transportation.

Mr. ASHLEY. Let's assume that this legislation before us is passed by the committee and by the House and by the Senate and say that it was not vetoed by the President but became law. Do you think that as a matter of actual fact this would slow down the development of the new maritime policy?

Secretary TROWBRIDGE. I think that is very likely, if that were to happen.

Mr. ASHLEY. That is all I have.

Mr. LENNON. Would the gentleman yield at that point?

Mr. ASHLEY. I yield.

Mr. LENNON. Now, tell us why it would. Because of the apathy and hostility of the administration. Is that why it would?

Secretary TROWBRIDGE. Mr. Congressman, our efforts, Secretary Boyd's efforts, my efforts and those working with Secretary Boyd

Mr. LENNON. I don't think the record can reflect the knowledge of the gentleman to your left as one of apathy.