The Soviet Merchant fleet began to expand when Victor Grigorevich Bakayev became the Minister of the Merchant Marine (in 1954).

*

With rare independent authority Bakayev seems to have a free hand in developing the Soviet merchant navy. Indeed, more than any other single person he is responsible for the tremendous new importance Russia is gaining from its merchant fleet.

I find the foregoing statements particularly significant with respect to the statement of the Director of the Bureau of the Budget in response to the question posed by my colleague, Congressman Dellenback, concerning the ability of an independent agency to coordinate its activities with other agencies having jurisdiction over other modes of transport. Too, the fact that the expansion of the Soviet merchant fleet dates from the time when Mr. Bakayev was vested with "rare independent authority"-the same autonomy which this committee now seeks to grant our own Federal Maritime Administration—is, in my estimation, highly significant.

Where once the Soviet Union was a land-locked power, her actions in the Middle East crisis dramatically indicate that she has broken these shackles and achieved a high degree of strategic mobility. No less a military authority than Hanson Baldwin observed in the New York Times of June 2:

... the reinforcement of Soviet naval forces in the Mediterranean is far more significant than its effect on the Middle Eastern crisis.

. . . it demonstrates a new-found Russian naval capacity and a Communist understanding for the use of sea power for political, psychological and diplomatic ends that were impossible a decade ago. [Emphasis added.]

in the last decade, there has been a rennaissance of Soviet maritime power-naval ships, merchant marine, fishing fleets and oceanographic vesselsa rennaissance that is influencing history and casting a long shadow. All of us are agreed, it would appear, on the necessity of restoring the merchant marine to its former strength and vitality. But, there agreement ceases, and discord begins. The Budget Director has stated, in effect, only if Congress accedes to Transportation Secretary Boyd's maritime plan, including the transfer of the Maritime Administration to the Department of Transportation, can we anticipate more favorable consideration for increasing Federal spending on maritime activities. This is an ill-advised, and dangerous attitude. Needed badly are forward-looking administrators anxious to get on with the vital task of rebuilding our merchant fleet. We can ill afford provincial empire building on the part of any department that would detract from our ability to reach this national goal as quickly and as efficiently as possible.

Finally, Mr. Chairman, I would like briefly to touch on the great contrast between the treatment accorded the aircraft industry and the maritime industry. Last week, the House passed the Department of Transportation Appropriation bill for fiscal year 1968. Included in that appropriation was the sum of $142,375,000 for the development of two prototype supersonic transport aircraft. This amount is only $625,000 less than requested by the administration, and appropriated for the entire merchant ship construction program of 13 vessels for fiscal 1968. Imagine what could be done were the entire cost of the SST

program estimated to be about $4.5 billion before the first SST is delivered to be directed toward revitalizing our merchant fleet.

Mr. Chairman, let us meet this challenge head on; let us begin now this difficult task to develop a first-class merchant marine. The job ahead will be expensive, it will not be easy, it will require the earnest efforts of industry, labor and all levels of government to succeed in this endeavor. But, the price of our failure to respond to this challenge is a lessening of our national security, continued balance-of-payments deficits, and a growing independence on other nations for our life's blood, trade. I therefore urge the favorable consideration of your bill, H.R. 159, and other identical and similar bills to take the initial step toward revitalizing the American merchant marine by establishing an independent Federal Maritime Administration.

Thank you, Mr. Chairman.

The CHAIRMAN. The subcommittee appreciates your fine statement. Another member on this committee would also like to be heard at this time. We welcome any statement you may care to give, Mr. Ruppe.

STATEMENT OF HON. PHILIP E. RUPPE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN

Mr. RUPPE. Mr. Chairman, thank you for this opportunity to speak on behalf of my bill, H.R. 7254, and related legislation to establish an independent Maritime Administration.

No one is more familiar with the plight of the merchant marine than are the members of this subcommittee. The decline in our tonnage capacity at the same time that the tonnage of the fleets of the rest of the world has greatly expanded is familiar to all of you. The decline of the maritime industry is dangerous to our military posture in a time of national crisis and represents a real threat to our economic security. Let's look at the record:

Just 20 years ago, the United States had a merchant marine fleet of 5,000 ships-American-built ships-American-owned ships, American-manned ships; today we have only about 900 of these U.S.-flag vessels.

Just 20 years ago, American-flag shipping carried 40 percent of our seaborne export/import cargoes. Today, foreign-flag vessels carry about 93 percent of that cargo.

Just 20 years ago, some 80,000 sailors were able to find jobs on American-flag vessels. Today, those jobs have shrunk to less than 50,000.

Just 20 years ago, the United States ranked first in merchant shipping. Today, we're in sixth place.

Just 20 years ago, we were the world's leader in shipbuilding. At the start of this year we were in 14th place among the 15 leading shipbuilding nations. As of right now, we're not even in the top 15we're 16th.

This spring I was in Japan with our colleague, the Honorable Frank Clark, under the auspices of the Coast Guard Subcommittee. I visited the Ishi Kawa Jima Shipyard which is the largest in the world. Last year these yards produced the world's biggest ship-the 210,000 ton

Idumitsu Maru. The technology of shipbuilding in Japan has advanced to the assemblyline stage. Sections of ships are assembled in the yards and then moved to the ways where the entire ship is assembled. It only takes 22 months from the laying of the keel to the launching. In another 212 months the ship is delivered to the buyer. To construct a giant tanker in less than half a year is a fantastic accomplishment. This was an eye-opening experience for me, and forcefully brought home the necessity for upgrading our shipbuilding technology to insure our future ability to compete in the world market.

Back in January 1965, the President said in his state of the Union message that he was going to send a "new" maritime program to Congress shortly. Now, I don't know what the President means by the word "shortly" but I know that 22 years have elapsed and the promised program is yet to be received.

The President did appoint a Maritime Advisory Committee to study the situation. It was composed of representatives of management, labor, and the public. Unfortunately, once it completed its deliberations and made its extensive report to the President, nothing happened.

I am personally in accord with the Republican Party's 1967 state of the Union message, presented by the distinguished senior Senator from Illionos and the gentleman from Michigan who is minority leader of the House. In that message it was declared that

We must take prompt steps to rebuild the American merchant marine, already shrunken to one-fifth its former size, and regain our lost lead over the Soviet Union in modern shipbuilding. Shockingly, the United States is no longer a major maritime power. The Maritime Administration must be upgraded as an independent agency.

I am not saying that an independent agency, simply by its creation, will guarantee the building of a strong merchant marine. That fact was made abundantly clear in a recent, well-documented release from Mr. Joseph Curran, chairman of the AFL-CIO Maritime Committee. However, it can be said that the Department of Commerce has not devoted single-minded purpose and energy to the development of a first-class merchant marine. I have seen nothing to indicate the Department of Transportation would do any better. I feel the Congress exercised great wisdom last year in keeping the Maritime Administration out of the new Department of Transportation.

I strongly feel that an independent Maritime Administration is the best organizational form for incorporating the single mindedness of purpose and flexibility necessary for the development of a meaningful program of ship construction, of cargo preference and of operating assistance so that we can get back up there as a world maritime nation again.

By enacting legislation similar to my bill to bring about the establishment of the Maritime Administration as an independent agency in the executive branch, we will take a major step in the task of rebuilding our merchant marine, so that we can reestablish the United States as a major power on the seven seas.

The CHAIRMAN. The chair wishes to extend its appreciation for a fine statement.

The gentleman from Michigan, Congressman Charles Chamberlain, is scheduled to be heard next. Welcome to the subcommittee.

83-195-67-36

STATEMENT OF HON. CHARLES E. CHAMBERLAIN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MICHIGAN

Mr. CHAMBERLAIN. Mr. Chairman, I am grateful for this opportunity to present a statement in behalf of my bill, H.R. 366, which would provide for an independent Federal Maritime Administration.

As is well known to the committee, the merchant marine of the United States has suffered for a number of years from the lack of a forceful and active national maritime policy. While we have seen national goals established for our space program and for the supersonic air transport, and while we have seen rapid and effective efforts to implement policies for these and other transportation programs, we have noted a consistent lack of firm action in support of a national maritime policy.

It was Admiral Mahan who first postulated the broad concepts of national sea power. In his highly influential book, "The Influence of Seapower Upon History," Admiral Mahan pointed out how seapower, in its broadest and most complete sense, encompassed not just naval strength, but the entire sea potential of a nation. A cornerstone of national seapower is a nation's merchant fleet. The United States of America has all the attributes of a major seapower-but, Mr. Chairman, should we continue to allow our national maritime policy to continue to drift without direction, we will seriously erode this cornerstone of American seapower.

The basic legislative document relating to our Merchant Marine, as the distinguished members of this committee are well aware, is the Merchant Marine Act of 1936. Under the provisions of this act, it is declared policy of the United States to provide a merchant marine that will in fact be adequate to service the Nation's trade and defense. This act recognized that an effective merchant marine is a national asset. It contributes to the economy. It acts as a stimulant to the flow of goods and revenue in our international trade. It reduces the gold flow problem by retaining shipping revenues in the American economy. And it is a ready "fourth arm" of our nation defense.

Despite the unequivocal statement of national policy in the 1936 act, and despite the clear benefits of a strong and modern U.S. merchant marine, I submit, Mr. Chairman, that the implementation of our maritime policies have been inadequate.

At the present time, only about 8 percent of our foreign commerce is being carried in American ships. To be sure, foreign shipping-in peacetime will generally manage to carry our freight. But the implications of trusting your commerce to foreign interests in wartime or conditions of heightened international tension are grave. Already we have had cases of foreign ships refusing to take American cargoes to Vietnam.

As an assist in minimizing the gold flow, it is not encouraging to find that American ships are in such short supply that waivers must be granted to the requirement of Public Law 664 that half of our government cargoes must travel in American ships.

As an arm of our national defense, it is not reassuring to know that our merchant marine has had to resurrect over 160 elderly ships from our reserve fleet to help service our commitment in Vietnam. Our ship

ping lanes to Vietnam-straining to keep up the pace inmposed by that war-are not best serviced by 20-year-old ships restored from neglectful oblivion.

the

Looking to the future, we must view with concern the course of the Soviet merchant marine expansion program. Embarked on a vigorous, nationally directed program of shipbuilding and trade expansion, Soviet Union already has the capability to materially influence world shipping policies and freight rates. Within a few years this could be the controlling influence. The United States, by default, is allowing a major trade competitor to call the shots in international shipping.

If we are to avoid sliding into a position of absolute impotence in international shipping, and if we are to correct the steady drift toward an obsolete, second-rate merchant marine, we are going to have to have some strong leadership at the national level that is wholly committed to the interests of our merchant fleet. It is the lack of this leadership and the consequent lack of a strong, coordinated, and active national maritime policy-that has brought our merchant marine to its present state. Through the establishment of a strong, independent maritime agency that the missing leadership can be restored.

By the same token, the merchant marine as our "fourth arm of defense" will be able to meet our defense shipping commitments only through a strong national maritime policy. Demothballing old ships is no substitute for an active, defense-ready merchant fleet. A strong, independent maritime agency could assure us of such a defense-capable fleet.

Enactment of the proposed legislation now under consideration, to create such an independent Federal Maritime Administration, would give this Nation the strong federal voice that our merchant marine. needs. Establishment of such an Administration would be consistent with the Merchant Marine Act of 1936, the basic legislation on our merchant marine. It would be consistent with the needs and best interests of our country. And it would be consistent with the previously expressed will of the Congress.

Mr. Chairman, if we are to have a strong and active national maritime program, and if we want to see the implementation of vigorous efforts to develop and expand our faltering merchant marine, the administration's record of neglect and ineffective action must be reversed. This country needs a strong merchant fleet, and it needs a Federal agency attuned to the fleet's requirements. To avoid the continued shrinkage of our merchant fleet, to avoid a dependence on foregin shipping for our trade, to avoid running a fleet of aged hulks in the years to come, action is needed, and it is needed now. I strongly urge passage of this legislation.

An excellent statement, Mr. Chamberlain.

The next witness will be our good friend from Tennessee, the Honorable Richard Fulton.

STATEMENT OF HON. RICHARD H. FULTON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TENNESSEE

Mr. FULTON. These hearings on an independent Maritime Administration, Mr. Chairman, may rightly be regarded as the long-delayed start toward getting moving again as a nation in the full development of our shipping and shipbuilding resources.