Mr. DREWRY. I have very great difficulty in seeing these various points that are in the so-called Boyd program which so far I can't get my teeth into. I see the areas that he wants to talk about, but I cannot see why we have to continue falling behind while we wait for a bunch of more or less unrelated things to get together.

Mr. SCHULTZE. I do not believe and I do not think Secretary Boyd believes that they are unrelated. I believe that is the key. They are

not unrelated.

Mr. DREWRY. On the question of the interface, I was talking this morning about the close relationship between the transportation modes. It seems to me that perhaps the transportation message got things in reverse, that instead of positively keeping the regulatory agencies out of some kind of coordination into a single department that it should have been the other way around. You mentioned containerization just a minute ago. Containerization is the finest example of the revolution that has taken place in the world shipping, and containerization means that for maybe the first time we are going to see a pipeline approach possible for break-bulk goods so that the guy who put his manufactured typewriters or tractors or whatever in a container in Denver will pay a single price and over it will go, and you won't have to worry about it.

It may go intermodal, but this seems to me to get more into the field of regulation than anything else, so that the creation of a single promotional department may possibly hinder the modes in their further development through the competition that there would normally be not only between the modal manufacturers and carriers but the modal Government agencies. What is going to happen when the containerization comes a little further along and the problem of through rates and things like that comes up? Where can a man go to find out just how much it is going to cost him on a single bill of lading?

Mr. SCHULTZE. Let me first plead some ignorance.

Mr. ASHLEY. You better plead it briefly. I have to get to the floor

and vote.

Mr. SCHULTZE. I will have to quickly plead ignorance on the details. It seems to me that having all transportation modes in one department. you can have a central place where proposals and presentations and briefs could be presented to the various regulatory commissions to get at this.

Mr. ASHLEY. Mr. Schultze, you made a perfectly splendid witness. I can't think of a more articulate spokesman for the administration than you in your testimony before us today. You may not have persuaded each and every member of the committee, but I can assure you that the committee has great respect for the candor, honesty, and splendid cooperation involved. Thank you very much.

The committee will stand adjourned until Monday at 10 o'clock. (Whereupon, at 4:40 p.m., the subcommittee recessed, to reconvene at 10 a.m., Monday, July 17, 1967.)

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON MERCHANT MARINE, OF THE

COMMITTEE OF MERCHANT MARINE AND FISHERIES,

Washington, D.C. The subcommittee met at 10:20 a.m., pursuant to recess, in room 1334 Longworth House Office Building, Hon. Edward A. Garmatz (chairman of the committee) presiding.

The CHAIRMAN. The committee will please come to order.

The meeting today is a continuation of hearings started last week on H.R. 159, and similar bills, to amend title II of the Merchant Marine Act, 1936, to create an independent Federal Maritime Administration, and for other purposes.

Thus far we have heard from a number of Members of Congress from among the 104 authors-testifying in favor of the legislation. On Thursday of last week we heard from the Honorable Alexander Trowbridge, Secretary of Commerce, and Honorable Charles L. Schultze, Director of the Bureau of the Budget.

Their testimony was in opposition to the legislation.

We hoped to hear from the Honorable Alan S. Boyd, Secretary of the Department of Transportation, but unfortunately, time did not permit his appearance.

Due to conflict in Mr. Boyd's schedule, he will be unable to appear until next week.

There are several major labor and management witnesses who wish to be heard, as well as several more Members of Congress.

We will start off this morning with Congressman Lloyd Meeds of the State of Washington. Congressman Meeds, you may proceed in any way you see fit.

STATEMENT OF HON. LLOYD MEEDS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON

Mr. MEEDS. Mr. Chairman, I am pleased to add my statement of support to the proposal for creation of an independent Federal Maritime Administration. I, along with many other Congressmen, have sponsored such legislation.

I have done so because of my strong concern for the Nation's merchant marine and because of the ever-increasing danger to the maritime industry.

It appears obvious and certain that the maritime industry-both shipping and shipbuilding contributes positively to the national

economy. And it seems just as certain that the merchant marine is essential to the national defense.

For too long our merchant marine has been neglected. The Federal Government has been reluctant to more fully finance ship construction and ship operation. Our Nation's merchant marine has fallen from first to sixth place in terms of world shipping. The Nation has dropped from first to 15th in terms of shipbuilding.

This rapid decline may well be accelerated even more if our dependence for ship construction is shifted to foreign shipyards, as has been suggested.

Construction of U.S.-flag vessels in foreign shipyards would mean a loss of jobs not only for American shipyard workers but for dozens of allied industrial workers here who provide the raw materials and the finished equipment for ships.

Foreign construction of American vessels quite possibly could fall under a cloud in the event of further world crises. Thus the United States might not be able to count on production of vessels in foreign yards just when the need for those vessels would be the greatest.

None of us should have to be reminded of the role of the American merchant marine in the two World Wars and the Korean conflict. The U.S. merchant marine or what is left of it-is struggling with a mighty task during the current Vietnamese conflict.

We should not hamstring our fighting men overseas; we should not endanger our future defense, and we should not add harm to our domestic economy.

Your committee, Mr. Chairman, has an enviable record of concern for the merchant marine. I sincerely hope the full Congress will match that concern and act to guarantee a long-range program for growth of the merchant marine. I feel convinced that necessary to such growth is legislation aimed at Maritime independence.

Formation of an independent Maritime Administration would be, in effect, a rifle-shot approach rather than a shotgun blast at the problems of the American merchant marine. This zeroing in on merchant marine ills could accomplish much more in a shorter period than any other remedy.

Unless attention is focused on merchant marine weaknesses, those deficiencies will increase. Instead of scuttling our merchant marine, we should put a strong independent commission skipper at the helm and order full steam ahead.

Thank you.

The CHAIRMAN. Thank you, Mr. Meeds, for giving your time to appear before the committee. Are there any questions?

Mr. MEEDS. Thank you.

The CHAIRMAN. We will now hear from your colleague, Congress man Charles H. Wilson of California, the author of the bill H.R. 1446. Mr. Wilson.

STATEMENT OF HON. CHARLES H. WILSON, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF CALIFORNIA

Mr. WILSON. Mr. Chairman, I appreciate this opportunity to make a brief statement to this committee relative to H.R. 159, introduced by the distinguished chairman, and to my own bill, H.R. 1446, calling

for the establishment of an independent Federal Maritime Administration.

As this committee and the Congress are well aware, these are just two of more than 100 identical measures which have been introduced thus far in this session of the 90th Congress seeking to put our maritime program back on its feet by removing it from beneath the layer on layer of bureaucracy where it has lain for a decade and a half.

I recognize that this committee held hearings during the 89th Congress on a measure to accomplish the same goal, and that a bill bearing the name of the late distinguished chairman was reported out. Unfortunately, like so many other good measures, this one was caught up in what we call "adjournment fever," and the Congress never had the opportunity to work its will. Had he been able to vote on this measure near a year ago, I am confident it would have passed, and we would be much further along the road toward the revitalization of our merchant marine.

The fact that this committee is once again holding hearings on this bill is good, for it will help to dramatize for the American people precisely what the sad state of our merchant marine is, and how its one hope for survival rests in giving it administrative freedom.

In a larger sense, however, every hearing that this committee has held in my memory has implicitly done the same thing-has put the American people on notice that we have slipped, and slipped badly, in terms of world maritime strength.

We have sunk so low, in fact, that only by stretching the imagination can we claim to be a maritime power of any consequency whatso

ever.

This was not always the case. Back in 1936, there was an administration and a Congress which clearly recognized the need for a strong and vital merchant marine-one that would be citizen owned, citizen built, and citizen manned. They created an independent agency-and I emphasize the fact that it was independent-to administer the affairs of our merchant marine.

During the lifetime of this independent agency, the fortunes of our merchant marine prospered-and our Nation profited from this investment, both in terms of our commerce and our national defense. We built more ships in American yards, we carried more tonnage in American ships, we provided more jobs for American seamen.

Then in 1951, during one of the many reorganizations that have taken place and that still take place-in Government, the Maritime agency lost its independent status and was put in the Department of Commerce. And the fortunes of our merchant marine went into an almost instantaneous decline.

Now, there is no evidence that this was intended. I do not believe that any of the administrations which have neglected the merchant marine over the years-and that includes, I am sorry to say, every administration since 1950-have done so with any conscious effort to damage our commercial shipping and shipbuilding, or to weaken our national defense.

Quite the contrary. I think that our national administrations have thought that this sort of streamlining of Government functions was good, and that it could be accomplished without jeopardizing the merchant marine. Unforunately, they were in error.

But this does not mean that, as a Nation, we have to continue to compound the error of all these years. As a matter of fact, one of the great hallmarks of our democratic society is the fact that we are able to undo past errors.

This is what the pending legislation will do. It will rectify a great wrong that has been done-a wrong which has endangered our defense, that has eroded our prestige, and that has caused economic hardship for the shipping industry and for our great shipbuilding yards. I realize that this administration seeks to solve the problems of our maritime industry by putting the Maritime Administration into the new Department of Transportation. But this suggestion proves that, once again, the executive branch misunderstands the nature of 1 maritime.

It is not like a domestic mode of transportation-our railroads and our trucking industries, for example-which compete among themselves, but not with foreign nations. Nor is it like the airline industry, which does the vast bulk of its business within the geographical confines of the United States, and which does only a small percentage of business in competition with airlines of other nations.

Maritime is unique in the respect that it is the only American industry which competes exclusively with a like industry in a foreign country. And maritime is unique in that it is the fourth arm of our national defense.

And if anyone has any doubt about that, he need only look at the record of Vietnam-where 98 percent of all war material and supplies are arriving in South Vietnam by ship, and where two-thirds of the hundreds of thousands of American fighting men likewise were transported by ship.

No, Mr. Chairman, putting Maritime into the Department of Transportation would solve nothing. The same problems that now exist with this vital agency buried in the Department of Commerce would still exist, for, by the very nature of things, Maritime would be buried-just as buried-in the Department of Transportation.

Martime independence is the only answer-as these more than 100 bills indicate. I think that the record number of bills on this subject testifies to the fact that the temper of the times demands that we actand act with dispatch-to create a totally independent Federal Mari time Administration as the first, and most vital, step toward creating, once again, a first-rate maritime status for the United States.

I know this committee will give prompt attention to this legislation and I am confident that the Congress will follow suit, so that we can get down to the business of raising the American flag proudly again on the oceans of the world.

The CHAIRMAN. Mr. Wilson, your statement will be very helpful

to the committee.

Are there any questions?

Thank you.

Mr. WILSON. Thank you.

The CHAIRMAN. We will now hear from your colleague from California, Mr. Phillip Burton.

You may proceed in any fashion you choose.