Passenger and combination liners___. Dry cargo ships: Recent construction: Mariners New C-3 New C-4 Others Total World War II and earlier types: C-1 C-2 C-3 C-4 including 12 converts Victories Liberties Other converts and miscellaneous Bulk carriers including 25 T-2 tankers and 11 Liberties... Subtotal Total Tankers Recent construction World War II construction...... Total Total ocean fleet----- NOTE. The above does not include our Great Lakes fleet, which has an average ap more than 35 years. While a limited number of the World War II types have been reconstructe and their utility will exceed 25 years, by far the largest segment of this group rapidly approaching the end of their useful life. Now let us examine what happens in the next few years-assuming no chang in National policy. Chart I-which is appended to this statement-indicates graphic form the rapid decline of our effective maritime strength in future years In Chart II, we show similar data at the end of two year periods by categories of ships. From these data It is abundantly plain that unless we have a new maritine policy now, we reach the period of National peril in the early 1970's and the unless reversed, this situation continues and even worsens in the 1980's. More than any other single factor, this striking weakness in the maritime capability of the United States will limit our ability to apply effectively the full measure of our military and economic strength as rapidly and as forcefully as may be required by future events. Herein lie the seeds of National disaster! We stand before the world an economic and military colossus with feet of clay! Last year CASL testified before the House and Senate Government Operations Committees on the subject of whether or not the Maritime Administration should be included in the Department of Transportation. At that time our position was that we would prefer an independent civil maritime agency but that if the Congress decided to transfer Marad to the new Department of Transportation we would support this approach if two conditions were met. These conditions were, first, the concurrent adoption of a vigorous new national maritime policy; and second, that the transfer be accompanied by procedural organizational requirements, sufficient to insure stature for the Maritime Administration, and independence for the Maritime Subsidy Board in handling quasi-judicial proceedings. The Senate version of the Department of Transportation bill, S. 3010 as amended and passed by the Senate, included the procedural and organizational recommendations which CASL had suggested. As you know, of course, the House voted against the transfer of Marad to the Department of Transportation. Throughout the first half of this year, we have been continually reviewing the desirability of an independent Maritime Administration versus the benefits in transferring the agency to the Department of Transportation. INDEPENDENT MARITIME AGENCY VERSUS TRANSFER OF MARAD TO THE DEPARTMENT OF TRANSPORTATION Over the years, our member companies have had experience with almost all forms of Government administration, independent agencies (such as the former U.S. Maritime Commission), semi-independent boards (such as the Federal Maritime Board) and bureaus (the present Marad/MSB setup). Some have worked well-others have not. Our experience has been that effective support from the executive department and the Congress coupled with competency at the administrative agency is far more important than the form or organization. If any one of these essential elements-congressional and Executive support and administrative competency-is lacking, then no matter what the form of organization, policies will fail and programs wither. Several specific illustrations may be helpful: It is often assumed that the deplorable state of much of our tramp and dry and liquid bulk cargo fleets results from statutory inadequacies. While it is true that additional legislation providing for operating subsidy would be desirable, the fact remains that the 1936 act is broad enough to provide Government assistance for the reconstruction of these fleets. Appropriations for shipyard subsidy have not been requested from the Congress and authority has been administratively withheld. As a result, oceangoing tramps, unsubsidized liners, and bulk carriers under the U.S. flag may virtually disappear from our foreign trade during the next 5 years. The fact that construction differential subsidy authorized by the present statute has been consistently with 83-195-67- -22 held from these operators did not result from the form of the admits best po tration or organization of the Maritime Administration. Section 212 of the 1936 act has for over 30 years authorized the Mer Maritime Administration, in all of its various forms, to work with M industry and Government agencies and exporters and importers to fina secure preference for U.S.-flag vessels in the movement of cargoes and to to promote the general welfare of the U.S. fleet. No amount of GoNET ernment aid can substitute for adequate cargo movements and yet ther section has never been effectively implemented and will not be until the executive department provides competent administrators instructed o to carry out existing law. The 1936 act presently provides for vigorous maritime research a development programs; despite this, virtually every significant tech nological advance incorporated in the fleet has come directly from industry. A vigorous and successful maritime research and development program does not depend upon the form of organization but upt vigorous administration support. I could go on at length relating problems that do not result from statutory inadequacies but from the failure to request and appropriate sufficient funds; the failure to implement existing laws; the failure t appoint competent and vigorous administrators; the failure to e courage business incentives and eliminate redtape, and so forth. While this is not to say that the law cannot and should not be it proved, it is to point out that the location and form of organizat of the Maritime Administration has not been the essential element the past. We do not believe that location and organization will be the essentia elements in the future; however, close coordination of maritime plar ning in an overall intermodal transportation program will be important. As President Johnson said in his March 2, 1966, message on trans portation to the Congress, "*** America today lacks a coordinate: transportation system that permits travelers and goods to move cor veniently and efficiently from one means of transportation to another using the best characteristics of each ***. We must coordinate t executive functions of our transportation agencies in a single cohere instrument of Government. Thus, policy guidance and support each means of transportation will strengthen the national economy a whole. In view of the rapidly developing intermodal nature of oce transportation and conditioned on a new maritime policy-one wh has the support of the national administration and the Congress we believe that the Department of Transportation is the logical preferred location for the Maritime Administration. According CASL endorses the proposal to transfer the Maritime Administr tion to the Department of Transportation. In order to assure continuity of experience and independence development of policy, we propose a creation of a statutory beani three members--one of whom would be designated as Chairman Maritime Administrator. The appointments should be made by t President, subject to the advice and consent of the Senate. The terms of office should be staggered to provide continuity. The should be a division between political parties. In order to obtain " best possible men the Chairman should rank with an Under Secretary and the members with an Assistant Secretary. Members other than the Chairman would not be employees of the Maritime Administration. The decisions of the Board should be final unless appeals are taken to the Secretary of Transportation or to the courts. The right of private parties to take appeals to the Secretary should not mean that the Secretary would have an independent right to review decisions of the Board. This is undesirable, and should be specifically denied. To obtain personnel best qualified to serve on the Board, we recommend that there be no prohibition against the appointment of persons who are presently active in the maritime field and legislative changes should be made to permit this. Other means of solving the so-called conflict-of-interest problems should be provided. NEW NATIONAL MARITIME POLICY CASL has conditioned its endorsement of transfer of the Maritime Administration to the Department of Transportation, or for that matter, to an independent agency, on the concurrent adoption of a new maritime policy that will provide for a revitalization of all segments of the U.S. fleet. We believe that any other course would leave MARAD unable to meet the challenge of our fleet's decline during the next 5 years. We have carefully reviewed the recommendations made by Secretary Boyd and, while they are less than perfect from the point of view of the CASL lines, we believe that if effectively implemented they would meet the essential needs of all segments of the fleet. It seems to us that the overall policies proposed by him represent some tremendous strides in meeting the main problems we face. He has proposed more than doubling CDS appropriations for at least 5 years. Combined with matching funds from the industry, this would permit the construction of about 30 ships per year that would be the equivalent of 40 to 50 C-2-type vessels. He has proposed strengthening the whole system of preferential routing of Government cargoes on U.S.-flag ships. While only last year the whole system of cost parity that has succeeded in building the most viable segment of our merchant fleet was threatened, this system is not to be strengthened and extended. Both construction and operating subsidy for the presently unsubsidized segments of the fleet, is an element of the Boyd proposed program. In summary: We believe that the new merchant marine policy proposed by Secretary Boyd meets the essential requirement of all segments of the U.S. fleet. We believe that in view of the need for administration and congressional cooperation on maritime programs, MARAD should be transferred to the Department of Transportation-subject to the organizational safeguards which were included in S. 3010 last year and expanded in this statement. We believe a new national maritime policy must be enacted and implemented this year if the critical decline of our fleet over the next 5 years is to be arrested and reversed. We have developed substitute language to implement the CASL proposals and respectfully request permission to submit this language for consideration by this committee. This substitute language si tached to my statement. We are hopeful that everyone in government and in industry w is aware of our maritime needs will cooperate in supporting the only viable new policy and program that appears to have any chance of immediate implementation. We believe that this can and will be dete (The substitute language and the charts mentioned, follow here with :) A BILL To amend title II of the Merchant Marine Act, 1936, to create the Feuer Maritime Administration within the Department of Transportation, and for the purposes Be it enacted by the Senate and House of Representatives of the United State of America in Congress assembled, That this Act may be cited as the "Fele Maritime Act of 1967". SEC. 2. Section 201 (a) of title II of the Merchant Marine Act, 1936, is amets to read as follows: "SEC. 201. (a) (1) There is hereby established within the Department Transportation (hereinafter in this subsection referred to as the 'Department an agency to be known as the Federal Maritime Administration (hereinafte in this subsection referred to as the 'Administration'). "(2) There shall be at the head of the Administration a Federal Mariti Administrator (hereinafter in this subsection referred to as the 'Administrati who shall be appointed by the President, by and with the advice and coneen' the Senate, for a term of four years, except that the term of the Administra first appointed shall expire on June 30, 1969. Each Administrator appointed fill a vacancy shall be appointed only for the unexpired term of his prede sor. Upon expiration of his term of office, each Administrator shall contir serve until his successor shall have been appointed and shall have quali The Administrator shall have the administrative rank of an Undersecretary of *** Department and shall receive the compensation prescribed for this rank. (3) There are hereby transferred to and vested in the Secretary of Tra portation (hereinafter in this subsection referred to as the 'Secretary') a tions, powers, and duties of the Secretary of Commerce and other offices and ficers of the Department of Commerce under this Act and under the followlaws and provisions of law: "(A) The Merchant Marine Act, 1920 (41 Stat. 988: 46 U.S.C. SG1 et 5*, "(B) The Merchant Marine Act, 1928 (45 Stat. 689; 46 U.S.C. 891 et s "(C) The Shipping Act, 1916 (39 Stat. 728: 46 U.S.C. 801 et seq.) "(D) The Merchant Ship Sales Act of 1946 (60 Stat. 41; 50 U.S.C. AS 1735 et seq.); "(E) The Maritime Academy Act of 1958 (72 Stat. 622; 46 U.S.C 1> et seq.). (F) The Act of June 12, 1940 (54 Stat. 346; 46 U.S.C. 1331 et seq. "(G) The United States Fishing Fleet Improvement Act (74 Stat 21. 46 U.S.C. 1401 et seq.). "(H) The Act of September 14, 1961 (75 Stat. 514; 46 U.S.C. 11266-1- 142). "(L) Reorganization Plan No. 21 of 1950 (64 Stat. 1273; 46 USC 1 note). "(M) Reorganization Plan No. 7 of 1961 (75 Stat. 840; 46 U.S.C. note). "(N) Reorganization Plan No. 6 of 1949 (63 Stat. 1069; 46 U.S.C. note). "(4) There are hereby transferred to the Administrator and it shall be duty to exercise the functions, powers and duties of the Secretary relating the Merchant Marine transferred under subsection (a) (3) of this section, ex such as the Civil Maritime Board shall exercise in accordance with Sec 3(a) of the Federal Maritime Act of 1967. |