ips and rely more on foreign-built vessels to carry our cargoes. Our ommercial fishing fleet also suffers from obsolescence and inability to ompete with foreign fleets. Russia, Red China, Peru, and Japan have nlarged and modernized their fishing fleets, thereby increasing the ize of their catches. As a result, the United States has dropped to fth place among fishing nations. While both our merchant marine and commercial fishing fleets have eclined, the demand for cargo-carrying ships and for fish products as soared. If we are ever to revitalize our merchant marine and comnercial fishing programs, if we are to share in the growing shipping nd fishing markets, we must act now. Not only must we update and xpand our shipbuilding programs, but we must also update and exband our administrative machinery to implement these programs. Today there is no single, coordinated approach to maritime programs, but rather there is considerable fragmentation and duplication of efforts. More than 20 Government agencies are involved in fishery and ocean programs. Moreover, these bodies must each compete for the budget dollar. L A Federal Martime Administration could not only provide the direction and coordination necessary to save and develop our maritime programs, but its creation would emphasize the seriousness and extent of the maritime problem-and that it requires top-level action. The CHAIRMAN. Thank you for a fine statement. Next I want to call on the gentleman from California, the Honorable Don Clausen. STATEMENT OF HON. DON H. CLAUSEN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA Mr. CLAUSEN. Mr. Chairman, I am pleased to offer my statement before this subcommittee on behalf of my bill, H.R. 9933, and similar bills. Ample testimony is being given here to point up the urgent need for an independent Federal Maritime Administration. It is now the responsibilty of this subcommittee and of this Congress to create such an administration. In 1949, the functions of the independent Maritime Commission were transferred to the Department of Commerce. Since then, a steady decline, unrelated to any particular administrative negligence, has been the fate of the merchant marine. I believe that this decline has been a direct result of the subordinate status of the Maritime Administration within the Department of Commerce. The merchant marine must face the numerous problems involved in international competition. In order to be the effective instrument of our international commerce and defense interests for which it was originally intended, it must be under the direction of an independent and aggressive administration which will work in this area. My bill will create an autonomous, decisionmaking Maritime Board to determine matters of policy. Two of its three members will constitute a ruling majority. It will be chaired by the Federal Maritime Administrator, who will have full responsibility for the execution of the Board's decisions. With such a strong and interested planning and executive body, this country can finally look forward to the development of a vigorous American merchant marine. 83-195-67- -31 In addition to creating an independent Federal Maritime Adminis tration, the merchant marine fleet must be expanded immediately. Quite frankly, I believe a crash program for modernizing our merchant fleet is necessary. We should be building the most technically advanced merchant ships now in readiness for the exploration of the vast resources of the sea, to prepare ourselves for the very important international trade and commerce requirements of the future. We are in a period of transition where international trade and economic competition will become a way of life. We must expand of the more-trade, less-aid philosophy of foreign assistance, where we can anticipate a return for our investors. Transportation of our goods throughout the world will plan a key role in our ultimate success. As a matter of face, I honestly believe the future peace and security in the world will be dependent upon this success and the adoption of this concept. Just as we build aircraft that will move people to all corners of the globe selling American goods and services, we must provide the most up-to-date shipping equipment to deliver these products. It is for these reasons that I want to see a dynamic and viable merchant marine encouraged by a responsive Federal Maritime Administration. Russia is far out in front of us in merchant-ship building. We've been sitting on our hands while Rome burns. Let's improve our balance-of-payments problem, our economic growth potential, and cure our future by passing this legislation designed to put some life into the sick merchant marine and shipbuilding industry. It will help both America and our free world friends. The CHAIRMAN. Thank you for your statement. Our next witness is Congressman Waldie. The committee welcomes you, sir. STATEMENT OF HON. JEROME R. WALDIE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA Mr. WALDIE. Mr. Chairman and members of the committee, I am here today to testify in favor of bills which will do much to rectify a great injustice in our Government. By reestablishing an independent maritime agency, H.R. 159 and my companion bill will put this Nation's maritime program back into its rightful position as one of our Government's most important activities. Our Government did the maritime industry a great injustice when it took away the Maritime Administration's independent status and buried it in the bureaucratic jungle of the Commerce Department. The members of this committee are working hard to restore mar time to its rightful position in our Government. You know that only when we have an independent Maritime Administration will the United States have a strong, modern merchant marine. In addition to revoking Marad's independence, the Government has been guilty of several other sins against this Nation's maritime indus try. Some of these have been sins of commission, and some have been sins of omission-the major one being the gross neglect our Govern nt has exhibited toward the Nation's shipping and shipbuilding ds. It is particularly shocking to consider our Government's neglect those segments of the American merchant fleet which have eschewed temporary profit advantages of foreign-flag registry and have conued to operate under the American flag without benefit of Goviment subsidy assistance. In many respects, the Government's policies have actually helped foreign-flag competitors of these unsubsidized ships. One of the Government's greatest sins of omission toward the nerican-flag merchant fleet has been its failure to curb the exodus ships from the American-flag registry to runaway-flag registry. In et, shortly after the war, Government policy actually encouraged is exodus. Under the Ship Sales Act of 1946, the United States ld at low cost a large number of ships built in American shipyards uring World War II. American companies bought many of these ips, then registered them under so-called foreign flags of convennce-primarily Panamanian and Liberian registry. The years following 1946 witnessed a tremendous growth in the erchant fleets registered under the Panamanian and Liberian flags. or example, in 1946, Liberia did not have a single merchant ship; v 1959, she had a flag fleet ranked third in the world and numberg over 1,000 vessels. American companies placed their ships under ese flags of convenience to escape American taxes, American wage ales, and American safety requirements. The tanker fleets of most of the major American oil companies are gistered under flags of convenience. I am sure the members of this ommittee remember the strange circumstances of the ill-fated Torrey 'anyon-a ship owned by an American company, leased to a British rm, registered under the Liberian flag, manned by low-wage seamen of iverse nationalities, and captained by an Italian national. Headlines around the world screamed, "American Ship Spills Tons f Oil on British Beaches." But that was not really an American shiphat was a runaway-flag ship. While it was owned by an American ompany, that ship didn't fly the American flag, she wasn't sailed by American seamen and officers, she didn't pay American wages or taxes, nd she certainly didn't comply with American safety regulations. Yet around the world, people thought an American ship was poluting the seas and beaches of England and France with oil. That was one of the results of the Government's failure to curb unaway flags. A more shocking result of this failure has been the decline of the American-flag tanker and tramp-carrier fleet due to runaway-flag competition. While these runaway ships don't fly the American flag, don't hire American seamen, and don't pay American taxes, they still call at American ports. They steal away cargoes from American-flag ships which do hire American seamen, which do pay American wages and American taxes, and which do comply with American safety regula tions. When a runaway-flag ship carries goods to or from an American port, the dollars represented by those goods flow out of the American economy and contribute to a worsened American balance-of-payments situation in the same manner as when American goods are carried in foreign-flag ships owned by foreign nationals. The American owners of that runaway ship don't pay taxes into the U.S. Treasury on the income received from those goods. An independent Maritime Administration with a free hand in administering the maritime laws of this Nation will have a better op portunity to curb the depredations of these runaway-flag bandits. And independent Maritime Administration will not neglect the needs of the unsubsidized segments of the American merchant fleet which must compete with runaway-flag operators. An independent Maritime Administration will be able to plan for the long-range development of American-flag shipping and Amer can shipping to enable them to compete on a par with their foreign competitors. I pledge my support to the efforts of this committe to secure passage of H.R. 159 and look forward with great hope to the time when we will have an independent Maritime Administration which will give the maritime industry of the United States the attention it deserves. The CHAIRMAN. The Chair thanks you on behalf of the committee for an excellent presentation. The gentleman from Pennsylvania, Mr. Rooney, will be our next witness. STATEMENT OF HON. FRED B. ROONEY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF PENNSYLVANIA Mr. ROONEY. I should like to take this opportunity to express my views on the pending legislation to establish an independent Feders! maritime agency. I would first like to express my high regard to this committee for its great effort in educating the public on the problems confronting our merchant shipping program and the necessary solutions. A task suc as this is always difficult, but I am confident that as a result our merchant marine and our Nation will benefit. I think at this time we all realize that our merchant marine indus try needs help. The U.S.-flag merchant fleet numbered more than 5,000 ships after World War II. Today, there are barely 900 rese in our privately owned merchant fleet. After the war, 80,000 sailors were employed by our merchant fleet. Today, there are less than 000 jobs for our seamen. By the end of the war, the United States ranked first among the maritime nations of the world. Today, we have dropped to sixth place and the fast-developing Soviet mercha fleet may soon push us back to seventh rank. And based on the nee to replace a merchant ship after 25 years of life, a careful review of the present elements of our merchant fleet segments indicates tha there will be a shocking reduction in the number of ships under years of age between now and 1972. I have carefully reviewed the various proposals offered to strength our merchant marine and it is my judgment that this could best be a complished by the creation of a separate and independent Marit Administration. There is no other remedy. I believe that our marit:* rogram can best be administered through such an independent agency hich understands the merchant marine needs, which is in sympathy ith the merchant marine needs, and which would continue to devise program that will meet the requirements of a strong and growing merica. Maritime supremacy is vital to us in both times of peace and times f world crisis. That is why I have joined in cosponsoring this legisation. Again, I am confident that the fine work of this committee will ead to enactment of this legislation. The CHAIRMAN. I certainly wish to extend our appreciation for your ine statement, Mr. Rooney. We have one more witness, Mr. Ralph E. Casey, President of the American Merchant Marine Institute. Mr. Ralph Casey. STATEMENT OF RALPH E. CASEY, PRESIDENT, AMERICAN Mr. CASEY. Mr. Chairman and members of the committee, my name s Ralph E. Casey, president of the American Merchant Marine Intitute. Although in my previous appearances before this committee I have outlined the nature of our organization, I want to stress the fact that our membership is composed of 37 companies operating ships of all types-passenger, dry cargo, tankers, and bulk carriers. Eight of our Companies receive operating-differential subsidies, but all the rest are in the nonsubsidized category. You will recall that I testified before this committee last year on similar bills, and at that time favored the enactment of legislation. to establish the Maritime Administration as an independent agency in the executive branch of the Government. The most compelling reason I advanced for this view was that it seemed a necessary first step in the long-delayed effort to revitalize the American merchant marine. You will recall, too, I am sure, that when these hearings took place, last year, there were many who felt that we were fighting a losing battle to keep Maritime out of the Department of Transportation. But we were desperate. We had no program. The administration seemed unwilling to recognize the desperate situation in which we found ourselves. All that had transpired was the submission of two reports the task force report on the one hand, and the report of the President's Advisory Committee on the other. The institute felt that a sounder approach could be found than was contained in either report, but no one in Government seemed sufficiently interested to find a solution. I has long been my view, and the view of my principals, that the real problems facing the merchant marine can be solved by an administration and a Congress working together to implement with necessary funds a sound maritime program based on our well-established maritime policy, and that this can be accomplished by a Maritime Administration located almost anywhere in the executive branch of the Gov ernment. |