'his is in essence what Mr. Boyd now recommends. AMMI Position: Subsidy aid should be extended to dry bulk carriers for international trade. Mr. Boyd agrees. A. AMMI Position: The principle of essential trade routes for liner services uld be continued, although some increased flexibility should be considered. Mr. Boyd so recommends. '. AMMI Position: Mandatory reservations to American-flag ships of at least -half U.S. Government-sponsored cargoes should be continued. Mr. Boyd agrees. 3. AMMI Position: Rate differentials on Preference cargoes should be phased : insofar as practicable. Mr. Boyd so recommends. ). AMMI Position: Flags-of-Necessity ships are no threat to American-flag ips and would be an asset to the United States in the event of an emergency. This is understood to be Mr. Boyd's view also. 10. AMMI Position: Any Government allocation of commercial cargoes to aerican-flag ships should be opposed. It is understood that this is also Mr. Boyd's view. Now, it is true that in this same report it was recommended by AMMI that ne Maritime Administration should be reestablished and operated as an indendent agency of the Government." However, as is well known to all principal representatives of labor and manement, as well as to each member of your Committee, we were, in a sense, a trading position at the time this report was drafted. We were desperate r a new maritime program. And since no such program was forthcoming from e Maritime Administration as part of the Department of Commerce, it was ped that pushing for independence for the maritime agency might stir "the owers that be" out of their lethargy. Then, early this year, Secretary Boyd outlined a program which, as indicated Dove, coincided in all its principal features with the views of AMMI. At this int, recognizing as we long have that the location of the maritime agency as of insignificant importance in relation to the existence of a sound progressive rogram, we readily accepted the condition that we support the transfer of aritime activities to the Department of Transportation. Far from being presred, we did as anyone would do in a trading position-since the terms were ompletely acceptable, we settled. In view of the rather extensive discussions which took place with respect to pressure tactics" in connection with the present position of the Institute on e bills to create an independent maritime agency, I respectfully request that nis letter be made a part of the record of your hearings. Sincerely, RALPH E. CASEY, President. (Whereupon, at 12:20 p.m., the committee adjourned, to reconvene t 10 a.m., Wednesday, July 26, 1967.) NDEPENDENT FEDERAL MARITIME ADMINISTRATION WEDNESDAY, JULY 26, 1967 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON MERCHANT MARINE OF THE Washington, D.C. The subcommittee met at 10:15 a.m., pursuant to recess, in room 334, Longworth House Office Building, Hon. Edward A. Garmatz chairman of the committee) presiding. The CHAIRMAN. The meeting will please come to order. Today we are continuing our hearings on H.R, 159 and other bills o authorize the establishment of an independent Maritime Adminisration. From the outset of these hearings, it has been clear that disussion of the merits of the legislation inevitably involved discussion of a general merchant marine program. The testimony we have received so far has been very thorough and enlightening. The various points of view which have been, and will be, presented to us, will be most helpful in guiding us to informed conclusions upon which we can proceed to develop a program to revitalize the American merchant marine. I am delighted to call on our colleague from Connecticut, who is a valuable contribution to the Merchant Marine Committee, the Honorable William St. Onge. STATEMENT OF HON. WILLIAM L. ST. ONGE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CONNECTICUT Mr. ST. ONGE. Mr. Chairman and distinguished members of the "ommittee, I wish to thank you for this opportunity to present my views on my bill, H.R. 2142, and similar bills now under consideration before your committee. These measures call for the amendment of title II of the Merchant Marine Act of 1936 in order to create an independent Federal Maritime Administration. As the sponsor of one of these bills, I am especially grateful to you for scheduling these hearings. The legislative intent of Congress in passing the Merchant Marine Act of 1936 was to create an American-built, American-owned, and American-manned merchant fleet adequate to transport a major percentage of our foreign trade and to be readily available for military needs in time of war. To administer this program, Congress estab lished an independent and autonomous U.S. Maritime Commission. From 1936 to 1950 a long-range shipbuilding program was initiated by the Commission. This sought to provide 500 new ships within 10 years and encouraged development of the type "C" cargo vessel and the construction of the passenger liner SS America. Vessels built during this 14-year period still provide the backbone of the US-flag flees. Through various reorganizations the Maritime Administration was placed within the Department of Commerce, and final authority for the development of the merchant marine was turned over to the Secre tary of Commerce. Without independent authority the Maritime Administration was forced to compete with the other programs administered by the Department of Commerce. National policy needs have had to be sublimated to budgetary considerations in determining maritime policies. The result has been a continuous decline in the state of our merchant marine to a point where today our economy and to a considerable extent also our national security are adversely affected. The deterioration of the U.S. privately owned merchant fleet is clearly illustrated by the following comparisons with the world fleet during the years 1951 through 1965: (1) The world fleet increased by over 62 percent in number while the U.S. privately owned fleet decreased by over 26 percent. (2) The world fleet total aggregate deadweight tonnage increased by 156 percent while the U.S. fleet decreased by 2.7 percent. (3) Passenger-combination ships declined in number in practically every country; however, the world fleet decreased by only 1.1 percent while the U.S. privately owned fleet was reduced by 41.4 percent. (4) The number of freighters rose by over 51 percent on a worldwide basis, but the United States showed a drop during the same period of over 17 percent. (5) The world tanker fleet went up by 64.7 percent in number, while the U.S. tanker fleet showed a decrease of 38.3 percent. (6) The only classification in which the United States registered a gain was in bulk carriers, yet here the U.S. increase was 11 percent in number as against a world increase of 295 percert. Considering the U.S. fleet as a whole, including Government-owned and the national defense reserve fleet for the same period, there was a drop of 34 percent in the number of ships and a decrease of 26 perven* in total deadweight tonnage. The importance of maintaining a strong American merchant fleet may be judged by the fact that 98 percent of the men and supplies currently being sent to Vietnam are transported by ship. In addition, a modern and dynamic merchant marine would provide an excellent opportunity to recuperate our international balance-of-payments position. Mr. Chairman, I urge you to report favorably H.R. 2142 or a similar bill and to recommend its immediate passage. By so doing, I believe we can insure the revitalization, modernization, and growth of our merchant marine. This will make possible for our merchant marine again to play a vital role in our Nation's economy and security. The CHAIRMAN. The chair is grateful for this fine statement. Next, we have another member of this committee, the Honorab Henry C. Schadeberg. STATEMENT OF HON. HENRY C. SCHADEBERG, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WISCONSIN Mr. SCHADEBERG. Mr. Chairman, I am very proud to have an opportunity to testify before you in behalf of the bill which I have introduced to establish the Maritime Administration as a separate, independent Federal agency. The Maritime Administration was established in 1950 under the Department of Commerce. It was directly responsible for administering merchant marine and shipping statutes to aid in the development, promotion, and operation of an American merchant marine. Since its inception 17 years ago, this agency has operated within the confines. of the limits set for it by Congress under the guidance of the incumbent administration. The continuing decline of the merchant marine industry in these years cannot be blamed directly on the Maritime Administration-yet, the facts speak for themselves: 80 percent of today's American merchant marine was built more than 20 years ago. It is obsolete, inefficient, and inadequate. Among the world's merchant fleets, the American fleet of 1,090 ships has dropped to fifth place; in shipbuilding, this country now ranks an ignominious 14th. Our one claim to maritime glory the U.S.S. Savannah, the world's first nuclearpowered merchant ship, was destined for oblivion-mothballs-until just last month when this commitee's recommendation to the House of Representatives that it be kept afloat were adopted-and, let me say, without the assistance of the Maritime Administration. The economic and industrial consequences of our faltering maritime policy are serious in themselves. Yet, the international significance of this policy must not be overlooked. While this country's attention to its merchant fleet has dwindled, the Soviet Union has quietly but determinedly enlarged and expanded its own fleet until it now floats 1,422 vessels, most of which are comparatively new. Russian shipyards are so busy building ships for their own commerce-and Russian ships carry 75 percent of the Soviet Union's foreign commerce that some of their shipbuilding contracts have had to be placed with free world shipyards. And let us not be misled into thinking that these ships service only Iron Curtain ports: of 600 ports in 91 nations, only 13 are in Communist countries. While the Soviet fleet grew by 137 ships in 1966, only 13 new ships were added to the American fleet last year. Attention was focused on our maritime policy last year when efforts were made to transfer the Maritime Administration to the newly created Department of Transportation. Counterefforts to establish an independent Maritime Administration resulted in a compromise, allowing the Maritime Administration to remain in the Department of Commerce. This committee, however, is well aware that, under these = circumstances, our maritime policy is not going to change measurably. And the times demand change. An independent Maritime Administration which can innovate, initiate, and execute maritime policies in keeping with the needs of this Nation, in its domestic as well as in its foreign responsibilities, is essential now. The task is before us. Let us perform it expeditiously and |