As I have indicated, at least with respect to the exclusion of the aritime Administration from the Department of Transportation, d more particularly as to the drastic need of a maritime program, July 1966 all segments of the maritime industry, including manageent and labor, had reached consensus.

In proof of this I refer you to the hearings held by your Subcomittee on the Merchant Marine on July 20-29, 1966, entitled "Inpendent Federal Maritime Administration," Serial No. 89-27. In my long experience in the maritime industry I do not remember y occasion or any situation which produced such perfect consensus. was dictated by history and experience, by the ineffective dawdling the Maritime Administration, by the devious tactics of Under ecretary Boyd, and by the complete failure of the administration to rmulate a maritime program.

We had wallowed in a bureaucratic morass of indecision ever since e Korean war. We had lost almost two-thirds of our merchant fleet. articipation of our merchant marine in the bulk-carrying and tanker gments of the industry was minimal. Our fate had been arrived at y bad judgment and poor leadership.

We had been told, for example, that we had no need for passenger ips, and then the industry was summoned by the Defense Department O solve the problem of how to get Armed Forces to Cuba and later to Tietnam. Owners of costly supertankers constructed to meet the Suez risis found themselves obliged to compete for the outbound grain rade, because carriage of oil had been monopolized by Americanwned foreign-flag vessels.

The percentage of our waterborne foreign trade carried by Americanlag ships continued, month after month, to drop closer and closer to ero. Even our subsidized lines had begun to feel the pinch of foreign competition. Meantime, our Government did nothing-with great anfare.

As I have said, these conditions forced us to exercise the instinct of self-preservation and we found ourselves in agreement. All segments of the industry unanimously opposed the transfer of MARAD to he Department of Transportation.

All segments of the industry united in support of the same maritime program-the MAC report. This was consensus, a consensus without parallel in the history of the maritime industry. Here was industrial consensus on which the administration could have built, promoted, and undoubtedly enacted into law a maritime program without serious dissent. And it was precisely into this situation that Mr. Boyd interjected himself and sought to sell a new-the current Boyd-program. A careful comparison of the Boyd program as he recently described it before the Senate Commerce Committee, and the Boyd report, "The Interagency Task Force Report," will reveal that the Boyd program is the offspring of the Boyd report.

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The opposition and antagonism which Secretary Boyd encountered connection with his original program has softened him somewhat. The comparison of the two programs reveals that, whereas he originally recommended termination of the cargo preference system, he

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now promises that it will be retained, although-as he says"philosophically" opposed to it. Whereas, originally Mr. Bori thusiastically supported building ships abroad for participation maritime trades, without abandoning that principle he now see minimize it by predicting that ships built abroad would con a small percentage of the new fleet.

He still wants to tinker with the subsidy system, and has not decided how or when. And so on, through item after item.

But the keynote of his present approach is consensus. He has says, spent many long and tedious hours discussing the various phase of his program with all segments of the industry, for the purposed attaining consensus. When it is remembered that he started with on sensus, and wound up with loud dissent from most of the industry tension between its segments, it is difficult to reconcile his anno objective with his obvious technique.

The actual technique used by Mr. Boyd to arrive at the everchang consensus was the old one of divide and conquer. He did not cali segments of the industry together at once. He called them in one . time, company by company, union by union, and sometimes person person.

Realizing that CASL would naturally fear any tinkering with subsidy which has made them rather fat, he promised them that t old privileges would be retained, at least until a new and more a able subsidy system had been devised. He also told them that t could "monitor" the application of an experimental operating s for the unsubsidized liner companies.

To the unsubsidized liner companies, whose applications for su had been pending for many years, he promised a subsidy to be der as a result of the experiment which CASL members would mor"

To the bulk carriers, whose applications for construction sub had also languished in inaction for many a year, he also promised apply an experimental construction and operating subsidy, the ter and conditions were left beautifully vague.

He dismissed our domestic shipping industry by recognizing" it was in completion with rail, highway and air transport; but is all. The domestic shippers were, in effect, welcomed to the comp of the depressed. He said he would do something for the tank without indicating what.

To all of them he offered the boon of building abroad. The nurs of ships to be built an the conditions under which the contracts w be let have remained obscure.

But obscure or not, the idea of building foreign aroused our sh yard industry, which forthwith registered its protest. To Amer shipyards he has said soothingly :

But we shall not build all our ships abroad, and you will get their v ** He said nothing about the import quotas on oil and ore, w constitute a major part of our foreign commerce.

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Thus in this Boyd program, sired by the Boyd report, little bit for everybody and not much for anybody. It would the American merchant marine noncompetitive. It would leave Ar

can ports wide open for the deadly competition of substandard forign shipping industries. It would leave the American economy and efense dependent upon foreign mercenaries. It would leave our shipuilding industry in the process of rapid decay.

And it is this gentleman, Mr. Boyd, this supersalesman of variable onsensus, who is urging that he be given final and complete jurisliction over the fourth arm of our defense. We believe that Mr. Boyd as proved conclusively that to entrust him with such power would nean the rapid demise of what is left of our shipping industry. These are the reasons why we oppose the transfer of MARAD to he Department of Transportation. We are not happy about its locaion in the Department of Commerce where it has slumbered since 1950. To paraphrase the statement of the late, great Churchill, the Secretary of Commerce has since 1950, without regard to party, I might say, presided over the liquidation of the American merchant marine. We therefore renew our most sincere recommendation that MARAD be reestablished as an independent agency answerable directly to the Presiednt and the Congress.

First, let me consider briefly some of the arguments which have been made in opposition to this legislation. I have already referred to what seems to be the most serious argument, that in order to have a modern, efficient, integrated transportation system, all modes must be under the jurisdiction of the Secretary of Transportation. This could be characterized as the "organizational chart argument." As I have said, it sounds very neat, and it looks very neat on an organizational chart. But none of its proponents go beyond that point. Modes of transportation are developed and integrated by private enterprise and by the necessities of the operation. Goods are now shipped from Manchester, England, to St. Louis, Mo.- by train or truck, by ship, and then again by train or truck. Goods flow from Chicago to Alaska, from New York to Hawaii. And all this takes place without the integration of all Government transportation agencies in the same department. These movements will continue, so long as they are required to serve people, regardless of where the Maritime agency is located.

Up to date, I have not been very much impressed by the ability of Government agencies to solve the problems of private enterprise. The Government can act as referee, good or bad; as a court, justly or unjustly; and it can pour the taxpayers' funds into programs of its own choosing. But beyond these functions, Government intervention is apt to become obstructive meddling. But this argument is not even as neat as it sounds, because it is, of course, impossible to put all agencies concerned with transportation under the roof of the Depart

ment.

If Marad were transferred to the Department, the Federal Maritime Commission would still be outside. With roads and railroads inside, the Interstate Commerce Commission is outside making rates and routes. Perhaps we are not quite ready for Government either by computer or by chartmakers.

Another argument is that if the Martime Administration is transferred to the Department of Transportation we shall be blessed with an administrator ranking high in the departmental hierarchy, he will be supervised by a secretary of Cabinet level, and that secretary will have direct access to the President.

This might be called the "bureaucratic ranking argument," and it is frightening. That is exactly the situation that the maritime industry has been in since 1950. The Maritime Administrator ranks high in the hierarchy of the Department of Commerce. The Secretary of Commerce is a Cabinet-level officer, and he has direct access, presumably, to the President.

The last, and certainly the least valid argument, is that a Cabinetlevel Secretary is better able to get appropriations than the head of an independent agency. This, I guess, is the "Cabinet-level argument."

One of the most eloquent advocates of this argument was the Dirertor of the Bureau of the Budget who, before this committee, rather shamefacedly admitted that he heads an independent agency. From what I have observed, he is probably the most powerful official in Washington.

Let me remind you of a few of the independent agencies which seem to have done well in obtaining appropriations: The U.S. Atomic Energy Commission, the Export-Import Bank of Washington, tiæ Farm Credit Administration, the Federal Deposit Insurance Corporation, the National Aeronautics and Space Administration, the Tennessee Valley Authority, and it could go on and on.

After looking over the list of independent agencies in the Congressional Directory, it is a little difficult to believe in the sincerity of people who say that the heads of such agencies are unable to get the ear of the President.

There are many reasons which support our position, and I shall list a few.

We have allowed our merchant marine to deteriorate so disas trously that to promote its recovery will require full time and all the abilities of an outstanding public servant familiar with its problems.

The merchant marine is a unique industry upon which our ecoomy and our defense depend. No other mode of transportation is compelled, as the merchant marine is, to compete with foreign operators in our commerce, in our ports, and on trade routes essential to our well-being.

As an exception to this statement reference is frequently made to commercial aviation, which of course competes in internationa commerce with foreign competitors. However, our airlines have avai able to them exclusively the richest aviation market in the world. domestic travel in the United States. Furthermore, aviation has beet supported by almost unlimited funds for subsidies, for research and development, and by Government-sponsored systems and invention Although the present Secretary of Defense has frequently stated that the merchant marine is not essential to the defense of this country, the facts of history have completely dispelled the illusions fro which he seems to suffer. I need cite only the Korean war, the Su

risis, and Vietnam to prove this fact. It is unadulterated science ficon to believe that we can within the foreseeable future, transport en and material to all parts of the globe as required to meet the Communist challenge.

Ninety-eight percent of the material which is sustaining our Armed Forces in Vietnam has been and is being transported by merchant hips, and it could not be otherwise. Unlike other great maritime powrs, we have failed to make our merchant marine an instrument of International policy. Our fleet has declined and grown obsolete, while ther great powers have poured untold wealth, much of which, incilentally, is ours, and scientific thinking (most of it originating here) nto their merchant fleets. Until the time comes that our merchant ressels can represent us proudly and effectively in every great port, we shall continue to fail to uphold our prestige among the nations. All proposals we have seen originating with Government agencies pase our maritime needs at best on the present, at worst on the past. An effective merchant marine policy would be one which paralleled the projected expansion of our foreign commerce over the coming decades. Such a program would require not only a vast expansion of the merchant marine, but the modernization and utilization of our shipbuilding industry.

These are some of the programs which a capable and dedicated Maritime Administrator could formulate, and some of the reasons why we must emphatically urge that he be an independent administrator invested with adequate authority.

Mr. Chairman, that is the presentation of this prepared report. I would just sum up on it by reiterating what I have already said and that is that it seems to me that, in the face of this constant recitation of statistics, the pattern of the growth and of the deterioration of this industry, and in the face of the many, many hours of evidence that have been taken before this and similar committees, before the Congress and the Senate of the United States, I think that there could be no question in anyone's mind who has objectively studied the record as to the need of an independent agency.

It is interesting for me to note, and I think it underscores the point that I have just made, that those within the industry who have now taken a position other than for an independent agency, that by and large all of them support the MAC report.

Furthermore, by and large, all of them say, in effect, when they boil the language down, that really their first preference is for an independent agency, but under the pressures and under the arm twisting of Mr. Boyd and other people with him, that they feel frustrated to the degree that unless they accept what Mr. Boyd offers that then they shall get nothing.

But even so with all that, Mr. Chairman, throughout the testimony of even those proponents of Mr. Boyd's position comes very, very clear the fact that they would much prefer not to do business on the basis of the Boyd proposals.

Now, Mr. Chairman, I didn't come here to belittle Mr. Boyd or to discuss him in any sense other than as it pertains to this hearing. It is