NDEPENDENT FEDERAL MARITIME ADMINISTRATION

TUESDAY, AUGUST 1, 1967

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON MERCHANT MARINE OF THE

COMMITTEE ON MERCHANT MARINE AND FISHERIES,

Washington, D.C.

The subcommittee met at 10:15 a.m., pursuant to recess, in room 1334, Longworth House Office Bulding, Hon. Edward A. Garmatz (chairman of the subcommittee) presiding.

The CHAIRMAN. The committee will please come to order.

We have several Members of Congress who wish to testify this morning, so without further ado, I should like to start with a member of this committee, the very able gentleman from Maine, Congressman William Hathaway.

STATEMENT OF HON. WILLIAM D. HATHAWAY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MAINE

Mr. HATHAWAY. Mr. Chairman, I am pleased to support with so many of my colleagues legislation to create an independent Maritime Administration. Members of both management and labor in the maritime industry support the many bills to create an independent Maritime Administration. This agreement and accord between Members of Congress, labor, and management is evidence of the bill's merit.

I need not, before this committee, describe the plight of America's merchant marine. The Vietnam war with its increasing supply requirements vividly focuses on the woeful picture of our merchant marine. It is neglected and inadequate. To supply our forces, we rely heavily upon foreign-flag shipping. This situation has an inherent weakness. The world is uncertain. Sometimes even our friends will disagree with us. A temporary disruption with our allies, as with De Gaulle, the imposition of an unfriendly government, any of a variety of contingencies could cripple our war effort.

For our national security, we must make an immediate and concentrated effort to restore our merchant marine to international leadership. An independent Maritime Administration is not a panacea, but it offers hope. In the Department of Commerce, the Maritime Administration remains an unclaimed orphan. The detailed and peculiar problems of the maritime industry do not and cannot, due to the size of the Department of Commerce receive the personal attention of the Secretary.

All of us want to revitalize the maritime industry but that goal eludes us as long as the Martime Administration remains buried in

the Commerce Building. As the first step in disintering it, I ha submitted H.R. 8950 and I pledge my continuing support to si measures leading to the rejuvenation of the American merchant mar The CHAIRMAN. Thank you for a fine statement.

Another member of this committee, Congressman William R will be our next witness.

STATEMENT OF HON. WILLIAM V. ROTH, JR., A REPRESENTAMI IN CONGRESS FROM THE STATE OF DELAWARE

Mr. ROTH. Mr. Chairman, it is a privilege for me to presen views in support of H.R. 159 and related bills proposing the e lishment of an independent Federal Maritime Administrat Coming, as I do, from a coastal State, and, as a member of this s committee, I am anxious to see our merchant fleet restored to its forme preeminence, and have introduced H.R. 7116, one of the measures which these hearings are being held.

Earlier testimony before the subcommittee by members of our or committee, and by other distinguished Members of the Congress well, has developed a forceful argument in support of the reestab ment of an independent Federal Maritime Administration. Spok men for the executive departments and agencies concerned have offere strong reasons for the transferral of the Maritime Administration" the newly created Department of Transportation. Admittedly, underlying concept of the Transportation Department--the coordi tion of all modes of transportation, their operation, and developmentis, in the abstract, an excellent one. But, despite the convincing arg ments of the representatives of the executive branch, I remain c vinced that an independent agency is necessary to the revitalizati of our maritime industry.

Certainly, the current plight of the American merchant marine, an the absence of any testimony furnishing a reasonable basis for ass ance that should the Maritime Administration be transferred to Tra portation, the former would function any more effectively than has over the past several years as part of the Commerce Departme Crucial to our efforts to rebuild our maritime industry is an effective governmental organ to encourage and coordinate the activities of labor. industry, and Government in the accomplishment of this huge ar important undertaking.

In this respect, I should like to quote an excerpt from a study p pared by the University of Washington, entitled "A 1966 Survey Russian Merchant Shipping," referred to earlier by my distinguishe colleague, Mr. Pelly:

After 1954 the Ministry of the Merchant Fleet was reorganized by de tralizing the Ministry. The Ministry, at present, is an all-union ministry und the control of the Council of Ministers. In a way similar to American hol companies, the Ministry, from its headquarters in Moscow, supervises sea trarportation for the entire country. It also coordinates its activities with the M istry of Railroads, Ministry of Foreign Trade, Ministry of Inland Waterwa and the Ministry of Transport Construction. In addition, the Ministry is contact with the State Committee for Shipbuilding, Ministry of Higher Ed tion, State Planning Commission (Gosplan) and State Committee for Coord. tion of Research. Besides this coordination it also supervises over-all planni organization and development responsibilities.

he Soviet Merchant fleet began to expand when Victor Grigorevich Bakayev ame the Minister of the Merchant Marine (in 1954).

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With rare independent authority Bakayev seems to have a free hand in develng the Soviet merchant navy. Indeed, more than any other single person he responsible for the tremendous new importance Russia is gaining from its rchant fleet.

I find the foregoing statements particularly significant with respect the statement of the Director of the Bureau of the Budget in sponse to the question posed by my colleague, Congressman Dellenck, concerning the ability of an independent agency to coordinate activities with other agencies having jurisdiction over other modes transport. Too, the fact that the expansion of the Soviet merchant et dates from the time when Mr. Bakayev was vested with "rare dependent authority"-the same autonomy which this committee ow seeks to grant our own Federal Maritime Administration-is, in y estimation, highly significant.

Where once the Soviet Union was a land-locked power, her actions the Middle East crisis dramatically indicate that she has broken ese shackles and achieved a high degree of strategic mobility. No ss a military authority than Hanson Baldwin observed in the New ork Times of June 2:

... the reinforcement of Soviet naval forces in the Mediterranean is far 1ore significant than its effect on the Middle Eastern crisis.

.. it demonstrates a new-found Russian naval capacity and a Communist nderstanding for the use of sea power for political, psychological and diploatic ends that were impossible a decade ago. [Emphasis added.]

in the last decade, there has been a rennaissance of Soviet maritime Power-naval ships, merchant marine, fishing fleets and oceanographic vesselsrennaissance that is influencing history and casting a long shadow.

All of us are agreed, it would appear, on the necessity of restoring the nerchant marine to its former strength and vitality. But, there agreenent ceases, and discord begins. The Budget Director has stated, in effect, only if Congress accedes to Transportation Secretary Boyd's maritime plan, including the transfer of the Maritime Administration to the Department of Transportation, can we anticipate more favorable consideration for increasing Federal spending on maritime activities. This is an ill-advised, and dangerous attitude. Needed badly are forward-looking administrators anxious to get on with the vital task of rebuilding our merchant fleet. We can ill afford provincial empire building on the part of any department that would detract from our ability to reach this national goal as quickly and as efficiently as possible.

Finally, Mr. Chairman, I would like briefly to touch on the great contrast between the treatment accorded the aircraft industry and the maritime industry. Last week, the House passed the Department of Transportation Appropriation bill for fiscal year 1968. Included in that appropriation was the sum of $142,375,000 for the development of two prototype supersonic transport aircraft. This amount is only $625,000 less than requested by the administration, and appropriated for the entire merchant ship construction program of 13 vessels for fiscal 1968. Imagine what could be done were the entire cost of the SST

program-estimated to be about $4.5 billion before the first SST delivered-to be directed toward revitalizing our merchant fleet.

Mr. Chairman, let us meet this challenge head on; let us begin this difficult task to develop a first-class merchant marine. The ahead will be expensive, it will not be easy, it will require the ear efforts of industry, labor and all levels of government to succeed this endeavor. But, the price of our failure to respond to this challe is a lessening of our national security, continued balance-of-paym deficits, and a growing independence on other nations for our blood, trade. I therefore urge the favorable consideration of your H.R. 159, and other identical and similar bills to take the initial r toward revitalizing the American merchant marine by establis an independent Federal Maritime Administration.

Thank you, Mr. Chairman.

The CHAIRMAN. The subcommittee appreciates your fine stater Another member on this committee would also like to be heards this time. We welcome any statement you may care to give, Mr. Rapp STATEMENT OF HON. PHILIP E. RUPPE, A REPRESENTATIVE CONGRESS FROM THE STATE OF MICHIGAN

Mr. RUPPE. Mr. Chairman, thank you for this opportunity to spea on behalf of my bill, H.R. 7254, and related legislation to establ an independent Maritime Administration.

No one is more familiar with the plight of the merchant marine the are the members of this subcommittee. The decline in our tong capacity at the same time that the tonnage of the fleets of the rest the world has greatly expanded is familiar to all of you. The de of the maritime industry is dangerous to our military posture in a t of national crisis and represents a real threat to our economic secur Let's look at the record:

Just 20 years ago, the United States had a merchant marine fleet 5,000 ships-American-built ships-American-owned ships, Ame can-manned ships; today we have only about 900 of these U.S.vessels.

Just 20 years ago, American-flag shipping carried 40 percent of seaborne export/import cargoes. Today, foreign-flag vessels car about 93 percent of that cargo.

Just 20 years ago, some 80,000 sailors were able to find jobs" American-flag vessels. Today, those jobs have shrunk to less th

50,000.

Just 20 years ago, the United States ranked first in merchant sh ping. Today, we're in sixth place.

Just 20 years ago, we were the world's leader in shipbuilding. Att start of this year we were in 14th place among the 15 leading sh building nations. As of right now, we're not even in the top 1 we're 16th.

This spring I was in Japan with our colleague, the Honorable Fra Clark, under the auspices of the Coast Guard Subcommittee. I vis the Ishi Kawa Jima Shipyard which is the largest in the world. I.year these yards produced the world's biggest ship the 210,000