ENERGY TRANSPORTATION SECURITY ACT OF 1974 TUESDAY, NOVEMBER 13, 1973 HOUSE OF REPRESENTATIVE, SUBCOMMITTEE ON MERCHANT MARINE OF THE COMMITTEE ON MERCHANT MARINE AND FISHERIES, Washington, D.C. The Subcommittee on Merchant Marine of the Committee on Merchant Marine and Fisheries met at 10:03 a.m., in room 1334, Longworth House Office Building, Hon. Frank Clark (chairman of the subcommittee) presiding. Mr. CLARK. Good morning. The Subcommittee on Merchant Marine will please come to order. This morning the subcommittee continues hearings on H.R. 8193 and similar bills that would preserve a percentage of our oil imports to U.S.-flag vessels. As you will recall, the testimony of both the Department of Defense and Department of State expressed serious reservations as to the ability of our shipyards to construct the tonnage that would be required by the bill. This morning we look forward to receiving the testimony of the American shipyard industry on this and other points associated with the proposed legislation. The Chair is pleased to note the presence of my good friend and colleague, the Honorable John H. Dent, from Pennsylvania. Mr. Dent, I understand you would like to make a statement concerning the legislation before us this morning. We are very pleased to have you with us and we are also pleased you are taking such an interest in this and other bills pertaining to our merchant fleet. You may proceed as you wish. STATEMENT OF HON. JOHN H. DENT, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF PENNSYLVANIA Mr. DENT. Thank you, Mr. Chairman. I appreciate the opportunity to spend a few minutes with you this morning. I do not think that I can add much to the controversy other than to at least pose for the record a belief that this legislation ought not to really have to come before a committee. After studying our trade laws and powers given to the President, I feel that he could, if he wished, on Executive order, have done this a long time ago. However, since it has not been done, it now becomes the duty of your committee to look into the situation to see how it affects, not only our merchant marine as such, but how it affects the country as a whole, in its ability to sustain itself in the field of energy and in the field of productiviity, both in peace and in war. As you well know, we sometimes seem to consider this Nation so invincible and so powerful, both in peace and war productivity, that we do not need to look to our rear to see what is happening to us. I am not on your committee as such but for many years I have been active in the field of trying to help wherever I could to talk, and to vote when possible, and to preach the fact that this Nation had allowed itself to have a merchant marine that is practically a nonentity. This has come about for many reasons, particularly because we have developed the philosophy in this country that seems to be based upon high wage incomes as our primary demand and high income profits, but have failed to recognize that in order to enjoy these high incomes, we have to have high costs. When we have high costs, we put ourselves in a competitive position where we cannot possibly, in this area, compete with foreign shipping. At one time, I think we had only 4 percent of our trade being carried in American bottoms. During the fracus in Vietnam, we were in such a position because of our coastal waters law that we had to take what we owned in shipping bottoms-mostly plying between our own ports, out of the coastal ports in to supply logistics for our services, troops and services, over in Vietnam. When we did that, we immediately, within a very short period raised the cost of lumber to an unbelievable degree, because of the fact that we had no bottoms to ship on our coastal waters and we had no real tight hold of any kind upon foreign-flag shipping, even although we owned many of the flag ships. Their bonuses for going into war waters put the cost of logistics to such an amount and made it so lopsided that we just had to ignore our own needs. Since most of our lumber came by boat, when we shifted to rail we found ourselves in the position of increasing the cost of the home something like 30 percent in the immediate near term increase after the war. In all of this we have failed to maintain a reasonable amount of shipping bottoms in this country, number of shipping bottoms in this country, for emergency uses. Now, yes, we pay our longshoremen, stevedores, sailors, a higher wage than anywhere else in the world. But we do that because that individual has to live within the confines of the United States and has to pay the taxes and high cost of our method and manner of living in this country. Now, this committee has started on the road, I believe, of trying to rehabilitate. But the pace is too slow. I think you know the story of the "almost made agreement," which was thwarted at the last minute. We were giving the Soviet shipping firm the west coast privileges by allowing them to make a stop at Kenzie, say they were not shipping between American ports but end up in Alaska. Now I think we have got to do one of two things: Either we are going to have to have pipeline oil come down from our great fine Northern Slope, or we are going to have to have shipping. Now, by the time that oil is ready, we are going to have to have shipping ready for it. The only way that you can do it, as I see it, is to put this bill through in order to encourage the shipbuilders who have to look for a market for their product and use for their product. I do not think we can do anything less than this. Incidentally, I doubt if any nation in the world would allow itself to get into the predicament we are in, in this country. On the question of how much do we lay aside for our own survival in the shipping field: 30 percent we are asking for in this legislation. This is not an exorbitant request. In fact, I think it is a very modest request. Your limitation of newly constructed ships constructed under our subsidy program must also be considered in the light of whether or not these American-flag ships are going to be able to command a share of the American shipping to keep these ships busy. One of these days we are going to end up, Frank, as we ended up, as you remember, starting in 1926 with the great coal strike in the anthracite region. We closed the anthracite region down tighter than a drum. And over the years, because of the bootlegged coal operations up there, we were able to have, when an emergency came up, at least some mining activity and a couple of the breakers still working. In the soft-coal field, we allowed mines to be flooded that will never rehabilitate in my opinion. Although I do not see why it could not be possible with the money that is available. Considering the ecology and environment of the area, treating the surface waters is one answer to the problem. We have reserves of coal, but we do not have reserves of coal miners. And the coal miner today is at a premium. We have had mine operators even talk men with black lung into staying on the job-never telling them that within this year, from June this year, June 30 this year to January 1, that if they are not committed to the black lung program and they are still working and have black lung, they are not going to get any payments. But they have to do this because they just do not have coal miners. We are not going to have seafaring men either. We are a nation that cannot survive without seafarers. We cannot survive without shipping. And while a lot of us talk about our country as if there is nothing could go wrong with it, I have been a prophet of doom. I do not like that particular character to play, but it is my humble opinion that if we do not do something, starting as of now, in this small measure, toward reasserting America's right to survive in a dog-eat-dog world, I assure you that we will not survive. Predictions made 10 years ago, all to my sorrow, have all come true. When you consider that we have 52 million less production workers in the United States today than we had in 1962, with 160 million people, it ought to tell us something. It is like the old three-legged milk stool, it cannot have stability with one leg missing. And we have got to have production, distribution, and consumption. And in distribution you have to have, without a doubt, the equipment we are talking about, bottoms necessary to move if an emergency so demands. We got by in World War I because we had the trained mechanics. and the facilities, and we built a fleet of ships second to none ever created before on the face of the earth, in a short period of time. Then we died again. And along came World War II and we again were able, because we had the men, we had supplies, we had the facilities, to again create the necessary bottoms to save not only our allies, but ourselves, in my humble opinion. But you are not going to do that in World War III, because the ingredients will not be there. Every day a new plant shuts down. Every day of our life some production facility somewhere closes its doors. We are down now in the specialty steel industry that, unless we get some relief in that industry, you would never be able to build a fleet of ships necessary if this Nation again gets into offshore war-not only offshore war, even an onshore war. Because we will not be able to bring in shiploads of goods that we have now made ourselves dependent on from overseas in every line of endeavor. Imagine a nation like this in peacetime being short in major industries that cannot even buy on-shelf replacements? Because we just do not make it any more. Every time we fail and lose the ability to make a screw or a bolt, or a welding machine, we are just that much further away from being able in an emergency to create a merchant marine necessary to the survival of this Nation. I commend to you the serious consideration of this legislation and separate from selfish greed the necessity of the Nation itself to have even this small amount of relief from a strangling, crippling and, in the end, killing device known as the foreign flag shipping into this country and out of it. Thank you very kindly. Mr. CLARK. Thank you very much for an excellent, excellent statement. Talking about greed, I heard that we were exporting thousands of gallons of gas, natural gas, and oil. And so I had a research made on it. I find that some of our companies in this country are shipping and have been shipping, since our energgy crisis in this country, have been shipping overseas to European countries and also Canada and Japan, to the extent of over 200,000 to 300,000 barrels. And the figure for natural gas is 446,725 barrels up to July of this year. The only reason they are doing it is because they are getting windfall profits from this fuel. If there was ever a time when this country, America, should do something, now is the time to stop them from doing it. And I commend you for your statement this morning and I wanted you to know that Iam with you and I want you to be with me when the time comes when we are on the floor to tell some of these reallyI will clean it up-really greedy companies where to go. The gentleman on my right, Mr. Downing. Mr. DOWNING. Thank you, Mr. Chairman. It is always a great pleasure to have John Dent, from Pennsylvania, before our committee. He is probably the most articulate man in the House of Representatives. He made one of the finest presentations, I think, of anybody. I am sorry I did not hear it all. You are at your best when you are speaking extemporaneously. But you made your point well. John, are the coalfields available in Pennsylvania if we have to go back to coal? Mr. DENT. Well, right now, as you well know, we are shipping out of the United States, at a clip, our metallurgical coal which we have to have to make metallurgical steels. And all of our coking coal is being sold at a price that American industry cannot pay. We must understand today, Mr. Clark put his finger on it, we are shipping not because somebody needs it-this is a strange thing that is happening on coal-we are digging it out of the ground, we are shipping it, selling it to foreign countries, and one particular foreign country is putting it back into the ground in a sense. They are stockpiling for years ahead. Because that is one commodity that takes bulk carriers and also is in a limited supply. We have yet in America quite a reserve, but each time that we take it out, we have to go deeper for the next vein. And in my area where the best coking coal in the world came from, it finds itself with very meager supply left. We are almost devoid of any good metallurgical coking coal left. However, something you might know, maybe you do not, you all know Congressman Perkins, of course, in Kentucky. Carl came up one day from home and he said, "You know, John, I have not paid attention to what you say about takeovers and foreign ownerships, but," he said, "you know, I went to my farm over the weekend and," he said, "I noticed a car pull up and five men got out of it. They had some maps. They started walking over my property, these maps in their hands. And I went out and asked them if they were lost, what they wanted. They said no," they had an American spokesman with them, a lawyer whom Carl knew, and he said, "No, we are checking out the coal lines in your property and we want to check it out and then we are going to make you an offer." Carl then told me that the neighboring county is almost all bought up by Japanese coal seekers. You see, with a 60-cent dollar it is pretty profitable thing to come here and buy. So we are in serious-in a very serious position right now with coal lands being bought up as fast as anybody will sell them to them-timberlands being bought up. One of the strangest things is the purchase of a great portion of the celery fields in our Midwest. There is not anything that is for sale that cannot be bought. Because we have $100 billion floating around that they can only get 64 cents for a dollar on, foreigners would rather buy here. While our prices are inflated, they are inflated 34 percent less to them than what they are to us. We are the only nation I believe in the world that does not have some restraint of some kind, especially on mineral resources and agricultural resources to foreign ownership and takeover. Mr. DOWNING. Now, we passed a bill several years ago that gave the President the authority to limit the export of coals and lift quotas from imports. I wonder why he has not implemented that legislation? Mr. DENT. I do not know. I just do not understand too much that goes on at the White House. Mr. DOWNING. Thank you very much. |