Additional information-Continued Charts and tables showing-Continued Tank ship fleets-T2-SE-A1 equivalents (oceangoing vessels, 2,000 gross tons and over) submitted by T. E. Buchanan, general manager, marine department, the Texas Co Total privately and maritime owned United States flag seagoing active and inactive combination passenger and cargo ships, including troop transports, of 1,000 gross tons and over as of April 30, 1953, submitted by Thomas E. Stakem, Special Assistant to the Deputy Maritime Administrator. Total United States ocean-borne foreign commerce, by type of carrier, United States and foreign flag separately, submitted by Earl W. Clark, Deputy Maritime Administrator__ United States flag combination passenger and cargo ships em- ployed in domestic trade as of April 30, 1953, submitted by Thomas E. Stakem, Special Assistant to the Deputy Maritime Administrator___. 633 Combination ships-total active, foreign trade, domestic Freighters-total active and inactive.. 277 United States and foreign flag separately, submitted by Earl W. Clark, Deputy Maritime Administrator. United States ocean-borne import commerce, by type of carrier, United States and foreign flag separately, submitted by Earl W. Clark, Deputy Maritime Administrator United States privately owned and Government-owned vessels of 1,000 gross tons and over approved, pursuant to sections 9 and/or 37, Shipping Act, 1916, as amended, for transfer to foreign ownership and/or registry for fiscal years 1946 to and including 1953, by nationality, type, number, and gross ton- Unsubsidized modern dry cargo and passenger fleet in the foreign Vessels reported delivered since progress report of June 1, 1953, submitted by L. R. Sanford, president, Shipbuilders Council of Vessels reported launched since progress report of June 1, 1953, submitted by L. R. Sanford, president, Shipbuilders Council of Yearly average of employment in naval and private shipyards of the United States engaged in construction and repair of naval and merchant vessels, submitted by L. R. Sanford, president, Shipbuilders Council of America Design for peace-statement of Fleet Adm. Chester W. Nimitz, USN. trator. Foreign Trade of the United States as it Affects Ocean Shipping, 137 62 238 152 Brownlow, J. A., president, metal trades department, American Federation of Labor, to John M. Drewry, July 15, 1953, re com- Additional information-Continued Donnelly, James L., executive vice president, Illinois Manufac- turers' Association, to chairman July 3, 1953, transmitting Galleher, Capt. J. K., operating manager, National Bulk Carriers, Haddock, Hoyt S., executive secretary, CIO maritime com- Lieflin, Roy, of Bigham, Englar, Jones & Houston, to John M. Potter, Hon. Charles E., to Hon. John Foster Dulles, Secretary Potter, Hon. Charles E., to Hon. Harold E. Stassen, Director for Mutual Security, Mutual Security Agency, May 6, 1953--- Potter, Hon. Charles E., to Hon. Sinclair Weeks, Secretary of Potter, Hon. Charles E., to Hon. Charles E. Wilson, Secretary of Wilson, Rear Adm. Ralph E., USN, Deputy Commander, MSTS, to chairman, July 10, 1953, re operation of British transports Queen Mary and Queen Elizabeth during World Wilson, Rear Adm. Ralph E., acting commander, Military Sea Transportation Service, to chairman, September 8, 1953, re availability of certain foreign flag ships in the event of an Mid-Century America: Empire Without Imperialism, article in Members of Association of American Shipowners, submitted by Hon. Joseph H. Ball, vice president__ Must We Live in Fear-article in Proceedings of the United States Naval Institute (July 1953) submitted by L. R. Sanford, president, Shipbuilders Council of America__ Principles of Seapower-address by Adm. Robert B. Carney, USN, Projected size of adequate American merchant marine for future years (excerpts from American Merchant Marine and the Federal Tax Policy, a report), submitted by Hoyt S. Haddock, CIO maritime Proposed congressional joint resolution to terminate the application of section 4 of the act of July 15, 1918, submitted by L. R. Sanford, president, Shipbuilders Council of America.. Proposed explanation of necessity for the congressional joint resolu- tion to terminate the application of section 4 of the act of July 15, 1918, submitted by L. R. Sanford, president, Shipbuilders Council of Seapower-Keystone of Airpower (article in Reader's Digest, May 1953), submitted by L. R. Sanford, president, Shipbuilders Council Summary of legislation and committee action bearing on marine insurance, submitted by Percy Chubb, American Institute of Tanker Tonnage Keeps Pace With Soaring World Demand for Petroleum Products-article from the Oil and Gas Journal, Decem- ber 22, 1952, submitted by Adolph Kurz on behalf of Charles Kurz, Page 367 641 430 578 452 439 MERCHANT MARINE STUDIES THURSDAY, MAY 14, 1953 UNITED STATES SENATE, SPECIAL SUBCOMMITTEE ON MARITIME SUBSIDIES OF THE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, Washington, D. C. The subcommittee met at 10:15 a. m., in room G-16, Capitol, Senator Charles E. Potter, presiding. Present: Senators Potter, Butler, and Magnuson. Also present: John M. Drewry, special counsel to the subcommittee. Senator POTTER. The subcommittee is now in session. As you know, this executive hearing has been called by this subcommittee as the first step in our study and analysis of constructiondifferential and operating-differential subsidies in the maritime field which we are conducting pursuant to direction of Chairman Tobey of the Interstate and Foreign Commerce Committee. In a letter to Secretary Weeks, under date of April 24, 1953, I have attempted to outline in bread fashion, the scope of our inquiry. But we felt that it would be useful, both to the subcommittee and to you gentlemen, if we could have this informal meeting for a preliminary discussion and exchange of ideas before embarking on more detailed studies and conducting public hearings on the various phases of the problems with which we are confronted. (The letter referred to follows:) The Honorable SINCLAIR WEEKS, Secretary of Commerce, Department of Commerce, Washington, D. C. APRIL 24, 1953. MY DEAR MR. SECRETARY: Pursuant to Senate Resolution 41, January 30, 1953, I have been appointed chairman of a subcommittee of the Interstate and Foreign Commerce Committee to make a study and analysis of constructiondifferential and operating-differential subsidies in the maritime field, together with other forms of Government aid to American shipping. In addition to myself, the other members of the subcommittee are Hon. John M. Butler, of Maryland, and Hon. Warren G. Magnuson, of Washington. In furtherance of its objectives with regard to operating and construction subsidies, the subcommittee will have to give consideration to the basic declarations of maritime policy and all forms of Government participation in merchant ship construction and operation. It is important therefore that the subcommittee review the provisions of existing maritime legislation in the light of present conditions and said declarations of policy to determine whether or not such legislation is adequate to the fulfillment of the policy and if not, to determine what changes should be made, with particular regard to the need for Government aid to shipping and the best and most economical methods of providing such aid. In general, the subcommittee will direct its inquiry to the following subjects: 1. The size, composition, and quality of the merchant marine today, including the national defense reserve fleet, and the adoption of a tangible and continuing program for replacements and additions to conform to our overall national requirements. 2. A review of existing maritime legislation providing for Government aid to merchant shipping, including provisions for direct subsidies, tax exemption, tax deferment, loans, and mortgage insurance. In this connection, the subcommittee will review the reports prepared by the Commerce and Treasury Departments at the request of former President Truman relative to tax-deferment and tax-exemption benefits to the maritime industry. 3. The need for the types of aid presently provided, the cost of such aid in relation to the results achieved, and modernization of existing law in accordance with new methods or approaches which might more effectively accomplish the desired purposes. In this connection, I recognize the importance of the highest degree of continuity of established principles and policies in the maritime field, but they must be consistent with existing conditions. Therefore, with the violent economic and political changes, both domestic and international, which have occurred in the 17 years since the enactment of the Merchant Marine Act of 1936, it may well be found that new approaches to the problem of achieving a merchant marine adequate to the national needs must be adopted. 4. Direct Government participation in merchant shipping, including direct Government ownership and operation, general agency operation, and chartering of Government-owned vessels. 5. Clarification of existing law to eliminate hampering ambiguities in the event and to the extent basic changes are not found to be required. The foregoing is a broad outline of the scope of the studies contemplated by the subcommittee to which I hope you will be able to give prompt consideration in order to be prepared to present your views to the subcommittee at an early date. At the outset, the subcommittee will wish to discuss these problems with you or your designated representatives informally in closed session before proceeding to the more detailed aspects of the matter. Sincerely yours, CHARLES E. POTTER, Chairman, Special Subcommittee on Maritime Subsidies. Senator POTTER. As we view it, the job of studying operating and construction subsidies, which are the basic forms of Government aid to shipping under existing laws, necessarily requires that we make inquiry into other major aspects of our shipping legislation, including basic declarations of maritime policy and all forms of Government participation in merchant ship construction and operation. It is our desire to examine carefully and objectively into all of these fundamental matters in order to reach conclusions and make recommendations most suitable to the national needs under present and foreseeable conditions. My good friend and colleague, Senator Magnuson, who is a member of this subcommittee was the distinguished chairman of a subcommittee of this committee investigating problems relating to United States Merchant Marine in the 81st Congress. His subcommittee made a most thorough study of problems existing at that time and its recommendations were contained in a final report from the Interstate and Foreign Commerce Committee under date of August 30, 1950 (S. Res. 2494, 81st Cong., 2d sess.). However, since the hearings held by that subcommittee, there have been many changes in the domestic and world situation which make it highly important that these studies be conducted at this time. In connection with the foregoing, there were before the past three Congresses a series of legislative proposals looking to amendments of the 1936 act which were intended to provide an answer to some of the basic problems of the merchant marine, such as the development of a long-range program of additions and replacements which might be required to provide an adequate merchant marine; encouragement of new construction of vessels; stimulating the shipbuilding industry; meeting the ship replacement problem arising out of tremendous increases in construction costs in recent years; and overcoming the problem of block obsolescence. Legislation was enacted in the last Congress, the so-called Long Range Shipping Act (Public Law 586) which was calculated to meet some of these problems. It was recognized by all concerned, however, that the enactment of that bill in the form in which it passed the Congress did not by any means provide a complete answer. Accordingly, the conferees of both the House and Senate, and former President Truman directed the Commerce and Treasury Departments to proceed immediately to make studies in as much detail as time would permit into the needs of the merchant marine and the problem of developing methods of providing aid to the maritime industry. This subcommittee in connection with its duties, was also directed by Chairman Tobey to review the reports on tax deferment and taxexemption benefits prepared by the Commerce and Treasury Departments on the above subject. At this time, we would like you to tell us of the major problems facing you in the administration of our national maritime policy so that we may understand them and more intelligently conduct these studies. With that preliminary statement on our behalf as to the purposes of these hearings, we would like, first, to receive the views of the Department of Commerce. We are honored in having with us this morning Under Secretary of Commerce for Transportation, Robert B. Murray, who will be the first witness. Mr. Murray, we are delighted to have you here. STATEMENT OF HON. ROBERT B. MURRAY, UNDER SECRETARY OF COMMERCE FOR TRANSPORTATION, DEPARTMENT COMMERCE OF Mr. MURRAY. Thank you, Mr. Chairman. I am, Mr. Chairman, very grateful for this opportunity of first being able to explain in executive session some of the major problems in the merchant marine field with which the new administration is faced. The problems of the American merchant marine, as the carrier of a portion of American commerce in foreign trade, as the forth arm of our national defense, and as an instrument of our foreign policy, have existed in much the same form ever since we first developed, by force of hard necessity, a modern merchant marine, during World War I. I will not canvass past history, which I am sure is well known to the members of this subcommittee. I will, however, canvass certain of the major problems which the Department of Commerce is now actively studying. As yet, neither I nor the new administration have any considered answers to these problems. I make no apology for this. We have been in office only 4 months. We do not propose either to jump at conclusions or to give hasty or but partially considered recommendation. The problems are of long standing. They must, I believe, be thought through with a fresh mind and with an objective viewpoint before answers can be developed upon which the Secretary of Commerce is ready to take a stand. A task force from my office, with the help of personnel in the Maritime Administration, is now assembling the facts and the conflicting |