uneconomic, and you would eventually end up with a much more efficient standby fleet, and it would be a logical way of doing it. Senator POTTER. How do our C-type vessels compare with the comparable foreign vessels?

Mr. TURMAN. I can only answer it this way. Some of our Dutch owner competitive friends who are able to get some of the C-type vessels, and also one of the most outstanding Scandinavian owners, have told me that the vessels which they had gotten of the C type, and some of the diesel ones, were as good a ship as they had in their fleet and had constructed. They spoke very highly of them, as to their performance, their adaptability for their particular purposes, and their efficiency. Of course, there may be some disadvantages in that their machinery, replacement of parts, is not available to them over there, and they are not supplied and have to be gotten over here. But by and large, they were very complimentary of them.

Senator POTTER. What is the possibility of developing any new trade routes?

Mr. TURMAN. Well, I think we are going to have shifting patterns as these tensions decrease.

Senator POTTER. It may dry up on some and gain on others; is that your point?

Mr. TURMAN. Yes. We must have areas in the world where there is no service today. As population shifts come about and changes in economic conditions; as the standards of living are increased; as we go into exploiting the mineral and natural resources and raw materials; I think there are certainly bound to be many fields in the future where there will be opportunities for expansion. Even the present trade routes are susceptible to considerable expansion.

Your committee will then be faced with a decision as to whether the military exigencies are great enough and the national economy strong enough to warrant the costs of construction and maintenance of such a tramp fleet. We were talking about this fleet of 18-knot ships. This then briefly outlines the size and character of the fleet which, I believe, is commercially attainable. Maintenance of this projected commercial fleet on a long-range basis will largely depend on factors such as:

(a) Developments in world economic and cargo conditions along the lines of the economic survey which I have previously reviewed.

(b) Reasonable competitive conditions which will permit Americanflag liner vessels to obtain fair proportions of the available cargo, including the prompt elimination of discriminations and restrictions which may be invoked from time to time by foreign governments.

(c) Restrictions of the use of Government-owned vessels to a proper and limited field of activity.

(d) Continuance of a consistent, long-term Government policy based on the "parity" principles of the 1936 act.

(e) Appropriation in future years of the large sums which will be necessary to expand and replace the present fleet.

Senator POTTER. Do you think there should be any change in that period of formula?

Mr. TURMAN. No, sir; I think it is eminently sound, if the Congress could find some means to permit the Maritime Commission to properly administer their functions in their discretion, as was intended.

Senator POTTER. That has been one of the big problems that I am conscious of, and the committee is conscious of, that every year we have a continuing fight, as you well know. I think Mr. Murray, the Under Secretary of Commerce, is conscious of the problem as it relates to the discretionary powers of the Maritime Board, and certainly the validity of a Government contract. I hope that will be corrected in the near future.

Mr. TURMAN. If this committee desires, during the course of these hearings, the group of companies which I here represent will arrange to have other witnesses appear and outline our views on certain of the above subjects as well as to make specific suggestions, regarding (i) the replacement problem; (ii) block obsolescence; (iii) a program for upgrading the reserve fleet and the manner in which such a program will close the gap between the commercial fleet and the so-called military nucleus; (iv) disposal of obsolete vessels; (v) technological developments and their long-range significance; (vi) possibility of private financing of vessel mortgages; (vii) need for firm and binding construction contracts and for fixing construction subsidy rates in advance; (viii) other matters of interest to the industry.

Senator POTTER. I wish to thank you for a very enlightening statement. We will be continuing the hearings. As you know, this is an exploratory hearing we are having. We hope, from the information that you give us, and other interested people, that we will be able to, if new legislation is needed, recommend it, and if administrative action is needed, to recommend that to the executive branch of the Government.

Whatever action we can take as a committee to bring about the desired results for an active, solid merchant marine is our purpose. We will take advantage of your offer and call upon the people that you represent for your best advice.

Mr. TURMAN. Senator, I want to thank you for your courtesy and patience in letting us come here. It has been a pleasure for us to make an appearance. We hope you will call on us if we can be of any further assistance.

Senator POTTER. I think I will be in your New Orleans next week. Mr. TURMAN. I hope to have the pleasure of seeing you down there. Senator POTTER. The committee will be in recess until July 3, at which time we hope to hear from the Department of Commerce.

(Whereupon, at 12:10 p. m., the committee recessed to reconvene on July 3, 1953.)

MERCHANT MARINE STUDIES

FRIDAY, JULY 3, 1953

UNITED STATES SENATE,

SPECIAL SUBCOMMITTEE ON MARITIME SUBSIDIES OF THE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, Washington, D. C. The subcommittee met, pursuant to call, in room G-16, Capitol, at 10:15 a. m., Senator Charles E. Potter, presiding.

Present: Senator Potter.

Also presents: Mr. John M. Drewry, special counsel to the subcommittee.

Senator POTTER. The Subcommittee on Maritime Subsidies will come to order. We are pleased to have with us today Mr. Murray, Under Secretary of Commerce, in charge of transportation, and Mr. Clark of the Maritime Administration, who are here to give us the benefit of their views.

Both Mr. Murray and Mr. Clark, and other representatives of the Department of Commerce, have appeared before this subcommittee in executive session. This problem was discussed at that time. We recognize that the Department of Commerce, as other agencies of the executive branch of government, has been in the process of reviewing what exists today and endeavoring to determine what is needed to carry out the policies of our Government.

Mr. Murray, if you are ready at this time, we will hear your statement. First I would like to inquire how Mr. Gatov is. Is he improving?

STATEMENT OF ROBERT B. MURRAY, JR., UNDER SECRETARY OF COMMERCE FOR TRANSPORTATION

Mr. MURRAY. Yes. Mr. Weeks and I went out to see him Tuesday night. He seemed to be in pretty good shape. He is walking with a cane, but he is able to walk around.

Mr. CLARK. He returned home yesterday.

Mr. MURRAY. Mr. Rothschild was sworn in yesterday. The Maritime Administrator now has a flag that participated in the swearing-in exercise. As soon as we were through with it, we bundled it in a box and sent it out to Mr. Gatov for him to put at the top of the staff. Did he get it, Mr. Clark?

Mr. CLARK. I think he got it this morning.

Mr. MURRAY. My appearance before this special subcommittee is in response to a letter which you addressed to Secretary Weeks on April 24, wherein you advised that this special Subcommittee on Maritime Subsidies had been established under Senate Resolution 41.

Your letter outlined the general scope of the inquiry to be conducted by your committee. From consultation with your staff, I have learned that today you desire that I direct my attention to-(1) Consideration of the size, composition, quality, and employment of the United States fleet, including the national-defense reserve, and (2) the need for a tangible and continuing program for ship replacements in order to meet the needs of commerce and national defense.

It is recognized that present conditions and future outlook facing the American merchant marine call for a thorough review of current overall policies and national objectives in maritime affairs. Basic to such consideration is a practical determination of the kind and quantity of merchant marine the United States requires to maintain her commerce and protect her shores. The extent of the Government's role in shipping, including the subsidy program for the future, will depend on such determination.

Senator POTTER. If the Secretary would yield, what is your pleasure? Do you prefer to finish your statement before any questions are asked, or do you mind if questions are interjected in the course of your statement?

Mr. MURRAY. It does not matter. Mr. Clark and I are teaming up on this. He will fill you in on the figures and details of the situation. I thought I would first scope out some of the basic thinking which we are involved in in trying to arrive at where we are going.

Senator POTTER. As you probably know, Admiral Wilson gave us the benefit of his views concerning the requirements of the merchant marine strictly from a military standpoint. We hope during the course of the testimony that you will give, or some members of your staff, or have that correlated with the commercial needs of the merchant marine.

Mr. MURRAY. We have some rather full information here which can be used in any way you want to use it. Mr. Clark and I, as I say, are teamed up together on this thing. Then we will answer questions after that, or just as you prefer.

Senator POTTER. Thank you.

Mr. MURRAY. We had planned to talk today simply about the size, composition, and quality of the merchant fleet and the need for a tangible and continuing program for ship replacements, in order to meet the needs of commerce and national defense.

To me, the question of the size and composition of the fleet required for the future is the very heart of the problem that we must cope with before this committee. In our present thinking, there are a number of basic considerations which should guide us in determining the needs of the fleet.

Mr. Clark will later go into the entire matter, the size, the quality, and the composition at the moment. He is not able today to go into the question of what do we do about the situation. But from the basic information which has been developed, it will be possible to turn in any direction we deem desirable within the policies that we are now setting up.

Senator POTTER. These other projections that are under consideration are under study at the present time?

Mr. MURRAY. That is right.

Among these basic considerations which I feel merit very serious attention are the following: