doubt that there would be a public hearing on the matter, however, before it was announced.

The CHAIRMAN. We want to hold a hearing before you put it in the Federal Register. Now, that is what I have been driving at all the time. That is what I interpreted your letter to mean. Once it gets in the Federal Register, then there you are. And we want some airing out down here.

Mr. JOHNSON. What I explained in the letter was that we would, of course, inform you and have the opportunity to discuss it with you informally before it was published in the Federal Register.

There was nothing in our exchange of correspondence that referred to a public hearing before this committee.

The CHAIRMAN. Well, just as soon as I heard about it, I would call a hearing down here about it. It is of great importance, in line with your own statement, I think, that we should have an opportunity to have the hearing held on this before it is put in the Federal Register.

Mr. JOHNSON. Well, it would be our view on that, I think, Mr. Chairman, that under the law we would have to retain the authority to promulgate the regulations of this sort, and our soul is pure and our purpose clear. We want to work with you as closely as we can, but I do not think we can be held up in the doing of our business, in publication of matters in the Federal Register, until this committee has held hearings.

The CHAIRMAN. I would then have to introduce a resolution right away, would I not? I mean introduce a resolution in the Congress to hold hearings on this subject?

Mr. ABLES. Sir, can we leave it this way, before any action will be taken we will certainly discuss the matter with you.

The CHAIRMAN. I am telling you now, when you tell me, then I will introduce a resolution and I will hold the hearings, you need not be bound on that. You can go ahead and publish what you want in the Federal Register, but I will have a bill over here in the House to hold some hearings on this matter, because from Mr. Johnson's own statement this needs quite a lot of airing out before it becomes a matter of fact in the Federal Register.

You see, Mr. Johnson, it is something that has not been mentioned here at all. In addition to making the American merchant marine competitive the world over, we want to preserve the ability and to have the advantage of shipyards here in this country and there is a good deal of weight that must be given to that in this entire program, not only for the American merchant marine but for other purposes. In the national interest of this Nation we have to maintain private shipyards.

Mr. JOHNSON. There is no proposal at this time that the American operators do build their ships abroad or be permitted to build their ships abroad.

The CHAIRMAN. I understand that.

Mr. JOHNSON. This is a matter, it seem to me, that needs to be given very careful attention.

The CHAIRMAN. I understand that thoroughly.

Mr. JOHNSON. Because

The CHAIRMAN. If this program is not carried out sufficiently to sustain American domestic shipyards, for all purposes including national defense, we will wake up some day finding ourselves in the same fix we were in in World War I and World War II, and this committee

does not ever want to go through that again if there is any way to avoid it. Because we paid for many, many shipyards and many, many ships because we were not adequately equipped to construct in our own yards, at that time the civilian commerce was in a tangle and we had nothing to carry it on with. That is another facet of this whole subject.

Mr. JOHNSON. I think you are quite right. As long as we have this $100 million program to preserve American shipyards, it is obvious that this matter to which we must give attention, and when we talk about national defense needs for shipyards, I think we have to ascertain precisely what those national defense needs are.

The CHAIRMAN. And you want to throw in the commerce of America?

Mr. JOHNSON. Yes, indeed, not only are we interested in national defense, but what the needs of the American merchant marine may be. The CHAIRMAN. All of these foreign-flag vessels they shout about being available, they fade away as the great general said, they just fade away, and we are dependent on these people that we are talking about here to fly the American flag, not only to carry the commerce, economic and regular commerce of the United States, but to supply the national defense forces.

That has been our experience in the past.

Mr. JOHNSON. Yes, indeed, I think we have to take another long look at our shipyards.

The CHAIRMAN. I think you and I are on the same track.

Mr. JOHNSON. I hope so.

The CHAIRMAN. Mr. Drewry?

Mr. DREWRY. Mr. Johnson, following Mr. Casey's questioning, on page 2, your second statement in reference to the 1-year aspect of it, you state that it would provide greater flexibility and pending the outcome of your present study on this and other basic issues in the maritime program.

Could you explain how the limited period would give you greater flexibility?

Mr. JOHNSON. Well, our position on that, Mr. Drewry, is that, as I say in the statement, as long as we have new programs under consideration we do not think there is a need at this time to commit ourselves to a 3-year extension of this limitation given the principles that I have set forth at the top of that page and referred to earlier.

Mr. DREWRY. În a letter of February 14, as part of this extended correspondence since the new proposal was suggested, Mr. Gulick, Acting Maritime Administrator said:

We shall, of course, be prepared to give our views on our new proposal to determine construction differential subsidy, or on any proposal to extend the 55percent law whenever you request. However, the latter proposal is not included in our legislative program for this session of Congress.

As your own statement shows we are now in many cases, a number of cases, above the 50 percent and within the 60 percent on the present vessels. So, had this proposal to extend not been introduced and if it is not acted on, then we will be thrown back on the operating subsidy contract provisions where the operators themselves can just finally refuse to proceed on their program until parity is provided.

I wonder if there is not a danger there that we would, possibly by not giving, as I see it more flexibility, a 2- or 3-year extension while

you are working out whatever your formula will be if there is to be a change, be confronted with the possibility of a further slow down in an already slow program.

Mr. JOHNSON. Well, I think if you refer again to Mr. Gulick's letter and compare it with this statement, you will see that we have no objection here to a 1-year extension.

Mr. DREWRY. Things have changed a little.

Mr. JOHNSON. And I would trust that those urging a 3-year extension would view that as a measure of progress.

Mr. DREWRY. One other question: I notice that neither you nor CASL makes any showing of where Americans build their ships when Americans do build abroad.

I am thinking about the oil companies and the companies that are building ore ships, now, maybe, there are not any in the current period, but there have been in recent years.

Mr. JOHNSON. I think the best way to answer that, Mr. Drewry, would be to provide you with such a list. Let me speak to that only to the extent of saying that we understand they are not all built in Japan, but are built around the world. Furthermore, during the Suez crisis some were built here in the United States.

Mr. DREWRY. And some were built in Germany and some in France, I believe.

Mr. JOHNSON. That is right, all around the world.

The practice at least has not been limited to building only in the lowest cost center.

Mr. DREWRY. I think it would be some indication if the record would show where those who are

Mr. JOHNSON. I think that would be quite helpful. It is a matter we have referred to many times this morning and I think you should have it, and we will endeavor to get that information for you and provide it to the committee.

(The following material was received in response to the above request:)

FOREIGN-FLAG SHIPS OF 1,000 GROSS TONS AND OVER OWNED BY U.S. PARENT COMPANIES, AS OF DECEMBER 31, 19631

FOREWORD

This report, issued semiannually, shows the foreign-flag ships of 1,000 gross tons and over owned by U.S. parent companies located in the United States. The report is presented in two parts:

Part I-Owned

Summary by flag, type, number of ships, tonnage, and named listing of foreignflag ships owned by foreign affiliates of U.S. companies incorporated under the laws of the United States.

Part II-Under Construction

Summary by flag, type, number of ships, tonnage, and name (or hull number) of foreign-flag ships under construction and/or on order for foreign affiliates of U.S. companies incorporated under the laws of the United States.

This report was prepared by Maude L. Luehrs under the supervision of Ethel W. Herring, Chief, Division of Ship Data.

1 Prepared by Office of Statistics. Division of Ship Data, U.S. Department of Commerce, Maritime Administration. Rept. MAR-560-22.