STUDY OF THE OPERATIONS OF THE PANAMA LINE FRIDAY, MARCH 3, 1961 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON PANAMA CANAL OF THE Washington, D.C. The subcommittee met at 10 a.m., pursuant to adjournment, in room 219, Old House Office Building, Hon. Leonor K. (Mrs. John B.) Sullivan, chairman of the subcommittee, presiding. Present: Representatives Bonner (chairman), Sullivan (chairman of the subcommittee), Mailliard, Gross, Glenn, Tupper, and Morse. Staff members present: Robert H. Cowen, counsel; and William B. Winfield, chief clerk. Mrs. SULLIVAN. The subcommittee will come to order. Our first witness this morning will be Mr. Ray Murdock, attorney for the Seafarers' International Union of North America. STATEMENT OF RAY R. MURDOCK, ATTORNEY AT LAW, WASHINGTON COUNSEL FOR SEAFARERS' INTERNATIONAL UNION OF NORTH AMERICA Mr. MURDOCK. Madam Chairman and members of the committee, I have a prepared statement which I would like to read. My name is Ray R. Murdock. I am an attorney at law, and Washington counsel for the Seafarers' International Union of North America, which I shall hereafter refer to as SIU. The SIU is a federation of maritime unions including the Atlantic, Gulf, Lakes and Inland Waters district, the Sailors' Union of the Pacific, the Pacific Coast Firemen, the Marine Cooks and Stewards, and others. About 60 percent of the unlicensed seagoing personnel now employed in the maritime industry are affiliated with SIU. The SIU and its affiliates are also members of the Maritime Trades Department, AFL-CIO. That department is now composed of 32 national and international unions, all involved in the maritime industry, and all affiliated with the AFL-CIO. Paul Hall is the president of the SIU and of the Maritime Trades Department. Morris Weisberger, head of the Sailors' Union of the Pacific, is a vice president of the SIU. The SIU vigorously supports the position of the International Longshoremen's Association, the Canal Zone trade unions, and opposes the discontinuance of the Panama Line. May I remind you that American labor unions are a vigorous form of private enterprise, and that practically all American trade unions. are dedicated to the preservation of private enterprise in the United States. 239 We certainly believe that the Government should not engage in activities which can be better performed by private enterprise. We believe that Government participation in the shipping industry should be limited to the fullest extent consonant with our national defense and economic prosperity. We believe, as a general rule, that the Government should stay out of the commercial shipping industry, and we believe that in many respects Government shipping activities ought to be turned over to private enterprise. However, in connection with the Panama Line, we are not confronted with a general principle, but with a factual situation which must not be approached on a theoretical basis, but as a practical matter. As the letter of the then Secretary of the Army, addressed to the Director of the Budget on February 18, 1960, and the accompanying memorandum cogently show, the Panama Line is a vital and indispensable part of the canal operation. Madam Chairman, may I say at this point that this statement was prepared before the testimony of Grace Line and United Fruit was given and, even as a lawyer, I have been instructed by these hearings, by the degree to which people with opposing interests can take the same factual situation and come up with completely contradictory conclusions, but I still think this statement is justified. We are not aware of any proof that private enterprise either will or can replace the Panama Line. Our discussions with labor leaders from the Canal Zone have convinced us that the abandonment of the line would, to a large extent, be tantamount to the abandonment of our longstanding policy governing the canal, the Canal Zone, and its inhabitants. Unlike most Government activities, the Panama Line is operated with little or no cost to the taxpayer. It provides scheduled, indispensable service to shippers and passengers. It provides transportation at reasonable cost to working people who could not, at private passenger rates, readily travel between the Canal Zone and their homes in this country. And from our point of view, more important than all of these considerations, the Panama Line provides regular and permanent employment for a large number of skilled and faithful employees. I want to emphasize the regular and permanent nature of this employment, because these characteristics do not normally exist in the maritime industry. Ours is an industry of casual employment; that is, normally seamen do not have regular tenure with a single employer. Ordinarily, the seaman has a different employer on each voyage. Longshoremen are also casual employees; the availability of jobs for them is uncertain, their employers frequently change, and their working conditions do not include many of the amenities which make shoreside employment desirable. A good part of the instability of the maritime industry has stemmed from this casual nature of the employment. Management and unions have worked hard, and will continue to do so, to eliminate the casualness of employment, and to establish more secure tenure. We are told by our brethren in the other unions that the Panama Line provides comparatively stable and steady employment for from 600 to 1,000 longshoremen and other related crafts. Since the Panama Line ships run on schedule, on a fixed route, and always tie up at the same piers in New York and the Canal Zone, they provide exception ally steady employment for the longshoremen, checkers, electricians, and other crafts engaged in loading, maintaining, and servicing them. The elimination of 1,000 steady jobs would be a serious blow to the maritime industry. I am sure you Members of Congress know that the maritime industry is in a deeply depressed condition. Only about 20 percent of the qualified and documented American seamen are now employed in the industry. At the end of World War II we were the greatest maritime power in history; today we rank fourth, after Great Britain, Norway, and Liberia. We see much evidence that the Communist powers are catching up with us on the high seas. As shipping declines, so does shipbuilding, stevedoring, and all of the industries which are primarily dependent upon the maritime industry. As these industries decline, skilled craftsmen leave the waterfront and find employment elsewhere. The result is that, in spite of all the billions we have spent on national defense, the lack of an adequate merchant marine poses a very serious and dangerous defense problem. Under these conditions, we do not think the Government ought to eliminate 1,000 waterfront jobs, and thereby drive many skilled craftsmen out of the industry. Much of American industry is in the age of automation. The maritime industry is approaching that age. In the foreseeable future highly mechanized techniques and automation will be applied to the building, operation, and servicing of ships. With wise planning, and cooperation between the parties involved, these developments could occur without sudden unemployment, and all the woes and miseries which accompany unemployment. We feel it is the duty of the industry, of labor, and of the Government to find the ways and means of improving the efficiency of our fleets without destroying the livelihood of working people. In other words, we don't think that working people should bear the whole burden of industrial progress. What is to be done with the Panama Line presents a similar problem. We do not believe that the Canal Zone and its people ought to be deprived of the steady and reasonably priced service they require, and that working people should be driven into unemployment, even for the benefit of a private ship operator. We think this is a case which requires the utmost deliberation, and that it should be viewed in the light of all of the facts, and then decided in such a way as to promote the best interests of our defense and prosperity. We think that decision will be to maintain the Panama Line. Mrs. SULLIVAN. Thank you very much, Mr. Murdock. I would like to ask you, if you could, whether you would break down this 1,000 steady jobs that you mentioned in your statement. Mr. MURDOCK. Madam Chairman, as I have previously pointed out, I am not the primary source of these figures. I believe that other witnesses are better able to break it down than I am. I think Mr. Munro, of the Central Labor Union and Metal Trades Council in Panama, has much more accurate figures than I. I have only the estimate. Mrs. SULLIVAN. We will wait until he comes on. follow shortly. Mr. Gross, would you like to start the questioning? He is going to Mr. GROSS. Mr. Murdock, you perhaps did not hear but you have been apprised, I take it, of the testimony of the Grace Line witnesses before this committee? Mr. MURDOCK. I believe I heard most of it, Mr. Gross. Mr. GROSS. You heard most of it? Mr. MURDOCK. Yes. Mr. GROSS. You still say that no one else can provide adequate service to the Panama Canal? Mr. MURDOCK. That is not my statement precisely. My statement is that I have seen no proof that they can or will. With particular reference to Grace Line, I am sure you are aware of the fact that they commenced a service on what is regarded as an essential trade route from the Great Lakes to the Caribbean and after a year they withdrew. I cannot see the Federal Maritime Board compelling an American operator to operate at a loss. I think, if Grace undertook to provide the service now provided by the Panama Line and found it unprofitable, that I cannot believe that the American Government would compel them to continue that operation and I think that is within the realm of the possible. Mr. GROSS. But if there were a long term firm commitment made by Grace Line, they would have to provide the service, would they not? Mr. MURDOCK. Unless discretion were left with someone to permit them to withdraw from that long term commitment. Mr. GROSS. I understand that, but, without that proviso, they would have to provide the service, would they not? Mr. MURDOCK. If they were compelled to, yes, sir. Mr. GROSS. I am not clear as to what you mean by unlicensed seagoing personnel. What do you mean by "unlicensed personnel”? Mr. MURDOCK. The crew on a ship under American tradition is divided into two groups. One is the licensed group, those who require licenses from the Coast Guard. They are the master and the mates and the pilots and the chief engineer and the assistant engineers. The rest of the crew constitute the unlicensed personnel. Mr. GROSS. You spoke of the billions we have spent on national defense. I notice that you did not say anything about the billions we have spent on foreign aid programs that have supported the economies of countries so that they could build ships and operate them under foreign flag in competition with us, using our tax dollars in competition with us. I am a little surprised that you did not mention that program. Mr. MURDOCK. I did not mention that program, Mr. Congressman, but I am well aware of it. I think that investigation would reveal that some of the fleets which are now in competition with American shipping in American commerce have been aided greatly not only by the foreign aid program but by our grants and loans. Mr. GROSS. They have indirectly been built with our tax dollars. Mr. MURDOCK. That is correct, I think. Mr. GROSS. And they are being operated today with our tax dollars. Mr. MURDOCK. That is correct. I think we are engaged in a process which is destroying the American merchant marine and it consists of a number of factors and a number of elements which I hope the Congress will look into. Mr. GROSS. You do agree that under certain conditions a substitute service could be provided to the Panama Canal that would still retain the fringe benefits to the workers in the Panama Canal? |