I do want to make just one point, however, that from all that I know and can find out, commercial steamship lines as well as air carriers are fit, ready, willing, and able to perform the necessary services, for both cargo and passenger traffic, to and from the Panama Canal Zone.

I understand that the committee has a letter from the Air Transport Association indicating that several U.S. international air carriers are willing, able, and ready to perform all the necessary service and provide adequate service for the Canal Zone.

I believe that the testimony has either been given, or will be given, that the commercial steamship lines that serve that area also are willing and able to provide service and at a reasonable price for the

area.

I should like to point out that not too long ago considerable opposition was expressed to repeated proposals to get another Governmentowned-and-operated water carrier, the Inland Waterways Corporation, out of the commercial transport field. Yet, it was finally accomplished-it took a good many years to do it-and to our knowledge the users of barge service along the affected routes have been most pleased with the service performed by the privately owned Federal Barge Lines. However, I can recall testimony many, many times in which the users of the Federal Barge Lines, when owned by the Government, expressed their apprehension about whether or not they would have adequate service if this federally owned bargeline went out of existence or went into private hands, or if somebody else was to handle the business. It has worked out fine. Everyone seems to be happy and the Government has gained considerably by this because now it has a new taxpayer on the rolls.

I am certain that members of the subcommittee appreciate the fact that the United States is quite unique in that it stands alone today among major democratic nations as an exponent of private enterprise in transportation. The membership of TAA, including its nearly 50 percent users of transport service of all kinds, and these are users, domestic as well as international, want to keep our Nation unique in this respect.

We believe that this signifies the principles on which we are operating today in competition with other idealistic systems, policies, and governments that exist.

We believe that transportation possibly is the heart of maintaining this privately owned and operated system and the democratic principles that we are functioning under in this country today.

If you have a breakthrough in transportation at any time, and it is felt necessary for the Government to move into this field more, then likewise it indicates to these other countries that we are sliding more in that direction of government taking over other industries.

Therefore, the association will continue to oppose any Government transport operation that competes directly with privately owned and operated carriers and which performs services these carriers indicate they are willing and able to provide.

So the Panama Line, in our opinion, falls clearly into the category of an unnecessary commercial-type Government transport operation. TAA urges your subcommittee to indicate its support of the directive to the Panama Line to cease its commercial operations.

Mrs. SULLIVAN. And the quotes that you heard, where did you obtain them?

Mr. HAMMOND. This is taken from one of the services that apparently got a hold of a copy of the Drake report and made these available. We have had this, I suppose, a year now in our files, these figures.

Mrs. SULLIVAN. That is all.

Excuse me, Mr. Johnson.

Mr. JOHNSON. I have just one last question.

Am I correct in assuming that your organization is dealing more with policymaking rather than a factfinding association?

Mr. HAMMOND. Correct. All of our research is aimed toward policymaking. We did not attempt to get, and I would not be able to verify any of these figures here. It would be foolish for me to try to do so. We just do not have that large an organization to go into those things. Mrs. SULLIVAN. Mr. Tupper?

Mr. TUPPER. I have no questions.

Mrs. SULLIVAN. Do you have anything further?

Mr. GARMATZ. This is probably a little off the subject.

You spoke about turning Government business back to private enterprise. What is your feeling as to the Government shipwork going back to private yards, new ships and construction and repair? What is your organization's feeling on that?

Mr. HAMMOND. We do not have a position on that, and I would not be able to express it.

Mr. GARMATZ. You have not followed it at all?

Mr. HAMMOND. We have not gotten into the international field as far as possibly some of the others have, and I suppose it is primarily because we have been so preoccupied with many domestic problems involving all forms of domestic carriers. We have not gone into it a great deal.

Mrs. SULLIVAN. Counsel has several questions.

Mr. ZINCKE. Mr. Hammond, in your statement of policy at the bottom of page 1, you mention "adequate privately owned transportation facilities."

You did not attempt to determine the adequacy of the privately owned transportation facilities that seek to supplant the service of the Panama Line, did you?

Mr. HAMMOND. No; we did not.

Mr. ZINCKE. You do not know whether the exporters of Panama will be furnished comparable service by any private line?

Mr. HAMMOND. I understand that there will be testimony brought

out.

Mr. ZINCKE. But you do not know?

Mr. HAMMOND. I do not.

Mr. ZINCKE. So that, you have no basis for the application of this policy to this particular situation at this time?

Mr. HAMMOND. I say on page 3:

It appears to us that if assurances are received from commercial carriers that they will furnish adequate freight and passenger service to the Panama Canal Company at reasonable rates, the Panama Line should be discontinued.

I did check this morning, just as a double check, with the Air Transport Association because I had not seen that they had any witnesses appearing. I understand, however, they have put a letter in, and

the letter says that the airlines are willing and able and ready to provide adequate service. I cannot believe that the steamship lines that are interested in this would not come up with the same kind of

an answer.

Mr. ZINCKE. Now, you are aware that there is a Steamship Conference in existence between the Atlantic and gulf and the Canal Zone, are you?

Mr. HAMMOND. Yes; I am.

Mr. ZINCKE. And are you aware of the membership of that conference?

Mr. HAMMOND. No; I am not.

Mr. ZINCKE. Is it your position that when you referred to privately owned transportation facilities, you mean U.S. privately owned transportation facilities or do you mean any privately owned transportation facilities?

Mr. HAMMOND. I would prefer to stick to the U.S. private lines. Mr. ZINCKE. You would?

Mr. HAMMOND. Right.

Mr. ZINCKE. Would the fact that of the six conference members that would presumably remain members after the withdrawal or discontinuance of the Panama Line, four of them are foreign-flag operators, change your position at all with respect to this situation? Mr. HAMMOND. No.

Mr. ZINCKE. Is it not a reasonable assumption that the foreign-flag operators would get the majority of the business that would be sur rendered by the Panama Line?

Mr. HAMMOND. I would hope not.

Mr. ZINCKE. This is not a question of "hope," sir. It is a question of expectation.

Mr. HAMMOND. I do not know how that, however, affects the Panama Line. I do not see the relationship there.

Mr. ZINCKE. I am simply testing your statement of policy in which you make the general statement "where adequate privately owned transportation facilities are available." I am asking you whether your policy goes to where the privately owned transportation facilities are foreign flag.

Mr. HAMMOND. No; they do not. This is not a part of our policy. I think that, as far as we are concerned, we would like to do everything we can to see that it leans to or is in favor of the American flag carriers. Our policy was developed on that basis.

Mr. ZINCKE. But in this instant situation, of which you had no awareness when you made this statement, only two out of six, onethird of the carriers are American flag.

Mr. HAMMOND. That is right.

Mr. ZINCKE. I asked you whether that would change your position in any respect and you did not answer.

Mr. HAMMOND. It would not change our position as far as our policy is concerned.

Mr. ZINCKE. Even though the prospect is that two-thirds or at least a majority of the business would go to other countries?

Mr. HAMMOND. Well, I am not sure that that would be the case. Mr. ZINCKE. I am not sure of it, either, sir, but the prospects are that that is the case, are they not?

Mr. HAMMOND. But I think that, of course, if the situation requires other types of support, that is something for us to develop our positions on and support because we are bound to help support a strong U.S. flag merchant marine.

think that if you are talking about foreign competition, that is another subject that we have not gone into to any extent up to date, but it is something that we might be willing to go into.

Mr. ZINCKE. Would not the elimination of this line be likely to strengthen the foreign competition because it would be making available business to our foreign competition?

Mr. HAMMOND. So long as our American lines provide good service at reasonable rates and have the capacity, and I understand they have plenty of capacity to handle the needs of the Panama Canal Zone and its people, in our free enterprise system, we have to go on the basis of taking our chance that they will get their fair share or more than their fair share.

Mr. ZINCKE. Their fair share in this case would be one-third, would it not?

Mr. HAMMOND. If you take it in terms of number of lines, yes, but I would hope, using that word if I may once more, that our steamship lines would get more than one-third.

Mr. ZINCKE. Your position here is that the Panama Line should be eliminated although at least it is American flag operation, on the hope that American lines will be able to pick up an appreciable part of its business. Is that a fair statement of your position?

Mr. HAMMOND. That is correct.

Mr. ZINCKE. That is all I have, Madam Chairman.
Mr. SULLIVAN. Are there any other questions?
Thank you very much, Mr. Hammond.

Mr. HAMMOND. All right, thank you.

Mr. SULLIVAN. Our next witness today is Mr. Ralph Casey, former staff member of this committee, and a capable spokesman for the shipping industry.

I think Mr. Casey definitely thinks the Panama Line should cease operations, and I am sure he will make a persuasive case on that point of view.

STATEMENTS OF RALPH E. CASEY, PRESIDENT, AMERICAN MERCHANT MARINE INSTITUTE, INC.; ALVIN SHAPIRO, VICE PRESIDENT, AMERICAN MERCHANT MARINE INSTITUTE, INC.; J. ARTHUR MARQUETTE, VICE PRESIDENT, UNITED FRUIT CO.; WILFRED J. MCNEIL, PRESIDENT, GRACE LINE; AND MANUAL DIAZ, VICE PRESIDENT, GRACE LINE

Mr. CASEY. I would like to have Mr. McNeil, Mr. Marquette, and Mr. Shapiro sit with me, if I might.

Mrs. SULLIVAN. Before you begin, Mr. Casey, let me say this about our respective positions. In opposing the Eisenhower order on the Panama Line, as I did, until we can get all of the facts on the record, and in pushing through the resolution last summer on the Panama Line, I felt strongly that we should not throw away a valuable Government resource, one that we have always regarded as indispensable to the Panama Canal; but I would not want the impression to be given

that I am against subsidies for American-flag ships or that I am not aware of the strategic and economic importance of the American-flag merchant marine.

You know from my record where I have always stood. I have always supported the American-flag lines in their efforts to compete for world trade; not only supported but helped to battle through the 50-50 law even though there is not an oceangoing ship within hundreds of miles of St. Louis. I worked for it on Public Law 480 and I voted in this committee, time after time, for the advancement and protection of the American merchant marine, so that I think I have a pretty good record to go back to and to back up my efforts here to get at the real facts now as regards the Panama Line.

With that somewhat personal statement, let us hear from Mr. Casey.

Mr. CASEY. Thank you.

Let me say that we concur in the fact that all the facts should be put on the table. We did feel, however, that this has been going on for some time. There has been general knowledge of the facts, both in this committee and in the industry, and we felt that after the complete study that was made by the administration that the order should stick. That is "water over the dam" now, anyway.

I will identify myself and ask these gentlemen to identify themselves. My name is Ralph E. Casey, president of the American Merchant Marine Institute.

Mr. MCNEIL. My name is W. J. McNeil, president of Grace Line. Mr. MARQUETTE. My name is J. Arthur Marquette, vice president of the United Fruit Co.

Mr. SHAPIRO. I am Alvin Shapiro, vice president of the American Merchant Marine Institute.

Mr. CASEY. I have a statement that I would like to read into the record.

Mrs. SULLIVAN. You may proceed.

Mr. CASEY. The American Merchant Marine Institute is an organization representing the owners and operators of American-flag ships constituting a vast majority of the American merchant marine. Among our members are those who operate oceangoing ships of all types from ports on all four coasts of the United States.

We deeply appreciate this opportunity to express our views in connection with the Panama Line. I am also authorized to state that the views expressed herein are concurred in by the Pacific American Steamship Association.

The Panama Line operates in direct commercial competition with the American-flag ships of Grace Line and the United Fruit Co. The line's commercial business over the past 5 years has been approximately two-thirds of its total business. This direct competition from a Government-owned ship line results in severe financial losses to these two privately owned American lines operating in the Caribbean. Our organization is concerned with the conflict involved in the continuation of the line on its present basis and our basic maritime policy as embodied in the Merchant Marine Act, 1936, which provides that the U.S. merchant marine be owned and operated by private American citizens.

The problem as we see it really consists of two separate questions. The first centers around the issue of prohibiting this line from com