[H.R. 10327, 89th Cong., 1st sess.] A BILL To require operators of ocean cruises by water between the United States, its possessions and territories, and foreign countries to file evidence of financial security, and other information Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That when used in this Act: The term "ocean cruise" be defined as an ocean voyage for hire of passengers, other than a common carrier service transporting passengers from a port in the United States to ports in the possessions and territories of the United States or a foreign country, by a vessel of over 1,000 gross tons and having a capacity in excess of twelve passengers from the United States and return thereto during which time the itinerary of the vessel may include possessions and territories of the United States or a foreign country, and during which time passengers may disembark and reboard the vessel. The term "person" includes corporations, partnerships, and associations existing under or authorized by the laws of the United States, or any State, territory, or district, or possession thereof, or any foreign country. SEC. 2. No person shall arrange, offer, advertise or provide an ocean cruise by a chartered vessel, without first having filed with the Federal Maritime Commission (1) the name, address, and citizenship of the offering person; (2) the name, registry, official number, flag, and tonnage of the vessel to be employed in the ocean cruise; (3) the itinerary of the ocean cruise; and (4) a copy of a bond or other security, in such form as the Commission, by rule or regulation, may require and accept, for indemnification of passengers for nonperformance of an ocean cruise. The bond shall be issued by a bonding company authorized to do business in the United States or any State thereof, and such bond or other security shall be in an amount equal to the estimated total revenue for the particular ocean cruise. SEC. 3. Any person who shall violate this Act shall be guilty of a misdemeanor and shall be punished by a fine of not more than $5,000 in addition to a fine of $200 for each passage sold for the cruise. [COMMITTEE NOTE.-See the reports under H.R. 2836 from the Departments of Commerce and Defense, and the Federal Maritime Commission regarding H.R. 10327.] Hon. HERBERT C. BONNER, COMPTROLLER GENERAL OF THE UNITED STATES, Chairman, Committee on Merchant Marine and Fisheries, DEAR MR. CHAIRMAN: Your letter of August 10, 1965, invites our comments on H.R. 10327, a bill to require operators of ocean cruises by water between the United States, its possessions and territories, and foreign countries to file evidence of financial security and other information. We have no special information or knowledge that would assist in the consideration of H.R. 10327, and therefore have no comments to offer. Chairman, Committee on Merchant Marine and Fisheries, DEAR MR. CHAIRMAN: I refer to your letter of August 10, 1965, requesting the comments of the Department of State on H.R. 10327, a bill to require operators of ocean cruises by water between the United States, its possessions and territories, and foreign countries to file evidence of financial security and other information. Since the bill appears to be nondiscriminatory in its application, the Department of State has no objection. However, the Department believes that the particular substantive matters involved in the bill are within the competence of the Federal Maritime Commission and defers to the views of the Commission. Sincerely yours, DOUGLAS MACARTHUR II. Assistant Secretary for Congressional Relations (For the Secretary of State). THE GENERAL COUNSEL OF THE TREASURY, Hon. HERBERT C. BONNER, Chairman, Committee on Merchant Marine and Fisheries, DEAR MR. CHAIRMAN: Reference is made to your request for the views of this Department on H.R. 10327, to require operators of ocean cruises by water between the United States, its possessions and territories, and foreign countries to file evidence of financial security and other information. The proposed legislation is intended to prevent financial loss and hardship to persons who, after payment of cruise passage money, are stranded by the abandonment or cancellation of a cruise. It would require operators offering and conducting cruises to file with the Federal Maritime Commission evidence of financial security which would indemnify passengers for nonperformance of an ocean cruise. The Department recommends the enactment of the proposed legislation. The Department has been advised by the Bureau of the Budget that there is no objection from the standpoint of the administration's program to the submission of this report to your committee. Sincerely yours, EDWIN F. RAINS, Acting General Counsel. Mr. DOWNING. Our first witness today will be our colleague, the ranking minority member of this committee, the Honorable William S. Mailliard, the sponsor of one of the bills. STATEMENT OF HON. WILLIAM S. MAILLIARD, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA Mr. MAILLIARD. Thank you, Mr. Chairman. Mr. Chairman, if I might paraphrase an old saying "Old ships do not just fade away, they are employed in American cruise trades." And unless some remedial action is taken, thousands of our citizens, lured by misleading and extravagant advertisements, will continue to book passage on these old ships. There must be some protection provided to our citizens. It is because of my deep personal concern for the safety and welfare of our fellow citizens that I have introduced two bills-H.R. 2836 and H.R. 10109-on which you will hear testimony today. These bills are designed to require the licensing of foreign vessels engaged in the American cruise trades. Licensing is necessary to provide some measure of safety and financial responsibility in this burgeoning enterprise. As you mentioned, Mr. Chairman, the cruise traffic generated from American shores has increased substantially in recent years. It has been reported that 21 steamship lines will send 38 ships from our shores on 218 cruises during the heavy 7-month cruise season begin. ning in October. There are record bookings alone of 255,000 passengers for such cruises. This represents a 10-percent increase over the previous comparable period. It is anticipated that this cruise traffic will result in the peak expenditure of more than $150 million, of which $64 million will be spent in fares. There can be little doubt whatsoever that cruises constitute a big business. But, more particularly, it is the American market which constitutes one of the most lucrative in the world for such traffic. Last year nearly one-half million U.S. citizens departed from the shores of this country on ocean cruises. Nine out of every ten of these citizens boarded foreign-flag cruise ships. In view of this substantial patronage by the citizens of our country of these foreignflag vessels, it can most certainly be looked upon as a matter of legislative concern to insure that such vessels engaged in what is really our domestic trade maintain adequate safety and sanitary standards, and that the operators are financially responsible. All too often have unwary passengers placed life and limb in jeopardy by boarding some "floating junkyard," or suffered severe discomfort owing to substandard sanitary conditions, or lost their savings when some irresponsible cruise operator has cancelled the sailing at the last moment. The problem is not one unique to the United States. For example, there was the 1963 Christmas cruise of the SS Lakonia, which was advertised in the following terms, and I quote: Here is a holiday with all the risks removed. Here is a holiday you will remember, and talk about, for the rest of your life. What are you hoping for? Above all, perhaps, absolute freedom from worry and responsibility. There can be little doubt that the passengers on the cruise will remember it and talk about it for the rest of their lives. On December 22, 1963, 3 days out from Southampton, England, the SS Lakonia caught fire. The passengers and crew had to abandon ship. Seven days later, on December 29, while under tow, the SS Lakonia herself gave up and slid 211⁄2 miles to the bottom of the ocean. She was a 33year-old vessel, which about a year earlier had been headed for the scrap pile, when she was purchased by Greek interests and pressed into cruise service. The London Times of December 27, 1963, quoted Mr. Gordon Walker, the Labor Party's chief spokesman on foreign affairs, as commenting upon the Lakonia affair, and I quote: Whatever the technical national registration of the ship, the passengers were almost wholly British, and the cruise was organized by agents operating in this country. We must do our utmost to prevent any repetition of such a tragedy. Mr. Chairman, of the more than 600 passengers on the Lakonia, all but 21 were British. Ships potentially as dangerous as the Lakonia will soon be tying up at our ports to take aboard U.S. citizens on ocean cruises. What assurances do we now have that a fate similar to that which was met by unwary passengers boarding the SS Lakonia on December 19, 1963, does not lie in wait for our citizens? I can tell you— very little. Then, I say, in the words of Mr. Gordon Walker, we must do our utmost to prevent any repetition of the Lakonia tragedy involving our citizens. To this end I commend to your favorable consideration, the bills now pending before you. If I may add, Mr. Chairman, that it was never my purpose in introducing this legislation to either claim that the legislation is perfect or that it may not have flaws in it. As a matter of fact, I introduced two different versions because when I introduced the first bill I invited comment, and I got it. The second bill, I think, is an improved version. Perhaps it can still be improved further. Certainly, also, it was never my intention to close this trade to foreign-flag operators, but I do consider, and I think Mr. Walker's statement which I quoted takes somewhat the same view, that we cannot really escape some responsibility in what really is a domestic trade, because it is not taking people from our Nation to another nation but it is taking people on a cruise to nowhere. The mere fact it may stop at some other ports to me is not significant. These are people being taken from the U.S. ports and taken back to that same port and living on board the ship all the way. I cannot help but feel that we, on this committee, have some responsibility to see to it that our citizens can enjoy this in the certainty that the Government is protecting them against unwarranted risks, both financial and physical. I hope in the course of these hearings that we might be able to come to a consensus as to what we should do about it. Thank you, Mr. Chairman. Mr. DOWNING. Thank you very much, Mr. Mailliard, for a very fine and persuasive statement. I see Mr. Nicholas Johnson, the Maritime Administrator, in the rear of the room. I wonder if he would like to come forward and be seated up at the head table here. It is vital that you hear everything that is said, Mr. Administrator. It was my understanding Mr. Garmatz would be the next witness. Our next witness will be the ranking majority member of our committee who has introduced several bills on this subject, the Honorable Edward A. Garmatz of Maryland. Mr. Garmatz? STATEMENT OF HON. EDWARD A. GARMATZ, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MARYLAND Mr. GARMATZ. Thank you, Mr. Chairman. Mr. Chairman and members of the Merchant Marine Subcommittee. we have before us today several bills to regulate the operation of cruise ships, foreign and domestic, which sail from and return to ports of the United States carrying passengers on a round-trip basis. The bills are as follows: H.R. 10327. H.R. 6272, H.R. 2836, and H.R. 10109: Enactment of a law to effect the general purposes of these bills is urgent. Anyone at all familiar with the history of cruise operations will recall that, on a number of occasions in fairly recent years, citizens from many sections of our country who had paid the required fares and sometimes had come long distances to join the cruise, were subject to great inconvenience and/or severe financial loss because the operators of chartered vessels had failed to furnish the cruise as advertised and promised. My distinguished associate, Mr. Mailliard, will speak on behalf of his bills, and I am sure will explain in detail the particular advantages of his proposals. H.R. 10327, which I introduced on behalf of the administration, would require that promoters of ocean cruises on chartered vessels, file with the Federal Maritime Administration, along with pertinent information as to the operator, vessel, and itinerary, a copy of a bond or other acceptable security, for indemnification of passengers for nonperformance of the cruise. Anyone violating the act would be subject. to heavy financial penalties. H.R. 6272, which I had introduced previously, would seek to protect cruise passengers or prospective passengers not only financially, but from the equally important standpoint of safety aboard cruise vessels. As it is now, while Coast Guard regulations afford all possible assurance of safe travel to cruise passengers on vessels of U.S. registry. such assurance of safe travel does not necessarily apply to ships of foreign registry, which account for about two-thirds of all cruises from American ports. Many of the foreign ships, whether operated under charter or by the owner lines, are older than U.S. passenger liners can be to remain in service. Some of these foreign vessels certainly do not fully meet. our Coast Guard safety regulations. However, under the International Convention for Safety of Life at Sea, countries which are signatory to the Convention are the sole judges of the seaworthiness of their vessels, and the Coast Guard can do little about their condition. Most of the cruises operating out of our country's ports are run by shipping companies of the European maritime nations. They will object, I am sure, to the safety provisions of H.R. 6272, as an infringement upon their hereditary rights. However, this ocean cruise situation is something unique. It exists nowhere else in the world, and is supported almost completely by residents of the United States. The foreign cruise vessels sail from, and return to, ports of the United States, without taking on or discharging passengers in foreign ports. Thus, to all intents and purposes, these foreign vessels are enjoying the privileges of the U.S. coast wise trade, privileges that under our maritime laws are restricted to vessels of U.S. registry. In all justice and with due regard to the rights of our citizens who patronize these foreign ships, I feel that we must do something to correct the present unsatisfactory situation. This, my bill is designed to do. The bill isn't at all drastic. It merely would require that a foreign cruise vessel operating from a U.S. port be licensed by the Secretary of the Treasury, as long as he is satisfied that the vessel is in substantial compliance with the safety standards applicable to vessels of the United States. A further provision of the bill would require finding by the Secretary of Commerce that the operator is financially responsible and willing to abstain from practices which, in the Secretary's opinion, would be prejudicial to the operation of vessels of the United States. Assurance of safety of our people is not too much to ask, in return for the unique privilege accorded these foreign cruise ships. Mr. Chairman, that concludes my statement. If there are questions I should be happy to answer them. Mr. DOWNING. Thank you very much, Mr. Garmatz. Are there any questions to be asked of either of our colleagues? (No response.) |