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natives looked at for inclusion within it. It is, as you know, not completed. There are continuing discussions going on.

I frankly don't know, sir, if a decision were to be made in the immediate future what impact it would have on this budget, but I could. assume that it's a long-term program in concept and its impact on this immediate fiscal year 1968 budget would probably be relatively minor and that the considerations of the program would be cranked in or more clearly seen, I think, beginning in 1969.

Mr. DOWNING. But it could be placed in fiscal year 1968; is that right?

Mr. TROWBRIDGE. I believe there could be some impact on this budget, yes, sir. I don't honestly know how much.

Mr. DOWNING. Mr. Secretary, in view of the declining merchant marine, the 13 ships which you propose would appear to be inadequate, and I followed very closely the manner in which you justified. this allocation. How many applications for ship construction subsidy do you have on file now?

Mr. TROWBRIDGE. Could I ask Mr. Gulick to comment on that?

Mr. GULICK. Mr. Downing, we have, as you know, contracts with 14 operators whose requirements for ships are spread over the period of their contract. I think probably the best answer to your question is that, under the present contract commitment schedule, we are some 81 ships behind. We may as well face this, but there is a bright side. to this picture. We are fairly current with the requests for fiscal year 1966-67-68. We are still 81 ships behind if we had constructed with Government funds every ship called for in the operators' contracts.

But in view of the breakthrough which has taken place in the last 2 years resulting in far more efficient, speedy, productive, cheaperto-operate ships, and I should say don't overlook the much higher revenue that they will bring in, we feel that this 81-ship backlog can be accounted for within a relatively short time even at the 13-ship-peryear level.

The reason I say this is that in some of these cases one of these new ships will take the place of two or more of the ships which are now in service on the routes. We feel that these Lash ships, these Lykes sea barge ships, the Moore-McCormack full container and Ro/Ro ship are prototypes of the ships of the future and for this reason the fact that we are 81 ships behind does not at this present time pose an immediate problem.

Mr. DOWNING. What is the date of your oldest application for construction subsidy?

Mr. GULICK. I would say, Mr. Downing, approximately 12 years ago we received an application, I believe from States Marine, but this has during that period of time been considered, amended, changed so that in the case of all applicants we have before us I would say the present clean application is not over 3 or 4 years of age. I beg pardon. I am just advised you asked about construction subsidy. I was speaking of operating subsidy.

Mr. DOWNING. Construction subsidy.

Mr. GULICK. I am sorry. I misunderstood you. The oldest application we have for construction subsidy is approximately 2 years old, to my recollection.

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Mr. DOWNING. You are just asking for 13 ships this year?

Mr. GULICK. Yes, sir. May I add one other point there that might help clarify this. Some of the operators from time to time are quite willing to defer their contract commitments to a later period of time. They have just gotten, for instance, in some cases, a new flight of ships. They want to put those on the route and see how they are operating, how they will turn out before they determine that they are ready to go into other new types of construction.

Mr. DOWNING. Would it be fair to ask you how many ships you requested in your initial budget?

Mr. TROWBRIDGE. The Maritime Administration requested in their original recommendation, I believe, 30 ships. Is that correct? Mr. GULICK. Yes, sir.

Mr. TROWBRIDGE. This was forwarded by the Secretary of Commerce as part of the recommendation to the Bureau of the Budget.

Mr. DOWNING. So that the Department requested 30 ships. Obviously you felt that a larger number than 13 was needed?

Mr. TROWBRIDGE. In fiscal 1967 there was requested of the Bureau of the Budget 30, and 13 was the final allowance. This is a matter of the difficulties of squeezing a budget into manageable proportions. Mr. DOWNING. A matter of priorities?

Mr. TROWBRIDGE. Yes, sir.

Mr. DOWNING. That is the lower priorities of the merchant marine, but that has been the case for a number of years with the merchant marine. I have a number of questions on the Savannah. A number of us are disappointed that the Savannah will be laid up and a number of us are still not convinced that this is the proper thing to happen to this vessel.

What was the revenue that this ship produced during its short career?

Mr. TROWBRIDGE. If I am not mistaken, the commercial revenue that came last year from the Savannah was about $2.2 million.

Mr. DOWNING. What was the expense if you limited it to the ship itself and not to the shore installation?

Mr. TROWBRIDGE. The total operating expense was $3,405,000 estimated for the second year of operation. Total revenue was $2.1 million. Mr. DOWNING. That is not my question.

Mr. TROWBRIDGE. I am sorry.

Mr. DOWNING. If you limited it to the ship itself and not the shore installations and allied installations.

Mr. TROWBRIDGE. The estimate for the second year for the vessel expense, as we would classify it, would be about $2 million.

Mr. DOWNING. So you would have an excess of expenses over income of around $200,000 on the profit side?

Mr. TROWBRIDGE. If you were to compare only vessel expense with total revenue, yes, sir, but of course you have to consider cargo and terminal expenses, overhead, as part of the operating expense of the vessel.

Mr. DOWNING. Well, in an experimental ship such as this, I don't know how much importance you can place on that figure. What is the total cost of this vessel today?

Mr. TROWBRIDGE. To replace it new?

Mr. DOWNING. The total cost of the Savannah to date.

Mr. TROWBRIDGE. Mr. Gulick would estimate the total cost at somewhere around $99 million.

Mr. DOWNING. Why can't this ship be placed to some use particularly in these critical times?

Mr. TROWBRIDGE. We are looking at that, Mr. Downing, and I think even though she would be in layup condition, there may be well some training capabilities, some other use to which we could put the vessel during layup where we would be able to at least have some use out of the vessel, at the same time having these savings in operating expenses.

Mr. DINGELL. Will the gentleman yield to me?

Mr. DOWNING. I yield.

Mr. DINGELL. Mr. Secretary, you have a tremendous demand for vessels between this country and Vietnam, am I correct?

Mr. TROWBRIDGE. Yes, sir.

Mr. DINGELL. Why would it not be possible to utilize this vessel for carrying cargo to Vietnam?

Mr. TROWBRIDGE. Again it is a question of the limited cargo capability of the vessel and the high cost of operation.

Mr. DINGELL. How does her cargo capability, speed, turnaround time, and operating costs compare, let's say, with some of the Victorys and Libertys that you have broken out of storage for the same trade? Mr. TROWBRIDGE. Can I ask Mr. Gulick to comment on that?

Mr. GULICK. Mr. Dingell, the comparison here is very vivid. The Victory, the C-2 type which is in the service today in Vietnam is a good, solid, fairly reasonable operating cost type of ship. While the Savannah has approximately, but probable a little less than, the carrying capacity of the Victory-type ship, the cost of not only operating the ship to get the cargo to Southeast Asia but the limited cargo handling capabilities on the Savannah would make this operation almost prohibitive.

In other words, again this is a comparison, if you will forgive me, of an apple with an orange. They are not the same type thing. Mr. DOWNING. May I?

Mr. DINGELL. Yes.

Mr. DOWNING. I have just a few questions more.

How many miles has the Savannah got left in her right now?

Mr. TROWBRIDGE. How many miles of operating capability?

Mr. DOWNING. I understand she has two cores and has used one half of one core so that you have a core and a half left. How many nautical-miles could you go right now without refueling?

Mr. GULICK. Mr. Downing, if I may answer the question, the present core in the Savannah has approximately a year and one-third left in her.

Mr. DOWNING. Of continuous travel?

Mr. GULICK. Of continuous operation.

Mr. DOWNING. And you have an additional core for the Savennah that would take you how far?

Mr. GULICK. That would run perhaps for anywhere from 4 to 6 years.

Mr. DOWNING. So you have about seven and a half years of service at no cost so far as fuel.

Mr. GULICK. That is correct, sir.

Mr. DOWNING. How much is it going to cost to deactivate her and remove the cores and so forth, total cost?

Mr. GULICK. If she is placed in what we term a cold iron watch, which merely means that she is put in the pantry as she is, power shutdown with a reactor crew of approximately seven people watching over the ship, the cost would be somewhere around $1.3 million.. If, however, she is to be defanged, the core taken out, all of the components sanitized so as to make her fit for layup as a dead ship in a reserve fleet somewhere, the cost would probably run, and we are working on these figures at the moment, somewhere around $5 million-plus.

Mr. TROWBRIDGE. I might add, Mr. Downing, that our plan is to keep her in layup condition, not to defang her.

Mr. DOWNING. Then you would have to have a continuous reactor crew onboard, would you?

Mr. TROWBRIDGE. It would be a standby crew for maintenance. The CHAIRMAN. Would the gentleman yield?

Mr. Secretary, I know that there are a lot of people interested in the Savannah, and I know the hearings will go on tomorrow. Is it possible for you to give us a breakdown on the Savannah, the cost, the installation? Is it possible to have some of that tomorrow? It might save us some time.

Mr. TROWBRIDGE. Yes, sir; Mr. Chairman. We can provide as much information as we have today and get together by tomorrow.

The CHAIRMAN. You say you have an appointment before lunch? Mr. TROWBRIDGE. Yes, sir.

The CHAIRMAN. Bring anything that you think is of importance about the Savannah tomorrow.

Mr. DOWNING. Mr. Chairman, I have many more questions, but I will defer on behalf of my colleagues. I would just like to say that under the circumstances, it does appear that the layup of the Savannah is not justified, and I hope that the Maritime and the Department of Commerce will take another look at it.

The CHAIRMAN. Bring any information you have at all. Anything on the company that is running the ship will be acceptable. I think it will save a lot of time.

Mr. TROWBRIDGE. Yes, Mr. Chairman.

The CHAIRMAN. I appreciate that.

Mr. Mailliard?

Mr. MAILLIARD. Thank you, Mr. Chairman.

Mr. Gulick, I am interested in your figure of being 81 ships behind because, if I recollect figures that I got from your office a year or so ago, you gave a figure of 98, and I have in front of me something out of your office that has a figure of 127.

Mr. GULICK. Mr. Mailliard, may I say, of course, somewhat facetiously that we run into this same problem. The figures I have of 81 are the result of the most current review and take into account the fact that as, for instance, in the case of the Lykes Sea Barge carrier, three LASH ships will replace some 13 C-2 ships which normally would have been replaced on a 1-for-1 basis. So this adjusts the figure to a

new net.

Mr. MAILLIARD. Just so we know what the figure is, but I assume that the figure in this document is correct, that there are 127 ships.

which have reached the end of their economic life and must be replaced not necessarily by 127 ships but we have 127 overage ships that are being operated now.

Mr. GULICK. It agrees with our figure, yes.

"Mr. TROWBRIDGE. We have a figure of 126.

Mr. MAILLIARD. Well, I just thought the record ought to show that you just say 81 ships behind without identifying, and what you are really saying I gather is that the 81 ships which you say are behind would replace the 127 overage ships?

Mr. TROWBRIDGE. No, sir. We have, according to our figures here, 126 ships which are overage or over 20 years now operating, and we have four ships which are overage under charter or a net total of 122. We have replacements now under contract or in some phase of construction for 41. The net replacement contracts not yet executed and, therefore, behind schedule are 81. That is how we reach that 81 figure.

Mr. MÁILLIARD. I am not sure I understand, it is awfully difficult to get agreement as to what the figure is at any given point. The way you explain it there sounds to me as if you don't have a factor that Mr. Gulick mentioned, that a new ship may replace more than one old ship. It seems to me we ought to know whether we are talking about new ships that ought to be built or old ships that ought to be replaced, referring to these numbers.

Mr. GULICK. Mr. Mailliard, in an effort to clarify, I was talking about the 81 that we are now behind in contract commitments. I am not talking about the 126 or 127 overage ships which are still operating, the full number. We are only about halfway through replacing the total number of 315 subsidized ships which we support today.

It is our earnest hope, however, that in this replacement we will be able to get a ratio something like the Lash barge ship or the Lykes ship which will reduce the total number of ships required to fully replace the number in our fleet today.

Mr. MAILLIARD. Then do I gather that you don't have any aspirations to improve the total capacity of the merchant marine, that you just want to keep it at its present level?

Mr. GULICK. No, sir. There will be an increase in capacity even though fewer ships are put into the fleet. However, in all good conscience I have to say that we share with you a great interest in the merchant marine program which is now in the process of develop

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Mr. MAILLIARD. Well, that brings me to another question. Last year I attempted to get the then Maritime Administrator to answer the question as to who in the Government is really responsible for developing maritime policy. I didn't get an answer, but now it has become even more complicated because we have all over the press Mr. Boyd is charging around talking about new maritime policy when, as I see the law, you, Mr. Acting Secretary, are responsible. What is the situation? Who is minding this store?

Mr. TROWBRIDGE. Well, sir. we all work for the same administration. We all are involved in this attempt to bring the answer of what should be and what is our long-range maritime policy and program. Mr. Boyd with his responsibilities for general concern with transportation of all phases, although he does not have as part of his organizational structure the Maritime Administration, obviously cannot over

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