Moreover, I might add that other AFL-CIO transportation unions in the airline, railroad and highway carrier fields have endorsed the views I am about to present, and have pledged us their support, just as we in turn have pledged our support to their respective positions regarding the Department of Transportation.

I might also add that certain of our views, as I will note later in this presentation, have been endorsed by the full AFL-CIO, so that with respect to these views we carry into these hearings the support of the entire organized American labor movement.

Now with respect to the Department of Transportation, I shall not attempt here to discuss all of the proposals made by the President in the transportation message which he sent to the Congress last March 2. Discussions of these proposals which relate to other modes of transportation—air, rail, and highway-I shall leave to the appropriate persons in those fields, and I shall confine my discussion to those proposals which relate directly to the maritime industry.

To begin with, I might note that the President's transportation message, while calling for the inclusion of the Maritime Administration in the Department of Transportation, and while setting forth a number of general proposals for improving water transportation, leaves unanswered many basic questions regarding Maritime's position in the proposed Department.

I might also note that the identical legislation which has been introduced in the Senate and House to implement the President's recommendations-S. 3010 by Senator Magnuson and H.R. 13200 by Congressman Holifield—similarly leave unanswered the same basic questions.

LEGISLATION NOT SPECIFIC REGARDING MARITIME'S POSITION

Neither the transportation message, in fact, nor the legislation which is now being considered by this committee, is specific about Maritime's position in the new Department, about the functions and duties of the Maritime Administration within the Department, or about what future Federal maritime policy will be-a matter with which maritime. labor is extremely concerned.

In fact, if one studies the proposed structure of the Department of Transportation, as reported by the Congressional Quarterly of March 25, 1966, and appended here (see exhibit 16, p. 487), one will note that all we really have here is a brief sketch of a new and mammoth Federal department within which the present Maritime Administration could very easily become lost in a bureaucratic maze.

The chart indicates, for example, that the proposed Department will have a Secretary, an Under Secretary, four Assistant Secretaries (one of whom will be an Assistant Secretary for Administration) and a General Counsel. But the functons of these officers are not delineated, nor are the lines of communication and responsibility between them and maritime clearly drawn.

What, in other words, is the channel of communication between maritime, at the bottom of this structure, and the Assistant Secretaries, Under Secretary, Secretary, and finally the President himself, at the top? Neither the chart, the transportation message nor the proposed legislation makes this clear.

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Nor do either the transportation message or proposed legislation make clear a number of other matters. The President stated in his transportation message that the proposed Department would embrace the Maritime Administration, but there is no clear indication in either the message or the legislation as to how the Maritime Administration will be constituted, what policies it will promote, or how much independence it will have in the promotion of these policies.

Certainly, with regard to policy, all of our past experience has taught us that whenever jurisdiction over maritime affairs has been delegated to Federal departments or agencies whose primary concern has not been the merchant marine, the merchant marine has suffered, and with it the Nation which should be the beneficiary of the contributions which the merchant marine can make to its commerce and security.

This has been true whenever maritime affairs have been in the hands of the Department of Agriculture, the Department of Defense, the Department of State or other Federal departments and agencies. It is true in the present instance, in which the Maritime Administration occupies a subordinate position within the Department of Commerce, and there is every reason to believe it would be true in the Department of Transportation, particularly since the role of the Maritime Administration is not clearly defined, nor are the lines of responsibility clearly drawn.

In light of this we feel very strongly that maritime would be completely swallowed up within the mammoth, complex structure of the proposed Department, that maritime concerns would be shunted aside or pigeonholed in a bureaucratic web, and that no proper representation would be given to maritime's interests which in many respects are far different from those of other forms of transportation.

OPERATIONS OF MERCHANT MARINE ARE INTERNATIONAL

The merchant marine, it must always be remembered, differs from other modes of transportation-except possibly the airlines-in that its operations are international in scope. In a sense, it is a political instrument, as well as an economic instrument and an instrument of our national defense, and each of these roles must be given its full share of considerations in the determination of maritime policy and the administration of maritime affairs.

In the proposed Department of Transportation, we strongly feel, none of those roles of the merchant marine would be given their full and proper consideration, and neither the best interests of the merchant marine nor the Nation would be served.

The merchant marine, we believe, would have a far better chance for survival and growth if its affairs were under the jurisdiction of a Federal agency whose sole concern was maritime.

For this reason, we strongly oppose inclusion of the Maritime Administration in the Department of Transportation and urge that the Maritime Administration be removed from the Department of Commerce and reestablished as an entirely independent and autonomous agency. And in this position, I might note, we are not only being supported by other AFL-CIO transportation unions, but by the entire AFL-CIO which endorsed the concept of an independent

Maritime Administration in Resolution No. 217 unanimously adopted at the AFL-CIO convention in San Francisco in December of last year. (See exhibit 17, p. 487.)

INDEPENDENT MARITIME ADMINISTRATION

Our reasons for favoring an independent and autonomous Maritime Administration are as follows:

1. The Maritime Administration now has no independent power and must compete with other programs administered by the Department of Commerce. Thus, the Merchant Marine Act of 1936 has not been properly administered and the inevitable result has been the decline of the American merchant marine. Putting Marad in a Department of Transportation would not alter this situation.

2. The creation of an independent agency to administer this country's maritime laws would focus greater attention on our decaying fleet, and the ultimate objective of revitalizing the industry and enabling the United States to meet its foreign commerce needs and defense commitments pursuant to the policy set forth in the Merchant Marine Act of 1936.

3. The present structure of the agency constitutes an inconsistency in government organization since, whereas the Federal Aviation Act of 1958 created the Federal Aviation Agency, thus giving independent status to aviation, the promotional activities of the merchant marine as well as administration of the subsidy program-were buried within the Department of Commerce by Reorganization Plan No. 7 of 1961. Also subsidy functions of the Civil Aeronautics Board are not to be included in the new Department of Transportation but the maritime subsidy functions will be included.

MERCHANT MARINE ACT OF 1936

4. The Merchant Marine Act of 1936 provided for a five-man independent Maritime Commission, to be appointed by the President with the consent of the Senate. The Commission functioned independently and conducted a survey which resulted in a long-range program of shipbuilding designed to provide some 500 new ships over a 10-year period. It was during this time that the "C" type vessel was designed for the carriage of cargo, and the passenger liner S.S. America was built. During the Commission's existence, between 1936 and 1950, an unprecedented strengthening of our merchan marine took place.

5. The Maritime Subsidy Board cannot now function independently as intended by the act of 1936 since its decisions are subject to review and veto by the Secretary of Commerce. An independent maritime agency, with a stronger and more independent Maritime Subsidy Board, would serve to cure these ills.

We are aware, of course, that some 11 different bills have already been introduced either in the Senate or House, with the overwhelming majority in the House-to make the Maritime Administration an independent agency, but while we favor the intent of these bills, we do not feel that any of them would provide us with the type of independent Maritime Administration which we really need. This is particularly true because none of the bills separate the quasi-judicial subsidy functions of the Maritime Administration from purely promo

tional and administrative functions and it is our strong feeling that the interests of the maritime industry would best be served by giving independence to the Maritime Subsidy Board.

The value of separating subsidy functions from other functions has already been recognized in other areas as in the case of the CAB which we have just cited--and it is our strong feeling that subsidy determinations are so important to the maritime industry that those charged with the responsibility for these determinations should be absolutely free to reach their decisions on the basis of the merits of the case, without regard to other considerations and without the overriding of their decisions by some other person who may be influenced by other considerations.

For this reason, we have drafted our own proposed legislation calling for the establishment of an independent Federal Maritime Agency, and a copy of this proposed bill is appended (see exhibit 18, p. 489). The manner in which our proposed bill would alter existing legislation is also shown (see exhibit 19, p. 491).

As can be seen from a study of these two exhibits, our proposed bill would not only establish an independent and autonomous Federal Maritime Agency, but within that agency the Maritime Subsidy Board would be a relatively independent body composed of the Maritime Administrator and two other members appointed by the President with the advice and consent of the Senate.

The Board would have complete and final authority to pass upon all matters related to construction and operating subsidies, and the affirmative votes of any two members of the Board would be sufficient for the disposition of any matter which comes before it. No single Board member, including the Maritime Administrator, in other words, would have the power to override the decisions of the other two Board members, nor would any other official.

The Maritime Administrator would also be appointed by the President with the advice and consent of the Senate, and he would be appointed with due regard for his fitness for the efficient discharge of the powers and duties vested in and imposed upon him by the bill. Previous employment by or previous pecuniary interest in any business or union associated with the maritime industry would not constitute a bar to appointment as Administrator. A Deputy Maritime Administrator, appointed by the Administrator under the classified civil service, is also provided for by our bill. The Deputy Administrator would at no time sit as a member of acting member of the Maritime Subsidy Board.

Thus, our bill would solve four of the most pressing problems now confronting the present Maritime Administration within the Department of Commerce.

1. It would establish a completely independent and autonomous Federal Maritime Administration.

2. It would establish a strong and independent Maritime Subsidy Board within the Maritime Administration, whose rulings would not be subject to veto by another agency or higher official.

3. By establishing such a Maritime Subsidy Board, it would separate within the Maritime Administration quasi-judicial subsidy matters from purely administrative and promotional matters. Yet a close liaison between the two functions would be maintained because the Maritime Administrator would be Chairman of the Board.

4. It would provide for the appointment of a strong Maritime Administrator who would devote a good portion of his time to promoting the merchant marine. Previous experience in the industry, either management or business experience, would not be a bar to his appointment as Administrator, and such experience could be considered as

an asset.

RESOLUTION No. 217: AMERICAN MERCHANT MARINE & MARITIME POLICY ADOPTED BY AFL-CIO CONVENTION

Whereas, the Merchant Marine Act of 1936 sets forth the intent of Congress that the United States shall have an American-flag merchant fleet capable of carrying a substantial portion of our waterborne commerce and of serving as a naval or military auxiliary in time of war or national emergency.