conference concerned we were able to achieve lower export freight rates.

But this study is still going on, and as a matter of fact I will leave this afternoon for Paris for further consultations with foreign governments. Most of these rates, of course, are made by conferences which consist mostly of foreign steamship lines. Our attempts to obtain data have entailed diplomatic negotiations over a period of a year and a half.

The CHAIRMAN. What arrangements have you made in cooperation with the State Department for agreement on foreign nations to obtain the information needed on ocean transportation charges? Hasn't there been an arrangement made?

Admiral HARLLEE. Yes, there was an arrangement made, Mr. Chairman, and one which we think is very satisfactory, and we are now in the process of consulting with these foreign governments about the results of the information which we received.

However, that arrangement was a one-shot deal. It pertained to the year 1963, the latest one in which we could get information at the time the negotiations started. We still have the problem of being able to get this information on a continuing basis.

That is one of the two major subjects to which the conference now going on in Paris is addressing itself, i.e., to set up a procedure whereby we can get this type of information in the future, without harm to foreign relations, or our own American merchant marine.

The CHAIRMAN. I think it is a step forward, because we have had almost adamancy on the part of some foreign lines to furnish information in the past, so at least this is not all we would like, but you consider it a step forward?

Admiral HARLLEE. I consider that the State Department has cooperated with us, and I believe we have worked together very well. And I know we have more information concerning tonnages and revenues, the type of information needed to analyze the freight rate structure, than has ever been held by any government in the world.

The CHAIRMAN. All right. Now the Maritime Commission, of course your rules are very important to Alaska, Hawaii, and Puerto Rico. Have there been many freight rate increases to these areas in the last few years?

Admiral HAPLLEE. There have been some freight rate increases, but on the other hand, there has been one freight rate decrease by a major line, almost a dominant line, in a major trade. There has been one disapproval by the Commission of a general rate increase. There have been many investigations instituted.

I might say it is to my knowledge the first general rate decrease in the domestic trade. That was to Hawaii, involving Matson Line. And also for the first time a general rate increase was disapproved by the Commission-that was to the western part of Alaska.

The CHAIRMAN. I know the Senator from Alaska has some questions on that subject.

Senator BARTLETT. Thank you, Mr. Chairman. Is the Commission engaged in a study of Alaska transportation?

Admiral HARLLEE. Yes, Senator Bartlett, in what will undoubtedly be the most comprehensive study of domestic offshore freight rates ever made by the Maritime Commission or its predecessors. At this

moment Mr. Paul Gonzales, of the staff of the Commission, is in Alaska to get information. We have been gathering information at such a rate that it has involved a total of 4,200 inquiries sent out by the Commission, to which we have received the rather unusually good response of 14 percent.

We are aproaching it from about six different angles, and we are hoping in September to conclude the study and be able to make recommendations and to take action which will be helpful to the public of Alaska.

Senator BARTLETT. You mean the data will be collected in September, or the report will be ready in September?

Admiral HARLLEE. Our target date for the completion of the report is the end of September. The data is being compiled now.

Senator BARTLETT. What is the situation regarding the rate levels in Alaska? Have they been unchanged for the last couple of years? Admiral HARLLEE. No; there have been changes.

Senator BABTLETT. Across the board?

Admiral HARLLEE. There was a general rate increase, yes.

Senator BARTLETT. What percentage, if you know?

Admiral HARLLEE. That was 10 percent. That was from an old docket known as Docket 881. However, that was not in the past 2 years, but 4 years ago.

Senator BARTLETT. Have there been any changes since then, up or down, on particular individual commodities?

Admiral HARLLEE. Yes; there have been.

Senator BARTLETT. Up or down?

Admiral HARLLEE. There have been many down, and some up. Senator BARTLETT. Any substantial effect on the overall rates? Admiral HARLLEE. Yes, the average rate level has been reduced somewhat.

Senator BARTLETT. Now you and your fellow commissioners of course have a very important assignment, one which is of really as much concern to the citizens in Iowa as the citizens in the coastal States. What could you tell us as to the present state of the U.S. merchant marine?

Admiral HARLLEE. The U.S. merchant marine is having great difficulties and problems now. Of course currently they are in the throes of a strike which started on June 16. They have problems with regard to oncoming obsolescence of the ships, they have problems of diminishing strength. But I would like to say, with regard to the Federal Maritime Commission, Senator Bartlett, that those parts of the American merchant marine which are regulated by the Federal Maritime Commission are the parts which are having the least financial and other difficulties and problems. That sounds a bit startling, but it must be pointed out that these are also the parts of the American merchant marine which are subsidized. The parts of the American merchant marine which are having the greatest difficulty, which are dwindling in number, are specifically the tramps, the bulk carriers, the ones which are neither regulated nor subsidized.

Senator BARTLETT. And they are going down?

Admiral HARLLEE. They are going down. Now the segments of the American merchant marine which are regulated, according to statements from the American merchant marine organization, known as

CASL, Committee of American Steamship Lines, during the past few years of increased regulation, have had a slowly increasing percentage share of general cargo carried in the foreign trades. The financial reports from them indicate over the past 2 or 3 years of more effective regulation that their revenues are slowly increasing rather than decreasing.

They, of course, now are now having labor problems. But the Federal Maritime Commission's operations, I believe, have been helpful in strengthening the American merchant marine rather than the contrary.

Specifically, we have interceded in Uruguay in the matter of discrimination against steamship lines there. The Commission also made a judgment on a Brazilian coffee pool which was an unpopular decision with the steamship lines, but which has resulted, to date, in increased participation and increased revenues to American-flag lines. and I believe that the Federal Maritime Commission has strengthened rather than weakened the American merchant marine. I do acknowledge that, as a whole, the American merchant marine is waning and having great troubles."

Senator BARTLETT. The American freight carried abroad on American ships has tended to decrease over the years, has it not? The amount of freight?

Admiral HARLLEE. Yes, it has, Senator Bartlett. However, that is when bulk cargo as well as general cargo is included. In the matter of general cargo, package-type cargo, over the past 2 or 3 years it has been fairly steady, with a slight increase. But overall the percentage carried has decreased steadily through the years. There is no question about it.

Senator BARTLETT. It has been said our liner fleet is the finest in the world. Would you agree with that?

Admiral HARLEE. Yes, Senator.

Senator BARTLETT. What do you see ahead in the next 10 years for example, both in respect to that element of the merchant marine that is regulated by the Federal Maritime Commission, and that which is not? Are we going to make headway without some dramatic intervention by the Congress by way of legislation? If we let things go as they are, what is going to happen?

Admiral HARLEE. I can only say that with regard to the operations of the Federal Maritime Commission, Senator, I believe that the American merchant marine will become strengthened. As to the other problems which are not under our jurisdiction, it would be, I believe, purely speculative for me to comment upon them.

Senator BARTLETT. In any case, things have not been going well with that segment of the industry, have they?

Admiral HARLLEE. That is right, Senator.

Senator BARTLETT. That is all, Mr. Chairman.

The CHAIRMAN. Are you familiar with the fact that the whole maritime picture is now under active review by the Commerce Department?

Admiral HARLLEE. I am not only familiar with it, Mr. Chairman, but I made a special request to be put on as an observer on the interdepartmental task force which is handling that, because I would like to give any possible assistance we can to this.

The CHAIRMAN. I am glad you did that, because I think we need all of the leadership we can muster in this particular field.

The CHAIRMAN. We are going to have some problems in the future in bulk carriers, and shipbuilding programs, and I think we need to have this reevaluation quite often, and they are now in the process of doing that. I don't think that will require legislation at this session of Congress, but there should be something ready when we come back in January to take another look at this.

Admiral HARLLEE. Yes; I would like to make a comment on this.

The CHAIRMAN. Because the subcommittee of this committee, which Senator Bartlett has been so active in helping chair, is quite cognizant of this fact and we want to join with anyone who might come up with some solutions for the future. And that is both for passengers, bulk carriers, and dry cargo.

Admiral HARLLEE. Yes, Senator.

The CHAIRMAN. And tankers.

Admiral HARLLEE. Yes, sir. In that respect, Mr. Chairman, Senator Bartlett earlier expressed an interest in the effect of contract carriage or common carriage. We have made what I believe to be quite a good study on this subject, which will require certain action on our part. The study has just been completed by the staff and has just been given to the Commission. I have read it over myself, and I think we can take action by way of a legislative proposal in the domestic offshore trades, with regard to contract carriage, which will be helpful to common carriage and will strengthen the merchant marine as a whole. The CHAIRMAN. And intercoastal too.

Admiral HARLLEE. Well, of course, yes. The intercoastal, however, is under, as you know, the Interstate Commerce Commission.

The CHAIRMAN. I know, but you people have some indirect responsibility in the field.

Admiral HARLLEE. Yes; and I can cite a recent example there. SeaLand, a very progressive steamship line, has some terminal lease agreements in Oakland and Long Beach, which were before us for consideration of a new and considered by some to be a revolutionary type, and we recently approved those, which made Sea-Land, Long Beach, and Oakland very happy, to facilitate the container operations, which we think, or at least I think is one of the pathways to progress in the future. Sea-Land conducts intercosatal operations.

The CHAIRMAN. Senator Brewster?

Senator BREWSTER. Thank you, Mr. Chairman. Admiral Harllee, the Maryland Port Authority, operating through the port of Baltimore, has daily contact with the Federal Maritime Commission, and time and again they have asked our office to obtain certain information or check something with Admiral Harllee and his Commission. Without exception, every courtesy, every possible type of cooperation has been extended to us, both by the Chairman and by the Commission. So I would like to take this opportunity to very briefly thank the admiral and congratulate him. As far as we are concerned, he has done a splendid job.

Now pursuing the line of questioning that you, Mr. Chairman, and Senator Bartlett were pursuing a moment ago, I am also deeply concerned about the future of the American merchant marine fleet. By comparison I understand that since 1960 the number of Russian mer

chant vessels has doubled. The number of Soviet vessels, I have heard, exceeds ours, and in a year or two their total tonnage will exceed ours.

Could you comment on this? Is this information correct?

Admiral HARLLEE. Yes, Senator Brewster, I would like to thank you very much for your earlier remarks and state what you say is basically correct.

Senator BREWSTER. This worries me. Does it worry you?

Admiral HARLLEE. Yes, it does worry me, Senator. Of course I am sure you realize that the promotion of the American merchant marine is a function of the Maritime Administration of the Department of Commerce. But at the same time, in carrying out the shipping statutes which are designed to remove discrimination from this Nation's trade and commerce, and to help the public of Alaska and Hawaii and Puerto Rico, and aid our export expansion among other programs, we at the Commission see the need for a stronger merchant marine for economic and commercial purposes. I realize this, and I do worry about it, and that is the reason why I requested to be put on as an observer, on this interdepartmental task force. We have taken a number of actions and made a number of decisions which are helpful to the American merchant marine, although we recognize we also need the services, for our trade and commerce, of the foreign carriers.

Senator BREWSTER. I know that question and the next one or two are beyond your official responsibilities and if you prefer not to answer, just say so, but because of my respect for your tremendous knowledge in this field, I will continue on for a moment or two.

Our present statute requires that 50 percent of U.S. official cargoes be carried in U.S. ships. This, to some degree, has been circumvented by the Department of Agriculture, I think very unwisely.

Would you comment on this 50-50 limitation and the suggestion that perhaps 75 percent or more of U.S. cargo should be carried on U.S. ships?

Admiral HARLLEE. Senator Brewster, I think that in view of the fact that I have a number of judicial cases which have to be decided involving both foreign and American lines under our shipping statutes, that I must be circumspect in what I say about that. But I would say this, I definitely believe that it is in the interest of American trade and commerce that more of our cargo be carried by the American merchant marine than is carried now. I don't think there is any question about that.

Senator BREWSTER. That is the answer, of course, I hoped to receive. This is again a little outside of your official capacity, but it is a subject I am very much interested in. I am concerned about the proposition that U.S. Government ships, Navy, be constructed in foreign shipyards.

Would you care to comment on that proposition?

Admiral HARLLEE. The present law calls for them to be constructed in American shipyards, and I stand foursquare behind the present law. Senator BREWSTER. There are several of us on this committee that are extremely interested in the future of the bulk carriers and have suggested they should be subsidized.

Would you care to comment on that!