Admiral HARLLEE. Senator Brewster, the matter of subsidizing the bulk carriers, as you know, is highly controversial, with judgments having been rendered by the Secretary of Commerce and the Maritime Administration that were not popular and were not well thought of in some parts of Congress as well as in many parts of the industry. I honestly believe that I would be doing the wrong thing to go on record in an issue of that type, that is clearly and positively under the responsibility of another Government agency.

In 1961 those functions were split off from the regulatory functions under Reorganization Plan 7, and it very definitely would not be my business.

Senator BREWSTER. Thank you very much. I certainly understand your position. But because, as I said before, of your great knowledge in this general area, I was interested in your opinion if you felt you could present it to the committee.

Admiral HARLLEE. Thank you very much, Senator. Could I make one comment, Mr. Chairman, with regard to some questions of all three of the Senators here with regard to strengthening the American merchant marine?

I believe that the operations of the Commission, particularly those relating to self-policing, and the ferreting out of malpractices, have tended to reduce somewhat the malpractices that are harmful to the American merchant marine. They, of course, have not eliminated them. I am speaking of rebates and things like that. But I believe it could be substantiated that we have reduced these malpractices and, therefore, have tended to strengthen those parts of the American merchant marine which are regulated.

The CHAIRMAN. Well, I think we have got lots of problems ahead of us, and although your particular jurisdiction is somewhat limited in the Commission, you are still a part of the whole merchant marine picture and we have all got to get together to do something about it. It is a continuing thing with us. It has been going on ever since the end of the war. And we are now getting down to where we have to take a good long look at what we want to do. And the problem up here is that we are perfectly willing to meet a recommendation, as the Senator from Maryland points out, that would change the law, the 1936 act. But the trouble has been that some people who don't seem to agree with what the 1936 act provides, or the 50-50 part, or the ship-construction subsidy, who administer these laws seem to think that instead of asking for a change of law, you undermine the law or you don't administer it, or you don't build the ships that are required; and they work on it that way.

Now I think the time has come for these people to either follow the 1936 act, and if they don't like certain portions of it, or think it should be changed, they should come up here and say so, and we will have a hearing.

Admiral HARLLEE. I am sure you realize, Mr. Chairman, that I am not in that group you just mentioned.

The CHAIRMAN. It seems like always this is true on ship construction. If the law and all of the facts dictate that you should build 28 ships in a given year, somebody down in Commerce is always talking about, well, that is a good place to cut, we will build 17, instead of

coming up and saying let's change the law. And the 1936 act is, we think, a good basic act. Maybe there are some changes needed.

Admiral HARLLEE. Well, I certainly agree, I think the shipping statutes, including the 1936 act, are excellent statutes, Mr. Chairman. The CHAIRMAN. If it hadn't been for the 50-50 provision, we would have been in worse shape, in my opinion. And we are the only country that adheres to that policy. I remember when we passed the bill, the Senator from Alaska remembers this too, there were some Members of the Senate who said why shouldn't we haul all of our cargo, like other countries do.

Well, of course that wasn't desirable. But it just seems like the merchant marine is always subject to some sniping along the way, administratively, and particularly because there has been a subsidy involved.

Well, you didn't make the subsidy, the subsidy is in the 1936 act. And if someone doesn't like that part of it, they ought to come up and face it headon and say let's change it. But we never get any of those proposals up here.

Admiral HARLLEE. I hope you realize, Mr. Chairman, that I am not one of the people sniping at the laws.

Senator BARTLETT. I have one more question, Mr. Chairman.

The CHAIRMAN. All right.

Senator BARTLETT. Admiral, you told Senator Brewster, as I recall, that you favor the law which requires ships to be built in domestic shipyards?

Admiral HARLLEE. I stated that I stand foursquare behind the present law; yes, sir.

Senator BARTLETT. As a matter of interest to you, this committee reported out the other day a bill extending the construction differential subsidy for another year, and it will come to the floor for debate and action soon. And there is going to be opposition to it. I don't know what form that opposition will take. Maybe someone will want to do away with the law entirely, maybe someone else will want to change the period for which it will be effective, maybe someone else will want to decrease the amount of the differential subsidy. But the fact is, is it not, Admiral, that this subsidy gives nothing to shipowners, it is simply a device which started out long ago in the early history of this country to provide for the maintenance of a domestic shipyard industry; is that right?

Admiral HARLLEE. Yes, sir; that is absolutely true.

Senator BARTLETT. And if the law were not extended, or if it were not extended with sufficient differential, then those ships would not be built domestically; is that not right?

Admiral HARLLEE. Yes; that is correct.

Senator BARTLETT. That is all.

The CHAIRMAN. Mr. Day will be up next. He has been a longtime advocate of the merchant marine, prior to being on the Commission. One thing that some of these critics always forget too is that the merchant marine is literally the fourth arm of defense in this country. And when we are talking about a subsidy, part of the reason to keep it alive and strong and adequate is because we need it, we need it if something happens on the seas. And that is never considered by some

of the critics when they seek to snipe at it or cut it down. The Department of Defense, for awhile, didn't give much help to us, but lately I must say the Department of Defense has come forward and said we have got to keep an adequate merchant marine even though it may cost a little more, because it is part of our defense. When you are spending $50 or $60 billion a year for defense of the United States, it seems to me that they ought to put the merchant marine subsidy in some perspective with that amount, the amount we are talking about dictated by the 1936 act.

Admiral HARLLEE. Yes; well, I agree with you, Mr. Chairman, and also with Senator Bartlett in thinking that the present laws are good laws, and they should be carried out. I could not think otherwise without making a careful study and where we have made a careful study in matters under our jurisdiction we have made legislative proposals.

Furthermore, Mr. Chairman, I would like to say although this is not directly under the cognizance of the Federal Maritime Commission, I am interested, and I, by my own request, was put as an observer on the Maritime Evaluation Committee, which made a study some 3 years ago on this matter. That study was not implemented very much, but I wanted to emphasize with regard to the present interdepartmental task force or any other effort involved here, that I think the Commission ought to do everything it can, in an appropriate manner, under the shipping statutes, to strengthen the American merchant marine.

I would also like to say Senator Bartlett's State has a peculiar problem, in getting good water transportation at reasonable rates. And I believe in the past the matter of ships built abroad has been an issue from time to time. But I am very hopeful with the advent of a new and aggressive competitor up there, with which I am sure the Senator is familiar, that the situation in Alaska will be ameliorated without any weakening of the carriers involved.

Senator BARTLETT. I join with you, Admiral, in that hope.
Senator LAUSCHE. Let me ask a question.

The CHAIRMAN. The Senator from Ohio.

Senator LAUSCHE. Admiral, I am not informed in detail about a strike that is now in progress, or at least it was at the end of last week, on the east coast. Will you identify who the participants are in that strike and what the issue is?

Admiral HARLLEE. Senator Lausche, I will do the best I can, but the Federal Maritime Commission actually has no jurisdiction whatsoever in the matter of labor strikes, absolutely none.

Senator LAUSCHE. I understand that. But can you tell me which union is involved?

Admiral HARLLEE. Well, the union which is most heavily involved is the Marine Engineers Beneficial Association, MEBA. The American Radio Association and the Masters, Mates & Pilots also joined. Senator LAUSCHE. And it is striking against which company initially?

Admiral HARLLEE. Against most of the companies on the east coast and the gulf.

Senator LAUSCHE. And are those companies shut down now?

Admiral HARLLEE. Most of them are. I think there are about 94 ships out of service now as a result of the strike.

Senator LAUSCHE. Among those 94, are there ships which were supposed to be carrying material to South Vietnam?

Admiral HARLLEE. Senator Lausche, I do not know that, the answer to that. But I would hazard a guess that they are not. I don't know though.

Senator LAUSCHE. Would you assume they are or they are not?
Admiral HARLLEE. I would assume they were not.

Senator LAUSCHE. They are not?

Admiral HARLLEE. I would assume that. But I don't know.

Senator LAUSCHE. That is not the information I had. I understood we had ships that were on the verge of being loaded, and that when the strike occurred, foreign-flag ships had to be hired to carry the load. You are not familiar with that?

Admiral HARLLEE. No; I am not. I do know a great deal of the material for Vietnam goes from the Pacific coast, of course.

Senator LAUSCHE. Yes. How long has the strike been in progress? Admiral HARLLEE. Since the 16th of June.

Senator LAUSCHE. Do you keep a record of the number of strikes that the merchant marine has suffered in, let's say, the last 10 years? Admiral HARLLEE. We do not. However, the Maritime Administration keeps such a record and it is available to us.

Senator LAUSCHE. Do you recall what was the longest strike in duration that the merchant marine suffered?

Admiral HARLLEE. I don't remember which was the longest. I believe it was in the neighborhood of about 70 to 80 days, Senator.

Senator LAUSCHE. Would you prepare for the record a tabulation over the last decade of the strikes that took place in the merchant marine, the unions that were involved, and the extent that the transport in the merchant marine was shut down?

Admiral HARLLEE. Yes, I will, Senator, but I would like to emphasize that the Department of Labor and the Federal Mediation and Conciliation Service are the parts of the Government with responsibilities for these matters and the Maritime Administration, which promotes the American merchant marine, is the maritime part of the Government which is primarily concerned. But at your request, I will prepare that.

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