Mr. MORICONI. Yes.

Mr. KYROS. So it is the concern to try to keep the American merchant marine in a position where it has the opportunity to operate profitably, you would agree with that?

Mr. MORICONI. I would agree with it. I just wonder about, you know, when American-flag lines go out of business, it is not a question-I just wondered who is behind me-it is not a question [laughter] to be brutally honest, I wonder how much of that is failure to modernize their work practices, you know what I mean? In other words, I have been aboard American ships and I have been aboard foreign ships, and you cannot demand the high wages that our crews demand and so forth. In other words, I do not think that the American ships cannot attract cargo. I think it is a failure to modernize their work rules. It is as simple as that. I think if you really have to face the issue, that is it.

And I am actually going into an area now where my expertise ends. I stress that personal opinion that I think in many instances American-flag carriers, and there have been 19 of them since 1970 that have gone out of business as I believe I read somewhere, and I wonder, I just want to make a comment in passing how many of them have gone out of business because of the fact that they failed to, you know, because the American seamen's union or whatever, fails to modernize.

The CHAIRMAN. But when you say fail to modernize, are you talking about manning levels on the vessel.

Mr. MORICONI. I think that to a certain extent. Again, Mr. Chairman, I made that statement that I am touching into an area where I only hear things and read things. I am not an expert at them. And I would say that failure to modernize means on work rules. Certainly the passenger, the American passenger ships, they went out; they were the first to go, for example. You know, failure to modernize, meaning the work rules and the manning requirements and so forth and so on.

The CHAIRMAN. Those American passenger ships, we have not had them around for over a decade.

Mr. MORICONI. Yes.

The CHAIRMAN. What we are talking about, though, is the American liner fleet. The American liner fleet was the first fleet to, quote, "modernize", as far as containerization and automation was concerned. The terminal itself was modernized to accommodate the fast loading and unloading and turnaround of vessels. The manning of the vessels was cut back by collective-bargaining agreements, and as far as modernizing a crew, I think the U.S. companies did modernize from the perspective that we have seen in this committee.

I do not know how you modernize a able-bodied seaman or an engineer or a captain.

Mr. MORICONI. Well, Mr. Chairman, let me just, if I may, backtrack on that and basically say that I feel there are other reasons why the American merchant marine has not been able to capture more cargo than we are actually capturing now, and this is the reason that I brought forth. To pursue this line beyond that, I do not really like to talk about things that I am really not an expert, you know, sufficiently. Traffic and ports, fine and dandy. But it

seemed to me that the remark should have been made that there are also other reasons for their inability to tap their fair share of cargo. That is all I wanted to bring out.

Mr. KYROS. Thank you, Mr. Chairman.

Just two more questions. First, I think all of you gentlemen oppose the concept of shippers councils, am I correct?

Mr. MORICONI. I do not oppose. It is not clearly defined. I think it is great to be-we use the 5(a)'s and 5(b)'s when I sit down with motor rate bureaus to discuss trucking rates to the Port of Boston. I think it is great. I mean, can you imagine us having to bring in an individual trucker to talk about rates, and I have 180 of them that come to the Port of Boston that are major truckers.

We, in Boston, are not opposed to the basic idea. I think it is an excellent idea. It would be great. It would probably lower some rates, and it would, I think, be beneficial to the public interest. The only thing is we do not want to see this growth of two major powers, a closed conference on one side and a large shippers council and predicate rates upon, "Well, if you send it to Wilmington, N.C., instead of North Atlantic ports, you know, this is the rate that we will give you." And such things are done. They are done this day.

Mr. KYROS. But, Mr. Moriconi, the experience from the European shippers councils where they organize regionally, also the Australian Meat Board and the Wool Board, is that they can put pressure on general rate increases for the conference. They can discuss, generally, with the conferences surcharges, practices, and therefore, they are a tremendous counterweight to this power that a fully rationalized conference would have, is that not so?

Mr. MORICONI. Like I said, I am not really that strongly opposed to a shippers council as long as it is clearly defined. I just do not know of anything that strong in the United States that can go up against a conference. I do not know how many of you read tariffs for a living, I mean, I do, and some of the things they have in those conference tariffs, I mean, I just do not think that a shippers council is strong enough to offset the power of a closed or even an open conference like we have today.

This is just a Moriconi special. It is not the opinion of the port authority.

Mr. KYROS. But the things they have on the conference tariffs come also as a result of another body you seem to favor, and that is the Federal Maritime Commission. They control the filing, the style and the mode of tariffs, is that not so?

Mr. MORICONI. Well, that is true. But the Federal Maritime Commission, as I understand it, does not have the power to just say, "Well, this rate is unlawful." After a hearing, they have that, as I understand the concept. It is not like the ICC that they can declare a rate unacceptable or whatever words they use to that effect.

We favor the Federal Maritime Commission simply because we know how it works, and what the bill suggests on that section part 5 or title V just would add another layer of regulation on top of the existing one.

Mr. KYROS. Can you reveal to the committee one instance where the Federal Maritime Commission has held rates down generally in

the North Atlantic or in the Pacific or has assisted shippers materially? Can you give one specific instance?

Mr. MORICONI. I think the Federal Maritime Commission has not particularly-first of all, I think that the Federal Maritime Commission has had to surcome to changing modes of transportation. Certainly, for example, that decision that they made on mini-bridge was not one to my liking, and certainly, I know it was not to the liking of New Orleans and even other North Atlantic ports.

But I think as far as shippers are concerned, I am a student of what they do, and they have found under section 18(b)(3), they have managed to get shippers back some money when their cargoes were improperly rated, for an example.

Mr. KYROS. An administrative office could have done that or a court just as well, Mr. Moriconi. Do you know, from your own knowledge, that the FMC has done anything which has facilitated and made more efficient the liner operations in the American foreign trade?

Mr. MORICONI. No, I cannot cite you any.

Mr. KYROS. As a matter of fact, isn't delay in FMC decisions excessive? Mr. Haar? you must be familiar with that in the Port of New Orleans.

Mr Haar. Well, I am not directly involved in that process, but we have good relations with FMC, and it does take time, I agree. But we usually have been able to get decisions in an acceptable time frame, although I agree the time is longer than what we would like to have it.

Mr. KYROS. Do you gentlemen favor clarifying the antitrust exemption, that is, increasing the outlines of antitrust immunity and providing that one single shipping administrative body would have sole jurisdiction on the high seas over liner operations?

Mr. MORICONI. Definitely. That is the reason why probably the Federal Maritime Commission has been taking so long with Justice always on its heel.

Mr. KYROS. I am afraid, Mr. Moriconi, justice is not in everyone of those cases where the FMC has taken that long.

Mr. MORICONI. Maybe always is not the word. But they surely appear often enough.

Mr. KYROS. Now, this final point, the bill includes a proposition that a new shipping ministry would be established to facilitate trade and shipping and to have the necessary visibility and clout to do the job.

Currently, you deal with the Army Corps of Engineers, DOT, Department of Commerce, Coastal Zone Management, Maritime Administration, Justice, and FMC, Why not deal with one agency when you come down here?

Mr. MORICONI. I would say that, first of all, you know, like in dredging, I have been involved in a study for the dredging of the Port of Boston since I was a kid, and we are still at it, but I guess it is only about 2 years away now.

But I kind of got used to dealing with so many agencies, and I really do not find it uncomfortable. I really do not find it uncomfortable dealing with so many agencies, and second is that the devil you know is always better than the devil you do not know. [Laughter.]

Mr. HAAR. Let me, if I may, give a second endorsement to the last part of what he just said. In theory, maybe, like in other nations we should have more of a kind of a pulling in under the Department of Transportation, but we, as you know, in the port industry, look upon the U.S. Department of Transportation as the Department of Trains, and we do not feel that they have been friendly and have worked toward our best interests. They have worked for the waterway user charges which we opposed. We just do not trust the Department of Transportation.

So I agree with what you are saying that this whole slug of agencies that we have to deal with is not efficient, but a known problem child that you can work with is better than getting into something that is more efficient in theory but possibly could create greater problems when you got into that ball game.

Mr. KYROS. Thank you, gentlemen.

Thank you, Mr. Chairman.

The CHAIRMAN. Thank you very much.

Mr. MORICONI. Mr. Chairman, may I just say one more thing. On behalf of my boss, Mr. Pilsch, he wanted me to very much commend you personally and the committee for the excellent work that was done on the H.R. 111. He told me just on the way out this morning. And that certainly benefited the Port of Boston, and we thank you very much from Massachusetts.

The CHAIRMAN. I think it might have benefited the American taxpayer, too. I just had a conversation with several port people concerning their worries that there would be toll increases. We assured them that the tolls would be tied right only to the operation and maintenance costs of that canal and no other costs would be included. So it is pretty well fixed for about 20 years.

Mr. HAAR. That emergency fund, Mr. Chairman, that came up recently, I believe that is going to be deferred for another year? The CHAIRMAN. Let me give you a little insight on that emergency fund. There has always been an emergency fund of, say, $40 million for what was known as the Panama Canal Company, to draw from. They never drew a nickel from it. They managed to take care of the expensive collisions, the widening of the cuts, the depending of the channels without ever going to that fund.

H.R. 111 created a $40 million emergency fund in case you had a catastrophic_slide or something. Now, somebody gets the brainstorm over there at Fort Confusion that we have to come in with a 7-percent rate increase to get $40 million. All they have to dothey do not even have to take out their slide rule over there. All they have to do is divide 20 years into $40 million. It comes out to $2 million a year, and the $40 million will be there for the 20-year life of the treaty.

And what is going to happen to the $40 million at the end of the treaty? The interest that we had was not to have a toll increase to create a fund overnight and then carry a 7- or 8-percent_toll increase just for the 1-year or 2-year necessity to create the fund through the 20 years. That is not intended, and this committee is going to carefully watch what the Commission does and how it assigns its toll increases.

So we anticipate the creation of that fund. The bill very clearly states that that fund is part of the normal operation and mainte

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nance of the canal necessary as a contingency. We had this debate out on the floor in the appropriations bill vote, and the vote was 396 to 0 which, I think, indicates the sentiment of the House, and the Senate, of course, accepted the House version.

And I would not let people throw out $40 million and we got to raise tolls to get $40 million. That would be $40 million a year, see, or 40 million times 20, $800 million additional on that toll increase. We did not intend that. Nobody intended that, except some people that think they can start to reinterpret separately different sections of that legislation when we specifically said you will not interpret this section separately from the other sections surrounding it. So I think we have it pretty well understood now, on the record, as to just what we are going to do.

Mr. HAAR. Well, that is good news, Mr. Chairman. In other words, we will not get that immediate additional increase now then, based on the fact that the funds will accumulate.

The CHAIRMAN. Right. Thank you.

The subcommittee will stand adjourned until 10 a.m. tomorrow in this room.

[Whereupon, at 5:03 p.m., the subcommittee adjourned to reconvene at 10 a.m., November 28, 1979.]