You talked about a new maritime agency. Were you talking, Helen, about a Cabinet-level position for maritime affairs? Ms. BENTLEY. Yes. If it is going to be meaningful, that is what it would have to be. Ms. MIKULSKI. And what would you see within that function? Ms. BENTLEY. The Maritime Administration, the FMC, NOAA, some of the trade representatives' duties, possibly whatever the Department of Transportation is now taking over; they are building a separate little fiefdom over there. They are building a little niche over there on maritime, in DOT, so they can have their say on maritime. It is just conflicting agencies. Ms. MIKULSKI. Do you find, both as a Federal official and then a businesswoman-you, too, Mr. Shapiro-that in some ways, Commerce was telling you one thing and trying to work it out, and then State was doing something else? MS. BENTLEY. Yes, too often. Ms. MIKULSKI. Were those two areas of―― MS. BENTLEY. Too often. Ms. MIKULSKI. Well, do either one of you have any other ideas on how we could encourage exports, other than what we have discussed in this legislation? Mr. SHAPIRO. Just one point on what Helen was saying. I think it is imperative that there be some accommodation between the Federal Maritime Commission and the ICC, and if you are talking about a Department of Maritime Affairs, that ought to encompass the internal movement of cargo, so that someone in Peoria, Ill., can say, "What is it going to cost me to get it to Vienna, Austria?" and be able to go to one party and get it done. The Japan line case, which permits a carrier to quote a through rate providing he breaks out the ocean rate, is an exercise in futility, because they are breaking out that rate, but they are making money on the inland rate without anybody knowing it, by buying it at wholesale. It is a complicated issue to the extent that if you are going to move cargo, there should be one Government body that can give the answer, and if you want to be able to compete with and promote our export trade, the simplicity of the movement of the trade from the United States to the foreign country has got to be made evident to the shipper; single responsibility, single move ment. Ms. MIKULSKI. Thank you. Mr. Hamilton, I just have a few questions for you and Mr. Danielson. I believe, Mr. Danielson, when Chairman Murphy said, "Why are they buying abroad?" you said, "For the same reasons we buy TV sets, shirts, and whatever." Well, I find that very interesting, because in my own trips abroad, I find that they are not that much cheaper. They are also not that much cheaper when they sell to their own people. I find it interesting to trace the price in Japan of a TV set and compare it to a W. Bell catalog, which you and I are familiar with. But a question, perhaps both of you could answer, in terms of the economics of shipbuilding, how much cheaper is a European yard than an American yard, an American yard with a Japanese yard and then, say, an American yard and a Korean yard-because I also observe that Japan is trying to move its stuff out to Korea and get out of the shipbuilding industry. In other words, is it really that much cheaper for what we give away, trade off, throw away, in terms of jobs? Mr. DANIELSON. It is common knowledge that what ships are selling for in the foreign yards are, of course, anywhere from onehalf to one-third of what they sell in this country. Now, to be more specific, what their costs are, we do not know. But I think we have evidence, and I am sure you will agree, that over the past few years, ships have been selling at below cost in some of those shipbuilding areas. Mr. HAMILTON. Because they have been subsidized by their governments, the Japanese. Ms. MIKULSKI. So what you are saying is that we continue to talk about our cost of building ships, and very often are criticized for some of our subsidies, but—— Mr. HAMILTON. The pricing and the cost is what we are talking about. Ms. MIKULSKI. There are two different concepts there. And what you are saying is someone who has tried to be competitive in the business, tried to dig out some of these things, you really do not know what their pricing is? Mr. DANIELSON. That is correct. Mr. HAMILTON. We know what they are quoting, approximately, but we do not know what their costs are, and that is the interesting thing. Their costs may be way above their prices. Ms. MIKULSKI. In addition to the construction of new vessels 'I am very much interested in the jobs that can be generated or maintained through maintenance activity and also through retrofitting. The chairman raised that issue with you. Is there anything in this legislation that we could add, or perhaps craft a little more carefully, that would stimulate retrofitting, and is that a bona fide source of shipyard activity? Mr. HAMILTON. Retrofitting to slow-speed diesels would be a tremendous help to the various repair and conversion yards throughout the country, it would be a major shot in the arm for them. But I think by the time you look at the price of tearing out steam engines and boilers and putting in slow-speed diesels that the price is going to shock you. I think that a study would have to be done before we pursue that too much further. It would be ideal if it could be done very quickly and very easily, but it is a rather big job. The CHAIRMAN. It would take $10 million. Mr. HAMILTON. And you have to probably use foreign-built diesel engines. We have no slow-speed diesel in this country. Mr. DANIELSON. Of course, one of the factors is the time required to perform such a conversion; taking the ship out of service is another kind of a disaster to any operator. Ms. MIKULSKI. Well, thank you. I think that answers my question, because each part of the testimony has reinforced the other. Mr. Chairman, I have no other questions, and I would like to thank you for the information. The CHAIRMAN. How long would it be out of service? Mr. HAMILTON. I would guess a minimum, if everything was keyed up to do the job, of 4 months, 3 or 4 months. The CHAIRMAN. Probably 6 months overall. Mr. HAMILTON. Depending on the configuration of the ship, because some of them have different motors, different engines, different turbines, different piping. It means a complete wipe out of the existing internal machinery and piping and auxiliaries and reinstalling completely new main engines with attending auxiliaries, because you cannot run steam generators with a main engine diesel; you have got to change the whole machinery package, and it is one big job, a tremendous job. The CHAIRMAN. What incentive is there for the ship operator to do that, then? He is going to have a ship down for 6 months. It is going to cost him $10 million for the conversion. He is in between a rock and a hard place with a slide rule, to dope out what the cost of steam turbine is versus the down time and the retrofit cost. Where does it intersect? Mr. HAMILTON. We are better off with new ships, speaking of new building, construction. The CHAIRMAN. Uncle Sam comes in somewhere and makes it attractive for him to do it. Mr. HAMILTON. New ships would be the way to go. The CHAIRMAN. What do you do with the old ships? Mr. HAMILTON. I would say you would keep running them. The CHAIRMAN. Maybe it has a 10-year life. Who is going to pick up the differential cost? Mr. DANIELSON. Well, we are saying on the one hand that it is not economically feasible to convert. If the ship cannot compete on its present terms, then it is out of business, isn't it? Mr. HAMILTON. And I am sure that they have already done a study on this to find out what the cost would be over the years of the life of the ship against the fuel cost against the cost of conversion. I am sure that somebody in the group has already put that together. They did not present that to you, the cost factor one way or the other? The CHAIRMAN. No. Mr. Shapiro, we have been trying to do a through bill piece of legislation for several years. If I get Ms. Mikulski to guarantee she will support me over in that Transoortation Committee we sit on in Commerce and we might have to crack the ICC around a little bit-we could do one. We have been trying to do it for about a decade. Mr. SHAPIRO. The rest of the world is passing us by. The CHAIRMAN. Yes. MS. BENTLEY. Again. The CHAIRMAN. You see, the FMC gets jealous of its jurisdiction, and the ICC, which is about 10 times as big, flexes its muscles in its jurisdictional area, so we have got the regulatory bodies fighting amongst each other, and then the Justice Department mixed in. That makes quite a brew. Mr. SHAPIRO. Nobody said it was easy. The CHAIRMAN. We are going to try and do on. Ms. MIKULSKI. I think I have just made some points that the members of the Commerce Committee are going to be surprised at. But I think it is time for some really commonsense approach in terms of competition, in terms of efficiency, and I think in terms of aggressiveness abroad, whether we are competing for cargo to come into this country or go out of this country, or even an entirely other area. The chairman mentions the transportation between inland cars-the whole issue of tourism, which is the second largest industry in the world, and we are doing nothing to bring people into this country, which would be new dollars, spending money to small business, et cetera. And most people think that tourism is puff, but it could be a major boost to our economy. I also happen to believe that our biggest tourist attraction is our freedom and our democracy, and yet that is scattered throughout the place, and nobody is competing for that. Nobody is competing anymore, and I am frustrated about it. I would like to talk with you privately to see what that means and talk with some of our railroad folks here. And if the only heat I have to take is the ICC, they will be so busy, Mr. Chairman, writing a memo criticizing me, I will be through my fifth term. [Laughter. The CHAIRMAN. Mr. Hamilton. Mr. HAMILTON. I just ran out a little, quick chart here, of my own, for switching over from steam to diesel in, say, a 30,000-ton ship, and I am looking at a minimum of 7 months for just the physical work to be done. So you are talking about a tremendous job, and that is a tight time. So the loss of earnings is tremendous. The CHAIRMAN. Thank you very much. Ms. MIKULSKI. Thank you, Mr. Chairman. The CHAIRMAN. The committee stands adjourned. [The following was submitted for the record:] Pacific Agricultural Cooperative for Export, Inc. (PACE) STATEMENT: Pacific Agricultural Cooperative for Export, Inc. (PACE) The goal of PACE is to assist and promote the export of the PACE's policy regarding Shipper's Councils referred to in PACE is concerned that Shipper's Councils which have been |