for regulation of service. We have been operating the merchant marine under the conference system.

Now, it seems to me that the Justice Department has, because of its views on the conference system, taken different positions in all kinds of areas that affect regulation.

Is there some way to harmonize and to make a coherent whole out of the views or policy between the Justice Department and the Federal Maritime Commission?

Mr. DASCHBACH. Well, let me address two points which you made. One is with respect to harmonization, so to speak. Last week, Donald Flexner came to visit us at the Commission, and we had a very candid and frank discussion concerning our perceptions of our respective roles, and we agreed to confer with each other to determine what our future relationship should be, although it may well be an agreement to disagree.

I think, frankly, that the Antitrust Division has a job to do. I am sorry Mr. Flexner isn't here; but for him, I would characterize its role to be one of injecting competition into the regulated industries of this country.

I have a curiosity as to whether the Antitrust Division perceives its role in a regulated industry in a different way than it does in a nonregulated industry. If the answer is that it perceives no difference, then you are accurate that they are ignoring the Shipping Act, the principles of the Shipping Act.

As you said, the Shipping Act, which sets forth the principal Congressional intent with respect to conferences, goes back to the Alexander committee in 1915. That intent was certainly renewed by the Congress in 1961, and I think it is fair to say that when the U.S. Senate renders its advice and consent to a nominee of the Federal Maritime Commission, I don't think it is stretching it too far to say that they are again indicating an approval or an affirmation with respect to the principles of the Shipping Act. I believe if there were in the U.S. Senate an overwhelming sentiment against the Shipping Act and the conference system, that Federal Maritime Commission nominess might run into some heavy seas within both the committee and the Senate itself. That is not the case.

Mr. KYROS. Well, does that mean then that you can start some coordination with Justice in regard to getting some harmony in the views between Justice and the FMC because, after all, as we said earlier, in every single section 15 agreement-take, for example, the attempt after the Leningrad meeting by your predecessor, Mr. Bakke, to get the less sophisticated Soviet ships apparently into A and AA conferences. I understand that the Justice Department felt that was not competitive and, therefore, they were going to object. Therefore, that whole scheme seemed to collapse.

It seems to me that if we had an adhesive policy between Justice and the FMC as to agreement, perhaps you could then turn your attention to fighting the evils of overtonnage.

Isn't that so?

Mr. DASCHBACH. As I said earlier, Mr. Flexner did come visit us last Friday, and we agreed that after we concluded our appearances before this committee we would take the opportunity to sit down, Mr. Flexner and Mr. Ingolia, our General Counsel.

It is fair to say that our conversation was candid and frank.

As I said in testifying before this committee last week, we also have opened a dialog with the State Department's Office of Maritime Affairs. I certainly intend to do the same with respect to the Antitrust Division of the Department of Justice. It is totally unproductive for us to hurl rocks at each other. We should sit down and discuss what they think we should be doing that we are not.

In many respects, I think the Commission's own Bureau of Hearing Counsel has a mandate to do specifically what the Antitrust Division. believes it is doing when it intervenes in our cases, and that is to represent the public. I believe that the Bureau of Hearing Counsel now does that very adequately.

Mr. KYROS. Mr. Chairman, you mentioned the Alexander committee back in 1915. Whether it was 1915 or 1961, the daily issue of overtonnage is ever present, only more sharply so with the capital intensive nature of the industry currently.

Now, would it be possible for you to have an interagency group formulate at some level some kind of guidelines as to where U.S. maritime policy should proceed to eliminate the problems of overtonnaging so that a proper recommendation may be made to the Congress so that it may act, if necessary?

Mr. DASCHBACH. I am 100 percent for that.

My only comment is that, as the economic regulator, I don't believe I can be the captain of the team. Although, having come from the Merchant Marine Subcommittee of the Senate Commerce Committee, I might feel qualified to be the captain. I believe that because of the role I must play on a continuing basis in deciding matters for the Commission, neither the Chairman of the Federal Maritime Commission nor, for that matter, any member of the Federal Maritime Commission, should be a lead player in that operation.

I think absolutely, however, that the Commission should be represented.

Economic regulation is a key element in a coordinated maritime. policy. It is absurd to suggest that it is not.

Mr. KYROS. But the trouble again is also that if indeed as a matter of policy you do not serve the primary role in this, we have already heard from the Maritime Administration, which is also concerned about overtonnaging, that irrespective of the 1939 act, they would not take the initial role.

It seems to be a puzzlement as to who the Executive would be then to begin to initiate specifically the steps that would be undertaken to underwrite a policy that could be presented to the Congress if it required further legislation. Who would do it?

Mr. DASCHBACH. I am not sure that the dialog which took place here with Assistant Secretary Blackwell regarding Section 212(g) was really focused on a policymaking role as much as it was on the finer point of the ability of the Maritime Administration to directly submit legislative recommendations to the U.S. Congress.

Mr. KYROS. On overtonnaging? That was the issue.

Mr. DASCHBACH. On any subject, because of the Office of Management and Budget. I think that was very sharply focused upon.

Mr. KYROS. That puts a gloss on it, Mr. Chairman. Actually, everyone knew it was going to go through the OMB. That is really not the

issue. The fact is who was to initiate anything and as it stands now as of this third day of hearings I don't think that has been decided. Who is to initiate it?

Mr. DASCHBACH. As I said, I would be happy to volunteer, except that I believe I am an ineligible party. Beyond that I really can't speak for anyone else.

Again, as I suggested in my previous appearance, perhaps a revitalization of the National Marine Council should be considered. One of its products was the Stratton Committee on Oceanography that was chaired by the Vice President of the United States.

But I am not making any specific recommendation.

Mr. KYROS. Mr. Chairman, if you were here during the 3 days of hearings, you would have found out that the Department of Transportation has

Mr. DASCHBACH. I was here.

Mr. KYROS. [continuing]. Has had a report on the UNCTAD Liner Code and they have taken a position on it.

The Justice Department intervenes in cases that involve shipping regulation.

Naturally, overtonnage is the concern of the Federal Maritime Commission.

The State Department says they can through negotiation perhaps obtain foreign records from foreign countries.

If you put this altogether, there is no one in the Government that is moving to pull this policy together and so it comes to the Congress. We have had already a series of issues presented as to possible means of combating overtonnaging, over which there is already dispute.

Let's take one small issue. Independent pricing of the thread runs through the agencies. Some of the carriers split on it. The Congress doesn't have anyone come before it and say that is the position the Executive takes at this time. That is true. I don't think that situation should obtain.

The question to you is: What should be done to alter that so that the Congress can act if it needs to?

Mr. DASCHBACH. Well, I think you have answered your own question: That some individual or entity needs to be designated in the Executive branch of the Government which has the authority to establish an agenda and call the Maritime Administration, the Department of Transportation, the Treasury Department, the Department of Agriculture, the Department of State, and the Federal Maritime Commission.

Mr. KYROS. Well, I would worry about some kind of agenda or task force because about a year ago there was such a task force called the domestic council review group and that domestic council review group incredibly included people from Transportation, Justice, CEA, FTC, OMB. There wasn't a single Maritime member on that task force. I think you are aware of the study that was made. What I think should be of concern is that if the issue of overtonnaging is the kind of issue that is the root cause and it is predecessor to rebating and this issue has shown in these hearings to be the concern of numerous agencies and not just your own regulatory agency.

Is that a correct statement?

Mr. DASCHBACH. That is correct.

Mr. KYROS. Then it cannot be possibly solved by you alone no matter how many laws are passsed to strengthen the 1916 acts.

Mr. DASCHBACH. That is correct.

By the same token, I do not think that the Maritime Administration can effectively carry out its promotional responsibilities if it does not have the cooperation and the coordinating assistance of other departments and agencies of the Federal Government.

With respect to the domestic group you mentioned earlier, you refer to the report on the ocean shipping industry which was a product of the previous administration. The task force which undertook that study did not include the Federal Maritime Commission. They were studying the ocean shipping industry, not the Federal Maritime Commission. They were studying the regulated ocean shipping industry but the Federal Maritime Commission was not included as a participant in that task force.

I would imagine that the Commission provided significant data to the task force, but I have a list of participants and the Commission was not included.

Mr. KYROS. One final question, Mr. Chairman.

Earlier I was discussing with Mr. Taylor, I believe, the question of limited use immunity.

As you know, both the Senate and the House bills contain this. provision. Some disfavor has been indicated by some agencies. The condoning of wrong seems to be the basis of it, although no one has as yet examined and no one has explained how the foreign carriers are going to be brought in here, and it would seem that it is a great wrong to discriminate against American-flag carriers.

However, if I understand my discussion and colloquy with Mr. Taylor, in some of these things the Justice Department defers to the Federal Maritime Commission a limited-use immunity whereby only for rebating violations under sections 16 and 18 immunity would be provided plus any conspiracy, criminal conspiracy, that would arise from that very relating violation between two or more parties under section 371 of title 18.

The Justice Department, if I understand correctly, and I stand to be corrected here, the Justice Department would have no objection to that sharply limited, as I have just stated, with no antitrust immunity or anything else in there.

Now, how do you feel about that proposition?

Mr. DASCHBACH. I share your view when Mr. Taylor indicated that this may well be the kernel around which the executive branch of the Government can coalesce and support legislation.

It then is, in fact, the position of the Department of Justice, and reflects the administration's view. I think, that does go a long way. To remove that criminal conspiracy impediment, so to speak, as well as the penalties for Shipping Act violations may well be enough to bring in the parties.

I believe it was Mr. Taylor who indicated that the provision in the bill and all other laws of the United States is probably too broad. Mr. KYROS. I think it is universal agreement about that, Mr. Chairman.

Mr. TAYLOR. Mr. Kyros, if I may, the position that we took was, of course, we did not favor amnesty, but if there were going to be an amnesty provision we were asked to provide language, which we have. We worked with the first part of (d) (1) where you started right off with subject to the provisions of paragraph 2 no penalty shall be imposed under section 16 and then-first and third-et cetera, and provided a suggested amnesty if one were to be enacted which would eliminate the major objectives that we had.

That is from reading Mr. Daschbach's testimony and from talking to one of his attorneys, a Mr. Haisley. I have talked to him. Mr. Haisley said they would even prefer to be a little bit narrower than the first part of (d) (1) and confined solely to rebate. The first part of (d) (1) would go a little beyond that. He said if they wanted to confine it that narrowly, of course, that suits us fine because we do not like amnesty at all. That suits us fine and we certainly would defer to their views as the administering agency.

As you know, only section 18(b) (3) uses the word "rebate" but there are parts of section 16, namely the second paragraph particularly, which talks about schemes and devices which also reach rebate.

The question is just what language do you use and Mr. Haisley I think worked out some that he though might work to reach rebating and yet be sufficiently specific when there is more than one provision that deals with it.

The CHAIRMAN. Would you recommend specific legislative language to the committee?

Mr. TAYLOR. We did. We wrote a letter to Senator Inouye, and I assumed that you people have a report.

Mr. KYROS. You have not sent us the language.

Mr. TAYLOR. I guess it did not come through Management and Budget.

The CHAIRMAN. It does not come through OMB. You can send it. directly to us.

Mr. TAYLOR. We prepared a report on the bill which was to go to Chairman Murphy. Maybe it has not gotten here and part of that report, at least the part that the Criminal Division contributed to, was the language suggested, amnesty language, which was identical to the letter that was sent to Senator Inouye.

So, you should have it or should be getting it. What it consists of is we just took (d) (1). We kept (a) the way it is under (3) (d) (1) and we changed (b) to make it clear that it was disclosures as to the date of passage of the act and to say during the period beginning on the date of enactment and ending 1 year thereafter the person who committed such act has made a good faith disclosure to the Commission, and we brought up this language of actual notice, and we changed it to without knowledge it was a subject of investigation related to any act of such agency of the Federal Government.

Mr. KYROS. What about the conspiracy problem-18 title 3, 1971? Mr. TAYLOR. My answer to that would have been that I don't think it is necessary because we are not going to prosecute for conspiracy to violate the civil penalties.

But, if you wanted to work it in you could just throw in a phrase to make it clear that it is violation of those sections or any conspiracy to violate those sections.