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Mr. McCloskey. I am glad that anti-trust counsels will have a wealth of clients in the next few months.

Mr. DONELAN. I am a transportation attorney rather than a antitrust attorney.

Mr. McCLOSKEY. I want to put on the record a request to your organization that shippers meet to consider how we might revamp the laws of the United States to allow for shippers' councils to deal with shipping conferences, and try to back government intrusion off to a minimum.

I put that on the record in the hope it will relieve some counsels' minds and allow their clients to meet with one another to discuss this possibility. Thank you.

Mr. Donelan. Could I just say, with respect to the National Industrial Traffic League, as I believe Mr. Avery indicated, the league has not formulated a policy as such for or against shippers' councils.

Mr. McCLOSKEY. I would like to get your advice at some future time. Thank you.

The CHAIRMAN. Thank you very much, gentlemen. During the past several months, this subcommittee has heard witnesses testify from the Maritime Administration, Department of State, Federal Maritime Commission, Department of Transportation, the Securities and Exchange Commission, American Institute of Merchant Shipping, Delta Steamship Lines, Inc., Council of European and National Shipowners Assoc., The Department of Justice (the criminal division and the anti-trust division). We have just heard from the National Industrial Traffic League; we have heard from Lykes Brothers Steamship, the chairman of Sea-Land Service; we have had the Transportation Institute and we have received communications from the American Maritime Association and others in support of various provisions recommending different language on this legislation.

Now, the Chair has repeatedly asked the minority if they had other witnesses they wanted to testify over the past 3 months and, now, I received a letter a few minutes ago requesting the minority be permitted to have 1 day of hearing. Accordingly, I have set aside Friday, and will ask the minority what time they would like to proceed with the hearing.

Mr. McCLOSKEY. 9:30 a.m.

The CHAIRMAN. All right, we will start those hearings at 9:30. I understand the minority has a list of witnesses, the names of which I have here. Under the rules, as we have interpreted them in the past, we will permit the minority to communicate to the witnesses their invitation to testify The committee will be available to the witnesses who respond to their invitation.

Mr. McCLOSKEY. Thank you, Mr. Chairman. The CHAIRMAN. We will commence at 9:30 on Friday morning. Does the gentleman from California understand that the minority will extend the invitation to the witnesses they wish to testify?

Mr. McCLOSKEY. Will call the witnesses.

The CHAIRMAN. Will extend the invitation to those witnesses that you wish to hear from.

Mr. McCloskey. Mr. Chairman, is there any problem with meeting the request of any witnesses from a distance who want their transportation fees paid?

The CHAIRMAN. Well, as I look at the list of witnesses, it doesn't seem to me that any of them would be in such a financial strait that they wouldn't be able to pay their own way.

Mr. McCLOSKEY. I think that's true, Mr. Chairman, but my recollection is that they have the right to demand transportation fees, if they so desire.

The CHAIRMAN. Well, the committee has a fairly broad policy on travel, and we have accommodated the minority so far in the last session. I think we can probably accommodate, under exceptional circumstances, the need to reimburse witnesses for the benefit of rounding out this record.

Mr. McCLOSKEY. Thank you, Mr. Chairman.

The CHAIRMAN. The committee will stand adjourned, subject to the call of the Chair.

[The subcommittee adjourned at 4:06 p.m.]

REBATING PRACTICES

FRIDAY, JANUARY 27, 1978

U.S. HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON MERCHANT MARINE OF THE
COMMITTEE ON MERCHANT MARINE AND FISHERIES,

Washington, D.C. The subcommittee met, pursuant to notice, at 9:45 a.m., in Room 1334, Longworth House Office Building, Hon. Glenn M. Anderson presiding.

Mr. ANDERSON. The Subcommittee on Merchant Marine will be in order.

This morning, we will continue hearings on H.R. 9518, a bill to amend the Shipping Act, 1916, to provide for a 3-year period to reach a permanent solution of the rebating practices in the U.S. foreign trade.

At this time, we will have witnesses presented by the minority. It is my understanding that Mr. McCloskey has called a number of witnesses.

Mr. McCLOSKEY. Thank you, Mr. Chairman.

It was the minority's feeling, following the last day of hearings, that we should hear from the Office of Management and Budget, or someone in the administration, who could resolve the policy questions which seemed to develop from the conflicts in testimony from the State Department, the Fderal Maritime Commission, the Maritime Administration and the Justice Department. Particularly we hoped we could determine whether or not the Office of Management and Budget had cleared the testimony of these various agencies which seem to conflict and which, admittedly, from the witnesses' standpoint, indicated an area where the administration had not yet formulated a policy as relates to this bill and its ramifications.

I would like to ask unanimous consent to insert in the record at this point, the letter we sent to Hon. James T. McIntyre, director, Office of Management and Budget, on January 24th, inviting him to testify at these hearings.

The letter reads as follows:

U.S. HOUSE OF REPRESENTATIVES,
COMMITTEE ON MERCHANT MARINE AND FISHERIES,

Washington, D.C., January 24, 1978.
Hon. JAMES T. MCINTYRE,
Director, Office of Management and Budget,
Executive Office Building, Washington, D.C.

DEAR MR. MCINTYRE: The House Merchant Marine Subcommittee hearings on H.R. 9518, a bill designed to eliminate illegal rebating in United States foreign waterborne transportation, has exposed a dramatic inter-agency policy conflict that requires prompt resolution by the President. I have asked that an additional day of hearings be scheduled on Friday, January 27, 1978, SO that you, and other witnesses, can appear to resolve these issues.

Currently the Shipping Act, 1916, prohibits any carrier, U.S. or foreign, serving United States trade from charging any rate other than that published in tariffs on file with the Federal Maritime Commission. Massive vessel overtonnaging in our trades has created great pressure to reduce rates however, steamship conferences, with their anti-trust immunity to set rates, have kept published tariffs at high levels. As a consequence, carriers needing more cargo to fill their ships have offered secret, and illegal rebates.

The policy conflicts are these:

(1) The Department of Commerce, charged with promoting the United States merchant marine, is concerned that prosecutions are unfairly harming United States carriers. Foreign carriers generally cannot be prosecuted since they, supported by their governments, have refused to make necessary documents available to prosecutors.

(2) The State Department is concerned that sanctions, such as requiring closure of ports if documents are not made available, will damage United States foreign relations and show a lack of respeci for the internal law of our trading partners.

(3) The Federal Maritime Commission, an independent regulatory Commission that is charged with enforcing the Shipping Act, is prevented from doing its job of treating all carriers equally. Its inability to bring foreign carriers under the law challenges the integrity of its processes.

(4) The Justice Department, also charged with enforcing the law of the United States, has threatened to prosecute carriers-even one who has already made a settlement agreement with the Federal Maritime Commission.

Its independent prosecutional discretion is often at conflict both with Federal Maritime Commission procedure and the foreign policy objectives of the State Department.

If these issues are to be resolved, the various agency policies and objectives must be coordinated and the differences resolved. As the official charged with the responsibility of coordinating Executive Branch policy, your testimony will be particularly welcome on Friday. Sincerely,

PAUL N. McCLOSKEY, Jr.,
Ranking Minority Member,

Merchant Marine Subcommittee. Mr. ANDERSON. No objection; so ordered.

Mr. McCLOSKEY. I was advised this morning by the Office of Management and Budget that, as a result of this letter, they are taking immediate steps to try and resolve the policy differences within the administration. However, they are not prepared this morning to cither appear regarding the questions raised in this letter or to designate an agency to appear on the administration's behalf.

They have authorized the Justice Department, through Mr. Keeney and his associates, to testify within their ability as to the Department of Justice's position.

But as I understand it, Mr. Keeney, you are not authorized to testify as to the administration's policy on these issues.

Mr. KEENEY. That is correct, Mr. McCloskey.

Mr. McCLOSKEY, Mr. Chairman, I might say the Office of Management and Budget has indicated that within a very few days, the administration can give us a policy statement that would coordinate the positions of these agencies. They have requested a few days in which to do so.

So, I am afraid at the conclusion of these hearings, I will have to request the subcommittee delay the mark-up presently scheduled for Tuesday until such time as the administration can present its witnesses. This is a matter I think Chairman Murphy must decide after

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