Consequently it seemed logical that the Secretary of that Department should have the responsibility for carrying forward the national policy of the United States with regard to the merchant marine. This proposal was not met with unanimous approval. Opponents feared that the problems of the merchant marine would be too far removed from those who were familiar with them and that bureaucratic control would cause the whole system to bog down in politics.

The advocates of the plan reasoned that it would eliminate the objectionable merger of regulatory and promotional functions, previously discussed; that it would improve the general administration of the Maritime Commission; that all facilities of the Department of Commerce could be effectively used; and that trade routes could easily be controlled by Congress although there was no reason to fear the Secretary would abuse his authority with regard to their scheduling. The Director of the Bureau of the Budget strongly favored the plan envisioning it as "the development of a sound and effective organization of transportation programs."

The Plan became effective on 24 May 1950. It created a three member Federal Maritime Board assigned the responsibility of the regulatory functions under the Act of 1936 and the authority to determine and award construction and operational subsidies, the determination of such awards not being subject to modification. Also created was a Maritime Administration which assumed most of the administrative functions of the deposed Maritime Commission. All other functions were transferred to the Secretary of Commerce and he was made generally responsible for giving guidance to the Maritime Board. The Maritime Administration was placed under the Secretary and the responsibility for carrying forward national policy was vested directly in the Secretary.

In 1961 it again became apparent that the organization established in 1950 was unsatisfactory, particularly relating to the authority vested in the Federal Maritime Board to award subsidies and related promotional functions. Accordingly, in 1961 Reorganization Plan #7 abolished the Federal Maritime Board and established in its place the present Federal Maritime Commission. Its functions were now limited to regulatory ones. The determination and award of subsidies and other promotional and operating activities were concentrated in the head of the Department of Commerce. The Maritime Administration was retained in essen

tially the same capacity as provided for in the Reorganization Plan of 1950. The Secretary of Commerce redelegated his newly acquired authority, to determine and award subsidies, to the Maritime Subsidy Board of the Maritime Administration.

Section 1120 of 46 U.S.C. therefore currently provides:

It shall be the duty of the Secretary of Commerce to make a survey of the American Merchant Marine, as it now exists, to determine what additions and replacements are required to carry forward the national policy declared in section 1101 of this title, and the Secretary is directed to study, perfect, and adopt a long-range program for replacements and additions to the American Merchant Marine so that as soon as practicable the following objectives may be accomplished:

First, the creation of an adequate and well-balanced merchant fleet, including vessels of all types, to provide shipping service on all routes essential for maintaining the flow of the foreign commerce of the United States, the vessels in such fleet to be so designed as to be readily and quickly convertible into transport and supply vessels in a time of national emergency. In planning the development of such a fleet the Secretary is directed to cooperate closely with the Navy Department as to national defense needs and the possible speedy adaptation of the merchant fleet to national defense requirements. Second, the ownership and the operation of such a merchant fleet by citizens of the United States insofar as may be practicable. Third, the planning of vessels designed to afford the best and most complete protection for passengers and crew against fire and all marine perils.

It is obvious therefore, that the Secretary of Commerce now has vested in him the authority and responsibility to carry out the national policy with vigor and effectiveness.

B. Executive Order 10999 of 1962

In 1961 the Director of the Office of Civil Defense Mobilization issued Preparedness Order No. 2 which was essentially the same as the present Executive Order 10999 of 1962, assigning certain emergency preparedness functions to the Secretary of Commerce. It provides in part:

Section 1. Scope. The Secretary of Commerce . . . shall prepare national emergency plans and develop preparedness programs covering:

(a) Development and coordination of over-all policies, plans, and procedures for the provision of a centralized control of all modes of transportation in an emergency for the movement of passenger and freight traffic of all types, and the determination of the proper apportionment and allocation of

C. Additional Authority and Responsibility of the Secretary of Commerce for Emergency Preparedness Essentially this order vests in the Secretary of Commerce the responsibility for preparing national emergency plans and developing preparedness programs covering all modes of transportation with the exception of those elements normally operated or controlled by the Department of Defense.

Under Sections 210 and 502 of the Act of 1936, the Secretary is empowered and required to make periodic surveys of the American merchant marine and shipbuilding capacity and to study, perfect and adopt long-range programs for replacements and additions to the U.S. Merchant Marine. E.O. 10999 reaffirms this responsibility and also clearly defines the Secretary's responsibilities with regard to supporting facilities and allied transportation media for emergency planning.

Section 902 (a) of the Act of 1936 provides in part "Whenever the President shall proclaim that the security of the national defense makes it advisable or during any national emergency declared by proclamation of the President, it shall be lawful for the Commission to requisition or purchase vessels or other watercraft owned by citizens of the U.S. or under construction within the U.S. or for any period during such emergency, to requisition or charter the use of any such property."

Under the Emergency Foreign Vessels Acquisition Act (P.L. 569, 83d Cong., 2d Sess) in any period during which vessels may be requisitioned under § 902 of the Merchant Marine Act of 1936 the President is authorized and empowered through the Secretary of Commerce to purchase or to requisition or to take over title to or possession of any merchant vessel not owned by citizens of the United States which is lying idle

in waters within the jurisdiction of the U.S., including the Canal Zone, and which the President finds necessary to the national defense.

By law and executive order there is therefore conferred on the Secretary of Commerce both the responsibility and the authority to develop and coordinate planning for such merchant shipping needs as a national emergency would require.

III. INTERDEPARTMENTAL AGREEMENT BETWEEN THE DEPARTMENT OF COMMERCE AND THE DEPARTMENT OF DEFENSE PROVIDING FOR THE DEPARTMENT OF DEFENSE SHIPPING REQUIREMENTS (WILSON-WEEKS AGREEMENT OF 1954) AND FLAGS OF CONVENIENCE

A. Shipping Necessary to the Department of Defense on Continuing Basis and in Case of Emergency; Nucleus Fleet

There is in addition a responsibility placed on the Secretary of Commerce to operate a substantial part of U.S. controlled ocean shipping to provide sealift for the Department of Defense during times of emergency and at other times. An agreement providing for this sealift capability is the Wilson-Weeks Agreement of 1954. It recognizes the necessity for the Department of Defense to have under its exclusive custody, jurisdiction and control at all times, a nucleus fleet of size and composition to meet current conditions and military requirements. The availability of such a nucleus fleet to the Department of Defense not only assures rapid response to its needs but also provides a base for expansion and opportunity for invaluable training and experience for those personnel who are assigned to its management. In times of national emergency one of the most critical problems is obtaining personnel who can manage expanded ocean shipping necessary for sealift. Management experts from commercial shipping lines are available in limited numbers to assist, but maintaining a nucleus force, experienced in present and prospective needs of the Department of Defense, will permit more rapid and orderly expansion in time of national emergency.

The framers of the Wilson-Weeks agreement did not envisage at the time of its adoption the wide range of contingencies which may confront the Department of Defense requiring commercial ocean shipping support and procedures regarding the use of U.S. controlled ocean shipping. Consequently, there is a present need to update this agreement to reflect such changes and delineate the responsibilities of agencies of

the Department of Defense and Commerce accordingly.

B. Foreign Flags Under Effective Control

A significant part of the U.S. Merchant Marine fleet reserve for mobilization purposes consists of those ships being operated by U.S. interests under foreign flags, sometimes referred to as "flags of necessity" or "flags of convenience." These are ships to which subsidy aid is not available because they are not operated as liners on essential trade routes. Accordingly, U.S. operators find it uneconomical to use U.S. flag ships because of the high operating costs. Consequently, these ships, although essentially U.S. owned, are registered primarily in the countries of Panama, Liberia and Honduras (PANLIBHON). They are engaged in purely commercial foreign trade and are comprised mostly of tankers and dry bulk carriers. The practice was initiated prior to World War II and during the war they were promptly assimilated into the war effort and greatly contributed to the efforts of the United States and its allies. They have since been considered a significant part of the United States capability and in effect under United States control for mobilization purposes.

The U.S. owners have resisted all efforts to place these ships under U.S. flags, contending that foreign registry is an economic necessity without which they would be unable to operate because they could not compete in international trade with low-cost foreign shipping. They have threatened to sell their ships to foreign shipping interests if they are denied the right to operate under foreign flags.

Naturally the United States would prefer to exercise complete control over these ships, particularly in the event of a national emergency, but in the absence of this ideal, effective control has been substituted. This control is predicated principally on assurances by the owners that specific ships will revert to U.S. control in such event. A limited number of former U.S. flag vessels transferred to PANLIBHON registry are under effective control as a result of stipulations in the Transfer Contract Approvals granted by the Maritime Administration. There are, however, no assurances by the countries of registry and no governmental treaties provide for this reversion.

"Effective control" of these ships has become a heated issue particularly with the maritime unions who regard it as a tenuous theory severely weakened by recent events in Cuba and Panama.

Proponents of the "effective control" theory point out that there are no restrictions in the existing maritime laws of the countries concerned which restrain U.S. control over these ships; that the national bond of allegiance of the owners to the United States augmented by written agreements strengthens U.S. control; that the countries in which these ships are registered have limited capabilities to operate and maintain these vessels and would be unable to expropriate U.S. property or dispute U.S. assumption of control; that the United States would afford these ships the best protection in time of war and they would gravitate back to the United States; that the U.S. government will provide war risk insurance to these ships and that § 902 of the Merchant Marine Act of 1936 empowers the Maritime Commission to requisition or purchase ships owned by citizens of the United States and these rights are stipulated in all Maritime Administration approvals of transfer to PANLIBHON flags.

Opponents of the "effective control" theory are generally the same interests which oppose registry and operation of U.S. owned ships under "foreign registry"; foreign shipping interests, foreign governments and U.S. and international maritime labor organizations. Their arguments are that the introduction of the U.S. merchant ships into foreign registry created unfair competition with foreign interests, depressed seamen's wages and presented owners with unfair tax advantages in their operation. They deny that "effective control" of these ships by the United States exists and point out that in time of national emergency or war these shipping interests could choose to ignore their agreements and use their ships for trade outside the combat area denying their use to the United States.

Perhaps the most serious threat to the availability of the "effective control" fleet is the attitude of the owners and operators. Their fear of labor boycott and the possibility of U.S. intervention in their operation has been evidenced by a reluctance to expand under the PANLIBHON registries. Many have turned to registry under traditional maritime flags of Western Europe for practical and economical purposes. It must be realized however, that effective control of these ships is greatly diminished and in some cases lost.

The undeniable facts of the situation must therefore be realized. The United States depends on "effective control" of the "foreign (Continued on page 102)

Captain Alm, Assistant Judge Advocate General for International and Administrative Law, formerly served as Assistant Judge Advocate General for Military Justice. His prior duty assignments include Chairman of the Joint Services Committee for Revision of the Manual for Courts-Martial; the Administrative Law and Legislative Divisions of the Office of the Judge Advocate General; Force Legal Officer, Commander Destroyer Force, U.S. Atlantic Fleet; and tours of duty in the Eleventh Naval District, San Diego, California, and in Pensacola, Florida, and London, England. A graduate of the George Washington University Law School, Captain Alm practiced law in Washington, D.C., for six years prior to his entry into the Navy. During World War II he served at the Naval Operating Base Iceland and as Flag Secretary to Commander Training Command Atlantic Fleet. He is a member of the American Bar Association, the Federal Bar Association, the American Society of International Law and the Inter-American Bar Association.

CAPTAIN CARLTON F. ALM, USN

Captain Smith is Assistant Judge Advocate General for Personnel, Reserve and Planning and is the Public Information Officer for the Office of the Judge Advocate General. Captain Smith is a graduate of both the College and the Law School of the University of Virginia. From 1939 to the time of his entry into the Navy he was engaged in the private practice of law in New York City. Following line duties in World War II, he was accepted for Special Duty in Law in 1946. Prior to his present assignment, Captain Smith served on the staff of various force and type commanders including tours of duty in the Philippines and in England. He is a graduate of the Career Course of the Army Judge Advocate General's School. Captain Smith is a member of the American Bar Association, the Federal Bar Association and the InterAmerican Bar Association.

CAPTAIN GEORGE F. O'MALLEY, USN

CAPTAIN THOMAS P. SMITH, JR., USN

Captain O'Malley, Assistant Judge Advocate General for Military Justice, was formerly District Legal Officer Third Naval District and Staff Legal Officer Commander Eastern Sea Frontier. Captain O'Malley entered the Navy in April 1942 and served for eighteen months at sea as an Armed Guard Officer in the Pacific. His other duty assignments have been Assistant District Legal Officer, Eleventh Naval District; Special Legal Assistant to the Secretary of the Navy and Assistant Secretary of the Navy (Personnel and Reserve Forces); Force Legal Officer for Commander in Chief, U.S. Naval Forces Europe and Commander in Chief Specified Command. He was Chairman and U.S. Navy member of the Interservice Legal Committee established by Commander in Chief U.S. Forces Europe. Captain O'Malley is a graduate of the University of Notre Dame and Chicago Kent College of Law. He is a member of the bar of the State of Illinois, the American Bar Association, American Society of International Law and the Federal Bar Association.

U.S. MERCHANT MARINE POLICY

(Continued from page 100)

registry" ships for a substantial part of its reserve mobilization fleet. Loss of that control either by migration of these ships to other countries or sale to foreign shipping interests would significantly adversely affect our emergency mobilization capabilities. Although the present situation is not ideal the United States must either choose a course of substantially increasing the subsidy program to include all U.S. shipping engaged in competitive foreign trade (at a tremendous cost) or it must protect and attempt to preserve those U.S. owned and controlled merchant ships which are registered under "foreign flags."

IV. PRESENT THEORY OF CENTRALIZATION OF TRANSPORTATION

Centralization of transportation programs under the Department of Commerce permits intelligent planning and budgeting of Federal transportation activities. In addition it coordinates widely scattered transportation functions throughout the executive branch. It therefore makes it possible for Congress and the President to hold a single official responsible and accountable for the effective conduct of all aspects of this program including size and character of the fleet under the U.S. flag, the need for Government assistance, and requirements for appropriations to support subsidy programs.

There have been proposals to fragment this central control by delegating to those departments of the government immediately concerned with transportation, the responsibility for maintaining shipping necessary to their prospective needs. It would follow that a considerable part of this allocated shipping would be inactive for extensive periods of time and consequently maintained in a "mothball" status with some predetermined period of readiness. These reserve ships would be withdrawn from the control of the Maritime Administration in that it would have no authority to provide for their operation and consequently their only purpose for existence would be to meet the needs of the department of the government to which they were allocated.

The advantages of such a plan are apparent and as its advocates suggest, the construction and operating differential subsidies with re

gard to these ships would be eliminated. The economy of this position, however, has raised some doubts by other reviewers and it is considered that its application would be dependent upon a cost study of the proposal. Additionally, the introduction of another responsible agent into the picture would only tend to delay transactions between the Maritime and the operators relating to vessels in the Reserve Fleet. It would appear that under the present law, implemented by interdepartmental agreements, the maintenance of the Reserve Fleet by the Department of Commerce and its availability to other governmental agencies as their needs arise is well provided for.

V. ADEQUACY OF PRESENT LAWS AS BASES FOR CHANGE AND EXPANSION OF CAPABILITIES

The present status of the laws and regulations as they pertain to the merchant marine reflects a series of well coordinated and remarkably flexible authorities which will permit implementation to provide for any foreseeable need for our national security. If funds are available and they are budgeted as required there is no restriction in the law or regulations which would inhibit or delay unlimited expansion of our merchant fleet.

The Merchant Marine Act of 1936 has withstood the test of time and application and those authorities who have been assigned the responsibility for its administration have found it to be a most practical and workable tool. It has had growing pains as has all legislation regulating phases of the expanding national economy and defense. Amendments, agreements, reorganizations and allied legislation have, however, kept it current and maintained its utility.

The responsibility of the Secretary of Commerce under the Act is clear and his allied responsibility for emergency preparedness is carefully outlined in the executive orders of the President. Notwithstanding the advocates of decentralization, the present system appears to be an efficient, workable one which delegates authority for policy making decisions to a branch of the government directly responsible to the executive. Experience has taught that in those areas where centralization is desirable in peacetime, it becomes a necessity during periods of emergency.