The bill offers no assistance of any sort to the academy itself, only to the student.

With the conditions attached to joining some maritime officer unions, the graduates might not be able to sail for the stipulated period.

There are no provisions in the bill to take care of the situation beyond the control of the graduate such as a prolonged strike of maritime or longshoremen unions.

There is no provision in the bill to take care of a drastic reduction in shipping, thus doing away with the possibility of berths on board ship to meet the sailing requirements.

This bill offers so little in contrast to the present subsidy payments to cadets, and due to the repayment provisions it could be considered to offer less. In some respects, this bill offers less than some of the ROTC programs.

Going to the comments on the Hathaway bill H.R. 8785:

This is a clean bill offering no difficulty of administration.

The Federal Government has offered no increase in funds to the State maritime academies for operational support for years despite the rise in costs in the past decade. This bill would greatly assist the academies with the increased support.

The Federal Government actually stands to reap more potential gain from the State maritime academy programs than the individual States. Therefore, in the partnership between State and Federal Government in the operation of the State maritime academies, it would appear equitable that the Federal Government should assume a greater proportion of the costs of operation. This bill could accomplish this objective.

Mr. MURPHY. What degree do the graduates of your academy receive?

Admiral CRAIK. A bachelor of science or engineer

Mr. MURPHY. Do you feel it would be an advantage to be part of a university like Texas A. & M.?

Admiral CRAIK. Yes, sir. Being under their umbrella of support is greatly helpful for us, yes, sir, and they set the standards.

Mr. MURPHY. Do they assist you with faculty?

Admiral CRAIK. Our faculty is approved by Texas A. & M. The qualifications must meet A. & M. standards, and other than that, we have to show that we need this or that additional instructor.

Mr. MURPHY. Do you feel that there should be some curb on the number of maritime academies that should be established?

Admiral CRAIK. Well, this has been discussed. I think that the answer is that I would rather leave that to the wisdom of Congress to pass upon in preference to myself.

Mr. MURPHY. In other words, we are addressing ourselves to the proliferation of academies. If, as Mr. Blackwell said, the law says each State can have an academy, and Michigan is trying to start one, perhaps Iowa could start one for the Mississippi River.

Admiral CRAIK. I think, sir, as you have already indicated, with the proliferation of academies, then there would be a question of the utilization of the graduates of these academies.

Mr. MURPHY. Do your graduates go into the Naval Reserve?

Admiral CRAIK. Yes, sir, because by law all officers sailing on subsidized vessels, if eligible, are required to join the Reserve.

We have a naval science course.

Mr. MURPHY. In your statement I see that you have had no problem with graduates serving in the merchant marine.

Admiral CRAIK. No, sir. The unsubsidized ships, and particularly some of the tanker fleets in the Gulf, their retirement program has just about taken effect, and I think Humble took a total of 70 graduates of the maritime academies this year, and they feel that the attrition rate is going to be such that they will need graduates from maritime academies and from other sources for the future.

Mr. MURPHY. Do you have courses in atomic or nuclear engineering? Admiral CRAIK. Not at this time. We hope to have them.

Mr. MURPHY. The financial figures listed on pages 3 and 4 of your statement, does the sum listed as Federal funds take into account the $75,000 paid as well as the payment of not in excess of $600 per student under section 6-A?

Admiral CRAIK. Sir?

Mr. MURPHY. In your chart as far as the revenues are concerned on page 3, does the sum listed as Federal funds-in other words, the $86,789, and in 1964 you give the figure and so forth, does that sum include the flat payment of $75,000 as well as the payment of not in excess of $600 for the student?

Admiral CRAIK. Yes, sir.

Mr. MURPHY. It does.

There is certainly quite a fluctuation in that figure as I examine this chart. Is there some reason for that fluctuation?

Admiral CRAIK. As I said earlier, I have been there a year and 9 months, and in preparing those figures, I questioned the source of some of them. Unfortunately, my business manager has been there only a couple of months longer than I, and we didn't have the time to get down and find the reason behind this variation. I was very interested in this, too.

Mr. MURPHY. Does the Texas Legislature meet in odd years, or even years?

Admiral CRAIK. They meet this year, It will be 2 years from now, sir. Mr. MURPHY. That means 1969 to 1971.

I note that in 1965 the State funds amounted to 31.88 percent, whereas the student participation, the student fees were 40 percent, which is quite a high figure, and in the last 5 years you have gotten it down to about 14 or 15 percent.

Admiral CRAIK. Yes, sir.

Mr. MURPHY. Is there any reason for that? It was a year lature met.

Admiral CRAIK. I will have to confess, I don't know.

the legis

Mr. MURPHY. We certainly appreciate the opportunity of having you here.

Mr. Hathaway?

Mr. HATHAWAY. Thank you, Mr. Chairman.

Thank you, Admiral, for your statement, and let me say again that I enjoyed the education you gave me on your Academy when I was in Galveston earlier this year, and I want to commend you on the admirable job you are doing.

I might say you are doing it with the able assistance of a man who was formerly with the Maine Maritime Academy.

Will you tell me, when do you expect Pelican to be completed? Admiral CRAIK. We hope to have the moorings completed by Easter of this year. We hope to have the construction of the two buildings started by May of next year, and we hope to move over there in the following year.

Mr. HATHAWAY. Since you are connected with Texas A. & M., your students are entitled to benefits under the Higher Education Act. Admiral CRAIK. Yes, sir; and the Texas opportunity plan, which goes into effect this year.

Mr. HATHAWAY. But you do not include any of those funds on page 3 of your table.

Admiral CRAIK. As yet, sir, we have not had any of these funds. Some of the shipping companies have donated to our student educational funds. The propeller clubs in the gulf area have been generous in donating money to our educational fund, and one indication of their interest that they assess each member a dollar a year toward our educational loan fund.

Mr. HATHAWAY. And you take advantage of HUD money, also, for dormitory facilities, or do you plan to?

Admiral CRAIK. We hope to get matching funds for the dormitories. As yet, they haven't planned any dormitories. We use the ship.

Mr. HATHAWAY. And the Higher Education Facilities Act, you will be taking advantage of that, too?

Admiral CRAIK. We hope to.

Mr. HATHAWAY. Thank you for your testimony.

Mr. MURPHY. Mr. Keith?

Mr. KEITH. Thank you, Mr. Chairman.

I join in Mr. Hathaway's praise of your statement in support of his legislation. That goes half way.

When I get through listening to you fellows, I wonder why you support the $600. How do you justify taking the $600?

Admiral CRAIK. Well, I think it isn't a question of turning down funds from any source, sir.

Mr. KEITH. You have been very forthright. You have said the students are getting enough and that you need more. How do you justify the $600 that they are now getting? You should have been suggesting that we repeal this legislation sometime ago.

Admiral CRAIK. I hope I didn't convey that impression. The students need the $600.

Mr. KEITH. If they needed the $600 at the time the act was passed, why don't they need more now?

Admiral CRAIK. There is the question of the "more."

Mr. KEITH. Of the what?

Admiral CRAIK. Of the "more."

Mr. KEITH. Why can't you justify an equal purchasing power now, if you acccepted the $600 in previous years.

Admiral CRAIK. I think the repayment provisions of your bill

Mr. KEITH. Let's forget about the repayment. That can be straightened out. I am asking you-considering the depreciated value of the dollar-why can't we approve an appreciation to compensate for inflation?

Admiral CRAIK. It would be helpful, sir.

Mr. KEITH. It would. Then you don't object to that portion of my bill?

Admiral CRAIK. No.

Mr. KEITH. $600 now is worth about $400 in contrast to what it was in previous years.

What percentage increase is contained in my bill, $600 to $1,000. What percentage increase is that?

Admiral CRAIK. A two-thirds increase, sir.

Mr. KEITH. Good for you. It is a 6623-percent increase. That is a substantial amount. I think you went a little far in the last recommendation, or observation.

Objections are that there is no option offered, that the bill would be difficult to administer, and so forth. Others will speak to that, and it may be so. But I do think the amendments can be made to improve that, and I am willing to accept that for further study on the part of the committee before the legislation is adopted in its present form.

There is no option offered in the bill as to whether or not a cadet could take advantage of the loan, or would prefer not to. There is no option offered in the bill as to whether or not a cadet wishes to take advantage of the loan, or would prefer not to.

There is nothing that says that he has to. What is wrong with it? Admiral CRAIK. We went through the bill, sir, and as written, it would appear that as part of the program each cadet in the program would be required to take the loan. That was our interpretation of it. Perhaps we might have been wrong.

Mr. KEITH. As a matter of fact, it was intended as a grant, and a loan upon graduation. I can understand your concern.

But what is wrong with somebody paying a little bit toward his education if they are not going to use it for the purpose for which it is offered? What is wrong with the commitment to serve in return for a subsidy? They are probably getting subsidized already at $3,000 or $1,000 a year. We don't ask them to pay back the basic subsidy.

What is wrong with the commitment to serve in return for a portion of the money that has been expended in their educational endeavors? Admiral CRAIK. As I tried to develop here, sir, I am contrasting the recommendations of your bill over the existing situation. That is primarily the situation.

Mr. KEITH. Well, we are going to hear later on from others, and time is moving along here, so I won't spend too much time on these. But you mention that the bill is discriminatory in that a cadet with parents of comfortable means could easily repay the loan without hesitation, while the cadet without means would be tied to the provisions of the bill.

Isn't the existing system discriminatory?

Admiral CRAIK. No, sir. The existing situation is right across the board.

Mr. KEITH. Yes, so the fellow who comes from the wealthy family and can meet the situation has an advantage, and the poor fellow is discriminated against.

Admiral CRAIK. But there are no provisions at present that he has to repay any of this.

Mr. KEITH. He has to repay roughly $600 more or less at varying academies. We showed what the tuition fees were and the subsistence costs were under the California system. For the fellow who has got that money because he comes from parents of well to do means, there is no problem. But the fellow who doesn't have it has a problem.

We are trying to avoid the discrimination that exists now.

The fellow who is making his decisions says, "That is going to cost me some money, and I don't have it. If I had wealthy parents, I would go there, but not having them, I have got to go to some other school where I get a higher subsidy".

It seems to me there is a discriminatory situation existing now. It is intended to make it easier for the fellow who doesn't have the wealthy parents.

Admiral CRAIK. Sir, if I may, our costs per student at present are $450 for the fall semester, $448 for the spring semester and $778 for the cruise.

The total cost to the student is comparatively high in contrast to even other colleges in the area.

Mr. KEITH. It is comparatively high.

Admiral CRAIK. Yes, sir; and our cadets do not get an opportunity for outside employment. It is an all-year-round training program.

Mr. KEITH. Now you are talking my language. We are trying to avoid that discrimination. We are trying to avoid some of the costs that this man pays over and above what there would be if he went to an educational institution that didn't require so much.

I think that argument can be turned the other way, personally. You say the bill offers no assistance of any sort to the academies, but only to the student.

Well, the Hathaway bill offers no assistance, really, to the academy, as has been pointed out here. It goes to the State. It may very well be a paper transaction in its present form. The State, of course, would like to have it. But this way it goes to the student and enables the academy to be more competitive in its efforts to get high quality students.

With the conditions attached to joining some maritime officer unions, graduates might not be able to sail for the stipulated period, and that is the same thing that I think you mentioned.

Mr. MURPHY. Will the gentleman yield?

Mr. KEITH. Yes.

Mr. MURPHY. Do you have any tutoring courses for officers as they take their higher examinations?

Admiral CRAIK. Not as yet; no, sir.

Mr. MURPHY. Do you plan any?

Admiral CRAIK. This would be a very desirable feature if it could be instituted at a later date; yes, sir. We could not afford this. Mr. MURPHY. Could I ask Admiral Williamson?

Admiral WILLIAMSON. No, sir; we don't have any tutoring for our officers.

Mr. KEITH. Thank you.

Did I understand you to say that Humble is worried about attrition? Admiral CRAIK. Yes, sir. I said they took 70 graduates this year from State academies and other sources.

Mr. KEITH. And there is attrition.

Admiral CRAIK. They have their voluntary pension plan in effect now, sir.

Mr. KEITH. You are talking, then, about attrition from early retirement and other things?

Admiral CRAIK. Yes.