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will serve to enhance the security of our Nation as over 98 percent of all military cargoes are moved by sea.
Many of the officers who direct our Nation's seafaring vessels are my good friends and constitutents. I have known many of them for a great number of years and I am impressed by their dedication, hard work, loyalty and commitment to the welfare of our country.
This legislation is of special significance when we realize that students enrolled in our maritime academies must attend school 11 months of each year and, thus, do not have an opportunity to supplement their parents' contribution through working during the summer months. In the face of ever-increasing costs, many of our merchant marine students find themselves unable to continue their education in the absence of additional financial support.
The financial provisions embodied in H.R. 8328 are designed to alleviate the burden of increased costs through a program of fully secured, repayable advances to students not to exceed $1,000 each year, . I believe this approach to be both fair and realistic. It is also not without precedent. Similar provisions, in fact, are at the heart of the National Defense Education Act loan program. Under the provisions of H.R. 8328, a student receiving a loan would be relieved of the obligation of repaying a portion of that loan with each year's service in our merchant marine. I believe this approach is fair to both the student and the American taxpayer.
As an investment in human resources, the loan program incorporated in this bill will generate dividends far in excess of the Federal financial commitment required for funding. It will, in fact, make a key contribution to the security of this Nation and the welfare of our people. It will signal to the world our absolute determination to maintain a position of strength and preeminence on the world's seas.
The people of my State and district are proud of the Texas Merchant Marine Academy. They want to see it play an increasingly important role in our development as a nation. I urge you to act favorably on this measure in order to insure that our country will continue to develop the finest merchant marine in the world.
Mr. DOWNING. Thank you for an excellent and most informative statement.
The next witness this morning is Dr. A. Sanford Limouze, of the Massachusetts Maritime Academy.
Dr. Limouze, we are happy to have you before the committee. STATEMENT OF DR. A. SANFORD LIMOUZE, PRESIDENT, MASSA
CHUSETTS MARITIME ACADEMY
Dr. LIMOUZE. Thank you, Mr. Chairman.
Mr. DOWNING. I know Mr. Keith is delighted to have you here this morning
Dr. LIMOUZE. Thank you.
Mr. Chairman and members of the committee: If I may make a suggestion, to save the time of the committee for more valuable proceedings than to hear the testimony read to you, I should like to ask that
I the testimony be made a part of the record of these hearings, and I will speak much more briefly on one or two major points.
Mr. DOWNING. Without objection, your statement will be made a part of the record, and you may proceed as you wish.
(The statement follows:) STATEMENT OF REAR ADMIRAL A. SANFORD LIMOUZE, PRESIDENT, MASSACHUSETTS
Mr. Chairman and Members of the Committee: I wish to thank you for an opportunity to appear before you to speak in support of legislation affecting maritime officer training. My name is Arthur Sanford Limouze. I am President of the Massachusetts Maritime Academy, hold the degree of Doctor of Philosophy from Duke University and have been honored by appointment to the rank of Rear Admiral, United States Maritime Service (inactive). Having first entered the field of maritime education in 1947, I find myself, occasionally to my consternation, a kind of elder statesman in this field in 1969; and I speak to you from deep and sincere conviction developed slowly during the past of nearly a quarter of a century.
I noted with considerable interest and some concern a long and glowing account in the New York Times of 12 October 1969 in which the new policies for the U.S. Merchant Marine were described. My concern arose because this entire article contained no mention of the industry's most important single ingredient: manpower. Ships without officers will not restore the U.S. Merchant Marine. The two bills I wish to speak on today are vitally concerned with manpower and vitally important to any long-range solution to problems plaguing the industry.
The bill I wish particularly to speak for is HR 8328, filed by Representative Hastings Keith and six other members of this Committee: Congressmen Brooks, Clark, St. Onge, Pollock, Morton, and Leggett. In further support, Representatires Burke, Heckler and Philbin of Massachusetts and Representative Tiernan of Rhode Island have filed identical bills. The basic principles of the bill are derived from testimony presented before this Committee in 1966 where, on page 283 of the published Hearings, I proposed an increase in cadet subsidy tied in with an obligation to sail in the merchant marine. I believed then and do now (and Congressman Keith and others apparently share this conviction,) that an obligation to sail in return for a subsidy is equitable and just. That, in essence, is the purpose of HR 8328. The following objections to the bill may be raised :
1. “The bill would discourage recruiting.”
3. "It isn't necessary to have a commitment to sail because the United States Navy enforces the commitment by way of withholding commissions."
4. "A ‘moral obligation' now exists; we do not need a legal one." To these objections, major and minor, I would offer these answers :
1. It is one of the objectives of this bill to discourage recruiting—that is, the recruiting of students who have no intention of going to sea but who may be looking for a free ride. It is another objective to increase the attractiveness of a career in the merchant marine for the young men who are genuinely motivated in that direction.
2. Administrative problems of far larger and more complicated programs have not proved insurmountable to other organizations; to assume in advance that the maritime community is doomed to failure is to confess to an inadequacy I personally do not believe is warranted. The Justice Department, under P.L. 90–351, has recently embarked on a larger program quite similar to that proposed in HR 8328. This program provides :
2.1. A direct grant of $300 a semester (maximum $900 a year) to aid participant.
2.2 A loan maximum of $1,800 a year for four years.
2.3 Complete forgiveness of loan and grant totals after four years in law enforcement.
2.4. Repayment in ten years at 7% interest in the event of failure to re-enter law enforcement. Administrative and collection problems are expected to be insignificant. I have no reason to think that we in maritime cannot do as well.
3. First of all, not all graduates are commissioned in the Naval Reserve so there is no “enforcement” by the Navy in their cases; secondly—and more importantly—must we always turn to the Navy or some other power to police our own industry? I would say not.
4. The attractive-sounding “moral obligation" has one unfortunate shortcoming—it is completely unenforceable. Without attempting to raise a banner for the harrassed taxpayer, I might yet ask if there is anything so inherently ignoble about a legal obligation that we have to shy away from
'it. Putting aside temporarily the question of a commitment to serve in return for subsidy, we can still show that at one school, at least, the $600 subsidy established in 1958 has not kept pace with educational costs. On this basis alone it would be possible to argue with considerable logic for an increase to $1,000 per year for each cadet. The annual appropriation at the Massachusetts Maritime Academy in 1960 was $453,000. In 1969 it was $733,000. If we set up a ratio of 453 to 733 as valid, the $600 in 1960 should be $972 in 1969. Educational cost increases at the other academies parallel this experience.
To argue thus, however, is to ignore the primary objective of HR8328: to establish some guarantees that a subsidy program will do what it was intended to do. Thus the economically justifiable $1,000 subsidy becomes, with a "commitment to sail," a better arrangement for everybody : industry will be assured of a reasonably constant source of young officers, the taxpayer is assured of the service for which the subsidy was offered, and the young men (in the words of one of my seniors—“It's too good to be true!") will have an increase to help offset our ever-rising costs in education. I would recommend the following changes in the bill as it now stands :
1. First, delete Section 3, in which reference to the Federal Merchant Marine Academy appears. Differences in jurisdiction and funding are such ithat state and federal schools ought not to be mixed in a single bill.
2. On page 1, beginning with line 9, the term “repayable advance" picks up unintentional ambiguities so that by page 2, line 20, the phrase "one-fourth of the total amount of such advance” can mean something other than "one year's subsidy.” The ambiguity can be removed by inserting the word annual between “repayable advance” where it occurs, and rephrasing line 20, page 2, to read : "the rate of one annual advance for * * *"
3. On page 3, line 3, the term "eight months” may be subject to change if contracts are re-written. The "six months on and six months off” contract may soon be standard. Suitable wording for this should be dereloped. I believe, also, that the stipulation of "and tweleve months of service * * * as an officer in the Armed Forces * * *” might better be left indefinite and be made to read “and service as an officer in the Armed Forces * * *"
4. To make allowances for periods of slack employment, some means should be devised to release the graduate from an obligation which cannot under the circumstances be met. The officer unions, the shipping companies, the U.S. Coast Guard, the Maritime Administration, and the several academies all will have cognizance of this condition in varying degrees; and from their combined intelligence an accurate picture of the industry at a given moment can be derived. I propose therefore as paragraph 3 of Section 1 of HR 8328 the following:
"The liability to repay any repayable annual advance shall be cancelled when in the opinion of the graduating institution and the Maritime Administration a graduate (during a period not to exceed sixty days after his graduation) has sought without success a position as a ship's officer aboard an American flag vessel operating under the laws of the United States."
The precise solution to the administrative task by this can be attained by close cooperation between the administration of the college and the
Maritime Administration. In my opinion HR8328 is a very good bill and should become a part of our maritime policy. The objections raised to it have not answered the question : “Why not have an obligation to serve in return for subsidy ?" The objections appear to deal with troublesome but nevertheless peripheral matters, and I do not advocate avoiding a problem simply because it may be difficult. The solution offered by HR8328 is worth a little effort.
REGARDING H.R. 8785
I have much briefer testimony on HR8785 than on Representative Keith's bill. I should like to see the provision for increased subsidy to the states incorporated in HR8328. As with the cadet subsidy, the payment to the states of $75,000 has become annually a smaller percentage of the cost of education. If this subsidy is intended to provide realistic assistance to the states operating maritime schools, it should be increased.
The auditor's reports on the Massachusetts Maritime Academy budgets since 1960 indicate in Table I the following annual expenditures (rounded to the nearest thousand) and the percentage of this represented by the Federal payment of $75,000 annually is shown in the right hand column :
It should be recorded here that since 1966 the Commonwealth of Massachusetts has appropriated over 9 million dollars for capital construction at the Academy to support its growth program. It must further be recorded that a 12% acrossthe-board salary increase (about 70% of any college budget) was just voted in Massachusetts. Couple this with our expected growth to 800 students, and it can easily be predicted that $75,000 will soon drop to less than 5% of the state's annual cost. This subsidy's future, plotted on a curve, is sharply descending. To increase the payment to $250,000, as HR8785 proposes, would show real concern for the support of that most important single segment of the maritime industry-manpower.
We have at the Massachusetts Martime Academy the following motto on a bronze plaque :
"You can have a merchant marine with first-class men even if they sail second-class ships, but second-class men can't be trusted on the finest ships afloat." In support of this belief I urge that this section of Representative Hathaway's bill, HR8785, be incorporated with HR8328 and that the Keith-Hathaway bill be passed into law.
The other part of HR8785 is to me dangerously undesirable. To alter the phrase “not more than $600 a year” to read “not less than $600 a year” is unwise. An uncharitable and disenchanted budget officer, by reducing the total appropriation for cadet subsidy, would thereby force the academies either to reduce their enrollment or to carry unsubsidized students. For instance, with “not less than $600" $600,000 would pay 1,000 cadets. At “not more than $600," should there be 1,200 cadets, each would receive $500—not enough, but better than zero. My small experience with guardians of the public budget leads me to regard as injudicious all attempts to coerce them into increased appropriations. The proposed change of wording in HR8785 could be interpreted as an attempt at such coercion ; therefore I would most strongly urge that it be removed from this bill.
Dr. LIMOUZE. Thank you.
Mr. Chairman, H.R. 8785 and H.R. 8328, are not mutually exclusive but are complementary. They deal with two kinds of subsidy, direct payment to the State and direct payments to the students. These two varieties of subsidy are in effect in other areas of Government and education and should require no special justification or apologies here.
I recommend that the provisions of H.R. 8785, regarding State sul.sidy, and the provisions of H.R. 8328, regarding cadet subsidy, with an obligation to serve be incorporated into a single Hathaway-Keith bill or Keith-Hathaway bill and be enacted into law.
Peripheral objections will certainly yield to the determined attacks of intelligent men.
As president of the Massachusetts Maritime Academy, former dean of the Federal Academy and former department head of the New York Maritime College, I am acutely aware of the contribution maritime graduates make to our society. The requests for financial increase proposed by such a combined bill will represent a tremendous bargain to our Nation. The increase will allow us at Massachusetts to proceed more quickly with our plans for upgrading and advanced training programs and to continue our traditional service to students from an income bracket which cannot be described as high.
Mr. Downing. Thank you, Dr. Limouze.
Doctor, it is a pleasure to have you with us. I have visited your Academy and want to commend you on the good job you are doing under the circumstances. I can see from visiting your Academy as well as others that the additional money is very much needed.
I wanted to question you on your disagreement with me with respect to the second part of my bill as contrasted with Hastings Keith's bill on the same subject. I wish you would give me some further amplification as to your reasons.
Dr. LIMOUZE. I would hesitate to elaborate further than I did in the printed testimony, Mr. Hathaway, where I pointed out that this attempt to put in a floor, as in the second part of 8785, is as someone said yesterday, I believe the acting chairman yesterday, a kind of open-ended budget request, and I think its chances of survival are nil, frankly.
Mr. HATHAWAY. What if we changed it to put in a floor and ceiling, say, $600 to $1,000 ?
Dr. LIMOUZE. This would provide some comfort to the budget, I am sure. I would still like very much to urge that an obligation to serve in return for this subsidy be included. I think this is the main point of Mr. Keith’s bill.
Mr. HATHAWAY. Now, the testimony we received, so far at least, indicates that most of the graduates are serving. Someone testified yesterday that in the California academy all but 5 percent are still in the service or directly connected therewith 5 or 10 years after they graduate. So why is there a need to have this incentive if most of them are serving anyway?
Dr. LIMOUZE. I think the best justification that I can offer for this is that over the years, looking back at testimony before this committee in 1955, and again in later years, the objection to the State program has been that the cadets receive Federal subsidy and have no obligation in return.
I do not feel that this is fair to the cadets because the graduates by and large do tend to go to sea when the jobs are available. I think that in offering a subsidy, however, it is only fair to offer something in return for the subsidy and, if they are indeed all going to sea, what difference would it make if there were a legal obligation? If they a re not going to sea, the legal obligation at least would recapture for the taxpayer that portion of the subsidy which was not put to the use for which it was intended.
Mr. HATHAWAY. Well, now, the effect of the Keith bill would be to eliminate the $600 maximum payment that is paid now and substitute in lieu thereof a $1,000 payment so that the cadet who is now receiving $600 would lose that outright grant and exchange it for a loan. So, that in a sense, we are going backward. If the Keith bill said