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The same thing would be true of the Panama Canal. We had a study made down there, in this committee, about the economies and found out at a certain point of cost through the canal, and pointed out to the Panamanians who thought they were going to take over a big grab deal, that we were already pushing the amount to go through the canal, and if they wanted to take it over, great, they would shut the canal down, because people would utilize these other economic potentials.

I think the biggest thing that struck me in my travel around is the configuration of industry at the ocean's edge. The Japanese are knocking our socks off in steel, and the main reason is they configured that whole steel industry complex to ocean delivery.

That concentrated ore comes for the most part from Australia, right through to the mill, which is at the water's edge. It is pumped into the mill. Next door to that mill there is a place where they make steel plate, and next to that is a place where they make ships, and next to that a place where they make automobiles, and the ships can just move down a couple of places, and they take on the improved product, whether it be just plate or whether it be an automobile.

They are telling us this is the way of the future. Kaohsiune and Taiwan is following that development.

I think one of the reasons that Hong Kong and Kaohsuine have been so great is that they have this configuration right at the water's edge. That is the most exciting development in the whole picture of international commerce and trade, and that is a very essential part of what you are trying to do.

Admiral RODGERS. I think you are entirely correct, and I think I would like to make an observation that, as Mr. Hathaway pointed out, I am supposed to be an aeronautical engineer, at least that is the way I was educated. Anyway I have been close to the aircraft industry for many years before I came to the Maritime Academy, and I find it gratifying now to see that the shipping industry is following a pattern that the aircraft industry developed, both in assembly line construction and in the operation of the airplanes.

When I first started to fly, they put a plane down for 2 days after 30 hours, while they checked everything. Now the planes continue to fly, and they have statistics. They know when an engine is going to wear out, and they replace it before it fails.

The same thing is true of ships. It needs a whole new generation of people who understand how you program these things, and run these things, and how the profit and loss aspect will enter the competitive picture.

I am encouraged to see that this is something we are really learning from the aircraft industry.

Mr. HANNA. I commend you for your statement again, and urge you to keep in constant contact with this committee, and keep them alert and aware of the fact that, if our country is going to be in this game, it is not going to do us any good to look back, and we can only put a certain amount of input, and that is where I think these management-labor schools have some value, in terms of maintaining what is, but your job is to see that we are in on what is going to be.

Admiral RODGERS. That is correct, sir.
Mr. HANNA. Thank you, Mr. Chairman.
Mr. DoWNING. Thank you.

Admiral, I have just one question.

Regarding the administering of this paying back the money by the student in the event he does not go to sea, how would it be if we would just deduct the amount from the next appropriation to that particuiar academy, and let the academy worry about getting it back?

Admiral RODGERS. As I said, this is one of the things I would like to avoid. It means an extra adimnistrative headache.

It is not only the collecting of the money. I don't anticipate that would be too much of a problem. We are doing this in the national defense loan. It is an automatic thing you could set up.

First of all, you have to find out who is supposed to repay the money, and this does mean that you are constantly surveying about four classes, so that you have 500 individuals, and you have to be getting some kind of either monthly or quarterly or semiannual, at least, check to know what their employment record is, and then make the decision as to whether to try to collect.

It does create a billet and a secretary and phone calls and letters, and it is bad. As I say, it can be done, but I would like to avoid it.

Mr. DoWNING. Admiral, as you know, I had the distinct privilege of visiting you several years ago, and I must say I have never seen a more beautiful place than Castine, Maine, and you run a fine operation.

Admiral RODGERS. Thank you, sir.

Mr. DoWNING. Thank you very much for appearing before the committee.

Mr. WATKINS. Mr. Chairman.
Mr. DOWNING. Mr. Watkins. I have just one short question.

What are the requirements for admittance to the Maine Maritime Academy?

Admiral Rodgers. They are listed in the catalog, here, the general requirements.

Vír. WATKINS. Does he have to have a high school education?

Admiral RODGERS. Yes; they have to have the high school education. They have to have fulfilled four units of English, and one of elementary algebra, and have had intermediate algebra, one of plane geometry, and one of either physics or chemistry.

They are required to submit their high school transcripts and their college boards.

Mr. WATKINS. He could not be admitted by an aptitude test. He must be a graduate of a high school?

Admiral RODGERS. To date we require a high school graduate. However, I am flexible if an individual comes along, and this happens occasionally, and we bend. These are our standards. If somebody comes along and can produce some evidence that he could get through this program, I have no objection.

Mr. WATKINS. I will tell you what is running through my mind. That is, the high school dropout, the boy that is capable of producing and may do great things for this country, that perhaps did not graduate from high school.

I have found in my own personal business that I have several employees in my own company, which does not happen to be ships, but is motor transportation, that we have been able to train in our business and send them off to a mechanical school at our expense, and we have developed some fine people.

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I just wondered if there was a chance for a boy that was a high school dropout to become a member of the Maine Maritime Academy, where he could be trained.

Admiral RODGERS. I would welcome an opportunity.

In all fairness to that individual, you just want to ascertain the level of his ability, so that he will not flunk out. I think you owe that to him.

Mr. WATKINS. Thank you very much.
Mr. Downing. Thank you very much, Admiral.

Admiral RODGERS. Thank you, gentlemen, and I hope you will come and visit us sometime.

Thank you, sir.

Mr. WATKINS. I certainly, Mr. Chairman, would like to say that this is very constructive and very helpful.

Mr. DoWNING. Our last witness today is Captain Thomas Burke, vice president of the National Council of Maritime Academy Alumni Associations, Inc., and chairman, Placement Committee, Massachusetts Maritime Academy Alumni Association, Inc.



, With your kind permission, I would like to wear two hats today: (1) That of the representative of the Massachusetts Maritime Academy Alumni Association; (2) Representative of National Council of Maritime Academy Alumni Associations.

I have two very short statements. On a personal note, I am a former shipmaster and past president of the Alumni Association of the Massachusetts Maritime Academy.

I have maintained the closest relationship with the maritime industry since my first day as a cadet at Massachusetts, and I have watched anxiously the ups and downs, the hills and valleys of the U.S. merchant fleet. Acting as placement officer for the academy through the Alumni Placement Committee for the past 18 years, I have had intimate contact with the conditions in the industry, the problems of the industry, the problems of our lads going to sea, and retention at sea, and otherwise.

One of the severest criticisms of the industry has come from within and without—that is, the criticism that Federal funds are paid to the students of the schools without any obligation to serve in return for the aid. This is a one-day operation which it is difficult to defend.

I know the young men from Massachusetts well, and I know that by and large they go to sea early and enthusiastically upon graduation.

I know also that Massachusetts, as verified by Dr. Limouze has been spending generously for the last few years, and believe me, this is an event which only occurred since the arrival of Dr. Limouze. Federal subsidies have not been keeping pace with State outlay.

Therefore, I feel that an increase in direct subsidy to the State, as proposed by H.R. 8785, is overdue, and that an increase in subsidy to the cadets is also overdue. It is now $50 a month. In 1951, it was $65 a month. We have gone backward, not forward.

And since an increase is certainly indicated by rising educational costs—I ought to know. I have three children in college-let us for once regularize our merchant marine training and establish a legal obligation to said in return for an increase in the Federal subsidy to train as merchant marine officers.

From a background of 30 years of close association with the maritime industry, I urge you to adopt the provisions of H.R. 8328, the Keith bill, and the increase in subsidy to the State, from H.R. 8785, the Hathaway

bill. Thank you, Mr. Chairman and members of the committee, for the opportunity to appear before you on behalf of the Massachusetts Maritime Academy.

May I read my statement from the national council ?

Mr. Chairman, the National Council is a grouping of the several maritime academy alumni associations into one body. We are about 4 years old. We represent the academies at Maine, Massachusetts, New York, Kings Point, Texas, California, and even the Pennsylvania academy, which has long since been defunct, but has a continuing interest through its alumni in matters martime.

The National Council of Maritime Academy Alumni Associations, comprising representatives from all academies, are vitally concerned over the failure of the Maritime Administration to provide ample funds to implement State-sponsored programs at the several academies, and would like to go on record as favoring:

1. That portion of H.R. 8328, Keith bill, which calls for an increase in the subsidy for the individual cadet from $600 to $1,000 annually, and

2. That portion of H.R. 8785, Hathaway bill, which calls for an increase in Federal appropriations from $75,000 to $250,000.

I speak for an organization whose executive committee, and by the way we met in executive session last week in New York, alone (25 members) represents 500 years of experience, exposure, and interest in maritime matters.

Thank you again, Mr. Chairman and members of the committee.
Mr. DoWNING. Thank you, Captain Burke, for a fine statement.
Mr. Hathaway.
Mr. HATHAWAY. Mr. Chairman.

Thank you, Captain Burke, for a very good and complete and concise statement.

With regard to the recommendation of the National Council, where you say that they go along with the increase of subsidy from $600 to $1,000, do you mean with the repayment, or just the increase of subsidy?

Captain BURKE. I think it stands as I have presented it in the prepared testimony. If I might explain our position, the charter of the Council dictates that we must approve any endorsement of a bill or attitude by a unanimous vote of the members present. This was not done in the executive session.

We did approve the increase. We avoided any mention of the requirement of repayment.

Mr. HATHAWAY. But your own opinion is that we should have repayment?

Captain BURKE. It is very difficult to wear two hats.

My own opinion is reflected on statement No. 1, which is that this should be a part of the overall bill.

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Mr. HATHAWAY. How would you answer the question I posed to Dr. Limouze, that right now they are getting $600 for nothing, and under the Keith bill we are going to take that away from them and say they get an increase to $1,000, but it is going to have to be on a loan basis.

In other words, how would you feel about making the $600 a grant, and making the additional on a loan basis?

Captain Burkr. I don't feel that they are taking away the $600. It is an increase to a thousand dollars, as I look at it.

I think this is a workable situation. I do feel perhaps, though, that it could be compromised in terms of the $400, as mentioned by Admiral Rodgers, and by other people testifying here today.

Mr. HATHAWAY. Do you envision any difficulties in administering the program by the schools?

Captain BURKE. It is very difficult for me to anticipate that a binding, legal obligation of the United States Government is going to be avoided by any of our midshipmen.

We have had very informal student loan programs. There is the pattern of the Savannah program, which requires a repayment for individuals trained under that program who do not pursue careers, and at least to date, to my knowledge, there has been no problem in regulating these repayments to the Federal Government.

I know that if I had a bill from the United States Government Treasury, I would be inclined to pay it.

Mr. HÌATHAWAY. I did not mean particularly a repayment, but on exercising judgment as to whether or not the individual has made an effort to go to sea. Would

you endorse what Dr. Limouze said this morning about that. that if he tried for 60 days, and MARAD and the school decided that he could not get a job in 60 days that he would be forgiven if he took a civilian job?

Captain BURKE. I think I would be inclined to agree with both Admiral Rodgers and Dr. Limouze, that there are inherent problems in this area, and I think that the forgiveness feature is a realistic one, and I think could be taken care of.

Mr. HATILAWAY. In view of the statistics given to us so far with regard to the number of years, and the percentage of graduates who stay in the service, it almost seems that the incentive incorporated in the Keith bill is not really necessary.

Captain BURKE. I might answer that by saying that you have just heard Admiral Rodgers mention the fact that some of the lads in going to sea are disillusioned at an early stage, owing to the fact that they have been aboard rundown vessels or improperly managed vessels, or have personality conflicts.

I do think that this situation could be worked out.
Do you want to restate that question? I think


threw me a curve. Mr. HATHAWAY. Take the testimony of the superintendent of the California school, who I believe said that over a 5- to 10-year period there were only 5 percent who were not either at sea or in an industry directly related.

That means 95 percent of the graduates are really, in a sense, complying with what Mr. Keith would have them comply with.

Captain BURKE. My own personal attitude, and this has been motivated by a very complete exposure to the last 17 classes at our school,

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