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Names McMullen as President of Tanker Page 737 Conference of the Sovereigns and Heads of State of the OPEC 723 Difficult Year for Japanese Shipbuilders-1975, article from 750 FMC Adopts Final Rules on Fighting Foreign Bias, article from 746 From U.S. News & World Report (June 23) 749 Greek Shipowners Association_... 736 IU International to cut shipping unit outlays by about $200 746 Iran, article from Middle East Review.. 737 Japanese Shipbuilders Face Major Problems, article from Ship- 750 Marcos, Peking and The 7th Fleet, article from Washington 739 Marcos Plans to Control U.S. Bases, article from Washington 740 National cargo preference laws. 717 O'Neill Says Turkey Is Blackmailing United States, article from 738 Periscope, article from Newsweek of May 5, 1975.......... 730 Saudi Arabia Forces Shift in U.S. Position, article by Jim 721 Saudi Arabia: Overture to the East, article from Middle East 741 Saudi Government Grants Preference to Saudi Oil Tanker 734 Sea Saga A Norwegian Ship Magnate, Hurt by Drop in Tanker 747 Shipping venture with Japanese 729 Spain Seeks U.S. Weapons, article from Washington Post of 737 Speech from the Secretary of State, June 23, 1975, Atlanta, Ga.... 742 735 U.S. Shipbuilders Need Contracts, article from Shipyard Weekly 751 Venezuela Maps Outlays for Oil Fleet, article from Journal of 735 Venezuela Tanker Fleet, article from Lloyd's List of July 11, 734 Venezuelan Tankers Now Carry Venezuelan Oil, article from New 735 Zumwalt Scores Emphasis on Nuclear Ships, article from Wash- 720 Ragan, William F: Merchant marine fleets of the world.. 873 Reynolds, James J.: Government support of the shipbuilding industrial base 788 Sea-Land: Ports 861 Sticht, J. Paul: Earnings from operations for transportation----. Communications submitted for the record 881 Blackwell, Robert J.: Letter of November 3, 1975, to Hon. Thomas 997 Hood, Edwin M.: Letter of October 9, 1975, to Hon. Thomas N. Downing with 950 Letter of January 20, 1976, to Mr. McCloskey. 946 McCloskey, Paul N., Jr.: Letter of November 6, 1975, to Edwin M. 945 NATIONAL SECURITY/ECONOMIC BENEFITS JUNE 5, 1975 U.S. HOUSE OF REPRESENTATIVES, COMMITTEE ON MERCHANT MARINE AND FISHERIES, SUBCOMMITTEE ON MERCHANT MARINE, Washington, D.C. The subcommittee met, pursuant to notice, at 10:05 a.m., in room 1334, Longworth Office Building, the Honorable Thomas N. Downing (chairman of the subcommitee), presiding. Mr. DOWNING. Good morning. The Subcommittee on Merchant Marine will come to order. This morning the subcommittee commences the most comprehensive oversight hearings to be held with respect to the U.S.-flag merchant marine since the enactment of the Merchant Marine Act of 1970. This is timely, as we are now about midpoint in the 10-year building program envisioned by that act. As set forth in some detail in the committee news release dated May 27, 1975, these hearings will concentrate on six basic areas of inquiry, and continue for a number of months. This morning, the subcommittee commences consideration of the national security rationale for a U.S.-flag merchant marine. I would now like to recognize our distinguished able chairman, Mrs. Sullivan. Mrs. SULLIVAN. Thank you, Mr. Downing. I would like to take just a few minutes to set forth my thoughts on these maritime policy oversight hearings we are embarking on today. The committee has not had any comprehensive oversight hearings concerning maritime policy since the extensive hearings leading up to the Merchant Marine Act of 1970. In light of this and since the 10-year maritime program which began with the Merchant Marine Act of 1970 is at midpoint. it was felt that this was an appropriate time to take a rather complete look at our maritime policies and program. As we all know, unfortunately, the world tanker market is in a highly depressed state and there is excess tonnage laid up in the tanker fleets of the world. Almost 40 U.S.-flag tankers are in layup at the present time. Of course, this is only one segment of the industry but there is at present also a downturn in liner cargoes, and the general world economic situation does not augur will for the future. These factors must have an impact on ship construction and the operations of our fleet. It is our intention at these hearings to inquire into the broad maritime policies affecting the U.S.-flag merchant fleet. For example, what (1) will the commercial and military requirements be in the future and what kind of vessels and merchant marine will be required to carry the U.S. domestic waterborne commerce and a substantial portion of the waterborne export and import foreign commerce of the United States? How are U.S. maritime commercial and military obligations related to the foreign policy of the United States? How will a changed foreign policy in Asia impact upon our commercial and military maritime obligations? What impact will a future crisis in the Mideast have on our military obligations and do we, and will we, have the capacity to meet future military sealift surge requirements? What will our commercial capability be in such a situation and who will have the responsibility for portioning out U.S.-flag vessels for military and commercial use in such a situation? Underlying broad conceptual questions such as these are the basic aspects of the Merchant Marine, such as subsidy and cargo preference, and our cabotage laws. It is matters such as these which must be examined if we are to understand where the Merchant Marine really is with respect to the foreign and economic policy of the United States and the commercial market and foreign competitions. Obviously, there are many matters coming within the jurisdiction of the Federal Maritime Commission which are intertwined with broad general maritime policy concepts. So these matters must be considered in this general overview. However, it is not our intention that this oversight hearing should encompass the operations of the Federal Maritime Commission. The FMC and its regulatory responsibilities are considered to be a separate matter and will be approached at a later date in a separate set of oversight hearings. In fact, the administration's work with respect to the regulatory agencies and study of other regulatory agencies by other appropriate congressional committees in the House make it imperative that this committee, sometime in the future, examine the Federal Maritime Commission and its regulatory duties and responsibilities. I would like to make clear at this time that it is not our intention that specific legislative matters now pending before the committee, or which may be brought up in this Congress, should be treated specifically in these oversight hearings. Nor is it our intention that important matters which are presently being handled in the appropriate regulatory agencies, or in the courts, such as the mini-bridge or double subsidy problems, should be resolved at these hearings. They are now properly before another appropriate forum. We are, however, convinced that this is an appropriate time to pause and see what we have accomplished to date and where we are going. We should not be afraid to air our difficulties-and even to expose our problems. Indeed, this is the best way to solve our problems and eliminate our difficulties. I would hope that we might all go forward in these hearings in a positive way and in the spirit of cooperation. After all, the U.S.-flag Merchant Marine is not going to disappear, and I cannot believe that any witness would come forward with that objective, so let us all proceed in an affirmative manner with the goal of acting to develop a more productive and viable U.S.-flag merchant fleet. I just wanted to make these few comments for the record, Mr. Chairman. Thank you, and you may proceed. Mr. DOWNING. Thank you, Madam Chairman. Are there any other members who desire to make an opening statement? Mr. MCCLOSKEY. I just want to thank the chairman of the full committee and the chairman of the subcommittee for scheduling these hearings. This will give us an opportunity to go into the maritime program in some depth. Mr. DOWNING. Thank you. Our first witness this morning is Dr. John J. Bennett, Acting Assistant Secretary of Defense for Installation and Logistics. Dr. Bennett, if you will identify your colleagues, you may proceed. STATEMENT OF DR. JOHN J. BENNETT, ACTING ASSISTANT SECRETARY OF DEFENSE FOR INSTALLATIONS AND LOGISTICS, ACCOMPANIED BY ROBERT CARL, SPECIAL ASSISTANT FOR TRANSPORTATION TO THE ASSISTANT SECRETARY OF THE NAVY FOR INSTALLATIONS AND LOGISTICS; REAR ADM. SAM H. MOORE, COMMANDER, MILITARY SEALIFT COMMAND; AND LAWRANCE A. WHEELER, DIRECTOR, OFFICE OF MARITIME AFFAIRS, NAVY SEA SYSTEMS COMMAND Dr. BENNETT, Thank you, Mr. Downing. My name is John Bennett, Acting Assistant Secretary of Defense for Installations and Logistics, and I am pleased to appear before this distinguished committee to answer any questions you may have regarding this hearing. I am accompanied by Mr. Robert Carl, special assistant for transportation to the Assistant Secretary of the Navy, Installations and Logistics, Rear Adm. Sam H. Moore, commander, Military Sealift Command, and Mr. Lawrance A. Wheeler, Director, Office of Maritime Affairs. Navy Sea Systems Command-all of whom can and will elaborate on matters within their special field. Since this hearing is concerned with merchant marine matters, it is necessary to state now that the Department of Defense supports and relies heavily on the U.S.-flag merchant marine. We have, over the years, received considerable cooperation from the maritime industry and the maritime unions. Likewise, our joint ventures with the Department of Commerce and its Maritime Administration have been many and fruitful, and we intend to continue and expand our cooperation and coordination in that area. With respect to this hearing, we have been provided specific questions and these have been answered in my statement furnished for the record. I should point out that some of the questions were, by their nature, not within the purview of DOD. On these, we have presented our views insofar as we were able, and then deferred to the proper agency for complete details. It appears that one of the major purposes of this hearing is to determine if the maritime programs are accomplishing their purpose— |