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m ñ Icread. Treetor of Transportation, from the Office of au lancower Leserve Affairs, and Logistics.

acre Iswemg iny muestions you may have, I would like to ICH HE 124 central maritime matters. First, the U.S. par: are s the cornerstone of our sealift capability. We We see the we wily support a viable merchant marine in 01 esce una var. ver 15 percent of the Defense Department's

O noves rvately owned U.S.-flag ships. In peacetime

Ir no s shipped in U.S. berth liner service along

Te rog ro iomestic commerce of the United States. In are I Best ertain contingency situations, we would be

s risiart in civilian shipping assets. Thus, the health I

S nerchant marine is vital to our national defense

rernant narine is, of course, more than operations in De Greri girer rades. Tankers, bulk carriers, and special US Es ir uso vital to our national security as is the

12 TIR sparis which construct and repair both naval and merece estes tu, certainly the operation, construction, and war menerchant marine is dependent upon trained Turve tan nanpower, which benefits both the merchant arre de Wavy.

ve rave viewed with misgiving the stagnant conditions of er mere her anù che declining shipyard order book. In the reer . we have seen some improvement. We underannes svare of our foreign trade now stands at about

ensi, puc de um pecition from foreign flag is very keen, and cuiva percurs are often competitively disadvantaged on anted tuled

ruik ser is old and very small, and moves but an Better nail prentge. I think around 2 or 3 percent of our

hetta tarvuga tere now appears to be a worldwide surplus wat ik Qurage that condition will not continue forever. In Seats, muutite dientes that actions be taken to revitalize Pris flats Xag shipping, as well.

sen die ware the worldwide surplus of tankers, although

et sagt sker fleet continues to be fully employed. tai ***! Biser et la not, however, expanding, and our ships

in water prender percent of our vital oil imports. This vilan video en Rett's wprovement whenever it can be accom

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ELISA that he primary purpose of your hearing today is to Vidiviset areal 1980 appropriations authority for the MariHitta budi kult of the Department of Commerce. Theretill en word for me to relate some of the interests we

Hint Will Hi ha the ship Herthant Ship Sales Act of 1946 established : The Red Noserve Fleet (NDRF) now administered by

th's ships built in World War II were placed in A4 1.16. under spurified conditions. You also know in the NDRF for shipping support in both the Voit en licis The NDRF still contains a number WHAT Wuld not be competitive in the commercial Rishi

Waspxnsive under contingency conditions.

In addition, there is a segment of the NDRF, called the Ready Reserve Fleet (RRF), which is largely the result of trade-ins to the NDRF of newer and more modern cargo ships. The RRF is a joint Navy-MA program initiated over 2 years ago. The RRF program was undertaken to select and upgrade the best and most useful ships from the NDRF into a 5 to 10 day readiness status for contingency use. This program continues and as newer ships are traded in to the NDRF, the usefulness of this fleet will improve. Therefore, the Navy supports MA in the operation, maintenance, and improvement of the NDRF and there are funds in the Navy's 1980 budget to increase the size of the RRF upwards to 20 ships.

In the area of ship construction, you are aware of Navy review and comment on plans for ships built with subsidy funds. As a result of these reviews, the Navy recommends certain national defense features (NDF) which make these ships potentially more useful for defense purposes. We are supporting MARAD concerning broadening the scope of NDF to improve further the utility of the merchant fleet.

We have recently completed a joint study by MA and the Navy Military Sealift Command concerning the civilian seafaring manpower requirements in peace and war in the 1978-84 period. Actions to improve our seafaring manpower posture have been initiated.

Since your time is limited, let me sum up the Navy's general feelings with respect to the U.S. merchant marine and related industry. Given the current situation, we believe that the merchant marine should be provided parity of treatment in competing with foreign-flag shipping, appropriate promotional assistance, and the necessary subsidies to balance costs of operation and construction as required.

That concludes my presentation. However, I think we should note that, while the past few years have been extremely trying ones for the U.S. merchant marine, MA has succeeded in holding things together and, pursuant to the Merchant Marine Act of 1970, has authorized the award of shipbuilding contracts resulting in the largest surge of merchant ship construction since World War II.

Mr. Chairman, that concludes my prepared statement.
The CHAIRMAN. Thank you, Mr. Secretary.

Mr. Secretary, last year the Congress passed a piece of legislation to require the Secretary of the Navy, and the Secretary of Commerce to meet on a quarterly basis. Of course, the purpose of it was to discuss the needs of the Navy vis-a-vis the American merchant marine President Carter vetoed that legislation.

What was the Navy's recommendation on that occasion?

Mr. WOOLSEY. I believe that Mr. Pyatt for the Navy testified to this committee that we did not feel the legislation was necessary, and felt that the purpose could be accomplished by administrative means to insure that the Secretary of the Navy and the Secretary of Commerce meet on a regular basis and fulfill the purposes of the legislation.

I might add, Mr. Chairman, that that has begun to happen. Secretary Claytor and Secretary Kreps met, I think, about a month

I ago, and another meeting is planned in a few months, and they

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*** - CTS ar. re Maritime Administration, Navy Department

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2. taimeS. Len the Navy came up her last year, Secretary 75+ was -273 se bad with him the important planning people

zrc very clearly emphasized the difficulty in the czase 1 serica to support a merchant ship construc2736 3 aa Navy ship construction program. We

2 Tees si expansion and the cost problems of exFIC Zee at that time were not very satisfactory. It 2 30 = *s stie coordination between the Maritime SEZ: se Jepartment of Navy.

Sa zicg, when the Congress takes the initia

re de coordination between the two ocean e eczc one economic, and both interrelated; we 3. se 4u.co to the fact that once a quarter, two

3:10. See I such a vital security and economic area

2 Isaian, all I can say is that I think we ** Tessazz. Ed I do not think the proposed legisla

neceseve that its intended effect is being

=> socceration between the Navy and the Commees Vis improving. Secretary Claytor has STL *cerss n zat.

er eens iscussion last month, with Secretary
23 te seipbuilding industry, and Navy-Mari-

coderico in that area.
u sked about the Ready Reserve Fleet. How

e Ready Reserve Fleet at the present eleve, for fiscal 1978, Mr. Chairman. I uward around 14 in 1979, and toward

n I say approximately is that I think mit guted in terms of tonnage rather than mes I can vary by one or two. ** Ev Terchant ships would be necessary to

evenent to the Persian Gulf in 30 days? to supply it for the record, but consid

up

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2015 mure than that.

arc comitted by the Navy each year, - She Does the Ready Reserve Fleet or the

ent support for four division movedes at ur the Mediterranean or the Far

at for the record, we have it.

Tiv understanding that both Navy veces Is there any coordination of

& D. activities? yes Wi Chairman. We have worked

... Srition, at the working level, on Berhant ship naval auxiliary pro21 x3mple, to make containerships

ieve we have cooperated with

MARITIME AUTHORIZATION AND OVERSIGHT

1980

THURSDAY, MARCH 1, 1979

HOUSE OF REPRESENTATIVES,
COMMITTEE ON MERCHANT MARINE AND FISHERIES,
SUBCOMMITTEE ON MERCHANT MARINE,

Washington, D.C. The subcommittee met, pursuant to notice, at 10:08 a.m., in room 1334, Longworth House Office Building, Hon. John M. Murphy, chairman, presiding.

Present: Representatives Murphy, Mikulski, Donnelly, McCloskey, Snyder, and Evans.

Staff present: Carl L. Perian, chief of staff; Ernest J. Corrado, chief counsel; Larry O'Brien, deputy chief counsel; Len Sutter, counsel; Jack E. Sands, chief minority counsel; Ronald K. Losch, minority counsel; and Elizabeth Coker, subcommittee clerk.

The CHAIRMAN. The subcommittee will come to order.

This morning the Subcommittee on Merchant Marine commences hearings on MarAd oversight and the fiscal year 1980 authorization to authorize appropriations for certain maritime programs for the coming fiscal year.

We begin work on this important legislation at a critical time for America's maritime interests. President Carter stated the issue well in his state of the Union message on January 25, 1979, when he observed that changes in our national maritime policy are overdue, and emphasized, and I quote: “* * * we must improve the ability of our merchant marine to win a fair share of our cargo

* *” Improvement of our merchant marine is the principal concern of this subcommittee, and the full committee as well, and I welcome the opportunity to focus on that objective in these proceedings.

As a casual reading of the daily press makes all too obvious, these are perilous times. Instability in the Middle East, outright war in Southeast Asia, renewed debate on the limitation of strategic weaponry, diminishing supplies of fuel, and other precious resources, and the place and role of Third World nations in Latin America and Africa raise profound questions.

In some cases, these events cast lengthening shadows, touching the international economic order and influencing our decisionmaking.

At the heart of these issues lies the central question of the American mission and role after the tumultuous events of the past decade and recent months. Are we, as some suggest, waning as an international power?

I think not: Not, that is, if we maintain our economic vitality, a vitality dependent upon our lifelines of international commerce,

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and determined by our capacity to do what must be done. In that respect, it is clear that we must retain and enhance our ability to transit international waters as worldwide traders in first-rate vessels in a competitive posture.

During the last 2 years as the chairman of this committee, I have often stated my goals for the American merchant marine. I can restate them today in one sentence: To see America once again ascend to uncontested maritime preeminence in the world, ready and able to lead the way. To that end, I pledge the best efforts of this committee.

[The bill and departmental report follow:]

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