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Such industry specialization would promote efficiency and
economy and would reduce Federal subsidies. At the same
time, however, specialization would reduce the number of
shipyards and degrade the ability of these yards to produce
other than specialized ships (i.e., LNG carriers), thus pro-
ducing an unacceptable decline in the U.S. shipbuilding
mobilization base. The Maritime Administration position on
the GAO proposal is, therefore, that implementation of such a
proposal would be detrimental to national security and is
unacceptable.

I hope the information above will be of assistance to you.

Sincerely,

ROBERT J. BLACKWELL
Assistant Secretary

for Maritime Affairs

[Whereupon, at 3:02 p.m. the subcommittee adjourned, to reconvene Wednesday, March 7, 1979, at 1:30 p.m.]

MARITIME AUTHORIZATION AND OVERSIGHT

1980

WEDNESDAY, MARCH 7, 1979

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON MERCHANT MARINE OF THE
COMMITTEE ON MERCHANT MARINE AND FISHERIES,

Washington, D.C.

The subcommittee met, pursuant to recess, at 1:35 p.m., in room 1334, Longworth House Office Building, Hon. John M. Murphy (chairman of the subcommittee) presiding.

Present: Representatives Murphy, Anderson of California, Mikulski, Donnelly, Snyder, McCloskey, and Davis.

Staff Present: Ernest Corrado, Chief Counsel; Peter Kyros, Counsel; and, Ronald Losch, Deputy Minority Counsel.

The CHAIRMAN. The subcommittee will come to order.

Today we commence the second of 3 days of hearings with respect to H.R. 2462, a bill to authorize maritime appropriations for fiscal year 1980.

As I said in my introductory statement last week, President Carter indicated in his state of the Union statement that a change in our maritime policy is long overdue. The administration's Interagency Task Force testifies to the President's apparent willingness to act on that belief.

Regardless of the content of the President's ultimate proposal, its enactment must await a later day. In the interim, we must deal with the realities of the 1936 act, as amended. Pursuant to that statute, we meet today.

No segment of the maritime industry is more important than its labor component, and today's witnesses represent that very broad and distinguished group.

Our first witness will be Mr. Charles Mollard, vice president of the Seafarers International Union of North America. Mr. Mollard, if you would please come forward.

STATEMENT OF CHARLES MOLLARD, VICE PRESIDENT, SEAFARERS INTERNATIONAL UNION OF NORTH AMERICA, AFL-CIO Mr. MOLLARD. Mr. Chairman and members of the subcommittee, my name is Charles Mollard. I am a vice president of the Seafarers International Union of North America, AFL-CIO. The Seafarers International Union represents merchant seamen and boatmen who work aboard all types of vessels in our Nation's foreign and domestic shipping trades, as well as workers in allied maritime industries.

46-188 079 9

We appreciate this opportunity to comment on H.R. 2462, legislation authorizing fiscal year 1980 appropriations for maritime programs administered by the Department of Commerce. This legislation contains a budget request totalling $101 million for the construction differential subsidy program, $256 million for the operating differential subsidy program, $16 million for maritime research and development activities, and $25.8 million for maritime education and training expenses.

We believe the funds contained in this legislation are minimal. They are, however, necessary to continue the programs set out in the 1970 act. These programs have continually played an important role in our efforts to develop a U.S. merchant marine which fulfills the intent of Congress as set out in the Merchant Marine Acts of 1936 and 1970.

As you know, Congress declared it to be the policy of the United States to have a merchant marine sufficient to carry its domestic waterborne commerce and a substantial portion of its foreign export and import trade, as well as capable of serving as a naval and military auxiliary in time of war or national emergency.

It is particularly significant that the funds requested envision the construction of three dry-bulk ships. In fact, one of the principal purposes of the 1970 act was to create a bulk carrier fleet, and no issue received more attention during the consideration of this legislation.

This committee and the Congress as a whole recognized that the United States was rapidly becoming a nation dependent on oceanborne imports of raw materials. As a result, the 1970 Merchant Marine Act extended for the first time construction and operating subsidies to bulk cargo vessels with the intention of building a strong and modern bulk fleet.

The need for a bulk fleet under the American flag is greater today than at any other time in our history. Our Nation is reliant on imports by ship of 72 vital raw materials and, according to the Department of the Interior, dependent upon imports for at least 50 percent of our demand of 13 basic strategic raw materials, including aluminum, chromium, manganese, nickel, tin, and zinc.

While our demand for foreign raw materials has been growing, only two bulk-ore bulk-oil vessels have, to date, been constructed under the 1970 act. The U.S.-flag dry-bulk fleet consists of only 19 ships, most of which are old and virtually none of which are engaged in the carriage of strategic raw materials in our foreign trade.

Consequently, we are particularly pleased that the United States may begin to develop a new generation of bulk vessels through the funds requested for fiscal year 1980 ship construction.

In conclusion, Mr. Chairman, we believe the programs contained in the Merchant Marine Act of 1970 should be funded by the moneys contained in H.R. 2462. We further believe that the U.S. Government, through the expertise provided by this committee, should pursue legislative initiatives that form the basis of a new, comprehensive national maritime policy which results in a strong and revitalized merchant marine.

Recent international events, particularly in Iran and Southeast Asia, have pointed out an increasingly potential threat to the

stability of the free world. The United States, as the world's greatest democracy, is affected by these international political and economic conditions, and must be able to have under its control a merchant marine for strategic, economic, political, and ideological support. The U.S.-flag merchant marine is, in fact, our Nation's fourth arm of defense and must be in a state of readiness at all times.

We appreciate this opportunity to express our views on H.R. 2462, legislation which provides an important and necessary step in the national effort to build our merchant marine.

Thank you.

The CHAIRMAN. Thank you, Mr. Mollard.

The committee certainly understands the long time and strong support of not just the Seafarers International Union, but the National Maritime Union and all of the other maritime trade unions that have been in the forefront of maintaining an American-flag merchant marine, and also participating in what this committee has taken on as a legislative initiative in revitalizing the American-flag fleet to do precisely what you said the 1916, 1920, 1936, and 1970 acts attempted to do, and that is to have a merchant marine capable of carrying our domestic commerce, as well as a substantial portion of our foreign commerce.

What is the total membership of your union?

Mr. MOLLARD. Approximately 80,000, Mr. Chairman.

The CHAIRMAN. What is your retired seagoing membership? Mr. MOLLARD. I really don't have any figures readily available on the numbers of retirees but certainly we could provide that for the record.

The CHAIRMAN. If you would, do that, and also, indicate in those figures how many of those would be capable of being recalled if there happened to be an emergency to perform sea duties.

Mr. MOLLARD. If I could, Mr. Chairman, I would like to comment on that. I have heard over the past several years various statements as to the reliance in the case of a national emergency of asking retired seafarers to come back.

At least in the case of the Seafarers Union, that might not be a reality or very practical. Most of our members retire at an age of 65 years or older and, I think, at that point of their lives they have dedicated themselves to a career at sea and they are really ready to retire and take that deserved rest.

I really think that the best way in the long term, and the short term for that matter, to have a proper merchant marine for national emergencies lies in having a strong merchant marine to begin with, as I am sure this view is shared by this committee.

And I think that in the long term we need to have more ships available for the peacetime needs of the merchant marine in order to be able to respond to the needs in the case of a national emergency. And I, at least personally, don't believe that we can rely, for the national defense of this country, on the retired sailors of the merchant marine.

Certainly, I am sure, many of them will rise to the occasion, as they have in other emergencies. But, as the size of the fleet dwindles then the number of people available is certainly less.

The CHAIRMAN. I happen to agree with you in that statement.

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have no questions, Mr. Chairman.

SAMAN. Dir. McCloskey?

SKEY. Thank you, Mr. Chairman.

avor of subsidizing the construction of three dry What will it cost to build those ships in U.S. shipyards unding them in foreign shipyards?

LLARD. Mr. McCloskey, I really don't know the actual cost s you know, the Seafarers Union represents people :I he snips. I am sure that those facts are readily u ve could provide them for the record. I am not win what those figures might be.

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HotLOSKEY. Do you have any opinion, on behalf of the Ca. Viether or not it might not enhance our ability to operate s and provide more jobs for union members if we permitted our cades buy foreign-built ships and put them under U.S. flag? 101.asp. I really don't have an opinion with regard to that.

we sit down at the collective bargaining table with erators they have ships or are building ships and we are nail them. We have manned both those that are conscruciou here n the United States and those that have been conoreign yards to American standards. That is obviously son, hat we would continue to man any ships that are Sau & avaidote to meet the economic needs and defense needs of

MOCCSKS. From the standpoint of your union, wherever ne soigs nay cvme from is not material if we can have a greater Cheries-dag ships and a greater number of jobs on M NOW I don't know that the word is "not material". As esgoing abor force is concerned of the SIU, they would thai w talever vessels are under the American flag and Ledesit merchant marine. M MOCs You see our problem is that if it is a handicap ey of American shipping companies to compete because additional capital into U.S.-built vessels and benevese olenges and delays because it takes 4 years to op na US yard as compared to 2 years in a foreign Now we de aced with a dilemma as to whether or not we vuotine deg U.S. shipyards as opposed to trying to De Laeveld merchant marine.

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