The question then might be "How do we change these numbers?" American companies are currently building 40 to 50 ships of all types in the foreign yards of 11 different countries. The ships will be registered in a half dozen lesser developed countries and in a few developed but none in the U.S. It is the strong maritime policies of the above referenced countries that many times dictate the country of construction registry rather than price. Would the U.S. dare have such an aggressive policy?

As has already been indicated to this committee by Mr. Eugene Spector of N.M.U., many countries spend more per capita on their maritime than does U.S. ["The United States repeatedly gives its maritime industry about $2.47 a year per capita in total assistance and aid through operating-differential subsidy, construction-differential subsidy, and financing assistance. Norway, on the other hand, gives assistance to its maritime industry equal to $78.86 per capita; Sweden spends about $15.90; and Great Britain gives $5.81 per capita in total assistance and aid.”] The United States expends the following amounts for various programs as reported in the 1980 Budget documents:

development, the committee was agency Task Force would not act ng year and we now know that at ramentary. meet our industry would hope that Souse and Senate, and bipartisanehensive package of redevelopment

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to see that proper provisions are made in the new ocean mining industry in

ensure that minerals in the Americas and with the assistance of our own merchant

6. The new bulker C.D.S. program suggested by MarAd should be tailored such that cargoes will be available for any ships that are built.

7. The O.D.S./C.D.S. program should be comprehensively reviewed regularly and changes effected that will improve the size of our merchant marine.

8. The committee should review carefully the suggestions of MarAd for a 15,000 ton multi-purpose National Defense Notional Ship in conjunction to possibly containerize our "over the beach" capability.

9. The committee suggestion to promote a Navy/MarAd policy board should be pushed. The Navy continues to ignore merchant sealift as a partial Navy responsibility. The merchant marine should be closely integrated in a cost effective fashion with Navy support and logistic.

10. The committee should carefully review the L.N.G. and L.P.G. programs being developed on two dozen routes around the world. We should recognize that we have the finest L.N.G. shipbuilding capability anywhere, understand that our cheap gas supply will run out in 50 years or less and take action to blend reasonable acquisitions of L.N.G. fuel from other countries with our continental United States supply. 11. Finally, the committee should explore methods of acquiring a reasonably size liquid bulk fleet other than the Jones Act considering the tax and other G.N.P. aspects of this trade before referenced.

The industry and labor stand ready to assist the committee in writing the laws and helping the whole committee in any other way to accomplish these objectives. Mr. DONNELLY. This hearing will be recessed for 20 minutes. [A brief recess was taken.]

Mr. DONNELLY. Our next witness will be Alfred Maskin, executive director, American Maritime Association. I wish to apologize for all the delays.

STATEMENT OF ALFRED MASKIN, EXECUTIVE DIRECTOR, AMERICAN MARITIME ASSOCIATION, ACCOMPANIED BY JOSEPH A. KLAUSNER, COUNSEL FOR AMERICAN MARITIME ASSOCIATION

Mr. MASKIN. Mr. Chairman, with your permission, I would like to be accompanied by Joseph A. Klausner, the Washington counsel for our association.

My statement is very brief so, with your permission, I will read it in its entirety.

Mr. Chairman and members of the subcommittee: I am Alfred Maskin, the executive director of the American Maritime Association, and I appreciate the opportunity to appear here today to present the views of our association on the maritime authorization bill for fiscal year 1980.

At the outset, I might note that AMA, as shown by the appended membership list, consists of 37 companies operating 114 Americanflag merchant ships, of which 74 are liners in regularly scheduled services and 40 are tankers and dry bulk carriers.

With the exception of 24 liners operated by Delta Steamship Lines, our vessels-liners, tankers, and bulk carriers-were built without construction-differential subsidies and operate without operating-differential subsidies except for the carriage of Russian grain, a movement which, incidentally, was virtually nonexistent for our members during the past year.

Moreover, we expect none of our companies to be the recipient of the construction subsidy funds called for in the present authorization bill; nor, again with the exception of Delta, which holds a 20year operating subsidy contract, and those companies which occasionally may carry Russian grain, will any of our members benefit from the operating subsidies which the bill authorizes.

Although the interest of our members in the award of subsidy money thus is extremely limited, this limited involvement, I believe, makes it possible for me to view the bill in a more detached and dispassionate manner than can those who would be more directly affected.

In this sense, what interests me principally about the bill is not what it would provide, but what it will not provide.

Significant, from the standpoint of our association, one of the major spokesmen for the independent U.S.-flag tanker fleet, is the fact that the bill provides no funds for new subsidized tanker construction.

This omission underscores the point that we have made to this subcommittee on previous occasions, that unless the market will stimulate shipbuilding and sustain viable ship operations, no amount of subsidy-construction or operating or both-will induce operators to come forward and seek it. And this, of course, is particularly true in the bulk trades where there are no conferences to foster rate stability, as in the liner trades.

The 1970 amendments to the Merchant Marine Act of 1936, as we all know, extended construction and operating subsidies to dry and liquid bulk carriers and were intended to bring about a resurgence in the building of such vessels.

But the subsidized tanker building program, as we see from the lack of funds in the current bill, has come to a halt; indeed, no viable new contracts for subsidized tanker construction have been awarded since June of 1974.

Moreover, although the 1970 amendments made construction and operating subsidies available for dry bulk carriers as well as tankers, not a single dry bulk carrier thus far has been built under the program. And although the Maritime Administration last year approved the subsidized construction of eight dry bulk ships, of which at least two may yet be canceled, the agency apparently still feels the dry bulk building program under the 1970 amendments to be so unsuccessful as to require a restructuring of the program in a manner which essentially would provide greater inducements for operators to apply for subsidy.

Finally, our subsidized liner fleet, which has been eligible for construction and operating subsidies since 1936, and which often has been cited to illustrate the success of the subsidy program, has been experiencing increasing difficulties in coping with the complexities of today's shipping world; and to our dismay we recently have seen the financial collapse of two more major subsidized liner companies.

Despite what I consider to be the obvious shortcomings of the subsidy program, I am not here today to oppose the authorization bill or to advocate that the subsidy program be abandoned, at least until such time as we have something better with which to replace it.

What I do wish to do is to reiterate to the subcommittee our view that the subsidy program, certainly never a panacea for the American-flag fleet, shows signs in today's complex and competitive world of ocean shipping of becoming increasingly ineffective as a competitive tool.