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14th Biennial Convention, Seafarers International Union, AFL-CIO, Washington, DC, July 29, 1969
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The original documents are located in Box D27, folder "14th Biennial Convention,
Seafarers International Union, AFL-CIO, Washington, DC, July 29, 1969" of the Ford
Congressional Papers: Press Secretary and Speech File at the Gerald R. Ford Presidential
Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. The Council donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
2/29/69
14TH BIENNIAL CONVENTION OF SEAFARERS
INTERNATIONAL UNION, AFL-CIO, 11 A.M.
TUESDAY, STATLER-HILTON HOTEL, WASH., D.C.
Parl Hall Phil Carlip
FOR YEARS YOU HAVE BEEN HEARING
ABOUT THE DETERIORATION OF THE AMERICAN
MERCHANT MARINE AND THE SWIFT RISE OF THE
SOVIET UNION AS A MARITIME POWER.
THIS, OF COURSE, IS ALL TOO
TRUE -- TRAGICALLY TRUE. BUT IT WOULD SERVE
NO PURPOSE FOR ME THIS MORNING TO SPEND MUCH
TIME RECITING ONCE MORE THE SORRY STATE OF
AMERICAN SHIP CONSTRUCTION AND THE STEADY
GROWTH OF THE MODERN SOVIET MERCHANT FLEET,
WHICH NOW CONFRONTS US ON EVERY SEA LANE OF
THE WORLD.
YOU KNOW THAT 80 PER CENT OF THE
RUSSIAN FLEET IS NOW LESS THAN 10 YEARS OLD
AND INCORPORATES THE LATEST TECHNOLOGICAL
DEVELOPMENTS IN WORLD SHIPBUILDING.
FORD LIBRAST
YOU KNOW TOO THAT THE AVERAGE
-2-
-active andreserve-
AGE OF THE UNITED STATES MERCHANT FLEET/IS
27 YEARS.
WHAT WE SHOULD CONCENTRATE ON
THIS MORNING is... WHAT ARE WE GOING TO DO
TO REMEDY THIS APPALLING SITUATION? THE
TIME FOR RHETORIC AND FOR HAND-WRINGING IS
LONG PAST. THIS IS A TIME FOR ACTION, AND
ACTION WE MUST HAVE.
WE MUST LOOK AT OUR MERCHANT
MARINE REQUIREMENTS IN TERMS OF MEETING OUR
MINIMUM DEFENSE AND CIVILIAN EMERGENCY NEEDS,
GIVEN A LIMITED WAR CONTINGENCY.
FROM THAT POINT OF VIEW, WE MUST
BUILD A FLEET CAPABLE OF LIFTING 28 MILLION
TONS OF GENERAL CARGO AND 101 MILLION TONS
OF DRY BULK CARGO IF WE ARE GOING TO SATISFY
THOSE NEEDS BY 1977.
AT THE CURRENT RATE OF CON-
STRUCTION -- ABOUT 12 SHIPS PER YEAR OF
THE C-7 CONTAINER OR LASH TYPE SHIPS -- OUR
-3-
SHIPPING CAPABILITY BY 1977 WILL SATISFY
ONLY 64 PER CENT OF OUR ESSENTIAL GENERAL
CARGO REQUIREMENTS. DRY BULK CAPABILITY
WILL BE NON-EXISTENT.
I BELIEVE A MINIMUM OF 16 TO 21
LASH OR SEABARGE TYPE VESSELS MUST BE
COMPLETED ANNUALLY BETWEEN 1970 AND 1977.
DRY BULK REQUIREMENTS ARE AT THE LEVEL OF
23 TO 24 50,000-TON CARRIERS ANNUALLY,
EQUALLING 39 TO 45 SHIPS PER YEAR.
THERE IS LITTLE DOUBT THAT THE
URGENT NEED FOR ACTION IS WELL UNDERSTOOD
IN THE CONGRESS.
AS YOU HAVE SEEN, THE HOUSE HAS
PASSED A MARITIME AUTHORIZATION BILL WHICH
ALLOWED FOR AN APPROPRIATION OF $145 MILLION
OVER AND ABOVE A PREVIOUS CARRYOVER OF
$101 MILLION. THIS IS ENOUGH TO BUILD AT
LEAST 20 NEW SHIPS -- NEARLY TWICE AS MANY
AS WE HAVE BEEN CONSTRUCTING.
-4-
THIS IS A SUBSTANTIAL START
TOWARD A BOLD NEW PROGRAM OF SHIP CONSTRUCTION.
IT IS PROBABLY AS MUCH AS THE FEDERAL
MARITIME ADMINISTRATION COULD REASONABLY
SPEND IN FISCAL YEAR 1970.
TO PUT IT
ANOTHER WAY, IT'S DOUBTFUL THEY COULD
PROFITABLY USE MORE THAN THE $246 MILLION
AUTHORIZED.
THE ROONEY APPROPRIATIONS
SUBCOMMITTEE EXCEEDED THE AUTHORIZATION.
THE REQUEST THAT CAME TO THE HOUSE FLOOR
plus
The
A POINT OFCY the OF frogen
approximated
but
LAST WEEK WAS FOR $200 MILLION
administration,
ORDER WAS RAISED AGAINST IT. THE MARITIME
AUTHORIZATION BILL HAD NOT YET CLEARED THE
SENATE.
THERE IS NO REASON FOR CONCERN
ABOUT THE MARITIME APPROPRIATION. THE
MATTER WILL BE STRAIGHTENED OUT SHORTLY,
[[
AM SURE
AND I FIRMLY BELIEVE THAT THE
FORD
LIBRARY
CONGRESS WILL APPROPRIATE THAT AMOUNT WHICH
-5-
CAN REASONABLY BE SPENT TO STRENGTHEN THE
AMERICAN MERCHANT MARINE IN FISCAL YEAR
1970. TO APPROPRIATE MORE THAN THAT AMOUNT
WOULD BE MEANINGLESS. To spend less would be defaulting
on our committment to nevitalize The american mershant marche
YOU WILL SEE, I FEEL CERTAIN,
A SIGNIFICANT IMPROVEMENT IN SHIP
CONSTRUCTION THIS FISCAL YEAR OVER PAST
PERFORMANCE.
THE MARITIME AUTHORIZATION BILL,
AS INTRODUCED, CALLED FOR ONLY $15 MILLION
IN NEW SHIPBUILDING FUNDS IN ADDITION TO
THE $101 MILLION CARRYOVER. THAT REPRESENTED
THE VIEWPOINT OF THE LAST ADMINISTRATION
AND WAS CONSISTENT WITH THE LOW PRIORITY
IT ASSIGNED TO OUR MERCHANT MARINE.
THE BILL REPORTED BY THE HOUSE
MERCHANT MARINE COMMITTEE AND APPROVED BY
THE HOUSE REFLECTED THE HIGH PRIORITY THAT
CONGRESS ATTACHES TO THE AMERICAN MERCHANT
MARINE.
-6-
THE CONGRESS HAS NEVER WAVERED
IN ITS SUPPORT FOR THE EFFORT NEEDED TO
REPLACE OUR ANTIQUATED SHIPS. BUT WE HAVE
REPEATEDLY RUN INTO TROUBLE AT THE BUDGET
Tapes
BUREAU. CONSEQUENTLY, IT WOULD HAVE BEEN
AN EXERCISE INFUTILITY FOR THE APPROPRIATIONS
COMMITTEES OF THE HOUSE AND SENATE TO FUND
THE MARITIME PROGRAM AT THE LEVEL AUTHORIZED
CURRENTLY THE FEDERAL MARITIME
ADMINISTRATION AND A WHITE HOUSE TASK FORCE
ARE WORKING ON A NEW MARITIME PROGRAM. MY
FRIENDS IN THE MARITIME ADMINISTRATION TELL
ME THE PROGRAM WILL BE COMPLETED IN THE
NEXT TWO WEEKS OR SO. THEN THE RECOMMENDATIONS
HAVE TO CLEAR THE BUDGET BUREAU IN TERMS OF
DOLLAR OUTLAY -- AND THAT IS THE CRITICAL
FACTOR. 2 will work on Them as L have on others
I UNDERSTAND THAT THE MARITIME
ADMINISTRATION IS PUTTING TOGETHER A GOOD
PROGRAM. I CAN ASSURE YOU OF THIS -- THE
-7-
MARITIME ADMINISTRATION HAS NO INTENTION
OF PROPOSING THAT AMERICAN MERCHANT SHIPS
BE BUILT IN FOREIGN YARDS.
AS THE PROGRAM IS SHAPING, I
BELIEVE WE WILL SEE A DRASTIC SIMPLIFICATION
IN PRESENT PROCESSES OF ADMINISTERING THE
OPERATING AND CONSTRUCTION DIFFERENTIAL
SUBSIDIES.
OUR SUBSIDIZED CARRIERS SHOULD
BE RELIEVED OF THE TREMENDOUS ADMINISTRATIVE
BURDENS IMPOSED ON THEM BY THE MERCHANT
MARINE ACT OF 1936 AND THE PRESENT
REQUIREMENTS OF THE MARITIME ADMINISTRATION.
THIS WOULD NOT ONLY REDUCE
ADMINISTRATIVE EXPENSES BUT ALSO ALLOW THE
LINES ADDITIONAL FLEXIBILITY IN TERMS OF
PROVIDING SERVICE.
I THINK IT ALSO WOULD BE A GIANT
STEP FORWARD IF THE GOVERNMENT CONSIDERED
BUILDING SHIPS IN SERIES OF 10 OR 15,
GERALD FORD LIBRARY
-8-
INSTEAD OF BUILDING SHIPS ONE AT A TIME.
YOU MAY SEE THIS IN THE NEW MARITIME PROGRAM
THIS WOULD REDUCE THE COST TO
THE GOVERNMENT AND THE OPERATORS BY ROUGHLY
$1 MILLION PER SHIP.
AND THE MAIN FEATURE IS THAT
ONCE U.S. SHIPYARDS KNOW THEY WILL HAVE
AN ASSURED VOLUME OF FUTURE BUSINESS THEY
WILL ACT TO MODERNIZE THEIR YARDS AND THUS
FURTHER REDUCE COSTS.
I ALSO BELIEVE THE BENEFITS OF
THE MERCHANT MARINE ACT IN TERMS OF SUBSIDY
AND CERTAIN TAX ADVANTAGES SHOULD BE MADE
AVAILABLE TO THE NON-SUBSIDIZED LINES,
THE BULK CARRIERS AND POSSIBLY EVEN THE
TANKER COMPANIES. THIS ALSO MAY BE A
RECOMMENDATION IN THE NEW MARITIME PROGRAM.
AT THE PRESENT TIME, AS YOU KNOW,
THE BASIC BENEFICIARIES OF THE FEDERAL
MARITIME PROGRAM ARE THE SUBSIDIZED
STATED R.FORD NORMAY
-9-
CARRIERS. THEY GET AN OPERATING SUBSIDY
AND A SHIPBUILDING SUBSIDY. EVERYONE ELSE
IS ON THE OUTSIDE LOOKING IN.
IT'S CONCEIVABLE TODAY THAT WE
CAN PUT SOME OF OUR SHIPS ON A PARITY WITH
FOREIGN VESSELS IF THE GOVERNMENT WOULD
SIMPLY BUILD THE SHIPS AND THEN TURN THEM
OVER TO THE LINES TO OPERATE ON THEIR OWN.
THIS, AGAIN, IS A CONCEPT WHICH MAY WIND
UP IN THE NEW MARITIME PROGRAM.
WHAT WOULD THIS KIND OF SHIP-
BUILDING AND OPERATING PROGRAM ACCOMPLISH?
IT WOULD GREATLY EXPAND OUR SHIPBUILDING
ACTIVITY, AND IT WOULD LEAD TO A FAR
GREATER USE OF U.S. FLAG SHIPS.
THE TREASURY HAS TRADITIONALLY
OPPOSED THIS KIND OF PROGRAM, BUT I FIND
But, THERE IS STRONG SUPPORT FOR IT IN THE
CONGRESS.
TEN YEARS AGO WE EMBARKED ON
-10-
AN AMBITIOUS SHIP REPLACEMENT PROGRAM. IF
WE HAD FOLLOWED THROUGH ON IT AS PLANNED
WE WOULD HAVE REPLACED OUR ENTIRE
SUBSIDIZED LINER FLEET OF SOME 300 SHIPS
BY NOW.
CURRENTLY WE ARE AT THE POINT
WHERE THE SHIP REPLACEMENT PROGRAM HAS
ACHIEVED ONLY 50 PER CENT OF ITS GOAL.
AMERICAN SHIPS ARE NOW
TRANSPORTING ONLY SLIGHTLY MORE THAN
20 PER CENT OF OUR LINER CARGO AND ONLY
ABOUT 5.6 PER CENT OF OUR OVERALL TOTAL
FOREIGN TRADE.
WE ARE THUS DEPENDENT ON
FOREIGN-FLAG SHIPS TO TRANSPORT 95 PER CENT
OF OUR EXPORTS AND IMPORTS.
WE MUST REMEDY THIS SITUATION.
TO SEE THE CRITICAL NATURE OF THE PROBLEM
WE NEED ONLY LOOK AT VIETNAM.
GERALD R. LIBRARY R.FORD
TO SUSTAIN THE MOVEMENT OF MEN
-11-
AND SUPPLIES TO VIETNAM, WE HAVE BEEN
COMPELLED TO DIVERT SHIPS FROM THEIR NORMAL
TRADE ROUTES. THIS, IN TURN, HAS MADE IT
INCREASINGLY DIFFICULT FOR AMERICAN-FLAG
LINER COMPANIES TO REMAIN COMPETITIVE WITH
FOREIGN-FLAG CARRIERS.
SIGNIFICANT BENEFITS CAN BE
EXPECTED TO FLOW FROM A REVITALIZED SHIP
REPLACEMENT PROGRAM.
THE NEW CONTAINERSHIPS, SEABARGE
SHIPS, AND LASH OR LIGHTER-ABOARD-SHIPS
REPRESENT TREMENDOUS ADVANCES IN THE CONCEPT
OF TRANSPORTING GENERAL CARGO.
SIX OF THESE SHIPS HAVE THE
EQUIVALENT PRODUCTIVITY OF 15 TRADITIONAL
BREAK-BULK VESSELS.
THE INCREASED PRODUCTIVITY OF
THESE SHIPS, TOGETHER WITH THE HIGH DEGREE
OF AUTOMATION, WILL MEAN THAT THE OPERATING-
DIFFERENTIAL SUBSIDY COST TO THE GOVERNMENT
-12-
WILL BE SUBSTANTIALLY REDUCED.
THE 15 BREAK-BULK VESSELS WHICH
EVERY SIX NEW CONTAINERSHIPS WILL REPLACE
NOW RECEIVE AN ANNUAL OPERATING-
DIFFERENTIAL SUBSIDY PAYMENT OF APPROXIMATELY
$10 MILLION. THIS WOULD BE REDUCED TO
$3.2 MILLION FOR THE SIX CONTAINERSHIPS.
AT THE SAME TIME, THE NEW CONTAINERSHIPS
WILL CARRY ABOUT 60 PER CENT MORE CARGO.
THIS IS JUST ONE EXAMPLE OF THE
PROGRESS WE ARE MAKING IN OUR VESSEL
REPLACEMENT PROGRAM.
AS I SAID EARLIER, THE MARITIME
FUNDING NOW BEING COMPLETED BY THE CONGRESS
WOULD BUILD 18 TO 22 NEW CONTAINERSHIPS.
THIS WOULD ENABLE US TO REPLACE
BETWEEN 50 AND 60 OF OUR OLD VICTORIES,
C-1s AND C-2s.
WE SHOULD REMEMBER, HOWEVER,
THAT THESE SHIPS, IF INDEED BUILT, WILL
-13-
NOT BE LAID DOWN UNTIL 1970 AND WILL NOT
BEGIN TO ENTER SERVICE UNTIL 1973. AND BY
THEN OUR ACTIVE LINER FLEET UNDER 25 YEARS
OF AGE WILL HAVE SHRUNK TO LESS THAN 250
SHIPS FROM ITS PRESENT LEVEL OF APPROXIMATELY
600.
THEREFORE I SAY THAT THE CONGRESS
IS PROPOSING A SHIP CONSTRUCTION PROGRAM
WHICH IS A BARE MINIMUM. AND WE HAVE NO
TIME TO LOSE.
DURING A PERIOD OF INTERNATIONAL
CRISIS, THAT COUNTRY WHICH MUST RELY ON
FOREIGN TONNAGE TO TRANSPORT ITS ESSENTIAL
COMMODITIES PAYS A HEAVY PRICE. OUR
RELIANCE ON FOREIGN-FLAG CARRIERS HAS
Like other vital parts 2 our national Accurty
LASTED FAR TOO MANY YEARS. WE WILL NOT
BE ABLE TO CORRECT IT OVERNIGHT.
the deficiency
PRESIDENT NIXON HAS EXPRESSED
HIS CONCERN. A COMPLETE REVIEW OF OUR
MARITIME REQUIREMENTS IS UNDER WAY.
GERALD LIBRARY FORD
-14-
I HOPE AND TRUST WE HAVE REACHED
THE TURNING POINT. I HOPE WE WILL NOW
WITNESS AN ACCELERATED EFFORT TO REVIVE
ALL SEGMENTS OF OUR MERCHANT MARINE.
I ASSURE YOU, THAT EFFORT HAS
MY SUPPORT.
-- END --
BERALD R.
REMARKS BY REP. GERALD R. FORD
REPUBLICAN LEADER, U.S. HOUSE OF REPRESENTATIVES
BEFORE THE 14th BIENNIAL CONVENTION
OF THE SEAFARERS INTERNATIONAL UNION, AFL-CIO
AT THE STATLER-HILTON HOTEL, WASH NGTON, D. C.
AT 11 a.m. TUESDAY, JULY 29, 1969
FOR RELEASE ON DELIVERY
For years you have been hearing about the deterioration of the American
Merchant Marine and the swift rise of the Soviet Union as a maritime power.
This, of course, is all too true -- tragically true. But it would serve
no purpose for me this morning to spend much time reciting once more the sorry
state of American ship construction and the steady growth of the modern Soviet
merchant fleet, which now confronts us on every sea lane of the world.
You know that 80 per cent of the Russian fleet is now less than 10 years
old and incorporates the latest technological developments in world shipbuilding.
You know too that the average age of the United States merchant fleet is
27 years.
What we should concentrate on this morning is what are we going to do
to remedy this appalling situation? The time for rhetoric and for hand-wringing
is long past. This is a time for action, and action we must have.
We must look at our merchant marine requirements in terms of meeting our
minimum defense and civilian emergency needs, given a limited war contingency.
From that point of view, we must build a fleet capable of lifting 28 million
tons of general cargo and 101 million tons of dry bulk cargo if we are to satisfy
those needs by 1977.
At the current rate of construction -- about 12 ships per year of the
C-7 container or LASH type ship -- our shipping capability by 1977 will satisfy
only 64 per cent of our essential general cargo requirements. Dry bulk capability
will be non-existent.
I believe a minimum of 16 to 21 LASH or Seabarge type vessels must be
completed annually between 1970 and 1977. Dry bulk requirements are at the level
of 23 to 24 50,000-ton carriers annually, equalling 39 to 45 ships per year.
There is little doubt that the urgent need for action is well understood
in the Congress.
(more)
-2-
As you have seen, the House has passed a Maritime Authorization Bill
which allowed for an appropriation of $145 million over and above a previous
carryover of $101 million. This is enough to build at least 20 new ships --
nearly twice as many as we have been constructing.
This is a substantial start toward a bold new program of ship construction.
It is probably as much as the Federal Maritime Administration could reasonably
spend in fiscal year 1970. To put it another way, it's doubtful they could
profitably use more than the $246 million authorized.
The Rooney Appropriations Subcommittee exceeded the authorization. The
request that came to the House floor last week was for $200 million. A point of
order was raised against it. The Maritime Authorization Bill had not yet cleared
the Senate.
There is no reason for concern about the maritime appropriation. The
matter will be straightened out shortly, I am sure. And I firmly believe that
the Congress will appropriate that amount which can reasonably be spent to
strengthen the American Merchant Marine in fiscal year 1970. To appropriate
more than that amount would be meaningless.
You will see, I feel certain, a significant improvement in ship construction
this fiscal year over past performance.
The Maritime Authorization Bill, as introduced, called for only $15 million
in new shipbuilding funds in addition to the $101 million carryover. That
represented the viewpoint of the last Administration and was consistent with the
low priority it assigned to our merchant marine.
The bill reported by the House Merchant Marine Committee and approved by
the House reflected the high priority that Congress attaches to the American
Merchant Marine.
The Congress has never wavered in its support for the effort needed to
replace our antiquated ships. But we have repeatedly run into trouble at the
Budget Bureau. Consequently, it would have been an exercise in futility for the
Appropriations Committees of the House and Senate to fund the maritime program
at the level authorized.
Currently the Federal Maritime Administration and a White House Task Force
are working on a new maritime program. My friends in the Maritime Administration
tell me the program will be completed in the next two weeks or' SO. Then the
recommendations have to clear the Budget Bureau in terms of dollar outlay --- and
that is the critical factor.
(more)
-3-
I understand that the Maritime Administration is putting together a good
program. I can assure you of this -- the Maritime Administration has no intention
of proposing that American merchant ships be built in foreign yards.
As the program is shaping, I believe we will see a drastic simplification
in present processes of administering the operating and construction differential
subsidies.
Our subsidized carriers should be relieved of the tremendous administrative
burdens imposed on them by the Merchant Marine Act of 1936 and the present
requirements of the Maritime Administration.
This would not only reduce administrative expenses but also allow the lines
additional flexibility in terms of providing service.
I think it also would be a giant step forward if the Government considered
building ships in series of 10 or 15, instead of building ships one at a time.
You may see this in the new maritime program.
This would reduce the cost to the Government and the operators by roughly
$1 million per ship.
And the main feature is that once U.S. shipyards know they will have an
assured volume of future business they will act to modernize their yards and
thus further reduce costs.
I also believe the benefits of the Merchant Marine Act in terms of subsidy
and certain tax advantages should be made available to the non-subsidized lines,
the bulk carriers and possibly even the tanker companies. This also may be a
recommendation in the new maritime program.
At the present time, as you know, the basic beneficiaries of the federal
maritime program are the subsidized carriers. They get an operating subsidy and
a shipbuilding subsidy. Everyone else is on the outside looking in.
It's conceivable today that we can put some of our ships on a parity with
foreign vessels if the Government would simply build the ships and then turn them
over to the lines to operate on their own. This, again, is a concept which may
wind up in the new maritime program.
What would this kind of shipbuilding and operating program accomplish?
It would greatly expand our shipbuilding activity, and it would lead to a far
greater use of U.S. flag ships.
The Treasury has traditionally opposed this kind of program ,but I find
there is strong support for it in the Congress.
(more)
-4-
Ten years ago we embarked on an ambitious ship replacement program.
If we had followed through on it as planned we would have replaced our entire
subsidized liner fleet of some 300 ships by now.
Currently we are at the point where the ship replacement program has
achieved only 50 per cent of its goal.
American ships are now transporting only slightly more than 20 per cent of
our liner cargo and only about 5.6 per cent of our overall total foreign trade.
We are thus dependent on foreign-flag ships to transport 95 per cent of
our exports and imports.
We must remedy this situation. To see the critical nature of the problem,
we need only look at Vietnam.
To sustain the movement of men and supplies to Vietnam, we have been
compelled to divert ships from their normal trade routes. This, in turn, has
made it increasingly difficult for American-flag liner companies to remain
competitive with foreign-flag carriers.
Significant benefits can be expected to flow from a revitalized ship
replacement program.
The new containerships, seabarge ships, and LASH or Lighter-Aboard-Ships
represent tremendous advances in the concept of transporting general cargo.
Six of these ships have the equivalent productivity of 15 traditional
break-bulk vessels.
The increased productivity of these ships, together with the high degree
of automation, will mean that the operating-differential subsidy cost to the
Government will be substantially reduced.
The 15 break-bulk vessels which every six new containerships will replace
now receive an annual operating-differential subsidy payment of approximately
$10 million. This would be reduced to $3.2 million for the six containerships.
At the same time, the new containerships will carry about 60 per cent more cargo.
This is just one example of the progress we are making in our vessel
replacement program.
As I said earlier, the maritime funding now being completed by the Congress
would build 18 to 22 new containerships.
This would enable us to replace between 50 and 60 of our old Victories,
C-ls and C-2s.
(more)
--5-
We should remember, however, that these ships, if indeed built, will not
be laid down until 1970 and will not begin to enter service until 1973. And by
then our active liner fleet under 25 years of age will have shrunk to less than
250 ships from its present level of approximately 600.
Therefore I say that the Congress is proposing a ship construction program
which is a bare minimum. And we have no time to lose.
During a period of international crisis, that country which must rely on
foreign tonnage to transport its essential commodities pays a heavy price. Our
reliance on foreign-flag carriers has lasted far too many years. We will not be
able to correct it overnight.
President Nixon has expressed his concern. A complete review of our
maritime requirements is under way.
I hope and trust we have reached the turning point. I hope we will now
witness an accelerated effort to revive all segments of our merchant marine.
I assure you, that effort has my support.
# # #
Distribution Full
Galleries 11a.m. 7/29/69
air mail 2 p.m. 7/2 9/69
n Office Copy
REMARKS BY REP. GERALD R. FORD
REPUBLICAN LEADER, U.S. HOUSE OF REPRESENTATIVES
BEFORE THE 14th BIENNIAL CONVENTION
OF THE SEAFARERS INTERNATIONAL UNION, AFL-CIO
AT THE STATLER-HILTON HOTEL, WASH NGTON, D. C.
AT 11 a.m. TUESDAY, JULY 29, 1969
FOR RELEASE ON DELIVERY
For years you have been hearing about the deterioration of the American
Merchant Marine and the swift rise of the Soviet Union as a maritime power.
This, of course, is all too true -- tragically true. But it would serve
no purpose for me this morning to spend much time reciting once more the sorry
state of American ship construction and the steady growth of the modern Soviet
merchant fleet, which now confronts us on every sea lane of the world.
You know that 80 per cent of the Russian fleet is now less than 10 years
old and incorporates the latest technological developments in world shipbuilding.
You know too that the average age of the United States merchant fleet is
27 years.
What we should concentrate on this morning is what are we going to do
to remedy this appalling situation? The time for rhetoric and for hand-wringing
is long past. This is a time for action, and action we must have.
We must look at our merchant marine requirements in terms of meeting our
minimum defense and civilian emergency needs, given a limited war contingency.
From that point of view, we must build a fleet capable of lifting 28 million
tons of general cargo and 101 million tons of dry bulk cargo if we are to satisfy
those needs by 1977.
At the current rate of construction -- about 12 ships per year of the
C-7 container or LASH type ship -- our shipping capability by 1977 will satisfy
only 64 per cent of our essential general cargo requirements. Dry bulk capability
will be non-existent.
I believe a minimum of 16 to 21 LASH or Seabarge type vessels must be
completed annually between 1970 and 1977. Dry bulk requirements are at the level
of 23 to 24 50,000-ton carriers annually, equalling 39 to 45 ships per year.
There is little doubt that the urgent need for action is well understood
in the Congress.
(more)
-2-
As you have seen, the House has passed a Maritime Authorization Bill
which allowed for an appropriation of $145 million over and above a previous
carryover of $101 million. This is enough to build at least 20 new ships --
nearly twice as many as we have been constructing.
This is a substantial start toward a bold new program of ship construction.
It is probably as much as the Federal Maritime Administration could reasonably
spend in fiscal year 1970. To put it another way, it's doubtful they could
profitably use more than the $246 million authorized.
The Rooney Appropriations Subcommittee exceeded the authorization. The
request that came to the House floor last week was for $200 million. A point of
order was raised against it. The Maritime Authorization Bill had not yet cleared
the Senate.
There is no reason for concern about the maritime appropriation. The
matter will be straightened out shortly, I am sure. And I firmly believe that
the Congress will appropriate that amount which can reasonably be spent to
strengthen the American Merchant Marine in fiscal year 1970. To appropriate
more than that amount would be meaningless.
You will see, I feel certain, a significant improvement in ship construction
this fiscal year over past performance.
The Maritime Authorization Bill, as introduced, called for only $15 million
in new shipbuilding funds in addition to the $101 million carryover. That
represented the viewpoint of the last Administration and was consistent with the
low priority it assigned to our merchant marine.
The bill reported by the House Merchant Marine Committee and approved by
the House reflected the high priority that Congress attaches to the American
Merchant Marine.
The Congress has never wavered in its support for the effort needed to
replace our antiquated ships. But we have repeatedly run into trouble at the
Budget Bureau. Consequently, it would have been an exercise in futility for the
Appropriations Committees of the House and Senate to fund the maritime program
at the level authorized.
Currently the Federal Maritime Administration and a White House Task Force
are working on a new maritime program. My friends in the Maritime Administration
tell me the program will be completed in the next two weeks or SO. Then the
recommendations have to clear the Budget Bureau in terms of dollar outlay -- and
that is the critical factor.
(more)
-3-
I understand that the Maritime Administration is putting together a good
program. I can assure you of this --- the Maritime Administration has no intention
of proposing that American merchant ships be built in foreign yards.
As the program is shaping, I believe we will see a drastic simplification
in present processes of administering the operating and construction differential
subsidies.
Our subsidized carriers should be relieved of the tremendous administrative
burdens imposed on them by the Merchant Marine Act of 1936 and the present
requirements of the Maritime Administration.
This would not only reduce administrative expenses but also allow the lines
additional flexibility in terms of providing service.
I think it also would be a giant step forward if the Government considered
building ships in series of 10 or 15, instead of building ships one at a time.
You may see this in the new maritime program.
This would reduce the cost to the Government and the operators by roughly
$1 million per ship.
And the main feature is that once U.S. shipyards know they will have an
assured volume of future business they will act to modernize their yards and
thus further reduce costs.
I also believe the benefits of the Merchant Marine Act in terms of subsidy
and certain tax advantages should be made available to the non-subsidized lines,
the bulk carriers and possibly even the tanker companies. This also may be a
recommendation in the new maritime program.
At the present time, as you know, the basic beneficiaries of the federal
maritime program are the subsidized carriers. They get an operating subsidy and
a shipbuilding subsidy. Everyone else is on the outside looking in.
It's conceivable today that we can put some of our ships on a parity with
foreign vessels if the Government would simply build the ships and then turn them
over to the lines to operate on their own. This, again, is a concept which may
wind up in the new maritime program.
What would this kind of shipbuilding and operating program accomplish?
It would greatly expand our shipbuilding activity, and it would lead to a far
greater use of U.S. flag ships.
The Treasury has traditionally opposed this kind of program, but I find
there is strong support for it in the Congress.
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Ten years ago we embarked on an ambitious ship replacement program.
If we had followed through on it as planned we would have replaced our entire
subsidized liner fleet of some 300 ships by now.
Currently we are at the point where the ship replacement program has
achieved only 50 per cent of its goal.
American ships are now transporting only slightly more than 20 per cent of
our liner cargo and only about 5.6 per cent of our overall total foreign trade.
We are thus dependent on foreign-flag ships to transport 95 per cent of
our exports and imports.
We must remedy this situation. To see the critical nature of the problem,
we need only look at Vietnam.
To sustain the movement of men and supplies to Vietnam, we have been
compelled to divert ships from their normal trade routes. This, in turn, has
made it increasingly difficult for American-flag liner companies to remain
competitive with foreign-flag carriers.
Significant benefits can be expected to flow from a revitalized ship
replacement program.
The new containerships, seabarge ships, and LASH or Lighter-Aboard-Ships
represent tremendous advances in the concept of transporting general cargo.
Six of these ships have the equivalent productivity of 15 traditional
break-bulk vessels.
The increased productivity of these ships, together with the high degree
of automation, will mean that the operating-differential subsidy cost to the
Government will be substantially reduced.
The 15 break-bulk vessels which every six new containerships will replace
now receive an annual operating-differential subsidy payment of approximately
$10 million. This would be reduced to $3.2 million for the six containerships.
At the same time, the new containerships will carry about 60 per cent more cargo.
This is just one example of the progress we are making in our vessel
replacement program.
As I said earlier, the maritime funding now being completed by the Congress
would build 18 to 22 new containerships.
This would enable us to replace between 50 and 60 of our old Victories,
C-ls and C-2s.
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We should remember, however, that these ships, if indeed built, will not
be laid down until 1970 and will not begin to enter service until 1973. And by
then our active liner fleet under 25 years of age will have shrunk to less than
250 ships from its present level of approximately 600.
Therefore I say that the Congress is proposing a ship construction program
which is a bare minimum. And we have no time to lose.
During a period of international crisis, that country which must rely on
foreign tonnage to transport its essential commodities pays a heavy price. Our
reliance on foreign-flag carriers has lasted far too many years. We will not be
able to correct it overnight.
President Nixon has expressed his concern. A complete review of our
maritime requirements is under way.
I hope and trust we have reached the turning point. I hope we will now
witness an accelerated effort to revive all segments of our merchant marine.
I assure you, that effort has my support.
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