National Maritime Policy

Report Outline
U.S. Merchant Marine and World Trade
Government Aid for American Shipping
Merchant Marine's Continuing Problems

U.S. Merchant Marine and World Trade

Reconsideration of U.S. Merchant Marine Policy

Anew policy to aid the troubled American merchant marine is in the making. A year-long review by President Johnson's Cabinet-level Maritime Advisory Committee and special task forces is expected to lead, before the year is out, to a formal statement of the problems and the proposals for tackling them. The committee's final recommendations may become the first order of business when Congress reconvenes next January. Giving urgency to the new program is recognition that the existing system of subsidies, established by the Merchant Marine Act of 1936, has not kept this country's shipping in a strong competitive position.

Most observers think that an adequate program for the shipping industry will have to involve subsidies or other forms of government aid in amounts as large or larger than the current $400 million annual outlay. The new policy may rely heavily for success on extension of construction and operating subsidies to bulk-cargo shipping—the so-called tramp ships. Hardships experienced by the tramp fleet have hastened the decline of the American merchant marine.

Yet it is far from certain that an expanded subsidy system can give the nation a strong merchant fleet in an era of vigorous competition from foreign shipping and from air cargo carriers. Still to be answered also is the question whether lasting labor peace in the maritime industry can be brought about through conciliation procedures still in a formative stage. To invest additional millions of tax dollars in federal subsidies would make no sense if bitter and prolonged clashes between labor and management were to continue periodically to prevent U.S.-flag ships from loading or sailing.