"The naval officer employed this hard-sell, convincing pitch in every speech he gave before civic organizations, schools, and labor unions. Through the use of specially-prepared color slides, the cigar-chomping slightly-built admiral did an excellent job convincing his audience that the Soviets were up to no good in their fantastic rate of growth on bottoms of any kind.

"Although it is impossible for Admiral McCain to be on hand in Newport this week, those who have had the privilege of hearing him will be reminded of his excellent performance concerning his fear of the ultimate goals of the Soviet Union as they discuss the thick volume of papers prepared for these strategy discussions.

"The Soviet Union, unlike the United States, is pursuing a well-co-ordinated maritime program that can serve all facets of its maritime strategy,' states the Georgetown Center's report. This co-ordination calls for balanced and integrated development of naval forces, merchant and fishing fleets, maritime assistance, maritime industrial bases, including shipbuilding facilities, professional oceanic education and research.

"ONE WEAKNESS CITED

"At the policy level, the Soviets try to coordinate their substantial maritime resources with their political, economic, ideological and military goals. They have already made marked progress in this program.'

"In the specific areas, the tenth report discusses each one thoroughly. "Regarding naval forces, the experts state that the Soviet Union already surpasses the United States in important categories of seapower.

"The Soviet Union presently has many more conventionally-powered submarines, unparalleled long-range surface-to-surface cruise-missile systems on surface ships and on submarines, and a sizable missile-equipped fleet of patrol boats.

"However, a Soviet writer said that the Soviet Navy lags in logistic support for sustained combat conditions.

"MOVED UP TO 5TH

"In regard to the merchant marine, the report points out that the Soviets have moved up from 21st place in 1950 to fifth in the world in tonnage ‘and its rate of growth is impressive.' Their ships are almost totally modern in design and vintage, which is just the reverse of the United States situation:

"The Soviets and their Warsaw Pact allies cannot yet challenge the United States and its non-communist partners to allout competition in the arena of international maritime commerce, but on a selective basis they are making their weight felt.'

"It described the expansion of the Soviet high-seas fishing fleet as 'one of their program's most dramatic achievements,' having 11 times more tonnage than that of the United States.

"And in oceanography, the report said the Soviets are now overtaking the United States in some aspects of the fundamental and critical field . . .'

""The momentum and scope of the Soviet maritime program, rather than the specific achievements, are the main challenge to the United States,' it added. "The Soviets are making a relatively greater investment than is the United States in basic and applied naval research and in ship procurement.'"

"[From the Baltimore Sun, Aug. 21, 1969]

"UNITED STATES SHOWS FLEET DECREASE IN 1968
"(By Helen Delich Bentley)

"WASHINGTON.-There are 19,361 merchant ships-of which 932 are U.S. World War II hulks headed for the scrap heap-totaling 273 million deadweight tons in the fleets of the world.

"The newst tabulation of the world's vessels by the Maritime Administration also revealed that the still-deteriorating United States fleet-in fifth place-shows up now as the only one of the major maritime nations with a net decrease in merchant tonnage during 1968.

"This country had a net loss of 615,000 deadweight tons 'due mainly to the scrapping of World War II-built ships from the government-owned reserve fleet,' the report stated.

"BREAKDOWN DECEIVING

"Although this latest 20-page publication, 'Merchant Fleets of the World,' does provide a breakdown of sorts between the U.S. privately owned and the Government-owned reserve fleets, it is still deceiving, when the total number of ships cited for the United States is 2,071 totaling 25,464,000 deadweight tons, since it has been predetermined that at least one-half of those will definitely hit the scrap heap rather than ever to leave that reserve fleet spot to transport

cargoes.

"They are all World War II hulks-Liberty Ships and other types that were almost obsolete before they were launched. Those that are scrap-heap bound are in the Government-owned reserve fleet.

"Of the 967 U.S. privately-owned, totalling 15,346,000 deadweight tons, only one-third is post World War II-tonnage, whereas most of the ships of other major maritime powers are in the post-war period. The bulk of the foreign tonnage actually would fall in the 15 years and younger age brackets.

"The leading maritime nations are: Liberia with 1,613 ships totalling 45,141,000 deadweight; Norway with 1,308 ships of 30,593,000 deadweight; United Kingdom with 1,840 ships of 29,917,000 'deadweight; Japan with 1,766 ships of 29,220,000 deadweight; United States with 1,149 "active" Government and privately-owned ships of 17,126,000 deadweight; U.S.S.R., 1,634 vessels of 11,911,000 deadweight, and Greece, 1,006 ships of 11,543,000 deadweight; West Germany 909 of 9,320,000 deadweight; Italy, 620 of 8,686,000; France, 485 of 7,618,000; and Netherlands, 463 of 6,763,000.

"Even though the age of the ships plays a major role on the economic and efficiency aspects of all vessels, their age is never discussed or considered in statistical reports such as the one just released.

"In fact because the age of the American merchant marine was never programmed into the elaborate computers at the Pentagon, the conclusion always reached when the machines finished playing with the numbers was that the fleet was adequate. No one told the robots that the bulk of the ships already was being held together by baling wire, and skill of their crew members, and the high rates that could be afforded because of the Vietnam sealift.

"Therefore, no leadership in Washington-particularly at the Defense Department-was willing to lay itself on the line to justify expenditures for new ships to transport this country's trade and commerce.

"WORLD TONNAGE INCREASED

"The MarAd report said that total merchant vessel tonnage for the world fleet increased by 561 ships during the year with a deadweight tonnage climbing 22.8 million tons to a year-end total of 273.2 million.

"Nearly 22 million tons of the additional tonnage was accounted for by bulk carriers and tankers, the publication stated.

"As of December 31, the world fleet totaled 19,361 ships, compared to 1967's total of 18,800.

"The report noted that although freighters accounted for 4 million additional dead-weight tons during 1968, the net gain in this category was 'negligible' because of the large number of losses and scrappings.

46

"NET INCREASE 3 PERCENT

"The net increase in the number of ships for 1968 was equal to 3 per cent over that of 1967,' the report said, adding that the tonnage increase 'represented a 9.1 per cent rate of growth.'

"Liberia ranked first among the maritime nations of the world, and the 45.1 million tons registered under her flag represented 16.5 per cent of the world total.' the study reported.

"Norway and the United Kingdom, which ranked second and third, showed net increases in their fleets of 1.4 and 2.4 million tons respectively.

"Japan, the fourth leading maritime nation, had a net increase of 4.5 million tons, which placed her second behind Liberia for net gains during the year.

The Soviet Union and Greece, with net increases of approximately one million tons each, ranked sixth and seventh respectively,' the report concluded.

"Five countries in addition to the United States showed a net decrease in the number of ships in their fleets. These were: France, Italy, Norway, Sweden and the United Kingdom."

[From the Baltimore Sun, Aug. 25, 1969]

"U.S. FLEET GETS LESS VIET TONNAGE

"(By Helen Delich Bentley)

“WASHINGTON-Declining tonnage movements to Vietnam coupled with the impact of additional high labor costs negotiated in June are further beating down the already limping and decrepit American merchant marine.

"Shipowners are complaining that the Military Sea Transportation Service is keeping too many Victory ships (75) from the reserve fleet on active duty in the Vietnam pipeline while regular privately owned berth line vessels either are made idle by the lack of cargo or other berth liners are going out with partial loads on that route.

"FIFTEEN TO BE SCRAPPED

"This appears to be true even though the MSTS and Maritime Administration already have designated 15 of the reserve (General Agency Agreement) ships for scrapping and placed or scheduled 54 more to go on 'ready operating status' (ROS).

"ROS vessels are those which can be placed in service overnight should an emergency situation require them to be returned to the pipeline immediately.

"The dropoff in cargo has become drastic as far as the shipowners are concerned because of the bombing halt in Vietnam, the general lull in fighting, and the drive by President Nixon to return American GI's to the United States as fast as possible.

"As a result the World War II-vintage ships, which in essence have had life pumped into them by the added demands of the war situation in recent years, are being hard hit by the letdown.

"ECONOMY PRECLUDED

"Many have been surviving only because of the military sealift. Their age precludes their being economical in the revolutionary 1970 container era, meaning that only the higher rate afforded by wartime conditions has kept these traditional freighters in business. Once this military cargo disappears these break-bulk vessels will be heading to the scrapyards almost as fast as the torches can burn them into shreds.

"The tragic story for the United States is that about two-thirds of its merchant marine will be at least 25 years old in 1971, and 80 percent of it, more than 20 years of age by that time. When the 1936 Merchant Marine Act was written, 20 years was considered the economical life of a ship.

"Worn out engines, rusty hulls, high labor costs and high insurance rates make it impossible for these World War II vessels to operate competitively in the commercial market. They can only keep going in protected trades, such as the military sealift, transporting the congressionally-edicted portion of government-financed cargoes, or on domestic routes.

"Their owners-if they were or are interested in so doing-have had their hands somewhat tied in regard to replacing these ancient bottoms with modern sea giants because of legislative prohibitions concerning construction abroad and budgetary limitations needed for construction differential subsidy to build them in the United States.

"NUMBER REDUCED

"In addition to the General Agency Agreement bottoms whose active number has been reduced rapidly since Andrew E. Gibson assumed the post of maritime administrator. MSTS has 135 privately owned ships on time charter. Because some of these are sheathed to transport ammunition, both tramp and berth line operators believe that MSTS should begin channeling ammunition to these vessels in order to free general cargo to steamship lines serving these trade routes regularly.

"There also have been indications that if more of the independents or tramp owners would sheathe their ships said to cost between $20,000 and $25,000 a vessel—

the Maritime Administration would push the use of the privately owned bottoms by MSTS instead of the GAA's.

This in turn would make more cargoes available for the berth line operators. Tramp owners, unsubsidized and subsidized berth line operators jointly met last week with Maritime Administration and MSTS representatives to discuss their mutual problems resulting from the changing cargo picture. Pressure now is being heaped upon the shoulders of John W. Warner, under secretary of the Navy, to change some of the cargo consignments.

"Meanwhile, an operator like Waterman Steamship Company is losing thousands of dollars daily because of the refusal of the Defense Department to consider an adjustment in the daily contract price negotiated in 1967 with Waterman.

"With the new 15 per cent a year additional labor costs-as is estimated by most shipowners-Waterman with 12 ships under charter to MSTS finds itself losing at least $300 a day for each ship and feels it cannot continue without an adjustment of some kind.

"END OF THE LINE

"Similar rate structures without any escalation provisions are hurting other ship operators who likewise made their ships available to MSTS at a time when it was screaming loudest for American-flag bottoms. These companies feel that MSTS is letting them down by forcing them into bankruptcy because 'we were good guys when they needed us.'

"Other independent owners are bowing out of the picture, selling their ships or laying them up because the end of the line has arrived.'"

[From Business Week, Sept. 20, 1969]

LADY SKIPPER FOR THE MERCHANT FLEET

MRS. HELEN BENTLEY, NIXON'S CHOICE FOR MARITIME COMMISSION CHAIRMAN,

INTENDS TO PROVE SHE IS NO FIGUREHEAD

The Federal Maritime Commission is a small, quiet agency that seldom makes headlines and is little understood outside of shipping circles. Or at least, that is the way it has been up to now.

When the Senate gives its approval later this month to President Nixon's choice as next chairman, the place is going to resemble a pressure chamber close to explosion point. The chairman designate is Mrs. Helen Delich Bentley, 45, for the past 21 years maritime editor for the Baltimore Sun, and-in spite of a feminine fondness for extravagant hats and oversized handbags-one of the toughest, most aggressive, most tireless reporters in all journalism.

She has a full and well-used lexicon of portside profanity she can spout effectively in a variety of languages. She is notorious for her temper. Although she can be warm and friendly, she can affect a sneering tone of voice and abrasive mannerisms that offend many acquaintances.

FIERY ADVOCATE

Working, as she does, from eight in the morning until two the following morning, Mrs. Bentley is known throughout maritime circles and in Congress for her middle-of-the-night phone calls. She often makes them long after her paper has gone to bed, so that those she has rudely awakened cannot help wondering why her questions would not keep until tomorrow.

Often she calls two disputants in a story simultaneously, as she chases down the last facts. "She may say something about being sorry when she calls at 2 a.m.," says a man who has received many such calls, "but she couldn't care less. All she wants are the facts."

There is even a joke making the rounds of Washington that several senators will vote in favor of her confirmation if only to put an end to her nocturnal telephoning.

But perhaps the most significant thing about Mrs. Bentley being the new Maritime Commission chairman is that she is more than a promoter of the industry she has covered so long, she is a fiery advocate of it. "I want the American flag flying in every port," she told a Baltimore TV audience recently.

DIPLOMACY

Crusading zeal, a low boiling point, and a hair-curling vocabulary are not the attributes normally associated with the chairman of the Federal Maritime Commission. The commission's job is to be an impartial regulator-to be almost judicial. Diplomacy, tact, patience, and the ability to know when to compromise are the usual requirements of the FMC. That is, they used to be.

The problems confronting Mrs. Bentley in her new job require some fairly highlevel diplomacy. Much of the world's ocean-borne commerce, other than commodities such as oil, ore, and grain, is carried by steamship companies offering regularly scheduled sailings on specified routes. These liner operators, as they are called, generally join in conferences that set rates unanimously.

The justification for having uniform rates is that shippers, as well as steamship companies, prefer to have stable transportation freight rates. Any temporary advantages from rate wars, they feel, would be more than offset by the destruction of most steamship companies, and the eventual poorer service and higher rates that would follow.

In fact, without the conference-set rates, it is unlikely there would be a merchant fleet. It costs about 55% more to build a ship in U.S. yards than anywhere overseas. Then, U.S. ships cost more to man and operate; maritime subsïdies barely even things out.

But the existence of a U.S. merchant fleet is essential, Mrs. Bentley believes, if we are to be assured reasonable shipping rates for our commerce. She points out that at the beginning of World War I, when the U.S. fleet was less than half its current size, rates shot up more than 2,000%. While she concedes the rates help protect a high-cost industry, one reason she has always fought ardently for an expanded U.S. merchant fleet is to assure it has enough muscle in the conferences to guarantee the security of our trade in times of crisis.

So the conference system and the resulting cartelization of ocean commerce is approved by most importers and exporters. It has been approved by the U.S. government, including the Justice Dept., and is approved by Mrs. Bentley. But after she has been confirmed as chairman, she must do more than approve of the conferences. She must regulate them, and that can involve some delicate diplomacy.

OPEN BOOKS

Most of the conference members are foreign and, generally, neither they nor their governments ever liked the thought of U.S. regulatory action much less control. Since foreign flag companies carry 94.5% of the seaborne commerce of the U.S. and since this is considered the most lucrative traffic in the world, there is not much they can do about avoiding U.S. economic regulation.

But there is one area where they draw the line, and that is in refusing to allow the FMC to examine the books they keep in their home country. The FMC, backed by Congress and the courts, has raised hackles overseas by trying to do so.

For some time it has been alleged that certain low-cost foreign flag carriers have illegally attracted business by charging conference rates, then slipping rebates to the shippers. Such charges have become so noisy and widespread that the FMC, backed by Congress, has insisted on inspecting the books of foreign steamship operators-so far without marked success.

DEBATE

This inspection threat has been the subject of debate in the British Parliament and of heated attacks in other countries. Mrs. Bentley is carefully noncommittal about it. But one day in Oslo, when a Norwegian shipowner claimed he was losing money on U.S. business, she shouted: "If that's true, take your ships out, take them out, take them out of our service.”

"He wasn't losing money," she said afterward. “And he's still in U.S. trade.” This, then, is what the whole industry can look forward to. Where once the FMC was headed by "outsiders." many of whom needed at least two years to learn their jobs. Mrs. Bentley does not need to examine books to know what is going on in world shipping. She comes to her job with preconceived notions, and she also knows where the bodies are buried.