STATEMENT OF C. A. MILLER, VICE PRESIDENT AND GENERAL COUNSEL, THE AMERICAN SHORT LINE RAILROAD ASSOCIATION

Mr. MILLER. Mr. Chairman and gentlemen, for the record my name is C. A. Miller. I am vice president and general counsel of the American Short Line Railroad Association, with offices at 2000 Massachusetts Avenue, NW., Washington 6, D. C.

As I stated to you at the time I appeared before your committee in support of Senate Resolutions 253-256, in opposition to the President's Reorganization Plans Nos. 7, 8, 9, and 11, our association has a membership of 317 common carriers by railroad, operating nearly 20,000 miles of railway.

While our association does not have the same direct and vital interest in Reorganization Plan No. 21, relating to the United States Maritime Commission as it has with respect to Reorganization Plan No. 7, relating to the Interstate Commerce Commission, it does, nevertheless, have a substantial interest in the subject, because of the principles involved and the potentialities which may eventuate. It will be recalled that we opposed Reorganization Plans Nos. 8, 9, and 11 because they involve the same principles as Reorganization Plan No. 7. Much of what I said in connection with Senate Resolutions 253-256, and Reorganization Plans Nos. 7, 8, 9, and 11 is applicable here. However, all of that is available to the committee, and it will not now be repeated.

In House Document No. 503, which is the message of the President transmitting 21 plans for the reorganization of the agencies of the Government, it is said, at pages 3-4:

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*

Transfer of the functions of the Maritime Commission to the Department of Commerce through plan No. 21 will mark a long step forward in the integration of the many governmental programs affecting transportation. Plan No. 21 establishes in the Department of Commerce a three-man Federal Maritime Board and a Maritime Administration under a Maritime Administrator. The award of subsidies and all regulatory functions are transferred from the Maritime Commission to the new Board. The remaining functions of the Maritime Commission, involving ship construction and other administrative operations, are transferred to the Department of Commerce for execution through the Maritime Administration.

The plan also provides for appointment of an Under Secretary of Commerce for Transportation, who will assist the Secretary in the direction and coordination of the transportation activities now centered in the Department.

In House Document No. 526, which is the message of the President relating to Reorganization Plan No. 21, in particular, it is said, at page 3, that:

While an independent commission is an appropriate instrument for the performance of the regulatory functions of the Maritime Commission, such an agency obviously is not the type required to provide strong and efficient administration of the large operating programs now entrusted to the Commission or to obtain the needed coordination with other activities of the executive branch. (Italics supplied.)

Further, at page 3 of the House Document No. 526, it is said of plan No. 21:

It transfers to the Board the regulatory functions of the Commission and definitely guarantees the independence of the Board in the performance of these functions.

The plan provides that the Maritime Board will consist of three members ap by the President, with the consent of the Senate,

and overlapping terms of 4 years, with not more than two members of the Board coming from the same political party. It is also provided that the Chairman of the Board will be designated by the President from the members of the Board. But, it is further provided that the Chairman of the Board will be, ex officio, the Maritime Administrator and, as such, the head of the Maritime Administration.

On pages 4 and 5 of the House Document No. 526 it is said that: Over the years, however, transportation functions have become widely scattered throughout the executive branch. As a result, intelligent planning and budgeting of Federal transportation activities and the necessary coordination of transportation programs have become extremely difficult or impossible. The transfer of the functions of the Maritime Commission to the Department of Commerce will constitute a major step in correcting this condition.

Without question the Department of Commerce is now the appropriate center for transportation programs. * * * The transfer of the functions of the Maritime Commission will bring into the Department the principal watertransportation agency of the Government. These actions will go a long way toward the establishment of a sound and effective organization for the operating and promotional programs of the Government relating to transportation.

Then, again, on page 5 of House Document No. 526, the President

says:

It is my purpose to fook to the Secretary of Commerce for leadership with respect to transportation problems and for the development of over-all transportation policy within the executive branch.

The President thus makes crystal clear the road down which the transportation regulatory agencies of the Government will travel if this reorganization plan, and other reorganization plans, become effective. The future of the Interstate Commerce Commission, for instance, is made clear. If the President is permitted to do as he wishes, it is only a question of time until the Interstate Commerce Commission will be transferred to and made a part of the Department of Commerce.

If it be argued that the regulatory functions of the Interstate Commerce Commission would be retained in a separate agency, the answer is to be found in the proposal of Reorganization Plan No. 21, under which the regulatory functions of the Maritime Commission are transferred to the Maritime Board which would be, in turn, in the Department of Commerce, with the Chairman of the Board being the head of the Maritime Administration.

The members of the Maritime Board, and particularly the Chairman, would be not only politically appointed, but would have to be politically minded. There would be no vestige of independence, such as the Congress has sought to provide for the regulatory agencies which it has created beginning with the Interstate Commerce Commission.

The regulatory functions of the Maritime Commission are performed primarily as an agency of the Congress. Those functions can be properly performed only when there is independence of action, where the regulatory agency can have no thought except to carry out the legislative policy and mandates of the Congress which created it.

In House Document No. 526, beginning on page 1, reference is made to the three different studies of the Maritime Commission which have been made in the past. All of these studies have pointed to the fact that the regulatory functions and the promotional or executive func

tions of the Maritime Commission should not be performed by the same agency. The soundness of this conclusion cannot well be disputed. But, the point is that Reorganization Plan No. 21 does not solve the difficulty. There would be such an interlocking of the Maritime Board, the regulatory agency, and the Maritime Administration, the promotional agency, both under the jurisdiction of a member of the President's Cabinet, that the evils of the past could not possibly be eliminated.

What should be done, in the interest of wise and efficient performance of the regulatory duties of the Maritime Commission, is to transfer those regulatory duties to a board that is responsible to Congress and not to the President, under such terms and conditions as will enable the new agency to function independently.

Once the Congress lets loose its grip on those regulatory agencies, and permits them to become a part of the executive branch of the Government, then it loses control over them, and cannot have the advantages which now accrue from the independence of such agencies, as, for instance, the Interstate Commerce Commission.

The independent agency, outside of the domination of the executive branch of the Government for the execution of the policies of the Congress and as an agency of the Congress, in the fields in which the Congress would ordinarily function if it had the time to devote to the multitudinous details, has proved itself.

It is respectfully submitted that the Congress should reject Reorganization Plan No. 21 because of the subordination of the regulatory functions of the Maritime Commission to a new agency which would be politically appointed, politically minded, and politically dominated. There may be other reasons why this reorganization plan should be rejected, but I have no competency to discuss such a subject, and will not attempt to do so.

Again, I am indebted to your committee for the courtesies you have extended.

The CHAIRMAN. Thank you, Mr. Miller. Any questions, Senator Schoeppel?

Senator SCHOEPPEL. No questions.

The CHAIRMAN. You are just very apprehensive that if this goes through, there would be more agencies that it would affect.

Mr. MILLER. That is just the point of it exactly, Mr. Chairman.
The CHAIRMAN. All right, thank you very much.

Mr. Sanford, would you come forward please, sir. You may proceed. Please identify yourself.

STATEMENT OF L. R. SANFORD, PRESIDENT, SHIPBUILDERS

COUNCIL OF AMERICA

Mr. SANFORD. I am L. R. Sanford, president of the Shipbuilders Council of America.

The Shipbuilders Council of America, and the shipbuilding and ship-repairing industry which it represents, view with deep concern the proposed transfer of the functions of the United States Maritime Commission to the Department of Commerce as contemplated in Reorganization Plan No. 21 transmitted to the Congress by the President of the United States under date of March 13, 1950.

This plan proposes to abolish the United States Maritime Commission and provides in lieu thereof a three-man Federal Maritime Board and a Maritime Administration in the Department of Commerce.

The council and the industry which it represents are opposed strongly to the proposed transfer. There are many compelling reasons justifying this opposition, but there are cited here only the most important ones as follows:

1. The transcending importance of the United States Merchant Marine to the national welfare and the national security and the complexity of the problems relating to that merchant marine fully justify the continuance of an independent Government agency, vested with the responsibility for its promotion and regulation, and reporting to the Congress on actions taken pursuant to the legislative policy promulgated by that Congress.

2. The proposal revives in substance an administrative procedure which previously was tried in the early thirties, but which definitely failed to achieve the national objective of promoting the merchant marine, as a result of which the 1936 act was passed creating an independent agency for that purpose called the Maritime Commission.

3. If any drastic change is required in the Maritime Commission and in the 1936 act which created it, such change should be initiated and accomplished through legislative channels, with adequate opportunity for hearings and appropriate consideration by all concerned, and not by Executive order.

4. In view of present critical world conditions, and the vital role played by the merchant marine in a national emergency, any drastic change at this time with consequent reorganization accompanied by the delay, confusion, and ineffectiveness that inevitably will ensue before a working organization can be evolved, would jeopardize the national security. Immediate forthright action is required at this time, of which there can be little hope if the proposed reorganization becomes effective.

5. The outstanding wartime record of the Maritime Commission is evidence that a specialized agency is qualified and equipped to cope with wartime problems. What worked before can be made to work again.

6. It is not possible nor practical to separate completely regulatory and promotional functions relating to a method of transportation such as the merchant marine, as they are overlapping, the exercise of one affecting the other, and vice versa. The prewar record of the Maritime Commission demonstrated that such functions are not incompatible for administration within the same organization.

7. The effect of submerging the administrative functions of the Maritime Commission in a bureau of an executive department already vested with responsibility for multitudinous and varied activities is to relegate the problems of the merchant marine further down the line and remove those immediately in charge from any direct outside contact, either with the Congress or the Executive, except through an Under Secretary and a Secretary, either or both of whom may have no familiarity with maritime affairs or problems.

8. There is no evidence that consolidation necessarily means economy in Government operation. Past experience has usually indicated the contrary.

In conclusion, there is no indication, much less assurance, that the proposed transfer will result in aggressive, constructive action in the administration of merchant marine affairs. On the contrary, there is every indication that history will repeat itself.

The council, on behalf of the industry it represents, therefore recommends and strongly urges the approval by this committee of Senate Resolution 265. It is the judgment of the industry that such action is necessary in the national interest.

Mr. Chairman, I could go on and on at great length, but it seemed to me that these were the primary reasons, and I thought it would be sufficient just to state them as they are.

The CHAIRMAN. Well, personally, and I am sure the members of the committee, appreciate the very salient points that you want to make. This brevity is very helpful to us.

Mr. SANFORD. Thank you, sir.

The CHAIRMAN. Thank you very much, Mr. Sanford. That is all we had scheduled for today.

Is there anyone else here wishing to testify who would like to be accommodated this afternoon? If not, the hearings will be adjourned until 1:30 tomorrow afternoon.

(Whereupon at 4:20 p. m., the committee adjourned to reconvene on Tuesday, May 9, 1950, at 1:30 p. m.)