cially responsible, that the vessel substantially complies with American safety standards, and that his rates and practices would not prejudice American vessels?

Supposing this commitee decides we are going to put financial responsibility on these foreign vessels. That is done. We have said that. Now how are we going to do it? You would have no objection to section 1, which sets forth the compliance, would you? Admiral HARLLEE. Section 1 of 1351 The CHAIRMAN. I will read it.

Issuance of the license would be contingent upon (1) the operator establishing that he is financially responsible, that the vessel substantially complies with American safety standards, and that his rates and practices would not prejudice American vessel.

Admiral HARLLEE. We would strongly support and espouse the first of these three criteria, Mr. Chanrman.

The second of those criteria, we naturally would have no objection. to, but again I must say that the Coast Guard and the State Department, the Coast Guard has statutory responsibility for safety of vessels at sea. The State Department has responsibility for our treaties. As far as we are concerned, we think that the public interest has got to be balanced against those things, and that it is up to the commitee to make a judgment. We naturally have no objection.

As far as the third of those things is concerned, the rates and practices having detrimental effect on American vessels, that might be quite difficult to administer. If we do not have any complaints from

The CHAIRMAN. Let's suppose it is difficult to administer. It is better to attempt to administer this section than do nothing at all.

Admiral HARLLEE. Let me put it two other ways, Mr. Chairman. In the first place we haven't had any complaints along those lines from the American merchant marine about those rates and practices prejudicing them. In the second place

The CHAIRMAN. If there were no complaints, then we wouldn't have a problem. There is no reason not to have it in the bill in case we get one.

Admiral HARLLEE. Yes: I think there would be some possible objections. I think, yes, I think there would be, in terms of the American traveling public. You might eliminate the competition of foreign ships which might be desirable for the American traveling public.

The CHAIRMAN. We will take a look at that, but it is about time we thought about some of our own American ships in this whole field, and this might be a way to get us a better agreement in international matters. Perhaps the State Department, maybe the word would be passed.

Admiral HARLLEE. May I make a few other comments about that, Mr. Chairman. The American ships receive considerable other assistance, such as subsidies in the matter of this cruise business. The matter of administering the bill to see that these rates don't prejudice them in any way is fraught with complexities because the rate structures for passengers involves a great variety of accommodations. involves a great variety of services, and a great variety of cost per meal

It

and maybe even dancing and all sorts of things, and there doesn't seem to us to be a need for this at this time.

We think that if you have this disclosure provision, it would tend to cut out these unsafe operators. Our interest at this time is in the safety of American passengers and in insuring that they don't pay for a cruise they don't make, and I think this bill would do that."

Now this other thing, I think is a different matter. In trying to see that the American merchant marine is protected from reliable foreign ships in the cruise trade, I think it ought to be handled in a somewhat different way.

The CHAIRMAN. What is your idea of disclosure? I have an idea, but I don't know whether the committee or somebody else clearly understands.

Admiral HARLLEE. Well, according to the administration bill, it would be administered by the Coast Guard or the Department in which the Coast Guard is. However, this would have to be a subject to a rulemaking proceeding. I do think that it is very important that the requirement be so stringent that a ship, a sail by night, as they have been called, is not able to say that they have been inspected by the Coast Guard, period, or something like that. Because when you have a statement, inspected by the Coast Guard, it might convey to the traveling public that this is a safe ship, but you know, and I know, that the grandfather clauses, the escape provisions are misleading-well, the Yarmouth Castle was inspected by the Coast Guard. Therefore, I think a rulemaking proceeding could call for some such statement as "This ship does meet or does not meet, method 1 of the 1960 SOLAS Convention." "This ship is not considered by the U.S. Coast Guard to meet U.S. safety standards." If the rulemaking proceeding resulted in such stringent requirements, I think this disclosure would be effective.

Now yesterday Congressman Mailliard testified about the cigarette advertising not stopping people from smoking. But I would like to point out a little difference here. This cigarette advertising business applies across the board, across to the tobacco trade, and it is a little hard for a person to get worried about one cigarette. But the kind of disclosure and advertising on these cruises is something different. It would apply deleteriously to certain ships, such as perhaps the Yarmouth Castle, but it wouldn't apply deleteriously to the U.S.S. United States or to the Moore McCormack lines' Argentina, or one of the Grace Line ships.

It would not apply-in fact it would help them-because they would be advertised as being safe, whereas these other ships would be advertised as being unsafe, if the rulemaking proceeding came out right, and so there is a big difference there.

The CHAIRMAN. There would have to be rulemaking proceedings. Admiral HARLLEE. To make them advertise in a way that really does put the goods on the line and doesn't fool people by some generality. The CHAIRMAN. There is a difference, as I understand, a great deal of difference between the SOLAS safety standards and the American safety standards.

Admiral HARLLEE. Yes, Mr. Chairman, and if the rulemaking proceeding called for them to have to advertise in terms of the American

standards, do they meet them or do they not, then I think that you would have something that the advertising public would pay attention to, because instead of being able to smoke any kind of a cigarette, they have a choice of a good ship or a bad ship.

The CHAIRMAN. One might think you and I had a conference before this hearing as that is precisely the way I feel. I think it should be put in the advertisement, which are sent all over the country to solicit passengers stating, "This ship complies with SOLAS safety at sea regulations but fails to meet the American safety standards."

Admiral HARLLEE. We agree, and the bill states

The CHAIRMAN. And then it is like the cigarette advertising. We just finished that in this committee and suggested in the beginning that every man is entitled to his own poison; but we had a responsibility to tell the consumer it was poison.

Admiral HARLLEE. Yes, we agree.

The CHAIRMAN. We can't prevent the public from going aboard and we don't intend to, but they certainly ought to know the dangers involved.

Admiral HARLLEE. But you give them a choice, one thing is advertised as safe and another is advertised as unsafe. Incidentally, the bill calls for all promotional literature and advertising to contain this disclosure, and it is the intention of the Coast Guard to go along the lines that you have mentioned, Mr. Chairman.

The CHAIRMAN. Now the 50 or more passengers were lifted, as you point out, from the so-called Sprinkler Act. Do you think that is too high or too low in this particular case? They picked 50 out of the air; and I suppose it was to eliminate fishing boats, ferryboats, and day

cruises.

Admiral HARLLEE. With the increasing affluence of our society you have more and more boats and more and more ferry and small craft that might have 10 or a dozen passengers, as for instance, out of Seattle, I think they might have a fishing boat that takes a dozen or so people, to go after steelhead, they don't do that in boats, but go fishing

The CHAIRMAN. We can get it right in front, not so? Take a rowboat, go out, and fish.

Admiral HARLLEE. We don't want the rowboats to be subjected to this kind of redtape for smaller ships. You have to draw the line somewhere, and this committee after further testimony may feel this is too high.

The CHAIRMAN. On ships that might be covered here, the Coast Guard pretty well takes care of inland water carrier. I think they do a commendable job.

Admiral HARLLEE. They do, Mr. Chairman, and also you have State and local provisions for safeguards in these matters.

The CHAIRMAN. All right, Admiral, and we appreciate it.

Do you gentlemen have anything to add to this? I want to ask your legal counsel whether he agrees with the contention which was propounded by the Coast Guard and reaffirmed by the State Department witnesses, that the SOLAS convention, 1960 convention, superseded this section in the Coast Guard law allowing them to inspect ships as to American standards?

Mr. MAZURE. Mr. Chairman, generally a treaty will override national law. That is not to say that Congress cannot amend the statute to override the treaty, but at the present time, that is correct. The CHAIRMAN. And you would also agree that certain sections of the proposed legislation do in effect modify the treaty?

Mr. MAZURE. No, I don't believe that they violate either the letter or the spirit of the SOLAS convention. The administration package

The CHAIRMAN. But if we said that ships coming into our port had to live up to American safety standards, we would then violate it? Mr. MAZURE. Yes, I believe it would, Mr. Chairman.

The CHAIRMAN. We would violate it as it now stands?

Mr. MAZURE. There is no doubt that Congress has the power to enact a law which would override the treaty.

The CHAIRMAN. No one would suggest that other ships, but we are talking about those that solicit trade from the public?

Mr. MAZURE. Yes, sir.

The CHAIRMAN. All right, thank you very much.

All right, Mr. Shapiro.

STATEMENT OF ALVIN SHAPIRO, EXECUTIVE VICE PRESIDENT, AMERICAN MERCHANT MARINE INSTITUTE, ACCOMPANIED BY C. N. ANDERSON AND JOHN GERITY

The CHAIRMAN. I understand you don't have a prepared statement. Mr. SHAPIRO. Mr. Chairman, I don't, for reasons I think you can well appreciate. We are put in a somewhat difficult position. We only saw this legislation finally as it turned up yesterday, and I am a little embarrassed-and I am sure everybody is a little embarrassed. We didn't know up until today what we were really talking about, although we had some idea.

The CHAIRMAN. We were working on it and didn't get it ready until yesterday.

Mr. SHAPIRO. I understand that.

Mr. Chairman, you know I am here representing the American Merchant Marine Institute, the largest of the trade associations representing the owners and operators of American-flag steamship lines. I have with me Mr. Anderson, who is down from New York. He has kindly consented to join me. He is an outstanding authority on insurance, marine and related thereto, and I am sure he can beand he has offered to be helpful both to me and to the committee to the extent that you want that help.

I assume, Mr. Chairman, the purpose of this hearing is to move forward with H.R. 10327, or related bills. H.R. 10327 was passed by the House last fall and we intend making such modifications as may be necessary in order to finally emerge with a passenger ship safety proposal.

The institute supported the House-passed bill by action of its board of directors, having considered it "a reasonable opening approach dedicated to protecting the traveling public." It was, I can assure you, recognized by us at that time that the aforesaid mentioned bill had certain deficiencies. Nevertheless, before one can be too critical,

it is essential to remember that the proposal was then brought forth in large part through the focusing of attention on instances of noncruise performance which left many passengers stranded on the docks after they had paid their fares.

The House bill would reach to this specific problem, and depending upon how its suggested solution were to be administered, it might easily have solved that aspect of the issue.

A second aspect of the legislation then considered was in the safety area. The bill required in connection with ocean cruises only, that a warranty had to be provided that the vessel was in "seaworthy and safe condition." Thus, that bill, even at that time, before the Yarmouth Castle, did deal with safety. It nevertheless provided no administrative responsibility in connection with the warranty, nor did it define "seaworthy and safe."

It must be borne in mind that these are generally vague expressions, many standards for them exist, differing in international treaty concept, in specific foreign national concepts, and in the United States. There are even, in fact, I believe it is fair to say, innumerable legal definitions of this term throughout the world.

Thus while the bill passed in the House recognized each of the two then basic problems, it provided the mechanics for resolving only one of them; namely, nonperformance.

I assume that this committee will seek primarily to improve the House bill. This, I believe, is a valid assumption, for we now have the Yarmouth Castle misadventure behind us, but still very clearly in mind. And even more recently, the T'iking Princess fire.

Putting first things first, I believe the basic problem we are trying to solve is that there are a limited number of passenger vessels participating in trade in and out of the U.S. ports, which under the "grandfather" clause of the Safety of Life at Sea Convention, are allowed by their own nations to hold international certificates, but which vessels are generally deemed to be—and time has proven to beunsafe.

In addition, it is obviously advantageous to proceed in such direction so that the passenger vessel to be built in the future will be the safest possible we can get.

Having been informed orally last month of a potential administration legislative solution to this problem, it is known that there are at least two, and perhaps three, simultaneous efforts going on to resolve this issue.

The Government legislative approach apparently provides for either the upgrading or elimination from service of a few U.S. passenger vessels operating on the Great Lakes, and the rivers which even under U.S. control are now considered to be unsafe.

These vessels fall strictly within U.S. jurisdiction, and every effort should be made to have them "shape up or ship out."

I myself am somewhat surprised and mystified that under our own administration of "grandfather" rights, these vessels are still as of this date eligible to operate in commercial passenger service under the U.S. flag. I mention this merely because I think it reflects on the fact that we in the United States cannot afford the luxury of being ultracritical when in fact, in 1966, we are trying to exclude or improve certain U.S.