A sweeping and potentially controversial bill aimed at revitalizing the United States Merchant Marine fleet was introduced yesterday by House Merchant Marine Committee Chairman John M. Murphy (D-N.Y.)
Murphy said the bill probably would not be reported until early next year and emphasized it is "not the last word on maritime policy, it is a vehicle intended to spark animated discussion."
But Murphy said it essential that something be done to revitalize the merchant marine fleet because the fleet is in drastic decline. The U.S. fleet now carries less than 5 percent of our total foreign trade, while the Soviet fleet carries 50 percent of Soviet trade, the Japanese 40 percent and European nations between 30 and 45 percent of their trade.
Of some 5,000 dry bulk vessels in the world, the U.S. dry bulk fleet consists of only 19 ships, averaging over 25 years of age, four of which are now in drydock for repairs, Murphy said. He added in the event of another war the United States would not have an adequate fleet to carry supplies to its armed forces.
The U.S. merchant fleet has declined because it is cheaper to build and operate ships overseas, because of labor and other costs. A ship that costs $50 million to build in the United States could be bought for $14 million in Korea, Murphy said.
In addition, certain countries such as Liberia and Panama, offer tax havens making it attractive for companies to sail under foreign flags with foreign crews.
The administration had set up an Interagency Maritime Task Force intended to come up with a maritime policy by March 31 of this year, but Murphy called the results so far "an interagency dog fight" and said he felt compelled to come up with his own bill before time ran out on the administration.
Murphy's bill sets an overall goal of carrying 40 percent of the United States commerce in United States ships.
It would deny tax exemptions to vessels registered in tax haven countries which are wholly owned subsidiaries of U.S. corporations and are registered abroad to avoid U.S. taxes.
It would allow shippers' councils and carrier conferences, which means that both carriers and shippers could band together to set rates, a practice common in other countries but a violation of U.S. anti-trust laws.This provision is likely to be one of the most controversial of the bill. The shippers and carriers would be given anti-trust law exemptions.
It would allow subsidies for foreign-built vessels if owned by U.S. citizens and registered under U.S. law.
It would reduce the power of the Maritime Administration in commerce and the Federal Maritime Commission's power to regulate and set up a deputy special trade representative in the office of the president with broad maritime policy making powers.
A Murphy aide said he did not know the cost of the bill.
A Murphy bill to require 10 percent of oil imports to be carried in American flagships was defeated in the House in 1977 because it could have raised oil prices and because of wide publicity of maritime contributions to House members.
This time, Rep. Paul McCloskey (R-Calif.), who led the opposition to the cargo preference bill, worked closely with Murphy in drafting the bill and Murphy said the bill should have bipartisan support.
Opposition is expected from shipbuilders and shipbuilding unions, because of a provision allowing purchase of ships abroad, and from the oil industry, some of whose tankers fly foreign flags, a Murphy aide said.
The administration has not yet commented on the bill.