359 
outbound cargo movements and 12 percent of the inbound traffic 
during the period January-September, 1974.% 
The Commission has conducted several meetings with Soviet 
maritime officials during which their intentions for continued expan- 
sion have been discussed. From these conversations, it is evident that 
the Soviets have established no upward limits on the growth of their 
merchant marine. The Soviets insist that they are unable to depend 
upon another nation’s merchant marine to transport their foreign 
trade. They maintain that the principal reason for the present and 
planned growth of their fleet is to serve the Soviet-American trade 
which is expected to grow at an unprecedented rate in the next 
few years. While this trade is developing, the Soviets indicate that 
they will continue to employ added new vessels where they can be 
best utilized. 
INTERNATIONAL SHIPPING CONFERENCES AND SOVIET MARITIME 
ACTIVITIES 
The Shipping Act of 1916 was an outgrowth of lengthy hearings 
and investigations. At that time, and later in 1961, Congress found 
that the conference system if honestly and fairly conducted would 
provide greater regularity and frequency of service at lower cost. 
It was also concluded that the system would result in greater stability 
and a more uniform rate structure. Through the Shipping Act of 
1916, Congress sought to eliminate secret arrangements and un- 
derhanded methods of discrimination, to offer a better distribution 
of sailings, and to provide a pattern of rates that would enable Amer- 
ican exporters and importers to compete in foreign markets. Under 
the act, the Federal Maritime Commission has important areas of 
responsibility insofar as the American foreign trade industry is con- 
cerned. It is obligated to undertake whatever action is appropriate 
and in accordance with the provisions of the Shipping Act to insure 
that conditions conducive to the advancement of the U.S. foreign 
trade are developed and maintained. 
There are several potential advantages to the Soviets favoring their 
participation in the liner conferences serving U.S. trade areas. Some 
of these advantages are: 
1. A voice in formulating policy and developing rate structures 
in a particular trade. 
2. Where a conference dual-rate system is in effect, the Soviets 
can gain access to a directory of shippers signing the merchant’s 
freighting agreement. These merchants would be authorized to 
ship their cargo on Soviet vessels at the lower contract rates. 
3. A contribution to and a consequent benefit from stable rate 
conditions in the trade. 
4. The possibility of destructive rate wars—that in the long 
run are harmful to everyone concerned—would be minimized. 
5. The avoidance of complaints by American Merchant Marine 
operators, labor unions and ultimately, their representatives in 
Congress. Such complaints—and those arising from carriers of 
other nations—could generate formal hearings and investigations 
before the Federal Maritime Commission. As Conference mem- 
bers, should such hearings or investigations take place, the Soviets 
13 Department of Commerce, Maritime Administration. 
