604 
important because they can unload supplies under adverse port condi- 
tions. 
Finally, the sheer number of the relatively modern Soviet merchant 
fleet—the fifth largest in terms of numbers of ships—together with 
the large number of modern fishing, oceanographic, and naval vessels, 
tends to reinforce Soviet claims to scientific and technological 
supremacy and to enhance the appeal of the Soviet model as the 
route to rapid national development.!® 
Since the Soviet merchant fleet is government-owned and operated, 
it can be used as an instrument of government policy independently 
from commerical consideration. This fact gives it a potential for rate 
cutting that cannot be matched by privately owned fleets. Of the 
58 Soviet international cargo lines, only five are affiliated with a 
shipping conference. William Carr observed that as nonconference 
operators Soviet steamship companies running conventional and con- 
tainer services on her trade routes, such as the North Pacific between 
the United States and Japan and the North Atlantic between the 
United States and Western Europe, charge rates at least 15 percent 
below those charged by the conference lines. The U.S. Department 
of Commerce has indicated that the Soviet Far East Shipping Co. 
has attracted a substantial share of the cargo moving between U.S. 
Pacific ports and the Far East by offering freight rates consistently 
lower than the established conference rates. This practice, which al- 
ready has been a cause for concern among western shipowners, is 
likely to become a more serious threat when the Soviets begin to 
obtain more competitive ships.'!® Competition on these terms is poten- 
tially destructive to U.S. shipowners and, eventually, to shippers.!!7 
PURPOSE OF THE U.S. MERCHANT MARINE 
As a branch of industry (our navigation) is valuable, but as a resource of defense, 
essential. Its values as a branch of industry is enhanced by the dependence of so 
many other branches on it. In times of general peace it mutiplies competitors for 
employment in transportation, and so keeps that at its proper level, and in times 
of war—that is to say when those nations, who may be our principal carriers, shall 
be at war with each other—if we have not within ourselves the means of tansportation, 
our produce must be exported in belligerent vessels, at the increased expense of war 
freight and insurance, and the articles which will not bear that must perish on our 
hands. 
But it is as a resource of defense that our navigation will admit neither neglect 
nor forberance. The position and circumstances of the United States leave them nothing 
to fear on their land board, and nothing to desire beyond their present rights. But 
on their seaboard they are open to injury, and they have there, too, a commerce 
which must be protected. This can only be done by possessing a respectable body 
of citizen seamen and of artisans and establishments in readiness for shipbuilding. 
Thomas Jefferson, 1793.1!8 
"5 Tbid. 
"6See chapter on Soviet Shipping Strengths and Its Employment, p. 188. and: Hearings on 
Merchant Marine Ovesight, pt. 1, op. cit., p. 389. 
"7 Lower rates can result in reduction of merchant marines of other nations, thereby creating a 
market volatile to future price increases. From the purely economic point of view, this practice might 
not be entirely unprofitable to the United States, if there were a guarantee that it would be continued 
in the future. This kind of competition, like dumping, frequently lower the number of participants in 
the trade, which in turn would allow the country offering the low rates to substantially increase the 
rates once the competition has been eliminated. From the national security point of view, increased 
western shipping on subsidized rate-cutting Soviet vessels does in fact imply a western contribution to 
the growth of the dual-purpose Soviet merchant marine. This practice, which already has been a 
cause for concern among western shipowners, is likely to become a more serious threat when the 
Soviets begin to obtain more competitive ships. 
"8 Quoted from a statement by Robert J. Blackwell, Assistant Secretary of Commerce for Maritime 
Affairs before the House Subcommittee on Merchant Marine on Aug. 1, 1975. 
See: U.S. House of Representatives, Committee on Merchant Marine and Fisheries, Subcommittee 
on Merchant Marine, Hearings on Merchant Marine Oversight, pt. 1, Washington, 1976, p. 371. 
