605 
These arguments in defense of maintaining a viable merchant 
marine, used by Thomas Jefferson in a letter to the House of 
Representatives in 1793, are equally valid today. The U.S. maritime 
industries, which once feared competitors on the oceans during the 
days of the fast Yankee clippers, have long since ceased to be indus- 
tries capable of surviving without government subsidies. ' 
The maintenance of viable U.S. maritime industries has been de- 
fended on the basis of economic—jobs, balance of payments—and 
national security interests. Although there is general agreement on 
the national security aspects, experts differ on the economic arguments 
with respect to Federal subsidies for shipbuilding and shipping. 
Proponents of subsidy programs have pointed out that U-.S.-flag 
merchant ships provide employment for more than 50,000 seagoing 
sailors and provide 200,000 man-years of employment in the ship 
construction industry. '?° The contribution of the merchant marine 
to the U.S. balance-of-payments position has been estimated to be 
at about $700 million per year.'?’ Critics of the economic arguments 
in favor of subsidizing U.S. maritime industries maintain that the 
steady employment on those industries is taking place at high govern- 
ment expense. They argue that one should look at the opportunity 
cost of the subsidy—many skilled workers in shipyards can. work else- 
where in nonsubsidized jobs.’'! As far as the balance-of-payments 
argument is concerned, critics say that the United States may be 
better off subsidizing some other industry which does not require 
as large a subsidy as the maritime industries.'?8 
National security considerations for government subsidy programs 
are the least controversial. It is generally accepted that the United 
States needs a balanced merchant marine (1) to serve as an auxiliary 
force to the Navy in time of emergency and (2) to haul a substantial 
portion of overseas trade in times of peace. The Maritime Administra- 
tion of the Department of Commerce is responsible under the law 
for administering the maritime program in such a way as to provide 
for a strong U.S. merchant marine capable of meeting the needs 
of national defense and security. Section 101 of the Merchant Marine 
Act, 1936, which has never changed in subsequent revisions of the 
Act, provides as follows: 
It is necessary for the national defense and development of its foreign and domestic 
commerce that the United States shall have a merchant marine (a) sufficient to carry 
its domestic water-borne commerce and a substantial portion of the water-borne export 
and import foreign commerce of the United States and to provide shipping service 
essential for maintaining the flow of such domestic and foreign water-borne commerce 
at all times, (b) capable of serving as a naval and military auxiliary in time of war 
or national emergency, (c) owned and operated under the United States flag by citizens 
of the United States insofar as may by practicable, (d) composed of the best-equipped, 
safest, and most suitable types of vessels, constructed in the United States and manned 
with a trained and efficient citizen personnel, and (e) supplemented by efficient facilities 
for shipbuilding and ship repair. It is hereby declared to be the policy of the United 
States to foster the development and encourage the maintenance of such a merchant 
marine.'*4 
119 study prepared for the Maritime Administration indicated that ship construction and the 
operation of merchant marine vessels is being subsidized in most other countries as well. 
_ See: U.S. Department of Commerce, Maritime Administration. Foreign Maritime Aids, Washington, D.C., December 
1974. 
120 Hearings on Merchant Marine Oversight 1975, op. cit., p. 372. 
121 Tbid., p. 386. 
122s bid=.sp- Olll: 
123 Tbid., p. 63. 
12446 U.S.C. 1101, 49 Stat. 1985, 84 Stat. 1018, Public Law 91-469. 
