attorneys to review the proposed codification. To our amazement these senior counsel, numbering almost a score, could find very little to criticize or to suggest in the way of revision of the excellent draft prepared by Pike & Fischer under contract with your committee. Again, aside, I might note that we appointed from each of the member lines one of the house counsel and then placed in the position of a review panel the three gentlemen identified by Mr. Fischer earlier, old pros in the matter of maritime law, who did the final review of this entire undertaking. Upon completion of our review, we did propose to you a number of relatively minor changes and improvements, the majority of which have been incorporated in the pending legislation. It is our considered opinion that Senate 3446 successfully meets your objective that this codification should not in any way effect a substantive change in existing law. Today we have a few further improvements to suggest with regard to S. 3446 as presently drafted. Our suggestions relate to what appear to be clerical omissions and clarification of language in order to avoid any misinterpretation of intent. Since these are primarily technical in nature, I will offer them for the record. Our counsel, Mr. Robert Alsop, will be available tomorrow, if you desire, to discuss these further with your staff. Admiral JAMES. Thank you, sir. In closing, I should simply like to repeat the congratulations of the entire CASL group upon the successful completion of this laborious and unglamorous, but important, undertaking. I am sure that S. 3446, when enacted, will provide a firm foundation for the improvement and expansion of our national maritime policy. Thank you, sir. Senator HARTKE. Thank you, sir. I do not even know of any questions I can ask you in view of that statement. Admiral JAMES. Very good, sir. Senator HARTKE. The next witness will be Mr. John R. Mahoney, of Casey, Lane & Mittendorf, New York City, representing various New York-based conferences. Good morning, sir. STATEMENT OF JOHN R. MAHONEY, FIRM OF CASEY, LANE & MITTENDORF; ACCOMPANIED BY CHARLES D. MARSHALL, CHAIRMAN, ASSOCIATED LATIN AMERICAN FREIGHT CONFERENCES, NEW YORK, N.Y. Mr. MAHONEY. Good morning, Senator and Mr. Chairman. Senator HARTKE. We are always delighted here in Washington to receive visiting guests of the great city of New York, which is a subsidiary of the fine things which come from Washington. Mr. MAHONEY. We feel we are third-party beneficiaries of all those fine things. We hope, Senator, that we may make some kind of a contribution to some of these fine things. Senator HARTKE. Well, you certainly do. I might say that frequently people from the European countries find it very difficult to acclimate themselves to a situation where there is a capital in the political fields which is separate and distinct from the other commercial interests throughout the United States. Mr. MAHONEY. I think, Senator, that that could not have been more dramatically shown than the events of the past week in which here in the capital, I think, showed, oh, tremendous latitude of spirit in connection with a distinguished visiting fireman, and we in New York took a more parochial view, at least our mayor did. Mr. Chairman, I would start out by saying that unlike first of all, I want to introduce the person at my side here, Charles D. Marshall, who is chairman of the Associated Latin American Freight Conferences, of New York City. What I would like to do is to have this statement that we prepared, which is actually an eight-page statement with a two-page appendix A, and then a 22-page appendix B, incorporated in the record as such and then I would like to just do a little running commentary on the eight-page statement, with your permission. Senator HARTKE. The entire record and the appendixes will be included and you can proceed as you see fit. (Statement follows:) STATEMENT OF JOHN R. MAHONEY, A MEMBER OF THE FIRM OF CASEY, LANE & MITTENDORF, ACCOMPANIED BY CHARLES D. MARSHALL, CHAIRMAN, ASSOCIATED LATIN AMERICAN FREIGHT CONFERENCES, NEW YORK, N. Y. Mr. Chairman, Members of the Committee. My name is John R. Mahoney' I am a member of the firm of Casey, Lane & Mittendorf, New York, and I specialize in maritime and administrative law. I am accompanied today by Mr. Charles D. Marshall, Chairman of the Associated Latin American Freight Conferences. As their name implies, these Conferences based in New York, cover the trade between the East Coast and Gulf ports of the United States on the one hand, and the Caribbean, Central and South America on the other. Mr. Marshall is here in a representative capacity. Besides Mr. Marshall, the following Chairmen of other New York based Conferences are associating themselves with this statement: Vincent Barnett, David MacNeil, Richard Gage, James Pendleton, and Marcus Rough. Collectively, they represent the majority of the Conferences based in New York. If you'll refer to Appendix A where they are listed, you will see that geographically they reach every continent in the world. When your Committee issued its Committee Print entitled "Draft of Proposed Merchant Marine Act 1966" last February, these Conferences, in recognition of the vital stake which they have in shipping regulatory legislation, asked Messrs. Casey, Lane & Mittendorf and Burlingham, Underwood, Barron, Wright & White to collaborate in reviewing the material. Mr. Burton White of Messrs. Burlingham, assisted by Randolph Taylor, worked with my associate Preben Jensen and me in reviewing the Committee Print. In this project we coordinated our efforts with the Working Committee of CASL to avoid duplication and submitted our comments to your Committee on April 6th. I am pleased to say that most of our suggestions, which were embodied in those comments, have been adopted and are reflected in the present Bill, S. 3446. Parenthetically, I should say that since S. 3446 was promulgated on June 2nd, Mr. White and I have conferred with your staff and given them the benefit of our further review of this consolidation. We are very pleased that the staff was most receptive and that there remain only a few items which still require your consideration. Let me say at the outset that our clients applaud the purpose of the Bill as expressed in the Committee Print-to gather, organize rationally, and reenact the scattered statutes affecting the United States Merchant Marine into a comprehensive code of maritime law. Both the industry and its lawyers need such a code. All of us are at one in praising the Herculean job done by Pike & Fischer in preparing the draft of the revision. The fact that we are submitting only these few comments on a Bill that runs over 350 printed pages indicates the extraordinarily good job that has been done. These comments spring from our understanding that this Bill would not include any amendments to the substantive law unless they were necessitated by recent organizational changes. We believe that S. 3446 is designed to consolidate rather than amend the shipping statutes. Consequently, we are still concerned by what appears to be the apparent amendment of certain existing provisions. We submit, and hope you agree, that amendments of any of these statutes should be instituted only by separate legislation which will give all interested parties an opportunity to express their positions thereon. Substantive modifications should not be embraced within a proposed consolidation. Most of the changes which still concern these Conferences are the result of the drafters' incorporation of segments of the Merchant Marine Act of 1936 within the regulatory provisions of the Shipping Act, 1916, now Title I of S. 3446. Although these provisions may be appropriate for the Maritime Administrator, their inclusion in Title I would produce unwarranted substantive changes in the powers and functions of the Federal Maritime Commission specified by the Shipping Act, 1916. There are four specific provisions where the incorporation of sections from the 1936 Act into Title I provokes the concern of these Conferences. 1. Section 1304 of S. 3446 would amend Section 27 of the Shipping Act, 1916 to permit the Commission to issue subpoenas for the purpose of any investigation it deems necessary and proper. This authority appears in Section 214 of the Merchant Marine Act of 1936. Under Section 27 of the Shipping Act subpoenas can be issued only to investigate "alleged violations of this Act." We urge that the subpoena power of the Commission not be enlarged or amended under the guise of a consolidation. Section 27 of the Shipping Act should be retained and should replace proposed Section 1304 in the Act. Historically, the authority to issue subpoenas under Section 27 has been hotly contested. In 1961, the Commission sought to amend Section 27 to authorize the issuance of subpoenas during preliminary investigations in order to determine whether there was sufficient cause to charge violations of the Shipping Act. The Commission also requested authority to issue subpoenas in connection with any general investigations it might choose to institute. This comprehensive authority was refused. In urging these amendments, the Commission consistently has conceded that Section 27 does not grant such expansive subpoena powers. This subject matter presently is in litigation before the Court of Appeals for the Second Circuit on appeal from decisions in the District Court for the Southern District of New York. Ludlow v. DeSmedt, 249 F. Supp. 496 (S.D.N.Y. 1966) and Caragher v. FMC, 243 F. Supp. 136, 138, 139 (S.D.N.Y. 1965). Because the Commission's subpoena power may extend to foreign carriers and foreign governments, the proposed amendment to Section 27 will have international ramifications. As such, this substantive change should not occur during the course of a consolidation. Due to the extreme importance of this question and our recommendation, we request that the comprehensive legal memorandum prepared by Messrs. Kirlin, Campbell & Keating, attached to this statement as Appendix B, be made a part of the record. 2. Section 1404 provides penalties for violations of the Commission's orders— a subject not covered by the Shipping Act, 1916. Section 32 of that Act reads as follows: "Whoever violates any provision of this Act, except where a different penalty is provided, shall be guilty of a misdemeanor, punishable by fine of not to exceed $5,000." In 1961, the Federal Maritime Board, predecessor of the present Commission, and the Department of Commerce attempted to amend the Shipping Act to include penalties for violations of its orders, rules, and regulations. See Index to Legislative History of Steamship Conference/Dual Rate Law, Senate Document 100, 87th Cong., 2nd Session, p. 139. This proposal was rejected and does not appear in the 1961 amendments to the Shipping Act. Accordingly, a similar amendment should not be incorporated in a consolidation. The language of Section 1404 is taken from Section 806(d) of the Merchant Marine Act of 1936, and may be appropriate in that connection. However, this provision should not be included in Title I, dealing with the Commission's functions. 3. Section 1305, concerning the immunity of witnesses, adopts the language of Section 214(c) of the Merchant Marine Act of 1936, rather than the present language of Section 28 of the Shipping Act, and requires the witness to claim his privilege against self-incrimination. Once again, this is the type of revision that should not be undertaken during a consolidation of various shipping statutes. In this connection, we should call your attention to S. 2963 which was introduced in the Senate on February 23, 1966, by the Chairman, Senator Magnuson, and H.R. 12628, an identical Bill introduced in the House in early February. These Bills would inter alia amend Section 28 of the Shipping Act, 1916, to require a subpoenaed witness to claim his privilege. We understand that no action has been taken and that none has been scheduled on either Bill. 4. Section 1103(j) requires that the Commission report to Congress, concerning "the results of its investigations, a summary of its transactions, and its recommendations for legislation, a statement of all receipts under this title, and the purposes for which all expenditures were made.' This language has never appeared in the Shipping Act, 1916. Rather, it is lifted from Section 208 of the Merchant Marine Act of 1936. Commission. We feel that Section 1103 (j) should be omitted because it does not conform to the Commission's activities. The Commission does not engage in "transactions" in the same sense as the Administrator. Nor does it receive "receipts under this title." In fact, only the reference to "results of investigations" is relevant to the Earlier, we objected to the codification of cross references as a part of the statute, however helpful they might be as footnotes. Our recommendation was followed except in the retention of Section 1303. This procedural provision still contains cross references to various substantive sections of the Shipping Act where the procedures in question could be applied. Even in this respect the section is incomplete since it omits Section 1207. It is our position that this cross reference could be misleading, and is unhelpful and inconsistent. It should be omitted. Mr. Marshall and the other Chairmen have asked me to express their appreciation to this Committee for the careful, thoughtful manner in which this work has been carried out. They stand ready to provide any further assistance which the Committee may need. APPENDIX A LIST OF NEW YORK BASED CONFERENCES, AND THEIR CHAIRMEN, ASSOCIATED WITH STATEMENT (GROUPED GEOGRAPHICALLY) LATIN AMERICA Atlantic & Gulf/Panama Canal Zone, Colon & Panama City Conference East Coast Colombia Conference Havana Steamship Conference Havana Northbound Rate Agreement Leeward & Windward Islands & Guianas Conference Santiago de Cuba Conference United States Atlantic & Gulf-Haiti Conference United States Atlantic & Gulf-Jamaica Conference United States Atlantic & Gulf-Santo Domingo Conference U.S. Atlantic & Gulf-Venezuela and Netherlands Antilles Conference -Mr. Charles D. Marshall, Chairman EUROPE North Atlantic Baltic Freight Conference -Mr.Vincent G. Barnett, Chairman. North Atlantic United Kingdom Freight Conference -Mr. Richard J. Gage, Chairman. North Atlantic Mediterranean Freight Conference -Mr. David M. MacNeil, Chairman. FAR EAST India-Pakistan-Ceylon and Burma Outward Freight Conference AFRICA -James Pendleton, Chairman. United States Atlantic & Gulf, South and East African Conference AUSTRALIA -James Pendleton, Chairman. United States Atlantic & Gulf/Australia-New Zealand Conference -Marcus Rough, Chairman. APPENDIX B THE SUBPOENA POWER OF THE Federal MARITIME COMMISSION UNDER S. 3446, THE PROPOSED MERCHANT MARINE ACT OF 1966 Section 1304 of S. 3446 (p. 53) relates to the subpoena of witnesses and the production of evidence and reads, in its entirety, as follows: "(a) For the purpose of any investigation which, in the opinion of the Commission, is necessary and proper in carrying out the provisions of this title, any member of the Commission, or any officer or employee thereof designated by it, is empowered to subpena witnesses, administer oaths and affirmations, take evidence, and require the production of any books, papers, or other documents which are relevant or material to the matter under investigation. Such attendance of witnesses and the production of such books, papers, or other documents may be required from any place in the United States or any territory, district, or possession thereof, or the Commonwealth of Puerto Rico, at any designated place of hearing. Witnesses summoned before the Commission shall be paid the same fees and mileage that are paid witnesses in the courts of the United States. "(b) Upon failure of any person to obey a subpena issued by the Commission, it may invoke the aid of any United States district court within the jurisdiction in which such person resides or carries on business in requiring the attendance and testimony of witnesses and the production of books, papers, or other documents. Any such court may issue an order requiring such person to appear before the Commission, or member, officer, or employee designated by the Commission, there to produce books, papers, or any other documents, if so ordered, or to give testimony touching the matter under investigation or in question. Any failure to obey such order of the court may be punished by such court as a contempt thereof. Any process in any such case may be served in the judicial district wherein such person resides or wherever he may be found." By its terms, this section would empower the Federal Maritime Commission to issue subpoenas "for the purposes of any investigation which, in the opinion of the Commission, is necessary and proper in carrying out the provisions of this title".1 Presently, Section 27 of the Shipping Act empowers the Federal Maritime Commission to issue subpoenas "for the purposes of investigating alleged violations" of that Act and the Intercoastal Shipping Act. As is apparent, Section 1304 would greatly expand the Commission's subpoena authority beyond what was conferred by Congress in Section 27. The reasons why Section 1304 is cast in the terms proposed are not difficult to discern. The section conferring subpoena powers on the Federal Maritime Commission drafted by Pike and Fischer appeared as subsections (a) and (b) of Section 7104 of the Committee Print (pp. 196-98). Owing to the uncertainty of Pike and Fischer over the present state of the law on the Commission's subpoena power, as is reflected in its notes to Section 7104, subsections (a) and (b) thereof overlapped and were listed as alternatives. Subsection (a) properly incorporates Section 27 of the Shipping Act and is, as Congress had intended, limited in application to investigations of "alleged violations" of the activities proscribed in the Shipping Act and the Intercoastal Shipping Act. Subsection (b), on the other hand, is purportedly based on Section 214 of the Merchant Marine Act of 1936. Like Section 1304, Section 7104 (b) would, for the first time, empower the Federal Maritime Commission to issue subpoenas "for the purpose of any investigation which, in the opinion of the Commission, is necessary and proper.' It is clear from these words of subsection (b) and Section 1304 that the Commission could issue subpoenas regardless of whether it was doing so in connection with some statutory violation. Seemingly, subpoenas could be issued during "informal" investigations in which affected parties need not be informed of the precise issues under examination, and, owing to the broad language of the provision, subpoenas might even be issued to foreign governments during investigations of their activities under section 1301 of the proposed Act. As enacted in 1936 and amended in 1938, Section 214 (a) of the Merchant Marine Act, like Section 7104(b) and Section 1304 (a), empowered the regulatory agency to issue subpoenas "for the purpose of any investigation which, in the opinion of the Commission, is necessary and proper in carrying out the provisions of this Act" The "Act" referred to in Section 214 (a) was the Merchant Marine Act of 1936; Section 214 did not, in any respect, apply to the Shipping Act or to the Intercoastal Shipping Act. The "title" alluded to in this quotation is Title I of the proposed Act which effectively incorporates the substantive provisions of the Shipping Act and the Intercoastal Shipping Act. |