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12 IV. KEY CONCLUSIONS AND RECOMMENDATIONS A. PRIMARY CONCLUSIONS 1. In the next ten to fifteen years, by far the greatest percentage of U. S. inter- national tonnage, both of commercial and military traffic, will be carried by sea. 2. United States' control of sufficient merchant shipping to strengthen the economy of the free world and to meet minimum needs during a political-economic conflict is required: (a) as a military resource if armed conflicts break out, (b) as a means of exerting positive economic pressures against the Sino- Soviet Bloc, (c) as insurance against loss of shipping through realignment of allied or neutral maritime nations, (d) as a means of maintaining access to essential raw materials, and (e) as a means of protection against exorbitant shipping rates. 3. In the range of possible war situations, by far the most important to U. S. maritime capabilities is the expanding political-economic conflict. 4. Since World War II the United States has carried a decreasing percentage of its own maritime trade. Although not losing ground in terms of total tons of dry cargo carried, the United States has lost ground in total tanker liftings. At the same time, total lift requirements for both dry cargo and petroleum products are greater. A continuation of this trend is unacceptable to the needs of national security. 5. Full cooperation on the part of management, labor, and technology can provide the United States with a fleet of merchant vessels which will ensure vital lines of communications and will be economically competitive. 6. When such a fleet Is built, It should satisfy almost all foreseeable military requirements for a merchant marine except for special military vessels designed for "no port" operations. 7. Full implementation of these recommendations may require revision of the Merchant Marine Act of 1936.

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13 B. SPECIFIC CONCLUSIONS AND RECOMMENDATIONS 1. Conclusion As a logical successor to the Mariner class, a new prestige class of cargo vessels emphasizing speed and highly mechanized cargo-handling and ship-operating features should be incorporated in the U. S. merchant fleet. Prerequisite to the successful operation of this fleet is the improvement of labor-management practices and relief from statutory and regulatory restrictions on ship design and operations. Recommendations (a) The Maritime Administration should initiate the design of a new class of cargo vessels of advanced design with speeds in excess of 20 knots and incorporating the following features: (1) Use of a unitized system of cargo handling embodying increased mechanization and permitting auto- mation, to reduce stevedoring costs and allow quick turnaround of the ship; (2) Increased mechanization and some automation of the ship operation, both on the bridge and in the engine room, to reduce crew. Cargo concentration procedures which reduce ship calls at multiple domestic and overseas ports should be adopted in conjunction with the above features. (b) Plans should be made to effect the construction of a class of at least six vessels of the design recommended; the Maritime Adminis- tration should persuade U. S. flag operators to add these ships to their regular fleets. (c) As a first step the Maritime Administration should assemble the facts underlying restrictive labor-management practices, and regu- lations inhibiting the development of a high performance, economical merchant fleet, including the rules of admeasurement, load lines, etc. (d) Following the presentation of these facts, the Departments of Commerce and Labor should take the initiative in recommending new legislation and labor-management practices. 2. Conclusion A very substantial portion of U. S. -controlled shipping is now under "flags of convenience". If current efforts to negate this arrangement are successful a flight of substantial dimensions will ensue, removing thereby a dangerously high proportion of currently available tonnage from effective U. S. control. Recommendation The United States Government should make every effort to ensure the continuance of the "flags of convenience" agreements.

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14 3. Conclusion The present system of subsidies may be adequate to permit profitable commercial operation of automated and unitized cargo ships at speeds as fast as 30 knots (depending on range and schedule). A limited number of unsubsidized ships might be economically feasible at premium freight rates. Recommendation Further consideration should be given to the construction of additional high speed (greater than 30 knot) passenger ships, and to the development and construction of a limited number of cargo ships of such speed, for possible independent operation to provide rapid response on outbreaks of war. 4. Conclusion It is technically feasible to build a 40-knot cargo ship for a 3000 to 4000 mile range. Speeds above 40 knots do not appear to be even technically feasible in the near future. The 40-knot cargo ship, even under present subsidy procedures, is not economical from a commercial standpoint. 5. Conclusion At least through 1965, subject to the continued operation of U. S. -owned shipping under "flags of convenience, " there will be no quantitative deficiency of U. S. -controlled merchant shipping for support of limited war. 6. Conclusion U. S. -controlled merchant shipping is qualitatively deficient for optimum support of civilian and military requirements in a limited war owing to deficiencies in speed, age, rates of, and capacities of unloading systems, and lack of "over the beach" capability. 7. Conclusion Within the foreseeable future, a limited war situation may require the deployment of U. S. troops by ship over long distances and such forces may be required to land, along with considerable supplies, under "over the beach" conditions. 8. Conclusion There is a military need under limited war conditions for small (3000 to 5000 ton capacity) high-speed amphibious support ships which are capable of discharging rapidly in small harbors and/or onto beaches. 9. Conclusion There is substantial compatibility between military interest and commercial oper- ation on desirable ship characteristics: rapid cargo handling and turnaround, increased mechanization of ship operation, and increased ship speed.

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15 Recommendation Feasibility and design studies, which delineate aspects of common commercial and military utility should be continued in cooperation with the Department of Defense for special purpose ships. 10. Conclusion The subsidy program which maintains merchant vessels under United States control should be continued until the time its fleet can be made competitive in international trade. 11. Conclusion None of the many diverse elements comprising the maritime industry and the U. S. Government provide the research and development facilities other major industries have found necessary to ensure their competitive position. Because of the complexity of the problem and the conflicting interest involved it seems unlikely that these problems can be solved without the Government taking a major role. At this time, U. S. ship designers do much ship-model testing abroad, frequently in Holland. Recommendation The Maritime Administration should earnestly pursue opportunities for providing coordinated facilities for the conduct of scientific, engi- neering, and economic research in support of the entire maritime industry. The experience of the National Advisory Committee on Aeronautics will offer helpful guidance in this area. 12. Overall Conclusion and Recommendation The principal objective of research and development should be to create a United States merchant fleet which can be self-supporting without subsidy. (Other important conclusions and recommendations of this report appear in the Special Supporting Studies. )