nity may offer in contrast to the common carrier liners which operate with regular advertised sailings on a fixed schedule between prearranged termini. Each voyage of a tramp is a matter of special arrangement between shipowner and shipper. Tramps are therefore contract rather than common carriers. The world economy would wither away were it not for the work of the tramps that carry their bulk cargoes of grain, sugar, ore, oil, cotton, coal, lumber, fertilizer, and other raw material when and where needed in shipload lots.

The tramp fleet of the American merchant marine is unfortunately in a very depressed and constantly declining condition. Despite repeated pronouncements by Government officials of the absolute necessity of having a strong and vital American tramp fleet, very little is actually being done to promote the development and maintenance of such a fleet to function in conjunction with the American-flag liner fleet in accordance with the purpose and policy of our shipping statutes. The Cargo Preference Act, which is embodied as section 901 (b) of the Merchant Marine Act of 1936, as amended, has been so administered that American-flag tramps are not assured of the same amount of U.S. Government aid cargoes as are shipped on foreign-flag tramp vessels and, within the past few years, several American-flag tramp operators have gone bankrupt carrying these cargoes which Congress set aside to aid them. Although more than 85 percent of the total foreign oceanborne commerce of the United States is now carried by tramp vessels, it is little wonder that less than 5 percent of our export and import bulk tonnage is being carried on American-flag ships rather than the at least 50-percent participation which is envisaged as a minimum goal by our basic shipping statutes.

Foreign-flag tramp vessels are proliferating at a rapid rate because of the constantly expanding world tramp commerce while, due to the cost-differential, no American-flag tramp ships have been built in recent years. For example, the cost to build a ship in the United States is about twice the cost of building the same ship in Japan, which is now the leading shipbuilding country in the world, and about two-thirds greater than the cost of building it in the United Kingdom. Indeed, it appears that no new American tramp construction is conceivable unless the present policies pursued by the Maritime Administration are altered, and it is unrealistic to assume that any company operating American-flag vessels in the foreign commerce of the United States can continue to exist on a longrange basis without some more meaningful measure of governmental assistance. Next to the Cargo Preference Act, the vessel Exchange Act is the most important single piece of legislation that has been made available to the tramp operator. This statute has afforded to the American tramp operator a method for upgrading and improving his vessels. During its 5-year existence, the exchange program, as administered by the Maritime Administration's Office of Property and Supply, although not a panacea for our problems, has proven itself to be the only existing avenue open to the tramp owner desiring to acquire more competitive and more economic vessels. In this short 5-year period and after a rather slow beginning, 52 reserve fleet ships have been traded out to private shipowners. Broken by type the traded-out ships are as follows: C-4, 22; C-3, 3; C-2, 14; Victory, 13.

The Vessel Exchange Act has been a demonstrable success in improving the type and suitability of vessels operating in the tramp trade under the U.S. flag and which will be available for immediate national defense purposes. It has also provided a considerable amount of work for domestic shipyards and their employees, both in placing the vessels in class and in improving and converting many of the traded-out vessels.

Should the Vessel Exchange Act be allowed to expire, the Maritime Administration would have care and custody of a reserve fleet comprised of about 1,600 idle vessels which is increasing constantly in quality as the subsidized lines turn in their older vessels as credit toward the construction of new vessels. In all likelihood, these vessels would never sail again and under existing laws could only be disposed of for scrapping. It would be an improvident waste of capital goods from both the commercial and national defense point of view to have superior vessels laid up in the reserve fleet rather than being in active operation. Certainly, it is consistent with our economy and our maritime policy that we should not be foreclosed from utilizing where feasible the valuable assets in this great maritime wasteland.

May I note 1 further pressing problem facing 11 unsubsidized operators. not all of which are members of this association, who have firm applications pending at the Maritime Administration for the exchange of war-built vessels. These applications are in various stages of administrative processing, with the

shipowners having in good faith made plans and important decisions relying upon the continued integrity of the program. If the act should abate on July 5, a tremendous amount of work on the imminent exchanges may be rendered useless. In fact, it may have been worse than useless since the applicants might have passed up other commercial opportunities in the meantime based upon what they regarded as firm commitments to the Government.

We support that the request of bulk food carriers but suggest that any tanker vessels traded out for use in the domestic trade for the carriage of bulk foods should be restricted to the domestic trade and should not be employed in the tanker trade for their economic lives.

On behalf of the association and myself, may I express our appreciation for this opportunity to urge the committee to report favorably and promptly on S. 2069. Should there be any questions which the committee may bave, I shall be pleased to attempt to answer them.

American Tramp Shipowners Association, Inc., deadweight tonnage, June 5, 1965 AMERICAN FOREIGN STEAMSHIP CO., INC.

American Tramp Shipowners Association, Inc., deadweight tonnage,
June 5, 1965—Continued

Senator BARTLETT. Now we will proceed to take testimony on S. 1917. The first witness is Phillip S. Hughes, Assistant Director for Legislative Reference, Bureau of the Budget.

STATEMENT OF PHILLIP S. HUGHES, ASSISTANT DIRECTOR FOR LEGISLATIVE REFERENCE, BUREAU OF THE BUDGET; ACCOMPANIED BY PIERRE S. PALMER, CHIEF, HOSPITALS BRANCH Mr. HUGHES. Thank you, Mr. Chairman. Mr. Pierre Palmer is with me, also from the Bureau of the Budget, Hospital Branch. Senator BARTLETT. Thank you.

Mr. HUGHES. I have a very brief prepared statement, Mr. Chairman, and I would like to read it, if I might.

Senator BARTLETT. Certainly.

Mr. HUGHES. Mr. Chairman and members of the subcommittee, we are here in response to the subcommittee's request to discuss S. 1917, to amend the Merchant Marine Act, 1936, in order to protect and promote the health of seamen on vessels of the United States, and for other purposes.

S. 1917 is intended to prohibit the transfer or assignment of any responsibility or function of providing medical, surgical, and dental treatment and hospitalization for seamen and other Public Health Service beneficiaries to any other department or Government agency, or the termination of such service at any Public Health Service institution, hospital, or station without the consent of the appropriate committees of the Congress.

Four Attorneys General, including Attorney General Katzenbach, have held that legislative provisions vesting in congressional committees the power to approve or disapprove action of the executive branch are unconstitutional. The constitutional objections to such procedure were stated many years ago in 1933 by Attorney General Mitchell as follows:

The Constitution of the United States divides the functions of the Government into three great departments--the legislative, the executive, and the judicial-and establishes the principle that they shall be kept separate, and that neither the legislative, executive, nor judicial branch may exercise functions belonging to the others. The proviso in the *** (instant) *** bill violates this constitutional principle. It attempts to entrust to members of the

legislative branch, acting ex officio, executive functions in the execution of the law, and it attempts to give to a committee of the legislative branch power to approve or disapprove executive acts * *.

In recent years Presidents have on numerous occasions protested bills with similar effect. In 1954, Congress passed a bill to authorize the transfer to the State of Florida of federally owned lands situated within Camp Blanding Military Reservation with a provision in the bill requiring that prior to the consummation of the agreement of conveyance, the Secretary of Defense or his designee

shall come into agreement with the Committees on Armed Services of the Senate and of the House of Representatives concerning the terms of such agreement. President Eisenhower vetoed the bill because of the presence of this "come-into-agreement clause."

President Johnson's recent disapproval of S. 327 reflects a similar concern over a provision different in form but with the same effect. In addition to the constitutional objection to S. 1917, we believe it would inhibit orderly and efficient administration. We believe it essential that the President have the necessary flexibility to respond to changing circumstances. The closing or relocation of facilities often may be a necessary part of plans for providing improved and efficient services. The proposed amendment could cause undesirable and perhaps costly delays in the relocation and consolidation of facilities. This, in turn, runs counter to the administration's commitment to high quality and efficiency in the Government's operations.

Accordingly, the Bureau of the Budget recommends that the Congress not enact S. 1917.

That is all of my statement, Mr. Chairman. We would be glad to do whatever we can by way of answering questions.

Senator BARTLETT. What is S. 327?

Mr. HUGHES. S. 327 was the west coast flood bill.

Senator BARTLETT. Do you know what the plans of the administration are with respect to the treatment of seamen in these Public Health hospitals? Are alterations, changes, under contemplation, or have they been ordered?

Mr. HUGHES. There is underway the implementation of a plan under which the five largest Public Health Service hospitals would be improved, would be expanded and modernized, with, I believe, expanded teaching and research facilities. Other smaller hospitals, seven, would be phased out over a period of time, with the patients that have heretofore been taken care of in those hospitals cared for primarily in Veterans' Administration or in Defense hospitals that would be nearer to the seamen or other patients being served.

Senator BARTLETT. Which hospitals are to be closed?

Mr. HUGHES. The two in the near future are Memphis and Chicago, and I would like Mr. Palmer to name the others.

Mr. PALMER. The other five are Boston, Norfolk, Galveston, Savannah, and Detroit.

Senator BARTLETT. Each of those last five is obviously a seaport of considerable importance. How is it proposed that seamen who are ill or who have been injured shall be treated in those places?

Mr. PALMER. They would use the Veterans' Administration hospitals in those locations, or in the case of Galveston, they would use the Houston VA hospital.