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or the Middle East--merchant shipping could be a very importan
in the
blocked
were
Canal
Suez
the
if
,
instance
What would we do, for
course of a limited war in the Middle East?
Mr. Brundage pointed out that the current cost of replacing
.
an obsolescent vessel was now four times as great as it had been when
ents
the program began. Mr. Gray commented that to meet the requirem
of the Joint Chiefs, there would have to be a program of building 60
new merchant vessels each year. We would have to anticipate expenditures of $300 million a year for the next 20 years if the program were
approved on the basis of the JCS requirement of 1200 vessels. These
were the budgetary implications of the current requirements estimated
by the Joint Chiefs.
Mr. Brundage continued by pointing out that American seamen
were paid mich more than the seamen of other countries. This adds to
the level of the subsidy required by the U. S. Merchant Marine Act.
Mr. Brundage believed that the Government could save a considerable
amount of money if we were permitted to build our merchant vessels in
foreign shipyards and were permitted to operate these vessels under
the Panamanian flag.
Secretary Quarles stated that while it would create domestic
(
political difficulties if we were to build our merchant vessels in for-
-
eign yards, there would be, nevertheless, considerable advantages in
other respects if this could be done. Mr. Brundage said that he had
this matter very much on his mind.
Essentially, however, whet was
bothering him at the moment was the definition of what constituted
an adequate J. S. merchant marine fleet.
:
The President inquired how much money we had spent on our
merchant marine program in FY 1957. Mr. Brundage replied that we had
put nothing in it in that fiscal year. The crux of the problem was
that we were now undertaking to start a new program, for which Mr.
Bruneeee gave the estimated funding requirements for FY 1960 and
FY 1961.
The President said he thought it necessary to ask a couple
of pertinent questions. What we needed to calculate was how much
shipping would te needed by the Free World states in the event of
war, and thereafter how mch of this over-all need would have to be
met by the United States. From the military viewpoint, we need to
take into consideration all available Free World shipplog resources,
and not only the resources available to the United States. Such an
approach to the problem of shipping requirements would not only assist the economtes of other Free World nations; it would also cut our
cwn U. &. costs and make possible a more moderate U. S. shipbuilding
progran.
FERECUR
aT, 5
Coane ANSI be :