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In addition, present procedures are lengthy and drawn out, involving considerable delays, which result in financial hardships and losses to shipowners who cannot more their vessels until all procedures have been completed. Proposed procedures

If all of the marine documentation functions are centralized in a single agenerThe Department of Transportation, present duplication of both time and effort would be eliminated, and the entire surrender and issuance of marine documents could be handled at one time and in one place. It is estimated that one-half manyear of direct time is utilized annually for review, typing, filing, etc., incident to the processing of these applications within the Maritime Administration. In addition, it is estimated that probably the equivalent of one man-year of indirect time is required for support activities, such as legal clearance, approvals of heads of offices, affixing the seal, duplicating, distributing, corresponding with shipowners, etc.

With respect to benefits to the shipowner, it is noted that he would be able to surrender his old documents and obtain new ones by filing one application or request with one agency at the home port of the vessel, and the present requirement de be eliminated. This will free the shipowner from unnecessary delay and enable the savings of both time and money. Thus, if a vessel has incurred damage on 8 voyage or during unloading, requiring repairs which will result in tonnage or structural changes necessitating new documentation, he will be able to take care of all legal requirements at his home port, without awaiting action by the Maritime Administration in Washington, whose functions in respect to marine documentation are said to be purely administrative, perfunctory, and minor in importance.


Professional Staff Member
Chief Clerk and Staff Director

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Senator RIBICOFF. Mr. Seidman, you may come forward.



Mr. SEIDMAN. Mr. Chairman, I am accompanied by Adm. Nark
Whalen, Chief of Staff of the Coast Guard on my right, and Mr.
Notariani of the General Counsel's office of the Maritime Administra-
tion on the left.

Senator RIBICOFF. Admiral, was the Transportation Department one of the effects promoting you from captain to admiral?

Admiral WHALEN. No, sir; I was Chief of the Coast Guard prior to the implementation of the law.

Mr. Seidman. Mr. McIntyre was supposed to be here. I think he probably will be. Something happened on his transportation. Admir: Whalen and Mr. Notariani will be available to answer any questions

Mr. Chairman, I have a brief statement and with your permission I will proceed.

you may have.

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1 prescribes the conditions under which such marine documents must COBI of documents and issuance of new documents, if required, are also

I appreciate the opportunity to testify before this subcommittee in se support of Reorganization Plan No. 1 of 1967, which the President Ducati

transmitted to the Congress on February 27, 1967.

The reorganization plan provides for the transfer of the authority to approve

the surrender of certain ship documents from the SecreDi tary of Commerce to the Secretary of Transportation. The objective e dont of the plan is to centralize in a single Federal agency responsibility s for administering the Federal Government's vessel documentation


I believe it would be useful if I first explained in more detail the

procedures involved in the surrender of ship documents, in order to mpicat clarify the problem which Reorganization Plan No. 1 is designed to

eliminate. It should be noted that the functions relating to documen

tation which I will describe are at this time largely carried out by text the Coast Guard, under authority of the Department of Transportain z tion Act. They were transferred to the Coast Guard from the Bureau

of Customs on February 24 of this year by the Secretary of the Treasury. (Treasury Department Order No. 167–81, Feb. 2, 1967).

Under existing laws, marine documents are granted and issued to

vessels of U.S. ownership. A marine document means a certificate 9 Lissued when a vessel is registered, enrolled, and licensed under the

laws of the United States. The Coast Guard, through its regulations,
be surrendered. There are some 15 such conditions. Documents must
be surrendered, for example, when-

A vessel is sold or transferred;
The owner of a vessel dies;
The tonnage of a vessel is changed; or

The name of a vessel is changed.
Although the circumstances under which a marine document is sur-
rendered are prescribed by the Coast Guard and the actual surrender


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administered by the Coast Guard, the law provides that in two types of cases the marine documents of a vessel cannot be surrendered without the approval of the Secretary of Commerce. Thus, in the case of

(1) vessels covered by a preferred mortgage, or (2) vessels belonging 2 to the U.S. Government, approval of the Secretary must be obtained

before the marine document can be surrendered. The Secretary's functions are carried out by the Maritime Administration.

This requirement means that the shipowner must go through a complicated and cumbersome administrative routine in order to surrender a ship document and comply with the legal requirements.

First, the owner must apply for and obtain from the Coast Guard a
Certificate of Ownership of Vessel.

Second, a number of Maritime Administration forms must be filled out by the owner stating the reason for surrendering the marine documents, showing the mortgagee and his consent to the change, and supplying related information. A charge of $15 is made for processing the application.

Third, the forms must be examined and reviewed by the Maritime Administration and additional forms of approval must be prepared and executed by the Maritime Administration.

Finally, the approval forms are returned to the owner for submission to the Coast Guard for appropriate registry, enrollment, and

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license change.

Clearly, this procedure is unnecessarily complex. It is the result of outmoded patterns established well over 45 years ago under the Ship Mortgage Act of 1920. Procedures established at that time have remained unchanged through the years, despite several changes in the organizational location of the functions involved. Thus, under current arrangements, the Secretary of Commerce retains the responsibility for approving the surrender of documents. All other documentation functions pertaining to registry, enrollment and licensing of vessels, the recording of sales, conveyances, and mortgages of vessels, and the issuing of new marine documents for vessels are in another Department entirely, the Department of Transportation, where they are administered by the Coast Guard.

The result of this divided responsibility is expense, delay, and inconvenience for the public and duplication and inefficiency on the part of the Government. The shipowner finds that he must deal with two separate agencies on a matter which is essentially the responsibility of only one. The Maritime Administration review of these applications is only perfunctory and minor, since the functions involved are, in fact, part of the documentation responsibility of the en Department of Transportation. The Maritime Administration, how

.. un ever, must maintain unnecessary records, and review applications de and prepare approval forms, all of which could be done more efficiently by the Department of Transportation.

In transmitting this plan, the President stated:

This is not a major reorganization plan. But it is important. It is part of our larger effort to streamline the Government, to make its operations as efficient as possible, and to enable it to provide better service to the citizens and businessmen of this country.

If the plan is allowed to take effect, new procedures can be established which will be of benefit to those concerned. A shipowner will be able to surrender old ship documents and be issued new ones by filing only a single application. There will be no need for the shipowner to forward a variety of documents to the Maritime Administration, and wait for the Maritime Administration's approval. New document ments can be issued without delay once the shipowner has complied with the requirements of the law.

In many cases, this will mean real savings to the shipowner. The saving of time in the approval to surrender a marine document can be very important to a shipowner in turning his vessel around without a delay. For example, in a case in which a vessel might be slightly altered so that it is no longer of the description set forth in its document, a delay in departing while awaiting approval for surrender of the old document may cost the shipowner thousands of dollars.

There will also be some savings to the Government by eliminating duplication of time and effort. The Maritime Administration will no longer need to review applications for the surrender of documents and will save an estimated one to two man-years of direct and indirect effort. The number of cases reviewed each year is shown by the follow: ing workload statistics on approval of vessels covered by preferred mortgages: 1963-528; 1964-300; 1965-366; 1966–322. The other category of cases--vessels owned by the 'U.S. Government-is relatively rare, with only 26 approvals granted in the last 6 fiscal years.

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Within the Department of Transportation, the elimination of effort in preparing various forms for the shipowner and the Maritime Administration will also increase efficiency and lower costs.

It is important to note that the proposed transfer will in no way affect the other functions which the Maritime Administration carries out under the Merchant Marine Acts and Shipping Acts. The transfer will not, for example, affect or change the authority of the Maritime Administration to approve the transfer of Us. citizen-owned American-flag vessels to foreign ownership and/or foreign registry:

In summary, the objective of this plan is to insure that the marine documentation functions of the United States will be concentrated in a single agency. The resulting administrative changes will help to meet the objective established by the President “to explore every path in our quest to provide the best possible service for our individual citizens." As a result of the plan, service to the maritime industry will be improved. I recommend that Reorganization Plan No. 1 be allowed to become effective. Thank you very much, Mr. Chairman. Senator RIBICOFF. Thank you very much, Mr. Seidman. As I understand it, under existing law, all functions relating to marine documents are now under the jurisdiction of the Secretary of Transportation, except approval of surrender of ship documents issued for commercial vessels covered by preferred mortgages owned by the United States. Mr. SEIDMAN. That is correct, Mr. Chairman. Senator RibicoFF. It is also my understanding that as passed by the Senate, the Department of Transportation Act provided for the same transfer from the Secretary of Commerce to the Secretary of Transportation as would be accomplished by Plan No. 1, but, however, in conference all matters relating to maritime transfers were deleted, which let this lapse; is that correct?

Mr. SEIDMAN. That is correct. Senator RIBICOFF. Now, under existing laws and procedures, can a shipowner, who is required to surrender ship documents, and obtain new papers, do all of this at his home port or does he have to go to the regional office in Washington? Mr. SEIDMAN. I would like Admiral Whalen to answer this question. Admiral Whalen. Under the present procedures, sir, the item can be consummated at the particular port where he starts the administrative procedure.

Senator RIBICOFF. And he can continue to do that under the present reorganization plan. He doesn't have to come to Washington. He can do this at his home port. Admiral WHALEN. That is correct sir. Senator RIBICOFF. How about the surrender approval?

? WHALEN Senator RIBICOFF. Yes. Admiral WHALEN. I would like to ask Mr. McIntyre relative to that particular question, sir.

Mr. MCINTYRE. Thank you. Senator, as I understood your question, it was could the surrender be effectedSenator RIBICOFF. At the home port. Mr. MCINTYRE. At the home port or at any port, or must it be done in Washington? Senator RIBICOFF. That is right.

may be.

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Mr. MCINTYRE. The procedure, and I am sure the Coast Guard intends to follow the same procedure--the procedure we had was that the documents could be surrendered at any port, wherever the vessel

Senator RIBICOFF. But the approval has to be in Washington? It has to be approved in Washington by the Commerce Department now?

Mr. MCINTYRE. Now, yes it does. Application must be made at Maritime in Washington.

Senator RIBICOFF. Couldn't the authority be given to whomerer is in charge of the home port? Why does it have to go to Washington? In other words, let's say it is done in San Francisco or New Orleans. Why couldn't the final papers be approved in New Orleans or San Francisco, instead of transferring them to Washington?

Admiral WHALEN. Senator, if I may state, sir, if this is approved. that would be the procedure that would be followed. The Coast Guard is making no changes whatsoever in the established procedures that he customs had, and as Mr. McIntyre said, doing the operation locally for the convenience of the shipper.

Senator RIBICOFF. But the whole procedure could be done locally, when this reorganization plan went into effect. You could do the whole thing locally. Admiral WHALEN. The answer is "yes," sir.

Senator RIBICOFF. Without having to come to Washington for final approval.

Admiral WHALEN. That is correct, sir.

Mr. SEIDMAN. That is, I might add, one of the major purposes of this reorganization plan-to avoid the necessity of having the shipowner go to another agency. He had to go locally, as I understand it at present, to Coast Guard, to get a certificate of ownership, and then he has to get forms from the Coast Guard which he then fills out and sends to the Maritime Administration in Washington.

Senator RIBICOFF. You see, I think there are two functions that we should be concerned with in Government, especially those of us in the legislative branch. Not only are we interested in efficiency and economy, but we are also concerned that our bureaucracy is getting too big. All these governmental agencies grow at such a pace that it becomes more and more complex and difficult for the average citizen to deal with the Government. Certainly the more we can localize and complete these ships' documents transfers at the place where ship may dock or a person may live, I think the better off we are as a Government and the better off the people are and the Nation who have to deal with the Government. I say this for all cases in which an individual has business to do with his Government. Mr. SEIDMAN. I agree completely with you.

Senator RibicoFF. What are the present procedures, and what would they be under the proposed transfer?

Mr. SEIDMAN. The present procedure, and Mr. Notariani can correct me, is that a shipowner goes to the Coast Guard office in the port area where the ship is located.

Admiral WHALEN. That is right.

Senator Ribicoff. Who is usually in charge at a port office? Is it a captain, is it an admiral, or does it depend on the size of the port? How is this usually worked?

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