Statement by the President Upon Signing Bill Amending the Merchant Marine Act of 1936.

I AM today signing a bill which extends for 1 year the Government's authority to subsidize the cost of merchant vessels constructed in U.S.. shipyards.

I would prefer to be signing a measure which completely restructures our merchant marine policy to meet the modern realities of this important industry. After more than 30 years of direct and indirect subsidy, under the Merchant Marine Act of 1936, the United States finds itself with an outmoded merchant fleet whose survival is almost wholly dependent on continued and ever-increasing Federal support.

Last May, after several years of very careful study, the administration proposed legislation to revitalize the merchant marine. History will show that these were desirable objectives, and necessary for the well-being of future generations, even if they were not faced up to resolutely in our day. The proposed program would:

--completely reorient construction subsidies and relate them directly to our national security needs for shipbuilding capability;

--institute a more flexible operating subsidy program to provide incentives to management to cut costs and improve the fleet's competitive position;

--permit ship operators to purchase new vessels in the world market at competitive prices to modernize the fleet more rapidly;

--expand maritime transportation research to stimulate technological innovations;

--place the Maritime Administration within the Department of Transportation to promote an integrated national

transportation system.

The Congress has not dealt with the maritime problem in the comprehensive manner proposed by the administration. Yet, it is clear beyond any doubt that piecemeal legislation represents only a temporary palliative to a deteriorated situation. We have passed the point where legislative patchwork is profitable. We need to act boldly in this area.

I am signing this bill with the hope that the next Congress will use the time gained to get on with the vital task we have placed before it.