BILL LIMITS SUBSIDIZED CARRIERS IN US TRADE

BILL LIMITS SUBSIDIZED CARRIERS IN US TRADE

Legislation aimed at preventing American steamship companies subsidized by the government from doing business in domestic trades has been introduced in Congress.

The legislation, offered by Sen. Daniel Inouye, D-Hawaii, would allow subsidized carriers to serve a domestic trade route only if the Department of Transportation found service on that route inadequate.If the agency decided to let a subsidized carrier into a domestic trade, it would have to make sure there is no unfair competition and government funds were not being used to support the domestic operations, according to the terms of the new legislation.

If enacted into law, Sen. Inouye's legislation could hamper attempts by American President Lines Ltd. to enter the Hawaiian trade. It also could affect service on that route currently provided by Sea-Land Service Inc. Both carriers are trying to change the current government subsidy system in a way that would extend new money to Sea-Land.

Matson Navigation Co., San Francisco, is the dominant carrier in the Hawaiian trade. It receives no government subsidies. It has been active in trying to secure legislation to protect its trade.

Philip M. Grill, a Matson vice president, said a "strengthened and modified" standard setting the circumstances in which subsidized companies, especially those with mixed subsidized and non-subsidized services, is needed.

That's "especially true in the context" of efforts to revise and expand the current subsidy program, he added.

A new program could result in subsidized companies "having their cake and eating it, too," Mr. Grill continued.