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The Merchant Marine Act of 19361 empowers the federal government to grant operating-differential subsidies2 to certain qualified ocean carriers. Before a subsidy contract can be granted or amended, the Maritime Subsidy Board, the department within the Maritime Administration that is in charge of administering such subsidies, 3 must hold hearings to determine, inter alia, whether "the service already provided by vessels of United States registry is inadequate ' 4 on the trade route in question. This determination is necessary to " 'avoid subsidizing a trade when the trade is already adequately served by U.S.-flag carriers' "S-a situation that could lead to undue competition between subsidized and unsubsidized carriers. 6

Approval of Operating-Differential Subsidies under Section 605(c) of the Merchant Marine Act of 1936: A New Standard for "Adequacy"