1938: Shipbuilding And Shipping

In the United States the year 1938 was marked by the placing of the first contract in 15 years for the building of an American cargo vessel for the American transoceanic trade. In its Survey of the year, the United States Department of Commerce notes: 'National defense programs were assuming increasing importance, and the rebuilding of the merchant marine was affording support to the durable-goods industries.' The statement covers the whole topic — the renewed interest in shipyards and shipbuilding, both naval and commercial; the part that shipbuilding has played as consumer to a vast number of other industries, being thereby an important factor in business revival.

New Legislation and Government Initiative.

Recent legislation has pulled together in certain respects naval and commercial interests, making the merchant marine and commercial shipyards potential servants of the national defense. Steps toward this were the following:

Jan. 10, 1938. Joseph P. Kennedy, Chairman, United States Maritime Commission, announced that subsidy agreements had been concluded with 7 shipping companies to build 20 ships before 1942 — 14 of these ships to be started in 1938; and that, in addition, the Commission was requiring the companies to develop plans for constructing 23 more ships. This move in the effort to recapture shipping business for the United States was calculated also to give the shipyards work in a workless period and to keep a technically trained personnel in practice, ready to serve any national emergency.

June 23. President Roosevelt signed the bill amending the Merchant Marine Act of 1936. This Amendment broadens the powers of the Maritime Commission, allowing it to aid privately owned American shipping in foreign trade and to add to its own regulating powers over vessels in domestic trade. The new provisions apply also to shipbuilding and to labor problems in the shipyards, on the waterfront, and abroad. Their enactment restored confidence to shipowners and operators, and shipbuilding contracts multiplied. The bill, officially 'Public, No. 705, approved June 23, 1938,' may be summarized as follows:

The Maritime Commission is authorized to acquire, by purchase or otherwise, such vessels constructed in the United States as it may deem necessary to establish, maintain, improve, or effect replacements upon any service, route, or line, in the foreign commerce of the United States, and to pay for same out of its construction funds. The Commission is given permission to initiate action affecting changes in minimum labor standards prescribed by it. Complaints by either officers or crews are to be made to the Maritime Commission.

The formula for construction differential subsidies is defined. It is provided that the differential shall not exceed 33 1/3 per cent of the construction cost, with exceptions permitted up to 50 per cent.

The Government may aid in financing the construction of ships operated in the domestic trade and may pay for national-defense features in such construction. By unanimous consent of the Commission, subsidies in excess of the normal limits may be paid when such payments are needed to offset governmental aid paid to foreign competitors.

The base period for recapturing profits from operating differential subsidy contracts is changed from 5 to 10 years.

The section of the 1936 act which cancels a contract in the event a holder has filed a petition in bankruptcy is repealed.

The Commission may pay operating subsidies to a charterer of its vessels. Regulations for the purchase of the chartered vessel by the charterer are provided. Also set down is the method of determining the purchase price the Government would pay for a ship on which a construction differential subsidy has been paid.

The Intercoastal Shipping Act, 1933, is amended to provide that the Maritime Commission shall have power to stabilize and to prevent the establishment of any unreasonable rates. A new system is authorized to be set up by the Maritime Commission for training all licensed or unlicensed personnel now in service in the merchant marine.

The Amendment adds to the Merchant Marine Act a provision for the handling of labor relations on board ship and on water front. Meantime, employers and their employees are directed to exert every reasonable effort to make and maintain agreements and to settle their differences in conference. Provision is made for the creation of a Maritime Labor Board to submit to the President and the Congress, on or before March 1, 1940, a comprehensive plan for the establishment of a permanent Federal policy for the stabilization of maritime labor relations.

The Maritime Commission may engage in insurance of ship mortgages under procedure substantially similar to that now in use by the Federal Housing Administration. It may make such extensions and accept such renewals of the notes and other evidences of indebtedness, transfers, and of the mortgages and other contracts securing the same as may be necessary to carry out the objects of the Act.

A Year's Progress.

In November 1938, the United States Maritime Commission completed the first year of the work it had laid down for itself in the program it submitted to Congress as the result of the required economic survey of the merchant marines. The Commission, which came into being by Act of Congress effective Oct. 26, 1936, to supplant the former United States Shipping Board and the Shipping Board Merchant Fleet Corporation, was by that Act empowered to rehabilitate the country's obsolete and almost worthless merchant fleet. The fleet had been built with a minimum of foresight and a maximum of haste. It was a World War emergency equipment, to carry cargo or transport passengers (for which the country had too long relied on the ships of foreign lines) or to masquerade as auxiliary ships of the Navy. Twenty years being old age for a seagoing vessel, replacements were begun as soon as the report, in the form of a program, had been submitted. The Commission's program called for yet wider authority for the Commission, particularly in matters of finance, to be given by amendment of the original Act.

Several projects of the program were realized in 1938: (1) The Merchant Marine Act, as it is popularly called, was amended, giving more power and broader to the Commission; (2) an increase in subsidy payments to shipping lines was effected, for operation and new construction, including those lines — if still in sound condition — that had been awarded subsidies in lieu of Government mail contracts, canceled; (3) new wage scales and reasonable working conditions were made operative both aboard and ashore; (4) a Mediation Board was established, and settled a number of labor disputes; (5) new construction exceeded even that planned, and reconditioning progressed rapidly; (6) development of the 23 new trade routes in the program went as far as two new lines making regular runs and negotiations for a third line under way; (7) two shore training schools for seamen were opened, — one at Hoffman Island in New York Harbor, one on Government Island off Oakland, Calif., — and two famous old sailing vessels were equipped as school ships, with a third nearly ready.

New American Lines Operating.

In October, the United States Maritime Commission installed its 'luxury' liner service to the east coast of South America — its projected trade route No. 1. The Commission began by purchasing and reconditioning 13 of the former Panama-Pacific liners. The first 3 reconditioned were renamed the Brazil, the Argentina, and the Uruguay, and were scheduled to sail every two weeks. The new service, to be called the American Republics Line, was to be operated by the Moore-McCormack Lines to the account of the Maritime Commission, but in 1939 was to be under charter to the Moore-McCormack Company. The Brazil initiated the service by a 'goodwill' trip to the southern continent, stopping at all the principal ports of the east coast. She sailed from New York Oct. 8, carrying only 155 passengers, but 1,534 sacks of mail and 2,158 tons of cargo. Rear Admiral Emory S. Land, Chairman of the Maritime Commission (succeeding Joseph P. Kennedy) pronounced the idea of the new line 'economically sound.' The Brazil was still being fêted at South American ports when the Uruguay sailed the same route for another goodwill trip. She left New York Oct. 22. The Argentina sailed Nov. 5, with a heavy cargo and carrying 170 passengers.

Discussion over Government control versus private ownership had more fuel for its fire when news broke that the Maritime Commission had purchased 90 per cent of the stock of the Dollar Steamship Company, which had announced a reorganization and resumption of service under a new name — The American President Lines. Officials of the line emphasized that it was still a private firm, though operating under control of the Federal Commission. Plans were announced in October for 24 ships, 10 to be ready before the end of the year, and the round-the-world service to be undertaken again. The SS. President Monroe sailed from San Francisco Nov. 4, due in Singapore Dec. 10.

New American Ships and Contracts.

During 1938, the Maritime Commission had under contract or construction 52 ships representing a total of about $130,000,000. On Dec. 1, American shipyards were building or had under contract for private shipowners and for the account of the Maritime Commission 230 seagoing vessels aggregating 518,507 gross tons, compared with 144 vessels totaling 263,000 gross tons on Dec. 1, 1937.

The Commission's construction program for 1939 is heavy — it is estimated that ships on order and those to be ordered during 1939 will involve an expenditure of approximately $140,000,000 for shipyard labor and about $175,000,000 for the purchase of material — and a number of shipyards have been reconditioned to provide additional shipways.

According to Lloyd's Register of Shipping, United States yards received 13.2 per cent of the total of construction for keels laid down in the first 9 months of 1938. And for the same period, according to the report of the National Council of American Shipbuilders, the United States had 9 per cent of the world total in building of merchant tonnage, and 7.4 per cent of the world total of tonnage launched. The total number of vessels launched in 1938 was 1,024 as compared with 1,040 launched in 1937. These vessels made a total world tonnage of 2,649,000 for 1938, as compared with 2,986,000 launched in 1937.

Among the ships of 1000 gross tons or more under construction at the end of 1938 in American yards for American trade were the following:

32 cargo vessels ordered by the United States Maritime Commission, 20 being of the C-2 design; 12 of the C-3 type (492 ft.; 16 1/2 knots; 8 steam-driven and 4 Diesel), two of these latter for construction at a West Coast shipyard. This was the first contract of this sort for a West Coast yard since labor troubles on that coast had upset the confidence of the shipping companies.

16 oil tankers; 12 being of 18 1/2-knot speed, constructed for a private owner by special arrangement between the Maritime Commission and the Navy Department. Two of these, of 18,500 tons each, built at Chester, Pa., are said to be the largest tankers in the world. (See also below: Technical Aspects.)

3 large freighters for the Great Lakes.

3 large ferry boats for New York City for the Staten Island-Manhattan service.

3 passenger-cargo vessels for the Mississippi Shipping Company.

3 passenger-cargo vessels for the Panama Railroad Steamship Company.

4 sea-going passenger-cargo vessels (16 1/2 knots) for the American Export Lines.

The largest passenger vessel being built in the United States is for the United States Lines, under order of the Maritime Commission. It will be larger than either the Washington or the Manhattan and will run with them in the transatlantic trade. This ship is the 35,000-ton America, contracted for Oct. 21, 1937. (See MERCHANT MARINE, AMERICAN.)

New Foreign Ships and Lines.

Among the foreign vessels put in commission, launched, or under construction or contract, in 1938, are the following:

Nieuw Amsterdam.

Nieuw Amsterdam, Holland America Line; maiden voyage, Rotterdam to New York, May 1938. Tonnage, 36,287; length, 713 ft. 7 in.; breadth, 88 ft. 3 in.; depth, 50 ft. First commercial ship to use 'electric eyes' as automatic door openers. The first ship of this line's 2-year building program.

Noordam.

Noordam, Holland America Line. Maiden voyage, arrived New York Oct. 7; 8 1/2 days from Rotterdam. Tonnage, 10,000; length, 501 ft.; breadth, 64 ft.; low built. New design for tourist class luxury. Single and double cabins, each with a private bath.

Zaandam.

Zaandam, twin ship of the Noordam. Successfully tested in December and ready for maiden voyage early in January, 1939. To run with the Noordam.

Oslofjord.

Oslofjord, Norwegian American Line, made her first voyage in June. Tonnage, 16,500; length, 545 ft.; breadth, 73 ft.; depth, 34 ft.

Stockholm.

Stockholm, Swedish American Line; launched in May, at Trieste; to be completed in 1939. Tonnage, 28,000; length, 638 ft. 5 in.; breadth, 83 ft. 2 in.; depth, 38 ft. 8 in.

Mauretania.

Mauretania, Cunard White Star Line; launched in July, at Birkenhead, England; to be completed in May 1939. Tonnage (designer's figure), about 34,000; about 13 ft. shorter, 1 ft. narrower, and 5-7 knots slower than the former Mauretania.

Queen Elizabeth.

Queen Elizabeth, Cunard White Star Line, launched in September at Clydebank, Scotland; to be commissioned early in 1940. Tonnage (builder's figures, 85,000; length, 1,030 ft.; breadth, 118 ft.; depth, 120 ft.). The Queen Elizabeth is the largest ship in the world, 3,765 tons more than the Queen Mary and nearly 65 ft. longer; 1,577 tons more than the Normandie; and about 48 1/2 ft. longer.

The Hamburg-American Line placed an order for a large passenger ship for the Hamburg-New York service.

Japan's largest shipping company announced a proposed shipbuilding program of some 21 vessels. The most important of these is for service to the United States and includes 26,500-ton passenger liners for the run to San Francisco and two 11,400-ton liners to Seattle, while others will be operated on the different routes to Europe and Australia.

Incidents.

On March 22, the United States specified in her note to Japan $2,214,007 as the amount for losses and indemnity, resulting not only in Japan's sinking of the U.S.S. Panay (Dec. 12), but from her destruction of American merchant vessels (3 standard oil ships) in Chinese waters, an indemnity Japan paid in full on April 22.

World Shipping Business.

Ocean transportation, which reached higher levels in 1937, receded during 1938. All types of shipping were affected by the decline in international trade and the consequent decrease in traffic. Rates, which had increased and become somewhat stabilized in 1937, were irregular during 1938. This particularly affected tramp shipping.

On July 1, 1932, 20 per cent of the world's merchant fleet was idle. By Dec. 30, 1938, trade revival had fluctuatingly reduced idle tonnage to about 4.4 per cent.

For July 1, 1938, Lloyd's computed that the tonnage of the world merchant fleet was 66,870,151 gross tons, representing 29,409 ships of all types.

Technical Aspects.

It should be noted that, in both war and merchant vessels, welding is being largely employed. It saves weight, so that, for given dimensions, a welded vessel will carry more cargo and passengers. As for machinery, high-pressure boilers and steam turbines have superseded Scotch boilers and compound and triple expansion engines, while Diesel-engine propelled vessels have on certain runs replaced steam driven.