1942: Merchant Marine, American

War Zone Operation.

The American Merchant Marine took a decisive part in the struggle against the Axis Powers during the first twelve months after Pearl Harbor. Construction and operation of supply ships for the unprecedented demands of global transportation became one of the most vital factors for success not only of the United States but of every nation aiding the Allied cause.

Hundreds of thousands of fresh troops had to be transported to theaters of war in Europe, Asia, Africa, Australia, Alaska. From six to fifteen tons of equipment were shipped with every fighting man, depending upon his type of service. Forces already in the field had to be supplied with food and with armaments that were beginning to roll with increasing volume from America's gigantic war industries. Raw materials, such as nitrates, magnesium, jute, and bauxite, had to be imported to supply these industries. It was necessary, meanwhile, to maintain trade with the republics of Latin America, in spite of the encroachment of war upon our very shoreline.

Every ship capable of deep-sea service was shifted from normal to war zone operation. Construction of new vessels was expanded and speeded. Close surveillance of cargo movements was instituted so that every cubic foot of valuable shipping space would be utilized to the best possible advantage. As the demands of the armed forces were intensified, a sharp reduction became necessary in the movement of goods and articles for civilian use. American homes began to go on a war footing when these shortages resulted in the rationing of oil, sugar, and coffee.

With a vast army being transported to military bases all over the world, with civilians adjusting themselves to new conditions, and industry being fully converted to war production, the future of all three depended, as never before in our history, upon the men and ships of the Merchant Marine.

Shipbuilding Program.

Five years ago, after a long period of neglect, the United States had the poorest merchant fleet of the six leading maritime nations. The rebuilding of this fleet was begun with the establishment of the U. S. Maritime Commission by the Merchant Marine Act of 1936.

A shipbuilding program calling for 50 vessels a year for 10 years, to replace over-age vessels, was initiated by the Commission. Delivery of the first ships began in 1939, but as the tremors of war reached America from across two oceans, the shipbuilding program was doubled time and time again until, by the end of 1941, orders had been placed for more than 1,200 steel ships totaling 12,000,000 deadweight tons, to be completed during the two-year period 1942-43.

With the actual outbreak of hostilities, shipping requirements were resurveyed and the already accelerated program was expanded twofold. Early in 1942, two successive additions of 6,000,000 deadweight tons each were made to the shipbuilding effort. By April 2, less than four months after Pearl Harbor, the Maritime Commission had awarded contracts for 2,300 cargo ships aggregating 24,000,000 deadweight tons, of which 8,000,000 tons were scheduled for delivery during 1942, and 16,000,000 tons in 1943. Construction of more than 1,000 special-purpose smaller craft, such as harbor and ocean-going tugs, barges, tankers and dry-cargo vessels for coastal use, was also authorized. These are not included in the deadweight tonnage total.

At the close of 1942 the first year's goal of 8,000,000 tons had been achieved, and out of a total of 3,600 vessels of all types contracted for, approximately 1,200 had been delivered.

Types of Ships.

The original program had been devoted largely to modern, high-speed, dry-cargo vessels and tankers. Several types of cargo carriers developed by the Maritime Commission for service on different trade routes are the finest merchant ships afloat. Propelled by turbines and gears, and a reasonable number of Diesels, equipped with the latest cargo-handling gear and safety apparatus, 500 of these fast ships would give America the competitive superiority in world shipping sought by the Merchant Marine Act of six years ago.

The Liberty Ship, of standardized design and simplified construction, was adopted as the best type for rapid building in the shipyards which were constructed along our coasts to meet wartime needs. It is of basic British design, modified and adapted to speed up production methods formulated in America. Nearly 1,600 of these 10,500-ton vessels were ordered and by the end of 1942 about 500 were in service. Also under construction are 500 C-type ships and several hundred tankers (the Commission's standard types).

Because the production of turbines and gears was limited by time, facilities and materials, Liberty Ships were provided with triple-expansion reciprocating engines of 2,500 horsepower. Ample facilities existed in the country to supply these engines in the numbers required by the program. Subsequently, production of these and of turbine machinery was increased at a number of inland plants to keep pace with the rapid construction of hulls at the shipyards. Liberty Ships will have their speed increased and they may be turbo-driven as soon as an increase in gear production permits the change. A modified design is well under way.

In January 1942 Liberty Ships were turned out in an average 241 days from keel-laying to delivery. By October the average construction time had been reduced to 66 days. Production of ships of all types rose steadily almost month by month. In January the shipbuilders delivered 16 vessels, in February, 26; March, 26; April, 36; May, 57; June, 67; July, 71; August, 68; September, 93; October, 81. The decline in October occurred because some yards were diverted to construction of special-type vessels for the armed forces.

Speed-up in Production.

Factors which contributed most to the speed-up in production were the extensive substitution of welding for riveting, and the prefabrication of large sections. Standardization is the keystone of the arch. Vessels were no longer built plate by plate, but literally assembled section by section. An entire forepeak, bulkhead or deckhouse would be welded at the fabrication shop, swung into place by powerful cranes, and then welded to the hull. With such innovations, shipbuilders were able to approximate the assembly-line methods employed in the automobile industry.

The shipbuilding facilities of America were expanded 600 per cent to accomplish the program. In October 1937, when the Maritime Commission let its first contract, the industry consisted of 10 shipyards with but 46 ways large enough to build ocean-going vessels 400 feet in length or more. Even with naval construction occupying half of these facilities, the meager interest in shipbuilding which had prevailed in America for the previous fifteen years failed to keep the remainder of the yards busy.

At the beginning of 1943, when production mounted to four ships a day, over 60 shipyards with more than 300 ways were building merchant ships for the Maritime Commission. Seventeen of these yards with over 130 ways were engaged solely in Liberty Ship construction. The bulk of these facilities had been brought into being after March 1941. In order to tap as many sources of labor and materials as possible, the yards were scattered along the Atlantic, Pacific, and Gulf Coasts, and on the Great Lakes.

Employment figures leaped from the low of 70,000 workers in 1937 to more than 500,000 by the end of 1942. A full million was expected at the shipyards by the time the peak of production in 1943 is reached. Thousands of additional workers are employed at many contributing plants scattered throughout 36 states, which are manufacturing marine equipment and accessories for assembly at the shipyards.

War Shipping Administration.

The expanding American Merchant Marine was placed under the control of the War Shipping Administration when that agency was established by Executive Order of President Roosevelt on Feb. 7, 1942. Broad powers over the operation, purchase, charter, maintenance, and requisition of all ocean vessels (with a few exceptions) under the flag or control of the United States, were assigned to the Administrator. The use of these vessels, the President's Order declared, 'shall comply with strategic military requirements.' The agency was created as part of the executive branch of the Government and the Administrator is directly responsible to the President.

Training of Crews.

The training program to provide adequate crews for the wartime merchant fleet was also placed under the War Shipping Administration. Facilities on shore were expanded and additional training ships were put in service to school the 30,000 officers and 100,000 seamen needed to man the new ships.

Three United States Merchant Marine Academies and five state academies, supported in part by Federal funds, are giving intensified courses to cadets training for deck and engine officer licenses. Because of the emergency, the course has been cut from three years to sixteen months. After a basic course on shore, the trainees spend six to eight months as cadet officers on a merchant ship in actual operation. Approximately 5,000 cadets were in training at the close of 1942.

The War Shipping Administration also operates seven training stations for unlicensed ships personnel. Four stations give a three-month course for apprentice seamen, another station trains radio operators in six months, and two stations are for experienced seamen who wish to study for an officer's rating. Cooks and bakers are also trained.

The Recruitment and Manning Organization of the War Shipping Administration makes surveys of crew requirements at all ports, and places the cadets and seamen aboard ship as they finish their training. In addition, this agency is conducting a registration drive to induce older or retired seamen to return to sea duty.

1941: Merchant Marine, American

It became increasingly apparent as the year 1941 progressed that the fate of the democratic nations and of humanity itself depended upon ships. Ships became the main weapon for defense against the aggressor nations, and the United States was the only country in the world where ships could be produced in sufficient volume. Ships had to check the Axis dream of world conquest, especially after the Japanese attack on the United States had made this a war on all oceans.

In the interest of national defense and of the future of the American Merchant Marine, the United States Maritime Commission engaged in a three-fold program (1) to build ships, (2) to supervise the operation of ships, and (3) to train licensed officers and seamen.

Repeal of the Neutrality Act provisions permitted armed and unarmed American merchant ships to resume service on combat zone routes with or without Navy escort. Vessels of the Allies, whether employed in trade routes, as auxiliaries for the armed forces, or as units of the combat fleet, were granted safe harbor in American ports and, if damaged, repaired in Naval or commercial yards. Damage to German and Italian vessels caused by sabotage by their crews was repaired by the Commission.

Shipbuilding Program.

As the United States Navy was mobilized and the Army required vessels for its transport and supply services, 151 of the finest, privately-owned, merchant vessels of approximately 1,300,000 gross tons were turned over to the armed forces. At the same time the Maritime Commission initiated new shipbuilding programs of a magnitude unparalleled in American maritime history.

As facilities of expanded existing yards were fully employed, new yards were built. The construction tempo increased rapidly from the original ship-a-week or 500 ships in ten years program to a-ship-a-day in late 1941 with two-ships-a-day expected late in 1942. At the same time other yards and plants were launching scores of smaller craft; lake ore carriers, oceangoing and harbor tugs, coastal tankers, coastal cargo boats, barges and others.

The Maritime Commission long-range program, well under way in 1940, was accelerated as defense dangers became apparent. An emergency program for 200 EC-2 ships then was initiated, followed in rapid sequence by authorization of 227 Lend-Lease vessels of which 112 were emergency cargo ships, and the all-out requirements of August 1941, calling for an additional 566 vessels of all types.

Between February and September 1941, the Commission added 993 large vessels to its regular program but, by dovetailing these construction programs, has kept December 1943 as the ultimate delivery date for all of these large vessels. These combined programs should bring into service over 1,400 large vessels of over 14,000,000 deadweight tons at a total construction cost in excess of $3,000,000,000, besides several hundred smaller and special purpose craft.

American shipbuilding facilities have been expanded to cope with the construction demand from a capacity of 46 ways in 1937 to 275 ways in 1941 capable of handling ships of 400 feet or more in length. Over 40 yards are located strategically on Atlantic, Gulf and Pacific Coasts and on the Great Lakes so as to take advantage of labor and materials, supplies and industrial production. Twenty-nine of these yards and 202 ways are devoted to the construction of oceangoing merchant vessels.

Allied Shipping Pool.

This construction program became necessary as foreign ships, that formerly carried the great bulk of American traffic, were withdrawn from regular runs, and as undersea, surface and air raiders took a heavy toll of essential tonnage. The policy of all-out aid to the embattled nations was emphasized when President Roosevelt pointed out the importance of delivering material aid before it was too late. In response to this need, the Maritime Commission made available for the use of Great Britain and her Allies a shipping pool of 2,000,000 tons and another 1,000,000 gross tons was sold, mostly to the British.

Curtailments in the American Merchant Marine.

Necessarily some of the American merchant services became somewhat dislocated, especially those in North Atlantic and Mediterranean operation. On the other hand, additional ships were placed on runs to South America where vital raw materials were available and where it was found possible to aid friendly nations in working out their economic problems. On Jan. 1, 1941, there were 141 ships totaling 823,673 tons on routes to both coasts of South America while by Sept. 1, 1940, in the same service, were 209 ships totaling 1,105,284 tons. Lack of sufficient tonnage to satisfy all foreign trade demands, and at the same time to handle defense cargoes, forced a curtailment on some routes, though uninterrupted services were maintained where possible.

Fleet operations have been found effective for emergency purposes, both to and from American ports. A 'backlog fleet' of Commission-owned ships and others taken over from Denmark in the Spring and Summer of 1941 was employed on quick runs to pick-up extra defense cargoes whenever vessels in regular service found it impossible to handle all the traffic. At one time vessels of this fleet were sent to Chile to bring back copper and nitrates. A number of ships were placed in service to transport Lend-Lease cargoes to Rangoon, Burma, for carriage over the Burma Road to the interior of China and another fleet of American cargo ships and tankers was assigned to supplying Russia. On service to the Red Sea area, as of Oct. 2, 1941, were 79 American flag vessels that released tonnage needed by the British, as also was the case on the Australia-New Zealand route. Other fleet operations supplemented American Army and Navy needs and were in addition to those performed by the merchant ships actually turned over to the armed services. In this duty merchant vessels were employed on voyages to American bases located in the Caribbean Sea and in the Atlantic and Pacific Oceans.

In domestic ports, and under Maritime Commission supervision, facilities have been coordinated so as to promote efficiency, assure more rapid dispatch and turn-around of vessels and thus, in some cases, permit the employment of fewer vessels on certain routes. Representatives of the Commission have been placed on duty in some foreign ports to assist in expediting American shipping.

War demands increased the manifold activities of the Maritime Commission. Under the Ship Warrants Act, passed in 1941, qualified American flag and foreign vessels found it possible to obtain priority classification, thus permitting control over emergency shipping. Ocean freight rates were scanned and checked and if necessary modified under authority of the Shipping Act of 1916. Insurance was made available by the Commission where it considered outside rates too high on the government's interest in American flag ships as was war risk insurance and reinsurance in cases where adequate coverage could not be obtained on reasonable terms from private companies.

Training Program.

The Maritime Commission's training program was expanded during 1941 so as to provide as many licensed officers and seamen as possible for the new ships. The American merchant fleet required 10,000 officers and 40,000 seamen of all ratings as of June 1941, and will require at least another 10,000 officers and 40,000 seamen by the end of 1943. Four training schools located on the Atlantic, Pacific and Gulf Coasts and a fleet of eight training ships are caring for 1,000 apprentice enrollees between the ages of 18 and 23 each month. These men serve six months. Other seamen must be obtained by actual service aboard ship or from those who have experience but have taken shore jobs.

The Maritime Commission trains cadets at shore stations and aboard ship in three-year courses so as to qualify them to become licensed officers. As with apprentices it only will be possible to train a limited number for licensed officers, but seamen who have three or more years experience may take the examinations and a number of ship's officers who have accepted shore jobs are expected to take to the sea again.

The Maritime Commission programs contemplate an American merchant fleet on a permanent basis with ships capable of holding their own in post-war competition. It is emphasized that, under such conditions, an assured future is offered those who associate themselves with the American Merchant Marine. See also TRANSPORTATION.

1940: Merchant Marine, American

European Service.

The war in Europe has had marked effects on shipping during 1940. The two Neutrality Act Proclamations of November 1939 and June 1940 barred a total of 113 United States ships from the North Atlantic and Mediterranean. At the end of the year, the only American flag services operating to Europe were the American Export Lines with Lisbon as their only European port, and the United States Lines, running freight vessels to the north Spanish ports of Vigo, Santander, Gijon and Bilbao.

Although there was a temporary depression in United States shipping as a result of the Neutrality Proclamations, the withdrawal of foreign flag vessels in other trades and the increase in movement of strategic materials to the United States resulted in effective economic revival. The United States flag services to the Orient, to Africa, to Australasia, and to Latin America were all measurably increased during the year. Every ship barred by the Neutrality Acts was in service at the end of the year, either through sale, charter, or rerouting.

Far Eastern Service.

Among those companies increasing their services to the Far East was the Lykes Bros. Steamship Company, which increased the number of freight vessels operating from Gulf ports to the Far East from eight to twenty. The American President Lines, Ltd., continued its Far Eastern service on a weekly basis. The first of its large new cargo-passenger vessels, the President Jackson, went into service in November.

The Puget Sound Orient Line was transferred to private ownership during the year and now operates as the American Mail Line, running six vessels from Puget Sound to the Far East. The American Export Lines increased the number of vessels sailing from United States North Atlantic ports to India from four to nine. The American Pioneer Line's Indian service, with four vessels, was sold to American Export Lines, Inc., late in 1939. Its Far East, Atlantic, and Gulf-Australian services were sold to the United States Lines Co. in February 1940, and at the same time the 12 vessels which had been operated by American Pioneer in those services were chartered to United States Lines.

African Service.

In the African trade, the Seas Shipping Company added eleven vessels to its service, making sixteen in all. The American South African Line also increased its services, as did two other smaller lines serving African ports, using chartered American flag vessels.

Latin American Service.

The east coast of Latin America was being served by a large number of ships from the United States, including 37 vessels of the American Republics Line, the Pacific Republics Line, and the Mississippi Shipping Company. Latin America's west coast was served primarily by the vessels of the Grace Line. While the total fleet operating to the west coast was not greatly increased, the addition of large new vessels brought an increase in cargo-carrying capacity.

The Alcoa Steamship Company, formerly known as the Ocean Dominion Steamship Company, continued its service to the Caribbean Islands and the Guianas with the purchase of eight vessels from the Commission to replace foreign flag ships.

Charter Market and Increased Rates.

The charter market continued high during the early months of 1940. With the shutting of the Mediterranean to American flag vessels, there was a recession of rates in June. After the end of July, a steady increase in charter demands took place, and in December the market was approximately as high as at the first of the year. Many vessels of foreign flags, including Norwegian, Swedish, Yugoslavian, and Panamanian, were chartered to American operators.

During the year there was also a large increase in freight rates on a number of commodities, such increases ranging from ten per cent to as much as one hundred per cent. The most marked increases were noted in commodities which formerly moved in tramp steamers, since practically all such shipping was withdrawn as a result of the war.

War risk insurance, in effect on nearly all American flag vessels in foreign trades, resulted in a substantial increase in the cost of operations.

As a result of the increased tempo of the Maritime Commission's construction program, 179 ships were contracted for as of Dec. 15. Eighty-five of these had been launched, and of these 85, 56 were in service.

Naval Service.

The Navy during the year acquired twelve large national defense tankers, and eleven other vessels built under the Maritime Commission's program, for use as cargo and ammunition carriers, seaplane and submarine tenders, transports, etc. It also bought 14 older cargo ships, and about 100 smaller boats for trawlers, etc.

Transfer to Foreign Ownership.

During the period from Sept. 3, 1939 to Dec. 10, 1940, a total of 221 vessels of the cargo, cargo-passenger and tanker types of 1,000 gross tons and over were approved by the Maritime Commission for transfer to foreign ownership. The vast majority of these vessels had reached or exceeded twenty years of age, at which age a vessel is usually obsolete. Of the vessels in those categories, 82 of 443,822 gross tons were approved for transfer to Great Britain; 10 of 41,399 gross tons to Canada; and 20 of 114,839 gross tons to France and Belgium. Proceeds of the sale of many of the merchant ships were earmarked for the construction of new ships, thus assuring the continued rehabilitation of the American merchant marine.

The regulatory powers of the Maritime Commission over continental coastwise and intercoastal shipping under the Transportation Act of 1940 were transferred to the Interstate Commerce Commission as of Jan. 1, 1941, subject to the right of the latter body to postpone transfer if it deems it necessary.

Training of Personnel.

The Maritime Commission made substantial progress in its training program for licensed and unlicensed seamen and apprentices. Including special national defense classes in radio, visual signalling, and gunnery, more than 10,000 officers, cadet officers, cadets, unlicensed personnel, and apprentices chosen from the C.C.C. camps, had been or were being trained by the end of 1940.

Transportation of American Citizens from Foreign Zones.

The repatriation of American citizens from Europe continued during the early part of this year, and during the summer three vessels of the United States Lines Company were diverted to Galway and a French port to expedite the return of United States citizens from combat zones. In the fall of 1940, the State Department, in collaboration with the Maritime Commission and ship operators, arranged for the return of American citizens from the Far East and three vessels were diverted from their regular service to assist in this repatriation work. The American President Lines with vessels in a fortnightly service from the Orient carried many American citizens returning from that area.

Other Developments.

On the Great Lakes cargo shipments were heavier than ever, and the ore-carrying lines had the best year in their history. Most of the trade consisted in carriage of iron ore from the head of the Lakes to Lake Erie, and the bringing of coal on the return voyage.

The first American vessel to be a victim of the war was the City of Rayville, which was sunk on Nov. 8 off the coast of Australia. All but one of the crew were saved.

1939: Merchant Marine, American

Launchings of 1939.

The year 1939 included both the most important gain and the most important setback to the shipping industry since the World War. The gain was represented by the first launching of a group of dry cargo ocean-going ships since shortly after the first World War. These ships were part of the Maritime Commission's scheduled 500 to be completed within ten years. By the end of November, 29 new ships had been launched. These included nine tankers with a cruising speed of almost 20 knots, larger and more heavily powered than anything built in the United States up to that time. The tankers were considered of great national defense value in that they could follow the fleet in time of war. Also included were 14 of the Commission's C-2 type 15½-knot freighters. These, the Commission's first design, are half again as fast as the average freighter in American nautical commerce and are larger and have more efficient cargo handling equipment. Trials have shown them to be the most efficient of their class in the world and due to more rapid turn-arounds they are able to carry substantially greater cargo than the old freighters they replaced. The first of the C-3 type vessels, somewhat larger and faster, was also launched during the year. Still to come are smaller, 14-knot freighters of the C-1 type and a number of other cargo and passenger-cargo ships.

Setback Due to Neutrality Legislation.

The setback to American shipping came in the enactment of neutrality legislation later in the year which had an immediate and drastic effect on American shipping. It is estimated that provisions of the law which prohibit American ships from traveling to belligerent ports or through combat areas will result in withdrawal of approximately 90 American ships of about 600,000 tons. New services will be found for many of these vessels. But whether or not it will be possible to use all of them will not be known for some time. The President Roosevelt of the United States Lines will be used in the New York-Bermuda run. Lykes Brothers has chartered nine ships to the Chilean Nitrate Sales Corporation to carry nitrates to the United States. Increased cargo to South America has provided business for some of the new freight ships which previously had been assigned to the trans-Atlantic trade.

Steamship Services Established or Renewed.

One new steamship service was established, the Puget Sound-Orient Line, operated for the account of the United States Maritime Commission. This provided cargo sailings from Pacific-Northwest ports to the Orient, which had not been available under the American flag since the American Mail Line withdrew its ships in August 1938.

Services to Spanish ports which had been discontinued during the Spanish Civil War were resumed by the American Export Line and Lykes Bros. Steamship Co. Late in the year the Maritime Commission chartered three of its shipping lines, the American Hampton Roads-Yankee Line, the America France Line, and the Oriole Lines to United States Lines Company. The lines operated in the trans-Atlantic trade and 16 vessels were covered in the charter.

During 1939, the American President Lines, Ltd., (reorganized Dollar Steamship Lines) went into full operation with fortnightly sailings in the round-the-world service, and likewise in the trans-Pacific service, spaced so that there was a weekly sailing of American flag vessels across the Pacific. The Government-established American Republics Line from New York to the east coast of South America had a most successful year, and with the increased emphasis on Latin-American trade and cooperation, gave promise of still greater prosperity. The line runs from New York to Rio de Janeiro, Santos, Montevideo, and Buenos Aires. Success of the passenger service inaugurated at the end of 1938 was believed due in part to the speed and attractiveness of the three liners, SS. Argentina, Brazil, and Uruguay which were luxuriously equipped for the South American trade. The freight service of the Good Neighbor Fleet operated by the American Republics Line also showed encouraging gains.

New Ships Projected.

American steamship lines began to offer substantially improved service with new ships being built under the Maritime Commission's construction program. They provide, particularly, efficient cargo handling equipment, economical operating costs and increased speed. About 25 of these were expected to be available by the close of the year. Several were placed in service on the Moore-McCormack Lines Scantic service to Scandinavian and Baltic ports. The 12 high-speed tankers which were built by the Standard Oil Company of New Jersey, with the Maritime Commission paying the cost of national defense features, including the cost of providing the additional speed above normal tanker requirements, were so successful that three were purchased by the Navy and two by the Keystone Tankship Corporation of Philadelphia. One was placed in service by the Standard Oil Company from New York to Aruba, and two in the coastal service.

The America, largest commercial ship ever built in an American yard, was launched August 31 under the sponsorship of Mrs. Franklin D. Roosevelt. The vessel is 723 feet long, has a 92 foot beam and is 100 feet deep from keel to uppermost deck. Gross tonnage is about 30,000 and expected speed 22 knots. The America will have a crew of 639 and accommodate 1,219 passengers. (See also TRANSPORTATION.)

In a special message read at the launching by Mrs. Roosevelt, the President described the event as one of the most important to take place in the world this year. 'It signifies an early return of the merchant fleet of the United States to a dominant position on the oceans of the world. When the Maritime Commission was created in 1936 our merchant fleet had lapsed into a lamentable state. New construction of ocean going vessels had virtually ceased following the War and the average remaining economic life of the merchant fleet was less than five years. Now that situation is changed. Contracts will have been let for approximately 100 ships by the end of this year. Eighteen other ships have been launched.

'The program of 500 ships within ten years which has been developed by the Commission and approved by the Executive with consideration of our national defense as well as our commercial needs, is one of which the nation can fairly be proud and in which every citizen has a direct interest. It is not an extravagant program. It is a modest program which will give this country a fleet competitive, if not superior, in speed, efficiency, and safety to those of other nations. It will place 3,950,000 gross tons of new ships on the high seas.'

The Commission's construction program was subsequently accelerated so that orders planned for 1940 were in many cases issued in the fall of 1939. By the end of November there were 141 ships ordered. The program included a large number of Diesel propelled vessels, marking the first time Diesel propulsion has been given adequate recognition in American shipyards. See also UNITED STATES: Budgetary.

Other Developments.

Freight rates were steady until the outbreak of the European war when sharp advances occurred due to increased hazards of operation and increased operating costs, such as war risk insurance and the requirement for higher compensation to crews.

Movement on the Great Lakes was the heaviest in years, due largely to expanded operations of the steel industry. The trade consisted of iron ore from the head of the Lakes to Lake Erie and coal on the return voyage, with some carriage of package freight.

With the commissioning of two training ships and establishment of four training stations, the Maritime Commission made substantial progress in its training program for licensed and unlicensed seamen in the United States Maritime Service. These facilities were expanded late in the year to provide training for seamen unemployed as a result of the Neutrality Act.

The European war caught thousands of Americans abroad and passenger facilities on returning ships were insufficient to meet the tremendous demand. Cots were set up in the public rooms of liners. Freight ships brought passengers far beyond their ordinary capacity. The Maritime Commission arranged the charter of five coastwise vessels for the sole purpose of repatriation. See also UNITED STATES: Transportation.

1938: Merchant Marine, American

Rehabilitation of the Merchant Marine.

Substantial progress was made during 1938 toward rehabilitation of the American merchant marine. The condition of American-flag operators in general was more hopeful than for some years past. The principal factor contributing to the increased optimism was, of course, the actual beginning of the United States Maritime Commission's long-range construction program.

It is still obvious, however, that if the maritime industry is to return to a satisfactory financial basis under private operation, considerably greater patronage must be afforded American-flag ships by Americans, both as to cargo and passengers.

Vessels of United States registry carried less than 30 per cent of the country's foreign trade during 1938. Under the Merchant Marine Act of 1936, amended, Congress laid down as a basic policy carriage of a 'substantial' portion of our foreign trade in our own ships. The word 'substantial' has been variously interpreted, but it appears to be the consensus that at least 50 per cent should be the proportion. In this connection we find Japanese ships carrying 70 per cent of Japan's foreign commerce, British ships, 60 per cent of their own, Norwegian ships, 62 per cent, German ships, 58 per cent, Italian ships, 46 per cent, and French ships, 39 per cent.

It has been estimated that were the American merchant marine to handle even 35 per cent of American foreign trade, annual revenues would increase by more than $75,000,000 of which more than $40,000,000 would accrue to the subsidized portion of our merchant fleet. Were this condition to be realized, and it is by no means impossible, there is reason to believe that the amount of operating subsidies could be very materially reduced, if not eliminated altogether, thus effecting a saving on the present basis of some thirteen million dollars a year for the taxpayer.

Rehabilitation of the merchant marine is a responsibility placed by the Congress upon the United States Maritime Commission. The fate and fortunes of that fleet must of necessity follow the success or failure of the Commission's program designed to carry out the policies laid down by the Congress.

On Jan. 3, 1938, the Commission could report only one contract signed for construction of new merchant tonnage. By Dec. 31, 1938, however, 52 new ships of approximately 425,000 gross tons had either been laid down or ordered by the Commission in conjunction with private operators or for its own account.

The Commission under the Merchant Marine Act, 1936, by which it was created, was directed to establish an adequate and well-balanced merchant fleet, providing service on more than twenty foreign trade routes considered essential to the international commerce of the United States and to the national defense. Because of the dangerously inferior condition of the American merchant marine at the time that legislation was passed, a large and immediate construction program was necessary to replace tonnage which presently would be obsolete. The United States had declined to fourth place among the principal maritime nations of the world in the size of its foreign-trade fleet; sixth in speed, and seventh in the age of its ships.

New Construction Program.

Following a thorough study of replacement requirements, as well as those involving additions to the fleet, the Commission began in 1938 to follow an informal policy of constructing 50 new ships a year for ten years to provide an orderly and systematic replacement of obsolete tonnage with an eye both to foreign commerce and national defense. At the end of the year the quota had been exceeded by one ship. In addition, construction had begun on the largest liner ever laid down in an American shipyard. This vessel, ordered during the latter part of 1937, brought the total of new vessels ordered or under construction on Dec. 31st, 1938, to 52.

The Commission's technical staff was ready with the beginning of 1938 to invite bids on two types of cargo ships which it had designed, known as the C-2 and the C-3. These are believed to be among the best ships of their kind that modern engineering can produce. Their design was adopted after long and detailed discussions during 1937 with representatives of the Navy and qualified experts in both technical and commercial fields of marine transportation.

Twenty of the C-2 type ships were ordered during 1938. They are 459 feet overall, beam 63 feet, depth 43 feet six inches, 6,000 normal-shaft horse power and capable of a sustained sea speed of 15 knots per hour. They have a displacement at load draft of 13,900 tons and 9,291 tons deadweight. These ships were allocated to four different trade routes. Three will go into service, upon completion, on runs from North Atlantic ports to the West Coast of South America. Six will enter service from North Atlantic ports to Scandinavian and Baltic Sea ports. Six more will run from North Atlantic ports to the English Channel, East Coast of the United Kingdom and German North Sea ports. The last five of the twenty have been allocated to routes running from North Atlantic ports to the Red Sea, Persian Gulf and Indian ports via the Suez Canal; and/or to Australia and New Zealand ports via the Panama Canal; and/or to Far Eastern ports via the Panama Canal. These ships, which are being constructed for the Commission's account, will be available to private operators by sale or on a charter basis.

This also holds true of the twelve C-3 type ships which were ordered by the Commission during 1938. These vessels are 492 feet over all, with a beam of 69 feet 6 inches, 8,500 normal-shaft horse power, and a displacement at load draft of 16,725 tons and 11,036 tons deadweight. They have a sustained sea speed of 16 knots per hour.

In addition to these vessels, the Commission undertook the construction, during the year, of four vessels with the American Export Lines, and three with the Mississippi Shipping Company. The S. S. America is being built for the United States Lines.

The year's construction program included twelve tankers for the Standard Oil Company of New Jersey. These vessels, practically unique, are of great potential value to the national defense. Their high speed which has exceeded nineteen knots on trials, and their capacity of approximately 150,000 barrels of oil, place them in a position superior to that of the tankers of any other nation. The additional propulsion machinery and other purely national-defense features, such as equipment for fueling at sea, accounted for approximately 28 per cent of their cost which was paid by the Maritime Commission. These tankers will become available to the Navy, which has purchased two, in time of war or national emergency.

The Commission during 1938 began the design of additional cargo and passenger vessels to supplement those on which construction had already begun. It has considered that rehabilitation of the merchant marine in the Pacific Coast service is of primary importance, and in that connection adopted a comprehensive building program of twenty-four vessels for the important trade routes originating in that region.

The awards for construction of C-3 cargo ships involved the allocation of two vessels to a California yard. This is the first construction to be undertaken by a West Coast yard since passage of the Merchant Marine Act, 1936, and the first in that area for overseas trade since the World War. In making this award, the Commission based its action upon a finding that existing shipyards, including Navy yards on the West Coast, did not provide adequate facilities for purposes of national defense and national emergency, and consequently, a revival of the industry there was desirable.

Taking the 1938 construction awards as a whole, they involved an expenditure of approximately $130,000,000 for the construction of fifty-one ships. Supplementing the 1938 program with that contemplated for 1939, it is estimated that together they will involve an expenditure of approximately $140,000,000 for shipyard labor; $175,000,000 for purchase of material; and approximately $78,000,000 assignable to overhead and profit, including such things as administration, maintenance, real estate, social security taxes, fire, casualty and compensation insurance. The record indicates that from July 1st, 1938, to June 30th, 1939, the nation's shipyards will have employed on this program a total of 16,030 men at an average of about $30 per week. In the fiscal year of 1940 it is expected that the number of shipyard workers will increase to approximately 34,000.

This program will provide considerable stimulation for various industries as those participating in ship construction include heavy machinery, steel, brass, copper, air compressor, refrigeration, laundry equipment, plumbing, radio, storage battery, floor coverings, paint, furniture, clocks, electrical machinery, table china, etc. In addition, almost every state in the Union contributes some product of its mines, factories or fields to the construction of a vessel.

Subsidy Agreements.

At the end of 1938 the Maritime Commission was paying operating-differential subsidies to thirteen companies operating 148 vessels of 1,028,398 gross tons. The subsidy agreements run for various periods of time depending upon the age of the vessels covered and the requirements for their replacement in the long-range program.

The companies under subsidy contracts in 1938 included: American Export Lines; American President Lines, Ltd.; Grace Line, Inc.; Lykes Bros. Steamship Company, Inc.; Mississippi Shipping Company; Moore-McCormack Lines, Inc. (operator of the American Scantic Line); Moore-McCormack Lines, Inc. (operator of the American Republics Line); New York and Cuba Mail Steamship Company; Oceanic Steamship Company; Pacific Argentine Brazil Line; Seas Shipping Company; South Atlantic Steamship Company; United States Lines Company.

For the fiscal year ending June 30, 1938, accrued operating-differential subsidies amounted to $8,753,769,02 covering 792 voyages for all operators involved.

Amendments to Maritime Statutes.

Numerous important amendments to the statutes governing the Commission's activities and maritime affairs in general, were passed by the Seventy-fifth Congress. In the main these were based upon recommendations of the Commission arising out of its experience in the administration of subsidy agreements. They included amendments making possible more construction, minimizing the danger of interruption to service in the event that a shipping company goes bankrupt, and a new title providing for ship-mortgage insurance. Under this title, the Commission is authorized to insure preferred-ship mortgages which secure new loans or advances made to aid construction, reconstruction or reconditioning of virtually all types of vessels in the domestic or nearby trades.

A second title was added to the Act by the Seventy-fifth Congress, creating a Maritime Labor Board with limited powers of mediation. This Board was directed to submit by March 1st, 1940, a comprehensive plan for establishing a permanent labor policy stabilizing maritime labor relations.

Training of Personnel.

During 1938 the Commission completed a detailed study of training merchant marine personnel in the leading maritime countries of the world. It also inaugurated a training system for American merchant seamen and assigned the administration of this project to the United States Coast Guard.

In a special report to Congress, the Commission stated that its training program 'will provide an excellent opportunity for experienced seamen to improve their skill and enhance their opportunities for advancement.

'We expect to have the shore stations at Hoffman Island in New York Harbor, Government Island at Oakland, California, and Fort Trumbull at New London, Connecticut, operating to capacity by Feb. 1, 1939. By the first of April, 1939, the steam training ship, American Seaman (ex-Edgemoor), will be in commission. With these facilities it will be possible to train annually approximately 300 licensed and 3,000 unlicensed personnel.'

Coastwise and Intercoastal Vessels.

One of the most important branches of the American merchant marine involves the coastwise and intercoastal fleet.

The ships in these trades constitute a majority of the vessels under the American flag. The problem common to all operators of replacing any of their American vessels bought during post-war bargain sales, is complicated in the domestic trade by the higher degree of obsolescence and the exclusion of this fleet from the subsidy provisions available to ships engaged in the overseas or foreign services.

Consequently, the Commission during 1938 instituted a thorough study of all problems facing intercoastal and coastwise operators, which upon completion will be submitted to the Congress with such recommendations as appear necessary.

In seeking to stimulate trade and traffic between the East Coasts of the United States and South America, the Commission on Oct. 8, 1938, inaugurated the 'Good Neighbor Fleet' of the American Republics Line. On that day the S. S. Brazil sailed from New York for Rio de Janeiro, Santos, Montevideo and Buenos Aires. She had aboard an official mission representing the United States Government, as well as representatives of the nations in South America which she and her sister ships, the S. S. Uruguay and the S. S. Argentina, serve on fortnightly schedules. These ships were formerly the S. S. Virginia, S. S. California and S. S. Pennsylvania. They were acquired by the Commission and outfitted for the South American trade at a cost exceeding $1,000,000. The Brazil is typical of all three. She is 613 feet long with a beam of 80 feet and displacement of 32,832 tons. She has accommodations for over 400 first-class and tourist passengers, with cargo space for 8,500 tons of perishable and semi-perishable cargo. The average speed of each vessel is 18 knots. These ships compare favorably with any of their class afloat.

During 1938 one of the leading American steamship lines was reorganized through the efforts of the Commission and services around the world were resumed. This line, formerly the Dollar Steamship Company, was renamed the American President Lines, and with the installation of new management, the company's regular round-the-world service was resumed.

The continuing improvement in the business picture is bound to be reflected favorably in the maritime industry. The extremely delicate foreign situation, however, creates a persistently-difficult question so far as the foreign trade fleet is concerned. Regardless of this, however, replacements by new construction are expected to continue. It is also possible that stimulus will be given to placements in the intercoastal and coastwise fleet through legislative action by the Congress.