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Chapter 4

This webpage reproduces a chapter of
The United States Navy

Thomas P. Magruder
[Rear Admiral, U. S. N.]

published by
Dorrance and Company

The text is in the public domain.

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Chapter 6
This site is not affiliated with the US Naval Academy.

 p110  V

Sea Power and the Merchant Marine

The sea power of a nation depends on many elements varying in nature and in value. Geographical position, population, wealth, material resources, industrial facilities, naval bases at home and abroad — all these, in addition to strictly naval armaments, contribute to a country's strength upon the seas. Unless, therefore, all these separate elements are studied and evaluated a consideration of sea power may easily arrive at erroneous conclusions. To make the statement, without such study, that any one nation rules the waves is nothing more than a figure of speech.

As concerns population, wealth, material resources and industrial facilities, certainly the United States may be regarded as second to no other naval power. In the other elements that make for sea power, however, this country is not so fortunately situated. At the present time the British Empire, for example, has more and better situated naval bases, a larger merchant marine and a stronger navy than has the United States. Fortunately, the United States needs but few bases abroad to protect its insular possessions and to assure its commerce freedom on the seas in time of war. Unfortunately, the Limitation of Armaments treaties negotiated at Washington in 1922 absolutely prohibit  p111 our country from having a proper naval base from which to protect Guam and the Philippine Islands. On its own coasts it has two fine ports along the Atlantic and one on the Pacific which may be made into fleet bases. Strategically the Hawaiian Islands are ideally situated for a great fleet base. One is now being constructed near Honolulu, on the island of Oahu. This scarcity of bases clearly indicates the need of the United States for warships of great radius of action. This, in turn, means greatest size for each type of warship. Thus one may see why the United States insisted upon cruisers of the largest size at the convention held in Geneva — a convention that was foreordained to failure, because the naval needs of two of the powers represented differ fundamentally and materially.

In matters affecting national defense, no other nation may be expected to follow the Utopian generosity of the United States as exemplified in 1922, when this country deliberately sacrificed the leadership in naval armaments in the hope that the burdens of competition would be lifted from the naval powers. This hope was gratified so far as certain specified types of naval vessels are concerned. But what may happen as a result? It is quite conceivable that competition may extend to the merchant marine. There are, in fact, indications that this shift in competition has already begun. For this reason the relation between the national merchant marine and sea power, which in turn, means national  p112 prosperity, is worthy of profound study and mature consideration.

Students of modern military, industrial and economic conditions are agreed that the United States needs an efficient merchant marine to assure two important things: the first is adequate national defense; the second, continuation and development of our foreign trade. On these two depend not only the safety but the prosperity of our nation. Let us consider them in order.

In the event of hostilities the value of the merchant ships to the Navy, when used as auxiliaries alone, is approximately 30 per cent. The United States would immediately need their services upon the outbreak of a war. As has frequently been pointed out, certain signatories of the Washington armament treaties, while observing the restrictions against building ships exceeding 10,000 tons, have built so many vessels of lesser tonnage as to far outstrip us in power. To even a greater extent have they outstripped us in the construction and operation of merchant ships.

In his last annual message President Coolidge stated: "More attention should be given to merchant ships as an auxiliary of the Navy. The possibility of including their masters and crews in the Naval Reserve, with some reasonable compensation, should be thoroughly explored as a method of encouraging private operation of shipping."

As auxiliaries, vessels of the merchant type serve the fighting craft of the Navy in many ways. They  p113 have been compared to the railroads, the motor trucks, and the other facilities for freight and passenger transportation which are necessary to the army in land warfare. They act as tankers to carry the fuel from home ports to warships in distant waters. They serve as refrigerator ships carrying fresh meat and other food to the fighting personnel. They are the cargo ships laden with ammunition, stores and material of war. They are the floating plants in which repairs may be made and fresh water distilled. Some are hospital ships. They may be utilized to spread mines in enemy waters and to sweep them from the channels through which our own vessels may steam. Until more aircraft carriers are constructed they may be made into improvised carriers and mother the planes which form so important an adjunct to the navies of today. They may be tendered for destroyers and submarines. How necessary they may be to the land forces was demonstrated in the World War, when, under naval convoy, they carried soldiers and marines to the number of 2,000,000 safely across the Atlantic and back home.

These duties represent only their service as auxiliaries. Actually the swift modern merchantman may be converted into something closely approaching a warship in comparatively little time and at comparatively little expense. The British realized this and had at least one armed merchantman carrying two 4.7‑inch guns on the seas more than a year before the outbreak of the World War. When hostilities were declared,  p114 about thirty-nine British merchant ships had been thus armed. During the naval warfare which followed, the Tenth Cruiser Squadron was an effective unit of the British sea forces. It was composed of twenty-five armed merchant ships, larger and with a longer steaming radius than many of the old cruisers, and therefore better adapted to the work of patrol and blockade. This squadron patrolled most effectively the waters between Scotland and Norway, and prevented supplies reaching the enemy via the neutral nations of the Baltic Sea.

The naval experts and diplomatists who met at the Washington Limitation of Armaments Conference in 1922 recognized the adaptability of properly designed merchantmen to warfare at sea and included in the treaties several provisions permitting the decks of such ships to be strengthened so they might mount 6‑inch guns in the event of war. It may be seen readily that any power having a large number of merchantmen will benefit by this provision. The Karlsruhe, the Emden and the Dresden — three effective German commerce raiders — carried 4.1‑inch guns, and everyone knows how great was the damage they inflicted upon commerce. Merchant ships armed with 6‑inch guns will have in the future no reason to fear any raiders thus armed.

Recently there has been announced a plan to construct and operate an American line of vessels capable of crossing the Atlantic in four days. These ships, it was demonstrated at model tests in Washington, could  p115 follow generally in their design the lines of the modern light cruiser. The light cruiser, however, is limited by treaty to 10,000 tons displacement. The proposed four‑day liners will be merchantmen, and there is no treaty restriction as to their size. It is probable that they will have a displacement of about 30,000 tons and a speed of thirty knots. The wartime value of such great and swift ships, built on light-cruiser lines and approximating light cruiser speed, should be obvious to anyone. Certainly such ships may operate as light cruisers or as aircraft carriers.

Adaptable ships, however, are not in themselves sufficient to make of the merchant marine an effective naval auxiliary. An efficient personnel is equally necessary. Several of the great naval powers have long recognized this fact and have developed among the officers and crews of the merchant marine a trained naval reserve. The United States is following somewhat slowly their lead.

Among many nations the backbone of the naval reserve consists of ships and crews which receive some form of subsidy or direct payment, on condition that they train in peacetime for possible service in war. Among others, this reserve is built up of men subject to military or naval training. In the United States there exists a familiar naval reserve composed of men who have retired from active service or who, after voluntary enlistment, receive periodic training. In addition there has been authorized by Congress a merchant marine naval reserve composed of men and vessels  p116 regularly engaged in the business of transport by sea. This branch of the reserve can, and undoubtedly will, be made an extraordinarily valuable adjunct to our Navy. It is, of course, valuable now, but there is room for great expansion. In the merchant crews are deck officers, navigators and engineers second to those of no other nation.

Great Britain has long recognized the value of such trained sailors to her naval forces and has established and maintained the highly effective Royal Naval Reserve. This organization may include from 10,000 to 25,000 active and experienced members, and approximately $2,000,000 is expended annually for its support. A member of the Royal Naval Reserve must serve his nation where required in time of war and must participate in frequent training on active ships during peace. His training may include gunnery, torpedoes, signals, navigation and fleet maneuvers in the seaman branch, and technical instruction if he is a member of the engineering branch. The services given the British Navy during the World War by the members of the reserve won the highest commendation not only from the ranking officers of the fleet but also from the British Government.

Within the past few months our own Navy has announced its completed plans for the organization of the American merchant marine into naval reserve units. Since members of this branch of the reserve are competent peacetime sailors, but require instruction in wartime work, detailed plans of training have been evolved.  p117 The training will be conducted on what is known as a ship-unit basis. Certain vessels are selected for potential service as naval auxiliaries, as, for example, tankers, supply ships, transports and the like, and to the officers of those ships is offered a course of instruction preparing them for the duties they must perform as officers of naval auxiliaries. Compensation for the time spent in training has been authorized by Congress, but the necessary funds are not yet available. When the money for this purpose is appropriated the officers of the merchant marine naval reserve will receive annually one month's base pay of their corresponding grade in the regular Navy. Apart from their naval instruction, such officers will, of course, remain in constant training while performing the duties of their profession, as the law under which the reserve is formed limits membership to men who follow the sea regularly.

Such, in brief, are the methods by which the vessels and the personnel of the merchant marine may cooperate with combatant ships of the Navy in time of war. Yet this service is after all only a minor feature of the service the merchant ships can give their nation. By continuing to transport imports and exports, they may make a contribution to ultimate success greater than the winning of battles. And wartime service, even of combatant character, is, in turn, small when compared to the service the merchant ships render year after year to a nation during peace.

 p118  I have said that an adequate merchant marine is necessary to insure continuation and development of our foreign trade, and with it our national prosperity. History has demonstrated forcibly how true this is. Carthage, Venice, Spain, Holland, Great Britain — all in turn grew powerful and wealthy while they held maritime supremacy. At this time Great Britain, with the most powerful fleet and the largest merchant marine, is the leading maritime nation. Yet the United States was in 1926 the greatest exporting nation and there is every indication that within the next few years it may be the greatest importing nation as well. In 1926 the value of our foreign trade was more than $9,200,000,000, compared to $9,800,000,000 for Great Britain, and our exports exceeded $4,750,000,000.

This foreign trade determines the prosperity and the livelihood of a far greater proportion of our population than most persons suspect. Agriculture, manufacturing and mining, the industries from which most of our natural wealth is produced, are profoundly affected thereby. According to reports from the Department of Commerce, we send abroad approximately 16 per cent of the total value of our agricultural products, 41 per cent of our copper production, 30 per cent our locomotive production, 39 per cent of our typewriters, 20 per cent of our agricultural machinery and 8 per cent of our automobiles. In the oil industry 35 per cent of the kerosene, 29 per cent of the lubricating oils and 14 per cent of the gasoline and naphtha produced  p119 here are exported. Approximately 8 per cent of our manufacture and mechanical production of all kinds is shipped abroad.

Our imports come from every nation on the globe and enter in some way into the lives of all our people. The farmer needs nitrates from Chile, potash from Germany, binder twine from Yucatan and jute bagging from India. The manufacturer needs raw materials from Malaysia, China, India, Japan, France, Brazil, the East Indies, Africa and Asia Minor. Ships constantly plow the seas bearing these cargoes to and from our shores. Their freight charges present a staggering total. But because we have an inadequate merchant marine the proportion of these charges paid to American carriers is small. How costly this lack of ships has been to our country has been told in a recent statement by the Hon. Curtis D. Wilbur, Secretary of the Navy.

"Today, Secretary Wilbur explained, "our merchant vessels are carrying about 32 per cent of our foreign commerce; it should be at least 50 per cent. The remaining 68 per cent that is carried in foreign bottoms means that we pay annually about $600,000,000 to other countries for transporting our goods. A greater proportion of this we should ship in our own bottoms, and so retain a large part of this vast sum at home. What is paid to foreign ships for carrying the products of our farms and factories is a stream of gold that leaves the country. That which is paid to our own merchant vessels circulates back into the country to  p120 take its part in general industry. The ships required for such a commerce would be built, repaired and provisioned at American sources and would give employment to many of our citizens. Surely this would add to the general welfare and at the same time provide the vessels and experienced seamen so essential to any country in time of war."

American ships did not always play this minor role in the transportation of the cargoes of their own and other countries. In the period between 1795 and 1810 our merchant marine carried 90 per cent of the world's commerce. Until the Civil War practically all American foreign trade was carried in American ships. As a result of that war, however, conditions were so changed that the trade carried by ships under the American flag declined steadily, until by 1914 it had almost disappeared. Then three great maritime nations went to war and their merchant ships were commandeered for war purposes. The effect on the United States of the withdrawal of these ships was immediate. The price of commodities dropped; our ports were soon congested with freight awaiting export; and our workmen, manufacturers, farmers — the entire community — lost millions upon millions of dollars.

Then, in 1917, the United States entered the war. As the greatest possible defensive war measure, we built a merchant marine that cost the taxpayers $3,000,000,000. I emphasize the fact that this was for national defense. The end of the war — or soon thereafter  p121 — found us with a large merchant marine. A great number of the ships, however, were not suitable for commercial competition. This was due to wooden instead of steel construction; to use of coal instead of oil as a fuel; to slowness and to other factors. However, the Government, through the instrumentality of the Shipping Board and the Emergency Fleet Corporation, made an effort to carry American trade in American bottoms. What was the result? The deficit in 1922 was $32,000,000. It is now, I believe, running at about $16,000,000 annually. The percentage of trade carried in American bottoms is slowly but surely decreasing. Thus, in 1919 it was 60 per cent; in 1923, 50 per cent; in 1925, 40 per cent; and now, as Secretary Wilbur has said, it is about 32 per cent.

The explanation of this recent decline in American shipping lies in the fact that our vessels cannot compete with foreign ships. They are, with possibly a few exceptions, not so large as many foreign-owned boats, and of inferior speed. Shipping is a highly competitive industry. The most profitable freights go naturally to the biggest and the speediest carriers. We are neither building nor operating vessels which meet modern requirements. Largely this is because shipbuilding is more costly here than elsewhere, and because our navigation laws, including the Seaman's Act, make operation more expensive. It has been estimated that the cost of building ships in the United States is from 20 to 30 per cent greater than in foreign countries, due to higher priced labor and materials,  p122 and that when the vessel is completed its operating expenses run from 8 to 10 per cent higher under American registry than that of any other nationality.

American vessels must, for example, carry larger crews than those of any other nation. They must pay higher wages. They must bear the expense incidental to the fact that the American system of measurements assigns greater tonnage than does the system employed by other nations. Since canal and harbor dues, pilot charges and other port expenses are assessed on a tonnage basis, the American ships pay approximately 25 per cent more than do their foreign competitor when they enter harbor. In addition to these handicaps, Congress has fixed a 50 per cent duty which must be paid on all repairs done to American ships in foreign countries. Most long voyages make some repairs necessary to the vessels while they are abroad. But the American shipowner is the only one who must pay this duty to his own Government on work done elsewhere. There are still other reasons for our dwindling merchant marine, but these are, to my mind, the most significant.

Under the best of conditions ocean shipping is not a highly profitable industry, and such disadvantages do much to discourage American capital from attempting to develop a merchant marine under present conditions.

There is, however, one advantage which the law gives to the American merchant marine. This is a monopoly of the coastwise and intercoastalº trades. As a result the ocean-going, coastwise trade of the United  p123 States equals in size and in value, in ordinary years, its entire sea‑borne foreign commerce. But it is for trans-oceanic shipping that a well-developed merchant marine is most necessary. In peacetime it assures the prosperity of a nation; in war, the security. What, for example, would happen were war to break out again while we were without an adequate merchant marine? Our trade would be at the mercy of foreign shipping and freight would cost all that the traffic would bear. Exports would diminish. Foodstuffs and cotton would go downward in price rapidly and many shops and factories would close. Labor would be idle. It would mean what we call hard times.

As recently as 1926 this was illustrated in a minor way, not by war but by an unusual industrial situation in another country. During the coal strike in England that year a great number of British ships which had been transporting our wheat and cotton turned to carrying coal instead. The American agricultural interests were greatly concerned. They feared a tie‑up of their products, for lack of ships to move them abroad. This would have meant tremendous losses. Fortunately the Shipping Board was able to commission a number of laid‑up vessels to carry the exports. But for this aid, however, the farmers and cotton growers of America would have lost much of the value of their crops through inability to reach the foreign markets.

To no other element of the population is a merchant marine more essential to prosperity than to the grain  p124 farmer of the West and the cotton farmer of the South. These farmers produce a surplus of crops that must be exported and compete in the markets of the world. With orderly marketing and an ability to deliver surplus crops when and where needed, the prosperity of the farmer is assured. A national merchant marine commensurate with the wealth and power of these United States means that more labor will be employed, not only on ships but in shipbuilding plants, mines and in every industry in the country. The $500,000,000 that now annually go abroad will circulate in this country to the benefit of every citizen. Why, then, should anyone shy at a simple word — subsidy? We cannot have a merchant marine without some form of Federal assistance. Government operation of the present merchant marine is costing $16,000,000 annually. Take the Government out of the shipping business, turn it over to private interests, with such assistance as is required by inexorable fact and conditions, and then, and not until then, shall we have a merchant marine commensurate with the needs of the nation.

The system of quantity production now prevalent in industry gives to the manufacturers of automobiles, locomotives, electrical material, agricultural implements and all other goods an output greater than can be absorbed by domestic markets. The surplus must be exported and raw materials imported. Then again, due to the prosperity of the country, our people demand luxuries from abroad. All this goes to create  p125 a foreign commerce totaling nearly ten billions annually. To continue prosperity there must be a protected national merchant marine. There must be protection from cheaper foreign labor and materials in construction — the principle of the tariff — there must be protection to our merchant seamen and officers — that theirs is a living wage in accordance with American standards — protection to ship operators must be given by rectifying adverse navigation laws. Above all there must, in time of peace, be given the active aid and assistance of the Navy. The Navy and the merchant marine are inseparable and interdependent in peace as well as war.

Interdependence between the Navy and the merchant marine may be instanced now in the cry for more light cruisers. As I have pointed out previously, a light cruiser costs $16,000,000 to build and about $3,000,000 annually to operate. A fast liner capable of being transformed into a light cruiser costs no more and will nearly pay for its own operation in time of peace. What a saving and what economic profit may be had, then, in building ten fast liners — $30,000,000 a year saved in operating liners rather than cruisers; foreign markets reached in a week or ten days; mail between New York and the capitals of Europe in five days; passengers carried across the Atlantic in four days; and there are other conveniences and advantages that will accrue to the citizens of the United States by building such liners.

 p126  I do not for a moment advocate the building of liners to the exclusion of light cruisers. I suggest that if the war needs of the country call for forty light cruisers, let ten or fifteen of them be converted from fast liners.

Through the efforts of a few farsighted congressmen and of the naval authorities concerned with our defenses on the seas, the public has become familiar with tables showing how certain foreign nations are surpassing us in the construction of warships to which the Washington Limitation Treaties provisions do not apply. Equally interesting, though less familiar, are the figures which show how far we are lagging behind in the construction of merchant vessels. In a recent report from the United States Naval Institute proceedings, Mr. Alfred H. Haag, an eminent authority on international shipping, presents the following illuminating table of merchant vessels of 2000 gross tons or over completed between 1921 and 1926 by the principal maritime nations for transoceanic service:

Country No. of Ships Gross Tons
Great Britain 599 3,500,000
Germany 172 950,000
France 72 450,000
Italy 63 506,000
Japan 52 250,000
United States 14 137,000
Total 972 5,793,000

 p127  Thus, for every ship of 2000 tons or over designed for foreign trade which the United States has built, Great Britain has constructed approximately 43, Germany 12, France 5, Italy 4 and Japan 4.

But this does not end the story. With the exception of the United States, all the nations listed are either building or have contracted for many more such ships. Naval statistics show that on March 31, 1927, the record of merchant ships building or contracted for ran as follows:

Country No. of Ships Gross Tons
Great Britain 142 980,000
Germany 49 395,000
Italy 28 300,000
Japan 19 100,000
France 8 58,000
United States 4 63,000
Total 250 1,896,000

Here it is seen that Great Britain is building 35 vessels, Germany 12, Italy 7, Japan 5 and France 2 to every one of that class being constructed by the United States.

Summarizing the shipbuilding activities of the principal maritime nations in merchant ships laid down, appropriated for, contracted for, built and building, we find the following:

 p128  Country No. of Ships Gross Tons
British Empire 741 4,588,847
Germany 221 1,348,533
Italy 91 805,945
France 80 507,239
Japan 71 350,556
United States 18 199,884
Total 1,222 7,801,004

As everyone knows, speed as well as tonnage is a most important factor in the comparative value of vessels, whether used for peacetime or wartime service. For that reason the number of vessels referred to in the tables which attain a speed of twenty knots or more is significant. In this class Great Britain has 12, France 11 and the United States 2; Great Britain attaining an advantage over us of six to one. In the class of ships designed for eighteen knots Great Britain has 38, France 19 and the United States 6. In the class built to make sixteen knots Great Britain has 145 and the United States 37; of fourteen-knot vessels Great Britain has 435 and the United States 101; of twelve-knot ships Great Britain has 1280 and the United States 235. From this it may be seen that if the United States is to occupy the place in world affairs justified by its wealth, its industry and its international trade, it must begin immediately a program of shipbuilding with particular emphasis on modern types  p129 designed to compete for, at least, a fair share of our own foreign sea‑borne commerce.

What is being done to that end? As this is written several significant projects are under discussion; for legislators and business interests alike realize that this nation needs a permanent merchant-marine policy. One of the measures introduced by Senator Jones providing for operation by the Shipping Board of all vessels that cannot be sold to advantage and for additions, replacements and improvements to the United States Merchant Marine Fleet which would insure the continuance of Government operation has recently passed the Senate. The bill provides further that no ships shall be sold except by an unanimous vote by the members of the Shipping Board. That would mean the continuance of the Government in operating ships of the merchant marine. This scheme will be vigorously opposed by many in the House of Representatives. Also it is opposed to the policy of the President, and I hope it will not become law. A proposed measure discussed by Representative William R. Wood suggests retirement of the Government from operation and ownership of merchant ships and a subsidy based on mail contracts.

The Shipping Board, which by its activities may be regarded as having averted the disappearance of American shipping from the overseas trade, is also preparing remedial legislation at this time.

One plan which has been suggested to the Shipping  p130 Board proposes government aid to shipbuilders in the form of a huge revolving fund to be lent to shipbuilders at 2½ per cent interest and to be repaid over a period of sixteen years.1

The Government should get out of the shipping business at the earliest practicable moment. In his annual message the President, in speaking of the merchant marine, states:

Public operation is not a success. No investigation, of which I have caused several to be made, has failed to report that it could not succeed or to recommend speedy transfer to private ownership. . . . It should be our policy to keep our present vessels in repair and dispose of them as rapidly as possible, rather than undertake any new construction. Their operation is a burden on the national treasury, for which we are not receiving sufficient benefits.

The annual report of the Shipping Board has the following interesting and instructive comments on American shipping:

The board's primary function, as provided in various acts of Congress, is the establishment and maintenance of an American merchant marine. . . . The board's secondary  p131 function, intimately bound up with the foregoing, involves the operation and liquidation of the Government's fleet of merchant vessels, acquired as a result of the war. As provided by law, the activity is carried on by the board through the instrumentality of a subsidiary organization known as the Merchant Fleet Corporation, whose president reports to the Shipping Board as to a board of directors, the board in all cases determining fundamental questions of policy.

These two principal functions are necessarily closely related, since it was the unmistakable intent of Congress, as clearly expressed in the Merchant Marine Act, that the government fleet was to be so utilized that ultimately it would become part of the privately owned American merchant marine. The board has kept constantly before it this conception of the important rôle that government-owned merchant vessels must play in the upbuilding of our commercial shipping.

Congress has directed in the Merchant Marine Act of 1920 that "as soon as practicable, consistent with good business methods," the vessels shall be sold; but that meanwhile they shall be used, at the discretion of the board, in the establishment of strategic trade routes, these in turn to be disposed of ultimately to private American interests. As a result of the establishment of trade routes by the board, steamships flying the American flag have again appeared in the principal ports of the world for the first time in seventy-five years, not a single one of them in competition with privately owned American flag vessels.

At this writing — June 30, 1927 — the board still possesses upward of 800 ships, 307 in active operation and 516 in the laid‑up fleet. It holds these lines and individual  p132 ships out to private capital for purchase under the most favorable terms, and continues to operate upon strategic trade routes only until such time as private capital is disposed to take them over.

A graphic idea of world shipping conditions will be gained from a study of the shipbuilding industry in the principal maritime nations during the past few years. Thus the number of ships of 2,000 gross tons or over, built or now under construction for transoceanic service, from and including the year 1921, shows that for every ship of this class built in the United States, Great Britain has built 43, Germany 12, France 5 and Italy and Japan each approximately 4.

This new construction provides our competitors not only with more ships but also with faster ones, for the modern trend, especially noticeable during the past few years, is all in the direction of speed, coupled with economy of operation due to the use of up‑to‑date propulsive machinery, largely of the internal combustion type. This is an age in which, other things being equal, the fast ship gets the cream of the freight. We are thus being outclassed not only in tonnage but also in the character of service we are able to render the shipper. More and more are we likely to get the less desirable classes of cargo — the commodities invariably handled by slow ships at low freight rates.

On July 3, 1926, the Senate passed a resolution — Senate Resolution 262 — as follows:

Resolved, That the United States Shipping Board be, and it is hereby, requested to prepare and submit to the Senate not later than January 1, 1927, comprehensive and concrete plans for building up and maintaining an adequate merchant marine for commerce and national security  p133 (1) through private capital and under private ownership and (2) through construction, operation and ownership by the Government.

In response to this resolution the Shipping Board, on January 11, 1927, submitted a report embodying certain plans for building up and maintaining an adequate merchant marine for commerce and national security. The board's report was made after hearings had been held in thirty-three cities in various sections of the United States. As a result of these hearings, supplemented by responses to 9,000 inquiries addressed by the board to representative organizations and individuals throughout the country, sentiment of the general public was found to be as follows:

1. It was unanimously held that the United States should have an adequate merchant marine for national defense and for commerce.

2. With almost equal unanimity it was held that this merchant marine should be privately owned.

3. With equal unanimity it was held that until it is made possible for private interests to successfully own and operate the American merchant marine the Federal Government must continue to do so.

During the 69th Congress, Senator George Wharton Pepper of Pennsylvania offered a most interesting and helpful bill which had the support of many of the largest shipbuilders in the country. Its purpose was to give a rebate to the shipowners for an amount covering the difference in cost between a ship constructed in an American shipyard and one constructed in a foreign yard — in short, to consider the ship as an  p134 export commodity. Vessels built under the provisions of the bill were to be designed according to plans agreed upon between the owners and the United States Shipping Board, with particular regard to their availability to the Government for conversion in time of war. The Navy should determine the characteristics for this purpose. Nothing as yet has resulted from the original Pepper bill. I doubt if it, or a bill like, ever becomes law in view of the passage of the Jones-White bill the last session of Congress.

These are but a few of the many remedial measures which may come to the attention of Congress. Which of them will meet with its approval it is impossible to forecast. It is clearly evident that any measure framed to help the American merchant marine should have largely in view the following requirements:

1. Operation by private interests.

2. Provisions for extending to shipbuilders and shipowners treatment as generous as that which other governments give their maritime industries, including liberal mail contracts over a large number of years.

3. Elimination of the tariff element in shipbuilding by considering ships solely in foreign trades as an export commodity.

4. Repeal of the law requiring a duty of 50 per cent on repairs made in foreign ports, requisite for voyage to a home port.

5. A system of tonnage measurement which does not impose higher canal, pilotage, harbor and other  p135 dues for American ships than are paid by the ships of other nations.

6. A liberal plan of government aid in financing merchant-ship construction.

7. Provisions whereby vessels built with government aid are designed with the view of their rapid conversion to cruisers and auxiliaries for service in the Navy in time of war. Certainly the designs and prospective employment should meet the approval of the Navy Department. Also there should be an arrangement whereby the officers and crews should form a naval reserve, and for their service therein they should receive a fair compensation.

In closing, it may well be said that Faith, Hope, and Parity — these three — engendered the conferences of 1922 and 1927 at Washington and Geneva. Faith and Hope, it seemed, were justified at Washington. Geneva cared less for Parity. Yet Parity is the greatest of these, in the merchant marine as well as in the Navy. On it depend our national security, development and prosperity. The United States should spare neither time nor money to make its merchant marine at least the equal of that of any other nation.

The Author's Note:

1 Since this was written the Jones-White Bill has been enacted and is now a law. The Bill provides a fund of $250,000,000 to be loaned to those building ships at 2½ per cent interest. There are other provisions to aid in the rehabilitation of the American merchant marine.

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