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Chapter 3

This webpage reproduces a chapter of
Sail On

by
Allan Nevins

published by
United States Lines
1946

The text is in the public domain.

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and I believe it to be free of errors.
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Chapter 5
This site is not affiliated with the US Merchant Marine Academy.

 p60  Chapter Four

The First World War Emergency

The World Convulsion

Amid the cheers of an immense British crowd, in 1914 the White Star Liner Britannic, of 50,000 tons, slid into the water at Belfast. Cheered by a still more enthusiastic throng of Germans, that same year the colossal liner Bismarck, of 56,000 tons, was launched at Hamburg. Shipbuilding seemed to be entering upon a new era, in which one record for size and speed after another was rapidly smashed. Only three years earlier the world's largest vessel had been the White Star triple-screw Olympic, of 45,000 tons register. Hard on its heels had come in 1913 the Cunarder Aquitania, of 47,000 tons, and the Hamburg American giant Vaterland, of 56,000. The Diesel engine had furnished shipping with a new means of propulsion. In 1911 the first internal combustion ship crossed the Atlantic, the British vessel Toiler.

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The two chief maritime nations of the globe were straining every effort to defeat one another: the United Kingdom with more than 19,000,000 gross tons of shipping, and Germany with something less than 6,000,000. Compared with even the second, the United States showed up badly. If we counted all our lake and coastal vessels, we made the very respectable showing of 6,928,688 gross  p61 tons in 1914: but of this only 1,066,288 tons were engaged in foreign trade. Great Britain stood far and away in the lead not only in her owner­ship of ships but in her shipbuilding facilities. In the fifteen years preceding the war, she built fully three‑fifths of all the merchant shipping produced in the world.

The storm burst with Germany's invasion of Belgium. Within a single year the oceans presented an unexampled scene of havoc and confusion. The merchant navies of Germany and Austria were driven from the sea. Those ships not captured or destroyed had to tie up at home or intern themselves in neutral ports. Countless Allied ships were withdrawn for use as transports, auxiliary cruisers, hospital ships, and tenders. By the end of 1915 it was estimated that twelve million tons of shipping was thus in use. Meanwhile, German submarines and commerce raiders sank not merely hundreds of British, French, and Russian vessels, but much  p62 neutral tonnage, especially Dutch and Scandinavian, as well. According to Lloyd's, Great Britain during the first seventeen months of the war lost 338 merchant steamers and 264 lesser vessels, of 1,200,000 gross tonnage. Among the famous liners which went down during this period were the British Lusitania and the German Cap Trafalgar and Kaiser Wilhelm der Grosse.

In view of all these losses, and of the serious disorganization of commerce by blockades, embargoes, and war‑zone proclamations, the merchant navy of the United States had to bear a staggering burden. In addition to taking over much of the transportation work ordinarily done by European shipping, it had to carry to the Allies a steadily increasing volume of munitions and other war material. Freight piled up in American ports for lack of bottoms, until late in 1915 the congestion in New York, Philadelphia, and other centers made it necessary to establish railroad embargoes reaching far into the interior. Freight rates shot upward and insurance soared. In the fall of 1910 it had cost twenty cents a hundredweight to carry cotton from New York to Liverpool: in the fall of 1915 it cost $1.30. The charges for carrying wheat from the United States to Great Britain quadrupled. Farmers, manufacturers, import merchants, were all feeling the transportation pinch severely.

There was grave danger that American economic life would be heavily disorganized if the merchant marine were not quickly and effectively expanded. Even those who were willing to pay trebled freights to bring in goods from Asia and South America, and quintupled or sextupled charges to take goods to Europe, had great difficulty in getting facilities. So much of the available cargo space was taken by the British, French, and Russian governments that private shippers could not obtain a half-share. When Italy and Greece entered the war and began re­quisitioning ships for  p63 naval use, the hardships increased. Cotton growers who had obtained twelve and a half cents a pound for their produce in 1913 found the price tumbling to seven cents a pound; wheat growers suffered proportionately. A clamor naturally arose for government intervention.

First Steps in the Crisis

Before the war was three weeks old Congress had passed an act permitting the transfer of foreign ships to American registry without respect to age. This was a revolutionary step: up to 1913 no transfers at all had been allowed save by special enactment, and under the Panama Canal Act of 1913 transfers only of vessels under five years old. As during the Civil War about three-quarters of a million tons of shipping had been sold abroad to escape Confederate capture or get the benefit of lower operating costs, so now in the fiscal year 1914‑15 more than a half million tons of British, German, Belgian, and other foreign shipping was transferred to American registry. In most instances this involved no change in the actual owner­ship. Title to many of these vessels had been held by such American corporations as the United Fruit Company, Standard Oil, and United States Steel Products Company, and they had been operated under foreign flags for reasons of convenience or economy. But some changes in beneficiary owner­ship did occur.

Meanwhile, American shipbuilding was slowly galvanized into greater activity than at any time in the previous fifty years. The tonnage actually turned out during 1915 was small — only 129 seagoing merchant vessels of about 175,000 gross tons — for contracts let in 1914 had been few. But orders were being placed and new ways built. As the year ended it was said that more than two hundred large merchant ships, totaling about 700,000 gross tons, were under construction. Special attention was being given to  p64 large freight carriers and oil tankers. For the first time since the 1850's, shipbuilding was being rated as big business. As yards were enlarged, thousands of hands hired, and steel and iron orders increased, Americans read of tremendous activity at the Sparrows Point plant of the Maryland Steel Company, the Camden plant of the New York Shipbuilding Company, and the ways of the Newport News Shipbuilding Company. Practically all yards capable of modern ship construction on the Atlantic, the Pacific, the Gulf, and the Great Lakes were enlisted.

The situation was somewhat complicated by the La Follette Seamen's Act of March, 1915, the fruit of long agitation by Andrew Furuseth and the Seaman's Union. This required that three-quarters of the crew of a vessel be able to understand any order given by its officers; that sixty-five per cent of the deck crews should be able seamen, having passed craft and physical examinations; that half the crew's wages due should be paid in every port; and that rigid provisions as to safety and sanitation should be met. Passage of the law was followed by announcements from the Pacific Mail Company, the Great Northern Steamship Company, and the Robert Dollar Company that they would have to give up their Pacific operations. But the main provisions of the law were not merely sound but overdue, and there is little satisfactory evidence that it would seriously have retarded the revival of the merchant marine even in peacetime.

As the war was prolonged, as the shipments to the Allies increased, and as more and more European tonnage disappeared, it became imperative that the government take control of the situation. Private shipping interests at first offered much opposition. But President Wilson pressed the measure, and on September 7, 1916, Congress passed an act establishing the United States Shipping Board.

 p65  The function assigned the Board was to promote the development of the merchant marine, and to regulate foreign and domestic shipping. This was partly a "preparedness" measure: the Board was to see that we had plenty of auxiliary ships if we were drawn into the war. It was partly a measure for the defense of our economic interests: the Board was to furnish a fuller supply of ships for general trade, foster the merchant fleet, and free American shippers from the dictation of foreign owners who, on orders from belligerent governments, were directing what goods a ship could and could not carry. Very little attention was paid to the question of permanent policy. The act was an emergency step to meet a crisis. Incidentally, the Board was authorized to enter the shipping business, with a revolving fund of fifty millions to build, buy, lease, and operate its own fleet of merchant vessels.

During the last months of our neutrality, American shipbuilding continued to grow like a young giant fed on H. G. Wells's Food of the Gods. By midsummer of 1916 fifty thousand men were toiling like beavers in the various yards, and by the spring of 1917 the number had grown to seventy-five thousand. During the fiscal year 1916‑17, our yards turned out for private owners almost thirteen hundred merchant ships of 665,000 gross tons. But this was not enough to meet the urgent demands of the time. Germany was rapidly increasing her submarine fleet, and at the end of January, 1917, she announced that she would resume unrestricted submarine warfare. The sinkings of both Allied and neutral vessels became desperately serious. They threatened the isolation of Europe from America, the starvation of Britain, and the defeat of the democratic cause. As soon as the United States entered the war, in April 1917, steps had to be taken to construct ships on a colossal scale.

 p66  Ships, Ships, and More Ships

To meet one of the most terrible hours of peril in the nation's life, the Shipping Board and its subsidiary agency, the Emergency Fleet Corporation, moved with frenzied energy. They possessed an ample grant of authority to do anything they pleased in the shipping field, and they were given practically limitless sums of money by Congress. Under Edward N. Hurley, who in the summer of 1917 took control of the Board, prodigious feats were accomplished. To help build the needed "bridge to France," ninety German and Austrian ships of almost 600,000 gross tons were seized, and nearly as many Dutch ships in American ports, another 350,000 tons, were commandeered. The Board also chartered or took over by some form of agreement 161 neutral-owned ships of 687,000 gross tons. But its principal effort lay in a mighty feat of emergency shipbuilding; "the world's greatest shipbuilding spree," as one marine expert has called it.

No expense was spared. Before the war ended, the Board had made commitments totaling $3,446,690,000. The prices paid for everything that had to do with ships, said William G. McAdoo, who as Secretary of the Treasury knew, were "appalling." Engines and other equipment, he wrote, "were purchased at such a staggering cost that I fancied more than once that the machinery we were buying must be made of silver instead of iron or steel." Wages for the army of workers enlisted, 360,000 by the fall of 1918, went to unprecedented levels. To establish new shipyards the Board spent about $150,000,000. In constructing the ships, the cost-plus system was generally adopted, the Board assuring the shipbuilder the cost of his work, together with a profit that ranged up to seven and a half per cent or even more. Money was squandered — but it produced results.

 p67  The grand achievement was the completion of 2,382 merchant ships of approximately nine million gross tons; the provision of facilities to carry half of the two million men sent to France (Britain carrying the other half), and keep them fed and equipped; and the complete crushing of the submarine menace. Many of the vessels were jerry-built affairs. They were made of steel, of wood, of composite materials, and even of concrete. After the war ended, shipping men regarded the product with amused disgust. "Anybody," wrote one observer, "built anything that somebody would brand a ship — of green wood and brittle concrete and baling wire and stove bolts — a hasty fleet of monstrosities." But they held together long to help win the war, and that was the vital consideration. To be sure, the greater part of the program was not finished until after the armistice; but this meant simply that if the war had run into 1919, as the government had expected it would, the prodigious fleet would have played an even greater part than it did.

The whole nation watched this effort with amazement and pride. The most famous of the new yards was that at Hog Island on the Delaware River. But others of spectacular size were hastily built all along our various coasts. Midsummer of 1919 found the Shipping Board operating no fewer than 178 shipyards. Several innovations had been introduced which would help to mold the character of American shipbuilding in a still mightier conflict. For the first time yards of "fabricated" ships appeared. That is, instead of building the entire ship piecemeal in one place, parts were gotten ready in steel fabricating plants, and then simply assembled at a central yard. Ship plates and shapes could be rolled according to standardized designs, and then bolted together. The principal yards for these fabricated vessels, on Newark Bay, on Hog Island, and at Camden, N. J., were built by the government but operated by business corporations.

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 p68  To use these ships efficiently was as important as to build them. This, too, was a responsibility of the Shipping Board, and of the special agency which it and the War Department jointly created, the Shipping Control Commission, of which P. A. S. Franklin served as chairman, 1917‑18.

The Postwar White Elephant

At the close of the war the world had the greatest surplus of ship tonnage it had ever known; and most of this surplus was in American hands. In 1914, according to President Hoover's Committee on Recent Economic Changes, the total gross tonnage of the globe had been 42,500,000; in 1923 it was 57,900,000. But the volume of ocean trade in 1923 had shrunk to eighty or eighty-five  p69 per cent of its prewar level. In other words, the war left the world with a third more ships, and a fifth less cargo to carry in them!

This serious maladjustment between supply and demand for ships meant falling freight rates, idleness, and distress. Many shipping companies throughout the globe plunged into bankruptcy. Everywhere it was necessary to tie up the older or more poorly built vessels; all countries ruthlessly junked much of their tonnage. Nevertheless, the decline in shipping rates continued, reaching in 1928 (otherwise a boom year!) a lower point than in 1913. Of course, wages and operating expenses had increased — some authorities believed that they had doubled. With revenues lower than before the war, merchant shipping was caught between the upper and the nether millstone.

Certain important changes were taking place which for a few special types of shipping lessened the force of these blows. The picturesque tramp ship, roaming from the Mediterranean to the Gulf, from the Indian Ocean to the Pacific, was at last disappearing. This jack‑of-all‑trades was steadily being replaced by vessels operating on regular routes at regular times; that is, by liners, large or small. By the end of the 1930's most American wheat and cotton, together with all high-grade cargoes, were being carried by these liners. Liner companies were allowed to make conference rate agreements, subject to approval by the Shipping Board, and these compacts did away with cutthroat competition. Again, the middle twenties found tourist traffic to and from Europe so large that the passenger lines prospered. Meanwhile, the tremendous growth of petroleum shipments gave employment to a larger body of tankers than ever before. Much of this tanker tonnage was owned by the oil companies, but some of it was held by independents. This branch of traffic, too, was able to pay dividends.  p70 But in general the postwar period was one of gloom and of scanty pickings.

Inevitably, the shipbuilding industry also fell into a depressed state. With such an unprecedented stock of shipping on hand, there seemed little reason for adding to it. Year after year the world's production of new vessels remained below the figures attained in 1913. In 1923 the yards of the entire globe turned out only 2,500,000 gross tons, and in 1928 only 2,600,000, whereas the 1913 level had been 3,200,000 tons. American shipyards were in particularly bad plight. According to Lloyd's, the tonnage built in America in 1925 was less than one‑eighth of that in the United Kingdom, and less than half that built in Germany. Great Britain had regained her old leader­ship, and the Shipping Board reported in 1927 that for every first-class merchant vessel launched in the United States since 1921, Britain had built forty‑one! The historic firm of William Cramp & Sons, faced with a total lack of business, withdrew from the field in 1927.

Here, too, however, a few bright spots can be found. One was the revived demand for extremely large and fast passenger liners, particularly on the North Atlantic; a shipping tendency not particularly happy for the operating companies, which found the cost of running these great vessels excessive, but pleasing to shipyards. Another bright feature was the strong demand for tankers. But the most encouraging development of all was the need for more modern types of shipping; vessels equipped with the latest engines and other mechanical devices.

For another revolution in ship propulsion, as impressive as that which took place when steam supplanted sails, and when the screw took the place of paddlewheels, was fast occurring. Oil fuel had demonstrated an enormous advantage over coal liners, being cheaper, cleaner, and more efficient. Despite experiments with  p71 pulverized coal which showed that the old fuel could be used with labor-saving devices, the trend toward oil continued unchecked. In 1914 nearly nine-tenths of the world's steamers had been burning coal; by 1928 only three‑fifths were thus fueled. At the same time, the use of Diesel engines steadily increased. They offered so many advantages over steam engines that the tonnage of motor-ships rose from a negligible figure before the war to well over 5,000,000 by the year 1928. These new types of vessels involved a great deal of new construction.

Shipping Board Policy

They involved also the rapid scrapping of obsolete types. The fact that a great part of the war‑built tonnage of the United States had immediately to be tied up, and ultimately written off, struck many Americans as tragic. When Henry Ford bought and broke up at one swoop 199 vessels of more than a half million gross tons, the nation shuddered. The sight of a great fleet of wooden ships gradually deteriorating in one of the Hudson coves was depressing. So this was the fate of the taxpayer's money — the end of our bright dream of maritime supremacy! Actually, time proved that the government should have shown more courage in scrapping vessels than it did. When the Shipping Board found itself in possession of some two thousand craft built for war purposes, it should have made haste to sell as many as possible at any price in reason; sell them for use if that were practicable, and for scrap material if it was not. But political considerations made this course almost impossible. It would have been impossible to explain to voters why a fleet costing literally billions had been disposed of for at most a few hundred millions. The Board was long hesitant in making sales, and tried with the aid of Congress to keep as many lines as possible in operation.

 p72  The Merchant Marine Act of 1920 laid down the general policy that the Board should operate government-owned vessels only until they could be sold to American interests (never foreign) for private operation; but that the Board might reserve ships on routes whose maintenance it deemed specially desirable. Admiral William S. Benson, chairman in 1920‑21, declared that the aim was to sell "to substantial, experienced, competent companies," with a bona fide intention of employing the ships. This meant delay. His successor, Albert D. Lasker, took a somewhat different attitude, describing government owner­ship as "poison ivy in the garden of industry." In the five years, 1923‑28, the seagoing merchant fleet held by the United States was reduced by well over two billion gross tons. The Board sold all its lines in the Pacific, and, with more delay, the Atlantic. The general hope of shipowning companies was that the government would go entirely out of business. But its slow progress toward this goal aroused warm protests, for its huge fleet of tied‑up vessels was regarded as a factor in the general shipping depression.

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"No private enterprise," wrote E. S. Gregg of Mr. Hoover's Committee on Recent Economic Changes, "could afford to have  p73 millions of dollars invested in idle ships which would be used perhaps only for two or three months every two or three years. . . . There is no sound economic argument for a continuance of this situation, if private initiative and enterprise are to be the guiding principles of our economic order." The time came when the government simply had to accept the worthlessness of most of its vessels, and cut its losses. The way was then clear for a new definition of policy; for an alliance of government and business in maritime affairs which promised at last to place our merchant marine on a stable basis.

The first great war‑emergency fleet had served its main purpose when the Central Powers went down in defeat in 1918. It proved a failure for the postwar period because it had been built without careful preliminary planning, in headlong, nervous haste, and for the most part of shoddy materials; because the country lacked maritime experience; and because no long-range policy had ever been worked out for the possible use of such a fleet. When a new war emergency appeared, the country was fortunately better prepared. It had made the careful preliminary plans, and it had formulated part of the long-range policy.


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