Its Role in the National Economy
Two new books recently made port on the writer’s desk. One was a sturdy volume, a veritable ship of the line as books go—broad backed, substantial, both in rig and content as befits its subject. The History of American Sailing Ships, by Howard Chapelle, sweeps through 400 pages of text loaded with a rich cargo of nautical information, builder’s plans, perspectives, and illustrations. The scope of the narrative ranges from a 20-ton ketch of colonial days to the stately clippers and greyhounds of the ocean that made the name of Donald McKay and John W. Griffiths synonymous with the stellar era of American supremacy on the Seven Seas.
One closes this latest history of America’s maritime pride with a feeling of nostalgia for the glory that departed with the coming of iron and steam in the decades following the Civil War. For though full- rigged merchant ships, like the Henry B. Hyde, continued to be built, even in the eighties and nineties, the American Merchant Marine declined so disastrously that by 1910 we carried but a bare 9 per cent of our over-seas trade in American bottoms. The fateful year 1914 finally revealed with painful logic what a heavy price that nation will always pay which recklessly permits 90 per cent of a vital industry to pass into the hands of foreign competitors.
The second book that came to hand may well be deemed the historical aftermath of the first—an epilogue, as it were, with a moral and a sting. Compiled by Lieutenant E. C. Talbot-Booth, R.N.R., it is a snug little cruising companion entitled Ships and the Sea, with a thousand illustrations in its 738 pages, to help the landlubber understand the things of the sea. In format it resembles a ship’s log, in miniature, and its contents include historical discussions, elementary economics, silhouettes for recognizing distant craft, and house flags and funnels to identify commercial lines. You can even find short lecture-courses on ship construction, seamanship, and navigation. But the significance for thoughtful American readers should be sought in the tables and statistics recording the relative importance of the merchant marines of the world.
It is in these revealing catalogues of the ships of leading nations that wisdom and folly become manifest. Page after page you will turn, looking hopefully for American flag ships among the listings of modern, efficient, and economical merchant craft. Here and there, among the formidable statistics of English, Japanese, Italian, Scandinavian, German, and French construction, the eager explorer will come upon an occasional crumb of comfort in the brief references made to the American Manhattan and Washington, and to the Lurline, Mariposa, and the Monterey of the Oceanic Steamship Company plying from San Francisco to Australasian ports. But there is no American Rex, no Conte di Savoia, no Europa, no Bremen, no lie de France, no Normandie, no Queen Mary. The Japanese section is particularly significant. Not to mention the important additions made to her merchant fleet in 1930, the result of the Act of 1932 has been the creation for Japan of the most modem merchant fleet of cargo craft operated by any nation. A subsidy effect has been the reduction of idle and obsolete tonnage to the lowest figure of any principal maritime power. Furthermore, the new tonnage is earning money, in spite of the fact that world shipping still suffers from a surplus of vessels. The magnificent 18-knot freighters on the New York run carry 70 per cent of the raw silk exported to the United States. The Japanese Navy has been provided with a potential fleet train capable of serving naval units on account of its remarkable speed and wide cruising radius. The Japanese Army sees in the new vessels able transports and supply ships in the event of emergency.
Despite the quantitative increase since 1914 in total tonnage under the American flag, the final net operating efficiency of the American Merchant Marine is today so far below the requirements of our national economy as to constitute a present disgrace and a potential weakness in the not improbable contingency of another war.
The American fleet available for goods and passengers on the international routes is handicapped by the cruising quality and obsolescence of the vessels. How many of them are either obsolete in structure and equipment or crippled by a low speed capacity? Speed, be it always remembered, is a primary consideration in modern over-seas competition. How many of them are capable of more than 12 knots an hour? For the most part that enormous increase of American merchant tonnage, so frequently quoted by critics, was a war measure and is now uneconomical, slow, and outmoded. The vessels then built were all pre-war and emergency types which would have justified their cost by one or two round voyages through the war zone. Except the few that have since been re-conditioned, they are largely obsolete or incapable of competing profitably with the modernized fleets of our competitors. Out of that $3,000,000,000 expenditure probably a small fraction of liquid value remains in the shape of ocean-going ships appraised at present world prices.
An adequate, a modernized, and a mobile merchant marine is an essential arm of national defense. In the opinion of the present writer, the Navy, including naval aviation, is our first line, an armed merchant marine second, the land and domestic air forces third. I am aware of the controversial nature of such a rating and willingly concede that the order of importance may be the inverse for European powers, particularly for those with contiguous borders. But for the United States the threat of attack by land or by air from either of our continental neighbors is remote. On the continent of Europe the menace is proximate and continuous. There remains, then, for us the possibility of a massed air attack from the sea. In the present state of aviation, that would seem to involve airplane carriers of the Saratoga and Lexington type or of the Japanese Kaga, Akagi, Ryujo, Soryu, and Hiryu variety. But these are naval vessels, surface craft, and the counter-attack devolves primarily on the opposing navy. Until the cruising range, fuel capacity, and weather- resisting power of bombing planes is measurably increased, the distance of both American coasts from their nearest overseas neighbors still remains a formidable barrier against direct attack and the combined Navy and Merchant Marine are the natural patrol.
The point of view here advanced does not exclude the possibility of sporadic long-range flights of a sensational character by special units capable of a transoceanic flight, as has been demonstrated by Colonel Lindbergh, by the Italians under Balbo, by the recent Zeppelin achievements and by the regular service of the China Clipper. But these brilliant exploits were made under ideal conditions in times of peace, were delayed or modified by weather conditions, and enjoyed the enthusiastic support and co-operation of the nation toward which the flight was directed. Most important of all considerations, the arriving aircraft was not met off the coast by a hostile air fleet fresh from its own base, in co-ordinated contact with a cordon of dreadnoughts, airplane carriers, swift cruisers, and shore defense, all prepared to do battle with the invader every mile of the way. In a word, it is premature to assume that aviation has altered the weight of sea power in the defense of continental United States. That position, obviously, is not tenable for a board of strategy in Tokyo which is in easy striking distance by air from Vladivostok, nor for Moscow which is vulnerable to mass flights from Warsaw and Berlin. Similarly, Rome, Paris, Vienna, Madrid, Brussels, and London all lie within easy flight of each other and all are aware of the changed conditions profoundly modifying their defense organizations.
But national defense is not the sole nor even the controlling motive underlying a sound merchant marine policy. Emergencies, by their very definition, are not the normal states of nations. A balanced national economy requires an adequate and independent transportation system as logically as it presupposes production, financial, and marketing facilities. History with all its pages teaches nothing if not this: Every maritime nation which has reached commercial supremacy, in fact, which has even achieved national security, has done so by developing and fostering a dependable merchant marine and by uncompromisingly protecting its trade routes, its merchants, and its merchant ships against all aggression. That corollary is written indelibly across the history of Egypt, Phoenicia, Venice, Carthage, Greece, Rome, Italy, the Hanseatic League, Portugal, Spain, Holland, and England. Conversely, history is equally eloquent in demonstrating that any nation which takes the easy way of permitting its commerce to be carried by foreign flag ships, which rents the service and space it is too lazy or too shortsighted to provide, is embarked on a policy of dependency that has ended every time with the nation in question becoming a second-rate power.
Never was demonstration more complete or costly than during the years that tried men’s souls, 1914-18. America had taken the gambler’s chance. Fascinated by the lure of easy living and succumbing to the arguments of expediency, we actually tried the experiment which we had been warned against by every leading statesman since the foundation of the Republic. We paid the inevitable price of our folly in 1914, when the mad scramble for tonnage as foreign ships were withdrawn showed us how completely we had abdicated the proud position won on the Seven Seas by Yankee Clippers of the age of Donald McKay and John Willis Griffiths. We were obliged to stand, hat in hand, in the waiting-rooms of foreign shipowners while our piled-up commodities perished on congested wharves and railroad sidings for miles inland because of lack of ships to transport them. Rates advanced fantastically. The cost of transportation of cotton from a cotton port in the United States to the United Kingdom rose from $2.50 to $60 per bale; wheat from $.05 to $.60 a bushel. Agriculture bore the brunt of the loss. We were then forced, in the later emergency of our own war needs, to embark on a superhuman program of shipbuilding that cost us upwards of $3,000,000,000 as costs soared to more than $200 per dead-weight ton.
Shall we laboriously cherish all the dead facts of history and blithely ignore its living lessons? Can we successfully defy the precedents of recorded experience, particularly when they are the expression of permanent human qualities? A gambler may take the risk of discarding the data of experience and stake his future on the off-chance, but a government cannot. Macaulay wrote,
Facts are the mere dross of History. It is from the abstract truth which interpenetrates them and lies latent among them, like gold in the ore, that the mass derives its value.
If History be Philosophy teaching by example, her lessons are wasted if principles of conduct be not deduced. These principles are Macaulay’s grains of gold deposited by the stream of human events on the sands of time.
Fortunately, the recent Act of Congress providing for an adequate Merchant Marine and establishing a Maritime Authority puts legal end to the contention that we should use the carrying facilities of foreign competitors and not seek to duplicate already existing services. We should buy where the rates are cheapest, others argued. It did not require an act of Congress to demonstrate the unsoundness of such superficial economics. Reason and experience forbade acceptance of such a suicidal policy. To be valid such arguments would have to provide guarantees that no act of God or man would henceforth intervene to disturb the supply of foreign tonnage for our export and import needs—no war to send shipping scurrying to home ports for naval and other essential national needs; no trade wars to sharpen competition and divert the foreign carrier to more profitable clients; no sudden legislation overseas to penalize American dependents as a political weapon of reprisal; no arbitrary increase of rates when the lack of American bottoms would leave no recourse but the humiliation of acceptance ; no arbitrary policy of preferment or discrimination in favor of more congenial neighbors. Let these not unreasonable nor improbable contingencies be removed and there still would remain the inescapable fact that the United States would be exposed to any powerful antagonist who had the foresight to provide a strong merchant marine capable of serving as a reserve for national defense in time of war.
In addition to the military value of special designed liners and cargo ships, necessary auxiliaries would be lacking; tankers, colliers, supply transports, ammunition ships, hospital ships, and similar essential units.
Let us now apply the suggestion of buying ocean services where they are cheapest to domestic commodities. What ensues? Reduced to concrete application, would it not mean that we would do better to cease entirely the cultivation of wheat? Why limit the argument to the merchant marine? Argentina, because of cheaper land, cheaper labor, cheaper haul to seaboard, and a well-organized system of production can lay wheat down on American soil cheaper than it can be produced in Kansas. A typical Buenos Aires quotation was $.71 per bushel. Allowing $.10 additional per bushel for transportation to New Orleans, Argentine wheat would be $.81 per bushel against $1.01 to $1.08 for American wheat at the same period of quotation. It is only an artificial tariff wall of $.42 that intervenes, i.e., an indirect subsidy to agriculture. If valid for wheat, why invalid for the protection of shipping, and if denied to ships, why retained for wheat? Soviet Russia, by reasons of her confiscatory economy and her monopoly of foreign trade, could undersell any American farmer. Japan is ready to supply shoes, electric-light bulbs, matches, textiles, rugs, and numerous other manufactured commodities at far lower prices than the American scale. A certain type of chenille rug has been marketed by Japan in New York for $.42 in which the cotton alone costs an American manufacturer $.72. Similar pertinent examples might be cited in abundance.[1]
Equally fallacious is the argument, advanced by a writer in The Nation, September 5,1935, to the effect that the American Merchant Marine would be useless as a naval auxiliary in time of war. Should our hypothetical opponent be England, he insists that American merchant shipping would be as useless as Germany’s was; our mercantile fleet would simply be bottled up in harbors by the Mistress of the Seas. This is a simplification of history that lacks only the basic element of possibility to be convincing. The argument omits the important fact that the naval power not of one but of many nations was concentrated on that historic blockade, and the Allies had a very restricted coast line to patrol. To compare that task with the fleet that would be required to seal the far-flung coast line of the United States is obviously too erroneous for serious consideration.
Happily, however, the danger of our ever having England as an opponent in war is remote. But it is not a contingency “that only insane men entertain.” Those familiar with the course of events previous to America’s entry into the war know how close we once were to just such insanity. The writer in question also resurrects an ancient fallacy by contending that in a war emergency we can again charter vessels from neutral nations. He would have us go back to the days of the Spanish- American War, when we were obliged to hire foreign shipping for transport of troops and services to our Navy; and return to the days when Theodore Roosevelt sent the fleet around the world depending on foreign colliers to serve its needs. What of personnel under the charter hypothesis? Reliable citizen seamen and trained American executives for bridge, fo’castle, and engine-room are not chartered nor created in emergencies with the off-hand nonchalance there suggested.
But all these ghosts of an ancient controversy have been laid by the Merchant Marine Act of 1936 whose purposes and provisions are discussed elsewhere in this issue by the able and expert Mr. Alfred Haag. Once more hopes that had sunk low under the confusion of counsel that prevailed so long both in government and shipping circles have been revived. Not least among the domestic benefits will be a revival of employment in American shipyards and a corresponding increase in the demand for manufactured and raw materials necessary for modern ship construction. The complaints so frequently heard regarding crews and personnel should be courageously and definitely liquidated under the labor provisions of the law.
The Act is not a perfect panacea any more than was the Constitution of the United States which required ten amendments within six months of its adoption. The text runs to approximately 20,000 words and enters so comprehensively into the main and allied problems that the manner of its interpretation and administration becomes of paramount importance. Much will depend on the intellectual caliber, the broadness of vision, and the courage of the members of the new Maritime Commission to whom wide discretionary powers are granted. It is no exaggeration to say that the future of American merchant shipping lies largely in their hands. If the Commission is composed of men familiar with the intricate ramifications inherent to the economics of international commerce; if the Commissioners are broadly competent in technical knowledge and resolved to administer their high trust as a national and not a political responsibility, we have every reason to hope that the ways are clear for the launching of a new era for America on the high seas. If the opposite transpires, then Secretary Wallace was right and Americans might better sail and ship under a foreign flag.