(Editor’s Note: Mr. Holly's article, printed, on this page, is a reply to the article “National Strategy and the Merchant Marine,” by Commander George Synon, U. S. Coast Guard, published in the August, 1950, U. S. Naval Institute Proceedings. In its objective of printing both sides of important problems connected with the Navy or the National Defence, the Naval Institute is glad to print herewith Mr. Holly's reply to Commander Synon's views. The close relation of the Merchant Marine to the National Defence is so well known and so long established that no one questions it as being a subject of first importance on which the American public should be kept as fully informed as possible.)
Millions of our fellow citizens have never seen salt water. These people naturally are not maritime minded even though they may well be producing equipment for ships or goods for export. Any understanding of the sea and its affairs must come from those who have contact with marine matters, both maritime and naval.
There are other millions of Americans who walk the streets of our coastal cities but who have little more understanding of matters relating to the nearby sea than do their inland brothers. To them ships, wharves, import and export cargoes are familiar sights. These things have been part of man’s commercial life from the beginning of history and are accepted as a matter of course. The average American has a casual interest in them but that is all. His attention is directed more to the newer and more spectacular developments which he sees about him. He is vaguely aware of our Merchant Marine having played an important role in the recent war; he may remember the frantic efforts to build merchant vessels prior to and during the war in an attempt to make up for our woeful lack of ships; he has probably forgotten that this building program was a most difficult one, tremendously costly in money and time due to the emergency conditions under which it had to be accomplished; he may miss the short trips on coastal steamers which he used to enjoy, but thinks of them merely as things of the past; he wonders why there should be any shipbuilding at all when he himself has seen ships lying idle in the inactive and laid-up fleets.
If he gives the matter any further thought, questions arise in his mind to which the answers are not readily available to him. It is therefore well for those in marine fields of endeavor to review the maritime situation from time to time so that a better understanding of this matter on the part of the country generally may result from the wider propagation of accurate information on the subject.
To start with a question already referred to—why is there such need for new ships when we already have the world’s largest Merchant Marine, much of which is lying idle? There are basically two reasons for this.
In the first place, the idle fleets are composed essentially of war-built tonnage and old vessels which are no longer of peacetime commercial value. The ships built during the war were produced for the prime purpose of meeting war needs. They were constructed with the utmost speed, of whatever materials were available, and according to designs specifically prepared to meet the existing needs and conditions. Eventual peacetime use was rightfully a secondary consideration. These vessels, principally Liberty Ships, served their purpose well but are now submarginal economically for use, in the numbers available, on today’s world trade routes. Furthermore, there are several types of vessel essential to a well-balanced peacetime Merchant Marine which were not constructed at all for war uses or were not built in sufficient quantities to meet our peacetime needs. The most important of these are passenger ships, highly specialized vessels which are not readily converted from standard wartime types.
The second basic reason for our need for new ships is the matter of obsolescence. A dry cargo or passenger ship’s life is normally figured as twenty years. Building ships in large groups as we did just before and during the war means mass obsolescence. This is undesirable from the point of view of both the ship operator and the shipbuilder. We need a continuous, orderly replacement program to keep our shipyards in continuous efficient operation and our Merchant Marine constantly up-to-date. Only by always having the most up-to-date merchant fleet in the world, with every ship well suited to the particular trade in which it is engaged, can we, with our high standard of living, compete in foreign trades.
We have all heard it said that the commercial surface ship will soon be replaced by air transport, but there have been no developments to date that would indicate such an eventuality. There is no question that airplanes in the future will carry an increasing portion of the overseas express passenger business. Nevertheless, the surface ship still holds its appeal to the traveling public as the only type of transportation which one takes as an end in itself and not solely as a means of getting from one place to another. Furthermore, in a peaceful world bound closer together by the rapid transportation which the airplane affords, there may well be a greatly increased volume of traffic which will benefit ship and plane alike. In the transport of commodities there is likewise no question that the airplane will carry an increasing volume of mail and high value express cargoes. It has however shown no tendency to cut deeply into the carriage of bulk and volume goods which have always been the backbone of the shipping industry. Speed costs money whether it be by land, sea, or air, and is economically justified only under certain conditions.
As an example of the place ship transportation still holds, one can cite the case in which air cargo transport reached its most advanced stage to date, the famous Berlin Air Lift. It is often forgotten that the great part of the supplies which were taken into Berlin were carried across the ocean by ship, then flown the last few hundred miles by planes, using fuel which was also delivered by ship. As in this case, so in overseas commerce generally, both the plane and the surface ship have their place and will for many years to come.
The part played in World War II by vessels of our pre-war coastal fleet is in itself proof of the necessity of reviving these services. To state that the demise of coastal shipping is due chiefly to excessive labor costs is unquestionably correct, but it is an oversimplification of the facts. It is a very complex problem but one whose solution offers much to American defense and to the American taxpayer. If our coastal fleet, which before the recent war comprised over fifty per cent of our merchant tonnage and about seventy-five per cent of our passenger tonnage, could be revived even in part, many ships and seamen would be added to our active merchant marine. Vessels and crews of an active merchant fleet earn their way to some extent at least; those on the beach add nothing to our national economy and are poor substitutes for active ships as potential naval auxiliaries. Before the recent war there was an average of between fifty and seventy- five coastwise passenger sailings per week on the East coast alone. It is hard to believe that the public demand which supported this amount of traffic year after year could have so dwindled in a short space of time that it cannot now support even one ship on a profitable basis. The revival of both passenger and cargo coastal services is a subject which requires a most careful study.
As important as is coastal shipping and its revival, however, it could never take the place of a deep-sea fleet in international trade; nor is there any reason why it should. The two serve entirely different purposes in both our peacetime economy and in our national defense. Regarding the latter function, it is to be noted that in the very recent past the partly completed S.S. United States and three other large passenger vesseles were taken over for defense purposes, these being of a type especially needed. What coastal service could use vessels of this type?
The answer is that we must have a peacetime merchant fleet well balanced as to vessels of various types and sizes to meet the diversified demands of an emergency.
It is difficult to see how the United States could do without foreign trade, as has been suggested by one contributor to the U. S. Naval Institute Proceedings, without a complete upheaval in our national economy and way of life. Ever since this country was settled we have been accustomed to the everyday use of goods acquired through overseas trade; and our European forebears were similarly accustomed for centuries before that. Even the exigencies of war failed to produce in this country substitutes for many imported materials, especially minerals and other basic industrial substances, so deeply ingrained are they in our industrial processes. Furthermore, how many Americans would take kindly to the idea of giving up coffee, tea, chocolate, spices, and a multitude of other imported products which have become part of our daily lives? As to exports, there are few manufacturing or agricultural industries which would not be seriously disrupted if they were limited to domestic markets exclusively at all times.
No, we cannot abandon foreign commerce; it is just a question of whether we will carry a share of it ourselves or leave our foreign shipping entirely in the hands of others. Incidentally, were we to give up foreign commerce completely, our isolation would be a far harder blow to the friendly nations with whom we now deal than would our carrying even one hundred per cent of our overseas shipments. It would hardly be the way to bring about a closer relationship between us and the other peoples of the world.
The idea of turning over our overseas carrying trade entirely to foreign bottoms in order to build up dollar exchange abroad has been suggested many times during the past twenty-five years. It would undoubtedly accomplish this end to a degree, but such a proposal raises the question of how far we should go in helping other countries so that some day they may be strong enough to help us. It would be a strange policy indeed that would require us to go so far as to weaken ourselves to the extent of making us actually dependent on them.
Furthermore, if we were to abandon one or more of our industries in order to give the business to other nations, why pick out the Merchant Marine? Why not suggest putting an end to our jewelry manufacturing business, for example, or our domestic cheese industry, or furs, or toys, or certain farm products? If we were to resort to such a ridiculous expedient, one can think of any number of American industries whose products our neighbor nations would be only too glad to replace with their competitive goods—industries which are kept alive, and rightly so, by us Americans who pay tariffs or subsidies for them far in excess of what American shipping has ever received; industries which are far less important to our economy and national defense than is the Merchant Marine. The fact that in the recent conflict nearly six thousand American merchant seamen lost their lives by enemy action while following their occupations, puts the Merchant Marine in a class by itself as an industry inseparably linked to our national security in time of war. It should be further noted that none of the other maritime nations carries on a major percentage of its commerce with the United States or with any other one country; their services are worldwide. Thus, if we were to abandon our Merchant Marine entirely, the amount of additional business that would accrue to any one maritime nation would not give that nation a proportionate increase in their total shipping comparable to our loss; nor could we have any assurance that what benefit there was would go where we wished it to, now or in the future. The whole matter would be out of our hands.
It has further been suggested that in the event of an emergency we can rely wholly on the ships of our maritime allies to carry on our necessary commerce and to meet our immediate defense needs because practically all of the world’s merchant ships belong to Atlantic Pact nations and would thus be available to us. But is it safe to put such trust in potential allies that we make ourselves wholly dependent on them for the safety of our country? Even if this line of reasoning were valid at the moment, how can we be sure that it would apply ten, twenty-five, or fifty years hence? A Merchant Marine once abandoned is not something that can be reestablished overnight by the stroke of a pen, no matter how grave the emergency.
Also, if we had no Merchant Marine, how could the United States fulfill “the obligation to devote its enormous shipbuilding resources” to the production of ships? There would be no shipyards, and the highly specialized skills and technical knowledge that go into the building of a modern merchant ship would be lost—except in so far as the Navy Yards could keep them alive, which is hardly their function. Should it be possible to build ships under these conditions, who would sail them, when there would be no American with the experience to qualify him for a ship officer’s license? How could a dead industry keep up with the latest techniques and developments necessary at any time to produce an up-to-date product?
Until our own experience, and that of other countries as well, has proved that merchant ships have totally and forever lost their value in both peace and war, it is hard to see how we or any other ocean-bounded country can think of doing away with its Merchant Marine.
Because of the stigma commonly attached to the word “subsidy,” many people have the impression that the maintenance of our Merchant Marine is a heavy burden to the American taxpayer. This is not the case. In the first place, the majority of our ships in foreign trade operate without any subsidy whatever. Secondly, the total maritime subsidy paid to maintain certain essential services is not a large amount. For example, over the eleven year period ending December 1948, the net amount of operating differential subsidies paid to the Maritime companies by the United States Government averaged only $3,228,000 per year, approximately the cost of building one Victory ship. In this day of multi-billion dollar budgets, this is a very small figure. Many maritime speakers have pointed out that in 1949 the total operating differential subsidy paid to the U. S. Merchant Marine was less than the amount of subsidy paid out by the Government to the makers of cheddar cheese! With a more stable Government shipping policy and the healthier shipping industry that would result, even this amount might well be reduced. The sum is very small, too, compared to the vast amounts which we have twice had to spend in times of emergency in frantic attempts to make up for our shipping deficiencies.
It should also be remembered that there are very few foreign countries which do not pay some subsidies to maintain their Merchant Marines, subsidies which they consider necessary for their national securities in peace and war. Furthermore, it should not be forgotten that shipping is a service industry, and that practically all such industries are maintained by the public by fixed rates, special privileges, or some other form of Government aid or control. Why should shipping be an exception?
For centuries, countries with any seacoast whatever have had merchant shipping as a valuable industry in itself, and also to keep their import and export trade independent of complete outside control. As wars have become national rather than purely military affairs, merchant shipping has assumed an increasingly important role in the logistics of war. Twice in a generation America has found herself woefully deficient in this regard; yet there are those who still say that next time it will be different. We are now facing another emergency—one, we still hope, of a far less extensive nature—in the Korean situation. And once again we find ourselves in need of increased shipping capacity for military purposes. Once again we call on, not our allies—although these nations have no similar emergency needs as would usually be the case—but our own Merchant Marine.
If we are so blind that we cannot look back thirty-five years, or ten years, or even a few months, and see what experience has to tell us regarding our Merchant Marine’s role in our national defense and security, how can we trust our foresight which, to be a guide of equal fidelity, must see clearly and infallibly many decades into the future?
History could not speak louder than it does for an adequate, well balanced American Merchant Marine.