Since Mahan’s time, it has been recognized by the men responsible for our naval policies that a vigorous merchant fleet lies at the basis of sea power. Mahan saw that sea power is “commercial before it is military.” His successors in the present day will add that the American merchant marine is not only fundamental to American sea power as such, but essential to the security of this country.
The world-wide character of recent wars has made sea power, because of our insular position, indispensable to our military success. The merchant marine has become not merely a theoretical foundation of sea power, but a practical weapon of the most profound and immediate importance. It has become a fourth service, equally in the trains of the other three.
Specific Objectives in the Mobilization of Shipping
The conduct of war gives rise to the most urgent demands for shipping—demands which are placed in sharp conflict by the invariably short supply. In modern war, largely a contest of logistics, there is almost no campaign which may not be carried out earlier, or with greater assurance, if the capacity to move goods is increased. Accordingly, every military demand is based on the ideal and is swollen beyond the possibility of satisfaction. By some means or other, tonnage must be allocated so that the essentials are always served. Any attempt at control must not only deal with competition among the armed services but must also reserve facilities for important civilian cargo.
In World War II, American shipping had five major “accounts”: to carry exports for the armed forces, for the lend-lease program, for the civilian requirements of allies, and for the program of trade with Latin America, and to carry imports of war materials and other essentials. Competition for service was forceful. The Army and the Navy inevitably could not resist the temptation to bid against each other to obtain the ships they felt their operations deserved. The need of our allies abroad for supplies, while it was also a military need, made itself felt through civilian channels. Supplies to American industry and “normal” trade, for the preservation of the economies of the United States and her neighbors, both created additional demands from civilian quarters, which were not easily reconciled.
As a rule, no demand was completely met; nobody got all he wanted or needed—not even the military services. At various times all the “accounts” occupied substantial percentages of the American merchant fleet. It is significant that civilian activity in time of war is higher than is generally imagined. Lend-lease alone required at one time as much as 30% of American carrying capacity, and Army and Navy cargoes occupied at their peak during 1944 only 74% of capacity and during other years as little as 54%.
Clearly one of the first problems of the government in war is to expand our carrying capacity. Our tonnage must be increased, of course, and this indicates a vigorous construction program. Moreover, from the first, we must get the most out of the ships available; this calls for the improvement of operating efficiency and the coordination of far-flung resources to the end that need in one place be not accompanied by waste in another. Not only the ships themselves but also the shore facilities, on which they largely depend, must be brought into the same general planning; for a ship delayed in obtaining repair or berthing services is for the time being of as little value as though it had been sunk.
Ships need men, and the large facilities maintained ashore to service the ships and handle the cargoes need men fully as skilled as those who go to sea. Shipping as a whole is a highly specialized business; it requires experience and refuses to accommodate the assembly-line mentality. A ship, ranging far from its management, continually encounters new problems which demand prompt decisions with limited information; mistakes are highly uneconomical. It is therefore necessary in wartime to secure the services of virtually all the people in the industry. But experience is institutional as well as personal; and so it is not enough to employ these people as individuals; it must also be a major objective to maintain tested business and employment relationships within the operating structure.
Government Agencies in the Control of Shipping
Since 1936, the federal government has given substantial direction and encouragement to the maritime industry. In that year the United States Maritime. Commission was established under the Merchant Marine Act of 1936, which has as its object the development of a merchant marine strong enough for both our commerce and our defense. The principal feature of the Act is a system of construction and operating subsidies which seeks to place the American operator on a parity with the foreign operator.1 The Maritime Commission was given the administration of these subsidies.
The Commission was also given long-range planning functions; it was directed to make and maintain certain surveys, not only of the current state of the American merchant marine, but also of technical and other developments of importance to shipping. Of specific importance is the provision that the Commission shall make plans for the rapid development of shipping in time of war and for the building of ships suitable to our national defense needs.
The Navy also has participated in planning for our merchant marine in at least two ways—by its own war plans and surveys and by the participation of the Secretary of the Navy in the administration by the Commission of the payments for national defense features provided in the 1936 Act.2
In May, 1950, under one of the plans resulting from the work of the Hoover Commission, the Maritime Commission was abolished and its functions transferred to two new organizations. The Federal Maritime Board and the Maritime Administration were established in the Department of Commerce, the former to exercise the regulatory and subsidy functions of the Commission with almost complete independence, and the latter to exercise, under the Secretary of Commerce, the promotional, operational, and administrative functions of the Commission. The chairman of the Board was made sole head of the Administration. Both new bodies have significant roles in planning. But that of the Administration is more important to the immediate problems of mobilization, for the Administration maintains the reserve fleets required by law3 and conducts the survey and design functions.
Wartime Planning
American shipping has had a variety of experience in wartime, of which the experience in World War II is generally regarded as gratifying.4 This latter experience commenced with the Maritime Commission, passed through an advisory board stage, and culminated in the familiar War Shipping Administration.
Some months before America entered World War II, the Maritime Commission was authorized to administer a system of warrants. The system, in comparison to its British precedent, was a weak one. It provided for the issue of warrants commanding priority in materials, services, and husbanding for ships, after the operators had agreed with the Commission upon restriction of routes, rates, cargo, or other matters, the terms being in the discretion of the Commission. A stronger measure, which the Congress was unwilling to visit upon the civilian economy, would have been to require the warrant as a condition to any operation at all.
The day after Pearl Harbor, the President created a Strategic Shipping Board, composed of the Chairman of the Maritime Commission, the Chief of Naval Operations, the Chief of Staff of the Army, and Mr. Harry Hopkins, to establish policies and plan allocation of shipping and to coordinate the activities of the Maritime Commission and the War and Navy Departments. The operation of shipping remained in the hands of industry as before. The Board proved ineffectual; however sound the policy, there was no way to get it executed.
The great difficulty with the existing Commission was that action depended upon the votes of five independent commissioners. In February, 1942, the President set up the War Shipping Administration in the Executive Office of the President and made the Chairman of the Commission the Administrator. WSA was given the necessary powers5 of the Commission to supervise completely the wartime use of the merchant marine. The Commission was left to concern itself with a vast building program. For a year or so the future of WSA was uncertain; the principal attacks came from the Army and the Navy, both of which made bids to abolish it and to take control, their position being that they had been left unable to plan their campaigns with assurance of adequate transport.
About the same time as WSA, there was established by the Army and the Navy a Joint Military Transportation Committee to coordinate the demands of the services. In time it was found convenient to invite representatives of WSA to participate in the activities of this Committee, and it was this practice and the understanding that resulted from it which ultimately eased the military pressure on WSA.6
It is worth noting how much the reorganization of the Maritime Commission resembles the wartime structure. The President remarked upon this in transmitting Reorganization Plan No. 21 to Congress but expressed no opinion on the wartime utility of it. The flexibility of the new arrangement permits it to cope with critical conditions more readily than could the old Commission. Indeed, for quite some time during the Korean crisis, shipping problems were handled by the organization existing before the crisis. The Military Sea Transportation Service planned military transport completely, and the Maritime Administration withdrew ships from the reserve fleet as they were needed and made them available for charter. The question as to how the Maritime Administration would cope with the problems of war when they had been aggravated by accelerated operations and shortage of fast shipping was answered in March, 1951, when the National Shipping Authority was established within the Administration upon a plan set up by an Advisory Council of Shipping Executives.7
The National Shipping Authority is headed by a Director subordinate to the Administrator. It is geared to the peculiar problems of crisis, and it does not duplicate, but rather relies upon, the ordinary functions of the Administration. When the Authority was actually established it was probably not yet necessary from an operational standpoint, although some need for allocation of shipping had already been felt. Its timely establishment reflects two concerns; first, the desire to have the machinery perfected at a time when it might be needed; and second, the struggle with the military for control, which is discussed below.
Wartime Operation
At the outset of World War II, while a great building program was undertaken by the Commission, the immediate goal of procurement was to obtain capacity; this was the first function of WSA. It was carried out in three ways: (1) upon its creation WSA received the vessels to which the Commission held title, and as further vessels were completed they likewise were turned over; (2) by taking control of the industry, WSA procured the existing commercial capacity; and (3), finally, WSA seized alien vessels lying idle in waters of. United States jurisdiction, under a delegation from the President of authority conferred by Congress.
The present improved structure of maritime responsibility is adapted to a rapid procurement program. Korea itself has raised no difficulty thus far; there have been enough 18-knot ships in the reserve fleet to augment the normal commercial capacity to the point where all demands can be met. But the general emergency, of which Korea is a part, has required a long look. The prospective usefulness of a large part of the dry- cargo capacity in our reserve fleet has been cast in doubt by increased submarine speeds and other military developments, and the Maritime Administration is engaged in a new program of building fast cargo ships; at least fifty have been authorized.
The key to WSA operation of ships during World War II was the mechanism of general agency. Only the ships themselves were taken on requisition; other facilities were left unaffected. Most ships were taken for charter only; the few taken for title were mostly so taken in order to be turned over to our allies. A general agency agreement was made with each operator; in addition, there were berth agency agreements and still other variations for minor vessels and services. All were contracts of adhesion; the terms were uniform and the fees were established by regulation.8 “Fixed fee” was the compensation principle: fees were set with respect to specific cargoes and operations.9 Each operator then continued to operate the same ships—but without receiving the profits, and subject to the control of the Administration. From time to time additional ships were allocated to the various agents for operation.
Allocation of capacity was the important policy problem of WSA, and it took two forms: direct operational control of many ships was granted the Army or the Navy; other demands, military and civilian, were met by allocation of tonnage only.
It was principally the job of management which occupied the energies of WSA. While the general agent saw to the immediate operational needs of the ships, there were many matters such as routing and scheduling, repair and maintenance, insurance and fiscal affairs, and, to some extent, labor relations and personnel, that had to be dealt with on a national basis. Accordingly, WSA was considerably sub-divided.
The Recruitment and Manning Organization (RMO) undertook to persuade young men to enter the training programs and older men to return to the sea. Although normal relations were maintained between the agents and the unions under existing contracts recognized by WSA, both union and agent frequently failed to be able to man a ship; it was then that RMO would supply men and transport them to where they were needed. The Maritime Labor Relations Organization adjusted grievances, facilitated collective bargaining, worked to standardize wage scales and working conditions, and maintained liaison with the War Labor Board. The Organization for Fiscal Affairs had problems ranging from just compensation to freight rates and insurance. These organizations, with such others as the Training Organization, Maintenance and Repair Organization, the Division of Foreign Service, and the Food Control Division, will go far to suggest the range of WSA activities and the mechanics of carrying them out.
The Korean Campaign
Before the creation of the National Shipping Authority, the Maritime Administration operated no vessels, although it maintained the vessels in the reserve fleets. The Administration ordinarily charters many vessels to private operators for commercial operation; to meet the increased demands upon the operators in the early months of the Korean campaign, it withdrew more vessels from the reserve fleets for allocation to operators according to its normal charter policy10 and the operators’ willingness to receive the vessels.11 Charter to the operators was bareboat.12 The operators time-chartered or voyage-chartered to the Military Sea Transportation Service, thus giving that organization full operational control for a flat rate without concern for such problems as personnel, maintenance, and husbanding. This is an arrangement that has moved a great deal of material and done so very rapidly and efficiently. It is, however, a system which would have to be varied if shipping were in short supply, unless military control is to be conceded. We have actually reached short supply if only the faster and more economical ships are considered; the cargo ships remaining in the reserve fleets are almost entirely 10-knot Liberties.
When government and industry began to feel the need for a new central authority, general satisfaction with WSA suggested immediately an organization similarly conceived. Certainly the composition of the Advisory Council would not lead it to suggest a more complete taking or a stronger control than was achieved under the agency system in World War II.
As finally worked out, the National Shipping Authority adopts the mechanism used in World War II and differs primarily i
n being a subordinate part of a regular peacetime agency, utilizing the facilities of that agency, some of which have themselves grown out of the wartime structure. Thus property and supply, legal matters, training, and fiscal matters, including insurance, will be handled in offices outside the Authority itself as a part of the Maritime Administration’s normal business. The Authority has four main sub-divisions; the Office of Ship Requirements and Allocations, the Office of Ship Operations, the Office of Maritime Labor Policy, and the Office of Tanker Services. Its concentration upon primary operational problems is apparent.
New agency agreements have been worked out with representatives of industry. These follow closely the agreements of World War II. A number of vessels were already in operation under the new agreements before rates had been agreed upon,
The Struggle for Civilian Control
Certainly the most controversial matter in shipping in recent years has been the extent of military participation and control. As a result of the unification policy, lines have been more sharply drawn and civilian partisans have been able to focus their attacks upon a single agency. In October, 1949 the Secretary of Defense established the Military Sea Transportation Service (MSTS) to unify the water carriage activities of the various armed forces, and by March, 1950 this agency had absorbed the seagoing part of the Army Transportation Corps as well as the Naval Transportation Service. MSTS is a part of the Naval Establishment. This new organization, with its undoubted efficiency in military operations, has given concern to all those interested in civilian control of shipping.
MSTS operates nearly 200 non-auxiliary merchant-type ships, carrying cargoes typically civilian in point of facilities and handling required, but military in the sense that they supply the military forces overseas. This “competition” has given rise to heated public criticism and has been the principal focus of a Senate committee investigation.13 But present competition itself is only one source of concern; some men in the shipping industry are inclined to point out that the real concern is with the possibility of military control in war, and with the further possibility, not unrelated to this, of some form of complete nationalization.
MSTS has become the basis of such plans as the Department of Defense has for control of shipping in wartime. Its war plans are not released. Under a directive of the Chief of Naval Operations, a part of its mission is “to prepare plans for its employment expansion in time of national emergency based upon the policies and directives of the Joint Chiefs of Staff and appropriate agencies of the Department of Defense and to maintain a basic organization capable of expansion to implement such plans; and to consult with the appropriate agencies of the Department of Defense in coordinating execution of approved emergency plans requiring the services, facilities, and personnel of commercial sea carriers and in negotiating therefor.” This instruction is sufficiently broad to excite curiosity.
The idea of absorption or control by the Navy is not new. There had existed before Pearl Harbor a plan for the Navy to take charge of American shipping, but it was abandoned before war began. And in a report made by the staff of the Hoover Commission, it was recommended that the functions of the Maritime Commission be placed preferably in the Navy Department, and certainly there in time of war.
Men in the industry make no secret that plans for the National Shipping Authority were rushed, in part, to block military control, which might very well have resulted from the default of the industry and civilian agencies.-Some have been pessimistic about the possibility of “sabotage” to the Authority even after its establishment. There is evidence, however, that the Maritime Administration has taken the offensive; specifically, the Administration is recovering control of vessels previously chartered to MSTS.
The complaint of the civilian is that MSTS is wasteful; that each office contains two men, one from industry with the know-how, and one from the Navy with the authority. At the same time it is generally admitted that MSTS has done a good job and that it will in the future carry all military cargo. Most operators do not care where the control comes from if it is competent and reasonable. Their objection is not to the present operation but to the future portent.
Powers Available to Control Shipping
The Merchant Marine Act of 1936 gave the Maritime Commission the power, in time of war or national emergency proclaimed by the President, to requisition ships of United States registry either for title or for charter.14 The Commission could also terminate its charters to private operators in time of emergency without cost to the government and on such notice as it saw fit. In reorganization, those powers passed to the Secretary of Commerce for delegation to the Maritime Administrator. The President’s proclamation of national emergency in December, 1950, makes these powers presently effective. It was primarily by virtue of the requisition power that YVSA acquired all major shipping during World War II. That power is fundamental to the agency system, which is predicated upon complete government control of the ships.
The Defense Production Act of 1950 grants the President the power to requisition “equipment ... or facilities necessary for the . . . operation of such equipment,” and empowers him to determine “just compensation.” This power, so far as it concerns shipping, has been delegated to the Under Secretary of Commerce for Transportation, with authority in him to delegate further. Clearly the power is adequate to take, and so, if properly used, to control the shore- side facilities essential to shipping.
Likewise, under the Defense Production Act of 1950, the President was given power to establish priorities in contract performance for national defense and to “require acceptance and performance of such contracts or orders in preference to other contracts or orders by any person he finds to be capable of their performance, and ... to allocate materials and facilities in such manner, upon such conditions, and to such extent as he shall deem necessary or appropriate to promote the national defense.” With respect to shipping, this power has been delegated upon the same terms as the power to requisition.
Undoubtedly the power presently exists to control shipping and allocate it among various demands. Considerable power of control is, of course, implicit in the power to requisition the ships themselves. The power to requisition materials and facilities and the power to allocate upon conditions provide the basis of a warrant system similar to that once provided by the Warrant Act.15 But even stronger methods are provided: with the power of requiring acceptance and performance of contracts according to priorities assigned, the operator could be given the choice of accepting a given cargo or allowing his ships to remain idle.
Although charters may be controlled without the necessity of resorting to requisition, both the warrant system and the system of cargo priorities are negative forms of control. They offer no means of getting real coordination in all areas by central planning. This is probably quite satisfactory so long as shipping is not too tight and ships are ultimately available for all needs, but when efficiency becomes vital it will scarcely serve, and requisition for operation by NSA will be inevitable.
The powers of MSTS run only within the Department of Defense. Its power to plan has already been noted. It has power to charter vessels or space, but it does not have the power to allocate capacity among the various services; the Joint Military Transportation Committee still functions, and MSTS, when faced with demands beyond its facilities, refers decision to that group.
Industry Relations with Government
In the mobilization of shipping the accent is on preserving normal relations. Shipping is a specialized industry and it finds itself in the hands of the same people in wartime as in peacetime. The Maritime Commission has always found its leadership in the shipping industry, and WSA, during the war, was run primarily by shipping executives. It is the shipping executives who have now planned concretely for the future wartime control of the industry.
The business of the Maritime Board and the Maritime Administration is carried on centrally with the executives of the industry and their representatives in Washington. So good have relations generally been that when requisition by WSA first took place, the operators readily proceeded as agents despite the fact that agreements were not worked out until later. There need be no delay in concluding agreements in the future; however, National Shipping Authority has already concluded some agreements, and the terms stand ready for general adhesion in case of need. These terms have been worked out, as were earlier ones, in conference with representatives of industry.
Notwithstanding general harmony, there are vexatious problems that arise from the discretion of the Administrator. Principal among these has been the determination of just compensation or fair value. WSA fixed compensation by negotiation with ship owners, and general agreement was ultimately reached. We have the word of the Administrator that the delay was long and not without hardship. Many disagreements were settled in negotiation. Others reached the federal courts under provisions for part payment in cases of dissatisfaction and for the establishment of a fund against which a libel could be brought. The action of the Administrator was generally vindicated.
An important advantage of the operating system established in World War II was that the relationship of the shipper to the operator remained unchanged. To be sure, business was not so simple as in peacetime, but it moved in the same channels. If the item to be shipped was on the approved list issued by WSA and if the agent had the space available under allocations, it was accepted for carriage. Frequently shipments were pro-rated, and priority was given according to ratings on the approved list; thus a shipment might be broken up and part of it held for a later voyage. All this was administered by the agent-operator, and complaints were taken up with the local representatives of WSA. Certainly the present situation demands no more drastic measures.
Maritime Labor and Military Control in Wartime
Service interest in the problems of wartime merchant shipping has unfortunately centered on a few matters of high emotional content. Some of these matters are of psychological importance only and the others are bound up in the disposition of broader questions, such as whether the merchant fleet shall remain civilian and whether its seamen and shoreside workers shall receive substantially different treatment from that given other civilian workers. The questions commonly asked in the service center on maritime labor relations, the pay of merchant seamen, and the control of merchant vessel operations in forward areas.
Labor Relations
While the relations of seamen to their employers may present peculiar problems it must be said at the outset that the labor relations of waterfront workers have no place in a study of this kind. Waterfront labor must be considered as a part of the national non-maritime labor picture as a whole. There is not justification for dealing differently with the problems of longshoremen than with those of the draymen and railroadmen who put the cargo on the piers. Despite our history of unsettled waterfront conditions during the past several peace time years, there is no reason to expect a wartime strike on the waterfront, nor, in the event of one, to deal with it differently from the way the government now deals with strikes in vital industries. Its powers to seize and control industry have been mentioned. Even in Britain, where the Merchant Navy enjoys a quasi-military status, wartime stevedoring was left on the same civilian basis as other inland industry.
Labor at sea presents somewhat different problems. It seems unnecessary to consider the possibility of strike, but union pressure aboard ship nevertheless has an undeniable effect upon operations. Naval officers in the Pacific in World War II were frequently, and doubtless rightly, aggrieved by refusals of merchant vessels to work cargo at particular times. Since extra costs were borne by the Government, it generally appeared that refusal was a consequence of reluctance on the part of the crew. Such refusals were occasionally vexatious logistically and always injurious to morale. Certainly a study of wartime shipboard discipline (and peacetime, too) is needed. But certainly, too, military status for seamen is out. So much may be inferred from the progress of our mobilization thus far.
An unfavorable comparison is frequently drawn between the pay scales of naval and merchant seamen. The validity of such a comparison depends entirely upon whether a military status is to be imposed upon merchant seamen. It seems clearer than ever that it is not to be. Considered objectively, there is no more reason to impose a military pay scale on seamen than on any other class of civilian workers. Indeed, it is to civilian workers that seamen must be compared, and not to military personnel. And in that comparison, it is clear why the seamen are well paid considering the risks they run. It would be anomalous indeed to reduce the merchant seaman’s pay in wartime.
It should be remembered also that merchant seamen do not enjoy military prestige, veterans’ benefits, retirement, and a number of other benefits the Navy offers its men.
Control of Operation
It is occasionally asserted that merchant vessels declined to incur particular war risks in forward areas in World War II. Such reports have been difficult to confirm, and officials of the former War Shipping Administration who were asked know of no instance of a vessel’s refusal to carry out orders because of the war risks involved. Nor did the WSA itself impose any restrictions on the areas to which its vessels could be sent. Vessels left the United States under WSA control. In principle this control was never lost, but upon entry into an operational area the vessel, like any other civilian, fell under the overriding authority of the military commander. There remained to the master only the right which he enjoys in peace and war to decline to incur certain marine risks. When the master had filed his exception, it frequently happened that he was ordered onward, regardless, with the expected results. The supposed reluctance of both vessels and seamen is effectively refuted by the history of the Murmansk run.
In short, it may be said that any major change in the status of maritime labor in war has been precluded by the decision against military operation of the merchant fleet.
Conclusion
The federal government now has the basic powers it needs to mobilize shipping in event of war. A new and specific warrant act will doubtless be easier to administer than the general provisions of the Defense Production Act, but aside from this change only small refinements should be needed, The administrative machinery set up is based on adequate experience and is even now being tested in practice. The transition of the industry to a wartime status, if it becomes necessary, should be ideally smooth.
One may now have complete confidence in the triumph of civilian control. The Navy was formerly a good deal more likely, in the event of war, to know what it wanted to do than was industry. But it was never clear that the Navy wished to do the job; what is clear is that all the services wish to know the job will be done. It is a heartening fact that the Navy and the men in industry have had a good deal of contact and consideration for each other’s problems during and since World War II, and that, as a result, they understand more about each other than they did in 1941. Enforced cooperation at this time should be no great shock to either.
The shipping industry is well prepared for mobilization, at least as to the ships now available. When the maximum is required of any industry, a great deal of central control is inevitable. The shipping industry is peculiar; there is no industry more intimately associated with the fortunes of the United States in the world at large; there is none more conscious of its high importance in time of war; and there are few more homogeneous and more accustomed to meet their problems in concert. For these reasons it is inevitable that the industry will provide itself with better leadership than can be provided for it; and it is likely that it will carry on with a minimum of friction and a maximum of local discretion.
1. Only a minority of operators avail themselves of subsidies. Many are ineligible, some are reluctant to accept the conditions imposed, and others are proud of their independence.
2. The Secretary must approve plans before the Commission may undertake to pay for national defense features.
3. These are required to be maintained in such strength as the Secretary of Defense deems to be suitable for national defense purposes. Seven fleets are maintained, comprising about 2,000 ships.
4. There has never since been much sentiment for anything like the United States Shipping Board of World War I, which, through its Emergency Fleet Corporation, took over and operated directly the entire major maritime facilities of the nation, both ashore and afloat; the confusion of trying to make it work was equalled only by that of trying to unscramble the affair at the end of the war.
5. WSA undertook to represent the United States in the coordination of Allied shipping through the Combined Shipping Adjustment Board. There was also a Combined Military Transportation Committee.
6. WSA was given power to “control, operate, purchase, charter, requisition and use” as well as powers to allocate, administer the Warrant Act, provide insurance, and represent the U. S. with foreign shipping control agencies. Close liaison was directed, not only with the military forces, but also with the Director of the Office of Defense; Transportation and the Chairman of the War Production Board.
7. In early December, 1950, the Secretary of Commerce established a Transportation Council, composed of heads of the transportation activities in the Department of Commerce, to advise the Under Secretary on problems of mobilization. The Maritime Administrator called in a group of shipping executives and formed an eleven-man Shipping Advisory Council with the specific duty of setting up an organization plan for a National Shipping Authority, which would be the Administrator’s contribution to the “policies and programs” of the Transportation Council. It was from the work of this Council that the new structure took shape.
8. The general agency agreements fix operational authority, prescribe accounting and reimbursement, and fix liabilities of the parties in various contingencies and responsibility for insurance. Berth agency agreements limit the agent’s authority more closely; the agent, for instance, is not responsible for procuring the crew. Ships operating under general agency were assigned, for most purposes, to appropriate berth agents while in a particular trade in which berth agents were operating.
9. Agents are paid a flat sum per diem for husbanding each ship, a flat sum per diem for acting as accounting line for the ship, a flat sum for each call at a U. S. port and likewise for each other call at a port, and an amount based on cargo at a rate by tonnage or revenue varying according to type of charter, whether the cargo is military, whether the trip is outward or inward, and whether the cargo is general, homogeneous, bulk, or ad valorem.
10. The Merchant Marine Act of 1936 forbids charter to anyone lacking capital, credit, or experience. The Maritime Administ rat ion follows a policy of not chartering to any operator who does not own ships. This means that an operator who acts as general agent for other operators and also charters some ships from them for operation but owns none himself, may not operate on charter from the Administration.
11. Not all operators will accept these charters. Although they are not considered profitable they do help reduce overhead—and there are, of course, patriotic reasons. But a few operators hold out because of their strong feeling against charter from the Maritime Administration as a substitute for purchase; they insist operators should be willing to buy if they intend to stay in business.
12. A “bareboat” charter is a charter, on a time basis, of a vessel without crew, provisions, stores or bunkers supplied; the charterer mans and supplies the vessel and enjoys the same full control as an owner. Under a time charter the owner mans and supplies the vessel, and the charterer has control of her cargo and operations for the specified time. The division of duties is the same under a voyage charter as under a time charter, but the operations of the vessel and the term of the charter are limited to the specified voyage.
13. The industry has recently been placated by a new policy of MSTS giving priority in MSTS cargoes to vessels as follows: (A.) most outbound shipments of military support cargo: (1) MSTS commissioned (USS) and in-service (USNS) vessels; (2) U. S. flag vessels privately operated in berth service; (3) privately owned vessels under time charter to MSTS; (4) government owned vessels bareboat chartered to private operators and time chartered to MSTS; (5) government owned vessels operated under general agency agreement and allocated by NSA to MSTS:—(B.) outbound Mutual Defense and Assistance Program cargo offered for shipment in U. S. flag vessels: (1) U. S. flag vessels privately operated in berth service; (2) privately owned vessels under time charter to MSTS; (3) government owned vessels bareboat chartered to private operators and time chartered to MSTS; (4) government owned vessels operated under general agency agreement and allocated by NSA to MSTS; (5) MSTS commissioned (USS) and in-service (USNS) vessels.
14. The Commission was given power to determine the fair actual value at the time of taking, in the case of taking for title, or just compensation for use, in the case of charter
15. A new warrant act was introduced in 1951 but failed to pass.