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The Rise and Decline of U.S. Merchant Shipping in the Twentieth Century, Pedraja, Rene De La, 1992, Twayne Publishers, New York, New York. Pages 54 to 58

The Shipping Board in World War I

The law creating the Shipping Board had been approved on 7 September 1916, yet four months passed without any action. Finally, in January 1917, the five members of the Shipping Board took office, with William Denman, an admiralty lawyer, as chairman. Four precious and irreplaceable months had been lost, and not even Germany’s declaration of unrestricted submarine warfare on 31 January could galvanize the Shipping Board into action; its last commissioner, because of an unexpected resignation, was not appointed until March. When Congress declared war against Germany and the Central Powers on 6 April 1917, the Shipping Board was not at all prepared to address, much less solve, the tremendous wartime shipping crisis.

Ten days after the declaration of war, the Shipping Board used the authority in the 1916 legislation to create a subsidiary, the Emergency Fleet Corporation. Originally designed to study and award contracts for shipbuilding, the Emergency Fleet Corporation and its parent soon realized that the government would have to embark on a massive construction program of its own. All available shipyards were booked sold for years with foreign orders for merchant ships and navy contracts. The role of the Emergency Fleet Corporation changed from being a bureaucratic office to being the largest industrial enterprise of the war. By now serious doubts existed over the capacity of lawyer Denman to conduct the gigantic shipbuilding program, and in April Major General George Goethals was brought in as general manager of the Emergency Fleet Corporation, with full authority over shipbuilding but subordinate to Denman, who was its president.

Gen. Goethal’s credentials were impressive: in addition to having had a distinguished military career, he had overseen the construction of the Panama Canal. Goethals was also accustomed to running a one-man show without interference from anyone, making a clash with his weak superior Denman inevitable. The rivalry between the two compounded the earlier four months’ delay in getting the Shipping Board organized. If the Wilson administration had wished to use Goethal’s extraordinary organization talents and driving force, he should have been put in charge either of the Shipping Board or of an entirely separate agency devoted exclusively to shipbuilding. Instead, his subordinate position of general manager was guaranteed to generate the maximum strife; soon the Shipping Board was divided into Goethals and Denman factions, and the controversy surfaced in the press starting on 26 May. Last-minute efforts to patch up the differences merely prolonged the crisis, the finally President Wilson intervened to accept the resignation of both Goethals and Denman on 24 July. (13)

The vast amounts of money, resources, and personnel the government had poured into the Shipping Board and the Emergency Fleet Corporation had helped them grow into strong organizations, but the fact remained that the Denman-Goethals controversy had resulted in the misuse, if not outright loss, of six more months. President Wilson at last found the right man for the job, appointing Edward N. Hurley as the new chairman of the Shipping Board and president of the Emergency Fleet Corporation. Hurley took office on 27 July 1917 and promptly established clear lines of authority for the subordinate managers. A successful businessman with prior government experience, Hurley was a driving, energetic individual who was happy to surround himself with highly competent people. Once Hurley was in charge, the United States rapidly began to catch up on all the lost ground and wasted time.

The shipping difficulties were tremendously compounded by the U.S. entry into World War I on 6 April 1917. Hurley inherited the large and apparently insoluble problem of carrying and supplying U.S. troops. To transport General John J. Pershing and the vanguard of the American Expeditionary Force to France, the Shipping Board had to strip the coastwise and intercoastal steamship companies like Luckenbach, American-Hawaiian, and the Ward Line of their passenger liners and add three of the navy’s four troop transports, one of the U.S. - flag passenger liners of the International Mercantile Marine, and two passenger-cargo ships of the United Fruit Company. The motley flotilla sailed under U.S. Navy escort on 14 June but it was unable to carry the whole force. As only one of the ships had been designed for transatlantic travel, they were simply too small. Reluctantly the Shipping Board had to turn to British-Flag ships, including those of the International Mercantile Marine, to transport the overwhelming majority of the American Expeditionary Force, with Navy escorts along part of the voyage being the only U.S.-flag Participation. (14)

The Shipping Board had no time or resources to build passenger liners, because each boatload of American soldiers delivered by the British ships to France increased the pressure to supply larger amounts of supplies and equipment. Quite naturally, the Shipping Board focused almost exclusively on freighters for its shipbuilding program. The shortage of freighters, rather than abating with the delivery of new ships, became more critical as the war continued, because Gen. Pershing gradually shifted his target goal from a 60-division, to an 80-divison, and finally to a 100-division army. The fear always remained that whenever the war ended, Britain would use its near-monopoly over passenger liners to blackmail the United States by refusing to return home the million American soldiers in France; if the Shipping Board refitted freighters at immense cost into troopships, then the gap left in commercial trade routes would promptly be filled by the British steamship companies eager to regain control over the world’s commercial sea lanes. (15)

Distrust of British imperial and commercial designs never left the Shipping Board or the Wilson administration, but it could not shake the determination to field and support the large army that was needed to defeat Germany in France. All vessels already existing or under construction were mobilized by the Shipping Board in a three-step process.

The first measure was to commandeer the German and Austrian vessels interned in American ports since the outbreak of World War I in 1914. Customs officials seized the 97 vessels on 6 April 1917. The day of the declaration of war, but some of the German crews still managed to damage the ships. All the enemy ships were welcome, and in tonnage they vastly exceeded the prewar U.S.-flag foreign trade fleet; particularly valuable were the passenger liners, including the Vaterland, renamed the Leviathan, the second largest ship then afloat in the world. By midsummer 1917, the German ships were repaired and put back in service under the U.S. flag, a task complicated by the location of many of these ships in overseas possessions ranging from Puerto Rico to the distant Philippines and Samoa. (16)

The second step was the requisition on 3 August 1917 of all vessels under construction in U.S. shipyards, except for U.S. Navy orders. Allied countries and many neutral nations had placed considerable orders for ships, to the point that the shipyards were booked for years to come. Hurley realized upon assuming office that his backlog would not allow the Emergency Fleet Corporation to carry out an efficient shipbuilding program, and hence he requisitioned the 431 hulls under construction. In effect, the government took control of the private shipyards, which, although technically still under private ownership, now could be coordinated into the larger shipbuilding program. Only navy orders were spared, and the navy’s own yards continued to work feverishly on military construction.

The third measure came on 12 October 1917 when the Shipping Board requisitioned all U.S. -flag ships over 2,500 deadweight tons. Prior that date, the Shipping Board had requisitioned individual vessels from steamship companies for specific voyages or indefinite periods, but by the last measure the Shipping Board in effect took full control of the entire oceangoing fleet of the United States, both in domestic and foreign trades. The owners of the ships became operators for the Emergency Fleet Corporation and were very generously compensated for the use of the ships by special expense-sharing arrangements, but full authority to allocate the vessels rested with the government. (17)

The Shipping Board now had to coordinate the movements of the seized German ships, the 431 hulls requisitioned and soon to be completed, and the vessels from its own rapidly growing shipbuilding program. Primary responsibility for allocating and controlling the vessels assigned to the private operators full initially to the special Division of Operations created within the Shipping Board in September 1917. This division essentially took care of the government-owned or requisitioned fleet; to deal with the skyrocketing freight rates in neutral vessels, the Shipping Board created a separate Chartering Committee shortly thereafter. No chartered vessel could clear a U.S. port unless its charter had first been approved by the Chartering Committee; this power was used to force neutral vessels at reasonable rates into those routes that had been neglected but that were considered essential for the war effort and for the supply of raw materials into the United States. (18)

Coordination between the Chartering Committee and the Division of Operations was a time-consuming task for the Shipping Board, which was enmeshed in countless technical and commercial issues. Chairman Hurley decided the time had come for some wise delegation, and on 11 February 1918 he created the Shipping Control Committee and placed it under the most prestigious American steamship executive of the day, P.A.S. Franklin, who stepped down as president of the International Mercantile Marine for the duration of the war. Hurley made the appointment on his own because he feared that some past squabble might lead President Wilson to block the appointment, but soon the president became a strong believer in Franklin’s abilities. Franklin introduced a very simple principle: All merchant ships belonged to a single pool and were utilized as soon as the need to move cargo materialized. All departments and agencies of the government forwarded to Franklin their shipping needs, and he made sure the ships appeared and the cargoes were delivered. In Hurley’s term, Franklin was a “shipping dictator” who with the full backing of the Shipping Board strove for the most efficient allocation of all merchant vessels. As a seasoned steamship executive, Franklin performed the delicate chess game of moving the right ships around the world to pick up and deliver the cargoes without wasting time or equally valuable space. (19)

The Shipping Control Committee’s outstanding success could not hide the fact that the United States was critically short of ships and that repeatedly during the war it had to turn to British and other Allied tonnage to move not just the American Expeditionary Force but also cargoes vitally needed both in Europe and the United States. The submarine campaign made the shortage more critical, but even without submarines the shipping shortage was real enough. The ultimate solution lay in building more ships and in training more American to become seamen and officers in the merchant fleet. A crash recruiting and training program produced large numbers of competent seamen, but foreign crews continued to remain vital throughout the war; it was simply impossible to create such large numbers of experience seafarers on such short notice, no matter how much money and personnel the government suddenly deployed to meet the crisis situation. (20). Even an intensive shipbuilding program could not compensate for many years of maritime neglect. Hurley launched the Emergency Fleet Corporation into a full-speed-ahead building program that eventually was highly productive, but nothing could hide the fact that the United States rode the waves to victory in World War I on British ships. With the existing shipyards clogged with orders, The Shipping Board had to assume the immense start-up expenses of creating its own yards from scratch. Government yards were established throughout the country, but the greatest concentration of the, including the largest (Hog Island), lay within 50 miles of Philadelphia. If the shipbuilding program had begun promptly upon the creation of the Shipping Board in September 1916, a larger number of ships would have been delivered sooner, but instead the program was barely getting off the ground by late 1917. When the war unexpectedly ended on 11 November 1918, the Emergency Fleet Corporation had laid a little over 1,400 keels but delivered only about a third that number of completed ships. Yet the shipbuilding program was in full swing at last, and Hurley had to decide what the Shipping Board should do about huge projected output for 1919. (21)

Notes to the original text:

(13) Edward N. Hurley, The Bridge to France (Philadelphia: J.B. Lippincott, 1927), 27-29; Safford, Wilsonian Maritime Diplomacy, 95-103.

(14) Kaufman, Efficiency and Expansion, 120-22; Baughman, The Mallorys, 250.

(15) Hurley, Bridge to France, 120-25, 129-32; Safford, Wilsonian Maritime Diplomacy, 176-77, 180.

(16) Report, 8 April 1917, and “Data on German vessels seized by the United States,” Secret and Confidential Correspondence of the Office of the Chief of Naval Operations and the Office of the Secretary of the Navy, Record Group 80, National Archives.

(17) Hurley, Bridge to Finance, 31-38-, 42-44.

(18) Baughman, The Mallorys, 25-155; Hurley, Bridge to France, 94-100; Link, Papers of Wilson, 45: 42-44.

(19) Baughman, The Mallorys, 255-58; Hurley, Bridge to France, 101-5.

(20) U.S. Shipping Board, First Annual Report (Washington, D.C.: Government Printing Office, 1917), 15-16; Hurley, Bridge to France, 209-214.

(21) Robert B. Albion, Seaports South of Sahara: The Achievements of an American Steamship Service (New York: Appleton-Century-Crofts, 1959), 71-79; Kaufman, Efficiency and Expansion, 188-90.

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