Open main menu

1922 Encyclopædia Britannica/Shipping

SHIPPING (see 24.983). In the decade following 1910, the influence of the World War had a profound effect on the shipping industry. Nor can it be limited to the period between the beginning of Aug. 1914 and Nov. 1918, when the Armistice was signed. For many months after the cessation of hostilities, a great strain was imposed on the British mercantile marine in the repatriation of millions of men. Goods which could not be transported during the war were waiting in vast accumulations to be carried, and in 1921 the effects on shipping were still being shown. In fact, so far-reaching were the effects that they were certain to be felt for many years.

(1) United Kingdom

The year 1910 was, judged by the ideas then ruling, a comparatively satisfactory one for British shipping, although the industry did not entirely escape the consequences of a strike of coalminers caused by difficulties traceable to the operation of the Eight Hours Act. In 1911 there were a number of industrial disturbances, notably in the collieries, on the railways, at the docks, among seamen and in the cotton-mills. Yet rates of freight were on a higher basis than for some years previously. The time charter rate, i.e. the monthly rate of hire per ton dead-weight for ordinary cargo steamers, may be taken as a good barometer of the condition of freight rates generally. As compared with a rate of about 3s. a ton, or rather more, ruling in 1910, the time charter rate rose to about 5s. in 1911. There was a further upward movement in 1912, which was regarded as a very satisfactory year for the shipping industry. Time charter rates ranged from about 4s. 6d. a ton to 7s. 6d. Employment for shipping was good, although, as some set-off to the increased rates, there was a general rise in working costs. In 1913 rates declined, partly owing to the increase in shipbuilding which had been carried out during the good years. The year 1914, destined to be one of the most important for shipping as for all other industries, opened with freights on a downward grade, and in midsummer the industry was in a very depressed condition. All freight rates for cargo steamers were low, and the liner companies were feeling the severe competition of the German ownerships. The two great German companies in the N. Atlantic trade—the Hamburg-Amerika and the Norddeutscher Lloyd—had been for years claiming a larger share of the passenger traffic. In the summer of 1914 the Deutsche-Australische Gesellschaft announced its intention of inaugurating a direct service from Hamburg to New Zealand. Discussions were in progress with the British shipping managers when war broke out.

Beginning of the World War.—Immediately a number of liners were requisitioned by the British Government for service as merchant cruisers, transports, and hospital ships. Freight markets were almost staggered by the unexpected blow which had fallen, and, at first, chartering of all sorts came to a standstill. Happily, the Government at once put into operation a scheme of war insurance on the lines of the recommendations of a committee which had been previously appointed and was presided over by Mr. Huth Jackson. These recommendations provided for the granting of war insurance on shipping by the Government up to 80% of the values. This insurance was worked through the mutual associations of shipowners which were in existence for the purpose of covering such liabilities as shipowners could not obtain under ordinary marine insurance policies. In the preparation of this scheme Sir Norman Hill, the secretary of the Liverpool Steamship Owners' Assn., had taken an active part. The shipping entered in the Liverpool Steamship Owners' Assn. represented 3,948,623 tons, and that in the Liverpool and London War Risks Assn., which included the great bulk of the liner tonnage of the United Kingdom, 6,371,329 tons.

There were also important associations of the same kind with headquarters in London and on the N.E. coast. The main result of putting this scheme at once into operation was that all ships could proceed on their voyages and others could leave without involving disaster to their owners if the vessels were captured or destroyed by the enemy. Had no such scheme been available, a great many vessels, if not all, must have been detained in port. Commerce would immediately have come to a stop. In those days it was the possibility of capture by the enemy's surface cruisers that was in men's minds: that was considered serious enough. The risk of destruction by the enemy's submarines had hardly been taken into account.

As a complement to this scheme for the insurance of hulls, there was also established a Government office for the insurance of cargo. The marine insurance market continued actively in business, but underwriters had themselves realized that bad news or heavy losses could easily have the result of forcing up rates to levels that might be prohibitive for commerce. The Government office was intended to exercise a steadying influence. It was vital that essential goods should continue to be shipped, and, if the risks were greater than insurance companies or private underwriters could bear, it was for the nation to assume them. The first rate quoted by the Government was £5 5s. %. On Aug. 8 the rate was reduced to £4 4s., on Aug. 18 to £3 3s., and on Sept. 2 to £2 2s.

All the time underwriters in the market continued to write war risks. Their rates of premium were frequently below those of the Government, and there were many risks which the Government office would not accept. For instance, the Government office would not accept lines after a ship had left port. Merchants sometimes found that larger quantities of goods had been shipped than they had anticipated, or that the values were greater. Then insurances were effected in the open market. As Germany was no respecter of the rights of neutrals, insurances were also placed in the market on behalf of steamship owners abroad. Some underwriters of insurance companies and at Lloyd's wrote war risks freely from the outset. They took big risks and made large sums of money. The premium incomes of the insurance companies writing war risks were, in some cases, as much as five times the pre-war standard. This was due not only to the demand for insurance against war perils, but also to the great increase in values of commodities which set in as they became scarce.

The Government office was inaugurated under the auspices of the Board of Trade. The services of a number of leading underwriters were enlisted. On Aug. 5 1914, the office was opened at the Cannon Street hotel and the knowledge that there was a market for the risks undoubtedly had a very reassuring effect. While credit was due to several underwriters who gave their services in the working of this scheme, much of the organization fell upon Mr. W. E. Hargreaves, a leading member of Lloyd's, who worked in close coöperation with the Board of Trade.

There were thus in existence from the very beginning of the war facilities for the insurance of ships and cargoes against all the perils that then had to be faced. There was not the same mobilization of the shipping industry.

Immediately after the declaration of war, freights remained listless. A very few shipowners were able to see what was coming, and chartered neutral steamers for “time” at the low rates then ruling, and, in the event, found the transactions very profitable. Most shipowners, however, did not foresee the extremely heavy demands which would be made by the Government upon the industry for ships for direct war purposes. Cargo steamers were requisitioned to act as colliers to the fleet and were needed to carry supplies to the armies abroad. It was not until the end of 1914 that freight rates began to move upwards. Just before the outbreak of war the grain rate from Argentina which may be regarded as a representative rate, was 12s. 6d. per ton. By the end of the year this freight had advanced to 50s. per ton. It rose again sharply in the autumn of 1915, and its movements indicated the influence of the introduction of the Excess Profits duty. On Sept. 20 of that year, when Mr. McKenna, the then Chancellor of the Exchequer, introduced the tax, the Argentine grain freight stood at 57s. 6d. per ton. Within a month it had risen to 70s., by Nov. 20 it had advanced to 85s., and by Dec. 20 to 120s. In 1916 the rate advanced further. By Jan. 20 of that year it stood at 140s. and by Feb. 20 at 157s. 6d. The rate further advanced in 1916 to 183s. 6d. Similar increases took place in other shipping trades. These increases were clearly due, in the first place, to the diminution in the supply of shipping available for commerce, which, in turn, was caused by the ever-increasing requirements of the Government, and by the destruction of shipping by the enemy, and also to the incidence of the Excess Profits duty. This tax provided the argument that the nation got the benefit of the increases. The Treasury did, but not the country which had to pay for them in the increased cost of imported commodities. It represented a form of taxation, at the best, imposed without the authority of Parliament, and the surplus remaining to the owners meant higher profits than, in pre-war years, could ever have been thought possible by them.

For nearly two and a half years the real responsibility for the shipping not requisitioned by the Admiralty rested with the Board of Trade, of which Mr. Walter Runciman was then President. The President of the Board of Trade, with his multitudinous duties of endeavouring to watch over the welfare of all industries, was obviously incapable of giving the close attention to shipping which all the circumstances demanded. The public gradually became keenly interested in the rise that was proceeding in freights and was irritated by it. As its interest developed, it grew into indignation. The matter was raised in Parliament, but the Government of the day showed complacency, regarding the movement apparently as inevitable. It is true that on Christmas Eve, 1915, when freights were still climbing, Mr. Arthur Balfour referred in the House of Commons to the “terrible level” of freights which, he admitted, increased the price, both of the necessities of life to the poor, and of many things which were essential to the Government in the proper conduct of the war. Yet the Government, when it was spurred into action, contented itself with adopting further piecemeal measures.

Government Measures.—One successful measure taken at the outset might have formed a model for a broader policy, and, two and a half years later, did so. This was the requisitioning by the Government of the whole of the refrigerated space in the meat-steamers trading between the United Kingdom and Australasia. This transaction was followed, a few weeks afterwards, by the requisitioning of similar space in the steamers trading with S. America. Arrangements were, at the same time, concluded by the Government with the meat companies for a proportion of their weekly production at fixed prices. Thus, not only were there ample supplies secured for the navy and army at reasonable cost, but supplies were available to maintain the civil population.

In the autumn of 1914 owners were asked to keep the Admiralty informed of the movements of their ships. It was a peculiar fact that very little, if any, information was then in the hands of any Government department of the services of the British shipping companies. Such information had to be sought from the companies themselves.

In the summer of 1916 a scheme was instituted, on behalf of the Indian Government, for buying in India, transporting to the United Kingdom and selling there the exportable surplus of the Indian wheat crop and, through the formation of a committee of brokers, the freight rates were kept on a comparatively moderate basis. In the autumn of that year the Imperial Government was forced into further action. A committee was appointed to consider the desirability of particular voyages and a system of licences was introduced. Another committee was formed for the requisitioning of vessels for the transport of foodstuffs, and a third, known as the Port and Transit Executive Committee, was formed to deal with the congestion at the ports of the United Kingdom, which, by then, had become a very serious matter. As from March 1 1916, licenses were required for all ships of over 500 tons gross trading to and from the United Kingdom.

Licences were granted for whole services or particular voyages. The system also enabled discrimination to be exercised between the different ports of the United Kingdom and so it was important in the relief of congestion.

The committee appointed to deal with the requisitioning of ships for foodstuffs followed the policy of directing owners to load their vessels where the need was most urgent and then to leave the owners to accept the full market rates of freight.

The first chairman of the Port and Transit Executive Committee was Lord Inchcape, and the Committee included representatives of the Admiralty, the War Office, shipping, railways and dock authorities. It was subsequently strengthened by the addition of Labour leaders. It owed responsibility, directly, to the Prime Minister and adopted such measures as would tend to relieve congestion at the ports. Its task was a formidable one and, while the Committee was able to bring about certain reforms, it could not entirely remove the troubles. These actually seemed to be at their worst after the Armistice. Immense supplies of commodities which could not be moved during the war were poured into the country, and the facilities for removing these proved quite inadequate, with the result that ships were detained for long periods, owing to inability to discharge their cargoes. Much public attention was focussed on the waste of shipping thereby involved. Strenuous efforts were made by all concerned to improve the situation. As an indication of what was being done, the Port of London Authority issued a weekly bulletin showing the number of vessels detained, and continued to issue this until the situation was completely changed and, early in 1921, the weekly return showed that large numbers of steamers were laid up idle owing to the lack of employment. Lord Inchcape was succeeded as Chairman of the Committee by Sir Norman Hill, who, on a breakdown of health caused by overwork was, in turn, succeeded at the end of 1919 by Sir John Barran. The Committee was formally dissolved by the Prime Minister early in 1921. During the period of its activity it had wide powers, and, at the outset, had, among other measures, effected a change in the Customs Regulations which, as was proved, were then having the effect of accentuating the difficulties.

The chairman of the Ship Licensing Committee was Mr. (afterwards Sir) Maurice Hill, and it included Mr. (afterwards Sir) F. W. Lewis, then deputy chairman of Messrs. Furness, Withy & Co., as vice-chairman, Mr. H. A. Sanderson (president of the International Mercantile Marine Co. and chairman of the Oceanic Steam Navigation Co.), Mr. Scholefield, of Newcastle, Mr. Purdie, of Glasgow, and Mr. Burton Chadwick, of Liverpool.

The Committee for the requisitioning of ships was presided over by Mr. J. H. Whitley, who in April 1921 became Speaker of the House of Commons. It included three shipowners, namely, Mr. (afterwards Sir) T. Royden, deputy chairman of the Cunard Co., Mr. (afterwards Sir) E. W. Glover, of the shipowning firm of Glover Bros., and Mr. R. D. Holt, the chief of the important shipowning firm of Liverpool. All these members had previously been advising the Transport Department of the Admiralty.

In spite of the measures that were being adopted, freights remained on a very high level, and the shipping situation was very unsatisfactory. The need for complete control was urged persistently in The Times newspaper, and in Feb. 1916 the Government was again forced to act. In that month an Allocation Committee, or Shipping Control Committee, was formed in order to apportion the tonnage according to the various and urgent demands that were made upon it. Lord Curzon was appointed chairman of this Committee. Other members were Lord Faringdon, then better known as Sir Alexander Henderson, Mr. Thomas Royden, and Mr. F. W. Lewis.

Supply of Tonnage.—It became plainer every day that the ever-reducing supply of tonnage was becoming less adequate to meet all the demands made upon it. Consequently, the Government decided to place restrictions on the importation of various commodities. The first of these to be effected were paper, paper-making materials, tobacco, dried fruits, furniture woods, stones and slates. In March 1916, a prohibition was placed on the importation of many articles under the general heading of “luxuries.” Among such articles were motor-cars for private use, musical instruments, cutlery, hardware, cotton and woollen manufactures, chinaware, fancy goods and soap. A restriction was also placed on the importation of certain brewing materials.

The inadequacy of the tonnage to meet the supplies was at that time due more to the requirements of the Government for ships for direct war purposes than to the depredations of the enemy. The highest quarterly loss of British shipping due to the enemy was 356,000 tons in the third quarter of 1915. In 1916 the ratio of loss fell; in the second quarter, the total amounted to 271,000 tons and in the third quarter to 284,000 tons. This drop was, however, only temporary, and in the fourth quarter of 1916 the total sprang up sharply to 617,000 tons and then continued at a high rate until the conclusion of the Armistice.

Throughout 1916 what became known as the “shipping problem” continued to attract great public attention. Articles were published in The Times urging the need of centralized control, in order that the utmost use might be made of the continually declining supply of tonnage and so that ships might be employed in the most effective way, irrespective of the individual trades of the ownerships to which they belonged. It was realized that this could only be brought about when all ships were hired to the Government, so that it would become for the owners a matter of more or less inconsequence into which routes the vessels were put. The principle of standardization was also persistently urged in order that large numbers of vessels might be constructed on identical plans and of parts fabricated from the same models. It was not, however, until the formation of Mr. Lloyd George's Government in Dec. 1916 that the shipping situation was completely taken in hand.

Ministry of Shipping.—A feature of the new Government was the creation of a Ministry of Shipping. As Shipping Controller, Sir Joseph Maclay was appointed. Sir Joseph Maclay had been known in shipping circles as a successful manager of cargo steamers and, while he was little known to the general public, the appointment was regarded in the shipping industry as a good one. By his own wish Sir Joseph Maclay was not a member of the House of Commons, but was represented there by Sir Leo Chiozza Money, as parliamentary secretary.

Various measures were soon taken to secure a better grip of the shipping problem. One of the most important of these was a general requisitioning of liners by the Government. These vessels were hired to the Government on the basis of what were known as Blue-book terms—those agreed early in the war with the Admiralty by a committee of owners presided over by Lord Inchcape. The management of such vessels as could be retained in ordinary commerce was left with the owners, who were required to give a financial account of their stewardship to the Government, and to pay over all profits above the Government rates of hire. Under this system it was less important to the individual ownerships into which routes their vessels were put. It was well that control was centralized, for, early in 1917, the enemy submarine war intensified and the losses greatly increased. As compared with a loss of 617,000 tons in the last quarter of 1916, the British tonnage sunk in the first quarter of 1917 amounted to 912,000 tons. The pinnacle was reached in April of that year and for the second quarter of 1917 the losses totalled 1,362,000 tons. Sinkings of foreign vessels were proceeding apace all the time, and in the second quarter of 1917 the total losses for the world amounted to 2,237,000 tons. The losses for each quarter throughout the war period are shown in the following table extracted from a White Paper (C.9221) issued at the end of 1918:—

Period British Foreign  Total of 
World




Gross
tons
Gross
tons
Gross
tons
1914
 Aug. and Sept.  341,824  85,947  427,771*
 4th Quarter 154,728  126,688  281,416 
1915
 1st Quarter 215,905  104,542  320,447 
 2nd Quarter 223,676  156,743  380,419 
 3rd Quarter 356,659  172,822  529,481 
 4th Quarter 307,139  187,234  494,373 
1916
 1st Quarter 325,237  198,958  524,195 
 2nd Quarter 270,690  251,599  522,289 
 3rd Quarter 284,358  307,681  592,039 
 4th Quarter 617,563  541,780  1,159,343 
1917
 1st Quarter 911,840  707,533  1,619,373 
 2nd Quarter 1,361,870  875,064  2,236,934 
 3rd Quarter 952,938  541,535  1,494,473 
 4th Quarter 782,889  489,954  1,272,843 
1918
 1st Quarter 697,668  445,668  1,143,336 
 2nd Quarter 630,862  331,145  962,007 
 3rd Quarter 512,030  403,483  915,513 
 4th Quarter 83,952  93,582  177,534 



Totals  9,031,828   6,021,958   15,053,786 

 *This figure includes 210,653 gross tonnage interned in enemy ports. After Oct. 31 the tonnage lost by enemy action was: British 11,916, Foreign 2,159.

New Construction.—Attention was at once given by the Shipping Controller to the need of construction, and a programme for standardized ships was laid down. The principle of standardization had already received practical recognition in June 1916, when the Standard Shipbuilding Co., to operate at Chepstow on the river Wye, was formed. This company received very powerful support, the capital being subscribed by, among other companies, the P. & O. and British India, New Zealand Shipping, Orient Steam Navigation, Federal Steam Navigation, Messrs. Furness, Withy & Co., the Shire Line, Messrs. A. Weir & Co., Messrs. Harris & Dixon, Messrs. Trinder, Anderson & Co., Messrs. Bethell, Gwyn & Co., and Messrs Birt, Potter & Hughes. Mr. James Caird, the head of Messrs. Turnbull, Martin & Co., was appointed chairman, and Mr. John Silley, managing director of R. & H. Green and Silley Weir, an old and famous shipbuilding firm, was appointed vice-chairman. In Aug. of that year this company acquired the engineering firm of Edward Finch & Co., Ltd., which had originally been formed to build Brunel's Bridge over the river Wye. In this yard three building slips were prepared, and at the beginning of 1916 two cargo steamers of 3,300 tons were being built there, in addition to a large number of smaller vessels. The first four slips for building steamers of up to 10,000 tons in the Standard Co.'s new yard were also being prepared. Difficulties had to be overcome in the way of securing sufficient labour and part of the scheme provided for the construction of a garden city. Early in 1917 much progress had been made with the provision of housing accommodation under licences from the Ministry of Munitions.

These yards were subsequently taken over by the Government. A great deal of money was spent upon them. Various difficulties arose, and the results of the work there were very disappointing. After the Armistice the great bulk of the property was sold to private interests.

On assuming office, Sir Joseph Maclay at once tackled the problem of shipbuilding, and appointed a committee to advise him on all matters connected with the acceleration of merchant ships under construction and nearing completion, and the general administration of a new merchant shipbuilding programme. This committee included Mr. (afterwards Sir) George J. Carter (of Messrs. Cammell, Laird & Co., Ltd.), president of the Shipbuilding Employers' Federation, as chairman; Mr. (afterwards Sir) W. S. Abell, (chief surveyor to Lloyd's Register of Shipping) ; Mr. (afterwards Sir) F. N. Henderson (of D. & W. Henderson & Co., Ltd.); Mr. James Marr (of J. L. Thompson & Sons, Ltd.); Mr. Summers Hunter (of the North-Eastern Marine Engineering Co., Ltd.); Mr. (afterwards Sir) C. J. O. Sanders (of the Marine Department, Board of Trade); and Mr. (afterwards Sir) W. Rowan Thomson (of Messrs. D. Rowan & Co., Ltd., president if the North-West (Clyde) Engineering Trades' Employers' Association); Mr. A. R. Duncan, secretary to the Shipbuilding Employers' Federation, who, as Sir Andrew Duncan was later appointed Coal Controller, was secretary to the new committee.

The last word in merchant shipbuilding then rested with the Admiralty, on the ground that it was necessary for the naval Authorities to determine what proportion of labour and material should be allotted to naval and merchant construction respectively. These proportions were dependent on the view held as to whether it was better to concentrate on the building of destroyers and other craft for the destruction of enemy submarines and for the protection of merchant vessels, or to build merchant ships. There was a great deal to be said for the theory that it was better to prevent ships being sunk than to build vessels to replace those destroyed. In May 1917 Sir Eric Geddes was appointed to the post of Navy Controller, and shortly afterwards, Maj.-Gen. A. S. Collard, director of inland waterways and docks, in the department of the director-general of movements and railways, was appointed deputy controller for auxiliary shipbuilding. The latter term was used to cover all merchant vessels. In July 1917, Sir Edward Carson was succeeded as First Lord of the Admiralty by Sir Eric Geddes, and Mr. (afterwards Sir) Alan Anderson became Navy Controller. The problem of merchant shipbuilding was at this time acute. The British shipping destroyed by the enemy in 1916 represented 1,498,000 tons, or nearly three times the production in British yards. This had fallen from the very poor total of 650,000 tons in 1913 to 541,000 tons in 1916. The peak in British shipbuilding had been reached in 1913, when 2,280,000 tons gross had been built, consisting of 1,920,000 tons of merchant vessels and 320,000 of warship tonnage calculated on a converted basis. It was to repeat such a production that the authorities at last aimed, the difficulties being enormously increased by the fact that large numbers of skilled men had been withdrawn from the shipbuilding industry for the fighting forces. The military authorities agreed to release such skilled men as could be spared, but as these were scattered over the various theatres of war, their return was very slow.

When responsibility for mercantile shipbuilding was transferred from the Ministry of Shipping to the Admiralty, some little friction arose between the new authorities responsible and the old Advisory Committee to the Shipping Controller, and in the autumn of 1918 a Shipbuilding Council to the Navy Controller was created, consisting of the members of the old Committee and advisers from the Admiralty. The position continued in some respects unsatisfactory, and in the spring of 1918, after an agitation for a more energetic merchant shipbuilding programme, Lord Pirrie was appointed Director-General of Merchant Shipbuilding, the official appointment being announced in the House of Commons on March 20 1918. He was regarded as the outstanding figure in British shipbuilding, and he was able to infuse energy into the shipbuilding programme. One of his first efforts was very greatly to improve the organization for the repair of damaged ships. Many vessels, after being torpedoed, managed to limp into ports, some of which, notably Falmouth, became seriously congested. A system of close and centralized control of the repairing facilities was organized, and much was done to make the damaged ships soon available again for service. The assistance of the United States in merchant construction had been earnestly invited. That country threw itself into the effort with immense fervour, and the height of the shipbuilding campaign was reached there in the summer of 1918. In June 1918, as responsibility for merchant shipbuilding now rested with the Department of the Controller-General, Sir Alan Anderson resigned from the position of Navy Controller. After the Armistice the responsibility for the completion of the merchant shipbuilding programme was transferred again to Sir Joseph Maclay, the Shipping Controller.

Financial results of the shipbuilding programme were described in the House of Commons on March 12 1921, by Col. Leslie Wilson, parliamentary secretary to the Ministry of Shipping. Colonel Wilson stated that the total cost of 228 ships built in the United Kingdom for the Government was £36,481,000, and that the ships were subsequently sold for £47,591,000, showing a total profit of £11,110,000. An agreement was entered into with the Government by Lord Inchcape, who undertook to distribute the ships to those British owners who desired them, in proportion to their losses. The agreement was made on the basis that no profit should accrue to him through the transaction. Outside the United Kingdom there were built for the British Government 122 ships, the vessels being built at much higher prices than those paid for the vessels constructed in the United Kingdom. The total cost of these vessels was £26,884,000, and the selling price was £18,289,000, showing a loss on the ships built abroad of £8,595,000. The net profit on 378 ships built and sold, excluding any allowance for depreciation, was £2,515,000. Colonel Wilson maintained that the Government would have been fully justified in taking depreciation into account, and, allowing 5% depreciation on 311 ships which were being worked, there would have been a net profit not of £2,515,000, but of £5,122,000. Again, but for the new ships it would have been necessary for the Government to try to charter neutral vessels, for which high rates of freight would have had to be paid. This would, it was estimated, have involved an additional expenditure of £27,000,000. There was no question that the Government acted wisely, at any rate from the financial point of view, in disposing of the ships when it did. They were offered to the shipping industry at a time when freights were still high, and so substantial prices were bid. A very different situation existed when the ex-German ships allotted to this country were offered to British shipowners, again through the medium of Lord Inchcape. Severe depression had, by then, fallen on the shipping industry, and the absorption of the ships, many of which were not of attractive type to British owners, was a very slow matter.

Replying to a question in the House of Commons on May 24 1921, Sir Robert Horne, the Chancellor of the Exchequer, stated that 202 ex-enemy ships allotted to the British Empire for final ownership had been sold, and that 85 merchant ships and 22 trawlers remained unsold. The gross amount realized was £14,523,074. From this gross total there fell to be deducted expenses of repair, delivery, etc., and a considerable part of the purchase money was payable in instalments over a period of years. The net cash then passing was £6,500,000.

War Services of the Mercantile Marine.—All the classes of British ships which form a great mercantile marine rendered services of immense value to the Allies during the war. Merchant vessels, in comparison with warships, were once described as being mere cockleshells, yet their crews faced the hidden dangers of mine and torpedo without flinching. The persistent reduction of the British mercantile marine which proceeded was a matter of extreme gravity to the Allies. Experience showed that the losses of the large and fast liners were, in every way, more formidable than those of the ordinary cargo vessels. When at last the United Kingdom, enthusiastically supported by the United States, bent energies on the construction of merchant vessels, it was the simple cargo steamers that were built. In both countries the plan of building simple vessels of standard type was adopted. Everything that was complicated was ruled out. Straight lines were substituted for curves, and parts were produced in great numbers, so that identical ships could be built rapidly. In the United States the principle of standard construction was carried further than in England. There, steel works, which had never undertaken shipbuilding work before, produced shapes and angles for ships, and the assembling of the parts was carried out by bridge builders and other steel workers who had had no previous experience of shipbuilding. In England fabrication on somewhat similar lines was planned in connexion with the new shipyards on the river Wye, of which control was assumed by the Government, but these plans did not begin to show their full effect until the conclusion of the war made such methods no longer necessary. While, in a case of emergency, a good case could be established for building cargo vessels in mass production, like Ford motor-cars, there was no similar way of building the large liners. In the height of the crisis and, indeed, throughout the war, the building of such vessels yielded place to the need for carriers of food and munitions. Yet the duties devolving on the liners steadily increased. At first a comparatively small number were requisitioned to serve as merchant cruisers, patrol vessels, hospital ships, and transports. The Dardanelles campaign made heavy demands on this type of vessel, and, later, the Salonika expedition. The climax was reached when, in the spring, summer and autumn of 1918 every possible ship that could be provided was needed to transport American troops. Liners were withdrawn from every British service and vessels never intended for such work were put into the N. Atlantic route. It was indeed fortunate for the nation that a large mercantile marine was in existence at the outbreak of war, and the magnificent services of some of the greatest ships will be always remembered.

Of all the crimes committed by Germany at sea, the destruction of the “Lusitania” on May 7 1915 remains the outstanding example. The liner was torpedoed near the Old Head of Kinsale, when 1,195 persons were drowned, including 291 women and 9 children. Represented in tonnage alone this loss was exceeded by the “Britannic,” sunk in the Aegean Sea on Nov. 21 1916, by submarine or mine, while employed as a hospital ship. The “Britannic,” uncompleted on the outbreak of war, was of 48,158 tons and was the largest White Star liner. The “Lusitania,” built in 1907, was of 31,550 tons.

Splendid service was performed by the sister ship “Mauretania.” At first she was employed in the ordinary trans-Atlantic service, where her speed was of great importance in view of possible attacks by German cruisers. In June 1915 she flew the White Ensign, conveying troops to Mudros for the Gallipoli campaign. Four months later she became a hospital ship. In Dec. 1916 she again became a troopship and brought Canadian troops to this country. Early in 1918 she became an armed cruiser, but was soon engaged in bringing American troops to Europe. She also carried many distinguished passengers whose urgent duties made it necessary for them to cross the Atlantic. Fine service was also rendered by the Cunard liner “Aquitania,” of 45,600 tons. Only three round voyages between Liverpool and New York had been made by this great ship before the war. At once she was requisitioned by the Admiralty and was commissioned as a merchant cruiser, leaving Liverpool in this capacity four days after the outbreak of war. She became a transport later and carried 30,000 troops to the Dardanelles; then she became a hospital ship and as such carried 25,000 men. Early in 1918 she was refitted as a transport, and in nine voyages carried 60,000 American troops. The liner was extremely useful in repatriating troops after the Armistice, and in the spring of 1921, in the middle of the shipping depression, had the reputation of being the only ship afloat that was earning any money. Besides carrying large numbers of saloon passengers, she was eminently fitted for the transport of emigrants, of whom she carried enormous numbers from the Continent.

The “Carmania,” well known as a Cunard liner before the war, distinguished herself by sinking the German merchant cruiser “Cap Trafalgar” in a duel. The “Laconia,” another Cunard liner, shared in the operations in the Rufiji river, East Africa, when the German cruiser “Königsberg” was sunk. Besides the “Lusitania,” the Cunard Co. lost the following vessels:—the “Caria,” “Veria” (1915), “Franconia,” “Alaunia” (1916), “Ivernia,” “Lycia,” “Folia,” “Trachia,” “Feltria,” “Ultonia,” “Volodia,” “Vinovia” (1917), “Andania,” “Valeria,” “Aurania,” “Ansonia,” “Vandalia,” “Carpathia,” “Flavia” and “Ascania” (1918). These represented extremely serious losses, and after the Armistice the company put in hand an extensive programme of construction. Unfortunately the cost of building was then on a very high level.

Losses of the White Star Line were also serious and included, besides the “Britannic,” the “Oceanic,” “Arabic,” “Laurentic,” “Cymric,” “Afric,” “Georgic,” “Cedric” and “Delphic.” Shortly after the outbreak of war, the “Oceanic,” “Teutonic,” “Cedric,” “Celtic” and “Laurentic” were commissioned as armed cruisers. The “Laurentic” was sunk by submarine off the coast of Ireland in Jan. 1917, while carrying gold, of which a substantial proportion was recovered in salvage operations after the Armistice. The “Teutonic,” built in 1889, and one of the most famous of the White Star liners, was subsequently acquired by the Government and was later publicly offered for sale. Services of immense value were rendered by the “Olympic” of 46,439 tons. She was employed in carrying troops to Gallipoli and in bringing, first, Canadian troops, then Chinese labour battalions, and, finally, American troops to Europe. Her war record included that of transporting more than 200,000 persons during the period, including the wives and families of Canadian soldiers returning to Canada after the war. Among her special services were the rescue of the company of the super-dreadnought battleship “Audacious,” sunk by a mine off the N. coast of Ireland, and the ramming of a large German submarine in the English Channel in May 1918.

Several of the ships of the allied company, the Atlantic Transport Co., were employed in the transport of troops. These included the liners “Minneapolis,” “Minnesota,” “Minnewaska,” “Minnetonka,” “Marquette,” “Manitou,” “Menominee,” “Missouri” and “Maryland.” Besides carrying troops, the vessels of the Atlantic Transport Co. carried large numbers of horses and mules, for which service the vessels were especially suitable. The losses of the line, representing 24,100 tons, or 43% of the fleet, included all the regular passenger liners which were most favourably known in the trade between London and New York.

Liners of the Canadian Pacific Ocean Services were employed as merchant cruisers and transports. At once the “Alsatian,” “Victorian” and “Virginian” were requisitioned and placed in the 10th Cruiser Squadron which was responsible for a share of the blockade of Germany. The “Calgarian” was sunk on March 1 1918 when proceeding in charge of a convoy of 30 ships.

The total number of vessels lost by the P. & O. Co. and its allied lines was 81, representing 491,600 tons, while 14 vessels of 76,600 tons were lost through marine causes. One of the most heroic actions of war at sea was fought between the “Otaki” of the associated New Zealand Shipping Co. (whose commander, Lt. Archibald Bisset Smith, received a posthumous award of the V.C.) and the disguised heavily armed German cruiser “Moewe.” After the “Otaki” had suffered several casualties and much damage had been done to the hull which was heavily on fire, Lt. Smith ordered the boats to be launched in order that the crew might be rescued. He remained on the ship and went down with her when the vessel sank with colours flying.

The Orient Co.'s liners “Otranto,” “Orama” and “Otway” were early commissioned as armed cruisers and, at the beginning of 1915, the “Orvieto” and “Ophir” were likewise commissioned. Subsequently the “Ophir” was bought by the Government. Other vessels of the line were employed as transports. The “Otranto” was lost by collision on Oct. 6 1918.

Heavy losses were suffered by the various companies controlled by Sir John Ellerman. In all, 103 ocean vessels, with a total cargo capacity of 600,000 to 750,000 tons, were destroyed. These included the liner “City of Athens” mined off Cape Town in Aug. 1917. The “City of Winchester” was the first merchant vessel to be destroyed during the war, being captured by the German cruiser “Königsberg,” while homeward bound from India with a very valuable cargo of produce. Another liner belonging to the Ellerman fleets was mined far from Europe. The “City of Exeter,” a fine passenger ship, struck a mine in the Indian Ocean, about 400 m. from Bombay. Number 1 hold filled at once, and the master gave orders for the passengers and crew to leave the ship. Then the master and chief engineer returned and, at grave risk, made a thorough examination of the ship. They decided that, with the exercise of the greatest care, the crippled vessel could reach Bombay under her own steam. The passengers reembarked and the vessel safely arrived in port. This was only one example of fine seamanship, of which there were many hundreds of magnificent cases during the war. When the enemy's submarine campaign became intensified not a voyage through infested waters could have been completed without the exercise of courage of the highest order, and repeatedly the seamanship and endurance of the officers and crews were put to the severest test. There were lurking dangers for the ancient little collier which had to feel her way up and down the North Sea, her one protection being a little gun—slight armament against a powerfully armed submarine; for the great liners which proceeded without escort and relied on their speed, their own guns, their “dazzle painting,” and their zig-zag courses to baffle the efforts of the enemy to sink them with, perhaps, several thousand troops on board; and for the slower cargo vessels which, in convoy formation, when thick weather obscured the other ships, ran the very serious risk of collision.

Vessels of the Royal Mail Steam Packet Co. had the distinction of being the first among British liners to be fitted before the the war for carrying a gun for defensive purposes. This was in accordance with the policy initiated, before the war, by Mr. Winston Churchill when First Lord of the Admiralty. Royal Mail vessels were largely employed as armed cruisers, transports and hospital ships. As armed cruisers there were commissioned the “Andes,” “Arlanza,” “Almanzora,” “Avon,” (“Avoca”), “Ebro” and “Alcantara.” The last named, only lightly armed, fought the disguised German raider “Greif” for 20 minutes in the North Sea, and sank with colours flying just before her enemy went to the bottom. The “Asturias” was torpedoed while bearing all the marks of a hospital ship. Other ships of the line which bore the Red Cross were the “Araguaya,” “Drina,” “Essequibo,” “Tagus,” “Agadir,” “Berbice” and “Balantia” (renamed “St. Margaret of Scotland”). Many vessels of the fleets were sunk, including the large liners “Amazon,” “Drina,” and “Merionethshire.”

No fewer than six of the Union-Castle liners were torpedoed or mined while serving as hospital ships, namely, the “Galeka,” “Braemar Castle,” “Dover Castle,” “Glenart Castle” (twice), “Gloucester Castle,” and “Llandovery Castle.” While based on Southampton the hospital ships of the company carried 331,000 British wounded officers and men to port and also landed 8,200 enemy wounded. The liners “Armadale Castle,” “Edinburgh Castle,” “Kinfauns Castle,” and “Kildonan Castle” were commissioned as armed merchant cruisers. The company's vessels also carried very large numbers of troops. It was not surprising that, after the Armistice, many months elapsed before a sufficient number of vessels could be again placed in the ordinary S. African passenger service to provide weekly sailings.

Recognition of the services of British shipping during the war was made by the King and his ministers in various speeches. Speaking at the Guildhall on July 29 1919, the King declared that the splendid services of the officers and men of the British mercantile marine had been vital to the successful issue of the war. From day to day these men had been facing death no less than the soldiers in the fighting line, and, even when the submarine menace was at its height, no single British crew ever refused to sail. He urged the re-creation of the merchant navy and the development of the ports as essential if the United Kingdom was to regain its old supremacy.

Men of the mercantile marine marched in the procession of the Allied and Associated Forces through the streets of London on July 19, 1919. There was also a special pageant of the Sea Services on Aug. Bank Holiday 1919. This took the form of a procession of lifeboats, bearing the House flags of all the shipping companies, from the Pool of London to Chelsea. The procession was headed by a launch flying the flag of the Port of London Authority, followed by a steam vessel of Trinity House, with the Duke of Connaught, as Master, on board. Then came a picket boat with a naval officer in charge as escort to the Royal barge. In this were the King and Queen, Queen Alexandra, the Prince of Wales, Prince Albert (afterwards Duke of York) and other members of the Royal Family. Following this was a specially prepared barge bearing the Lords of the Admiralty and then the Lord Mayor, as admiral of the Port of London, in the barge of the commander-in-chief at the Nore. These were followed by launches of the Ministry of Shipping, the Customs and Excise, Lloyd's and the Thames Conservancy. A dozen twelve-oared naval cutters, four picket boats and an armed motor-launch of the navy, models of naval guns, motor and steam lifeboats, a motor-launch carrying Trinity House pilots, steam-boats of the Mercantile Marine Association and boats from the training ships, fishermen's motor drifters, and vessels representing the Missions to Seamen. The rear was brought up by 70 lifeboats towed by tugs bearing the flags of the various shipping ownerships. Bands were placed along the line of route and famous old sea songs were sung. Such a commemoration was unprecedented, but then the services of the mercantile marine during the war were likewise unique.

The Commonwealth Government Line.—In the summer of 1916 a development occurred of great importance to shipping. For some time Australia had been seriously disturbed about the difficulties encountered in arranging for her exportable surplus of wheat, a matter of vital importance to the Commonwealth. With the ever-diminishing supply of tonnage, British vessels had naturally been directed more and more into the N. Atlantic, since it was obviously much quicker to bring wheat to the United Kingdom—less than 3,000 m. across the ocean—than more than 12,000 miles. Mr. W. M. Hughes, the Prime Minister of Australia, arrived in the United Kingdom in March 1916, but he got little satisfaction from the Imperial authorities on the shipping question. He sailed for home in June and, when he was on the water, the announcement was made that he had bought, on account of the Commonwealth Government, 15 second-hand cargo vessels. The steamers had an average dead-weight carrying capacity of between 7,000 and 8,000 tons, and 10 of them were taken from Messrs. Burrell's Strath line. For the larger vessels the price worked out at about £19 a ton. This was, perhaps, from four to five times greater than the pre-war price, but as events occurred, the purchase proved a profitable one, financially, for Australia. One effect was that the vessels were removed from the United Kingdom Register and were no longer subject to excess profit taxation. This action of Mr. Hughes hardly commended itself to any of the shipping authorities in the United Kingdom, but he had shown unmistakably that full recognition had to be given to the Australian viewpoint. In the autumn of that year the President of the Board of Trade announced that a large purchase had been made of Australian wheat on behalf of the Imperial Government, and that a number of steamers had been requisitioned to proceed to load the wheat in Australia. As the supply of available shipping became steadily less, it proved impracticable to transport all the wheat bought, and immense quantities were stored in Australia until after the conclusion of the war.

The purchase of the 15 cargo vessels represented the foundation of a Commonwealth Government line. Being free from taxation and with freights ruling high, large profits were earned, which made the venture temporarily, at any rate, profitable to the Australian people. A number of German steamers seized in Australia were added to the fleet and, later, ships were built both in Australia and the United Kingdom. In 1919 Mr. W. M. Hughes, on a visit to the United Kingdom, placed contracts for five large steamers with leading builders. These were designed for carrying a large amount of refrigerated cargo, and some hundreds of third-class passengers. Limited accommodation was to be provided for a few passengers in the saloon. The first of these steamers, the “Moreton Bay,” of 14,500 tons gross, was launched from Messrs. Vickers's shipyard at Barrow on April 23 1921. It was then asserted that the four other vessels would be in the water during the ensuing few months, and that all the vessels would be in service before the end of 1921. Between the time of the placing of the contracts in 1919 and the time of launching, the cost of ship construction had risen very seriously. All work was done on the “time and lime” principle, by which the owners paid for the cost of materials, the cost of labour, an allowance for overhead charges, and a sum, either as a fixed amount or as a percentage on the outlay, as profit to the builders. The ships were thus understood to have cost considerably more than had been expected, and with freights falling, the problem of making the vessels pay their way was enhanced. A wooden ship programme carried out for Australia in the United States was hardly successful financially. The building of wooden vessels, of which large numbers were constructed for the American mercantile marine, could only be regarded as an emergency measure. The inauguration of the Commonwealth line aroused much criticism from shipping managers, who cordially disliked the idea of a State enterprise. They maintained, and could do so justifiably, that a State enterprise could be carried on without the same consideration for profit and loss as a public company, if, for instance, a Government chose to carry merchandise at below cost price.

The Canadian Merchant Marine.—Canada instituted a line of Government steamers. It found itself after the Armistice with a great fleet of vessels which had been built in the period of emergency. Instead of offering them to the shipping industry, it decided to operate them on account of the nation. A corporation was formed, entitled the Canadian Government Merchant Marine, Ltd., in close conjunction with the Canadian National railways. The policy of the management was to institute new services and to work in cooperation with the existing lines, rather than to compete with them. New services were established to and from the United Kingdom and many parts of the world. In 1920 an agreement was entered into with Messrs. Alfred Holt & Co. for a joint trans-Pacific service to and from Vancouver, and with the British India Co. for a service between Montreal and Indian ports, via the Suez Canal. In the United Kingdom the Cunard Co. acted as managers for the line. The usual practice in making these arrangements with the shipping companies was for the Canadian National railways to represent the steamship companies in Canada, and for the agents of the shipping companies abroad to act similarly for the railways. This policy of working in conjunction with the shipping companies disarmed criticism, which was very strong in the case of the Australian scheme.

Amalgamation and Fusion Schemes.—Numerous amalgamations and fusion schemes took place between 1910 and 1921. Sir Owen Philipps, who at the beginning of 1910 was chairman of the Royal Mail Steam Packet Co., was particularly active in the policy of fusion. In that year the capital was acquired of the Pacific Steam Navigation Co., which was mainly interested in the trade with the E. and W. coasts of S. America. In the same year a fusion agreement was entered into with Elder, Dempster & Co., Ltd., which owed its development largely to the genius of the late Sir Alfred Jones. In 1911, the capital was acquired of Lamport & Holt, Ltd., largely concerned in the trade between the United Kingdom and also the United States and S. America, and in the same year an agreement was entered into with the Glen Line, Ltd., which is concerned in Far Eastern trade. Incidentally, the Glen Line is notable among British ownerships for its policy of building motor-ships, which is known to have been very successful. In 1912 the capital of the Union-Castle Co. was acquired by the Royal Mail Co. and the Elder Dempster Co. This, perhaps, was the most important of the fusion agreements which Sir Owen Philipps effected. The Union-Castle Co., a consolidation of the old Union and Castle companies in the S. African trade, had been feeling the loss of a great chief in the death of Sir Donald Currie, to whose extraordinary powers the line owed very much. In 1913 control was secured of the Nelson Lines, Ltd., which was and is engaged in the carriage of meat to the United Kingdom from Argentina, together with participation in the passenger trade. In 1917 an interest was acquired in MacAndrews & Co., Ltd., concerned in trade with the Peninsula; in the Coast Lines, Ltd., a consolidation of coasting companies trading round the United Kingdom; and in the Moss Line, Ltd. In 1919 an interest was secured in the old-established ownership of David MacIver & Co., Ltd., in Messrs. Bullard, King & Co., Ltd., and in Messrs. J. & P. Hutchinson, Ltd. While Sir Owen Philipps thus had enormous interests in British shipping, Lord Inchcape was also to the forefront in effecting fusion schemes.

At the end of 1914, Sir Thomas Sutherland retired from the positions of chairman and managing director of the P. & O. Company. For 42 years he had occupied the office of managing director and for 34 years that of chairman. The expansion of the P. & O. Co. will always be associated with his name. His last important act was to effect an amalgamation with the British India Co., of which Lord Inchcape was managing director. On the retirement of Sir Thomas Sutherland, Lord Inchcape became chairman and managing director of the P. & O. Company.

In June 1916, the P. & O. Co. acquired an interest in the New Zealand Shipping Co., which, in turn, controlled the Federal Line trading with Australia. Exactly a year later, in June 1917, a representative interest was secured in the Union Steamship Co. of New Zealand, which not only provided various coasting services in New Zealand, but also maintained services with Australia, British Columbia, and India. In the autumn of 1917 shares were secured in the Hain & Mercantile Steamship Co., and also in the Nourse Line, each of which possessed a considerable amount of cargo tonnage. The fleets of these three companies, together, included 107 steamers of 370,000 tons gross.

Other notable fusions of the war period included the acquisition of a controlling interest in the Prince Line, Ltd., which had been associated with the name of its founder Mr. James Knott. This acquisition, which was effected in Aug. 1916, involved the addition of 37 steamers, mainly cargo vessels, to those controlled by Messrs. Furness, Withy.

In Oct. 1916, Sir John Ellerman, chief of the Ellerman Lines, acquired all the shares of Messrs. Thomas Wilson, Sons & Co., Ltd., the Wilson fleet including nearly 80 vessels of about 200,000 tons. Its services were based on Hull. At almost the same time an agreement was concluded between the Anchor Line (Henderson Bros., Ltd.) and the Donaldson Line, Ltd., for a fusion, under the title of the Anchor-Donaldson Line, with Sir Alfred Booth, chairman of the Cunard Co., as chief of the new formation. The agreement meant that the Cunard Co. secured control of the Donaldson Line, for it already had a controlling interest in the Anchor Line.

Shipowners' Associations.—Important work was done by the Liverpool Steamship Owners' Association, especially through the war period. It acted on the principles upon which it was founded in 1848. These were, broadly, that the growth and prosperity of the British mercantile marine is dependent on the enterprise, skill and ability of the individuals directly concerned, and that neither State control nor State aid can prove an effective substitute for these qualities. The Association has not sought to interfere with the individual freedom of its members. It has, however, consistently opposed all measures calculated either to transfer the control of the country's shipping to official hands, or to hamper its development by rigid rules and standards. It has recognized that the first duty of the shipowner is to secure the safety of the lives and property entrusted to his care, but it has maintained that the individual shipowner, as long as he is discharging that duty, is entitled to carry on his business in the manner which will attain the best results.

The Association had much to do, particularly through the work of its secretary, Sir Norman Hill, with the establishment of the War Risks Insurance Scheme. Throughout the war period it consistently worked with the object of getting the maximum number of voyages made and the maximum number of cargoes carried. It coöperated with the Government authorities when control of shipping was obviously necessary, and when the great emergency had passed, it pressed for freedom for the shipping industry.

A marked development has taken place in recent years in the organization of London shipowners through an extension of the activities of the Chamber of Shipping of the United Kingdom. Rather curiously, the formation of the Chamber in Feb. 1878, was distinguished by the appointment of a Hull shipowner as president. This member was Mr. Henry John Atkinson. The Chamber was composed of local shipowning associations in various ports and of most of the Protection and Indemnity Clubs, with a central office in London. Its primary objects were to discuss questions affecting shipping; to disseminate information, from time to time, on matters concerning the industry, and to secure the advantages of united action, especially in communications with the Government and various bodies. The Chamber did useful work for many years under its original constitution, but the events of the war showed the need for a more effective organization that would include all classes of shipping. Largely due to the enterprise of Sir Kenneth Anderson, the president of the Chamber in 1915, the reconstruction of the Chamber was carried out. Sir Kenneth Anderson was succeeded as chairman in 1916 by Sir William Raeburn, who held the office for three years assisted by Mr. J. Herbert Scrutton as vice-president. During the years 1916-7 new life was put into the Chamber, and much was done to keep the public informed on matters affecting the shipping industry. Until the reconstruction, the Chamber was fairly representative of the ordinary cargo steamship owners, but the great passenger and cargo steamship companies had not actively been identified with its work. In 1917 a number of highly important steamship companies joined the Chamber, including the Peninsular and Oriental Steam Navigation Co., the Royal Mail Steam Packet Co., and the Union-Castle Mail Steamship Company. The finances were put on a sound basis, enabling the necessary cost of maintaining the work to be secured on the plan of a levy on the tonnage. New offices were taken, and Mr. H. M. Cleminson, a leading shipping lawyer and member of the firm of Messrs. Botterell & Roche, was appointed general manager. Sir William Raeburn, who was elected president in 1916, held office for two years and was succeeded as president by Lord Inchcape in 1918, who also held the position for two years. In 1920 Mr. W. J. Noble was elected president. He was succeeded by Sir Owen Philipps in 1921, with Sir Frederick Lewis as vice-president.

The constituents of the Chamber at the beginning of 1921 consisted of 19 local and special associations, such as those at Belfast, Swansea, on the N.E. coast and Glasgow; 11 Protection and Indemnity Clubs; 7 Freight, Demurrage and Defence Clubs and shipowners entering their tonnage direct, of which early in 1921 there was 5,430,800 tons. The aggregate amount of tonnage entered under the heading of Protection and Indemnity Clubs represented 6,364,300 tons. Membership of these clubs is open to any shipowner possessing a seaworthy vessel who wishes to cover himself against third-party risks. Only British owners are eligible for membership of the Chamber. Until 1919 the Chamber was not incorporated, but in that year it obtained the grant of a Royal Charter. The business of the Chamber is conducted by a council of shipowners who are nominated by the various constituents. Incorporated in the Chamber is the Documentary Committee, which examines and approves forms of charter between shipowners and merchants.

Statistics.—In the 1919-20 edition of Lloyd's Register of Shipping, the figures for the mercantile marines of the principal maritime countries before and after the war were set out. These figures were so important and authoritative that they are given in the table following. Outstanding facts were the decrease of 2,547,000 tons in the shipping owned by the United Kingdom, the gain of 7,746,000 tons to the seagoing merchant marine of the United States, the loss of 1,888,000 tons by Germany, and the gain of 617,000 tons to Japan.

In this edition the Register went further than setting out the actual figures of gains and losses. It attempted to estimate the position of the world's tonnage as it would have been if there had been no war. There were obvious difficulties in the way of arriving at a definite conclusion in the case of various countries, for many factors had to be taken into account, but a careful estimate was prepared on the following assumptions. These were: (1) it was reasonable to expect that the percentage of addition to the world's tonnage would have continued at the ratio (a decreasing one) recorded during the previous 15 pre-war years, and that the percentage of the United Kingdom tonnage to the world's tonnage would show, approximately, the same ratio of decrease recorded during the most recent of these years; (2) countries in which there had been a large addition of tonnage during the previous quinquennial period might be expected to show a reduction in the ratio of increase, and, as a rule, the larger the previous increase the larger would such reduction be; (3) allowances were made in the special cases of countries where pre-war conditions pointed to the acquisition of tonnage, in the near future, at a higher ratio than that recorded during the previous period.

Steam Tonnage of Principal Countries, 1914, 1919.

Country June 1914
Thousand
 tons gross 
June 1919
Thousand
 tons gross 
Difference

 Thous'd 
tons
 Per 
cent





 United Kingdom 18,892  16,345 
2,547
+ 231
 
+ 7,746
100
339
139
+ 40
1,888
530
+ 102
192
+ 617
360
175
98
+ 125
13.5
+ 14.1
 
+ 382.1
4.4
32.2
18.1
+ 2.1
36.8
64.6
+ 6.9
13.4
+ 36.1
18.4
19.8
9.7
+ 5.2
 British Dominions 1,632  1,863 
 America (United States): 
 Seagoing 2,027  9,773 
 Great Lakes 2,260  2,160 
 Austria-Hungary 1,052  713 
 Denmark 770  631 
 France 1,922  1,962 
 Germany 5,135  3,247 
 Greece 821  291 
 Holland 1,472  1,574 
 Italy 1,430  1,238 
 Japan 1,708  2,325 
 Norway 1,957  1,597 
 Spain 884  709 
 Sweden 1,015  917 
 Other Countries 2,427  2,552 





Grand total 45,404  47,897  +2,493 +  5.5
Total abroad 26,512  31,552  +5,040 + 19.0

The net result of the calculations made was to show that the British mercantile marine had suffered a loss of 5,202,000 tons, and foreign mercantile marines, with the exception of the United States of America, a loss of 9,000,000 tons, making a total loss to the world of 14,202,000 tons. As a partial set-off to these losses, the United States gained 6,729,000 tons, so that the net world's loss expressed in gross tonnage, was 7,473,000 tons. Germany's loss was set out as 3,582,000 tons, but it was explained that her losses were actually greater, since vessels which at the date of the Armistice had not been captured or requisitioned by other countries were included in her mercantile marine. Excluding enemy countries, the greatest sufferers after the United Kingdom were Norway, whose losses were estimated at 1,025,000 tons; Italy, which suffered a diminution of 677,000 tons; and France with an estimated loss of 536,000 tons.

In these calculations the question of the comparative efficiencies of the pre-war and post-war merchant fleets was not taken into account. The Register pointed out that, apart from additions to the merchant fleets of the world before the war, replacements of steam tonnage lost, broken up, etc., amounted each year to about 1½% of the total tonnage owned, while during the war it required new tonnage equivalent to 33% of the steam tonnage owned in 1914 to replace the losses. There is no doubt that a large amount of the tonnage afloat at the end of the war represented shipping which, in ordinary conditions, would have been broken up and replaced by modern and more economical vessels. How this factor affected the statistical position is indicated by the statement that in the three pre-war years 1911-3, nearly 2,000,000 tons of steamers were sold to foreign owners and replaced by better vessels, while during the three years 1916-8 probably less than 100,000 tons of steamers were sold in this way. Further, a large proportion of the shipping built during the war was, undoubtedly, not the equal in general efficiency of that built in the few years immediately preceding. Taking all these considerations into account, the Register estimated that, through the war, the world had lost 8,500,000 tons gross of shipping, representing a dead-weight carrying capacity of 12,500,000 tons.

Within 12 months the position was very much changed. The total tonnage of the world increased from 47,897,000 tons in June 1919 to 53,905,000 tons in June 1920, an increase of 6,008,000 tons. The loss suffered by the United Kingdom as at June 1919 of 2,547,000 tons had been reduced to a decrease of only 781,000 tons. The United States gain of 7,746,000 tons had been increased to one of 10,379,000 tons. Germany's loss had been increased by the surrender of tonnage, from 1,888,000 tons to 4,716,000 tons. Japan further increased her gain of 617,000 tons to 1,288,000 tons. Once more the Register endeavoured to estimate what would have been the position of the world's mercantile marines in 1920 if there had been no war. It found that the loss suffered by the United Kingdom was 2,920,000 tons; that of Germany 6,103,000 tons; and that of other countries a loss of 3,330,000 tons, making a total loss of 12,353,000 tons. As against this loss, the United States gained 8,837,000 tons, thus reducing the world's net loss to 3,516,000 tons. This estimate again did not take into account the question of the comparative efficiencies of the mercantile marines before and after the war. While such calculations are of great interest, the fact remains that, as the result of the great shipbuilding effort during the war, the world's shipping was greater in June 1920 by 9,282,000 tons. This figure was increased further during the year. The president of the Chamber of Shipping of the United Kingdom stated at the annual meeting held on Feb. 25 1921, that the world's merchant shipping since 1914 had been actually increased by more than 10,000,000 tons. Unfortunately for the shipping industry, the world's trade had not developed in proportion. Owing to the complete breakdown of credit in some countries trade was practically at a standstill.

An unprecedented step was taken by the Register in April 1921, when issuing its shipbuilding returns for the first quarter of the year. It issued with these returns a statement to the effect that, as the times were not normal, the figures of tonnage reported to be under construction did not provide a true index of the relative position of the shipbuilding industry as compared with, say, 12 months previously.

The total tonnage under construction in the United Kingdom at the end of March 1921 was given as 3,798,500 tons represented by 884 vessels. In ordinary times such an amount of work in hand would have indicated great activity and prosperity in the shipbuilding industry. It compared, for example, with 1,890,800 tons under construction at the end of March 1914, showing an increase of 1,907,700 tons, and with 1,722,100 tons under construction at the end of June 1914, the last quarter completed before the outbreak of the war. But the amount of tonnage stated to be in course of construction at the end of March 1921 included a considerable amount on which work had been suspended, owing to the heavy fall in shipping values consequent on the severe decline in freights and the corresponding decline in the demand for tonnage. The tonnage on which work had been suspended in this way amounted to 497,000 tons. There were also included in the total figures some 350,000 tons, the completion of which had been delayed owing to the cessation of work by ship joiners. To arrive at comparative figures, it was therefore necessary to deduct these two figures, amounting together to 847,000 tons, from the amount of tonnage described as being under construction. The total figures of tonnage on which work was actually proceeding at the end of March 1921 was thereby reduced to 2,951,500 tons, showing an increase of 847,000 tons over March 1914.

There would have been grounds for satisfaction in such an increase if the world's commerce had been active. Unfortunately, enormous numbers of the world's inhabitants were taking no part in international commerce, and, further, there were immense numbers who were not producing goods or working at the same rate as before the war. Consequently the construction of so much tonnage, although the work was proceeding at a slow pace, could not be regarded with unmixed satisfaction. Cancellations of shipbuilding contracts by owners were common, and large sums were paid in order that owners might be relieved of their commitments. The surplus of ordinary cargo steamships was especially large. The losses of mail and passenger liners during the war had not been made good, but the high cost of building tended to prevent replacements.

As compared with the figures for the quarter ended Dec. 1920, there was a reduction in the shipping launched during the first quarter of 1921 of 146,000 tons. The tonnage started during the quarter declined by 113,000 tons, while in the tonnage in preparation, but not actually commenced, there was a fall of 75%, as compared with the figures of the first quarter of 1920. Attention was called by Lloyd's Register both at the end of 1920 and in the beginning of 1921 to the lower rate of construction as compared with pre-war times. In 1913 the average amount of tonnage completed during each quarter was over 23% of the total work in hand at the beginning of the quarter, whereas the figures for 1920 fell below 13%. During the first quarter of 1921 the output fell as low as 8% of that under construction at the beginning of the year.

The total amount of tonnage being built abroad was 3,288,100 tons—not quite so large an amount as the tonnage described as being under construction in the United Kingdom, but actually larger than that on which work was actively proceeding there. The Register pointed out that the returns for foreign countries, unlike those for the United Kingdom, were not subject to any material reduction on account of suspended or delayed work, of which there appeared to be comparatively little in other countries. The shipping being built abroad was less by 183,000 tons than that under construction at the end of 1920. The decline was due to the continued decrease in the United States of America, where the tonnage under construction was less by 27% than that building at the beginning of 1919. Apart from the United States, the countries in which the largest amount of shipbuilding was taking place were France, with 427,100 tons, an increase for the quarter of about 30,000 tons; Holland with 417,600 tons; Italy with 351,600 tons; and Japan with 294,300 tons, an increase of 46,000 tons.

The returns showed that there were then 187 steamers and motorships, each of over 1,000 tons, with a total of 1,320,100 tons, under construction for the carriage of oil in bulk. Of the total number, 84, of 557,000 tons, were under construction in the United Kingdom, and 82, of 632,000 tons, in the United States. In the former the oil-tank tonnage represented 57 % of the total amount of construction. The tonnage of vessels under construction to be fitted with internal combustion engines amounted to 503,800 tons.

A highly unsatisfactory feature was the diversion of a large amount of British shipping from British to foreign shipyards for reconditioning. This was due to a refusal on the part of the ship joiners to accept the lower wages proposed by the employers and the consequent cessation of work by the ship joiners in the United Kingdom for many months. Large liners were diverted to Dutch and French ship repairing works. The work of reconditioning was essential, and the stoppage by the ship joiners meant the loss of a large amount of work to the United Kingdom, which, it was to be feared, might have a far-reaching effect on the British industry.

Condition and Prospects.—What might be described as a bird's-eye view of the state of the shipping industry during 1910-21 is afforded by the course of prices of a “new, ready, 7,500-ton cargo steamer” as recorded in the chart published by the weekly shipping journal Fairplay and described as “Fairplay's Curve.” This type of vessel may be considered representative of ordinary cargo steamers. In 1910 the price of such a vessel was £37,000. Prices then rose sharply and by the end of 1911 a price of £47,000 was reached. A further rise took place in 1912 to £58,000. That year, as has been shown, was a prosperous one for shipping, and from the high point reached, values fell to £48,000 at the end of 1913. A further drop occurred in 1914 to £43,000. The great rise then began. By the end of 1914 the price had advanced to £60,000. In 1915 prices more than doubled and £125,000 was reached. In 1916 there was a further advance to £188,000. The effect of the Excess Profits duty was seen in 1917 and values fell to £165,000. In 1918 there was a recovery to £181,000 and then a fall to £169,000. An extraordinary rise took place in 1919, the high price of £232,000 being reached. Early in 1920 there was a further upward movement. Then a great and steady fall began and by the end of the year the value of £105,000 had been reached. In the first six months of 1920, values again receded. On May 24 two new, ready steamers of 9,250 tons dead-weight built by the Furness Shipbuilding Co. to Lloyd's highest class were sold for £85,000 each, representing rather more than £9 a ton. These ships were of the shelter-deck type, with the tonnage openings closed. Vessels of similar size with tonnage openings would carry only 8,300 tons dead-weight, and on that basis the prices bid for the two ships appear somewhat better. Another ship which was of 5,500 tons dead-weight and was built by Charles Hill & Sons, Ltd., of Bristol, was sold for £40,000, representing only rather more than £7 a ton. This particular ship had not been launched, and was not expected to be ready for sea for at least two months.

The Chamber of Shipping estimated that at the beginning of 1921 there were laid up in the United Kingdom, the United States and Scandinavian ports, 5,000,000 tons dead-weight of shipping, or, approximately 3,000,000 gross. This amount of tonnage was made up of 2,250,000 tons in the United Kingdom, represented by 600 vessels, of 2,000,000 tons in the United States represented by 250 vessels, and of 750,000 tons represented by 428 vessels in Scandinavian ports. In addition, many vessels were laid up in Spain, Italy, Japan and other countries, and in the early months of 1921, the amount of tonnage laid up throughout the world steadily increased.

In 1920 there took place the greatest fall in freights that has ever been recorded. The extent of the drop is shown by the movement of the time charter rate, i.e. the monthly rate of hire for ordinary cargo steamers. When vessels are chartered in this way the owners provide and pay the crews and pay for the stores. The charterers pay for the coal, since the amount consumed and the cost depend upon the trade into which the vessel is put. At the beginning of 1920 the usual time charter rate for cargo steamers was 30s. a ton dead-weight. By midsummer the rate had dropped to 20s. a ton or rather less. By the end of the year the rate had fallen to 10s. a ton, and with very little inquiry it fell further. By the end of the first quarter of 1921 steamers were chartered at a rate of 6s. a ton. There were also heavy falls in the voyage rates.

As compared with maximum rates during the war for free British steamers bringing grain from Argentina of about 183s. a ton, the freight early in 1921 had fallen to about 35s. Then, when the coal stoppage occurred at the end of April, rates advanced, owing to the necessity of steamers proceeding from this country in ballast, and to the difficulty of securing bunkers. By the end of May, rates of about 57s. 6d. a ton were being quoted for vessels that were available for immediate loading. It was generally accepted in shipping circles that a freight of about 50s. was necessary to cover the cost of sending a vessel to S. America in ballast and bringing her home with a cargo of grain. The fact that, before the war, cargoes of coal had always been available from the United Kingdom meant competition for the homeward voyage and enabled freights to be restricted. The new conditions were distinctly serious for the shipping industry.

Coal also represented a serious problem for the liner companies. Sir Owen Philipps, chairman of the Royal Mail Steam Packet Co., gave some figures respecting comparative costs at the annual meeting of the company in June 1921. He stated that in 1902 the average cost of all coal consumed by the company's steamers in all ports served, including rail carriage and freight, was exactly 22s. a ton. In 1903, the average price had increased to 22s. 3d., while 10 years later, in 1913, the average cost, including railage and freight, had increased to 22s. 11d., which was then considered a very high average price. In 1920, the average cost per ton of all coal consumed by the company's steamers, including railage and freight, was 120s. 1d. Early in 1921 the price fell very considerably, largely owing to the supply of coal by Germany to France and Belgium, with a consequent falling off in the demand for British coal. Then when the stoppage at the British collieries had been proceeding for some little time, and stocks were being exhausted, British shipping had to look to the Continent for supplies.

The Cunard and White Star companies were in a favourable position as regards the great trans-Atlantic liners, “Aquitania,” of 45,600 tons, and “Olympic,” of 46,300 tons, since these vessels had been adapted to the use of oil fuel in 1920. Oil fuel, after the war, increased in popularity, although some owners hesitated to commit themselves too much to it, owing to fears that supplies would not be sufficiently abundant, and planned their vessels with a view to the use of either oil or coal. Scandinavian owners, especially, pinned their faith to motor-engines, and it was notable that while coal-burning steamers were laid up idle, motor vessels belonging to the same ownerships were being profitably employed. There was good reason to believe that an extensive development of the use of motor-engines was to be expected. It was quite certain in 1921 that a strenuous competitive period lay ahead for shipping, and owners had to take into account all possible measures conducive to cheap transport at sea.

(C. Ma.)

(2) United States

From the founding of the Federal Government in 1789 onward the United States has possessed a considerable merchant marine. For a hundred years it was the second power in amount of merchant tonnage in the world, surpassed only by the United Kingdom. From the end of the Civil War in 1865 to the outbreak of the World War in 1914, though the American flag was infrequently seen in foreign waters, a great and valuable merchant shipping was in existence, with well-equipped shipyards and a large force of officers and seamen, chiefly employed in home trade on the Great Lakes or on the Atlantic, Gulf and Pacific seaboards with their insular dependencies. The American people at no time in their history have been out of intimate touch with shipbuilding and navigation.

Unlike other nations the United States has steadily maintained an important and increasing waterborne domestic commerce capable of holding its own with formidable railway competition. This coastwise commerce, including the trade with Alaska, Porto Rico and Hawaii, by an unshaken national policy, has been reserved entirely to American vessels, and has had a significant bearing on the development of the American merchant marine. It is interesting to recall that in 1860, the year before the opening of the Civil War, the commercial fleet of the United States was divided almost equally between 2,379,396 gross tons registered for foreign commerce and 2,644,867 tons enrolled or licensed for coastwise carrying. In 1866, the year after the close of the Civil War, the registered foreign trade fleet, as a result of the war, had fallen off to 1,387,756 gross tons—a decrease of almost a million tons—while the coastwise fleet had increased to 3,381,522 tons. This tendency of the foreign trade shipping to decrease, and of the domestic trade fleet to grow, was even more manifest by the year 1910, when the former had fallen to 782,517 gross tons, or actually less than the 981,019 tons which the United States had possessed a century earlier in 1810, while the coastal fleet had increased to 6,668,966 tons, or more than twice as much as the entire American commercial shipping of 1860.

This sharp contrast between the steady decline of the overseas tonnage and the unbroken advance of the domestic tonnage is attributable to the intensity of foreign competition in the one trade and to the absence of it in the other. Through those years the wages of American crews and their subsistence and general style of living imposed a higher cost upon the operation of American ships, and American-built ships in addition bore a substantially higher cost of construction. Moreover, American laws and regulations governing ships have contributed somewhat to this higher expense by their more exacting character. Against this higher expense the coastwise vessels from 1860 onward were absolutely protected by the exclusion of foreign vessels from domestic trade, while the overseas vessels were protected in no way whatever, except for casual postal subsidies to a few regular lines. In view of the fact that from 1860 high protection has been almost continuous in the United States, this exception of the most intensely competitive of industries, ocean shipping, is difficult to understand. The generally accepted explanation is that it has not been possible at any time to present a definite form of national encouragement to the overseas shipping industry which was acceptable to all of the various sections of the country. Subsidies have almost been voted by Congress several times. Discriminating customs duties and tonnage dues, an expedient first adopted in 1789 and maintained in whole or in part for 60 years thereafter, have had a powerful advocacy but, as a matter of fact, have never been made effective because of general commercial treaties which have forbidden them. “Free ships”—that is, the free admission and registry of foreign-built vessels instead of the general prohibition of American registry for foreign-built vessels obtaining since 1789—were adopted for vessels of less than five years of age in the Panama Canal Act of 1912, but had remained wholly futile up to the war of 1914, which suddenly gave exceptional value to the nag of the greatest neutral.

Pre-war Position.—American overseas shipping as distinguished from coastwise shipping reached almost the lowest ebb in 1910, when only 782,517 gross tons were recorded by the Commissioner of Navigation as registered for foreign commerce and sufficed to convey only 8.7% of the total imports and exports of the United States. Though relatively little effort had been bestowed upon the promotion of foreign commerce in these years of wonderful domestic development, the total foreign trade of the United States had increased markedly from a value of $762,288,550 in 1860 to $2,982,799,622 in 1910. Whatever the cause of the decline of the overseas American merchant marine, it had certainly not been from any lack of cargoes.

No change or event of consequence marked the years from 1910 to 1914 in the annals of American shipbuilding or navigation. Official records show the amount of shipbuilding, the total registered overseas and the total coastwise tonnage, the total merchant marine and the proportion of American overseas commerce conveyed in American ships, for the five fiscal years ending June 30 1914, to have been as follows:—

 Year  Ships
Built
Registered
 for Foreign 
Trade
Enrolled or
 Licensed for 
Coastwise
Trade
Total
Merchant
Marine
Proportion
of Value of
 Imports & Exports 
Carried in
American Ships






Gross
tons
Gross
tons
Gross
tons
Gross
tons
Per cent
1910 342,068 782,517  6,668,966 7,508,082 8.7
1911 291,162 863,495  6,720,313 7,638,790 8.7
1912  232,669  923,225  6,737,046 7,714,183 9.4
1913 346,155 1,019,165  6,816,980 7,886,518 8.9
1914 316,250 1,066,288  5,818,363  7,928,688  8.6

These records indicate a condition of virtual stagnation in the American merchant marine during the period immediately before the World War. New construction was only slightly in excess year after year of tonnage lost or worn out and abandoned. It was a time of disheartenment among those who desired to see an adequate ocean service under the American flag, and a valuable naval reserve for an emergency.

In the Panama Canal Act of Aug. 24 1912 Section 5 provided that “No tolls shall be levied upon vessels engaged in the coastwise trade of the United States.” It was contended before and after the passage of this Act that it contravened the provision of the Hay-Pauncefote treaty, that “The canal shall be free and open . . . to the vessels of commerce and war of all nations . . . on terms of entire equality, so that there shall be no discrimination against any nation or its citizens or subjects in respect to the conditions or charges of traffic or otherwise.” President Wilson, who had originally favoured this exemption of American coastwise ships, and had been elected on a platform approving it, unexpectedly early in 1914 advocated the repeal of the exemption provision on the ground that it was in conflict with the treaty, and also that “repeal be granted by Congress in support of the foreign policy of the Administration.” After an animated debate in the course of which the President was opposed by several senators of his own party, and at the same time upheld by some eminent Republicans, including Senator Root of New York, repeal was finally accomplished. No actual advantage had accrued to American coastwise vessels from the toll exemption, for the canal had not then been opened to commerce. It was opened Aug. 15 1914, and was utilized in its first year by 1,317 vessels, including merchant carriers, men-of-war and yachts, of an aggregate net Panama Canal tonnage of 4,596,644. Tolls paid amounted to $5,216,149. In the coast-to-coast fleet of the United States there was soon a notable expansion, and new and important steamers of 10,000 or 12,000 tons dead-weight capacity were plying on the route shortened from 13,000 m. via the Straits of Magellan to 6,000 m. via the Canal. These large coastwise steamers were destined to prove of abundant value to American overseas commerce in the emergency presented by the war.

War Period.—When the World War began in Europe Aug. 1 1914 all but 8.6% of the imports and exports of the United States were being conveyed in foreign vessels, chiefly of British and German nationality. The first result was the voluntary “interning” in American harbours of a considerable fleet of German and Austrian steamers, including the “Vaterland,” the largest ship afloat, and other passenger craft of the Hamburg-American and North German Lloyd lines. Another and a much more serious effect upon the carrying of American passengers, mails and cargoes was produced when the British Government, under the increasing stress of the conflict, withdrew month after month from overseas service to and from American ports its own passenger ships and freighters, for the transport service of the gathering British armies and for the auxiliary service of the war fleets. Then the lack of an adequate merchant shipping of its own began to be severely felt throughout the United States.

In the autumn and winter of 1914 agriculture, both North and South, was gravely depressed by the inability to export grain, provisions and cotton, because of the scarcity of ocean ships. Freight rates soon became exorbitant. In Dec. 1914 the freight on cotton from New Orleans to Rotterdam had risen to three or four times its pre-war figure, or to $2 per hundredweight. Grain in July 1914 had been carried from New York to England for four or five cents a bushel. In Dec. 1914 the cost was 16 to 17 cents, and it still went on advancing. The Democratic party, in power at that time, had as a whole opposed shipping subsidies, but in this crisis the Wilson administration early in 1915 brought forward in Congress a proposal to create a great merchant marine under government ownership and operation. This proposition for what was stigmatized as a dangerous adventure into state socialism was sharply opposed in Congress by conservative Democrats and the great body of Republicans. Meanwhile, the crisis continuing, Great Britain, France and Norway in their acute need of ships to make up for losses by German submarines, began to place contracts for new tonnage in the established and not over-busy shipyards of the Atlantic and Pacific coasts of the United States. In the report for the fiscal year ending June 30 1916 the Commissioner of Navigation noted that of ships building or ordered at that date in American yards “fully 125,000 tons were for foreign shipowners,” and that “since July 1 1916 the tonnage ordered in American yards for foreign shipowners exceeded that ordered for American owners.” Many of these vessels, it transpired, were being built by funds furnished or guaranteed by the British Government.

So much antagonism had been created by the proposal for a government-owned and operated merchant marine that it was not until Sept. 7 1916 that the Shipping Act desired by President Wilson was passed, and then in a much-amended form with government ownership and operation reduced to a temporary character. Section 3 of this important law provided:—

“That a Board is hereby created, to be known as the United States Shipping Board, and hereinafter referred to as the Board. The Board shall be composed of five Commissioners, to be appointed by the President, by and with the advice and consent of the Senate; said Board shall annually elect one of its members as chairman and one as vice-chairman.

“The first Commissioners appointed shall continue in office for terms of two, three, four, five and six years respectively from the date of their appointment, the term of each to be designated by the President, but their successors shall be appointed for terms of six years, except that any person chosen to fill a vacancy shall be appointed only for the unexpired term of the Commissioner whom he succeeds.”

Under the authority of this act the President appointed on Dec. 22 1916 the first Federal Shipping Board, headed by Mr. William Denman, an admiralty lawyer of San Francisco. Not one of the members of the Board had ever operated American-flag ships in ocean commerce. Under the Act the Board was authorized to form a shipping corporation with a capital stock not exceeding $50,000,000, of which a majority was to be held by the United States for the purchase, construction, equipment, lease, charter and operation of merchant vessels in the commerce of the United States. This became known as the Emergency Fleet Corporation. Its power to operate vessels would cease, under the original Act, five years after the close of the war.

Less than four months after the appointment of the first Shipping Board the United States itself entered the World War, and the powers and resources of the Board were immensely increased by war legislation. Vast sums of money were placed at the disposal of the Board for the rapid construction of merchant ships on a scale before undreamed-of. Chairman Denman resigned on July 24 1917, and the President nominated in his place Edward N. Hurley, who had been the President of the Illinois Manufacturers' Association, an organization long committed to the development of the merchant marine. A subsequent change made Charles M. Schwab, the steel manufacturer and head of the Bethlehem Shipbuilding Corp., the Director of the Emergency Fleet Corporation. Under the stimulus of Messrs. Hurley and Schwab, the war programme of merchant shipbuilding, which had at first lagged badly, began to take on a new life and vigour. These men had not only directed their vast organization, but aroused the country to respond with all its wealth and power to Mr. Lloyd George's appeal for “Ships, and more ships and yet more ships,” to compensate for the havoc wrought by the German submarines. When the United States entered the war in the spring of 1917 there were in the country 37 steel shipyards with 162 ways, and 24 wooden shipyards with 72 ways, capable of launching vessels of 3,500 dead-weight tons. At the signing of the Armistice there were in all 223 shipyards, steel and wood, with a total of 1,099 ways.

There is no parallel in history for this swiftness with which additional shipyards were created. In April 1917, when the United States declared war, every one of the 234 shipways in this country was occupied by a vessel under construction—in part for American owners, in part for foreign owners, the remainder for the navy or other branches of the Government. It was absolutely necessary to create at once the additional facilities required for the building of the 3,115 vessels of a total of 17,276,318 dead-weight tons provided for in the maximum building programme of the Shipping Board. Scores of new shipyards, for steel and wood vessels alike, had to be built. Proper sites were rapidly selected on the Atlantic, the Gulf and the Pacific seaboard, the yards hurriedly laid out, and the requisite tools and machinery installed. This work was pushed with the utmost vigour. Long before the new yards were ready a nation-wide movement had started to recruit an army of shipyard volunteers. It was represented to the workers that they were as truly serving the Allied cause as if they had enlisted in the navy or army. This new crusade was advanced by the State Councils of Defense and by the Department of Labor. Within the first two weeks no fewer than 280,000 workers were enrolled. At the signing of the Armistice 381,000 men were employed in the old and new American shipyards, as against 44,000 when the war began.

American shipyards before 1917 were adequate only for the fairly steady demand of the coast and lake trades and for the requirements of the navy, which, however, were partly filled from Government yards. Only now and then was an overseas steamer constructed. But the coast and lake trades of the United States employ many relatively large and heavy vessels of from 6,000 to 10,000 tons, fit for the 2,000-m. voyages from Portland, Boston, New York and Philadelphia to the Gulf of Mexico, or the 6,000-m. voyages through the Panama Canal between the Atlantic and Pacific seaports. Six or seven yards on the Atlantic and two on the Pacific before the war were capable of building the most powerful dreadnoughts and armoured cruisers. Ocean shipyards, large and small, possessed well-trained and experienced managers and workmen, and there were also many excellent shipyards on the Great Lakes. These efficient staffs were drawn on for the more responsible positions in the new war-born shipyards. The great body of 381,000 workers enlisted were, of course, unfamiliar with ship construction. Most of them had never laboured in a shipyard of any kind. There were thousands from the general building, electrical and other engineering trades, and other thousands from inland farms. It was a composite array, and there was undoubtedly at first much inefficiency and shirking. But the men already trained were set to show the others. Proficiency was rewarded by high wages. The incompetent were gradually weeded out. Appeals to patriotism were effective. Riveting and other work was “speeded up” by offers of prizes, and more and more all hands were made to realize that they were taking an essential part in the winning of the war. As a result, unheard-of achievements in the way of production speed were soon recorded. The “Tuckahoe,” a 5,500 dead-weight ton collier, was completed by the N.Y. Shipbuilding Co. at Camden, N. J., in 37 calendar days; the “Crawl Keys,” a 3,500-ton freighter, at the Great Lakes Engineering Works, Ecorse, Mich., in 34 days. Heavy 8,800-ton freighters were built in Pacific shipyards in from 78 to 88 days, where before the war from six to ten months would have been required. The Bethlehem Shipbuilding Corp. yard at Alameda, Cal., launched the 12,000-ton cargo liner “Invincible” 31 days after the laying of her keel. It was thoroughly realized that such haste would often mar the quality of the work that ships built in such brief time might well prove less efficient and enduring. But the Government and the builders realized also that it was a race with the German submarines, and that enough ships must be provided by whatever methods at whatever cost to feed and supply the Allies, and to carry and sustain the troops that would soon be crowding over.

One expedient which greatly helped toward quick production was the fabricated ship. One factor in the choice of this plan of construction, never adopted on a large scale before, was the success of the Submarine Boat Corp. in building in 1916 a fleet of 550 submarine-chasers for the British Government. These little vessels were of wood. It was obvious that steel would lend itself more readily to fabrication, and Mr. Henry R. Sutphen, Vice-President of the Submarine Boat Corp., submitted to the Emergency Fleet Corp. a proposal for manufacturing standard steel ships from the same kind of commercial structural steel that is employed for buildings and bridges. This plan was successfully carried out. Structural plates, shapes and other material were prepared at plants all over the country where they could be produced to the best advantage, and shipped to the assembling yards for final riveting together, a certain number of rivets indeed having already been driven before the material arrived. One hundred and fifty fabricated steamers of about 5,000 tons dead-weight were contracted for with the Submarine Boat Corp.'s yard on Newark Bay, N.J. One hundred and eighty fabricated ships of about 7,500 tons were ordered from the great Hog L Shipyard near Philadelphia. This shipyard, the largest in the world, with 50 ways, was created in less than six months under the direction of the engineers of the American International Corp., out of what had been a waste marsh on the shores of the Delaware River. With its ways, storehouses and workshops it covered 900 acres. Its cost was $66,000,000. On the completion of its building programme, and when its ships were no longer needed, it afforded an admirable site for a great rail and ship terminal.

Several hundred wooden steamers of a dead-weight capacity of from 3,500 to 5,000 tons were ordered by the Emergency Fleet Corp. in the war emergency. There was much criticism of this project, for the building of wooden steamers for overseas service had long been abandoned in America. Among practical men there never was any delusion that wooden steamers would be of lasting value in peace time service. As Chairman Hurley of the Shipping Board stated: “It was not contended by any responsible authority that wood ships would prove commercially advantageous, that they would be formidable competitors with the ships of the maritime powers in time of peace; but they were regarded, at least as far as the subsequent development of the wood ship programme was concerned, as mere war emergency ships.” It should be borne in mind also that when these wooden steamers were contracted for a war lasting for years was contemplated as possible, and elaborate general preparations were being made to that end. As a matter of fact few wooden steamers were completed in time to carry supplies before the signing of the Armistice, and most of the wooden craft that did get to sea were laid up as soon as possible. Many of them seemed structurally fit, but their cargo capacity was too small to permit of profitable employment. The Emergency Fleet Corp. built more of the relatively small steel ships than could be absorbed by the requirements of normal commerce. Justification for this is to be found in the inexorable needs of war. These small steel steamers of from 3,500 to 5,000 dead-weight tons are of a type very useful in limited numbers in a near-by trade, like that with the West Indies, for example. Some of them, particularly the oil-burners, are capable of engaging advantageously in transoceanic trades. Moreover, no steamers more than 260 feet in length and of about 4,000 tons dead-weight capacity could be brought out into the St. Lawrence River and the Atlantic through the Canadian canals, and it was important in the war months that the Great Lakes shipyards should be utilized.

American commerce, coastwise and overseas, is relatively a trade of rather large cargoes. It is the larger ship, with the lowest crew wage cost per ton, which American shipowners can operate to the best advantage. Nevertheless, these prudential considerations were frankly cast aside by the American Government in the crisis of the war. The authorities deliberately planned and built the kind of a merchant fleet that could be most quickly constructed in the greatest numbers and employed to the best advantage of their Allies.

After the War.—On the signing of the Armistice immediate steps were taken by the Shipping Board to reduce its programme of construction. In most cases where a contract could be cancelled at a cost to the Government less than the difference between the cost to complete and the probable market value of the ship at time of completion, cancellation was ordered. By June 30 1920 the building programme of the Shipping Board, which in Oct. 1918 had totalled 3,115 vessels of 17,276,318 dead-weight tons, was reduced to 2,315 vessels of 13,675,711 tons, of which 1,696 vessels of 11,656,961 tons were of steel construction. An important element of the new fleet not cancelled consisted of 23 passenger and cargo steamers of about 13,000 tons each, which were designed as army transports but have been adapted to commercial use. This class of ships, of which the American merchant marine still had too few, is adapted to service across the Atlantic and Pacific and to South America.

Appropriations for the Emergency Fleet Corp. up to the end of the fiscal year 1920 amounted to the immense sum of $3,255,413,024, of which nearly all was expended for shipbuilding in the war emergency and afterward. Government-built steamers cost on the average $200 to $225 per dead-weight ton. Ships of the same type were built in the United States before the war for from $60 to $70 per ton, as compared with $40 to $60 in the United Kingdom. The record of America's war effort is clearly written in the returns of the Commissioner of Navigation of the total gross tonnage of shipbuilding in the United States in the fiscal years from 1915 to 1920 inclusive:—

Year Gross
Tonnage
Built
1915 225,122
1916 325,413
1917 664,479
1918 1,300,868
1919 3,326,621
1920 3,880,639

In 1920 a marked decline in shipbuilding set in as the Government war programme approached completion. On March 1 1921 only 330 steel vessels of a total gross tonnage of 1,434,000 tons were on the ways. More than one-half of this tonnage was of tank oil carriers. Fifty-four of the 330 vessels, representing 435,000 tons, were building on Government account, and 276, of 999,000 tons, for private ownership. This sharp decrease in shipbuilding was then manifest all over the world, and was intensified by the shrinkage of trade and the unprecedented fall of ocean freight rates, which characterized the winter of 1920-1.

Manning and Operation.—Far less formidable than the task of creating new shipyards and building 13,000,000 dead-weight tons of ships for the war emergency was the work of officering, manning and operating these vessels. In the existing merchant marine of the United States, in Aug. 1914, there was a trained personnel of about 86,000, only a small part of whom could be spared for the new overseas services which the war demanded. Moreover, many of the trained American officers were required at once in the navy and the naval reserve. Two steps were promptly taken to meet the crisis; the President, by executive order July 3 1917, suspended the provision that watch-officers of vessels of the United States registered for the foreign trade must be American citizens, and the Shipping Board established an extensive sea recruiting and training bureau for the instruction of both officers and men. Many who had followed the sea in their youth and had left it now returned, and new recruits appeared in great numbers. From June 30 1917 to June 30 1920 this service produced 9,642 licensed officers and 32,335 men, all American citizens. Many others who did not pass through the training service also joined the new ships, and wherever there was need officers and men were ordered from the navy personnel, which had reached a total strength of 500,000. Few ships were anywhere seriously delayed for lack of crews.

For the control of the new Shipping Board tonnage a division of operation was developed. Relatively few of the new vessels were directly operated by the Board itself. Most of them were placed in the hands of the established private companies or new concerns which the war had brought into existence. The vessels were placed on routes indicated by the Shipping Board. Their freight rates were controlled by the Board during and for some months after the war. Division of expenses and profits was difficult to arrange, and was long the cause of much friction between private operators and the Government. Not until 1920 was a fairly satisfactory plan finally devised by which the Shipping Board assumed the risk of the voyage, and a fixed percentage of the gross receipts was allowed to the manager for his services. Government ownership and operation of shipping, especially in the stress of war, proved a difficult undertaking in the United States, as elsewhere. Particularly important was the work of the Ship Control Committee, which directed the movements of shipping to the best advantage. This committee was composed of President P. A. S. Franklin of the International Mercantile Marine Co., President H. H. Raymond of the American Steamship Owners' Association, and Sir Connop Guthrie, representing the British Government.

At the signing of the Armistice, Nov. 11 1918, the Shipping Board controlled a total fleet of 1,196 vessels of 6,540,205 deadweight tons, composed of American, requisitioned, chartered, neutral and seized German tonnage. On Aug. 3 1917 the President, under authority bestowed by an Act of June 15, requisitioned for the national service all steel hulls and materials in American shipyards of vessels of over 2,500 deadweight tons, building either for American or foreign owners, a total of 431 vessels, of 3,056,000 deadweight tons. On Oct. 12 1917, as a further step in Federal control of the shipping situation, another executive order requisitioned all American steel-built power-driven cargo vessels of 2,500 deadweight tons and over, and all American passenger vessels of 2,500 gross tons and over fit for overseas service. This established control over an American fleet of 444 vessels of 2,938,758 deadweight tons. Many of these ships were transferred to their owners for operation. Others were chartered to the war and navy departments. About 600,000 tons of German vessels, seized in American ports when the United States entered the war, were divided among the Shipping Board and the army and navy. In addition the Shipping Board secured the use of a considerable fleet of enemy vessels seized in waters of other countries. To obtain an adequate amount of tonnage the Board also chartered many Allied and neutral ships, a resource which on Sept. 1 1918 amounted to 331 ships of a deadweight tonnage of 1,084,986. By order of March 20 1918, an act which though necessary was deeply regretted at the time, the President caused the navy to seize for the use of the United States 87 Dutch vessels of 533,746 deadweight tons, at that time in or bound to American waters.

A little more than one-half of the two and one-quarter million American soldiers sent to Europe were conveyed in the passenger steamers of Great Britain, France and Italy, chiefly in large vessels of the British lines. Most of the soldiers sent over under the American flag were borne in the former German liners that had had their damaged machinery repaired. After the Armistice, however, most of the American troops were repatriated under the colours of their own country.

The La Follette Law.—In the years from 1915 to 1920 inclusive there were several important Federal enactments relative to the merchant marine. One of these was the La Follette Seamen's Law, approved March 4 1915, after a long and bitter controversy in the House and Senate. This law to a large extent governs working conditions on American ships at sea and in harbour. It requires a certain fixed proportion of able seamen and certificated lifeboatmen, a complement of boats and rafts sufficient for all passengers and crew, and improved living spaces and sanitary conditions. Most of the Act in fact deals with life-saving methods and appliances, in accordance with the recommendations of the London Conference on safety of life at sea, following the “Titanic” disaster. Several sections require a more humane discipline than had been frequent in the old days. One section, which has been the cause of much displeasure among the foreign shipping companies, brought about the amendment of treaties requiring the U.S. Government to seize and return to their ships seamen deserting from foreign vessels in American waters. This, and a complementary section permitting seamen of American or foreign vessels to demand at every port the payment of one-half of the wages due to them, once every five days, is charged with promoting the desertion of foreign crews in American waters and of burdening foreign companies with the cost of hiring substitutes at the American wage rate and with the expense of returning these substitutes to their country. It is insisted by the seamen's unions, however, that these provisions of the law tend to bring foreign ship wages up to American standards.

Other Legislation.—By Act of Congress of Aug. 18 1914 the free ship clause of the Panama Canal Act of Aug. 24 1912, which had proved wholly ineffective, was amended by admitting ships more than five years old, and exempting all foreign-built vessels admitted to American registry from compliance with American survey, inspection and measurement laws and regulations. Under this amended law 140 foreign-built vessels of 583,000 gross tons, owned by American citizens or corporations, were admitted to American registry for foreign trade in the fiscal year 1915, when the security afforded by the American flag was valuable. The number of vessels thus admitted fell off, however, to only 26, of 69,697 tons, in the fiscal year 1916, as the higher wages and operating costs of the American flag came to be realized by the owners of foreign-built tonnage. Many of these owners, indeed, sought to change their naturalized ships back to foreign registry, and 160 American vessels, of 102,479 tons, were transferred to foreign flags in 1916. On Feb. 5 1917 the President by executive order forbade the sale, lease or charter of American vessels to foreign flags without the approval of the Shipping Board.

In the spring of 1920 a most important measure known as the Merchant Marine Act of 1920, or the Jones law (from Senator Wesley L. Jones, Chairman of the Committee on Commerce), was finally passed by large majorities in Congress and signed June 5 by President Wilson. This Act solemnly declared it to be the purpose of the American people to possess a merchant marine capable of carrying “the greater portion” of their commerce and to serve as a naval or military auxiliary in time of war, this merchant marine “ultimately to be owned and operated privately by citizens of the United States.” A new Shipping Board of seven members, fairly representative of political parties and of all sections of the country, was authorized in the Act and given large authority over the merchant marine. This Board was directed to sell the Government-owned tonnage to private owners “as soon as practicable.” Postal subsidies and encouragement to new and necessary shipping routes were provided for. Deferred rebates and discrimination against shippers were forbidden. The coastwise law barring foreign ships was extended after Feb. 1 1922 to the trade between the Philippines and the United States. Benefit of preferentially low railway rates on imports and exports was reserved to American vessels wherever their capacity is sufficient. Encouragement was given to American marine insurance, and to the American Bureau of Shipping, the “American Lloyd's.” A new and favourable system of ship mortgages was provided. American vessels in foreign trade were exempted from excess profits taxes on condition that the amount of the exemption and twice as much more of the capital of the owners were applied to the building of other ships in the United States. The President was directed to secure the amendment of provisions in commercial treaties that prevented the United States from imposing discriminating customs taxes and tonnage dues on goods imported in ships of foreign registry. President Wilson refused to carry out this last-named requirement on the ground that the action indicated would provoke the resentment of foreign ship-owners and their Governments. The Treasury Department failed to prepare regulations for the application of the clause exempting American foreign-trade ships from excess, profits taxes. Preferential treatment for American ships in the dispatch of imports and exports hauled at low rates on American railways was not made effective by the Shipping Board and the Interstate Commerce Commission, whose coöperation was necessary for the actual enforcement of the law.

Statistics.—The amount of shipbuilding, the total registered overseas and coastwise tonnage, the total merchant marine, and the proportion of American imports and exports conveyed in American ships for the six fiscal years ending June 30 1920 are as follows:—

 Year   Shipbuilding  Registered
 for Foreign 
Trade
Enrolled or
 Licensed for 
Coastwise
Trade
Total
Merchant
Marine
Proportion
of Value of
 Imports and Exports 
Carried in
American Ships






Gross
tons
Gross
tons
Gross
tons
Gross
tons
Per cent
1915 225,122  1,862,714 6,486,384 8,389,429  14.3
1916 325,413  2,185,008 6,244,550 8,469,649  16.3
1917 664,479  2,440,776 6,392,583 8,871,037  18.6
1918 1,300,868  3,599,213 6,282,474 9,924,518  21.9
1919 3,326,621  6,665,376 6,201,426 12,907,300  27.8
1920 3,880,639  9,924,694 6,357,706  16,324,024  42.7

A new Shipping Board, appointed in June 1921, by President Harding, headed by Albert D. Lasker of Chicago and including Admiral William S. Benson in its membership, quickly effected an important reorganization of the executives of the Board, installing a group of practical shipping men as officials of the Emergency Fleet Corporation, and committing to these men the active management of the government-owned merchant fleet. Following this reorganization, the new Shipping Board addressed itself to the working put of a comprehensive subsidy system for postal liners and cargo ships, intended to facilitate the sale of the government-owned fleet to private owners, as directed by the Merchant Marine Act of 1920.

(W. L. M.)