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confronted the United States during the World War is recalled. Not only do such ships constitute an asset of the greatest value, from the standpoint of pational defense and of inderendence upon the high seas, but also afford incomparable training in seamanship and a reserve and auxiliary force of trained seamen whose value cannot be overestimated.

While services like the Army and Navy have only high national defense insurance value in time of peace, the merchant marine has both a high insurance and utility value. No one will gainsay that the Coast Guard, the Lighthouse, the river and harbor, the good roads, the Reclamation, and other services and projects sustained by the Government do not possess the highest value, and provide returns to the Nation so great as to far outweigh the expenditures involved in maintaining such services; and yet, taking only the balance sheet in the Government Accounting Office as a basis, it will appear that none of such services is self-sustaining, and that all of the money expended by the Government finds no direct return-except in the case of customs receipts, one made possible through the development of the rivers and harbors of the Nation,"

SHIP TONNAGE AND MEASUREMENT TERMS EXPLAINED

The hearings held in 1928 on the Merchant Marine Act of 1928 contained very complete definitions and explanations of ship tonnage and measurement terms. I will insert them at this point:

Every floating body will displace its own weight of water. Sea or salt water weighs approximately 64 pounds per cubic foot. If we find the number of cubic feet of that portion of a floating ship which is under water it is a simple matter to determine the ship's displacement.

Since salt water weighs approximately 64 pounds per cubic foot, the total number of cubic feet represented by the under-water portion of the ship multiplied by 64 represents the total number of pounds of water displaced by the ship.

If the total number of cubic feet of the under-water portion of the ship is divided by 35, it will give the number of tons of water displaced, since 35 cubic feet equal 1 ton, or 35 times 61 pounds equals 2,240 pounds.

Let us assume that a ship is afloat in a quiet body of water. The water freezes and becomes a solid mass of ice. (For the purpose of this illustration, the expansion of the ice is ignored. The ship is lifted out of the ice. The cavity in the ice then represents the form of the under-water portion of the ship. We then fill this cavity with water to the level of the surface of the ice. The water is pumped out of the cavity and placed on one side of a scale, the ship is placed on the opposite side of the scale. The scale will then balance.

Now to prove this, if the water on the scale which balances the weight of the ship is again poured into the cavity in the ice and we proceed to put the ship back into the cavity, the water in the cavity is forced aside or displaced until the ship occupies the entire space in the cavity, at which time it will have displaced all of the water which we previously found equaled the weight of the ship.

Displacement, light.-The weight of the ship, excluding cargo, passengers, fuel

, water, stores, dunnage, and such other items which are necessary for use on a voyage.

Displacement, loaded.—The weight of the ship including cargo, passengers, fuel, water, stores, dunnage, and such other items necessary for use on a voyage, which brings the vessel down to her maximum draft.

Deadweight tons. The carrying capacity of a ship in tons of 2,240 pounds. The difference between the displacement light and the displacement loaded. As an illustration, a ship with a light displacement of 4,000 tons has a draft of 9 feet; at this displacement (4,000 tons and draft of 9 feet) her deadweight is zero. Her loaded displacement would amount to 15,000 tons and she would have a draft for this loaded displacement of 30 feet. Therefore her deadweight would be the difference between the light and loaded displacement, or a carrying capacity of 11,000 tons.

Cargo deadweight tons. The number of tons (2,240 pounds per ton) which remain after deducting fuel, water, stores, dunnage, and such other items necessary for use on a voyage from the deadweight of the vessel. As an illustration, a vessel of 11,000 tons deadweight takes aboard fuel, water, stores, dunnage, and such other items necessary for a voyage amounting to 1,200 tons, the cargo deadweight available will then amount to 9,800 tons. The cargo deadweight varies according to the weight of the last-named items. In other words, for a long voyage fuel may be carried for a round trip and the quantity of stores proportionately increased, which would reduce the figure for the cargo deadweight tons by a like amount.

Gross tons.-The entire internal cubic capacity of the ship expressed in tons of 100 cubic feet to the ton, except certain spaces which are exempted, such as peak and other tanks for water ballast, open forecastle bridge and poop, excess of batchways, certain light and air spaces, domes and skylights, condenser, anchor gear, steering gear, wheel house, galley, cabins for passengers (when on decks not to hull), the other items (as enumerated in Measurement of Vessels, published by the Department of Commerce, Bureau of Navigation).

Net ton 8.-The tonnage of a ship remaining after certain deductions have been made from the gross tonnage expressed in tons of 100 cubic feet to the ton. Among the deductions are crew spaces, master's cabin, navigation spaces, donkey engine and boiler, shaft trunks, percentage of propelling machinery space, and other items (as enumerated in Measurement of Vessels, published by the Department of Commerce, Bureau of Navigation).

Register tons.-Register tonnage is applicable to both gross and net; in other words, it can be expressed as gross register tonnage or net register tonnage. However, as a general rule it is ordinarily used with reference to net tonnage.

Power tons.—This is used to classify the ship for the purpose of establishing the rates of pay of the ship's officers and is calculated by adding together the gross tonnage and the indicated horsepower of the ship. The result is power tonnage.

Grain cubic.—The maximum space available for cargo measured in cubic feet, the measurements being taken to the inside of the shell plating of the ship or to the outside of the frames and to the top of the beams or underside of de k plating. In other words, if a bulk cargo was loaded such as grain it would flow in between the frames and beams and occupy the maximum space available.

Bale cubic.—The space available for cargo measured in cubic feet to the inside of the cargo battens, on the frames, and to the underside of the beams. ID a general cargo of mixed commodities the bale cubic applies. The stowage of the mixed cargo comes in contact with the cargo battens and as a general rule does not extend to the skin of the ship. From figures taken from an actual ship, the grain cubic amounts to 641,000 cubic feet and the bale cubic amounts to 470,000 cubic feet.

Cargo stowage factor.-The bale cubic divided by the cargo deadweight equals the stowage factor. In other words, a ship with a bale cubic of 570,000 cubic feet and a cargo deadweight of 9,800 tons would have a stowage factor of about 58 cubic feet.

VALUE OF MERCHANT MARINE TO FARMERS OF AMERICA

In further evidence of the value of a merchant marine to the farmers, I wish to call attention of the committee to the 1928 hearings, in which Mr. Fred B. Brenckman, Washington representative of the National Grange, a national farm organization extending from Maine to California and having at that time approximately 800,000 members. Mr. Branckman said:

With 56 percent of our exports composed of agricultural products and confronted with the necessity of expanding our foreign markets in order to dispose of our agricultural surplus, the farmer is vitally interested in the maintenance of an adequate merchant marine.

I simply want to observe, Mr. Chairman, that probably no other class among our people was more seriously embarrassed and more heavily penalized by our lack of merchant ships at the breaking out of the World War than the farmers of the United States. When Great Britain commandeered 1,500 of her merchantmen for war purposes and when our German ships were swept from the ocean, it left us with very inadequate means of getting our products to market. Then

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it was that we learned the meaning of freight embargoes, and our products were piled up in warehouses and elevators and upon the docks, with scarcely any ships to transport them. During this emergency the price of transporting a bale of cotton from Galveston to Liverpool rose from $2.50 to $50 a bale. It is estimated that it cost the cotton growers of the South $750,000,000 more to produce the cotton crop for 1914 than they received for it. The major portion of this huge loss was directly due to our lack of shipping facilities. At the same time the cost of transporting a bushel of wheat from New York to Liverpool jumped from 8 cents a bushel in 1914 to 27 cents in 1915 and during the war reached the peak charge of $1.36 a bushel. In this disastrous and expensive fashion we had brought sharply home to us the extreme folly of depending almost exclusively upon the ships of other countries to carry our foreign commerce.

The $3,000,000,000 which we paid for our war-time fleet gave us the ships which were absolutely vital to winning the war and today the Government has operating a portion of what is left of that fleet in the interest of American trade and for the benefit of all our people. It is manifest that the vessels of this fleet must be kept in repair and that there should be adequate provision for replacement unless we are to suffer a painful repetition of the experience of 1914

The Grange, of course, is in favor of giving proper encouragement to private operation to engage in the shipping business, but we consider the merchant marine of such vital importance that if private enterprise is unable to furnish the service and supply the facilities demanded by our expanding commerce, we are strongly persuaded that it would be better for the Government to continue in the shipping business for the time being, rather than to have no merchant marine at all, Much has been said of the losses incurred by the Government under the operations of the United States Shipping Board, but this leaves out of consideration the obstacles and difficulties with which the Board has been compelled to contend. Now, of course, we all realize that fleet was built to win the war and that in the very nature of things the whole or a part of the cost

th fleet will have to be charged off as a war cost and we feel it has not been altogether fair to the Shipping Board to charge all of those losses and deficits that have been sustained to the management of the Board. It also overlooks the service which it has rendered to our people.

Our ocean freight bill is estimated at $720,000,000 a year and if it may be assumed that freight rates are 10 percent lower than would be the case if we had no ships, it is apparent that the operations of the Shipping Board result in a saving of $72,000,000 a year to the American people. The deficit sustained by the Government during the past year, in connection with the operations of the Shipping Board, amounted to only 15 or 18 million dollars, which is a comparatively small sum when compared to the benefits conferred upon the people. In 1926, when the English coal strike was in progress, many of the British ships upon which we were depending were withdrawn and utilized in carrying coal from this country to Great Britain. In this emergency, the Shipping Board placed nearly 100 ships of the reserve fleet into commission, carrying our wheat and cotton to foreign markets, resulting in a saving to the American farmer which has been estimated at $600,000.000. If the Shipping Board should continue to lose an average of $18,000,000 a year, which is pot at all likely, because the deficits are steadily declining, the service rendered by the Board to the American farmer alone in 1926 would offset those deficits for a period of almost 36 years

We paid $3,000,000,000 in the time of the war for vessels that we probably could have bought, under normal conditions, for about one-sixth of the amount, and we are paying $120,000,000 a year interest on the money we borrowed to build these ships and we feel, out of all that, the American people are entitled to a merchant marine and one that would be on a sound and continuing basis.

Now, I desire to insert in the record a statement of Dr. Julius
Klein, Assistant Secretary of Commerce, in a radio address delivered
February 5, 1933:

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COMMERCIAL VALUE OF THE MERCHANT MARINE

The importance of this shipping business, both in terms of freight and in expenditures for supplies, labor, and other essentials, is all too little appreciated. Just before the war, our shipping was earning in this traffic about $35,000,000

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a year, and was spending for supplies and other purposes in this country about $26,000,000. As against these two figures, our shipping in 1931 (a very low subnormal year) earned no less than $187,000,000 in freight currying and spent about $141,000,000 in this country for supplies, wages, other items of operation, etc. There is no doubt whatever that much of this business-doubly precious in those gaunt times-would have been lost if it had not been for the valuable help of the new shipping laws.

It seems to me that it would be as ill founded a policy to abandon the merchant-marine services we have built up as it would be to tear up thousands of miles of our railways and highways and to invite foreign nations to rebuild them with their capital and labor. We have the ships just as we have our domestie transportation systems, and they are ships that are well able to hold their own in the company of those of any other nation.

BENEFITS OF THE MERCHANT MARINE TO THE NATION I now wish to insert a statement made by a former chairman of the Shipping Board before this committee during the merchant marine investigation held in 1931. Mr. T. V. O'Connor, then Chairman of the Shipping Board, stated :

During the period 1921-30 the water-borne foreign trade of the United States amounted to over 900,000,000 tons of freight, valued at $74,000,000,000. It is significant to note that American ships, which before the war carried less than 10 percent of our commerce, during this 10-year period carried over 40 percent, or upward of 360,000,000 tons of freight valued at nearly $25,000,000,000. Passenger and freight revenues accruing from this vast movement of traffic totaled approximately $9,000,000,000. On the most conservative estimate, fully one-third of this revenue must be credited as a direct gain to American labor and industry through the possession of a strong merchant marine.

As already indicated, the vessels of the Shipping Board operated from 1917 to 1920, inclusive, at a substantial profit to the Government.

Subsequently shipping conditions throughout the world were such that losses were sustained by the Board's fleet. Up to the end of the fiscal year 1930 these losses totaled something less than $100,000,000.

However, in incurring this loss, the fleet handled business which brought to the Government, and consequently to the American people, gross revenues amounting to approximately $2,180,000,000. Had not the American merchant marine; then owned almost entirely by the Government, aggressively competed for and secured this business, it would have been handled by ships of foreign registry.

When we consider that foreign ships are built abroad, that their earnings are largely invested abroad, and that they are manned almost entirely by foreigners who spend most of their money in other lands, the meager finan. cial benefits accruing to this country from foreign ship operations become at once apparent. On the other hand, the earnings, wages, and purchases involved in the operation of Amercan ships ar all transactions which directly benefit the Government and people of the United States. For this reason the American merchant marine, most of which is now privately owned, has in no small degree been an effective instrument in the stimulation of domestic industry and labor.

When we come to consider the way in which an adequate merchant marine opens up additional foreign markets, we enter into another phase of the benefits derived from having a merchant fleet of our own. Aside from the stabilization of rates, and the consequent sayings in freight charges to American ex. porters and importers, the records of the past 10 years must convince the most skeptical that trade does follow the flag.

Whereas in the decade prior to 1914, the value of our foreign trade carried in American ships averaged but $300,000,000 annually, during the decade 1921-30 it averaged $2,600,000,000 per annum,

In 1914 only six American-flag ships, of 70,000 gross tons, were operated in our trade with Europe. In 1930 there were 232 American ships, totaling 1,500,000 gross tons, and our trade with that region had increased 50 percent.

In 1914 there were five American ships, of 23,000 gross tons, operating between the United States and South America. In 1930 the number had been increased to 90, and our trade had increased 200 percent.

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In 1914 we had no American ships trading to the African Continent. Today we have 22 ships, totaling 125,000 gross tons, and our trade has increased 325 percent.

Our trade with the Orient tells the same story. In 1914 there were five American ships operating from Pacific coast ports to the Far East. In 1930 the number had grown to 140 ships, of a million gross tons, and our trude just before the depression showed an increase of 380 percent.

In this brief statement setting forth the savings in freight rates, the promotion of foreign trade, and the stimulation to industry and labor afforded by a strong merchant marine under the American flag, it has been possible only to indicate in the broadest way a few of the results achieved. It should be stated in conclusion that the expense involved, large though it has been, has resulted in the establishment of ocean services operating to all our principal foreign markets. The American shipper and traveler is assured of dependable carriers, furnishing regular service at reasonable rates, and the country at large possesses a marine auxiliary force which in time of national emergency will prove indispensable to the United States Navy.

VILUE OF SHIPPING AND SHIPBUILDING INDUSTRY TO NAVY

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Next I wish to insert a statement made in 1882 by Hon. William E. Chandler, then Secretary of the Navy:

The interests of the Navy are inseparably involved with those of the commercial marine of the country.

The protection of commerce is the first object of the Naval Establishment and unless efficient preparation for such protection is made a single war may destroy a nation's merchant feet beyond hope of recovery. The carrying trade once diverted is slow to return to its old channels. As the merchant marine is dependent at critical periods upon the Navy, so, on the other hand, the Navy, no matter how strong it may be, must in emergency avail itself of the resources of the merchant marine.

Referring then to the war between the States, Secretary Chandler said that this was clearly shown during that war. He said further:

At its outbreak, the Navy had normally a tonnage of 105,271 tons. To increase it, 215,975 tons of shipping were bought. These purchased ships were {U-suited for war purposes, but they were nevertheless indispensable. If 10 years before the war our maritime necessities had been recognized and the relations of the Navy and the merchant marine had been understood and organized, the Government might have saved millions of dollars and have had in the beginning vessels capable of capturing the English-built commercedestroyers and blockade runners.

As the Navy must in emergencies resort to the merchant marine for ships, it must also draw upon it for officers and men to supply its deficiencies. The Naval Establishment is further dependent on the merchant marine through its relation to the ship-building interests. It must be able to build ships within the country and all the requirements for ship building must here exist. The plants and the skilled mechanics must be here, but the ordinary demands of the Navy will not support a single establishment and ship builders cannot exist unless they find employment and profit in building commercial vessels.

If, therefore, the present downward tendency of the merchant marine is unchecked, the Navy will soon be in a position that in the event of war it will be unable to build a single vessel or to recruit its numbers by officers and seamen of bautical experience.

It may be argued that capital would be put into shipping if shipping were profitable. The reply is that shipping would become profitable if it received as fair treatment as other forms of investment. All the interests liable to suffer from foreign competition are protected, but that commercial industry in which international competition is sharpest, in which rival nations come face to face, is left by the Government to take care of itself.

It manufacturers are protected and nothing is done for shipbuilding, capital will seek employment in manufactures for which the Government guarantees a return, Even our transcontinental railways, which had nothing to fear from foreign competition, have received grants which, in comparison, places the Interoceanic carrying trade under fatal disadvantages.

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