1937, deadline had been established for the termi- 
nation of the mail contract program, and this dead- 
line was met by the new Maritime Commission. 
While the mail contracts were being settled, how- 
ever, a thorough economic assessment of the mer- 
chant marine was also being made by the Maritime 
Commission to serve as the basis for future program 
execution. Based on the findings of its Economic 
Survey of the American Merchant Marine, which 
was published in November 1937, the Commission 
announced its intention to build 50 merchant ships 
per year over a 10-year period. The announced pro- 
gram was designed simply to maintain existing U.S. 
fleet capacity through the replacement of obsolete 
tonnage and was not a fleet expansion program. Be- 
cause sufficient financing was not available to under- 
take the desired construction privately, the program 
was begun under the provisions of Title VII and 
ships were constructed for Government account. 
By the end of 1939, 127 dry cargo vessels had 
been contracted for under the new 500-ship pro- 
gram, but private buyers had been found for only 38 
of these vessels. The success of the operating subsidy 
program in this period was also limited and, because 
of these developments, the Government continued to 
operate several older Government-owned services 
through charter arrangements with private firms. Dur- 
ing this period, the Maritime Commission also estab- 
lished a new Government-sponsored Good Neighbor 
service tc South America. 
As indicated previously, a new Title XI was added 
to the Merchant Marine Acti which author- 
ized the provisi ederal insurance on eligible 
ship mortga S_a_means of encouraging private 
Sapte ues oat in U.S. ship—construction.. Over 
the years this program, which is now the primary 
program for ship financing and refinancing assistance 
carried out by the Government, has been revised 
many times and was completely overhauled in 1972. 
Today, the Title XI program is a financing guaran: 
tee program (rather than a mortgage insurance pro- 
gram) under whic which the Government guarantees 
shipbuil ding obligations sold to investors. Under the 
present program, such guarantees may be provided 
by the Federal Government covering up to 75 per- 
cent of the construction cost of vessels built with 
construction-differential subsidy assistance, and non- 
subsidized construction projects may qualify for Fed- 
eral guarantees of up to 87!% percent of vessel cost. 
Vessels to be used in both the foreign and domestic 
trades are eligible for Title XI aid. Today the types 
of U.S. vessels specifically eligible for mortgage 
guarantee assistance include: cargo, passenger, and 
combination ships, tankers, tugs, towboats, barges, 
dredges, fishing vessels, floating drydocks, and 
oceanographic research and pollution abatement ves- 
sels. Coverage has also been extended by legal inter- 
pretation to mobile offshore drilling rigs. Under 
current arrangements, the National Oceanic and At- 
mospheric Administration administers the Title XI 
program with respect to fishing vessels, and the 
Maritime Administration administers the rest of the 
program. 
The program to build 50 ships per year had just 
begun to show results when, in August 1939, war 
began again in Europe. Because of the hostilities, the 
U.S. merchant ship construction program was rapidly 
expanded and by the time the United States entered 
the war about 6 million deadweight tons of shipping 
had been ordered from U.S. yards and a vessel of 
simplified design (the Liberty Ship) had been devel- 
oped for mass production and export to Great 
Britain.°° 
In 1941 the United States entered the war, and 
within a year and a half the United States was build- 
ing ships faster than the enemy could sink them. 
From 1942 through 1945, U.S. yards produced 
5,592 merchant ships and during this period expendi- 
tures for merchant ship construction exceeded $12 
billion. A work force of 4 million workers was in- 
volved in this effort, with 1.7 million employed in 
the shipyards themselves. 
In February 1942 the Government took over di- 
rection of ship operations with the establishment of 
the War Shipping Administration. The Chairman of 
the Maritime Commission also served as head of this 
agency, and the two departments worked closely 
together. The new agency took over the fleets of both 
domestic and foreign trade operators, purchased 
foreign ships, and seized enemy shipping. New ways 
were devised to maximize vessel use, and thousands 
of merchant seamen were recruited and trained. Dur- 
ing the war four-fifths of the supplies for the war 
effort were carried on ships under the control of the 
War Shipping Administration. 
Maritime Policy After World War II 
At the beginning of World War IT, only 14 percent 
of world merchant tonnage was registered under U.S.- 
flag. The United States emerged. from the war with - 
60 percent of total world capacity. Postwar recon- 
struction programs imposed heavy demands on mer- 
chant shipping capacity, and efforts were begun im- 
mediately to restore private control of U.S. shipping. 
The War Shipping Administration was abolished in 
September 1946, and its remaining functions were 
transferred to the Maritime Commission. By the end 
| of 1947 all ships taken over from private interests had 
been returned to their owners. The great demand for 
% Samuel A. Lawrence, op. cit. note 46, p. 74. 
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