NATIONAL FOREIGN TRADE COUNCIL. 153 



the merchant fleets now in being, even with the augmentation at present provided for by the 

 construction programs of the United States and Great Britain, will be inadequate to the ser- 

 vice they will be called upon to render. 



It now seems probable that it will require the continuation of the present accelerated pro- 

 gram of construction for a considerable time after the war, in order to bring the world's 

 ocean tonnage again to the point where it is adequate to meet the world's needs. 



The United States, then, will emerge from the war with a large merchant fleet and 

 with the facilities for its renewal and expansion, but unless positive steps are taken in the 

 very near future toward the formulation and adoption of a sound national maritime policy, 

 it may be set down as absolutely certain that these newly constructed American vessels will 

 not remain in operation under the American flag and that the American merchant marine, 

 rehabilitated with vast expenditure of capital and effort as a war emergency measure, will 

 again be dissipated under the operation of inexorable economic laws. 



For one thing is absolutely sure : Unless these vessels can be operated profitably under 

 the American flag, either they will be transferred to foreign registry or they will rust out a 

 useless existence which will soon terminate on the scrap heap. Fot production is fimdamen- 

 tally a question of profit, and production of ocean transportation, especially in foreign trade, 

 where we must meet the competition of the world's ships, is not differentiated in its amen- 

 ability to this economic law from the production of cotton or lumber or any other of the 

 myriad articles of our daily commerce. 



It is true that Congress has enacted a law forbidding the alienation of any American 

 vessel without the consent of the United States Shipping Board, but neither that law nor 

 any other of similar character will keep any American vessel in operation or prevent bar- 

 nacles from growing on its hull unless conditions are such that it can be operated under the 

 American flag at a profit for those who are operating it. 



The American national maritime policy, therefore, which is to provide for the perma- 

 nent retention and operation of our new merchant fleet under the American flag, must be 

 founded upon the principle that those operating the vessels shall be assured of conditions 

 which will enable them to meet the competition of all other maritime nations upon an 

 equitable basis. 



As your Committee has pointed out in previous reports, the law creating the Shipping 

 Board recognizes the wisdom of operating the vessels of the new fleet through private enter- 

 prise. It provides that upon the termination of a fixed period after the re-establishment of 

 peace the Board itself shall not undertake the operation of any vessels until after a bona fide 

 effort to sell, lease or charter such vessels has failed. It is obvious at once that any bona 

 fide effort to sell, lease or charter must take into account the exceptional element of war 

 cost and war service. The Chairman of the Shipping Board has publicly recognized this 

 in an address in which he said i 



"They [these ships] are being constructed because, and only because, of war needs, 

 under conditions and pressure which have enormously increased their cost per ton over the 

 cost of construction prevailing in normal times. It would seem fair that their valuation 

 be written down to a point which will give them a fair chance to compete with vessels built 

 before the war at much lower cost." 



The merchant fleet provided by the program of the Shipping Board will represent at 

 the conclusion of the war an expenditure by the United States of approximately $4,000,000,000. 

 It is obvious that if private enterprise, in order to undertake the operation of these vessels 



