IN SEPTEMBER, 1917, when the Shipping Board found itself possessed of a fleet as the result of requisitioning all ships over 2500 tons deadweight, we were forced to establish a Division of Operations and make full use of the power given us by the Shipping Act. At that time a condition almost bordering on chaos prevailed in the shipping industry. We therefore required an executive with vision, who had no special shipping interest to serve and who could organize and handle men in what was developing to be one of the most important divisions of the Shipping Board. For this reason we asked Mr. Edward F. Carry to take the position as Director of Operations. The effective work which Carry did in organizing this important division proved that we selected the right man. His untiring energy, his fine judgment of men and their loyalty to him under very trying conditions, gave assurances of the success of the Division of Operations.
Fig. 9. EDWARD F. CARRY. VICE-CHAIRMAN OF THE SHIPBUILDING LABOR ADJUSTMENT BOARD TO SEPTEMBER 11, 1917; DIRECTOR OF OPERATIONS, UNITED STATES SHIPPING BOARD, SEPTEMBER 7.9, 1917, TO OCTOBER 28, 1918; TRUSTEE, EMERGENCY FLEET CORPORATION, AUGUST 7, 1918, TO JANUARY 11, 1919; CHAIRMAN, PORT AND HARBOR FACILITIES COMMISSION, MAY 73, 1918, TO JANUARY 11, 1919.
As Director of Operations, Carry represented the Shipping Board in many of the war conferences with the Secretary of War, the Secretary of the Navy, and also with the Executive Board of the Army War Council which met weekly in the War Department and was composed of cabinet officers, chairmen of the various boards and commissions in Washington connected with war work, and the Chief of Staff of the Army. His advice and counsel in cooperating with the different branches of war activity always were welcomed. As ships were acquired or built, they were turned over to the Division of Operations.
These ships then were assigned by Director Carry to the War and Navy Departments and to commercial trades, according to the class and style of ship delivered. The Division of Operations was considered the most important department of the Shipping Board, with the possible exception of the Ship Construction Division.
The Division of Operations acted largely as a ship operator itself, under the direction of Carry. It was his policy to assign as many steamers as possible to commercial companies to partially compensate them for vessels that had been requisitioned by the Army and Navy. Later, as a larger number of vessels was available for assignments, it became necessary to create additional operating organizations. For this purpose, steamship organizations that had been charterers and also those which had acted as leading agents for owners were appointed by him as managing agents. When the assignment policy was first initiated, contracts for compensation had not been determined upon. Therefore steamers were turned over to private corporations with instructions to handle them as if their own, with the understanding however that the basis of compensation was to be decided upon as soon as possible.
During the period when organization was the main concern of the Division of Operations, we were hard pressed on every hand for ships to handle essential and war commodities. The number of vessels was hopelessly inadequate, and often decisions had to be made under desperate circumstances. France was appealing to us for ships with which to supply her with the necessary war materials and we made every effort to be helpful. We were enabled from time to time to work out a solution of this problem through contact with M. André Tardieu, French High Commissioner in Washington. M. Tardieu is a type of French Statesman that wins the admiration and respect of every one, and I felt under personal obligation to him for his cooperation.
We soon realized our need of a system similar to the British method, to control the movements of vessels. The prime essential was finding the right man. Mr. Welding Ring was selected as Chairman and Mr. J. Barstow Smull and Mr. Daniel Bacon as the other members. Bacon, who was with the Naval Reserves, soon was compelled to resign and return to the Reserves. He was succeeded by A. C. Fetterolf, who was in charge of the traffic department of the White Star Lines. The Chartering Committee finally was composed of Ring (Chairman), Smull and Fetterolf. An abler group of men hardly could have been found for this work. Ring had spent his life in the export trade, of which he had made a very thorough study. Smull was a well-known ship-broker and steamship agent, and knew charter parties as well as any one in the country. Fetterolf was thoroughly trained in the management of steamship lines.
The Chartering Committee's chief task was to force or influence neutral tonnage to enter trades which were rather neglected but upon which we depended for essentials. For instance, we needed nitrates from the west coast of South America. But the neutral steamers preferred the manganese trade of the east coast of South America. The Committee fixed the rates so that it became more profitable to deal with the sources of needed supplies and less profitable to deal with those not so essential. Thus a vessel was allowed to go to the west coast of South America at a high charter rate, and to the east coast at a lower rate. What this control meant in dollars and cents is shown by the fact that the Chartering Committee reduced South American rates by more than 36 per cent. Before a steamer could clear from an American port, the charter party had to be approved by the Chartering Committee. Until this approval had been secured the War Trade Board would not issue a bunker license.
Our bunker regulations, avowedly aimed at the Northern neutrals, produced consternation at first. The combined effect of the prohibition of exports and the withholding of bunkers was temporarily to paralyze Dutch and Scandinavian shipping in the trans-Atlantic trade. At one time, no fewer than 136 steamers, with an aggregate gross tonnage of 750,000, were held up in American ports. It was a salutary lesson to the Northern neutrals. They realized the Chartering Committee had despotic control of ships; and that the War Trade Board could cooperate with it. Our rule, based on the necessity of compelling ships bunkered here to return to American jurisdiction, was modeled after that of Great Britain and was intended primarily to obtain sufficient tonnage.
Rates had soared to unbelievable heights. Exporters were willing to pay $125 to $150 a ton from New York to France or England, and $300 and $350 a ton to the Mediterranean. The Chartering Committee gradually reduced these outrageous exactions until the highest rate permitted in the trans-Atlantic trade was $75 a ton.
As an instance of the manner in which the Committee meted out justice, I cite a small Canadian steamer which had been chartered to load a cargo of machinery and merchandise for Portugal, by a group of men who thought they could take the chance of charging rates far in excess of those fixed by the Committee. When word was received of what was planned, the Committee asked for a copy of the freight list. This was found to total one million six hundred thousand dollars, although the vessel itself was of less than four thousand tons deadweight capacity. Clearance was refused until steps had been taken to refund nearly one million dollars to shippers who would otherwise have been gouged. To tighten its hold, the Committee informed American charterers of neutral ships, on March 29, 1918, that they must carry cargos for such voyages as might be determined by the Shipping Board; and that if they declined to do so the Shipping Board would requisition their charters.
While the Chartering Committee exercised effective control so far as basic charter rates were concerned, it could not go far enough in determining berth rates. The rapacious charterer still had a chance to profiteer. Although he could obtain tonnage only at the charter rate fixed, he could charge individual shippers almost any berth rate that he could extort. To remedy this, the Shipping Board decided, on April 18, 1918, that no charters would thereafter be issued except to itself. The Shipping Board, knowing the costs and having complete control of each vessel, now could fix berth rates and harmonize them with lowered charter rates. Berth rates were reduced from $100 a ton to $35 for steamers, and $30 for sailers. After this it became one of the principal duties of the Chartering Committee to control charters for neutral tonnage, on behalf of the Board. This involved delicate negotiations with foreign powers. Most of the time charters were for such periods that we could shift vessels about to insure their employment in the more essential trades. By the end of 1918 the Committee had chartered 326 steamers of 1,403,320 deadweight tons, the largeness of which total is explained by the fact that it includes rechartered ships. In addition to the steamers, there were fifty-five sailers of 129,121 deadweight tons.
The Chartering Committee also exercised through the War Trade Board, which had the power of granting licenses for bunkers and stores and for imports and exports, a certain indirect control over American vessels. This was made a direct control, through the customs and inspection service of the Treasury Department, by act of Congress approved July 18, 1918. A committee consisting of the assistant director of operations of the Fleet Corporation and the assistant director of the Railroad Administration handled questions that involved relations between shipping and the railroads, such as these: through-export bills of lading, export and import rail rates, allocation of Shipping Board tonnage to relieve temporary railroad congestions at certain ports, joint consideration of traffic available to support regular sailings from American ports, assignment of Shipping Board vessels for railway operation, wage questions involving railway floating equipment and Shipping Board vessels.
The Chartering Committee maintained strict control of charter rates until January 9, 1919, after which date its strictures were relaxed. But prior to that date it had become subservient to the Shipping Control Committee, a body which was called into being in order that American vessels might be operated more in conformity with recommendations of the Allied Maritime Transport Council, and hence with a stricter regard for military exigencies. After February 11, 1918, the Chartering Committee concerned itself almost entirely with charter and freight rates, leaving to the Shipping Control Committee, created on that date, the matter of allocating ships and cargos, and of "turn-around." When the war emergency had passed, the duties of the Chartering Committee decreased still further, so that it was possible to dissolve on March 1, 1919, and to transfer to the Division of Operations such duties as had remained.
In the summer of 1918, Mr. J. H. Rosseter succeeded E. F. Carry as Director of the Division of Operations. Carry accepted the Chairmanship of the Port and Harbor Facilities Commission. Rosseter displayed his talents as a practical shipping man in recommending to the Construction Division of the Fleet Corporation designs and changes in our war fleet of ships, so that they could be used efficiently after the war in competition with the ships of other nations. He made a report as to the manner and method of equipping and furnishing the 515 and 535 passenger ships; and also for improving the practical loading and other equipment on our cargo ships then being constructed. In the service of the Fleet Corporation no other man was so eagerly sought for his advice and counsel.
CONGESTION at the ports in France, at New York and at other American ports, and the fact that the War Department, the Navy Department and the Shipping Board were endeavoring to operate separate fleets, developed a situation that was chaotic. Regardless of the number of ships we might build, unless they were efficiently operated by proper loading and prompt departure from port and the number of days required to make a round trip to France reduced, it would be impossible to feed and supply even a small army in France. It was decided to appoint a Shipping Control Committee to supervise and coordinate operation of the combined fleets.
Finding the right men to constitute the Shipping Control Committee was a difficult task. I wanted men of imagination and broad outlook, who also knew world trade---not merely ships and their management. America was fortunate, especially in view of its lack of modern shipping experience, to have such a man as P. A. S. Franklin, President of the International Mercantile Marine Company. He is the recognized authority on ocean transportation, in this country. His opinions on shipping matters and world trade commanded respect at home and abroad. He had been serving on a number of advisory committees and knew exactly how inefficient was our system for utilizing tonnage without regard for the needs of the Allies. I selected Franklin as Chairman of the Committee, February 11, 1918. Desiring to contribute his knowledge and experience to the task of winning the war, he consented to accept the appointment, notwithstanding the magnitude of other work in which he was engaged both for his own company and for the Government.
On Franklin's recommendation, I named as the other members of the Committee H. H. Raymond, of the Clyde and Mallory Steamship Company, and Sir Connop Guthrie, who represented the British Ministry of Shipping in New York. Realizing that the Shipping Control Committee, of which he had become the chairman, must be clothed with full authority, Franklin was most careful to ascertain just what were his powers. Mr. Edward S. Burling, our general counsel, informed me that Franklin desired to have a resolution passed by the Board clearly defining his authority. I directed him to draft such a resolution and submit it to Franklin for his suggestion. When this had been done, Burling brought it to me for my approval. I was most anxious to avoid the possibility of any controversy over authority. Therefore I requested Burling to submit it to Franklin again, to urge him to insert any additional provisions necessary to give him the powers he wanted. When the matter of Franklin's appointment was under consideration, I was quite well aware that the President did not at that time share my high opinion of him.
The President's feeling toward him grew out of Franklin's connection with the International Mercantile Marine. When Doctor Wilson was President of Princeton University, Mr. Charles B. Alexander, a trustee of the University and a prominent New York lawyer, was one of the principal organizers of the International Mercantile Marine, in connection with the organization of which criticism arose. Because of Alexander's prominence in this transaction Doctor Wilson wished to remove him from the Board of Trustees. Former President Grover Cleveland also was a Trustee of Princeton and Doctor Wilson needed his support to remove Alexander. The President told me the story and showed some feeling because Mr. Cleveland had disagreed with him and had refused to vote in accordance with his request.
I feared that his feeling against Alexander would be reflected in his attitude towards Franklin. Hence I was reluctant to ask him in advance for approval of Franklin's appointment. I named the Committee and made the announcement in the press, without consulting the President. He made no comment upon it at the time. Franklin performed excellent service and fully met my expectations.
It developed later that the Railroad Administration had a ship suitable for overseas service and which it was using in the coal trade, between Norfolk and Boston. The coal situation in New England was very acute for there was scarcely enough fuel on hand to meet the requirements of factories and other domestic users. Secretary McAdoo, as head of the Railroad Administration, was exerting every effort to transport coal by both rail and water. Franklin took the ship in question out of the New England coal trade and sent it to France. In its stead he placed two coastwise vessels which were capable of transporting as much coal as the one he had withdrawn.
At a meeting of the War Cabinet, McAdoo complained to the President about what Franklin had done. When Franklin's name was mentioned the President turned to me and said, "I rather expected that from Franklin." This was the first time he had indicated any displeasure over the appointment of Franklin as Chairman of the Shipping Control Committee. I explained to him that Franklin actually had given more tonnage to the Railroad Administration than he had taken away, and that I would see that he got all the ships he needed though they would be coastwise ships. I said that the one which had been withdrawn was sorely needed for trans-Atlantic service. My explanation satisfied him. Some time afterwards when I had an opportunity to mention to the President the great saving of time in the turn-around of cargo ships to France which had been brought about by Franklin, he said he realized that I had exercised good judgment in naming Franklin and took occasion to highly commend him for the excellent work he had done for his country. Just before the armistice, when the negotiations for the sale of the International Mercantile Marine to the White Star Line were discussed, Franklin wrote me a letter asking if the Shipping Board had any objections to make to the proposed sale. I submitted the matter to the President and his reply was most cordial, approving the sale.
Franklin directed that all our shipping be put into what may be called "liquid" form , so that no governmental department or person had the right to claim any ship as its or his own. Thereafter ships ceased to be identified with the Army, the Navy, the Fuel Administration, or even the Shipping Board. They became international tonnage, in the manner planned by the Allied Maritime Transport Council. The Departments were requested to state how many tons they had to lift within a given period, and the Shipping Control Committee thereupon found the ships to carry them.
Upon this basic idea of a "liquid fleet," the Shipping Control Committee built its success. Manufacturers of essentials in this country were assured of a steadier stream of raw material. It became possible to meet the most pressing demand with ships that happened to be in port. When a ship arrived, it was assigned at once to another necessary voyage whether or not it previously had carried a cargo for the Fuel Administration or any other governmental agency.
The requirements of the various departments were laid upon Franklin's desk, in the order of their priority, and the most urgent received immediate consideration.
The turn-around, which had been as high as thirty-eight days in France and thirty-four days in the United States, fell to nineteen days in France and twenty-three days in the United States. It continued to decline in the United States, to fifteen days in April; and tended to rise. slightly, to twenty days in November. In the meantime, the amount of tonnage handled increased nearly four-fold. This efficient method of operating ships to France saved us the equivalent of hundreds of ships.
Fig. 10. P. A. S. FRANKLIN. CHAIRMAN, SHIPPING CONTROL COMMITTEE, FEBRUARY II TO DECEMBER 31, 1918. CHAIRMAN, ADVISORY COMMITTEE APPROVING THE DESIGN OF THE FABRICATED SHIP, ALSO CHAIRMAN OF THE COMMITTEE TO ADVISE THE UNITED STATES SHIPPING BOARD ON THE STYLE. AND TYPE OF SHIPS TO BE BUILT FOR WAR PURPOSES.
Franklin collected about him a group of men whom he needed, and accepted no refusal to join his staff. It was he who selected Mr. J. R. Gordon to serve in Europe with the Program Committees of the Allied Maritime Transport Council, after Morrow returned. As organization and good management began to tell in the movement of tonnage from our harbors, the fact became more and more apparent that the French landing, ports constituted the neck of the bottle; and that this congestion would have to be relieved for the efficient employment of our ships. The great trouble in France lay in their railroads, which were lacking in engines and cars to move the traffic. This necessitated transportations of railroad equipment to France and constituted one of the big problems to be solved. The equipment was heavy, bulky and very wasteful of ship space. Prior to this time, the Baldwin Locomotive Works, which was building the locomotives we were sending to France, had assembled and boxed them for shipment at its plant. They all were standard size engines. The delay in reassembling them on the other side was very great. This work was done at St. Nazaire, and when the first shipments were made, the average time to get a locomotive in operation, after arrival in France, was thirty-three days. Even this record was steadily falling, owing to the large number of engines being received.
In October, 1917, General W. W. Atterbury, Director-General of Transportation in France, cabled Mr. S. M. Felton, Director-General of Military Railways, in Washington, stating that England was shipping locomotives, already assembled, across the channel to France. However, they were being shipped across a channel only twenty-miles wide, which was an easy task compared with shipping American locomotives of standard size across the Atlantic Ocean. General Atterbury pointed out the advantages afforded by having these English engines ready to be put into service when they arrived in France, stating: "We can see no good reason why locomotives being sent us from America cannot be shipped in as complete condition as those being shipped to France from England. If this can be done, it will very materially reduce the time and labor required for getting these locomotives into service; and it is especially important that, if possible, this be arranged for, as our facilities at St. Nazaire for doing this work are extremely limited at best, and it is going to be a very difficult matter under present conditions to assemble these locomotives and get them out of the way quickly enough to avoid congestion at the port."
Felton set about this difficult task with a thorough knowledge of the requirements, and with such determination that results he accomplished constitute one of the greatest engineering and transportation achievements of the war.
The first difficulty we encountered was in finding a single-deck steamer, with large open holes and at least four hatches of sufficient size to admit locomotives thirty-five feet eight inches long and nine feet wide. We combed the tonnage market of the world for vessels of this type. It was discovered that the Bethlehem Steel Company had just completed the building of a fleet of four ships, which it intended to use in carrying cargos of iron ore from Cuba to Baltimore in order to feed the Bethlehem Steel Works. These vessels were the Feltore, Cubore, Santore and Firmore.
In the meantime, Felton had contemplated an investigation of the available derricks, and selected one which could lift one of the standard locomotives from the railroad tracks and deposit it safely in the hold of the steamer. When it is realized that those engines weighed 150,500 pounds each, it may be readily understood that the job was a difficult one. It was somewhat of an experiment; but the care with which Felton worked out the details made it a successful one from the start. The first engines arrived, on their own wheels, at the Bush Terminal in New York and on April 30, 1918, the loading of the Feltore was begun. Thirty-three locomotives, and their tenders, practically ready for steam, were placed in the hold of the vessel, between great quantities of tightly compressed bailed hay. The steamer made her voyage from New York to St. Nazaire without mishap and discharged her valuable cargo. Later an economy of space was affected so it was possible to load thirty-six locomotives, including their water tanks, in the holds of each of these four vessels. Thus the time required in getting an engine in operation after its arrival at St. Nazaire was reduced from thirty-three days to eight hours. Subsequently, Felton was able to obtain twelve other vessels capable of handling locomotives on their wheels.
When the first engine was swung over the side of the Feltore and gently came to rest on the railroad tracks at St. Nazaire, a French stevedore climbed to the top of the cab and read, in broken but eloquent English, the inscription marked thereon in chalk by an enthusiastic American workman----"Berlin Express. No stop this side of the Rhine."
In the intricate legal difficulties facing Franklin on every. side, he depended upon the advice of Mr. J. Parker Kirlin, General Counsel to the Committee. Kirlin was the Dean of American Admiralty law.
Operation of the Army cargo fleet was in the hands of two principal executives Mr. J. H. Thomas and Mr. Joseph T. Lilly. Operation of the non-military fleet was in charge of Mr. W. J. Love.
Materials for airplanes were in great demand. In April, 1918, when Mr. John D. Ryan was appointed Chairman of the Aircraft Board, (later becoming Assistant Secretary of War) we frequently discussed with him his requirements for mahogany from Africa and South America, as well as the problem of furnishing tonnage later when airplanes would be in production. Knowing Ryan's ability to do things in a big way, I since have felt satisfied that if the war had continued until 1919 he would have made a record in building airplanes that would have demonstrated further America's capacity for quantity production.
One of the highly capable men attached to the Committee was Mr. W. F. Gibbs. In addition to being a naval architect, he is an expert statistician. He worked out an elaborate time table for the fleet. Mr. Harold V. Amberg, a prominent Chicago lawyer, acted as liaison officer between the Shipping Control and Chartering Committees and the United States Railroad Administration, the War Trade Board, the Navy and other departments. He also had much to do with submarine war-zone regulations. He was my immediate legal and administrative adviser---a man of vision and a counsellor of great dependability. While the brunt of the work of the Shipping Control Committee fell upon Franklin, due credit also must be given to H. H. Raymond and Sir Connop Guthrie for the valuable services they rendered as his associates.
The work of the Shipping Control Committee could not have been done without facts---facts about national resources, about what was essential and what nonessential, facts that would show the best method to employ ships. A proposal that we form an economic and marine fact-gathering bureau was made by George Rublee. He proposed that Dean Edwin F. Gay, be authorized to organize a Division of Planning and Statistics. The proposal appealed to me, and I invited Gay to join us.
To this Division, with Mr. Henry S. Dennison as Chief Assistant, we turned when in need of information required to allocate ships. He was our economic mentor. Dennison and his staff made exhaustive studies for the purpose of avoiding cross-hauls and of deciding on the character of cargos that ought to be exported and imported. The size, draft, carrying capacity and speed of each ship were known, as well as her position at sea or in port on any given day. In a word, the Division of Planning and Statistics did for our ships what our auditors did for our money. They kept a strict account of the essentials. It was the clearing house of all information. As such, it kept in touch with the various governmental heads, war boards and other services requiring tonnage; and also furnished facts regarding imports to Stevens and Rublee on the Allied Maritime Transport Council in London. To avoid duplication of effort, Gay was made head of a similar division of the War Industries Board. The Bureaus of Research and of Statistics and Tabulation of the War Trade Board were placed in his charge in June, 1918. Thus the work of restricting unessentials and allocating ships was centred in a single body.
ON APRIL 11 1918, an order was issued prohibiting the hiring of neutral vessels leaving American ports unless they had been chartered by the Shipping Board. This forced the would-be charterer to apply to us, and in turn enabled us to fix charter rates, also to assign the ship to the particular service in which she would do the most good. Profiteers who wanted the United States to bid outrageous prices for the privilege of chartering their vessels were completely foiled. The charters were obtained at inter-allied rates, so that there was no bidding by one ally against another. The contracts were for various terms, from a specified period to a single voyage. The chartered vessels were assigned to different operating companies, by the Division of Operations of the Fleet Corporation.
By September 1, 1918, we had chartered a deadweight tonnage of 1,084,986, represented by 220 steamers of 944,238 deadweight tons and 111 sailing vessels of 140,748 deadweight tons. So many neutral countries were involved in these transactions and time was so precious that we determined to standardize the arrangements that had to be made. A general give-and-take policy was adopted. We agreed to license for export necessary food products and raw materials, and foreign nations agreed to charter tonnage in return. Thus, we obtained by charter 614,000 deadweight tons of steamers and 275,000 tons of sailing vessels from Norway; 100,000 tons deadweight from Sweden; 265,000 tons of steamers from Denmark (88,000 tons for unrestricted trade, 90,000 tons for service outside the war zone, and more than 81,000 tons for Belgian relief, and for exports to Switzerland) ; 533,746 tons from Holland (by seizure); and a certain number of French sailing vessels in return for a proportionate number of American steamers. The sailing vessels, unsuitable for war-zone service, were used in safe waters at home and in the South American nitrate trade. The steamers were employed in overseas traffic.
Our action in practically commandeering foreign ships in our ports could not warrant our appropriation of such ships without considering the susceptibilities and rights of the respective governments affected. For months the Shipping Board had to assume some of the functions of a diplomatic agency. We enlisted our embassies and consular officers abroad in the delicate process of smoothing down ruffled feelings, a procedure which usually resolved itself into considering the vital economic needs of the country affected and of paying a fair charter rate. Of course, we could not act independently. The State Department had to serve as our mouthpiece. Mr. Frank W. Pope, Under-secretary of State, sensed the spirit of the times and cast aside the old mañana methods of diplomacy. I frequently telephoned him for an opinion about some delicate shipping situation with a foreign government and he was so familiar with the situation that usually he gave me an immediate answer.
Japan was keenly interested in our efforts and cooperated with us in every way. "Japan had twenty-three vessels of 151,000 tons deadweight which we were able to charter. She also had, either completed or building, fifteen other vessels of 128,000 tons which we were able to purchase on condition of providing her with one ton of steel for each ton of ships so acquired. This steel had previously been purchased in the United States; but when our necessities arose its exportation to Japan was prohibited by the War Trade Board . Prior to the war, Japan had purchased the bulk of her ship steel in England; when that source was no longer available, she had contracted for steel in the United States, but it was never delivered. By licensing this exportation, we were enabled to acquire the amount of newly constructed tonnage stated. Further than that, we entered into direct contract with the builders of Japan to construct thirty additional steel vessels, aggregating 245,000 tons deadweight, for which we agreed to provide steel in the ratio of one ton of steel for two tons of ships. "(20)
For several years prior to our entrance into the World War, the question of preparedness was widely agitated throughout the country. Many sincere and earnest persons urged an extensive increase in our naval establishment, not a few going so far as to advocate the building of a navy at least equal to that of Great Britain. Others believed in devoting more attention to military training than previously had been given. Nearly all of these well-meaning persons seemingly gave scant consideration to the one absolute essential in preparation for national defense, namely, transportation.
I repeat: Germany never would have begun her ruthless submarine warfare, sinking vessels without trace, if the United States had possessed a substantial merchant marine. As it was, if we had possessed at the time of our declaration of war against Germany an army of 2,000,000 well-trained and well-officered men, all fully equipped and ready to embark for overseas, it would not have been possible for us to have transported them to France. We had no ships. While it is true that we might have embarked a limited number of men in British passenger ships, they would not have been effective as a fighting organization unless we had also the cargo-ships to keep them supplied with food and munitions of war. Such we did not possess. The War Department never would have given its consent to the transportation of any considerable number of soldiers abroad until it received the assurance of the Shipping Board that cargo-ships would be delivered fast enough to keep each unit in France supplied with food and equipped with all requirements as rapidly as the soldiers were embarked.
Transportation by land, sea and air is an absolute necessity in any well-conceived plan of national defense. No army or navy, no matter how efficiently it may be equipped, can be effective unless there are adequate transportation facilities back of the line. It is claimed that Von Kluck lost the first battle of the Marne because he drove the French so hard and so fast before his advancing army that he became too widely separated from his base of supplies. His transportation facilities in the rear were not adequate to keep his soldiers equipped for fighting. In consequence, with the French pressing him, it became necessary to retreat.
Insufficient sea transportation facilities from Great Britain to Salonica before the submarine became a menace was chiefly responsible for the withdrawal of the British fleet and British soldiers from the Dardanelles and the failure of that campaign.
If Japan were to declare war upon the United States we could, without fear as to the ultimate outcome, withdraw every man-o'-war from the Pacific Coast to the Panama Canal, dismantle every gun and give the Japanese free access to every port from Seattle to San Diego for a period of six months. Disregarding vessels of 1000 tons or under, Japan's present fleet of 790 cargo-ships aggregating 2,754,000 tons, and 184 passenger ships of 773,000 tons, could not land and maintain upon our West Coast a force of 100,000 men within that time. Her soldiers would starve except for such food as they would obtain by foraging. The distance from Japan to the West Coast---more than 4500 miles---is too great to permit the Japanese to keep any substantial force supplied with the necessities of war from her home base.
Likewise, in view of the transportation problem, it would be quite impracticable for the United States to wage successful warfare against Japan in Japanese territory---without a substantial merchant fleet. Ships would govern the outcome in either case.
IN OBTAINING Dutch ships we encountered more difficulty with the government of the Netherlands than with that of any other nation. Following the plan we had adopted in dealing with European neutrals, we made a temporary agreement in January, 1918, in accordance with which certain supplies were to be placed at the disposal of the Dutch on condition that we could charter certain of their ships for a period not exceeding ninety days. About 460,000 deadweight tons of Dutch shipping were thus to be contracted for. When about 300,000 tons deadweight had been acquired, Holland found it impossible to carry out the agreement, chiefly because of pressure brought to bear by German interests at the instigation of the Kaiser's government. Such were our military needs that a crisis was precipitated ---a crisis which could be met only by exercising what is known in international law as the "right of angary," by which a belligerent may requisition for military purposes foreign vessels within his territorial jurisdiction. The right could not be exercised by the Shipping Board and so we appealed to the President. On March 20, 1918, acting under authority of the Act of June 15, 1917, and in accordance with the principles of international law, the President issued a proclamation authorizing the Secretary of the Navy to take over all such Dutch vessels in our ports as the government required for military purposes. These vessels were to be manned, equipped and operated by the Navy Department and the Shipping Board. Later, it became our task on the Shipping Board to compensate the respective owners. Under the authority of the President's proclamation, the Navy Department took over eighty-seven Dutch vessels of 533,746 deadweight tons lying in widely scattered ports of the United States, including Porto Rico and the Philippines.
Repairing and fitting out this enormous fleet, providing guns and gun crew quarters, unloading and warehousing the cargos (which could not be delivered at the ports for which they were destined) imposed additional burdens upon the Board and the Navy. When Dutch ships entered the service of the United States those vessels assigned for trans-Atlantic service were manned by the Navy Department and ships assigned for coastwise and South American service were manned by the Shipping Board. As a rule, commandeered ships were turned over by us to private corporations or to the Fleet Corporation, but the Shipping Board operated the Dutch ships in coastwise and South American trade.
Making provision for the Dutch crews was a source of much embarrassment. Nearly 3000 men had to be cared for---Dutch, Dutch Colonials and Chinese. Penniless for the most part, unable to understand English, they were indeed objects of pity. The Navy Department was mercifully authorized to inform the crews that they were the guests of the American people; that they would receive their wages until they were repatriated; and that their travelling expenses home would be paid. Since we had enough to do, the crews were placed in charge of the Bureau of Immigration of the Department of Labor, but the Shipping Board kept the men in funds by advancing them installments on their wages. When 1651 men were rushed to New York to catch the New Amsterdam, without stopping to pack or collect luggage, the Shipping Board defrayed the expense of renewing or paying for lost belongings. By July 3d all but three of the men desiring repatriation had sailed for home; these three. men were ill and of course were maintained at our expense. The payment of the men's wages and of their compensation for loss of employment involved a vast amount of parleying with the Consul General of the Netherlands, and the aid of our consular staff in Rotterdam. We even went so far as to assume insurance liabilities for Dutch crews in accordance with Dutch law.
How closely the President followed the work of the Shipping Board and the Fleet Corporation is proved by the interest he manifested in problems presented by the Dutch ships and their crews. When a statement of the expenses incurred in caring for the Dutch sailors was submitted to him, he sent a letter to me calling my attention to an accountant's error. I mention this fact to show that, although he delegated to the Shipping Board and the Fleet Corporation the vast powers conferred upon him by Congress, he never for a moment relinquished control of those whom he had made his agents. The public in general still regards President Wilson as an intellectual college professor more interested in ideals than in administrative details; but, as his analysis of our accounts of Dutch-crew expenses proved, he was a faithful steward of the American people, who could lay an unerring finger on mistakes made in a governmental department and who had much of the executive ability of a practical kind that we more commonly associate with industrial leaders.
THE early months of the year 1918 will live vividly in my memory. The Allied and Associated Governments were informed of the fact that the Germans were preparing for their spring offensive. On March 21st the great Cambrai drive was launched, sometimes referred to historically as the second battle of the Somme. The attack was begun by heavy bombardment from guns of all calibre along a wide front, extending from a point east of Arras southward to the region of LaFere, a distance of nearly fifty miles.
The Cambrai drive will go down in history as one of the great military engagements of the world. After five hours of heavy shelling, the Germans hurled themselves in mass formation against the British front line trenches. For five days the slaughter continued. The British Fifth Army, commanded by General Sir Hubert Gough, sustained losses upwards of fifty thousand men, and whole divisions were practically wiped out. The Allied losses, which were chiefly British (including killed, wounded and captured), aggregated the staggering total of nearly 200,000 men, while more than a thousand cannon and hundreds of machine guns and other booty fell into the hands of the Germans. It has been estimated that during the five days' carnage, no less than. ninety-seven German divisions were employed, comprising approximately one million, one hundred thousand (1,100,000) men.
At about the same time the German "Big Bertha" began dropping shells in Paris from a hidden position in St. Gobain forest, seventy-two miles away.
The German high command was flushed with the confidence of success. The Kaiser, in commenting upon the battle, was quoted as saying: "The prize of victory must not and will not fail us---no soft peace, but one which corresponds with Germany's interest. We are at the decisive moment of the war, and one of the greatest moments of German history." Field Marshal Von Hindenburg declared: "God willing, we will overcome the enemy in the west and clear the way to a general peace." The Kaiser hastened to the front, accompanied by the Crown Prince, Von Hindenburg, Von Ludendorff and other prominent German officials.
Official reports from General Haig indicated that the position of the British was desperate. He declared that his back was against the wall. Along the entire front from Arras to LaFere the British had been forced to retreat, and at various points the Germans had succeeded in crossing the Somme.
In a cablegram to the American people, which was read by Lord Reading at a dinner of the Lotus Club in New York, Lloyd George, said: "We are at the crisis of the war. Attacked by an immense superiority of German troops, our army has been forced to retire. The retirement has been carried out methodically before the pressure of a steady succession of fresh German reserves which are suffering enormous losses. The situation is being faced with splendid courage and resolution. The dogged pluck of our troops has for the moment checked the ceaseless onrush of the enemy, and the French have now joined in the struggle. But this battle, the greatest and most momentous in the history of the world, is only just beginning. Throughout it the French and British are buoyed with the knowledge that the Great Republic of the West will neglect no effort which can hasten its troops and its ships to Europe. In war, time is vital. It is impossible to exaggerate the importance of getting American reinforcements across the Atlantic in the shortest possible space of time."
It is not easy, even now, to realize the depth of the emotions aroused by Lloyd George's appeal and the condition which it disclosed. The possibilities which were involved not merely encompassed German victory, the defeat of France, England, Italy and even of America, but were fraught with the further danger that we Americans, who had so recently come into the war, might be called upon to bear the brunt of the burden of financial levies with which the Central Powers would seek to reimburse themselves for their costs and losses.
The situation was desperate. The Allies needed additional infantry at once, to fill up the gaps made by inroads of the Germans. There was grave danger that unless our soldiers could be supplied in vastly greater numbers than we had been sending them overseas, the war might result in a German victory before the United States could make its vast resources effective and muster its full strength on the battlefield. The immediate reinforcement of our Army in France was the prime necessity.
Apart from the danger of the submarine, there remained the still greater menaces of possible starvation, and of inadequate munitions-supply for the troops we should send to France. With the enemy passenger ships we had seized, and aid of British liners, we could transport a formidable army to France. But what was to become of that army after it had disembarked? It had to be fed and clothed; it had to be supplied with thousands of tons of shot and shell, railway equipment, timber and countless other accessories of modern warfare. Unless these were forthcoming, it would have been military madness to send troops abroad. Cargo ships, was the one obvious answer---ships, and then more ships! General Peyton C. March, chief of staff, knew this. Like the prudent, far-seeing officer that he was, he refused to take any decisive action until the Shipping Board had committed itself definitely to a program which would clearly indicate the amount of food and supplies we could transport, and when.
How could we guarantee deliveries, in the face of possible labor upheavals, and of congestion in factories and on railways, to which we looked for a steady stream of structural material? But guarantees had to be given, or General March would decline to assume responsibility for the consequences. Thus pressed, we submitted an estimate, which we felt confident we could fulfill. It provided for the transport of supplies sufficient to keep pace with a movement of 125,000 men per month---hardly enough to swing the decision in the critical months of 1918. March was prepared to send over at least 1,000,000 men---the smallest unit that Pershing would consider. His calculations were based on a troop movement of 250,000 men a month. The discrepancy between March's demands and my promises was enormous; both the President and March were dissatisfied.
The seriousness of this situation was impressed upon me by the President when he requested that a special survey be made of cargo-ships that could be furnished General March (Secretary Baker being in France at the time), for the transportation of food and material supplies for the increased number of troops to meet the pressing demands of the Allies.
"Hurley," he said, "with the success of the Germans in driving a wedge between the well-seasoned troops of the British and the French in the Cambrai sector, if by any chance they were to repeat their onslaught with a like result on our front and capture a hundred thousand or more of our soldiers, I dread to contemplate the feeling which would be produced in the minds of the American people. Unless we send over every man possible to support the Allies in their present desperate condition, a situation may develop which would require us to pay for the entire cost of the war to the Central Powers."
He sat gazing intently out of a window towards the green fields across the Potomac; but he did not see the beautiful landscape which lay before him. What he saw was a vision of the bloody battlefields of France! He was thinking intently and earnestly. I did not interrupt his meditation. When he turned toward me again his face was pale and his features were drawn. Calmly but firmly he said, "Hurley, we must go the limit."
With that command resounding in my ears, I promised General March to deliver ships, the keels for which would not be laid for several months. I believe that if the matter had been left to March and me, I would have been reluctant to make promises to deliver tonnage when I knew the possibility for fulfillment was questionable to say the least; but with my Chief commanding me to "go the limit" there was nothing to do but obey orders.
March had reduced the "pounds per man" to be carried across, from fifty to forty; then to thirty; and finally had tried to reassure me with the information (not cruelly, but kindly) that I might count upon a certain proportion of killed and wounded. Thus, I was made to realize that death was a factor in ship-building, on which we were supposed to reckon. Not being a trained soldier, I never could bring myself to think of our work in terms of blood and death. I thrust aside all thought of men dying in France and of thus benefiting by so many tons of steel shapes and so many million rivets! Wilson's "Hurley, we must go the limit" was more to my liking. Urged on by that command, I had a new survey made. March wanted an estimate of the new tonnage we would produce in April, May and June of 1918; and also up to December, 1918, as well as the deadweight of each ship to be delivered and full information about its type.
I called in Piez, who was responsible for ship production. We sweat blood over that second estimate.
We included ships of which the keels had not been laid ---included what we were hoping to build, as well as what we actually could build. It was the kind of estimate which Piez as an engineer, and I as a practical manufacturer, never would have dared to submit to the board of directors of a private corporation. But there was no other way out. The safety of the world hung upon an estimate that largely tabulated mere hopes. Boiled down to its bones, here it is:
STEEL AND WOODEN VESSELS READY FOR SERVICE (1918)
(Contract and Requisitioned)
Total Number of Vessels Total Deadweight Tonnage March 24 197,075 April 30 196,155 May 70 328,626 June 66 400,495 190 1,122,351 (21)
My estimate, in which I had gone the "limit," was submitted in writing to General March in accordance with his request. Even then he would not accept it. First, it had to be passed upon by President Wilson. The President examined it, wrote across it, "Approved, W. W." and sent it to March. Then, and not until then, was March willing to act. And how he did act! Within six months 1,500,000 men arrived in France, and the horde of American soldiers was only beginning to pour in. They were crossing the ocean at the rate of 250,000 a month at one time, quite in accordance with his increased program of sixty divisions. The actual number sent abroad in July 1918 was over 300,000.
If the war had continued for another year we could not have fed and supplied our Soldiers in France. That it did not continue for another year was due to the fact that Woodrow Wilson gave the orders which, at the psychological moment, sent over the soldiers who turned the tide in favor of the Allied cause. It was his leadership which inspired men to undertake the seemingly impossible.
No doubt our procedure would be regarded as reckless in the extreme in time of peace. But what would have happened if I had not followed the President's admonition to "go the limit"? Suppose I had reported the cold truth---that there was no real prospect of supplying cargo carriers for more than 125,000 men a month, the number provided for in our first estimate! Suppose March had asked us to prove that we could build the ships listed in our estimate; or that he had cautiously waited until they were actually ready to steam across the Atlantic? The answer would have been defeat---the most colossal and humiliating defeat in history! As I shall show later, we could not have built cargo-ships fast enough to supply army divisions at the maximum rate that Pershing wanted.
Yet we were not cruelly playing a game of bluff. The ships that we did supply turned the tide. Victory came when American troops brought their pressure to bear; and those troops were entirely dependent on the ships that we were able to place at their disposal. The "will-to-win" triumphed over "it can't be done." Great chances were taken, but we won because we took them; and it was President Wilson who made us take them. Without detracting in the least from the great soldier, General Pershing, and his gallant men in the field, I am convinced that the country never has realized to what extent the war was won at home by President Wilson, Secretary Baker, General March, the Shipping Board and the Fleet Corporation, by taking the most desperate chances conceivable.
We did give General March the one million, one hundred twenty-two thousand, three hundred fifty-one (1,122,351) deadweight tons of ships promised by the end of June, 1918. The actual deliveries amounted to one million, eighty-six thousand, four hundred fifty (1,086,450) deadweight tons, between January 1, and June 30, 1918; between March and June (the period of the estimate submitted to General March) 870,368; and by December, 1918, we had delivered three million, thirty thousand, four hundred and six (3,030,406) tons, represented by 533 ships.
To meet the emergency caused by the food and material requirements for the increased number of troops the War Department was sending over and which it was planning to increase still further, we were forced in September, 1918, to ask the British for one million two hundred thousand (1,200,000) tons of cargo-ships. Although it was a hardship for them to do so, they agreed to give us this amount of tonnage, with the understanding that it was to be reduced from month to month by two hundred thousand (200,000) tons, until February, 1919, when it all was to be returned to them.
The Germans realized, as did Marshal Foch and our General Staff, the military and moral effect of a great American army in France.. In a bulky report published in July, 1925, by a Reichstag committee appointed to determine the causes of the German collapse, unstinted praise is given the American effort. "Transporting and supplying American troops," it reads, "is dependent on ship tonnage." The Germans under-estimated our ship-building and ship-carrying capacity, even bearing in mind that about half of our men were carried across in foreign bottoms. The report continues: "Certainly the extraordinary increase in American troops transported since May (1918) was a surprise. During the first months we over estimated . . . The entrance of such large numbers of American troops was soon felt. The coming of American troops revived France's sunken spirits! According to French assertions, the sight of incoming Americans, mostly young and glowing with strength and health, worked miracles . . . Herein and in the massive reinforcements which the Americans brought at the critical moment, lies the significance of America's intervention. Our hope to bring about a decision through our 1918 offensive, before the Americans could come in with great forces, was unfulfilled. The Americans arrived then in such numbers that the ending of the war unfavorably to us was influenced by it." (22)
Thus our course of taking desperate chances, of building on hopes as well as in shipyards, receives its justification from German authority. In July the Allied commanders believed that the war would continue until 1919, but conditions changed. With 250,000 American soldiers landing in France monthly and Foch absolutely satisfied regarding the fighting qualities of our men, that great soldier decided to make a general attack on the entire front, thereby bringing the war to a successful conclusion in 1918. The Germans did their best to make propaganda-capital out of our success in providing ships. They dropped leaflets from airplanes behind the British lines, and pictured dire results that would follow the reestablishment of the American Merchant Marine. A copy of one of these leaflets came into the hands of Lieut. Samuel H. Adams, U.S.A.M.C., attached to the Second Lancashire Fusiliers, B.E.F. Lieutenant Adams had a sense of the ridiculous and evidently had been following the development of our ship-building program. I never have had the pleasure of meeting this young officer, but I take occasion here to express publicly my appreciation of his kindness and thoughtfulness in sending me this bit of German propaganda. As he predicted in his letter, I found it a source of "amusing interest." The letter follows:
[Fig. 11. facsimile of propaganda leaflet]
whose text follows:
The American Peril.
Have you read the Liverpool Journal of Commerce of July 20th? Well, this paper publishes a leader under the alarming heading: "our desperate position", the following extract of which will interest you: "Commercially our position is desperate. There is no doubt about it. It is perfectly plain that, unless something unexpected happens, we shall sink into the position of a second-rate Power. The blame for it is on the present and past governments, who have ignored, and are still flouting, the commercial community and its interests. Government officials, when the matter is put before them, will nearly always end up by saying something of this nature: "Well, after all, our first business is to win the war, is it not?" It is the business of the War Office and the Admiralty to bring the war to a satisfactory conclusion as soon as possible, but it is not legitimately within their province to hamper commerce, with results they do not foresee, but which are ruining our chances of retaining our overseas trade. The Americans are after it. Read the report of the speech of Mr. Hurley in the issue of July 15th. He does not veil his proposals. America is building her vast mercantile marine---first, to transport troops and materials for the war, and then to attack our trade in China, the East, our Colonies, Russia, and South America, and doubtless other places. Her new lines of steamers are already running to ports where the trade was fostered by us and is by every right ours. All this is brought about by the supineness and crass stupidity of our ministers and their nominees, to whom we pay princely salaries, and who are giving us away. Does Mr. Lloyd George see that we are going to the wall? It is doubtful. What is the use of winning the war at the expense of our commerce, and so that the Americans collar it? Are we to be content with an 'entrepot' trade, our manufactures killed by America; and shall our living be 'taking in each other's washing?' for that is all we shall have left unless there is an alteration immediately. It will be surprising if our people stand it much longer."
So far the Journal of Commerce. It hits the mark. Isn't it foolish to stay in this war for the sole benefit of the United States? It is plain that America won't be satisfied with Germany's downfall but actually aims at controlling the world's commerce. She points at Germany but is ready to incidentally ruin England too, in fact, she prepares to suck the marrow out of the whole of Europe. World-domination, that's what America is after! An exhausted and empoverished Europe will make the United States the ruler of the world. At any rate, after the war, America will be the most powerful and pitiless competitor England ever had.
Therefore, come to an understanding with Germany before it is too late. Only the United States have something to gain by continuing the war.
This was one of the interesting and striking evidences which came to us that the Germans were being kept well advised of our progress in ship-building.
Propaganda of this character showed the alarm they must have felt when the knowledge was brought home to them that America was providing the cargo-ships necessary to maintain a vast army of soldiers in France, for an indefinite period. They, too, realized that ships would win the war-American ships-and that the rapidity with which they were being built spelled disaster to the German cause. Hence, their effort to arouse a feeling among the British that America's ship-building progress would mean the end of British supremacy upon the seas and that the best way to avert this was to "come to an understanding with Germany."
It must not be assumed that the Board had to consider merely how we were to provide the 1,122,351 deadweight tons of ships we had promised to deliver by June, 1918, and those which were to be ready by December, 1918. By the autumn of 1917, the Army had received from us 688,714 deadweight tons of commandeered ships. In addition, 162,200 deadweight tons of ex-German ships were being repaired. The Navy wanted 180,000 deadweight tons of tankers and 426,000 tons of supply ships, a total of 606,000 deadweight tons. Moreover, we had to import essential raw materials for our manufacturers---chrome ore, nitrates, pyrites, sugar, wool, hemp, coffee, and the like, all calling for 1,750,000 deadweight tons. France, Italy, Belgium and Russia also were clamoring for ships---300 of them aggregating 1,900,000 deadweight tons---to carry materials they needed to maintain both their fighting forces and their civilian populations. On March 13, 1918, the Allied Transport Council found that there would be a deficit in the supply program of the three European Allies amounting to some 10,000,000 tons of imports or 2,000,000 deadweight tons of shipping, excluding any additional neutral or American tonnage; and had reached the conclusion "that no reduction can be made without results which will be disastrous to the prosecution of the war."
Our ship-building program was based upon the Army's requirements, but what these were at any given time it was impossible even for the best-informed military authority to determine. As fast as we framed programs we tore them up because of new demands from the front. I found it extremely difficult to obtain trustworthy estimates; yet, without them we could not know what was expected of us. The Army gave us all the aid it could, but the situation on the European fighting fronts constantly was changing. The call for men and supplies of to-day often was cancelled tomorrow and another estimate substituted for it.(23)
By the end of June, 1918, we had nearly fulfilled our first promise to the War Department. Excellent as this performance was, we never were able thereafter to keep up with the constantly enlarging army demands. On July 11, 1918, General March ordered the Chief of Army Transportation Service to make a careful survey of tonnage then available and under construction, as it affected American military operations abroad from July 1, 1918, to July 31, 1919. Three programs were considered:
(a) A sixty-division program, giving a total strength of the American Expeditionary Force by July 31, 1919, of 2,500,000.
(b) An eighty-division program, giving a total strength of the American Expeditionary Force by July 31,1919, of 3,355,000.
(c) A one hundred-division program, giving a total strength of the American Expeditionary Force by July 31, 1919, of 4,260,000.
Somewhat more than 2,000,000 men were in France when the armistice was signed in November, 1918.(24) The maintenance of an army of two and one-half million men, on the basis of thirty pounds per man per day, with a turn-around of cargo-ships of seventy-five days, would have required about 5,000,000 deadweight tons of shipping. I believe we could have provided this deadweight tonnage. As a matter of fact, after the signing of the armistice when all overtime work was stopped, men were laid off and contracts cancelled, our total delivery by April, 1919, of contract-steel, Japanese-built and wooden ships was in excess of 4,500,000 deadweight tons. Our record therefore proved that the Shipping Board would have built cargo-carriers enough to have complied with the demands of the sixty-division program.
But what of the eighty-division program? Hog Island, with fifty ways for 7500-ton vessels; Submarine Boat Corporation, at Newark Bay, with twenty-eight ways for 5000-ton ships; The Bristol yard, with twelve ways for 9000-ton ships; the Federal Yards, with twelve ways for 9600-ton cargo-carriers, and the Southwestern Shipbuilding Company, with six ways for 8800-ton ships, all would have been producing at full capacity in 1919. When the armistice came all these yards had keels on their ways; and their organizations were complete and acquiring skill. The older yards likewise were increasing their outputs. Would the Fleet Corporation have been able to provide ships enough by July 31, 1919, to maintain the 3,355,000 men of the eighty-division program and the 4,260,000 men of the one-hundred-division program? In all probability we could have counted on 500,000 deadweight tons per month during the last half of 1919. We probably would have failed to meet the War Department's eighty division program during the first half of 1919, but I believe that after June of that year we could have delivered enough ships to meet its requirements. The carrying out of the eighty-division program was within the bounds of possibility, although not on schedule time. The one-hundred-division program would have swamped us hopelessly! We never could have caught up with the arrears of 1918 and 1919.
The following table, from the Report of the Chief of Transportation Service of the Army (1919) compares the three programs and shows that we always were in arrears so far as cargo tonnage was concerned:
Month Additional cargo capacity required
1918 A B C July 1,202,000 1,202,000 1,202,000 August 1,091,755 1,217,755 1,343,000 September 996,384 1,185,384 1,437,384 October 849,984 1,117,734 1,511,484 November 613,449 859,949 1,511,199 December 313,899 731,274 1,510,899 1919 January 8,766 497,016 1,363,265 February ............. 209,641 1,162,516 March ............. ............. 1,103,516 April ............. ............. 1,044,516 May ............. ............. 885,516 June ............. ............. 726,516 July ............. ............. 567,516
The Army adopted the eighty-division program. Although General Hines, in his report as Chief of Transportation (1919), expressed his confidence in our ability to carry through our cargo-ship program and therefore reinforce my own conclusion on that score, the following table which he prepared shows how far cargo shipments lagged behind requirements:
Month Cargo required for the eighty division program Cargo actually called for by A. E. F. Cargo actually shipped 1918 Short tons Short tons Short tons July 772,000 430,746 535,618 August 844,000 750,527 572,037 September 916,000 887,968 683,943 October 1,001,500 1,021,000 745,299 November 1,082,500 1,131,000 823,382
It is apparent, from all the facts, that there was always a cargo-tonnage deficit after July, 1918, a deficit largely accounted for by General Pershing's requirement of 250,000 tons a month of construction material.(25) The startling conclusion must be drawn that the longer the war lasted and the more the one-hundred-division program (C) became necessary, the more impossible it would have been to supply cargo tonnage to feed our constantly increasing army abroad and to supply it with the munitions of war. If the one-hundred-division program had been carried out a cargo deficit of approximately a million and a half deadweight tons would have been faced from August, 1918, to January, 1919. "At no time before July 31, 1919, was the American tonnage sufficient to meet all needs."(26) So disturbing was the thought that the war might be lost for lack of cargo-ships, that the Army began to cast about for sources of additional tonnage. About 2,600,000 deadweight tons were engaged in the nitrate, manganese, chrome, sulphur, New England coal and other trades, all considered essential. It was suggested that we withdraw some of the ships engaged in these trades and thus increase the cargo-fleet plying between France and America; but most of such ships were not suitable for trans-Atlantic war service.
Then, too, there was the difficulty of speedily unloading ships at French ports. To have met even the minimum program satisfactorily by January 1, 1919, it would have been necessary to discharge cargos at twice the highest daily average attained at any time in 1918; and for the maximum program the rate of discharge should have been 2.7 times the highest daily average made in 1918. It was not wholly a question of better equipment and better organization, more rolling stock and larger warehouses (much as all these would have helped) but of shallow channels, cramped approaches to berths and narrow pier space, of limitations that could not easily be overcome. In carrying out the one-hundred-division military program, idle ships would have accumulated at the rate of tens of thousands of tons a month. The flow of material to France would have been checked and our industries would have been thrown out of gear.
The signing of the armistice on November 11, 1918, left the great cargo program of the Fleet Corporation uncompleted. The eighty-division program contemplated increased monthly shipments, by July, 1919, to 1,759,750 short tons of cargo. Actually, 823,000 tons were reached in November, 1918, "with the real test of the supply bureaus and the French ports ahead."(27)
In view of the deficit in cargo-carriers with which the Army constantly was confronted during the latter half of 1918, of the difficulty of improving French ports so that ships could be unloaded speedily, and of the enormity of the task imposed upon our supply bureaus, we would not have been able to carry out the one-hundred-division program by July 31, 1919. There never were enough ships for any of the specified programs while the war lasted, although at the end we had somewhat more than 2,000,000 men in France. That the war was brought to a successful conclusion in nineteen months after America entered it, shows that it paid to take the desperate chances that the President, the War Department and the Shipping Board had taken. Never for a moment did General March slow up the troop movement once begun. By enabling General Pershing to throw enough Americans into the battle line at a crucial period, President Wilson, Secretary Baker and General March rendered a signal service in bringing the war to a speedy close. Upon the Shipping Board and the Fleet Corporation the War Department threw the responsibility of keeping production of cargo-ships apace with its troop movement. We accepted that responsibility, and by doing so we also took chances. The war was won, despite the fact that we could not build ships fast enough to feed eighty or one hundred divisions. It was won because we cherished the high hope that we could build them; won because we were willing to try to build them, rather than to throw up our hands in despair. We had to make the effort or go down in history branded as something worse than human failures---as cowards, afraid to take a chance in time of war..
AT THE end of the first year of America's participation in the war, the undertakings of the Shipping Board and the Fleet Corporation had grown to such proportions and required such further extensions and expansion of effort that if we were to approximate the demands made upon us and fulfill in a measure the promises I had made to the President, I felt justified in reaching out and "commandeering" the services of the foremost executives available. In my opinion there was no business man in the country too big, or one whose personal interests were too great, to be drafted for the emergency.
The first man to whom my mind turned in this connection was Mr. Henry Ford. I desired to surround myself with industrial leaders capable of appreciating the gravity and the magnitude of the task confronting us, and I knew that Ford was very anxious to serve. He was at that time, as I subsequently learned, working in seclusion on the Liberty Motor. I did not know where to find him, so I wrote a letter to Mr. Thomas A. Edison, believing that I would reach him through his fellow inventor. Edison's reply was characteristic:
It developed that Ford was deeply engrossed in building Eagle submarine chasers and Liberty Motors, a work that he wisely considered to be just as essential as laying down new shipyards and keels.
At the suggestion of Colby, I next considered Mr. Charles M. Schwab, almost equally known to the country as an executive and organizer. The thought that I should be in the shipyards so haunted me that I decided to make an effort to enlist Schwab for executive shipyard service. I sent him a telegram, saying that there was an important matter I wished to discuss with him, and asking if he could arrange to come to Washington for an interview. That. was on a Thursday. He promptly replied that he would be in my office on the following Sunday morning.
Three besides Schwab and me were present at that conference. They were Bainbridge Colby, Charles Piez and Thomas F. Logan. I explained to Schwab, almost at the very moment when he came into, the room, that we had drafted him for the duration of the war. He had walked eight flights of stairs to get there, as the elevator was out of commission on Sunday morning. He threw up his hands, urging that he was already in the trenches at the Bethlehem Steel plant, engaged in directing war work that he could not possibly leave to others; and, as he thought, clinched his argument with the remark that the President would not view his accession to the Shipping Board forces with sympathy because of a contribution of $100,000 reported to have been made by him to the Hughes campaign fund. I knew the President was too liberal-minded to permit a political contribution: to influence him, and so told Schwab. "We are at war now," I said. "We are not playing politics. We need you. I will not take 'no' for an answer."
Colby and Logan reinforced my statement with arguments of their own.
I fully conceded the relative importance of various branches of war activity; but pointed out that, while several agencies were working under the slogans, "food will win the war," "coal will win the war," etc., there was little prospect of stopping the Germans unless America was able to furnish cargo-ships to transport food for an army of millions of men. Finally, Schwab said that his own opinions made very little difference to him; that he believed it was not for any man to say what his war work should be, but that the Government itself should dictate. "I have told you the work that I am doing now," he said, "and if you feel that I can do more for the country with the Shipping Board, I guess I will have to come." He asked for forty-eight hours time, in which to talk it over with his associates.
I conferred with a number of my friends, some of whom were members of the Cabinet. Having less faith than I cherished in President Wilson's liberality towards political opponents, some expressed their misgivings and doubted he would welcome the proposal of enlisting Schwab as a ship-builder. Others of those whom I consulted even thought that the whole Shipping Board would revolve around Schwab, and that I would then be relegated to a subordinate position---a consideration which weighed nothing with me. I made an appointment to consult the President on the following Monday evening and asked Colby to accompany me. I informed the President of our need. We had a complete organization; but we had to strengthen it, to convince the people that we were doing all in our power to build ships. Schwab must be drafted, and the people unquestionably would endorse his appointment. The President listened attentively. As I had foreseen, he did not hesitate long. "Hurley," he said, "I have a cousin who lives in Pennsylvania and who comes to see me occasionally. He rarely misses an opportunity to mention Mr. Schwab. In fact, he calls him 'Charlie.' Except for the usual prejudices I guess we all have against men who are recommended by our relatives, I have absolutely nothing against Mr. Schwab. Go ahead and appoint him." Not a word about Schwab's one hundred thousand dollar campaign contribution to the Republican party, nor about Schwab's political beliefs. I asked the President for permission to bring Schwab to the White House after the Cabinet Meeting on the following day. "Bring him along. I shall be glad to see him,' was the answer.
Schwab arrived Tuesday morning and agreed to accept any appointment that we might give him. After luncheon, Colby and I took him to the White House. The President greeted Schwab cordially and observed that he would fit well into our organization, but did not discuss even what Schwab was to do for us.
Like a good soldier, Schwab asked no questions as to what was expected of him. He came with us on April 16, 1918, with the title of "Director-General of the Emergency Fleet Corporation." The announcement that Schwab was to join the Shipping Board organization was prepared in his presence and was approved by him at once. It was given out by Tumulty as coming from the White House, to give more force to Schwab's appointment. I felt that it would have a stimulating effect not only on the American people but on our Allies as well---and a disheartening effect on the Germans who were stoutly asserting that we never could build ships fast enough to win the war.
Schwab went to Hog Island on a Sunday shortly after his appointment and delivered an address before some 10,000 workmen. He made a wonderful speech, arousing the enthusiasm of the crowd to the highest pitch. In conclusion, he insisted that I say a few words. I did, and I think my talk had a soothing effect in allaying any possible feeling of jealousy that might have been encouraged by our respective friends. I said, in part:
I think you will agree with me that no mistake was made when Mr. Schwab came to the Emergency Fleet Corporation, as Director-General. You may recall that President Lincoln said at one time referring to one of his Generals, that if he could help to win the war he was willing to hold his horse.
If Charles M. Schwab can build these ships---as I know he can---and I can help him by it, I am willing to hold Schwab's horse.
It was quite unnecessary to proceed in the formal way I did, in appointing a desirable man like Schwab to our organization. I had full authority, as Chairman of the Board and President of the Fleet Corporation, to make any appointment that I deemed necessary in public interest. My colleagues always approved my appointments. I appointed Piez as Vice-president and General Manager of the Fleet Corporation and P. A. S. Franklin as Chairman of the Ship Control Committee without obtaining the President's permission. The case of Schwab was different. It had been reported that he was one of the chief financial supporters of Mr. Hughes in the presidential campaign; and I wished to silence the suspicion that the President harbored any resentment against him on that account . Further more, I wanted to dramatize the appointment by having it openly endorsed by the President.
Fig. 12. CHARLES M. SCHWAB. DIRECTOR-GENERAL OF THE EMERGENCY FLEET CORPORATION-APRIL 16 TO DECEMBER 3, 1918.
Schwab stayed with the Fleet Corporation about seven months, and the fine spirit that he put into his work during that period was a source of inspiration to the whole organization. Recognized throughout the country as a leader of men, he showed clearly that his right to leadership was based upon a gift for teamwork. I frequently would ask Schwab not to refer to me as his "boss," as he persisted in doing continually in his talks to employees and to the workers in the shipyards. No man I ever have known required less bossing than Schwab. One of the pleasures that I have found in writing this book is in paying to Schwab the tribute he deserves for his unselfish service to the Nation in the time of its need. To summarize Schwab's patriotic contribution toward helping to win the war, I hardly can do better than to quote his own words addressed to the Select Committee on Shipping Board Matters, of the House of Representatives:
I did not regard the ship-building policy at that time as one of engineering, in the sense that machinery and works were more the essential features. I regarded as the essential feature in producing ships the enthusing of the working people of the United States, on whom results depended---making them realize the importance of what they were doing in conjunction with the men in the trenches, and heightening their efficiency. This I called human engineering, and I proceeded with the policy of practicing that kind of engineering.(29)
Schwab thus indicated that he was in full accord with our ship-building policy and program, and that his chief contribution was that of firing the imagination of shipyard workers.
I was very anxious to have a nationally known man as Vice-president of the Fleet Corporation, to handle the fiscal matters of both the Fleet Corporation and the Shipping Board, one accustomed to, dealing in large financial transactions and who could visualize our "three billion dollar" problem. After a careful survey, I decided that Mr. Nicholas J. Brady of New York, a leading national figure in the public utility field, would be an ideal man. I discussed the subject with the President and McAdoo. They were most favorable.
Accordingly I wired Mr. Brady requesting that he accept the post. Unfortunately, circumstances which he could not well control obliged him to decline the offer. However, we were successful in obtaining the services of Mr. George T. Smith, and he became treasurer of the Fleet Corporation. The disbursements of the Shipping Board and the Fleet Corporation frequently exceeded twenty million dollars per week. Smith was ably assisted in his work of handling our finances by Mr. Richard Wilmer Bolling, in the capacity of assistant treasurer. Bolling brought to the organization not only a comprehensive knowledge of methods necessary to be employed in systematizing so large an undertaking, but also a spirit of enthusiasm and willingness to perform all the duties that devolved upon him. Bolling also acted as disbursing officer for the Shipping Division of the Peace Commission in Paris. Associated with Smith, as comptroller, was John J. Nevin, an experienced accountant and attorney, who rendered valuable service.
During the twelve months since the organization of the Shipping Board and the Fleet Corporation, their combined operations had developed to such a magnitude that the executive offices of the two bodies were housed in no less than twenty-three widely scattered buildings in Washington. Owing to increasing demands of the Government for office facilities, which the capital city could not adequately provide, it had become impossible to centre all of our work under one roof. Indeed, it was practically impossible to extend our office facilities in any particular. In competition with other governmental departments and bureaus, we had well-nigh exhausted all of the available office space in Washington. Still, it was apparent that our needs would continue to increase. Here was a new problem.
In solving it, we decided to move the Fleet Corporation to Philadelphia, where we could establish at least a major part of its more important divisions in a large, modern and centrally-located office building. Director-General Schwab and Vice-president Piez recommended the proposal.
The point was made that it would be the part of wisdom to bring the directing and guiding hand of the construction program in close touch with the actual work of building ships. Nearly 50 per cent. of the entire construction work was being carried on within a radius of less than 100 miles from Philadelphia. For this reason it was expedient to establish there the principal offices of the Fleet Corporation's director. Piez also believed that the removal would make possible a more speedy solution of all practical problems as they might arise, because it would enable high executives to visit more frequently the large shipyards and keep in closer personal touch with the progress of the work. Moreover, greater facilities for housing employees were afforded in Philadelphia than in Washington. In the latter city, conditions had about reached the limit of possibility; and while Philadelphia was crowded, more space was available there for absorbing a few thousand additional government employees than in Washington. At that time the number of persons engaged in executive and clerical capacities for the Fleet Corporation approximated 2400. Many advantages favored the decision to establish the main office in Philadelphia. The removal of the Corporation and the transfer of its employees, without serious or prolonged interference with the work, was in itself a remarkable demonstration of efficiency. It entailed the transportation of not only the personnel and office equipment, but also a vast quantity of household furniture for accommodation of the employees. The bulk of this material was transported by trucks supplied by the Quartermaster Is Department. More than 200 loads were carried in less than two weeks.
When it had become apparent that with the expansion of the war building program the Fleet Corporation would have to assume direct control of the yards, an organization had to be created which was quite different from the one we originally contemplated. It had to function as designer of plants, as naval architect and engineer, purveyor of material, ameliorator of strikes, as banker and general manager. Many yards had become converters (into ships) of the material supplied. This change in the functions of the Corporation threw a tremendous load on the central management, and called for a scheme of decentralization.
It was decided to divide the duties into those, pertaining to ship and plant construction and those pertaining to finance and administration. Mr. Howard Coonley was elected Vice-president of the Fleet Corporation and on May 1, 1918, took charge of finance and administration. Coonley was a most efficient executive. He sensed well his special duties and performed them with marked ability. Technical details of ship construction and the direction of the work were put in the hands of Commander J. L. Ackerson, U.S.N. On August 10, 1918, Ackerson was elected Vice-president, and appointed Assistant General Manager of the Fleet Corporation. Because of his resourcefulness and energy as well as his broad experience in naval construction, he was of great value to us. The control of all the various functions in each district was placed in the hands of a district manager. As the representative of Vice-president Piez, he exercised locally in the respective districts the same authority that Piez wielded more generally. The number of the districts was reduced from eleven to eight. Decentralization aided materially in the expedition and dispatch of affairs, particularly as the lines of direct communication were preserved between the sub-heads of the district and corresponding division heads at the Home-office. The success of this scheme was due to the competency of the men comprising district personnel. Among them was William Pigott, a steel manufacturer of Seattle, who ably represented the Fleet Corporation on the Pacific Coast.
During the first few weeks after his appointment as Director-General of the Fleet Corporation, Schwab visited most of the important shipyards on the Atlantic Coast, for the purpose of getting first-hand information regarding conditions and requirements, as well as to give encouragement not only to plant owners but to thousands of employees in the yards. His personality was most inspiring and was capable of arousing enthusiasm among the workers and inducing them to speed-up production.
Shortly after the armistice, Sir Thomas L. Devitt, Chairman of the Board of Lloyds, tendered to me a luncheon in London, to meet the leaders in British shipping. Those present, about fifty in all, included: Sir Joseph Maclay, the British Minister of Shipping, whose post corresponded with mine; Lord Pirrie, who held a position similar to that held by Schwab; Lord Inchcape, Sir Frederick W. Lewis, Lord Furness, Sir Alfred Booth, Sir John Ellerman, Lord Inberclyde and Mr. J. R. Gordon, a prominent American shipping man. I felt pleased and honored to come in contact with so distinguished a group of men. They were much interested in what our shipping policy would be, and in what disposal we later would make of tonnage built during the war. They were especially concerned to know whether or not this tonnage was to remain government-owned and operated; and also what my attitude was toward government ownership and private ownership. After the luncheon, Sir Thomas spoke of me in a most complimentary manner, giving me more credit for what had been done in providing ships than I deemed was my just due. In my reply, I stated that in talking to Sir Joseph, during the luncheon, we had agreed that if any persons were entitled to credit for what had been accomplished such credit should be accorded to our associates. This was my disposition in the matter, and while I had not actually discussed the subject with him, I had taken it for granted that he felt the same as I did.
Fig. 13. SIR JOSEPH (NOW LORD) MACLAY, SHIPPING CONTROLLER OF GREAT BRITAIN DURING THE WAR. A DISTINGUISHED BRITISHER WHO HEARTILY CO-OPERATED WITH US.
Lord Pirrie was the next speaker. Somewhat to my embarrassment, he said that the part of my address wherein I had said that Sir Joseph and I had agreed that our associates were responsible for what had been accomplished was a bit surprising to him. He was very glad, however, to hear it from Sir Joseph, even at that late date. Subsequently I learned that Lord Pirrie, who did excellent work but who evidently was very sensitive, entertained some feeling toward Sir Joseph's policy not to bestow praise on his associates until they had accomplished what he expected of them. I then resolved that in the future I would express my own sentiments and convictions only, and not attempt to voice the opinions of others. The incident demonstrated to me, however, that the British are quite as human as we are in respect of personal sensitiveness.