SOS FOR THE MERCHANT MARINE

Can a nation call itself a superpower if it does not have a merchant marine? The United States seems bent on answering this question the hard way.

The inventory of U.S.-flag ships is rapidly decreasing, the supply of

qualified U.S. mariners is aging and diminishing and U.S. shipyards are fighting just to stay open.At the same time, actions of the U.S. government have virtually ended traditional direct subsidy programs for the U.S. maritime industry and have threatened the continued viability and integrity of the cargo preference, a policy that has been the firm foundation of the U.S. Merchant Marine for nearly two hundred years.

The ultimate question of national interest will not be resolved if the present course is followed. Instead, we should today be addressing the following issues: do we need a merchant marine; if we do, can that need be quantified in terms of capacity and employment levels; and if we can set precise goals, how can those goals best be met? These issues can be resolved quickly. They must be resolved quickly or it will be too late.

The principle of a cargo preference for U.S.-flag vessels is almost as old as this country. The Tariff Act of 1789, the second statute enacted by the new Congress, provided for an additional duty of 10 percent on products carried on vessels "not of the United States."

The U.S.-flag dominated the foreign trade routes in and out of the United States for the next half century, and a strong U.S. maritime industry was created. The preference ended with the Walker Tariff Act of 1846, and the industry began a slow decline.

By the outbreak of the Spanish-American War in 1898, the decline of the U.S. Merchant Marine had reached its nadir. Only 69 U.S.-flag commercial vessels could be assembled into a support fleet, and the U.S. government was forced to purchase 51 foreign vessels, many in disrepair and all suffering

from a lack of skilled crew. In the same time frame, the United States saw: Japan fight a war with Russia and support that effort with the relatively new Japanese merchant marine; and Great Britain fight the Boer War from 8,000 miles away and with reliance entirely on its own merchant marine. Ironically, Great Britain procured a substantial part of its requirements in the United States, yet those supplies moved exclusively on British ships.

The final straw came in 1903 when a British shipping company was awarded the contract to carry all of the military cargo between the United States and the Philippines. The military had been subject to a low bid requirement for approximately 60 years but the award of the Philippines contract - which constituted the vast majority of military shipments to and from the United States - to a foreign flag brought attention to the fact that the very existence of the U.S. Merchant Marine was threatened.

In the early part of 1904, the Congress considered a bill that would require all U.S. military supplies to be transported on U.S.-flag vessels. The House Report left no doubt as to the purpose of that bill:

The effect of reserving the transportation of U.S. naval and military stores by U.S. ships would be far-reaching and beneficial to the nation itself and the interests of general commerce, of the national merchant marine and of the shipbuilding and wage working classes of this country.

This cannot be assured unless some such measure as this can be enacted to help the struggling merchant steamship lines in their competition, on the one side, with cheaply built and operated tramp vessels, and, on the other side, with the heavily subsidized French, German, British and Japanese lines.

This would assure part cargoes at least to keep the ships moving across the ocean. The employment of U.S. ships instead of foreign ships would greatly aid our vessels now out of employment, continue officers, engineers, and seamen on the ocean instead of employing an equal number of foreigners.

That really said it all, and when the Cargo Preference Act of 1904 was enacted on April 28 of that year, the unequivocal purpose was to foster the growth of the U.S. Merchant Marine even if it resulted in greater transportation costs to the government. This purpose has since been reaffirmed in numerous judicial decisions.

A U.S.-flag preference over all U.S. government cargoes appeared in the Merchant Marine Acts of 1920, 1928 and 1936, but it was quantified beyond the requirement that it be "substantial."

Following World War II, a number of foreign aid programs specifically required that at least 50 percent of the cargo be shipped on U.S.-flag vessels. These were subsumed into the Cargo Preference Act of 1954 which extended the 50 percent U.S.-flag preference to all U.S. government cargo.

With the 1904 and 1954 acts in place, there was every reason to believe that the viability of the U.S. Merchant Marine was assured. Instead, the last three decades have seen a decline in the U.S. maritime industry similar to that occurring in the second half of the 19th century.

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