another struggle for existence. That period culminated in the Merchant Marine Act of 1936, which had a dual purpose, namely, to rebuild the merchant marine and revitalize its indispensable corollary, the shipbuilding and ship-repairing industry. The long-range construction program that was instituted pursuant to the act did just that. It was a miracle of timing, even though fortuitous and not premeditated or planned, that this expansion in shipbuilding came when it did, because it enabled the existing shipyards to get under way, to improve their facilities, to expand their organizations, and to distribute shipbuilding know-how. All this proved invaluable when, in anticipation of our entry into the war, and later, after our actual involvement in hostilities, the war shipbuilding program got really under way. That preliminary expansion made it possible to construct all the emergency yards and to man each of them at least with a small nucleus of trained men so that they, too, could then continue the expansion necessary to carry out their respective programs.

Had it not been for this preliminary opportunity to expand, the war shipbuilding program would have taken much longer, progress would have been slower, and there is a reasonable doubt that completed ships could have been delivered fast enough to overcome submarine losses and provide the necessary tonnage to meet the requirements of military logistics. There is even doubt that we could have won the war, because there was a time when the issue was in grave doubt, due to lack of adequate overseas transportation facilities.

If war should come again, which all of us trust will never happen, but which we cannot guarantee will not happen, will we be caught again unprepared as to adequate overseas transportation facilities, despite the lessons of two previous world wars? Our best efforts now are directed toward building up such a formidable military force, in the air, on land, and on the sea, with all the equipment such a force entails, and with a worldwide distribution of bases, ashore and afloat, so that we will be in a position to effectively contain any enemy aggressive effort, and thus make such an aggressive effort not worth the risk.

In the world of today, unfortunately, the possession of overwhelming force affords the only assurance of peace. And until the hearts of the men in the Kremlin sincerely desire peace for peace's sake rather than for temporary expediency, there can be no assurance of peace. Will we be foolhardy enough to overlook the indispensable fourth element of military power, namely, the overseas transportation necessary to supply those farflung bases and support our forces abroad should war come?

If we do, we will be naive indeed, and make ourselves extremely vulnerable. That fact will be recognized throughout the world. We cannot keep it to ourselves. In other words, we cannot bluff our way to worldwide peace.

Unless we undertake forthwith a sound ship-construction program, designed to promote our foreign trade to the utmost, and assure the national security, the shipbuilding and ship-repairing industry, the supplier of capital goods and services to the shipping industry, will gradually fade out of the picture and sink into a condition of innocuous desuetude. If the occasion should arise to resurrect it, that operation will be extremely difficult, expensive, and, worst of all, time consuming, when time is of the essence.

480

MERCHANT MARINE STUDIES

The present condition of the shipbuilding and ship-repairing industry is a matter of grave concern to those in the industry, and should be of equal concern to the Congress and the people of this country at large. The difficulty is to make others, not familiar with the facts realize that they have any stake in such an industry or that it is of any interest to them, individually or collectively. They fail to see the chain which links together the various industries upon which our foreign trade, our national economy, and our national security must depend.

A chain is only as strong as its weakest link. If that weakest link fails, the chain is gone. If the shipbuilding and ship-repairing industry fails, or becomes nothing but a ghost of what it should be. the merchant marine, as such, that is, the shipping industry, cannot function, our foreign trade, instead of expanding, will contract, our national economy will be adversely affected, and our national security placed in the most serious jeopardy. Now, let us trace the reaction in the other direction. Whichever way you trace it, it is still a chain reaction. With the shipbuilding and ship-repairing industry on its way out, or at best, struggling for a precarious existence, the unique skills essential to and characteristic of ship building and repairing are dispersed and lost, the heavy capital investment in the facilities required to efficiently and economically prosecute such work becomes nonproductive, physically the facilities deteriorate as they cannot be properly maintained, much less improved and kept up to date, organizations of skilled technicians and administrators built up over the years fall apart and, if any remain, they remain only skeleton form. and that invaluable and indispensable asset, known for a lack of a better name as know-how, vanishes.

But that is not all. The reaction reaches far beyond the shipyard. The loss of employment in the shipyards is bad enough, affecting as it does our national economy, our national income-unemployed men do not pay taxes, neither do bankrupt corporations. A shipyard is, in some respects, a tremendous assembly plant in which the products of mill and factory throughout the United States are incorporated into what eventually becomes a ship.

Each one of the orders normally placed by a shipyard goes to a plant somewhere in the United States. The loss of them affects each of those plants, reduces their employment requirements, and their capacity to make a profit, with a similar effect upon the national economy and the national income. Each of those plants, in turn, has its own suppliers of materials or equipment, either raw or manufactured. They, in turn, have their own sources of supply, and so on, until ultimately the basic sources of supply of raw materials, the farm, the mine, the forest, and others, are inevitably affected.

It cannot help but be evident that the accumulated effect of the demise of the shipbuilding and ship-repairing industry on our national economy would be most serious, entirely apart from its effect upon the national security, which could be disastrous.

You may feel that I have painted a rather black picture. However. it can happen and may happen, unless a public awareness and a public understanding of the situation can be inculcated in enough people to prevent it.

Now, let us see just what the present status of the shipbuilding and ship-repairing industry is; what are its present prospects for the future.

MERCHANT MARINE STUDIES

481

In talking about orders for ships and the construction of ships, it must be realized that there is a very substantial timelag between the receipt of an order for a ship and the commencement of actual construction in a shipyard. That timelag will vary, depending on the type of ship, whether it is a duplicate of some previous ship, which it seldom is, on the workload in the yard, and on various other factors, but it is in the order of from 6 months for a relatively simple ship to a year or even 18 months for a large passenger liner.

That is why one cannot look at the record at any particular time and, because of the fact that a number of ships may be under construction in a shipyard and there is substantial employment in connection therewith, state without reservations that the condition is good, just because there is substantial work under way and equally substantial ship deliveries to be made by that particular yard during that particular year. The real key to the situation is the condition of the order book. Are there any orders in hand for ships not yet laid down? Have any orders been placed recently? If not, how long since a new order was received? What are the prospects for orders in the immediate and in the more distant future?

Applying that test to American shipyards at the present time gives cause for great concern to the industry. Not an order for a seagoing merchant ship of any type has been placed with an American shipyard this year. When a 6-month period passes without an order, it means that at a somewhat later date there will be a flat spot in a shipyard's construction activities. And when there is no prospect of any orders within the foreseeable future then the situation becomes desperate. Ship construction is a long-term operation on a relatively few, large, complicated, expense and tailormade units; it is not like a manufacturing operation where there is mass production of a very large number of units on a production line with the techniques that have been developed for that type of operation and with the continuous employment of all the crafts involved in the operation, all based upon a market of sufficient size to absorb the results of such mass production. Shipbuilding involves many crafts, a number of them specialized and highly skilled, and different crafts work on a given ship at different times depending upon the stage of construction.

For example, when a hull leaves the building ways and is launched, it is moved over to a fitting-out berth where work is continued on interior installations and the topside. Most of the men who worked on the ship on the ways do not follow the ship. They are available for the construction of another hull on the building ways, and, if there is no such hull, they must, of necessity for the most part, be laid off. Once they are laid off, they scatter, hunting jobs in other types of industry if they can find them. If, at some later date, there is need for them again in the shipyard, some may come back, but others will be reluctant to, depending upon how successful they have been in acquiring other employment at equal or better compensation and with more assurance of permanency. It is always a difficult. job to reassemble men in a shipyard after a layoff of whatever duration, and inevitably involves training new men to round out a working force, which is both expensive and time consuming.

Comparatively recently, our shipyards have gone through that cycle. After having a period of little or no employment, the private tanker program, combined with the Maritime Administration's

Mariner program, made it necessary to build up their working forces from a very small nucleus. Extreme difficulty was encountered in so doing, and the planned construction schedules could not be adhered to because of the time required to assemble the necessary force.

I might say that steel and other material shortages had an effect on that, too. Now that hurdle has been topped and there again faces the yard the prospect of extensive layoffs. Is there any sense in such a picture? To the shipyard managements, it is heartbreaking to see their efforts vanish in thin air.

Senator POTTER. What is the condition of the shipyards at the present time? They have the Mariner program under way and the tankers. I assume the tanker program is about completed, is it not? Mr. SANFORD. No; there are still tankers under construction. I intended to show you this a little later, Mr. Chairman, but I will show it to you right now.

I think it will illustrate what I have in mind. This is a photostat of a chart prepared by the Maritime Administration, but it is based on a chart prepared by the Shipbuilders Council and furnished to the Maritime Administration about 3 months ago.

It shows here, and we obtained all this information from the yards involved, not only the actual labor, but the projected labor for the future, as well as each company could project it.

Then the result was consolidated to form this curve. At the same time we drew another curve in here to show the tonnage on order, picking up the deliveries as they came along to show what would be left. So you can see those two curves to a certain extent parallel each other. You can see the amazing rate at which they will drop off, based upon the present workload, without any new orders involved. Senator POTTER. This is 1953?

Mr. SANFORD. That was projected all the way to the end of 1954, on the best information that the yards themselves could furnish to us. Senator POTTER. The prospects now are for a decline

Mr. SANFORD. At the moment, reasonably busy, but the future looks bad.

Senator POTTER. Without objection, the chart will be made a part of the record at this point.

(The chart referred to is as follows:)

YEARS

TOMMAGE UNDER CONSTRUCTION OR
ON ORDER AS PER PRESENT
CONSTRUCTION SCHEDULES.