Merchant Marine Policy of the United States

Report Outline
Impending Revision of Ship Subsidy System
Development of the United States Merchant Marine
Administration and Effects of 1928 Jones-White Act
Official Recommendations for New Shipping Policy
Special Focus

Impending Revision of Ship Subsidy System

Enactment of new legislation for development of “an adequate merchant marine” was recommended by President Roosevelt in a special message to Congress on March 4. Identical bills embodying some of the President's recommendations were offered in both houses on April 15 by Rep. Bland (D., Va.) and Senator Copeland (D., N. Y.). The Bland-Copeland Bill was passed by the House, June 27, by a vote of 194 to 186, but it is understood that this bill is not satisfactory to the President and that the administration is now drafting a substitute measure.

In his special message, the President said new merchant marine legislation was needed (1) to maintain fair competition between American and foreign ships; (2) to obtain sufficient American-flag ships for “neutral peaceful foreign trade” in time of war; and (3) to obtain naval auxiliaries and provide for “the maintenance of reasonable and necessary commercial intercourse” during wartime. The time had come, he said, to square the traditional ideal of an American merchant marine with “effective performance.” Citing the “poor management, improper use of profits, and scattered efforts” of shipping companies, he declared that the “practices and abuses” engaged in by these companies under the Jones-White Act of 1928 “should and must be ended.”

The President recommended abolition of the “disguised subsidies” provided under the 1928 law, in the form of payments for the carriage of ocean mail, and substitution of outright grants based on the difference between American and foreign costs for ship construction and operation. Congress could “well afford honestly to call a subsidy by its right name.” He urged also that “Congress should provide for the termination of existing ocean-mail contracts as rapidly as possible and it should terminate the practice of lending government money for shipbuilding.”