An interesting step taken by the Board just prior to the signing of the armistice. was the creation of a corporation to which was given the name "The War Trade Board of the United States: Russian Bureau Incorporated," for the purpose of acting as the agency of the United States in extending economic assistance to Russia. The capital stock of this corporation, $5,000,000, was provided by an allotment from the President's special war emergency fund. In announcing the creation of the corporation the Board stated that it was not the intention of the corporation to compete in any way with the ordinary channels of trade, but that the corporation would furnish supplies to the districts where business men would hesitate to go on account of the transportation problems and the low value of Russian currency. To a considerable extent it planned to conduct its operations upon a barter basis. Later announcement was made that it had begun operations by the dispatch of three vessels from the Pacific Coast to Vladivostok carrying commodities that its representatives in Siberia had designated as being most needed there.

CHAPTER VII

THE MOBILIZATION OF SHIPPING

Unrestricted submarine warfare and the shipping crisis- -Importance of the Shipping Act of September 7, 1916 - Creation of the United States Shipping Board- - Its organization and powers - Functions and creation of the Emergency Fleet Corporation Further war powers derived from Congress For seizure of enemy shipping-For commandeering of ships and shipbuilding plants-For an extensive construction programme For admission of foreign vessels to the coastwise trade For provision of housing facilities and transportation services at shipyards - For control over the transfer of vessels to alien ownership - For control over ship operation and marine transport - Operations of the Shipping BoardConstruction programme of the Emergency Fleet Corporation -Ships secured by seizure and requisition Provisions for operation of ships and allocation of tonnage - Recruitment and training of operating and construction forces - - The labor problem- The Shipbuilding Labor Adjustment Board National Adjustment Commission Committee on Mariners' Wages The Port and Harbor Facilities Commission Chartering Committee.

The

Among the absolute essentials for the successful prosecution of the war none took precedence over shipping suitable for overseas voyages. A partial breakdown in our system of inland transportation, a shortage in food, fuel, or other supplies, interruptions in operations due to labor difficulties, might seriously handicap our own efforts; but a failure to secure ships for the transportation of our troops and military supplies and the food and other things of which our allies had bitter need meant nothing short of absolute disaster. Almost from the outbreak of the war the merchant shipping at the disposal of the Allies suffered a steady diminution. On the one hand, the toll of ships destroyed by the enemy submarines and mines tended constantly to increase.

On the other hand, the Allies were compelled to devote so large a part of their shipbuilding facilities to naval construction and found themselves in possession of so inadequate a supply of skilled labor that it was impossible for them to build ships in sufficient number to offset losses.

Grave as was this situation at the beginning of 1917, it was rendered still more serious by the declared intention of the enemy to practice unrestricted submarine warfare, a declaration which was the immediate cause of our entering the conflict. Following this declaration the sinking of merchant vessels went on at a greatly increased rate. It became evident that unless ships could be built to replace the ones destroyed, it was only a question of time when the war would be lost by us from this cause alone. Our allies were already putting forth practically their maximum effort. If the situation was to be met, it had to be met by us.

Fortunately the need for taking action towards the upbuilding of our merchant marine had been appreciated prior to our being drawn into the conflict. On September 7, 1916, Congress passed the Shipping Act, the full title of which was: "An Act To establish a United States Shipping Board for the purpose of encouraging, developing and creating a naval auxiliary and naval reserve and a merchant marine to meet the requirements of the commerce of the United States with its territories and possessions, and with foreign countries; to regulate carriers by water engaged in the foreign and interstate commerce of the United States; and for other purposes.'

This Act, although proving to be one of the most important elements of our war legislation, was not passed as a war measure properly speaking. Fundamentally

it vas intended as a piece of permanent legislation with two primary ends in view: (1) the provision of an organ that should exercise much the same regulative control over carriers by water engaged in interstate and foreign commerce as was exercised by the Interstate Commerce Commission and the Federal Trade Commission in respect to inland transportation and industrial corporations engaged in interstate business; and (2) the taking of steps that would lead to a restoration of our merchant marine to its former importance. In respect to the latter the act had specially in view the construction of vessels that might be used as ordinary merchant vessels in times of peace and as auxiliaries or a reserve to the Navy in time of war. In the present work no attempt is made to give an account of the functions or activities of the Shipping Board from the first standpoint, both because they had no direct relation to the prosecution of the war and because these functions were practically in abeyance during the war.

In order that the Board might perform its second function on a scale called for by the war, its powers had to be materially broadened. This was done by successive acts of Congress which will be enumerated and described. Before this is done, however, it is desirable to give an account of the organization of the Board and its powers and duties in respect to the building up of a merchant marine, as provided for by the original Act.

The Act provided for the creation of a United States Shipping Board of five commissioners, to be appointed by the President by and with the advice and consent of the Senate, who should hold office for six years, with the proviso that the first commissioners should hold office

for two, three, four, five, and six years, respectively, to the end that the membership of the Board should normally undergo change one member at a time instead of all at once. The Board was directed to elect annually one of its members as Chairman and one as Vice-Chairman. Not more than three commissioners could be appointed from the same political party, and no commissioner was permitted to engage in any other business, vocation, or employment. The salaries of the commissioners were fixed at $7,500 per annum. Provision was made for a Secretary to be appointed by the Board at a salary of $5,000 per annum, and authority was conferred upon the Board to "employ and fix the compensation of such attorneys, officers, naval architects, special experts, examiners, clerks and other employees as it may find necessary for the proper performance of its duties and as may be appropriated for by the Congress."

In addition to its powers as a regulative body, which, for reasons already given, are not here considered, the Board was given the direct duty of securing by construction, purchase, lease, charter, or otherwise, vessels suitable for marine transportation, and of making provision for their operation. The President was authorized to transfer to the Board, either temporarily or permanently, such vessels of the Navy and War Departments as were not required by them for naval and military purposes in time of peace and were suitable for commercial use, and such vessels owned by the Panama Railroad Company as were no longer required by it. The Board, having acquired the ownership of vessels, was authorized, upon terms and conditions prescribed by it and approved by the President, to charter, lease, or sell to any citizen of the United States any vessels so purchased, constructed, or transferred.