“don't give up the ships”

MR. WILFRED J. McNEIL

‘DOWT GIVE UP T B SHIPS

THE AUTHOR Mr. Wilfred J . McNeil was born in Boone, Iowa, Febru- ary 21,1901. Prior to World War I1 he had experience in banking, automobile merchandising, and newspaper cir- culation. During the war he served in th eSupply Corps, U. S. Navy, and attained the rank of Rear Admiral. He was appointed Fiscal Director of the Navy Deparhnent i n January 1945, and served as Special Assistant to Sec- retary of Defense Forrestal from September 1947 to Sep- tember 1949. Mr. McNeil was m i n u t e d by President Truman as Assistant Secretary of Defense, and was c m - firmed and designated Comptroller in September 1949. He served cmtintwzlsly in these capacities under Secre- taries of Defense Johnson, Marshall, Lovett, Wilson and McElroy. Mr. McNeil is President of Grace Line, IIW. and Presi- dent of the New York Council, Navy League of the United States.

ADDRESS AT THE ANNUAL BANQUET OF THE

AMERICAN SOClETY O F NAVAL ENGlNEERS WASHINGTON, D. C .

MAY 4.1962

Naval Engineers Journal, M a y 1962 201

“DON’T GIVE UP THE SHIPS” McNEIL

R. PRESIDENT, DISTINGUISHED GUESTS, AND MEM- M BERS OF THE Society, and as General Hershey added when he greeted you five years ago “Bureau Chiefs, Engineers, real and alleged, and representa- tives of great corporations who steal engineers from each other”:

For almost two decades I have had the pleasure of attending these annual dinner meetings, frequently in later years as a guest of the Society. It was an event always looked forward to and enjoved each spring. Though on one occasion I was asked to make some opening remarks, I little dreamed that some- day I would be honored by an invitation to speak before this distinguished group.

Before proceeding, Mr. President, I hope you will allow me a moment to thank publicly the many members of your Society for the advice, counsel and assistance given to me during the more than 18 years I had the privilege of serving with the U. S. Navy and with the Department of Defense. It was a relationship I shall always treasure.

Now-several of your members cautioned me about telling stories to this discriminating audience. Apparently, my advisors didn’t want to see any dilu- tion of the hlgh standards set in past years. How- ever, I am sure that nobody, not even the F.C.C., would object to one twenty second “commercial” in a half-hour program.

“It seems that one day a man-eating lion was chasing a missionary. When the missionary found that the lion was closing the gap, he dropped to his knees, his hands clasped in an attitude of prayer. While praying, he looked over his shoul- der and saw that the man-eating lion had also stopped and that he had reared back on his haunches, with his paws in an attitude of prayer. The missionary said to the lion, “Thank God- you know how to pray.” The lion replied, “Don’t bother me, big boy-I’m just saying Grace.’’ About the time I was searchng for an appropriate

topic for this sophisticated assembly, the Maritime Administrator announced the letting of a contract for a study of the problem involved in abandoning ships at sea. While this study had the laudable pur- pose of trying to find means to help those who might some time have to face such a drastic maneuver- the real problem today is how to keep afloat a healthy and vigorous U. S . Merchant Marine. Ships can be lost and are being lost to the U. S. Merchant Marine today just as surely as they could have been lost at the Battle of Lake Erie where Capt. Law- rence’s ringing cry, “Don’t give up the ship,” led the American fleet to victory. At the risk of being pre- sumptuous-but as a means of dramatizing the plight of the American Merchant M a r i n d a p t . Law- rence’s legendary command has been amplified as a title for tonight’s discussion.

At such a gathering as we have here, it is not necessary to dwell on our country’s need for a strong Merchant Marine. All of us know that great power

and influence often is the prize awarded to the nation whose fleets span the waters of the world‘s trade routes. All of us recognize the essentiality of a viable Maritime Industry. All of us realize the value and necessity of maintaining an American Merchant Marine for defense purposes.

All this is clearly recognized by the preambles to the Merchant Marine Acts of 1920 and 1936-the basic legislation providing for the operation of an American Merchant Marine.

This legislation is basically good. However, human nature being what it is, the good people that administer these Acts naturally tend-over the years-to make more and more restrictive interpre- tations of both the statutes and their collateral regulations. As a result, basically good American laws-in their practical eff ects-discriminate against the American Merchant Marine in favor of foreign flag shipping. Such actions-coupled with a lack of country-wide appreciation of the need of supporting the American Merchant Marine, jeopardize its very existence. Current conditions clearly require a broader philosophy in the implementation of this basically sound legislation.

Next, let me say that the American Merchant Marine needs business, needs customers, and needs tangible support.

There is today substantial foreign trade but American Flag lines, generally speaking, are not carrying it. While Grace Line’s percentage partici- pation is better than some, regularly scheduled American steamship lines carry only about 30 per cent of our country’s trade in the s+called “liner” services. But, when you take the American Mari- time Industry as a whole, including tankers, bulk dry cargo ships, tramp operators, etc., the percentage carried in American Flag ships drops to a meager 10 per cent.

Certainly this poor showing is not the result of higher prices charged for transportation or because of inadequate service. Barring isolated cases, the rates and fares on American Flag ships are the same as on foreign ships. There are no finer, faster, more modern and safer ships in the world than those now operating or under construction for United States Flag lines.

The answer, in large part at least, is the general apathy in the United States toward a Merchant Marine. By contrast, the Japanese and the British- just to pick two at random-feel that it is patriotic to use their national flag lines, and as a result 60 to 70 per cent or more of their trade is carried in their own bottoms. So far, in this country, we have not been able to secure the same degree of public sup-

Actually, some importers and exporters seem to have developed a peculiar attitude-almost an in- feriority complex-with the result that, if he sells for export, he thinks the customer should dictate the routing, but, if he imports, he of course expects

port. I

202 Naval Enpinears Journal. M a y 1962

McNEIL “DON’T GIVE UP THE SHIPS”

the foreign shipper to determine the routing-and he usually does.

Real efforts are being made by the industry to counteract this apathy through advertising, personal calls, letters to shippers and brochures which out- line the services we have to offer, as well as community visits by leaders in the industry to cities over the country to tell our story.

A number of trade associations have endorsed the the essentiality of American Flag shipping and recognized the unique service it can render. If their members would put into practice the sense of their own policy statements, it would go a long way to solve our problems.

In spite of the poor showing in the world-wide competitive situation, American Flag lines con- tribute nearly one billion dollars a year to the solution of the “gold flow” or balance of payments problem. This figure is greater if flags of convenience or necessity are included. However, American shippers are still presently spending more than two billion dollars each year with foreign lines to purchase transportation which-as I mentioned a moment ago-is available at the same price from American Flag ships. Although programs by the government highlighting the important contributions shippers can make to the balance of payments problems have had some effect in the last year, it is only a begin- ning in the thrift that should be exercised. Reason- able support of U. s. Flag vessels will keep enough dollar freight payments in this country to make a significant difference in the government’s balance of payments problem.

I was tempted to give you more statistics to fur- ther show the present status of American Flag par- ticipation, but was dissuaded when I remembered a paragraph in a letter received by a Washington bureaucrat some years ago which said:

“The subject is unfortunately one in which ion- ized statistics have left fleeting and luminescent trails in a cloud chamber of highly purposeful debate.” Competition today over every foreign trade route

is severe-a competition seriously aggravated by a world-wide surplus of ships-tanker, dry cargo, as well as specialized types. No businessman should complain about normal competition but, in our case, many foreign flag competitors are government- owned or controlled or government nurtured. This has led in many cases to unfair legislation, undue pressures, and even outright discrimination by statute or decree. This development has been increasing in recent years-principally from those nations newly emerging as factors in world trade. Frequently, our so-called 50/50 law, which applies only to U. S . Government owned or financed cargo, is used as a crutch to support their desires to also control commercial shipments.

By contrast to the terms of some foreign laws, decrees and practices, our 50/50 law is perhaps the

most generous legislation ever written by a Mari- time nation-but for some reason it remains incredi- bly a source of constant pressure from overseas. Separately, and in concert, major foreign maritime nations are using a wide variety of efforts to secure the law’s repeal or emasculation. It is imperative that this law, which is not concerned with commercial cargoes, be effectively administered.

Discriminatory actions by foreign nations which create a virtual cargo-carrying monopoly in commercial type cargoes for their nationally-owned ship lines can and must be overcome by countervailing action by the United States. Recently-but only recently-our State Department and Federal Mari- time Agencies have grasped the seriousness of the problem. They have demonstrated that existing law can be used effectively to counter discriminatory practices. At the same time, quite properly they have recognized that other nations with merchant fleets have a right to participate in their trade with

The Maritime Industry is now in a period when automation and mechanization, both afloat and ashore, including the employment of conveyors and containers, are becoming increasingly essential ele- ments to successful ship operations. Neither government, management nor labor has faced up to the problems involved in being able fully to utilize the product of modern technology. We, of Grace Line, have had the sad experience of having two contain- erships of advanced design immobilized for over two years. Perhaps the most important single problem is an understanding by labor of the necessity of American shipping to adopt every practicable improvement in method or equipment in order to become competitive and stay competitive in world trade.

While not by any means a cure-all for all the ills from which our industry suffers, automation and mechanization can reduce costs. The Maritime In- dustry, however, needs help in getting acceptance of this principle by organized labor and in working out reasonable solutions to the problems involved in an orderly and well-planned manner. Perhaps management, as part of this effort to get acceptance, must take a broader approach and plan for more adequate retraining facilities and possibly for more tangible assistance in effecting the transfer of displaced em- ployees to other types of employment. It is quite likely, however, that if we become sufficiently competitive, retraining is about all that would be involved because a substantial increase in traffic on American Flag lines coyld utilize personnel in the same or greater numbers than are now employed. In this process, I personally would be delighted to see individual wage increase? if such increases were the result of increased productivity so that management, labor and capital could share in the benefits. Here, human values are an important guide to policy, particularly since these dramatic changes are

us.

“

Naval Enqinaarr Journal. May 1962 203

“DON’T GIVE UP THE SHIPS” McNEIL - -- coming to an industry that has changed its basic way of life so little since the days of the Phoenician traders.

Perhaps the most valuable contribution that could be made by organized labor would be the adoption by responsible union leadership of the same philosophy developed by John L. Lewis and the Mine Workers which resulted in miners receiving the highest average pay. At the same time, by the adoption of improvd methods and the utilization of the most advanced mechanical devices, labor costs in producing a ton of coal have remained at a level which kept that product competitive in local and world markets.

There is a need for improved machinery to effect the management-labor harmony so sorely needed if we are to avoid the disruption to service on Ameri- can Flag ships so prevalent in 1961 and on our Pa- cific Coast in 1962. Serious thought is being given both inside and outside government circles to find- ing the most workable solution and such efforts should receive the support of all of us.

The economics of the industry, however, extends beyond automation and mechanization. The Mari- time Industry and the Transportation Industry generally are comprised of too many uneconomic units. Each individual unit has its own sales, maintenance, accounting, advertising departments and other items of overhead as well as a duplication of facilities generally. For example, the advertising budgets of each of these individual, uneconomic units are so small as not to make an impression on the American public-particularly when competing for attention with large buyers of advertising space in many other in- dustries. Perhaps the trend towards mergers, or working arrangements, might include shipping companies and companies representing other modes of transportation.

Business knows the problem of plant moderniza- tion. However, the American Merchant Marine faces the problem of “block obsolescence” because the present fleet consists of war-built ships. While the industry is moving ahead with its obligations to re- place existing ships. it must constantly be aware that the cost of invested capital and the amortization of these replacement ships, as compared to the low book value ships we now use, places such a heavy new drain on operating funds as to raise serious doubts as to the wisdom of keeping u p f o r long- the present pace.

Another aspect of the ship replacement program -recently has been the subject of extensive discussion. This is the increasing attention being given by the Maritime Administration to what-on the sur- face-appears to be a seductively attractive objec- tive-that of standardization.

No one is more interested in reducing initial ship costs than is the ship operator. I have just mentioned the increasing burden that the cost of invested capital and the amortization of new ships places upon

current operating funds. In addition, ship operators must strive to reduce operating costs and maintenance expenses. To accomplish this we must-like any other industry- have equipment tailored to our needs.

Since 1957, contracts for the construction of 76 dry cargo ships have been let under the replacement program sponsored by the Maritime Administration. These ships fall into two size classifications-the C-3 and the C-4. In each size category there have been six different designs. While there is a deceptive simi- larity in hull design among the ships of each of these two categories, there has been, in actuality, very considerable dfference between the several designs -differences specifically chosen in order to meet the particular needs of the vastly different services in which the sponsoring steamship companies are en- gaged.

There is no doubt that “mass production” of a standardized s h i p i f such were practicable-could bring unit cost savings but there is no “mass production,” in shpbuilding today, as the term would be defined in the automobile or appliance field. The way to achieve optimum benefits of a standardization program, in our opinion, is to seek the desired results in greater standardization of principal ship components such as the machinery plant, steering gear, deck machinery and many other components generally fabricated outside of shipyards.

Standardization of the overall hull design, com- partmentation and handling gear for specialized purposes is not likely to be protable, particularly at any forecasted level of ship replacement. It is essential that the ship operator be given the freedom to make those vital variations of hull interior arrangements and outfit that will fit economically and prac- tically the specific needs of his service. Without this latitude, ship operators cannot hope to make new ships pay their way.

An appreciation of our replacement worries, a plan to speed up subsidy payments for those liner service operators who must operate under U. S. labor and operational standards, and who must build their shps in U. S. yards, a balanced program for research, studies on cost reduction, greater flexi- bility in the use of reserve funds, a step-up in pro- motional activities as specifically contemplated by the 1936 Act, are among the important matters on which I can only touch. All of these and more must be included in a program which will create an en- vironment that will attract capital and warrant in- vestor confidence in the shipping business.

While, as mentioned earlier, we would hope for a broader approach to the implementation of the basic Shipping Acts and for better understanding of our competitive problems, we should-in all fairness- recognize that government agencies concerned with our industry actually have done much to back up our own efforts.

Today with the backing of the President, the State

204 Ndvdl Enpinsorr Journdi. Mdy iP62

McNEIL "DON'T GIVE UP THE SHIPS"

Department, the Treasury and the Department of Commerce, the government is assisting and encour- aging business in its efforts to increase trade and expand sales abroad. It is attempting to work out problems associated with the European Common Market. All this ties in with any program for the promotion of a healthy and stronger American Mer- chant Marine.

Let's remind ourselves of a few positive points in our favor. The United States is growing-growing in every way. People who in the past might have had no reason to concern themselves with ocean travel, ocean transportation and foreign trade have broad- ened their horizons. They have come to know that foreign travel and markets are now within their capabilities. They have come to know as a Nation we are not self-sufficient but need foreign trade for our very existence.

We should increase our efforts to give the "common touch" to foreign trade. The myriad of individual transactions that necessarily constitute foreign trade are vital for every community. Every city, town and hamlet in the United States has a stake in foreign trade. We must take advantage of the national interest that is growing in the exchange of goods and servicds between ourselves and those in every part of the world. This is an age where the world, its peoples and its places have a new and tempting appeal for a public that is becoming more conscious every day of the ties that bind all people. We can help to stimulate this interest and can do so to our own great advantage.

I have mentioned a number of areas of fruitful endeavor for those interested in the welfare of the American Merchant Marine. There is one more area on which I would like to touch before closing. This concerns personnel necessary to accomplish this work. It is, of course, a truism that competent personnel are the basis for any successful venture. Lo- cating and training of such personnel are always difficult.

There is, however, an excellent and generally un- tapped source in this country of trained, competent and dedicated personnel. I refer to the officer corps of our three Armed Services-men with integrity with whose capabilities I am most intimately fami- liar, both from experience in and out of the government. Whde I would not urge or attempt to influence a decision for early retirement, many of these offi- cers, of their own volition, are searching for new employment after twenty or more years of service in the Armed .Service of their choice. These men constitute a most valuable pool of trained personnel which our organization intends fully to utilize. I would urge officials of all companies represented here tonight to take a close look at the excellent talent now becoming available.

I would like to express my appreciation for the opportunity to express before such a knowledgeable audience, some thoughts on the subject of the American Merchant Marine. Its problems may be many and difficult, yet with perseverance, ingenuity and skill, we can overcome them. Let's not sell short the American Merchant Marine-it can be a winner.

SOVIET NUCLEAR SUBMARINE The November, 1961, issue of Forum Memo reports the following item on the

Russian nuclear submarine "fleet." "The existence of at least one operational Russian nuclear submarine apparently was

verified last month with the publication in Iruestiu of an eye-witness account of a trip aboard such a vessel. Included was a retouched photo of the ship itself. In no more specific terms the articles claimed that the USSR had quite a few nuclear submarines. They were also said to be armed with various rockets and torpedoes, though there was no suggestion of any capability for underwater firing. The U. S.'s Polaris submarine system, on the other hand, was referred to as unreliable.

"The Iruestiu artides contained an interesting, if tacit, admission of a delay in the development of a Russian nudear Navy. Marshal Georgi Zhukov, former Defense Minister, was accused of underrating the potentialities of nuclear submarine warfare. Premier Nikita Khruztrchev himself was said to have intervened to get the program under way.

"Claims for the nuclear submarine, or submarines (speculation ranges from three to six in operation or under construction) were mostly in general, though superlative, terms. One detail apecifically described was a flexible tail on the vessel, like the tail fiin on a big sturgeon," the article from Imeutia concluded.

MECHANICAL ENGINEERING, Jan. 1962

Naval Engineers Journdl. May I962 205

An old World War Il Victory ship is now seeing service dgain as a missile tracker. The American Mariner observes the characteristics of missiles in the upper atmosphere with a complex arrangement of tracking instruments.

DOWNRANGE MISSILE TRACKING

The missile tracking ship, the American Mariner, has undergone a two-million-dollar refitting at a Brooklyn shipyard. When it resumed itr station as a seaborne laboratory it had one of the most complete instrumentation facilities on any vessel afloat.

The ship operates as part of project DAMP (Down- range Antimissile Measurement Program\. This i s a research program directed by the Army Rocket and Guided Missile Agency.

Since February, 1959, this remodeled World War II Victory ship has been in o eration observing missiles from

area. This ship is equipped to make observations wiih radar, infrared tracker, and optical instruments. By using their complex array of tracking devices, the observation crew sights in on missile parts as they fall from the upper atmosphere and records physical characteristics of the reentry. As the fall, )Ire missile fragments emit particle

missile research.

Cape Canaveral which fa1 P into the South Atlantic impact

trails. These trai r s and other phenomena are important in

Tbis view from tbe stern of the American Mariner chows the elaborate battery of radar refkctors, cameras, and infrared trackers used in missile tracking. Reading clockwise around the picture, the instruments are: Spsctral sequence ameras and a four-channel photometer (HI two pedestals, at left, three radar antemas, radiometer, high-resolution cam- ems, and mliosonde on pedestals at right. Center pedestals contain infrared trackers.

As part of the improvement to the Amwican Mariner the Todd Shipyard Corporation increased the stability of the vessel by relocating equipment and pour- ing concrete ballast. This reduces the ship's motion con- siderably, thereby increasing tracking accuracy.

RCA's Defense Electronic Production Division will also make a series of electronic installations and modifications. One of the major changes i s the instal!ation of two 16-ft- diameter radar reflectors. RCA manages the ship's operation in addition to the radar.

The Barnes Engineering Company has the iob of taking care of all optical tracking equipment. The optical meas- urements for which Barnes is responsible cover the spectral region from the far infrared through the ultraviolet, within the spectral limits imposed by the atmosphere. TO implement this assignment, they have installed a number of optical measuring instruments, support equipment for these instruments, and data recording and processing equipment.

These include: Dual ballistic cameras to provide a wide field of view

and spectral record of the re-entry phenomena as a func- tion of both range time and spatial orientation.

Spectral sequence cameras permit an instant-by-instant record of the spectra of the reentering bodies through- out visible and near infrared. They use transmission grat- ings and 70-mm sequence cameras.

A four-channel photometer provides absolute calibra- tion values of radiation at several oints in the spectrum.

tube with a filter passing the narrow regions of the spectrum that are of special interest. Other e uipment includes a number of radiometer and

The air-conditioned ship i s fully equipped with metal and wood-working shops and repair facilities for the electronic equipment. Since each missile is given detailed photographic coverage there is also a complete photographic laboratory. It has facilities t o print and process sti l l as well as 16, 35, and 70-mm film.

MECHANICAL ENGINEERING, Sept. 1961

Each channel uses a photomultipier P

a high-res 1 ution cinecamera.

206 Naval Enpinoeri Journal. Mar IW

“don't give up the ships”

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