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Letter to the Chairman, U.S. Maritime Commission, on the Ship Construction Program.

April 16, 1948

[ Released April 16, 1948. Dated April 15, 1948 ]

My dear Admiral Smith:

As you know, I am recommending to the Congress that the 1949 Budget of the United States Maritime Commission be amended to provide $100,000,000 in contract authority for an expanded program of merchant ship construction. This action was taken as an integral part of the security program which recent events have compelled me to place before the Congress.

It is encouraging to note that orders have recently been placed with American shipyards by private interests for the construction of a considerable number of tank vessels of advanced design. This, together with expanded Naval and Maritime Commission ship construction programs, should reverse the recent downward trend of employment in the shipbuilding industries. It is to be hoped that additional orders for the construction of vessels under private account will be placed in the near future, and, in this connection, I wish to emphasize that I regard the Government-sponsored program for merchant-ship construction as a stimulant to, rather than a substitute for, construction by private industry.

I am requesting, therefore, that immediate steps be taken by the Commission in conjunction with the shipping industry to determine what additional ship construction is economically justified at this time as evidenced by willingness on the part of industry to purchase vessels constructed. With regard to tanker construction, I feel that Government participation should be limited to the cost of national defense features. With respect to other types of construction, I believe that, as stated in my Budget Message to the Congress, "Construction of new vessels should be limited to those for which private purchasers are available . . ." and that the Government's participation should be based upon the principle of providing: through subsidy, the differential in cost between foreign and domestic construction, as provided in Title V of the Merchant Marine Act.

I also urge the Commission to make every effort, consonant with sound business principles, to expedite the initiation of the authorized 1948 shipbuilding program in order to enter into contracts for the construction of these vessels before the end of this fiscal year.

In order that the construction program of the Maritime Commission may be properly integrated with the security program I request that the Commission establish complete liaison with the Secretary of National Defense. It is important that the closest working relationship exist between the two agencies.

Sincerely yours,

HARRY S. TRUMAN

[Vice Admiral W. W. Smith, Chairman, United States Maritime Commission, Washington 25, D.C.]

Note: On July 2 the White House released a letter to the President from the Secretary of Defense and the Chairman of the Maritime Commission, which served as an interim report on the merchant ship construction expansion program.

The letter, dated July 1, informed the President that a Maritime Commission-Military and Industry Liaison Committee had been established and had investigated the situation. In exploratory discussions with members of the shipping industry, the Committee had found a reluctance to enter into firm commitments for ship construction while legislation was pending before Congress which would increase subsidies and other benefits to the industry. Since Congress had adjourned without passing the legislation, the Committee was waiting to see to what extent the industry would participate in the program.

In conclusion, the letter stated that the Committee was proceeding, through discussions with interested shipowners, to ascertain to what extent it would be possible to commit the $178 million of contract authorization in the construction of merchant vessels.

Harry S. Truman, Letter to the Chairman, U.S. Maritime Commission, on the Ship Construction Program. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/229290

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