Billion-Dollar Feast

In Washington last week, U. S. Navy Secretary Charles Edison clarified his views about the raging World War II controversy of battleship v. airplane (see p. 18). Said he: ". . . So far as the U. S.

is concerned, battleships were, are and will be for many years the backbone of our first line of national defense. . . .

Naval warfare on the high seas, on the broad Atlantic and Pacific, is not warfare in landlocked fjords. Trust your fleet." Echoing the Secretary's words was the clangor in U. S. shipyards last week. On the ways, in the mold lofts, some $750,000,000 worth of warships were building --approximately 80 additions to the growing U. S. Navy, now neck & neck with Great Britain in the race for world naval supremacy. Of these new vessels, eight were battleships, two aircraft carriers.

There were six light cruisers, 29 destroyers, 14 submarines, a host of mine layers, torpedo boats, etc. As yet unlet were contracts for 23 more warships, including two 45,500-ton superdreadnaughts.

But a navy is shorebound without a merchant marine, which brings it food, supplies, oil. (One 10,000-ton cruiser at full power burns oil at the rate of 35 tons an hour.) In U. S. shipyards last week this lifeline--a brand-new merchant fleet--was also building: 118 cargo ships ordered by the U. S. Maritime Commission at a cost of better than $300,000,000. For a fillip, the yards had another $40,000,000 or more of private tankers and cargo ships under construction. To the U. S. shipbuilding industry, this added up to a $1,000.000,000 feast--the biggest in peacetime history.

Of all feast & famine industries, shipbuilding knows the worst extremes. Dependent on the Navy and (for most cargo vessels) on Government subsidy, it waxes fat or lean in direct ratio to Administration policy. From 1865 until World War I it piddled along on Navy contracts, built only enough merchant ships to carry 15% of U. S. foreign trade. When that war came, the "Bridge of Ships" frenzy gave it a $3,000,000,000 handout for 2,300 merchant vessels, mushroomed it to 211 yards.

Then, from 1922 to 1928, while the Government slowly sold its wartime fleet, the U. S. built not one vessel for the transoceanic trade. Four years ago the Roosevelt Administration hatched the Merchant Marine Act of 1936, an outright subsidy to shipowners. For them, the Maritime Commission began a shipbuilding program which swung into full stride last year. So far 46 vessels have been launched, 37 put into service. Besides the 118 now on order, contracts for 358 others will be let in the next five years.

To build all these war and merchant ships, the U. S. has eight Navy yards (which do half the Navy's building) and 22 private yards with 83 ocean ways. None of them is idle today. Fortnight ago Admiral Stark, asking a Senate Committee for more Navy money, pointed to strained shipbuilding capacity and proposed to add more. But the private shipbuilders, busy as they are, pointed to 37 partially dismantled ways which can be restored to use if their schedules need speeding up.

Of the 22 private yards, six have been put up since 1937. Two work exclusively for the Navy--Bath Iron Works (destroyers) and Electric Boat Co. (submarines).

Two others--Sun Shipbuilding & Dry Dock and U. S. Steel's Federal Shipbuilding & Dry Dock--can turn out anything up through a light cruiser. But of U. S.

shipbuilders who can build any ship from a trawler to a battlewagon, from a tug to a liner, there are only three.

Bethlehem. Biggest of the Big 3 is Bethlehem Shipbuilding Corp., Ltd., owned by the No. 2 U. S. steelmaker. It builds ships at Quincy, Mass., at Sparrows Point, Md., at Staten Island, N. Y., and on San Francisco Bay. Youngest, most profitable of the Big 3, it has grossed over $1,000,000,000, netted more than $100,000,000 in its 23-year corporate life. On or nearing its 23 ways last week was the fattest slice of 1940's shipbuilding boom: 60 merchant and naval vessels worth a cool $200,000,000.

Until last week Beth. Ship.'s prime mover was tall, slim, sardonic-looking Samuel Wiley Wakeman, who had been building ships ever since he graduated from Cornell in 1899. Vice president & general manager in name (Beth. Steel Head Eugene Grace is president), he had been Beth. Ship.'s active head in practice.

But last week death came to Wiley Wakeman, 63, and every man in his company's big Fore River plant headquarters in Quincy knew that he was the hardest kind of man to replace.

Newport News. Biggest independent U. S. shipyard and No. 2 of the Big 3 is Newport News Shipbuilding & Dry Dock Co., a $73,000,000 corporation built 54 years ago by the late Railroader Collis P. Huntington, who knew nothing about ships. With very little interference from its absentee owners, the yard has averaged a cozy $1,500,000 annually for ten or twelve years. In its big, greasy, snarled James River yard (eight ways) last week $180,000,000 worth of ships were building: U. S. Lines' 24,800-ton America, largest U. S. liner ever built; the battleship Indiana and the aircraft carrier Hornet; assorted naval and merchant craft.

Time to sell a shipbuilding firm is when it's feasting. That is what huge (6 ft. 5, 240 lb.), gentle, scholarly Archer Milton Huntington, son of the founder, thought last week when he sold Newport News to a Wall Street investment banking group headed by Tri-Continental Corp. For a reputed price of $18,000,000, aging (70) Archer Huntington and his wife turned over their 29,644 shares; the balance of the firm's 100,000 shares were delivered by various Huntington trusts, estates and cultural institutions. One of the last of the big family-owned U. S. enterprises (biggest, Ford Motor Co.), Newport News is now scheduled for early listing on the New York Stock Exchange.

Pleased at having plucked this prize away from Lehman Bros, and Blyth & Co., who bid too low, Tri-Continental announced that its syndicate would keep a third of the shares, sell the rest. Rumor was that Newport News's President Homer Lenoir Ferguson, Annapolis man and head of the firm for 25 years, would step up to board chairman, boss the show from there, while his handsome Vice President Roger Williams, former Navy line officer, would take over as president.

New York Shipbuilding Corp., smallest of the Big 3(5 ways), has had the most turbulent career. Andrew Mellon, Henry Clay Frick and their old steelmaster friends built it in 1899 on the banks of the deep. sheltered Delaware River ("America's Clyde"), on tidewater 90 miles from the sea. Mellon sold it in 1916 for $11,500,000 to American International Corp., and its troubles began. From 1925 on it was bought & sold first by brilliant, eccentric Laurence Russell Wilder, a promoter, who dropped its name and combined it with his electric equipment manufacturing firm of American Brown Boveri Electric Corp.; then by Motormaker Errett Lobban Cord, a promoter too. Present owner (since 1938): canny, balding Victor Emanuel's Aviation & Transportation Corp., which controls 102,800 of its 175,000 founders' (voting) shares.

Of the 417 vessels eased from New York Ship.'s big ways, 67 (one-third of the tonnage) have gone to the U. S. Navy, among them the battleships Idaho, Oklahoma, Colorado, and the aircraft carrier Saratoga. Its merchant ships include the slick U. S. Lines liners Manhattan and Washington. Now it is building seven ships (all naval) worth $145,000,000. One of them, the 35,000-ton, $52,794,000 battleship South Dakota, puts New York Ship, in the odd position of a manufacturer producing a single sales unit worth more than four times as much as his total assets ($12,559,000). To its seven warships was added last week the probability of two more when the Navy announced that New York Ship, was the only bidder on two light cruisers worth $17,580,000 apiece.

To rugged, white-haired, modest John Farrell Metten, dean of U. S. naval designing engineers, New York Ship.'s big cut of the shipbuilding boom was most welcome. In 1935, after he became president, his firm lost an uncomfortable $1,415,373 on its 1933-34 contracts. Last year it earned $928,264. With luck, 1940 might set a record. From a Delaware farm, Jack Metten went to work repairing ships at Newport News when he was 19.

Seventeen years later he was chief engineer of the famed old Philadelphia shipbuilding firm of William Cramp & Sons Co., which went to the wall in 1928. Now 66, a bachelor, he owns scores of patents on new shipbuilding techniques, has given his company and the U. S. Government the right to use all of them without royalties.

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