The Maritime Administration’s First 100 Years: 1916 – 2016
The year 2016 marked 100 years since the founding of the Maritime Administration’s (MARAD) first predecessor agency, the United States Shipping Board (USSB). The Shipping Act of 1916 created the USSB, the first Federal agency tasked with promoting a U.S. merchant marine and regulating U.S. commercial shipping. Congress enacted the law in part to reform the nation’s maritime industry and to respond to the severe shipping shortages as a result of World War I.
The 30 years between 1830 and 1860 have been referred to as America’s “Golden Age” in shipping. Sailing ships called “Packets,” carried mail, trade goods, and passengers back-and-forth across the Atlantic on a regular schedule. The Clipper ship soon ushered in faster service, and later the gradual introduction of steam further revolutionized shipping. However, the “Golden Age” did not last. For a variety of reasons, some of which included faulty policy and legislation, the U.S. shipping industry steadily declined in the half-century leading up to the Shipping Act; by 1914, U.S.-flagged merchant vessels carried just 10% of ocean trade. World War I made the shortage even more apparent when European nations recalled their ships from international routes and Germany’s unrestricted strategic targeting of merchant shipping further disrupted international trade.
Ten days after the U.S. declared war on Germany on April 6, 1917, the USSB created the Emergency Fleet Corporation (EFC). The EFC managed a massive construction program to increase the U.S. merchant fleet. By the end of the war in 1918, the EFC had delivered 470 ships and in just 19 months, had become the largest U.S. industrial operation of the war. Edward N. Hurley, USSB Chairman during World War I, later wrote, “I am convinced that the country never has realized to what extent the war was won at home by…the Shipping Board and the Fleet Corporation, by taking the most desperate chances conceivable.”
The November 11th armistice and subsequent peace talks placed the shipbuilding program at a crossroads. When EFC planners began the program they assumed that the war would last for years. Now there was no massive military effort to sustain, and the shipbuilding program had yet to even reach peak production. However, the USSB elected to continue building vessels to strengthen American merchant shipping in the post-war world.
When the construction program finally ended in 1922, the EFC had completed 2,312 ships, making the U.S. merchant fleet among the largest and most modern in the world. To capitalize on the newly-minted fleet and expand America’s global reach, Congress passed the Merchant Marine Act of 1920, specifically citing the U.S. merchant marine’s role in national defense and commerce. Often referred to as the “Jones Act” after the bill’s sponsor, Senator Wesley Jones, the legislation restricted American coastwise and intercoastal trade to U.S.-flagged vessels. It also encouraged the USSB to sell surplus vessels to U.S. companies to privatize the industry and ensure that U.S.-built ships carried American ocean-born trade. However, while the EFC’s shipbuilding program and the Jones Act were positive steps, a slowing global economy and oversaturation of the shipping market precipitated another decline.
In an attempt to reverse this, Congress passed the Merchant Marine Act of 1928. The statute’s main provision authorized the USSB to offer generous subsidies in the form of mail contracts to companies that built new, fast vessels for the major oceanic trade routes. It also aimed to replace the program established by the Postal Act of 1891 and encourage the construction of passenger ships, something that was not done under the 1916 act and the EFC. Many of the ships built under this program provided troop service during World War II. However, the bill’s vague terms, liberal distribution of government funds, subsequent subsidy abuse, and the start of the Great Depression, led to criticism of the program and the USSB. President Herbert Hoover wanted to disband the USSB entirely but only succeeded in refusing to fill vacancies thereby reducing the number of commissioners. On August 10, 1933, President Franklin D. Roosevelt abolished the USSB and created the interim United States Shipping Board Bureau (USSBB) within the Department of Commerce. Roosevelt preferred that the regulation of U.S. shipping remain under partial control of a cabinet department; but by 1936, Congress replaced the USSBB with the independent regulatory body, the U.S. Maritime Commission.
The legislation that created the Maritime Commission, the Merchant Marine Act of 1936, is often referred to as the “Magna Carta of American Shipping.” As part of the New Deal, it intended to revitalize U.S. merchant shipping and strengthen the nation’s national defense.
To facilitate ship construction and operation, and to help the industry compete against foreign operators, the law authorized two subsidies; the construction differential subsidy and the operating differential subsidy. The construction differential subsidy was meant to offset the higher shipbuilding costs in the U.S. by paying up to 50% of the difference between the cost of U.S. and non-U.S. construction with the difference going to the U.S. shipyard. The operating differential subsidy was a direct subsidy paid to U.S. – flag operators to offset the high operating cost of U.S.-flag ships when compared to foreign-flag ships.
The act’s timing was also critical in regards to national defense. In 1936, increasing tensions in Europe and Asia stoked fears of another world war, and the U.S. wanted to avoid a shipping crisis similar to that of World War I. The government hoped the act would revive U.S. shipping and create a fleet of modern ships. To that end, the Maritime Commission designed new cargo ships, sought bids from private companies, and awarded construction contracts. To further increase production, the Commission implemented the Long-Range Shipbuilding Program in 1938. Intended to improve the U.S. fleet and replace aging World War I-era vessels, the program pledged the construction of 500 new ships within ten years. The Commission utilized standardized designs that enabled fast production, but also resulted in ships that were modern, safe, adaptable, efficient, and fast. After Germany invaded Poland in 1939, sparking World War II, the Commission accelerated the program’s production; by 1941 the annual output called for 400 ships.
While Europe and Asia descended into war, Congress passed a series of laws known as the Neutrality Acts restricting trade to belligerent nations and barring U.S. ships from sailing to certain combat zones in an attempt to remain neutral. However, U.S. merchant ships were not immune to the danger and the Neutrality Acts could not offer protection as evidenced on November 8, 1940, when the U.S.-flagged ship MS City of Rayville struck a German mine and sank off the coast of Australia, killing an American merchant mariner.
In January 1941, President Roosevelt announced a plan to construct 200 ships in addition to those being built for the Long-Range Shipbuilding Program; these ships would become the first EC2 “Liberty” type ships. Liberty ships were based on a British concept and were less advanced than Maritime Commission designs, but their simplicity enabled cheap and quick production. The Commission debated building the ships because of concerns that the vessels may not be useful in the post-war world; however, the need for ships ultimately outweighed their concern. The January 1941 production increase, the first of several during the war, became known as the Emergency Shipbuilding Program.
On December 7, 1941, the Japanese attacked the U.S. naval base at Pearl Harbor, Hawaii, driving the U.S. into World War II. To handle the operational demands that the war placed upon the Maritime Commission, President Roosevelt created the War Shipping Administration (WSA) on February 7, 1942. While the Commission continued to build ships, the WSA was authorized to control the operation, purchase, charter, requisition, and use of all ocean vessels under the flag or control of the United States, except combatant vessels, auxiliaries, and transports of the armed services and the vessels engaged in coastwise, intercoastal, and inland waterways transportation, which were under the control of the Director of the Office of Defense Transportation. The WSA also oversaw mariner training programs. Although the WSA operated the U.S. merchant fleet, it also utilized the infrastructure already in place and entrusted private shipping companies with operating, maintaining, and crewing their ships at government expense.
The training of merchant seaman and officers was equally as important as shipbuilding and operation. The foundation of wartime training can also be traced back to the Merchant Marine Act of 1936, which created the United States Maritime Service (USMS), the organization responsible for mariner training. Like the Long-Range Shipbuilding Program, the USMS began operation in 1938 and expanded as the likelihood of war increased. After Pearl Harbor, the U.S. enlarged the training program to include a major training facility at Sheepshead Bay, New York, the U.S. Merchant Marine Academy at Kings Point, New York, as well as other training sites throughout the country. To further increase the number of trained mariners as the war progressed, the USMS shortened the length of its training programs and in May 1944 lowered the minimum age of enrollment to just 16.
The U.S. merchant marine played a deciding role in the Allied victory in World War II. In the war against Germany and Italy, U.S. merchant vessels supported the amphibious invasions of North Africa, Italy, and France, and enabled the success of each campaign by transporting and delivering personnel and supplies. In the Atlantic, German U-boats exacted a heavy toll on merchant ships, especially in the first half of 1942 when the U.S. was slow to implement modern anti-submarine tactics and technology, particularly the use of convoys and naval escort ships. As the Allied campaign against Germany progressed, U.S. ships were also exposed to threats from aerial attack, surface vessels, and naval mines. In the Pacific Theater, the vast expanse of the ocean itself and distances to remote island battlefields, presented its own set of challenges. Ships and crews faced the same enemy anti-ship weapons as those in the Atlantic, but Japan’s lack of a coordinated campaign against merchant shipping resulted in far fewer losses.
The success of the U.S. merchant marine in World War II would have been impossible without the historic efforts in shipbuilding, ship management, and mariner training. Between 1939 and 1945, the Maritime Commission built 5,171 ships of over 2,000 gross registered tons. In addition to the Liberty ships, the Commission also oversaw the construction of the more modern “Victory” type cargo ships, as well as tankers, combination passenger/cargo ships, tugs, barges, and military auxiliary vessels. In order to operate these ships, the Maritime Commission used a variety of training programs to produce 262,474 mariners between 1938 and December 1945. However, the success of the merchant marine and achievements in production and training did not come without a price; more than 700 merchant ships were sunk and more than 8,000 U.S. merchant mariners were killed during the war. The losses suffered are all the more remarkable given that the U.S. merchant marine was not considered a military branch and was composed of volunteers classified by the government as civilians.
Wartime ship production made the U.S. merchant marine fleet the largest and most modern in the world; by 1946, the U.S. operated nearly two-thirds of the world’s shipping. In the war’s immediate aftermath, Maritime Commission ships supplied U.S. occupation forces, brought American service personnel serving overseas home, and delivered material to help rebuild the war-torn nations. Many Maritime Commission vessels, especially the Victory ships built in the last years of the war, quickly formed the basis of the U.S.’s post-war civilian merchant fleet.
Although World War II resulted in the U.S. emerging as a world superpower, the government rapidly demobilized the military. For the merchant marine, this culminated in the Merchant Ship Sales Act of 1946, part of which directed the Commission to sell surplus merchant ships to civilian ship operators, including foreign shipping companies. While the U.S.’s goodwill helped rebuild foreign shipping fleets, it also depressed the U.S. maritime industry for the next two decades. The act also created the National Defense Reserve Fleet (NDRF). Unlike the post-World War I years where many surplus vessels fell into disrepair, Congress wanted a well-maintained fleet of ships ready for deployment in the event of war or other national emergency.
The post-World War II era also brought organizational changes to the Maritime Commission. In 1946, Congress abolished the WSA and its responsibilities reverted to the Commission. On May 24, 1950, Congress created the Maritime Administration and Federal Maritime Board (FMB) to replace the Maritime Commission. These new agencies were placed under the Department of Commerce and were closely intertwined but had different missions; MARAD maintained all U.S. merchant shipping promotional programs and the NDRF, while the FMB took on a regulatory role. In 1961, Congress implemented Reorganization Plan No. 7, renaming the FMB the Federal Maritime Commission (FMC), making it a truly independent organization responsible for regulating U.S. international maritime shipping. The plan also replaced the subsidy functions performed by the FMB with the Maritime Subsidy Board (MSB), which reported directly to the Maritime Administration’s Administrator. The 1961 changes remain the foundation of MARAD’s current organizational structure.
Various events in the 1950s demonstrated the value of the NDRF. The first occurred in June 1950, when a simmering conflict on the Korean peninsula soon spiraled into full-fledged war between North and South Korea. A United Nations (UN) force, led by the U.S., quickly intervened. Although President Harry Truman deemed it a “police action,” the U.S. soon became engrossed in a full-scale conventional war, sending thousands of troops and millions of tons of supplies to the country. Unlike the world wars when the U.S. government rushed to purchase and build ships to meet the needs of the military, the NDRF provided a ready fleet of ships to support the mission.
The NDRF also responded to humanitarian crises around the globe. During the early 1950s NDRF ships transported large amounts of critically needed coal to Northern Europe and grain to India to help those regions overcome shortages. Beginning in 1953, in a unique deployment of NDRF vessels, MARAD used reserve ships to store some of the U.S.’s grain surplus, essentially using them as floating grain silos. By February 1954, MARAD was storing 72 million bushels of grain aboard 317 NDRF ships. MARAD’s grain storage program lasted 10 years, and at its peak stored 136 million bushels of surplus grain. NDRF vessels deployed in a more conventional role due to the international shipping shortage created by the temporary shutdown of the Suez Canal in 1956.
During the Vietnam War, 172 NDRF vessels supported sealift operations and transported military cargo to Southeast Asia between July 1965 and June 1970. The majority of the NDRF ships activated during the war were World War II-era Victory ships, and activating the old vessels was one MARAD’s biggest challenges. Further complicating matters was the largescale ship activation required to coincide with the sudden troop escalation in Vietnam; between July and December 1965 MARAD activated 76 ships. MARAD employed shipyards on every coast to help activate ships that had not operated in years. While MARAD secured the ships necessary to support the military’s mission in Vietnam, it had difficulty finding enough trained mariners to crew these ships. To overcome this shortage, MARAD authorized the early graduation of cadets at the U.S. Merchant Marine Academy, and the state maritime schools followed suit.
Because the Vietnam War was largely an unconventional conflict, U.S. merchant ships were mostly spared serious danger, although some vessels suffered minor damage after coming under fire in what MARAD described as “harassing incidents.” One notable exception was the SS Baton Rouge Victory, which sunk when a saboteur attached a mine to the ship’s hull and detonated it on the night of August 23, 1966. The explosion killed seven crewmen and caused extensive damage to the hull and engine room, requiring the scrapping of the ship.
The NDRF reached its peak effort in Vietnam in 1967 when it carried 34% of all military cargo. After 1967 the need for NDRF vessels steadily declined as the logistics network improved and the military’s needs were more easily met. The NDRF’s role in Vietnam officially ended on November 16, 1970, when the refrigerator-ship SS Contest returned to MARAD’s Suisun Bay Reserve Fleet in Benicia, California.
Despite their ability to meet the military’s needs during the Vietnam War, the NDRF vessels began showing their age and obsolescence. The same was also true of many of the privately owned and operated vessels; by June 1970, the U.S. merchant fleet totaled just 819 ships, two-thirds of which were more than 25-years-old. A variety of political and economic factors had again put American shipbuilding and shipping companies into decline, so much so that MARAD’s 1969 Annual Report stated the industry was “drifting to the brink of disaster.” To help revive U.S. merchant shipbuilding, Congress passed the Merchant Marine Act of 1970, which, for the first time, extended subsidies to bulk carriers. Although it was the most significant maritime legislation in over three decades, the act did not reinvigorate the U.S. maritime industry and only 200 of 300 planned ships were built over the next 10 years.
The need to modernize and modify the NDRF also became apparent during the 1970s. In 1976, a Ready Reserve Fleet (RRF) component was established as a subset of the NDRF made up of vessels that can be activated on short notice to provide rapid deployment of military equipment during an emergency. The ships are partially crewed and maintained in a condition that allows them to be fully operational in five or 10 days, depending on ship-type. After activation, the U.S. Navy’s Military Sealift Command (MSC) takes operational control. The RRF’s ability to rapidly deploy satisfies crucial supply needs for the U.S. military, especially during the early critical phases of military operations and disaster response. In its 40-year history, RRF vessels have been activated many times to support various military operations and to provide aid during disasters. The Ready Reserve Fleet later became known as the Ready Reserve Force.
In 1990, the RRF consisted of 96 ships, 79 of which were activated during Operations Desert Shield/Desert Storm, the U.S.-led coalition’s military response to Iraq’s invasion of Kuwait. This was the first large-scale activation of the RRF since its establishment. The vessels involved were roll-on/roll-off (Ro-Ro) vessels (which describe how cargo is handled), break-bulk cargo ships, tankers, and barge carriers. During the 1990s MARAD also deployed RRF vessels to Haiti, Somalia, and Central America. The 46 vessels that make up today’s RRF continue to be an integral part of MARAD operations and U.S. military planning and performance.
Another important development during the 1990s was the creation of the Maritime Security Program (MSP) in 1996. The MSP is comprised of privately owned U.S.-flagged vessels engaged in international trade that are available for use by the Department of Defense (DOD) in the event of war or national emergency. The program enables DOD to use U.S.-flagged ships for missions, and in return, the shipping companies receive financial assistance. The MSP is
currently extended through fiscal year 2025, and is composed of 60 vessels that provide approximately 2,400 mariner jobs.
In the 21st century MARAD has continued to play a vital role in strengthening national defense and providing assistance during humanitarian crises. From 2002-2008 MARAD activated RRF ships to support Operations Enduring Freedom and Iraqi Freedom (OEF/OIF), accruing a total of 13,575 ship operating days. During the same period, U.S. flagged vessels enrolled in the MSP carried almost 38% of all cargo to support OEF/OIF. MARAD ships were not limited to only serving American interests overseas; nine MARAD vessels supported the Federal Emergency Management Agency’s relief efforts in the aftermath of Hurricanes Katrina and Rita. MARAD also deployed vessels for humanitarian aid after the 2010 Haiti earthquake, and used RRF and NDRF “school ships” to provide berthing space for emergency responders in 2012 after Hurricane Sandy made landfall on the U.S. East Coast.
Since 1916, MARAD and its predecessors have been dedicated to the promotion and advancement of the U.S. merchant marine. MARAD and its predecessors have served U.S. interests in times of war and peace, transported troops and supplies across the globe from World War I to Operation Enduring Freedom, and provided humanitarian aid during emergencies at home and abroad. Today MARAD continues to support the U.S. maritime transportation system, which includes infrastructure, industry, and labor, to meet the nation’s economic and security needs.
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 Edward N. Hurley, The Bridge to France (Philadelphia & London: J.B. Lippincott Company, 1927).
 The subsidies were referred to as mail contracts due to the criticism of government subsidies during the 1920s. However, the term is accurate because ships awarded these subsidies agreed to carry U.S. mail on their routes, a practice established by the Postal Subsidy Act of 1891.
 This was also necessitated because Depression-era companies could not take advantage of the subsides offered in the Merchant Marine Act of 1936.
 The British design stemmed from their order of ships from U.S. shipyards in 1940. The British needed ships that could be built quickly to reinforce their fleet and replace losses suffered in the war.
 In 1981 MARAD was transferred to the Department of Transportation.
 School ships are government owned training vessels operated by the U.S. Merchant Marine Academy and the state maritime academies.