. The Panama Canal Act of 1912 granted free entry for all material needed in the construction of vessels. American registry was also allowed to foreign built ships not older than five years. It is interesting to note that two years passed without a single transfer from a foreign flag to the American.
The tariff of 1913 allowed a discount of five per cent in customs duties on goods imported on Ameri can vessels, but this clause has been declared non operative by the Supreme Court.
The United States government pays for the car riage of the mails. The pay is on the mileage basis and differs according to the speed and size of the vessel. Ships of the first class of at least 8,000 tons and 20 knots receive $4.00 a mile, those of the secolid class of 5,000 tons and 16 knots S2,00, those of the third class of 2,500 tons and 14 knots $1.00, and finally ships of the fourth class of 1,500 tons and 12 knots $0.6666 a Mile. For the fiscal year 1919, S317,989 was paid for contract ocean mail service.
12. Effect of war.—The first effect of war condi tions upon the American merchant marine was the passage of the law of August 18, 1914, by which all foreign vessels were admitted to American registry irrespective of their age, provided they satisfied the requirements of the United States inspection service. These ships were really treated more favorably than American built ships since they were allowed to keep their foreign officers and crew. On account of the lower insurance rate and the safety afforded under a neutral flag some two hundred vessels were trans ferred to American registry before America entered the war.
13. United States Skipping Board.—When the European War broke out the freight rates were high as .a result of a general scarcity of tonnage and the high rates of ocean insurance. In July, 1914, the rate on grain from New York to English ports was four to five cents per bushel; in December of the same year it had gone to 16 cents. The demand for ton nage and governmental control of shipping in the United States led to the establishing of the United States Shipping Board in September, 1916. This board was authorized to have constructed in American shipyards if possible, (otherwise in foreign ship yards) or to purchase, lease or charter vessels suit able for use as navy auxiliaries or army transports.
These ships could not be acquired from nations at war, neither were they permitted to be ships actively en gaged in domestic or foreign commerce.
The board was authorized to form a corporation with a capital not to exceed $50,000,000 for the pur chase, equipment, lease, and operation of merchant vessels in the commerce of the United States. It was given power to investigate complaints regarding ocean freight rates, to pass upon the agreements between carriers among themselves and between carriers and shippers. By the same act the Secretary of the Treasury was empowered to refuse clearance to any vessel laden with merchandise destined for a foreign or a domestic port when an American citizen had been refused cargo space for any other reason than that the ship was fully loaded or unsuited for the transporta tion of the freight in question.
14. Emergency Fleet Corporation.—Under the act of 1916 the United States Shipping Board, shortly after the entry of the United States into the war, organized the Emergency Fleet Corporation for the purposes authorized in the act. The work of the Cor poration was hampered by shortage of labor, .trans portation difficulties and also the absence of a large enough number of shipyards to produce the ships called for in the construction program. A large number of contracts were let to private yards. Within two days after the President had delegated the power to the Corporation, that is to say, on July 13, 1917, contracts had been let for 425 ships repre senting a tonnage of approximately 1,860,800, equiv alent to two-thirds of our total overseas fleet before the war. Of the stupendous figure called for in the plans of the Shipping Board, approximately 3,000, 000 tons had been launched by the time the armistice was signed.
During October, 1918, some 79 completed new ships of 415,908 deadweight tons were added to the American merchant marine. The American yards alone produced during this month 398,108 deadweight tons, thereby surpassing the British record for any month by 102,397 deadweight tons.