Shoals Ahead

Last week, as Nazi submarines continued their stepped-up campaign against British shipping (see p. 24), an old hypothesis suddenly became an important fact: drab tankers and lumbering freighters were as vital in World War II as airplanes and tanks. A real squeeze in ships was in the making. Unless Washington could find a way to ease the pressure, not only aid to Britain but also the entire U. S. defense program and economic system were about to feel the pinch.

At the beginning of 1940 Great Britain is believed to have had the services of some 20,500,000 tons of merchant marine --most of it under the British flag, the rest available from the fleets of allied or neutral nations. According to last week's estimates (from official British admissions of sinkings), 4,300,000 of these tons have been lost. Replacements (newly built, seized from the Axis or purchased from the U. S.) were estimated at only 1,650,000 tons. Net loss: 2,650,000 tons, with possibly another 1,000,000 tons damaged and laid up for repairs.

This year Nazi sinkings have averaged 350,000 tons a month (1940 average: 295,800 tons). Ships are being torpedoed much faster than new ones are launched. The rosiest estimate of British building this year is 1,350,000 tons. Although shipbuilding is booming in the U. S. all the way from New England around the Gulf and to the West Coast, no more than 850,000-1,000,000 tons can be launched here this year; much of the activity is in new yards which must be completed themselves before any keels can be laid.

Proof of the shortage of vessels was everywhere last week. On the docks at Buenos Aires was piled three times as much goods for shipments to the U. S. as there was cargo space available. The whole "Good Neighbor" program in Latin America was endangered by lack of ships to carry on the trade which the U. S. has subsidized through its Export-Import

Bank. Freight rates were up all over the world (200-300% from the U. S. to the Near East, 50% to Singapore and The Netherlands Indies, 25% to South America). Commodities markets boiled with evidence that traders knew there was many a shoal ahead for ocean-going freight. Rubber rose to 22.75-c- a Ib. (a new high for the season), raw sugar to 3.30-c- a Ib. (highest in 17 months), cocoa to 7.43-c- a Ib. (highest since 1937).

Last week the Maritime Commission received from the Office of Production Management a list of "essential" and "nonessential" imports which soon will be translated into cargo priorities. Classed as essential were the strategic and critical materials (rubber, tin, etc.), plus such secondary or civilian musts as leather, wool, zinc, copper, quinine, coffee, sugar, cocoa. On the nonessential list were frillier items which the U. S. imported to the amount of $200,000,000 last year: spices, wine, tea, furs, coconut oil, palm oil, fibres and burlap. By rationing shipping space just as machine tools and aluminum already are being rationed (TIME, March 10), the U. S. hoped to make every ship that still sails the seas work at 100% efficiency for defense.

At the same time, Washington cast a calculating eye toward the 79 German, Italian, French and Danish ships (559,233 tons) laid up in U.S. ports. Up to now, the only thing which has kept these vessels out of service to the democracies has been the conservatism of State Department ideologues like its International Economic Adviser, backward-leaning Herbert Feis, who disapproves of seizure (as unneutral). Last week it looked as if the Department's die-hard holdouts could not succeed much longer. South American countries, whose ports shelter 90 other ships belonging to the Axis and its vassals, are also considering confiscation, would be spurred by a U. S. precedent.

But so long as Nazi submarines are sinking 350,000 tons of shipping a month, there is scant comfort in setting cargo priorities and seizing a mere 169 vessels. Once these steps are all taken, the U. S. will have to settle down to the tougher task of building ships and shipyards faster than it has ever built them before. With every yard already crowded, U. S. shipbuilders are talking about their boom. Soon they will look back to March of 1941 as a period of lull.

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