The Great Gamble

In true “Glasgow weather,” some 30,000 Glaswegians gathered one day last week at the rain-drenched, mist-shrouded shipyard of John Brown & Co. There they cheered as Princess Elizabeth, in a new green coat and beret-like hat, with young Philip Mountbatten at her side, swung a bottle against the towering bow of the new Cunard White Star liner Caronia. Down the ways slid the 34,000-tonner, the biggest passenger ship launched anywhere since the war. The hull was towed to a dockyard basin, where it will need another ten months of outfitting before it is ready for service.

The $14 million Caronia will have the new Cunard look: single funnel, single mast, sharp clipper bow and a cruiser stern. The Caronia will carry only two classes on its nine decks, on winter cruises and the dollar-rich transatlantic trade. Britain has to get more of her share of that.

Gratifying Hum. To Britons, winning few victories in the factories and the mines, the battle of the shipyards was a triumph. Since the war British yards, still operated under private enterprise (they are not on the Labor Party’s list for socialization), have turned out 1,959,000 gross tons of merchant shipping—more than the rest of the world combined. They received $360 million in foreign orders, not counting orders from the Dominions. And the British merchant marine, which lost two-thirds of its tonnage in the war, was back up to 18,070,000 gross tons last September, only 387,000 gross tons short of December 1939. Still the yards hummed. By last month, 827 merchant ships (over 100 tons) had been launched since war’s end. Another 483 are under construction, most since 1922.

But the rebirth of Britain’s merchant marine also involved a whopping financial gamble. Like many other British industries, British yards have become both slow and expensive. Timber and steel are short; delivery of generators and other suppliers’ parts is often as much as 18 months late. Labor productivity is down, wages are up.

Terrifying Thought. Some shippers argue that the new ships’ greater speed and better utilization of space will make up part of the greater cost. Three new ships, they claim, do the work of four old ones. But many a British shipping man also agreed with I. C. Geddes, of the Orient Steam Navigation Co. Ltd., whose new $12,000,000 Orcades, a 31,000-ton passenger ship, was recently launched. “In addition to running costs,” said Geddes, “these two ships [the Orcades and a sister ship to be built] will have to earn something in the neighborhood of $2,400,000 a year to cover interest and depreciation. A terrifying thought.”

The thought also seemed to terrify U.S. Secretary of Commerce Harriman, who recently suggested that Britain and other shipbuilding nations buy U.S. surplus ships. But British shipping companies want no crocks (750 of the U.S. laid-up fleet are slowfooted, uneconomical Liberty ships). They prefer to build new ships that are faster and can be operated at lower costs. With Britons pressing to emigrate to South Africa, Australia and Canada, the passenger business is booming. The prospects for freight are equally good. British lines expect to carry the largest single slice of U.S. relief shipments under the Marshall Plan. (Only 5% of the total is expected to go in U.S. bottoms.) The two Queens, now earning their keep on commercial runs for the first time in their history, are likely to remain without competition in the carriage trade. Even U.S. shipping men concede that, with U.S. tonnage steadily contracting, Britain will soon regain her traditional shipping lead and cash in on her gamble.