United States Shipping Board Merchant Fleet Corporation - Origin

Origin

On 2 April 1917 President Woodrow Wilson cited Germany’s refusal to suspend unrestricted submarine warfare in the North Atlantic and the Mediterranean in his request for a declaration of war on Germany and Congress concurred on 2 April 1917. In that April 1,250,000 deadweight tons were sunk with 122 ocean going ships sunk in the first two weeks after that declaration of war. British losses in that period equaled an average round trip voyage loss of 25%. Allied losses had already been heavy before U.S. entry so that construction in yards outside the U.S. was unable to sustain current losses.

Congress had failed to act on creation of a shipping board to manage U.S. maritime affairs. As early as 4 September 1914 bills were introduced to fail. President Wilson repeatedly requested enactment of a shipping act with rejection until Representative Joshua W. Alexander introduced House Bill 15455 that became law as the Shipping Act of 1916 (39 Stat. L. 728). That act established the United States Shipping Board headed by five commissioners appointed by the President and confirmed by the Senate. That board had the potential for complete control over American ships and shipping. Most importantly with respect to the Emergency Fleet Corporation was its power to form corporations for acquiring, maintaing and operating merchant vessels under certain conditions. Ten days after declaration of war, on 16 April 1917, the Board created the Emergency Fleet Corporation (EFC) in the District of Columbia with a capital stock of $50,000,000.