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Susan Green

Exposing More Merchants of Death

Shipowners’ Cost-Plus Piles Up

(5 July 1943)

From Labor Action, Vol. 7 No. 27, 5 July 1943, p. 3.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

Some weeks ago the Truman Committee reported that 12,000,000 tons of shipping had gone to the bottom in the year 1942. This tonnage, of course, refers only to the vessels themselves. On board were seamen, thousands of them. Some were rescued from a watery grave. Many were not. On board also were huge quantities of supplies, embodying valuable raw materials and valuable human labor.

Ships, men and supplies were destroyed – just written off. As we all know, this large-scale ravaging of men and materials at sea is typical as well of wartime destruction on land and in the air – destruction inflicted by the Axis on the United Nations, and vice versa.

But this senseless annihilation of man and of the products of his labor is by no means the complete picture of imperialist war. Not only does world capitalism throw humanity into orgies of senseless wrecking for the ulterior purposes of the profit system. What also happens is that the individual capitalists of every warring country see in war the chance for making super-profits and for laying their hands on everything within reach.

A case very much in point are the shipbuilding and shipping industries. The wholesale sinking of 12,000,000 tons of ships – with men and material on board – is certainly not without compensation for the shipbuilding and shipping companies.

Who Gets the Ships After the War?

First of all, the reader must understand the relation between the government and the shipbuilding and shipping companies. It is indeed a unique one. Presumably the new ships that are now being built are for the government, on government contract. The shipbuilders are exceedingly well paid – on a cost-plus basis – about which more later. You would expect, therefore, the new ships to be the very best possible to meet the submarine menace. To get away from submarines, FAST boats are obviously called for.

But hold on. The shipbuilders know that after the war the ships will be turned over to them. This was done after the last war – and at a bargain-basement price! So what has happened? The shipbuilders have been building with an eye on their own post-war requirements. For post-war business the SLOWER ships, consuming less oil and requiring less space for oil and engine, would be more economical. THE SLOW CARGO SHIPS, THEREFORE, ARE THE KIND THAT HAVE BEEN TURNED OUT IN SUCH ENORMOUS QUANTITIES.

Bosses Build “Submarine Bait”

The much-touted Liberty cargo carriers, for instance, are now known to seamen as – and have been dubbed by them – “submarine bait.” They are slow because equipped with old-fashioned steam engines. According to a spokesman for the Industrial Union of Marine & Shipbuilding Workers, the engine “belongs to the previous century and is only to be found in museums.”

The same IUM&SW-CIO spokesman, Lyman C. Covert, is further quoted as follows: “I see another angle to this matter of slow ships and profits, and that is: It seems possible that shipbuilders might prefer to build ‘submarine bait’ so that there would be more contracts, more ships to be built, and more millions to be garnered.”

The Bosses’ British Cousins

Until recently the British shipbuilders were producing in the same criminal way. The London Tribune is quoted as follows on the subject: “It is once again the private industry’s concern over post-war business that is the real obstacle to a clean-cut and necessary government policy on shipping.”

After a great furor arose from the Left – the labor press condemning not only the shipbuilders but their stooges in Parliament – faster ships are now being built in England. In this country likewise, the exposure of shipbuilding scandals has, according to the Truman Committee, resulted in redesigning the Liberty ship – “submarine bait” – which is to be replaced by the Victory ship, supposed to be faster.


Those Cost-Plus Profits

And the profits in shipbuilding have been – to put it very mildly – considerable. In England, an investigation of the cost of building thirty-two battleships, reveals profits ranging from ten per cent to over eighty per cent. What a plum!

In this country, those same Liberty ships which the seamen call “submarine bait,” are built on the cost-plus basis – ALLOWING THE SHIPBUILDING COMPANIES PLENTY OF LEEWAY ON BOTH THE “COST” END AND THE “PLUS” END.

The Truman Committee found that costs varied from $579,133 at Wilmington, Del., to $2,730,000 at Sausalito, Cal. It is true that these place’s are three thousand miles apart, but that does not account for this unbelievable difference in cost. Here is proof of what can be done with a cost-plus contract.

The Truman Committee also asked the Department of Justice to take criminal action against some companies on the counts of “rapacity, greed, fraud and negligence.” Maybe these criminal bosses will be tried and fined a farcically small amount – as is usual in such cases – and maybe not even that will be done.

But let the shipyard workers ask for more wages to buy the necessary food and clothing for their families, and they are given a presidential order to “hold the line” – meaning not to disturb the skyline of their bosses’ profits.

Profits That Stagger Imagination

The business of shipping war supplies, closely related to shipbuilding, is also enjoying a real bonanza. The publication of the International Longshoremen & Warehouseworkers Union – the ILWU Dispatcher – reports an orgy of profiteering by the shipowners that “staggers imagination.” Even the Stalinist believers in boss-worker unity who control the ILWU must recognize the proof submitted to a congressional subcommittee, that in some cases profits from one trip alone can be many times larger than the original value of the vessel itself. In all cases the values are set by the companies themselves – and the profits announced by them also. Following is a bit of interesting information:

On six trips, six ships of the American Export Lines brought home a profit of $1,572,141 – whereas the six ships were worth only $232,350. The profit was more than six and a half times the value of the ships.

On two trips, two ships of the American Foreign Steamship Corp., valued at $895,974, netted a profit of $481,128. That’s not so good – a mere fifty per cent of the valuation placed on the vessels.

But here business picks up again. The American President Line on two ships worth $307,828 in three trips made $814,242 – or two and two-thirds times the value of the ships.

On twelve trips, ten Luckenback ships valued at $1,426,857 made a profit of $8,879,729 – or over six times the value of the ships.


A rough idea of how such profits are piled up on transporting war supplies was given by the Grace Line. One of its Santa boats was wilfully tied up by its captain in New Hebrides for over one hundred days. The crew tried everything to get the captain to allow them to unload the materials on board – awaited by General MacArthur.

After fifty-one days only one-third of the cargo was unloaded. The crew held a protest meeting, which the captain declared illegal. He told the men to mind their own business – and dragged out the unloading for over one hundred days.

No wonder! The government pays the Grace Line at the rate of about $1,000 a day for a ship on a time-charter basis. The more days the unloading takes, the more pay from the government. Here is one reason why the working people are being taxed to the sockets of their eyes.

Every story of these merchants of death – of which there are legion – leads to one conclusion:

All war industries must be conscripted. Not as now, when the government takes over a factory to help the bosses break a strike. But war industries must be conscripted actually – TO END THE GRUBBING OF BLOOD-SOAKED PROFITS BY THE BOSSES AT THE EXPENSE OF THE WORKERS AND THE SONS OF WORKERS. Yes, war industries must be conscripted, and the workers themselves must get control, of them to stop the Merchants of Death from their crimes!

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