Foreign Relations of the United States: Diplomatic Papers, 1944, General: Economic and Social Matters, Volume II

111 Advisory Committee/242

The British Embassy to the Department of State

International Control of Shipping After the Liberation of Europe

1. For war purposes the control of the use of all merchant shipping belonging to and in the service of the United Nations has been in general achieved by grouping it in two blocks under the direction of War Shipping Administration and Ministry of War Transport respectively. As regards United States and British ships in private ownership, this direction is mainly exercised through requisition; in the case of foreign flag ships the power to direct the ships has been obtained principally by time charter under Agreements made with the Allied Governments and neutral owners. The co-ordination of the use of the ships in each of the two main blocks is achieved through the Combined Shipping Adjustment Boards.¹

2. After the liberation of Europe the tasks to be carried out by merchant ships will change, but will remain large. The requirements for hostilities in the Far East will be heavy. Ships will be required for the supply and movement of occupying forces in all parts of the world, for the supply of forces awaiting demobilisation and ultimately for their demobilisation. For civil needs, ships will be required for the relief and rehabilitation of the liberated areas in Europe, for Soviet Russia and, as the war in the Far East proceeds, in the East, as well as for the supply of the United States, the United Kingdom and the other United Nations. We cannot, at present, determine with any certainty whether the shipping at the disposal of the United Nations will be more than sufficient after the war in Europe is over to carry out such necessary tasks without adjustment to priorities. It is clear, however, that the demands upon shipping for such purposes will for some time after the conclusion of European hostilities be on such a scale as to require, if confusion is to be avoided, the continuance of central machinery for allocation to use.

3. The provision of shipping for the supply of all liberated areas as well as of the United Nations generally and territories under their authority and the provisions of shipping for all the military and other tasks necessary for and arising out of the completion of the war, should be accepted as a common responsibility for all of the United Nations who control ships.

4. The Agreements under which the ships of the European Allies are time chartered expire not later than six months after the termination of hostilities in Europe and in some cases earlier. These Allies are unlikely to be willing thereafter to submit their ships to control by War Shipping Administration and Ministry of War Transport through time charter. Certain European Governments, e.g. Norway and Greece would have more tonnage under their control than they would need for the supply of their own territories, and perhaps the Dutch will have more than they need for Holland. Moreover, there is no sufficient reason why the United States of America and the United Kingdom should continue to bear the cost of chartering Allied ships if another method of control of [is?] practicable.

5. So long as the United States and the United Kingdom have continuing obligations to control the employment of their shipping for the purposes of the war, there should be no shipping of the United Nations free from direction in the common interest. For the same reason there must be control during the same period over the shipping of neutral countries surplus to their requirements. Enemy shipping must also be controlled in the general interest.

6. The allocation and prices of many vital commodities must continue to be subject to international control during the transition period. Such control would be difficult if not impossible to maintain if there were any substantial amount of shipping free to carry such commodities to unapproved destinations.

7. For these reasons His Majesty’s Government in the United Kingdom have come to the conclusion that a system of central direction of the use of shipping comparable to that now in existence should be continued after the liberation of Europe and for so long thereafter as may be necessary to complete the war and the tasks arising from it. Some change in the method of control is necessary, however, because of:—

(a) the expiry of the time charter arrangements with the European Allies and

(b) the necessity for taking account of the claims of the smaller Allies for control of shipping on a more international basis than at present when they are back in their own countries.

8. A practicable plan to achieve the purpose is briefly described in the attached paper. Before carrying the matter into any further detail His Majesty’s Government would be glad to have the views of the United States Government upon the proposition that some form of central control of shipping will remain necessary, and upon the general principles of the method proposed for achieving it.

9. Under the plan outlined the participating Governments would agree to take and maintain such powers of control over their own shipping as would enable them to comply with the requirements of an International Maritime Administration. The nature of the powers of control by each Government over its own ships would be for each Government to determine. A certain latitude is reserved in the allocation by participating countries of their own ships for the essential import requirements of territories for which they have special shipping responsibilities.

10. The plan presupposes the existence of machinery to determine, in the event of shipping shortage, the priority in which the requirements of various countries should be met.

11. For the reasons given in paragraph 7 it is suggested that the control proposed will have to be exercised through somewhat wider international machinery than at present. It would be proposed, however, to retain the Combined Shipping Adjustment Boards as a clearing house for the matters affecting the two major partners in the scheme.

Washington , 7 March, 1944.

[Enclosure]

Brief Description of a Plan for Co-ordinated Use of Merchant Shipping During the Period Succeeding the Termination of Hostilities in Europe

1. The provision of shipping for the supply of all liberated areas as well as of the United Nations generally and territories under their authority and the provision of shipping for all the military and other tasks necessary for and arising out of the completion of the war in Europe and the Far East should be accepted as a common responsibility for all of the United Nations who control ships.

2. The Governments of the United Nations (and perhaps some neutral Governments, such as that of Sweden, if they are willing to participate), should undertake to maintain such powers of control over their own ships as would enable them to direct their use in accordance with the policy of a central authority, the International Maritime Administration.

3. The Administration might consist of a Council, representing all the participating Governments meeting as often as might be necessary. There would be two small Executive Boards, one in Washington and one in London. It is suggested that only those participating countries who bring a large amount of shipping into the plan should be represented on these Boards. The Shipping Authorities of other countries would maintain contact with the Executive Boards through such machinery as might be convenient (e.g. on the lines of existing “Allocation Committees”), for the purposes of (a) the discharge of the Boards’ functions regarding the allocation of the ships of those countries and (b) the discussion of allocation of ships by the Boards to meet the countries’ requirements for ships which have to be met by ships of other flags.

4. The function of the Administration would be to ensure so far as practicable that ships were available for all military and naval needs and all the essential requirements (including relief) of each of the United Nations, and for other approved purposes.

5. The International Maritime Executive Boards would work through the Shipping Authority of each participating country. The Shipping Authority might allocate ships under its own control wholly or partly to cover essential import requirements of the territories for which its Government has special shipping responsibilities. Ships not so allocated would be allocated in accordance with the decisions of the International Maritime Executive Boards to meet the demands not met by the allocations of the Shipping Authorities. The Boards would also be able to recommend any adjustments of the amount of tonnage allocated by the Shipping Authorities of participating countries which might be necessary to ensure the fulfilment of all the essential requirements of the United Nations.

6. The International Maritime Executive Boards would also determine the remuneration to be paid by the user of the ship for particular shipping services, so that ships of all flags performing the same or similar services would charge the same freights, and so that ships could be employed as required without regard to financial considerations.

7. The decisions of the International Maritime Executive Boards affecting shipping under the control of any participating country would be reached in consultation with and with the consent of the Shipping Authority of that country.

8. Control over enemy ships would be exercised by the Executive Boards through the authorities administering the Terms of Surrender.

9. Neutral ships not under the control of participating countries would be controlled by measures on the lines of the United States and British Ship Warrant Schemes, in accordance with the decisions of the International Maritime Executive Boards.

10. No elaborate new machinery would be necessary. The experienced personnel and the organisations of War Shipping Administration and the Ministry of War Transport, acting in close relationship with other shipping authorities with which they have been associated in the war, would in practice perform the functions of the Executive Boards. (These functions would be comparable to those now exercised by the War Shipping Administration and the Ministry of War Transport.)

11. Somewhat looser arrangements would be necessary to direct the employment of ships engaged in the coastal trades and short trades between countries but the principles of the plan would apply also to such ships.

12. The plan would apply to all types of merchant ships, including passenger ships, tankers and whale factories. It might also be extended, through suitable machinery, to apply to fishing vessels, whale catchers and other similar craft to the extent necessary to provide an authority capable of apportioning such craft available in certain areas between naval and commercial service.

13. The Administration should be constituted at such time as would enable it to commence effective operation on the general cessation of hostilities in Europe.

1. The Combined Shipping Adjustment Board consisted of two panels, one in Washington and one in London, each of which directed its own shipping pool while maintaining close liaison with the other; regarding establishment and membership of the Board, see Department of State Bulletin, January 16, 1943, p. 69.