Of all the big liners, only the United States Lines’ Leviathan consistently lost money. The reason was simple: her bars were dry, and Americans flocked to the foreign ships instead. “One thing I learned,” joked her captain, Herbert Hartley, “was that in passing the Volstead Act, Americans had voted dry but they traveled wet.”
As Leviathan approached New York harbor at the end of each voyage, liquor found in steamer trunks was seized by the master-at-arms and dumped overboard.
“I am sure no less than a million dollars worth of the world’s choicest whiskies are resting at that hallowed spot on the floor of the Atlantic,” Hartley remembered.4
Some wondered whether this era of extravagance was sustainable, but by the late 1920s, the European shipping companies, flush with profits from the economic boom, were making big plans to build a new generation of liners—with heavy government support.
The French Line took the first step. Among rich Americans, the company had a reputation for elegant service and superb cuisine. Its president, Jean dal Piaz, had a strict policy of not building sister ships: “Vivre, ce n’est pas copier, c’est créer (To live is to create, not to copy),” he declared.5 By 1927, dal Piaz unveiled the 43,000-ton Ile de France. On the outside, she was boxy and traditional, and she was no record breaker. It was her interiors that stunned the world: she was the first big liner to be decorated in the so-called Art Deco style. There was no mimicking of European palaces aboard the new French flagship. She was a ship of the Jazz Age, full of bright colors, indirect lighting, and streamlined furniture. The chic Ile de France quickly stole the cream of the American tourists away from the aging Cunard and White Star liners.
At the same time, the Germans started construction on two giants that would be contenders for the Blue Riband. They would be named Bremen and Europa.
Even Washington was taking notice. “There is no question,” declared one New York congressman at a Shipping Board hearing in early 1927, “that the United States Lines is hampered by reason of their failing to have enough ships of the Leviathan type, or the large type.”6
A new race was shaping up, and William Francis Gibbs had no intention of sitting on the sidelines.
Now in his early forties, he surveyed the transatlantic passenger fleet and realized that the big liners built before 1914 were showing their age. Cunard’s Mauretania, still the holder of the Blue Riband, had just turned twenty. Although still the fastest ship on the seas, she was small and cramped compared to bigger rivals, lacked private bathrooms and other luxuries demanded by modern travelers, and rode rough in heavy seas. Booking a ticket on Mauretania seemed more like a necessary inconvenience if one wanted to cross the Atlantic in less than five days. None of the other prewar giants—Olympic, Majestic, Leviathan, Aquitania, Berengaria—could approach her speed. And they too were starting to have mechanical and structural problems as they aged.
Gibbs knew that a new generation of European liners—the two German ships in particular—would push aside the dowagers, while the hapless, government-controlled United States Lines was in no financial position to compete against what was coming. By the late 1920s, the management team Lasker had set up to run the government-owned United States Lines was coming apart. Under intense political pressure from Republicans, the Shipping Board decided to sell Leviathan and other passenger ships to a private operator.
Given their track record, William Francis and Frederic Gibbs assumed they had the best chance of buying the United States Lines. The Gibbs brothers teamed up with J. H. Winchester & Company, a New York–based shipping firm, to put in a bid. In it, they argued that to compete with the weekly sailing schedules of the foreign lines, Leviathan had to have two fast running mates. Constructing two such ships was impossible, they pointed out, because the government would not put up the subsidies needed to do it. Instead the brothers offered to buy Leviathan from United States Lines for $10 million, and at the same time modernize two seized German liners: Mount Vernon and Monticello, both of which sat idle after finishing World War I trooping duties. With new engines, the brothers concluded, the two old four-stackers could become a duo of medium-sized liners that could make 23 knots and keep pace with the bigger flagship. Gibbs had admired these two vessels since his college days—the former Kaiser Wilhelm II and Kronprinzessin Cecilie were sleek, rakish ocean greyhounds that he felt deserved a new lease on life. Once the three liners were producing steady cash flow, the brothers felt they could successfully lobby for the construction of one or more superliners.
Although the Gibbs proposal was initially well received, a new player with better political connections but no experience in shipping entered the bidding. Paul Wadsworth Chapman was a New York promoter who had recently financed the construction of the largest passenger airplane yet built, but he had little knowledge of the shipping business. By buying up all the ships of the United States Lines, he hoped to create a sea and air transportation network between America and Europe.
Chapman offered just over $16 million for Leviathan and her smaller fleet mates, and promised an initial payment of $4 million in cash, with the remainder to follow. His proposal also called for a government loan of $42 million to build two new 25-knot superliners, the same size as Leviathan but able to compete with the two much-anticipated German superliners then under construction. In a few years, Chapman promised, his privatized United States Lines would have a three-ship, American-flagged weekly transatlantic service that could take on the Europeans.7
In February 1929, Gibbs testified before the Senate Commerce Committee that Chapman’s two Leviathan-class superliners, to be built with a $42 million loan from the government, would lose millions of dollars annually. Chapman’s offer, Gibbs said, is “analogous to a man offering to pay another $4,000,000 on condition that the latter lend him $42,000,000.”8
What’s more, Gibbs argued, a Chapman default would do serious damage to the growth of America’s merchant marine, by weakening investor confidence in marine securities.9
Confident in his analysis, Gibbs held firm to his $10 million offer. But he found himself hard against the chairman of the Shipping Board: Thomas V. O’Connor, the former head of the International Longshoremen’s Association, who had become a favorite of ship owners. O’Connor allied himself with Chapman and threw him the sale. A day later, O’Connor savaged Gibbs in the press. Gibbs’s statements, the chairman said, “are the sort of thing that gives aid and comfort to our foreign competitors.”10
Chapman, now in possession of Leviathan and the rest of the United States Lines fleet, then hired as his naval architect a man for whom Gibbs had no respect: Theodore Ferris, the former chief designer for a failed World War I project, the Emergency Shipbuilding Program, set up to build hundreds of wooden freighters to ship men and supplies to the front. The expensive enterprise was a complete disaster, and Ferris was accused of corruption. An outraged Ferris resigned under a cloud and returned to private practice. When appointed as head of the Emergency Fleet Corporation, he was paid the handsome sum of $2,500 per month, and according to a Senate report, the “reputation which the position entailed would insure Mr. Ferris of one of the most profitable practices throughout the entire world and this practice would have continued as long as he chose to remain in business after he severed his connection with the government.”11