Chapter Thirteen

The Damnedest Job in the World

ON JUNE 8, 1921, President Warren G. Harding sent his nominations for the United States Shipping Board to Congress. Six of the seven names stirred no debate. But the seventh—Albert D. Lasker, the proposed chairman of the board—drew partisan jeers from the Democrats. In the House, Representative Joseph W. Byrns of Tennessee rose to speak against Lasker:

I understand that he is the author of the phrase, “Don’t wiggle and wobble,” and possibly on account of that great service which he rendered to the last campaign, as well as on account of the distinguished success that he had made in his private business, the gentleman may be qualified . . .

[But] I became pessimistic, indeed, when I read that we are to have as chairman of the board a man who says he knows nothing about ships . . . What qualifications does the management of the Chicago Cubs enable one to bring to the direction of the affairs of the Shipping Board, or Quaker Oats or Van Camp’s pork and beans, or Lord & Thomas’s advertising agency, when the man begged to be relieved because he knew nothing about ships?

I should have liked to see [U.S. Steel’s president] Mr. [James A.] Farrell made chairman of the Shipping Board. It is a great descent from steel to soup and pork and beans. It is a great descent from brains to beans.¹

Lasker’s detractors had a point: he had a lot to learn about ships and shipping. But at the same time, those who assumed he was only a sloganeer—or that he lacked brains, or vision, or determination—had a lot to learn about him.

Following the victorious presidential campaign of 1920, Lasker knew that it was past time to revive his flagging agency. Always in the back of his mind, however, was the urge to serve—instilled in him by both his uncle’s example and his father’s exhortations. Almost immediately after the election, Lasker began trying to land a job in the incoming Harding administration. The job he wanted was Secretary of Commerce: then a relatively low-status cabinet post, but the one most suited to his background and interests. He made his case directly to Will Hays when Hays visited him in Chicago on November 6. But Hays had already told Harding that he wanted Commerce for himself.

Harding had announced on November 5 that he was taking a month’s vacation in Texas and Panama, and that he wouldn’t even start thinking about cabinet appointments before getting back to Marion in December.² Upon his return to Ohio, Harding began receiving a parade of job-seekers—not including Lasker, who maintained his stance of not bothering the incoming president. The process was choreographed by Hays—which didn’t bode well for Lasker’s cabinet hopes.

Through the beginning of the New Year, Will Hays continued to covet the Commerce post, and therefore kept fending off Lasker. But on January 17, Harding offered Hays the choice of Postmaster General or the chairmanship of the proposed Commission to Reorganize the Government. Hays settled for the Post Office job, and began encouraging Harding to consider Lasker for Commerce—and also for an alternative post:

Having in mind the long talk which we had the day in Marion we took the walk in the snow about your idea as to the importance of the Chairmanship of the Shipping Board.

No doubt you have thought of Albert Lasker in this connection. Should you find it impossible to appoint him Secretary of Commerce, he could do a hundred per cent job as Chairman of the Shipping Board. As I have thought over the matter since that time, continually he comes to mind in this connection. As you indicated to me then, I know, of course, that you realize the almost unexcelled business acumen and industry, loyalty and sheer efficiency which Lasker possesses. It is probable that you have considered him in this connection, but I have thought so much about it, I want to send this word.³

Harding, then vacationing in St. Augustine, Florida, wrote back positively about the idea of installing Lasker at the Shipping Board. “I have often thought of him in that connection,” the president-elect confirmed. “I have not yet taken the matter up but I will in due time. Frankly, I am just as anxious as you are to call Mr. Lasker to the service of the government, because I have very great respect for his ability and hold him in very high personal esteem.”⁴

Lasker—then on one of his rest sojourns to Pasadena, during which his six-year-old daughter, Francie, nearly died of pneumonia—still dreamed of the Commerce position. But there was one compelling reason why Harding might “find it impossible” to give Lasker the job: Herbert Hoover had gotten there first.

Hoover, the future president, had made a fortune as a mining engineer in the first decade of the twentieth century and then distinguished himself in public service, first by supervising Belgian relief efforts from London and subsequently by serving President Wilson as head of the United States Food Administration. At the end of the war, the internationally acclaimed Hoover returned to Europe as head of the American Relief Administration, and—although a lifelong Republican—was briefly considered as a potential presidential candidate by both parties in 1920. Harding, determined to bring the famous and formidable engineer into his cabinet, offered him the Commerce post in early February. His appointment as Secretary of Commerce was announced on February 24.

A scaled-down presidential inauguration, in keeping with the impression of simplicity that Harding hoped to convey, took place on March 4. Harding’s inaugural address was the first ever to be amplified, ringing out across the Capitol’s broad plaza and reinforcing the new president’s image of vigor—a striking contrast to the outgoing Woodrow Wilson, so enfeebled that he couldn’t even attend Harding’s swearing-in ceremony.

Just over a month later, on April 12, Harding addressed a special session of Congress to outline the policy initiatives of the new administration. Among dozens of other proposed programs, Harding declared himself in favor of building a “great merchant marine.”

At first blush, the private shipping industry wasn’t an obvious focus for a Midwestern politician. But those who had followed Harding’s Senate career weren’t surprised. Harding’s political mentor, Ohio senator Mark Hanna, had made a fortune in Great Lakes shipping. Harding also had been strongly influenced by Theodore Roosevelt’s and naval strategist Alfred Thayer Mahan’s advocacy of a powerful navy. Throughout the campaign, he had spoken forcefully in favor of U.S. shipping.⁵ “I want to acclaim the day when America is the most eminent of the maritime nations,” Harding declared in December 1920, between his election and his inauguration. “A big navy and a big merchant marine are necessary to the future of the country.”⁶

On paper, at least, the solution was already at hand. The Shipping Act of 1916—passed with one eye on the bloody war in Europe—had created a five-member United States Shipping Board charged with fostering a strong U.S. shipping industry, both for transoceanic and coastal trade. The Board was authorized both to build and to operate a government fleet under the auspices of a subsidiary called the Emergency Fleet Corporation (EFC). To placate the operators of private shipping lines, Congress stipulated that the government fleet had to be disposed of within five years of the end of the European war.⁷

President Wilson didn’t appoint the Shipping Board’s members until March 1917. But the United States’ entry into World War I the following month—combined with a congressional appropriation in June of $750 million to buy or build merchant ships—pushed the Board into a higher gear. (The appropriation was quickly increased to $2.9 billion: more than the value of the entire international shipping fleet in 1914.⁸) For the duration of the war, the EFC not only operated existing merchant ships, leased from private operators by the government, but also orchestrated a massive shipbuilding program, whereby private companies built merchant vessels and delivered them to the government.

It was a classic bureaucratic mess, exacerbated by the uncertainties of war. The EFC ordered some 18 million tons of shipping, of which only about 3 million tons were delivered before the Armistice. Another 4.5 million tons were canceled, but the remaining tonnage was delivered to the EFC between November 1919 and May 1922. All told, the EFC received 2,311 ships, the vast majority of which never saw service in World War I, and most of which had been built with taxpayer dollars on a rush basis at staggering expense.⁹ Ships that would have cost $75 per ton to build in the United Kingdom cost upward of $145 per ton to build in the United States. As President Wilson’s Treasury Secretary, William G. McAdoo, observed: “Appalling prices were paid for everything that had to do with a ship. Engines and other equipment were purchased at such a staggering cost that I fancied more than once that the machinery we were buying must be made of silver instead of iron and steel.”¹⁰

From the outset, the Board was inclined to sell its ships rather than operate them, because it was painfully clear that the government couldn’t run ships efficiently. But most of the ships were slow, coal-burning vessels, and a quarter of them were wooden-hulled; few operators wanted to buy ships that were already obsolete.

As the Republicans set out to make good on their campaign promises to cut government waste, the Shipping Board and its nearly useless fleet—then operating at a deficit of $15 million per month—seemed an obvious target. But for a president who wanted the United States to be the “most eminent of the maritime nations,” the evisceration of the merchant fleet and the destruction of the domestic shipbuilding industry were appalling prospects.

Sometime in the spring of 1921, Will Hays met with Albert Lasker to talk ships and shipping.¹¹ Hays told his former subordinate about the sorry state of the Shipping Board and explained that President Harding felt compelled to appoint the Board’s seven members as soon as possible.¹² The president planned to make these appointments on a geographic basis, and Harding wanted Lasker to serve as the representative from the Midwest. Lasker, still smarting at being snubbed for Secretary of Commerce, took offense: “I can remember, although I don’t think Mr. Hays knows to this day, the hurt I felt at being tendered what I felt to be a very minor position. Shipping was a subject that I wasn’t interested in, and which I had never thought about . . . I told Mr. Hays please not to pursue the matter with me.”¹³

In fact, Lasker had thought a good deal about shipping. Several months earlier, his friend John Callan O’Laughlin had guessed that Lasker would be offered either a seat on the Shipping Board or its chairmanship. At that time, O’Laughlin had advised Lasker not to accept a seat on the Board, but to accept the chairmanship if it was offered. It would be a “wonderful business problem,” O’Laughlin noted, and would position Lasker well when the inevitable cabinet reshuffles began.¹⁴

So Lasker turned Hays down. But toward the end of May 1921, President Harding invited Lasker to Washington.¹⁵ At a White House meeting on a Friday morning, Harding explained the difficult predicament in which he found himself. By law, he had to appoint a new Shipping Board. Rumors of corruption and cronyism at the Board abounded—rumors that Harding had helped fuel during the presidential campaign. Now, the president’s advisers were warning him to clean up the Board quickly, before it came to be seen as his mess. And to Harding, it went well beyond defensive measures: “It just so happens,” he told Lasker, “that the thing that interests me most in being president is the merchant marine.”¹⁶

The immediate problem, Harding continued, was that he couldn’t find anyone to run the Shipping Board. He had first offered the job to James A. Farrell, president of U.S. Steel, which then operated the largest fleet of tankers in the world. Farrell turned him down.¹⁷ Harding then approached Philip A. S. Franklin. Franklin was the president of International Mercantile Marine—the British-flagged but American-owned shipping combine controlled by J. P. Morgan—and Senate Republicans told Harding that because of the British flagging, Franklin couldn’t be confirmed. Harding next tried to recruit William C. Teagle, the president of Standard Oil Company of New Jersey, which owned one of the largest tanker fleets in the world. Teagle also turned the job down, explaining that his Rockefeller connections would make him too controversial.

And so, Harding said to Lasker, that brings me to my fourth choice: you.

Lasker immediately declined, citing his complete lack of knowledge of the world of shipping. But he made a creative counterproposal: he would serve as Teagle’s assistant on the Shipping Board, and he would work to make the public “enthusiastic about [Teagle’s] appointment.” Once Teagle was in place and accepted—a selling job that Lasker estimated would take no more than sixty days—Lasker would give up his assistant’s post and head back to Chicago.

Harding agreed. Teagle couldn’t return to Washington until Sunday night, so the president asked Lasker to stay in town. He could attend a White House garden reception on Saturday, Harding said, and go to church with him and “the Duchess” on Sunday. Lasker consented, although neither activity held much appeal for him. After the church service, the president teased Lasker about putting a five-dollar bill in the collection plate. “Albert,” he joked, “you’re setting a pretty steep pace.”

“I was so glad not to hear that the Jews killed Christ,” Lasker later joked, “I wanted to give the minister a reward.”¹⁸

That night, Teagle arrived from New York, and—under heavy pressure from a president and one of the world’s great salesmen—he agreed to take the job, on condition that the chairman of his board, Alfred C. Bedford, give his consent. Teagle left on the midnight train for New York, intending to seek an early meeting with Bedford. Lasker boarded the “midnight” to Chicago, delighted with his coup: he would only have to be in Washington for a few months, and then he would be free of the Shipping Board.¹⁹

But again, things took an unexpected turn: “I didn’t get to my home outside Chicago until late the following evening, and when I got there, my wife handed me a telegram from the president. He recounted that he had just talked to Teagle on the telephone, that Teagle had talked it over with Mr. Bedford, and that Mr. Bedford had assented. [But] while Mr. Teagle had the phone call in, Mr. Bedford had a heart attack.”²⁰

Harding released Teagle from his obligation, and once more needed a chairman, and quickly. He sent a telegram to Lasker, insisting that he rescue him from the difficult situation in which he now found himself. “I have every confidence that you can make it go,” Harding concluded. “At any rate I know of no one else to whom I may turn with a greater degree of confidence.”²¹

At this point, Lasker recalled, Flora had already made up her mind: “My wife handed me the telegram and said, ‘I couldn’t live happily with a man who would say no to an appeal like that last paragraph.’ That’s how I came to be chairman of the Shipping Board.”

There was more to the story. Flora had been disappointed to learn that Albert had turned the job down in the first place; she thought that a stay in Washington would be a mark of distinction for her husband—perhaps positioning him for future forays into politics—and might also be a good experience for their three children, Mary (then seventeen), Edward (nine), and Francie (five). Now the opportunity had arisen again “You have got to take it,” Flora told her husband.²² He capitulated.

In White House huddles with Harding on June 7 and 8, Lasker put a number of conditions on his service.²³ He would get the job done, he told the president, but he would serve no more than two years. No other department could interfere in his work. If the president didn’t like the way Lasker was running the Board, he could fire him. Meanwhile, Harding would support Lasker by paying high salaries to qualified shipping executives, which—Lasker emphasized—was the only way he could lure management talent into short-term government service.

Harding readily agreed to these terms. On June 9, 1921, Lasker and the six other proposed Board members were confirmed by the Senate.²⁴ Lasker’s confirmation represented a quiet milestone: after Louis Brandeis’s nomination to the Supreme Court in 1916 and Bernard Baruch’s appointment as head of the War Industries Board during World War I, Lasker became only the third Jew ever appointed to a high post in the federal government.

But Harding’s congratulatory telegram to Lasker was notable for its bleak overtones. “To be honest about it,” Harding wrote, “I have doubts about whether anybody who gets on the Shipping Board is entitled to congratulations, because you have now got tangled up with the ‘damnedest’ job in the world.”

Lasker told a reporter from Printer’s Ink that he would cut his ties to Lord & Thomas, turning over day-to-day management of the agency to Herbert Cohn, his long-time general manager in Chicago.

Lasker also talked to a New York Times reporter the day after his confirmation, and the story landed on page 1.²⁵ “It will be the purpose of the new Shipping Board to get the Government out of the shipping business as rapidly as possible,” the Times reported, in a voice that sounded very much like Lasker’s. “There must be nothing that smacks of permanent Government ownership or operation.”²⁶

From his first day on the job, Lasker found himself taking on water. “I got in Monday morning,” he wrote to a friend, “and inherited a great and bitter strike which is pressing for settlement, and is taking all my time.”²⁷ Lasker helped resolve the strike (by the Marine Engineers Beneficial Association) within a few days.²⁸

Things would not again be so easy. The Shipping Board was the “most colossal commercial wreck the world ever knew,” Lasker told a reporter.²⁹ It was also a complex wreck. On the day Lasker took office, the Shipping Board (through its Emergency Fleet Corporation) owned 1,522 steel ships and 454 wooden-hulled vessels—and that was only the visible tip of the iceberg.³⁰ The Board also had substantial investments in 200 shipbuilding and industrial plants, 19 drydocks, and 12 marine railways. It had spent $70 million on worker housing during the war; as a result, it had at least a partial stake in 5,555 houses; 72 apartment buildings; 62 dormitories; 20 combined apartment/retail complexes; 11 stores; and hotels, boarding houses, and cafeterias (4 each). In addition, it owned “vast quantities of steel, lumber, engines, boilers, winches, pumps, locomotive cranes, air compressors, and miscellaneous materials.”³¹

President Harding assembled the Shipping Board at the White House on June 17 to demonstrate his commitment to a strong merchant marine. In informal remarks to the press after the meeting, Harding praised his relatively youthful chairman. Lasker was not there because he was a shipping expert, Harding said; he was there because he was a “live wire” who would bring energy and ability to the job. In fact, Harding joked, Lasker was the “livest wire” he knew.³²

In addition to Harding’s strong endorsement, Lasker started the job with two other reliable allies. The first was the peripatetic John Callan O’Laughlin, who by 1921 was wearing multiple hats: filing reports as the Chicago Herald’s Washington correspondent and also working as the Washington lobbyist for a New York export company.³³ Lasker knew that he had to figure out Washington in a hurry and that he needed a skilled writer to help get his messages across to a skeptical Congress and public. O’Laughlin agreed to take a brief leave of absence from his several jobs to serve as Lasker’s personal assistant until the post could be filled permanently. Lasker later recalled the deal that they struck (and which he soon reneged on):

O’Laughlin was tied up with other things, but as a man imbued with a desire for public service, he said, “I’ll come with you and give you time to look around and get someone.” Which he did. Well, I let one week run into another, and about four weeks had passed, and O’Laughlin said to me, “Where is your other man? I want to get out. I have my work to attend to. I only did this as a favor to you.”

[But] he was invaluable. I was really double-crossing him and giving him the runaround. I didn’t want anybody else . . . So I just did nothing . . . O’Laughlin got on to that. At the end of six weeks he said, “Well, I have my successor, and I’m quitting.”³⁴

The successor O’Laughlin had come up with was Ralph Sollitt, by this point a vice president in a Washington bank. Lasker was astonished that someone of Sollitt’s caliber could be persuaded to join him at the Shipping Board as his personal assistant. In Washington, as Lasker later observed, a personal assistant to the chairman is the person “on whom they inflict all the humiliations that they would like to put on the board and daren’t.” So O’Laughlin had pulled off a small miracle.

The second key ally Lasker brought along was his lawyer, Elmer Schlesinger, who was appointed the Board’s general counsel. Schlesinger, too, faced daunting tasks. Supervising the Board’s seven hundred in-house lawyers—and also bringing in outside help from law firms in New York, Philadelphia, and Boston—he had to start working off an enormous backlog of claims against the Board: some seventeen hundred admiralty cases involving a total of something like $100 million.³⁵

Schlesinger also initiated a review of all the contracts that the Board had signed with private companies to operate government ships. Prepped by Schlesinger, Lasker publicly denounced the worst of the existing contracts as “the most shameful piece of chicane, inefficiency, and of looting of the Public Treasury that the human mind can devise.”³⁶ He had the offending contracts voided, and the Shipping Board took over direct operation of the vessels.

On June 24, Lasker called together the heads of the major shipping companies in New York and asked them each to turn over one of their best managers to Lasker’s enterprise. None of these three individuals, once identified, wanted to take the job; it required arm-twisting by President Harding to get them to agree. Lasker made sure that this recruitment process—intended both to infuse the Board with unprecedented talent and inoculate it against his own lack of shipping experience—got plenty of publicity.

During his visit to New York and on many subsequent occasions, Lasker made a point of cultivating the press. He spoke colorfully and with calculated candor, thereby earning friendly treatment even in papers (such as the New York Times) that were inclined to be suspicious of a Republican businessman-turned-bureaucrat: “The Chairman spoke of his regret that Mr. Teagle did not take the job, and remarked that the board had been changing chairmen faster than they change pitchers in a losing ball game, said he was going to do his best and if he did not succeed he would just go home very quietly and promise to pose for lots of pictures if, and after, he had made good.”³⁷

Two months later, when Lasker lost a battle in the House of Representatives and took some personal hits from his congressional adversaries, the Times editorialized sympathetically:

It is no reflection upon Mr. Lasker to say that the Shipping Board has never had such an original character at the head of it. He speaks out in a way that bewilders Congress . . .

Chairman Lasker has a marvelous fluency, and his eyes gleam and sparkle as he talks. ‘I have taken a man-killing job, but we will stick until our health breaks,’ this human dynamo of a Chairman told the committee. Congress may not believe Lasker, but he believes in himself.³⁸

Also in this start-up phase, the “human dynamo” persuaded Robert H. Montgomery—a partner in a large accounting firm—to come to Washington for four months to straighten out the Shipping Board’s books. This, too, was a staggering proposition. The Board employed some three thousand accountants when Lasker arrived in Washington, but it had no books. “There was no inventory,” he recalled. “There was no balance sheet. There was no operations statement. There was just in and out cash.”³⁹

In some cases, getting a handle on the Board’s affairs only made things look worse. “When we finally took an inventory of the ships we owned,” Lasker told Columbia’s oral historians, “we were one ship short! We couldn’t find a ship! Losing a ship is like losing a skyscraper.”⁴⁰

Montgomery discovered twenty-eight men who had been put on the Shipping Board payroll on the day before the Armistice—in November 1918, two and a half years earlier—and who had never done anything except collect their salaries. After two weeks on the job, Montgomery came to Lasker with a radical proposal: Start at the northeast corner of the accounting room, fire every third person, and see if anything bad happens.

Lasker fumed publicly about the state of the Board’s record keeping: “Had the books been kept with a view to cheating and deceiving Congress and the country, they could not have been kept in much different shape than they have been, and I measure the words I am using. It has almost worn me out physically and mentally to get anything from the books that could be considered complete.”⁴¹

While he was recruiting and deploying out-of-town talent, Lasker also had to get to know his fellow commissioners. The only two he had had prior contact with were Frederick I. Thompson, an Alabama newspaper publisher, and Los Angeles political operative Meyer Lissner, who—like Lasker—had been one of California senator Hiram Johnson’s prominent supporters. Admiral William S. Benson, the celebrated Naval officer who had headed the Board during part of the Wilson administration and into Harding’s tenure, agreed to stay on as a member. George E. Chamberlain was the former Oregon senator and chairman of the Military Affairs Committee who had been defeated in his 1920 reelection bid. T. V. O’Connor, president of the International Longshoremen’s Association, had a reputation for being one of the most powerful labor leaders in the country, and had been on Harding’s short list for Secretary of Labor. Edward C. Plummer, closely tied to the Hale political machine in Maine—Senator Frederick Hale was one of Harding’s closest friends in the Senate—served as the Northeast’s representative on the Board.

“I would say, myself included,” Lasker observed, “that only a democracy could spew up a board like that.”⁴² But in fact, it was an able board—mostly “outstanding men,” as Lasker later admitted.⁴³

What Lasker attempted to do in his first few months in Washington, beyond cleaning house, was to map out a plan that would bring together the federal government and the private shipping companies in an informal partnership. One essential piece of this plan, he decided—with ample input from ship operators—was a direct government subsidy of selected routes. In theory, this would increase the sale price of the government ships and pay for the subsidies.

Meanwhile, the Board would attempt to modernize its massive fleet. It would also undertake to build up trade on key routes, which it would eventually sell to private operators. At the same time, it would adopt policies to help strengthen the shippers, so that they would be in a position to buy ships and routes when the international economy recovered. All of these steps, taken together, would ease the federal government out of the shipping business.

But reality didn’t conform to the plan. In August, for example, the Board announced its intention to sell 205 of the mothballed wooden ships to a New York company for $430,500, or $2,100 apiece. This was far less than the $700,000 it had cost the taxpayers to build a single one of these ships, and a predictable howl went up in the media and among the Democrats in Congress. The sale was voided. “Wooden ships are about as popular with me as yellow fever,” Lasker grumbled to a Congressional committee.⁴⁴ When New York Yankees owner Jake Ruppert sent the two baseballs autographed by Babe Ruth that Lasker had requested, Lasker ended his thank-you note with a wry offer: “By the way, whenever you want a bunch of wooden ships, be sure to let me know.”⁴⁵

Meanwhile, there was a highly visible Shipping Board asset that Lasker had to contend with: the S.S. Leviathan, then tied up at Pier 59 in Hoboken, New Jersey.

This fifty-six-thousand-ton passenger liner—one of the largest in the world—had been built in Germany and launched in the spring of 1914 as the Vaterland. She had made only three transatlantic runs before war broke out in Europe in 1914, at which point she was interned in New York. Seized by Customs officials when the United States entered World War I, the Vaterland was rechristened Leviathan, stripped of her palatial interiors, painted gray, and pressed into service as a troop transport.⁴⁶ Between the spring of 1917 and September 1919, the great ship ferried some 200,000 U.S. troops to and from Europe, along the way acquiring the nicknames “Levi” and “Big Train.”

Her decommissioning as a Naval vessel that September kicked off a two-year soap opera centered on the hulk—immobile, tied to her Hoboken pier, rusting, plundered by thieves, and in constant peril of death by fire. Just keeping her mothballed cost the federal government $45,000 a month.⁴⁷ In November 1919, the Shipping Board announced that it would sell the Leviathan and two other seized German liners to International Mercantile Marine.

But to be put back into transatlantic service, the Leviathan would need to be completely rehabilitated—which was impossible because nobody in the United States had a set of plans for the ship. (The German yard that had built the seized ship demanded $1 million for a copy of the missing blueprints.) As a result, IMM’s chief designer, William Francis Gibbs, undertook the almost unimaginable task of reverse-engineering the 950-foot liner, drawing up a complete set of plans and bid specifications for rehabbing the ship. It took a hundred draftsmen the better part of a year and a half (and cost approximately $300,000) to produce 1,024 pages of blueprints and specifications.

By October, the Shipping Board was finally in a position to say exactly what it owned: a tally that ran to twenty-five thousand typewritten pages. It could account for assets that had cost just under $308 million to procure. The accountants estimated that these assets were fairly valued at $92.6 million, but that they had a forced-sale value of about $46.6 million.⁴⁸ Two departments were set up to oversee the sale of assets: one to sell ships and the other to dispose of the Board’s other surplus materials.

In the year before Lasker arrived in Washington, the Board placed approximately $938,000 in advertising, mainly to increase its freight trade, and mostly with little impact. (One problem was that the Board simply paid for ads written, designed, and placed by the ship operators themselves: hardly a Lord & Thomas formula.) This budget stayed fairly constant during Lasker’s tenure, but he redirected it for greater impact: first to sell off housing and other surplus materials, and—starting in December 1921—to help build the passenger trade on the Board’s liners. He also made the Board prepare its own ads, rather than simply pick up the tab.

When it came to advertising, the Shipping Board now lived by Lord & Thomas’s principles. “I do not believe in advertising merely to get general results, just to make your name known, or in advertising that you cannot measure,” Lasker testified before a Senate subcommittee in April 1922. He told of the nearly empty passenger liners that his Board had inherited, including a Pacific liner that carried only thirty-four passengers on its last run: a horrendous showing. His accountants had told him that bringing in an additional fifteen hundred passengers would pay for all the advertising and create much-needed momentum for American-flag liners. Within a few months of initiating the ad campaign, the Board had received twelve thousand requests for information and had lured four thousand visitors to its ticket offices around the country.

In effect, Lasker recast his challenge as a marketing problem. He and his colleagues at the Shipping Board had to create demand for its goods and services. This, of course, was what Lasker excelled at, but he had never had a “client” as amorphous as the Shipping Board’s. (Was he working for the president? For the taxpayer? For the shipping industry? For oceangoing travelers?) Nor had he had ever worked with an inherited staff, or faced hostile legislators, or been so far out from behind his accustomed curtain.

One of the more oppressive realities of life in Washington was the steady onslaught of political favor seekers and patronage hounds. Lasker had extracted a promise from the president that his Board would be spared undue political interference, and Harding mostly kept his pledge—but of course, others weren’t bound by it.⁴⁹ Throughout Lasker’s two-year term, he and his Shipping Board colleagues fielded an almost constant barrage of requests for favors from influential people in and out of Washington. Although politicians on both sides of the aisle publicly professed to despise the gravy train that the Board represented, privately they made sure to dip in their ladles.

In May 1922, for example, the Board got a request from Vice President Calvin Coolidge’s office to find summer jobs aboard a U.S. vessel for two college boys who were the sons of one of Coolidge’s friends. Lasker reminded the vice president that the Shipping Board didn’t actually employ any mariners; all it could do was veto an inappropriate candidate put forward by the private operators of those ships. Nevertheless, members of the House of Representatives sought shore-side jobs for constituents; senators sought raises for Shipping Board employees from their home states. Lasker had to tread carefully, in all cases; he knew he would need votes when the Merchant Marine bill that was then taking shape finally came before the House and Senate.⁵⁰

Throughout the fall of 1921, Lasker and his Board refined their long-term plan for the American merchant marine. Several junior members of Lasker’s staff drafted the bill, while Lasker and his fellow commissioners concentrated on building public support for it.

Finally, the plan was ready and the ground prepared. Harding addressed a joint session of Congress on February 28, 1922, and put the proposed “Merchant Marine Bill” on the table.⁵¹ He reviewed the history of the Shipping Board, including its recent record of trying to sell its ships while still operating many of the ships under its control. Lasker’s board had cut its losses, but was still running at a huge deficit. The time had come, Harding declared, to unload the government’s ships for whatever they could bring on the open market. After that, the government would subsidize both the construction and operation of private vessels.

In addition, Harding announced, passage of the Merchant Marine Bill would create a merchant marine reserve (of five hundred officers and thirty thousand sailors) for national emergencies, and would favor American-flag shipping in a variety of ways.⁵²

Initial reaction was mixed. The shippers who had played a major role in shaping the bill applauded it. More neutral observers offered qualified support, pointing out that the United States’ main competitors for ocean trade—especially the United Kingdom—heavily subsidized their fleets. Secretary of Commerce Hoover weighed in with his endorsement, as did the Senate’s acknowledged maritime expert, Wesley Jones.

But organized labor quickly voiced objections, viewing the proposed merchant marine reserve as a potential strikebreaking force. Representatives of the interior states expressed suspicions that this was yet another plot on the part of the wealthy coastal states to enrich themselves at the Midwest’s expense. Most ominous was the negative response of the agricultural lobby, which was always wary of government subsidies of industry, and soon the “farm bloc” in the Senate—a group of twenty-seven senators who tended to vote together on key agricultural issues—began voicing its skepticism.

Lasker spent three days in front of a joint Senate/House committee in the first week of April 1922, explaining and defending his bill.⁵³ Lasker stood up under a thorough grilling, occasionally suggesting that skeptical House members save their detailed questions for the Shipping Board experts who would follow him. “I’m not an expert on certain details,” he admitted. At one point, he described the Board’s overall record at operating ships as “rotten”; he later requested that the adjective be stricken from his testimony.⁵⁴

It was a bravura performance, but it could not overcome the mounting opposition to the plan. By mid-June, Harding and Lasker had to acknowledge that they didn’t have the votes they needed. House leaders pointed out that even if the bill passed in their chamber, it would almost certainly fail in the Senate. Harding reluctantly agreed to put the bill on hold during a six-week congressional recess, which started on June 30, 1922, and Lasker spent the summer of 1922 tracking newspaper editorials across the country. From that survey, he knew that he was losing the Midwest, Mountain States, and South, even as the coastal states rallied in support of the bill.⁵⁵

When the House reconvened in August, Republican leaders begged the president to put off action on the bill until more favorable political winds were blowing—and specifically, until after the midterm elections in November. Few in Congress wanted to run for reelection with an unpopular merchant-marine vote on their record.

In particular, in these early years of the nation’s uncomfortable embrace of Prohibition, few wanted to be associated with an especially thorny issue: the sale of alcohol aboard Albert Lasker’s ships.

The National Prohibition Act of 1919—popularly known as the Volstead Act—enforced the 18th Amendment to the Constitution, which prohibited the manufacture, transportation, import, export, sale, and possession of alcohol in the United States. Prohibition quickly proved unenforceable; illegal domestic production was complemented by the smuggled beverages that flowed across the borders from Canada and Mexico and washed ashore all along the coasts.

In May 1922, August A. Busch, president of St. Louis-based Anheuser-Busch, sailed from New York to Cherbourg aboard the S.S. George Washington, a Shipping Board liner. Busch’s huge brewery had taken a body blow with the onset of Prohibition; it was forced to diversify into product lines as diverse as truck bodies, ice cream, and baker’s yeast.⁵⁶ Upon arriving in France, Busch sent a letter to his son Adolphus in St. Louis, complaining that the Shipping Board was violating the Volstead Act by serving liquor aboard its oceangoing vessels. August enclosed a copy of the ship’s wine list.

On June 8, Adolphus forwarded his father’s letter and the offending wine list (“enumerating intoxicating liquors of every character”) to President Harding. He posed an unwelcome question to the president: if American ships were technically American territory no matter where they were in the world, wasn’t the government acting as a bootlegger aboard the Washington and other Shipping Board vessels?⁵⁷

Someone in St. Louis leaked a copy of the correspondence to a Chicago Tribune reporter, who immediately made it public. Harding, wanting nothing to do with this budding controversy, forwarded Busch’s letter to Lasker. In his response to Busch, Lasker explained that upon taking office, he had asked the Board’s general counsel, Elmer Schlesinger, to determine whether liquor could legally be sold aboard U.S. ships once they were outside U.S. territorial waters. Schlesinger’s opinion was that such sales were indeed legal, and Lasker therefore did not put a stop to liquor sales on the high seas.

Lasker then made his first mistake. Rather than simply responding privately to the Busches, Lasker—playing tit for tat—also made his end of the correspondence public. But his letter went beyond making his own case, and impugned the motives and the character of the Busches:

I believe you to be thoroughly selfish, and that you are acting in the hope of creating a public revolt against prohibition so that you may again revive the sale of your liquors, utterly regardless of how you might hurt the American merchant marine in your effort to create a situation to benefit your brewery.

It is, of course, notorious that the Adolphus Busch who founded your brewery was possibly the Kaiser’s closest friend in America, and that your family for many years has maintained a castle in Germany; your action in any event will not displease your German friends, whose greatest hope of a restored German merchant marine is in a hurt to American’s new-born merchant marine.

I refer to these extraneous facts not in resentment, but that it may be made clear that in my opinion you do not come before the bar of public opinion with clean hands.⁵⁸

Lasker’s accusation that the Busches were seeking to undermine Prohibition was accurate enough. In that effort, they certainly weren’t alone: Representative James A. Gallivan—a Boston Democrat, a self-described “wet,” and already an established tormentor of Lasker—read the wine list of the President Pierce on the floor of the House of Representatives, making the point that this was just a particularly noxious example of how rich people could drink and poor people couldn’t.⁵⁹ But by pointing to the Busches’ alleged German sympathies only four years after the end of a bloody war with Germany, and by invoking the much-despised Kaiser, Lasker went too far.⁶⁰

Lasker committed another, more damaging blunder in his letter to Busch: he argued that as long as foreign ships could serve alcohol on their transatlantic runs, U.S. ships had to do the same to stay competitive. Congressional opponents of the proposed subsidy plan pounced upon this assertion. If U.S. ships could compete only by violating the Constitution, should the taxpayer be asked to subsidize such lawbreaking? Would next year’s Congressional appropriation for the Shipping Board include a line item for the purchase of substances that ordinary Americans couldn’t legally possess?

Ultimately, the strategy that Lasker’s opponents seized upon was delay. First, Republicans persuaded Harding to stall action on the Merchant Marine bill until after Congress’s six-week summer recess. Then, upon their return to Washington on August, they demanded that he not bring the bill to a vote until after the November elections. Finally, the Harding administration took the liquor issue off the table. In a sweeping October 6 opinion, Attorney General Harry Daugherty stated that no ships could carry intoxicating beverages in U.S. waters. The only exception, spelled out in the Volstead Act itself, was foreign ships transiting the Panama Canal from one foreign port to another.⁶¹

Lasker was “stunned.”⁶² Approached by reporters, he said, first, that of course the Shipping Board would comply with the Justice Department’s opinion. (Telegrams were dispatched to all Shipping Board vessels, ordering them to immediately stop serving alcohol and to dispose of their liquor in the first foreign port they reached.⁶³) He then pointed to some of the practical problems that would grow out of the change. It would take months, or perhaps years, for the implications of applying U.S. law to foreign vessels to be worked out, during which time foreign vessels would gain a clear advantage over U.S. passenger liners.⁶⁴ Montreal, he predicted, would enjoy a shipping boom; West Coast cities like Seattle and Portland would suffer a “severe blow.” And because “the immigrant . . . uses wine and beer as the American uses butter,” the immigrant trade—which represented most of the westbound traffic between Europe and the United States—would shift entirely to foreign ships. “Today’s decision,” he concluded, “makes immediate passage of the subsidy bill more necessary than ever.”⁶⁵

But a vote on Lasker’s bill would have to wait until after the November elections.