Norfolk, Virginia, USA, 1946. Thousands of Liberty ships that were decommissioned following the end of WWII were kept in dock. Below: Commemorative photograph of the men involved in the Liberty sale in the US.

By Gelina Harlaftis*

It was April 1947,when a group of Greek shipowners traveled across the Atlantic to the United States with a guarantee letter from the Greek state to take delivery of the last 100 Liberty cargo ships sold on credit by the American government at the time. Liberty ships were built in the US during World War II, and at the end of the war, a number of these vessels were sold to individuals from the allied powers, and with backing from their governments, on exceptionally favorable terms. Greek shipowners represented the main buyers with the bulk purchase of these “blessed” ships, as they were regarded at the time, becoming the cornerstone of the Greek postwar shipping boom.

Techniques used by automakers for cheaper, faster production

Massive losses by the allies in the first two years of WWII rendered the construction of a large number of cargo ships imperative, and from 1941 to 1945, the United States Maritime Commission embarked on one of the biggest shipbuilding programs ever known.

The USMC, which has been founded in 1936 for the purpose of developing the American fleet, under Vice Admiral Emory Scott Land built some 6,000 vessels, the most popular of which was the Liberty. Within the four-year period of 1941-45, 16 shipyards across the US turned out 2,707 Liberty ships with a capacity of 10,000 deadweight tons (or 7,371 gross registered tonnage).

By adopting the assembly line technique used by the auto industry in Detroit, the Americans revolutionized shipbuilding, as they were able to prefabricate certain sections for each vessel at factories near the shipyards and then use them in the final assembly at the shipyard. Another innovation was welding — previously considered shoddy and unsafe — which was used in shipbuilding for the first time, replacing riveting, which required more time and manpower.

The fact that the Liberty ships were almost entirely welded rather than riveted together was a major disincentive for most European and American shipowners, especially given the fact that some of the first Liberties to set sail split in two before the technology and methodology was improved significantly, making the vessel not just a viable one but one which continued to sail the seas for the next 25 years.

Greek shipowners began purchasing the lightweight and durable ships in the 1940s and continued through the 1950s, with the peak of purchases coming in 1963, just after America’s embargo of Cuba signaled a sharp rise in freight rates.
The decline in the number of Liberties in the Greek fleet began in 1964, and the vessel type disappeared completely within a decade, though in 1966 alone, of the 722 Liberties at sea, 603 belonged to Greeks thanks to the initial decision of shipowners to buy them in bulk right after the war.

World’s biggest commercial fleet

Between 1946 and 1949 Greek shipowners purchased an additional 300-odd Liberty ships, which they registered under the most favorable authorities and which went on to bring them record earnings, especially thanks to the high freight rates during the Korean War.

The purchase of the Liberties became key to the development of the Greek fleet.

The Korean War in the early 1950s, which stoked fears of another world war and catapulted freight rates to great heights, brought record gains to Greek shipowners, both those who were already established as well as newcomers to the industry.

That was the golden era of Greek shipping and it was during that time that Greeks became the best customers of European and Japanese shipyards.

By the early 1970s, Greeks controlled the biggest commercial fleet in the world, under different flags and based in Piraeus — a distinction they still hold today. And it is the Liberty ships of 1947 that formed the foundations on which Greek shipping was built.

‘Gifts from the Greek people,’ says Onassis

In 1946, Greece’s commercial fleet was at a nadir after having lost 70 percent of its vessels in the war. While in 1939 it had an aggregate capacity of 1.8 million grt, by 1946 just 500,000 grt remained. In October 1945, Manolis Kouloukountis, a shipowner who enjoyed a good deal of prestige in his circles, wrote in an industry magazine that he would be replacing the ships he lost during the war mostly with Liberties.

In another article, Aristotle Onassis wrote that it was he who had first convinced Kouloukountis as to the wisdom of replacing the lost ships with Liberties.

The law allowing the sale of American vessels to foreign nationals, meanwhile, was passed through Congress in March 1946, while in July of that same year the USMC decided to sell ships for cash or on credit to allied governments or individuals from allied powers who could produce a letter of guarantee from the state.

A number of Greeks who had dollars in American banks bought Liberties and registered them in Panama. Others asked the Greek state to provide them with a letter of guarantee so they could buy a Liberty.

On April 9, 1946, the Greek government guaranteed a loan for the sale of 100 Liberty ships to a group of Greek shipowners. The guarantee was issued by the government of Constantinos Tsaldaris and negotiations for the purchase were conducted by the head of the government’s mission to the US, Sophocles Venizelos — whose brother, Kyriakos, was a shipowner — and Minister of Maritime Affairs Nikolaos Avraam, in cooperation with the president of Greek shipowners in New York, Manolis Kouloukountis. The letter of guarantee was lambasted by much of the press, which saw that the Greek state had little to gain at such a critical period for the economy. The opposition press wrote lengthy articles accusing members of the government of accepting bribes, showing favoritism and taking kickbacks. The wrath of the newpapers found its target in Avraam, who was — probably unfairly — accused outright of taking kickbacks.

The acquisition of 100 Liberty ships was followed by the purchase of seven T2 oil tankers (16,500 dwt), which had also been constructed in America during WWII and the government had put up for sale to allied governments or individual shipowners with a state guarantee, on the same favorable terms of payments as the Liberties. In order to compete with the other shipowners who had bought the Liberties, Onassis made an offer to the Greek government to buy seven tankers with cash and give a percentage of future revenues to the social security fund for veteran sailors (NAT) and other state-owned organizations. His proposal met with an immediate reaction from the other shipowners and the seven tankers were picked by the usual group: Nikolaos Lykiardopoulos, Stratis Andreadis, Stavros Livanos, Georgios Nikolaos, Markos Nomikos, the Chandris brothers and the sons of Petros Goulandris.

Onassis, who was cut out of the deal for the 100 Liberties, whose purchase was backed by the state and also for the tankers, responded to the tactics of the big shipowners by going public with his grievances. In a very revelatory memorandum that was circulated among shipping circles in 1947 and published a few years later, Onassis called the Liberties “gifts from the Greek people.” He estimated that within their first year, the 100 ships generated revenues of 9 million pounds sterling and net profits of 2.8 million pounds, meaning that the shipowners did not need the letter of guarantee, as they could have paid off the loan that the state guaranteed for 17 years within a period of four years.

The Liberties were purchased for 16.5 million pounds at one-third of their original asking price. Of that amount, just 4.1 million pounds, or 25 percent of the overall cost, was covered by the shipowners in cash and the remaining 12.1 million pounds was on credit extended by the American government with the Greek state guarantee. The loan had a maturity of 17 years at 3.5 percent interest.

* Gelina Harlaftis is a professor of maritime history at the University of the Ionian


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