As discussions continued on how, and how much, the government would pay for the new ship, United States Lines president John Franklin was meeting with the Maritime Commission and Gibbs & Cox to review the two construction bids received on the project. Both were far higher than the original $50 million Franklin had insisted upon when he had told the Gibbs brothers he would support Design 12201.
Newport News Shipbuilding and Dry Dock Company came with the low bid: $67,350,000. When hotel equipment (dishware, linens, galley equipment), Gibbs & Cox’s design fee, and a small change order allowance were added in, however, the total estimated cost of construction came to $71,081,100.
The big number would kill the deal, something William Francis Gibbs could not accept. Now was the time to call on his brother Frederic’s accounting skills. On December 14, 1948, the brothers met with General Franklin and other United States Lines executives at Frederic’s office at One Broadway.
To prepare for the meeting, William Francis had asked Newport News for the cost if Design 12201 were a run-of-the-mill, twin-screw vessel—a “usual ship”—without any national defense features such as reinforced decking, Navy-grade wiring, and additional speed. The yard had come back with a figure of $44,470,700.26 It was clear that the following of stringent military design standards—fireproofing, extra compartmentalization, and Navy-grade steel plating—caused the ship’s cost to spiral frighteningly upward, and that it was only fair that the government should make up the difference.
Frederic then presented a financing scenario that allowed the United State Lines to keep its contribution at $25 million. First, the government would provide a 45 percent construction subsidy for building that $44.47 million “usual ship.” This amounted to $20,011,815. The United States Lines would then contribute $24,458,885. Then, under the Merchant Marine Act of 1936, the government would pay for all extra “national defense” features—all the improvements that differentiated Design 12201 from that “usual ship”—which would come to $26.61 million. The totaclass="underline" $71.08 million, the Newport News bid.
On April 7, 1949, the four members of the United States Maritime Commission began a three-day marathon meeting with General Franklin and William Francis Gibbs. On the agenda was a verdict on the construction of an American superliner. Also around a big table at the United States Lines’ offices at One Broadway were the shipping company’s directors, including Vincent Astor, United States Lines’ vice president Raymond Hicks, company counsel Cletus Keating, and William Blewett, executive vice president of Newport News Shipbuilding. A large model of the ship (but one showing nothing below the waterline) sat perched on a shelf at one end of the conference room.27
After some pressure from the commission, General Franklin agreed to up his company’s contribution to $28,087,216, with $1.3 million going toward the “national defense features.”
One stumbling block was not yet addressed. The contract included an escalator clause that allowed for additional costs of about $5 million. The commission suggested the United States Lines should bear the brunt of those costs. This could push the shipping line’s share above $33 million.
United States Lines balked. Company lawyer Keating said, “Mr. Commissioner, you have named a price which, in my personal opinion, is astronomical.”
“I’ve had the devil’s own time processing these figures to reach that low price,” Maritime Commissioner Grenville Mellon replied in frustration. “If you really mean that, I am willing right now to reconsider the whole thing.”
General Franklin weighed in with a little diplomacy. He argued that any increase in cost due to escalation would cause his company directors to balk, as “our company has a limited net worth.” What Franklin wanted was a commitment to a subsidy of at least 50 percent, and that the United States Lines’ financial commitment would remain fixed.
Commissioner Mellon threw up his hands and caved. “I think Mr. Keating’s request is very extreme, General,” he said. “I don’t want to delay this thing further,” he added, offering to provide the fourth vote needed for the project to go forward.28
One commissioner still objected. Raymond McKeough, disgusted with what he saw as sloppy analysis, maintained that Franklin had simply fixed $28 million as the maximum amount his company would contribute, period. It was, as McKeough vented later, “a reckless abandonment of orderly oversight to the required determinations,” as well as a “neglect of an objective, unprejudiced, and uninfluenced professional search for the correct answer.”29
Still, McKeough grudgingly voted in favor of the project. He would later say that he changed his vote under pressure.
The actual cost of the new superliner would eventually balloon to $79,422,469.30
A few hours after the meeting concluded, the Maritime Commission fired off a telegram to Newport News Shipbuilding. The contract was closed and construction was to start as soon as possible.
In the end, the United States Lines, the private corporation that would profit from the vessel, would put up only 35 percent of the total construction cost. The U.S. government would pay the rest, as well as an operational subsidy to offset the high costs of American labor. The government agreed to fund the national defense features that would make the project financially feasible and, it appeared, legally possible.
William Francis Gibbs’s lifelong dream was now one major step closer to fruition. His shrewd negotiation skills had shepherded the project through more than three years of complex negotiations. But he did not live to negotiate contracts—he lived to build ships.
The contract for the construction of the superliner was signed on May 8, 1949, at the headquarters of the Maritime Commission. Those signing were Grenville Mellon of the Maritime Commission; J. B. Woodward Jr., president of Newport News Shipbuilding; and General John M. Franklin, president of the United States Lines.
A model of Design 12201 was then brought out for the members of the press, who immediately began taking notes and snapping pictures.
After forty years of planning, setbacks, and persistence, William Francis Gibbs was on the cusp of building the superliner that he first conceived in his parents’ attic. Everything was falling into place: he had won not only the support of the nation’s biggest shipping line, but the signed financial commitment of the United States government. He was not going to let the project die again, not now.
Although he was exultant, Gibbs stood stone-faced and silent by the model’s side. A New York Times reporter asked Gibbs how long had he been designing the vessel. “I began jotting down notes for a superliner in 1916,” he responded flatly, “but two wars got in the way.”
Rumors were circulating that the Maritime Commission and the United States Lines were both reeling from sticker shock but had decided to go through with the deal anyway. “Sources close to the transaction,” the New York Times reported shortly before the contract was signed, “expressed the opinion yesterday that the difference in figures between the company and the commission would be too small to militate against it.”31
There was also a lot of speculation in the press about the name of the new ship. Suggestions appearing in the newspapers included Mayflower, Columbia, even American Engineer.
It was at the May 8 contract signing that the official name was announced: United States.32