Mediterranean Milkman

At 12:33 on the clear summer afternoon of June 27, the American Export passenger-cargo liner S.S. Excalibur nosed out of New York harbor into a collision with the inbound Danish freighter Colombia (TIME, July 10). As water poured through a 38-foot hole between the Excalibur's No. 2 and No. 3 holds, Captain Samuel Groves rang up full speed, beached her on the mud bottom off Bay Ridge, Brooklyn. Within an hour all 114 passengers had been taken off and American Export Lines began a furious race to get the Excalibur ready for sea again. In 39 days of continuous work, the line spent $1,000,000 on salvage operations, shipyard repairs', hotel bills for displaced passengers. Last week, the last two plates were welded on the Excalibur's hull; next week she sails for the Mediterranean.

Such swift work was nothing new for American Export. On-the-dot schedules for its "Aces" and 24 all-cargo vessels clear five ships from New York every week. In 1949 American Export completed 160 voyages, carried autos, lubricating oils, tires and EGA foodstuffs to the Mediterranean and India, hauling more than half of all U.S. ocean cargo to that area. Its return shipments were more exotic: monkeys from Calcutta, leopard skins from Yemen, Italian vermouth, Turkish tobacco. From its 1,490,548 tons of freight and 13,337 passengers, American Export rolled up a $5,900,000 profit. American Export, already closest rival of U.S. Lines for U.S. transatlantic passenger supremacy, hopes to clinch the title next year when its two new luxury passenger liners, the Independence and the Constitution, are put in service.

Glad Hand. American Export has steamed a long way from the depression days of 1935, when a syndicate headed by Manhattan's Lehman Bros, investment banking firm bought it lock, stock and whistle for a skimpy $1,500,000. Incoming Executive Vice President John Elliot Slater found the line loaded to the gunwales with mortgage debt, saw that one of its main assets was its European freight representative, John Francis Gehan. Bustling, ebullient "Jiggs" Gehan, known as "a man who does business with a handshake instead of a contract," found cargo for American Export ships in so many South European, African and Near Eastern ports that the line came to be called the "Milkman of the Mediterranean." His business deals were legendary: when a Danish line tried to steal his customers by offering below-cost freight rates on flour, Gehan dug up so many flour orders for his rival that the Dane had to raise his rates to avoid ruin. Gehan wangled so much tobacco trade that the line cornered some 80% of all the Turkish-type tobacco freight to the U.S. Slater sold off slower ships, bought faster ones, by 1939 was showing a profit without help of a U.S. subsidy. Two years later, shipments to the European war bulged Export's profits to $13.7 million.

Ten Went Down. In World War II, all of Export's "Four Aces" served as attack transports. The Excalibur, Exeter and Excambion were sunk; the Exochorda remained in the Navy as the U.S.S. Harry Lee. Seven other Export vessels went to the bottom. But when peace came, the line replaced them all with modern World War II ships, sailed full speed into the postwar transatlantic trade which EGA made prosperous. American Export did so well that in January 1949 it paid back $5,300,000 to the U.S. Government, every penny of subsidy it had received in ten years.

By the time EGA-supported cargoes end Dec. 31, 1951, Slater hopes that his passenger business will be big enough to fill the gap; he expects the Constitution and Independence to gross from $10 to $12 million a year, nearly tripling present passenger revenues. If global war intervenes, both new ships can be quickly refitted to haul 5,000 troops apiece.

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