rafrM^
University of California Berkeley
Regional Oral History Office University of California
The Bancroft Library Berkeley, California
San Francisco Bay Maritime History Series
Thomas B. Crowley
Crowley Maritime Corporation: San Francisco Bay Tugboats
to International Transportation Fleet
An Interview Conducted by
Miriam Feingold Stein
1973 - 1975
Copyright (T) 1983 by the Regents of the University of California
All uses of this manuscript are covered by a legal
agreement between the Regents of the University of
California and Thomas B. Crowley dated September 14, 1979.
The manuscript is thereby made available for research
purposes. All literary rights in the manuscript,
including the right to publish, are reserved to The
Bancroft Library of the University of California Berkeley.
No part of the manuscript may be quoted for publication
without the written permission of the Director of The
Bancroft Library of the University of California at
Berkeley.
Requests for permission to quote for publication
should be addressed to the Regional Oral History Office,
486 Library, and should include identification of the
specific passages to be quoted, anticipated use of the
passages, and identification of the user. The legal
agreement with Thomas B. Crowley requires that he be
notified of the request and allowed thirty days in
which to respond.
It is recommended that this oral history be cited
as follows:
Thomas B. Crowley, "Crowley Maritime Corporation:
San Francisco Bay Tugboats to International
Transportation Fleet," an oral history conducted
1973-1975 by Miriam Feingold Stein, Regional Oral
History Office, The Bancroft Library, University
of California, Berkeley, 1983.
Copy No._
THOMAS B. CROWLEY
MARCH 1979
. THOMAS CROWLEY
Son Francisco's 'tugboat king'
Thomas Crowley
- Head of S.F.
Maritime Empire
Thomas B. Crowley Sr., chair
man of a 400-vessel maritime em
pire and a fixture on the San Fran
cisco waterfront for 61 years, died
yesterday of prostate cancer at the
University of California Medical
Center in San Francisco. He was
79.
Mr. Crowley, who was also the
chief executive officer of the pri
vately held Crowley Maritime Cor
poration, inherited the company
founded in San Francisco in 1892
by his father, Thomas.
Known as the tugboat king for
the familiar fleet of Red Stack tugs
on San Francisco Bay, Mr. Crowley
was a tough and highly respected
old-tune businessman, full of sto
ries about the sea and often unsen
timental about them.
"They talk about the romance
of the sea, the romance of this and
that," he told a Chronicle reporter
in 1991. "I think that is a lot of
bulls---."
His worldwide empire, valued
,at $1.2 billion, employed 5,000
workers and included ships, sight
seeing boats, ferries, tugs and even
a special barge built to carry mo
lasses. On San Francisco Bay, Mr.
Crowley vessels moved as much as
1 million barrels of oil a month
from large tankers to refineries.
Even in his later years he was
known as "Young Tom," in defer
ence to his father, who founded
the operation by paddling out in a
rowboat with supplies to meet ar
riving tall ships.
In 1991, Mr. Crowley closed the
last two big shipyards on the Oak
land Estuary, maintaining that
they were no longer profitable and
that there were too few tugs and
barges to keep the shipyards open.
"There is just no work any
more to support the shipyard," he
said at the time. "So why continue
to lose money with it? It's a tough
cracker. What am I supposed to do,
sell the company? Who the hell
would buy it? You can't sell a tug
boat company."
Mr. Crowley's most visible op
eration on San Francisco Bay was
the Red and White fleet, a 10-ves-
sel armada of sightseeing boats
and ferries and the largest passen
ger service on the bay. From its
headquarters at Fisherman's
Wharf, the fleet carries 2.5 million
passengers a year to Alcatraz, Sau-
salito, Tiburon, Angel Island, Val-
lejc and around the bay on hour-
long sightseeing cruises.
Bridge District feud
Mr. Crowley frequently came
broadside to broadside with the
ferries operated by the Golden
Gate Bridge district, which he
viewed with contempt He engag
ed in a pointed, well-publicized dis
pute with the district over ferry
docking rights in Sausalito.
"Golden Gate," he once said,
"threw $50 million in government
funds down a rat hole."
Union leaders regarded Mr.
Crowley as a tough but fair em
ployer.
"I always thought he was a
good guy to deal with," recalled
Paul Dempster, past president of
the Sailors Union of the Pacific.
"He didn't give you nothing but
he'd work with you, and you'd
come up with a happy conclusion."
From childhood, Mr. Crowley
knew he would inherit the family
business. He said he "never want
ed anything else."
SAN FRANCISCO CHRONICLE
July 8, 1994
On-Job Education
He left Stanford University in
1 1933 before completing his degree,
preferring the education he would
receive aboard ship and in his fa
ther's office He assumed the lead
ership of the company hi 1970, up
on the death of his father, and
managed its expansion into an in
ternational firm doing business in
the Mideast, Southeast Asia, South
America and the Caribbean.
"Mr. Crowley was known indus
trywide for his business acumen,
his spirit of taking on challenges,
and his pride in the capabilities of
his employees and companies,"
said a statement released by the
company.
Under the leadership of father
and son, the company pioneered
petroleum barge service on the Pa
cific Coast and performed the first
commercial resupply of the gov
ernment's Distant Early Warning
Line installations hi the Arctic. In
the 1970s and 1980s, the company
began providing barge services be
tween the East Coast and the Ca
ribbean and liner services to Cen
tral and South America. Through
out his long career, Mr. Crowley
tirelessly promoted U.S. shipping.
Its numerous business lines are
conducted through two major op
erating units: Crowley American
Transport Inc., based in Jackson
ville, Fla., and Crowley Marine Ser
vices Inc., based in Seattle.
Awards
In 1970, the U.S. secretary of
Defense awarded him the National
Defense Transportation Award.
-Earlier this year, he received the
Coast Guard Foundation's Distin
guished Service award.
Mr. Crowley was a member of
the American Bureau of Shipping
and the trustee chairman of the
Ralph K. Davies Medical Center.
He was a past board member of the
American Institute of Merchant
Shipping, the American Water
ways Operators and the National
Ocean Industries Association.
Surviving are his wife, Molly;
his son, Thomas B. Crowley, Jr.,
president and chief operating offi
cer of Crowley Maritime Corp.;
and his daughter, Adrienne Crow-
ley of Pleasant Hill.
Funeral services will be held
Monday at 3 p.m. at St. Ignatius
Church, Parker and Fulton streets,
San Francisco.
Steve Rubensteln
TABLE OF CONTENTS Thomas B. Crowley
PREFACE i
INTRODUCTION ill
INTERVIEW HISTORY v
I SHIPOWNERS AND MERCHANTS TUGBOAT COMPANY AND CROWLEY
LAUNCH AND TUGBOAT COMPANY 1
The Original Shipowners and Merchants Tugboat Company 1
Thomas Crowley, Sr. , Crowley Launch and Tug, and Shipowners
and Merchants 6
Shipowners and Merchants Towboat Company, Ltd. 11
Buying Army and Navy Tugs 14
Present Operations of Shipowners and Merchants 16
Docking a Ship: Fees and Alternatives 22
II PUGET SOUND TUG AND BARGE COMPANY 28
Origins of the Company 28
Alaska-British Columbia Transportation Company 30
Puget Sound-Alaska Van Lines 32
Alaska Hydro-Train 36
Servicing the DEW Line 39
III OIL TERMINALS COMPANY 49
General Functions 49
The Alviso Terminal 51
The Crescent City Terminal 52
The Meridian and Eureka Terminals 54
The Petaluma Terminal 55
IV PACIFIC BARGING COMPANY 58
V PRUDHOE BAY-ALASKA PIPELINE 62
Servicing the Alaska Pipeline 62
The Ecological Impact of the Pipeline 64
The Canadian Alternatives 65
Arctic Marine Freighters 67
Oregon Coast Towing 71
VI HARBOR TUG AND BARGE
Developing Passenger Service on the Bay 73
Golden Gate Scenic Steamship Company 76
Relations with the Golden Gate Bridge and Highway District 78
Ferry Service to East Bay Points 81
Hauling Sugar Beets and Gravel 82
Colorful Characters 83
VII SAN PEDRO TUGBOAT COMPANY 86
Origins of the Company 86
The Tugboats 88
Crowley Launch and Tugboat Company's San Francisco Bay
Operations 93
Capt. Ernest Mohr 98
San Pedro and Long Beach Harbors .100
VIII BAY CITIES TRANSPORTATION COMPANY 102
Origins of the Company 102
Barges and Tugs 105
Barging Molasses 109
Independent Iron Works a Competitor? 110
Cargo Traffic on San Francisco Bay 111
World War II and the Tugboat Industry 113
Comments on the State of the Shipping Industry 114
IX BULK HANDLERS INCORPORATED 116
X SMITH-RICE COMPANIES 120
Origins and Growth of the Companies 120
Salvage Work 124
XI PACIFIC DRY DOCK AND REPAIR COMPANY 128
Origins of the Company 128
Comments on Finances 132
Present Operations 134
XII MERRITT SHIP REPAIR COMPANY 136
Origins of the Company 136
Present Operations 139
Ship Building 142
XIII FOREIGN OPERATIONS 146
Rig Tenders 146
Puerto Rico Marine Lines 147
Carriba Hydro-Train 147
Hauling Cargo to Hawaii 148
Other Foreign Involvements 150
XIV LABOR RELATIONS 152
Prior to and after the 1934 Strike 152
Strikes, 1939-1959 154
Some Effects of the Garmatz Act 158
The 1969 Strike 162
Union Politics 165
Relations with the ILWU 167
The MEBA 168
Comparison with East Coast Conditions '169
XV GOVERNMENT REGULATION AND ASSISTANCE 172
Dumping Wastes 172
Alaska Oil Pipeline 173
Federal, State, and Local Regulatory Agencies 176
Navy Competition 182
Changing Transportation Legislation 184
Helpful Congressmen 186
Professional Associations 187
XVI BACKGROUND 188
Education 188
Effects of the Depression 189
Early Work Experience 191
Family 194
XVII OIL PIPELINES 196
XVIII CROWLEY MARITIME CORPORATION 200
XIX LEGAL DIFFICULTIES 201
The California Inland Pilots Association Files Suit 201
The Crow ley Counter-Suit 203
The Murphy Tugboat Company Suit 203
A Further Suit 205
Campaign Contributions and the Golden Gate Ferry 208
A Long Term Waterfront Lease 211
XX THE GOLDEN HINDE 214
APPENDICES 217
INDEX 235
PREFACE
San Francisco Bay Maritime History Series
The following interview is one of a series of tape-recorded recollections
devoted to the history of San Francisco Bay in the first half of the twentieth
century. This was an especially colorful, active period of momentous tech
nological and sociological change in American maritime affairs, and San
Francisco Bay reflected the period well. For the economic historian, the
reminiscences illustrate the changes in San Francisco Bay that took place
in response to worldwide maritime conditions and to changes in California;
for the maritime buff, they are full of the bustle, color and variegated
characters of a lively shipping port serving deep-water, coastwise, and river
and bay traffic.
Thanks are extended to the Crowley Launch and Tug Company for permission
to research in their extensive scrapbook collection and for the help and
advice given by members of the firm over the years that the series has been
in progress. Our gratitude also to the staff of the San Francisco Maritime
Museum for the use of their historical documentation and for their help in
checking out names, dates, and facts.
The Regional Oral History Office was established to tape record auto
biographical interviews with persons prominent in the history of California
and the West. The Office is under the administrative supervision of James
D. Hart, director of The Bancroft Library.
Willa K. Baum
Division Head
Regional Oral History Office
1 June 1983
Regional Oral History Office
486 The Bancroft Library
University of California at Berkeley
ii
San Francisco Bay Maritime History Series
Thomas Growl ey, Recollections of the San Francisco Waterfront, 1967.
Thomas B. Growl ey, Crowley Maritime Corporation: San Francisco Bay Tugboats
to International Transportation Fleet, 1983.
Captain William Figari, San Francisco Bay and Waterfront, 1900-1965, 1969.
Captain William J. McGillivray, Tugboats and Boatmen of California,
1906-1970, 1971.
Captain Ernest W. Winther, Observations of San Francisco Bay From
1900-1971, 1972.
iii
INTRODUCTION
In 1963 Mrs. Willa Baum from the Regional Oral History Office telephoned
to inquire if my father Thomas Crowley would be interested in giving an
interview to be taped. After consulting with my brother and sister I
approached my father with the idea and to my delight he reacted with enthu
siasm. This request came at a perfect time in his life as he had the desire
to reminisce at leisure. Oral history interviews benefit the questioner and
the subject as well, often the two become sympathetic friends.
Our family was pleased to have an invaluable record of a life we knew
to be colorful and unique in its successes.
Ten years after the first interview the oral history office persuaded
my brother Thomas B. Crowley to record his memories on tape. Though he was
busy, he subsequently recorded an extensive recollection.
My purpose here is to introduce in a small way each of these personali
ties as I knew and loved them. Thomas Crowley, my father, died at age
ninety-three, and Thomas B. Crowley, my brother, is a very vigorous and active
sixty-eight-year-old today.
My father was a gregarious, forceful, and charming man. He was
opinionated without being pedantic, warm to human needs, stubborn with
adversaries, and uniquely interesting to the opposite sex. His sense of
humor and vibrant personality kept him in constant demand at his many clubs
and on the golf course, but business was his great love. Vacations were
never a means to relax for him, but travel to a foreign country was appealing.
A man with very little formal education, he was extremely well read in areas
of history and literature. Some of his favorite books were Rise and Fall of
the Roman Empire, The Autobiography of Pulitzer, and all of Dickens and
Shakespeare. He had endless intellectual curiosity and believed one should
constantly try to improve oneself whether it was speech or manner. He never
hesitated to criticize; with a knack for frankness he could also be very
prejudiced.
Newspapers were a very important means of communication for the tour
boat business, so many of Dad's cronies were reporters on the Call Bulletin
and Chronicle. Among the names I remember were Coblentz, Gleason, Annie
Laurie. On his frequent trips to New York he often stayed at the Lambs Club,
an all-male sanctuary for writers. A woman writer was a rarity and he grew
to know Mrs. William Brown Mahony, publisher of the Washington Post, and
admired her tremendously. With his gregarious ways he also enjoyed politick
ing in Washington, B.C.
One of the mainstays of the Crowley Launch & Tugboat Co. was Dad's
secretary Miss Marie Carey. She was an imposing woman who seemed six feet
tall (she was about 5 '6") and she ran the payroll with an iron hand, giving
iv
the men free advice as she doled it out. In the days when red nail polish
was only worn by women of a shady type, Miss Carey shocked everyone by
wearing brilliant red polish completely out of character with her severe
manner .
Tom, my brother, has always been studious and knowledgeable, though a
somewhat shy person. Fascinated by physics and astronomy, he would have
made an excellent research scientist. My father was careful to nurture Tom's
interests but emphasized the business was to be his sole career. Tom's
interest in mathematics prepared him well for the computer age and the very
latest of high tech equipment has been used at Crowley Maritime Corporation
under Tom's management. Industrious, efficient, disciplined, brilliant
all those adjectives would apply to him, giving his father cause to be very
proud of the results.
Tom was able to balance his life with outside interests like skiing and
flying so business wasn't quite the strain it was for Dad.
Constance Crowley Bowles
March 1983
San Francisco, California
INTERVIEW HISTORY
The San Francisco Bay Maritime History Series began with an oral history
of Thomas Crowley, Whitehall boatman and founder of Crowley Launch and Tug,
which became the dominant tug and water transport company on the Pacific
Coast. Thomas B. Crowley takes up the story where his father left off.
Under the umbrella organization called Crowley Maritime Corporation,
Thomas B. Crowley has expanded the business established by his father into
a fleet of 200 tugs and 400 barges which provide transport services from the
Caribbean to the Mediterranean, and from the Persian Gulf to the Philippines
as well as major domestic ports on the West and Gulf Coasts. Crowley Maritime
also runs tourist boats to Alcatraz, Angel, and Catalina Islands, has the
largest trucking fleet in Saudi Arabia, a construction company in Alaska,
and drills for oil in the Java Sea.
Mr. Crowley was first asked to participate in the project in January
1969. The intention was to record his comments on the changes in the San
Francisco waterfront, and the developments in the various Crowley businesses.
However, Mr. Crowley, occupied with the waterfront strike of 1969, declined.
He also replied that he was not really interested in the distant past. He
was approached again in 1971. A third and successful attempt to involve Mr.
Crowley in the project came from Willa Baum, division head of the Regional
Oral History Office, in March of 1973. She invited him to be interviewed,
while assuring him that the Office was not interested exclusively in the
distant past, but is also concerned with the recent past and the present.
When the letter arrived, Mr. Crowley was laid up with an injured leg
from a skiing accident. Forced to slow down from his hectic schedule, Mr.
Crowley agreed to be interviewed. Interview research and planning were
brought into full swing by Miriam Stein, who met with Mr. Crowley to outline
the procedures and topics of the interviews. Seven interviews were conducted
by Ms. Stein between April and June of 1973. Mr. John Jenkins, who started
with the Crowley enterprises in 1920, participated in the first interview.
Ms. Stein recorded the sessions at Mr. Crowley 's office on Pier 50,
overlooking San Francisco Bay with a view of the Bay Bridge and downtown
buildings. The office was filled with sea memorabilia models of sailing
vessels, an old sea lantern, and photographs of tugs. Ms. Stein recalled Mr.
Crowley as an energetic, wiry man with grey-white hair, blue eyes, and his
leg in a cast.
The interviews covered numerous topics including the Crowley enterprises
in San Francisco Bay, in San Pedro, and Puget Sound; servicing Prudhoe Bay
and the Alaska pipeline; labor relations; and government regulations and
assistance. The eighth and final interview took place on April 1, 1975.
vi
The first two chapters of the transcript were sent to Mr. Crowley for
review on July 24, 1975 as a prerequisite to final typing. Two years later,
the Regional Oral History Office was still attempting to get the corrected
transcript back. In the interim, Mr. Crowley had been occupied with company
business, traveling extensively, and spending time with his young daughter,
hospitalized following a serious accident. Mr. Crowley 's schedule continued
to be too heavy to allow for the usual review procedure. In 1980, a plan
was worked out between Regional Oral History Office editor, Catherine
Scholten, and Mr. Crowley 's executive secretary, Joanna DeMaris, for only
the most crucial and otherwise uncheckable questions to be referred to Mr.
Crowley through Ms. DeMaris. The user is advised that there may be errors
of facts or misspellings of names since Mr. Crowley did not review the
manuscript personally.
Introduction and photos were provided by Mrs. Bowles, daughter of Tom
Crowley and sister of Thomas B. Crowley, and a co-shareholder in Crowley.
Maritime Corporation.
1 June 1983
Regional Oral History Office
486 The Bancroft Library
University of California at Berkeley
I SHIPOWNERS AND MERCHANTS TUGBOAT COMPANY AND CROWLEY LAUNCH
AND TUGBOAT COMPANY
[Interview 1: April 6, 1973]
The Original Shipowners and Meirchants^ Tugboat Company^
Feingold: You were telling me a little bit last week about Shipowners and
Merchants, and I wonder if you could tell me the story again.
Crowley: Prior to 1883 the major tugboat company in the port of San
Francisco was run by Captain Millen Griffiths. He was referred to
as "Old Grif" and was thought to be quite a pirate. He would have
his tugs cruising out on station outside the [Golden] Gate so
that when a sailing ship showed up, they would offer a tow to
bring the ship into the harbor. If the ship got too close to shore
with no wind and was in danger of drifting ashore, he would charge
them an exorbitant price, and if the ship was well off shore and
could possibly sail in the Bay, he would charge a very cheap price.
He followed the same policy when it came to competition.
When there was competition in the Bay, he would charge very cheap
prices until he stifled or bought out the competition and then he
would charge exorbitant prices after that.
There was an old story that he had a big reciprocating steam
pump sitting on the dock that he used to rent out for emergency
pumping of vessels . One Sunday a vessel got into trouble and the
owners could not find Captain Griffiths, so they took his steam
pump and pumped their vessel out. They came in on Monday and told
him that they appreciated the use of the pump, and he said that
they took it without him knowing anything about it. He said,
"That's perfectly all right. I'll send you a bill." And he sent
a bill for $25,000 for rental of the pump.
Feingold: He certainly was a pirate.
Crowley: The various shipowners and different merchants in San Francisco
got fed up on this sort of treatment and finally decided, in 1883,
to form a company called the Shipowners and Merchants Tugboat
Company, which would have a fairly widely held stock ownership by
various shipowners and merchants in San Francisco, to render an
efficient, economical and long-term service to the port. This
company was promoted by a large group, but the most important one
of the group was William Bab cock who was also president of the
San Francisco Drydock Company, which originally built the first
graving dock at Hunters Point. He had the foresight to notice the
foundation structure of Hunters Point and the deep water adjacent
thereto, which is most unusual in San Francisco Bay, and started
the San Francisco Drydock Company and built this graving dock.
Feingold: Now what's a graving dock?
Crowley: A graving dock is a dock that is dug into the land with a floating
gate to close off the sea and then the water pumped out. A ship
that is to be dry-docked is put into the graving dock while it is
flooded with the gate out of place; then the gate is flooded into
place, set in place, and the water pumped out of the dock.
Feingold: It operates like a lock, then.
Crowley: Yes, quite similar to a lock, only it can be pumped completely dry
so that underwater work can be done on a vessel. This graving
dock was later bought by Charles Schwab of the Bethlehem Steel
Company and they installed a second graving dock at Hunters Point.
These two docks were later bought by the navy, and this was the
beginning of the San Francisco Bay Naval Shipyard.
[consults the company's first minute book] Getting back to
the Shipowners and Merchants Tugboat Company, the original meeting
was held on April 27, 1882. A Mr. Hopkins was president, Mr.
Cheeseborough secretary. A Mr. Crawford and Mr. Babcock, Mr.
McNear and Mr. Balfour were all present. The first nine directors
were McNear, Kentfield, Meyer, Balfour, Crawford, Cheeseborough,
Bomeister, Blair, Babcock. [these names may be spelled incorrectly]
Feingold: Was it usual at that time to have so many directors?
Crowley: A company would have nine directors, depending upon the ownership
of the company. If a company was fairly widely held by a group
of say a dozen people getting together, and they all have an eighth
of the company, you'd probably have twelve directors. That's not
unusual .
Feingold: Then all these people owned a part of the company?
Crow ley: Yes. Subscriptions for 505 shares were made; and a committee of
Meyer and Balfour were appointed to confer with the foreign
shipowners, and Knowles and Cheeseborough with the American
shipowners. It was all kind of a mutual sort of a thing.
As of June 26, 1882, another meeting was held. There were
1,815 shares subscribed to at that time. How much do you want me
to go on in connection with this Shipowners and Merchants Tugboat
Company?
Feingold: Well, I don't know if it's necessary to read that into the tape.
Perhaps at some point that might be a nice addition to the
maritime collection, or at least we can put it in an appendix and
refer people to it, and say that it's at your office.
When did the company build its first tug?
Crow ley: [looking through the minute book] That's what I'm looking for.
On the 14th of July, 1882, the company sent out specifications to
the Risdon Iron Works and others to build a boat for them similar
to the wooden steam tug Rescue and similar to the wooden steam
tug Wizard that were then in existence.
Feingold: Just as an aside, how do they name tugs?
Crowley: Well, the Shipowners and Merchants Tugboat Company traditionally
named their tugs I believe their first tug was the Sea Witch.
They named them Sea Witch, Sea Lark, Sea Queen, Sea Prince, S_ea
Fox, and so on, but all with a "Sea" preceding it. The company
still continues to name its tugs on that basis. The last two tugs
the company built were the Sea Flyer and the Sea Swift in 1970.
Probably there are some people that withdrew and some more
that came in, and it changed around quite a bit. [referring to
minute book] Oh, here is a meeting mentioned: on August 9,
1882, a meeting was held at which was considerable discussion on
the possibility of buying out Goodall, Perkins & Company's towboat
company as an alternative to building a new tug. A committee was
named to confer with Captain Griffiths and Messrs. Goodall, Perkins
and company and report as early as possible as to the practicality
of a satisfactory arrangement with those gentlemen.
At a meeting on August 14, 1882, a proposal was read into the
minutes signed by Millen Griffiths to sell the steam tugs for
which we had the agency for $310,000. These were the tugs Monarch,
Res cue , Wizard, Neptune, Etna, Katie, Lookout and Water Witch.
Then they decided to approach Captain Griffiths with a definite
proposal to pay him $250,000, part in stock and part in cash, for
his tugboats and contracts, with an engagement on his part not to
re-enter the business for three years.
Crowley: At another meeting on August 25, 1882, Captain Griffiths turned
them down saying he had made a satisfactory number of contracts
and secured all the business he wanted, so would not sell them
his tugs. So the company proposed to give a contract with Messrs.
Hinckley, Spires and Hayes for building a new tugboat. [these
names may be spelled incorrectly]
Feingold: Was that the Sea Witch?
Crowley: I think it was but let me look and make sure. [reading minute
book] This makes very interesting reading here, all the problems
of starting a new tugboat company. Here's an item here of interest:
on Wednesday, August 30th, 1882, Mr. Staples responded that as
far as Firemen's Fund Insurance Company, which he represented as a
stockholder in the Shipowners and Merchants Tugboat Company, was
concerned, they would be quite satisfied to go on with the business
as a corporation, where no direct profit should be earned on the
principal. The benefits given the shipping interests of this port
by organized opposition to the tugboat monopoly hitherto existing
would more than compensate any money risk involved in supporting
the corporation. I think some of them blew hot and cold about it.
Feingold: Well, it sounds like they were taking risks.
Crowley: Oh yes. They were taking terrible risks because they were bucking
up against this fairly unscrupulous guy who knew the game from A
to Z and had a whole fleet of tugs and could give them a pretty
rough time.
Feingold: Your father was not a member of this group; he came later.
Crowley: He was only born in 1875. He was eight years old when this was
happening .
You asked about the name. At a meeting on February 14, 1883,
the president suggested naming the company boats as early as
possible for the information of shipowners so that a circular may
be issued. And so they named a committee of two to suggest a list
of nine names from which the new boats be named, and a distinctive
style of coloring for the smokestack, and to report as early as
possible. They authorized Tug Cordage Company to make some
hawsers to use on the boats. The Sea King was the first tug.
Captain Galloway had been elected to command the vessel, now being
finished by Hinckley, Spires and Hayes for the company, at a
salary of $125 per month, and board, or $150 per month without
board.
Feingold: I wonder how that rated in the salaries of the day?
Crow ley: Oh, that was pretty good.
[reading from minute book] "Identical motion carried in
favor of Captain Lucky," substituting tug Sea Witch, now building
by William Deakin, for the Sea King. Apparently they built the
Sea Witch and the Sea King at about the same time. I thought the
Sea Witch was the first one, and the King the second.
Feingold: Were they the ones who made the decision to paint the smokestacks
red?
Crow ley: Yes. The regular meetings of the board of directors were held in
the office of Balfour.Guthrie and Company. Balfour Guthrie is a
British company for shipowners and what not, and they had agents
out here. In fact, Balfour, Guthrie did a lot of financing of
early California fanning and were quite prominent in California.
Balfour, Guthrie's headquarters in California were just west of
Antioch. I forget the name of that town. They had very extensive
farming interests in California. They were headed up in Great
Britain, with British capital.
There are comments here about Mr. Page wanting remuneration
for services to the company, and they here decided to give Mr.
Page $400 for the year. This Mr. Page I think was the Page that
was finally president of Fireman's Fund. His son John Page is now
head of General Steamship Company. [looking through minute book]
Yes. Charles Page, attorney for the company. Now he may be the
grandfather of John Page, I don't know. Charles Page was connected
with the company up until 1918. John Page told me about some kind
of hooking he got from the company I don't know what it was all
about. Jack Page would be very much interested in reading this;
I'll take him to lunch one of these days.
Feingold: Yes , that would be interesting to check out.
Crowley: Charlie Page, Jack Page's father, was president of the Fireman's
Fund Insurance Company. So much for that.
Here's a meeting on May 9, 1884, where they have authorized
John H. Dialog [name may be misspelled] of Camden, New Jersey, to
build them a boat. Dialog was the foremost tug builder in the
United States. This was [to be] their first iron tugboat. The
Sea King and the Sea Witch had been wooden tugboats .
Oh, here we are. [reading from minute book] At a meeting on
March 18, 1884, Captain Redmund and Captain Gray were called in to
consult. After some conversation with Messrs. Redmund and Gray
about the [inaudible] most suitable for a new tugboat for the company
and also about the value and suitableness of the tugboat Escort #2
for the company's work, Captain Redmund was instructed by a motion
to get a model with specifications of all the machinery.
Thomas Crowley, Sr. , Crowley Launch ami Tug^, and Shipowners
and Merchants
Crowley: This is the first notice that I have of Captain Gray, who later
joined the company and became the general manager. Captain Gray
ran the company under the direction of the board of directors and
William Babcock up until 1918 when a new syndicate with my father
came in and bought them out.
The buy-out was occasioned by the fact that William Babcock
had died somewhere around 1915 and his estate wanted to settle up
various matters. Also the company had made a great deal of money
during World War I, and they wanted to get their money out of the
company. So that's why they sold the tugs to the new Shipowners
and Merchants Tugboat Company, started in 1918, which my father
was interested in.
Feingold: Had your father already been in the tugboat business?
Crowley: Yes. My father had a Whitehall boat and he'd been into Whitehall
boats since he was old enough to get in a boat I guess, about 1887
or so, up until 1898 when he built his first gasoline-powered boat,
Jenny C. This was the start of the Crowley Launch and Tugboat
Company. He first started a partnership, I believe, by the name
of Crowley Brothers, and then later on incorporated the Crowley
Launch and Tugboat Company.
[requests Crowley Launch and Tugboat Company minute book]
The Crowley Launch and Tugboat Company engaged in the tugboat
business with launches and tugboats prior to the 1918 takeover [of
Shipowners and Merchants]. In fact, the first large steam tug
that the Crowley Launch and Tugboat Company had was the H.H. Buhne.
It was built by one of the early settlers of Eureka in Humboldt Bay;
in fact, the boat was built in Humboldt Bay. It was a wooden
steam tug.
[interruption]
Feingold: You were talking about the tug that was built in
Crowley: Oh, the H.H. Buhne, the steam tug, was built in Humboldt Bay. I
think she was built in 1863 or something like that way back.
That was the first steam tug that my father had. He operated it
out of Crowley Launch and Tugboat Company. There was also another
steam tug, the Pris cilia, that he had. These were somewhat
competing with Shipowners and Merchants Tugboat Company up until
1918.
Feingold: These were wooden tugs also?
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Crow ley :
Feingold:
Crowley :
Feingold:
Crowley:
Yes. These were all wooden tugs with scotch boilers and a compound
reciprocating condensing steam engine. [refers to minute book]
The Sea Wolf was built in 1869, and according to this she was
built in San Francisco. She was built for H.H. Buhne, a prominent
merchant up there in Eureka.
We had been talking about the Crowley Launch and Tugboat
Company. These are partly the original minutes written in longhand
by Kevin Turner, who is a very interesting character, an old guy
who was a certified public accountant and then went into coffee
roasting business and was a friend of my father's for many years.
Did you know him?
Yes . I knew him well. He used to have a little coffee roasting
plant up here on that street that goes up and curves around,
right up here.
Now this shows the meeting on the third day of March, 1924,
Pier 14. So this is not the original minute book of the company.
"The annual meeting of stockholders, written on, etc." Well, this
doesn't give us any really early information. I don't remember;
maybe Mr. Jenkins remembers the year Crowley Launch and Tugboat
Company was started. [confers with John Jenkins in adjoining
office] Crowley Brothers was a partnership started in 1890-
something or other, and then the Crowley Launch and Tugboat
Company was incorporated March 8, 1906. The stockholders were
Thomas Crowley, David Crowley and John L. Crowley.
[John Jenkins enters] This is Miss Feingold; this is Mr.
Jenkins. Mr. Jenkins came with the company in 1920, so he has a
better familiarity with it than I have. [to Mr. Jenkins] I just
thought you might want to kick it around.
That's a very good idea. You can both fill in the gaps.
I was explaining how the Shipowners and Merchants Tugboat Company
got started and how Dad got interested in Shipowners and Merchants
in 1918. And then we switched over to, "Well, when did he start
Crowley Launch and Tugboat Company?"
He started in the Whitehall boats; and then in 1889 the first
boat with an internal combustion engine was the Jenny C . What
year was that, do you know? That was about 1898 or something like
that?
Jenkins :
It could have been 1897 or 8 along in there somewhere,
should have another minute book around here.
You
Crowley :
Feingold:
Crowley :
Feingold:
Crowley:
Jenkins :
Crowley:
Jenkins :
Crowley:
Feingold:
Jenkins :
Crowley:
Yes. I can't find the other minute book,
back to 1920.
This one only goes
Jenkins :
Crowley:
Was that Jenny C the initial "C" or Sea?
The initial C, for Jenny Crowley which was my father's sister.
In your father's interview it's spelled both ways.
Well, my father probably stated in his interview what boats was
that the first boat he had, do you remember?
I think it is.
Yes. Then they had some other boats, and so on. These Merchant
Vessels of the United^ Spates show these old boats. This is 1918.
Some of those boats might have still been around by that time.' I
don't know whether Jenny^C was probably gone by then.
I never did see the Jenny C myself.
Well, she was probably gone by then. It's down on that blown up
picture behind the receptionist's desk downstairs.
Yes. It's hard to see the boat part, because the receptionist is
sitting right in front of the boats. You can see the office.
Yes. Well, you can see the name of the boats.
Crowley standing on one of the boats.
You can see Mr.
Well, anyway, the Jenny C was the first boat. Then, the first
steam tug that was the H.H. Buhne, wasn't it? They later named
it the Sea Wolf. That was the first boat that Crowley Launch
acquired, as far as a steam tug; and that was acquired sometime
around 1910, I guess, 1908.
Before 1910, more like 1908.
She was built in 1869 for H.H. Buhne in Humboldt Bay and he used
her up there for years towing sailing ships. He had the H.H.
Buhne Mercantile Company or something, and used to tow sailing
ships into Humboldt Bay. Then my father bought her in about 1908.
I presume it was after the fire because he never mentioned the
steam tug being available during the earthquake and fire; it was
mainly just launches.
Well, anyway, then the Crowley Launch and Tugboat Company,
after they acquired the H.H. Buhne, also acquired the Priscilla.
What other steam tug did they have, do you know?
Jenkins :
Crow ley:
Jenkins :
C row ley :
Jenkins :
Crowley :
Jenkins :
Crowley:
Feingold:
Crowley :
Feingold:
Crowley:
The old Crowley 20 was never a steam tug, was she?
No, she was the Christopher^ Columbus, a fish boat built in 1898.
She was the Chris tojpher ^Columb us owned by Paladini, or something
like that. When they bought her they took the steam plant out of
her and put a diesel in her. That was sometime in the late twenties,
I'd say about 1927 or so
I thought it was a little before that, around 1925.
Maybe it was. Well, the only steam tugs I remember are the
Pris cilia and the H.H. Buhne. Then he bought the Shipowners and
Merchants Tugboat Company in 1918.
When did they buy Harvey and Roberts' water boat? She was
called the Water Witch or the Water Queen what was her name? It
was Harvey and Roberts' barge originally; it was a cement barge
that used to take water around to the ships.
Then the little steam tug Water Nymph was her name. She was
a water boat; she ran around here for many years delivering water
to ships in the stream. [looking through book] Water Nymph was
built in 1881 and she carried water out to the ships for an outfit
called Harvey and Roberts which my father bought in about '27 or
'26, something like that. Did Crowley Launch buy that?
Yes. Crowley Launch.
It'd be in the Crowley Launch minutes then I guess.
You may not find it. Turner probably wrote it up.
Well, are you interested in that?
Well, if it's in the minute books, it's something we can look up
later, or someone could always refer to the minute book.
Well, getting on with the history of the company, Shipowners and
Merchants Tugboat Company operated after 1918 in competition with
the Henry C. Peterson Company and the Rolph Navigation and Coal
Company. They also had steam tugs on the Bay. Then in the late
'20s
Just a minute,
company?
Is that the Rolph of Mayor Rolph? Is that his
Yes. In the late '20s and the early '30s, when the Depression
hit, Shipowners and Merchants Tugboat Company chartered the tugs
of Rolph Navigation and Improvement Company and the tugs of Henry C,
10
Crowley: Peterson and Company and laid them up, but operated the remaining
fleet of steam tugs on a revenue-sharing basis until the mid '30s
when those tugs were returned to their owners and Shipowners just
operated their own tugs from there on in.
Shipowners also competed with the Bay and Ocean Towing
Company which was started in about 1934. They operated a diesel
tug Rustler. The Bay and Ocean Towing Company operated the
Rustler and the Kadiak, which was an old wooden steam tug that
had been a cannery tender of the Alaska Packers and was operated in
'34 and '35 by Bay and Ocean Towing Company.
They went broke, and the California Towing Company was formed.
They brought an old tug by the name of Sunshine and another one by
the name of the Sunbeam out of the East Coast, and they operated
for three or four years and went broke also.
Feingold: Who took over their tugs?
Crowley: They were scrapped. They were junk anyway. They were steel tugs
that had outlived their usefulness on the East Coast and were
brought to the West Coast by a fellow named Tom Cleverton who is an
insurance broker uptown; and he talked a guy by the name of Lloyd,
a retired businessman I forget what business he's been in but
Lloyd invested his life savings in the tugboat business and
Cleverton cleverly lost them.
Feingold: Living up to his name.
Crowley: Then the war period came along. Just prior to the war period, in
1939, Britain was attacked, and the pride of the Shipowners and
Merchants tugboat fleet, the tug Sea Giant, former navy tug U.S.S.
Kondecook [name may be spelled incorrectly], was purchased by the
Ocean Towing and Salvage Company of London, England, and was taken
back to England. Sea Giant was at Dunkirk and various other
activities. She miraculously lasted all during the war. They
never bombed her or sunk her or anything. They finally scrapped
her after World War II.
She was a very powerful tug, a very fine tug built by the
navy shortly after World War I, and Shipowners purchased her in
the ' 30s because the navy had decided to overhaul the engine and
the boilers and they'd taken all the engine apart; and then they
decided half way through that they didn't have enough money to
finish the job. So they dumped all the spare parts in the hold of
the boat and sold her up at Mare Island.
11
Crowley: We bought her and took her down to the shipyard, took all the
parts out and put her back together again. We put a new oil
burning system in that would enable her to burn oil better and
deliver more power. She was a very powerful steam tug.
Shipowners and Merchants Towbo^t Company, Ltd.
Feingold: In the notes that you wrote up on the Shipowners and Merchants you
said that in 1929 the Shipowners and Merchants Towboat Company,
Limited was formed.
Crowley: Yes. Well, let me go back, because I'd forgotten that. After
1918, the Shipowners and Merchants Tugboat Company continued on.
At the end of World War II, there were four large wooden tugs
under construction over at the Stone Shipyard in Oakland. They
were being built by the U.S. Shipping Board.
The Shipowners and Merchants Tugboat Company decided to buy
them in order to give them some good, powerful, large ocean-going
steam tugs and also to prevent somebody else from getting them.
So, they bought them and completed those four tugs at Stone Shipyard;
and those were named the Sea Monarch , the Sea Lion, the Sea Ranger,
and the Sea Scout. Those were 150 foot tugs with a thousand
horsepower steam engine with two [inaudible] boilers in them. They
performed excellent work through the '20s and '30s and they were
requisitioned by the government at World War II and taken over by
the federal government.
The Sea Monarch was sunk in 1924 on Puget Sound in collision
with a French steamer. In 1926 or '27 the tug Sea Lion was lashed
up to an Isthmian Line ship going up Oakland Estuary with Captain
Eddy Groper on the bridge of the ship handling the job. Captain
Eddy Groper was the tugboat captain. The bridge tender on the
Webster Street swing bridge across Oakland Estuary, between Oakland
and Alameda, got confused and started to close or open the bridge,
and the ship ran into it and knocked the bridge off its foundation.
This was quite a catastrophe. The admiralty attorneys for
the tugboat company recommended that a new corporation be formed
and used as an operating company in order to limit the liability
of the company that owned most of the assets, such as the tugs.
So in 1929 a new company was formed with a capital of $50,000
called Shipowners and Merchants Towboat Company, Ltd. This company
bareboat chartered the tugs and operated those tugs from the old
company.
Feingold: What does bareboat mean?
12
Crowley: Bareboat means it's an admiralty expression meaning that you just
charter the bareboat and you assume all the responsibilities,
liabilities, and privileges accorded an owner under admiralty laws
that prevail internationally and in the United States. One of
the most important is the right of limitation of liability of a
shipowner.
In other words, if some corporation operating a tugboat which
they own or have bareboat chartered, if they can prove to the
court that the tug is in a fit and seaworthy condition, manned
with a competent crew, and the shipowner has used all due diligence
to embark on the voyage with a seaworthy vessel, then if a
catastrophe occurs to the vessel or others, the shipowner or the
bareboat charter has the right of limiting his liability to the
vessel in its damaged condition. If a tugboat goes out and is
seaworthy at the commencement of her voyage and knocks down a
bridge and causes millions of dollars worth of damage, the bareboat
charter or owner of the tug can go into admiralty court and petition
for a limitation of his liability to the value of the vessel in
her damaged condition. This is very important in connection with
operating a vessel.
This principle originated in Phoenician law whereby when a
vessel embarked on a voyage the shipowner had no control over its
actions after it left the dock; it was entirely up to the captain
or crew on the vessel. So in order to encourage shipowners or
people who build ships and engage in commerce, the Phoenicians
decided that once the vessel embarked on the voyage, if she was
originally seaworthy, then the owner had done everything he could
to prevent an accident, and if an accident occurred, he should not
be liable for all the damage. Just the vessel itself was liable
in rem. This is peculiar to admiralty law and is completely
different from civil law in the United States or any other country
for that matter.
This principle was the purpose of the formation of Shipowners
and Merchants Towboat Company, Limited that if Shipowners and
Merchants Towboat Company, Ltd. bareboat chartered the tugs from
the old company and then operated them, and the tug embarked on a
voyage but it was proven that she was not seaworthy and she could
not get the right of limitation of liability, then the corporation
would be liable. But only Shipowners and Merchants Towboat
Company, Ltd., would be liable, because that was the company that
bareboat chartered and operated the boat and had the right of
liability under the bareboat charter. The Shipowners and Merchants
Tugboat Company would be protected by the corporate liability of
the Limited company .
Feingold: I see. You were saying that they operated through the '30s.
13
Crow ley: Yes. The Limited Company continued to operate the boats and still
does today. Then, after World War II, when the company was able
to acquire a lot of tugs from war surplus, the company formed
other subsidiary companies to the Shipowners and Merchants Tugboat
Company which was Tug Sea Wolf, Inc. Tug Sea Lark, Inc., Tug
Sea Prince, Inc. , and Tug Sea Fox, Inc., each one of these corporations
owning a boat in its own name and bareboat chartering that boat to
the Limited Company preserving the limitations of liability.
Feingold: This limited the liability even further, didn't it?
Crow ley: Well, the purpose of having all the separate corporations was that
if the courts broke through the original seaworthiness doctrine of
limitation of liability to the Shipowners and Merchants Towboat
Company, Ltd., and then broke through the corporate limitation of
liability to the owner of the tug, they could only get to Tug
Sea Wolf, Inc., which was the owner of the tug. That made a
further protection of the old company as far as liability on
catastrophic accidents which could occur to tugboats engaged in a
dangerous trade .
Some time later, in the late '40s or early '50s, Congress in
its wisdom saw fit to give a $25,000 surtax exemption in other
words, a lower tax for companies making less than $25,000 a year
profit in the Internal Revenue Act. We discovered that, by
Congress taking this tack, that these various tug-owning corporations
that were started for a valid business purpose, became a substantial
tax savings.
We were hounded to death, and we are still being hounded to
death to this day, by the Bureau of Internal Revenue because they
claim that we didn't form the corporations for a business purpose,
but formed the corporations for a tax-evasion purpose. We said
that is a little hard to understand, when the corporations were
formed prior to Congress passing this provision of the income tax
law. But logic, arguing with the Bureau of Internal Revenue,
doesn't make any difference anyway.
Feingold: They unfortunately don't listen to anything.
Crowley: Well, they listen to things. In a tax case that we had that went
from 1950 to 1962 on this very principle, they finally came to us
and said, "Well, we're going to take you to tax court and it will
cost you about $200,000 in legal fees to defend it. So why don't
you pay us the $200,000 that you'll spend anyway and we'll let
it go at that." So we said, "Well, we don't think that is a very
valid principle of tax collection, and we don't think that our
government should be so two-faced in their activities, but if
that's what it's going to take to settle it, I'd guess we'd
better settle it."
14
Crowley: It's hard to believe that the Bureau of Internal Revenue and the
federal government is so damned two-faced. You like to think of
the government and the taxing as a fair system of taxing the
citizens in accordance with the laws that are laid down by the
Congress. But this is not the case.
Feingold: It looks so obvious on the face of it, that these companies were
formed before the law passed, and that any judge would take one
look and throw the case out of court.
Crowley: And they probably would have. But it would have cost us $200,000
in legal fees to win our point. The Bureau admitted that, so
they said, "Well, we'll settle it if you'll pay us your legal fees
and then you won't have to go to the trouble of going to court."
Feingold: They got you coming and going.
Buying Army and Navy Tugs
Feingold: Well, getting back to Shipowners and Merchants, you mentioned that
there were a number of tugs that were purchased from the navy. I
wondered if there were any special arrangements in that or if one
just purchases tugs from the navy as one would a private
corporation.
Crowley: The U.S.S. Kondekook that was sold by the navy in the early '30s
was purchased under a public bid, public auction. The tugs sold
after World War II were sold by the War Shipping Administration,
which was an arm of the Department of Commerce. They had control
of all the sale of war surplus marine equipment. These also were
mostly sold under public bid. They were selling all kinds of
equipment. Admiral Edmund J. Moran, who was at that time with the
War Shipping Administration, was supervising the sale.
There were two types of tugboats that had been built by the
army well, there were many types, but two types that were
interesting and they were called the miki class and the miki-miki
class. The miki-miki class was a wooden hull, diesel powered,
twin screwed, twin engine tugboat, and the miki class was a single
screw, single engine wooden hull tugboat. In our opinion, and the
opinion of most of the tugboat people throughout the United States,
the twin screw boat was definitely inferior to the single screw
boat. It had the wrong type of engine, not as much power, and
was not as desirable a boat.
15
Crow ley: So when it came time to sell this class of boat, the War Shipping
Administration put up for public bid sealed bid a miki-miki
type tug. They received bids on it, the highest bid coming out at
$43,200. So they awarded the boat under that bid. Admiral Moran
was getting sick and tired of going through all this rigamarole
of bidding boats. So, he decided that if the miki-miki 's were
worth $43,200, rather than putting out a lot more bids and going
through all the red tape and expense, he would offer to the trade
all the miki's and the miki-miki 's at $43,200.
We immediately grabbed four of the miki's and Puget Sound
got two of them, at the $43,200 price. We had been thinking that
a fair bid would have been somewhere around $80,000 apiece, but
War Shipping made the mistake of putting a fixed price of $43,200
on these tugs .
Feingold: Bargain day at the navy yard.
Crow ley: Well, those were not navy tugs; those were army tugs. The army
does a much better job of designing and building marine equipment
than does the navy. Anybody in the tugboat business will tell
you the same thing. When I say marine equipment, I really should
say auxiliary marine equipment. I have no way of judging whether
the navy's destroyers are worth a damn or not. But I do have a
way of determining whether the navy's barges, tugs, gliders,
vessels are any good and so does everybody else, and they can tell
you that the navy's auxiliary equipment is usually lousy.
Jenkins: Wait till some admiral gets to read the book.
Crowley: Maybe I'd better not say that. The reason for that is that I
suppose the best design brains in the navy are put on the most
important vessels, which are the combat vessels, and the auxiliary
equipment is left to the people further down the line as far as
design is concerned.
As far as the army designs are concerned, the army has no
naval architects , so they go out and they hire a commercial naval
architect to design auxiliary equipment for them and they generally
come out with a pretty good design.
Feingold: Was this Admiral Moran that you mentioned related to the Moran
Crowley: He is the Moran Towing and Transporation. He was the Moran Towing
and Transportation; he's retired now. Moran started way, way back
in 1860-something. He's about the third generation. He's a very
ingenious, intelligent, hard-working little guy. Although he was
kind of on the outs with the rest of the family, and had only a
small interest in the company, due to his superior acumen,
intelligence, and ability he got to be head of the company.
16
Crowley: The Moran Towing and Transportation Company was in a bad way
financially in the early '30s. Edmund Moran had the foresight
to make a deal with General Motors who were trying then to market
their new diesel engine, that they would build the tug and the
diesel engine and he would pay them over seven years or when he
could. So he built a lot of new equipment financed by General
Motors in the early '30s; and by the time World War II came along,
his company was in an excellent position. They profited by the
increased activity with all these new tugs. If World War II hadn't
come along, he may have gone bankrupt because he couldn't pay the
debt on all these very expensive tugs, but as it was, it turned out
he had miraculous foresight and intelligence.
Present Operations of Shipowners and Merchants
Feingold:
Crowley :
Feingold:
Crowley:
Is Shipowners and Merchants still operating today?
Oh , yes .
What is its primary activity?
Its primary activity is docking ships in the San Francisco Bay
Area and towing them around the Bay. Shipowners and Merchants has
large powerful steam tugs with tugboat captain pilots who go on
the bridge of the ship and handle the ship and dock her. Whenever
there's a difficult shipdocking job in San Francisco Bay it's
always done by Shipowners and Merchants Tugboat Company .
Feingold: I see. Are those the Red Stack tugs?
Crowley: Yes. Their offices are in Pier 3; they have the tugs tied up
there.
Now, Shipowners and Merchants Tugboat Company also owns six
ocean-going tugs which are presently chartered to Puget Sound
Tug and Barge Company for operation because early in 1969
Shipowners got faced with a very difficult labor situation in
San Francisco Bay. It became apparent that they would be precluded
from operating ocean-going tugs competitively. In order to beat
this racket, Shipowners bareboat chartered its ocean-going tugs
to Puget Sound Tug and Barge early in ' 69 and moved them out of
the port. The company got tied up for nine months in June of
1969, but has never been able to get back into the coastwise and
ocean towing because the labor agreements are so one-sided.
Feingold: Is this the Inland Boatmen?
17
Crowley: This is a combination of Master Mates and Pilots Local 40, Marine
Engineers Beneficial Association, and the Inland Boatmen's Union.
I must say that in the last year they have realized the error of
their ways and we are now trying to cooperate with them to get
some tugs operating out of San Francisco in ocean towing. But
you don't change overnight, because you've got to develop customers
and activities and so on.
Feingold: Had there been a number of other companies operating in the Bay
who were able to maintain their operations even with the demands
of the unions?
Crowley: When our strike occurred in June of 1969, the Murphy Pacific
Salvage Company, which was run by Phil Murphy and his son Roger
Murphy, decided that they could make a quick buck by getting some
tugs, giving the union anything they wanted, and charging the
customers deaf, dumb and blind. They picked up two tugs down in
San Diego and four more small tugs on the Bay, and went to the
unions and said, "Tell us what you want and we'll sign it and
operate." They charged the shipowners approximately two to three
times the rate that Shipowners and Merchants had previously been
charging. They did make public statements that they were in the
business to make a fast buck.
Unfortunately, they were not too well run, and after
Shipowners and Merchants Tugboat Company finally got back in
operations after nine months, the company put back in effect its
tariff existing before the strike, and Murphy Pacific Salvage
Company immediately reduced their rates to the same level. After
a total of thirteen months of operation, it was announced at the
annual meeting of the Murphy Pacific Salvage Company that they
had lost $540,000 in their thirteen months of operation, including
the strike, and had decided to terminate all their tugboat
activities. They sold their tugs.
One of our companies Oregon Coast Towing Company bought
the tugs, and later on Roger Murphy, son of Phil Murphy (who in
the meantime had had a heart attack and died) , started a company
called Murphy Tugboat Company that presently operates three tugs
out of Pier 7 under the Murphy Tugboat.
Feingold: But yours is still the company that handles the most difficult
sh ips coming in .
Crowley: Yes. If there's a tough job, Murphy doesn't do it. We do it.
Feingold: What do the ocean-going tugs do? Do they haul stuff up and down
the coast?
18
Crowley: Ocean-going tugs tow ships up and down the coast scrap ships,
ships needing to be repaired. They go out and pick up a vessel
that may have run into difficulties, like we have a tug going
out tonight to escort one of the Pacific Far East Line passenger
ships in from Australia because he's busted his rudder and can
only put it over fifteen degrees. We tow oil barges up and down
the coast. We tow lumber barges, derrick barges, construction
equipment, and so on.
Jenkins: Is that [PFEL] vessel the Monterey?
Crowley: Monterey, yes
Feingold: The one that's out?
Crowley: Coming in tomorrow morning, yes. Ocean-going tugs, depending on
their size we've made trans-Pacific tows, dredges of ships,
barges, and we occasionally go down and go through the canals of
the Gulf Coast or the Atlantic Coast with various tows. But,
as I say, that work is now being done by Puget Sound Tug and Barge
Company because our labor agreement is such that we can't very
well operate ocean-going tugboats.
Jenkins: We've had a number of trips to Vietnam.
Crowley: Yes. We'll tow anywhere in the world with our ocean-going tugs
when they're in operation. But the problem currently is the labor
problem. Also, the Japanese and the Dutch, and various other
foreign countries have been building more ocean-going tugs, and
since our costs are just approximately double the foreign costs,
we really can't compete in international towage because our
prices no matter how closely we figure them come out to be just
about twice as much.
Feingold: In this little summary that you had written up on Shipowners and
Merchants, you mention that in 1964 a new series of tugs were
developed the Tug Sea Wolf, Inc. and Sea Lion, Inc. both built
one of these newer tugs. I wondered who you had developing your
new tugs.
Crowley: Phil Spaulding of Seattle was the naval architect that did the
design work, and Jim Reddick and all of us around here put our order
in as to what we wanted in the way of a tug.
The thing that was interesting about this new tug was, we
had what we called a "simplified engine room." Rather than an
automated engine room, we called it a simplified engine room. We
made the engine room very simple, with a minimum of valves and
auxiliary equipment, and operated the engine from the pilot house
through pilot house control. All the gauges and alarms were located
19
Crowley: in the pilot house. When we came out with these tugs, we eliminated
the watch system from the engine room, with the- help of the unions,
because there's no sense in standing and watching a fully-enclosed
diesel engine run.
In the old days, where you had the reciprocating steam tugs
and the boiler and so on, men had to either shovel coal in the
boiler or light the oil burners and oil the piston rods and do
all these different things to the engine. So that developed
engine room crews. But, with the advent of the modern diesel
engine , there isn't a damn thing that a guy in the engine room can
do except see that the engine is getting fuel from the right tanks
and let it run.
So when we designed these tugs, we designed them with a
simplified engine room with all the controls in the pilot house.
We were able to eliminate a watch-standing engine room crew. And
instead of manning the tugs with a chief engineer and two assistant
engineers and a wiper, we just had a machinery superintendent riding
the tug, who would look at the engines once in a while and make sure
that they were getting fuel from the right fuel tank. This enabled
us to man the tugs with a three-watch crew of a captain and two
mates, three sailors, and cook and a machinery superintendent, or
eight men.
The unions cooperated with us because at that time we had
relatively friendly unions. We tried to institute the same
system on Puget Sound, and the unions were perfectly willing to
go along with us, but our major competitor, Foss Launch and Tug
Company, complained bitterly that if we were allowed to operate
this new type of tug with eight men and they had their old type of
tug with a twelve man crew, that they could not successfully
compete with us. We remonstrated with them, stating that they
could also build new tugs and get more efficiency and productivity
out of their equipment.
But we made little or no progress until a Crown Zellerbach
subsidiary, Western Transportation Company, built a river tug on
the Columbia River which they equipped with an unmanned engine
room. When we advised Western Transportaiton that our project
of attempted efficiency for the benefit of our customers was being
sabotaged by our competitor, Foss Launch and Tug Company, they said,
"Well, Foss does a lot of work for us, so we'll settle that in a
hurry." And they did.
Feingold: Did Foss build new tugs?
20
Crow ley: Then Foss built new tugs and ceased objecting to the unions about
the fact that we were operating tugs with less men than they
were, and proceeded to then build new tugs and operate the new tugs
with the short crew. So we had really more trouble from our
competitors in trying to modernize the business than we did from
the unions .
Feingold: I was going to ask because that's an unusual reaction from the
unions, isn't it?
Crow ley: That's not really an unusual reaction. The union business agents
are intelligent human beings, but they hold a political job. They
can see that if their industry the industry they're involved in
is not competitive, there are going to be less job opportunities.
If it's not competitive, it's not efficient they're not going to
have a union anyway. So, most intelligent and experienced union
men want to see efficiency; they want to see new, safer, more"
convenient and better tools for the men to work with because that
means their industry which, after all, is the fountainhead of
their jobs, their livelihood is stronger and in better condition
to make more job opportunities in the long run.
The only difficulty is that many union business agents
cannot express what they really think, either to their members or
to anybody else, because, if it got back to the members, the
members being somewhat shortsighted, will say, "If we cut down on
the number of men, we will lose some jobs." But many times, by
cutting down on the number of men and doing a job more efficiently,
the industry can become more competitive and create more jobs in
the long pull with a better standard of living. In fact, this is
the fundamental of our free enterprise system and why it has
worked so successfully. Most intelligent union business agents,
in my opinion, appreciate that fact. But they can't even admit
it to their wives because it might get out, and it puts them in a
tough spot.
At the time, we discussed this thoroughly with the union
business agent, Tiny Ferrin, of the Marine Engineers Beneficial
Association, who was to lose more jobs than anyone, and Raoul
Vincilione of the Inland Boatmens Union, who was to lose a job,
and we convinced them that if we could go for this program, we
could create more employment in coastwise and ocean towing by
having this eight man ocean-going crew, and it would be better
employment in that the men's jobs would be a lot easier and they'd
get paid a lot more money. Ferrin and Vincilione agreed to this,
and as a result, up until the '69 strike, the total payrolls for
the company were far in excess of what they had ever been, and
the members of the unions were benefiting tremendously by this
simplified engine concept and this increased employment.
21
Crowley: I've got a graph here that shows the total monies they were
getting prior to the '69 strike. It's fantastic compared to what
they've gotten since. Even though the wages are way up, there's
no jobs.
Feingold: They've priced themselves right out of the market.
Crowley: Right. As I say, most intelligent union business agents that I
ever ran into will admit this privately and know full well where
their bread is buttered. But that doesn't mean they can get up
and say so. They've got to go along with the membership.
Feingold: Is Tiny Ferrin still business agent?
Crowley: No, Tiny Ferrin retired, and Charlie Black got to be business
agent. Charlie Black is one of the reasons we got tied up in
this bad '69 strike. I did have the pleasure, about six months
ago, of riding down in the elevator in the Bank of America with
Charlie Black, after we'd gone to a dinner for some Russians that
were over here. We got talking about the strike and the past
history and the present lack of employment in the towboat industry,
and Charlie Black was a big enough man to come out and say, "I
sure made a hell of a mistake when I tied you guys up in 1969
because we lost a lot of jobs and a lot of job opportunities." He
realizes now the mistake he made. But Charlie was fairly new in
the business at that time, and it takes a little time to learn
the business. We made mistakes in the tugboat business, and people
in the union business make mistakes in the union business.
Feingold: Where is Crowley Launch and Tug operating primarily now?
Crowley: Crowley Launch and Tugboat Company's primary operation is an
operation in Los Angeles called San Pedro Tugboat Company, and
it operates eight or ten tugs down there, docking and undocking
ships at Los Angeles and Long Beach Harbor.
Feingold: How many tugs does Shipowners and Merchants operate now?
Crowley: Shipowners and Merchants operates about six or seven tugs in
San Francisco, and then it has six or seven tugs chartered out to
Puget Sound Tug and Barge Company for ocean-going operations.
Two of Shipowners and Merchants biggest tugs are operating between
Jacksonville, Florida and San Juan, Puerto Rico. They are chartered
to Puget Sound Tug and Barge Company who in turn time-chartered
them to TMT, towing trailer barges steadily between Jacksonville
and Puerto Rico.
Feingold: That brings up another question I had. What is the size of the
average Red Stack tug?
22
Crowley: Well, they're approximately 100 feet, 100 to 130 feet, and over
1,200 horsepower up to 3,000.
Feingold: How many knots can they do?
Crowley: What speed will they make? They'll do about twelve to fourteen
knots.
Feingold: Are they diesel?
Crowley: Yes. There used to be steam tugs, but we got rid of them after
World War II and got diesel tugs.
Feingold: Is that the newest innovation in tugboating?
Crowley: Yes.
Feingold: You mentioned last week that both Crowley Launch and Tug and
Shipowners and Merchants stood on their own until recently.
Crowley: Yes. All of our companies, more or less, operated individually,
until recent years when there's been more and more inter
relationship between the companies because of the fact that
modern business practices have more or less tied them together,
and economy and overhead, centralized computer services, and
last but not least, the problem of financing modern new tugs at
the great capital cost involved the business has evolved from a
relatively small capital business to a very capital-intensive
business because these tugs cost upwards of a million dollars.
That means $125,000 investment for each job, which is a pretty
capital-intensive business.
Docking a
and Alternatives
Feingold: I am still a bit confused about some of the actual operations of
tugboating on the Bay. I was wondering what sort of fee arrange
ment the tugs have, the tugs that help a ship dock, for instance.
Crowley: Well, when the tugs dock a ship, they usually charge a flat fee,
depending on the job and the size of the ship. Then, also, in
recent years, in the last twenty-five years, we charge overtime
at an hourly rate in addition when we have to run into overtime,
because of the very high labor cost now. So, assisting a ship
is a flat fee per tug, and towing a ship is a flat fee per tow,
between two different locations.
Feingold: Is there a standard rate at all?
23
Crowley: In other words, the rates are not regulated by the Public
Utilities Commission or the Interstate Commerce Commission, or
the Federal Maritime Commission. But we do print what we call
a tariff, which is nothing more or less than a rate sheet with
the liability conditions printed on the rate sheet.
Feingold: Does the tug fee include the fee for the bar pilot or the harbor
pilot?
Crowley: What you're talking about is the docking pilot. The tugboat
captain pilot goes on the bridge of the ship. Yes, the fee
includes that service if the shipowner wants to take advantage
of it.
But in addition to that, the docking pilots, or the Red
Stack tugboat captain pilots, have an association among themselves
called Red Stack Pilots' Association. This association bills--
they also send a bill to the shipowner for pilot services: $10,
$20, or $30, depending upon the move. That money is paid into
Red Stack Pilots' Association and then is divided up between the
tugboat captain docking pilots in proportion to the number of jobs
they do. This is a fee which goes direct from the shipowner to
the Red Stack Pilot Association which has nothing to do with the
tugboat company but is an association of the men themselves.
Feingold: Does the money eventually go to the men themselves, or does it
stay in the association?
Crowley: No, the money is distributed every month to the men themselves
in proportion to the number of jobs they do.
Feingold: How do your rates compare to the competition? Let's say to
Murphy Pacific.
Crowley: Oh, as far as Murphy is concerned, it's Murphy Tugboat Company
now that's Rog Murphy they are much smaller tugs and they don't
furnish tugboat captain docking pilots. So their rates are much
less than the Red Stack Tug rates, or Shipowners and Merchants
Towboat Company, the large tug rates. But they're approximately
the same as the Bay Cities Transportation Company's tugboat rates,
which furnish a comparable tug to the Murphy Tug.
Feingold: Oh, I see. Then there isn't really anyone who furnishes tugs
comparable to the Red Stacks?
Crowley: No. There's nobody else in the Bay that furnishes tugs comparable
to the Red Stack, nor do they furnish a tugboat captain pilot
service either.
24
Feingold: That was another question I had. Does that mean that all your
tugboat captains are licensed pilots as well?
Crowley: Yes. All the tugboat captains at Shipowners and Merchants Tugboat
Company have United States Coast Guard Merchant Marine licenses,
and these licenses have what they call the pilotage endorsement
on them, which means that the man is qualified to act as a pilot
in the particular waters delineated by the Coast Guard endorsement.
Feingold: Are there separate people who are called bar pilots who bring the
ship in through the Golden Gate?
Crowley: Oh, yes. The Bar Pilots Association is a state-regulated monopoly
that maintains a boat on station outside the bar of the Golden
Gate. See, outside the Golden Gate, there's a big semi-circular
sandbar around the entrance to San Francisco, and there's a
channel dredged through that. The bar pilots keep a boat on
station out there so that any ship coming to San Francisco can
pick up a bar pilot there, and the bar pilot will bring them in or
take them out, as the case may be.
This pilotage is compulsory under state law. If it's a ship
coming from a foreign port, whether they take a pilot or not, they
pay for the service. But they generally take a pilot. Most ships
that come in here come from foreign ports, so most of the ships
do take pilots. Ships in the coastwise trade do not have to take
a pilot, but there are very few ships in the coastwise trade, so
that this is not a significant percentage of the ships.
The Bar Pilots Association is controlled by the state
legislature; and appointments to the Pilot Commission are made
by the governor; and then the pilot commissioners make appointments
to the Bar Pilots Association. It's a lifetime job; it's a state-
regulated monopoly that is supported by the state and regulated
by the state in order to see that there is a service offered to
ships that want to enter the port of San Francisco. This legislation
was originally passed shortly after the Gold Rush and has been
maintained ever since.
Feingold: The bar pilots would bring the ship into the Bay near the dock, at
which point a tug would take over?
Crowley: Yes. The bar pilot is supposed to bring the ship into a safe
anchorage. Generally speaking, the bar pilots bring the ship in
to somewhere down off of Alcatraz, and a tug goes out and meets
the ship; and the tugboat captain pilot goes up on the bridge of
the ship and the bar pilot comes down off of the ship and gets on
the tug. Then the tug takes him over to the end of Pier 7 where
he gets off and goes back to his office. Then he goes back,
25
Crowley: catches a ship and goes over to Oakland or down the front,
wherever the ship happens to be going, docks the ship with the
tugboat captain pilot and the ship.
Feingold: Up on the ship?
Crowley : Yes .
Feingold: How does the tug know to meet a ship?
Crowley: The ship's agents order the tugs, usually a day or so in advance.
Feingold: Through the company?
Crowley: Yes. Through the tugboat company. The tugs are dispatched by
shortwave radio telephone. The tugboat company also keeps very
close touch with the Bar Pilots Association and knows what ships
are coming in. If the shipowner fails to order a tug, they call
him up and discuss it.
Now, some ships do not take a Red Stack tug. They will have
an independent bay pilot go out and meet the ship and relieve the
bar pilot. Some of these independent bay pilots are members of
the California Inland Pilots Association, and some are not.
The California Inland Pilots Association is a loose association
of some of the independent pilots that have been trying for a
number of years to get legislation through the state of California
that will give them a monopoly on pilotage in San Francisco Bay,
just as the bar pilots have on coming in over the bar. But the
state legislature has never seen fit to do it, because they feel
there is no real need for a state monopoly over pilotage in the
San Francisco Bay, because it's adequately taken care of by
tugboat captain pilots or by independent bay pilots or company
pilots or by the master of the ship. The shipmaster is assumed to
have enough acumen and intelligence to handle his own ship.
The reason for the bar pilotage monopoly is because you have
a difficult entrance from the open ocean, and there has to be
local knowledge available to the shipmaster so he can get his
ship safely into the Port of San Francisco. Once they're in the
port, it's the shipowner's decision as to how he wants to move the
ship around.
Feingold: Have you been at all involved in fighting that inland pilot
legislation?
Crowley: Oh, yes. Oh, yes, my father has spent many a day in Sacramento
fighting attempted legislation, and I've spent considerable
time in connection with it, and the shipowners spend a lot of
26
Crow ley: time in connection with it. The independent bay pilots have
spent a great deal of time and money in attempting to get this
legislation over because they would like to have the same sort of
monopoly situation that the bar pilots have.
The bar pilots have usually opposed compulsory bay pilotage
because they don't think it's necessary, and they realize it's a
threat towards their work, because what the independent bay pilots
really want to do is they want to get in the same sort of a
situation the bar pilots are in, which is a good home. The bar
pilots earn around $30,000 to $35,000 a year, with a considerable
amount of time off, good vacation, and a lifelong job in a state-
controlled monopoly a lot of us would like to have the same thing.
Some of our tugboat captains have become bar pilots. Quite
a fairly substantial number of them have been appointed, because
they're very adept at handling the ships and they know the
entrance to the Bay; in fact, the tugboat captains usually make
the best bar pilots. Some of our tugboat captains have become
independent bay pilots; and they are usually the best independent
bay pilots because they know how to handle ships .
Feingold: Now what kind of ship would take an independent bay pilot and not
a tug?
Crowley: Well, usually a foreign flag ship. A small foreign flag ship
coming into the port will sometimes take an independent bay pilot
because the charge for the independent bay pilot is considerably
less than the charge for a Red Stack tug and the tugboat captain
pilot; one, because the crew on the Red Stack tug is bigger and
it's a more expensive piece of equipment. The independent pilots
go around and sell their services on the basis that they can save
the shipowner the cost of a tug and they can dock the ship without
a tug. Well, sometimes they can and sometimes they can't; and
when they can't, then they will use a small tug, like a Bay Cities
tug or a Murphy tug, to give them an assist to get into the dock.
We feel this is a very unsafe practice; but it's a practice that's
existed on the Bay now for a number of years, and the shipowners
can't seem to do a great deal about it.
The trouble is that the shipowners really don't understand
what is a proper way of docking and undocking a ship. There's no
other port in the United States that has this same problem, because
the shipowners in other ports (like New York, Philadelphia, and
so on) fully understand that they should have, for safety's sake, a
good powerful tug to have the ship properly in.
Feingold: I imagine a ship could get itself into a lot of trouble if it
was improperly docked.
27
Crowley: Of course. Sea-Land used the independent pilots occasionally
until about two years ago when one of the independent pilots ran
the Sea-Land ship into the end of the dock over at the new
container terminal. They've got a million dollar law suit against
the California Inland Pilots. How that will come out, I don't
know.
28
II PUGET SOUND TUG AND BARGE COMPANY
Origins of the Company
Feingold:
Crowley :
Feingold:
Crowley:
Feingold:
Crowley :
Well, let's move along to Puget Sound Tug and Barge.
My father also had an office at 224 California Street in the '20s
and he operated steam schooners on the coast. In 1923, he bought
an interest in Drummond Lighterage Company.
Can you explain what a lighterage company does?
Lighterage is the furnishing of barges or scows to put along side
a ship to discharge or load cargo onto or from; and then the
lighter or barge is towed to the dock where the cargo is unloaded
or it goes around Puget Sound.
Then the lighter can't move itself.
Yes. The lighter can't move itself; it has to have a tug to tow
it. When my father bought an interest in Drummond Lighterage,
Drummond Lighterage had no tugboat of its own but had a bunch of
lighters that it rented out to various people for movement of
materials around Puget Sound.
Drummond Lighterage at that time was managed by a guy by the
name of Harrison Hart, who had been a bookkeeper with Pope and
Talbot and had been sold some stock in Drummond Lighterage by
George Francis Fay, a promoter that had started Drummond Lighterage
Company in 1900. Pope and Talbot had some stock in Drummond
Lighterage Company, and Harrison Hart, who formerly worked for
Pope and Talbot out at Port Campbell, went to work for Drummond
Lighterage Company and became the general manager after George
Francis Fay left.
29
Crowley: Drummond Lighterage Company in the '20s worked closely with the
Gary-Davis Tug and Barge Company, which was owned by George Gary
and Lindley Davis and some other stockholders on the sound,
primarily one Joshua Green, who was an early Puget Sound steamboat
man and started the People's National Bank. [names in these two
paragraphs may be spelled incorrectly] He's 101 years old now and
he's still living. He's quite a guy.
[Mr. Jenkins leaves]
Feingold: Thank you very much. It was nice meeting you.
Crowley: Drummond Lighterage proceeded along this way in the '20s. Then,
in 1929, the Drummond Lighterage Company, Gary-Davis Tug and Barge
Company, Pacific Towboat Company of Everett, owned by Mr. McNealy,
and the Gilke Brothers Towing Company of Anacortes, Washington,
owned by the Gilke Brothers, all got together and formed a
combine which they called Puget Sound Tug and Barge Company.
Puget Sound Tug and Barge Company was at that time owned by the
four companies, with the Gilkes having a little less than quarter
interest and the other three having a little more than quarter
interest. Then the Depression hit, and Gilke Brothers business
and their equipment was useless to Puget Sound Tug and Barge
Company, so they were dropped from the charter and their equipment
returned to them. However, they still retained their stock
ownership in Puget Sound Tug and Barge.
Then George Gary and Lindley Davis came to my father and said
they would like to have Drummond Lighterage buy them out of Gary-
Davis Tug and Barge, which Drummond Lighterage did, so then
Drummond Lighterage owned some 70 percent of Gary-Davis Tug and
Barge. After that, McNealy at Pacific Towboat sold his company to
Foss Launch and Tug Company, who were competitors of Puget Sound
Tug and Barge. Then Puget Sound Tug and Barge Company made a
settlement with the Foss interest, turning certain equipment and
monies over to them, so that Puget Sound Tug and Barge ended up
being owned 50 percent by Drummond Lighterage and 50 percent by
Gary-Davis Tug and Barge Company. Drummond Lighterage owned 70
percent of Gary-Davis Tug and Barge Company.
Puget Sound Tug and Barge continued on without any great
change in ownership until shortly after World War II. Harrison
Hart got a bee in his bonnet that he wanted to buy [inaudible]
The first my father heard of this was a stockbroker in Seattle
who called him up and told him somebody was buying stock in
Drummond Lighterage Company quietly and they asked my father if
he wanted to do anything. At that time, my father had about 40
percent of the stock of Drummond Lighterage Company and Harrison
Hart had about 10 percent. So my father told the broker to go ahead
and meet these offers and buy up stock. And shortly he had acquired
51 percent of the Drummond Lighterage Company.
30
Crowley: It turned out that Mr. Hart was the one who was buying out the
other stock. So finally Mr. Hart was relieved of command and
his stock purchased by my father, and Lindley Davis then ran the
company for a number of years with John Lee. And now Leo Kaller
runs it.
Feingold: I came across this note somewhere that in 1948 the company made
its first delivery by barge from San Francisco to Coos Bay.
Crowley: Oh, this is another company, United Transporation Company, and
that company transports bulk petroleum on the coast.
Feingold: Okay, well, then we'll leave that until we get to United
Transportation. I thought that was Puget Sound.
Crowley: 1958 was when Puget Sound first started its common carrier service
to Alaska.
Alaska-British Co^umb^ia Transportation Company
Feingold: This may be related, but I also have a note here that in 1953 the
Canadian National Railroad began to ship Alaska goods directly to
Prince Rupert, and from there by railroad car barge directly to
Ketchikan.
Crowley: Well, you got a little confused on that. In about 1953 I could
find out the date; do you want the date exactly?
Feingold: I don't know that we need it.
Crowley: In 1953 the Ketchikan Pulp Company was formed by Puget Sound Pulp
and Timber, a major producer of dissolving pulp in the northwest;
and American Viscose Corporation, a large chemical company that
produced rayon fiber in the east. The purpose of this Ketchikan
Pulp Company was to build a pulp mill at Ketchikan Alaska to
utilize the forest reserves of southeastern Alaska for the first
time. Ketchikan Pulp Company built a complete new mill at Ward
Dove, Ketchikan, and the production of this mill was slated to be
sold 100 percent to American Viscose Corporation, where the pulp
would be used in the dissolving process to produce rayon yarn for
making tires .
American Viscose Corporation was faced with a problem of how
to get the pulp from Ketchikan back to their plants on the
Atlantic. They considered intercoastal ship transporation, but
felt that the labor difficulties were too eruptible by longshore
strikes and so on, and they approached Canadian National Railway with
a possibility of a special rate to take this pulp trans con tinen tally.
31
Crowley: The Canadian National Railway had a branch of their transcontinental
road that came to the sea coast at Prince Rupert that had never
hauled much traffic. They were only too anxious to develop some
traffic with Prince Rupert. So they made a special rate to the
Ketchikan Pulp Company to haul the pulp from Prince Rupert to the
Atlantic seaboard. At that time, the Ketchikan Pulp Company came
to us to see if we could furnish a rail car transportation service
from Ward Cove, Ketchikan, to Prince Rupert.
Fred Brown, a Canadian citizen and a financier of British
Columbia, was president of the Puget Sound Pulp and Timber Company's
Candian logging subsidiary and was close to Puget Sound Pulp and
Timber Company, and was also a partner in Strait's Towing Company,
Ltd., a Canadian tugboat company. The other half of Strait's
Towing was owned by Senator Stan McKeen, a second generation tugboat
man who also happened to be a Canadian politician. They worked with
Puget Sound Tug and Barge Company to form a company called Alaska-
British Columbia Transportation Company.
Alaska-British Columbia Transportation Company was formed,
50 percent owned by Puget Sound Tug and Barge and 50 percent owned
by the Canadian interests. But in order to own and operate American
flag vessels, it had to be 75 percent American citizen owned.
Fortunately, Fred Brown's wife was an American citizen. So, Mrs.
Fred Brown owned 25 percent, Strait's Towing owned 25 percent, and
Puget Sound Tug and Barge Company owned 50 percent. This company
developed a car float system, with a large car float barge and a
tug between Ward Cove and Prince Rupert, a distance of 125 miles,
and closed the link between the Ketchikan Pulp Company and the
dissolving plants of the American Viscose Corporation. With a
roll-on, roll-off rail car barge that served as the connecting rail
link between the tracks at Ward Cove and the tracks at Prince
Rupert.
Feingold: What was the capacity of the barge?
Crowley: Eighteen cars.
Feingold: Did this put you in the common carrier business?
Crowley: Well, no, that put us in the car float business. We had hauled
rail cars Drummond Lighterage had hauled rail cars on Puget
Sound for many, many years. Puget Sound Tug and Barge Company
had run tugs and barges to Alaska for many years. By putting the
two pieces of expertise together we developed this Ward Cove-Prince
Rupert transportation system.
A few years after this got into operation, ABC [Alaska-British
Columbia] Transportation Company decided that in order to protect
this business, they should build a second barge of twenty- four- car
32
Crowley: capacity, which they did, called the ABC 24, and this was put
into service. This gave ABC Transportation Company an extra
barge.
Canadian National Railway came to the ABC Transportation
Company and wondered if they could haul rail cars over to Whit tier,
Alaska, which was across the Gulf of Alaska. Puget Sound Tug and
Barge said this could be done, and ABC Transportation Company
instituted the movement of roll-on, roll-off rail car transportation
between Prince Rupert and Whittier, Alaska, where it connected up
to the tracks of the Alaska Railroad, a government-owned railroad
in Alaska. Canadian National Railway was very anxious to do this
in order to develop traffic over their Prince Rupert route which
was very lightly traveled, and get a potential share of the traffic
to Alaska.
The American railroads finally woke up to the fact that the
Canadian National had made a connection between their lines and
the Alaska Railroad, and the American railroads felt that to
prevent the siphoning off of considerable transcontinental traffic
that was eventually destined to Alaska through the Canadian
transcontinental routes, that they required a rail car connection
between Seattle and [inaudible] . Their interest developed in
approximately 1960. They held quite a few meetings in Seattle with
various tug and barge and transportation people.
At that time, Puget Sound [Tug and Barge] recommended to them
that they take their cars to Alaska by roll-on, roll-off car float
barges towed in tangent with the container barges that Puget
Sound-Alaska Van Lines had recently built and was performing a
common carrier service between Seattle and Seward, Alaska with
containers for the Alaska Railroad.
Puget Sound-Alaska Van Lines
Feingold: Now to back up a bit, you mentioned last week that in 1959 the
Alaska Steamship Company had originally been approached by the
Alaska Railroad and asked to
Crowley: Right. And this is backing up into Puget Sound-Alaska Van Lines
which I was going to back into anyway.
Puget Sound-Alaska Van Lines was formed in 1958. What
happened there was that the coastwise line, which was the Coastwise
Steamship Company, had been started in the '30s by people who were
33
Crowley: close to Crown Zellerbach Corporation. The purpose of the steamship
line was to move the newsprint of Crown Zellerbach from Port
Angeles, where Crown Zellerbach had a big newsprint mill, and Camas
on the Columbia River, where they had a big newsprint mill, down to
San Francisco and southern California.
Coastwise Line operated profitably for a number of years
hauling this newsprint. They were also looking for cargo north
bound, so they carried northbound cargo out of San Francisco and
Seattle on to Alaska. This balanced up the newsprint route.
Well, they operated fairly successfully for a number of years
until the railroads Southern Pacific and the Union Pacific
decided that they were going to get the newsprint traffic, so
they exempted their newsprint rates from all the ex parte increases
that they got from the ICC. With this ceiling on the rate in fact,
they cut the rate, so that the Coastwise Line gradually had to"
reduce their rate from originally $32 a ton on newsprint down to
something like $18 a ton in the late '50s. This eventually broke
the Coastwise Line.
About 1958, the Coastwise Line was getting into serious
financial difficulties, and they were trying to find a cheaper
method of getting their Alaska cargo from California and the
Pacific Northwest to Alaska. They requested the Puget Sound Tug
and Barge Company to haul the Alaska cargo from Seattle to Alaska
so their C-4 vessel, the Coast Progress, could turn around at
Puget Sound and won't have to proceed on to Alaska and could make
more voyages in the coastwise trade. The Coastwise Line was
controlled and operated by Tom Cuff [name may be misspelled] of
Pacific Far East Lines, and he encouraged us to move this cargo,
which we did.
Then they said they were going to get out of the Alaska trade
altogether. So, we started Puget Sound-Alaska Van Lines to haul
the cargo that they had accumulated over the years from California
and Seattle to Alaska. This was the beginning of Puget Sound-
Alaska Van Lines .
Where it got the name "Van Lines" was, at the same time, the
Alaska Railroad had been seeking some water carrier to move large
numbers of containers between Seattle and Alaska to connect up
with Alaska Railroad, because the Alaska Railroad felt that
containerization was coming but couldn't get the then existing
carriers to convert their ships to haul big containers.
The Alaska Railroad was very anxious to get some carrier to
transport a lot of containers to Alaska, because they saw the
container revolution coming. The existing carrier, Alaska Steamship
34
Crowley: Company (which served the Alaska Railroad at Seward) , would only
carry a maximum of fifty-eight containers per ship, because they
felt that the container revolution was a lot of baloney and a
waste of too much space on the ship.
We designed barges that would carry three hundred containers,
because they were just regular boxes that we could stack up four
high.
Feingold: When you say "we," who do you mean?
Crowley: Well, the company people in the company my father, myself, Jimmy
Redding, John Lee, everybody was involved in it. We built four
of these container barges with the understanding that Alaska
Railroad would built a whole bunch of containers to make this a
viable operation, and also put in cranes at Seward.
After we got the barges built, the Alaska Railroad built 160
containers and said, "We've run out of money; we can't build any
more containers." They gave sixty of the containers to Alaska
Steam and gave one hundred to us. We said, "It will take a couple
thousand containers to make this a viable system." They said,
"Well, we're sorry; there's nothing we can do. We can't put
another crane in at Seward."
This necessitated our purchasing about six hundred containers,
and putting a crane at Seward, and building a terminal in Seattle
with a couple of big cranes, and handling the containers and the
cargo as best we could. In this way we entered into the Puget
Sound-Alaska Van Lines Transporation system to Alaska, which was the
first common carrier transportation system to Alaska.
We operated through '60, '61 and '62; and we began to realize
that we would have to put in quite a few million dollars more
investment in containers and container cranes and everything.
Also, the American railroads at that time wanted to connect the
American railroad system up with the Alaska Railroad and they
wanted to get a roll-on, roll-off service to Alaska. They discussed
this with us and they also discussed it with Alaska Steam.
We suggested a compromise service. But they turned that down
in favor of the service proposed by Alaska Steamship Company, which
was to buy a Japanese-built train ferry that had been built for the
Florida-Cuba trade by the West Indies Fruit and Steamship Company,
and attempt to get a special bill through Congress that would
enable this ship to engage on the coast in trade at the United
States, which was in violation of the Merchant Marine Act of 1920.
She could carry forty-five rail cars and make eighteen knots and
was ideally suited, in their opinion, to make the run to Alaska.
35
Crowley: We were building another container barge at that time, and we
fought the thing in Congress. We got the idea that if we converted
this construction job into a rail car roll-off barge, we could
point out to Congress that we were building a rail car service in
American shipyards in accordance with the law and should not be
discriminated against by allowing this cheap Japanese-built
vessel to compete with us.
Before we did this, we contacted the Canadian National Railway
and asked them if they would have any objections to us doing this.
They said absolutely not, and in fact encouraged us to build this
barge into a rail-car-carrying barge and used that as evidence
of the good faith on our part to build vessels in American shipyards
to serve the American railroad's haul to Alaska.
This special bill to bring in the City of New Orleans was
fought through two Congresses, Senator Clair Engle representing
us and carrying the ball for us very strongly, and Senators E.L.
Bartlett and Warren Magnuson carrying the ball strongly for Ned
Skinner on the Alaska Steam and the American railroad system.
Senator Engle, through admirable political maneuvering and logic
on his side, finally won out and the bill was permanently tabled
so that the trainship City of New Orleans could not be given
American registry.
Skinner proceeded to purchase the ship anyway and operate her
under a Panamanian flag out of Delta Junction, just across the
border in Canada on the Fraser River, and the ship has been hauling
rail cars from that point to Whittier ever since, operating with
a Canadian crew under Panamanian flag.
Feingold: Does it appear to be making a go of it?
Crowley: The Alaska Trainship Corporation, which the operation is operated
under, has never paid a dividend, is marginally profitable, and
this is evidenced by the financial statements filed with the
Interstate Commerce Commission in the continual attempts to get
increased rates. In my opinion, the trainship City of New Orleans
will be eventually sold to some foreign operation, possibly back
to Florida and Cuba, which she was designed for because she is not
economically sound on the 1,200 mile haul that she is presently
engaged on when she was designed for a ninety mile haul, which is
the distance between Cuba and Florida.
36
Alaska Hydro -Train
Feingold: Where does Alaska Hydro-Train come in?
Crowley: This barge that was being built this container barge which we
switched to was ready to receive rail cars, but due to our battle
with the American railroads in Congress because the American
railroads helped Skinner tremendously and brought a lot of political
pressure to try and get the vessel brought in under American flag
the American railroads were somewhat resentful of our activities , if
not downright sore. So, they did not want to see us haul rail cars
out of Seattle to Whittier, and could very easily say, "We will
not let our cars go on your barge."
So Puget Sound-Alaska Van Lines at that time was giving a
service out of San Francisco to Seward as well as Seattle because,
in the meantime, Coastwise Line had gone broke and discontinued
their California service, and we were barging cargo from Oakland
to Seattle and on to Seward.
We were then faced with a labor problem in Oakland in that the
longshoremen insisted that they furnish men to tie the barge to
the dock and this job had always been done by the deck hands on
the tug. So we fought this, and in fact did not come to Oakland
any more.
In the meantime, we went up to 65 Market and said to Southern
Pacific, "If you will give us a little help in trying to get our
car float system running to Alaska, we will discontinue hauling
out of Oakland to Seattle and then on to Alaska and ship all the
cargo by Southern Pacific to Portland and then by UP [Union Pacific]
on to Seattle." Southern Pacific said, "You're our boon friends
and we will use our influence on Union Pacific to serve you in
Seattle and let their cars go to Alaska."
So Union Pacific enthusiastically joined Southern Pacific
in helping us, and once they agreed, they also used their good
offices to get the Great Northern, the Northern Pacific, and the
Chicago-Milwaukee to let bygones be bygones and be all friends
again, which was the commencement of the Alaska Hydro-Train.
Feingold: Is that a separate company?
Crowley: I think it's the Alaska Hydro-Train division of Puget Sound Tug
and Barge Company, as was Puget Sound-Alaska Van Lines a division
of Puget Sound Tug and Barge Company.
37
Feingold: In 1962, the tug Resolute was completely remodeled to haul lumber
barges out of Coos Bay, Oregon, to northwestern California ports.
Was that part of Puget Sound?
Crowley: No let me see now. Where did you get that information?
Feingold: This came from one of your father's clipping books.
Crowley: Because I didn't say that, and I didn't think that I was losing
my mind. That's part of Oregon Coast Towing Company's story,
which is another thing.
Feingold: Another clipping said that in February 1963, there was a thirty-car
barge that was built.
Crowley: That was the Glair Engle, the barge I had made reference to, and
that was probably her first trip at that date. I can look it Up.
Feingold: You named it after the Senator?
Crowley: Yes. The Senator later died from a brain tumor, but he was quite
a guy. He fought the whole battle for us, and we never contributed
a dime to his campaign funds. On the other hand, Senator [William]
Knowland, to whom we contributed plenty, wouldn't raise a finger
to help us, even though he was a Republican and Engle was a
Democrat.
Feingold: Politics is a strange thing.
Crowley: Oh, yes, it's awful. But, I guess it's better than any other system.
The Puget Sound-Alaska Van Lines ran in '59, '60, '61; and in '62
or '63 when was that date you said before?
Feingold: February, '63.
Crowley: In 1963 we got squared away with Southern Pacific and Union Pacific
and the other railroads and we started hauling rail cars, connecting
up with American railroads, and then another date came along, '64,
the Alaska earthquake. When the Alaska earthquake came we were
still running into Seward with the Puget Sound-Alaska Van Line
barges and also running into Whittier with the car float barges.
When the Alaska earthquake came, the Alaska Railroad dock at Seward
was completely wiped out. It went right into the drink.
An odd thing occurred. The night before the earthquake we
had a big crawler crane on the dock which we had had to buy for
$185,000 because the damn Alaska Railroad still wouldn't go through
with any of their promises. We had to have this crane in order to
unload the containers off our container barges , so we bought the
38
Crowley: damn crane and put it up there on the dock. We felt this was the
responsibility of the Alaska Railroad, but they didn't see it that
way. They didn't have appropriations to do it so they didn't
have the money.
So anyway, the night before the earthquake, our guy up at
Seward decided that the damn crane needed to be greased or something,
and that evening he fired up the engine and he walked it on the
crawlers way around in back up by the sheer rock wall. When the
earthquake came, the whole damn dock and everything slid into the
water, and here was the crawler crane perched on the edge of the
bank, and it didn't go in! That crawler crane then crawled all
over Seward, picking up rail cars and cleaning up the mess, and
did quite a job in the rehabilitation of Seward to say the least.
But it was just luck that they didn't lose that crane too.
We had made a deal with Petrolane a few years prior to haul
bulk propane to Alaska and had put some propane pressure tanks
on one of our container barges, and loaded at Ferndale and took
the stuff up there. When we got to Seward, we pumped it ashore
into their storage tanks in back of the shed on the dock. When
the earthquake came along, it took Petrolane 's bulk storage tanks
along with it down into the drink. But by that time the rail car
service to Alaska was instituted, so the bulk transportation
propane ceased at that time because we could haul bulk propane
cars up there much more easily, and they could go up the railroad
and be used for storage in Fairbanks and Anchorage.
Feingold: It sounds, then, like a lot of the company's resources are tied
up with trade to Alaska and the Northwest.
Crowley: Yes, this is essentially correct. Most of our capital investment
in recent years has been for the Alaska trade.
Feingold: What principally is transported up there; is there any one thing?
Crowley: Alaska is not a manufacturing economy; it's a fishing economy,
and oil and military activities. So, everything from soup to nuts
groceries, household goods, automobiles you name it, it moves to
Alaska. Ninety percent of the traffic is northbound and ten percent
of it's southbound. Very little comes out of Alaska, except
canned salmon, but that moves on a seasonal basis and is still a
very small percentage of the total traffic that moves northbound to
Alaska.
Feingold: So that means that a lot of barges come back empty?
Crowley: Yes. A lot of ships too. Sea-Land runs a container ship service
to Alaska, and their cargo is 90 percent northbound and 10 percent
southbound.
39
Feingold: Are they much of a competitive threat to you?
Crowley: Oh, yes, they are quite a factor. That was another reason we got
out of the container service, because we could see Sea-Land coming
into it and we didn't want to get in a battle with Sea-Land, so
we gradually withdrew from the container service and left it to
them. We do the rail service and they do the container service.
I would say they do 60 percent of the trade to Alaska; we do
roughly 25 or 30 percent and the rest of it is done by catch-as-
catch can operators .
S ervi cing the DEW L ine
Feingold: There are a couple of other things under the umbrella of Puget '
Sound that I'd like to hear about: the DEW [Distant Early Warning]
line supplies, the Prudhoe Bay, and Arctic Marine Freighters.
Crowley: Those are all stories in themselves.
The DEW line story is a very interesting story, or it is to
me anyway .
In the summer of 1956, I got a call from a fellow by the name
of Jack Bullock from Kotzebue, Alaska, and he said he wanted to come
down and see me with his banker. So he came down and we had lunch
out at the Yacht Club and he unveiled a scheme that sounded
fantastic to me.
Some years prior to this, the United States government had
built a series of radar stations across the northern coast of
Alaska and out the Aleutian chain and across Canada and so on,
and these DEW line radar sites every summer were served by a
military navy- sponsored convoy of ships consisting of ice breakers,
cargo ships, tankers, LSTs, LCMs
Feingold: What are LSTs and LCMs?
Crowley: Landing ship tanks. They're a 325- foot vessel that goes up on
the beach and lands tanks. LCMs are fifty-foot landing craft, but
quite a flotilla. At a cost of roughly $30,000,000 every summer,
this flotilla would go up and resupply all the DEW line sites
over as far as the Canadian border.
Jack Bullock said that he was familiar with Arctic waters and
the Bering Sea; he had a small tug and barge outfit in Kotzebue.
He had convinced one Colonel Dial [name may be misspelled] , the
transportation officer for the Army Transportation Corps in Alaska,
40
C row ley :
Feingold:
Crowley :
that this resupply job could be done much more economically by
commercial vessels, which would save the air force a tremendous
amount of money because this was their responsibility, and the
navy was spending money like it was going out of style performing
this job every summer. He had convinced Colonel Dial of the fact
that tugs and barges could do the job in a much easier manner,
and Colonel Dial had given him a contract for several million
dollars to resupply the Bering Sea sites and the Aleutian chain
sites for this coming summer, and he wanted to know if we wanted
to go partners with him and furnish the equipment.
To me this sounded idiotic, because in the first place, when
the military or when our government ever does anything, they
usually put it out to public bid; and secondly, a job of this
magnitude would certainly be publicly discussed. I told him that
we were not interested in going partners with him. We would
charter to him any equipment he might need but wanted cash on the
barrelhead. So he left here and proceeded north and went to a
Captain Leppaluoto [name may be misspelled] on the Columbia River
who had a company called the Pacific Inland Navigation Company.
Could you tell me a bit about Captain Leppaluoto?
owner of Inland Navigation Company.
Was he the
Yes. He had an interest in Inland Navigation. There was a fellow
by the name of Whaley and another guy by the name of Dent. Whaley
and Dent had an interest in Pacific Inland Navigation Company.
Leppaluoto started as a deck hand, and worked his way up in the
company. He was a Finn and a pretty aggressive guy. He was the
guy who first put tugs and petroleum barges up the Columbia River
rapids to Pasco hauling refined petroleum products from Portland
into the inland empire. Then it was distributed by truck from
Pasco into the whole central area. They did fairly well; they had
a very difficult run, getting up the Columbia over the rapids.
They required quite a lot of power and fairly fast barges. They
did quite a job, and it took a lot of guts; he was the guy with the
guts who did it.
Since that time, the Columbia has been tamed by all the dams
the Bonneville Dam, the John Day Dam, and so on. Also, the Standard
Oil Company of California built a refinery at Salt Lake City, and
then built a refined products pipeline from Salt Lake City up to
Pasco and then from Pasco on up to Spokane. There 've been various
discoveries of crude oil in the Rocky Mountain states and other
refineries built up there. So in recent years, or in the last
ten years, the bulk petroleum transportation up the Columbia River
has changed, so there are no refined petroleum products moving up
but a little bit moving down, because of the excess refining
capacity in Salt Lake and the inland empire. Now in the last two
41
Crowley: years, due to a shortage of crude oil and an increasing demand for
petroleum products in the central part of the United States, the
barging of refined petroleum products up the Columbia River is
starting in all over again. It's built up tremendously in the
last couple of years.
Feingold: Getting back to the DEW line story
Crowley: Captain Leppaluoto agreed to go partners with Jack on this job.
The first year a group of tugs and barges, mainly owned by Pacific
Inland Navigation Company, went up and resupplied these DEW line
sites. We made many inquiries, and tried to discover how a small
operator could get a multi-million dollar contract handed to them
on a silver platter, but that was exactly what had happened, and
Colonel Dial felt that since he was saving the government many
millions of dollars, he had done a good job. If it was highly
profitable to Jack Bullock and Captain Leppaluoto, what difference
did it make if it was serving a good purpose, with which we heartily
agreed.
However, in the fall, Captain Leppaluoto and Jack Bullock
had a falling out as to the division of the spoils which ended up
in a lawsuit. The following year, Jack Bullock came to us and
said, "Do you want to go partners with me this year? I have the
contract on a silver platter again." We said, "Why the hell
didn't the thing go out to bid the second year?" He said, "Well,
you don't know the right people." So, we agreed the second year
that since this guy seemed to have such a great "in" we might as
well go along with the gag, and we went partners with him in a
joint venture to resupply the DEW line sites. I believe it was
1959; I'm not sure.
That year, the job was even greater magnitude because the
Arctic coastline was also included, so we had to acquire consider
able additional Arctic equipment. We proceeded to do the job in
partnership with Jack Bullock.
Technically, the job was accomplished, but on a somewhat
extravagant basis because Mr. Bullock liked to spend money like
it was going out of style and also was a big man with the case of
whiskey. We did not like the way the job was run because we
thought it was a little too lavish and a little too unsafe with
people getting drunk every night and so on.
Also, as the season progressed we found Mr. Bullock was
feathering his own nest at the expense of the joint venture and
having all the insurance on his tugs at Kotzebue paid for out of
a joint venture, which was in his words a "slight accounting
error," and a few other odds and ends. So, we came to an
agreement to disagree and both went our own ways.
42
Crowley: However, the job was done successfully, and this was the first
penetration of the Arctic by commercial tug and barge services.
That was 1959.
The following year, in 1960, after considerable pressure,
Colonel Dial was obliged to put the job out to bid. We received
a portion of the job I believe it was the Aleutian chain sites
and Bullock got the rest of the job. Bullock did not have the
equipment to do the job, but had gone to Captain Leppaluoto and
asked him if he wanted to sell his company. Leppaluoto agreed to
sell his company for $1,250,000 cash on the barrelhead, never
dreaming that Bullock would dig up that kind of dough. Leppaluoto
was perfectly willing to sell the company for less than that, but
he thought it was a good price.
After the bids were opened, it developed that Bullock had a
part of the job, and he flew back to New York and bought a couple
of tugs that were out on this coast from Moran and arranged
financing back there with some friends of Admiral Moran' s,
Westerland, Bergen and Knowles , and also the Bessemer Securities
Corporation. He hot- footed it back out here and put a cashier's
check for $1,250,000 on Captain Leppaluoto 's desk and was in
business. So, he did his portion of the job and we did our portion
of the job.
The following year it was to come up for bid again, and I
believe we bid and received part of the job and he bid and received
part of the job.
The following year, it was to come up for bid again, and he
approached us on the possibility of forming a joint venture to do
the job where both of our equipment could help one another and it
would work out a lot more economically, and a lot more satisfactorily,
So we formed a joint venture called Aputco. The "A" was for Alaska
Barge and Transport, the "PU" was for Puget Sound, the "UT" was
United Transportation Company. The United Transportation company
was necessarily included because of the large oil barges that
carried large quantities of Arctic diesel fuel. Puget furnished
tugs and other equipment and so did Alaska Barge and Transport,
which was the name of the company Bullock was using.
Since that time, the joint venture between Alaska Barge and
Transport between Bullock's interests and our interests have
continued along in a joint venture. One year, Alaska Barge and
Transport was not in it we had some sort of falling out. So we
called that joint venture Putco, and then we went back to Aputco
again.
43
Crowley: Some years later this was taken out of the hands of the Army
Transportation Corps and put in the hands of Military Sea
Transportation Service, a branch of the navy that takes care of
marine transportation for all government agencies . We are on the
second of two five-year contracts. I believe we're in the fourth
year of the second five-year contract that we've had with the MSTS
in the joint venture.
Feingold: I was going to ask you if you'd continued on yearly bids.
Crowley: We're up there now.
Feingold: But now the contracts are for more than a year?
Crowley: They're five-year contracts, yes. And we're on the fourth year of
the second five-year contract. We've been doing it for nine years
for MSTS.
Lew Johnson, an attorney from Seattle, had a 20 percent interest
in Pacific Inland Navigation, and Bullock had a 20 percent interest
in Inland Navigation and Bessemer Securities had a 60 percent
interest in Inland Navigation. Originally Bullock had the
controlling interest, but due to the fact that he needed capital,
he gradually relinquished his interest on the basis that if loans
were not repaid to Bessemer Securities by a certain time, they
would have an option to purchase more stock. By the time Vietnam
came along, Bullock had the 20 percent, Johnson had the 20 percent,
and Bessemer Securities had the 60 percent. So when Vietnam
started up, there was a consortium of contractors under the work
of the United States government to make air fields and all that
sort of stuff in Vietnam. We tried to sell or charter them tugs
and barges for use in Vietnam. Jack Bullock also tried to do it
out of Pacific Inland Navigation, but he came to us and proposed
to go to Vietnam with the joint venture and deliver the cargo
right to the site as the joint venture does at the DEW line sites.
We did not like the idea of sending our employees into a war
zone, so we took the position that we would not get involved in
anything like this, and if Bullock wanted to go ahead and do it
on his own, he could do so, which he did with his company, Pacific
Inland Navigation and Alaska Barge and Transport.
They were able to arrange a three-year, $60,000,000 contract
with the U.S. government to acquire equipment up and down the
Pacific Coast and take it out to Vietnam and serve the Vietnam
ports up and down the coast of Vietnam. So after this was arranged,
Jack Bullock bought a lot of tugs and barges from us, from Foss,
and others, which was mainly pretty well surplus to our needs, and
we got good prices for the stuff. Jack proceeded to make up these
flotillas and repair the equipment and get it on its way to Vietnam.
44
Crowley: Coincidental with this, Jack felt that he personally could make a
lot of money by various activities in Vietnam. One thing he did
was he bought a laundry in Richmond, California, and loaded all
the laundry machinery on one of the barges that were supposedly
going out for the government and sent it on to Vietnam. He also
loaded various and other stuff that was worthwhile in the black
market out in Saigon, and sent it out on this government-owned
equipment at government expense. Plus the fact that he apparently
was helping himself to other expenses of the company, which by that
time was 60 percent owned by Bessemer Securities.
Feingold: Some more accounting errors?
Crowley: Yes, some more accounting errors. This had been going on probably
right from the start, but just so long as the accounting errors
didn't hurt us, we were not concerned.
The government and Bessemer Securities caught him with his
finger in the till, and he got into all kinds of trouble.
Bessemer Securities threw him out and Lew Johnson ran the show
from then on in, and struggled through a horrible experience in
Vietnam but finally got it on its feet and making money on a cost-
plus government contract. Although Bessemer Securities insisted
that Bullock and the government insisted be completely out of
the whole thing, Bessemer Securities offered to purchase Jack's
interest which they finally did. So now Bessemer Securities owns
80 percent of PAC and Lew Johnson 20 percent.
The Vietnam job is now wound up. There's a book that was
written by the company on their activities in Vietnam that is
quite illuminating. They did a remarkable job over there. But,
at no time have we ever regretted not being involved in that
fiasco as you can well understand.
Feingold: That's a hornet's nest, to go into a war zone.
Crowley: Oh, it was unbelieavable. Lew Johnson almost went out of his
mind getting it straightened out. Not only a hornet's nest with
the fighting over there, but with all the crooked malarkey and
all the government regulations and accounting and this and that,
he'd just gone through the agonies of hell with the auditors and
the contracts
Feingold: I guess Moses' plagues couldn't have been worse.
Crowley: I don't know if he made any money out of it or not, but any money
he made he earned every nickel of it.
45
Feingold: Well, you won an award at some point, didn't you, for your DEW
line work?
Crow ley: Oh, you mean this NDTA [National Defense Transportation Award]
thing. They have every couple of years something like that. I
don't know what the hell it is, Man of the Year in Transportation,
or something like that National Defense Transportation Award.
Oh, I don't know, it's who does the most in transportation that
particular year. Between starting the DEW line, getting the
DEW line, doing what we were doing on the DEW line and starting
Alaska Hydro-Train and that sort of stuff and that's a lot of
politics, anyway. There's various NDTA chapters throughout the
country always wanting to get somebody from their chapters, and
there hadn't been anybody from the West in a long time, and so
they pulled a lot of politics.
But in any event, it was a little different connecting the
Alaska Railroad with the American railroads and also serving the
DEW line and going into the Arctic. This prepared us for Prudhoe
Bay . When it came along we were all ready to go and give them
service up there when the oil companies hit oil.
The DEW line story to me is always an interesting story
because, Christ, I went through well, you know, flying all
around Alaska on up to Barter Island.
Feingold: You did this yourself actually then?
Crowley: No, I didn't do it myself, hell no. Jack Bullock ran the job the
first year; then we'd go up there and would find him drunk on the
beach, and all kinds of trouble and problems.
In that first year I had to fly back from Point Barrow to
Fairbanks in a Cessna 180. When I got to Point Barrow the DC-3
had left. We said, "Is there any way of getting back to Fairbanks?"
They said, "Oh, we can get you a charter flight." I said, "All
right, fine. I'll take that."
So some old guy with a pair of bib overalls comes up and he
says, "Where's your bag?" and I say, "Oh, there it is." I thought
he was the porter, you know, and he takes it out. He goes up to
this old junky Cessna 180 and puts the bag in the plane. I say,
"Where's the pilot?" He says, "I'm the pilot."
Well, anyway, his name was Ordway. We got into the plane, and
I was sitting in the right front seat, he was sitting in the left
front seat. We had an old guy from Kotzebue who had been with, I
don't know Roald Amundsen, or something like that yes, Amundsen,
when he had made the voyage through the Northwest Passage on the
Goja. This guy had acted as a pilot for our tug the Neptune that
46
Crowley: made the first penetration of the Arctic coast for commercial tugs
and we were bringing the pilot back. John Lee was on the other
side, with this old guy.
Well we take off and we start flying, and it's blowing like
hell out of the south, and he stayed right down on the deck because
if he went up to any altitude he would have gone backwards. So
we're flying over lake after lake. The tundra up there is just
flat like a table, and then there's a lake, it's the most god
forsaken country you'd ever see. Well, anyway, we kept flying and
flying and flying.
We no more than got on a little way and you see they have a
magnetic compass in a plane and then you have a gyro compass , and
you set the gyro to the magnetic compass because the magnetic
compass is not accurate when you're turning. All of a sudden the
goddamn gyro starts spinning around like this, and he pulled it
out, and it just spun around. He said, "Well, the compass is
going." He hit it a couple of times and said, "Well, no compass."
I said, "Oh, are we going back?" He said, "Oh, no; I know the way. 1
Then the red light comes on. He starts banging the dashboard,
"Oh, that goddamn generator's gone." So he flicks a switch and the
generator's off; there's no generator. He said, "Oh, well, what
the hell, we don't need a generator anyway." We kept flying on and
on; you sit there looking at this damn land a hundred feet below
you.
If anybody tells me that the Arctic is against the pipeline,
I know differently. It's a ridiculous situation! The goddamn
pipeline wouldn't hurt the bloody Arctic what difference does it
make? There's just nothing and nothing up there.
Anyway, finally there's a little hill ahead of us. So we
cut over the hill and here's an airfield. He lands on there for
about three hours. So he gets out of the plane; nobody around
a little village over there this is Umiat on the Colville River.
He gets out of the plane and he goes over to a couple of barrels
over there, and a young Indian kid comes out from behind the shed
someplace.
This guy, out of the big back pocket of his bib overalls,
pulls a dirty old rag out of his pocket, puts it over a funnel
(this dirty old rag happens to be a chamois that he uses for
filtering the gas) . So they bring gas over in buckets and pour
it in. Jesus, I thought to myself, I hope it's gas; you don't
know how much water's in it, you don't know how much dirt. It
was just unbelievable! Well, anyway, they filled the tanks up and
we take off again and we start flying.
47
Feingold: And he didn't do anything with the generator?
Crowley: No. What the hell can you do with the generator at Umiat? You
might as well be in Timbuktu. We see these mountains up ahead
of us, the Brooks Range. He said, "Well, I'm going up this valley
to the Amatuvuk Pass. This is the best pass in the mountains."
So we go up over these. He says, "Oh, keep close to the ground
and you can see the Eskimo towns; one hundred feet off the ground."
He went down to fifty feet! So here we are, and as we go over the
pass, he waves to the Eskimos in their tents.
We just keep on going. We start flying down the valley on the
other side. The sun went down and it started getting darker and
darker. We had no generator, no lights, no radio, no nothing.
Here we are going along, and where in the hell are we going? He
says, "Well, I think I can get to Bettles." "What's Settles?"
"Oh, Bettles is an airfield down here." Bettles is an airfield
out in the boondocks, south of the Brooks Range, north of the
Yukon River.
Finally I couldn't see my hand in front of me, but he apparently
had better eyes than I did he said, "See, there's some lights up
here ahead." There's one little light blinking. So anyway, that's
Bettles.
So we land the plane at Bettles. And, gee, it's colder than
hell. We get out of the plane and he says, "Oh, wait a minute."
He takes the plug out of the engine and drains all the lubricating
oil into a big five-gallon can and he packs it in, we pack our
suitcases in, and we go into this building. It was a two-story
building looked like it was army surplus or something and here's
an ex-GI sitting in a big chair with his feet up on the table and
an Eskimo woman running around (his wife) with a bunch of kids.
The pilot carries a can of lube oil and goes over and puts it on
the stove to keep it hot all night; then he'd pour the hot oil
back in the plane in the morning.
They said, "Did you want something to eat?" We said, "Yes,
that would be fine. Okay." So this woman packs in two big five-
gallon cans of stuff and they set it on the table. One of the
things turned out to be beans and the other turns out to be soup
or something. But if you dug the scoop down deep, it had meat
inside. He says, "You get stew off the bottom and soup off the
top and you can have the beans." We say, "Oh, that's great." I
say, "Gee, these few people and these great big pots." He says,
"Well, it's Monday." You see, on Sunday they make up a couple of
pots and that's what they eat all week. Everybody eats that all
week. Then, the next Sunday they make up a couple of other pots.
"You mean these children live on a diet like that?" "Oh, sure,
they all do it up here." It's just unbelievable!
48
Crow ley:
Feingold:
Crowley:
Feingold:
Crowley:
Feingold:
Crowley:
The GI never moved. He just sat on his duff with his feet on the
table the whole time. He never did a goddamn thing. And the squaw
was running around, working like a beaver. It was dirty oh, you
can't believe it.
Then he says, "Go on upstairs; there's beds up there." We go
in the room and there's beds, and there's probably ten-thousand
dime novels in the room, all over the place. So I picked up one,
tried to read it, but there's no lights, so I said the hell with it.
About four or five in the morning, the pilot comes in and
wakes us up. We get up and it's dark. Everything's covered with
ice outside. He takes the oil out and he pours it into this
goddamn old plane and he fires it up and off we go. We finally
got to Fairbanks about 10:00, and boy I was never so glad to get
out of anywhere in my life.
You must have kissed the ground!
And after that trip I figured, "You'd better learn to fly an
airplane, buster." And I did. So I'm a private pilot now.
So you can fly your own plane.
Yes. I've got about two-thousand hours now.
Do you have your own plane?
Yes, I have a Beech Bonanza, a single engine V-tail.
over in Hayward.
I keep it
49
III OIL TERMINALS COMPANY
[Interview 2: April 18, 1973]
General Functions
Feingold: In looking through my notes, I came across a reference to oil
terminals that you or your father had built at Eureka and Crescent
City, and I wondered which of your companies those fell under.
Crowley: Well, that comes under the company called Oil Terminals Company,
which is a subsidiary of Crowley Launch and Tugboat Company. It's
a 100 percent owned subsidiary of Crowley Launch and Tugboat
Company. It has built oil terminals at various places; the first
one was at Alviso, and then we built a terminal at Crescent City
and Eureka and Petaluma and Meridian, in the Sacramento Valley.
When Southern Pacific Pipelines put in the pipeline to San
Jose, we abandoned the Alviso terminal. When the smog people
started objecting to the release of gas fumes in the Petaluma area,
we discontinued the Petaluma terminal. Now they truck all their
refined petroleum products into Petaluma and generate about a
hundred times as much exhaust gas doing it, but that's neither
here nor there. The Meridian terminal we abandoned about seven
years ago. The Eureka terminal and Crescent City terminal are
still in operation, and we also acquired another petroleum terminal
up in Coos Bay, Oregon.
The purpose of having the petroleum terminal is , if we have
a receiving terminal with storage tanks and a truck loading rack,
then we can go to the oil company and say, "Instead of trucking
your product all the way from your refinery up to Coos Bay, why
not let us barge it up and store it in the terminal and then you
can distribute it from there." It develops coastwise barge
transportation, and in the Bay, it developed transportation by
barge of petroleum products that was the purpose of building those
terminals .
50
Feingold: Is that cheaper for the oil companies to barge the oil up and then
store it?
Crowley: Yes.
Feingold: I assume it's your barges, then, that would move the oil?
Crowley: Coastwise, United Transportation Company would move the bulk
petroleum; and in the Bay, it was United Towing Company. We've
abandoned all the terminals in the Bay. The United Towing Company
is now working in a joint venture with what they call the United
River Lines. We've put our barges in with their barges, and we
do what remaining bulk petroleum transportation there is to do in
the Bay. But in the past ten years, the Southern Pacific Pipeline
have put in refined product pipelines to all the terminals that
we used to serve, so that it has pretty well finished that business
The Alviso Terminal
Feingold: When did the first of these terminals go up?
Crowley: The first of our own bulk petroleum terminals?
Feingold: Yes.
Crowley: I would say the Alviso terminal was commenced sometime about 1945
or '46, around in there.
Feingold: Was that your father who did that or was that you?
Crowley: Well, that was Oil Terminals Company.
Feingold: Who was the director of that?
Crowley: Well, my father never really bothered much with the oil terminals;
that's a small part of the business. It's hard to say really
whether my father did it, or I did it, or what; there's really no
way of saying. You can't say I did it either, because there's a
lot of other people working for the company besides me. I'm just
trying to see if there's something on Oil Terminals [looks at
computer print out]. I don't remember the exact date; I'll check
that out. No, this is only floating equipment so this wouldn't
show anything. The computer run-out is on the capital accounts,
and it shows when various companies acquired certain equipment. I
was trying to remember exactly when we started an oil terminal at
Alviso .
51
Feingold: Does that mean that the oil companies themselves didn't maintain
terminals?
Crowley: That's right. The oil companies themselves what really happened
was that in the '20s, most of the refined petroleum products were
distributed by tank car out of the refineries to various sub-depots
throughout California. Then, with the advent of improved highways
and motor truck transportation, they started using highway trucking
for trucking refined products. Then the oil companies, in the
early '30s, began to realize that if they would build a terminal
at Sacramento, a barge terminal at Sacramento, at Stockton, San
Francisco, Oakland, Redwood City, they could barge the petroleum
in large quantities to those points, and then have a much shorter
truck haul. So the oil companies started building up their
terminals in the '30s.
In 1939, we began to realize that we were not getting into
this new refined bulk petroleum transportation; and that's when
we started United Towing Company and started barging bulk
petroleum on San Francisco Bay to these various oil company-owned
terminals. Then after the war, we could see that we could promote
our bulk petroleum transportation by putting in storage terminals
for the oil companies who did not want to put in these storage
terminals. They didn't want to put in storage terminals in
Alviso because it was a very shallow draft channel to get down
there, and no one oil company had enough volume to make it worth
while. So we put in a terminal there to serve the various companies.
The same thing applies to Crescent City. There's a long story
involved with each one of the terminals. Do you want me to go into
it?
Feingold: Yes.
Crowley: Oh, all right. The Alviso terminal. We put in a terminal there
because it's the extreme southern end of the Bay, and there was a
large flow of petroleum products into the Santa Clara Valley area
and there on south. We figured if we put in a bulk petroleum
storage we could get barge transportation, which we did. Then the
oil companies, of course, had their major terminals in San Francisco
and in Redwood City and some in Oakland, and they would haul out
of their own terminals by truck down the Bay down to San Jose and
Gilroy and so on and the ones who didn't have good terminals close
to there, used our Alviso terminal and others used their own
terminals .
52
The Crescent City ^Terminal
Crowley: As far as Crescent City is concerned, Crescent City is located
close to the Oregon border on the California coast. There's one
highway that crosses the mountains over to the Rogue River Bailey
area of Grants Pass and Medford. In the '20s, the Standard Oil
Company of California had had a terminal at Crescent City, and
used to ship refined products up to Crescent City by water trans
portation and then take them over the mountains.
During the war, this was stopped because well, prior to the
war, they took the little tanker they were using on it and sent her
to Alaska and made a deal on the QT with Southern Pacific whereby
Southern Pacific would buy Standard Oil products, and Standard
Oil would shut down their depot at Crescent City, and tear the
tanks down, and ship the products up into the Rogue River Valley
area out of the Richmond refinery by rail. So, it was a tacit
agreement between Southern Pacific and Standard that eliminated
the original Crescent City depot.
Shell also had a small depot there; but when Southern Pacific
made this deal, Shell couldn't get service to their depot, so they
discontinued it. Then, after the war, Shell got interested in
getting back into Crescent City because the cost of hauling
petroleum products up to the Rogue River Valley ran about four
or five cents a gallon, whereas the barge truck move would run
two cents a gallon into the area.
So Shell came to us and said that they'd like to build a
depot up there, but they didn't know how they'd get the water
transportation done. So we said, "Well, we'll build a depot and
we'll do the water transportation." They said, "Well, we'd prefer
that, because, if you build a depot, then we won't have a big
investment in Crescent City dependent entirely upon your whim. If
you're going to furnish transportation, fine; but if you don't,
then we're stuck with a big terminal." So we said, "Well, we'll
build an industry terminal for all the oil companies." They
said, "Fine, that will spread the cost and make it much more
economical . "
So we went to the various companies . They all liked the idea
with the exception of Standard. Standard said, "That's a bum idea.
We would not like to see you build a terminal at Crescent City
and we won't use it if you do." This was due to their agreement
with Southern Pacific.
53
Crowley: So we went ahead and built the terminal. While the terminal was
under construction, one of the departments of Standard Oil said
to me, "What are you doing as far as tanks for us are concerned?"
I said, "Well, your traffic department told us that under no
conditions would you use the terminal." He said, "Well, of course,
that's the traffic department. This is completely off the record,
but I suggest you put in tanks for Standard Oil, because if the
others use it we'll use it too." I said, "Well, we figured that
out too, and we are building tanks for Standard, and this is the
size tanks we're building." He said, "Fine, that's just about the
size we need." We went ahead and completed the terminal.
The traffic department of Standard insisted up until the
very last minute that they would in no way ever use the terminal
at Crescent City. Just before the terminal opened, I got a call
from the people up there and they said, "you know, if the price
is right, we might consider using that terminal up there." WeM
already been told by another department at Standard that there
was no way they wouldn't use the terminal. So anyway, then we
served the seven majors through that terminal. We were also told,
in no uncertain terms, that we'd very well not better serve now
this is anti-trust stuff so I'd better keep my mouth shut. Are
you recording this?
Feingold: Yes. You can cut it out.
Crowley: I'll say no more.
Feingold: But that terminal is still operating?
Crowley: Yes. The Crescent City Terminal is operating, but Standard
withdrew, Shell has withdrawn and Union has withdran.
Feingold: Can you say why?
Crowley: Yes. Because Standard always wanted to get out of it anyway.
They have a big depot in Eureka which is ninety miles down the
coast; so has Shell and so has Union. But the basic reason is
that Southern Pacific Pipelines built a refined products pipeline
up the Sacramento Valley and it's now up as far as Chico; so they
can pump the product up to Chico and then distribute it by truck
beyond into the Rogue River Valley area almost as economically as
we can get it to the Rogue River Valley.
Feingold: Is that a real threat to you then?
Crowley: Oh, yes. Definitely. It's only a question of time before Crescent
City terminal will be abandoned, because the Southern Pacific
Pipelines will put the refined product pipeline north from Chico
54
Crowley: right into Grants Pass and Medford on, and connect up with their
other pipeline that they have run from Portland south to Eugene.
When that day comes, Crescent City terminal will be finished.
Feingold: They have a lot of rock to dig down into to put their pipeline in.
Crowley: Well, that's no great problem. The cost of laying pipe is fairly
expensive, but Southern Pacific will do it eventually. They'll
make their investment on the maximum return, and then just have to
wait until they put more population in the area and then they'll
put the pipeline in.
The Meridian and Eureka Terminals
Feingold: What about the other oil terminals?
Crowley: Well, the Meridian terminal we put in because there were no
terminals on the upper Sacramento River which had recently been
opened to navigation. So we built a terminal up there. No, let
me correct that. Shell and Union both put terminals at Colusa.
River Lines they were our competitors were hauling products up
to Sacramento and then on up to Colusa. We figured that if we put
in a terminal at Meridian, that we could then get the hauling of
the gasoline for the other companies besides Shell and Union to
Sacramento, and then haul beyond to our terminal at Meridian which
is just south of Colusa. We built the terminal and then the rate
structure changed and Southern Pacific put in a pipeline. So we
never used the terminal for petroleum products, and Shell and Union
abandoned their terminals at Meridian, because the cost of
transportation up the shallow Sacramento River above Sacramento
became exorbitant.
Feingold: I have a note here that that was completed in 1954?
Crowley: The Meridian terminal?
Feingold: Yes.
Crowley: I don't remember, but I guess about that time.
Feingold: I came across that in a newspaper clipping. Let's see, have we
gotten all of them?
Crowley: Eureka terminal.
Feingold: Yes, Eureka.
55
Crowley: We put in a terminal there to be used by others than Shell, Union
and Standard, because they had no way of getting their product
there except by truck or rail; and it cost them a good four or
five cents a gallon to get it there and we could haul it by barge
for less than a cent a gallon. So we put the terminal in for the
four major companies I believe it was Atlantic Richfield, Texaco,
Mobil and one other, I've forgotten.
Feingold: Is that one still operating?
Crowley: Yes. That's still operating. And that will operate indefinitely,
because Southern Pacific will never put a pipleine in there, and
the companies that are using our terminal will never have enough
business to put in their own terminal or have no desire to do so.
The Petaluma Terminal
Feingold: And the Petaluma terminal?
Crowley: The Petaluma terminal we put in there I've forgotten what company
we were doing it for but it was just a small terminal. And then
the Petaluma pollution control people shut down all terminals at
Petaluma.
Feingold: What was polluting about it?
Crowley: Well, they had an idea that gasoline sitting in a tank under the
hot sun vapor would come out the vent on the top of the tank and
this would pollute the atmosphere.
Feingold: Did they have any evidence that that was the case?
Crowley: Oh, yes, they had evidence. All pollution control people have
evidence; how valid the evidence is, is neither here nor there.
The logic involved is not necessarily sound logic. But nonetheless,
all the refined petroleum is hauled into the Petaluma area by
motor trucks now, that put a hell of a lot more pollution in the
air than the barge terminal ever did. But that's more of this
so-called pollution control. Have you read that article on
pollution control in automobiles and the 66 billion dollars that's
being wasted.
Feingold: No. What was this?
Crowley: Well, that's the trouble the general public doesn't know what the
hell's going on half the time, more than half the time.
56
Crowley: The Environmental Policy Act specifies certain pollution
requirements, and these pollution requirements are extremely
strict. Approximately 80 percent or 90 percent of these
pollution abatement restrictions can be met at a cost of
approximately 33 billion dollars by 1976. But the Environmental
Policy Act insists that we meet much stricter requirements; this
is estimated to cost about a hundred billion dollars.
The oil companies have taken full-page ads in newspapers
explaining to the public that this is a waste of 66 billion dollars
in this country by 1976, if they insist on continuing with the
very, very overly strict requirements of the Environmental Policy
Act. They say, "Certainly, we want to clean up the atmosphere;
but when you go to the extremes that will clean up the Los
Angeles basin all over the United States, you're wasting 66
billion dollars."
Another problem presents itself when you say, "Clean up the
air," like you would clean it up in the Los Angeles basin. Even
if you go to the very strict requirements of the Environmental
Policy Act by 1976, you will still have to eliminate 80 percent
of the automobile driving in the Los Angeles basin to comply with
that, indicating that the law set up by Congress is a bad law
because it's entirely too strict. It has no consideration of the
economic impact, which in turn has tremendous effect on other
environmental considerations, such as the preservation of our
natural resources and so on. If we have to waste 66 billion
dollars on something that isn't doing a damn bit of good anyway,
because it's an overkill, then what are we going to do about slum
housing and all these things?
The trouble is we're just acting emotionally rather than
logically and with sound economic analysis. Environmentalists
don't even want to discuss economics, but it is a part of the
question, and it's a very important part of the question.
Feingold: Sometimes reformers don't seem to want to discuss hard, cold
business facts and economic facts .
Crowley: It's not only a business fact. It's a fact that 66 billion dollars
is coming out of the pocket, not of General Motors or Ford, but
it's coming out of your pocket and my pocket. It represents things
that could be done to improve a lot of situations that require more
improving than absolutely pure air. We can have 10 percent polluted
air and it won't hurt anybody; but when you say you're going to
have absolutely pure air and waste billions of dollars doing it,
this is kind of foolish when there's a lot of other things that
ought to be done like cleaning up sewage and all that sort of
stuff.
57
Feingold: Besides the enormous problem, as you said, that a lot of the
pollution is created by private cars. Short of shutting down the
highways, how are you going to stop that?
Crowley: Oh, you're going to stop that. They'll take care of that, because
they'll run out of money and they'll run out of oil in this
country. We're not going to have the petroleum products because a
little bit of that 66 billion will not be available for drilling the
wells and for getting more oil, and so we're just not going to have
the petroleum products. But I think the environmentalists are
making an awful mess of their project. I think that everyone wants
a clean environment, or a cleaner environment, but how far do you
go? If you go to a ridiculous extreme, then you meet yourself
coming and going.
58
IV PACIFIC BARGING COMPANY
Feingold: Well, getting back to the Bay here, I came across a couple of
notes about Oliver J. Olson and Company, and I couldn't remember
whether we had talked about them last time or not.
Crowley: I don't think so. Oliver J. Olson Company was a coastwise
steamship company that was owned by Ollie Olson, who died, I guess,
about the mid- "40s or '50s sometime, and left the company to his
six children. E. Whitney Olson was the most intelligent of the
group and ran the company. His brothers' names were Oliver Olson,
Jr. and George Olson, and his sisters were Mrs. Howard Finn and
well, I've forgotten the names of the other two, but there were
six of them. Whitney and George have died; the other four are
still alive. They were engaged in the coastwise transportation of
lumber by vessels that are called steam schooners, small coastal
vessels; and they engaged successfully and profitably in the
business up until about the late '40s. Do you want to go on with
that story? That's a whole story by itself.
Well, the story is, briefly, that we saw them using these
coastwise steamers and felt that they were doing a lousy job,
inefficient. There was a good opportunity for us to go into the
coastwise lumber transportation business with tugs and barges. So
we designed what we felt were good, sound barges for the
transportation of lumber.
Whitney came to us one day and said, "I understand you're
talking about going into the lumber business." "That's right."
He said, "Well, we've been thinking about going into the barging
of lumber too." I said, "Okay." He said, "Would you like to do
it jointly?" I said, "Okay. We'd be perfectly willing to go
into the thing jointly. You have customers and you've been in the
business for many years. If we come into it, we'll come in with a
new system which we think will be economical. But you know
something about handling lumber and we don't, and we can either
learn the easy way or the hard way."
59
Crowley: These discussions went over some period of time, and he agreed
that we would go fifty-fifty partners in the barging of lumber
on the Pacific coast. We formed a company called Pacific Barging
Company, 50 percent owned by them and 50 percent owned by us.
He brought out the point that, since the Oliver J. Olson
Company would still be operating their steam schooners, that we
could not expect to take the lumber off their vessels and put them
on our jointly-owned barges. I said, "Whitney, I'm not concerned
about that whatsoever because you will find that 50 percent of
the profit of hauling lumber by barges is a hell of a lot better
than 100 percent of the profits of hauling the lumber by your
antiquated, self-propelled ships." So he said, "Okay, as long
as you understand that we will not take the lumber off the ships
unless we want to, we'll go into the business." So I said, "Okay,
that's a deal. And we will agree that any barging of lumber by
us or by you on the Pacific Coast will be done by Pacific Barging
Company . "
So we built two barges. We had a hell of an argument with
George Olson's brother about the two barges that should be built,
because we said that our design was the proper design and George
said that we didn't know what we were talking about, they ought
to be designed another way. We went right up to the gun and said,
"Look, we're placing a contract with the Pacific Coast Engineering
for the barges as we have designed them. If you want to go along,
fine; if you don't, forget it." So he said, "All right, we'll go
along."
So we designed these two barges and built them, the Pacific
Barge One and the Pacific Barge Two. They started hauling lumber.
They carried four million board feet of lumber a piece, and his
biggest steam schooner carried 1.7 million board feet. They
operated for two years, and they discovered that 50 percent of the
profits of the barging was a hell of a lot better than 100 percent
of the profits from the ships.
One day I heard through the grapevine that the Olsons were
negotiating with Todd-Houston to build a couple more lumber barges
on their own. So I went to lunch with Whitney and I said, "Whitney,
I understand that Pacific Barging has been very busy; we haul a
lot of lumber, and we're making good profits. Maybe we should
start building some more barges." He said, "Well, I've been
thinking about that, too. We figured that in Oliver J. Olson
Company we'd build a couple of barges to replace some of our ships.
I said, "Well, Whitney, you know that the agreement between
us is that any barging of lumber will be done by Pacific Barging."
He said, "Well, that's right; but we were only thinking about it,
60
Crowley: we weren't really doing anything. So any future barging will be
done by Pacific Barging." So a month or two later, I found out
that he had surrpetitiously made an agreement with Todd-Houston
to build two new barges on his own.
Feingold: How did you find out?
Crowley: Bo Mayer told me, very confidentially. He's a very good friend of
Whitney's and he's a very good friend of mine.
But anyway, I went to Whitney and I said, "Now, I understand
you've already ordered the barges after you told me that there was
nothing to worry about." He said, "Well, my sisters and brothers
have insisted that we build the barges in the Oliver J. Olson
Company instead of Pacific Barging, although 1 gave you my word
we would not." 1 said, "Okay, fine. But you're giving us the
double-cross and we're not going through with the original agreement."
He said, "Well, don't put it that way." I said, "That's the way it
appears to us . As far as we're concerned, we want to break up
Pacific Barging Company and split with you, and not have any more
to do with you." So we split up Pacific Barging, and they took
one of the barges and we took the other. They went their merry
way and we went ours .
Oliver J. Olson Company built the two barges at Todd's, which
were a real flop. Then they built a couple more barges, which were
not more successful and they got into serious financial difficulties.
So they are now operating their two remaining barges on the coast
in lumber hauling. One of the barges is the barge we designed,
that's as far as they got.
Feingold: Why were their other barges a flop?
Crowley: Because they didn't understand they were steamship people, and
they knew that cargo had to be loaded into a hole inside of a
vessel. They have hatches in the vessel's deck and they load
cargo in there, and then they put a deck load on top of that. Our
theory is that a barge should be designed with a solid main deck,
but wide enough and shallow enough with adequate stability so you
can pile all the cargo on deck. This is the policy we follow.
They changed the policy and got into financial difficulties, and
are struggling along getting by as best they can at the present
time.
Feingold: Are you still involved in barging lumber?
Crowley: No, we gave up lumber barging because the railroads and trucking
companies have also followed the transportation of lumber from
the Pacific Northwest to southern California, and have held the
61
Crowley: rates down in competition with water transportation; so there's
no money in the barging business any more anyway for lumber
products, so we have just withdrawn from it completely.
Feingold: About what year was this?
Crowley:
This barge with the J. Whitney Olson (as they call him now) was
built in 1957.
Feingold: I had come across a clipping that they had applied to the ICC
[Interstate Commerce Commission] to build two barges.
Crowley: No. No, they wouldn't apply with the ICC. It's an ICC- regulated
right, yes. Who applied to the ICC? Pacific Barging?
Feingold: According to my notes, Oliver J. Olson and Company, in September
of 1956.
Crowley: I see. They had ICC lumber rights for the transportation of
lumber by self-propelled vessels on the coast from the ICC. Our
company, Puget Sound Tug and Barge Company, had ICC rights for
the transportation of lumber bu tug and barge. So when we formed
Pacific Barging, Olson wanted to get the rights in the Oliver J.
Olson Company to move lumber by tug and barge. So we said,
"That's perfectly all right," and they made an application for
tug and barge rights, as well as their self-propelled rights.
gold: What does the ICC control? Is that the only part of the water
transportation ICC controls?
;ley: The ICC does control coastwise water transportation. They control
water transportation in the lower forty-eight states. ICC has the
jurisdiction for interstate transportation by water and they have
jurisdiction over the transportation of lumber up and down the
coast.
62
V PRUDHOE BAY-ALASKA PIPELINE
Servicing the Alaska Pipeline
Feingold: Last week you described several Crowley enterprises in the Alaska
trade. Could you tell me the story of the Prudhoe Bay Alaska
pipeline.
Crowley: Well, going back to Jack Bullock, I told you that whole story, the
resupplying of the DEW line. We have been running into the Arctic
Coast resupplying the DEW line site now for some fifteen years or
so. When British Petroleum hit oil up there in the summer of 1968,
I guess it was, they contacted us in May or June and said, "Can
you haul seven thousand tons of cargo to our oil find up on the
North Slope?" We said, "Sure, we can do it."
We scurried together and got a couple of bargeloads of casing
and drilling mud and whatnot together in Anchorage, and took it
up to the North Slope and put it on the beach at Foggy Island,
which is about ten miles east of Prudhoe Bay. The reason we picked
Foggy Island is that it's a very shelvy coast, and that's where
the deepest water is close to shore, at Foggy Island. It's only
ten feet or something like that.
But anyway, the following year, we hauled about fifty thousand
tons into Prudhoe Bay for them. Then the following summer, the
summer of 1970, we hauled I think it was somewhere around 200,000
tons of cargo and pipe into Prudhoe Bay.
Feingold: Was this on barges?
Crowley: On barges. The barges would anchor about seven or eight miles
offshore, and then we would load the cargo onto small, lighter
barges and lighter the cargo ashore with shallow draft tugs into
Prudhoe Bay. Then it was put on the storage pad or hauled up to
the storage pads up the road a ways where they stored the pipe.
63
Feingold: Were these specially built barges?
Crowley: Some of these barges were barges we'd already had in service,
others were specially built. The lighterage barges were specially
built and the lighterage tugs were specially built; but the ocean
going barges, some we had, some we built more of.
At the time, we were building car float barges to serve in
the Hydro- Train; and so we used some of those to haul the cargo
to the North Slope we used those for pipe. They're generally a
very wide barge, a relatively shallow barge, and fairly long so
that they can carry a lot of rail cars, if. we turn them into rail
car carriers .
I'm writing up a statement here that I have to put in to the
ICC and I'll give you a copy of it. It goes into the Alaska Hydro-
Train history fairly exhaustively.
Feingold: Yes, I'd be very interested in seeing it.
Crowley: I haven't finished it yet, but I'm working on it. When it's complete,
I'll give you a copy of it if you want.
Feingold: Yes, that would be wonderful.
Crowley: The purpose of this is to attempt to convince the Interstate
Commerce Commission that we should be allowed to make a little
more than 3.1 percent return on the investment in the Alaska
trade .
Feingold: Is that a limit that they set?
Crowley: That's a limit. In our last go-around with them, they came out
with a decision stating that 3.1 percent return was an adequate
return on investment, which was so damn ridiculous it wasn't even
funny; but that was a political decision, and we are requesting
another rate increase and trying to tell them what we think is a
fair rate or return.
Was there anything particular you wanted to know about Prudhoe
Bay?
Feingold: What's the state of affairs now?
Crowley: Every summer since 1970, we have hauled a small amount of cargo
into Prudhoe Bay four or five thousand tons and this summer of
1973 we're hauling about forty thousand tons of cargo into Prudhoe
Bay because the oil companies feel that they're going to get started
on the pipeline sooner or later and they might as well get started.
64
Crowley: One of the big things we're hauling up there is British Petroleum
is putting in a proper camp, a proper headquarters building,
which they have never done up until now; one, because they didn't
have the money, and two, because Prudhoe Bay wasn't going ahead
as fast as it should. This is a big part of the forty thousand
tons that will go up there this summer.
Feingold: I was just going to ask what the principal cargo was.
Crowley: See, these buildings are built in modules; we take the modules up
there and then they assemble them up there and can make buildings.
We did that for Atlantic Richfield in 1969, I believe, and they
built a beautiful headquarters building up there, which has a
lot of living accommodations and recreation facilities, and a
dining room, and stuff like that.
It's a pretty tough living up there because it gets mighty
cold; and people have to have some sort of living accommodations.
We have a camp up there at Prudhoe Bay which is pre-fabricated
structures the size of a truck body, and we put them end to end
all together and make a camp out of them. We have a camp for about
one hundred men; we have to have up there when we work large
amounts of cargo. You just can't exist out in the open up there.
It's pretty rough country. There are no accommodations already
there.
The Ecological Impact of the Pipeline
Feingold: Have you yourself been up there since that famous plane flight?
Crowley: Oh, yes. That was my first trip up there, but I've been up there
many times since. It's interesting country. The ecologists I
think that 99 and 44 percent of the ecologists have never been
there. They're screaming and crying about the fragile area and
all that sort of stuff, with very little knowledge of the North
Slope, because it isn't nearly as fragile as they claim it is.
I heard a television program where some guy who was president
of Friends of the Earth made a statement which he claimed to be
truthful, that one footprint will last a thousand years on the
North Slope in the tundra. That's absolutely incorrect.
The last time I was up there I had the opportunity to go
out to the original well site of British Petroleum. They have
removed the drill rig, the mud tanks, and the whole works, and
have merely left the well head structure there, the valves
Christmas tree. When they cleared it all up, they just bulldozed
65
Crowley: the land over flat, and they left it. You can't tell today that
there 'd ever been a well drilled there except for the Christmas
tree sticking up, because a little grass is growing, little
flowers and all that sort of stuff.
You don't get big, long grass and you don't get a multitude
of vegetation; but what vegetation there is, is there, and if you
kill the vegetation, it comes back. The trouble is, it doesn't
come back like it does in the tropics simply because no vegetation
grows up there anyway. Prudhoe Bay, the Arctic slope is a frozen
desert. They have about five inches of precipitation, on the
average, all year around, and very cold weather in the winter time.
Whatever does grow there doesn't really grow very prolifically , so
what difference does it make?
The erosion from some of the places has been very bad; but the
stuff erodes anyway. What the hell difference does it make for
just a bunch of sand and gravel. Much ado about nothing, in my
opinion, but of course, I'm prejudiced.
The Canadian Alternatives
Feingold: Does all the talk about the alternate pipeline route through Canada
change things for you any?
Crowley: It makes me think how stupid people are, because all the talk
about the alternate pipeline route through Canada is just talk,
until a foreign country that has tremendous natural resources
itself decides to allow this country to put a pipeline through
their sovereign territory to get the same resources out of this
country's territory. Now, if anybody has an ounce of common sense,
how can they be so stupid to believe that somebody in a foreign
country is so goddamn dumb that they're going to have their
sovereign territory violated by a pipeline so we can use our own
oil and gas instead of buying their oil and gas.
So all the chatter about a pipeline through Canada is just
chatter, because a pipeline through Canada is entirely a decision
of the Canadian people and the Canadian government, and we don't
have a damn thing to say about it.
Feingold: I can imagine that with the growing anti-American sentiment in
Canada that something like that would have a difficult time getting
through .
66
Crow ley: That is a masterpiece of understatment . Even if all the people
in Canada loved the United States 100 percent, they'd still say,
"Well, what about the oil and gas that we have in our Arctic
region? Can we sell it to you, and how much will you pay us for
it?" I mean, I just think it's completely stupid for people to
even talk about it, let alone think about it, because if they start
to analyze it, there's really no point in the Canadians letting
us build a pipeline through their country to use our products in
our own country when they could just as well be selling us their
products at any price they damn well please.
Not only that, but the cost of building a pipeline three
times the distance that the Alyeska pipeline would take is roughly
three times the cost. To build a pipeline through Canada would
cost around ten billion dollars; and the oil companies will have
an awful struggle getting the 2 1/2 to 3 billion dollars together
that it's going to cost to build the Alyeska pipeline. Where would
the money come for the ten billion dollars? It's like the 66
billion dollars that this country the people of this country
are going to throw away. You have to look at the economics of
things, and people seem to be completely ignoring them at this
point.
Feingold: Are you at all involved with the current investigations in Congress
about the pipeline? I know they're considering it now, after the
court decision in February.
Crowley: Well, naturally, we are in touch with Senator Magnuson and Senator
Jackson and our congressman representative in every way we can,
trying to point out the stupidity of not building the Alyeska
pipeline as soon as possible. I haven't, personally, been back
there recently talking to them about it, nor do I intend to, because
I think they're just as fully convinced as I am of the need for it.
They understand the picture; their representatives in Seattle
understand the picture; and there's really nothing that can be
done until they are able to convince the rest of the senators and
congressmen that legislation has to be put in and voted on that will
allow the Alyeska pipeline to go through.
There's a real power play going on, because the senators and
congressmen from the Midwest states are trying to prevent the
Alyeska pipeline from going through, because they would like to
see the pipeline come down through Canada into their midwestern
states. They would get the advantages of the refineries and the
petro-chemical plants, and so on, in the midwestern states.
However remote the possibility of doing it is I think the
possibility of building a pipeline through Canada for Alaskan oil
is a very, very remote possibility because of what I just said
67
Crowley: about Canada being a foreign country but what will probably happen
is that a Canadian pipeline will be built from the McKenzie Delta,
right directly down the McKenzie Valley and into the Midwest, and
Canada will be able to sell all the oil and natural gas it wants
to the United States and the Midwest with no price ceilings whatsoever,
for exorbitant prices of $10 to $15 a barrel for the Canadian crude
oil and in any quantities they want to do so.
That pipeline will cost about ten billion dollars. The
American public and the oil companies petroleum will pay the
cost of it and the Canadians will own it. All you have to do is
to go through the negotiations that will come out with this eventual
result.
Feingold: Is it Senator Jackson who has a bill now?
Crowley: Senator Jackson is chairman of the Interior Committee in the Senate
and he has introduced several bills I'm not entirely familiar with
them. One bill is to amend the Mineral Leasing Act of 1920 to
increase the size of the right-of-way. Another bill is to build the
pipeline there's a dozen bills in the hopper. They're holding
hearings on them, and this is the formalities they go through to
try them and come up with legislation that will satisfy the country.
Are you interested in that at all?
Feingold: Yes. I'm interested in it.
Crowley: The Oil and Gas Journal is really the most complete publication
that I know that will give you all the dope on that, if you want.
Arctic Marine Freighters
Feingold: When we were originally talking about the Alaska operations, you
mentioned the development of Arctic Marine Freighters as part of
the story.
Crowley: Arctic Marine Freighters is a joint venture between Puget Sound
and PAC. When I say "we," I mean Arctic Marine Freighters. PAC
became disenamoured with our activities after the 1970 season;
so the '71 season, Arctic Marine Freighters was 100 percent ours.
In the '72 season, they went in and cut the rate, but the oil
companies gave us the work anyway. In the '73 season, Arctic
Marine Freighters has been revitalized, and PAC is now a partner
in Arctic Marine Freighters. We're working together again.
Feingold: How did PAC get back in there again?
68
Crowley: We feel that it is far better to work in the Arctic as joint
ventures because it's extremely dangerous country; you can get
into all kinds of difficulties up there; it's no place to fool
around with; and everybody needs all the help they can get.
Feingold: What sort of problems in particular make it difficult?
Crowley: The biggest problem is ice, the polar ice pack. The polar ice
pack is an area of extreme dangers to all types of water-borne
vessels. When you realize that the Arctic ice pack penetrates
down into the Bering Sea during the winter time so that the area
up there is absolutely unnavigable for at least six months of the
year, and the Arctic ice pack remains up against the northwest
coast of Alaska until mid-August and then opens up a lead, and
then closes up, and opens up and closes up, so that you're lucky
to be able to skate around the northwest coast of Alaska and Point
Barrow and the Arctic coast of Alaska, and get in and get out '
with a shallow draft tug and barge. If you don't get caught in
the ice and crushed, you're damn lucky.
You can go off the record if you want, but I'll read you
something. [refers to "Arctic Report," a special issue of Oil
and Gas Journal, October 22, 1972, on Arctic conditions] Good
sea ice forecasting can be indispensable to Arctic operations.
These guys are Lieutenant Commander Den and F.D. Hughes, who are
supposed to be Arctic experts.
He's talking about the Arctic pack as an "ever-
moving, always changing mass of sea ice. Every flow,
because of differences in size, thickness and topography,
has a different sailing ability effect of wind and
current from the next flow. Tremendous forces, which are
currently under study, are at work making the sea ice a
formidable opponent for surface shipping. In relation to
sea ice, where shipping usually occurs, the northwest coast
of Alaska, north of Icy Cape" (that's a cape on the western
side Alaska goes up like this: Barrow is up here, and the
northwest cape is over here) "the north coast of Point
Barrow to Barter Island is perhaps the most hazardous area
in the world, except for parts of the north coast of Asia.
In general, a shore lead develops late in July" (a lead is
an open waterway to go in) "and continues till freeze-up
early in October. This lead may or may not close at one or
more places during the navigation season. It is not unusual
for the lead to close again and again from Point Franklin to
Point Barrow.
"A tongue of ice south of the main pack extending to
Point Franklin" (this is further down the Bering Sea) "as
a result of the small counterclockwise whorl in the southwest
69
Crowley: to northeast ocean current, may remain close to the coast
during the entire summer. Nor is it unusual -for the pack
to remain close to or right on the coast in the Cape
Simpson area.
"Another area of concern is Camden Bay, where the ice
persists close to the coast. Surface shipping plying these
dangerous waters may be beset by the ice or even driven
aground as a result of the tremendous force of the pack.
The deeper draft the vessel, the more hazardous the
threatening pack."
Then it goes on to say that even icebreakers don't it's very,
very dangerous country. We feel very strongly that every assistance
we can get should be taken advantage of; and we should be in the
thing with partners to spread the risk as much as possible, because
there is a tremendous risk involved.
It's damn dangerous country. We've got movies of the resupply
job up there. You see the ice these tugs and barges go through,
and you say, "Oh, my god." It's ridiculous. I mean, it's very
dangerous. It's a job that the navy, when they were resupply ing
all they were doing was resupplying the DEW line sites, which we've
done for fifteen years and every year they went up there, it was
an expedition. When they got back, they gave medals to the
commanders of the expedition for their bravery in going into the
ice. As these guys say [referring to "Arctic Report"] it's probably
the most dangerous place in the world.
[reads] "The northwest coast of Alaska, north of Icy Cape,
and the north coast from Point Barrow to Barter Island is perhaps
the most hazardous area in the world, except for parts of the north
coast of Asia" (that's north of Siberia).
Feingold: What does Arctic Marine Freighters carry mostly?
Crowley: Just drilling mud, cement, large objects that they can't fly in by
plane, pipe, drilling rigs, machinery, trucks, anything they need
on the North Slope.
See, most of the stuff on the North Slope, or a lot of it
you see the Arctic Marine Freighters can only go in once a year
in the summer time. They've got to go in and get out. The oil
companies don't have sufficiently well-developed crystal balls to
be able to predict what they need for a year in advance, or a year
and a half in advance, because they have to plan what they require
up there for the succeeding year and then start planning to purchase
it and ship it to Seattle six months ahead of time. So, a lot of
the stuff that goes to the Arctic slope is flown in by plane; in
fact, you either get it there by barge for a few weeks in the
summertime or you fly. There are only two ways of getting there.
70
Crowley: They have these big hercules star lifters there for freight planes
that fly in there. But it's rather expensive to fly big, heavy
stuff in on airplanes. Therefore, they barge as much as they know
they are going to use. Even at that, they make some very serious
mistakes. In fact, the casing that we took in to Foggy Island
in 1968 they've never used, and they've been talking about
bringing several thousand tons of it back again.
Oil drilling changes from hour to hour and day to day; it
isn't just a regular manufacturing process. They don't know what
the hell they want or need or are going to need, and it's very
difficult for them to plan to get the stuff there. They usually
figure on just flying it in, and if they can get it in by barge,
so much the better.
They certainly know they're going to need drilling mud, but
they don't know what kind of drilling mud they're going to use,'
because there's a million different kinds of drilling mud.
Depending on the down-hole pressure and all different kinds of
conditions, they just don't know what they're going to use in the
way of mud.
The first couple of years we were up there, they found that
working and drilling the permafrost, they added water to the drill
mud, you know, to make a mud that would go down, and they found
the damn water froze; therefore, they couldn't go down the holes
with it. Then they decided the only way they could make the mud is
to put diesel oil in it instead of water. So they make their mud
with diesel oil arctic diesel oil which stays fluid down to minus
sixty or thereabouts. That worked fine, so they decided they
needed several million gallons of diesel oil. It cost about a
dollar a gallon to fly diesel oil into the North Slope. You can
imagine. We took a big barge-load of diesel oil up to them and
saved them a lot of money.
The logistics of oil drilling and building pipeline on the
north slope is fantastic.
Feingold: It must be, because there must be just a limited number of barges
that you could get in there in the time period.
Crowley: That's another point, too. There is a limited number of barges.
If the pipeline had gone ahead the way they had planned it, they
never would have been able to barge in all the stuff they'd hoped
to barge in, because of a lack of barges.
When the thing starts up again, if it does, and it's going to
have to, it's going to be an awful problem as to barges and equipment
to go into there, with the amount of cargo they want to take in
there.
71
Feingold: How many barges do you have going in there now?
[interruption]
Feingold: You said there were about five or six barges going in this summer?
Crow ley: Yes.
Feingold: What would the upper limit have been, let's say that the pipeline
Crow ley: When we went in with the pipe with the 200,000 tons, I think we had
something like around fifty barges in there. Some of these are
small barges. We had about fifty barges and thirty tugs if I
remember right sixty barges and thirty tugs, something like that.
That was a big job.
Feingold: Would that be one tug to a barge?
Crowley: No, usually one tug will tow two barges.
Feingold: Would it be like a safari, with just a long string of tugs towing
barges?
Crowley: Yes, in a kind of a convoy, you might say, they go up there. But
when you get up to Icy Cape, just past the Bering Straights, then
each tug and its barges is on its own. He tries to find his way
through the ice as best he can.
The year we went up with the big load, we were stuck for
thirty days in the ice just north of the Bering Straights. Some
of the tugs were pushed in close to the beach and almost put
ashore; others were pushed off shore. We have to have a plane up
there. We have an ice expert, one of our men who's" pretty good
at it and has been going up there for a long time; he goes up in a
plane every day that the weather's adequate and tries to find
leads in the ice and tell the tugs where they ought to try and go,
whether they should go back, or just what they should do. We
try and direct it from a plane which can see a lot better over the
ice, rather than the fellows on the tugs because they're right down
in the ice pack. Sometimes they can't even see over the ice that's
right next to them.
Oregon Coast Towing
Feingold: Perhaps we could move on to warmer waters. You mentioned Oregon
Coast Towing last week. I was wondering if that fits in the
picture here.
72
Crowley: Oregon Coast Towing was a tugboat company we started up in Coos
Bay, because there's some pretty good tugboat men working in Coos
Bay that live in there; and so we started a towboat company. We
started originally to haul sand and gravel and rock up the Umpqua
River to Reedsport. There was quite a bit of work going on up
there on the jetties. We started this local towboat company and
did a considerable amount of work up there. It's still in
existence and furnishes towage services on the coast. They only
have a couple of boats; it's a small company that uses personnel
from Coos Bay.
Feingold: What size tugs are they?
Crowley: They got a 2,800 horsepower tug and a 1,000 horsepower tug.
Feingold: I came across notes on a clipping from 1962 that a tug named
Resolute had just been remodeled.
Crowley: Yes. The Reso_lute was a tug we bought from the Maritime
Administration after World War I and used it in San Pedro Harbor
for a number of years, and then brought it up here in 1962 and
rebuilt it at the shipyards. It was one of the last rebuilding
jobs we did because it cost a fortune to do. It's better to build
new tugs than it is to rebuild old tugs. We put a new engine in
it and rebuilt the tug. Then it went to work for Oregon Coast
Towing Company.
Feingold: This clipping said that it would haul lumber barges?
Crowley: Yes. They were towing lumber barges at the time. That's one of
the reasons we had a tugboat company in Coos Bay, because it takes
a little while to load the lumber barges up in that area; if the
tugs are stationed there, the men can go home while the barge is
loading .
We're hauling lumber out of Bandon, Coos Bay and Reedsport and
Eureka and Crescent City.
Fingold: Is it still involved in the lumber trade?
Crowley: No. As I told you, we went out of the lumber business gradually
because of the depressed rates occasioned by the rail competition.
Feingold: Is there any particular product now that Oregon Coast tows?
Crowley: They're towing mainly oil barges.
73
VI HARBOR TUG AND BARGE
Developing Passenger Service on the Bay
Feingold: Getting back to the Bay Area, can you tell me how Harbor Tug and
Barge got started?
Crowley: Harbor Tug and Barge Company was started in 1926 by a combination
of the Oakland Launch and Tugboat Company and the Henry C. Peterson
Company, Inc. Oakland Launch and Tug was owned by American
Dredging Company, which was owned by the Harris Brothers. Henry
C. Peterson Company was a stock company owned by various stock
holders, and the Anglo Bank of Mr. Fleishhacker's days had a
substantial interest in it also. They were competitors in the
tugboat business; they'd been in the large tug business and they'd
been in the small tug business. They'd competed with my father
for many , many years .
Then, as I say, in 1926, these two companies combined to form
Harbor Tug and Barge Company. They expanded quite rapidly and
started cutting prices and really cutting a wide swath in the
tugboat business in San Francisco Bay under a guy by the name of
Dizzy Williams.
When the crash came in the '30s, they were in serious financial
difficulties, and so were both their parent companies, American
Dredging and Henry C. Peterson. So the Crocker Bank, who was a
large creditor of American Dredge, arranged with my father to
purchase a 55 percent interest in the Harbor Tug and Barge Company
under the table, so to speak. It was held in the name of the
Crocker Bank or A. Hooper and Company for many years, and ostensibly
run by a fellow by the name of C.C. Kremmler.
Then later on, we acquired the other 45 percent of this company;
since about 1940 or so, we've owned 100 percent of Harbor Tug and
Barge Company.
74
Feingold: Why was this deal with Crocker " under the table" so to speak?
Crow ley: Because one of the main values of the Harbor Tug and Barge Company
was to have a different company operating in competition with
Crowley Launch and Tugboat Company. For one thing, Harbor Tug and
Barge Company had a good reputation with customers that they would
cutter any rate, and so the customers flocked to them.
Also, they had a better reputation with the unions than we
did. From time to time, Crowley Launch and Tugboat Company got
tied up on strike; but the Harbor Tug and Barge Company continued
to operate at the old wages. Since we owned the Harbor Tug and
Barge Company but nobody knew it, it makes an awful lot of
difference.
Feingold: Mr. Figari said in his interview that he thought there had been a
Peterson Tugboat Company right after the earthquake.
Crowley: Yes. Henry C. Peterson was a big Swede who was a boatman the same
as my father was. He had gone into the launch business about the
same time my father had. He had a Peterson Launch and Tug Company,
as I understood it; that was in business before the earthquake,
from about the turn of the century.
About 1915, the Henry C. Peterson Company, Incorporated was
organized as a successor to Peterson Launch and Tug. Henry C.
Peterson had only a small in that company and it was not very
active. That was the company that was dominated by the Anglo Bank
and the Fleishhacker interests, and various and sundry people were
stockholders in it. It competed with Shipowners and Merchants
Tugboat Company until the mid '20s. It also had small boat
operations combined into the Harbor Tug and Barge Company,
Feingold: Mr. Figari also thought that Mrs. Peterson that they were divorced
at some point and that Mrs. Peterson had a company of her own?
Crowley: This is news to me. I'm not familiar with Henry C. Peterson.
Really, I never knew Henry Peterson. Willy [Figari] would know
more about that than I would. All I was familiar with was the
Henry C. Peterson Company Inc. that was a corporation owned by a
lot of different stockholders and dominated by the Anglo-California
National Bank, Fleishhacker interests.
Feingold: How did Harbor Tours get started?
Crowley: My father was always in the passenger transportation business,
hauling people out to ships in the stream. Also, in 1915 he
built a couple of double-deck passenger boats which he called
the double-deckers for taking bay excursionists out from the
Panama-Pacific International Exposition down on the Marina. My
75
Crowley: father operated those passenger boats through the '20s, and also
had a picnic park over in Marin County called Paradise Park and he
used to carry picnickers over there.
In the early '30s, passenger transportation to the battleships
started going to water taxis, which were small, high-speed boats,
as distinguished from the old launches. So the Crowley Launch and
Tugboat Company, in 1931 or '32, built some water taxis that
carried passengers, in addition to the double-deckers. The double-
deckers were bigger boats; the water taxis were smaller boats and
could go along side the gangway of a battleship.
Feingold: Were the water taxis glass enclosed?
Crowley: No, they just had a canvas over them.
Then, in 1939, the Golden Gate International Exposition at
Treasure Island came about. We built a couple more water taxis,
the Crowley I and II. They were glass enclosed and they were used
for carrying passengers from Treasure Island over to Alcatraz and
around the Bay and back again, as were the double-deckers.
Then came World War II. Well, the double-deckers when World
War II came along, we ripped the deck houses off them and converted
them into tugboats because there was a scarcity of tugboats . We
put new diesel engines in them and made tugboats out of them. The
water taxis continued to run out to ships in the stream anchored
out there.
I forgot to mention that on September 30, 1939, Crowley
Launch and Tugboat Company was tied up on strike by the MEBA.
They went out of the passenger business then and they never went
back into it.
In the meantime, the passenger business was conducted by
Harbor Tug and Barge Company, which had also bought some water
taxis and was in the passenger hauling business. That passenger
hauling business of the Harbor Tug and Barge Company had been
handed down from the Peterson Launch and Tug Company into the
Harbor Tug and Barge Company.
At the end of World War II, Harbor Tug and Barge Company built
a couple of flat-bottom passenger boats that were somewhat similar
to the double-deckers, and started hauling people over to the
picnic park and running excursions out on the Bay. Then they
started running out of Pier 16 at the Ferry Building. Then they
gradually worked down the waterfront and finally ended up hauling
sightseers out of Fisherman's Wharf. This was done under the name
of Harbor Tours. It was put in a separate corporation because
there was a tremendous amount of liability involved in hauling
passengers on the Bay.
76
Golden Gate Scenic Steamship Company
Crow ley:
Feingold:
Crowley:
Feingold:
Crowley:
Then there was another company hauling people out of Fisherman's
Wharf, called the Golden Gate Scenic Steamship Company, which was
owned by a syndicate of people familiar with the water business.
They were in the steamship business, most of them. They operated
a boat called the Frank M. Cox, a former government-owned vessel,
that carried passengers to Angel Island. They went broke, and
Harbor Tug and Barge bought the Golden Gate Scenic Steamship
Company and operated the excursion boats. Golden Gate Scenic
Steamship Company junked the Frank Cox and used Harbor Tours as a
ticket-selling agent for Golden Gate Scenic Steamship.
How many boats now does Harbor Tours have?
Harbor Tours doesn't have any boats; Harbor Tours sells the tickets
for the Golden Gate steamers. Golden Gate Scenic Steamship Company
rents from or charters from subsidiary companies of Harbor Tug and
Barge Company five steel boats of about four or five hundred
passenger capacity, to run excursions out of Fisherman's Wharf,
ferry service to Tiburon, and ferry service to Angel Island.
At one time I may be thinking of that Golden Gate Scenic Steamship
Company was there another outfit running passenger tours on the
Bay, run by a woman?
There was Golden Gate Scenic Steamship Company, and there was a
fellow by the name of Russell a man and his wife, I can't remember
his name we'll get that later. [checks with John Jenkins in
adjoining office] He went out of the business and ran a sport
fishing boat out of Sausalito and then went over to Honolulu and
I think he's still there,
over there or not.
I don t know whether he runs a boat
Feingold: Why did he go out of business, wasn't it going well?
Crowley: He thought he'd do better over in Sausalito anyway. I don't
remember that. He started to run a ferry service too we got in
a big hassle over that out of Belvedere and Tiburon. He went
out of business. He felt he could do better running sport fishing
out of Sausalito, and that's what he did.
The trouble with the business is that it's highly seasonal;
you can make money in the summertime but you can lose your shirt
in the wintertime. I think he folded out of business one winter
and started doing something else and never went back in.
Feingold: When did the ferry to Tiburon start?
77
Crowley: Well, it's been running twelve or thirteen years now, so I guess
it started about 1960.
Feingold: That was started by Harbor Tug and Barge?
Crowley: Yes.
Feingold: How did something like that come about?
Crowley: They had boats and they were running sightseeing excursions out
of Fisherman's Wharf, and hauling people over to Paradise Park,
and chartering them out to anybody who wanted to take a trip in the
Bay. Then they got the idea that it would be a good idea to try
and haul commuters out of Tiburon over to San Francisco because the
bus service wasn't so good or something like that, and they just
started doing it.
Feingold: This is from a note that Mrs. Baum took from your father's
scrapbook, I think: Was the ferry from Tiburon chartered from
another transportation company which chartered it from Harbor
Tug and Barge? Does that make any sense at all?
Crowley: No. The Tiburon ferry developed from the fact that Golden Gate
Scenic Steamship Company chartered the excursion boats from
excursion-boat-owning subsidiaries of Harbor Tug and Barge Company
and ran excursions down to the Golden Gate Bridge and around the
Bay and so on.
When we started running the ferry service the ferry service
is regulated by the Public Utilities Commission we put all our
operating rights and Public Utilities Commission business in a
company called Harbor Carriers, which is also a 100 percent owned
subsidiary of Harbor Tug and Barge. So, in order to do the ferry
service, Harbor Carriers charters the sightseeing boats from
Golden Gate Scenic Steamship Company to run the ferry service in
the morning and the evening; and during the day, Golden Gate
Scenic operates those boats and the sightseeing service.
Feingold: What advantage does all that have?
Crowley: The reason we started Harbor Tours was to isolate the liability
of hauling passengers. Then after Harbor Tours operated for a
while, and Golden Gate Scenic Steamship Company competed with
them and finally got into financial difficulties, we bought Golden
Gate Scenic Steamship Company. There we had a corporation that
had a substantial tax loss carry forward.
We decided that we would not operate sightseeing boats with
Harbor Tours anymore, but we'd operate them with our newly acquired
company, Golden Gate Scenic Steamship Company, to work off the tax
78
Crowley: loss and also to Harbor Tours, that had been selling the tickets,
had built up a certain amount of net worth, and Golden Gate Scenic
Steamship Company had absolutely no net worth whatsoever in fact
they had a negative net worth. So, we felt that if we chartered
the boats to Golden Gate Scenic Steamship Company and had that
company operate them, that would reduce our liability; because, if
Golden Gate Scenic had nothing and they wiped it out in some kind
of a court case, they wouldn't be wiping out much.
It had the double advantage of further limiting our liability
and also giving us the benefit of getting a tax loss carried
forward, because we conducted exactly the same business as Golden
Gate Scenic Steamship Company who had acquired this big loss, and
therefore, under the tax laws of that time, it was permissible to
do so.
Then, when you talk about running a regulated ferry service,
we had to conduct that under a regulated company that has a
certificate of public convenience and necessity from the Public
Utilities Commission of the State of California for the
transportation of persons and property between points in California.
Therefore, Harbor Carriers was the company that had the operating
rights. We had put the operating rights under Harbor Carriers
many years ago, so that they would be all in one company, because
a public utility company is regulated rather severely. You have
to keep your books of accounts in a certain manner, you have to
file tariffs, publish profit and loss statements, and so on and so
forth.
So Harbor Carriers was the vehicle which does the ferry service
on San Francisco Bay, and that's why the boats will be sub-chartered
from the Golden Gate Scenic to Harbor Carriers.
This gets a little complicated, but you asked the question
and I'll try and answer it.
Relations with the Golden Gate Bridge and Highway^ District
Feingold: Have you ever tried to get into the Sausalito ferry?
Crowley: We struggled for years to get into the Sausalito ferry. But Golden
Gate Bridge and Highway District has used every political trick
they could to keep us out. I saw in the paper the other day that
some court decided that we had every right to go into Sausalito
and they couldn't do anything about it. Al Ellidge handles all
that, but he's been over in England. I haven't found out what it's
all about.
79
Feingold: What was the beginning of that story?
Crow ley: The beginning of it was
Jenkins: [enters briefly] Russ Lewis.
Crowley: Russell Lewis [also ran passenger boats on the Bay], The beginning
of the Golden Gate Bridge and Highway District story was that we
were running this service over to Tiburon and we got tied up on
strike in 1969, so the commuters had to come across the bridge.
The Bridge District asked us if they chould charter our boat, and
they made a deal with the union whereby they'd operate under the
old wages. So we chartered the boat to the Bridge District and
they brought the commuters back and forth.
Then they acquired another boat down in San Diego and brought
it up here and started running out of Sausalito. In the meantime,
we had been attempting to get a Certificate of Public Convenience
and Necessity to run out of Sausalito and the Public Utilities
Commission finally granted it to us, but by that time, the Bridge
District were into Sausalito, and they used all fair means and
foul to get the Sausalito City Council to keep us from running in
there. That's I don't know four or five years now four years.
Apparently we've been suing them or something, and the court
decided we ought to be allowed to run. We are a private enterprise
and we did get permission from the Public Utilities Commission to
run, and so on.
I don't think we've got much of a chance because the Bridge
District is throwing money away like it's going out of style.
Feingold: On what?
Crowley: On their ferry service, for example. They lose about a half a
million dollars a year on the operation of that ferry.
Feingold: They must have to work very hard at it.
Crowley: No, it's not hard to lose half a million dollars a year. When you
get through paying union wages on the San Francisco waterfront,
you can drop a half million a year just like that, that's no
problem at all. But, they have now ordered three highly experimental
$4,000,000-a-copy boats, which are presently being built for them,
and we estimate that they will lose about $5,000,000 a year with
that equipment, running a ferry service. The question is they
know they're going to have to raise the bridge tolls to help carry
the losses of the existing ferry service and the existing bus
service; but their big problem will be, when they get these ferries,
whether they will be able to raise the bridge tolls enough to make
up the deficits, the huge deficits, they'll have with the new
ferries .
80
Crowley: The boat they run now is a relatively economic boat. She's a
commercial design and she was built by commercial people who knew
what they were doing, and she has a capital cost of about $700,000
or $800,000, and she carries six hundred passengers. They lose
roughly a half million a year.
When they get these three ferries that are going to cost them
four million dollars apiece, and they only carry a hundred people
more per boat seven hundred passengers and they carry a much
bigger crew and burn a tremendous amount more fuel, and be 7,500
horsepower, as distinguished from 2,000 horsepower, so they'll
burn 31/2 times as much fuel, and the crew costs will be at least
double and probably considerably more, and the maintenance cost
and insurance and all that they'll be losing around five million
a year with those ferries. Whether the bridge tolls can support
that extravagance or not, nobody knows.
Feingold: Do they need that much horsepower to get from Sausalito to here?
Crowley: No, they intend to run these ferries from Corte Madera down here.
No, they don't need that kind of horsepower. The four million
dollars they're spending a commercial boat that could do the same
job should cost less than a million dollars.
They just don't know what they're doing. They're a bunch of
political appointees on the board of directors. They're headed by
a guy by the name of [Stephan] Leonoudakis whose family is in the
parking lot business, and he thinks it's a good idea to put ferries
on the Bay. The only trouble is, he doesn't know the first thing
about a ferry or how much they should cost. But you can't tell him
that.
Feingold: Do any of the members of the Bridge District know anything about
ferries?
Crowley: In my opinion, no. I don't know how they would know, unless by
divine revelation they might have learned something, but that's
about the only way.
Feingold: Do they have some kind of arrangement with Harbor Tug and Barge,
because I noticed when I took the ferry to Sausalito a couple of
weeks ago that it's from the same loading area as the Tiburon ferry.
Crowley: That's Harbor Tug and Barge's loading area. Harbor Tug and Barge
put that in and we allow the Golden Gate ferries to use it.
Feingold: Do they pay you a fee for that?
Crowley: One hundred dollars a month.
81
Feingold:
Crowley:
Feingold:
Crowley:
Feingold:
Crowley:
That's a real bargain rate.
A real bargain rate, yes. Well, the point is, when you do business
with a public body, it's just impossible. They're just an impossible
group that want everything their own way; and anything you do is
100 percent wrong and everything they do is 100 percent right.
That's incredible!
It's incredible that they would use every means at their power to
keep us from running into Sausalito. That's a pure dog-in-the-
manger. If you were in business and did that to a competitor, he'd
sue you for triple damages or something.
They're landing here on your sufferance, unless they wanted to
build themselves a new docking area.
That's right,
we'll go on.
We thought it not too politic to kick them out, so
Ferry Service to East Bay Points
Feingold: I came across notes on a clipping from 1948 that Harbor Tug had
applied to operate commute boats in the Oakland Estuary.
Crowley: Oh, yes. We used to run a service from the foot of Broadway over
to the Alameda Naval Air Station. We did that for a number of
years, and that finally petered out.
Feingold: Was that just a commuter thing?
Crowley: Yes. That was just run back and forth to take the workers over
there, because the Alameda tube was so badly plugged up with
traffic that it took people too long to get over to the Naval Air
Station in Alameda. So we ran this ferry service.
The trouble is, in the United States, with people wedded
to the automobile, you can't run the successful ferry service
where somebody has to go park their car, walk over to the boat,
get into the boat, get out of the boat and walk someplace else,
because people in the United States just don't do it. They're
used to driving their car. Europe is a little different matter,
and Japan is a still different matter, and Russia is even greater
people ride all kinds of boats in Russia, up and down the Volga
and every place else. If they don't ride a boat, they don't get
there, so they ride the boat.
82
Crowley: But in the United States, where everybody has a car or two, you
take your car wherever you go and you don't go unless you can take
your car. This is one of the things that the Golden Gate Bridge
and Highway District doesn't realize and it's one of the reason
they'll lose about five million bucks a year running a ferry
service across the Bay. But that's life.
Feingold: This clipping also went on to say that these boats also made
trips to Golden Gate Fields during racing season.
Crowley: Yes. We used to run a ferry service during the racing season from
Pier 16 over to Golden Gate Fields. That finally petered out
because they were running buses. The bus service wasn't very good,
so we took them over on boats for a while. Then people started
drifting away from that and back to the buses.
I know why. Because when we first ran over there, we could
go right practically to the grandstand with the boat. Then they
moved the landing a little further out in the Bay, and people had
to walk to the grandstand. So they forgot about the boat and rode
the bus.
We also used to run boats out to Candlestick Park. That was
only in recent years . They they improved the parking lot out
there, and the landing area shallowed up. It got to be uneconomical,
so we quit that.
Hauling Sugar Beets and Gravel
Feingold: Did the boats over there this note says also haul sugar beets?
Crowley: Harbor Tug and Barge used to haul sugar beets up in the Delta
district. For many years they did that. In other words, sugar
beets are quite a crop up in the Delta islands. They would truck
the sugar beets to a beet loading dump on the various islands, and
the sugar beets were hauled either up the Sacramento River to a
sugar company at Clarksburg or down to the Holly Sugar Company at
Tracy. But with the ever- increasing costs of maritime labor, and
the improved roads and bridges in the Delta district from these
various islands, the sugar beet business gradually dropped off so
that it died out completely. The strike in '69 was the end.
We also used to haul beets from the Delta district down to
Clinton Basin in Oakland, where they were trucked from there down
to the sugar beet factory down near Fremont. And that was
discontinued. You see, there was a sugar beet factory down there
on the eastern side of the San Mateo Bridge, because there were a
83
Crowley: lot of sugar beets raised down there in the old days. But with
the General Motors and Ford assembly plants, and' the houses built
up in that area, it eliminated beet sugar raising, and also they
tore the factory down and they discontinued making beet sugar
down there. So that discontinued the beet haul into Oakland.
Feingold: Was gravel also hauled?
Crowley: Yes. They used to haul a certain amount of crushed rock and
gravel and sand. But that's all moved to well, the main problem
there is that the main gravel pits and sand producing areas now
are over in Livermore Valley. Kaiser has developed those
extensively. So that all moves by truck and rail to the various
distribution plants around the Bay Area.
It's a combination of those gravel pits being developed and
the ever- increasing costs of maritime labor which eliminated the
water haul.
Feingold: It sounds like maritime labor is pricing itself right out of many
of their jobs.
Crowley: There's no question about it, and they know it too. But what can
they do? The leaders of maritime labor know it. I think I told
you this before. But the men themselves don't understand it; they're
always pushing on ever forward to get their wages increased and
they're eliminating business. That's why there are no American
passenger liners any more.
A lot of water transportation is going down the drain because
of a lack of understanding on the part of the employees. Our
future generations will say that the shipowners were awfully
stupid not to educate their employees to the fact that they ought
to accept a lower wage in order to keep their jobs going. But
that's an expensive educational process.
Colorful Characters
Feingold: Is there anything else you want to add about the activities of
Harbor Tug and Barge?
Crowley: No, nothing particular. I could go on forever about Harbor Tug and
Barge Company. Now, Joe Jerome I could talk about him for a week
at a time.
Feingold: What does he do?
84
Crow ley:
Feingold:
Crowley:
Feingold:
Crowley:
Feingold:
Crowley:
Feingold:
Crowley:
Joe Jerome was a gas skinner that's a boat operator who used to
run boats for the Peterson Launch and Tug Company and then the
Harbor Tug and Barge Company. He had been a member of the union
all these years and he worked himself into the union hierarchy.
He also used to
The MEBA?
Yes, MEBA. He was quite a power in the union,
be a rum-runner during Prohibition.
That wasn't Blackjack Jerome?
We used to call him Blackjack Jerome, but there was another
Blackjack Jerome back in New York or someplace who was quite a
character.
Blackjack Jerome who was active in Alameda County in horse racing
and betting parlors, and things like that.
Oh, I see. Well, this guy was a real character. He popped up
in a lot of stuff, but he was mainly connected with the boat
business and the union. Stories you could tell about him would
go on forever. He was a good man with the whiskey bottle. He
wasn't afraid of anything. He was a World War I hero too; he had
the highest decoration in the war. He wasn't afraid or gave a
damn about anything. He'd pull a gun and shoot you as quick as
look at you; he didn't care about nothing. He was a fantastic
character; quite an intelligent person too, but just uneducated.
He was rough, tough.
Lester Bedient was the general manager?
He's the general manager now. He started in with the company as a
deck hand. In fact, he was Jerome's deck hand for a while, and,
Christ, the stories he could tell about going out to the light
ship in their old launch and all that sort of stuff it's just
unbelievable. They towed a barge in and out of the mouth of the
Russian River. That was a real hairbrain scheme. They were going
to get sand and gravel out of the Russian River in the '20s with
Dizzy Williams promoting the thing.
Then Utah Construction and Mining somebody sold them on the
idea they could get sand gravel out of the Russian River about
eight or ten years ago. They dropped five or ten million dollars
in that hole. They chartered a couple of barges from us for
three years and they never turned a wheel the whole time.
Before they ever started, we said, "For Christ's sake, are
you crazy? The Russian River people have been talking about
getting sand and gravel out of there for a hundred years . They
85
Crowley: tried it in the '20s and it was ridiculous. We've got pictures of
boats going in and out of there. We've got people here who
actually went in and out, and they'll tell you how foolish it is."
Les told them, "Jesus, it's ridiculous," and all the reasons
why. They went ahead anyway, and they dropped somewhere between
five and ten million bucks on the project.
Feingold: Who were these people?
Crowley: Utah Mining and Construction Company. They're a big outfit here,
presently run by a guy by the name of Ed Littlefield, the son-in-
law of a Mormon. It's a big outfit.
In fact, they're the outfit that put the coal mine down at
Four Corners so that they could build that big steam generating
plant that's contaminating Arizona, New Mexico and everything else
with all the dust you read about that?
Feingold: Yes .
Crowley:
Feingold
Crowley:
That's a Utah project. They got a lot of big projects cooking.
This wasn't one of their better ones I guess.
No, that wasn't. They made the manager of the project the scrapegoat
and fired him.
86
VII SAN PEDRO TUGBOAT COMPANY
[Interview 3: April 23, 1973]
Origins of the Company
Feingold: It's San Pedro Tugboat Company today.
Crowley: Okay. San Pedro Tugboat Company. In 1923, the City of Los Angeles
started developing the Harbor of San Pedro with the dredging of
piers and so on. They wanted a tugboat service to LA harbor in
order to dock and undock ships and so on. So, the Shipowners and
Merchants Tugboat Company sent the Sea Prince, and some of their
other smaller tugs, down to San Pedro. They also sent Captain
Ernest Mohr, one of the tugboat captain pilots, and set up a
company called San Pedro Tugboat Company to operate tugs in Los
Angeles harbor.
The Wilmington Transportation Company, which was a company
that furnished transportation over to Catalina Island, owned by
the Wrigley Gum interests, also put some tugs in operation to
handle ships in the harbor. They had some tugs with which they
towed barges over to Catalina, but the main service to Catalina
was by big steamers.
San Pedro Tugboat Company and Wilmington Transportation
Company tugs competed for business in LA harbor from 1923 on.
In about 1925, Crowley Launch and Tugboat Company sent some
smaller diesel tugs to San Pedro harbor to be operated by the
San Pedro Tugboat Company on an agency basis.
The competition was extremely keen all through the '20s and
on into the '30s. In the early '30s, the company had been losing
a considerable amount of money, and Shipowners and Merchants
Tugboat Company wanted to get out of this continual drain. So
Crowley Launch and Tugboat Company bought the San Pedro Tugboat
Company from the Shipowners and Merchants Tugboat Company in about
1934 and commenced a conversion program of converting the smaller
steam tugs into dies el-powered tugs.
87
Feingold: Why did Crowley Tug buy out San Pedro and make the changes. Why
couldn't Shipowners and Merchants have done the same thing?
Crowley: Because Shipowners and Merchants Tugboat Company in the '30s was
solely a steam tug company. They operated steam tugs, large steam
tugs. Shipowners and Merchants Tugboat Company had also lost
considerable money operating steam tugs in San Pedro.
Crowley Launch and Tugboat Company operated diesel tugs ; and
they had lost a certain amount of money in San Pedro harbor too.
But, if we were going to stay in the business, the fleet down
there had to be dieselized. My father was extremely reluctant to
put this additional load on Shipowners and Merchants Tugboat
Company, particularly in view of the fact that nobody in Shipowners
and Merchants Tugboat Company knew a damn thing about a diesel
engine anyway.
It was relatively a small tug operation, as distinguished
from a big steam tug operation. He felt it more prudent to have
Crowley Launch and Tugboat Company make the additional investment
of repowering these tugs and going into the diesel tug business
in San Pedro harbor, to be competitive with Wrigley.
It was a risky venture because it was an extremely competitive
deal. We were fighting for our very life down there in competition
with the Wrigley Gum Company, which had plenty of money. Old man
Wrigley looked on the little tugboats running around the harbor
as kind of a nice toy and he didn't care how much money they lost.
It was a tough, competitive situation, and my father decided
that it would be better that Crowley Launch accept that risk rather
than Shipowners and Merchants Tugboat Company.
The tug Sea Lark, Sea Prince, and Sea Witch were all repowered
with Union diesel engines.
Feingold: What kind of diesel engine?
Crowley: Union, made over in Alameda. Union diesel.
Feingold: Was that the name of the company or a type of engine?
Crowley: The name of the company. Union direct reversible diesel engines.
These tugs were renamed the Crowley #24, ex-Sea Lark, the Crowley
#25, ex-Sea Prince, and also the tug Harbcnr was repowered and
sold to Crowley Launch and Tugboat Company and renamed the
Crowley #27. The Crowley #2j was the Sea Witch repowered with a
450 horsepower Union. No, the Crowley #28 was the ex-harbor tug
A.E. Williams repowered with a 450 horsepower Union, and the Crowley
#29 was the ex-Sea Witch repowered with a 450 horsepower Union.
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Crowley: This fleet of diesel tugs remained in competition with Wilmington
Transportation Company through the '30s and the '40s. After the
war [World War II] a gradual replacement of the older tugs of the
San Pedro Tugboat Company fleet was commenced by using war surplus
diesel tugs. The ex-miki tug was renamed Relief, and she was the
flagship of the San Pedro Tugboat Company fleet in the late ' 40s
and early ' 50s .
Shortly after the beginning of San Pedro Tugboat Company in
1924, Captain Ernest Mohr, who was the manager, became ill, and
he was replaced by Captain William McGillivray who managed the
San Pedro Tugboat Company up until the late '60s.
Mrs. Lillian Bunkers, commonly known as "Tillie," went to
work for San Pedro Tugboat Company in about 1920 well, she went
to work; and she is retiring in 1973 after fifty years of service.
She was commonly known as Tugboat Annie in San Pedro; and gave'
orders to the tugs via a hand-held megaphone, and her voice was
adequately strong to carry pretty well around the harbor.
Feingold: In Captain McGillivray 's interview, he mentioned that Standard
Oil had been one of the groups that had originally asked the tugs
to come down. Is that correct?
Crowley: Yes, because the Standard Oil tankers were starting to use you see,
Los Angeles harbor, since the days of the Spaniards, was nothing
but a little mud hole. In the early '20s, the federal government
allocated some large sums to dredge out the harbor and form a
deep-water harbor there. Standard Oil started using it. Standard
Oil originated up here in Richmond, and then they decided to build
a refinery in Southern California at El Segundo and they had their
tankers running into the newly dredged harbor and wanted tug
service.
The Tugboats
Feingold: I see. How many tugs did you say there were originally three?
Crowley: I don't really remember how many tugs went to San Pedro. There
were about five tugs that went to San Pedro at first. Let me see,
there were four of the old, smaller old steam tugs, and then there
were three of the small diesel tugs of Crowley Launch. So there
were about seven tugs to start with.
Feingold: Captain McGillivray remembered taking Crowley^ #9 down and that it
was renamed the Aiax.
89
Crow ley: Right. The Crow ley #9 was originally a fishing tug, the Paladini
or something like that, (checks in Merchant Vessels in the United
States]
The Crowley //9 was formerly the steam fishing tug Paladini
Brothers , and was built in 1915. She was purchased by Crowley
Launch and Tugboat Company in the '20s and a Pacific [inaudible]
diesel was installed in her. It proved to be unsatisfactory.
She was later repowered with a Fairbanks-Morse Model 35, 350
horsepower engine.
She operated in San Pedro for a number of years. The
Fairbanks-Morse engine was a two-cycle engine and had a tremendous
exhaust impact. All the dishes in the restaurants uptown would
rattle when the Crowley #9 went by because of the peculiarities
of the exhaust, so everyone knew when the Crowley #9 was going on
the job.
In the mid-' 30s she was chartered to Columbia Construction
Company, who was building the new, big breakwater outside, and she
was employed in towing rock from Catalina Island over to the
breakwater. Captain McGillivray would regularly cry crocodile
tears on the telephone because Columbia Construction persisted in
letting the boat get on the rocks of the breakwater and getting
badly smashed up and her planking wrecked.
My father used to say we shouldn't have leased the boat to
them, and I used to say, "What the hell are you worrying about
because they have to return it in its original condition." When
the job was over and they were ready to return the boat, they put
it on drydock; they put in a new keel, a new keelson, whole new
planking they rebuilt the boat.
In fact, they rebuilt the boat to such an extent that we took
the old engine out and put in a brand new engine, because the life
of the boat was lengthened so greatly by all the repair work
Columbia Construction had to do. We had a good tug for a number
of years to come.
Feingold: Was that the Ajax?
Crowley: And we renamed her the Ajax at the time because she was practially
a new boat.
Feingold: Is that something that happens at all frequently, or was that rather
unusual.
90
Crow ley: Well, that was rather unusual. However, when a contractor does
charter a boat he usually gets it on a bareboat charter and does
have to put it back in shape, so that although contractors are
very rough on equipment, there always comes a day of reckoning
when they have to return it to the owner. This is not the first
time that has happened nor will it be the last.
Feingold: That's a standard part of the contract then?
Crowley: Oh, yes, the return in the original condition, ordinary wear and
tear excepted. There's a big argument about what is ordinary
wear and tear, but on a wooden vessel, if you smash the keel up
and scar up all the planking, that's not considered ordinary wear
and tear.
[referring to Merchant Vessels in the United States] I told
you that #24 was the ex-Sea Lark; the Crowley #25 was the ex-
Restless.
Feingold: You said #25 was the Sea Prince.
Crowley: I'll have to correct that. #25 was the ex- Restless , and the Crowley
#27 was the ex-Harbpj:, and the Crowley #28 was the ex-A.E. Williams,
and the Crowley #29 was the ex-Sea Prince.
We did not repower the Sea Witch. We were going to, but she
was too old. She was the first tug the Shipowners and Merchants
Tugboat Company built in 1883.
Feingold: I thought I remembered that name. Is the Ajax still around?
Crowley: No, I don't think so; I don't really know. [refers question to
John Jenkins in adjoining office] I think we sold the Ajax to
the Mexicans. After the tugs are worn out in San Francisco, they're
rebuilt and sent to San Pedro. After they're worn out in San Pedro,
they're sold to the Mexicans and the Mexicans take them down to
Mexico and use them.
Feingold: Use them as tugs around the harbors there?
Crowley: Oh, yes. But quite frequently the Mexicans put them ashore before
they get down to where they're going; that usually uses them up
anyway.
Feingold: What's the average life span of a tug? I'm interested, because if
the Ajax is still around, it would make it well over fifty years
old.
91
Crowley: The Crow ley #24 is still around, and the Crowley #24 was built in
1905. But for all practical purposes, she was completely rebuilt
in the '30s and she is almost totally useless now. We don't use
her at all. She just barely floats.
In bygone days, when you had good craftsmen around, good
woodworking men, you would continaully replace the wooden parts of
tugboats if you wanted to spend enough money on them, so that they
would last almost indefinitely. Witness the U.S.S. Constitution.
She's several hundred years old and she's still around, but there's
very little of the original timber left in her. The same thing
applies with the tugs.
The normal guideline life for depreciation purposes for the
Bureau of Internal Revenue, is eighteen years. Years ago, they
used to have forty year life on tugboats, which we never subscribed
to, because we felt that was entirely too long a life, useful, '
economic life, for a tugboat. Some tugs are kicking around for
forty of fifty years, in years back.
Today, eighteen to twenty years is the useful economic life,
not only because the tugs are not nearly as well built as they
used to be, but also because you can't afford to spend the money
it would take to repair them. In addition to that, they become
technologically out-moded because of the advances in diesel engines
and propulsive efficiency and what not; so that even though you
may get a tug to last a long time, it's like a twenty year old
truck; what good is it? It's just an antique relic.
Feingold: A floating museum.
Crowley: Yes.
Feingold: Captain McGillivray, in his interview, mentioned that there were
two tugs that were built in the Gulf for about a million and a
half a piece. He didn't mention them in connection with any
particular operation; I wondered if you remembered
Crowley: I think he was telling you of our latest tugs that were built.
The Sea Swift and the Sea Flyer were built in the Gulf. They're
twin-screw, General Motors-powered, with two sixteen- cylinder
electro-motive division turbo-charge engines, and they have a
total horsepower of 7,000 horsepower.
Those two tugs were built at J. Ray McDermott Shipyards in
Morgan City, Louisiana, and were the most powerful tugs of their
time. They're presently engaged in towing roll-on, roll-off
trailer barges between Jacksonville, Florida, and Puerto Rico.
92
Feingold: When were they built?
Crowley: The Flyer and the Swift? About '69. We have since that time
built 'four more of those. [checks book] The Sea Swift was built
in 1968 and so was the Flyer . Then we built four more of those
which we call the Mars and the Zeus , the Guardian and the Pathfinder.
Feingold: I am a bit confused still about their engines. How are they powered?
Crowley: General Motors EMD Electro Motive Division Engine, sixteen
cylinder, 645, that's 16-645-E5. The 16 means 16 cylinders, the
645 means 645 cubic inches per cylinder, displacement, and the E5
means it's an exhaust gas turbo-charged engine.
Feingold: Is there any pattern with the naming of the tugs?
Crowley: Crowley Launch and Tugboat Company tugs used to be named Crowley
Number So-and-So . The Bay Cities Transportation Company tugs
have been named after they've been named Alert, Rescue, Vigilant,
Defiance, Fearless and so on, which were names patterned on their
alleged ability to be available and do a job.
This was somewhat the same naming principles that were followed
by Spreckles Towboat Company that built tugs and engaged in the
tugboat business in the late nineteenth century. Those tugs
gradully faded out of the picture, and the Bay Cities tugs were
generally named after them.
The tugs of the Puget Sound Tug and Barge Company are generally
named after stars or gods, like Neptune, Mars , Zeus, and so on.
The Shipowners and Merchants Tugboat Company tugs are generally
named Sea Lion, Sea Fox, Sea Prince, Sea Wolf, with a "Sea" prefix.
Feingold: Getting back to San Pedro, what is the principal business that
the tugs do there?
Crowley: Docking and undocking ships. That's what San Pedro Tugboat Company
has traditionally done.
[John Jenkins comes in]
Jenkins: The #24 was one of the Red Stack tugs.
Crowley: Yes, I know what the #24 was.
Jenkins: And the other one we sold to Juan Perlo.
Crowley: The Ajax?
93
Jenkins: First we were using it over at the harbor with United
Crowley: Yes, and then we sold her to Perlo. She was formerly the Crow ley
#9. After Columbia Construction rebuilt her, we put a different
deckhouse on her and renamed her the Ajax.
Jenkins: I think Juan Perlo has since sold it.
Crowley: Down in Mexico?
[John Jenkins leaves]
Feingold: Do you do any barging in San Pedro Harbor?
Crowley: Yes. United Towing Company has the San Pedro operation. They take
care of all the barging of bulk petroleum in the harbor, and the
bunkering of ships and so on. There's about eight or ten barges
down there; and they have two tugs they use to tow those barges
around with.
Crowley Launch and Tugboat Company's San Francisco Bay Operations
[Interview 4: May 2, 1973]
Feingold: Is the San Pedro operation now the main operation of Crowley Launch
and Tug?
Crowley: San Pedro Tugboat Company is the only remaining operation of the
Crowley Launch and Tugboat Company, because, in the early '30s,
Crowley Launch and Tugboat Company was in the midst of a lot of
labor problems and got a hell of a bad name in front of the unions.
Crowley Launch and Tugboat Company used to operate water
taxis, and passenger boats, and small freight boats, and jitneys
out of Pier 14. They also operated a couple of tugboats out of
Oakland, small diesel tugs, and rented barges out on San Francisco
Bay.
In 1938, we negotiated a deal with the Golden Gate International
Exposition, that was to be held on Treasure Island in the year of
1939, celebrating the opening of the bridges. We negotiated a deal
whereby we would run a passenger service out of Treasure Island
around the Bay. We would have two services, one, a speedboat ride,
and two, a cruise down to the Golden Gate Bridge and back. So we
had a concession from the Golden Gate Exposition people.
94
Crowley: We built several vessels and refurbished others. We built the
water taxis, Crowley //I and #2, which were the first turbo-
charged the first super-charged Cummins dies el-powered boats.
Feingold: What kind of diesel powered boats?
Crowley: They're a Cummins engine, which is the common engine in powered
trucks at that time. They've recently come out with a new
development called supercharging, which meant that you connected
a blower to the engine by a belt and blew extra air into the
cylinders and then injected extra fuel and increased your
horsepower output by about 40 percent. Their first super-charged
engines came out about that time, and we needed that much power
in these water taxis. We built these two water taxis and powered
them with these super-charged Cummins engines.
These water taxis also had a round house on them with glass
up the sides and curved around the top and so on, for taking
people around the Bay, so they could look up under the bridge and
see the Golden Gate Bridge and the San Francisco-Oakland Bay
Bridge.
We also rebuilt a couple of double-deck excursion boats that
my father had built in 1914 for the 1915 Panama Pacific International
Exhibition that was held down on the Marina, celebrating the opening
of the Panama Canal. We also bought four Chris-Craft speedboats
to run over there.
We operated out of Treasure Island all during the fair. About
the middle of 1939, the unions went out on strike on the Red Stack
tugs, the big steam tugs, and they were still out on strike. As
the summer came to a close, they decided to go out on strike
against Crowley Launch and Tugboat Company purely out of sympathy,
on October 1, 1939. Luckily, the fair closed September 30, 1939.
Feingold: That was good timing.
Crowley: Yes. We didn't do very well at the fair. We told the unions, and
the people that were working there, that if they did call a
sympathy strike or go out on strike, that would end the operations
of Crowley Launch and Tugboat Company on San Francisco Bay, because
by that time (although we didn't tell the unions this) Harbor Tug
and Barge Company was successfully engaged in water taxi operations
and tugboat operations and launch operations which were duplicating
the operations of Crowley Launch and Tugboat Company.
Also, the Bay Cities Transportation Company was engaged in
barging operations and towing operations which were also duplicative
of the activities of Crowley Launch and Tugboat Company. Since
95
Growl ey: both Bay Cities Transportation Company and Harbor Tug and Barge
Company had a much better public relations approach with the
unions, we deemed it advisable to just discontinue Crowley Launch
and Tugboat Company's San Francisco operations, particularly when
they were already being done by Harbor Tug and Barge Company and
Bay Cities Transportation Company which we owned at that time.
Feingold: Did anyone else besides you know that Crowley owned the Harbor
Tug and Barge and Bay Cities?
Crowley: My father.
Feingold: The unions didn't know that?
Crowley: The unions knew that we had an interest in Bay Cities
Transportation. They did not know anything about Harbor Tug
and Barge Company .
Feingold: How was it that those two companies had better relations with
the unions?
Crowley: In the first place, the Harbor Tug and Barge Company had better
relations with the unions because, first, it had been run by
Dizzy Williams in the '20s who'd given the men everything they
wanted, and secondly, from the early '30s on it was run by Con
Kremmlertnanae m ay be misspelled] who was a very tactful, smooth,
pleasant, kindly individual, who had a good line with chatter for
the union.
Feingold: Was he one of the people before Crowley took it over?
Crowley: No, he was there. Crowley had put him in there, and he was
supposed to be the whole cheese in the company running it for the
Crocker Bank.
Thirdly, there was a fellow by the name of Joe Jerome, who
had worked for the Harbor Tug and Barge Company for many years,
who also was in the union hierarchy. Joe Jerome was very close
to the union business agents. Well, he was very friendly and
practically taken care of
[interruption]
Joe Jerome was loyal to his company, and he was taken care
of by his company, and he was in the union hierarchy. So the
Harbor Tug and Barge was the fair-haired boy with the Marine
Engineers Beneficial Association. It's just as simple as that,
if you get the picture.
96
Crowley: Naturally, Jerome was happy to see all the fellows in Crowley
Launch and Tugboat Company taken out of work by the union, because
for years he had been working for the other company and his
loyalties were to Harbor Tug and Barge Company . He was very anti-
Crowley; when the guys working at Crowley got taken out of their
jobs by the union, that made him happy as a clam.
Union politics are quite devious to say the least, and there
are not that many people who really understand them. In fact, no
one really knows lots of times how union politics developed, but
there's a lot of pretty rough things done in the spirit of helping
the underdog, which is a lot of baloney.
There are power struggles and lots of different things that
go on in the union set ups . Why the unions will be anti-one
company and pro-another will be kind of hard to figure out for
the outsider, but to insiders there's always reasons. It usually
has something to do with money.
Feingold: Why did Bay Cities have a better public image with the unions?
Crowley: Simply because of the fact that Art Wellington, who had run Bay
Cities Transportation Company up to 1935, would give the unions
everything under the sun, and he also was a pretty fast man with
a buck. He got on their good side, so Bay Cities was their fair-
haired boy . Whereas , my father ran Crowley .
In the '20s my father's half brothers were running Crowley.
They were not very smart. They used to dish out an awful lot of
guff and didn't treat people fairly and didn't really care what
people thought. As a result, in the '20s Crowley had gotten
somewhat of a bad name with the union.
In addition to that, at the time of the 1934 longshore strike,
the shipowners selected the float at Pier 14, right in front of
the Crowley office, as the place they would embark the strike
breakers
Feingold: On the Diana Dollar?
Crowley: To house on the two strike-breaking ships I believe it was the
Wilhelmina and the Diana Dollar.
The fellows would walk south from the Ferry Building, and
they'd make it to the head of Pier 14, and they'd duck in on the
dock and get into a water taxi and then be taken down to the strike
breaking ships. As a result, there were always a lot of cops
around there and also pickets on the other side of the Embarcadero
hollering at these guys and trying to stop them. On several
97
Crowley: occasions, there were some substantial riots, and the police
headquartered themselves in our office there. The forays of the
mounted policemen out against the pickets were quite active, a
lot of clubs flying, a lot of bloody noses, and a lot of fighting.
In fact, there was one of the cops that was down there that
had a very fine horse; one of the mounted cops. "Blackie" was
the horse's name, and he was kind of a trained horse. I don't
know whether you've seen the picture, but there's a picture of
Willie Figari in the office, and the cop has the horse in the office
saying hello to Willie.
Anyway, on one of the riot days, the cop took his horse
Blackie out into the crowd. The horse would lean against the
crowd trying to push it back, and some longshoreman broke a
bottle and shoved it into the horse's face and cut the horse all
up .
So, the cop rode his horse back into Pier 14 and tied him up.
Then he went on foot right through the police lines and through
the pickets and went all the way across into a saloon on the
Embarcadero. He got the guy by the scruff of the neck that had
messed up his horse, and dragged him back through the crowd, across
the street and he got him in back of a little shed on the dock and
he started to beat the guy up. He would have killed him if the
other cops hadn't pulled him off. He was just furious, just livid;
he'd gone out of his head. All the longshoremen knew this because
they could see him coming; he was a big guy and a husky guy.
He was all by himself; not a one of them would touch him
because they knew he was just out of his head. He went and got
this guy and beat the hell out of him. As I say, he went all the
way through the mob, picked out one of the members and brought
him all the way back, through the lines again, and brought him
over and started beating him up. As I say, the other cops had to
pull him off or he'd have killed the guy right there. He was mad.
I suppose that's not nice police action, but you really can't
blame him. Police brutality, you know, is a terrible thing. Why
the hell there isn't a lot more of it, I don't understand. I don't
see how they can stand the guff that they take nowadays.
Anyway, those riots went on. On July 5th, 1934, there was
a particularly difficult riot in front of the office there, and
it got to be quite a battle. So the cops drove the pickets across
the Embarcadero and on up Mission Street.
After they drove them a half a block up Mission, a couple of
the longshoremen attacked some cops in a car there, and the cops shot
them. That was the Mission Street Massacre you hear so much about.
98
Crowley: Every July 5th the longshoremen have a holiday celebrating the
death of those longshoremen who gave their lives for their brothers
in the struggle against imperialism.
Feingold: I think they call it Bloody Thursday.
Crowley: Yes, Bloody Thursday, that's right. Well, we were right in the
thick of it. We had the opportunity to observe all these tactics
going on, and here [was] the name Crowley Launch and Tugboat
Company right on the front. You can well appreciate that Crowley
Launch and Tugboat Company, after the 1934 strike, did not have
a very good name with organized labor.
Feingold: My impression is that labor didn't forget anything from the '34
strike.
Crowley: Yes. So, it was just as well for Crowley Launch and Tugboat
Company to go out of the operating business on San Francisco Bay,
although the Crowley Launch and Tugboat Company continued to own
tugs and barges and other pieces of equipment which it bareboat
chartered to Bay Cities, San Pedro Tug, or whatever company.
As a result, the San Pedro Tugboat Company was the only
remaining operation of Crowley Launch and Tugboat Company after
the '39 strike. They struck Crowley Launch in 1939, purely out of
sympathy for the fellows working on the Red Stack tugs, and although
the men who had been working at Crowley Launch did not want to go
out, the union made them go.
Feingold: Hadn't there been another strike in late '35?
Crowley: A tugboat strike or a longshore strike?
Feingold: A tugboat strike.
Crowley: No, or I don't remember. In 1934 the tugs were organized, and we
signed a closed shop contract at the end of the 1934 strike, but
I don't think they went on strike the following year. They may
have gone on strike in '37; that sounds more like it. But I don't
remember off hand. I can't keep track of all the strikes.
Captain Ernest Mohr
Feingold: You were also talking last week about Captain Ernest Mohr who was
first sent down to take over San Pedro. I wondered if you yourself
knew him and could comment a little about him.
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Crowley: I could comment for hours on Ernie Mohr. I knew him well since I
was a little boy. Then when I went to work on the tug, he was
skipper on the tug, and I was a deckhand.
Captain Ernest Mohr started running a boat for my father back
about the turn of the century or shortly thereaf terwards . He and
McGillivray were two of the so-called star operators of the double
deckers, which were the Crowley #17 and the Crowley //1 8, which my
father built in 1914 for the exposition on the Marina they were
excursion boats to run over there. They were brand new boats that
were built by Lester Stone. McGillivray was the skipper of one of
them, and Mohr was the skipper of the other. They had great rivalry
between them to see which one could outdo the other one.
There's a famous story that McGillivray used to tell about
how their two boats were coming up the front with a full load of
passengers, a brass band on one of them. Mohr was on the outside,
and he forced McGillivray in close to the dock and McGillivray
bumped the end of the dock, and the guy with the French horn, or
whatever it was, stumbled down the stairs and stuck his head in
the horn or some damn thing like that.
Anyway, Mohr and McGillivray were great friends. After 1915,
when my father bought the steam tug H.H. Buhne, later renamed the
Sea Wolf, and operated her in competition with the Shipowners and
Merchants Tugboat Company, Captain Mohr was skipper of the Buhne.
Then when my father took over the Shipowners and Merchants Tugboat
Company in 1918, both Mohr and McGillivray, who were the two top
operators for Crowley Launch, went over to Shipowners and Merchants
Tugboat Company as steam tugboat captains. They went along and
became excellent tugboat captain pilots. They were natural-born
boathandlers , and they did quite a job.
In 1923, my father picked Ernest Mohr to go down to San
Pedro when they first started, but Mohr got sick and he replaced
him with McGillivray. McGillivray was more of a happy-go-lucky
sort of guy that was mainly interested in attractive girls, and
Mohr was more of a down-to-earth, designing sort of a guy, with
burning ambition to get ahead.
So, Mohr had to come back to San Francisco because of his
health, and go back to being a tugboat captain. He continued to
do a fine job, but was always disappointed by the fact that he
was not able to get into the management of the compnay. Although
he did an excellent job and was the top tugboat captain pilot on
the Bay for many years, he more or less resented the fact that he
hadn't been able to get into top management.
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Crowley: In 1933, when I went to work on the tug, he was skipper of the
tug and I got to know him pretty well. He was a very interesting
person aggressive, intelligent, highly ambitious. When World
War II came along, he left the Shipowners and Serchants Tugboat
Company to go to work as an independent Bay pilot, because there
were tremendous opportunities on the Bay for independent Bay
pilots because of the tremendous amount of traffic that was moving
around and all kinds of tugs, such as navy, army and commercial
tugs, available. He went into business for himself and continued
in that business until he finally passed away I don't remember
now, but in the '60s.
Mohr passed away in the '60s sometime. He was very fond of
horseback riding. He had a place up at Russian River and used to
go up there a lot.
Anyway, Mohr died and McGillivray is still alive.
San Pedro and Long Beach Harbors
Feingold: Getting back to San Pedro, how does shipping down there at this
point compare to up here?
Crowley: Normally, San Pedro has always been a great bunkering port.
There's been a lot of oil in southern California. Oil is usually
cheaper in San Pedro than it is here, and usually ships drop in
there for bunkering before proceeding across the Pacific. Therefore,
there's a lot of activity. There's always been a lot of ships come
into San Pedro Harbor.
There are two harbors there, two ports. There's San Pedro,
which is the Los Angeles Harbor Department within the city limits
of Los Angeles; then there's the Port of Long Beach, which is in
the city limits of Long Beach. Long Beach also has some off
shore oil wells, and a lot of the money from the off-shore oil
wells is dedicated to use in the harbor. Therefore, Long Beach
has spent many millions of dollars on improving their piers and
facilities. They have built and bought themselves a harbor that
is quite an extensive harbor.
They also have the problem in Long Beach that due to the
fact they're sucking all the oil out from under the ground, all of
Long Beach harbor is sinking down, including the Long Beach naval
shipyard. As a result, that area has sunk roughly twenty-two feet.
They've stabilized it by pumping huge quantities of water under
ground to where the oil wells were. They can't bring it up again;
it's just sunk down twenty-two feet below sea level, below what it
was .
101
Crowley: They have done a tremendous amount of filling in, rebuilding docks,
and so on, in the Port of Long Beach, and they have a very fine
harbor.
The work in Long Beach and San Pedro Harbor both harbors
are right adjacent to one another, so they're considered the same
as far as towboat work is concerned. The tugs run over to Long
Beach and they do a job, or they do a job in San Pedro, more or
less interchangeably. There is a substantial amount of shipping
in Long Beach San Pedro and Long Beach and statistics will show
whether their harbor is bigger than ours or not. I would assume
there's more ships and more activity in Los Angeles harbor than
in our harbor.
They've also a relatively unlimited amount of funds to be
able to spend on that, Long Beach getting the funds from the oil
drilling and the oil production, and Los Angeles harbor getting
the funds from the tax base of the city of Los Angeles , which is
quite extensive.
Feingold: Then they're several steps ahead of San Francisco.
Crowley: Yes.
Feingold: I also came across a note that San Pedro Tug was operating a small
barge with water tanks on it to carry water to ships at anchorage.
Is that still going on?
Crowley: No, that's been discontinued several years ago. We used to supply
water to the ships in the stream, because ships would generally
come in for bunkers and they'd anchor in the outer harbor. They'd
get fuel oil which we'd barge out to them, originally by the oil
barges, and eventually by the United Towing Company's barges, and
then they'd also have to pick up some water. We'd barge fresh
water, and we did quite a business taking fresh water out to the
ships at anchor.
In the last ten years, evaporators have become much more
efficient. Now, most ships make their fresh water out of salt
water.
Feingold: I also came across a note in the newspaper several weeks ago that
the old ferry boat Berkeley over in Sausalito has been sold to the
San Diego Maritime Museum and it's going to be towed down. I
wondered if any one of the Crowley tugs was going to be doing that.
Crowley: We gave them a price the other day of $11,000 to tow it down.
Whether they'll take it or not or whether they get somebody else
to do it
Feingold: I see; they're just in the process of taking bids.
102
VIII BAY CITIES TRANSPORTATION COMPANY
Origins of the Company
Feingold: In that case, let's move on to Bay Cities Transportation Company.
Captain Figari talked a little bit about it in his interview.
He mentioned that it was originally a company that was competitive
with Crowley?
Crowley: Yes. Let me go back. In the '20s, I told you earlier, my father
was spending most of his time up on California Street and not
devoting an awful lot of activity to Crowley Launch and Tugboat
Company. His two half-brothers, Dave and Jack, were running the
company, and they were a couple of damn fools. They lost a lot of
business, and things were going from bad to worse, and so on.
In the '20s there developed an opportunity of transportation
of freight between San Francisco and Oakland by barge. The Bay
Cities Transportation Company was formed by Lawrence Warehouse
Company to perform this activity. They had a terminal in Oakland
at the foot of Webster Street and a terminal in San Francisco at
Pier 5. They instituted a service that they called "twice a day
we bridge the Bay."
They would receive freight in Oakland and San Francisco
trucking concerns would bring the freight down and then they would
load the freight onto barges with a deck house on them, and these
barges would travel over to Oakland or from Oakland to San Francisco,
One barge went at noon, and one barge went at 5:00 in the afternoon.
This was "twice a day we bridge the Bay."
At that time the ferries were running, and the sides of the
houses were painted "Bay Cities Transportation Company twice a
day we bridge the Bay." This was how a good deal of the freight
moved between San Francisco and Oakland.
103
Crowley: The Haslett Warehouse Company had a pickup and delivery service
by truck from Oakland, or developed it in the '20s, and from
San Francisco to Oakland. They would bring the Haslett freight
down to the dock and load it on the barge, and it would be taken
over by the Bay Cities barge and distributed by Haslett trucks
on the other side of the Bay.
This all developed in the '20s after World War I, with the
motor truck and improved methods of transportation. Crowley
Launch did not get into it. But when my father came back to the
waterfront in the early '30s, he began to see that this had
usurped a substantial amount of business that Crowley used to do
in just renting out barges to somebody that wanted to move freight
across the Bay.
They looked around for an opportunity to get into the freight
transportation business. There was a fellow by the name of Rideout.
He used to run river steamers up to Oleum, Selby's, South Vallejo
and Mare Island Navy Yard. There was a navy contract for hauling
the navy freight from Mare Island down to San Francisco and from
San Francisco up to Mare Island. This was before the days of the
Carquinez Bridge.
Crowley Launch and Tugboat Company formed a company called the
Pioneer Line it was not a company but a division. The Pioneer
Line was a freight line that would haul freight from San Francisco
up to Union Oil Company dock at Oleum, the American Smelting and
Refining smelter at Selby's, the Sperry Flour Company mill at
South Vallejo and the Mare Island Navy Yard. There was a navy
contract that came up every year. One year Pioneer Line bid it
and got the navy contract. That started a regular freight
transportation system division of Crowley Launch and Tugboat
Company called the Pioneer Line.
In '34, when the waterfront got organized, Al Gibson, of
Lawrence Warehouse, was the head of Bay Cities Transportation
Company; and Art Wellington of Bay Cities Transporation Company
was the manager. Due to the fact that management of Pioneer Line
and Bay Cities Transportation were thrust together by mutual
problems such as the National Industrial Recovery Act or the Code
of Fair Competition for the water transportation business in San
Francisco Bay, and the unions demanding closed shop agreements and
so on and so forth, my father and Al Gibson were thrust together
more or less by events .
On September 20, 1935, we bought a 50 percent interest in Bay
Cities Transportation Company because it began to appear that by
unifying the two operations they could be operated more economically.
Later, in 1939 and "40, we bought the other 50 percent interest.
Then we had Bay Cities Transportation perform all the common carrier
104
Crowley: freight transportation system, and gradually phased the Pioneer
Line out of business. In fact, this was the part of the business
that Crowley Launch and Tugboat Company went out of with that
October 1st strike in 1939.
Feingold: Captain Figari also mentioned a Mr. Westman.
Crowley: Walter Westman, yes. Walter Westman worked in the office for my
father. I don 1 t know when he started; I would say sometime around
1910 or therabouts. He ran the Pioneer Line after it was organized
and was in charge of the details of the freight handling business,
which is a highly detailed business with tariffs, freight bills
and claims and a lot of problems.
Feingold: How many boats did Pioneer have?
Crowley: Pioneer Line, in their run to Mare Island, had about three boats
and six barges. Whenever they needed more towing equipment or
barging equipment, they'd get it from Crowley Launch and Tugboat
Company .
Feingold: I think it was in the notes that you prepared on the history of
Bay Cities that you mention that Lawrence sold 50 percent of its
common stock and preferred stock to you?
Crowley: Yes.
Feingold: Was that one of your first business deals?
Crowley: No. It was one of the early ones, yes.
Feingold: What position were you in by that time?
Crowley: I was the boss's son had been since I was born. [laughter]
Feingold: That's a pretty good position to be in. Was this just to use
your name, or were you actually going to run half the show?
Crowley: I was active in the activities of the company. I wasn't making
the final decisions at that time; my father obviously was. I think
I had some input. I did have an idea now and then sometimes I
was right, sometimes I was wrong, but he decided that.
Feingold: I also noticed that in 1941, I think you mentioned, the rest of the
stock was purchased from Lawrence Warehouse by you and your sister,
I believe.
Crowley: Yes.
Feingold: Was it just, for her, in name only, or was she active?
105
Crowley: No, she was not at all active. I purchased the rest of the stock
and then sold the 40 percent to her. My father wanted to see this
because he felt that since her husband was not particularly well
fixed, that she ought to have some substantial interest that would
take care of her in case she needed it. The money that she used
was money that she had gotten from the sale of some stock in a
company that my father had given her, and then, fortuitously, later
on the company liquidated and paid her a substantial amount of
money which enabled her to buy this stock in Bay Cities Transportation
Company .
She was never active in the business nor knew a damn thing
about it.
Feingold: Her husband is involved?
Crowley: Yes, her husband, Casper Esher, went to work for the company
around the beginning of the war, and he's been working here ever
s ince .
Feingold: Captain Figari mentioned a couple of other names, Joe Swenson and
Bob Malcolm and John Elliott.
Crowley: Yes. Joe Swenson, Bob Malcolm and Jack Elliott were all employees
of Bay Cities Transportation Company before we ever had anything
to do with it. Joe is still here, and Bob Malcolm and Jack Elliott
are both retired.
Feingold: Were they just employees of the company or did they have
administrative positions of any kind?
Crowley: No, they were just employees of the company. Joe was the operating
manager and Bob Malcolm was in the accounting department, and so
was Jack Elliott.
Barges and Tugs
Feingold: At the time you wrote that little history of Bay Cities, you
mentioned that it owned eight tank barges, three tugs, a derrick
barge and a Pacific barge. Is that still about right?
Crowley: About right.
Feingold: What's the difference between a derrick barge and a Pacific barge?
Crowley: I think I said Pacific Barge 3.
106
Feingold:
Crowley:
Feingold:
Crowley:
Feingold:
Crowley:
Feingold:
Crowley:
Feingold:
Crowley:
Feingold:
Crowley:
Right. You actually listed them all by name.
Was that in that corporate history business?
Yes. [referring to his notes on the company's history]
"Bay Cities formed the following subsidiary corporations"?
Yes.
Pacific Barge 3. Tank Barges 12, 14, 16, 17, and 1J3 are all
ocean-going tank barges that operate on the Pacific coast.
Barge 15 is presently, and has for the past few years, been in
molasses service in LA Harbor. Tank Barge 22 is a Bay barge that
operates in San Francisco Bay; and Tank Barge 31 I don't know
what piece of equipment it owns off hand but I'll try and look it
up [looks in records]. Tank Barge 31 owned the barge Anchorage
which was later sold. I think the Tank Barge 31 probably owns
another barge now, but I can't remember which one.
Anchorage was sold?
The barge Anchorage was sold to Kaiser Cement Company
You said in this history here that you had it chartered at one
point as a cement barge to Permanente Steamship Corporation and
I wondered if that was a subsidiary of Kaiser.
Yes, that's right. Kaiser Cement and Gypsum. [checking records]
Tank Barge 31 now owns a large car float, 400 by 76, and I'll give
you the name of that in a minute. [checking records] Tank Barge
31 now owns the barge Cardova which is a 400 by 76 car float that
runs between Seattle and Whittier, Alaska. Now, the question you
asked was
Why is Pacific Barge 3 "Pacific barge" and not "tank barge" or
"derrick barge"?
All right. I told you someplace back about forming Pacific
Barging Company in partnership with the Olsons. We built two
barges, Pacific #1 and Pacific #2 that were flat deck barges that
carried petroleum products below deck and lumber on deck. Then,
after the Olsons double-crossed us, we got one of the barges and
we formed a new company called Pacific Barge 3 to build a similar
barge, which we built, Pacific^ Barge^ 3. She was a flat deck barge
with bulk-petroleum-carrying capacity down below and cranes on
deck for handling lumber or other commodities.
107
Crowley: pacific Barge 3 was used extensively in the DEW line resupply
job and then she was lost. The hawser broke and 'she went ashore,
[checking records] Yes. The Pacific Barge 3 was lost in Alaska.
Then Pacific Barge 3 Corporation built a barge called Barge 101
which was a larger bulk petroleum transportation barge. She was
about a 13,000 dead-weight-ton barge we used up in Puget Sound for
a number of years, and then I'd better find out when she was built,
[checks Record of American Bureau of Shipping, 1972] Barge 101
was built in 1968 and was used on Puget Sound for a number of
years. Then it went back to the East Coast and engaged in the
transportation of bulk petroleum on the Atlantic and Gulf coasts.
Then, in 1972, she was being loaded with a heavy chemical on
the Mississippi River system and she broke in two. She was
salvaged and the center section cut out of her and welded together.
So she's now about 10,000 dead weight tons, and she's presently
on her way back to the Pacific Coast to engage in bulk petroleum
transportation on the Pacific Coast. She's due to arrive well,
she's on her way up the Pacific Coast to Seattle on the Pacific
side. [checking book]
So that's what Pacific Barge 3 owns, and she's a conventional
oil barge.
Feingold: Now how about Derrick Barge 7.
Crowley: Derrick Barge 7 owns a derrick barge which is chartered to Smith-
Rice Derrick Barges, Inc. down in San Pedro. This barge operates
in the heavy lift business in LA harbor.
Feingold: I assume the reason they are called derrick barges is they have
derricks on them.
Crowley: Yes. It's a big A-frame derrick.
Feingold: You mentioned that the tugs Atj^as and Valiant were chartered to
Bay Cities for use on the Pacific Coast.
Crowley: Atlas and Valiant are chartered for use in Carquinez Straits; they
dock tankers up in Carquinez Straits. The Tug Atlas is a corporation
owned by Bay Cities Transportation Company and the tug is chartered
to Bay Cities Transportation Company.
The Tug Trojan, Incorporated, is a corporation owned by
Crowley Launch and Tugboat Company, and it has a tug Trojan which
is the sister tug of the Atlas, which in turn is chartered to Bay
Cities Transportation Company.
Feingold: They're all used in Carquinez?
108
Crowley: The Atlas and Trojan are used in Carquinez Straits for docking
tankers, and have been since they were built.
Feingold: You also mentioned earlier that the tug Sea Hound was chartered
to Crowley Launch and Tug for use in the San Pedro harbor and
then you say "under the fictitious name of San Pedro Tugboat
Company . "
Crowley: Yes. Crowley Launch and Tugboat Company is a California corporation
and it does business in San Pedro harbor under the fictitious name
of San Pedro Tugboat Company.
Feingold: Why is that name fictitious?
Crowley: Well, that's the term used by a corporation commissioner when a
corporation does business under a name other than the corporate
structure.
Feingold: I see.
Crowley: Well, you could call it San Pedro Tugboat Company division of
Crowley Launch and Tugboat Company. That's doing business under
a fictitious name because the corporate title is Crowley Launch
and Tugboat Company, but you're doing business under a certain
name.
Feingold: I gather that Bay Cities no longer does freight barging?
Crowley: No. That died out. With the San Francisco-Oakland Bay Bridge
and the Golden Gate Bridge, and the ever- increasing cost of
maritime labor on the Bay, freight barging gradually died out.
We tried to revive it after World War II, and it didn't revive.
It lost money for years, and we finally discontinued it altogether.
Feingold: I imagine with the bridges that it would be hard to compete with
them.
Crowley: Yes.
Feingold: What union are you dealing with, or were you, with bargemen?
Is there a bargemen's union?
Crowley: The bargemen who load and unload the barges were a local, a
bargemen local of the ILWU. Originally the bargemen union you
see originally the longshoremen were ILA. When [Harry] Bridges
came in, they formed a new union called the ILWU. The bargemen
were still members of the ILA in 1934-35. Then finally they
disaffiliated with the ILA and affiliated with the ILWU. They
were gradually absorbed by Local 10 of the ILWU, and there's no
more bargemen's local.
109
Feingold: I see. They're just part of Local 10.
Growl ey: Yes.
Barging Molasses
Feingold:
Crow ley:
Feingold:
Growl ey:
Is there a molasses barge up here? The AMORCO?
Yes. No, not the AMORCO . The AMORCO was a barge that was built
by Tidewater Associated Oil Company for lightering off crude [oil]
from tankers. Then Philips took over Tidewater and they stopped
bringing in the foreign crude. They finally sold the barge AMORCO
to Foss Launch and Tug Company, and she's now out in Honolulu.
We have a barge that operates on San Francisco Bay, and it
barges molasses from along side the Matson ships at Oakland outer
harbor and up at Crockett, either to the molasses storage at Point
San Pablo, or the molasses storage at Stockton, California.
I'm not familiar with the sugar traffic,
coming from or going to?
Where's the molasses
The Hawaiian Islands produces about a million tons of sugar a year,
raw sugar, and all the growers have a cooperative there used to
be a cooperative called the C and H Sugar Refining Company
California and Hawaiian Sugar Refining Company who built a huge
sugar refinery at Crockett, California.
The cane is milled down in the islands and raw sugar is
produced down there. That raw sugar is shipped up to Crockett
where it is refined into all different types of clean sugar.
The raw sugar mills in the Hawaiian Islands produce the
molasses. The molasses has always been somewhat of a by-product
and not very valuable. In recent years it's become fairly valuable
as a cattle feed. They mix it with beet pulp from the sugar beets
and feed it to the cattle. It's very high in iron and beneficial.
So, Matson, traditionally for many years, has been bringing
molasses back from the Hawaiian Islands in the deep tanks of their
ships. In the old days, when it didn't cost much to run a ship,
they'd come in and discharge their cargo and then run up to Stockton
and to Point San Pablo and pump out molasses.
110
Crowley: Now, since it's so costly to operate a ship, they find it's
economically unsound to do this. So when the ship comes in, we
put a barge along side and the ship pumps the molasses into the
barge. Then the barge takes the molasses to Stockton, or to Poinf
San Pablo, as the case may be.
In San Pedro harbor, when the Matson ship comes in, we put
the Barge 15 alongside, and they pump molasses into the 15 .
Then we take it over to the molasses dock and pump it ashore at
the molasses dock. Or occasionally we take a load of molasses
down to San Diego, which is one hundred miles down the coast, to
Pacific Molasses Storage down there. Pacific Molasses is the company
that buys the molasses from the C and H Sugar Refining Company, and
then markets it in eleven western states.
Independent Iron Works a Competitor?
Feingold: I have a note here from a clipping in one of your father's scrap-
books. In 1948 a new shipping service was established in Oakland,
pulling ocean-going barges and tugs, established by William
Meagher and Henry Getty, Jr. owners of the Independent Iron Works?
Crowley: Yes, I remember that now. Yes.
Feingold: They purchased their first barge from the War Assets Administration,
a large tug, Ocean Prince, formerly belonging to the navy.
Crowley: Right. Formerly belonging to the army. That died aborning.
Independent Iron Works. They lost their shirt. They bought a
great big old junk wooden barge from the war surplus and I think
they made one or two trips and went bankrupt. They were running
out to the Hawaiian Islands.
Feingold: What happened to the barge?
Crowley: I don't know it was used as a breakwater someplace. All those
old wooden barges that were built during World War II are totally
useless, fantastic waste of government money, and later ended up
as breakwaters usually in various places up and down the coast.
A lot of them went to Canada, used as breakwaters for log storage
in British Columbia.
Feingold: I wondered if they had become a competitor, but obviously they
didn't.
Crowley: No, nothing to worry about there. No competition at all.
Ill
Feingold: And what about the tug, the Ocean Prince?
Crowley: The Ocean Prince. She was one of the LT class. I don't know where
' she went. I'll have to think about it; maybe I can look it up.
[checks in Merchant Vessels in the United States]
Feingold: What's the LT class?
Crowley: The LT is a nomenclature used by the army for "large tug." The
Ocean Prince, as I remember, was a steel LT, with a Fairbanks-
Morse engine in it, and 1,250 horsepower, something like that.
She was a pretty good boat. [checking book] She's the LT-59
ex-Ocean Prince, the Dauphin . She was built by Calumet Shipyards
in 1944 with a Fairbanks-Morse 1,225 horsepower engine. She's now
owned by the Gulf and Carribean Towing Company in New Orleans.
She operates out of the Gulf of Mexico. She's not a bad hull, but
1,225 horsepower is too small to operate on the Pacific Coast as a
commercial tug because the wages you pay the crew would choke a
horse, and you can't do enough towing to make it economically sound.
This is the only boat they have. I don't know who they are,
Gulf and Carribean Towing Company. Anyway, she was sold to the Gulf
company .
Cargo Traffic on San Francisco Bay
Feingold: I was looking over a California Senate Report on shipping in the
Bay which was rather old it's from 1951 but I wondered how many
of these things were still true. At that time, they said, the
major products that were carried in boats around the Bay were
refined sugar, rice, sand, gravel, crushed rock and petroleum.
Crowley: Yes. By 1951, practically all the commercial transportation of
general cargo on San Francisco Bay was finished.
[interruption]
By that time, the barging had deteriorated to practially
nothing. That statement is just about correct. The sugar movement
that they mention in there is a movement from Crockett down to
Richmond. This is somewhat of an artificial movement, because the
Bay and River Navigation, which does the work, is a company that's
owned by some of the directors and owners of the sugar plantations
that in turn own C and H Sugar Refining Company.
C and H Sugar Refining Company ships a million tons a year of
sugar out of its Crockett refinery to all over the west. It's
served by the Southern Pacific Railroad and by trunk lines. If
112
Crowley: they load sugar in a rail car at Crockett, it goes to, say,
Tucson, Arizona, at a certain quoted rate. But if a company is
what's called an originating carrier on a joint through rail move,
then it gets a percentage of the through rate. Bay and River
Navigation is an originating carrier on joint through rates with
the Atchison, Topeka, and Santa Fe and the Western Pacific Railroad,
so that they get a percentage of the joint through rate.
When C and H ships, say, via Santa Fe , to Tucson, Arizona,
they load the sugar at Crockett on to Bay and River Navigation
boats, bring it down to Richmond, and load it into an Atchison,
Topeka, and Santa Fe car.
For that move, Bay and River may get 50 percent of the through
rate. If it's going a long distance, then 50 percent of the
through rate is a hell of a lot more money than what the move is
really worth. But C and H isn't paying a nickel more for it.
That's coming out of the pockets of Atchison, Topeka, and Santa Fe,
as part of the division that goes to the originating carrier.
It's a nice, cozy little deal where Bay and River Navigation
Company can make very substantial profits as an originating carrier
for those two major railroads. So long as they can get C and H
Sugar Refining Company to ship the cargo via Bay and River Nav/Santa
Fe Railroad, they can get exorbitant divisions from the railroads
and show a hell of a profit.
For years , Bay and River Navigation has operated under that
system. The directors , or sugar refiners , or whoever they are
that own the company, have been collecting substantial dividends
for many years from that little racket.
That's the only reason sugar moves by water on San Francisco
Bay, because it's totally inefficient and could just as well be
loaded into rail cars or trucks right at Crockett without having
to be brought down to Richmond.
Now you say, "Well, why don't they load it into Southern
Pacific cars at Crockett and then interchange with Santa Fe down
at Richmond?" Well, why give that money to Southern Pacific?
Why not take it and put in in your own pocket? So that's how that
thing works.
The other items you read off were
Feingold: Rice.
113
Crowley: Rice. That's bulk rice that moved from the rice growers' mill
at Sacramento over to on board ships at Stockton, and it doesn't
move in as large quantities any more because the Sacramento deep
water channel has been dredged and ships run right up and pick
up their rice direct.
There is a certain amount of bulk rice barged down because
of the draft limitations on the Sacramento channel. They'll barge
rice down here and load it into the ship to top her off and get
a full cargo or rice. But there's a very minor amount of rice
moved today. What were the other things?
Feingold: Sand, gravel, crushed rock and petroleum.
Crowley: Sand and crushed rock move to some degree. Gravel, there's no more
gravel in this area anyway. Gravel is being washed up, so that
doesn't move anymore.
The bulk petroleum continues to move but in a much more
limited manner because of the refined products pipeline which I've
gone into at some length.
World War II and the Tugboat Industry
Feingold: What general effect did World War II have on the tugboat business?
Crowley: During World War II there was a tremendous increase in tugboat
work in the Bay because of the shipyards and because of all the
military activity and the ships running around and so on. We
were extremely busy all during the war. The navy did a lot of work.
They built tugs, and the army built tugs and did a tremendous amount
of work. There was a tremendous amount of tugboat activity in San
Francisco Bay during the war.
The commercial companies had to get by as best they could with
the old junk they had prior to the war because there was no chance
of building any new tugs during the war; they all went to the
military. The military, needless to say, did not use their equipment
very effectively, so, one commercial tug was worth about ten
military tugs as far as getting jobs done is concerned.
With the cessation of the war activities, the business dropped
off again, and in a few years it was back again to normal. Also
in a few years, the government sold a large number of their war
surplus tugs which were bought by the commercial tugboat companies
and enabled the commercial tugboat companies, such as Shipowners
114
Crowley: and Merchants Tugboat Company, to convert from steam tugs to
diesel tugs. So there was a complete replacement of the old steam
tug fleet at the end of World War II with war surplus diesel tugs.
[interruption]
There was a certain amount of ocean towing of war surplus
equipment around after the war. We towed a bunch of LST's from
the West Coast down to the Gulf with some of these single-screw
mikis. The revival in the tugboat fleet of the United States,
by purchasing war surplus equipment in the late '40s, carried
practically all the tugboat companies through the '60s, or into
the '60s, with new modern floating equipment.
The same thing happened in the '20s, at the end of World War
I. In the '60s, we never had a World War III and the government
never entered into a great tugboat building program. As a result,
there have been comparatively few new tug-building programs by 'the
government and sales at ten cents on the dollar.
All the tugboat companies in the United States are having to
build new equipment now, which is quite a drain and quite a
financial problem. It separates the men from the boys and it also
reduces the amount of tugboat work that can be done at an inexpensive
price, because if you have to pay one hundred cents on the dollar
for a tugboat instead of ten cents on the dollar, that raises the
cost of tugboating pretty high.
Comments on the State of the Shipping Indus try
Feingold: Are all your tugs in use now around the Bay?
Crowley: No, we have quite a bit of excess capacity for ship docking and
tugboat work I would say we could do at least three times the
amount of work we're doing now.
Feingold: Does that reflect the general state of the shipping industry?
Crowley: Yes, that reflects the general state of the shipping industry, and
also the shipping industry is in a tremendous transitional stage.
The shipping industry is moving from in the last ten years they've
moved from break bulk to containerization. Now they're moving
into third generation container ships, which are huge ships that
carry huge numbers of containers .
The tankers, as you well know, are moving into very large crew
carriers, very much bigger ships. All the ships are getting bigger
and bigger. The smaller ships conventional 10,000 dead weight ton
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Crowley: ships they're quite a few of them still around, but it is predicted
that in the next five to ten years they'll disappear like flies
because they cannot compete, with a small ship, against a great big
ship .
A great big ship, if it's going to run across the Pacific or
inter- coas tally or wherever it's going to run you got to fill it
up, because you can't afford to run it half empty. This is going
to drain the cargo away from so-called small ships.
This in turn will have a tremendous impact on the tugboat
business because there will be a lot less tugboat work. But the
ships that use tugs will be much bigger ships and require extremely
powerful tugs.
Feingold: Is that going to mean a certain amount of new tug building?
Crowley: Yes and no. There will be some new tugs built, but generally
speaking what happens is that we started building new tugs in the
early '60s, and we take some of those tugs we built at that time
for ocean-going tugs, and convert them into harbor tugs, and then
build new ocean-going tugs of a still bigger size.
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IX BULK HANDLERS INCORPORATED
Feingold: Moving on to Bulk Handlers Incorporated
Crowley: Yes. Bulk Handlers was formed by ourselves and Marine Terminal's
Company, a stevedoring outfit, for the purpose of outfitting a
barge with sucking and blowing equipment for taking bulk copra
off of ships in San Francisco Bay mechanically and saving a lot
of stevedoring costs.
We took an LSM hull, which is about a 205 foot hull by 34
foot beam, and equipped it with a big diesel engine and blowers
and bulk moving equipment in 1954. It was 50 percent owned by
Marine Terminals and 50 percent owned by Thomas B. Crowley. The
equipment did an excellent job of changing the method of taking
copra off of ships .
But Cargill, who was the outfit that crushed the copra,
became unsympathetic when they discovered that if the ship
discharged her copra cargo into a barge while she was discharging
other cargo at a pier, and then the barge later pumped it into
the crushing plant, that Cargill would lose the revenue from
renting out their copra-blowing plant that they had on the dock
at their own terminal. Since they charged very high rates to the
shipowner for the use of the copra-blowing equipment they had on
the dock, this, in effect, gave them a rebate on the ocean freight
rate. When they started to miss the rebate on the ocean freight
rate, they said, "The hell with this. We're not going to let you
steamship companies take the copra off away from our dock while
you're handling general cargo. You come into our dock and handle
general cargo . "
The steamship company says, "It's much more economical for
us to do this, and we would like to do it." They said, "We don't
give a damn what you want to do. We want to rent these blowers."
So, one of the American steamship companies said, "We're not going
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Crowley: to do it your way." They said, "All right. We're not going to
ship the copra via you." They shipped it on other lines, and then
the other lines went into the copra docks.
That was the beginning of the end of the handling of bulk
copra by much more efficient means and much more economically than
could be done in the conventional manner. The barge didn't get
much work from then on in, and the barge was finally dismantled
and sold.
Cargill got their rental on their blowers up until recent
years. In recent years, they've been crushing the copra over in
the Philippines, and therefore only a very limited amount of copra
is crushed in this country and they ship the oil over here now. So
that eliminated the whole business.
Feingold: So Bulk Handlers doesn't exist anymore?
Crowley: Bulk Handlers still exists as a corporation. Since it was a member
of PMA [Pacific Maritime Association] , it does a certain amount of
stevedoring work both in the Pacific Northwest and in Alaska,
because it's a member of PMA and is a party to the coastwise
stevedoring contacts.
We had bought out Marine Terminals so we own Bulk Handlers
100 percent, and it's just used as a company for doing stevedore
work.
Feingold: I see. What's an LSM?
Crowley: An LSM is a landing ship medium, a naval vessel designed and built
in large numbers during World War II, 204 feet long, 34 foot beam,
and with a ramp at the front end which lowers down to allow tanks
on the main deck to run ashore.
LST's are landing ship tanks; those are 310 foot vessels.
LSM is landing ship medium, and they're both similar types of
vessels for putting tanks on the beach, trucks, and artillery and
stuff like that. They're shallow draft [ships]. After the war
they converted into handy barges for use in the Bay Area carrying
about a thousand tons.
Since that time, they've become economically unsound because
you can't make a go of a cargo barge carrying a thousand tons; it's
got to carry more cargo. So the LSM's are just about finished as
far as being used as barges in harbors, in addition to the fact
that they're pretty well worn out anyway.
Feingold: Are there any special problems of handling copra?
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Crowley: Oh, yes. It's a very difficult cargo to handle in that it comes
in chunks varying from the size of your fist to little bits.
What it really is is the dried insides of a coconut. It's very
oily, very dirty, very smelly. Once it's packed in a lot, it
sticks together and it's a difficult cargo to handle.
The way they take it out of ships is that they have these
big suckers, big vacuum cleaners, and they lower a hose down into
the hold of the ship. Then the stevedores go down there with
picks and pick the copra out of the pile and bring it over to the
hose where it sucks up into the plant.
One of the problems was manhandling the hose and picking it
up by hand was a lot of hard work and required a lot of men. Our
theory was that when we got this barge that could suck the cargo
out of the ship, we also devised a little crawler tractor that
would be attached to the end of the hose. It would go around and
mechanically pick the copra out of the pile, and then the hose
would suck it up.
We devised a pretty good system for doing this. But the
longshoremen weren't too enthusiastic about it although they did
go along with the labor-saving device they weren't too
enthusiastic about it. Then when Cargill put the clamps on it by
insisting that they get the rental for their blowers and the hell
with the shipowner, it died away.
It's not a very good reflection on industry, but frankly we
have run into problems. You have almost as much trouble with
competitive businesses as you do with labor unions when you're
trying to introduce a more efficient way of doing things.
We ran into this problem very seriously in attempting to
introduce our new simplified and lower-manning requirements on
our ocean-going tugs in 1965. We designed and built some 3,000-
horsepower tugs in a simplified fashion that we could man with a
full ocean-going crew of eight men, where the existing tugs
required a crew of twelve men. The unions cooperated with us
pretty well in connection with this, but our competitors Foss
Launch and Tug Company, put up a terrible beef with the unions and
fought the thing, and demanded the unions not allow us to operate
these tugs with eight men.
This battle continued for several years, until we finally got
Crown Zellerbach, who had automated one of their tugs, to tell
Foss Company to get some sense in their head and go for a lower
manning scale. Now the standard manning scale on the coast is
our eight-man crew.
119
Feingold: Foss would listen to Crown Zellerbach but they wouldn't listen to
you?
Crowley: Yes, because Crown Zellerbach gave them several million dollars a
year worth of business.
Feingold: I see.
Crowley: But they wouldn't listen until Crown Zellerbach told them what to
do.
120
X SMITH-RICE COMPANIES
Origins and Growth of the Companies
Feingold: Could you tell me about Smith-Rice Derrick Barges, Inc.?
Crowley: All right. Smith-Rice Derrick Barges, Inc. At the end of World
War I well, before World War I my father and Crowley Launch
and Tugboat Company had various derrick barges small barges with
an A-frame and a boom on them that could lift cargo on to a
lighter or off a lighter.
During World War I, he built a large, heavy lift derrick
barge that would lift a hundred tons , the Crowley #3. He engaged
in the heavy lift business in San Francisco Bay through the '20s
in competition with the Haviside Company and the Smith-Rice
Company.
The Haviside Company also was in the ship chandlery business,
and they had some big derrick barges. The Smith-Rice Company was
the remains of a rigging company that had been started in the 19th
century by Charlie Rice's father. Charlie Rice came into the
business as a boy. In the late '20s I'd say Charlie was in his
mid-40s no, he was probably in his early 40s in the late '20s.
The crash came and business was very poor. There wasn't
enough business to support the three derrick barge companies in
the Bay. So, Charlie Rice got together with my father and they
formed a new company that they called Smith-Rice. Company , which
was 50 percent owned by my father and 50 percent owned by Charlie
Rice. Charlie put his derricks into it; my father put his
derricks in. So, they operated through the '30s as Smith-Rice
Company .
Charlie was a good rigger but a bum businessman. He'd spend
money like it was going out of style. My father wasn't much of
a rigger but he was a good businessman. He wouldn't let Charlie
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Crowley: spend money at all. By the late '30s, there was a basic philosophic
difference in the operation of the company, in that my father
wanted to run it economically and Charlie wanted to run it
uneconomically .
Times were pretty tough in the '30s. My father cancelled
all the insurance, because we couldn't afford to pay the insurance
premiums, so we didn't have any insurance on any of our floating
equipment .
In about 1937 or 1938, Charlie got a job for one of the Smith-
Rice derrick barges to go up and scrap a ship up near Antioch.
Smith-Rice #2, which had been his derrick, had been laid up in
Oakland Creek for a number of years and hadn't done much of anything,
because the Smith-Rice #3 could do all the work that was available.
So Charlie broke out Smith-Rice //2 and, for a very cheap rental,
sent her up the river.
While she was being towed up the river, an old engineer, who
was reputed to be a hop-head, was firing up the boiler, and the rig
caught fire. She made a beautiful torch in the middle of San Pablo
Bay during the night. They towed her up into the mud flats and she
burned to the ground; she was a total loss. She burned completely.
She was a wooden barge with a wooden hull.
Charlie called my father about two in the morning. He said,
"My god, we're ruined." Dad said, "What's the matter?" He said,
"Smith-Rice #2 burned up." He said, "What the hell are you
kicking about; it's no goddamn good anyway. You've had her laid
up in Oakland Creek for years." He said, "But I've got all my
gear aboard, my rope, my line, rigging gear, blocks and tackles and
everything." Dad said, "Well, what the hell difference does it
make; you never use it anyway."
Anyway, Charlie was just broken hearted and he was crying
crocodile tears around the office for about two days. My father
said, "Oh, for Christ's sake, what the hell difference does it make;
we haven't used the derrick at all. The _#3_ will do all the work."
Charlie kept moaning and groaning and he was really sick about it.
So, Dad said, "Well, don't worry about it; what difference does it
make?"
Charlie then finally, the third day after the fire, said,
"I only had $60,000 worth of fire insurance on it." My father
went sixteen feet in the air. He said, "My God, you had some
insurance on that thing?" [laughter] Charlie said, "Yes; I was
carrying it myself and paying the premiums." Dad said, "What the
hell are you crying about that thing burning up for, I can't figure
it out."
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Crowley: Charlie collected the $60,000 I think it was $60,000 insurance
money. It was a hell of a lot of money in those days. Maybe it
was $30,000, but it was a lot of dough. Charlie got his money.
My dad said, "Oh, my God. This is unbelievable."
Anyway, Charlie and my father had their differences of opinion.
Finally, Charlie said, "I would like to run the company a little
more extravagantly buy more things and sell them." Dad said, "The
hell with that; you're not making enough money to do it," and so on
and so forth. Finally Charlie said, "Look, I got this $60,000 in
cash. Will you sell me your half interest in Smith-Rice Company
for the cash?" My father said, "Well, you ought to have your head
examined for offering it, but I'd have to have my head examined for
not accepting it."
He took the money, which was very much appreciated to say the
least; then Charlie owned 100 percent of Smith-Rice Company.
Charlie continued on in business when World War II struck. Then
the guns, tanks, planes, bombs and whatnot that had to be shipped
out of this port were lifted by Haviside Company and Smith-Rice
Company with their big derricks.
They minted money for those four or five war years ; they made
a tremendous amount of money. In fact, they paid fantastic taxes
because the taxes were 85 percent of the profits. But they also
re-negotiated eventually. In any event, they made a lot of money;
they did very well.
At the end of World War II a lot of derrick barges that were
built by the government were put up for sale. That's how Bay Cities
Transportation Company happened to buy Derrick Barge #7. It was
a war surplus derrick, a beautiful big steel derrick. Bay Cities
bought with the idea of well, it's a good investment.
After World War II, Merritt-Chapman-Scott , who had been in the
derrick barge business in Los Angeles-Long Beach harbor, decided
that they would take their big derrick barge back to the East Coast
and concentrate their activities on the East Coast. Therefore,
there was no derrick barge service available in Los Angeles-Long
Beach harbor.
Charlie came to me one day and he said, "I'd like to start a
derrick barge business down there but I don't want to take the
risk of going in it all by myself. Will you go fifty-fifty with
me?" I said, "Okay." So we started a new company called Smith-Rice
Derrick Barges, Incorporated, 50 percent owned by us and 50 percent
owned by Charlie Rice.
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Crowley: We put some more surplus derricks down there and we engaged in the
derrick barge and construction, dredging business, and we still do.
To this day, we have a 50 percent ownership in the Smith-Rice
Derrick Barges, Incorporated, operating in southern California
Los Angeles, Long Beach, and San Diego harbor, and the Rices own
100 percent of Smith-Rice Company in San Francisco Bay. Charlie
has died. Bud Rice, his son, has taken his place, and does a
good job, and is a hell of a lot more economical than Charlie ever
was.
Feingold: How many boats do they own in San Francisco Bay?
Crowley: How many derricks do they have there? Oh, I would say a half
dozen. They have derrick barges and also dump barges. Smith-
Rice Derrick Barges has say a half a dozen and a couple of dump
barges down in Southern California also. So they do dredging and
heavy lift work and some contracting work.
The Smith-Rice Derrick Barge's best derrick, which is a rig
they built about six or eight years ago, has been chartered to
Santa Fe International now for three or four years, and it's out
in the Persian Gulf at the present time, working out there under
bareboat charter.
Feingold: You mentioned earlier that one of the derricks, or several of them,
are working in the Persian Gulf, Alaska and Korea.
Crowley: No. #21 is the one that went to Alaska after she was built, then
she went to Korea, then she went to Singapore and then to the
Persian Gulf. She's still in the Persian Gulf. None of the others
are out of the country.
Feingold: Do either of these companies do dredging and heavy lift work in
other ports?
Crowley: The Smith-Rice Company confines itself to the San Francisco Bay.
Smith-Rice Derrick Barges, Incorporated confines itself to LA-
Long Beach harbor, and San Diego. They do work along the coast
as well. Most of the coastwise work is done by Smith-Rice
Derrick Barges because they have ocean-going derrick barges. They
work on submarine pipelines and borings and whatnot up and down
the Pacific Coast.
There are a lot of places on the Pacific Coast where there is
a pipleine that runs out on the ocean floor to a hose and a buoy,
and then their mooring buoys around the end; then a tanker will
come in, pick up the mooring buoys and pick up the hose and pump
petroleum ashore or take petroleum out through the line.
Salvage Work
124
Feingold: According to clippings in your father's scrapbook, Merritt-Chapman-
Scott were at one time a salvaging operation. Has the salvaging
operation been continued?
Crowley: No. When they discontinued their activities out here shortly
after World War II, they took their derrick barge back east; we
set up Smith-Rice Derrick Barges, Incorporated down south; and
we did all the heavy lift work. They did continue to remain in
the salvage business because the navy had gotten a bill through
Congress that provided for the navy using commercial people to
subsidize salvage equipment on the coast of the United States.
The navy made a cost-plus contract with Merritt-Chapman-Scott
to operate the navy salvage tug gear with civilian crews out of
San Pedro harbor to engage in salvage for naval vessels as well
as commercial vessels if there was no other commercial service
available.
Most of the major commercial salvage jobs that occurred off
the southern California coast in subsequent years were performed by
commercial salvage services, such as Smith-Rice Derrick Barges,
San Pedro Tugboat Company, Pacific Towboat and Salvage, and so on.
The navy's theory of subsidizing commercial salvage was not very
realistic. But nonetheless, the fact is that the navy gets huge
appropriations and they are still doing it.
Merritt-Chapman finally decided that they weren't getting
enough out of the salvage contract, so they dumped it and Phil
Murphy of Murphy Pacific Tugboat Company picked it up. Phil
Murphy developed it to a fine art whereby he formed a stock
company called Murphy Pacific Salvage Company with no assets and
sold stock to the public and floated it on the American Stock
Exchange and he owned, or a company that he had an interest in,
owned 26 percent of it, and the rest was owned by John Q. Public.
He bought Haviside Company's derrick barges in order to claim
that he was a salvage expert in the salvage business, because
Haviside had had a long history of salvage work, some successful,
some unsuccessful.
In any event, Phil Murphy had this navy contract. Then he
devised the idea of hiring all retired naval salvage personnel.
After they retired from the navy salvage, they'd go to work for
Murphy Pacific Salvage at a good fat salary. So, the Murphy
Pacific Salvage Company is a fair-haired boy with the United States
Navy for reasons best figured out for yourself.
125
Crowley: Every year they have had the contract from the navy for manning
this tug gear, getting their overhead paid and getting a $40,000
annual fee for the service. To be perfectly frank with you, it's
not worth $40,000 to go through all the trouble and rigamarole
that it's necessary to do with the navy. But Murphy-Pacific
Salvage Company does it successfully because they charge 100
percent of the overhead to the navy and everything else. It's
quite a boondoggle to say the least, but, however, the less said
about it, the better.
Feingold: None of your firms are engaged in salvage work?
Crowley: We will engage in salvage work if it appears to be profitable.
In recent years, the cost of going on a salvage job is so great,
and the damage is usually so severe to the salved piece of
equipment, that the salve value is so low that the award you get
for the salavge service is less than your costs, so why the hell
did you go to all that trouble in the first place?
If there appears to be an opportunity to salve a vessel in a
hurry with a tug at no considerable expense, we'll go ahead and
do it. If it looks like a long, difficult, tedious job, we'll
say, "Oh, the hell with it. Let somebody else do it."
Also, today with all the pollution and environmental
problems, even if a big salvage job came along that looked like
it would be highly profitable, we'd be very reluctant to go on
the job because of the fact that we'd probably be liable for huge
pollution damages from the oil from the ship. Whenever a ship
goes ashore, it always releases fantastic quantities of oil,
heavy fuel oil that's in the double bottom. It dirties the beach
up for miles around. This would cause fantastic liabilities today.
Feingold: They would blame you for that, rather than the ship?
Crowley: Oh, sure, yes. The Environmental Policy Act and the Environ
mentalists and the clean-up authorities will make anybody associated
with any oil spill pay for it, whether at fault or not. Union Oil
Company paid for cleaning up a hell of a lot of oil that was
coming out of natural seeps in the bottom, from the Santa Barbara
channel. They'd been coming up for years, but Union Oil cleaned a
lot of that stuff up, because everybody knew they were liable, and
that was that; there was no arguing about it.
As far as that Standard Oil spill that occurred here, it's
no common knowledge, but a lot of the oil that was spilled is the
fault of the Coast Guard.
Feingold: How so?
126
Crowley: Well, the ships came together at 2:00 in the morning, or something
like that, and Captain Stevens, the port captain of Standard Oil,
got out on the job within an hour. When he got there, he found a
young Coast Guard Lieutenant on the brig of the Standard Oil
tanker saying, "Keep the ship in the hole." Stevens said, "What
the hell is leaking out, we're spilling tremendous quantities of
oil. The thing to do is to back the ship out of the hole, and put
a boom around there, to stop the oil from flowing."
The Coast Guard fellow said, "I'm in charge and this is the
way I think it should be done. I'm holding the ship in there to
plug up the flow of oil." Stevens said, "Well, for Christ's sake,
look over the side and see the oil pouring out. That's no plug;
that's ridiculous." The master of the ship had been saying this
before Stevens got there. One of our tubgoat captains was out
there and he said, "Jesus Christ, what a mess this is."
Anyway, Stevens got on the radio phone and he finally got the
commandant of the Coast Guard. He said, "You've got some idiot out
here that's really making a mess of this situation. Get somebody
out here that's got some brains to work it out." So at 9:00 in
the morning, they finally got a senior Coast Guard officer out there
and he said, "Oh, my God. Back it out and put the boom around it,"
which they did.
This conservatively, according to Standard Oil practical
people who don't give a damn about the cost; it's nothing to them
they feel that something between ten and twenty thousand barrels of
oil was needlessly spilled because of the Coast Guard action.
Now, there they were with a problem. They're damned by the
papers for ruining all the birds and so on. If they said it was
a goddamn fool from the Coast Guard, then the Coast Guard would
have said, "Absolutely not. It's your fault, you bastards, you
did this." It would have been a real battle. So Standard, in its
own inimitable, tactful manner said absolutely nothing about it,
and said, "We're responsible; we'll clean it up." They didn't try
to blame it on anybody.
The spill was twice as bad as what it should have been
because of the activities of the Coast Guard, and it's never come
to light. When you read something about these large corporations
having no social consciousness, it isn't all true what you read,
because they do and they're in a very difficult position. It
doesn't make a damn bit of difference what they say; the reporters
and the public will twist it around anyway they want to.
Feingold: Even if Standard Oil had said that it was the Coast Guard's fault,
I suppose everyone would have said, "Oh, well, you're just trying
to pass the buck. Everyone tries to pass the buck on to the
government."
127
Crowley: Fred Hartley, who is a very short-spoken guy and president of
Union Oil not the kind of guy who is as tactful 'as the Standard
Oil people when they had the spill down in Santa Barbara channel,
and they killed a bunch of birds (somebody complained that they
killed 1,126 birds) Fred Hartley made the statement, "What kind of
a comparison are we talking about, killing 50,000 people on the
highway every year versus a few birds." So the newspaper came
out and said that Fred Hartley said, "What the hell difference
does it make if you kill a few birds with oil; it doesn't make any
difference."
It was taken completely out of context. He was merely
comparing the catastrophe that you run into every day with human
beings on the highway as compared with this catastrophe which was
nothing. Every day that the oil was flowing around there, the
slaughter on the highways was going on and on, and you didn't see
a thing about that in the papers. But here you saw the papers
filled with the fact that we'd killed 1,100 birds.
It's a valid comparison, I think. But if you're quoted out
of context, you're better off saying nothing, just keeping your
mouth shut .
Feingold: It looks like Standard Oil was smart to keep its mouth shut.
Crowley: You can call it smartness, or you can call it "no guts" depending
on your outlook. It's all very well to say that we all ought to be
smart and say nothing, but who knows? The oil companies are faced
with the problem today, and have been for the past several years,
as to petroleum shortage. What are they going to say? What are
they going to do? Are they going to say we're out of petroleum?
Then people are going to say, "Oh, my God. They're just trying to
boost the price up on us." Or are they just going to keep their
mouth shut; when you drive up to the service station and find there
isn't any more gas in the pump, then you'll say, "Gee, maybe we
ought to have rationing." They'll say, "Okay, have rationing."
They're not going to insist on rationing; they're going to let the
public demand rationing, the way I see it.
We are running out of petroleum because of the ridiculous
policies conducted by the Federal Power Commission over the past
fifteen years in the name of benefit to the consumer. It's not
been a benefit to the consumer at all; it's just been a tragic
waste of natural gas for fifteen years. Everybody in the industry
has said the same thing, but what the hell could you do about it?
128
XI PACIFIC DRY DOCK AND REPAIR COMPANY
[Interview 5: May 23, 1973]
Origins of the Company
Feingold: This week let's talk about Pacific Dry Dock and Repair.
Crowley: In 1912, the Crowley Launch and Tugboat Company leased a piece of
property over in Brooklyn Basin in Oakland and built a small
shipyard for dry-docking, cleaning, painting and repairing the
tugs and barges of Crowley Launch and Tugboat Company.
The land it was located on belonged to the City of Oakland
but had been put under a long-term lease to a fellow by the name
of [Horace W.] Carpenter who had agreed with the early city
management to lease all the Oakland waterfront property and
develop a port in Oakland. The Carpenter lease is a very
interesting history in the annals of California as to how the city
lost jurisdiction of its waterfront over there. It went through
the courts.
In any event, Carpenter leased a piece of it to a partnership
by the name of Breed and Bancroft; then Breed and Bancroft in turn
leased it to Crowley Launch and Tugboat Company. Crowley Shipyards
were started over there. They built one marine railway and a dock
and a mill for doing woodworking. It was called Crowley Shipyards.
That went along from about 1912.
Feingold: Did they service other tugs besides Crowley 's?
Crowley: At first they only did work on Crowley's equipment. When World
War I came along, they did work on anybody's equipment because
there was a tremendous demand for shipyard services during World
War I, and so they did repair work on all kinds of vessels.
129
Crowley: In the '20s it continued along. I worked over there in the summer
of 1931. By that time it had two marine railways, a machine shop,
mill, pipe fitting shop and so on.
In 1935 my father and I started a new corporation called
Pacific Dry Dock and Repair Company. The Pacific Dry Dock and
Repair Company purchased the lease and the facilities from Crowley
Launch and Tugboat Company and proceeded to operate as a separate
corporation a separate operation completely from what had been
known as Crowley Shipyard.
Feingold: Why was that decision made?
Crowley: That decision was made because it had always been difficult to get
the operating people in Crowley Launch and Tugboat Company to look
after the maintenance of their equipment. Any time anything got
in trouble they would say, "Send it to the yard and fix it." A
shipyard operated as an adjunct of a tugboat company can spend
money like it's going out of style fixing things up, because the
crews of the boats and the maintenance men on the boats and so on
say, "Well, if something goes wrong, send it to the shipyard."
They send the boat over there and they say, "Now, fix it."
You say, "Well, what's wrong." "We don't know but it doesn't run;
you figure it out." Fix it because it's Crowley Shipyard. As a
result, it became quite apparent that it would be a much more
economical way to run the shipyard as a completely separate
organization managed by a competent shipyard manager who is held
responsible for keeping the cost down and performing services.
Also, the Pacific Dry Dock and Repair Company would send bills
to Crowley Launch and Tugboat Company for services. Then the
operating manager would look at the bill and say, "He's robbing me;
this is too high." Then they would attempt to do things to keep
the cost of repairs down to a reasonable figure. So long as it was
part of Crowley Launch and Tugboat Company there was no billing
from the shipyard to the boat it was just part of the expense of
Crowley Launch and Tugboat Company and as a result a lot of money
was wasted.
Feingold: That would ultimately reflect back on the responsibility of the
people running the tugs, wouldn't it? I mean, under the old system,
they might be a little more lax in the upkeep of the boats.
Crowley: Yes. They didn't give a damn. They'd go over to the shipyard and
say, "Engine's making noises. Fix it." "What's the matter?"
"Oh, I don't know; you can trace it down." In other words, they
wouldn't have to work on it. They'd just have the shipyard work
on it.
130
Crowley: They'd also go to the shipyard and say, "I want a new set of
wrenches." They'd take all the rope and paint and supplies out
of the shipyard as it was because it was part of Crowley Launch
and Tugboat Company, and what difference did it make?
When it got to be a separate corporation and the people there
were responsible entirely for the operation and the financial
well being of the company, they didn't give anybody a can of paint
or a nail or a bolt or anything else without charging for it. This
had been a problem all during the '20s and the early '30s because
everybody just considered that the shipyard was a place where they
got things fixed and they got supplies and could get anything they
wanted.
Starting in September, 1935, was the commencement of the
operation of Pacific Dry Dock and Repair Company. The old lease
continued on, and there was a lot of lawsuits and whatnot in
connection with it .
Feingold: What about?
Crowley: Because the Port of Oakland claimed that the lease between Carpenter
and the city council had been fradulently made back in 18-something
or other, and therefore the leases should be renegotiated and so on.
I remember we had a twenty- five-year lease with an option for
another twenty-five years. We forfeited the option for the second
twenty-five years because it was legally untenable anyway, and
entered into a new lease with the Port of Oakland in 1940.
In 1940, I believe we were on a twenty-five-year lease; we
made a twenty- five-year lease with the Port of Oakland for Pacific
Dry Dock and Repair Company. Also, about that time shortly
thereafter they started to build a freeway through the yard. We
had to move the machine shop down and the marine railways down,
and we did quite an extensive rebuilding job. The shipyard is
located right beside the freeway over there.
Feingold: Just coming off the bridge?
Crowley: No. When you come off the bridge, then you start to go down to
East Oakland. The freeway runs past Ninth Avenue terminal. It
goes over Lake Merritt at least a stream leading into Lake
Merritt then it comes down and goes along the flat there and it
passes a Chris-Craft boat place there in the yacht harbor. Then
it passes a Pacific Dry Dock and Repair Company.
Pacific Dry Dock and Repair Company used to extend all the way
back into where the freeway is now.
131
Feingold: I assume that Oakland finally worked out its problems with the
Carpenter lease?
Crowley: Oh, yes, that was all settled. In fact, our twenty-five-year
lease expired in 1965, and we renewed it for another twenty-five
years in 1965. We're probably there till 1985.
Feingold: What function doe's a marine railway serve?
Crowley: A marine railway is an inclined set of tracks that go down into
the water. You put a boat into a cradle there's a cradle that
runs up and down the tracks and you run the cradle down, put the
boat in the cradle, and then pull the cradle up and pull the boat
up out of the water. That dry docks the vessel.
Feingold: I see. Then you don't have to pump water out afterwards.
Crowley: No. A graving dock is where you pump water out, and a floating
dry dock is a big barge with sidewalls that you flood with water
and it sinks down and you float the vessel in there and then you
pump it out and it raises up and lifts the vessel. Most of the
big dry docks are floating dry docks. The great big dry docks,
like San Francisco Naval Shipyards, is a graving dock where they
have a hole dug into a rock, you float the vessel in there and
then put a gate in.
Feingold: That was Bab cock's original idea.
Crowley: Yes. Babcock's original plan at the San Francisco Shipyard Company
I think that's what they call it San Francisco Dry Dock Company
was to dig that hole in the rock and put a gate in front of it.
Feingold: I believe in 1963 you bought the stock that your father had in
Pacific Dry Dock?
Crowley: No, not exactly. The stock of Thomas Crowley in 1963 was purchased
by the corporation. Pacific Dry Dock and Repair Company bought his
stock and paid him cash for the stock. He decided that he was not
going to engage in the shipyard business anymore. The income tax
laws gave him the right to sell his stock to the corporation on a
capital gain basis for half tax. He sold his stock to Pacific Dry
Dock and Repair Company and also signed a letter of agreement with
Pacific Dry Dock and the Bureau of Internal Revenue that he would
no longer engage in the shipyard business.
132
Comments on Finances
Feingold: Is that why he decided to get out of the shipyard business, or are
there other reasons?
Crowley: He was getting older, and he saw it as an opportunity of getting
some cash. Every dollar he'd ever made he'd always put back into
the business or paid income tax with it. This was an opportunity
for him to get some cash to provide for his old age, to make him
independently well fixed instead of merely having a lot of stock
in a tug and barge company which isn't worth the paper it's written
on if the tug and barge company doesn't do very well.
In fact, all his life every dollar he ever made he plowed back
in the business. That's the story of my life too. I really don't
have a bean except what's in the various companies. Some people
call that being a miser, some people call that saving, some people
call it re-investing in the business it all depends on how you
look at it.
I was reading an article in Fortune the other night about the
tremendous increase in the Japanese economy since World War II.
They stated that the reason the Japanese economy has been able to
expand so rapidly is the fact that the people of Japan save a great
deal more of their earnings than the Americans. They save something
like 25 percent of their earnings on the average throughout Japan,
and they put the money into investment making jobs and building
shipyards and steel mills.
This is one of the problems of our country as they see it.
This Fortune article was saying the same thing. In the early days
of our country, people saved an awful lot of money and re-invested
it or just put it back in the business, so to speak. Today, we're
using that money to live off the fat of the land, travel to Europe,
buy jet planes, buy yachts, have a house at Acapulco all that sort
of stuff. Even the working people are having a house in the
mountains and two or three cars, and all that sort of stuff.
Therefore, the great impetus for the expansion of our economy in
the late 19th century and early 20th century by saving money and
investing in business is gone. As a result, we're probably on
our way downhill, whereas the Japanese economy is obviously on
its way uphill.
Feingold: I wonder if that's a natural cycle that economies go through?
Crowley: I don't think there's any question about that. The Romans same
thing; Greeks same thing. Whenever a society gets affluent, they
spend less and less time working and more and more time "enjoying
themselves," and the economy goes downhill.
133
Feingold: I guess you're doing your little bit to preserve the economy!
Crowley: The main thing is that my father felt very strongly that he had
had Adversity and hunger in his youth, and he didn't want to buck
up against it again, so he invested everything that he ever made
back in the business. When when I came along, I did too. I think
after a while it just got to be a habit because he liked to see
the business grow, and my main interest in life, too, was to
pursue the business new tugs and new equipment and to do a
better job.
That philosophy can be criticized or lauded depending on how
you look at it.
Feingold: It sounds like good business practice to me.
Crowley: It's good for the business in that it helps the business achieve
economic independence and more equipment and the ability to do
more, and all that sort of thing. It's not good from the point
of view of stockholders because the stockholders don't get the
dividends that they could go out and do with as they wish. Whether
it's good or bad depends on how you look at it.
Feingold: Are any of your companies publicly owned, or are most of the
stocks owned within the family?
Crowley: The Shipowners and Merchants Tugboat Company did have quite a few
outside stockholders, as I told you earlier, because of the way it
was started in 1883 and the way it was reorganized in 1918. Over
the years, those stockholders have been gradually disappearing.
Now Shipowners is over 80 percent owned by the family. Drummond,
who had other stockholders, is now 95 or 97 percent owned by
Crowley. Those are the only companies with what you might call
public outside stockholders.
It may very well be somewhere down the road that we will
offer the stock publicly or merge the company with another company
that has publicly -owned stock, because one of the big problems is
what will happen to the business if something happens to me.
You're faced with very substantial inheritance taxes. There's
a lot of value in the company, but I have nothing to pay inheritance
taxes with, and they're of substantial value. Somewhere down the
line, the company may very well go public to be very sure that
that'll cover everything.
134
Present Operations
Feingold: Getting back to Pacific Dry Dock, I assume that now it does work
for more than just the Crowley tugs?
Crowley: Yes. Approximately 50 percent, on an average over the years, of
the work is done for outside customers and 50 percent for Crowley.
This varies from year to year, but this is the general average.
We bid on navy work, army work, and stuff like that. We do
various jobs for various customers.
Feingold: Is that how it would work with a public agency that you would bid
on?
Crowley: Public agencies always put their work out publicly. The Coast
Guard, the navy, the maritime administration, army transportation
corps they prepare a set of specifications and request bids on
dry-docking, cleaning, painting and repairing the various pieces
of equipment. We generally bid on them in competition with other
people in the shipyard business, and the low bidder gets the work.
Feingold: If you didn't get the business, who would? Who are your competitors?
Crowley: The Todd Shipyards in Alameda, Bethlehem in San Francisco, Willamette
Iron Works over in Richmond, Fulton Shipyard over in Antioch,
Sausalito Shipbuilding over in Sausalito, Anderson & Cristofani
here in San Francisco, Colberg in Stockton, and Guntert and
Zimmerman in Stockton. Those are the major competitors that we have.
Feingold: That's quite a few. Is there enough business to support everybody?
Crowley: No, there isn't enough business. The shipyard business in the Bay
is very sick and has been for a number of years. Bethlehem and
Todd's thought a few years ago that the North Slope [Alaska oil
pipe line] would promote shipyard business in the San Francisco Bay
Area tremendously. They both invested somewhere between fifteen
and twenty million dollars a piece in building big floating dry
docks. Now they're stuck with them and they've been suffering
horribly by having these big dry docks and no work for them to do.
Feingold: I guess that's one of the risks of the business; you never know
when something will develop and when it won't.
Are there unions that you have to deal with in the dry docks?
Crowley: Yes. The shipyards are all highly organized. The Metal Trades
Council represents a whole group of the shipyards' boilermakers
and welders, laborers union, machinists union, carpenters union,
135
Crowley: pipefitters union, and there are dozens of craft unions all coining
into the AFL. The shipyard industry negotiates with them on a
coastwise basis.
Feingold: Someone was telling me about an old navy tug, the Pocahontas ,
that's being rebuilt by Pacific Dry Dock.
Crowley: Yes. They're rebuilding a tug for us now. We bought it out of war
surplus .
Feingold: World War II surplus?
Crowley: Yes. The vessel was built in World War II. Just recently they
finally decided to sell it. We bought it and we're fixing it up
to put it in operation. Pacific Dry Dock does those kinds of jobs
for us, converting tugs and things of that nature.
We haven't been doing a great deal of conversion work lately
because, generally speaking, taking an engine out and putting a
new engine in today is more expensive than building a whole new
boat. This is because the cost of labor has gotten so high, and
the fact that you don't have the good craftsmen anymore. You have
people who are highly specialized. They can do one thing but
they're not jack of all trades. As a result, it costs more to fix
something up than it does to get a new one. If you have to have a
new one, forget it.
136
XII MERRITT SHIP REPAIR COMPANY
Origins of the Company
Feingold: Does Merritt Ship Repair Company do the same sort of work as Pacific
Dry Dock?
Crowley: Yes. Merritt Ship Repair is a different story. The Merritt Ship
Repair is located on the site of the old Hanlan Dry Dock that was
built in World War I.
Feingold: That's in Oakland?
Crowley: Yes, in Oakland, right at the entrance to Lake Merritt. Dan
Hanlan built this marine railway it was a great big marine
railway and a shipyard. Then he got into financial difficulties
in the ' 30s and George Arms of the General Engineering and Dry
Dock Company bought the Hanlan Shipbuilding and Dry Dock Company
in Oakland. They operated it all during the T 30s up until World
War II. Then
Feingold: If I can interrupt a second why did Hanlan have financial
difficulties? Was it just because of the Depression?
Crowley: Hanlan was getting old and he took a couple of bum contracts. The
marine railway, which had been built during the war, wasn't the
best job in the world and was having difficulties and expensive
to maintain. He just gradually died out and General Engineering
took the plant over and operated it.
Then, when World War II came along, General Engineering
concentrated on their Alameda plant and built a very substantial
plant over in Alameda and got rid of the Hanlan yard. The Hanlan
yard was taken over by a fellow by the name of Tony Martinolich.
137
Crowley: Martinolich got money out of the government to fix the plant up.
He junked the old dry dock; they just left it there. The navy
built a 2,800 ton concrete floating dry dock and put it into the
Martinolich plant there. Martinolich leased the dry dock from
the navy and the plant from the Port of Oakland and operated for
a number of years until he got into serious financial difficulties.
Feingold: How did he get into difficulties?
Crowley: By taking jobs that cost more to do than he got paid for them.
Any business gets into financial difficulties by the fact that
they don't take in more money than they pay out; they pay out more
money than they take in.
Feingold: Was this bad judgment on his part he underestimated the cost of
the job?
Crowley: Right. That's why any business gets into trouble because someone
uses bad judgment and doesn't have as much money coming in as he
has going out.
So, he got into serious difficulties and owed a lot of
creditors. The creditors came to us and asked us if we would buy
it out. Our plant at Pacific Dry Dock and Repair Company was a
little small for our ever- increasing size of tugs and barges.
We bought the capital stock from Tony Martinolich in the
company. Then we paid off the creditors at 30c on the dollar
in connection with the purchase of the stock from Tony Martinolich
and then operated the company on the basis of taking in more money
than we paid out. I forget what year that was that we took over
Martinolich sometime in the '50s I'd say. Do you want the date?
Feingold: If you have it. I notice I don't have it from your notes.
[Crowley asks Mr. Jenkins]
Crowley: Mr. Jenkins thinks it's 1951.
Feingold: In your notes, you said the creditors were represented by the
Board of Trade in San Francisco. What is the Board of Trade?
Crowley: The Board of Trade is an organization when people can't collect
a bill, they go to the Board of Trade and try and get the bill
collected from the customer. The Board of Trade gets all the
creditors together and then tries to arrange some method of
paying .
Feingold: Is this a private group?
Crowley: Yes, it's a private group having to do with bankruptcy cases and
stuff like that.
138
Feingold: Are bankers on tl
Crowley: I really don't know. I haven't had anything to do with them
before or since. It was kind of a branch of the Chamber of Commerce
or something like that. It was 1953 [the date Crowley took over
Martinolich] . The Board of Trade arranged this deal.
Feingold: You acquired the common stock for $100?
Crowley: Yes, because it wasn't worth anything. The main thing was that the
creditors were going to have to take over the company. One of the
assets of the company was the fact that the company did have a
substantial tax loss carry forward.
Feingold: You'll have to explain what tax loss carry forward is.
Crowley: The company had been losing money for years. When a corporation
loses money, it doesn't pay any income tax. Under the income tax
law, you can carry your losses forward into future years so that
if you make a profit in future years, it offsets the losses you
made in the previous years .
A corporation is considered as an individual; a corporation
has its own existence. This Martinolich Ship Repair Company had
existed as a corporation and had several years of losses. In
future years , if you could run the company and have it show a
profit, it would not have to pay an income tax on that profit
because those profits could be offset against losses for prior
years .
Since that time, the Bureau of Internal Revenue has put in
a little more stringent regulations Congress has put in more
stringent regulations and it's not quite as easy to do as it
was then. It's still done and it's still legal; the main thing
is to conduct the same business the way it always was by the
corporation.
The problem was that the corporation was broke. It owed a
lot of money. The people that the money was owed to could have
put it into bankruptcy and divided up what was left, but there
wouldn't be anything left to divide up, least of all the tax
loss carry forward because that would automatically be wiped out.
We had need for a going business such as that which had the
navy contract for the 2,800 ton floating dry dock and had a going
plant and a lease with the Port of Oakland for the plant. We
could use the facility very nicely and continue the business as
it had been continued in the past. It was a natural for us to
acquire the company.
139
Crowley: As far as Tony Martinolich was concerned, he owned the capital
stock of the company, but that was worthless as long as the
creditors were going to foreclose and take away whatever he had.
We put this deal together whereby we paid $100 for the worthless
capital stock and then also paid the creditors. I believe it was
some 30c or 40c on each dollar of their claims which, if they
had foreclosed, they wouldn't have gotten they wouldn't have
gotten 2c. They were glad to get the 40c.
We took the company and continued to run it in its traditional
business of dry docking Coast Guard cutters, army and navy vessels,
as well as our own vessels.
Present Operations
Feingold: Does that put it in competition with Pacific Dry Dock?
Crowley: Yes. It does compete to some extent with Pacific Dry Dock, but
it usually handles larger vessels than Pacific Dry Dock. Pacific
Dry Dock can only dry dock a vessel up to a maximum of 1,000 tons,
whereas Martinolich's can dry dock a vessel up to 2,800 tons. We
have tended to do certain types of work in the Merritt Ship Repair
Yard and other types of work in the Pacific Dry Dock and Repair
Company yard, and both are best suited for different types of work.
The way it stands today, however, we have a manager, Jack
Conklin, who runs both yards. The competitive features have been
gradually fading away because, in the first place, there's not
enough business to compete over, and in the second place, the
main idea is to run the yards as efficiently as possible without
duplication of service and so on. We operate as two branches of
one yard, so to speak.
Feingold: Are you thinking of combining them?
Crowley: The main problem of combining them that we're up against is the
fact that Merritt Ship Repair has a contract with the CIO machinists
local, and Pacific Dry Dock has a contract with the AFL machinists.
These are certified bargaining agents under the National Labor
Relations Act. If we combined the two, we'd either have to hire
all AFL machinists or all CIO machinists and either outfit that
had their machinists put out of work would picket the place. It's
an insoluble problem, and so there's two yards instead of one.
They both do a different type of work more or less; it really
presents no great problem. They don't wastefully compete anyway.
If we can do a dock job cheaper at Martinolich, we'll do it there;
140
Crowley: if we can do it cheaper at Pacific Dry Dock, we'll do it there.
The customer doesn't care so long as the job is well done at a
reasonable price.
Feingold: When was the name changed?
Crowley: Just a few years ago. We kept the name Martinolich Ship Repair
Company for many years. I don't know I'd say we changed about
1969 I think. We named it after Dr. Merritt, who was one of the
early mayors of Oakland, who had Lake Merritt named after him.
We called it Merritt Shipyard.
Feingold: In your notes, you said something about how the creditors' claims
were later sold to B.L. Haviside?
Crowley: Yes. The creditors' claims were later sold to B.L. Haviside.
After Haviside held the claims for a while, Martinolich Ship
Repair paid off the claims.
Feingold: Why did he buy the claims?
Crowley: He wanted to make a little money. He was willing to buy the claims
for a lump sum. Then when the claims were paid off, he received
a profit for the claims.
Feingold: Who is he? His name has come up before.
Crowley: He's dead. B.L. Haviside was the son of Harry Haviside. They
owned a company called the Haviside Company. It was a ship
chandlery in San Francisco for many, many years. They also had a
derrick barge business in San Francisco. They finally pulled out
of the derrick barge business in the middle '60s. "Tote" we
used to call him; he died a few months ago. His son, who started
out in life spending money like it was going out of style and
drinking and raising hell generally, finally settled down about
four or five years ago and started a contracting business. He's
now a contractor for marine construction on small jobs.
He got married again; that's what settled him down I think.
He goes out and runs the bulldozer and the various machines he
and his partners. They work on the jobs morning, noon and night
and weekends. Due to the fact of the ridiculously high construction
rates of pay that you pay men today, they just run the equipment
and make all kinds of money because they're saving the labor cost.
Feingold: Very clever.
141
Crowley: Not only clever, but he's in excellent condition. He's strong as
an ox and healthy as a horse, where before he was always sick and
fat and flabby. Now he's all bone and muscle and enjoying life
a lot more than he did when he was driving around in Cadillacs and
drinking up all the booze in sight and so on.
Feingold: It shows what good honest work can do for a person.
Crowley: This is right. This gets back again to the question I brought
up earlier, and that is, if you reinvest the money in the business
and work like hell, you're a damn sight better off than if you
take the money and blow it down a rate hole on yachts, planes,
high living, and so on and so forth. This country today is kind
of like B.L. Haviside, Tote's son, Byron, was ten, fifteen, twenty
years ago. Japan is like Byron is right now.
You hear the statement "our affluent society." In that
statement is the answer to the whole thing we are spending money
like it's going out of style. Everybody wants to live off the fat
of the land and, as a result, we're going downhill as a nation.
The Russians are coming up and the Chinese Communists are coming
up, the Japanese are coming up a lot of people coming up the line,
and a lot of them going down the line. Apparently the British
and ourselves are on the way down.
They've even interpreted it as to moral turpitude in connection
with Watergate and all that sort of stuff. It's just part of the
whole damn system; we've all got too much.
Feingold: In the notes that you wrote up on Merritt Ship Repair, you also
talked about negotiations over the lease between the navy and
the Port of Oakland. The navy finally arrived at a settlement
you said, "whereby the Port of Oakland took over the entire
property," and then leased it to Merritt, is that right?
Crowley: That's correct. However, the floating dry dock is still owned by
the navy. The floating dry dock is leased to Merritt by the navy
and the rest of the yard is leased to Merritt by the Port of
Oakland.
Feingold: Do you know why there was that difference?
Crowley: Because a floating dry dock is a vessel, and all the other stuff
is fixed to the land the dock, the crane, the buildings and so
on and goes with the real estate. They finally settled on the
basis that the Port of Oakland would take over the whole thing and
the navy would retain ownership of their floating dry dock.
142
Ship Building
Feingold: I think I asked you several weeks ago if you would ever consider
going into ship building as opposed to just ship repairing.
Crow ley: Yes. At Pacific Dry Dock we did a certain amount of building of
barges we built water taxis in 1937-38 and barges in 1939. Then
we built navy barges in '40 and we built self-propelled lighters
in '41. In 1942, we were finishing up three self-propelled
lighters for the navy. At that time we had to decide whether
we were going to go into ship building in a bigger way because of
the opportunities of World War II or cut out the building at
Pacific Dry Dock and merely stick to repair work. We decided at
that time that we did not want to go into new construction and
would confine ourselves to ship repair. We didn't build any more
of these vessels for the navy.
Construction work contracting is a specialized type of
service. Repairing is a service industry, somewhat like furnishing
tugboat services to a ship or repairing a ship or something of
that nature. We've always been in the service business and we're
going to stay in the service business. We felt that new construction
or contracting was an entirely different type of business we're
not suited to be in.
Feingold: I think you said something about difficulties with drunken navy
inspectors?
Crowley: Yes. When we did build these self-propelled vessels, we were the
prototype yard for design work and approval. Whenever you're
building a naval vessel, you have to make very, very detailed
designs and drawings and then get them approved by the navy before
you can proceed. We were unfortunate enough over at the yard to
be inflicted with an Annapolis graduate who had never made his way
in the navy because of his personality and love of the bottle, so
they dumped him on us.
We were really stuck with quite a problem. We'd get up all
the drawings all the design work and then he would never be
sober enough to approve the drawings. Everything had to stop while
we tried to sober him up to approve the drawings. Then we'd come
over to San Francisco with the supervisor of ship building and
complain. He would say, "Go back and see Commander So-and-So."
Christ, it was just one thing after another.
Finally Bob Tate, who was a commander in the navy stepped in
and he approved the drawings. He later became the naval architect
for Matson Navigation. He finally later committed suicide.
143
Feingold:
Crow ley:
Feingold:
Crowley :
Feingold:
Crowley:
You also mentioned that the decision not to go into ship building
was made as you and your father were driving back across the Golden
Gate Bridge.
^
Back across the San Francisco-Oakland Bay Bridge. I didn't feel
that my father was temperamentally suited to be in the construction
business. The construction business is where you go out and you
take a job and you say, "I will build something for a million
dollars." You go ahead and plan it and build it. If it costs
you more than a million dollars, you lose money; if it costs you
less , you make money .
My father had always been in the business of giving services
to people furnishing a launch service, a tugboat service or
something of that nature, which is not constructing anything,
but is a service type of thing.
There is a great distinction in my opinion in service industries
as distinguished from manufacturing industries. I have never been
in a manufacturing industry and I have never particularly cared to
be in the manufacturing industry. I'm more interested in running
a boat or furnishing a service on a boat to somebody.
Some people are natural putterers and makers of things and
other people are natural doers of things. My father was a natural
doer of things but not a maker of things. I feel I'm more or less
the same way and would rather be in the service industry than in
the manufacturing.
He was thinking of going into construction, or continuing the
construction work, and you were arguing against him?
No, we didn't have any great arguments. We were faced with
opportunities because the navy was clamoring for additional ship
building facilities, and they'd gladly have us take on additional
jobs. They wanted us to build twenty more of these self-propelled
lighters , and also build salvage tugs and expand our shipyard at
the navy's cost, and all this other stuff.
We discussed it and decided not to do it. The only way we
could stop doing it was to stop doing it altogether. We just
built the three of them, and when the contract was finished, we
said, "That's it. Goodbye and good luck. We're not going to do
any more."
Who builds your tugs and launches and barges now?
At
Wherever we can get the best price and the best workmanship,
the present time we have four tugs under construction at the
McDermott Shipyard in Houma, Louisiana. We have four large barges
144
Crowley: under construction at Bethlehem in San Francisco. We have had a
lot of work done by Pacific Coast Engineering in Alameda,
Gunnerson Engineering Works in Portland. Bethlehem has done work
for us before and McDermott has done work for us.
We're not particular, as long as we get a good price and a
good job.
Feingold: How does that work? Do you accept bids?
Crowley: First we prepare a specification of what we want to build. Then
we sometimes put it out to bids of any yards that want to bid on
it, or we just put it to a select few yards that we would like to
have bid on it, or we may just sit down and negotiate with one
yard to do it if the price is satisfactory. We think we know what
is a fair price, and if they give us a fair price they can go
ahead and build it.
Colberg, up in Stockton, has built all our passenger boats.
We have a great deal of confidence in Colberg. We just show them
the vessel we want to have built and he goes ahead and builds it
on a time and material basis.
Feingold: How is the building of a boat like that financed?
Crowley: Normally, the building of a boat when you start with a small boat
you finance that out of your savings account. As the boat gets
bigger and there's more capital involved, we have generally
financed it by paying 25 percent of the cost ourselves and borrowing
75 percent of it from a bank with a repayment over five years.
Then, as the equipment got bigger and there was more money
involved, we paid 10 percent of it down and would finance the other
90 percent over a five-year period. Then, we decided to finance
it over a five-year period with a balloon payment at the end, which
they would further finance over another five-year period. That
meant that you were paying the bank loans off over a ten-year
period.
Currently we are now availing ourselves of what's called
Title 11 mortgage insurance under the Merchant Marine Act of 1960,
whereby the government will guarantee a long-term mortgage on 87 1/2
percent of the cost of the equipment, and this will be a twenty-five-
year loan that would cover 87 1/2 percent of the cost of the
equipment. That's our current method of financing the barges, and
probably those tugs. As far as the passenger vessel we just built,
we sold an oil barge last year and we're using the money we got
for the sale of the oil barge to pay for the passenger vessel.
145
Feingold:
Crowley:
Feingold:
Crowley:
Feingold:
Crowley:
Which company is the passenger boat going to be for?
Harbor Tug and Barge Company.
Will it be a ferry?
It's a boat that runs between Long Beach and Catalina, a ferry
boat. It's not a ferry. My idea of a ferry is a double-ended
vessel that you drive on and drive off. Other people think any
boat you run between two points is a ferry. To that extent, it's
a ferry. Really it's an excursion boat.
Will it have automobile capacity?
No.
146
XIII FOREIGN OPERATIONS
Rig Tenders
Feingold:
Crow ley:
Feingold:
Crowley:
Feingold:
Crowley:
Feingold:
Crowley :
Feingold:
Crowley:
I'd like to switch gears a bit to the foreign operations.
Singapore?
Yes. Could you tell me about Rig Tenders?
Rig Tenders, yes. Rig Tenders is a company that was started in
1966 to furnish supply boat and crew boat services to the oil
companies in Cook Inlet [Alaska] . Then, when the business folded
up in Cook Inlet in 1971, we sent a lot of our equipment over to
Singapore. It operates under the name of General Marine Inter
national Services out of Singapore, and it runs in the Indonesian
oil patch over there. We presently have two supply boats chartered
to [inaudible] and they're on their way to the Persian Gulf to
work there for six months. The rest of the equipment is working
out of Singapore in the Indonesian waters.
What is it doing?
It furnishes services to the offshore oil industry. In other words,
they carry men out to the platforms and bring them back, or carry
supplies to the floating drill rigs working out there, and they
run back and forth and perform services in the transportation of
men and materials.
About how many boats are there?
There are twenty-six tugs, barges, small tugs and supply boats and
crew boats operating out there now.
Are they all chartered from one company?
No, they're all different companies. They work for
147
Feingold: I mean of the tugboat companies here.
Crowley: Of the tugboat companies here, the supply boats and crew boats
are mostly Rig Tenders' and then the tugs are from different
companies .
There are two 200-series barges from Bay Cities, and eight
flat barges from Harbor Tug, and a couple of tugs from Puget
Sound different companies.
Puerto Rico Marine Lines
Feingold: Then I think you mentioned Puerto Rico Marine Lines?
Crowley: Yes. Puerto Rico Marine Lines is a common carrier freight service
run between Calves ton, Port Arthur and Lake Charles down to San
Juan, Ponce and Mayaguez in Puerto Rico. They have a sailing
roughly every two weeks from the west Gulf ports to Puerto Rico.
They carry general cargo in their barges towed by tugs.
Lykes Brothers Steamship Company are the agents. They dig
up the cargo and act as agents for Puerto Rico Marine Lines.
Feingold: How many vessels are involved in that operation?
Crowley: Two tugs and three barges.
Feingold: That's relatively small then.
Crowley: They're pretty big barges. It's a fairly substantial business
because there's a lot of expense involved and a lot of revenue.
They gross about $4,000,000 a year, so it's not a small operation.
They don't make any profit, however.
Carriba Hydro-Trailer
Feingold: You also mentioned Carriba Hydro-Trailer?
Crowley: Carriba Hydro-Trailer was a roll-on roll-off freight service from
Miami to Puerto Rico. They were competing with an outfit called
TMT Trailer Ferry. In March or April of 1972 they time chartered
their barges or they bareboat chartered their barges and time
chartered their tugs to TMT and discontinued hauling out of Miami.
148
Feingold: Why did they make that decision?
Crowley: Because there was not enough traffic moving out of the Miami
area to support the operation, and it was an operation we were
conducting 3,000 miles away. It wasn't too well managed and it
was losing money hand over fist. We figured we'd better stop
losing money doing that and work with our competitor to perform
a profitable service for them and for ourselves.
Feingold: How many vessels are now chartered?
Crowley: Now there are three barges, 400 feet by 100 feet that carry
ninety forty-foot trailers apiece, and three 7,000 horsepower tugs
sailing out of Jacksonville once every three or four days and going
to San Juan, Puerto Rico and coming back. They make an entire run
in about ten and a half days.
Feingold: What sort of commodities do they carry?
Crowley: All different kinds of commodities. Most of the cargo is moved
in these 40-foot trailer vans in which they could carry anything
that a trucking industry would carry. A lot of food stuffs are
carried down to Puerto Rico, and manufactured articles from this
country. Then they bring a lot of stuff back rum, chemicals,
hosiery. There's a lot of manufacturing that goes on in Puerto
Rico, also, because of the cheap labor. The predominant trade is
southbound to Puerto Rico.
Hauling Cargo to Hawaii
Feingold: I think I asked you several weeks ago if you had ever considered
getting into long-distance hauling, like to Hawaii.
Crowley: Yes. What did I say then?
Feingold: You said that you hadn't, but I wanted to get it on tape.
Crowley: A tug and a barge is limited because of its speed to relatively
short hauls. We feel that a haul by tug and barge to Hawaii is
non-competitive because it's over 2,000 miles, and it's a long way
to travel. We figure that a properly designed, built, and operated
self-propelled ship can do a better job hauling to Honolulu than
a tug and a barge.
There are other people in the tug and barge business who
don't agree with this, and they haul to Honolulu on a barge.
Matson Navigation Company, who is the predominant carrier in the
149
Crowley: Hawaiian Island trade, has now acquired two roll-on roll-off ships
which will save them a tremendous amount of money transporting
their non-containerizable cargo and, in my opinion, will become
much more efficient in future years. The barge haulers are going
to have a tough row to hoe trying to haul cargo to Honolulu in
competition with Matson.
Feingold: It sounds like they got onto a good thing.
Crowley: Matson started their containerization program about fifteen or
twenty years ago. They did a hell of a good thing getting into
containerization; they did a good job of it. They failed, however,
to provide for hauling non-containerizable cargoes, which they
continued to haul in break bulk ships and in container ships that
also carried break bulk.
This has cost them a fantastic amount of money over the years.
It's only last year that they finally realized their basic mistake
in the transportation system; that is, to try and haul break bulk
cargo along with container cargo. Container ships should move
solely as a highly specialized container ship. If they have to
move other stuff, like tractors and busses and oil drills and so
on, they ought to move those in a ship that's actually suitable
for that type of cargo.
By acquiring these two roll-on roll-off ships this year they
will finally lick their problem of huge losses on their non-
containerizable cargo.
Feingold: Is Sea Land in competition with Matson at all to Hawaii?
Crowley: No. Sea Train is.
Feingold: Which company is it that just came out with that new enormous
Crowley: That's Sea Land. Sea Land has built eight SL-7's, which are huge
container ships that make thirty- three knots, 120,000 horsepower
and will carry a 1,096 forty-foot equivalent trailers. These
vessels are primarily designed for trans-Atlantic and trans-
Pacific runs. They have been built in a foreign shipyard so that
they will not be eligible to run to the Hawaiian Islands with
those ships because, under the Jones Act, a vessel to run in the
domestic trade has to be built in an American shipyard.
They also are two of the largest ships, really, to run to
the Hawaiian Islands, because a much greater percentage of their
time would be spent in loading and unloading the ship on a short
run where they can't take advantage of the thirty-three knots.
150
Crowley: When you build thirty-three knots into a ship, then you want to
have a long, long run because that's where you can use the thirty-
three knot speed.
The Sea Train runs to the Hawaiian Islands in competition
with Matson. They have some war surplus rebuilt ships that carry
about three or four hundred containers, and they're giving Matson
a rough time. I don't know how profitable it will be for the
long run, because they just run from Oakland to Honolulu and back
again. To get their southern California-Hawaiian cargo, they have
to ship it up here by rail or truck out of southern California.
Then to take their cargo to the outer islands, they have to trans
ship it by a [inaudible] down in the islands. They have an awful lot
of expense.
Sea Train is having other financial difficulties as well as
their Hawaiian Island trade. They're losing money in the Puerto
Rican trade, and they're having difficulties with their shipyard
in Brooklyn. There have been some real long-term serious financial
problems. How long they'll stay in the Hawaiian Island trade I
don ' t know .
Feingold: I came across a clipping in one of your father's scrapbooks. In
1948, Ocean Prince hauled a barge with steel to Hawaii. Was that
just a unique happening?
Crowley: Just an occasional job. In fact, that sounds to me like it might
have been the time of the longshore strike they had. The longshore
men let tugs and barges run but they wouldn't let big ships run.
The time that occurred was '49 I think, and we took a load of
steel down with a barge.
Other Foreign Involvements
Feingold: You told me several weeks ago that two of Shipowners and Merchants '
biggest tugs were now operating between Jacksonville and San Juan.
I presume that was for TMT. Which tugs are those?
Crowley: Those are the >ea Swif t and the Sea Flyer.
Feingold: Were those built fairly recently?
Crowley: Yes. Those were built in about 1968. They were the first two of
the 7,000 horsepower boats. We built four more in 1969.
Feingold: Which were those?
151
Crowley: Those were the Guardian , the Zeus , the Pathfinder and the Mars.
Feingold: Where are they now?
Crowley: The Mars is also on the Jacksonville TMT run. The Guardian, the
jeus_, and the Pathfinder are on the Seattle-Whittier run of
Alaska Hydro.
Feingold: I came across this bit of ancient history in your father's
scrapbook. In 1916 your father went to Peru to establish a
tugboat and launch service. I wonder if he ever told you about
that.
Crowley: He took a trip with my mother down to Peru on a Grace Line ship.
He had sold various tugs to South American people, and he was
very friendly with W.R. Grace and Company. Grace had his ships
running down there. He really just took a long trip on a ship-
it wasn't with the idea of starting a tugboat company but he saw
various people down there and how they were using the tugs that
he'd sold them.
Feingold: I see. Did he or you ever do that kind of thing again, of advising
any foreign operations setting up tug companies?
Crowley: Yes. I took a trip down to Rio about 1968 or '69. Some Norwegians-
Larsons wanted to build a tug and a barge to trade on the Brazilian
coast. I went down there and discussed it with them. We were going
to be partners in the thing, but we finally decided just to take
a fee for our naval architecture services or something like that.
We didn't engage in the business. They built the tug and the barge
and are using them down in Brazil now.
We don't do that very often; we usually stick at home.
Feingold: You could spread yourself pretty thin.
Crowley: Yes. There's no point in it.
152
XIV LABOR RELATIONS
[Interview 6: June 13, 1973]
Prior to and After the 1934 Strike
Feingold: I thought we'd talk about labor unions today. I don't know quite
what the best way to approach this is. Should we go union by
union?
Crowley: No. I think the best way to attack it is to go historically.
Feingold: Start at the beginning?
Crowley: Yes. The beginning of my knowledge of labor unions is the
International Sailors' Union that was run around here by a man by
the name of Andrew Furuseth from the turn of the century on. He
tried to organize the sailors, and they had a union.
In 1921 the shipowners were able to break the sailors' union
and the longshoremen's union and all the maritime unions down to
such an extent that the deep water ships didn't have any union
representation on them at all, and the longshoremen were relatively
unorganized.
They did start a company union in the Twenties, a company
longshore union I forget the name of it and the people had to
belong to it to get work on the waterfront. Then when Franklin
D. Roosevelt came into power, he passed the Wagner Act and this
opened the door for unionization.
Feingold: When the shipowners got rid of the unions in 1921, were the
shipowners organized? Were they working through a group?
Crowley: Yes. The shipowners had some organization. I don't remember what
they called it Waterfront Employees Association or what it was .
You'll have to get that story from the shipowners. I'm merely
leading up to labor unions on the tug boats .
153
Crow ley: Prior to 1934, most of the men who worked in the tugboats either
belonged to the union or did not most of them did not. The
company had no union agreements. The company just operated and
paid the wages that they thought were fair" for the time, and the
same thing for the working conditions .
However, there was one union that had always existed, or had
existed since the early part of the century, and that was the
Marine Engineers Beneficial Association, Local 97. The business
agent was a fellow by the name of Randolph Merriweather.
Merriweather was a former gas skinner or launch operator.
This union consisted mainly of the engineers who ran the
gasoline-powered launches in the Bay Area. It had pretty good
representation amongst the men, but it was unable to do anything in
connection with negotiating with the employer prior to 1934.
The longshoremen's union was fairly active prior to 1934.
When the 1934 longshore strike was called, Harry Bridges got
control of the longshoremen's union. There was a fellow by the
name of I've forgotten his name, but he had tatooed on his hands
"hold fast." He was an old sailor who had come ashore. They'd
tatooed on his hands "hold fast" because they were up in the
rigging taking a sail in and they had to hang on. The idea of
tatooing "hold fast" on the hand was a reminder for those fingers,
to hold them up there or he wouldn't be.
Anyway, the '34 longshore strike is pretty well documented.
What happened during that strike was, then, that the other labor
unions in the Bay Area, including the Marine Engineers Beneficial
Association and the Inland Boatmen's Union, which was then called
the Ferryboatmen's Union, and headed by a fellow by the name of
Clyde Deal they got very active and they organized the men who
worked on the Shipowners and Merchants Tugboat Company tugs . The
gas skinners were already organized in the MEBA.
In 1934 they came down and they said, "Now we have all your
employees and we want to sign a contract." After considerable
negotiations, contract terms and wages were arrived at, and we
signed. The Shipowners and Merchants Tugboat Company and the
Crow ley Launch and Tugboat Company signed labor contracts with
the Marine Engineers Beneficial Association and the Ferryboatmen's
Union and the Masters, Mates and Pilots, Local 40.
These agreements provided for a closed shop and various wages
and working conditions and so on. That was the beginning of
unionization in the tugboat industry on San Francisco Bay. Those
labor negotiations continued on and on. Every few years the
contract would expire and there would be further negotiations or
a strike, and finally a settlement of the strike. The wages and
working conditions gradually improved throughout the years.
154
Crowley: Clyde Deal was followed as business agent by a fellow by the name
of John Evans in the boatmen's union. Then John Evans' place
was taken by Raoul Vincilione, who just recently retired from the
Inland Boatmen's Union. That job now is handled by a fellow by
the name of Jimmy Seakin [name may be misspelled] .
Merriweather retired out of the MEBA after World War II, and
Tiny Ferrin took over the job. He was finally ousted by Charlie
Black about 1967, and Charlie Black is still running the MEBA.
The MEBA grew tremendously in the thirties because, although
the deep water engineers were not too well organized, this union
that Merriweather had, organized a lot of the deep water engineers out
of San Francisco and became a pretty substantial union instead of
just a bunch of gas skinners. -It became a great deal stronger than
the Ferryboatmen's Union or the Boatmen's Union.
The deep water sailors were organized into the Sailors' Union
and also in the Marine Firemen and Marine Cooks and Stewards, which
were other separate unions.
I think the Shipowners and Merchants Tugboat Company was tied
up on strike for a short time in 1935, and in 1939. There were
no strikes during the war, but there were strikes after the war.
We had an eight and a half month strike in 1959 and a nine month
strike in 1969.
Strikes. 1939-1959
Feingold: If I could back up a bit on some of these strikes. I have a note
here that in April of 1940, a nine month strike of the Inland
Boatmen's Union was settled. It was a strike against Shipowners
and Merchants.
Crowley: Yes. That was the 1939 strike. They went out on October 1, 1939.
Feingold: Is the Inland Boatmen's Union a separate union, or are they part
of another union?
Crowley: The original Ferryboatmen's Union was a completely separate union
started by Clyde Deal and consisted of all the unlicensed employees
of the ferryboats then operating on the Bay. They later changed
their name to the Inland Boatmen's Union and then they later
affiliated with a similar union up on Puget Sound. They're now
the Inland Boatmen's Union, which is a district local of the
Seafarer's International Union which is a national union run by
Paul Hall.
155
Feingold: I believe that '39 strike was settled with the help of the Federal
Maritime Commission?
Crowley: No Federal Mediation Service. The Federal Mediation Service gets
into all the waterfront disputes, and they attempt to act as a
go-between the parties and settle the various strikes. They used
to be quite active; I haven't seen a great deal of Federal
Mediation Service in recent years. In the Thirties and the Fifties
and Sixties they were doing quite a job. They seem to have fallen
into disuse in recent years.
Feingold: Why is that, do you know?
Crowley: I don't really know. When the Federal Mediation Service came into
being, when it first became active under the New Deal administration,
they were usually retired union men and they were used to try and
hammer a better settlement out of the employer. So they were
well received by the unions and not too well received by the
employer, but the employer couldn't do a thing about it.
Over the years, as the pendulum has swung the other way and
the unions have all the power, the Federal Mediation Service
consisted mainly of retired labor leaders. It has nothing to sell
to the unions, and as far as the employers are concerned, they're
not interested in having a former labor leader settle their disputes
for them.
I think that the union side of the bargaining table just
said, "To hell with the federal mediator; we don't want him,"
which has made him ineffective.
Anybody with an ounce of fairness or common sense can see that
the unions have all gotten too much anyway. It's raising cain with
the economy, and these additional wage increases now are not to
protect the poor working man but to just get more and more, which
is one of the basic causes of our inflationary trend.
Feingold: Have wage increases been the center of a lot of these strikes?
Crowley: Well, under the term "wage increase" you're talking about wage
increases and working conditions. A wage increase includes pension
benefits and health and welfare and so on, the increased wage
cost to the employer. Increased overtime, increased conditions
whereby they have to get paid overtime regardless of whether they're
entitled to it or not, in my opinion increases wages, obviously, if
you consider wages all the money they take home.
The strikes are all generally in connection with trying to get
more and more and still more and do less and less work for more and
more money .
156
Feingold: I have a note here that in 1948 there was a strike at the Richmond
Refinery that somehow affected United Towing Company.
Crow ley: That was the first strike that affected the major oil companies.
This was not only at the Richmond Refinery but it was at the
Martinez Refinery and the Avon Refinery. All the refineries were
tied up on strike by the oil workers' union.
The unionized tugboat men and tanker men would not go through
a picket line to pick up the petroleum at the refinery docks .
Some of the office people at United Towing Company ran a couple of
tugs and a couple of barges, hauling petroleum around the bay. The
same thing was true for River Lines. They ran some tugs and barges
with people from the office.
I worked on tugs for two weeks doing it and so did Bob Dyer
and others around here.
Feingold: Was there any problem with that? Were you heckled at all by picket
lines?
Crow ley: Picket boats would go by and they'd heckle you but it didn't mean
much.
Feingold: Were there any legal actions taken during that strike?
Crowley: Not that I know of; not that I can remember.
Feingold: Then in 1951, I have a note that there was a jurisdictional fight
between the CIO's MEBA and the AFL's Brotherhood of Marine
Engineers.
Crowley: It didn't affect us in anyway. There may have been a jurisdictional
fight on the waterfront with Standard Oil Company that sounds
like what that's all about but that didn't effect the tugboat
business at all.
Feingold: I see. Then in 1960, I have a note here, I guess in late 1959
there was an eight and a half month strike by the Inland Boatmen's
Union against tugboat and barge operators .
Crowley: Yes, against Shipowners and Merchants Tugboat Company. That
eight and a half month strike in '59 was only against Shipowners
and Merchants Tugboat Company. Bay Cities Transportation Company
and others kept running.
Feingold: I see. Now, my notes say that the union insisted that Red Stack
deck crews should have $25 a month more than the crews on other
tug lines .
157
Crowley: That may very well have been; I don't remember.
Feingold: I was wondering why they would make that kind of demand.
Crowley: Because they thought they could get it.
Feingold: I mean was Red Stack doing significantly different business?
Crowley: They were docking ships. They were the big tugs that were docking
the ships , whereas the other tugs were generally towing barges
and things like that.
I think that the deck hands on the smaller boats were getting
paid more. What they wanted to do was to get the Red Stack deck
hands up to the same level. They wanted a $25 greater increase to
bring them up to the level of the deck hands on the smaller tugs.
The reason the deck hands on the smaller tugs got more money was
the fact that they also steered the tug and did a lot more than just
be a deck hand.
The unions figured out that the fellows who were deck hands
on the Red Stack tugs, who just acted as deck hands only and never
steered the tug because there was a mate there, that they ought
to get boosted up to the same level as the deck hands that did
steering on the small boats.
That eventually came to pass. Later on, the unions claimed
that the deck hand that had to steer on the small boat ought to get
paid more than the deck hand on the Red Stack tug that didn't
have to steer. They got a special classification called steering
deck hand into effect so they could get more money.
To the layman, the world of labor relations is a complete
jungle, and they don't know anything about it. It would make a
good joke book to listen to all the arguments or to write down
the arguments that labor unions devise to get more and more and
more money, regardless of the merits or the equity of the situation.
They'll pick up anything to try and get the wages boosted up.
In fact, it got so bad in the maritime industry that they
call it whipsawing. In other words, one union will go in and get
a rate of pay or a condition that's different from the other
union. The first union will come in and say, "They got it so we
want it, but we want this besides." They'll get that, and then
the other union comes back and says, "You gave them this much more
so we've got to get that," and so on.
158
Crowley: The classic problem that we've had in the tugboat industry is that
the deck hands will come in and say, "We want a wage increase of
x number of dollars per month." The captains, mates and engineers
will come in and say, "We want a wage increase of x percent per
month . "
If you grant a percentage rate increase to the captains and
engineers, then the deck hand will say, "We want the same amount
in dollars which they got, which would be a bigger percentage for
us because here's our scale." Then if you gave them that, then
the engineers and captains would come back and they'd say, "We
want a percentage based on the percentage that the deck hands get."
You just go on and on. It's a spiral and there's no way of getting
out.
It's called whipsawing and it's been done extensively in the
maritime business, to such an extent that there's lots of fancy
contracts but not many jobs. It puts the water carrier out of
business. There used to be a lot more tugs and barges and moving
equipment operating on San Francisco Bay. It's going down, down,
down all the time because the labor costs have gotten ridiculous.
Some Effects of the Garmatz Act
Crowley:
Feingold:
In fact, the latest thing is that in 1969 they finally shoved a
contract down our throats whereby it calls for five consecutive
sixteen-hour days. We had to go for it. Now Congress has passed
a law that the men, commencing September 30, 1973, cannot work any
more than twelve hours a day. The question is, do you pay them
the sixteen hours pay that they've been getting for twelve hours'
work, or do you limit them to the twelve hours and reduce their pay
in turn?
The difficulty is that you can't use a crew for sixteen hours
for five consecutive days. The inhumanity of the situation is
that the unions insist on working a sixteen-hour day because they
get the next nine days off the weekend, the next week, and the
next weekend that's nine days. So they work five days for sixteen
hours a day and they're off for nine days.
Now, with a new twelve hour law coming into effect, we've got
a big problem coming up as to what's going to happen there. We
can't afford to pay them sixteen hours for five consecutive days
and then they only work twelve hours .
That sounds like a sticky problem,
of settling that?
Have you come up with any way
159
Crowley: We've come up with ways, but the unions don't agree. We've said
the men ought to work during the week every day, or a certain
number of days. We've suggested four ten-hour days that they would
work, forty hours a week and work every week. They've said, "No,
we only want to work five days and then be off nine days."
What they do is they get a job during that alternate week,
or they have a farm, or they live in Oregon and they come down
here for five days; work and then go back to Oregon.
It's a ridiculous situation. But costs of labor on the
tugboats are increasing to such an extent that eventually I don't
know what's going to happen.
Feingold: I guess that's going to have to be settled fairly soon if that law
goes into effect.
Crowley: It's going to be settled or not settled, one or the other.
Feingold: That's the Garmatz bill?
Crowley: Yes, that's right, that's the Garmatz bill. It provides a maximum
work day of twelve hours for a fellow running a boat. These guys,
through their union, have been able to force the employers to work
sixteen-hour days. The employer doesn't want to work a sixteen-
hour day, but the men do. They say, "We want to work sixteen
hours so that we can be off next week get all our work time in in
five days." They work ten days a month and they're off roughly
twenty days.
Feingold: Is the Garmatz bill the first federal regulation of working
conditions on tugboats?
Crowley: No. When we operated the steam tugs, steam tugs were all under
steamboat inspection and Coast Guard regulations. These laws
were put into effect back in the nineteenth century. The laws
that were put into effect to regulate working conditions on steam
vessels were applied to steam tugs.
With the advent of the diesel engine, there was an exemption
in the law whereby vessels under three hundred gross tons not
propelled by steam did not have to be regulated under the steamboat
inspection laws. It was felt that under three hundred gross tons
there was not the danger that there was in operating steam vessels
and/or vessels of over three hundred gross tons.
For years the diesel tugs under three hundred gross tons were
exempt from inspection. There's been a great hue and cry that you
can go out and run a three-hundred-gross-ton tugboat without even
an automobile driver's license, and this has been true. The same
160
Crowley: thing applies to an engineer operating a locomotive he doesn't
have to have a license from anybody. The railroad companies make
sure that the guy can run a locomotive before they put him in it,
and the tugboat companies make sure a guy can run a tugboat before
they put him in it.
The unions and various people have started a hue and cry that
there should be regulation of tugboat captains operating tugs under
three hundred gross tons. The industry decided that it would
probably be a good idea to sponsor a bill that would provide for
licensing of tugboat captains on diesel vessels under three
hundred gross tons if the licensing requirements were of a practical
nature that determined whether the fellow knew the rules of the road
and a few other odds and ends.
The licensing itself does not determine whether a man is
competent, but it does allow the Coast Guard to take action against
the man by taking his license away if he proves to be incompetent.
This is the only value of the law as the industry sees it and the
Coast Guard sees it. It's also a sop to the so-called do-gooders
that think that everything ought to be licensed from top to bottom
and the government ought to regulate everything.
The law was passed when Garmatz was chairman of the House
Merchant Marine and Fisheries Committee and it's commonly known
as the Garmatz bill. It was passed over the objections of the
unions. The unions did not want it passed because they wanted a
bill passed that would bring all the people on the boat engineers,
deck hands, mates, captains and everything subject to steamboat
and Coast Guard regulation, and also the machinery in the hulls
and the whole thing subject to Coast Guard regulation and inspection.
The Coast Guard regulation and inspection, in my opinion, is
totally unnecessary and expensive, and time consuming. It costs
the government a lot of money and costs industry a lot of money
and doesn't serve any really useful purpose, any more than
inspecting a steam locomotive and every other piece of machinery
that works. Of course, the creeping socialism of the government
is going to inspect everything and make sure that the consumer is
protected, just like the Federal Power Commission protected the
consumer by holding the price of natural gas at the wellhead down
to 17C a thousand cubic feet for fifteen years and then found out
we're running out of natural gas, which precipitated the energy
crisis .
Feingold: Is this bill an indication of things to come from the federal
government? Will they now think that having gotten a toehold into
regulating the diesel towboats , they'll impose further regulations
in the future?
161
Crowley: The industry does not think so. The industry thinks that they can
work along with the Coast Guard to see that tugboats are relatively
safe,, The Coast Guard basically has jurisdiction anyway over fire
fighting and life saving equipment on tugboats, so that the Coast
Guard, if they see an obviously unsafe vessel, can do something
about it without having to inspect every vessel from stem to stern.
Also, under this licensing bill, the Coast Guard can take
away the license of a tugboat captain who will take a tugboat out
that is not seaworthy or a properly equipped vessel.
There is the fear that this will be just a toehold and the
government will go further and further into it, but the industry
felt that in the aggregate, it would be better to take this step
and endorse this bill now rather than having something worse
shoved down their throats. I think it's a good principle; I think
the industry was wise in taking this step. However, future events
may show that the government steps in and regulates everything.
Who can say whether this step slowed that up or speeded it up
who knows? You never know.
Feingold: Aren't the towboat operators licensed already?
Crowley: No. You can operate a diesel tugboat under three hundred gross
tons without even a driver's license.
Feingold: I was under the impression that the members of the Master Mates and
Pilots all had licenses.
Crowley: Yes. You have to have a license to join the Masters, Mates and
Pilots, and you have to have a license to join the Marine Engineers
Beneficial Association. Many of the tugboat captains and engineers
do have licenses which they got on their own anyway. The employers
have always encouraged the men to get licenses, and in fact will
normally give them free time to go up and study for their license
and sit for their license.
But it has never been compulsory under the law that a captain,
mate or engineer or deck hand on a tugboat under three hundred gross
tons has to have a license to operate a tugboat.
Feingold: I see. Now it is required under the Garmatz Act.
Crowley: Now it is required just for the masters, just for the fellow
that's operating the boat; not for the engineer and not for the
deck hand .
This is why the unions fought this bill. They wanted to see
everybody on the boat have a license to just step aboard the boat,
and also have the boats themselves licensed and checked out and
thoroughly inspected from stem to stern by the Coast Guard, which
industry claims is totally unnecessary.
162
The 1969 Strike
Feingold:
Crow ley:
Feingold:
Growl ey:
Feingold:
Crow ley:
To get back to the '69 strike, I know you mentioned before that
that pretty much put an end to some of Shipowners and Merchants
operations?
Yes. It put an end to their ocean-going operations. They were
tied up for nine months. They are now back in operation on the Bay
and they are docking and undocking most of the big ships that come
into the Bay. There are some independent Bay pilots who are
docking ships without tugs or with small tugs , competing with the
Shipowners and Merchants Tugboat Company, but Shipowners and
Merchants Tugboat Company is generally getting their business back
again .
This is simply because the Shipowners and Merchants Tugboa't
Company service of furnishing the tugboat captain pilot and an
adequate tug manned by a competent crew that knows what the captain
on the bridge of the ship wants to have done is a far better service
than some independent pilot who is merely trying to make a living
out of putting a tugboat out of work. Using a very small tug and
trying to get by with inadequate towing power is not as good a
service as the service the Shipowners and Merchants Tugboat Company
has been giving the customer for many, many years.
When a ship breaks down, they holler like hell for the big
tugs. When the winter weather comes along, the big tugs are
extremely popular, and the little tugs aren't worth a damn when
conditions are difficult.
This is peculiar to San Francisco Bay. Every other port in
the United States wouldn't dream of using the small tugs that they
use here in San Francisco Bay with the independent Bay pilots.
In fact, some of the tugs are tugs that were laid up in Los Angeles
Harbor years ago because the pilot said, "These tugs are no good;
we can't use them. They're totally inadequate for our regular
service."
These are now being operated independently here?
Yes, they're being operated independently here.
How is it that these tugs can operate in San Francisco Harbor?
it just that there are no regulations?
Is
No. The reason that they operate here is because the independent
pilots get by and promote these small tugs because they feel that
the big tugs operated by Shipowners and Merchants Tugboat Company
163
Crowley: are in competition with them by putting the tugboat captain on
the bridge of the ship and handling the ship, doing what they call
the pilot's work.
X
This is in spite of the fact that most of these fellows
formerly learned their trade working for the Shipowners and Merchants
Tugboat Company and were taught by the company how to go on the
bridge of the ship and handle the ship with a good big tug alongside.
That's our free enterprise system. If they want to go out and
sell their service to the shipowner, and any shipowner is stupid
enough to rely on an independent pilot that has no tug or a
totally inadequate tug, if they're willing to pay the bill for
that, it's a free country and they're entitled to do so. Someday,
they'll end up with a damage claim that will make them wish they'd
never thought about it in the first place.
Feingold: In that '69 strike, to get back to that for a second, I came
across a newspaper clipping that there were five tugs from Puget
Sound Tug and Barge that worked on the Bay?
Crowley: Yes. You see, this '69 strike got to be a hell of a union battle.
It was a very involved situation.
In the first place, there are three unions on the Red Stack
tugs; there's the MM&P , the MEBA and the IBU. The union that went
on strike was the MEBA. Now, members of the MEBA also act, not
only as engineers on tugs, but they act as operators of small tugs.
The members of MEBA that were acting as operators of small tugs
were employed by others who brought small tugs in here to do the
work that the Red Stack Tugboat Company was doing. Murphy Pacific
Salvage Company signed a contract with the MEBA to give their
members employment on their tugs while the strike was in progress.
The Inland Boatmen's Union that represented the deck hands
on the Shipowners and Merchants Tugboat Company and the Masters,
Mates and Pilots decided they were being done out of their jobs
by these marine engineers acting as operators .
The Inland Boatmen's Union's president in Seattle offered
to man the tugs of Puget Sound Tug and Barge Company in San Francisco
Bay if the company would send them down here manned with their men.
The company sent them down here, but the union failed to stand
by its agreement and would not operate the tugs. As a result, it
cost the company some money and the tugs were sent back to Puget
Sound.
Feingold: So they didn't operate on the Bay at all?
164
Crowley: They operated a little bit but not very much. Mixed up in that
was the California Inland Pilots' Association. Half of the
Shipowners and Merchants Tugboat Company tug captain pilots formed
the Inland Pilots Association in order to develop work for them
selves. They were going into business for themselves as independent
pilots.
They tried to boycott the Puget Sound tugs, too, because the
Puget Sound tugs were working with the remaining tugboat captain
pilots who were loyal to the company and worked out of the union
hall.
It's a very complicated situation. It was all mixed up. The
Marine Engineers Beneficial Association was at the bottom of it.
They later found that the independent pilots took -them for a ride
and they lost a lot of jobs because of it. They have since realized
that it was a mixed up situation and they should not have done vhat
they did, but that's water over the dam and there's nothing they
can do about it.
Feingold: Weren't you telling me once that Charlie Black or someone made
that admission to you?
Crowley: Yes. Charlie Black said, "Gee, we made a hell of a mistake."
Feingold: To strike at all?
Crowley: Yes. Because what they did when they went out on strike, they
ruined a lot of good jobs and turned them over to a bunch of
independent businessmen pilots who don't use tugs except when
they have to. As a result, those jobs were permanently lost to
the engineers who would have worked on those tugs. They didn't
realize at the time that that's what would happen, but they're
finding out now.
Lots of labor difficulties ruin a lot of jobs. If the truth
of the story were known to union members and whatnot throughout
our economy, there 'd be a lot less of the troubles that we have.
The difficulty is that when a union businessman makes a mistake, he
sure doesn't go out and broadcast it from the treetops . He doesn't
say, "Gee, we lost a lot of jobs; we shouldn't have done that."
He says, "We won the strike and we got you better wages and working
conditions," although half the poor devils may be on relief and
not able to get a job anyplace else.
165
Union Politics
Feingold: Is that what you were talking about a couple of sessions ago when
you spoke about power politics within the unions? You were
mentioning it in connection with Bay Cities and Harbor Tugs being
in good with the unions, whereas Crowley Launch and Tug wasn't.
Crowley: There's a lot of power politics in the unions. Unions, one must
realize, are a political body, and the fellows who control unions
are politicians in the sense that they control it. They're somewhat
like the politicians of the Third Reich they're dictators first
and politicians second.
They use their political activities to get to the top of the
heap, then they use their dictator activities to stay on top of
the heap, as was evidenced by Zablonski and a few others in the
coal industry. [United Mine Workers of America]
In my opinionn, the American public is totally naive as to
union politics and union pressures and so on and so forth, just
as we are all somewhat naive as to political activities such as
Watergate. When we find out about them, we're really shocked.
They've been going on for years and will apparently continue to go
on. When they sometime get out of hand, like Watergate has gotten
out of hand, something has to be done about it.
Feingold: Do your companies in other ports have the same sort of difficulties
with labor unions, like in Puget Sound and San Pedro?
Crowley: Yes. Sometimes it's better, sometimes it's worse, but they're
the same sort of problems.
Feingold: Are they the same unions?
Crowley: Yes, the same unions but different locals, and there's a different
business agent in charge of that local. A lot of it depends on
the business agent and what kind of a nut he is.
Feingold: Is there much competition among the various unions?
Crowley: Oh, yes, there's considerable competition, but the National Labor
Relations Board keeps that in hand. The unions can't go out and
raid other unions if they're certificated by the National Labor
Relations Board. There's always battles along those lines.
You've been reading in the papers, I presume, about Cesar Chavez
[leader of the AFL-CIO affiliated United Farm Workers Union] and
the Teamster's Union.
Feingold: I certainly have.
166
Crowley: It's the same. It's just competition between the unions.
Feingold: Short of raiding each other's membership, are there ways that
unions like the Masters, Mates and Pilots and the MEBA are in
competition?
Crowley: Yes. Masters, Mates and Pilots would dearly love to control all
the small tug operators, but they happen to belong to the MEBA
and the MEBA is certificated by National Labor Relations Board to
represent those men. Masters, Mates and Pilots is always trying
to figure out some way of getting those men away from the MEBA,
but there isn't much chance of doing it.
Recently, the Masters, Mates and Pilots has come up with a
new scheme. Some tugs came down into San Francisco Bay operated
by a company called Western Willamette, who is mainly a
contractor. They have a contract with Masters, Mates and Pilot's
on the Columbia River, and that's a top- to-bottom contract. They're
running their small tugs as members of Masters, Mates and Pilots,
and there's quite a battle going on there between the MEBA and
the MM&P to see who will win out in the end.
Feingold: What is a top-to-bottom contract?
Crowley: That means that everybody on the boat belongs to the same union.
You don't have separate unions. This is the only way that the
American merchant marine can exist. Eventually, we'll have top-
to-bottom unionization as espoused by Paul Hall of the Seafarers '
International Union.
It all ought to be one union. When you have more than one
union, each union is trying to whipsaw the other one. You have
nothing but strife and trouble and wages go up ridiculously by
the device I told you of percentages and flat increases. It
becomes totally unworkable. That's about the way the American
merchant marine is today.
Feingold: So the industry would be open to the idea of top-to-bottom
unionization?
Crowley: Yes. The employers don't have anything to say about it. If they
had something to say about it, they would obviously rather deal
with one than three different ones .
Feingold: I can see where that would raise the hackles of the other unions.
Crowley: Yes. It's really a mess, and I don't know what the answer to it
is .
167
Relations with the ILWU
Feingold: Have any of your companies had any dealings with the ILWU?
Crowley: Not recently. In recent years, we haven't had much to do with
the ILWU. Bay Cities Transportation Company used to run a barge
line on the Bay. They hired what were then called bargemen. They
were fellows who loaded and unloaded the barges with jitneys and
hand trucks and things like that.
This union was affiliated with the ILA International
Longshoremen's Union before the '34 strike. Then it continued
to remain loyal to the ILA when the stevedores' union or
longshoremen's union became the ILWU under Harry Bridges.
This bargemen local consisted of about a thousand men. Wth
the ever- increasing wages and the advent of the bridges and motor
trucks and so on, the employment opportunities started tapering
off, particularly after they went on strike a couple of times.
Finally, the bargemen's local got so small that it couldn't
support the ILA so they affiliated with the ILWU. They withdrew
from ILA and affiliated with ILWU.
After they were affiliated with ILWU for a couple of years , then
they were just blanketed into the longshoremen's union and the
bargemen's local disappeared and the work for bargemen disappeared.
When they were blanketed into the ILWU, that was the end of our
negotiations with them. The ILWU would send a contract down and
say, "This is it; either sign it or stop working." We finally
just stopped working; it became economically unsound.
Feingold: I would imagine, though, that the ILWU's actions would effect
your company .
Crowley: Yes, sure. When they tie the waterfront up, we've got no business,
and there we are; there isn't much we can do about it. Certainly
the activity of the ILWU in tying the waterfront up raises hell
with us. But we don't have any contract with the ILWU nor do we
employ ILWU stevedores for any services whatsoever.
The last ones we had were when we were running the container
barges of Puget Sound-Alaska Van Lines out of California and
Seattle to Alaska. The ILWU at that time decided that we should
have ILWU men tie the barges up. We had to go before the National
Labor Relations Board and had a law suit and a landmark decision.
Nine months after the episode, they decided we were perfectly right.
168
Crowley: By that time, we'd gone out of the business because you can't wait
around for nine months to find out where you're going. That's the
last dealings we had with the ILWU, back in about '62 or '63.
Frankly, if we have to go into a business where we have to
employ ILWU people, we probably won't go into that business,
because life's too short for that kind of nonsense.
Feingold: Are they that difficult to deal with?
Crowley: Not only difficult to deal with, but they don't work. They don't
produce anything for the dollars paid, and conditions are impossible.
You can't make money doing business that way.
The MEBA
Feingold: A couple of weeks ago to get back to the MEBA you mentioned Joe
Jerome. I'd like to pick up that thread of the story.
Crowley: I see. Joe Jerome was a gas skinner at Harbor Tug and Barge Company.
He was some sort of a war hero in World War I; I don't know Les
Bedient knows all about that. In fact, Les Bedient was Joe Jerome's
deck hand when he was running a boat for Harbor Tug and Barge
Company .
Then Jerome got involved he'd always been a member of the
Marine Engineers Beneficial Association. When the MEBA went out
and got all the deep water engineer members, it expanded in size
tremendously and Joe Jerome got a job up there as patrolman. He
was riding around in his Cadillac and working things out for the
MEBA, so to speak.
He's had quite a colorful history and did a lot of many colorful
things and was part of the ruling hierarchy up in the MEBA.
Feingold: You must have dealings with him then.
Crowley: Yes. We had a lot of dealings with Joe. He worked very closely
with Harbor Tug and Barge Company, but he didn't work that closely
with Crowley Launch and Tugboat Company.
There was another fellow named Bart Malone who was president
of the Marine Engineers Beneficial Association. He would run the
meetings. He also was a working man and ran a boat for the Board
of State Harbor Commissioners. He spent most of his time on union
business but got paid by the Board of State Harbor Commissioners for
running this tugboat Governor Stevens.
169
Feingold:
Crowley :
Feingold:
Crowley:
Feingold:
Crowley:
What's the story of Murphy Tug and MEBA? You were mentioning
several sessions ago that they're tied in pretty closely.
Yes, they were. A little earlier in this discussion, I told you
that Murphy Pacific came in and went to the MEBA and said, "We'll
employ your men to run our boats and pay you whatever you want
while the Red Stacks are out on strike."
Murphy Pacific worked with MEBA, and MEBA worked with Murphy
Pacific, and thereby put the independent pilots in business, which
in turn eliminated a lot of tugboat jobs for MEBA men. Murphy
Pacific finally went out of business in May of 1971.
Then Roger Murphy, in about July of 1971, started up a new
tugboat company that he called Murphy Tugboat Company. He's been
working fairly closely with some of the members of MEBA. But
after MEBA discovered that he wasn't living up to the contract--
wasn't paying the guys the wages they had a little bit of friction
between Murphy Tugboat Company and the MEBA.
Now the fight is friendly, but the former MEBA members are
still in the company, so to speak.
I had the impression that some of the MEBA people were part owners
of some of the tugs.
Yes. A fellow by the name of Jensen is an engineer down there,
is rumored that he's a part owner, but nobody seems to know.
Jensen, and [inaudible] and also there's another fellow who used
to be a patrolman for MEBA who's now working for Murphy, but he's
on the outs with MEBA now because he is working for Murphy and
Murphy doesn't pay the wages. What's his name?
Just a minute; I may have his name here. Coleman?
Yes, Coleman.
It
Comparison with Eas_t Coast Conditions
Feingold: How do labor conditions here compare to the East Coast?
Crowley: They're worse here than they are on the East Coast. On the East
Coast there's a lot of non-union guys operating out of the
southern states. However, out of New York harbor, they've got
an impossible tugboat situation there in the way of a labor
contract. They don't operate any ocean-going tugs out of New York
harbor. But every New York tugboat company of every size who wants
170
Crowley: to go to sea they have a stooge company in Charleston or down in
the Gulf that does the outside towing under a different name and
a different contract.
Feingold: Are they contracted with the MEBA also?
Crowley: No. New York is Local 333. It used to be affiliated with the
ILA; I think it's completely independent now. It's just a tugboat-
men's union. [checks record] No, they're not affiliated with the
ILA anymore; they're not affiliated with anybody I don't think.
They've got ridiculous working conditions in the harbor.
They're not as bad as they are here, but they're pretty bad. As
a result, they can't send tugs from New York to sea. They've
got to operate them out of some other port on the East Coast.
Feingold: What sort of working conditions do they have in New York?
Crowley: They've got a four-watch system whereby there's four crews attached
to a boat.
Feingold: To a tug?
Crowley: Yes, to a tug. And a lot of nonsense. It's just extremely
expensive, but the tugboat people have just raised their rates
to make up for it and the shipowners are paying through the nose,
but what can they do about it?
Feingold: Is there a watch system out here?
Crowley: No, because we don't have enough work to keep busy. Our work is
mainly early in the morning and late at night, when the ships come
in, and then they shift or go to sea after the longshoremen have
stopped working. There isn't enough work here to really bother
with a watch system. Plus the fact that the men wouldn't work a
watch system in the Bay Area because they never have and they won't
do it.
Feingold: With the sixteen-hour-day plan, as it functions now, if let's say
a tug worked in the early morning and then again in the late
evening, would the same crew be working it?
Crowley: Yes. They will work twenty-four hours a day, but they will only
work sixteen hours in the twenty-four. Then they have to have
certain specified rest periods in the sixteen and the twenty-four
hours. Then they go home for eight hours of the twenty- four, if
they're tied up at the home port.
Feingold: It doesn't sound like they're on the tug very much.
171
Crowley: No. It's too complicated to really explain it to you; it would
take all day to explain all the in's and out's of it. Essentially,
it means that we have to pay them sixteen hours ' pay for five
consecutive days whether we got one hour work for them or whatever.
Feingold: I see. They get a guaranteed wage for five days.
Crowley: Yes. Then they're off for nine days.
Feingold: I see. That really does put you in
Crowley: A ridiculous situation.
Feingold: If there isn't much business, you are paying all the engineers to
sit around.
Crowley: They're getting two weeks' notice before you lay them off, and 'stuff
like that.
But they're really killing themselves because they're the
ones that get the most out of it anyway. The wages amount to the
biggest part of the revenue; if they kill the gross revenue, they
kill their wages. That's their problem. It won't cause me to
starve to death, that's for sure.
Feingold: How do your companies negotiate with the unions?
Crowley: We used to negotiate when various managers would negotiate their
own contract. Now we negotiate with the manager negotiating the
contract and an industrial relations guy from Seattle, Dick
Osborne, sits in with them and goes into all the contracts to make
sure that they're right.
The contracts are so complicated now that it takes a guy full
time to keep track of all the details. They impinge on one another
so that it's very complicated.
Feingold: He works out of Seattle?
Crowley: Yes.
Feingold: Has that worked out?
Crowley: Yes, that's worked out much more satisfactorily than our old method
of doing it. It doesn't mean that we've got any better conditions
or any change in not fighting with him constantly; at least it
coordinates what we're doing so that we know a little bit better
what we are doing or we're not doing.
172
XV GOVERNMENT REGULATION AND ASSISTANCE
[Interview 7: June 19, 1973]
Dumping Wastes
Feingold: Have the environmental agencies around San Francisco had any direct
impact on the tugboat industry?
Crowley: To some extent. For example, we used to take waste pickle liquor
to sea and dump it. That's been eliminated.
Feingold: Take what to the sea?
Crowley: We took the waste pickle liqnor from the Columbia Steel Plant up
at Pittsburgh. They have a continuous strip mill up there where
they thin out plate and then tin it and make tin plate for making
tin cans for the California canning industry.
This necessitates soaking the steel in a sulfuric acid bath.
When the sulfuric acid bath is spent and becomes mainly ferrous
sulfate, they have to dispose of it some way. For twenty years
or so, we took the waste pickle liquor out to sea, out beyond the
light ship, and dumped it. This has been stopped because of the
Environmental Policy Act, which cut out a certain amount of towing
on the Bay.
Also, in the summertime we used to take the cannery waste,
peach pits and skins and whatnot that were ground up by the
Oakland Scavenger Company, out to sea and dump it. They stopped
that because you can't pollute the ocean.
Whether these things pollute the ocean or not is a question.
They claim that the waste pickle liquor hurt the crabs out here.
But we have been doing it for twenty years, and for the first
ten years that we dumped waste pickle liquor outside the gate, the
crab catch went up, up, up; the last ten years it went down, down,
down. Did the waste pickle liquor help the crabs or did it hurt
them? You could argue it either way from the record, from the facts
173
Crowley: I say that if for the first ten years the crab catch went up
substantially, the waste pickle liquor must have helped them. I
argued this up at the Fish and Game [Commission] and they said,
"Well, what difference does it make? It's fashionable not to dump
stuff in the ocean; we just won't dump stuff in the ocean." They
are saying, in effect, "My mind's made up don't confuse me with
the facts."
Feingold: Where do you dump it now?
Crowley: Now the waste pickle liquor is taken and it's chemically neutralized
and dumped out in the hills someplace.
Feingold: Where it's presumably
Crowley: I don't know; that's a deep, dark secret. If anybody finds that
out, then they'll start hollering about "you shouldn't dump it '
here; you shouldn't dump it there."
Feingold: What about the peach pits; what happens to them now?
Crowley: I don't know. They take them out and now they put them in a dump
over at Livermore so all the flies and the smell and the bugs get
in them. That's why they took them to sea in the first place,
peach pits and the cannery waste were so offensive. When it rots
it draws a lot of flies and bugs and stuff like that. They found
this was a better way of getting rid of it; they did it for a number
of years. Then the environmentalists got into the act and cut it
out.
Alaska Oil Pipeline
Feingold: Have the environmental controls had any impact on ship building
and construction around the Bay that would effect the tugboat
industry?
Crowley: The greatest impact environmentalists have had on the Pacific Coast
in shipbuilding, ship operation, tugboats, the energy crisis the
whole works is the Alyeska Pipeline. The environmentalists have
been holding up the Alyeska Pipeline, which has had a tremendous
effect on the shipping industry and its allied industries on the
Pacific Coast now for a number of years.
Todd's Shipyard in Alameda built a $15,000,000 floating dry
dock to be able to dry dock the tankers that bring the oil down.
Now that thing is sitting over there at Alameda doing nothing
because they're all fighting over the pipe line.
174
Crowley: Bethlehem, not to be outdone, built a $16,000,000 floating dry
dock at their plant out here. Now it sits there doing nothing
because they're not bringing the oil in by domestic tankers.
' They're bringing it in by foreign flag tankers from Indonesia and
Saudi Arabia. These foreign flag tankers go back to Singapore
and get dry docked at Singapore.
I think that's the biggest single impact the environmentalists
have had on the shipping industry on the Pacific Coast, and it's
an important one, a very important one. This has also had a
tremendous impact on the entire economy of the Pacific Coast
because crude oil is a raw material for refineries, petro-chemical
plants and for many allied industries.
The Pacific Coast had stumbled onto a huge source of raw
materials a million barrels a day, with the hopes of increasing
it to two million barrels a day. This would have been a tremendous
boost to the petro-chemical industry on the West Coast. You would
have seen petro-chemical plants under construction all up and down
the West Coast of the United States the Puget Sound area, the
San Francisco Bay area, the Los Angeles area.
The Gulf Coast area you've heard a lot of people talk about
that Astrodome in Texas and the tremendous expansions in Louisiana
and Texas and so on? A great deal of this is occasioned by the
fact that there is oil down there. Texas and Louisiana produce
tremendous quantities of oil. This is the raw material for all the
industries .
Unemployment, the energy crisis, the lack of tax base for
taxing and thereby overcoming slum improvements and all that sort
of stuff have been tremendously hampered by the hold-up on the
Alyeska Pipeline. This, I think, has had a tremendous impact on
the shipping industry and many other industries on the West Coast.
Some of the arguments that are put up on the Alyeska Pipeline
are just absolutely ridiculous and they're insults to the average
person's intelligence, but they swallow it. They say, for example,
that the Canadians don't want the British Columbian coast exposed
to terrible spills of oil by tankers; therefore, we'll build a
pipeline through Canada. If the pipeline breaks in Canada and
it's three times as likely to break in Canada because it's three
times longer you're going to have oil all over Canada.
Another thing: if they don't build the pipeline and they
don't bring the oil in, the oil will have to come in via foreign
flag tankers from Indonesia, Saudi Arabia and so on. Those ships
coming in the Straits of Juan de Fuca and on up to the refineries
in Puget Sound are just as likely to spill oil as the ship coming
175
Crowley: down from Alaska. In fact, they're more likely- to spill oil because
ships running from Alaska down here would be in and out every couple
of weeks and would get to know the country a lot better.
This is the major reason for ship catastrophes: some fellow's
going someplace that he's never been before and he doesn't know
what the hell to expect. He runs the ship aground and you get
oil all over the place. By having foreign ships come into Puget
Sound, you have more of a chance of spilling oil in the Canadian
waters than you do by having it come down in American flag ships .
The ridiculous part of the whole thing is that Canada imports
about a million barrels a day of crude oil from Venezuela into the
Canadian east coast by these very large crude carriers. It's
perfectly all right to import crude oil to the Canadian Atlantic
coast that is full of rocks and dangerous navigation places much
more so than any place on the west coast but it's not any good for
the Canadian west coast to have tankers run from Valdez down to
Los Angeles that don't come within two hundred miles of the British
Columbia coast.
The average person doesn't think these things through. They
say, and a lot of people are even still saying, that the energy
crisis is just a hoax by the oil companies to put the independents
out of business. That's the stupidest thing that anybody ever
thought of. If the oil companies want to put the independents out
of business, they could have done it a long time ago. That's no
problem. The energy crisis is not something that's put up.
Senators and congressmen are actually saying that. It's
either they're saying it because they're plain stupid or because
they are merely trying to make a political point, and I think it's
the latter, particularly the senators and congressmen from the
midwest. What they want to see is a Canadian pipeline because
that would bring a million or two barrels a day into the midwest,
which then would build the petro-chemical and refining and allied
industries up tremendously in the midwest rather than on the Pacific
coast, but nobody on the Pacific coast can see further than the
end of their nose.
Feingold: The newspapers don't bring out where these congressmen are from;
they just recite the figures.
Crowley: As far as the Sierra Club is concerned, I think the Sierra Club
is a great thing and always has been, but it's run by a bunch of
idiots now who are doing nothing but trying to stop everything
without any viable alternatives. It's all very well to say, "Stop
breathing; you're exhaling CO- into the atmosphere." But there's
no viable alternative.
176
Crowley: Now that I've made my little speech on the Alyeska Pipeline, I
haven't answered your question.
Federal, State, and Local Regulatory Agencies
Feingold: That brings to mind some other questions I have read the relations
between your companies and other federal regulatory agencies, like
the Federal Maritime Commission. Do they have any regulatory
powers effecting you?
Crowley: No. The Federal Maritime Commission regulates foreign and off-shore
waterborn commerce of the United States. We, in our Puget Sound-
Alaska Van Lines Service to Alaska, were subject to Federal
Maritime Commission regulations as far as rates, fares, charges-
and the way we conducted our business.
We got our bellyful of the Federal Maritime Commission
regulations because the government agencies that regulate these
trades are government agencies, and just that. They have all the
same frailities that all government agencies have, they don't know
what the hell they're doing half the time.
When we went into the Alaska Hydro- train Service, Senator
Warren Magnuson had introduced a bill that had passed both houses
and was signed by the president that joint through rates of a
land carrier and a water carrier, where the land carrier was
subject to ICC and the water carrier was subject to FMC, would be
regulated by the ICC.
So, we filed a joint through tariff with the Alaska railroad
with the ICC so that, in our hydro-train service, we were regulated
as to rates by the Interstate Commerce Commission. Our experience
with them has been no better than the regulation by the FMC was
prior to that.
After we did that, then the other carriers in the trade
cancelled their Federal Maritime Commission tariffs and filed
ICC joint through rate tariffs with land carriers, such as the
truckers in Seattle that truck cargo down to the dock. FMC took
it to court and the courts upheld Alaska Steamship Company who
has since gone out of business. All the remaining carriers to
Alaska are now ICC regulated by joint through rates that were
authorized under the Magnuson Bill.
We are regulated by Interstate Commerce Commission on certain
movements of freight in the Bay Area that are ICC regulated, but
it's a very minor amount of our business.
177
Crowley: We are also regulated by the Public Utilities Commission of the
state of California on transportation of freight and passengers
for hire in intrastate commerce, but that is a relatively small
portion of our business, with the exception possibly of the
passenger hauling.
Feingold: What would that cover besides Harbor Carriers.
Crowley: That's all, just Harbor Carriers. In the sightseeing business we
had a competitor some years ago who went before the Public
Utilities Commission and requested a certificate of public
convenience and necessity for sightseeing from Fisherman's Wharf
out around the Bay and back to Fisherman's Wharf, as a regulated
trade.
The Public Utilities Commission decided that it was carrying
passengers between points in California and therefore should be"
subject to regulations. We protested and objected and carried it
to the supreme court of the state of California.
The supreme court decided in our favor, that the Public
Utilities Commission had no jurisdiction over the transportation
of passengers starting from one point and returning to that same
point because it was not the transportation of passengers between
points in California.
The reason that we carried that to the supreme court was
that we did not want to be regulated by the Public Utilities
Commission. We felt that that sort of business was not covered
by the act when the legislature passed it. The legislature was
very specific in stating transportation of persons or property
between points in California, and we thought the language was
quite plain.
Our competitor wanted to get it certificated so that he could
keep anybody else out of the business. We felt it should be
kept open to anybody that wanted to get in the business because
basically that's how my father got started in the business in the
first place, with a rowboat, taking people out to ships in the
stream and bringing them back. Why should it be regulated if the
legislature didn't intend it to be regulated? Why should it be
made into a monopoly if it was not necessary that it be made into
a monopoly?
That was our landmark argument of principle, you might say,
with the Public Utilities Commission of the state of California.
We still have relations with them. We have a certificate of public
convenience and necessity to run to Catalina, which we're trying
to get extended to go not only to Avalon but other points on
178
Crowley: Catalina because nobody else will give service. The Commission
has said, "Well, you ought to have it, but we haven't got around
to it."
To the layman, regulatory bodies run by the government are
just a fantastic bunch of nonsense, but we have to live with
them. We do the best we can.
Feingold: Does the California Supreme Court ruling still hold?
Crowley: Between points. Yes. If you start from one point and return to
that same point, it's not subject to Public Utilities Commission
regulation. But if you transport passengers between points, then
you are.
A couple of years ago, we applied for permission rights to
run from Long Beach to Catalina. We already had Long Beach to
Avalon. Then we wanted to run from Long Beach to various Boy
Scout camps along the shore of Catalina. The Commission, after
spending a year thinking about it, came out with a decision that
if the boat ran from Long Beach to the Boy Scout camp and laid
there all day and waited for all the people to get back on the boat
and come back again, that would come under the landmark decision of
the supreme court, starting at one point and returning to the same
point. They could get off the boat provided they all got back on
the boat and came back again at the end of the day.
That didn't require Public Utility regulation. But if the
people got off the boat and stayed off the boat, then that was
subject to Public Utilities Commission regulations.
Feingold: It sounds like it depends on how long they were staying off the
boat and if they all got back on, with someone counting noses to
make sure.
Crowley: Yes. If there's anything stupider than that, I don't know what the
hell it is. That's the kind of nonsense you've got to deal with
with the Public Utilities Commission.
The Boy Scout camps have no service now except our service,
which we are performing illegally. They have complained to the
Public Utilities Commission on many occasions have gone up there
and screamed and hollered and so on and the Commission still
has the matter under consideration as to whether we ought to have
rights or not. We are presently operating illegally to these
points. If we stop operating, the Boy Scouts will not be able
to have their summer camps on Catalina. In the meantime the
Commission is wrestling with the problem and hasn't come out with
any decision.
179
Feingold: Commissions manage to wrestle with problems for a long time.
Crowley: The obvious answer is, for Christ's sake there's no other way of
getting there and getting back and the customers want the service,
and the Boy Scouts have to go over in reasonably safe boats.
There's another fellow down at H-10 water taxi that has rights but
he doesn't have any good boats. If they go over there, they get
soaked to the skin going over and soaked to the skin getting back,
and can only go in the best of weather.
When you're taking Boy Scouts over to a camp, you shouldn't
be soaking them nor should you be taking any risk with them
whatsoever in an inadequate boat. But the Commission can't come
to grips with the problem.
Feingold: Do you remember what the name of that landmark decision was in the
supreme court?
Crowley: No, I don't [Mr. Crowley consults Opinions and Orders of the Public
Utilities Commission of California] .
It was interesting looking through all these books seeing all
the decisions that Harbor Carriers had applications for rights
to run here, there and everywhere. This is one: June 3, 1969
"Harbor Carriers denied permission to operate its common carrier
between Long Beach and Avalon, Santa Catalina." Dissent per
Commissioner [name may be misspelled] Edward Cassen.
Then there was another decision where they amended this
decision and gave us rights to operate; I don't know what decision
that was. You could go on with this stuff forever. PUC is just a
total waste of time in my book. It's interesting to read it if
you don't have anything else to do, but it's just unbelievable the
amount of detail they go into. It's all mainly a bunch of nonsense.
I remember years ago I used to go to the Commission when I was
learning the business and I used to read some of the activities.
Here's a decision of December 2, 1969. "Application of Harbor
Carriers for certificate to provide boat service between Long
Beach and the Catalina Island. Granted." So it was finally granted.
It was denied on June 3, 1969, and it was granted on December 2,
1969. You could go on and on and on.
Feingold: When you were talking a moment ago about the ICC, I remember that
you showed me several weeks ago a statement that you wrote for the
ICC justifying why your profit margin should be allowed to increase.
Crowley: That was the rate case. We made an application for rate increase
for Alaska Hydro- train. They came up with a decision that was
obviously politically inspired at the time of President Nixon's
180
Crowley: first price freeze saying that we were entitled to a 2 percent rate
increase, which would give us a return on invested capital of 3.3
percent. That was an ICC decision; did you want the number of
that one?
Feingold: No. We could find it in the records.
Crowley: That case has been appealed and is still under submission. The
status of it today, after President Nixon's price freeze again,
I don't know. I'm supposed to testify in the latter part of July
in connection with this.
Feingold: Where are you testifying in Washington?
Crowley: No, in the Pacific Northwest. Seattle. I wrote this ten page
statement saying why we ought to get the increase.
Feingold: Do they regulate any of your other companies in this way?
Crowley: Interstate Commerce Commission regulates the transportation of
freight between the states and also to Alaska, where there are
joint through rates. We have ICC rights in San Francisco Bay
on interstate commerce, but it's very rarely that anything moves
under them. Bay Cities Transportation Company has to keep their
books in accordance with ICC regulations because of the ICC
operating rights that they have.
Feingold: What does that mean, that they have to keep their books in accordance
with ICC regulations?
Crowley: ICC has specified chart of accounts. You keep your accounts in
the form in which the Interstate Commerce Commission wants you to
rather than the form you think is best for your business. As a
result, we keep a set of books for the Interstate Commerce
Commission, another set of books to run the business, and a third
set of books for the Bureau of Internal Revenue, because they
insist on their method of keeping depreciation records.
Feingold: You must have to spend all your time keeping books!
Crowley: I don't think the average citizen of the United States realizes
the problems that business has to go through. It's getting worse
and worse and worse. This completely stifles the opportunity for
some guy starting in.
It isn't every business that's faced with that. Transportation
is particularly difficult, but there are other businesses. Look
at farming. My God, you've got to get allotments to grow rice;
you've got to put your wheat in a pool. It just goes on and on and
on.
181
Feingold: I came across a note that's related to this. In 1949, there was
some problem with the city assessor about if tugboats were
transportation or not and could therefore be taxed under personal
property. The city assessor at the time rules that barges were
transportation but not tugs.
Crowley: Forty-nine? I think we had that decision then and we went to
court on it. The court decided that since tugs assisted ships in
carrying into port and they were carrying freight that the tugs
were actually engaged in the transportation of freight or passengers
and therefore exempt from taxation.
That held up until a few years ago when the LA assessor came
after us. He took it to the courts and the courts decided the
other way, that we were liable for taxes, so we've been paying
taxes for the last four or five years.
Feingold: Just in LA or here also?
Crowley: Here also.
Feingold: Was that a landmark decision the recent one or was that fairly
standard?
Crowley: It was a landmark decision for us because we got stuck with taxes
and it reversed the former decision, and there was no alternative.
Feingold: What sort of reasoning did the court use that suddenly tugs were
not transportation?
Crowley: That since they only assisted the ships to dock and did not
actually carry the cargo on the deck, they were not engaged in
the transportation of freight. These are two diametrically
opposed decisions, but the court can do that.
Feingold: Do you have much to do with the U.S. Coast Guard?
Crowley: Yes. The Coast Guard regulates the inspection of vessels oil
barges and passenger vessels. They have jurisdiction over safety,
fire fighting and that sort of thing, manning, licensing a vessel,
personnel, investigation of accidents, and stuff like that.
We have considerable activity with the Coast Guard from time to
time. We work with them.
They have a problem of training their people in how to
regulate commercial safety. They don't know anything about it.
They have to learn, so they have training programs where Coast Guard
men come to industry and learn how to tell the bow from the stern
of a tugboat, how the engine works, and stuff like that. [laughter]
182
Crowley: They're pretty good; we've worked with them. They don't get too
difficult. Occasionally they do, but they're generally fairly
cooperative. It's the blind leading the blind.
The Coast Guard also is involved in search and rescue, and
rescue activities. When a vessel goes ashore or something like
that, they send helicopters and lifeboat crews and things of that
nature. They're pretty cooperative and try to help you out as
much as they can. We used to fight with the Coast Guard because
they liked to get in the towing business. When a ship broke down
outside, they'd send a tug out and tow her in. We felt they were
competing with private enterprise.
They've gotten over that hitch because, as time has gone on,
the Coast Guard has been building more and more appropriations
and building bigger and bigger Coast Guard vessels. Now the
Coast Guard vessels are so big they can't tow anything. We don't
have to worry about that.
Navy Competition
Feingold: Then I have a note here that in 1950 commercial shipowners
protested to the undersecretary of the navy that Navy and Military
Sea Transport Service was competing with private enterprise in
servicing navy ships , and that you were one of the speakers along
with Mr. Elledge and Henry Nickols of Nickols Transportation
Company and a number of others.
Crowley: That's been going on ever since the end of World War II. We are
still fighting it. In fact, it's making a little more progress
again today because just last week there was a fellow by the name
of Jim Rosapep [name may be misspelled] from the domestic branch
of the Maritime Administration. He's taking a trip around the
country talking to all the tugboat people in the domestic ports of
the United States and surveying the navy tugs and trying to
determine if the navy should get out of the tugboat business.
He is convinced that the navy has no business in the tugboat
business.. If you join the navy, it's in order to become a navy
sailor or run a war ship of some kind and not be a tugboat man.
There's a move afoot to get the navy out of the tugboat business.
The navy operates 264 tugs throughout the United States in domestic
ports, which is nothing more or less than a duplication of
commercial tug services.
183
Crowley: In fact, in San Francisco Bay, the navy operates more tugs than the
commercial operators. Of course, they don't do near the amount
of business, but they run the tugs around. You look out on the
Bay any day; you can see navy tugs running around. God knows what
they're doing, but they're running around.
Feingold: Maneuvers .
Crowley: Maneuvers. I've made countless trips back to Washington, wrote
countless letters. In fact, it got so bad we pursued this policy
all through the late forties and the fifties in about the mid-
sixties we were told by navy personnel that if we didn't learn to
keep our goddamn yap shut, we wouldn't get any navy work. We
stopped talking about it.
In recent years I've been able to con Tom Moran* into hollering
about it. He's hollering about it now. He was always content 'and
his father was always content to lie back in the weeds and let us
do the hollering. Then he'd say, "Tsk, tsk, tsk," sympathizing
with the navy men, trying to get their work. His son is not quite
as two-faced as he is; he's been out trying to get navy work and
get the navy out of the tugboat business.
The shutting down of this San Francisco naval shipyard will
have a tremendous impact on this sort of thing. The navy, like
every other government agency, wastes fantastic sums of money
doing things that they shouldn't be doing. There's no excuse
whatsoever for any naval shipyard; why can't navy ships be repaired
in commercial shipyards the same as every other ship? No, the navy
runs their own shipyards.
Congress found out years ago that whenever the navy built
anything in their naval shipyards, it cost about three times as
much to build it as what it would cost to build it in the
commercial yard. They cut out new construction in navy shipyards.
They shut down the Brooklyn Navy Yard, and now they're going to
shut down the San Francisco Naval Shipyard and probably save a
billion dollars a year or some thing like that.
If they cut out operating their own tugs, they could save a
substantial amount of money too, but it wouldn't be nearly as
much money as they waste in the naval shipyards. Hunters Point
Naval Shipyard or any naval shipyard operates on the principle
that they have a given work force say 5,000 men or 8,000 men
and those men come to work every morning and go home at night.
*Leader in the tugboat industry in New York City.
184
Crowley: The ship repair industry commercial ship repair industry and ship
repair throughout the world functions on the basis that when ships
come in, you hire men to repair them; when the ship leaves the
shipyard', you obviously have nothing left for the man to do so you
lay him off again. Only the men that are necessary to work on the
ship come in in the morning.
Navy shipyards don't run that way. They just bring in 8,000
men whether they've got a job in the yard or not. Obviously, it's
a pretty expensive way to repair vessels. But the navy likes to
operate navy yards because that gives them a tremendous political
power, voting power. All these people that work in the navy
shipyards vote the way the navy yard commander tells them to vote
to keep their jobs going. Navy politics.
Also it makes a lot of nice soft purses for naval officers.
Rather than having to go to sea and be on an uncomfortable ship',
you can have a beautiful home up at Mare Island Navy Yard and play
golf everyday. There's a lot of reasons for it. None of them is
economic or sound.
The same thing applies to tugboats. The navy has places all
over the country. There never was a substantial cutback in military
activities after World War II. Now they're just kind of getting
around to it. If we're going to fritter money away on pollution
control, we're going to have to stop spending money on national
defense, or stop throwing the money away. We're going to have to
cut down on national defense expenditures some way.
Changing Transportation Legislation
Feingold: To move to another area of federal concern, I have another note
that in 1961 you were active in protesting President Kennedy's
freight rate bill that would have allowed railroads to fix their
own freight rates on bulk and agricultural commodities.
Crowley: We're still arguing that one. The Surface Transportation Act is
supposed to be coming up. There hasn't been a major revision in
the transportation laws in the country for many years. Kennedy
suggested to the Congress that they pass a law that would allow
the railroads to establish any rates they want and also I think
common ownership was also in the bill as well that the railroads
could own and operate water carriers .
This has always been a policy that Congress has felt very
strongly about, that one form of transportation should not own
another form of transportation. If they do, they can prevent the
185
Crowley: development of another form of transportation by killing everybody
else in the business by highly competitive rates and then killing
the business itself.
This happened in California in the early days when Southern
Pacific [Railroad] came in here. They started their own river
boats on the river system and slashed the rates to nothing so that
all the commercial river boats went out of business. Then the
railroads stopped hauling stuff by water transportation and charged
exorbitant freight rates by rail.
When the Panama Canal was built, they passed the Panama Canal
Act which specifically stated that railroads could not own water
carriers. They felt that if the transcontinental railroads were
given the opportunity, they would start a steamship company running
through the Panama Canal that would slash the hell out of the other
steamship companies' rates and put them all out of business. Then
the freight would naturally go back to the railroads.
The Panama Canal Act forbade this and present statutes forbid
railroads from owning water carriers. The railroads have continually
tried to get laws amended to let the railroads operate water
carriers and also to let the railroads make their own rate levels so
that they, by destructive competition, could put competitive forms
of transportation out of business. They're still trying.
Feingold: In '61, did you go back to Washington to testify?
Crowley: I don't really remember '61. That's sometime ago. I've been
back there dozens of times in connection with these various matters.
I can't recollect what happened in '61.
Feingold: Then have you testified to congressional committees?
Crowley: Yes. There was one last Friday. Instead of going back, Bill
Minnis went back. This was a hearing. The Port of Sacramento
wanted a special bill put through Congress that would give them the
right to operate barges and water transportation system from the
Port of Sacramento down to San Francisco in competition with the
ICC regulated carriers.
Bill Minnis went back to testify that since we're regulated
carriers under the ICC, the Port should not be allowed to come
in and take our business away from us. The congressmen gave him
hell. He testified. Nothing is decided and probably won't be.
Feingold: As is the way of politics.
Crowley: As is the way of politics.
186
Helpful Congressmen
Feingold: Have there been any congressmen in particular who've been
particularly helpful to you?
Crowley: Congressman William Mai lliard has always been very helpful to the
water transportation industry. Congressman Frank Havener, Jack
Shelley and George Miller were always very helpful to the water
transportation industry. They're Democrats and Maillard is a
Republican. Maillard is still there; Havener, Shelley and Miller
are gone.
Congressman Frank Clark is very helpful to the water transport
ation industry; he's in Pennsylvania.
Feingold: What committees is Mailliard on?
[interruption]
Crowley: He's on the House Merchant Marine and Fisheries Committee. He was
and I think he still is; I'm not sure. He's also on the Foreign
Affairs Committee. He was the ranking Republican member of the
House Merchant Marine and Fisheries Committee. [refers to
Congressional Directory, 1972] Mailliard is a ranking Republican
member of the Foreign Affairs Committee and he's second ranking
member of the Merchant Marine and Fisheries Committee; Tom Pelly
is the first ranking. Of course, this is '72 and now it's '73; I
think Pelly is still there I'm not sure.
Mailliard is from San Francisco and he's very good on the
Merchant Marine and Fisheries Committee. He's made one mistake,
and that is he has endorsed the expenditure of $12 million, a
grant of $12 million by HUD to build this Golden Gate ferry system.
He has done so because his district now composes part of Marin
County and part of San Francisco. He can't oppose it; whether he
thinks it's right or wrong makes no difference, that's beside the
point. If his constituents can get $12 million out of the federal
government for a phony ferry system, he's got to be behind it
whether he likes it or not. What his real opinion is, I'm sure I
don't know. I do know that politically he knows he has to be for
it.
Feingold: Do you know him personally?
Crowley: Yes. I've known him for years. The Mailliard family have been around
for a long time. Jim Maillard married Sally Van Sicklen. Bill was
married to some dame I forget her name; they got divorced. Then
he married Millie, his secretary in Washington.
187
Crow ley: Mai Hi ard has always been active in the Merchant Marine and
Fisheries. As I say, in recent years he has become interested
in foreign affairs particularly.
Feingold: Have you been involved in any of his campaigns?
Crow ley: Just contributions, that's all. I'm no politician.
Professional Associations
Feingold: To switch gears a bit, could you tell me what professional groups
you belong to or the companies belong to. The only one I know of
is the Pacific Maritime Association.
Crow ley: We don't belong to the Pacific Maritime Association; we have
nothing to do with that because they handle their relations and we
keep away from them as much as possible.
We do belong to PAC-AIMS, which is the American Institute of
Merchant Shipping, and PAC-AIMS in the Pacific Coast Division of
it. We also belong to the American Waterways Operators Association,
which is a Washington-based association of people in the tug and
barge business throughout the United States.
We also belong to the Water Transport Association, which is
an association of the common carriers by water on the Mississippi
River system and on the coast-wise routes, like Sea-Land.
PAC-AIMS, AWO and WTA are the major industry organizations we
belong to, and not the Pacific Maritime Association.
Feingold: What major functions do these associations perform?
Crowley: To watch legislative developments and see that we're not put out of
business by some screwball laws; also, to advocate legislative
activities that would be beneficial to the industry. Not only
legislation, but activities by government agencies, such as
Interstate Commerce Commission, United States Coast Guard, Federal
Maritime Commission, and so on and so forth.
188
XVI BACKGROUND
[Interview 8: April 1, 1975]
Education
Feingold: Perhaps we could begin with some information about your background.
Crowley: Okay. I was born in San Francisco on September 3, 1914. I went
to school through the fourth grade at Miss Paul's and then to
Spring Valley Grammar School through the seventh grade, and
then I went to Potter School from the eighth grade through, and
graduated there from high school. In the meantime, the name had
been changed to Damon School.
Feingold: And these are all in San Francisco?
Crowley: Yes. Then I went two years to Stanford University and left Stanford
in the early spring of 1933 to go to work as a deck hand on a Red
Stack tug. I had worked at the Crowley Shipyard in the summer
of '31, and in the summer of '32 I worked at Pier 17 checking
freight and making out manifests and bills of weighting and so on.
I left Stanford because I felt I was wasting my time with a
bunch of parlor pinks trying to fill you up with a lot of
propaganda during the Depression. One specific item was: they
used the example of the Market Street Railway versus Municipal
Railway to show that public ownership of public utilities was much
more favorable than private ownership.
In high school, I had been made to write an article on the
Market and the Muni Railways and I had done a considerable amount
of research in City Hall and the public library, so that I knew
more about it than anybody else around there. When I pointed out to
the professor that the textbook was definitely incorrect in its
statements, he said, "Look, it's in the textbook. That's a fact.
That's it." So I figured that was a hell of a college education,
so I might just as well terminate it at that point, which I did.
Photo left: Thomas B. Crowley,
Jane Crowley Koven, and Thomas
Crowley, 1925.
Photo below, left to right: Jane
Crowley Koven, Constance Crowley
Bowles, Thomas Crowley Sr. , Thomas
B. Crowley, and Virginia Esher
Crowley, 1925.
189
Feingold: Were you taking mostly business courses?
Crow ley: Yes. Mostly economics, accounting. I did take some physics and
geology. Different things. This course was a required course
called "Citizenship" for all freshmen and sophomores, and I
didn't swallow the propaganda they dished out.
Effects of the Depression
Feingold: Even though this was the Depression, you didn't have any problem in
finding a job.
Crowley: Oh, no. I went into the inheritance business at any early age.
Having a father that's in business came in very handy. [laughter]
In fact, my father had been spending most of his time on California
Street in the late twenties and had invested a considerable amount
of money and bought a lot of Transamerica stock on margin, and he
rode the market down and then he said, "Hang on, Tom, we'll hold
the market," or something like that.
So in the thirties , my father had to go back to the waterfront
and run the tugboat companies more efficiently. He found that in
his absence they'd been run extremely inefficiently. So when he
came back to the waterfront in 1929 and '30, although it was a
Depression, the company never did better because it was properly
run and there wasn't any money spent and thrown away and it was
done quite efficiently.
Feingold: Was it the sort of business that the Depression wouldn't really
have affected that much? Did shipping continue?
Crowley: Well, no. The Depression affected all business. But also, even
during a depression, if a business is efficiently run, you can
take in more money than you pay out, this being the essence of
business. During the twenties, Crowley Launch and Tugboat Company
had been paying out more money than it took in, even though there
was lots of business around and things were booming.
The same thing applied to Harbor Tug and Barge Company. It
was run by a fellow by the name of Dizzy Williams . He was doing
a tremendous amount of business in the late twenties at Harbor
Tug and Barge Company. The only difficulty was that he was paying
out more than he was taking in. So when the crash came in the
thirties, Crocker Bank stepped in and said, "No more."
190
Crowley: There were businesses during the Depression that were not minting
money, but they were making a small profit and giving a good
service and run efficiently without a lot of wasted expense. That
was one of the benefits of the Depression it did make businesses
run a lot more efficiently.
Then when the New Deal came along with President Roosevelt
and his National Industrial Recovery Act theory, that had the
effect of having all the businessmen get together to promote or
put together a code of fair competition, which was nothing more
than a cartel or agreement to hold prices up so that the labor
unions could also organize and bargain collectively with the
employers for wages , and thereby create what was then deemed a
cycle of improved business conditions.
But as a practical matter, as Winston Churchill said, "Mr.
Roosevelt's fooling around with the social environment in the
United States prolonged the recovery from a depression, that
prolonged the worldwide depression and allowed Hitler to come into
power and sowed the seeds of World War II." This was in a speech
that Churchill made sometime in the late thirties.
Feingold: In terms of the industry code, who else were you forming that
cartel with, with ship owners?
Crowley: No, just everybody in the tug and barge business. In fact,
there's a picture on the wall in the conference room of the
meeting in Washington before the National Industrial Recovery Act
board showing Art Wellington of Bay Cities Transportation
Company and Linley Davis of Carey-Davis Tug and Barge Company
and Arthur Foss of Foss Launch and Tug Company. Everybody that
was prominent in the tugboat business on the west coast at the
time went back to Washington and got together with the New Dealers
and formed a code of fair competition to eliminate chiselers, as
Franklin D. Roosevelt used to talk about.
In fact, also in that picture is Claude Deal, who represented
the Inland Boatmen's Union and was there to see that the labor
unions got their whack in also. But as a practical matter through
out the economy, most businessmen didn't give a damn if the labor
unions got a little more money as long as they got plenty of
money. [laughter]
And that in fact was the National Industrial Recovery Act,
which Roosevelt got a lot of credit for and he's the savior of
our country, but it was sowing the seeds of World War II by
prolonging the recovery and was also sowing the seeds for our
profligate post-war economy that has been drifting along all these
years with a maximum of money and a minimum of efficiency. That's
one of the reasons we're in an energy crisis today.
191
Feingold: How long did the NIRA code last?
Crowley: I believe it was declared unconstitutional by the Supreme Court in
1936 or '37 in the Chicken Case.* I don't remember the details,
but that was the end of the National Industrial Recovery code. But
the getting together of employers or businessmen in all the
various industries lasted a long time after that and the Department
of Justice is still fighting it. [laughter]
My brother-in-law was in the galvanizing business back east
and he said all the galvanizers got together and they minted
money on the galvanizing from then on, all during the thirties,
the forties, the fifties and so on.
Feingold: They create a monster and then they don't know what to do with it.
Crowley: That's right.
Feingold: Then you must have done very well when the war came along too, the
whole industry.
Crowley: Yes, the whole industry did very well. But the major problem then
was that the profits were 85 or 90 percent taxed. So it didn't
really make much difference how well you did. The economics did
not enter into it during the war; it was a question of getting
the job done and trying to keep the army and navy from taking over
all the commercial equipment, because once the army and navy took
over commercial equipment nothing was done with it.
We had some tugs that the navy took over and took up to
California City and they couldn't even run them. They left them
up there for a year or so and we finally got them back and put them
to work doing jobs. One commercial tug in San Francisco Bay would
do the work of about ten navy tugs.
Early Work Experience
Feingold: To back up a bit to your own career, was '31 the first time you
had worked in any of your father's enterprises?
Yes. The work at the shipyard was the first day-in-and-day-out
work. I had worked a few days here and a few days there and taken
a trip to San Pedro on a tugboat and stuff like that, but 1931, when
I went to work at the shipyard working on the dry dock over there
*S chech ter Poultry Corporation v. United States (1935)
192
Feingold: I just figured out you were seventeen at the time.
Crowley: Yes, that's about right.
Feingold: Then, when you left Stanford in '33, where did you go to work?
Crowley: Shipowners and Merchants Tugboat Company on the tug Sea Scout
under Captain Ernest Mohr. The chief engineer was Frank Walsh.
The fireman was Manuel Gonzales and the other deck hand was John
Anderson.
Feingold: So you were a deck hand?
Crowley: Yes.
Feingold: How long did you work in that capacity?
Crowley: I worked on the tugs as a deck hand and a mate for about a year.
Then I went to work in the office of that company typing out bills,
invoices, and doing minor bookkeeping work. Then after I had worked
with that for about a year or so, my father sent me uptown to see
the shipowners to attempt to solicit tugboat work. So I used to
go into the steamship company office on California Street and
tell them that I saw they had a ship coming in in a couple of days
and could we furnish a tug, and that sort of stuff.
Feingold: And from there?
Crowley: Then I solicited a certain amount of work for the shipyard; the
purse seine fish boats were down at Fisherman's Wharf. We used
to go down and see all the Italian and Portuguese skippers,
Slavonian skippers and try to get them to come to Pacific Dry Dock
and Repair Company to get dry docked.
Then I worked down at Pier 14 with Crowley Launch and Tugboat
Company. We started up a company called United Towing Company
that transported bulk petroleum and I worked there for a while.
Feingold: When you say "we started it up," was that you and your father?
Crowley: Yes, in 1939. In 1938 we designed and built a 7,000 barrel
gasoline barge. Then in 1939 Shell Oil decided to get rid of their
equipment and sell it to us, and we formed a new company, United
Towing Company, and operated the bulk petroleum transportation
equipment on the Bay.
Also, in 1938 we were getting ready for the Golden Gate Inter
national Exposition at Treasure Island in 1939, and we built two
water taxis and bought some Chris Craft speed boats and refurbished
the double-deckers and hauled passengers out of Treasure Island over
to Alcatraz and around the Bay on a sightseeing cruise.
193
Feingold: It sounds like, then, starting in the early thirties you were
working alongside your father?
Crow ley: Yes, more or less. He was the boss, of course, and I was the
stooge. We discussed it, and I gradually worked into the
business .
Feingold: But it was understood that you were being groomed to go into
Crowley: [laughing] I suppose that was the general idea. I never looked at
it that way, but you do whatever you're supposed to do and be done
with it.
Feingold: You would carry on the family tradition, as it were?
Crowley: Well, there wasn't much of a family tradition. I mean, what the hell,
you have to make a living [laughing] and you've got to eat!
Feingold: At what point did you take over the enterprises?
Crowley: That's hard to say because, you know, it was just progressive.
As time went on, I did more and more, my father did less and less.
There was no specific time or period when he relinquished the
presidency and I assumed it. It just went along that way.
Feingold: The Oral History Office did an interview with your father.* I
wondered if you could make a few comments about what it was like
working with him from the perspective of his son and partner.
Crowley: He watched very closely all the details of the business and
watched the dollar, which was most important, and during the
Depression didn't spend any more than he absolutely had to. He
made sure that everybody was economical and did a good job. He
also negotiated with the unions strongly and he didn't give in
very easily. He was very tough and hard-working and just
generally did a good job.
In my opinion he was an excellent businessman. He ran a
business and wanted to one, give a service to the customer and
two, to take in more than he paid out and three, thereby make jobs
for people and perform a service for the community.
Feingold: Was he an easy person to work with?
*Thomas Crowley, Recollections of the San Francisco Waterfront,
Regional Oral History Office, The Bancroft Library, University of
California, Berkeley, 1967
194
Crowley: Sometimes he was, sometimes he wasn't. He could be difficult when
he wanted to. On the other hand, if you knew him well, you could
kind of tell when he was just putting on an act. He'd always say,
"no, no, no" to start with' but you could tell generally speaking
that eventually he'd say "yes." But he just wanted to make sure
that it wasn't done too easily, which everybody does to a certain
degree more or less.
Feingold: Is there anything else about your own personal background that we
haven't gotten that should be in here?
Crowley: No, I can't think of anything else. I was always interested in
boats and did a lot of sailing, and I was familiar with how a boat
should be built and handled. I got to know the engines and deck
fittings and bulk petroleum transportation and pumps and engines
and everything that goes with it. It was always very interesting
to me, and it can be quite interesting to get totally involved in
the technical end of the business.
But also there are other things that have to be considered,
and that is the question of taking in more dollars than you pay
out. Tied in with that are income taxes. Even in those days, the
income taxes were fairly complex to say the least; today they're
totally complex and not in the least understandable.
And then accounting is very important, and I wanted to under
stand how accounting was done and management information systems
that originate from accounting so people will know just what a business
is or is not doing. Those aren't as much fun as playing around with
engines but it's all important for the business.
And also soliciting customers trying to be nice to somebody
and trying to get them to give you a tugboat job is important.
You might say that sales, operations and administration are the
important parts of it.
Feingold: You need a lot of skills.
Crowley: You need a lot of skills to run a house to cook and sew and wash
the windows efficiently; you need a lot of skills whatever you do.
Feingold:
Family
What about the rest of your family? Do you have any brothers and
sisters?
195
Crowley: I have three sisters, no brothers. My oldest sister worked as a
stenographer for the company for a year or two off and on. But
that's about the only one [who worked for the company]. Then she
went back east and got married and lived there for a number of
years, and then came back out here during the early forties, I
guess, and her husband went to work for the company in the early
forties. His name is Caspar Escher.
Feingold: What about your other two sisters?
Crowley: My other sisters, neither of them ever worked for the company, nor
their husbands.
196
XVII OIL PIPELINES
Feingold: Let's move on to the next topic here, then. Since it's been a
while since we last talked, I was wondering about some of the
things we talked about earlier, like the Alaska pipeline. What is
the status of your work there?
Crowley: As you know, the pipeline was cleared by an act of Congress and
construction has proceeded. We presently have an order from
Bethlehem Shipbuilding Company in San Francisco twenty-one barges,
400 by 100 by 20. We've gotten delivery, I think, of about ten
or twelve, and we have nineteen tugs on order from McDermott
Fabricators, Morgan City, Louisiana. (That's that tug you see in
the picture back there.) We've gotten delivery of about five of
them now, and we have the other fourteen coming.
This equipment is being used in Alaska and the North Sea and
in the Gulf of Mexico. The pipeline is going along under
construction, and we have signed contracts with British Petroleum,
ARCO, Exxon, and Alyeska to continue to carry cargo around Point
Barrow in the summertime up to the North Slope.
This summer we expect to carry the measurement equivalent of
approximately three hundred thousand tons on Point Barrow. The
hydro train is very busy. But we haven't gotten enough barges yet
from Bethlehem to give the service on the hydro train that we'd
like to. Then when the summertime rolls around, we have to take
some of those barges away to serve the North Slope. Therefore
the service in the hydro train drops off substantially in the
summertime and everybody in Alaska hollers their head off. But
that's too bad, because nobody was particularly anxious to help us
out during the lean years. We could have built a lot of equipment
then and been ready for it when it came. But there wasn't much in
the way of planning or looking ahead to get this equipment built.
In fact, we ordered a lot of these barges and a lot of these
tugs long before Congress passed the bill authorizing the Alyeska
Pipeline. And because of the fact that we had them under construction
197
Crowley: when the pipeline was finally authorized, we were able to get the
contract from BP, ARCO, and Exxon to serve them on the North Slope
because if we had not ordered the barges a year or two early, the
pipeline would have been delayed a couple of years. They had no
alternative but to use our equipment, which was already under
construction. Did I tell you that before?
Feingold: I remember when we discussed it before it was before Congress had
acted, and then it was all up in the air. I had the impression
then that it was a big risk that you had taken in making such a
large commitment in equipment .
Crowley: Yes, it was. But it has proven to work out very satisfactorily.
Feingold: I'd clipped out this picture in the Chronicle.* I guess that's
one of the barges that Bethlehem was
Crowley: Yes, that's one of the Bethlehem barges. This is the fifth of
sixteen. Let's see, I told you we had twenty-one. We had
sixteen and then we ordered five more and then we've ordered two
more, so that's twenty-three. I don't remember exactly how many
barges we've got; I could check. But there's a whole bunch of
them coming, and they are very necessary to take the cargo to the
North Slope because the oil companies found out that they can
build great big units weighing anywhere from four hundred to a
thousand tons a whole building completely put together and we
roll it on the barge, take it up there, and then roll it off and
it's all completed before it leaves Seattle so that they don't
have to do a lot of craftsman work in Alaska under the terrible cold
and the miserable conditions they have up there.
Feingold: That's quite remarkable. And then these are pulled by the tugs?
Crowley: Yes. The tug is out on a hawser on a wire out ahead and pulls it
up the inside passage, across the Gulf of Alaska up through the
Bering Sea and then to Prudhoe Bay.
Feingold: And would it be the tugs that are being built in Morgan City that
would be hauling this?
*San Francisco Chronicle , 6/19/74. The caption reads "This huge
flat-deck barge, ticketed to transport cargo to and from Alaska's
North Slope, is the fifth of sixteen being built by Bethlehem Steels'
San Francisco shipyard for Crowley Maritime Corp. It is 400
feet long, nearly 100 feet wide and 20 feet deep. The next two
barges will be outfitted to carry rail cars between Seattle and
Whittier, Alaska."
198
Crowley: It would be, if it weren't for the fact that we can't get them fast
enough. Last year there wasn't one of the new tugs in the sea
lift. This year I don't think there'll be one of the new ones in
that group either because over in the North Sea there's a big
anchor-moving job to be done for McDermott and others on the pipe-
laying barges. So we have sent about six of those new tugs over to
England, and they're working in the North Sea now moving anchors
for McDermott.
The tow up around Point Barrow is a relatively easy tow that
almost any tug could do, so we're hiring Foss tugs or [inaudible]
tugs to do the towing for us here while our good tugs are working
over in the North Sea, which is very tough, dangerous and hard
work and takes very good equipment.
Feingold: What is this anchor-moving job?
Crowley: For example, when a derrick barge places a platform in the North
Sea, they've got to hold themselves in position. So they run a
big anchor out here [demonstrating], another out there, another
one out there, and another one out there, so they have four anchors
several thousand feet out from the derrick barges with wires out to
those anchors, and that holds them in position. So that anchor
placement is very important, has to hold the derrick barge in
position to place a platform or alongside a platform.
Then when they start laying pipe from the platform the
pipeline barge consists mainly of a large barge that's got huge
winches on it that can put anchors out ahead and behind to hold
it in position while they weld the pipe together, and it gradually
pulls itself along the pipeline as they weld the pieces together
and dump them into the bottom of the ocean. They have to be
continually moving those anchors for the pipe-laying barges.
The large pipe-laying barge will have, say, eight anchors out
all the time, two off of each corner. So those, as they pull
themselves forward and lay the pipe, would be continually moving
those eight anchors. When the stern anchors get so far out it's
on a long wire they have to pick the anchor up by the crown buoy
and carry it in and place it in position so the barge can hold
itself back. Then the forward anchors, they pull them in and
then they have to pick them up and carry them out forward and so
on.
That has to be continued in almost any kind of weather that the
pipeline barge can work in because if the anchors aren't moved,
the barge can't pull itself ahead and it can't weld pipe together.
Those big anchor-laying barges in the North Sea with a couple of
hundred men on them, and a lot of equipment and so on those
barges run a hundred thousand dollars a day. So you can see that
199
Crowley: the anchor handling it's important that the anchors be moved when
they want them to move and not a minute too soon or a minute too
late. The whole function of the pipeline system depends on the
movement of the anchors, and then the winches heaving the barge
forward.
Feingold: What company is handling the operation in the North Sea?
Crowley: The Union Towing and Transportation Company is a joint venture
formed by Sea Span International, a Canadian corporation; Letzer
Tugboat Company, a Belgian corporation; and Crowley Maritime
Corporation, a Delaware corporation. Most of the tugs have been
furnished by the Puget Sound Tug and Barge Company, and Letzer
and Sea Span are building new tugs and furnishing equipment. But
up to the present time, we've furnished about 80 percent of the
equipment, and each will eventually furnish one-third of the
equipment, and we will furnish one-third of the equipment. We
want to get our equipment back in order to do our own work out
here, and also in the Gulf of Mexico.
Feingold: And so you're maintaining an office now over there?
Crowley: Yes. We maintain an office in London and another one at Peterhead.
200
XVIII CROWLEY MARITIME CORPORATION
Feingold: Could you tell me about Crowley Maritime Corporation.
Crowley: Crowley Maritime Corporation was formed January 1, 1973, for the
purpose of owning all the stock in all the different corporation
entities that we did business under. Crowley Maritime Corporation
files a consolidated income tax return which puts all the companies
into one pot, so to speak. It is now the parent company of all
these different companies including the ones in the northwest and
the ones in California.
We have Crowley Maritime divided into two divisions, the
California division and the offshore and northwest division.
Since most of the offshore equipment is run out of Puget Sound
because of the labor agreements and so on, we call the northwest
the offshore and northwest division of Crowley Maritime.
Feingold: You hold an office, I presume, in Crowley Maritime.
Crowley: Yes. I'm president and chairman of the board or whatever you want
to call it.
Feingold: So then the company pretty much serves a financial function.
Crowley: The Crowley Maritime Corporation unites all the corporations into
one financial entity which is run out of San Francisco; and then
the operations for the offshore and northwest division are done
out of Seattle, and the California division out of San Francisco.
201
XIX LEGAL DIFFICULTIES
The California Inland Pilots Association Files Suit
Feingold: Do you want to discuss the antitrust suits?
Crowley: Sure, I don't mind. Anything you want me to talk about, I'll tell
you if I don't want to discuss it. You just ask any question you
want; it's all right with me.
Feingold: Are there two separate suits now?
Crowley: There are three.
Feingold: There are three?
Crowley: Yes. During the strike of Shipowners and Merchants Tugboat Company
in 1969-70, some of our tugboat captain pilots got together and
said that they weren't going to go back to work for the tugboat
company but they were going to form an independent California Inland
Pilots Association, which they formed, and hired themselves out to
the shipowners to shift ships and dock ships around the Bay for a
fee, claiming that they could handle the ships without tugs or with
very small tugs, and thereby save the shipowners money.
The California Inland Pilots Association is a very loose
association. The pilots just belong to it and they have a central
office, a central dispatcher, who takes all the orders. But each
pilot goes out and solicits his own work, his own customers, and
charges them bills them separately for his own service. So one
of the members of California Inland Pilots can be starving to
death and the other can be rolling in riches, and there's no
pooling of income by any stretch of the imagination.
Well, this group proceeded along. Then after Shipowners and
Merchants Tugboat Company went back to work, the loyal tugboat
captain pilots came back to work for Shipowners and Merchants , and
the California Inland Pilots group said, "We don't think that the
202
Crowley: tugboat captain pilots ought to go on the bridge of the ship and
handle ships anymore." We said, "We've been doing it since 1883
and we propose to continue doing it." So we had a lot of
discussions and a lot of arguments.
To make a long story short, the California Inland Pilots
Association wanted us to stop going on the bridges of ships, and
then they would give us all the tugboat work and also get a bill
through the legislature that would make it compulsory to use
California Inland Pilots and also compulsory to use tugboats.
We said, "Nothing doing we're not interested in any sort of
a proposal like that, because we don't think you can legislate that
shipowners have to do this and have to do that. It should be
entirely up to the customer whether he wants a tug or doesn't
want a tug or wants a pilot or doesn't want him, or whatever he
wants to do. And furthermore, you couldn't trust you guys any
further than you could throw a red-hot stove anyway because you're
a bunch of double-crossers and you quit us and went in for yourselves
and you don't even look out for your own fellow pilot. You do as
much work as you can and the hell with the other guy."
Anyway, we did not get along philosophically because we feel
that they are independent businessmen looking out for themselves
as best they can and they're in business in competition with us.
We're in business also to try to get tugboat work and dock ships and
do what we can to give a service to the shipowner and take in
more money than we pay out.
So, this went along for quite sometime, and then they said to
us, "All right. If you won't do what we want you to do, we're
going to bring a suit against you for monopoly because you won't
furnish tugs to an independent pilot." We say, "You know that is
a goddamn lie because anytime you order a tug you get a tug, and
we will furnish tugs to any ship that wants them, provided the
shipowner will pay us . "
So they went to some shyster attorneys who took the case on a
contingency basis. These attorneys brought suit on the basis that
we're a monopoly and we are in restraint of trade because we won't
furnish a tugboat to a California Inland Pilots Association pilot.
They had depositions, and in those depositions we testified that we
always furnished a tug to anybody that asked for it, provided
they're willing to pay for it. Their case that we are in restraint
of trade by not furnishing tugboats is totally incorrect from a
factual point of view.
I think their attorneys got kind of a surprise in this in the
depositions. However, they are still continuing on with the
lawsuits, mainly as a nuisance factor, I think, hoping that we'll
203
Crowley: stand together in the tugboat work. But we are not about to agree
to that. Somebody said something about millions for defense but not
a cent for tribute that's the way we feel about it.
After that case had gone along for a while
The Crowley Countersuit
Feingold: Just a minute about that case. Didn't you then file a counterclaim?
Crowley: Yes. Our attorneys filed a counterclaim against the California
Inland Pilots Association because they are all independent
businessmen billing for their services and collecting their revenues
just as any other business that is paying their expenses, but they
are all standing in together and holding to a certain fixed charge
for their services.
Now, this is all very well if you are a member of a union and
you work for a fixed wage. But when you are an independent
businessman, and you go out and you charge exactly the same price
that the other guy does and sit down in meetings with him and agree
to those prices, you are sure as hell in violation of the antitrust
law. And if the customer sits down with a group of independent
businessmen and agrees that this will be the price that they'll
pay, the customer also is guilty of violation of the Sherman
Antitrust Act or the Clayton Act or something like that.
So we started a countersuit against them claiming that their
case had no merit whatsoever, but as a matter of fact, they were
in violation of the antitrust laws, as were the shipowners that they
did business with. They were both in violation of the Sherman Act
or whatever it is. So that's the way it stands.
The Murphy Tugboat Company Suit
Crowley: There's a small tugboat company on the Bay Murphy Tugboat Company
who started up during our strike with the avowed intention of making
a fast buck, as they stated to the press, and soaking the shipowners
about three times the regular rate for their services and to make
hay while the sun shines. Murphy has continued to stay in business
after the strike with some smaller tugs and with the connivance of
the Inland Pilots, because the Inland Pilots don't want to use us
if they can avoid it. So they used Murphy instead and they keep
Murphy alive slipping him jobs.
204
Feingold: But does Murphy have enough tugs to be able to meet their needs?
Crowley: He had two and then he got up to four and he started losing so much
money with the four, he got rid of two of them. Then he was back
down to two and he was still losing money. Then one of them broke
a crankshaft, and as of today, he's got one.
He can make a few dollars with one tug. He doesn't have too
big a payroll, but Murphy is not the best operator in the world.
He's inclined to, when he gets a few dollars in his jeans, to be
a little expansive. One of the most recent things that kind of
upset his outfit was that he went out and spend $7,000 for a little
speed boat, and here he was telling the men that he couldn't afford
to pay them the union wage and that sort of stuff. This created a
minor riot, to say the least. But that's the kind of an operator
he is. If we have to have competition, that's the kind of
competition we like to have.
Feingold: So it would seem that the Inland Pilots end up having to use your
tugs, whether they like to or not.
Crowley: Definitely. In fact, some of the Inland Pilots much prefer to use
our tugs because they're so much better tugs anyway. They're afraid
they'll get into trouble with Murphy's tugs or tug, and as a result
they use our tugs quite frequently. And we continue to work for
the Inland Pilots. No matter what they say, we continue on to do
what we've always done, and that is to give tugboat service to
anybody who's willing to pay for it. Hell, we're only interested in
the money.
Anyway, after a while these attorneys went to Roger Murphy and
they got him to start an antitrust suit against us claiming that
we were in violation of antitrust, we had all the good tugs on the
Bay, and he didn't have a chance to get any, and so on and so forth.
His antitrust suit looked for some damages and also for the court
to hold that we should give him some of our good tugs so that he
could have some good tugs to operate with. [laughter]
Feingold: That's a simple way of getting tugs.
Crowley: Very simple. But I don't think the antitrust laws mean exactly
that. In fact, the very thing that the antitrust laws are set up
to do is to produce competition and efficient business operation,
and we think that we are as efficient as anybody and as competitive
as anybody and do our best to solicit work and get paid for it
and that's it.
205
A Further Suit
Crowley: Then there was a third lawsuit brought by Murphy Pacific Salvage
Company who had been in the tugboat business during the strike
and had gone out and acquired a couple of tugs that weren't bad
tugs. But they had acquired them under a leasing arrangement
whereby they would pay for the total cost of the tugs in a period
of five years with 18 percent interest on the declining balance.
This lease agreement was very onerous to Murphy Pacific Salvage,
and the fellow that put the agreement together, Phil Murphy, died
of a heart attack, and Bob Lauder was left running the company.
Lauder decided that after they'd lost about a half a million
dollars in tugboat services in one year, they'd better get the hell
out of it. So he told us they were going to discontinue their
tugboat service and lay the tugs up, and would we be interested in
buying them. We said, "Well, we'll look them over."
So we looked at them and the price he asked was a reasonable
price for the tugs. They were a bargain, so we bought them. One
of them has been working ever since in Honolulu, and the other one
has been working ever since in Alaskan waters, and they're not bad
tugboats .
Biit, the shyster attorneys went to Murphy Pacific and said,
"We want you to start a lawsuit against this company Shipowners
and Merchants, Crowley because you were forced out of business
by him and he bought your tugs and that's a violation of the Sherman
Antitrust."
Lauder said, "God, he saved our lives by stopping our lawsuits."
In fact, they were headed for the bankruptcy court, and they had to
stop their lawsuits somehow. So they stopped performing a tugboat
service and sold their tugs .
Also, because they were faced with bankruptcy, they were able
to negotiate a settlement of this very onerous five-year lease
that they had. You can imagine if they pay the full cost of the
tugs in five years and still not own them, and also pay 18 percent
interest on the declining balance, they would have paid out a
fantastic amount of money over the five years. So they were able
to cancel that whole thing and sell the tugs, and it was a wise
business move to get out of the business.
Anyway, the attorneys went to Lauder and said, "We want you
to sue Crowley under antitrust," and he said, "Don't be silly!"
They said, "All right now. If you do not bring suit, we have some
206
Crowley: stock in your company Murphy Pacific Salvage Company and we will
bring a minority stockholders' derivative suit against you and the
directors for not bringing an antitrust suit, which in turn
would help Murphy Pacific Salvage Company." So, they said, "Oh,
my God."
Anyway, they had had some other problem with directors liability
and their directors liability had been cancelled. So they said,
"The cheapest thing for us to do is to file a suit and that will
stop us from getting into a lot of trouble with the attorneys who
are working on this thing on a contingency basis. They've got a
lot of time to give us trouble, so the best thing we'd better do
is go along with them." So they have also filed a suit for I don't
know what reason, but the idea is that we forced them out of
business or something like that.
So those are the three suits we have against us. When they'll
come to trial I don't have any idea. What the court will decide I
don't have any idea. But I can't see where we are in any way in
violation of the antitrust laws. All we're trying to do is give
a good service to the customers at a fair price, and if somebody
else wants to be in the tugboat business, they can go right ahead
and be in it.
As far as the pilots are concerned, that situation is totally
ridiculous as far as antitrust is concerned. Their basic premise
that we don't give them tugs is a lot of hogwash, as the facts
will show.
Feingold: When you said that Bob Lauder was threatened that if he didn't
sue, that he
Crowley: He's president of Murphy Pacific.
Feingold: that a minority stockholders suit would be filed against him,
who were these minority stockholders, the attorney?
Crowley: Yes. The attorney had picked up a few shares at Murphy Pacific
Salvage Company, which is a publicly traded company, and would have
the power as a minority stockholder to file a derivative suit
against the officers and directors of the company if they didn't
take some action that they should be expected to take.
Feingold: Are the two Murphy companies related?
Crowley: Roger Murphy, who owns and runs Murphy Tugboat Company, is a son
of Phil Murphy, who was the guy that started Murphy Pacific
Salvage Company, along with Louis Ets-Hokin, ten years or so ago.
Phil Murphy dropped dead of a heart attack, and his son Roger has
continued on with this Murphy Tugboat Company, and the new company
he started, and try to say in the tugboat business.
207
Feingold: I have a clipping here, the date of which I unfortunately forgot
to include, but this was the one about the Murphy tugboat suit.
According to the paper, one of the things they charge the Crowley
tugs with is the practice of paying the captains what is known
as "hat money" and they call that a bribe.
Crowley: Yes. Well, in tugboat circles throughout the world, since the
days of the sailing ship, it's been customary that when the
skipper of a ship hires a tug, that the tugboat company slips him
a "hat" which is a five dollar bill. This has been practiced for
many years, and we have discouraged it. When World War II came
along, we were able to almost completely eliminate this, because
the foreign ships didn't run in here, and the foreign skippers are
the worst of all.
In the late forties it started up to some degree, but mainly
because there were foreign-flag skippers who would come in here,
they'd take a tug and then they would not sign the bill which
acknowledged the service unless you slipped them a hat like you
used to.
So it is practiced very, very rarely. But it is practiced,
because sometimes you get some Greek or Italian or Frenchman or
something like that who comes into the office, sits down, and says,
"I will not sign the bill unless you give me a hat." So we give
him a hat. We won't argue the point at all.
As far as Roger Murphy is concerned, if he would like to show
us his expense account how many lunches and dinners and cases of
whisky he buys for his customers we'd be very glad to take a look
at it. I venture to say that between the California Inland Pilots
and Murphy Tugboat Company, those two outfits spend more money on
bribery than we do.
Feingold: I'd imagine they'd be in a position where they'd have to.
Crowley: Sure. The independent pilot that's how they get the business.
They get the guy that orders the tugs for a steamship company and
they wine him and dine him, give him a cut out of their pilotage
fee, and that's how they get their business almost completely.
Why would anybody hire an independent Bay pilot who charges
seventy-five dollars pilotage fee for docking a ship when the Red
Stack pilots charge twenty? But they use the independent pilots.
In any business there's a certain amount of that stuff going on
all the time. To even discuss it is kind of ridiculous.
Feingold: I suppose filing these suits is an act of survival on their part.
208
Crowley: No, I don't think so. In fact, rather than an act of survival,
they're spending a lot of money foolishly, and the attorneys have
got the case on a contingency case, and so they take care of it
in their spare time hoping to make a dollar out of it some day
down the road.
No, I don't think it's an act of survival. I think it's a
kind of a foolish move, frankly, because we're spending a lot
of money for legal fees, they're spending money for depositions
and court costs and expenses and so on, and who's paying the bill?
Our customers, the shipowners; they're picking up the tab for all
this. We'd both be better off if we didn't throw the money away
that we're getting from our customers for a whole lot of legal
fees and expenses and this and that for really no reason at all. '.
don't think they're naive enough to think that the court will say
to Shipowners and Merchants Tugboat Company, "You have to give
some of your good tugs to Roger Murphy because he doesn't have
any good tugs." I mean, I don't think that's what the Sherman
Antitrust Law says, but we may find out otherwise. I don't know,
but it sounds kind of silly to me.
Feingold: I'll be looking in the newspapers to see the outcome.
Campaign Contributions and the Golden Gate Ferry^
Feingold: One of the other things I noticed last summer was that there was a
bit of flack when Supervisor Gonzalez revealed the source of his
campaign contributions, and there was a certain amount of noise
that he had received contributions that were improper from Harbor
Carriers .
Crowley: Yes. I didn't know too much about that at the time; Al Elledge
handled it, and I don't remember exactly what the details were.
I think what it was, if I remember right, that Gonzalez or some
committee to elect Gonzalez hired a boat one of the excursion
boats , a harbor tug and then sold tickets to people to go on
the party, to have a party on the Bay for Gonzalez. Then it was
claimed that Gonzalez' committee never paid for the boat. But
as I understand it, Elledge claimed that the boat was paid for.
I never did know what the detail was .
As far as Gonzalez, I don't know him from Adam. [laughter]
I couldn't care less. To me, it was kind of a waste of time.
Somebody was just trying to get back at Gonzalez, I guess one
of his enemies stirred up. I don't think anything ever came of it;
I know I've never heard anything about it.
209
Feingqld: No. There were two articles last July.
Crowley: Yes, I remember reading them.
Feingold: As far as I know, that's all I ever saw.
Crowley: That's all I ever heard, and nothing ever happened. I think that
fellow [Stephan] Leonoudakis got involved in it. Yes, he's the
one that accused him, because Gonzalez was saying something about
the Golden Gate Bridge and Highway District wasting all this
government money for the ferry and bus system, and they got into
a big argument. Well, Gonzalez is getting justified every day
because the money that's being thrown away on that ferry system
is just unbelievable, and it's getting more so.
If it wasn't so serious, it would be laughable! They're
building three of these boats down in southern California at four
and a half million apiece; they were supposed to cost two million
a piece. Now they got the first one launched, and they went out
on the trials and the impeller of the Jacuzzi water jet pump won't
hold together. Now they've got to re-design the impeller. The
difficulty is they went to this exotic propulsion system that had
never been commercially used before, and it won't work!
But the worst part about it is, Leonoudakis took me to lunch
one day and started explaining it all and he said, "But what
difference does it make? It's all federal money. We get all this
moeny from UMTA (Urban Mass Transit Authority). We're getting
thirty- four million dollars from them. So, what do we care?"
I said, "Well, for Christ's sake! I thought I paid federal
income taxes, and I thought you did too, and I don't see any
sense in wasting that money, no matter where it comes from."
Now they're building this terminal over at Corte Madera.
That's the biggest, stupidest thing that's ever been done. They're
spending fifteen million dollars; they're trying to dredge a
channel through the soupy Bay mud. The Water Quality Control
District shut the dredge down because all they're doing is stirring
up the bottom and making the Bay waters all muddy and the mud is
filling in the channel again just as fast as they dig it out.
They're driving piles that go right down in the mud and out of
sight.
It's unbelievable the problems they're having, and they're
spending fifteen million bucks over there like it was nothing.
At the rate they're going, they'll spend thirty million before
they're finished, because it's a totally impractical project.
It's just unbelievable, and you'll hear more of that one.
210
Crowley: Somebody from K101 asked me to refute some of the things that
Dale Luehring of the Bridge District said the other day. So
I told them what I thought. I guess I shot my mouth off too
much, but they've got it on K101 this week, all the comments.
Feingold: When is that?
Crowley: 11:55 and 7:25 or something like that. It isn't worth listening
to because it's just relatively short. And Luehring told the
radio station, he said, "Why, when this is all finished, we'll
have a thirty-four million dollar "
[inaudible, tape ran out]
Feingold: Maybe some day they'll learn.
Crowley: They'll learn, the hard way. Here's a chart of the Bay. I don't
know how much you know about you don't have to know much about
anything to see how stupid this one is. [unfolding charts] This
is where they're going to run to. They're putting the terminal
in here [pointing] at Greenbrae. They're going to have to dredge
a channel to run these boats all the way through.
Now, this is all soft, soupy bay mud silt that's just like
water . To dredge a channel in here deep enough to take these boats
that will run in there at high tide or low tide or whatnot is a
multi-million dollar job, plus the fact that it'll slough in
every year and fill in, particularly if you run a big boat through
it. The wash of the boat will just drag the mud back into the
channel anyway.
If they were going to run up to central Marin County they
should have run to Point San Quentin, out in the Bay, where they'd
have to do a little dredging here but at least they'd be near deep
water. But here, they have to dredge a channel all the way out to
this point, and as the ferry runs back and forth up there, it will
fill the channel in.
Feingold: Why in the world did they choose that?
Crowley: You go ask Mr. Leonoudakis . Don't ask me. I don't know. See, we
have these islands up here [pointing]; we've had them since 1926.
I've played around them in rowboats and boats and sailed on it,
and I know what the mud flats are. This channel has been dredged
by the government for years and years and years. We used to bring
oil barges in, and they've had an awful time maintaining this
channel. I've seen that thing fill in, slough in, with mud for
years, and the cost to maintain this channel is very high. But
that's only for small boats. When they put a hundred and sixty-
five foot boat in there with seventy-five hundred horsepower, Jesus!
It's going to wash the channel away in one trip. It's just
unbelievable.
211
Crowley: This [Point San Quentin] would have been a much better location for
them and wouldn't have cost any fifteen million dollars. We run
over here at Tiburon, the Ferry Building; they [the Golden Gate
Bridge and Highway District] run over to Sausalito. But they're
trying to get into the central part of Marin. But people are not
going to use these ferry boats because if you get on a bus at Corte
Madera, Mill Valley or anyplace you're going to come over the
bridge, and you're not going to go over here to get in a ferry boat
to take a ride across the Bay. It's a horrible waste of money,
[folding chart] It's so unfortunate. And that's my pet peeve for
the day, currently. I've been hot on that for a long time.
Feingold: Yes, you've talked about that before. There was a big Examiner
expose last summer, I think, in which they listed all
Crowley: That's the one Dick Knowland did. He studied it and wrote article
after article about it, but nobody did anything about it.
A Long Term Waterfront Lease
Feingold: Another issue that Harbor Carriers seem to have been involved in
lately is long-term leasing of various of the piers.
Crowley: Yes. They have an office down at Pier 43. Pier 41 has been sitting
there for years, nobody doing anything with it, so Al Elledge
decided we ought to lease the pier from the port, the way other
people used to do, because we're putting together all our
dispatching operations for the tugboats and we're going to base
them down there.
We also set up an oil spill cooperative, Clean Bay, Inc.,
which the oil companies put together and we're operating it for
them. We want some place that's centrally located to have all
this oil spill gear like booms and clean up material and stuff
like that. We want to put them on the pier, Pier 41. So now
there's a big argument as to whether they ought to turn the pier
over to Harbor Tug or not. So I don't know what's going to come
of that, but I'll find out eventually.
Feingold: The Chronicle article made it sound as though there was a big
issue about whether the City should lease the piers one by one or
whether they should wait until there's an overall plan.
Crowley: Right, right. Well, it seems to me the City should make up its
mind what the hell they're doing with the port and have some sort
of consistent policy. But if we see something that we can use,
and we'd like to use it and the port's willing to rent it, we'll
rent it. That's a simple matter to resolve. [laughter]
212
Feingold:
Crowley :
Feingold:
Crowley:
Feingold:
Crowley:
Feingold:
Crowley:
One question that was raised in the article is why Harbor Carriers
was seeking long-term leases now when they hadn't in the past.
Because the Harbor Commission came to us and said, "We have changed
our policy from giving you thirty-day assignments to long-term
leases. If you want a long-term lease, here it is." A lot of
people all those restaurants on Fisherman's Wharf have gotten
long-term leases. They're talking about giving us a long-term
lease for the sightseeing activity down there at Pier 45.
So the point is that if somebody wants to give us a long-term
lease, we're perfectly willing to look at it. That doesn't say
we'll sign it. We want to see how much they're going to soak us
over the years and how long they want us to pay.
But they can't even get the ground rules together. One
meeting they decide on thing, another meeting they decide
something else. They change their minds, the papers write it all
up, it gets to be a political football and bounces all ovet the lot.
The port seems to be in that state at the moment.
It's terrible. They're in an awful spot. Alioto has a lot of
relatives at Fisherman's Wharf and I think there's a certain
amount of in- fighting and out-fighting, and Lord knows what all.
There's a lot of politics involved in it. Whether it's good
business to have a long-term lease or not, I don't know. But if it
is, and we can get one we'll get one; and if it isn't, everybody
else gets them why shouldn't we?
Have you met the new port commissioner?
No, I haven't. You mean the new port manager.
Yes, the fellow from Boston. I can't think of his name.
No, I haven't. He's got a very difficult job.
that job.
I don' t envy him
The problem is that the San Francisco waterfront is no longer
useful for most commercial shipping operations such as container
operations and so on. But they knew this twenty years ago, and
they should have been making plans twenty years ago as to how they
were going to phase this out and phase that in. But they've done
absolutely nothing now for years and just sat around. It's easy
to criticize, but in the political climate that has existed for
the last twenty years, it was difficult to do anything anyway.
So I can't blame them too much.
213
Crowley: The trouble is, Oakland has come in and built beautiful facilities
for container ships at BART's expense. BART paid the tab for
filling in all that land and putting a rock wall around there. So
then the Port of Oakland played it to the maximum and has come out
with a very fine container terminal, and the ships would rather
go over there than they would over here anyway .
214
XX THE GOLDEN HINDE
Feingold: The last thing I want to ask you about is the Golden Hinde. How
did you originally get involved in that?
Growl ey:
Art Blum and Al Elledge thought it was a good idea to build a
replica of the Golden Hinde. There had been some junk over in
London that was supposed to be like the Golden Hinde, but it
wasn't at all like the Golden Hinde. It was a lot of junk,
after they saw that, they said, "This is no business."
So
Then there was a fellow by the name of Hinks down at
Appledore in England who specialized in building replicas of old
vessels. For the Hudson Bay Company in Canada he built a replica
of the ship that Henry Hudson discovered Hudson Bay in. It's
been displayed all through Canada by the Hudson Bay Company as a
publicity stunt to get people to buy stuff at Hudson's Bay stores.
Hinks got ahold of Al Elledge and Art Blum and told them he
could build them a replica of the Golden Hinde. Then a lot of
people got interested in it. Norgard [name may be misspelled],
the naval architect, got very much interested and did a lot of
research work. So the thing went along and there were a lot of
people interested, and so Al thought it would be a good thing for
Harbor Carriers to get involved in order to attract people to
Fisherman's Wharf to bring them down and get them on the sightseeing
boats and charge admission to the Golden Hinde.
So they went ahead and built the thing and sailed it over
here, and it's gotten a tremendous amount of publicity. There's
a lot of interest in it and a lot of people like to see it, so
they go down and take a look at it. We think that it will be
just another attraction on Fisherman's Wharf which will help bring
people down there and help the overall tourist activity in San
Francisco and make it interesting to see something on the waterfront.
Feingold: The Chronicle made it sound as though the San Francisco Maritime
Museum had gotten up in arms.
215
Growl ey: This is that nut, Karl Kortum. Poor Karl is living two hundred
years in the past. He's an historian and he would like to live in
the olden times and so on.
A lot of the people in the waterfront community got together
and restored the Balclutha. Karl Kortum did some work on it too.
He thinks it's his boat, but really it belongs to the waterfront
community. He's had the Balclutha on display down there for a
number of years, and the Balclutha has been taking in about
$200,000 a year. That has been supporting Mr. Kortum and the
Maritime Museum and Mr. Kortum's activities in digging up old
stuff, which is fine. But when Elledge and Blum got the idea of
building the Golden Hinde, he thought that that would drag people
away from the Balclutha.
Well, I've talked to a lot of people that are experts on
Fisherman's Wharf and exhibits and so on, and they say that one of
the problems with the Ba.lclutha is she's way off to the eastern
part of Fisherman's Wharf and nobody goes down there anymore, and
the best thing in the world for the Balclutha would be to have some
more attractions down near the Balclutha which would help the
revenue of the Maritime Museum rather than hurt it.
Karl Kortum can't see that for sour apples. But as I said,
he's a historian; he's not a showman or a publicity man. He
doesn't know beans about how the amusement industry functions.
He's just got a bee up his bonnet that anything near the Balclutha
is a threat to the Balclutha. If he had any brains at all, he could
see that anything near the Balclutha would help the Balclutha
because you've got to get people down there before you can get them
to go on the Balclutha! So, it's going to be interesting to see
what happens, but I think the revenue of Balclutha is going to jump
up and Karl Kortum is still going to holler.
Feingold: Is the Hinde open now?
Crowley: She's over in the shipyard now in dry dock. She was open last
week, I think. They're dry docking and painting the bottom and
clean her all up she was towed over there today and then take
her back and put her on exhibit.
Feingold: When was this idea originally conceived?
Crowley: The first I got into it was in about 1968. We were already to go
ahead with it, and then we had that strike in 1969. So I said,
"Oh, the hell with it; they won't do anything on it."
Then, in about '71, I was over in London in connection with
insurance and this fellow, Hinks, came over from Appledore and
started talking about all the old timbers that he'd saved and
216
Crowley: got together and his great desire to do the job. So I said, "If
the guy's that sincere about the whole thing, maybe we ought to
have him do it."
He's done a fantastic job of woodworking. You'll never see
a vessel built like that again. But he had a bunch of old men
at his place that were skilled in this art and he had some old
timbers and so on, and if you tried to duplicate it, you just
couldn't do it because you couldn't get the timbers, you couldn't
get the men it just couldn't be done today. And he was accumulating
this junk for years because he always wanted to build a replica
of Sir Francis Drake's Golden Hinde . He got his opportunity, and
he did a fantastic job. It's amazing to see how that thing is put
together.
Feingold: I can't wait to see it myself.
Transcriber: Lee Steinback
Final Typist: Keiko Sugimoto
Proofreader and Indexer: Janice Woo
APPENDICES
217
APPENDIX A
Crow/ey Honored
Rising Star
Of Red Stack
By Sidney P. Allen
Financial Editor
HP HOMAS B. CROWLEY, president of Crowley
-L Lpunch and Tugboat Co., San Francisco, has just
been selected by the Secretary of Defense and the Joint
Chiefs of Staff as the recipient of the National Trans
portation Award. This annual award is for achieve
ments' that have contributed most to the transportation
and logistics industry in support of the national se
curity.
The silver trophy emblem will be presented to
Crowley at the annual award luncheon September 23
at the Hilton Hotel here during the convention of the
National Defense Transportation Association
The "Red Stack" tug fleet, keystone of the Crow-
ley organization, has of
course been a familiar
sight around this port over
the years. But not much
has been written about the
closely held, family-
dominated operation.
When founder Thomas
Crowley died a month ago,
at age 94, the ramifica
tions of the shipping serv
ices empire his son has
been piloting (and build- ,
ing) for the past decade
began to come into focus.
The Transportation
Award citation, plus a
brief look at the organiza
tion's new command post
at San Francisco's Pier 50,
make it apparent this is a
huge, complex, and highly
Thomas B. Crowley
innovative operation.
For instance, the famed "Red Stack" tug fleet,
now/operating under more than 100 different corpo
rate entities, numbers somewhere near the 200 total.
Some of these tugs are seagoing vessels ranging from
2800; to 7000 horsepower and designed for long-cruis
ing range.
They tow military vessels and equipment to
Southeast Asia, take assignments for coast-to-coast
haoirf, even make delivery of cargo to the icy reaches of
the ojl rich North Slope at Prndhoe Bay, Alaska, in
wfiut has to be one of the great transport accomplish
ments of history.
* * *
TT HERE'S DANGER and drama in the business.
-L Right now, for instance, a flotilla of tugs and
bargs en route from Prudhoe Bay back to Point Bar
row is trapped by ice. Hopefully the ice flow will per
mit passage of the equipment and several score of per
sonnel before summer ends.
Be that as it may, the Crowley organization and
specifically Thomas B. Crowley get credit for provid
ing another daring and vital transport service link.
It's one in a series.
In 1958, says the citation, Crowley took personal
direction of the first commercial resupply of military
DEW Line installations on the Arctic Coast of Alaska
and later on the Bering Sea and throughout the Aleu
tian island chain. This resupply reaches 46 of the most
isolated and inaccessible military facilities in the
And in 1959 he established the first large scale
container shipments by van-carrying barges between
Wesf Coast ports and Alaska. This was followed in
1963 by the Hydro-Train service through which the
important direct rail-water-rail link has been estab
lished". between the lower 48 States and Alaska.
The seat of this service inevitably became Seattle.
And now Crowley Northwest interests, which pi
vot around Puget Sound Tug & Barge, exceed the San
Francisco operations built around the old Shipowners
and Merchants Tugboat Co..
* * *
DOLLAR FIGURES and organization charts don't
tell all, to be sure. But they tell something.
Nobody says flatly, but there are indications the
organization has gone on. the line for upwards of $20
million just in the last few years on special new equip
ment primarily for the northwest work.
The staff is now estimated at bout 1000 based
from Alaska to San Diego. Headquarters here houses
the computer center for the works.
It also houses most of the 1000-plus corporate
seals of Crovvley-owned or dominated companies
some just one tugboat in asset size. I Included are seals
for Merritt Ship Repair, and Pacific Drydock & Repair,
both of the East Bay. and of course the Long Beach-
("atalina as well as Tiburon and Angel Island Ferry
Companies. I
Parenthetically, the old original Shipowners and
Merchants Tugboat Co. is a stock company, but Crow-
ley family holdings dominate the list of about 100
shareowners.
And the organization has applied to start Binnacle
Insurance Co., to provide its own admiralty insurance
coverage, naturally.
Award winner Thomas B. Crowley, incidentally,
observes his own 36th birthday this week. Maybe gross
business this year will approximate S36 million in hon
or of- his anniversary.
San Francisco Chronicle, September 1, 1970
218
APPENDIX B - Thomas B. Crowley's testimony to the Interstate Commerce
Commission re: rate increase request by Alaska Hydro-Train,
April 23, 1973
My name is Thomas B. Crow ley. I am Chairman of the
Board of Puget Sound Tug & Barge Company, and through
various corporations, I personally own over 2/3rds of
all the Crowley Companies. My sisters own the remainder
of the stock up to about 97% of the total ownership of
rhis total group of companies. I make the decisions as
tc investments in new equipment and whether we are getting
a 'fair" return on invested capital.
My father started the company before the turn of the
century and was active up until a few years ago, and
finally died at the age of 94 in 1970. I have bean working
full time in the company for forty years. For the last
thirty years, I have been studying the returns on the
investment made by these various operations in these
various companies. 1 am thoroughly familiar from a
practical point of view of what is meant by a fair return
investment to a "prudent investor".
,
The recent, history of .capital investment in water trans
portation to Alaska is dominated by many investments made
by Alaska Hydro-Train in new tugs, new barges, transfer
bridges and other investments that have been made in this
-rade. Since I am supposed to be the "prudent investor"
I can look back and see how prudent or imprudent I have
been and I can look forward to see what rate of return is
necessary to put me in the "prudent" class. I, therefore,
consider myself an "expert" but only from a practical point
of view, and not a theoretical economist.
At this point, I would like to say thah revenues and
expenses for the Alaska Hydro-Train operation are primarily
an accounting problem having to do with facts that can be
aasily settled between two sincere parties. This also
applies to the amount of capital invested in this trade
because all t'r.2 equipment has been purchased in recent years
at competitive prices and the facts stand for then'.selvas.
The only real issue is what is a fair rate of return on
this capital that would be expected by a prudent investor/
vouli still be enough to give the continuing service to the
people of Alaska that the shippers themselves seeir. to T .;ant ..
and finally not unduly burden the economy because of
excessive profits shared with Uncle Sam. I will confine
my remarks to this subject and let the accountants quibble
with anyone that wanes to quibble about the r.uir.e cical facts
of revenues, cos ts and investment.
219
-2-
History
Since the formation of Puget Sound Tug & Barge Company
in 1929, we have hauled cargo to Alaska on barges towed
by tugs and also performed miscellaneous towage in all
Alaskan waters. In 1958 we started hauling cargo from
Seattle to Alaska for the Coastwise Line, a water carrier
wr.o ran up and down the Pacific Coast and to Alaska.
They felt that it would be more economical to move their
cargo from Seattle to Alaska by barge. Soon after they
we~- broke and we decided to enter into the Alaska common
carrier transportation picture with Puget Sound Alaska
Van Lines because we could perform a much better service
th an any of the then existing carriers, with new, modern,
ingeniously designed floating equipment. The Alaska Rail-
read particularly wanted someone to move large numbers of
containers between Seattle and Seward but none of the then
existing carriers could or would perform this service.
We designed and built ocean-going 272 ft. steel flat
barges that could carry 300 24 ft. containers at one time
with the understanding that the Alaska Railroad would
acquire a large number of containers that would enable us
to develop the full efficiency of these barges . The
Alaska Railroad failed to acquire any substantial number
of containers because of budgetary problems. We went out
and acquired 600 new containers plus two large cranes for
Seattle loading and one large crane for Seward unloading,
plus miscellaneous container handling facilities and
machines. We used two new high-powered tugs built by
one of our San Francisco companies in 1958 and went into
the business .
The major competition at this time was the Alaska
Steamship Company which served all ports and places in
Alaska but had refused to increase the container carryinc
capacity of their ships. The other carrier was the
Alaska Freight Lines that furnished service direct from
Seattle to Anchorage in the summertime and came into
Seward in the wintertime. Alaska Freight Lines had
performed various daring and innovative scherr.es of
transportation in Alaska, but ;;as faced vvita the same
problems that the traditional Alaska carrier always had
with an excess of expenses over revenues, and was rapidly
getting into serious financial difficulty. Shortly after
v/e commenced our service the Alaska Freight Lir.es was taken
over by Alaskan interests who were large shinsars and they
220
fait that they could make a substantial return on investment.
After these shippers ran Alaska Freight Lines for a year or
sc, they came to us and said they were losing money and
wanted to get out, and we went into thair entire financial
status at that time and decided against buying them out
because there were too many liabilities involved and we
would be buying nothing but war surplus junk equipment
consisting of wooden barges and tugs and badly used
container and trucking equipment.
Due to the extremely high costs of stevedoring and
operating marine equipment, we were not making anywhere
near an adequate return on our container service, so decided
tc ret out as best we could. The opportunity arose when
the American railroads decided they wanted a roll-on/roll-off
railcar service from Seattle to Alaska and we commenced to
ccrvert our activity to this type of service when Alaska
was struck by a serious earthquake in 1964. Obviously, we
suffered substantial losses, but proceeded with our plan
to convert to roll-on/roll-off railcars under the name of
the Alaska Hydro-Train.
Fortuitously, we were lucky to be able to sell one
of our new container "barges to a company that needed a
pipelaying barge immediately for laying pipe in Cook Inlet
for the oil fields. Naturally, we sold this barge at as
high a price as we could get, which was substantially in
excess of its original cost and later on we were able to
sell two more of our new van barges to a large cement company
because we were able to devise for them an economical
automated bulk cement handling facility on these two new
large capacity barges that substantially reduced their
transportation costs on bulk' cement. This transaction was
a charter with an option to purchase, which was exercised,
and wa were able to sell these barges at substantially more
than our original cost. The fourth barge was fortuitously
chartered to a large mining company who after three years
exercised their option to purchase and we also made a very
good sale on this piece of equipment for an amount in
excess of our original cost. The profits from these sales
were due to the fact that we had the equipment inmediatelv
available when it was needed and that inflation had increased
construction costs to such a degree that with these two
factors we could make a substantial amount of money from
the sale that helped us to finance the switch to the
roll-on/roll-off system of the Alaska Hydro-Train.
221
-4-
We had felt that the Alaska Hydro-Train would be
extremely profitable by eliminating stevedoring costs and
i_- 1963-1964 we constructed four innovatively designed
23. ft. roll-on/roll-off railcar barges. Shortly after
the earthquake, Sea-Land purchased the practically-bankrupt
Alaska Freight Lines from the shipper-owners and started
in the common carrier transportation service to Alaska.
We vere extremely lucky to be able to sell our van barges
at such high prices and we were also lucky to be able to
sell two of our large cranes because the Japanese had
started exporting logs from the United States and these
crar.es were badly needed to load the Japanese shios with
logs. We also were lucky to sell containers and straddle
trurks which were than high in demand by the expanding
ccr.-ainer service and were exceedingly fortunate in getting
o-- with a whole skin.
After operating a few years with the 350 ft. barges ,
we built two 400 ft. barges in 1965-1966. Lady Luck
s -ruck again, because in 1967 and 1968 we were able to
sell our four 350 ft. barges to various oil drilling
concerns that were then caught up in the tremendous
demand for floating exploratory drill rigs throughout
the world and they were converted to center-hole
exploratory drilling rigs. The sale of these four 350
ft. units, again at a very substantial profit,- enabled
us to build a second group of 400 ft. barges in 1968-1969.
In these two years we built four of these 400 ft. car
floats but in 1967 we had a total loss of one of the 400
ft. car floats built in 1966. She was washed ashore in
a very severe storm in the Gulf of Alaska and was a total
loss in December, 1967.
With the profits from the sale of the 350 footers,
we were then able to finance the construction of five rrore
400 footers in 1969-1970, and scrne of these were used for
pipe carrying barges and some for car floats. In 1970
we built four more 400 ft. barges for the carriage of pipe
to the North Slope with the idea of the eventual conversion
to car floats, but due to the lack of return of the Alaska
Hydro-Train service and the decreased demand because of
the halting of the pipeline, v;e have put three of these
barge 
