Wharton by the sea; the federal government spends millions to train shipping executives at the U.S. Merchant Marine Academy.

Wharton by the Sea

It looks like a military academy. Walking through the gates at the U.S. Merchant Marine Academy at Kings Point, New York, visitors see the undergraduates, called midshipmen, march in crisp uniforms and salute like their brethren at the U.S. Naval Academy in Annapolis. Overlooking Long Island Sound, the handsome campus is dotted with sea-weathered anchors and portraits of war heroes.

It sounds like a military academy. When the midshipmen stand stiff at inspection, there are echoes of a Lous Gossett movie. "I can't hear you!' "Sir, no sir.' "I can't hear you!' On command, freshmen, called plebes, shout the alma mater or bark out the King's Point motto--acta non verba, "deeds not words.'

And it sure does feel like a military academy. Midshipmen are shaken by surprise bunk checks in the middle of the night. For scheduled inspections they lose sleep, too, pulling all-nighters to wax floors, scrub toilets, and polish brass. That's a breeze compared to the brutal two-week indoctrination, when plebes have on occasion been ordered to march to the garbage room, rifles in tow, hop on one foot and chant, "ha ha ha.' Little wonder that Kings Point officials boast that the academy "out-militaries the military.'

Even though it is a federally run, four-year military service academy, Kings Point isn't West Point or Annapolis. Although it was created during World War II to train a special breed of commercial sailor who could guide ships through dangerous waters, it has become a kind of business school with calesthenics. More than three-fourths of its 1986 graduates took jobs in civilian industries, not the military. And the majority of those are ashore. An academy grad is more likely to earn a nice living designing financial models for a shipping consulting firm than preparing for battle on the high seas. Of course, Kings Point does have one thing in common with West Point: the federal government foots the bill. This year, the Department of Transportation, which oversees the academy, will spend more than $22 million for what is little more than boot camp for the shipping industry.

The presidential yacht

While West Point and Annapolis require their graduates to spend five years in uniform in exchange for their free education, Kings Point graduates don't have it so rough. Before the class of 1986, they were required to serve in the reserves of one of the armed forces, usually the Navy--a commitment of a few weeks a year. When it came time to choose a full-time job, they had only a "moral obligation' to go into the maritime industry. A recent alumni bulletin shows just how obliged some members of the class of '84 felt. One merchant mariner fulfilled his patriotic duty by starting his own horse ranch in Idaho, another by writing for a newspaper. Courageously, one patrolled the halls of Congress as a lobbyist for the shipping industry. Verba non acta.

Concened that Kings Point grads were parlaying their free educations into lucrative, dockside careers, Congress imposed post-graduation requirements for all cadets beginning with the class of 1986. They still have to do a stint in the reserves. Additionally, they must maintain their Coast Guard licenses, a nuisance that doesn't even require going to sea. But Congress added a tough new provision: either serve five years in the armed forces or in a "maritime-related career.'

As you might expect, many a merchant marine has shown a seaman's resourcefulness when choosing that related career. One salty dog is working in the maritime insurance business in Chicago. Another did a tour of duty as chief engineer of the presidential yacht.

In typical fashion, Congress set out to tighten a requirement and wound up making it as vague as ever. The definition of maritime-related has so many loopholes that DOT officials don't know whether or not to count lobbying Congress for shipping subsidies as a tour of duty. "That's a grey area in the middle that hasn't gelled to move one way or the other,' says Arthur Freedberg of the Maritime Administration.

Little wonder, then, that only 17 percent of the class of '86 has headed for the life of push-ups in the armed forces. Only 20 percent actually went to sea as merchant mariners, in part because of the lack of seafaring jobs. (U.S. shipping ranks twelfth in the world behind countries like Panama and Liberia.) So more than half the class wound up in civilian jobs on shore, mostly as managers and engineers with shipping and oil companies, naval architectural firms, and defense contractors like General Dynamics.

But don't think that the martial training--plus 11 months of touring at sea, and compulsory shouting at football games--is somehow being wasted in the world of business. Since Temple, Barker, and Sloan, shipping consulting firm, asked Jeff Drake '86 to "come on board,' as he puts it, he has felt prepared to deal with pressured situations: "If I have an hour to finish a report, I'm able to do it and not get rattled.' Eric Mensing, Kings Point '81, now a manager in government sales at American President Lines, Ltd., says Kings Point did a "good job preparing me for the business world.' And, he adds, it teaches you about "taking orders, being on time, chain of command.' American President Lines moves some military supplies, but mostly the stuff of which trade deficits are made, like imported designer clothes and VCRs.

Twenty-three-year-old graduates working as engineers and in management positions earn close to $30,000. At sea, the average starting salaries are in the $30,000 to $35,000 range. Those who take their first jobs sailing with Exxon earn in the $40,000 range with six months vacation. Why send your kid to Brown?

Just as helpful as the marching drills, though, are the business school courses. Kings Point has become Wharton-by-the-sea. The core curriculum is still a tough regimen of math and science courses, but there are plenty of management courses, like Industrial Psychology, International Trade and Finance, and Ship Chartering and Brokering. By 1989, students will be able to major in transportation dealing with the intermodal system of moving goods by ship, rail, and trucks. It's a discipline that could help a graduate land a good job at a cargo company.

Tugboat executives

Since they're not exactly on the front lines of national security, Kings Point officials have become self-conscious about the academy's existence. In a letter to alumni in April, the superintendent of Kings Point, Thomas King, conceded that "we must in fact run very hard just to maintain our relevance.' In what many see as a move to impress Congress, the academy has clamped down on discipline during the past two years, according to several cadets. An active-duty officer from the U.S. Marine Corps has even been assigned to the campus to give a course on leadership.

Even the academy's published statement of mission seems to vacillate. The first clause in the 1981 version was "to graduate outstanding young Americans with definite ambitions to serve as leaders in the United States Maritime Industry.' Today, the first goal listed is "to serve the economic and national security interest of the United States. . . .'

Adding the words "national security' brings the mission in line with the academy's strategy to promote itself as a bulwark of freedom. Kings Point and the Department of Transportation have argued that the cadets are needed to import critical strategic elements and to provide the nation with a ready corps of officers to man merchant ships in time of emergency.

That's a worthy goal. But how many strategic minerals do you end up carrying when you push paper for an engineering firm? Reading Kings Point literature you would think it's a unique institution in American life. Yet besides Kings Point there are six state maritime academies providing a pool of trained sailors in case of emergency. Kings Point graduates 150 midshipmen each year; the six state maritime academies, about 700. In contrast to Kings Point, the state academies charge tuition. And though they don't require their graduates to enter the armed forces, the state maritime schools still provide as many sailors for the Naval Reserves as Kings Point. "If they closed the doors on Kings Point, the state academies could probably do the job,' says Rudy Cassani, counsel to the House Merchant Marine subcommittee.

If they closed down Kings Point and there weren't enough trained officers for the maritime industry, the shipping companies would, arguably, have to beef up their own training programs. "I find it [King's Point] extremely on the far edges of what's necessary for national defense,' says Annelise Anderson, a senior research fellow at the Hoover Institute and former associate director of the Office of Management and Budget. But even assuming that a federal academy is needed to sustain that pool of officers, it's hard to see the merit of having merchant marines fulfill their service requirements from desks in Chicago.

Cassani says that despite "the question of why we spend federal money to pay Kings Point to aid the commercial sector,' he favors keeping Kings Point federally funded because "it is a national symbol.' In an advertising supplement commemorating its fortieth anniversary in 1983, Kings Point officials seemed to recognize the importance of such symbolism, sprinkling the pamphlet with quotes from President Reagan, Caspar Weinberger, and Dwight D. Eisenhower.

Included, too, were the words of that naval legend Thomas E. Moran, president of Moran Towing Corp. The towing industry is "particularly indebted' to Kings Point, he noted. And William Hubbard, a senior vice president for American President Lines, said, "We have looked to the U.S. Merchant Marine Academy over the years for not only our key ships' officers, but for a large number of executives who combine unique academic training with solid experience at sea, making them well-equipped to help us manage a growing, modern company.' Maybe this is what they mean by military-industrial complex.

One likes to see government and business working in concert. But it raises the question of why we don't also set up military service academies to lead the sagging steel industry or the depressed oil industry--both of which are of critical importance to us in wartime. Even the shoe industry has pleaded for federal help on national security grounds. Perhaps some 5 a.m. marching drills would build character and competitiveness at Florsheim.

At Kings Point, what you're lift with are the trappings of military life and little of its purpose. Then again, what better way to prove that you're not just another subsidy for the shipping industry than to shout "I can't hear you!' at quaking cadets. While many at Kings Point think they have found the hidden value in all those hours shouting "ha ha ha' in the garbage room, one can't help but think that it is the American shipping industry that gets the last laugh.