Prior to the passage of the act, the U.S.'s merchant fleet was primarily made up of ships which had been built as part of the Emergency Fleet Program at the end of World War I. Because of technological advances in hull construction and propulsion machinery, these ships were rapidly becoming obsolete and non-competitive in the commercial market and of limited value to the Navy as auxiliary support vessels. Additionally, U.S. shipyards had been suffering atrophy from more than 15 years of little to no new construction with either Navy nor commercial orders and it was felt that rebuilding the commercial shipbuilding capacity in the U.S. was in the nation's strategic interest.