The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1914-08-20
U. S. TOPURCHASE
MERCHANT Ships
White House Conference De-
cides on $3O,OOO,OOO Bill
to Move Crops.
WILL ISSUE WAR RISKS
Interesting Question of Rights to
Garry Contraband Raised
by Decision.

The administration has decided to
establish a government-owned merchant
marien to help care for the overseas
trade in the present emergency.
A bill will be introduced in Congress
today, with the approval of the Presi-
dent, authorizing the government to
purchase merchant ships up to $4,000
900. Funds for the carrying out of the
project will be provided by an issue of
Panama Canal bonds. A corporation
will be organized similar TO the one
through which the Federal government
now controls the Panama Railroad. The
United States will take at least 81 per
cent of the stock, and the balance NAV
be offered to the public. If it is not dis
posed OF, the government itself will take
all Of the stock.
To Push Through Bill.
The administration bill will be rushed
through Congress. There are reasons
TOT believing that the purchase OF the
North German Lloyd or the Hamburg
American liners is contemplated.
Administration leaders are firmly con-
CinEed OF the propriety OF their plan
Al the same time it is apparent that
the success Of the Administrations pro-
gram for moving American products TO
foreign markets is going to depend to a
considerable extent upon the view taken
oy the belligerent governments. particu-
larly those Of Great Britain and France
which together control the seas.
The administrators plans were agreed
upon at a White House conference, at
tended by the President, the Congress
leaders. and Secretary of the Treasury
McAdoO. 1t is stated aUthoritatively
that the purchase of the ships is de-
signed especially for use in building up
trade with South America. as well as re-
heving the present glVt In American mar
kets by furnishing avenues Of transpor-
tation to Europe.
Under the terms OF the bill to be intro
duced today. a shipping bureau will be
created in the Treasury Department, con-
sisting OF the President. the Secretary OF
the Treasury. the Postmaster General.
and the Secretary of Commerce.
Private Capital DIIatory.
The government decided to enter upon
this undertaking only after II became ap-
parent that there would be a disastrous
delay in any attempt to organize an ade-
Quate merchant marine through private
capital. 1t is understood that private in
terests insisted upon a government guar
antee on the bonds in any venture which
contemplated taking over the big foreign
merchant vessels.
The fact Of the matter Is that private
capital has been backward in regard to
shipping investments. not only because Of
the extraordinary risk involved. but the
under which the United States
Is labortng on account OF Its navigation I
laws
This statement was issued by Secre- /
tary to the President Tumulty after the !
White House conference:
1T was recognized that the present |
called for prompt action to re-
Iieve a situation which can be relieved
II action is promptly taken. 1t was ,
agreed that a bill should be introduced |
IN Congress providing for the insurance |
Of war risks by the government
In addition to the agreement OF
opinion as to the insurance bill, there
was an extensive discussion Of the .
best means for Immediately providing
ships to carry goods now waiting for
the markets. It was agreed that
bill should be introduced which should
provide for the purchase of an ade-
luate number OF ships by the govern
nent, and their operation, through a
controlled by the govern
ment"
The President was prompted to
move, 1t is said, by figures which show
ID that the conditions in regard to the
movement Of grain already were be-
coming acute, and that 1t was neces-
'ary for the government to act quickly.
Question of Neutrality.
The President also was actuated. it
was said. by a desire to have the gov
itself deal directly with ques-
lions of neutrality and OF contraband
which may be raised against merchant
,argoes shipped from the United States
Turing the war.
Administration officials contend that
he sales are entitled to recognition If
hey are bona fide transfers of control
II the vessels.
Cone Johnson, solicitor Of the Depart
nent of State. f. of the opinion that not
wen the provisions Of the Declaration OF Il:
london stand in the way OF full recogni- !
ion.
The principal product which the United
tates officials seek to transport under
his plan is wheat, which has been de-
Jared by Great Britain and Germany
o be contraband of war in the present
truggle. This raises some apprehension.
/ IL pointed out that Great Britain and
rance WOulQ nave Lne right 10 seize
american government ships carrying
heat to Germany and Austria
For the United States government to
AIRY food to the countries on the one
de in the war and not to the other
regarded as a highly impossible situa-
on. 1t is declared here that II, as the
announced. It considers
10 lending Of money to the belligerents
Y American bankers Inconsistent with
10 true spirit OF neutrality" Il most
,rtainly could not itself engage in car
ing contraband OF war to one Of the
elligerents to the exclusion OF the
lemies Of such a belligerent
In diplomatic quarters the opinion gen
ally expressed was that the United
tates could hardly hope that the belli-
srents would either recognise ne trans