New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1916-08-22

Cash on October 31....... 5s,75o,ooo
Total. Sis4,s5o 900
Less .................... 37,75o,0oo
Net assets. '.'sio''iV"'"""
From the point of view Of the dis
orepancy between assets and Liabilities
there is no change. There are, now
ever less bonds to pay interest on; but
H., rate Of interest is increased from
~ and 3 to per cent.
Future Earnings.
Rut emphasis is laid on future earn
ings. II is stated that If the war iasts
until April 1, 1917, the addition to the
Profits is not likely to be under slo'-
COO 900. Even then it would require
over $4,000, 900 for a proper balancing
CT assets and liabilities. II the war
should last till the end of June next
there is little doubt that the Mercantile
Marine will become fully solvent
These calculations are made on the
bosis of the carrying trade being OF the
same nature as at present. Inere Is
sufficient data TO hold that for time
at least Allied purchases here will need
all the shipping available. 1t is pure
gamble to speculate on the period dur
ina which it will last.
Suppose, however, that the war does
not last till April next; what, them Is
the contingency? We know that the
present ocean freights cannot last Tor
ever. During the four years 1910 10
1919 there was a boom in the worlds
trade. The balance of earnings avail
oblc m all lines, excluding the Leyland
and National lnes-after paying inter-
est on bonds-was s4,2I6,573, s4,2lo,-
27O. s3.7s7,91 and s5,7i6,95s, respec-
lively. for 1910, 1911, 1912 and 1918
The tonnage at the close Of lsll was
I 200. 900; in 1914, the total, including
now ships. was .425 900 tons. At pres
emf. the total, including the two Pacinc
Mail ships bought last year and the
ships under construction, is only l.
45o 900 tons-because number or
ships have been sunk. The tonnage
total therefore, remains the same as
before the war. !
Will Freights Hold Up!
II is asserted that freights are bound
to keep at a higher level after the
war than before. II is argued tnat
2.s12.644 tons have been destroyed dur
ING the last two years. This is very
small percentage on the worlds total
of 4S0OO,O00 tons. But we should not
fail 10 rote that in the American ship
wards alone l,225,000 tons OF steel
merchantmen are now under construc-
ton. as against 27l 900 tens in 1872.
Apart from the fact that the German
ships that are now tied up will be free
after the war, there is the further
important fact that, according to COM
petent authorities, Germany has under
construction over 100000 tons of mer-
chantmen in her yards. England is not
doing as much as she might have done
but for ler imperative naval needs.
But we may rest assured that she IS
now replacing 100000 tons at least
out of her total loss of 100000 tons.
The neutral countries have also been
busy. Where, then, is the threatened
shortage of shipping? Superficial OBJ
servers ignore the fact that England
has Communicated 60 per cent OF her
shining for war purposes; France has
Communicated 10 per cent, while Ger
man ships to the extern. of about o.
1000 tons are shut up in neutral and ,
German ports.
Earnings of shipping depend on the
trade. Whatever difference Of opinion
NAV exist about the volume Of In
ternational trade after the war, there
is a consensus of opinion that 1t IS
not likely TO be larger than the record
world trade of 1913. II the tonnage
is likely TO be about the same as IN
1914. we may expect, at TIE highest, the
revenue OF the year before the war.
If we place the earnings at SlO,0OO,OOO
from all sources, and deduct S2,4OO,Ooo
due on the bonds, we are left $7,60O,OO
for depreciation, and dividends on pre-
ferred and common.
The Mercantile Marine Company's
prosperity is not only bound up with
the war at present, but its future is
very much dependent on the war, and
the Allies buying at the present rate
during the whole period. Even grant
ING that the war lasts long enough
TO pay the overdue interest on the pre-
ferred shares, there is not much to look
forward to after that.
There are various reasons why any
reorganization which does not involve
fundamental changes should fail. The
chief among them is that the company
is over-capitalized. The next is that,
as holding company, it has little
voice in the management of the COM
panies whose stock it owns. Lastly,
it is in an extraordinary position Of
holding stocks and having not the ordi-
nary proprietary rights.
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