New-York tribune., 1919-03-28
freight rates charged by common car
ricrs by water In interstate commerce.
How Control Will Be Had

rlcrs by water in interstate commerce.
How Control Will Be Had
"Therc remains to be provided means
Tor preventing the impartial imposition
of unjustly high rates upon all com
merce moving into or out of the United
States. This is manfestly beyond the
power of legislation at the moment and
1T is proposed to secure such control by
agreement inserted in the bill Of sale
under which the ships are released, and
by making such control a condition of
participating in the benefit of the mer-
chant marine development fund.
1T has been recommended that the
ships be. sold at prices which fairly re-
fleet the world market for similar ton
mage. If higher price were fixed the
purchaser would not be able to COM
pete with the ships of other nations
carried at a lower rate. If lower
price were fixed government property
would be sacrificed, and at the same
time a blow would be struck the
American shipbulding industry by the
low value at which ships in operation
would be carried os the operators
books. The sale of the vessels at the
world market price would be fair to
operator and builder alike. Also, it
would automatically fix the write off
which must be made on account of the
excessive and necessary war cost of
the ships"
lnstallment Upon Delivery
"A substantial payment should be
required upon the delivery of the ship.
The best interests of the government.
the operator and the American mer-
chant marine demand that this initial
payment should be at least 20 per cent
of the price of the vessel Subsequent
payment should be made as follows
"Beginning of the first year 25 per
cent, second year 10 per cent, third
year 8 per cent. fourth year per
8 per cent. seventh year per cent.
eighth year 8 per cent, ninth year
per cent, tenth year 8 per cent.
This schedule provides for the pay
ment of 60 per cent of the purchase
price in the first five years and 40 per
cent during the last five years Such
payments would establish the purchas-
ing companies on q firm basis, and
would serve to discourage any pur-
chaser who might contemplate reaping
large profits during the first two or
three years, with a mental reservation
to retire as soon as present high freight
rates decline and profits cease to be
abnormal. AT the same time these
terms are not so severe as to call for
any financial assistance beyond that
which usually is accorded reasonably
well-managed commercial enterprises
IN this country.
New Companies Needed
1T is important that all ships be
sold on these terms, and on no others
If we We're to deviatc from this prin-
ciple we would place the big, powerful
and experienced operator in position
OF such great advantages that new
blood and brains hardly would dare
venture into the business. The Amer
lcan merchant marine needs enterprise
ing new companies, financially able to
begin operations only upon a small
scale, but determined to grow to great
size and prosperity by dint of pcrse-
verance and grit
"Simult ltaneously with the purchase of
vessel, the purchaser should be re-
CURED to provide hull and machinery
insurance for his equity with an Ameri-
can marine lnsusance company. AS ad-
dltlonal payments are made, the equity
they represent should be insured in
the same manner, until 100 per cent of
the hull and machinery insurance has
passed into the hands of private Ameri-
. can insurance companies.
ut Is assumed that the money will
be placed IN an approved depository
where it will draw interest at per
cent, compounded semi annually. Re
membering that any Disbursements
which may be made during the first
few years will be returned during the
last few years, it will be seen that the
size of the fund for the ten-year pc
riod will be $83,533, ,17O.70.
Government Backing Replaced
The purposes for which this fund
may be drawn upon and the conditions
under which operators will be entitled
to aid already have been indicated
1t is impossible at this time to 10 into
greater detail, except to say that in
view of the peculiar character of the
ship operating business and the ex-
traordinary trade conditions likely to
prevail during the next we years, the
trustee should be allowed to use CON
siderable discretion in the administra-
ton of the Merchant Marine Develop
ment Fund Also. it is important to
point out that, although new accretons
TO the fund will diminish year by year
the amounts returned to it by the com
panies which have weathered the
stormy periods of their careers can be
relied upon to keep it practically in
tact The only losses which need be
considered are such as may arise
thronrl, c1