New-York tribune., 1919-03-28


charges.
at cannot have escaped notice that
the assistance | propose to render with
the Merchant Marine Developme
Fund takes the place of the govern
ment backing for the development Of
new trade routes in the national inter
est, which is the strongest argument
brought forward by the advocates of a
government-owned and operated mer
chant marine. Yet not one cent of this
fund is drawn from the public treasury.
Instead, the money represents profits
forborne by the government, which IS
not entitled to earn profit while en-
gagged in developing the industries of
its people. Neither can it be said that
the money will be taken from the
steamship business, for in no case
will the operators be charged more
than the current market rate for sim
liar service. whether the service rem
dcrcd be insurance or credit.
New Legislation Required
"In order to make this plan effective
it will be necessary to ask Congress
for three statutes. One of these
statutes should authorize the incor-
poration of steamship companies under
Federal charter along the lines / have
indicated. Another statute should cX-
tend the emergency power to carry
hull and machinery insurance in the
Shipping Boards fund so that this
function may continue to be performed
by some designated government agency
so long as the government may con
tinue to hold an equity in any of the
vessels it now owns OF has under
contract. The third statute should re-
wise the present status of vessel mort
cages so as to make them attractive to
bankers and other investors.
"The security Of a mortgage may be
imperllcd by loss or damage to q
vessel. or by the attachment of su-
perior liens Such liens can generally
be classcd as those arising from debts
and from liabilities. The most lmpor-
tant ones, resulting from debts, arise
from the furnishing Of repairs, sup
plies or other necessarieS i'll the mann
tenance and operation of a vessel. in
Guiding pilotage, towages, port charges,
crews wages and other contractual
obligations. Liabilities creating liens
result principally from collisions,
standings, salvages. general averages,
cargo damages and personal injuries.
Practically all such liabilities can be
insured against by the standard form
Of marine insurance policies and by
protection and indemnity insurance.
"Such record and Endorsement would
be made a condition precedent to the
validity of the mortgage as against al
the world save the mortgagor and
mortgagee If then the owner, master
or agent of any vessel apply for the
furnishing of repairs, supplies and
other necessaries, or for the rendition
of contractual services Except Tor
the services Of scamcn) upon the mort
gage Of the vessel. the proposed credit
or could Immediately advise himself of
the existence of any mortgage by eX-
amning the ships papers, and could by
telegraphic means communicate with
the collector of customs OF the nome
port of the vessel and ascertain thc
amount remaining unpaid upon the
mortgage.
Curb on Creditor
"With this information the proposed
CREDITOR could determine for himself
the advisability of extending the re-
questcd credit If he did so and
foreclosure of the mortgage upon the
vessel should destroy his security, he
would be without grounds of complaint
against the superiority of the mort
gage, because he would have furnished
the credit with full knowledge of the
superior lien of the mortgage.
II would also vest in the United
States District Court exclusive jurls~
diction over the foreclosure of the
mortgages, iHSteau oi icaNiii iiS ,'e hioi
gagees to their present remedy in the
state court. This would make the prac
tce uniform and therefore greatly en-
hance the security value Of the mort
gage by providing a speedy and simple
method Of foreclosure 1t would also
avoid the Inconsistencies, delays and
uncertainties of state laws and pro
cedure which now exist. BY and large,
the enactment of statute such as ]
have outlined would make of a mort
gage on American vessel property
security fully as good as, and in some
respects better than, a mortgage on
vessel property sailing under any other
flag on earth.'