The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-03-28

INFINITE detail and infinite technique vet
u calls for grcat courage and wide
ranging mag indtiJn.
The formalitlcs necessarily surround
ing Government operations are not
suited to the successful conduct of n
shipping venture, requiring quick de-
cision, sudden reversals of policy and
the assuming OF great hazards. The
successful shipping man in an emergency
consults no book of rules. He consults
only his wits. SO, II Is commended that
only under private operation may we
expect n further increase in the number
OF small. independent, skilful ship oper-
ators which we shall need more ana moro
as the American merchant marine ex-
pands Its activity upon the seas.
To Sell at World Market Price.
"A careful consideration Of these argyll
ments has led me TO the conclusion that
the ships should be sold to and operated
by American citizens under no restric-
tons other than the terms of the bill Of
sale and the fixation of maximum freight
rates. either as provided in section IS
OF the act approved September Z, 1916,
or as may be agreed by the Government
and the operator in specific instances
THE ships should be sold at a price
which fairly reflects the current world
market for similar tonnage.
Twenty-Five per cent of the purchase
price of each ship should be paid down
the remainder falling due and payable
In graded annual instruments over a
period not exceeding ten years The Gov
eminent should take and hold a mort
gage for the unpaid balance, charging
interest thereon at the customary COM
mercial rate OF 8 per cent One-fifth
of this interest, representing the differ
ence between the customary Government
,, interest of 4 per cent. and the customary
commercial rate, should be paid into a
merchant marine development fund TO
be described hereafter.
THE purchaser should be required to
agree to insure and keep insured with
an American marine Insurance company
his equity in the vessel, and because the
American marine insurance market has
not at present sufficient resources to
underwrite all the vessels the Govern
-ment has to sell the Government should
carry In its own fund. AS at present, but
for purchasers account, hull and ma
chnery insurance covering that part of
the vessel for which payment has not
been made. Our experience in operation
/ shows that the Government can carry
this insurance for at least per cent.
less than the open market rate. However,
i
be charged and that the difference be
paid into the merchant marine develop
ment fund.
Government to Have Directors.
at In understood that no transfer OF
| a vessel to foreign registry should be
| permitted without express permission Of
! the Government
Each purchaser who wishes to oper-
| ate IN the foreign trade should be obliged
to incorporate under Federal charter.
| the necessary legislation for which
should be passed by Congress without
| delay. Such a charter should provide
that no stock shall be issued in excess of
| the money value actually paid in on ves-
sci property and that no stock can be
| Issued or transferred to an alien.
1T should also provide that one mem
| Der of the board OF directors for each
| company shall be named by the Govern
mont. This director should draw no
salary either from the steamship
| corporation or from the Government. He
should receive only the customary di-
rector's fee for each meeting he attends.
| 1.-THE same legislation should provide
for periodical meetings OF these Govern
| ment named directors in the city of
Washington, where they will constitute
an official body which will confer with
and advise the Shipping Board or other
designated Government agency upon
problems arising In, or questions affect
| ing the welfare OF. the American mer-
chant marine including the administra-
| ton OF the merchant marine develop
ment fund.
This fund. drawn from the sources
previously indicated, should be used to
| relieve such financial difficulties as may
be encountered in the development OF an
| adequate and well balanced American
merchant marine. For instance:
1T Is foreseen that n number OF trade
routes important TO the immediate or
future welfare OF American commerce
must be established and developed. Some
of these routes may not yield steam
ship operating profits until their exist
ence shall have attracted an incr ,ased
volume or better balance OF trade. Rev
enue derived from the carriage OF mail
and possible fees for the training OF
| seamen and cadet officers may partly
compensate Losses incurred on these
routes. still. in cases where the Gov
| eminent sells a ship on condition that
| It be operated in a route which may not
| prove profitable at once, 1t will be neces-
cary TO provide for the payment OF de-
| faulted interest from the merchant ma
rine development fund. IN the dscre-
ton of the Shipping Board or other
| Government agency, upon recommended
| ton Of the Board OF Government Direc-
! tors, until such time as the route may
begin to yield profit. When the ships In
the route earn their aunual interest rate
and profit, one-half of the proft
earned each year should be paid into
the merchant marine development fund
until all moneys drawn from the fund
on account of the vessel in question
| shall have been replaced. The other hall
should go annually to the steamship
| stockholders.
"On the bass OF 1000, 100000 WORT
OF ships the Merchant Marine Develop
ment Fund would be Sl4.O00.000. This
amount, investi LEGATION convnces me, would
he more than sufficient to care for al
deficiencies likely to develop during thi:
period
Until sold under the terms just stated
all vessels should remain the property
OF and should be operated by the Gov.
eminent of the United states.
Taking up these points serlatum,
wish to enlarge and comment upon then
as follows:
"In order to make sure that the Ameri
can merchant marine will be operate
with due regard for the interests Of
American industry and commerce, i. /;
necessary to exercise control over tn,
maximum freight rates which may be
charged in regular trade routes
'SectioflS~l6 and 17--R he act 40
proved September :. 1916. provide rene
dies for unjust discrimination by Amerl
can shipowneTs against any American
I-N-G. -