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

be relied upon to keep 1t practically in
tact. The only losses which need be con-
foreclosures executed against companies
which, despite the aid OF the fund, have
failed to earn their charges
1t cannot have escaped notice that the
assistance ! propose to render with the
Merchant Marine Development Fund
takes the place OF the Government back
ing for the development OF new trade
routes in the national interest, which is
the strongest argument brought forward
by the advocates of Government
owned and operated merchant marine.
Yet not one cent OF this fund is drawn
from the public treasury. Instead, tho
money represents profits forborne by tho
Government which Is not entitled to
earn profit while engaged in developing
the industries OF its people. Neither
can 1t be said that the money will bio
taken from the steamship business, for
in no case will the operators be charged
more than the current market rate for
similar service. whether the service rem
dered be insurance or credit
The Government Directors.
The functions OF the Government d.
rectors mentioned in connection with the
Federal charter under which our steam
ship companies should operate will be
OF utmost Importance. The provision
which prohibits their drawing a salary
automatically insures that no great
number OF them will be men whose in
terests are centred in the steamship
| business. At the same time the pro-
vision that the Government shall name
them insures that they will be men of
standing, sympathetic with American In
terests and alive TO the public service
character of the steamship business.
Upon these men the American merchant
marine will rely 10 bring about that CO.
ordination of effort which will insure
healthy conditions within each corpora
tion, clean business methods. and in
short will put each operating unit on It's
mettle, both in its own interest and In
the interest OF the American merchant
| marine as a cooperative whole.
After consultation with, ana upon the
recommendation Of. the Association OF
Directors, the Shipping Board or other
designated Government agency. would
| "(a) Determine what assistance. II
! any, should be given from the Merchant
Marine Development fund.
"(b) Establish new trade routes or
modify or discontinue old oaes
"(c) Determine whether or not a de-
faulting mortgage should be foreclosed
| "(d) Take any steps, or exert any in
fluence within its power to improve the
American Merchant Marine.
New Legislation Needed.
I'm order to make this plan effective
1t will be necessary to ask Congress for
three statutes. One of these statutes
should authorize the Incorporation OF
steamship companies under Federal
charter along the lines have indicated
Another statute should extend the emer.
eency power to carry hull and machin.
cry insurance In the Shipping Board
fund so that this function many con.
tinue 10 be performed by some desig-
mated Government agency so long as the
Government may continue to hold an
equity in any OF the vessels 1t now owns
/ Or has under contract The third statute
of which shall speak at greater length
should revise the present status of YES
sci mortgages so as to make them at
tractire to bankers and other investors
The security o. "A mortgage may be
! imperilled by loss or damage to q vessel
or by the attachment OF superior liens
Such liens can generally be classed as
| those arising from debts and from liza
| bilities. The most important ones, re.
sulting from debts. arise from the fur
nishing OF repairs. supplies or other
| necessaries in the maintenance and oper-
alton Of vessel. including pilotages
! 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,
III, therefore. the mortgage contains
! covenants and agreements TO compel the
1 mor:gagor to insure against such liza
bilties, as we'll as loss from fire and
marine peril. the security OF the mort.
gage will only be jeopardized by liens
arising from contractual obligations. II
is my proposal to obtain protection
/ against the latter by amending the exist
| ing law so as TO assure to any one fur
nishing such repairs. supplies, other nee
! essaries &c. the opportunity. by eXer-
cising due diligence, OF obtaining full in
formation by the existence OF the mort.
gage, and then to provide that the lier
of the mortgage shall be superior to
liens for repairs, supplies and other nee
essaries tcontractual obligations). sc.
I 10y TINS coordination or mortgage
covenants and agreements and the stat
utes reasonable and adequate protec,
ton can be secured to the mortgage
| would provide for such notice by requir.
ing that all mortgages be recorded with
the Collector OF Customs where the mort
gagged vessel is registered or enrolled
and that the ships registry or enrolment
have Endorsed upon its face the names
OF the nortgagor and mortgage. tbs
place of record and the amount secured
thereby.
II would also vest IN the United States
District Court exclusive Jurisdiction owe,
the foreclosure OF the mortgages instead
OF leaving the mortgages to thfir pres
ent remedy in the State court. Thi,
would make the practice uniform anC
therefore greatly enhance the security
value OF the mortgage by providing g
speedy and simple method of fOreclos
u-e. II would also avoid the inConsls
tencies, delays and uncertainties OF Stat,
laws and procedure which now exist BY
and large, the enactment of statut,
such as l have outlined would maze. o
a n ortgage on American vessel propert,
"A security fully as good as, and in som,
respects better than. mortgage on YES