Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1919-04-14
Future of Merchant Marine
PHILADELPHIA Ledger.


Chairman Hurley of the United States ship
ping board, in putting forward his plan for the
operation of the new American merchant marine,
would probably be the last to imagine that his
suggestions will be received without searching
criticism much less accepted without revision.
But it is somewhat surprising that the program
he advocates has thus far received only SUPER
fetal attention from those most deeply interes-
ted. His insistence upon private ownership OF
the ships now built or building for government
account has received widespread commentator,
and his proposals as to the method by which
the government shall divest itself of ownership
and at the same time reasonable protection to
the purchasers have been recognized as pract-
cal contributions toward rather than an actual
solution OF what is going to be complicated
and difficult undertaking. But the absence OF
detailed criticism has been noteworthy, to be
accounted for perhaps by the abnormal position
in which the shipping industry, as we'll as the
shipbullding industry, has been left by the alb
normal conditions imposed upon them by the
war. 1t is impossible for those engaged in ship
ping or in ship construction to look very far
ahead or to plan for conditions still in hope
less state of confusion so far private initiative
or enterprise is concerned.
The first thought that will occur to any one
who studies Mr.. Hurleys plan critically is
grave doubt as to the ability of the government
the larger number of ships it will have on its
hands as result of its building program. The
most desirable ships would, of course. be the
first sold, and if the sales then cease the govern
ment will be left in possession of the least valu-
able and least profitable part of this tonnage.
To meet this emergency Mr.. Hurley has no
alternative to Offer hence it would be expedient
to consider whether longer period OF govern
ment ownership might not be necessary.
There is another practical aspect of the ques-
as under existing laws mortgages on shipping
give little protection to the investor because all
unpaid charges against a vessel take priority,
it will be necessary--until remedial legislation
can be had--to sell only to shippers of ac-
knowledge competency and financial strength.
To illustrate, suppose such corporation as the
American International should make an offer
for 100000 tons of shipping at price, to quote
Mr.. Hurley, (which fairly reflects the current
world market for similar tonnage" Suppose
further that, even were it possible under present
abnormal conditions to ascertain what consti-
tutes fair price the government were TO sell
to that corporation ships at, say $3.50 per dead
weight ton which they are producing for the
government at a cost of from S225 to $24O per
lightweight ton, it is not difficult to imagine
what the attitude of the public would be toward
such plan, There would be an instant outcry
against the sale to powerful financial interests
at loss of from $50 to $50 ton.
Rather than drift into such position would
it not be preferable to continue government
ownership, for, say, two years, until the COM
mercial value Of the ships become we'll estab
lshed the expedient of private operation being
adopted in the meantime? Charters could be
granted giving the charterer the first right of
purchase within two, even five, years, in case
sale is decided upon. Moreover, as the mer-
chant marine development fund, suggested by
Hurley as a substitute for subsidy, will de-
pend wholly on the interest return from defer
red payments on ships sold, there obviously will
be no such fund at all if the ships do not find
purchasers or if for any reason the govern
ment decides not to sell.
1t would seem to be far better and more in
accord with sound business practice to develop
new trade routes out of the operating revenues
of the fleet than to depend upon development
fund which may be nonexistent. If it were de-
sirable. for example. to establish any special
steamship line, say from Philadelphia or New
York to Buenos Aires, and shippers could not
be induced to charter vessels at the normal
rates for such an undertaking, the government
could agree to pay the charterers guarantee
for operating the vessels assigned to the line,
taking over the profits, when profits result, un-
til reimbursed for both the payments advanced
and the charter hire. Reimbursement having
been made, there is little doubt that the char
terers would continue the service at the fixed |
charter rates.
Mr.. Hurley's plan offers other grounds for
constructive criticism we'll worthy the careful
attention of the shipping men of the United |
States; but enough has been said for the mo-
ment to draw attention to difficulties which |
that plan does not meet.