The Washington times., 1920-05-08
.ASKl92OPRICE
FOR j. S. SHIPS
Committee of Experts Advises
Sale at Present Reproduc-
ti0n Cost.
TEN PER CENT CASH TERMS
Careful Inquiry Into Response.
biIity of Purchasers Urged
BY Board.

Of shipping now owned by the United
States Government as the result OF
war time construction at prices
based on present cost OF reproduction
on time payments extending
through fifteen years, is recommend
ed by the committee headed by Eu-
gene Meyer, jr.. managing director
Of the War Finance Corporation
which was appointed by Rear Ad-
miral william s. Benson, retired
chairman of the United States Ship
ping Board.
Report BY Committee.
Besides Mr.. Meyer. the members OF
the committee were: Alex Legg, OF
Chicago: Owen Young of Schenectady
and Charles B. Warren, OF Detroit.
The committee was appointed at
conference. held in Admiral Benson's
office on April Is. which was attend
ed by members of Congress. represen-
tatives of large business interests,
and two former chairmen OF the ship
ptHk pOdTu. IJuwdlu AloAitJ oha
John Barton Payne.
The committee report. which is sign,
ed by Mr.. Meyer, as chairman, recon-
mends prices fixed on the present
cost of reproduction because "the
ships were built as a war measure
and In a period OF abnormal and ex-
cessive cost due to war conditions
and to the fact that the industry had
to be built UP as substantially new
industry in this country"
The terms suggested for the sale
Of the ships are:
tsTen per cent cash, payable on de-
livery OF the ship, with payments at
the rate of f1ve per cent semi-an-
nually for three years, making a total
of 40 per cent to be paid in by the
end Of the third year: the balance. or
sixty per cent, to be payable in twelve
yearly installments OF 8 per cent
each"
else careful supervision and audit the
operations and earnings of these
ships. Out of the earnings. it is sug-
gested. the surplus over interest
(which would be at the rate of @ per
cent per annum), current INSTALL
ments Of payments on principal, and
an adequate return to the purchaser
for his actual capital invested at a
rate to be fixed by the boari, should
be applied to additional payments OF
installments of principal.
Discount For Cash.
Title to the ships would remain In
the United States Government until
a proportion OF the total principal,
to be fxed by the board, had been
paid, after which title would pnss and
the Government take n hrst lien
pending the payment of the entire
principal.
A discount of 3 per cent for cash
payment in full is proposed, and n
cash discount OF "a per cent for
payment in full mt any time within
hve years from the date Of delivery.
Use of the money obtained by pay
ments on the principal for the re-
demption, at market prices, of Lib
erty loan or Victory loan bonds, is
recommended.
Careful inquiry into the RESPONSE
bility ,of prospective purchasers of
ships and provisions to protect them
against unfair competition from
operating contracts on unduly easy
terms in connection with ships still
unsold, also is urged.
To Use Discrimination.
The committee suggests that ain
view of the small cash payments re-
CURED under the above recommcnda-
tlons, the board use careful dIscrIni-
nation rs to the responsibility of pur-
chasers, whether the purchasers be
large or small. The committee ven
lures to emphasize the point of re
sponslbiiity' OF the purchasers because
the committee feels that In n consid-
cradle degree methods which restrict
snies TO responsible parties will give
greater coincidence TO the class of buy
ers who desire to go Into the shipping
business In substantial and perma-
nent manner" In using the word ere
sponsibiltty "thc committee has In
mind not only the character and re-
sources of the parties concerned, but
also their ability TO handle the busi-
ness compctcntIy and efficiently.
smaller concerns mny be as responsI-
Die Tor moderate commitments ms
larger concerns would be for larger
commitments.
"four committee understand. TINT
Its suRgestions concern only the sale
NJ ships that the shipping Board con-
siders desirable to be retained for the
permanent American merchant ma
rtne, and, further. that II II not ex-
pected 10 deal with special phases Of
the shipping problem such y. are In
volved In the question of maintaining
special trade routes which mny he de-
sirabie In the national interest,
PAPER BOOSTS RATES..