The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1920-07-26
Biggest erican Financial
Problem Is How to Meet Sub
sidy of British Ships.
OUR SHIPS WAR BUILT
British Fleet, for Most Part,
Was Constructed Under Pre-
War Wage Scales.
(8y HARRY q. HUNT9

Washington, July 25.-The least Of
the difficulties of American shipping
in competing with the merchant yes
sells of foreign nations is the differ
ence in wages paid American seamen.
The public generally. because of the
long fight made against the La Fol-
lette Seaman's Act. has been led TO be-
lieve that the higher wages and the
better working conditions required for
the crews of American vessels is one
of the big handicaps TO American yes
sells competing in the world shipping
trade.
The big barrier, financially. how
ever. is the difference in capital
charges that must be met by the
American owner and operator. TAX
ing a British boat for comparison
for it is with British shipping that our
vessels most often come into compe-
tition-let US see how this operates
Uncle Sans merchant marine, on
the whole, is new merchant marine.
built at wartime prices. Its cost va
ried from about Sl75 TO 1923 per ton
averaging about $500.
Great Britain's merchant marine.
on the other hand. is less than half
of wartime construction. Its aver
age cost. ton for ton. therefore. is
much lower. Just before the war. for
instance. British freighters were be-
ing turned out at from $40 to $50 l,er
ton.
Recognizing the United States COM
petition, England, as one Of her first
after-the-war acts, moved to take
from her merchant shipping any added
costs that would result from the high
er prices of shipping built after 1919.
AS the first and biggest step toward
this end. she adopted a policy, under
a ruling by the minister of finance.
recognizing pre-war values as the
proper basis for future capitalization
and taxation OF merchant vessels In
order that vessels built at war prices
may be brought in under such low
capitalization, provision is made for
the application of profits to retire
capital investment until il is brought
down to $50 per ton, or such lower
figure as would have represented the
pre-war value Of the tyne of vessel
operated by a given concern.
BY this provision, which amounts
10 gigantic subsidy in taxes waived.
British shipping is placed in position
to underbid American vessels on every
trade route in the world, unless Amer
lea, by discriminatory legislation in
favor of American vessels. insures
special advantages and protection to
them in the handling of freiglfts to or
from this country.
J. II. Rosseter. formerly director Of
operations and trustee OF the Elmer
sency Fleet Corporation. says:
The total cost Of manning and vic
aHa IiFagF n
der the American scale OF wages. is
less than $1,000 per month. The pres
snt English cost is only very little
ower.
"On the basis OF cost and present
values. this vessel represents a capital
nvestmeE Of $1,000. 900.
Three items-depreciatfo interest
and insurance-amount, on a proper
oasis, to about 16 per cent annually.
"On the American vessel then
maintaining capital investment Of
$1,000, 900, these items would amount
o 100000 a year
"On the basis 10 which the british
Ire assisted 10 write down their cap
tai investment. the same ship would
'equlre, for the same items, only one
ourth that sum, of $50, 900 "A year"
American shipping men say that
either the United States government
must provide-as it has provided in
he Merchsnt Marine Act Of l92O-to
protect them, or the valuations on the
'essels. either for sale or lease, must
De reduced TO a basis comparable with
hat established by England for com
putting capital charges.
As TO the readiness with which Brit
md would take up any issueofship-
ping, it is pointed out that between
'ne-half and two-thirds Of the mem
oers Of Parliament are directly in
crested in British shipping as stock
holders. directors and officers in ves-
Iel owning or operating companies.