New-York tribune., 1920-11-11
Charter Plan
Is Urged to End
Shipping Graft
Private Tonnage Operators
Say the ALLEGATION System
Gives Profiteers Leewav
10 Defraud Government
Losses Up to Charterer
Adoption of Method Viewed
as Assuring Economy and
Efficiency of Operation

Charges made before the House com
rttse investigating Shipping Board
sfsirs, so far as they concern the oper-
alton Of the boards tonnage, form q
s,rong argument in favor of the bare
beat charter plan of operation, accord
ing TO independent operators Of Amer
can vessels. Through the adoption Of
this system, they declare, the board
could have eliminated the possibility
# the great majority OF practices com
7lsired OF whereby the government is
sad TO have been mulctod Of millions.
lnder the system that has prevail led
me board ships have been allocated
. concerns under an agreement to nav
an agency fec to the operators and 2
commission. While the previous ar
rsugement vas for percentage OF the
profits, this has lately been changed
20 a plan whereby the operators are
TO receive percentage on the gross
treight receipts.
Under the bare boat charter plan
'hs operators would hire vessels from
the Shipping Board paying fixed
sum, paying all the costs of,opcratjon
out Of Their own pockets. supplying the
crews and making all necessary TEN.
7orary repairs They would then bo
III lle position o1 leSsces, and the o,,ae.
toa o. ptonts and losses would ha
selr pe1sonAl concern and not thot of
ne SnippiNr Board in this wa tha9e
would be no opportunity to take adj
.intage OF the government. ss i al
eyed TO have been done in man in
Stances. many 4"-
operators Favor Chartering
IAe executive committee of ,r,o
American Steamship Owners Associa-
non, representing the leading interests
~ ShiPYihg reg stored under the Aner-
eah nag, several weeks ago votad ~
a'or O. the bare boat chartor r,)an
nd brought the matter formallv 20 rHa. 80
stehtion OF the Shipping Board ad
foca'ihs tnat on The adoption or s,Tcb
sss-eM 'ie Board would drop the Al
oea1on plan ana lay up the vessels
Naile @ the board rejected this nlao
.a.-a a -a'V' OF re existing agency a~ree-
g .Ie"', -''h.Ir"l Benson. chairman of the
a0"l1' recently stated that if the s-ov-
''''nen' .'e'.', was unable TO sell it's ton1aee
.ase .Vg.U w. III O. hateiy be necessary to
1P ."e pare boat charter plan.
,ress:o.e y0'V Just made to the Con-
steSS'onal investigating corn,,;tfa.
tAafges that intorlocking contrec.s
IsVe been fruitful source Of corr,,rt
practices. Interests without previons
'"PeFieAce ln the operation Of shinnine
ar sad 10 nave organized shinninS
'o"' "'pAl4es' nao government vessels al
0o4'ed 10 them and then secured in
E1eS's in other commpanies. throuoh
Nnica they would proceed to fur,iSh
sapp4eS and materials for the Shin
ping Board vessels and for which ne
'o"fd would be charged at rates well
''0'e the open market prices.
Dur Firms Organized
intefo m this way are rcnor+ad A.,
4eye oeen established in subsidiary
.omfzn'cs engaged in ship cnanl'erT.
'"sreoring, towing, iueing, watering.
.sP"llhg' painting, scaling or forward-
.us eVtspahies. In many cases. the re-
I9'' charges, the subsidiary compa-
-ssS merely have q desk and dummy
.Mc'"i ana give him contracts for r,-
%'is Or service which are, with profit
suaeo' passed ON to some legitimate re-
igalment. ''S '0'
with d bare boat charter system. In
lependent operators point out. all these
yosSioih'es would be eliminated. as
ne Shipping company would be pur-
ssa&Slng tol its own account and not
yt me Shipping Boards, and would
prices ma
- II Is such practices as those out
'Nea tnat are menacing the merchant
n"llne' says the report to the Cou-
@'eSslona committee, "and few Of tho
.vn "Ac are practlcing these methods
''..e'e tnat the merchant marine VIII
SS' any great length OF time"
10 Eliminate Profteers
,. uns OF the great advantages of the
.a'e Doat charter plan. independent op-
'.Alors say, is that 1t would force out
~ ue shipping business men of the
!9e described. who see in it only an
ppoHun.ty TO make profits at the ex-
,eASe , OF the government. and who
.1.u not continue if the test was
eUe 'he ability Of the operator, with
's' r relement OF loss figuring as a factor
II the situation.
ron the standpoint Of economy, the
,~'Pphg Board, 1t is stated, would gain
'.Sa-y ny the abolition Of the agency
:. .s.'eHen' The force required to do
5sS.ft f,eflcal and supervisory work on
NJ O 'Ae government in connection
. M tnc operation of allocated ships
'ouid be reduced to a comDarativelv
.S"nl S~~a' organization to deal with the
a. stsefiHg Of vessels and the collection
eHarter rates. Instead of certain
,dS as under the present system, it is
NV the board would be assured of a
,s"" income and would have no con-
~ III Vhe details Of operation.
~ Ieie ,h mas been considerable criticism
bo.rs l0 method Of ALLEGATION under the
sss su 10. oa the ground that favoritism
so,, en SHOWN and tonnage allotted IN
uone, instances for political and sec
char.. reasons. With the bare boat
somlS system in operation all this
.boss oe eliminated, the ships going TO
;b.ir VINO paid the government for
voc al rate common to all.
Advantages of ALLEGATION
soa. from the Shipping Boards stand
y. y'nt the ALLEGATION olan has been re-
ss.ued as advisable because it insured
u operation Of much greater volume
vould governments shipping than
yr.m DC possible under charterine
sbass"a, Under present conditions, the
.onls Of the ALLEGATION method
a.n,1. probably leave on the govern
d. 49, ,ou hands about three-quartere of
As Image now being operated for it,
;sSappIy OF cargo sps now being
W,,.aeerably in excess OF demand.
osa,1. o"n an Improvement !. 2e
epyssohs, however, more
Isred "meht tonnage would be eD
eonmsSa sna with a supply in operation
tssv nSufate with. rather than in eX-