The Washington herald., 1920-02-18
HOOVER -ANALYZES
NATIONS PRESSING PROBLEMS

creased standard Of living In an In.
creasins population without . greatly
increased transport equipment. More
over. there are very great social prob
lens underlying our transport sys-
tenn; today their contraction is fore
ing congestion Of our population
around the great cities with all that
these overswoolen settlements import.
Even such great disturbances as the
coal strike have q minor root in our
Inadequate transportation facilities
and their responsibility for intermIt-
tent operation of the mines.
I'VE are all hoping that Congress
wiIi lind a solution of this problem
mat Will be an advanced step toward
tne combined stimulation Of the In
ltiatfve OF the owners. the efficiency
or operation, the enlistment of the
good VIII of the employees and the
protection Of the public. The prob
lem is easy to state. lis solution is
almost overwhelming In complexity.
1t must develop with experience, step
py step-toward q real working part
nership Of its three elements.
Responsibility Of Private Ownership.
The return Of the railways to
the owners places predominant pri-
vate operation upon its final trial.
II instant energy. courage and
large vision in the owners should
prove lacking in meeting the inn
mediate situation we will be faced
with reaction that will drive the
country to some other form OF con-
troll. Energetic enlargement of
equipment, better service, c6-opera-
ton with employees. and the least
possible advance in rates, together
with freedom from political inter-
est. VIII be the scales upon which
the public will weigh these results.
Our Merchant Marine Problem.
Important phases of our ship
ping problem that have come be-
fore you should receive wider dis
eussion by the country. As the re-
suit of war pressure we will spend
over ss2.s00. .00o.0 900 In the compile
tion Of a feet of 1900 ships of a
total of 1900, 900 tons-nearly one
quarter of the worlds cargo ship
ping. We are proud of this great
expansion of our marine. and we
wish to retain IL Under the Amer
ican flag. Our shipping problem
has one large point OF departure
from the railway problem. for there
Is no element of natural monopoly.
Anyone with a water-tight vehicle
can enter upon the seas today. and
obr government Is now engaged
upon the conduct OF a natIonalized
industry in competition with our
own people and all the world be-
sides. While In the railways gov
erRment inefficiency could be passed
on to the consumer. on the seas
We will sooner or later find 1t trans
lated to the National Treasury.
Until the present time. there has
been a shortage in the worlds ship
ping, but this Is being rapidly over
taken and we shall soon be met with
fierce competition OF private indus
try. II the government continues in
the shipping business, we shall be
disappointed from the point of view
of profits. For we shall be faced
with the ability OF private enter
prise to make profits from the mar
gins of higher cost OF government
operation alone. Aside from those
political pressure. there are others
special to this case. The largest
successfully managed cargo feet in
the world comprises about 120 ships
and yet we are attempting to man
age 1900 ships at the hands of
government bureau. In normal
times the question OF proit or loss
In a ship Is measured by a few
hundred tons Of coal wasted by q
little extravagance in repairs, or by
the four or five days on a round
trip. Beyond this, private shipping
has a free hand to set up such Give
and take relationships with mer-
chants all over the world as will
provide sufficient cargo for all legs
OF a voyage, and these arrangements
of cooperation cannot be created by
government employees without
Charge or danger of favoritism.
Lest fault be found. our govern
ment officials are unable to enter
upon the detailed hlggling in fixing
rates required by every cargo and
character. Therefore, they must
take refuge in rigid regulations
and in fixed rates. In result, their
competitors underbid by the small
est margins necessary to get the
cargoes. The effect of our large
fleet In the worlds markets is thus
to hold up rates, for so long as
this great feet in one hand holds
a fixed rate others will only barely
underbid. II we hold up rates an
increasing number OF our ships will
be idle as the private feet grows.
On the other hand. if we reduce
rates we shall underbid until the
government margin of our larger
operation cost causes us to lose
money.
Problem of Demobilisina the Fleet.
we shall yet be faced with the
question Of demobilizing a consid.
cradle part of this fleet into private
hands, or frankly acknowledging
that we operate II for other reasons
than interest on our Investment
In this whole problem there are
the most difficult considerations re.
quiring the best business thought
In the country. In the first instance.
our national progress requires that
we retain a large fleet under our
nag to protect our national COM
mercial expansion overseas.
Secondly. We may find IL desir-
able to hold considerable govern
nent feet to build up trade routes
in expansion of our trade, even at
some loss in operation. Thirdly, in
order to create this fleet, we have
built up an enormous shipbuilding
industry. Fifty per cent of the
capacity of our shipyards will more
than provide any necessary con-
struction for American account.
ThnrAfarA a..
tanning foreign orders, or the re.
duction of canacitY OR hnfh r.