New-York tribune., 1920-12-21
Alexander for
Cut Prices on
Boards Ships
Secretary of Commerce Is
in Favor of Charging OFF
Loss in Tonnage Values
to the Cost of the War
Needful for Competition
s375, 900, 600 Annually Re.
quired TO Carry On at
Original Scale of Costs

While the Shipping Board has made
q move to reduce the selling price OF
me vessels on its hands and has shown
onnosition 10 any reduction in the fixed
nr;ces of $50 to s1S5 a deadweight
.on. Secretary of Commerce Alexander
noe taken the stand that the ships
INST be reduced to their actual value
;sr connective purposes. The loss to
he government, he holds, should be
. written off as part o. the cost of the
war.
,.During the three wears from July
/ 1917. 10 July l. 1920" says the sec
,etsry in his annual report, Congress IS
votet.. and the Shipping Board has
exuended. in round iumbers. S3,000,-
400 900 on building ships, including the
establishment or extension of ship
result. the American government owns,
in round numbers. 100000 gross tons
Of seagoing shipping
Congress, at its last session, de-
cided to step further appropriations
fer shipbulding, thus terminating, so
far as the United States is concerned.
the operation OF one of the principal
If not the principal. causes that have
'rorked the great changes in world
shipping. The effects of that cause,
however, will abide for some years to
come in the redemption of the debt
incurred and in the use and DISPOSE
vcrl OF the properly acquired aloat
and ashore.
Yearly Charge Heavy One
The interest on the debt may be
computed fairly at the present time
n the annual rate Il per cent and
,hc sinking fund requirements involve
~ PER cent more, or an annual charge
If 7is per cent on $4,000 100000, whi- h
T. 500. 100000. The sinking fund re-
auirements will not, of course, fully
provide against the cepreciation of the
.hips and plants ashore. especially
view of the unusual conditions of their
construction and establishment; so
prudence suggests write OF of per
cent on this account, or $3.50 900;
\ all. an annual charge Of 1915 100000
This charge. OF course. IS subjec
q, reduction by the amount of the eX-
cess of the earnings of the ships over
lie cost of operating them, so far as
arrlied to that purpose. AMI is sub
ioci TO further reduction as the pro-
:eeds of capital assets. ships and
plant ashore may be applied further to
,oe redemption of bonds through
mixing fund operations.
Urges Reduction in Values
We must be candid with ourselves:
md the value of the ships owned bv
me government must BE reduced to
neir actual value for competitive pur-
roses at the present time, and the
Inference between that value and the
irsf cost should be charged to the
cost OF winning the war
The interest on that difference, the
corresponding contribution to the
mixing fund and the corresponding
0llowance for depreciation vii, be
reated thus as war losses, and this
surely is preferable to a continue q
failure to make annual payments on
account of the merchant marine to
interest, sinking fund and deprecia-
ton.
The recnle OF this country are fully
ware that the Wa involved great
:osts and losses. and. in my Judgment
would prefer to acknow wledge such
osses, write them Of. and start in
fFesn, rather than for wears to come
eairy these losses III their merchant
marine account in the form of in
,erest, sinking fund contribution and
depreciation unpaid by their shipping,
Jlt met by JaXatiOn