The Rock Island Argus and daily union. (Rock Island, Ill.) 1920-1923, 1921-07-19
SHIP SUBSIDY
IDEA FOSTERED
INV WASHINGTON
Drift of White House
Discussions Fcuors
Measure.
BY DAVID LAWRENCE.
Copyright, 1921.

| questions as to the future of the
American merchant marine. While
President Harding and his advis-
ers have not yet reached a definite
/ program or policy, the significant
| thing about the informal discus
Slons which are now taking place
is the drift toward government sub
sidy of ships flying the American
/ flag.
| For years the subsidy idea has
/ been warmly espoused by shipping
men, only TO be as bitterly denoun-
| ced by members of congress hailine
from agricultural states. Five years
| ago no American president would
have felt warranted in recommend
! ing subsidy to any class of Amer
1can enterprise. But the war has
brought many changes. and it would
not be surprising if before the end
| of the Harding administration a
ship subsidy bill not only was pro-
posed but actually put through con-
greSS.
Chief Opposition Gone.
1t is felt that the chief source of
opposition has vanished, for the ag-
ricultural element in congress have
recently come forward with a re-
quest for subsidy themselves. The
proposal that a hundred million dol
lar appropriation be made by the
government to finance agricultural
projects Is looked upon by advo-
Gates of the ship subsidy as estab-
fishing a precedent which agricul-
I tural senators and members of the
house will not be able to ignore.
Another element in the situation,
which has made ship subsidies seem
nearer than ever before is the re-
cognition by the farmers that they
must have export trade in order to
care for the surplus remaining an
nually when. the domestic market
has been satisfied. Shipping men
say that bigger than the tariff is
the question of freight rates and
that it is possible for foreign con-
Germs to climb the American tariff
wall and, because of the chea D
transportation rates which foreign
ships enjoy, European concerns will
still be able to undersell in the
American market
In other words, European coun-
tries, especially Great Britain, have
always realized that in the carry
ing trade lay the biggest opportun-
tiles for profit, irrespective of what
country actually produced or man
ufactured the goods carried.
Wants Merchant Marine.
While President Harding is anxi-
Gus that the government should get
out of the shipping business there
is no doubt that he is more inter
ested for the moment in seeing an
American merchant marine evolved
out of the huge wreck of the war
The hand of the government will al
ways rest, i'll regulatory sense,
upon ships flying the American flag,
and spOndingiy, it is now fore
seen, the American government will
see to it that the deficits in the oper-
alton of American ships in comped-
ton with foreign flags will be wiped
out by some form of subsidy given
either for the carrying of mails or
the development of trade routes to
parts of the world hitherto IN
touched by the American merchant
marine.
The subsidy idea is actually being
advocated in administration quar-
8
that it would be great economy
ever the present method of flnan-
cling government ships. While the
shipping board charters its boats
to private concerns a commission
is paid on the total freight receipts,
whether the boat actually loses or
makes money. This, it is contended
by government experts, puts a pre-
mum on inefficiency, for the tempt
alton has been to run the boats at
any cost because the greater the
freight income, the larger the com
missions to- the concern operating
the ships.
American Firms Increase.
Thus the government is at pres
ent not only furnishing a subsidy
to private shipping concerns, but
is also furnishing the boats besides.
All this has entered into the huge
losses of the shipping board and it
is anticipated that irrespective Of
the ultimate policy adopted on ship
subsidies a halt will be called on
this practice by the new shipping
board. AS proof of the extent to
which private concerns have felt it
wise to enter into the operating side
under. government charter, officials
point out that whereas there were
only ten or twelve shipping conf
panies before the war, there are
now two hundred American firms
i'll the shipping business.
OF course. the LaFollette sea-
mans act always has been cited as
an insuperable obstacle to Ameri-
can competition with foreign flags
but it is realized that there is little
chance of seeing repeal of that act
and the government is compelled IN
effect to make up the deficits caused
by the high wages which must De
paid to American seamen as COM
pared with similar labor done On
foreign ships.
There is one point, however, on
which it is not likely that our gov
ernment will be content to go along
as in the past. It involves the ques-