New-York tribune., 1922-03-03
n. Y. Passenger
Ships to Cain
Under Subsidy
q.
Officials of Ste III h p
Companies Study Plan
of Preside in Its
Effect on Their Lines
Expect S5OO,OOO Limit
Leviatl,an Entitled to
Sl.25O.OOO a Year Ex-
cept for Restriction

One of The first effects OF the sub
sidy plan Of the Admin stratioA, Il ap-
proved substantially in its present
form, viii be stimulation to fast pas
senxer services from New York rather
than development Of freight hnes'
according to shipping mon who nave
been studying the bill in detail.
It was estimated yesterday that the
Ieviathan, making fifteen round trips
year between New York and Europe
would be entitled to a Sl.2oo,ooo annual
subsidy j: paid at the rate OF 20 cents
p gross ton for each 100 miles, wnlch
IS the maximum for vessels OF twenty
three knots. Shipping men believe
however, that the payments on account
of the Leviathan and other large yes
sells will be limited strictly by the
board. The bill authorizes the board
to curtail payments II the amount car
ried in tho subsidy plan is excessive
and the steamship company operating
the Leviathan would be subject also 10
the 10 per cent profit limitation.
Steamship officials believe no vessel
will receive more than $500,000 subsidy
for wears operation, and only few
ships csnecially suitable as auxiliary
cruisers will obtain this much
Wide Discretion Expected
Under the Administration plan the
SHINING Board is given wide discre-
tion in raising or decreasing payments
TO accomplish the purposes OF the reg
jslation, which is that ot enabling
American ships to meet foreign com
petition A point upon which there IS
still some difference OF opinion IS
whether the 10 per cent proiit a'Io"ed
under the proposed bill IS TO be cal
culated before or after dcducting such
capital charges as interest, depreclat'o"
and insurance.
The direct remuneration for last
vessels. added to the indirect AIDS re
sulting from immigration. lower raii-
road rates on exports and imports, the
inducements offered to shippers to use
American vessels, is expected 10 make
the twenty-three cargo and passenger
boats owned by the government de-
eirahle accuisitions for the steamship
lines.
The bill takes precautions against
the criticisms frequently directed
acains. the French subsidy pNan-that
vessels arc often operated solely to OBJ
tain the payments from the govern
ment-by stipulating that the SUBSIDY
a not automatic and is subject to de-
cision bv the board whether the scrv-
ice is an asset to the Am nercan rer-
chant marine.
Many Changes Expected
Shipping officials yesterday eX-
pressed the opinion that the bill would
lead TO many important changes in old
line companies in the next three years.
One provision Of the proposed law is
that any company to obtain the sub
sidv must have three quarters of its
tonnage under United States registry
within that period. This is expected to
bring about separation of the foreign
and American affiliations Of concerns
which are now operating many ships
under alien registry.
The fear that the close supervision
Of subsidy payments by the Shipping
Board may result in excessive audits
and government red tape has been dis
PEELED by the provisions of the bill
stating that the returns collected by
the Treasury Department for tax pur-
poses will be accepted by the board.
One OF the most important features
Of the bill, according to shipbuilders.
is the provision that loans for new
construction may be made at per cent
interest. In the past American con-
panics have been compelled to pay s
per cent or more for funds against a
prevailing rate Of about 3 per cent in
Great Britain. The Harding plan
would more than offset this advantage
formerly accruing to British vessels,
and will compensate to some extent for
greater depreciation and insurance