New-York tribune., 1922-06-27
Bank Questions
Need of Aid to
U. S. Shipping
n. Y. Bank of Commerce
Doubts Wisdom of Giving
Subsidy Until Legal Bars
and Depression Disappear
Not Vital to Sell Ships
Asserts National Freight
Bill Might Well BE Paid
by Alien Marine Service


Serious question exists as 20 the
need FOR subsidizing the American
merchant marine. according 20 state
mSnt issued yesterday by the National
Bank Of Commerce OF New York. Leg
isiative restrictions and the severe de-
prcssion In shipping have discouraged
snip operators from purchasing gov
eminent vessels. declares the bank m
e,nlaining its stand. and have made
q, tnpossiblc 20 determine whether or
rot, they can compete with foreign
ships In normal times.
II would be- mistake 20 assume
hat the disposal Of these vessels IS
,hs primary consideration" the bank
ss,. in lis statcemnt. "1he ships were
built for war emergency and II
would be better 90 write them OF as
var expense az once than 90 spread
tho loss over "a period Of years, or pos
sibiy 10 extend 10 indefinitely, by estab-
fishing subsidies higher than would be
necessary 20 permit American rsrticl-
patton in the shipping industry.
Direct Subsidy Favored
The FIRST problem TO be solved Is
that of putting the American ship op-
orator on a sound basis. and this i'm
plios freedom from artificial restrc-
tioss which may increase his capital
charges. At the present time the free
shin policy, By which foreign built
sbips are admitted 10 American regis
try. IS still in force. but 70 was adopted
rs an emergency measure just before
the war, and is not so well established
but that 10 needs active support.
"Within the limits compatible with
safety, such as are enforced by OiheT
maritime nations. the American snip
onerator should be free % hire bis
labor where = is cheapest just as ne
.h0sid be able 90 buy his ships Where
thev arc cheapest. II American labor
cannot By is superior efficiency 40 sea
maintain therc its higher standard OF
living u should be diverted 20 other
industries where its efficiency viii be
of value. The only justification Tor
burdening the ship operators with n
labor subsidy or with a shiprard sub
sldy g. regard for national defense.
IN both cases 10 may be maintained
that direct subsidy carefully ear
marked is much 90 De preferred 70 an
indirect method whose cost Is impos-
sible 20 determine.
'fhc removal Of discriminatory re-
strittions in regard 20 labor and the
maintenance Of the free ship policy
wopld. I'm al probability, still leave the
American operator 70 disadya iage
We would be handicapped both boy i'm
experience and lack Of established
trade connections and by Subsidies
granted by other nations. Both o.
these are legitimate bases FOR demands
for government help in some form,
but. neither would justify heavy sub
fdy.
Hard "a Find Basis
THE outstanding fact in regard 10
the need Of government assistance FOR
the.Amorlcan merchant marine is that
the need cannot be- accurately meas
ured 40 the present time. lnqucsuon-
nhIy q subsidy is necessary TO enable
American ships 20 compete under pres
crt conditions, but would IL not be a
mistake 20 perpotuate present cOndi.
tiors? A subsidy based on the present
d.ferential in operating costs would
in eject be n subsidy 10 a certain class
Of labor A subsidy intended. In ad-
dition. 20 make possible the operation
AZ more ships than there is traffic for
u Ain 'he depressed state Of foreign trade
ould certainly establish an artificial
sis for American shipping, which in
dong run would prove expensive 90
,n. taxpayer beyond an need.
~ is frequently asserted that the
national freight bill. n paid largely 90
foreigners. would be n matter OF con-
cerr At the present time this argu-
ment for merchant marine carries
liftle weight from purely economic
standpoint for the United States is
uow the creditor Of many o. the prin-
cirsl countries Debtors can make
pay- nts In gold, goods or services.
Most Of the gold that can be spared
has already come 20 the United States.
A. - o. Che effects or future pay
ments upon domestic industry arc con-
ccrrcd. 10 would bc mo- more injurious
20 accept shipping services 10 the
detr4ment o. partially organized ship
ping industry than 90 import goods 70
tho injury % established manufactur-
ING industries"