New-York tribune., 1922-09-17
Ship Owners and Repair Yards
Differ ON 5O% Duty i'm Tariff
Proposed Law Would Impose Another Handicap ON
American Shipping Unless Coupled With Sub.
sidy; Controversy Is Passed Along 10 Congress
BY David S. Kennedy

BY David
Inc controversy between chip owners
and repair companies over Section t66
Oh the MISUNDERSTANDING tariff bill,
imposing duty Qf 90 per cent on the
tepalrs or reconditioning Of American
vessels IN foreign ports, brings To light
an issue OF the greatest Significance 70
'he future Of the merchant marine. An
effort has been made in the last several
weeks TO get these two important
branches OF the marine industry into
! agreement, but this has failed.
While both sides arc reluctant to air
'nelr differences publicly, it is known
'nat there is sharp divergence Of
opinion. 1t is the belief of the ship
owners that the entire industry will
rise or fall together and that neither
can benefit at the expense of the other.
for this reason the owners hold that
the duty should be stricken from the
tariff bill and that the matter should
be left as it stands in the subsidy bill.
According 10 the terms OF the latter
measure American ships would be pro
teeted IN the foreign trade and vessels
receiving the subsidy would be forced
to make their repairs in American
yards. The repair men, however. are
NOT content TO take their chances on
me subsidy and have resolved TO give
1ull support TO the tariff provision.
~ the view of the owners the tariff,
"hi!e leaving American ships unpro-
tected, would extend its shelter to the
, shlpyards, thus eXacting a pound OF
nesh 1rom a struggling industry. 1t is
contended that if the subsidy does not
pass there will be speedy disappear
Snce ce OF shipping under the United
n1ates flag, and that the 5olo effect Of
the tariff would be to expedite the de-
parture~
Owners Take Broad View
A close study of tbs situation shows
That the ship owners take the broader
view. 1t is unfortunate that in this
instance the solidarity manifested in
the fight for the subsidy bill should
be disrupted.
The future OF the shipyards. ship
builders, operators and owners is one
Recognition Of this fact was shown
last spring when all branches Joined
IN the American merchant marine joint
committee and gave their support to
me subsidy, bill drafted by the Ship
ping Board. This conclusion was
reached only after number of dis
cussIons, during which various opin-
IONS we're set forth. For instance,
the shipbuilders at chat time we're in
! slstent that policy Of discriminating
duties, tested in the early days Of the
country, should be tried again and that
/ it would prove to be much better than
@ direct subsidy. The builders still
hold to that view, but have come to
accept the subsidy as something that
may be obtained, while the chances for
preferential duties are remote under
existing circum stances. The Jones act
provided an opening wedge for the
application Of discriminating duties,
but that section vas repudiated by
President Wilson and later by Presi-
dent Harding.
The seagoing fleet under the United
States flag aggregates about 1000 900
gross tons ct present, compared with
little more than 100000 tone before
the war. Most of this is government
tonnage, owned by the Shipping Board.
but substantial part OF it consists Of
private vessels. Many ships are now.
under American registry as e. result
of the eNigencies Of the war. Much
Of 1t was operated under foreign aags
before 1919. 1t is fair to assume that
q great proportion Of this private tor
mage, especially the fleets Of the Stand
ard Oil Company, the United States
Steel Corporation, the United Fruit
Company. aud others, is held under
United States registry in anticipation
of enactment OF the subsidy bill. II
this measure is defeated, the trend
toward foreign flags will again become
manifest
The ship repair companies do not
give proper consideration TO this fact.
/ The tariff bill would give them business
temporarily, but only during the period
of transition.
No Consistent Policy
Another factor should be considered.
One Of the reasons why ship owners
IN the past have hesitated to put their
vessels under the American flag is that
this country does not have record Of
Legislation favorable to shipping. The
mail payment act OF the eos was 6
step in the right direction, but this was
followed by the La Toilette seamen's
act. The shipping act OF 1915, the
merchant marine act of 1920 and the
tN''~'A'E "AboibI D4i1 GtS "a HISc w Va WY
laws, but Section 466 OF the tariff bill
is a movement in reverse. Against this
inconsistent policy, Great Britain, Nor
way, France and other maritime ma
tions continuously legislate in behalf
Of shipping. Ship owners cannot oper-
ate under the American flag one year
and abandon it the next. The result Is
that they often prefer to utilize the
benefits, tested by experience, accorded
them by other nations.
1t is true that there is precedent for
duties on ship repairs performed
abroad, but this is not conclusive. Can
ada imposes a tariff Of 25 per cent on
equipment purchased or repairs made
abroad, but the Canadian merchant
feet is essentially protected industry.
France applies q duty or repairs when
these amount to 80 or 40 per cent Of
the total coat Of the vessel. but the
French merchant feet is one Of the
most heavily subsidized Of all. Great
Britain places no duty on foreign re-
/ pair work and needs little because Of
low wages and other advantages.
Drastic Change in Law
Inclusion of the so per cent duty i'll
the present tariff bill.was surprise to
American steamship men, The form Of
the new section is similar in some re-
spects to former provisions, but there
is a vital difference in it's effect.