Evening star., 1922-04-06
10 PER CENT SHIP
RETURN FAVORED
Expert at Hearing Asserts
Hazards of Investment Re-
.quire That Amount,

Ocean transportation companies
are entitled to a minimum return on
their investment of 10 per cent. R..
H. Montgomery Of I.ybrand. Ross
Bros. & Montgomery, New York, told
members of the Senate commerce and
House merchant marine committees
at today's session of their joint hear
ings on the ship subsidy bill.
Shipping Board officials in drafting
certain provisions of the measure,
held that in view of the highly COM
petitive character of the business and
the unusual. risks to which capital
invested in it is subjected, 10 per
cent annual return was reasonable"
Calls Business Hazardous.
"1f G. per cent is considered a rea-
sonable return on capital invested in
/ railroads and other public utilities
which are monopolistic in character,
and whose earnings are subject to far
less f1uctuation, a minimum of 10 per
cent would appear to be a fair return
on capital employed in the hazardous
business of overseas shipping" the
witness declared.
Explaining the "drect aid" -fea-
lures Of the, BILL which provide that
shipping companies whose net oper-
atinG income exceeds 10 per cent shall
return to the government one-half of
the excess up to the amount of the
direct aid" Mr.. Montgomery declar-
ed this requirement would not dead
en- the initiative. and enterprise Of
shipping companies. The few COM
panies to which such restriction
would apply, he said, would still have
sufficient incentive to put forth their
! best efforts.
ANY plan for the support of the
American merchant marine should
I
sary." he continued, land should be
flexible enough to withhold aid. in
whole or in part, when shipping COM
panies earn more than 10 per cent. on
their capital invested in ships and
facilities.
Favors Indirect Methods.
$50 far as possible. it is desirable
to obtain the assistance necessary
to establish an American merchant
marine by indirect methods as pro-
posed by the bill. However. it is evil
IDENTIFY impossible to evaluate exactly
the effects of these aids in the same
degree that it is impossible to esti-
! mate closely the effects of the new
| tariff bill. 1t seems necessary, there
fore, to provide, in addition to the
several measure of indirect aid, spe-
Gifted direct aid which will be paid
as earned, but which would be sub
ject to adjustment and to refund to the
of any owner during any year prove
| these direct aids to be unnecessary to
permit him to earn an adequate re-
turn on his invested capital.
Predicts Huge Fleet of Ships.
II the ship subsidy. bill is passed.
a privately owned sAmarican nler-
chant fleet of 100000 tons will be
carrying half of the foreign COM
! merce of the United States. Mr..
Lasker predicted yesterday.
He was cross-eXamined continu-
| ously for three hours by two demo-
cratic members of the committee as
Board and regarding details of the
administrations plans for developing a
merchant marine.
The session was devoted entirely
to cross-eXamination of the chairman
| by Representatives Briggs Texas, and
the Tennessee democrat in his ques-
tioning that at one juncture Mr..
Lasker ffared up with an inquiry as
| to whether Mr. Davis was trying to
get information as to the merchant
| marine Or was holding a criminal
| trial"
! statement by Mr.. Lasker that rail
and water transportation should be
! more closely co-ordinated brought
| forth remark from Chairman Jones
| of the Senate commerce committee
that he thought flexible organiza-
! ton" should be created to bring
about cooperation between the In
terstate Commerce Commission and
| the Shipping Board.
Appointment of a group of experts
! to represent both bodies, Mr.: Lasker
explained, is embraced in the mer-
chant marine program now pending
! before the House and Senate commit
tees.