New-York tribune., 1922-10-22

DeuSNon In American shipping since
the war, which has resulted In un-
usual Icsses to steamship companies
ard banks supporting them and In the
elimination Of a hundred or more OF
new concerns, has created financial
problem unlike that faced by indus
trial enterprises eshore. The effect Is
not so apparent at present as IL will
be when g revival In ocean transporta-
tion aakes it necessary for the lines
TO seek capital Tor expansion of serv-
ices and the construction Of new vss-
sels.
Steamship lines and industries on
land are In different classes. The for
mer extend to all parts OF the world
and come IA direct competition with
the maritime fleets of other nations;
their business Is international and all
factors entering into the cost of oper-
alton are subject to international con-
ditiong. The latter live behind the
protecting wall of the tariff and are
further safeguarded by the miles of
ocean lanes over which their com
petitors must operate; their business
is 30 per cent or more domestic, and is,
accordingly. less subject to foreign In
fuenceg.
The capital needed by American
steamship companies must largely be
drawn from sources within the United
States az interest ranging from 20 8
obtained By foreign steamship lines
abroad at interest ranging from 20 s
per cent The industrial enterprise
ashore must pay the current interest
here, but comes into competition
chiefly with others operating uader
the same capital cost.
In addition to this fundamental
handicap, the American steamship COM
pany at the moment has to face an
unfavorable sentiment among bankers
and investors, tire consequence Of the
unfortunate developments Of the last
two years.
Investors Lost
During the war and for short time
aYterward shipping concerns earned
enormous profits. One result was the
entrance into the field OF scores Of
new companies, sterted on a shoestring
margin, which sought and obtained
financial support among bankers and
capitalists with little previous dealing
IN ocean transportation. The older,
established companies did not need
financial assistance; the new ones
found 10 necessary. When the incvita-
bic depression arrived, with tumbling
freight rates and ship values, the first
lines to go under were those without
previous experience. Tho number of
chipping Board operators alone dropped
from $50 TO S8, and the mortality
among private lines was almost as
great The loss also fell upon the
banks which had advanced funds upon
mortgages and bonds, and upon gullible
investors who had purchased millions
in stocks.
1t is charitable not to list the com
panies that disappeared. It Is still
more charitable not to mention ,,tile
powerful banks in New York and other
cities which are yet struggling with the
bad securities they acquired during
the war. Their mistake wss in failing
20 distinguish between the concerns
founded purely upon speculation ard
those with good performances in the
phst. Their investments were made in
most instances without competent ad-
vice from men familiar with the va
garles of shipping.
The natural result is that legitimate
shipping organizations, which have
survived the last two years of depres-
sion, face suspicion and lack Of tn
terest when they seek new capital.
This applies not only to the inaugura-
tion or services, but also to the con-
struction OF modern vessels. IL the
American merchant marine is to ex-
pand the need must be met either by
government aid or by private Anancial
institutions.
Marine Bank Planned
With this situation in mind, steam
ship men have noticed with unusual
interest the announcement of the form
alton Of the Maritime Trust Company,
initiated by such leaders in the marine
field as Ferguson, Raymond, Munson,
Pew and others. There has been cen