New-York tribune., 1922-07-09
Bargain Prices
For Ships Show
Huge Deflation
Vessels Bring One-sixth of
Figures Asked Immediate
ly After Armistice i'm u. s.
Market: Low Sale Abroad
British Underbid America
Comparison of Purchases i'll
This and Other Countries
Outlines World Depression


Unprecedented depression in the
shipping industry of the world, which
is perhaps unequaled in any other busi-
ness, is shown in the fact that vessels
can now be purchased for approx
mately one-sixth Of the prices asked in
the year following the armistice.s The
same ratio holds for American and
foreign ships, though the general level
in this country is higher.
First-class freight steamers can be
bought in the United States at present
for S2o-S30 deadweght ton, as COM
pared with s175-S225 in 1919 and 1920.
Similar ships can be purchased in
Great Britain for s18-S25, as against
s95-$110 two years ago. Newly con-
structed tonnage can be had in the
United Kingdom now at figures rang
ing from S25 to $55 a ton. American
shipyards cannot build for less than
$50 to S75 ton.
1t is estimated that about one-half
of the worlds tonnage is idle. The
proportion in the United States, con-
is about 25 per cent in use and rs per
cent idle. In other maritime nations
from 25 to so per cent of the vessels
are temporarily out of service.
Rates Lower; Expenses Higher
One Of the results is that freight
rates generally approximate the pre-
war levels, while operating costs are
substantially above those in 1913.
Very few companies are meeting ex
penses. as shown in the annual reports
for 1921.
quotations for tonnage here and
abroad. Comparatively new vessels
can be purchased fer about one-half
of the figure at which the shipyards
can afford to construct similar ships.
The only reason for any shipbuilding
activity is the need for boats of special
features which cannot be duplicated
among existing steamers.
The fleet owned by the United States
government consists to large extent
of standardized vessels which were
routes. In consequence, Amerdican
yards are receiving some orders for
specialized ships, such as ore carriers
on the lakes, fruit vessels for the
tropics, freight and passenger ships for
the coastwise and West Indian
services.
Surplus of Ships Drops Prices
The great surplus of ships available
for trans oceanic traffic has forced
prices down to remarkably low levels.
Owners are anxious to dispose of them
to end the heavy cost of maintaining
idle ships and to avoid the greater
depreciation on vessels withdrawn from
operation. This tendency is accentu-
ated by the efforts of the Shipping
Board to dispose Of its fleet and by the
frequent offer of tonnage owned by
bankrupt concerns.
America and foreign bankers alike
have suffered in the drastic decline in
ship values. A case was reported re-
Gently from Liverpool in which a local
bank discovered that it had mort
gage for $4,000 pounds sterling on a
vessel that could be sold for only 1000
pounds. Bondholders and bankers in
this country have been caught in the
failure of approximately fifty steam
ship companies in the last two years.
Bargains in Ships
Ship prices seem to have reached
the bottom for the present. Expert
enced officials here and abroad are
Quletly pIcKlNS up bargains. IN many
instances the steamers are to be held
inactive in anticipation of some I'M
provement in the market for suitable
vessels. So far as the United States
) is concerned, there is likely to be a
Surther slump in values if the subsidy
sin is defeated. Many concerns are
fnow struggling to hold their heads
above water in hope of government re-
lief. There is also the probability that
if the Shipping Board is abandoned by
Congress the vast government feet will
be thrown on the market withoet re-
gard for price.
The following figures give com
parison of the trend of ship sales in
the United States and Great Britain in
the last four years. The British
figures are based upon actual sales
The American figures are those asked
by the Shipping Board, as the owner OF
most of the available tonnage under
the United States flag. Pounds ster.
ling are converted to dollars at the
rate prevailing at the time.
Britain US
1s1e-s86 a deadweight 500
1870 a on