New-York tribune., 1922-10-22
American Shipping Lines Face
Post Var Financial Problem
Must Use High Capital in U. 8. and Compete With
Low Capital Abroad; Shipping Board Attempts
By David s. Kennedy

siderable speculation as to the func-
tions OF the new bank, what part II will
play In the future and whether it will
attempt to remove the financial diff
culties confronting American shipping.
There have been rumors that it would
provide the backbone for a vast COM
pany to take over the Leviathan and
other ex-German vessels from the
board and build T0,00o-ton ships to
dominate the Atlantic.
Directors Of the Maritime Trust
Company deny that it is to be philan-
thropic institution, lending money be-
low the market rate, playing god
father to hopeful steamship companies
or extending nine to twelve months
credit to export trade while other
banks End themselves unable to make
the time longer than three months.
The purpose of the bank is to con-
| fne itself to accepted financial prac-
stices, but to give special attention to
ocean transportation, including both
ships and their cargoes. In doing this
it will have the advantage of the judg-
ment Of men in shipping and export
trade with years of experience. In
measure the steamship men are seek
ing to finance themselves in limited
way, taking up the task where other
banks have left Off, but without trying
TO remove the fundamental differences
between American and foreign capital
as related to marine companies. The
creators Of the bank have nothing Of
failure will derend, as In the ease Of
other banks, upon tho executive ability
Of the officers.
No Shipping Trust
There is nothing to indicate that the
Maritime Trust Company will aoat
huge shipping trust to take over the
American flag. All evidence ts to the
contrary. It does not contemplate the
launching Of new enterprises, and
while its activities will extend to ex-
port commerce they will not go beyond
practical financing. There is no intcn-
tion Of attempting functions such as
those contemplated by concerns organ
lied under the Webb pomerene act.
The Maritime Trust Company must
be regarded as banking enterprise
with an excellent opportunity in field
tion Of the larger problems the Ameri-
can merchant marine must look else
whore.
Tho Harding Administration, includ-
ing the Shipping Board, is seeking to
provide an answer In the merchant
marine act Of 1922, otherwise known as
the ship subsidy bill. The purpose Of
this measure is (1) to offset operating
differences by direct and indirect aid,
and (2) to remove the capital differen-
tial by providing funds at interest
rates approximating those obtainable
abroad.
If the operating costs Of American
shipe were equalized, the tendency
would be for private financial institu-
tions to show greater confidence in
American marine companies, but there
would remain the fact that the local
investor is not content to receive less
| than s to 8 per cent on his money,
while in Great Britain a return of or
per cent is often considered salts
factory.
Section IL of the merchant marine
act Of 1920 authorized the Shipping
Board to set aside S25,000,000 each
year for five years to be used as a con-
struction loan fund. 1t was the inten-
tion that the $125,000,000 provided in
this manner should be revolving
fund, to be used by the board in pro-
noting the construction Of new and
efficient types Of vessels, and In the
maintenance Of essential trade routes.
The money would have to be spent in
American shipyards.. Sums could be
ieut IOr HOC uioIe Vndn tWo-tulEus VI
the cost Of ship, and in return the
board would require first lien upon
the vessel.
For two years following the enact
ment of the act the board was not able
to take enough money from the receipts
of sales and operations to start the
loan fund, but within the last few
months approximately $25,000.000 has
been set aside.
The Jones act, that Of 1920, did not
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