Evening star., 1923-08-27
FIGHT ON TO BALK
GOVERNMENT PLAN
/. OF SHIP OPERATION
Heads of Present Subsid-
iary Lines See Loss for
Selves in Change.
CORPORATIONS OWNED
BY NATION PROPOSED
Policy Laid Down by Dead Presi-
dent Would End Managing
Agent System.
By DAVID LAWRENCE.

BY DAVID LAWRENCE.
Efforts to change President Hard
ing's shipping policy have not abated.
The American Steamship Owners AS
sociation and the United States Ship
Operators Association tomorrow will
appeal to the Shipping Board for a
continuation with some modification
of the present method of operating
government ships through managing
agents.
The new suggestions involve a
much more efficient system of oper-
ating ships through agents, but do
not guarantee the government against
losses while insuring more or less the
profits OF the operators. There is lit
tie likelihood of the acceptance of the
plan, as the Shipping Board unani-
mously decided in the presence of Mr.
Harding last June to do away with
the managing agent method and sub
stitute system of subsidiary COM
panies. The latter scheme is being
held in allegiance out of courtesy to
President Coolidge, who has expressed
desire to inform himself about it.
Plan OF Board.
The boards plan is substantially as
follows:
Instead OF operating $50 ships as
at present under the Emergency Fleet
Corporation, there would be organized
instead from twelve to eighteen cor
porations which would be owned in
entirety by the United States govern
ment. No shipping company in private
hands operates more than fifty ships
and the purpose of the division into
subsidiary units is to enable the gov
operation. Several of the established
lines would be grouped in each COM
pany. The experts estimate that each
subsidiary company with its own
omize for the government and avoid
the duplication and endless account
ing which one organization encoun-
ters in auditing the various lines
Corporation.
Commission on Gross Revenues.
At present every line. as for ex-
ample the United States Lines, is op-
Grated by a managing agent who col
lects a commission on gross revenues
irrespective of whether any profit is
made for the government. The good will
of the line belongs to a private indi-
vfdual When the time comes to end
government operation the govern
ment would have only it's ships. The
boards plan now is to build the sub
sidiary corporations exactly as they
would have to be organized If pri-
vate capital were to enter the ship
ping business and buy the ships from
the government. But the government
would finance the enterprise and
would get all the profits If there are
any The object of the plan Is to cut
down losses and make the subsidiary
companies attractive to prospective
private purchasers. In other words.
If there is any good will in the es-
tablished shipping lines, the govern
ment feels that asset is derived from
bring a return in cash just as much
as the actual property. That would
be the case If any British steamship
line or any other were purchased by
furnished by the government and a
favorable commission contract there
could have been no good will built up.
Legality OF Plan.
The most intense pressure is being
exerted to prevent the Shipping Board
from putting into operation the plan
it has already decided upon. The
President is believed to have recog-
nized this and to have come to the
conclusion that when the boards plan
goes into operation it shall have the
whole-hearted support of the admins
tration. An opinion has been asked
from the Attorney General as to the
legality of the plan. The general
counsel of the Shipping Board and
prominent lawyers who have been
consulted say there is no doubt of the
legality. In fact, 1t is said the new
scheme Is far more in line with the
merchant marine act of 1920 than the
managing agent system. If the boards
plan Is overthrown, It may be as a
result of legal obstacles put In it's
path, but the general belief is that
if President Coolidge wants the plan
used he will not be Influenced by the
criticism of illegality in the face of
approval. by the array of counsel who
have passed on it.
1t seems certain that when Con-
quiry into the whole matter and
should it appear that private in
terests have been able to damage the
morale of the governments shipping
enterprise there will be even further
restrictions imposed which will insure
government independence of private
operation so long as the ships are
owned by the government.
Copyright. 1921