Evening star., 1924-04-06
BRITISH DEBT TO u. S.
AND SHIPS UNRELATED
Competition of American Marine Cannot
Be Held Responsible for English
Inability to Pay.

slate and lend the British money at
low rate to purchase American goods.
it is contended.
But an. unfavorable trade balance
between nations always tends to bal
ance itself, and it is to be expected
that this will happen between the
United States and Great Britain. In
the United States there is today
supera bundance of gold, and the pos
session of large quantities of gold
brings about an increase in prices
The country that lacks gold has lower
prices. If there were free trade be-
tween the United States and Great
Britain today Britain would furnish
goods and services to the United
States, where the higher prices main
tain, until the trade balance was more
equal. But the United States has
sought to offset this economic law by
providing protective tariffs for Amer
lean goods, and so far as services are
concerned, by operating the American
merchant marine at government EN-
pense. ,
Although the protective tariff and
the government owned merchant ma
rine may retard the readjuStment. of
the trade balance between the two
countries, it is not believed that they
can entirely halt such readjustments.
When United states Takes LOSSES.
As an Illustration that this is hap
pening. it will be found that the
Shipping Board is suffering greater
losses in all trades where it meets
heavy British competition. the
routes to the United Kingdom. Africa,
Australia and India, for example,
which were formerly almost entirely
heaviest losing routes today. Because
of the United States Treasury back
of the government owned feet, the
feet can continue to be operated at a
loss, but these losses probably will
continue very heavy as long as the
trade balance between the two coun-
tries continues to be what it is.
The greater number of American
ships put into the carrying trade the
lower the freight rates will be fore
ed. Naturally this will be hard on
British shipping, and also 1t will
make the deficit due to the operation
of the American ships. which must
be borne by the government, higher.
The Shipping Board and Emergency
Fleet Corporation officials are engaged
in a study of just what American ton
mage is needed in the various trade
routes and what tonnage is the most
efficient To hopd all the routes with
American tonnage and reduce the freight
rates practically TO nothing might well
bring much larger share of the car
rying trade to American vessels. On
the other hand, it would result in fore
ing the deficit to be met because of
the operation of these vessels to a
point where Congress might throw up
its hands and determine to abandon the
merchant fleet entirely.
.s VIII Keep Rates Low.
The British debt TO this country, it
is argued, will really have the effect
of keeping rates on established British
routes so low that they will carry most
of the trade on those routes regardless
of anything that the government of the
United States can do in reason to pre-
vent it.
This reasoning, however, does not
lead 10 a conclusion that the American
merchant fleet should be abandoned,
though it does give hope to the British
that eventually they must win through
to better conditions. There is a place
on the seas for American vessels. and
they are needed both as an aid to our
commerce, and as an arm of the ma
tional defense. From the latter stand
point 1t may be suggested that it
costs this country far more to maintain
its Army per man than it does France,
Great Britain, Japan and other foreign
nations, and that it costs far more to
maintain it's navy per unit than it does
those nations, but the abandonment of
the Army and Navy because Of that
fact has not yet been suggested.