Evening star., 1925-07-05

of assuring permanence of the Amer
lean flag in the overseas trade is
quietly coming to the fore again.
Fortunately for the United States,
the Government in Washington has
clung doggedly to- the merchant feet
of which it became possessed during
the World War. 1t has kept the
fleet on the seas. Ships have been
sold only to go into either the coast
wise trade or the overseas trade
under the American flag.
Eight years have elapsed since the
Government undertook in the stress
of war to build up an adequate mer-
chant marine. Time is aiding in the
solution of the merchant marine
problem, as it does in the solution
of other problems. The American
people today are in a far better posi-
ton TO judge what should be done
in regard 10 the merchant marine
than they were at the close of the
war, or in 1922, when the late Pres
ident Harding sought to force the
so-called ship subsidy bill through
Congress.
Fleet Must Be Kept. g"
But while time is aiding in solving
the problem. there is one solution
which never should be permitted
the elimination of the American
overseas merchant fleet. Either as
Government-own and operated or
as privately owned and operated, the
fleet should be maintained and fur
ther developed. The needs of
American commerce and American
national defense demand it.
Under the direction of President
Leigh c. Palmer of the Fleet Cor
poration, great strides have been
made in bringing about the more
economical and efficient operation of
the Government-owne fleet. This
progress is shown in the reduction
in the losses of the cargo vessels.
A little more than a year ago the
loss per vessel per voyage was up
ward of $4,000. Today this loss is
below $4,000. Admiral Palmer is
confident that this loss on the cargo
vessels of the Government can be
reduced ultimately to $500; that is
the goal toward which the Fleet Cor
poration is now working. A rise in
freight rates, another great war.
might bring about a still further re-
duction, or entirely wipe out the loss.
Heavy Depreciation Loss.
In addition to the loss due to opera
tlon, there is the loss due TO deprecia-
rion, and 1t has been figured that this
loss on the cargo fleet avera ges about
$4,000 per voyage. In other words, the
total loss would be $13,500 per voyage
If the efforts of the Fleet Corporation
10 reduce the operating expenses and
to increase the revenues through
freight are ultimately crowned with
success. With the present operating
fleet OF some 900 vessels this would
mean an annual loss to the Govern
ment of 100000, 900. At present the
Government is not figuring the de-
6nf a ion lAc1 D. .
kept on the ocean eventually they
must be replaced with new, and 20
years is the life usually allotted to a
cargo vessel. The operating loss would
be $10,00O,000 a year, and the replace
ments would cost about $4,000, 900
annually.
The Government has in operation Is
? passenger and combination passenger
and. cargo liners. including the great
Leviathan and the George Washing
ton. The replacement cost of this fleet
would average about $4,000. 900 a
year. If these vessels can be made to
break even, taken as a whole on their
operations, then the total cost to the
Government, year in and year out,
under the conditions outlined, would
approximate $40. 600, 900 $50 900 900
for replacements and $40, 200, 900 for
operating losses.
The studies made by the Fleet Cor
poration, and upon which Admiral
Palmer bases his conclusions. indicate
that operating losses on privately
owned American overseas vessels can
be made very much less than on the
GoVernment-owned vessels. In fact
The average private owner, it is be-
neNed, could reduce the loss per Voy-
age of the cargo vessels to s4,5OO.
Measure of Government Aid.
II there is to be Government aid
TO private American overseas shipping
TINS $4,000 per voyage may be taken
as the measure of such aid so far as
the cargo vessels are concerned. The
passenger vessels present a somewhat
different problem.
To grant such aid to all the Govern.
ment-owned vessels and the privately
owned vessels flying the American
nag in overseas trade would amount
to about $7.500,000 a year. Passenger
and mail lines would require probably
another S7,500,00 and the total esti-
mated Government aid would be s15,-
10000 to maintain the present Ameri-
ca overseas fleet, cargo and pas
senger vessels and Government owned
ana privately owned, on a competitive
basis with the merchant fleets of for
eign5na tions
This is the lowest estimate of Gov
ernment aid needed for the merchant
marine yet advanced. But it has this
advantage over other estimates-it is
made after much careful study and
with the facts more fully developed
Operation VS.. Subsidy.
Bear this in micd: Continued Gov
efnment operation of the merchant
4 vessels means an expenditure Of about
a 4OOOO,OOO. including replacement
costs. Government aid required to
keep this fleet going in private opera
ton, plus the vessels now in private
operation under the American flag and
In the overseas trade, would cost about
|, xl5,OOO,0 900. Obviously the saving to
the taxpayers if Government aid were
adopted would be $25, ,00O,0 900 annually.
The Congress and the people have
to determine whether they prefer to
continue as at present, with the
Government paying all the losses Of
the fleet now maintained. or whether
they desire to grant some kind OF Gov
ernment aid to meet the differential
between the cost Of operation Of an
American vessel and the cost of opera
tlon OF British or German or
Japanese ship.
Subsidy" is a distasteful term to
the American public. But Govern
ment aid to the merchant marine for
the purpose of the national defense
and the promotion of commerce takes
on another aspect.
Crews i'm Naval Reserve.
Chairman O'Connor of the Shipping
Board has already announced personal
desire to see established Government
aid through payments to the crews of
merchant vessels sufficient to Offset
the wage differential now to the ad-