Evening star., 1936-07-05
BY JOHN L. COONTZ.

~ OF the American merchant
~ marine is in the making. For
20 years Congress has been
struggling with the question of an
adequate and effective merchant ma
rine for the United States, and for
20 years its efforts have produced
only failure. Now it is forgetting
the past and striking out again.
The new maritime law of 1886 gives
to American shipping new lease on
life. 1t gives to ship companies new
sinews for war to survive in a world
of cutthroat marine competition. 1t
gives to the Nation fleet of merchant
ships to carry our trade overseas when
other vessels fail, through war or other
cause 1t gives us an auxiliary naval
feet when war itself comes to our
shore. In short, it gives us American
owned ships. Annerican-manned ships
and ships for fighting purposes in
event of war against us.
The basic foundation Of the new
law is subsidies. These We have had
before, but not as now authorized
Under the old-1928-law shipping
companies were intrigued with the
proposition of building an adequate
national merchant marine through
liberal ocean mail contracts by the
Federal Government. Under the au-
thorization of that law shipping COM
panies were granted somewhat arbi-
trary sums for each mile of the out
ward voyage of their vessels carrying
United States mail. There was scarcely
any relationship between the amount
Of such subsidy involved in the pay
and the higher cost of ship con-
struction and operating cost, as COM
pared with similar costs to foreign
competitors.
COrrects Poor Relationship.
The new law corrects this poor re-
lationship. Under it there is a direct
relationship between ship cost and
operating cost as represented by
American built and operated vessels
and foreign built and operated
vessels.
The application of this correction is
found in the manner in which the sub
sidy is granted to the shipping COM
pany or companies. Under the old law
money paid out on ocean mail con-
tracts was supposed to-and did
supply sufficient funds for the COM
panies to expand. And many of them
did, building more ships and carrying
more trade. But the tendency was for
abuses to creep into relationship be-
tween the Government and the COM
panles. The public felt this. Dividends,
high expense accounts, salaries-all
tended to fix the belief in the public
mind that ship operators were making
great profits out of their Federal re-
lationship rather than expanding their
shipping business. And the period of
prosperity which prevailed at the time
Of the creation of the mail subsidies
undoubtedly did result in some bad
business judgments by some of the
benef1ciaries of the act, as reflected
large salaries, large expense accounts
and failure to provide reserves.
The new law attacks the problem
from a different angle. The subsidy
Is there, just as under the old law, but
1t Is direct subsidy with Uncle Sam
holding to one end of 1t. Instead Of
mail contracts over and above the cost
of transporting the mails, out of which
great prosperity might come If judi
ciously handled, the new law calls for
the building Of vessels for the inter-
ested companies by the Government
and the sale of them to the companies
on the installment plan. 1t acts for
American shipping in the following
manner:
Way Plan Operates.
An operating company wants to
build a ship for foreign trade. 1t can
be built abroad much more cheaply |
than at home. So, as the Government |
wants the ship built here and operated
under the American flag with an
American crew, the following PROPOSE
tion is made to the operating company. |
It Is told to draft plans of a modern
vessel to serve its purposes, If they be
justified, and to ascertain the foreign
cost OF this vessel. Then to submit the
plans to the Navy and comply with its
requirements to make the vessel