Evening star., 1941-03-30
Shipyards Face
Gigantic Task
As Orders Soar
Capacity to Expand,
Increased Earnings
Are Foreseen
Special Dispatch to The Star.

NEW YORK, March 29.-Work
against the huge volume of orders
for the United States Navy and for
commercial vessels assures ship
builders of capacity operations for a
long time to come, according to
survey made by the Standard q
Poor's Corp.
New shipyard capacity being add
ed will gradually come into opera
ton as the year progresses and will
considerably augment the present
rate Of ship construction. Profits
should rise about in line with the
increase in output. and net income
for 194l promises to exceed the eX-
cellent 1910 returns.
Coastal shipping companies will
experience more favorable opera
tions, but continued narrow margins
will prevent marked improvement in
earnings. Lake carriers should ben
eft from the high level of tonnage
in prospect, and satisfactory earn
ings are indicated.
Shipbuilding activity is now at the
highest level since the period dur
ing and Immediately after the World
War, and, assuming no later change
in Government plans as a result of
war developments, operations should
reach new highs over the next year.
Yard Facilities Taxed.
Not only are all yards, both Gov
ernment and private, actively en-
gagged in work on the huge Navy
Department orders to build up a
two-ocean Navy, but the facilities of
many private yards also are being
taxed to complete work on the large
scale commercial building program
also under way.
At the beginning of March, 1941,
there were 332 commercial vessels,
totaling 1,732,728 tons. under con-
struction. OF these, 1T vessels. to-
falling 4.300 tons, were being built
for the Maritime Commission. In
addition, arrangements have been
made for the construction of 200
emergency cargo vessels. approx
mating 100000 tons. for the Mari
time Commission and another so
vessels for the British government.
To speed up construction of all
these ships considerable expansion
in shipbuilding facilities is now un-
der way. In most cases the Gov
eminent is providing the necessary
funds to build these facilities and
the Navy will retain ownership
thereby protecting private operators
from the burden of excessive ca
pacity when the current demand for
ships ends.
These new facilities will be placed
in operation in coming months and
it is expected that by the latter
part of 1941 shipbuilding output will
be attaining new record levels. AL
ready efforts to speed up construc-
ton have materially shortened the
time required to complete the build
ing of both naval and commercial
vessels
Indications are that gross billings
Of all shipbuilding companies for
1941 will be well above the total
for 1910, which was the best in many
years. With the increasing rate of
construction permitting operating
economies. profit margins should re-
main ample. Despite prospective
heavy excess profits taxes most of
these companies should experience
further gains in earnings this year.
Ship Shortage Faced.
The large volume of world tonnage
which has been withdrawn from
regular service for special war use,
combined with the loss from sink
ings, has caused material shortage
in shipping available for foreign
service. This has forced United
States exporters and importers to
rely almost entirely upon American
flag tonnage for normal operations.
Available domestic tonnage, how
ever, has not been sufficient to meet
these needs, with the result that
an acute situation has prevailed in
shipping facilities to the Far East,
the West Indies and South America.
Little help Is now available from
the laid-up tonnage held by the
Maritime Commission, since such
vessels not already sold are being
pressed into service. Only the idle
Italian, German and Danish ton
mage in United States ports remains
as an immediate potential addition
to present facilities, and there is
considerable doubt as to our being
able to take over such ships unless
we actually declare war.
Because of existing conditions, the
Maritime Commission has taken
steps to control the situation by re-
questing ship owners to submit to
it any proposed sale or charter Of
their vessels, with a view of securing
the maximum use of all ships under
United States registry and to be in
position to regulate any system of
prioritieS set for American shipping.
Such action is expected also to pre-
vent any unreasonable increase in
freight rates caused by high sales
prices or charter rates.
Present cargo rates are far above
those existing before the war, run
ming from 25 per cent to more than
200 per cent higher in some cases.
Even though eventual control of rates
is probable, both cargo and charter
rates are expected to hold at high
levels for some time to come. Char
ter rates are now reported at ST to
$3.50 deadweight ton per month,
compared with less than SO during
the summer of 1910. AS long as pres
ent conditions exist, shipping con-
Germs specializing in foreign service,
or in position to charter their