The daily monitor leader. [volume] (Mount Clemens, Mich.) 1942-19??, 1945-06-08
. BEHIND THE SCENES
IN WASHINGTON .


terested or able to take care Of
anything beyond their own i'm.
mediate and most pressing do.
nestle needs Is great question.
CHEAP LABOR GAVE
JAPS EDGE
Japan's cheap labor, cheap
ship construction and operating
costs, plus ample government
subsidies for all merchant ma
rine sailings under the japanese
flag, resulted in freight and pas
senger rates so low that no other
nation could compete In the pre-
war Pacific. But with the Japs
now out of competitive picture,
the hopes that American ship
operators can capture . large
part of this Pacific trade are def
initely bright. according to such
men as Hugh Gallagher OF the
Matson Lines, Russell Lutz Of
the American President Lines,
John E. Cushing of the War
Shipping Administration.
To keep the American flag on
the Pacific will take some form
Of subsidy, they and all other
shipping men seem to agree, but
they emphasize that this ques-
ton of shipping subsidies Is
pretty generally misunderstood,
and in any case the amount Of
subsidies paid out will always
be less than the cost Of having
TO build up q new merchant ma
rlne from scratch, as this coun-
try has had to do in two world
wars.
Cost of the War ! fleet was
four billion dollars. That fleet
was scrapped when the Ameri-
can Congress and American pub
lie opinion as a whole refused
to support a U. S. merchant
marine. The cost OF the War II
fleet will be between IL and IS
billion dollars. II this modern
fleet is also allowed to 60 TO the
scrap heap, it will only mean
that u. S. foreign trade will
again have to be dependent on
ships of other nations.
CONSTRUCTION SUBSIDY
URGED
Subsidies to keep u. S. ships
sfloat after the war can be ap-
piled in several ways. First as a
ship construction subsidy, which
is really a subsidy to U. S. ship
building labor. u. S. law does
not permit any U. S. shipping
line to operate q vessel built In
a foreign country, where costs
OF construction are much lower.
This being the situation, II Is
argued that American-built ships
should be sold to private opera
tors at costs equivalent to for
eign construction costs, the gov
eminent paying the subsidy.
U. S. and foreign shipping lines
would then have an even start
and could compete on more
equal terms through shipping
conference agreements on equal
rates.
Conference rates are now le-
galized in the United States.
Even though they do constitute
q kind Of cartel agreement which
costs the skipper more money
based on q fair return to u. S.
ship operators who have higher
wage rates and food costs. Con-
ference rates are accepted by
foreign ship operators because
they yield higher profits.
When conference agreements
break down and rate wars are
instituted through the payment
of operating subsidies by for
eign governments to their ship
ping lines, then Of course u. s.
lines cannot compete.
Under such conditions the
American ship operator must
turn to the U. s. government
and ask for a subsidy. But even
so, U. S. law permits the pay
ment of these subsidies only
when they are necessary to keep
a line In operation.
It is on this basis that U. S.
shipping interests must embark
to capture postwar Pacific trade.