STANDARD SHIPS

Dominion, Volume 11, Issue 288, 24 August 1918, Page 3

STANDARD SHIPS

PROPOSED STATE AUCTION

RELIEF OF NATIONAL FINANCE

A suggestion is now being discussed among shipowners in connection with national fiiianco which seems worthy, of consideration, states the shipping correspondent of tlio London "Times." A very large sum of money has been invested by the State in new tonnage— in standard ships built in tho British Isles and in vessels bought at high prices in tho United States and Japan. All theso ships are registered in tho name's of the Shipping Controller, and aro allotted to shipping firms to manage. The management consists largely of providing the crows and securing 3tores, etc., for tho employment of the vessels is directed by the Ministry of Shipping and the management fees are quite small. Tho work of managing the vessels is regarded as an honour by tho owners, and certainly not as at all remunerative. The ships remain the property of tho 1 State. ' The suggestion now made is that theso ships, or some of them, should at once be put up to auction. The Stato would thus recover its outlay or, in the case of vessels bought at very high prices abroad, part of the expenditure. It is generally understood that the present intention is to sell the ship§ to owners after the end of tho war, and in the cases of vessels bought at enormous prices' a loss will probably then have to be faced. Why, it is asked, should the State remain o.ut of its money in the meantime ? Tho ships would bo sold as requisitioned to the Government. That is to say, the owners would merely receive rates of hire from tho Government, and all profits above these terms would go to the State, as now happens with the earnings of all sffips requisitioned from privato owners. Tho present rates for cargo tonnage aro based on a payment of lis. per gross ton per month, and, in order to induce owners to bid for these ships, the rates would, 110 doubt, have to be revised, unless a special scheme were devised for financing the purchases. It is asserted definitely that there is scarcely any profit, or uo profit at all, to bo earned on tho Blue-took rates paid for tho smaller cargo vessels. The new rates would have to be such that owners could pay prices which, with vessels built 011 reasonable terms, would enable owners to allow for the. usual depreciation and earn interest on their capital. All the accounts could bo subject to audit on behalf of the Government. An alternative to a complete revision of the Blue-book rates would bo the simple method of guaranteeing owners nil agreed rate ot' interest on their capital expenditure plus an allowance, also to be mutually agreed upon, for depreciation. Benefit to Shipping Industry, It will be asked what benefit would accrue to the shipping industry by a transaction of either of these kinds. A chief merit, of tho scheme would he that it would imuiedialoly restore confidence. During tho war at. least ten owners, well known in tho shipping industry, have sold their llcets. There is good reason to believe that at least fourteen more ownerships are ready to sell their llcets at the first opportunity. In some cases the decision has been taken because rue partners and managers are getting 011 in' years and they see the possibility of a handsome return on the capital they invested many years ago. But underlying these causes is tho uncertainty of the fillurc; the fear that the' Stale will make it more and moro difficult l'or private ownership to continue. Control during the war is absolutely essential, hut it is individual enterprise that built up the mercantile marine which has ennoled the war to be carried on. If the Government saw its way by offering the State ships for sale now there is no doubt that owners whose fleets have been depleted by submarines and owners who have sold their ships would make handsome bids for the vessels on the strength of after-war requirements, and the State would be recouped for much of its piesent outlay in new tonnage.