AMERICA'S MERCHANT FLEET

Dominion, Volume 12, Issue 228, 20 June 1919, Page 7

AMERICA'S MERCHANT FLEET

STATE SHIPS ON EASY TERMS

AN INTERESTING STATEMENT

' The New York correspondent of the London "Times," writing on March 27, states:—

; Mr; Edward N. l Hurley, chairman of the United States Shipping Board, 'presented to the National Marine League, to-day his scheme for operating the American Mercantile Marine. The nation,, as a .whole; is utterly unconscious of the magnitude of the problems involved ill the successful organisation and working of the vast fleet that this country has built and is building as (he result of tho war. As many solutions are being proposed as in the case of the railways. Briefly, Mr. Hurley's solution is to sell the'vessels of Government construction to private owners at the market price on easy terms of- payment, but to reserve' to ' tho Government a certain measure of control over rates and routes.

.Mr, Hurley began the sketch of .his scheme with a reference to the darkest days' of the ■ submarine warfare, \vher* strident cries' of "Ships, ■ ships, ships" we're reaching this country from Grep> Britain. Ho recalled the strenuous exertion's of Lord Northcliffe, "who knew tlw seriousness of the situation, who delivered speeches in many States urging tho gren.t necessity of ships, and who called on me frequently to find out what progress we. were making." A building programme was developed in response to these appeals regardless of cost, with tho result that at the time of the signing of the'armistice the United States had e?' tablished a world "record" in construction, • having- completed 34i ships yards, with 1284 launching-ways, or more than double the number of yards owned, by the rest'of the world. If the programme of construction is carried out there will bo under the American flag next year 16,732,700 dead, weight tons of oceangoing steel cargo and passenger ships. This .fleet would be equivalent to almost half the merchant tonnage which plied the seas to-day under the flags of all nations combined, and- the Government . owned, 70 per cent. • ■ ; Details, of the Scheme. Mr. Hurley recited the arguments foi and against various plans of Government and private ownership hitherto advocat-. Ed, and said ho had been led to the conclusion that the ships should be sold to and trorked by American citizen* under no restrictions other than tho term ; < of the bill of sale and the fixing of maximum freight rates. He proposed that 2S per cent, of the purchase price of each ship should be paid down, tho remainder falling due and payable in graded instalments over a period not exceeding ten years. The Government should tjake and hold a mortgage for the unpaid balanco, charging interest, at the customary commercial rate of 5 per cent.- One-fifth of this interest, representing the difference between the customary Government nnd the customary commercial rate of inter est, should ibe paid into the Merchant Marine Development Fund. The purchaser should be required to insure with a.n American marine insurance company his equity in the vessel, and, because the American marina insurance market had not at present sufficient resources to underwrite all the vessels tho Government had to sell, the Government should carry in its own fund, but for the purchaser's account, the hull and machinery insurance covering that part of the ves< sel for which, the payment had not been made. Experience had' shown that the, Government could cany this insurance for at least one per cent, less than tho open market rate. But his proposal was that the open market rate should be charged and the difference paid into the Merchant. Marine Development Fund. ' A Federal Charter. No .transfer of a vessel to a foreign registry should be permitted without the express ■ permission of the Government. Each purchaser wishing to operate in' foreign .trade, should be obliged' to . ih: corporate under k Federal charter,. aiul siioh charter should provide that no stock should be issued in excess of the money value actually paid in. on the vessel property, and.no stock'should be issued or transferred to an alien. It should also provide that one member of tho board of directors for each company should be named by the Government. Legislation' should also be enacted providing fur periodical meetings of these Governmentnamed directors in the city of Washington, where they would constitute an official body which would confer with the Shipping Board, or other designated Government agency, upon problems and questions affecting the welfare of the American merchant marine and the administration of the Merchant Marine Development Fund. In cases where the Government sold a ship upon condition- that it should bB worked on a, route not immediately profitable it would be necessary to provide for the payment of interest from tho Merchant Marine Develonment Fund. On the basis of 1,000,000,00*0d01.' {JIM? 000,000) .worth of ships, this fund would be 14,000,000d0i. (£2,800,000), an amount more than sufficient to take care of all deficiencies.

The'chairman of the Shipping Board dwelt at some length on the desirability of fixing the terms-of salo so as to enable small owners to flourish, and upon the absolute necessity of • developing a merchant marine insurance market capable of carrying Hie insurance of ail vessels under.the. American flag.