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i nnn / i a4 i | | HTL) ah © ANN NUN) Gaim | Ante | | aay JA) cl . > | | a hy ( nnn nnn nnn VOL. 49 CLEVELAND . APRIL, 1919 NEW YORK No. 4 Y LN ) a : ping on Its Own Feet Specter of Government Operation is Proving Check to Entrance of Private TT: BUILD up an American merchant marine money must be raised by means of government bond .issues or. by popular subscriptions to private stocks. The experience of the past months has demonstrated that private capital is not going to attempt to compete with government investment in shipping. For instance the American-Hawaiian or any other solid conservative line is not going to attempt to operate ships in competition with those belonging to the government. The government may acquire the habit of writing off the capital cost of ships, whereas a private company cannot do any such thing. Should the private American lines be guaranteed that the government ships were to be let out on charter, that the shipping board was not going to be permitted to set up an operating board, this fear of government competition would disappear and confidence return. Why Ships Are Not Being Bought But today the shipping board owns approximately 90 per cent of the American merchant marine while the private operators own the remainder. It would be impossible for the 10 per cent to attempt to com- pete with the 90 per cent if the capital investment on the 90 per cent is arbitrarily written off by the shipping board for its own operating purposes and whenever it is thought export freight rates should be lowered. It is because of the fear that the gov- ernment is going into the operating game as well as the shipbuilding game that private lines refuse to purchase any of the ships which the shipping board is offering for sale. The cost of new tonnage has very little to do with this situation at present. Recently at an important conference of ship oper- ators the question was asked whether anyone would feel inclined to invest in new tonnage at a cost of $100 per ton. The reply was unanimous in the negative. And this price is less than tonnage can be purchased in England. The price has nothing to do with the problem just at present. The most disturbing element in recent days was Chairman Hurley’s asser- tion that the shipping board would write off one Capital into the Field » billion dollars of the cost of the new merchant marine in order to run the government’s vessels on lower freight rates. Private operators are perfectly willing to operate the government boats for a fair return; they are perfectly willing to accept competition upon a capital investment basis that is stable, but if the shipping board is to be permitted to set up an operating organization and hold it as a big stick over the private American iines, then the government would conspire to the setting up of an octopus that would drive all private individuals out of the business. The wiser heads in charge of shipbuilding are beginning to realize that the experiment with govern- ment control was based upon the wrong principle. They are willing to set it all down to the exigencies of war and count it money spent to save the nation during a great emergency. You do not have to look far to find a shipbuilder who is anxious to get rid of the contracts that have been let to him by the Emergency Fleet corporation, so that he can get ready to get back into the healthy game of building upon a competitive basis and for private account. Private Control Insures Future.Success Operators of ships are confident that there is a great future in shipping for the next ten years. If all the yards continue to build at their com- fortable maximum they will not restore the supply of ships to normal in less than four years. If the government withdraws from the industry private capital will go into it willingly, but of course private capital will not go into it with anything like the force that the government has in the past, because to interest private capital public confidence must be restored in the business of shipping overseas. The return to private initiative would be an evolution which would grow in momentum. This is the turning point of the ways. It remains for the public to say whether they prefer to have government ownership with a continuation of the waste and extravagance which has amounted almost to a public disgrace dur- ing the past two years. see A eli AO Remi VAR hi Beak did a ie Es a ae all es RS ead ROM SBE hk Ay a he ew een RI tae oe -