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Shipbuilding Declines (Continued from Page 73) United States navy yards compete with the private shipyards for the work of constructing naval vessels and reconditioning shipping board ves- sels. This competition is both dis- turbing and discouraging to the pri- vate shipyard. The larger private shipyards have spent millions of dol- lars to provide facilities for building the highest class naval vessels and prior to 1902 built all of the then modern vessels for the navy. Since that time, however, navy yards have spent and are spending in excess of $200,000,000 in the building of naval vessels. In the past seven years naval contracts to the value of $50,- 000,000 have been placed with pri- vate yards and about an equal volume of naval construction has been placed in navy yards. Congressional acts making appropriations for the con- struction of naval vessels contain restrictive clauses as to whether such naval vessels shall be constructed in private shipyards or in navy yards, but requiring them to be built in navy yards “when time and facilities per- mit” and such construction “would not involve an .appreciable increase in cost to the government.” ae The shipbuilding industry has al- ways been highly competitive and past experience has shown that the cost of construction of naval vessels in navy yards is greater than the cost of construction in private shipyards. Due to the present depressed condi- tion of the shipbuilding industry and the highly competitive efforts of the shipyards to obtain work these re- strictive provisions are fallacious and should be eliminated from naval ap- propriation acts. Entirely aside from the question of cost, navy yards are essentially ‘naval bases” and required for main- tenance of the naval fleet and for storing and furnishing supplies and equipment. In times of emergency they need all of their capacity for these purposes and have neither the time for the facilities available for “new ship construction. Furthermore, money necessary to operate and main- tain navy yards is derived from taxes, a part of which is paid by private shipyards. The private shipyards pay city, county, state and federal taxes from the income derived from their business and it seems hardly equitable that the navy yards should compete with an industry that helps to support the nation. Naval contracts of the value of $50,000,000 awarded to the navy yards during the past few years, if awarded to private shipyards, would have aided 99 them substantially and helped to maintain efficient organizations. Finally, what are the future pros- pects for the private shipyard and what can be done to help the in- dustry ? Some ships will be built for the navy. There is no prospect, however, that there will be enough of these ships built in private shipyards to provide from this source the substan- tial backlog which existed before the World war. The shipyards can be materially helped, however, by the navy yards discontinuing their com- petition and by building all naval vessels in private yards. To accom- plish this substantial aid the restric- tive provisions previously referred to should be eliminated from the acts appropriating money for naval con- struction and thereby give the navy department greater freedom and more discretion in awarding contracts. Eliminate Cost Differential The United States shipping board may undertake some new ship con- struction; this, however, is. entirely problematical and cannot be depended upon as a continued source of demand for the facilities of the shipyards. There will be some construction for the domestic trade but this will not be sufficient to save the shipyards. Private shipowners are not justi- fied in contracting for the construction of new merchant vessels for the for- eign trade in private shipyards of this country because of their higher cost than. vessels constructed in for- eign shipyards. The domestic private shipyards therefore cannot anticipate orders for merchant vessels from pri- vate owners for this trade unless con- gress provides such owners with aid to overcome this handicap of cost of construction. The real answer to the problem is to establish a merchant marine policy that will encourage more ship- building for the coastal and _ inter- coastal trade and make possible the building of vessels for the foreign trade. Bills now before congress seek to accomplish this result and congress should act favorably on them. Compete in West Coast Orient Trade Sale by the shipping board of 38 steel steamers involved in three serv- ices from North Pacific coast dis- tricts is evidently to be followed by a defensive coalition by the pur- chasers in opposition to the Dollar interests for supremacy in Pacific coast shipping. It is no secret that the Dollar MARINE REVIEW—April, 1928 company was disappointed that the newly formed ‘Tacoma Oriental Co. offered a better price for the seven freighters, heretofore operated by the former company, under the name of the American Oriental line. The former operator failed to impress the board with the argument that inasmuch as he had an organization in the Orient he was in better posi- tion to take care of the business un- der private ownership than the newly organized Tacoma group. According to late developments, the Tacoma company and the California interests, who purchased 21 of the 38 ships, have reached an agreement with the Oregon Oriental line where- by all three companies will be han- dled in the Orient by agencies or- ganized by the Oregon company. This indicates a close understanding between the three lines which is un- derstood to involve an interchange of service as between ports both. in the Orient and on this side. The American Oriental line lost no time in replacing the freight tonnage it lost to the Tacoma group. Withdrawing five Dollar freighters, which have been operating on the intercoastal route for several years, announcement is made that freight service to the Far East will be con- tinued without a break. No an- nouncement has been ‘made as_ to continuance of the intercoastal serv- ice although it has been stated that within a short time other freighters, better suited to transpacific trade, will be acquired. Motor Liner Kungsholm Launched at Hamburg The motor liner KUNGSHOLM, build- ing for the Swedish American line for service between New York and Gothenburg, Sweden, was launched March 17 at the shipyards of Blohm & Voss at Hamburg. The christen- ing was performed by Mrs. Axel Carlander, wife of the president of the Swedish American line. The KUNGSHOLM will make her maiden voyage from Gothenburg Nov. 24 and from New York Dee. 8. While somewhat larger than her sistership, the motor liner GRIPSHOLM, which has the distinction of being the first transatlantic passenger motor- ship, the KUNGSHOLM will have the same general features. She will be powered with two double-acting eight- cylinder diesel engines, of 24,000 total horsepower propelling her at a speed of 18 knots. The vessels length is 608 feet and there will be accommo- dations for 250 first, 400 second and 1000 third class passengers.