AMERICAN SHIPS

Evening Post, Volume CI, Issue 14, 17 January 1921, Page 2

AMERICAN SHIPS

A DEPRESSING OUTLOOK

GRIEVOUS MISTAKES MADE

UNSALEABLE WOODEN VESSELS.

A remarkable situation has developed on y the other side of the Atlantic which suggests that nationalisation of dipping, oven in the modified form whioh now ob.tains iv the United Statee, may prove an extremely costly experiment (writes Archibald Hurd, in the London Daily Telegraph). Everyone knows how the Americans came into possession of a great merchant..fleet; it 13 a story which does honour-^liko to their devotion to the Allied cause, to their organising ability, and to the adaptability and industry of the workers; for many of the yards had to be suddenly created and the men who were to build the ships given an intensive training in the use of their tools. It was a fins achievement. \Yh<:n thaf ■armistice came, the problem which arose was an. embarrassing one. What should be done with all the ships which * had been constructed at a cost of upwardsoosf s 3,000,000,000 dol., say, £900,000.000 at approximately the present rate of exchange? Tho policy was worked out by the Shipping Board, presided over, not by a man versed in commercial affairs, but by an officer of the' Navy, Admiral William Benson, whose knowledge of the economics of the sea is certainly not extensive. As is now being increasingly realised in the United States, grievous mistakes were made. 400 WOODEN OR CONCRETE SHIPS. In spite of all efforts the Shipping Board has succeeded in selling only an infinitesimal proportion of the fleet of wooden and concrete ships built under the war programme. Action was delayed so lonjr that the bottom fell out of the market. It now has on its hande nearly 400 of these vessels, and it seems unlikely, with about 7,000,000 tons of steel construction to bo completed in the world's shipyards during the next twelve months, that it will be possible to realiso the vast capital which they represent. An effort was recently raado to sell 310 of them, a-nd only four bids, _ ridiculously low, wcro received, suggesting that the 'bidders regarded them as good only" as "scrap I timber." It is reported that they cost about 130 dol. a ton to build, and the best price co far offered comes out as less than 15 dol. a ton. Admiral Benson, the chairman of the Shipping Board, has made an admission which will cause Americans some disquietude when they rocall the delay which has occurred in putting these vessels on the market. Whether tho Shipping Board has been solely to blame in this matter does not concei-n us, who are merely spectators—friendly spectators—of events, endeavouring to Icarn from American experience. "It looks as though there is no American market for the wooden ships," Admiral Benson has stated. "The reason is that they cannot be operated at a profit by Americana. The insurance rates are excessively high, and the. American maritime laws Tequire a large crew at big salaries. "I cannot see how* the board can fikposc of them unless it sells them to foreign purchasers. Foreign operators, whose maritime laws do not require largo crew? and who would not have'to pay such hiffb wages, might find it profitable to take them over and operate iliem. 'J liny coul'l not be ?old to foreign operators at the present time in any event. The Jones Act requires the approval of fivo of this seven members of the now board, and tho lioard has not yet been appointed. "The wooden ships are tied up at various ports along the AtlauMa and Pacific coasts," Admiral Benson added. "At Norfolk, Va., them are 192 of thorn in ' o James Riveiv. Tho"./cost of maintaining them, even when t;ed up, is largo, out is being reduced rapidly. It is costing about 100 dolla-rs a month for -each of the wooden vessels ■ in tho James Hi /or, as compared with between 5000 doWu and 6000 <M lara a few months ago. 7ho cost will be further reduced when tho ships are closed fo: ihe winter." The posftion is thus an extraordinary oil-. Tor, on the 'me naiui, ''«;ri 1 is •;:> market for these vessels in tho United Stats; and, on. tho oilier, the famous Jones Act, which was intended to rromote American ;naritime interests, fr.-r----bids their sale except in circumstances which did not. exist when Admiral Benson spoke. The board has now been fully constitute'?, but it will be no matter of surprise if it is found that the vessels' aro jioo unsaleable to foreigners. IDLE SHIPBUILDING WAYS Then turn to another aspect of thn American shipping position. Of the stenl shipbuilding ways 62 per cent, aro empty, quite apart from the idlo yards wiiich have been turning out wooden and conorete vessels. According to tho New York Journal of Commerce, there are now 627 ways in ninety-eight shipyards which are capable of turning out steel ships Tho growth bl the industry ia apparent when it is known that there existed in tho spring of 1917 only 239 building 1 berths. On Ist October a careful survey of the industry rcealefl that, ot the t>27 ways 226 were idle and 101 were, to be dismantled. The inactivTly which has fallen on those _ establislunonts is traceable in part to. ffie failuro of tho Shipping Board to sell the great volume of shipping which it inherited from the war to any comers — American or foreign. Its wise policy would have been to "clear out" of the business as soon as possible and at almost any loss before tho fall in freights occurred, ampunting in tho past six month* to about; 50 pe,r cent. Now the futuro of an immense amount of tonnage—wooden and steel—is uncertain, and shipowners are evidently holding back fre6h orders until they know whether they will be able to buy any of these completed shijis at a "knock-down" price. Hence shipbuilding in the United States is steadily declining from month to month. Tho fall in freights' and the high cost of operating American ships has made shipowners nervous. Th' 6 Shipping Board, after deciding on its post-war policy, mad© an agreoment with them for the sharing of profits on vessels allocated to them for management. What ia tho. position of the shipowners- when there is no prospect of any profit to bo shared? The framers of this modified scheme of nationalised shipping did not foresee this development. There was a timo when there was a strugglo for ships on tho' profit-sharing terms, but now that the shipping outlook has changed there is I anxiety to get rid of unremunerative vessels. SHIPS RUN AT A LOSS. It is stated on authority, which there is no reason to doubt, that 75 per cent. of the Government-owned vessels aro being run by tho unfortunate shipowners at a- loss; and American 'business men are not in the habit of watching adverse ! balances mount up. So upwards of 200 steel ships—that is quito apart from ths wooden and concrete vessels—have been returned to the Shipping Board. lam again indebted to the Journal of Commerce, of New York, for interesting details of the recent stages of this movement: A few days ago W. R. Grace and Co. restored to the Shipping Board tho last vessel which it was operating for Government account. At one timo more than forty Shipping Board steamers flow the Grace house flag-. Tho International Mercantile Marino Company has turned back more than thirty ships during the past few weeks, and, it is re-ported, will aligtnent this number with other freighters. Tho Barber Steamship Lines, which have been favourod at limes with move than 300-.000 dead-v;eight tons of ships, have followed the lead of the other old companion and havo ceased to Hervo *is managing agents for the board. The France and Canada Steamship Company and various other American lines havo taken similar action-. Some of the largest steel freight carriers have been returned. A BRITISH CONTRAST. The defect of all bureaucratic :tdministration is that it is slow to react to changed conditions. Fortunately for us, Sir Joseph Macjay, tho Shipping Control ler, realised this defect, ■and, soon a.'icr tho signing of tho Armistice, his d.;im-. mined to realise- the ehippiu" wiiich v.a&

left on the hands of his department without delay, for in the later stage of the war the British Government, like the American Government, also went in for shipbuilding. He migSt have decided that the Ministry of Shipping 6hould sell these vesssls or ho might have turned them over to the Disposals Board. He steered clear of Both mistakes. Lord Inchcapo, enjoying the confidence alike of the Government and of shipowners, was asked to undertake the sale. It was not an enviable Task, but Lord Inchcape accepted it. The result is that very expeditioualy the whole of; the ships were cold at good prices, tho work being done .vithout fee or reward, and then came the slump in freights. That transaction, in contrast with the experiences through which the United States Shipping Board is passing, illustrates tho virtues of individualism as compared with eventhe modified form of i.ationalisation whioh was adopted on tha other sido of the Atlantic. The same procedure is now being followed ivith tho ex-enetny tonnage which has been surrendered to this country under the feace Treaty.