STEADY DECLINE

Evening Post, Volume CVI, Issue 85, 20 October 1928, Page 31

STEADY DECLINE

AMERICAN SHIPPING NEW BID FOR REVIVAL Himr costs handicap hi a recent, message from the 2\'e\v York uoiTcspontlcnt of the "Daily Telegraph," the chaivmau of the United States Shipping Board was quoted as declaring- that the Jones-White Merchant Marine Bill— which President Coolidge signed on 23rd May— proclaimed to the maritime world that the United States is "'on the sea to stay." . While there is no disposition in British shipping circles to belittle the importance of this measure, it is felt that neither the granting of Government loans at nominal rates of interest nor the payment of subsidies, both direct and indirect, will suffice to rescue American shipping from the plight into which..Ht'Jias fallen. The effects of this new legislation are expected to prove transitory.' Since ninny American shipowners will probably take advantage of the favourable terms offered by their Government, which will enable them to replace their -worn-out fleets by brand-new tonnage, British shipping must be prepared to' meet, for some time, to come, a more intensified competition from this quarter. Sooner' or later, however, the inexorable ccouomic facts which arc responsible at bottom for the rapid decline of the American shipping industry are bound to reassert their influence. Therefore, unless the American nation is willing to subsidise its merchant marine peininnently, and on a lavish scale, the situation a few years hence will be no better than it is to-day. HIGH RUNNING COSTS. Certain American politicians seem to be strangely, ignorant of the economics of shipping. They appear to be under the delusion that in order to capture trade from British and other ocean-carriers, it is only necessary to build up-to-date and speedy ships. The U.S. Shipping Board experts.know better, however, and it may be doubted whether they share the lighthearted optimism of their chairman, Mr. O'Connor, with regard to the effects of the Jones-White Bill, which docs nothing to relieve the handicap of exorbitant running costs—the factor chiefly responsible for the present situation. It is .a most significant circumstance that while that section of the American merchant marina which is employed in domestic trade, and therefore immune from foreign competition, is expanding, the section engaged -in overseas trade, which enjoys no such iifjiminity, is rapidly diminishing. In the past six years the number of American vessels trading overseas has declined by nearly 50 per cent., and, in spite of strenuous efforts to give effect to tlie slogan of "Americai'i ships for American goods," only 22 per cent, of all American overseas exports'arc carried in American bottoms. Cargo tonnage is the only reliable index to the actual work performed by a merchant navy, and wlicn tins test is applied to. the American marine the result is startling.' Within the period 1921-26 the total foreign import and export cargo tonnage of thq^ United States declined by !) per cent., while that carried in foreign ships increased-by 87.4 per cent. As illustrating the causes.of the obsolescence from which the. American merchant marine is suffering, the following figures are instructive. • ' ■ RAPID,DECLINE IN BUILDING. Since 1021' there have been built for Great Britain, Germany, Japan, France, and Italy 1344 vessels of: 2000 tons gross and more. In the same period only thirtythree American -ships of equivalent sizes have been built. At the present time the five countries first named are building 232 ocean-going vessels, the United States only nine. v Statistics just issued by the United States Shipping Board serve to explain why there are so few new American ships under construction. To build an oil-burn-ing cargo vessel" of SOOO tons in America would cost £250.000; in England it could be built for £160,000. Broadly speaking, American building costs are from 33 to 40 per cent, higher than British, but where special vessels are concerned the disparity is far greater. . . It appears, for instance, that a British firm recently quoted £144,000 for the construction of a 10,000-ton 13-knot Diesel cargo ship for the Dollar Lines, whereas the lowest. American bid was £334,000; Consequently i£ the ship were built in. America, and taking twenty years as its useful life, the owners would have to earn £9500 a year to cover the excess depreciation, -without counting interest on the larger capital .outlay; before competition ■with the foreign-built ship became practicable. The United States Shipping Board lias also collated statistics with regard to the operating costs of- American and foreign vessels, using a 9000-ton ship as the standard. For the American ship the monthly wage and sustenance cost works out at £808, for the British ship at £538, for the Italian ship £310/ for the French ship £285, and for the Japanese ship £274. Quite apart from' the question of initial cost, these figures ■'■• amply explain why American shipping is being driven off the ocean routes. Excessive operating costs are, in fact, the root of the trouble, and since the Jones-White Bill offers no relief in this respect it is difficult to understand why the Shipping Board chairman should hail it as a panacea. WAR-TIME DANGERS. . It would, however, be a great mistake to imagine that the United States will rest satisfied witli half-measures when it is a question of saving . the shipping industry from decay. The American people arc being taught to regard an adequate and efficient merchant marine as something that is indispensable if they wish to remain safe and prosperous. It is pointed out to them that dependence on foreign ships for the carriage of American goods may be well enough so long as the foreign ships are available, but what would happen to America's foreign trade were another war to break out in Europe, involving the "withdrawal of most of these ships from, the. ocean routes? Without an,.adequate merchant fleet of their own,' the American people would promptly forfeit -most of their overseas trade, and enormous losses, would result. During the last war it is estimated the exorbitant charges imposed by foreign shipping for the transport of •American goods resulted in an ocean freight bill of £1,000,000,000, while the hurried construction of a. merchant fleet to meet the emergency absorbed a further £600,000,000. The American naval authorities, whose political influence must not be minimised, are solidly behind'the movement to reconstruct the merchant mariue. In the first place, they wish to keep the shipyards employed, and, secondly, they want numerous fast merchant ships that could be utilised for naval purposes at a time of crisis. The influence of the Navy Department may be traced in one of the principles laid down by the Shipping Board—viz., that '"as an. effective arm of national defence the American merchant marine should be comprised of vessels properly designed for conversion into light cruisers and to perform other specialised services such as a convoy to the navy and as the overseas branch-of the army, transport "