EXCESS SHIPPING

Evening Post, Volume CXIX, Issue 152, 29 June 1935, Page 10

EXCESS SHIPPING

WITHDRAWAL PROPOSAL RATIONALISATION SCHEME TAX HOE COMPENSATION (British Official Wireless.) (Received June 29, noon.) RUGBY, June 28. A' rationalisation scheme for shipping was discussed by Lord Essendon, * the well-known British shipowner, in a . speech before the International Chambers of Commerce Conference in Paris today, i The scheme, as drafted by the International Shipping Conference, provides for the laying up or scrapping of tonnage which is temporarily or permanently in excess of requirements, and for this, to be done so far as. possible through the voluntary ef- / forte of shipowners. Lord Essendon explained that the body administering I the scheme was not' intending to exercise control over shipping businesses, but to determine what compensation would suffice to induce owners to withdraw sufficient tonnage to adjust supply to demand. On that basis dues would be fixed and collected from air vessels through the machinery of Governments, whose co-operation would be limited to the functions of collecting the tax accepted in advance by the industry. A COMPENSATION POOL. The money thus obtained, he said, would be paid into an international pool, and from this would be provided compensation at a rate fixed by the corporation to any shipowner wno found it advantageous to lay up or scrap rather than to trade. Compensation would be adjusted at a level sufficient to make laying-up tive.i' It is estimated that there are : 45,000,000 gross tons of effective comipeting tonnage engaged in international trade, and that the laying-up or ' scrapping of 9,000,000 tons would ,be more than sufficient to achieve the objects the conference has in view. The position would probably be met by an annual due of Is 3id per gross ton, equivalent-to about 2s per net ton, on 36,000,000 gross tons trading, .yielding about £21250,000 available- as compensation, which in turn would yield approximately 5s per gross ton and 8s per net ton as compensation for 9,000,000 tons laid up or scrapped. THE SUBSIDY QUESTION. Regarding subsidies, which was a matter for the Governments, Lord ' Essendon suggested that the prospect of .successful rationalisation would be increased if it were understood that the Governments would not increase those at present in operation. As the effect of rationalisation began to be felt and shipping was once more able to pay its way, the need for subsidies would diminish. It might then be fourid that the Governments concerned could afford to modify or even abolish them.AMERICA'S SHIPS NEW PROGRAMME AHEAD STRAIGHT-OUT SUBSIDIES , .\ ■ ■ , (From "The Post's" Representative.) , NEW YORK, June 6., . President Roosevelt is preparing his plans for a New Deal for American shipping, following his direction to Congress to provide outright subsidies, instead of those .now furnished indirectlyI'through mail contracts. The Department of Commerce has advised him that the United States i will have to build at the rate of 35 ; vessels a year for the next seven years if a competitive fleet is to be maintained on the high seas. In that period 86 per cent, of the present total of 486 ... vessels will become obsolete. ,' The United States ranks third among the nations in tonnage, and fourth in speed. In the matter of age of vessels, this1 country is last on the list. The nations stand thus:— Tons. Great Britain 13,500,000' Japan •: „ 3,300,000 United States '. 3,000,000 Germany 2,700,000 France ...■ 2,250,000 Italy. 2,100,000 The United States has now under construction only two oil tankers, no cargo or passenger ships, while the rest of the world is building 1,300,000 tons of new vessels. American vessels today average but nine knots, compared . with fourteen knots by competitors. Modern European boats, furthermore, are much more economical to operate, saving as high as 50 per cent, on fuel consumption alone. In addition, foreign sailors are paid wages approximately 40 per cent.- lower than American crews. Moreover, foreign shipbuilders can construct a vessel for about 60 per cent, of the capitalisation needed in this country because of lower shipyard labour costs. The fact that European Governments ' heavily subsidise their merchant marine is given as an additional argument by those advocating expansion of American subsidy policy. ! A MORTGAGED FLEET. The shipping world is at sharp odds With the President because of his insistence on terminating the payment of 30,000,000 dollars annually as mail contracts and substituting an undisguised subsidy. That, the industry fears; means Government men on boards of directors. Because of the enormous Federal investment, it foresees' the death of private ownership. The Government, through mortgages and liens, practically owns the oceangoing ■ fleet now. \ The book value of all,the ships is 186,000,000 dollars, of which operating owe the United States 112,000,000 dollars. The aggregate net assets of the companies ' isonly 6,000,000 dollars—about two months' mail subsidy. Ship owners are in reality merely ship operators. ' The mercantile marine endorses the recommendation of the Commerce Department investigators that 245 new ships be built during the next seven years. They hope to see the day when American bottoms will carry at least 50 per cent, of American foreign trade, 70 per cent, of which is handled today by non-American vessels. That is said to mean an investment of 35,000,000 dollars a year—a million apiece for 35 boats of the cargo-liner type, capable of fourteen knots. This would not furnish the largest mercantile marine, but the boats would be of a size and speed to meet estimated requirements of trade. Additional bounties are expected in cases where American ship lines enter new ports where competitors have been established for generations. ' A fire broke out at the Victoria Hotel in Abel Smith Street about 4.30 p.m. yesterday. Painters had been burning off paint from weatherboarding, which was being repaired after being damaged by a fire about a month ago. The Fire Brigade quickly had the outbreak- under control, and only minor damage was done.