AMERICAN SHIPPING

New Zealand Herald, Volume LXXII, Issue 22198, 27 August 1935, Page 14

AMERICAN SHIPPING

QUESTION OF SUBSIDIES MR. ROOSEVELT'S "NEW DEAL" PROPOSED DIRECT PAYMENTS [from our own correspondent] NEW YORK, July 4 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 indirectly through mail contracts. Tho Department of Commerce has advised him that the United States will have to build t at the rate of 35 vessels a year for ! the next seven years if a competitive fleet is to bo maintained on tho high seas. In that period 86 per cent of the present total of 456 vessels will become obsolete. Tho United States ranks third among tho nations in tonnage, and fourth in speed. In the matter of age of vessels this country is last on the list. Tho nations stand thus:—Great Britain, 13,500,000 tons; Japan, 3,300,000 tons; United States, 3,000,000 tons; Germany, 2,700,000 tons; France, 2,250,000 tons; Italy, 2,100,000 tons. The United States has now under construction only two oil tankers, no cargo or passenger ships, while tho rest of tho world is building 1,300,000 tons of new vessels. Speed ol Vessels The speed of American vessels today averages but nine knots, compared with 14 knots by competitors. Modern European boats, furthermore, aro much more economical to operate, saving as high as 50 per cent on fuel consumption alone. In addition, foreign sailors aro paid wages approximately 40 per cent lower than American crews. Moreover, foreign shipbuilders can construct a vessel for about 60 per cent of tho capitalisation needed in this country, because of lower shipyard labour costs. The fact that European Governments heavily subsidise their merchant marine is Riven as an additional argument by those advocating expansion of American subsidy policy. The shipping world is at sharp odds with tho President, because of his insistence on terminating the payments of 30,000,000 dollars annually as mail contracts and substituting an undisguised subsidy. That, the industry fears, means Government men on hoards of directors. Because of the enormous Federal investment, it says it foresees the death of private ownership. Mortgages and Liens The Government, through mortgages and liens, practically owns tho oceangoing fleet now. The book valuo of all the ships is 186,000,000 dollars, of which operating companies owo tho United States 112,000,000 dollars. The aggregate net assets of the companies is only 6,000,000 dollars —about two month's mail subsidy. Shipowners are in reality merely ship operators. The mercantile marine endorses the recommendation of the Commerce Department investigators that 245 now ships bo built during tho next seven years. They hope to see the day when American bottoms wjll carry at least oO per'cent of American foreign trade, 70 per cent of which is handled to-day 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 a speed of 14 knots. This would not furnish the largest mercantile marine, but the boats would bo of a size and speed to meet estimated requirements of trade. Additional bounties are expected in cases of American ship line? entering new ports, where competitors have been established for generations.