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Part 4?8 Pages = WASHINGTON, D. C? SUNDAY MORNING, JANUARY 15, 1922. a*-- : ? a. What Is to become of Nation's Thousands of Great Ships? Br JAJ1K9 MARTIN MILLER. T NCL13 SAM entertained the Sam, you know, is the world's master shipbuilder. But he knows A great deal more about ships and shipbuild ing new than he did previous to Sep tember 7, 1816, the date of approval of the shipping act. On the above date Uncle Sam made up his mind, over night, so to speak, to go Into the shipbuilding business on a s-ale so vast that It Is stagger ing to think of it. The story of Uncle Sani, master shipbuilder, sounds more like a dream than a reality. From September. 1916, to November 11, 1918, the date of the armistice, Uncle Sam worked day and night as a ship builder. Besides. L'ncle Sam had to get out and hustle together nearly four bil lions of dollars with which to build the 3.270 ships he had planned and contracted to build. So you will see (hat he was not only the world's greatest shipbuilder, but the world's greatest promoter as a bond and stock salesman. "Get the cash!" was Uncle Sam's slogan. And he got it. It must have made the tens of thousands of bond and stock salesmen and promot ers. "get rich quick" and all. green ?with envy at the facility with which T'nclc Sam "got the money." But like most promoters who get "easy" money. Uncle Sam has spent all of the nearly four billions of real ??ash he took in for shipbuilding pur poses and the bills are not all paid yet. But Uncle Sam has the ships left. Now, what is he going to do with them? He doesn't exactly know. No one else seems to be able to solve the rroblem. T ^NC^E SAM'S attention was called ^ to the fact that he has 589 wooden ships on hand. These range In size from 3,500 tons to 5,300 tons. Uncle Sam was asked: "What are you going to do with these wooden ships?" "Oh, it looks as though we may have to sell them for kindling wood," one of his assistants replied. "But you have twelve cement ships and eighteen composite wood and cement ships. They can't be used even for firewood." was suggested. "Wo may find them useful for sink ing in some harbors to fill In and improve the sea wall," another of the lieutenants ventured. One September mornfng in 1916 TTncle Sam began hiring experts, mechanics, laborers and others by the tens of thousands and into the hun dreds of thousands to build ships. These were given free transportation anJ wages far higher than had ever before been heard of. In addition, contracts were given to private yards, big and little, to build ships. It has been said, fac titiously, perhaps, by some one ac customed to reckless statement, that an undertaker or cabinet maker.vwho can really make nothing but coffins, could have received a contract from Uncle Sam during the war period to build ships. Tt is easy to say now, in loose and Oareless conversation, that the Ger man submarine menace was greatly exaggerated. A careful study of the situation during the most acute pe riod of the war certainly reveals to one seriously seeking the facts that the world's ships were in great danger of destruction from Germany's ruthless submarine warfare against the world's shipping: the ships of the allies as well as those of neutral nations. In this situation the cry went up, encircling the globe: "Ships, more ships and still more ships." Some of our own ships were destroyed. Many citizens of the United States w ere murdered on the high seas and elsewhere, although we were a neu tral nation. Did Uncle Sam calmly wrlter for five days during the past week. We discussed the subject of ships. Uncle ? * * * J Smith, secretary, and other lieuten ants of Uncle Bam. The story of the Shipping Board and the Km?rgency Fleet Corporation la not a sealed volume. It la yours and It la mine for the asking- But I warn you that If you undertake an Investigation of these monstrous enterprise* you must be sure you are In good physi cal and mental condition before you begin searching into the 'daacling complications and ramifications pre sented. War carries with it the most reckless haste, waste and extrava gance, This )? truo of any country burdened with the horrors of war. It matters not whether the adminis tration. which, had to shoulder the responsibilities of .conducting the war. belonged to the republican party or to the democratic party, there is always the most ruthless' waste. This Is a plain storv of perhaps the mcst gigantic enterprise ever under taken by any government in the his tory of the world. The American merchant marine is now a reality. United States govern ment-owned ships are new sailing the sev?n seas. Every man. woman and child in the United States owns a part of the American merchant ma rine. Hundreds of thousands of the people bought the bonds that made it possible,.for the governtn<mt to get the money with which to build these ships. On January "1 there were 431 steel ships out of a. total of all kinds of ships built by Uncle Sam (2.312) that were in active service. This indi cates that there are 1.881 ships that j are Idle, going to rust and disinte grating. The 431 ships now in use have a dead-Weight tonnage of 3,501.- I 250. while the tonnage of the total I number of ships built is 13.636.711. | Some of the ships built are tankers, barges and tugs. ' T?e ships are classified as follows: Requisitioned steel ship*.. 3R4 Contract steel ships 1,30ft Contract wood sliips 1 5K9 Composite, wood and cement la Contract cement f>h!p9 12 Total number of ships 2.312 There are twenty-five ships of the type of the S. S. American Legion. Besides these, a number of other steel ships are combination passenger and cargo ships. AH of these ships not in j use. or likely to ever be used, will be | salvaged and sold to the highest bi?l j ders. The aim of the government is j to get all it can out of this enormous pile of junk, scattered from the At lantic to the Pacific, and then try to forget the stupendous loss. The Hog Island, Pa., shipyard, built at a cost of *67.000,000 to Uncle Sam. and several other shipyards costing score* of millions will be almost total Iosm* The Emergency Fleet Corpora- j tlon is now trying to dispose of the Hog j Island yard. The officers of the corpora tion have recently had consultations with the mayor and other city officials of Philadelphia with a view to having that city co-operate with the govern ment In disposing of the property. ? * * * "THE majority of the ships are equipped for burning oil. Oil is more economical than coal and dis penses with a big force of stokers or ooal shovelers. In long voyages, how ever. it is not always as convenient to get oil as it is to have ships supplied with coal. The present officials of the United States Shipping Board and the Emer gency Fleet Corporation report that they have reduced the fixed overhead operating expenses from *16.000,000 a year to less than $11,000,000. Of course, large numbers of employes have been discharged. The policy of the Shipping Board is to Americanize the personnel of the service, so that few or no for eigners will be employed. The board maintains offices at every important port in the United States. Offices are established at the principal ports of "PROBLEMS That Confront the United States Shipping Board?Uncle Sam as the "*? World s Greatest Shipbuilder?No Enterprise Deve loped hy the World War So Thrilled People of All Nations as the Wonderful Productive Power of America Along This One Particular Line?Gigantic Scale of the Work and the Haste, Waste and Extravagance of War?Statement From Chairman Lasker of the United States Shipping Board. THE LNITED STATES SHIPPING BOARD'S LIX1RIOI.S LISKR AMERICAN LEGION THE BOARD OWNS TWENTY-FIVE SHIPS OF THIS CLASS, (Photon copyright, by American Shipbuilding Corporation.) our government ships vary. The usual arrangement, however, is that the steamship companies pay the Shipping Board on the basi9 of 50 cents a ton per month, A 10,000-ton ship would earn the government $5,000 a month. Through tl1?c above-named com panies, government ships are now navigating ftie high seas, as follows: A fleet of thirteen modern ships are plying between New York. Plymouth, London. Cherbourg, Boulogne, Danzig and Bremen. A second line operates four ships between New York, Rio de Janeiro. Montevideo and Buenos Aires. The American Legion is one of the ships in the South American service. A third line of four ships operates in the south Pacific trade. The route is known as the "Sunshine Belt" and the ships sail between San Francisco. Honolulu. Manila. Hong kong, Shanghai, Kobe and Yokohama. A fourth line operates four ships be tween Seattle, Yokohama, Kobe, Hongkong. Shanghai and Manila. These ships, including service and ev erything, are distinctly American. They are American as to ownership, service, food and personnel. The theory of government owner ship and operation of ocean steam ships ias at last been definitely abandoned in the United States. Of the total tonnage of 13,636,711 now owned by the government only 3,501, 250 tons are in use, as stated above. The enormous tonnage of 10,135,461 is now standing idle and cared for at considerable expense. Unused ships deteriorate rapidly. Under the pres ent condition of world commerce it seems that it is impossible to put this enormous idle tonnage to use. * * * * a VERY strong factor in operating against the United States com peting in ocean navigation with for eign nations are the navigation laws of the United States. Now, Norway and many other foreign countries have an abundance of seamen, so they can get at least 65 per cent of a crew who have served three years at A VIEW OK THIS S. S. AMERICA* LEGION, TAKEN FROM SOCIAL HALL OF THE VESSEL, LOOKING THROUGH LOBBY. BETWEEN SOCIAL HALL AND WRITING ROOM. /old his hands and "lay down"?, To be sure, he was quiet a good while, witnessing what lookett Ilka the threatened total destruction of the world and of civilization. But Unole Sam suddenly woke up one morning-, so te speak, and began the world's greatest shipbuilding program. * * * * ?pvURING this visit with your Uncle Sam. we were taken in hand very courteously by Albert D. leaker, chairman of the United States Ship ping Board; Ralph V. Bollltt, as sistant to tb* chairman; Clifford ,Wr the following countries: The South American countries Cuba. Mexico, Japan, China, Philippine islands, Porto Rico. Honolulu, England, France, Italy, Germany, Norway, Sweden, Denmark and some others. Six steamship organizations have been selected to operate the four lines. They are Moore A McCormack, Inc.; Roose velt Steamship Company. Inc.; United American Lines, Inc.: Munson Steam ship Lines, Pacific Mail Steamship Com pany, the Admiralty Line (Pacific Steamship Copipany). The conditions under which these companies charter sea. Any American ship must have that per centage of men who have seen three years' service, when man ning a ship, under the La Follette law. This forces us to engage for eign sailors If we man any consider able number of ahlps. During the war the La Follette lay was thrown to the winds. Another feature of the law Is that it requires the riilp owners, or the master, to pay his sailors at least 60 per cent of the salaries due them upon their arrival %t any port. , This demoralises the crew, unfits them for service and oft* COST OF OPERATING U. S. SHIPS ? IP to June last it. cost the Gove-nment $1,250,000 a month to navi gate the high seas with 751 ships. Beginning; July 1 last the number of ships in service were re duced from 751 to 411. To operate this latter number the govern ment is now paying out $350,000 each month or $4,200,000 a year. For each of the four ships in the South American trade the government pays about $20,000 each round trip. For the ships run ning to the orient, each one costs the government about $50,000 for each round trip. A. D. LASKEH, CHAIRMAN OF THE UNITED STATES SHIPPING BOARD. (Copyright, by Harrifi & Ewlng.) en at very great cost to the ship owners. Few crews can stand the morbid allurements of a foreign port, particularly when they have money. A number of countries pay subven tions to foreign steamship lines. They pay subsidies also to their own steam ship companies. The principal pur pose In paying subventions to for eign ocean lines has been to utilize foreign steamship services operating to remote points. ? The only direct financial aid ex tended by the United States has been the payment of mail subventions. Such payments may be divided into three periods, namely, 1847 to 1857, 1864 to 1877 and 1891 to date. Prior to the enactment of the pos tal subsidy law of March 3, 1891, the efforts of the United States along this line were somewhat spasmodic and lacked definite purpose. Apparently too much was expected within a short time, and serious mistakes were made. Too much speed and other un reasonable demands were made, au thorities claim. The experience of the United States with mall subven tions has not, so history records, been very enc'ojiraglng. The ship subsidy Idea has never been a popular one in the United States. France has befen called the "bounty giving nation par excel lence." Germany, Austria, Great Britain, Italy, Japan, Belgium, Hol land, Spain, Portugal and five South American republics all extended financial aid in. some form to their own steamship lines or to those of forslfn countries. __ Soros countries would loan money" with which to build stamships, on long time without interest. But the most popular form of aid has been mail sobventions. As a matter of fact the United States Is now paying what is in effect a subsidy to certain lines to operate the ships of the Shipping Board; the government guarantees certain of the companies operating our ships against loss. Owing to the demoral ized condition of foreign money there is very little freight going to foreign countries or coming from them. Un der the present conditions It Is diffi cult to get responsible companies to operate our ships and face an in evitable heavy loss. So, the pros pect is that a very large percentage of our new ship* will continue to re main idle for an Indefinite time. * * * * 'pHE task of 'the Shipping Board during the war emergency was to construct with the greatest possible speed, through Its agency, the United States Shipping Board Emergency Fleet Corporation, vessels that would tiansport troops and cargoes over seas. During this period" the entire national effort was centered on "win ning the war." The loss of tonnage from submarine sinking was alarm ing. It was impossible to predict the length of the emergency, and suit ability of vessels tor peace-time serv ices could not be considered, tlad "the war eontlnued, with Hie conse quent continuation of tonnage losses through enemy gunfire, submarine at tacks and submerged- mines, all of the vessels for which contracts were placed would hair* been needed bar the allies. The emergency of war was no time to consider the possibility of building a well-balanced fleet of ves sels for commercial purposes. The problem was to produce ships in suffi cient number and kind to support the overseas forces. The second period, from November 11. 1918, the date of the armistice, to June 5, 1920, the date of the approval of the merchant marine act, was an uncertain and speculative era. Tem porarily there was a scarcity of ships, due to the demand for ton r.age to carry food and materials to the stricken European nations. An acute domestic fuel "situation, partic ularly in New England, required re lief through the allocation of ton nage. During most of this period ? charter rates and tonnage prices were j very high, but in the spring of 1920 i a decline in charter rates was ac- | Complished by a decline in tonnage | value. Therefore, this second period j was marked by sudden changes, and'j in many matters connected with the board's operations, complete reversal of policy and methods. Immediately after the signing of the armistice the board's construction activities were curtailed as rapidly as the physical condition of the building program and the financial interests of the government permitted. Never theless, the sharp curtailment of the huge building program necessarily caused serious derangements in many overlapping stages of production and vitally affected many industries. The third period, June 5, 1920, and subsequent thereto, was our greatest period in shipbuilding. The para mount duty of the Shipping Board under the merchant marine act, 1920, is to establish, promote and maintain an American merchant marine. This period marks the return to normal conditions through readjust ments. It marks the efTort to secure a merchant marine adapted for peace .purposed and in time of emergency adapted as an auxiliary to- the Army and Navy. fore the outbreak of the war. In the summer of 1914, and during the seven subsequent years: WORLD'S TOTAL GROSS TONNAGE. Uulted Foreign Year. States. countries. Total. 1007 4,311,928 34.920.989 39,438.017 1914 6,308,104 43,721,358 40,089.652 1021 17.020,002 44.048.051 01,074,058 I STEAM GROSS TJONNAGE. 1007 3,100,895 30.808.010 33.0Ot.811 1014 4,330.078 41,073,700 45,403,877 1021 15.740.384 43.000,041 68,840,325 STEEL STEAM GROS8 TONNAGE. 1007 ....... 2.508,845 20,552,705 20,121,010 1014 3,820.550 88,154,005 41,0*4,515 1021 14,817.104 40,447,355 54.704,450 In 1907 the United States had less than 10 per cent of the world's steel steam tonnage; In 1914 we still had less than 10 per cent, while at pres ent, through our vast war expendi tures, we have 26 per cent of the world's steel tonnage and 27 per cent of the World's total tonnage. 1 In a word, the tonnage under the J American flag is adequate to conduct not only 50 per cent of the commerce of the United States, as it did last year, but over 75 per cent of the for eign commerce of this country, and our coasting trade as well, according to the United States commissioner of navigation, who extended every courtesy in furnishing this informa tion. NEED OF GOVERNMENT AID , FOR MERCHANT MARINE WRITTEN ESPECIALLY FOR THE SUNDAY STAR BY A. D. LASKER, CHAIRMAN OP THE I. S, SHIPPING BOARD. UNLESS government aid is given our American merchant ma- | rine, the United States cannot j take its proper place among the maritime nations of the world. With this belief the President of the United States is in hearty accord, and, as indi cated in his last message to Congress, will shortly address that body on the subject. There are three reasons why our American merchant marine should re ceive government aid: First?The equalization of a differ ential in the cost of operation of American ships in comparison with those of any other maritime nation. Second?Encouragement of the es tablishment of desirable services upon essential trade routes, now ex pressly mandated by the merchant marine act. that the foreign com merce of the United Stales may not i be dependent for carriage in ships of ; competing agents. Third?That the government itself may realise the maximum amount I possible - from its wartime invest ments in commercial tonnage and may withdraw at the earliest possi ble moment from its undesirable po sition as a ship owner. The differential of operating cost between vessels of the United States i and of other nations is due to the j difference in the standard of living I in America and abroad. American | labor is paid. In general, not less than ! 40 per cent higher wages than similar | labor in any other country. The cost i of this labor in the construction ol | the ship makes the product of an | American shipyard 25 per cent mor" i expensive to her owner than would' have been a duplicate ship construct- ' ed abroad. As the ship owner must pay each ] year interest, depreciation and in- > surance, based upon this excess of j first cost, the initial difference creates i an annual burden, which the Ameri- | can owner must carry and which 1 does not devolve upon his competitor. ' cent on the first coat of the vessel. In other words, where the foreigner can make a profit of 5 per cent, which is a reasonable average figure in ths steamship business, the American operator under best conditions will be losing 1 per cent. Another reason for government assistance is the need of developing I a balanced fleet which shall be more suitable to the needs of our commerce and which shall be of real value as an auxiliary to the Navy in time of war. Four-fifths of the present Merchant Marine of the United States is of | war-time construction. These vessel? were of such types as could be most easily produced, regardless of their post-war usefulness. As a result, our merchant marine has a surplus of standardized low-speed cargo ships, but it is seriously deficient in the more specialized types of vessels of good size, and reasonable speed, for use as cargo liners, and in vessels of high speed and large passenger capacity for the development of pas senger lines and the carriage of the United States mails. This deficiency is emphasized by the work of the conference on the limita tion of armament. The importance to the country of its commercial ship ping varies, as was stated at the conference, inversely with the reduc-. lion in number of capital ships. In case this country is at some time in the future called upon to defend its existence from attack, it will require fast ships for use of scouts, large ships for transports, refrigerator ships to carry food to its fight in? forces, as well as a multitude of gen eral service ships. * * * * *~pHE merchant marine act of 192fl commonly called the Jones ac: wisely provides that the United Stater Shipping Board shall develop and maintain services upon deeirab^ trade routes until such services an developed to a sufficiently profitsb; stage to attract private capital. Wit! our comparative inexperience in tht business of world shipping, and with the tremendous grasp which our va rious competitors have upon the trade routes of the world, it may. es pecially if the present depression con tinues long, be incumbent on the board to maintain desirable services at a I loss for a considerable period of time. Rather than operate government [owned vessels in the trades, it is the I hope of the Shipping Board that aid 1 can be provided, and in its provision i there can be left sufficient discretion [in the hands of the Shipping Board to compensate private owners sufficient ly to develop those desirable services, each calling for different treatment, I entirely with private vessels. i This leads up to the third reason, and possibly the one of most imme diate direct interest.' The war left the United States Shipping Board in possession of a larjne" amount of ton nage. Pursuant to 4he mandate of the Jones act, it is operating this ton nage. or a considerable portion of it, | in maintaining, under the American | flag, the services considered desirable i upon essential trade routes. By its very nature, governmental operation is more costly and less efficient than private operation. Congress and the people emphatically desire the gov ernment to liquidate its assets and re tire from the ship-owning business at the earliest possible moment. The board finds in the present acute ship ping depression, with the resultant keen competition from foreign ves sels. that it cannot dispose of its 1 tonnage unless some adequate and as | sured assitance is held out to the ! prospective purchaser, so that he may ! feel that opportunity does exist, if | he be energetic and efficient, success 1 fully to operate American ships in | foreign trade. Without this guaran | tee the efforts of the board to dis ' pose of its holdings and to. retire from TEAROOM OH UNITED STATES SHIPPING BOARD VESSEL, AMERICAN LEGION. The activities of the law division for the past year consisted princi pally ot the conduct of all legal work arising from the;various activities of the board and Emergency Fleet Cor poration. Formerly actual litiga tion comprised only t small portion of the work of the law division, but, due to the differences Which have arisen on account" of the retrenchment and cancellation 'of the construction activities, litigation activities have steadily increased unltl they bave become an important function. ! The fallowing statements, from Lloyds Register ot Shipping, presents a concise review,.of the changes in shipping- during' the seven years be pCRTHER, the wages pajd sea going personnel similarly are not less than 85 per cent higher than those paid in other maritime nations ?nd, indeea, ?wnlt tne present -un settled state of fiyelgn exchange rates, thin difference may run to a much higher figure. At the most conservative estimate, the American ship owner has a handicap of one-third of hie full out lay for wages. The annual burden Imposed by the two excessive operat ing charges, namely, that of higher carrying charges on a higher fixed cost, and that of higher wages, may be realised by saying that the dif ferential alone amounts to < jfer active'ship operation will meet with small success, and the country will be faced wtlh the alternative, not only of failing to realize any appreciable amount from Its emergency fleet, but also with maintaining in operation a large portion of this tonnage at an annual loss probably in excess of any amount to be requested as a gov&r ment aid. With proper government ??< %0If vate shipping wc will on the up.kni of business probably be able to dis pose of a considerable number of our governmeriuowned vessels and recov er Into the Treasury mJIl'"*" ?' rt?l lars not now recoverable, but miit* to by the Treasury aid so extends*.