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May, 1919 and one-quarter million dollars? Does he realize that a Japanese builder could come to the United States and buy the steel plates and shapes and _ material to build this ship, which amounts to only 3500 tons, for say roughly $200,- 000, to which he might add his freight from New York to Japan, and the bal- ance of the cost would then be Japanese or Chinese labor? What we on the Pacific coast are wondering is. what will be the cost of such a vessel built \ C SS SJ Sy Ss SS << SS MSS ants Freight THE MARINE, REVIEW in Japan or China with Japanese or Chinese labor with American steel which will come into competition with our American vessel costing us $1,250,000? It is generally supposed that the cost of labor in Japan may be one-fifth of ours and if so, such a steamer would cost in Japan or China one-half million dollars. And is it the. difference in wages, as Mr. Hurley suggests, that is the serious matter? Is it not rather the annual interest, insurance and deprecia- By Welding Ring nates Set in Free 2a tion on the difference in cost between the American or British-built vessel and the Japanese or Chinese-built 'ves- sel to which we should first direct our attention? Roughly speaking, interest at 6 per cent, insurance at 6 per cent and depreciation at 6 per cent would make a continuous, incessant annual charge of 18 per cent on this difference which is the principal problem that American owners must solve as_ seen by me. These are all vital questions. << WO arket Of Mailler & Querean, and Chairman, Executive Committee, Chamber. of Commerce of the State of New York by Edward N. Hurley, in con- nection with the United States shipping, I am heartily in favor of it in its general outline, though there are some minor matters that will no doubt receive consideration before such a plan is put into operation. At the dinner given by the National Marine league, the attention paid to the ad- dress of Chairman Hurley was _ in- tense, as practically all of those pres- ent were greatly interested in the subject. The address indicated a large amount of observation and study by Mr. Hur- ley, and a very full conception of the necessity for a definite plan to handle this shipping. The statement that caused most applause, and was evi- dently most acceptable to all present, was that Mr. Hurley was opposed to government ownership. This coming as a direct statement from the head of the shipping board, was an assur- ance that the shipping business of the United States will be conducted in the future along methods of pri- vate operators, and not by a govern- ment department. I believe that this is a sound principle in every way, and that such operation will be much more economical and satisfactory than it could possibly be under govern- ment. control. As to the question of disposing of these ships, Mr. Hurley outlined very fully the present attitude of the ship- ping board; writing off a. part cost of these vessels, bringing them down to approximately present cost of pro- duction, the- buyers: to. pay 25 per cent in .cash, the balance to be paid in yearly installments over a defi- nite period, the government receiving interest on the later payments. This Practically. places the government in the position of .the British banks, which have always been accustomed to making loans on shipping to a large percentage of the ship's value, and having them paid off gradually as Rov raven to the plan proposed earnings would permit. It is doubt- ful whether. at the present time our banks or private interests would be willing to advance money on the pur- chase of ships, merely as a_ loan, so that the proposed plan of the government promises to be a very helpful one. There are some details of the plan that do not appeal to me, and I am WELDING RING somewhat in doubt as to whether they could be beneficially carried out. I refer particularly to the fixing and maintaining of freight rates. I' be- lieve that this must be a matter of competition and not of government control; otherwise United States ship- ° ping would be greatly hampered in competition with that of foreign ship- ping. It must be a free market for the shipping lines to obtain reason- able rates that will leave a margin of profit over cost and operating ex- penses, and at same time open to meet any unexpected or keen compe- tition that may arise. Undoubtedly there will be occasions for this where American tonnage enters upon the same trades that have been so long occupied by the British, and by other nations. I hardly see how it will be possible for the government to appoint a direc- tor on each board that is operating these steamers, and if appointed, of what particular service or advantage he would be. There would be very great difficulty in finding a sufficient number of American shipping people who are familiar with all shipping conditions to accept such positions, and a mere attendance at board meet- ings would furnish very little infor- mation as to the daily operations of the different lines. This, however, is a minor matter that can easily be omitted or changed. As to the cost.of operation, I still believe that it will cost more to carry on the management and operations of American ships than those of Great Britain, and certainly more than those of the Scandinavian nations where wages and supplies of all kinds are much lower and more limited than those provided .on American ships. Whether these expenses can be kept down to.a point that will enable the Americans to meet foreign competi- tion is something that will have to be determined by actual practice. -- ~ I am very confident that now this government having started in with the definite intention of having an Amer- ican merchant: marine, it will not be willing to see this great project aban- doned or reduced to a minimum amount of operation. While it may not in all cases be profitable, yet as one of the great means of develop- ing the industries and trade of this -country, I am confident that we shall continue to be large owners of ship- -- ping, and operate in many trades that have heretofore been entirely un- der control of foreign tonnage. I think that Mr. Hurley deserves great credit.