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98 little mew real capital going into Ger- man shipbuilding at present. A somewhat similar financial situation surrounds the German shipping com- panies. Like the shipbuilders they have benefited from the government’s com- pensation for surrendered tonnage but this appears to have been totally insufh- - cient to-replace their fleets and in addition they have been obllged to increase their capitalization constantly in order to keep pace with the depreciation in the value of the mark. Therefore, one finds that toward the end of 1913 there were 64 German shipping companies engaged in trade all over the world with a capital of 502,000,000 marks, worth at ‘that time $125,500,000. The war period was one of inactivity. Renewed life began to manifest itself in’ Genman shipowning circles in 1919. The first two years following the armistice witnessed the organization of six new large shipping companies and the refinancing of practi- cally all of the prewar organizations with the result that since 1913, invest- ment of 900,000,000 marks thas been made in German shipping concerns. The total nominal capital value of the German mercantile marine today .is, ihere- fore, 1,402,000,000 marks, convertible on a gold basis into only $7,550,000. ‘In other words, like the shipyards the ship- owning companies have not been able to inflate their capital as fast as the currency has depreciated in value, and in view of the tremendous losses ‘through the war the real value of the German merchant fleet today is probably about one-tenth of what it was before the Kaiser started through Belgium. The capitalization of the Hamburg- American line has been increased from 180,000,000 marks to 285,000,000 marks ; that of the North German Lloyd from 125,000,000 to 250,000,000 marks; ‘the Deutsche-Australische company from 20,000,000 to 84,000,000 marks; _ the Kosmos line from 14,000,000 marks to 84,000,000 marks; the Hansa company from 25,000,000 marks ito ~ 60,000,000 marks; and the Hamburg-South Ameri- can company from 25,000,000 marks to 50,000,000 marks. Tihese increases, how- ever, as indicated above, do not repre- sent increased real capital or expanded business activities. On the contrary each of these companies is operating on a much smaller scale than it was before the war. Freights In Sterling It will be many years before the Ger- man fleet resumes its former importance in world trade although progress is be- ing made month by month. Fortunately for the Germans, generally speaking, the earnings of their fleet are on a sterling rather than a mark basis. But MARINE REVIEW so few ships, relatively, are in opera- tion that the income which the nation formerly enjoyed from. its shipping ac- tivities throughout the world. has been greatly curtailed. This has had a seri- ous effect on Germany’s position in in- ternational trade and has contributed to the decline in the value of the mark. Germany must import food, copper, cot- ‘on and other raw materials and before the war she depended on her shipping earnings to a large extent to cover these payments. Her shipping earnings at the present time, the’ rates nearly on a prewar basis in sterling, are utterly insufficient to meet the situa- tion, being less than 20 per cent of what they were before the war. Dr. Rathen- eau in his exposition of the German firancial situation at the Cannes con- ference in January, emphasized this feat- ‘ure and used it as an: argument ‘0 support the German claim that they are unable ito meet the reparations demands. Many Companies Combine These considerations have resulted in widespread consolidations and _ alliances between German steamship companies and industrial organizations. For in- stance, the Hamburg-American line is now working in. close ‘co-operation with the Allgemeine Elektriziiats Gesellschaft and the Gutehoffnungshuette. The Kos- mos company thas formed a close alliance with the Deutsche-Australische steam- ship company, and ‘friendly relations also exist between the Hamburg-American line and the Hamburg-South American company. The North German Lloyd has acquired control of the Roland line and the Hamburg-Bremen Afrika line, while the Hansa Steamship company now controls the Neptune company. The Hamburg-American line and the North German Lloyd are apparently jointly in- terested in the new Shipbuilding Re- quirements Co., which has been organ- ized for the purpose of dealing with the problems involved in the reoonstruc- tion of Germany’s merchant fleet. In this same connection appears the Ship Trustee bank which las been formed with a capital of 100,000,000 marks for the purpose of distributing ithe govern-’ ment war compensation of 12,000,000,- 000 marks. This bank is. therefore, a quasi-goverrment institution. Although the Germans thave only about 525,000 tons afloat under ‘their flag at the present time their activities are on a somewhat broader scale owing tto tthe policy followed last year of charter- ing ‘foreign ships, particularly Scandi- navian vessels, Including this tonnage, it might be said that the merchant marine under German control at the pres- ent time is about one-quarter of what it was before the war, or about 1,300,000 being: March, 1922 tons. Due to the lull which has been discernible in German business circles since the turn of the year, chartering activities in foreign markets on German account have been considerably curtailed. The Germans have also taken steps to re-establish their fleet by buying back from the allies some of the ships which had been surrendered.’ Quite a number of vessels have been! purchased in this way in the London market. Swedish vessels aggregating about 100,000 tons also have been purchased. Foreign owners, however, are not showing ‘the disposition to transfer their vessels to the German flag which ‘had been pre- dicted. Although the cost of operation under German registry is the lowest in the world at present, there are com- pensating disadvantages such as heavy and increasing taxation, and the difficulty of transferring profits made in Germany to outside countries, together with the numerous pitfalls which are encountered in doing business in a country having a practically worthless currency. Another reason why foreign — ship- owners are not flocking to the German flag, and this also accounts for the slowing down in tthe expansion of the German-owned merchant fleet, is found in the fact that German foreign trade as a whole ‘is still much below the normal jJevel. German exports, for in- stance, according to the latest figures available averaged 1,300,000 metric tons of merchandise per month during the latter part of 1921, as against 6,146,000 metric tons per month in 1913. Imports in. 1921 showed a monthly average of 1,600,000 metric tons, compared with 6,- 078,000 metric tons per month in 1913. From this it is seen that Germany’s foreign ‘trade is at ithe present time on about a 21 per cent basis as regards weight of commodities or volume of traffic. Coal Is Higher Another factor in German steamship operation at ithe moment is the price of fuel. In October, Ruhr coal was quoted 254 marks a ton. equivalent at that time to only about $1.00. At pres- ent ithe price is 405 marks a ton, equiva- lent to $2.20. Tihese are the prices at the mine to which must be added freight to the ports, bringing ‘the current price for Westphalian coal at Hamburg up to about $3.50 per ton on board. - As a matter of fact, British coal is compet- ing with the German product all along the North sea coast. Exports of Brit- ish coal ito German ports in December 1921 amounted to 158,377 gross tons. These figures reflect clearly the fact that German steamship owners have lost for the time being at least the ad- vantage, which they ‘possessed a few « :