THE SHIP SUBSIDY BILL
THE SHIP SUBSIDY BILL AT THE time this editorial is written the ship subsidy bill is under discussion in the Senate. It may pass, but it is my belief that it will be defeated. If it passes it will...
...Frey, the man in charge of ship operators for the Shipping Board, this agreement is the basis on which "practically all of the vessels of the Shipping Board now in operation are being handled...
...It also proposes to abolish the Army and Navy transport system and to turn the work of that arm of our service over to privately owned subsidized Thought for Hunth GOD'S INFINITE LOVE:—For God so loved the world, that he gave his only begotten Son, that whosoever believeth in Him should not perish but have everlasting life.—John 3:16...
...Lasker for years before he was made chairman of the Shipping Board had been conducting one of the largest advertising agencies in the country and was reputed to be very successful in selling advertisements...
...It does not even promise, much less guarantee, cheaper rates for ocean commerce...
...Seventy of the votes cast for the bill in the House were cast by men who had been defeated in the recent primaries and election...
...For this reason President Harding evidently deemed him especially qualified to be chairman of the Shipping Board...
...1. During the war the people of this country built and acquired hundreds of ships at an expense of between three and four billion dollars...
...and, second, the almost bankrupt condition of Europe since the war which has left those countries without products of their own to transport in foreign commerce and without money or credit to purchase products of this or of any other country...
...The administration estimates this loss to have been reduced during the last two years from sixteen million dollars a month to about four million dollars a month...
...This was due to two things: First, the unprecedented increase in ship building during the war...
...If the bill passes the Senate, it will be by the grace of the votes of senators who were similarly defeated...
...The bill, however, does guarantee that the people will lose the title to the ships which they bought and paid for at an expense of about four billion dollars...
...2. At the close of the war the value of ships dropped to the lowest point ever known...
...In his message addressed to the joint session of Congress on November 21, last, urging the passage of this bill, the President said: "In individual exchanges of opinion not a few in House and Senate have expressed personal sympathy with the purposes of the bill and then uttered a discouraging doubt about the sentiment of their constituencies...
...It would extend this editorial beyond permissible length to attempt to point out all the iniquities of this bill...
...and by clever politicians, of which Mark Hanna was the most prominent...
...It simply means turning over the people's property to favored interests for a few cents on the dollar, and a tax of millions of dollars levied annually upon the people in order to pay a subsidy to those who take ships practically as a gift...
...Already in 1917 our ship building had been speeded up as the result of the European war, so that the amount of tonnage we built as the result of the war is really larger than that here indicated...
...This means in effect tax refunds to the great ship companies in amounts now impossible to calculate...
...It may not give us an American merchant marine...
...It is admitted by the supporters of the bill that if their plans are realized the subsidy will amount to thirty million dollars a year, (c) To use a "loan fund" of §125,000,000 in the discretion of the board to aid any citizen of the United States in building ships or in equipping those already built...
...4), Chairman Lasker testified before the House Committee on the Merchant Marine and Fisheries: "The contract is the most shameful piece of chicane, inefficiency, and of looting the Public Treasury that the human mind can devise...
...This loss in operation has been brought about in two ways: (a) By the use of the MO-4 contract...
...I have quoted at some length from the Record respecting this measure, for it would be incredible without the proof that any Administration would be guilty of attempting to foist such a measure upon the people by the methods employed in behalf of this bill...
...The bill does guarantee to the favored shipping interests hundreds of millions of subsidy and still more hundreds of millions in tax exemptions and other privileges...
...The bill passed the house by a majority of only twenty-four votes...
...With interest added the sum expended for this purpose is about four billion dollars...
...3. This great merchant fleet was paid for by the people of the United States out of their own pockets...
...Senator Jones, the administration spokesman for the bill, on the Senate floor on December 13 said: "Mr...
...It was advocated and supported years ago by the financial interests, of which J. Pierpont Morgan was the most conspicuous...
...The provision in this bill also which directs the Shipping Board to make a ten-year contract for the payment of this subsidy is recognition of the fact that the people are so strongly opposed to the measure that they would compel the repeal of the law at the next session of congress if that course were left open to them...
...In fact, the purpose of pressing the bill for passage at this time is because it is known that it stands absolutely no show of passing either house of the eongress after the new members take office who were elected last November...
...It is wholly bad...
...So overwhelming was the sentiment of the country against it that even these great political and financial bosses had to abandon the idea...
...d) To allow for "exceptional decrease" in value of all United States ships acquired after August 1, 1914, in computing the net income of the ship owner for income tax purposes, the deduction to be allocated to the years 1922 and the four years immediately subsequent thereto...
...This language, while less forceful than Vanderbilt's declaration, "the people be damned," espouses the same sentiment...
...Yet, as testified by Mr...
...The arguments for the present ship subsidy bill are a little camouflaged, but they are the same old arguments and the public sentiment against a ship subsidy is just as strong today as ever...
...Concerning the MO-4 contracts (meaning Managing Operators Contract No...
...It is only a matter of opinion...
...President, let us pass this bill...
...Lasker that there is absolutely no market for the ships now...
...See Congressional Record of December 15, 1922, page 515...
...The managing operator receives as his compensation a commission on the gross freight revenue amounting to 7 1/2 per cent, and 10 per cent of the gross passenger earnings...
...The facts, however, are undisputed and can be briefly stated...
...The scheme for a ship subsidy is no new thing...
...They cannot be sold at this time at any price, he says...
...This is approximately four times the total cost of the federal government for all purposes the year before we entered the war...
...The excuse given in the debates by the proponents Of the bill for the policy of the Shipping Board in withdrawing ships from the profitable routes was that otherwise government ships would come into competition with privately owned ships...
...Lasker, chairman of the Shipping Board, to obscure it...
...Having no knowledge of the shipping business, Chairman Lasker has tied up nearly all of Uncle Sam's ships and for months has devoted himself to "selling" ship subsidy to the people, and this has necessarily resulted in some confusion in the public mind regarding the ships, their character and value, the true cost of maintaining the fleet, and the condition of shipping generally...
...Even with the subsidy, no one has claimed that they can be sold for more than five or six per cent of their cost, or a small fraction of their value under normal conditions...
...It is admitted by Mr...
...Every public official who supports it should be defeated by the people at the polls at the first opportunity...
...In the course of my speech against the bill on December 15, last, I put into the Record copies of resolutions opposing the bill passed by all the leading farm organizations of the country, including The Farmers' Union, The Society of Equity, The National Grange, The National Board of Farm Organizations, The Farmers' National Council, and also from all the leading labor organizations of the country, including the American Federation of Labor and some twenty-seven other la-organizations...
...ships...
...b) to enter into contracts with the purchasers or any other ship owner, a citizen of this country, to pay a subsidy for a period of ten years based on the mileage of the ships...
...The bill means millions of dollars of tax refunds to the shipping interests...
...The present administration, however, is bent on driving the measure through if it has the power to do it, no matter what the consequences may be to the Republican party or to the country...
...See page 516 of the Congressional Record above referred to...
...It is a well known fact that the bill passed the house November 29, only with the aid of the votes of members of the House who had been defeated in the last election, a good many of them on the Very issue of ship subsidy...
...Such loan may be made for a period of fifteen years at 4 1/2 per cent...
...See page of the Congressional Record above referred to...
...See Congressional Record of December 13, 1922, page 401...
...It does guarantee that the people will be deprived of the opportunity of having a great Government-owned and operated merchant marine...
...The situation respecting the pending subsidy bill is really a very simple one in spite of the efforts of Mr...
...and (b) by withdrawing government ships from the profitable routes of commerce...
...It contains many other "jokers," but the foregoing are its principal features...
...But after the Shipping Board has made a contract with the ship owner for the subsidy for ten years the administration evidently believes that the Supreme Court can be relied on to hold constitutional any law which might subsequently be passed repealing the subsidy provisions of the bill, since it could be claimed that such a law violated a contract...
...It is worth many times more to the people than the ships can be sold for now, even with the subsidy, to have the ships retained by the Government ready to be put into operation to prevent the excessive charges which will certainly be made by the ship owners of this and other countries as soon as commerce improves...
...Other countries largely increased their merchant fleets also, though not in the same proportion as the United States...
...There are many other wholly bad and inexcusable provisions in the bill...
...That this refund will run into immense sums is apparent when the difference between the present and war-time values of the ships is considered...
...4. The ship subsidy bill authorizes and directs the Shipping Board (a) to sell these ships to United States citizens "as soon as practicable...
...It does not assure the building of a single ship or the maintenance of those built...
...Under this form of contract all expenses of the operation of the vessel covering wages, feeding, stevedoring, wharfage, repairs, fuel, port charges—in fact, expenses of every nature whatsoever incurred directly or indirectly by the ships —are paid by the government...
...6. The advocates of this bill frankly admit that the people are overwhelmingly opposed to it, but have announced their purpose to pass it in spite of the expressed wishes of the people...
...5. In order to discredit government ownership and operation the few ships have been purposely operated by the Shipping Board in a manner which necessarily resulted in loss...
...If it passes it will be in defiance of the will of the vast majority of the people and will constitute one of the most vicious laws ever enacted by the American Congress...
...Nobody can issue any guarantee, but we believe that it will give it...
...We increased our own tonnage engaged in foreign trade from about three and one-half million tons in 1917 to over sixteen million tons in 1922, and increased our total merchant marine tonnage from a little over thirteen million tons in 1917 to nearly twenty-eight million tons in 1922...
...Ev-ery ship in that fleet belongs to the people of this country, and the president and every senator and every member of the House in passing laws relating to the disposition of that fleet are simply trustees legislating concerning the property of the whole people...
...Frankly, I think it loftier statesmanship to support and commend a policy designed to effect the larger good to the Nation THAN MERELY TO RECORD THE TOO HASTY IMPRESSIONS OF A CONSTITUENCY...
...Senator Jones of Washington, who has charge of this bill in the senate for the administration, very frankly admitted during the course of my remarks upon this bill on December 15, 1922, that it was the government policy to withdraw the Shipping Board ships from profitable routes...
...For example, it contains a cleverly worded paragraph which allows the International Mercantile Marine Company to share in the subsidy, although it has nearly a hundred ships registered under the British flag and bound by contract to serve British interests both in peace and war...
Vol. 14 • December 1922 • No. 12
