For Sale

When genial, canny Edward Phillip Farley stepped out of the chairmanship of the U. S. Shipping Board in 1924, he took with him a lesson World War I had taught him. In that war Norway sold ships to belligerents willing to pay fantastic prices for bottoms to carry their precious foodstuffs and implements of war, collected insurance from Great Britain on chartered ships sunk by submarines and mines. In the lull that peace brought to world shipyards the canny Norwegians rebuilt their merchant marine at rock-bottom prices. Even today 45% of Norway's vessels are less than ten years old--a record no other nation can boast.

Last week the Maritime Commission permitted Shipper Farley, now executive committee chairman of unsubsidized American-Hawaiian Steamship Co., to put his lesson into practice. For a fat $1,600,000, he sold four of his tired old (20-21 years) tubs to Great Britain, which needs cargo ships to transport war supplies. This gave Mr. Farley cash in the bank with which to begin replacing his fleet of 34 ships (average age: 23 years), if he wants to. His four old ships, out of service until the war boom, netted him the fancy price of $45 a ton.

Other U. S. shipowners jealously eyed the deal. And well they might. For within three years 90% of the U. S.'s 2,345-ship, 8,909,892-ton seagoing merchant fleet will be obsolete (over 20 years old). To replace it the Maritime Commission's ten-year (1938-48) building program calls for 500 new ships, of which 38 have already left the ways. Whatever old bottoms can be sold at wartime (instead of scrap) prices will be just so much gravy for U. S. shipowners, will help pay for a fine new U. S. fleet.

Because ships cannot be built overnight, war has immensely increased the value of every old ship in existence. The fifth month of World War II found charter rates up from their pre-war price of $3 or $4 a ton per month to $25. Freight rates had zoomed as high as 400% to war-zone ports. Of 86 U. S. ships withdrawn from European trade by the Neutrality Act, all but a handful had been re-employed on other trade routes or chartered. The Maritime Commission had approved the sale or change of registry of over 70 vessels, announced that increased runs to neutral waters had largely made up tonnage losses to belligerent waters.

U. S. shipowners grew surer that there would be a market for sale and charter of their vessels as goods piled up on U. S. wharves. Still in the free port of Staten Island awaiting shipment to France were many of the 5,000 trucks ordered for the French Army. In the Texas ports of Galveston and Houston, warehouses bulged with thousands of bales of cotton long overdue at their European destination. Two months ago New York elevators were so choked with wheat that rail shipments had to be halted. Imports were similarly delayed.

Confused and uncertain as U. S. shipping was last week, it had gone a long way toward adjusting itself to wartime trade. Some adjustments:

> American-Hawaiian let out two ships on charter to trie Orient to pick up tin and rubber, strategic materials for which British bottoms are no longer available. At year's end the line declared an extra 50-c- dividend.

> Fortnight ago Lykes Bros. Steamship Co. sold two cargo ships, aggregating about 19,000 deadweight tons to Great Britain. Of its 52 vessels, 14 are under charter to Chilean Nitrate Sales Corp., carrying the raw material for explosives and fertilizer to the U. S., Hawaii and Japan.

> Awaiting Maritime Commission approval were requests to sell two ships to Panama to carry grain to the United Kingdom, France, Belgium and Holland; one ship to Canadian International Paper Co. to transport newsprint to the U. S. and Great Britain.

> Failing in two attempts to transfer eight of its idle ships to foreign registry, United States Lines was dickering with Belgium. Hardest hit of all U. S. lines because of its big number of passenger ships formerly plying the North Atlantic, United States Lines has placed two (S. S. Washington and S. S. Manhattan) in service to Genoa and Naples, one (S. S. President Roosevelt) in the Bermuda trade.

> When Neutrality removed its eight ships from European trade routes, Black Diamond Lines chartered them to U. S. traders, maintained its foreign service to Antwerp and Rotterdam by chartering 26 foreign ships, doubling its service.

> By rerouting its Scantic Line north of the combat zone, Moore-McCormack has continued to carry cargoes to Europe via Bergen, Norway.

> Chance was that one or two Pacific Coast shipowners might sell their entire fleets. Half of the Coast's supply of excess tonnage (some 30 freighters) has been sold since war began. Of those ships only about twelve have not yet received the Maritime Commission's blessing.

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