The New Merchant Marine Situation

April 26, 1924

Report Outline
Special Focus

New developments in the merchant marine situation suggest the possibility of renewed activity for American shipping and hold out some promise for employment of some of the hundreds of ships, which have been tied up since the end of the war.

The first is the certification by the United States Shipping Board that there is adequate American-owned shipping to handle traffic offered on through export and import bills of lading. Railroads of the United States long have maintained rates on export and import commodities which are lower for the through haul, by rail and ocean, than the proportionate part would be on commodities moving wholly within the country by rail. Thus, steel moving from Chicago to New York, under bill of lading through to Liverpool pays a lower rail rate to the port than steel shipped over the same route but intended for consumption at New York.

Section 28 of the Merchant Marine Act provides that when it shall appear that there is adequate American flag shipping to handle this traffic, such reduced rates shall apply only upon goods shipped in American-owned vessels. Goods exported in foreign flagships must pay the full rail rate. The Shipping Board has certified to the Interstate Commerce Commission that such a situation now obtains and the Commission has entered an order providing that the differential in favor of goods forwarded overseas in American bottoms shall become effective June 20, 1924. The Commission's original order set May 20 as the effective date but this subsequently was changed to June 20. It is expected that further postponement will be ordered and a protracted wrangle is anticipated.

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