nt phases of our shipping problem that have come before you
should receive wider discussion by the country. As the result of war
pressure, we shall spend over $2,800,000,000 in the completion of a
fleet of nineteen hundred ships of a total of 111,000,000 tons--nearly
one quarter of the world's cargo shipping. We are proud of this great
expansion of our marine, and we wish to retain it under the American
flag. Our shipping problem has one large point of departure from the
railway problem, for there is no element of natural monopoly. Anyone
with a water-tight vehicle can enter upon the seas today, and our
government is now engaged upon the conduct of a nationalized industry in
competition with our own people and all the world besides. While in the
railways government inefficiency could be passed on to the consumer, on
the seas we will sooner or later find it translated to the national
Treasury.

Until the present time, there has been a shortage in the world's
shipping, but this is being rapidly overtaken and we shall soon be met
with fierce competition of private industry. If the government continues
in the shipping business, we shall be disappointed from the point of
view of profits. For we shall be faced with the ability of private
enterprise to make profits from the margins of higher cost of government
operation alone. Aside from those losses inherent in bureaucracy and
political pressure, there are others special to this case. The largest
successfully managed cargo fleet in the world comprises about one
hundred and twenty ships and yet we are attempting to manage nineteen
hundred ships at the hands of a government bureau. In normal times the
question of profit or loss in a ship is measured by a few hundred tons
of coal wasted, by a little extravagance in repairs, or by four or five
days on a round trip. Beyond this, private shipping has a free hand to
set up such give-and-take relationships with merchants all over the
world as will provide sufficient cargo for all legs of a voyage, and
these arrangements of cooeperation cannot be created by government
employees without charge or danger of favoritism. Lest fault be found,
our government officials are unable to enter upon the detailed higgling
in fixing rates required by every cargo and charter. Therefore they must
take refuge in rigid regulations and in fixed rates. In result, their
competitors underbid by the smallest margins necessary to get the
cargoes. The effect o