A Plan Defunct

With a few thousand well-chosen words Harry M. Daugherty, Attorney General, disposed of the best laid plan of Messrs. Farley and Lasker, Chairman and ex-Chairman of the Shipping Board, for disposing of the Government's ships.

The plan, announced by Mr. Lasker before his retirement (TIME, June 18) and perfected by his successor, Mr. Farley, was for the creation of 18) and perfected by his successor, Emergency Fleet Corporation, which would operate the ships. By this means complete lines were to be built up, with trade names, goodwill, terminal facilities and all the advantages of complete business enterprises. It was proposed to sell the ships in time by the simple expedient of selling the stock of these corporations.

Mr. Daugherty denied the legality of this plan because under the Merchant Marine Act the Shipping Board is empowered only to sell or to operate the ships. As a means of sale, Mr. Daugherty held that the plan was inadequate, because the exchange of ships for stock in a corporation was not a sale within the meaning of the Act, which implies that money must be received. As a means of operation, Mr. Daugherty found the plan illegal, because, if the ships were transferred to corporations, the Government technically would not possess the ships to sell later on. He raised, in addition, several minor objections.

Now the Shipping Board is looking for a new plan. Meanwhile it has advised President Coolidge that there is no prospect of managing the Government's fleet so as to avoid a deficit. Various factors in the cost of operating ships under American registry add a cost of $5 a ton over that on foreign ships. Therefore the best that the Board can hope to do, is to reduce an inescapable deficit.