Ship Board Bogged

The U. S. Shipping Board last week lifted its best foot and prepared to take a $16,000.000 step out of the bog of unprofitable Government shipping. The Senate, all nerves, screamed protests. The Shipping Board put its best foot back into the bog and waited. President Coolidge scowled displeasure at the Senate.

The U. S. owns today about 600 merchant vessels, 250 in active service. Its operating deficit last fiscal year was $16,279,369. For five years President Coolidge has been urging the sale of the Government's ships and retirement from such a poor business.

Last August the Shipping Board put on the auction block its two best Atlantic properties--the U. S. Lines and the American Merchant Line. The bids submitted were announced last month. High bidder was Paul Wadsworth Chapman of Manhattan, a daring and potent bond, real estate, public utility and air transport man. He offered: $13,782,000 for the six U. S. Liners (Leviathan, George Washington, President Harding, President Roosevelt, America, Republic); $2,300,000 for the five "Americans" (Banker, Farmer, Merchant, Shipper, Trader); $218,000 for pier leaseholds and sundries--total bid, $16,300,000.

To the Shipping Board the Chapman bid appeared reasonably adequate. For example, the Board's books carried the Leviathan at a value of $6,050,600 (though the U. S. spent more than $10,000,000 to recondition her). Mr. Chapman's offer itemized $6,782,000 for the Leviathan. The "American" vessels, all alike, cost the U. S. between $3,500,000 and $4,000,000 each to build. The Board valued them at $340,800 each. Mr. Chapman bid $460,000 apiece for them.

The terms of the Chapman bid were specified $4,000,000 in cash, a note for the balance, operation of 11 ships for five years, and construction of two new ships by borrowing 75% of their cost from the U. S.

The rat which the Senate thought, on the eve of the Chapman deal's consummation, that" it smelled, was not only a matter of money. Rubicund Senator McKellar of Tennessee complained loudly that a onetime Shipping Board official, Joseph Edward Sheedy, was in shameful cahoots with Mr. Chapman. Cried Senator Mc-Kellar:

"The Chapman company is not a shipping concern, but sells bonds and real estate, and apparently Mr. Sheedy, the principal promoter, is the real purchaser of the ships. It looks like a promotion scheme, and I appeal to the Senate to stop this paper sale."

Senator McKellar moved that the Shipping Board be instructed to halt the sale until the Senate's Commerce Committee could investigate. The Senate, always pro-government-ownership-operation on shipping, gravely adopted the McKellar resolution. Washington's Jones, the Senate's chief shipping expert, sighed profoundly. "In my judgment," he said, "the United States will never be offered so much for the ships again."

Mildly defiant, the Shipping Board answered the Senate obliquely by voting (6 to 1) to accept the Chapman bid, subject to further consultation.