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240

Item
No.

548

b

Reporter's Statement of the Case

Description

Furnish and install 8 new furnaces (2 in each boiler) at $3,000 each.
Retube boilers. Cut out 1,124 defective tubes. Furnish and install
new tubes. Cost per tube installed $7.50..

Cost

$24,000.00

8,430.00

c

Sealing boilers. After furnaces and tubes are removed, scale remain-
der of internal surfaces. $50 each..

200.00

58

Renew defective bottom sections of front uptake breechings approxi-
mately 10' x 2'-12 gauge iron each boiler. $250 each.

1,000.00

66

65 Repair or renew as required broken and defective sections of various sized pipe covering..

500.00

Pumps-Dismantle feed pumps as required, remove outside plungers
to shop true up and replace same..

250.00

Engine department total..

91

Renew defective C. I. bends in ash ejector pipes, furnish necessary
labor and material to effect this renewal.

Rebrick, clean out, free dampers, and doors as required.

500.00

34,880.00

100,00

Stewards department total.

Total for vessel..

100.00

34,980.00

In addition to the work which the surveyor reported to be necessary, some additional minor repairs were needed. These included the installation of a new seagate at the stern, small repairs to the coal bunkers and one of the auxiliary engines, and the removal of the plank flooring laid on the car deck by the Nicholson Universal Steamship Company. The record does not show the total cost of these additional repairs but it would have been a relatively small amount.

15. Plaintiff depreciated the value of the Maitland No. 1 on its books from October 1, 1916, to December 31, 1919, at the rate of one percent per annum and thereafter at the annual rate of four percent. On the date of the requisition, the book value of the vessel, as shown on plaintiff's records, was $75,509.51.

16. From January 1, 1938, to August 20, 1942, plaintiff maintained insurance on the Maitland No. 1 based on a valuation of $100,000.

17. At the time she was requisitioned, the use to which the Maitland No. 1 was best adapted was as a car ferry on the Great Lakes. At that time, however, there was no demand for the vessel as a car ferry on Lake Erie and there is no satisfactory proof that there was any demand for her for use as a car ferry elsewhere on the Great Lakes.

Prior to 1936, the Pere Marquette Railway Company, which later became the Pere Marquette District of the

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Reporter's Statement of the Case

112 C. Cls.

Chesapeake and Ohio Railway Company, had a number of car ferries similar to the Maitland No. 1, operating on Lake Michigan and one in use on Lake Erie. Until about 1930, these car ferries held a competitive advantage over the allrail transportation of loaded freight cars moving from western points to New York and Canada. Freight cars trans

ported on the all-rail routes had to move through the Chicago yards where the congestion was so great that the freight cars were frequently delayed for long periods of time. In addition, freight rates on the car ferry lines were lower than on the all-rail routes. Sometime between 1928 and 1930, the railroads completed the construction of "an outer belt" railroad around the City of Chicago and this enabled them to avoid the long delays previously experienced in the Chicago yards. About the same time, the rate differential in favor of the car ferry lines was abolished. There were also changes in traffic on the ferry lines, which required more clearance between the car decks and the cabin decks of the vessels. As a result of these changed conditions, the ferry lines were no longer able to compete successfully with the all-rail routes and vessels of the Maitland No. 1 type became obsolete for further use as car ferries on the Great Lakes. By 1936 the majority of these outmoded car ferries had been laid up and were replaced by larger vessels, having greater speed to permit faster and more regular operation and provided with more clearance between the decks so as to accommodate larger loads. The new vessels were capable of carrying a larger number of freight cars and had additional facilities for carrying passengers in order to provide a new source of revenue for the operators.

18. Although there was no demand in 1942 for the Maitland No. 1 for use as a car ferry on the Great Lakes, there were a number of secondary uses for the vessel for which a demand did exist at that time.

In 1942, the Maitland No. 1 could have been adapted for use as a highway ferry, for transporting automobiles and passengers on the Great Lakes or similar bodies of fresh water involving no greater length of haul. The vessel could have been converted for that purpose more economically and

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Reporter's Statement of the Case

more quickly than for any other use, since the principal change that would have been required was the placing of an asphalt cover over the rails on the car deck to accommodate automobiles.

Between 1936 and 1940, several car ferries similar to the Maitland No. 1 were sold to purchasers who converted them to highway ferries.

In 1938, the Pere Marquette Railway Company sold the car ferry, Pere Marquette No. 20, which had been built in 1903 from the same plans as the Maitland No. 1, to the Michigan Highway Department. The sale price was $50,000, plus an additional $10,000 for delivering the vessel across Lake Michigan to a shipyard.

In 1940 the Pere Marquette Railway Company sold the car ferry, Pere Marquette No. 17, which had been built in 1901 to the same plans as the Maitland No. 1, to the Michigan Highway Department for $65,000.

In 1936, the Ann Arbor Railroad sold the car ferry Ann Arbor No. 4 to the Michigan Highway Department for $25,000. This vessel was smaller than the Maitland No. 1, being only 250 feet in length as compared with the 350-foot length of the Maitland No. 1.

19. Although the Pere Marquette Nos. 17 and 20 were comparable to the Maitland No. 1 in size, carrying capacity, speed and design, they were older vessels and on the dates they were sold, were in a much poorer state of repair than was the Maitland No. 1 on the date of the requisition.

The Pere Marquette No. 20 was laid up in September, 1930, and nothing was expended on her for maintenance or repairs between that time and the date of sale. In 1936, the owners made a survey of the vessel and estimated that it would cost $173,700 to place her in operating condition for use as a car ferry for a period of five years. After it acquired the vessel, the Michigan Highway Department expended $215,000 for repairing and remodeling her for use as a highway ferry.

The Pere Marquette No. 17 had likewise been laid up for a number of years prior to her sale. In 1936 the owners estimated than an expenditure of $147,200 would have been required to place the vessel in operating condition as a car

Reporter's Statement of the Case

112 C. Cls.

ferry for a period of five years. A total of $534,000 was expended by the Michigan Highway Department for remodeling and reconditioning this vessel.

There is no proof with respect to the age or condition of the Ann Arbor No. 4 at the time the vessel was sold in 1936.

20. In some instances, Great Lakes car ferries have been sold and converted to ocean-going car ferries, which operate between Texas City, Texas, and New York, between New Orleans and Havana, Cuba, and between Florida and Cuba. The cost of moving the Great Lakes vessels to the coast and altering them for use in salt water is substantial, and it has not been economically feasible to use them on the long routes from Texas to New York or between New Orleans and Cuba. For such long hauls, they cannot compete successfully with the Sea Trains which can carry about four times as many freight cars.

However, such converted vessels have proven satisfactory for car ferry service between Florida and Cuba. In 1942, there was a demand for a vessel such as the Maitland No. 1 for use as a car ferry between Florida and Cuba.

Shortly after the cessation of hostilities in World War II, the Grand Trunk Railway Company sold the Grand Haven, a car ferry formerly operated on the Great Lakes, to the West Indies Fruit and Steamship Company for $50,000. At considerable expense, the amount of which is not shown in the record, the vessel was floated down the Mississippi River and converted for use as a ferry between Forida and Cuba. The Grand Haven was built in 1903; she was a smaller vessel than the Maitland No. 1 but had more speed and power. There is no evidence regarding the condition of this vessel at the time of sale.

In May 1941, the Florida East Coast Railroad Company sold the Henry M. Flagler, a car ferry which had operated between Florida and Cuba, to Hans Isbrantsen of New York for $100,000. The purchaser owned a line of freighters but was not a car ferry operator. Apparently, he bought the vessel as an investment.

The Flagler was built in 1914 from substantially the same plans as the Maitland No. 1. The principal difference between the vessels was that the Flagler was equipped to

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Reporter's Statement of the Case

operate in and had been used in salt water. As in the case of the Maitland No. 1, the Flagler had been laid up for ten years prior to the sale. Between 1936 and 1941, the total expended for repairs or maintenance on this vessel was only $15,679, but between May 1941 and July 28, 1941, the purchaser, Mr. Isbrantsen, expended the sum of $63,820 for necessary repairs on the Flagler. On July 28, 1941, the War Shipping Administration requisitioned this vessel and appraised her value at $170,000, which the owner accepted as compensation for the taking.

In June 1942, the War Shipping Administration requisitioned two ocean-going car ferries which were owned by the Florida East Coast Railroad Company and had been operated by that company between Florida and Cuba. These vessels were the Joseph R. Parrott and the Estrada Palma. By negotiation between the parties, a value of $665,000 for both vessels, of $332,500 for each, was agreed upon, and the Florida East Coast Railroad Company accepted that sum in full payment of the vessels. Except for the fact that these car ferries were equipped to operate in salt water, whereas the Maitland No. 1 was not, the Joseph R. Parrott and the Estrada Palma were comparable in age, size, dimensions, engines, power, boilers, auxiliaries, and type of construction to the Maitland No. 1. The Joseph R. Parrott was built in 1916 and the Estrada Palma in 1920; both vessels were in service at the time they were requisitioned. Between 1936 and 1941, the owners expended $128,144 for maintenance and repairs to the Joseph R. Parrott, but the record does not reflect the amount spent on the Estrada Palma for repairs during that period of time. The Government had condition surveys made of both vessels, and the surveyors found that the estimated amounts required to repair them on or about the date they were requisitioned was $23,595 for the Joseph R. Parrott and $19,430 for the Estrada Palma.

The normal useful life of a car ferry operated on the Great Lakes is fifty years, whereas such a car ferry operated in salt water has a normal useful life of only forty years.

On the Atlantic Coast, the market price of vessels increased between 1941 and 1942 because of the greater demand for vessels which occurred after the beginning of World War II.

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