Iwasaki Ships

Swept from the seas by Depression, nearly one-half the world's ships ride at anchor, rust-streaked and dingy. Dwindling water-borne commerce has forced the great shipping lines to lay up ships, slash services, cooperate with traditional rivals in eliminating duplicate runs. When these economies failed to shore up crumbling merchant marines, pride and profit have dictated mergers. North German Lloyd and Hamburg-American signed a 50-year pact partitioning their North Atlantic trade. In his Fascist forge Benito Mussolini hammered three big Italian firms into the Italia Line, cocky owner of the new S. S. Rex and S. S. Conte di Savoia. Roosevelt-Dollar-Dawson interests combined to take over tottering U. S. Lines. Japan's two largest shipping companies, Nippon Yusen Kaisha (Japan Mail Steamship Co.) and Osaka Shosen Kaisha (Osaka Mercantile Steamship Co.) last year agreed to divide some of their far-flung traffic. Last week it was reported that officials of these two big lines were negotiating an actual consolidation.

Nippon Yusen Kaisha is a big if not rich province in the business empire of the Iwasaki, Japan's No. 2 industrial family. Under the family trade name, Mitsubishi ("Three Diamonds," derived from their crest), they own steel works, shipbuilding plants, chemical, electrical equipment and airplane factories, banks, insurance companies, trading companies, urban real estate. As industrial pioneers they rank ahead of the omnipotent house of Mitsui, Japan's No. 1 family. But unlike the ancient house of Mitsui, the Iwasaki fortune dates only from Japan's first industrial stirrings 60 years ago. And unlike the Mitsui family the Iwasaki scions are active executives. The two barons who head the two branches of the family last year paid the highest income taxes in Japan. Though family-controlled. N. Y. K. is never listed as a Mitsubishi enterprise.

When the two big lines reached a working agreement last year, N. Y. K. purchased a minority interest in O. S. K. from the controlling group of Osaka businessmen, thereby assuming the dominant position. O. S. K. is capitalized at 100,000,000 yen (about $23,000,000), N. Y. K. at 64,250,000 (about $14,800,000), but in both passenger and freight traffic N. Y. K. ranks ahead of O. S. K. By the agreement O. S. K. abandoned its trans-Pacific line, leaving N. Y. K. with a monopoly of the Japan-West Coast trade, while N. Y. K. withdrew its South African and East Coast South American services. Both still run ships to New York. Like Dollar Steamship Lines, O. S. K. maintains a round-the-world service, calling at South American and African ports. Most of its modern ships are fast freighters with accommodations for a limited number of passengers. Bidding for the passenger and silk traffic, N. Y. K. recently built nine motor vessels, three of them the biggest and fastest motor ships in the Pacific. If the two companies merge President Kenkichi Kagami of N. Y. K. will probably head a combine owning 1,500,000 tons of shipping, 260 vessels. Then more accurate than ever will be N. Y. K.'s boast that its ships "Sail All Seas, Link All Lands."

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