Boatnerd Discussion Forum

Until the early 1930s almost all of the major steamship companies that operated out of Cleveland and other Ohio cities were Ohio corporations with home ports in Ohio (for most of the large fleets it was Fairport). Then in the fall of 1931 the Ohio legislature changed the corporate law to provide, among other changes, for a tripling of the tax on properties. All of the companies immediately reincorporated their firms in Delaware, which had no property taxes.

I believe the first company to make the change was Columbia, followed closely by Wilson, Interlake and Pioneer. I don't know how many fleets got reincorporated by the end of the year (probably at least these four) but they all apparently moved pretty fast and by the opening of the 1932 season all these plus Cliffs, Hanna, Midland, Kinsman and others had done so and had changed their home ports to Wilmington (where as has been noted none of the vessels involved back in those pre-Seaway days could ever have gone near). In some cases (Columbia Steamship Co. to Columbia Transportation Co. and Midland Steamship Co. to Midland Steamship Line, for example) the company name was changed with the change in incorporation.

Many companies, not just ships and/or transportation companies are incorporated in Delaware. Corporations receive very favorable legal treatment in that State - not just taxes.

http://www.teenanalyst.com/askus/delaware.html

Taxes !

Why is it that so many of the boats on the lakes (freighters, tankers, tugs et al.) are registered to the port of Wilmington Delaware when they will rarely, if ever, actually call at Wilmington?