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osnnamennoanie ee 2 oe ote = Merchant Marine Commission. _-- Milwaukee, Wis., July 22--The Merchant Marine Commis- sion ended its great lakes' hearings at this port yesterday ~ A long list of capitalists, manufacturers and'.transportation men told the commission that they favored government aid for the merchant marine, but they varied as to their methods. Most of them believed that direct subsidies would meet with no favor from the public. After the close of the hearing, Senator Gallinger of New Hampshire, chairman of the com- mission, declared that the hearings of the commission had proven that public sentiment is opposed to direct subsidy legislation. An interesting point was brought out at the hearing by Congressman Spight of Mississippi, a member of the com- mission, who suggested that foreign nations which granted subsidies and subventions were violating the spirit of the reciprocity treaties they had made with the United States. From this he argued that the United States would be jus- tified in abrogating the treatiés, which are now a bar to a plan of discriminating duties. The manufacturers heard by the commission laid partic- ular stress on the fact that under present conditions Amer- ican exporters are seriously hampered by the lack of shipping facilities, that the repeated transshipment which is now nec- essary to bring goods to their destination cause loss, and that foreign lines refuse redress for breakage. This, coupled with long delays in finding vessels to various ports, they de- clared, prevents a proper growth of export trade, and might be obviated by American lines and American methods. The men who testified before the commission were: Frank G. Bigelow, president of the American Bankers' association ; David C. Harlowe, traffic manager of the Allis-Chalmers Co.; Walter Read, president of the Filer-Stowell Co.; William O. Vilter of the Vilter Manufacturing Co.; Thomas F.. Howe, president of the Milwaukee Refrigerator Transit Co. and for- merly traffic manager of the Pabst Brewing Co.; E. A. Uhrig, president of the Northwestern Fuel Co.; Capt. David Vance, one of the best known vesselmen on the great lakes; George H. D, Johnson, grain shipper; Capt. H. M. Merryman, mem- ber of the New York Shipmasters' association; A. E. Snuggs, general agent of the Pere Marquette railroad system; Joseph Goldbaum, secretary-treasurer of the Pere Marquette Steam- ship Co.;, Capt. F: H. Magdeburg; E. T. Wheelock, editor of The Sentinel, and Julius Bleyer, editor of the Evening Wis- consin. Frank G. Bigelow asserted that the business men favored aid to the shipping interests, if it could be done in a way that: would appeal to the fairness of the people. He declared that if. ocean freighting were made profitable, capital would be glad to invest in it. Julius Bleyer read a paper on "The Evolution of Lake Shipping," and after giving a history of the growth of the lake matine, said in part: "The sympathy of the general public being in favor of assisting our languishing merchant marine engaged in the foreign trade, the question before-you is whether it is possible to extend assistance sufficient to.overcome the heavy handicap, - and if so to ascertain how the assistance shall be extended. | have followed the hearings of your honorable commission with great interest, and have noted the points that have been raised and the arguments that have been advanced. In my humble opinion, Mr. Thomas Clyde of the Clyde line of steamers stated the proposition succinctly at your New York hearing. As it costs from 30 to 40 per cent. more to build a ship here than abroad, he suggested a construction bounty to offset this difference. As the cost of operating an American ship is about 30 per cent. more than the cost of operating a foreign ship, he suggested an operating bounty or subsidy; and as speed is-expensive, he suggested a mail service bounty. These views are in accord, with my. own. It has been said that the extra. cost'of the American ship would not deter in- vestment in shipping for the foreign trade if the cost of oper- ating the American ship were not higher than the cost of operating foreign ships. This is probably true; but a subsidy plan might be 'made to comprehend an interest return for a fixed period--an annual rebate large enough to. pay a nom- inal rate of interest on the extra investment, plus a percentage for depreciation. Roughly, a rebate representing a 4 per cent. tate of interest on the extra capital and a 5 per cent. rate on the same extra capital to cover depreciation ought to put an American investor on an even footing with the foreigner so far as the ship is concerned. If a rebate of this kind were provided, it could be limited to a fixed term of years, as it is possible that with a revival there would be established gradually a systematic standardization of hulls, like that which has obtained in the shipbuilding trade of Great Britain, and in consequence ships might eventually be built as cheaply on this side of the Atlantic as in foreign yards. This element of the proposition is within the scope of the protective tariff idea--sthat of building tip struggling industries. "The problem of extra cost of operation is one that will probably resist ultimate solution. It cannot be solved unless American wages decline to the level of European wages, or foreign wages increase to the level of American wages. As neither of these changes are within the bounds of rational expectation, the disadvantage in the matter of operation must be regarded as permanent. As the aim of protection to American industries is to provide a barrier against the foreign competitor equal in height to the difference between foreign and American wages, a rebate is suggested in the case of shipping, based upon a close estimate of the percentage of in- creased cost of operation. For instance, after a vessel owner had presented his statement as to cost and received his annual rebate in interest upon the extra capital invested, plus an allowance for depreciation, he could be allowed a rebate based upon his expense account for the year, or a rebate per head based on this showing as to the number of men employed during the year and the number of days of employment. This would keep the subsidy or rebate down to actual losses, and obviate payment by the government for the time during which ships are lying idle. It seems to me that assist- ance could be extended in this way without danger of over- payment in any case. Besides, a tonnage rebate system, and a wages rebate system could be understood by the average tax- payer, and would therefore be viewed with less suspicion. _ "The mail service bounty could be extended on the prin- ciple upon which compensation for mail train service 1s _ based, Speed is costly, and in order to insure it a liberal price should be paid' the mail service. It has been stated that the railroads get $8.10 from the general government for carrying mail matter whose weight does not exceed in amount that of freight which -is carried for the express companies for $2.43%. In other words, it is said that the government pays three times as much for carrying the mails as the railroads charge the express companies for the same service. If this be true, the difference can be said to represent the premium paid for the rapid carrying' of the mails. If this is allowable in the mail service on the railroads it ought to be fair to pay a high rate for the carrying of the mails: on the seas, in order to stimulate the development of steamship traffic." David C. Harlowe said that the Allis-Chalmers Co., one of the greatest manufacturers of machinery in the world, shipped extensively to all countries, but that it is difficult to find adequate shipping facilities, especially to Mediterranean, South American and Australasian ports, and that the transfer from