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February, 1910 At the conclusion of his communi- cated discussion Mr. McFarland said: Mr. Dickie speaks of the crew which should be 10 per cent American citi- zens. 1h vou with aime AS that, you "will te- rebuff. I have admiration Mr. Dickie, for he is one of the most splendid men have in this society, but there are some sugges- tions in his paper with which I can- not agree. go to Congress such ceive a for we Urges Appointment of Committee. As. -J said, Mr. President, the. real gist of all I have in mind, is the sug- gestion that if we are in earnest, and this society believes that it is a de- sirable thing to build up the Ameri- can merchant marine, it would pay the country to spend some money to do it, and I believe the thing to do is to have a suitable committee ap- pointed to take charge of the thing, prepare the reasons, present them to Congress, and laok after the matter all through Congress. Mr. E. P. Stratton. Ey cstratton: the remarks of Mr. McFarland with much interest, and have read the pa- per of Mr. .Dickie likewise, 'with great interest, but in over forty years' experience with the merchant marine in this, country 1: have. fad: a <few things beaten into me that most men have not been able to see, because they have not been dealing with the ramifications as they existed. It seems to me that the propositions as contained in this paper deal with the results; they do not attempt to remove the cause. The cause of the difficulties with the American mer- chant marine began when the Con- gress of the United States failed to make any allowance to the insurance companies in this country for the ex- . tra rate' of premium. and .the..extra losses which they had sustained in paying for war premiums during the. period of the existence of the rebel- lion. Several millions of dollars were converted into the treasury of the United States, and the consequence of that was the wiping out of every American insurance company in_ this country, with the exception of two. Hence, foreign companies came into this territory, and when they came to this empire state of New York, our insurance department quietly told them they would have to put up $200,- 000, on which they should be taxed for coming into this field, whereas the two remaining insurance com- panies, operating in this field had to I have listened to: TAE Marine REVIEW pay taxes on an aggregate amount of $20,000,000. This put the representa- tives of the foreign insurance com- panies on the inside of American bus- iness. It gave them a knowledge of American business from its inception, on a bushel of wheat or a barrel of flour, from the time it started from the west until it. reached the Euro- pean continent. Touching Upon Insurance. That condition has gone on from that time until this, and we have very few American insurance companies, and if you build a ship today you cannot insure her in America, you have got to go to foreign companies to place your insurance, and the capi- tal: which. 'controls; our «railroads 7is largely responsible. I had the pleasure a few years ago of knowing a distinguished citizen of this country, who has now passed away to the great majority, who pro- posed to build four 700-ft. ships to run in connection with his railroad. 1 was in conference with him, and thought the matter was settled when suddenly a gentleman from the other side appeared, and said--'"If you will desist from your purpose to build these' ships, we will buy so many hundred shares of stock of the rail- road, and. pay -you here so ' much above the market rate, and all we ask in return is the privilege of carrying the freight 'on this great system." That arrangement is in operation to- day. Railways Feeding Ships. * As early as 1868, when some of our great railroad systems here, several of them combined, found the neces- sity of replacing a very large bond loan, they went to Europe, and nego- tiated. with a' European house, and that banking house exact- ed of that system the right to take this whole loan. In consideration they said--""Gentlemen, we will build a line of ships and run it in connection with your railroad system, and all we ask is the freight of that system." That line of ships is in operation today, and it is for that line of ships largely that the great Ambrose channel has been dug to enable ships of the great- est magnitude to steam into this port and carry away the products of our soil. A few years ago I was over on the other side looking after the recon- struction of a ship in Belfast, and one day I was invited to the launch- ing of a 20,000-ton ship the next day, and I asked--where is that ship to run to? banking freight. The reply was--to Boston. 59 I said--I thought the running of a line of ships to Boston thad been proven a failure by the Cunard Co. years ago. The gentleman to whom I was talking said--"Oh, no, a. cer- tain system of railroad in the United States has lately become possessed of a line of railroad running from Albany to Boston, and that will give them 240 miles of railroad transfer from Albany to Boston; if that same freight were brought to New York, it would only give them 140 miles." Hence, he said; this company is build- ing four ships to carry this freight from Boston. That was the reason that induced another great railroad system to. extend its route to. tne other end of Long Island, in the hope of establishing a port there. The combination of the railroad interests and the steamship interests is very great in this couritry, and is con- trolled in Wall street, and there is a gentleman in Wall street who can control the boards of directors of the great international systems of steam- ships, and it is that system we have got to deal with--it is that system we have got to satisiy, it is that sys- tem we have got to consider in con- nection with the insurance interests before this system that our distin- guished friend refers to will work. Mr. John Reid. John Reid: It seems to me that in this little matter of getting a big American shipping trade together there is so much nonsense talked about as to Britain's position in the matter, and Britain's attitude to her own shipping trade, that it would not be .a. bad. idea, perhaps, tor .me. to give you a few words on the sub- © ject. (am "in. sympathy with the movement that the shipbuilders of America get all the ships to build they can, in which to carry her own I am in sympathy with the movement, and am not speaking with my tongue in my cheek. In addition to the advice which Mr. McFarland has given you, I think I can give you this advice, that perfectly sound proposition is not advanced by rotten argument. When I am told that the British government fosters and nurses its shipping trade, I laugh. The British government has hampered its trade by every kind of action and in- action. You say she spends $7,000,- 000 a year in mail subsidies. That does not support more than three per cent of the British shipping, and what is more, if you had studied the problem, you would find that every dollar of the $7,000,000 was well earn-