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satisfactory situation of our merchant marine. Fortunately during the past year there have been some naval contracts and there is a good prospect for more, but as regards new merchant work it is still a case of hope de- ferred. Without burdening you with statis- tics the merchant marine situation may be pictured in a few words. While as to total tonnage we are second only to Great Britain in one respect we are first and the rest of the nations including Great Britain are nowhere. We are _ pre-eminent and lead the world in idle, unused, laid up, and out-of-date tonnage. When we consider building it is another story. At the beginning of October we were seventh in _ ton- nage building. The six countries ahead of us in the order of amounts of tonnage building were Great Britain, Germany, Italy, Holland, France and Denmark. Sweden and Russia were each only about 10 per cent behind us. Looking at the matter in another way, of completed world tonnage, if we include our idle and unusued ton- nage, the United States owns some- thing like 20 per cent—not an un- suitable figure considering the mag- nitude of our commerce. But of the new tonnage being built in October the world over only 3 per cent was under construction in the United States. Pacific and Atlantic Shipyards The story of this percentage is fully confirmed by the concrete situ- ation of our shipyards. On the Pa- cific coast before the World war there were building yards on Puget sound, San Francisco bay, and in Southern California. I am _ refer- ring to prewar conditions, not to the intense effort inaugurated in the war, not counting the cost to meet the Macedonian cry from abroad for ships, more ships, and _ still more ships. Today on the Pacific coast not only have the mushroom war- time plants vanished, but the pre- war yards with minor exceptions are as regards building closed or in a state of suspended animation. On the Atlantic the yards as a whole are going steadily down hill though they are not quite so near the bottom of the hill as on the Pacific. The year just past has seen the final chapter of dismantling of the yard in Maine that for more than twenty years led in designing and building our naval destroyers. No- where were better destroyers built than at Bath. 30 Upon the Delaware a yard where ships had been built for ninety-seven years completed three passenger ves- sels unsurpassed in their class in de- sign, material and workmanship, and closed its doors. Only upon the Great Lakes and our inland waters have the building yards held their own during the past year. Overseas Commerce Under As regards overseas commerce, the figure of 51 per cent fixed in the congressional declaration of policy of 1920 as the least proportion that should be carried under the Amer- ican flag has never been reached, and we are now handling about 30 per cent of our overseas commerce under our own flag. However, this percentage taken alone is liable to give a wrong idea of the condition of our overseas carrying trade. It includes, for instance, the operations of tankers owned and operated by oil companies as an incident of their major business. If we consider carrying’ trade proper, excluding vessels owned and operated by large companies mainly ‘in connection with their own prod- ucts, the American flag percentage would be well below 30. Perhaps you think I have now reached a point where there should be given a formula or prescription that would remedy the situation. That would be easy but I am not going to do it. One great reason why mat- ters have reached their present pass is that there are so many methods of remedying them—all perfectly sound as a remedy. Considering three broad _ divisions only—each has in it any number of possible variations—it is obviously possible—mechanically under suitable financial arrangements, that _ this country could have a merchant marine doing 51 per cent of its carrying trade under government ownership and operation, under government own- ership and private operation, or un- der private ownership and operation. The trouble is that hardly any two of the very large number of doctors that have been and will be consulted agree fully as to the relative cost and desirability of the many possible prescriptions that will cure the pa- tient who for lack of some prescrip- tion grows steadily worse. Of course there are doctors that do not think that the patient should be cured. There are plenty of for- eign doctors who are prescribing in the case though not ostentatiously. The foreign doctors and some few of our own claim that the world in- MARINE REVIEW—December, 1927 cluding the United States would be happier and better off if we aban- doned the idea of an overseas mer- chant marine and let the patient die; that we could rely upon foreign flag ships to do our carrying trade better and more cheaply than we can do it under the American flag. Without venturing into the fields of diplomacy and international rela- tions it is to be hoped that hap- penings in those fields during the past year have brought home to our peo- ple the fact—and it is a fact—that any nation—every nation—considers its own interests first—also—last and all the time. Once wholly dependent upon foreign flags for our carrying trade the inevitable corollary is that we would pay through the nose. However, the nation-wide investi- gations completed by the_ shipping board last winter made it quite plain that a vast majority of our citizens wish a merchant marine under he United States flag. They wish the patient to be cured. Let us hope that the doctors dur- ing the coming session of congress— a very critical one for the merchant marine—may produce a_ prescription that will at least start the patient on the road to health. Relative High American Costs Let me remind you at this point that of the complication of diseases with which the patient is afflicted the one which interests us most professional- ly is the excess cost of building ships in this country as compared with foreign costs. This is of course due mainly to the fact that wages en- ter so lightly into the cost of ship- building and our wage scales are above those of other shipbuilding na- tions. Here again the doctors dif- fer as to the amount of the excess cost. The exact amount, however, is not the thing of importance. With capital charges—interest, deprecia- tion, insurance, etc—25 to 80 per cent of the cost of operation of a permanent merchant marine we are under a crushing handicap whether our first costs are 40, 50 or 60 per cent above the foreigner. I earnestly trust that when the merchant marine prescription is compounded it will take care of this question of ex- cess first cost, directly and definitely. With any roundabout scheme there will be less pressure upon the pro- fession to reduce first cost and only by constant pressure in this direction and constant practice in building can we expect our excess cost to be lowered even if not wiped out. Of course there are doctors who would give up our shipyards and