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Marine Review FOUNDED 1878 SHIP OPERATION : Volume 64 SHIPBUILDING : May, 1934 Protect American Shipping in Foreign Trade gaged in foreign trade must be provided to meet foreign competition. The administra- tion is thoroughly aware of this fact as indi- cated by the shipping subsidy program sub- mitted to congress by Secretary Roper. In- formed public opinion also recognizes this need. Naturally there are many suggestions as to the form and extent of such protection. Prssced in tr for American shipping en- In this connection we quote here in part a communication received from Otus O. Robinson of Highland Park, Mich.: “T have read with interest the article, Ship- ping Subsidy Program Proposed, which ap- peared in the April issue of MARINE REVIEW. “The first American colonists were ship- minded. They came in ships and kept in touch with their former homes by means of ships. This interest continued until about the year 1860. After the Civil war the people turned their thoughts to westward expansion and took an indifferent attitude toward a merchant ma- rine because they did not care about foreign trade. “After the World war, our westward expan- sion had reached the Pacific, the Panama canal had been opened, and we had an enormous ship tonnage due to war activities. We had begun to look across the Pacific and our trade with Japan and China was increasing rapidly. A few Americans are again becoming ship-minded and we realize that we need a merchant marine to help foster our growing foreign commerce. “The great natural wealth of our country which was exploited by the people soon raised our standard of living above that of other coun- tries. To protect our industries from cheap foreign goods, protective tariffs were enacted. These tariffs do not, however, protect American flag ships engaged in foreign trade from the CARGO HANDLING Number 5 low cost of building and operating foreign flag ships. The government did nothing to assist them until the World war taught us the need of an adequate merchant marine and then help was extended in the form of mail contracts. There are, however, better ways of assisting our merchant marine. “The American merchant marine must be subsidized but we should educate our citizens as to the needs and purpose of the subsidy. A good definition of a subsidy is, a grant from a government to assist an enterprise considered beneficial to the public. . . . Everybody knows we need protective tariffs but if subsidy is mentioned they become skeptical and tell you they don’t like the idea. Therefore, in grant- ing aid to a merchant marine, we should link it with our protective tariffs. It is my opinion this can be accomplished by:— 1. Abandoning gradually the present method of mail contracts. 2. Enlarging upon the powers of the present tariff commission to enable it to assist foreign trade ships by protective differentials. There would be a differential to cover the cost of the ship which would be paid over a 20-year period. This differential would be the difference in cost of a foreign built and an American built ship. One-twentieth to be paid each year, and any time spent by the ship in domestic commerce to be deducted. Another differential would cover the differ- ence in operating cost. This differential should be graduated according to speed of the ship. The amount of money paid each operator would be determined by the ton-mile of freight and mail and by the passenger-mile. 3. Money for the protective differentials would be appropriated from general treasury funds. 4. These differentials would be paid to all American owned ships, built in American yards, and flying the American flag. There would be no contracts and any operator qualifying, as above stated, would receive the differentials.”’ MARINE REVIEW—May, 1934 7