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22 MARINE REVIEW. [January 24, REVIVAL OF AMERICAN SHIPPING. WHY WE DROPPED OUT OF SHIPPING IN 186) AND REMAINED OUT—HOW THE BILL NOW BEFORE CONGRESS PROPOSES TO BRING ABOUT A RETURN OF OVERSEA TRADE IN AMERIOAN VESSELS. U.S. Senator Marcus A. Hanna in National Magazine. [Copyrighed by the W. W. Potter Co., Ltd.] Few people of the present generation realize the enormous fiscal ad- vantage accruing to a nation from the possession of a merchant marine of its own. Forty years ago this nation contested with Great Britain su- premacy upon the sea. To be sure the iron ship was beginning to secure the weather gauge over the American wooden ship, but the fact was un- noticed in the general upward growth of our shipping in the foreign trade. In those days, and before railroads had gridironed the country, it was to the transportation upon the seas that our people looked with the greatest pride, and from which the nation derived its greatest single income. All of these things have changed. With the disappearance of our ships came the advent of our railroads, transcontinental and otherwise, and our capital was busily and most profitably employed in those colossal undertakings. Had it not been for the rapid growth of our railroads, more attention would have been given to our lost shipping, after the civil war, but the growth of one to a large extent obscured the shrinkage in the other. Our people were busily employed, and they were profitably employed, and so they did not particularly concern themselves with the loss of our shipping. Capital being in great demand in our rapidly grow- ing land industries, its owners were indifferent to the lack of opportunity for profitable investment in the ships in the foreign trade. Just the re- verse was the case with our foreign rivals, especially Great Britain. There was neither opportunity nor necessity for railroad building there that there was here, and the sea continued to absorb the attention of her. capi- talists and her merchants.. American neglect of the sea was England’s opportunity. What the confederate privateers, which had been constructed in British ship yards, failed to do directly, American indifference to the sea at the close of the civil war did do. : It was entirely out of the question for our people to think of returning to the carrying of our foreign commerce, with the conditions that pre- vailed at the close of our great national struggle in 1865. In the first place, our ships had geen practically swept from the sea through capture and sale to foreigners. Next, our people had invested their money, to the extent that they had drawn it from their shipping, in prosperous land industries, from which latter foreign competition was almost wholly ex- cluded. Again, it cost 33 per cent more to build, and about 60 to 70 per cent more to run a ship under the American flag than it did to build and run one under a foreign flag. Foreign ships, moreover, had every advan- “tage in our foreign carrying, under our laws, that our own ships had free trade, with its keen competition, prevailed upon the sea, and pro- tection with the competition confined to our infant industries prevailed upon the land. There was no chance for profit in the first, there was every chance for profit in the last. This explains completely why our people dropped out of ship owning in 1865, and why they subsequently remained out of it. If it be said that the admission at that time of foreign-built ships to American registry would have been inducement sufficient to at- tract American capital into our ships upon the sea, under our flag, the assertion cannot be supported. Against the difference in cost of operation of over 60 per cent, even had the ships been built abroad, they could not have been profitably sailed under the American flag. Neither in 1865 nor at any time since then, up to the present moment, has there been anything in the proposition to admit foreign-built ships to American register to attract those in the business of ship owning into such an advocacy entirely confined to free traders. By a law which has existed upon our statutes for 108 years, foreign- built ships have been excluded from American registry. That was protec- tion to the builders of ships in the United States to a certain extent. If an American desired to engage in our foreign trade, under the American flag, he was obliged to build the ships he required in the United. States. But there was nothing to prevent him from building them abroad and running them in our trade. The fact that he would be obliged to run such ships under a foreign flag was no deterrent. In fact, in order to successfully and profitably compete he would have been obliged, even had he built his ship in the United States, to run her under a foreign flag. Why? Because the expense under foreign flags, and under which his competitors in the business were running their ships, was very much less than under the American flag. This was so in 1865, and it is so today, and has been so during all of the intervening years. So with “free ships” or without them, it would have been, as it is now, impossible to profitably run ships under the American flag in the foreign trade of the United States. Very few of the people who clamor for “free ships’ are aware that the purchase of foreign ships and their operation in our foreign trade is a privilege that has never been denied to our own citizens. The mere denial of the right of American registry has not been the denial of any advantage—and this fact cannot be too often asserted in answer to the insensate clamor for “free ships.” Again, the claim that Great Britain’s shipping has grown to its present proportions because of her “free ship” laws—because foreign-built ships are freely admitted to British registry—is a clear misstatement of the facts. Who will have the hardihood to assert that the British merchant marine is made up of foreign-built ships? ‘Who will assert that more than a fraction of one per cent of Great Britain’s merchant marine was built outside of Great Britain? Who will deny that British shipping is entirely British-built today? To be sure, fifty years ago a few American clippers were put under British registry, and they established a record in the British-Australian trade which was the phenomenon of the time in the reg- ularity and celerity of their voyages—records that many. Britons today pride themselves upon, little remembering that they were made by Ameri- can-built clippers. But this completes, practically speaking, the entire record of British purchases of foreign-built ships. Who, in the face of these unquestioned facts, then, can honestly assert that Great Britain’s marine is due to her “free ship” laws? For a free ship law to have built up British shipping, her people must have bought their ships from other nations. Unless Britons have bought foreign ships, and built up their marine in that way, their free ship laws have done nothing—absolutely nothing—to build up British shipping. If it be said, however, that for- eigners have bought British ships, it cannot be claimed that the purchase of British ships by foreigners has built up British shipping—quite the contrary. To the extent that foreigners have bought British ships, to that extent competitors to British ships have been created. It cannot even be said that Great Britain’s free ship.laws have benefited British ship builders—because the free admission of foreign-built ships to British register did not induce foreigners to buy British-built ships. Looked at from every point of view, the fact remains uncontrover-~ tible, that the free ship laws of Great Britain have done practically nothing to build up British shipping. Causes entirely removed from and apart from her free ship laws are responsible for the growth of British shipping. To the extent, therefore, that an attempt is made to delude Americans into believing that the growth of British shipping is due to her navigation laws, to that extent a palpable untruth is being circulated. It is equally true that the free admission of foreign-built ships to American register would have no appreciable effect upon the growth of shipping under our flag in our foreign trade. Once this fact becomes known, once it dawns upon the minds of sincere American advocates of free ships, the fallacy of their argument must be apparent to them. It is to be expected that the iteration and reiteration of this truth all over the country will do much to eliminate from the discussion of the shipping question an alternative proposition that, if adopted, would accomplish practically nothing for our shipping in the foreign trade. Coming down to the shipping bill now pending in congress, there is much to be said. It recognizes that there still exists a difference in the cost of American as compared with foreign-built ships equal to about 25 per cent. In order to induce our people to build ships in this country, they must in some way be indemnified against the disadvantage of this 25 per cent extra cost of construction. The reason why it is desirable to have ships built in this country is that it equips the nation with ship yards, which are, in a way, and a direct way too, a part of the naval equipment of the United States. The more demand we create by favorable legisla- tion for American-built ships, the more plants we bring into existence to compete for the building of our warships, and, inevitably, the cheaper will be the cost of our warships to the nation. Then again, the employ- ment of American labor, in the putting together of American materials, into ships in American ship yards, will cause an expenditure in our ship yards alone of from $50,000,000 a year upwards, where less than a million is now being expended; that is to say, for ships to engage in our foreign carrying trade. It has been computed that this accomplishment would, in the employment that would be given through the expenditure of that money over and over again in the United States, maintain at least 1,000,- 000 of our people, by giving employment to at least 250,000 more than employment is given to now. Again, it will attract American boys into our ships, a thousand of which will be in demand the moment the bill becomes a law, and additional thousands of which will be educated at the expense of our ship owners during the entire life of the bill. The bill now before congress for the rehabilitation of our shipping in the foreign trade, therefore recognizes that the requirement that the ships shall be built in the United States, involves the owner in an extra expense of about 25 per cent, as compared with his foreign rival possessing a foreign-built ship. While it is expected that the demand for American ships will eventually reduce the cost to the level of foreign-built ships, and without reducing the price of American labor, that accomplishment will not be immediate, and the bill merely provides compensation to offset that extra cost during the period that the cost in this country will be higher than abroad. Interest, depreciation and insurance must be carried along’on that extra cost, as well as on the entire ship, during the period of her life; and that explains why the bill provides for the payment of this compensation for twenty years. Then again, the cost of running ships under the American flag has been computed at between 30 and 40 per cent higher than the cost of running foreign ships. Provision is made in the bill to offset that extra cost too, by the payment of the compensation pro- vided for in the bill. Whether the ships sailing under our flag and regis- ter be American of British-built, this difference in cost of operation will exist. It is due to the higher wages paid to American officers, seamen and firemen, and to the better quality and larger quantity of food fur- nished them. Unless these better wages are paid, and unless this better food is provided, we cannot secure Americans, either as officers or as sea- men and firemen, to run our ships in the foreign trade. The offsetting of this difference, in order to make good to the American owner the extra cost of operation, is an essential prerequisite to our maritime growth under our flag. The value of the ships that are built in the United States, and the value of the men who man them, to our navy, in time of trouble, in itself will more than compensate the United States government—the American people—for all the money they expend in inducing our citizens to build and to run ships under the provisions of this bill. Then again, the bill provides extra compensation based upon larger size and greater speed. This extra compensation is provided in order to offset the subsidies and bounties paid by foreign governments to foreign ships, that will be in competition with American ships in our foreign trade. It is true that the ships of the greatest speed are most useful to the nation in time of trouble, as was amply proven during the Spanish war, when the four fleet ships of the American line on the picket line of the Atlantic searched for the dreaded Cervera fleet, and after locating it swiftly bore the news to the American squadrons waiting to engage them. It was the knowledge that the Spanish government had of the impressment of these swift American steamships, that prevented Spain from sending Cervera to any of our Atlantic seaports, but that compelled our enemy at that time to send his ships far to the south. The value of the four fast ships of the American line, during the short- lived war with Spain, cannot be computed in dollars and cents. The value of the ships themselves was as nothing to the security their presence upon the picket line gave to the business interests of the nation during that period of dread suspense. To have similar ships to these built here- after, the bill must make such provision as will safeguard owners against loss in their operation. This is not a question of benefiting this or that ship owner, or this or that corporation—it is a question, merely, of bene- fiting the United States as a nation. The benefit to the individual or the corporation that builts the ship and runs it, is a mere incident—a very necessary incident—but an incident, nevertheless, to the accomplishment of that which makes for the better safety of the United States in the place where, of all places, it is most weak. Let us strike from the bill the pro-