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Blue Book of American Shipping. 3 It might be pertinent to state, since so many laymen appear to be ignorant of it, that the coastwise trade of the United States and the foreign trade are two different things. The coastwise trade, meaning trade between United States ports, is a protected trade. Vessels of other flags may not engage in it. The past four years have marked a distinct revival in ship building for the coastwise trade, but the crest appears to have been reached, for new orders are not forthcoming. The novelty of the coasting trade during the past year has been the construction of the seven-masted schooner Thomas W. Lawson. Since the Spanish-American war naval contracts have been well distributed among the coast ship builders. During the year contracts for four battleships, two armored cruisers and two gunboats have been given to them. Contracts for two more battleships are about to be given, and in addition the New York navy yard is building one battleship. Forty-one warships are at present under construction, representing a displacement of 338,948 tons, a total horse power of 415,500, and costing for hulls and machinery $90,314,516. During the year the United States Ship Building Co. was formed to take over the plants of the Union Iron Works, San Francisco; the Bath Iron Works and Hyde Windlass Co., Bath, Me.; the Eastern Ship Building Co., New London, Conn.; the Harlan & Hollingsworth Co., Wilmington, Del.; the Crescent Ship Yard, Elizabeth-port, N. J.; the Canda Manufacturing Co., Carteret, N. J., and Samuel L. Moore & Sons, Elizabethport, N. J. Later the plant of the Bethlehem Steel Co. was added, Mr. Charles M. Schwab transferring it to the ship building company, though retaining an issue of $10,000,000 in bonds as an exclusive lien upon the property. In addition he received $20,000,000 in stock, equally divided between preferred and common. It was soon found that the ship building company was capitalized far beyond its tangible assets and earning power, though the subsidiary plants themselves were in a thoroughly healthy condition. The inevitable result was failure to meet the fixed charges upon its sheaves of securities and the court was under the necessity of nominating a receiver for it. The unfortunate plight of this company is no reflection whatever upon ship building as a thoroughly sound and excellent business; it is merely another evidence of the folly of supposing that values are created by artificial means. A plant is worth no more than it can earn. A foreview of ship building on the great lakes does not show many orders in abeyance. A year ago the ship yards were filled up with orders for a full year ahead. But that is not the case now. The lake ship yards, broadly speaking, are now well up with their work. If they had to do so they could probably turn out all orders on hand within six months. Those best informed, however, do not take a dubious view of things on the great lakes. The industry, as stated before, is special; the ships are not like other ships; the shipping is not like other shipping; it is not made up of a multiplicity of things as is ocean carriage, but is confined to a few items in bulk— these items are likely to continue to be moved for years in a constantly ascending scale, and ships will continue to be built to carry them. Moreover, a fair part of existing tonnage on the lakes is wooden; it is old and decaying and must go the way of all craft; and it must be replaced by new and more modern carriers. Thus ship building on the lakes for many years is assured, although the number of orders for the coming year will fall considerably short of the business of any of the past three years.