Prize Essay of 1882.
“Nil clarius aquis.”
I. It is a curious fact that a great commercial question, vital in its influence upon the wellbeing of an eminently practical nation, should so often be approached upon the side of sentiment. A bewildering maze of statistics, an array of accommodating figures, and a dexterous spinning of subtle phrases, are made to form the premises, not of an irrefutable conclusion, but of an appeal, which fires the heart, if it do not satisfy the head, of many a patriot. To discuss a question so sober, so melancholy as the restoration of the Merchant Marine, from the standpoint of its poetical merits, is not a priori convincing of its imminent necessity; and, whether an advocate shines in the broad light-beam of free trade, or is glorious in the panoply of protection, he should forswear heroics and pleas ad kominem, and treat the subject from the grossly material vantage-ground of dollars and cents. There should be in the beginning, for example, a thorough understanding of the terms to be employed in the discussion: a spade should be called a spade, and mean nothing else; the necessity and fitness for the possession of a merchant marine by any country should be proven, and not assumed; the history and growth of the industry should be studied and compared; the causes of its decay should be formulated; and then, as with an invalid after a careful diagnosis by a physician, the remedies should be prescribed. Sentiment can no more enter this problem than into the determination of the next eclipse; and so far as the question permits, all its complex and interdependent conditions should be viewed and tested.
It is an axiom that the greatest good to the greatest number is secured, where trade and industrial questions are operative, when the whole population of a nation is engaged in those pursuits which pay best under the environment of the country. There is no imperative demand upon any people to possess a Carrying Trade, a Shipbuilding Industry, or a foreign Commerce. The carrying trade is an occupation of men who own or control ships, and differs from shipbuilding as carting does from wagon-building; looked at broadly, the two interests are hostile, because ship-owners wish to buy new vessels at low prices, to keep the competing vessels few in number, to maintain freights at the highest figures, and to buy cheap, good ships without regard to the nationality or locality of the builder. Foreign commerce is the exchange under varying conditions, the simpler the better, of the products of one country for those of another; merchants want plenty of competing ships, and low freights, and to them it is a matter of indifference by whom the vessels are built, owned or navigated. In other directions these interests are correlated, and each is of great value; but of all, commerce is the active principle, for lacking it, a country needs neither to own nor to build ships. Again, the carrying trade is an industry which, in itself, is neither more nor less desirable than any other, than shoemaking for instance; and it is engaged in only because, for equal expenditure of labor and capital, more profit is promised than by any other business. Nor does it follow, if a nation had a commerce, and certain of its citizens found the carrying trade to be an advantageous employment for their labor and capital as compared with other industries, that other of its citizens ought to engage in shipbuilding. Any person may have a whim for owning a ship built in his native country and be willing to pay for the gratification its possession affords; but if it costs him more to do this than to buy abroad, he has lost money “A fisherman,” as Professor Sumner quaintly puts it, “who has caught nothing sometimes buys a fish at a fancy price. He saves himself mortification and gets a dinner, but the possession of the fish does not prove that he has profitably employed his time or that he has had sport.”
Should a country own a foreign trade it would not necessarily be an object for it to do its own carrying, any more than it would be an object for a farmer to insist upon carting to market his own produce, when some person regularly employed in that business offered him a contract on better terms than his own. Quite as foolish would the man be who refused to carry on a carting business unless he could build his own wagons; and sunk in the deepest deeps is a nation which knows that certain of its citizens could buy and use carts so as to make a legitimate profit, and yet denies the privilege, because certain other equally as good citizens could not build similar carts at home for a profit.
Maritime success, or the possession of the elements which determine the fitness of a nation for marine enterprise, can no more be called a question of chance than can watch making; nor is there any uncertainty about the conditions which qualify a nation for eminence in navigation. It is subject to the same economic rules, and its genesis, development, and decay follow the same laws that underlie the evolution and growth of man. Certain impulses go to the establishment of these marine activities: if all exist, pre-eminence is assured; if some are wanting, there will be alternate periods of exaltation and of depression, and possibly of ultimate decadence; and if all or large numbers are absent, no outside aid, whether legislative or individual, can arrest the operations of the inevitable law. Trade may be forced, but all industries are nowhere less than contingent; and none of them can exist if certain natural conditions are lacking. Briefly generalized, the first impulse towards maritime enterprise arises out of life in a region which will not support its inhabitants by agriculture — “original poverty of soil or limited extent of territory almost arising to the heights of a necessary qualification “ (Hall). The born navigators of the world have always lived in little, half-barren countries, situated in the midst of fruitful regions; the almost invariable rule being that those who inhabited a rich soil never engaged in navigation until the population became so dense that agriculture would not afford sustenance to all. This was the case with the Carthaginians, the Greeks, the Latin races of Europe, the English, and among other people in America, the New Englanders. These last took to the sea because the shore did not furnish them with products which would remunerate their capital and labor equally as well; while on the other hand the people of the Southern States clung to the fruitful land, never fostered nor inherited a taste for the sea, and to-day do not own one-ninth of the ships under our flag.
Ocean fisheries affect the maritime fitness of a people by the training they give to sailors, and by their encouragement and exercise of those qualities which prepare mariners for the daring and difficult enterprises of their calling; in every age the fisheries have been the original temptations which induced men to go to sea, and the only nations that have been eminent in shipping have fished from the beginning.
It is an accepted law that an art-loving or an art-producing community does not display energy in commerce and industry; a roaming disposition, a love of adventure, a jealousy of participation in home affairs by foreigners, and a spirit of traffic and industry, invariably impel in the direction of maritime enterprise, and thus make it largely dependent upon the genius of a people.
It is only a region situated in the midst of great seas, and advantageously central, that can in the long run have the most ships and be supreme in commerce; this, which was so potent in the past, will have double significance in a future of general settlement of inhabitable lands. The flag of commercial enterprise shifts with centres of civilization and settlement; and of two nations competing for trade and navigation to a great market, that one in the end will secure the larger share which is the nearer or which has the better geographical position.
A great population and a large surplus of native commodities are essential to the permanency and greatness of a merchant marine. This does not preclude a certain trade being built up by small nations with a limited population and no commerce; for, as to-day in the North Countries, a people, forced from irresistible conditions to follow the sea might find it profitable to prosecute a carrying trade; but under a limiting environment such an industry would be rarely permanent and never great. The wants and energies of a large native population develop trade; and when the genius of a people is, as with most nations, one-sided—agricultural as opposed to manufacturing, for example—the laws of supply and demand, and the exigencies growing out of the ownership of a large surplus product, must ensure marine enterprise.
Abundant resources in material for ships; economy in ship construction and operation; capability of production for a definite sum less than rival nations; power, in the absence of this, of purchasing
where they are best and cheapest; a wise policy of government—these, and all of these, go to the making of the ideal commercial nation.
Do we then possess this fitness, this capacity for maritime success? So far as commerce affects, this country has a vital interest in the carrying trade, let theorists befog the cool air as they may; every dollar paid for freight imported or exported in American vessels accrues to American labor and capital, and the enterprise is as much a productive industry as the raising of wheat, the spinning of fibre or the smelting of ore. Had the acquired, the “full” trade of 1860 been maintained without increase, $80,000,000 would have been added in 1880 to the national wealth, and the gain from diverted shipbuilding would have swelled this sum to a total of $100,000,000. Our surplus products must find foreign markets; and to retain them, ships controlled by and employed in exclusively American interests are essential instrumentalities. Whatever tends to stimulate competition and to prevent combination benefits the producer; and as the prices abroad establish values here, the barter we obtain for the despised one-tenth of exports—$665,000,000 in 1880—determines the profit or loss of the remainder in the home market. Is it generally known, for instance, that a difference in cost of a single penny in laying down grain at Liverpool may decide whether this product shall be drawn from the United States or from the agricultural districts of Hungary and Southern Russia? During the last fiscal year 11,500,000 gross tons of grain, oil, cotton, tobacco, precious metals, etc., were exported from the United States, and this exportation increases at the rate of 1,500,000 tons annually; 3,800,000 tons of goods are imported, or in all about 15,000,000 tons constitute the existing commerce of this country. If only one-half of the business of carrying our enormous wealth of surplus products could be secured for American ships, our tonnage would be instantly doubled, and we would have a greater fleet engaged in a foreign trade, legitimately our own, than Great Britain has to-day (Hall). The United States makes to the ocean carrying-trade its most valuable contribution, no other nation giving to commerce so many bulky tons of commodities to be transported those long voyages which in every age have been so eagerly coveted by maritime peoples. If the larger proportion of this commerce consisted in articles of foreign growth and manufacture, it would not be strange to find foreign ships securing the larger share of the business; but of the 17,000 ships which enter and clear at American ports every year, 4600 seek a cargo empty, and but 2000 sail without obtaining it. Trade is largely governed by the social, industrial and economical conditions of the consumer. A careful study of the commercial relations of the British colonies of Australia, New Zealand and South Africa demonstrates that with them, notwithstanding the competition of the mother-country, there are splendid opportunities yet untried; last year the imports of the two former reached a total of $400,000,000, and their necessities demand the very articles we make most skillfully and supply most cheaply; and for return cargoes, Australia and the others have many things we want cheap and are forced to buy dear. In 1879 the former sent to England wool valued at $35,000,000, and in the next year we imported from England $23,760,000 of the same staple, obviously buying the Australian wool at second-hand for double freights and brokerages.
Ships are profitable abroad and can be made profitable here; and in truth, during the last thirty years no other branch of industry has made such progress as the carrying trade. To establish this there are four points of comparison—commerce, railways, shipping tonnage, and carrying power of the world—limited, for the sake of illustration, to the years between 1850 and 1880.
1850 1880 Increase
Commerce of all nations $4,280,000,000 $14,405,000,000 240 per cent
Railways—miles open $44,400 $222,000 398 per cent
Shipping tonnage $6,905,000 $18,720,000 171 per cent
Carrying tonnage $8,464,000 $34,280,000 304 per cent
In 1850, therefore, for every $5,000,000 of international commerce there were 54 miles of railway and a maritime carrying power of 9900 tons; and in 1880 the respective ratios had risen to 77 miles and 12,000 tons; this has saved one-fourth freight, and brought producer and consumers into such contact that we no longer hear “of the earth’s products being wasted, of wheat rotting in La Mancha, of wool being used to mend roads in Paraguay, and of sheep being burnt for fuel in making bricks in the Argentine Republic.” England has mainly profited by this enormous development, the shipping of the United Kingdom earning $300,000,000 yearly, and employing 200,000 seamen, whose industry is therefore equivalent to £300 per individual, as compared with £190 gained by each of the factory operatives. The freight earned by all flags for sea-borne merchandise is $500,000,000, or about 8 per cent, of the value transported. Hence the toll which all nations pay to England for the carrying trade is equal to 4 per cent, (nearly) of the exported values of the earth's products and manufactures; and pessimists who declare that ship-owners are losing money or making small profits must be wrong, for the merchant marine is expanding every year.
What then is our situation? We have been a great maritime nation, therefore we must have had some of the qualities essential to success; we have had a great commerce, a great shipbuilding interest, and a great carrying trade, hence our citizens must have found these industries profitable. The national genius for trade, adventure and enterprise has become intensified by the changes modern life demands; our fisheries are still profitable, whaling (owing to the petroleum production) alone excepted; every year our geographical position has improved, so that now we are the Great Middle Kingdom; our national resources in nearly every direction have quadrupled; our population, swelled last year by 600,000 emigrants, is so dense that our eastern coasts are overcrowded with people whose race requirements —sea-coast born or descended, as opposed to inland reared—demand a sea-environment; the carrying trade was never more profitable; our commerce has expanded so enormously that it is not only a question of profit but of serious necessity that we should manage it, from the growing of the blade to its freighting in every sea — and yet, with every impulse, every activity insisting that we should assume our place in the world, our Merchant Marine is in a state of decadence. Our people are not more profitably employed in other occupations, and therefore it must be in bad laws, apathy of government, or the lack of special resources that the causes will be discovered.
II. The first vessels built upon our shores were intended exclusively for the fisheries and the coasting trade, the pioneer merchants being contented with the quick returns and small profits of a commerce that was not controlled by exacting foreign governments. The vessels were necessarily small, and, though admirably fitted for their work, of the type struggling shipbuilders must perforce produce. As early as 1660 the fisheries off our coast had become so valuable that as many as six hundred sails were found upon the Banks during a season, and so great were the profits that the boats often paid for themselves in one voyage. Gaining confidence by successful rivalry in a trade which foreigners had aggrandized, the New England merchants extended their enterprises in other directions, and, before the Revolutionary War, they had built up a commerce which was substantially profitable not only on our own coast, but with Europe and the Spanish West Indies. The war naturally checked the growth of navigation; but, as a compensation, shipbuilding acquired so great an impetus from privateering, that when peace was established, there were nowhere more skilled or more intelligent ship designers and mechanics than our own. At this time our shipping could not have exceeded 100,000 tons, though, as the government had no control over the registry until after the adoption of the Constitution, no definite knowledge is attainable. Foreigners, however, still controlled the best part of our trade, for at that time “the prominent fact,” writes Hall, “was the preponderance of European bottoms in the foreign trade; in 1789 the registration was 123,893 tons; 68,607 in the coasting trade; 9062 in the fisheries; and there were still 100,000 tons of foreign shipping in the external commerce.” The active social, political and economic principle of each nation in those days was eminently not fair dealing to other people; and the accepted theory of trade among the stronger nations was the imposition of such burdens upon the weaker maritime countries that the latter were certain to be driven from all but home ports. The new United States suffered particularly by this policy; and upon her entrance in the race of the trading nations, asserted as cardinal principles growing out of her political aspirations, freedom of commerce and entire reciprocity of intercourse. Treaties were sought, but in vain, until 1782, when the Dutch, after four years of negotiation initiated by Franklin and consummated by John Adams, signed a convention which gave the ships of both nations exact reciprocity in the ports of each other. At the close of the Revolutionary War an attempt was made to enter into a similar treaty with England, but after a vexatious delay of several years, not only was the order rejected, put a policy more severe than that shown to any of the European governments was adopted towards the new Republic. In July, 1789, the first Congress under the Constitution passed the celebrated Navigation Act, which, coming as it did from a weak country, imperiling a shipping unprotected by an adequate naval force, excited in Europe a most profound astonishment. That its enactment in part was retaliatory of England's attitude was never doubted, and at first there were threats that boded ill for the kin across the sea; then came doubts, not of justice but of expedidiency, accentuated by the increasing appearances of American ships in foreign waters; and finally negotiations, controversies and treaties; these at first with England in 1794, then with Spain in 1795, and at last with France in 1800. Though the provisions of these treaties were not entirely satisfactory, yet they were movements in a right direction; and so much was commerce stimulated that in 1800 seven eighths of the freights was carried in American ships; the home trade with China was exclusively our own; and between 1798 and 1812, 200,000 tons of shipping beyond our needs were sold to foreigners. “Secure in the protection of our laws . . . our merchants entered upon the present century a class of prosperous men and full of confident anticipations for the future” (Hall). Shipping had increased in tonnage as follows:
Years. Registered for foreign trade Coasting trade Fisheries
1789 123,893 68,607 9,062
1795 529,470 164,795 34,102
1800 669,921 246,295 30,078
1805 749,341 301,366 58,363
England, unable outside of protocols to look upon us as anything but rebellious colonists, still subjected our ships to such annoying visits and impressed so many of our seamen that, in twelve years, our merchants suffered great losses by the detention and crippling of their vessels—no less than 6000 men having been forcibly taken from the decks under our flag. A further interference with our commerce resulted from the blockade of the coasts of France and of the Netherlands, and from the subsequent publication of the Berlin Decree and of the English Orders in Council of 1806, and from the Milan Decree of 1807; in consequence of these necessities of foreign war, over 1660 American ships were captured, and either condemned with their cargoes or subjected to great losses by trade interference, high insurances and delays; many of our vessels were forced to seek neutral harbors for protection, and were not only seized at sea, but were searched at the mouths of our own harbors. America protested in vain, and finally passed the Embargo Act. In May, 1810, France repealed the Berlin and Milan Decrees, but Great Britain refused either to desist from her obnoxious policy of search, or to remove the prohibitions which forbade our ships seeking markets on the free coasts of Western Europe. As a very natural result the war of 1812 followed; it cost the government $150,000,000; it destroyed on land and sea thousands of lives and millions of private property, and at its close left us nearly bankrupt. In 1810 our tonnage was 1,385,000, and on January 1, 1815, we had lost in five years enough to raise its gross amount to 1,828,000 tons,—an increase of less than 100,000 tons annually; in three years 2300 of the enemy's vessels were captured, “but our privateers destroyed many of these, and 750 were retaken, and we in turn lost 1407 of our own merchant vessels and fishing boats, so that the balance was slightly in our favor.” At last in 1815 England made a commercial treaty; and though poor in resources, yet strong with the instincts of a young and vigorous life, the nation entered the great race for maritime supremacy, fortified by the knowledge of its past, the justice of its present gained by blood and iron, and the hopes of its future pregnant with promise.
As a matter of policy, Congress, in 1817, substantially re-enacted the navigation laws of England; our coasting trade was prohibited to other nations; ships in the foreign trade, unless two-thirds manned by Americans, were taxed fifty cents a ton; and the great quadrangular trade of Great Britain to Brazil, the East Indies, United States and England, was cut off. At the same time a frank offer of general reciprocity was made in which America proposed to put commerce upon the high plane of fraternity among nations, and to leave all victories within that field of action to the intelligence and enterprise of the different peoples of the world. This was declined; and it was not until 1830, and after more difficulties with England and France, that we had direct trade and reciprocity with the principal commercial nations. From the peace of 1815 our commerce expanded in an extraordinary manner, increasing in money from $270,000,000 in that year to $480,000,000 in 1836; the annual travel and immigration rose from 20,000 to 75,000; and fifteen years later, in 1850, the ocean traffic of the United States gave employment to 2,335,000 tons of shipping—the total tonnage entering and clearing from our ports being 8,000,000. Nothing could supply more absolute proof of our fitness for the demands that a maritime industry imposes than this victory over forces and circumstances, which in every disguise and under every opposing condition met us at each forward essay. Beginning at the end of the line, without a helping hand or an encouraging voice; against obstacles that seemed insuperable; in war; during a neutrality that was worse than actual belligerency; when harassed and fettered by cruel foreign impositions and discriminations, and impeded by the mistaken views of internal factions—yet, at the last, breasting the waves that were unbroken by rival keels, if not at the very head, yet missing it by so slight a degree that our co-equality was recognized—surely never before since the world began was there such a record, never such testimony to the genius and instincts of a people. A widening field of commerce, followed by equality of competition, aided us; the assertion of fair trading and of equal rights, emphasized by the splendid services of our navy, gave us a further claim to be heard our mariners were the best in the world, and our ships, notwithstanding the higher wages paid, were navigated the most economically; our packet lines to Europe crossed in an average of less than twenty days, and American buyers could insure their goods in this country under the stipulation they should come in certain American ships the British whale fisheries were extinct, while ours employed over 700 ships and 17,000 seamen; in thirty years this country built 3,900,000 tons of shipping; all the mails and passengers and a large majority of the immigrants were transported under our flag; three-fourths of the cotton was exported in the same way, and best of all, the policy of the government was so aggressive that our flag was respected everywhere, and in certain trades, even under unequal conditions, had the preference over all competitors.
But from this period dates our decadence.
The maximum tonnage of this country at any time registered in the foreign trade was in 1861, and then amounted to 5,539,813 tons; Great Britain in the same year owning 5,895,369 tons, and all the other nations 5,800,767 tons. Between 1855 and 1860 over 1,300,000 American tons in excess of the country's needs were employed by foreigners in trades with which we had no legitimate connection save as carriers. In 1851 our registered steamships had grown from the 16,000 tons of 1848 to 63,920 tons—an amount almost equal to the 65,920 tons of England; and in 1855 this had increased to 115,000 tons and reached a maximum, for in 1862 we had 1000 tons less. In 1855 we built 388 vessels, in 1856 306 vessels, and in 1880 26 vessels—all for the foreign trade. The total tonnage which entered our ports in 1856 from abroad amounted to 4,464,038, of which American built ships constituted 3,194.375 tons, and all others but 1,259,762 tons. In 1880 there entered from abroad 15,240,534 tons, of which 3,128,374 tons were American, and 12,112,000 were foreign—that is, in a ratio of 75 to 25, or actually 65,901 tons less than when we were twenty-four years younger as a nation. This decadence did not originate in the war between the States, but dates from 1856, when it was detected in the decrease of sales to foreigners—65,000 tons having been transferred in 1855, 42,000 in 1856, 26,000 in 1858,and 17,000 in i860. In 1879 we built 43,000 tons of registered vessels, but at the same time we relinquished 148,000. tons; this loss of 105,000 tons being distributed in 37,000 tons sold to foreigners (old vessels), 24,000 tons abandoned, and 87,000 tons lost. The grain fleet, sailing in 1880 from the port of New York, numbered 2897 vessels, of which 1822 were sailing vessels carrying 59,822,033 bushels, and 1075 were steamers laden with 42,426,533 bushels, and among all these there were 74 American sailing vessels and not one American steamer.
In 1856 the total exports and imports were $641,604,850, and in 1880 $1,613,770,663. In the first named year there were carried in ships built, owned, manned and commanded by Americans $482,268,274, and by foreigners $153,336,516; in 1880 Americans transported $280,005,497, and foreigners $1,309,466,596; the percentage of our carrying in our own trade was in 1856, 75,2; and in 1880, 17.4.
In the general trade of the world our record is as lamentable. “At the beginning of the 19th century,” writes Yeats, “the commerce of the world seemed passing into American hands, their shipping having increased five-fold in twenty years.” “Their decline,” continues Mulhall, “in recent years is unparalleled, as appears from the aliquot carrying power belonging to various flags.
Country. 1850. 1870. 1880.
Great Britain, 41 44 49
United States, 15 8 6
France, 8 8 7
Other flags, 36 40 38
“In size of ships America has now reached the mean attained by England in 1870, the average tonnage of all sea-going vessels afloat being in 1880 177 tons, or an increase in ten years of 36 per cent, in medium tonnage.” Our relative position is shown exactly in the following table:
Country 1870 1880 Increase—tons
British 549 748 199
French 210 320 110
German 220 250 30
American 405 560 155
Norwegian 143 190 47
Italian 135 156 21
While this poison of decay has been eating into our vitals, the possibilities of the country in nearly every other industry have reached a plane of development beyond the dreams of the most enthusiastic theorizers; we have spread out in every direction, and the promise of the future beggars imaginations attuned even to the key of our present and past development.
Population 12,000,000 50,000,000
Railways 23 miles 8000 miles
Cotton 976,000 bales 5,500,000 bales
Telegraphs none 100,000 miles
Post offices 8000 40,000
Wheat 84,000,000 bushels 460,000,000 bushels
Wool 35,000,000 pounds 225,000,000 pounds
Cotton spindles 2,000,000 10,000,000
We have a timber area of 560,000,000 acres, and across our Canadian border there are 900,000,000 more acres; and in coal and iron production we are approaching the old world.
Coal Great Britain 35,000,000 tons 135,000,000 tons
United States 2,000,000 tons 60,000,000 tons
Iron Great Britain 2,250,000 tons 6,300,000 tons
United States 564,000 tons 2,742,000 tons
During these thirty-seven years the relative increase has been in coal from 300 to 2900 per cent.; in iron from 200 to 400 per cent., and all in our favor. But this is not enough, for England, with a coal area less than that of either Pennsylvania or Kentucky, has coaling stations in every part of the world, and our steamers can not reach our Pacific ports without the consent of the English producers; even if electricity should take the place of steam, it must be many years before the coal demand will cease; and to-day, of the thirty-six millions of tons of coal required by the steamers of the world, three fourths of it is obtained from Great Britain.
It is unnecessary to wire-draw statistics, but it may, as a last word, be interesting to show, with all our development, the nationality and increase of tonnage entering our ports since 1856.
Country. Increase. Decrease.
Norway and Sweden, 1,214,008
United States, 65,901
“This,” writes Lindsay, “is surely no decadence, but defeat in a far nobler conflict than in the wars for maritime supremacy between Rome and Carthage, consisting as it did in the struggle between the genius, scientific skill and industry of the people of two great nations.”
III. Publicists differ both as to the causes and the remedies. In 1865 the first were oracularly referred to the war between the States; but in modern times the effects of war are generally less potent when the exciting cause is removed, and with us nearly every other industry has quadrupled. At the close of the Crimean war Russian commerce was said to have been destroyed, but with a favoring environment in the four years subsequent to the peace, the damage was so repaired that in i860 48 per cent, more Russian ships entered English ports than ever before. In 1868 doctrinaires declared that the fluctuation of the currency was the destroying factor, but it is of record that our shipping declined more after the resumption of specie payments than in the years when the fluctuations were greatest. Next followed the assertion that with the revival of general prosperity so many avenues were opened to profitable investment that no room was left for placing money in the carrying trade; but money has become cheaper year by year, until now, with our shipping at low-water mark, the rate is but 4 per cent., and for government bonds (excepting the consols of 1907) practically lower. None of these is a fair reason, and as a matter of history the first actual decline dates from before the war, in a time of fair interest and no debts and when money was stable. Some writers find it in various fanciful reasons, and there are not wanting others who discover the real causes to exist in British gold, aided and abetted by an unholy trinity of American venality, a hireling press, and a great foreign insurance combination. But it requires little research to learn that the decadence must be ascribed to one or more of the following causes: 1. Substitution of steam for sails; 2. Use of iron instead of wood in shipbuilding; 3. Non-subsidizing of American, lines; 4. Navigation Laws; and 5. Special Government and State restrictions.
In this country steam was first applied to the navigation of rivers, and in 1847 the steam -tonnage of the Mississippi Valley alone exceeded that of the whole British Empire; indeed, so great are the demands of our inland navigation that to-day it is claimed our total domestic steam-tonnage does exceed that of England. By 1840 serviceable lines of boats were plying between the principal commercial cities of the Atlantic seaboard, and between 1845 and 1851 American steamers were crossing the Atlantic ocean. In 1858 we had in all 52 steamers of 71,000 tons in the foreign and domestic trades, England at the same time owning 156 vessels of 210,000 tons burden, and the rest of Europe 130 of 150,000 tons. But in that year American competition broke down; and while we were left with only seven steam vessels in the foreign trade, England had 120 plying to the extremities of the earth. To-day foreigners have over two hundred steamers in the direct trade with the United States, while our country has less than fifteen steamers running across the Atlantic and Pacific oceans.
Shipping can not be measured merely by gross tonnage, for steamers, as determined by Leroy-Beaulieu, multiply the carrying power five-fold. They are cheaper than sailing vessels, as the birthrate, death-rate and increase—”the vital statistics”—demonstrate. The ordinary life of a ship, allowing for extraordinary contingencies, is, in the United Slates 18 years; in France 20; in Holland 25; in Germany 25; in Great Britain 26; in Italy 28, and in Norway 30. The annual average of wrecks for the seven years ending 1879 is as follows:
Country. Steamers. Sailing Vessels.
British, 2.94 per cent. 3.93
French, 2.47 4.04
United States, 4.06 5.45
Dutch, 3.84 4.49
German, 2.77 4.04
Italian, 1.74 2.94
Scandinavian, 1.96 3.20
Assuming three voyages yearly for a sailing ship and fifteen for a steamer, it appears that the former is lost once in 72 voyages and the latter once in 490; so that steamers have only one-seventh of the risk of sailing vessels. The death-rate of the world's shipping is 4 per cent., or 750,000 nominal tons; and the birth-rate is 5 per cent, the average of new vessels built being 950,000 tons ; but even this does not give a correct idea, since the substitution of steamers for sailing vessels augments the carrying power 4 per cent. The vessels lost or broken represent 1,200,000 tons a year; and those built attain nearly double that number, as appears from Kaier's returns of the average since 1872, viz.:
Shipbuilding. Annual Average.
Dock yards Steamers, tons. Sailing vessels. Carrying power.
British 292,000 167,000 1,630,000
United States 15,000 118,000 193,000
Italy, Canada 35,000 324,000 499,000
The efficiency of seamen measured by the number of tons they carry yearly will be found to have some relation to the quantity of merchandise borne by steamers, viz.:
Flag Seamen Tons carried Per seaman Steam ratio
British 141,440 61,100,000 436 76 per cent
French 29,220 8,100,000 271 63 per cent
German 39,980 5,700,000 141 54 per cent
Italian 52,000 4,300,000 83 25 per cent
Various 446,000 38,000,000 85 41 per cent
Total 708,640 117,200,000 165 61 per cent
Ten years ago the average of tons carried by each British seaman was no more than 278, so that two men in 1880 do the work of three men in 1870; and further, ships are not sent to sea shorthanded, as this might indicate, for the efficiency of the seaman has been indisputably increased; and the sea mortality of 3 ½ per 1000 proves how much sanitary progress has gone hand-in-hand with the new conditions that demand superior intelligence. Some ship-owners claim that owing to this very efficiency the carrying trade is overdone, and that the world could satisfy its commercial demands with fewer vessels; and though it is true that the ballast entries in Great Britain and the Continent have risen from 17 ½ and 21 ¼ per cent, in 1870 to 19 ½ and 22 ¼ per cent, respectively in 1880, still the building and employment of new ships disprove this statement. Tonnage movement, therefore, gives a better idea of national wealth than tonnage possession, for the tendency of trade is to transact business with that minimum of profit and that maximum of volume which render capacity and speed development essential. Twenty years since a vessel of 3000 tons on a voyage of given length had to allow 2200 tons for coal and machinery; but compound engines and structural and propulsion improvements have so reversed this that now but 800 space-tons are needed for motive power, and 2200 may be devoted to freight and passengers. In 1879 Great Britain built five steamers to one sailing vessel; and though a fair proportion of the world's commerce is still carried in sailing vessels, these figures seem to prove that except for very long voyages with bulky freights their days are numbered.
But even in sailing vessels iron ships are superseding wooden, and during the last five years, while we built 101,823 tons almost entirely for domestic trade, En-gland put afloat 1,800,193 tons; and to-day still further complicates the problem by proposing the substitution of steel for iron.
In every important respect iron ships are more desirable than wooden: 1. They secure a higher classification and for a longer term of years; 2. They are maintained at less expense; 3. They carry more cargo on equal tonnage and obtain higher rates of freight; 4. They command the preference at the enhanced rates; 5. They are insured on better terms; and, 6. They are less liable to cause damage to cargoes
All parties will accept these as primary causes of the decay of our shipping, the practical influences of both being coeval with the evolution of new theories of commerce; but beyond these points of agreement there are two radical and embittered differences of belief, one pinning its faith to the dogma of free ships, and the other looking towards the Mecca of subsidies.
IV. The protection or subsidizing of the American foreign trade is not a new idea in our experiments with political economy, the first appropriation dating from 1845, when $1,274,600 were equitably, divided between several lines of steamers; under varying conditions and with increasing demands these bounties were continued until 1855, and then ceased, not to appear until 1865, when Congress subsidized Garrison's Line to Brazil, and, later, the Pacific Mail and Roach's Brazil Line. To develop commerce for the ships we could build was offered as the apology for the subventions in the earlier period; to foster shipbuilding as the most important element of commerce revival is claimed as their raison d’être in the later. But herein lies a fallacy; for while shipbuilding is of the navigation interests, it is not its rounded summation: commerce, carrying trade, postal service, and the maintenance of a school for maritime defense, being, if not superior, at least not subordinate. The profit of a ship in twenty years' cargo-carrying is fifteen times greater than her first cost, and, low as is our commerce to-day, more wages are distributed to sailors in a single week than all the shipbuilders pay their operatives in an entire year; hence, it is a curious study in political economy to find an illogical conclusion result in national interests being sacrificed to the policy of a few shipbuilders, and to see a great country rejecting a greater profit for a lesser because both cannot be obtained. “There is a familiar doctrine found in the Constitution of the United States and in the Constitution of every State,” said Mr. Bayard in the Senate of last year, “which is the necessary outgrowth of the institution of government itself. It is that the interest of the individual or few must give way to that of society at large. But where is the proposition, and where in any civilized government called free can you find the doctrine recognized, that public property may be taken for private use?” It is undeniable that under whatever form subsidies appear they tax the many for the few, and can be met only by new burdens upon the producer and consumer for the benefit of a privileged distributing agent; this protection means that the greater number of American ship-owners must compete not only with foreign and home rivals, but with their own more favored countrymen who sit above the salt and receive exceptional favors from the Government; nay, more, it results in the nation itself entering into competition with the great body of ship-owners and shipbuilders, whose contributions to the revenues are turned against themselves. When Congress compensates steamship lines for running at a loss, or pays the difference between the cost of running and what the owners consider a fair profit on their investment, the subsidized lines alone are profited, and the unprotected but restricted ships succumb in the unequal conflict. In nearly every case protected lines in the past have been beaten by unsubsidized but unrestricted foreign steamers; when the bounties ceased the lines stopped running, and while freights were not made cheaper, the results were to make the protected owners richer by the subsidy, to ruin the unprotected shipper, and to develop no foreign trade. During the ten years covered by Garrison's operations the value of our imports from Brazil doubled, and our exports increased but one-eighth, and for this solution of the economic question we paid $1,500,000.
“Whenever the question of ships is raised, the clamor for subsidies and bounties is renewed, and we are told again that England has established her commerce by subsidies…Some of our writers and speakers seem to be under a fascination which impels them to accept as authoritative examples the follies of English history, and to reject its sound lessons. In the present case, however, the matter stands somewhat differently. England is a great manufacturing town. It imports food and raw materials and exports finished products. It has therefore a general and public interest in maintaining communication with all parts of the world .... Subsidies to ships for the mere sake of having ships or ocean traffic, when there was no business occasion for the subsidized lines, would have no analogy with English subsidies “ (Sumner). Yet the example of Great Britain is invariably hailed as the clear, effulgent light whereby we may guide our stumbling footsteps, and we are asked to subscribe a few millions that we may replace England as a successful wooer for the commerce of the world. But even if our national conditions were as alike as they are dissimilar, an addition of 100,000 tons to our ocean tonnage, supported by a bonus of $3,500,000, would be only 5 per cent, of the steam fleet of Great Britain, and its total earnings would be but 2 ½ per cent, of the freight money she bids us stand and deliver on the high seas. England is a country whose greatness is in the dependencies that punctuate the page of the world; 200,000,000 of her people demand postal communications in colonies separated by leagues of sea, and her sea-concessions are analogous to what we have done in railroad grants and mail-routes within our undivided territory. Of the £783,ooo voted last year, more than one-half went for mail purposes, and not a guinea was tabooed to ships surveying mankind with commercial view, or built in any country from China to Peru; some of this bounty has gone to foreign ships under foreign flags, and her object has been, not to make Englishmen buy or build ships, but to force the colonies to recognize their indebtedness to the mother-country. France exports a good share of her manufactured goods in English-built ships, and Italy must necessarily do the same, as she has few others. Hence it seems certain, that for whatever reasons of policy and by whatever country this money is given, it is under no limitations to home-built ships or to foster home shipbuilding.
Our coasting trade, which includes the rivers and great lakes, now comprises about 19,000 vessels and 2200 barges, employing 70,000 men, and the competition is so great that the charges for transportation have been reduced to a point never before known. Hence no one prominently identified with this question seeks to alter in the least the conditions of this enormous industry. It is true that there are a few dissatisfied writers who demand entire and immediate freedom for ships and tariff, but the great majority of free-ship advocates do not seek such extreme measures of relief; they do not wish, for instance, to interfere with this domestic trade, believing that its monopoly of 60 per cent, of the whole shipbuilding, and the restrictions in size of the vessels to be bought in open market (nothing under 3000 tons for foreign trade), ought, with the revenues accruing from repairs, to double the income of shipbuilders, who will be carrying to a full development a reviving industry. For years these shipbuilders have been protected, and each year fewer ships are built; subsidies have been tried, but commerce still languishes; the echoes of a world treating- the great problem of supply and demand upon new principles have been heard and are unheeded; and therefore is it that many men believe that a remedy exists, first, In the repeal of the navigation laws, and, secondly, in the removal of those other restrictions which have helped to throttle the fairest promise of modern days.
These navigation laws, so often quoted and so little understood that few of the laity can distinguish accurately between enrollment and register, and the best legal talent has been at fault in correctly defining the proper way of transferring the license of a pleasure-yacht from one collection district of the United States to another, can be found under title 48 of the Revised Statutes, Regulations of Commerce, chapters one to nine, and in various scattered sections of the law and of the Treasury Regulations. After our establishment as a nation, the questions of Slavery, Trade, and States Rights were the great sectional issues, and our Constitution and the earliest statute laws were, to a large extent, the result of compromises between these antagonistic ideas; indeed, that admired clause which provides no religious test shall ever be required as a qualification for office, as well as the first amendment, which forbids the establishment of religion or the prohibition of its free exercise, were merely parts of a general political necessity, restricting the functions of the federal government, and leaving to the several States as much of their separate sovereignty as was consistent with the existence of the Union. A larger belief in the rights of conscience did not engender this liberality, and the reasons of policy which forbade the federal government to meddle with slavery applied with tenfold power to questions of religion. So with the navigation laws, for they originated in a compromise between the slave-supplying and the slave-holding sections of the country; and the power to regulate commerce was inserted with, and, as a consideration for the extension, by New England votes, of the slave-trade until 1808, and for the prohibition of export duties. Though the Middle States and Virginia and Maryland protested against the infamous bargain, New England demanded from the first Federal Congress assembled under the Constitution her share of the disreputable compact; and thus, conceived in iniquity and reared in sin, the present navigation laws have cursed our generations with more than Biblical prophecy. It is but fair to add that their final enactment was in some degree retaliatory upon the illiberal policy which England pursued for the destruction of our trade with the West Indies; our triumph galled the British jade, and wincing, she did not look placidly upon our unwrung withers, though Pitt, with a small following, did attempt to liberalize trade upon the high seas. Protesting against concessions, Lord Sheffield, who, among others, was in 1783 blatant in two penny opposition, advised the government to deal gently with the erring corsairs of Barbary, as the operations of these discriminating cut-throats would be confined mainly to the destruction of the commerce of America and that of the weaker Italian states. Others preached a fine philanthropy, publicly entreating the British lion and the American lamb to lie down together in peace, and privately praying that the lamb might be inside of the lion.
Somewhat curtailed, the navigation laws may be summarized as follows: No American is allowed to import a foreign-built vessel in the sense of purchasing, acquiring a registry, or using her as his property; the only other imports, equally and forcibly prohibited, being counterfeit money and obscene goods. An American vessel ceases to be such if owned in the smallest degree by a naturalized citizen, who may, after acquiring the purchase, reside for more than one year in his native country, or for more than two years in any other foreign state. An American ship owned in part or in full by an American citizen, who, without the expectation of relinquishing his citizenship, resides in any foreign country except as United States Consul, or as agent or partner in an exclusively American mercantile house, loses its register and its right to protection. A citizen obtaining, a register for an American vessel must make oath that no foreigner is directly or indirectly interested in the profits thereof, whether as commander, officer, or owner. Foreign capital may build our railroads, work our mines, insure our property, and buy our bonds, but a single dollar invested in American ships so taints as to render it unworthy of the benefit of our laws. No foreign-built vessel can enter our ports and then sail to another domestic port with any new cargo, or any part of her original cargo, that has once been unladen previously, without touching at some port of some foreign country, under penalty of confiscation. This law is construed to include all direct traffic between the Atlantic and Pacific ports of the United States via Cape Horn, the Cape of Good Mope, or the Isthmus of Panama; and being a coasting trade, foreigners cannot compete. An American vessel once sold or transferred to a foreigner, can never again become American property, even if the transaction has been the result of capture and condemnation by a foreign power in time of war. Vessels under 30 tons cannot be used to import anything at any seaboard town. Cargoes from the eastward of the Cape of Good Hope are subject to a duty of 10 per cent, in addition to the direct importation duties. American vessels repaired in foreign ports must pay a duty on the repairs equal to one-half the cost of the foreign work or material, or pay 50 per cent, ad valorem, the master or owner making entry of such repairs as imports. This liberal provision, which dates from 1866, is made to include boats obtained at sea, from a passing foreign vessel, in order to assure the safety of our own seamen. No part of the proper equipment of a foreign vessel is liable to duty, except it be considered redundant; thus when two sets of chains were found upon such a vessel, one was made chargeable with duty. Foreign vessels arriving here in distress, with loss of equipment, must pay duties on the articles imported for repair; if they need sheathing, 45 per cent, is exacted for the new copper used, and 4 per cent, for the old copper removed. In one case a foreign vessel left her mooring chains of foreign manufacture on an American wharf, and with great alacrity duties were immediately and lawfully collected on them as importations. If a citizen buys a vessel of foreign build stranded on our coast, takes her into port, repairs and renders her serviceable, she cannot become American property unless the repairs amount to 75 per cent, of the whole value of the vessel. Except in the fisheries, all our vessels engaged in foreign trade must pay annually a tax of 30 cents a ton; a ship of 1000 tons, for instance, contributing $300, which represents the profit and interest of $5000 at 6 per cent. Vessels belonging to foreign states having commercial treaties with us pay the same tonnage dues; but if an alien becomes an owner, even to a fractional amount, in an American ship, not only does the latter lose her registry, but the foreign privilege is void, and the joint ownership is charged with a tax of sixty cents a ton. If a picnic party comes into an American port in a foreign vessel—on the great lakes, for example, in a Canadian steamboat—such vessel becomes liable to a tonnage tax. Though the act of 1872 made free all material necessary for the construction of ships in this country for foreign trade, such vessels cannot engage in domestic trade for more than two months in any one year without payment of the duties, for which a rebate was allowed. Canal-boats crossing the Hudson river, or any other navigable stream, are making a coasting voyage, and must be enrolled and licensed as coasters; in default of such precautions they have been seized, and released only after much delay and upon the payment of a fine. A foreign private yacht, touching at different parts of our lake or sea-coast, and carrying passengers—members of other hospitable clubs— can be punished for violating the laws of domestic trade.
Such, briefly sketched, are some of the laws under which a free people live, and for their repeal the historic bill, No. 724, was introduced by Senator Beck on the 27th of January, 1880. Stripped of its official verbiage, this proposed measure enacts that certain provisions of the statute law be repealed, and that hereafter it shall be lawful for our citizens to purchase ships built in whole or in part in any foreign country, and to have them registered as, and accorded the privileges of, ships built wholly within the United States and owned and controlled by our citizens. It being a debatable question whether the full measure of relief could be proposed anywhere save in the House, under its power to originate money or revenue bills, all provisions relative to tonnage dues, local taxation, bonded ship stores, and free material for construction and repair, were purposely omitted.
Other evil agencies are at work, and the repeal of such of the laws as apply to foreign trade is only the first step; prominent among these are consular fees, compulsory pilotage, state and local taxation, personal liability, determination of tonnage capacity, shipping, discharge and transportation of sailors, and protective duties upon shipbuilding materials. The limits of this argument forbid any but the following brief hints: For the year ending June, 1880, the Treasury received, mainly from American ships, 1592,161; these fees, the interest of $10,000,000, being established that the consular service may be self-supporting, and not, as in England, maintained by the nation. Pilotage to New York is more than double that to Liverpool, and with a thorough appreciation of the energy, skill and sacrifices of our pilots, it seems somewhere wrong that the Sandy Hook service, composed of one hundred and thirty-three New York and fifty-eight New Jersey members, should have received last year between $800,000 and $1,000,000, or a mean average of over $5000. If compulsory pilotage be necessary—and this just men deny—how can the smaller merchant thrive under a system which makes it as expensive to bring a vessel into our harbors as it does to pay her captain for a round voyage to the West Indian ports? In this country ships are assessed as personal property, in New York at a 60 per cent, valuation. The annual profits of a steamship costing $500,000 may be assumed to be $25,000, and her taxes in New York, at a 2 ½ per cent, rate on $300,000, will amount to $7500, or 30 per cent, of the average profit; in England the income of the ship alone being taxed, about $500 will satisfy the government's demands, and the ownership of a vessel that is idle or unprofitable does not entail the burdens which must weigh upon vessels assessed and taxed under the same conditions as real estate. According to the British mercantile rule, the tonnage capacity of vessels is measured only on cargo space, allowance being made for quarters and machinery; with us the space occupied by the galley and closets is alone excepted, and as a consequence our ships suffer, not only at home, but in ports where harbor duties and light-money are levied. Sailors discharged in foreign ports receive three months' pay regardless of character or of the fact that most of them are foreigners, many of them beach-combers, who double their wages by such tricks, and that all of them are at home in any part of the world.
Thirty-odd years ago the commerce of the world was carried in sailing vessels, and it was no idle boast when Americans claimed that England was lagging in the great ocean race, because of our superior build and management of vessels. In many important trades our magnificent clippers were the favorite ships, and the great commercial interests of England became so involved from the want of like vessels that remedial measures became necessary. But England was shackled by navigation laws, the first dating from 1380, and, strangely enough, offering as a panacea for existing evils “that no subject of the king should ship any merchandise, outward or homeward, save in a ship of the king's allegiance, on a penalty of forfeiture of vessel and cargo.” Since Cromwell's time offensive prohibitions, not unlike our own, had existed on her statute books, broadening down from age to age by that precedent so dear to the English heart; and in 1849, when the reform was finally debated, such men as Disraeli, Brougham, and Bentinck declared that free trade in shipping would ruin ship-owners, drive the British sailor into prospering Yankee ships, and destroy the shipbuilding interests of Great Britain. Brougham, skilled in brilliant misinformation, avowed that the navigation law was not only the corner-stone of England's glory, but the foundation of her very existence; and Mr. Disraeli closed his protest against the expected arrival of the same old New Zealander by airily promising that “he would not sing Rule Britannia for fear of distressing Mr. Cobden, but he did not think the House would desire Yankee Doodle.” Ship-owners sold their vessels at ruinous rates, forswore the sea, and implored Parliament to save them; but in vain the protests and petitions, for the intelligence of the country was aroused on behalf of its pocket, and by a good majority the cause of progress triumphed. Thirty years since England was more free than this country is to-day, and when, in 1856, the restrictions upon her coasting trade were removed, she was in a position that our most enthusiastic free-ship men do not hope for in the lustrums yet to be. England's new policy paid, for from 1840 to 1879 her tonnage movement, that is, the entrances and clearances of English ports, grew from 6,490,485 tons to 30,943,506 tons, or an increase of 476 per cent.
All other nations have the power of buying ships for foreign trade in the cheapest market, and the effort to protect our shipbuilders by the denial of this right forbids the return of commercial prosperity. In the coast trade, foreign interference can be excluded, but upon the high seas our rivals cannot be taxed; we labor under the disadvantages of traditionally higher wages and better rations; but the same skill which enabled us up to 1860, with well fed, well paid and more intelligent crews, to overcome these difficulties, will not desert us now. By treaty we grant to Germans trading in ships of any build every right allowed our citizens in American built ships. Norway and Sweden, under commercial treaties, claim every privilege conceded to the Germans; and as France and England are granted by law all concessions yielded to the most favored nations, we have practically given the maritime peoples the power to compete freely with free ships for a trade we deny our merchants. Under this dispensation our seaboard cities have become stations where foreigners may loot our producers; we survey, buoy and police our harbors mainly for foreign guests; and our grand lighthouse system holds out to burn so that these sinners against our greatness may return, unregenerated, unrepentant, and voracious for more of our material advantages. This is an agricultural country, nine-tenths of our products for export being no further advanced in manufacture than hogs idealized into pork, and wheat transmuted into flour, which, being as perishable as they are beautiful, must go abroad. To the monopolists, free ships or ships protected mean nothing; but to the farmer, transportation reads profit or loss, life or death almost. Millions are annually appropriated for railways, canals, river and harbor improvements, simply to move crops which, arriving at the seaboard, find a lame and impotent conclusion in foreign ships, ruled by a combination of home railways and alien ship-owners and insurance companies. As a rule, competition eastward keeps down the price, but a syndicate of railroad men, charitably excited by our necessities, can tax the country millions of dollars by increasing freights a few cents a bushel on wheat and a dollar a ton on other articles, which find at the home ports, not three thousand ship-captains bidding for cargoes, but a secret agreement like that of 1873, when the great transatlantic lines pooled and bled the country of millions.
Free ships foster American interests, while the other policy develops, and will develop, the material greatness of other countries. There is no injustice of indiscrimination in subjecting to a high rate of duties commodities imported separately while allowing the vessels composed of these articles to be imported free, for the former are thrown upon a protected market where the burden can be distributed, and the latter compete in open market with ships that are unrestricted. We will not buy the condemned ships of England, and it is fair to suppose that the same judgment in the employment of a means to an end will be exerted here as in any other path where every justly balanced and economic element must be considered.
This great national question bears a special meaning to the service, for no law is better defined than the correlation and interdependence of the mercantile and naval marines. Honest men differ honestly as to causes and to remedies, and the way is not always clear; but fairly considered it seems that in the generalization of free ships lies the answer to the great economic enigma; its literature is open to all, and the examples of our past and the past of other nations are of history. Superiority in the carrying trade is not due to the facility with which steamers can be built, nor to any one of a half-dozen different elements; the books of the shipbuilders of the Tyne and the Clyde show that they build vessels as readily for other nations as for their own; and in explaining this, an English writer declares that if the Americans had ten years ago repealed their suicidal Navigation Law, and bought or built a steamer for every British steamer built on the Clyde, they would to-day be in some position to compete with England in the carrying trade, instead of having to deplore their present state of destitution. “The effects produced by changes in the conditions of an industry are inevitable, and cannot be avoided by legislation; the only solution that gives, is to cause the loss to fall on some other set of people instead of on those directly interested. Again: it is evident that a country needing a protective tariff on iron and steel cannot expect to supply ships for ocean traffic at the low price of competing constructors in countries of no tariff. For the country which by hypothesis needs a protective tariff on iron and steel cannot produce these articles as cheaply as some other country. Its ships, however, must compete upon the ocean with those of the country which has cheap iron and steel. The former embody a larger capital than the latter, and they must be driven from the ocean. If then subsidies are given to protect the carrying trade when prosecuted in ships built of protected iron, the loss is transferred from the ship-owners to the people who pay taxes on shore. These taxes, however, add to the cost of production of all things produced in the country, and thereby lessen the power of the country to compete in foreign commerce. This lessens the amount of goods to be carried both out and in, lowers freights, throws ships out of use, checks the building of ships, and the whole series of legislative aids and encouragements must be begun over again with a repetition and intensification of the same results” (Prof. Sumner).
The men who ask for free ships are not the reckless theorizers their adversaries claim, and what they ask can be best exhibited in the particularized items, submitted in a late memorial to Congress:
1. The admission to American register of all ships over 3000 tons, subject to the same laws regarding ownership that now prevail.
2. The admission of all materials to be used in construction and repair of vessels of over 3000 tons duty free.
3. The adoption of new tonnage measurements, based on actual carrying capacity and excluding the space occupied by engines and boilers and accommodations for officers and crew.
4. Exemption from taxation, local and national, on all vessels engaged in the foreign trade for more than eight months of the year.
5. Permission for all American vessels in the foreign trade to take their stores and ship-chandlery out of bond duty free.
6. A general revision of the laws relating to seamen and to the consular service.
As already shown, the advocates of both the great theories of relief accept all these conditions, save the first and second, as absolutely necessary for the regeneration of our merchant marine; nay, many go so far as to find the second so little a matter of dispute that the adverse views may be said to separate only upon the first. Taken generally, the demands as formulated are moderate, and fairly represent the juste milieu, the golden mean, that has been attained by concession through the belief that anything more radical would not, under our governmental theory of taxation and with the existing conditions of the industries themselves, be justifiable. By the proposed remedies an American is enabled to buy his ship in the best and cheapest market, and to place it under the protection of a flag that is in little danger of war from outside complications. At the same time, under the restrictions of ownership, no foreign power, Great Britain for example, whose safety-valve and temper-check are in her carrying trade, would be able in war to place her navigation interests under our protection without relinquishing ownership; and alarmists may therefore be certain that she will not be able to resort to the well-known process of whitewashing— a system of bills of sale with counter-mortgages—while holding fast to our legitimate opportunities.
What is more, both by original constructions and repairs, shipbuilding would, under the liberal plan proposed, be stimulated, and not only would the corps of skilled workmen be retained, but private shops filled with eager apprentices must, of the necessities of the case, spring up wherever coal and iron and deep water-fronts made shipbuilding feasible.
V. Other remedies have been suggested, and they run the gamut of theory, from the wildest license of Free Trade to the grimmest asceticism of Protection. These admit only of the briefest notice. One is a change of policy with respect to international trade, a revival of the law of 1817 which forbade any ship to bring a cargo to the United States except from the ports of the country to which it belonged. This policy might result in profit with South America and Asia, for those countries own few ships trading to the United States, and we have commerce with them; but England and the other maritime nations would doubtless respond by a like enactment, and deprive our ships of nearly all the general trade we have outside our own country. As this is a simple question of what will pay best, this proposed relapse into the practices of barbarism need not be considered here; neither would it be germane to call it, in this age of private enterprise, the employment of a policy that characterized the idyllic days when every essay was seconded by the sanction and effort of paternal government; though as a matter of demonstrable fact it might be sufficient to affirm that we would lose much, and not even get the credit of being martyrs to progress.
Mr. Blaine solves the problem by bounties, for this purpose enacting a general law that ignores individuals and enforces a policy. His scheme provides that any man or company of men who will build in an American yard, with American material, by American mechanics, a steamship of three thousand tons, and sail her from any port of the United States to any foreign port, he or they shall receive, for a monthly line a mail allowance of $25 per mile per annum for the sailing distance between the two ports; for a semi-monthly line $45 per mile, and for a weekly line $75 per mile. Should the steamer exceed three thousand tons, a small advance on these rates might be allowed; if less, a corresponding reduction might be made, keeping three thousand as the average and standard. Other reformers propose a bounty to be given by the government to the shipbuilder so as to make the price of an American vessel the same as that of a foreign-bought, equally good but presumably cheaper, ship. This will be brought about positively by hard cash, negatively by discriminative duties. There are a few enthusiasts, generally socialists and foreigner, who will be satisfied with nothing less than both the immediate abolition of all duties—not even retaining a modest tariff on luxuries for revenue—and the opening of the coast and domestic trade to the world. And last of all, at the other swing of the pendulum, there are kindred spirits who would abolish seamen, ships and seas, turning the last, for the eternal and cloistered happiness of America, into walls of fire that would ban the foreign commercial invader.
What is most wanted is action, action, action! From the beginning of the war to this hour Congress has not passed a single act to uphold the foreign carrying trade, and during the same time it has enacted ninety-two laws in aid of internal transportation, has given in public lands an acreage larger than that of the original States, and has added $70,000,000 in money. A thorough-going Congressional investigation of the whole subject of our commerce, manufactures and navigation would be of great service in enabling merchants and the government to co-operate harmoniously and intelligently. It would bring about a better understanding between the agricultural, industrial and mercantile classes, and, revealing the directions in which effort should be expended, it would tend to give us what we greatly lack and so much need, “a national policy with respect to navigation.” Something should be done to make the ocean mail service bring a fair return to the carriers; as our theory is that postages shall be rated so as merely to pay expenses, it does not seem fair to an important and admirable service that the $400,000 of receipts over expenditures for foreign mails should be retained by the government for the benefit of star routes that begin and end nowhere; other conditions being equal, give the mails to our own Hues, pay a fair price for their transportation, and above all things release our ships at once from the existing burdensome postal restrictions. Rigid inspections of vessels should be imperative; so that in the event of a change in the Registry laws, no vessel could be admitted to the benefit of our protection that would not be so well-found and serviceable as to entitle her to a high rating.
In Free Ships with the co-ordinate measures of relief is the only solution of the problem submitted for discussion and proof. As yet the popular voice is not hoarse from singing of anthems in favor of the policy, and in high places there is much contemptuous denial of its claims; but an active and an able minority believes that the cause is just and worthy of fighting for, and that in the end success is certain to come. Sketching the repeal of the Corn Laws, Buckle writes: “Those who knew the facts opposed the laws; those who were ignorant of the facts favored the laws. It was therefore clear that whenever the diffusion of knowledge reached a certain point the laws must fall .... The opposition the reformers had to encounter was immense, and although the principles of Free Trade had been established for nearly a century by a chain of arguments as solid as those on which the truth of mathematics is based, they were to the last moment strenuously resisted.”
This instinct for our country's good through that larger freedom and more equal justice for all men which vivifies this question, has had just such a past, and is finding just such a present; but to those who watch, there are not wanting signs and portents of an equal triumph for its future.