The Merchant Marine and the Navy.
(PRIZE ESSAY.)
MR LEWIS NIXON.-I am led to reply to Naval Constructor Roberts' article by the importance of its subject rather than by any desire to answer its misrepresentations of my position and motives.
It is much to be regretted that the Institute has put the seal of its approval upon the collection of unproved, and in my opinion unfounded, assertions that constitute this essay. Before criticizing it, however, let me briefly dispose of personal references.
My own time and my own money are given solely in any efforts I make for the rehabilitation of our merchant marine. I am not building any commercial vessels for my own country and do not expect to and so am not influenced by personal interest.
I have studied the laws and commercial histories of my own and other countries and have matured opinions which I do not hesitate to express, because they have at least foundation of fact and precedent. And yet I do not abuse or misrepresent others because they differ with me. Perhaps I am even vociferous in my advocacy of preference for American ships.
Many years of study and an average intelligence will absolve me from the charge of being unwitting, hence the author's words cannot fail to give the impression that such work as I have done is in the interest of foreign shipbuilders. Such an insinuation, whether intentional or not, requires no other answer than that it is absolutely false. The foreign steamship interests fear one thing—discrimination—and they do not fear subsidies.
As regards the National Commerce Convention in Washington, I pointed out what in my opinion is the prime necessity of shipping legislation, that it should be non-partisan, and as the idea seemed to prevail that free ships must be conceded in case all efforts were not to fail, I suggested that this should be limited to foreign ships not over three years, and that the policy should not continue more than ten years. I have defended the American shipbuilder in every speech made and without sneaking and whining about higher wages defeating our chances of competition when work is carried on in a wholesale specialized way. We give the lie to such idea in every other line of manufacture, such as of locomotives, bridges, etc.
I do not know anything about "our present merchant marine campaign" to which Mr. Roberts refers, so cannot criticise it, but if his essay outlines it, no wonder it has gone to "destruction on the breakers." If Mr. Roberts had read my remarks, to which he refers and with such legal aptitude dissects, he would have seen that I drew a clear distinction between mail lines under the power "to establish post-offices and post roads" and a general subsidy to equalize the cost of operation of the ordinary commercial vessel rendering no special service to the Government.
President McKinley, in his letter of acceptance, referring to the discriminating clause in the Republican platform said: "The policy of discriminating duties in favor of our shipping which prevailed in early years should be again promptly adopted by Congress and vigorously supported until our own prestige and supremacy on the sea are fully attained."
Self-sufficient advocates of a policy they do not clearly understand will, of course, dispose of this by saying that President McKinley was wanting in statesmanship and ignorant of political economy.
And since Mr. Roberts has read so carefully as to be able to give weighty opinions regarding our commercial conventions with other countries, we find him at variance with the greatest living constitutional lawyer, Ex-Senator Edmunds, who referring to such treaties said officially:
"We are in the attitude of being able, without an breach of treaty obligations to resort to discrimination in respect of vessels and commerce after giving the requisite notice and after the lapse of time referred to."
The essay of Mr. Roberts reminds me of this line of the poet Pope, "To criticise in detail, pointing out all the errors and correcting them, would be a game not worth the candle. Only the graver faults need be noticed."
(1) On page 6 we are informed that
"No merchant marine exists per se, or can exist in this day and time. It requires governmental creation and support through a capitalization supplied by the government in the shape of money and favorable laws. All nations do it alike that have a merchant marine. The method of capitalization universally applied is called " subsidizing."
The Commissioner of Navigation reports a total American marine of 7,388,755 tons; of which there is in foreign trade 878,523 tons; and in the domestic trade 6,510,232 tons, in 1909. Do these statistics falsify, and is this marine non-existent. The domestic marine, now exceeding six and one-half millions of tons, never had a dollar of "subsidy" in any form, but from the first has prospered under "regulations of commerce," otherwise called "navigation laws "—the authority for these laws being found in Clause 3 of Section 8 of Article I of the Constitution. The foreign-trade marine " exists " with about an eighth part of it under postal subsidy—mail steamers, carrying freight and passengers. It is only the foreign-trade marine, that is under no protection of "navigation laws," that needs any governmental care, and this it needs very much, but cannot get it.
Mr. Roberts states that "all nations" subsidize their marines. This is misinformation—for instance Great Britain does not subsidize her marine, outside of postal payments and admiralty subvention, and rebating the dues for passing the Suez Canal. The Commissioner of Navigation states that "upwards of $46,000,000 are annually contributed," in one way or another, in aiding the world's merchant marine. He agrees with Mr. Roberts in concluding that such contribution or protection is a valid argument for the subsidizing of the marine of the United States. But is it? And, if so, why not adopt the remedy of "ship subsidy"?
These are questions Mr. Roberts has not resolved. Apparently, he is ill-informed concerning the history of the American shipping trade, and the provisions made for ship protection by the founders of the Government.
The matter is very simple. If the shipping trade should be subsidized, it must be as a matter of right, and not as a favor. Our government has no favors to bestow; it can deal only with rights. If the shipping trade has a right to be subsidized, so have all other trades—hundreds of them. That such right exists is absurd, from the fact that its principle could not be carried out. The funds of the Treasury consist of monies received from the tax-gatherer. Citizens of one trade will not vote to tax themselves for the support of another trade. Nor will they consent that the Government make gifts of money to any trade. Why should they? There are better and wiser measures that may be taken.
The fundamental error of Mr. Roberts is this: He does not comprehend that our Government differs from those of the subsidizing countries—that ours is "a government of the people, by the people, for the people." He says, "subsidy is the sine qua non of a merchant marine." Citizens wise enough to hold a convention and produce a constitution for a general government of the Union of the States did not think " subsidy " was the "sine qua non" for anything, except the hire of Hessian troops. They had no use for it. They avoided the thing as incompatible with liberty, equality and justice.
(2) Mr. Roberts accounts for the advocacy of "discriminating duties" by an assertion that "the foreign shipping interests" take delight in suggesting "quack cures" of our shipping ills. According to our observations these interests have never so much as hinted in any quarter that "discriminating duties" would serve our purpose again as formerly. On the contrary, the British newspapers have frequently stated their opinion that Congress would, before long, adopt and enforce "a liberal ship subsidy policy." Mr. Roberts says: "Where the suckers have failed to take these baits (` free trade," free ships," discriminating duties," tonnage taxes') the aforesaid foreign interests,' ('bad manners to 'em') have on one hand raised the cry that subsidies are unconstitutional, and on the other hand they have pointed out that, if subsidies are voted, somebody would get the money "—which was a witty thing to say. But wit and merriment can but poorly hide a piece of sophistry. The "steamship agents" may be bad fellows—rogues, but not fools—but they are all aware of the limitations of our Government, if they are fit for their business, and that is, in part, the steering of the American ship ashore; and they know that it would be useless to state that subsidy is unconstitutional, if it were not. For all that is necessarily required to controvert the statement is for the subsidy advocate to put his finger on the "enumerated power" in the Constitution which authorizes Congress to subsidize shipping. If ship subsidy is constitutional, there is clause, and section, and article for it; or it is necessary in carrying out some clause, section and article.
Strange as it may seem, Mr. Roberts avoided the chance to show his knowledge of the case by pointing out what none of his brethren before him has done—the constitutionality of ship subsidy. Abuse of foreign steamship company agents will not go in place of the proof essential to his case. But Mr. Roberts offers nothing but presumption and abuse.
Now, nothing is easier than to prove the full and perfect constitutionality of "discriminating duties." Clause 3 of Section 8 of Article I provides for these, and does so by agreement in the Constitutional Convention that Congress should have the power to make "navigation laws," instead of the States. The States were exercising this power; they gave it up on condition that Congress should exercise it in behalf of the shipping of all the States, and the States are forbidden to exercise it, by laying and collecting any duties of tonnage or of tariff, for the purpose of ship protection. This arrangement constituted a compact for ship protection by navigation laws. Congress carried out this compact, and it is enforced to-day, fully, in respect to the domestic trade, partially, in regard to the foreign trade. These facts are indisputable.
"Maritime Reciprocity."
(3) Mr. Roberts undertakes to state the facts concerning "Maritime Reciprocity" (page 9), but apparently he has either never read or has not remembered them. He should read "American Navigation" by a brother naval architect, Capt. William W. Bates, president of the Shipping Society of America, Denver, Colorado. Mr. Roberts sums it up thus:
"It will thus be seen, now, that a return to the obsolete discriminatory system as a means of resuscitating the merchant marine is wholly out of the question."
This conclusion, founded on false premises, is as fallacious as that the earth has "four corners."
We have not to " return " to an "obsolete system." The system was not repealed, but is law to-day. Our navigation laws were suspended in 1828, with respect to the nations that might wish to reciprocate in the suspension of their laws. About one nation each year came into the arrangement for a term of years, generally ten. At the end of the term it continues until either party gives a notice of its intention to terminate the arrangement. These agreements are of a class known as time limited conventions. They are not treaties in the full sense, and were intended to test the practicability of doing without ship protection. In this they have failed—every nation to-day having all the protection desired—outside of discriminating duties. Every nation that joined in these experimental conventions is perfectly free to " return " to them, at its option, for the terms have expired. Nearly half the nations concerned with us have terminated their agreements from time to time. Were all to do so, we would be again fully under the original system of ship protection as designed by the fathers, and the subsidy advocates could not help themselves.
As I have said, discriminating duties are the constitutional ship protection, and this is historically indisputable. This being the case, we are badly off, if we cannot terminate our reciprocity conventions; for, without an amendment of the constitution, there is no possibility of subsidizing the marine. The way of the constitution is the only way until another way has been provided. It is the height or depth of silliness to talk about forcing "ship subsidy" on the people. The people would overturn any unconstitutional act of Congress in one of two ways, by action in the U. S. Supreme Court. or by a national election. The people did not believe in violating the Constitution to encourage the raising of sugar. They smashed the system put into the "McKinley bill" by electing Mr. Cleveland in his place. A duty now protects sugar-raising. That is the way of the Constitution.
Postal Subsidy vs. Ship Subsidy.
Mr. Roberts states accurately that "Clause 3 of Section 8 of Article I of the Constitution gives power in perpetuity to Congress to regulate commerce with foreign nations, and among the several States, and with the Indian tribes."
Premising thus, he says, " Subsidies were voted and paid under the laws of 1845 and 1847." But this apparent effort to confuse the case is a mere sophistical trick. The mail subsidy acts of 1845 and 1847 rested, not upon the "commerce clause," but upon the post-office and naval clauses—namely, 7 and 13, of the "enumerated powers" of Section 8 of Article I. What is the use of an ostrich burying his head in the sand? What is the use of illusion or delusion on this great subject? "Mail and naval steamers" are just as constitutional to-day as in 1845 and 1847. No one disputes this conclusion. But the attempt to confuse mail subsidy with ship subsidy is due to ignorance or cunning. It will not go with the people.
But, says Mr. Roberts, "the Senate has repeatedly voted for a subsidy bill, and the Senate lawyers have never seriously raised the point that subsidies are unconstitutional."
Senators voted for sugar bounties. They vote some for and some against each measure presented, but the reasons are not given in all cases. But it is presumable many senators know all about the bearings of the Constitution against ship subsidy. I take notice that no ship subsidy bill passed the House after getting through the Senate. This session no such bill is to be considered in either House, lest the country take alarm and elect some members to stay at home this fall.
Mr. Roberts falls back upon a statement, that the U. S. Supreme Court has held that, "wherein the Constitution does not expressly prohibit, Congress has inherent power to legislate."
This is another vain attempt to twist some court reasoning into authority to violate plain constitutional provisions. There is a compact for navigation laws for ship protection—can any reasoning of any court authorize Congress to set it aside, and institute in its place a gift policy to be supported by taxation of the people, whereas the discriminating-duty policy costs nothing? The mandate of the Constitution is the enforcement of the compact—will a court mandate overrule it? What nonsense!
The power of Congress to order the payment of civil bounties was discussed and settled adversely in 1792, in the Fisheries Bounty bill case. Only under the war power can bounty or prize-money be paid. Industrial protection must be by trade regulations, duties and prohibitions. Only the States may pay civil bounties—not the United States.
(5) As a last resort, Mr. Roberts takes his stand upon the changes of time and some very false history. He says:
"Times have changed, however, and discriminating duties are as out of date as piracy."
Discriminating duties are a part of our constitutional law. The abolitionists called slavery "piracy," yet we were lipund to return fugitives from servitude while this was fundamental law. The true and reasonable reformer seeks to amend the Constitution, not to override and violate it.
Says Mr. Roberts:
"Aside from the forty reciprocity treaties, containing the 'most favored nation agreements”…
But it is not true that "forty" treaties of the kind referred to exist— only some twenty-one or two. And the most favored nation clause is not in any of them. Our "maritime reciprocity" agreements relate to ship protection alone.
Says Mr. Roberts:
"I need only recall that we ourselves were forced to abandon discriminating duties on British ships as a result of the War of 1812."
This is the fact: A convention was made for a term of four years in which time no discriminating duties were to be charged to vessels of either party. The British were bound equally with ourselves to observe this convention. The act authorizing this convention was repealed three years afterward, and it was the intention at that time to let the convention run its term out and then terminate it. The repeal was to take effect in 1824.
In that year the act was renewed, but previously the convention had been extended for ten years in consideration, partly, of arrangements relating to fishing privileges.
Mr. Roberts' intimation that fear of England caused the reciprocity convention to be made is not true. Emerson says, "They who are in evil and falsehood are afraid of all others." The legislation of 1817, 1818 and 1820 shows Congress had no fear whatever of England. In 1817 we prohibited foreign vessels from our domestic shipping trade, and excluded from our ports all vessels of foreign flags coming with cargoes from countries not that of the vessel. In 1818 we prohibited the entry of vessels of any nation from ports anywhere that were closed to our ships, and in 1820 reinforced the act of x818. In consequence of this legislation, highly protective of our vessels, British commerce with us in their own vessels fell off immensely.
They did not declare war, but for twelve years suffered great losses, and in 1830 yielded to common sense and to our policy.
Mr. Roberts says (page 30) :
"Let it be known that this 'policy of the fathers,' even if reverted to, cannot cope successfully with present-day conditions. This practice consisted in remitting to per cent of the tariff duties upon goods imported in American bottoms."
This was only a small part of the protection and was true for a few years only. Since 1794 the "10 per cent" was not a rebate, but an extra duty on all goods by foreign vessels. He seems ignorant of the double duties on goods indirect or by foreign ships from the East Indies and China; and the discriminating tonnage dues—the differential at first being forty-four cents, but after 1804, ninety-four cents.
He says, "the inducement (of 10 per cent) led only to ships on the homeward trip; that is, one way." But what was the discriminative tonnage duty for? Evidently, that handicapped the foreign ship right in our own ports, and was intended to disenable her to underbid our ships for freights outward. The tariff duty protected inward, the tonnage duty protected outward. Thus the system worked both ways.
Mr. Roberts says, "subsidy works both ways," and he goes on to assume that advocates of the constitutional policy are without ability to apply their principle with success. He thinks non-dutiable imports would knock out the method that no discrimination could be made! What is in the way of putting a duty upon goods by foreign vessels, but making them free of duty by our own ships?
He says, "A remission of tariff duties to the shipper is the equivalent of giving him that much money out of the Treasury, and is in reality a subsidy."
But suppose the differential is not a remission, but an extra—what is it then? All this was threshed out one hundred and sixteen years ago. As soon as our vessels carried over half of our own trade, Congress changed from remission of dues to charging extra.
All the subsidy argument is useless. Be it ever so true that subsidy would be a preferable method to discriminating duties, the fact—the very cold fact—remains, that, under the Constitution as it stands, subsidy is impossible. The Federal Government is under compact to pass and maintain "navigation laws" for ship encouragement. This system of law stands to-day with some exceptions. Wipe out these, and we are again where we were when the act of 1828 was passed. If we prefer subsidy, then agitate for an amendment of the Constitution.
"A little learning is a dangerous thing."
A Society of Nautical Antiquaries.
The editor of the PROCEEDINGS has received the following letter and circular relating to the establishment, which now seems assured, of a Society of Nautical Antiquaries. It is hoped that among the members of the Institute there will be many whose interest in the field to be covered by the proposed periodical will lead to their becoming subscribers.
5, RUVIGNY MANSIONS, PUTNEY, S. W.
2 April, 1910.
PROFESSOR P. R. ALGER, U. S. N.
DEAR SIR.—If you are sufficiently in sympathy with the scheme outlined in the enclosed circular to give it publicity in the PROCEEDINGS OF THE U. S. NAVAL INSTITUTE, I shall be very glad.
In the few days during which the project has been before the public in this country, promises of support have been coming in so freely that I think it almost safe by now to predict that it will shortly be possible to put the matter on a definite footing. The first steps would probably be to call a founders' meeting and appoint the necessary officers.
To begin the publication of a monthly journal.
Of course, quite apart from the natural desire for the power which a wide membership would give, you will see how greatly the scheme would benefit by being extended to include antiquaries in all maritime countries.
It is in the hope of securing for it this double benefit that I approach you on the subject. As far as I know, there is no such society existent in any country.
The British applicants of the first few days are drawn almost equally from the navy and from outside it. The naval officers are of all ranks, active and retired, from admiral to midshipman.
Yours truly,
L. G. CARR LAUGHTON.
PROPOSAL FOR THE FORMATION OF A SOCIETY OF NAUTICAL ANTIQUARIES.
Experience has shown that interest in nautical archmology is active and increasing. At present each individual student, whether his motive be historical, artistic, or purely antiquarian, must needs rely on his own unaided research: whence it appears that the provision of some means of intercommunication would be helpful. Of various suggestions made, that which seems to find most favor is for the foundation of a periodical wherein subscribers could record the results of their researches into, and bring forward points needing elucidation concerning such matters as the following: The design, building, and equipment of ships; the language and customs of the sea; iconography; genealogies; nautical flags, relics, medals, dress, and so forth. If after the establishment of a periodical it were thought desirable to proceed to the foundation of a society, the periodical would still be needed to serve as its official organ.
It is believed that the proposed society, or periodical, would serve as a useful, if humble, ally to the Navy Records Society, standing to it in the relationship which a pinnace bears to a great ship, and serving to make discoveries in narrow waters where she herself might not easily come.
In order to know what support might be expected, it is necessary to assume that the annual subscription would probably be fixed at one guinea; and to ask those who favor the project to communicate, as a preliminary measure with the acting secretary, Mr. L. G. Carr Laughton, 5 Ruvigny Mansions, Putney, S. W., London.
February, 1910.