AMERICAN business men, farmers, miners and others interested in foreign markets, for the first time since the war, have acknowledged the imperative necessity of an American ocean-going merchant fleet, according to the consensus obtained by Shipping Board commissioners who recently concluded a series of thirty-one hearings on the merchant marine problem throughout the nation. Not since the abnormal war period had there been, until the middle of last summer, a more positive indication of this country’s dependence upon foreign shipowners for the transportation of American manufactures and commodities, than was manifest simultaneously with the withdrawal of considerable foreign merchant tonnage from American trade during the British coal miners’ strike. It happened coincidentally that the Shipping Board commissioners were holding hearings in the various industrial and agrarian districts at a time when the normal ocean situation was disturbed. No better time could have been deliberately chosen.
Eliminating discussions and allegations of the Shipping Board’s critics, who allege political motives for the government’s action in supplying the necessary tonnage to move American products, the fact remains indisputable that without the reserve of ships, our heritage of the war, American exporters, especially those in the southern and western districts, would have met a virtually ruinous economic situation through their inability to expeditiously move their commodities.
Ninety-two steamships were withdrawn from reserve and placed in commission up to December i, to meet the requirements of American farmers and industry. Some shipping men have declared that the government’s action in placing the ships in commission averted a panic in the South. It was estimated that the ships will return many millions of dollars to American farmers, who otherwise would have been unable to reach foreign markets, because of the non-availability of merchant tonnage.
While the situation caused by the British coal miners’ strike is a current example of how America is affected through the withdrawal of shipping by foreign nations and how ocean transportation rates soar, affecting virtually every American industry to some degree, the condition would be of greater magnitude, importance and widespread effect should the British empire suddenly find itself involved in or confronted with a major war. The effect on American foreign trade and the normal condition of domestic markets would be tremendous.
Admitting the importance of the Shipping Board’s fleet as a factor in American foreign trade at present, with its stabilizing effect on ocean rates, a situation, such as would ensue should Great Britain withdraw her fastest liners and hundreds of cargo carriers from America’s trade, would be too difficult for the present merchant marine to guarantee and maintain the ocean communications necessary for the normal continuance of American trade and uninterrupted passenger travel.
National defense in our country no longer exclusively means protection against warlike actions of other nations. It now includes defense against the assessment of ocean freight rates by foreign ship owners, which would preclude American merchants’ profitable participation in the world’s trade. Regardless of what it actually costs to maintain the government fleet at sea to carry part of our trade with the world, the expenditure should not be looked upon as a total loss, but on the contrary, as protection, an insurance premium to assure our markets; to guarantee to American merchants transportation facilities which they probably would not have had if the government ships were not used.
There are many ways in which a nation’s foreign trade might be destroyed. Competition among great industrial nations is extremely keen. Each country attempts, and in most instances successfully does protect its commercial interests in various ways. The most effective protection a nation can give its foreign trade is through financial aid to merchant shipping. Every important nation, with the exception of the United States, aids its shipping through some expediency, either in the course of construction or while it actually is operating in competitive trade, or in establishing new trade routes thus opening new fields for its merchants.
The only protection United States ships have is in the coastal trade. Long ago, our forefathers had vision enough to discern that sometime the United States would be large enough to support a vast fleet of carriers, that could in emergency form the nucleus of a naval auxiliary. And in contrast with this, our foreign trading ships were neglected and are now competing, without protection in the most competitive of commercial pursuits. They sail on virtually profitless voyages, and in some instances at a loss, whereas most foreign ships are subsidized by their respective governments and can show profits.
This particular and rather unfortunate circumstance of American shipping engaged in foreign trade becomes more complex when it is remembered that the United States has the greatest and strongest protective tariff of any nation. Our country now is demanding a merchant marine. This merchant marine, in the opinion of the vast majority should be privately owned. But to do this financial aid must be given by the government, either directly or indirectly, if we are to accomplish the desired result in the immediate future. Meanwhile, until it can be transferred to private ownership, the government should own and operate the ships to insure the permanency of a merchant marine.
The necessity for an American owned and operated merchant marine is easily discernible. Every effort must be made to build up the fleet. Our early history shows how important our small merchant fleet was to the building of the nation. Our clipper ships of half a century ago showed their sterns to every nation’s ships. They carried cargo everywhere—and cargo of every nation— frequently at higher rates than foreign vessels obtained for the same voyage with a similar freight. The situation now is reversed. We are handicapped with antiquated laws governing merchant shipping.
Throughout the pages of history there are indications that nations rose and fell in virtually the same ratio to which they maintained naval supremacy and their merchant fleets. If the United States is to remain in its present position as a great power, we must have our own merchant ships, all types, sizes and numbers equal to those of our commercial competitors and offer service comparable if not better than the best offered by any foreign nation. We are far behind in all competitive respects as compared with other maritime powers.
More than half of America’s merchant fleet, including ships on the Great Lakes and in the coastal trades, are obsolete and uneconomical as compared with foreign ships. Most of the ships are war built craft, designed to carry great deadweight at low speed. Foreign ships in many instances are more economical than ours. Their speed is greater and consequently they obtain the higher classes of freight and passengers. We need many replacements and additions to our fleet to give it a semblance of balance to meet the requirements of shippers and travelers.
Motorships are continually entering the world’s trade routes. Their economy has been demonstrated. America has few. The Shipping Board, however, has designated fourteen ships for conversion from steam to Diesel propulsion, thanks to the foresight of Rear Admiral William S. Benson, and his ability and keen appreciation of the importance of merchant shipping to the nation’s welfare. The first motorship of the group already has carried a full cargo of cotton to Bremen. It is ready to meet foreign competition on the long voyage trades. But we must have numerous additional units.
The superiority of the motorship in comparison with the steam propelled vessel of the same size is proved, through; less fuel consumed per day, larger cargo carrying capacity, continuously sustained _ speed, longer operating radius, elimination of stand-by losses, larger saving in fuel by use of electric auxiliaries, saving in upkeep costs, fewer men in the motor room, more contented personnel due to the absence of dirt and discomfort, lastly, but not the least in competitive trades, the motorship’s other advantage is in the cheaper insurance rates allowed the underwriters. Great Britain, Italy, Japan and the Scandinavian countries are putting the economical motorship on the long voyages and in the most highly competitive trade routes. Eventually, if the United States does not take its rightful part in these transformations, commensurate with our importance in international commerce and world affairs, we will attempt to enter when it is probably too late.
An example of competition in ocean shipping in the round-the-world service, may well be given as related to an American enterprise. The company operates a fleet of combined passenger and cargo carriers, steaming at about 15.5 knots. Little competition at first was offered to its complete service, although it continually, since its establishment, was forced to compete for the port to port traffic, in the short runs.
A big, efficient and financially successful British shipping firm entered virtually the same route, but with motorships capable of maintaining an average speed of 16.5 knots or better. Consequently they are carrying tremendous quantities of express freight from the Atlantic coast territory to the Orient and Far East. From the Orient, Far East, Philippines, Dutch East Indies, Straits Settlements ports and elsewhere in that area, they are obtaining higher valued cargoes than the American company. Among other commodities, they carry great shipments of rubber for our industries. We pay the freight and the money goes to fill foreign coffers. In addition to this competition, which is fair in every respect, another line of British owned motorships has entered the route. Both these fleets make better time to and from the Atlantic coast than the American ships.
Too much emphasis cannot be placed on the importance of the large fast ships. In these the United States stands in the ratio of one to six. These are easily and quickly convertible into naval auxiliaries, and even in their peaceful commercial pursuits might be called cruisers. With the tendency to reduce the size of purely naval vessels these ships will become more important than ever. The story of the Carmania is too recent to have been forgotten. Transformation from a liner to an armed cruiser in a week is remarkable example of speed and preparedness.
We must have our merchant marine because on many of the American trade routes, foreign ships were withdrawn when the opportunity for greater profits in the coal carrying trades became apparent. To withdraw ships from a route and place them in another offering greater profits, from the shipowner’s viewpoint, is logical. However, the withdrawal of the ships necessarily affected someone, and in this case, the effect was not wholly upon the American merchant alone, but, in addition, also his foreign customer, while it probably simultaneously offered a market to a competitor. One of the outstanding effects of the British coal strike in addition to the gulf situation has been the inability of shippers in two North Atlantic ports to move their cargo to Glasgow, because of the withdrawal of foreign tonnage.
To offset the withdrawal of foreign ships the Shipping Board, up to December I, had to place ninety-two ships, with capacities varying from 6,000 to 9,000 tons, on the trade routes abandoned by foreign shipowners. The plight of American exporters was precarious. Their first thought was to seek the assistance of the government. What the situation would have been without the reserve of ships is not problematical.
Tramp steamship services to this country are almost as important as the fast freight and passenger liner service. They are extremely essential to the entire country. It is these vessels, seeking cargoes of all natures, willing to carry them anywhere at low rates, that enable American importers to bring raw materials to their receiving points and likewise offer exporters transportation to move large volumes of bulk cargoes to other parts of the world at reasonable rates. Normally American ships, because of their high initial costs and greater operating expense, are unable to compete for this traffic. The vessels placed in service by the government during the recent abnormal condition, were used in some instances in purely tramp services, such as carrying full cargoes of cotton and grain, while others filled in on scheduled routes where the demand for space could not be met by the normal allotted tonnage.
The port of Philadelphia now is deprived of a service to the small Brazilian ports, inaccessible to the large freight ships. The foreign vessels, which had established the route several months ago under the management of American shipping men, and which were making a profit, were withdrawn and placed in the coal trade. There are numerous instances of this kind at present affecting American industry, that would not have applied, if the American merchant marine could in some way be placed on a competitive equality with foreign ships.
The necessity for an American merchant marine is so apparent and obvious that it frequently seems unnecessary to again mention the reasons why it should be established on a permanent basis. A real merchant marine is not a “thing,” it is a “service,” and the United States because of its continually increasing production must give service to its merchants to uninterruptedly meet competition and the foreign demand for our products.
Benefits, too numerous to mention, accrue to the nation possessing an efficient merchant marine. The most outstanding beneficial influences have resulted since the establishment shortly after the war of the express passenger and freight service to ports on the east coast of South America. The service now is maintained every two weeks by the Munson Steamship Company to Rio de Janeiro, Santos, Montevideo and Buenos Aires. Prior to the establishment of the line, excellent ships were operated from South American ports to Europe, instead of to the United States. Naturally they were! Every nation, except the United States, has continually appreciated the axiom that “trade follows the flag.” Certainly, with the better steamship communications, most of the South American business was conducted with European nations offering the services. The services rendered by a large British steamship company and the Lloyd Brazileiro to the United States were not comparable to those offered travelers by lines operating to Europe. The sailings were infrequent, ships slow and the accommodations were not the most desirable as compared with the vessels to Europe.
A fleet of 535-foot “state” ships, originally built as transports, was placed in the South American route—swift liners, with passenger accommodations and appointments, comparable to trans-Atlantic liners. Consequently hundreds of South American merchants who probably never would have come to our shores, are regularly making the quick journey to the United States in these fine ships. Statistics of our trade relations with Brazil, Uruguay and the Argentine, are impressive now as compared with the business transacted before the establishment of the service. Think of making a voyage to Rio from New York in less than twelve days, as compared with sixteen days, and to Buenos Aires in less than seventeen days as compared with the previous twenty-four- day voyage.
The establishment of the fast services to the east coast of South America has accomplished more, according to bankers, to decrease long time credits than any other factor. A progressive bank in one of the North Atlantic ports recently completed a survey showing that in 1900 only from three to five per cent of the total production of the district was exported, while the same area now exports from 15 to 33per cent of its various lines of manufactures. The same increase in export commerce applies to virtually every other industrial section in the country. Isn’t this sufficient reason why we should have our own merchant ships? A tremendous volume of American exports is shipped to South American countries and the stimulus the trade has received can be attributed in no small measure to the establishment and maintenance of fast passenger and freight services to the Latin American countries.
The foregoing indicates a situation in international shipping that should cause an awakening of the American people to the necessity of owning and controlling the movements of a fleet of cargo and passenger ships; the necessity of immediately revising our laws affecting merchant shipping, by modernizing them to meet existing and future conditions and the necessity of concerted action on the part of all interests. Especially apparent is the urgent need for the cooperation of all members of Congress, regardless of their party affiliations, to enact immediately, enabling legislation for the up-building of the American merchant marine to a point of competitive equality, commensurate with America’s position in international commerce and world affairs, both from the economic viewpoint and also as a measure of actually needed national defense.