The American Merchant Marine

I

THIS article is written on the American merchant marine, but that subject is so closely related to foreign trade that the two cannot be separated. Therefore it can be considered as relating to both subjects.

From the early years of our history until about 1860, American ships carried practically the entire American trade. This was helped by a preferential tariff. But immediately after the Civil War there was a terrible slump, and by 1890 only 12.9 per cent of our trade was carried in American ships. In 1900 the proportion was 9.3 per cent, and in 1914 it was down to .97 per cent — practically extinct.

The Seamen’s Act was the principal factor in producing this last result. As a result of its requirements, when we compared three ships of the same size but of different nationalities, we got the following figures: —

The American ship had to carry 47 men, and her wages were $3270; the British steamer, of practically the same size, had a crew of 40 men and her wages were $1308; the Japanese steamer carried 36 men and her expenses were $777.

In analyzing those figures it would be quite pertinent to ask why, if American shipowners were able to operate British and Japanese ships under the laws of these countries at a profit, they could not operate American ships at a profit. The answer to this question has never been intelligently given, because our laws have made such operation impossible. The reasons for this are so numerous that space would not permit them to be set forth here. But they will be seen in part in the figures which I will give.

For instance, the measurement of American ships is very much larger than the measurement of ships of other nations. The uninitiated might say, What difference does that make? It makes this difference: whenever the American ship goes into a foreign port she has to pay the various expenses that are assessed on her tonnage, such as harbor dues, pilotage, and so forth, and since those charges are assessed on the tonnage of the ship the American ship has to pay from 20 to 30 per cent more than her foreign competitors. This is of absolutely no benefit, but a direct loss, to the American nation. Foreign ships, on entering American ports, are measured on the American measurement and they have to pay the same tolls as American ships in American ports, which is quite right and just.

The United States Government, during the war, built about one hundred ships called the Robert Dollar type. They were modeled after an 8800-ton ship built to our specifications. Her British net measurement was 3420; her American net measurement was 4283 — a difference of 863 tons, or approximately 25 per cent. To get a correct average I took the tonnage of three British, three Norwegian, two Danish, and two German ships. Their combined total net tonnage under the measurements of the various countries was 30,555. All those ships were measured under the American rule and the tonnage was 41,142, a difference of 34 per cent.

General Goethals, in a public address, stated that the ordinary American cargo ship passing through the Canal had to pay $500 more than the ships of other nations. Just take one item. Our round-the-world ships entering the port of Shanghai have to pay $1932 for the tonnage dues. A foreign ship of the same actual size would pay between 25 and 30 per cent less, or approximately $500 less.

Probably this is brought about to some extent by our not having one shipowner in Congress to see that our laws are just and fair, whereas in Great Britain there are about seventy shipowners who are members of Parliament. Therefore there is a very decided indifference in the American lawmaking bodies about changing our shipping laws and regulations. Fortunately, for some time past a number of Senators and Congressmen have been posting themselves on the requirements necessary to put the American shipowner on an equal basis with his competitors, and we hope the time is not far distant when we shall be able to operate our ships on the same terms and conditions as our foreign competitors.

II

Our merchant marine is absolutely necessary for national defense. This was clearly in evidence when we entered the late World War and had to expend three billions of dollars to build ships. If our laws and regulations had been fair and reasonable our American shipowners would have had all the ships the Government required and not a dollar of that three billion dollars would have been expended. When the war broke out Great Britain did not have to build a merchant ship. Congress had a splendid illustration of the necessity of ships, had it only taken notice of it, when President Roosevelt ordered our battle fleet to go around the world and it was an absolute impossibility to furnish it with coal without employing foreign ships, which was done. Secretary Metcalf at that time was severely criticized, by people who did not know the facts, because he was employing foreign ships to convoy the American fleet, and he, much against his will, had to admit that the American merchant ships did not exist in sufficient numbers.

As a concrete illustration of what can be done by privately owned ships, the S. S. President Grant was ordered by the Government to fit out to carry 1600 troops from San Diego to Olongapo, Philippine Islands. She had just arrived in San Francisco from the Orient, and had half a cargo to discharge. Fumigation took twelve hours. Then bunks and culinary and sanitary facilities had to be provided. The notice was served on us Saturday at 5 P.M. The ship sailed from San Diego the following Saturday, having loaded a full cargo and deck load. The soldiers and cargo were all landed in the Philippines in twenty-six days from the time we got the notice. Could a government-operated ship beat that?

Now the difference between the domestic trade and foreign trade is this: the foreign trade brings gold into the country. When we sell goods abroad these goods have to be paid for in gold, or, far better, they may be paid for in raw materials which we bring in to keep our factories going and give employment to thousands of men. Our domestic trade is a swapping of commodities. A certain commodity is produced and sold in one part of the country and another part of the country buys it, so that the commodity is just transferred and the money shipped back, and the nation at large is not bettered.

I will just mention one of the benefits that our country derived from having a merchant marine. Our ships had difficulty in getting cargoes out of the Philippine Islands. The Southern islands had not been developed to produce anything for export. I found that copra could be got in large quantities, and developed the trade by shipping a cargo to the west coast of America. This was the first copra that ever had been sent to that part of the United States. Fifteen years after, the export of copra per annum from the Philippine Islands to the Pacific Coast amounted to twenty-two millions of dollars. The Philippine Islands had the tremendous benefit from this trade and the west coast of the United States had the benefit of the copra in furnishing employment and in producing oil in large quantities from the copra.

Foreign trade is a necessity because our factories would be idle considerably more than one third of the time each year if no foreign trade existed. Our farmers and fruit growers produce much more than can be consumed; therefore the surplus must be exported or rot on the ground. So foreign trade is an absolute necessity for a great part of our manufacturers and for the selling of the products of our soil.

A bill was in Congress a year ago to give a subsidy to American ships. It was defeated, but the same Congress passed a 50 per cent duty on all repairs done on American ships in foreign countries. It is impracticable to operate ships that are on long voyages without doing a certain amount of work in foreign countries, and this 50 per cent duty is a very heavy tax that no other nation in the world has to pay. Any other nationality can repair ships in foreign countries without paying a cent of duty.

Then our inspection service demands that a hydrostatic pressure shall be put on all our boilers once a year. This causes delay to the ship and also a big expense, as it causes repairs to be made that would not be necessary except for the test. No other nation exacts a hydrostatic pressure test once a year on its ships. All repairs and work ordered by the inspectors must be done before the ship is permitted to sail. Foreign ships get a certificate reading that the inspection has gone through, but that certain repairs have to be made at the first opportunity, thereby not delaying the ship.

Another serious matter for all American ships is that our Seamen’s Act compels us to pay the crew one half their wages at every port, if the ports are one week apart. The result of this is that almost every sailor and fireman goes uptown as soon as he gets the money, and most of them return drunk to the ship. This has caused us a big loss of time and a great deal of expense, often delaying the sailing of the ship.

I could give you scores of incidents of this kind. It used to be that the captain used his own discretion as to whether he would pay the men part of their wages or not. Any sober man could get all the money he wanted. The drunkard could not get a cent, and this kept him sober until he came home. The Seamen’s Act has done the sailors a great harm and has been a terrible injustice to the shipowner. No benefit to anyone, but a detriment to everyone. And Congress refuses to change it because the labor unions want it to harass and cause expense to the shipowner.

The last Congress passed no bill to help, but attempted to pass many to hurt shipping and foreign-trade industries. These harmful bills had to be fought.

III

Shipowners are striving very hard to regain a small part of our carrying trade that foreign nations have been receiving. The Shipping Board, under the leadership of Chairman T. V. O’Connor, appreciating the great difficulty privately owned American ships were experiencing in competing with foreign-owned tonnage, adopted the policy of disposing of American government-owned tonnage to private corporations on sufficiently liberal terms to warrant their competing with foreign ships. This policy has proven most beneficial to American shipping, and through the assistance of the Board we were able to purchase a fleet of American combination freight and passenger vessels which were placed in the round-the-world service some four years ago.

The United States was the first nation to do this and is the only one now maintaining a regular round-the-world passenger service. Up to the present time over ninety ships have completed the round trip, calling at twenty-two ports of eleven nations, and sailing on time from every port. It was reported by all shipowners, before this service was started, that it could not be done. The distance around is 25,600 miles, so the total distance traveled up to the present time has been 2,304,000 miles.

In establishing this service and getting our offices started at all the different ports at which our ships call, I have had occasion to make four trips around. And on these four trips I have made something over 1700 calls on merchants and shipowners in an endeavor to develop this business. We are running in direct competition with the British, French, and Japanese mail subsidized steamers. In fact, we are in direct competition with every nation having ships on the ocean.

While in Manila I said to the Postmaster, ‘You are sending a lot of mail on our steamers to Singapore. Part of it is transferred from our ships to British ships and distributed by them at the ports at which we call.’ He said, ‘I could not have you carry it, as the British ships are subsidized and we do not have to pay them, since they get the mail from the British post office.’

I offered to carry the mail for nothing from Singapore on, and this has been done.

We have managed to make an arrangement with the Egyptian Government to carry its mail, and also with the Italian Government. These payments help us a great deal.

As to what the benefit of shipowning is to the country: Last year we spent in wages and supplies alone $15,000,000. We provided a sailing every Saturday to the Far East from the Pacific coast, and on account of this service merchants have developed new business amounting to hundreds of thousands of dollars. Now they are selling large quantities of commodities as far as Ceylon by this service. This is a direct benefit to the United States. And from the Orient to the west coast of America we also have a sailing carrying the mail once a week. This is a better service than ever has been rendered before, and has helped trade and commerce considerably.

There is another great benefit to the country that should not be overlooked. We own seventeen large American passenger steamers. It is generally conceded that this class of ship should be scrapped and replaced in twenty years. Therefore we should build one new ship every year, commencing at once. The price asked by American shipbuilders at the present time is about six million dollars. Think of the benefit of this to our country, since practically every cent of this amount goes to labor, from the time the iron ore is taken from the ground until it has been built into the finished ship. Then the development of foreign trade is so important and so great that it is impossible to think out what it will be many years hence. Those who are not in favor of a privately owned merchant marine should think this over.

Congress should treat shipowners exactly the same as the governments of the various nations treat their shipowners — namely, pay the same compensation for carrying the mail and make our laws and regulations exactly the same as those of our competitors. And when this is done I can assure our country that American shipowners can and will operate a merchant marine for all our requirements, in peace or war, and in competition with the whole world. Give us no advantage whatever, but just put us on an exact equality, and we will make a success of it as well as they. And, outside of payment for carrying the mail, it will not cost our country a cent.