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 Report of the Merchant Marine Commission 
 
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REPORT 
 
 OF 
 
 The Merchant Marine Commission, 
 
 Together with the Testimony Taken at 
 the Hearings. 
 
 -9 
 
 IN THREE VOLUMES. 
 
 Volume I. 
 
 REPORT AND RECOMMENDATIONS OF THE COMMISSION 
 
 (INCLUDING THE VIEWS OF THE MINORITY), 
 
 AND HEARINGS ON THE NORTH ATLANTIC COAST. 
 
 ^ 
 
 WASHINGTON: 
 
 GOVERNMENT PRINTING OFFICE. 
 
 1905. 
 
 T 
 
MERCHANT MARINE COMMISSION. 
 
 SENA TORS. 
 Hon. JACOB H. GALLINGER, New Hampshire, Chairman. 
 Hon. HENRY CABOT LODGE, Massachusetts. 
 Hon. BOIES PENROSE, Pennsylvania. 
 Hon. THOMAS S. MARTIN, Virginia. 
 Hon. STEPHEN R. MALLORY, Florida. 
 
 REPRESENTA TIVES. 
 Hon. CHARLES H. GROSVENOR, Ohio. 
 Hon. EDWARD S. MINOR, Wisconsin. 
 Hon. WILLIAM E. HUMPHREY, Washington. 
 Hon. THOMAS SPIGHT, Mississippi. 
 Hon. ALLAN L. McDERMOTT, New Jersey. 
 
 Mr. WINTHROP L. MARVIN, Secretary to the Commission. 
 
SENATE. j Repokt 
 
 3d Session. j ( No. 2T65. 
 
 DEVELOPMENT OF THE AMERICAN ^MERCHANT MARINE 
 AND AMERICAN COMMERCE. 
 
 Januaby 4, 1905. — Ordered to be printed. 
 
 Mr. Gallingee from the Merchant 3Iarine Commission, submitted 
 
 the following. 
 
 REPOET. 
 
 (To accompany S. 6291.) 
 
 Deeply concerned at the decline of our ocean fleet, and the loss of 
 skilled officers and seamen — pioneers of trade in peace, and defenders 
 of the flag in war — the President of the United States, in his annual 
 message to Congress, December 7, 1903, said: 
 
 A majority of our peoj le desire that steps be taken in the interest of American 
 shipping, so that we may once more resume our former position in the ocean carry- 
 ing trade. But hitherto the differences of opinion as to the proper method of reach- 
 ing this end have been so wide that it has proved impossible to secure the adoption 
 of any particular scheme. Having in view these facts, I recommend that the Con- 
 gress direct the Secretary of the Navy, the Postmaster-General, and the Secretary of 
 Commerce and Labor, associated with such a representation from the Senate and the 
 House of Representatives as the Congress in its wisdom may designate, to serve as a 
 commission for the purpose of investigating and reporting to the Congress at its next 
 session what legislation is desirable or necessary for the development of the American 
 merchant marine and American commerce, and incidentally of a national ocean mail 
 service of adequate auxiliary naval cruisers and naval reserves. While such a 
 measure is desirable in any event, it is especially desirable at this time, in view of 
 the fact that our present governmental contract for ocean mail with the American 
 line will expire in 1905. 
 
 Our ocean mail act was passed in 1891. In 1895 our 20-knot trans-Atlantic mail line 
 was equal to any foreign line. Since then the Germans have put on 23-knot steam- 
 ers, and the British have contracted for 24-knot steamers. Our service should equal 
 the best. If it does not, the commercial public will abandon it. If we are to stay in 
 the business it ought to be with the full imderstanding of the advantages to the 
 country on the one hand, and on the other with exact knowledge of the cost and 
 proper methods of carrying it on. Moreover, lines of cargo ships are of even more 
 importance than fast mail lines, save so far as the latter can be depended upon to 
 furnish swift auxiliary cruisers in time of war. The establishment of new lines of 
 cargo ships to South America, to Asia, and elsewhere would be much in the interest 
 of our commercial expansion. 
 
 In response to this earnest recommendation Congress passed the act 
 of April 28, 1904, creating the Merchant Marine Commission, com- 
 posed of five Senators and five Representatives. The text of the act 
 by which the Commission was authorized is as follows: 
 
 Be it macted by the Senate and Htrme of Representatives of the United States of America 
 in Congress assembled, That a commission is hereby created, to be called "The Mer- 
 chant Marine Commission," to be composed as follows: Five members of the Senate 
 of the United States and five members of the House of Representatives of the United 
 States, to be appointed by the presiding officer of each House of Congress, respec- 
 tively: Provided, That at least two of the said members of the Senate and two of the 
 said members of the House of Representatives shall be members of the minority 
 party. 
 
 I 
 
II BEPOET OF AMBRIOAN MEBOHANT MARINE COMMISSION. 
 
 Sec. 2. That it shall be the duty of this commission to investigate and to report to 
 the Congress on the first day of its next session what legislation, if any, is desirable 
 for the development of the American merchant marine and American commerce, 
 and also what change; or changes, if any, should be made in existing laws relating 
 to the treatment, comfort, and safety of seamen, in order to make more attractive 
 the seafaring calling in the American merchant service. 
 
 Sec. 3. That the Commission shall give reasonable time for hearings, if deemed 
 necessary, and if necessary it may appoint a subcommission or subcommisrions of its 
 own members to make investigation in any part of the United States, and it shall be 
 allowed actual necessary expenses for the same. It shall have the authority to send 
 for persons and papers and to administer oaths and affirmations. All necessary 
 expenses, including clerks, stenographers, messengers, rent for place of meeting, and 
 printing and stationery, shall be paid from any money in the Treasury not otherwise 
 appropriated; however, not to exceed twenty thousand dollars for expenditure under 
 this section, to be paid upon vouchers to be approved by the chairman of the 
 Commission. 
 
 Sec. 4. That any vacancies occurring in the Commission, by reason of death, disa- 
 bility, or from any other cause, shall be filled by appointment by the officer and in 
 the same manner as was the member whose retirement from the Commission creates 
 the vacancy. 
 
 The Commission immediately met and organized in Washington, and 
 began its formal inquiry on May 23, 1904, in New York City, where 
 more witnesses appeared than could be examined in the three days set 
 apart for the initial hearing. That the mercantile interests of the 
 whole country welcomed the investigation and applauded its object 
 soon became manifest in every section of the United States. Urgent 
 invitations were received not only from the great ports of the north 
 Atlantic coast, but from the lake cities, the Gulf of Mexico, and the 
 distant Pacific seaboard. A full national itinerary was therefore 
 arranged and hearings were held as follows: 
 
 New York, May 23-25. 
 Philadelphia, May 26, 27. 
 Baltimore, May 28. 
 Boston, June 1-2. 
 
 Chicago, June 24. 
 Detroit, June 27. 
 Cleveland, June 28, 29. 
 Milwaukee, July 21. 
 
 Seattle, July 26, 27. 
 Tacoma, July 28, 29. 
 Portland, August 1. 
 San Francisco, August 4, 5. 
 
 On the north Attantic 
 
 On the Great Lakes. 
 
 On the Pacific 
 
 On the southern coast and Gulf of Mexico, 
 
 Galveston, November 12. 
 New Orleans, November 14. 
 Pensacola, November 15. 
 Brunswick, November 17. 
 Newport News, November 19. 
 
 In addition to the above, the Commission held daily sessions in the 
 city of Washington from November 23 to December 12. Iwaring evi- 
 dence, sifting the printed testimony, preparing a bill, and forecasting 
 a report to Congress. 
 
EEPOET OF AMERICAN MERCHANT MARINE COMMISSION. Ill 
 A FAIR CHANCE FOE ALL. 
 
 In all of these cities, except Washington, the invitations were 
 extended and the arrangements for the hearings were made by repre- 
 sentative commercial organizations, for whose alertness, patriotic 
 zeal, and cordial hospitality the Commission desires to return sincere 
 acknowledgments. Without the frank cooperation of these energetic 
 men of business in the chief commercial cities of the country, the 
 inquiry of the Commission could not have been cariied so far between 
 the adjournment and the reassembling of Congress. 
 
 It was everywhere distinctly stated that the Commission did not 
 come on any political errand; that it was not committed in advance to 
 any specific measure; that its members, one and all, were open minded 
 as to the best policy of relief for our vanishing ships and seamen; and 
 that any intelligent suggestion offered in good faith toward the 
 upbuilding of our merchant fleet would be frankly welcomed and 
 honestly considered. Indeed, the open-door rule that governed all 
 the hearings was so very liberal that in one or two instances alien 
 agents of foreign steamships appeared with the familiar sophistical 
 plea that foreign shipowners had the field; that their service was 
 "cheap," and that therefore they ought to be allowed indefinitely to 
 monopolize our ocean carrying regardless of the ultimate effect upon 
 our power to extend our trade in peace or defend our coasts in war. 
 
 UNITED DEMAND FOR AMERICAN SHIPS. 
 
 Coincidently, this bland appeal of the foreign steamship agents has 
 fouud expression in a few newspapers, but so far as is known it has 
 not been advanced anywhere by so much as one witness qualified to 
 speak as a disinterested American citizen. Public sentiment, as the 
 Commission has sounded it throughout the United States, is practically 
 unanimous not in merely desiring, but in demanding an American ocean 
 fleet, built, owned, officered, and so far as may be, manned by our own 
 people. This sentiment, as the printed pages of the testimony prove, 
 is just as earnest on the Great Lakes as it is on either ocean. Men of 
 business showed themselves conspicuously alert and well informed on 
 this vital question in the lake cities, and the interest and knowledge of 
 shipbuilding Philadelphia were fairly matched at the great southern 
 port of New Orleans. Differences of opinion there are, of course, as 
 to methods and policies, though these are by no means irreconcilable. 
 But nowhere is there any difference as to the main principle of national 
 recognition and encouragement of our hard-pressed ocean carrying 
 trade. 
 
 DISINTERESTED WITNESSES. 
 
 A very large proportion — perhaps a majority — of the hundreds of 
 witnesses who have appeared before the Commission are men who 
 have not a dollar's worth of actual interest in ships or shipbuilding. 
 Practically all of the present ocean shipowners and shipbuilders of 
 America have been heard, but all together these men are by no means 
 numerous. A great part of the testimony, and that not the least 
 authoritative and impressive, has come from merchants in general 
 trade, manufacturers of goods for export, editors, lawyers and like 
 professional men, and others whose interest in this question is, at the 
 
IV REPORT OF AMERIOAK MERCHANT MARINE COMMISSION. 
 
 most, of those who have freight to ship, or, at the least, of sagacious and 
 patriotic citizens. If the inquiry of the Commission has done nothing 
 else, it has in any event proved beyond the shadow of a doubt that 
 public opinion will loyally and even eagerly sustain Congress in any 
 frank, equitable, and effective measure that may be adopted for the 
 restoration of the carrying trade and the expansion of our ocean 
 commerce. 
 
 A QUESTION OF MORE TRADE. 
 
 Thoughtful men throughout the entire country have now come to 
 see that the question is not merely one of building ships or manning 
 ships, important though that may be to large seaboard communities. 
 Nor is the question, further, one solely of the national defense, though 
 that of itself would abundantly justify Congressional action. A third 
 imperative motive for the creation of an adequate merchant marine is 
 the need of new and wider markets. Without these, there is such a 
 thing as smothering at home in our own prosperity. 
 
 There is one sure way in which these new and wider markets can be 
 gained. Our own people — merchants, manufacturers, bankers, ship- 
 owners, working heartily together — must go and get them. We can 
 not depend upon the foreigners for this — not on the foreign shipowner 
 more than on the foreign manufacturer or merchant. When the mar- 
 ket is once opened, the foreign ship may take our goods for a consid- 
 eration, which in the long run is sure to be higher than the price 
 granted to the foreign manufacturer. 
 
 NO MERCHANT WOULD DO THIS. 
 
 There is not a department store in Omaha or Waco which would 
 dream of intrusting to a rival department store across the street the 
 delivery of its own goods to its own customers. The heads of the two 
 establishments might be tolerably good friends, but merchant No. 1 
 would instinctively assume that, human nature being as it is, mer- 
 chant No. 2 would keep his good horses and sound wagons for his own 
 use, and quietly run in his spavined steeds and worn-out vehicles to 
 convey the goods of his competitor. And pretty soon merchant No. 
 1 would expect to have complaints of short weight or damaged articles, 
 or perhaps that the purchases were missing altogether. And then 
 he would begin to see those who were once his customers transferring 
 their business to his rival — so that that ' ' cheap " foreign service would 
 have proved a dear service after all. 
 
 This is precisely what is happening to-day in South America. The 
 United States sends no marine delivery wagons of its own to Brazil 
 or _ Argentina. Even the American mails must cross the Atlantic 
 twice on the subsidized liners of England. The result is the inevi- 
 table one, testified to before the Commission by the manufacturers of 
 Cleveland and Milwaukee, that they find it hard to get into the South 
 American market and harder still to stay there — that they can ne\-er 
 depend upon the starting of English and German vessels from New 
 York, and that there is much breakage as well as miscarriage of Ameri- 
 can goods, confusion, and disappointment. Nor need there be any sur- 
 prise about this. The English and German shipowners naturally keep 
 their best craft for their own country's trade and use their inferior 
 ones for the American. And the result is just what was intended by 
 
REPORT OF AMERICAN MERCHANT MARINE COMMISSION. V 
 
 • 
 
 our foreign competitors, that Brazil goes by our door and buys of 
 England and German}-. 
 
 The United States sent $13,000,000 worth of merchandise to Brazil 
 in 1894 and only $10,000,000 in 1903. Yet, having plenty of delivery 
 wagons of its own by sea and rail to Canada and Mexico, our country 
 has increased its exports to Canada from 151,000,000 in 1894 to 
 S116,000,000 in 1903, and to Mexico from $12,000,000 in 1894 to 
 $41,000,000 in 1903. The contrast is eloquent. There is no need 
 to look further for an explanation why European shipowners, leagued 
 with European manufacturers, are so insistent that the United States 
 should not go to the expense and trouble of providing transportation 
 facilities of its own in the trade to South America, Africa, and the 
 Orient. 
 
 OUH TRIBUTE TO FOREIGNERS. 
 
 It is a fair, accepted estimate, based on Sir Robert Giffen's figures 
 for British ocean trade, that there is now being paid on the aver- 
 age the enormous sum of $150,000,000 a year to foreign shipping 
 for the conveyance of our import and export freights, our mails, and 
 our passengers. Only 10 per cent of our vast sea-borne commerce is 
 now carried by American ships. In 1810 the American proportion 
 was 91 per cent: as late as 1861 it was 65 per cent. We ought again 
 to be conveying at least two-thirds of our commerce beneath our own 
 flag; our right to this share is impregnable. 
 
 An adequate American ocean fleet would mean the saving to this 
 country of §100,000,000 a year which now goes to build up the com- 
 mercial power and naval strength of Europe and Asia. For a time 
 it is true that the development of such a fleet would cost something, 
 but all our economic experience goes to show that this increased 
 expense would be temporary, while the saving would be solid and per- 
 manent. American bridge makers and locomotive builders could not 
 compete with Europe in price in the early days of their industry, but 
 now that they have developed standard t3-pes and attained a huge scale 
 of constant production, American bridge makers and locomotive build 
 ers, still paying good American wages, are able to meet their foreign 
 competitors in cost and beat them in the excellence and adaptability of 
 their product. And what is a steamship but a locomotive and a steel 
 bridge wrought together? 
 
 A hundred million dollars a year, the amount that would eventually be 
 saved to the American people if their ocean shipping were developed as 
 their locomotive making and bridge making have been, is equivalent to 
 the entire cost of our splendid Navy, or of our reorganized and strength- 
 ened Army, including the coast defenses. It is equivalent to four times 
 the annual interest on the National debt. It would furnish employ- 
 ment to tens of thousands of American workmen, and comfort to their 
 families, in the processes of ship construction and maintenance, from 
 the forest and mine to the rolling mill, forge, and shipyard. 
 
 FOREIGN IN EVERYTHING. 
 
 The foreign ships which now convey nine-tenths of our ocean com- 
 merce are invariabl}' built abroad, officered abroad, manned abroad, 
 repaired abroad. If they can possibly help it, they never use a pound 
 
Vi EEPOBT OF AMEKIOAN MERCHANT MABINE COMMISsioit. 
 
 of American matei'ial, except coal, or yield so much as a dime to Amer- 
 ican labor, beyond the stevedores. The managers of these foreign 
 steamship companies are, as a rule, aliens sent over to the United 
 States. The very clerks in their offices are, as far as can be, brought 
 from Europe. These foreign steamship agencies are virtually little 
 European colonies on American soil; their fixed determination seems 
 to be to exclude Americans by birth from all share or knowledge of 
 the ocean shipping business. 
 
 It has been testified before the Commission that not only do foreign 
 ships, sent over here to engage exclusively in American commerce, 
 bring officers and crews under long contract from home, and return 
 home for all important repairs, but that many actually refuse to pur- 
 chase food and other supplies here in the best and cheapest market. 
 These vessels arrive loaded with home provisions and other material that 
 are placed in bonded stores here and withdrawn from time to time as 
 they are needed, so that so far as possible not one penny of money earned 
 by these foreign ships in American trade shall return to the channels 
 of American commerce. 
 
 PAEALYSIS OF OCEAN SHIPBUILDING. 
 
 This policy of rigid, aggressive favoritism, practiced by foreign 
 shipowners without resistance from the United States, has now wrought 
 its desired and logical result. It has absolutely killed the ocean ship- 
 building of America. The Commissioner of Navigation notes in his 
 present annual report that last year for the first time in our history 
 no square-rigged vessel for the deep-sea trade was launched on either 
 the Atlantic or Pacific coastline, and that only one steamer for the 
 foreign trade remained under construction in any American shipyard. 
 Our shipyards, by the way, have not received an order for a steamship 
 exclusively for foreign commerce since June, 1901. 
 
 The condition of the remnant of the ocean fleet of the United States 
 is, therefore, absolutely desperate. With no new ships whatever 
 being built, and with existing vessels succumbing to age or casualties 
 of the sea, a swift and appalling shrinkage in our skeleton fleet is 
 inevitable next year and the years beyond unless some vigorous meas- 
 ure of relief is immediately adopted. The disappearance of our ships 
 is reflected at once in the depression and disaster that crowd upon our 
 shipyards. But for naval work and coastwise tonnage, always inade- 
 quate to fill the yards, there is not a steel shipyard in the United States 
 that would now be earning enough money to pay its office force, and 
 it has been testified before the Commission that nearly one-half of the 
 skilled American shipyard workmen are now idle or engaged in the 
 roughest and cheapest of manual labor. 
 
 OUB NATIONAL HUMILIATION. 
 
 Here is a condition on which no American worthy of the name can 
 look without a smarting sense of humiliation. We have deepened our 
 harbors at an expense of millions upon millions of dollars, almost 
 exclusively for the use of foreign steamships. We are building 
 the Panama Canal through which very few American steamships wiU 
 pass unless our merchant marine is rehabilitated. We have built a 
 strong navy, in large part to protect our commerce, which is vanishing 
 
REPORT OF AMERICAN MEROHAiTT MARIKE OOMMISSiON. Vll 
 
 from the ocean. Our war fleets in the Mediterranean and South 
 American waters scarcely see a United States merchant flag from one 
 year to another, and our battle ships, cruisers, and gunboats on the 
 Asiatic station outnumber four-fold the merchant steamers that regu- 
 larly ply from the United States to Eastern ports. Our sea power, in 
 the important point of a merchant reserve of ships and sailors, is as 
 empty as Russia's naval might has proved to be in the war with vigi- 
 lant and prepared Japan. Though proud of the greatest of naval his- 
 torians, the United States has until now disregarded his admonitions, 
 which for half a dozen years have been heeded in Tokyo while seem- 
 ingly forgotten in Washington. Says Captain Mahan: 
 
 When the day comes that shipping again pays, when the three sea frontiers find 
 that they are iiot only militarily weak, but poorer for lack of national shipping, their 
 united efforts may avail to lay again the foundations of our sea power. Till then, 
 those who follow the Umitations which lack of sea power placed upon the career of 
 France may mourn that their own country is being led, by a like redundancy of home 
 wealth, into the same neglect of that great instrument. (The Influence of Sea Power 
 upon History, Period 1660-1783, p. 39. ) 
 
 HANDICAPS ON OUR SHIPPING. 
 
 Though the Commission in its inquiry throughout the country has 
 asked for specific suggestions of remedial legislation for the future 
 rather than explanations of the past, yet the causes that have brought 
 the decline of our merchant shipping have not been neglected at the 
 hearings throughout the United States. One, and a prime cause, is 
 clearly stated by the President of the United States in his annual mes- 
 sage to Congress in 1901: 
 
 All our ships, sailing vessels and steamers alike, cargo carriers of slow speed and 
 mail carriers of high speed, have to meet the fact that the original cost of building 
 American ships is greater than is the case abroad; that the wages paid American 
 oflBcers and seamen are very much higher than those paid the officers and seamen 
 of foreign competing countries; and that the standard of living on our ships is far 
 superior to the standard of living on the ships of our commercial rivals. Our Gov- 
 ernment should take such action as will remedy these inequalities. The American 
 merchant marine should be restored to the ocean. 
 
 These superior wages and superior conditions are undeniably a great 
 obstacle now to the growth of our merchant fleet, just as at first 
 they were an obstacle to the growth of our manufacturing. Yet Ameri- 
 can enterprise and determination, long encouraged by the National 
 Government, have finally triumphed over these early disadvantages. 
 Evidence before the Commission, notably in the important hearing of 
 November 19, 1904, at Newport News, shows that wages in American 
 shipyards, are from 50 to 100 per cent above wages of similar labor in 
 Europe. Yet the American-built ship does not always cost 50 or 100 
 per cent more than the foreign ship. Indeed, such a wide difference as 
 60 per cent is temporary and exceptional. There seems to be no doubt 
 that even in the present difficult stage of the industry both the labor 
 and the administration in American shipyards are more efficient than 
 in foreign shipyards, though this superiority is far from bridging the 
 entire difference in cost. 
 
 AN AVERAGE OF FORTY PER CENT. 
 
 Mr. p. A. S. Franklin, of New York, vice-president of the Inter- 
 national Mercantile Marine Company, which has had the largest 
 
VIII EEPORT OF AMERICAN MEBCHANT MARINE COMMISSION. 
 
 experience in ownership under both American and foreign Af S'^^.^^^^T 
 mates that an American-built steamship, suitable for ^^® f:".'^ 
 Atlantic trade, would cost about 40 per cent more than ^ ^"7 
 built steamship. This is a formidable difference m a l^utju-i"" 
 steamer costing upward of two million dollars. Indeed it happens 
 thatiustat present there prevails in England the period of dullness 
 which alternates with activity in shipbuilding, as in every otber 
 industry the world over. To keep their machinery in use and their 
 workmen together, British builders have recently bid for new con- 
 struction at unprecedently low rates, which mean, probably, a loss and 
 certainly no profit. Some of these British "pamc" bids have been 
 but about one-half of what an American yard, figuring tor a small 
 profit, has a.sked for a similar vessel. ,, tt •. 1 o. . 
 
 If the normal range of ship cost between the United btates and 
 Great Britain were as wide as this, the problem of creating an 
 American-built merchant fleet for ocean trade would manifestly be 
 almost hopeless. But such a difference is not normal; it is temporary; 
 indeed, it is even now passing away. Recent actual bids of American, 
 British, and German yards for typical North Atlantic steamships, 
 which have been communicated to the Commission, show an American 
 excess of cost of about 47 and 37 per cent — the German figure being, 
 significantly, the lowest. In the hearing at Baltimore, May 28, 1904, 
 Mr. F. W. Wood, president of the Maryland Steel Company, testified 
 that once, bidding against a north of England firm for some cargo 
 steamships, he came within 15 per cent of the English figures — but 
 this, as indeed Mr. Wood said, was also exceptional. He placed the 
 average difference in cost between American and British ships under 
 present conditions at from 30 to 50 per cent. 
 
 AS TO COST OF MATERIAL. 
 
 In this connection there arises a factor in the present cost of Ameri- 
 can ships which the Commission has no desire to overlook. It calls for 
 some plain speaking. The tariff laws of the United States now, as for 
 more than a decade past, allow the free importation of all materials 
 to be used in building or repairing an American ship for the foreign 
 trade or building for foreign ownership. This authority is found in 
 sections 12 and 13 of the free list of the Dingley law, as follows: 
 
 Sec. 12. That all materials of foreign production which may be necessary for the 
 construction of vessels built in the United States for foreign account and ownership, 
 or for the purpose of being employed in the foreign trade, including the trade between 
 the Atlantic and Pacific ports of the United States, and all such materials necessary 
 for the building of their machinery, and all articles necessary for their outfit and 
 equipment, may be imported in bond under such regulations as the Secretary of the 
 Treasury may prescribe; and upon proof that such materials have been used for such 
 purjposes no duties shall be paid thereon. But vessels receiving the benefit of this 
 section shall not be allowed to engage in the coastwise trade of the United States 
 more than two months in any one year except upon the payment to the United States 
 of the duties of which a rebate is herein allowed: Provided, That vessels built in 
 the United States for foreign account and ownership shall not be allowed to enease 
 in the coastwise trade of the United States. ^^ 
 
 Sec. 13. That all articles of foreign production needed for the repair of American 
 vessels engaged in foreign trade, including the trade between the Atlantic and Pnoifip 
 ports of the United States, may be withdrawn from bonded warehouses free of Hntv 
 under such regulations as the Secretary of the Treasury may prescribe uuiy, 
 
EEPORT OF AMERICAN MERCHANT MARINE COMMISSION. IX 
 
 The scope of these provisions is very broad — all materials for the 
 construction of the hull and machinery, and, besides, all necessary arti- 
 cles of equipment. But vessels thus constructed can not engage in 
 the coastwise trade for more than two months in anj^ one year, 
 except the long-voyage trade between the Atlantic and Pacific sea- 
 boards. No American shipowner under present conditions builds a 
 deep-sea ship, even though she be designed primarily for foreign com- 
 merce, without consi(Jering that he may be glad some day to fall back 
 on the coastwise trade, now extended to Hawaii and Porto Rico and 
 soon to include the Philippines. Therefore this apparently liberal 
 privilege of free materials has not checked the decline of American 
 ocean snipbuilding, and has been availed of for the complete construc- 
 tion of onlj' one large steel ship, the Di/rigo, built by Arthur Sewall 
 &Co., at Bath, Me. 
 
 The Messrs. Sewall say that the peculiar status of the Dingo is the 
 cause of frequent anxiety to them, for if the vessel were to be for 
 more than two months on the voyage from Puget Sound to Hawaii, 
 the duties would have to be paid on the foreign plates, angles, and 
 beams, of which she is constructed. Small amounts of foreign steel 
 are occasionally imported for ship use, but the whole quantity is 
 inconsiderable, and though the Sewall j^ard has built several steel 
 ships since the Dirigo^ it has never again invoked the free-list privi- 
 lege. 
 
 AN INJUSTICE TO OUR BUILDERS. 
 
 American ships continue to be constructed of domestic steel, even 
 when designed for foreign service. This fact lends large importance 
 to certain testimony which appeared most explicitly in the hearing of 
 June 28, 1904, at Cleveland, though the fact had been alluded to else- 
 where. Mr. James C. Wallace, then vice-president, now president, 
 of the American Shipbuilding Company, said: 
 
 Recently one of our largest steel mills sold abroad 100,000 tons of steel plate. They 
 delivered it, I understand, at Belfast, at $24 a ton. That would practically mean, with 
 ocean rates as they are, $22 a ton at tide water. They are charging us to-day, at 
 Pittsburg, $32 a ton. A differential of $10 in a ship carrying 5,000 tons is $50,000. 
 That is the shipbuilder's profit. 
 
 And again in reply to questions: 
 
 Representative Grosvenok. I want to know who bought the steel you speak of? 
 Mr. Wallace. The Harland & Wolff Company, Belfast. 
 Representative Geosvenor. From whom did they buy it? 
 Mr. Wallace. The United States Steel Corporation. 
 Representative Grosvenoe. Do you know where it was shipped from? 
 Mr. Wallace. I do not. I presume from the Carnegie Steel Company. I do no 
 know that, though, for a fact, as they have so many mills. 
 Representative Geosvenoe. And their present price to you is $32? 
 Mr. Wallace. Thirty-two dollars a ton, Pittsburg. 
 Representative Geosvenoe. And that was laid down at Belfast at $22? 
 Mr. Wallace. Twenty-four dollars. 
 
 Whatever may be said for the occasional sale abroad of surplus 
 manufactures below the domestic price, this, manifestly, is a case for 
 which the familiar defense is quite impossible. American shipbuild- 
 ing is terribly depressed; it is essentially an unprotected industry in 
 the foreign trade, and when American steel mills, long and amply 
 protected, sell material to foreign shipyards at eight or ten dollars 
 
X REPORT OV AMERICAN MERCHANT MARINE COMMISSION. 
 
 below the price asked from American yards, these steel mills simply 
 heap an unjust and intolerable burden upon an interest now well-nigh 
 prostrate. 
 
 A sense of fair play, or even cool business prudence, should make 
 it manifest to the steel companies that they ought to do their utmost 
 to encourage the struggling American shipyards. For, after all, the 
 best and permanent market for American ship steel must be in this 
 country and not in Europe. , 
 
 AN EXTENSION OF THE LAW. 
 
 In view of these circumstances, the Commission recommends that 
 the law be so changed that the period during which ships built of free 
 materials are allowed to run in the coast trade be extended from two 
 months to six months; and also that the privilege of all-the-year- round 
 service now granted in the Atlantic-Pacific trade be extended to the 
 trade with the Philippines, which, on July 1, 1906, comes under the 
 coastwise laws and regulations. This especial treatment of ship 
 material can, we believe, be justified by the peculiar importance of 
 ocean shipping in the promotion of our commerce and the national 
 defense, and also by the fact that this ocean shipping has remained so 
 long an almost forgotten and unprotected industry. 
 
 But it must not be hastily assumed that even the absolutely free 
 importation of materials will of itself immediately reduce the cost of 
 American ships to the foreign figure. After all, the steel materials, 
 while a large are not the dominant factor in the cost of ship construc- 
 tion. For example, an 8,000-ton ship would require about 3,500 tons 
 of steel. Reducing the cost of all that material $8 a ton would reduce 
 the cost of the completed ship $28,000. But an 8,000-ton ship which 
 costs $450,000 in the United States can be built for from |100,000 to 
 $150,000 less in England. The real dominant factor is thus not the 
 price of materials, but the high wages of the skilled American work- 
 men who fashion the plates and beams into the finished ship. 
 
 A SPECIFIC EXAMPLE. 
 
 Convincing proof on this point was ofl'ered in 1900, when steel plates 
 and beams, because of labor troubles abroad, were selling at $40.86 in 
 England, and $28 in the United States. Boston shipowners at that 
 time invited bids from an American and a British builder for a cargo 
 steamship of about 5,000 tons capacity. With both yards figuring for 
 a small competitive profit, the American estimate was $275,000 and 
 the English $214,000. The material of the American ship would have 
 cost $63,000; of the English ship, $80,000. But this difference was 
 more than offset by the higher wages paid to the American shipyard 
 mechanics. 
 
 However, the .narrowing of the difference of shipyard labor cost 
 that will come with increased experience, improved standardizing and 
 constant production, as it has come already in the bridge and locomo- 
 tive works, makes the reduced cost of materials a factor of undeniable 
 importance. 
 
 HIGHER SHIPBOARD WAGES. 
 
 But higher cost of construction, chiefly because of the higher range 
 of shipyard wages, is only one of the present handicaps on American 
 shipping in over-seas trade. There is also the higher range of wages 
 
BEPOBT OV AMEBIOAN MERCHANT MARINE COMMISSION. XI 
 
 of oj05cers and crew, and the higher cost, because more liberal variety 
 and (juantity, of food on shipboard. The laws of the United States 
 require a scale of provisions the most generous in the world, and if 
 the Government scale is waived, as it may be by mutual agreement of 
 master and men, equally good food must be substituted. This, of 
 course, is all as it should be, and must be in America, but wages and 
 maintenance are unquestionably a present factor to prevent American 
 ships from launching out into general and successful competition with 
 foreign flags. 
 
 The difference in wages and in style of living is not greater between 
 an American and a foreign ship than between an American and a for- 
 eign factory. But the higher wages of the American factory, and the 
 superior comforts required by its work people are, and long have 
 been, protected by tariff laws against the cheaper wages and the lower 
 standards of foreign lands. Here is the real heart of this whole ques- 
 tion of the American merchant marine. 
 
 THE ONE UNPROTECTED INDUSTRY. 
 
 » American shipping in the foreign trade has been for forty or fifty 
 years the only American industry exposed directly to foreign com- 
 petition that has not been protected by the Government. There is no 
 need to look beyond this one sentence for an explanation of the hard 
 fact that this is the one American industry that has halted and shrunk 
 while all others have made prodigious increase. And yet this industry 
 was once almost the mightiest in America. -The American merchant 
 fleet from 1800 to 1860 was the second in size and the most enterprising, 
 eflScient, and profitable in existence. But throughout most of that 
 time it was a protected industry — protected at first by discriminating 
 duties and tonnage taxes, which were not completely removed against 
 our most formidable rival until 1849; protected later by the California 
 gold discovery and the Crimean war. When these factors lost their 
 power, as they did in 1855-56, there came the sharpest and most sig- 
 nificant decline that American shipbuilding has ever suffered in the 
 half decade from 1855 to 1860. ' 
 
 When new and vigorous protection was applied by the National 
 legislation of 1861 and the subsequent years to American manufactur- 
 ing and land industries in general, the toilers of the sea, the enterprise 
 of our ocean merchants, were unconscionably forgotten by the National 
 Government. 
 
 HEAVILY BURDENED. 
 
 Not only were the shipowners and seamen forgotten in their bold 
 and hazardous industry, but heavy burdens were heaped upon them in 
 the war taxes, for which manufacturers gained compensation in the 
 protective tariff. The heavy blow struck by the war itself at our 
 merchant shipping is, of course, historic, but there were economic dis- 
 advantages scarcely less severe and more protracted. The American 
 shipowner who built a ship in the United States between 1865 and 1870 
 was in a position analagous to that of a manufacturer compelled to pay 
 heavy duties on his machinery and his materials, and yet absolutely 
 denied protection on the finished product of his industry. This fin- 
 ished product of the shipowner was his service, his transportation. 
 It is a vivid proof of the incomparable American genius for the sea 
 
XII KEPOET OF AMERICAN MERCHANT MARINE COMMISSION. 
 
 and its affairs that several hundred thousand tons of American shipping 
 have survived until to-day an economic blunder that would nave long 
 since driven a manufacturing industry to utter bankruptcy ana ais- 
 solution. 
 
 A FLOATING FAOTORT. 
 
 The American merchant .ship is essentially a floating factory.^ It is 
 built and maintained at the American wage rate; but there is this vital 
 difference, that, while land factories are covered by national protection 
 averaging almost 50 per cent, these floating factories the few that are 
 left work up and down the ocean without any protection whatever 
 save that granted to a few steam lines by the postal subventions of 
 
 the law of 1891. ,, • i i . .. 
 
 These American ships, it is true, can secure their labor where they 
 will. Our navigation laws, almost the laxest in the world in this 
 respect, merely require that, except on mail ships only, the captain 
 and the officers of deck and engine room need be American citizens. 
 But because an American ship fits out and begins her voyage in the 
 United States she naturally secures her crew there, and pays the high 
 wages of her flag and port. Her foreign competitors, on the other hand, >■ 
 tit out and secure their crews at their home ports, where wages are 
 adjusted to local conditions, and supply here only the waste of casualty 
 or desertion. 
 
 The handicap of wages against the American ship, as the testimony 
 before the commission demonstrates, ranges from 30 to 60 per cent, 
 except on the Pacific, wh'ere rates for white crews in the coast trade 
 are almost the highest in the world, and regular American liners to 
 the Orient employ Asiatic seamen and firemen. 
 
 The American sailor, native or naturalized, an able-bodied, hardy, 
 courageous man of peculiar value in the stress of war, would seem to 
 be at least equally as deserving of the consideration of his Govern- 
 ment as the worker in a cotton factory, and it is not apparent why a 
 tin-plate rolling or dipping mill should be more important to the 
 United States than a great shipyard .equipped to build not only mer- 
 chantmen, but battle ships and cruisers. 
 
 THE CASE OF THE SEAMEN. 
 
 One essential clause of the bill creating the Merchant Marine Com- 
 mission directed it to ascertain "what change or changes, if any, 
 should be made in existing laws relating to me treatment, comfort, 
 and safety of seamen, in order to make more attractive the seafaring 
 calling in the American merchant service." Without this a merchant- 
 marine inquiry would, of course, be incomplete, for, as a sailor-author 
 has well said, there can be no upbuilding of American shipping which 
 neglects the personal equation. After all, it is the oflicers, the men, 
 and the boys that make up the soul of the ship, which is so much 
 inanimate wood or steel without them. 
 
 Authorized representatives of the seamen have been heard by the 
 Commission on the Atlantic, the Pacific, and the Gulf of Mexico. 
 They ha\'o had a conspicuous part in almost every meeting, and their 
 evidence is fully set forth in the published volumes. As a rule this 
 testimony is to the effect that general conditions of life in the Ameri 
 
BEPOBT OF AMEBICAN MERCHANT MARINE COMMISSION. XIII 
 
 can merchant marine — wages, food, quarters, etc. — are superior to 
 those in foreign services, but that the ^scipline is often more exacting 
 and the work more arduous. These seamen witnesses frankly acknowH 
 edge the beneficial effect of legislation enacted in recent years by Con- 
 gress, but they ask for further measures of relief. The Commission 
 would, therefore, commend to the friendly attention of the proper 
 committees of the Senate and the House of Representatives requests 
 oflfered by the sailors as to the load-line law, the adequate manning of 
 seagoing ships, imprisonment for desertion in foreign ports, and cer- 
 tain standard qualifications of seamen. 
 
 It will readily be recognized by Congress and the country that it is not 
 enough that American seamen should be merely on a parity in wages, 
 treatment, and comfort with foreign seamen. That will not suffice to 
 draw American boys in any considerable numbers into our merchant 
 fleet. The conditions of life in American shipping ought to be not only 
 as good as, but distinctly better than, in foreign shipping. They are 
 better already in most respects; that is unquestioned. But they ought 
 to be made better in all respects. 
 
 And above all, there must be a constantly increasing number and 
 tonnage of American ships, for American boys of the right kind will 
 not go to sea or into any other calling that is lagging and unprosper- 
 ous. They will enter no profession that does not offer an opportunity 
 to get ahead. There was a time, not so very remote, when American 
 boys by the hundreds, from high schools and sometimes from colleges, 
 were every year entering cheerfully on the hardships and perils of a 
 sea life, because it was, as it still is, a brave and adventurous life, irre- 
 sistibly appealing to their manhood, and because beyond the forecastle 
 they saw pi'ospects of profit and command. When America again has 
 her ships on every sea the boys will be forthcoming. All they ask is 
 a square deal and a fair chance of advancement. 
 
 FOREIGN SUBSIDIES AND BOUNTIES. 
 
 Beyond the lower first cost of foreign ships and the lower cost of 
 maintenance of these ships — due in both cases primarily to lower 
 wages — there is a third serious handicap upon American shipping in 
 the subsidies and bounties bestowed upon a part or all of the merchant 
 fleets of foreign governments. These subsidies and bounties, as com-' 
 piled from the report of the Commissioner of Navigation for 1901, are 
 as follows: 
 
 Country. 
 
 Mall. 
 
 General. 
 
 Total. 
 
 Austria-Hungary . 
 
 Denmark 
 
 Prance 
 
 Germany 
 
 Great Britain 
 
 Italy 
 
 Japan 
 
 Netherlands 
 
 Norway 
 
 Portugal 
 
 Bussia 
 
 Spain 
 
 Sweden 
 
 81,288,201 
 
 82, 465 
 
 5,019,708 
 
 1, 825, 651 
 
 a 4, 874, 243 
 
 1, 757, 812 
 
 2,865,831 
 
 367, 468 
 
 48,338 
 
 63, 300 
 
 $656, 270 
 "3,"623,'726' 
 
 '662, 369 
 
 1,061,639 
 
 76,465 
 
 1, 629, 927 
 81,849 
 
 89,218 
 'i,'695,'76i' 
 
 Total. 
 
 19,904,778 
 
 7,766,382 
 
 $1,944,471 
 
 82,465 
 
 8,643,423 
 
 1,825,651 
 
 5,636,612 
 
 2,819,451 
 
 2,942,296 
 
 367,468 
 
 137, 656 
 
 63,300 
 
 1,595,701 
 
 1,629,927 
 
 81,849 
 
 87, 670, 160 
 
 oNew Cunard subsiay of $l,loo, 000 not inoluded. 
 
XIV KEPOKT OP AMEEIOAN MBKCHANT MARINE COMMISSION. 
 
 The maritime policies of the foreign nations may be thus sum- 
 marized: 
 
 Great Britain pays generous mail subsidies to her chief steamship 
 lines, admiralty subsidies to her fastest vessels, and retainer bounties 
 to many thousands of her seamen. 
 
 Germany bestows liberal mail subsidies upon several steamship lines, 
 especially those of recent development, and encourages her shipyards 
 by hauling material at nominal cost on the State railways — in effect a 
 bounty to shipbuilding. German shipyards are further aided by the 
 requirement that mail steamers of the Imperial lines shall be con- 
 structed in Germany by German workmen. Moreover, the State 
 railways grant preferential rates to goods intended for export by the 
 Imperial lines — in effect a bounty on navigation. It is stated by 
 British steamship managers that the passage through Germany of emi- 
 grants from other countries bound overseas is obstructed in every 
 possible way unless they hold tickets by German steamers. Finally, 
 the German Government, or individuals composing it, are understood 
 to be interested in the great German shipyards and steamship com- 
 panies, so that there is virtually a close partnership between these 
 enterprises and the Empire, and the German people regard their mer- 
 chant marine with the same intense patriotic devotion as their navy. 
 
 France gives mail subventions to her great steamship lines, con- 
 struction bounties to her shipyards, and navigation bounties to all 
 French shipping, steam or sail, engaged in overseas commerce. 
 
 Italy grants mail subventions, construction bounties, and navigation 
 bounties to all her ocean vessels, steam or sail. 
 
 Austria-Hungary gives constraction bounties, and mail and naviga- 
 tion subsidies to her ocean fleet. 
 
 Holland grants subventions to her colonial mail service. 
 _ Spain grants subventions and other privileges to her ocean mail 
 lines. 
 
 Russia bestows encouragement through subsidy on a part of her 
 merchant shipping, this going chiefly to one concern, the so-called 
 "volunteer fleet," really controlled by the government. 
 
 Denmark gives modest mail subsidies to her few lines, including a 
 West India service. 
 
 Sweden grants mail subsidies, and in addition lends government 
 money to shipowners to aid them to buy new vessels and enter ocean 
 trade. 
 
 Norway gives direct bounties to encourage native shipbuilding and 
 also grants mail subsidies, which have checked the growth of British 
 shipping in certain trades of north Europe. 
 
 Japan has a most comprehensive system of national aid to ship- 
 ping—bounties to shipyards, subsidies to mail lines, bounties upon 
 navigation. Japan's ocean fleet has increased more rapidly of late 
 years than any other shipping in the world. 
 
 China, at present, gives very little help to her maritime interests, 
 to the encouragement of her shipyards and steam lines, or to the 
 development of seamen. Her policy of laissez faire in overseas navi- 
 gation bears the closest resemblance to that of the United States and 
 IS naturally attended with the same consequences. Chinese ocean ton- 
 nage IS inconsiderable. According to the Bureau Veritas, it is less 
 than 60,000 tons, steam and sail both included. 
 
BEPORT OF AMERICAN MERCHANT MARINE COMMISSION. XV 
 A WORLD-WIDE PRACTICE. 
 
 To sum up, therefore, it may be said that every nation possessing a 
 deep-sea merchant fleet of any real importance encourages and supports 
 this interest to the degree and in the way which its judgment approves 
 or its national resources make possible. The most frequent form of 
 this national assistance is the mail subvention to regular lines. Great 
 Britain is the pioneer and chief exemplar in the policy of mail subven- 
 tions. She began this practice on a large scale with the Cunard Line 
 in 1839-40, and since then has expended between two hundred and 
 fifty and three hundred million dollars in creating and sustaining her 
 mail lines to every great poit and market on this planet. 
 
 It is sometimes urged by those who desire to believe that a consist- 
 ent free-trade policy has been maintained by the British Government 
 that these enormous British subventions were bestowed merely to carry 
 the colonial mails, with no purpose whatever to encourage British ocean 
 trade or navigation. But that this academic view is wholly superficial 
 and untenable is demonstrated by the British Government itself. A 
 report of the Parliamentary committee on contract packets in 1853 on 
 the Cunard and other subsidies thus speaks with authority as to the 
 actual purpose of these generous subventions: 
 
 The objects which appear to have led to the formation of these contracts, and to 
 the larger expenditures involved, were to afford us rapid, frequent, and punctual 
 communications with distant ports which feed the main arteries of British com- 
 merce, and with the most important of our foreign possessions, to foster maritime 
 enterprise and to encourage the production of a superior claas of vessels, which would 
 promote the convenience and wealth of the country in time of peace and assist in 
 defending its shores against hostile aggression. 
 
 TO NON-BRITISH PORTS. 
 
 Indeed, some of the heaviest British expenditures were not in the 
 colonial service at all, but for lines not only to the United States, but 
 to Colon, Brazil, and Argentina — in other words, to absolutely foreign 
 lands. At least one of the British subsidized companies — the Pacific 
 Steam Navigation — touched at no British port, but traversed the west 
 coast of South America. Lindsay, the historian of British shipping, 
 says of this enterprise, that was established by an American merchant 
 who first sought aid unsuccessfully at Washington : 
 
 The extension of British influence and British commerce was doubtless the chief 
 inducement for supporting this communication between the Republics of New G ra- 
 nada, Bolivia, Peru, and Chile, the nature and extent of that traffic rendering it 
 necessary for the English to maintain mercantile establishments in the chief ports 
 and towns of the western coast of the Pacific, and thus justifying the Government in 
 incurring this expense. (W. S. Lindsay, History of Merchant Shipping, Vol. IV, 
 p. 317.) 
 
 RECENT BRITISH SUBVENTIONS. 
 
 This fixed British practice of creating, by generous subvention, 
 steamship lines "for the extension of British influence and British 
 commerce" continues to the present time. The new Cunard contract, 
 involving the virtual gift of two great steamers with a subvention of 
 f 1,100,000 a year, is a recent case in point. Another is the grant of 
 a $200,000 subvention for a new li-knot steam line to the West Indies. 
 And still another — a little earlier — is the subvention of $291,000 to a 
 British line of three ships for a service from Vancouver, British 
 3a— 04 n 
 
XVI RBPOET OP AMEBIOAN MERCHANT MARINE COMMISSION. 
 
 Columbia, across the North Pacific to Japan and China — "a notable 
 illustration of the generosity and courage with which England pushes 
 her shipping interest," wrote the late Hon. William C. Whitney in 
 his annual report as Secretary of the Navy. "Under such competi- 
 tion," Mr. Whitney added, "it is quite easy to conjecture what will 
 become of the American flag and our resources in the way of a naval 
 reserve in the North Pacific." 
 
 A HOPELESS COMPETITION. 
 
 Close alongside these heavily subsidized British steamers, out of the 
 American ports of Tacoma and Seattle, a few miles southwa,rd, now 
 run two large and three smaller American steamships, competing with 
 the British line for freight and passenger traffic to and from the 
 Orient. These American steamers received last year for carrying the 
 United States mails the munificent sum of $4,935. Close alongside 
 the American steamers, right out of Puget Sound, runs a Japanese 
 line, the Nippon Yusen Kaisha, which receives an annual subsidy of 
 1330,000 from the Japanese Government, and was given last year 
 $4,857 for carrying the United States mails. 
 
 Again to quote Mr. Whitney, "Under such competition it is quite 
 easy to conjecture what will become of the American flag and our 
 resources in the way of a naval reserve in the North Pacific." Mr. 
 Alfred Winsor, president of the Boston Steamship Company, oper- 
 ating these American steamers, has given frank notice to a committee 
 of Congress that unless some national aid equivalent to that of his 
 foreign competitors is speedily bestowed he must haul down his flag 
 and quit the route — and in that case the farmers and millers and lum- 
 bermen of the Northwest will lose the service of the largest and most 
 efficient cargo carriers now running out of Puget Sound to the mar- 
 kets of the Orient. 
 
 STATE AID EVEKTWHEBB. 
 
 There is not an important commercial route anywhere on which the 
 remnant of our American ocean fleet does not meet the keen edge of 
 subsidized and bountied foreign competition. The five Pacific Mail 
 steamers from San Francisco to Asia, which received $63,902 last year 
 for carrying a great amount of United States mail, run directly side 
 by side, to and from the Orient, with a Japanese line of three steamers 
 that receive $600, 000 a year from the Japanese Government. Germany 
 pays $1,340,000 a year to the North German Lloyd for a steamship 
 service to the East Indies and Australia, and Great Britain pays 
 $1,660,000 to the Peninsular and Oriental. 
 
 Not only does this competition strike heavily at our unsubsidized 
 trans-Pacific lines, but it absolutely prevents the establishment of an 
 American East India service direct from the Atlantic coast via the 
 Suez Canal or the Cape of Good Hope. Oriental goods brought by 
 the subsidized British or German liners from the East are transferred 
 in England or Germany to ships of the same flags or lines for trans- 
 portation over the Atlantic. Thus the foreign subsidies that fifty 
 years ago drove our clippers from the seas now stand a barrier across 
 the course of American steamers. 
 
BEPOfiT OF AMEKIOAN MEKOHANT MABINE COMMISSION. XVtl 
 EVEN "tramps" included. 
 
 It may be said that British "'tramps" and German "tramps" 
 receive no subsidy, and that they are numerous. That is true, but 
 indirectly even the "tramps" are and have been sharers in the general 
 policy of national encouragement. The first British "tramps" years 
 ago were built in yards and engined by machine shops that had been 
 created and developed by the Parliamentary grant of subsidies to the 
 Cunard Line, the Peninsular and Oriental, and the Royal Mail. 
 These subsidies had an immediate and widespread effect upon the 
 entire art of steamship construction in Great Britain, and gave that 
 country at a critical stage an overwhelming advantage as against 
 America. 
 
 The same process is now under way in Germany. Yai'ds which 
 build the subsidized liners and have their materials delivered at nomi- 
 nal rates by Government railways are thereby powerfully encouraged 
 to build "tramps" or cargo boats in the intervals when no liners are 
 required. Moreover, the great foreign subsidized mail companies 
 own, besides the ships that earn their subsidy, a very large amount of 
 ordinary commercial tonnage which indirectly shares the benefit of 
 the subventions. Thus, when the $1,100,000 subvention was recently 
 awarded to the Cunard Line, that company was encouraged to construct 
 not only the two great 24-knot ships, but several auxiliary vessels of 
 moderate speed and heavy tonnage. 
 
 IN SHEER SELF-PROTECTION. 
 
 As to the French, the Italian, the Austrian, the Spanish, and the 
 Japanese vessels competing with our American ships, they are virtu- 
 ally all aided directly by their Governments, while Canada, with a 
 sharp eye to American trade, has lately subsidized steam lines of her 
 own to France, Africa, the West Indies, and, on both the Atlantic and 
 Pacific, to Mexico. Even were there no wage difference against us, 
 this now universal practice of State aid to shipping, in some form or 
 another, on the part 6f our competitors, would eventually drive the 
 American flag from the great trade routes of the ocean. To a very 
 large part of the foreign merchant navies the eloquent words of Sena- 
 tor James Ashton Bayard, of Delaware, uttered in 1852, apply as truly 
 now as they then did to the subsidized liners of England: 
 
 I am willing to trust American skill and industry in competition with any people 
 on the globe when they stand nation to nation without Government interference. 
 But if the treasury of a foreign nation is poured into the lap of individuals for the 
 purpose of destroying the interests of my country, or for building up a commercial 
 marine at the expense of the commerce and prosperity of the United States, I, for 
 one, will count no cost in counteracting such Government action on the part of Great 
 Britain or any foreign power. 
 
NEW LEGISLATION PROPOSED. 
 
 This consideration of the serious threefold disadvantages, which 
 American shipowners and seamen must now meet, brings us to the 
 definite, imperative question, What remedy does the Merchant Marme 
 Commission propose to Congress ? 
 
 Our answer is embodied, as the result of eight months of inquiry 
 and reflection, in the accompanying bill "To promote the national 
 defense, to create a force of naval volunteers, to establish American 
 ocean-mail lines to foreign markets, to promote commerce, and to pro- 
 vide revenue from tonnage." 
 
 For several years the Navy Department has been urging Congress 
 to authorize a naval reserve of professional officers and seamen of the 
 merchant service, who shall be in effect a militia of the sea, holding 
 the same relation to the Regular Navy that is held to the Regular 
 Army by the organized State militia and National Guard. 
 
 OUR NEED OF A REAL NAVAL RESERVE. 
 
 The United States is the only maritime power, except Russia, which 
 has not made provision for this essential factor of national defense. 
 There is, it is true, a naval militia now existing in a few States, but as 
 a rule it is composed of landsmen and is valuable in war only as an 
 auxiliary in coast and harbor protection, where its advantage is unques- 
 tioned. But a naval reserve in the true sense, composed of men habitu- 
 ated to the sea, trained in its difficult work and hardened to its perils, 
 has now virtually no existence in the United States, and nobody under- 
 stands this better than the good and loyal officers of the State forces, 
 especially those who, because of our sheer lack of such a reserve, were 
 hastily drawn into the naval service on converted yachts or tugboats, 
 or deep-sea cruisers, in the war with Spain. Not a few militia officers 
 and men had at that time their first experience out of sight of land, 
 and for the first time saw the sun go down behind an ocean horizon, 
 "off' soundings." 
 
 A DANGEROtrS NEGLECT. 
 
 There is, as has been said, one other maritime power besides the 
 United States that is destitute of a trained seafaring reserve, and is in 
 the same plight of fatuous unpreparedness. As a neutral observer, 
 quoted by Rear- Admiral Luce to the Commission, page 174:1, said of 
 the Russian Baltic squadron before it sailed away: 
 
 The units of the ships' companies are brave, but as a rule are wanting in the 
 hi^h-sea experience and the elasticity that enable the seamen of the American and 
 British navies to adapt themselves to new and difficult responsibilities as they arise. 
 
UEPORT OP AMERICAN MERCHANT MARINE COMMISSION. XIX 
 
 Nor do the temperaments and traditions of the composite races that man the ships 
 serve to correct these deficiencies. Tlie service is compulsory, not voluntary, and a 
 good portion of the crews is drawn from the interior. The merchant marine is rela- 
 tively too unimportant to provide a proper nucleus of seamen, and the consequence 
 is that many of the men serving on board ship have no sea aptitude, and are found 
 afloat only because they have drawn an unlucky number in the conscription. 
 
 Russia exhausted her best officers and trained men in the first squad- 
 ron whose ships now lie sunk at Port Arthur or hide dismantled in the 
 neutral harbors of the Yellow Sea. It is not comfortable to think that 
 but for our unbroken victories in the hundred days' war with Spain 
 Russia's experience with the Baltic squadron might have been our own. 
 It is the evidence of the admiral commanding on the coast of Cuba 
 in that war that the United States had set afloat all its educated officers 
 and skilled seamen in its first battle line, and that if a reverse had come 
 there would have been no crews to man another fleet, even had the new 
 ships been available. 
 
 At the present time it is well known that new ships and good ships 
 are being laid up at the navy -yards because there are no officers for 
 them, and because the regular navy quota of enlisted men is insufficient 
 for the demands of routine peace service. Representative Richard 
 Wayne Parker, of New Jersey, who has given much thought to this 
 question of a naval reserve, made an able presentation of the case at 
 one of the Washington hearings in November, and for his zeal and 
 information the Commission offers sincere acknowledgment. 
 
 THE NAVAL VOLUNTEERS. 
 
 The bill as drafted by the Commission proposes, as the first essential 
 step in the rehabilitation of our merchant shipping, to create a force 
 of naval volunteers composed of the best officers and men of our mer- 
 chant ships and deep-sea fishing vessels, and, having created this force, 
 which njust necessarily be small at first, to provide means for its 
 healthy and sure expansion. As an inducement to enroll, and in frank 
 recognition of the peculiar national value of a thorough-going seaman, 
 a substantial retainer is offered ranging from $100 a year for the mas- 
 ter or chief engineer of a large steamship to $25 for a sailor or fireman 
 and $1.5 for a boy. It is undei'stood, of course, that officers and men 
 shall receive regular pay, beside this retainer, during their period of 
 actual naval instruction, and the terms and conditions of this period, 
 which at first can not be long, and the regulations and qualifications of 
 the service are left, as they ought to be, to be prescribed by the Sec- 
 retary of the Navy. Enrollment in the naval volunteers is open to 
 officers and men now in the coastwise service, but it is stipulated that 
 to receive the retainer they must have spent at least six months of the 
 year in the foreign trade or deep-sea fisheries. 
 
 A SMALL FORCE TO START WITH. 
 
 It is estimated by the Commissioner of Navigation, in his annual 
 report for 1903, that "all American vessels on salt water which go out 
 of sight of land for any time during the year would be fully manned by 
 60,000 men, including masters." Somewhat less than one-half, or 
 perhaps 20,000, of these officers and seamen are native or naturalized 
 American citizens. Out of these 20,000 officers and men probably not 
 more than one-half would be eligible for naval volunteer service, and 
 
XX REPORT OF AMERICAN MERCHANT MARINE COMMISSION 
 
 it would require considerable time to enroll and instruct them. But 
 the Navy has asked for a reserve of 20,000 in the bills which it has 
 presented to Congress. It is therefore manifest that shipowners 
 must not only be encouraged to employ these naval volunteers, but 
 encouraged to build more ships to develop an increased naval reserve, 
 as well as to advance the interests of commerce. 
 
 Thus section 2 of the bill authorizes the payment of an annual sub- 
 vention of 15 per gross registered ton for every vessel, steam or sail, 
 engaged for twelve months in the foreign trade or deep-sea fisheries, 
 $4 for nine months, and $2.60 for six months, provided that the vessel 
 carries among her crew a certain proportion of naval volunteers, and 
 provided further, that the vessel is held at the disposal of the Govern- 
 ment in war, carries the United States mails, if so required, free of 
 charge, maintains an efficient rating, and makes all ordinary repairs 
 in the United States. 
 
 AN EXACT PRECEDENT. 
 
 An exact and authoritative precedent for the principle of this pro- 
 posed legislation is to be found in the example of the fathers of the 
 Republic. More than a century ago, on February 16, 1792, the Con- 
 gress of the United States, acting on information contained in a report 
 of Thomas Jefferson, Secretary of State, granted bounties from the 
 Treasury to the men employed in the deep-sea fisheries and to the vessels 
 themselves. (Jefferson's exhaustive memorandum will be found in 
 Volume VII of "The writings of Thomas Jefferson," edited by H. A. 
 Washington.) These bounties at first took the place of an allowance 
 that had been made upon the exportation of dried fish, and were 
 nominally at first in lieu of a drawback of the import duties paid on 
 salt, but as a matter of fact were very much more than an equivalent. 
 
 The original bounties offered were at the rate of $1.60 a ton to 
 vessels below 20 tons, $2.40 a ton to vessels of 20 and not more than 30 
 tons, and $4 a ton to vessels of above 30 tons — the manifest purpose 
 being to encourage longer trips and the use of larger and superior 
 seagoing vessels. These payments were divided in a fixed ratio 
 between the vessel and her crew. Only three or four months of actual 
 sea service were required each year. This policy was interrupted 
 during the period of the embargo, but it was resumed at the end of 
 the second war with England, and, with some modifications and 
 increases, it remained in force under all changes of parties and admin- 
 istrations until 1866. During a part of this period a separate bounty 
 was allowed on the exportation of dried fish, but this was withdrawn 
 in 1848 in favor of a drawback of the duty on the salt used in curing 
 fish for exportation. 
 
 A POLICY OF THE FATHERS. 
 
 Under this policy of the fathers more than $1 0,000,000 were expended 
 between 1793 and 1851, and the tonnage of the cod and mackerel fish- 
 eries increased from 30,959 in 1793 to a maximum of 204,197 in 1862 
 Men of the fishing crews under this historic system received on the 
 average a retainer of about |2 a month for three or four months' serv- 
 ice, or almost an equivalent to the $26 per year offered to seamen bv 
 the terms of the present bill. -^ 
 
BEPOET OV AMEBIOAN MERCHANT MARINE COMMISSION. XXI 
 
 The chief motive of this time-honored policy of the founders of the 
 nation, as the references to it in Congress abundantly prove, was the 
 exact purpose of the present proposition — to create a sea militia, a 
 force of naval volunteers, brave and hardy men, inured to the ocean, 
 who should be prepared to defend the flag in war. History records 
 how gallantly these naval volunteers responded. The Constitution in 
 her later and most glorious cruises was manned largely by deep-sea 
 fishermen, who were found in the crew of every frigate and sloop of 
 war of 1812, and swarmed into the daring and efl'ective privateers 
 of that ocean conflict. When the Navy was again recruited for the war 
 with Mexico, the deep-sea fisheries were again a ready source of the 
 best enlistments, and so many thousand fishermen joined the Federal 
 fleet in the civil war that the industry was well nigh abandoned — 
 shrinking from a tonnage of 204,197 in 1862 to 76,065 in 1867. 
 
 A NATIONAL INTEREST NOW. 
 
 At that time, and for many years before, the deep-sea fisheries were 
 not the genuinely national industry they have now become, when their 
 adventurous sails flash in the Gulf of Mexico and the far North Pacific. 
 Seybert in his "Annals" (1818) declares: "Our fishermen have been 
 almost exclusively confined to the New England States; of these 
 Massachusetts had the greatest share. * * * In the cod fishing, 
 no vessel (except 48f f tons returned for New Jersey in 1803 and 66f 4 
 tons for Virginia in 1796) was owned south of New York." Yet until 
 the unhappy quarrel that preceded the civil war, this national encour- 
 agement from the Treasury of a naval reserve aroused no party or sec- 
 tional opposition. The policy, founded under Washington, through 
 the counsel of Jefferson, stood under Madison and Jackson as well as 
 the younger Adams. That identical principle — indeed, that identical 
 method — with the sanction of three-quarters of a century upon it, is 
 now again evoked in the present bill for the creation of another force 
 of naval volunteers, applied anew to the deep-sea fisheries, and extended 
 to the kindred service of the mercantile marine — for the fisheries are 
 now too scant to provide alone the naval volunteers for a nation of 
 80,000,000 people. 
 
 FOR CARGO CARRIERS ESPECIALLY. 
 
 To the inevitable question. Will this naval subvention of %5 per 
 gross ton per annum, payable to a given vessel for no more than ten 
 years, suffice to solve the whole problem of our ocean shipping, creat- 
 ing not only a fleet of capacious and ijsef ul cargo ships, but a fleet of 
 fast and luxurious passenger ships? — ^to this question the Commission 
 will frankly reply that no such complete result is to be expected. 
 Regular mail liners of adequate speed on certain important routes are 
 provided for in another way in another section. But this naval sub- 
 vention of $5 per gross ton does effectually bridge the difference of 
 cost of construction and cost of maintenance, based on wages here 
 and abroad, so far as concerns the average freighting vessel, steam or 
 sail. To this extent it does equalize conditions, and thereby does give 
 our merchant ships a fair fighting chance again upon the ocean. 
 
 Take, for example, the actual case of a new steam freighter, a typ- 
 ical cargo vessel, of 3,750 gross tons. Her fixed charges, based on 
 
XXII REPORT OF AMERICAN- MERCflANT MARINE COMitflSSION. 
 
 crew wages and maintenance and higher cost of construction, would 
 be, approximately, $13,000 a vear greater than those of a British ves- 
 sel of the same class, with a British crew— if a Chinese or Lascar crew, 
 the difference would be four or five thousand dollars greater, buch a 
 typical American ship would earn a subvention for a year's service, at 
 15 per gross ton, of |l8,750, evening conditions, and perhaps a little 
 more, by way of encouragement to the owners to build new vessels, 
 employmore naval volunteers, and help to make new markets for 
 American commerce. 
 
 ONLY EQUALIZES CONDITIONS. 
 
 It should be emphasized that this subvention only equalizes condi- 
 tions, or, at the best, a httle more. In no instance, with no kind of 
 ship, is the subvention large enough to justify the owner in sailing 
 without cargo. He must have a freight, and a good one, if he is to 
 make both ends meet. To run without it means to pay $3 or $4 in 
 wages, supplies, interest, taxes, depreciation, and insurance in order 
 to earn $1 of subvention. Therefore, no arbitrary requirement of a 
 certain proportion of cargo is necessary; and it must be remembered 
 that such a requirement would bear hardest on adventurous vessels 
 seeking to create new trades, where at first a ship that fills one-third 
 of her space is fortunate. It is just this seeking for new markets 
 that the American people are most eager to encourage for the sake of 
 farmers, manufacturers, and other producers at home. 
 
 ONE EVEN KATE. 
 
 It is to be noted that one even rate of subvention of $5 per gross 
 ton is provided for all vessels, sail craft included. This is the fairest 
 plan that possibly can be framed. It is simple and intelligible. It is 
 proof against all charges of favoritism and discrimination. Moreover, 
 there is more than one urgent reason why sail vessels should have the 
 same rate as steamers. Our present fleet includes many sail ships of 
 high commercial efficiency. They are often still the pioneers of com- 
 merce, visiting new ports where trade is too small or channels too 
 shallow for the steamers. They are the cheapest carriers of certain 
 important cargoes, and their presence is everywhere a check upon 
 exorbitant steam rates. 
 
 VALUE OF SAIL SHIPS. 
 
 But beyond all this, sail vessels of square rig or fore and aft rig are 
 indispensable as schools of seamanship. Here their value is incom- 
 parable. Indeed the greatest steamship companies of Europe now 
 maintain sail ships for the express purpose of training their young 
 officers, and the United States Navy does the same. Within a few 
 months the Navy has launched three vessels — sail ships, pure and 
 simple— modeled closely after the merchant type, and to be used 
 exclusively for training purposes. Both the cadets at Annapolis and 
 the lads who are to be enlisted men receive their practical sea educa- 
 tion to-day on sailing ships or steam vessels with the largest possible 
 sail power. 
 
 As Rear- Admiral Luce, one of the ablest of the veteran sea officers 
 
BEPORT OF AMERICAK MERCHANT MARINE COMMISSION. XXIII 
 
 of the United States, testified recently before this Commission in 
 Washington: "I am a strong advocate for keeping up, if possible, the 
 sailing vessel as distinct from the steamer. * * * It jg desirable, 
 from the naval point of view, that this species of industry should be 
 encouraged by our navigation laws, for it is unquestionably true that 
 it is that class of vessel that we must look to for sailors. Steamers 
 produce seamen, it is true — men who acquire the sea habit — but not 
 sailors in the strict sense of the word, men who do not only have the 
 sea habit but the well-known characteristics of the sailor, his skill in 
 meeting all the vicissitudes of life at sea, his contempt for danger, his 
 self-reliance under difficulties, his adaptability to all sorts and con- 
 ditions of circumstances. Men seasoned in that school soon adapt 
 themselves to man-of-war life." 
 
 NOT ENOUGH FOE FAST, HIGH-COST VESSELS. 
 
 This proposed rate of $5 per gross ton is unquestionably sufficient 
 to equalize conditions for American sail vessels as against foreign sail 
 vessels, save in the case of the excessively subsidized fleet of France. 
 This same rate, as has also been said, is sufficient to equalize conditions 
 for American cargo steamers, save in exceptional instances. The 
 Commission is prepared to anticipate the criticism that this naval sub- 
 vention will not of itself encourage the building of swift and expensive 
 steamships. Indeed, we are ready to admit this without controversy. 
 
 We are frank to say, moreover, that it is our deliberate judgment 
 that in the restoration of the American merchant marine it is the use- 
 ful, hardworking cargo ship of steam and sail which should have the 
 first and friendliest consideration. For the American people, though 
 they are now sending many compact manufactured goods abroad, are 
 still in the main producers of bulk}' commodities, so far as concerns 
 their export commerce. Grain, provisions, cotton, lumber, cattle — 
 things like these still make up the greater part of the value, as they 
 do of the volume, of American shipments to foreign countries. 
 
 The Commission believes that it interprets rightly the desire of the 
 American people, as everywhere expressed at the hearings throughout 
 the United States, when it provides first and foremost for the encour- 
 agement of the kind of ships best adapted to convey American export 
 merchandise. We are glad to make this explanation promptly and 
 fully at this time, but we do not feel that anything like an apology is 
 necessary for so shaping the proposed bill that it will especially aid, 
 and insure the construction of, commercial vessels that can most easily 
 be built, owned, and managed by men of moderate means — vessels 
 adapted to the present requirements of American ocean commerce. 
 
 Indeed, if we mistake not, this feature, frankly embodied in the 
 bill, will be recognized as a distinct and important merit of the propo- 
 sition, not only on the seaboard, but in the States of the South and 
 West, whose fields supply the chief part of our outward cargoes. 
 
 NO MERE COMMERCIAL SUBSIDIES. 
 
 It can not be too strongly emphasized that the naval subventions 
 offered in sections 2, 3, and 4 of the proposed bill are not bounties 
 
XXIV EEPOBT OF AMERICAN MERCHANT MARINE COMMISSION. 
 
 outright or mere commercial subsidies, such as many of our competi- 
 tors give, but are distinctly based on importa,nt public sennces ren- 
 dered and to be rendered by the ships and shipowners t^at ^ec^^^ve 
 them. As to the constitutionality and expediency of ?uch guarded sub- 
 ventions as these there can be no question whatever, in the ligbt ot tne 
 example of the fishery subventions given to both vessels and men tor 
 prospective naval service by the fathers of the Republic, and continued 
 by their immediate successors. , , ^„, . . 
 
 It was not expected that these fishing craft themselves would fight, 
 they never did so. But their gallant men did fight m every ocean war 
 we ever had, and the Government from 1792 onward frankljr recog- 
 nized that in order to secure this indispensable naval reserve it must 
 help to make and keep the entire industry prosperous, ihose ot our 
 deep-sea fishermen who still remain possess the same pecuhar value to 
 the nation. No community of like size in the country contributed 
 one-tenth so many first-class recruits to the Regular Navy of the United 
 States in the war with Spain as did the famous town of trloucester. 
 Though the call did not come until the fishing fleets had sailed, 
 Gloucester mustered several hundred fine, able-bodied seamen, and it is 
 especially significant that 76i per cent of the men offered at Gloucester 
 were acceptable in intelligence and physique, while of t^ general 
 applicants at Boston only 14^ per cent and of those at New York only 
 6 per cent were found qualified for the severe requirements of the 
 naval service. 
 
 POLICY OF OTHER NATIONS. 
 
 France and Japan both pay what is in effect a naval bounty to their 
 deep-sea fishermen. Canada gives to her vessels and men annually 
 $160,000 American money, the proceeds of the Halifax award. Great 
 Britain includes the hardy fishermen of Newfoundland in her naval 
 reserve, paying retainers and furnishing instructign. The British 
 reserve altogether, merchant seamen and fishermen, consists, exclusive 
 of officers, of upwards of 30,000 men, who each receive annual retain- 
 ers of from $15 to $50. The method adopted in the proposed bill is 
 therefore not only in harmony with American traditions, and indeed 
 founded on authoritative precedent, but is in accord with the practice 
 of the chief maritime powers of the world. 
 
 THE VIEWS OF JEFFERSON. 
 
 Mr. Jefferson had both merchant marine and fisheries in mind when 
 in December, 1793, he wrote these memorable words to the House of 
 Representatives: 
 
 Our navigation involves still higher considerations. As a branch of industry it is 
 valuable, but as a resouce of defense essential. 
 
 Its value, as a branch of Industry, is enhanced by the dependence of so many other 
 branches on it. In times of general peace it multiplies competitors for employment 
 in transportation, and so keeps that at its proper level; and in times of war — that is 
 to say, when those nations, who may be our principal carriers, shall be at war with 
 each other, if we have not within ourselves the means of transportation, our produce 
 must be exported in belligerent vessels, at the increased expense of war freight and 
 insurance, and the articles which will not bear that must perish on our hands. 
 
 But it is as a resource of defense that our navigation will admit neither neglect nor 
 forbearance. The position and circumstances of the United States leave them nothing 
 to fear on their land board, and nothing to desire beyond their present rights. But 
 on their seaboard they are open to injury, and they have there, too, a commerce 
 
EEPOBT OK AMEBIOAK MERCHANT MARINE COMMISSION. XXV 
 
 which must be protected. This can only be done by possessing a respectable body 
 of citizen seamen, and of artisans and establishmente in reddiness for shipbuilding. 
 (Report of Thomas Jefferson, Secretary of State, to the House of Representatives, 
 December 16, 1793. "The Writings of Thomas Jefferson," edited by H. A.. Wash- 
 ington, Volume VII, p. 647. ) 
 
 The wisdom and force of this historic statement will be as gratefully 
 recognized now, as they were then, by Mr. Jefferson's fellow country- 
 men. 
 
 NEW OCEAN MAIL ROUTES. 
 
 Wherever throughout the country the Commission has held its hear- 
 ings the evidence has been unanimous in favor of the principle of the 
 present ocean-mail act, approved March 3, 1891, and a very earnest 
 desire has been expressed for its extension. When this law was passed 
 the rates of compensation originally proposed were cut down about 
 one-third by Congress. Experience has amply proved that this reduc- 
 tion was an error, for, though the older American mail lines have been 
 sustained and developed by the law of 1891 and a few new lines have 
 been created, yet the law has not sufficed to give the United States a 
 complete system of mail communication with the great poi"ts of the 
 world and the chief markets for American merchandise. The Ameri- 
 can ocean mail lines now operating under contracts provided by the 
 law of 1891, and the compensation received in the fiscal year 1904, are 
 stated by the Superintendent of Foreign Mails as follows: 
 
 American Line, New York to Southampton $690, 483. 20 
 
 Oceanic Line, San Francisco to Australasia 288, 203. 00 
 
 New York and Cuba Mail, New York to Cuba and Mexico 206, 082. 00 
 
 Red D Line, New York to Venezuela and Dutch West Indies 103, 325. 00 
 
 American Mail, Boston and Philadelphia to Jamaica 92, 748. 00 
 
 Total 1,375,841.20 
 
 NO CHANGE IN EXISTING LINES. 
 
 In the proposed bill not one dollar is added to the expenditure for 
 any one of these five established contract lines. They are left exactly 
 as they are at present, fulfilling, under the law of 1891, their agree- 
 ments with the Government. ' ' 
 
 Moreover, this law of 1891 is not repealed, and it is not amended 
 except as to certain specific new routes to be established and the new 
 requirement of naval volunteers. Contracts authorized on these new 
 routes are to be made in general in the manner provided for under the 
 existing law, which has stood the test of almost fourteen years of act- 
 ual experience. 
 
 But in one important particular the law of 1891 has undeniably 
 failed. Its reduced compensation has not sufliced to establish contract 
 mail lines to the greater countries of South America, to Central Amer- 
 ica, to Africa, or to the Orient. Therefore the Commission recom- 
 mends in the proposed bill a substantial increase of compensation on 
 certain specified routes where American steam service will be most 
 likely to increase the foreign markets for American merchandise. 
 These new routes are: 
 
 THE NEW SERVICES. 
 
 First. From a port of the Atlantic coast of the United States to Brazil, on steam- 
 ships of the United States of not less than 14 knots speed, for a monthly service at a 
 maximum compensation not exceeding ^150,000 a year, or for a fortnightly service 
 at a maximum compensation not exceeding $300,000 a year. 
 
XXYl BEPOET OF AMERICAN MEECHANT MAEINE COMMISSION. 
 
 Second. From a port of the Atlantic coast of the United States to Uruguay and 
 Argentina, on steamshi|)s of the United States of not lessthan 14 knots speed, for a 
 monthly service at a maximum compensation not exceeding |187,500 a year, or for 
 a fortnightly service at a maximum compensation not exceeding $375,000 a year. 
 
 Third. From a port of the Atlantic coast of the United States to South Africa, on 
 steamships of the United States of not less than 12 knots speed, for a monthly service 
 at a maximum compensation not exceeding 1187,500 a year, or for a fortnightly 
 service at a maximum compensation not exceeding $375,000 a year. 
 
 Fourth. From a port of the United States on the Gulf of Mexico to Brazil, on 
 steamships of the United States of not less tlian 12 knots speed, for a monthly service 
 at a maximum , compensation not exceeding $137,500 a year, or for a fortnightly 
 service at a maximum compensation not exceeding $275,000 a year. 
 
 Fifth. From a port of the United States on the Gulf of Mexico to Cuba, on steam- 
 ships of the United States of not less than 14 knots speed, for a semiweekly service 
 at a maximum compensation not exceding $75,000 a year. 
 
 Sixth. From a port of the United States on the Gulf of Mexico to Central America, 
 on steamships of the United States of not less than 12 knots speed, for a weekly-serv- 
 ice at a maximum compensation not exceeding $75,000 a year. 
 
 Seventh. From a port of the United States on the Gulf of Mexico to Mexico, on 
 steamships of the United States of not less than 12 knots speed, for a weekly service 
 at a maximum compensation not exceeding $50,000 a year. 
 
 Eighth. From a port of the Pacific coast of the United States, via Hawaii, to Japan, 
 China, and the Philippines, on steamshijjs of the United States of not less than 16 
 knots speed, for a monthly service at a maximum compensation not exceeding $300,000 
 a year, or for a fortnightly service at a maximum compensation not exceeding$600,000 
 a year. 
 
 Ninth. From a port of the Pacific cosst of the United States to Japan, China, and 
 the Philippines, on steamships of the United States of not less than 13 knots speed, 
 for a monthly service at a maximum compensation not exceeding $210,000 a year; or 
 for a fortnightly service, at a maximum compensation not exceeding $420,000 a year. 
 
 Tenth. From a port on the Pacific coast of the United States to Mexico, Central 
 America, and the Isthmus of Panama, on steamships of the United States of not less 
 than 12 knots speed, for a fortnightly service at a maximum compensation not 
 exceeding $120,000 a year. 
 
 Provided, That the requirements of this section as to the rates of speed shall be 
 deemed to be complied with if said rates are developed during a trial of four hours' 
 continuous steaming at sea in ordinary weather in water of sufficient depth to make 
 the test a fair and just one, and if the vessels are maintained in a condition to 
 develop such speed at any time while at sea in ordinary weather. This trial shall 
 be made under the direction and supervision of a board of naval officers which the 
 Secretary of the Navy shall appoint upon the application of the owner or owners of 
 the vessel to be tested. 
 
 FOLLOWINQ TRADE ROUTES. 
 
 It will be recognized that in every instance these proposed lines 
 follow natural and important trade routes, and that several of them 
 are valuable, not only for the commercial, but for the political rela- 
 tions which a regular American steamship service will assuredly 
 promote. 
 
 The United States is Brazil's best customer. Nearly all of our 
 imports from that country are on the tariff free list. We have also 
 a considerable commerce with the countries farther south. Our 
 interest in the welfare of these great American Republics is such 
 that it is manifestly unjust and intolerable that not only must Ameri- 
 can traffic with Brazil and Argentina come and go in inferior and 
 uncertain foreign, ships, but that American merchants, and even the 
 officers of our diplomatic, consular, and naval service must be forced 
 to cross to England in order to secure first-class passage to Rio 
 Janeiro and Buenos Ayres. So eager are Brazil and Argentina to gain 
 regular and adequate steam communication with the United States 
 that theyhfn^e oven intimated that they would defray part of the cost 
 of the undertaking. 
 
REPORT OF AMERICAN MERCHANT MARINE COMMISSION. XXVII 
 
 Our exports to South Africa are now upward of 130,000,000 a year — 
 almost entirely conveyed by foreign snipping. An American mail 
 line to Cape Town and other ports, composed of capacious steamers of 
 moderate speed, has been requested by American merchants interested 
 in the trade, and is justified by every consideration of commercial 
 prudence. 
 
 FOUR NEW GULF ROUTES. 
 
 Three of the ten new mail-steamship lines proposed are to have their 
 origin on the Atlantic coast; four of the ten on the Gulf of Mexico. 
 The Commission thoroughly believes that this liberal recognition of 
 the Gulf ports is demanded by their present, and still more by their 
 future, commercial importance. Galveston, New Orleans, Pensacola, 
 Mobile, and the other commercial cities of that great coast line have 
 excellent harbors, steadily improving rail connections, and behind them 
 the productive wealth of the Mississippi Valley and the mighty South- 
 west. These Gulf ports ought, in all national equity, to have an Amer- 
 ican steamship line of their own to South America. They ought to 
 have their own connections under the United States flag with Mexico 
 and the West Indian archipelago. They are assured of these new 
 steamship services through the specified mail routes of the proposed 
 bill, and they will be enabled to create other commercial lines and to 
 launch and run individual ships under the broader terms of the naval 
 subventions. 
 
 In spite of climatic advantages, and the nearness of timber, iron, 
 and coal, there is not to-day one large modern shipyard on the whole 
 range of the Gulf of Mexico. The foreign vessels that now convey 
 the commerce of Galveston, New Orleans, Pensacola, and Mobile are 
 built abroad, repaired abroad, manned abroad, supplied abroad. Even 
 the few of these foreign vessels which American capital owns employ 
 almost no American labor. 
 
 This proposed legislation, in its mail and naval subvention sections, 
 gives the Gulf States assurance of a new and important industry, 
 absolutely essential to them if they are to realize to the full the mag- 
 nificent advantages opened by the great Isthmian Canal. Under this 
 proposed legislation, the Gulf cities can build their own ships, ofiicer 
 and largely man them — thus giving their boys a new field of employ- 
 ment — repair their own ships and supply them with their own mate- 
 rials, and thus keep at home all the profits of their ocean trade that 
 now go over the sea to Liverpool, London, Hamburg, Bremen, Havre, 
 Marseilles, Trieste, and Genoa. 
 
 The Isthmian Canal, built by American money, will bring not pride, 
 but humiliation, to the American people if it floats, in foreign com- 
 merce, only foreign and no American ships. 
 
 THREE PACIFIC LINES. 
 
 Three of the ten contract mail lines of the proposed bill are on the 
 Pacific Ocean. Like the Atlantic and Gulf services, they follow natural 
 trade routes of large present and larger future importance. As the 
 President of the United States said in the annual message to Congress, 
 
XXVIII REPOET OP AMERICAN MERCHANT MARINE COMMISSION. 
 
 in which he recommended the creation of this Commission, "The 
 establishment of new lines of cargo ships to South America, to Asia, 
 and elsewhere, would be much in the interest of our commercial expan- 
 sion." Two new contract lines of mail and cargo steamers are there- 
 fore proposed in the accompanying bill, not only to Japan and China, 
 but to the Philippines. These are very long routes, and in the Pacific 
 coal is costly. It has thus been necessary to set the trans-Pacific sub- 
 ventions at a figure that may seem high, but that is not high consider- 
 ing the expense and the importance of the service. 
 
 Indeed, the Commission must say that it has not yet received any 
 intimations that the offered subventions would secure a trans-Pacific 
 service on either route, although there is satisfactory proof that the 
 Atlantic and Gulf subventions will attract proposals from responsible 
 bidders. 
 
 The need of regular mail and commercial service on the third Pacific 
 route, from the western coast to Mexico, Central America, and the 
 Isthmus of Panama, is unmistakable. No like subvention is offered 
 on the Atlantic side, because the Panama Railroad Company already 
 operates an American steam line under domestic postal contract from 
 New York to Colon, and this has passed with the canal property into 
 the possession of the United States Government. 
 
 NEARLY ALL NEW ROUTES. 
 
 As a rule, the ten new ocean mail routes specified in the proposed 
 billmust be created from the beginning — not only the lines, but the 
 ships themselves. There is not one American steamer now running to 
 Brazil, not one to Argentina, not one to South Africa. On the four 
 Gulf routes but one American steamer is now found — on the short 
 line to Cuba. In the Pacific Ocean the situation is somewhat different. 
 A service from San Francisco to China, Japan, and the Philippines is 
 now maintained by five American steamers of the Pacific Mail and 
 three British steamers of the Occidental and Oriental Company. If 
 the Pacific Mail were to seek the proposed contract, the three British 
 vessels would have to be displaced by new ships of American con- 
 struction. There is not now, therefore, an ' ' existing line " on this 
 San Francisco route, as the proposed bill contemplates such a service. 
 
 Out of the ports of Puget Sound only two American steamers of the 
 liner type now run to the Orient and the Philippines. Four other 
 ships of at least equal size and speed would have to be secured to pro- 
 vide a contract service. On this northern route also there is no 
 "existing line," such as would be required by the proposed subvention. 
 
 A COMPARISON OF RATES. 
 
 As to the maximum compensation offered, of |420,000 per annum, 
 for six American steamers on this northern route, it must be compared 
 with the 1291,000 given to three steamers of the competing British 
 line out of Vancouver — smaller ships, though fast, and of less com- 
 mercial value than the large Americans. 
 
 This subvention of 1420,000 for six American steamers is to be com- 
 pared also with the $330,000 given to three steamers of the exactly 
 parallel Japanese line from Puget Sound to the Orient. 
 
 As to the other trans-Pacific subvention of 1600,000 for seven or 
 eight American steamers, it is comparable with $600,000 received by 
 
REPORT OF AMERICAN MERCHANT MARINE COMMISSION. XXIX 
 
 three Japanese steamers of a smaller type in direct competition out of 
 San Francisco. 
 
 Whatever criticism may be made of the two trans-Pacific subven- 
 tions of the proposed bill, it can scarcely be urged that, judged by 
 foreign standards, they are unreasonable and excessive. 
 
 THE ATLANTIC SUBVENTIONS. 
 
 On the Atlantic the maximum subvention of $300,000 offered for 
 the first Brazil line is about twice the amount granted under the pres- 
 ent law, which has absolutely proved to be inadequate. The British 
 Royal Mail service to the West Indies and South America received at 
 first 11,200,000 and then $1,350,000 a year, but on the final successful 
 establishment of the line the amount was gradually reduced. It is 
 now about $400,000 for a double service to the West Indies, Brazil, 
 and Argentina, but a new West India line has lately been started with 
 a subvention of $200,000. 
 
 The proposed subvention to the new American line to Argentina is 
 set at $375,000 a year — the distance being greater than to Brazil. It 
 has not seemed feasible to unite these South American services, for 
 such mail as is now carried to Brazil or to Argentina by slower foreign 
 steamers goes to one country or the other direct. The distance to 
 South Africa is greater than to Argentina, but the required speed is 
 less, so that a subvention of $875,000 is not inequitable. 
 
 On the Gulf-Brazil route the subvention is set at $276,000, or 
 $25,000 less than on the North Atlantic route, but the stipulated 
 speed is 2 knots lower, which is not an unfair balance. The sub- 
 ventions of $75,000 for the Gulf-Cuba line and the same amount for 
 the Gulf-Central American line and of $50,000 for the Gulf-Mexico 
 line are relatively small amounts, but the distances are short, the ships 
 required are not large, and good steam coal is available. 
 
 The exact tonnage of the steamships on these new mail routes is not 
 specified in the proposed bill. That is a detail which can best be left 
 to the shipowner and merchant, who know best what a given trade 
 demands and justifies. 
 
 NO "ocean GREYHOUNDS." 
 
 Frankly, these proposed new mail subventions do not look to the 
 creation of an "ocean greyhound " class. Almost the only "grey- 
 hounds " in the world are to be found on a few North Atlantic lines to 
 Europe. It has seemed to the Commission that the most useful mail 
 steamships for distant commerce and the mail steamships which the 
 American people most desired at the present time were modern, effi- 
 cient vessels, combining moderate speed with large cargo capacity. 
 Such are the steamships called for by the mail subventions of the pro- 
 posed bill. Their speed, it is believed, is adequate but not excessive. 
 Commercial value is nowhere sacrificed to mere record breaking. At 
 the same time, the stipulated speed is believed to be always at least 
 equal, and in most instances superior, to the average rates of foreign 
 steamers now running in the same or similar services. 
 
 For example, only two of all the foreign vessels that last year 
 received United States mails at New York for South America possess 
 even a nominal speed of 14 knots, the rate required from all the new 
 
XXX REPORT OF AMERICAN MERCHANT MARINE COMMISSION. 
 
 ships of our proposed lines to Brazil and Argentina. Foreign steam- 
 ers from New York to South Africa are now of from 8 to 11 knots, and 
 10 knots is above the average speed of the foreign craft now trading 
 within the Gulf of Mexico. 
 
 On the trans-Pacific routes, the fastest ships now afloat are Ameri- 
 can built, and belong to the Pacific Mail Company. The required 
 speed for steamers on the North Pacific line (13 knots) is three knots 
 less than via the Hawaiian line, but the northern route is the shorter 
 to the Orient, and the winter voyages are often too rough and stormy 
 for high speeding. The three British North Pacific liners are nomi- 
 nally of 16 knots, but it is understood that they are never driven to 
 their maximum. 
 
 A NAVAL RESERVE FLEET. 
 
 Just as is required by existing law, whose s;ifeguards are in no way 
 relaxed, the contracts for the new ocean mail routes of the proposed 
 bill must be awarded, after public advertisement, in free and fair com- 
 petition, to the lowest responsible bidder oflfering terms satisfactory 
 to the Post-Office Department, and the ships ofl'ered can receive no 
 other subvention or bounty from the United States. As required by 
 existing law, the new mail steamships must be built under naval inspec 
 tion, and the faster of them must be strengthened to mount powerfu 
 guns as armed auxiliary cruisers, while the slower vessels serve as equally 
 indispensable transports or supply ships. The speed of all must be 
 tested on an official trial and certified by the Navy Department, and 
 all these mail ships, of any speed, must be held at the disposal of the 
 Government in war. Moreover, they must all carry a quota of men 
 and boys of the naval volunteers. Thus there is guaranteed a new 
 naval reserve of both ships and seamen, and an important reinforce- 
 ment not only of the commercial power but of the defensive power of 
 the United States. 
 
 NO NEW DEPARTURE. 
 
 The general method of the proposed bill in its mail subventions 
 involves no new departure from the established practice of the Gov- 
 ernment. These mail subventions are not in any opprobrious sense a 
 subsidy or bounty. They are granted frankly" in compensation for 
 public services rendered and to be rendered. As far back as 1841, the 
 year after the Cunard Line appeared with its British mail contract, 
 Senator Thomas Butler King, of Georgia, began his memorable and 
 successful advocacy of national encouragement to American mail lines 
 on the North Atlantic. Mr. King was ably supported by Senator 
 Thomas J. Rusk, of Texas, and in an annual message to Congress 
 President Polk urged: 
 
 The enlifjhtened policy by which a rapid communication with the various distant 
 parts of the world is established, by means of American-built steamers would find 
 an ample reward in the increase of our commerce and in making our 'country and 
 
 luuiiicxii, o liuuuc, aim will uB uucapiy purcuasea Dy tJie compensation to be paid for 
 the transportation of the mail, over and above the postage received. A iust national 
 pride, no less than our commercial interests, would seem to favor thp policv of ancr 
 menting the number of this description of vessels. ^ 
 
EEPOET OF AMERICAN MEBOHAIfT MAEIIO; COMMISSION. XXXI 
 OUR EARLIER LEGISLATION. 
 
 In 1845 and 1847, Congress passed acts offering a subvention for an 
 American ocean mail service from New York to Havre and Bremen. 
 A new line of American-built steamships was immediately established. 
 A second subvention created the celebrated Collins Line from New 
 York to Liverpool, and other subventions created an American steam 
 service to the West Indies, to the Isthmus of Panama, and from the 
 Isthmus northward in the Pacific Ocean. 
 
 As a result of this enlightened statesmanship, the United States 
 from 1850 onward for several years built more ocean steamships than 
 Great Britain did, and better steamships, superior in size, speed, 
 power, and commercial value. There were some lamentable disasters 
 at sea in this period, to remind the world that even steam had not 
 conquered the perils of the ocean, but on the whole the advantage in 
 safety and efficiency as well as in mercantile success remained with the 
 ambitious and progressive builders and seamen of America. 
 
 This national policy, thus approved, would doubtless have continued 
 unbroken to the present day but for the fierce and deplorable sec- 
 tional quarrel in Congress that immediately preceded the civil war. 
 This ended the rebuilding of our steam lines for the same reasons and 
 in the same way that it abruptly checked the upbuilding of the Navy. 
 In the white heat of this quarrel the mail subventions were withdrawn, 
 and the north Atlantic steamships, struggling hard with subsidized 
 British rivals, were abandoned. 
 
 It is sometimes said that this national effort to create a steam fleet 
 by mail subventions failed of its purpose. But it failed only because 
 the effort was given up in the very crisis of the contest. A few years 
 more would probably have made our steamships as securely masters 
 of the north Atlantic as our packet ships and clipper ships had been 
 before them. Even as it was, the ending of the subventions did not 
 break our grip upon the "West Indies, the Isthmus, and the Pacific. 
 "We had gained there a foothold which our steamships have retained to 
 the present time. 
 
 GENERAL PRINCIPLES THE SAME. 
 
 The general principles of the ocean mail legislation of 1845-1858 
 were renewed in the ocean mail law of 1891, which for nearly four- 
 teen years has stood unchallenged. It is worth recalling that the 
 performance of the most important contract ever concluded under this 
 act was begun during the second Administration of President Cleve- 
 land. The ocean mail sections of the proposed bill simply strengthen 
 the existing act on lines where it has happened to prove inadequate. 
 There is no departure from the method, and none from the purpose, 
 of American ocean mail legislation of sixty years. But there is a dis- 
 tinct increase in the amount of public service required from the ship- 
 owners, and the safeguards surrounding the contracts are greater than 
 ever before. 
 
 THE TONNAGE-TAX PROPOSITION. 
 
 There now remains to be considered the fourth and last feature of 
 the proposed bill. That is a plan, outlined in section 8, to increase 
 the tonnage taxes on all vessels, American and foreign, now entering 
 our ports by sea in the foreign trade. 
 3a— 04 m 
 
•yy-jTrr eeport of AMBEIOAN MEEOHANT MAEINB OOMMlSSIOir. 
 
 Tonnage taxes are practically the only Federal charges levied on 
 shipping in American ports, for entry and clearance fees, etc., are too 
 small to be considered. The present rates of tonnage taxes in the 
 United States are lower than those of the principal maritime nations, 
 and very much lower than the rates of some of those nations, ouch 
 charges are sometimes called "light dues," and their original purpose 
 here as abroad was to provide from shipping a fund for lighting the 
 coast for the benefit of shipping. Thus, during the year 1903, the 
 light dues collected in the United Kingdom amounted to £548,196, 
 while the expenses of the British light-house establishment were 
 £499,404. From light dues, accordingly, the British Government 
 met all cost of lighting the coasts of the United Kingdom, and had a 
 surplus of nearly $250,000 a year to add to an accumulated surplus for 
 other years of nearly $2,000,000. 
 
 The Commission believes that, with entire propriety, a similar gen- 
 eral principle may be adopted in the United States. Our receipts 
 from tonnage taxes in 1903 were $885,841, while the expenses of our 
 light-house establishment were $4,538,105. The Commission does not 
 propose to raise from tonnage taxes an amount sufficient to meet the 
 entire cost of the light-house establishment for several reasons: 
 
 First. A relatively small part of our light-house establishment 
 expenditures is for the rivers and the Great Lakes. Shipping is here 
 in competition with the railroads, and a Federal charge ought not to 
 be imposed on vessels from which railroad traffic is necessarily exempt. 
 
 Second. To an extent the same is true of the coasting trade. We 
 have reserved our coasting trade to vessels of the United States, and 
 for more than twenty years it has been the policy of the Government 
 to pay out of the public funds many of the charges to which American 
 vessels are subject. Accordingly for many years our coasting trade 
 has been exempt from tonnage taxes. The coasting trade of Great 
 Britain, on the other hand, and of some other foreign nations, is not 
 a reserved trade, being open freely or conditionally to the vessels of 
 all nations. Such countries accordingly with propriety levy tonnage 
 or light dues on vessels in the coasting trade. 
 
 NOT AN UNFAIR CONTKIBUTION. 
 
 The Commission believes that the sum of $3,000,000 is not an unrea- 
 sonable contribution on the part of vessels in the foreign trade toward 
 the maintenance of our national light-house, buoy, and beacon system, 
 which this year will doubtless cost about $5,000,000, and the rates 
 proposed in section 8 of the bill have been adjusted so as to produce 
 as nearly as may be that sum. 
 
 To raise this amount of revenue the maximum charge proposed on 
 any entry is 16 cents, an amount lower than the corresponding rates 
 charged by France or Italy, though nominally double the rates charged 
 by Hamburg and Bremen. At these two principal seaports of the 
 German Empire, however, the rate of practically 8 cents is imposed 
 at every entry (with a slight diminution at Hamburg), while this bill 
 provides that the tonnage taxes shall be imposed on only ten entries 
 during a year. 
 
 The bill preserves the distinction in the present law by which vessels 
 entering from ports belonging geographically to the North American 
 system pay one-half the rates of vessels entering from the more 
 
BBPOET OF AMEBIOAN MEEOHANT MAErtTE COMMISSION. XXXm 
 
 remote parts of the world. A geographical distinction sio^lar in 
 principle is observed by most maritime nations either directly or indi- 
 rectly in the imposition of light dues or tonnage duties. 
 
 The proposition of the Commission further repeals the inexplicable 
 misapplication of the principle of reciprocity to tonnage taxes found 
 in sections 11 and 12 of the act of June 19, 1886. In brief, these sec- 
 tions provide that vessels shall be exempt from tonnage taxes in the 
 United States on condition that in the ports from which they come no 
 tonnage taxes or light dues or equivalent taxes are imposed on Amer- 
 ican vessels. If American vessels had a reasonable share in the trade 
 of the world this system might be justified in theory, though in practice 
 the revenue requirements of most nations would not permit of its 
 application. 
 
 With the ocean carrying trade of the United States, however, almost 
 entirely in the hands of foreign shipowners, this so-called reciprocity 
 system is indefensible. In 1903, for example, American vessels paid 
 in the United States in round numbers $72,000 in tonnage duties, 
 while foreign vessels paid $810,000. Complete reciprocity, therefore, 
 under this law would have given foreign vessels the benefit of $12 
 exemption for each $1 exemption secured to American vessels. The 
 exemption in foreign ports would be in the same proportion, but the 
 amounts would be considerably larger. 
 
 THE MARINE-HOSPITAIj SEKVICE. 
 
 The bill also repeals section 15 of the act of June 26, 1884, by which 
 the proceeds from duties on tonnage heretofore have been devoted 
 to the Marine-Hospital Service. The Commission realizes the excellent 
 work, the progressive spirit, and the scientific methods of the Public 
 Health and Marine-Hospital Service. It is to be observed, however, 
 that the character of this Service has been materially changed by the 
 legislatioa of recent years. Its functions have been extended from 
 those of a purely maritime service to a national public-health service, 
 and it seems proper, therefore, that its expenses should hereafter be 
 met by direct appropriations in the same manner as that by which the 
 Government provides for other general services. 
 
 Furthermore, the marine hospitals are maintained for the benefit of 
 seamen on American vessels, and seamen on foreign vessels treated at 
 these institutions are charged a moderate sum. As over 90 per cent 
 of our tonnage taxes are paid by foreign vessels it does not seem just 
 that this fund should be set apart as at present for the exclusive benefit 
 of our own crews. 
 
 A EEMISSION m BEHALF OF BOYS. 
 
 It has been explained that the increase in tonnage taxes made in 
 section 8 of the proposed biU falls alike on an American or a foreign 
 ship that enters a port of the United States in foreign commerce. 
 The chief maritime power in the world, the one that has been most 
 successful in developing a strong naval reserve of merchant officers 
 and seamen, and the one great power, moreover, that resembles the 
 United States in dependence for naval strength on voluntary enlist- 
 ments, has for several years followed a practice of remitting a part of 
 its tonnage taxes to those of its own vessels that train boys for the 
 m.ercluint service and the Navy. 
 
XXXIV BBPORT OF AMEBIOAN MEEOHANT MABINE COMMISSION. 
 
 The Commission would invite especial attention to section 6 of the 
 British merchant shipping act of 1898: 
 
 On proof to the satisfaction of the board of trade that a British ship has during 
 any fiscal year carried, in accordance with the scale and regulations to be made by 
 the board of trade, with the concurrence of the treasury, boys between the ages of 
 fifteen and nineteen, there shall be paid to the owner of the ship, out of moneys 
 provided by Parliament, an allowance not exceeding one-fifth of the hght dues paid 
 durmg that year in respect to that ship: Provided, That no such payment shall be 
 made in respect of any boy unless he has enrolled himself in the royal naval reserve 
 and entered into an obligation to present himself for service when called upon, in 
 accordance with rules to be issued by the Admiralty. The scale and regulations 
 aforesaid may be modified from time to time by the board of trade, with the con- 
 currence of the treasury. 
 
 This section shall continue in force until the thirty-first day of May, one thousand 
 nine hundred and five, and no longer, unless Parliament otherwise enact. 
 
 AN EXCELLENT PRECEDENT. 
 
 No protest against this remission of British" tonnage taxes exclusively 
 in favor of British ships has ever been made by the United States, 
 because it is manifest that these ships have earned a fair title to espe- 
 cial national consideration through the rendering of an especial serv- 
 ice to the Government. The education of these young seamen is 
 rightly regarded as an important contribution to the national defense. 
 
 The Commission, therefore, has provided, in section 9 of the pro- 
 posed bill, for a remission of a part of the tonnage taxes — amounting 
 to 80 per cent of the increased rate — to American ships that carry a 
 certain number of boj'^s who are suitably trained in seamanship or 
 engineering, and are either enrolled as naval volunteers or indentured 
 as apprentices. 
 
 The report of the Commission has already emphasized the great 
 importance of the personal equation in this urgent problem of the 
 merchant marine. The thorough seaman must begin his calling as a 
 lad, when his elasticity and adaptability are greatest. Few men 
 remain at sea who first go when they are over 25 years of age. The 
 encouragement offered to the training of American boys is purposely 
 made a conspicuous part of this proposed legislation. For if a larger 
 American merchant marine is to be created it will have imperative 
 need of the pluck, energy, and determination of boys like those who 
 crowded our new regiments in the war with Spain, but quit when the 
 fighting was over, to go into machine shops, or to try railroading in 
 the West, or prospecting in Alaska or South Africa or the Philip- 
 pines, or any other adventurous outdoor life, with plenty of hardship 
 and danger and some chance of profit. 
 
 AN UNEXAMPLED LIBERALITY. 
 
 No nation in the world has drawn on its treasury so freely as the 
 United States for the improvement of rivers and harbors and the main- 
 tenance of an unegualed light-house, buoy and beacon, and life-saving 
 service. The national expenditures on rivers and harbors from 1888 
 to 1904 reached the enormous sum of $261,082,852; for light-houses 
 for buoys, etc., $23,320,086, and for the life-saving service $11 667'- 
 952— a total for these maritime purposes of $296,060,890— while'in ail 
 this time the foreign shipping interests, for whose benefit, lar^elv 
 these heavy expenditures were made, returned only $10 458 qffi in 
 tonnage taxes. ' jw«« lu 
 
EEPOET OF AMERICAN MERCHANT MARINE COMMISSION. XXXV 
 
 Some of our expenditures for rivers and harbors, light-houses, etc., 
 have of course been on the Great Lakes or rivers of the interior, where 
 foreign vessels seldom or never go, but by far the largest part of these 
 disbursements has been made in navigable waters on or adjacent to the 
 ocean. The costly deepening of harbors has especially inured to the 
 benefit of foreign ships, for coastwise commerce, as a rule, has not 
 required it, and the number of heavy-draft American vessels in the 
 foreign trade is trivial. Only six American steamships of 10,000 tons 
 gross register or upward now run in the trade of the Atlantic seaboard, 
 and they all go out of the port of New York. 
 
 Our liberal river and harbor appropriations have always, as one sure 
 result, enabled great foreign steamship companies to build immense 
 craft and thereby increase their dividend rate per ton with the cordial 
 assistance of the United States Treasury. No other government in 
 the world has displayed such eager altruism in opening channels for 
 the almost exclusive use of foreign flags. Meanwhile, the few Ameri- 
 can ships that visit foreign waters have been met there by tonnage, 
 light-house, dock, and other charges, almost invariably higher than — 
 indeed, often several times as high as — the charges on foreign ships in 
 deep and secure American seaports. 
 
 Tnis anomalous condition of affairs points straight to the necessity 
 of an immediate revision of our tonnage-tax system. The Commission 
 believes that in the proposed bill it has offered a method of providing 
 increased revenue from tonnage, that, while just to the United States, 
 is not unfair to the ships of foreign governments, long the chief bene- 
 ficiaries of our generous policy of maritime expenditure. 
 
 ESTIMATED COST OF THE PEOPOSED LEGISLATION. 
 
 As to the important practical question of the cost of the proposed 
 legislation, the average of the annual retainers provided in section 1 
 of the bill for officers and seamen of the naval volunteers would be 
 close to |50 each. It is probable that in the first year no more than 
 3,000 naval volunteers could be enrolled and qualified — for this process, 
 at first vmfamiliar, will necessarily be slow. These naval volunteer 
 retainers, therefore, for the fiscal year ending June 30, 1906, would 
 call for a maximum expenditure of $150,000. 
 
 As to the subvention for the ships themselves, the total registered 
 gross tonnage of the United States, steam and sail, on June 30, 1904, 
 was 888,628 tons. But it is well known that all this tonnage was not 
 actually engaged in foreign commerce. Many steamships, whose 
 employment is really coastwise, sail under register because they happen 
 to touch at one foreign port. For instance, eight ships of a total of 
 52,857 tons of the American-Hawaiian fleet are registered, though 
 engaged regularly in trade between New York, San Francisco, and 
 Hawaii. Other vessels sail under register for similar purposes of con- 
 venience, including many small steam craft running to Alaska and on 
 the Yukon River. 
 
 The actual foreign-going steam tonnage of the United States is easily 
 ascertainable. It can be selected, ship by ship, from the short list of 
 registered steel and iron steam vessels of above 1,000 tons. Smaller 
 craft than these, or wooden craft of any size, are not likely to make a 
 serious effort in foreign commerce. But from this list of registered 
 steam vessels must be excluded — 
 
XXXVI REPORT OP AMERICAN MERCHANT MARINE COMMISSION. 
 
 (1) Twenty steamships of 107,385 tons now employed on mail lines 
 under the law of Marct 3, 1891, which forbids them, under the terms 
 of the proposed bill, to receive any other bounty or subvention. 
 
 (2) Steamships of a speed and character available for the new ocean 
 mail routes proposed in the present bill— these numbering 19 ot 
 
 This process of elimination leaves M steamships of 203,871 gross 
 tons now registered in the United States and qualified to receive tJie 
 subvention of $5 a ton provided for in section 2 for ships engaged in 
 foreign trade by sea for twelve months in a year. This steam fleet, 
 therefore, would require in subventions the sum of $1,019,*}55. 
 
 Besides this registered steam tonnage there are 150 registered Amer- 
 ican square-rigged sailing vessels of 200,000 gross tons. These vessels 
 are now employed partly in long coastwise, and partly m foreign, voy- 
 ages. It may safely be assumed that one-half of this square-rigged 
 tonnage, under the encouragement of this bill, will engage for six 
 months and one-half for nine months in foreign commerce, requiring, 
 therefore, subventions at the six months' rate of $250,000, and at the 
 nine months' rate of $400,000, or |650,000 in all. 
 
 The schooners registered on June 30, 1904, for foreign commerce 
 were 700, of 150,000 gross tons. But it is well known alongshore 
 that few schooners engage exclusively in the foreign trade — for they 
 go intermittently from coastwise to foreign carrying. Assuming that 
 the subventions offered by this bill to the vessels themselves and to 
 their officers and seamen will move the schoouers to much larger par- 
 ticipation in foreign trade — to the extent for the whole fore-and-aft 
 fleet of six months in a year— the 150,000 tons of fore-and-aft shipping 
 will require total subventions of $375,000. There were on June 30, 
 1904, 567 enrolled vessels of 48,982 tons engaged in the deep-sea fish- 
 eries — small licensed craft below 20 tons not being included. This 
 total deep-sea fishery tonnage of, in round numbers, 50,000 tons would 
 on the average call for subventions at the nine months' rate of $4 per 
 ton, which would amount for the year to $200,000. 
 
 The approximate cost of the proposed legislation in sections 1 and 2 
 for the first fiscal year, from July 1, 1905, to June 80, 1906, may 
 therefore be summarized as follows: 
 
 Annual retainers to naval volunteers (3,000) $150,000 
 
 Subventions to 44 registered steamships of 203,871 tons at twelve months' 
 
 rate of $5 per ton 1, 019, 355 
 
 Subventions to 100,000 tons of square-rigged sailing vessels at nine months' 
 
 rate of $4 per ton 400,000 
 
 Subventions to 100,000 tons of square-rigged sailing vessels at six months' 
 
 rate of $2.50 per ton 250,000 
 
 Subventions to 150,000 gross tons of registered schooners at six months' 
 
 rate of 12.50 per ton 375,000 
 
 Subventions to 50,000 tons of deep-sea fishing vessels at nine months' rate 
 
 of $4 per ton 200,000 
 
 Total 2,394,355 
 
 For the first year the increased tonnage taxes provided for in sec- 
 tion 8 of the proposed bill would furnish a total revenue of $3,025,529, 
 out of which there would be remitted to American vessels carrying 
 the required quota of boys — naval volunteers and apprentices— tie 
 amount of $210,320. 
 
BEPOET OP AMEBlOAif MEBOHANT MARINE 00MMI8SION. XXXVlt 
 THE COST OF NEW OCEAN MAT T, KOUTES. 
 
 The maximum subventions required for the complete service on the 
 ten new ocean mail routes authorized by the proposed bill amount to 
 $2,665,000. This is the expenditure which must not be exceeded, but 
 as the contracts are to be let to the lowest responsible bidders it is 
 
 Eossible that the actual final cost may be considerably less than this. 
 [owever, assuming that $2,665,000 is the maximum, it may be said in 
 the beginning that this full expenditure can not be reached for at least 
 three years, for the majority of the ten new mail routes provided are 
 absolutelj^ new. There are, for example, no American ships whatever 
 now running on the routes to Brazil or Argentina or South Africa, or 
 in the Gulf of Mexico to Mexico and Central America. Moreover, 
 there are few steamships now in existence in the United States quali- 
 fied for this service, especially for the long lines southward beyond 
 the equator. Nearly all of the tonnage required for these mail routes 
 in the Atlantic, and a large part of that required in the Pacific, will 
 have to be designed, launched, and completed, and fully three years 
 will be necessary for this undertalung. 
 
 Even assuming that the few steamships that could be adapted to this 
 mail service will be diverted from their present use, no more than one- 
 fourth of the maximum of $2,665,000, or $666,250, could in all prob- 
 ability be expended on the new mail routes within the first fiscal year. 
 
 The United States is now paying a considerable sum of money for 
 the carrying of ocean mails, on the weight basis, to American and for- 
 eign steamers on the new proposed mail routes. This sum amounted 
 to $158,401.46 in the fiscal year ending June 30, 1904. At least two- 
 thirds of this, or about $100,000, will be saved when the new mail routes 
 are established, and should therefore be deducted from the maximum 
 estimate of $2,665,000, leaving a net maximum cost of $2,565,000. 
 
 Moreover, the important fact should be emphasized right here that 
 the United States is the only mercantile nation in the world that makes 
 any profit out of its ocean mail service. Great Britain, for example, 
 ak es the entire income from its ocean mails and devotes it, with sev- 
 tral million dollars more, to the encouragement of its chief lines of 
 steamships. 
 
 The United States, on the other hand, according to the report of 
 the Superintendent of Foreign Mails for the fiscal year ending June 
 30, 1904, actually made in that year $2,579,336 beyond the net cost of 
 the service, exclusive of the cost of transferring the articles between 
 the United States exchange post-offices and the United States post- 
 offices at which they were mailed or delivered. There will be general 
 agreement that at least this apparent profit on the ocean mail service 
 of the United States ought to be turned back to the encouragement of 
 our ocean mail lines, and that is exactly what is contemplated in the mail 
 subvention clause of the proposed legislation. In effect, the annual — 
 not the accumulated — profit from our ocean mail service is hereafter 
 to be devoted to the upbuilding of American steamship communica- 
 tion with distant markets. Great Britain goes beyond this, and 
 apj)lies to this purpose two or three millions more annually. The 
 United States can at least afford to utilize in this way the full amount 
 of its ocean-mail net income. 
 
 The maximum expenditure for the mail service, it should be remem- 
 bered, can not be reached before the fiscal year beginning July 1, 
 1908. 
 
XXXVm EEPOET OF AMERICAN MEBOHANT MAKIKE 0OMMI8SIOK. 
 
 The total expenditures for the first year, from July 1, 1905^ ^ ^^^^ 
 
 30, 1906, under the proposed bill, for naval retainers, subventions, ana 
 
 mail subventions, all included, would therefore be: 
 
 XT , . • J V 4-- $2, 394, 355 
 
 Naval retainers and subventions * ' Pgg' 050 
 
 Mail subventions (one-fourth of maximum) ' 
 
 Total 3,060,605 
 
 As to the probable rate of increase in the expenditures for the naval 
 retainers and subventions to general shipping, it may be said tHat me 
 proposed legislation would prove satisfactory if it added the second 
 year 3,000 ntval volunteers, at a cost of 1150,000, and 100,000 tons of 
 new merchant and fishing tonnage of an effective type, m the ratio of 
 75,000 tons of steam to 25,000 tons of sail, the cost being *375,000 and 
 $100,000, respectively, or a total increase for men and ships of 
 $635,000— making an aggregate expenditure for the fiscal year ending 
 June 30, 190T, of |3,029,365. 
 
 A JUST MEASURE OP KETAUATION. 
 
 An important memorial in regard to discriminating duties, which 
 has been submitted to the Commission by commercial organizations of 
 the central Northwest, states: 
 
 We believe that a great injury would result if the United States topk the Initiative 
 in discriminating against the ships or goods of other nations. But if other nations 
 discriminate against our products there should be a swift and severe retaliation. We 
 should not commence commercial warfare, but if others inflict injuries upon us we 
 must not shrink from vigorously protecting our own interests. If Great Britain 
 takes the initiative and discriminates unjustly and injuriously against our agricul- 
 tural export trade, then there should be invoked the old rule of conduct laid down 
 by our fathers nearly a century ago to meet similar cases of injustice. 
 
 This memorial calls attention to the fact that there is nothing in our 
 commercial agreement with Great Britain which could prevent Con- 
 gress from meeting such a discrimination against our agricultural 
 exports as involved in the proposed policy of Mr. Chamberlain by 
 invoking against British vessels in the indirect carrying trade the 
 retaliation authorized by section 23 of the Dingley law, as follows: 
 
 That no goods, wares, or merchandise, unless in cases provided for by treaty, shall 
 be imported into the United States from any foreign port or place, except in vessels 
 of the United States, or such foreign vessels as truly and wholly belong to the citizens 
 or subjects of that country of which the goods arethe growth, production, or manu- 
 facture, or from which such goods, wares, or merchandise can only be, or most usually 
 are, first shipped for transportation. All goods, wares, or merchandise imported 
 contrary to this section, and the goods wherein the same shall be imported, together 
 with her cargo, tackel, apparel, and furniture, shall be forfeited to the United States; 
 and such goods, wares, or merchandise, ships or vessel, and her cargo shall be liable 
 to be seized, prosecuted, and condemned in like manner, and under the same regula- 
 tions and provisions as have been heretofore established for the recovery, collection, 
 distribution, and remission of forfeitures to the United States by several revenue 
 laws. 
 
 As the Dingley law now stands, section 24 provides: 
 
 That the preceding section shall not apply to vessels or goods, wares, or merchan- 
 dioe imported in vessels of a foreign nation which does not maintain a similar reg- 
 ulation against vessels of the United States. 
 
 , The Northwest memorial suggests that there be provided an amend- 
 ment to section 24 of the Dingley law so that it shall at once be made 
 ready to give full effect to section 23 — 
 
 to protect any of our national interests against the aggression of maritime nations 
 doing a profitable freighting business with our people by our sufferance. By that 
 
BEPOET OF AMERICAN MERCHANT MARINE COMMISSION. XXXIX 
 
 means the maritime interests of Great Britain will understand that any injurious 
 discrimination on the part of that Government against our people and goods will 
 result in their exclusion from our indirect foreign freightage. This may or may not 
 check hostile discrimination against us, but it will compel the consideration that 
 there is more than one side to the proposition and that the injuries which we can 
 and will inflict would counterbalance any possible benefits which that nation might 
 receive by any preferential action against us. 
 
 The Commission heartily approves this plan for self protection as 
 outlined by the commercial organizations of the Northwest, and recom- 
 mends such action to Congress not only in defense of our agricultui-al 
 interests against a hostile policy, but as a possible and effective 
 method, if we are driven to it, of regaining for our ships an important 
 commerce now all but monopolized by the fleets of our aggressive 
 competitors. 
 
 THE TRANSPORT SERVICE. 
 
 In the hearings of last summer at Puget Sound and San Francisco 
 it was discovered that mercantile sentiment on the Pacific coast very 
 earnestly demanded the abandonment of the transport service to and 
 from the Philippines, on which the Government had entered from 
 necessity in the Spanish war. This transport service has been practi- 
 cally suspended on the Atlantic Ocean; it is only on the Pacihc that 
 it has been retained, and there it has been partly discontinued. But 
 several large transports, foreign-built vessels, are still in operation 
 between the Philippines and the Pacific seaboard, conveying not only 
 soldiers, but all manner of Government freight and supplies, and even 
 a considerable number of civilian passengers. 
 
 In other words, the Commission, instructed by Congress, on the 
 recommendation of the President, to investigate the feeble and even 
 desperate condition of the American merchant marine, found that the 
 Government itself was directly and powerfully contributing to the 
 decline of American merchant shipping on the Pacific Ocean by 
 operating rival lines of foreign-built craft, and depriving American 
 vessels, in a time of profound peace, of a business to which they were 
 legitimately entitled. Not only this, but it was insisted that the Gov- 
 ernment was actually conducting this business at a very much higher 
 price than that for which American shipowners were willing to perform 
 the service. 
 
 A MATTER OF BOOKKEEPING. 
 
 To all of the members of the Commission who visited the Pacific 
 coast, this procedure of the War Department appeared to be abso- 
 lutely indefensible. It is true that in his recent annual report, the 
 Quartermaster-General of the Army figures out a profit of $398,236 
 for the transport service as compared with the rates which commercial 
 steamers would have charged, but this profit, as a matter of fact, is 
 altogether due to a radical difference in bookkeeping methods between 
 commercial steamship companies and the Quartermaster's Department. 
 
 Steamship companies, like all other private business enterprises, are 
 compelled to pay taxes, to pay insurance rates— and marine insurance 
 is high — and to make large annual allowances for interest and deprecia- 
 tion. One of the witnesses before the Commission at San Francisco 
 was the major and quartermaster in charge of the army transport 
 service there. He was questioned as follows: 
 
 Bepresentative Minob. Major have you in your calculation made any allowance 
 for deterioration? 
 Major Devol. No, sir. 
 
XL REPORT OF AMERICAN MERCHANT MARINE COMMISSION. 
 
 Eepresentative Minor. Ordinarily, I believe, that is 5 per cent, is it not? 
 Major Devol. We do not carry that, neither do we carry mterest on investment. 
 Eepresentative Minor. Then you do not pay any taxes, of course, as shipowners 
 would have to pay? 
 Major Devol. No, sir. ^ ^ m 
 
 The Chairman. Do you insure the Government propert)^? 
 
 Major Dbvol. We never insure. 
 
 The Chairman. So you take that risk? 
 
 Major Devol farther stated that the original cost of the four 
 transports now performing the Manila service "could probably be 
 reckoned at $4,000,000 "—others were being held in reserve. The 
 usual allowance of a steamship company for taxes, interest, insurance, 
 and depreciation would not be far from 15 per cent per annum, or 
 about $600,000 on these four transports, to say nothing of the fixed 
 charges on the others — charges which the Quartermaster's Depart- 
 ment may ignore, but which can not be so lightly treated in the 
 economics of an ordinary business corporation. Of course these 
 charges would convert the profit of the transport service into an 
 undeniable deficit. 
 
 COSTLY AS WELL AS UNWISE. 
 
 And though these charges may be overlooked, they can not be 
 ignored. Deterioration proceeds as inevitably in the transport as in 
 the liner. Most of these foreign-built transports on the Pacific were 
 by no means new vessels when they were acquired. In general 
 efficiency and economy of operation they are not to be compared 
 with the new American-built commercial steamships which American 
 enterprise has put into service on the Pacific Ocean since the war 
 with Spain. A steamship manager at Seattle testified that his com- 
 pany could have saved the Government $150,000 in two years if the 
 supplies carried by an old foreign-built transport had been conveyed 
 by his new commercial steamers. Said this witness, Mr. Frank 
 W aterhouse, managing agent of the Boston Steamship Company: 
 
 I think I can show you that we can carry cargo cheaper than the Dix, for this 
 reason if no other. On the Dix there is no return cargo from the Philippine Islands. 
 All her cargo is one way. We could not begin to operate our line under any cir- 
 cumstances if we took cargo but one way. Now, we carry cargo both ways. Our 
 average earnings eastbound are fully as much as our average earnings westbound. 
 Of course, that is bound to tell in the cost. 
 
 Eepresentative Spight. In that way you are able to carry cheaper than the 
 Government? 
 
 Mr. W ATERHOUSE. Certainly; we carry cargoes both ways. 
 
 If the same bookkeeping methods by which such factors as taxes, 
 interest, insurance, and depreciation are entirely ignored, were applied 
 to other transactions, it could doubtless be proved beyond dispute 
 that the United States Government could not only conduct a steam- 
 ship business more cheaply than private shipowners, but that it could 
 make steel rails and woolen cloth and boots and shoes at a lower price, 
 that it could mine coal more cheaply, do -the country's banking and 
 operate its railroads. But if the United States Government is to 
 attack any industry as a competitor, it ought in all fairness to select 
 one that is prosperous and robust, and not set up as a rival to an 
 interest that, because of long continued neglect, is now fighting a 
 veritable battle for existence. 
 
 The two American steamship companies which regularly ply across 
 the Pacific to Asia and the Philippines are face to face with over- 
 
EEPOET OF AMEEIOAN MERCHANT MAEINE COMMISSION. XLI 
 
 whelming odds in the large subsidies enjoyed by the parallel lines of 
 Japanese and British steamers. The least that our Government could 
 do to aid these American lines would be to give them the carrying of 
 its own soldiers and their supplies. Neither Great Britain nor Ger- 
 many maintains a transport service. Both nations find it more satis- 
 factory and economical to make use of their regular commercial 
 steamers, and both nations thereby foster and encourage in a perfectly 
 legitimate way the enterprise of their shipowners and merchants. 
 The United States stands alone in denying this assistance to its 
 maritime interests. 
 
 SECRETARY EOOT's VIEW. 
 
 For some inexplicable reason, the gradual discontinuance of the 
 transport service of the United States, which Hon. Elihu Root noted 
 and commended in his annual report as Secretary of War in 1902, 
 seems now to have been arrested. Mr. Root spoke of the sale of some 
 transports and the laying up of others, and added; 
 
 In October bids were invited from commercial lines for transportation of passen- 
 gers and freight for the Army between San Francisco, Portland, Seattle, and Tacoma 
 and Manila until Jtme 30, 1903. A number of bids have been received, but the com- 
 parative advantage of operating under them has not yet been worked out, and no 
 contract has been awarded. As rapidly as it becomes apparent that the Govern- 
 ment business can be done more economically in any part or as a whole by this 
 method it is the purpose of the Department to follow the same course which has 
 been followed upon the Atlantic in discontinuing the use of Government transports 
 and to put the business in the hands of commercial lines on the basis of open 
 competition. 
 
 I am satisfied that it is practicable for private shippers to do ordinary business much 
 cheaper than it is possible for the Government to do it under the limitations which 
 rest upon Government action, and that they can afford to do the business for less 
 than it costs the Government and still make a profit. At the same time, by follow- 
 ing this method, the Government will be aiding to build up regular commercial lines 
 between the Pacific coast and Manila, which is much to be desired. 
 
 The Commission earnestly indorses this authoritative recommenda- 
 tion, and urges Congress to complete as soon as possible the discon- 
 tinuance of the transport service, as a measure of economy, and a sure 
 and acceptable encouragement to American trade and navigation on 
 the Pacifac Ocean. The military power of the United States will be 
 not the loser, but the gainer, by an enlightened policy tending to 
 increase the number of modern American steamships available for use, 
 and to strengthen our commerce with the Orient. 
 
 AMERICAN SHIPS FOR THE CANAL TRADE. 
 
 A law of the United States requires that only American vessels shall 
 be used for the shipment by sea of all supplies and materials for the 
 Army and Navy, unless the President shall find that the rates of freight 
 are excessive and unreasonable. This is in accord with the regulation 
 or practice of all maritime powers, who never, save in exceptional 
 cases, intrust their public service of this kind to foreign shipowners. 
 
 Remonstrances have been sent to the Commission by American ship- 
 owners on both the Atlantic and Pacific oceans, that foreign vessels 
 were being used to the exclusion of American vessels for the trans- 
 portation of materials and supplies from the United States to the Isth- 
 mian Canal Zone. One case in particular is cited, where a considerable 
 amount of lumber was given to the Kosmos Line of German steamers 
 
XLII EEPOET OF AMEEIOAN MERCHANT MAEINE OOMMISSIOW. 
 
 from Puget Sound, though American shipowners offered substantially 
 the same freight rate— the difference being that the German bid was 
 on the basis of the delivery of partial lots, the American of entire car- 
 goes. Shipment in this case was arranged for by the contractors, the 
 Isthmian Canal Commission purchasing the lumber delivered on the 
 Canal Zone. At the time this lumber was given to the German ship- 
 owners a large number of steamers and sail craft were lying idle await- 
 ing charters in Puget Sound. If the lumber in question had been 
 purchased across the frontier in Canada while American mills stood idle 
 in consequence, there undoubtedly would have been sharp complaint 
 from American lumbermen. 
 
 Eear-Admiral John G. Walker, U. S. Navy (retired), chairman of 
 the Isthmian Canal Commission, has stated that hereafter contractors 
 for materials will be requested to include in their bids the estimated 
 cost of transportation by both American and foreign vessels. 
 
 CAKETING OUE OWN MATERIALS. 
 
 The Commission believes that the American people, who are build- 
 ing this canal with American money, prefer to have their materials 
 carried in American and not foreign ships, particularly as there is 
 always likely to be plenty of American tonnage available. This 
 delivery of canal supplies, machiner}^, etc., is a traffic adapted not 
 only to American vessels registered for foreign commerce, but to a 
 large part of the very much greater coastwise fleet on both the Atlantit' 
 and Pacific oceans. There are, all told, 3,24^,000 tons of shipping on 
 the Atlantic and 775,000 tons on the Pacific seabo.ard, and of this a 
 considerable part is composed of capacious seagoing vessels, steam 
 and sail, including scores of general cargo steamships and hundreds 
 of efficient schooners, especially equipped for coal and lumber carry- 
 ing. Not a few of these vessels are now engaged frequently in trade 
 to the Isthmus and beyond, and with these great fleets available, with 
 hundreds of individual owners, there need be no fear of lack of suit- 
 able tonnage, or excessive rates, or combinations to take advantage 
 of the Government. 
 
 PROPEKLT RESERVED TO OUR SHIPS. 
 
 Therefore, the Commission has prepared and caused to be intro- 
 duced in the Senate and House of Representatives a bill requiring the 
 use of vessels of the United States, or belonging to the United States, 
 for the transportation of all supplies or materials for the Panama 
 Railroad and the Isthmian Canal, and also of all supplies or materials 
 for the naval station at Guantanamo. This bill does not extend our 
 coastwise laws to either Panama or Cuba; it raises no delicate ques- 
 tions of jurisdiction. It simply directs the use of American vessels 
 for the performance of certain public services. It is a simple, profit- 
 able, and effective method of encouraging the American merchant 
 marine, while at the same time protecting certain important public 
 interests. The Commission urges the immediate enactment of this 
 measure not only for what it will accompHsh, but as a declaration of 
 purpose that the isthmian waterway is to be American in something 
 more than name. 
 
BEPOBT OF AMEKIOAN MEEOHANT MARINE COMMISSION. XLIU 
 THE EECEPROOITr TRADE WITH CUBA. 
 
 In the important reciprocity agreement between the United States 
 and Cuba, not only are valuable exclusive advantages given to Cuban 
 productsin the American market through a reduction of customs duties, 
 but similar advantages are secured in the Cuban market to American 
 manufacturers, farmers, and merchants. Only American shipowners, 
 builders, and seamen are forgotten. The Cuban reciprocity treaty 
 contains no recognition whatever of the maritime interests of the 
 United States. 
 
 Fortunately it is not even now too late to remedy this oversight. 
 Another treaty governing our general commercial relations with the 
 Cuban Republic remains to be negotiated, and the Commission recom- 
 mends that, as a delayed but none the less merited act of justice to the 
 shipping industry, this commercial treaty should be made to provide 
 for reserving the transportation of this reciprocal commerce to vessels 
 already registered or hereafter built in the United States or Cuba. It 
 is not suggested that the coastwise principle be sweepingly applied, 
 and foreign vessels be excluded altogether from trade between 
 American and Cuban seaports, but rather that the benefits of the recip- 
 rocal reduction of duties in either country be granted only to merchan- 
 dise conveyed in vessels of the contracting governments. The United 
 States and Cuba have just as good a right to make a reciprocity agree- 
 ment with regard to their shipping as they have with regard to their 
 manufactures or their agriculture, and broad considerations of equity 
 as well as of prudence demand that such a shipping agreement be 
 concluded as soon as possible. 
 
 FOREIGN FLAGS NOW DOMINANT. 
 
 At present foreign flags cover the larger part of the transportation 
 between Cuba and the United States. Of total imports from the 
 island, valued at $62,813,362 in the fiscal year 1903, $22,490,644, or 
 only 35.80 per cent, were conveyed in American, and $40,322,718, or 
 64.20 per cent, in foreign shipping. In the export trade to Cuba 
 American vessels significantly make a better showing. Of total 
 exports to the island, valued at $21,760,842, $11,792,402, or 64.19 per 
 cent, were conveyed in American, and $9,968,440, or 45.81 per cent, 
 were conveyed in foreign shipping. Of the entire commerce between 
 the United States and Cuba, both imports and exports included, valued 
 at $84,574,204,- only $34,283,046, or 40.54 per cent, were carried in 
 American, and $50,291,158, or 59.46 per cent, were carried in foreign 
 shipping. 
 
 If all of this reciprocal commerce were secured for American and 
 Cuban vessels, in the manner indicated, an important advantage would 
 be gained for the American merchant marine, and not only for the 
 American fleet but also for the native shipping of Cuba. It is desir- 
 able for purposes of defense, as well as for the promotion of com- 
 merce, that there should be adequate building and repair yards, proper 
 docks, and a capable and experienced naval reserve of oflScers and sea- 
 men established on the coast of Cuba, as well as on the neighboring 
 Gulf and South Atlantic coast of the United States. These indispen- 
 sable advantages can never be secured for either the United States or 
 
XLIV EBPOET OF AMEEIOAN MEEOHANT MAEINE COMMISSION. 
 
 Cuba SO long as ships built in Europe, owned there, oflBcered and 
 manned there, and repaired there, dominate the growing trade between 
 the island and the mainland. 
 
 The peculiar closeness of the relations between the new Republic and 
 the United States imperatively forbids a longer continuance of Euro- 
 pean control over the larger part of their means of communication. 
 
 THE NORTH ATLANTIC MAIL SERVICE. 
 
 None of the new mail routes proposed by the bill runs to a European 
 port. There is nothing in this measure, as has franklv been acknowl- 
 edged, to encourage the building of expensive "greyhounds" for the 
 mail, passenger, and express cargo service to Great Britain and the 
 Continent. The Commission has not been forgetful of this important 
 part of our commerce, nor is there any disposition to ignore it, 
 especially as the President of the United States, in his message to Con- 
 gress recommending the creation of this Commission, made significant 
 reference to this very service, saymg : 
 
 While such a measure is desirable ia any event, it is especially desirable at this 
 time, in view of the fact that our present governmental contract for ocean mail with 
 the American Line will expire in 1905. Our ocean-mail act was passed in 1891. In 
 1895 our 20-knot trans- Atlantic mail line was equal to any foreign line. Since then 
 the Germans have put on 23-knot steamers and the British have contracted for 24- 
 knot steamers. Our service should equal the best. If it does not, the commercial 
 public will abandon it. If we are to stay in the business, it ought to be with the 
 full understanding of the advantages to the country on the one hand, and on the 
 other with exact knowledge of the cost and proper methods of carrying it on. 
 
 During the past few weeks the Commission has given particular 
 attention to this important phase of the inquiry in its sessions in 
 Washington, and expert engineers, ship builders, and steamship man- 
 agers have been invited to present their views as to the difficult prob- 
 lem of the North Atlantic fast mail and passenger service. But the 
 Commission regrets to say that information that would be adequate to 
 guide the action of our Government has not yet been secured. 
 
 A COMPLICATED PROBLEM. 
 
 The problem, a formidable one at best, is further seriously compli- 
 cated at the present time by the partial development of the turbine 
 principle in marine propulsion. The two new giant Cunard steam- 
 ers will be of this type, yet untried on a large scale in transoceanic 
 navigation, though perhaps destined to work almost another revolu- 
 tion in marine architecture. Besides the Cunard ships, two Allan 
 Line steamers of large size, but moderate speed, are being completed 
 in Great Britain for the Canadian mail service, and conflicting reports 
 as to the trial performances of the first of these vessels make a posi- 
 tive recommendation seem all the more premature and ill advised. 
 
 Meanwhile, though American builders have thus far produced no 
 large ocean-going turbine steamer, some creditable experimental work 
 has been done in the United States, and some of our own engineers 
 are advancing on original lines toward results that promise to be of 
 the very first importance. 
 
 These considerations naturally make the Commission all the more 
 reluctant to form conclusions that must be based on European practice 
 though that practice confessedly has not yet passed beyond the experi- 
 
EEPOBT OF AMEBIOAN MEEOHANT MARINE OOMMISSIOIT. XLV 
 
 mental stage. When it is remembered that steam was first practically 
 applied to the driving of both war ships and merchant ships in the 
 United States, that the first steamer that crossed the Atlantic was 
 American, that the first satisfactory use of the screw propeller on a 
 large scale was made here, and that as late as 1860 American-built 
 steamships held on the North Atlantic the same relative position 
 toward other ships as the huge twin Cunarders will hold if tiiey are 
 successful^when all this is recalled, it is not unreasonable to expect 
 that the best marine turbine may yet prove to be wrought out by 
 American technical skill and boldness of invention. 
 
 Moreover, the enormous new Cunard subvention of $1,100,000 for 
 twenty years, combined with the extraordinary liberality of the 
 British Government in loaning to the company at a nominal rate the 
 $13,000,000 required to build the new ships, introduces another factor 
 that forbids an immediate recommendation to Congress. It is esti- 
 mated that with the other generous terms of the contract this sub- 
 vention is worth to the Cunard Line the equivalent of $2,000,000 or 
 $2,500,000 a year, which would have to be more than offset in amount 
 to produce a corresponding American ocean mail service — covering 
 the higher range of American ship wages and cost of construction. 
 Manifestly the American people, whatever their final decision may be, 
 would hesitate to embark on such a scale of expenditure as this while 
 the imperative technical question of whether the turbine is to sup- 
 plant reciprocating engines as the screw propeller supplanted the side 
 wheel is still undetermined. 
 
 Therefore the Commission, though fully realizing the commercial 
 and political importance of the fast North Atlantic mail service and the 
 value of these great "merchant cruisers" to the national defense, is 
 unwilling at this time to recommend any specific legislation to Congress. 
 But the Commission does insist with the utmost earnestness that the 
 United States can not afford to disregard the mighty transition that 
 seems to be impending in the Nortn Atlantic; a change which, if 
 ignored by our Government, may result in the complete loss of even 
 our present inadequate share of the noblest field of ocean navigation. 
 
 Congress owes it to the commercial welfare and the naval security 
 of the country to make provision at once for an especial, vigilant study 
 of the North Atlantic steamship service as affected not only by the 
 extraordinary new British subventions, but by the approaching intro- 
 duction of the turbine high-speed engines on the all-important mail 
 and passenger routes between America and Europe. 
 
 tTBGENT NEED OF IMMEDIATE BELIEF. 
 
 In the midst of a general condition of buoyant prosperity the 
 American merchant marine in over-seas trade alone of our great 
 national industries is, and long has been, depressed and declining. The 
 slight temporary increase of registered tonnage, due in large part to 
 ( auses growing out of the Spanish war, has now come to an end, and the 
 absolute cessation of shipbuilding for ocean commerce shows that the 
 country is on the verge of a swift and heavy shrinkage in the small 
 registered fleet still left to it — a fleet actually smaller by 100,000 tons 
 than that of 1810. If there is to be remedial legislation it must be 
 
XLVI REPORT OF AMERICAN MERCHANT MARINE COMMISSION. 
 
 prompt and energetic. Delay only increases the cost and intensifies 
 the difficulty of the undertaking. 
 
 It may be said without exaggeration that there is not a large ocean 
 shipyard in America, and not an ocean steamship company, except the 
 few mail lines operating under the act of 1891, that is not looking to 
 instant and vigorous remedial legislation by Congress as the one hope 
 of its continued existence. Within a few weeks an important ship- 
 yard on the Delaware Eiver, after a long and brave fight against 
 adversity, has succumbed and gone into the hands of receivers. This 
 yard has a splendid modern plant, zealous and capable managers, and 
 the prestige of an active career of half a century. The American 
 Government and people may well ask themselves this grave question: 
 Where in a few years can they find solvent shipyards to contract with 
 to build their battle ships and cruisers unless the complete paralysis 
 now threatening this great industry is speedily arrested b^' national 
 laws? 
 
 If the passage of the legislation proposed by the Commission is post- 
 poned to the next session of Congress a condition already desperate 
 will have become still more desperate. The time to act is now. The 
 Commission has prepared a conservative measure, aiming to achieve 
 its purpose at a minimum cost, fair to all sections and interests, and 
 directed especially to the strengthening of the national defense and 
 the extension of American commerce to new and distant markets. 
 The Commission can see no reason why a cautious measure of this 
 kind, making no large immediate draft upon the national revenues, 
 can not be passed at the present session of Congress. 
 
 With all possible emphasis, therefore, the Commission recommends 
 that the following bills which will be reported from the Commission 
 and introduced into the two Houses of Congress, be taken up promptly, 
 and after reasonable debate advanced to enactment. 
 
 A BILL To promote the national defense, to create a force of naval volunteers, to 
 establish American ocean mail lines to foreign markets, to promote commerce, and 
 to provide revenue from tonnage. 
 
 Be it enacted hy the Senate and House of Rmresentatives of the United 
 States of America in Congress assembled. That the Secretary of the 
 Navy and the Secretary of Commerce and Labor shall cause to be made 
 an enrollment of oflJcers and men now and hereafter employed in the 
 merchant marine and deep-sea fisheries of the United States who may 
 be capable of rendering service as naval volunteers in time of war. 
 No man shall be thus enrolled who is not a citizen of the United States 
 or who has not declared his intention to become a citizen. Any naval 
 volunteer who, having declared his intention to become a citizen, 
 fails to complete his naturalization according to the provisions of 
 title thirty of the Revised Statutes, shall be stricken from the rolls. 
 These naval volunteers shall be enrolled for a period of three years, 
 during which period they shall be subject to render service on 
 call of the President in time of war. They shall also possess such 
 qualifications, receive such instruction, and be subject to such regu- 
 lations as the Secretary of the Navy may prescribe. The Secretary 
 of the Treasury is hereby authorized and directed, upon proper 
 audit, to pay, out of any money in the Treasury not otherwise 
 
BEPOET OF AMEBIOAN MEEOHANT MAETNE 0OMMI8SIOW. XLVn 
 
 appropriated, to each officer or seaman thus enrolled and employed in 
 the foreign trade or deep-sea fisheries, as hereinafter provided, an 
 annual retainer as follows: For each master or chief engineer of a 
 vessel of the United States of five thousand gross tons or over, one 
 hundred dollars; for each master or chief engineer of a vessel of the 
 United States of one thousand gross tons or over but of less than five 
 thousand gross tons, eighty-five dollars; for each master or chief 
 engineer of a vessel of the United States under one thousand gross 
 tons, seventy dollars ; for each mate or assistant engineer of a vessel 
 of the United States of five thousand gross tons or over, seventy dollars; 
 for each mate or assistant engineer of a vessel of the United States of 
 one thousand gross tons or over but of less than five thousand gross 
 tons, fifty-five dollars; for each mate or assistant engineer of a vessel 
 of the United States under one thousand gross tons, forty dollars; for 
 each seaman, twenty -five dollars; for each boy, fifteen dollars. Such 
 retainer shall be paid at the end of each year of service on certificate 
 by an officer, to be designated by the Secretary of the Navy, that the 
 naval volunteer has satisfactorily complied with the regulations, and 
 on certificate by the Commissioner of Navigation that such volunteer 
 has served satisfactorily for at least six months of the preceding twelve 
 months on vessels of the United States in the foreign trade or in the 
 deep-sea fisheries. 
 
 Seo. 2. That in the interest of the national defense and for the per- 
 formance of the public services hereinafter specified, after July first, 
 nineteen hundred and six, the Secretary of the Treasury is hereby 
 authorized and directed to pay, subject to the provisions of this act, 
 out of any money in the Treasury not otherwise appropriated, to the 
 owner or owners of any vessel hereafter built and registered in the 
 United States or now duly registered by a citizen or citizens of the 
 United States (including as such citizens any corporation created under 
 the laws of the United States or any of the Slates thereof^, subven- 
 tions as hereinafter provided; that is to say, (a) the sum of five dollars 
 per gross registered ton for each vessel which has been engaged in the 
 foreign trade by sea or the deep-sea fisheries for a period of twelve 
 months, including time necessarily consumed in making annual or 
 extraordinary repairs; (b) the sum of four dollars per gross registered 
 ton for each vessel which has been engaged in the foreign trade by sea 
 or the deep-sea fisheries for a period of nine months or over, but less 
 than twelve months, including time necessarily consumed in making 
 extraordinary repairs; (c) the sum of two dollars and fifty cents per 
 gross registered ton for each vessel which has been engaged in the 
 foreign trade by sea or the deep-sea fisheries for a period of six months 
 or over, but less than nine months, including time necessarily con- 
 sumed in making extraordinary repairs: Pi'ovwLed, That if, for reasons 
 satisfactory to the Secretary of Commerce and Labor, a vessel is idle 
 for more than one month when not undergoing repairs or receiving or 
 discharging cargo the subvention shall be reduced pro rata. 
 
 Seo. 3. That before receiving any subvention under the provisions 
 of this act the owner or owners of any vessel shall contract, in writ- 
 ing, with sufficient sureties, with the Secretary of Commerce and 
 Labor to fulfill each and all of the following obligations: 
 
 First. That said vessel may be taken and used by the United States, 
 for the national defense or for any public purpose, at any time, upon 
 payment to the owner or owners of the fair actual value of the same 
 
 3a— 04 ^iv 
 
■yr.VTTT EEPOET OF AMEBIOAN MERCHANT MARINE COMMISSION. 
 
 at the time of the taking, or a fair rate of hire to be agreed upon. 
 And if there shall be a disagreement as to such fair actual value or 
 fair rate of hire between the United States and the owner or ownere 
 of such vessel, then the same shall be determmed by two impartial 
 appraisers, one to be appointed by each of said parties, they *« select 
 a third, who shall act in such appraisement in case the two shall tail 
 
 ^slc^ond. That said vessel shall carry, free of charge^ the mails of the 
 United States, if the Postmaster-General shall so require, for the whole 
 or any part of a voyage for which subvention shall be claimed. 
 
 Third. That upon each departure of said vessel from the Umted 
 States at least one-sixth of the crew shall be citizens of the United 
 States, or men who have declared their intention to become citizens. 
 
 Fourth. That a vessel employed in the foreign trade shall maintain 
 during the period so employed at least class Al if a steam vessel and 
 at least class Ali if a sail vessel, as such classes are now established by 
 either the Record of American and Foreign Shipping or the United 
 States Standard Owners, Builders, and Underwriters' Association, or 
 equivalent classification in any other register of shipping of at least 
 equal merit. 
 
 Fifth. That all ordinary repair or overhauling of said vessel shall be 
 made in the United States, except in cases where drydocking is neces- 
 sary and no dry dock of sufficient capacity shall be within a distance of 
 five hundred miles of the location of the ship when the repairs shall be 
 desired. 
 
 Sixth. A vessel shall not be entitled to the subvention above pro- 
 vided for unless during the period of employment in the foreign trade 
 or deep-sea fisheries the following proportions of the crew of the ves- 
 sel after the dates specified shall have been enrolled in the naval vol- 
 unteers: After July first, nineteen hundred and seven, one-eighth; 
 after July first, nineteen hundred and eleven, one-sixth; afterJuly 
 first, nineteen hundred and sixteen, one-fourth: Provided, That if the 
 foregoing stated proportions of naval volunteers can not be obtained 
 at a foreign port with reasonable effort, as certified by the consul, other 
 persons may be substituted until the first return of said vessel to the 
 United States without forfeiture of the subvention. 
 
 Sec. 4. That the contracts provided for in section three shall be for 
 a period of one year, and shall be renewed from time to time; but no 
 vessel shall receive a subvention under the provisions of this act for 
 a longer period than ten years. At the expiration of each annual con- 
 tract the owner of the vessel shall be required to prove to the satisfac- 
 tion of the Secretary of Commerce and Labor, in such manner as the 
 said Secretary shall prescribe, that it obligations each and all have 
 been satisfactorily complied with. The Secretary of Commerce and 
 Labor shall thereupon certify to the Secretary of the Treasury the 
 amount of subvention to which said owner shall be entitled in fulfill- 
 ment of said contract and of the provisions of this act, and the Secre- 
 tary of the Treasury upon proper audit shall thereupon pay the 
 subvention due. 
 
 Sec. 5. That the Postmaster-General is hereby authorized and directed 
 to enter into contracts, for a term not less than five nor more than ten 
 years in duration, with citizens of the United States for the carrying 
 of nmils on steamships hereafter built and registered in the United 
 
REPORT OF AMERICAN MERCHANT MARINE COMMISSION. XLIX 
 
 States, or now duly registered by a citizen or citizens of the U nited States 
 (inclading as such citizens any corporation created under the laws of 
 the United States or any of the States thereof), between ports of the 
 United States and foreign ports on the routes, at the rates of speed and 
 for the amounts prescribed in section six of this act. All the provisions 
 of the act of March third, eighteen hundred and ninety-one, entitled 
 "An act to provide for ocean mail service between the United States 
 and foreign ports, and to promote commerce," are hereby made appli- 
 cable in all respects to the services provided for in section six of this 
 act: Provided^ That the specific rates of compensation provided for in 
 section five of said act of March third, eighteen hundred and ninety- 
 one, shall not apply to the services provided for in section six of this act. 
 
 Sec. 6. That as soon as may be practicable, the Postmaster-General 
 shall establish in the manner prescribed in section five the following 
 ocean mail services: 
 
 First. From a port of the Atlantic coast of the United States to 
 Brazil, on steamships of the United States of not less than fourteen 
 knots speed, for a monthly service at a maximum compensation not 
 exceeding one hundred and fifty thousand dollars a year, or for a fort- 
 nightly service at a maximum compensation not exceeding three hun- 
 dred thousand dollars a year. 
 
 Second. From a port of the Atlantic coast of the United States to 
 Uruguay and Argentina, on steamships of the United States of not 
 less than fourteen knots speed, for a monthly service at a maximum 
 compensation not exceeding one hundred and eighty-seven thousand 
 five hundred dollars a year, or for a fortnightly service at a maximum 
 compensation not exceeding three hundred and seventy-five thousand 
 dollars a year. 
 
 Third. From a port of the Atlantic coast of the United States to 
 South Africa, on steamships of the United States of not less than twelve 
 knots speed, for a monthly service at a maximum compensation not 
 exceeding one hundred and eighty -seven thousand five hundred dollars 
 a year, or for a fortnightly service at a maximum compensation not 
 exceeding three hundred and seventyrfive thousand dollars a year. 
 
 Fourth. From a port of the United States on the Gulf of Mexico to 
 Brazil, on steamships of the United States of not less than twelve knots 
 speed, for a monthly service at a maximum compensation not exceed- 
 ing one hundred and thirty -seven thousand five hundred dollars a year, 
 or for a fortnightly service at a maximum compensation not exceeding 
 two hundred and seventy-five thousand dollars a year. 
 
 Fifth. From a port of the United States on the Gulf of Mexico to 
 Cuba, on steamships of the United States of not less than fourteen 
 knots speed, for a semiweekly service at a maximum compensation 
 not exceeding seventy-five thousand dollars a year. 
 
 Sixth. From a port of the United States on the Gulf of Mexico to 
 Central America, on steamships of the United States of not less than 
 twelve knots speed, for a weekly service at a maximum compensation 
 not exceeding seventy-five thousand dollars a year. 
 
 Seventh. From a port of the United States on the Gulf of Mexico 
 to Mexico, on steamships of the United States of not less than twelve 
 knots speed, for a weekly service at a maximum compensation not 
 exceeding fifty thousand dollars a year. 
 
L EEPOET OF AMBBIOAIf MEEOHANT MAEINE COMMISSION. 
 
 Eighth. From a port of the Pacific coast of the United States, via 
 Hawaii, to Japan, China, and the Philippines, on steamships of the 
 United States of not less than sixteen knots speed, for a monthly service 
 at a maximum compensation not exceeding three hundred thousand 
 dollars a year, or for a fortnightly service at a maximum compensation 
 not exceeding six hundred thousand dollars a year. 
 
 Ninth. From a port of the Pacific coast of the United States to Japan, 
 China, and the Philippines, on steamships of the United States of not 
 less than thirteen knots speed, for a monthly service at a maximum 
 compensation not exceeding two hundred and ten thousand dollars a 
 year; or for a fortnightly service, at a maximum compensation not 
 exceeding four hundred and twenty thousand dollars a year. 
 
 Tenth. From a port on the Pacific coast of the United States to 
 Mexico, Central America, and the Isthmus of Panama, on steamships 
 of the United States of not less than twelve knots speed, for a fort- 
 nightly service at a maximum compensation not exceeding one hundred 
 and twenty thousand dollars a year: Provided, That the requirements 
 of this section as to the rates of speed shall be deemed to be complied 
 with if said rates are developed during a trial of four hours' continu- 
 ous steaming at sea in ordinary weather in water of sufficient depth to 
 make the test a fair and just one, and if the vessels are maintained 
 in a condition to develop such speed at any time while at sea in 
 ordinary weather. This trial shall be made under the direction and 
 supervision of a board of naval officers which the Secretary of the 
 Navy shall appoint upon the application of the owner or owners of 
 the vessel to be tested. 
 
 Sec. 7. That all contracts hereafter made pursuant to the act of 
 March third, eighteen hundred and ninety-one, before mentioned, or 
 pursuant to sections five and six of this act, shall provide that on 
 each voyage the following proportion of the crew shall be enrolled 
 naval volunteers: After July first, nineteen hundred and seven, one- 
 eighth; after July first, nineteen hundred and eleven, one-sixth; and 
 after July first, nineteen hundred and sixteen, one-fourth: Provided, 
 That if the foregoing stated proportions of naval volunteers can not 
 be obtained at a foreign port with reasonable effort, as certified by the 
 consul, other persons may be substituted until the first return of said 
 vessel to the United States, without forfeiture of the compensation. 
 
 Sec. 8. That a duty of eight cents per net ton, not to exceed in the 
 aggregate eighty cents per net ton in any one year, is hereby imposed 
 at each entry by sea on all vessels which shall be entered in any port 
 of the United States from any foreign port or place in North America, 
 Central America, the West India Islands, the Bahama Islands, the 
 Bermuda Islands, the coast of South America bordering on the Carib- 
 bean Sea, or Newfoundland; and a duty of sixteen cents per net ton, 
 not to exceed in the aggregate one dollar and sixty cents per net ton 
 in any one year, is hereby imposed at each entry by sea on all vessels 
 which shall be entered in any port of the United States from any other 
 foreign port or place, not, however, to include vessels in distress or 
 not engaged in trade. 
 
 Sec. 9. That on proof to the satisfaction of the Commissioner of 
 Navigation that a vessel of the United States has on any foreign voy- 
 age carried a boy or boys, a citizen or citizens of the United States, 
 under twenty-one years of age, suitably trained during that voyage 
 in seamanship or engineering, in the proportion of one for such vessel 
 
REPORT OP AMERICAN MEEOHAKT MARDtE COMMISSION. M 
 
 and in addition one for each one thousand tons of ber net registered 
 tonnage, there shall be paid to the owner or owners of the vessel, out 
 of any money in tho Treasury not otherwise appropriated, an allow- 
 ance equivalent to eighty per centum of the tonnage duties paid in 
 respect of the entry in the United States of that vessel from that voy- 
 age: Provided, That such payment shall not be made after July first, 
 nineteen hundred and seven, except in respect of any boy who is 
 enrolled in the naval volunteers, or is an apprentice indentured in 
 accordance with law. 
 
 Sec. 10. That sections fourteen and fifteen of the act approved June 
 twenty -sixth, eighteen hundred and eighty-four, entitled "An act to 
 remove certain burdens on the American merchant marine and to 
 encourage the American foreign-carrying trade, and for other pur- 
 poses;" sections eleven and twelve of the act approved June nine- 
 teenth, eighteen hundred and eighty -six, entitled "An act to abolish 
 certain fees for official services to American vessels, and to amend the 
 laws relating to shipping commissioners, seamen, and owners of ves- 
 sels, and for other purposes;" section one of the act approved April 
 fourth, eighteen hundred and eighty-eight, entitled "An act to amend 
 the laws relating to navigation, and for other purposes;" so much of 
 section forty-two "hundred and nineteen of the Revised Statutes as con- 
 flicts with this act, and section forty -two hundred and thirty-two of the 
 Revised Statutes are hereby repealed. 
 
 Sec. 11. That this act shall take effect on July first, nineteen hun- 
 dred and five. 
 
 A BILL To provide for the use of vessels of the United States for public purposes. 
 
 Be it enacted lyy the Senate and Sovse of Bepresentatwes of the United 
 States of America in Congress assmibled. That vessels of the United 
 States or vessels belonging to the United States, and no others, shall be 
 employed in the transportation by sea from the United States of all 
 materials, supplies, machinery, and equipment employed on or used for 
 the Panama Railroad or for the construction and operation of the canal 
 across the Isthmus of Panama, and such vessels, and no others, shall 
 be employed in the return by sea to the United States of such mate- 
 rials, supplies, machinery, and equipment. 
 
 Seo. 2. That all naval supplies, materials, machinery, and equip- 
 ment sent to or returned by sea from the naval station at Gruantanamo, 
 Cuba, shall be transported in vessels of the United States or vessels 
 belonging to the United States, and no others. 
 
 Sec. 3. That any contractor for supplies or materials for use at 
 Guantanamo, or in the Canal Zone, shall comply with the provisions 
 of this statute under penalty of the forfeiture of said materials and 
 supplies brought to or taken from the Canal Zone, or Guantanamo, in 
 vessels other than those of the United States. 
 
 Seo. 4. That this act shall take effect thirty days after its passage. 
 
58th CoNGKESS, t SENATE. JEep't2755, 
 
 3d Session. \ \ Part 2. 
 
 DEVELOPMENT OF THE AMERICAN MERCHANT MARINE 
 AND AMERICAN COMMERCE. 
 
 January 9, 1905. — Ordered to be printed. 
 
 Mr. Mallort, from the Merchant Marine Commission, submitted the 
 
 following 
 
 VIEWS OF THE MINORITY. 
 
 [To accompany S. 6291.] 
 
 It is agreed by every observant man who has given thought to the 
 subject that our shipping interests in the foreign trade are in a deplor- 
 able condition. That something ought to be done to restore to Amer- 
 ican bottoms a reasonable percentage of our export and import carrying 
 trade is conceded by all; the only difference of opinion is as to what 
 the remedy should be. 
 
 A return to the discriminating-duty policy appears to be generally 
 favored, as shown by the hearings of the Merchant Marine Commis- 
 sion at the most important ports on the Atlantic, Pacific, and Gulf 
 coasts and on the Great Lakes. This was the policy of the fathers of 
 the Republic, under which our shipping interests were so marvelously 
 developed in our early history. Under this policy merchant ships 
 flying the American flag were seen in every miportant port of the 
 civilized world, and under its fostering care our ships carried more 
 than three-fourths of our exports and imports. Although our busi- 
 ness has increased so wonderfully that we are now the largest export- 
 ing nation in the world, with corresponding imports, only 8 or 10 per 
 cent of our foreign carrying trade is done in American bottoms. 
 
 The objections urged to a return to this system are based upon the 
 necessity of abrogating treaties with nearly all the maritime countries 
 and the fear of retaliation. That those treaties all operate to the great 
 disadvantage of the United States under present conditions is not 
 seriously denied in any quarter. They all provide, too, for abrogation 
 at the instance of either party to the convention upon the prescribed 
 notice, so that no element of bad faith could be charged if steps should 
 be taken to abrogate. In the light of our earlier experiences and in 
 view of the peculiar existing conditions, we think the fear of retaliation 
 is not well founded. In our infancy as a nation we not only faced this 
 danger courageously, but successfully, and our shipping industry pros- 
 pered far beyond anything we have witnessed since we bound ourselves 
 
MV BEPOBT OF AMBEIOAN MERCHANT MARINE COMMISSION. 
 
 by treaties to virtually surrender our business on the high seas. At 
 present the larger part of our exports are food and clothing products, 
 either in the raw or finished state, and the countries which are our best 
 customers can not afford to discriminate against our goods, because this 
 would only tend to increase the cost of necessaries to their own people. 
 
 The strongest argument presented against this policy is the fact that 
 about 40 per cent of our imports are of goods which are now on the 
 "free list," and that the only way to enforce discrimination in respect 
 to such imports would be to increase the "dutiable list." Of course, 
 we do not advocate an increased cost of imported goods to the Ameri- 
 can consumer, but with the treaties out of the way we might meet 
 this difficulty by imposing a low rate of duty on many of the imports 
 when brought in foreign bottoms, but still to be free from tariff when 
 brought in our own ships, and thus enable American vessels to com- 
 pete successfully with foreign ships in freight charges and at the same 
 time minimize the danger of increased cost to the consumer. What 
 we want to do is to give some assurance to our foreign-going ships 
 that they will have return cargoes, which would go far toward settling 
 the question of the carrying of our exports in our own bottoms. But 
 we are not willing, nor do we think it necessary, to commit ourselves 
 to the proposition that anything now upon the "free list" should be 
 made "dutiable." We prefer to take the chances of aiding our 
 merchant marine by, discriminating duties upon the 60 per cent of 
 imports now on the "dutiable list." 
 
 This, we believe, would result in permanent assistance to our languish- 
 ing shipping interests without imposing any additional burdens upon 
 the public. We wish to aid our merchant marine by reducing burdens, 
 not increasing them. It is also shown by the hearings before the 
 Commission that there is a material difference between the cost of con- 
 struction in American shipyards and in foreign. A part of this differ- 
 ence is due to the greater cost of labor, but this is largely overcome 
 jjy the greater efficiency of the American artisan and the use of 
 improved tools; but it appears to us that the unnecessary and exorbi- 
 tant tariff imposed upon steel and iron products is one of the greatest 
 impediments to cheaper ships in American yards. 
 
 The steel manufacturers in this country are the richest and best 
 equipped in the world, and have long since outgrown the necessity, if 
 any ever existed, for the protection accorded to "infant industries." 
 It is a shame and an outrage upon the American people that manufac- 
 turers in this country should be able to sell in foreign countries any 
 products of their factories at lower prices than are cnarged their own 
 countrymen at home. This condition applies with especial force to 
 the subject now under consideration. It has been conclusively shown 
 by testimony before this Commission that materials which enter into 
 the construction of ships are sold by our factories and laid down in 
 foreign shipyards for a price far below that charged at the mills to 
 our own people— a condition which could not exist but for the unjust 
 provisions of our tariff laws. Mr. Edward S. Cramp, of the Cramp 
 Shipbuilding Company, in May, 1904, stated to the Commission that 
 foreign shipbuilders were then paying only about $25 per ton for 
 materials that cost the American shipbuilder $40 per ton, "a handicap 
 against him of $16 per ton." 
 
 Mr. James C. Wallace, of the American Shipbuilding Company, 
 
BEPOET OP AMERICAN MERCHANT MARINE COMMISSION. LV 
 
 told the Commission at Cleveland, Ohio, June 28, 1904, that the 
 United States Steel Corporation was selling great quantities of steel to 
 foreign shipbuilders, delivered at Belfast, at $24 a ton, while the piice 
 charged at its Pittsburg mills was $32 a ton. Deducting $2 a ton for 
 ocean transportation and $1.40 for freight from Pittsburg to tide- 
 water, the steel trust is selling steel to foreigners at $20.60 per ton 
 that it sells to Americana at $32. As Mr. Wallace said, "That would 
 make $11.40 difference between the Pittsburg price to you and the 
 price abroad." Mr. Wallace estimated that an 8,900-ton ship would 
 require about 3,500 tons of steel materials, and that the discrimination 
 of $8 per ton would make a difference of $28,000 in the cost of con- 
 structing this ship here or abroad. He said that about four years ago 
 his company built two ships for the American Navigation Company at 
 a price about equal to the price for which they could be built in Eng- 
 land at that time. "Steel was then," he said, "very much lower 
 than it is to-day. The steel pools had not then been formed." 
 
 Mr. George W. Dickie, superintendent of the Union Iron Works, 
 &e largest shipbuilding plant on the Pacific coast, stated to the Com- 
 mission at San Francisco, that he was in a Scottish shipyard in 1900 
 when they were building a vessel almost exactly like one he was 
 building in his yards and ne saw there materials unloaded from a ship 
 from New York furnished by Carnegie & Co. at about $13 a ton less 
 than he was paying for the same material from the same mills. 
 
 A large number of others testified to the same effect. It can be seen 
 at once what an immense profit is given to the steel trust by the oper- 
 ation of law alone. A tariff whicn enables manufacturers to reap a 
 bonus of from $10 to $15 a ton in addition to the legitimate profits is 
 indefensible from any standpoint of honesty and fair dealing, and one 
 of the first steps in the interest of shipbuilding in the United States 
 ought to be to put at least all materials which enter into the construc- 
 tion of ships on the free list no matter whether intended for the foreign 
 or domestic trade. 
 
 The recent testimony, as well as the testimony given in former hear- 
 ings, and the statements of experts made in newspapers and magazines 
 during the last ten years, indicates that the cost of constructing ships in 
 American yards had, before the advent of Dingleyism and its brood 
 of cormorant trusts, gotten down to about the cost of constructing 
 ships in foreign yards. In the North American Review of January, 
 1892, Mr. Charles H. Cramp said that first-class ships could be .built 
 in American yards at about the cost of building them in foreign yards. 
 His words were, " Within as small a margin as would be likely to pre- 
 vail in a similar case between any two British shipyards." 
 
 In his testimony before the Merchant Marine Commission at Phila- 
 delphia on May 27, 1904, Mr. Edwin S. Cramp said: 
 
 For these restsons, enumerated above, the cost of ships in America, which at the 
 time of the begimiing of the McKinley Administration had approximated the cost of 
 the ships of a similar type by first-class builders in England within 10 or 15 per cent, 
 to-day can not be produced within 40 per cent. 
 
 In an article on the invasion of American goods in foreign markets 
 in the Grand6 Review, quoted in Consular Reports, March 8, 1900, 
 Mr. George Wenlersse said: 
 
 To-day ahipB may be bnilt at Bath, San Francisco, Philadelphia, Wilmington, 
 Chester, and Newport News as cheaply as anywhere in the world. 
 
tVl EEPOET OF AMEKIOAN MERCHANT MARINE OOMMISSIOlt. 
 
 Many other similar statements might be quoted. As far back as 
 1896 Mr. John Koaoh, the great shipbuilder, said: 
 
 The high cost of iron produced by the tariff upon it is one of the principal diffi- 
 culties our commerce has to contend with. I did not come here to ask a bounty, i 
 came here to tell you that, while all other articles of American produce are pro- 
 tected to a great extent, there is no protection for American ships. If Congress will 
 take oft all the duties from American iron, then we are prepared to compete with 
 foreign shipbuilders. The labor question is misstated. We are prepared to meet 
 that difficulty and to ask no further legislation on the subject. 
 
 Since then materials and supplies for our ships in foreign trade have 
 been put upon the free list. The testimony before the Merchant Marine 
 Commission shows that, for numerous reasons, this discrimination in 
 favor of our foreign ship builders and owners has been of no practical 
 benefit to them. One of the reasons, if not the prime one, is that ships 
 built from foreign materials, in whole or in part, can not be used in our 
 coastwise trade. To give our shipbuilders any benefit from free 
 materials the tariff must be removed from materials from all ships. 
 Probably also it will be necessary to remove the duties not only for 
 materials but from all materials sold cheaper abroad than at home. In 
 this way, and in this way only, will our shipbuilders be enabled to 
 obtain our materials at th^prices at which they are sold to foreign 
 shipbuilders. 
 
 There was some startling testimony as to the difference of prices of 
 materials to American and to foreign shipbuilders. Thus, Mr. Edwin 
 S. Cramp told the Commission that steel plates, shapes, angles, chan- 
 nel and bulb angles were, on May 27, 1904, selling at 1.75 cents per 
 pound while the prices ruling in England would permit these same 
 materials to be delivered, clear of insurance and freight, but no duty 
 paid, at Philadelphia for 1.40 cents per pound. He said that foreign 
 shipbuilders were then paying about $25 per ton for materials that 
 cost American builders about $40. 
 
 Thus far we have outlined briefly some measures for the relief of 
 our shipping interest which if enacted into law would, in our judg- 
 ment, accomplish substantial and permanent good without injustice to 
 any other American interest and without doing violence to any funda- 
 mental principle of right or of organic law. 
 
 We regret that we can not agree with the majority of the Commis- 
 sion in the legislation proposed. It would have been very gratifying 
 to us if a unanimous report could have been made, and we nave been 
 willing to make concessions in order to accomplish this result. While 
 there are objections to the entire bill as recommended by the majority, 
 we are disposed to withhold any opposition except to sections 2, 3, and 4. 
 These sections^ provide for direct subsidies, and are so obnoxious to 
 Democratic principles and to the economic sense of the country that 
 we are compelled to enter our earnest protest against their enactment 
 into law. 
 
 Its chief difference from former direct subsidy bills is that it is not 
 as honest as these bills were. It displaces the word "subsidy" with 
 the word "subvention" and through the explanation with which it is 
 launched seeks to create the impression that it only gives back to the 
 shipping industry what is taken from it, or rather that it gives back to 
 American ships what is taken in increased tonnage taxes from ships of 
 all nations. But, on the contrary, it places in the Treasury the amounts 
 to be received under it through tonnage taxes and takes out of the 
 
EBPOET OF AMEEIOAN MEEOHANl? MARINE COMMISSION. LVII 
 
 Treasury the appropriations provided for without any reference what- 
 ever to the relative amounts taken out and pint in — without any limi- 
 tation of the subsidy to the amount of the tonnage taxes — without any 
 sort of limitation of the total to be paid out of the Treasury now or 
 hereafter for the benefit of the merchant marine. 
 
 It will be remembered that the ship-subsidy bills first proposed 
 during the last decade carried unlimited appropriations for the benefit 
 of the shipping industry. The public sent'ment against such bills 
 was so strong that a limitation to nine miLions a year was made. 
 The bills were so drawn that a few companies would have gotten the 
 greater part of the benefit, and, because of public sentiment against 
 the principle of subsidies and the unfairness of the distribution pro- 
 posed, these bills wer'e abandoned. We had thought that by legisla- 
 tive concessions both to public sentiment and wise economics we were 
 through with subsidy bills and were to make an effort to devise other 
 means to build up the merchant marine. But we have come back very 
 nearly to the point from which we started, with the only difference 
 consisting in subterfuges and disguises. We can not but see in the 
 proposed bill the " trail of the serpent " that has been over all other 
 bills on this subject. 
 
 We mean no reflection of duplicity against our colleagues on the 
 Commission; but the situation seems to be such that they can not get 
 away from the idea of direct governmental aid. In this connection it 
 is pertinent to note that our friends of the majority have refused to 
 consider the theory of discriminating duties; have refused, with impa- 
 tience, any consideration of the theory of free ships; have refused to 
 make concessions of any sort through the protective-tariff system, 
 that has helped to stifle shipping along with many lines of individual 
 industry, and have come back to the most obnoxious plan of all — the 
 taxation of all the people for the benefit of the one industry which 
 they desire to help. Every argument that has been made against the 
 subsidy bills of former Congresses applies against the direct subsidy 
 features of this bill. 
 
 Section 2 ingeniously introduces the subject by the "sugar coated" 
 expression "in the interest of the national defense and for the per- 
 formance of public services." Will the Congress of the United States 
 and the American people suffer themselves to be deceived by this 
 transparent disguise? Public sentiment and the sober judgment of 
 the people's representatives have united to condemn every previous 
 effort to enact such legislation, and surely this effort must meet the 
 fate of its predecessors despite the canting phrase, "in the interest of 
 the national defense and for the performance of public services" and 
 the substitution of the more euphonious title "subvention" for 
 "subsidy." 
 
 Whatever objections to previous subsidy bills have been valid are of 
 equal weight to-day against this section. It was urged against the 
 previous bills that the cargo steamers received no consideration. A 
 comparison or two will show how little this section differs in that respect 
 from the previous bill. The Mmeola, a steamship engaged in foreign 
 trade on the Pacific coast, with a gross tonnage of 2,438, would receive, 
 under this section, $12,190; under S. 727, H. R. 64, Fifty-sixth Con- 
 
 fress, first session, and S. 6590, Fifty-fifth Congress, third session, 
 11,885. The Takoma^ 2,811 tons, under this bill would receive $14,056; 
 
LVIII EEPOET OF AMERICAN MERCHANT MARINE COMMISSION. 
 
 under S. 727, $14,505; H. R. 64, $19,116, and under S. 5590, $14,505. 
 In 1899 the Trrawaddy, of less than 12 knots speed, with a gross ton- 
 nage of 2,553, made 10 round trips between New York and Grenada. 
 
 This ship does not appear in the list of those registered for foreign 
 trade in the year 1904, but for all this can well be used for comparison. 
 Under this section she would receive $12,785; under S. 727, $13,020; 
 under H. R. 64, $13,020 also. The Umatilla, a 13-knot vessel of 3,069 
 tons, under this section would receive $15,345; under S. 727, $13,749; 
 and under H. R. 64, $15,261. (These estimates of subsidies under S. 
 727 and H. R. 64 are copied from the report of the Commissioner of 
 Navigation for 1900.) 
 
 It appears, then, that under a different guise the subsidy to cargo 
 vessels under the bills of the Fifty-sixth Congress and the subvention 
 under this section are almost identically the same thing. There are, 
 however, one or two differences between the subsidy bills and this 
 subvention section. S. 727 and H. R. 64, section 1 (a), both provide: 
 
 That no vessel shall be entitled to the full compensation under this clause unless 
 she shall have cleared from a port of the United States with cargo to the amount of 
 fifty per centum of her gross tonnage. 
 
 This section of the bill as proposed contains no such provision nor 
 any provision of any sort other than the agreement to turn the ships 
 oyer to the United States Government at any time for a fixed rate of 
 hire, to carry mails free of charge if asked to do so when on a sub- 
 vention voyage, and to have a certain small proportion of its crew 
 American citizens. 
 
 Section 9 of S. 727 and H. R. 64 prohibit the paying of a subsidy to 
 a vessel on a voyage extending to a foreign port less than 150 nautical 
 miles from her last point of departure in the United States. S. 5590, 
 section 6 {a), also contain the same exclusion. The reason for this 
 exclusion is given on page 62 of the report of the Commissioner of 
 Navigation for 1899. 
 
 A fair summary of the Commissioner's reason is: Americans already 
 control the trade. The vessels thus excluded have a varying tonnage 
 from 400 up to 3,000 and more— all told, about 25,000 or 30,000 
 tons. It may be said that this is a mere bagatelle of only $125,000 
 or $150,000, and perhaps it does make materially little difference 
 to the actual drain upon the treasury of the people. But the items 
 show clearly that this section proposed to give without restriction 
 $100,000 and more to steamship companies whichare already in control 
 of the trade almost as exclusively as if it was the coasting trade. We 
 have already made a comparison between this second section of the 
 proposed bill and S. 5590, showing that for all vessels under 10 knots 
 the subsidy or the subvention or the compensation or the bounty is 
 practically the same. The only apparent exception to this is in the 
 case of a vessel of a slow rate of speed of a tonnage of approximately 
 3,000 making foreign voyages of a less distance than 1,000 miles each 
 way. 
 
 In short, so far as the subvention under this section goes, this bill is 
 one of a double set of twins, the others being S. 5590, S. 727 and 
 H. R. 64. ' 
 
 Section 3: The different obligations incurred under this section by 
 the owners of the ships, so far as the percentage of Americans em- 
 ployed IS concerned, are not at all likely to make any change in the crew 
 The percentage, with possibly here and there an exception on the 
 
EEPOBT OF AMEEIOAN MEECHANT MAEIWE COMMISSION. LtX 
 
 Pacific coast, is doubtless as large now as is required by this section. 
 The total number of men required to man fully all the American sea- 
 going vessels which ^o out of sight of land is estimated by the Com- 
 missioner of Navigation, on page 26 of his report for 1903, to be not 
 more than 50,000. This includes sail and steam, deep-sea fisheries, 
 foreign and coast trade ships. Of the half million gross tons of steam- 
 ships registered for foreign trade in 1904, the 4 large ships of the 
 International Mercantile Marine Company, the 3 largest ships of the 
 Oceanic Company, 6 at least of the ships of the New York and Cuba 
 Mail Steamship Company, 3 of the Red D Line, and the 4 of the 
 Admiral Line are under contracts to carry mails under the postal acts 
 of 1891 and are in no way affected by this or any other section of this 
 bill. 
 
 Further, under section 6 of this proposed bill there will be a consid- 
 erable tonnage to enter upon the mail contracts proposed under that 
 section. The remaining registered steam tonnage, after these con- 
 tracts have been made of steamships engaged in foreign trade, six 
 months or more each year is less than 300,000. For the fiscal year 
 ending June 30, 1904, on both steamers and square-rigged sailing 
 vessels there were shipped only 42,000 Americans (native and nat- 
 uralized). This includes all the men shipped before United States 
 commissioners, and by no means was this number of men, or anything 
 like it, employed at any one time. Since there are, all told, engaged 
 in trade out of sight of land, steam and sail, less than 50,000 men; 
 since from 160,000 to 200,000 tons of the total of 600,000 registered 
 tons do not come under this section at all; since oflBcers are counted 
 as a part of the crew; since several of the steamships registered are 
 under 1,000 tons, it necessarily follows that the increase in the num- 
 ber of American citizens to be employed will be best represented by 
 zero. 
 
 In other words, this part of this section effects nothing, does 
 nothing. It is verbiage put in to fill our eyes and blind us to the 
 real purpose of the bill. The other items of this section are of equal 
 value. The enrollment of one-fourth of the crew in the naval vol- 
 unteers after 1916 is either more dust thrown in our eyes or else the 
 number of ships drawing subventions will be so large and the subven- 
 tions amount to so enormous a sum that we shrink from even an 
 attempt to estimate. 
 
 Section 4. This section provides that the contracts shall be for a 
 period of one year, and may be renewed from time to time. The re- 
 puted purpose of this bill, so far as subventions go, is, as we have 
 already said, "To promote the national defense and create a force of 
 naval volunteers," but according to this section the contract is to be 
 for a period of but one year, leaving the shipowner at perfect liberty 
 to decline to renew the contract for a second year if he sees signs of 
 war. 
 
 The Government, then, will be in no better condition so far as secur- 
 ing vessels for transport service or for naval volunteers than if this 
 act were not in existence. Of course, if the shipowners think that it 
 will be more profitable to them to turn their vessels over to the Gov- 
 ernment than to continue in trade, they will renew the contract and 
 receive pay for the use of their ships by the United States. But this 
 they would do in any event, subvention or no subvention. It is clear, 
 ihen, that with this limit of one year attached to the contract the 
 
tX EEPOBT OF AMEBIOAN MBROHANT MARINE COMMISSION. 
 
 Government will have paid these ships the subventions, and yet will 
 have no claim on them if the shipowners for any reason do not see fit 
 to renew from year to year. 
 
 "distinction between subsidy and subvention." 
 
 In the published reports of discussions relative to the question of 
 ship subsidy reference is frequently made to what is called a "sub- 
 sidy " paid by the British Government, the reason for the reference 
 generally being to claim that since England pays a ' ' subsidy " it is neces- 
 sary that we also should follow her example if our vessels are to com- 
 pete with British vessels. There is a radical mistake of fact involved 
 in such statements, and such mistake grows out of want of information 
 as to the distinction between a subsidy and the subvention paid by the 
 British Admiralty. That distinction is practically as broad as a differ- 
 ence between a gift and a purchase. A subvention is an annual pay- 
 ment made by the navy authorities, which from the standpoint of the 
 Government represents the advantage to the Government of having 
 ready for its use, when required, a certain number of steamers which 
 have been expressly constructed so as to be available as armed cruisers 
 or transports. From the standpoint of the shipowner this payment is 
 compensation for the increase of cost and diminished usefulness involved 
 in having the vessel so constructed under the Admiralty regulations 
 as to be available for use by the navy. 
 
 Vessels on which this subvention is paid are required to be constructed 
 according to plans approved by the Admiralty. These plans require 
 that the structure of the ship should be heavier and stronger than 
 would be the case in a passenger ship; gun platforms are constructed 
 on the decks, and the decks are built and supported so as to be ready 
 for the immediate mounting of heavy guns. This accomodation of the 
 structure of the ship to the needs of the Navy is computed by experts 
 to involve an increase of from 20 to 25 per cent in the cost of construc- 
 tion, and as this additional cost must be paid by the shipowner he is 
 called upon in building his vessel to sink from 20 to 25 per cent of the 
 cost in special structural work, which not only does not improve the 
 ship for commercial purposes but makes her heavier and diminishes 
 the space available for cargo and passengers. The increase of weight 
 caused by this special naval construction is computed to amount to 
 between 1,000 and 1,200 tons on such vessels as those which now carry 
 the mails between New York and England. 
 
 This means that at least 1,000 tons of cargo space which would 
 otherwise be available is permanently made unavailable by special 
 construction, and on every voyage the shipowner loses the freight 
 which he could otherwise earn on this 1,000 tons of added weight in 
 every voyage. Allowing a freight rate of 12. 50 per ton across the Atlan- 
 tic and allowing twelve voyages to the year (which is about the average 
 of mail-carrying vessels) this item of dead freight alone means a loss 
 of $60,000 a yearon each ship, aside from the original loss of from 20 
 to 25 per cent in increased cost of construction, and this increased cost 
 of construction, of course, involves a subsequent loss of interest on 
 the excess of cost, and a proportionate increase to the insurance and 
 depreciation account against the ship. 
 
 This heavy burden, which is thrown upon the shipowner when he 
 builds and runs such a vessel in ordinary business, is properly borne 
 
EEPOET OF AMERICAN MERCHANT MARINE COMMISSION, LXI 
 
 in part by the Government by means of an annual payment called a 
 "subvention." This payment is for value received, by the Govern- 
 ment and value lost by the shipowner. It is a purchase by the 
 Government of a preemptive right in vessels which are especially 
 constructed and kept under Admiralty rules. 
 
 On the other hand, a subsidy is a gift for which the Government 
 receives no direct equivalent and which is intended to assist a new 
 enterprise. These British subventions differ in principle and in effect 
 from subsidies. If the British Government, for naval purposes, chooses 
 to compensate shipowners for building and running auxiliary cruisers, 
 that is no reason why we, for commercial purposes, should make gifts 
 to our shipowners to increase their profits and so attract capital in the 
 ocean carrying trade. Subventions are based on military considera- 
 tions, while subsidies are an extension of the principle of Government 
 aid to certain industries, and a confusion of the two is a disregard 
 both of facts and of principles. 
 
 The foregoing are a few reasons why we can not support the bill as 
 favored by the majority of the Commission. We believe that the sub- 
 sidy features are wrong in principle and that it would result in an 
 enormous expenditure from the Treasury of the United States. We 
 believe that the argument that the money to be thus expended would 
 be in any appreciable degree derived from the increase of tonnage 
 taxes is utterly fallacious. If anything is accomplished toward the 
 building up of our own over-sea carrying trade a large and steady 
 decrease in the income from tonnage taxes is inevitable. It is equally 
 true that under the same conditions there would be a rapidly growing 
 increase in tha amount paid in the way of subsidies. 
 
 It will be observed also that, unlike other subsidy bills which have 
 been offered from time to time, there is absolutely no limit to the 
 amount which may be expended under this bill. It may be true, and 
 we hope it is, that for a short time the payments to naval volunteers 
 and the increased expenditures for ocean mail service can be met by 
 tonnage taxes and the profits from foreign mails; but it must be borne 
 in mind that the expenses of the Marine-Hospital Service which have 
 heretofore been paid from the fund arising from tonnage taxes must, 
 under the proposed bill, be met by a direct appropriation from the 
 Treasury. 
 
 A million dollars annually will be required for this purpose alone. 
 So it will be seen that with an accelerated decrease of the fund arising 
 from tonnage taxes and the lowering of the rate of profit from the 
 ocean mail service it would not be long until there would be an 
 increased drain from the National Treasury, leaving entirely out of 
 view the subsidies provided for in sections 2, 3, and 4 of this bill. 
 
 What this increase would amount to can hardly be conjectured. 
 What we do know is that the only limit is the number of vessels that 
 would apply for the subsidy. 
 
 S. R. Malloby. 
 
 Thos. Spight. 
 
 A. L. MgDebmoit. 
 
APPENDIXES. 
 
 Appendix A. 
 
 lOITHAOX O; THE XTSTTED STATES MEBCHANT MABINE EMPLOTES IK THE 
 POBEIGN TBASE, THE COASTINa XBASE, AND THE EISHEBIES, EBOU 1789 
 TO 1904. 
 
 Year ending- 
 
 Foreign 
 trade. 
 
 Begistered 
 
 Coasting 
 trade. 
 
 Enrolled 
 
 and 
 licensed 
 
 Wliale 
 fisheriea. 
 
 Begistered 
 
 and 
 
 enrolled 
 
 yessels. 
 
 Deep-sea 
 fisheries. 
 
 Enrolled 
 
 and 
 licensed 
 
 Total 
 
 mercbant 
 
 marine. 
 
 1824. 
 1825. 
 1826., 
 1827., 
 1828., 
 1829.. 
 1830.. 
 1831.. 
 1832.. 
 1833.. 
 1834.. 
 
 TOTU. 
 
 Toms. 
 
 201, 562 
 
 478,377 
 
 602,146 
 
 564,457 
 
 520, 764 
 
 628,61s 
 
 747,965 
 
 831,900 
 
 876,912 
 
 898, 32g 
 
 939,40g 
 
 972,492 
 
 947,676 
 
 892,106 
 
 949,172 
 
 1,042,404 
 
 1,140,367 
 
 1,208,787 
 
 1,268,«48 
 
 1,242,596 
 
 1,350,282 
 
 1,424,789 
 
 1,232,502 
 
 1,269,997 
 
 l,166,62g 
 
 1,169,200 
 
 1,368,128 
 
 1,372,219 
 
 1,399,912 
 
 1,226,186 
 
 1,260,750 
 
 1,280,167 
 
 l,298,95g 
 
 1,324,69a 
 
 1,336,666 
 
 1,389,163 
 
 1,423,111 
 
 l,534,19i 
 
 1,620,607 
 
 1,741,392 
 
 l,260,79g 
 
 1,191,776 
 
 1,267,846 
 
 l,439,45o 
 
 1,606,151 
 
 1,768^*07 
 
 a Joseph Nouree, Eegister of the Treasury, under date of February 1, 1812, stated; "Ab there were not 
 any accounts kept at the Treasury of the district tonnage of the United States prior to the operation 
 of the acts of Slat December, 1792, and 18th February, 1793, the statement in which is exhibited the 
 tonnage for the years 1789, 1780, 1791, and 1792 has been formed from the accounts of tonnage on which 
 duties were collected for those yeara." 
 
 >The decrease of tonnage in this year arises principally from the registered tonnage having been 
 corrected by striking oB all vessels tne registers of which were granted prior to 1815, which w i«re sup- 
 posed by the collectors to have been lost at sea, captured, etc.— Joseph Nouise, Begister of the Treas- 
 nry (American State Fapen, Vol. n, p. 648). 
 
 Sa— 04 Y 
 
 December 31 — 
 
 178911 
 
 1790a , 
 
 1791a 
 
 17920 , 
 
 1793 , 
 
 1794 
 
 1795 , 
 
 1796 
 
 1797 , 
 
 1798 , 
 
 1799 
 
 1800 
 
 1801 
 
 1802 
 
 1803 
 
 1804 
 
 1805. , 
 
 1806 , 
 
 1807 
 
 1808 , 
 
 1809 
 
 1810 
 
 1811 
 
 1812 
 
 181? 
 
 1814 
 
 1815 
 
 1816 
 
 1817 
 
 1818 
 
 1819 
 
 1820 
 
 1821: 
 
 1822 
 
 Tone. 
 123,893 
 346,254 
 363,110 
 411,438 
 367,734 
 438,863 
 529,471 
 876,733 
 597,777 
 603, 376 
 657,142 
 667,107 
 630,558 
 657,760 
 685,910 
 660, 614 
 744,224 
 798,507 
 840,163 
 766,262 
 906,866 
 981,019 
 763,607 
 768,636 
 672,700 
 674,683 
 854,295 
 800,760 
 804,861 
 6589,944 
 581,230 
 683,657 
 593,826 
 682,701 
 600,003 
 636, 807 
 665,409 
 696,221 
 701,517 
 757,998 
 692,859 
 637,663 
 638,136 
 614,121 
 648,869 
 749,378 
 
 Tom. 
 68, 607 
 103,776 
 106, 494 
 120,957 
 122,071 
 162,578 
 184,398 
 217,841 
 237,403 
 251,443 
 246,640 
 272,492 
 274,551 
 289,623 
 299,060 
 817,537 
 832,663 
 340,640 
 849,028 
 420,819 
 406,163 
 406,347 
 420,362 
 477,972 
 471,109 
 466, 169 
 475,666 
 622,166 
 525,030 
 549,374 
 671,058 
 588,026 
 614,846 
 624,189 
 617,806 
 641,563 
 640,861 
 722,330 
 789,159 
 842,906 
 508,858 
 616,979 
 539, 724 
 649,627 
 744,199 
 783,619 
 
 4,3?4 
 
 3,163 
 
 2,364 
 
 1,104 
 
 763 
 
 6,647 
 
 8,466 
 
 3,085 
 
 8,201 
 
 12,390 
 
 12,339 
 
 6,015 
 
 10,607 
 
 9,051 
 
 4,626 
 
 8,777 
 
 8,689 
 
 6,299 
 
 2,930 
 
 2,942 
 
 662 
 
 1,230 
 
 1,168 
 
 6,224 
 
 16,750 
 
 32.886 
 
 36,445 
 
 27,996 
 
 48,683 
 
 40,603 
 
 83,346 
 
 86,379 
 
 41,984 
 
 46,992 
 
 64,801 
 
 67,284 
 
 89,706 
 
 82,797 
 
 73,246 
 
 101,636 
 
 108,424 
 
 Tons. 
 9,062 
 28,348 
 32,542 
 32,062 
 80,959 
 23,048 
 30,933 
 34,962 
 40,628 
 42,746 
 29,979 
 29,427 
 39,382 
 41,522 
 61,812 
 52,014 
 67,466 
 69,183 
 70,306 
 61,998 
 34,487 
 34,828 
 43,234 
 30,469 
 19,877 
 17,865 
 86,937 
 48,126 
 64,807 
 69,107 
 76,078 
 72,040 
 62,293 
 69,226 
 78,255 
 77,447 
 81,462 
 73,666 
 83,939 
 86,687 
 101,797 
 97,629 
 107,189 
 102,466 
 111,447 
 117,486 
 
LXIV EEPOBT OF AMERICAN MERCHANT MARINE COMMISSION. 
 Tonnage of the United States merchant marine employed in the foreign trade, etc. — Cont'd. 
 
 Year ending. 
 
 September 30 — 
 
 1836 (9 months) 
 
 1836 
 
 1837 
 
 1838 
 
 1839 
 
 1840 
 
 1841 
 
 1842 
 
 June 30— 
 
 1843 (9 months) 
 
 1844 
 
 1845 
 
 1846 
 
 1847 
 
 1848 
 
 1849 
 
 1850 
 
 1851 
 
 1852 
 
 1853 
 
 1854 
 
 1855 
 
 1866 
 
 1857 
 
 1858 
 
 1859 
 
 1860 
 
 1861 , 
 
 1862 
 
 1863 
 
 1864 
 
 1865 
 
 1866 
 
 1867 , 
 
 1868 , 
 
 1869 
 
 1870 
 
 1S71 
 
 1872 
 
 1873 
 
 1874 
 
 1875 
 
 1876 
 
 1877 
 
 1878 
 
 1879 
 
 1880 
 
 1881 
 
 1882 , 
 
 1883 
 
 1884 
 
 1886 
 
 1886 
 
 1887 
 
 1888 
 
 1889 
 
 1890 
 
 1891 
 
 1892 
 
 1893 
 
 1894 
 
 1895 
 
 1896 
 
 1897.. 
 
 1898 
 
 1899 
 
 1900 
 
 1901 
 
 1902 
 
 1903 
 
 1904 
 
 Foreign 
 
 trade. 
 
 Beglsteted 
 
 Tans. 
 788,173 
 753, 
 
 683, 
 702; 
 702, 
 762, 
 788, 
 823, 
 
 866, 
 900; 
 904, 
 943, 
 1,047, 
 1,168, 
 1,258, 
 1,439, 
 1,644 
 1, 705; 
 1,910, 
 2,151, 
 2,348; 
 2,802, 
 2,268, 
 2,301, 
 2,32i: 
 2,379! 
 2,496; 
 2,173, 
 1,926, 
 1,486, 
 1,518, 
 1,387, 
 1,515, 
 1,487: 
 1,496! 
 1,448! 
 1,363! 
 1, 
 
 1,378; 
 1 
 
 i;6i6; 
 
 1,653, 
 1,570! 
 1, 
 
 i,45i; 
 
 1,314, 
 
 1,297, 
 1,259; 
 1,269, 
 1,276, 
 1,262, 
 
 919; 
 999, 
 928, 
 988, 
 977, 
 
 822, 
 829, 
 792, 
 726, 
 837, 
 816, 
 879, 
 873, 
 879, 
 
 Ck>asting 
 trade. 
 
 Enrolled 
 
 and 
 licensed 
 
 Teasels. 
 
 Tom. 
 
 797,338 
 
 873,023 
 
 956,981 
 
 1,041,105 
 
 1,153,552 
 
 1,176,694 
 
 1,107,068 
 
 1,045,753 
 
 1,076,156 
 1,109,615 
 1,223,218- 
 1,315,677 
 1,488,601 
 1,659,317 
 1,770,376 
 1,797,825 
 1,899,976 
 2,055,873 
 2,134,258 
 2,322,114 
 2,543,255 
 2,247,663 
 2,336,609 
 2,401,220 
 2,480,929 
 2,644,867 
 2, 704, 544 
 2,616,716 
 2,960,633 
 3,246,266 
 3, 381, 522 
 2,719,621 
 2,660,390 
 2,702,140 
 2,515,516 
 2,638,247 
 2,764,600 
 2,929,562 
 3,163,220 
 3,293,439 
 3,219,693 
 2,598,835 
 2,640,322 
 2,497,170 
 2,598,182 
 2,637,686 
 2,646,011 
 2,795,776 
 2,838,364 
 2,884,068 
 2,895,371 
 2,939,252 
 3,010,785 
 3,172,120 
 3,211,416 
 3,409,435 
 3,609,876 
 3,700,773 
 3,854,693 
 3,696,276 
 8,728,714 
 8,790,296 
 3,896,826 
 3,959,702 
 3,965,313 
 4,286,616 
 4,682,646 
 4,858,714 
 5,141,037 
 5, 335, 164 
 
 Whale 
 fisheries. 
 
 Registered 
 
 and 
 
 enrolled 
 
 vessels. 
 
 Tons. 
 97,649 
 146,264 
 129,137 
 124,860 
 132,286 
 136,927 
 157,405 
 151,990 
 
 152,617 
 
 168,614 
 
 190,903 
 
 1«7,420 
 
 193,859 
 
 192,613 
 
 180,186 
 
 146,017 
 
 181,644 
 
 193,798 
 
 193,203 
 
 181,901 
 
 186,848 
 
 189,461 
 
 195,842 
 
 198,694 
 
 185, 728 
 
 166,841 
 
 146,734 
 
 117,714 
 
 99,228 
 
 95,145 
 
 84,233 
 
 105, 170 
 
 62,384 
 
 78,486 
 
 70,202 
 
 67,954 
 
 61,490 
 
 51,608 
 
 44,766 
 
 39,108 
 
 38,229 
 
 39,116 
 
 40,693 
 
 89,700 
 
 40,028 
 
 38,408 
 
 38,651 
 
 82,802 
 
 32,414 
 
 27,249 
 
 26,184 
 
 23,138 
 
 26,161 
 
 24,482 
 
 21,976 
 
 18,633 
 
 17,231 
 
 17,052 
 
 16,604 
 
 16,482 
 
 15,839 
 
 16,121 
 
 12,714 
 
 11,496 
 
 11,017 
 
 9,899 
 
 9,634 
 
 9,320 
 
 9,612 
 
 10,140 
 
 Deep-sea 
 fisheries. 
 
 Enrolled 
 
 and 
 licensed 
 vessels. 
 
 Tom. 
 141,781 
 109, 731 
 127,363 
 126,713 
 108,242 
 104, 305 
 77, 783 
 70,902 
 
 73,000 
 101, 396 
 
 98,405 
 116,781 
 109,132 
 133,406 
 124,698 
 151,918 
 146,156 
 183,119 
 169, 078 
 146, 969 
 133, 540 
 132, 339 
 
 140. 196 
 148,846 
 166, 707 
 162, 764 
 192, 641 
 
 204. 197 
 168,309 
 159,241 
 112,677 
 
 98,231 
 76,066 
 83,887 
 62,704 
 91,460 
 92,865 
 97,647 
 
 109,619 
 78,290 
 80,207 
 87,802 
 91,086 
 86,547 
 79,885 
 77,638 
 76, 137 
 77,863 
 96,038 
 82,940 
 82,665 
 80,705 
 79,547 
 76,012 
 74,464 
 68,367 
 68,933 
 69,472 
 70,575 
 71, 573 
 69, 06O 
 68,630 
 66,610 
 62,827 
 60,679 
 61, 629 
 62,444 
 66,633 
 
 •57,632 
 57,608 
 
 Total 
 
 merchant 
 marine. 
 
 Tone. 
 1,824,941 
 1,882,102 
 1,896,686 
 1,995,610 
 2,096,479 
 2,180,764 
 2,130,744 
 2,092,391 
 
 2,158,603 
 2,280,096 
 2,417,O0B 
 2,662,086 
 2,839,046 
 3,154,042 
 8,334,016 
 3,535,464 
 3,772,439 
 4,138,440 
 4,407,010 
 4,802,902 
 6,212,001 
 4,871,653 
 4,940,843 
 6,049,808 
 6,145,038 
 6,353,868 
 5,639,813 
 6,112,164 
 5,155,056 
 4,986,400 
 6,096,782 
 4,310,778 
 4,304,487 
 4,351,759 
 4,144,641 
 4,246,507 
 4,282,607 
 4,437,747 
 4,696,027 
 4,800,662 
 4,863,732. 
 4,279,458 
 4,242,600 
 4,212,765 
 4,169,601 
 4,068,034 
 4,057,734 
 4,165,933 
 4,236,487 
 4,271,229 
 4,265,934 
 4,131,186 
 4,105,845 
 4,191,916 
 4,307,475 
 4,424,497 
 4,684,769 
 4,764,921 
 4,825,071 
 4,684,029 
 4,635,960 
 4,708,880 
 4,769,020 
 4,749,738 
 4,864,238 
 5,161,839 
 5,524,218 
 6,797,901 
 6,087,346 
 6,291,635 
 
BEFOBT OF AMEBICAN MERCHANT MAEINE COMMISSION. LXV 
 
 Appesdix B. 
 
 TOmrAGE 07 THE WOBLD Aim 07 IH70STAKT HASITIME FOWEBS. 
 
 Steah Yessbu ovkr 100 Tons and Sail Vessels oveb 60 Tons. 
 
 [Becorded by Bureau Veiitts.] 
 
 THE WOKLD. 
 
 
 Steam (over 100 tons). 
 
 Sail (over 50 tons). 
 
 Potential 
 
 
 Number. 
 
 Gross tons. 
 
 Number. 
 
 Net tons. 
 
 tonnage. 
 
 1890 
 
 0,638 
 10,629 
 10,744 
 10,896 
 11,155 
 11,271 
 11,576 
 11,456 
 12,289 
 12,702 
 13,106 
 13,881 
 17,532 
 
 12,825,709 
 15,134,436 
 16,667,124 
 16,338,513 
 17,089,596 
 17,889,006 
 18,886,042 
 19,ni,382 
 21,787,600 
 23,379,726 
 24,967,638 
 26,158,358 
 27,900,457 
 
 33,879 
 29,766 
 29,333 
 29,670 
 29,348 
 29,215 
 28,885 
 27,867 
 27,982 
 27,864 
 27,976 
 27,705 
 26,873 
 
 10,640,051 
 9,829,063 
 9,547,747 
 9,323,995 
 9,135,560 
 8,894,732 
 8,693,769 
 8,347,596 
 8,206,889 
 8,119,121 
 8,078,897 
 8,066,305 
 7,812,957 
 
 43,687,039 
 
 1893 
 
 48,528,319 
 
 
 49,526,847 
 
 1896 
 
 50,764,795 
 
 
 61,179,660 
 
 1897 
 
 54,605,664 
 
 1898 
 
 55,442,863 
 
 1899 
 
 67,008,600 
 
 1900 
 
 62,068,263 
 
 1901 
 
 66,771,601 
 
 1902 
 
 69,806,793 
 
 1903 
 
 73,334,581 
 
 1904 
 
 76,667,601 
 
 
 
 BRITISH. 
 
 1890 
 
 6,302 
 6,694 
 6,735 
 5,771 
 5,690 
 6,661 
 6,707 
 6,463 
 5,649 
 6,621 
 5,839 
 5,929 
 8,406 
 
 8,043,872 
 9,383,361 
 9,706,976 
 9,984,280 
 10,245,557 
 10,552,498 
 10,993,1U 
 11,093,807 
 11,859,681 
 12,457,111 
 13,305,915 
 13,966,972 
 14,889,175 
 
 10,559 
 9,277 
 8,892 
 8,793 
 8,726 
 8,595 
 8,125 
 7,706 
 7,326 
 7,134 
 7,029 
 6,839 
 6,773 
 
 3,693,650 
 3,574,847 
 3,485,590 
 3,333,607 
 3,267,626 
 3,098,618 
 2,910,555 
 2,662,163 
 2,513,307 
 2,352,378 
 2,233,684 
 2,196,443 
 2,080,243 
 
 24,119,974 
 
 1893 
 
 27,121,381 
 
 1894 
 
 27,885,806 
 
 1896 
 
 28,258,888 
 
 1896 
 
 28,920,729 
 
 1897 
 
 80,064,198 
 
 1898 . 
 
 29,868,083 
 
 1899 
 
 29,696,992 
 
 1900 
 
 32,096,443 
 
 1901 
 
 32,821,878 
 
 1902 .. 
 
 34,662,644 
 
 1903 
 
 36,907,579 
 
 1904 
 
 38,621,156 
 
 
 
 GERMAN. 
 
 1390. 
 1893. 
 1894. 
 1895. 
 1896. 
 1897. 
 1898. 
 1899. 
 1900. 
 1901. 
 1902 
 1903 
 1904. 
 
 779 
 
 810 
 
 826 
 
 831 
 
 846 
 
 878 
 
 900 
 
 1,031 
 
 1,115 
 
 1,167 
 
 1,193 
 
 1,479 
 
 930,764 
 
 1,398 
 
 1,144,199 
 
 1,386 
 
 1,216,092 
 
 1,265 
 
 1,306,771 
 
 1,105 
 
 1,360,472 
 
 1,096 
 
 1,462,530 
 
 1,067 
 
 1,625,521 
 
 1,000 
 
 1,873,338 
 
 981 
 
 2,169,029 
 
 955 
 
 2,430,206 
 
 966 
 
 2,622,308 
 
 957 
 
 2,767,493 
 
 914 
 
 2,887,130 
 
 948 
 
 706,475 
 667,219 
 624,922 
 697,862 
 566,973 
 644,420 
 535,937 
 548,063 
 561,025 
 536,744 
 527,643 
 628,267 
 506,010 
 
 8,331,203 
 3,875,151 
 4,065,282 
 4,343,766 
 4,152,357 
 4,681,S12 
 4,605,413 
 5,215,765 
 5,962,785 
 6,732,728 
 7,052,727 
 7,845,747 
 7,635,342 
 
 FRENCH. 
 
 1890. 
 1893. 
 1894. 
 1895. 
 18%. 
 1897. 
 1898. 
 1899. 
 1900. 
 1901. 
 1902. 
 1903. 
 1904. 
 
 471 
 600 
 503 
 601 
 632 
 539 
 547 
 626 
 645 
 660 
 666 
 566 
 835 
 
 806,983 
 
 1,627 
 
 866,375 
 
 1,490 
 
 872,103 
 
 1,490 
 
 864,598 
 
 1,469 
 
 933,244 
 
 1,425 
 
 979,072 
 
 1,360 
 
 962,682 
 
 1,334 
 
 985,968 
 
 1,371 
 
 1,060,238 
 
 1,396 
 
 1,079,683 
 
 1,406 
 
 1,096,120 
 
 1,429 
 
 1,139,675 
 
 1,449 
 
 1,266,486 
 
 1,440 
 
 298,787 
 267,444 
 256,266 
 255,096 
 252,940 
 269,667 
 279,412 
 309,881 
 341,037 
 401,353 
 467,026 
 636,703 
 494,123 
 
 2,238,747 
 2,181,128 
 2,121,550 
 2,100,683 
 2,207,644 
 2,269,147 
 2,286,680 
 2,067,704 
 2,694,193 
 2,542,785 
 2,721,806 
 2,907,083 
 3,040,147 
 
LXVI REPORT OF AMERICAN MERCHANT MARINE OOMMISSIOIT. 
 
 Tonnage of the world and of important maritime powers — Contiuued. 
 
 NORWEGIAN. 
 
 Year. 
 
 Steam (over 100 tons). 
 
 Sail (over 50 tons). 
 
 FotentUl 
 
 Number. 
 
 Oioss tons. 
 
 Nomber. 
 
 "iieitoM. 
 
 
 1890 
 
 371 
 490 
 610 
 630 
 661 
 605 
 646 
 657 
 719 
 768 
 804 
 844 
 1,037 
 
 246,062 
 367,662 
 406,119 
 456,817 
 494,612 
 676,698 
 628,493 
 672,649 
 769,242 
 
 •779,398 
 863,146 
 926,688 
 
 1,030,637 
 
 t,S67 
 8,278 
 
 8,m 
 
 2,969 
 2,801 
 2,694 
 2,682 
 2,306 
 2,123 
 2,002 
 1,837 
 1,740 
 1,661 
 
 1,405,934 
 
 1,376,138 
 
 . 1,297,801 
 
 1,240,169 
 
 1,176,174 
 
 1,103,284 
 
 1,144,482 
 
 996,678 
 
 898,761 
 
 883,934 
 
 807,125 
 
 767,981 
 
 749,864 
 
 2,1U,610 
 
 1893 
 
 2,416,358 
 
 1894 
 
 2,343,173 
 
 1896 
 
 2,385,531 
 
 1896 
 
 2,433,390 
 
 1897 
 
 2,644,680 
 
 1898 
 
 2,720,482 
 
 1899 
 
 2,666,230 
 
 1900 
 
 2,816,977 
 
 1901 
 
 2,883,742 
 
 1902 
 
 2,960,489 
 
 1903 
 
 8,069,633 
 8.802,678 
 
 1904 
 
 
 JAPANESE. 
 
 Year. 
 
 Number. 
 
 Gross 
 tons. 
 
 Number. 
 
 Net tons. 
 
 Steam 
 
 a^^^"^ll 
 (net). 
 
 1890 
 
 147 
 146 
 148 
 
 179 
 193 
 242 
 267 
 318 
 334 
 332 
 338 
 366 
 366 
 373 
 656 
 
 123,279 
 120,882 
 121,697 
 142,096 
 171,901 
 274,669 
 313,663 
 408,503 
 439,609 
 466,636 
 477, 3U 
 518,893 
 530,057 
 666,036 
 646,978 
 
 104 
 
 98 
 
 100 
 
 260 
 
 266 
 
 256 
 
 249 
 
 234 
 
 240 
 
 310 
 
 1,053 
 
 1,602 
 
 1,497 
 
 1,521 
 
 1,582 
 
 27,721 
 
 26,602 
 
 26,506 
 
 37,615 
 
 36,867 
 
 37,655 
 
 33,880 
 
 31,750 
 
 30,516 
 
 40,966 
 
 117,364 
 
 170,790 
 
 172,480 
 
 174,624 
 
 184,220 
 
 161,000 
 146,484 
 148,202 
 179,710 
 208,768 
 312,314 
 346,443 
 440,253 
 470,024 
 496,501 
 594,675 
 689,688 
 702,637 
 730,660 
 830,198 
 
 1891 
 
 1892 
 
 1893 
 
 1894 
 
 1895 
 
 1896 
 
 1897 
 
 1898 
 
 1899 
 
 1900 
 
 1901 
 
 1902 
 
 1903 
 
 1904 
 
 
 Appendix C. 
 
 TEE HEW CiriTABD giraSIST. 
 [From Report of the Commissioner of Navigation for 1903, pages 48-S2.] 
 
 On the part of the British Goyemment the Cimard contract is made jointly hy the 
 Admiralty, representing the Navy Department, by the Board of Trade, corresponding 
 to our Department of (Commerce and Labor, and by the Postmaster-General. The 
 public purposes of the contract, recited in the preambles, are the maintenance and 
 improvement of British steamship lines to the United States, the control by the 
 Admiralty, when desired, of the Cunard fleet, and the transportation of the British 
 mails. 
 The basic articles of the new Cunard contract are the following- 
 "3. (1) The company shall forthwith cause to be built for it in the United King- 
 dom, with all due dispatch, two steamships of large size capable of maintaining a 
 minimum average oceah speed of from 24 to 25 knots an hour in moderate weather, 
 smtable m all respects to maintain and develop the company's line between Liver- 
 pool andNew York, or other ports in Great Britain and the United States of America. 
 10. His Majesty's Government shall advance to the company a sum equal to the 
 cost to the company of the two steamships referred to m clause 3 hereof but not 
 exceeding m any event £2,600,000, upon the terms and conditions following-" 
 _ The estimate of the first cost of these steamers, £1,300,000 each, was based on the 
 mvestigations of a special commission of the Admiralty. That commission reported 
 
BEPOBT OF AMERICAN MERCHANT MARINE COMMISSION. LXVII 
 
 the first cost, indicated horsepower, and annual subsidy required to maintaiB com- 
 mercially fast British ocean steamers as follows: 
 
 AT««ige 
 
 TMrfit post 
 
 Engine 
 
 Annual 
 
 speed. 
 
 x'j.xdv \j\javt 
 
 power. 
 
 subsidy. 
 
 KnoU. 
 
 
 I. JI. P. 
 
 
 20 
 
 iE350,000 
 
 19,000 
 
 £9,000 
 
 21 
 
 400,000 
 
 22,000 
 
 19,500 
 
 22 
 
 470,000 
 
 25,600 
 
 40,600 
 
 23 
 
 575,000 
 
 30,000 
 
 67,600 
 
 24 
 
 850,000 
 
 40,000 
 
 110,800 
 
 25 
 
 1,000,000 
 
 62,000 
 
 149,000 
 
 26 
 
 1,250,000 
 
 68,000 
 
 204,000 
 
 The speed basis is not for a measured mile, or a short distance but for the voyage 
 of 3,000 miles across the Atlantic. The annual subsidy to make good commercial 
 losses is based on a ten-year contract. 
 
 By the article just quoted the British Grovemment agrees to advance the first cost, 
 £1,300,000, of each of the two fastest steamers which can be built. This amount is 
 to be repaid by the company in twenty annual installments of £65,000 each, begin- 
 ning with the end of the first year after the second of the two steamers has made her 
 first voyage. Beginning with the first voyage of each steamer the British Govern- 
 ment is to pay the company an annual admiralty subvention of £75,000 for each of 
 the two steamers, or £150,000 a year when both are in full operation. This £150,000, 
 however, includes the present admiralty subvention for CUmpania, iMcania, and 
 other existing steamers of the fleet under the agreement of October, 1902 (See article 
 9), almounting to about £20,000. The new admiralty subvention for the two new 
 steamers is thus virtually £130,000, or £65,000 apiece — a sum just sufficient to equal 
 the annual installment of the coinpany's repayment of the Govemmeint's advance. 
 
 By paragraph 9 (e) of the contract, interest shall be at the rate of 2i per cent per 
 annum. At this rate the average annual intereat on the principal of £1,300,000 pay- 
 able in twenty years Will be £17,875. Besides the Admiralty subvention of £150,000 
 already mentioned, the Cunard Company is also to receive £68,000 (see contract. 
 Part II, paragraphs 13, 14, and 26) for carrying the mails once a week from Queens- 
 towh to New York. This service will require four steamers, and the postal subsidy 
 is accordingly at the rate of £17,000 a steamer. As the two new steamers will pre- 
 sumably carry more than the average amount of mail, in effect the mail subsidy is 
 calculated to pay interest on first cost, as the Admiralty subvention was calculated to 
 repay the principal of first cost advanced by the Government. 
 
 By this agreement in effect the British Government ^rees to build and give to the 
 Cunard Company the two best steamships Great Britain can produce, and the com- 
 pany agrees to operate them at its own cOst. The Government supplies the capital, 
 the company meets operating expenses. The company's chance for profits depends 
 on passenger receipts exceeding operating expenses (excluding first cost of the 
 steamers). The Government's return for ite investment is: 
 
 "1. British transportation of British mails. 
 
 "2. The employment of naval reserves on the Cunard steamers. 
 
 "3. The possession of a fleet of auxiliary cruisers and transports without the cost 
 of maintenance, includinginsurance, wages, repairs, etc. 
 
 "4. The reassertion of British preeminence on the North Atlantic, threatened by 
 the rapid development of the two great G«rman lines." 
 
 By the third schedule of the contract the British Government has the right to pur- 
 chasiB Oiitright toy Cunarder for a sum equal to the value of the vessel at the time of 
 her purchase, plus 10 per cent as a bonus to the company. The present value of 
 each steamer of the fleet, it wiU be noted, has been fixed in the contract, the Lucania 
 and Campania, built in 1893, for example, each being valued in September, 1902, at 
 £356,839. Depreciation is to be allowed at the rate of 6 per cent annually, but the 
 value of a steamer may be appreciated by the installation of new boilers and engines. 
 Although the British Government, as shown, pays the first cost of the new steamers, 
 it can purchase them from the company only by a payment of 10 per cent bonus 
 above their value, as an insurance to the company against loss consequent upon 
 interrupted traffic. 
 
LXVIII REPORT OF AMERICAN MERCHANT MARINE COMMISSION. 
 
 By the same schedule the British Government may temporarily charter any vessel 
 
 oftbs 
 
 Le Cunard fleet at the following rates: 
 
 Speed of vessel per hour. 
 
 Bate per ton gross register per month. 
 
 In the eivent of the 
 company not hav- 
 ing to provide and 
 pay the officers and 
 crew. 
 
 For first 
 
 four 
 months 
 of each 
 period of 
 
 hire. 
 
 For subse- 
 quent 
 
 period of 
 hire. 
 
 In the event of the 
 company having to 
 provide and pay the 
 officers and crew. 
 
 For first 
 
 four 
 
 months 
 
 of each 
 
 period of 
 
 hire. 
 
 For subse- 
 quent 
 period of 
 hire. 
 
 Above 22 knots 
 
 Of from 20 to 22 knots, inclusive. . . 
 
 Of from 17 up to 20 knots 
 
 Under 17 knots and above 14 knots 
 
 ». d. 
 26 
 20 
 20 
 17 6 
 
 a. d. 
 25 
 20 
 17 6 
 15 
 
 I. d. 
 30 
 24 
 24 
 20 
 
 «. d. 
 80 
 24 
 21 6 
 17 6 
 
 The rates are equivalent to $87.48 a year per ton (including crew) for the steamers 
 over 22 knots and to $51.45 a year per ton (including crew) for steamers between 14 
 and 17 knots. The average earnmgs of the Cunard fleet in 1902 were $57.83 per 
 gross registered ton, so that the Government charter rate is somewhat in excess of 
 the ordinary commercial earnings of the company. 
 
 The total annual subsidy to the Cunard Line specifically provided for in the con- 
 tract consists of £150,000 ($729,000) for admiralty services and £68,000 ($330,480) 
 for the mails, in all $1,059,480. Paragraph 20 of the second part of the contract con- 
 tains, however, the following provisions looking toward the maintenance of a com- 
 plete Cunard semi weekly trans- Atlantic service: 
 
 " If, in consequence of additions to its fleet, the company shall at any time establish 
 a new fast weekly midweek service between Great Britam and the TJnited States of 
 America (that is to say, a service performed by vessels of a speed of 18 knots and 
 upward per hour), and the postmaster-general shall, under the powers conferred by 
 this clause, send by means of such new service a regular mail to the United States of 
 America which shall be equal in weight, on an average of twelve months, to not less 
 than 10 per cent of the average weight of the mail sent each week by a mail ship 
 under this agreement, then the postmaster-general shall make such additional pay- 
 ment to the company for the advantage thus obtained as (regard being had to the 
 other payments to the company under this agreement) may be agreed upon, or fail- 
 ing agreement, settled by arbitration under dause 35 hereof." 
 
 The amount of the subsidy or "mail pay" under this paragraph is not fixed, but 
 the paragraph is a pointed illustration of British policy to dispatch British mails 
 entirely by British steamers, even if British steamers are slower than competing Amer^ 
 ican and German mail steamers. With the semiweekly mail line in opeiuaon, the 
 Cunard Company will doubtless receive about $1,100,000 from the British Govern- 
 ment annually. The United States pays substantially the same sum for our east- 
 bound trans- Atlantic mails, the Cunard Company receiving of late years over $200,000 
 annually from the American post-ofiace. The proposed concentration of British west- 
 bound mails upon the Cunard Line, with an annual payment of about $1,100,000, may 
 be contrasted with the American policy of distributing our east-bound trans- Atlantic 
 mails, as shown by the following table of mail payments for a series of years to the 
 lines named: 
 
UEPOET OF AMERICAN MEKCHAlfT MABINE COMMISSION. LXli 
 American trann-AtlanUc mail payments. 
 
 Year. 
 
 Internation- 
 al Navlgar 
 
 Hon 
 (Ameilcan). 
 
 North Ger- 
 man Lloyd 
 (Oeiman). 
 
 Hambnig- 
 American 
 (German). 
 
 Cunard 
 (British). 
 
 White Star 
 (British). 
 
 Cie. G£u£- 
 raleTraus- 
 atlantlque 
 (French). 
 
 Total. 
 
 1889 
 
 1890 
 
 1891 
 
 1892 
 
 1893 
 
 1894 
 
 1895 
 
 1896 
 
 1897 
 
 1898 
 
 1899 
 
 1900 
 
 1901 
 
 1902 
 
 1903 
 
 (8,642.93 
 41,631.84 
 25,961.00 
 43,965.85 
 103,029.31 
 192,405.76 
 223,900.48 
 595,943.38 
 766,607.66 
 580,809.09 
 485,673.60 
 647,278.40 
 629,101.29 
 662,184.00 
 660,672.00 
 
 (188,633.19 
 
 171,646.81 
 
 178,108.86 
 
 172,165.69 
 
 152,413.65 
 
 157,764.90 
 
 116,699.66 
 
 112,161.74 
 
 107,322.30 
 
 88,029.67 
 
 96,183.19 
 
 100,823.64 
 
 80,141.81 
 
 83,372.19 
 
 111,733.09 
 
 (14,868.69 
 20,424.11 
 29,120.47 
 40,679.52 
 88,361.37 
 45,311.83 
 41,119.24 
 30,030.75 
 26,296.87 
 27,431.09 
 13,861.03 
 85,187.13 
 62,760.64 
 65,092.48 
 40,905.31 
 
 (101,818.32 
 88,673.53 
 77,349.60 
 92,919.80 
 106,019.66 
 131,062.12 
 146,869.07 
 142,008.27 
 144,140.26 
 172,918.34 
 183,846.20 
 186,417.78 
 213,772.80 
 221,224.07 
 241,634.19 
 
 (12,375.97 
 27,106.00 
 62,471.04 
 69,090.06 
 92,918.40 
 47,176.13 
 61,879.99 
 27,824.51 
 26,974.21 
 63,635.69 
 61,873.74 
 48,820.71 
 91,591.21 
 51,019.96 
 61,994.93 
 
 (24,959.20 
 26,442.94 
 24,749.10 
 28,664.09 
 34,233.80 
 32,959.77 
 29,229.62 
 32,806.88 
 35,856.23 
 31,679.88 
 37,202.22 
 27,987.67 
 24,842.21 
 20,184.82 
 30,936.46 
 
 (361,298.30 
 374,825.23 
 397,769.97 
 447,375.01 
 626,976.09 
 606,680.60 
 607,587.86 
 940,775.53 
 
 1,106,097.63 
 964,403.76 
 877,639.98 
 
 1,045,616.18 
 992,199.96 
 
 1,093,077.52 
 
 1,147,876.98 
 
 Total.. 
 
 6,667,706.58 
 
 1,916,000.09 
 
 611,440.53 
 
 2,247,663.86 
 
 786,652.66 
 
 441,624.79 
 
 U, 469, 088. 40 
 
 The only American trans-Atlantic mail contract now in force was made with the 
 American Line for ten years, mider the act of 1891. Under that contract the maxi- 
 mum annual subsidy as $757,000 for four steamerSj or on the average $189,000 a 
 steamer. As already shown, the Cunard contract is so arranged that the company is 
 assured that the Government will meet the entire first cost, including interest, of the 
 two new Bteamera. Two new steamers were built in the United States under the 
 American contract in 1893-1895, at a cost each of $2,500,000 in round numbers. 
 During the ten years of the American contract each of these steamers, if in full opera- 
 tion, might thus draw $1,890,000. If the company undertook, as does the Cunard 
 company, to repay the first cost in 20 annual installments, during the ten years of the 
 contract $1,250,000 must be set aside for the purpose. The British Government 
 requires only 2| per cent interest from the Cunard company; the American company 
 pays 5 per cent interest on its mortgage bonds. At this rate (assuming it were pro- 
 posed to retire the bonds in twenty years) the interest charges for the ten years of 
 the contract will amount to $937,500. This sum, added to $1,250,000 set apart for 
 amortization, amounts to $2,187,500 paid out, compared with $1,890,000 subsidy 
 received. 
 
 At the end of the ten-year American contract the company's payments for first cost 
 and interest are thus nearly $300,000 more than the maximum- subsidy receivable, 
 while the company has still to meet half of the first cost and interest thereon of a 
 steamer adapted virtually to one line of trade. The disparity between the twenty- 
 year Cunard contract and the ten-year American contract is lessened by the fact that 
 Congress admitted two British-built steamers to American registry in order to give 
 life at all to an American trans- Atlantic mail system. It is increased, on the other 
 hand, by the higher wages paid on the American than on the British lines. The 
 four steamers of the American Line in 1895 were unequaled by the four steamers of 
 any foreign steamship company. Since that time the German trans-Atlantic mail 
 fleet has considerably surpassed it. In October, 1905, the American contract will 
 expire. Soon after that time the new Cunard contract will go into operation. In 
 the reports of the Bureau for several years past a revision of the ocean mail act of 
 1891 has been suggested in the interest of th« American merchant marine and of 
 American shipbuilding. Such a revision obviously concerns the Post-Offlce Depart- 
 ment and the Navy Department, as well as the Department of Commerce and Labor. 
 The new Cunard contract suggests the desirability of action upon this subject in such 
 a manner as shall meet the requirements of the three Departments concerned and 
 the reasonable ambitions of the American people. The act of 1891 has failed to 
 establish an American mail line to South America below the Caribbean. 
 
lxz kepokt of american mebohant marine commission. 
 
 Appendix D. 
 
 mQinSIES AS TO THE FBEE-8HIF QTIESTIOH. 
 
 Desirous of learning liow far a simple free-ship policy would be effective in increas- 
 ing the American merchant marine m foreign trade, the Merchant Marine Commis- 
 sion caused inquiries to be sent to the chief American owners of foreign-built 
 steamships now being operated under foreign flags. These inquiries and the replies 
 received from the steamship managers were as follows: 
 
 The Merchant Mahinb Commission, 
 
 Washington, D. C. 
 
 Deab Sirs: It is stated in the report of the Commissioner of Navigation for 1902 
 that you are the owners in whole or in part of several steamships foreign built and 
 now flying foreign colors. 
 
 The Merchant Marine Commission is charged bjr Congress to ascertain, if possible, 
 the beat method of increasing American tonnage in the over-seas trade. Will you 
 kindly state for the information of the Commission: 
 
 1. Whether you would, if so authorized by Congress, transfer your foreign-built 
 ships to American registry to engage exclusively in the foreign trade, but to remain 
 without subsidy, differential duty, or any other Government encouragement? 
 
 2. Whether you would transfer your foreign-built steamships to American regis- 
 try if they were admitted to all or part of any subsidy or differential duty granted 
 by our Government, but were still confined to the foreign trade? 
 
 3. Whether you would transfer your foreign-built steamships to American regis- 
 try if no subsidy or differential duty were granted, but if the ships were allowed to 
 enter the coastwise trade on the same terms as other American vessels? 
 
 4. Whether you would transfer your foreign-built ships to the American flag for 
 foreign trade alone if you were required to build an equivalent tonnage in this 
 country? 
 
 5. Whether, if your foreign-built ships were admitted to American registry, you 
 would also wish to have me privilege of employing alien ofEicers and be exempted 
 from the food scale required by United States law? 
 
 Very truly, yours, 
 
 WiNTHEOP L. Mabvin, Secretary. 
 
 New York, November S, 1904. 
 The Merchant Marine Commission, 
 
 Washington, D. C. 
 Gentlemen: We acknowledge yours of the 24th ultimo and herewith answer ques- 
 tions proposed in the light of existing circumstances and conditions, which may 
 change materially by the time legislation is enacted. 
 In reply to question 1 we reply in the negative. 
 
 To question 2 we reply that we would probably if entitled to full subsidy. 
 No. 3 we answer affirmativelj^. 
 No. 4 we answer in the negative. 
 
 No. 5. We would prefer to have the privilege of employing aliens for positions 
 below captain and chief engineers, but would not object to compUanc6 with United 
 States law respecting food scale. 
 
 Yours, truly, W. R. Grace & Co., 
 
 Per A. D. Snow. 
 
 International Mercantile Marine Company, 
 
 OrpiCE op the Vice President, 
 9 Broadway, New York, November S, 1904. 
 Winthrop L. Marvin, Esq., 
 
 Secretary the Merchant Marine Commismn, Washington, D. C. 
 Dear Sib: In reply to your communication of the 29th ultimo asking certain ques- 
 tions for the information of the Merchant Marine Commission, we beg to make reply 
 as follows: 
 
 1. If Congress should authorize the issuing of American register to foreign-built 
 ships to engage exclusively in 4he foreign trade, but provide for no governmental 
 
BEPORT OP AMERICAN MERCHANT MARINE COMMISSION. LXXI 
 
 aesistance to such ships, we could not afford to transfer any of our foreign-built ships 
 to American register, as the increased cost of operating steamers under the American 
 flag, compared with the steamers under foreign flags in the same trade, would be too 
 great to warrant the transfer. 
 
 2. If foreign-built steamers were admitted to American register and were granted 
 sufficient governmental assistance (either by subsidy or otherwise) to offset the 
 increased cost of operating under the American flag as compared with the cost under 
 a foreign flag, we would doubtless take advantage of this act and transfer some of 
 our steamers now under foreign register to American register. 
 
 3. If no subsidy or other assistance were granted by Congress to foreign-built ships 
 transferred to American register, but such steamers were permitted to enter the coast- 
 wise trade on the same terms as other American vessels, there would be no induce- 
 ment to make the transfer, as steamers constructed for the foreign trade are not 
 generally suitable for coastwise trade. 
 
 4. If Congress should pass an act providing for the admission to American register 
 of foreign-built ships under an agreement on the part of the shipowner to bund an 
 equal amount of tonnage in this country, we could not take advantage of this act 
 unless, in addition, governmental asgiste,nce was provided sufficient to offset the 
 increased cost of building and operating steamers under American register. 
 
 5. If foreign-built ships were admitted to American register we would not care for 
 the privilege of employmg alien officers and to be exempted from the food schedule 
 required by United States laws, provided the assistance offered by the Government 
 as an offset to increased expenses were sufficient to cover the increased cost of wages 
 and provisions of the American crew. 
 
 We have endeavored to answer your questions, but if there is any further informa- 
 tion that you require, we will be pleased to have you communicate with us. 
 Yours, truly, 
 
 P. A. S. Franklin, Vice-President. 
 
 Donald Steamship Company (Incokporated), 
 
 18 Broadway, New York, October S9, 1904. 
 WiNTHROP L. Marvin, Esq., 
 
 Secretary Merchant Marine Comnmsion, Washington, D. C. 
 Dear Sir: I beg to acknowledge receipt of your letter of October 25, and beg to 
 apologize for the delay in not answering same sooner. In reply to your letter, I luive 
 considered the five questions which you ask, and in answer would say — 
 
 1. I beg to state on my own behalf as official president of this company, without 
 consulting my directors, that I would not feel inclined to transfer our foreign-built 
 ships to American r^^stry without some inducement for doing so. 
 
 2. I think, on the conditions indicated in your question, that we would be willing 
 to transfer our foreign-built ships to American registry, to be confined to the foreign 
 trade. 
 
 3. I believe we would not be willing to transfer our foreign-built ships to Ameri- 
 can registry in order to participate in the benefits of the coasting trade, as we believe 
 that if a general transfer of other firms' property was put in that trade it would be as 
 m*ch depressed as the foreign trade for American ships. 
 
 4. I am not prepared to stete that we would transfer our foreign-built ships to the 
 American flag tor foreign trade alone if we were required to build an equivalent ton- 
 nage in this country. 
 
 5. I am not prepared to state that we would desire to have the privilege of 
 amploying alien officers for our foreign-built ships if they are admitted to American 
 registry. 
 
 I should like to be permitted to further add, however, that I am in favor of having 
 foreign-built ships bought and purchased by American citizens without seeking any 
 Government assistance whatever, as I am convinced that the nucleus for the ship- 
 owning business could be started in this country in this manner alone, and that by 
 reason of ultimate repairs and renewals American shipowners will be able to build 
 ships as cheaply as they could be built in foreign countries, and I would be further 
 in favor of citizens of foreign countries being licensed to navigate those ships under 
 the laws of this country. 
 
 I should be very pleased indeed to appear before the Commission and explain my 
 views on this matter. I am in favor of protecting the coasting trade just as it remains 
 at present on behalf of American shipping industry. So fs^ as I can see at present 
 the permission for American citizens to own foreign-built tonnage would not affect 
 
LXXII REPORT OF AMERICAN MERCHANT MARINE COMMISSION. 
 
 one iota the interest of the American shipbuilders, as I have not been able to dis- 
 cover in the records of the last two or three years that any appreciable amount ot 
 tonnage has been built in this country for the oflshore trade. 
 
 At your service, I am. yours, truly. ^^^^ ^_ ^^^^^^^_ 
 
 21 State Strbet, New York, October B7, 1904. 
 Mr. WiNTHROP L. Marvin, 
 
 Secretary Merchant Marine Commission, Washington, JJ. C. 
 Dear Sir: We are in receipt of your letter of October 25, and you doubtless will 
 appreciate how impossible it is for us to state definitely to-day what our action would 
 be on certain possible future contingencies, without knowing the conditions that the 
 future may reveal. On general principles, however, we might state for the informal 
 tion of the Commission, and waiving for the time all other considerations except 
 those of a purely commercial advantage, in reply to question — 
 
 1. That there would be no incentive, from a business point of view, to transfer 
 foreign-built ships to American registry, if they were to be confined exclusively to 
 the foreign trade, but to remain without subsidy, differential duty, or any other Gov- 
 ernment encouragement, on account of the greater cost of operating vessels under the 
 American fiag than under some foreign flag. 
 
 2. The advisability of transferring foreign-built ships to American registry, if they 
 were to be admitted to all or part of any subsidy or differential duty granted by our 
 Government yet confined to foreign trade, would depend entirely upon the amount 
 of such remuneration that the steamers would receive under such subsidy or differ- 
 ential duty. If it did not fully compensate for the extra, cost of operation there 
 would be no advantage to be gained by making the change. 
 
 3. We could not say at the present time whether we would want to transfer our 
 foreign-built ships to American registry without subsidy, but with the privilege of 
 entering the coastwise trade. 
 
 4. The answer to No. 1 practically covers this question also. There would be 
 nothing gained by transferring foreign-built ships to American registry and building 
 an equivalent tonnage in this country unless both classes of vessels participate in the 
 subsidy or differential duty. 
 
 5. In view of the possibility that there might not be a sufiBcient number of expe- 
 rienced officers and engineers to man all American and foreign-built ships operating 
 under American registry, we would deem it advisable that the privilege should be 
 granted of employing alien offlcera and engineers, at least for a term of years after 
 the passage of any legislation granting American registry to foreign-built vessels. 
 
 We trust that the above fully answers your desires, and remain. 
 Yours, truly. 
 
 T. HoGAN & Sons. 
 
 Baltimore, Md., November 4, 1904- 
 Mr. WiNTHROP L. Marvin, 
 
 Secretary Merchant Marine Commismm, Washington, D. C. 
 My Dear Mr. Marvin: I am in receipt of your letter of the 1st instant, and note 
 your request for a formal reply from me to the various questions you have submitted, 
 also to others, for the information of the Commission. You will find below the ques- 
 tions and my answers to each. 
 
 1. Whether you would, if so authorized by Congress, transfer your foreign-built 
 ships to American registry to engage exclusively in the foreign trade, but to remain 
 without subsidy, differential duty, or any other Government encouragement? 
 
 Anwser. No. 
 
 2. Whether you would transfer your foreign-built steamships to American registry, 
 if they were admitted to all or part of any subsidy or differential duty granted by 
 our Government, but were still confined to the foreign trade? 
 
 Answer. Yes. 
 
 3. Whether you would transfer your foreign-built steamships to American registry 
 if no subsidy or differential duty were granted, but if the ships were allowed to ent^ 
 the coastwise trade on the same terms as other American vessels? 
 
 Answer. No. 
 
EEPORT OF AMERICAN MERCHANT MARINE COMMISSION. LXXXII 
 
 4. Whether you would transfer your foreign-built ships to the American flag for 
 foreign trade alone if you were required to build an equivalent tonnage in this 
 country? 
 
 Answer. Yes, if subsidy or differential duty sufficient were given. 
 
 5. Whether, if you forei^-built ships were admitted to Aiaerican registry, yon 
 would wish also to have the privilege of employing alien officers, and be exempted 
 from the food scale required by_ United States law? 
 
 Answer. Ye^ would wish privilege to employ alien officers. 
 No, would not wish exemption from food scale required by United States law. 
 Yours, very truly, 
 
 B. N. Bakeb. 
 
 FuKNEss, Withy & Co. (Limited), 
 Eootm SS0S6S Produce Exchange, New York, January S, 1905. 
 The Merchant Marine Comndsmn, Washington, B. C. 
 
 Deab Sirs: Referring to your communication of the 25th October, addressed to the 
 Chesapeake and Ohio Steamship Company (Limited), Newport News, Va., after 
 having submitted your questions to the head office of the company in London, we 
 are in receipt of their communication under date of the 23d ultimo, as follows: 
 
 1. No. 
 
 2. We would be willing to consider a proposal of this kind, but would have to have 
 further particulars before giving a definite reply. 
 
 3. No. 
 
 4. No. 
 
 5. Yes. 
 
 Yours, very truly, George L. Woollby. 
 
 Anglo-American Oil Company (Limited), 
 S6 Broadway, New York, December IS, 1904. 
 Mr. WiNTHROP L. Marvin, 
 
 Secretary, Merchant Marine Commimon, Washington, D. 0. 
 Dear Sir: Owing to the writer's absence in Europe your favor of October 25 has 
 not been attended to before. The questions propounded by you we would answer as 
 follows: 
 No. 1. No. 
 
 No. 2. We would be in favor of transferring to American registry if the subsidy 
 granted was sijfficient to offset the higher cost of running the vessels. 
 No. 3 and No. 4. We would answer no. 
 
 No. 5. We would wish to have the privilege of employing foreign officers, but we 
 would not object to the American food scale. 
 Respectfully, yours, 
 
 • Philip Ruprecht, Agent, 
 
 Anglo-American Oil Co. (Limited). 
 
 Appendix E. 
 sttkhabt 07 aiobican laws fob bounties to fishing vessels. 
 
 fFebruary 16, 1792.] 
 
 AN ACT Concerning certain flsheiies of the United States, and for the regulation and government 
 of the fishermen employed therein. 
 
 Section 1. Beit ena,cted by the Senate and Souse of Bepresentatives of the United States 
 of America in Congress assembled, That the allowance now made upon the exportation 
 of dried fish of the fisheries of the United States, in lieu of a drawbaclrof the duties 
 paid on the salt used in preserving the same, shall cease on all dried fish exported 
 after the tenth day of June next, and as a commutation and equivalent therefor, 
 there shall be afterwards paid on the last day of December annually, to the owner of 
 every vessel or his agent, by the collector of the district where such vessel may 
 belong, that shall be qualified agreeably to law, for carryiM on the bank and other 
 cod fisheries, and that shall actually have been employed therein at e«a for the 
 
LXXIV REPORT OF AMEEIOAJST MERCHANT MARINE COMMISSION. 
 
 term of four months, at the least, of the fishing season, next preceding, which sea- 
 son is accounted to be from the last day of February to the last day in November in 
 every year, for each and every ton of such vessel's burthen according to her admeas- 
 urement as licensed or enrolled, if of twenty tons and not exceeding thirty tons, one 
 and one-half dollars, and if above thirty tons two and an half dollars, of which allow- 
 ance aforesaid three-eighths parts shall accrue and belong to the owner of such fishing 
 vessel, and the other five-eighths thereof shall be divided by him, his agent or lawful 
 representative, to and among the several fishermen who shall have been employed 
 in such vessel during the season aforesaid, or a part thereof, as the case may be, in 
 such proportions as the fish they shall respectively have taken may bear to the whole 
 quantity of fish taken on board such vessel during such season: Provided, That the 
 allowance aforesaid on any one vessel, for one season, shall not exceed one hundred 
 and seventy dollars. 
 
 (By the act of July 8, 1797, the bounties to fishing vessels were increased 33J per 
 cent, to take effect on January 1, 1798.) 
 
 [July 29, 1813, Thirteenth Congress, first session, chapter 85.] 
 
 AN ACT Laying a duty on Imported salt; granting a bounty on pickled fish exported, and allow- 
 ances to certain vessels employed In the fisheries. 
 
 Be it enacted by the Senate and House of Representatives of the United States of America 
 in Congress assembled, That from and after the first day of January next a duty of 
 twenty cents per bushel shall be laid, imposed, and collected upon all salt imported 
 from any foreign port or place into the United States. In calculating the said duty 
 every fifty-six pounds of salt shall be computed as equal to one bushel. And the 
 said duty shall be collected in the same manner, and under the same regulations, as 
 other duties laid on the importation of foreign goods, wares, and merchandise into 
 the United States: Provided, That drawback shall in no case be allowed, and the 
 term of credit for the payment of duties shall be nine months. 
 
 Sec. 2. And be it further enacted. That on all pickled fish of the fisheries of the 
 United States, exported therefrom subsequent to the last day of December, eighteen 
 hundred and fourteen, there shall be allowed and paid a bounty of twenty cents per 
 barrel, to be paid by the collector of the district from which the same shall be so 
 exported, without any deduction or abatement: Provided always, That in order to 
 entitle the exporter or exporters of such pickled fish to the benefit of such bounty or 
 allowance, the said exporter or exporters shall make entry with the collector and 
 naval officer of the district from whence the said pickled fish are intended to be 
 exported; and shall specify in such entry the names of the master and vessel in which 
 and the place where such fish are intended to be exported, together wiUi the par- 
 ticular quantity; and proof shall be made to the satisfaction of the collector of the 
 district from which such pickled fish are intended to be exported, and of the naval 
 officer thereof, if any, that the same are of the fisheries of the United St&tes; and no 
 entry shall be received as aforesaid of any pickled fish which have not been inspected 
 and marked pursuant to the inspection laws of the respective States where inspection 
 laws are in force in regard to any pickled fish, and the casks containing such fish 
 shall be branded with the words "for bountyj" with the name of the inspector or 
 packer, the species and quality of the fish contained therein, and the name of the port 
 of exportation; and the collector of such district shall, together with the naval officer, 
 where there is one, grant an order or permit for the inspector to examine the 
 pickled fish as expressed in such entry, and if they correspond therewith, and the 
 said officer is fully satisfied that they are of the fisheries of the United States, to 
 lade the same, agreeably to such entry, on board the ship or vessel therein expressed ; 
 which lading shall be performed under the superintendence of the officer examining 
 the same, who shall make returns of the quantity and quality of pickled fish so laden 
 on board, in virtue of such order or permit, to the officer or officers granting the same. 
 And the said exporter or exporters, when the lading is conjpleted, and after returns 
 thereof have been made as above directed, shall make oath or affirmation that the 
 pickled fish expressed in such entry, and then actually laden on board the ship or 
 vessel as therein expressed, are truly and bona fide of the fisheries of the United States, 
 that they are truly intended to be exported as therein specified, and are not intended 
 to be relanded within the limits of the United States; andshall also give bond in double 
 the amount of the bounty or allowance to be received, with one or more Bureties to the 
 satisfaction of the collector of the port or place from which the said pickled fi^ are 
 
BEPOBT OP AMERIOAN HEBOHAKT MAEOfE COMMISSION. LXXV 
 
 intended to Ije exported, conditioned that the same shall be landed and left at some 
 foreign port or place without the limits aforesaid; which bonds shall be cancelled at 
 the same periods and in like manner as is provided in respect to bonds given on the 
 ^portation of goods, wares, and merchandise entitled to drawback of duties: Pro- 
 ■MkS Awayt, That the sai4 bounty or allowance shall not be paid until at least six 
 months after the exportation of such pickled fish, to be computed from the date of 
 bond, and until the exporter or exporters thereof shall produce to the collector with 
 whom such outward entry is made such certificates or other satisfactory proof oi the 
 landing of the same as aforesaid as is made necessary for cancelling the bonds given 
 on the exportation of goods entitled to drawback: And provided also, That the 
 bounty or allowance as foresaid shall not be paid unless the same shaU amount to 
 ten dollars at least upon each entry. 
 
 Sbc. 3. And be it further enacted, That no bounty, drawback, or allowance shall be 
 made under the authority of this act unless it shall be proved to the satisfaction of 
 the collector that the pickled fish for which the bounty, drawback, or allowance 
 shall be claimed was whoUy cured with foreign salt, and on which a duty shall have 
 been secured or paid. 
 
 Sec. 4. And be it further enacted, That if any pickled fish shall be falsely or fraudu- 
 lently entered, with intent to obtain the bounty or allowance on their exportation 
 as here provided, when the said fish are not entitled to the same, the said fish or the 
 value thereof, to be recovered of the person making such false entry, shall be forfeited. 
 
 Sbc. 5. And be it further enacted, That from and after the last day of December, 1814, 
 there shall be paid on the last day of December, annually, to the owner of every 
 vessel or his agent, by the collector of the district where such vessel may belong, that 
 shall be qualified agreeably to law for carrying on the bank and other cod fisheries, 
 and that shall actually have been employed therein at sea for the term of four months, 
 at the least, of the fishing season next preceding, which season is accounted to be from 
 the last day of February to the last day of November in every year, for each and every 
 ton of such vessel's burthen according to her admeasurement as licensed or enrolled, 
 if of 20 tons and not exceeding 30 tons, $2.40, and if above 30 tons, $4, of which allow- 
 ance aforesaid three-eighths part shall accrue and belong to the owner of such fish- 
 ing vessel and the other five-eighths thereof shall be divided by him, his agent or 
 lawful representative, to and among the several fishermen who shall have been 
 employed in such vessel during the season aforesaid, or a part thereof, as the case 
 may be, in such proportion as the fish they shall respectively have taken may bear 
 to the whole quantity of fish taken on board such vessel during such season: Provided, 
 Thatithj^ allowance aforesaid on any one vessel for one season shall not exceed $272. 
 
 Sec. 6- And be it further enacted. That from and after the last day of December, 
 1814, ther@ shall also be paid, on the last day of December, annually to the owner of 
 every fishing boat or vessel of more than 5 tons and less than 20 tons, or to his agent 
 or lawful representative, by the collector of the district where such boat or vessel 
 may belong, the sum of $1.60 upon every ton admeasurement of such boat or vessel, 
 and shall accordingly be so divided among all persons interested therein: Provided, 
 howaier. That this Slowance shall be made only to such boats or vessels as shall have 
 been actually employed at sea in the cod fishery for the term of four months at leaat 
 of the preceding season : And provided also. That such boat or vessel shall have landed 
 in the course of said preceding season a q^uantity of fish not less than 12 quintals for 
 every ton of her admeasurement; the said quantity of fish to be ascertained when 
 dried and cured fit for exportation, and according to the weight thereof as the 
 same shall weigh at the time of delivery when actually sold, wmch account of the 
 weight with the original adjustment and settlement of the fare or fares among the 
 owners and fishermen, together with a written account of the length, breadth, and 
 depth of said boat or vessel, and the time she haS' actually been employed in the 
 fishery in the preceding season, shall in all cases be produced and sworn or aflSrmed 
 to before the said collector of the district, in order to entitle the owner, his agent, or 
 lawful representative to receive the allowances aforesaid. And if at any time within 
 one year after payment of such allowance it shall appear that any fraud or deceit has 
 been practiced in obtaining the same, the boat or vessel upon which such allowance 
 shall have been paid, if found within the district aforesaid, shall be forfeited; other- 
 wise the owner or owners having practiced such fraud or deceit shall forfeit and pay 
 $100, to be sued for, recovered, and distributed in the same manner as forfeitures and 
 penalties are to be sued for, recovered, and distributed for any breach of the act 
 entitled "An act to regulate the collection of duties on imports and tonnage." 
 
 Sec. 7. And be it further enacted. That the owner or owners of every fishing vessel 
 of 20 tons and upward, his or their agent or lawful representative, shall, previous to 
 receiving the allowance made by this act, produce to the collector who is authorized 
 
LXXVI REPOBT OF AMEBIOAN MEKOHANT MARINE COMMISSION. 
 
 to pay the same the original agreement or ^greementswhich may h^ve been made 
 with the fishermen employed on board such vessel a^ is herembef^e '^quirea, ana 
 also a certificate, to be by him or them subscribed, therein i^entionmg the parucuur 
 days on which such vessel sailed and returned on t^lt'Tnth n/t^ch he Ttbev 
 may have made in the preceding fishing season, to the truth of whicJi ne or tfley 
 shall swear or afSrm before the collector aforesaid. unward 
 
 Sec 8 And be it fvuriher enacted, That no ship or vessel oi 20 tons or upwara, 
 emXyedlsaforelM stall be entitled to the allowance granted by this a*t untes 
 iS skipper or mSter thereof shall, before he proceeds on any fishing voyage, make 
 an agreement, in writing or in prmt, with every fisherman employed therem, accord- 
 ing to the provisions of the act entitled "An act for the government of persons in 
 
 "^S^9^1nd^e UfuHher enacted, That any person who shall make any false declara- 
 tion in any oath or affirmation required by this act, being duly convicted thereof m 
 any court of the United States having junsdiction of such offense,_ shall be deemed 
 euilty of willful and corrupt perjury, and shall be punished accordmgly. 
 
 Sec. 10. And he it further enacted, That this act shall contmue m force until the 
 termination of the war in which the United States are now engaged with the United 
 Kingdom of Great Britain and Ireland and the dependencies thereof and for one year 
 thereafter, and no longer. 
 
 Approved, July 29, 1813. 
 
 The above act was continued by act of February 9, 1816. 
 Amended, March 3, 1819. 
 
 AN ACT in addition to and alteration of an act entitled "An act laying a duty on Imported salt, 
 ^ranting a bounty on pickled fish exported, and allowances to certain vesela employed in the 
 
 [Fifteenth Congress, second session, chapter 88.] 
 
 Be it enaded by the Senate and House of Representatives of the United States ttf Amer- 
 ica in Congress assembled, That from and after the passmg of this act there shall be 
 paid, on the last day of December, annually, to the owner of every fishing boat or 
 vessel, or his agent, by the collector of the district where such boat or vessel may 
 belong, that shall be qualified agreeably to law for carrying on the bank and other 
 cod fisheries, and that snaU actually have been employed therein at sea for the term 
 of four months at least of the fishing season next preceding, which season is 
 accounted to be from the last day of February to the last day of November Lq every 
 year, for each and every ton of such boat's or vessel's burden, according to her admeas- 
 urement as licensed or enrolled, if of more than 5 tons and not exceeding 30 tons, 
 $3.60; if above 30 tons, |i4, and if above 30 tons and having had a crew of not less 
 than ten persons, and having been actually employed in the cod fishery at sea for 
 the term of three and one-halt months at the least, but less than four months, of the 
 season aforesaid, $3.50: Provided, That the allowance aforesaid on any one vessel 
 for one season shall not exceed $360. 
 
 Sec. 2. And be it farther enacted, That such parts of the fifth and sixth sections of 
 the act hereby amended as are contrary to the provisions of this act be, and the 
 same are hereby, repealed. 
 
 Approved, March 3, 1819. 
 
 Sec. 6 of an act reducing the duty on imports, and for other purposes. (Chapter 74, Twenty-ninth 
 Congress, first session, July 30, 1846.) 
 
 Sec. 5. And be U further enacted, That from and after the first day of December 
 next, in lieu of the bounty heretofore authorized by law to be paid on the exporta- 
 tion of pickled fish of the fisheries of the United States, there shall be allowed on 
 the exportation thereof, if cured with foreign salt, a drawback equal in amount to 
 the duty paid on the salt, and no more, to be ascertained under such regulations as 
 may be prescribed bv the Secretary of the Treasury. 
 
 Approved, July 30', 1846. 
 
 Sec. 4. 
 bounties 
 
 Sec. 4, chapter 298, Laws of 1866, Thirty-ninth Congress, first i 
 
 And be UfuHher enacted. That all laws and parts of laws alio wine fishine 
 to vessels hereafter licensed to engage in the fisheries be, and the same are 
 
BEPORT OF AMERICAN MERCHANT MARINE COMMISSION. LXXVII 
 
 hereby, repealed: Provided, That from and after the date of the passage of this act, 
 vessels licensed to engage in the fisheries may take on board imported salt in bond 
 to be used in curing fish, under such regulations as the Secretary of the Treasury 
 shall prescribe, and upon proof that said salt has been used in curing fish the duties 
 on the same shall be remitted. 
 
 paarch 1, 1817.] 
 AN ACT concerning the navigation of the United States. 
 
 Sec. 3. And be it further enacted, That after the thirtieth day of September next the 
 bounties and allowances now granted by law to the owners of boats or vessels engaged 
 in the fisheries shall be paid only on boats or vessels the officers and at least three- 
 fourths of the crews of which shall be proved, to the satisfaction of the collector of 
 the district where such boat or vessel shall belong, to be citizens of the United States 
 or persons not the subjects of any foreign prince or state. 
 
 [June 28, 1864.] 
 
 AN ACT repealing certain proylsions of law concerning seamen on board public and private vessels 
 
 of ttie United States. 
 
 Be ii enacted by the Senate and Soitse of Representatives of the United States of America 
 in Congress assembled, That so much of an act entitled "An act for the regiolation of 
 seamen on board the public and private vessels of the United States," approved the 
 third of March, one thousand eight hundred and thirteen, as makes it not lawful to 
 employ on board any of the public or private vessels of the United States any per- 
 son or persons except citizens of the United States or person [s] of color,, natives of 
 the United States; and so much of the third, fifth, sixth, and seventh sections of 
 "An act concerning the navigation of the United States," approved the first of March, 
 one thousand eight hundred and seventeen, as concerns the crews of vessels therein 
 named; and so much of the first section of an act entitled "An act to repeal the ton- 
 nage duties upon ships and vessels of the United States and upon certain foreign 
 vessels," approved the thirty-first of May, one thousand eight hundred and thirty, 
 as makes discrimination in favor of vessels certain proportions of whose crews shall 
 be citizens of the United States, shall be, and the same are hereby, repealed: Pro- 
 vided, however, That officers of vessels of the United States shall in all cases be citizens 
 of the United States. 
 
 Appendix F. 
 japan's usbchant marine. 
 
 [From tlie Nautical Gazette, March 8, 1904.] 
 
 Mr. K. Uchida, director of the marine bureau. Empire of Japan, prepared and 
 read a most interesting paper at the last meeting of the Japanese Society of Naval 
 Architects, which was held in Osaka. This paper was entitled "On shipbuilding 
 bounties, as applied in Japan and abroad," and is a complete history of the rapid 
 rise of the nation among the maritime powers of the world. When she fought with 
 China, Japan had few merchant vessels and fewer war vessels. At the close of this 
 war the Government resolved to encourage not only shipbuilding, but the establish- 
 ment of steamship lines to various parts of the world as well. To stimulate her 
 citizens and shipowners to activity in these lines liberal inducements were offered. 
 The Government passed an act in 1896, to remain in force eighteen years, which 
 especially encouraged not only the building of ships but of running them. The 
 following bounties were provided for: All vessels of over 700 tons to 1,000 tons, if 
 built in Japan, were to receive 12 yen (about $6) per ton, and those over 1,000 tons 
 were to receive 20 yen (about $10) per ton upon the vessel itself. For the machinery 
 a uniform rate of 5 yen per indicated horsepower (determined on trial) was to be 
 paid on all native-built steamers over 700 tons. Up to the end of 1903 31 steamers 
 
LXXVIII REPORT OP AMERIOAH MERCHANT MARINE COMMISSION. 
 
 had been built in Japan, and 10 more were being built, all of which came under the 
 head of this act. The total tonnage of these steamers was something over 86,000 
 gross tons, and the total indicated norsepower over 71,000. 
 
 Aside from the stimulating influence of an act that makes it obligatory on the 
 Government to assume a portion of the original cost of a vessel, it also provides for 
 the regular payment of subsidies or bounties to those vessels when placed in the 
 fore^n trade. The amounts of subsidy paid each year by Japan to such vessels for 
 the first six years succeeding the passage of the act were as follows: 
 
 1897 $360,000 1900 $605,000 
 
 1898 1,315,000 1901 450,000 
 
 1899 2,020,000 1902 160,000 
 
 The reason for the rapid decline in the amounts paid after the year 1899 is 
 explained in the following manner: Under the act of 1896 all Japanese steamers of 
 more than 1,000 tons and of a speed exceeding 10 knots receive subsidy just as long 
 as they are engaged in the foreign trade, the minimum subsidy amounting to 25 sen 
 (about 12J cents) per ton per 1,000 miles traveled. With the increase and size of 
 the ship, as well as of speed, the subsidy increases up to 60 sen (30 cents), the 
 tonnage required to insure this highest rate being 6,000 and speed 17 knots. From 
 the date of the launch of the steamer up to and including her fifth year, the subsidy 
 is paid in full. After the fifth j^ear it is reduced 5 per cent every year, and when 
 the steamer is 15 years old it is withdrawn alto^ther. 
 
 It ia stated that the encouragement thus given was found to be insufficient to 
 induce Japanese owners to enter into serious competition with well-established for- 
 eign steamship companies. This fact known, in 1899 a new departure was made, 
 and the Government entered into special contracts with steamship owners to give 
 regular service on certain definite routes. As these lines receive the special subsidy 
 omy, the steamers that benefit under the old arrangement are fewer than was previ- 
 ously the case. Thus the special subsidies now being paid and assured steamship 
 lines predominate largely over those paid out on account of the old act of 1896. At 
 the present time the definite contracts with the Government are those in force with 
 the Nippon Yusen Kaisha, the Toyo Kisen Kaisha, the Osaka Shosen Kaisha, the 
 Daito Kisen Kaisha, H. Oie & Co., and the Hunan Steamship Company. The Nip- 
 pon Yusen Kaisha is, of course, the leading line, and naturally controls the lai^est 
 number of steamers and the principal routes. These routes, and the subsidies paid, 
 are as follows: 
 
 Yokohama to Melbourne, employing 3 steamers of 3,500 tons and above; speed, 16 
 knots and above. A monthly service. Subsidy, $268,000. Contract runs from April, 
 1901, to March, 1906. 
 
 Yokohama to Bombay, employing 3 steamers of 3,000 tons and above; 10 knots and 
 above. A monthly service. Subsidy, $91,000. Contract runs from April, 1901, to 
 March, 1906. 
 
 European line, employing 12 steamers of 6,000 tons and above; 14 knots and above. 
 A forbiightly service. Subsidy, $1,364,000. Contract runs from January, 1900, to 
 December, 1909. 
 
 Hongkong to Seattle, employing 3 steamers of 6,000 tons and above; 15 knots and 
 above. A four weeks' service. Subsidy, $333,600. Contract runs from November, 
 1901, to December, 1909. 
 
 Also mail routes: 
 
 1. Yokohama to Shanghai, employing 8 steamers of 2,250 tons and above; 14 knots 
 and above. A weekly service. 
 
 2. Kobe to North China, employing 3 steamers of 1,400 tons and above; 12 knots 
 and above. A weekly service, except in winter. 
 
 8. Kobe, Korea, and North China, employing 1 steamer of over 1,400 tons: speed, 
 over 12 knots. A four weeks' service. 
 
 4. Kobe to Vladivostock, employing 1 steamer of over 1,400 tons and 12 knots. A 
 four weeks' service. 
 
 5. Kobe to Otaru, employing 12 steamers of 1,400 tons and above; 14 knots and 
 above; two routes: eastern, 10 times a month; western, weekly. 
 
 6. Aomori to Mororan, employing 3 steamers of 700 tons and above; 10 knots and 
 above. A daily service. 
 
 The joint subsidy for the foregoing six mail routes is $280,500. Contract runs 
 from October, 1900, to September, 1905. 
 
 The Toyo Kisen Kaisha runs its steamers between Hongkong and San Francisco 
 It employs 3 vessels of 6,000 tons and above, and 17 knots and above It eives a 
 four weeks' service. The subsidy is $517,000 per annum. The contract ruM from 
 January, 1900, to December, 1909. 
 
REPORT OF AMERICAN MERCHANT MARINE COMMISSION. LXXIX 
 
 The following routes are covered by the Osaka Shosen Kaisha: Shanghai to Han- 
 kow, employing 3 steamers of 2,000 tons and above; 11 knots and above. A bi-weekly 
 service; in winter, three times a fortnight. Subsidy, $125,000. Contract runs from 
 January, 1898, to December, 1907. Hankow to Ich'ang, employing 2 vessels of 1,500 
 tons and above; 10 knots and above. Service, six times a month; in winter four 
 thneg. Subsidy, $56,000. Contract runs from January, 1899, to December, 1907. 
 Kobe to Korea, employing 2 steamers of 700 tons and above; 10 knots and above. 
 A three weeks' service. Subsidy, $15,500. Contract runs from October, 1900, to 
 September, 1905. 
 
 The Daito Kisen Kaisha have vessels on Chinese rivers and receive $29,500 sub- 
 sidy, and H. Oie & Co. operate steamers on the Japanese Sea, and enjoy a yearly 
 bounty of $70,000. 
 
 The special service above enumerated costs the Japanese Government $3,150,000 a 
 year, in addition to the amounts given on account of new hulls and machinery and 
 the ordinary subsidy to vessels engaging in the foreign trade not on regular lines. 
 
 Appendix G. 
 how sweden encottbages seef-sea tbade. 
 
 (Prom the Nautical Gazette, November 10, 1904.) 
 
 As an evidence of the manner in which the comparatively insignificant maritime 
 country of Sweden aids and encourages its shipowners, the following facts reo;arding 
 loans made by the Government to a number of lines, taken from a Swedish trade 
 journal called " Affarsvarlden, " which, broadly translated, means "The Business 
 World," is cited: 
 
 "Sometime ago we enumerated the Swedish shipping firms which have been 
 granted considerable loans in order more effectively to develop the Swedish shipping 
 trade abroad. It is evident that this step will also be of great advantage to our export 
 trade, in both direct and indirect ways. The Tirfing Steamship Company, which 
 obtained a grant of $80,400, commenced its activity with three small ships, plying on 
 the Baltic and the North Sea. Since 1897 the steamers ha^e become larger and more 
 numerous, and they now number sixteen, keeping up different trades both on the 
 above-named seas and on the Atlantic. The capital of the company, which has 
 risen to $846,880, will now be further increased by $194,300 for buying two new 
 steamers. 
 
 The company has gone in chiefly for the foreign shipping to and from Sweden. 
 Thus it has run 1 steamer with freights between ports in North America and Tampico 
 in Mexico; 5 steamers with ore freight from Narvik and Lulea to the Netherlands, 
 England, and Belgium ; 5 steamers with coal and timber freights on the Baltic and 
 North seas; 2 steamers with ore freights from Oxelosund to Stettin, and finally 3 
 steamers on the south coast Baltic route. The Motala Shipping Company, having 
 been granted $26,800, has since 1899 chiefly carried on navigation on the Baltic and 
 the North seas, in some cases extended to the Mediterranean and the White seas. The 
 Disa Shipping Company has run its ships between Sweden and England, or France, 
 and also between these last countries and Portugal. Lately the company bought a 
 new, large steamer, built in Sweden, which is intended for carrying freight between 
 North America, the West Indies, and South America. The same company even con- 
 templates establishing a coast route in China. Mr. Marcus Wallenberg, who obtained 
 a loan of $53,332, states that the South African Trading Company has sol(i its steamer 
 to him. This will be sent on with freights to distant waters. The company has just 
 bought another steamer, which will pass into the hands of Mr. Wallenberg to be 
 used for distant navigation. 
 
 ' ' The Nike Shipping Company also has lines to South Africa. It is indeed of great 
 importance that we should get direct trade with those ports, since our exporters have 
 had to send their goods via Hamburg, Antwerp, or London, which of course made 
 the expenses very heavy. The company will run 4 steamers, sending 1 every mouth 
 from Sweden. Mr. C. J. Sandell has sent his ships to Brazil, the West Indies, North 
 America, South Africa, and Australia. The Heimdal Steamship Company was granted 
 a loan of $47,168. It hascarriedinfrei^httraflBc with 3 steamers without any regular 
 routes, chiefly between ports in Eessia, Germany, England, and France. In a 
 snvaller degree it has carried coal, stone, timber, and wood pulp. One steamer Ijas 
 also been plying between ports on the Mediterranean and England." 
 
 3a— 04 VI 
 
LXXX REPORT OF AMERICAN MERCHANT MARINE COMMISSION. 
 
 The total amount loaned by the Government, as outlined above, is over $400,000, 
 aiid this has all been given in recent years. It is a notable fact that all countries 
 that h^ve a realizing sense of the importance of a merchant marine to do their trans- 
 porting consider the maritime situation most carefully and consistently, and when 
 Government a,id will accomplish anything they are not slow to cooperate and assi-^t 
 in the placing of lines of trade on a firm and enduring basis. They appreciate fully 
 and vividly the necessity of such maritime strength. 
 
INDEX TO REPORT OE THE MERCHANT MARINE COMMISSION. 
 
 Page. 
 
 Act of Congress creating the Commission i 
 
 American ships, wages, officers, and crew xi, xii 
 
 American shipyards : 
 
 Xo construction for foi'eigu ti'ade vi 
 
 AVages of labor vii, x 
 
 Appendix to Commission report : 
 
 A. Tonnage of the United States merchant marine employed in the 
 
 foreign trade, the coasting trade, and the fisheries, from 1789 
 
 to 1904 LXiii 
 
 B. Tonnage of the world and of the important maritime powers lxv 
 
 C. The new Cunard subsidy (from the Report of the Commissioner 
 
 of Navigation for 1003) lxvi 
 
 D. Inquiries as to the free-ship question lxx 
 
 E. Summary of American laws tor bounties to fishing vessels lxxiii 
 
 F. .Tapan's merchant marine (from the Nautical Gazette, March 3, 
 
 1904) Lxxvn 
 
 G. How Sweden encourages deep-sea trade (from the Nautical Ga- 
 
 zette, November 10, 1904) lxxix 
 
 Brazil, , trade with the United States v, xxvi, xxxvii 
 
 Cuba, shipping, reciprocity in trade with xliu 
 
 B'oreign carrying trade of the United States : 
 
 New markets, need of iv 
 
 Transportation, cost of v 
 
 Foreign discrimination against American agricultural exports, retalia- 
 tion for XXXVIII 
 
 Government aid to American shipping : 
 
 Remedial legislation proposed xvui 
 
 Urgent need for xlv 
 
 Hearings held by the Commission il 
 
 Legislation recommended : 
 
 Bill to promote the national defense; to create a force of navnl 
 volunteers ; to establish American ocean mail lines to foreign 
 markets ; to promote commerce, and to provide revenue from ton- 
 nage (S. 6291, 58th Cong., 3d sess.) xr,vi 
 
 Bill to provide for the use of vessels of the United States for public 
 
 purposes ( ) li 
 
 Estimated cost of xxxv. xxxvi 
 
 Marine-Hospital Service, maintenance of xxxm 
 
 Naval reserve: 
 
 An essential factor for National defense xvin 
 
 Recruited from deep-sea fisheries xxi. xxiv, xlvi 
 
 Naval volunteers : 
 
 Annual retainer recommended xix, xtvi 
 
 Precedents for bounties i xx, xxiv 
 
 Ocean mall act of 1891 : 
 
 American lines operating under contracts provided for by xxv 
 
 Extension recommended xxv 
 
 Ocean mail service of the United States: 
 
 Dependent upon foreign fast steamship lines iv 
 
 Estimated cost of proposed new routes xxxvn 
 
 Naval-reserve requirements xxx 
 
 North Atlantic problems xliv 
 
 Profits should be applied to extension of service xxxvii 
 
 Proposed new routes xxv 
 
 i,xxxi 
 
LXXXII INDEX. 
 
 Paga 
 Panama Canal, transportation of supplies, reservation to American 
 
 sWps xLi, XLir 
 
 Postal subvention : 
 
 Foreign xv 
 
 Historic legislation concerning xxx, xxxi 
 
 Proposed new routes, comparison of rates xxviii 
 
 Public sentiment unanimous for rehabilitation of American shipping— in 
 
 Sailing vessels, value .as schools of seamanship xxii 
 
 Seamen, American, improved service conditions recommended xir 
 
 Ship construction : 
 
 Cost of, compared vii, viii, x 
 
 Materials — 
 
 Cost .of viit 
 
 Free viii, x 
 
 Steel i)late, cust of ix 
 
 South Africa, American export trade to xxvii 
 
 South America : 
 
 Inadequate trade facilities iv, xxvi, xxviii, xxxvii 
 
 No .Vmerican ships in trade with xxxvii 
 
 Subsidized steamship lines in Pacific Ocean trade xvi 
 
 Subsidy : 
 
 American shipping, competition with foreign subsidized steamship 
 
 lines XV, xvi 
 
 Cunard contract of 1902 xv, xxv 
 
 Policy of foreign nations xiv 
 
 Policy of Great Britain xv 
 
 Tonnage subvention : 
 
 For cargo vessels especially xxi, xxiii 
 
 Kate of compensation xx, xxii, xlvii 
 
 Tonnage tax : ■ 
 
 Proposed legislation coucerniQg xxxi, i. 
 
 Provision of British shipping act of 189S, concerning naval reserve^ xxxiv 
 
 Relation to river and harbor improvements xxxv 
 
 Remission in favor of vessels training boys for naval reserve, xxxiii, xxxvi, l 
 
 Tonnage tax and light dues, how applied xxxii 
 
 Transport service, discontinuance of, recommended xxxix 
 
 Turbine engines for marine propulsion, British experiments in xliv 
 
 Views or the Minority lhi 
 
 Discriminating duties : 
 
 Abolition of the free list liv 
 
 Abrogation of commercial treaties Lm 
 
 Historic American policy Liii 
 
 Prosperity of American shipping under policy of i.iii, liv 
 
 Legislation proposed, objections lvi. lxi 
 
 Marine-PIospital Service, maintenance of Lxr 
 
 Naval volunteers and naval reserve i,ix 
 
 Ship construction : 
 
 Admiralty regulations x.x 
 
 Cost of, compared Ly 
 
 Materials, cost of n^ 
 
 Steel plate, cost of 2 liv 
 
 Steel trust, discrimination against American shipbuilders '___ liv, lv 
 
 Subsidy : 
 
 Admiralty subvention of Great Britain ix 
 
 Previous bills compared lyu lviii 
 
 Public sentiment concerning J ' ^yjj 
 
 Subsidy and subvention, distinction between 1_ lx 
 
 Tonnage subvention, rates of compensation I_III_ Lvii, Lvni 
 
 Tonnage taxes ^_"_"'_ ^vi lxi 
 
HEARINGS BEFORE THE MERCHANT MARINE 
 COMMISSION. 
 
 3a— 04- 
 
HEARINGS BEFORE THE MERCHANT MARINE 
 
 COMMISSION. 
 
 HEARLN^GS AT NEW YORK. 
 
 Office of the Board of Trade and Transportation, 
 
 New York City, N. T., May ^3, 1904. 
 
 The Commission met at 10.30 o'clock a. m. 
 
 Present: Senators Gallinger (Chairman), Lodge, Martin, and 
 Mallory, and Representatives Grosvbnor, Minor, Humphrey, 
 Spight, and McDermott. 
 
 The Chairman (Senator Gallingei'). The Chair has a telegram, dated 
 at Washington, from Senator Penrose, who was extremely anxious to 
 be with the Commission at this sitting, saying that he was late in arriv- 
 ing in Washington, and that he will reach New York this evening. 
 
 ADDRESS OF HON. DABWIN B. JAMES. 
 
 Mr. James. Mr. Chairman and gentlemen of the Merchant-Marine 
 Commission, the president of the New York Board of Trade and Trans- 
 portation, Hon. Oscar S. Straus, was suddenly called upon to leave the 
 city a week and a half ago. He laid upon me the duty to extend to 
 j'ou his greetings and cordially to invite you to the hospitality of the 
 city, promising such assistance as can be rendered by our board. 
 
 He also wished me to say that the board itself is exceedingly grati- 
 fied at what was done during the past session of the Fifty-eighth Con- 
 gress for the merchant-marine service of the country, especially the 
 work which the Congress did for the Philippines and with respect to 
 the appointment of this Commission. 
 
 It seems to some of us that perhaps the time is ripe for some legis- 
 lation toward the accomplishment of the great end which we all desire — 
 that our merchant marine, engaged in the ocean trade, may be put upon 
 a better basis. It is not necessary for me to go into an explanation of 
 the matter, for you know it better than I do, probably. You know 
 the facts which our board, through its very efficient committee, dur- 
 ing the last j^ear has been scattering throughout the country, especially 
 to the press, and thus broadcast all over the country — information 
 bearing directly upon this subject. We have not endeavored to argue 
 any particular point or to advocate any special measure. We are not 
 wise enough for that. But we have been endeavoring to lay before 
 the press and through the press before the people of the country a 
 statement of the facts; and the facts as presented by our committee 
 were so striking that they have produced quite an efiPect. We have 
 received innumerable answers from all over the country, evincing very 
 great interest in the matter. So it seems to me perhaps it is an oppor- 
 tune time for you to engage in this work. 
 
 3 
 
4 HEARINGS BEFORE THE MBKCHANT MARINE COMMISSION. 
 
 We are only sorry that you are not able to give ps more time in 
 New York. We have very many gentlemen who desire to be heard. 
 We know you will be received throughout the country by all the peo- 
 ple wherever you go with great acclaim, and we wish you much suc- 
 cess. We believe, as I said before, that this is an opportune time, and 
 that you will be able to present something in your report to Congress 
 which the majority of the people will accept, and which we hope will 
 afford relief. 
 
 RESPONSE OF THE CHAIRMAN. 
 
 The Chairman. Mr. James, on behalf of the Merchant Marine 
 Commission I wish to thank you, sir, and through you your associates, 
 for the kind and generous words you have just spoken. 
 
 The Commission is here in the discharge of a responsible and trouble- 
 some task. We all realize the fact that the problem set before us is 
 not one easy of accomplishment, but we are hopeful that through the 
 kindly aid and cooperation of men like those assembled in thisroom 
 this morning we may he able to reach some conclusion which will lay 
 the basis, at least, for subsequent action that may result in accom- 
 plishing the object we all so much desire. 
 
 I wish to say a word in reference to the Commission itself and the 
 work that is set before it, and then we will be ready for business. 1 
 will emphasize the fact that this is to be, so far as the wishes of the 
 Commission are concerned, a business meeting. We do not want to 
 spend a moment's time in useless discussion or argument on matters 
 that are already settled, but we desire, so far as it is possible, to learn 
 the facts and to be given information that will aid us in our work. 
 
 THE ACT CREATING THE COMMISSION. 
 
 The Merchant Marine Commission has met under authority con- 
 ferred by an act of Congress approved April 28, 1904, entitled "An 
 act creating a commission to consider and recommend legislation for 
 the development of the American merchant marine, and for other pur- 
 poses." For the information of those who may not have seen the act, 
 1 will read it: 
 
 "^e it enacted hy the Senate and House of Represenfitativea of the United 
 States of Aine7'ica in Congress assembled^ That a commission is hereby 
 created, to be called 'The Merchant Marine Commission,' to be com- 
 posed as follows: Five members of the Senate of the United States 
 and five members of the House of Representatives of the United States, 
 to be appointed by the presiding officer of each House of Congress, 
 respectively: Provided, That at least two of the said members of the 
 Senate and two of the said members of the House of Representatives 
 shall be members of the minority party. 
 
 " Sec 2. That it shall be the duty of this commission to investigate 
 and to report to the Congress on the first day of its next session what 
 legislation, if any, is desirable for the development of the American 
 merchant marine and American commerce, and also what change, or 
 changes, if any, should be made in existing laws relating to the treat- 
 ment, comfort, and safety of seamen, in order to make more attractive 
 the seafaring calhng in the American merchant service. 
 
 "Sec 3. That the commission shall give reasonable time for hear- 
 ings, if deemed necessary, and if necessary it may appoint a subcom- 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 5 
 
 missiou or subcommissions of its own members to make investigation 
 in any part of the United States, and it shall be allowed actual neces- 
 sary expenses for the same. It shall have the authority to send for 
 persons and papers and to administer oaths and affirmations. All nec- 
 essary expenses, including clerks, stenographers, messengers, rent for 
 place of meeting, and printing and stationery, shall be paid from any 
 money in the Treasury not otherwise appropriated; however, not to 
 exceed twenty thousand dollars for expenditure under this section, to 
 be paid upon vouchers to be approved by the chairman of the com- 
 mission. 
 
 " Sec. 4. That any vacancies occurring in the commission, by reason 
 of death, disability, or from any other cause, shall be filled by appoint- 
 ment by the officer and in the same manner as was the member whose 
 retirement from the commission creates the vacancy. " 
 
 Now, gentlemen, I assume that little time need be wasted in a discus- 
 sion of existing conditions, so far as the merchant marine of our coun- 
 try is concerned. It is a matter of universal knowledge and almost 
 universal regret that our deep-sea shipping is practically driven from 
 the ocean, more than 90 per cent of our foreign commerce being car- 
 ried in foreign ships flying foreign flags. It seems to me that what we 
 want more particularly to inquire into is the remedy for the existing 
 deplorable state of affairs, and we will be fortunate indeed if the discus- 
 sion, here and elsewhere, sheds such light on the subject as will enable 
 this Commission to recommend to Congress legislation of a remedial 
 character. It is the desire of the Commission that those of you who 
 participate in the discussion will feel at liberty to present the subject 
 each iji his own wslj, it being understood in advance that the Commis- 
 sion is not here for the purpose of exploiting any particular theory or 
 advancing the interests of any particular measure. We will be pleased 
 to hear those who advocate direct subsidies, and equally those who 
 believe that the adoption of a system of discriminating duties or postal 
 subventions will solve the problem, or any other method that promises 
 relief. We will also be glad to hear from the representatives of labor, 
 the representatives of seamen, or other organizations, in the hope that 
 they may be able to shed more or less light on this complex and 
 troublesome question. With this understanding the Commission is 
 ready to proceed with the hearing. 
 
 STATEMENT OF THOMAS CLYDE. 
 
 The Chairman. It has been suggested to the Commission that Mr. 
 Thomas Clyde, of William P. Clyde & Co. , of New York, large owners 
 and managers of steamships in the coastwise service to the Carolinas 
 and Florida, is present, and the Commission will be glad to hear from 
 him. 
 
 Mr. Clyde. Mr. Chairman and gentlemen of the commission, I 
 thank you for the invitation in response to which I am here to address 
 you. 
 
 I have devoted a good deal of tune to a study of the American mer- 
 chant-marine problem, and had come to feel that the greatest obstacle 
 in the way of its solution was the difficulty of securing for it the undi- 
 vided, unbiased, and patient consideration of a thoroughly competent 
 and representative committee of Congress. 
 
 Although this question has frequently been before able and eminent 
 
6 HEAEINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 committees of Congress, it has heretofore always had to share the 
 attention of such committees with other important questions, and in 
 the hurrj^ and rush of busy sessions has unavoidably failed to receive 
 the time and attention to whicli it was entitled. 
 
 To this fact alone I attribute the slight progress yet made toward a 
 full and general understanding and solution of this vitally important 
 question. 
 
 The appointment of this commission to sit during the summer, and 
 with no other official duty to perform except to solve the merchant- 
 marine problem, guarantees its speedy and proper solution. 
 
 As 1 look about me to-day and realize that men whose names are 
 synonymous with wise, effective, progressive statesmanship through- 
 out our whole land, and whose every moment is of value to our 
 country, have been detailed by Congress to this work, and have vol- 
 untarily sacrificed their personal convenience, and to an appreciable 
 extent at least have staked their reputations on their ability to get at 
 the truth in this matter, and to show the people in terms they can com- 
 prehend what is wrong with the American merchant marine, what is 
 the best practicable remedy to apply, and what will be the cost of the 
 remedy, 1 feel no doubt as to the results. 
 
 As a citizen, I honor and thank you for undertaking the hard and 
 tiresome investigation upon which you ai'e entering. 
 
 As one who has studied much, though he lias accomplished little, 
 along the same lines, 1 humbly oiler you such aid as I may be able to 
 give. 
 
 I have been called a "subsidy grabber" because my affiliations liav- 
 been with those who believed in subsidies as the simplest, most efii'ec- 
 tive, and in the end cheapest method of equalizing the difference 
 between the actual cost of ocean carriage in American as compared 
 with foreign vessels, but 1 appear before you to-day not as an advo- 
 cate of any favorite remedy for the disease from which our merchant 
 marine is admitted to be suilering, but simply as a seeker for light, 
 who desires to help to analyze the problem, and who is prepared to 
 encounter facts as yet unknown, or at least only partly understood, 
 and who reserves his opinion as to any remedy until all facts and all 
 possible remedies have been fully considered. 
 
 FACTORS IN MAEINE COMPETITION. 
 
 I appreciate the force of your suggestion, Mr. Chairman, that we 
 get to business, and I will ask the members of the commission if they 
 will kindly hold in their bands a copy of a chart which I have prepared 
 and which has been of a good deal of assistance to me in holding my 
 own attention down to the elementary facts of this problem. 1 desire 
 to say that of all the questions I have ever attempted to analyze and 
 to get down to the bottom of, there are more blind alleys about this 
 one than any other I have ever struck. 
 
 The chart referred to is as follows: 
 
Hearings before the merchant marine commission. 
 
 
 
 
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8 HEAEINGS BEFORE THE MEECHANT MARINE COMMISSIOJSf. 
 
 Representative McDermott (examining chart). I do not see any fig- 
 ures here. What is the scheme « ^. +Uo „>,<,,.<- +>,o 
 
 Mr. Clyde. There are no figures. If I could fill out the chart the 
 appointment of this Commission would hardly have been necessary, 
 but I think I can explain to you that those blanks are very expressive. 
 
 If you will kindly read the writing on this chart I thmk i can show 
 what I have in mind. You will see that it is headed: 
 
 " Pro forma chart, designed to show comparative natural and artifi- 
 cial efficiency of maritime nations as regards elements of cost of carry- 
 ing competitive cargoes in ships of said nations." 
 
 Across the top of the columns you will find the names of the prin- 
 cipal maritime nations— Great Britain, Germany, Norway, France, 
 Italy, Austria, Spain, Japan, Holland, Denmark, the United' States, 
 being in the last column. Down the left-hand side of the chart you 
 will find the four principal elements of the actual cost of ocean trans- 
 portation under natural conditions; that is, where no nation makes any 
 efl'ort, by subsidy or otherwise, to change the condition in which she 
 finds herself, under which natural conditions the four elements of cost 
 are: First, the cost of construction of the ship; second, the cost of 
 operation of the ship; third, the cost of the maintenance of the ship; 
 and fourth, the cost of capital; that is, the prevailing rate of interest 
 in the country at which money can be borrowed for these purposes. 
 
 The reason why it is necessary to analyze the situation in this way 
 is that, strangely enough, you will find as yoii go into this question 
 there is no nation which, under natural conditions, excels in effi- 
 ciency in all of those four el(Miientary respects. You will find that 
 some excel in one, some excel in two or three, and the United States 
 is at the foot of the class in all. 
 
 If we could fill out those lilanks as to the four elements under 
 natural conditions and foot up each column, we would have a perfect 
 picture of the relative position of each maritime nation to-day as 
 regards competitive ocean commerce under natural conditions and with- 
 out reference to artificial aids. And in the long run the nation pos- 
 sessing the highest percentage of efficiency would undoubtedly get the 
 largest share of the business. 
 
 But the maritime nations have not been content to rest in a state of 
 nature. They have, more or less, all adopted artificial aids. There- 
 fore it is necessary, after we have filled out as best we can the spaces 
 down to the point where it says "Total of natural efficiency," to add 
 another line across the chart and fill in the relative efficiency of the 
 artificial aids which have been adopted. If we succeed in doing that, 
 and add the artificial aids to the totals of the columns just above, we 
 will get the actual condition of the competing maritime nations of the 
 world to-day. 
 
 I have suggested in a note at the foot of the chart: 
 
 Note.— There being four elements of cost to be dealt with in deter- 
 mining the relative natural efficiency, take 25 as the perfect figure as 
 to each element, fill all blank spaces accordingly, and the totals will 
 give the comparative percentages of natural efficiency of each nation. 
 Add to each total the comparative percentage of artificial aid given 
 and we will have the actual relati\'e percentages of efficiency as thev 
 exist to-day. ■ -^ 
 
 _ Representative McDermott. At this point let me ask you a aues 
 tion. After you have found the natural efficiency, then you add a 
 comparative percentage of artificial aid^ 
 
h>:aeings before the meechant marine commission. 9 
 
 Mr. Clyde. Yes, sir. 
 
 Representative McDeemott. It is not a comparative percentage of 
 artificial efficiency. You, therefore, assume in your figures that a 
 similar amount of artificial aid, illustrated by dollars and cents in the 
 form of a subsidy, for instance, will add an equal amount of efficiency 
 in each country ? 
 
 Mr. Clyde. No, sir; I do not assume that. That is the reason why 
 I use the term "artificial aid." Aid may not be efficient, and you will 
 find that in some nations it has not been efficient; and after you gen- 
 tlemen have determined to your own satisfaction, first, the disadvan- 
 tages under which the United States labors or would labor under 
 natural conditions, and, second, the disadvantages under which it labors 
 by reason of the added artificial methods that difierent nations have 
 adopted, you still will have to take into consideration the element of 
 efficiency as to any aid that you may see fit to adopt. And where a 
 nation has added an artificial aid which has not proved efficient, you 
 will have a much lower percentage to add to your natural percenteige 
 than j-^ou will where the artificial aid adopted by the nation has proved 
 efficient. Those are all matters that hjj-ve to be taken into considera- 
 tion. 
 
 My purpose in putting this chart before you is simply to give you 
 the benefit, if it is of any use to you, of a method that I have been 
 forced to devise to concentrate the picture you have to look at. Unless 
 you can concentrate this picture and get down to something that you 
 can put onto a piece of paper and figure with, even after we get all 
 through we will be more or less shooting in the dark as to the result 
 we are going to accomplish, because if you are going to build a bridge 
 over a chasm, the first thing to to do is to find the width of the chasm; 
 and I have never yet met the man who to-day really does know the 
 width of the chasm we have to bridge. The more I have looked at the 
 chasm and the more I have tried to measure it up the more convinced 
 I have become that the advocates of subsidy legislation who have been 
 appearing in Washington for the last few years have needlessly dis- 
 turbed themselves about the desirability of making the case appear as 
 bad for the United States as they could. 
 
 I think the tendency has been to go a little too far in that way. 
 I think it behooves us all to be just as hopeful and cheerful about 
 the condition of the United States as we can be, because the thing 1 
 fear most is that a true picture of the status of the United States 
 to-day with reference to all the other maritime nations that have such 
 a large start on us, not only in natural advantages but in artificial 
 advantages, will be too discouraging. 
 
 COST OF CONSTRUCTION. 
 
 Now, take the first column, to illustrate a little further what I mean. 
 Take Great Britain. It is comparatively easy to fill out Great Britain's 
 column. Nobody will question that if the perfect figure is 25, oppo- 
 site "Cost of construction" you will have to fill in for Great Britain 
 26. Great Britain's ability in ship construction has never yet been 
 seriously assailed. 
 
 In cost of operation Great Britain is not near the perfect figure. 
 Strangely enough, there are several nations that are more efficient 
 than Great Britain in cheapness of cost of operation, Norway preemi- 
 nently so, Germany somewhat so, and, in fact, nearly all the other 
 
10 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 nations surpass Great Britain in efficiency as regards cheapness of cost 
 of operation. I should say offhand— you gentlemen will form your 
 own conclusions— that 18 or perhaps 15 would be as high as we should 
 rank Great Britain in cost of operation. 
 
 Representative Minor. Fifteen ? 
 
 Mr. Clyde. Fifteen, I should say. It all depends upon how you 
 measure up the others. But for the purpose of illustrating my point, 
 say 15. 
 
 COST OF MAINTENANCE. 
 
 Now we come to cost of maintenance. I have put maintenance in a 
 separate class for the reason that a good many nations have not been 
 builders of ships in time past. Shipbuilding has not been an impor- 
 tant industry with them. Take Norway until recently and Germany 
 for a time: they went and bought ships where they could, buy them 
 cheapest and brought them home and put their cheap crews on them. 
 Norway was induced to do that because she had a superabundant 
 population, naturally seafarers. They had great difficulty in living 
 at home, and they were willing to go to sea and could afford to go to 
 sea for less money than any other men in the world. They naturally 
 took to the sea and very successfully. Norway did not care very much 
 about shipbuilding. She had not the capital; she had not the mate- 
 rial; she had not much of anything except sailors. 
 
 Norway went to England and bought cheap, discarded tramps, and 
 brought them to Norway and put cheap Norwegian crews on them, 
 and went back to England, and has been very successful in taking 
 away a large part of the cheaper class of England's foreign trade. 
 The maintenance of those ships was quite different in Norway from 
 what it was in England; and although it is not absolutely essential 
 that ships should be overhauled and maintained in the ports where 
 they are owned, as a matter of fact they are. What is the reason for 
 that? I am very largely interested in dry docks and repair shops 
 here, and I have some hesitation in stating the reason which is gener- 
 ally given. The reason generally given is that unless the owner him- 
 self can see the work done he is robbed to such an extent that it does 
 not make any difference what the cost of the work is; he does not get 
 a fair deal. As a matter of fact, he usually prefers to have his ships 
 overhauled where he lives, even though it may be found that the work 
 done costs him more money. 
 
 Therefore it is necessary to consider cost of maintenance separately 
 from cost of construction and cost of oj)eration. Besides, it is a large 
 item. Take our own case. On a ship in our line, which we value on 
 our books at $450,000, we charge off annually $12,500 for extraordi- 
 nary repairs and the annual overhaul. That is quite aside from what 
 we term the voyage repairs, which are done in the twenty-four or 
 forty-eight hours while the vessel is tied up at the dock— cleaning 
 boilers, etc. Taking one year with another, and taking a vessel which 
 we value on our books at |450,000, it costs us from $12,000 to $15,000 
 annually for extraordinary repairs and overhauling, which again is 
 quite distinct from depreciation. 
 
 Now, in cost of maintenance, Great Britain is 26 again, because she 
 maintains her vessels at home. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 11 
 
 COST OF CAPITAL. 
 
 Cost of capital is 25 for Great Britain. There is no country in the 
 world where you can borrow money to build or operate ships more 
 cheaply than you can in Great Britain. The people are used to the 
 business. They are accustomed to the security, and plenty of money 
 is available. So you see as to Great Britain the total natural efficiency 
 figured in that way would be 90. 
 
 THE FIGURES FOR GERMANY. 
 
 When you come to Germany, the cost of construction is so largely 
 affected to-day by artificial aids that I do not myself know where Ger- 
 many would rank under natural conditions, but I assume that under natu- 
 ral conditions Germany would not be scored above 20 for construction. 
 
 In cost of operation Germany is pretty good. She is not perfect, 
 but I should say the figure was 22. 
 
 Representative McDekmott. You placed Great Britain under natu- 
 ral conditions'^ < 
 
 Mr. Clyde. Yes, sir. 
 
 Representative McDermott. Why do you not place German j^ under 
 natural conditions? 
 
 Mr. Clyde. I do, sir. 
 
 Representative McDermott. Then why should the percentage be 
 different in either case? 
 
 Mr. Clyde. Because it costs moi-e to build ships in Germany under 
 natural conditions than it does to build them in Great Britain. 
 
 Representative McDermott. Then why can not the people of Ger- 
 many remove that difference by buying in Great Britain? 
 
 Mr. Clyde. They did for many years until the German Emperor 
 found that he was going to be dependent on England for the carriage 
 of his commerce and for the defense of his coasts, and he declined to 
 permit them to do so further, and offered subsidies. 
 
 Representative McDermott. Then the difference is a self-inflicted 
 one? 
 
 Mr. Clyde. Yes; but the difference in cost to the Germans is made 
 good by the Government. 
 
 Representative McDermott. There is no reason why Germany can 
 not buy ships from Great Britain? 
 
 Mr. Clyde. None whatever; and the English would be only too 
 delighted to build them for her, and to an extent they do build some 
 still. 
 
 Representative McDermott. That is true entirely through your 
 schedule 
 
 Mr. Clyde. Yes, sir. 
 
 Representative McDermott. That unless there is a self-inflicted dif- 
 ference in the cost of construction, all are on an equality with Great 
 Britain? 
 
 Mr. Clyde. I do not quite follow that proposition. 
 
 Representative McDermott. Let me restate it. 
 
 As to each one of the nations you have mentioned in your first 
 schedule, with respect to cost of construction, unless there is a self- 
 inflicted difference, all are on an equality with Great Britain? 
 
12 HEARINGS BEFOEB THE MERCHANT MABINE COMMISSION. 
 
 Mr. Clyde. They do not get the ships. <. n •(. • 
 
 Representative McDermott. They can get them from Crreat iiritam. 
 Mr. Clyde. Oh, yes; they van go and buy them in the cheapest 
 
 market. . .-^.j. 
 
 Representative MoDeemott. If there is a difference m that tactor, 
 
 it is a self-inflicted one ? 
 
 Mr. Clyde. Quite right. -j. j. 
 
 Representative MoDeemott. 1 am not talking about the merits of 
 the proposition. 
 
 Mr. Clyde. The British market is not closed to anybody. Any- 
 body can go there and buy ships just as cheaply as Englishmen can. 
 
 Representative MoDeemott. That applies to each nation? 
 
 Mr. Clyde. You are quite right. They can all buy practically as 
 cheaply in the British markets as Englishmen can, and for many years 
 many of them did pursue that policy. 
 
 The Chairman. And by so doing close their own shipyards 'I 
 
 Mr. Clyde. They had no shipyards, and it was in order that they 
 might have shipj'ards that they adopted the policy they did adopt. 
 
 The Chairman. If they had shipyards, it would close them ? 
 
 Mr. Clyde. At once. 
 
 Representative MoDeemott. You say it would close the shipyards 
 of other nations? 
 
 Mr. Clyde. It would do so. 
 
 Representative McDeemott. As we do not purchase in Great Britain, 
 that has not been a factor in closing the shipyards in this country? 
 
 Mr. Clyde. No, sir. 
 
 Germanj' is more efficient in cost of maintenance than she is in build- 
 ing, just as we are. It is verj' much easier to organize a good repair 
 shop than it is a shipbuilding plant. 1 should say it is 22 again in cost 
 of maintenance. 
 
 As to cost of capital I am not really familiar with the banking affairs 
 of Qermany, but I do not assume that there is much difference between 
 the cost of capital in Germany and in Great Britain. I should say 25. 
 
 I do not want to take up all of the time which you gentlemen can 
 afford to give me in trying to fill out this chart which, after I got it filled 
 out, would show only my personal views. As I said before, I simply 
 put it before you in the hope that it may be helpful and suggestive. 
 It has, however, enabled me to express more briefly than I could in 
 anj'^ other way the chief difficulty we have to contend with in finding 
 a solution of the American merchant-marine problem. 
 
 Senator Martin. I suggest that it would be desirable if Mr. Clyde 
 would, at his leisure, give us his own estimate, by filling out the differ- 
 ent columns for each country, and furnish it to the committee. 
 
 Mr. Clyde. I will be very glad to do so, Senator, although you will 
 understand that I do not profess to be competent to do it. However, 
 I have my ideas. 
 
 Senator Martin. 1 understand that nobody is competent to do it 
 with mathematical accuracy, but as you have suggested this line of 
 consideration I should like to have your figures. 
 
 Mr. Clyde. I shall be glad to give you the impressions I have 
 derived trom what I have heard and what I have read about it but I 
 beg that you will not take it as anything in the world except 'a sug- 
 gestion, because one of the main things that I look for this Commission 
 to accomplish is to give to the citizens of this country such a chart as 
 this, filled out in such a waj^ that they will believe it Is true. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 13 
 
 They will not believe in a chart which a shipbuilder or a shipowner 
 gives them, because they know we are prejudiced. Of course we are 
 prejudiced; we can not help it. But if this Commission, in examining 
 me and others whom you will meet as you go about the country, will 
 keep some such chart as this before you and fill in the blanks as you 
 can, wherever you get information, you will eventually, before you 
 get through, get something that will be vastly superior to anything 
 that I or any other individual could give you, and I believe it would 
 be accepted by the country as standard; and I believe that whatever 
 may be done in regard to the American merchant marine will start on 
 that basis, and we must have a basis to start on. 
 
 Senator Martin. I do not know that it is possible to consider the 
 problem satisfactorily on this basis, but certainly if we are to attempt 
 it we can not do it until the columns are filled up. 
 
 Mr. Clyde. I will do the best I can, and send the chart to the 
 Secretary. 
 
 Senator Martin. I realize that it is little more than a guess in most 
 instances, but still as you have suggested this as a basis for thought, 
 we can not think of it until we have the figures, and we should be glad 
 to have your figures; at least I would. 
 
 Mr. Clyde. 1 appreciate the compliment. 
 
 Representative McDermott. Where you give statistical informa- 
 tion, will you cite the sources of your authority ? In other cases we 
 will take it to be your best guess; 
 
 Mr. Clyde. All right, sir. 
 
 Representative McDermott. That is practically what it will be. 
 
 Mr. Clyde. I will do so. 
 
 (See letter and chart at the end of Mr. Clyde's oral statement.) 
 
 Mr. Clyde. Now, to get back to something that was suggested to 
 me by your last remark, Mr. McDermott, 1 wish to admit everything 
 in this case that is true, or for which there is a reasonable basis of 
 assumption. It does not matter to me a particle what the decision of 
 this Commission is as to the remedy. I feel satisfied that this matter 
 is going to be closed up one way or the other when this Commission 
 gets through. I want to see it closed up so that it will stay closed, and 
 therefore 1 think all of the gentlemen who appear before you ought 
 to start in determined to admit everything there is to be admitted, 
 and let the shipbuilding industry stand on its bottom, and let the ship- 
 owning industrjr stand on its bottom, and let the people who want mail 
 contracts stand on their bottoms. They are not necessarily associated 
 with each other. 
 
 MORE HERE THAN ABROAD. 
 
 I assume the facts that it costs materially more to build sliips suit- 
 able for foreign commerce in this country than abroad, and that after 
 they are built it costs materially more to operate them under the flag 
 of the United States than under foreign flags, and that these differ- 
 ences in cost are chiefly due to the higher wages paid to American 
 labor than to foreign labor will no longer be seriously questioned. 
 
 Let us, for the moment, consider more particularl3', however, the 
 difficulty we find in building ships for foreign markets regardless of 
 whether, when so built, they may be operated under the American 
 flag or under foreign flags. To the shipbuilder the question of the 
 flag the ship is to carry is one of, at most, sentimental importance. All 
 he really cares about is to be enabled to build and sell ships at a profit. 
 
14 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 It is not fair to say, as some professed and doubtless sincere friends 
 of American shipping have said, that Congress has neglected the 
 American shipbuikler and American shipowner. Congress has not 
 neglected them. The shipbuilders of this country have received more 
 aid, under our protective system, than perhaps any other manufac- 
 turers. The home market is set aside for them exclusivelj^ and no 
 foreign ships are permitted to be sold in it. Our builders of rails, 
 bridges, locomotives, and many other commodities are not so highly 
 protected, while, on the other hand, they have to pay practically the 
 same prices as the shipbuilder for labor and material, and yet they are 
 able, under our protective system, to produce in such volume and so 
 cheaply that they can afford to dispose of their surplus product abroad 
 in open competition with the rest of the world and make a satisfactory 
 average profit on their entire output. 
 
 Why, then, has the shipbuilder, who apparently enjoys even greater 
 advantages in the home market, so signally failed to sell even a small 
 part of his surplus abroad? Can it be that the shipbuilder is asking 
 for a larger profit than the manufacturer of rails, bridges, etc. ? 
 
 It would seem not, for with one notably unsuccessful exception the 
 shipyards of this country are still capitalized at about cost and owned 
 by their organizers. There has been no inflation, and yet, notwith- 
 standing this fact, the capital invested in shipbuilding has yielded a 
 smaller average return than that invested in almost any other pro- 
 tected industry, and to-day the greater part of the shipyards of this 
 country are in serious financial straits. 
 
 THE NEED OF STANDARDIZING. 
 
 It is not, therefore, unwillingness to work for a moderate profit 
 that has kept our shipbuilders from selling ships abroad. 
 
 In my opinion, the reason shipbuilding has- failed to profit by the 
 protection given it, as many of our other manufacturing industries 
 have, is that the latter have been able to standardize their products 
 and so effect economies which to the shipbuilder have so far been 
 impossible. 
 
 The products which our other manufacturers sell abroad are prac- 
 tically identical with those they sell at home. These products are 
 made by the same artisans and machinery and from the same material, 
 patterns, and molds, and in many cases can be sold from the same 
 catalogues. 
 
 It is unnecessary to dwell on the important bearing of these facts 
 upon the sale of surplus products of our factories and mills in foreign 
 markets. 
 
 In the shipbuilding industry the conditions are quite different. 
 
 Ihe type of ship required for foreign trade in general is so different 
 from the type required for our short-voyage, shoal-water, inland, and 
 coastwise trade .that it is only since our coastwise laws have been 
 extended to our island possessions that the home market has even to a 
 slight degree resembled the foreign market in its requirements 
 
 The result has been that instead of being able to sell abroad ships of 
 our own types, made by the same men and machinerv and from the 
 same material, patterns, and molds as our own ships,' we have had to 
 accept foreign designs and spasmodically try to adapt our facilities and 
 methods to their production. ^ lacuities and 
 
tlJlAJKlJNUb aJUaUKK TMH; M.J';ii(JUANT MARINE COMMISSION. 10 
 
 These are the reasons why our shipbuilders have failed to standardize 
 their product in this regard and so employ, their surplus productive 
 power in producing cheaply ships that could be sold outside the home 
 market. 
 
 Representative McDeemott. Your failure to standardize in your 
 shipbuilding, j'ou say, is one of the reasons why you can not produce 
 cheaply enough to sell abroad. Is it a fact then that' in shipbuilding 
 in this country, because of the failure of agreement among the owners 
 of shipyards, ships can not be produced cheaply enough to sell them 
 abroad at a profit? 
 
 Mr. Clyde. I said nothing about the failure of agreement. 
 
 Representative McDeemott. You standardize if you come to an 
 agreement. 
 
 Mr. Clyde. You can not standardize unless you have somebody to 
 buy standard articles. You can not manufacture an article and put it 
 away and leave it there. You must have a market for it. We have 
 no market at home for the kind of ships that the foreign markets 
 desire, consequently we do not build them. We have no way of 
 learning to build them. We have no way of teaching our men to 
 build them or of adapting our facilities tg building them cheaply. 
 
 Senator Lodge. I do not understand that standardizing has anything 
 to do with an agreement among the manufacturers. 
 
 Mr. Clyde. I never heard of it. 
 
 Senator Lodge. One firm can standardize? 
 
 Mr. Clyde. Certainly. In fact, that is the way it works. Firms 
 and shipyards all differ in regard to the efiiciency of their plants and 
 the cheapness with which they can turn out a standard article. It is 
 not an agreement at all. It is a question of opportunity to practice; 
 that is £dl. If a lawyer never got a case he would not become much 
 of a lawyer. The more cases he gets the better lawyer he becomes, 
 the more law he learns, and the better he can talk it. 
 
 Representative McDeemott. What you mean is that it costs more 
 to build a ship here than it does in foreign countries, and, therefore, 
 you can not get that market. 
 
 Mr. Clyde. We can not get that market. I am simply suggesting 
 how our manufacturers of steel rails and locomotives and hundreds of 
 other things, who at the beginning were confronted with the same 
 conditions, have overcome tkose conditions by standardization, and 
 they were only able to effect standardization because they could sell 
 in foreign markets the same thing that they manufactured in large 
 quantities for the home market right out of the same catalogue and 
 with the same salesmen. 
 
 standardizing means cheapness. 
 
 Senator Malloey. If this standardization were possible under con- 
 ditions as they may grow up in a few years, do you think it would 
 cause such a change in the price of our ship product that we could 
 compete with foreign nations ? In other words, would the standard- 
 ization do away with the fact that our vessels cost more to build here 
 than in foreign countries ? 
 
 Mr. Clyde. I have very great hope of it. Of course you will 
 appreciate at once that when you come to standardize an article, 
 where each individual type to be standardized costs from $200,000 to 
 
16 HBAEINGS BEFOEB THE MERCHANT MARINE COMMISSION. 
 
 12,000,000, it is a very different problem from «tf .tSSu^rr! 
 which per unit cost |10. And I do not expect tbat the sMpou 
 
 of the tlnited States, even if by some f tifif^^^^/^J^.^'j^^Ju^^^^ 
 chance to try to adapt their facilities and f^^^^^s and to educate their 
 men to the production of goods for the foreign markets w^^ d^^^^^ 
 the s-aD as ouicklv as our manufacturers of steel rails aia oi as our 
 r^LSrcturer of locomotives did it, because the units that you h^^^^^^ 
 to deal with are very much larger in the one case than in the other 
 and it will require more time. "But the same principle applies and 1 
 do not see any reason why in the end the same result should not follow. 
 
 Senator Lodge. As 1 understand your proposition, it is that stand- 
 ardization is a great element of economy. 
 
 Mr. Cltde. It is the fundamental element. 
 
 Senator Lodge. At all events, it is very important. 
 
 Mr. Cltde. Where wages are practically fixed it is fundamental. 
 
 Senator Lodge. And we have not been able to standardize in the 
 construction of vessels because the home market has required a vessel 
 which is not the standard of the foreign market? 
 
 Mr. Cltde. That is precisely it. 
 
 Senator Martin. Accepting that theory, I understand you can build 
 a battle ship of the American type for Russia as cheaply as the British 
 can, because that is standardized here in American yards i 
 
 Mr. Clyde. I am very glad you brought that out, because the busi- 
 ness which the United States Government has given the shipyards of 
 the United States has enabled them already to build and sell abroad a 
 few battle ships, and they could never have done that if they had not 
 been building a large numb(n- of practically the same type of battle 
 ships for theUnited States Government year after year. They learned 
 the trick. 
 
 Senator Martin. As a matter of fact, having learned it, are they 
 able to furnish those ships as cheaply as England can ? 
 
 Mr. Clyde. I would rather some shipbuilder would tell you about 
 that. My personal impression is that they have not come out as well 
 on the ships built for abroad, except where they got unusual prices, 
 as they have on the ships built for home use. I do not think that in 
 the battle ships which we have built for foreign nations we have been 
 subjected to as strict competition as we might have been subjected to. 
 
 Senator Martin. Still, if your theory is correct, we must be able 
 to compete with foreign makers in the building of our standard battle 
 ships. 
 
 Mr. Clyde. If we a,re not now we soon will be. W.e are undoubt- 
 edly getting there rapidly. 
 
 Representative Minor. Is it not a fact that with respect to the 
 sTmrily^Serthe^^T''^' "' *'^ '^^^^^* steamers ^the?e is a great 
 
 Mr. Clyde. Yes, sir. 
 
 sh£7Ind'fb''pv^do^rA'^''^' ^^"^ °"*^^ °^- *^^« "'■ th'-eo thousand ton 
 snips, and they do not differ very materiallv ? 
 
 Mr. Clyde. No, sir. 
 
 Representative Minor. Is it not a fact that they oan con^trnot almost 
 
 Mr. Cltde. Yes, sir. 
 
HEARINGS BEFORE THE MEBOHANT MARINE COMMISSION. 17 
 
 Kepresentative Minoe. Now, how many ships do jou know of in 
 this country which have been built on the same patterns ? 
 
 Mr. Clydk. I personally have known of but two of a type being 
 built at one time. The American market requires a much more highly 
 finished article. It is just like a gold repeater and a Waterbury 
 watch. We have to operate our ships in competition with our rail- 
 roads, and we have to carry passengers by water in competition with 
 Pullman cars, and hence we must have a type of ship for the home 
 market that the foreigner, for the ordinary freight business, could not 
 afford to look at or touch. We have no use for the ordinary cargo 
 type of ship. 
 
 Representative Minor. Is it not a fact that on the Clyde they build 
 ahead of immediate demands ? 
 
 Mr. Clyde. For speculation. 
 
 Representative Minor. For speculation ? 
 
 Mr. Clyde. Frequently. 
 
 Representative Minor. Prospective tonnage? 
 
 Mr. Clyde. Frequently. 
 
 Representative Minor. You could not do that in America. 
 
 Mr. Clyde. I think the shipyards are having a hard time to-day 
 with the ones for wjiich they have contracts. 
 
 Representative Minor. Is it not very expensive to build models, etc. ? 
 
 Mr. Clyde. It is a very large expense. Any shipbuilder will give 
 you a reduction if you will take three or four ships instead of one. 
 
 not enough ships to build. 
 
 Representative McDermott. Is the reason why you do not standard- 
 ize because all of your production in this country is not uniform, or is 
 it because all of your production in this country is not of sufficient 
 amount to create a standard? 
 
 Mr. Clyde. Oh, no. 
 
 Representative McDermott. Which is it? 
 
 Mr. Clyde. It is because all of our production in this country gives 
 no assistance whatever in the direction of standardizing a type of ship 
 which will sell in the foreign markets. We do not have any use for 
 such ships. 
 
 Representative McDermott. You can not sell in the foreign market ? 
 
 Mr. Clyde. Why not? 
 
 Representative McDermott. I do not know. If you can, why do 
 you not? 
 
 Mr. Clyde. Senator Martin called attention to the fact that we sold 
 some battle ships. 
 
 Representative McDermott. That is a peculiarly constructed ship. 
 You have an immediate demand for it, and you get it wherever you 
 can. 
 
 Mr. Clyde. These ships took two or three years to build. The 
 demand was not very immediate. 
 
 Representative McDermott. Then why do you not construct ships 
 and sell them? 
 
 Mr. Clyde. Because the Government has not given to shipyards 
 the assistance toward standardization of merchant ships that it has in 
 respect to battle ships. 
 
 3a— 04 2 
 
18 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Representative MoDeemott. Do you mean financial assistance? It 
 has not been a custom. , , , , ■, , 
 
 Mr. Clyde. It has not been a custom. If they are able to buiid 
 ships, that is all the shipbuilder wants. i,o-n» ar,ri ^ 
 
 Representative McDermott. With natural conditions here and on 
 the (5lyde as we find them to exist, the reason why you have not 
 standardized, as they have standardized there, is, you say, because 
 there has not been a market for your ships? 
 
 Mr. Clyde. That is right. „ „ . .u u- a • ^i.- 
 
 Representative McDermott. Now, if all of the shipyards in this 
 country built according to a common plan, and built such boats as are 
 referred to by Mr. Minor, would you then have a market? 
 
 Mr. Clyde. You would have a market at a loss, probably, to begin 
 with, of 25 to 30 per cent. 
 
 Representative McDermott. Does that apply to the entire ship- 
 building proposition in this country ? 
 
 Mr. Clyde. Yes, sir. 
 
 Representative McDermott. You have not a market because the 
 vessels can be built cheaper in England? 
 
 Mr. Clyde. Yes, sir. 
 
 Representative McDermott. That is the whole of it, is it not? 
 
 Mr. Clyde. Yes, sir. 
 
 Senator Mallory. Before you leave this subject, I should like to 
 inquire if the Clyde Steamship Company has any purely freight 
 vessels? 
 
 Mr. Clyde. One. 
 
 Senator Mallory. Where does it ply? 
 
 Mr. Clyde. Between Boston and CKarleston and Jacksonville. 
 
 WHY THE SHIPYARDS ARE IDLE. 
 
 Senator Mallory. All the rest are- 
 
 Mr. Clyde. All the rest are passenger and freight vessels combined. 
 
 The conditions 1 have stated constitute also some of the reasons why 
 our shipyards are financially embarrassed. They have been designed 
 on a scale to supply all the demands of the home market at its best, 
 and when bad times come and the home market becomes narrow and 
 uncertain, there is no profitable outlet for the productive power thus 
 left idle. 
 
 It is possible that the extension of our coastwise laws to the Philip- 
 pines and the use of American vessels to carry supplies for our Navy 
 and Army may so broaden our home market as to maintain the ship- 
 yards already m existence in fairly prosperous condition, but I see 
 no good reason to hope that even this increase in demand for ships of 
 a type suitable for foreign commerce will enable our shipbuilders to 
 so standardize their work as to sell ships in open competition abroad 
 without additional Government aid. 
 
 tn"^illI°rf'^;J*' ^^^y .^P.i'^ion tbat if the people of this country want 
 to develop the shipbuiiaing industry beyond what our home market 
 will sustain, Congress will, for a time at least, have to either Dav the 
 shipbuilder enough to enable him to sell at I'ess than cost or^else it 
 will have to pay shipowners enough to enable them to pay more than 
 they would have to pay abroad for a similar type of ship 
 _ ihis may be a blunt way of putting the case, but why dodge the 
 
HEARINGS BEfOEE THE MERCHANT MARINE COMMISSION. 19 
 A CONSTRTTCTION BOUNTY. 
 
 It is simply a question of whether the advantages to this country of 
 having a thriving, growing shipbuilding industry, capable of produc- 
 ing ships suitable for every trade, are worth a construction bounty in 
 some form — 1 do not say a direct bounty — equivalent to the difference 
 between the price at which our shipbuilders can now put ships of the 
 required types on the foreign market and the price at which they must 
 do so to effect sales. 
 
 How long this construction bounty would have to be continued no 
 man can say, but no contract feature would be required, and hence 
 Congress could stop or reduce it at any time. 
 
 Of course, the construction bounty should only be paid for ships 
 built for foreign trade, and such ships should never be permitted to 
 engage in coastwise trade, because that trade is already amply pro- 
 tected and needs no construction bounty. 
 
 Now, let us assume that Congress provides an adequate construction 
 bounty and that our shipbuilders are able to offer ships for use in for- 
 eign trade as* cheaply as any other shipbuilders — the Government, as 
 Mr. McDermott points out, making up the difference — will such ships 
 be used under the American flag? 
 
 AN OPERATING BOUNTY. 
 
 Undoubtedly they will not, so long as crews serving under the 
 American flag can get higher wages than crews serving under other 
 flags, unless Congress pays the operator of the ships the difference 
 in order to enable him to pay without loss to himself the higher wages 
 required by the American flag. 
 
 There is this difference, however, between the difficulty of building 
 ships for foreign trade in this country and the difficulty of operating 
 them in foreign trade when built: As regards the building, Congress 
 must make good the extra cost involved or nothing can be done. As 
 regards the operation of the ships, once they are built, however, if 
 Congress does not see fit to pay the difference in cost of operation 
 under the American flag, as compared with foreign flags, the owner 
 may transfer the ships to a foreign flag and operate them under such 
 flag and still retain the right at any time, if an inducement should be 
 offered, to put them back under the American flag. Our laws already 
 permit of this. 
 
 WAGES AND FLAGS, 
 
 One of the strangest and most interesting features of this side of 
 the question is that a very large part of the crew would probably be 
 the same men in both cases, the only difference being that when the 
 American flag was hoisted they would get a higher scale of wages and 
 when a foreign flag was hoisted they would get a lower scale of wages. 
 
 It has been demonstrated that if an American vessel and an English 
 vessel of precisely the same size and general character are put on the 
 same route side by side and the same work is required of the crews of 
 both vessels, it is possible to secure a competent crew for the English 
 vessel for much lower wages than are required to secure a competent 
 crew for the American vessel. 
 
20 HEAEINGS BEE'ORE THE MERCHANT MARINE COMMISSION. 
 
 Furthermore, it has been demonstrated that the same men will ship 
 now on the English vessel and again on the American vessel, Out mat 
 they will never accept from the American vessel as low a wage as tney 
 will accept without protest or question from the English vessel tor 
 doing precisely the same quantity and quality of work. 
 
 PREFEEENCE FOR FOREIGN SHIPS? 
 
 Representative MoDermott. Have you found the difference to go 
 a little further than that— that they prefer shipping on the Enghsh 
 ship, although receiving less wages than on American vessels for 
 foreign ports? 
 
 Mr. Clyde. On the contrary, I have always found that they pre- 
 ferred the American vessel every time they could get one. 
 
 Representative McDermott. The directly opposite statement has 
 been made before the Committee on Merchant Marine very often. It 
 has been said that in the case of two ships, each signing a crew in a 
 foreign port, the preference is given to the foreign ship — the ship of 
 another nation than that of the ship flying the American flag. That 
 has been said to be true in the port of New York. How have you 
 found it here? 
 
 Mr. Clyde. It is not true in the port of New York. 
 
 Representative MoDermott. The record will show that the state- 
 ment has been made to us in Washington. 
 
 Representative Grosvenor. You are quite right about that. In 
 this connection what do you say as to the conditions of employment — 
 maintenance, food, quarters, etc. ? 
 
 Mr. Clyde. I am coming to that, and if I do not cover it I wish 
 you would ask me again and I will try to. 
 
 This is the most interesting point about this whole question, and I 
 hope the Commission will not take what I say as the gospel, but will 
 think about it themselves. 
 
 Representative MoDermott. It is a very interesting complication, 
 and General Grosvenor's recollection of the testimony before the 
 Merchant Marine Committee is the same as mine. 
 
 Representative Grosvenor. It is, undoubtedly. 
 
 Representative McDermott. I cross-examined witnesses on that 
 subject. But that is not your experience ? 
 
 Mr. Clyde. No, sir; quite the contrary. 
 
 Representative McDermott. It seemed unnatural. 
 
 STILL FURTHER COMPLICATED. 
 
 Mr. Clyde. The difficulty of comprehending these undeniable 
 though extraordinary facts is increased when it is also shown, as it 
 can be, that the crews' quarters and food are better on the American 
 vessel than on the English vessel. 
 
 The problem is still further complicated when it is shown, as it can 
 be, that if a third vessel of the same size and general character but 
 under the Norwegian flag, is put on the same route side by side with 
 the American and English vessels already referred to, the Norweo-ian 
 vessel can get a competent crew for almost as much less than the Eng- 
 hsh vessel as the difference between the cost of a crew to the English 
 as compared with the American vessel. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 21 
 
 In other words, we have presented to us three different scales of 
 wages for the same work, depending solely, apparently, upon the flag- 
 under which the work is to be done. 
 
 There is no law, so far as I am aware, to compel the payment or 
 acceptance of these different scales of wages, which apparently must 
 be paid and are accepted under different flags. On the contrary, the 
 steadily maintained differences between such scales of wages seem to 
 utterly defy the great law of supply and demand. 
 
 In any important seaport the demand for crews for English vessels 
 far exceeds the demand for crews for American vessels, and yet English 
 vessels can get and do get the same men for less money than the Ameri- 
 can vessels. 
 
 DEFYING SUPPLY AND DEMAND. 
 
 Moreover, the relative demand for men for vessels of different 
 nationalities varies at almost every port, but the scales of wages at 
 which men will ship under different flags bear practically the same 
 relation to each other at all ports. Supply and demand, therefore, 
 appear to have no influence on .the scales of wages paid on vessels of 
 different nations with reference to each other. 
 
 In explanation of this strange condition, which is not peculiar to 
 any particular time or place, but seems to have been general through- 
 out the world wherever vessels of different nations meet, I offer the 
 following suggestions: 
 
 It has been pretty fully recognized in international law and other- 
 wise that a vessel, wherever she may be, is a part of the country to 
 which she belongs, and that the same customs should prevail on her as 
 prevail in the country to which she belongs. 
 
 Futhermore, in the earlier days of international commerce, vessels 
 were very closely identified with the localities where they were owned. 
 Often the entire crew would come from the immediate neighborhood 
 from which the vessel hailed, and the same crew would remain with 
 the vessel for long periods of time. Naturally, under such conditions, 
 crews were paid the rates of wages prevailing and considered just at 
 the places where the vessels were owned and from which they set out 
 on their often long and adventurous voyages. 
 
 These conditions, it will be seen, tended to very firmly establish a 
 different scale of wages for the vessels of each nation engaging in 
 international commerce. The American vessel paid a scale of wages 
 corresponding with other wages and conditions of life in America. 
 The English vessel paid a scale of wages corresponding with other 
 wages and conditions of life in England, and so with the vessels of 
 other nationalities. 
 
 So long as all the crews of American vessels were Americans and all 
 the. crews of English vessels were English, and so on through the list 
 of maritime nations, there was nothing strange about such an arrange- 
 ment; but graduallj^, and more particularly after the introduction of 
 steam navigation, there were apparently no longer enough men of 
 each nationality willing to go to sea to man all the vessels of their own 
 nation as required. Then grew up a sort of polyglot class of men of 
 no particular nationality, who drifted about the world filling, as 
 required, vacancies created in the crews of vessels of any and all 
 nationalities. The number of these polyglot sailors, firemen, etc. , has 
 steadily increased, and to-day when a shipmaster ships a crew at any 
 
'22 HEARINGS BEFORE THE MEECHANT MARINE COMMISSION. 
 
 port he pays no more attention to their nationality than he does to the 
 color of their eyes. . ,, ,.,, 
 
 Of course, a proportion of the crew of each vessel is generally stui 
 of the same nationality as the vessel, and this small proportion ot men 
 of the country to which the vessel belongs perhaps to some extent sets the 
 standard of wages paid on the vessel. This element in itselt would 
 not, however, be strong enough to set at defiance the laws ot supply 
 and demand. 
 
 A CASE IN POINT. 
 
 1 once had a Norwegian vessel under charter, running on the same 
 line with an American vessel. These two vessels sailed from the same 
 ports to the same ports and performed precisely the same service. I 
 ascertained that the crew of the Norwegian vessel was receiving only 
 about half the wages the crew of the American vessel was receiving, 
 and determined to try to ship a crew for the American vessel at the 
 Norwegian scale of wages, or at least to effect a compromise between 
 the two scales. The supply of men was apparently abundant and they 
 seemed anxious for work. As a rule; however, they positively and 
 unhesitatingly declined to ship on the American vessel for less than 
 the American scale of wages. 
 
 I reasoned with them and pointed to the superior accommodations 
 and food furnished on the American vessel, and one or two of the men 
 wavered and seemed inclined to compromise, but they were speedily 
 intimidated by the others who refused to yield, and about that stage 
 of the proceedings the influence of the labor unions began to show 
 itself and it was made clear to me as well as to the waverers that life 
 would be very unpleasant for those who persisted in breaking the 
 unwritten law that American vessels must pay a scale of wages in 
 keeping with the wages and conditions of life prevailing in America. 
 It was also made clear to me that public sympathy was with the men 
 on this point, and therein seems to lie the explanation of the situation. 
 
 Public opinion will apparently sustain the crews of ships in demand- 
 ing a scale of wages in keeping with the wages paid generally through- 
 out the country to which a ship belongs, but will not sustain them in 
 demanding more than this. 
 
 Therefore I do not see very much hope of reducing the difference in 
 the cost of operation that now exists between ships under the Ameri- 
 can flag and ships under foreign flags. I think that that is a condition 
 which will practically be continuous. It is possible that if we had a 
 lar^e merchant marine engaged in the foreign trade we could gradually 
 devise ways and means of doing with fewer men, paying those we use 
 higher wages. We would have to do that, and we might in that way 
 do something toward bridging the gap. But the difference in the cost 
 ot construction, I am very hopeful, may be bridged. As to the dif- 
 ference in the cost of operation I am decidedly skeptical. 
 
 The Chairman. Have you been able, in our coastwise trade' to 
 accomplish any economies in that direction ? 
 
 NOTHING BUT FERRYBOATS. 
 
 Mr. Clyde. No, sir; but as I indicated a while ago, that does not 
 turmsh any guide, because we have nothing in the world but ferrv 
 boats. We are in competition with railroads all the way, and we have 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 23 
 
 to give a class of service which is not required in transoceanic voy- 
 ages, except in the highest class of passenger ships. Yes; to this 
 extent I will recall that. I think the people who are towing barges 
 up and down the coast, and who have gone into that kind of transpor- 
 tation, have instituted economies, but the ships that I am familiar 
 with and am interested in have not. 
 
 Representative Minor. Do you not give the ships better dispatch 
 by reason of improved methods of loading and unloading? 
 
 Mr. Clyde. Yes, sir: we beat the English on that. 
 
 Representative Minor. A steamer never makes any money while 
 she is at the dock. It is only while she is underway. 
 
 Mr. Clyde. That is true. That is one reason why I said that if we 
 could once get on even terms with them we could do the business a 
 little better than they could. But I doubt if it would fully cover the 
 difference in the cost of operation. 
 
 There is another feature of the case which should not be overlooked. 
 In addition to the natural advantages which several foreign countries 
 possess over us in varying degrees in the matters of construction and 
 operation of ships, because of the lower scales of wages in force in 
 said countries, some of them also pay to the higher grades of their 
 ships liberal mail subsidies, under contracts which require the ships 
 to be operated on specified routes and under special conditions. 
 
 If, therefore, it is deemed wise to have similar mail lines under the 
 American flag, similar mail contracts must be made, in addition to the 
 payment of sufficient construction and operating bounties, to equalize 
 the natural advantages already referred to. 
 
 A SUMMING UP. 
 
 It follows, therefore, to state the case concisely, that — 
 
 First. If we desire to build ships for foreign trade we must have, 
 in some form, a construction bounty. 
 
 Second. If, when built, we desire to have them operated under the 
 American flag we must have, in some form, an operating bounty. 
 
 Third. If we also desire to compete with foreign subsidized mail 
 lines we must have, in addition to the two bounties already named, 
 mail contracts, or their equivalent. 
 
 Of course, two or all of the . bounties or subsidies mentioned may 
 be combined in one subsidy, but I think it will simplify the problem 
 always to bear in mind that it involves three separate and distinct 
 features as indicated, and that while probably not desirable it is possi- 
 ble to disregard any of these features and deal with one or two alone. 
 
 MAIL AND other SUBSIDIES. 
 
 Representative McDermott. Allow me at this point. There are 
 what are called mail subsidies given by other nations; that is, they 
 pay for carrying the mail. They call it a mail subsidy. Sometimes it 
 IS rightly so called; sometimes wrongly. 
 
 Mr. Clyde. That is what I allude to. 
 
 Representative McDermott. Do you know of any case where there 
 is a mail subsidy and also a subsidy for what may be called the mer- 
 chant marine? 
 
 Mr. Clyde. Great Britain divides up her aid under different heads. 
 
24 HEABING8 BEFORE THE MEBCHAKT MAEIJSTE COMMISSION. 
 
 She calls part of it mail subsidy and she calls part of it admiralty 
 bounty, or something to that effect. 
 
 Representative McDermott. The admiralty bounty of Great Britain 
 is given, 1 understand, to those ships which have a certain number of 
 students on board who are fitted for the admiralty service. They are 
 practically maintained at school. That is my understanding of it. 
 
 Mr. Clyde. That may be. 
 
 Representative McDekmott. Is there given by Great Britain any- 
 thing that may be called strictly a merchant-marine subsidy ? 
 
 Mr. Clyde. I would call the new Cunard contract eminently so. 
 
 Representative McDermott. That is a postal contract. 
 
 Mr. Clyde. True. 
 
 Senator Lodge. It is more than that. 
 
 Mr. Clyde. If you will give us the same kind of postal contract it 
 is all we want. 
 
 Senator Lodge. In that case Great Britain lends the Cunard com- 
 pany the money to build the ships 
 
 Mr. Clyde. It practically builds the ships for them. 
 
 Senator Lodge. And it gives them a subsidy which enables them to 
 pay the interest on the money borrowed. 
 
 Representative McDermott. Do you recall what the commission in 
 Great Britain reported ? 
 
 Mr. Clyde. My recollection is they reported unfavorably to that 
 proposition. 
 
 Representative McDermott. They reported very strongly against 
 the word "subsidy." 
 
 Mr. Clyde. I did not follow it very Closely. Great Britain's posi- 
 tion is very different from ours. 
 
 Representative McDermott. Do you know of any other nation that 
 does it? 
 
 Mr. Clyde. That gives subsidies ? 
 
 Representative McDermott. Yes. What you would call a merchant- 
 marine subsidy. 
 
 TRENCH AND GERMAN EXAMPLES. 
 
 Mr. Clyde. France gives both construction bounties and subsidies 
 based on miles covered. 
 
 Representative McDermott. France -does? 
 
 Mr. Clyde. Yes. 
 
 Representative McDermott. How about Germany ? 
 
 Mr. Clyde. Germany has a secret agreement, I believe, with the 
 North German Lloyd company, the terms of which I hope this Com- 
 mission will be able to get. I myself have never been able to get 
 them. 
 
 Senator Lodge. One form of German aid is to make a large reduc- 
 tion, about 33 per cent, in freight over Government roads. 
 
 Mr. Clyde. Yes, sir; the Government railroads in Germany, I 
 understand, are made to serve the shipyards at a very much lower 
 cost than they serve anybody else. 
 
 Representative McDermott. That is carried further than Germany. 
 It is illustrated in South Africa. As I understand it, there the Germans 
 carry freight and passengers at a rate with which the English can 
 not compete. 
 
 Mr. Clyde. Yes, sir. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 25 
 
 Representative McDermott. There being a reduction of sometiiing 
 like 40 per cent on freight. 
 
 Mr. Clyde. Yes, sir. 
 
 Representative McDermott. Have you made an examination of 
 that question ? 
 
 Mr. Clyde. No, sir; none at all. 
 
 Of course, two or all of the bounties or subsidies mentioned may be 
 combined in one subsidy, but I think it will simplify the problem 
 always to bear in mind that it involves three separate and distinct fea- 
 tures as indicated; that while probably not desirable, it is possible to 
 disregard any of these features and deal with one or two alone. 
 
 For example, if shipbuilding alone is considered, we can build ships 
 for foreign trade if an adequate construction bounty is paid. 
 
 Or, if operating alone is considered and we are permitted to buy 
 ships abroad exclusively for foreign trade, we can afford to do so and 
 operate them under the American flag if we are given an adequate 
 operating bounty, but not otherwise. 
 
 Representative McDermott. What is the objection to that procedure ? 
 
 Mr. Clyde. Only that you would not increase the shipbuilding 
 capacity of this country a particle beyond what the home market wiH 
 sustain. It would remain right there. 
 
 Representative McDermott. The repairing of the ships would 
 increase it to some extent ? 
 
 Mr. Clyde. Repairs do not cut much figure in shipbuilding. 
 
 Representative McDermott. Your proposition resolves itself into 
 this, that because American capital can not build a ship in competition 
 with English capital there shall be paid from the Treasury of the 
 United States, directly or indirectly, a sufficient sum to the American 
 owners to make up the diflference -between the cost of a ship abroad 
 and the cost of a ship here. There is not any qualification of that 
 proposition, is there? 
 
 Senator Martest. If a ship with an American register could be 
 operated profitably, do you think the difference in the original cost of 
 the ship at the English yard and at the American yard would be a 
 material factor? 
 
 Mr. Clyde. Yes, sir. 
 
 Senator Martin. You think it would be? 
 
 Mr. Clyde. To start with, it certainly would be. 
 
 Senator Martin. I know it would be to some extent, but I mean in 
 practical results. During the life time of the ship the cost would be 
 distributed, and it has occurred to me that if you could operate the 
 ship profitably after it was acquired, the difference in original cost 
 would not be a material factor in determining the business. 
 
 A 25 PER cent handicap. 
 
 Mr. Clyde. I think most of the information which you will find on 
 record on this subject will lead you to believe that the original cost 
 to-day would not be less than 25 per cent more in this country, and I 
 think I am stating it very conservatively. Most people would ^y 
 more, but I hope they are wrong. Assume that it is 25 per cent. On 
 
26 HEAKINQS BEFOEE THE MERCHANT MARINE COMMISSION. 
 
 a $400,000 ship, at the first jump, you are handicapped to the extent 
 of $100,000 in cash capital invested. There is $15,000 a year to be 
 paid for interest, insurance, and deterioration, at 5 per cent per annum 
 each, and we start in against a man who has the business. What chance 
 have we got? What chance would you have? Pardon me,_ 1 will not 
 be personal. What chance would any man have of tackling me on 
 the coast to-day if he started in against me, ship for ship, with a disad- 
 vantage of $15,000 a year? I think it would be fatal. I do not think 
 he would get anybody to loan him any money to build the ship. 
 
 AEE BOtTNTIES CONSTITUTIONAL? 
 
 Representative Spight. Where do you think Congress gets the 
 power to provide a bonus for the construction of ships? 
 
 Mr. Clyde. You have me. I never thought of that. I thought the 
 Congress could do pretty much as it pleased. 
 
 Representative Spight. Congress can do such things as the Consti- 
 tution authorizes it to do. 
 
 Mr. Clyde. I must beg to be excused on that subject. I really do 
 not know. 
 
 Representative Spight. You have not studied that feature of it? 
 
 Mr. Clyde. No, sir; I never thought of it before. 
 
 Representative Spight. There must be some authority conferred by 
 the Constitution before Congress can act. 
 
 Mr. Clyde. I realize that, now that you speak of it. Perhaps the 
 President might help us out. 
 
 Representative Spight. As he has done in some other cases. 
 
 Mr. Clyde. Or if mail routes alone are considered we can cover 
 them with specially built American ships if adequate mail contracts are 
 offered. As to the rates necessary for, and the best form of the boun- 
 ties or mail contracts, they should be determined by the Merchant 
 Marine Commission after examining all the evidence available. 
 
 HAVE ASKED TOO MUCH. 
 
 One of the great difficulties that this class of legislation has had to 
 contend with heretofore has been that the shipowners and the ship- 
 builders have asked more than they required or expected to get, and 
 the first thing to do was to cut off a slice from what they asked. 1 
 am in hopes that if this Commission presents a measure, that measure, 
 so far as the schedule of rates is concerned, will be acted on as pre- 
 sented, and that we will avoid the great difficulty we have had to con- 
 tend with heretofore — that there was always a change in rates. 
 
 I think in this way a much fairer result will be reached than by 
 having the interested parties independently prepare schedules of rates 
 and then have Congress arbitrarily cut them down without any real 
 knowledge or study of the facts, but simply on the principle that men 
 generally ask more than they require or really expect to get. 
 
 the vital questions. 
 
 If the Merchant Marine Commission shall determine and publish — 
 First. What is the difference in cost, per gross ton, of building an 
 ordinary cargo ship suitable for foreign trade in this country as com- 
 pared with Great Britain. 
 
HEARINGS BEKOKE THE MERCHANT MARINE COMMISSION. 27 
 
 Second. What is the difference in the cost of operating such a ship on 
 a voyage of a hundred miles, or any other unit of distance, in foreign 
 trade under the American as compared with the English, German, and 
 Norwegian flags, respectively. (I do not think we need consider the 
 others at present.) 
 
 Third. What subsidies are paid by foreign governments for mail 
 service, and what are the respective obligations imposed upon the 
 receivers of such subsidies ? 
 
 Much of the doubt and uncertainty which now exists regarding this 
 subject will be removed from the public mind; and there will be little 
 difficulty in preparing a shipping bill which will be safe from attack 
 on the ground that it is inspired by or unduly favorable to any par- 
 ticular interest. 
 
 I have taken a great deal of time. Shall I go on ? 
 
 The Chairman. How much more time will you require? 
 
 Mr. Clyde. There are just one or two things to which I should like 
 to call attention. 
 
 The Chairman. I think you would better make it as brief as you 
 consistently can. 
 
 Mr. Clyde. I will make it very brief. 
 
 THE drain or GOLD. 
 
 Kepresentative MoDermott. I do not want to interrupt you unduly, 
 but in shortening your remarks perhaps you may not refer to this 
 point: Have you considered at all the question of the relation of for- 
 eign commerce, as it now exists as respects this country, to the expor- 
 tation of gold ? We pay in gold for all the goods carried between this 
 country and every other country to-day. We are constantly export- 
 ing gold, more or less affecting fiscal conditions in this country tem- 
 porarily — sympathetically, perhaps, to some extent; actually to a very 
 considerable extent. 
 
 Now, have you considered at all the question as to how far that 
 exportation of gold is affected by the fact that we pay the ocean rates 
 each way on our imports and exports in gold? 
 
 Mr. Clyde. I did not know it was paid in gold. 
 
 Representative McDermott. It must be gold. 
 
 Mr. Clyde. I had an impression that we were sending upward of 
 1100,000,000 a year out of the country to pay for the carriage of our 
 goods upon the ocean. 
 
 Representative McDermott. It is more than double that amount. 
 
 Mr. Clyde. Is it indeed, sir? I had felt that you gentlemen must 
 be governed very largely by that consideration in consenting for a 
 moment, if you do consent, to recommend that Congress tax the peo- 
 ple of the United States to make up the difference in the cost of trans- 
 porting those goods in American vessels, in order that the money 
 may be kept here. 
 
 Representative McDermott. That is not the point. 
 
 Mr. Clyde. That is the only viewpoint from which I have ever con- 
 sidered it. It is a little out of my line. 
 
 ship cost in many lands. 
 
 I have been in hopes that this Commission would find it practicable 
 to have prepared in a secret and confidential manner plans and specifi- 
 cations for a standard type of cargo steamship, and in the same secret 
 
28 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 and confidential manner to obtain tenders, without those who tendei'ed 
 linowing the purpose for which their figures were to be used, from all 
 the most prominent builders of the various countries who build ships 
 for the foreign trade. That may seem rather a difficult thing to do, 
 but as the success of it will depend upon its being confidential, 1 will 
 suggest to the chairman afterwards a way in which I think it could be 
 done at very slight expense. It would furnish a check, at least, on the 
 figures that are brought here by interested parties, and, as 1 said before, 
 that has been one of the stumbling blocks ever since we started — 
 whether our facts were true, or whether they were fiction. 
 
 I wish the same thing could be done as regards wages. It is an 
 extremely difiicult thing for an American shipowner to secure the pay 
 rolls of foreign ships. Naturally the pay rolls are part of the ofiicial 
 documents of the vessels, and they are not available, and even to get 
 copies of them is very difiicult. 
 
 Senator. Maetin. As I understand, you think that the British ship- 
 yards can build for 75 per cent of what the American shipyards can 
 build for? 
 
 Mr. Clyde. It is the difl^erence between 75 per cent and 100 per 
 cent — 25 per ceni more in this country. 
 
 Senator Maetin. Say the British can build for 25 per cent less. 
 
 Mr. Clyde. That is about my idea. 
 
 Senator Maetin. Your idea is that in the cost of operation the 
 discrepancy is still greater. 
 
 Mr. Clyde. My impression has been that with reference to Great 
 Britain, Germany, Norway — Norway being the most difiicult one in 
 some respects to compete with, although it does not touch us at so 
 many points — the average would be about 30 per cent. I have been 
 afraid so. I suppose if any way could be devised to get the boarding- 
 house keepers and shipmasters to tell what they know, they could tell 
 absolutely at all the principal points what men were shipping for on 
 vessels of the different nationalities. 
 
 THE BANKEE's standpoint. 
 
 There is just one other point to which I wish to call attention, and 
 then I believe I shall be through. No scheme for the equalization of 
 the differences in cost of ocean carriage as between American and 
 foreign ships will be successful, however it may look on paper, unless 
 it commends itself to the bankers of the country. I would, therefore, 
 suggest that after the ideas of the Commission have crystallized to an 
 extent where they are in partial or substantial agreement, some bank- 
 ers be given an opportunity to express their views with respect to how 
 they would regard the security offered by the kind of legislation that 
 the Commission have in their mind. To me that is one of the chief 
 objections to the differential-duties scheme; and I do not distinguish 
 between charging the foreigner 10 or 15 per. cent more than the exist- 
 ing tariff or charging on our own ships 10 or 15 per cent less. 
 
 diffeeential duties oe subsidies? 
 
 Representative McDeemott. On that point, as you have considered 
 the banker's standpoint, is there any difference between a differential 
 duty, so far as the Government is concerned, and a direct subsidy? 
 
HEARINGS BEFOKE THE MERCHANT MARINE COMMISSION. 29 
 
 Mr. Clyde. I have always feared that the Treasury — perhaps not 
 the Treasury, but the people of the country — would have to pay a 
 great deal more for the same return under a differential-duty plan than 
 they would under a direct subsidy, because I have never been 
 
 Representative McDeemott. That would be because one would be 
 a known quantity and the other an unknown quantity ? 
 
 Mr. Clyde. Precisely. 
 
 Representative McDeemott. But as to the relation of any dollar 
 paid out, is there any difference that you know of between a differen- 
 tial duty and a direct subsidy ? 
 
 Mr. Clyde. I fear that many dollars would be paid out under a dif- 
 ferential-duty plan which would practically be wasted. 
 
 Representative McDeemott. But as to any single dollar, is there 
 any difference? In the one case you would collect the dollar under 
 your tariff duty and put it in the Treasury and then pay it to the ship- 
 owner. In the other case you would remit it; you would fail to collect 
 it. Theoretically it would go to the shipowner. 
 
 Mr. Clyde. The way in which I would expect to get the dollar 
 would be by charging a higher rate of freight than the foreign com- 
 petitor charged, because the goods brought on my ship would be 
 admitted into this country on a more favorable basis than goods brought 
 on his ship. Theoretically that ought to answer my purpose. It ought 
 to suit me all right. 
 
 Representative McDeemott. Allowing that they both bring in their 
 goods at the same customs duties — all goods arriving paying a certain 
 rate — the money would go into the Treasury. If you remit a portion 
 of the duty on goods imported in American ships, the money would 
 not go into the Treasury. What is the difference between keeping 
 your tariff unaltered and paying the money out of the Treasury after 
 it gets in, and in the other case failing to collect it? 
 
 Mr. Clyde. I do not know that I fully understand you; but if I do, 
 the only difference is this, that in one case you would pay for a specific 
 service which you could see and measure, and you would know you 
 did not pay until the service was rendered. In the other case, you 
 might be collecting additional and unnecessary duties on a great deal 
 of cargo that the American ship could not carry anyway. 
 
 Representative McDeemott. That would be a matter of inspection. 
 Allow that all of those factors of dishonesty are removed. 
 
 Mr. Clyde. It is not dishonesty. 
 
 Representative McDeemott. Admit that they are removed. The 
 ship the Government wants to aid brings in goods without the imposi- 
 tion of the duty. What is the difference to the American people 
 whether you land goods without duty or whether the Government 
 charges the duty and hands it back? 
 
 Mr. Clyde. If the same amount is paid to the shipowner in both 
 cases there is no difference. 
 
 Representative McDeemott. And if the bookkeeping of the system 
 is correct, there can not be any difference ? 
 
 Mr. Clyde. There ought not to be, theoretically. 
 
 Representative McDeemott. There would be an uncertainty as 
 between the one and the other? 
 
 Mr. Clyde. Yes, sir. 
 
30 HBAEING8 BEFORE THE MERCHANT MARINE COMMISSION. 
 HOW ABOUT FREE GOODS? 
 
 Representative Minor. One of the great hopes of the American 
 people is that by aiding the American merchant marine we can build 
 up foreign markets for our wares. We want to reach into countries 
 where we have never reached to any considerable extent thus far. If 
 the products of South America and Africa and Australia were like 
 those of England, France, and Germany, there would be something in 
 this differential-duty proposition, but what we want is to build up new 
 lines. Under this plan, each ship is entitled to a differential on what 
 it carries. If the goods coming from those countries in which we desire 
 to build up a market for American products bear no duty here, how 
 are the vessels going to get the compensation? 
 
 Mr. Clyde. 1 do not know. I do not believe there is a man alive 
 to-day who is competent to adjust differential duties to our tariff so as 
 to avoid disturbing and upsetting commercial conditions. There may 
 be, and if there is, and it can be done, it is immaterial to the ship- 
 owner. 
 
 THE BANKER WILL LISTEN. 
 
 What I meant as to the banker is this: No individual nowadays can 
 furnish the money to build enough ships to make much impression as 
 regards the foreign trade. He has to go to the banker and he has to 
 borrow large sums of money. If I can go the banker and say, "The 
 American Merchant Marine Commission has reported that the differ- 
 ence in cost of ocean carriage under the American flag and in Ameri- 
 can ships as compared with Great Britain (the competitor I have in 
 m'ind) is so much per ton or per hundred miles sailed, or whatever it 
 may be; that is the handicap under which I start; and Congress has by 
 legislation agreed to make that good to me; I will get the money every 
 time I complete my voyage; and therefore all you have to consider is 
 whether as a steamship man I am the equal of my British competitor," 
 I think the banker will listen to us and he will give us the money, not 
 perhaps on as reasonable terms right away as the English banker gives 
 it to the Englishman, but on fairly reasonable terms. 
 
 MORE DIEPICULT. 
 
 But if, on the other hand, 1 have to go to him and say, "These are 
 the differences in the cost of ocean carriage, and that is my handicap, 
 and now theoretically this legislation which Congress has passed is 
 going to permit me to charge sufficiently higher rates of freight by 
 my ship to . compensate for the difference in the cost of construction 
 and operation — will you lend me the money to try it?" I think the 
 banker will say, "Wait, and just let some other fellow try it, and see 
 how it works;" and there will be very little progress made at the 
 start. There may be some adventurous people who will find the 
 money themselves and will go on and see how it works. 
 
 I see much less difficulty with regard to its working as to South 
 America and countries from which we bring in large volumes of bulky 
 cargo than I do in regard to its working in the trans-Atlantic trade. 
 I do not think a differential would be of very much assistance in the 
 trans-Atlantic trade. It is a very different question from what it was 
 a hundred years ago, when the shipowner was a merchant, and when 
 
HEARINGS BEFOEE THE MERCHANT MARINE COMMISSION. 31 
 
 he sent his captain out with a chest of money and he bought a whole 
 cargo for his own account, very often of one commodity, and brought 
 it here and put it in a store and parceled it out as required. Under 
 those conditions differential duties were effective, because a man fig- 
 ured out on a piece of paper just where he would land. But to-day 
 with the cable and the telegraph and the wireless telegraph wherever 
 a steamship is going in the world and an express service across the 
 ocean, where one little ship will go out with 1,500 bills of lading for a 
 cargo and every little retail dealer on Broadway buying his goods in 
 Paris and having them shipped direct to him, I confess I do not know 
 where differential duties would land us. That seems to me to be the 
 chief objection to the system. I do not see any other 
 
 Representative Spight. Would not the lower rate of duty on for- 
 eign goods shipped in American ships induce foreigners to ship more 
 largely in American bottoms? 
 
 Mr. Clyde. Undoubtedly they would ship all they could in Ameri- 
 can bottoms. 
 
 Representative Spight. Would not the American ship get a very 
 decided benefit in that way ? 
 
 Mr. Clyde. There is not any question of that. Theoretically it is 
 perfect. I leave to the Commission the very broad question as to 
 what is going to happen to us when the treaties are abrogated. Theo- 
 retically it ought to work, and I do not know but that it will, but 
 when I sit down and try to figure out a proposition to lay before a 
 banker on that basis, 1 can not do it. 
 
 1 thank you, gentlemen, for your courtesy. 
 
 The Chairman. I wish to ask you two or three questions before you 
 sit down. In the matter of construction you put Great Britain at 25 
 and Germany at 20. Mr. McDermott very pointedly asked you the 
 question whether that is not a self-inflicted injury that comes to Ger- 
 many — whether she can not go into Great Britain and buy her ships 
 in the open market. I desire to ask you as a practical American ship- 
 owner whether, if you could buy foreign ships and put them under 
 the American flag for foreign commerce, employing Americans at 
 American wages, and housing and feeding them as American ship- 
 owners do, you would avail yourself of the free-ship privilege ? 
 
 Mr. Clyde. No, sir; because the additional cost of operation would 
 shut me out. 
 
 The Chairman. So, unless we change our laws or unless we could 
 get officers and crews on our American ships at the same rate of wage 
 at which foreign vessels get their officers and crews, the free-ship 
 privilege would not amount to much to the United States. 
 
 Mr. Clyde. It would not amount to anything at all, because there 
 would be no inducement in the main to change the flag, and 1 would 
 run her under the English flag imless j'ou enabled me to pay the differ- 
 erence without loss to myself. 
 
 MUST BE AMERICAN OFETCERS. 
 
 The CBLiiRMAN. Would you, as a patriotic American shipowner, 
 favor relaxing the laws so as to permit the employment of aliens as 
 masters and officers on American ships? 
 
32 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Mr. Clyde. No, sir. 
 
 The Chairman. If not, why not? 
 
 Mr. Clyde. Because I feel that national defense and the fact that 
 we want these ships as auxiliaries to our Navy and military forces are 
 very material considerations in the problem. We would be sacrificing 
 them altogether. 1 do not believe that you are going to be able to go 
 into New Hampshire and Maine and Vermont and out West and get 
 young Americans to go to sea, but you can make good Americans of 
 these polyglot men whom I have mentioned, if we enable the Ameri- 
 cans to pay them the rates of wages that prevail on American ships. 
 They will take out papers, and they will become good Americans, and 
 if they have to fight they will fight, and fight as well as any other men. 
 
 The Chairman. Do you not think our naval training stations will 
 develop American seamen to a great extent? 
 
 Mr. Clyde. Yes, sir; to a great extent they do. They would make 
 the petty officers, the higher-grade officers to manage these men. 
 
 NO lowering of PRESENT STANDARD. 
 
 The Chairman. You would not favor reducing the present American 
 requirements as to comfortable quarters for the crew and abundance 
 and variety of food as prescribed by act of Congress, so as to put 
 American ships on a parity with their foreign competitors ? 
 
 Mr. Clyde. I would not. 
 
 The more I see of the sailor's life the more I feel that under the 
 best conditions as they exist on American steamships to-day, he is rela- 
 tively a very poorly paid man, and 1 should hate to see his wages 
 diminished or his conditions of employment made any more severe. 
 If we have to come down to that, 1 think we might about as well run 
 under foreign flags and be done with it. And it is so out of keeping 
 with the rest of our countrj^'s methods and our whole economic system 
 to make a distinction and say we will pay every other kind of labor 
 American wages, but the sailor we will not, that I can not think of it 
 for a moment. 
 
 "free ships" and coastwise trade. 
 
 The Chairman. What would be the effect, Mr. Clyde, upon Ameri- 
 can maritime interests of the passage of a free-ship law which per- 
 mitted such vessels to engage in the coastwise or domestic trade of 
 the United States ? 
 
 Mr. Clyde. They would come in like a swarm of bees and drive 
 us all out. 
 
 Representative Grosvenor. And then fix their own rates of freight 
 afterwards. 
 
 Mr. Clyde. Yes, sir. There is no doubt that this Government has 
 paid, and paid handsomely for the merchant marine we have, and is 
 paying every year, but if to-day you take the restriction off the coast- 
 wise trade and admit the foreigner to it, the American shipowner is- 
 not going to be the only sufferer. You will find a great many railroads 
 in this country in the hands of receivers, because the freight rates of a 
 great many railroads in the country are made by the coastwise steam- 
 ship lines, and if those rates were cut all to pieces by an incursion of 
 foreign steamships, the railroad rates would have to come down to the 
 same plane. I do not fear that, after consideration, any Congress 
 would ever do any such radical thing as that. 
 
HEARINGS BEFOBE THE MERCHANT MARINE COMMISSION. 33 
 
 The Chairman. By excluding foreign ships from our coastwise 
 trade, do we not confess our inability to compete with foreign ships, 
 and do we not in some form tax the American people to sustain our 
 coastwise trade as an American institution ? 
 
 Mr. Clyde. Undoubtedly we do. 1 would not be surprised at all 
 if by admitting the Norwegian and the German and the British, too, 
 you could reduce cost of carriage from 30 to 40 per cent, and drive 
 into bankruptcy most of the railroads that parallel the coast. 
 
 Representative McDermott. By a corresponding reduction of rail- 
 road rates? 
 
 Mr. Cltde. Yes, sir. 
 
 AS TO BUYING SHIPS ABROAD. 
 
 Representative McDermott. As to buying ships with American 
 capital, if you allowed them to be bought on the Clyde, as you allow 
 a locomotive which is to be used in this country to be bought abroad, 
 you would reduce to absolutely nothing your first factor against our 
 merchant marine, would you not? 
 
 Mr. Clyde. Yes, sir. There would not be any difference in cost if 
 you all bought in the same market. 
 
 Representative McDermott. And as a patriotic shipowner, manning 
 them with American sailors, under the American flag, prepared for 
 war or peace, and all that sort of thing, it would not be effective at all ? 
 
 Mr. Clyde. But who is going to pay those men ? The shipowner is 
 not. 
 
 Representative McDermott. Assume that you have a subsidy, or 
 some other arrangement with the Government which equalizes the 
 wages. 
 
 Mr. Clyde. Yes, sir; we could buy the ships on the Clyde and be 
 on terms of equality. I assume, of course, that you mean exclusively 
 for the foreign trade. 
 
 The following communication was subsequently received from Mr. 
 Clyde: 
 
 [The Clyde Steamship Company, Coastwise and West India Lines.] 
 
 New York, Mwy ^, 1904.. 
 WiNTHROP L. Marvin, Esq., 
 
 Searetary the Merchomt Marvne Commission^ 
 
 Care N. T. Board of Trade and Transportation, 
 
 203 Broadway, City. 
 Dear Sir: In response to the request of several members of the 
 Commission made to me yesterday, I inclose herewith a copy of the 
 pro forma chart which I submitted to the Commission yesterday, 
 filled out so far as I have been able to do so. 
 
 The conclusions indicated by the figures I have inserted in the chart 
 are purely my own and are based largely on the statistics contained 
 in the annual reports of the Commission of Navigation from 1898 to 
 date, and more especially in the report for 1901. I have modified the 
 evidence furnished by the statistics mentioned, to some extent, in the 
 light of my general experience and observation. 
 
 3a— 04 3 
 
34 HEARINGS BEFOEE THE MEBOHANT MARINE COMMISSION. 
 
 1 think the Commission will see from what took place yesterday 
 that it will be difficult to draw together the conflicting views as to the 
 comparative natural and artificial efficiency of maritime nations as 
 regards the elements of cost of carr3nng cargoes in ships. I had hoped 
 my pro forma chart might suggest to the Commission a means of 
 committing each important witness to a definite expression of opinion 
 as to the relative efficiency of the more important maritime nations, 
 at least in respect to the particular elements of cost with which the 
 witness professes to be familiar. 
 
 In other words, shipbuilders should be compelled to express their 
 opinions definitely as to the relative efficiency of Great Britain, Ger- 
 many, Norway, and the United States in the elements of cost of con- 
 struction and cost of maintenance. Shipowners should be committed 
 in the same way as to the element of cost of operation, and those of 
 the owners who have mail contracts should be committed as to the 
 relative efficiency of the artificial aid given by the nations mentioned. 
 Any bankers called before the Commission should be committed as to 
 the relative prevailing rates of interest charged on capital loaned for 
 steamship enterprises. 
 
 In this way I hoped the Commission would be able, by tabulating 
 and averaging the various expressions of opinion obtained, to get a 
 pretty accurate composite photograph of the prevailing expert infor- 
 mation upon the whole subject. 
 
 When the subcommittee of the Commission goes to the Pacific coast 
 it will doubtless be able to fill up in some form the column of the 
 chart allotted to Japan. This may be of importance as regards the 
 Pacific trade. It is not, as yet, of importance as regards the Atlantic 
 trade. 
 
 Of course, my chart is only a suggestion, and it may very well be 
 that the Commission can devise a better and simpler form in which to 
 collect and show expert evidence. 
 
 Yours, very truly, Thos. Clyde. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 35 
 
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36 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 STATEMENT OF CALVIN B. ORCUTT. 
 
 The Chairman. The Chair will take the liberty of calling upon Mr. 
 Orcutt, president of the Newport News Shipbuilding and -Dry Dock 
 Company, one of the largest shipyards in this country, where the 
 Kearsa/rge and the Kentucky, and many merchantmen have been built. 
 
 Mr. Orcutt. Mr. Chairman and gentlemen of the Commission, hav- 
 ing received an invitation from the secretary of the Commission to 
 be present at the New York hearings and to make known to the Com- 
 mission what in my judgment could and should be done by national 
 legislation to increase the number of American ships and seamen, I 
 have the honor to state that it will be necessary to remove the present 
 serious handicap under which owners of American vessels are laboring, 
 putting them on a reasonable parity with vessel owners of other nations, 
 before any substantial increase can be secured in the number of 
 American vessels for service in the foreign trade. 
 
 If the Commission is not at the present time informed as to the 
 nature and seriousness of the disadvantage under which American 
 shipowners are laboring it will no doubt be fully advised on this point 
 during the progress of the hearings by those most interested, the 
 vessel owners themselves. 
 
 I will simply remark in passing that some idea of the disadvantages 
 accruing to American owners will be gained by comparison of relative 
 costs of vessels built in this country and abroad. 
 
 FOREIGN AND AMERICAN COST. 
 
 An ordinary freight carrying steamship, termed a "tramp," can be 
 constructed in England for about 75 per cent less money than in the 
 United States. 
 
 Representative Grosvenor. "Seventy -five per crent less money." 
 You do not mean " 75 per cent less? " 
 
 Mr. Orcutt. I think we shall show, before the Commission is 
 through with its hearings, that my figures are not entirely out of the 
 way. I will explain as to the class of ships 
 
 Representative Grosvenor. You do not mean |10(J,000 for a British 
 ship as against $400,000 for an American ship? 
 
 Mr. Orcutt. I mean that the ordinary tramp steamer which is 
 produced abroad at a cost of 1400,000 will cost in this country 75 per 
 cent more than that. I refer to the ordinary tramp steamer which is 
 built in large quantities there and is produced very cheaply. 
 
 Representative McDermott. Making the cost here |750,000 if it 
 cost $400,000 abroad? If it cost $400,000 here, is it not your propo- 
 sition that it would cost $300,000 abroad? Your present proposition 
 is that the cost on the Clyde is increased 75 per cent here. Is it not 
 your proposition that the cost here is diminished 25 per cent on the 
 Clyde, so that a $400,000 ship here would be constructed for $300,000 
 there? 
 
 Mr. Orcutt. I think the difference is greater than that. 
 
 Representative McDermott. That it is 75 per cent? 
 
 Mr. Orcutt. Possibly I may have overstated it, but I shall bo very 
 glad to present actual figures. 
 
 Representative McDermott. The figure is very startling. It means 
 that a ship costing $25,000 on the Clyde would cost $100,000 here. 
 
HEABINGS BEFOBE THE MERCHANT MARITSIE COMMISSION. 37 
 
 The Chairman. Kindly repeat that statement. 
 
 Mr. Orcutt. An ordinary freight-carrying steamship termed a 
 " tramp " can be constructed in England for about 75 per cent less 
 money than in the United States. 
 
 It is a well-known fact that a vessel sailing under a foreign flag can 
 l)e manned and victualed at a much lower cost than under the Ameri- 
 can flag. 
 
 EQUALIZINCJ CONDITIOXS BY LAW. 
 
 If the present situation is to be changed for the better it will mani- 
 festly have to be done by national legislation in one form or another, 
 the net result of which shall be to equalize, within reasonable bounds, 
 the condition of competition under which American vessels must 
 engage in the foreign trade. 
 
 The most immediate and effectual method of securing the needed 
 relief would seem to be through direct aid to vessels in the ocean 
 carrying trade, such assistance to be wisely planned to further enlarge 
 the ocean mail service, to promote commerce, increase the foreign 
 trade of the United States, provide auxiliary cruisers, transports, and 
 seamen for Government use in time of war. Couple with the forego- 
 ing a discrimination, where possible, in import duties on goods carried 
 in American-built vessels sailing under the American flag, and we shall 
 witness a revival in American shipping which will largely promote the 
 political and commercial interests of this country. 
 
 THE SECRET OF ENGLAND'S STRENGTH. 
 
 The basis of the English Navigation Act under which England grew 
 to commercial ascendency upon the sea was the principle of reserving 
 the carriage of English trade to English ships. It will not be possible 
 to apply such a principle to our conditions at the present time without 
 serious disarrangement of our ocean trade. It will, however, be well 
 to consider that in 1789, the principle of the English Navigation Act 
 was applied to our shipping in a modified form and in a manner which 
 did not disarrange ocean carriage, by a system of discrimination in 
 duties, aided by a system of tonnage taxation. Ships of other nations 
 were still allowed to carry our ocean commerce, but a discount in 
 duties was allowed to American ships. 
 
 The discount so allowed was not enough to provide for the immedi- 
 ate development of our shipping to a point where it was able to do all 
 of the nation's sea carrying. It, however, promoted constant growth 
 under this policy and in a period of thirty years secured a tonnage 
 sufficient for the country's needs. 
 
 From a political standpoint such a measure would have much to 
 commend it, as it could not be consistently objected to by either 
 Democrats or Republicans. 
 
 A CHANCE FOR REVISION. 
 
 The Chairman. As the Commission is extremely anxious to have 
 accurate figures, the Chair will take the liberty of again calling your 
 attention to the statement you made about the difference in the cost of 
 the construction of a freight steamer in this country and on the Clyde. 
 As I understand, you say it is 75 per cent less there than here. So if 
 
38 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 a vessel cost $200,000 here, it would cost only |50,000 there. Do vou 
 mean that? Seventy -five per cent less would be $150,000, leaving 
 $50,000 as the cost of construction abroad. This is going into the 
 permanent records, and it is very desirable that the American people 
 should not be misled. Possibly it is an inadvertence on your part. I 
 would suggest that you ought to modify it. Of course, if you adhere 
 to that statement, the Commission has nothing further to say about it. 
 
 Mr. Orcutt. May I reserve the pri\ilege of modifying the figures? 
 I have yet to hear by cable from one or two sources, and I should like, 
 as there seems to be a great difterence in views on this point, to have 
 the figures correct. 
 
 The Chairman. You have that privilege. 
 
 Mr. Orcutt. Probably you will receive from other ship builders 
 testimony on this very line. 
 
 BOTH CARGO SHIPS AND MAIL SHIPS. 
 
 The trading ships of this country, our tramp steamers of the future, 
 will have great carrying capacity and slow speed, and will be designed 
 and constructed with a view to economical management. Such ships 
 are the backbone of England's sea power, just as they will be of our 
 own. 
 
 For obvious reasons these particular ships, by reason of their con- 
 struction and slow speed, will not form a naval reserve of any consider- 
 able value. They are entirely unfitted for the carriage of mails, and, 
 therefore, are not in the line of postal or admiralty subsidy. How- 
 ever, these vessels are the real essence of our strength upon the sea 
 and should be encouraged. The system of discrimination in duties, 
 heretofore referred to, would fit their needs in a measure at least. 
 The nation's needs do not stop here. 
 
 We need upon the seas the swiftest ships to carry our mail, and to 
 form an auxiliary force in time of war. We need ships of every class 
 in which to instruct seamen for our increasing Navy. Other nations 
 have this sea equipment, and unless we are willing to forego the accru- 
 ing advantages we must have it also. 
 
 A discrimination in duties will not be sufficient. To gain our proper 
 place upon the sea we must imitate the example of otner nations and 
 provide a direct subsidy as well. 
 
 By a wedding of both principles, that of discriminating duties and 
 direct subsidies, we shall, in my opinion, secure the best results. Each 
 has its own field of usefulness, and the formulation of a policy adapted 
 from each would be likely to receive the support of both political 
 parties. 
 
 Now, Mr. Chairman, 1 should like to say a few additional words. 
 I have responded, as you will observe, directly in the line of the invi- 
 tation of the Commission with suggestions as to what should be done. 
 I assume that the Commission need not be told very much about the 
 conditions that exist in regard to American shipping. You have heard 
 at Washington before various conamittees from time to time a great 
 deal on this subject. It seems to me it is not necessary to thrash out 
 old straw in your presence. But 1 understand that you desirfe the 
 opinions and views of various people and various interests as to what 
 should be done, all recognizing that something is needed. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 39 
 
 A WOKD IN EXCEPTION. 
 
 I wish to take exception to some things that Mr. Clyde, who pre- 
 ceded me, said, and I want to do it with perfect business courtesj-. 
 
 Mr. Clyde started out to say that every interest should stand on its 
 own bottom — the shipbuilder, the shipowner, etc. He then proceeded 
 to explain to you all of the methods and costs of building ships, and 
 I think if he will look over the remarks which he has made, he will 
 find it necessary to correct very materially some of the statements he 
 made. 
 
 Now, Mr. Chairman, to the best of our knowledge and belief the 
 labor at our shipyard at Newport News is costing us 75 ^er cent more 
 than the same labor is costing English shipyards. I think I can say 
 that 40 per cent in the cost of material in favor of the English build- 
 ers is a very modest figure; and I am prepared here to deny that bat- 
 tleships can be built in this country for foreign powers as cheaply as 
 they can be in England or elsewhere. 
 
 BATTLE SHIPS NOT CHEAPER HERE. 
 
 We had very direct evidence of that condition of things, Mr. Chair- 
 man, when we were called upon some time ago to make a tender to 
 Russia for a vessel required for war purposes. We were told that the 
 tender, which we made as low as cost would justify, barely reserving 
 a profit, was so far above those of other nations that we could not 
 naturally expect to have the award. We bid on vessels for the 
 Japanese Government without success. 
 
 It has been mentioned here that some war vessels for foreign nations 
 have been built in this country. They are sporadic cases. I think, if 
 the figures were shown as to what was the net result of the operations 
 of building for foreign nations, it would be a minus quantity; that 
 there was no profit in the operation. 
 
 I at least hope that I am not wrong in my understanding of the sit- 
 uation. I apprehend, Mr. Chairman and gentlemen of the Commis- 
 sion, that we are looking now to the great export trade of this growing 
 country of ours. We have to expand that trade enormously and very 
 rapidly. Otherwise we shall overtake consumption, at the rapid rate 
 at which we are progressing in manufacturing. 
 
 Now, does it not concern this nation that transportation facilities for 
 the carrying to foreign markets of this surplus production of ours are 
 put on a basis that will attract capital, and American capital, for the 
 owning and operation of American lines ? 1 do not understand that 
 we can expect to go out into the great competitive field of the world 
 and build for people other than United States citizens, vessels of any 
 character in competition with the shipbuilding establishments of Eng- 
 land or other countries. I apprehend that if we are going to get any 
 business in the line of shipbuilding, it must be from American owners — 
 ships to be built with American money, for the purpose of carrying 
 American products to other countries, manned by American sailors. 
 
 I can not understand some of the figures Mr. Clyde has given and 
 some of the observations he has made in respect to these matters, and 
 I want the privilege accorded me by this Commission, not only of veri- 
 fying or correcting the figures which I have given as to the difference 
 in cost between foreign ships and American ships, but I wish also an 
 
40 HEAEINGS BEFOEE THE MERCHANT MARINE COMMISSION. 
 
 opportunity to answer some of the points which my esteemed friend, 
 Mr. Clyde, has made. I am afraid that he has not fully apprehended 
 the situation in regard to shipbuilding. I do not profess to know all 
 about it. I know mighty little about it, comparatively, but I am sure 
 that some of the comments and remarks made by Mr. Clyde are not 
 quite in accordance with the experience of people who have built ships 
 and paid the bills. 
 
 AS TO COST OF MATERIALS. 
 
 Senator Mallory. Mr. Oroutt, may I ask you a question ? 1 under- 
 stood you to say that material in American shipyards for American 
 ships cost 40 per cent more than in European shipyards? 
 
 Mr. Orcdtt. Yes, sir. 
 
 Senator Mallory. Do you compare it with England or any other 
 nation? 
 
 Mr. Orcutt. I take Great Britain as the standard. 
 
 Senator Mallory. That is the cheapest. Forty per cent more than 
 Great Britain in cost of material ? 
 
 Mr. Oroutt. Yes, sir. 
 
 Senator Mallory. 1 understand from that statement that if you 
 were called on to build a tramp, corresponding to a British tramp of 
 3,000 tons, the material alone going into the tramp would cost 40 per 
 cent more here than if the vessel were built in Great Britain? 
 
 Mr. Orcutt. Yes, sir. 
 
 Senator Mallory. Why is it? 
 
 Mr. Orcutt. Because everything in the way of material entering 
 into the construction of a ship is highly protected here. It is not 
 only the steel that forms the hull of the vessel that is affected in price. 
 It is every conceivable item that goes into a ship. 
 
 Senator Mallory. Is not a large part of that material admitted 
 free?' 
 
 Mr. Orcutt. It would be if we were to build vessels for the foreign 
 trade. 
 
 Senator Mallory. But not for home use ? 
 
 Mr. Orcutt. No, sir. 
 
 EFFECT OF THE TARIFF. 
 
 Senator Mallory. If the duty on materials entering into the con- 
 struction of a steel or iron ship were removed, what would be the 
 relative diflEerence in cost between the material of a foreign-built ship 
 in England, and one built at Newport News ? 
 
 Mr. Orcutt. I can not say in percentage offhand, but whatever the 
 actual difference is at a certain time, we could construct a ship for that 
 much less money. 
 
 Senator Mallory. I gathered from what you said that it is the 
 effect of the tariff' on material which makes the difference of 40 per 
 cent. I may have misunderstood you. 
 
 Mr. Orcutt. There is a difference of about 40 per cent on account 
 of the tariff. 
 
 Senator Mallory. That is what you base your statement upon ? 
 
 Mr. Oroutt. Yes, sir. 
 
HEARINGS BEFOEE THE MERCHANT MARINE COMMISSION. 41 
 MORE SHIPS MEAN CHEAPER SHIPS. 
 
 The Chairman. I wish to ask you what in your judgment would be 
 the effect on the cost of American-built steamships of a steady, long- 
 continued demand for steamships of standard types — that is, for com- 
 bined passenger and cargo ships or exclusively cargo ships? To put 
 it in other words, if your Newport News yard constructed in the course 
 of four or five years three 7,000-ton steamers of substantially the same 
 type, would the price of the labor and material for the later vessels be 
 clieaper than for the earlier ones? 
 
 Mr. Orcutt. Manifestly so; and that throws some light on the 
 difference of cost, as to which my figures have startled you. Here are 
 foreign owners — British owners— going into shipyards and ordering 
 not only three vessels of absolutely the same type, and a very cheaply 
 built ship at that, but twenty-five and thirty vessels. I do not know 
 what the shipyards of this country could do in the way of cost if they 
 had such an opportunity of building vessels of absolutely the same 
 type, absolutely the same model and pattern, one after the other, year 
 in and year out. We probably should not have very much difference 
 in cost when that opportunity came and had been with us long enough. 
 
 The Chairman. I want to ask you if I am correct in assuming that 
 j'ou have built several vessels of the same type — cargo steamers — for 
 the trade between New York and New Orleans? 
 
 Mr. Orcutt. We built twelve of the same type for one owner. Of 
 course, in consequence, advantages accrued in the way of profit. I 
 want to say right here that there is a vast difference in the style of 
 fitting out and the character of workmanship and detail of those ships 
 that are carrying cargoes, and onl3'^ cargoes for the Southern Pacific 
 Railroad from this port to New Orleans, as compared with foreign cargo 
 carriers. They are* fitted with mahogany cabins for the officers. The 
 mess rooms are fitted with mahogany. They are magnificent ships. 
 They are not for a moment to be compared with those rough foreign 
 tramps that are built by the mile and cut off the prescribed length, 
 according to the wishes and tastes 'of the buyers. 
 
 The Chairman. What I wish to get at more particularly, and it is 
 an important question, is whether the experience that you have gained 
 in constructing several ships, vessels of the same type, has had any 
 effect upon the cost of production. 
 
 Mr. Orcutt. It has had a very decided effect; and 1 would consider 
 that there was something wrong in an organization that could not pro- 
 duce vessels or any character of commodity at a lower cost after rea- 
 sonable experience. That is what the American brain is for, and if 
 it only has an opportunity to operate in the line of meeting the com- 
 petition for vessels to carry American products to foreign ports, we 
 will show you what can be done. But to-day we are handicapped. 
 
 The Chairman. How long would it take your plant to construct, say, 
 a 7,000-ton cargo steamer. 
 
 Mr. Orcutt. About seven months, it being conceded that the 
 material would be forthcoming from the steel mills without delay. 
 
 shipbuilding in THE SOUTH. 
 
 The Chairman. Are there any advantages, aside from climate, in the 
 matter of shipbuilding in the Southern States as compared with the 
 Northern States? 
 
42 HEARINGS BEFOBE THE MEKCHANT MARINE COMMISSION. 
 
 Mr. Okcutt. Not that I know of. Of course we are making use of 
 negro labor, and we were told when we went there that it would be 
 unreliable labor, but we have gotten along with it very well. I know 
 of no advantages especially accruing to tne South in that connection 
 beyond that of climate. 
 
 Representative McDermott. Is that the kind of labor you refer to 
 when you speak of the advantage of American labor in the matter of 
 production ? 
 
 Mr. Okcutt. That is the very common labor — the mere outside, 
 rough labor. 
 
 Representative McDermott. You have to pay more for that kind of 
 labor, even when you employ negroes, than they do on the Clyde for 
 similar labor? Do you mean that your recollection is that the ele- 
 ment of labor as a unit in the construction of a ship has decreased 
 as your business increased? 
 
 Mr. Orcutt. Yes. 
 
 Representative McDermott. To what extent? 
 
 Mr. Orcutt. I can not give the percentage, but of course you 
 understand we are introducing labor-saving devices at every turn, and 
 I think we have very much to hope for in that connection when once 
 we are given an opportunity to build extensively ships for the cargo- 
 carrying business of the world. 
 
 The Chairman. Are you through, Mr. Orcutt? 
 
 Mr. Orcutt. I am. I thank you for your kindness. 
 
 "tramps" an inferior type. 
 
 Senator Mallort. Have you ever built a vessel of the same class 
 as the ordinary British tramp that comes into the port of Norfolk for 
 coal ? 
 
 Mr. Orcutt. No, sir; we have not. 
 
 Senator Mallory. They are, in your judgment, an inferior class of 
 ships ? 
 
 Mr. Orcutt. Decidedly so. 
 
 Senator Mallory. They are the cheapest possible ships? 
 
 Mr. Orcutt. The cheapest possible ships. I should like to say that 
 they are not necessarily structurally weak or anything of that kind, 
 but the work done on that class of vessels is of the crudest kind. 
 You would have to take only a cursory glance at the outside of the 
 ship to see that everything about it was cheaply done; nothing nicely 
 faired, as we are in the habit of doing in the construction of our 
 coastwise vessels, or, in fact, all our American vessels. The conse- 
 quence is that the interest account of the Englishman is very much 
 reduced. He looks simply to the ledger. He has not any particular 
 pride as to how his vessel looks. He has gone beyond that. He 
 makes it simply a money earning proposition. 
 
 The Chairman. That does not interfere with the ship's classification ? 
 
 Mr. Orcutt. Not^at all. If American owners are allowed to build 
 and operate ships at a profit, shipbuilding will come to their aid in the 
 matter of cheapening production, and that right royally. 
 
 Representative Spight. Does not a rough ship do its work as effi- 
 ciently as the more highly finished article? 
 
 Mr. Oeoutt. Yes, sir. 
 
HEAEINGS BEFOBE THE MERCHANT MARINE COMMISSION. 43 
 AMERICAN STEEL ABROAD. 
 
 Representative Minor. Is there not a considerable amount of 
 material shipped to Germany and the Clj'de which is used in the con- 
 struction of snips there ? 
 
 Mr. Orcutt. It is not for the construction of ships. I think it is 
 more for bridge building and structural work of that class. 
 
 Representative Minor. It is said that our American manufacturers 
 of steel are exporting a large amount of steel plates and rivets and 
 shapes that enter into the construction of ships, and that they are able 
 to sell them over there at a profit. And yet when you want to buy 
 steel it costs you 40 per cent more than it does abroad. 1 should like 
 to have you make a statement on that point. 
 
 Mr. Orcutt. I am not informed as to what is done with the steel 
 and the shapes that are exported. My impression is that such mate- 
 rial is not used in shipbuilding. 
 
 The Chairman subsequently said: Mr. Orcutt has requested the 
 chair to announce that he has revised his estimate as to the relative 
 cost of building a freight steamer in the United States and in Great 
 Britain, and he puts the difference at from 40 to 50 per cent less in 
 England than in the United States. 
 
 The following letter was subsequently received from Mr. Orcutt: 
 
 Newport News Shipbuilding and Dry Dock Company, 
 
 New York, May ^4-, 1901^. 
 Sir: Confirming the statement made to the Commission at yester- 
 daj^'s hearing that an ordinary "tramp" steamer can at the present 
 time be constructed in England from 40 to 50 per cent less than in the 
 United States, I beg to advise that we have been furnished figures 
 covering cost to owners of tramp steamer King Damid, built at Shorts, 
 Sunderland: 
 
 Length of vessel feet. . 304 
 
 Depth do. . . 20^ 
 
 Beam , do . . . 44' 
 
 Measurement on summer free-board tons. . 4, 250 
 
 Steams 9 knots on consumption of 16 tons of coal in twenty-four hours. 
 
 Indicated horsepower 1, 000 
 
 Price of engines |38, 000 
 
 Price of hull 85, 000 
 
 Total 123,000 
 
 Terms o/^oj/meni.— $50,000 on delivery of vessel; $36,500 in two years; $36,500 in 
 four years. 
 
 The above is a modern up-to-date freight steamer; time required to construct and 
 complete same, seven months from laying of keel. 
 
 We could not undertake to duplicate this vessel for less than $250,000; at this figure 
 the profit would be very small. 
 
 We were recently requested to make a tender on a freight steamer of the following 
 dimensions, viz: 
 
 Feet. 
 
 Length 290 
 
 Beam 42 
 
 Depth 21 
 
 Double bottom; some special conditions involved. We made what we considered 
 a very low tender — $260,000. Prospective owner, now in Europe, advises us he can 
 build such a vessel in England for £25,000. 
 
44 HEARINGS BEFOEE THE MERCHANT MARINE COMMISSION. 
 
 In the early part of May we were requested to make figures on. a 
 steamer of 7,000 tons' dead-weight capacity; 24 feet draft; lOi knots 
 speed; general freighter to class 100 Al at Lloyds. We named 
 $510,000, a trifle over cost. 
 
 We were subsequently advised that two tenders had been received 
 from England, for the vessel in question, of £45,000 and £50,000, 
 respectively. Other examples might be given showing as great, if not, 
 greater, differences in cost in building vessels in this country and 
 abroad. 
 
 I would respectfully call the Commission's attention to a- confusion 
 in the statement of percentages, which crept into the examinations 
 yesterday, regarding difference in cost of ships here and in Great 
 Britain; also in respect to the difference in cost of material in this 
 country and Great Britain. 
 
 My statement as to the difference in cost of ships is that vessels can 
 be constructed in England at from 40 to 50 per cent less than in the 
 United States. For example, a duplicate of King David, mentioned 
 above, can be built in England 50 per cent less than in the United 
 States. Putting it the other way, it will cost 100 per cent more to 
 build a duplicate of said steamer in the United States than in England. 
 
 Something of the same confusion arose in regard to statement of 
 the difference in cost of material in this country and abroad. To the 
 several inquiries of Senator Mallory, wherein he asked if he under- 
 stood me aright in stating that material cost 40 per cent more in 
 American shipyards for American ships than the same material would 
 cost in Great Britain, I inadvertently answered yes, whereas I should 
 have reversed the proposition and stated that the material in question 
 would, at the present time, cost 30 per cent less in Great Britain than 
 in this country. For instance, we have a definite quotation from a 
 steel company in Scotland of £5 15s. per ton of 2,240 pounds, f. o. b. 
 Scotland, on ship plates, which is equal to 1.24 cents per pound, 
 while ship plates delivered at our yard from American mills are now 
 costing 1.78 cents per pound, which makes the cost of ship steel about 
 30 per cent less in Great Britain than in this country, which is equiva- 
 lent to nearly 48 per cent more in this country than abroad. 
 
 No doubt the Commission will be further advised on this point as 
 the hearings progress. 
 
 Respectfully, C. B. Okcutt, 
 
 President Newport News Shipbuilding 
 
 and Dry Dock Company. 
 
 Hon. J. H. Gallinger, 
 
 Chairm<m The Merchant Marine Commission. 
 
 STATEMENT OF OTTO PARSONS. 
 
 The Chairman. The Commission will remember that at the opening 
 of the hearing the Chair took the liberty of saying that not only would 
 shipbuilders and shipowners and merchants be invited to participate 
 in this conference, but that the representatives of seamen and other 
 classes of labor would likewise be asked to present their views if they 
 desired to do so. I will inquii-e if Mr. Otto Parsons, New York agent 
 of the Atlantic Coast Seamen's Union, is in the room. 
 
 Otto Parsons appeared before the committee. 
 
HEAKINGS BEFOBE THE MERCHANT MARINE COMMISSION. 45 
 
 The Chairman. The chair will take the liberty of suggesting to all 
 gentlemen who desire to be heard the importance and aesirability of 
 being as brief as possible. The Commission has promised to sit in 
 Philadelphia on Thursday and Friday and in Baltimore on Saturday. 
 Hence our time will be fully occupied for the remaining days of the 
 week. 
 
 Mr. Parsons. Mr. Chairman and gentlemen, I have here a copy of 
 an extract from the annual report of the United States Life-Saving 
 Service for the year ended June 30, 1890. It gives the wreck of 
 barges that they claim were undermanned, and the cause of the wreck: 
 
 [Extract from the Annual Report of the United States Life-Saving Service for the 
 year ended June 30, 1890.] 
 
 Wreck of the scJwoner iarges Mears amd Mid/night. 
 
 Another fatality was occasioned by the wreck on November 27, 1889, 
 of the schooner-rigged barges Mears and Midnight, on the Michigan 
 shore of Lake Huron, at a point about 8 miles to the northward of the 
 Ottawa Point station (Tenth district). The Mears was a three-masted 
 vessel of 430 tons, while the Midnight measured but 288 tons and had 
 two masts. One of the crew of the Mears, Daniel Mowat, of Greenock, 
 Scotland, died from exposure before aid could reach him. 
 
 The rest of the crews of the two vessels, 11 in number, including 
 Mrs. Hazen, wife of the captain of the Mears, and Mary McDonald, 
 employed as cook on the Midnight, was rescued by the crew of the 
 life-saving station under circumstances which reflect great credit 
 upon both the keeper and his men. 
 
 It seems that the two barges were being towed down the Lakes by 
 the steam barge Wilhelm, on their way to Buffalo, N. Y., with a cargo 
 of lumber, the Mears being from Sheboygan, Mich., and the Midnight 
 from Ford River, Wis. A severe northeast gale and snow storm had 
 overtaken them as they came down the lake, and bj^ the afternoon the 
 weather became so rough that at half past 2 o'clock the tow line parted 
 under the great strain it was subjected by the plunging and rolling of 
 the deeply laden vessels, as they wallowed along in an endeavor to 
 reach anchorage from the storm, in Ottawa Bay, the accident occurring 
 about a mile from the land and some distance to the northward of Fish 
 Point. 
 
 The Wilhelm immediately turned back to pick up her consorts, but 
 the weather was so thick that she had run them out of sight almost 
 immediately after the hawser parted and was unable to find them 
 again. Seeing nothing more of the steamer, the crew of the barges 
 cleared away the anchors, intending to let .them go, but before this 
 could be done both vessels took the bottom, and this settled their fate, 
 as the heavy seas steadily pushed them toward the lee shore, where 
 they soon afterwards fetched up hard and fast, about two hundred 
 yards from the beach. The barges were at this time side by side, and 
 the crew of the Midnight deeming the Mears the safest vessel, being 
 larger and stronger than their own, jumped on board and cast their 
 fortunes with the crew of the Mears. The Wil/ielm, having failed in 
 her search, bore up for the harbor, the captain as he passed the Point 
 sounding "distress" whistles to attract the attention of the station 
 crew. This was about 5 o'clock and night had set in. 
 
46 HEAEINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 All perished on board the two barges. 
 
 The Chairman. Mr. Parsons, will you please postpone the remainder 
 of your remarks until after recess'? 
 
 Mr. Parsons. Certainly. 
 
 Thereupon [at 1 o'clock] the Commission took a recess until 2.30 
 o'clock p. m. 
 
 AFTER RECESS. 
 
 At the expiration of the recess, the Commission resumed its session. 
 The Chairman. Mr. Parsons, you may resume your statement. 
 
 STATEMENT OF OTTO PARSONS— RESUMED. 
 
 Mr. Parsons. Mr. Chairman, 1 have here an abstract from the 
 annual report of the United States Life-Saving Service for the fiscal 
 year ended June 30, 1895, giving a report of the wreck of the coal 
 barge Seth Low. 
 
 About 1.30 o'clock in the morning of January 14, 1895, a large 
 schooner-rigged barge, known as the Seth Low, stranded on Long 
 Island coast (third district) near Blacks Inlet Life-Saving Station and 
 became a total wreck. Two of her crew of five men perished; one, 
 Oliver Dootridge, seaman, having been washed overboard and drowned, 
 and the other, Joseph Johnson, cook, having died from exposure while 
 lashed to the bitts on the after end of the vessel. The other three were 
 rescued by the crew of the life-saving station. 
 
 The Seth Low was built in 1861 at Kennebunk, Me. , and consequently 
 was upward of 33 years old when wrecked. Her gross measurement 
 was 1,147 tons. She was originally ship-rigged, at one time during 
 her protracted existence having been owned in Great Britain and sailed 
 under the British flag as a bark, by the name of Graigs. In 1888 she was 
 converted into a coal barge, and rigged with two masts carrying fore and 
 aft sails. For a vessel of her size, drawing upward of 20 feet of water, 
 the insignificant spread of canvas provided by her rig was little more 
 than enough to enable her to make headway, still less to contend with 
 a storm, and the testimony shows that she was not only old but rotten. 
 She belonged to a class of vessels which has largely increased in recent 
 years and is still growing. After their usefulness is over as sailing 
 vessels they are turned into transports for carrying coal by being 
 towed (generally two or more at a time) from port to port by steam- 
 ers constantly employed for the purpose. By this method the expense 
 of transportation is much reduced, for the reason that barges in tow 
 of steamers are not subject to the delay occasioned to sailing vessels by 
 adverse winds, and need only small and inexpensive crews. During 
 the season of 1893 one of these barges was cut adrift near Montauk 
 Point and wrecked on Block Island, with a loss of all on board (five 
 persons); and another, during the season of 1894, off Long Island, 
 beyond the scope of life-saving operations, with her full crew of four 
 persons. On the latter occasion the towing steamer Panther, which 
 cut the barges adrift in both instances, herself became a victim of the 
 storm and went down, with a loss of 13 of the 16 men who -composed 
 her crew. Four more of these coal carriers were wrecked in Long 
 Island Sound during January, 1895, with a loss of 12 persons; and 
 similar disasters are frequent. 
 
HEABINaS BEFOBE THE MERCHANT MARINE COMMISSION. 47 
 
 The Seth Law was loaded with 1,639 tons of coal at Perth Amboy, 
 N. J., and was bound for Boston, Mass. On the 10th of January she 
 left Perth Amboy and anchored near by Old Orchard, where she lay 
 until the morning of the 12th, when she and a companion barge called 
 the Ringleader were taken in tow by the steamer Santuit, and set out 
 for their destination. On account of thick weather and an easterly wind 
 all three returned the same day to their anchorage. After laying at 
 anchor with her tow over night the Santuit again steamed out, about 
 1.30 p. m. on Sunday, the 13th, passing Sandy Hook half an hour 
 later. The Seth Lmo having her sails set at 7.30 p. m. her towing 
 hawser, which was subjected to an intense strain, suddenly parted; 
 she began to drift rapidlj' away from the steamer. At 1.30 a. m., on 
 the morning of the 14th, she stranded on the outer bar, 600 or 700 
 yards from the shore, as the captain thinks, and pounding with great 
 violence every time a heavy sea struck her. 
 
 I have others here which, as I do not want to take up your time 
 unnecessarily, I will submit. 
 
 [Extract from the report of the United States Life-Saving" Service, 1893.] 
 Wreck of the coal iarge SeUance, 
 
 In the forenoon of February 20, 1893, a large coal barge called the 
 Reliance^ belonging to the Reading Railroad Coal and Iron Company, 
 of Philadelphia, Pa., was cut adrift between Montauk Point and Block 
 Island in a gale of wind by the steamer having her in tow, and some 
 few hours later drifted ashore on the west side of Block Island, where 
 . she went totally to pieces within an hour. There were 5 persons on 
 board of her when the steamer abandoned her — 3 men, a boy and a 
 woman — i of whom appear to have been washed overboard and drowned 
 while the helpless barge was wallowing in the sea before she stranded. 
 The fifth, one of the men, was torn away from the main rigging a little 
 later, ten minutes after she struck the bar. 
 
 The following details have been collected from the testimony of 20 
 witnesses, and such other reliable information as could be obtained. 
 The Reliance was loaded with 1,450 tons of anthracite coal, and was 
 bound from Philadelphia to Boston; she was rigged with two lower 
 masts and sails, but was not designed to be a seagoing vessel wholly 
 depending on her sails, the custom being to take such vessels in tow of 
 powerful steamers employed for the purpose. The towing steamer 
 in this case was the Panther^ belonging to the same company as the 
 barge. The overwhelming weight of testimony is that the Lif e-Saving 
 Service did all that could have been done to save the only person that 
 was lost after the barge came within range of the station operations. 
 Lieut. W. H. Roberts, U. S. Revenue-Cutter Service, who made the 
 investigation, states that it was a physical impossibility to get a boat 
 to the imperiled barge. 
 
 [Extract from the Boston Sunday Journal of January 27, 1895.] 
 
 New London, Conn., January 36. — The worst disaster that has 
 happened on Long Island Sound for years occurred last night, and 
 became known this morning, when the Sea lung. Captain Olmstead, 
 arrived in this harbor in a thick fog. The Sea King left Hammond 
 Flats Thursday evening about 5 o'clock, with fair weather and light 
 
48 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 winds, with 5 barges in tow, all but one of the fleet consigned to 
 Providence. The barges were coal laden and carried 3,500 tons of coal. 
 The Sea Kinq came through the race last night about 5 o'clock with a 
 light west wind prevailing and clear weather, which continued up to 
 11 o'clock, at which time the tow was 6 miles west of Point Judith, 
 and then the wind shifted to the eastward, and at 12 o'clock increased 
 to a gale from east-southeast, with tremendous force and making a 
 clear breach over the sturdy tug. It was apparent that it was to be a 
 fierce struggle for the boat to get through if the gale held on, and if 
 it increased in force it would be doubtful indeed if the tug and tow 
 would survive. 
 
 The waves broke over the tug, flooding her cabin and kitchen so that 
 it was impossible to see hardly the length of the craft. Captain 01m- 
 stead and Pilot William Dodd, at the wheel of the Sea King^ headed 
 the tug offshore, and she pulled away at the long tow behind her until 
 2 o'clock. The storm was as fierce as ever. Then it was immediately 
 seen that the tow had broken apart. While looking at the laboring 
 craft, the first tw.o or three barges foundered. The head barge of 
 the tow foundered about 6 o'clock this morning, and then the hawser 
 that held her was cut. 
 
 As soon as the Sea King took off the Nettie crew, it was apparent 
 that no other lives could be saved. The tug ran for the harbor to 
 escape the fury of the storm. 
 
 About the barges, four were for Providence and the fifth bound 
 for Newport, R. 1. The barges lost at Point Judith were well known 
 in Providence, where they did regular service in the transportation of 
 coal for John R. White and Sons and Pomoroy Coal Company. Thej' 
 were all, with the exception of the J. J. Nulty. owned by the John 
 Scully Towing Company, of New York. The J. J. Nulty was owned 
 by her captain. The Crocus was a new barge, having been in service 
 only two years; the others were old vessels. The Crocus loaded at 
 Edgewater with 1,264 tons of coal; the American Eagle and the 
 Albert M. loaded at Weehawken with 472 and 726 tons, respectively, 
 all three consigned to John R. White & Sons. The J. J. iVwfoy loaded 
 at Hoboken with 700 tons for the Pomoroy Coal Company. All four 
 were fully insured. 
 
 [Extract from the Annual Eeport of the U. S. Life-Saving Service, 1897.] 
 
 Sinlcing of the harge Sumatra. 
 
 A very lamentable disaster was the foundering of the barge Sumatra, 
 September 30, 1896, off Milwaukee Harbor, Wis., when within a mile 
 of safe refuge, with help close at hand, and with scarcely any warning 
 to the ill-fated crew. Although suiEciently disabled to cause grave 
 apprehension on board, she sank so unexpectedly as to preclude any 
 concerted efforts of her crew to escape and carried three of them down 
 with her, helplessly pinioned, no doubt, by the heavy deck load of 
 steel rails sliding upon them as she plunged head foremost to the 
 bottom. 
 
 She was a schooner-rigged barge, built in 1874, at Black River, Ohio 
 and was in good condition and considered perfectly seaworthy, having 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 49 
 
 a rating A2 in inland Lloyds. Her gross burden was 845.34 tons, and 
 she was valued at $18,000 by her owners, the Mills Transportation 
 Company, of Port Huron, Mich., her hailing port. 
 
 The Sumatra left South Chicago about 6 o'clock on the morning of 
 September 29, with a crew of 7 men, including the captain, Charles 
 Johnson, and in tow of the screw steamer B. W. Arnold, 944 tons, of 
 Port Huron, bound for Fort Williams (Canada, on Lake Superior) with 
 a cargo of steel rails for the Canadian Pacific Railroad Company, 250 
 tons of the rails being carried on the deck. The barge was valued at 
 ^35,000 and was fully insured. The Arnold had a similar cargo and was 
 bound for the same port. 
 
 From the testimony of those on board the Sumatra, the heavy cargo 
 on board below her decks strained her planking so as to necessitate 
 constant pumping, and in spite of all efforts on the part of her crew 
 the leak gained upon them so fast that finally she plunged head first to 
 bottom, teking her crew with her. 
 
 [Extract from the Annual Report of the U. S. Life-Saving Service, 1899.] 
 
 September 6, 1898, the steamer ice ^wg/', while towing five ice barges 
 from New York to Bath, Me., broke her crank-pin when 10 mues 
 southeast of Cape Elizabeth, and the steamer blew signalsior assistance. 
 
 The weather was hazy, but the surf men pulled out and soon descried 
 the vessel, and at the request of the master the keeper took ashore 
 two messages, one to the owner to send a tug to come out and take the 
 steamer into Portland, and the other for a tug to come out and take 
 the barges to their destination. 
 
 [Extract from the Annual Report of the U. S. Life-Saving Service, 1903.] 
 
 At Louisville, Ky., May 1, 1903, at 2.35 p, m., the steamer Fulton, 
 as she was backing out from the wharf with a tow of 6 empty coal 
 barges, collided with a ferryboat named the Sunshine a,nd was seri-- 
 ousfy damaged. Two steamers went to their assistance, and while one 
 of them attempted to tow the barges the other took the Fulton in tow. 
 The barges, however, were caught in the strong current of the Ken- 
 tucky chute of the falls and were cast off by the steamer; they then 
 went over the dam, struck the Pennsylvania Railroad bridge, and 
 drifted down the river. The life-saving crew responded quickly to 
 the lookout's alarm, and after landing four men who were on the 
 barges, boarded the vessels and directed their course to save them from 
 destruction, until a steamer, which also went after them, succeeded in 
 making them fast to the shore. 
 
 Mr. PAifsONS. I next present a table, showing the number of barges 
 lost. The total number of barges lost was 670, and the number of lives 
 lost, 167. 
 
 Senatory MALLOEr. During what period ? 
 
 Mr. Parsons. That is going right along. 
 
 Senator Malloet. From what time to what time? 
 
 The Chaieman. In how many years? 
 
 3a— 04 4 
 
50 HEAEINGS BBFOEE THE MEKCHANT MARINE COMMISSION. 
 
 Mr. Parsons From 1890 to 1903. This is not including the Pacific 
 coast, only the Great Lakes and the Atlantic and the Gulf. The table 
 is as follows: 
 
 Extract from the report of the Mfe-Samng Service of the United States from June 30, 1890„ 
 to June 30, 1903, showing the number of barges lost and the number of lives. 
 
 
 Barges lost. 
 
 Year. 
 
 Atlantic 
 and Gulf 
 division. 
 
 Lakes 
 division. 
 
 Rivers 
 division 
 
 1890 
 
 19 
 31 
 19 
 25 
 39 
 33 
 32 
 30 
 29 
 60 
 38 
 48 
 43 
 36 
 
 4 
 11 
 
 6 
 14 
 11 
 
 4 
 
 7 
 
 2 
 12 
 
 7 
 10 
 13 
 11 
 
 6 
 
 10 
 
 
 7 
 
 1892 
 
 5 
 
 1893 
 
 » 
 
 1894 
 
 a 
 
 
 s 
 
 1896 
 
 11 
 
 1897 
 
 4 
 
 1898 
 
 5 
 
 1899 
 
 8 
 
 1900 
 
 7 
 
 1901 
 
 4 
 
 1902 
 
 
 1903 
 
 5 
 
 
 
 Total 
 
 472 
 
 118 
 
 90 
 
 
 
 Total number of barges lost, 670; number of lives lost, 167. 
 
 The Chairman. What is your suggestion concerning that matter? 
 Do I understand you to say that the wrecks were due to the fact that 
 the crews were inadequate? 
 
 Mr. Parsons. Yes, sir. The vessel is not rigged so that she can 
 take care of herself even, and the complement of men they carry is 
 not sufficient, and the competency of the men is not there, because 
 they are not seamen. They carry anything they can get hold of. By 
 not taking seamen they cut down expenses. The men they have on 
 the barges get from $14 to $16 a month. 
 
 The Chairman. What is the remedy if the grievance is such as 
 you suggest it to be? 
 
 BARGES BETTER RIGGED AND MANNED. 
 
 Mr. Parsons. Mr. Chairman and gentlemen, the only remedy I can 
 see is to rig those vessels and to have them carry competent seamen, 
 so that they will be properly manned in case of storm or in case the 
 tugboat leaves them or the hawser parts. 
 
 Senator Mallort. Is it not a fact that a good many of these barges 
 are so rigged that they can take care of themselves in such an 
 emergency. 
 
 Mr. Parsons. Some of them are so rigged, but they have not suffi- 
 cient sail on them so that they can stand weather and wind when the 
 storm rises, and they do not carry enough men to man them. A boat 
 of two thousand tons will carry a captain, a man to heave the anchor 
 up, and some two and some three men — generally boys and not men; 
 boys from the age of 12 to 16 and 18 years of age. 
 
 Senator Mallory. You think there should be some restriction put 
 upon the character of the men they ship as sailors ? 
 
 Mr. Parsons. Yes, sir; they ought to be competent. A man who 
 goes aboard a vessel ought to know his duty, so that he does not' run 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 51 
 
 the risk of imperiling lives in case of accident or storm, and they ought 
 to carry so many competent seamen on every vessel. 
 
 Senator Malloet. Would you require them to be able seamen ? 
 
 Mr. Parsons. Yes, sir. 
 
 Senator Mallort. Instead of ordinary seamen? 
 
 Mr. Parsons. Yes, sir. 
 
 Senator Malloet. Which should they be — able or ordinary seamen ? 
 
 Mr. Paesons. There should be so many able seamen and so many 
 ordinary seamen. There ought to be some seamen among them. 
 
 Senator Mallort. I gather from the statement you read that the 
 Seth Lo%o had 16 men aboard. 
 
 Mr. Parsons. That was the complement of another ship about 
 which I read. 
 
 Senator Mallort. Do you remember how many men the Seth, Low 
 had aboard when she went ashore? 
 
 Mr. Parsons. No, sir; I do not. It does not state. 
 
 The Chairman. Let me ask you a question. Are you an American 
 citizen? 
 
 Mr. Parsons. Yes, sir. 
 
 The Chairman. Have you sailed in American vessels? 
 
 Mr. Parsons. Yes, sir; for ten years. 
 
 The Chairman. What position did you occupy on American vessels ? 
 
 ]Mr. Parsons. I have occupied every position up to mate; that is, 
 ordinary seaman, seaman, second mate, so called, and mate, and 
 engineer. 
 
 The Chairman. Have you sailed in foreign ships \ 
 
 Mr. Parsons. Yes, sir. 
 
 The Chairman. Wliat position did you hold on such ships ? 
 
 Mr. Parsons. Able seaman. I have sailed in German and Scandi- 
 navian vessels — one Scandinavian and two German. 
 
 The Chairman. You are just the man the Commission has been 
 looking for to give us some information as to the relative wages, 
 quarters, and food on American and foreign vessels. State your 
 experience in that regard on the vessels on which you' have been 
 employed. 
 
 AMERICAN AND FOREIGN FOOD AND WAGES. 
 
 Mr. Parsons. The food on board an American vessel as compared 
 with the Scandinavian: The Scandinavian vessel feeds better — a little 
 better — and the German feeds about even with the American, and the 
 Englishman does not feed as good as the American. 
 
 The Chairman. The Scandinavian vessel, you say, feeds better than 
 the American vessel? 
 
 Mr. Parsons. Yes, sir; that is, those I sailed on. 
 
 The Chairman. What about the wages ? 
 
 Mr. Parsons. In regard to wages, 1 must say that the ship does not 
 make the wages. It is the port where the vessel ships. 
 
 The Chairman. You know what you received on foreign ships and 
 what you received on American ships. How do the wages compare? 
 
 Mr. Parsons. I got f45 for going from Savannah over to London. 
 I can not state how much that womd be a month. That was twenty- 
 one days going over, and $45 in twenty-one days. 
 
 Senator Mallort. What was the nationality of the boat? 
 
 Mr. Parsons. Norwegian. 
 
52 HEARINGS BEFOEE THE MBBOHANT MABINE COMMISSION. 
 
 The Chairman. Did you sail on a ScandiEavian vessel before serv- 
 ing on an American vessel? 
 
 Mr. Paksons. No, sir. 
 
 The Chaieman. You sailed first on an American vessel? 
 
 Mr. Parsons. Yes, sir; on a New York pilot boat. 
 
 The Chairman. What is your opinion as to the relative wages. You 
 have some information about that? 
 
 Mr. Parsons. It all depends upon where the vessel ships. If she 
 ships here in the city of New York, she pays the same wages as an 
 American vessel. 
 
 The Chairman. How long were you on a foreign ship? 
 
 Mr. Parsons. I was twenty-one days on a Norwegian ship, and I 
 was sixty-seven in a German ship coming back to this country from 
 London. 
 
 The Chairman. So far as wages, quarters, and food are concerned, 
 on which vessel would you rather ship — an American, a Scandinavian, 
 or a German vessel? 
 ( 
 
 PREFERRING AMERICAN VESSELS. 
 
 Mr. Parsons. In my opinion, I would rather be on an American 
 vessel, because I claim to be an American citizen and would not sail on 
 anything else; only at that time I was bound to go because I was 
 down and out, and had to do anj'thing I could. 
 
 The Chairman. Is the food scale as bountiful in ships of other 
 nationalities as in American vessels ? 
 
 Mr. Parsons. Yes, sir. 
 
 Rrepresentative Minor. Vessels of what country ? 
 
 Mr. Parsons. Scandinavian and German vessels. 
 
 Representative Minor. You say the German is not quite as good, 
 the Scandinavian is equally good, but the other nations are inferior 
 to ours? 
 
 Mr. Parsons. I really do not know about the other nations, except 
 what I have heard. I only made a comparison between vessels of the 
 nations in which I have sailed. 
 
 The Chairman. In your opinion, what would be the effect upon the 
 Atlantic Coast Seamen's Union of an increase in the number of Amer- 
 ican ships in the foreign trade? 
 
 Mr. Parsons. I do not know if there is any. 
 
 The Chairman. You do not think it would be of any advantage to 
 your union? 
 
 Mr. Parsons. No, sir. 
 
 The Chairman. Have you any remedy to suggest to build up Amer- 
 ican shipping in the foreign trade? Have you given any thought to 
 the matter? 
 
 FREE AS ON SHORE. 
 
 Mr. Parsons. Yes, sir, Mr. Chairman. The American boy who 
 wants to go to sea wants to be free the same as the American work- 
 man on shore is, and the condition on board of an American sailing 
 vessel to-day is in violation of the rights of the American seaman in 
 regard to his contract — his liability to imprisonment in a foreign port. 
 That is what keeps a good many American boys from the sea, in my 
 opinion. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 53 
 
 The Chairman. Do you find fault with that? 
 
 Mr. Parsons. Yes, sir; I certainly do. 
 
 The Chairman. How would you remedy it? 
 
 Mr. Parsons. I do not suppose it could be remedied except through 
 legislation. 
 
 Representative Minor. That is what the chairman means. 
 
 Mr. Parsons. The law allows the American seaman to be impris- 
 oned; that is, if he leaves before his contract is up. 
 
 The Chairman. How is it with other nations in that regard? 
 
 Mr. Parsons. Other nations in that regard I can not say anything 
 about, because I never had any case of that kind; just from port to 
 port. 
 
 The Chairman. Is it not a fact that there is not a maritime nation 
 in the world which allows seamen to leave a ship under those circum- 
 stances? 
 
 Mr. Parsons. That I do not know; I could not tell. They may have 
 laws there to imprison men. I do not know. 
 
 The Chairman. Are you not of opinion, Mr. Parsons, that our laws, 
 so far as seamen are concerned, are pretty liberal, and as a rule very 
 just? 
 
 HOW LAWS COULD BE IMPROVED. 
 
 Mr. Parsons. They are pretty liberal, but they could be made bet- 
 ter. They could be better, as for the workman on shore. 
 
 The Chairman. What do you mean by that? 
 
 Mr. Parsons. That a seaman has a right to ship whenever he pleases, 
 and go to work when he is put to' work, and when his time comes and 
 he sees fit to knock oflf he should be able to knock oflf and be a free 
 man like a workingman on shore. If I go to work on a building in 
 the city of New York, I can work a week or two weeks. I can tell 
 my employer at any time 1 want to work no longer. I can try to 
 better myself elsewhere. An American seaman can not do that with- 
 out forfeiture of his wages and even of his clothing. 
 
 The Chairman. Do you mean to try to impress upon the Commis- 
 sion the idea that there is a similarity between ^a man employed in 
 constructing a building in the city of New York and a man who leaves 
 his ship in a foreign port? 
 
 Mr. Parsons. No, sir; not in a foreign port; in an American port. 
 
 The Chairman. Take the case of a man^who in an American port 
 leaves his ship tied up? 
 
 Mr. Parsons. It is not tied up. The captain is at liberty to get 
 another crew. 
 
 The Chairman. Oh, yes. 
 
 Mr. Parsons. Just as the employer on shore is at liberty to look 
 for another workman. 
 
 Senator Martin. Your idea is that he ought to be required to bring 
 his ship back to port? 
 
 Mr. Parsons. No, sir; he ought to be permitted to leave in an 
 American port. 
 
 Senator Martin. Suppose a vessel sails from New York to 
 Liverpool. 
 
 Mr. Parsons. That is foreign. 
 
54 HEABINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 SAITLOKS SHOULD HAVE RIGHT TO LEAVE. 
 
 Senator Martin. I know. You do not think the sailor oug^ht to 
 have a right to leave until he get,s his vessel back to New York port? 
 
 Mr. Parsons. Yes, sir; 1 do. 
 
 Senator Martin. Where would he leave? You say he must not 
 leave at Liverpool. 
 
 Mr. Parsons. He might have some reasons for leaving her. 
 
 The Chairman. How would it be if he happened to take a notion to 
 quit work in midocean ? 
 
 Mr. Parsons. That is unreasonable. He has to work there. 
 
 The Chairman. Not at all, according to your argument. 
 
 Mr. Parsons. That is easily overcome by the way the law stands 
 now. No man can refuse duty at sea. 
 
 The Chairman. He can not refuse to remain with his ship when she 
 is in port, can he? 
 
 Mr. Parsons. No; not in a foreign port, according to the law now; 
 but, as I say, even in an American port an American seaman can not 
 leave his ship without forfeiting his wages and his clothing. 
 
 The Chairman. In other words, Mr. Parsons, the law requires him 
 to keep his contract. Is not that about it? 
 
 Mr. Parsons. Yes, sir. 
 
 The Chairman. You want him to have the privilege of violating his 
 contract? 
 
 Mr. Parsons. No, sir; not violating the contract. If the law looked 
 at it in the way I suggest, there would be no violation. It is just the 
 same privilege that any laboring man on shore has. 
 
 The Chairman. We have laws, and some of us believe we ought to 
 observe them. 
 
 Mr. Parsons. I know you have laws. I am giving you my opinion 
 as to why the American boy does not go to sea; that is all. 
 
 THE articles A CONTRACT. 
 
 Senator Mallort. I should like to ask you a question. When a 
 man ships aboard a ship, how does he ship? What is the formula 
 through which he goes to ship? He signs something, does he not? 
 
 Mr. Parsons. He signs the articles. 
 
 Senator Mallort. Whafcarethey; do you know? You have seen 
 some of them, I have no doubt. 
 
 Mr. Parsons. They are supposed to be a contract to complete the 
 voyage. 
 
 Senator Mallort. There is no supposition about it. It is a contract. 
 
 Mr. Parsons. Yes, sir. 
 
 Senator Mallort. Do you know what that contract stipulates as a 
 general rule? 
 
 Mr. 'Parsons. Yes, sir. 
 
 Senator Mallort. What? 
 
 Mr. Parsons. It stipulates as a general rule that a man is going to 
 go to a certain place and come back again; to go whatever way he 
 signs. 
 
 Senator Mali.ort. He may sign for a certain voyage or for a certain 
 length of time. From your remarks I infer that you contend that the 
 law ought to permit him to break that contract at any time he thinks 
 proper and be paid notwithstanding the breaking of the contract? 
 
HEAKINGS BEFOBE THE MEECHANT MARINE COMMISSION. 55 
 
 Mr. Paesons. Be paid for his services rendered. 
 
 Senator Mallobt. Up to the time he quits ? 
 
 Mr. Parsons. Up to that time, he should receive the wages due him. 
 
 Senator Malloet. He may ship for one year, and he may quit in 
 six months, and there may still be due him three months' wages. You 
 think he ought to be allowed to break his contract and get those three 
 months' wages besides? 
 
 Mr. Paesons. I think he ought to be allowed to get paid for the 
 time he rendered service. 
 
 Senator Malloet. Notwithstanding the fact that he breaks his 
 contract? 
 
 Mr. Paesons. Yes, sir; I do. 
 
 Senator Malloet. That is what I want to get at. That is your 
 opinion? 
 
 Mr. Parsons. I certainly do think so. 
 
 WAGES AND THE POET. 
 
 Senator Malloet. Another point has been developed in this hear- 
 ing. You said something about the wages of seamen depending upon 
 the port where they shipped? 
 
 Mr. Paesons. Yes, sir. 
 
 Senator Malloet. What is your experience as to shipping. You 
 shipped in Savannah for London? 
 
 Mr. Paesons. Yes,- sir. 
 
 Senator Malloet. How did you come to ship in Savannah? Please 
 state to the Commission the facts, so that it can understand exactlj^ 
 the method. 
 
 Mr. Paesons. How 1 came to ship in Savannah? I was stranded 
 in Savannah. 
 
 Senator Malloet. I mean the method. Were you shipped through 
 a boarding-house master? 
 
 Mr. Parsons. Yes, sir. 
 
 Senator Malloet. How did you determine on the matter of your 
 wages? 
 
 Mr. Parsons. I think the boarding-house master got about the 
 most of it. 
 
 Senator Mallort. The boarding master got the most of it? 
 
 Mr. Parsons. I guess he did. 
 
 Senator Mallort. How were the wages determined ? What fixed 
 the amount of wages that you were to receive for the voyage? 
 
 Mr. Parsons. I signed for 145 for the run from Savannah to Lon- 
 don. I had $20 advance. That went to the boarding master, and $25 
 was to be paid me when I got to London. 
 
 Senator Malloet. What was the nationality of the ship? 
 
 Mr. Paesons. Norwegian. 
 
 Senator Malloet. Now, suppose, instead of its being a Norwegian 
 ship, it had been an American ship. Would there have been any dif- 
 ference in the wages you would have received for the same voyage? 
 
 Mr. Paesons. No, sir; I do not think so. 
 
 Senator Malloet. You think not. 
 
 Mr. Paesons. No, sir. 
 
 Senator Malloet. From your experience, you say it would be the 
 same? 
 
 Mr. Paesons. Yes, sir. 
 
56 HEABINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Senator Malloet. And the same on a British ship? 
 
 Mr. Paksons. Yes, sir. 
 
 Senator Malloky. In other words, the wages of an ordinary sea- 
 man or of a seaman aboard ship depends upon the wages prevailing at 
 the port where he ships? 
 
 Mr. Parsons. Yes, sir. 
 
 Senator Mallory. And not the nationality of the ship? 
 
 Mr. Parsons. That is right. 
 
 Senator Mallory. Is that your experience and observation ? 
 
 Mr. Parsons. Yes, sir. 
 
 THE sailor's contract. 
 
 Representative Minor. I wish to ask you a question: For instance, a 
 sailor ships aboard a ship here in New York, and agrees to make a trip 
 by the run, as you call it, and when he reaches some other port you 
 think he has a right to quit, if he so desires, and that the ship should 
 pay him for all services rendered by him up to the time he quits? 
 
 Mr. Parsons. Yes, sir. 
 
 Representative Minor. Now, answer me this question: Suppose a 
 sailor ships aboard a vessel here in New York harbor, bound for Mobile 
 and return, and the master has contracted with the sailors to pay them 
 so much for that run to Mobile and return to New York. Do you not 
 think that if the sailor has the right to violate his contract whenever 
 and wherever he has a mind to, the ship ought to have the right to put 
 the sailors off at Mobile? In other words, if a sailor can violate nis 
 contract, why is it not proper and right that the vessel shall have the 
 right to violate its contract? 
 
 Mr. Parsons. In what regard? 
 
 Representative Minor. In this regard: Suppose the vessel goes to 
 Mobile. She finds, after getting there, that a return cargo is not ready. 
 She may have to lie in port two or three weeks. It would be a matter 
 of saving to her to discharge the crew. Do you think she ought to have 
 the right to do it? 
 
 Mr. Parsons. She generally can do it. 
 
 Representative Minor. Do you think it would be right 
 
 Mr. Parsons. Yes, sir. 
 
 Representative Minor. To put them ashore ? 
 
 Mr. Parsons. Yes, sir; they are doing it now, whether it is right or 
 wrong. 
 
 Representative Minor. That is not the question. The question is. 
 Is it right? 
 
 Mr. Parsons. In my opinion the men ought to have the privilege 
 to leave their vessel in any American port and get what is due them. 
 
 Representative Minor. I am not disputing you. I want you to know 
 that I myself have been before the mast. This is not a new question 
 to me. But if the man has that right, the owner of the ship should 
 have the same right; that is all. I want to make that statement to the 
 Commission. 
 
 Mr. Parsons. Well, in my opinion the ship ought to have the right 
 just the same as an employer on shore. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 57 
 
 WAGES IN NORWAY AND AMERICA. 
 
 The Chairman. Could you tell the Commission what the rate of 
 wages would have been had you shipped at a Norwegian port on a 
 Norwegian vessel ? 
 
 Mr. Parsons. So far as I know — that is, so far as the statistics 
 show — it would have been about $20 a month. 
 The Chairman. How would it compare with American wages? 
 Mr. Parsons. What is that? 
 
 The Chairman. How would it compare with American wages? 
 Mr. Parsons. In a Norwegian port? 
 The Chairman. Yes. 
 
 Mr. Parsons. I am not comparing wages in a Norwegian port with 
 an American port. 
 
 The Chairman. We want you to do so. 
 
 Mr. Parsons. The only comparison there is is this: An American 
 port generally pays more than a Norwegian port; that is, in a certain 
 class of vessels. There are other classes of vessels here in American 
 ports which they have not got in Norwegian ports which pay less, like 
 the barges. 
 
 Representative Minor. You say a certain class of vessels pay higher 
 wages in America. Why is that? 
 
 Mr. Parsons. Because they are looking for competent men. They 
 want competent seamen. They can not very well do without compe- 
 tent seamen. They can not. 
 
 Representative Minor. Do you think the American wage has any- 
 thing to do with it? Is it because vessels shipping crews here in New 
 York are paying more than they are in Norway ? Are they not paying 
 higher wages here ? 
 
 Mr. Parsons. They are paying a little higher wages here in the city 
 of New York than they are in Norwegian ports. 
 
 Representative Minor. That is because American wages are higher? 
 
 Mr. Parsons. They are two different countries. 
 
 Representative Minor. Be frank about it. My sympathies are with 
 you to a large extent, but we want the facts here without any preju- 
 dice. 
 
 Mr. Parsons. The American vessel is paying a few dollars more 
 than any other nationality as regards European countries, but they are 
 two different countries. That is the way 1 look at it. 
 
 Representative Minor. If an American ship were in some port in 
 England, suppose, and wanted a crew, would she have to pay higher 
 wages there than an English ship? 
 
 Mr. Parsons. I do not think so. She would get them for the same 
 wages. She would get them for the standing wages at the port. 
 
 Representative Minor. You think the flag makes no difference? 
 
 Mr. Parsons. It makes no difference whatever, in my opinion. 
 
 Representative Minor. That is not the experience of a good many 
 men. 
 
 Mr. Parsons. It has been my experience. 
 
 Senator Mallort. You have mentioned here two points where 
 you think the law relating to merchant seamen can be improved — one 
 relating to the barge business and the other relating to the right which 
 you think the sailor ought to have to be discharged at ah American 
 
58 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 port before the end of his voyage, really. Is there any other sug- 
 gestion you have to make relative to improving the condition of the 
 American sailor? 
 
 CROWDED rOEECASTLES COMPLAINED OF. 
 
 Mr. Paesons. Here is another — the small forecastle. A good many 
 men complain of the small forecastle. It turns them right back. The 
 sailor goes on shore. I have that complaint nearly every week. I 
 ask a man, "Why did you leave the vessel," and he says, "My God, 
 I could not live in the forecastle. I could not turn myself around in 
 it." According to the law, a man is allowed 6 feet long, 2 feet 8 
 inches wide, and 6 feet 3 inches high. It is larger than a coffin, but 
 smaller than a grave. 
 
 Senator Malloet. You think that is not large enough ? 
 
 Mr. Parsons. No, sir. I have been on board a vessel when in a 
 squall I had to get my clothes out and put them on in the run. 
 
 Senator Malloet. What kind of a vessel? 
 
 Mr. Parsons. An American vessel; an American schooner on this 
 coast. 
 
 Senator Malloey. Engaged in the coastwise commerce? 
 
 Mr. Parsons. A three-masted schooner; three masted and four 
 masted. 
 
 Senator Mallort. You think then that the regulations relating to 
 the amount of space in the forecastle should be enlarged? 
 
 Mr. Parsons. Yes, sir; 1 certainly do. 
 
 Senator Mallort. Are there any other suggestions you wish to 
 make? 
 
 Mr. Parsons. No, sir. 
 
 Representative Minoe. What was the name of the vessel to which 
 you have referred? 
 
 Mr. Paesons. The William Downs is the name of one, and I can 
 name several of them. I have not got them right here now. I can 
 name several. I should like the Commission to go aboard some of 
 these American vessels and judge for yourselves in regard to the fore- 
 castle. 
 
 Representative Minor. A good suggestion, Mr. Parsons. I wish 
 to ask you a question. 1 am not entirely conversant with the accom- 
 modations for the crew on the Atlantic. 1 am better informed as to 
 the Lakes. Are your quarters below the deck? 
 
 Mr. Paesons. In some vessels they are. 
 
 Representative Minoe. The forecastle? 
 
 Mr. Parsons. Yes, sir. 
 
 Representative Minor. Would it work any great hardship to the 
 owner of the vessel if the space for each man was increased? 
 
 as to undermanning. 
 
 Mr. Parsons. Not in my opinion. I have here a statement showing 
 the losses of merchant vessels of the United States in the year 1903, 
 from the Bureau of Navigation, Department of Commerce and Labor. 
 It shows that there is no system of manning vessels, and in a good 
 many instances that is why the vessels were lost. They were under- 
 manned and could not be taken care of. For instance, when they have 
 
HEAEINGS BEFORE THE MERCHANT MARINE COMMISSION. 59 
 
 a storm, and the men are at work for three or four days at a time, 
 they are actually played out and can not do any more, and the vessel 
 is right at the mercy of the wind and weather. 
 
 The Chairman. How does it happen that the self-interest of the 
 owner does not prompt him to take every possible precaution for the 
 safety of his vessel? 
 
 Mr. Parsons. 1 will state that the owner is trying to run his vessel 
 as cheaply as he possibly can. 
 
 The Chairman. Yes; but if he is losing his vessels to the extent 
 you suggest, it would seem as though he would use the ordinary pre- 
 cautions to save them from destruction. 
 
 Mr. Parsons. That'is right enough, but as I say, in vessels around 
 here, he will just run them as cheaply as possible, and even get men 
 who are not competent. I know of several vessels in this port to-day, 
 and I can go right on board of them, having such men, and if you 
 send them up aloft, they do not know how to do the work. If you 
 ask them to box the compass, they can not do it. There is a vessel 
 over here, which has two men and two boys, 16 or 18, and they never 
 saw a vessel before. 
 
 Representative Minor. How large is she? 
 
 Mr. Parsons. Somewhere around 400 tons; a three-masted schooner. 
 
 Representative Minor. Would she undertake to go outside with 
 that crew ? 
 
 Mr. Parsons. She had them on the last trip. 
 
 Representative Minor. And that is all she had? 
 
 Mr. Parsons. That is all I know of. I saw them when they got in 
 here. 
 
 Representative Minor. What is she — a f ore-and-af ter ? 
 
 Mr. Parsons. Yes, sir. 
 
 Representative Minor. And you says she carries two boys ? 
 
 Mr. Parsons. Yes, sir. 
 
 Representative Minor. They must be good boys or they never would 
 have got the sails up. 
 
 Mr. Parsons. There were two men with them. I did not say what 
 kind of men. 
 
 Representative Minor. That made four instead of two. 
 
 Mr. Parsons. The full complement was four. I was referring to 
 the boys. There are a good many of them the same way; actually all 
 the work comes just on one or two men. 
 
 UNSEA WORTHY BARGES. 
 
 Representative Minor. Is it not a fact that some old, worn out 
 schooners are converted into tow barges ? 
 
 Mr. Parsons. Yes, sir. 
 
 Representative Minor. They have got so rotten that they can not 
 stand the pressure of canvas, and they are shortened; cut down. 
 
 Mr. Parsons. I do not think I know of over ten that have been 
 worked that way. 
 
 Representative Minor. Are they built especially for barges ? 
 
 Mr. Parsons. Some are and others are big square-rigged ships cut 
 down. 
 
 Representative Minor. That is what I mean. 
 
60 HEARINGS BBI'ORE THE MERCHANT MARINE COMMISSION. 
 
 Mr. Paksons. But when they rig them up and get the lower sails 
 on them, there is not enough canvas to handle them. 
 
 Representative Mince. Would you suggest a rigid system of 
 inspection? 
 
 Mr. Paksons. Yes, sir. 
 
 Kepresentative Minor. I think I would, too. 
 
 The Chaieman. Can you give the Commission the names of any of 
 the vessels that have inadequate forecastles, as you have stated? 
 
 Mr. Parsons. Yes, sir. There is the Sarah Ann Lucy, the Fanny 
 Stewart. There are several more, but I can not think of them just 
 now. 
 
 The Chairman. If you think of them, will you hand their names to 
 the stenographer? 
 
 Mr. Parsons. Yes, sir; I will hand them in. 
 
 inadequate ceews. 
 
 I should like to compare a few vessels here to show that there is no 
 system of manning of vessels at all. They can just sail with any com- 
 plement of men that the captain sees fit. If they had a system of 
 manning the vessels would be very much safer for life and property. 
 
 Representative Minor. Is it not a fact that there may be two sail 
 vessels of 1,000 tons measurement, and one may be old and obsolete, 
 without donkeys aboard, and the other may have a donkey aboard to 
 do the heavy work, heaving up the anchor, etc., and will not the ves- 
 sel with the donkey require a less number of men than the one without 
 steam ? 
 
 Mr. Parsons. Yes, several of them, but there is hardly a vessel on 
 this coast of a thousand tons without a donkey. ' 
 
 Representative Minor. You do not want to compare the vessel with 
 steam aboard with one having no steam. 
 
 Mr. Parsons. Mostly all the vessels over 500 tons have either a gaso- 
 line donkey or a steam donkey. 
 
 Representative Minor. You say that on vessels of a thousand tons 
 having power for doing the work the crews vary ? 
 
 Mr. Parsons. Yes, sir. 
 
 Representative Minoe. How small a crew do they carry? How many 
 men before the mast are required on a vessel measuring a thousand tons ? 
 
 Mr. Parsons. Some carry four and some carry five. According to 
 the statistics here, some carry seven and eight. 
 
 Representative Minor. It depends somewhat on the rig? 
 
 Mr. Parsons. I do not know. In my opinion it does not depend on 
 the rig at all. It is all alike rigging; it is just the same work on one 
 as another. 
 
 Representative Minor. Not quite. 
 
 Mr. Parsons. The steam donkey generally breaks down, and you 
 have to do the work by hand, and when a storm blows up you can not 
 take in sail by steam. 
 
 Representative Minor. You people are favorable to a manning bill ? 
 
 Mr. Parsons. Yes, sir. 
 
 LABOR AS WELL AS CAPITOL. 
 
 Representative Minor. I have had to do with it. It really does not 
 touch this question, but I am very glad to hear these suggestions from 
 you. You are just the kind of men we are trying to reach. You peo- 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 61 
 
 pie must understand that this Commission is here, as it will be in other 
 places, to reach not only the owner of the ship and the builder of the 
 ship, but we want to reach the captains and engineers and the common 
 sailor. 
 
 Mr. Paesons. That is right. 
 
 Kepresentative Minor. If we can not frame a bill which will meet 
 somewhat the demands of labor and improve somewhat labor conditions 
 and make it an inducement for American boys to go to sea, it will be 
 useless. We want you to feel perfectly free to come here, because we 
 are in the interest of labor just as much as of capital. We are all 
 American citizens, and that is our duty here. 
 
 Mr. Parsons. Our object is to get the American boy to go to sea 
 and to stay there. I met the other day an old sailor, a shipmate of 
 mine. He has been going to sea all his life. He is forty years of age. 
 He started ashore eight weeks ago. I asked him why he knocked off. 
 He said "1 earned twenty-six dollars and some cents for one week, 
 and I would not earn that in a month at sea." 
 
 Representative Minor. It is a glorious country where a man can do 
 that. 
 
 Mr. Parsons. That is what it is. 
 
 STATEMENT OF FRANK A. HOTJGHTON. 
 
 Frank A. Houghton appeared before the Commission. 
 
 The Chairman. Mr. Houghton, you may make your statement in 
 your own way. 
 
 Mr. Houghton. I did not come here prepared for any special talk, 
 but I will take my cue from the statement Mr. Parsons has made. 
 One of the most important things in regard to barges he has omitted, 
 and that is about tne other vessels. What about the sailing vessels 
 that have to encounter these long tows of barges, some of them nearly 
 a mile long, towing, with a steamer ahead, four and five barges ? And 
 on a dark night, when you can hardly see one thing from another, a 
 sailing vessel encounters a lot of these barges going this way and the 
 other way. It is just as Mr. Parsons says, you have the report as 
 to the number of barges that were lost; but what about the many 
 schooners and other vessels that are lost of which you never hear any- 
 thing? She sails and after a month or so is reported missing. You 
 do not know what has become of her or the crew. They have gone 
 down to the bottom. 
 
 PERIL of long tows. 
 
 You will understand that from boyhood I have been brought up 
 at sea step by step — boy, and ordinary seaman, seaman, and master, 
 commanding sailing vessels and steamers. I have been through the 
 whole thing, from the beginning to the end. It seems to me if the law 
 is aiming at the protection of lives and property, and if the lawmakers 
 have the power to say to me I shall burn a red light on this side and a 
 green light on the other to avoid collision, they also have the power 
 to limit the length of these tows. On a dark night or in thick, foggy 
 weather a steamer a mile ahead blows one long whistle and two short 
 ones, as provided by law; but you have no possible way of telling how 
 long the tow is. The vessel tries to keep clear of one barge and another 
 strikes her and she goes down. The instances are too numerous to 
 
62 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 mention. If I were to draw up a paper asking either that the tows 
 be limited to two barges, or if that is unconstitutional, that they be 
 limited to a certain length, and ask every shipmaster and every ship- 
 owner and every insurance agent in the United States to sign it, there 
 is not a man connected with tne merchant marine (excepting the barge 
 owners) who would not sign it, because they all recognize the danger. 
 The insurance companies do, inasmuch as they will insure but two 
 barges. 
 
 That is all right so far as property interests are concerned, but what 
 about the people aboard them? What about the people who on a 
 dark night have to contend with the long tows going up and down the 
 coast? If there is a collision and a few sailors go to the bottom, what 
 about it? As long as the vessel is insured, that is all there is to it. 
 
 SWEEP AWAY BtJOTS. 
 
 Senator Lodge. Is it not also true that these very long tows fre- 
 quently sweep away buoj^s and marks? 
 
 Mr. Houghton. Yes, sir. In crossing inland seas and waters I 
 "think they ought to be compelled to shorten their hawsers to a certain 
 length. The other day a schoonei- — the Levi Hart — was going over 
 Nantucket Shoals. The captain got as near the shoal water as was 
 possible, to try and keep clear of a tow, but was struck by one of the 
 barges and in thirty seconds the vessel went down to the bottom. 
 These tows are so long that sailing vessels have no chance. There is 
 no reason why they should not shorten the hawser to a certain length. 
 
 Senator Lodge. I had in mind just that region, with which I am 
 familiar. I know that the tows carry awa}' the buoys and the marlcs. 
 The aids to navigation are carried away by these long tows, and are 
 frequently destroyed. 
 
 Mr. Houghton. Yes, sir. Picture it, then, on a foggy night, when 
 you can not see a thing. A towboat is along ahead. The law pre- 
 scribes one long and two short blasts, indicating that she has a tow. 
 It does not say anything about the length of the tow. You do not 
 know whether the tow is 300 feet long or 6,000. I have repeatedly 
 seen tows on this coast 6,000 feet long. Take a vessel when it encoun- 
 ters a lot of these tows. The captain does not know what to do. If 
 he makes a mistake, there is a collision, and the vessel or the barge 
 goes to the bottom. Four or five weeks afterwards it is reported that 
 a vessel was lost. You do not know what has become of her. She 
 has gone to the bottom. 
 
 should be eegiilated. 
 
 It seems to me when there is a law providing for the prevention of 
 collisions at sea, regulating the lights and all that sort of thing, there 
 ought to be some law regulating the length of tows. If there is an 
 accident on a railroad here in the city of New York — if the New York 
 Central has a collision — the authorities take it up; there is an investi- 
 gation, and if the railroad is at fault it is held to responsibility, and 
 there are laws made to prevent such collisions. 
 
 I am not talking about it from the shipowners' standpoint. I am 
 talking about it from the sailors' point. iThe men aboard those ships 
 have not a ghost of a chance for their lives, going up and down the 
 
HEARINGS BBFOBE THE MERCHANT MARINE COMMISSION. 63 
 
 coast with these fleets of tows strung out to any length they see fit to 
 tow them. 1 am not saying anything against the people who own the 
 towboats, but what about the risk run by the vessels and the men on 
 board which encounter them 1 
 
 Senator Malloet. Why do they extend the tows such great dis- 
 tances? 
 
 Mr. Houghton. It is easier to tow them. They have a towboat 
 which is 150 feet long; each barge is 200 feet. They usually put them 
 about 200 fathoms apart, which makes 6,700 feet, or over a mile. 
 
 Kepresentative Minor. Is it not due to the fact that the longer the 
 line the easier it is to tow ? 
 
 Mr. Houghton. That is it, but the length of hawser has nothing to 
 do with the mmiber of barges towed. 
 
 shortkning the towline. 
 
 Representative Minor. You could not shorten iip the towline m a 
 seaway, but where you are protected, you can. Have you not any 
 rules here in the harbor of New York about shortening the line? 
 
 Mr. Houghton. If there is any such rule, I have never heard of it. 
 There is nothing laid down in the rules of the road which compels a 
 man to use either a long or a short hawser. 
 
 Representative Minor. I am not quite sure, but it seems to me the 
 Secretary of the Treasury would have the right to regulate it in 
 harbors. 
 
 Mr. Houghton. Thereis just as much danger on this coast with tows 
 5,700 feet long, and more danger than when you get on an inland sea. 
 
 Representative Minor. I doubt it. I think there is more danger to 
 life and property with short towlines than if they are long. It is 
 easier on the line, and there is less breaking away of the tows. 
 
 Mr. Houghton. That is true so far as the barge, is concerned, but 
 what about the sailing vessel that has to beat and tack and which 
 comes in contact with these tows, and does not know whether the tow 
 has one barge or two "barges or three barges? Long hawsers can be 
 used on two barges only and be safer for the barges and also the pass- 
 ing vessels than when four are towed. 
 
 Representative Minor. The law requires that the steamer shall go 
 out of the way of the sailing vessel, and so as to the tugboat. 
 
 The Chairman. It has been suggested to me that no case ever 
 occurred where four barges weie towed from Norfolk to this city. 
 
 Mr. Houghton. I can swear on oath that I nave seen it not once, 
 but a hundred times, and not only that, but I have seen five barges 
 towed together; and these statements I am ready to verify. 
 
 The Chairman. What about the question as to American seamen 
 and wages ? That is what we are required to inquire into more par- 
 ticularly than the matters you have been discussing. 
 
 Mr. Houghton. On what particular point? 
 
 The Chairman. As to the comfort of American seamen. 
 
 AMERICAN SEAMEN ARE MOST COMFORTABLE. 
 
 Mr. Houghton. I think American seamen are better protected than 
 any other seamen in the world, so far as comfort is concerned. 
 Senator Lodge. How about the wages? 
 
64 HEARINGS BEFORE THE MERCHANT MARINE . COMMISSION. 
 
 Mr. Houghton. 1 think the wages are always a little higher here. 
 The wages of a foreign-going ship depends upon what port she ships 
 her men in. 
 
 Senator Lodge. They usuallj' ship them in their own ports. 
 
 Mr. Houghton. If you ship men here in an English ship or an 
 American ship, you practically pay the same wages. 
 
 Senator Lodge. The Englisn ship generally ships her men in 
 England. 
 
 Mr. Houghton. Invariably she does. But sometimes when the 
 men leave and they are compelled to ship men here, they are obliged 
 to pay American wages. 
 
 Senator Maktin. Your experience is that it depends upon the port 
 and not upon the nationality of the ship ? 
 
 Mr. Houghton. Very largely it does. However, there are certain 
 exceptions. 
 
 Senator Martin. What are they ? 
 
 Mr. Houghton. Take, for instance, some of these Nova Scotia ves- 
 sels. The men will all come from one port, and they will keep 
 together, and the vessel will get them for a little less money than they 
 could get outside men. 
 
 The Chairman. How many years were you at sea? 
 
 Mr. Houghton. About nineteen years. 
 
 The Chairman. Have you any suggestions to make, because of the 
 experience you gained as a seaman, on the question of additional legis- 
 lation in behalf of American seamen? Have you any grievances? 
 
 Mr. Houghton. None at all. I think the American sailor, the 
 common man who starts out in an American ship, takes the same 
 chances that anybody else does. If he has the ability and shows him- 
 self bright and smart, he is pretty apt to get along. 
 
 Senator Malloet. By " getting along," you mean rising? 
 
 Mr. Houghton. Yes, sir. 
 
 Senator Mallory. Be promoted? 
 
 Mr. Houghton. Yes, sir. I have found that American seamen, 
 that is, young men who start in at that profession, either do get along 
 or else they quit the profession. 
 
 Senator Mallory. Did you hear Mr. Parson's testimony ? 
 
 Mr. Houghton. I did. 
 
 Senator Mallory. You heard him make the statement about the 
 accommodations in the forecastle for the men? 
 
 Mr. Houghton. Yes, sir. 
 
 Senator Mallory. What has been your experience? I suppose you 
 have served on three-masted schooners ? 
 
 Mr. Houghton. I have been on all rigs afloat. 
 
 Senator Mallory. What is your observation as to the accommo- 
 dations? 
 
 AMERICAN ACCOMMODATIONS BEST IN THE WORLD. 
 
 Mr. Houghton. My experience is that on three and four masted 
 schooners, in fact on all American vessels, the men are treated better 
 and they have better accommodations right straight through than on 
 anything that floats on salt water. 
 
 Senator Mallory. In 1897 Congress passed an act which provided 
 that vessels built or rebuilt after June 30, 1898, "shall have a space 
 of not less than one hundred cubic feet and not less than 16 square 
 
HEABING8 BEFOEE THE MEECHANT MARINE COMMISSION. 65 
 
 feet, measured on the deck or floor of that space for each seaman or 
 apprentice lodged therein." Do you think that is sujEcient? 
 
 Mr. Houghton. 1 think you will invariably find that the accommo- 
 dations on an American schooner are much larger than that. 
 
 Senator Malloet. As a rule they are much larger? 
 
 Mr. Houghton. As a rule they are much larger. Most of the 
 modern schooners are equipped with steam heat and with a steam 
 engine that does one-half the work. It lifts the anchor and does 
 everything practically that is heavy. 
 
 Senator Mallort. Still there are yet in existence a good many old 
 three-masted schooners. 
 
 Mr. Houghton. Yes, sir; of the smaller type. 
 
 Senator Malloey. How are they equipped for sleeping space for 
 the men in the forecastle? 
 
 Mr. Houghton. I think the modern schooner is much better equip- 
 ped than the old ones. 
 
 Senator Malloey. I have been aboard some which I thought were 
 very ample. 
 
 Mr. Houghton. I can take you aboard some on which I do not think 
 anybody would be ashamed to sleep, even in the forecastle. 
 
 I spoke of the barge question only because Mr. Parsons had brought 
 it up, and I thought perhaps if you entertained any statement from 
 him as regards one side, it was perfectly fair to put in the other side, 
 because there is a greater risk to sailing vessels and their crews encoun- 
 tering those barges than there is to seamen on the barges themselves. 
 
 AS TO the sailors' conteact. 
 
 The Chaieman. As a practical sailor and shipmaster, what have you 
 to say with respect to the complaint which Mr. Parsons made that 
 sailors are not allowed to quit work on shipboard as they are on shore. 
 
 Mr. Houghton. I think, so far as that is concerned, it is a matter 
 of agreement. If a sailor ships here in New York to go to Mobile 
 and when he gets to Mobile he finds that the wages there are $5 more 
 a month, he wants to leave. But if he finds them $5 less, he does not 
 want to leave. If it is going to be a one-sided thing, it is not exactly 
 fair. There should be two sides, and I say, as a master of a ship, that 
 if when I get to Mobile I find that wages are less, I ought to have the 
 privilege to tell the sailor to go ashore. 
 
 The Chaieman. If he is to have a right to violate his contract you 
 ought to have a similar right. 
 
 Mr. Houghton. Yes, sir; and if he makes a contract with me to go 
 from here to Mobile and take his chances he should keep his contract, 
 as I should. 
 
 In the port of New York there are no sailors shipping who do not 
 thoroughly know just what they are doing. The law is laid down 
 pretty plainly, and I must say that at the present date they have it 
 pretty much their own way. As far as concerns the treatment of 
 sailors, the American sailors are better fed and they are better paid 
 and they have more consideration from the Government than any 
 others. American seamen have better accommodations and in every 
 way are far better off than the same class of people in other countries. 
 
 Representative McDeemott. When you speak of them you speak of 
 a class in which you do not include yourself* 
 3a— 04 5 
 
66 HEAEING8 BBFOEE THE MERCHANT MARINE COMMISSION. 
 
 Mr. Houghton. When I speak of a seaman, I mean from the cap- 
 tain down to the cabin boy. 
 
 Representative McDbkmott. How is it when you say "they" are 
 better paid and have better accommodations? 
 
 Mr. Houghton. 1 was speaking of seamen as a class. 
 
 Representative MgDekmott. You were speaking of a class in which 
 you do not include yourself? 
 
 Mr. Houghton. No, sir; I was not, because it is a well-known fact 
 that American shipmasters are better paid than any others. 
 
 Representative MgDekmott? What is your relation to them? Are 
 you an employer? 
 
 Mr. Houghton. I have been both. 
 
 Representative MoDeemott. Are you now ? 
 
 Mr. Houghton. No, sir. 
 
 Representative McDeemott. What are you now ? 
 
 Mr. Houghton. 1 am connected with the Townsend-Downey Ship- 
 building Compan3^ 
 
 Representative MgDekmott. You are not a sailor? 
 
 Mr. Houghton. I have given it up. 
 
 Representative MgDekmott. Are you connected with those who 
 employ sailors ? 
 
 Mr. Houghton. No, sir. 1 am connected with those who build 
 ships. I spent nineteen or twenty years on the sea from boyhood up, 
 and commanded all kinds of craft. 
 
 AMERICAN AND ENGLISH WAGES. 
 
 Repsesentative MgDekmott. Take any ship employing a considera- 
 ble number of men, and, in j'our own way, give us in detail the differ- 
 ence between the cost of manning and officering that ship under the 
 American flag and a similar one under the English flag. 
 
 Mr. Houghton. I should have to do that with a qualification. It 
 would depend altogether from what port I shipped the men. 
 
 Representative MgDekmott. Ship from Liverpool under the Eng- 
 lish flag, and from New York under the American flag. 
 
 Mr. Houghton. I will make a comparison of two ships shipping in 
 the port of New York. 
 
 Senator Mallort. Are you speaking of a sailing vessel or a steam- 
 ship? 
 
 Mr. Houghton. Of a sailing vessel. You would have to pay the 
 master more in the American ship. 
 
 Representative MgDekmott. How much? 
 
 Mr. Houghton. That depends altogether, I may say, on the gener- 
 osity of the owners and the man's ability. The wages are different. 
 Some are paid $75 or |80 a month, and some are paid fl50. 
 
 Representative MgDekmott. It depends upon the personnel of the 
 men in both cases ? 
 
 Mr. Houghton. It does; and it depends a good deal on the ship. 
 Then, so far as the mates are concerned, you have to pay the chief 
 officer a little more, and the second officer a little more. 
 
 Representative McDeemott. Is there not a schedule of wages as to 
 those officers in Liverpool and New York? 
 
 Mr. Houghton. No, sir. As an illustration, if I was master of a 
 ship and wanted a mate, I would willingly give a first-class man |5 
 
HEARINGS BBFOBE THE MERCHANT MARINE COMMISSION. 67 
 
 more a month than an incompetent one. A man's ability to a large 
 extent governs his wages. 
 
 When you get down to seamen, those two xships here in New York 
 would pay identically the same wages. If I was in Liverpool in an 
 American ship and wanted to ship a crew just along the same lines 
 that the English do, I would get my men just as cheaply. This ques- 
 tion of wages only applies to American and English ships, but does 
 not touch French, Italian, or Norwegian ships, as all such vessels 
 are manned at a very much less rate of wages than either American or 
 English. 
 
 Representative McDermott. Is it true that if I have a ship flying 
 the American flag in Liverpool and ship ray crew there, my employees 
 would receive more than the English would pay ? 
 
 Mr. Houghton. No, sir; if you limit it to the sailors only. 
 
 Representative McDeemott. Take a ship of 400 tons burden. How 
 many officers will she have ? 
 
 Mr. Houghton. Four hundred tons? It depends a great deal on 
 the rig of the ship. 
 
 Representative MoDeemott. Take any rig as an illustration. 
 
 Mr. Houghton. If it was a square-rigged vessel — that is, a bark or 
 something of that sort — you would have a captain and two officers. 
 
 Representative McDEiiMOTT. Now, take a captain of equal capacity, 
 sailing from Liverpool to New York and returning to Liverpool as the 
 home port, how would his wages compare with those paid to a captain 
 sailing on a similar ship from New York to Liverpool and returning 
 to New York as the home port? 
 
 Representative Minor. It depends upon the nationality of the 
 captain. 
 
 Representative McDeemott. Take an American on this side and an 
 Englishman on the other side. 
 
 Mr. Houghton. The position of the vessel — that is, the location of 
 the ship when the men are engaged — makes very little difference so far 
 as the master and officers are concerned. It makes a difference only 
 in the seamen. 
 
 Representative McDermott. Then it costs as much to man one ship 
 as the other. An English ship sailing from Liverpool to New York, 
 requiring the same equipment of men that would be required by a ship 
 from New York to Liverpool, would have about the same paj'^ roll ? 
 
 Mr. Houghton. So far as the captain and officers are concerned, if 
 under the same flag. 
 
 Representative McDeemott. If shipped under different flags, how 
 then? 
 
 Mr. Houghton. In the pay of the captain and officers ? 
 
 Representative McDermott. Yes; now much difference would 
 there be ? 
 
 Mr. Houghton. It depends on the ship. 
 
 Representative McDeemott. Take any ship, 
 
 Mr. Houghton. There would be a difference probably in the two 
 men of $50 or $75 a month, or in the three, say, f 100. 
 
 Representative McDeemott. In the captain's pay ? 
 
 Mr. Houghton. The captain and officers combined. 
 
 Representative McDeemott. Now, what as to the crew ? 
 
 Mr. Houghton. There would be no difference in the crew at all if 
 they were shipped here. 
 
68 HEAEINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Representative MoDeemott. If you ship here and the English .ves- 
 sel ships in Liverpool, would there be any difference? 
 Mr. Houghton. If what? 
 
 A VERT MARKED DIFFEEENOE. 
 
 Representative McDeemott. If the American ship ships its crew 
 in New York and the English ship ships its crew in Liverpool, would 
 there be any difference in the total pay roll for the crew? 
 
 Mr. Houghton. Oh, yes; the difference would be very marked. 
 
 Representative MoDeemott. What? 
 
 Mr. Houghton. At times it would be double; for instance, when 
 sometimes wages in Liverpool are two pounds ten a month, I have 
 seen them here $25. 
 
 Representative MoDeemott. How do you account for that differ- 
 ence f 
 
 Mr. Houghton. The association which regulates seamen's wages in 
 New York simply says the wages are so much, and if you do not pay 
 them you can not get the men. It is a sort of a trust. 
 
 Representative MoDeemott. Are not wages on the other side gov- 
 erned similarly? 
 
 Mr. Houghton. I think the wages on the other side are governed 
 more by the number of men ashore. 
 
 Representative McDermott. According to the law of supply and 
 demand? 
 
 Mr. Houghton. Yes, sir. The boarding house gets a lot of men in 
 the house, and it wants to get rid of them. That gradually brings the 
 wages down. If the men are scarce, up go the wages. 
 
 Representative MoDeemott. You say, in the total equipment of a 
 ship, it would make a difference of how much? I mean under ordi- 
 nary conditions. 
 
 Mr. Houghton. In wages? 
 
 Representative MoDeemott. Yes. 
 
 Mr. Houghton. It you refer to a sailing ship, I should say it would 
 make a difference of f 100 a month. 
 
 Representative MoDeemott. That will include officers and crew? 
 
 Mr. Houghton. Just simply the captain and officers. 
 
 Representative McDeemott. How much for the crew ? 
 
 Mr. Houghton. I can not saj^ that there is any difference in the 
 crew when both crews are shipped in the same place. 
 
 Representative Minoe. Suppose one crew was shipped in New York 
 and the other in Liverpool? 
 
 Mr. Houghton. That is a hard thing to compute unless you know 
 how many men there are on the ship. 
 
 Representative Minoe. Take it for granted that the vessels are the 
 same size and have the same number in the crew. 
 
 Mr. Houghton. If you ship a crew in England and a crew in the 
 United States, there is always a difference of 25 or 30 per cent in their 
 wages. 
 
 Representative McDeemott. And |100 in the officers' pay ? 
 
 Mr. Houghton. Yes, sir; 1100 in the captain's and officers' pay 
 combined. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 69 
 
 STATEMENT OF LOUIS LAVERGE. 
 
 Louis Laverge appeared before the Commission. 
 
 The Chairman. Mr. Laverge, have you sailed in both American 
 and foreign ships? 
 
 Mr. Laverge. Yes, sir. 
 
 The Chairman. Kindly give the Commission the benefit of your 
 experience as a sailor and shipmaster. Were you a sailor at one time ^ 
 
 Mr. Laverge. Yes, sir. 
 
 The Chairman. And a shipmaster now? 
 
 Mr. Laverge. Yes, sir. 
 
 When I started, Mr. Chairman, I was about 12 years old, on English 
 cutters. I started running from Havre to Jersey and Jersey to 
 Cardiff. At that time the boy was doing the biggest part of the 
 work, 1 thought; had to do the cooking and everything. Then I went 
 on French ships, and anybody who knows anything about French ships 
 knows that then the men did not get much. Talk about quarters on 
 American ships! It was something different on French ships. We 
 had to sleep in hammocks in a forecastle that would leak. 
 
 As to wages, I started as a boy for 10 francs a month; that is $2. 
 Not only on French ships but on Norwegian and Swedish ships boys 
 do not get any more. I know sailors on Norwegian and Swedish ships 
 who get $7 a month; the mate and chief oiEcer, $16 a month. Then I 
 know about wages on English ships. W^e all know that the English 
 ships pay more wages than the others; more than the French or the 
 German. Of late the French ships have gone a little higher. First- 
 class sailors will get 90 francs; that is about fl9. 
 
 I can not speak much in public 
 
 Representative Minor. Go right ahead. 
 
 SHIPS will BRIN(4 SAIIXJRS. 
 
 Mr. Laverge. I want to say that in my opinion you can not force a 
 boy to go to sea if he does not want to. There have been no ships in 
 this country. There is no country in the world, in my opinion, that 
 can give a better chance to a boy in the merchant marine than this 
 covmtry can. I should say I belong here. I have been here thirty 
 years now. When we have the ships here you will find that the boys 
 will go to sea. There are better sailors in this country than I am, a 
 great deal, but there is nobody who feels the way I do at seeing the 
 way the American merchant marine has gone down. I used to sail, 
 when I first went on American ships, from Mobile to Europe, to Eng- 
 land, to Liverpool, and sometimes to the North Sea, and you would see 
 Arnerican ships. I know ships are now larger and the steam does it 
 entirely. There is no need of all those small sailing ships. W^e thought 
 a ship carrying se\'eral thousand bales of cotton was a monster. 
 
 When we have the ships you will find the sailors. Suppose 1 start 
 to go to sea — born American, 1 will say. I am a hustler. I will do 
 all I can to get ahead. I get up, and by and by I get a license for 
 second mate. That is for a steamboat. With that license 1 have to 
 work one year as second mate. Now, there is hardly a company in 
 New York that will give a boy or a young fellow with a license for 
 second mate a job as second mate. He will not get a job as second 
 
70 HEAEINGS BEFOEE THE MERCHANT MABINE COMMISSION. 
 
 mate. He will get a job as third mate. When he comes to get a raise 
 in his license, he is asked, " Have you been acting a year on this license ?" 
 He says, "No; 1 can not get a second mate's ]ob." They say, "You 
 have to work one year on it." He has to wait. 
 
 The owners, unless they know him well, want a man who has a 
 master's license to go as second mate. If he has a license, and if he 
 is lucky enough, he may get a ship. But to-day there are no ships. 
 In the Englisn merchant marine a man with a license can get on a 
 ship and then get on another. In this country it is impossible. I 
 have never been out of employment for a long time. 1 am going to 
 sea now. I am master of an American ship built in the United States, 
 but hauled up here for want of business. 
 
 AMERICAN FARE AND TREATMENT. 
 
 On American ships we can not come up to the English ships. Not 
 long ago I was in Tampico. There were three or four English ships 
 there; steamships. Talk about the treatment of sailors! I had to do 
 with the same butcher and the same ship chandler that those English 
 boats had. There was some diflference in the bills for provisions. 
 The Englishman would come up and get about ten or fifteen pounds 
 of fresh meat. He would feed the sailors on salt meat and bread, etc. 
 I had to buy as much as thirteen or fourteen dollars' worth of meat, 
 perhaps more, while this man was spending about |3. 
 
 Talk about leaving sailors in port! This man, if his sailors disa- 
 gree with him, or anything, can go to his consul. The consul would 
 take the man off and put him in jail. My men would not be afraid. 
 In every way jou can think of the Americans are better off. In one 
 place we had to furnish everybody with ice. On an English ship they 
 never see ice — I mean the sailors — and very seldom do the officers. 
 
 The Chairman. I judge from what you have said that in your opin- 
 ion the American sailor is considerably better off than sailors on 
 foreign ships ? 
 
 Mr. Laverge. Yes, sir; undoubtedly. 
 
 The Chairman. So far as concerns their comfort? 
 
 Mr. Laverge. Yes, sir. 
 
 I was before the mast eight years. I signed articles for fifteen 
 years before I could get to be master. I never had an3'thing to do 
 with boarding houses. I think a boy who behaves himseff need not go 
 to the boarding houses. J got it pretty tough, but when a boy is young 
 he can stand a lot of kicks. The trouble in this country is simpty that 
 there are no ships. 
 
 In regard to giving encouragement to join ships, you will never do 
 it unless there is some prospect of a young fellow getting something 
 after he grows up. 
 
 The Chairman. Were you born abroad? 
 
 Mr. Laverge. I was born in France, but I have been living in the 
 State of Maine since 1874, among a whole lot of sailors. In fact, they 
 are all sailors — not now, because the ships went out of existence. 
 
 The Chairman. Have you any suggestions to make to the Commis- 
 sion for improving, by statute law, the condition of the American 
 sailor? Do any valid grievances on his part occur to you? 
 
HEADINGS BEFOEE THE MERCHANT MARINE COMMISSION. 7l 
 
 AMERICAN SEAMEN BETTER OFF. 
 
 Mr. Laverge. I do not think I could do any better myself. I 
 think the sailors of this country are better off, a great deal better off, 
 than in any foreign country. 
 
 Representative Minor. What have you to say of the wages of 
 American sailors as compared with those of other nations ? 
 
 Mr. Laverge. You will find in the wages they get through and 
 through, that there is at least 30 per cent difference in a ship. I find 
 it that way. Talk about a foreign port! The minute your ship flies 
 the American flag, you have to pay more wages, and I do not care 
 where it is. That is my experience. 
 
 Representative Minor. Tnat is your experience ? 
 
 Mr. Laverge. Yes, sir. 
 
 Representative Minor. If two ships lying side by side, one flying 
 the American flag and the other the German 
 
 Mr. Laverge. The German gets it cheaper. 
 
 Representative Minor. Are you sure? 
 
 Mr. Laverge. Yes, sir; I am. I have been in the foreign trade, 
 and 1 know. 
 
 Senator Malloet. You say they do that invariably. Would that 
 happen in this country as well as in Europe ? Take a German and an 
 American ship ju this port, in Boston, or in any other. Do you think 
 the German ship in Boston would get a crew for less than the Ameri- 
 can ship? 
 
 Mr. Laverge. In a foreign port, as soon as it is found out that you 
 fly the American flag, you have to pay more for the sailor. I shipped 
 men in Quebec two years ago. The wages for seamen and firemen 
 were £i 10s. We pay along here on an American ship $37.50 and $40. 
 Those are firemen's wages. Right there in Quebec the wages were 
 £4: 10s. I had to pay £5 to get men. We were starting right fx'om 
 an English port, and I could not get the men for any less. 
 
 Senator Mallort. That is all right; I understand that; but what I 
 want to get at is whether an American sh^) would have to pay a greater 
 rate of wages on a voyage from here to London for a crew shipped in 
 New York than would an English ship or a German ship on the same 
 voyage from New York. Would she have to pay more for her crew? 
 
 Mr. Laverge. 1 am not prepared to say. I have an idea that an 
 English ship would pay the same amount of wages for sailors. That 
 is because he is supposed to bring his men. There are very few that 
 do not sign men in England. 
 
 Senator Mallort. I know that; but sometimes it happens that they 
 have to get a crew here. 
 
 Mr. Laverge. 1 think if an English ship or any foreign ship wants 
 men here it has to pay the same rate of wages — not coast wages, but 
 offshore wages. 
 
 THINK THEY ARE WORTH MORE. 
 
 Senator Malloky. Do you know why that is ? 
 
 Mr. Laverge. It is because foreigners — I suppose you know all 
 about that — when they get into this country, think they are worth 
 more. In fact, I think a man is as soon as he gets here. Suppose 1 
 
72 HEARINGS BBFOKE THE MERCHANT MARINE COMMISSION. 
 
 take a sailor who has been all of his life on an English ship, or a Nor- 
 wegian ship. The minute he comes aboard my ship here he is the 
 first man to kick and quarrel; to claim that he does not get enough. 
 At the same time that man has never received half of the treatment 
 that he receives on an American ship. That is true. Any captain on 
 any ship can tell you that. It has been my experience. 
 
 Senator Mallory. Your idea is that as soon as a man gets to 
 America and becomes acquainted with American customs he demands 
 higher wages, and that that is the reason for the increased compensa- 
 tion paid here ? 
 
 Mr. La VERGE. Yes, sir; it is a feeling in anybody over here that 
 he ought to have more money sailing out of this country. 
 
 Representative Minor. Are not American crews more efficient? 
 
 Mr. La VERGE. Yes, sir; I believe they do more work. When I 
 used to go on sailing vessels we would carry sometimes, say, the same 
 number of men, and we would get into port at the same time, and the 
 Americans would be ready to put their cargo over the side before the 
 others would be ready, by ten or fifteen hours. 
 
 WHY SHIPS ARE IDLE. 
 
 Representative Minor. You stated that the ship of which you are 
 master is laid up for want of business? 
 
 Mr. La VERGE. Yes, sir. 
 
 Representative Minor. What is the matter with the business? 
 
 Mr. Laverge. We can not run that ship in competition with other 
 ships. We can not run it as against a Norwegian ship. 
 
 Representative Minor. What trade were you in ? 
 
 Mr. Laverge. We went to San Francisco last — from here to San 
 Francisco and back. 
 
 Representative Minor. You have not the business to make that trip? 
 
 Mr. Laverge. No, sir; there is business, but we can not do it. 
 
 Representative Minor. Who has the business? 
 
 Mr. Laverge. The Hawaiian Steamship Line is doing that business 
 at present. They are running a regular line. We are outsiders. We 
 are tramps. They have a line. 
 
 Representative Minor. That is an American line ? 
 
 Mr. Laverge. Yes, sir. 
 
 Representative Minor. They are Americans? 
 
 Mr. Laverge. Yes, sir. 
 
 Representative Minor. Are you bothered with foreign ships taking 
 business away from you ? 
 
 Mr. Laterge. Yes, sir, we can not run; that is all. We are losing 
 money. I am told so by the owners, and I know it is true, because I 
 keep my eyes on the accounts. 
 
 Representative Minor. What foreign ships have bothered you the 
 most? 
 
 Mr. Laverge. Oh, 1 could not tell exactly. I suppose the Norwe- 
 gian ships. They seem to take everything pretty low. I have no 
 prejudice. I used to hear that when I was on sailing vessels. We had 
 to let go the cotton carrying. 
 
 Representative Minor. They will always starve^ everybo'dy else, to 
 death anyivay ? 
 
 Mr. Laverge. Yes, sir. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 73 
 
 Representative Minor. But complaint has been made to me, or it 
 has been charged, that many of our ships are compelled to lay up 
 because of the fact that certain foreign ships that are subsidized by 
 their governments can underbid them on freight and they can carry at 
 a price which, including the subsidy, nets them a profit whereas if you 
 run it would be at a loss. Do you know anything about that? 
 
 Mr. Laverge. We see the French ships. 1 have had many captains 
 tell me it is not what they carry; it is what they get from the Govern- 
 ment. We can not buck against a ship like that. 
 
 Representative Minor. If there were no French ships subsidized, 
 for instance, or any other ships subsidized by their governments, do 
 you think you would be laid up now ? 
 
 Mr. Laverge. We would not be, because we could afford to ask 
 more for freight and get a better rate. 
 
 The Chairman. Captain Laverge, we are very much obliged to you 
 for your testimony. 
 
 STATEMENT OF LEWIS NIXON. 
 
 The Chairman. I am informed that Mr. Mxon, the naval architect 
 and ship builder, is present, and we shall be pleased to hear from 
 him. 
 
 Mr. Nixon appeared before the commission. 
 
 The Chairman. Mr. Nixon, you iinderstand what this Commission 
 is here for, I suppose? 
 
 Mr. Nixon. Yes, sir. 
 
 The Chairman. Will you give the Commission the benefit of your 
 views on the general subject? 
 
 Mr. Nixon. Mr. Chairman, I was impressed with the fact that there 
 might be a misapprehension on the part of the Commission as to the 
 cost of ships, and I shall confine whatever I have to say entirely to the 
 shipbuilding side of this question. 
 
 The first cost has been cited as one of the handicaps which must 
 be overcome in order to upbuild our merchant marine. 
 
 The Chairman. Excuse me for taking the liberty to say to you that 
 in addition to that expert testimony which you are going to give the 
 Commission, we are very desirous of some information as to the remedy 
 for rehabilitating the American merchant marine ; and if you have any 
 thoughts on that subject, I hope you. will not forget to present them. 
 
 Mr. Nixon. I will give you my own opinions and ideas with a great 
 deal of pleasure. 
 
 PERCENTAGES MISLEADING. 
 
 In regard to the first cost of ships, a comparison by a percentage 
 statement as to the cost of ships here and in England is very liable 
 to be misleading. To say that a ship costs 50 per cent more here 
 than in England naturally must be misleading, from the fact that we 
 are probably not taking into account any of the conditions at all in 
 making that comparison. In England to-day, if we consider the cost 
 of ships, you will find a very great distress in the shipbuilding indus- 
 try, and ships are low. It is true that here our shipyards are anxious 
 for work, but most of them have a fair amount of Government work. 
 
 Again, a tramp*built in England would be built in a yard that built 
 nothing but tramps. If built here, it would be very apt to be built. 
 
74 HEAEINGS BEFOEE THE MERCHANT MARINE COMMISSION. 
 
 certainly if it were a large ship, in some yard where there was being 
 built the type of the highest development of the shipbuilding art in 
 America or any other nation — a battle ship or a man-of-war. 
 
 In other words, it would be built here in a yard where the organiza- 
 tion was of the very highest grade, while if built abroad it would be 
 built where nothing but tramps were built. Go to England, and if 
 you want a battle ship you find that the Government goes to Arm- 
 strong. If you want a magnificent merchant ship you go to Harlan 
 & "Wolff. If you want a tramp you go to the yards that build tramps. 
 Those boats have not a counterpart in America. We have not learned 
 in this country that a ship can be too good for a certain trade. The 
 consequence is that we build rather better ships than are needed. 
 
 SOME ACTUAL COMPARISONS. 
 
 You can, of course, get a good many comparisons. A number of 
 years ago, when men were able to contract very low for ships abroad, 
 the same specifications were a year afterwards brought here and sent 
 to different shipyards in order to obtain a comparison with the prices 
 abroad. When the shipbuilders knew that it was an earnest offering 
 they got down to low figures. When it was known to be simply a 
 tentative matter of figures the response must be regarded as gener- 
 ally misleading. The only actual comparison I know of where ships 
 exactly alike have been built in the two countries is in connection with 
 certain ships of the Atlantic Transport Line. I believe two absolutely 
 identical ships were built — one here and one abroad — at a difference 
 here of 25 per cent more. Shortly afterwards they ordered eight ships, 
 four of them abroad, putting all four in one yard, and they ordered 
 four on this side, putting two of them in each of two yards. The com- 
 parison at that time was about 41 per cent — from 40 to 41 per cent — 
 advance in the cost of the American ship. Those are the only actual 
 comparable statements that I have. 
 
 AN ECONOMIC WASTE. 
 
 You can understand, however, that if we have a demand for ships 
 which brings about a condition where the American shipbuilder can 
 engage in the industry in a proper way, this idea of building all kinds 
 of ships in one yard must be done away with. I have known one 
 great yard in this country where "they had five slips, every one capable 
 of building a Lucania, and they were building there at one time a 
 steamer, a ferry boat, a tug, a battle ship, and a yacht. The Almighty 
 himself could not practice economies under those conditions. 
 
 Take a yard that is well organized for this higher development, such 
 as we build in the form of a battle ship, where work has to go on by slow 
 stages, every step scrutinized most carefully by inspectors, where all 
 the material has to be inspected, where there is the very highest style 
 and skill of workmanship, where there are men of high grade, capable 
 of designing and of executing such work, you can understand that 
 when you throw a tug or a cargo steamer into such an organization 
 you do it at the expense of the lower grade ship. 
 
 We have built battle ships, and I think that their prices have com- 
 pared very favorably with what has been done abroad. I happen to 
 know personally of one instance where bids were prej)ared for a foreign 
 government for a vessel costing about $8,000,000, including the guns, 
 armament, and everything; and in that case the American bid, care- 
 fully considered, with a reasonably fair profit, was only $30,000 more 
 
HEAEINGS BEFORE THE MERCHAKT MARINE COMMISSION. 75 
 
 than that of a foreign shipbuilder of reputation, and of a yard where 
 they do the very best of work. That did not mean, however, that the 
 two builders would make the same margin of profit. 
 
 Those who despair of our ever attaining a lead in shipbuilding in 
 this country will tell you that when it comes to the cargo vessel we 
 can not compete at all; that we might do it in high-grade work. But 
 take locomotive works, where the wages paid here are higher than 
 abroad, but where the constant demand has enabled the manufacturers 
 to standardize and so to organize and equip their plants that they are 
 able to produce in this country cheaper locomotives in spite of the 
 higher wages. 
 
 VS^HAT THE STATES HAVE DONE. 
 
 Simply go out on the Great Lakes and you will find there vessels 
 built which are admirably adapted to the service for which they are 
 intended. They are of very large dimensions and are splendid boats 
 for their kind. They are practically all of one kind. So a yard which 
 builds a boat there can apply and direct its energies, its attention, and 
 its brain to a like product all the time, and I do not believe that the 
 boats built upon the Lakes, while of course they are not fitted for 
 over-sea navigation, could be produced abroad at the same cost. 
 Hence, if we have that kind of organization on the Lakes, where you 
 can not build men-of-war at all, and therefore can not turn out that 
 kind of product, and if we can reach the low price there, where there 
 is a demand, where American ships are doing practically all the work, 
 and where every yard can be kept, under general conditions of pros- 
 perity, full of work, this question naturally suggests itself. We have 
 arrived there at a condition, in respect of building ships, which com- 
 pares more than favorably with what they can do abroad. Hence, if 
 we can reach the two extremes — the highly developed battle ship, with 
 the complex and costly organization which is necessary to build it, and 
 the lower tramp ship, which I may-compare with the cargo ship or ore 
 ship of the Lakes — there is no reason why, somewhere between, we 
 can not also arrive at successful production in the other branch of the 
 industry in this country. 
 
 THE HEART OF THE DIFFICULTY. 
 
 But the trouble is that we have not in this country a demand for 
 ships. We do not build enough ships of various types to enable the 
 different yards of this country to differentiate and specialize. In other 
 words, we have no yard which signally stands out as devoted to the 
 manufacture of men-of-war. But in time, if we have the demand, if 
 the result of the labor upon which you are engaged shall be such as 
 to bring about the demand and to remove the handicap under which 
 the American shipowner is operating, then the American shipbuilder 
 will arrive at such a stage that he will be able to compete very favor- 
 ably with conditions abroad. He can not do it now. There is no 
 question but that there is a difference of from 30 to 40 per cent in the 
 cost of building ships as against this country. You can not ascribe 
 that altogether to the difference in wages. We do pay higher wages. 
 
 WAGES AND MATERIALS. 
 
 We pay the same man when he comes from England more than he 
 got at home; but we have a climate which in itself is a tonic, the men 
 are not driven to stimulants under stress, and the men do more work 
 
76 HEABINGS BEPOKE THE MEKOHANT MARINE COMMISSION. 
 
 than they do abroad, and hence some of that larger wage is compen- 
 sated for. In some grades of work in shipyards, such as driving rivets 
 and other piecework, perhaps the amount a man will earn on the same 
 unit of work is almost the same in the two countries. For joiners 
 the wages here are probably double what they are abroad. That of 
 itself is not altogether a proper comparison or one which will give 
 you a proper estimate of the difference, because, as I say, there are a 
 good many industries in this country in which the wages are much 
 higher than they are abroad, where we turn out a product very much 
 more cheaply than they do. 
 
 As to the cost of material, on the 29tli of April, in the Middlesbor- 
 ough district, England, the cost of ship plate was £6 78. 6d., while 
 here the pool rate was 1.70 to 1.73, which Avould be about $38 and $31 
 per ton, or about 15 per cent less in England than here, or more here 
 than there — just as you choose to put it. 
 
 A SHIPTAED REVOLUTION. 
 
 Based upon the present demand for ships, if a man builds a ship 
 here, in a yard with an expensive organization, a yard of the first 
 class, with the entire overhead expense carried on one or two units, 
 naturally the cost of the ship will run up here. We have had during 
 the past two or three years almost a revolution in the time and in the 
 wages of men, which has led to rather erratic figures in the cost of 
 building. The men started with long-term contracts. They started 
 in with a ten-hour day. The Government appropriated enormous 
 sums for the Navy, practically doubling the work that was to be done 
 by the commercial shipyards of the United States — I mean outside 
 the navy-yards — and in that way created a demand for men. They 
 had to be taken from bridge shops, machine shops, and drawn from 
 other industries, of course at an increased wage. 
 
 They at once demanded shorter, hours and more money, and, on 
 account of the necessity of having them and the severe penalties 
 attached for the failure to deliver ships on time, of course they got it. 
 There was a change in the three years from ten to nine hours, and I 
 have no doubt that the actual cost of building a ship has increased 
 within the last three to four years 30 per cent at least. 
 
 A DEMAND FOR SHIPS. 
 
 But that I do not think is the question we have here, where we are 
 doing a retail business as against a wholesale business in England. 
 Where we will add 50,000 or 60,000 tons in the course of a year to our 
 foreign-trade tonnage England will add eighteen hundred thousand 
 merchant tonnage. If the American shipbuilder is to have an oppor- 
 tunity he must have it along the same lines that his competitor has, 
 and that can be arrived at only by creating a demand for ships. I 
 am satisfied that if the demand for ships is made you will find that 
 the American shipbuilder will rise to the occasion and do just as be 
 did before, many years ago, when our forests ran down to the water's 
 edge and when we built ships of wood. At that time we produced 
 them very much more cheaply than they could have been produced 
 abroad. That day will come some time. Even now the American 
 shipbuilder does not ask bounties or other aid, but only a demand for 
 his product; given that, he will produce the ships at a cost which will 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 77 
 
 uot make the first cost a serious consideration or handicap to owner- 
 ship of vessels, and eventually he will produce them as cheap or 
 cheaper than his foreign competitors. 
 
 Of course we ought to buy our steel here as cheaply as it can be sold 
 abroad. It is true we have the right to import steel free at present if 
 we wish to, and a great many people say, " You can go abroad and buy 
 the material and get a rebate." They do not know the difficulties, the 
 heart-breaking difficulties — the chances of the boat being belated, the 
 chance of delay in shipment, and the chance of ship plates being bent 
 and angles distorted. Our experience at the times when we have 
 imported materials from abroad has not been such as to encourage us 
 to do it any more. We have been willing to pay more because we 
 have been able to get our work out more quickly. Still, everyone 
 must admit that there is a stupendous difference in the cost at pres- 
 ent. I believe with the demand for ships we can overcome that. 
 
 THE TARIFF ON PLATES. 
 
 Senator Malloby. Do you think it would help the shipbuilder any 
 in reducing the cost of his product if we took off the tariff on plates 
 and other steel material used in building ships for the coastwise trade? 
 
 Mr. Nixon. The coastwise trade? It would help us if you took 
 the tariff off of anything. Anything you take the tariff off of will be 
 cheaper. 
 
 Senator Mallory. It was said here to-day that the difference in 
 material is 40 per cent. 
 
 Mr. Nixon. I gave you an actual quotation as of the 29th day of 
 April. 
 
 Senator Mallory. You do very little building for the foreign trade? 
 Most of it is for the coastwise trade? 
 
 Mr. Nixon. Yes, sir. 
 
 Senator Mallory. There is considerable building of that kind done 
 along both the Atlantic and the Pacific? 
 
 Mr. Nixon. Yes. 
 
 Senator Mallory. If you could get j'our material brought in here 
 at a reduced rate, would that not tend to reduce the cost of producing 
 any ship, whether for the coastwise or foreign service? 
 
 Mr. Nixon. I think so; undoubtedly. 
 
 Senator Mallory. There is another question. Some years ago we 
 were shipping steel plates to the Clyde. As I remember, we had some 
 very good evidence to that effect before Congress. Quite a large con- 
 tract was made, and it was said that we were underselling the British 
 steel-plate makers on their own ground. Do you remember whether 
 or not that was correct? That was about four or five years ago. 
 
 prices of MATERIALS. 
 
 Mr. Nixon. I heard the statement at the time. I have no doubt 
 that some contracts were placed in this country. I merelyhadtotake 
 the statement as I saw it printed. I had no connection with it. 
 
 Senator Mallory. Since then these plates have gone up so that at 
 the present time there is about one-third difference? 
 
 Mr. Nixon. They are selling approximately at $38 a ton here as 
 against $31 there. But that is the price here for American materials. 
 Undoubtedly American material can be bought in England very much 
 more cheaply than here at present. 
 
78 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Mr. John Ceaig. Allow me to correct you with respect to the price 
 as it is there to-day. I was there eight days ago. Steel plates were 
 then worth £5 12s. 6d. per ton of 2,240 pounds, which makes it less 
 than $26 a ton of 2,000 pounds, as against $34, the price here. 
 
 Mr. Nixon. I took the figures out of "Engineering," of London, an 
 engineering journal, showing the price in the Middlesborough district. 
 
 Senator Mallory. "What is the authority for your statement, Mr. 
 Craig? 
 
 Mr. Craig. The quotation I myself got in Glasgow for material, to 
 be imported here if it was possible to do so. That was only eight 
 days ago. I left Glasgow a week ago 
 
 Mr. Nixon. "What was the quotation for like material here? 
 
 Mr. Craig. Thirty-four dollars for 2,000 pounds, while it is only 
 $28 for 2,240 pounds there for the same quality of material. 
 
 Mr. Nixon. I have no doubt for a firm offering we could get it 
 lower here. 
 
 Mr. Craig. "We could not get it for any less. 
 
 Mr. Nixon. I know there is a pool rate. 
 
 Representative McDermott. What is the tariff rate? 
 
 Mr. Nixon. I do not know. There is no question but that we are 
 suffering from high prices in material and have been for a number of 
 years. 
 
 The Chairman. "What are your suggestions as to the remedy for 
 the existing condition, of the American merchant marine? 
 
 providing a customer. 
 
 Representative McDermott. Before you go into that, if we have 
 to pay a higher rate for plates made in this country than we would 
 have to pay if we imported them, and the Government enters into a 
 ship-subsidy pro.iect, it will then he providing a customer for the pro- 
 tected industry of this country which makes those plates? 
 
 Mr. Nixon. Yes. 
 
 Representative McDermott. That industry then can sell those 
 plates abroad cheaper than they are to-day sold to the American 
 users, and the subsidy paid so as to enable the ships to be built on 
 this side would result in the final analysis in the Government of the 
 United States protecting the manufacturers of the plates out of the 
 Treasury of the United States and providing the customer who is to 
 use those plates. Is that so? 
 
 Mr. Nixon. As near as I can follow you. 
 
 Representative McDermott. Let me illustrate it. The plates you 
 import would cost $28 a long ton. Plates made here are sold at 
 
 Mr. Nixon. At $38. 
 
 Representative McDermott. At $38. The importation is prevented 
 by a tariff duty. 
 
 Mr. Nixon. No; you may import them or other material for the 
 foreign trade and get a rebate. There is free trade in plates now for 
 the foreign trade. 
 
 Representative McDermott. Oh, I mean for any trade. 
 
 Mr. Nixon. I thought the inquiry referred to the foreign trade. 
 
 The Chairman. Entirely. 
 
 Representative McDermott. There is no duty when they are used 
 in the foreign trade. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 79 
 
 Mr. Nixon. No; you get a rebate from the Government. 
 Representative McDermott. Thep why do you not import them? 
 Mr. Nixon. I told you why as a practical question we did not. 
 Representative McDermott. Because of these inconveniences of 
 detail? 
 
 BETTER MATERIALS HERE. 
 
 Mr. NixoN. That has been to a large extent the reason. Then we 
 get better materials here by far. We know the people who furnish 
 the material, and we know just how we can depend upon them for 
 deliveries. The handicap of a greater price could be done away with 
 by importing, but it has not been expedient. 
 
 Representative McDermott. Then the tariff- in no wise affects the 
 cost of the plate as you use it? 
 
 Mr. Nixon. Undoubtedly it affects it. The tariff has an effect upon 
 everything else you buy. Plates are not the only things that go into 
 a ship. 
 
 Representative McDermott. As to the plates, they are not affected 
 by the tariff in any wise? 
 
 Mr. Nixon. I think they are. 
 
 Representative McDermott. If you get a rebate of the duties, how 
 does the tariff affect you? 
 
 Mr. Nixon. Because we are practically driven to buy our material 
 and our labor in American markets. We can not go to work in 
 building American ships and buy our material 3,000 miles away. It 
 is not practicable. 
 
 Representative McDermott. Then it is not the tariff that does it. 
 Practically there is no tariff on the plates yoii use in American ships 
 to be "used in international commerce 
 
 Mr. Nixon. Yes; bxit our shipyards can not depend upon inter- 
 national commerce. 
 
 Representative McDermott. Then there is a reason extraneous of 
 the tariff why you do not purchase your steel plates abroad? 
 
 Mr. Nixon. Not altogether. I have no doubt that if we were to 
 have an enormous order, requiring thousands of tons, we could charter 
 a steamer and bring the material here. I am merely reciting to you 
 the practical difficulties which in the past have worked against us 
 and seem to incline the shipbuilder not to import. 
 
 Representative McDermott. What I want to get on the record is 
 the fact that it is not chargeable to the tariff. 
 
 Mr. Nixon. It would be rather a complex problem for anybody to 
 work out in his mind. 
 
 Representative McDermott. Your proposition is this: American 
 plates can be sold abroad, or are sold abroad, for some business reason, 
 at a less price than they are sold here? 
 
 Mr. Nixon. Yes. 
 
 Representative McDermott. Plates of equal quality, but of foreign 
 manufacture, can be imported for less than you can buy domestic 
 plates here? 
 
 Mr. Nixon. Yes. 
 
 Representative McDermott. You pay in the first instance a tariff, 
 imposed for the purpose of giving employment to American labor, and 
 the Government allows you a rebate? 
 
 Mr. Nixon. Yes. 
 
80 HEARINGS BEFOKB THE MBBCHANT MARINE COMMISSION. 
 THE TARIFF INFLXIBNCE. 
 
 Representative McDermott. How does the tariff increase the cost 
 of the plates in American ships if that proposition is true? 
 
 Mr. Nixon. In an individual instance, if you chose to import the 
 plates, it would not increase it at all, but it has influence upon the cost 
 of all the material and labor that go into the ship. 
 
 Representative McDermott. You speak of the general tariff idea? 
 
 Mr. Nixon. Say you were to build one large ship where j'-ou had to 
 buy your material here and another for which you imported the mate- 
 rial. You would at least pay for the two ships a larger sum than the 
 actual net rate you could get abroad. It would be very hard to dif- 
 ferentiate and tell just what it affects 
 
 Senator Lodge. If you took the tariff off steel, it would cheapen the 
 cost of a ship for the coastwise trade? 
 
 Mr. Nixon. If you took off the tariff from all steel whether used in 
 ships or not. 
 
 Senator Lodge. Of course, it would affect you on vessels built for 
 the coastwise trade? 
 
 Mr. Nixon. I think it would. 
 
 Senator Lodge. You have a monopoly of the coastwise trade. You 
 have no foreign competition to meet. 
 
 Mr. Nixon. Preciselj'. 
 
 Senator Lodge. When you come to building for the foreign trade, 
 you have foreign competition. If I remember the tariff law, all 
 material used in the building of a ship for the foreign service can be 
 imported practically free of duty ; the Government rebates the tariff? 
 
 Mr. Nixon. Yes, sir. 
 
 The Chairman. My attention was attracted by an observation you 
 made a moment ago which I have heard from others. That is, as to 
 the superior quality of American steel. 
 
 Mr. Nixon. It is very much better steel. 
 
 The Chairman. The American steel is very much better? 
 
 Mr. Nixon. Yes, sir. 
 
 The Chairman. That is one reason why you do not import foreign 
 steel? 
 
 Mr. Nixon. A good many of the foreign tramps are built without 
 any test, or it is a nominal test. Here most men who are going to 
 build a large ship have their own inspectors to see that it is carefully 
 built. 
 
 the effect on railroads. 
 
 Senator Mallory. If the rebate which is allowed on material for 
 vessels for the foreign trade were also given with respect to materials 
 imported for the construction of vessels engaged in the coastwise 
 trade, would it not, in your judgment, lower the first cost of the vessel 
 and tend to increase the number of vessels built here? In other 
 words, would not cheaper vessels for the coastwise trade tend to give 
 more business to our shipyards? 
 
 Mr. Nixon. I do not know as to the coastwise trade ; but so far as 
 the foreign trade is concerned, if you gave the people the ships they 
 probably would not be able to run them profitably. 
 
 The Chairman. Having a monopoly of the coastwise trade, is it 
 not fair to assume that the shipyards of the country are supplying 
 the demand? , f f -f « 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 81 
 
 Mr. NixoN. They are; but as I understood the Senator's question 
 it was 
 
 The Chairman. Vessels would not be built if there were not a 
 demand for them. 
 
 Mr. Nixon. People might take a chance. Certain people might 
 think that a particular line was making a little more money than it 
 ought to and get into competition with it. It is very hard to tell. It 
 would be only speculative. 
 
 Representative Minor. The Senator's idea was to apply protection 
 on one end of the line and free trade on the other. 
 
 Mr. Nixon. How is that? 
 
 Representative Minor. We have a monopoly of the coastwise trade. 
 
 Senator Mallory. I hardly think that was my intention. I think 
 if the shipyards could build more cheaply they would be likely to 
 have more business, whether coastwise or foreign. 
 
 Representative Minor. A ship built of foreign material can not be 
 used in the coastwise trade. 
 
 Senator Mallory. Not under the present law. I was supposing 
 that you applied the rebate law to the coastwise trade. Would it not 
 increase the business of the shipyards if they had the ability to pro- 
 duce a ship for considerably less than they are doing it for now? In 
 other words, would it not stimulate investment in coastwise ships as 
 well as in foreign ships? 
 
 Mr. Nixon. If you are talking about free trade in materials, I do 
 not believe that lopping off the tariff as to some little industry here 
 would help us very much. I think you would have to apply it all 
 along the line. 
 
 Senator Mallory. You mean all along the line on everything? 
 
 Mr. Nixon. Yes. 
 
 Senator Mallory. I am speaking of shipbuilding, which seems to 
 be suffering. 
 
 EVERY TRADE INTERESTED. 
 
 Mr. Nixon. It takes in almost every other industry. Every calling, 
 profession and trade is called upon in the construction of a ship. I 
 do not see how you can say "it makes no difference as to what you 
 sell to the man with the bridge shop," and then simply open the door 
 a little way and say "all that you put into a ship shall be free." But 
 my answer is only speculative. 
 
 Senator Mallory. You think it is a good thing, as affecting vessels 
 for the foreign trade built in this country, that all materials shall 
 come in free, practically? 
 
 Mr. Nixon. That law has been on the statute books for a good long 
 time, and a good many boats have been built here for the foreign 
 trade, and the steel has not been imported. Ours are just as good 
 business men as you will find abroad, and they have not found it 
 expedient to import their steel. As to the theory which governed 
 them in refraining from doing so, I can not tell you. 
 
 Senator Lodge. Suppose we took off the duty on shipbuilding 
 materials? 
 
 Mr. Nixon. It would mean taking the duty off all articles raised or 
 manufactured in the world. 
 
 Senator Lodge. And also have free ships. 
 
 Mr. Nixon. In the coasting trade? 
 
 Senator Lodge. Have free ships and free material. 
 
 3a— 04 6 
 
82 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Mr. NixON. I do not believe you can do it. There enters into a 
 ship practically every product of human energy — of the hand and of 
 the brain. 
 
 Senator Lodge. Suppose it was entirely free— no tariff and free 
 ships. Suppose there was no protection for ships? 
 
 Mr. Nixon. If we had no protection at all, we would depend upon 
 our own natural resources and our own American enterprise and get 
 along just as well without it. The shipbuilder would look after his 
 own salvation. 
 
 Senator Lodge. If you had all your materials free, you would not 
 object to free ships? 
 
 Mr. Nixon. If everything else were free, labor should be free. We 
 are building ships not only in a market protected for material, but in 
 a market protected for labor. So, unless you give us free trade 'in labor 
 as well as in material, I do not see how you can accomplish it, as free 
 trade in material would be followed by free trade in labor. 
 
 A rebate for the coastwise trade. 
 
 Representative McDermott. What would be the effect on railroad 
 competition if you allowed foreign-built ships, owned by American 
 citizens, to have American registration if manned by American crews 
 and used in our coastwise trade? 
 
 Mr. Nixon. It is only a matter of opinion. I am not an expert rail- 
 way man, but I should think it would injure the railroads very much. 
 
 Representative McDermott. You think it would injure the rail- 
 roads? 
 
 Mr. Nixon. Yes. 
 
 Representative McDermott. But benefit those who use the rail- 
 roads? 
 
 Mr. Nixon. Not necessarily. 
 
 Representative McDermott. Do you think it would be an injury 
 to the extent that it would depreciate the condition of the roads? 
 
 Mr. Nixon. The railroads end at the water, but of course there are 
 a good many railroads having intimate relations with ships. 
 
 Representative McDermott. The first effect would be in competi- 
 tion, because your ships could be built cheaper and therefore could 
 afford to give greater competition with the railroads of the country than 
 they do to-day. 
 
 Mr. Nixon. They might do it, but you must remember that a large 
 proportion of our coasting vessels are not such as want to cross the 
 ocean. 
 
 Representative McDermott. I am not talking about crossing the 
 ocean. 
 
 Mr. Nixon. If built to cross the ocean, they would have to 
 
 Representative McDermott. A number of vessels which are in the 
 coasting trade could not be taken across at aU. 
 
 Mr. Nixon. If some one thought that given lines in certain direc- 
 tions were making more than they ought to, it probably would foster 
 some such competition as that. 
 
 Representative McDermott. That would lower the rates of the 
 railroads where they compete with water carriers? 
 
 Mr. Nixon. Yes, sir. 
 
 Representative McDermott. Have you ever made any calculation 
 as to how far that would go? 
 
 Mr. Nixon. There are certain kinds of freight which, to be carried 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 83 
 
 at all, must be carried at a very low rate — bulky material — and they 
 have to be carried by water. If a railroad wants to serve a certain 
 manufacturing industry, in order to carry its raw material at all the 
 road must carry it at a loss, simply to cater to the trade along its 
 route, and then attempt to get it back, probably on some sort of fin- 
 ished material, after it has delivered the raw material. So it is very 
 often advantageous to a railroad to have a canal or other waterway 
 that can take care of bulky trade which, if there was no water connec- 
 tion, it would be forced to carry possibly at a loss or at best at a 
 nominal profit. 
 
 THE FOREIGN SUBSIDIES. 
 
 Senator Lobge. How much advantage do you think the various 
 systems of subsidies adopted by f oreig:n governments in one form and 
 another give to their shipping as against ours? 
 
 Mr. Nixon. Roughly speaking, about $26,000,000 a year, which 
 handicaps us to that extent. 
 
 Senator Martin. How much is it— $26,000,000? 
 
 Mr. Nixon. Twenty-six million dollars in the aggregate. That is 
 for all nations, in the aggregate. 
 
 Senator Martin. Foreign governments pay in the aggregate 
 $26,000,000 in their traffic with all nations? 
 
 Mr. Nixon. Certainly. If we started a subsidized line to any par- 
 ticular port, they would if necessary raise their subsidies. They have 
 the good will of the trade 
 
 Senator Martin. I suppose you have not made any calculation to 
 show what proportion of the $26,000,000 is paid out to ships trading 
 with America? 
 
 Mr. Nixon. Not lately. I did have it once. It is all in the report 
 of the Commissioner of Navigation. 
 
 Senator Lodge. Do you think that those aids to navigation, the 
 subsidies given by foreign governments, increase the demand abroad 
 for ships? 
 
 Mr. Nixon. They increase the demand abroad for ships and they 
 cause a certain amount of shipbuilding. Take the French system of 
 bounties 
 
 Senator Lodge. The French give a direct bounty on construction. 
 
 Mr. Nixon. They do; and a great deal of wheat is carried from San 
 Francisco and our western coast in French ships. 
 
 Senator Lodge. An increased demand for ships would be a direct ben- 
 efit to the yards, by enabling them to make models and to standardize? 
 
 Mr. Nixon. Certainly. If there is a steamship line which is neces- 
 sary for the extension of its trade, so far as concerns a foreign govern- 
 ment, it is free to go and start up such a line. 
 
 There are different political conditions existing. They are broader, 
 and executives have more latitude than we have. The consequence is 
 there are some things we can not do. 
 
 You asked me a question as to subsidies. The subsidy is an exten- 
 sion, pure and simple, of the principle of protection. In the one case 
 the amount paid by the man is hidden while in the case of the subsidy 
 the Government gives you a specific amount. It is a little more 
 obvious and bolder. 
 
 Senator Lodge. What do you think would be the best way to meet 
 foreign subsidies? 
 
84 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 FOR DISCRIMINATING DUTIES. 
 
 Mr. Nixon. There have been a number of ways suggested, but the 
 trouble is we do not try them. The only one that has behind it the 
 logic of actual success is the system of discriminating duties intro- 
 duced by President Madison. A good many theorists can show by 
 theory that subsidies will build up the merchant marine as well as 
 discriminating duties actually did build it up. 
 
 Senator Martin. If we were to meet the foreign subsidies we should 
 have to do still more in order to meet the difference in the cost of con- 
 struction and operation. 
 
 Mr. Nixon. That is what I understand the subsidy is for. 
 
 Senator Martin. As I understood the question, if we were to figure 
 out the amount of subsidies given by foreign governments and received 
 by vessels trading with America, and were simply to meet it, we 
 would not have found a remedy. In addition to giving as much sub- 
 sidy as the foreigners pay, we would have to pay an amount to equal- 
 ize the increased cost of the ship and the increased cost of maintenance 
 and operation as compared with those costs on foreign ships. 
 
 Mr. Nixon. No; it was not a question of meeting the subsidy. It 
 was the question of meeting the handicap — the greater first cost and 
 greater wages. I firmly believe the first would work itself out after 
 the demand for ships became constant. But in order to remove the 
 handicap of the greater wage you need something. Whether it is 
 discriminating duties or not is the the question. 
 
 One great point which everyone has brought out is that they want 
 to develop the cargo carrier. If you take a 10,000-ton ship carrying 
 coal, her whole cargo might not be worth $25,000, while a thousand 
 tons on a great liner might be worth $250,000 or $300,000. It is very 
 hard and to the layman misleading to go on the cargo. 
 
 Senator Lodge. Discriminating duties are an immense benefit to a 
 certain class of freight and very little benefit to another. 
 
 Mr. Nixon. What we call package freight. 
 
 DUTY or subsidy? 
 
 Representative McDermott. What is the difference in the final 
 result to the Treasury of the United States between discriminating 
 duties and a direct subsidy paid out of the Treasury? 
 
 Mr. Nixon. I do not know. 
 
 Representative McDermott. It is a difference in name. 
 
 Mr. Nixon. No. 
 
 Representative McDermott. What? 
 
 Mr. Nixon. Oh, no; I should not say so. 
 
 Representative McDermott. What are the differences? 
 
 Mr. Nixon. You get a lower rate, and on your material you get a 
 lower tax, surely, and above all you drive trade to the American bot- 
 tom with discriminating duties. 
 
 Representative McDermott. Illustrate the point in the case of 
 discriminating duties by the importation of a thousand dollars worth 
 of goods. 
 
 Mr. Nixon. On a thousand dollars worth of goods, if the duty on 
 those goods was $400 and you took off 10 per cent, it would be $40 on 
 every thousand. 
 
 Representative McDermott. What is the difference between doing 
 that and paying $40 out of the United States Treasury? What is the 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 85 
 
 differeuce between maintaining your duty as it is at present and pay- 
 ing $40 out of the United States Treasury to the owner of the vessel, 
 and the other system of allowing him $40 when the vessel arrives at 
 this port? 
 
 Mr. Nixon. Of course the subsidy is not on the amount of material 
 you import. 
 
 Representative McDermott. You may make it so. 
 
 Mr. Nixon. It would be difficult. If a ship is making regular voy- 
 ages, carrying the mails, holding herself in readiness as an auxiliary 
 cruiser, and potentially being valuable to the Grovernment, she must 
 take passengers at a certain time; she must make mail connections, 
 and if she has only a third of a cargo she has to sail. Now, in the 
 case of discriminating duties, the boat that brings the material is the 
 one that gets the rebate and the advantage. Subsidies are going to 
 be rather hard of democratic application. There is a certain amount 
 of favoritism in subsidies, and it is going to be almost impossible to 
 avoid such favoritism. 
 
 Representative McDermott. Can you imagine a rule for differen- 
 tial duties that I can not parallel with the subsidy system? 
 
 Mr. Nixon. You may be very ingenious in working it out. I have 
 no doubt that theoretically you can do it. 
 
 Representative McDermott. In the one case you pay the money 
 into the Treasury and take it out again, and in the other case you 
 simply let up on your duties. 
 
 how discrimination would work. 
 
 Mr. Nixon. Suppose you form freight connections abroad. Under 
 the ordinary subsidy we know who would get it. But take cham- 
 pagne or silk and give a rebate of a certain amount of the tariff to the 
 American ship which brings them in. It drives all those freight con- 
 nections and all those people right to the American ship. Every com- 
 mission merchant in town will be keenly eager to get his merchandise 
 on board the American ship. I think there is quite a little difference. 
 You would have a little trouble in paralleling it, the ramifications 
 being so great. 
 
 Representative McDermott. Continue your illustration in the case 
 of champagne. 
 
 Mr. Nixon. I am talking about package freight, which is of high 
 grade and which runs up very high to the ton. 
 
 Representative McDermott. With discriminating duties we have 
 a schedule of duties, and in its application to package freight we 
 make certain deductions, if it is brought in American bottoms. If 
 those deductions are not made the full tariff will be paid into the 
 Treasury, and we can allow it as a subsidy. That allowance of sub- 
 sidy will make the owner of the ship just as keen to get the business 
 as the other system. 
 
 Mr. Nixon. I do not think so. With discriminating duties you pay 
 the man who does the work. 
 
 THE relative COST. 
 
 Senator Lodge. It is a very impoi-tant' question as affecting the 
 United States Treasury. It is not a question as to who pays the money. 
 Assume, now, that you make a reduction of 10 per cent on goods 
 brought in American built and owned vessels. Our revenue from 
 
86 HEAKIJSTGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 imports, in round numbers, is about $360,000,000. If the total imports 
 were brought in American vessels it woxild mean a loss to the Treas- 
 ury of $35,000,000. 
 
 Mr. Nixon. Yes, but if we were to build up the merchant marine 
 
 Senator Lodge. If you bring half of it in American vessels it would 
 be seventeen and a half million dollars that you take out of the Treas- 
 ury. Suppose we gave to our merchant marine as heavy subsidies 
 as France does to hers. How much would it amount to out of the 
 Treasury? 
 
 Mr. Nixon. I suppose it would amount to about twelve or fourteen 
 million dollars. 
 
 Senator Lodge. Eight million dollars the Commissioner of Naviga- 
 tion reported. 
 
 Mr. Nixon. Eight or nine million is what was called for under the 
 Ilanna bill. 
 
 Senator Lodge. Nine million dollars under the Hanna bill. 
 
 Mr. Nixon. Yes. 
 
 Senator Lodge. That is the highest amount which has been pro- 
 posed. 
 
 Mr. Nixon. Yes. 
 
 Senator Lodge. So far as concerns the effect on the Treasury of 
 discriminating duties, that system would take about twice as much? 
 
 Mr. Nixon. It would reduce the taxes enormously. 
 
 Senator Lodge. Now, here is another point on the matter of dis- 
 criminating duties. One of these great American liners, bringing 
 package freight of great value, would of course make an immense 
 saving in duties. 
 
 Mr. Nixon. Yes. 
 
 AS TO the southern TRADE. 
 
 Senator Lodge. And there would be a rush to her, such as you 
 spoke of. But we are especially anxious of course to build up our 
 trade with the countries south of us. Now a large proportion of the 
 imports from Brazil for instance, coffee and rubber and articles of 
 that sort, come in free. 
 
 Mr. Nixon. Undoubtedly. 
 
 Senator Lodge. And then there are hides, which come in with a 
 very low duty. The ships bringing those articles would get nothing. 
 There would be no inducement to put an American ship in that trade. 
 
 Mr. Nixon. You get back to the old slogan of tariff for revenue. 
 It might be necessary to impose a duty. That is for you people in 
 legislative halls to work out. 
 
 Senator Lodge. Unless on articles now free you put a duty when 
 brought in foreign ships, there would be no inducement to American 
 ships to enter the trade. 
 
 Mr. Nixon. There is no question about that. 
 
 Representative McDermott. You say that with discriminating 
 duties the foreign shipper will seek the American ship. 
 
 Mr. Nixon. I did not say that. I said there would be a strong 
 tendency to ship under the American flag. 
 
 Representative McDermott. Why? 
 
 Mr. Nixon. Becaiise it would be the cheapest. 
 
 Representative McDermott. Why any cheaper? 
 
HEARINGS BEFORE THE MERCHAKT MARINE COMMISSION. 87 
 ASSURED CARGOES, LOWER RATES. 
 
 Mr. Nixon. Because with assured cargoes, if necessary, we could 
 make the rates cheaper. And if you have lower rates on those ships, 
 every one would want to ship on them. They could charge the same 
 rate of freight that the other man did, but 
 
 Representative McDermott. Where would there be anything to 
 encourage American shipping in that proposition? 
 
 Mr. Nixon. It would give them business which they have not now. 
 
 Representative McDermott. You have allowed to the importer the 
 differential duty. Unless that duty accrues to the owner of the ship 
 it will not benefit American shipbuilding at all. Therefore, if there 
 is any percentage of that differential 
 
 Mr. Nixon. It did do it in the olden times. 
 
 Representative McDermott. If any portion of that differential duty 
 induces business in foreign countries because it lowers the rate of 
 carriage at all, it can not accrue to the benefit of the American ship, 
 or at least that portion of it can not. Therefore you will be giving 
 some percentage of your differential to the owner of the ship or the 
 line that owns the ship, in order to secure customers abroad. 
 
 Mr. Nixon. Do you suppose that if there was a demand for ton- 
 nage, they would not jack up the rates, which would help the ships? 
 
 Representative McDermott. I have no doubt it would, and I have 
 no doubt a direct subsidy would help ships; but as I say, as to that 
 portion of it which becomes a factor in obtaining business for Amer- 
 ican ships, it has nothing to do with the two questions which you say 
 are involved — one the prime cost of building a ship, and, second, the 
 cost of maintaining it. 
 
 Mr. Nixon. If you have to run your ships with half cargoes, with 
 discriminating rates on railroads there 
 
 Representative McDermott. I am not talking about that. I want 
 to get at what the system does. 
 
 Mr. Nixon. It gi^s business to the American ship. 
 
 Representative McDermott. It gives business to the American 
 ships in three ways — first, by enabling the American capitalist to build 
 the ship; second, by enabling the American capitalist to man the ship 
 and put it in commerce; and, third, by enabling him to devote a por- 
 tion of the differential duty to the seeking of a cargo abroad. 
 
 Mr. Nixon. Certainly if does; and to-day we have not those rami- 
 fications. We have not those established freight connections through- 
 out Europe. The other companies have them. There is not the 
 opportunity for young Americans abroad at the points to which we 
 are shipping on American ships. That is what we want to build up. 
 We want the business. 
 
 A THIRD FACTOR. 
 
 Representative McDermott. In the system of differential duties 
 you must have a third factor or else there is no difference whatever 
 between the idea of differential duties and a direct subsidy. 
 
 Mr. Nixon. If we drive the trade to American ships, the trade will 
 be profitable, and if the ships have to raise the rates, they will be 
 raised, but we shall in that way get a demand for ships which will 
 remove the building handicap, and with assured trade in American 
 bottoms warranting the application and establishment of economical 
 
88 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 methods going with large undertakings, we should gradually remove 
 even the increase cost of running vessels. 
 
 Representative McDeemott. You must have the third factor as 
 affecting the foreign shipper. There is nothing in a direct subsidy 
 to enable the investment of American money in ships and to meet the 
 difference in wages 
 
 Mr. Nixon. Not unless you can give them some advantage. 
 
 Representative McDbrmott. Which would induce foreigners to ship 
 in our bottoms? 
 
 Mr. Nixon. Not at all. 
 
 Representative McDermott. But under the proposed differential 
 tariff you have a third element, small or large, that will enable our 
 shipowners to say to customers abroad, "We will ship for less than 
 your home ships, and our Government wiU pay the difference." That 
 is the third factor which enters into differential duties. 
 
 Mr. Nixon. It is a factor. 
 
 The Chairman. Is not this about it: If goods can be shipped on 
 American vessels for 10 per cent less tariff duties here than if shipped 
 on British or German or French vessels, the American ships will be 
 likely to get the business? 
 
 Mr. Nixon. That is what I say. We want to drive the business to 
 American bottoms, which will give us American ships. 
 
 The Chairman. Furthermore, is it not a fact that in that event you 
 might possibly shade your prices for carriage a little? 
 
 Mr. Nixon. No, you would be able to put them up. That is the 
 great advantage. 
 
 The Chairman. I mean to shade them up, not down. 
 
 Mr. Nixon. Yes, sir. 
 
 Senator Martin. Even if the freight rate were a, little higher, the 
 shipper would insist upon his goods being brought on the American 
 lines? 
 
 Mr. Nixon. Yes, sir; he would insist upon it. 
 
 Senator Martin. As long as there was any margin of profit he 
 would require his goods to come on an American line? 
 
 Mr. Nixon. People will get what they want. If the shipper or the 
 importer wants his goods to come here by a certain line, he will order 
 them, shipped that way. 
 
 Representative McDbrmott. I do not want to tax your patience. 
 
 Mr. Nixon. I am very patient. I am only too glad to give you any 
 information I can. But I am not an expert on the tariff. 
 
 THE risk op reprisals. 
 
 Representative McDermott. You are a very good one. You have 
 that third factor. Now, your differential duty will apply to the cargo 
 carried one way. Can you imagine any nation in the world that would 
 not adopt some system of reprisals which would defeat any attempt 
 through differential duties to build up the American merchant 
 marine? 
 
 Mr. Nixon. We do not mind their reprisals. England can not 
 afford to interfere with the importation of breadstuffs and cotton, the 
 factors of return cargoes. We must have return cargoes. That is 
 the secret of success on the ocean. 
 
 Representative McDermott. You would undoubtedly encounter a 
 system of reprisals. 
 
HEABIN68 BEFORE THE MERCHANT MARINE COMMISSION. 89 
 
 Mr. Nixon. Yes, undoubtedly; but you make it to the advantage 
 of the importer to bring his goods 
 
 Representative McDeemott. What is going to result? 
 
 Mr. Nixon. You will bring a large quantity of goods here on Amer- 
 ican boats. Those boats will center at New York, for instance. The 
 trains leave here distributing those goods throughout the United 
 States. Naturally there is going to be a flow back of all sorts of prod- 
 ucts, and the ships will get their share. If you help them at least one 
 way, they will take care of themselves on the other side. They can 
 compete with the other fellow when they have the advantage one way. 
 Let them hustle with the other fellow. They would do it. Many ves- 
 sels come to New York in ballast to get a return cargo. 
 
 Senator Lodge. Under the general conditions of the treaties 
 
 Mr. Nixon. The favored-nation clause? 
 
 Senator Lodge. No. I am referring to the clause that prevents dis- 
 crimination in duties. 
 
 Mr. NrxoN. In the commercial treaties? 
 
 Senator Lodge. The treaties have a clause preventing discriminat- 
 ing duties. 
 
 Mr. Nixon. In other words, you give them the same privilege they 
 give us. 
 
 Senator Lodge. Yes. The treaties are against any discriminating 
 duties. If we abrogate those treaties and put on a discriminating duty 
 here, is it not but natural to suppose that the nations with which we 
 have such treaties and abrogate them wiU immediately do the same 
 thing on goods going into their ports? 
 
 BELMONT AND STJLZBB BILLS. 
 
 Mr. NixON. That has been suggested. It might be the start of a 
 commercial war. Mr. Oliver Belmont in the last Congress and Mr. 
 Sulzer in the present Congress introduced discriminating duty bills. 
 Mr. Belmont's bill was weU thought out and favored certain classes 
 of vessels to the degree that was desirable in our merchant marine. 
 This was a decided advance over the original discriminating duty bill. 
 
 Mr. Sulzer's bill went further, and in a very ingenious way avoids the 
 abrogation of treaties by only discriminating on freight in indirect 
 trade; that is, discrimination only holds on a foreign vessel bringing 
 goods from a country different from its own. 
 
 Mr. Belmont's bill provided also for rebates in tonnage taxes and 
 required considerations for Americans in the crews. 
 
 Representative McDebmott. The last question I have on that line 
 is this: What is the percentage of exports to imports that you would 
 carry in American bottoms? In other words, if there was a 10 per 
 cent retaliation by France, what would be the effect on the exports of 
 this country, in dollars and cents? 
 
 Mr. Nixon. No one could tell. It would be only a guess. 
 
 Representative McDermott. You give a 10 per cent differential on 
 goods brought from France to the United States in American bottoms. 
 France retaliates and impost s an additional duty of 10 per cent on 
 goods brought to France in American bottoms. 
 
 Mr. Nixon. If the Senator will permit me to use an illustration in 
 his own locality. New England, I think almost the same thing will 
 apply here. We can all remember when clocks and nutmegs were 
 produced in New England cheaper living drew these industries to the 
 West. It is the same thing in Europe. They must have cheap food 
 
90 HEARINGS BEFOBE THE MEKCHANT MARINE COMMISSION. 
 
 stuffs and cheap raw material. I do not think they would dare to dis- 
 criminate against us. It would simply help things here. 
 
 Senator Lodge. France imposes duties on breadstuffs. 
 
 Mr. Nixon. I know she does, but she would not increase those 
 duties simply to make the articles dearer to her people. 
 
 THE POSTAL SUBSIDY LAW BENEFICIAL. 
 
 The Chairman. I wish to ask a question, Mr. Nixon, on a little dif- 
 ferent line. You are familiar, I suppose, with the statute of 1891? 
 
 Mr. Nixon. Do you refer to the postal act? 
 
 The Chairman. Yes. 
 
 Mr. Nixon. I am. 
 
 The Chairman. Am I correct in assuming that that so-called "sub- 
 sidy," no matter what you term it, has saved some American lines 
 from annihilation? 
 
 Mr. Nixon. I think so, and started new ones, though it is not a 
 subsidy act. 
 
 The Chairman. What have you to say with respect to an amend- 
 ment of that act so as to increase the allowance for carrying the mails? 
 
 Mr. Nixon. The only criticism of that which suggests itself to my 
 mind is in the Democratic application of aids to American shipping. 
 I should like to see whatever is to be given to American shipping 
 given in such a way that no privileged person could get it. If you 
 are going to advertise for a mail service on a new line, there is going 
 to be certain competition, and possibly certain favoritism may result, 
 and I do not think the American people like that sort of thing. 
 
 If you can get up a bill which will give to the American merchant 
 marine encouragement of such character as does not bring about any- 
 thing in the nature of special privileges, I think you will achieve the 
 result very much better. 
 
 The Chairman. Suppose we can not get it? To use the phrase of 
 an illustrious "citizen, it is a condition and not a theory that con- 
 fronts us." 
 
 Mr. Nixon. It would undoubtedly start up a number of lines if you 
 extend the provisions of the present postal act. 
 
 The Chairman. Let me elaborate that question a little. There has 
 been, as I recall, no very severe criticism of that statute? 
 
 Mr. Nixon. That statute has been altogether good for the Amer- 
 ican people. 
 
 The Chairman. It has been on the statute books thirteen years. 
 
 Mr. Nixon. Probably no statute passed since the war has done more 
 good. 
 
 The Chairman. Is it your opinion as a practical shipbuilder that, 
 if we can not reach the ideal condition in trying to solve this question, 
 we might get relief by an amendment to that statute? 
 
 Mr. Nixon. Yes; on the theory that half a loaf is better than none. 
 If you expand the postal act, I have no doubt it will attract new lines 
 of steamers, but its value as a builder up will be limited both as to 
 time and vessels. 
 
 MAIL lines to south AMERICA. 
 
 Senator Mallory. Do you not think that in the event the Com- 
 mission should decide to adopt a differential-duty plan it would be 
 advisable to have mail-subsidy lines with South America? We have 
 
HEARINGS BEFOKE THE MERCHANT MARINE COMMISSION. 91 
 
 at present no trade with South America that is not more or less free 
 trade. The differential would not count in that trade. 
 
 Mr. NiXON. All the attempts to run down there under Government 
 protection have been rather disastrous to the men who put in the 
 money. Possibly a discriminating duty bill as forcing trade in Amer- 
 ican bottoms might work better. 
 
 Senator Mallory. I wish to call attention to one fact. We have 
 endeavored to put on fast ships and ships that were really as much 
 passenger ships as freight ships. I was going to suggest whether it 
 would not do, in the event the Commission should take a favorable 
 view of a moderate mail subsidy for certain lines in the world, to say 
 "for vessels of not less than 12 knots;" to put the limitation at 12 
 knots instead of providing for the very fast vessels. I do not think 
 it would make a great difference whether the mails were slower by 
 three days between Rio and New York, the difference between a 12 
 and a 20 knot ship. Would there be any objection to limiting it to 
 12 knots? That would enable you to build ships for that trade which 
 would be cargo ships principally and at the same time they would get 
 the benefit of the mail subsidy. 
 
 Mr. Nixon. That is what I was going to say in response to the chair- 
 man's question. That act has developed only one type of ship — the 
 mail steamship. We want to develop all kinds. We undoubtedly 
 want the great cargo-carrying vessels. 
 
 OUR NEED OF SAILORS. 
 
 There is another point which has not been touched upon at all, and 
 that is the question of the manning of these ships. Mr. Jefferson, in 
 one of his best sayings, said the merchant marine was a nursery of 
 naval strength. If in the war with Spain we had wanted twice as many 
 sailors, we could not have got them. Every man here can shoot a gun ; 
 we can make soldiers very quickly, but you can not make sailors 
 quickly. We also need them for the merchant marine. That is the 
 reason why we want to develop them. If with four or five ships on a 
 line we can start ten or fifteen new postal lines to carry letters and 
 package freight, we would have an increase, of course. 
 
 In the last few years we have already worked up, possibly with the 
 aid of the postal act to which the chairman has referred. An amend- 
 ment enlarging that act would be a temporary relief to American ships 
 until we get what is needed. The postal subsidy is not enough. The 
 Congress did not give enough. If the bill had been passed as it was 
 drawn, it would have built up enormously connections throughout the 
 world; but it is a very meager and very niggardly allowance. 
 
 The Chairman. It was 66^ per cent of the amount proposed in the 
 original bill. 
 
 Mr. Nixon, of the original bill. But it makes quite a difference 
 ence when it is on the other side of the ledger. 
 
 ' A discriminating duty bill would undoubtedly help our merchant 
 marine by making a demand for American ships in the foreign trade. 
 The shipbuilders ask nothing more than a demand for their product, 
 and are not seeking bounties. Shipowners must speak for themselves, 
 but once given a start they should soon be able to meet their foreign 
 rivals on equal terms. 
 
92 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 STATEMENT OF FRANCIS T. BOWLES. 
 
 Francis T. Bowles appeared before the Commission. 
 
 The Chaieman. Admiral, am I correct in saying that you were chief 
 constructor of the United States Navy a short time ago? 
 
 Admiral Bowles. I resigned that position in November last. 
 
 The Chairman. You are now at the head of the Fore River Ship 
 and Engine Company, Quincy, Mass. ? 
 
 Admiral Bowles. Yes, sir. 
 
 The Chairman. It is a very large shipyard, is it not? 
 
 Admiral Bowles. It is quite an extensive shipyard. 
 
 The Chairman. One of the great shipyards of the country ? 
 
 Admiral Bowles. Yes. 
 
 The Chairman. You understand what the Commission is here for? 
 
 Admiral Bowles. Yes, sir. 
 
 The Chairman. We shall be glad to have you give us such informa- 
 tion as you possess on the subject. 
 
 Admiral Bowles. Mr. Chairman and gentlemen, 1 propose to try 
 to lay before you a few facts. It is very difficult to ascertain definite 
 facts bearing on this matter, and those that 1 have are not so certain 
 as I should nke to have them; but they probably are somewhat more 
 definite than what you have already heard. 
 
 COST or SHIP PLATES. 
 
 Considering the relative cost of building vessels in the United States 
 and England to-day, the first element which enters into it is the cost 
 of the material. The current price for steel ship plates in England 
 to-day is between $26 and $27 a ton. The association price in the 
 United States for ship plates to-day is practicalljr $40 a ton. 
 
 There is a difference on ship plates alone, which shows that steel in 
 this country costs 50 per cent more to-day than it does in England and 
 Scotland. On forging and steel castings the relation of additional cost 
 in this country is greater even than that. Practically the only advan- 
 tage in the way of materials which we have over the English ship- 
 builders to-day is in the use of the wood which enters in a very small 
 degree into cargo-carrying boats. 
 
 AS TO WAGES. 
 
 In regard to wages, the ascertainment of their relationship is more 
 difficult, but I have a list of the wages that are current in England 
 and Scotland now, and if we take rates for the different classes of 
 labor and add them up and divide them by the number of classes and 
 compare the result with a similar list of rates current to-day here, we 
 find that our rates on the average are 75 per cent greater than they 
 are abroad. 
 
 That is not the fair way to compare rates of wages. The fail; way 
 would be to take the average rate paid in a shipyard throughout a 
 year, and compare the resmt in a shipyard here and in a shipyard 
 abroad. Of course we can not get that. But as a matter of fact, I 
 know that the average wage paid in American shipyards to-day is 
 in the neighborhood of $2 a day, taking everybody, but exclusive of 
 
HEARINGS BEFOBE THE MERCHANT MARINE COMMISSION. 93 
 
 foremen and draftsmen and superintendents. If that is 75 per cent 
 more than the wage paid in IJngland it would make the wage paid on 
 the other side $1.14. We know it is greater than that. I doubt, 
 however, if the average wage in a Scotch shipyard is greater than 
 $1.50. I think it is probably less than that. 
 
 COST or SHIPS HERE AND ABROAD. 
 
 So, in all probability, from the very best knowledge that I have, 
 the wages in this country exceed those paid in English shipyards by 
 anywhere from 30 to 60 per cent. The shipowner is undoubtedly the 
 best person to give reliable figures on the cost of construction, but it 
 is a very difficidt thing to do when we know how the costs vary even 
 among ourselves. Take, for instance, a ship which waS' bid upon in 
 Philadelphia last week, a vessel of the merchant type^ a thoroughly 
 good all around contract. The lowest bid was $353,000 and the high- 
 est $446,000; and those bids were made by intelligent shipbuilders. 
 
 In the report of the Commissioner of Navigation for 1900 he gave the 
 cost of two cargo vessels which were built in this country upon which 
 bids were obtained in England. The cost of the vessel in this country 
 was $275,000 and in England $214,000. At that time the price of steel 
 in the two countries was exactly the reverse of what it is now. At 
 that time the cost of those vessels in this country was $52 a ton dead- 
 weight capacity, which is the customary way of reckoning for vessels 
 of that kind. The English price was $40 a ton. So there was an 
 excess of cost here at that time of 30 per cent over the English price. 
 If those prices were corrected to-day in accordance with the current 
 prices of material, they would stand this way: The cost of that vessel 
 built in this country would be $60 a ton dead weight capacity and in 
 England $38, which is a difference of 90 per cent. 
 
 A few days ago a friend of mine cabled to England for the price of 
 building a 7,000-ton dead-weight capacity general freighter. Prices 
 were obtained from two reputable sources. They differed by 15 per 
 cent. I have made an estimate of the cost of building a vessel of that 
 same class in Boston harbor. It is 80 per cent more than the mean of 
 the English prices. That represents the state of affairs to-day, 
 
 THE FACTOR OF ORGANIZATION. 
 
 It is true that that state of affairs does not always exist. The ele- 
 ments which go to make up the cost of a ship are just the same as 
 those that go to make up anything else which is manufactured. They 
 depend upon the knowledge and ability of those who manage. They 
 depend. upon the supply of materials, and the supply, and intelligence, 
 and organization of the labor. We have not so organized the supply 
 of all the materials that go into shipbuilding to-day that we can get 
 without any question what we want and when we want it. That 
 largely affects the cost of vessels. There is also much to be done with 
 regard to the proper organization of the labor which goes into the 
 vessel, and I think it is going to take the line of some premium system 
 which shall make it to flie mutual advantage to the men and the ship- 
 yards to do honest work. 
 
 With regard to the remedy necessary, it seems to me that is a ques- 
 tion to be determined by you gentlemen. 
 
94 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Representative McDebmott. Will you furnish the committee with 
 an analysis showing how you arrive at the total, which was 80 per cent 
 more than the cost of building abroad? 
 
 Admiral Bowles. Yes, sir. 
 
 Representative McDeemott. Grive us the items. 
 
 THE TARIFF NOT IMPORTANT. 
 
 Admiral Bowles. Possibly, to save time, 1 might answer one ques- 
 tion which I have heard asked several times, but which nobody has 
 answered, and that is, What would be the effect of removing the tariff 
 upon steel; that is, what would its economic effect be? The tariff 
 amounts to a half cent a pound, and the prices of steel in this country 
 are regulated just so that you can not import steel. If you take off 
 that half cent a pound, it would make a difference in the cost of a steel 
 barge of about 5 per cent. In the cost of a steel schooner it would 
 make a difference of 4i per cent. In the cost of a battle ship it would 
 make a difference of just 1 per cent. So it does not amount to much. 
 
 The only iniiuence it would have upon shipbuilding to-day would 
 be this: The efficiency of the carrying trade on the coast would be 
 increased if everybody could use steel barges and steel boats, because 
 they carry more for the size than wooden boats. 
 
 Now, if j'ou reduce the cost of barges and schooners by 5 per cent, 
 it will be an inducement to go into that construction to a slight extent, 
 but very slight; and that is all there would be to it. 
 
 Senator Lodge. Those figures are very interesting, and they explain 
 why the rebate is never taken advantage of. 
 
 Admiral Bowles. I have one other thing that I want to tell you, 
 and I must go in a few minutes, because I have an appointment, I am 
 sorry to say. 
 
 PRICES OF SHIPS of WAR. 
 
 A year ago I made an investigation for the Secretary of the Navy 
 of the number and amount of battle ships and armored cruisers build- 
 ing in England and the United States on the 1st of last July, and in 
 the course of that investigation I had the curiosity to take from the 
 English estimates the cost of English vessels and from our contracts 
 the cost of ours, and I was astonished to find that the American battle 
 ships and armored cruisers cost practically the same that they do in 
 England. 
 
 In view of the undoubted fact with regard to the cost of wages and 
 material, you will want to know why that is. I can tell you. If the 
 American shipbuilder set the price of battle ships in a business-like 
 way, in the same way that people manufacture cotton, he could not 
 afford to do it. There has been the most cut-throat competition among 
 shipbuilders to obtain these Government contracts, and there is not 
 one of them who is building ships at a price at which he can honestly 
 afford to do it. 
 
 On the other hand, in England the prices that are given to the pri- 
 vate shipbuilders are the same that it costs the English Government to 
 build the ships in the navy-yards. If I could have that system here, 
 I would not want to be in business more than a few years. 
 
 Representative McDermott. We have had testimony to the effect 
 that the difference as against American shipbuilding is 25 per cent 40 
 
HEARINGS BEFOKE THE MEEOHANT MARINE COMMISSION. 95 
 
 per cent, 50 per cent, 76 per cent, afterwards corrected to between 40 
 and 50, and now we have a direct illustration in your experience that 
 the difference is 80 per cent. I would be much obliged if you would 
 furnish to the Commission a statement as to what sort of a ship it was 
 to be, and the items in the cost of construction, showing what was labor 
 and what was material. We have had live figures here inside of seven 
 hours. 
 
 WHY THE FIGURES VARY. 
 
 Admiral Bowles. I think you will see from what I have told you 
 that these things are liable to great variation. 1 have before me the 
 actual cost of the Minneapolis class, which Mr. Baker, when the Com- 
 mission goes to Baltimore, will give you. They were built for the 
 Atlantic Transport Line, and duplicates were built on the Delaware. 
 They were built at the time which was most favorable to us; that is, 
 when steel was highest abroad and lowest here; and even then the dif- 
 ference in the contract price. was 30 per cent, and the contractors on 
 the other side made a handsome profit and our people lost money. 
 
 Representative McDekmott. You spoke of a transposition of the 
 prices. 
 
 Admiral Bowles. Yes, sir. 
 
 Representative McDermott. That is accurate as to the exact 
 figures? 
 
 Admiral Bowles. The exact figures are these. At the time those 
 vessels were built, steel was selling here at $28 a ton and in England 
 at $40.86. 
 
 Representative McDermott. That is a pretty substantial transposi- 
 tion. 
 
 Admiral Bowles. It is almost a transposition of the figures of 
 to-day. 
 
 WOULD "free ships" hurt THE SHIPYARDS? 
 
 Senator Martin. Is any American shipyard building ships for the' 
 foreign service to-day? 
 
 AcGniral Bowles. No keel has been laid in two years. 
 
 Senator Martin. It would do no harm to the American shipyards 
 were you to withdraw from them that line of business. They would 
 be no worse off than they are now. 
 
 Admiral Bowles. Certainly not. 
 
 Senator Martin. Does not that offer the only way to build up an 
 ocean carrying trade? If it costs 80 per cent more to build a vessel 
 here, and if you let our people buy vessels abroad at the greatly 
 reduced price, you would take nothing from the American shipyards 
 that they are now enjoying. Would we not thereby do a great service 
 to the American merchant marine and do no injury to our ship- 
 builders? You have demonstrated that there is no outlet from this 
 except to buy our ships abroad. ' 
 
 Admiral Bowles. I do not agree with you at all. I have not shown 
 anything of that kind. 
 
 Senator Martin. You have to my mind, if we have to pay two 
 prices here; and in buying ships in England we would deprive our 
 -shipyards of nothing they have now. 
 
 Admiral Bowles. I am not asking anything here in the way of 
 favors. I do not think it a proud thing that the industry needs special 
 
96 HBAKINGS BEFORE THE MEKCHANT MARINE COMMISSION. 
 
 legislation to support it. Here is the condition in the United States: 
 Is it worth while to have a merchant marine ? It seems to me some- 
 body has to decide whether it is worth while to have a merchant marine 
 under the American flag. If it is worth while, there are various ways 
 of doing it. One is to give us absolute free trade. Then the Amer- 
 ican shipbuilder would be on a level with every other industry in the 
 United States and he would soon get there. It might take him some 
 time, but he would get there. 
 
 Senator Martin. That is impossible. Everybody knows we can not 
 have absolute free trade in this country. 
 
 Admiral Bowles. I know it. 
 
 The Chairman. What would become of American labor under that 
 condition? 
 
 Admiral Bowles. Of course it is a horrid thought. It is impos- 
 sible. 
 
 Senator Lodge. Labor would have to go down. 
 
 Admiral Bowles. Certainly. 
 
 ONLY FOR foreign BUSINESS. 
 
 Senator Martin. I do not mean to be misunderstood. In the sug- 
 gestion I made about buying ships abroad I had reference to ships to 
 be used entirely in the foreign business, leaving to American ship- 
 yards the monopoly of building ships for the coastwise trade, which, 
 in the near future, will include the Philippines. I did not mean by the 
 inquiry I made to indicate that there would be considered at all a 
 proposition to permit the purchase abroad of vessels for the coastwise 
 trade. But it seems to me, desirable as it is to have a merchant marine, 
 that it will hardly be possible to get the country to approve a subsidy 
 big enough to cover the immense gap which seems to exists. That is 
 my fear, at least. 
 
 Admiral Bowles. Then, of course, the country thinks it is not worth 
 while to have a merchant marine. 
 
 Senator Martin. We can get the merchant marine without paying 
 that big price, by buying the ships where they can be made cheaper, 
 or else we must find a way to bring about a cheaper price for the 
 material that goes into the ship here. 
 
 Senator Mallort. At what figure did you put the difference in the 
 cost of material? 
 
 Admiral Bowles. I told you the market to-day shows an increased 
 price in this country of 50 per cent on steel alone. 
 
 Senator Mallory. There is a difference of about 50 per cent in the 
 cost of the material, taking steel as the standard. What makes up the 
 other 30 per cent? 
 
 Admiral Bowles. Wages; labor. There are other elements, of 
 course. 
 
 Senator Mallory. ' I am speaking of the main element. 
 
 Admiral Bowles. That is the main difference. 
 
 Senator Lodge. Wages have something to do with the price of steel? 
 
 Admiral Bowles. Apparently not. 
 
 Senator Lodge. Do you think the labor cost does not enter into the 
 problem? 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 97 
 
 KEDUOED TO A SCIENCE. 
 
 Admiral Bowles. I think it undoubtedly does; but the reason, of 
 course, why some products of this country can be sold in competi- 
 tion with those produced in England is this: Take bridge building, 
 which has been spoken of before you to-day. There have been a 
 number of enormous railroads built in this country. Consequently 
 the art of bridge building has been developed here to. a very high 
 degree. We do not go abroad and sell Englishmen English bridges. 
 We give them something better — an American-designed bridge, which 
 is produced with the very minimum of labor. The product nas been 
 reduced to a science. It is the same way in the production of steel 
 rails. That process has been studied so that with the vastly improved 
 machinery and a very small amount of labor we can excel their product. 
 In shipbuilding we shall hope to approach that stage when we have 
 the product to deal with. 
 
 Senator Mallokt. Can you tell us why steel plates have gone up 
 from $28 a ton to $40 a ton in the last four years s 
 
 Admiral Bowles. Four years ago there was practically no demand, 
 and steel could have been bought 
 
 Senator Mallokt. I am speaking of steel plates. 
 
 Admiral Bowles. Steel plates could have been bought probably for 
 a cent a pound four years ago. There was nothing going on. Then 
 came the enormous demand which overtaxed the supply and conse- 
 quently the price rose. That price has not yet fallen. 
 
 Senator Malloky. There is still a great demand for steel? 
 
 Admiral Bowles. The demand is not so great now, but the price 
 has been maintained. 
 
 Senator Mallort. Do you know why that is? 
 
 Admiral Bowles. I do not know why it is. 
 
 Representative McDbkmott. It has been maintained by agreement 
 notwithstanding the falling off in the demand for the commodity? 
 
 Admiral Bowles. I was asked if I knew why. I merely know it 
 is so. I do not know why. 
 
 Representative MoDermott. You do not know the fact that there 
 has been a falling off in the demand for steel? 
 
 Admiral Bowles. I stated there had been a falling oflf. 
 
 THE STEEL PLATE POOL. 
 
 Representative McDermott. Is the price regulated by a pool, wEose 
 members meet every quarter or every month and who agree to reduce 
 or to maintain the price? 
 
 Admiral Bowles. So I understand. 
 
 Representative McDermott. The price of steel has not followed the 
 natural law of supply and demand? 
 
 Admiral Bowles. It has not yet. 
 
 Senator Lodge. If we were to have free ships, what would be the 
 effect on American yards ? 
 
 Admiral Bowles. I think they would soon be ruined. 
 
 Senator Martin. By free ships for the foreign trade exclusively ? 
 
 Admiral Bowles. If you have free ships why would it not be well 
 to admit them to the coastwise trade ? 
 
 3a— 04 7 
 
98 HEAEINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Senator Martin. That is a question. Suppose it is not done. Never 
 mind the reason. 
 
 Admiral Bowles. Yes; but suppose it can be shown that that would 
 be a great advantage. . . 
 
 Senator Martin. That is not the proposition we are submitting to 
 you. 
 
 Admiral Bowles. No. 
 
 Senator Martin. The proposition submitted to you is: Suppose we 
 hold a monopoly for the American yards of the construction of ships 
 for the coastwise trade and do not admit foreign-built ships to engage 
 in that trade, but simply allow ships to be bought abroad to engage in 
 the ocean-carrying business between this country and other nations, 
 none of which business is now being done by our shipyards, how could 
 the shipyards be ruined? 
 
 A "free ship experiment." 
 
 Admiral Bowles. The advantage to the shipbuilder in admitting 
 free ships would be this: A considerable portion of the repairs would 
 probably be made in this country. That would be an advantage to 
 shipyards. It would also be an advantage, I believe, in the end, to nave 
 the ship-owning habit encouraged in any way. It would undoubtedly 
 in some way stimulate shipbuilding in the long run. Those are the 
 only advantages that I can see to the shipbuilder in admitting free 
 ships to the foreign trade. I see, however, great disadvantages in 
 this way. It at once discourages the application of capital or industry 
 in the smpbuilding business. It no longer has anything to look for- 
 ward to except what little there is to be done in the coastwise traffic 
 and in repairs. I think the immediate effect would be a great paraly- 
 sis of the business. 
 
 Senator Martin. A paralysis which would give the shipbuilder 
 some increase of business and no diminution in the way of actual busi- 
 ness. You say there would be an increase from two causes and no 
 diminution, because he is doing none of that business now. I can not 
 see how an industry can be destroyed where nothing is taken from it 
 and something is added to it. 
 
 Admiral Bowles. It has not always been as it is now. 
 
 Senator Martin. Almost so. There have been very little bids by 
 this country for the foreign business — very little. 
 
 Senator Lodge. Suppose we admitted foreign-built ships to Ameri- 
 caiTregister. I think it is a little doubtful whether under the present 
 law we could keep them out of the coastwise trade. But as a practical 
 question, if we admitted them to American register, do you not suppose 
 they would go into the coastwise trade in a very short time? 
 
 Admiral Bowles. I think it would be inevitable. 
 
 Senator Lodge. I have no doubt of it. 
 
 Senator Martin. It would not be inevitable unless Congress chose 
 to permit it. 
 
 Senator Lodge. I do not think Congress could stop it. 
 
 Representative Humphrey. Mr. Chairman, I shouW like to have the 
 Admiral state what his remedy is for the present conditions. I should 
 like to hear his idea. 
 
 The Chairman. The Commission will be very glad to have the 
 Admiral give us his views on that important point. In fact that is 
 what we are here for. ' 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 99 
 SUBSIDIES TO SHIPBUILDERS AND OWNERS. 
 
 Admiral Bowles. 1 am rather reluctant to express any opinion upon 
 that subject, but being of a direct habit of mind and not being accus- 
 tomed to considerations affecting the tariflf, I believe it is worm while 
 to the Government of the United States and to the country to have a 
 merchant marine. I believe it is an economic question which must be 
 answered in the affirmative. Now, considering the present conditions, 
 I believe the cheapest and most direct way of creating a merchant 
 marine would be for the Government to step in and equalize the cDst 
 of vessels, so that a shipowner could get his vessel as reasonably here 
 as he could abroad, and that then the additional cost to the shipowner 
 of running his vessel under the American flag should be made up to 
 him in some direct manner. 
 
 I see no occasion for being afraid of the subsidy idea. If you are 
 going to do it, why not do it in the most open and direct way — pay a 
 bounty to the shipbuilder, whatever is necessary to make it an attractive 
 proposition to the shipowner, and pay the shipowner the additional cost 
 of running his vessel under the American flag. 
 
 Senator Lodge. That is the French system? 
 
 Admiral Bowles. Yes. 
 
 Senator Mallort. That would amount to about 110 per cent, based 
 on the first cost of the ship? 
 
 Admiral Bowles. At curren t p rices. 
 
 Eepresentative Humphrey. Would you expect those conditions to 
 continue? 
 
 Admiral Bowles. No; I should think that whatever was done would 
 have to be done for a limited and fixed period, because no persons 
 would put their money into ships unless they saw a definite time in 
 which they could operate under fixed conditions. 
 
 The Chairman. What advantage would the Government get from 
 the carrying out of your suggestion? 
 
 Admiral Bowles. The Government would be able by regulating the 
 conditions under which the acts should be enforced, to create a class 
 of vessels which would be of great service in time of war. 
 
 May I ask to be excused now? 
 
 The Chairman. We are very much obliged to you, Admiral. 
 
 Senator Martin. I should like very much to ask some further 
 questions. Will the Admiral be here to-morrow ? 
 
 Admiral Bowles. No; I must go back to-night. Senator. 
 
 STATEMENT OF JOHN CEAIG. 
 
 John Craig, president of the Craig Shipbuilding Company, of 
 Toledo, Ohio, appeared before the Commission. 
 
 The Chairman. Mr. Craig, you may proceed in your own way. 
 
 Mr. Craig. I will say that I coincide with everything that Mr. 
 Bowles has said; that is my idea exactly. 
 
 The question is, is a merchant marine worth anything? In my 
 younger days I lived in New York, and I remember the time when we 
 had 36 sliips, all for the foreign trade, upon the stocks here at one 
 time. After that I went West, and became interested in business in 
 1867 on the Detroit River. 
 
100 HEAKING8 BEKORE THE MERCHANT MARINE COMMISSION. 
 
 I should like to show you in a few words how our business has 
 developed and what it sprang from. At that time the mosti popular 
 vessel we had was what was called a canal vessel, which carried 
 about three or four hundred tons of ore, and it made seven trii)s from 
 Lake Superior to Ohio ports in a year. At that time we received $8 
 a ton for carrying that ore. The only reason we got f 8 a ton was 
 because of the necessity of a tariff for revenue, which was placed by the 
 Government at that time upon all materials and which gave an impetus 
 to the manufacture of iron. At the time I speak of steel rails were worth 
 a hundred and forty dollars a ton. One man started to build a little 
 larger vessel, and the business continued on and continued on and con- 
 tinued on until to-day, about two weeks ago, there was a vessel 
 launched there which is calculated to carry 11,000 tons. Last year 
 our average price was 80 cents a ton. 
 
 The Chaikman. As against $8 in 1867? 
 
 WHAT COMPETITION HAS WROUGHT. 
 
 Mr. Craig. Against $8 in 1867. Now, what has brought that down ? 
 The natural competition between ourselves. Another man saw that 
 this man was making some money, and he went into it with a little 
 improved machinery. It is the same way with our shipbuilders. Now 
 we are building vessels for one-half of what we built tnem for in 1867. 
 
 1 am naturally a protectionist, and I feel a good deal like Abraham 
 Lincoln did, as shown in a story that is given out as coming from him. 
 A gentleman desired to talk with him upon the tariff question, and 
 attempted to show him that the tariff was wrong; and after he had 
 labored with Lincoln for two hours, our honest old Abe said, "Well, 
 this thing to me is practical. Let me give you an instance of it. If I 
 buy a pair of pants in Europe, and pay $10 for them, they get the $10 
 and we have the pants; but if I buy them here, we have the $10 and 
 the pants, too." That is the way I feel about it. 
 
 The question in my mind in reference to the merchant marine is 
 whether it is worth what it will cost. To-day our people, our natural 
 resources, our climate are unsurpassed. Are they equal to the com- 
 petition of the world? I say my belief is that if you will give us some 
 subsidy, some rebate of duties, something that will enable men to see 
 there is something in the merchant marine, in ten years we will build 
 for England as we did in 1857, when I served my apprenticeship under 
 William H. Webb. 
 
 To-day we are overdone on the Lakes. On the 1st day of July there 
 will not be a vessel of any description being built on the Great Lakes, 
 except one, she being a ferryboat for an individual service outside of 
 the general business. We have pushed our works ahead. Ten years 
 ago I was able to build four vessels; now I could build fourteen. The 
 American Shipbuilding Company was not then in existence. They 
 built 49 last year. On the 1st of July they will have nothing to do. 
 
 AN ENGLISH COMPARISON. 
 
 In England the conditions are entirely different. A week ago last 
 Saturday I started down the Clyde, and in going down I naturalh' 
 looked to see how manj' vessels there were, and when we passed a lit- 
 tle port of about 50,000 inhabitants I counted 38 vessels under con- 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 101 
 
 struction and room for about 20 more. I spent one day about two 
 weeks ago at the yard of Denny, in Dumbarton. 1 was received with 
 gi'eat kindness and courtesy. 1 gave them all the ideas I had, and 
 received from them all they had. The question with me was, where 
 was the diflference. They were alert. They were using our air 
 machines, hydraulic machines, improved machinery of every descrip- 
 tion. I saw where the difference came in mostly. 
 
 I saw there a boy of eight years using a steam hammer that we 
 would not dare to let anybody operate unless he was a very practical 
 man. 1 said to them, " How can you let that boy do that? How long 
 hours has he?" They said, "We have two of them — one works in 
 the morning, and one in the afternoon;" and instead of paying $3.50 
 a day, as we wotdd, for a man to use that machine, they were paying 
 that boy 3 shillings (seventy-five cents). That is the only way to-day 
 in their labor they can beat us. They have improved machinery; 
 they have the air machines; they have improved cranes; they have 
 everything we have; only they have such a dense population that the 
 children have to work, and do work. Where we would have men 
 picking up bolts around the yard they have boys. We are paying our 
 joiners double what they are paying theirs. 
 
 I do not know that I have anything more to say. 
 
 Thereupon, at 5 o'clock and 45 minutes p. m., the Commission 
 adjourned until to-morrow, Tuesday, May 24, 1904, at 10 o'clock a. m. 
 
 Office of the Board of Trade and Transportation, 
 
 New York City, N. Y., May U, 190^.- 
 The Commission met at 10 o'clock a. m. 
 
 Present: Senators Gallinger (chairman), Lodge, Penrose, Martin, 
 and Mallory, and Eepresentatives Minor, Humphrey, Spight, and 
 McDermott 
 
 The Chairman. Mr. Hervey C. Calkin has asked permission to 
 occupy five minutes. 
 
 STATEMENT OF HERVET C. CALKIN. 
 
 Mr. Calkin. Mr. Chairman, this is quite unexpected. 1 asked you 
 to give me five rninutes, but I did not expect to be called upon at 
 once. However, I am very happy to have the opportuhity to present 
 myself to the Commission as the only living member of the first com- 
 mittee on this subject, appointed in the Forty-first Congress, under 
 James G. Blaine as Speaker, We had onl}"^ members of the House 
 of Representatives on the committee. It was not a joint committee of 
 the Senate and the House. We went over tliis whole matter, the same 
 as you are going over it, and I am glad to meet you gentlemen, as I 
 am the only living member of that committee. Judge Holman was a 
 member of it. Mr. Wells, of Missouri, was a member of it. There 
 were several other gentlemen — one gentleman from Pennsylvania. 
 
 But they have all gone over the river, and I stand here to-day to 
 advocate the shipping bill recommended by the Shipping League. I 
 forget the Congress, but we had a league which met often. Mr. Van- 
 derbilt, who is now acting in regard to this matter, was treasurer. 
 We had a unanimous report. Our bill was defeated. Another bill 
 was passed, helping some two or three steamship lines. 
 
102 HEA.EING8 BEFORE THE MERCHANT MARINE COMMISSION. 
 
 I say to you, Mr. Chairman and gentlemen, that you can go over 
 the whole matter, but you will find nothing to fit the case, to my mind, 
 as well as that bill. It was a bounty bill, a subsidy bill, not a differ- 
 ential bill at all, sir. 
 
 I am in a mechanical line of business. 1 am not a builder of hulls; 
 I am not a builder of marine engines; but I have been identified with 
 the shipbuilding business for nearly fifty years. 1 am personally 
 acquainted with all of the matters and the business connected with it. 
 I am personally acquainted with pretty nearly all of the shipbuilders 
 in the country, and I am proud of it. I am j)roud that I stand here 
 to-day as a representative of the mechanical interests, and I hope to 
 live to see the day when there will be passed a bill by a Republican 
 Congress — or a Democratic Congress, if the Republicans do not pass 
 it; but, I hope, by a Republican Congress — representing all the varied 
 interests of this country, which will give protection to an industry 
 which has been only partially recognized. 
 
 NINETY PEE CENT TO LABOR. 
 
 Ninety per cent of the cost of a ship, as has been well shown, goes 
 to labor. That commences in the forest and the mine and goes through 
 all the various manipulations and mechanical operations that enter into 
 the construction of a ship. When you protect that industry you are 
 not only protecting the man who builds the ship and the man who owns 
 the ship, but you are protecting the man who applies the labor — the 
 sweat of his brow — in the building of that ship. It is a protection that 
 ought to be given. 
 
 It is a disgrace to this country, Mr. Chairman and gentlemen, that 
 we have not more lines of steamers to Europe and lines to South 
 America, and that we have not lines to other foreign ports, as we 
 ought to have to-day. I could say a great deal more on this subject, 
 because my heart has always been wann upon it. I spent several 
 years with my old friend, John Roach, and with other gentlemen in 
 going to Congress after I was a member, after we failed in our bill 
 that was presented by the Lynch committee. That was a good bill also. 
 
 I want to say to you, Mr. Chairman, by the way, that Mr. Morrell 
 was chairman of the committee. It was known as the Lytich bill. 
 We issued a book which you will find, of course, in the Library of 
 Congress. I have one at home. That bill had a unanimous report. 
 No minority report was made. I then was a Democrat, and I voted 
 as a Democrat and supported the bill as a Democrat. Mr. Wells was 
 a Democrat, and supported that bill, and we were not found fault 
 with by the Democratic party. Mr. Holman did not make a minority 
 report. He did not vote for the bill, but he promised me that hie 
 would not make a speech against it, and he did not. Now, you all 
 know the record of Judge Holman. You know his positive Democ- 
 racy. Those are facts. I say that to the Democratic members on the 
 Commission. 
 
 There is another instance of which I wish to tell you. Mr. Cum- 
 mings, one of our most popular members from this city, was the only 
 Democrat who voted for the shipping-league bill, and he also voted 
 for the other bill. He was not ostracized by his party in the city of 
 New York, but, on the contrary, he was one of the most popular men 
 we had from this great city. The press of this city opposed it- that 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 103 
 
 is, many of them, not all of them, but Amos Cummings, and 1 say it 
 with a great deal of pride and a great deal of feeling, nad one of the 
 grandest and largest funerals that any Democrat dying in this city, 
 ever had, and he never was found fault with for voting for the sub- 
 sidy bill. 
 
 I will say to you gentlemen also — I want to say it because I have a 
 great deal of pride and some feeling in regard to it — that I changed 
 niy politics on account of the shipping bill. I went to the Congress as 
 a Tammany Hall Democrat. I voted with the Democratic party, but 
 when there came up the question of free trade and sailors' rights, your 
 humble servant left the party and joined the Republicans; and I 
 stand here to-day as an advocate of protection to American industry, 
 in every shape and form. 
 
 Now, gentlemen, I will not take any more of your time. I certainly 
 wish you great success, and I hope 1 may live to see the passage of a 
 bill that Avill help the shipping interests of this country. 
 
 Gentlemen, I am obliged to you for your attention. 
 
 STATEMENT OF WILLIAM D. SEW ALL. 
 
 The Chaibman. Is Mr. "William D. Sewall, of the firm of Arthur 
 Sewall & Co., Bath, Me., present? 
 
 William D. Sewall appeared before the Commission. 
 
 The Chaikman. Mr. Sewall, are you engaged in shipbuilding? 
 
 Mr, Sewall. I am. 
 
 The Chairman. What class of vessels do you construct? 
 
 Mr. Sewall. Sail cargo-carrying vessels for the foreign trade. 
 
 The Chairman. Any steam vessels ? 
 
 Mr. Sewall. No steam vessels. 
 
 The Chairman. You were present yesterday at the meeting of the 
 Commission? 
 
 Mr. Sewall. Yes, sir; I was. 
 
 The Chairman. You understand what we are trying to accomplish 
 here and the class of information we are seeking to obtain ? 
 
 Mr. Sewall. I think I do. 
 
 The Chairman. In your own way, kindly present your views. 
 
 Mr. Sewall. Mr. Chairman and gentlemen of the Commission, 1 
 represent Arthur Sewall & Co., of Bath, Me. The city of Bath has 
 been a shipbuilding center for one hundred and fifty years, and I 
 might say has stood uninterruptedly at the head in the production of 
 sail tonnage in the United States. Many of our citizens have been 
 interested not only in the building, but in the sailing of square-rigged 
 vessels for .the foreign trade, and in 1854 there were built in this city 
 59 full-rigged ships. During the past two years we have built none. 
 In fact, of late years, my firm alone is the survivor of this great 
 industry. Our yard was established in 1823. We have built over 
 100 vessels, mostly for the foreign trade, and, in years past, pur ships 
 have been in nearly every maritime port of importance in the world. 
 At the present time we are the managing owners of 12 vessels, all 
 square-rigged with one exception, and varying in carrying Kipacity 
 from 3,000 to 5,000 tons each. ; 
 
 Ten years ago we commenced the construction of steel ships, ,build 
 ing the first steel sailing ship built in America. 
 
104 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 AS TO FOREIGN MATERIAL. 
 
 1 will say here that we have built one of imported steel. It was 
 asked yesterday what was the objection to using foreign steel for the 
 construction of our vessels. There are several reasons which 1 might 
 state, but the first and the all-important reason to my mind is that it 
 is un-American. We want to build American vessels from American 
 material and by American labor. There are other reasons, and one is 
 that in importing foreign material the rebate of duty has to be 
 indorsed on the ship's register, and she can not be employed in the 
 coastwise trade; and in our sailing ships, sometimes, especially on the 
 Pacific coast, when freights are down, as we have seen them very 
 often, we like to use up the time waiting for the next crop, or for some 
 change in conditions, by making one or two coastwise voyages. In 
 that case we are shut out, and we are also shut out from disposing of 
 the vessel as we could when we find a purchaser desiring a clean register. 
 To-day our yard is closed. It has been closed now for over a year, 
 and as much as we would like to open it, we can see no encourage- 
 ment for doing so at present. We have held on hoping in vain for 
 better times, and some years building more from sentiment than from 
 sound business judgment. 
 Senator Penrose. How long do you say the yard has been closed ? 
 Mr. Sew ALL. Over a year now. 
 
 Representative Minor. How many men did it throw out of employ- 
 ment? 
 
 Mr. Sewall. We averaged 200 or better. Of course we realize 
 that we have been obliged to go along in a small way. We would 
 like, and we could easily employ, double or treble that number. We 
 have the water front; we have the facilities; but there is no encourage- 
 ment to do it. 
 
 I think I can say the limit has been reached. Every shipyard in 
 the country has a similar tale to tell — some ruined and in receivers' 
 hands, others closed, and the remainder running at a loss. And so it 
 is with our foreign-carrying trade, for the two go hand in hand. The 
 condition is truly deplorable, but I feel, gentlemen, that our story, so 
 far as it relates to the necessity of some legislation being passed in 
 behalf of American shipping, has already been told at the various 
 hearings held at Washington during the session just closed, and to 
 some extent already at the hearings here. 
 
 That there is need of legislation I assume you take for granted, and 
 the great question before you on which there are so many different 
 opinions, is how to best meet and remedy the situation. I believe we 
 are all somewhat doubtful as to the proper course to take. What we 
 want is I'elief that will be liberal at the start, effective at once, and of 
 sufficient duration so that capital and enterprise will not hesitate in 
 doing their part. 
 
 There have been a number of methods proposed. The free-ship 
 theory I discard. In fact, it is hard far me to conceive how anyone 
 with true American spirit can look with favor on or see any benefits 
 coming from such a policy. At the best, it only meets the issue to a 
 limited extent. We would still have the difference in maintenance, 
 manuipg, and operating to contend against. We would have no ship- 
 yards, find the incentive for American enterprise would be largely 
 diminished. 
 
HEABTNGS BEFORE THE MERCHANT MARINE COMMISSION. 105 
 
 Discriminating duties would, no doubt, prove most effective, and 1 
 believe we are a nation strong enough and great enough to carry the 
 issue through, if we determined to do so; but there would be many 
 obstacles to meet, and many treaties to abrogate, some of which I 
 understand would take from one to two years. 
 
 I believe we are a nation strong enough and great enough to carry 
 the issue through if we determine to do so, retaliation or no retaliation; 
 but, gentlemen, there would be many obstacles to meet, many treaties 
 to abrogate, some of which I understand have from one to two 3'ears 
 to run. 
 
 The plan of increasing tonnage dues might prove desirable, but if 
 foreign tonnage is to be shut out by this method the increase would 
 have to be considerable, and as American shipping regained the trade 
 the burden would fall on us, and the subsidy to compensate would 
 necessarily have to be extremely large, which would no doubt be mis- 
 construed by many and be objectionable. 
 
 IN FAVOR OF DIRECT SUBSIDY. 
 
 I am therefore of the opinion, notwithstanding the sentiment held 
 by many against direct subsidies, that some bill embodying this form 
 of relief, giving a fixed rate on all vessels alike, based on capacity and 
 mileage, and with a special subsidy for mail steamers, making it as 
 simple and concise as possible, would be the least objectionable, the 
 most speedy remedy, and therefore the most satisfactory measure. 
 
 It must be sufficient to meet not only the disadvantage we suffer in 
 the construction and repairs of our vessels, as compared with our 
 foreign rivals, but also meet the difference in the cost of manning and 
 operating as well as the advantage now derived from holding the 
 trade and all which that implies. 
 
 The French Government, besides paying a building bounty, gives 
 a mileage subsidy of about 3.20 cents per ton per 100 miles sailed, 
 which practically covers the operating expenses of the vessel. While 
 I do not consider it necessary to pay such a subsidy as this, yet to be 
 effective, with the conditions as now existing, it should be liberal, and 
 in granting some form of mileage subsidy, we should bear in mind it 
 is only giving shipping the protection which has long been granted 
 many o^er industries of a far less national character and importance. 
 
 CONSTITUTIONALITY OF SUBSIDY. 
 
 Representative Spight. Would you advocate the giving of subsi- 
 dies to all vessels, both steam and sail, engaged in the foreign trade? 
 
 Mr. Sewall. Right straight through. I would make no distinc- 
 tion. And for mail subsidy, give them something in addition. 
 
 Representative Minor. Keep it separate. 
 
 Mr. Sewall. Yes; make it a separate matter. 
 
 Representative Spight. Have you ever thought about the question 
 of the constitutional authority for legislation of that kind? 
 
 Mr. Sewall. 1 have thought it would be constitutional. I did not 
 suppose there was any objection to it. I thought it would be less 
 ob]ectionable than the other method. 
 
 Representative Spight. I refer to the power under the Constitu- 
 tion to enact legislation of that sort. 
 
106 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Representative Minok. It would operate about the same as the sub- 
 sidy to the Southern Railroad. We never questioned the constitu- 
 tionality of that. 
 
 Representative Spight. That is for service rendered. 
 
 Mr. Sewall. I certainly consider that there is a service rendered 
 here if we can regain our foreign trade. 
 
 Representative Spight. For the mail subsidy I can see a service. 
 This is simply a bonus — a gift. 
 
 Mr. Sewall. We foster our other industries in one way and another. 
 Why should shipping be left out? 
 
 Representative Spight. I wanted to know whether you had studied 
 that branch of the subject or not? 
 
 Mr. Sewall. I have always felt that it was certainly within the 
 power of Congress to assist us in that way. 
 
 The Chairman. As much so as loaning or giving money, for instance, 
 to expositions? 
 
 Mr. Sewall. I should think quite as much, or more so. 
 
 DEEP SEA SHIP NOT PROTECTED. 
 
 In this connection the policy of our country is protection; we have 
 subsidized our railroads; fostered our industries; spent money lavishly 
 on our rivers and harbors, and, you might say, solely for the benefit 
 of foreign shipping so far as our foreign trade is concerned, and 
 yet we have done nothing to encourage our own merchant marine. 
 Here I differ with a statement that was made yesterday that the ship- 
 builders have protection. 
 
 Standardization, to my mind, is not alone the trouble. I recognize 
 the merits and the economies and the advantages to be gained from it, 
 and I know much can be accomplished if we have the opportunity, but 
 it alone will not help us. Even if this were perfected we would still 
 have the difference in the cost of labor and material to contend against. 
 
 The completed ship, one of the highest and grandest forms of man- 
 ufactured production, reaching out to the various industries on which 
 it draws and giving employment to American labor throughout the 
 country, is not protected. This should be considered by those un- 
 friendly to this form of relief, and they should also bear in mind the 
 great advantage coming to our people in opening up trade in foreign 
 countries through our own agencies. Why should we be content to 
 simply raise our products and merely transport them to our seacoast 
 when we can deliver them to the markets of the world, saving not only 
 the transpoi-tation, but receiving countless benefits, besides, in the 
 opening up of trade ? 
 
 The few millions spent to save this trade will be returned to us 
 many times over. It would give us a merchant marine as an auxiliary 
 to our Navy and shipbuilding plants we could depend upon in time of 
 war. 
 
 We ask for relief on broad grounds, without regard to party lines, 
 as citizens interested in the welfare of our country, desiring to develop 
 and maintain our shipyards and secure the transportation of our products 
 for our flag. We ask it for maritime defense and for the supplying 
 of seamen, to insure our property on the sea, and the protection of 
 our coast. We merely want to be placed on terms of fair competition 
 and without reducing the standard of living for American labor. We 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 107 
 
 can not meet the disadvantages that now confront us without govern- 
 mental aid. 
 
 Representative Spight. What sort of speed limitations would you 
 put in your subsidy bill? 
 
 Mr. Sewall. To my mind, really, it is not necessary to put in any, 
 except so far as mail steamers are concerned, because a steamer by 
 being able to make more voyages naturally will get more compensation. 
 
 It was stated yesterday that we do hot wish to ask for any favors. 
 1 myself feel that I should like to qualify that statement to some 
 extent. We do not want to ask for any favors that we are not entitled 
 to; but there are very few of us left and we can not afford to be too 
 modest, 1 feel that the limit has been reached. If our yards are to 
 be kept open, we must have some assistance. 
 
 A WORD FOE SAIL TONNAGE. 
 
 In closing, I want to say a word for sail tonnage. I, of course, 
 realize this is an age largely dependent upon steam, and if we are to 
 regain any considerable proportion of our lost foreign trade, we must 
 do it by steam, but I believe thei"e is still urgent need of the sailing 
 ship, and any increase in these vessels, as may come from such encour- 
 agement as you can give, will prove of inestimable value to the country. 
 They will always be needed for certain cargoes and certain voyages, 
 and upon this class of vessels we are dependent almost entirely for the 
 proper training of our seamen. If we can make these vessels proht- 
 able, so that capital will seek investment in them, then we shall have 
 our officers and seamen, so essential to a merchant marine. They are 
 cargo carriers, limited in number, yet deserving of your most careful 
 consideration, and in coming to your conclusions, gentlemen, I trust 
 you will be disposed to strongly recommend most liberal encourage- 
 ment for both steam and sail that will promptly restore our flag upon 
 the seas and regain our foreign carrying trade. 
 
 1 thank you for the courtesy extended. 
 
 COST OF SAIL VESSELS. 
 
 Representative Minor. You are quite a builder as well as an oper- 
 ator of ships. There was some difference of opinion expressed to 
 the (commission in reference to the difference in the cost of construc- 
 tion between this country and on the Clyde, for instance. 
 
 Mr. Sewall. Yes. 
 
 Representative Minor. What is your judgment? Really, what is 
 the difference in cost of construction ? 
 
 Mr. Sewall. My judgment is that on the class of vessels we build, 
 which are sailing vessels, steel vessels, it would be about 33^ per cent, 
 possibly running up from that to 40 per cent. 
 
 Representative Minor. That is for sailing vessels? 
 
 Mr. Sewall. For sailing vessels. I am not competent to speak for 
 the cargo steamer or the battle ship, as we have had no experience in 
 those lines. 
 
 Representative Minor. That applies strictly to sail vessels? 
 
 Mr. Sewall. Sail vessels. 
 
 Representative Minor. You being an operator of sailing vessels, I 
 will ask you what is the difference in cost in operation after they are 
 completed and ready for business ? 
 
108 HEABING8 BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Mr. Sewall. Fifty per cent. 
 
 Representative Minok. Fifty per cent? That is in wages? 
 
 Mr. Sewall. Operating and manning. 
 
 Representative Minor. Food schedules? 
 
 Mr. Sewall. Operating and manning. 
 
 THE TONNAGE TAX. 
 
 Representative Minok. I brought with me a statement prepared by 
 the War Department, showing the total amount of money paid out for 
 harbors, for instance. I am coming to the tonnage tax. Up to and 
 including September 19, 1900, 1 find that this Government has appro- 
 priated and expended in the construction of harbors $370,411,000. 
 
 Senator Mallory. For harbors alone? 
 
 Representative Minor. For harbors, up to 1900, and since then we 
 have passed a bill carrying $60,000,000 or something like that. So we 
 are out between four and five hundred millions for the construction 
 and enlarging and deepening of harbors. Right here in the port of 
 New York, one of the greatest in the world, there has been expended 
 about $15,000,000. I think a little less than 8 per cent of all the 
 exports and imports are carried in American bottoms; something over 
 ninety-two per cent in foreign bottoms. In addition to that, we are 
 maintaining light-houses, employing a large number of men, buoys, 
 vessels, etc. , the expense of which aggregates a number of million. 
 I do not know how many. I could not get it, but it will run up to a 
 hundred million, perhaps. 
 
 I notice that last year we collected 1854,000 in tonnage tax. I 
 observe another thing, that the most you can collect from a foreign 
 ship by way of tonnage is SO cents a year per ton, and on a part of 
 these foreign vessels only 15 cents. 
 
 Mr. Sewall. Yes. 
 
 Representative Minor. Now tell me what complaint could the 
 owners and operators of these foreign ships make against us if we 
 should treble the tonnage tax and raise from that source a couple of 
 million dollars, to be distributed among our American builders and 
 operators of ships? 
 
 Mr. Sewall. We should have to abrogate cJur treaties, I under- 
 stand, and there would be the same difliculty that would be encoun- 
 tered with discriminating duties. 
 
 Representative Minor. I question whether we would have to do 
 that. 
 
 Mr. Sewall. That is what I assume — that we could not under our 
 favored-nation clause put foreign vessels on a diflPerent footing from 
 our own. 
 
 Representative Minor. I think we can, so far as a tonnage tax is 
 concerned; at least I have been so informed by good lawyers. 
 
 Mr. Sewall. We must bear in mind that what we want to do is to 
 shut them out. We do not want to get revenue merely. 
 
 Representative Minor. The point I make is this: Every dollar you 
 take from them W tonnage dues and give to our fellows amounts to $2. 
 
 Mr. Sewall. Yes. 
 
 Representative Minor. If we should get the benefit of $2,000,000 in 
 that way, we could show those people of this country who are some- 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 109 
 
 what prejudiced against this proposition that we did get back a million 
 dollars out of foreign ships. 
 
 Mr. Sewall. Of course. 
 
 The Chiarman. The best information I have been able to obtain is 
 that we will find difficulty in modifying the tonnage tax under exist- 
 ing treaties. We would have to abrogate the treaties to reach that as 
 well as to impose a differential duty. 
 
 Representative Minor. Then there are but two things within reach 
 of the Commission. One is a direct subsidy and the other is a 
 differential. 
 
 Mr. Sewall. That is the understanding I have. 
 
 Representative Minor. Come to think of it, I do not know about 
 differential duties, either. 
 
 Senator Mallory. You are both a shipowner and a shipbuilder, I 
 understand. 
 
 Mr. Sewall. I am. 
 
 FREE MATERIAL FOR COAST TRADE. 
 
 Senator Mallort. As a shipbuilder, have you given any thought to 
 the desirability of, or a»y possible advantage which would arise to the 
 shipbuilder from, legislation that would place the material coming into 
 this country from foreign countries for building a domestic ship or a 
 ship for the coastwise commerce on the same footing as material 
 brought here for building a ship to go into foreign commerce ? In other 
 words, take the duty off of material for ships being constructed for the 
 coastwise commerce as well as for foreign commerce? 
 
 Mr. Sewall. I have not thought of that phase of the question so 
 much, as we are interested in the foreign trade so largely. 
 
 Senator Mallory. You have not given it any thought, you say ? 
 Could you give us your view about it on the spur of the moment? 
 Give us an opinion as to whether you think it would contribute at all 
 to the shipyard interest? 
 
 Mr. Sewall. I hardly know whether it would be of any great benefit 
 to-day. In that case there would be no rebating of duties entered on 
 the register? 
 
 Senator Mallory. The practical effect of it would be to put all 
 vessels built in American yards on the same footing. Vessels built for 
 the foreign trade would probably be allowed to go into the coastwise 
 trade. I imagine that would probably follow. Vessels built in the 
 United States and owned by Americans, whether built for the coast- 
 wise commerce or for foreign commerce, would all be put on the same 
 footing, and the material to be used in them would be subject to the 
 same rebate in both instances. I am putting such a case as that. Do 
 you think it would inure at all to the benefit of the shipyard business ? 
 
 Mr. Sewall. It might help somewhat in the coastwise trade for the 
 steel vessel. To-day our coastwise trade in cargo vessels is largely 
 confined to wooden vessels. 
 
 Senator Mallory. To wooden vessels? 
 
 Mr. Sewall. Yes. 
 
 Senator Malix>ry. Still there are some lines, the Clyde line and a 
 number of other lines having steel ships, that are in the coastwise trade ? 
 
 Mr. Sewall. Yes; a few lines. 
 
110 HEARINGS BEFOBE THE MERCHANT MARINE COMMISSION. 
 
 THE CASE or THE DIKIGO. 
 
 Senator Malloky. You have built a steel ship of imported plates? 
 
 Mr. Sew ALL. We have. 
 
 Senator Malloet. Did it make any difference in the cost of the ship ? 
 
 Mr. Sewall. It made it somewhat less. 
 
 Senator Malloet. What is the ship? 
 
 Mr. Sewall. Th& Di/rigo. 
 
 Senator Malloet. What is her tonnage? 
 
 Mr. Sewall. About three thousand tons. 
 
 Senator Malloet. Square rigged? 
 
 Mr. Sewall. Square rigged. 
 
 Senator Malloet. About what percentage of difference did it make ? 
 
 Mr. Sewall. 1 can not recall now. I do not remember just the 
 price of American steel at that time. That, in fact, was the first steel 
 ship we built. Since then we have built a number, and we have always 
 preferred, at a greater cost, to use the American steel, not because, as 
 was stated, that there was any objection to the steel itself. We were 
 very well satisfied with the foreign steel which we received for that 
 vessel. We brought it right to our wharf and landed it very easily. 
 But there are many reasons why it is inexpedient. With our laws as 
 they exist to-day, there is a disadvantage in using foreign steel, not- 
 withstanding the first cost of the ship is somewhat cheaper. 
 
 Senator Malloet. As you stated, the vessel could not go into the 
 coastwise trade, which is a very serious objection? 
 
 Mr. Sewall. Yes, sir; and as I said, too, we would prefer to pay 
 more and have truly American vessels. 
 
 Senator Malloet. If vessels under those circumstances should be 
 permitted to go into the coastwise trade, would it help, do you think? 
 
 Mr. Sewall. To a limited extent; to some extent. 
 
 OFFICEEING THE SHIPS. 
 
 Senator Malloet. I wish to ask you a few questions on some other 
 matters, on which you are probably better informed than anybody else. 
 It is relative to the question of securing officers for your ships. Do 
 you have any difficulty in securing officers for your ships? 
 
 Mr. Sewall. We have great difficulty to-day; very serious difficulty. 
 
 Senator Malloet. I refer to masters and mates. 
 
 Mr. Sewall. Masters and mates; not so mttch just to-day with the 
 masters as with the mates; but the masters are fast leaving us. In a 
 few years the condition will be very hard. 
 
 I can recall, before 1 took an active part in the firm, when college 
 students would come down into our yards and go before the mast as 
 boys and move up, and they would rise very rapidly and soon become 
 officers, and then become masters, and then they would take an interest 
 in the vessel, putting their money in it; and one vessel would lead to 
 another. Now there is no incentive like that. There is no induce- 
 ment for the smart young man to follow a seafaring life. 
 
 Senator Malloet. Why is that? 
 
 Mr. Sewall. The captains used to be the aristocracy of the town. 
 
 Senator Malloet. How long ago was that? You are quite a young 
 man. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. Ill 
 
 Mr. Sewall. That was twenty-five years ago. 
 
 Senator Mallory. That is since the decadence of our merchant 
 marine. 
 
 Mr. Sewall. That was when things were looking brighter. 
 
 Senator Mallory. We were still in a state of inanition, so far as 
 our merchant marine was concerned. 
 
 MASTERS NATIVE AMERICANS. 
 
 Where do you now get your captains, your first oflicers, and your 
 second mates? Where do they come from? 
 
 Mr. Sewall. For captains, we rely largely upon the old-time mas- 
 ters of the wooden clipper ships. As those ships drop out, through 
 age and in one way and another, the masters are left. 
 
 Senator Mallory. As a rule are they Americans ? 
 
 Mr. Sewall. The masters are. 
 
 Senator Mallory. They are not naturalized citizens, but Americans ? 
 
 Mr. Sewall. Americans; good New England stock. 
 
 Senator Mallory. Are they generally trained? What is their 
 novitiate or theirpreliminary training? 
 
 Mr. Sewall. Tiiey took to the sea from the advantages that did 
 accrue in years gone by. 
 
 Representative Minor. They are born web-footed. 
 
 Mr. Sewall. It was a profession where they stood high and in 
 which they secured fine wages. 
 
 Senator Mallory. Am I right in understanding you to say that that 
 class of men is passing away ? 
 
 Mr. Sewall. Decidedly so. 
 
 Senator Mallory. What will you do for masters when they are 
 absolutely gone? 
 
 Mr. Sewall. That is what we want you to help us on. We want 
 you to make some incentive for the young men to go to sea again, and 
 if you can give us the sailing ship, which is the nursery of the sea- 
 men, and make its operation profitable, the young men will follow, 
 and we will get our oflEicers. 
 
 Senator Mallory. I suppose you have first mates, second mates, and 
 boatswains aboard your ships ? 
 
 Mr. Sewall. We do. 
 
 Senator Mallory. All that class of petty officers, 1 suppose, as a 
 rule, are from your coast; or are they foreigners? 
 
 Mr. Sewall. Not necessarily, so far as the officers go. We have to 
 take them where we can get them. The first officers more especially 
 would come under your assumption. 
 
 MANY SUBORDINATES FOREIGN BORN. 
 
 Senator Mallory. But among your subordinate officers you have, 
 as a rule, a great many foreign-born men ? 
 
 Mr. Sewall. Yes, sir. 
 
 Senator Mallory. What is their nationality as a rule? 
 
 Mr. Sewall. Oh, well, it varies. In this connection 1 may say we 
 have taken a man from the forecastle, without any education what- 
 ever, who had joined us in years gone by when we operated schooners, 
 and made a master of him. We nave one now. The particular man 
 
112 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 whom I have in mind joined on a coastwise vessel. He had no educa- 
 tion. The master whom he joined became somewhat interested in 
 him, and after a few years he went off to school. Since then he has 
 been promoted an officer and master of a schooner, a coastwise vessel. 
 Then he went into a square-rigged vessel, and to-day he is commander 
 of one of our finest ships. 
 
 BOYS ON SHIPBOARD. 
 
 Senator Malloey. Have you any system of apprentices on board 
 your vessels ? 
 
 Mr. Sewall. Our system has been that all who apply are taken 
 care of as far as possible. Our captains are instructed to promote 
 them as rapidly as possible, and give them every advantage. 
 
 Senator Mallohy. Have you made any effort in your business to 
 train young men with a view to making them officers eventually ? 
 
 Mr. Sewall. We have, decidedly; that is, through our masters. 
 The only way is to secure a berth for them on our vessels and treat 
 them with consideration and promote them as rapidly as possible. 
 
 Senator Malloey. Do you find any considerable response to that 
 effort? 
 
 Mr. Sewall. We have met with more or less response, but of late 
 years the applications have been very much fewer than they used to be. 
 We used to nave to turn away boys. We have a special room on our 
 vessels for boys, a special deck house, so that the boys can be separated 
 from the sailors. 
 
 Panator Malloey. Take a vessel of 5,000 tons. Have you any limit 
 to the number of boys you would carry on such a vessel? 
 
 Mr. Sewall. Three or four would be the limit on one vessel — ^four. 
 
 Senator Malloey. Have you any other vessels than square-rigged 
 vessels ? 
 
 Mr. Sewall. We have one. 
 
 Senator Malloey. What is she? 
 
 Mr. Sewall. Steel. 
 
 Senator Malloey. Four masted or five masted? 
 
 Mr. Sewall. A five-masted schooner. 
 
 Senator Malloey. What is her tonnage ? 
 
 Mr. Sewall. Three thousand tons. 
 
 Senator Malloey. What is the number of the crew on that five- 
 masted schooner? 
 
 Mr. Sewall. About fifteen, all told. 
 
 Senator Malloey. What is the number of the crew on one of your 
 3,000-ton square-rigged vessels? 
 
 Mr. Sewall. Double the number; around there; say 30. It de- 
 pends upon the voyage to some extent. 
 
 Senator Malloey. They are New England schooners used in the 
 coastwise trade ? 
 
 Mr. Sewall. Yes, sir. 
 
 Senator Malloey. You use donkey engines for hoisting anchors 
 and sails? 
 
 Mr. Sewall. Yes, sir. 
 
 Senator Malloey. You get along with as small a number of men 
 as possible? 
 
 Mr. Sewall. Yes, sir; we reckon on a schooner for about half the 
 number of men a ship would require. 
 
HEARINGS BEFORE THE MERCHANT HARINE COMMISSION. 113 
 ECONOMT OF SCHOONERS. 
 
 Senator Malloet. Take a schooner of 3,000 tons. I should like to 
 get this information, and I believe you are the only witness we are 
 likely to have from whom we can obtain it. A schooner of 3,000 
 tons, as compared with a square-rigged vessel of the same tonnage, so 
 far as operating expenses are concerned, would cost about one-half. 
 Am I right? 
 
 Mr. Sewall. Yes; I think so; less, possibly. 
 
 Senator Malloey. Is there any objection to these large schooners 
 going into the ocean trade; across the Atlantic, for instance? 
 
 Mr. Sewall. We do not feel that there is, but as a rule they have 
 been employed in that direction but very little. But I am inclined to 
 think myself that they will make the voyage much more frequently in 
 the future. In fact, our last vessel was built with the idea of going 
 anywhere over the world. 
 
 Senator Malloey. I should like to ask your opinion as an expert 
 upon the question of the continuance of the use of sailing vessels, fore 
 and afters as well as square riggers, as compared with steam vessels. 
 From what you said in your previous remarks, I gather you are of the 
 opinion that sailing vessels would last a good many years yet in the 
 trade for heavy traffic — for such cargo as is bulky or heavy and does 
 not require quick transportation. 
 
 Mr. Sewall. On certain long voyages. 
 
 Senator Malloey. It has been said that inside of twenty years — I 
 Iiave heard it said to a committee of the Senate — we would have no 
 merchant sailing vessels to speak of. Is that your opinion? 
 
 Mr. Sewall. We do not feel that that condition ought to exist. 
 We do not think 
 
 Senator Malloey. That was not with reference to the dying out of 
 our merchant marine generally, but with reference to steam vessels 
 taking the place of sailing vessels. 
 
 Mr. Sewall. I believe, to a. limited extent, you will always have 
 need for sailing vessels. 
 
 CEEWSAND WAGES. 
 
 Senator Malloey. Now, about the crews. There is an important 
 matter about which I should like to ask you. I suppose you are 
 familiar with it. How about the wages that you pay the crews of 
 your ships, aside from the officers, as compared with the crews of 
 vessels of corresponding size engaged in the foreign trade by foreign 
 nations ? 
 
 Mr. Sewall. I think that that depends largely upon where the ship 
 is going. Of course, in this connection 1 did state some of the disad- 
 vantages we have to meet. For instance, I ship an American crew 
 here. We send a vessel very frequently to the East — to China and 
 Japan. The sailing ship, unfortunately, has alwaj^s been made a store- 
 house, more or less. When we get into port we may be tied up there 
 for two to three months in discharging and loading cargo. We have 
 to keep our crew aboard. We can not discharge the men, even if the 
 men want to be discharged; and of course if we could discharge them 
 there we could ship a much cheaper crew at the other end. 
 
 Senator Malloey. Why can you not discharge them? 
 
 3a— 04 8 
 
114 HEARINGS BEFOBE THE MERCHANT MARINE COMMISSION. 
 
 Mr. Sewall. The American consul does not allow us to do so. 
 
 Senator Mallqky. Are they shipped for the round trip as a rule, or 
 for the single voyage across? 
 
 Mr. Sewall. 1 mean to say in a case where the men would like to 
 go, too. The American consul says they are liable to become a charge 
 on the Government, and he does not want them to remain. But with 
 many foreign vessels they can ship their men in a cheap port. Ameri- 
 can ports are always higher than elsewhere over the world. We have 
 to ship our men in an American port. 
 
 Senator Malloey. Suppose you ship a crew. They sign articles 
 from New York to Hongkong, for that voyage. Do you mean to say 
 you can not discharge them in Hongkong at the end of the voyage for 
 which they have shipped ? 
 
 Mr. Sewall. We can not if the American consul thinks they are 
 going to become a care on the Government, unless we pay their pas- 
 sage back to Amei'ica. 
 
 Senator Mallokt. Notwithstanding their agreement with you is to 
 go only to Hongkong? 
 
 Mr. Sewall. No; we can not. 
 
 Senator Mallort. That is something new to me. 
 
 Mr. Sewall. A friend of the sailor yesterday spoke somewhat at 
 length on the disadvantages the sailor suffered. I might state one or 
 two instances which we have had. We have shipped men, had them 
 sign articles, had them start down the river for a long voyage on an 
 expensive ship with a large cargo, and at night, at the mouth of the 
 river, they would jump overboard, swim ashore, leave the vessel, and 
 we are left short-handed. It shows the necessity of having some law 
 to protect property. 
 
 Senator Malloet. That is a thing which is liable to happen to the 
 ship of any nation — sailors deserting. 
 
 Mr. Sewall. Oh, yes. 
 
 Senator Mallort. It is rather the exception than the rule, I judge. 
 
 Mr. Sewall. We have had it happen more than once. I merely 
 said that to show that we should have laws somewhat rigid. 1 do not 
 think the sailor himself is altogether to blame, especially if he were 
 let alone, but he is easily influenced, and through sea lawyers and 
 boarding-house masters and in one way and another we have to con- 
 tend with a great deal. 
 
 HOW men are shipped. 
 
 Senator Malloey. To come back to the other point, in making a 
 trip from a port of the United States on the Atlantic to China or 
 Japan, Singapore or Calcutta, how are you in the habit of shipping 
 your men ? What kind of a voyage do you ship them for — the round 
 trip? 
 
 Mr. Sewall. We ship them for the voyage, if we can. 
 
 Senator Malloey. That is, the round-trip voyage ? 
 
 Mr. Sewall. No; the passage. 
 
 Senator Malloey. Just the passage across ? 
 
 Mr. Sewall. The passage. 
 
 Senator Malloey. Do you ship them by time — for a year, for 
 instance? 
 
 Mr. Sewall. No. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 115 
 
 Senator Mallory. You do not? 
 
 Mr. Sew ALL. No. 
 
 Senator Mallory. It is not customary ? 
 
 Mr. Sew ALL. Very often on our vessels, where they go to foreign 
 ports and we can not discharge the men until they get back to tne 
 American port, they remain on the vessel; but we do not ship them 
 for so many months. 
 
 Representative Minor. You ship by the run? 
 
 Mr. Sew all. We ship by the run occasionally; but we had an 
 instance just a few weeks ago where, in order to secure our crew (this 
 vessel was going from San Francisco to Honolulu), we had to pay the 
 customary advance, and we paid a month's wages. The ship went 
 down in the rather remarkable time of eleven days, and of course we . 
 paid them full wages. 
 
 NO CHANCE TO RISE. 
 
 Senator Mallory. You have spoken of the falling off of interest on 
 the part of our young men in the matter of seafaring life. Have you 
 any reason to which you ascribe that? 
 
 Mr. Sbwall. There is no incentive for them to rise. The young 
 man does not see any future. The young man not only wishes to 
 become an officer and master, but he wants to see a future before him. 
 
 Senator Mallory. That is due to the fact that we have not ships 
 enough? 
 
 Mr. Sewall. We have not ships enough and there is no incentive. 
 They are not paying anything. The old-time master of a sailing ship 
 V. .s not only its master, but he became interested in the vessel. He 
 invested his money. 
 
 Senator Mallory. Our wages are high, both for the officers and the 
 crew, you say ? 
 
 Mr. Sewall. For American officers. 
 
 Senator Mallory. Is it because they can not get steady employ- 
 ment? Is that a factor in this decline of interest m seafaring life on 
 the part of our young men ? 
 
 Mr. Sewall. It is very true that if any considerable number should 
 seek that profession now they could not be taken care of . In fact, 
 there are quite a number of masters, as I have stated, who are avail- 
 able now. But of the officers below, it is not so. 
 
 Senator Martin. Where do you run your ships? 
 
 THE LONG voyage TRADE. 
 
 Mr. Sewall. All over the world; anywhere where we can get a 
 new dollar for an old dollar. But we can not find that place to-day. 
 
 Senator Martin. As a matter of fact, where are they chiefly running ? 
 
 Mr. Sewall. It changes every few years. We used to take oil out 
 East, perhaps, or business to the Pacific coast, and then take wheat 
 over to Europe, and either take coal right back to the Pacific coast or 
 out East or else come over to this side and load. But the French ships 
 have, of course, played havoc with the California freight markets. 
 Freights have gone down to a price where no ship, without assistance 
 such as the French ships have, can compete or make a dollar, if she 
 goes under the most favorable circumstances. That is merely for the 
 
116 HEARINGS BEFOEE THE MERCHANT MARINE COMMISSION. 
 
 reason that the French ships' operating expenses are entirely paid by 
 the French Government. 
 
 A few years ago that made no difference, because they had practi- 
 cally few ships; but it has been growing, and the ships come in and 
 thev make the market now'. Their object is to sail. In fact, of late 
 years French ships have gone to San Francisco and have come out in 
 ballast and come around to New York to take oil out East, getting 
 their subsidy from the French Government right along. So you can 
 see how they can afford to take anything if there is no loss of time. 
 If they can afford to do it in ballast, they can afford to do it for 10 
 shillings freight. Freights have been down to 12 shillings this year. 
 No ship can live on that. 
 
 The Chairman. Mr. Sewall, we are greatly obliged to you. 
 
 STATEMENT OF ALFRED G, SMITH. 
 
 Alfred G. Smith appeared before the Commission. 
 
 The Chairman. Mr. Smith, state to the Commission in what line of 
 business you are engaged. 
 
 Mr. Smith. I am secretary and treasurer of the New York and Cuba 
 Mail Steamship Company — the Ward Line. 
 ■ The Chairman. Between what ports do your steamships run ? 
 
 Mr. Smith. Between New York and ports in Cuba, ports in the 
 Bahamas, and ports on the Mexican Gulf. 
 
 The Chairman. Are you familiar with the statute under which this 
 Commission is sitting? 
 
 Mr. Smith. Yes, sir. 
 
 The Chairman. Will you give the Commission the benefit of any 
 views you may have on the subject? 
 
 Mr. Smith. So much has been said here to-day that I do not know 
 that I can add very much which would be of value to the Commission, 
 but I was invited to appear. 
 
 The question is. What legislation, if any, is desirable for the devel- 
 opment of the Americam merchant marine and American commerce? 
 Or, in other words, What should the United States Congress do to 
 guarantee the carriage of our share of exports in American bottoms 
 between the United States and all foreign ports where there is a market 
 for them, and return cargoes where commodities are produced that 
 are required in this country ? 
 
 The New York and Cuba Mail Steamship Company respectfully sub- 
 mits, in answer to the question of what legislation, if any, is desirable 
 for the development of the American merchant marine and American 
 commerce, and also what change or changes, if any, should be made 
 in the existing laws relating to the treatment, comfort, and safety of 
 seamen, the following: 
 
 THREE METHODS OF RELIEF. 
 
 Three courses appear to be open: 
 
 (1) Permit foreign-built vessels to register under the American 
 flag; 
 
 (2) Increase the tariff on goods imported into the United States in 
 foreign vessels; and 
 
 (3) Extend direct Government aid in the form of subsidies. 
 
HEAKINGS BEFORE THE MEKCHANT MARINE COMMISSION. 117 
 
 The first proposition would, if carried out, ruin the present estab- 
 lished lines of American ships, close up every shipyard in America, 
 and drive thousands of American mechanics and laborers to destitu- 
 tion. This proposition, in our opinion, is too absurd to merit any 
 serious consideration. 
 
 Prominent men engaged in the shipping business for almost a life- 
 time and those who have made this matter a study from an economical 
 standpoint generally agree on this conclusion. 
 
 We can not, therefore, consistently recommend the purchase and 
 adoption of foreign ships or the employment of foreign cheap labor. 
 
 Second. Discriminating duties or the imposition of port dues against 
 foreign vessels would result in retaliatory measures on the part of 
 foreign governments. 
 
 The rebate of a portion of the import duties on merchandise carried 
 by American vessels would no doubt cause retaliatory action also. 
 Therefore it would seem that this course is not one which could con- 
 sistently be recommended. 
 
 Much has been said about this method of upbuilding our American 
 merchant marine and the protection of our shipping in the foreign 
 carrying trade, so that American ships and products of American labor 
 employed in American shipyards, sailing under the American flag, 
 and manned, officered, and owned by American citizens might regain 
 the trade of our foreign commerce, but an increased tariff on goods 
 imported in foreign ships above the rates imposed on goods imported 
 in American vessels would be, we are told, in contravention of treaties 
 between the United States and many foreign nations. 
 
 The abrogation of the articles in such treaties as give the vessels of 
 foreign nations equal advantages in trade between the United States 
 and foreign counties would of course be desirable; but this, as above 
 indicated, is a diplomatic question upon which we confess ignorance, 
 and therefore refer it to those competent to pass upon the point. It 
 is galling, however, to see vessels of every nationality — British, Ger- 
 man, Norwegian, Spanish, Italian, etc. — engaged in regular trade 
 between American ports and ports of other nations, other than those 
 to which they respectively belong, in direct competition with American 
 ships, owned in America, and manned and officered by Americans. 
 
 In future treaties could not the contracting nations be each induced 
 to consent to an agreement or convention by which all benefits of such 
 treaties would be limited to such imports and exports as are carried 
 wholly in American vessels or vessels of such contracting nations ? 
 
 UNWISE AND COSTLY TREATIES. 
 
 All Americans agree in the decadence of American shipping, but it 
 seems to us that some treaties made by the United States with certain 
 foreign nations have had as much to do with the deplorable condition 
 of American shipping as anything else. 
 
 Take, for instance, the treaty proclaimed in the year 1828 with 
 Sweden and Norway. Consider the great number of Norwegian ves- 
 sels engaged to-day in trade between American and West Indian ports, 
 which vessels practically carry all the sugar and fruit cargoes. The 
 earnings of these vessels go to Sweden and Norway. The wages of 
 the crews go to Sweden and Norway. Norway builds the ships and 
 fits them out with everything that is required for from two to three 
 
118 HEAEINGS BEFOEE THE MERCHANT MARINE COMMISSION. 
 
 years' "tramping" between j)orts in the United States and the West 
 Indies, and what does the United States get in return? 
 
 When the vessels need repairs they go home. When the vessels 
 need surveying they go home. Everything is for the benefit of their 
 country, and American shipbuilders, ship chandlers, and shipmasters 
 get nothing, except that occasionally an old American shipmaster may 
 be employed as a night watchman while a vessel is loading or dis- 
 charging cargo in an American port. 
 
 So long as this treaty remains in force Norway will have the same 
 advantages as vessels of American registry, but there are clauses in 
 the treaty that permit of its cancellation on short notice, and such a 
 course, it seems to us, would be wise, for not only have the Ameri- 
 cans neglected their own merchant marine, but they have, by such a 
 treaty, helped to build a powerful foreign merchant marine. 
 
 It is noteworthy, in connection with this, to observe that there is an 
 article in the treaty which reads to the effect that the treaty is not 
 applicable to the coastwise navigation, which navigation "each of the 
 two contracting parties reserves to itself." What would have been 
 the present status of our coastwise shipping if this clause had not 
 been specifically agreed upon with Sweden and Norway ? 
 
 SUBSIDY THE BEST PLAN. 
 
 , Third. It seems to us, in view of all the above, that, after all, the 
 best thing to recommend is to let Congress give the American-built 
 ship enough advantage to compensate for the higher cost of operating 
 and maintaining American ships, and I might say constructing, and 
 the merchant marine will take care of itself. This, in a nutshell, is 
 what is wanted. 
 
 A subsidy bill honestly directed to the encouragement of fast pas- 
 senger and mail ships and also freight-carrying vessels is advocated. 
 The measures heretofore introduced, while undoubtedly beneficial, 
 have been but compromises. 
 
 If it is intended to really upbuild and develop the American mer- 
 chant marine liberal subsidies or bounties must be provided. 
 
 Yet, after all, we must recognize that there is not much distinction 
 in principle between the two methods advocated; that is, between dis- 
 criminating duties and subsidies. 
 
 Whether cargo is exempted from payment of certain dues or whether 
 the aid required is directly paid out of the Treasury after the payment 
 of duties on the cargo which the ship brings makes no difference, but 
 the subsidy plan is more to the interest of the shipping community 
 than the discriminating policy. 
 
 Then again, there is the great bulk of imports admitted free of all 
 duty. 
 
 Summarizing, therefore, the above, we would say that the direct 
 subsidy system would be of much greater value, but if this be not 
 feasible, then let us, by all means, have the discriminating duty rather 
 than no legislation at all. 
 
 Subsidy, as we understand it, means the expenditure, say yearly, of 
 a sum of money to promote national navigation and the building and 
 running of ships which can be of service to the country in the event 
 of war, as neutral nations can not furnish to a belligerent ships for 
 defense or offense. 
 
HKAKINGS BKFOEE THE MERCHANT MARINE COMMISSION. 119 
 
 The enactment of a wisely drawn subsidy bill would result in regular 
 lines being established between the principal American ports and 
 Europe, but more especially between American ports in the Atlantic 
 and South American ports and American ports in the Pacific with the 
 Orient. 
 
 The money now paid by the postal authorities to foreign lines and 
 the American capital now invested in foreign ships would gradually 
 turn to the development of American-built and American-operated 
 ships. 
 
 The compensation paid to the slower or freight ships would oflPset 
 the lower cost of the foreign ships and the lower wages paid to foreign 
 seamen. 
 
 Let Congress, therefore, give American ships engaged in foreign 
 trade the same measure of prot^ection that they have to the coastwise 
 and lake vessels. 
 
 A law amending the present law of March 3, 1891, should be passed 
 requiring the Postmaster-General to consider the national defense and 
 the maritime as well as the postal interests in providing for the trans- 
 portation of mails and freeing the United States from present depend- 
 ence upon foreign lines for its ocean mail service. 
 
 Increase the terms for which contracts should be made to correspond 
 with foreign government contracts, provide for additional classes or 
 types of vessels entitled to the transportation of mails, basing this on 
 the progress of shipbuilding and the mail requirements, and fix pro- 
 portionate rates of compensation. 
 
 POSTAL, AND GENERAL SUBSIDIES. 
 
 Specifically, then, we would recommend: 
 
 (1) A general subsidy, by directing the postal authorities to enter 
 into contracts with American citizens for terms of years for the carry- 
 ing of mails in American vessels between ports in the United States 
 and ports in foreign countries, having regard for the national defense, 
 and as will best subserve the postal, commercial, and maritime inter- 
 ests of the United States; the vessels to be American built, owned, 
 officered, and, as far as possible, manned by American citizens; such 
 vessels to be constructed with particular reference to their prompt and 
 economical conversion into auxiliary naval cruisers, and according to 
 plans to be agreed upon by the owners and the proper authorities. 
 
 The rate of compensation for such steamships to be paid on the basis 
 of the gross registered tonnage and speed as well as the mileage sailed 
 from the port of clearance in the United States to the home port of 
 entry, according to route required. Such vessels to take as cadets or 
 apprentices American-born boys, to be taught the duties of seaman- 
 ship and engineering. 
 
 (2) A general subsidy, by directing the proper Department of the 
 Government to pay, subject to certain provisions, to owners of freight 
 vessels, steam or sail, of the United States, duly registered by Ameri- 
 can citizens, compensation based on the gross registered tonnage of 
 the vessels and the mileage sailed in the. foreign trade of the United 
 States. 
 
 The above, it will be observed, are briefly the chief provisions of 
 
 the bill introduced about two years ago 
 
 Senator Mallory. Known as the Hanna bill ? 
 
120 HEARINGS BEFORE THE MERCHANT MARINE C0MMI8SI0K. 
 
 Mr. Smith. The Frye bill, I believe; than which, in our opinion, no 
 better bill could have been framed, barring, perhaps, the rates of com- 
 pensation which appear somewhat inadequate. 
 
 FOK COMMERCE AND DEFENSE. 
 
 Such a bill as the one above outlined is recommended for the follow- 
 ing reasons: 
 
 It would add to our national prestige wherever the American flag 
 floats. 
 
 It would give employment to thousands of skilled and unskilled wage- 
 earners whose wages would be spent in the United States. 
 
 It would provide transports in times of war, for which, as is well 
 known, this country went begging during the Spanish war. 
 
 It would give steady, rapid, and regular communication between all 
 the important commercial ports of the world and the United States. 
 
 It would bring into shipbuilding in America millions of dollars' 
 worth of material grown and mined and manufactured at home. 
 
 It would foster the education and training of navigators and seamen; 
 or, in other words, it would create, under proper legislation, a Naval 
 Eeserve ready at all times to serve the country in event of war; and 
 last, but not least, it would insure to Americans a large share of the 
 enormous sums of money spent every year for the transportation of 
 our products throughout the world, which money is now remitted to 
 European shipowners, as can be verified by statistics. 
 
 WARD LINE OFFICERS. 
 
 The Chairman. Mr Smith, I wish to ask you two or three questions 
 about your steamship line. Am I correct in assuming that Spain has 
 a line of steamers running in competition with the Ward Line between 
 New York and Cuba? 
 
 Mr. Smith. Not now, sir; she had. 
 
 The Chairman. That line has been discontinued? 
 
 Mr. Smith. Yes, sir. 
 
 The Chairman. What about the officers on your steamships; are 
 they American citizens as a rule? 
 
 Mr. Smith. They must be, under the law. 
 
 The Chairman. What proportion of them are American born, if 
 you recall? 
 
 Mr. Smith. I should say roughly that one-third of the officers we 
 have on our ships to-day are foreign born. 
 
 The Chairman. Do you carry American boys as cadets on your 
 steamers ? 
 
 Mr. Smith. We do. 
 
 The Chairman. Putting them in the deck and engine departments ? 
 
 Mr. Smith. We divide them equally between the engine and the 
 deck departments. We carry one cadet for each 1,000 tons. 
 
 The Chairman. Do those boys progress rapidly and develop into 
 officers? 
 
 Mr. Smith. In most cases they do. We have to-day in our employ- 
 ment three captains who entered our service a few years ago as cadets. 
 Then there are others who come and go. As a rule, a good many of 
 
HEARINGS BEB"OEE THE MERCHANT MARINE COMMISSION. 121 
 
 the boys come to us because their parents can not do anything with 
 them, and those do not amount to very much. It all depends on the 
 men. 
 
 AUXILIARY CRDISEKS. 
 
 The Chairman. I was attracted by your observation in reference to 
 the value of American steamships as an auxiliary defense in case of 
 war. How many steamers of 14 knots or upward could you place at 
 the disposal of the Government in case of war? 
 
 Mr. Smith. At the present time we could place twelve steamers. 
 
 The Chairman. How many of your steamships were used by the 
 Government during the war with Spain ? 
 
 Mr. Smith. During the war they used nine steamers. 
 
 The Chairman. Were some of your officers utilized? 
 
 Mr. Smith. Entirely so. The ships were manned and officered by 
 our company. 
 
 The Chairman. In this connection, would the knowledge of these 
 men, obtained from plying between United States and foreign ports, 
 he oi value to them in case of war, so far as an intimate acquaintance- 
 ship with the foreign ports is concei'ned ? 
 
 Mr. Smith. I should say so, because we had that experience dur- 
 ing the war. Our men were of great value to the United States forces, 
 both naval and army, that were down there. General Shafter had 
 his headquarters on board one of our ships. One of our captains acted 
 as pilot for Admiral Sampson during the operations off Santiago. He 
 was a man who had been sailing there for many years for us. 
 
 BENEFITS OF OCEAN MAIL ACT. 
 
 The Chairman. Do you carry United States mails on your steam- 
 ships ? 
 
 Mr. Smith. We do. 
 
 The Chairman. You are beneficiaries of the subsidy under the act 
 of 1891? 
 ' Mr. Smith. We are. 
 
 The Chairman. What would have become of your line of steam- 
 ships if that act had not been passed? 
 
 Mr. Smith. If the act had not been passed and we had had the com- 
 petition of the Spanish lin^, we should not have the fleet we have 
 to-day. We might be running tramp steamers. I do not know what 
 might have happened, but I certainly know we would not have 
 developed the line we have to-day. 
 
 The Chairman. Can you give us some direct and positive informa- 
 tion as to the relative wages on foreign and American steamships? 
 
 Mr. Smith. The great trouble in making a comparison is due to the 
 type of vessels. Our vessels are exceptional in type. 1 do not believe 
 there are vessels afloat to-day like our vessels. 1 do. not mean to saj' 
 there are not better vessels than ours, but I refer to the particular con- 
 struction. They are built in this country for the West Indian trade, 
 and require a certain class of men whom you can not find in other ves- 
 sels. If I should take a vessel that is now competing with our vessels 
 running between New York and the West Indies, and what they pay 
 as against what we pay, I can safely say the difference is 40 per cent. 
 That I know from the pay rolls I have seen. 
 
122 HEAEINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 The Chairman. To what amount are you benefited by the ocean 
 mail act? 
 
 Mr. Smith. We receive $203,580 a year. 
 
 The Chairman. For your various lines ? 
 
 Mr. Smith. For our various lines. We make 104 trips during the 
 year. 
 
 The Chairman. Do I correctly understand you to advocate a direct 
 subsidy, as contemplated by the Frye bill, and likewise an extension 
 of the postal subsidy act, so as to increase the amount? 
 
 Mr. Smith. You do, sir. 
 
 DEPENDENT ON MAIL SUBSIDY. 
 
 Senator Mallort. I should like to get your views with respect to 
 the compensation you 'receive for carrying the mails. You make 104 
 trips per annum and receive $204,000. 
 
 Mr. Smith. Yes, sir. 
 
 Senator Mallort. Do you think that is sufficient compensation for 
 the service you render? 
 
 Mr. Smith. We would be glad to have more, of course. 
 
 Senator Mallort. I am asking you now to divest yourself of your 
 interest in the matter and to give us your opinion as an expert. 
 
 Mr. Smith. It has been of great assistance to us. There is no ques- 
 tion about that. It can not be denied. It has enabled us to maintain 
 the line we have to-day. We could not maintain a direct and regular 
 service unless we had that financial assistance. 
 
 Senator Mallort. How many steamers have you on the subsidized 
 line? 
 
 Mr. Smith. We run four steamers on one route a month — one a 
 week — and we run one a week on the other route. 
 
 Senator Mallort. What are those two routes? 
 
 Mr. Smith. Routes 69 and 70. Route 69 is from New York to 
 Mexican ports and return, and route 70 is from New York to Habana 
 and return. 
 
 Senator Mallort. To what Mexican ports do you run ? 
 
 Mr. Smith. Vera Cruz. 
 
 Senator Mallort. Tampico ? 
 
 Mr. Smith. Yes, sir. 
 
 Senator Mallort. Progreso ? 
 
 Mr. Smith. Yes, sir. 
 
 Senator Mallort. Do you carry mail from Mexico and Cuba? 
 
 Mr. Smith. Yes, sir. 
 
 Senator Mallort. Your mail subsidy does not provide for that? 
 
 Mr. Smith. We are only paid outward. 
 
 Senator Mallort. 1 should like to get your opinion as to the advisa- 
 bility of our extending the mail subsidy to South American ports — say 
 to Venezuela and Rio Janeiro and the Argentine. Do you think we 
 could by mail subsidy stimulate that business so as to support lines as 
 you say yours has been supported? 
 
 Mr. Smith. I believe so. There is a service now between New 
 York and Venezuela. 
 
 Senator Mallort, The Red D Line ? 
 
 Mr. Smith. Yes. 
 
 Senator Mallort. What compensation do they receive? 
 
 Mr. Smith. They receive the same compensation we receive — fl a 
 mile. I can not give you the total figures. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 123 
 
 SPEED OF CARGO VESSELS. 
 
 Representative Minor. I notice in your statement, referring to 
 cargo steamers, you omitted to state whether you thought it necessary 
 to prescribe a certain speed. 
 
 Mr. Smith. 1 did not go into the details. 
 
 Representative Minor. Would you regard it as wise to prescribe a 
 speed for cargo vessels, or would you advise the construction of those 
 vessels on purely business principles — the more trips the more money ? 
 
 Mr. Smith. I perhaps could answer the question by stating the 
 present condition. There are cargo vessels to-day which compete with 
 ours that make all kinds of speed, from 6 knots up to 10 knots. It 
 seems to me that is a matter which could be easily arranged by 
 compensation. 
 
 Representative Minor. Is it not a fact that if the Government should 
 grant to a cargo vessel, for instance, a subsidy based upon speed, the 
 bill would also prescribe a certain test, and by the selection of coal and 
 picked firemen and giving it every possible advantage in making that 
 test, she would make more knots per hour than she would ever make 
 again ? 
 
 Mr. Smith. There is no question about it. 
 
 .Representative Minor. And the Government would, during the life 
 of the subsidy, pay an amount based on the speed that the vessel made 
 on the test? 
 
 Mr. Smith. There is no question about it to a certain extent. 
 
 Representative Minor. Have you any vessels on these lines which 
 are not under subsidy 'i 
 
 Mr. Smith. Yes, sir; a large number of vessels. 
 
 Representative Minor. You run a certain number which get the 
 mail subsidy? 
 
 Mr. Smith. Yes, sir. 
 
 Representative Minor. Then you have others 
 
 Mr. Smith. Which get absolutely nothing. 
 
 Representative Minor. Which get nothing. Those were put on, I 
 suppose, after you built up the trade there ? 
 
 Mr. Smith. To which do you refer? 
 
 Representative Minor. The vessels that are not under subsidies. 
 You put those on in addition after you had built up the trade? 
 
 Mr. Smith. Those were the first vessels the company built. The 
 fastest and the largest vessels we have are vessels which we built prac- 
 tically with the aid from the Government. 
 
 subsidy helps entire business. 
 
 Representative Minor. Of course the mail subsidy helps out the 
 entire business? 
 
 Mr. Smith. The vessels that are not under the subsidj' are not pay- 
 ing our company. We are losing, actually losing to-day. That can 
 be verified by figures, and our other line equalizes it and maintains 
 the thing going as it is. That is due to the competition we have to-day 
 with Germans and British, etc. , in carrying the heavy trade from the 
 south of Cuba especially. 
 
 Senator Mallory. 1 understood you to say that the unsubsidized 
 vessels are on the same route that the subsidized vessels are? 
 
124 HEARINGS BEPOEE THE MEKOHANT MARINE COMMISSION. 
 
 Mr. Smith. If I said so I did not mean to. They are not on the 
 same route. 
 
 Representative Minok. It is substantially the same trade, though? 
 Mr. Smith. Yes. 
 
 FINANCIAL STATUS OF WARD LINE. 
 
 Representative McDermott. When did your incorporation take 
 place? 
 
 Mr. Smith. About twenty-two years ago. 
 
 Representative McDeemott. What is the amount of capital ? 
 
 Mr. Smith. Two millions and a half. 
 
 Representative McDekmott. What is the amount of your bonded 
 debtf 
 
 Mr. Smith. The bonded debt to-day is under |100,000. 
 
 Representative McDekmott. What rate of interest do you pay on 
 the bonds ? 
 
 Mr. Smith. Six per cent. 
 
 Representative McDermott. You formed your corporation about 
 twenty -three years ago ? 
 
 Mr. Smith. About that time. I can not give you the exact date 
 now. » 
 
 Representative McDermott. Did you take over any other line ? 
 
 Mr. Smith. We took over the Alexandre Line. 
 
 Representative McDermott. Any other? 
 
 Mr. Smith. No, sir. 
 
 Representative McDermott. Your capital included the amount paid 
 for the Alexandre Line? 
 
 Mr. Smith. Yes, sir. 
 
 Representative McDermott. And your present capital includes the 
 Alexandre Line ? 
 
 Mr. Smith. Yes, sir. 
 
 Representative McDermott. When did you pay your first dividend ? 
 
 Mr. Smith. It was before my time there. I could not answer the 
 question. 
 
 Representative McDermott. How many years have you been there? 
 
 Mr. Smith. About twenty years, but not in my present position. 
 
 Representative McDermott. WhatisthefirstdividendyourecoUect? 
 
 Mr. Smith. Ten years ago. 
 
 Representative McDermott. Were there any dividends before that? 
 
 Mr. Smith. Not for a long period. 
 
 Representative McDermott. For how long? 
 
 Mr. Smith. Fully ten years before that. 
 
 Representative McDermott. Is there much of a surplus annually 
 from the management of the business? Did you put your surplus into 
 new ships? 
 
 Mr. Smith. Yes, sir. 
 
 Representative McDermott. You put it into new ships instead of 
 declaring dividends? 
 
 Mr. Smith. Yes, sir. 
 
 Representative McDermott. The first year that you declared a divi- 
 dend, within your recollection, was ten years ago? 
 
 Mr. Smith. Yes, sir. 
 
 Representative McDermott. Did you declare a stock dividend ? 
 
HEAEINGS BEPOEE THE MERCHANT MARINE COMMISSION. 125 
 
 Mr. Smith. That is what I have reference to — a dividend on the 
 stock. 
 
 Representative McDermott. I mean a stock dividend or a cash 
 dividend. 
 
 Mr. Smith. A cash dividend. 
 
 Representative McDekmott. Of how much? 
 
 Mr. Smith. Six per cent. 
 
 Representative McDekmott. That was in 1892, was it not; ten or 
 twelve years ago? 
 
 Mr. Smith. The first dividend? 
 
 Representative McDermott. Yes, that you recollect. 
 
 Mr. Smith. It was not over ten years ago. I am quite sure it was 
 in August, ten years ago. 
 
 SIX PER CENT A YEAK. 
 
 Representative McDermott. That was 6 per cent. When was the 
 next dividend ? 
 
 Mr. Smith. The next year. 
 
 Representative McDermott. And every year since? 
 
 Mr. Smith. Yes, sir. 
 
 Representative McDermott. Never higher than 6 per cent? 
 
 Mr. Smith. Never higher than 6 per cent. 
 
 Representative McDermott. Have you declared during the last 
 twelve years any stock dividend, increasing your stock? 
 
 Mr. Smith. No, sir. 
 
 Representative McDermott. While in competition with Spanish 
 vessels, taking your entire system, and receiving about $200,000 a year 
 from the Government as a subsidy — that subsidy commencing when? 
 
 Mr. Smith. In November of 1892. 
 
 Representative McDermott. You have declared 6 per cent dividends 
 right along while in competition with Spanish vessels? 
 
 Mr. Smith. No, sir. Spanish vessel competition ceased. 
 
 Representative McDermott. When? 
 
 Mr. Smith. Certainly within the last ten years. 
 
 Representative McDekmott. Before the Spanish war? 
 
 Mr. Smith. Prior to that the steamers had ceased to run. 
 
 Representative McDermott. When did they stop ? 
 
 Mr. Smith. I could not tell you the exact time. 
 
 Representative McDekmott. You receive annually about $200,000 
 from the Government? 
 
 Mr. Smith. We do. 
 
 MAIL AS FREIGHT. 
 
 Representative McDermott. Taking the bulk of the freight that 
 you have in the mail, treating the mail as freight, how does the amount 
 of money paid by the Government to you compare with the amount 
 that would be mid by shippers occupying the same space? 
 
 Mr. Smith. The difference would be tremendous. 
 
 Representative McDermott. In other words, the mail that you carry 
 is, so far as the space in the ship is concerned, a negligible quantity? 
 
 Mr. Smith. It is very small. 
 
 Representative McDermott. It is nominal?. 
 
 Mr. Smith. If it was hay, it would pay us a few dollars. 
 
126 HEAEINGS BEFOEE THE MERCHANT MARINE COMMISSION. 
 
 Representative McDekmott. Take it on that basis. If it were hay 
 instead of mail, what would it pay you a year — $100? 
 
 Mr. Smith. Possibly $100; it might pay 1500. 
 
 Eepresentative McDekmott. Over $500? 
 
 Mr. Smith. Probably not. Hay is a very poor-paying commodity. 
 
 Representative McDekmott. Take the best-paying commodity occu- 
 pying the same space for a year in transportation — would the pay be 
 over $1,000? 
 
 Mr. Smith. It is a very difficult question to answer. 
 
 Representative McDekmott. I know it is difficult, because it is 
 hard to select anything to compare with it. 
 
 Mr. Smith. Sometimes we receive three or four truckfuls of mail. 
 It takes a large space, and weighs as much as 6 or 6 or even 10 tons. 
 Then again we may receive only 2 or 3 bags. 
 
 Representative McDekmott. What is your average for last year? 
 
 Mr. Smith. I have never kept any record of it. 
 
 Representative McDekmott. You have records? 
 
 Mr. Smith. Records of what? 
 
 Representative McDekmott. Of the tonnage. 
 
 Mr. Smith. Of the tonnage carried in the vessels as cargo? 
 
 Representative McDekmott. No; the tonnage of the mails. 
 
 Mr. Smith. No; we have not any records. We have the number 
 of packages we carry. 
 
 Representative McDekmott. You do not weigh them? 
 
 Mr. Smith. No, sir; we are not paid by weight. It makes no differ- 
 ence whether we carry 1 bag or 100 bags; we receive the same com- 
 pensation. 
 
 Representative McDekmott. Substituting ordinary freight for the 
 mails, can you estimate from your books the amount of space they 
 occupy by the year ? 
 
 Mr. Smith. The mail we have carried? 
 
 Representative McDekmott. Yes. 
 
 Mr. Smith. I can give you a rough estimate — very rough. 
 
 Representative McDekmott. That is all 1 want. 
 
 Mr. Smith. The mail we carry in a ship once or, rather, twice a week 
 would probably be carried in the space te,ken by this table. 
 
 Representative McDekmott. The space taken by the whole table ? 
 
 Mr. Smith. This table; this space in here [indicating]. 
 
 Representative McDekmott. That is about 
 
 Mr. Smith. Say two truck loads, perhaps, roughly speaking. 
 
 Representative McDekmott. What would the average freight be on 
 two truck loads at your average freight rate? 
 
 Mr. Smith. If it was specie or jewelry it would be very large. On 
 an average cargo, $6 or $8 a ton — $50 or $60 for the mail we carry. 
 
 Representative McDekmott. That amount each week ? 
 
 Mr. Smith. Twice a week. 
 
 Representative McDekmott. A hundred and twenty dollars a week? 
 
 Mr. Smith. Roughly speaking. 
 
 Representative McDekmott. Then you receive from the Govern- 
 ment at present under the postal subsidy on your line the difference 
 between what would be produced if that space was utilized in carrying 
 freight and $203,000? 
 
 Mr. Smith. Yes, sir. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 127 
 
 BENEFIT TO UNITED STATES. 
 
 Representative McDebmott. What benefit has your line been to the 
 Government of the United States since it was given that subsidy ? 
 
 Mr. Smith. From the postal standpoint and measuring the mail as a 
 commodity it has certainly been a very heavy rate of freight to pay, 
 I will admit. 
 
 Eepresentative McDermott. I am not talking about the rate. I 
 have no objection to that. It is about the ordinary rate paid. But of 
 what benefit has your line been to the Government because of the 
 receipt of that subsidy? 
 
 Mr. Smith. We have opened up commerce. We have developed 
 the commerce of the United States to a great extent. 
 
 Representative McDebmott. Tell us what you have done in that 
 respect. 
 
 Mr. Smith. We are running, as Mr. Clyde said yesterday, practi- 
 cally an express line. We are taking in our vessels cargoes of every 
 description. 
 
 Representative McDermott. Is there any competition with you 
 atalll 
 
 Mr. Smith. There is competition in a measure. There is competi- 
 tion in the larger and heavier commodities like coal and wool and hides 
 and lead and sisal. 
 
 Representative McDermott. Who compete with you in this trade? 
 
 Mr. Smith. Foreign vessels. They go to the ports and remain a 
 week or two and get the large shipments and pick up all they can 
 besides, when we, under the requirements of this act, must go at stated 
 intervals, on stated days, at stated hours, and be back and make a cer- 
 tain speed. 
 
 In that way we give a service which is practically an express service 
 to the shipping community both here and at the other end of the line. 
 That has brought about a large development in the Mexican trade 
 especially, because it enables the shippers to make shipments with regu- 
 larity. They know exactly when the ship is going. They know the 
 rates. It has opened up very many branches. V ery many houses have 
 opened here in various branches of industry, and we claim that, 
 although we have benefited by that act ourselves, we have benefited 
 the commerce of the United States to a very large extent. 
 
 Representative McDermott. That vou have built up trade? 
 
 Mr. Smith. Yes, sir. 
 
 Representative McDebmott. That you have built up trade between 
 the countries. That is an individual benefit. It may affect a large 
 number of individuals or a small number of individuals, but it is 
 nevertheless an individual benefit. What national benefit has been 
 derived? 
 
 Mr. Smith. We have taken the mails to places where they could not 
 go otherwise, where nobody else could take them, perhaps. 
 
 Representative McDebmott. That is one instance. Is there any 
 other you think of ? 
 
 Mr. Smith. In addition to that, the provisions of the act compel us 
 to carry apprentices on board those vessels and to give them an educa- 
 tion. 
 
128 HEABINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 YOUNG MEN FOB NAVY. 
 
 Representative McDeemott. In your fair judgment, during the 
 twelve years that you have been in receipt of the subsidy, approxi- 
 mating $200,000 a year, how many men have you turned out who 
 would be of any use "in time of war? 
 
 Mr. Smith. In what capacity ? As sailors ? 
 
 Representative MoDbrmott. Yes. 
 
 Mr. Smith. I think a great many. 
 
 Representative McDeemott. How many ? 
 
 Mr. Smith. You find our men in almost every line in the United 
 States. 
 
 Representative McDeemott. How many ? 
 
 Mr. Smith. I can not answer the question by numbers. I can give 
 you a fair average. Out of 150, perhaps, or 160 cadets that we take 
 in the course of a year we have an average of 30 to 40 promotions. 
 We have in our service captains who entered our service as cadets. 
 I can mention 3 in our employ to-day. 
 
 Representative McDeemott. You take into your service on an aver- 
 age 150 boys a year. Of those, 30 remain permanently, rising neces- 
 sarily as they grow older to better positions. In ten years that would 
 be 300 cadets who have been fitted for seamen's life. Now, of what 
 use would they be to the Navy in time of war ? 
 
 Mr. Smith. You mean in the auxiliary navy? 
 
 Representative McDeemott. On battle ships and for auxiliary 
 cruisers. 
 
 Mr. Smith. We had an illustration of that during the late war. 
 On the transports they were very useful. I do not know whether 
 under the naval rules they would be required to be expert gunners. 
 I do not suppose they could do that work. 
 
 Representative McDeemott. They are not educated in that line ? 
 
 Mr. Smith. No, sir; but as sailors, as navigators, as handy men 
 about a ship, on transports they would be very useful. That was 
 proved in the last war, when we furnished nine ships. 
 
 Representative McDeemott. How many men did you furnish? 
 
 Mr. Smith. We furnished nine vessels and I should say the average 
 was 60 on each vessel. Taking all the ships, it would be over 500 men. 
 
 LINEES AS TEANSPOETS. 
 
 Representative McDeemott. What service did the vessels render? 
 
 Mr. Smith. They were transports. They carried the troops. 
 
 Representative McDeemott. Do you think it would be any trouble 
 for the United States of America in any war that could possibly arise 
 to obtain transports? 
 
 Mr. Smith. American transports ? 
 
 Representative McDeemott. American or any other kind. We 
 could relax our law so that we could use any transports. 
 
 Mr. Smith. I can not answer the question; but if you depended upon 
 American transports I do not know where you would find them now. 
 
 Representative McDeemott. With the money in our Treasurj^ we 
 would buy or lease any vessel, whether it was American or any other 
 nationality. Can you imagine a condition of war in which the United 
 States would have to rely on subsidized vessels for transport service ? 
 
HEARINGS BEFOBE THE MERCHANT MARINE COMMISSION. 129 
 
 Mr. Smith. My answer to that would be that if you depended on pur- 
 chase you would have to purchase foreign vessels, but you would not 
 be able to purchase the men to man them. Those men would have to 
 be educated, and they would have to be thoroughly patriotic Ameri- 
 cans to be fit for that service. 
 
 Senator Lodge. During the Spanish- American war we were obliged 
 to charter a number of foreign vessels. 
 
 Mr. Smith. I believe so. 
 
 Senator Lodge. Did not the crews invariably leave them ? 
 
 Mr. Smith. A good many of them did. 
 
 Senator Lodge. A good many of them were compelled to do so 
 under what are known as foreign enlistment acts ? 
 
 Mr. Smith. Yes, sir. 
 
 Representative McDermott. Was there any trouble in supplying 
 their places? 
 
 Mr. Smith. There was no trouble. 
 
 Representative McDermott. Is our coastwise trade in such a con- 
 dition that if we were to buy a transport to use in time of war we 
 could not man it? 
 
 Mr. Smith. You may man it in a fashion. 
 
 Representative McDermott. For purposes for which transports are 
 ordinarily used, do you think there would be any trouble? 
 
 Mr. Smith. It would depend very much upon where the transport 
 went. 
 
 Representative McDermott. In your lifetime, perhaps, or, to put it 
 a little further back, in mine, there has been only one year in which 
 we wanted to hire transports. That was the year of the Spanish- 
 American war, 1898, and no other; and we will not have any occasion 
 for that kind of service until another war arises. You supplied, out 
 of ten years' subsidy, 300 men who had been educated so that they 
 could navigate vessels, and the subsidy paid you during that time was 
 something over $2,000,000. That was the result so far as concerns 
 furnishing navigators. 
 
 Mr. Smith. Yes, sir; but there are other considerations. 
 
 Representative McDermott. I know there are, but we have been 
 over those. I wanted to see if my figures were right; that is all. 
 
 ALL built in united STATES. 
 
 Senator Lodge. Your ships were built and are repaired in American 
 yards ? 
 
 Mr. Smith. Absolutely; every pound and every particle of those 
 ships is the product of American labor and was produced in America. 
 
 Senator Lodge. Your ships are owned in this country ? 
 
 Mr. Smith. Yes, sir; they are owned in this country. There is only 
 one exception to my former statement. There is a vessel we purchased, 
 built in England. It is an American vessel now, because it was cap- 
 tured. With that exception, all our American vessels have been built 
 
 here. 
 
 Senator Lodge. And all you build are built in American yards and 
 
 are repaired here ? 
 
 Mr. Smith. Yes, sir; in the United States. 
 
 Senator Lodge. And the money you earn is divided among your 
 stockholders. Are they Americans? 
 3a— 04 9 
 
130 HEAEINGS BEFOEE THE MBROHAlirT MARINE COMMISSION. 
 
 Mr. Smith. Every one of them. 
 
 Senator Lodge. And the freights that are paid remain in the coun- 
 try and do not go out? 
 
 Mr. Smith. That is the absolute fact. 
 
 Senator Lodge. You have built up some commerce there? 
 
 Mr. Smith. We thinli so, decidedly. 
 
 Senator Lodge. You have added to American business ? 
 
 Mr. Smith. I think we have, most decidedly. 
 
 Senator Lodge. That is in addition to the Grovernment having the 
 use of nine of your ships when they were called on for war purposes ? 
 
 Mr. Smith. Yes, sir; during the war. 
 
 Representative McDermott. How many ships have you altogether? 
 
 Mr. Smith. Altogether we have nineteen vessels. 
 
 Representative McDermott. The work they give to American ship- 
 yards does not amount to anything worthy of notice ? 
 
 Mr. Smith. On the nineteen vessels? 
 
 Representative McDermott. Yes. 
 
 Mr. Smith. I do not understand the question. 
 
 Representative McDermott. Is the amount of work which the nine- 
 teen vessels give to American shipyards in the way of repairs a factor 
 of anjr amount? 
 
 Mr. Smith. It amounts to thousands of dollars. 
 
 Representative McDermott. Thousands of dollars a year? 
 
 Mr. Smith. Yes, sir. 
 
 Representative McDermott. How many thousands? 
 . Mr. Smith. It is very difficult to answer; it varies. 
 
 Representative McDermott. Can you roughly give it as to each 
 ship ? 
 
 Mr. Smith. There are many repairs effected while the ship is in 
 port. On some vessels of the higher class we may spend as much as 
 1400 or $500 or $600 on ordinary repairs effected by the vessel in port. 
 We have a periodical survey every year. We generally lay up the 
 ship for a month; take it off for a trip. Those repairs vary according 
 to the condition of the vessel. 
 
 Senator Mallory. Do you not estimate a certain amount or per- 
 centage for repairs? 
 
 Mr. Smith. No, sir; we have not done that in our company. 
 
 Representative McDermott. You have no depreciation account? 
 
 Mr. Smith. No, sir; we have been governed strictly by circum- 
 stances. 
 
 Representative McDermott. Your nineteen vessels, you say, do 
 really employ a good many men in making repairs ? 
 
 Mr. Smith. Large numbers of men in yards. 
 
 five fast ships. 
 
 Senator Lodge. Have you built any new ships lately ? 
 
 Mr. Smith. We have built five ships. 
 
 Senator Lodge. Fast ships? 
 
 Mr. Smith. All of them fast ships. All are what we call under the 
 act second-class vessels. 
 
 Representative McDermott. If you bought those ships abroad 
 they would need the same amount of repairs ? 
 
 Mr. Smith. Yes, sir; I presume so. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 131 
 
 The Chairman. But purchasing them abroad would not give employ- 
 ment to any American yards ? 
 
 Mr. Smith. No, sir. 
 
 Senator Lodge. How much did the largest cost? 
 
 Mr. Smith. The largest vessel, all fitted up, cost $800,000. 
 
 Senator Mallort. What is her tonnage? 
 
 Mr. Smith. Six thousand tons. 
 
 Senator Mallort. What is her speed? 
 
 Mr. Smith. Eighteen knots. 
 
 Senator Mallory. How many of them have you? 
 
 Mr. Smith. One. 
 
 Senator Mallory. You have only one of 18 knots ? 
 
 Mr. Smith. We have two vessels of 5,700 tons each. They are 16- 
 knot ships. 
 
 Senator Lodge. They cost how much ? 
 
 Mr. Smith. In the vicinity of $550,000 apiece; perhaps $600,000. 
 
 Representative Spight. When was the last of these five ships built? 
 
 Mr. Smith. Then we have two more to complete the five. They are 
 vessels of 4,500 tons each, which cost us about $550,000 a piece, the 
 prices varying according to the conditions that existed at the time. 
 
 Senator Lodge. You have spent on those five vessels something 
 over three million dollars? 
 
 Mr. Smith. Whatever is the total of the figures I have mentioned. 
 
 Senator Lodge. That money has been spent in American yards. 
 
 Mr. Smith. It has been spent in the United States. 
 
 COST OF SHIPS CHIEFLY LABOR. 
 
 The Chairman. What proportion of it went to labor? 
 
 Mr. Smith. That question, sir, I am not competent to answer. I 
 imagine very largely— perhaps eighty or ninety per cent, but I do not 
 know. 1 am not myself familiar with shipbuilding. 
 
 Representative McDermott. Do you know what proportion the 
 building of your vessels bears to the total tonnage bunt in American 
 shipyards during the same time ? 
 
 Mr. Smith. The proportion of the total building? I am afraid I 
 can not answer the question. I have not looked into it, but I think it 
 could be very easily ascertained from the reports of the Commissioner 
 of Navigation. 
 
 Senator Lodge. Mr. Cramp told me he built some of those vessels 
 for you. 
 
 Mr. Smith. Yes, sir. 
 
 Senator Lodge. And the labor was 63 per cent, and the material, 
 which I take it was all American material, was 37 per cent. 
 
 Mr. Smith. Yes, sir; he is competent to pass on that point. 
 
 Representative McDermott. If you made any inquiry, what could 
 you purchase similar vessels for abroad? 
 
 Mr. Smith. We have not inquired, because we knew we could not 
 use them in our service. 
 
 Representative McDermott. You stated, in answer to an inquiry, 
 that the stockholders in your corporation were all Americans, and you 
 said the money was, therefore, paid here and kept here. Do you think 
 any one of your stockholders, being well advised of a probable increase 
 in the dividend paid by the Canadian Pacific Railroad, would be suffi- 
 ciently patriotic to refrain from investing his money in Canada? 
 
132 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Mr. Smith. I could not answer the question. 
 
 -representative McDermott. You do not mean that when your 
 stockholders receive their money they have regard for any other ques- 
 tion than the proper investing of it? They do not keep it in this 
 country particularly? 
 
 Mr. Smith. 1 do not know what they do with their money, but I 
 know they are Americans. 
 
 Representative McDbemott. Thev put it where it will produce the 
 most? ^ 
 
 Mr. Smith. I presume so. 
 
 Eepresentative MoDeemott. They are not, so far as concerns the 
 investing of their money, like the commodore in Pinafore — 
 
 But in spite of all temptations 
 To belong to other nations 
 He remains an Englishman! 
 
 Many of your stockholders have foreign investments, have they 
 not — investments in railroads in Canada; investments in steamship lines 
 between this country and abroad ? 
 
 Mr. Smith. I do not know that any one of them has. 
 
 Representative McDermott. You do not know? 
 
 Mr. Smith. I am not quite positive whether they have or not. 
 
 The Chairman. Even if they had, they get their dividends, which 
 they spend in this country, if they are fortunate enough to get 
 dividends. 
 
 postal and other subsidies. 
 
 Representative Minor. Mr. McDermott by his questions illustrated 
 the fact that the amount of money you receive for transporting the 
 mails is out of proportion to what you would have received if you 
 were carrj'ing ordinary freight. 
 
 Mr. Smith. Yes, .sir. 
 
 Representative Minor. You admitted that? 
 
 Mr. Smith. Yes, sir. 
 
 Representative Minor. Which, of course, is true? 
 
 Mr. Smith. Yes, sir. 
 
 Representative Minor. Is it not a fact that the Government made a 
 profit on the mail you carried? The Post-OfEce Department reports 
 a profit of $800,000 a year. 
 
 Mr. Smith. I am informed by people in Washington that the Post- 
 Oflice Department did make a profit. 
 
 Representative Minor. I have the report here. 
 
 Mr. Smith. That is our information. I believe it to be true. 
 
 Senator Lodge. Is there a subsidized English line running to the 
 West Indies ? 
 
 Mr. Smith. To the West Indies? 
 
 Senator Lodge. Yes. 
 
 Mr. Smith. Not from the United States. 
 
 Senator JjOdge. I asked whether an English subsidized line was 
 running to the West Indies? 
 
 Mr. Smith. From England there are a number of lines, and also 
 from Germany. 
 
 Senator Lodge. Some of them are subsidized? 
 
 Mr. Smith. They are all subsidized. They run to Cuba and Mexico, 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 133 
 
 Senator Lodge. 1 have been told that those lines paid their divi- 
 dends out of the subsidies. 
 
 Mr. Smith. There are several lines that run to Cuba and Mexico 
 and generally touch United States ports on the way back and return 
 with our cotton. 
 
 Senator Lodge. They are subsidized lines ? 
 
 Mr. Smith. Yes, sir; all of them. 
 
 Representative McDekmott. Is not the subsidy in each case a postal 
 subsidy ? Do you know of any mercantile subsidy ? 
 
 Mr. Smith. 1 do not. 
 
 Representative MoDbrmott. Do you know of any subsidy that Eng- 
 land grants which is not a postal subsidy ? 
 
 Mr. Smith. I can not answer the question. 
 
 Senator Lodge. That is not true of the line to Jamaica, which has a 
 subsidy. 
 
 Mr. R. A. C. Smith. That is the Elder-Dempster line. 
 
 Senator Lodge. There is an English line running to Jamaica that 
 gets a mercantile subsidy, although almost all English subsidies are 
 postal subsidies. 
 
 details as to ward line. 
 
 Mr. Alfred G. Smith. 1 have here some data concerning our line 
 which I shall be glad to submit to the Commission. 
 
 Fleet of the New York and Cuba Mail Steamship Company, May 1, 1904. 
 OCEAN steamers— AMERICAN, THIRD-CLASS, CONTRACT. 
 
 Tonnage. 
 
 Speed. 
 
 
 Knots. 
 
 6,004 
 
 18 
 
 5,667 
 
 17 
 
 5,667 
 
 17 
 
 4,702 
 
 16 
 
 4,702 
 
 16 
 
 4,033 
 
 14J 
 
 4,115 
 
 144 
 
 3,525 
 
 14 
 
 3,497 
 
 14 
 
 3,497 
 
 14 
 
 2,683 
 
 15 
 
 2,729 
 
 14 
 
 2,820 
 
 144 
 
 When 
 
 Morro Castle i 
 
 Mexico 
 
 Havana 
 
 Esperanza 
 
 Monterey 
 
 Seguran(;'a 
 
 Vigilancia 
 
 Yucatan 
 
 Orizaba 
 
 Yumuri (sold to United States GOTernment). 
 
 City of Washington 
 
 Seneca 
 
 Saratoga 
 
 1901 
 1901 
 1890 
 1890 
 1890 
 1890 
 1890 
 1877 
 1884 
 1878 
 
 OTHER AMERIC.-i.X STE.4.MEBS (NOXCONTRACT). 
 
 Santiago.. 
 Niagara .. 
 Matanzas . 
 
 2,359 
 
 13 
 
 2,265 
 
 124 
 
 3,094 
 
 12 
 
 1879 
 1877 
 1883 
 
 FOREIGN SHIPS (CUBAN). 
 
 Manzanillo . 
 Yumuri. 
 
 Cienfuegos 
 
 Santiago de Cuba . 
 
 1,815 
 
 11 
 
 1,836 
 
 11 
 
 1,887 
 
 10 
 
 1,111 
 
 10 
 
 1902 
 1902 
 1887 
 1878 
 
134 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 Fleet of the New York and Ouba Mail Steamship Company, May 1, 1904 — Continued. 
 
 RECAPITULATION. 
 
 
 Number. 
 
 Tonnage. 
 
 American contract vessels: 
 
 
 
 
 
 
 
 
 
 
 
 Second elasE 
 Third class. 
 
 
 
 
 
 
 
 
 
 3 
 
 10 
 
 
 17,338 
 
 
 
 
 
 
 
 
 
 36, 303 
 
 
 
 
 
 
 
 
 
 
 13 
 
 
 53,641 
 
 Deduct sold 
 
 
 
 
 
 
 
 
 1 
 
 
 3,497 
 
 
 
 
 
 
 
 
 
 Total contract 
 American noncontn 
 
 
 12 
 3 
 
 
 60,144 
 7,718 
 
 ip.t vpsselR 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 15 
 
 
 57,862 
 
 Foreign 
 
 
 
 
 
 
 
 
 4 
 
 
 6,649 
 
 
 
 
 
 
 
 
 
 Grand tota 
 
 1 
 
 19 
 
 64,611 
 
 
 
 
 
 
 
 
 
 
 & 
 
 
 
 
 §1 
 
 n 
 
 i 
 
 'Si 
 
 a 
 
 
 
 
 R 
 
 
 
 
 
 
 Name. 
 
 1 
 
 1 
 Q 
 
 o 
 
 1 
 
 a s 
 
 II 
 11 
 
 1 
 
 •a 
 
 1 
 
 e 
 
 a 
 o 
 
 i 
 
 1 
 
 f 
 
 a; 
 
 no 
 
 1 
 
 5 
 
 Pantry, por 
 
 etc. 
 Waiters 
 bell boy 
 
 i 
 
 Hi 
 
 3 
 
 
 $1, 212 
 
 1 
 
 
 
 1 
 
 
 6 
 
 
 
 
 
 
 s 
 
 
 
 
 3 
 
 "> 
 
 1 
 
 
 
 1,199 
 1,199 
 1,199 
 
 1 
 
 •> 
 
 1 
 
 1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 YnTnnri 
 
 1 
 
 9 
 
 1 
 
 1 
 
 6 
 
 1 
 
 
 
 
 
 ^ 
 
 9 
 
 1 
 
 9 
 
 2 
 
 1 
 
 1 
 
 28 
 
 Santiago deCuba... 
 
 1 
 
 2 
 
 1 
 
 
 6 
 
 1 
 
 2 
 
 2 
 
 3 
 
 2 
 
 1 
 
 2 
 
 2 
 
 2 
 
 1 
 
 28 
 
 Total 
 
 4,809 
 
 4 
 
 8 
 
 4 
 
 2 
 
 24 
 
 4 
 
 8 
 
 8 
 
 12 
 
 8 
 
 ^ 
 
 8 
 
 9 
 
 6 
 
 4 
 
 113 
 
 
 
 
 
 
 
 
 h, 
 
 >- 
 
 s 
 
 
 
 
 
 
 
 
 
 
 1 
 
 s 
 
 
 
 Name. 
 
 i 
 1 
 
 o 
 
 
 1 
 
 1 
 
 MS 
 
 o o- 
 
 i 
 
 i 
 
 S 
 13 
 
 1 
 
 la 
 
 •a 
 g 
 
 1 
 1 
 
 S 
 u 
 
 
 
 1 
 
 1 
 
 ^ 
 
 a 
 t 
 
 J2 
 
 a 
 1 
 
 i 
 
 i 
 
 
 2 
 
 o 
 
 O 
 
 u 
 
 w 
 
 tn 
 
 U 
 
 o 
 
 <« 
 
 O 
 
 s 
 
 o 
 
 03 
 
 o 
 
 i^ 
 
 m 
 
 H 
 
 Morro Castle 
 
 $4,144 
 
 
 3 
 
 
 4 
 
 15 
 
 7 
 
 
 3 
 
 6 
 
 6 
 
 18 
 
 15 
 
 6 
 
 fi 
 
 10 
 
 24 
 
 2 
 
 128 
 
 
 3,317 
 
 
 3 
 
 
 ■^ 
 
 11 
 
 6 
 
 
 3 
 
 A 
 
 s 
 
 I"" 
 
 9 
 
 5 
 
 fi 
 
 6 
 
 
 
 
 Havana 
 
 3,367 
 
 
 8 
 
 
 3 
 
 13 
 
 6 
 
 
 3 
 
 6 
 
 3 
 
 12 
 
 9 
 
 S 
 
 6 
 
 8 
 
 14 
 
 2 
 
 96 
 
 Esperanza 
 
 3,145 
 
 
 3 
 
 
 3 
 
 11 
 
 b 
 
 
 3 
 
 6 
 
 3 
 
 9 
 
 9 
 
 b 
 
 H 
 
 7 
 
 20 
 
 2 
 
 95 
 
 Monterey 
 
 3,145 
 
 
 3 
 
 
 3 
 
 11 
 
 b 
 
 
 3 
 
 « 
 
 3 
 
 9 
 
 9 
 
 5 
 
 fi 
 
 7 
 
 20 
 
 2 
 
 95 
 
 Vigilancia 
 
 2,746 
 
 
 3 
 
 
 3 
 
 12 
 
 4 
 
 
 3 
 
 3 
 
 3 
 
 9 
 
 6 
 
 4 
 
 R 
 
 6 
 
 14 
 
 2 
 
 80 
 
 Seguranca 
 
 2,745 
 
 
 3 
 
 
 3 
 
 12 
 
 4 
 
 
 3 
 
 3 
 
 3 
 
 9 
 
 6 
 
 4 
 
 .5 
 
 fi 
 
 14 
 
 2 
 
 80 
 
 Yucatan 
 
 2,640 
 
 
 3 
 
 
 3 
 
 11 
 
 4 
 
 
 3 
 
 3 
 
 3 
 
 9 
 
 fi 
 
 4 
 
 5 
 
 fi 
 
 10 
 
 2 
 
 75 
 
 Orizaba 
 
 2,640 
 
 
 >i 
 
 
 s 
 
 11 
 
 4 
 
 
 •\ 
 
 '-^ 
 
 ^ 
 
 () 
 
 e, 
 
 /t 
 
 5 
 
 ^ 
 
 10 
 
 
 
 75 
 52 
 
 Saratoga 
 
 2,078 
 
 
 2 
 
 
 3 
 
 9 
 
 
 
 3 
 
 3 
 
 
 6 
 
 fi 
 
 3 
 
 4 
 
 5 
 
 4 
 
 
 Seneca 
 
 2,233 
 
 
 M 
 
 
 ■^ 
 
 ^ 
 
 
 
 S 
 
 •i 
 
 
 q 
 
 6 
 
 S 
 
 4 
 
 fl 
 
 3 
 
 
 55 
 
 C/ Washington.. 
 
 2,368 
 
 
 3 
 
 
 3 
 
 9 
 
 
 
 3 
 
 3 
 
 3 
 
 9 
 
 6 
 
 3 
 
 4 
 
 5 
 
 3 
 
 
 58 
 
 Santiago 
 
 1,973 
 
 
 2 
 
 
 8 
 
 9 
 
 
 
 3 
 
 3 
 
 
 6 
 
 4 
 
 3 
 
 4 
 
 5 
 
 3 
 
 
 49 
 
 Niagara 
 
 1,973 
 
 1 
 
 2 
 
 
 3 
 
 9 
 
 
 
 3 
 
 3 
 
 
 6 
 
 4 
 
 3 
 
 3 
 
 fi 
 
 3 
 
 
 49 
 
 Matanzas 
 
 1,834 
 
 ^ 
 
 3 
 
 
 3 
 
 9 
 
 
 
 3 
 
 3 
 
 
 6 
 
 4 
 
 1 
 
 2 
 
 2 
 
 3 
 
 
 43 
 
 Total 
 
 40,347 
 
 15 
 
 42 
 
 15 
 
 46 
 
 161 
 
 45 
 
 15 
 
 ■45 
 
 60 
 
 33 
 
 138 
 
 105 
 
 58 
 
 71 
 
 90 
 
 162 
 
 24 
 
 1,125 
 
 Dates of initial trips of the following vessels: Havana, February 4, 1899; Mexico, 
 June 17, 1899; Morro Castle, November 1, 1900; Esperanza, May 8, 1901; Monterey, 
 June 19, 1901. 
 
 Cadets. — Average employed per year, 168; average promotions per year, 28. 
 
 MAIL CONTRACTS EXECUTED BETWEEN THE POSTAL AUTHORITIES AND THE NEW YORK 
 AND CUBA MAIL STEAMSHIP COMPANY. 
 
 First contract. — Under Postmaster-General Wanamaker, on routes 69 and 70, New 
 York to Habana and Mexican ports and return; and New York to Habana and 
 return, respectively. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 135 
 
 Contract for five years from November 1, 1892, to October 31, 1897. Vessels of the 
 third class. Compensation at the rate of $1 per mile, outward only. Total compen- 
 sation per year, both routes, $203,580. 
 
 Second contract. — Under Postmaster-General Gary, same routes and compensation, 
 etc., as under first contract. Contract for five years from November 1, 1897, to Octo- 
 ber 31, 1902. Total compensation per year, both routes, $203,580. 
 
 This contract provides that in addition to the regular vessels of the line, other ves- 
 sels, two in number, approximating the higher or second-class vessels, should be 
 built, and it was agreed that construction of one of the two new vessels aforesaid 
 should be commenced at once a,nd be pushed to completion, and that construction of 
 the other should commence within six months from date of completion of the first 
 one. 
 
 Two vessels were at once contracted for and completed, the first one, the Havana, 
 entering the service February 4, 1899, and the second vessel, the Mexico, entering the 
 service June 17, 1899. 
 
 Third contract. — Under Postmaster-General Payne, on route 70, for five years from 
 November 1, 1902, to October 31, 1907, New York to Habana and return, and on 
 route 69, for ten years from November 1, 1902, to October 31, 1912, New York to 
 Mexican ports and return. Vessels of the third class and compensation same as 
 above, i. e. , at the rate of f 1 per mile outward only. Total compensation per year, 
 both routes, $203,580. 
 
 Note. — While the contract is for vessels of the third class and the compensation is 
 on that basis, the company placed in the service five ships, three of which are ves- 
 sels of the higher or second class in all respects as to tonnage, speed, and all other 
 requirements, and two of which are vessels of the second class as regards speed, etc., 
 though slightly under the required tonnage. 
 
 The Chairman. At this point the Chair will take the liberty of say- 
 ing that there will be a recess for luncheon from 1 until 2.30 o'clock 
 to-day, and that the progress which is being made, interesting as it is, 
 develops the fact that we shall have to sit here to-morrow forenoon. 
 We are due in Philadelphia on Thursday morning. We will not be 
 able to stay here. longer than 12 o'clock or thereabouts to-morrow. 
 The Chair will therefore take the liberty of admonishing the gentlemen 
 who are to follow that it is desirable that they should be as brief as 
 possible. 
 
 REPORT OF SPECIAL COMMITTEE OF THE MARITIME ASSOCIA- 
 TION OF THE PORT OF NEW YORK. 
 
 Mr. Fields S. Pendleton. Mr. Chairman and gentlemen, pursuan 
 to resolutions which I offered in the Maritime Exchange in June last 
 a committee was appointed to look into the shipping subject, and with 
 your permission I will ask the secretary, Mr. Smith, to read the 
 report. 
 
 Mr. A. R. Smith. I will first read the resolutions under which the 
 committee acted. The following resolutions were adopted by the 
 board of directors of the Maritime Association of the port of New 
 York on June 10, 1903: 
 
 "Whereas the decline of American shipping in the foreign trade 
 from 2,600,000 tons in 1861 to less than 900,000 tons in 1902, during 
 which period our foreign commerce has quadrupled in value, has long 
 attracted the attention of the American people and has stimulated 
 Congress to devise remedial measures, almost all of which have failed 
 of enactment, and 
 
 "Whereas it is believed that the nation will be strengthened and 
 protected if it has as an auxiliary means of national defense a large 
 number of merchant ships, officered and manned by American citi- 
 zens, and the workmen of the country will be benefited if they can 
 
136 HEARINGS BEFOEE THE MERCHANT MARINE COMMISSION. 
 
 secure employment in the building and the running of the larger part 
 of the ships required for the carriage of our imports and exports: 
 Therefore, be it 
 
 ''^Besolved^ That the Maritime Association of the port of New York, 
 desirous of promoting the building of American shipping and the 
 employment of American officers and seamen in their navigation in 
 our foreign trade, hereby authorizes the president of this association 
 to appoint a committee of five to ascertain by what method ships built 
 in American shipyards, officered and manned by American citizens, 
 may most quickly and effectively secure the larger part of our foreign 
 carrying, the said committee to present its report to the board of 
 directors of this association no later than December 1, 1903; and be it 
 further 
 
 '"'' Resolved, That the committee appointed pursuant to this resolution 
 is further authorized to confer and cooperate with similar committees 
 appointed by other organizations to undertake a like investigation." 
 
 The report, which was made by the committee appointed under the 
 resolutions, is as follows: 
 
 New York, May 21, 190^. 
 C. B. Parsons, Esq., 
 
 President Maritime Association of the Port of New Yorh, 
 
 New Yorh City. 
 
 Dear Sir: The undersigned, members of the committee appointed 
 by you, pursuant to a resolution of the board of directors of the Mari- 
 time Association of the port of New York, adopted on June 10, 1903, 
 "to ascertain by what method ships built in American shipyards, 
 officered and manned by American citizens, may most quickly and 
 effectively secure the larger part of our foreign carrying," after as care- 
 ful and extended consideration of the subject as the information in our 
 possession and the time at our disposal afforded, recommend as fol- 
 lows: (1) The adoption of the discriminating-duty policy in what may 
 be designated as the indirect trade, to wit, to collect extra or discrimi- 
 nating duties on the imports coming into the United States on foreign 
 vessels from countries other than their own through such amendment 
 of section 22 of the existing tariff act as may be necessary to accom- 
 plish that purpose. (2) Such an amendment of the ocean mail service 
 act of 1891 as will provide reasonable mail compensation for steam- 
 ships of sufficient speed on regular lines to make it desirable to utilize 
 them for the carriage of the mails, having in view their usefulness as 
 auxiliary cruisers and for the common defense. We would suggest 
 that this policy should be pursued only in such cases and upon such 
 routes as would fail otherwise to secure the establishment of steamship 
 lines under the policy of discriminating duties on imports and tonnage 
 dues. 
 
 In dealing with this question a number of complications are pre- 
 sented that are inapplicable to other industries, rendering a wise and 
 practical solution of the problem difficult. These may be briefly enu- 
 merated as follows: 
 
 SHIPPING EVERYWHERE FOSTERED. 
 
 1. The development and maintenance of an effective merchant ship- 
 ping, through governmental assistance and regulation, has long been 
 the especial care of practically all of the great powers, while no great 
 
HEAEINGS BEl'ORE THE MEECHAKT MAEINE COMMISSION. 137 
 
 interest has been so continuously neglected by the Government of the 
 United States during the past forty years as that of its merchant 
 shipping. 
 
 2. Some nations encourage the building of ships by direct payments 
 from their national treasuries of bounties of a fixed sum per ton of 
 hull and a fixed sum per horsepower of machinery, the two, in the 
 case of steamships, aggregating a very substantial portion of the total 
 cost of such construction. Other nations make extremely liberal pay- 
 ments from their treasuries for the carriage of the mails to steamsnips 
 of I'egular lines; still others pay bounties based on the distance sailed 
 and the size of the vessel; others, again, have domestic regulations of 
 a character to stimulate the construction and ownership of merchant 
 shipping through rebates on imported materials, low cost of trans- 
 porting such materials over railroads controlled by the Governments, 
 low rates of transportation on exports from interior points to distant 
 foreign points when the exports are carried in national vessels; and 
 still other nations maintain a system of payments based upon the 
 admiralty usefulness of vessels, besides maintaining elaborate national 
 naval reserves, in which their shipmasters, officers, and seamen are 
 carried on the pay rolls of the nation during the entire period of their 
 active employment afloat. 
 
 ESSENTIAL TO NATIONAL DEFENSE. 
 
 3. Reports of parliamentary and other committees that have studied 
 this subject make it perfectly clear that other nations give this attention 
 and pursue the different policies already outlined chiefly because of 
 the military necessity for and the value of merchant ships and trained 
 and experienced seamen, and incidentally because of the commercial 
 advantages arising from such possession. 
 
 4. These important considerations bearing upon this subject very 
 naturally invest it with an importance far greater than the economic 
 advantages arising from the possession of merchant ships and seamen. 
 We feel sure that no one can make a careful and thoughtful study of 
 this subject and fail to be impressed with the necessity, from a military 
 and naval point of view — from theparamountpointof viewof national 
 defense — of a large, prosperous, and effective American mercantile 
 marine. Nor can a study of the subject, together with a clear com- 
 prehension of the deplorable conditions of American shipping to-day, 
 fail to impress the student with the dangers, both military and com- 
 mercial, that threaten the United States because of its feeble and 
 utterly inadequate merchant shipping. 
 
 6. Approaching the subject with these considerations in mind, it must 
 be obvious that the benefit to individuals actively engaged in the 
 ownership of vessels and in their construction and operation should 
 onlj' concern the nation to the extent of inducing it to make such pro- 
 visions, in the enactment of law for the establishment of an American 
 maritime policy, as to make the ownership, building, and operation 
 of the merchant ships attractive to our citizens, and it can not be 
 made attractive unless it is profitable. Such attraction and profit, 
 however, are merely incidental to the strengthening of the national 
 defenses and the promotion of the general welfare. If the legisla- 
 tion errs on the side of liberality the competition between our own 
 people may be depended upon to quickly operate for the protection 
 
138 HEARINGS BEFOKE THE MEECHANT MABINE COMMISSION. 
 
 of the Government, while if the legislation enacted is insufficient 
 to make the venture into shipowning, shipbuilding, and ship opera- 
 tion attracti\'e and profitable to individuals, the danger continues 
 to threaten the nation. Indeed, even if all of our people were profit- 
 ably employed in more attractive industries the national defense and 
 welfare require the earliest possible enactment of such legislation as 
 will attract our people into snipowning, shipbuilding, and ship opera- 
 tion upon a scale of sufficient magnitude to place the nation in posset 
 sion of a large, powerful, and profitable mercantile marine. 
 
 BOTH BUILDING AND MAINTENANCE MOKE COSTLY HERE. 
 
 6. National conditions over which our shipowners and shipbuilders 
 have no control, and which they either individually or collectively are 
 
 Eowerless to chang'e, make the cost of building vessels in the United 
 tales much greater (probably at least 30 per cent) than the cost of 
 building vessels in other countries. The cost of manning and victual- 
 ing these American-built vessels is also much greater (probably 30 
 per cent) than the most of manning and victualing foreign vessels. 
 In addition, there are other expenses in the management of vessels 
 which are greater in the United States than they are in other countries, 
 such as taxes, repairs, outfit, and equipment. Again, American in- 
 vestors are not satisfied with the small returns upon their investments 
 that investors in other countries are. Most of these higher expenses 
 are the outgrowth of conditions resulting from the policy of high pro- 
 tection that has obtained in the United States during practically the 
 same period that American shipping engaged in the foreign trade 
 has been declining. The cost of materials entering into the construc- 
 tion and outfitting of American vessels is necessarily higher because 
 of the conditions that obtain in other industries that are highly pros- 
 perous under the protection afforded by the tariff — industries employ- 
 ing precisely the same materials that are employed in shipbuilding 
 and outfitting. The wages of the workmen employed in our shipyards 
 are upon the same high scale, due to the general standard of wages 
 prevailing in similar industries that are great, powerful, and profitable 
 under tariff protection. While tbese conditions continue to exist it is 
 futile to suggest that ships can be built in the United States as cheaply 
 as they can be built abroad. If they could, they would be, and the 
 fact that they are not built at all indicates that their cost renders th6m 
 unprofitable in comparison with foreign vessels. 
 
 7. If, therefore, other nations did none of the things that they so 
 long have done and still do for the encouragement and maintenance 
 of their merchant shipping, the differences in cost of construction, 
 operation, etc. , between American and foreign vessels would suffice to 
 make it unprofitable, and hence unattractive to Americans to either 
 invest in or build ghips in the Utited States for the foreign trade. But 
 when we add to these undeniable advantages that our foreign competi- 
 tors possess over our own citizens the advantages that they also pos- 
 sess through governmental assistance and regulation, then the reasons 
 why American vessels carry but 9 per cent of our total foreign commerce 
 that is valued at nearly $2,500,000,000 annually, and the reasons why 
 foreign vessels carry over 90 per cent of this commerce, receiving 
 therefor freight charges closely approximating 1200,000,000 annually, 
 are pretty well explained and set forth. And these are the conditions 
 
HEAEIKG9 BEPOEE THE MERCHANT MABINE COMMISSION. 139 
 
 that Congress must recognize and adequately meet through the adop- 
 tion of effective legislation before the problem of esteblishing an 
 American mei'chant marine in the foreign trade measurably equal to 
 the needs of our foreign carrying has been solved. 
 
 SHIPS FIRST PEOTEOTED. 
 
 At the inception of our Government under the existing Constitution, 
 in 1789, the rapid and prosperous development of our merchant ship- 
 
 Sing was provided for through the policy of discriminating import 
 uties and tonnage dues. The act as first drawn provided for a reduc- 
 tion of the duties below the sum fixed in the tariff when such imports 
 came in American vessels. So rapid was the growth of our shipping, 
 and so great the reduction in the duties caused thereby, that in a short 
 time it became necessary to so change the act as to exact a higher duty 
 on imports in foreign vessels than the amount fixed in the tariff and 
 as applicable to imports in American vessels. In a few years the great 
 bulk of our foreign carrying was transferred from foreign to American 
 vessels, the latter for years carrying an average of 90 per cent of our 
 foreign commerce. In 1826 American ships carried 92. 5 per cent of 
 our entire foreign commerce, a proportion never exceeded in the 
 nation's history. Shortly thereafter, in 1828, Congress provided for 
 the suspension of the discriminatory policy (under which our shipping 
 had, for the prolonged period of nearly forty years, been so large, so 
 powerful, and so prosperous), whenever it was show to the President's 
 satisfaction that it had been abandoned by other nations. 
 
 It was believed that protection was no longer necessary in order to 
 enable American vessels to command our foreign carrying. Contem- 
 poraneously with the abandonment, by Presidential proclamation, of 
 the discriminatory policy provision was inserted in our treaties and 
 conventions of commerce and navigation, as from time to time they 
 were exchanged with foreign Governments, by which we bound our- 
 selves not to readopt that policy. This explains why it is that these 
 treaties and conventions must be changed or abrogated, as they pro- 
 vide for, before the discriminatory policy can be readopted. As the 
 discriminatory policy was gradually abandoned the proportion of the 
 imports and exports carried in American vessels has steadily declined, 
 so that instead of American vessels carrying 92.6 per cent, as they did 
 in 1826, they now carry but 9 per cent. So marked, indeed, has been 
 the decline in our shipping in the foreign trade that it is to-day less 
 by 100,000 tons than it was nearly a century ago, although the com- 
 merce to carry has increased twentyfold. 
 
 A RETURN TO HISTORIC POLICY. 
 
 For the encouragement of American steamships other than those 
 operating under the ocean mail service act, for the encouragement of 
 American sailing vessels, and for the extension of our export trade 
 we have recommended a return to the early American policy of dis- 
 criminating import duties and tonnage dues, through an amendment 
 of section 22 of the existing tariff act. The section in question still 
 carries* upon our statute books a remnant of the provisions of the act 
 of 1789, by which the discriminatory policy was then applied to our 
 maritime development. That it has not entirely disappeared from 
 
140 HEAMlJGS BEl'OEE I'HE MERCHANT MARINE COMMISSION. 
 
 our statutes shows the tenacity with which American statesmen have 
 adhered to the shadow of a law the substance of which, in the full tide 
 of its original application, accomplished so much for the upbuilding 
 and maintenance of our shipping in the foreign trade. 
 
 Although changes have been made in our laws, and provisions have 
 been made in a large number of our treaties with other nations that at 
 
 {)resent forbid a return to the discriminatory policy, we think that the 
 aws should be so amended and the treaties so changed or, if necessary, 
 abrogated as to permit of the reapplication of the policy of discrimi- 
 nating duties on imports and discriminating dues on tonnage, so as to 
 restore that portion of the trade of the United States to American 
 vessels that is now carried on in vessels coming from ports not their 
 own, in ballast, or with cargoes for the United States, or seeking to 
 secure cargoes from the United States to ports other than those of the 
 country whose flag they fly. While we may concede that a British 
 vessel, for example, maj^ properly claim the right to bring a cargo to 
 the United States, or to come in ballast from a British port, and to pro- 
 ceed in ballast or carry a cargo to a British port from the United 
 States under the same terms that American vessels may do so, we do 
 not concede the right of a British vessel to come to the United States 
 with cargo or in ballast from a port not British, nor to carry a cargo 
 from the United States to other than a British port upon the same 
 terms as an American vessel. To foreign vessels engaged in trade of 
 the character last outlined we recommend the application of a dis- 
 criminating duty upon imports and a discriminating tonnage tax so 
 arranged as to give a preference to Ameiican vessels; and in the case 
 of such vessels coming with cargoes not now subject to a duty, we 
 would subject their cargoes to such a duty as would create a prefer- 
 ence for American vessels. The prompt construction of American 
 vessels and the placing of them in the trade to which we have alluded 
 would very quickly overcome the temporary inconveniences arising 
 from the application of a duty upon imports not now subject to a duty. 
 The early and the ultimate effect of this policy would be to give to 
 American vessels practically the entire carriage of the commerce 
 between the United States and the West Indies, Central and South 
 America, a considerable portion of Asia, and many of the islands of 
 the sea. When we say to a nation — such, for example, as Cuba — that 
 she may send her vessels to our ports with cargoes, or in ballast, or 
 clear from the ports of the United States with cargo or in ballast for 
 a Cuban port or ports, asking in return that American vessels be 
 allowed like privilege, we have done all for Cuban vessels that Cuba 
 may properly ask. And the same reasoning applies to British, or 
 German, French, Italian, or other ships with respect to the trade 
 between their port and ours. 
 
 This would give to each country their natural and just amount of 
 shipping, because the countries that have ships to trade will be nearly 
 equal, and with countries that have no tonnage we would do it all in 
 American bottoms. This is fair, honorable, and just to all countries, 
 giving, if anything, the countries in Europe, where labor is cheap, 
 natural advantage of building their ships more cheaply than ours, but 
 it gives us practically the entire shipments to and from countries in 
 the trade with the United States that have no shipping of their own. 
 It would not do, of course, to provide for the discriminations here 
 recommended and not provide for the possible evasions of our enact- 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 141 
 
 ment — for example, through the wholesale nationalization of British, 
 German, French, Italian or other foreign ships, as Cuban, West Indian, 
 Central or South American, except such ships were so nationalized 
 before the introduction of the measure in Congress intended to carry 
 this policy into effect. On the contrary, the recognition of such ves- 
 sels as of the nationality of their flag should rest upon their having 
 acquired such nationality before the introduction in Congress of the 
 measure we recommend, or upon their having been built upon the soil 
 of the country whose flag they carry. The adoption of this policy 
 would, in effect, extend the coastwise laws of the United States to the 
 trade of the Western Hemisphere, and it would immediately provide 
 business for a shipping equal to the carriage of fully 30 per cent of 
 the value and probably 50 per cent of the bulk of our foreign com- 
 merce. In other words, it would provide business for American ton- 
 nage approximately five times greater than that now under register in 
 the foreign trade. 
 
 SHIPS ALONE NOW UNPROTECTED. 
 
 In the case of foreign shipping now carr5'ing the foreign commerce 
 of the United States, American vessels can at present find no profit 
 because, as in the case of many French and a growing number of Italian 
 sailing vessels, they receive such large bounties from their respective 
 governments, based upon tonnage and distance sailed, and bounties 
 upon construction as well, as to render American competition impos- 
 sible because unprofitable. In the case of certain foreign steamers 
 engaging in the trade between the United States and the We^t Indies, 
 Central and South America, which return to their home ports only for 
 repairs or upon the expiration of their charters, and which in many 
 cases we are informed bring a large quantity of the provisions with 
 which they victual their ships from their home ports and place them 
 in United States bonded warehouses, from which they withdraw them 
 as needed, the difference in the cost of their operation as compared 
 with the cost of operating American vessels is but little more than 
 one-half. The trade between the United States and the West Indies 
 and Central America is all but monopolized by ships under the flags of 
 European nations. 
 
 In respect to the products of the United States which are subject to 
 the competition of foreign products, it has for nearly a half a century 
 been the policy of the United States to levy such a duty upon imported 
 competing products as to place the cost of their production as nearly 
 as may be upon a level with the cost of similar productions in the 
 United States. But this is not true of foreign ships. They are per- 
 mitted to enjoy absolute free-trade relations with the United States; 
 to compete, unrestricted by any tariff or other tax, freely with Ameri- 
 can vessels in the carriage of the imports and exports of the United 
 States. While a British or a German factory upon the land, there- 
 fore, may find little or no market for its products in the United States, 
 because of the restraining effect of the protective tariff, there is the 
 best market in all the world for the products of British and German 
 shipyards, because in the United States they find an unrestricted 
 opportunity for the freest competition with the products of American 
 shipyards. 
 
 Let us illustrate this case. Take the product of a British factory 
 and a British shipyard, we will say, with both of them side by side in 
 
142 HEARINGS BEFOEB THE MBBCHANT MARINE COMMISSION. 
 
 the port of Liverpool. The product of the factory, in order to com- 
 pete with similar products in the United States, is compelled to bear 
 the expense of freightage to the United States, and then in all probability 
 meet a tariif duty of 40 per cent, which affords ample protection to the. 
 American producers of similar products. But the British ship, launched 
 from the shipyard right alongside of the British factory, is able to 
 earn the freight charges on bringing the product of the British factory 
 to the United States without being subject to any tax in the United States 
 of any kind whatsoever, and, when in the United States, that British 
 ship is permitted to compete on even terms with an American ship in 
 the carriage of a cargo from the United States. The question arises. 
 Why is the product of the British factory required to bear such a 
 heav}' tax in the United States and the product of the British shipyard 
 permitted to bear no tax at all ? Why is the labor in the American 
 factory so deserving of protection against the competition of the labor 
 in the British factory, and the labor in the American shipyard unde- 
 serving of any protection against the labor in the British shipyard? 
 Does this not explain why it is that foreign shipping has increased 
 and flourished in the foreign carrying trade of the United States. 
 
 A COSTLY DISCRIMINATION. 
 
 Does it not explain, in large degree at least, the cause of the pros- 
 perity of our land industries that are protected against foreign com- 
 petition, and which grow great and prosperous as a consequence? 
 And does not the lack of similar or equal protection for our ships in 
 large p^t, if not wholly, explain the cause of their decline from 
 2,496,894 tons under register in 1861 to but 879,264 tons in 1903, dur- 
 ing a time that the ocean-borne foreign commerce of the United 
 States has increased in value from $584,996,066 in 1861 to a value of 
 12,240,797,420 in 1903? And why should the products of British, 
 German, and other factories be subject to a high duty for the protec- 
 tion of American citizens producing similar articles, and the products 
 of German and other shipyards be subject to no discrimination what- 
 ever in their competition, in the foreign carrying trade of the United 
 States, with the products of American shipyards? Why this injustice, 
 this unfairness, this withering free-trade discrimination against the 
 American ship? We feel convinced that the American people are, to 
 a very large extent, quite unaware of this unjust, unnatural, and 
 demoralizing discrimination in the laws of the IJnited States against 
 one of the greatest, most valuable, and most necessary products of the 
 United States. 
 
 In suggesting the discriminating duty policy to our people, many of 
 them, when first considering it, recall that the value of our exports is 
 one and a half times that of our imports, while the bulk of our exports 
 is probably three or four times that of our imports, which results in 
 a large number of vessels coming into the United States in ballast, 
 against which, through the exaction of a duty on imports at least, there 
 could operate no discrimination. This important phase of the ques- 
 tion we commend to the serious consideration of the Congress in deal- 
 ing with the subject. But their case could be provided for through 
 the application of a tonnage tax sufficient to equalize their position 
 when at an American port seeking business. But the application of 
 the discriminatory policy would, as has been said, be most effective 
 upon this hemisphere. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 143 
 
 MOST EFFECTIVE IN SOUTHERN TRADE. 
 
 Our exports to North American countries, including the West Indies 
 and Central America (but excluding British North America), are 
 about equal to our imports in value, the imports in 1902 amounting 
 to $102,288,961, and the former amounting to 192,262,805. In the 
 same year our imports from South America amounted in value to 
 $119,785,756, and our exports to South America amounted in value to 
 $38,043,617, so that our exports were not equal in value to one-third 
 of our imports. 
 
 In other words, we could more than treble our exports to South 
 America before they would equal in value our imports from that sec- 
 tion. If the discriminatory policy here advocated were applied its 
 effect would be most wholesome and beneficial in our trade with the 
 West Indies, Central, and South America. Foreign vessels would 
 then find it not so profitable to engage in what is known as " the trian- 
 gular trade," by which the manufactures of Europe are sent to our 
 West Indian, Central, and South American neighbors and their prod- 
 uct brought to the United States, and the products of the United 
 States shipped to Europe, a large portion of the latter being required 
 to meet the obligations we incur through the purchase of the products 
 of our neighbors to the south. On the contrary, there would imme- 
 diately arise a demand for American vessels to bring the products of 
 the south of us to our ports. American vessels would be in demand, 
 in order that the products we imported from that section could enter 
 our ports without being subjected to an extra duty. American vessels 
 would respond to the demand, but, in order to make the voyage out 
 and back as profitable as possible, a systematic effort would be made to 
 secure cargoes outward. These would be carried very cheaply, at a 
 rate closely approximating the cost of carrying ballast, with the' result 
 that there would be a great opportunity opened to our manufacturers 
 to secure access to markets to which they nave but an indifferent serv- 
 ice at present, and the freight rates exacted by American vessels would 
 be so low as to have the effect of rapidly displacing European with 
 American manufactures in the countries to the south of us. 
 
 Vessels engaged in the trade would be commanded by intelligent and 
 alert Americans, who would make clear to their countrymen just what 
 kind of goods, just how packed, what accommodations as to credit, etc., 
 our neighbors to the south were enjoying, and the demand of our 
 shipowners for outward cargoes would soon force itself upon our 
 manufacturers and our exporters, with the result that we should soon 
 very largely increase our export trade, and as a consequence of this 
 frequent interchange of commodities cause a very healthy and satis- 
 factory growth all along the line. There is no reason why a very 
 much larger market should not be found for our manufactures in the 
 West Indies, Central and South America, and by placing a discrimi- 
 nating import duty and tonnage tax on foreign vessels bringing cargoes 
 to the United States from the countries to the south the most effective 
 instrumentality possible would be invoked both for the benefit of our 
 shipowners and our manufacturers. 
 
144 HEABINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 VALUABLE ALSO IN ORIENT. 
 
 In like manner larger opportunities would be open to American ves- 
 sels in the trade between the United States and the Orient. The great 
 and growing commerce between China and Japan and the United States 
 would fall to American vessels through the imposition of discrimina- 
 ting import and tonnage dues upon all other foreign vessels coming 
 from those ports than those flying the Chinese and Japanese flags. 
 We quite properly regard ourselves upon the threshold of a new and 
 enormous development upon the Pacific, to which nothing could so 
 signally contribute to the advantage, immediate and lasting, of Ameri- 
 can vessels, as through the reasonable policy of discriminations that 
 we recommend. 
 
 We should find, we have no doubt, that the discriminating duty 
 policy, once inaugurated, would prove to be extremely attractive to 
 the nations with which we trade. In the case of the few who now 
 enjoy an undue share of the carriage of our imports and exports, it 
 would not be so pleasing, but, happily, these are extremely few in 
 number. 
 
 LIBEBAL BRITISH SUBSIDIES. 
 
 The policy of liberal compensation to steamships of regular lines for 
 carrying the mails was adopted by Great Britain, in 1838, and in 1845 
 the first provision was made by our Congress for similar payments to 
 American steamships of regular lines. This enactment led to the 
 establishment of several American steamship lines in the late "forties," 
 and early "fifties," which lines were discontinued when our Govern- 
 ment withdrew the mail compensation, often called subsidies, in 1857. 
 The Cunard Steamship Company, with which the British Government 
 made its first contract for the ocean carriage of the mails in 1839, has 
 ever since that time, a period of sixty-five j'ears, regularly received 
 such compensation, or subsidy. Only last year the British Govern- 
 ment made a new contract with the company in question by which the 
 Government lends the Cunard Company $13,000,000 to provide for 
 the construction of two large and swift steamships, and then provided 
 for mail pay and admiralty subventions aggregating $1,100,000 
 annually for twenty years. 
 
 It is worthy of mention that the British Government requires in the 
 new contract under discussion, that the two new steamships shall be 
 built "in the United Kingdom," which requirement reestablishes a 
 policy, abandoned for half a century, of what is known as "free 
 ships." It is tantamount to a declaration by the British Government 
 that hereafter it will require that steamships, to enjoy subsidies, must 
 be built is British shipyards. We instance this particular contract in 
 order to show that, instead of departing from the policy of mail sub- 
 sidy to steamships of regular lines other nations are increasing their 
 payments and extending their steam tonnage in regular lines as a 
 consequence. 
 
 From a national point of view, as we have already pointed out, 
 steamships are most useful for naval auxiliary purposes, such as 
 . ci-uisers, swift and powerful scouts, transport and supply, collier and 
 dispatch vessels. These, with their trained and experienced oiEcers 
 and seamen, constitute a strong resource of national defense, essential 
 
HEARINGS BEFOEE THE MEKCHANT MABINE COMMISSION. 145 
 
 to the full utility of the navy and invaluable to the nation. A nation 
 lacking in these essentials for defense is weak and vulnerable. Other 
 nations have built up their steamship lines through liberal payments 
 for the carriage of tne mails and payments designated as "Admiralty 
 subventions," Great Britain, in the case of the two steamships 
 already alluded to, having bound herself to pay, as "Admiralty 
 subvention," the sum of |750,000 annually to the owners of the two 
 steamships for a period of twenty years. This policy of mail pay, 
 subsidies, and admiralty subventions is in force in Great Britain, 
 Germany, France, Italy, Spain, Austria, Russia, The Netherlands, and 
 Japan. In short, where successful steamship lines are found, investi- 
 gation will prove that they are sustained only by liberal allowances 
 fi'om their governments for the carriage of the mails and their availa- 
 bility as naval auxiliaries. The same policy has been pursued inter- 
 mittently by the United States for nearlj^ sixty years, and to it we owe 
 the comparatively few steamships of regular lines that we now possess 
 in the foreign trade. 
 
 OUR OCEAN MAIL ACT. 
 
 The Ocean Mail Service act, which we recommend the modification 
 and amendment of, was passed in 1891, and has remained uninterrupt- 
 edly upon the statutes for thirteen j'ears. Since its adoption we have 
 no knowledge of any attempt having been made in Congress to secure 
 its repeal. It seems to be, and we believe it is, regarded as a policy 
 essential to the establishment and continuance at regular lines of Amer- 
 ican steamships. The trouble has been that the act has been insuffi- 
 cient in its provisions to cause the establishment of new lines, and 
 therefore we recommend its amendment. In respect of mail steam- 
 ship lines we do not recommend any new policy for their creation, 
 but merely such amendment to existing law, under existing policy, as 
 to accomplish what was sought when the law was enacted in 1891. 
 
 At the moment of its enactment its provisions as to compensation 
 for the carriage of the mails was cut down one-third from the amount 
 originally fixed in the bill as introduced. Its enactment has resulted 
 in the retention of the few steamship lines we then had engaged in the 
 foreign trade, lines that would have probably long ago gone out of 
 existence but for its enactment. Some interesting statistics are pre- 
 sented that have been effected or created by this act. Our steam ton- 
 nage under register in 1890, the year preceding the enactment of the 
 existing ocean mail service act, amounted to 197,630 tons, which in- 
 creased to 239,995 in 1891, the year of its enactment. It is as singular 
 as it is significant that the American steam tonnage under register — 
 that is to say, engaged in the foreign trade — was greater in 1866 than 
 it was in 1890. W hen we consider that there was an actual decline in 
 our steam tonnage under register during the twenty-four years ending 
 with 1890, and that during this long period the indifference of our 
 Government to its development was most marked, the growth of our 
 steam tonnage under register during the past thirteen j^ears is most 
 interesting and instructive. It is gratifying to be able to state, 
 therefore, that while our steam tonnage under register during the first 
 year of the operation of the ocean mail service act of 1891 was but 
 239,995 tons, in 1903 it had increased to 527,401 tons, an increase sub- 
 stantially of over 100 per cent, although the nuRiber of steamships 
 3a— 04 10 
 
146 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 under registei- has increased from 271 in 1891 to 357 in 1903, an increase 
 in number of barely 30 per cent. It would, however, be misleading to 
 ascribe the growth of our steam shipping under register during the past 
 thirteen years to the enactment of tne ocean mail service act alone. 
 
 KBDUGED RATES INSUFFICIENT. 
 
 Of itself it was insufficient, in its compensation provisions, to cause 
 the establishment of the only American line we now have in the trans- 
 Atlantic trade, but its existence led to special legislation that I'esulted 
 in the establishment of the line in question. On the other hand, the 
 extension of our coastwise laws to the Hawaiian Islands brought into 
 existence a new line of steamships that operate under register, and 
 during the past few years, in the expectation of the enactment of 
 national legislation helpful to American shipping in the foreign trade, 
 approximately 100,000 tons of the new steam tonnage under register 
 have been built that would not have been constructed but for that ex- 
 pectation. But one new American steamship line has resulted from 
 the enactment of the ocean mail-service act of 1891. This is undoubt- 
 edly due to the fact that the mail compensation provided was insufficient 
 to induce investment of American capital in unprofitable new lines of 
 American steamships. Too much emphasis can not be laid upon this 
 important fact: It is too often imagined that compensation for the car- 
 riage of ocean mails leads to vast profits for the shipowners. Those 
 responsible for the reduction in the amount of compensation fixed in 
 the act of 1891 doubtless believed that it would be quite sufficient to 
 cause the establishment of new American steamship lines wherever 
 they would be desirable. In this respect the act has been a complete 
 failure. It has proved that the compensation fixed, instead of being 
 attractive, is insufficient. Made sufficient, therefore, the original pur- 
 pose of its authors would be accomplished, and this is what we recom- 
 mend, because we believe that is what the people desire and what the 
 nation urgently requires. 
 
 BIDS COMPETITIVE. 
 
 While the ocean mail service act fixes a maximum rate of compensation 
 for the caiTiage of the mails, it does not necessarily follow that the 
 maximum amount will in all cases be paid to the steamships that con- 
 tract with the Government. The latter invites bids for the carriage 
 of ocean mails under the provisions of the ocean mail-service act, and 
 the maximum sum placed in the act merely places a limitation beyond 
 which the Government may not go in making a contract. If the sum 
 is insufficient there are no bids; if it is liberal, there will be probably 
 enough bids to protect the Government from the payment of unreason- 
 able rates. In any event the Postmaster-General may reject any or 
 all bids if he see fit, which is an additional safeguard against overcharge 
 by the steamship lines bidding for the contract. 
 
 In fixing the new rates in an amended ocean mail service act a due 
 regard must be given to the extra cost of building, officering, manning, 
 victualing, and running American as compared with foreign vessels; 
 also for the amounts of compensation fixed by other governments, and 
 the different forms of assistance extended by other governments to 
 steamships with which our own will be compelled to compete; and. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 147 
 
 finally, for the conditions existing in the United States in the matter 
 of return upon investment.. These several factors, properly considered, 
 it should not be difficult for the rates to be so fixed as to insure a great 
 increase in the number of new American steamship lines in the foreign 
 trade. 
 
 AS TO RETALIATION. 
 
 Of course, there will be dire warnings of retaliation on the part of 
 those whose interests are bound up with conditions as the}' at present 
 exist, and no nation has more such in respect to its shipping require- 
 ments than the United States. It is quite impossible, in the case of 
 a nation like ourselves, throughout the length and breadth of which 
 the ramifications of foreign steamship interests extend, cropping up 
 in the most remote and unexpected places, not to be constantly met 
 with the suggestion that the adoption of any policy that could b.e 
 recommended that would give to American vessels a more reasonable 
 and a fairer share of our foreign carrying than they now possess 
 would result in disaster. When a revision of our tarifl' is about to be 
 undertaken we know the wiles and the ways by which foreign interests 
 that are threatened with a loss of trade, or which seek a larger market 
 in the United States for their trade, attempt to influence by intimidation 
 and cajolery those who are charged with the duty of making the changes. 
 These influences will all be aroused and they will have full play for 
 their energies and their methods, but we must resolutely hold fast to 
 our determination to at last do that for the American ship which 
 nearly a half a centurv of neglect has necessarily made extremely dif- 
 ficult for us to do. We must expect embarrassments and inconveni- 
 ences in the beginning to arise from such changes in conditions, such 
 revolutions in channels of trade, as the readoption of the policy of 
 discriminations, even in the modified form here recommended, will be 
 sure to occasion. We must prepare ourselves to meet and overcome 
 them. If we do not, and if we permit existing .conditions to continue 
 uninterruptedly, we shall court dangers and invite disasters infinitely 
 more severe and hurtful than anj' that the course we now recommend 
 would occasion. 
 
 MUCH SUPPORT IN CONGRESS. 
 
 Most happily there have been outcroppings of expressions in Con- 
 gress of a nature and from a source to justify the belief that the policy 
 of discriminations in what may be called "the indirect trade," such as 
 we have suggested in this report, will meet with warm approval from 
 some of the most powerful leaders in American public life. Indeed, 
 many of them are openly committed to it by their official expressions 
 and actions. The press of the country, to the extent that it ha« 
 expressed itself upon the alternative policy of modified discrimina- 
 tions, has been friendlj' and encouraging. The most happy augury of 
 all is that which suggests the possible elimination from the considera- 
 tion of this policy all suggestion of partisanship. When Great Britain 
 in her Parliamentary bodies comes to vote upon the national maritime 
 policy, invariably the majority is overwhelming, the opposition scat- 
 tering and unimportant. In Germany the maritime policy commands 
 the support of the most powerful interests and persons in the Empire. 
 The growth and the strength of the shipping of these two great coun- 
 tries eloquently attest the value of its nonpartisan, wholly national, 
 
148 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 consideration. We shall become the factor upon the sea again that we 
 once were when we rise above partisanship in the consideration and 
 settlement of this great, long-neglected, national question, a question 
 that has its strongnold in its essential necessity as one of the great 
 instrumentalities of the national -defenses. 
 
 ' It is these considerations, and the trend of the times, the outcrop- 
 pings of expressions, the timeliness of it all, that justify the hope that 
 when Congress comes to act the majority will be so overwhelming and 
 partisan lines will be so utterly obliterated, as to serve notice upon all 
 mankind that the United States of America has at last chosen and prac- 
 tically unanimously adopted a maritime policy that, being effective and 
 permanent, will strengthen us where we are weak, that will provide 
 us with tiie one most-needed resource of national defense — a great 
 American merchant marine, oiScered and manned by Americans. 
 
 In conclusion, we invite your attention to the fact that at the session 
 of Congress which closed last month, an act was passed creating a 
 merchant-marine commission, composed of five Senators and five Rep- 
 resentatives in Congress, appointed to investigate the subject of Ameri- 
 can shipping. In view of the further fact that the members of that 
 Commission are to meet in this city on Monday, May 23-, for the pur- 
 pose of holding their first public meeting, we venture to suggest tlie 
 propriety of a copy of this report being presented to that Commission 
 by a committee representing the Maritime Association of the port of 
 New York. 
 
 We remain, very respectfully, yours, 
 
 A. A. Raven, Chairman. 
 Fields S. Pendleton, 
 Wallace Downey, 
 Henry E. Nesmith, 
 Ernest C. Bliss, 
 
 Committee. 
 
 Senator Lodge. Do I understand righth' that the proposition of the 
 committee is to apply discriminating duties on what may be called the 
 indirect voyage? 
 
 Mr. Smith. Yes, sir. 
 
 Senator Lodge. But not to undertake to apply it on the direct 
 voyage? 
 
 Mr. Sjiith. That is right. 
 
 Senator I^odge. As I understand it, the treaties cover both ? 
 
 Mr. Smith. Yes, sir; they do. 
 
 Senator Lodge. But your proposition is to abrogate the treaties 
 only in regard to the indirect voyage? 
 
 Mr. Smith. Yes, sir; the expectation being that in the direct trade, 
 should Congress deem it desirable, the ocean mail-service act may be 
 so amended as to create new lines. 
 
 Senator Lodge. I understand that. But of course in the direct 
 trade your plan would leave us where we are now? 
 
 Mr. Smith. Yes, sir. 
 
 Senator Lodge. While in the indirect trade it would give us the 
 advantage? 
 
 Mr. Smith. Yes, sir. 
 
 The Chairman. The presumption is that we shall abrogate the entire 
 treaty and enter into a new treaty with each nation affected. 
 
 Mr, Smith. That is the presumption. 
 
HEADINGS BEFOfiE fHE MERCHANT' MARIKE COMMISSION. 140 
 
 STATEMENT OF FIELDS S. PENDLETON, 
 
 The Chaikman. Mr. Pendleton, will you please state to the Com- 
 mission in what capacity you appear here ? 
 
 Mr. Pendleton. As president of the Atlantic Carriers' Association, 
 an organization of sailing vessel owners having 400,000 tons, the 
 vessels having been built entirely by American labor and of American 
 material. 
 
 The Chairman. Proceed with j^our statement. 
 
 Mr. Pendleton. Mr. Chairman and gentlemen, in advising the 
 adoption of the method of preferential duties for American shipping 
 we are asking for no new policy, but merely for the Government to 
 extend to this tottering industry partially what it has given every 
 other so liberally. 1 believe in the method of discriminating duties 
 and tonnage taxes because it creates a preference for American 
 bottoms in the mind of the importer and shipper, and thereby insures 
 continual employment for the vessel. It makes competition between 
 two merchants for the American vessel instead of two vessels in com- 
 petition for the same freight. It serves notice on the shippers of 
 other countries and our importers that they must grant the same pref- 
 erence to the products of American labor on the sea that is accorded 
 them on the land. And why should this not be so ? The marine of 
 the United States is a detached portion of the United States, and the 
 labor used in the construction of these floating islands on the sea 
 should have the right to demand the same protection as the labor on 
 the islands off your coast. If the tariff requires adjusting, and some 
 schedules are too high, increase the free list or lower the duties; fix 
 the duties on the basis of the American ship, charging the foreign 
 vessel a higher rate, so that American shipping will either be the cause 
 of increasing the revenue or American labor will build the tonnage. 
 
 PREFERENCE IN INDIRECT TRADE. 
 
 The shipping problem to-day is similar to a ship whose anchors are 
 bedded in the sand, with a crew unable to weigh them. Send us suf- 
 ficient help to put them to the hawse pipe and we will start under full 
 sail and bring you profitable returns. Our mines and forests are 
 waiting for the American workingmen to start with pick and axes to 
 build up the American merchant marine, but these artisans are standing 
 idle, for the want of a little aid. It is very obvious that preferential 
 duties and tonnage dues, by a regulation of commerce as provided in 
 the Constitution, will be particularly advantageous to American vessels 
 in the trade with the ^Vest Indies, Central and South America. For 
 example, an American vessel could on a single voj'age carry from any 
 or all of the different ports to the United States, regardless of the 
 nationality of the islands or ports, while competing foreign vessels 
 would be confined solely to the trade between their own territory and 
 the United States, while no one particular island or country would, 
 generally speaking, have enough to fill a vessel with a full cargo, the 
 foreign vessel would be restricted to the one port or the one country, 
 while the American vessel could proceed from one port or from one 
 country to another until she had secured a full cargo for the United 
 States. In short, it would mean the handing over of the trade with 
 
150 flEAftiNGS BEI^OJBE THE MERCHANT? MAttWl! COMMISSION. 
 
 South America, the West Indies, and Central America to 7\.merican 
 vessels — practically the extension of our coastwise laws to the Western 
 Hemisphere. 
 
 PROMOTING EXPORTS. 
 
 In this lies one of the strong arguments why discriminating duties 
 should be adopted. Preferential duties and tonnage dues will promote 
 the export business far better than any other method in the South 
 American trade. Take Brazil for example: We buy from her nearly 
 170,000,000 worth of goods and sell her less than $15,000,000 worth, 
 consequently, tonnage would be obliged to go to Brazil even in ballast 
 if necessary, in order to bring home her products and by being obliged 
 to go outward in ballast freight rates could be made so low that our 
 manufacturers and farmers would get such low freight rates as to 
 enable them to make delivered prices lower than the prices of their com- 
 petitors. 1 do not believe that American shipping can be built up by 
 subsidies. You can not build up the American merchant marine by 
 subsides unless you give enough aid so that freight rates will drop to a 
 figure that makes it unprofitable for the shipowners of foreign countries 
 and thereby stop the foreign shipbuilding. To barely equalize the 
 difference between the cost of construction and operation and add to 
 this the subsidies of foreign countries amounting to many millions 
 annualljr, leaves us in the position of having to compete with ship- 
 owners of long experience and established shipyards. These people 
 have a trade and desire to hold it. Do you suppose that you are going 
 to drive these old shipowners out of the business on the same basis of 
 profit that you expect to attract new American capital into ? Whoever 
 thinks this, time will prove to the contrary. It is one proposition to 
 have shipowners and hold them; it is an entirely different proposition 
 to create new ones. 
 
 AS TO RETALIATION. 
 
 Discriminating duties in the indirect trade should cause no retalia- 
 tion by Great Britain. I believe the clear-headed and far sighted 
 English ship owners will hail with joy the adoption of a policy by the 
 United States that will confine the trade of the British Islands, Canada, 
 South Africa, Australia, India, and other dependencies to the shipping 
 of Great Britain and the United States. Her shipping to-day carries 
 less than 70 per cent of the goods we sell her. And if we place her 
 in a position where she will get clear of the sharp competition of Ger- 
 man, Norwegian, Italian, and French subsidized ships, a competition 
 that every Englishman is crying for help from, they are gaining what 
 they deserve and losing that which they have no just right to expect. 
 So that what they lose in bringing goods from countries other than 
 their own to-day they make up in the carriage of the 30 per cent of 
 our exports now going to her colonies in foreign shipping, besides 
 eliminating the severe competition. 
 
 Representative MoDermott. What foreign nations are to-day 
 encouraging their merchant marine by a schedule of discriminating 
 duties ? 
 
 Mr. Pendleton. None that I know of. They are mostly doing it 
 by subsidies to the extent of between $28,000,000 and 130,000,000. 
 ^ Representative MoDermott. With the exception of the United 
 States what nation has done it? 
 
HEARIKOS BEFORE THE MERCHANt MaRiKE OoMMlSSIOK. 151 
 
 Mr. Pendleton. France started it. 
 
 Representative MoDekmott. ' In what year ? 
 
 Mr. Pendleton. In 1873 or 1874, as I recall it. 
 
 Senator Lodge. What was the result? 
 
 Mr. Pendleton. Previous to that time Great Britain had it until 
 1850. 
 
 Representative McDekmott. What others ? 
 
 Mr. Pendleton. All of them. I can not give the laws. 
 
 Representative McDekmott. I did not know but that you might 
 have some statistical information on the subject. 
 
 Mr. Pendleton. I have not the statistics here. 
 
 Senator Lodge. Of course their discriminating duties fell with the 
 treaties as ours did, at about the same period. What was the upshot 
 of the French attempt? 
 
 Mr. Pendleton. Later on, France 
 
 Senator Lodge. In 1872. 
 
 Mr. Pendleton. France saw there was going to be retaliation 
 because she put it in effect in the direct trade and she had to go back 
 on it. 
 
 Senator Lodge. Did we protest at that time? 
 
 Mr. Pendleton. I think we did. 
 
 The countries that will suffer are Norway, France, Italy, and Ger- 
 many; those that have few colonies. Norwegian vessels carry $65 
 worth of our exports to other countries for every |1 worth they carry 
 home. And they bring |285 worth of imports from other countries 
 for every $1 they bring from Norway. 
 
 AMERICAN BOYS AT SEA. 
 
 If 3'ou want to induce American boys to go to sea you must hold 
 out something for them to reach for. You must show them that they 
 will get promotion the same as in every other industry. You must 
 make it known that you intend to build up American shipping, instead 
 of burying the remnants that still survive. You must show them that 
 you will make it profitable for American investors so that it will create, 
 shipowners, and they in turn place orders with the shipbuilders; but 
 not till the craft is launched do you start your chain of promotion. 
 Then you take your sailor for mate and your mate for master. When 
 you can show American parents that their boys have something to look 
 forward to you will find these young men climbing in over the knight- 
 heads waiting for their turn to get aft by promotion. 
 
 Representative McDekmott. Have you in mind any figures by 
 which a comparison could be made between the wages paid in our 
 coastwise trade and the wages paid by foreign corporations in inter- 
 national commerce. 
 
 Mr. Pendleton. Yes, sir; if you will allow me to get through with 
 this matter, I wish to take up your statement of yesterday and clear 
 up that matter, if you please. 
 
 During the past fifteen years I have heard hundreds of captains 
 assert that they did not want their sons to go into a business that was 
 so unprofitable that after years of experience they could not make a 
 living, but that they themselves were obliged to continue because they 
 knew nothing else. And I do not know of a captain in my fleet — and 
 it is as large as any other on the coast — who to-day is bringing up his 
 son to go to sea. 
 
152 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 ADVERSE TO 
 
 Regarding the question put by Mr. McDermott yesterday, and in 
 reference to statements that the port governs the schedule, and that 
 foreign vessels pay the same rate of wages that are paid in the coast- 
 wise trade, I wish to say that I made a statement before the Committee 
 on Merchant Marine and Fisheries of the House of Representatives 
 about a steamer that was granted an American register. She was a 
 foreign-built ship, and was wrecked and got under the American flag. 
 The owner went down to New Orleans and got a contract to run her 
 in the foreign trade, and he ran her a short time in the foreign trade 
 under the American flag. He saw it was pretty expensive and he 
 turned around and put her under a foreign flag. 1 have this state- 
 ment from him, and I wish to say that he will be here this afternoon 
 if it is desired that he shall back up these figures, because I talked 
 with him this morning. 
 
 His wages under the American flag, running out of the same port, 
 to the same port, the same owner, the same ship, were $1,235 per 
 month, and when he put her under the foreign flag they were $680 per 
 month. 
 
 Now, gentlemen, that knocks out entirely the argument in favor of 
 free ships, because here was a man who had a foreign vessel which 
 had come under the American flag, and when he wanted to go into the 
 foreign trade he had to turn around and put her under a foreign flag. 
 
 Representative McDermott. What relation has that to the propo- 
 sition of free ships? 
 
 Mr. Pendleton. Because an American owner would not take a ship 
 if he could buj^ her on the other side and put her under the American 
 flag, when he can run her for from 50 to 60 per cent cheaper under the 
 foreign flag. Therefore a free-ship bill would do no good whatever. 
 
 You never knew a man who had any shipping who advocated a free- 
 ship bill. It is always a man who wants to get a dollar of his money 
 in competition with somebody whose property has cost him two. A 
 free-ship bill is out of the question, because if we had one to-day no 
 American shipowner would be crazy enough to put a vessel under 
 the American flag, because of the advantage of operating her under a 
 foreign flag. 
 
 Representative McDermott. If your subsidy is confined to the 
 question of the difference in wages — j'our pay roll — where would there 
 be any advantage to an American in flying a foreign flag if he bought 
 a ship on the Clyde ? 
 
 Mr. Pendleton. There would not be any advantage in the foreign 
 trade, none whatever, buying her on the other side. 
 
 Representative McDermott. Buying on the other side would afl'ect 
 the element of prime cost, and that only ? 
 
 Mr. Pendleton. Yes, sir. 
 
 Representative McDermott. The proposition of those who speak of 
 free ships in connection with subsidies is to eliminate that difference 
 in the first expense. There would be no temptation whatever to fly 
 a foreign flag if a subsidy was given that equalized wages ? 
 
 Mr. Pendleton. Do I understand the question to embrace the 
 proposition to buy ships abroad to fly the American flag, and then 
 that the Government shall give a subsidy to overcome the difference 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 153 
 
 in the cost of operation ? If so, that is all light for the sailor, of 
 whom 95 per cent were born in foreign countries, but for American 
 labor, of which nearly 100 per cent is born in this country, it is all 
 wrong. 
 
 THE CASE OF THE DAVID. 
 
 Now, gentlemen, there is one other subject on which I wished to 
 speak. I have here a statement as to the ship of which I have spoken — 
 the Donald Steamship Company owners of the steamship David, 
 e-%.- Santuit, e\- Atlas, built in 1873. This vessel sailing out of Gulf 
 ports under the American ilag worked twenty-three men under union 
 wages for $1,235 per month. The vessel was transferred by the same 
 owners to the Norwegian flag, and the owners inform me she is now 
 operated for |680 per month in the same trade as before. The scale 
 of wages under the two flags is as follows: 
 
 Norwegian. 
 
 Firemen 
 
 Sailors 
 
 Captain 
 
 Engineer 
 
 Chief officer 
 
 Cost of provisions per capita . 
 
 Per month, 
 $50.00 
 30.00 
 160. 00 
 135. 00 
 80.00 
 a 80. 60-60 
 
 Per vionth. 
 
 826.00 
 20.00 
 
 100. 00 
 80.00 
 45.00 
 a. 40 
 
 a Per day. 
 
 Senator Lodge. The comparison you first gave as between sailing 
 under the Norwegian and under the American flag applies to a vessel 
 going from the same port to the same port? 
 
 Mr. Pendleton. The same owners, in the same ship, going from 
 the same port to the same port. It is the case where a man shifted 
 around — first under one flag and then under another. 
 
 Senator Lodge. It demonstrates that the port does not control the 
 wages ? 
 
 Mr. Pendleton. Yes, sir. 
 
 Senator Lodge. But the flag does ? 
 
 Mr. Pendleton. Yes, sir. 
 
 Senator Mallort. That is, on such routes as the one named, where 
 the vessel goes out of an American port to a certain foreign port 
 regularly. In other words, the American union controls the wages 
 of American sailors and does not control the wages of Norwegian 
 sailors. 
 
 Mr. Pendleton. Yes, sir, that is true; but those ships are in com- 
 petition with our ships in the same trade. 
 
 Representati\'e Minok. 'Did you say it cost from 50 to 60 cents per 
 man per day for food on the American ship ? 
 
 Mr. Pendleton. I did not say that; but this is a statement handed 
 to me by Mr. Donald. 
 
 That is a question which comes up very often. With an American 
 vessel, when you get into port it is sirloin steak or fresh meat every 
 day, and fresh fruit whenever in the market; but under the other 
 scale the meat trust does not get at them. 
 
 Representative Minor. What is the value of the rations fixed by the 
 Government at this time? 
 
164 HEARINGS BEFORE TflE MERCHANT MARINE COMMISSION". 
 
 Mr. Pendleton. Of course, the cost with us varies considerably. 1 
 am now going through a list of my vessels with a view to arriving at 
 what the cost of provisions is. 1 have not succeeded so far, but it 
 will average at the present time, I should say, around 45 cents per day. 
 
 Representati\'e Minor. Do you know of any nation that has a better 
 food schedule than ours? 
 
 Mr. Pendleton. No, sir. 
 
 Representative Minor. It was stated yesterday that the Norwe- 
 gian was perhaps a little better. 
 
 Mr. Pendleton. I can not find any sailor who says that, except 
 some one who has an interest at stake. 
 
 CREWS UNDER TWO FLAGS. 
 
 Representative McDermott. The vessel you have referred to ship- 
 ped one crew under the foreign flag'^ 
 
 Mr. Pendleton. The Norwegian. 
 
 Representative McDermott. From what port ? 
 
 Mr. Pendleton. From New Orleans. 
 
 Representative McDermott. Why did they not go on a,nd ship the 
 same kind of sailors at the same wages under the otiier flag ? 
 
 Mr. Pendleton. Why did they not? 
 
 Representative McDermott. Yes. 
 
 Mr. Pendleton. I do not just understand your question. 
 
 Representative McDermott. They manned one ship 
 
 Mr. Pendleton. No; this is the same ship, a ship on which they 
 changed the flag. Congress granted this vessel an American register. 
 Under the American flag she went down to New Orleans and got a 
 contract to run to Central America. She performed that contract for 
 a short time under the American flag, and the owner saw that his 
 wages were pretty high, and he concluded, in order to save expenses, 
 that he would put her under a foreign flag. He did so, and where the 
 wages under the American flag were $1,235 a month, they were under 
 the Norwegian flag $680 per month. 
 
 Representative McDermott. Where did he ship his crew under the 
 Norwegian flag? 
 
 Mr. Pendleton. In the same port. 
 
 Representative McDermott. Iii New Orleans? 
 
 Mr. Pendleton. In New Orleans. 
 
 Representative McDermott. In both cases '. 
 
 Mr. Pendleton. Yes, sir. 
 
 Representative McDermott. In New Orleans, under any flag, unless 
 there is artificial interference, commendable or otherwise, you can 
 obtain Norwegian sailors to man your ship at the rate at which that 
 vessel did. 
 
 Mr. Pendleton. No, sir; they pi'otest against going in American 
 vessels unless they get the American scale of wages. 
 
 Representative McDermott. Do you mean where there is a differ- 
 ence of 100 per cent, as there apparently is from your figures? 
 
 A DIFFERENCE OF 81 PER CENT. 
 
 Mr. Pendleton. Eighty-one per cent. 
 
 Representative McDermott. Do you mean to say that Norwegian 
 sailors would rather take the wages which they can get on a foreign 
 ship than to go in an American snip ? 
 
HEARINGS BEFORE THE MERCHANT MARINE eoMMlSSlON, 155 
 
 Mr. Pendleton. I do not mean to say they prefer to do so, but I 
 mean to say it is a condition. When they sail on American vessels 
 they want American wages. 
 
 Representative MoDermott. Were not those men shipped from 
 Norway for that ship? 
 
 Mr. Pendleton. No, sir; it was done under the American flag. 
 
 Representative McDekmott. How did they get here? 
 
 Senator Lodge. They were picked up in port. 
 
 Representative McDeemott. Picked up in what port? 
 
 Senator Lodge. Picked up in the port whence they sailed. 
 
 Mr. Pendleton. Yes, sir; New Orleans. 
 
 Representative MoDermott. It has been stated a number of times 
 in Congress that that condition which you state exists, but if it doss 
 exist, it is in violation of all laws of supply and demand. 
 
 Mr. Pendleton. That is ver^^ true. 
 
 Representative MoDermott. You say that a Norwegian sailor in the 
 port of New Orleans would rather ship at lower wages on a foreign 
 ship 
 
 Mr. Pendleton. No; I did not say that. 
 
 Representative McDeemott. If he would not rather ship, why did 
 you not get him under the American flag? 
 
 Mr. Pendleton. There might be a case where he could not get a 
 job under the American flag. 
 
 Representative MoDermott. Then this does not illustrate anything 
 except his immediate and personal necessities. You stated that he 
 would rather, or did actually, ship under the Norwegian flag in pref- 
 erence to the American flag and did so at a reduction of wages. 
 
 Mr. Pendleton. I do not say he would rather do it, but 1 say this 
 is the condition. 
 
 Representative MoDermott. You say he would not ship under the 
 American flag unless he obtains this great increase of wages ? 
 
 Mr. Pendleton. 1 said he did ship at the lower wage in this case, 
 but what his motive was I do not know. But if you desire to have 
 the owner of that vessel come here and make the statement directly to 
 you, I will be pleased to have him appear. 
 
 Representative MoDermott. Yes; 1 should like to know how the 
 conditions arose. It must be an isolated case. 
 
 NOT ENOUGH AMERICAN SHIPS. 
 
 Senator Lodge. Is it not like this: There are not enough American 
 ships to take all the sailors offering for employment? 
 
 Mr. Pendleton. That is very true in a great many cases. 
 
 Senator Lodge. In the foreign trade ? 
 
 Mr. Pendleton. Yes, sir. 
 
 Senator Lodge. There are not enough ships to take the sailors who 
 offer? 
 
 Mr. Pendleton. Yes, sir; that is true. 
 
 Senator Lodge. Therefore they have to go on foreign ships? 
 
 Mr. Pendleton. Yes, sir. 
 
 Senator Lodge. And they will go on the foreign ship at the foreign 
 scale? 
 
 Mr. Pendleton. Yes, sir. 
 
 Senator Lodge. But the}' will not go on the American ship at the 
 foreign scale? 
 
156 HBABINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Mr. Pendleton. That is true — absolutely true. 
 
 Representative McDeemott. But they will go on the American 
 ship at any material advance over the foreign scale, while here you 
 have a difference of 81 per cent. 
 
 Mr. Pendleton. I never have been able to pick up five men who 
 were willing to work for less than five other men were getting on the 
 same ship. It does not make so much difference as to what a man is 
 getting, but it is what he is getting in comparison with what the man 
 next to him receives. 
 
 Representative McDermott. Is that because of any prohibition of 
 the union 
 
 Mr. Pendleton. Every man sees the articles, and when he goes on 
 the ship he is aware of what every other man is getting. You can not 
 keep that from him. 
 
 Representative McDeemott. Do you mean to sa}^ that here is an 
 American ship, flying the American flag, and there another ship, flying 
 the Norwegian flag; that there are 20 sailors in search of employment; 
 that the wages under the Norwegian flag are 80 per cent less than they 
 are under the American flag, and that the sailors prefer to go under 
 the Norwegian flag rather than under the American flag at even 5 per 
 cent advance in wages over the Norwegian scale ? 
 
 Mr. Pendleton. I mean to say that when you want an American 
 crew you pay the wages of other American vessels, and when you want 
 a Norwegian crew you get them for the same rate of wages that Nor 
 wegians pay. 
 
 Representative McDeemott. Then why do you not ship a Norwegian 
 crew on an American vessel? 
 
 Mr. Pendleton. Because the Norwegian crew wants the same price 
 that the other crews are getting when the}^ are right alongside of that 
 other vessel. 
 
 Representative Minor. It is true, I suppose, in the coastwise trade 
 as well as on the Great Lakes, where the wages paid to seamen are 
 the highest in the world 
 
 Mr. Pendleton. On the Great Lakes. 
 
 Representative Minor. That everj"- Norwegian and every German 
 knows that if he is an American citizen, shipping under the American 
 flag, he is entitled by right to higher wages than he would be under a 
 foreign flag. 
 
 Mr. Pendleton. Yes, sir. That is what he comes here for. 
 
 AS good as anybody. 
 
 Representative Minor. That Norwegian or that German says, "I 
 am just as good as any other fellow when I go aboard ship. I do able 
 seaman's work. I am entitled to the same consideration that they pay 
 in the coastwise trade and on the Great Lakes." Has that not some- 
 thing to do with it? 
 
 Mr. Peni.'LEton. Precisely. 
 
 Representative Minor. And he will not do it for less, oven though 
 looking for a job. They want to be paid the Amei-ican scale when 
 they sail under the American flag? 
 
 Mr. Pendleton. Yes, sir. 
 
 Senator Mallory. You have cited a very extraordinary case in New 
 Orleans. I suppose that -N'essel is in the fruit trade with Honduras 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 157 
 
 and that coast, in a regular line running back and forth. Can you 
 supply any similar instance in the port of New York ? You have had 
 a great deal of experience. 
 
 Mr. Pendleton. I never have owned a foreign vessel or an}' inter- 
 est in a foreign vessel. My interests are in a hundred different vessels, 
 and they have always been built under the American flag. 
 
 Senator Malloey. 1 suppose you are interested in the wages you 
 are paying your crews 
 
 Mr. Pendleton. Yes, sir. 
 
 Senator Malloky. And you are interested in paying them no more 
 than you are required to pay. Do you know of any such instance in 
 the port of New York, or any other port along this part of the coast — 
 Philadelphia, Baltimore, Norfolk, or Newport News — where an Ameri- 
 can vessel had to pay 80 per cent more for wages than a foreign vessel 
 for the same crew for the same voyage ? 
 
 Mr. Pendleton. It is a pretty hard thing to get a similar sized 
 vessel, shipping at the same port, to make the same voyage and to get 
 equal conditions all around, but here is a case where it was the same 
 vessel, and they could not saj' the question of rig had anything to do 
 with it. 
 
 Senator Malloey. This is a verj^ remarkable case, and it may be 
 that it is the rule, but we should like — at least I would — to have some- 
 thing in addition to that single instance before we commit ourselves to 
 the theory that anj^ such difference exists. 
 
 Mr. Pendleton. Of course, one of the best ways to get at that is to 
 get a man who owns British shipping on the one hand, or Norwegian 
 shipping, or runs such ships, and American ships on the other, and 
 he can decide which is the cheaper, and he is the man to present that 
 kind of an argument. He can illustrate it. 
 
 The United Fruit Company, of Boston, have vessels under both 
 flags, and they can give you that information better than any other 
 people. I merely want to give such information as I believe to be 
 reliable and such as I can substantiate. Other shipping people who 
 own British shipping or Norwegian shipping and also American ship- 
 ping are in a position to tell what the difference is. I know there is a 
 difference. Here in New York I have always considered the differ- 
 ence in sailors' wages about f 5 per month on vessels going to sea. 
 
 WAGES AT NEW YOEK. 
 
 Lately I was on board a three-masted schooner, an English vessel. 
 The captain was paying $20 for the men. We pay $30 for the same 
 voyage. 
 
 Senator Malloey. Where were the men shipped ? 
 
 Mr. Pendleton. Yarmouth, Nova Scotia. He paid his mate $28. 
 We pay |40 to f45. He paid his steward $28, and we pay about $40. 
 So the wages are anywhere from 30 to 35 per cent cheaper, and the 
 food schedules are about the same per cent less. 
 
 I wish to say a word on the question as to the number of square- 
 rigged vessels and these smaller vessels. I will state that in 1870 we 
 haa 2,295 square-rigged vessels, and in 1903 we had 360. Now, there 
 is a decrease of 1,945 square-rigged vessels during the last 33 years. 
 In 1890 we had 2,160 vessels of over 100 tons register, and at present 
 we have less than 1,200. There is a decrease of 2,900 vessels. 
 
158 HEARINGS BEFOBE THE MERCHANT MARINE COMMISSION. 
 
 There are from 11,000 to 12,000 captains, officers, mates, and second 
 mates who have been driven out of the service, arid unless you give 
 proper consideration to the meduim-sized, medium-class vessels, in 
 which the young man has to get his start — and we must have those 
 vessels if we are going to have American sailors — you can not properly 
 move forward in the sailor direction. 
 
 At 1 o'clock p. m. the Commission took a recess until 2. 30 o'clock p. m. 
 
 AFTER RECESS. 
 
 At the expiration of the recess the Commission resumed its session. 
 The Chairman. Is Mr. Downs, representing the Brotherhood of 
 Boiler. Makers, in the room ? 
 
 STATEMENT OF JAMES DOWNS. 
 
 James Downs appeared before the Commission. 
 
 The Chairman. Mr. Downs, you are familiar with the purpose of 
 the work of this Commission? 
 
 Mr. Downs. Yes, sir; practically so. 
 
 The Chairman. You represent the Brotherhood of Boiler Makers 
 and Iron-Ship Builders, 1 believe? 
 
 Mr. Downs. Yes, sir. 
 
 The Chairman. We will be glad to hear from you. 
 
 Mr. Downs. I should like permission to look over my brief for an 
 hour or so. 
 
 The Chairman. We will excuse you, then. 
 
 STATEMENT OF R. A. C. SMITH. 
 
 Mr. Smith. Mr. Chairman, I do not desire to take up the time of 
 this Commission. Therefore I will say at the start that I indorse every- 
 thing my brother said in the earlier session to-day. 
 
 1 believe Mr. Clyde made some reference to the financial end of the 
 steamship proposition, and in my capacity, about seven years ago 
 
 The Chairman. State to the Commission in what business you are 
 engaged. 
 
 Mr. Smith. I am president of the American Mail Steamship 
 Company. 
 
 About seven years ago a proposition was brought to me for a line of 
 steamers to run to Jamaica, West Indies, and after considering the 
 proposition I undertook to carry out the plan. Under that plan we 
 built four steamers of an average speed of 15 knots. We obtained a 
 contract from the United States Government, under the Post-Office 
 Department, under the act of 1891. We have operated those steamers 
 for five years. 
 
 It was my purpose, when I started in the business, to continue and 
 not to end at Jamaica, but go to the Spanish Main, and so on, to ports 
 in South America and elsewhere, wherever the flag could be carried 
 profitably and successfully. I have signally failed in that respect, 
 from the simple fact that the parties with whom I negotiated the charter 
 of the steamers, which takes the nature of cargo engagements, have 
 found it impossible to continue under the service profitably, and ha-ve 
 entered into contracts for the building of foTeign ships, 
 
HEARINGS BEFOBE THE MERCHANT MARINE COMMISSION. 159 
 
 GONE TO FOREIGN FLAGS. 
 
 1 have in mind two ships that are now under the German flag. They 
 are either here or about due, and are of the same class as the ships we 
 built, but of slower speed and much less cost of operation. 1 can not 
 divulge the figures of the other gentlemen, because they are confiden- 
 tial. But 1 believe this Commission will have an opportunity of get- 
 ting at them at its Boston hearing. The figures show that taking those 
 steamers of the same class under the foreign flag, as compared with 
 our ships, which are generally known as the "Admiral" ships, built by 
 the Cramps six years ago, the cost to operate our vessel for one round 
 voyage from here to Central Ameriqp, and Costa Rica is 50 per cent 
 greater for the same service than for the almost similar class of ships — 
 1 mean as to size and tonnage. That is the best illustration 1 can place 
 before the Commission as to the unsuccessful attempt, let me say, on 
 my part, to continue rebuilding the merchant marine. 
 
 Senator Malloet. Let me ask you a question right here. With 
 what vessels do you compare your vessels? 
 
 Mr. Smith. Vessels of the same tonnage, sir. 
 
 Senator Malloet. Of the same class, also ? 
 
 Mr. Smith. Yes, sir. 
 
 Senator Malloet. I mtan in the classification of Llo3'd.s' Register? 
 
 Mr. Smith. Practically the same. 
 
 Senator Malloet. Passenger steamers ? 
 
 Mr. Smith. Not tramps. 
 
 Senator Malloet. Fitted up for passenger service? 
 
 Mr. Smith. Fitted up for passenger and freight service. That is 
 the reason why I make the comparison. I could not do it but for the 
 fact that about five foreign vessels are being built almost equaling our 
 type of steamers. They may be a little larger in cargo capacity, but 
 not very much larger. 
 
 Senator Malloet. To run on the same route ? 
 
 Mr. Smith. Practically on the same route. That is the best illus- 
 tration I can place before the Commission. 
 
 It had been my hope and purpose, if I had had the time, to place 
 before you a very comprehensive statement showing the exact differ- 
 ences. I purpose doing so before the Commission gets through with 
 its labors, because I feel that you do not want to waste time in a lot of 
 unnecessary talk. You want facts, and the best facts I can place 
 before you are the simple facts I have stated — that I have signally 
 failed, not that 1 have failed in my enterprise from a financial stand- 
 point, because I hope to get through with an even balance sheet, but 
 there will be nothing much to the credit account. I had hoped to con- 
 tinue and extend the hues, as I promised the Administration at the 
 time. Mr. Gary was Postmaster-General, and with him 1 negotiated 
 the contract. 1 do not know what else I can say to emphasize that fact. 
 
 auxiliart ceuisers. 
 
 The ships were built under strict navy rules. The Navy Depart- 
 ment passed on the plans, even locating the decks for the guns. The 
 decks were especially strengthened to carry the guns. 
 
 There is another point that may be emphasized also; that had I 
 ordered those ships six, monttis e9.rl|er they would perhaps have served 
 
160 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 this Government as auxiliary cruisers, being fast boats, having a speed 
 of 15 knots, equally as well as, if not better than, some of the other 
 fast scouts. They are of steel, with steel houses, in every respect most 
 modern, with twin screws, which the Navy Department insisted upon 
 my immersing 2 feet lower than I wanted to. 
 
 I am for some kind of a measure to wipe out, if possible, those for- 
 eign flags from near our own coasts. They come over here; they take 
 our merchandise and go home and repair themselves and come over 
 here again to engage in a business where we are unable to compete 
 with them. 
 
 Senator Malloey. Have you any competing foreign vessels in your 
 trade with Cuba? 
 
 Mr. Smith. Absolutely. Thi§ is not Cuba. This is Jamaica and 
 the West Indies. 
 
 Senator Malloet. I am speaking of Cuba. 
 
 Mr. Smith. 1 have no trade with Cuba. 
 
 Senator Malloey. Do not your vessels stop in Cuba ? 
 
 Mr. Smith. No, sir. 
 
 The (]haieman. The Commission will be glad to insert in the repoi't 
 of its proceedings the paper you have promised. 
 
 Mr. Smith. I will be pleased to make it as full and complete as it 
 can be, with absolute comparisons, to which I shall be glad to attach 
 my signature. 
 
 Senator Malloey. Do any foreign lines run to Jamaica? 
 
 Mr. Smith. Yes, sir; Norwegian, English, and German. 
 
 Senator Malloey. On regular lines? 
 
 Mr. Smith. Thej^ are practically doing regular service. 
 
 Senator Malloey. And to Mexico also? 
 
 Mr. Smith. \Ye do not reach Mexico. We have extended our serv 
 ice to Costa Rica and Bocas del Toro, Panama, simply because of the 
 fact that Jamaica passed through a serious calamity, a cyclone, a year 
 ago; and we are giving the United States Government the benefit of 
 all that service to Panama and to Costa Rica free of charge, simply to 
 permit us not to run our steamers continuously backward and forward 
 to Jamaica. 
 
 a beitish subsidized eival. 
 
 Senator Malloey. Do you know anything about the workings of 
 the British West ^ndia line which goes down to the islands, and 1 
 think touches at Jamaica, and goes to Mexico and up to New Orleans? 
 
 Mr. Smith. I do not know. The British Government has entered 
 into a contract with the Elder Dempster Company on a direct subsidy 
 agreement, a copy of which is in the report of the Commissioner of 
 Navigation for 1901. 
 
 Senator Malloey. A direct subsidy ? 
 
 Mr. Smith. Yes, sir. 
 
 Senatory Malloey. Is that business developing commercial inter- 
 course with Great Britain? Can you say anything on that subject? 
 
 Mr. Smith. I believe it has to some extent, but I can not give you 
 very much detail. The Jamaica trade having suffered by reason of 
 the cyclone, the ships, of course, must depend to a large extent upon 
 the subsidy. But that is one of those unfortunate circumstances that 
 comes only once in a lifetime. We have direct competition. 
 
HEjS RINGS BEFORE THE MERCHANT MARINE COMMISSION 161 
 The following letters were subsequently received from Mr. Smith : 
 
 100 Broadway, New York, July ->, 1901^. 
 WiNTHROP L. Marvin, Esq., 
 
 Secretary Merchant Ma/rvne Commission, 
 
 Washington, D. C. 
 Dear Sir: In compliance with the promise made to the Commission 
 during its recent sitting in New York, 1 have endeavored to get data 
 in reference to the cost of operating foreign ships and to give you a 
 comparison of the same with ships of similar size under the American 
 flag. But at the moment I am unable to give you such data as 1 con- 
 templated giving you, although I expect to have it in hand before the 
 Commission makes its report. At present I am able to give you a 
 comparison between a steamer under the Norwegian flag, doing busi- 
 ness between the United States, Central America, and the West Indies, 
 and an American steamer in the same trade, their tonnage being 
 almost the same, to wit, 2,100 tons gross, the speed of the Norwegian 
 steamer being 12 knots and the American steamer 15 knots. 
 
 Wages paid. 
 
 Deck department: 
 
 Captain 
 
 First officer 
 
 Second officer 
 
 8 sailors (average, $26.85) . 
 10 sailors (average, 828) . . . 
 
 1 boy 
 
 Icadet 
 
 Norwegian. 
 
 $100. 00 
 40.00 
 30.00 
 21,'j. 00 
 
 Total 
 
 Less cadet. 
 
 Total. 
 
 Engine department: 
 
 Chief engineer 
 
 First assistant 
 
 Second assistant 
 
 Third assistant 
 
 6 firemen (each $35) 
 
 9 firemen (each $40) 
 
 3 trimmers (each $27.50) . 
 3 trimmers (each $35) 
 
 75.00 
 50.00 
 40.00 
 
 210. 00 
 
 $165. 00 
 70.00 
 40.00 
 
 280. 00 
 
 15.00 
 
 til.i. 00 
 
 585.00 
 315.00 
 
 135.00 
 90.00 
 70.00 
 60.00 
 
 360. 00 
 
 105. 00 
 270. 00 
 
 Cadet 
 
 al5 00 
 
 
 
 
 Total 
 
 1,105 00 
 
 
 b 135. 00 
 
 
 
 
 Total. , . , 
 
 970. 00 
 
 Less cadet 
 
 
 15 00 
 
 
 
 
 Total 
 
 457.60 
 
 955. 00 
 
 
 
 Steward's department: 
 
 Steward 
 
 
 
 2 waiters 
 
 
 
 
 
 
 1 pantry man 
 
 
 
 
 
 
 
 
 
 168.00 
 
 220.00 
 
 
 
 «The cadets are carried under the act of 1891. 
 
 ("The reduction of 3 oilers is made to compensate for the difference in the two steamers, the Ameri- 
 can being twin screw and the Norwegian single screw. 
 
 3a— 04- 
 
 -11 
 
162 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 I have eliminated from the pay roll of the American steamer the 
 extra cooks, waiters, stewards, and purser carried by reason of the 
 vessel being a passenger steamer, as 1 wished to make a fair compar- 
 ison of the two steamers as cargo carriers. 
 
 RECAPITULATION OP WAGES. 
 
 Norwegian. American 
 
 Per month: 
 
 Deck department 
 
 Engine department. . . 
 steward's department 
 
 Total per month 
 
 Total per year 
 
 S385. 00 
 457.00 
 168. 00 
 
 1,010.00 
 12, 120. 00 
 
 $570.00 
 965.00 
 220.00 
 
 1,745.00 
 20,940.00 
 
 The deck stores, engine stores, deck repairs, and engine repairs on 
 the Norwegian steamer are given to me in lump as averaging per 
 month $375. The same character of expenses on the American steamer, 
 exclusive of the annual overhauling, averages per month $l,3i5.65, 
 or, by the year, Norwegian, $4,500; American, $16,147.80. The cost 
 of the Norwegian steamer is given as $140,000. The cost of the Amei-i- 
 can steamer, $275,000. Deducting from the American steamer, as the 
 cost of the passenger accommodations, $40,000, the comparison would 
 show (cost): Norwegian, $140,000; American, $235,000. 
 
 My understanding is that it is customary for the foreign owners to 
 send their vessels to their home port for their overhauling, and I can 
 not, therefore, give you a comparison of that cost as against the Ameri- 
 can steamer; but in order that you may have a fair idea of the repairs, 
 upkeep, and annual overhauling on our fleet of four steamers, I will 
 say that for the five years ending December 31, 1903, we spent the 
 sum of $397,144.87, the whole of this being spent in the United States, 
 and, therefore, going to American workmen. 
 
 Please accept this information as the best that I can do at the moment; 
 and with the as.sui'ance that 1 will add to it as fast as I am able to make 
 a comprehensive and fair comparison, I remain, 
 Very respectfully yours, 
 
 R. A. C. Smith. 
 
 P. S. — I might add that the wages given above as paid to the sailors 
 and firemen on the Norwegian steamer are those paid to the men 
 shipped in the United States; when shipped at the home port for a 
 number of voyages or for a given period of a year or two, the wages 
 then are from 40 to 60 per cent less than the figures given by me. 
 
 New York, Jtdy 11, 190^. 
 WiNTHROP L. Marvin, Esq., 
 
 Secretary MercJmnt Marine Commission, Washington, D. C. 
 Dear Sir: Confirming my letter of the 5th instant, I now beg to 
 submit to you a comparison of cost and expenses between a German 
 steamer of 1,500 tons and a steamer of 2,100 tons flying the United 
 States flag. 
 
HEABINGS BEFORE THE MEECHANT MARINE COMMISSION. 163 
 
 Wages paid. 
 
 Deck department: 
 
 Captain 
 
 First ofHcer 
 
 Second officer 
 
 Carpenter 
 
 Boatswain 
 
 6 sailors (average 825) . , 
 10 sailors (average S28) . 
 
 Iboy 
 
 1 cadet 
 
 Less cadet. 
 Total.... 
 
 Engine department: 
 
 Chief engineer 
 
 First assistant 
 
 Second engineer 
 
 Second assistant 
 
 Third engineer 
 
 Third assistant 
 
 3 oilers ($20 each) 
 
 6 oilers (S4B each) 
 
 3 trimmers (830 each) . 
 3 trimmers (S35 each) . 
 
 7 firemen (835 each) . . 
 9 firemen (840 each) . . 
 Cadet 
 
 Less cadet. 
 
 Ia-ss Z oilers. 
 Total 
 
 Steward's department: 
 
 Chief steward 
 
 Steward. 
 
 Second steward 
 
 2 waitdts 
 
 2 mess boys (S^*^ each) . 
 
 1 mess boy 
 
 Chief cook 
 
 1 pantryman 
 
 Second cook 
 
 2 cooks 
 
 Total. 
 
 German. American. 
 
 8100. 00 
 60.00 
 36.00 
 30.00 
 30.00 
 160. 00 
 
 ;»5.00 
 
 90.00 
 
 "lib'.bo 
 
 40.00 
 
 eo.bb' 
 
 90.00 
 245." 66' 
 
 16.00 
 
 "io.'oo 
 
 8166. 00 
 70.00 
 40.00 
 
 280. 00 
 15.00 
 15.00 
 
 685.00 
 n 15. 00 
 
 135. 00 
 90.00 
 
 70.00 
 
 "66.66 
 
 270.00 
 
 'i65."66 
 
 360. 00 
 15.00 
 
 1, 105. 00 
 a 15. 00 
 
 1, 090. 00 
 135. 00 
 
 f'955.00 
 
 "Postal act. 
 
 h The reduction of 3 oilers is made on account of the American steamer being a twin screw and the 
 German single screw. 
 
 The extra cooks, waiters, stewards, and purser on the American 
 steamer, carried by reason of the vessel being a passenger steamer, 
 have been eliminated, so as to make a fair comparison of the two ves- 
 sels as cargo carriers. 
 
164 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 RECAPITULATION or WAGES. 
 
 
 German. 
 
 American. 
 
 Per month: 
 
 Deck department 
 
 ^95.00 
 686.00 
 141.00 
 
 $570.00 
 
 Engine department , 
 
 955.00 
 
 Steward's department ; 
 
 220. 00 
 
 
 
 
 1,121.00 
 13,4.52.00 
 
 
 
 1,74.5.00 
 
 Total per year 
 
 20, 940. 00 
 
 
 
 Deck stores, engine stores, deck repairs, and engine repairs; average per 
 
 490. 00 
 
 1,34.5.00 
 
 
 
 Total per annum 
 
 5,880.00 
 
 al6,147.80 
 
 
 
 
 107,000.00 
 
 275,000.00 
 
 
 40, 000. 00 
 
 
 
 
 
 107,000.00 
 
 235, 000. 00 
 
 
 
 "Exclusive of annual overhauling 
 
 Speed: German, 13.2 knots; American, 15 knots. 
 Verjr truly, yours, 
 
 R. A. C. Smith. 
 
 STATEMENT OF JAMES J. HILL. 
 
 The Chaieman. If Mr. James J. Hill, of the Great Northern Rail- 
 way, is present we shall be glad to hear from him. 
 
 James J. Hill appeared before the Commission. 
 
 The Chairman. Mr. Hill, I will ask whether you have familiarized 
 yourself with the statute under which this Commission is sitting ? 
 
 Mr. Hill. I think I know that the object is to get information on 
 the question how to increase our seagoing merchant marine. 
 
 The Chairman. Preciselj' that. We are very well acquainted with 
 the existing condition, and we want information as to remedial meas- 
 ures. We shall be pleased to hear from you in your own way. 
 
 Mr. Hill, Mr. Chairman, the first thing necessary, I think, is to 
 create a desire on the part of the people of this country to own ships. 
 It is a purely commercial question and must be governed by commer- 
 cial principles. If there is a profit in the business people will engage 
 in it. If there is a loss in it, it is a question how far and how long 
 individual enterprise will engage in it. 
 
 I have been in the transportation business all my life, and I think it 
 goes without saying that every intelligent man, whether in the trans- 
 portation business or any other business, when he finds that it has 
 ceased to be profitable, will go out of it. 
 
 Our conditions as a nation on the high seas seem very difficult to 
 meet. On land, notwithstanding high rates of wages, compared with 
 the rates of other countries, the United States has been able in twenty 
 or twenty-five years to work out a system of transportation that has 
 no competitor in the world. Rates of land transportation are so much 
 lower that there is no comparison pi'acticable. 
 
 A MARKET, NOT A BONUS. 
 
 Why we are not able to do that on the sea is not clear to me, and so 
 far as I have investigated it, I think no amount of direct bonus will 
 build it into any life that is worth living. 
 
HEARINGS BEFOBE THE MERCHANT MARINE COMMISSION. 165 
 
 ^\'hat the country wants, 1 think, is a market for what it produces. 
 We have the cheapest and best ores and coal and the best natural con- 
 ditions to enable us to manufacture a great many articles, but for some 
 reason, outside of our agricultural products, outside of our cotton, 
 outside of our grains, outside of our pro\'isioiis, outside of tobacco, 
 and joa may say oil, there are very few things which we can export, 
 because the cost of production is so high that we can not sell them 
 anywhere abroad. 
 
 Now, we would have a great deal of freight to carry in American 
 bottoms if we carried our agricultural products to market. On the 
 Atlantic, the competition is very close. They build ships in England 
 for much less than we do in America, and they man their ships for 
 less; and while we are able to build a railway for less than they build 
 theirs and to operate it more economically, that does not hold good as 
 to ships. Take Qreat Britain. I think the average rate is about 
 12.30 for hauling a ton of freight 100 miles. On the continent it is 
 11.90 to f2.10, except in Russia, where it is about 11.75. In the 
 United States it is 72 cents. 
 
 Why we are not able to do that on the high seas is partially 
 accounted for by the fact that other countries are more interested in 
 their ships. Their citizens have owned ships for the last forty years 
 to a much greater extent than the citizens of this country have, and 
 they are able to force our ships out of the trade. 
 
 A PERSONAL EXPERIENCE. 
 
 Shipbuilders can throw much more light on the cost of building 
 ships in America than I can. 1 had an experience in the building of 
 two very large ships, and I am quite sure 1 do not want any more. 
 
 The Chairman. Is that a recent experience '( 
 
 Mr. Hill. The ships are just about finished. They are the two 
 largest freight-carrying ships in the world. We expected to finish 
 them in two years, and it has taken nearly four, strikes and other diffi- 
 culties following each other. I would rather undertake to build a 
 thousand miles of railway than to build two ships. It would be much 
 easier. 
 
 What you are to do is a very difficult question. Commercial laws 
 as a rule are as regular in their operations as natural laws — as the 
 law of gravitation, if you please. You can violate a commercial law, 
 but j'ou do it at your own expense. Whether in the end the doctrine 
 of the survival of the fittest will not apply is to my mind an unsettled 
 question. It is an unknown quantity. I am inclined to think that 
 when we stop pumping the water will stop rising, and if we have to 
 buy a merchant marine and pay for it out of the general Treasury of 
 the country it will not last long. 
 
 We must have other conditions. We must have confidence that an 
 investment in ships is going to be a profitable investment. In Japan 
 they have built up a very large merchant marine. They have favored 
 the tonnage carried by their ships. The details 1 do not remember 
 closely enough, but that is the plan they have followed. 
 
 The Chairman. Do they not nave a subsidy? 
 
 Mr. Hill. It is not a direct subsidy, but the merchant who ships in 
 a Japanese bottom is favored; and I know something of the business, 
 because the first Japanese line coming to the United States was in con- 
 nection with our company, and they have built up quite a nice business. 
 
166 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 THK HGHT ON THF. PACIFIC. 
 
 Ouv business on the Pacific is a very hard business. We have to 
 compete with all the commercial nations, and they are fighting verj^ 
 hard for the oriental trade. They are supported in it by their respec- 
 tive governments; and 1 think I may speak plainly enough to say that, 
 without intending to place obstructions — because I do not think any- 
 one would knowingly place obstructions in our international trade — 
 we have placed obstructions almost to the point of destroying it. 
 
 We have been carrying American agricultural products and manu- 
 factured articles to the East in A'ery large quantities, but it will not 
 continue under the existing conditions. In fact, we have practically 
 withdrawn our tariffs now, because we can not successfully comply 
 with the regulations that are imposed upon us and at the same time 
 compete with the ships of other nations which have no such regula- 
 tions to comply with. I may say we have gone out of the business — 
 forced out. 
 
 I do not think you will make any great success of buying a mer- 
 chant marine. It will not sta}^ with you unless the conditions are such 
 that the men who put their money in it can look, with reasonable 
 expectation of success, to deriving profit from their enterprise, and 
 to-day there are very few people who want to engage in shipping. 
 There is a line of American-built ships, owned in New England, con- 
 necting at some of our western terminals on Puget Sound. 
 
 They are doing very well because all the other ships are out. The 
 Eussian-Japan war has taken the Japanese ships out of the trade, and 
 the American ships have it to themselves for a short time and are 
 doing pretty well. They are Aery good ships and are commanded bj' 
 excellent, good people, men of experience in the shipping business for 
 years. But it was a struggle with them for some time; and later, as 
 these other ships return to the service, how far the American ships 
 will be able to carry on the business is an open question. 
 
 As I said, the competition on the Atlantic is close. We ought to be 
 able to succeed on the Pacific, but whether we will or not is a question. 
 I should be very glad if our ships held their own. We put them on 
 simply because it was an incident to our other business and for the 
 purpose of trying to find a new market — a market we have not now — 
 for the surplus raised on the line of our railway, and so that we can 
 load our cars in both directions. It is really an incident to our rail- 
 road enterprise, and we did not go into it with a view of entering the 
 shipping business. If anybody would take the ships off our hands 
 and agree to run them for a term of years, we would make very 
 liberal terms with him. 
 
 A DESIRE TO OWN SHIPS. 
 
 From the first, having looked into the matter with a good deal of 
 care, I have become more and more convinced that no direct subsidy 
 will result in building up a merchant marine of any consequence. 
 Anything that the Government could afford to do would soon be lost 
 among a comparatively small number of ships. They would get this 
 bonus, and we, as owners of large ships, would get our share; but if we 
 can not live without it, as a commercial transaction, we will make a 
 very poor race with it, because if we have to depend on that it is a 
 broken reed. 
 
HEAElNGS BEE'ORE THE MERCHANT MARINE COMMISSION. 167 
 
 1 know that these views will not agree with those of a great manj', 
 but 1 can only say that after examining- the matter, as far as I can, 
 they are the conclusions at which I have arrived. I think there must 
 he a desire on the part of the people of this country to own ships, 
 and in order to own ships they must be able to sail them under just as 
 favorable conditions as other people. Nobody has the right of way on 
 the high seas. 
 
 Senator Lodge. Are not subsidies one of the conditions under which 
 the people of other countries — England, for instance — sail ships '. 
 
 Mr. Hill. They have some mail subsidies. 
 
 Senator Lodge. England spends five or six millions a year in sub- 
 sidies. 
 
 Mr. Hill. Mail subsidies. 
 
 Senator Lodge. Yes; and some others. 
 
 Mr. Hill. Not for the tramp ships. 
 
 Senator Lodge. England's subsidies are chieily mail subsidies. 
 France has both. 
 
 WHAT LACK OF SHIPPING COSTS. 
 
 Mr. Hill. Yes. Suppose we had ships running to Manila. Last 
 year — I knew of it at the time and I called the attention of some of 
 the parties interested to the fact — the city of Manila wanted a lot of 
 steel rails for their street cars. Germany furnished them. American 
 ships could not go to Germany and carry those steel rails unless they 
 would carry the rails for less than the German ships. 
 
 Senator Lodge. Germany gives a great deal of Government encour- 
 agement to her ships. 
 
 Mr. Hill. They give a gfeat deal of encouragement to all their 
 commercial enterprises in every way. 
 
 Mr. George J. Seabury. May I ask you a question? 
 
 Mr. Hill. Certainly. 
 
 Mr. Seabury. A\''as the Sibsriir constructed in anticipation of a sub- 
 sidy bill? 
 
 Mr. Hill. I do not know, sir. I have not 
 
 Mr. Seabury. I am very sure it was. 
 
 Mr. Hill. 1 have no interest in the Siberia and do not know. I can 
 speak for our own ships. 
 
 should equalize conditions. 
 
 Representative McDermott. Your proposition is that the nation 
 itself in some way or the people of the United States should equalize 
 conditions. The claim on the part of those who desire a subsidy is 
 that these two inequalities are met by an American about to invest in 
 ships: First, the cost of the ship here, no foreign ship being allowed 
 American registry, is greater than that of the ship built abroad which 
 is going to compete for the traffic. The initial cost is said to be 
 anywhere from 25 to 80 per cent greater. Second, that under our 
 navigation laws our sailors receive better treatment and better accom- 
 modations than those enforced by foreign nations. That results in a 
 greater pay roll for the crew of the ship. So we have an increase in 
 the initial cost and an increase, under one of our sumptuary laws or 
 several of them, in the cost of manning the ship and taking care of 
 the crew after they are engaged. How are you going to equalize as 
 to those propositions, assuming the truth of them f 
 
168 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Mr. Hill. To begin with, the difference in cost is nothing like so 
 per cent, 1 think. 
 
 Representative MoDeemott. It was variously estimated by witnesses 
 yesterday, starting at 25 and reaching to an estimate by one of our 
 ex-admirals of 80 per cent, his testimony being that his figures were 
 the result of a direct inquiry framed in this way: He inquired the 
 cost of building a ship on the Clyde, and then ascertained the cost of 
 building her in the works where he is engaged, and he put the dif- 
 ference at 80 per cent. It runs from that down to 25. Take it at the 
 lowest — 25 per cent. 
 
 THIRTY PEK CENT MORE. 
 
 Mr. Hill. We will have the largest ships ever built in this country ; 
 no such ships were ever built here, and the additional cost will be 
 somewhere between 28 and 30 per cent. 
 
 Senator Lodge. That is the difference on those ships which you 
 have built? 
 
 Mr. Hill. Yes, sir. 
 
 Representative McDermott. It seems to correspond with the gen- 
 eral estimate. 
 
 Mr. Hill. Coming down to the question, it is not entirely a matter 
 of the wages of the American sailor. We have a tradition that there 
 were such sailors, but there are very few American sailors on these 
 ships anywhere. Take the American ships sailing under the American 
 flag in and out of our ports; what proportion of their crews are Ameri- 
 can? It is very small. Even in trie larger ships everywhere the pro- 
 portion of American sailors is ver^' small. 
 
 The Chairman. But, if you will excuse me, it is argued here that 
 sailors from other countries shipping on American ships demand 
 American wages. How is that? 
 
 LABOR ON the PACIFIC. 
 
 Mr. Hill. They do. I will speak of our own experience. Then I 
 know whereof I speak. Take it on Paget Sound. If you want sail- 
 ors, you go to a sailors' boarding house or the sailors' union. You 
 go to a sailors' boarding house, and the officers of the union are the 
 men running the boarding houses, and for a man who is dead broke 
 and unfit for any service, from excesses of one kind and another, the 
 boarding-house man wants to find a place, because he has no more 
 money; and that is the man j^ou will get. 
 
 The same thing will apply with the longshoreman. You want 100 
 or 200 stevedores, and you pick out 75 or 100 men, good bright men, 
 and tell them to come to work to-morrow. They can not come. The 
 fellow who has no money and is broke is the fellow who will come, 
 and the fellow who has been on a debauch will come. So long as the 
 other man, the saving, trusted, industrious man, has any money, if the 
 boarding-house keeper can keep him, he will. That is one of the dis- 
 advantages that American ships labor under; and it is more of a 
 disadvantage than you think. 
 
 For instance, if a ship starts out and the firemen leave her and go 
 ashore at any point, what are you going to do ? You have to pay them, 
 and they go. They make a contract with you. How are you going to 
 enforce the contract? You can enforce a contract against a blackbird 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 169 
 
 in the air as easily as you can against a sailor. And if you enforce it, 
 that will not get your ship along. Your real safety- on the Pacific is 
 to hire Asiatic sailors and firemen. Nominally you are sailing under 
 the American flag; in reality j'ou find it safer and more profitable to 
 go under another flag; that is, to transact your business under another 
 flag. Unfortunately that is true. 
 
 Representative MoDermOtt. That does not apply to the Atlantic 
 coast. 
 
 Mr. Hill. I do not think so. I am not familiar with the Atlantic 
 coast, however. 
 
 SAILORS AND THEIR WAGES. 
 
 Representative McDermott. Is it not a necessary political truth 
 that the average wage which prevails in anj^ given community for that 
 class of physical power and mental power necessary to make a sailor 
 will govern the wages of the sailor? In other words, if, in the city of 
 New York, a man fit to be a common sailor can in other occupations 
 obtain the average wage given to men of his class, he will not ship 
 unless he can get better wages? 
 
 Mr. Hill. That is one of the main diflSculties in owning and sailing 
 American ships; and it is not limited to ships. To-day you see a great 
 falling off in manufactured articles throughout the country — factories 
 closing every day. We have the raw material in the greatest abun- 
 dance, and we furnish it to other people, and they pay transportation 
 on it and make the article and compete with us; and that is because 
 everything we make costs so much that we can on\j sell it with a 
 profit at home. It is the same thing in our coasting. A foreigner 
 might come in and interfere, by making lower rates, with our coasting 
 if he was allowed to. 
 
 Let me call your attention to this: As low rates by water are made 
 on the Great Lakes as are made for the same distance anywhere in the 
 world. Five or six years ago the}' were lower than anywhere in the 
 world, and high wages were paid. But human ingenuity, carrying as 
 far as it could improved methods of loading and unloading, and all 
 that sort of thing, good dispatch, etc., has helped the ship. 
 
 Representative McDermott. Men ship in Liverpool liecause they 
 can obtain about the prevailing wage for their class of labor? 
 
 Mr. Hill. Yes, sir. 
 
 Representative McDermott. They do not ship in New York ? 
 
 Mr. Hill. No; because they can not obtain the prevailing wage. 
 
 Representative McDermott. A man can go on one of these high 
 buildings and be a rigger, or something of that sort, and get more 
 money than at sea. 
 
 GOVERNMENT AID ESSENTIAL. 
 
 Mr. Hill. That is an exceptional case. I refer to the prevailing 
 wage. The average man in this world earns enough to support him- 
 self and his family, if he has one, and to leave enough for his burial, 
 with what little furniture he may have, and possibly a small bank 
 account. The average, 1 guess, will omit the bank account. The 
 average wage, then, is the cost of living in that way and supporting a 
 family. It is said that to pay that average wage as fixed by the stand- 
 ard in this countiy makes American shipping prohibitive; that is. 
 
ITO HEARINGS BEFOBE THE MERCHANT MARINE COMMISSION. 
 
 international shipping. If that is true, how can you meet it without 
 governmental aia< Assume it to be true. How can you meet it with- 
 out governmental aid? 
 
 Representative McDeemott. Can you meet it with governmental aid '( 
 
 Mr. Hill. 1 do not know. 
 
 Representative McDermott. You can not meet it without it? 
 
 Mr. Hill. You can not meet it without it. Is the Government pre- 
 pared to go far enough? My home is, and the greatest part of my 
 life has been spent, in a territory that is about as far from the sea as 
 you can get in the United States. I have lived in the State of 
 Minnesota. 
 
 Such a policy would be rather hard on our people. They have diffi- 
 culty in paying the wage the}' pay for the man to cultivate their land; 
 and they have to compete with the 50-cent labor of the Argentine, and 
 the peasant labor of Europe, and the labor of India, and that of every- 
 l^ody else. 
 
 Now, to lay additional burdens on them for the sake of having the 
 American flag at the peaks of some ships, which would be of very 
 doubtful success, I think would be unfair; and in the end, if you did 
 it to a limited amount, the amount appropriated by the Grovernment 
 would soon be absorbed by a few ships, and there you would stop. 
 When you had got a number of ships sufficient to use up the subsidy, 
 you would stop, because other men would not go on. 
 
 THE MISSISSIPPI PARALLEL. 
 
 The Chairman. What about the burden those on the Atlantic coast 
 are bearing to irrigate the arid lands of the West and to improve the 
 Mississippi River for the protection of private interests? 
 
 Mr. Hill. The improvement of the Mississippi River out of the 
 public Treasury ! Those of us who have lived on its banks, and I have 
 lived there over forty-eight years, think that that is more of a repair- 
 ing of fences. If you could lath and plaster the river with cement 
 and make it water-tight and save all the water, you could not get 
 water enough in it to float a ship 
 
 The Chairman. That is what some of us think. 
 
 Mr. Hill. I mean a vessel that would ever be of any use. 
 
 Representative McDermott. To follow out my line, leaving the 
 question of labor to take care of itself, allowing that by the introduc- 
 tion of coolie labor, or some other kind, you could man the ships, you 
 have ine difference in initial cost, which is prohibitive if it is 26 
 per cent, because in close competition I can not spend 1400,000 for 
 a ship and compete with you who are running a ship that cost $300,000, 
 how would you equalize the question of cost? 
 
 Mr. Hill. There is one way 3'ou could do it very readily. Whether 
 1 would advise that method or not is another thing. But if you admit 
 foreign-built ships free of duty you will get a merchant marine quicker 
 than you will in an}' other way. 
 
 Representative McDermott. That covers the ship question. 
 
 Mr. Hill. Yes; whether or not that is a wise thing to do is another 
 question. 
 
 Representative McDermott. Is not the alternative abandonment? 
 We have got beyond the theoretical question as to the downfall of our 
 merchant marine. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 171 
 
 Mr. Hill. It is a patent fact. It is there. 
 Representative McDekmott. The merchant marine is gone. 
 Mr. Hill. Yes, sir. 
 
 Representative MoDermott. If there is any remnant left it is going 
 pretty soon unless something is done. 
 Mr. Hill. Yes. 
 Representative McDermott. How can you build it up ? 
 
 in favor of an export bounty. 
 
 Mr. Hill. Unless there is an American demand for it, I do not 
 know how you can build it up. 
 
 Representative McDermott. This Commission is assuming that there 
 is a demand, or assuming that its report will be presented so that its 
 recommendations may be adopted. If there is a demand- 
 
 Mr. Hill. Allow me. 
 
 Representative McDermott. If there is a demand, how will you 
 build up the merchant marine? , 
 
 Mr. Hill. I will tell you simply my own views. If 3'ou should pay 
 a tonnage tax on articles of low cost, which constitute the great ton- 
 nage of the country, going to a foreign market or to a new market — 
 and I do not know how you could differentiate the new market from 
 the old — if you could pay an export bounty tax on everything that 
 went out of the country, I think you could probably make it pay to 
 own ships. 
 
 Representative McDermott. You mean an export tonnage subsidy ? 
 
 Mr. Hill. Yes. 
 
 Representative McDermott. You do not mean to impose a tax ? 
 
 Mr. Hill. When I spoke of a tax I had an idea that it would be a 
 tax on the people. 
 
 Representative McDermott. There is one other question I should 
 like to ask a'ou. We pay out for the carrying of our goods in foreign 
 bottoms, it is estimated, something over $250,000,000 a year. That 
 payment is necessarily in gold. 
 
 Mr. Hill. I think that includes the passengers. 
 
 Representative McDermott. Yes, sir. 
 
 Mr. Hill. I think probably 1140,000,000 or 11.50,000,000 is paid for 
 our freight. 
 
 Representative JxcDermott. That is paid in gold? 
 
 Mr. Hill. Yes, sir. 
 
 Representative McDermott. Ordinarily ? 
 
 Senator Lodge. Or in exports. 
 
 Representative McDermott. Or in exports. 
 
 Mr. Hill. It lessens the amount of gold that would come to us. 
 
 Senator Lodge. It lessens the balance. 
 
 Mr. Hill. So it is equivalent to paying in gold ? 
 
 Senator Lodge. Certainly. 
 
 Representative McDermott. Have you ever calculated the effect of 
 that on what is known as the gold movement between this country and 
 foreign countries 
 
 Mr. Hill. No, sir. 
 
 Representative McDermott. As to whether it is appreciable or 
 whether it is not appreciable ? 
 
172 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 HOW SUBSIDY STARTED. 
 
 Mr. Hill. Pardon me. The question of ship subsidy started with 
 a thirty-minute talk. I had come back from the Pacific. 
 
 We had started taking cotton from the Southern States, and I got 
 the Japanese to use it by guaranteeing it would improve their yarns, 
 using our long staple mixed with the India short staple that they were 
 using. We got the trade started, but when the South African war 
 broke out, ships on the Pacific were scarce and high, and I was over 
 on the coast and found we had to cancel in a week twentj'-odd thous- 
 and bales of cotton, and 1 looked the matter up. I think we canceled 
 in the month of December of that year something over 60,000 bales of 
 cotton, because we could not get ships to carry it. - • 
 
 When I came home Senator Davis was alive, and Senator Hanna 
 was there at a little reception. I told them what was happening, and 
 asked why the United States did not try to make some intelligent 
 effort to get ships that would carry our products to new markets. 
 Cotton at that time was selling at 4|- cents to 5 cents, and the people 
 were suffering on account of the low price, and here there were not 
 any ships to carry it to market. Mr. Hanna came to me before I left 
 the room and said: "I am coming to see you to-morrow." And he 
 did. And he opened his campaign in Ohio with the subject of ship 
 subsidies. That is the way it started. 
 
 Coming back to the whole question, is this Government to appro- 
 priate $10,000,000 or $12,000,000 a year? If it did, how long would 
 it be before a few ships would have that subsidy, and then the mduce- 
 ment for others, who could not get the subsidy, to go into shipping 
 would be gone, because they would say "we can not compete with a 
 man who nas already got in and leceives a Government subsidy." 
 Unless the subsidy can go on the stuff that is carried, I do not see how 
 you are going to apply it intelligently. 
 
 MR. hill's PLAN. 
 
 Representative MoDermott. Your proposition is to give an export 
 bounty ? 
 
 Mr." Hill. That is it. 
 
 Kepresentative McDermott. Others want differential duties. 
 
 Mr. Hill. They would bring about the same thing. 
 
 Representative McDermott. Differential duties would involve inter- 
 national complications, while an export bounty would not. 
 
 Mr. Hill. On account of the favored nation clause, and so on. 
 
 Representative McDermott. Would there not be retaliation 
 immediately ? 
 
 Mr. Hill. I think we will have retaliation anj^way. 
 
 Representative McDermott. Not if you give an export bounty. 
 There would be no reason 
 
 The Chairman. You will find that the treaties provide against an 
 export duty as well as against differential duties. 
 
 Representative McDermott. We would have to amend the treaties. 
 
 export bounties and the west. 
 
 The Chairman. Mr. Hill, you say that the people of Minnesota would 
 probably object to subsidies, and yet you speak of taking money out 
 
HEAEINGS BEFORE THE MERCHANT MARINE COMMISSION. 173 
 
 of the Treasury in the shape of an export bounty. Why would they 
 not object to that just as much? 
 
 Mr. Hill. If it is paid on the stuff that is carried to a new market, 
 they would get a benefit, and if the stuff was not carried to a new 
 market you would not have to pay it. If it was carried to a new mar- 
 ket every man, we would naturally suppose, would get a benefit in the 
 increased demand coming from the new consumers. 
 
 Now, another thing, Mr. Chairman. You spoke of the question of 
 the pul)lic domain and irrigation and the Western States. I do not 
 want you to be at all jealous of our Western States, because they are 
 all settled by people from as far east as Machias and East Machias. 
 
 The Chairman. I have always voted for irrigation projects and 
 everything else that would help the West. 
 
 Mr. Hill. That is good. Our public domain is gone, or that por- 
 tion of it where men can go and support their families, unless there is 
 some artificial moisture brought upon the land. To-day people by the 
 tens of thousands are leaving their own country and going to the 
 country where I was born — Canada. They do not want to go, but 
 people are going into Canada from Iowa, southern Minnesota, South 
 Dakota, and a few from Nebraska and Kansas and Michigan, and some 
 from Wisconsin. 
 
 The Chairman. I chanced to be born in the same country that you 
 were. Are not the people to whom you refer going because they can 
 sell their Iowa land for f 100 an acre and get equally good land in 
 Canada for 125? 
 
 Mr. Hill. They sell their land at from f 60 to 175 an acre and buy 
 the other at from $5 to $8 an acre. 
 
 The Chairman. Exactly. Is not that why they are going? 
 
 Mr. Hill. They would pay $25 an acre for land with water on it 
 as cheerfully and readilj^ as they would pay $2.50 for land without 
 water. Bear in mind, we all have to plead guilty. We do not carry 
 secrets around with us, anyway. 
 
 AGRICULTURE THE SHEET ANCHOR. 
 
 On the question of irrigation, I saw our great domain being occu- 
 pied; and the public domain has been the safety valve for the country, 
 because when a man got through the turmoil of trades-unionism and 
 one thing and another, he would say, "I will save a little money and 
 go on a farm and become a farmer, and sit under my own vine and fig 
 tree;" and many of them have done so. 1 think the agricultural por- 
 tion of our nation has always been its sheet anchor, and I think it 
 always will be. 1 think it has its full share of intelligence and patri- 
 otism and everything that goes to make good citizenship. And the 
 money derived from the parcels of land that have been sold in those 
 States, we would ask you, in fairness, to lend to us, to be spent in our 
 own States, because you could not irrigate Rockingham County in New 
 Hampshire [laughter], and you could not grow anything if you did. 
 
 The Chairman. But we would like to irrigate our shipyards. 
 [Laughter.] 
 
 Mr. Hill. I should like to help you. But when you undertake to 
 do that, let us do it on a foundation basis that is going to be perma- 
 nent, and not one that will fall over and put us in more trouble. 
 
 Representative McDermott. You do not want any more irrigation 
 of the kind they had in the shipyards in New Jersey. [Laughter.] 
 
174 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Mr. HiLi-,. Not in any sense whatever. 
 
 The Chairman. Our anxiety is just this. Senator Lodge and ] 
 have always voted for irrigation bills and all measures of that kind. 
 
 Mr. Hill. We are thankful to you. 
 
 The Chairman. We were glad to do it. Now, a gentleman repre- 
 senting shipyards in Bath, Me., said his yards were closed; that the 
 men were out of employment; and that is going on all over the North. 
 We would like, and we especially desire, to receive suggestions of a 
 plan that would tend to overcome that condition of things and rehabili- 
 tate those yards and rehabilitate the merchant marine. You seem to 
 be very pessimistic on that poinc. 
 
 Mr. Hill. I am. After spending a long time on the question, and 
 looking at it from a purely business standpoint, I would not have under- 
 taken to build those ships except as a sort of regulator. I thought we 
 would try the experiment and as an incident to our railway transpor- 
 tation business. Otherwise 1 would not have undertaken to build them 
 at all. 
 
 If you do give Government aid in any direction, my own investiga- 
 tion brings me to the conclusion that it would be more effective in the 
 shape of a tonnage bounty on exports than in any other way. 
 
 as to the postal sltbsidy. 
 
 The Chairman. Have you given any thought to the extension of the 
 postal subsidy method, we already having a law on that subject? 
 
 Mr. Hill. Yes, sir; the postal subsidy. The ship that carries the 
 mail is, as a rule, a ship which could not make a living carrying 
 freight; and the first thing we want is something that will carry 
 freight — that will carry our products which are going to market. 
 Really, the first thing we want, and what we are going to find we need 
 worse than ships, is new markets. We are going to need them sooner 
 than we think, and when we do need them the quickest way to get 
 them will be through the proper means of transportation, because you 
 will find, if our competition is with Europe, that transportation cuts 
 quite a figure. The cost of laying an article down where it is to be 
 used is what we have to meet, and there is no sentiment-in it. 
 
 Senator Lodge. Mr. Hill, I should like to ask you a question. I 
 think 1 understand your position, but I want to get it clear in my 
 mind. In order to build ships you must have the demand ? 
 
 Mr. Hill. Yes, sir. 
 
 Senator Lodge. The investment must be an attractive one ? 
 
 Mr. Hill. If it is to be permanent. 
 
 Senator Lodge. If it is to be sound and permanent. 
 
 Mr. Hill. Yes, sir. 
 
 Senator Lodge. In order to create a demand you must equalize 
 conditions ? 
 
 Mr. Hill. Yes, sir. 
 
 Senator Lodge. You must do that in order to secure the investment? 
 
 Mr. Hill. You must reasonably equalize them. 
 
 Senator Lodge. Reasonably, of course. 
 
 Mr. Hill. We can not force our sailors to take what a Norwegian 
 sailor will take on a tramp ship. 
 
 Senator Lodge. I understand that. We must reasonably equalize 
 conditions. 
 
 Mr. Hill. Yes, sir. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 175 
 THE THREE FACTORS. 
 
 Senator Lodge. Now, the conditions we have to meet in foreign 
 shipping, roughly speaking, are three — the cost of construction, cost 
 of operation, and Government aids? 
 
 Mr. Hill. Yes, sir. 
 
 Senator Lodge. If we admit a ship free, we equalize the cost of 
 construction. If we can buy our ships on the Clyde, of course we 
 would equalize the cost of construction. Is not that true ? But to 
 equalize the cost of operation you must lower the entire rate of pay 
 on board an American ship." You have to employ foreigners, have 
 you not? 
 
 Mr. Hill. We do that anywaJ^ 
 
 Senator Lodge. Exactly, forsea.men; but you will have to employ 
 foreign masters and officers? 
 
 Mr. Hill. Not necessarily foreign masters. 
 
 Senator Lodge. Do not our masters get higher pay than the masters 
 in foreign services? 
 
 Mr. Hill. Some of them do and some do not. 
 
 Senator Lodge. As a rule? 
 
 Mr. Hill. Yes; as a rule all wages are higher here. 
 
 Senator Lodge. That is what 1 thought. You would have to get 
 an equality of wages, and you would have to open our ships, in the 
 Pacific at least, to the Chinese in order to get an equality of conditions 
 thexe, would you not? 
 
 Mr. Hill. Under the present law a certain portion of the crew may 
 be Chinese. 
 
 Senator Lodge. But I mean to put ourselves on a perfect equality 
 with the Chinese or the Japanese line we should have to be able to 
 employ Asiatics? 
 
 Mr. Hill. Wg may go a little further. We might be compelled to 
 meet, in every way that it can be done, the conditions that exist on the 
 ships of our competitors. 
 
 Senator Lodge. Buy your free ships and bring your operating cost 
 down to the level of other nations? 
 
 Mr. Hill. Yes, sir. 
 
 AS TO FOREIGN SUBSIDIES. 
 
 Senator Lodge. Then there remains the mail subsidy? 
 
 Mr. Hill. Yes, sir; the mail subsidy. The mail-carrying ship will 
 furnish us very little relief in the matter of carrying our produce. It 
 could be more cheaply carried. 
 
 Senator Lodge. I understand that; but at the same time in com- 
 peting generally with foreign nations, where you meet an English line 
 having a mail subsidy, in order to get an equality of conditions you 
 must give our vessel a similar subsidy and similar business. 
 
 Mr. Hill. That is, if our companies or owners owned freight ships 
 and passenger ships, as most of the English do. 
 
 Senator Lodge. Yes. Must we not adopt that system, or abandon 
 any effort and allow the whole thing to go, or afford some form of Gov- 
 ernment aid? Are not those the three courses open to the Govern- 
 ment? 
 
 Mr. Hill. I think 1 can answer that in this way: To my mind you 
 will find only two courses. One is a tonnage bounty on exports and 
 
176 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 the other is to meet the competition of other nations, as far as the 
 Government of our country can do so, by a very liberal bounty. 
 
 Senator Lodge. Yes. That is Government aid. 
 
 Mr. Hill. A very liberal bounty, a bounty that would make itself 
 felt to an extent which would make it useful, would run into a very 
 large sum. 
 
 Senator Lodge. Of course. A Government bounty or a mail sub- 
 sidy or discriminating duties are all forms of Government aid. 
 
 AN EXPOET BOXJNTT GOVERNMENT AID. 
 
 Mr. Hill. Yes, sir. 
 
 Senator Lodge. I have been very much interested in your sugges- 
 tion of an export bounty, but that is a form of Government aid. 
 
 Mr. Hill. Yes, sir. 
 
 Senator Lodge. But if we do not give Government aid in some 
 form we must either bring our cost down to the foreign level or 
 
 Mr. Hill. Or go out of the business. 
 
 Senator Lodge. Or go out of the business. 
 
 Mr. Hill. That is right. 
 
 Representative Minor. Here is a copy of a bill prepared by myself 
 and one or two others in Congress — by three members of the Mer- 
 chant Marine and Fisheries Committee of the House. We had it 
 printed, but it never was introduced. We provide what shall be paid 
 per ton per mile for certain-sized vessels, and then we put in this 
 proviso: 
 
 '"''Provided^ That no vessel shall be entitled to the full compensa- 
 tion under this clause unless she shall have cleared from a port of the 
 United States with cai-go to the amount in capacity of fifty per centum 
 of her gross tonnage, and any shortage in the amount of cargo 
 required and defined, as aforesaid, shall diminish the amount of com- 
 pensation in this clause provided for in the proportion that such 
 shortage bears to the totaf cargo or its equivalent so required." 
 
 A TONNAGE PROPOSITION. 
 
 That is the cargo clause. In other words, in order to be entitled to 
 the subsidy, she must have carried oO per centum of her carrying 
 capacity, and any less would reduce the payment. 
 
 Mr. Hill. You know there is a difference between the carrying 
 capacity of a vessel, depending on how you count it. It might be her 
 net tonnage or her measured tonnage. 
 
 Representative Minor. We p] ovide that a certain number of square 
 feet shall constitute a ton. Suppose this Commission should decide 
 that to be a proper clause, and then we should provide that each ship 
 drawing a subsidy should only do so for a period of ten years, say, 
 and after that the subsidy should cease. I understood you to say that 
 in the case of a subsidy a large amount of money would be consumed 
 by a few ships, and that would be the end of it. 
 
 If I were to have my way about it, I would sa};^ that for a certain 
 number of yeai-s a ship should be entitled to the subsidy, and then she 
 should pass out of that class and let the other fellow with the new ship 
 come in. I should like to get your views on that. 
 
 Mr. Hill. The first feature there, I think, is the best thing I have 
 seen in any of the bills. 
 
 Representative Minor. You know who prepared it. 
 
HEAEINGS BBFOKE THE MERCHANT MARINE COMMISSION. 177 
 
 AT THE END OF TE^f TEAKS. 
 
 Mr. Hill. Now, I will go a little further. You propose to drop it 
 at the end of ten years. What would become of the fellow who had 
 the old ship, who had pioneered the business for you? Somebody 
 with a more modern ship, better able to stand competition than he is, 
 would walk in and take the Government aid, and the other fellow 
 would be ruined. 
 
 Kepresentative Spight. He would have to go out of business. 
 
 Mr. Hill. The effect of that provision would be that during the 
 time he was able to live, under favorable circumstances, during 
 the time when he was in favor, he would have to carry his traflSc 
 at suflSciently high rates to pay for his whole plant in ten years, or 
 he would have to go out of business at the end of that period. That 
 is the point there. 
 
 Representative Minoe. That provision was prepared on the theory 
 that in ten years he could establish a business, and in ten years on a 
 fair subsidy the Government would have paid the first cost of his ship, 
 so that thereafter he would not have to make so much money. He 
 would have the ship, and he would have an established business. 
 
 Mr. Hill. You could not make him retain the ship. 
 
 Representative Minor. Certainly not. 
 
 Mr. Hill. You could not make him run it, either. And he would 
 not run it unless it paid him. There is the difficulty. • 
 
 MUST BE PERMANENT. 
 
 Allow me to say that the great difficulty with all these measures is 
 to adjust them to conditions that may be permanent. Without any 
 prejudice one way or the other, for I am sure I would like to see the 
 American iiag 
 
 Representative Minor. I know that. 
 
 Mr. Hill. I am sure I should like to see the American flag on all 
 vessels coming in and out of the ports of the country; but I do not 
 think you could, after carrying him for ten years, come in then and 
 subsidize somebody else to drive him out of the business. He might 
 want to go on and build new ships as well. Perhaps his ships of 
 to-day would be coal hulks ten years from now. You can not get 
 something for nothing. There is only one instance I know of in which 
 you can do that, and that is to get the United States mail carried in a 
 railway post-office car. That you can get for nothing. 
 
 Representative Minor. The sum which the Government would pay 
 him in the course of ten years would build him another ship. 
 
 Mr. Hill. The difficulty would be that you would start another 
 fellow to ruin him, and he would sell out to the other fellow. 
 
 Representative Minor. We would have the ship, anyhow. 
 
 Mr. Hill. He may furnish the ship once, perhaps, but the next 
 time he will tell you "No, thanks." 
 
 AN EXPORT BOUNTY TO THE SHIPOWNERS. 
 
 Senator Mallort. I should like to ask you a question on a point 
 which has been passed. You said, practically, that according to your 
 idea, the only feasible plan by which we can accomplish the result 
 3a— 04 12 
 
178 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 sought here is by an export bounty. Can you state in detail how that 
 export bounty is to be applied ? Who is to get the benefit of it ? How 
 is it to reach 
 
 Mr. Htll. It is very well done in Mr. Minor's draft. You would 
 not pay it unless the service was performed, unless the products of the 
 country were carried to the other market — a foreign market — and if 
 they were carried to a foreign market the service would be performed, 
 and you certainly would be paying for something that you_ had got. 
 Whether you would pay too high a price or a fair price is another 
 question. 
 
 Senator Mallory. Is that bounty to be paid to the shipowner ? 
 
 Mr. Hill. Yes, sir; because he is the man you are trying to serve 
 in order to induce him to own ships. He will pay it to the shipper in 
 the rates, because he has to meet whatever rate a ship sailing under 
 another flag makes, and it is in order to equalize, as far as you can, 
 those conditions that you pay the bounty. 
 
 Senator Malloey. Have you thought on the subject sufficiently in 
 detail to be able to state how much, in your judgment, such an export 
 bounty would amount to, to start with, say. We know what a ship- 
 subsidy bill would amount to. 
 
 Mr. Hill. Oh, yes; I know. I worked that out once to see how 
 far the amount proposed in that bill would go, and I think I counted 
 that nine ships or ten ships would have taken it all. 
 
 Senator MalIiOky. I think that was about the estimate made in 
 Congress. 
 
 IVn*. Hill. Yes; it would not go very far for a merchant marine. 
 
 Senator Mallory. How would this compare with the nine millions 
 it was proposed to give as a direct subsidy to ships? 
 
 WOULD GO a long WAY. 
 
 Mr. Hill. This plan, the draft of which Mr. Minor read, could be 
 worked out in a simple way, and I think jon would get a great deal of 
 tonnage carried in American ships for $10,000,000 or $15,000,000^— an 
 immense amount. 
 
 Senator Mallory. 110,000,000 or $15,000,000 ayear? 
 
 Mr. Hill. Yes, sir; take some of it out of the river and harbor bill. 
 
 Senator Mallory. Do not take it from that. We have not had our 
 rivers and harbors in the South attended to. 
 
 Mr. Hill. You are down where there is a great harbor, down to the 
 mouth of the river; but let me say that the great big navigation is on 
 steel rails; and it will be. My first transportation service was in con- 
 nection with the Mississippi River between St. Louis and St. Paul, and 
 I have a most kindly place in my heart for the Mississippi River; but 
 the clock struck 12. 
 
 Senator Mallory. Undoubtedly ; so far as the rivers are concerned. 
 AVe concede that. But as to harbors; take Philadelphia, for instance; 
 take Boston 
 
 Mr. Hill. Take New York. 
 
 Senator Mallory. Take New York; they are clamoring for deep 
 water. 
 
 Mr. Hill. They need it. 
 
 Senator Mallory. Undoubtedly. 
 
 Mr. Hill. We can not take a load in our big ships to New York 
 and 1 do not know of any Atlantic port to which we can. 
 
HEARINGS BEFOKE THE MERCHANT MARINE COMMISSION. 179 
 
 Senator Malloey. Consequently we can not take the money for 
 subsidies away from harbor improvements, at least. 
 
 Mr. Hill. I am with you to improve harbors. 
 
 Senator Mallory. Even on your own coast I suppose there are places 
 where you need harbor improvements. 
 
 Mr. Hill. Dear me, yes; we need them greatly, and at some places 
 we need protection against the destruction of the harbors we have. 
 
 DISCRIMINATION IN INDIEEOT TRADE. 
 
 Senator Mallory. Now, one other point, if it is not tiring you. 
 A bill was introduced in Congress at its last session, the main feature 
 of which, I may briefly say, provided that the United States Govern- 
 ment should make a discrimination in favor of American ships in the 
 tariff on articles brought in American ships from foreign countries, 
 discriminating against indirect trade by foreign ships. In other 
 words, a British ship bringing a British product, either agricultural 
 or manufactured, to this country would come in as an American ship 
 would without making any change, but a British ship bringing a 
 French or German or Italian product to this country would be sub- 
 ject to the discriminating duty. The effect of that, if it went into 
 operation, would probably be to give the American ship a considerable 
 advantage in the course of time. I think that is conceded. 
 
 Mr. Hill. Considering the condition we are in at the present time, 
 I do not think that for a long time to come we need consider paying a 
 bounty to anybody to bring the other fellow's manufactures into our 
 country, whatever they are. 
 
 Senator Mallory. This is not paying a bounty to anybody else. It 
 is simplj' reducing the rate of- tariff as a premium to the American 
 ship to bring cargoes to this country. 
 
 Mr. Hill. A cargo 'i Let me see if I understand you. An Ameri- 
 can ship that would bring a cargo of goods from England, if you 
 like 
 
 Senator Mallory. Yes. 
 
 HELP OUT THE PRODUCERS. 
 
 Mr. Hill. I do not see it. Let us take care of the producers of the 
 tonnage and remember that the people who are producing the tonnage 
 which pays the $1.50,000,000 are the men who raise the cotton and the 
 corn and the grain and the provisions. That is where the tonnage 
 comes from. They furnish it. When we have any money to pay, let us 
 pay it as long as is necessary toward finding a new market for our 
 stuff that is going out, and thus help out our producers. 
 
 Senator Mallory. There is no use of having new markets if we 
 have no means of carrying our goods to the new markets. Unless we 
 have the means of transportation, the new market is utterly lost to us. 
 
 Mr. Hill. Yes; and it is lost to us to-day. They are canceling 
 orders for American goods to-day. We are taking twenty -five millions 
 of the Japanese loan. I suppose we will be in good luck if they spend 
 two millions of that in our countr}'. They are buying a little canned 
 fish on the Pacific coast. I do not know of anything else they are buy- 
 ing in this country. 
 
 The Chairman. Do you refer to the Japanese? 
 
 Mr. Hill. Yes, sir. 
 
180 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 The Chairman. That is about all their army needs— canned fish and 
 
 rice. 
 
 Mr. Hill. Yes; but they buy ships, guns, ammunition, and so on. 
 I think Germany is furnishing the bulk of the supplies. 
 
 THE JAPANESE SUBSIDIES. 
 
 Senator Lodge. On the matter of the Japanese, I wish you would 
 speak of their heavily subsidized lines. 
 
 Mr. Hill. I think their plan is that a merchant patronizing a Japa- 
 nese line gets a drawback on what he ships. 
 
 Senator Lodge. My impression is, the Japanese give a construction 
 bounty and a tonnage bounty also. 
 
 Mr. Hill. The tonnage bounty is about their profit. 
 
 Senator Lodge. They also get a construction bounty in the yards. 
 
 Mr. Hill. I have tried to satisfy myself on that point. 
 
 Senator Lodge. My impression is that it is a very scientifically 
 subsidized line. 
 
 Mr. Hill. I asked Ito. He stayed two or three days at my house. 
 He is a very capable and bright man. I discussed a great many things 
 with him. If there is anything of the kind you speak of, in the nature 
 of a construction bounty, it is so successfully covered up that I was 
 not able to locate it. 
 
 THE BRITISH SUBSIDIES. 
 
 Senator Lodge. And the Canadian Line 
 
 Mr. Hill. The Empress Line? 
 
 Senator Lodge. The Empress Line gets a mail subsidy. 
 
 Mr. Hill. Yes, sir; that line gets a subsidy of about $600,000 a 
 a year, I think it is— £120,000. 
 
 Senator Lodge. So that your boats and Mr. Winsor's boats have to 
 compete with the Japanese line and the English line, both of which 
 are subsidized? 
 
 Mr. Hill. Yes, sir; and we have to compete with the Canadian 
 railroads, which buy steel rails from the same mills we do at $10 a ton 
 less. 
 
 Senator Lodge. Did not some of our railroads have land grants? 
 
 Mr. Hill. Yes; and some of them did not. 
 
 Senator Lodge., I know some did not; those in the East did not. 
 
 Mr. Hill. I speak for one in the West which did not, and it crossed 
 the American continent, and did not fail and did not reorganize. 
 
 Senator Lodge. 1 know. Some did and some did not. 
 
 Mr. Hill. And from an international standpoint, that line is near- 
 est to the international border of any American railway, and in case 
 of trouble would be of great use. 
 
 Senator Lodge. There are railroads that have received considerable 
 Government aid. 
 
 Mr. Hill. And it did not do much good, I am sorry to say. 
 
 Representative MoDermott. You speak of an export bounty, and 
 evidently speak of it with the idea of searching for foreign markets. 
 
 Mr. Hill, As far as it can be done. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 181 
 
 THE CASE FOE SUBSIDIES. 
 
 Representative MoDeemott. Those who have spoken in favor of 
 subsidies have put the necessity for subsidies on two pjrounds. One is 
 that the subsidies would protect and create business for American ship- 
 yards; the other, that it would provide a class of seamen who would 
 be serviceable in time of war. Upon those two propositions those 
 who have asked for subsidies here have pinned their request. Is there, 
 in your opinion, anything in either one of those propositions which 
 would justify the expenditure of money from the United States Treas- 
 ury for that purpose ? 
 
 Mr. Hill. It would be a great advantage to us to employ men in 
 building ships, or in making the plates for the ships, or in mining the 
 ore that goes into the plates, or the coal, and in everything that 
 eniploys labor. 
 
 Representative MoDeemott. That is the protective principle pure 
 and simple. 
 
 AS TO LABOE. 
 
 Mr. Hill. Yes; but suppose the result of that is to make the cost 
 so high that we can not sell the ship or whatever the article may be. 
 If a man is getting $3. 50 a day, and works one hundred and fifty days, 
 he gets $525 for his year's work. If he works three hundred days and 
 gets 12.50 a day, he gets f750. In both cases he has sold his time. 
 
 The point is that I think we are to-day in a period of great industrial 
 distress, because of the high cost of everything, and we will have to 
 come down. It may not be pleasant, but we will have to come down 
 before we will get out of it. We will have to adopt a good liberal 
 scale. Our people can not work and educate their children, and take 
 care of themselves as people are compelled to do in older countries, 
 and we do not want them to. The Government can not assume that 
 burden for the benefit of one class without doing it for the benefit of 
 others. At least it seems to me it would be unfair. 
 
 On the question of the wages of the sailor, we are paying the high- 
 est wages to sailors of any country in the world, and much higher than 
 anybody else. Do you know of any number of American sailors ? I 
 employ 18 in the summer months, and I think last year I had two, 
 Mr. Chairman, who were born in the United States. The rest of them 
 were foreign born. Those I employ get good pay and have very little 
 to do. 
 
 AS TO A NAVAL EESEEVE. 
 
 Representative MoDeemott. You have answered my first question. 
 Their first point is that it would encourage American labor. The 
 industry is now prostrate. That is admitted, for the sake of the argu- 
 ment, anyhow. They say a subsidy would revive or recreate that 
 industry, under the protective theory. There you stop, so far as 
 American labor is concerned. Next, they say that by the employment 
 of a certain number of American citizens on the ships, you would 
 educate American boys so that they could be used on the water in time 
 of war. Is there anything in that proposition which strikes you as 
 being strong enough to justify the payment of money out of the 
 Treasury ? 
 
182 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Mr. Hill. 1 think there is absolutely nothing whatever in it. I 
 think the American boy feels he can do better in something else. 
 
 AS TO XKANSPOBTS. 
 
 Representative McDermott. The third proposition, which is some- 
 what similar to the second, is that these ships, being constructed in 
 this country, having American registers, can be used for transport 
 service in time of war, if another war shall ever come. Is there any- 
 thing in that suggestion, in your opinion? 
 
 Mr. Hill. They could be so used. 
 
 Representative McDermott. Would there be any trouble in obtain- 
 in s 
 
 [r. Hill. We could, as we did before, buy all the ships we wanted 
 in time of war cheaper than we could build them. 
 
 Representative McDermott. Then none of those three propositions 
 appeals to you as having in it principles of sound political economy ? 
 
 the export bounty best. 
 
 Mr. Hill. I do not feel that they cut any important figure in the 
 whole question. I think if you can work on the other line, if your 
 object is to have American ships built in America and flying the Amer- 
 ican flag, you should make it profitable for Americans to own ships. 
 1 think the export bounty will go further in that direction than any- 
 thing else, and if the ships do not carry the products of the country 
 you will not have to pay them, and if they do you certainly will have 
 some service in return for the payment. 
 
 Representative McDermott. In other words, you think it would be 
 justifiable if they are good drummers and get trade? 
 
 Mr. Hill. That is it. 
 
 STATEMENT OF WALLACE DOWNEY. 
 
 Wallace Downey appeared before the Commission. 
 
 The Chairman. Mr. Downey, please state your present business. 
 
 Mr. Downey. I am president of the To wnsend- Downey Shipbuild- 
 ing Company. 
 
 Mr. Chairman and gentlemen of the Commission, the deplorable 
 condition of our American merchant marine in the foreign trade seems 
 to be generally admitted and recognized, as is also the deplorable con- 
 dition of the shipbuilding industry in America. Therefore I will not 
 take up your time in elaborating upon that phase of the important 
 subject under consideration by this Commission. 
 
 The necessity of a merchant marine, owned and operated by Ameri- 
 can citizens, I believe is of the utmost importance, first, from a com- 
 mercial standpoint, and, second, from a military standpoint. 
 
 It is generally admitted that a very considerable difference exists 
 between the cost of building a ship of any type in the United States 
 and in foreign countries. For many reasons this difference changes 
 to such an extent that a variety of opinions exists as to what the differ- 
 ence really is. I appreciate fully the difference in first cost. 
 
 I have no reason to doubt the statements that have been made here 
 in regard to the difference in cost of operation, and from facts and 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 183 
 
 data that I have gathered I have arrived at an average difference in 
 cost of construction running from about 33 to 60 per cent more than 
 the English cost, and the cost of operation, from what I have heard 
 and read and gathered in a general way, I should place at about 33 
 per cent. 
 
 There seems to be a very great question in the public mind as to 
 whether the people of this country can afford to have a merchant 
 marine if it is going to cost the great difference for construction and 
 the great difference for operation and if those differences have to be 
 made up by Government subventions. I believe firmly that the people 
 of this country can afford to have their own merchant marine at the 
 present specified extra cost and as shipbuilding and operating increased 
 the difference in cost would grow less. 
 
 PRESENT CONDITIONS ABNORMAL. 
 
 I have prepared an approximate statement as to how it would work 
 out as a commercial proposition, based upon a ship of 6,500 tons dead 
 weight carrying capacity. Gentlemen, I think I can explain to you 
 some of the great discrepancies mentioned here in the first cost of ships. 
 The condition that exists to-day in the English shipyard is that they 
 are building at the very minimum of cost, and there is a question in 
 the minds of a number of people who have investigated it as to whether 
 the English shipbuilder to-day is getting anything more out of the 
 ships he builds than the actual hard pan net cost, without even his 
 overhead charges added on to as he ordinarily does in normal times. 
 I believe that is the condition in England to-day. 
 
 On the other hand, the cost of a ship built in the United States 
 during the past three years has been abnormally high, resulting from 
 high prices of material and labor. 
 
 As each of us has gathered figures from different sources, one may 
 have gotten data that show a difference of 33 per cent on some specific 
 ship — another, possibly, under the most favorable conditions, so far as 
 the purchaser was concerned, and the most unfavorable so far as the 
 builder was concerned; that is, the builder lost 10 or 20 per cent on 
 the actual construction of the ship, which accounts for the present 
 condition of our shipyards. The other results may have been arrived 
 at — for instance, the great difference of 75 per cent, which has been 
 mentioned, and the estimate of 80 per cent — by comparing the 
 abnormally low cost of an English ship to-day with the abnormally 
 high cost of an American ship. 
 
 THIRTT-THKEE PER CENT IN NORMAL TIMES. 
 
 I say in normal times, when the English shipbuilder is making his 
 normal profit and when the American shipbuilder can secure steel and 
 other materials promptly, at reasonable prices, when the labor condi- 
 tion is such that men work steadily and industriously, not necessarily 
 cheaply, in American shipyards, under such conditions as those I 
 believe the difference in cost would be approximately 33 per cent 
 excess in America over England. 
 
 To illustrate the net commercial result to the American people if 
 they adopted a policy of subsidies of any kind that would build up and 
 continue in operation an American merchant marine, I will take one 
 
184 HEAEINGS BBFOBE THE MEBCHANT MAEINE COMMISSION. 
 
 steamship of 6,500 tons dead-weight carrying capacity. That is the best 
 way to make your calculations, either of the earning capacity or cost 
 of a ship. This ship in England would cost about *3i per ton of dead- 
 weight capacity, or the total sum of about $220,000. A ship of 
 exactly similar type and size would cost in America about $55 per 
 ton, or 1357,500. 
 
 A square-rigged sailing ship, steel, such as Mr. Sewall was talking of, 
 of 5,000 tons dead weight carrying capacity, would cost in England 
 about $26 per ton dead weight carrying capacity, equal to a total 
 cost for the ship of about $130,000, and in America that ship would 
 cost about $38 per ton, or about $190,000. The diflference is about 
 50 per cent on that particular kind of a ship. I do not need to make 
 any argument to pi-ove those differences. They exist. There is no 
 quesion about it. 
 
 The difference in cost of operation will average, I believe, about 33 J 
 per cent at the present time. That is 33^ per cent more than what it 
 costs the Englishman to operate. I do not say that the English can 
 operate 33^ per cent less than what it costs us to operate. It makes a 
 very distinct difference. 
 
 On the question whether it will pay the American people to grant 
 subventions to create and support this American merchant marine for 
 foreign trade, I wish to say that I believe it will pay as a strictly 
 commercial proposition, and from a military standpoint I deem a mer- 
 chant marine an absolute necessity. I think anyone who has studied 
 history with any sort of care, who has looked over the success and 
 the necessities for success, in any maritime power, must realize that a 
 merchant marine is an absolute necessity, and looking forward into 
 the future I believe that any country situated as this country is which 
 has no merchant marine will be in a most helpless condition when the 
 time arises when it will be in controversy with other nations, not one 
 but perhaps two or three. If such a condition ever arises, and the 
 
 [)resent condition of our merchant marine continues, we will be help- 
 ess. I do not think that is a matter of theory. You can not make 
 expert sailors, you can not make trained gunners, out of farmers 
 quickly — as we might require them in certain emergencies. 
 
 A SPEOIFIO INSTANCE. 
 
 Now, viewing this ship proposition from a strictly commercial stand- 
 point, I will submit an illustration, based as I said upon a 6,500-ton 
 dead weight carrying capacity steamer. Assuming that such a vessel 
 will cost, built in America of American material, $350,000, and assum- 
 ing that the people will pay the difference between what that ship 
 would cost in England and what it does cost in America, the amount 
 that the people would have to contribute to the first cost would be 
 approximately $130,000. Assuming that the cost of operation is about 
 33|- per cent in favor of England, and that a subvention is granted to 
 equalize that, it would cost the people approximately $18,000 a year to 
 make up the difference in cost of operation. _ Assuming that the ship 
 is built and immediately put into operation, in the first year it would 
 cost the people of the United States approximately $148,000, including 
 the difi'ereQce in cost of first construction, which would be settled for 
 all time then, and including the difference in the cost of operation. 
 Now, that would be the investment of the people of the United States 
 in this specific ship. 
 
HEA.EINaS BEFORE THE MEECHANT MAEINE COMMISSION. 185 
 
 Senator Martin. You do not make any provision for what subsidies 
 foreign nations may grant. 
 
 Mr. Downey. I am dealing in this matter entirely on a basis of 
 equity. If we establish a condition that will place American ship- 
 owners and American shipbuilders on a par with the foreign ship- 
 owner and the foreign shipbuilder, and if then the Americans can not 
 compete, it is absolutely useless to try to help them, and it would not 
 be proper to help them any further. 
 
 COMING BACK TO THE PEOPLE. 
 
 To offset that investment on the part of the people of the United 
 States the first return that the people of the United States would 
 receive out of that ship would be about 90 per cent in labor, amount- 
 ing practically to $316,000. 1 mean by "labor" the labor from the 
 time the soil is turned to dig the coal and iron ore, to cut the lumber, 
 to contribute everything that goes into that ship. I am perfectly safe 
 in saying that 90 per cent of the whole ultimate cost of that ship is 
 labor — from the coal and iron mines and the lumber woods until the 
 ship is completed, with the flag flying, ready to go to sea. This first 
 result to the people of the country would be the receipt of $315,000 in 
 labor in that ship. 
 
 The next receipt by the people would be, 1 think, approximately 75 
 er cent of the total operating expenses, amounting to approximately 
 
 ■ 5,000 a year. That would be paid to officers and men, including all 
 of the staff — sailors, firemen, engineers, etc. — and to the supply peo- 
 ple. I am allowing that 25 per cent of the total operating expenses 
 of the ship would be paid in foreign ports and 75 per cent would be 
 . paid in American ports. 
 
 I base that calculation upon what is actually being disbursed in the 
 case of a ship in New York to-day. If she is an American ship she 
 spends about that much in proportion over and above what the f oreim 
 ship disburses in New York. I feel perfectly safe in saying that 75 
 per cent of the total cost of operating that ship per year would come 
 back to American pockets. 
 
 If we take that ship for a period of fifteen years, which I consider 
 the average reasonable lifetime of such a vessel, for at that age she is 
 either obsolete or lost, it would give a net result about as follows: 
 The people would have contributed to the first cost $130,000; they would 
 have contributed in fifteen years $270,000 to the operation of the ship, 
 making a total of $400,000 in support of this vessel. 
 
 TWENTT-FIVE PEE CENT A TEAK. 
 
 Now, the returns to the people of the United States in the matter 
 of building the ship, labor from the coal and iron miner to the man 
 who hoists the flag, would amount to $315,000. Seventy -five per cent 
 of the cost of operation coming to American pockets would be $675,000. 
 Assuming that American shareholders in this ship would, as they 
 should, receive 15 per cent upon the net amount of their money invested 
 in this ship, it would make in dividends in fifteen years $495,000. 
 That would also go into American pockets. Thus the total sum com- 
 ing to this country from that ship from all sources in fifteen years 
 would amount approximately to $1,485,000, to secure which the 
 American people, on this basis, would have invested $400,000, which 
 
186 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 works out a dividend in cash and industry, which represents cash in 
 the final analysis, of 25 per cent per year for the people's investment 
 which they have made in the way of subventions or in any other way 
 that they desire to create and operate this ship. 
 
 1 do not believe, gentlemen, that there is any question about the 
 American public being able to aflford such a commercial proposition. 
 Those calculations are based on one ship. If you want to amplify it, 
 multiply it as many times as you like by any number of ships. 
 
 TWO HUNDRED MILLIONS TO SAVE. 
 
 We pay approximately $200,000,000 a year to foreign ship owners 
 for carrying the trade to and from the United States. I am free to 
 say that if I was financing the United States I would feel that I was a 
 culprit if I did not make some attempt to earn that $200,000,000 a year 
 and to distribute it from the coal miner through all the mechanics of 
 the country down through the sailors and officers of the ships and back 
 to the shareholders, to be spent again in building other ships or making 
 other investments in this country. The loss of that $200,000,000 to 
 this country — it is a loss and a direct loss — is a part and parcel of our 
 foreign commerce. We have spent blood and money to develop that 
 foreign commerce. We have developed it. I was sorry to hear Mr. 
 Hill say that some orders are now being canceled. I think at present 
 we are in rather a peculiar stage of the world's commercial transac- 
 tions anyway. I do not think it will always continue. 
 
 But in the main that is what we are after — $200,000,000 per year. 
 The question is, how shall we get it ? We never can get it if we allow 
 the present condition to exist. 1 realize perfectly that the problem 
 of devising ways and means to secure a part of that, and ultimately to 
 secure the major part of it, which we had, is a most difficult problem, 
 a most technical proposition, and it will require great care and great 
 attention to technicalities to work out any sort of plan that will be 
 equitable to the man inland, to the man on the water front, and to 
 the man at sea. 
 
 THE WATS AND MEANS. 
 
 Now, a word as to the ways and means of doing that. The free- 
 ship idea is a very popular one with a great many people. I can not 
 help but think it is a very superficial idea, for the reason that if we go 
 to free ships we shall have to resort to some sort of subvention to 
 make up the difference in the cost of operating the vessels. It will be 
 just as difficult to solve that question as it will be to solve the question 
 of building and operating. If we should go to free ships the result 
 must be that the material and labor men of this country must con- 
 tribute to the material and labor men of foreign countries the total 
 cost of the ship whatever in the discretion of the foreign shipbuilder 
 he may choose to make it. I think, gentlemen, that will be inevitable 
 under the peculiar system that exists in the United States in the matter 
 of tariff policy. 
 
 It certainly is an artificial condition. There is not any question 
 about that. I believe that that artificial condition affords the people of 
 this country an opportunity to live better as a result of getting higher 
 pay, and higher pay is an absolute necessity under the condition of 
 costly production that exists. And so long as the tariff policy con- 
 
HEAEINGS BEPOBE THE MERCHANT MARINE COMMISSION. 187 
 
 tinues in this country, the condition of shipping, left in its present 
 state, is always one of being discriminated against by the balance of 
 the industries of the country. 
 
 SHIPPING ALONE NEGLECTED. 
 
 There is absolutely no doubt that the protective tariff is fostering in 
 its character. It has fostered and is fostering almost every other 
 industry in the country. The shipping industry has absolutely not 
 been fostered at all under that policy, and nothing has been provided 
 to equalize the situation between a man who invests his money in the 
 shipping industry, either as builder or owner, and the man who invests 
 his money in a steel mill or a coal mine or a farm. 
 
 People argue against the horrible idea, as they put it, of ship sub- 
 sidies. They say, "Why should the farmer in the West be called 
 upon to contribute to your ship on the Atlantic or the Pacific coast? " 
 " It is an outrage," they say. I say it is a most equitable proposition. 
 If money is appropriated at Washington to irrigate the farm of the 
 man in the West, which is useless without irrigation, it is just as logical 
 to appropriate money in Washington to irrigate shipyards and ship- 
 owmng, no matter what anybody may say to the contrary. 
 
 I regret exceedingly that such an eminently selfish view is being 
 taken by very enlightened people in the United States on the matter 
 of shipping. A great many of the papers of the country set us forth 
 as subsidy grabbers. They cite us as terrible examples of wanting to 
 get into the Treasury. Gentlemen, I think we are bearing our pro- 
 portion of all the contributions that are made to all other parts of the 
 country — in the river and harbor bill, irrigations bills, and bills for 
 the defenses of the country. And the situation will never be equita- 
 ble until something is done to permit American citizens to build and 
 operate ships. So long as the present condition exists, it is an absolute 
 clean-cut discrimination against one industry in favor of a great many 
 other industries. 
 
 In support of the argument that subsidies should not be paid our 
 opponents say: "We have either to pay them in higher freights or we 
 have to lose them in less duties, or in some other way the people have 
 actually got to contribute to the ships." Without being interested 
 they are most shortsighted in taking such a view of this great matter. 
 There are 1200,000,000 per year of money to be earned. If the people 
 of this country will by any means enable the shipping men of this 
 country to earn a part or all, if possible, of that money, they will not 
 bury it on the shore when they get it. It will immediately go back 
 broadcast through the country to pay for the steel and the wood and 
 all the rest of the material that is used to manufacture these ships. It 
 will go back into the country to pay for the produce that will go to 
 supply these ships, and the farmer in the West will reap just as much 
 benefit out of a dollar earned by an American ship for carrying his 
 grain as he will receive in benefit out of a dollar that the foreigner 
 pays for his grain; and if he is protected to the extent of 10 or 15 
 cents a bushel on grain coming from Canada or any other country we 
 conserve his interest. 
 
 I say, gentlemen, that he must be brought around to recognize the 
 fact that he must join in conserving our interest, and until he does that 
 and is willing to do it, he is a discriqjinator. He wants protection, and 
 
188 HEAKINGS BEFORE THE MEBCHANT MAEINE COMMISSION. 
 
 he is not willing to grant it; and on the whole digest of this subject, if 
 the protective tariil policy is to be pursued in this country, then 1 say, 
 gentlemen, apply it to American ships, and if you can not apply it to 
 American ships abolish it entirely and let us go on our own bottom 
 and see what we can do. It is as fair for one as it is for another. 
 
 Assuming that a free-ship policy should be adopted, what result 
 would we get? If under this policy American owners should decide 
 to have ships, then, instead of paying the price of the vessels to Amer- 
 ican builders and workmen, this American capital will go directly out 
 of America into the pockets of foreign builders and workmen. This 
 policy would inevitably complete the ruin of the shipbuilding industry 
 in America except so far as Americans will pay exorbitant prices for 
 Government ships and vessels for the coastwise trade. Furthermore, 
 it has been well established by evidence submitted to your honorable 
 Commission that the difference between cost of operation of American 
 ships and foreign ships is so great that even though the American were 
 able to buy a ship or ships at as low prices as a foreigner, he could not 
 operate them in competition so long as the present conditions prevail. 
 Therefore, one of two things must be done, if the ship is operated under 
 the American flag, either allow the owner perfect freedom to man and 
 feed the ships with the cheapest men and food schedules, regardless 
 of American rules or customs, or else Government aid must be prgr 
 vided to compensate the difference in cost of operation; otherwise 
 a free-ship policy would be practically useless. To provide Govern- 
 ment aid to compensate for difference in cost of operation without 
 providing Government aid to compensate for first cost would be dis- 
 criminating in favor of the shipowner as against the shipbuilder; and 
 in plan and scope providing operating Government aid would be as 
 complicated and difficult, both from a popular and practical stand- 
 point, as would Government aid both for construction and operation. 
 
 It has been repeatedly said during this hearing that if the free-ship 
 policy were adopted Americans might quickly and on a par with for- 
 eigners procure merchant ships. 1 believe we will be going too fast 
 if we take that for granted. In normal times, when the foreign ship- 
 builder is fairly busy and receiving fair prices from shipowners in 
 his own country, and knowing that American owners can not get a 
 ship built in America unless they pay 30 to 60 per cent more than the 
 foreign builder can afford to build the ship for, I will give the foreign 
 builder credit for being shrewd enough when he is negotiating for an 
 American ship to reach as far into the margin of higher cost as circum- 
 stances justify. To illustrate this possible situation we may recall 
 the prices paid for obsolete foreign ships to be used by our Govern- 
 ment during the Spanish- American war. 
 
 It being obvious that a free-ship policy would inevitably make impos- 
 sible any extension of shipbuilding industry in this country and would 
 be useless without Government aid in operation and might not attain 
 the object of securing ships at a par in first cost with the foreigner, I 
 suggest most careful consideration and digest of the possibilities before 
 serious thought is given to resorting to the free-ship idea. Free ships, 
 under our present policy, do not constitute a logical solution of this 
 question, because if the country ^oes not contribute to the difference 
 
HEARIKGS BEFORE THE MERCHANT MARINE COMMISSION. 189 
 
 in the cost of those ships or to the difference in the cost of operating 
 any ships that we naay have built, then it must contribute the total cost 
 to the foreigner. 
 
 THKEE POSSIBLE METHODS. 
 
 The ways and means to solve this question, it seems to me, must be 
 found either in direct subsidies— a construction bounty, an operating 
 bounty or subsidy, differential duties, or export bounties. Gentlemen, 
 I am always in favor of calling a spade a spade and of dealing with 
 things as directly as we can and not beating the devil around the bush 
 to persuade somebody that we are going to ask him for a dollar for 
 some purpose without it costing him a dollar. Whether our shipping 
 shall be built up under direct subsidies, out of a building bounty, out 
 of an operating subsidy, out of differential duties, or out of export 
 bounties, is all the same, so far as the public goes. 
 
 The public of the United States must, in any event, contribute 
 enough money to make up the difference of cost and operation, no 
 matter how they do it. 
 
 A CONSTRUCTION BOUNTY. 
 
 I am in favor of doing it in the most direct way. The cost of con- 
 struction should be made up by a direct bounty of so much per ton 
 for the construction of the vessel, a Government commission to ascer- 
 tain from year to year what is the average difference between building 
 in a foreign yard and building in an American yard. I suggest a 
 yearly adjustment of that question because I anticipate that if we had 
 a demand for ships we should become more and more practiced in the 
 building, and as we became more and more practiced in building we 
 should be able to build ships cheaper. There is no question of that. 
 
 The evolution of that proposition would be that 1 would anticipate 
 that in a term of twenty or twenty -five years we would be able to pro- 
 duce a ship, so far as the labor is concerned, at a very slight increase 
 over the foreigner. And so the charge to the people would gradually 
 grow less. 
 
 AN EXPORT BOUNTY. 
 
 As to taking care of the difference in operation the most direct 
 method, and I believe the most equitable method, would be export 
 bounties upon goods exported in American bottoms. Looking at the 
 matter from the standpoint of it being necessary to do it, and probably 
 the easiest method of doing it, so far as the public of the United States 
 is concerned, and the temper of the public mind on this question, I 
 believe that differential duties might be the most popular method. I 
 believe it would be a successful method, but it is open to the proba- 
 bility of retaliation, and the problem involved in that is so complicated 
 that it would require a very great deal of hard thinking to arrive at 
 any sensible conclusion. 
 
 The Chairman. Mr. Downey, if you will pardon me, it is manifest 
 that we shall have to sit for another hour this evening and then have a 
 session to-morrow beginning at 10 o'clock and running imtil 12. A 
 large number of gentlemen desire to be heard, and if you could bring 
 your remarks to a close it would afford them an opportunity. 
 
190 HEABINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Mr. Downey. I will say in closing that, from a very close and con- 
 scientious study of the whole shipping question, I am firmly convinced 
 that the people of the United States can aflford a merchant marine, 
 can afford to contribute enough money to make up in some way the 
 difference in the cost of building and operating the vessels. It will be 
 a profitable commercial proposition; it will be a most valuable military 
 acquisition, and if we are to maintain our place in the world toward 
 which the affairs of to-day are aiming, we must have a merchant marine. 
 
 1 did propose to discuss at some length the causes of the differences 
 in the cost of building and operating, but 1 do not think that will be 
 necessary since the matter has been pretty well dealt with in the past. 
 
 Mr. Chairman and gentlemen, I thank you for your courtesy. 
 
 Representative Humphket. Mr. Chairman, I ask that Mr. Downey 
 be permitted to furnish to the secretary any facts and figures that he 
 desires to submit in elaboration of his argument. 
 
 The Chairman. It is understood that that privilege is granted with- 
 out any special order. 
 
 STATEMENT OF PATRICK F. aUINN. 
 
 The Chairman. We always do more business in the Senate when we 
 are under the five-minute rule than under any other rule. I suggest 
 that we proceed for the remainder of the afternoon under the ten- 
 minute i-ule. The Chair understands that Mr. Quinn, representing a 
 committee of the Marine Trades' Council of the city of New York and 
 vicinity, desires to be heard. 
 
 Mr. Quinn appeared before the Commission. 
 
 The Chairman. Mr. Quinn, you may pi-oceed in your own way. 
 
 Mr. Quinn. The Marine Trades' Council of the port of New York 
 and vicinity, representing all of the trades engaged in marine construc- 
 tion, have chosen as a committee the following men to represent the 
 different crafts before your Commission: W. L. Parker, ship and ma- 
 rine blacksmith; F. E. Ruggles, ship joiner; J. M. Ryan, blacksmith's 
 helper; P. F. Quinn, coppersmith; M. J. Downes and David Malloy, 
 boiler makers and iron snipbuilders; and as such committee they, and 
 each of them, for themselves and the trades they represent, desire to 
 submit the following statements respecting the subject-matters of your 
 investigation : 
 
 W. L. Parker, a ship and marine blacksmith since 1889, states that 
 respecting a reference to the differences in the rates of wages or cost 
 of labor as between American yards and foreign yards, it is the rule 
 and customary in all foreign yards to pay blacksmiths by piece- 
 work instead of by the day; and the difference in the rates of pay is 
 more than equalized by the fact that an American blacksmith will turn 
 out more than a sufficient additional amount of work in the same 
 period of time than would equalize the differences in the rates of wages. 
 
 F. E. Ruggles, a ship joiner of twelve years' experience, states, to 
 his certain knowledge, that while it may appear on the surface in fig- 
 ures that the wage scale of the ship joiners in foreign yards is lower 
 than that paid in this country for the same class of labor, the differ- 
 ence is more than equalized in the purchasing power of the amount 
 of the wages paid in the different countries; and the same condition 
 exists to some extent as between the different ports in the United 
 States, for instance, the cost of living is so much higher in the port of 
 
HEARINGS BEFORE THE MEECHAHT MARINE COMMISSION. 191 
 
 New York than it is in Newport News, Chester, Pa., and Philadelphia, 
 that, while the rate of wages paid in the port of New York may appear 
 greater in figures, at the same time the increased cost of living more 
 than equalizes the difference paid for the same class of work in south- 
 ern shipyards. 
 
 J. M. Ryan, a blacksmith's helper in marine construction, of sixteen 
 years' experience, states that the same conditions exist in his class of 
 work as with the blacksmiths. For instance, the custom abroad is 
 to pay the blacksmiths' helpers by the piece instead of by the day, 
 and the amount of work turned out in one day in an American ship- 
 yard by a blacksmith and a blacksmith's helper will equalize any dif- 
 ference that might appear in the wage scale. As a matter of fact, on 
 the basis of piecework, the foreign blacksmith and blacksmith's helper 
 are paid about the same wages for the amount of work produced as is 
 paicf in the American shipyards, where they are paid by the day. 
 
 P. F. Quinn, a coppersmith of twenty years' practical experience in 
 marine construction, states, without fear of contradiction, that the 
 difference in wages as claimed between the mechanics in the United 
 States and the foreign mechanics is more than covered by the amount 
 of work turned out, and we find no complaints as regards the rate of 
 wages and conditions as prevailing from the practical masters; but on 
 investigating the workings of many shipyards, and in taking the sta- 
 tistics as regards the class of work, we find that the inspectors' inspec- 
 tion of the work is a detriment to the business, inasmuch as they are 
 not practical mechanics. 
 
 We find that it is only on Government work that this is being prop- 
 erly carried out, and it is a complaint which comes from all practical 
 men — foremen in charge — that if it was possible to have practical men, 
 the cost of production would be much cheapened and better results 
 would be obtained. The inspection as regards repair work is not 
 looked into sufficiently to compel thorough repair and sound condition 
 of ships leaving this port, and in many instances vessels are permitted to 
 sail when the piping is in an unsafe and unsound condition, in so much 
 as they are permitted to make temporary repairs, such as clamping, 
 etc., and it is only when an absolute necessity requires it, and the 
 inspectors can not overlook it, that the work is permitted to be done 
 in the port of New York. My experience has proven, and it will 
 appear so to any practical constructor, that one of the principal causes 
 of the decline in the shipbuilding industry in American yards is on 
 account of either an absolute lack of inspection of foreign vessels, or 
 careless inspection by impractical and obliging inspectors, who permit 
 ships leaving our port when they really are not in a seaworthy con- 
 dition. It is a universal custom in all of the large ports where foreign 
 vessels require extensive repairs that they are permitted to make 
 unsafe temporally repairs sufficient to take them to their home port, 
 when they should have been required, upon proper investigation, to 
 have all the repairs done in our ports before they should nave been 
 permitted to sail. 
 
 It is a matter of common knowledge in the ship-building industry 
 in the port of New York that from 60 to 70 per cent of all of the 
 profitable work done in the shipyards in this port is repair work, and 
 if our marine law, rules, and regulations would provide a rigid system 
 of inspection of the American and foreign vessels by practical mechan- 
 ics before such vessels are permitted to leave the port, it would have 
 
192 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 the result of increasing the ship-building industry in this port at least 
 50 per cent. We do not think that any vessel should be permitted to 
 leave a port of this country without having been properly inspected 
 and certified to be in a thoroughly seaworthy condition by a practical 
 inspector. 
 
 We earnestly believe that one of the principal detriments tothe 
 shipbuilding industry on the Atlantic coast has been the recent manipu- 
 lation of the shipyards' property by speculators who are not practical 
 constructors and who pretend to know nothing of shipbuilding as a 
 profitable industry. This in itself has done more to bring the industry 
 into bad repute and close the yards to profitable contracts than any 
 other cause. We believe that substantial assistance could be profitably 
 extended by the Government as an inducement to practical investors 
 to promote the shipbuilding industry for carrying American goods 
 under the American flag, due care being taken to eliminate from the 
 benefits of such inducements speculative concerns, if, at the time of 
 making any such provisions, due care and attention be given to the 
 protection of the skilled American mechanic in the shipbuilding trades 
 respecting hours and rates of pay. 
 
 William L. Pakkee, 
 Feedk. E. Rtjggles, 
 H. A. Mallot, 
 John M. Ryan, 
 P. F. QUINN. 
 
 STATEMENT OF E. PLATT STRATTON. 
 
 Mr. Stratton. Mr. Chairman and gentlemen, a distinguished citi- 
 zen and shipping merchant of this country some time since was reported 
 by the press to have stated before the Committee on Commerce of the 
 Senate that "the foreign shipping interest has spies in every branch 
 of the Government where ships are needed, and when one is required 
 they are notified first and get the business." 
 
 Reference is made to this circumstance as showing how important 
 and valuable information alone is to our opponents in trade, and the 
 operation of the telegraphic cable system has largely augmented the 
 
 Possibilities of advance information relating to all matters maritime, 
 he gentleman referred to could doubtless have gone further and given 
 many details of how every interest connected directly or indirectly 
 with the commercial trade of this country is watched and worked by 
 foreign commercial agents and quickly but astutely manipulated for all 
 or any portion of a profit, however small the pecuniary gain may be. 
 Many are the methods resorted to to restrict or harass American 
 commercial interests and at the same time husband whatever is possi- 
 ble in the interests of European shipping; strongly allied with which, 
 and of intimate kindred relation, is foreign marine insurance, which 
 indirectly, yet to a very great extent, dominates every commercial 
 undertaking, for it is to be particularly borne in mind that without a 
 reliably organized and amply capitalized system of national marine 
 insurance the people of this nation can not carry on the commerce or 
 trade of the seas successfully under our flag, which is fully demon- 
 strated in the histories of the insurance exchanges and ship classifica- 
 tion societies of Europe, and particularly of England. 
 
 The destruction of our merchant marine as consummated between 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 193 
 
 1861 and 1866, the changes in ship construction from side wheels to 
 propellers, and the substitution of iron and steel as a shipbuilding 
 material for wood assisted in the transfer of the American carrying 
 trade to foreign flags. 
 
 DISCRIMINATING AGAINST AMERICA. 
 
 This also caused at that time an immediate and more or less forced 
 withdrawal from business of American marine insurance companies, 
 largely due to the Americanized European competition in the form of 
 an influx of agents of foreign insurance companies which immediately 
 to a greater or less extent absorbed the business previously done by 
 the retiring American companies. This retirement was greatly has- 
 tened by the statutes passed by many of the States allowing European 
 companies to do business in any of such States upon the investment 
 with the insurance department of such States of $200,000 of such com- 
 panies' securities, thus permitting such foreign corporations to do 
 business, however great its magnitude, upon our soil, free from the 
 taxation of their capital or assets, while American companies have 
 been and are now compelled to pay taxes on their entire capital and 
 surplus, if any. It therefore needs no argument to demonstrate to 
 this Commission that under such State enactments foreign insurance 
 corporations doing business in this country have the few remaining 
 American companies at a great disadvantage, which is due to State 
 rather than national enactments. 
 
 With this admission of foreign insurance interest, there has also 
 been an attempt to foist upon American shipping interests, gradually, 
 but also persistently, the foreign-ship classification; and these classi- 
 fication societies have representatives whose business duties are to 
 search out the acts and policy of every shipping or shipbuilding 
 enterprise of this country, and to make its commercial purposes and 
 objects known without delay to the insurance exchanges of Europe, 
 and more particularly to London. Ship classification societies, like 
 marine insurance, extend further back than the last century and 
 every prominent maritime nation has its classification and register of 
 shipping. 
 
 History is replete with the arbitrary power and disadvantage prac- 
 ticed under several British registers which have been reorganized 
 under one, in 1834, by a committee of underwriters and shipowners, 
 " to establish a new society for the purpose of obtaining a faithful 
 and accurate classification of the mercantile marine of the United 
 Kingdom and of foreign vessels trading thereto," a purpose which was 
 highly commendable and to which no exception could be taken. But 
 Britain is a small country compared with the United States and the 
 ever-increasing prospect of its commercial importance, was and is 
 too much and too tempting for our European brothers to resist by 
 being limited to the classification of the "British mercantile marine 
 and foreign vessels trading thereto," 
 
 ENFOKCING BRITISH RULES. 
 
 They therefore three years since sent out a committee and attempted 
 the absorption of American classification interests and are now attempt- 
 ing through their representatives to enforce British rules to control 
 
 3a— 04 13 
 
194 HEAEINGS BBFORE THE MEKCHANT MARINE COMMISSION. 
 
 the amalgamation of American ores and the tensile strength of ship- 
 building material formulated in compliance with the best interest of En g- 
 land's ores and her ironmasters to the detriment of American producers 
 of shipbuilding material. They also have so far forgotten the laws of 
 United States Inspection Service as to excessively test to pressures 
 approaching the yield point of boiler material, interfere and actually 
 reset the safety valves of any American steam vessels that have been 
 induced to take their class for the stimulation of insurance with for- 
 eign companies, there being at the present time an insufficient number 
 of American companies to cover insurance on the large types and fleets 
 of American vessels. This condition necessitates the placing of much 
 marine insurance with foreign companies through agents and by direct 
 cable communication, no policy being issued here, but the simple 
 assurance of the agent is given that the risk is covered, the policy 
 being left abroad and is accepted, and that loss, if any, will be paid 
 on honor if not by law. There are a number of reputable insurance 
 agents who make more or less of a specialty of this particular kind of 
 business, known as underground insurance. 
 
 EVADING THE LAW. 
 
 The method resorted to, to avoid liability under State statutes, is to 
 phone or wire the risk to a correspondent in some adjoining State in 
 which there is no statue prohibiting it, he in turn cabling it abroad. 
 In this way criminal liability is avoided in the State where the transac- 
 tion originates. Foreign interests only are so subserved to the pecun- 
 iary detriment of American. 
 
 The report of the Commissioner of Navigation for 1890 relates many 
 facts of discrimination against American shipping by foreign ship- 
 classification societies and foreign insurance exchanges, one of which 
 reads as follows: 
 
 ' ' The Society of Lloyds and the members thereof are the volunteer 
 protectors of the British marine. Leading shipbuilders, managing 
 shipowners, millionaire merchants, and rich underwriters compose the 
 society and association. Many members of Parliament are chosen from 
 the classes composing the Lloyds; and there are always several members 
 of Parliament on the committees which rule the proceedings. The 
 Lloyds have a policy in all they do. Nothing is undertaken that 
 would be calculated to give foreign ships full equality with British. 
 Leniency toward their own and severity toward foreign ships has ever 
 been their motto. Their weapons are partiality and discrimination. 
 Their rule is by associated action. Their power, derived from the 
 amplitude of their transactions, knows no limit in the shape of com- 
 mercial inducement." 
 
 MUST BE AMERICAN INSURANCE. 
 
 The facts and conditions herein referred to will be of little value 
 without a suggestion of a remedy which can be best reached by the 
 National Government sanctioning, under national superintendence, 
 mutual marine and individual liability marine insurance companies 
 within and under the Department of Commerce, all capital so employed 
 to be free from taxation, both National and State. Such a system would 
 place the Government in the same relation to marine insurance that it 
 
HEABINGS BEFOEE THE MEBOHANT MARINE COMMISSION. 195 
 
 now occupies to the national banking system. Such a course would 
 quickly overcome the present disadvantages under which Americans 
 labor, and the advantages given and enjoyed by the foreigner under 
 the legislation of the diflferent States insure to Americans control 
 of their own trade, and under better conditions, and so facilitate the 
 financial management and control of the very matters which the for- 
 eigner now gets his foothold through, to the lasting detriment of all 
 American trade, commerce and interest. This course would also seem 
 germane to the requirements of the Constitution, which gives Congress 
 alone the right to legislate on all matters relating to commerce. 
 
 Senator MALLOEr. What is your occupation, Mr. Stratton? 
 
 Mr. Stratton. I am chief engineer and surveyor for the American 
 Bureau of Shipping, which is to American shipping what Lloyds is to 
 British shipping. 
 
 Senator Malloky. You assert, as I gather from your remarks, that, 
 as a rule, the British insurance companies are not fair in their classifi- 
 cation of American ships ? 
 
 Mr. Stkatton. Yes, sir. 
 
 Senator Mallort. That is a fact, you say? 
 
 Mr. Stratton. 1 believe it to be a fact, and I understand it to be a 
 fact. The facts justify the statement I have made on that subject. 
 
 Senator Mallory. I notice your remedy is that Congress shall take 
 the matter in hand and authorize the incorporation of marine insurance 
 companies, exempting them from taxation? 
 
 Mr. Stratton. Yes, sir. 
 
 Senator Mallory. Exempting them from what taxation ? 
 
 Mr. Stratton. From all taxation of capital and surplus. 
 
 Senator Mallory. State taxation? 
 
 Mr. Stratton. Yes, sir. 
 
 Senator Mallory. You think that is a matter of very great impor- 
 tance? 
 
 Mr. Stratton. The matter of marine insurance bears the same 
 relation 
 
 Senator Mallory. I am speaking now of the matter of e:5:emption 
 from taxation. I understand that the matter of marine insurance is 
 one of very great importance, but is it of very great importance that 
 those societies should be exempted from taxation? Can they not exist 
 without such exemption? In other words, Congress is very slow to 
 discriminate in favor of one person or class of persons or corporations 
 in the matter of taxation. 
 
 Mr. Stratton. I have cited instances where companies had to go 
 out of existence under State laws. State laws allow foreign compa- 
 nies to come here and do business on a deposit of $200,000 of securities, 
 and that is all they are subjected to taxation for, whilst they maintain 
 their capital in other countries free from taxation. They get the 
 business here and pay no tribute. 
 
 Senator Mallory. Can you give an instance of unjust discrimina- 
 tion in the matter of classification by a British insurance company ? 
 
 Mr. Stratton. In my "paper I refer particularly to instances related 
 by the Commissioner of Navigation. 
 
 Senator Mallory. That is all general. 
 
 Mr. Stratton. The Commissioner of Navigation in his report refers 
 to a great number of instances. 
 
 Senator Malloky. But no specific instance is mentioned. 
 
196 HEABINGS BEFORE THE MEBOHANT MARINE COMMISSION. 
 
 Mr. Steatton. No, sir. 
 
 Senator Mallory. I have heard the complaint made very often, 
 and I know if it is true it is a very important matter in the event that 
 we shall ever have a merchant marine. But I should like to have 
 some more positive proof of it than mere generalization. I thought, 
 perhaps, you might be able to give me an instance. 
 
 Mr. Steatton. At the moment I am not able to cite an instance. 
 
 STATEMENT OF JOHN FRANKLIN CROWELL. 
 
 The Chaieman. Mr. Crowell, will you please state your occupation? 
 
 Mr. Ceowell. I am internal commerce expert of the Bureau of 
 Statistics, Department of Commerce and Labor, and also lecturer on 
 international trade at Columbian University, Washington, D. C. 
 
 The Chaieman. Are you familiar with the scope of this inquiry? 
 
 Mr. Ceowell. Yes, sir. 
 
 The Chaieman. We shall be pleased to hear from you. 
 
 Mr. Crowell. I wish to call attention to the general conditions 
 which apply to ocean commerce at the present time, and in the tirst 
 place to the rapid increase of tonnage. The increase during the last 
 three years has been from one-half to two million and three-quarters 
 registered tons per annum. 
 
 In the same time and for a longer period likewise ocean rates have 
 been decreasing rapidly, and have in a number of cases reached points 
 which are below the usual level of returns on investments in shipping. 
 With these conditions at hand, together with the fact that nearly all, or 
 practically all, of the trade routes are preempted by vessel lines sailing 
 under flags of other nations, it has seemed to me that the question of 
 the advisability of any attempt to increase the tonnage as a part of the 
 policy of the American Government was well worth considering. 
 
 PLANS OBJECTED TO. 
 
 The plans proposed here are such as would naturally increase the 
 tonnage. The first policy is that of subsidies. Tlie great difficulty 
 with that is that while it would increase the tonnage we are never 
 quite sure that the encouragement would go to the spot and bring 
 about the result which is desired. In other words, it has never in all 
 the experience of maritime nations turned out satisfactorily. 
 
 In the second place, the policy which is advocated under the form 
 of discriminative duties has in it the possibilities of injuring commerce 
 more than helping it. It would increase our tonnage, no doubt, but 
 at the same time it would reduce the rates and make the contest for 
 ocean routes all the more severe, and if the Government proposed to 
 follow up the contest and stand by its own merchant marine loyally, 
 as it would, until it grew into greatness, we do not know how long 
 the struggle would last or what the entailment upon the Treasury 
 would be. 
 
 These two considerations, in my mind, lead to the question whether 
 we as a nation are prepared, under existing conditions of supply of 
 steel, to build a merchant . marine with our own equipment as ship- 
 builders and man it with our own equipment as Americans. 
 
 If there is one conclusion which is inevitable and certain, if there is 
 one demonstration on which no more light is needed, it is that the 
 American shipbuilder can not build ships which can be run profitably 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 197 
 
 on the ocean under existing laws. He has shown that clearly this 
 afternoon ; and if that be true, there are only two ways open for an}' 
 development of a maritime policy. One is to make up the difference, 
 and the other is to go into the world's markets and buy such ships as 
 we want to carry our products to and our purchases from the nations 
 of the world. We either must have free ships, or we must make up 
 the difference between what our own shipbuilders regard as the nec- 
 essary cost and what ships may be bought for in foreign countries and 
 operated under foreign flags. 
 
 ONLY BEGINNERS. 
 
 The difficulty in the one case — that of making up the difference — is 
 that we are, with all possible respect to what has been done by ship- 
 builders in America, experimenting as yet. We are beginners in the 
 business of building ships that can be profitably operated in the ocean 
 trade. Hence construction is excessively expensive. We are begin- 
 ners in the business of running ships. We do not know the business 
 as Germany knows it and as England knows it. 
 
 It would seem to me to be a much more practicable way to regard 
 the business of opening ocean lines as a mere extension of our railway 
 'ines and to provide that such ships should be admitted free as were 
 necessary to gain command of the leading trade lines between our own 
 commercial bases and those of the world's markets. It may be neces- 
 sary to do that for a period of ten or fifteen years. Meanwhile we 
 shall learn how to man- and operate our ships, and we shall learn how 
 to build ships at reduced cost, because we are in a position, as a steel- 
 manufacturing nation, to do it. But if we take the other plan no one 
 can give us any assurance that there will be a merchant marine at the 
 end of fiiteen years. 
 
 FREE SHIPS FOK A TIME. 
 
 If those who have freight accumulated — the transportation interest 
 and the shipping interest— can go into the world's markets and buy 
 ships to do their work and carry their goods to markets, new or old, 
 then the work will be done. 
 
 Now, much has been said about the necessity of extending the advan- 
 tages of protection to ships on the ocean. Protection is a domestic 
 measure, not a foreign measure, and shipping on the ocean must com- 
 pete just as grain must compete in the world's markets. Exactly so 
 must shipping be looked at. We could never expect to give it any 
 sort of protection which would guarantee its growth, and in many cases 
 the more protection that has been given to shipping, as in the case of 
 France, the more liberal attempts have always resulted in a disappoint- 
 ment, and eventually in the repeal of the measure which was intended 
 to develop the merchant marine. I submit to you, therefore, that the 
 policy of free ships for a limited period is one which has on its side a 
 very large degree of reasonable consideration as a national policy. 
 
 FREIGHT CARRIERS AND MAIL SHIPS. 
 
 The question of developing fast mail ships is an entirely different 
 one. If we divide the question of developing a merchant marine into 
 two divisions, one the development of freight-carrying lines and the 
 other the development of rapid mail ships, with the end in view of 
 
198 HEAEINGS BKFOBE THE MERCHANT MAKINE COMMISSION. 
 
 using them as transports in time of war, we shall accomplish the com- 
 mercial purpose in the one case, and we shall accomplish the other 
 purpose by some system of subvention to which it particularly applies. 
 It seems to me it is worth while considering whether it is not best to 
 divide the question in two and keep each part by itself. If so, it 
 seems to me that the commercial interests of the United States are 
 prepared to take hold of the question on such a basis as will give them 
 free access to the instruments of commerce on such terms as will enable 
 them to earn a return on their investment and leave the question of 
 direct subsidy for freight lines entirely out of account. 
 
 I do not attach much importance to the diiEculty of operating ships 
 at a cost which will enable them to pay returns. The labor market of 
 the world is wide, and I see no reason why we should have aliens in 
 our public service, aliens in our municii)al enterprises, aliens every- 
 where working, and forbid aliens going into the crew of a ship. Let 
 us have American officers — every one of them — so that those foreigners 
 who are in the crew may aspire to rise to such position; but there is 
 no gi'ound really for the assumption that it is a dangerous policy to 
 man an American ship under the American flag with foreign labor. 
 Nearly all of it is foreign anyhow, and it has been introduced to our 
 national life and it has become part of it; and such will gradually be 
 the outcome of very much of the employment that is given to sailors 
 on American vessels even though they may be aliens at the time. 
 
 THE COST OF OPERATION. 
 
 Representative Minor. Do you advocate the purchase of ships 
 abroad free for a limited time? 
 
 Mr. Crowell. Yes; wherever you can get them. 
 
 Representative Minor. What are we to do with them? 
 
 Mr. Crowell. Sail them. 
 
 Representative Minor. It is the consensus of opinion, and it is the 
 testimony, that it costs from 33 to 50 per cent more to operate 
 under the American flag than under a foreign flag. You must buy 
 you ship abroad and keep her under a foreign flag and engage in the 
 foreign trade and have the advantages of She reduced wages which 
 they have. 
 
 Mr. Crowell. I claim that American experience under existing 
 laws has not been ample enough to demonstrate that. The cases which 
 have been cited here have been exceptional and not comprehensive 
 enough to prove the case 
 
 Representative Minor. What more do you want than that all the 
 vessel owners in New York, so far as we have heard from them, agree 
 upon that proposition ? Where can you get any better authority ? 
 
 Mr. Crowell. I think there would be no difficulty if you had the 
 ships you wanted to carry your goods. 
 
 Representative Minor. What I want to get out of you is, what is 
 the advantage of purchasing a foreign ship and putting her under our 
 flag, when she can be operated under the foreign flag in the same 
 trade at less cost? 
 
 Mr. Crowell. You would learn the business. We have not any 
 ships to do anything with now. 
 
 Representative Minor. And keep it under the foreign flag? 
 
 Mr. Crowell. That is not necessary. 
 
HEAEIKGS BEFOEE THE MEECHANT MARINE COMMISSION. 199 
 
 Representative Minor. Do not close up our shipyards and throw 
 labor out of employment, when you have not gained anything by it. 
 
 Mr. Crowell. My position is that the shipyards have not been able 
 to furnish us with ships which can be run with any profitable return. 
 
 BUILDING ON A SMALL SCALE. 
 
 The Chairman. Do you mean by that observation to say that our 
 American mechanics are not equal to building as good vessels as the 
 Englishmen? 
 
 Mr. Crowell. No. They are capable, but our shipbuilding has 
 always been done on a verj"^ small scale. 
 
 The Chairman. On a scale equal to the demand ? 
 
 Mr. Crowell. It is a very small scale. The shipbuilders say over 
 and over again that if they had a large number of vessels to build they 
 could build them at much lower rates. 
 
 The Chairman. When I asked Admiral Bowles what would become 
 of American labor if we had free ships he said it was too horrible to 
 talk about, and j^et you advocate it. 
 
 Mr. Crowell. That is a prediction. 1 do not think it would wipe 
 our shipyards out of existence, because we have a verj^ large coast- 
 wise and lake tonnage, and a great deal of repairing to do. There is 
 no proof that it would wipe them out. 
 
 Representative Minor. The question is, if it is a good plan to buy 
 foreign ships for the foreign trade, why not put them into the coast- 
 wise business? 
 
 Mr. Crowell. We have the ships there. 
 
 Representative Minor. We can put them in cheaper if we can buy 
 them elsewhere. 
 
 Mr. Crowell. We have developed our coastwise tonnage. 
 
 Representative Minor. Not by purchasing foreign ships. 
 
 The Chairman. We have developed our coastwise trade by giving 
 them one form of subsidy — exclusive control. 
 
 Mr. Crowell. Our laws do not extend beyond the three-mile limit, 
 and you can not control it. We have that alternative before us. 1 
 am not advocating one or the other. The experience of the past has 
 proven that experimentation by subsidy is wasteful, and discrimi- 
 nating duties would destroy trade. The other policy is entitled to 
 experiment, and if a limited purchase of foreign ships were resorted 
 to, in my mind we would make a start at any rate, and making a start 
 would create a demand for ships, and the shipbuilder would gradually 
 reach a point where he could build at a cost at which he could compete 
 with foreigners. They build on the Clyde with steel that costs them 
 less at the present time, but at times we make steel that costs less than 
 the British steel. 
 
 Senator Mallort. I understood you to say that the direct subsidy 
 which France gives to her merchant marine has resulted in no benefit 
 to the merchant marine of France. Am I right? 
 
 Mr. Crowell. Sofar as the sailing ship is concerned, it has increased 
 the number to some extent, but France has got very little good out 
 of it. 
 
 Senator Mallort. Do you remember how long it has been in opera- 
 tion? 
 
200 HEABINGS BEFOBE THE MEBOflANT MABINE COMMISSION. 
 
 Mr. Ceowell. No, I am not prepared to give the dates. I know at 
 times -within the last few years French competition has cut the ocean 
 rate on grain from the Pacific coast down to half what it was two or 
 three years ago. 
 
 DO AMEKIOANS KNOW HOW? 
 
 Senator Lodge. I should like to know what you mean by saying we 
 do not know how to build or run ships. 
 
 Mr. Ceowell. I beg pardon ? 
 
 Senator Lodge. You said we did not know how to build or operate 
 ships. 
 
 Mr. Ceowell. I mean we have never succeeded in building up an 
 ocean merchant marine. 
 
 Senator Lodge. Is that because the ships were not well built? 
 
 Mr. Ceowell. No, sir. 
 
 Senator Lodge. Do we not build as fine a type as other nations do? 
 
 Mr. Ceowell. We build a type of ship, but a type of ship is not a 
 merchant marine. We have built battle ships, and we have built 
 coastwise ships, and ships for the Great Lakes. 1 do not mean to be 
 disrespectful at all or to discredit 
 
 Senator Lodge. What is the matter with the four American liners? 
 
 Mr. Ceowell. They are all right, but they are exceptions. 
 
 Senator Lodge. We built them. 
 
 Mr. Ceowell. That is very true. 
 
 Senator Lodge. I am speaking now about your statement that we 
 do not know how to build a ship. 
 
 Mr. Ceowell. We do not know how to build a ship — and this is a 
 part of the statement — at such a cost as will enable anyone to run it 
 profitably on the ocean in competition with foreigners. 
 
 Senator Lodge. The cost at which you build a vessel is not a ques- 
 tion of knowledge. 
 
 Mr. Ceowell. It is a question of knowledge to this extent. 
 
 Senator Lodge. How about yachts — racing yachts? 
 
 Mr. Ceowell. I understand, but that is a local matter, a domestic 
 matter. Those are exceptions. 
 
 Senator Lodge. I thought we had had some international races? 
 
 Mr. Ceowell. That is very true, but a yacht is not a merchant 
 marine. 
 
 Senator Lodge. You say we do not know how to run ships ? 
 
 Mr. Ceowell. We have not succeeded in running ships profitably. 
 
 Senator Lodge. Your proposition is that because our costs are so 
 much higher, we do not know how to build and sail ships. The two 
 things have no relation whatever to each other. 
 
 Mr. Ceowell. Our costs are high, and they are exceptionally high. 
 I dare say we have not succeeded in building ships because we have 
 not had enough of them to build. 
 
 WHY NOT NOW? 
 
 Senator Maetin. If a man living in New York chose to do so, could 
 he not go to England and buy a snip and put her under the English 
 flag and operate her ? 
 
 Mr. Ceowell. Yes, sir; certainly. 
 
 Senator Maetin. If he does not choose to do it when that privilege 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 201 
 
 is open to him, why do you think he would do it if the ship was enti- 
 tled to American register, which would simply increase the cost of 
 running it? 
 
 Mr. Crowell. Simply because 1 think he wants the protection of 
 the American flag and would rather have his ship under the American 
 flag, if he is an American. 
 
 Senator Martin. A man is not in any serious danger when he is 
 under British protection. 
 
 Mr. Ceoweltl. I may have used language which is open to criticism. 
 
 Senator Martin. I did not mean to make any criticism. I want the 
 information. I do not know why it is, when a citizen of New York 
 can go to England and buy a ship where the price is low and can 
 operate it under the English flag, under which flag the cost of opera- 
 tion is less than under our flag, mat he does not do business under the 
 English flag. He does not seem to be doing it. 
 
 Mr. Croweix. Some of them are. 
 
 Senator Mallort. A good many of them are doing it. 
 
 Senator Martin. I did not know there was any considerable num- 
 ber of Americans engaged in ocean traffic under the English flag. I 
 doubt it. 
 
 Senator Mallort. A good many vessels owned by American cor- 
 porations and sailing under the English flag go out of my port. 
 
 Senator Martin. That practice may exist. 
 
 Mr. Crowell. If I may occupy a little more time, Senator, I should 
 like to say 
 
 Senator Martin. If you will excuse me, since I made the inquiry 
 I have learned that there are a great many ships really owned by 
 American citizens which are operated under the English flag. I did 
 not know it. 
 
 Mr. Crowell. I understand that in the report of the Commissioner 
 of Navigation you will find 64 vessels of 336,195 tons at least men- 
 tioned as being owned by American citizens and operated under for- 
 eign flags in 1900. They mav not all be under the British flag.** 
 
 The point is simply this. While we have reached a stage where we 
 have manufactured ships for our own use in the coastwise commerce, 
 in lake and river commerce, and on ocean coasts, yet if we want a 
 merchant marine we shall either have to pay the present cost of mak- 
 ing it in our own yards and the increased cost of operating it, or we 
 have the alternative of affording the purchasers of foreign ships the 
 liberty of operating and sailing them under the American flag, with a 
 view of building up, making a start in a merchant marine, and after 
 that limited period make ample provision for the transition to the 
 time when, understanding the conditions of maritime trade more thor- 
 oughly, we shall be able to do for ourselves what we are not able to do 
 now. If that proposition is reasonable, 1 am content to leave it to 
 your consideration. 
 
 This is practically all 1 have to say. I wish to leave with you a 
 paper so that my statements may come to you in such form that they 
 will be given consideration. 
 
 In concluding, let me say again that if I was unfortunate enough to 
 imply any sli^t or say anything that was undeserved toward our 
 builders of smps, it was from the standpoint of economic difficulty 
 
 a Report of 1900, pp. 171-172. 
 
202 HEARINGS BEFOBE THE MEBOHANT MARINE COMMISSION, 
 
 and impossibility of accomplishing what we have been trying to 
 accomplish during the last twenty-five or thirty years. 
 The paper referred to by Mr. Crowell is as follows: 
 The general situation in ocean shipping is one of increasing tonnage, 
 decreasing freight rates, with tendencies to consolidation, to the 
 increased use of rail differentials to favor exporters, and to the pre- 
 occupation of all the leading ocean routes by shipping lines operating 
 under foreign flags. 
 
 There is no difficulty in establishing the fact of rapidly increasing 
 shipping capacity in the world's maritime business. Within ten years 
 the world's tonnage has increased 50 per cent. 
 
 World's merchant marine, 189B and 1900-1903. 
 
 Years. 
 
 Steam. 
 
 Sail. 
 
 Total. 
 
 1895 
 
 Gross tons. 
 16,887,971 
 22,369,358 
 24,008,883 
 25,859,987 
 27,183,365 
 
 Net ions. 
 8,219,661 
 6,674,370 
 6,591,627 
 6,577,776 
 6,469,766 
 
 Tons. 
 25,107,632 
 29,043,728 
 30,600,610 
 32,437,763 
 33,643,131 
 
 1900 
 
 1901 
 
 1902 
 
 1903 
 
 
 From these figures it will be seen that during the last four years the 
 total tonnage has increased at the rate of about one-and-a-half million 
 tons per annum. The London Statist puts the output for 1903 at 
 2,800,000 tons. Sailing tonnage since 1895 decreased over one-fifth, 
 or 21 per cent, while steam tonnage increased 60 per cent. Beginning 
 with 1900, sailing tonnage has not only not increased in the four years 
 intervening, but has perceptibly decreased. At best, under existing 
 conditions, sailing tonnage is to be regarded as a stationary factor, and 
 steam tonnage increases at the rate of 1,500,000 to more than 2,000,000 
 tons per annum. During each of the years 1900, 1901, and 1902 over 
 2,000,000 tons of steam shipping were added annually to the world's 
 tonnage, as reported by Lloyds. 
 
 A second feature of the maritime situation is the preemption of all 
 the leading ocean routes by strong shipping companies of other than 
 American nationality. This has added to the intensity of competition 
 until agreements between competing lines have put limits to rivalry. 
 
 Ocean freight rates have been lowered wherever competition has been 
 active, but wherever combination has been practicable rates have been 
 maintained. Competition has been most active in carrying our grain 
 to Europe. During the last three years the rate from Boston to Liv- 
 erpool on grain has averaged between a maximum of 4 cents and a 
 minimum of If cents per bushel, the ruling rate being 3 cents. In 
 1900 this rate averaged 5i cents for the entire year. In 1902 and in 
 1903 the average rate was almost exactly half that of 1900, or If cents 
 per bushel. 
 
 The above statement applies to steam tonnage, but on sailing ton- 
 nage the tendency is similar if not more acute in its effects. On the 
 Pacific coast sailing freights have been cut in two within the last two 
 years. In 1901 the average rate per ton of grain, San Francisco to 
 the United Kingdom, was 38s. 9d. , but for 1903 it was 17s. 3d. In 
 fact, the lowest rate in 1903 was less than one-third of the lowest rate 
 of 1901. The French subsidy largely accounts for this reduction in 
 rates. 
 
HEAEINGS BEFORE THE MEECHANT MARINE COMMISSION. 203 
 
 On cotton, from New Orleans to Europe, rates have fallen, but not 
 so rapidly in recent years. In 1898 the freight to Liverpool was 40 
 cents, and 35 cents per 100 pounds in 1903 — a reduction of 12i per 
 cent. To Hamburg the rate fell from 50 cents to 33 cents, or M per 
 cent, in six years. 
 
 Through freight rates are made up of railway rates plus ocean 
 rates, and enter largely into ocean competition. German}' and Great 
 Britain compete on the ocean for African and Levantine trade. But 
 the German railways give a much lower railway rate than the British 
 roads do, from the works to the seaboard. 
 
 Government being the owner of railroads in Germany reduces the 
 rate on manufactured exports to a point far below that on the same or 
 similar articles for equal distances in Great Britain. 
 
 The following diagram, though applying only to wheat freights 
 from different ports of the world to Great Britain or the Continent, 
 still serves to illustrate the general course of ocean freights since 
 1882 — a period of twenty years. 
 
 THE PROBLEM OF GETTING AND MAINTAINING OCEAN-FREIGHT LINES. 
 
 All that has been said thus far is presented to show what the eco- 
 nomic conditions are which any maritime policy will have to face. 
 Summed up in a few words, it amounts to this, that the rapid increase 
 in supply of tonnage and the relative decrease. in demand, as shown bj' 
 decline of ocean freights, lead to the inevitable conclusion that there 
 is already an adequate supply, if not an oversupply, of tonnage to do 
 the world's carrying trade.® What we want first is to get and keep our 
 share of the ocean-freight shipping under our flag. This is first, last, 
 and always a commercial problem. The problem of getting fast-mail 
 lines and auxiliary cruisers is an entirely different one and requires a 
 somewhat different solution. 
 
 There are three distinct policies proposed — (1) The paying of gov- 
 ernmental subsidies; (2) discriminating duties in favor of American 
 bottoms; (3) free admdssion of freight ships to American registry — 
 for the purpose of establishing regular lines between the leading com- 
 mercial bases in the United States and the distributive centers of the 
 world market. The promotion by governmental grant of a smaller 
 number of intercontinental postal routes of fast mail and passenger 
 ships to meet the requirement of naval auxiliaries. 
 
 In short, the problem to be solved has to be cut in two. The first 
 is a problem of commercial development, while the second is primarily 
 a problem of national defense. The two can not be solved success- 
 fully by any blanket solution yet proposed. 
 
 1. The Subsidy Policy. 
 
 On this policy modern commercial nations have had the largest 
 experience, and no one can say that the system as practiced by any 
 single nation has proven satisfactory. It has been tried and found 
 wanting. We should be going right in the face of light if we adopted 
 this plan of restoring our merchant marine. 
 
 oin 1901 out of 89 leading steamship lines 33 lines, or 37 per cent, paid no divi- 
 dends. (Report Commissioner of Navigation, 1902, pp. 78-80.) 
 
204 HEAJBING8 BEFOBE TflE MEBCHAJfT MAElNE COMMISSION'. 
 
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HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 205 
 
 The objection to this policy is (a) that it exposes itself to the risk of 
 favoritism, (5) that no system of application has yet been found by 
 which the scheme can be equitably administered, and (c) it has failed 
 in most cases to produce the desired result, because it undermines 
 independent enterprise by its very dependence upon the public treas- 
 iir}'. Subsidized shipping is always wanting more help. You have 
 to pay to all the cost of the least efficient. Subventions have succeeded 
 as a rule only when they were incidental rather than essential features 
 of a policy for developing a national merchant marine. In the case of 
 Germany, it is the economic necessity for foreign markets, not subven- 
 tions, that keeps her shipping afloat. With them it is a life struggle. 
 
 2. Discriminating Duties. 
 
 Historically, this is the oldest of international shipping policies. It 
 had its rise and progress during periods when commerce was conceived 
 to be the adjunct of war. Under modern ideas, and according to the 
 modern theories of national life and development, international com- 
 merce is regarded as being mutually advantageous. Good will is a 
 far more important asset of national well-being and international pros- 
 perity than in the time when Cromwell swept the Dutch from the 
 seas. A return to direct discriminatory duties would be reactionary. 
 Their history will show that it did not pay, because they were wasteful 
 as a feature of economic policy. As a policy it has either the defects 
 of provoking retaliation, and thus defeating its purpose, or of not 
 being adequate for the purpose. If such duties were made to apply to 
 all imports arriving in non-American vessels, American shipping would 
 be relieved of a tax in one place to have another imposed upon it else- 
 where, assuming that retaliatory measure would follow such a duty on 
 foreign vessels. 
 
 Furthermore, there is no evidence that, under existing conditions, a 
 discriminatory duty of 10 per cent, for example, would result in restor- 
 ing our merchant fleets to the seas. A merchant marine is a competi- 
 tive machine, and why should English and German lines not combine 
 to crush out competition? We have trade treaties the renunciation of 
 which would inevitably follow the imposition of a discriminatory duty. 
 We should thus unsettle our commercial relations with every leading 
 nation, and subject ourselves to a process of commercial isolation such 
 as France is suffering from to-day. There is possibly no more unfav- 
 orable tendency in international trade than that one by which tariff 
 schedules are substituted for permanent treaties. It acts on internei- 
 tional trade similarly to the way uncertain freight rates act on domestic 
 commerce — the trade does not know where it is to come out. 
 
 The indirect discriminatory plan would have the effect of transfer- 
 ring capital from British, German, and French to neutral tonnage — 
 that is, to the tonnage of neutral nations, provided the navigation and 
 registration laws of these nations did not prevent it. The probability 
 is that strong nations like Great Britain and Germany would make 
 treaties opening to investment the merchant marine of other nations 
 without shipping. 
 
 Whoever relies on business with no-ship nations to build up an 
 American merchant marine does not realize how quickly surplus 
 capital and managing ability can be mobilized wherever and whenever 
 an opportunity for unusual profit presents itself. 
 
206 HEAKINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 FREE FREIGHT SHIPS AND FAST MAIL LINES. 
 
 This policy recognizes these two problems as standing on different 
 grounds of national necessity. 
 
 Free freight ships means that the base lines in maritime trade should 
 be equipped with the best class of freighters, with passenger and mail 
 facilities as secondary considerations. Vessels of the type of the 8ax- 
 onia on the Cunard line now running between Boston and Liverpool 
 serve to illustrate what is meant. It favors transportation and ship- 
 ping interests buying such vessels in the open market to begin with, 
 until we get our maritime base lines established. 
 
 There are ten great seaports in the United States, each one of which 
 should have direct connection with the primary commercial ports of 
 Europe, Africa, Asia, and Australasia. 
 
 This policy would apply only to vessels of such a type as are suitable 
 for largest net earning power as freighters, with secondary considera- 
 tion for passenger service and mail facilities. The postal feature should 
 be considered by itself, and the question of auxiliary cruisers be made 
 a problem wholly on its own merits. But if we want ocean carrying 
 capacity for putting our great seaports into direct connection with the 
 leading distributing markets of the world, give the great railway sys- 
 tems, whose commercial bases are on the Atlantic, on the Gulf, and on 
 the Pacijfic seaboards, the freedom to buy ships, to carry their accumu- 
 lated freight, wherever they are for sale and whenever they need them, 
 giving these ships the legal protection of the American flag. Later, 
 when we know how to keep the seas, how to build ships at a more 
 nearly equal cost, we may draw the lines tighter and require gradually 
 that the ships we admit to registry shall be of our own make. 
 
 NO AMERICAN LABOR. 
 
 The objection to this policy is that if it should result in creating a 
 national merchant marine it would be accomplished without employing 
 American labor and materials in its construction. It does not follow 
 at all that American shipbuilding would be injured by this initial 
 expedient. The remedy seems heroic, but a national merchant marine 
 has to compete in the world market at a rate of returns much below 
 that of domestic investment. You can not directly bring it under the 
 protection which domestic industry and commerce enjoy; neither 
 should you force it to be handicapped at the start by being capitalized 
 on an unduly high basis of costs, either in construction or operation. 
 Germany recognized this necessity in the beginning of the develop- 
 ment of her merchant marine, thus getting command of trade routes 
 at once, and soon creating a demand for more ships which were prac- 
 tically all made in her own yards. 
 
 If the problem of providing maritime tonnage is not to be solved 
 without public encouragement, there is another line of procedure by 
 which semi-public enterprises have been placed on a self-sustaining 
 basis. The policy of guaranteeing interest on the entire cost, or a 
 large percentage of the cost of construction might be resorted to, to 
 encourage ship-owning and operation, much as the Canadian Govern- 
 ment has done for the construction of its transcontinental railways. 
 Eleven German steamship lines, with nearly 500 vessels in 1902, had a 
 
HEARINGS BEFOBB THE MEKCHAJST MARINE COMMISSION. 207 
 
 total capitalization of $82,000,000 in round numbers, including both 
 stock and bonds. Four per cent interest on this would be $.3,280,000 
 per annum, and 5 per cent, $4,100,000. If this were guaranteed for 
 twenty years the total outlay would be — say $100,000,000. This 
 would go far toward covering the risk of inaugurating a merchant 
 marine under our flag; and the risk of inaugurating a merchant 
 marine is the crux of the whole problem. The advantage over the 
 subsidy plan or the discriminating-duty plan would be its avoidance 
 of complicated relations with builders and owners in one case and of 
 avoiding trade wars in the other. Of course proper safeguards would 
 have to be provided to insure against ill-advised construction, as well 
 as of indifferent operation. 
 
 STATEMENT OF J. LINNAMANN. 
 
 J. Linnamann appeared before the Commission. 
 
 The Chaieman. Are you a sailor; and if so, how long have you been 
 a sailor ? 
 
 Mr. Linnamann. For the last thirty-two years. 
 
 The Chairman. Have you sailed on American ships exclusively ? 
 
 Mr. Linnamann. I have sailed on Norwegian, Swedish, and German 
 as well as American ships. 
 
 The Chaieman. Are you now a seaman? 
 
 Mr. Linnamann. Yes, sir. 
 
 The Chairman. On what vessel are you? 
 
 Mr. Linnamann. I am going on a vessel to-morrow morning. 
 
 The Chairman. Tell the Commission in a very few words what you 
 know about the conditions as to the comfort, wages, and treatment of 
 saUors on ships of the various nationalities. 
 
 AMERICAN SHIPS THE BEST. 
 
 Mr. Linnamann. American ships are better than the English, Ger- 
 man, and Norwegian, and also in food and treatment and the fore- 
 castle. Our American sailors, when they go aboard in the morning, 
 want their beefsteak for breakfast and their hot rolls in the morning 
 for breakfast, and I approve that. Take an English vessel — they 
 get their boot-leg coffee and Liverpool biscuit. The Germans take in 
 the morning a little schnapps for breakfast and a cup of black coffee 
 and rye bread with it. That is their breakfast. 
 
 Furthermore, sir, as to their treatment in the forecastle, every one 
 has his own apartment — the starboard watch as well as the port watch. 
 They keep separate from one another. 
 
 Senator Mallort, On what ships? 
 
 Mr. Linnamann. The American ships. 
 
 Representative Mince. How about the others? 
 
 Mr. Linnamann. They have the forecastle hid under the chains 
 and anchors, etc. , and all in one. 
 
 Representative Minoe. How about the wages on board American 
 ships as compared with foreign ships? 
 
208 HEAEING8 BEFORE THE MEKCHANT MARINE COMMISSION. 
 AMERICAN WAGES HIGHEST. 
 
 Mr. LiNNAMANN. The American wages are many per cent higher 
 than the Norwegian or the German even. We are paying our crew 
 130 per month where they pay only $16 or $16 per month. 
 
 The Chairman. Were you born in this country? 
 
 Mr. LiNNAMANN. Ycs, sir; right here in New York. 
 
 Senator Penrose. What are you on a vessel? 
 
 Mr. LiNNAMANN. A stcward. 
 
 The Chairman. A gentleman testified yesterday that the conditions 
 on Norwegian ships, so far as comfort is concerned, were equal to- 
 those on an American ship. 
 
 Mr. LiNNAMANN. The Norwegians have one point. They are a little 
 higher on. They get coffee in the afternoon at 3 o'clock. They have 
 a half hour to smoke. That is the only benefit they have. As far as 
 the food is concerned, it is equal to the German or English. 
 
 The Chairman. But inferior to that on the American vessel? 
 
 Mr. LiNNAMANN. Yes, sir. 
 
 Senator Mallort. How many meals are served on board a Nor- 
 wegian vessel? 
 
 Mr. LiNNAMANN. Three meals a day, and in the afternoon the coffee. 
 
 Representative Minor. All things considered, which ship would 
 you rather sail on, an American or a foreign ship? 
 
 Mr. LiNNAMANN. An American ship every time. There is better 
 treatment, etc. 
 
 Representative Minor. How about the wages? 
 
 Mr. LiNNAMANN. The wages are always higher — many per cent 
 higher. 
 
 A SMALL, ADVANCE DESIRABLE. 
 
 There is one thing, Mr. Chairman. The seaman ought to have about 
 $5, on the coast, not offshore, when he leaves the port. One half of 
 the poor fellows have not the means to buy tobacco or beds. They 
 have to go aboard the vessel as they stand. They have not a bed to 
 lay on or a pipe of tobacco to smoke, and I consider that they ought 
 to have $5 to get necessary things on the coast, not in deep-water ships. 
 
 Senator Mallory. They used to have that? 
 
 Mr. LiNNAMANN. Yes, sir. 
 
 Senator Mallory. You think it was a mistake to take it away? 
 
 Mr. LiNNAMANN. Yes, sir; a great mistake. 
 
 Senator Mallory. I think so, too. 
 
 Mr. LiNNAMANN. Here is a man going aboard in the cold, in the 
 winter time, when there is snow or ice. He has no mittens, no boots, 
 no bed to lie on. As a consequence he has to lie on a board. There 
 they lie, right on a bare board. 
 
 Senator Mallory. What is the tonnage of the vessel you are going 
 on? 
 
 Mr. LiNNAMANN. Three hundred and sixty tons. 
 
 Senator Mallory. A schooner? 
 
 Mr. LiNNAMANN. Ycs, sir. 
 
 Senator Mallory. How many men have you aboard? 
 
 Mr. LiNNAMANN. Four — eight all told. 
 
 Senator Mallory. Have you a donkey engine? 
 
 Mr. LiNNAMANN. Yes, sir. 
 
HEABINGS BEFORE THE MEEOHANT MARINE COMMISSION. 209 
 
 FORECASTLE SPACE ADEQUATE. 
 
 Representative Minor. How about the space allotted for each sea- 
 man? Do you think it is sufficient? 
 
 Mr. LiNNAMANN. It is plenty of room for any man. They play 
 cards and have lots of room to walk about. 
 
 Senator Mallort. Is it a deck house in which you live? 
 
 Mr. LiNNAMANN. Yes, sir; right on deck. 
 
 Representative Minor. What could Congress do to make sea life 
 more desirable than it is now for our American sailors? 
 
 Mr. LiNNAMANN. I do not think they could do any more than they 
 have done. 
 
 Representative Minor. Congress could not do any more than it has 
 done? 
 
 Mr. LiNNAMANN. I do not think they could. It seems to me the 
 sailors have everything full and plenty, and are always satisfied, and 
 the foreigners coming on American vessels are always more satisfied. 
 
 Senator Mallort. Do you do any duty on watch ? 
 
 Mr. LiNNAMANN. No, sir. 
 
 Senator Mallory. You do not stand your trick at the wheel ? 
 
 Mr. Linnaman. No, sir. 
 
 Senator Mallort. How about the cook? 
 
 Mr. LiNNAMANN. He does not, either. 
 
 The Chairman. Mr. Linnamann, we are much obliged to you. 
 
 STATEMENT OF F. H. BURYESON. 
 
 F. H. Buryeson appeared before the Commission. 
 
 The Chairman. What is your business ? 
 
 Mr. BuRTESON. Sailor. 
 
 The Chairman. Where is your home ? 
 
 Mr. Buryeson. Here in New York. 
 
 The Chairman. Were you born in this country ? 
 
 Mr. Buryeson. No, sir; I was born in Sweden. 
 
 The Chairman. Have you been on ships of different nationalities ? 
 
 Mr. Buryeson. Yes, sir; I have sailed under about ten or eleven 
 different flags, as near as I can remember. 
 
 The Chairman. Ten or eleven different nationalities ? 
 
 Mr. Buryeson. Yes, sir. 
 
 The Chairman. Tell us, in brief, what your experience has been. 
 
 Mr. Buryeson. Several of the gentlemen who have addressed the 
 Commission here have told you that American ships are far superior 
 in every way to foreign ships. They have told you that they treat 
 their sailors better, feed their sailors better, pay them higher wages 
 than the ships of other nations do. In spite of all these advantages, 
 they have conceded that sailors as a rule prefer to ship in foreign 
 vessels for less wages than they would get in American ships. Now, 
 you are all intelligent men, and you will naturally conclude that there 
 must be something loose. 
 
 Senator Lodge. Who said they preferred to ship in foreign vessels ? 
 I have not heard that stated. 
 
 3a— 04 14 
 
210 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Mr. BuKTESON. Yes, sir; Mr. Clyde made that statement yesterday, 
 and Mr. Orcutt did, and so did the shipmasters. I did not catch their 
 names, but I distinctly heard them say so. 
 
 Senator Lodge. 1 did not so understand it. 
 
 Mr. BuRTESON. They made all kinds of explanations of the fact. 
 They actually said here in my presence that sailors would ship in an 
 English ship for less wages rather than in an American ship, and that 
 they would rather ship in a German or Norwegian ship than in an 
 English ship. It was said right here. 
 
 MORE WORK ON AMERICAN SHIPS. 
 
 There is something wrong with American ships. These same gen- 
 tlemen to whom I have referred have laid great stress on the fact, as 
 it seems to them, that it costs more to operate an American ship in the 
 foreign trade than it does a foreign ship of the same type and size 
 engaged in the same trade. It is quite true that sometimes, very often 
 I may say, American ships in foreign ports have to pay more wages 
 in order to secure a crew than foreign vessels do. But there is a very 
 good reason for this, which I will explain to you. 
 
 These same gentlemen have studiously avoided telling you that 
 American ships generally are undermanned. By this I mean that 
 American ships, ton for ton, carry much smaller crews than do foreign 
 ships of the same size and type in the same trade. 
 
 It may not be known to you gentlemen, but it is a fact nevertheless, 
 that American ship masters and American mates take great pride in 
 the smartness of the appearance of their vessels. Naturally this entails 
 a lot of extra work for the crew, and when you take into consideration 
 the fact that American vessels are undermanned it stands to reason 
 that the American sailor has to do a heap more work aboard an Ameri- 
 can ship than he has aboard a foreign ship. 
 
 NO HOLIDATS AT SEA. 
 
 Again, the navigation laws of the United States are absolutely silent 
 on the subject of watch and watch at sea, or legal holidays, or Sun- 
 days, or a legal workday in port. The law does not specify a single 
 thing in that respect. 
 
 Under the laws of Norway and Germany you are entitled to your 
 watch and watch at sea, except, of course, in bad weather, when all 
 hands are needed. You are entitled to legal holidays and to Sundays, 
 and also to a nine-hour workday in port. Naturally, if I go to sea 
 before the mast in a Norwegian vessel or a Dutch vessel or a German 
 vessel I can make reasonably sure at sea to get my watch and watch — 
 my watch below when it is due to me. I can also make reasonably 
 sure when a legal holiday comes around that I can claim it, and so of 
 Sunday, and the}'^ can not work me any long ten or twelve or fourteen 
 hour day in port, because I am entitled to a nine-hour workday in 
 port. 
 
 Senator Mallory. You apply that only to the days when you are 
 in port. You do not expect a legal holida}' at sea? 
 
 Mr. BuRYESON. Yes, sir; you do get it at sea. Two years ago last 
 Fourth of July I was working on an American coaster, and we were 
 made to scrape the boom, and because I had a little something to say 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 211 
 
 to the mate about it he offered to knock my block off. I had to keep 
 on working. That happened right here on an American coaster, the 
 M. D. Cressy, a five-masted schooner, at sea, and it was my afternoon 
 watch below. 
 
 Senator Lodge. Do I understand you to say that on Norwegian ships 
 everybody takes a holiday on Sunday ? 
 
 Mr. BuKTESON. You get your watch and watch. You only have to 
 do that work which is necessary for the navigation of the ship. 
 
 Senator Lodge. I was about to ask you who sailed the ship. 
 
 Mr. BuRTESON. In American vessels, as a rule, they never recog- 
 nize any holiday. You are requested to do scraping down, or what- 
 ever is going on, and there is no let-up. 
 
 Senator Mallokt. Is there any difference in the treatment of the 
 men by the masters and mates of American ships and the masters and 
 mates of foreign ships? 
 
 AMERICAN MATES DRIVERS. 
 
 Mr. BuRTESON. Yes, sir; and 1 will tell you why. It is because the 
 American ships as a rule are undermanned. The mate is usually as 
 much engaged for his ability to drive the sailors as for his ability to 
 navigate and maneuver the vessel. American mates are noted to be 
 drivers. 
 
 Senator Mallory. Driving is one thing; but are they cruel to the 
 men? 
 
 Mr. BuRTESON. Yes; they are at times. 
 
 Senator Mallory. Do you make the assertion that American mates 
 are cruel to the men, as compared with the mates of ships of other 
 nationalities? 
 
 Mr. BuRYESON. Yes, sir; the National Seamen's Union of America 
 some six or seven years ago published a little pamphlet called the 
 Red Record, and the frontispiece of the Red Record was a big fist 
 smeared with blood. That little pamphlet contained about 260 or 300- 
 odd instances of cruelty aboard American ships. One of the men who 
 was particularly obnoxious to the sailors was a relative of Mr. Sewall, 
 who was before you here to-day — Captain Sewall, of Bath, Me. He 
 was in the Red Record twice. That such treatment is accorded sailors 
 is a notorious fact, gentlemen, and I have personally suffered from it. 
 American ships are called by sailors slaughterhouses and hell ships. 
 That is what has mainly given American ships such a bad reputation, 
 and men to go in American ships want higher wages. They are 
 scared to go. In all my experience^ — and I have been on only three 
 deep-water voyages — I have never managed to make a full voyage. 
 I was glad enougn to get out after the passage. 
 
 SMALL AMERICAN CREWS. 
 
 Senator Mallory. You say it is a rule that American ships are short- 
 handed as compared with foreign ships ? 
 
 Mr. BuRYtisoN. Yes, sir. 
 
 Senator Mallory. Take an American bark of 1,000 tons. How 
 much of a crew would she have outside of the master and mates? 
 
 Mr. BuRYESON. An American bark registering about a thousand 
 tons would carry seven, eight, probably ten hands before the mast at 
 the most. 
 
212 HEABINGS BEFOBE THE MERCHANT MABINE COMMISSION. 
 
 Senator Mallort. Eight to ten ? 
 
 Mr. BuKYESON. Yes, sir. 
 
 Senator Malloet. How many would a British bark carry ? 
 
 Mr. BuRTESON. She would carry about twelve seamen — ten able sea- 
 men before the mast, two ordinaries, and carry four or six apprentices 
 aft somewhere. That would be about six hands in addition. 
 
 Senator Mallort. Twelve to sixteen hands? 
 
 Mr. BuRYESON. Sixteen hands. And the same number of officers, 
 and probably one more officer, because they usually carry third mates. 
 American ships do not. 
 
 Senator Malloky. Are you before the mast? 
 
 Mr. BuRYESON. 1 have not been to sea for the last six months. I 
 left the schooner last November. 
 
 Senator Mallory. In what capacity were you employed then ? 
 
 Mr. BuRYESON. Able seaman. I have always been before the mast. 
 
 The Chairman. In what service? 
 
 Mr. BuRYESON. I have sailed in American vessels. 
 
 The Chairman. What was your last service? 
 
 Mr. BuRYESON. In a schooner on the coast. 
 
 The Chairman. What was its nationality ? 
 
 Mr. BuRYESON. American. 
 
 Senator Mallory. What was its name ? 
 
 Mr. BuRYESON. The Edwin R. Kirk. 
 
 The Chairman. Had you been in the American service prior to that 
 time? 
 
 Mr. BuRYESON. Yes, sir. 
 
 The Chairman. How manj'^ times? 
 
 Mr. BuRYESON. I have been off and on. The first American ship I 
 was on, in 1872, as ordinary seaman, was the Ivanhoe. 
 
 CRUELTY IN AMERICAN SERVICE. 
 
 The Chairman. If there is this cruelty in the American service, 
 why do you go back to it? 
 
 Mr. BuBYESON. I have not been in American deep-water ships for 
 many years. I run clear of that. I have been on the coast a number 
 of years. 
 
 The Chairman. Then you are not a sailor. You are a land sailor. 
 
 Mr. BuRYESON. A land sailor? No, sir; I am a coastwise sailor, 
 and have been for some years past. 
 
 The Chairman. Is this cruelty in the American foreign service ? 
 
 Mr. BuBYESON. In the foreign service. 
 
 The Chairman. Not in the coastwise service ? 
 
 Mr. BuRYESON. No, sir. 
 
 The Chairman. Why should it not be in the coastwise service, if 
 we are such cruel people? 
 
 Mr. BuRYESON. The coastwise trips are short and they are more 
 under the influence of public opinion. They are probably scared of 
 getting afoul of the law. When a deep-water ship is bound to an 
 American port they are not cruel to the sailors, as a rule. 
 
 The Chairman. Have you personal knowledge of any instance of 
 cruel treatment on an American ship? Have you seen the fur fly? 
 
 Mr. BuRYESON. Yes, sir; I have. I have been kicked. 
 
 The Chairman. Und.er what circumstances? 
 
HEABINGS BES'OEB THE MERCHANT MARINE COMMISSION. 213 
 
 Mr. BuKTESON. I shipped in 1883 as able seamen aboard the ship 
 Exporter, of Newburyport, Mass., to go to Bombay with case oil. 
 There is no use to give you gentlemen the details. But there was 
 fighting aboard that vessel, and when a man came on deck, if the mates 
 were in bad humor, they would take it out of him. It is sickening to 
 give all this. 
 
 Representative Minor. These charges have been brought against 
 American mates a good many times, but in a general way. Would 
 you have any difficulty in furnishing the Commission with specific 
 instances? 
 
 Mr. BuETKSON. Not a bit; but I can not do it now. 
 
 Representative Minor. We are after those fellows. 
 
 Mr. BuRTESON. I told you a while ago there was a pamphlet called 
 the " Red Record" that will give you the specific instances. 
 
 Representative Minor. Tmt was a good while ago. What objec- 
 tion is there to giving to this Commission the names of the vessels and 
 the men who practiced it? 
 
 AN improved condition. 
 
 Mr. BuRTESON. You must understand that in 1898 there was an act 
 passed. We call it the " White Act," because Senator White, of Cal- 
 ifornia, was the man who introduced it in Congress. The law was so 
 amended as to give the master a hold on the mate, and since then 
 cruelties have subsided somewhat. 
 
 Representative Minor. I knew about that law, because I was on 
 the committee. 
 
 Mr. Buryeson. What I am speaking about all happened in the past, 
 and the mischief has been done and American vessels have earned the 
 reputation of being bad vessels, and you know the old saying about 
 giving a dog a bad name — that it will stick to him. It will be years 
 before sailors will have confidence in American vessels. 
 
 Senator Penrose. Do you consider the food on American vessels 
 better than that on foreign ships ? 
 
 Mr. BuRTESON. Since that act came into existence it has been very 
 good. It is fully equal in quality and quantity to what is given on 
 German ships and Scandinavian ships! 
 
 Senator Penrose. Is it better? 
 
 Mr. Buryeson. I do not think it is any better, but I should say it 
 is about equal. There is no complaint coming from sailors now on the 
 score of food. 
 
 Senator Mallory. You are aware of the fact that there are heavy 
 penalties under our law for cruelty to seamen by the master or any 
 other officer of a ship ? 
 
 Mr. Buryeson. Yes, sir; I am. 
 
 Senator Mallory. We have some very stringent laws, and 1 have 
 known a case where the crew complained about the water, and the 
 whole crew was discharged by the United States district court, because 
 the water had wiggle tails in it. They did not hurt the water at all. 
 Can you give us any instance where acts of crueltj^ were brought to 
 the attention of the local authorities and prosecutious were not 
 instituted ? 
 
214 HEAKITSTGS BEFOKE THE MBKCHANT MARINE COMMISSION. 
 ONLV GENERAL STATEMENTS. 
 
 Mr. BuKTESON. Sir, if I had known that you would ask me this 
 question I would have come here with, the proof, but I am only making' 
 general statements. 
 
 Senator Maelobt. You are making an assertion as to which we 
 should like to get at the facts. You were speaking, of course, of your 
 own experience and not from what you have heard. Your own experi- 
 ence is what we shall base our judgment on. 
 
 Mr. BuRTESON. Yes. 
 
 Senator Mallobt. Can you give us in your own experience an 
 instance in which a master or a mate or any other officer of a ship 
 maltreated a seaman and the seaman complained about it at the port 
 and there was no redress given him ? 
 
 Mr. BuRYESON. No, sir; I am not prepared to make any such state- 
 ment to-night, because 1 want to be quite sure of what I am saying. 
 
 Senator Malloey. Could you give us one hereafter? 
 
 Mr. BuBYESON. Yes, sir; I will. 
 
 Senator Malloby. Please furnish us the information if you have it. 
 
 Mr. BuEYESON. I shipped on the Exporter^ and when I got to 
 Bombay I had to swim ashore, leaving all my clothes and wages 
 behind. I was afraid to go to the American consul because he had a bad 
 name among sailors. I was afraid he would put me in jail, and 1 
 would be kept in jail and put in handcuffs. So I kept away from the 
 consul. I snipped aboard an English tramp and came home through 
 the Suez Canal. 
 
 Senator Malloey. You did not give the consul an opportunity to 
 determine whether or not your complaint was justified ? 
 
 Mr. BuEYESON. I did not trust him. ^ 
 
 Representative Minoe. Are you a member of the Sailors' Union? 
 
 Mr. BuEYESON. Yes, sir. 
 
 Representative Minob. Do you hold any position in that organi- 
 zation ? 
 
 A WBITEE FOB THE UN^ON. 
 
 Mr. BuEYESON. For the last, six months — since last November— 1 
 have been writing for the Coast Seamen's Journal. I have been going 
 to sea before the mast for thirty -one or thirty -two years, in all kinds 
 of vessels. If you gentlemen desire any specific instances of cruelty 
 aboard American vessels I can procure them and send them to you 
 
 Senator Malloey What we want are not ex parte statements, but 
 something to indicate that there has been cruelty and an effort ikade 
 to investigate it. If a sailor is maltreated, all he has to do is to report 
 
 ^iL.^'Pr-Pf '^ ?f ''®'" ^""^ 'i '•' ^'■''''^^* *o *he attention of the United 
 States district attorney and investigated. I know it is done very 
 often. I have had frequent instances of it called to my attention If 
 a man IS seriously maltreated aboard ship and there is nothing heard 
 of It afterwards, the implication is that either the thinff is hu^ed ud 
 with his consent or there is some crooked work about it ^ ^ ^ 
 
 What I should like for my own information is to know whether 
 there is any case which you can give us where a man was maCated 
 and complaint made, and proof offered of that fact ''^™^"^^68'™^' 
 taken on the subject by the legal authorities. If youcan fl "° ^^^""l 
 information hereafter, I should like to see it. ^ ^'"'^"'"^ ^""^^ 
 
 Mr. BuEYESON. 1 will. 
 
HEAEINGS BEFORE THE MERCHANT MARINE COMMISSION. 215 
 
 Senator Mallory. If such instances occur Congress ought to stop 
 them, of course. 
 
 Mr. BuRYESON. I will try to furnish it. 
 
 Senator Mallokt. There is law enough. 
 
 Mr. BuRYESON. Cruel treatment of seamen is not as bad on Amer- 
 ican ships as it used to be, but as I said a while ago they have a bad 
 name, and it is hard to get over it. I have been at Liverpool, for 
 instance, when many ships were there, and a man could get a crew for 
 an English vessel for £S a month and for an American vessel he would 
 have to pay £3 10s., and then the American vessel would get the 
 rakings of the port, men that English or German shipmasters would 
 not take — men with blackened eyes and broken noses; men who looked 
 like bad cases, and they would get the wages paid on board an Amer- 
 ican ship. 
 
 Senator Malloky. You have no complaint to make about American 
 ships, on that point, since 1898? 
 
 Mr. BuEYESON. No complaint since 1898. 
 
 The Chairman. Have you knowledge of any case except your own? 
 On that voyage to which you have referred were any other sailors 
 cruelly treated? 
 
 Mr. BuRYESON. Yes, sir, everybody; but it is twenty-one years ago, 
 and I forget their names. 
 
 The Chairman. Were any complaints made when you got ashore? 
 
 AS TO STEAMSHIP WAGES. 
 
 Mr. BuEYESON. Not that I know of. I was one of the first to run 
 away. She was bound for Calcutta from there. 
 
 Mr. Clyde made a statement to the effect that the wages paid on this 
 coast are the highest paid to any sailors in the world. If Mr. Clyde 
 were here he would bear me out in the statement that he pays his 
 sailors f25 a month and feeds them, taking the rations of the Navy as 
 the standard. That is 30 cents a day, or $9 a month. That would 
 make Mr. Clyde's expense of feeding the sailors and their wages $34 a 
 month. But to be quite sure I am right, I will say it will cost him $35. 
 
 Now, seamen on the same kind of vessels on the English coast are 
 paid in a different way. In the English coastwise system the ships 
 are called weekly boats, because they pay their crews by the week. 
 The average wage on the English coast in the weekly boats is 35 
 shillings a week, or 6 shillings a day, including Sundays. Those are 
 laborers' wages. The crew feed themselves and do their own cooking. 
 Thirty -five shillings converted into American money will make approx- 
 imately $8.75. That is $8.75 a week, or as near as I can come to it, 
 about $37.50 or $38 a month, which it costs the British shipowner to 
 hire seamen on the British coast. 
 
 Now I should like to know where Mr. Clyde's statement comes in, 
 that seamen on this coast are paid such exorbitant wages, when the 
 actual figures prove that on the English coast they pay two or three 
 or four dollars a month more to a sailor in the same class of vessels. 
 
 AS TO INTIMIDATION. 
 
 Representative Minor. Just one moment. You have some vessels 
 here that ship nonunion crews occasionally? 
 Mr. BuRYESON. Yes, sir. 
 
216 HEAEINGS BBFOEE THE MERCHANT MAEINE COMMISSION. 
 
 Representative Minor. Are they permitted to sail in peace and 
 ■without disturbance? 
 
 Mr. BuETESON. So far as I am concerned they are. 
 
 Representative Minor. No; that does not answer the question. Are 
 they permitted by the union to do so? 
 
 Mr. BuEYESON. Yes, sir; if they are not, the police will see to it 
 that they are. 
 
 Representative Minor. Do you know of any crews that have been 
 taken off vessels here by a launch because they were nonunion ? 
 
 Mr. BuRTESON. ISJo, sir; I do not know of a crew. I have heard 
 some rumors of it, but that is all. 
 
 Representative Minor. You have heard some rumors of it? 
 
 Mr. BuRYESON. Yes, sir. 
 
 Representative Minor. You are quite sure that it has not taken 
 place? 
 
 Mr. BuRYESON. I am not quite sure, for I think it has taken place. 
 
 Representative Minor. You think that the union has a launch? 
 
 Mr. BuRYESON. The sailors' union ? 
 
 Representative Minor. Yes; used for that purpose? 
 
 Mr. BuRYESON. I know they have, but I do not know what it is 
 used for. 
 
 Representative Minor. And that they have taken crews off? 
 
 Mr. BuRYESON. If the crew is willing to leave, it certainly will take 
 the crew. 
 
 Representative Minor. They have been persuaded to leave ? 
 
 Mr. BuRYESON. Yes. 
 
 Representative Minor. Have you ever engaged in that business ? 
 
 Mr. Buryeson. No, sir. 
 
 Representative Minor. You have never taken any part in it? 
 
 Mr. Buryeson. No, sir. 
 
 Representative Minor. Has some member of your order done so ? 
 
 Mr. Buryeson. If I did know, I am not here to tell you. 
 
 Representative Minor. You are not here to tell me? 
 
 Mr. Buryeson. I prefer to tell you my personal affairs. 
 
 Representative Minor. Would you approve such a course? 
 
 Mr. Buryeson. 1 approve of a peaceful course. If 1 can get along- 
 side of a man and tell nim "My dear man, you are taking my place 
 for a lower wage; I am on strike, and I should like to see you leave," 
 I can certainly approve of that. I do not approve of violence. 
 
 Representative Minor. That is all. 
 
 The Chairman. Have you anything further to submit? 
 
 Mr. Buryeson. I have a lot, but then you seem to be busy, and it is 
 getting late, and it is hardly worth while to bother you. If you will 
 give me five minutes more, there is just one other item I should like to 
 mention. 
 
 The Chairman. Certainly. 
 
 NO REQUIREMENT OF SEAMEN. 
 
 Mr. Buryeson. Again referring to Mr. Clyde and coastwise steam- 
 ers, I wish to call j'our attention to the fact that the navigation laws 
 of the United States are very stringent on this point. They require 
 every coastwise steamer to carry a certain number of lifeboats, pro- 
 portioned to the space and accommodations that they have for passen- 
 
HEARlNCfS BEFORE THE MERCHANT MARINE COMMISSION. 217 
 
 gers. The object is, of course, tliat in cmsb of emergency there shall 
 be enough boats to take care of the passengers; but the law stops 
 there. The law does not compel Mr. Clyde to carry one single seaman. 
 He may have his vessel loaded down with passengers; he may have a 
 thousand passengers aboard, and still there is no law of the land to 
 prevent him from leaving on board his ship, in such an emergency, a 
 quartermaster or two to steer her or firemen to keep up steam. W hat 
 is the sense of a law like that, when Mr. Clyde gets away without any 
 seamen. 
 
 The wages on steamers are $5 to |10 less than on sailing vessels, and 
 the consequence is that no sailor will go on a steamer on the coast. 
 The steamers get the riff raff, anybody who is " on the bum," and even 
 if there was an accident at sea, there would not be one man out of a 
 score of them who could handle an oar or lower a boat to the water. 
 
 Senator Penrose. Are not the crews expected to row those lifeboats ? 
 
 Mr. BuKTESON. There should be at least two men in a lifeboat, so 
 as to keep her head to the sea. They are not to row her, but to keep 
 her head to the sea, or in a certain direction, according to whoever is 
 in charge of the boat. It is ridiculous to have a law like that, so 
 emphatic on one point and so lax on another. What is the use of hav- 
 ing lifeboats if you have not men to man them? 
 
 Senator Malloet. Is it a fact that as a rule our coastwise steamers 
 do not have an adequate number of sailors to handle their boats ? 
 
 Mr. BuRYESON. That is a fact which can be easily proved. 
 
 Senator Malloex. I know it is so with British tramps. 
 
 Mr. BuETESON. And it is so with American tramps. 
 
 Senator Malloet. We have not many tramps. 
 
 Mr. BuEYESON. Even so, in the American coastwise trade they 
 never mind whether you can handle an oar or splice a rope. 
 
 Senator Malloey. You think Congress ought to require passenger 
 coastwise steamers to carry a certain proportion of capable and 
 ordinary seamen at least? 
 
 A MANNING LAW. 
 
 Mr. BuEYESON. I think Congress ought to enact a law fixing a 
 national manning scale for all classes of ships, according to the trade, 
 and the rig of the vessel, and the tonnage. I think there ought to be 
 a test of efl[iciency. A man should not be allowed to enter himself as 
 qualified for able seaman unless he can prove it. Suppose you are 
 aboard a sailing vessel. Mr. Pendleton probably can bear me out in 
 that. Suppose I ship in a big hand- puller, with four men before the 
 mast, and that there are three or four greenhorns, and 1 am the only 
 sailor. I have to do their work. It comes hard on me, and in the 
 future I will shy clear of that kind of a vessel. 
 
 Senator Malloey. How can the master know whether they are able 
 seamen or not? 
 
 Mr. BuEYESON. Under present circumstances he can not know, 
 because there is no test required. The man is taken on his word. 
 For instance, I will tell you how the thin^ works. The Sailors' Union 
 maintains a scale of wages, and there is a vessel up for shipping. 
 For instance, we will say she is a $30 vessel, according to our scale. 
 Mr. Pendleton is hunting around to get men to go for $25. Mr. Pen- 
 dleton would naturally not get the sailors, because we try to keep our 
 sailors in the union. He may get a crew — what we call scabs. There 
 
218 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 are scab sailors. But to spite tiie union and to show it tiiat he can get 
 his vessel away, he will not be particular, and he will take the best he 
 can get. That is how it works out. 
 
 Senator Mallort. How would you remedy that? 
 
 Mr. BuRTESON. Just as 1 said a while ago. There should be some 
 kind of a test of efficiency. 
 
 Senator Mallory. Prescribed by law ? 
 
 A EUROPEAN EXAMPLE. 
 
 Mr. BuRTESON. Yes. In Germany and Norway it is regulated in 
 this manner. Every man has to serve, in the first place, as a yoimg 
 man, and then as an ordinary seaman, and he gets a book from the 
 Government. The master of every vessel he serves in gives him a 
 discharge, and it is gummed into this book, and before he is allowed 
 to ship before a shipping commissioner he must produce this book, 
 and that is a certificate both of his character and his ability. I think 
 a plan of that kind would be good enough for American ships. I, for 
 my part, would take my chance with a book of that kind. I think 
 the man who is shiftless enough to forfeit his good name should be 
 left to shift for himself. 
 
 The Chairman. Suppose that man did not join the union. Would 
 you still call him a scab and send out your launch and take him off 
 the ship ? 
 
 Mr. BuRTESON. The Government does not recognize union or scab 
 men. I am speaking of what the Government should do. That would 
 be left to us afterwards. 
 
 The Chairman. What about the union? You admit that you send 
 out a launch to take men off a ship. 
 
 Mr. BtTRYESON. Has your Commission come here to investigate the 
 union ? I am not here as a union sailor, you understand. I am here 
 as an American sailor. 
 
 The Chairman. You call a man who does not belong to your union 
 a scab ? 
 
 Mr. BuKTESON. Yes, sir. 
 
 The Chairman. That sounds very much like unionism. 
 
 Mr. BuRTESON. It does. 
 
 The Chairman. Suppose we took this man and educated him as you 
 say the German Government does, and he was still a nonunion man; 
 How would he be treated by your organization? 
 
 Mr. BuRTESON. We would try by all means to make a union man 
 of him. 
 
 The Chairman. Suppose he did not conclude to become a union 
 man? 
 
 Mr. BuRTESON. Then we would try to keep him out of the vessel. 
 
 The Chairman. Exactly. 
 
 Mr. BuRTESON. We naturally would. That is human nature. It 
 is protection. Why should a man refuse to belong to the union of his 
 craft? Can you give me any reason for that, Mr. Chairman? 
 
 The Chairman. I do not care to go into that question. I have my 
 opinions about it, but I do not care to argue it to-day with you. Have 
 you anything further to say ? 
 
 Mr. BuRYESON. No, sir. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 219 
 
 STATEMENT OF GEORGE HALL. 
 
 George Hall appeared before the Commission. 
 
 The Chairman. Are you a seaman ? 
 
 Mr. Hall. Yes, sir. 
 
 The Chairman. Are you in the American service? 
 
 Mr. Hall. Yes, sir. 
 
 The Chairman. On what vessel * 
 
 Mr. Hall. 1 am not on any vessel. I am going awaj"^ to-morrow 
 morning on a vessel. 
 
 The Chairman. What vessel ? 
 
 Mr. Hall. The Aetna. , 
 
 The Chairman. Have you been in any other service than the 
 American ? 
 
 Mr. Hall. The English. 
 
 The Chairman. Tell us, in a few words, what you know arbout the 
 English and American services. 
 
 PREFERS AMERICAN VESSELS. 
 
 Mr. Hall. On American vessels the sailors are treated better, and 
 the food is better, and they have better quarters, and better wages. 
 They get $8 to f 10 a month more on American than on English ves- 
 sels. 1 always prefer American vessels. All I have to do is to do my 
 work and mind my own business and do what I am told. 
 
 The Chairman. Were you ever illtreated on an American vessel ? 
 
 Mr. Hall. No, sir. . I have always tried to do my work as near as 
 I could. 
 
 Senator Penrose. Are you a member of the union? 
 
 Mr. Hall. No, sir. 
 
 The Chairman. Have you knowledge of any cases of cruelty on 
 American vessels ? If so, were they reported and not properly attended 
 to by the authorities? 
 
 Mr. Hall. I do not know that I have, or else they are so far back 
 that I disremember them now. 
 
 The Chairman. Where were you born? 
 
 Mr. Hall. New Jersey. 
 
 SAILORS NEED ADVANCE PAT. 
 
 There is one thing about American vessels. They used to pay 
 advance wages — from $8 to |10 and |12 on the coast and $12 to the 
 West Indies and Mexican ports. The}' have done away with that. 
 That makes the sailor sore. He can not get a place to stay. Last 
 winter, for instance, many men did not have any place to stay or any 
 place to sleep, whereas if they could have gotten advance they would 
 have got a place to stay. 
 
 Senator Mallort. You are strongly in favor of repealing that law ? 
 
 Mr. Hall. Yes, sir; I want a coasting advance. 
 
 Senator Mallort. Do you know why that law was enacted? Do 
 you know what was the reason or the excuse for enacting the law to 
 prevent men from getting the advance ? 
 
 Mr. Hall. No, sir. 
 
'220 HEARINGS BEPOR-E THE MERCHANT MA.K1NE COMMISSION. 
 
 Senator Mallort. It was to prevent your being preyed on by 
 boarding-house keepers and crimps. 
 
 Mr. Hall. I never have been preyed on. The others can look out 
 for themselves. 
 
 Senator Mallory. It has seemed to work badly. 
 
 Mr. Hall. Yes, sir; I know that. 
 
 Senator Mallory. And the boarding houses get along just the same ? 
 
 Mr. Hall. Yes, sir. 
 
 STATEMENT OF DAVID MUEPHY. 
 
 David Murphy appeared before the Commission. 
 
 The Chairman. Are you a seaman ? 
 
 Mr. Murphy. Yes, sir. 
 
 The Chairman. Where were you born ? 
 
 Mr. Murphy. Virginia. 
 
 The Chairman. Are you in the American service? 
 
 Mr. Murphy. Yes, sir. 
 
 The Chairman. On what vessel? 
 
 Mr. Murphy. I was on the Viutor. 
 
 The Chairman. Have you been in the service of any other country 
 as a seaman? 
 
 Mr. Murphy. I have been a few times on an English vessel, but 
 mostly on American vessels — schooners in the coasting trade. 
 
 The Chairman. What about the conditions in the English service as 
 compared with the American service ? 
 
 AMERICAN SHIPS FAR AHEAD. 
 
 Mr. Murphy. All the difference in the world. In American vessels 
 they feed you well and use you well and pay you well and everything 
 is well. It is altogether different from the English. I have learned 
 it is the same in other country's vessels. I have found out from 
 others who have been there that we are far ahead of any other country 
 in every way. 
 
 Senatory Mallory. Are you a seaman ? 
 
 Mr. Murphy. Yes, sir. 
 
 Senator Mallory. How do you class, as an able seaman or an ordi- 
 nary seaman? 
 
 Mr. Murphy. I have been an able seaman; I have been second mate; 
 I have been mate on schooners. I go before the mast now. 
 
 Senator Mallory. You say you have served in British vessels i 
 
 Mr. Murphy. Yes, sir. 
 
 Senator Mallory. In the deep sea? 
 
 Mr. Murphy, No; in the western ocean trade between New York 
 and Liverpool. 
 
 Senator Mallory. Were you on square riggers ? 
 
 Mr. Murphy. Yes, sir. 
 
 Senator Mallory. How does the food given on the British ship 
 compare, in your judgment, with the food schedule on the American 
 ship? 
 
HEABINGS BEFOKE THE ' MERCHANT MARINE COMMISSION. 221 
 BEST FOOD AND ACCOMMODATIONS. 
 
 Mr. Murphy. All the difference in the world. 
 
 Senator Malloky. You think it is better on the American vessel? 
 
 Mr. Murpht. I do. What the British give you for a week you can 
 use in one da3\ 
 
 Senator Mallort. How about accommodations for the men ? 
 
 Mr. Murphy. The American accommodations are the best in the 
 world. '^ ' 
 
 Senator Mallory. In the matter of the treatment of the men by the 
 officers; 'iMve you noticed any difference? 
 
 Mr. Murphy. I did not notice much difference in that at all. I have 
 not seen much of that anywhere. I heard about it. 1 never saw it. 
 
 Senatol- Mallory. Sometimes you have a captain who is rough and 
 sometimes one who is fairly good. 
 
 Mr. Murphy. Sometimes. I have seen very little of it. I have 
 heard. 
 
 Senator Mallory. Are you a member of the Seamen's Union ? 
 
 Mr. Murphy. No, sir; not now. 
 
 Senator Mallory. You are not now. Were you ever? 
 
 Mr. Murphy. Yes, sir; I was when it first came out. 
 
 Senator Mallory. How long since j^ou have been a member? 
 
 Mr. Murphy. It has been ten years, now, I guess. 
 
 HAVE SEEN NO CRUELTY. 
 
 The Chairman. Have you seen any instances of cruelty on American 
 vessels which were reported and, if reported, were neglected by the 
 authorities ? 
 
 Mr. Murphy. No, sir; I never saw anything reported. I have heard 
 of some that were reported. I have not seen any that was reported 
 and carried on in the right way that was ever neglected. 
 
 The Chairman. Have you ever seen any American seaman who did 
 his duty faithfully and well who was ill treated by his officers ? 
 
 Mr. Murphy. No, sir. 
 
 STATEMENT OF JAMES 0. OSBORNE. ' 
 
 James O. Osborne appeared before the commission. 
 
 The Chairman. What is your business ? 
 Mr. Osborne. Sailor. 
 
 The Chairman. How long have you been a sailor? 
 Mr. Osborne. Three years. 
 
 The Chairman. Are you in the service of the United States? 
 Mr. Osborne. Yes, sir. 
 The Chairman. On what ship ? 
 Mr. Osborne. The schooner Aetna. 
 The Chairman. Where were you born? 
 Mr. Osborne. In the West Indies. 
 
 The Chairman. Have you been in the service of any other country 
 as a seaman than that of the United States ? 
 Mr. Osborne. No, sir. 
 
222 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 The Chairman. What have you to say about accommodations, food, 
 and the treatment of yourself and your associates in the service of 
 the United States as seamen? 
 
 HARSHLY TREATED BY THE UNION. 
 
 Mr. Osborne. I think it is all right. It is in pretty good condition, 
 until the last schooner, when I got treated pretty mean after I got 
 into Brunswick. The union came aboard and forced me to go ashore 
 and held me for iifty-one days, and I got no pay for it. 
 
 The Chairman. Repeat that statement. That was in Brunswick, 
 Ga.« 
 
 Mr. Osborne. Brunswick, Ga. 
 
 The Chairman. What happened when you got into that port? 
 
 Mr. Osborne. Union sailors came aboard and persuaded me to go 
 ashore — forced me to go — and 1 was held in the house of detention for 
 fifty-one days, for which I received no pay. It was the most unreason- 
 able thing ever I heard of. 
 
 The Chairman. Are you a union man ? 
 
 Mr. Osborne. No, sir. 
 
 The Chairman. You say they persuaded you or forced you; which 
 was it? 
 
 Mr. Osborne. They forced me to go. 
 
 The Chairman. Did they force you to leave the ship ? 
 
 Mr. Osborne. Certainly; they came on board with force and made 
 me go ashore. 
 
 The Chairman. How did you get into jail? 
 
 Mr. Osborne. The police put me in there. 
 
 Representative Minor. He was detained as a witness. 
 
 The Chairman. You were detained as a witness ? 
 
 Mr, Osborne. I was detained as a witness in the house of detention. 
 
 The Chairman. More specifically, have you any complaint to make 
 against the officers of American vessels on which you have served, in 
 regard to treatment, quarters, food, or anything of that kind? 
 
 Mr. Osborne. Nothing whatever. I am always treated fine where- 
 ever I go in American vessels. 
 
 FORCED to leave HIS SHIP. 
 
 Senator Mallory. I should like the particulars about your being 
 forced ashore by the union. How do you know they were union 
 men? 
 
 Mr. Osborne. They said they were union men. I particularly 
 asked them. 
 
 Senator Mallory. How did they force you ? What means did 
 they employ to control you and get you ashore? 
 
 Mr. OsRORNB. Had a gun drawn on me. 
 
 Senator Mallory. Were you at the wharf ? 
 
 Mr. Osborne. I was living aboard the vessel. 
 
 Senator Mallory. Was the vessel out in the stream? 
 
 Mr. Osborne. She was at the dock. 
 
 Senator Mallqry. You say they pulled a gun. Were any of the 
 crew aboard besides you ? 
 
HEABIKGS BEFORE THE MERCHANT MARINE COMMISSION. 223 
 
 Mr. Osborne. The captain, and mate, and steward, and engineer, 
 and me and another sailor. 
 
 Senator Malloky. What was the size of the vessel? 
 
 Mr. Osborne. I do not know. 
 
 Senator Mallory. Was she a three-master? 
 
 Mr. Osborne. She was a four-masted schooner. 
 
 Senator Mallory. Did you make any noise in resisting them ? Did 
 you call on the captain or the mate or the steward ? 
 
 Mr. Osborne. I did not call on them. I told the men 1 wanted to 
 go aft. They said if I made any noise they would shoot my brains 
 out — if I made any noise at all. 
 
 Senator Mallory. Were you the only member of the crew aboard 
 the vessel who was treated in that way? Did they force any other 
 men to go ashore? 
 
 Mr. Osborne. Me and another sailor. 
 
 Senator Mallory. How many men were there? 
 
 Mr. Osborne. There were 12 or 15 who came down that night, but 
 they only got hold of 6 of them after the police got hold of us. 
 
 Senator Mallory. Are you quite sure those men were union men? 
 
 Mr. Osborne. They claimed they were union men. 
 
 Senator Mallory. Are you quite sure they were not sailors' board- 
 ing house people who wanted a crew ? 
 
 Mr. Osborne. I particularly asked them what they were, and they 
 said union men, and that they wanted to take me ashore so that they 
 could give their men a ship to go to New York. 
 
 Senator Mallory. You say you were arrested by a policeman; 
 how was that? 
 
 HIDDEN in the WOODS. 
 
 Mr. Osborne. After they took us out into the woods, until the 
 captain got away with other men, the hackman who took us out there 
 went in and reported it to the chief of police, and he came and took 
 charge of us. 
 
 Senator Mallory. How long after you were taken asliore by these 
 men? 
 
 Mr. Osborne. That was twenty -three hours. 
 
 Senator Mallory. You were out in the woods ? 
 
 Mr. Osborne. Out in an old barn. 
 
 Senator Mallory. Were the men who took you ashore arrested? 
 
 Mr. Osborne. I do not know particularlj'^. 
 
 Senator Mallory. Were you detained as a witness ? 
 
 Mr. Osborne. As a witness against the five who had us out in the 
 woods when the policemen came. 
 
 Senator Mallory. Were they some of the men who compelled you 
 to leave thp ship? 
 
 Mr. Osborne. 1 do not know particularly. 
 
 Senator Mallory. Were these men tried? 
 
 Mr. Osborne. They were tried. 
 
 Senator Mallory. And convicted? 
 
 Mr. Osborne. Convicted. 
 
 Senator Mallory. What became of them ? 
 
 Mr. Osborne. I do not know. I guess they were sent to the work- 
 house. 
 
224 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Representative Minor. What is the name of the vessel you were on? 
 
 Mr. Osborne. The William Neely. I think American seamen 
 should have advance money — 15 or $10. 
 
 Thereupon, at 6 o'clock and 25 minutes p. m. , the Commission ad- 
 journed until to-morrow, Wednesday, May 26, 1904, at 10 o'clock a. m 
 
 Office of the Board of 
 
 Trade and Transportation, 
 New York City, N. T., May 26, 190 J^. 
 The Commission met at 10 o'clock a. m. 
 
 Present: Senators Gallinger (chairman), Lodge, Martin, and Mal- 
 lory, and Representatives Minor, Humphrey, and Spight. 
 
 STATEMENT OF HON. JOHN M. FARaUHAR. 
 
 Hon. John M. Farquhar, of Buffalo, N. Y., appeared before the 
 Commission. 
 
 The Chairman. Mr. Farquhar, are you ready to proceed '': 
 
 Mr. Farquhar. I am. 
 
 The Chairman. The Commission will be glad to hear you. I believe 
 you were at one time chairman of the Committee on Merchant Marine 
 and Fisheries of the National House of Representatives 'i 
 
 Mr. Farquhar. I was. 
 
 The Chairman. And you have made a careful study of the ques 
 tions connected with our commercial marine? 
 
 Mr. Farquhar. The whole question, up to that time, was very 
 thoroughly discussed and examined. 
 
 The Chairman. You may proceed in your own way, Mr. Farquhar. 
 
 Mr. Farquhar. I presume, Mr. Chairman, that I am admonished 
 to be brief so far as time is concerned, and I will simply ask the privi- 
 lege, when the notes are transcribed, to amplify where I say that which 
 is purely assertive, in order to bring in what argument may be needed 
 to clear up the assertion itself. 
 
 The Chairman. There is no objection to that. 
 
 Mr. Farquhar. There is a good deal of ground to traverse, and 
 probably I shall treat some things lightlj^. If any question shall occur 
 to any member of the Commission, I wish at the time it may be 
 promptly called to my attention. I shall be as brief as possible. 
 
 I have with me this morning, Mr. Chairman and gentlemen, two 
 mosaics which I should like to introduce into this testimony, and 
 which will in a measure make a foundation for the remarks I shall 
 submit on this question. One of them is an extract from the New 
 York Commercial of this month: 
 
 A HUMILIATING RECORD. 
 
 "Last year 265 steamships sailed from New York for European 
 ports, but out of the whole number only 6"^ — 
 
 That is, 6 out of 265— 
 "flew the American flag — less than 2^ per cent. From this same port 
 last year 12 steamships cleared for Africa, 17 for China, Japan, and 
 the Far East, and 50 for South America — 79 in all — but not one of them 
 
HEABINGS BEFOEE THE MEBCHANT MAKINB COMMISSION. 225 
 
 bearing the Stars and Stripes. Of the 71 steamships that sailed for 
 ports in Cuba, the West Indies, and Mexico, only a paltry 22 were of 
 American register. There were 8 steamship clearances from this port 
 for Australia, but not one American craft in the lot. Thus, of the 423 
 steamships sailing for foreign ports last year from the chief port in 
 the United States, only 28 brought a penny in freights into the pockets 
 of American owners, although they were chiefly engaged in carrying 
 American exports and imports — less than 7 per cent of the whole! 
 
 " Baltimore has practically the same humiliating story to tell — 73 
 foreign clearances, with only 3 steamships of American register, 
 Boston and Charleston sent 74 steam craft to foreign ports, of which 
 9 only were American. Newport News had 18 foreign clearances — 
 not a solitary Yankee among them. From Philadelphia 64, and not 
 one American. 
 
 "It is high time for every port of entry in the United States to pro- 
 test against the further exclusion of the American flag from their har- 
 bors, and to assist in declaring our freedom from European domination 
 in our ocean-borne trade." 
 
 So much for the shipping status and navigation. I wish now to call 
 attention to an extract from the Sun, quoting figures taken from 
 the United States Bureau of Statistics. It somewhat touches on 
 expansion and the Eastern trade, and, independent of consular reports, 
 Mr. Chairman, and those matters that come immediately into the pos- 
 session of the United States Government for publication, are the hard 
 figures of fact without color, and the extract I now intend to read will 
 certainly, if there are present any very strong friends of expansion 
 andof the growth of trade, and even of amended bills in respect of 
 navigation, furnish food for reflection: 
 
 A FEEBLE SHOWING. 
 
 "Philippine imports of iron and steel and manufactures thereof for 
 the calendar year 1903 show an increase of approximately 10 per cent 
 over those of 1902. The figures are $2,102,915 for 1903 and 11,909,679 
 for 1902. Of the total for the two years the United States secured 
 only about 23.7 per cent. More than three-quarters of the trade was 
 captured by our English and European competitors. Our percentage 
 of the trade of 1902 was a small fraction less than 25; for 1903 it was 
 22.5. We did not even hold our own. 
 
 "The largest single item last year was iron sheets and plates. Eng- 
 land supplied nearly all of it. The next item in importance was steel 
 rails. Germany supplied one-half, Belgium 40 per cent. The United 
 States placed 2.4 per cent. Out of a steel-rail trade of fl59,528 we 
 supplied 13,766. The business in structural iron and steel in 1903 
 doubled that of 1902. Great Britain sold 90 per cent of it, and the 
 United States supplied about enough to ballast a catboat. We were 
 even beaten out in electrical supplies and sewing machines. 
 
 "If the Philippines are worth having at all, their trade ought to be 
 worth cultivating. The financial balance against us is already quite 
 large enough. It is to be hoped that Heaven will send the next session 
 of Congress a measure of grace and wisdom that will materially change 
 such a record." 
 
 3a— 04 15 
 
226 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 ANCIENT HISTORY NOW. 
 
 1 may very properly say, Mr. Chairman, that whatever my opinions 
 and the opinions of the friends of the American ship were in 1891, 
 they seem almost like ancient history now. In listening to the hear- 
 ings before your Commission here during the last two days I have 
 been impressed with the duplication of arguments. Take the report 
 of our committee in the Fifty-first Congress, and you will find that 
 over half of what you have heard is in it. In other words, there has 
 not been a new fact adduced, although every man who understands 
 trade and commerce and navigation knows there are radically different 
 conditions in this country now from what there were in 1891. We 
 have the same arguments here from the shipbuilding interest for sup- 
 port in ship construction. We have the same call from the owners of 
 ships for the difference in operating. We have the same large fig- 
 ures — running from 26 and 30 per cent to 80 — as to the difference in 
 cost of construction; the same arguments, almost word for word, 
 which have been common since the Lvnch committee of Congress in 
 1872. 
 
 THE BILLS OF 1891. 
 
 To my mind, while the tonnage bill of the Fifty-first Congress was 
 probably one of the best measures of its day, yet I am free to say now 
 that were I chairman of that committee and had I the opportunity, I 
 would not bring that bill into Congress. As I say, conditions have 
 changed so that it is inapplicable. 
 
 The mail bill which was passed as a substitute for the tonnage bill 
 has subserved the interest of the American marine; and I was glad to 
 hear the testimony of Mr. Smith, of the New York and Cuba Line, on 
 that point. At the time of the passage of that bill the question was 
 asked by Mr. Springer, of Illinois, and others, if I felt satisfied. I 
 said yes, fully satisfied. I felt satisfied that there had been an enter- 
 ing wedge made on a question which had never before been reached in 
 the country, however inadequate the rates were that were named in 
 that bill, and however unfair they were toward myself and my com- 
 mittee at that time when they were ground out of us, the two-third 
 rate that was maintained in the bill has been the supporting element 
 to the American merchant marine and an object lesson for future legis- 
 lation. So much is this evident, after thirteen years of experience, 
 jj^ou have to take and amend the very bill of the Fifty-first Congress 
 in slight particulars. And in way of history I desire to say that the 
 tonnage bill, if it had passed, and it was beaten by only two votes in 
 the House, would have obviated the necessity for any session of this 
 commission to-day. 
 
 The mail bill was passed by a majority of 19. The Republicans 
 who had not voted for the tonnage bill voted for the mail bill, and 
 probably 14 or 16 Democrats voted with us. The opposition to the 
 measure to benefit the merchant marine at that time caucused five 
 times among the Democracy; and its advocates, the Republicans never 
 caucused once. 
 
 The contention of all of us at that time, as it is with me now, is that 
 this question ought to be taken out of politics teetotally. [Applause.] 
 It is thoroughly a commercial question, and more than that, it is a 
 national question. [Applause.] I wish to say now as I said thirteen 
 
HEAKIMGS BEFORE THE MEKCHANT MARINE COMMISSION. 227 
 
 years ago on the floor of the House that it is nation against nation 
 that is fighting for command of the seas and foreign trade. [Applause.] 
 From the report which accompanied that bill I desire to reproduce 
 these expressions of well-settled opinion, not as the keynote of protec-- 
 tion as to making money, not of protection as to making markets, but 
 insuring protection to the whole mterests and the whole people of the 
 United States. [Applause.] 
 
 TRUTHS SELF-EVIDENT. 
 
 " In the present state of maritime advancement so much of the power 
 of nations is exerted and shown upon the sea it is not less a matter of 
 state necessity than of commercial policy that on the same arena our 
 own nation should renew its power. 
 
 "What, then, are the means of maintaining our rank among the 
 nations, of insuring our march to greatness and repute, respected for 
 our justice and blessed for our goodness, our rights undisputed, and our 
 peace secured? Those means are the ships and seamen, the merchants 
 and mechanics, the labor and capital of our own country employed in 
 active foreign commerce. These resources, as precious as they are 
 simple, must not be blasted and destroyed. If wisely cherished they 
 will always furnish indispensable requisites of our naval power. They 
 are essential to that object, and that is indisputable. 
 
 "Shipbuilding is a military art. Navigation is an expedient of 
 war. In these respects these trades difl'er from every other branch 
 of industry. Hence it is the national interest in these arts must 
 always be a vital one. Merchant fleets are but navies needing guns. 
 By traffic they seize the sea in time of peace. By cruising, blockade, 
 and battle they hold it and conquer in time of war. Foreign mer- 
 chants, always encroaching on our own, are but emissaries and invad- 
 ers seeking spoil. The mechanics who build their fleets, and the sea- 
 men who sail them, have a military as well as civil character. Their 
 work is a constant warfare in the interest of their nation, increasing 
 its wealth and heightening its power." [Applause.] 
 
 A "local question." 
 
 As is said in the Declaration of Independence, these truths are self- 
 evident; and I wish to impress on this Commission as 1 would the 
 people, through the press and otherwise, that this question is wider 
 and greater than any other problem before the American people to-day. 
 Were it possible to take into account the amount of money the United 
 States has expended for what is called the public welfare and compare 
 it with the little measly sum that the American ships engaged in 
 foreign and domestic commerce have received from the United States, 
 it ought to put to shame our national legislators, because I thoroughly 
 believe our relief, our help ultimately must come through Congres- 
 sional legislation. 
 
 And, when considering the insignificant help extended to the Ameri- 
 can merchant marine interests by Congress, place in contrast the 
 $370,000,000 voted by Congress for the improvement of rivers and 
 harbors up to the year 1900, and the 197,000,000 acres of public lands 
 granted by Congress to States, Territories, and corporations to aid in 
 construction of railroads. Every river and harbor act is a subsidy; 
 
228 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 and yet the opponents of marine subsidies greedily snatch their por- 
 tion out of the river and harbor "pork barrel" subsidy. It would 
 appear that political consistency respecting subsidies is a "local 
 question." 
 
 Our main diflSculty in reaching success has been that the people of 
 this country have not been educated up to this question. More than 
 that, I wish to say with due deference and in all kindness, in my 
 contact with Congressmen since I left Congress, in each succeeding 
 one as bills have come from the Senate to the House and have received 
 consideration to the extent of hearings, I have been astounded that 
 even the first principles involved in these questions seem to be mis- 
 understood or not known at all, or so dimly understood that they 
 have effected nothing. Now, it is well-known to all of us that when 
 Congressional documents — the hearings of this Commission, for in- 
 stance — get out, they reach few hands. The press may be an auxiliary 
 and a help, but 1 believe that the friends of the American ship ought to 
 go into the field and positively show the immediate benefits of rehabili- 
 tating the merchant marine and of having legislation that will stay by, 
 protect it, and defend it through and through. 
 
 STRIKING FIGURES. 
 
 Mr. Chairman, I wish for a moment to call to your attention a few 
 figures that are necessary probably to comprehend what I shall say- 
 further on. In 1870 our internal commerce was 17,000,000,000. In 
 1903 our internal commerce was $22,000,000,000, three times greater 
 in thirty-three years. In 1870 the international commerce of the 
 world was f 11,000,000,000. In 1903 it was $22,000,000,000. In other 
 words, the internal commerce of the United States of America to-day is 
 equal in amount to the whole international commerce of the world. 
 
 Another feature: Between 1890 and 1902 the world's gross tonnage 
 increased from 13,000,000 to 26,000,000. It doubled. In that time 
 British tonnage increased from 8,250,000 to 13,500,000, and the Ger- 
 man proportion from 928,000 tons to 2,601,000 tons. 
 
 Mr. Chairman, without discussing free ships or discriminating 
 duties or bounty for exports, I merely want to say one thing: In 
 1828, when we put on partial free trade by adopting maritime reci- 
 procity, we woi-ked the ruin of the American ship. When they ask 
 for free trade in ships — free ships — I want to warn all politicians 
 in this country that the minute they attempt to abolish the whole trade 
 of shipbuilding in America they will find that the votes of 2,000,000 
 trade unionists in the American Federation of Labor will sink into 
 oblivion the party which tries it. 
 
 The maritime reciprocity of 1828 was followed up by the maritime 
 reciprocity of 1848; Woodbury of one, Meredith of another 
 
 Senator Mallory. You date the decline of American shipping from 
 the year 1828, when we changed the policy as to discriminating duties? 
 
 Mr. Farquhae. Yes, sir; with just one qualification, that it took 
 Great Britain until 1845, though she was the instigator of it at that 
 time, to make it complete toward herself, and it was only in 1849 that 
 Great Britain ever proclaimed a law accepting it. 
 
HEAKINGB BEFORE THE MERCHANT MARINE COMMISSION. 229 
 
 A PLAN TO SUBMIT. 
 
 Mr. Chairman and gentlemen, I have a plan to submit to you for 
 the rehabilitation of the marine. It is somewhat new. 1 think it is 
 almost entirely new. It is a matter which has been brought to my 
 attention during the last three years, and I have made quite a wide 
 investigation of the question through foreign embassies, through the 
 Commissioner of Navigation, through the United States Bureau of 
 Statistics, and otherwise. 
 
 In short expression, I desire that the American rail, the rail of the 
 transcontinental roads and of the trunk lines of the East, shall be, figura- 
 tively, extended to every great trading port in the world. [Applause.] 
 You may plead to eternity and you can not get the money to build 
 American ships under present circumstances. Money will not be forth- 
 coming. Here is little Jersey, where corporations are yearly formed 
 with billions of capital. Where do you find anything at all, unless it 
 is in the nominal incorporation of a merger, being invested in a ship ? 
 Under somewhat of a stimulus, expecting the Frye-Hanna bill to 
 pass in a late Congress, some people did venture in and invest some 
 money. But 1 understand from what was said before a committee in 
 WasMngton that they regretted very much that they had ever spent a 
 dollar in new ships. I can not very well enter into the question as to 
 why such an investment can not be made, but I state here just the bald 
 proposition, that there is no opportunity, apparently, for American 
 money to go into the American snip. 
 
 We can not build a marine without money, without management, 
 without skill. In every nation on the face of the earth there are only 
 three great conditions that make for all its wealth, and those are the 
 products of the country, the skill of its inhabitants, and the carrying 
 trade. Great Britain has all these three. We have two, and we lack 
 only the carrying trade to complete it in order to reach the wealth of 
 the world. 
 
 KAILKOADS AND SHIPS. 
 
 Now, my proj)osition is, or I simply suggest or make the request, 
 that this Commission may consult with leading railroad men of the 
 United States to know how the views, which I will probably crudely 
 present to you, meet their views. Already quite a number of roads 
 have considerable tonnage afloat. The present mail subsidy bill is 
 inadequate to induce them to increase it any more. First of all, one 
 difficulty has been that we have not really had the trade to justify it; 
 and another thing is that until the trade is made, you have to take the 
 accommodations you find. 
 
 Now, suppose it were possible for the five transcontinental roads to 
 enter into what may be called a world's bill of lading. Take a bill of 
 lading from Boston clear to Hongkong, the whole inland transporta- 
 tion controlled immediately by them, their own ships, and their own 
 transfer made on the Pacific coast to their own warehouse and receiv- 
 ing officers in Hongkong or elsewhere in the Orient. Do you not see 
 that you will immediately get the advantage of stability, of money, of 
 management, of skill ? But, above all, you will have Americans to do 
 American work, Americans to sell American goods, Americans to sail 
 American ships, and every dollar that is made on it will ultimately 
 come into the coffers of our own people. 
 
230 HEARINGS BEFOKE THE MERCHANT MARINE COMMISSION. 
 
 THROUGH BILLS OF LADING. 
 
 There is another advantage: The economies that exist in making a 
 through bill of lading would cover measurably the differences in the cost 
 of constructing a ship and the cost of operating her. In other words, 
 having some skill myself in making railroad rates, a road can hide in 
 an American bill of lading from Boston to Hongkong or any other 
 port on the normal lines of commerce, every single one of the con- 
 struction bounties, operating bounties, wages, and every other draw- 
 back to maritime success, and the public will not know the difference 
 and the railroad will not lose a cent. 
 
 Let me call your attention to another feature. Nearly half of the 
 foreign trade is secured under just one word — a word that you hardly 
 ever hear in Congress, or out of it, or see in your newspapers. That 
 word is "preference;" that is the commercial term — preference; and 
 until a nation and until the traders of a nation are able to reach into a 
 foi'eign port and control that word "preference," they are going to 
 take second, third, fourth, or seventh place. To-day view the wnole 
 Chinese trade, and every American who has an established trade 
 there has gone in person, and they have had to place the American 
 trade there entirely in the hands of English or Germans or Chinese, or 
 whoever could be picked up. The skilled American drummer is not 
 there, except infrequently. You have Curtis's letters, which are pub- 
 lished broadcast — a man coming in contact daily with commercial men 
 and everyone else, and you see the complaint therein that the American 
 is shut out from the market for the lack of preference. 
 
 BUSINESS WE WANT. 
 
 Now, what I want is this: If the railroads will agree to extend our 
 shipping, if they will agree to make a bill of lading clear through from 
 ocean to ocean, I am certain the people will agree that even a modi- 
 fication of present custom rates is commendable; and if Congress 
 will modify them we will have American ships controlling the whole 
 transportation from beginning to end. We will have American ware- 
 houses where the American drummer can go and place his goods, and 
 have a friend there who will keep the thieves from breaking in on them 
 and prevent competitors from picking up the secrets of the trade. In 
 other words, we start American, we go to the end American, and we 
 return American. It is a monopoly. I care not how wide they make 
 it. AH great enterprises are monopolies. Every subsidy is a monop- 
 oly. Every street car line is a monopoly. Every Bell telephone is a 
 monopoly. Could you take away the Bell telephone and do business? 
 No. Could you take away the street car and do business? No. The 
 initial of all these things was a monopoly, and legislators ought to 
 wear blinders if they get scared about subsidies or initial monopolies. 
 It is business we want. I do not go into the ethics of it. As Have- 
 meyer has said, there is no ethics in business. Business is business, 
 and what we want is American business where we have not got it now. 
 
 Mr. Chairman, inform me when you get tired. I wish to take up 
 other authorities for a moment. In the report of the Commiasioaer of 
 Navigation for 1903 there is printed, commencing at page 268, one of 
 the most complete reports on subsidies ever written in the world. 
 I wish to say that in everything I have in my own library, and in every- 
 
HKARINGS BEFORE THE MERCHANT MARINE COMMISSION. 231 
 
 thing I have ever read iu a public library, I have never found as com- 
 
 filete a report as that of Cecil's, in the British House of Commons, 
 t is impartial. It criticises the British system and gives fair and 
 
 square reasons 
 
 The Chairman. Where is it to be found 'i 
 
 BOUNTIES AND RETALIATION. 
 
 Mr. Faequhae. Commencing on page 268 of the report of the Com- 
 missioner of Navigation for 1903. 
 
 Let me, without reading all — of course it will be printed — come to 
 this railroad question. I desire to say now, preliminarily, so that 
 you may understand me as I go along, that the main thing that has 
 built up German commerce to-day is her preferential rates on the 
 State railroads of Germany. We have had talk here about differential 
 duties — differentials they call them here. I do not know why. They 
 are discriminating duties. When an export bounty was put on sugar 
 in Germany what did the United States do? It put on a counter- 
 vailing duty. I wish to tell you that when you commence monkeying 
 with the tariff, when you try any horizontal reduction or any hori- 
 zontal advance, you will be in deeper water than you ever got into in 
 all your legislative life. More than that — there is not a nation which 
 has a bit of pride or power that will not immediately, when you put 
 on your bounties, put on a penalty bounty to meet you and shut you 
 out of its markets; and they are fools if they do not. We have done 
 it. We have done it with German sugar and equalized the rates, and 
 every nation that knows anything about business will do the same. 
 
 In this report of the committee of the British House of Commons 
 the author speaks of the German method as follows: 
 
 " The indirect forms of bounty are chiefly two: (1) Exemptions from 
 payment of customs duties, and (2) preferential railway rates." 
 
 The committee use the expression "indirect forms of bounty." 
 That is the very expression I want to impress on this Commission. 
 What I propose here in respect of the cooperation of the railroads of 
 the country in building up the merchant marine is indirect. I do not 
 want any direct legislation at all. I want to let well enough alone. I 
 am willing, and I think the railroad men are willing, to have the ex- 
 port rates as we have them to-day, and let them stand without any 
 amendment whatever. 
 
 Senator Malloet. What do you mean by export rates as they are 
 to-day ? 
 
 EXPOET AND DOMESTIC RATES. 
 
 Mr. Fakquhae. I am very glad you have asked me that question. 
 Before I left Washington I went to the Interstate Commerce Com- 
 mission and got some figures that were called up by that horrible 
 Elkins bill — tne bill that was a terror, I understand, to a great many 
 people in New York, in Wall street especially, and to railroad men, or 
 some of them. Of course we do not now know that there is any terror 
 in the Elkins bill, because the roads have accepted it, and they have 
 gone right ahead and made reports regularly, and anyone can go to 
 the Interstate Commerce Commission and find every day, almost, the 
 export rates. I do not care to read all of them, but I will ask that you 
 
232 HEAEINGS BEFOEE THE MEBCHANT MARINE COMMISSION. 
 
 print these tables, because they are tables which have never been pub- 
 lished. In other words, each table is a composite. It was made up 
 from a whole series of tariffs and other data only four or five days ago. 
 
 From Chicago, 111., for instance, on agricultural implements and 
 binder twine the regular rate to Boston is 33 and the export rate is 25. 
 To New York the domestic rate is 30 and the export rate is 25. To 
 Philadelphia the doniestic rate is 28 and the export rate 23. 
 
 On grain the domestic rate to Boston is 19.5, the export rate 13^ and 
 15. lo New York the domestic rate is 17.5 and the export rate 13i 
 and 15. 
 
 On iron and steel the domestic rate to Boston is 30.5; the export 
 rate is 18.5. The rate is almost cut in two for export. 
 
 To New York it is 27.5 for domestic service, 18.5 for export. 
 
 Now from Pittsburg on articles of iron and steel manufacture, by 
 the carload, the domestic rate to Boston is 16.5, the export rate 9.5. 
 
 To give you a contrastive view of the differences between domestic 
 and export rates I have selected these at random. In explanation of 
 the tables I would state that No. 1 shows a comparison of the rates on 
 domestic and export traffic from Chicago and East St. Louis to North 
 Atlantic ports on the commodities named. At the present time there 
 are no commodities, other than shown in the table, on which there is 
 an export lower than the domestic rate through North Atlantic ports. 
 The rates from Chicago to New York form the basis for rates from 
 territory north of the Ohio, east of the Mississippi River, and west 
 of a line drawn from Buffalo, N. Y., to Pittsburg, Pa., to Atlantic 
 seaboard points, the rates from points in that territory being made a 
 percentage of the Chicago rates. In all cases, therefore, where there 
 are export rates from Chicago there are also export rates from all 
 points in the territory described. . 
 
 Table No. 2 shows comparison of domestic and export rates on iron 
 and steel articles from Pittsburg, Pa., to Boston, New York, Phila- 
 delphia, and Baltimore. 
 
 Table No. 3 shows comparison of export and domestic rates from 
 Kansas City to Galveston, Tex., and New Orleans, La., on the articles 
 named. 
 
 No. 1. 
 
 Statement showing comparison of rales on various commodities {shown below) for domestic 
 and export purposes from Chicago and East St. Louis, III., to Boston, New York, 
 Philadelphia, and Baltimore. 
 
 Rates in cents per 100 pounds, unlea otherwise shown. 
 
 From . 
 To ..., 
 
 Chicago, 111. 
 
 Boston, Mass. 
 
 Commodities. 
 
 °^!J<'^- Export. 
 
 New York, 
 N. Y. 
 
 ""ti^^'-^-VOH. 
 
 Philadelphia, 
 Pa. 
 
 1^°!J.«^- Export. 
 
 Baltimore, Md. 
 
 ''^P^- Export. 
 
 Agricultural implementsandbinder 
 
 twine 
 
 Glucose and grape sugar 
 
 Glucose (In taulc cars only) 
 
 Grain 
 
 Grain products 
 
 Billets, blooms, ingots, etc 
 
 Iron and steel articles 
 
 Pig iron 
 
 Bails, iron or steel, new 
 
 27 
 22 
 
 m 
 
 19i 
 263 
 S04 
 
 26i 
 
 25 
 
 20 
 
 16i 
 
 13i 
 
 15 
 
 15 
 
 16i 
 
 18t 
 
 15i 
 
 15J 
 
 SO 
 25 
 
 20 
 
 17t 
 
 m 
 
 24i 
 27J 
 23A 
 23i 
 
 25 
 20 
 16i 
 
 15 
 15 
 16i 
 18i 
 15i 
 15} 
 
 28 
 23 
 18 
 
 } 16J 
 
 154 
 22} 
 25J 
 
 18 
 
 144 
 
 124 
 
 13 
 
 13 
 
 144 
 
 164 
 
 134 
 
 13J 
 
 27 
 22 
 17 
 
 144 
 
 144 
 2U 
 244 
 
 lit 
 
 22 
 17 
 134 
 
 12 
 
 134 
 
 154 
 
 124 
 
 ISj 
 
HEAEITSGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 233 
 
 Statement showing comparison of rates on various commodities (shown below) for domestic 
 and export purposes, clc. — Continued. 
 
 Rates in cents per 100 pounds, unless otherwise shown. 
 
 East St. Louis, 111. 
 
 To . 
 
 Boston, Mass. 
 
 New York, 
 N. Y. 
 
 Philadelphia, 
 Pa. 
 
 Baltimore, Md. 
 
 Commodities. 
 
 "?r" Export. 
 
 Agricultural implements and binder 
 
 twine 
 
 Glucose and grape sugar 
 
 Glucose (in tank cars only) 
 
 Grain 
 
 Grain products 
 
 Billets, blooms, ingots, etc 
 
 Iron and steel articles 
 
 Pig_ i ron 
 
 Rails, iron or steel, new 
 
 31 
 
 25 
 22{ 
 22J 
 
 aJB.lO 
 35 
 
 a 85.80 
 
 Dom-'- Export. 
 
 29 
 23 
 19 
 16 
 17i 
 
 a683.80 
 21S 
 
 a!' 83.60 
 
 Do--E,p„, 
 
 35 
 29 
 23 
 20J 
 201 
 a85.70 af>% 
 32 I 
 
 a$5.40 0683.60 
 
 27 
 21 
 18' 
 18j 
 
 :i$5.30 
 30 
 
 a 85.00 
 
 Do-es-^,p„rt_ 
 
 27 
 21 
 17 
 15 
 15i 
 <i6 83.40 
 
 m 
 
 a!> 83.20 
 
 32 
 
 26 
 
 20 
 
 17J 
 
 174 
 
 086.10 
 29 
 
 a84.80 
 
 26 
 
 20 
 
 16 
 
 14i 
 
 141 
 
 Ob 83.20 
 18i 
 
 0683.00 
 
 a Rates per ton. 
 
 6 Will apply only on iron and steel articles destined to foreign possessions of the United States when 
 exported direct from the railroad terminal, and said special export rates will not apply when such 
 shipments are forwarded to or through a navy-yard and subsequently shipped by Government 
 transport. 
 
 Interstate Commerce Commission, 
 
 AcDiTOE's Office, May 19, 1901,. 
 
 No. 2. 
 
 Statement showing comparison of rates on various commodities (shown below) for domestio 
 and export purposes from PUtsburg, Pa., to Boston, Mass., New York, N. ¥., Philadel- 
 phia, Pa. , and Baltimore, Md. 
 
 
 
 
 
 Pittsburg, Pa. 
 
 
 
 
 
 
 To 
 
 Boston, Mass. 
 
 New York, N.Y. 
 
 Philadelphia, 
 Pa. 
 
 Baltimore, Md. 
 
 
 Commodities. 
 
 Domes- 
 tie. 
 
 80.20 
 .16i 
 
 3.00 
 2.80 
 
 2.80 
 
 Export, 
 
 Domes- 
 tic. 
 
 Export. 
 
 Domes- 
 tic. 
 
 Export. 
 
 Domes- 
 tic. 
 
 Export. 
 
 Articles of iron and steel manufac- 
 ture, L. C. L. (per 100 pounds) 
 
 Articles of Iron and steel manufac- 
 ture, C. L. (per 100 pounds) 
 
 Billets, blooms, borings, crop ends, 
 ingots, muck or puddle bars, old 
 car wheels and axles, old rails, 
 scrap iron or steel, scrap tin and 
 
 
 
 80. 9i 
 
 1.75 
 1.60 
 
 1.76 
 
 so.m 
 
 .14i 
 
 2.60 
 2.40 
 
 2.40 
 
 80. 9S 
 
 1.76 
 1.60 
 
 1.75 
 
 80.16J 
 .13i 
 
 2.40 
 2.20 
 
 2.20 
 
 80. 8J 
 
 1.55 
 1.40 
 
 1.55 
 
 80.16 
 .13 
 
 2. SO 
 2.10 
 
 2.10 
 
 80.8 
 
 1.45 
 1.30 
 
 1.46 
 
 Pig iron, 0. L. ( per gross ton) 
 
 Mill cinder and scale, C. L. (per 
 
 
 Interstate Commerce Commission, 
 
 AUDITOR'S Offi'ce, May 19, 190L 
 
234 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 No. 3. 
 
 Statement showing comparison of rates on various commodities {shown below) Jor domestic 
 and export purposes from Kansas City, Mo., to Galveston, Tex., and New Orleans, La. 
 
 
 Rates in cents per 100 pounds. 
 
 From , , , 
 
 
 Kansas City, Mo. 
 
 
 
 To 
 
 Galveston, Tex. 
 
 New Orleans, La. 
 
 
 
 
 Domestic. 
 
 Export. 
 
 Domestic. 
 
 Export. 
 
 Commodities. 
 
 Propor- 
 tional. 
 
 Local. 
 
 Propor- 
 tional. 
 
 Local. 
 
 Propor- 
 tional. 
 
 Local. 
 
 Propor- 
 tional. 
 
 Local. 
 
 Wheat 
 
 33J 
 38J 
 26! 
 
 38i 
 43J 
 30J 
 
 64 
 39 
 75 
 
 12 
 12 
 12 
 
 15 
 15 
 13 
 26 
 35 
 23 
 20 
 21J 
 
 19 
 19 
 17 
 
 24 
 24 
 21 
 31 
 35 
 28 
 41 
 21J 
 
 12 
 12 
 12 
 
 15 
 
 
 15 
 
 Other grain 
 
 13 
 
 
 25 
 
 
 
 35 
 
 Pig lead and spelter 
 
 
 23 
 
 Ore {zinc or lead ) 
 
 
 20 
 
 
 
 21i 
 
 
 
 
 a No rates. 
 
 Interstate Commerce Commission, 
 
 Auditor's Office, 
 
 May 19, 1901,. 
 
 Senator Mallobt. Let me ask you a question right here. Is the 
 distinction between the domestic and the export rate to the seaboard 
 for export or is it under a through bill of lading? 
 
 Mr. Faequhae. One bill of lading. 
 
 Senator Malloey. A through bill of lading across the Atlantic? 
 
 Mr. Farquhae. A through bill of lading. You will have the bill 
 of lading, the western one, drawn from Chicago down to the Ohio on 
 a line drawn through Pittsburg and up to Buffalo 
 
 Senator Malloey. I do not think you understand me. Take Min- 
 neapolis on a shipment of flour to London. Does the bill of lading 
 give in one lump the railroad rate and the steamship rate? 
 
 Mr. Faequhae. Not always. 
 
 Senator Malloey. Are those the rates you refer to? 
 
 Mr. Faequhae. Yes, sir. 
 
 Senator Malloey. Or is it that for exportation thei'e are certain 
 rates and for domestic transportation to the seaboard there is a differ- 
 ent rate? 
 
 Mr. Faequhae. This is the rate for all commodities that come 
 under the export rate itself. 
 
 Senator Malloey. That does not answer my question. What I 
 wish to get at is this: Is there not a still iower rate for export on a 
 through bill of lading from Minneapolis, say, to Europe ? 
 
 Mr. Faequhae. No. 
 
 Senator Malloey. There is not? 
 
 Mr. Faequhae. No. 
 
 Senator Malloey. I thought there was. 
 
 Mr. Faequhae. I will explain to you just why. 
 
 INDEPENDENT OF CONFEEENCES. 
 
 In the ocean carrying trade of the North Atlantic there is a confer- 
 ence, and unless you hit a tramp or an independent boat you are 
 compelled to pay the regular going rate of the liners. But if the 
 
HEARINGS BEFOBE THE MERCHANT MARINE COMMISSION. 235 
 
 American railroads would bill this tonnage and make their own through 
 bill, they would stand independent of conferences. That is the very 
 point I wish to bring out — the total independence of American goods 
 carried in American bottoms. 
 
 Senator Malloby. If you permit me, what I understand is to some 
 extent done to-day is this: The American railroad fiom the interior to 
 the seaboard makes a special rate for export on sea transportation 
 lines and knows exactly the rate that will be charged for that trans- 
 portation. Those rates are reduced? 
 
 Mr. Faequhab.' Yes. That is reached entirely by our railroad men 
 by simply adding to the rail rate the going ocean rate which they get 
 by wire from Boston, New York, Baltimore, Philadelphia, Galveston, 
 or Newport News. They can not control the ocean rate, but if the 
 railroads will join in and build up an American marine, they will con- 
 trol all without conference or interference, so that the economies of 
 trade will be with them perfectly. In other words, the profits to be 
 made on terminals, on transshipment, on brokerage, and even on 
 insurance, will belong to the American railroad man and the Ameri- 
 can ship. I say there are suflScient economies in a world bill of lading 
 to cover the difference in the cost of construction and operation. 
 
 as to lighterage. 
 
 Representative Minoe. Is there not something in the difference in 
 lighterage, which would be in our favor, a large interest in itself? 
 
 Mr. Fabquhar. Yes, sir; decidedly. 
 
 Representative Minor. Can you give us some light on that? 
 
 Mr. Faequhar. In respect to the rates? 
 
 Representative Minor. Yes, sir; and in shutting foreigners out of 
 the market. 
 
 Mr. Faequhar. Is this a question from the outside? 
 
 Representative Minor. It was handed to me. 
 
 Mr. Faequhab. It would be 2i or 3 cents. 
 
 Mr. Chairman and gentlemen, there is not a single bit of the cost 
 that is now paid to foreigners, paid to outsiders, paid to private indi- 
 viduals who have nothing in common with the transit of goods, but 
 that, if we had a through bill of lading from New York to Hongkong 
 or Nagasaki or even Port Arthur — and also all of the economies 
 that exist — would certainly come to Americans to overcome the differ- 
 ence in the cost of construction and operation. Take simply the 
 transfer charge alone. Take this question which has come to me here 
 with respect to lighterage. All of these, if they have half the facili- 
 ties we have in Buffalo, would be immediately saved — the whole of 
 them — as we do. A great many deprecate the fact that we have rail- 
 road elevators in Buffalo. God knows they are much better than the 
 old elevators, when they used to divide 36 per cent a year. 
 
 Having, I hope, made sufficiently plain the character, scope, and 
 utility of American export rates, permit me to call your attention to 
 the German commercial policy of preferential railroad rates as set 
 forth in the British report on subsidies. From the figures presented 
 it can be readily seen wny many British merchants, in order to maintain 
 their foreign trade, have been forced to forsake their home market and 
 buy German goods so as to gain the profit permitted by the preferential 
 railroad rates. Several of the witnesses, especially from the colonies, 
 urged the imperative need of combined rail and steamship rates, so as to 
 
^36 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 meet German competition, and the matter was finally left for the con- 
 sideration of British railways and shipping companies. Of American 
 competition the report says: "If American railway management 
 unites with steamship management a very influential undertaking may 
 perhaps be formed." Quite a suggestive forecast. 
 
 In order to give your Commission and the public a practical view 
 of the^esults of the German preferential policy, I quote direct from 
 the report: 
 
 GERMAN BOUNTIES. 
 
 "The indirect forms of German Government bounty are chiefly two: 
 (1)_ Exemptions from payment of customs duties and (2) preferentM,- 
 railway rates. Exemption from payment of customs duties is accords 
 on all seagoing vessels and river craft, and on all materials destined for 
 the construction, repair, and equipment of seagoing vessels, including 
 the ordinary ship's gear — that is to say, ropes and rigging, anchors, 
 chains, and sails; flags, compasses, sextants; cannons, muskets; car- 
 penters' stores, axes, hammers, nails, hooks; boats and their appliances 
 and engine-room inventory; besides all articles used for artillery or 
 armament purposes for ships belonging to the German imperial navy. 
 The above list applies only to manufactured or partly manufactured 
 articles from foreign countries, but not to any raw materials, such as 
 pig iron or unwrought copper. By way of further State assistance to 
 the building of ships, certain of these articles are also granted the 
 privilege of preferential railway rates on the German State railways. 
 
 FAVORING GERMAN STEAMSHIPS. 
 
 "The system of preferential railway rates is much more elaborately 
 established in the official tariflEs of the German East Africa and the 
 German Levant lines. It is equivalent to an indirect bounty. Assist 
 ance is given by granting largely reduced rates of carriage by all 
 German State railways to goods exported from inland places in Ger- 
 many on through bills of lading either to east Africa or to the Levant, 
 respectivelj', by the German East Africa Line or the German Levant. 
 Line steamers. These combined land and sea through rates of freights, 
 which were introduced for the Levant Line on June 15, 1890, and for 
 the East Africa Line on April 1, 1895, are lower than those in force 
 for goods sent to German ports for direct exportation by sea. They 
 attract goods to the steamship lines. * * * But it should be noticed 
 that the actual sea rates to Africa from continental ports and from 
 British ports are the same, owing to the German steamship lines work- 
 ing in conference with the British lines to maintain uniform ocean 
 rates. 
 
 "The differences in favor of German combined land and sea through 
 rates of freight as against the British rates will be best appreciated by 
 a persual of some of the appendices to this report. The cost per ton 
 of sending iron rails from Birmingham to Liverpool, which is 97 miles, 
 or 156 kilometers, is 8s. 4d. ; the cost per ton of sending iron rails 
 from Oldenburg to Hamburg, which is 160 kilometers, is 3s. 4d. on 
 the East African tarifl' and 3s. 2d. on the Levant tariff. Again, the 
 cost of carriage of machinery packed for export from Leicester to 
 Glasgow, 313 miles, or 504 kilometers, is 36s. 4d. a ton; from Wronke, 
 East Prussia, to Hamburg, also 504 kilometers, it is 10s. lOd. a ton 
 
HEAKINGS BEFORE THE MERCHANT MARINE COMMISSION. 237 
 
 on the East African tariff and 7s. lOd. a ton on the Levant tariff. The 
 carriage of hardware from Birmingham to London, 111 miles, or 179 
 kilometers, is 21s. 8d. a ton; from Flensborg, Schleswig-Holstein to 
 Hamburg, also 179 kilometers, it is 4s. 2d. a ton on the East African 
 tariff, and varies according to the class of hardware between 4s. Id. 
 and is. 9d. on the Levant tariff. The rate for export bales of cotton 
 from Manchester to Bristol, 175 miles, or 282 kilometers, is 22s. 4d. a 
 ton; from Berlin to Hamburg, 279 kilometers, it is 8s. 7d. on the 
 East African tariff and 4s. Id. on the Levant tariff. 
 
 "The practical effect of these cheap through rates upon British trade 
 will be considered In a subsequent paragraph. Suffice it to say at 
 present that the reduced rates have been and are fixed in accordance 
 with the experience gained in Germany as regards the working cost 
 per train mile over long distances, and that the primary object is the 
 building up, promoting, or increasing of German export trade to the 
 countries in question, and the enabling it to compete successfully with 
 the trade of other foreign States to those countries. From the Ger- 
 man point of view the policy of all these direct and indirect subsidies 
 has been thought a good investment and worth the money spent, but 
 an element of success is the energy and enterprise of the recipient." 
 
 A POSITIVE NECESSITY. 
 
 I desire to say now briefly, without going into any discussion when 
 it comes to these discriminating export rates, which are very well 
 known to the general public, they are a positive necessity. You 
 could not export goods without them. We could not pay the domes- 
 tic rate and compete in the markets of the world. That is all there 
 is to it. The railroads had to come down, and they did come down, 
 and the result is that we have forced competition all over the world. 
 
 I wish to say further that a good deal has been said and will be said 
 probably against the railroads and this Commission forming anything 
 like a combination; apparently taking up just one character of busi- 
 ness and providing for one class, and that the general public of 
 America will be shut out. It will not harm a single line in existence 
 to-day. They will have to move under their own contracts. What is 
 wanted is to get hold of the oriental trade, and I will tell you why, 
 Mr. Chairman, as you will appreciate it probably swifter than any- 
 body present. Since 1897 the mills and factories of this country have 
 been running on twelve months' time. The American wage has 
 increased from 10 to 25 per cent. There never was a time when there 
 was greater prosperity than there is now among our workingmen, 
 and more peace. 
 
 Now, of manufactures there is a surplus. When we were working 
 on the nine months' plan in this country we supplied the domestic 
 markets. We never thought particularly of exporting. We did ven- 
 ture in structural iron to build bridges in Australia or Egypt or else- 
 where, but never in the way of general trade and commerce did we 
 attempt anything. Now we have this surplus, and it has been that 
 surplus, 1 want to" say, and to answer all objections to it, that has 
 built up the foreign trade. The man who brought out the raw mate- 
 rial was paid for it full value. The man who manufactured it paid 
 the full union wage, all his local taxes, his State tax, insurance, 
 and if he used borrowed capital, every cent of interest. Those are 
 
238 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 American-made, union-made goods to-day, and they lie as surplus in 
 the warehouse of the manufactory without a buyer. 
 
 Do you blame that man for finding a market for the goods in some 
 foreign land as soon as he can and cashing in at the best he can the 
 goods that do not compete in the domestic market with one single 
 yard or pound of American production? I say it is no man's business 
 where he sells when he has complied with these conditions as an 
 American citizen. If the American wage is in it, and the American 
 cost of material is in it, and the American transportation is in it, he 
 will go over the world and sell where he can. 
 
 More than that, unless you can sell equal to or below any competi- 
 tor in this world you will not get the trade. You have to have 
 encouragement, just as I am showing here in syndicating, both for the 
 inland and foreign commerce. You have to do it if you intend to 
 reach the markets and, more than that, keep them. 
 
 COUPLING SHIPS AND KAILEOADS. 
 
 I wish to submit one word more, and I will be as brief as possible, 
 and that is this, Mr. Chairman: When I urge enlisting railroad men 
 in our cause, I want to say that if you do you wifl enlist nearly 
 1,000,000 of the brainiest, ablest men who control affairs in the whole 
 world. Mr. Hill spoke of it when he was here yesterday. Every 
 man who has ever come in contact with the railroad men of this land 
 knows that they are the supreme men, whether they are running a 
 train in the wilderness in the West or in the most congested section of 
 the East. Brains and money are in the railroad. Wnat you want to 
 do is to enlist that class of capital and talent on the main lines of com- 
 merce. Let all independents take what they can. Put on an adequate 
 postal subsidy, which is fair play, and just pay for what you are get- 
 ting, and you will win success. I do not believe there is another 
 avenue of escape from utter disaster or an avenue of success for the 
 American marine but simply to build up this combine as I propose, 
 and then you will have the money and the experience and the man- 
 agement and American control on every ocean. I thank you. 
 [Applause.] 
 
 STATEMENT OF EDWARD C. PLUMMER. 
 
 Edward C. Plummer appeared before the Commission. 
 
 The Chaieman. Mr. Plummer, will you state in what connection 
 you appear here? 
 
 Mr. Plummeh. I am secretary of the Atlantic Carriers' Association^ 
 
 The Chairman. Proceed with your statement, Mr. Plummer. 
 
 Mr. Plummer. Gentlemen, it is sometimes as important to hold an 
 inquest as a wake. 
 
 I propose to point out the causes of the loss of and a method to 
 restore our ocean shipping, and that without violating treaties or 
 American traditions. 
 
 One hundred and thirteen years ago Congi-ess appointed its first 
 committee to investigate the need of the interest now intrusted to you. 
 The committee then consisted of only one man, but that man was 
 Thomas Jefferson. And though Congress had already done so much 
 for shipping that our fleet engaged in the foreign-carrying trade was 
 
HEARINGS BEFOBE THE MERCHANT MARINE COMMISSION. 239 
 
 prosperous and steadily increasing, Ttiomas Jefferson recommended 
 such further and radical methods of assistance that he was openly 
 charged in Congress with planning to destroy our foreign trade and to 
 bring on a commercial war with Great Britain^words so familiar 
 to-day. 
 
 But fortunately shipping was then treated as a nonpartisan question, 
 though it is an interesting fact that the strongest advocates of Govern- 
 ment aid for shipping at that time were the followers of Jefferson, 
 while most of those who opposed increased assistance were Federals; 
 yet even those who opposed Jefferson's plans most fiercely, as will be 
 seen from the severe speech delivered in Congress January 13, 1794, 
 based their opposition on the admitted facts that shipping was already 
 very prosperous, that we had already secured the carrying of more 
 than one-half of our foreign commerce, and that, therefore, we should 
 let well enough alone. But Jefferson, comparing navigation with our 
 other great industries, realizing its supreme importance, met all oppo- 
 sition with these crushing words (Am. State Papers, vol. 1, p. ■433): 
 "■Our navigation involves still higher consideration. As a branch of 
 industry it is invaluable, but as a resource of defense essential. Its 
 value as a branch of industry is enhanced by the dependence by so 
 many other branches upon it. In times of peace it multiplies com- 
 petitors for employment in transportation, and so keeps that at its 
 proper level; and in times of war if we have not within ourselves the 
 means of transportation, our produce must be exported in belligerent 
 bottoms at the increased expense of war freights and insurance, and 
 the articles which will not bear that must perish on our hands. But 
 it is as a resource of defense that our navigation will admit neither 
 neglect or forbearance. It is not to the moderation and justice of 
 others that we are to trust for fair and equal access to market with 
 our production, or for our due share in the transportation of it, but to 
 our own means of independence and the firm will to use them." And 
 they used them. 
 
 Washington's example. 
 
 So well did Washington understand these truths that his record in 
 behalf of shipping is superior to that of any other President. Not 
 that others lack interest-— he left nothing for them to do until his work 
 has been undone. Three times he applied to Congress for legislation 
 in behalf of American shipping, and three times those old patriots met 
 his desires. In their reply to nis last suggestion for still further legis- 
 lation, in aid of our merchant marine, these members of Congress 
 declared: 
 
 "The encouragement of our own navigation has at all times appeared 
 to us highly important. It will be incumbent on us to consider in 
 what mode our commerce and agriculture can best be relieved from an 
 injurious dependence on the navigation of other nations." 
 
 What would they be doing to-day? The results of these efforts 
 were fearless laws, giving the advantage of discriminations in tariff 
 rates and tonnage dues to American shipping; and these laws so 
 emphatically declaring that the nation's interests demanded the main- 
 tenance of a merchant marine sufficient for the ocean traffic of this 
 country, left nothing to be added. Shipping flourished for more than 
 
240 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 half a century. Congress turned its attention to other things, now 
 and then tearing away bits of the bulwark which had been constructed 
 around shipping until now, when those arguments of the nation's 
 founders are forgotten, unfriendly interests have so impressed them- 
 selves on legislation that most of our Congressmen seem unable to 
 realize that shipping can be a matter of vital interest to this whole 
 country, but they are urged to look upon it as a sort of eastern hog, for 
 which the Government is asked to provide fattening material. Thus 
 it happens that to-day we may repeat the appeal of Ldmund Randolph, 
 one of the many appeals which found their answer in the legislation 
 under Washington (Virginia convention, June 6, 1788). Said he: 
 
 " Cast your eyes to your seaports, see how commerce languishes; 
 this country with every advantage that can render commerce profitable, 
 through defective legislation is deprived of all those benefits. As it is 
 the spirit of all commercial nations to engross the carrying trade, this 
 makes it necessary to defend our commerce." 
 
 Madison's plea foe shipping. 
 
 And James Madison, who entered the Virginia Assembly in 1776, 
 who was a delegate to the Continental Congress, a commanding repre- 
 sentative in the Commercial Congress of the States, a member of the 
 convention which considered the new Constitution, and a member of 
 Congress during both of Washington's Administrations, in his mas- 
 terly speech on the pro}30sed British treaty of 1796, a treaty pro- 
 claimed to be necessary in the interest of "fair trade," made these 
 declarations and these concluding predictions, which come home with 
 such startling force to-day (April 16, 1796). 
 
 "I shall now, sir," said he, "consider the aspect in which the com- 
 mercial articles of this treaty present themselves for consideration. 
 In the free intercourse stipulatea between the United. States and Great 
 Britain it can not be pretended that any advantage is gained by the 
 former. It is well known that when our Government came into opera- 
 tion, the tonnage of America employed in the British trade bore a very 
 inconsiderable proportion to the British tonnage. There being nothing 
 on our side to counteract the influence of capital and other circum- 
 stances on the British side this disproportion was the natural state of 
 things. As some small balance to the British advantages, our laws 
 have made several regulations in favor of our shipping. Under this 
 encouragement the American tonnage has increased in a very respect- 
 able proportion to the British tonnage, and Great Britain has never 
 deemed it prudent to frustrate or diminish the effect of this by attempt- 
 ing any countervailing measures for her shipping, being aware, no doubt, 
 that we could easily preserve the difference by f urthei measures on our 
 side. But under this treaty she has reserved to herself the right to 
 take such countervailing measures and we have surrendered the right 
 to pursue further defensive action. It is justly to be apprehended, 
 therefore, that under a i-estoration of things to their former state the 
 American tonnage will relax into its former disproportion to the British 
 tonnage." 
 
 SucTi were the words of Madison, and nothing can more graphically 
 illustrate the benefits of the wise legislation which he and Jefferson 
 secured and the dangers of that policy which he opposed, and which, 
 when his warnings were forgotten, another generation permitted to 
 
HEARINGS BEFOBE THE MEKCHANT MARINE COMMISSION. 241 
 
 succeed it, than a mere statement of our per capita tonnage engaged in 
 the foreign trade during the years named. In 1790 there was 1 ton 
 of shipping engaged in the foreign trade to every 31 of our inhabitants; 
 in 1800 there was 1 ton to every 8 inhabitants; in 1810 it was a frac- 
 tion better; in 1820 it was 1 ton to every 15 inhabitants; 1830, 1 ton 
 to every 22 inhabitants; 1840, 1 ton to every 20 inhabitants; 1850, 1 
 ton to every 15 inhabitants; 1860, 1 ton to every 12 inhabitants; 1870, 
 1 ton to every 25 inhabitants; 1880, 1 ton to every 37 inhabitants; 
 1890, 1 ton to every 66 inhabitants. 
 
 It will be noticed that not until 1880 did our per capita tonnage in 
 the foreign trade drop below the point to which England has squeezed 
 it while we were legally in her power; that the loss between 1880 and 
 1890 was almost as great as that during the civil war decade. That in 
 1890 the amount was but one-half what we had before our Government 
 was established, and that these "aggravating" forms of aid to our 
 shipping did not hurt our export trade is shown by this table given 
 for five-year periods: 
 
 Exports for — 
 
 1791 $17,571,551 
 
 1796 -. 67,064,097 
 
 1801 93,020,513 
 
 1806 103,787,000 
 
 A gain of 500 per cent in fifteen years. Under that policy of encour- 
 agement in shipping the United States became a leader among mari- 
 time nations. How we have fallen from that high state is shown by 
 the following figures taken from Lloyd's Register English shipping 
 (and here only vessels of 100 tons and upward are considered) 
 16,006,374 tons, the steamers alone numbering 8,553, of 14,193,582 
 tons. The United States stands with but 1,211 steamers, nearly one- 
 half of them on the lakes. In modern tonnage Germany is already 
 far ahead of us, her record being 1,426 steamers of 1,720,106 tons, 
 while France is practically our equal in sea tonnage, showing 717 
 steamers of 1,153,761 tons. But the real force of these figures, the 
 serious nature of our present national neglect of this giant industry, 
 is brought out in the potential tonnage of these several countries, for 
 a steamer can make more trips than a sailing vessel, and therefore her 
 potential tonnage (the ability to carry freight) is far greater. 
 
 England's sea power. 
 
 England has a potential tonnage of 36,907,579 tons, or more than 
 one-half the entire tonnage of the world, Germany 7,345,747 tons, 
 United States 6,003,704 tons. England now shows a gain or 2,250,000 
 tons over the figures of the preceding year. Thus England leads the 
 world on the sea to-day as she has done for a century. How she 
 gained this commanding lead is well stated in the Enc. Brit. , vol. 21, 
 p. 827, ed. of 1888. Says this frank British authority: "The ship- 
 ping of the Italian Republics excelled that of England in the middle 
 ages. In the sixteenth century Spain was far ahead of her. But both 
 Elizabeth and Charles offered bounties for the building of large craft 
 (100 to 200 tons) and the legislature was also assiduous in endeavoring 
 to encourage this industry. The preference was given to English 
 ships, English built and English manned, and was enforced in a manner 
 thatwas prejudicial to the colonies. Inl790 her tonnage was 1,511,411 
 3a— 04 16 
 
242 HEARINGS BEFOEE THE MEKCHANT MARINE COMMISSION. 
 
 tons (United States 478,477 tons); 1830, excluding that of the colonies 
 it amounted to 2,199,959 tons (United States 1,191,776 tons). British 
 commerce received an enormous development unparalleled in history 
 during the half century from 1826 to 1876. Shipping increased six- 
 fold from 1840 to 1876." 
 
 It will be noticed that not only did shipping increase sixfold during 
 a period of thirty-six years, during more than one-half of which time 
 we were making our greatest record as carriers in the world's trade, 
 but ' ' British commerce received an enormous development " from the 
 time we removed those differential aids from our shipping, and it 
 should be remembered that England did not repeal her navigation laws 
 regarding British built ships until 1849, when steam was coming to 
 the front and she saw that her position would be improved. And she 
 immediately (1854) had the business sense to put the management of 
 her merchant marine in the harids of her board of trade that it might 
 be pushed forward by the combined skill of experts, unhampered by 
 the blunders of uninformed legislators; and constantly increasing mil- 
 lions have been expended unhesitatingly to carry out the plans of 
 those men. 
 
 A SOUBOE OF BEITISH WEALTH. 
 
 "Why should she do it?" The answer appears in the words of the 
 secretary of the British board of trade in the second edition of his 
 Financial Essays (Bell & Sons, London). Having given the vast 
 amounts paid out annually for ocean carriage he declares (p. 174): 
 "Adding together the 60,000,000 (pounds, not dollars) for freight and 
 the 16,000,000 for miscellaneous charges, we arrive at a total of 
 76,000,000 (1380,000,000 in round numbers) as the share for cost of 
 international conveyance annually due to the United Kingdom at the 
 present time." Continuing, he says: "A country with a large carry- 
 ing trade may export little in the shape of commodities, and yet be to 
 all intents and purposes a considerable exporter. This outlay in wages 
 and provisions of ships' crews, in equipping and repairing ships, in 
 insurance and renewals, and the profits it earns, are all parts of its 
 exports, as much as if they were stored up as commodities. That all 
 of these questions are substantial and not formal is shown by a signal 
 example of how much our view of the foreign trade of the United 
 States, as compared with that of England, would be altered by taking 
 account of this. It is a nice question if the United States of late years 
 has been reducing its indebtedness abroad. " (This was written a dozen 
 years ago.) 
 
 The vast importance of shipping as a mere money -making enterprise 
 in which the whole nation is interested is brought out by the fact that 
 the earnings of the British merchant fleet, for the year named by the 
 secretary just quoted, was almost exactly the sam.e as the net earnings 
 of all the United States railroads for the same year. Employing more 
 than 200,000 men in the mere operation of this merchant fleet, with 
 wages amounting to $50,000,000, consuming 135,000,000 of provisions 
 and requiring $75,000,000 in repairs, those vessels show annual earn- 
 ings in the foreign carrying trade of 1350,000,000 and sustain a busi- 
 ness which justifies the annual construction of more than 800,000 tons 
 of shipping, aside from the amount built for foreign owners; a total 
 annual construction greater than the total amount of American shipping 
 engaged in the foreign trade, and representing more than $100,000,000 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 243 
 
 in construction expenses alone. These tremendous sums of half a 
 billion of money annually distributed to English artisans, producers, 
 and shipowners, present the real magnitude of this industr}' in which 
 the people of the United States should share, an industry which calls 
 for the products of, and furnishes employment to, nearlj^ every other 
 industry in the country. Why, the entire hay crop of the United 
 States is only about the value of the earnings of England's merchant 
 fleet (1556,376,880). 
 
 THAT GIANT FLEET. 
 
 Our tremendous and high-priced wheat crop — so often called the main- 
 stay of American prosperity — exceeds but little the earnings of Britain's 
 merchant vessels ($637,821,8.35), while the total exports of all our wheat 
 and flour combined is but a fraction of the value of those earnings 
 (|87,795,10i wheat, $73,756,404: flour— fltJl,551,508). Even the im- 
 mense value of our vast cotton exports — $316,180,429 — falls behind 
 the earnings of that giant fleet which England has built up so quietly, 
 and to the support of which we contribute annually such immense 
 sums. To the unfair and sophistical question, " If others will carry 
 freights for you cheaper than you can carry them yourselves, is it not 
 best to let them do it?" I answer: ^^'ashington and Jefferson, Madi- 
 son and Jackson all said "no;" and I am still hunting for better 
 Americans than they were. England has said "no" to that question 
 for three hundred years; Bismarck said "no," and German j' is reaping 
 the benefit of his wisdom; France has said "no" and Japan has said 
 " no " most emphatically; and the reasons for that reply — so well stated 
 by the fathers of this nation in the days when all parties joined- in 
 building up shipping and in looking toward the ultimate good, instead 
 of at the temporary objections which can always be so easily tossed at 
 every distinctive national policy — have never been weakened. 
 
 WHY JiOT "fKEE SHIPS?" 
 
 To the question of "Why not free ships?" I answer, that the 
 legislation with which Congress has burdened our shipping, aside from 
 the fact of the higher wages paid, makes it impossible for us at present 
 to compete successfully for the world's carrying trade — facts clearly 
 established by the statistics collected during Mr. Cleveland's last 
 administration. The fact that American ships are lying idle, or are 
 being turned into barges for coasting service because they can not 
 earn running expenses, to say nothing of their cost, is a complete 
 answer to that question. There is one reason, and one alone, why any 
 man acquainted with the shipping business would ask the privilege of 
 putting foreign-built ships under the American flag and that is, to ram 
 them into the coasting trade to compete with the high-priced American- 
 built vessels now sailing there. 
 
 But there is another reason which I submit should be of itself con- 
 clusive against the policy of free ships. The chief reason why England 
 is the shipyard of the world to-day is that the volume of her building 
 is so enormous that her yards can specialize and duplicate, and to build 
 an American merchant m'arine in her yards is merely to increase the 
 volume of that business and, consequently, to increase that building 
 advantage, while taking from the American yards the very volume of 
 
244 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 work which is one of the most important things needed to insure cheap 
 construction in the United States; so that free ships means the destruc- 
 tion of the American shipbuilding industry. 
 
 WHEN AMERICA LKD THE WORLD. 
 
 If it were true that it would not be possible for us within a reason- 
 able time to build vessels in America as cheaply as they can be built 
 in Europe, then it might be the part of statesmanship to let the 
 industry perish. But it is not true. We ever, so long as the Gov- 
 ernment permitted it, stayed in the van of shipping progress. _ We 
 sent the ni"st steamship across the ocean; we developed the clipper 
 and the type of ocean sail carrier that is now copied by the world. 
 In the fifties we had the finest steamships afloat, headed by the Baltic^ 
 of 2,800 tons. We then had on the ocean (1851) a fleet of 96 steamers, 
 of nearly 100,000 tons, employing 4,548 men, and a coast steam fleet 
 of 636 vessels, of 212,500 tons. (Cong. Globe, vol. 21,, pp. 745-1146, 
 1147, and Ex. Doc. No. 42, Senate documents of 1851-1853.) And one of 
 the men who helped to place us in that high position, and one of those 
 statesmen who fought so ably to secure additional support and addi- 
 tional bounties to those fine ocean steamers in their war with the 
 Cunarders, was Senator Lewis Cass, of Michigan, who had been Sec- 
 retary of War under Andrew Jackson, and could recognize the "Old 
 Hermitage" brand of statesmanship. 
 
 BLUNDERS OF CONGRESS. 
 
 Given the same opportunities, the same volume of business, and the 
 same encouragement to equip and supply shipbuilding plants, and the 
 Government aid required while we create American experts in each 
 department of shipbuilding, a result only possible of attainment when 
 the amount of work is sufficient to keep men steadily employed in their 
 one particular branch of construction, there is no question but that we 
 can build ships in America as cheaply as they build them in England. 
 Our steel bridges and locomotives prove that, for you put a locomotive 
 in a steel bridge and you've a steamship; and shipping has a claim on 
 Congress different from and greater than that of any other industry, 
 for this, among other reasons: When the civil war closed there were 
 nearly 1,000,000 tons of American shipping under foreign flags, put 
 there for preservation and to hold the trade which had been built up 
 by American merchants until peace should come; and Congress refused 
 to permit those vessels to return to the flag, compelled the American 
 millions of capital to remain in them to build up our competitors' fleet. 
 Then Congress put such a tax on iron that it could not be used for ship 
 construction, a mistake attempted to be rectified after we had practi- 
 cally struggled out of existence in our heavy wooden ships and when 
 free material in taxed yards could avail us nothing; and thus that great 
 industry is dying. One party having assisted in pushing it into the 
 grave, the other won't let anybody help it out; and about once in four 
 years they both hold up their hands and say: "Alas, poor Yorick." 
 Probably that remark is of great assistance to poor old Yorick, who's 
 getting in about his last kick. 
 
 Subsidies are open to the objection that they are not self -regulating 
 and may continue beyond the period when they are actually justified, 
 
HEAEINGS BEFORE THE MERCHANT MARINE COMMISSION. 245 
 
 while discriminating^ duties will necessitate the abrogation of treaties 
 and may mean an imposition of duties on goods now imported free, 
 while practically failing to reach the rich passengers of the great ocean 
 liners. But the policy pursued by England in the use made of her 
 light dues, the policy followed by our forefathers in the imposition of 
 high tonnage taxes, offers a solution both simple and sure and one that 
 can be put in force at once. The total entries of vessels at United 
 States ports last year (Com. of Navigation Rept., p. 120) amounted to 
 24,697,692 tons, of which 20,816,656 was foreign and but 3,881,036 
 tons American. Had a uniform tonnage tax of |0.50 per ton (the old 
 foreign rate) been uniformly collected from these vessels it would haAe 
 made a marine fund of $12,348,846, of which the foreigner would have 
 paid $10,408,328, while the American would have paid but $1,940,518. 
 
 A TONNAGE TAX FUND. 
 
 This fund could then have been distributed among all vessels which 
 engaged at all in the foreign trade according to tonnage and miles 
 sailed, on principles something similar to those of the fishing bounties 
 which this Government formerly paid. As the amount of American 
 tonnage increased, the contribution of the foreigners to this marine 
 fund would decrease, the amount of money which American ships 
 would receive would likewise decrease, and when we had attained 
 the half of our carrying trade, which amount Fisher Ames declared 
 to be our fair proportion, the sum which each vessel would receive 
 would be so small that it would just about equalize the difference 
 caused by our higher wages and better food, and there would be no 
 inducement to an undue enlargement of our fleet. The details are 
 matters of mathematics; I shall not go into them here, but I will point 
 out that to this legislation our treaties are a protection instead of an 
 obstruction. As this is a plan which can only benefit while the bene- 
 ficiary is in the minority, it can not be used against us. For example: 
 England can not put such a tax on us, because she would be compelled 
 to put it on the vessels of other nations with which she does business; 
 she can not discriminate against us under the treaty, and her com- 
 merce will not permit that general taxing. Germany can not use it 
 against us for the same reason; she would have to put it on English 
 vessels, and then what would become of those "made-in-Germany" 
 goods which find such a market in Britain? We could not do it suc- 
 cessfully if we were a great carrying nation, but unfortunately on that 
 score we are oppressively safe. 
 
 What would be the result? The same that we achieved in the days 
 when the Government gave us a chance. We always paid our ship- 
 wrights higher wages than were paid in any other country, though 
 compelled to gather our material from all along the Atlantic coast, 
 but we developed the typical American vessel, and we took the 
 business. 
 
 You could tell those swift Baltimore clippers the minute their great 
 sails broke through the horizon. 
 
 Europe bought and copied them, but there was the something in 
 them and in the man at the wheel that she could not copy — the same 
 intangible something that appears on the waters of New York Bay 
 every time the experts of England come over here and take a cursory 
 glance at the cup. 
 
246 HEARINGS BEFORE THE MEROHAKT MARINE COMMISSION. 
 
 A gentleman said we did not know how to huild vessels. We would 
 do what we have done on the Great Lakes. There is a type of vessel 
 you can not find elsewhere on the globe — more than 1,000,000 tons of 
 characteristicallyAmerican craft that can transport freight cheaper 
 than any other water craft afloat; and still the owners of those 
 vessels pay their builders and crews the high American wages. 
 
 There is an inkling of what we would do in the giant freighters 
 building at New London, and there is where the farmers and other 
 exporters of this country are vitally interested in shipping. J. J. Hill 
 sees that. 
 
 TO SAVE THE FARMER. 
 
 With the great wheat regions of Canada being so rapidly developed, 
 with those railroads and subsidized English steamers supplied to insure 
 Canadian products the cheapest transportation, where is the great west- 
 ern farmer going to be when that imminent struggle for agricultural 
 supremacy comes on? What can save him and what can save other 
 American exporters their foreign markets? Only the one thing of 
 Ameiican brains developing cheap methods of transportation that can 
 afford to carry to market the corn which the Kansas farmer has so 
 often burned, and the goods which Jefferson foresaw must otherwise 
 perish on our hands. That, I submit, is the ultimate problem before 
 this Commission. Marine engineering does not stand still. The steam 
 freighter of fifteen years ago is pass6. Size has been the great factor 
 there. .But now comes machinery. We have not a satisfactory water- 
 tube boiler; we do not know what oil fuel means; we can not tell the 
 possibilities of the turbine engine. But we do know they are all in the 
 air and liable to fall any minute. And when they fall there will be a 
 fall in freight rates that will put the present steam freighters out of 
 business, and we do not want to be loaded up with them. 
 
 What will bring these things down the quickest and save millions 
 in the cost of transportation ? American brains, as they have always 
 done, and the sooner you set them to work the sooner that great saving 
 will begin. 
 
 Why do we not have American sailors? Because the total number 
 of our vessels — ocean, coasting, and Great Lakes combined — is con- 
 stantly decreasing. In spite of our giant coasting fleet we have 8,000 
 less vessels than we had in 1868. In the fifties men left $3 and $4 a 
 day in Bath to live in an ill-smelling hole called a forecastle and eat 
 out of little wooden tubs for $12 to |l5 per month. Why ? Because 
 the^r dreamed of the day when they would be captain. Now about the 
 only thing the sea dreamer can see ahead of him is the poorhouse, and 
 he sheers off. 
 
 TRICKED BY OUR RIVALS. 
 
 We have been buncoed for thirty years. England saj^s, "I do not 
 charge you any tonnage tax," but she has been charging us light dues, 
 whicn were a good deal bigger, and our lights are free. France has 
 been giving us the glad hand for years, and meanwhile under some 
 names that I can not pronounce she has been charging us a franc a ton 
 every time we called on her, and pays her entire tonnage and sailing 
 bounties out of these collections, and we have been letting her off for 
 6 cents. Is it not about time for us to say, "We are after you, my 
 dear Gaston." Norway charges us 35 cents per ton. 
 
HEARINGS BEFOEE THE MERCHANT MARINE COMMISSION. 247 
 
 And Germany ! A\'ell, it makes me 1^1 u«h the way Germany unloaded 
 the gold brick of no national tonnage dues on your Uncle Samuel, 
 and he strutted about with it bulging in his coat-tail pocket and bang- 
 ing against his legs until he found that the only way for him to take 
 advantage of that privilege was to send his ships into Germany by 
 rail, as trie seaports had i-eserved the right to collect all the dues which 
 the Imperial Government did not. And that is the way thej^ have 
 been handing things to the American merchant marine for thirty 
 years, and the Government has been so busy with brown-tailed moths, 
 and boll weevils, and garden seeds, and in elevating the rent of some 
 |3 post-office that it has not had time to protect this great industry; 
 and still folks talk of retaliation. We have been smitten on both 
 cheeks until the flesh is all gone, and now some Christian gentlemen 
 suggest that we give our adversary a crack at the bone. I draw the 
 line at the bone. 
 
 Most of the men who have addressed you have, plead for an industry 
 separate and distinct. I put the question on the ground where the 
 forefathers put it. 1 read the words of their undimmed wisdom, and 
 I find that it is the problem of the permanent prosperity of this whole 
 country that is now intrusted to you. Do not think I exaggerate— it 
 is true. 
 
 I thank you, gentlemen, for your courtesy. 
 
 STATEMENT OF F. B. THURBEE. 
 
 F. B. Thurber, president of the United States Export Association, 
 appeared before the Commission. 
 
 Mr. Thttrbee. Mr. Chairman and gentlemen of the Commission, 
 involved in the subject of the American merchant marine are broader 
 questions than the cheap carriage of our products, although this is 
 important. 
 
 Every ship is a missionary of trade, and steamship lines work for 
 their own countries just as railroad lines work for their terminal 
 points. 
 
 It is as absurd for us to rely upon the ships of competing nations to 
 distribute our goods as it would be for a department store to rely upon 
 the wagons of a competing house to make its deliveries. 
 
 Everybody admits that a powerful navy is necessary and Democrats 
 and Republicans alike are willing to vote a hundred millions a year for 
 a Navy, but Democrats shy at the word "subsidy" and balk ait spend- 
 ing 10 per cent of this amount in building up a merchant marine 
 which would be an auxiliary Navj% nearly self-supporting in time of 
 peace, a militia of the seas in time of war, and would save our pro- 
 ducers in reduced freight rates annually more than the subsidy. 
 
 JEFFERSON FOR SUBSIDY. 
 
 To a business man this is incomprehensible, and I believe it to be 
 one of the reasons why the country is unwilling to put the Democratic 
 party in power. Jefl'erson and all the fathers of the Democratic party 
 were advocates of subsidies. At any rate, it ought not to be a party 
 question any more than a navy is a party question. 
 
 As to methods: To restore our merchant marine 1 would advocate 
 following "the lines of least resistance," as indicated by our chief 
 competitors for the world's trade. 
 
248 HEAEINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 First. Subsidies under the name of liberal mail pay. 
 
 Second. Subsidies to every ship available for an auxiliary navy. 
 
 Third. Subsidies to our fishing fleet, every one of which is a school- 
 ship for our Navy, educating the men who take their lives in their hands 
 when they man our torpedo boats or submarine destroyers. 
 
 Fourth . Subsidies in the form of a rebate in duties on goods imported 
 in American ships, if this can be done without abrogating treaties con- 
 taining the " Most- favored-nation " clause. 
 
 In short, any and all methods to get there. 
 
 For a nation with a greater coast line than any other nation, a nation 
 with maritime instincts, a nation with a history of skill and intrepidity 
 on the ocean from Paul Jones to George Dewe5% it is a disgrace that 
 American over-sea exports carried in American bottoms should have 
 declined from 90 per cent down to 9 per cent when commerce on land 
 has increased in a corresponding ratio. 
 
 POLITICS THE CAUSE. 
 
 Politics are at the bottom of this disgraceful situation. My brother 
 and myself invested $200,000 in the Roach Line to Brazil because we 
 thought it a shame that an American merchant should have to send his 
 letters to South America via Liverpool, and we lost every cent of it, 
 as every other stockholder did, because the policy of our Government 
 at that time was to pay only sea postage, which on a new line amounted 
 to little or nothing. It amounted to about $3,200 a year — a sum which 
 did not pay the boat hire for landing the mails at the nine ports our 
 steamers touched at, while little Brazil contributed about |100,000 a 
 year for a mail subsidy. If the great United States had done as much 
 it would have been the straw that would have turned the scale between 
 the success and failure of that line. 
 
 Grover Cleveland was President of the United States at that time, 
 William C. Whitney was Secretary of the Navy, and Don M. Dickin- 
 son was Postmaster-General — all good American citizens in most 
 respects — but political policy controlled, and John Roach,' the pioneer 
 steel shipbuilder, and as good an American citizen as ever lived, was 
 held up m his naval contracts, was hounded into bankruptcy, and died 
 broken hearted. 
 
 Such is politics, and if the word "subsidy" is to continue to be a 
 political shibboleth, at which a large part of our good citizens shy, as 
 a horse shies at an umbrella, we will wait a long time for an American 
 merchant marine. 
 
 From a debate which took place in the United States Senate, how- 
 ever, February 16, 1899, when the postal appropriation for a fast-mail 
 train to the south was under consideration, I find some consolation. 
 In this debate .five southern Senators, Messrs Sullivan, of Mississippi; 
 Money, of Mississippi; Bacon, of Georgia; Morgan, of Alabama, and 
 Tillman, of South Carolina, while disavowing their belief in the general 
 principle of subsidies, advocated it in that case, and I believe that 
 politics will not always dominate business or j)atriotism and that 
 Democrats and Republicans alike will join in sustaining the sentiment 
 contained in the dying words of Commodore Lawrence, ' ' Don't give 
 up the ship." 
 
HEAEINWS BEFORE THE MERCHANT MARINE COMMISSION. 249 
 
 As president of the United States Export Association at the present 
 time, I have had to study what is necessary to get our goods into for- 
 eign markets. For two years I was also chairman of the committee 
 on foreign commerce of the New York Chamber of Commerce, and 
 during all my business career 1 have been a large shipper, seeking to 
 get my goods into foreign markets. What we want to know is, how 
 we are going to do it? I say, observe the methods that our successful 
 competitors for the world's trade have observed, and do each and 
 everything they have done to accomplish that end. 
 
 I am for subsidies for mail steamers; I am for differential duties, if 
 they are practical in view of our existing treaties; I am for bounties, 
 such as Mr. Hill advocated, or any other method which will enable us 
 to, get there; and it may be necessary to have some of each. 
 
 Now, Mr. Chairman and gentlemen, having said that, I have said all 
 I could say if I were to talk for a month, and I thank you for the 
 opportunity of saying it. 
 
 PAPERS BY WM. W. BATES. 
 
 The Chairman. Is Capt. W. W. Bates present? 
 
 Mr. LiNDON W. Bates, jr. Capt. William AV. Bates has asked me to 
 come before the Commission and submit to you two articles, one of 
 which is "Our maritime reciprocity conventions examined in detail." 
 It deals with the various conventions we have had at various times 
 with foreign nations. 
 
 The other article is entitled "The question of policy for American 
 shipping." In this paper Mr. Bates takes the view that direct sub- 
 sidies are not constitutional. In the first place they involve a tax 
 and in the second place history has shown them unsuccessful to a large 
 extent. His remedy is discriminating duties on indirect commerce. 
 He proposes to increase tonnage taxes on foreign ships, and to lessen 
 duties on goods imported by American vessels. This remedy, he 
 claims, is simple, requires no complex machinery, is perfectly fair, 
 and was satisfactorily tested in our early historj'^. 
 
 The Chairman. The papers submitted by Captain Bates will be 
 printed in the record. 
 
 Our Maritime Reciprocity Contentions Examined in Detail. 
 
 Of foreign wigin, of no use to American shipping, hut the source of 
 its decadency, and the loss of our carrying trade — all should he termi- 
 nated forthwith. 
 
 [By Hon. Wm. W. Bates, former Commissioner of Navigation.] 
 
 That our shipping in the foreign trade has long been in a state of 
 decadence, and that the carriage of our oversea commerce has nearly 
 all been lost, are facts widely known, but the cause of this adversity 
 is not so well understood. The reason for this seems to be that it is 
 easier to ascertain a fact than to search out the influence tending to 
 bring it into existence. This is certain: Our merchant marine, in its 
 early and palmy days, was the acknowledged "child of protection." 
 This designation still obtains as to domestic trade, and we know that 
 it continues to prosper. But our marine in the foreign trade, flourish- 
 ing while protected, is now almost extinct, the significant fact being 
 
250 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 that it is now run under a policy of "maritime reciprocity,'" which 
 may be descril)rd as false " free trade." If it were real free trade, 
 and competition was as fair as open, we should have held on much 
 better, but conditions under our foreign-trade policy are not those of 
 free and fair trade; while there is no protection to compensate the 
 foul play of our rivals. Forgetful of important facts in vessel history, 
 we have sages who tell us that our misfortune has overtaken us because 
 it costs more to build and run our ships than foreign vessels. But it 
 was always the case that foreign shipwrights and seamen worked for 
 lower wages than American, while our builders had to import much 
 foreign material aud equipment; and it was certainly the fact that 
 while our foreign carrying was protected we were not troubled with 
 economic problems. These do not concern us to-day in our protected 
 domestic trade; moreover, history has never taught that the shipping 
 of the cheapest build and operation, with no other advantage, would 
 beat its rivals. 
 
 The test of a policy is experience under it. Our present shipping 
 policy having been gi'adually introduced, the country was unaware of 
 its adverse tendency until after the civil war, when it came to be con- 
 sidered how best to rehabilitate our impaired carr3ang trade and to 
 resume our place upon the ocean. It was then perceived that many 
 disadvantages would attend our endeavors. That, in fact, before the 
 war came shipbuilding had far outrun ship owning — we had a surplus 
 of tonnage that could neither get employment nor command a sale, 
 and from 1830 to 1861 we had lost 24 per cent of carriage in our own 
 commerce, having during this period the most efficient shipping in the 
 world. In this period metal ships and steam propulsion cut no adverse 
 figure of consequence; wood and sail shipping did the world's freight- 
 ing. But there was an influence at work cutting down our percentage 
 of carriage and increasing foreign, even while our tonnage augmented. 
 Throughout this period our Government was extending the mistaken 
 and ruinous policy adopted in 1828. One nation after another was 
 demanding its benefits and promising to observe the spirit as well as 
 the letter of "maritime reciprocity," which professed to remove all dis- 
 tinctions of flag and to establish an oj)en course to the fair competition 
 of all nations, in the carrying trades of all. 
 
 But this policy soon became for us a contingency, a mere chance, 
 and a certainty in favor of our rivals. All sorts of devices have been 
 resorted to by them, to avoid fair and open competition, and to pre- 
 vent the employment of American ships, even in our own trade. Our 
 experience is more than ample to prove that the promises of rivals are 
 undeserving of confidence, only means to an end, slippery and worth- 
 less. Depending upon fair play, we have played with the dice loaded 
 against us; we have consequently been robbed of our shipping power, 
 beaten and ejected. No one can maintain that the convention" 
 nations have not resorted to protection of some kind for the maintenance 
 of their marines. Not one of these nations puts faith in the principle 
 of a fair and open competition, or will sacrifice to it a singleton of its 
 shipping. We have sacrificed to this Dagon almost our last fleet in 
 the foreign trade. It is time, therefore, to cease steering by a false 
 compass. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 251 
 
 THE CAU.se of changing OUR POLICY. 
 
 Our change of polic}' was not voluntary, as some suppose. We owe 
 it to the aggressive disposition of a rival arrogating to herself the 
 "sovereignty of the seas.'' Immediately after acknowledging our 
 independence in a treaty of peace, 1783, the King proclaimed the clos- 
 ing of the ports of his colonies and islands in America to vessels of 
 our flag. Only British bottoms could carry either way. Intending 
 not to execute some of the provisions of the treaty, certain matters 
 were delayed to our great annoj'ance. A war with France being 
 declared in 1793, an occasion was furnished to seize our vessels, con- 
 fiscate their cargoes, and impress our seamen. Under the Union and 
 the Constitution we had arranged such regulations of commerce as 
 were building up shipping and commercial power contrary to British 
 interest. This must be stopped. War was imminent, for the provo- 
 cation was intentional and very great. However, as it would be cheaper 
 to beat us by diplomacy than by arms, it was intimated to the Presi- 
 dent that the British Ministry would make a new treaty. Judge Jay 
 went to London and the treaty of his name was made, and, after vig- 
 orous debates in Congress, ratified. 
 
 In this treaty any increase of our ship protection by discriminating 
 duties was forbidden, while it was stipulated that Parliament might 
 countervail the duties then existing as to British shipping. The coun- 
 tervailing was excessive, not a port was opened, and the British won 
 out. However, our flag still flew. Being neutral, it had an advan- 
 tage that the British could offset only by interference with voyages, 
 seizings, and outrages. From the first there had been advisers to the 
 Crown that the best way to prevent America from becoming a naval^ 
 power was to have perfect reciprocity in respect to ship protection — 
 no protection on either side, in which case Great Britain would have 
 many advantages for the object in view. In 1802, Parliament pro- 
 vided for this course, but our Government avoided the trap. In 1804, 
 Congress established a discriminative "light money" tax of 50 cents 
 a ton. This did not conflict with the treaty. Expostulations against 
 the outrages on our flag continuing, a treaty was offered us in 1806 
 providing for reciprocal free trade — no ship protection on either side. 
 This was rejected and England's misconduct grew worse and worse. 
 Apparently, she wanted' open warfare, so she might sweep our flag off 
 the ocean. After years of insult and suffering, in 1812 we gave our 
 hostile rival his coveted chance. Strange to say, he got all the naval 
 actions he wanted — only two victories out of 13 engagements. 
 
 When peace came to be made another opportunity occurred to get 
 our ship protection stripped off and British rivalry put on better foot- 
 ing. A "maritime reciprocity" convention must be made. The 
 British demanded that the Canadian boundary be fixed along the south 
 shore of the Great Lakes and preferred other unfair and extravagant 
 claims. Our commissioners yielded as to the rights of our shipping. 
 A convention for four years followed the ratification of the treaty of 
 peace for reciprocal unprotection in direct trans-Atlantic trade, the 
 colonial ports in America remaining closed. Thus our rival won out 
 at last, a way having always been found to continue the agreement. This 
 course of interference and coercion was resented by our people, but 
 Congress thought it better to submit than to have warfare between 
 
252 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 the countries. An act had to be passed authorizing the convention; 
 in its terms it had to be general and its benefits offered to all nations. 
 In thus changing our policy Congress violated the compact of union 
 with the shipping States; a compact without which neither the union 
 nor the Constitution would have eventuated. Nearly all the States 
 had protective navigation laws, which were to be laid aside in consid- 
 eration that the Federal Government supplied and enforced a uniform 
 system for ship protection. Thus a part of our Constitution was nul- 
 lified to conciliate an enemy, greatly to his advantage and to our 
 detriment. After eighty-nine years of humiliation, but of great pros- 
 perity in other lines of national endeavor, our power should be suffi- 
 cient to assert the supremacy of our Constitution and the rights of our 
 shipping States. 
 
 ARTICLES OF EEOIPEOCITY WITH PRINCIPAL NATIONS. 
 
 As some may think our reciprocity agreements are useful, or can 
 not with prudence be terminated, we will now examine them in order. 
 First, we shall discover that these agreements are not important 
 "treaties," but temporarjj^ undertakings, mainly as to ship protection. 
 Of 42 in all, made from time to time, but 22 remain, the others having 
 been terminated or nullified by the foreign nations concerned. No 
 foreign nation has ever hesitated to exercise its right in the premises. 
 These are that Congress may at any time terminate all such agree- 
 ments on one year's notice, after the original term has expired. 
 
 British ' ' convention ' ' for direct trade, ISIS. 
 
 ABSTRACT OF ARTICLES. 
 
 I. Freedom of commerce and navigation between the Territories of the United 
 States and those of Great Britain in Europe. 
 
 II. Import and export duties no higher or other than chargeable to goods of other 
 countries; no prohibition not extending^ to other nations to be imposed. No other 
 or higher duties on British than American vessels, and vice versa. Equal duties 
 on goods whether by British or American vessels. Same duties, bounties, and draw- 
 backs whether by British or American vessels. Ports of the provinces and islands 
 closed to American vessels. 
 
 III. American vessels may enter certain British East India ports on the footing 
 of other nations. 
 
 IV. Consuls of either country may reside in the other. 
 
 V. About duration — four years — and ratification. 
 
 This convention was continued for ten years in 1818, and indefinitely 
 extended by convention of August 6, 1827. The three articles follow: 
 
 I. Provisions of the convention of 1815 continued indefinitely. 
 
 II. "It shall be competent, however, to either of the contracting parties, in case 
 either should think fit, at any time after the exfjiration of the said ten years — that 
 is, after the twentieth of October, 1828 — on giving due notice of twelve months to 
 the other contracting party, to annual and abrogate this convention; and it shall, 
 in such case, be accordingly entirely annulled and abrogated, after the expiration of 
 the said term of notice." 
 
 III. Relates to ratification. 
 
 The " freedom of commerce and navigation," and the provision for 
 consuls is not general, but limited on our part to ports in Europe. 
 In no other case are we thus confined. There is no convention at all 
 for indirect trade on either side. There appears nothing in this one 
 necessitating its continuance, on our part, at the price of our shipping 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 253 
 
 power. We were twenty-six years without it, oi- a similar agreement 
 with any country, and none were found essential to development of 
 our navigation. The nations that haA'e given up these conventions get 
 along very well without them. 
 
 Treaty of commerce and navigalwii, 1816-1818, with, Siveden and Norway. 
 
 ABSTRACT OF ARTICLES. 
 
 I. Reciprocal liberty of commerce, security of traders. 
 
 II. Swedish and Norwegian vessels to be treated as United States vessels in ports 
 of latter, and reciprocally for American vessels. 
 
 III. No discriminating duties on imports on account of nationality of vessels 
 importing same, "from whatever place they may come." 
 
 IV. Like stipulations as to exports. 
 
 Y. The colonies included in above stipulations. 
 
 VI. Coastwise navigation reserved on both sides. 
 
 VII. No discrimination in purchase or carriage of imports for Government use. 
 
 VIII. Tonnage duties same as to other countries. 
 
 IX. No restrictions imposed upon importations. 
 
 X. No discrimination in duties, drawbacks, and bounties on exports and imports. 
 
 XI. Vessels entering port, not wishing to unload, to depart free of duties on hull 
 and cargo. 
 
 XII. V essels landing part of cargoes to pay no duties on remainder. 
 
 XIII. Provisions for consuls. 
 
 XIV. Provisions concerning deserting seamen. 
 
 XV. Concerning shipwrecks. 
 
 XVI. Concerning quarantine. 
 
 XVII. Concerning revival of certain articles in the treaty of 1783 relating to vessels 
 and "favored nations." 
 
 XVIII. Concerning blockades unknown to vessels. 
 
 XIX. "The present treaty to continue in force for ten years, counting from the 
 day of exchange of ratifications; and if before the expiration of the first nine years 
 neither of the high contracting parties shall have announced, by an official notifica- 
 tion to the other, its intention to arrest the operations of said treaty, it shall remain 
 binding for one year beyond that time, and so on until the expiration 'of the twelve 
 months which will follow a similar notification, whatever the time at which it may 
 take place." 
 
 XX. Concerning ratification. 
 
 This negotiation, styled a "treaty," like others similar, is only a time 
 agreement. It was the first one looking to the utter stripping and 
 final ruin of our carrying trade, its third article providing that no pro- 
 tection should exist against Swedish and Norwegian vessels bringing 
 imports from "whatever place," port, or country. In the convention 
 of 1816-1818, which this of 1827 superseded, articles 3 and 4 provided 
 for reciprocity, as between the carriage of goods by American vessels 
 to Swedish and Norwegian ports from all the ports of the West Indies, 
 and the carriage of goods by Swedish and Norwegian vessels from all 
 the poi-ts of the Baltic Sea into the ports of the United States, but the 
 Senate refused consent to this, and the articles were omitted. In 1822, 
 enlarging on this idea, Norway proposed reciprocity in the importa- 
 tion of goods from countries not her own — her vessels to bring from 
 the ports of the world to our ports, and she to reciprocate — but Con- 
 
 fress rejected the scheme. But policies change with administrations, 
 ohn Quincy Adams did what Monroe declined to do. The ' ' treaty " 
 of 1827 was made and ratified before the act authorizing foreign vessels 
 to import, under certain conditions, from "whatever place" in the 
 world thejr pleased, was enacted. The bill was pending, but might 
 have been defeated — and should have been. There never nas been any 
 use, much less advantage, in it for American vessels. To-day, there 
 
254 HEARINGS BEFOEE THE MEECHANT MAEINE COMMISSION. 
 
 is scarcely an}' carrying to or from these two Scandinavian countries; 
 all that is done is by their ships, while they also carry of our exports 
 and imports nearly one-third as much as we carry ourselves. Really, 
 but for this ' ' treaty " we should rai ely sec the Swedish and Norwegian 
 flags in our ports. All they do takes so much employment from our 
 own vessels — vessels whose trade our Government is under compact to 
 protect by regulations of commerce. This "■ treaty " protects foreign 
 shipping as against our own. 
 
 Convention of navigation and commerce, ISmS-SS, with France. 
 
 ABSTRACT OF ARTICLES. 
 
 I. Discriminating duties on goods exported in American vessels agreed upon for 
 two years. 
 
 II. Discriminating duties on goods imported in P'rench vessels agreed upon for 
 two years. 
 
 III. No discrimination on goods for transit or reexportation. 
 
 IV. Quantities composing a ton of merchandise. 
 
 V. Duties on tonnage, light money, pilotage, port charges and brokerage not to 
 exceed equal sums. 
 
 VI. Concerning deserting seamen. 
 
 VII. Duration of convention two years; if arrangement continues, as it may, extra 
 duties at the end of two years to be diminished by one-fourth, and so from year to 
 year, "so long as neither party shall have declared the intention of renouncing it" 
 "at least six months beforehand." 
 
 Under our act of 1828, and of the French legislature meeting it 
 (in 1862), French vessels now come with goods from all parts of the 
 world, taking away the employment of our vessels, having no permis- 
 sion by treaty or convention. Besides their bounties, they have the 
 remissness of our Government for protection. This remissness is 
 worth more than their "Treasury aid," for proper regulations of trade 
 would defeat that, so far as our "indirect" carrying is concerned. 
 
 Treaty of commerce and ii.aviijalion, 18SS-S9, vAth Prussia. 
 
 ABSTRACT OU AKTICIjES. 
 
 I. Eeciprocal liberty of commerce. 
 
 II. No discrimination in duties on vessels. 
 
 III. No discrimination in duties on imports on account of nationality of vessels 
 importing same from "any place." 
 
 IV. Explanation of above article — whether vessels clear and arrive direct or 
 indirect. 
 
 V. No discrimination in duties on account of nationality of imports. 
 
 VI. No discrimination in duties on exports on accotmt of nationality of vessels 
 exporting same. 
 
 VII. Coastwise navigation reserved on both sides. 
 
 VIII. Neither party to give any preference to goods on account of the importing 
 bottom. 
 
 IX. " Most-favoi'ed-nation " concession. 
 
 X. Concerning consuls and their jurisdiction. 
 
 XI. Concerning the arrest of deserting seamen. 
 
 XII. Certain stipulations in former treaties relating to circumstances in war time 
 revived. 
 
 XIII. Concerning blockades and passing same. 
 
 XIV. Concerning disposition of real and personal estates. 
 
 XV. Duration of treaty — "in force for twelve years from exchange of ratifications; 
 and if twelve months before the expiration of that period neither of the high con- 
 tracting parties shall have announced, by an official notification to the other, its 
 intention to arrest the operation of said treaty, it shall remain binding for one year 
 beyond that time, and so on until the expiration of the twelve months, which will 
 follow a similar notification, whatever the time at which it may take place," 
 
 XVI. Concerning ratification. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 255 
 
 This treaty and a declaration of accession by the Grand Duchy of 
 Mecklenburg-Schwerin to a treaty of commerce with Hanover con- 
 stitute the agreement in force with the German Empire. This Empire 
 is active in promoting German commerce and navigation by different 
 sorts of protection, our country helping it by the neglect to protect 
 our own. Next to Norway and Great Britain, Germany seems des- 
 tined to engross our carrying trade. Each of these nations seems to 
 enjoy peculiar advantages, not the least being our own impolitic adhe- 
 sion to a bad deviation in statesmanship. 
 
 Treaty of commerce and navigation, 1829-1831, with Austria-Hungary. 
 
 ABSTRACT OF ARTICLES. 
 
 I. Freedom of commerce and navigation. 
 
 II. No discrimination in tonnage duties. 
 
 III. No discrimination in duties on imports. 
 
 IV. Preceding stipulations apply whether voyages be direct or indirect. 
 
 V. "Most-favored-nation" clause — equality of duties. 
 
 VI. No discrimination in duties, bounties, and drawbacks on exports. 
 
 VII. Coastwise navigation reserved on both sides. 
 
 VIII. No discrimination in purchase of imports on account of nationality of ves- 
 sels importing same. 
 
 IX. " Most-f avored-natiou " concession as to future treaties. 
 
 X. Liberty to appoint consuls. 
 
 XI. Concerning property and estates. 
 
 XII. "The present treaty shall continue in force for ten years, counting from the 
 day of the ratiiications; and if twelve months before the expiration of that period 
 neither of the high contracting parties shall ha\e announced, by an official notifica- 
 tion to the (.ither, its intention to arrest the operation of said treaty, it shall remain 
 binding for one year beyond that time, and so on, nntil the expiration of the twelve 
 months which will follow a similar notification, whatever the time at which it may 
 take place." 
 
 XIII. Concerning ratification. 
 
 We ha^e 30 ports wheic Austria has one. All the advantages 
 accrue to her; though her cut into our carrying is small, her people 
 not being inclined to the pursuits of the sea like those of some other 
 countries. She subsidizes her lines of steamers for mail and war pur- 
 pose.s, and pays the charges of th& Suez Canal for all her tonnage 
 passing that work. 
 
 Treaty of commerce and navigation, 18SS-S3, with Russia. 
 
 ABSTRACT OF ARTICLES. 
 
 I. Reciprocal liberty of commerce. 
 
 II. No discrimination in tonnage duties or charges. . 
 
 III. No discrimination in duties on imports on account of nationality of vessels 
 importing same. 
 
 IV. The same rule to obtain whether arriving from their own or from foreign 
 ports. 
 
 V. No discrimination in duties on exports on account of nationality of vessels 
 exporting same. 
 
 VI. No discriminating duties on account of nationality of imports — prohibitions to 
 be general. 
 
 VII. Coastwise trade reserved on both sides. 
 
 VIII. Concerning consuls and vess^el crews. 
 
 IX. About apprehending deserters. 
 
 X. Estates — how to be disposed of. 
 
 XI. "Most favored nation" concci^sion. 
 
 XII. Treaty to extend to Poland — duration until January 1, 1839, "and if, one 
 year before that day, one of the high contracting parties shall not have announced 
 to the other, by an official notification its intention to arrest the operation thereof, 
 this treaty shall remain obligatory one year beyond that day, and so on until the 
 expiration of the year which shall commence after the date of a similar notification," 
 
 ^III, Concerning ratification, 
 
256 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Russia has but a small marine in foreign trade, but her flag appears 
 in our ports more often than our flag in her ports, save in the Pacific 
 of late years; and of late Russia has resorted to various protective 
 expedients. She pays subsidies to mail lines, and also the Suez Canal 
 dues to tonnage in general. 
 
 Convention of commerce mid navigaiion additional to treaty of January 19, 185H-53, with 
 
 the Netherlands. 
 
 ABSTRACT OF ARTICLES. 
 
 I. No discrimination In duties, drawbacks, and bounties on imports and exports. 
 
 II. Reciprocity to extend to colonies. 
 
 III. No discrimination in tonnage duties "from any place." 
 
 IV. Coasting trade and fisheries excepted. 
 
 V. Discriminating duties in favor of certain trade may be imposed. 
 
 VI. This convention to be additional to that of January 19, 1839, "and shall, alto- 
 gether, with the unmodified articles of that treaty, be in force for the term of two 
 years, commencing six weeks after the exchange of the ratifications; and further, 
 until the end of twelve months after either of the contracting parties shall have given 
 to the ofher notice of its intention to terminate the same, each of the contracting 
 parties reserving to itself the right of giving such notice to the other, after the expi- 
 ration of the said term of two years. And it is hereby mutually agreed that, in case 
 of such notice, this convention, and all the provisions thereof, as well as the said 
 treaty of 19th January, 1839, and the provisions thereof shall at the end of the said 
 twelve months, altogether cease and determine." 
 
 VII. Concerning ratification. 
 
 ARTICLES OF TREATY OF 1839 INCLUDED. 
 
 III. Privileges of consuls. 
 
 IV. National vessels those with passports or sea letters. 
 
 V. Concerning shipwrecks. 
 
 Dutch vessels bring twice as much from other countries as from 
 their own. We carry to their ports but little, their vessels doing 
 nearly all the trade both ways. The Dutch have been liberal to us 
 from the first, and have never resorted to unfair tricks of trade to 
 beat our vessels out of employment. They have been satisfied with 
 their natural advantages and with the above conventions. This is no 
 reason, however, for Congress to deprive our shipping of promised 
 protection. We should not make enemies by excepting friends; and 
 we should have no "favored nations." 
 
 Convention exenwting American vessels from the sound and belt dues with Denmarh, 
 
 1867-68. 
 
 ABSTRACT OF ARTICLES. 
 
 I. Navigation of the sounds and belts to be free to vessels of the United States. 
 (See III.) 
 
 II. Concerning lights, buoys, and pilots. 
 
 III. United States pays Denmark lump sum of 717,829 rix dollars in lieu of tolls 
 from time to time. 
 
 IV. "Most-favored-nation" privileges granted our citizens. 
 
 V. Convention of April 26, 1826, except fifth article, revived, "it being, however, 
 understood that a year's notice shall suffice for the abrogation of the stipulations of 
 the said convention hereby renewed." [The same had been abrogated April 15, 
 1856.] 
 
 VI. Time when convention shall be operative. 
 
 VII. Concerning ratification. 
 
HEABINGS BEFOBE THE MERCHANT MAEINE COMMISSION. 257 
 
 ABSTRACT OF ARTICLES REVISED. 
 
 I. "Most-favored-nation" concession. 
 
 II. Freedom of commerce and navigation. 
 
 III. No discrimination in tonnage duties on any account. 
 
 IV. No discrimination in duties on imports and exports. 
 
 V. Not revived. 
 
 \'I. Convention does not extend to coloniei:*. 
 
 A'll. Reciprocal privileges to citizens in each country. 
 
 VIII. Liberty to appoint consuls. 
 
 IX. Consuls must obtain exequaturs. 
 
 X. Bights of consuls, citizens of appointing States. 
 
 XI. Duration of convention, ten years. 
 
 Denmark made prizes of our vessels during the Eevolution, but 
 when we had succeded was anxious to have a treaty with us. It was 
 1826 before this eventuated. Even then claims were pending against' 
 Denmark for spoliations during the Napoleonic wars, to the amount 
 of $1,750,000. The sound dues were always an imposition upon for- 
 eign vessels. Our Government paid much more than our ships would 
 have paid. There is nothing in our dealings with Denmark entitling 
 her to our consideration. She never should ha^e had a " reciprocity " 
 convention. "We have a valuable commerce which she is now free to 
 and does exploit, while she has nothing to give in return for this 
 privilege. 
 
 Treaty of commerce and navigation, 1871, with Italy. 
 
 ABSTRACT OF ARTICLES. 
 
 I. Freedom of commerce and navigation and reciprocal privileges of persons. 
 
 II. Eight to travel and carry on trade. 
 
 III. Security to persons and property. 
 
 IV. No embargo or detention without indemnification. 
 
 V. No discrimination in duties, drawbacks, and bounties. 
 
 VI. No discrimination in duties on account of nationality of imports; no discrimi- 
 nation as to exports — "most-favored-nation" concession. 
 
 VII. Vessels entering a port may proceed to another- to discharge, but not do 
 coastwise business. 
 
 VIII. Certain vessels to be exempt from tonnage, anchorage, and clearance duties; 
 certain vessels not to be considered as in trade; what damaged goods to pay duties. 
 
 IX. Concerning shipwrecks. 
 
 X. Vessels may complete their crews. 
 
 XI. About vessels captured by pirates. 
 
 XII. In case of war and blockade. 
 
 XIII. What to constitute a legal blockade. 
 
 XIV. Vessel ignorant of a blockade not to be detained. Vessels in port when 
 established may sail. 
 
 XV. About contraband of war. 
 
 XVI. Citizens of either country may sail from any port and trade in the ports 
 of those who are enemies of the other. Free ships make free goods, in cases where 
 powers acknowledge this principle. 
 
 XVII. Proofs of nationality of vessels — their papers. 
 
 XVIII. Concerning right of search. 
 
 XIX. About vessels under convoy. 
 
 XX. Commanders of war ships must not violate persons and property of citizens — 
 pay if they do. 
 
 XXI. Eegulations in case of war. 
 
 XXII. Right of citizens in territory of other party. 
 
 XXIII. Courts to be open to complaints. 
 
 XXIV. "Most-favored-nation" concession. 
 
 XXV. "The present treaty shall continue in force for five years from the day of 
 exchange of the ratifications; and if, twelve months before the expiration of that 
 period, neither of the high contracting parties shall have announced to the other, 
 
 3a— 04 17 
 
258 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 by an official notification, its intention to terminate the said treaty, it shall remain 
 obligatory on both parties one year bevond the time, and so until the expiration ot 
 the twelve months, which will follow a similar notification, whatever may be ttie 
 time when such notification shall be given." 
 XXVI. Concerning ratification. 
 
 At the time this unserviceable document was passing the Executive 
 and Senate our shipping interest was suffering on the rack ot the 
 British Lloyds, and asking Congress for protection— from it knew not 
 what. The "Lynch committee" had held "hearings" and recom- 
 mended bounties. The Lloyds had made a rule for "foreign ships" 
 in 1870 operating to cast out of their register book all American 
 vessels, thus to prevent their employment and to capture trans-Atlantic 
 freights for British ships. This rule broke the back of our export 
 carrying of cotton, grain, provisions, etc., in a few years. This 
 "treaty" with Italy increased the number of our rivals, and equipped 
 a sharp competitor for service. Deficient in a knowledgeof facts, our 
 State Department was probably unaware of the mischief it was doing, 
 so was the Senate. When it was shown in 1870-71, from the report of 
 an officer of the Treasury Department, that our "maritime reciprocity" 
 policy was the real and potent cause of our decline in carrying, every 
 one of our conventions should have been terminated, but here was one 
 more made. The British should have been punished for, their piratical 
 discriminative marine inspection and underwriting policies, but the 
 public mind lost sight of everything but compensation for the pri- 
 vateering of the Alabama. Now, note the course of Italy, pajdng 
 bounties to her vessels, following the indecent course of France, that 
 they may beat our own out of employment right in our own ports. 
 Nations practicing such ethics have no claims upon our liberality. 
 Justice to ourselves would befit them better. 
 
 Treaty of commerce and navigation and trade-marks, 1876, vrith Belgium. 
 
 ABSTRACT OP AKTlCLES. 
 
 I. Eeciprocal freedom of commerce and navigation— no discriminating taxes to be 
 laid. 
 
 II. Belgian vessels to pay no higher tonnage duties, pilotage, harbor or other 
 charges than American. 
 
 III. American vessels to be treated as above. 
 
 IV. Coasting trade same as for "favored nations." 
 
 V. No discrimination between flags importing goods. 
 
 VI. Same treatment to flags in exporting. 
 
 VII. Premiums and drawbacks on equal footing. 
 
 VIII. Above articles do not apply to fisheries. 
 
 IX. Nationality of vessels depends on passports or sea letters. 
 
 X. Parts of cargoes remaining on board not dutiable. 
 
 XI. Goods while in warehouse not dutiable. 
 
 XII. "Most-favored-nation" concession; no discrimination on products of other 
 nations; duration of this article — to cease in one year from notification. 
 
 XIII. Concerning shipwrecks. 
 
 XIV. No "transit duties" to be paid. 
 
 XV. Concerning trade-marks. 
 
 XVI. "The present treaty shall be in force during ten years from the date of the 
 exchange of the ratifications and until the expiration of twelve months after either 
 of the nigh contracting parties shall have announced to the other its intention to 
 terminate the operation thereof; each party reserving to itself the right of making 
 such declaration to the other at the end ot the ten years above mentioned; and it is 
 agreed that after the expiration of the twelve months of prolongation accorded on 
 both sides, this treaty and all its stipulations shall cease to be in force." 
 
 XVII. Concerning ratification, 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 259 
 
 Belgium is one of the seven countries cutting deeply into the employ- 
 ment belonging to our own shipping — enabled to do so by this agree- 
 ment, made after it was well established that without proper protection 
 our marine was doomed to extinction. Of exports, Belgium takes to 
 other ports than her own 71.24 per cent, and brings from those ports 
 87.83 per cent of all she lands in ours (1902). None of this indirect 
 transport belongs to her marine, but most of it belongs bj^ right to 
 our own. 
 
 Treaty of commerce and navigation, 1S94-9S, vnth Japan. 
 
 ABSTRACT OF ARTICLES. 
 
 I. Mutual freedom of trade, travel, etc. ; taxes and exemptions equal — no discrim- 
 ination. 
 
 II. Freedom of commerce and navigation, as citizens. 
 
 III. Inviolability of dwellings. 
 
 IV. Equality of duties from "whatever place" arriving, 
 v. Equality of export duties and all port charges. 
 
 VI. No "transit duties" — equality of treatment. 
 
 "VII. No discrimination as to imports on account of flag. 
 
 VIII. "Most-favored-nation" treatment in all respects. 
 
 IX. All port privileges equal and reciprocal. 
 
 X. Coasting trade reserved on both sides. 
 
 XI. Concerning vessels in distress, shipwrecks, etc. 
 
 XII. Nationality of vessels, according to statutes. 
 
 XIII. Concerning deserting seamen. 
 
 XIV. Favored-nation privfleges, mutuality of. 
 
 XV. Concerning consular officers. 
 
 XVI. About patents, trade-marks, etc. 
 
 XVII. Abolition of foreign settlements in Japan. 
 
 XVIII. Former treaties superseded. 
 
 XIX. "This treaty shall go into operation on the 17th day of July, 1899, and shall 
 remain in force for the period of twelve years from that date. Either high contract- 
 ing party shall have the right, at any time thereafter, to give notice to the other of 
 its intention to terminate the same, and at the expiration of twelve months after 
 such notice is given this treaty shall wholly cease and determine." 
 
 XX. Concerning ratification. 
 
 If Japan had searched for a fulcrum to a monopoly of the carriage 
 of the commerce of the Orient with the United States, she could not 
 have found a better one than this "treaty." She is the only oriental 
 nation capable of such an achievement, and she found us too simple to 
 divine her intention. The treaty was effected in 1895 to become oper- 
 ative in 1899. She improved this time in perfecting a subsidy system 
 and in getting vessels built for trans-Pacific trade. The treaty put 
 her ships upon equal legal footing in our ports, while the subsidizing 
 was designed to gain advantages in footing over American vessels, 
 and to wrest employment from them. Japan was not satisfied with the 
 equalized footing which we had generously conceded to her, but resorted 
 to a plan to defeat our fair competition, throwing upon us the necessity 
 of subsididizing our marine, or terminating the treaty for unfairness 
 of conditions, and regulating our trade so as to confine her carrying 
 to her own products and ports. Japan only followed the commerci^ 
 ethics of Europe, it is true, but Europe was a nest of pirates not so 
 very long ago. Why should we have set up this nation, lately come 
 up from barbarism, to humiliate our own people on the ocean ? The 
 war with Russia will delay for a time the development of Japanese 
 shipping power, but she is likely in a few years, if we do nothing to 
 prevent it, to do our carrying with Korea, China, and other oriental 
 
I 
 
 260 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 cuuntrics besides her own. Our reciprocity policy is riglit into her 
 hand. Unless it shall be reformed and Japan confined to direct trade, 
 good-bjr to notions of American predominance on the Pacific. 
 
 INFERIOR COUNTRIES HAVING CONVENTIONS. 
 
 The following countries have conventions or so-called " treaties " 
 limited in time for "reciprocity," but having no vessels, they cut no 
 figure in our situation: 
 
 Greece, New Granada, Costa Eica, Argentine Republic, Paraguay, 
 Bolivia (recently without a port), Liberia, Honduras, Haiti, Elorea, 
 and Spain as to the Philippines for live years yet. 
 
 Reviewing the subject, it would seem from the contents of the vari- 
 ous agreements, some with few, others with many articles, and all 
 kinds of stipulations, that our Executive and Senate have given to 
 each country just what it demanded — at the cost of American shipping 
 power. Unless a stop can be put to this way of wasting our wealth, 
 and discouraging the energies of our people, and a reform of our 
 shipping policy be instituted forthwith, there is no real greatness ever 
 to be expected for the huge Republic of North America. Where 
 there is no hope there will be no endeavor. It is only hope fulfilled 
 that creates great nations, and makes human government seem divine. 
 
 The Question of Policy for American Shipping. 
 
 [William W. Bates.] 
 
 Now that the isthmian canal question is settled, it is believed by 
 many that the next grand question to consider seriously is that of 
 policy for American navigation. Surely our Government is not going 
 into the transit business for the pi-ofit on passing the vessels of the 
 world through the Isthmus of Panama. De Lesseps got the Egyptians 
 and the French into the project of the Suez Canal, but when the work 
 was completed there were no Egyptian or French vessels worth esti- 
 mation suitable to use it, nor are there many jet. In reality the 
 French dug the Suez Canal for Great Britain, she having the adapted 
 vessels, as we shall dig the more expensive channel at Panama, unless 
 Congress shall so legislate in behalf of shipiiing that there shall be an 
 American, as well as a British, use for the work. There M'as a time 
 in our history when Congress could be depended on for prompt action 
 where commerce and navigation were concerned, but only a few of our 
 people remember that time, it is so long ago. It is possible, however, 
 that proper action will be taken, but how promptly no one can fore- 
 tell. Of course, when built, there will be a naval and a domestic use 
 for the canal, but it will be a sore disappointment if there shall be 
 little or no use for it as a facilitation of our foreign trade, for which 
 we need ten times our present marine. 
 
 About the history and nianagement of our marine afl'airs it is pro- 
 posed to answer several questions in this article, though it would take 
 a book to tell the whole story.'* 
 
 We have two grand divisions of vessel transportation — the domestic, 
 or that between our own poi'ts, and the foreign-carrying trade — that 
 
 aSee "American Navigation," l)v the writer, Houghton, Mifflin & Co., Boston 
 and New York, 1892. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 261 
 
 to and from foreign countries — and our policy is different for each of 
 these tnulps. Why is this, and how came it about? 
 
 Tlie domestic (■.•uiyinj^- trade, having a))solute protection, is in a 
 flourishing condition; but the foreign carrying trade, having no pro- 
 tection whatever, is in a ruined state and has not prospered for many 
 years. Why is the domestic trade favored and the foreign ti'ade dis- 
 <ouraged by the Government, while the Constitution provides for 
 ecjuality of rights for all ti'ades through parity of rights for all 
 persons? 
 
 Originally we had the same policy for both trades, and being pro- 
 tective, botli flourished. Why was this policy changed — protection 
 withdrawn as to the foreign trade — and, this being found detrimental, 
 why is it continued? 
 
 Docs the Constitution empower Congress to provide protection to 
 navigation as an industry; and if so, by what means? 
 
 Wnat are the principles of a proper shipping policy for the United 
 States ? 
 
 These questions may be answered in least compass by stating the 
 facts regarding our navigation laws — their origin, necessity, the com- 
 pact for them, their enactment, success, partial and full suspension, 
 and the influence upon our Government now exercised by foreign 
 nations, in consequence of conventions for what is called "maritime 
 reciprocity." 
 
 Long before the independence of the original States the .people 
 indulged the idea that vessels of their own engaged in their own 
 trade would be profitable, and many were built and used. While their 
 right to do this was natural and indisputable, the mother country dis- 
 approved of it, and specially of the acts passed to encourage ship- 
 building and navigation. These laws levied discriminative duties of 
 tonnage, and even of tariff, intended to favor domestic vessels, and 
 discourage foreign. On complaint of British shipowners the King 
 soon nullified them as to British vessels. Therein originated the 
 British jealousy of American shipping which has pursued its object 
 ever since down to the present time. 
 
 Immediately after the peace of 1T83, a royal proclamation closed all 
 British- American ports, including the West Indian, to vessels of the 
 United States. British vessels only were allowed in this traffic. This 
 adverse action created excitement from North to South, and was 
 strongly resented. A committee of the Continental Congress, headed 
 by Thonuis Jefferson, considered the sul)ject and recommended a uni- 
 form regulation of commerce, by consent of the several States; that, 
 by means of discriminating duties of toimage, or of tarifi', or by port 
 regulations, power could be used to enforce the rights of our shipping, 
 and to encourage its increase. But this movement failed through the 
 disposition of the State legislatures to disagree to the terms of Con- 
 gress, and to insist upon their own. Ai)Out the same time the appli- 
 cation of Congress for authority to Icvj? tariff duties on imports failed 
 also; and, plainly, a new govcrumerit was seen to be necessary for 
 several reasons, but these two were the principal. Meantime the 
 States, each for itself, passed navigation laws based on the principle 
 of preference to domestic vessels — discrimination against foreign. As 
 each State was foreign to the others, it soon developed that only a 
 uniform system of shipping law would ever justly promote the growth, 
 or insure the success and permanence, of an American marine. 
 
262 HEARINGS EEFOBK THE MERCHANT MARINE COMMISSION. 
 
 When the Constitutional Convention assembled the several States 
 had regulations as follows: 
 
 (1) Discriminating tonnage duties: New Hampshire, Massachusetts, 
 Rhode Island, Connecticut, Maryland, and Georgia. 
 
 (2) Discriminating tonnage and tariff duties: New York, Pennsyl- 
 vania, Virginia, North Carolina-, and South Carolina. 
 
 (3) Tonnage duties only: New Jersey and Delaware. 
 
 The discriminative tonnage duties of all the States averaged about_60 
 cents a ton. New York and Virginia discriminated against British 
 vessels in excess of other foreign. Maryland and Virginia favored 
 the Dutch and French, on account of treaties, lleciprocation of ex- 
 emption from duties had been introduced between several States. 
 
 Called, as it was, largely on account of the shipping situation, ship 
 protection was a prominent subject. Different drafts of constitutions 
 offered for consideration provided for power to enact regulations of 
 commerce, not only between the States, but with foreign countries. 
 In short, to effect the union desired, the Federal Government neces- 
 sarily took over the ship protection of the States, and virtually prom- 
 ised to perpetuate it through the power to regulate commerce, which 
 was provided in the Constitution for that purpose. All the debate 
 there was turned upon the point whether navigation laws should require 
 a two-thirds or a majority vote. Mr. Gorham, of Massachusetts, thus 
 closed the discussion: 
 
 " If the Government is to be so fettered as to be unable to relieve 
 the Eastern States, what motive can they have to join it, and thereby 
 tie their own hands from measures which they could otherwise take 
 for themselves? The Eastern States were not led to strengthen the 
 Union by fear for their own safety. He deprecated the consequences 
 of disunion, but if it should take place it was the southern part of the 
 continent that had the most reason to dread them. He urged the 
 improbability of a combination against the interest of the Southern 
 States, the different situations of the Northern and Middle States 
 being a security against it. It was, moreover, certain that foreign 
 ships would never be altogether excluded, especially those of nations 
 in treaty with us." 
 
 The two-thirds clause reported was then struck out, and clause 3 of 
 section 8 of Article I of the Constitution, empowering Congress to 
 regulate commerce for the purpose of creating and maintaining an 
 American marine, was agreed upon with unanimity. No other indus- 
 try was thus distinguished. Moreover, this grant is placed third in 
 the list of enumerated powers, only the revenue authority preceding 
 it: "To regulate commerce with foreign nations and among the several 
 States, and with the Indian tribes." 
 
 This clause authorizes navigation acts for the admission or exclusion 
 of foreign vessels, for the discriminative taxation of their tonnage or 
 their cargoes, and any other regulation to equalize, the footing-in-fact 
 of our own with foreign vessels, for the control of competition and 
 rivalry. 
 
 That Congress, at its first and early sessions, redeemed its virtual 
 promise to care for the merchant marine is generally known. In a 
 few years a system of commercial regulations was established and 
 proved successful. The laws gave preference to our own vessels and 
 discriminated against foreign, both in tonnage and in tariff charges. 
 The British Government, though it had stronger ship protection, 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 263 
 
 showed resentment, ceased to execute the treaty of 1783, and began to 
 molest our commerce. It sought a treaty which should nullify our 
 ship protection. The Jay treaty was made, 1794, agreeing not to 
 increase protective duties against British vessels and to allow England 
 to countervail our own. This she did excessively and unfairly, but 
 the avails were inconsiderable. 
 
 The war with France then raging made an occasion to harass our 
 commerce, seize our vessels and cargoes, press our seamen into 
 men-of-war, and finally to provoke the war of 1812. Surely this 
 course would sweep our ships off the ocean, but more British flags 
 were struck in this war, lasting about two years, than in the sea- 
 fighting of a century before. Our ship protection had done just what 
 the British knew it would — develop a sea power that disregarded the 
 prestige and might of England. 
 
 When peace came to be made, severe terms must be imposed. The 
 Canadian boundary line must be the south shore of the Great Lakes; 
 there must be a suppression of ship protection in direct commerce on 
 both sides, Surely then, with the West Indies closed, the British 
 flag would flourish. On shipping protection our commissioners gave 
 waj'. A convention was agreed upon for four years, removing pro- 
 tection on both sides in direct trans-Atlantic trade, the ports of the 
 West Indies and North-American colonies continuing shut. An act 
 was passed, 181.5, authorizing the convention, which, as it had to be 
 in general terms, opened our defenses to all nations desirous of 
 reciprocity in the removal of protective regulations in direct trade. 
 Thus Britain entered a wedge for the modification, and ultimately for 
 the reversion of our well-considered and successful shipping policy. 
 She had the convention time extended in 1818 and in 1827, and the 
 matter now rests on indefinite time, terminable on one year's notice. 
 A few other nations also obtained direct " reciprocity." 
 
 Determined on getting the West Indies opened. Congress, in 1818, 
 closed our ports to vessels coming from all shut ports. This act, sup- 
 plemented in 1820, deprived England of any advantage under the 
 convention, and was well calculated to obtain its object. In 1822 
 Norway passed an ordinance and proposed reciprocitj'^ in the indirect 
 trade — the one country to admit to entry the vessels of the other from 
 any port in the world, with the products of any country. At that 
 time, under an act of 1817, foreign flags were confined to direct trade. 
 Congress refused the proposal. In 1825 the British Parliament, 
 borrowing the Norwegian idea, passed an act looking to the opening 
 of West Indian ports, on condition that we permit British vessels to 
 come from every country, with the productions of every people. As 
 this was, in terms, unequal reciprocation. Congress rejected the over- 
 ture. In 1828, under Executive pressure. Congress passed an act for 
 full reciprocity, opening our ports to vessels of all flags, from all 
 countries, with the merchandise of all nations, and suspending our ship- 
 protecting regulations of all sorts, with respect to all countriesmeeting 
 this action. Great Britain declined then to reciprocate, but, on passage 
 of a special act in 1830, opened her West Indian ports at last. Our acts 
 of 1818-1820 caused this change in her policy. We gained scarcely 
 anything, because she put up the tariff in the islands to prevent that 
 result. In 1849 England felt obliged to modify her laws and take 
 advantage of our act of 1828, but no treaty or convention was made. 
 
 After 1828, according as foreign countries demanded the benefits of 
 
204 HEARINGS BEFORK THE MERCHANT MARINE COMMISSION. 
 
 tlie act, our shipping policy .sutfercnl a cliange from protective to non- 
 protective, as to foreign trade. In 1829 our vessels were carrying 
 nearly 90 per cent of our commerce, but now only 9. Before the 
 civil war our loss of carriage was 2-1 per cent (of the whole), during 
 the war it was 38 per cent, and since 18Y0, 26i — a reaction occurring 
 after the war. For our Government it should be said that, though 
 some feared the consequences, it did not suppose material injury 
 would follow the change of policy — begun in 1815, completed in 1828, 
 and gradually applied since. In 1828 it was taken in by a glittering 
 and sounding generality, "maritime reciprocity," in theory an elegant 
 appellation, suggestive of comity, equitable commerce, and high civili- 
 zation, Imt in practice these grand ideas changed into illusion, artifice, 
 and imposition. Most reciprocants and beneficiaries put off one sort 
 of protection only to put on anotner, worsting our marine by elusive 
 and unfair expedients. 
 
 There is scarce a pretension now that nonprotection is just the thing 
 for shipping of every country. Every aspiring nation having a con- 
 vention with us for reciprocity has resorted openly to any kind of 
 protection that seems desirable, to any extent deemed prudent — sub- 
 sidies, bounties, underwriting, and mercantile discriminations being 
 the principal. 
 
 It may be thus seen that a universal shipping policy, in its practice, 
 is irrational and absurd. It is but a plausible catchpenny conceit. 
 Each nation must consider its own case, and protect as may be nec- 
 essary; for nothing is sui'er than that one nation, if it can, will beat 
 and wreck the marine of another. The merchants and underwriters of 
 a rival will always give preference to that rival's flag. Of perfect dis- 
 interestedness man is incapable. No nation can depend upon fair play 
 from others for the development of its shipping power, j'et we have 
 leaned upon this reed for many years, as if it were a pillar of stone. 
 
 All our shipping conventions have overrun their times, and are now 
 terminable on one year's notice. Owing to the action of foreign 
 nations, but 22 out of 42 remain. We were twenty-six years without 
 such agreements, and none has ever been of benefit to our marine. 
 
 The act of 1828 has been considered an experiment in conciliation — 
 mainly intended to induce England to open her West Indian ports — 
 but it has never been considered in the light of its unconstitutionality. 
 It was a plain infraction of compact, a cleai' breach of trust, a viola- 
 tion of State and individual rights, and can not be excused on any 
 ground of national necessity. Navigation laws were promised as a 
 condition of union. Congress had no prerogative to nullify the rights 
 and thereby sacrifice the shipping interest of the seaboard States. It 
 held in trust for them the power that each might and would have 
 exercised for the protection of its vessels. Its plain duty was to dis- 
 charge that trust with fidelity. It is its bounden duty now to repeal 
 the wrongful act, and to put an end to suspension of navigation laws 
 in the interest of, or for the conciliation of, any other nation. We 
 are well able to honor our Constitution and to carry out the compact 
 of union. The right of the American ship to preference in American 
 connnerce is so just, so essential to national welfare, that its rights 
 must be redeemed and secured, even if it tasks the national power. 
 
 The President has recently said: " I think we of the United States 
 can not keep too fresh in our minds the fact that the men responsible 
 for the Government are not i-epr<'spntatives of the people, but the 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 265 
 
 people themselves, and that therefore heavy is the responsibility that 
 lies upon the people and upon all those who do most toward shaping 
 the thought of the people." 
 
 The people had nothing to do with violating the compact of the 
 union in the act of 1828. The question of stripping our marine in the 
 foreign trade of its protection was not an issue of the election that 
 landed John Quincy Adams in the White House and made Henry Clay 
 Secretary of State. These two politicians, more than all the people 
 besides, were responsible for the change of policy whicli has brought 
 ruin to our navigation. In 1896 a majority of the people voted that 
 the Government change back to original shipping policy, but two of 
 the people, William McKinley and Marcus A. Hanna, decided to dis- 
 regard the voice of the majority, and eight more years have been given 
 to foreign nations for their exploitation of our commerce, our consan- 
 guineous rival taking the cream of it. It is time some agency, patri- 
 otic and powerful, took it in hand to rule our affairs in respect to 
 .shipping. It would seem to be "up to" Congress and the Executive 
 to undo at least the disservice of Adams and Clay. 
 
 The following tables show the extent to which certain nations are 
 exploiting our foreign trade and transportation: 
 
 Exports of merchandise by ships of principal flags, 190S. 
 
 Flags in beneficial order. 
 
 Carried to 
 home porta. 
 
 Carried to 
 
 colonial 
 
 ports. 
 
 Carried to 
 other coun- 
 tries. 
 
 Total value 
 carried. 
 
 Carried 
 
 home 
 
 and colo- 
 
 nies.a 
 
 
 $492,726 
 
 5,163,948 
 
 12, 741, 284 
 
 474,483,414 
 
 104,118,642 
 
 19,403,266 
 
 31,721,606 
 
 
 831,148,376 
 
 12,791,745 
 
 9,246,191 
 
 241,861,774 
 
 40,525,549 
 
 5,707,873 
 
 6, 776, 876 
 
 831,641,102 
 17,955,693 
 21,988,575 
 785,393,223 
 144, 650, 540 
 25,143,044 
 39,105,430 
 
 Per cent. 
 1.55 
 
 
 
 28. 76 
 
 Italian 
 
 81,100 
 
 69,049,035 
 
 6,349 
 
 31,905 
 
 606,948 
 
 57.95 
 
 British ... 
 
 69.20 
 
 
 71.98 
 
 
 77.29 
 
 Dutch 
 
 82.67 
 
 
 
 Above flags 
 
 648,124,886 
 
 69,695,337 
 
 348,057,384 
 
 1,065,877,607 
 92,553,097 
 81,083,527 
 
 67.34 
 
 
 
 
 
 527,550 
 
 80,655,977 
 
 
 
 
 
 Total flags 
 
 
 
 
 1,239,514,231 
 
 
 
 
 
 
 
 ^Average. 
 Imparls of merchandise by ships of principal flags, 
 
 Flags in beneficial order. 
 
 Brought 
 
 from home 
 
 ports. 
 
 Brought 
 from colo- 
 nial ports. 
 
 Brought 
 from other 
 countries. 
 
 Total value 
 carried. 
 
 Carried, 
 home 
 and colo- 
 nies. 
 
 
 $97,218 
 2, 338, 878 
 143,664,426 
 11,041,625 
 62, 107, 425 
 7,277,909 
 37,925,601 
 
 
 $27, 667, 839 
 16,870,387 
 
 250,039,207 
 15,942,376 
 45,972,480 
 4,473,863 
 20,348,966 
 
 827,755,057 
 19,209,265 
 
 461,720,691 
 29,595,365 
 
 108,079,906 
 11,751,762 
 68, 318, 429 
 
 Per cent. 
 0.35 
 
 
 
 
 British 
 
 $58,016,968 
 2,611,364 
 
 44 64 
 
 
 
 
 
 
 
 61 93 
 
 French 
 
 43, 972 
 
 66.10 
 
 
 
 
 264,452,982 
 
 60,672,294 
 
 381,305,098 
 
 706,430,374 
 38,384,598 
 102,188,002 
 
 a 46. 02 
 
 
 
 American t . . , 
 
 
 59,093 
 
 102,128,909 
 
 
 
 
 
 Total flags 
 
 
 
 
 847,002,974 
 
 
 
 
 
 
 
 fi Average. 
 
266 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Norway was the first beneficiary of the act of 1828. The carrying 
 done for us by her large fleet all belongs to our own vessels, there 
 being no trade or transportation to reciprocate with her. We carry 
 to and bring from her nothing whatever. She carries $64. 21 of our 
 exports to countries not under her flag for each dollar's worth she 
 transports home. She brings $284.49 of our imports from countries 
 not her own for each dollar's worth she brings from home. She does 
 this by no just right, only by a privilege terminable at our pleasure 
 on notice of a single year. 
 
 Belgium carries both ways much merchandise in excess of her 
 proper trade with us. She carries to other ports than her own 71.24 
 per cent and brings from such ports 87.83 per cent. None of this 
 transportation belongs to her marine by right, but by i-ight belongs to 
 our own. 
 
 British carrying is peculiar. They take the larger part — 69.20 per 
 cent — to home and colonial ports; while they bring the larger part 
 from countries not their own — 56. 36 per cent. Of our total exports 
 they carry off 63.36 per cent; of our total imports they bring 6.S.21 
 per cent. Of our exports to non-British countries by the seven nations, 
 69.48 per cent go by British ships; of the imports from such countries, 
 65.57 per cent arrives under the iJritish flag. Of our entire sea car- 
 riage in foreign trade, 68.81 per cent is done by British shipping. 
 This has not resulted from economic law, but by a persistent warfare 
 of protective expedients against a marine entirely unprotected, in 
 consequence of British antagonism and through British diplomacy. 
 
 Germany is closely following England in utilizing our commerce to 
 build up her sea power. The acumen of German rule and the loyalty 
 of German pride throughout the world combine to foster German 
 shipping. But this does not yet figure largely in our indirect trade. 
 Of our exports it carries 71.98 per cent to home and colonial ports, 
 and thence it bring 57.46 per cent of all she lands in ours. 
 
 Italy, like France, protects by bounties. Both countries aim to 
 increase their marines at our expense. Of our exports, Italians carry 
 to countries not their own 42.05 per cent of what they take, and of 
 imports they bring from such countries 38.07 per cent of what they 
 land here. 
 
 France is badly situated. The British Government in 1860 sent a 
 parliamentary commission to Louis Napoleon to treat for reciprocity 
 in the admission of vessels and cargoes from "the ports of the world." 
 This done, the French marine soon declined. The British merchant 
 supplanted the French. France must have shipping power, or lose 
 her rank — perhaps, finally, her independence. She resorted to boun- 
 ties, but these are found a poor substitute for the exclusion she had 
 maintained to advantage. Of our exports by French ships, 22.71 per 
 cent goes to ports not her own; of our imports in return, 34.90 per 
 cent come from such places. The carrying lost in her own trade is 
 recouped in ours. 
 
 Holland carries least to countries not her own — 17.33 per cent. 
 From such countries she brings much more — 53.87 per cent. She 
 was the first nation to accord our flag fair play on the ocean. 
 
 The exploitation by other foreign flags, principally the Danish and 
 Spanish, is not large. The percentage for exports is 7.46, and for 
 imports 4.63 of entire trade. Summing up the figures, the seven 
 flags have carried, of exports to home and colonial ports, 67.34 per 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 267 
 
 cent, and to ports of other nations 32.66; of imports they have brought 
 from home and colonial ports 46.02 per cent, and from those of other 
 countries 53.98 per cent. Of our commerce indirectlj^ carried their 
 proportion is 41.16 per cent. Were all the flags included, the pro- 
 portion of indirect carriage would he not less than 42 per cent — per- 
 haps 43. We carry of direct and indirect about 9 per cent; adding 
 this to the 42 of indirect not belonging to foreign vessels makes 51 
 per cent accounted for. But, in addition to the indirect carriage of 
 these flags, they carry both their own and our proper share of direct 
 commerce; therefore it may be estimated that American carriage in 
 American commerce should reach the mark of 75 to 80 per cent — nine 
 to ten times the present proportion. 
 
 It has been shown that the method of the Constitution costs the 
 country nothing, being simply the regulation of our commerce 
 defensively. Some good people affect disapproval of this, because 
 its success in our early history created enemies. We should avoid 
 displeasure and save trouble, say they, . hy adopting a subsidj^ 
 policy. This is illogical. We can not resume our carrying trade by 
 any means pleasing to foreign nations. Besides, this suggestion is 
 impractical for the United States — first, because it is not constitu- 
 tional — no single trade can be subsidized without violating the rights of 
 all the other trades; second, because the Constitution provides a specific 
 power for Congress to exercise for ship protection; third, because the 
 principle of subsidy is not well adapted to nine-tenths of the work to 
 be done; fourth, because, if adopted and successful, the people^the 
 real rulers of this country — would not tax themselves year after year 
 for the tens, scores, and hundreds of millions of expenditure. 
 
 \^'hat a ship needs is constant emploj'ment. To get this an Amer- 
 ican ship can not depend upon open competition with the vessels of 
 all flags, but must look to the merchants and underwriters of her own 
 flag mainly. The need of protection to her emploj'ment thus arises. 
 This protection may best be given by the exclusion of foreign vessels 
 from certain trades, as now done in domestic traffic, and as may be 
 done in 40 per cent of our foreign trade by requiring foreign vessels 
 with cargoes to come from their own countries only. Ship protection 
 may consist of inducements to foreign shippers of cargo, as in rebates 
 of duties. It may include extraordinary duties of tonnage and of 
 tariff, which shall establish an equality of footing-in-fact with foreign 
 vessels, or other regulations which fix a preference for American 
 vessels. 
 
 It is supposed by some that competition alone, open and fair, secures 
 shipping employment. Under a particular flag it usually does, but 
 the rule fails under promiscuous flags. Our shipping history proves 
 this. Our ships have carried cheapest, safest, anct speediest, but have 
 disappeared while doing so.** In international commerce, the flag of 
 the cargo or of its underwriter usually determines the flag of the 
 carrier. Vessels of the different flags look mainly to the shippers of 
 the same country. To illustrate: French, Italian, German, or Ameri- 
 can ships look in vain to British merchants and underwriters for 
 freights, of which they control 70 per cent in the world, simply 
 because the ship of their own flag is preferred. There is no use to 
 
 "See "American Marine," by the writer, Houghton, Mifflin & Co., Boston and 
 New York, 1892. 
 
268 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 bid against preference. Tlie British merchant and shipowner have 
 been two hundred and fifty years sinking their roots into the soil of 
 every country on the globe. They flourish everywhere. They buy 
 for all markets and ship to them by their own vessels. If a British 
 merchant does your trade, it will go and come under the "Union 
 Jack." If this flag does your carrying, be sure the British merchant 
 and his underwriters will soon supplant yours, and set aside your 
 shipping if you have any. Their ship will carry as low as yours, and 
 preference for their own will prevail. 
 
 If all nations were but one, human nature is such that distinctions 
 now national would then become geographical or sectional — they would 
 not disappear. It follows that, to restore our flag to the seas, the 
 foreign merchant must not be permitted to employ his ship in the car- 
 riage of our exports and imports to and from all parts of the world. 
 In his dealings with us he must be confined to the commerce and the 
 carrjnng of his own country as much as possible; and a chance must 
 be made in our commerce for the ser\'ices of our merchants, ship- 
 owners, and underwriters — as the plain duty of our Government. 
 The time has fully come to reestablish the principle that the carriage of 
 the commerce between any two nations belongs to their vessels. Other 
 nations have no rights in or to it, except by consent of both; for, if 
 one has no ships with which to carry its sha' e of the trade, it has no 
 right to prefer another to its correspondent, whose vessel fairly comes 
 in for the carriage that is lacking. There is no just ground, on the 
 part of any nation, for the vaulting ambition to trade and carry for 
 the world. Policies of this sort contravene the just rights of all 
 nations, and all should resist their operation as monopolistic and 
 intolerable. 
 
 The ocean mail service should be considered apart from that of the 
 general marine. Our commercial interests require an ocean post of 
 our own not more than the good of the Government itself. Under the 
 powers to create and maintain a navy and to establish post-offices, 
 roads, etc. , lines of mail and naval steameis may be provided and paid 
 sufficiently to secure their use. Ample postal fleets would constitute 
 about one-tenth of an adequate merchant marine. In the British 
 service the postage returns repay half the subsidies. Mercantile and 
 naval advantage make up the other moiety. With proper regulations 
 of trade and travel the expense of the service would be less than under 
 subsidy alone. 
 
 The shipping question has been before the country thirty -five years. 
 At first it was supposed Congress would soon do its duty, and ship- 
 
 Eing people indulged in the illusions of hope. But time passed and 
 ope moderated. Certain misguided friends of shipping petitioned 
 for bounties. That deadened efl:ort the country o\'cr, sixty millions 
 of such demands then being extant, but conventions were held and 
 Congress urged to action. In 1891, after a bounty bill had been 
 defeated, the cause seemed lost on bounty lines. It ivas also developed 
 that a portion of the press, for one reason or a'nother, opposed the 
 disturbance of the foreign interest that holds a vise-like grasp upon 
 our commerce. This was a revelation to our politicians, and some 
 took care of their fences right away. The truth came home to them 
 that comme-rce and navigation are inseparable interests; that, abroad, 
 many merchants are also shipowners; that American ships implied 
 American merchants, and the aliens doing our trade — of export as 
 
HEAEINGS BEFORE THE MERCHANT MARINE COMMISSION. 269 
 
 well as import — would oppose strenuously measures of any kind cal- 
 culated to encourage the rebuilding of our marine. Foreign mer- 
 chants and shipowners and their agents now abound in our maritime 
 associations, boards of trade, and chambers of commerce, and their 
 sentiment often goes forth as American. In short, our situation, con- 
 sequent upon letting our foreign trade fall into rival hands, brings 
 vi\idiy to mind the caution of Thomas Jefferson in 1791, to wit: 
 
 ' ' If particular nations grasp at undue shares of our commerce, and 
 more especially if they seize on the means of the United States to 
 convert them into aliment for their own strength, and withdraw them 
 entirely from the support of those to whom they belong, defensive 
 and protective measures become necessary on tire part of the nation 
 whose marine resources are thus invaded, or it will be disarmed of its 
 defense, its productions will be at the mercy of the nation which has 
 possessed itself exclusivel}'^ of the means of carrying them, and its 
 politics may be influenced by those who command its commerce." 
 
 After all their care for navigation it is improbable that any of the 
 fathers ever thought the time would come when Mr. Jefferson's tact 
 and foresight would be appreciated as they deserve to be to-day, when 
 nine-tenths of our commerce as well as our navigation are in the hands 
 of our rivals. AA'hether this alien interest is destined to prove too 
 masterful for us remains to be seen. It has held the upper hand so 
 long that relief from its grasp will be a striking evidence that Provi- 
 dence intended the United States to be and remain an independent 
 nation. 
 
 STATEMENT OF LINDON W. BATES, JR. 
 
 Mr. Bates. Mr. Chairman, if the Commission wishes, as we are 
 probably the only people in America who have ever tested a subsidy 
 act, I will state how we came out. 
 
 We tried to build four boats in France under the French subsidy, 
 and we have come right up against the proposition of what a subsidy 
 is'to the business man. 
 
 The Chairman. We shall be pleased to hear any statement you wish 
 to make on the subject. 
 
 Mr. Bates. In 1893 the French renewed a subsidy act. The result of 
 it was greatly to increase the sailing fleet. In 1902 they appropriated 
 $30,000,000, and the object of this new bounty act was to increase the 
 steamer fleet. We proposed to build four coasting vessels of 2,000 
 tons, and we went about it to get figures. 
 
 The Chairjian. You say "we proposed." To whom do you refer? 
 
 Mr. Bates. My name is Lindon W. Bates, jr. I am an engineer. 
 
 The Chairman. Where is your place of business? 
 
 Mr. Bates. The United States Engineering Company, 74 Broadway. 
 We got figures to build these boats. 1 have reduced the bids to pounds. 
 The United States Shipbuilding Company bid £40,000. The Chantiers 
 Navale Anversois, Belgium, £28,000. Sir William G. Armstrong, 
 'Newcastle-upon-Tyne, England, £28,000. Then we tried under the 
 French subsidy law. The French shipbuilders wanted £35,000 and 
 the bounty was £7,000. In other words, 25 per cent subsidy, making 
 their bid to us, £28,000. 
 
 This subsidy was a good illustration of a direct subsidy, but for our 
 purposes it proved a failure. In the first place the speculators got all 
 
270 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 the registry money. They erected a number of. keels, for the Gov- 
 ernment was going to give a subsidy, the first payment to be made 
 when they laid the keels. That was the guaranty. They laid down 
 some forty keels, and the men who really wished to build boats were 
 thus excluded. 
 
 A second cause of failure was the uncertainty of legislative action. 
 We did not build boats, because we could not tell what they were going 
 to do. This 3'ear the French have changed the law, showing that this 
 suspicion was well founded. 
 
 Then, again, the French Government were oilering 25 per cent sub- 
 sid3^ They were going to pay 25 per cent of the cost of the boat, and 
 yet with all that their builders only just equaled the English prices; 
 and we would prefer to build in England at the same price rather than 
 to build in France, because the English are so much more reliable. 
 
 Therefore, speaking as business men, who tried to build boats in 
 France, we found that a direct subsidy was a failure for these reasons. 
 
 Mr. Chairman, I have here a translation of the French subsidy law, 
 and if it will interest you 1 will leave it with the Commission. 
 
 The Chairman. We will be glad to publish it in our proceedings. 
 
 The translation is as follows: 
 
 FRENCH SUBSIDY LAWS AND REGULATIONS. 
 
 [French laws of January 30, 1893 (portion at present in force) and of April 7, 1902.] 
 
 NEW LAWS OONOEKNING THE MERCANTILE MARINE. 
 
 First Section I. — Definitions. 
 
 Article 1. Merchant shipping is divided into three classes — long 
 distance, international coastwise, and French coastwise shipping. 
 
 Long distance voyages are those extending beyond the following 
 limits: 
 
 To the South 30° latitude north. 
 
 To the North 72° latitude north. 
 
 To the West 15° longitude from the Paris meridian. 
 
 To the East 79° longitude from the Paris meridian. 
 
 Coastwise international voyages are those within the above limits, if 
 between French (including Algerian) ports, or between foreign ports. 
 
 Coastwise French journeys are those from French to French (includ- 
 ing Algerian) ports. 
 
 Second Section II. — Marine construction. 
 
 Art. 2. As compensation for the charges imposed on shipbuilders 
 by the customs tariff, the following grants are made to them: For iron 
 or steel steam or sailing vessels, 65 francs; for wooden vessels of 150 
 tons and more, 40 francs; for wooden vessels of under 150 tons, 30 
 francs per gross ton register, calculated according to articles 1 and 11 
 of the laws of May 27, 1873, and article 1 of the laws of March 7, 1889. 
 
 As wooden vessels having shell consisting oxAy of wood, every 
 transformation of a vessel resulting in increased tonnage establishes a 
 claim to a premium in accordance with the above schedule, for the 
 amount of the increase in tonnage. 
 
HEARINGS BEFOBE THE MERCHANT MARINE COMMISSION. 271 
 
 Art. 3. As compensation for the same charges the following grants 
 are made to engineers: 
 
 For main engines and auxiliary machinery, such as steam pumps, 
 motors, dynamos, winches, fans, etc., and fitted on board while new, 
 whether on steamers or on sailing vessels, as well as the boilers supplj^- 
 ing them, 16 francs per 100 kilograms. 
 
 This bounty is granted both on new machinerj^ and on new parts of 
 the same placed on board by way of alterations or transformation dur- 
 ing the life of the vessel. 
 
 When boilers are changed the compensation is fixed at 15 francs per 
 100 kilograms of new boilers of French manufacture. 
 
 Art. 4. The premiums under articles 2 and 3 are not definitely 
 earned until the vessels are registered as French. 
 
 As regards vessels built in France for foreign mercantile fleets the 
 premium is not earned until the vessel has been delivered. 
 
 Administrative regulations will be issued defining the tests to which 
 the vessel will be subjected by a technical commission to ascertain that 
 the same is suitable for maintaining a regular service at sea by itself. 
 
 m 
 
 Section III. 
 In case of war, vessel or vessels may be requisitioned by the State. 
 Section II. — Yarious regulations. 
 
 Art. 8. Exemption from pilotage is granted to all French sailing 
 vessels of less than 80 tons, and all French steamers of less than 100 
 tons, if they make regular journeys between certain ports or in the 
 mouths of rivers. 
 
 Further regulations may, however, be issued on the motion of 
 chambers of commerce or interested parties by the Administration, 
 amending the existing ones in the interests of navigation. 
 
 Art. 9. For long distance vessels the inspection prescribed by act 
 125 of the commercial code on taking a new cargo in France, will not 
 be necessary unless a year has elapsed since the last inspection, or 
 unless the vessel has suffered damage. 
 
 Art. 13. The present law is to be in force ten years from the date 
 of its promulgation. 
 
 Paris, January 30, 1893. 
 
 LAW referring TO THE MERCANTILE MARINE. 
 
 Section I. 
 
 Article 1. As compensation for the charges imposed on the mer- 
 cantile marine, a subsidy is granted from the date of promulgation of 
 the present law, which, according to the provisions of the following 
 articles, will be entitled " Compensation d'Armement" or" Prime a la 
 Navigation" (new or commission compensation or shipping premium). 
 
 These grants provided for in articles 2 and 3 are subject to the fol- 
 lowing conditions: 
 
 Joint stock or other companies owning ships which receive one of 
 these grants must have on their board a majority of French citizens. 
 The chairman and the managing director or manager must be French. 
 
272 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Should it be established that the French owner — whether coopera- 
 tion or individual — benefiting by this law is an intermediary, and that 
 the real owner is foreign, the grants will be immediately withdrawn. 
 
 The administration may claim repaj'ment of the said bounties ille- 
 gally received. 
 
 Art. 2. The "Compensation d'Armement" is granted to every sea- 
 going steamer built abroad, if iron or steel, manned under the French 
 flag for long voyages or for international coastwise trade, of more 
 than 100 gross tons, belonging to French private persons or compa- 
 nies, as stated in article 1, and on the conditions fixed in the following 
 articles: 
 
 The "Compensation d'Armement" per day the vessel is in commis- 
 sion and per gross tons register is fixed for long voyages at — 
 
 Five centimes per ton to 2,000 tons. 
 
 Four centimes per ton from 2,000 to 3,000 tons. 
 
 Three centimes per ton from 3,000 to 4,000 tons. 
 
 Two centimes per ton above 4,000. 
 
 Vessels over 7,000 tons would be entitled to the same grant as ves- 
 sels of 7,000 tons. 
 
 The number of days on which the grant is based is limited to a maxi- 
 mum of 300 days per annum. 
 
 The ofiicial time will be counted from the day and only during the 
 time that the crew is full, cases of force majeure excepted. It ceases 
 with the discharge of the crew. 
 
 Art. 3. The "Prime de Navigation," with the exception specified 
 hereafter, is granted to every seagoing vessel built in France, of more 
 than 100 gross tons, sailing under the French flag. 
 
 This premium is fixed as follows — for long voyages, per 1,000 miles 
 run and per gross ton: 
 
 (a) For steamers the rate is 1.70 francs for the first year, decreasing 
 annually from the date of registry, viz, by 4 centimes during the first 
 period of four years, 8 centimes during the second period of four 
 years, and 16 centimes during the third period of four years. 
 
 However, for steamers of more than 3,000 gross tons the rate of the 
 
 initial premium will be reduced by centimes per 100 tons or fraction 
 
 of 100 tons above the 3,000 tons; but the rate for the first year will be 
 not less than 1.50 francs for vessels up to 7,000 tons. The grant to 
 vessels above 7,000 tons will be the same as for those of 7,000 tons. 
 
 (5) For sailing vessels the rate is 1.70 francs for the first j'ear, 
 decreasing annually from the date of registry, viz, by 4 centimes 
 during the first period of four years, by 4 centimes during the second 
 period of four years, and by 8 centimes during the third period of 
 four years. 
 
 However, for sailing vessels exceeding 100 tons gross, the rate of 
 the initial premium will be reduced by 10 centimes per 100 tons, or 
 fraction of 100 tons above 600 tons, up to 1,000 tons. The premium 
 above 1,000 tons will be the same as that for 1,000 tons. 
 
 The premium will be paid for twelve years from the date of French 
 registry to every vessel built in France while the present law is in 
 force. 
 
 The number of miles traveled is calculated on the distances between 
 ports, measured on the shortest sea routes, according to the rules laid 
 down by the Administration. 
 
HEAEINGS BEFORE THE MEBOHANT MARINE COMMISSION. 273 
 
 Art. i. Five per cent of the premiums granted by the present law 
 will be retained. These sums will be handed to the Mariner's Insurance 
 with a view to reducing the deductions imposed on them for the pur- 
 poses of that insurance. 
 
 Art. 5. Vessels engaged in the international coasting trade, receive 
 only half of the "Prime de navigation," or the "Compensation 
 d'armement," as calculated in the preceding articles for long voyages. 
 
 Vessels engaged, on the same trip, in international coasting trade 
 and in coasting trade between a French Mediterranean port (including 
 Algerian) and a French port on the Atlantic, the Channel, or the North 
 Sea, or inversely, are entitled to the bounties for the time or the voy- 
 ages constituting international traffic, if the whole cargo passing 
 through the Strait of Gibraltar, coming from or going to foreign 
 ports, amounts in tons to at least a third of the net tonnage. 
 
 The same holds good for vessels engaged on the same voyage in 
 international coasting trade with a port in the north of Europe and 
 coasting trade between French and Algerian ports if the whole of the 
 cargo going to or coming from foreign ports, when passing the Pas de 
 Calais, amounts to at least a third of the net tonnage. 
 
 Vessels which, on a long voyage, either outward or homeward, call 
 at Port Said, Ismalia, or Suez, will be entitled to the long-voyage 
 bounty for the whole of their voyage. 
 
 Vessels which, on a long voyage having for its starting or terminal 
 port a French or Algerian port, call at one or more French or Alge- 
 rian ports without discharging or taking in anything but long-distance 
 cargo will be entitled, for every one of the partial trips between two 
 of those ports, to a fraction of the bounties equal to the ratio of the 
 numbers of tons of long-distance cargo on board during those trips 
 and of the net tonnage of the vessel. If this ratio is equal to or 
 exceeds unity, the vessel is entitled to the whole bounty for the trip 
 under consideration. 
 
 Art. 6. French-built steamers will be entitled to an option for 
 either the "Compensation d'armement" or the "Prime de naviga- 
 tion" for every journey. 
 
 The conditions of this option will be set forth in a regulation by the 
 Administration. 
 
 The following vessels have no claim to either of the bounties: 
 
 Vessels which , subsequent to the promulgation of this law, will obtain 
 French registry after the completion of their seventh year, or those 
 which have reached the age of 12 years provided that the bounties will 
 not be paid during more than twelve years. (5) Vessels engaged in 
 fishing, pleasure boats, and those receiving from the State bounties 
 other than those provided for by the present law. (e) Vessels engaged 
 on each journey, exclusively in reserved (?) navigation, as well as those 
 running only between a French port and a foreign port less than 120 
 miles distant. (5) Vessels which, on a reserved ( f) journey, call at for- 
 eign ports without discharging or taking in cargo amounting in tons to 
 atleast one-third of their net tonnage, (c) Vessels which, from their 
 departure from a French port to their return to a French port, shall 
 not have carried cargo amounting in tons to at least one-third of their, 
 net tonnage and that on at least a third of the whole distance traveled. 
 (./) Vessels which, having obtained French registry, should have lost it 
 and obtained it a second time, (ff) Steamers which, on their trials, have 
 
 3a— 04 18 
 
274 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 failed to obtain a speed of 12 knots with half load, {h) Vessels of 
 foreign origin, which at the time of their being registered in France, 
 or during the succeeding six months, are mortgaged for more than 
 half their value. 
 
 The bounties are reduced by 5 per cent for vessels which have not 
 attained a trial speed of 12 knots with half load. They are reduced 
 by 10 per cent for vessels which have failed to attain a trial speed of 
 10 knots. 
 
 Art. 7. The tonnage admitted to the benefits of the present law, in 
 addition to that registered at the time of its promulgation, is fixed at 
 a maximum of 300,000 gross tons of steamers and 100,000 gross tons 
 of sailing vessels. 
 
 Of the above tonnage of 400,000 tons for steamers, foreign-built 
 vessels shall form not more than two-fifths and French ones three-fifths. 
 
 The conditions on which vessels will take rank for admission to the 
 benefits of the present law as regards the above limits, as well as the 
 replacements of bounties which disappear, will be settled by further 
 regulations. 
 
 Art. 8. Every captain of a vessel receiving one of the bounties pro- 
 vided for in article 6 of the law of January 30, 1893, or one of those 
 established by the present law, will be bound to transport, gi'atuitously, 
 dispatches, or, generally, all correspondence intrusted to him by the 
 postal authorities at the ports called at. He will collect and deliver 
 dispatches at his expense from and to the post-office of his starting 
 place and the ports of call, as well as of his destination. 
 
 The captain will likewise be bound to take charge of postal parcels, 
 in conformity with the law and regulations on the subject. 
 
 In respect of these he will be under the same liabilities toward the 
 postal administration as the latter has toward the public. 
 
 If a postal official is instructed to accompany the mails, he will also 
 be carried gratuitously on the whole journey, as well as between the 
 boats and the offices at which the exchange of the mails be effected. 
 
 A suitable room will be placed at his disposal for the work en 
 route. 
 
 Art. 9. Owners signing an agreement to maintain on routes not 
 served by the subsidized mail steamers, a regular line performing a 
 fixed minimum number of journeys per j'ear, with vessels of a certain 
 age and tonnage, can, in lieu of the bounties established hereby, claim 
 an annual fixed subsidy during the term of their agreement equal to 
 the average of the bounties to which the vessels in commission would 
 be entitled for the whole of the journeys performed. 
 
 These demands will be dealt with by decree of the council of state, 
 on the report of the ministers of commerce, marine, and finance. 
 
 To this decree will be attached a schedule stating the conditions 
 imposed on the owners and the mode of payment, as well as the 
 amount of security for due performance of contract, and for repay- 
 ment of premiums paid in excess, in case of interruption or cessation 
 of service. 
 
 Art. 10. Articles 5 and 6, and paragraphs 1, 3, 4, 5, 6, and 8 of 
 article 7 of the law of January 30, 1893, are abrogated. 
 
 The present law is enacted for a period of 12 years, and the articles, 
 1 and 4, paragraph 2 of article 7, articles 8 and 9 of the law of Janu- 
 ary 30, 1893, will have the same duration. 
 
HEAEIKG8 BEFORE THE MERCHANT MARINE COMMISSION. 275 
 
 Art. 11. Steamers sailing at present under the French flag, and 
 those registered before the promulgation of the present law, will be 
 governed by the law of Januaiy 30, 1893, until the lapse of the period 
 fixed therein. 
 
 At the expiration of that time those steamers which are of French 
 construction will benefit under the present law until they have attained 
 the age of 12 years. 
 
 Art. 12. Sailing vessels of French construction or naturalized, sail- 
 ing at present under the French flag, and these laid down before May 
 1, 1902, provided that they have been the subject of a customs decla- 
 ration before February 1 of the same year, and that they are regis- 
 tered before January 30, 1903, will remain subject to the regulations 
 of the law of January 30, 1893, until the lapse of the same, provided 
 the owners claim the benefit thereof. 
 
 The maximum tonnage of sailing vessels laid down after January 1, 
 1902, admissible to the benefit of the present article, is fixed at 40,000 
 gross tons. 
 
 These vessels will take rank according to the date of their registry. 
 
 Art. 13. The sailing vessels for which owners will, under the pre- 
 ceding article, claim the benefits of the law of January 30, 1893, will 
 have to show that they have carried over at least two-fifths of their 
 whole journeys a quantity of cargo representing in tons weight at 
 least two-thirds of their net tonnage. 
 
 Section II. 
 
 Art. 14. The Administration will issue regulations for showing the 
 conditions in which French registry can be obtained in the colonies 
 and the premiums granted by the present law can be liquidated. 
 
 Art. 15. Article 8 of the law of — ■ , 27 is modified, as follows: 
 
 French vessels may not, under penalty of being treated as foreign 
 vessels, be repaired in foreign countries if the cost of such repairs 
 exceeds 15 francs per gross ton, unless the necessity for such larger 
 expenditure is shown in a report signed and sworn by the captain and 
 other officers of the vessels, verified and approved by the French con- 
 sul, or other Franch officials, or two French merchants residing abroad, 
 and deposited at the office of the French port to which the vessel returns. 
 
 Art. 16. Decrees of the Administration, issued on the report of the 
 Ministers of Commerce, of Industries, of Posts and Telegraphs, after 
 inquiry and after advices to the Ministers of Public Works and of 
 Finance, may establish in a seaport temporary customs dues to assure 
 interest on loans contracted or payments of grants made by a depart- 
 ment, a commune, a chamber of commerce, or other public body, 
 with the view of establishing, improving, or replacing works or plant 
 for exploiting that port, or of maintaining or improving the depths 
 of its roads, passes, canals, and locks. 
 
 Decrees of the same kind may impose customs dues for paying 
 expenses connected with arrangements made by a chamber of com- 
 merce for the salvage of ships or cargo, and for the policing and 
 supervision of the quays and precincts of the port. 
 
 These imposts are calculated on (1) the net legal tonnage or the gross 
 tonnage of both French and foreign vessels; (2) the quantity of goods 
 discharged and taken in; (3) the number of passengers going on board 
 or leaving the vessel. 
 
276 HEAEINGS BEFORE THE MEBCHANT MARINE COMMISSION. 
 
 They are not to exceed (1) 1 franc per ton of the net legal tonnage 
 for all vessels, sail or steam, or 60 cents per gross ton for steamers, 
 or 85 cents per gross ton for sailing vessels; (2) 50 centimes per ton 
 freight (1) or per metric ton of cargo, or 10 centimes per package; 
 (3) 1 franc per traveler. 
 
 They are payable by the vessel; nevertheless, the decree imposing 
 these dues may stipulate that dues be paid by the senders or receivers 
 of goods or by the travelers. 
 
 The tariffs may be graduated according to the nature of the vessel, 
 its draft, the length of its stay in port, the nature of the service, the 
 distance of the countries of origin and destination, the nature of the 
 cargo, and the work done during one call at the port. They may also 
 establish reduced rates and total or partial exemptions in favor of cer- 
 tain specified classes of vessels, both French and foreign. They may 
 fix different rates for entering and leaving, according to the differeiit 
 nature of the cargoes, or the different classes of travelers. 
 
 The tariffs established in accordance with the foregoing may be modi- 
 fied with or without conditions within the limits fixed by the law or 
 decree imposing them on the motion of the public bodies for whose 
 benefits they are designed. Xhe modified tariff's can not come into 
 force until they have been brought to public knowledge for a month, 
 bj' placard, and until thej^ have been certified by the minister of com- 
 merce after due advice to the ministers of finance and of public works. 
 
 The local imposts are collected by the administration of cu-stoms. 
 They are treated as customs dues as regards the forms of declarations, 
 mode of collection, suppression of contraventions, and settlement of 
 disputes on the application of the tariff. Every contravention will 
 give rise to a fine amounting to double the dues in question. 
 
 Paragraph 3 of article 4 of the law of 18, 1866, and article 
 
 11 of the law of January 30, 1893, are abrogated. 
 
 Art. 17. Article 2 of the law of September 30, 1793, is modified as 
 regards the composition of the crews of French merchant vessels by 
 the following dispositions: 
 
 The crews of vessels in the colonial international coasting trade with- 
 out touching the capital may be composed of foreigners excepting — 
 
 (1) All the officers (captain, second officer, chief engineer, etc.) 
 
 (2) The boatswain. 
 
 (3) A minimum of two seamen, " Inscrits Maritimes," ( ?) one of them 
 for navigating, the other for the engine room. 
 
 The number of Frenchmen may be reduced — 
 
 (1) On steamers of less than 1,000 tons net to five, viz: Captain, sec- 
 ond officer, chief engineer, boatswain, and one A. B. 
 
 (2) On sailing vessels of less than 1,000 tons to four, viz: Captain, 
 second officer, boatswain, and one sailor. 
 
 (3) On steamers or sailing vessels of less than 400 tons to three, viz: 
 Captain, second officer, and chief engineer, if the vessel is a steamer, 
 or a sailor, if a sailing ship. 
 
 The vessels sailing under the conditions described in the preceding 
 paragraph are entitled to subsidies from the local treasuries, provided 
 they are not in receipt of any other bounties whatever. 
 
 Art. 18. On the expiration of the law of January 30, 1893, builders 
 will not receive a premium, unless the whole of the French works and 
 yards concerned in building of a vessel employ not more than 20 per 
 cent of foreign workmen. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 277 
 
 Art. 19. The construction of seagoing vessels required by the State 
 for different services, other than men-of war, is reserved exclusively 
 for French builders, consequently only French builders whose yards 
 are situated in France will be allowed to tender. However, if such an 
 invitation to tender should have no result, foreign tenders maj^ be 
 invited. The same may be done when special apparatus patented 
 abroad is required. 
 
 Art. 20. Decree of the council of State may authorize the minister 
 of marine to grant, on the advice of the marine board, and after con- 
 sulting the ministers of commerce and of finance, an additional bounty 
 of not more than 25 per cent to vessels which, owing to their construc- 
 tion, appointments, and machinery, or speed, would be capable of ren- 
 dering special services in war time. 
 
 Art. 21. Article 12 of the law of January 30, 1893, is abrogated and 
 replaced by the following regulations: 
 
 Six per cent of the amount of all premiums of construction, naviga- 
 tion, and of " Compensation d'armement" is retained, and distributed 
 as follows: 
 
 Two-thirds to the provident fund, with a view to diminishing the 
 deductions on mariners' pay and to increasing the funds for assisting 
 the victims of shipwreck and other accidents or their families. 
 
 One-third to the invalids' fund, with a view to granting subventions 
 to the chambers of commerce or public institutions for the creation 
 and support of sailors' homes in French ports, intended to assist the 
 nautical population, or of any other institutions likely to be of use to 
 them, especially schools for seamen. 
 
 A complete list of such subsidies will be published annually by the 
 ministry of marine. 
 
 The sums resulting from deposits placed with the seamen's fund 
 during the preceding j'ear and falling under article 22 of the law of 
 March 29, 1897, owing to their not being claimed for thirty years, will 
 be employed for the benefits of invalid mariners, to aid the marine 
 pension fund. 
 
 A statement of these sums will be furnished during the last fort- 
 night of the first quarter of the following year: 
 
 Art. 22. The registration of building agreements, deeds of sale of 
 transfer of ships, will be subject to a duty of 3 francs. Article 5, No. 
 2, of the law of February 28, 1872, is abrogated, inasmuch as it is con- 
 trary to the present regulation. This is equally applicable to the sale 
 of boats of every kind for inland navigation. 
 
 Art. 10 of the law of January 30 is abrogated. 
 
 Art. 23. The total amount of compensation and premium which may 
 be paid in pursuance of the present law is limited to the maximum of 
 150 millions, of which 15 millions at most is for sailing vessels. 
 
 Art. 24. The total amount of the construction premium for the 
 300,000 tons of steamers and 100,000 tons of sailing vessels provided 
 for by the present law shall not exceed the sum of 50 millions, the 
 annual expenditure being limited to that due on a maximum construc- 
 tion of 60,000 tons of steamers and 15,000 tons of sailing vessels, not 
 including in the first year vessels put down before March 13, 1902. 
 
 In case the 50,000 tons of steamers is not attained, the balance will 
 be carried forward from year to year. 
 
 Paris, April 7, 1902. 
 
278 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 STATEMENT OF J. AUGUSTUS JOHNSON. 
 
 The Chairman. Is Mr. J. Augustus Johnson, of the Legal Aid 
 Society, present'^ 
 
 Mr. Johnson. 1 q,m. 
 
 The Chairman. We shall be pleased to hear anything you may have 
 to submit. 
 
 Mr. Johnson. Mr. Chairman, I am interested only as an American 
 citizen in the question of building up the American merchant marine. 
 I assume that the wisdom of your Commission will find a way to accom- 
 plish that purpose. 
 
 Personally, 1 am more interested in the care and protection of the 
 American sailor, and I wish to say that the Legal Aid Society, from 
 the 250,000 sailors who come to New York every year, receive and act 
 upon about 300 claims for legal aid. The principal obstacle in obtaining 
 legal aid is the law's delay, which troubles everybody, but particularly 
 the sailor, because he has but a week or less in port and must go to 
 sea in order to earn a livelihood. His wages are spirited away. So 
 he must leave and go to sea. If there is anj^ way of advancing sailors' 
 claims upon the court calendars it would be a very great benefit to the 
 sailor. 
 
 There are several practical suggestions which I will make with great 
 brevity. I should like to see a steam launch provided for the collector 
 of this port, that he may have facilities for going down the harbor and 
 preventing the boarding of American vessels on their arrival here by 
 solicitors for sailors' boarding houses and by runners and others, who 
 deprive the sailor of his money and liberty, practically. 
 
 A FREE SHIPPING BUREAU. 
 
 Then I would be glad to see an addition to the appropriation for the 
 United States shipping commissioner, that he may make the United 
 States shipping commissioner's office what Congress intended it should 
 be — a free shipping bureau, where facilities would be ofi'ered for sail- 
 ors to obtain shipment without paying blood money, about one-half 
 million of which is paid out by sailors in this port every year in order 
 to get an opportunity for employment, which is not true of any other 
 occupation. 
 
 1 snould like to see the United States shipping commissioner author- 
 ized to establish in his office a savings bank for sailors. 
 
 In another society which I represent, the Church Missionary 
 Society for Seamen, we have an officer who is authorized to receive 
 deposits from sailors, to be sent to their families, and we have received 
 this year from sailors about $100,000, which we have saved from 
 debauchery and from the dive keeper and the boarding-house crimp. 
 If the United States shipping commissioner were to have $5,000 added 
 to his appropriation, it would enable him to pay increased office rent 
 and to pay for a clerk who would receive these deposits, which would 
 be safeguarded by the American Government under the commissioner's 
 bond. This missionary society receives all this money, and it will 
 probably grow. During the last three years it has doubled every 
 year. It is becoming a great burden, and we should be glad to see 
 that money deposited, as it is in England, under Government auspices. 
 
HEARINGS BEFOEE THE MERCHANT MARINE COMMISSION. 279 
 
 The board of trade in England takes care of all that, and it transfers 
 the money free to the families. 
 
 I should also like to see the United States shipping commissioner 
 made supervisor of the sailors' boarding house, which is the reef on 
 which most sailors are wrecked. I should like to see him made super- 
 visor of the 200 shipping agents or crimps — people who control the 
 sailor and exact from him the advance money. 
 
 NO ADVANCE IN COAST TRADE. 
 
 I am opposed, in the sailors' interest, to an advance in the coastwise 
 trade. They would get an advance perhaps of $5 each on a trip of 
 fifteen or twenty days and the sailor would lose all that money before 
 he started. It would be spent in debauchery or the boarding-house 
 keeper would get it. The only way to save the sailor's money is not 
 to let him have an advance. He would go penniless on board and he 
 would be penniless on shore, and he would be a penniless sailor all his 
 years. That is not true of all sailors. Some save their money. 
 
 I am also in favor of an old-age pension for sailors as a naval reserve 
 for the United States Navy. If that inducement is held out, Ameri- 
 cans will enter the service and will become, as in France, a part of 
 the naval service, ready for any emergency. 
 
 I would also call attention to the fact that there is no Plimsoll line 
 in this country. It has been said here that the life of an American 
 ship is only fifteen years. The life of the American sailor is only 
 twelve years. With a Plimsoll line, vessels would not be allowed to 
 go to sea overloaded. We ought to have a load line in this country 
 that could be relied upon. Vessels would be preserved and the sailor 
 would be preserved. I could also call attention to the danger from 
 undermanning, but 1 will not venture further upon the patience of 
 the Commission. 
 
 In amplification of my views, I submit some remarks made by me 
 on another occasion, which I will be glad to have printed as a part of 
 my statement. 
 
 The matter referred to is as follows: 
 
 My attention was first called to the status of sailors when years ago 
 I was summoned by the captain of an American ship to quell a mutiny 
 on board. His wife and daughter and the vessel were exposed to 
 danger beyond his control. Ordinarily it would have been my duty 
 as a consul in a non-Christian country, having jurisdiction in criminal 
 and civil cases and in admiralty, to put the crew in irons and send them 
 ashore to a Turkish prison. But 1 didn't want to do that because the 
 Turks were very fierce against Christians at that time, some 11,000 
 having been massacred in our neighborhood, and we didn't know when 
 and where the trouble would end. I therefore went on board ship 
 and gave both sides a hearing. The men had refused to work because 
 they did not have the required hours for rest; the master had knocked 
 down some of the men and put two in irons, but he couldn't work his 
 ship home without their assistance. In this dilemma I reasoned with 
 all the parties in interest and arbitrated the questions at issue. Rather 
 than go into a Turkish, prison while the massacres were in progress 
 the men promised to go to work and take the ship back to America. 
 Rather than lose his crew, the master promised to give more hours of 
 rest and better food, and thus the matter was settled. 
 
280 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 This experience was burned into my mind by the heat of burning 
 viliages and the other horrors of the Syrian massacres of 1860. About 
 ten years ago another incident led me to investigate the status of sea- 
 men on shore. Nominated by Doctor Satterlee, then rector of Calvary 
 parish, I was elected to serve as one of the lay managers of the Church 
 Missionary Society for Seamen, and, feeling my responsibility as a 
 citizen, from that day to this, 1 have cooperated with its successful 
 and sympathetic work. 
 
 WORK OF UPLIFTING THE SEAMEN. 
 
 In speaking for seamen, therefore, I speak with some knowledge of 
 their rights and wrongs. 1 accepted this service willingly — in part — 
 because during my official life in the East I had to ride hobbies in order 
 to avoid the melancholic effects of climate and environment. One of 
 these was to collect antique coins, many of which were encrusted in 
 the rust of centuries before the Christian era and therefore indistin- 
 guishable. By the aid of acids, and brushes, and coin books, I found 
 that some of the most unpromising lumps of rust and dirt werein real- 
 ity very valuable coins. One I remember, although a copper coin, was, 
 from its great rarity, marked as worth a great sum. So I was pre- 
 pared to find among the rustiest and most unpromising of sailors spec- 
 imens of humanity in which the Divine image might with careful 
 treatment be brought out to recognition. 
 
 Well, I found on examination that the sailor had been forgotten in 
 the onward movement, and that while slavery and other abuses had 
 been abolished, while societies had been formed for the prevention of 
 cruelty to animals, and for the protection of children, birds, fish, trees, 
 forests, historic localities, genealogies, and for aid to the aged, crip- 
 pled, insane, and to all classes and conditions of men, I found no soci- 
 ety organized to prevent cruelty to seamen. Church missionary 
 societies for seamen had been organized and sermons regularly preached 
 to sailors on shore whenever they could be induced to attend religious 
 services; but Jack was ever an impatient and a restless listener to ser- 
 mons and services of regulation length, and generally he preferred to 
 have a good time in his own way during his brief residence on shore. 
 
 Within the last few years, however, a great wave of sympathy, a great 
 heart-beat toward humanity has brightened the sailor's life, has pulsed 
 and throbbed with the power of the tides, and he has seen a new light. 
 He has learned to regard the missions, the reading rooms, the pleasant 
 entertainments, the care for his phj^sical comfort, and the legal aid 
 offered him for the protection of his rights as having a direct bearing 
 upon his present life, and as originating in an unselfish desire to serve 
 the sailor as an individual, as a unit; and he goes with more confidence 
 to the chaplain and to the mission which cares for his health, his com- 
 fort, his rights, his money, and his entertainment, and incidentally he 
 attends service, not because he wants to, but in gratitude and appre- 
 ciation of the warm, A'isible, and inspiring sympathy shown in matters 
 within his comprehension. 
 
 This society, responsive to needs of the man and the hour, has been 
 heard before committees in Congress and at Albany for better legisla- 
 tion, by Cabinet and other administrative officers of the Government 
 for better enforcement of the laws, and by courts and magistrates, con- 
 suls and commissioners, for justice in respect of wages, food, hours of 
 
HEARINGS BEFOBE THE MERCHANT MARINE COMMISSION. 281 
 
 rest, and for redress of wrongs endured from brutal officers on ship- 
 board and the more cruel crimp and keeper of the average sailor 
 boarding house. Sailors are no longer imprisoned for breaking civil 
 contracts in home ports; their advance wages are less frequently seized 
 by corrupt men who thrive professionally by robbing seamen, and their 
 food is legally based on sanitary requirements, so that scurvy, that 
 horrible plague of seamen when deprived of fresh provisions, is kept 
 in abeyance. 
 
 THE MANY ABUSES TO BE REMEDIED. 
 
 But there are still many abuses to be remedied and many blessings 
 to be conferred bef oi-e this port can free itself from the stigma of being 
 one of the most unjust and injurious to seamen, and we are here to-day 
 to consider what shall be done in the coming years. 
 
 What we do for the three million of seamen of our day must be done 
 quickly. Our time for giving and helping is short. They are in port 
 for a week or two at most; their miserable lives average but twelve 
 years, of hardship, suffering, and dangers, until death comes to them, 
 generally at sea. 
 
 And when the sea is called to give up its dead, its millions of 
 sailors, who have lost their lives in the service of mankind, and we 
 are inquired of as to what we have done to save them, will it be 
 enough to say in answer, "Am I my brother's keeper?" or shall we 
 not say rather, "We have done what we could? " Shall the sailor, that 
 stepson, that unloved child of our civilization, homeless, friendless, 
 witnout a vote, and, therefore, without consideration among politicians, 
 without companionship, clubs, lodges, associations in which landmen 
 find zest for life, have no refuge from his foes? I^eft to the mercenary 
 and unholy allurements of the saloon, the subterranean dive, the low 
 and degrading boarding houses for seamen, which, vampire-like, soon 
 absorb the vitality of their victims; left to the crimp, who robs him 
 still too often of his money and his liberty, he tends toward the human 
 scrap heap and floats out to a shoreless sea as rapidly as the swift- 
 flowing tides of evil can carry him. 
 
 OUR DEBT TO THE SAILOR. 
 
 Now, why is this? Is the sailor not entitled to consideration? 
 
 To whose fidelity, stanch and steadfast coiirage, and boundless hero- 
 ism do you confide your lives when crossing the ocean? Who cares 
 for your sons and daughters on the voyages for rest and pleasure, 
 through fogs and darkness, storms and collisions, amid the wreck and 
 ruin of tempest and the horrors of ships on tire ? What is it that 
 nerves the sailor in those dreadful moments? The stern voice of com- 
 mand is not sufficient. Discipline is often powerless to control. May 
 it not be the innate nobility of the man, his latent chivalry that inspires 
 the sailor to look death in the face and give his life to save yours, if 
 need be? This spirit of self-sacrifice and nobility in the heart of man, 
 born of woman, is the leverage on which we must work to redeem the 
 odds and ends of mankind, and fan the dying embers in his soul, and 
 rouse his ambition and aspiration after the best things. Bread cast 
 upon these \yaters will return again. The kindness inspired by the 
 great motherly heart of our noblest womanhood will nerve these men 
 to deeds of greater daring, to acts of more sublime self-sacrifice. 
 
282 HEARINGS BBFOEE THE MEKCHAJSTT MAEINE COMMISSION. 
 
 They will be saved from great moral perils by the knowledge that 
 women are thoughtful for their welfare on sea and shore and develop 
 ii growing reverence for human life. Even now they ask for no 
 charity; they only ask for a chance to work and to live on their own 
 earnings. 
 
 They may save or lose a ship according to their morale; they may 
 carry physical and moral disease into every port they visit, or they 
 may be made an influence for good on the shores of every sea. Once 
 establish the wireless telegraphy of sympathy between the sailor at sea 
 and your societies on shore and you will make every sailor a hero. 
 
 This claim for consideration should appeal to the women of New 
 York — the most alert, energetic, charitable, and compassionate women 
 in the world. In your pursuit of fads — whether for old laces, fans, 
 porcelain, musical instruments, antiques and bric-a-brac, bridge whist, 
 golf, tine dogs, cats, and horses — none are inore industrious and suc- 
 cessful. But in your choice of hobbies, for Heaven's sake, choose 
 among othei's one having a human interest, vitalized with the red blood 
 of a strenuous life, and become effective in putting your shoulder under 
 some corner of the great burden of sorrow and suffering by which 
 human life is bowed down! 
 
 You have better protection, more influence, more enjoyments, more 
 consideration than any women in the world. Your property rights are 
 safeguarded, under the statutes here, as nowhere else. Freely you 
 have received; freely give! What you do here for seamen will set an 
 example to women in other cities and the echo of your deeds will be 
 heard around the world. 
 
 NEEDS AT NEW YOEK. 
 
 Now as to present needs. 
 
 We should use our combined and associated wisdom and strength to 
 watch over the sailor, to bring to justice those who rob him of his 
 money, his self-respect, his liberty, and his life. He is the ward of 
 the state; existing laws are adequate, but they must be enforced. His 
 claims should be brought into court, his witnesses produced, his 
 wrongs redressed, his diseases healed, and his loneliness and homeless- 
 ness alleviated — and for all these things money and sympathy are 
 needed. Humanity demands this. Greater New York ought to fur- 
 nish it. Its maritime interests require it. The women of New York 
 can achieve it. Ask the chamber of commerce what it will do for 
 the sailor when it has completed its palatial home now under constru- 
 ton. Ask the board of trade, the maritime exchange, the great 
 marine insurance companies and steamship lines and shipowners what 
 they are going to do about it. Ask the church, the synagogue, the 
 cathedral, what they will do to help the men who go down to the sea 
 in ships. As matters now stand a large proportion of losses at sea arc 
 preventable. Improperly loaded, insufficiently manned,, brutally offi- 
 cered, corruptly financed, many vessels disappear and the crews go 
 down to their death for lack of care by the owners, agents, and man- 
 agers. It has been said that for every vessel that wears out in the 
 service a hundred fall victims to the vicissitudes of the sea. No 
 Plimsol or load line has yet been fixed in America, in which we are 
 still behind England. The vessels are insured, but sailors are not. 
 
 Oh, for some man of consecrated enthusiasm, like Henry Bergh in 
 
.s 
 
 HEARINGS BEFOBE THE MERCHANT MARINE COMMISSION. 283 
 
 his crusade against cruelty to animals! Oh, for more angelic souls 
 like those o"f Florence Nightingale in her zeal for soldiers in the hos- 
 pitals, of Miss Barton and her Red Cross associates, of Miss Dix and 
 Mrs. Ballington Booth for prisoners, and our own Mrs. Foster, in 
 whose honor tablets are being placed in the courts and the Tombs 
 prison. Who will follow in their steps and show a Christ-like care for 
 the sailor? 
 
 Now, in conclusion, let us be more specific. We need support for 
 our reading rooms for sailors. We need a launch to take our chap- 
 lains and legal aid and medical officers from ship to ship, to give all 
 needed succor to the sick, the maimed, the abused, and the friendless 
 sailor, to take him to the hospital, to a sailors' home, to mission chapels 
 and reading rooms where he will find friends; to prevent impressment 
 of unwilling victims, drugged and shanghaed; to take evidence of 
 crimes, obtam witnesses, and prevent the boarding of vessels by saloon 
 runners and the desertion of crews under their influence. 
 
 The principal ports of England have such a launch. Boston and 
 Baltimore have one, but this great cosmopolitan port, soon to become 
 the center of the world's commerce; this city with its annual visitation 
 of 250,000 sailors, soon to be greatly multiplied, has no launch for 
 such humane, uncommercial, and sympathic work. For this launch 
 $4,000 will be needed at once, with a provision for $3,000 more for its 
 first year's equipment and maintenance. 
 
 A free shipping bureau is needed, where seamen can find employ- 
 ment without paying the illegal exactions of blood money by the 
 crimps who annually rob the seamen in this port of $1,000,000. 
 
 A sailors' home is needed whose foundations shall be broad and 
 deep. It should cover at least two full lots facing Battery Park, near 
 the British consular shipping office. Sir Percy Sanderson states that 
 last year 117,950 sailors — shipments and discharges — passed through 
 that office alone. The location is excellent, because near the con- 
 sulates, the American shipping commissioners, the aquarium, where 
 other maritime creatures are gathered, and the Immigration Bureau. 
 This building should be large, commodious, and ample for 250 beds at 
 least, and be six or eight stories high, in order to afford an adequate 
 home for seamen, at a cost perhaps of $250,000. It should have on 
 its first floor a free shipping bureau, where captains and seamen may 
 congregate and arrange for shipment of crews without cost to the 
 sailor. It should contain a restaurant, where seamen, having a room 
 at 15 or 20 cents each night, may obtain a good meal for same price, or 
 less than $5 per week all told. (Whereas, they now pay $7, with 
 extras which make up an aggregate of $10 a week, at the miserable 
 boarding houses for seamen, some of which are located over or adjoin- 
 ing saloons as an annex, and rent of which is paid by the saloon 
 keeper.) This may all be done on a self-supporting basis, and with 
 some profit, if conducted as the Mills hotels, owned by D. O. Mills, 
 and as the model tenement houses are carried on by the City and 
 Suburban Homes Company, of which our city chamberlain, Doctor 
 Gould, is the successful manager. 
 
 Attached to this building and connected with its management should 
 be a large supply store, with all sailors' furnishings, at a fairly profit- 
 able price, in order to save the sailor from the exorbitant price of the 
 boarding-house keeper and the captain's slop chest. This building 
 should have a high tower with an illuminated clock and a Star of Hope 
 
284 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 at its top, throwing a light out into the harbor which should be visible 
 to every sailor coming into the bay, and through the silent watches of 
 the night, suggesting rest and friends ashore. In front of this building 
 the new launcli should be moored, with steam up, ready for active 
 and efficient service. Our special police officer, who gathers from 
 improvident sailors about $5,000 each month for sending nome to their 
 familiesj should have his desk and safe and great register of the names 
 of all visiting sailors in one corner of a great reading room, and the 
 seamen's branch of the Legal Aid Society should be satisfactorily 
 housed; all under the charge of a paid superintendent and a paid sec-, 
 retary, who should look after State and national legislation and the 
 general interests of the sailors in America and foreign lands and keep 
 in touch will all societies for seamen. 
 
 When all this is done, Mr. Chairman, if Christ should come to New 
 York, He would see what the sailor. Prince Henry, did not see, a 
 Sailor's Home, worthy the city; not a sky scraper, but a sea scraper 
 and a world scraper of helpless and needy sailors, the high-water 
 mark of wisest sympathy and of intelligent philanthropy. True, 
 the Sailor Prince is brother to an Emperor; but the common sailor is 
 still a man and a brother. Prince Henry received the freedom of the 
 city; why should not our sailors have some recognition also? "The 
 rank is but the guinea stamp," the sailor "man's a man for a' that." 
 The American Navy was founded by a common sailor, who became 
 famous as John Paul Jones, and three common sailors were offered the 
 freedom of the city in 1847 and 1848 for acts of conspicuous bravery. 
 You might persuade the city and State to make an annual provision 
 for the support of such an institution out of the millions of dollars it 
 receives from the licenses of 13,000 saloons and from dives, dime 
 museums, dance halls, and other sinks of iniquity which now give a 
 revenue to the municipality." 
 
 But we need not wait for that. Miss Gould has built a home in 
 Brooklyn for seamen of the Navy. Mr. Kennedy has built a charity 
 organization building. Mr. Pierpont Morgan has built a woman's 
 hospital. Mr. Carnegie and Mr. Rockefeller have endowed libraries 
 and universities. Other men and women with hearts of oak and the 
 wisdom of both worlds may arise in imitation of their example and 
 do this great work for our rapidly developing commercial marine. It 
 is a great opportunity for good work. But while waiting for such a 
 home we want a launch for present and constant use. 
 
 "We ought to have a women's auxiliary committee and children's 
 guilds to help the Church Missionary Society for Seamen in aid of 
 its several reading rooms and missions. We have had a dry time all 
 these years in raising money, in providing reading matter and enter- 
 tainments, but now I seem to see in this movement of the women of 
 New York a cloud no bigger than a man's hand, aye, no bigger than 
 a woman's hand, from which we may hope for refreshing showers of 
 blessing, cheer, and cooperation. 
 
 This meeting will give encouragement to the friends of seamen in 
 every port and to the hearts of the managers of this society, some of 
 whom have given thii'ty, forty, and fifty years of service. They will 
 
 «The total amount collected under the liquor tax law in this State from Mav 1 
 1896, to September 30, 1901, is said to be $73,604,425.93. See report of State com- 
 missioner of excise recently submitted to the New York legislature. 
 
HEARINGS BEFOKE THE MEECHANT MAEINE COMMISSION. 285 
 
 feel grateful if, when they are called hence and can work no more, 
 there is a hope that other hands and other hearts will take up the 
 work and hand it down,in turn to their successors, until "there shall 
 be no more sea." 
 
 STATEMENT OF HARRY A. HANBURY. 
 
 Harry A. Hanbury appeared before the Commission. 
 
 The Chairman. Mr. Hanbury, what is your business? 
 
 Mr. Hanbury. I am United States shipping commissioner. 
 
 The Chairman. The Commission will be glad to hear anything you 
 may have to say on the subject under consideration. 
 
 Mr. Hanbury. To deal with the sailor and to take care of his inter- 
 est is what our office was organized for. Our first duty when a cap- 
 tain presents a crew for shipment in deep water is to have the captain 
 and crew sign articles of shipment. If the captain does not respect 
 them, there is a penalty attached, and if the men do not, there is 
 penalty for their violation. 
 
 1 wish to call your attention to the fact that in the coastwise trade 
 an owner or master may utilize the sei'vice of a" United States shipping 
 commissioner if he chooses. Over 50 per cent of them utilize the 
 office to-day, but with this understanding, that there is a penalty at- 
 tached to the captain of the vessel should he violate the agreement, 
 but not so in case the men, should violate theirs. Hence all kinds of 
 obstacles are thrown in the way of the owner. 
 
 1 would suggest to the Commission the advisability of compelling 
 all in the coastwise trade to ship their crews through the shipping 
 commissioner's office, as we have a complete record of the services of 
 every man shipped through the office; and also that there should be 
 a penalty attached if a man violates his agreement. 
 
 You have heard the sailors say that they do not think there can be 
 anything done by Congress which would benefit them, but there are 
 safeguards which can be thrown around the sailor, and if you will 
 permit me I will in the near future suggest to the Commission in 
 writing what I think some of them should be. 
 
 sailor's savings. 
 
 I think it would be more inviting to the American sailor's family to 
 institute a system for his benefit on the line that Mr. Johnson suggested 
 to you — a system whereby thB sailor can deposit his money with the 
 United States shipping commissioner to be forwarded to his family. 
 When a sailor gets into this port he is apt to fall into the hands of evil 
 doers. He generally goes to a boarding house or saloon of the lowest 
 order, and one glass of liquor, probably drugged, will put him in such 
 a condition that in a very few hours the chances are that he will have 
 been relieved of his money, and this often after a voyage of fifteen 
 months. If, while he is in his senses, there could be a place where he 
 could deposit his money to be forwarded to his family, the money 
 would probably be deposited by him the moment he was paid off, and 
 hence it would be of advantage to his family to have him ship in the 
 American vessels, which under this suggestion would give him the 
 opportunity to so dispose of his wages. 
 
286 HEARINGS BEJb'OKE THE MERCHANT MARINE COMMISSION. 
 
 SUBJECT TO APPEAL. 
 
 I call your attention to another matter for your investigation. It is 
 the law that any dispute arising between ujaster and crew shall be 
 tried before a shipping commissioner, provided the master and crew 
 sign an agreement to arbitrate the matter, and any award made by the 
 shipping commissioner is final. There is no appeal. We are com- 
 pelled to see the men and the master and get tnem to sign a blank, 
 each sailor for himself; and then try the case. The law should be so 
 amended as to provide that all disputes between the captain and the 
 members of his crew shall be heard and tried, and the decision made 
 by the shipping commissioner should be subject to appeal to a United 
 States district court. 
 
 I will avail myself of the privilege you have accorded me of filing 
 later other suggestions on this subject. 
 
 Senator Lodge. Will you kindly reduce to writing, also, that we 
 may have the benefit of them in that shape, the suggestions about the 
 amendment with respect to the power of a shipping commissioner to 
 arbitrate, and also as to conferring upon the shipping commissioner 
 power to receive deposits, etc. ? 
 
 Mr. Hanburt. I will. 
 
 Representative Minor. I think that is a good thing. 
 
 ADDITIONAL STATEMENT OF FIELDS S. PENDLETON. 
 
 Mr. Pendleton. Mr. Chairman, I have here a letter which I desire 
 to read to the Commission: 
 
 Donald Steamship Company. Inc., 
 
 18 Broadway, N'. Y., May ^5, 19UJ^. 
 Dear Sir : I regret very much that I was unable to fulfill my promise 
 yesterday to appear before the Commission to testify regarding the 
 relative costs of operating the steamship David under the American 
 and Norwegian flags. To-day it is inconvenient for me to do so, 
 although I might possibly arrange to give you a half hour in the after- 
 noon, but I send herewith two portage bills which will show to you as 
 fully as I can explain in person the difference in operating expenses. 
 I shall be pleased to hear from you by telephone if you require any 
 explanation of any further point, and if you desire that I should still 
 appear. 
 
 Yours, truly, • Donald Steamship Co., 
 
 Thos. Hannat, Trea^surer. 
 Mr. Pendleton, 
 
 (Care of Merchant Marine Commission, Board of Trade 
 and Transportation room, 203 Broadway, city). 
 
 Here is a portage bill on the American scale on a vessel which ran 
 over a year out of New Orleans, and the wages are $1,235 per month, 
 as shown by the statement of the master, which I shall leave with you. 
 
HEAKINGS BEFOEE THE MEBCHANT MARINE COMMISSION. 287 
 
 PORTAGE BILL, AMERICAN. 
 
 Wages account of the steamship David, from New Orleans to Ceiba, Spanish Honduras. 
 
 Name. 
 
 Rating. 
 
 Com- 
 menced. 
 
 Dis- 
 charged. 
 
 Wages 
 
 per 
 month. 
 
 Time 
 
 on 
 board. 
 
 Total 
 wages. 
 
 Signature. 
 
 
 Master 
 
 First mate.. 
 Second mate 
 Carpenter . . 
 
 Aug. 13 
 
 !!!!do!!! 
 
 Aug. 25 
 
 !!!'.do;;; 
 
 5150.00 
 75.00 
 50.00 
 36.00 
 30.00 
 30.00 
 30.00 
 
 30.00 
 30.00 
 135.00 
 
 80.00 
 
 70.00 
 
 50.00 
 50.00 
 50.00 
 60.00 
 50.00 
 
 50.00 
 60.00 
 60.00 
 50.00 
 15.00 
 
 26.00 
 
 Days. 
 13 
 13 
 13 
 13 
 13 
 13 
 13 
 
 13 
 13 
 13 
 
 13 
 
 13 
 
 13 
 13 
 13 
 13 
 IS 
 
 13 
 13 
 12 
 13 
 13 
 
 13 
 
 865.00 
 32.60 
 21.67 
 16.17 
 13.00 
 13.00 
 13.00 
 
 13.00 
 13.00 
 68.50 
 
 34.67 
 
 30.33 
 
 21.67 
 21.67 
 21.67 
 21.67 
 21.67 
 
 21.07 
 21.67 
 20.00 
 21.67 
 6.50 
 
 10.83 
 
 
 James B.Watkins... 
 
 Jos. Bonansinga 
 
 L C Visser 
 
 Jas. B.Watkins. 
 
 ....do... 
 
 ....do... 
 
 L.C. Visser. 
 
 OttoEhmling 
 
 ....do... 
 
 ....do... 
 
 0. Ehmling. 
 
 do 
 
 ..do... 
 
 ....do... 
 
 M.Moganson. 
 
 
 do 
 
 do. . 
 
 ....do... 
 
 Michael Volanti- 
 
 
 do 
 
 ..do... 
 
 ....do... 
 
 no.a 
 Jos. Bonansinga. « 
 
 
 do 
 
 ....do... 
 
 ....do... 
 
 
 
 Chief engi- 
 neer. 
 
 First assist- 
 ant engi- 
 neer. 
 
 Second as- 
 sistant 
 engineer. 
 
 Oiler 
 
 ....do... 
 
 ....do... 
 
 
 
 ....do... 
 
 ....do... 
 
 Jas. Cross. « 
 
 
 ....do... 
 
 ....do... 
 
 Thos. Cox. 
 
 
 ....do... 
 
 ....do... 
 
 
 Luke Nolan 
 
 do 
 
 do... 
 
 . ..do... 
 
 L. Nolan. 
 
 Henry Olsen 
 
 Walter 
 
 
 ....do... 
 
 ....do... 
 
 H. Olsen. 
 
 do . . . 
 
 ....do... 
 
 ....do... 
 
 W. Calgahan. 
 
 
 do 
 
 ....do... 
 
 ....do... 
 
 
 
 do 
 
 ....do... 
 
 ....do... 
 
 son. 
 
 Patrick Gannon 
 
 do 
 
 do . 
 
 ....do... 
 ....do... 
 
 Patrick Gannon. 
 
 William Lusk 
 
 do 
 
 ....do... 
 
 W. Lusk. 
 
 Josiah Moody 
 
 Cook 
 
 . do . . . 
 
 do... 
 
 Josiah Moody. 
 
 Emll Faustin 
 
 Ellis Hart 
 
 Assistant 
 cook. 
 
 M. R. stew- 
 ard. 
 
 ....do... 
 .v.. do... 
 
 ....do... 
 ....do... 
 
 Emile Faustin. 
 
 
 
 Total 
 
 1,235.00 
 
 533.53 
 
 
 
 
 
 
 
 Twenty-three men. 
 
 a His X mark. 
 
 CASH DSAWN. 
 
 Due ship, last portage bill $16. 97 
 
 Food on coast to account of employees 22. 00 
 
 August 26, cash, VacBaro Bros. & Co 500. 00 
 
 Total cash drawn 638. 97 
 
 CASH LAID OtIT. 
 
 Aug. 12. Towels for ship's use 1. 00 
 
 Quinine 50 
 
 13. Watchman 4. 00 
 
 26. Commissioner 2. 00 
 
 Ship's'waahing 60 
 
 District court 12. 39 
 
 United States marshal 7. 30 
 
 27.79 
 Portage bill 533.55 
 
 Total expenditure 561. 32 
 
 Due captain 22. 35 
 
 538.97 
 
 E. & O. E. 
 
 James Dukie, Master. 
 
288 HEAEINGS BEFOBE THE MERCHANT MABINE COMMISSION. 
 
 They ran the vessel a year under the American flag and then they 
 ran her under the Norwegian flag in the same trade, and we also have 
 that portage bill: 
 
 POSTAGE BILL, NORWEGIAN. 
 
 Steamship Barld, from March 23 in April 8, voyage No. £. 
 
 Name. 
 
 Occupation. 
 
 Engaged. 
 
 Dis- 
 charged. 
 
 Days 
 
 on 
 
 board. 
 
 Monthly 
 wages. 
 
 Total 
 wages. 
 
 Bal- 
 ance 
 due. 
 
 L. H. Warncke . 
 
 
 Mar. 23 
 do 
 
 Apr. 8 
 do ... 
 
 17 
 17 
 17 
 17 
 17 
 17 
 17 
 17 
 17 
 17 
 17 
 17 
 17 
 11 
 17 
 17 
 17 
 17 
 17 
 17 
 
 8100.00 
 46.00 
 30.00 
 30.00 
 20.00 
 20.00 
 20.00 
 20.00 
 
 •40.00 
 30.00 
 10.00 
 80.00 
 50.00 
 35.00 
 26.00 
 25.00 
 25.00 
 26.00 
 25.00 
 25.00 
 
 $66.67 
 26.60 
 17.00 
 17.00 
 11.33 
 11.33 
 11.33 
 11.33 
 22.67 
 17.00 
 6.67 
 45.33 
 28.33 
 19.83 
 14.17 
 14.17 
 14.17 
 14.17 
 14.17 
 14.17 
 
 866.67 
 
 
 
 25.50 
 
 
 Second mate 
 
 do 
 
 do ... 
 
 17.00 
 
 
 ....do... 
 
 ....do... 
 
 17.00 
 
 A. Phil 
 
 A. B 
 
 ....do... 
 
 ....do... 
 
 11.33 
 
 
 do 
 
 ....do... 
 
 ....do... 
 
 11.33 
 
 R. Hansen 
 
 do 
 
 ....do... 
 
 ....do... 
 
 11.33 
 
 M. Christiansen 
 
 do 
 
 ...do 
 
 ....do... 
 ....do... 
 ....do... 
 ....do... 
 ....do... 
 ....do... 
 ....do... 
 ....do... 
 do 
 
 11.33 
 
 F. Pettersen 
 
 Steward . 
 
 do 
 
 22.67 
 
 
 
 ....do... 
 
 17. 00 
 
 
 
 ....do... 
 
 5.67 
 
 A. Carlsen 
 
 Chief engineer . . 
 Second engineer. 
 
 Donkeyman 
 
 Fireman 
 
 ....do... 
 ....do... 
 ....do... 
 ....do.. 
 
 45.33 
 
 H. Jaeobsen 
 
 28.33 
 19.83 
 
 H. Halvorsen 
 
 14 17 
 
 A. Johannesen .... 
 
 do 
 
 do 
 
 14 17 
 
 
 do 
 
 ....do... 
 
 ....do... 
 
 14.17 
 
 
 do 
 
 ... do. 
 
 do. 
 
 
 J. Nikolaisen 
 
 do . 
 
 do 
 
 do 
 
 14 17 
 
 
 do 
 
 ....do... 
 
 ....do... 
 
 14.17 
 
 
 
 
 
 
 Total . . . 
 
 680.00 
 
 3S5.34 
 
 385 34 
 
 
 
 
 
 
 
 Twenty men. 
 
 New Okleans, April 8, 1903. 
 
 E. & O. E. 
 L. H. Waknckb, 
 Master Steamship David. 
 
 First the vessel was nearly a year in the trade under the" American 
 flag and then for nearly one year under the Norwegian flag in the same 
 trade. Under the Norwegian flag it foots up to $680 per month. 
 Seeing the advantage that accrued from sailing under ihe Norwegian 
 flag, the owner changed the steamship from the American to the 
 Norwegian flag. 
 
 The Chairman. The papers you have presented will be printed in 
 the record. 
 
 Mr. Pendleton. I thank you very much for your attention. 
 
 STATEMENT OF GEOEGE J. SEABURY. 
 
 Mr. Seabury. I wish to state before I make any remarks that I 
 have no interest whatever in shipbuilding, in any shape or form, and 
 that any statements I may make are submitted as a practical commercial 
 economist, exporter, and manufacturer, and last, but not least, as a 
 patriotic American. 
 
 Theoretical views will not enter into my pleading, but will repre- 
 sent the experience of every industrial nation that builds its own mer- 
 chant marine for the expansion and transportation of its own commerce 
 and at the same time becomes a competitor for general shipping. A 
 statesman having had commercial training will quickly appreciate and 
 support these logical deductions. 
 
 In the first place, the economies in steamship building are well 
 understood by our great shipbuilders and all practical men of affairs, 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 289 
 
 SO that on that score it is unnecessary for anyone to make a special 
 plea. We are at present surrounded' on all sides by removable disa- 
 bilities that are chiefly confined to generous national subventions in 
 the form of postal or war service expenditures or a direct tonnage sub- 
 sidy. The governmental subsidy form is the chief .reason why our 
 shipbuilders can not compete with their foreign rivals. The initial 
 reason, however, is the disparity in American wages and hours of toil. 
 As previously stated, these conditions are understood by our ship- 
 builders, and the only way to restore an American merchant marine 
 is to place them on an equal basis so far as gratuities are involved, and 
 yet, in the restoration of an American maritime power the diflference 
 between the wages is a most insignificant one when we probe into the 
 grand indirect results of building and repairing our own merchant 
 marine. 
 
 BUILD OUR OWN SHIPS. 
 
 It certainly would be a most impolitic act on our part to permit for- 
 eign ships to receive American registry simply because we could buy 
 them cheaper. For that matter, I believe that if Congress passed a 
 law permitting one to two million tons of foreign steamships to receive 
 American registry during the first year of a subsidy shipping act, the 
 chances are that the International Merchant Marine Company would 
 attempt to unload their worn-out fleet on American cb.t)italists. We 
 have waited more than a generation to receive proper emouragement 
 from the Government, and we can well afford to wait a few years 
 longer to build our entire American merchant marine, and not give the 
 benefit of this immense tonnage and work to foreign shipbuilders, wage- 
 earners, or capitalists. We can furnish the raw materials, manufac- 
 tures, and labor ourselves in great abundance. 
 
 Some of our legislators in Washington have used in debate the offen- 
 sive and untruthful words "treasury loot" to define a ship-subsidy 
 bill that creates and promotes our maritime independence. The motive 
 of restoring shipbuilding is inspired from imperative, patriotic, and 
 occult national benefits. It is an enterprise that has no place what- 
 ever in party politics, since it concerns, directly and indirectly, the 
 prosperity and security of 85,000,000 people. It is a national act, pure 
 and simple. 
 
 The opponents of a merchant marine have for years tried to create 
 a false definition of the word "subsidy;" but whether you consult Web- 
 ster, Worcester, or any other modern dictionary, it merely means the 
 word "aid," or we might call it encouragement or assistance. It is a 
 bonus for a specific purpose. In our case it is simply a loan for the 
 restoration of a national maritime power, and from the manner in which 
 the word is sometimes used one would assume that Congress had never 
 considered a subsidy for the restoration of ocean steamers. I will 
 refresh your memories. 
 
 THE COLLINS SUBSIDY. 
 
 The first subsidy granted by Congress was to the Collins Steamship 
 Line. They built several steamships that equaled the best ocean liners. 
 We carried our freights and passengers at the market rates. When 
 British shipping lines found that we were to become formidable rivals 
 
 3a— 04 19 
 
290 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 for the shipping trade of the world, they at once increased their sub- 
 sidies, and the British shipping lines to meet this competition surpassed 
 the Collins Line by building larger vessels with greater speed. They 
 succeeded in ruining the Collins Line for ocean traffic. Naturally they 
 became possessors of the shipping business. For several years there- 
 after Congress would not interest itself in reestablishing American 
 oceanic shipbuilding and placing our lines upon an equal subsidy basis, 
 but in the course of time they acted by being forced through public 
 sentiment to restore an American merchant-marine service, equalized 
 the subsidies of the day, which were taken advantage of by the Cramps 
 of Philadelphia. They commenced their operations by building several 
 steamships equal to the best models of their time; we again acquired 
 the export and import business to facility limits. To ruin American 
 conipetition the British Government duplicated their previous methods, 
 again increasing the subsidies to their own lines, and in a short time 
 made _ our American Atlantic service a matter for historians. That is 
 how it all happened, and that is why we are without an American 
 merchant marine to-day. If the Government had been wise enough to 
 meet the increased aid upon an eqnal basis, we would have had an 
 adequate merchant marine to-day, but Congress refused to act. 
 
 The Frye shipping bill, in my"^ judgment, after it was passed by the 
 Senate and ready to be acted upon by the House, with the addition of 
 "slow steam freighters to ten-knotters, and to large sailing vessels," 
 would have covered all forms of high and low transportation, but no, 
 the bill remained unacted upon by the chairman of the committee on 
 our merchant marine, who permitted it to remain silent for nearly one 
 year after it had passed the Senate, for reasons perfectly clear to me, 
 but not to most men of affairs who understand what the restoration of 
 an American merchant marine for peace or war means to the nation. 
 Foreign shipping lines, that now control over 95 per cent of our carry- 
 ing trade, exports and imports, or the International Merchant Marine 
 Company, always owned and controlled by British capital, could give 
 the precise answer. 
 
 The commercial analyst finds great results that directly and indirectly 
 expand from a merchant-marfne service to every connective interest 
 involved, and is a most fascinating and interesting study. In the most 
 remote sections of the world our ships will develop new business in old 
 markets, and establish new ones for our ever increasing manufactures 
 and agricultural products. 
 
 If the United States paid all the wages necessary in constructing an 
 adequate merchant marine, it would be one of the grandest national 
 investments ever undertaken by it. Why? 
 
 WHAT WOULD BE SAVED. 
 
 It will cost not less than $600,000,000 to build an adequate merchant 
 marine such as we require in 1904. With our exports at |1,500 000,000 
 and our imports at $1,000,000,000— together $2,500,000,000— and this 
 sum will surely increase, not by small proportions but by great propor- 
 tions, when we have completed the Panama Canal. Out of this $600 - 
 000,000 over $560,000,000 wiU be expended for raw materials and 
 labor. Most of this vast sum and the profits thereof will be circulated 
 at home, instead of as now sent abroad in the form of gold pavments 
 to the foreign steamship lines. Besides, the economies involved in an 
 
HEARINGS BEFOEE THE MERCHANT MARINE COMMISSION. 291 
 
 adequate marine ser\'ice in transacting our national business will give 
 employment to not less than 500,000 among our skilled and unskilled 
 wage-earners on land and sea. 
 
 Transporting our exports, imports, passengers, and postal matter is 
 a most profitable business. If we had a sufficient maritime power 
 to-day to carry our present enormous busincs.s it would require a sum 
 not much less than $250,000,000 per annum for operating the neces- 
 sary steamships and allied contributory interests. The annual profits 
 on this sum to shipping lines and interests involved arc not less than 
 from 10 to 15 percent net, amounting to quite $30,000,000 per annum. 
 The interests that would receive direct business from these annual 
 disbursements would be largely raw materials, coal, and food prod- 
 ucts, and the balance would be labor on land and sea. Moreover, it 
 would represent a new and permanent industry, insuring us independ- 
 ence in peace and war, so that as a matter of fact no argument can be 
 brought forward, on account of the great direct and indirect benefits 
 and advantages in building our own merchant marine. As a national 
 business proposition it is one of the best and most beneficent projects 
 that could be conceived for national protection. 
 
 The profits from regular mail charges, passenger service, export 
 and import freights will be most satisfactory to American lines. The 
 enterprise will give new employment to a great army of wage-earners 
 at home, manufacturers will receive new business from shipbuilders, 
 and American raw materials find new uses, but beyond all these great 
 national benefits the greatest advantage of having a merchant marine 
 will come from new markets. Our exports will be increased wherever 
 we have direct communication with commercial ports. Our consular 
 service will be of incalculable importance in the promotion and expan- 
 sion of commerce. The most expert statistican or commercial econo- 
 mist can not compute the value of more intimate trade relations with 
 the world. This much, however, can be asserted with absolute truth, 
 that a fifteen or twenty year subsidy shipping bill, amounting to any- 
 where from 175,000,000 to $100,000,000 during the continuance of such 
 act, will be indirectly repaid to the nation one hundred times or more 
 through the increase of export trade alone, especially in China, Japan, 
 Korea, and the oriental countries, first, because of our ability to com- 
 pete with the world in the manufactures; second, greater facility in 
 making quicker voyages and deliveries. These commercial factors 
 must also be seriously considered in connection with European shipping 
 and export business. 
 
 Mr. Hill made a statement yesterday in which he really admitted 
 that he favored a tonnage subsidy, yet at the same time, for unknown 
 reasons, he stated that we did not need subsidies! There must be some 
 motive in having affirmative and negative views. His ships being the 
 continuation of nis railroad system, were a profitable convenience in 
 the progress of his railroad, mining, and many other interests. It 
 stands to reason that he could easily construct a few steamships with- 
 out a subsidy, inasmuch as he was not competing for general shipping 
 business in the Orient. He certainly was not the pioneer in a similar 
 enterprise, for Carl Spreckles preceded him by building steamships for 
 the transportation of nis own raw and finished products; consequently 
 those selfish interests can not be considered when an argument is being 
 made for the restoration of pure and simple national shipping on a 
 competitive basis. 
 
292 HEARINGS BEFOBE THE MEKCHANT MARINE COMMISSION. 
 
 We must watch the movements of foreign steamship lines and their 
 governmental railroads. These two forms of transportation are being 
 united — in fact, European manufacturers are receiving special freight 
 concessions on exports and imports. The preceding speaker, ex-Con- 
 gressman Farquhar, has given expression to connective transportation 
 on land and sea, such as I have entertained for the past five years, and 
 they are, that in the coming struggle in perpetuating our commercial 
 supremacy, cheap transportation will be an important factor. Our 
 great railroad lines having terminals at the coast waterways will be in 
 the best position when a liberal shipping bill has been passed to estab- 
 lish shipping lines and control transportation in connection with their 
 own railroad systems to insure low freight rates. 
 
 OtJE NATIONAL PEKIL. 
 
 During the past ten years manufacturers, exporters, and shipping 
 agents have suffered through their inability to secure or charter ves- 
 sels — steam or sail — for foreign ports. The humiliating fact that 
 harassed us during the Spanish war was, that we went begging 
 throughout the world for army transports. During that time we 
 were once the central object of a European shipping conspiracy, which 
 would have prevented us from securing ships in that war for our 
 exports, imports, or our soldiers, had it not been for the German 
 Emperor, who refused to be a part of such compact; if he had, we 
 might have had great difficulty in shipping our exports and imports, 
 or carrying our soldiers to the Philippines. No patriotic citizen can 
 longer be blind to his duty in promptly demanding and praying for 
 the restoration of an American merchant marine. 
 
 It has been stated, perhaps to influence legislation, that we are unable 
 to build steamships equal to those of foreign shipwrights! I have 
 traveled the civilized world over scores of times in the highest exam- 
 ples of marine architecture, and I have yet to see steamers or sailing 
 vessels that surpiass our graceful models, general construction, and 
 workmanship. Our sound, coast, and lake steamers are the admira- 
 tion of the world, both in elegance, comfort, and conveniences. The 
 last steamer examined hy me, the ManchuHa,^ built for the Pacific 
 Mail Steamship Compan}^, for trade in the Orient, is a contradiction 
 of any such assertion. 
 
 It was my pleasure a few weeks ago to cross on the highest example 
 of ocean liners, one of the North German Lloyds, the largest steam- 
 ship afloat, splendidly constructed in all its parts, a beautiful piece of 
 marine architecture. The only regret that I had, with all due respect 
 to the flag she bore, was that she did not fly the American flag, and I 
 do hope to live long enough to see the day when 1 can cross on an 
 equally good vessel with Old Glory at its topmast. 
 
 « 
 
 GREAT VESSELS. 
 
 I am positive when our master shipbuilders undertake the construc- 
 tion of steamships under a subsidy bill that they will be forced to 
 commence by building vessels larger, or as large as, in order to com- 
 mence where they have left off, for in my judgment shipbuilders in 
 the future, whenever possible, will continue to increase the size of 
 ocean steamers until they have reached a maximum point of speed and 
 
HEABINGS BEFORE THE MERCHANT MARINE COMMISSION. 29 fi 
 
 eai'ning capacity, inasmuch as the economies are but slightly increased 
 with the larger dimensions. This gives to the constructors of larger 
 vosspIs an advantage in operating expenses — a point which will he 
 taken into account by the various shipping interests. 
 
 Consequently, the abilities of our marine architects will not be 
 strained when our time comes to build our own merchant marine. 
 We will have the brains, capital, material, and the skilled workmen to 
 build in the highest style or the art, with or without the turbine S3's- 
 tem. Then, indeed, our exports, imports, passengers, and mail will 
 be carried in American-built steamers flying the Stars and Stripes, as 
 in the days of the old Collins and Cramp line of steamers. 
 
 Germany has become the most active and successful competitor in 
 the manufactures; her present position is due primarily to her mer- 
 chant marine, and secondarily to her intelligent consular service; her 
 steam and sailing lines are to-day the strongest competitors for the 
 world's commerce, and have attained their great power and strength 
 through liberal subsidies and secret terms. It is immaterial under 
 whatever name you class national aid, so long as you place our ship- 
 builders upon a competitive basis. When an adequate merchant 
 marine has been completed, and it will take many years to construct 
 it, together with the Panama Canal, our Department of Commerce, 
 the Lovering drawback bill, a reformed consular service, and an able 
 tariff commission, depend upon it, in another generation we will be 
 the industrial and financial power in the world. [Applause.] 
 
 VIEWS OF AARON VANDERBILT. 
 
 The Chairman. The Commission has received a communication from 
 Mr. Aaron Vanderbilt, which will be printed in the record. 
 The communication is as follows: 
 
 New York Board of Trade and Transportation, 
 
 JVew York, May 81, 1904. 
 The Merchant Marine Commission, 
 
 (The Hon. Jacob H. Gallinger, Chairman), 
 
 JVew York City, N. Y. 
 
 Gentlemen: I have the honor to acknowledge receipt of your com- 
 munication of the 13th instant, inviting me to be present at the hear- 
 ings of the Merchant Marine Commission on the 24th instant, and to 
 state to the Commission what, in my judgment, should be done to arrest . 
 the decline of our shipping in the over-sea trade and to restore the old 
 maritime strength of our country. 
 
 The special committee on the merchant marine of the New York 
 Board of Trade and Transportation, of which committee I have the 
 honor to be the chairman, was appointed to inquire into the alarmingly 
 depleted state of American shipping in the foreign trade, which is now 
 100,000 registered tons less than almost one hundred years ago, when 
 we carried 90 per cent of our over -sea commerce, while we now carry 
 less than 9 per cent. The committee prepared a statement showing 
 these facts, and this, with the board's resolutions, setting forth the 
 nonpartisan purpose of our inquiry, were forwarded to all the news- 
 papers and commercial associations of the United States. We have 
 been gratified by the volume and character of response. The result 
 has been a vivia demonstration that popular interest in the cause of 
 
294 HEAETNGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 American shipping is deep and earnest, not only in our seaboard com- 
 munities but in the Mississippi Valley and the farther "West. We have 
 received replies from nearly every State and Territory of the Union, 
 hundreds in aggregate number, all manifesting a desire for the upbuild- 
 ing of a new American merchant marine. 
 
 Many commercial associations, in answer to the Board's inquiries, 
 have adopted resolutions urging the question of the American ship 
 upon the attention of the country's business interest and of Congress. 
 Some of these resolutions have indicated a preference for this or that 
 particular policy of relief, but in the majority of cases there has been 
 merely an emphatic declaration that something should be done, leaving 
 the precise method to further investigation or to the wisdom of the 
 Government. 
 
 Of course the question has aroused favorable action in seaboard 
 cities where maritime interests are strong, but it is significant that ear- 
 nest resolutions have come from important cities of the Middle West, 
 like Denver, Omaha, Milwaukee, and from San Francisco and Seattle, 
 as well as New York and Philadelphia, and even from Alaska, Porto 
 Rico, and the Hawaiian Islands. Resolutions and correspondence are 
 still coming in, and it is plain that the question of our merchant marine 
 steadily assumes increased importance before the country. 
 
 It is not a pleasant thought to the patriotic citizen that our ocean 
 tonnage is now 100,000 tons less than it was almost one hundred years 
 ago, when it carried 90 per cent of our commerce and now carries less 
 than 9 per cent. 
 
 Under such conditions we may contemplate with alarm our predica- 
 ment as a nation in the event of difficulties with a foreign power. 
 
 The navy and merchant marine of Japan in her war with Russia 
 commands the sea. Her merchant marine furnishes a reserve for her 
 fleet and transportation for her armies and supplies, again demon- 
 strating the advantage of sea power in a nation's peril. 
 
 The committee has not as yet finished its investigations and deliber- 
 tions, and I am therefore unable to present its views at this time. I 
 , feel that under the circumstances any expression of my personal 
 opinion of a specific method would be out of place, and I prefer to 
 defer the making of any statement until I can do so with the sanction 
 of my committee and the approval of the body it represents. 
 
 Thanking you for the honor conferred upon me by your inquiry, 
 and trusting to avail myself of the opportunity before the close of 
 your deliberation, I beg to subscribe myself, very respectfully, 
 
 Aaron Vanderbilt. 
 
 STATEMENT OF H. 1. ALDRICH. 
 
 H. L. Aldrich, president and treasurer of "Marine Engineering," 
 submitted the following statement: 
 
 There are two distinct divisions on the subject of building up the 
 American merchant marine. 
 
 First. That of building the vessels. 
 
 Second. That of operating them. 
 
 Let us consider first the building of the vessels. It costs from 10 to 
 30 per cent more to build a steamship in this country than it would 
 cost to build the same ship in the United Kmgdom. I sincerelj' believe 
 
HEAEINGS BEFORE THE MERCHANT MARINE COMMISSION. 295 
 
 that a better vessel would be built here than would be built abroad. 
 Unfortunately, however, it probably would not have more earning 
 capacity. As Jfar as I can understand from personal inquiries there 
 would not be this great difference in the cost of construction if our 
 shipbuilders could be assured that they would have orders for several 
 vessels, or fleets of vessels, instead of individual vessels. 
 
 That we can build vessels cheaply in this country under proper con- 
 ditions has been shown on the Great Lakes, where steamers of from 
 4,000 to 8,000 tons are built in less time and as cheaply if not cheaper 
 than they could be built in any other part of the world. This is 
 accounted for largely by the fact that in addition to the use of labor- 
 saving machinery of all kinds the vessels built are practicall}' all of 
 one type. 
 
 Another point of vital importance under this heading, and one that 
 deserves very careful attention, is that structural material for ship- 
 builders is oftentimes sold by our steel plants at a less price across 
 the ocean than it will be sold to shipbuilders in this country. 
 
 Now as to the operating of vessels. There is no such, possible solu- 
 tion under this heading that there is under the first. The scale of 
 wages to all classes of people is much higher in this country than in 
 any other, and there is no way by mechanical ingenuity or other 
 means to obliterate the personal equation. 
 
 Imagine a chief engineer with a British Board of Trade license, as 
 well as a corresponding license from the Steam Vessel Inspection 
 Service of the United States. He goes down to the wharf in South- 
 ampton, England. If he happens to go on board an American liner, 
 he must be paid $150 a month. If he should happen to go to another 
 wharf to be chief engineer of a Royal Mail steamer to South America, 
 his maximum wages, according to statistics published in Marine Engi- 
 neering in June, 1900, would be $121.75 a month; probably consider- 
 ably less than this, unless he should happen to have one of the largest 
 ships on the line. Suppose, however, he should go to the wharf of 
 the Union Line, to South Africa, his wages then would be from |97. 25 
 to $121.75. If he were to ship as chief engineer on board a steamship 
 of corresponding size in Hamburg, Germany, according to the statistics 
 quoted, his wages would vary from $59.50 to $71.40. There is a cor- 
 responding difference in wages for all the other men in the engine 
 room, and the same applies also to the navigating officers. 
 
 This great difference in wages must, of necessity, be made up from 
 outside sources, for an American ship agent can not charge nigher 
 rates for passenger or freight traffic than a foreign ship agent; he can 
 not get more work out of a ship than a foreign ship agent, nor can he 
 expect a higher degree of efficiency from American citizens than could 
 be expected from corresponding employees in a foreign merchant 
 marine. 
 
 It is necessarj', therefore, to meet this great difference in wages, in 
 addition to tonnage and mail subsidies which are paid by many foreign 
 governments. 
 
 Almost every other individual industry in the United States has 
 been protected, except that of shipbuilding, and this once great indus- 
 try has now dwindled until our foreign merchant marine is practically 
 extinct. It seems to me the only way to revive this industry is for 
 the Government to protect it in some manner either by direct subsidy 
 or by differential duties. The latter system would meet with more 
 
296 HEABINGS BEFORE THE MEKCHANT MARINE COMMISSION. 
 
 general favor from all parts of the United States, because it is more 
 in the form of indirect taxation than direct. 
 
 Possibly the subsidy plan would receive more indorsement if it were 
 proposed to make payments for equalizing wages direct to the ship's 
 crew instead of to the ship's owners. This, however, would be a case 
 of "distinction without a difference." 
 
 In small, but important, ways foreign vessel owners have other 
 advantages over American vessel owners. They are not obliged to 
 house or feed their men so well. They load their vessels more deeply 
 and more heavily than the laws of the United States permit our vessels 
 to do, and the masters of foreign vessels frequently haA'e an under- 
 handed way of forcing members of the crew who have signed for the 
 round voyage to run away here in the middle of the voyage and thus 
 sacrifice wages which are due onlj)- at the end of the voyage. 
 
 To attempt the upbuilding of our merchant marine against present 
 odds without "governmental support is like starting a heavy loaded 
 team which has stopped half way up a steep hill. If the Government 
 will give the necessary momentum to this upbuilding, there is no 
 doubt but what we have in this country brains and energy necessary 
 to place our merchant marine in a few years on a plane corresponding 
 with the commercial importance of the United States. 
 
 STATEMENT OF GEORGE S. DEAEBORN. 
 
 George S. Dearborn, president of the American-Hawaiian Steamship 
 Company, submitted the following statement: 
 
 The only steamers of the up-to-date type of cargo carriers under the 
 American flag, engaged in the foreign trade, are those few that were 
 brought into existence within the last three years in the belief by the 
 owners that the late subsidy bill would become a law, giving evidence 
 that such a measure would bring about the desired results, and that 
 without some Government aid no American merchant marine is likely 
 to be developed. 
 
 The protective policy of the dominant party had fostered every 
 internal industry, and the shipping interests only to the extent of 
 giving them the exclusive coastwise trade, and both parties have been 
 agreed upon the latter policy. 
 
 The over-sea carrying trade by American ships can only be brought 
 about by Government aid, either in the shape of a subsidy to cever 
 additional first cost of ships and increased cost of operating, or some 
 other means which would be the same in effect. If Congress considers 
 it to the advantage of this country to be properly represented on the 
 high seas and in the foreign conveying trade, it must give substantial 
 and tangible encouragement to financial interests to undertake the 
 development for the first time and on a large scale of a merchant 
 marine that will compare favorably with any afloat. Discriminating- 
 duties are too indefinite, which might result in retaliatory measures 
 by. other countries, and the fact that only on homeward voyages would 
 any benefits be received, and so much of the tonnage being on the free 
 list, capital would not consider the security favorably. 
 
 The present British merchant marine, comprised mostly of steam 
 cargo carriers, is the outgrowth of the sailing ship era of that country. 
 Sailing vessel owners gradually adopted steamers and ceased building 
 sailing vessels, and were able to market their securities in England on 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 297 
 
 such a large scale that the development was rapid. The substitution 
 of metal for wood in the construction of sailing vessels, when it could 
 not be obtained in this country at a reasonable price, gave the British 
 sailing-ship owner the opportunity to use a metal ship with which a 
 wooden ship could hardly compete, thus confining the employment of 
 the American wooden ships to our coastwise trade with the Pacific. 
 Under these conditions most of the Amei'ican shipowners gradually 
 went out of business and many transferred their capital and energies 
 to internal development, so this country was without the nucleus for 
 a modern merchant marine and the embargoes were such that no new 
 element took their place. 
 
 The shipbuilding industry in this country is the greatest sufferer 
 to-day, and the condition of most of the concerns in that business is 
 such that it becomes a menace to the development of our Navy in 
 meeting the requirements of our expansion policy, and coming next 
 are those referred to who have recently built steamers in anticipation 
 of a subsidy. 
 
 If a merchant marine is necessary to this country, with all that it 
 implies, Congress must make inducements of a most direct and sub- 
 stantial nature to induce timid capital to embark upon the sea and 
 restore our flag there, and give it a fair but not excessive return for 
 the investment. 
 
 VIEWS or G. STANBURY. 
 
 The following communication was received from G. Stanbury, 
 Lloyds' principEd surveyor for the United States: 
 
 [Lloyd's Eeglster of Shipping, Kemble Building, 15 Whitehall street.] 
 
 New York, Mwy '21^, 190^.. 
 Mr. WiNTHEOP L. Marvin, 
 
 Sbcretai'y Merchant Marine Gon^m.iasion, 
 
 Fifth Avenue Hotel, JVew York. 
 
 Dear Sir: I beg to acknowledge the receipt of your letter dated 
 May 21, in which you do me the honor to ask for my opinion on cer- 
 tain matters in connection with the cost of building ships in this coun- 
 try as compared with the cost in the shipyards of Great Britain. 
 
 I now have pleasure in stating, for trie information of the United 
 States Merchant Marine Commission, the following remarks, which 
 are the result of the observations I have been in the position to make 
 during the three years that I have had charge of the work in the ship- 
 building yards in the United States done under the inspection of the 
 surveyors of Lloyd's Register of Shipping. 
 
 The greater cost of constructing vessels in this country as compared 
 with the cost of similar work in the United Kingdom is to be ascribed 
 in my opinion to the higher cost of labor and materials in the United 
 States and to the much longer time taken here to build and complete 
 a steamer. It is a general practice in many British shipyards to build 
 vessels of similar types and dimensions. This practice obviously 
 admits of rapidity in doing the work combined with economy in pro- 
 duction. Excepting the shipbuilding yards on the Great Lakes, the 
 practice of repetition has not hitherto been in vogue in the shipyards 
 of this country. The experience gained in British yards in building 
 
298 HEAEIN08 BEFORE THE MERCHANT MAEIHE COMMISSION. 
 
 numerous vessels of the same type and dimensions appears to me to 
 be at present wanting in the United States. 
 
 I consider the high cost of labor and materials the most important 
 factors in this comparison, and that these are the direct consequences 
 of the protective system of the United States. The tariffs of the coun- 
 try necessarily increase the cost of living here. It follows that the 
 cost of labor must be higher than it is in countries where the tariffs 
 are less. It appears to me illogical that the building of vessels for 
 ocean trade, which must be constantly increasing m importance, 
 together with the prosperity and security of the tfnited States with 
 its great extent of seaboard, should be placed at great disadvantage in 
 not being allowed a measure of protection similar to that granted by 
 the laws of the United States to all the other industries. So long as 
 the present system of tariffs prevail here it appears to be only fair 
 and logical to include the shipping interests in that system with all 
 other manufacturing industries of the country. 
 Very truly, yours, 
 
 G. Stanbuey, 
 Principal Surveyor for the United States. 
 
 THANKS TO NEW YORK BOARD OF TRADE AND TRANSPOR- 
 TATION. 
 
 Senator Lodge. Mr. Chairman, before the Commission adjourns I 
 desire to offer a resolution. 
 
 The Chaieman. The resolution will be read. 
 
 The secretary read the resolution as follows: 
 
 '•'' BesoVoed, That the Merchant Marine Commission gives cordial 
 thanks to the New York Board of Trade and Transportation for the 
 use of its rooms and for all the kind ar d graceful hospitalities extended 
 during the hearings of May 23, 24, and 25." 
 
 The Chaieman. The question is on agreeing to the resolution sub- 
 mitted by the Senator from Massachusetts. 
 
 The resolution was unanimously agreed to. 
 
 The Chaieman. I wish, on behaS of the Commission, to return 
 thanks to the several gentlemen who have elucidated this subject and 
 given us material for thought. We should be pleased to remain longer 
 in this delightful and hospitable city if our public duties would permit, 
 but we have engagements elsewhere and must now bid you good-bJ^ 
 [Applause.] 
 
 Tnereupon (at 12 o'clock meridian) the Commission adjourned to 
 meet in Philadelphia to-morrow, Thursday, May 26, 1904, at 10.30 
 o'clock a. m. 
 
 HEARINGS AT PHILADELPHIA. 
 
 Rooms of the Boaed of Teade, The Bouese, 
 
 Philadelphia, Pa.., Man/ 26, 190 Jf.. 
 The Commission met at 10.30 o'clock a. m. 
 
 Present, Senators Gallinger (chairman), Lodge, Penrose, Martin, 
 and Mallory; and Representatives Minor, Humpnrey, and Spight. 
 
 The Chaieman. As a matter of information for gentlemen who may 
 not have read the statute under which this Commission was ci'eated, 
 the Chair will take the liberty of saying that on April 28, 1904, there 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 299 
 
 was approved an act entitled "An act creating a commission to con- 
 sider and recommend legislation for the development of the American 
 merchant marine, and for other purposes." 
 
 The Commission was to be composed of five Senators, to be appointed 
 by the President pro tempore of the Senate, and five members of the 
 House of Representatives, to be appointed by the Speaker of the House. 
 Section 2 of the act reads as follows: 
 
 "That it shall be the duty of this commission to investigate and to 
 report to the Congress on the first day of its next session what legisla- 
 tion, if any, is desirable for the development of the American mer- 
 chant marine and American commerce, and also what change, or 
 changes, if any, should be made in existing laws relating to the treat- 
 ment, comfort and safety of seamen, in order to make more attractive 
 the seafaring calling in the American merchant service." 
 
 You will observe there is no suggestion that the Commission shall be 
 treated to oratory concerning the exisiting deplorable condition of the 
 merchant marine, which we all understand and recognize, but it is to 
 seek information from practical men as to the remedy, if any there be, 
 to rehabilitate the American merchant marine. 
 
 With that understanding we will proceed with the hearing, and I 
 will ask Mr. Joel Cook to make a statement to the Commission. 
 
 STATEMENT OF JOEL COOK, PRESIDENT OF THE PHILADELPHIA 
 
 BOARD OF TRADE. 
 
 Mr. Cook. Mr. Chairman and gentlemen, I will premise, as presi- 
 dent of the Board of Trade, by thanking the Commission for having 
 accepted our invitation to come to Philadelphia and use our hall for a 
 pubUc hearing on this important question. The Philadelphia Board 
 of Trade has always been very deeply interested in anything that 
 would extend the three great industries of importance to the country — 
 .agriculture, manufactures, and commerce — and it is particularly inter- 
 ested in the development of the American branch of our foreign teade — 
 commerce. 
 
 Without desiring to inflict upon you anything in the way of oratory 
 at all, I would simply like to devote a moment to calling your atten- 
 tion to the fact that the policy of the United States heretofore, in 
 carrying on what has been well called the American system, has enor- 
 mously developed agriculture and manufactures. It has also developed 
 the commerce of the country, but not entirely upon American lines 
 similarly to the development of the other two branches. 
 
 It has recently expended $50,000,000 for the Panama Canal for the 
 development of commerce; it is expending between $5,000,000 and 
 $6,000,000 in the Delaware River to develop commerce; it is doing 
 the same thing in all the great ports of the Atlantic coast and the 
 Gulf to develop commerce; but this development is not in the same 
 line as that which has been made in the character of the laws and in 
 the policy adopted by the Government in the development of manu- 
 factures which has proceeded to such an enormous extent and to such 
 great advantage for the United States in the past half century. 
 
 Of course you come to seek a remedy for this condition of our com- 
 merce. There have been various remedies proposed. We in the 
 Board of Trade do not think that some of the remedies proposed 
 amount to anything as radical remedies for the trouble. 
 
300 HEABINGS BEFOBE THE MERCHANT MAEIKE COMMISSION. 
 AGAINST 
 
 For instanco, free ships. I have been an investor in shipping for a 
 great many years, but I have not been an investor in any ship or ves- 
 sel of any class .or character that did not fly the American flag. And 
 for that reason, after making a study of the policy and laws and 
 methods as pursued in the United States, I concluded a number of 
 years ago that it was all folly to make any further investment in ships 
 carrying the American flag to sail in the foreign trade, because the 
 effort to sail them was against conditions and under disabilities that 
 were insurmountable. Therefore I stopped, way back in the eighties. 
 
 Mr. Chairman, I could then and can now have project after project 
 presented to me to invest in ships under foreign flags. Anybody in 
 America can do it now, but that does not accomplish the result we are 
 after. The whole of the policy of the United States is American. We 
 encourage manufactures because they are American. Anybody can 
 go abroad and buy a foreign suit of clothes, but the suit of clothes, 
 even though he pays his money for it and brings it across the ocean, 
 is not an American suit. He can go abroad and get a foreign watch, 
 but it is not an American watch. 
 
 I carry in my pocket a watch bought by my father fifty years ago, 
 at the time when the first American tariff was arranged to protect the 
 manufacture of the movements of watches. He thought it bis duty to 
 buy an American watch. He paid a high price for it. It was an 
 American watch. He could have got then probably a better watch of 
 foreign manufacture, but he wanted an American watch. 
 
 And similarly with the ship. We can buy ships abroad and sail 
 them under a foreign flag, but they are not American ships, and there 
 is no system of law, there is no method that can be pursued by the 
 Congress of the United States to make a ship that is manufactured in 
 a foreign shipyard an American ship. It is not such a ship. 
 
 Senator Mallort. May 1 interrupt you for a moment ? 
 
 Mr. Cook. Certainly. 
 
 Senator Malloet. I should like to inquire whether from your 
 experience in and knowledge of this matter and the conditions, you 
 have any opinion with regard to whether it would be sufficiently 
 profitable to induce a man to go into the business of buying foreign- 
 built ships, and putting them in commerce under a foreign flag. Is 
 that a paying business to-day for Americans? 
 
 Mr. Cook. I was going to come to that in a moment, sir. If you 
 buy your foreign ship and put it under the American flag by statute, 
 or if you buy j'our foreign ship and sail it under a foreign flag, it does 
 not help the condition for Americans. 
 
 Now, imagine for a moment that you have a foreign ship under the 
 American flag. You are still compelled, under the present legal con- 
 ditions, to sail that ship according to the American system and the 
 American prices, and you can not compete with the foreigners. It 
 costs you too much money to do it. The running expenses of the 
 voyage, the supplies, and all the other matters that enter into what 
 you may call the charge, the working expense of maneuvering and 
 moving that ship, are too high. 
 
HEARINGS BEFOEE THE MEBCHANT MARINE COMMISSION. 301 
 
 TWO SHIPS COMPARED. 
 
 I have in my pocket a statement which a friend of mine gave me 
 with respect to two steamers that are at present sailing in the Pacific 
 trade; thafis, from the Pacific coast of the United States across to 
 China, Japan, and the Orient. Each of them is of about the same 
 size and of the same age. Both steamers were built in the year 1900. 
 One is an English steamer and the other an American. The English 
 vessel's dead weight capacity is 5,400 tons and the American's 5,200 
 tons. 
 
 The American ship cost about $350,000 to construct. The captain 
 of the English ship has a monthly pay of $100; the captain of the 
 American ship, $200. The mate of the English ship receives |50; the 
 mate of the American vessel, $90. The English engineer receives $80; 
 the American, $150, and so it goes through the list which I will sub- 
 mit. The crew, averaging 24 to each vessel, at $20 for the English- 
 man and $46 a month for the American, makes an aggregate per 
 month of $895 for the Englishman and $1,930 for the American ship, 
 a difference of $1,035 per month. 
 
 Now, call it $12,000 a year, which is pretty nearly 4 per cent upon 
 the cost of the American ship. That is the difference simply in the 
 pay roll. And 4 per cent is considered a fair return for a safe invest- 
 ment in the present condition of the money market in New York and 
 Philadelphia. 
 
 In addition to that, the victualing of the ship averages 37i cents per 
 man per day for the English ship, and 60 cents per man per day for 
 the American, or a difference against the American ship of 60 per cent; 
 and there goes an additional amount to that 4 per cent. If you import 
 your free ship and call her an American ship and by statute are enabled 
 to%aise the American flag over her, you will still be under the same 
 disability. 
 
 Monthly comparative statement; each steamer built, 1900. 
 
 American, 
 
 dead- 
 weight ca- 
 pacity 5,200 
 tons. 
 
 Captain 
 
 Mate 
 
 Second mate 
 
 Tiiird mate 
 
 Engineer 
 
 Second engineer . .> 
 
 Tliird engineer 
 
 Fourth engineer 
 
 Crew: 
 
 Average 24, at $20 per month. 
 
 Average 24, at $46 per month . 
 
 1,930 
 
 Increase, $1,03-5, 115.6 per cent. 
 
 Victualingper man per day: English, 37i cents; American, 60 cents; increase, 60 per cent. 
 
 Now people go a little further and say, " Why not change the whole 
 of this system? Why not change it so that the pay roll on the Ameri- 
 can ship will be exactly the same as that of the English ship? " Then 
 you run against the cardinal principle of the entire protective system 
 
302 HEAKINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 of the United States as it was originally started and as it has been 
 carried on— the wages of labor. We have kept the wages of labor up 
 to a higher grade than that of any other country which competes with 
 us, and the system of protection which has done that for everything 
 else in the United States has not been able to reach anything that is 
 across the 3-mile limit when you went outside the boundaries of the 
 country; and yet the protective system has been growing all over the 
 world. 
 
 Canada has had to adopt the protective system because she was our 
 neighbor to the north; the great nations of Europe are doing it, and 
 to-day all England is agitated on the subject of going back to the pro- 
 tective system she had a century ago. 
 
 APPLY PEOTECTION AFLOAT 
 
 Mr. Chairman, what strikes me is this: If the United States has 
 found that the protective system, as to which we all agree, and which 
 I do not think any influential interest in Philadelphia wants to throw 
 down, works well, as it has done for the development of everything 
 else in the country, whj^ not extend it to shipping? Then comes the 
 problem how to do it. There is but one way to do it. The question 
 of differential duties has been discussed, but that system hardly meets 
 the situation, on account of its vagueness and the variety of those 
 duties and the varied character of what has to be arranged to meet all 
 the different trades, all the different countries. Then there is the 
 further fact that if you are to develop a great freight movement, you 
 can not do it by an arrangement of differential duties, because such a 
 movement is in the lower priced raw materials, which are heavy and 
 bulky and make tonnage, and yet do not figure to any great extent in 
 import duties. • 
 
 If, so far as shipping is concerned, you consider the question as to 
 the shipbuilder equally with the shipowner after the ship is built, if 
 labor enters, as I have understood, to the extent of 65 per cent in the 
 construction of a modern steel steamship in an American shipyard, 
 and if this scale of varied pay and the expenses of supply enter into 
 the sailing of the steamship afterward, there is but one direct way to 
 meet the situation, and that is to make a remuneration to the American 
 citizen — the shipbuilder, the shipowner — who goes into the trade. 
 Otherwise we shall have to bow our heads and say we can neither 
 build ships nor sail ships in competition in the foreign trade. 
 
 And yet we have a country that sends out a larger amount of its 
 own produce as compared with every other nation in the world, and 
 a country which has the greatest coast line, and the country which 
 has at this time, under all flags, the greatest commerce upon the ocean. 
 If we bow our heads and say we can not do it, that it is a condition of 
 affairs we can not meet, then I say it will be the first time the American 
 race and the American people have met a problem they could not 
 solve. [Applause.] 
 
 I thank you, Mr. Chairman. 
 
 SHIPOWNING PROFITS ABROAD. 
 
 Senator Mallory. I should like to ask you a question on the line of 
 inquiry I propounded before. I do not think you exactly answered 
 
HEARINGS BEFOBE THE MEBCHANT MARINE COMMISSION. 303 
 
 the question, and I want the information. I will put it in different 
 shape. 
 
 In your judgment would it pay an American to-day to invest his 
 money in a foreign-built ship and put her in our foreign commerce, 
 under a foreign flag? 
 
 Mr. Cook. Speaking of the project as of to-day '. 
 
 Senator MALLORr. I am merely asking for information. In the ab- 
 stract, would it pay me to invest $300,000 in the building of a ship in 
 England, to be put under the British flag, and ru-n in the foreign com- 
 merce, with a Britisn master and crew ? 
 
 Mr. Cook. I should say, as things are on the 26th day of May, it 
 would not. 
 
 Senator Mallokt. In general ': 
 
 Mr. Cook. There is a peculiar condition at the present time in all 
 commerce all around the world. 
 
 Senator Mallory. Freights are very low ? 
 
 Mr. Cook. Freights are too low. 
 
 Senator Mallory. But taking an average season, when freights are 
 about at the average, in your judgment, would that pay an American? 
 
 Mr. Cook. I should think possibly it would pay an American the 
 same as it would pay an Englishman, if he can get suflSciently astute 
 management, I will call it, on the other side, to give him a fair competi- 
 tive cnance in the race he is going into. 
 
 Senator Mallory. Notwithstanding that he is barred out of our 
 coastwise commerce ? 
 
 Mr. Cook. Notwithstanding. If an American, who is 3,000 miles 
 ott', is willing to let his property be run in that way, well and good. 
 But as a general thing the American wants to sit on deck and watch 
 pretty closely. 
 
 COMPENSATION FOR ALL SHIPS. 
 
 The Chairman. You argue for the extension of the protective prin- 
 ciple to shipping. Are you prepared to suggest to the Commission 
 the method which, in your judgment, would be the wisest one to 
 adopt? We have had suggestions made as to a direct subsidy, as to 
 differential duties, and as to the extension of postal mail subventions. 
 
 Mr. Cook. The postal mail subvention, to which I did not refer, of 
 course is a matter which would be confined to the fast steamers, the 
 Mgher-class ships, and would not meet the necessities of freight car- 
 riers at a lower speed, which, in a great many cases, do not follow the 
 routes taken by passenger flyers, which would carry the mail. There 
 is no way that I can see which is so plain as a direct remuneration 
 based uppn the sailing of the ship — that is, the service the ship per- 
 forms — by some method of cbmpensation according to tonnage and 
 mileage that could be calculated, and, by extending that aid to the 
 building of ships, to cover the difference in the cost of labor. You 
 would have to calculate upon two different methods for the building 
 and for the sailing. You may call that remuneration or compensation 
 or subsidy or bounty or anything else you please, but it is the only 
 method, unless you throw down the whole protective system of the 
 United States; and I, for one, am not ready to do that even to save 
 the shipping of the United States. 
 
304 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 STATEMENT OF WILLIAM D. WINSOE. 
 
 The Chairman. Is Mr. Winsor, chairman of the committee on com- 
 merce of the Board of Trade, present? 
 
 Mr. Winsor appeared before the Commission. 
 
 The Chairman. Mr. "Winsor, state what business you are engaged 
 in at the present time. 
 
 Mr. Winsor. I have been all my life in the coastwise-steamship 
 trade, and also have had some interest, and have at the present time, in 
 foreign shipping and trade. 
 
 Mr. Chairman, and members of the Merchant Marine Commission, 
 in referring to the subject under consideration, there have been several 
 forms of assistance advocated to remedy the evils under which Ameri- 
 can shipping is now languishing, i. e. : 
 
 Bounty to shipowners building ships. 
 
 Compensation for carrying the mails. 
 
 Discriminating duties. 
 
 Free ships. 
 
 Subsidy. 
 
 BOUNTY TO shipowners BUILDING SHIPS. 
 
 This would take the shape, as I understand it, of a bounty per ton 
 paid to the merchant to offset the difference in cost between a ship 
 built in America and a foreign-built ship. There would be great dif- 
 ficulty in arriving at and maintaining the proper bounty per ton, inas- 
 much as the cost of building constantly varies with changing conditions 
 in this country as well as abroad, and what would be correct one year 
 might not be the next. 
 
 Further, the bounty per ton would vary with the different character 
 of vessel — a freight steamer not being in the same class with an ocean 
 liner. This bounty, however, would not in any way offset the addi- 
 tional cost of running expenses, wages, maintenance, etc., which is one 
 of the greatest burdens the American shipowner has to bear. 
 
 COMPENSATION FOR CARRYING THE MAILS. 
 
 The end sought to be attained by the extension of legislative aid, as 
 1 understand it, is the building in this country of freight ships to ply 
 to all parts of the world, which would give us not omy our share of 
 the carrying trade but employment to our people, to the capital invested 
 in our great shipyards, and work both in the yards and in the inter- 
 ests allied to shipbuilding. 
 
 In order to be economical, vessels of this class are necessarily of 
 moderate speed, while it is an essential requirement that the mails 
 should be carried upon fast vessels; in addition to which there are 
 many ports to which the mails could be forwarded more rapidly by 
 other means. In many cases the amount of such aid would necessarily 
 be inadequate to accomplish the purpose it is sought to attain — that is, 
 the running in competition with the cheaper vessels of other nations. 
 Compensation for carrying the mails, therefore, does not seem to cover 
 the ground, nor is it broad enough to build up American tonnage. 
 
HEAKIKGS BEFORE THE MEKCHANT MARINE COMMISSION. 305 
 
 DISCRlMINATIXOi DUTIES. 
 
 This is a very intricate subject. As I understand it, this is a prop- 
 osition to remit to the consignees a certain percentage of the duties 
 upon goods if imported in American bottoms, or to impose an addi- 
 tional duty if carried in foreign bottoms. This would certainly in one 
 case benefit the importer who would be fortunate enough to forward 
 by an American vessel, but it would help the shipowner only by tend- 
 ing to give American vessels the preference. I can not see that it 
 would aid in anj' way to confine our export trade to American \essels, 
 and this is a large and important part of the trade between the United 
 States and foreign countries. 
 
 It is also open to the objection that it is not general in application, 
 inasmuch as there are many ports from which the bulk of the goods 
 imported are free and upon which there would be no duty. In cer- 
 tain lines of ti'ade the goods bear a high rate of duty and it would be 
 an inducement to ship by American vessels, but on goods of a different 
 character and less value the same inducement would not exist. In 
 any case, the quantity of such goods would be uncertain on each voy- 
 age and the shipowner could not feel assured that the quantity would 
 be such as to make the business remunerative to him and warrant him 
 in building and running vessels under it. It is probable also that 
 discriminative duties would interfere with existing commercial treaties 
 with other nations; in any event it would be likeTj^ to cause retaliation 
 in some form upon their part. At best, it is a somewhat cumbersome 
 method and uncertain in its application. 
 
 FREE SHIPS. 
 
 This is nothing but free trade, pure and simple, and seems a most 
 inconsistent method of remedying the present condition of the Ameri- 
 can merchant marine, which has been caused by the high protective 
 tariff upon all other products. It is true that this would give us 
 cheaper ships (and so would the abolition of the duty give us cheaper 
 broadcloth and other goods), but they would not be American ships in 
 any sense but by the fact of registration, nor would it tend to increase 
 and foster our shipbuilding; even the repairs of foreign-built ships 
 would be difficult in this country, as every one conversant with ship- 
 building knows that a ship is best repaired in a home port, owing to 
 difference in construction, method, etc. AV'hy should the ship industry 
 be made the only exception to our present system of protection? 
 
 SUBSIDY. 
 
 This word unfortunately has an awful significance to the American 
 people mainly, I think, from a misconception of its application. To 
 the popular mind it is regarded as a direct bonus and profit to the 
 shipowner paid from the public Treasury. In point of fact, a subsidy 
 in the present case is only an equalization to the shipowner for the 
 yearly loss of interest, depreciation, and insurance on increased cost 
 of building in the United States, and the increased cost of running, 
 wages, maintenance, etc., thereby enabling him to derive only the same 
 profit from the business that is now enjoyed by foreign vessels, all 
 
 3a— 04 20 
 
306 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 these disabilities having been produced by the policy of protection 
 which has been applied to almost every other industry to its great 
 advantage, thereby enhancing the cost of building and running the 
 vessels to the American shipowner who has been left to struggle with 
 the problem as best he could. 
 
 In all cases, the plainest, simplest, and most straightforward method 
 is the best. The payment of a moderate subsidy per ton per mile 
 traveled is broad and equal in its application and of such a character 
 as to enable the shipowner or capitalist tu easily estimate whether with 
 such assistance he can profitably build and operate vessels not in one 
 line of trade only, but to all parts of the world. Divorced from "sub- 
 sidy" by the substitution of some other word, this method would lose 
 some of its terrors. 
 
 I therefore advocate the direct payment of a moderate compensation 
 per ton per mile to all classes of steamers and sailing vessels engaged 
 in foreign commerce as the best remedy for the existing evils. 
 
 STATEMENT OF ALBA B. JOHNSON. 
 
 Alba B. Johnson appeared before the Commission. 
 
 The Chairman. State to the Commission in what line of business 
 you are engaged. 
 
 Mr. Johnson. 1 am engaged in manufacturing a line of products 
 which are exported largely to other countries. 1 am a partner in the 
 Baldwin Locomotive Works, of Philadelphia. 
 
 1 do not come here as a shipbuilder interested in building up an 
 industry which, although vitally important, has been allowed to lan- 
 guish, nor do I come as a shipowner interested in operating ships, but 
 as a manufacturer interested in sending his products to every country 
 in the world. 
 
 ADVANTAGES OF AMERICAN SHIPS. 
 
 It might be said that it makes no difference to me or to other manu- 
 facturers whether our goods are shipped in American bottoms or in 
 foreign ships, provided the rate of freight paid is no higher than that 
 paid by our competitors. I am of the opinion, however, that as an 
 American interested in the extension of American commerce this 
 would be too narrow a view to take of the matter. Were our goods 
 to be carried in American ships, it would first of all cause the creation 
 of a great number of American houses in foreign ports interested and 
 ever present to promote American commerce. It would mean that 
 Americans would be stationed in foreign countries, ready to take 
 advantage of any commercial opportunity which might offer there, 
 just as the sons of England and of Germany are scattered all over the 
 world ready to extend the commerce of England and Germany. 
 Furthermore, it would mean that American capital would go forth 
 and occupy a field which at present is occupied almost entirely by 
 foreign capital. 
 
 The American people, I feel sure, are unanimously desirous of 
 removing the obstacles which at present exist to the extension of 
 American commerce. These obstacles are, first, the additional cost 
 of building American ships; and, in the second place, the additional 
 cost of opcratin^■ American ships. Both of these are real obstacles 
 whicii at the present time make it unprofitable either to build or to 
 operate American ships 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 307 
 
 OUR ONE UNPROTECTED INDUSTRY. * 
 
 The shipowner would like to have free ships. He would like to 
 have our navigation laws abrogated, so that he could operate those 
 free ships as cheaply as his foreign competitors do; but that would 
 expose our shipbuilders and our sailors to an unlimited and destructive 
 competition, which would place them upon a different plane from 
 Americans engaged in other lines of industry. 
 
 In other words, we have extended our protective system to every 
 line of American industry except the sailing and operating of ships. 
 We have more than protected the shipbuilding industry, because our 
 laws actually amount to a prohibition of the importation of a foreign 
 ship. That is a degree of protection greater than that enjoyed by any 
 other American manuf acturei'. 
 
 We want our new marine to be built in American shipyards, and 
 we want our American ships to be operated by American sailors. 
 Therefore we do not desire to withdraw from either of those branches 
 of industry the protection which they at present enjoy. But we do 
 want to extend the protection to the ship-operating as well as the 
 shipbuilding industry. 
 
 THREE FEASIBLE METHODS. 
 
 There are three methods which I should advocate, all tending to the 
 restoration of our shipping. The first would be the payment of an 
 abundant compensation for carrying the mails, graded according to 
 the speed of the ship. The second would be a moderate tonnage or 
 subsidy, payable upon the outward voyage only. The third would be 
 a moderate reduction of the duties on goods imported in American 
 bottoms. It occurs to me that possibly a reduction in duties of 10 per 
 cent on goods imported in American sailing ships, or of 15 per cent 
 on goods imported in American steamships, would create such a 
 demand for American tonnage as to accomplish the end we all have in 
 view. It would cause every American importer to specify to his 
 foreign correspondent that if at all possible his shipments must be 
 made home in American ships. 
 
 Now, we want to accomplish two things. The first and most impor- 
 tant is that we want to create a fleet of tramp steamers which will 
 carry the American flag into every port in the world, instead of its 
 being, as it is at present, a curiosit}'; and I may say that if that is 
 accomplished, I believe the establishment of line steamers will follow 
 as a natural sequence. But eventually we desire also to have our 
 mails carried in fast steamers, which will be available for the Govern- 
 ment in case of war. 
 
 CAUTIOUS TARIFF REDUCTION ALSO. 
 
 1 believe that the plan I have suggested would accomplish both of 
 those ends. It is perhaps an unusual position for a manufacturer to 
 suggest a reduction in any form of our tariff protection. I believe, 
 however, that the time has come when some concessions must be made 
 for the promotion of reciprocal exchanges with other countries. We 
 have built around us a tariff wall which in my estimation is as to some 
 industries higher than we actually need for protection, 
 
308 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Like wise business men, having a property here which is a little 
 larger th^n we need, let us sell off the surplus at the highest price for 
 our own welfare. Let us take the bricks off the top of the wall and 
 sell them so that the benefit may come to American shipping and let 
 it participate in a benefit it has never had before. 
 
 Our people have been very reluctant to approve of subsidy legisla- 
 tion, because they have felt that it was likely to accrue to the benefit 
 of particular interests. For that reason there has hitherto been a 
 general acquiescence in, if not a tacit approval of, the postponement 
 of legislation which has looked entirely to subsidies as the sole means 
 of reviving our shipping. I believe the adoption of the three meth- 
 ods I have named would make it practicable to make the rates of sub- 
 sidy' so moderate that, in connection with the other measures of 
 encouragement, they would be approved bj' our people at large. 
 
 Mr. Chairman, in the general outline which I have suggested I 
 stand upon the same ground that our apostle of protection, the late 
 President McKinley, adopted in his speech at Buffalo, and I believe 
 that the advantages of the more liberal policy which ho proposed can 
 be extended not only to reciprocity treaties, but to the advantage of 
 American shipping as well. 
 
 Statement of george e. bartol. 
 
 George E. Bartol appeared before the Commission. 
 
 The Chairman. Mr. Bartol, what line of business do you pursue? 
 
 Mr. Bartol. At present I am in the West Indian fruit trade. 
 
 The Chairman. Are you an owner of ships '^ 
 
 Mr. Bartol. Not an owner, but I operate four ships. 
 
 The Chairman. Proceed with anything you have to say. 
 
 Mr. Bartol. Mr. Chairman and gentlemen of the Commission, it is 
 with a feeling of timidity that 1 venture to address you as to the 
 remedies necessary for the revival of the American shipowning interest. 
 The subject is so great a one and my opportunities for studying it have 
 been so limited that I feel that any suggestions I may make will be of 
 little value. Yet, if I correctly understand the purpose of the appoint- 
 ment of this Commission and the purpose of these meetings in various 
 cities in different parts of the country, it is that opportunit}^ may be 
 afforded to "man}^ men of many kinds, and many men of many minds" 
 to express to your honorable body their individual views as to the 
 remedy or remedies needed, so that you, after hearing all of these 
 diverse views, may cull the wheat from the chaff' and submit to the 
 Congress of the United States recommendations as to what remedies 
 in your judgment are requisite to be applied to cure what all admit to 
 lie a deplorable condition, viz, the dependence of this great country 
 upon foreign nations for the carriage of its vast export and import 
 commerce, or, expressed in another form, the restoration of the 
 American shipping interest, so that American trade may cross the 
 seas in American sliips, protected by the American flag. 
 
 My first experience with the American ship commenced at an early 
 age, my tastes leading me to read the stories relating to the exploits 
 of our ships in the wars of 1776 and 1812; also the many fascinating 
 talcs published for boys concerning whaling and other hazardous ven- 
 tures upon the seas. Such early reading naturally culminated in a sea 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 309 
 
 voyage, and at 16 j'cai's of age I shipped as "boy" on an American 
 barkentine of 325 tons burthen, hailing from Bath, Me., and bound 
 on a voyage to a port on the Black Sea, southern Russia, with a cargo 
 of Baldwin locomotives, returning at the end of nine months to Phila- 
 delphia, after touchiqg at several ports in the Mediterranean. That 
 was in 1874, and I have been more or less intimately connected with 
 the shipping trade ever since. 
 
 First. In the sugar business, employing a number of American ves- 
 sels every year in the trade lietween ports in the West Indies and this 
 city. 
 
 Second. In the general importing and exporting business with Europe 
 and the United Kingdom, employing for general business the various 
 lines of foreign-owned ships plying on the North Atlantic, and for the 
 grain trade English tramp steamships. 
 
 Third. The West India fruit trade, in which I am at present actively 
 engaged and employing four foreign ships under time charter, three 
 of them being Norwegian vessels and one English. 
 
 I have never been a shipowner and can not, therefore, speak with 
 any knowledge of the diflSculties experienced b}' them in competing 
 with foreign-owned ships, but my natural tastes and affiliations have 
 been such that by a process of what may be termed mental absorption 
 and sympathy I have formed certain ideas on the subject under con- 
 sideration, which I shall now endeavor to present to you in a condensed 
 form. 
 
 WHY OUR SHIPS HAVE VA>iISHED. 
 
 1. The disease. — The practical disappearance of the American flag 
 and the American-owned ship from the foreign trade. This, of course, 
 applies especially to the steamship which, as a matter of fact, never 
 really existed in the past at all under the American flag, the decadence 
 of the shipping interests dating from about the period when the ocean 
 steamship commenced to be a factor in the trade. But the remedy 
 must deal with methods of encouraging the growth of the steamship 
 interests for general commerce. 
 
 ^. Tlie causes of the disease. — These are numerous and complicated, 
 but, as I see them, they rank as follows, the most important flrst: 
 
 {a) American capital has not, until very recently, ])een sufficiently 
 abundant to make it necessary for its owners to take low rates of 
 return for its use. The capital requirements of our countiy for its 
 own internal development have been ver}^ large, and such use of 
 capital for internal development has brought to its owners vastly 
 larger returns than were to be found in the ocean-carrying trade, 
 where the competition was keen and the average rate of return on 
 capital invested was low when the risks were considered. This cause 
 of the disease, I believe, is entitled to first place in considering the 
 subject, but it -is a cause which is remedying itself. Capital here is 
 becoming daily more abundant, the average rate of return for its use 
 is falling, and Americans are showing a willingness to invest money 
 abroad, which a few years ago they did not exhibit. 
 
 (h) The greater cost of operating American ships, which is admit- 
 tedly from 50 to 100 per cent above the cost of operating foreign ships. 
 This cause can only be remedied by legislation which will aflord com- 
 plete relief from the burden. 
 
BIO HEARINGS BEFORE THE MERCHANT MARINE COMMISStOK'. 
 
 (c) The greater cost of constructing ships in American yards, owing 
 to the higher wages of American mechanics. This is a variable quan- 
 tity, differing in different years, and also with the class of ship, but 
 may, I think, be safely averaged at from 25 to 50 per cent. Probably 
 for the ordinary cheap cargo boat the difference would average nearly 
 io to 50 per cent. Some figures recently obtained by me on the sub- 
 ject indicated that a small steamship suitable for the fruit trade, which 
 would cost about $80,000 to build abroad, would cost on this side about 
 1110,000 to $120,000. 
 
 HOW THET MAT BE RESTORED. 
 
 The three causes above named cover, in my opinion, the main causes 
 of the disease and brings me to the remedies, and 1 have no doubt your 
 honorable body will be so overwhelmed with the number and variety 
 of remedies which will be suggested to you in the course of your inves- 
 tigations that you will be embarrassed with riches. 
 
 The cause to which I have assigned first place, viz, the disinclination 
 of American capital to invest in ships because of the higher rates of 
 return to be secured from investments on the land, is, I believe, rapidly 
 being cured by natural causes, and will entirely disappear if the Amer- 
 ican ship can be operated as cheaply and cost the owner no more than 
 the ships he is competing with. Whatever cures the next two causes 
 of trouble will immediateh' cure the first also. 
 
 The second cause, viz, the greater cost of operating the American 
 ship under the conditions and laws existing to-day. I believe the only 
 remed\^ is to permit the American ship to secure her crew when, 
 where, and on such terms as she pleases without restriction. I am not 
 considering at all any question of creating a body of American seamen 
 to fill the ranks of our Navj'^, but simply the question of a fleet of 
 American-owned trading ships to compete in the ports of the world 
 for the carrying business of the nations. These cargo vessels will get 
 no favors in the matter of freight rates or port charges. They must 
 compete with the ships of the world, and to do so, must be able to 
 operate as cheaply. The fleet can not be created, capital will not 
 invest, unless on at least an equal footing with competitors. This 
 proposes no hardship to the American sailor in this trade, as he does 
 not exist; the fleet does not exist, it is to be created; it is a new indus- 
 try and it can not well be protected. When the ship passes into blue 
 water she must meet all the world on equal terms. 
 
 FOREIGNERS AS OFFICERS AND CREW. 
 
 Senator Mali^ory. Am I to understand that you advocate a policy 
 by which American vessels shall be permitted to employ foreigners as 
 officers'^ Do you favor that? 
 
 Mr. Bartol. I advocate allowing an American ship to get her crew 
 where she can get them on terms to compete with the foreign vessel. 
 
 Senator Mallory. She is now permitted to get her crew where she 
 likes. I refer to the officers. Are you in favor of changing the law 
 on that subject? 
 
 Mr. Bartoi.. I am in favor of letting the ship get her officers and 
 crew where she can get them on terms so that she can compete with 
 the ships with which she has to compete. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 311 
 
 The ciuestion of a bodj' of American sailors as a reserve for our ^ia^'y 
 is a question foreign to the subject under consideration, but if neces- 
 sary to be considered, let them be drawn from our coasting vessels or 
 lake carriers, which can be and are protected, and might be compelled 
 to carry American crews. Patriotism is not confined to sailors, and 
 landsmen from our interior districts make good naval seamen with a 
 very few months of training on a cruising training ship. The old- 
 time able-bodied seaman, who could hand, roef , and steer, finds little 
 room for his knowledge on a modern man-of-war with scarcely a rope, 
 spar, or sail on board. A good blacksmith who did not get seasick 
 would be quite as patriotic and more useful in a few weeks. 
 
 The report of the Commissioner of Navigation shows pretty plainly 
 that the only effect of our restrictive laws relative to the engagement 
 of crews is to raise the rates of pay on American ships without giving 
 them American crews. The percentage of foreigners on American 
 ships has ranged, during the years from 1903 back to 1894, from 51 to 
 71 per cent. 
 
 When I was at sea there were on the ship three Americans — the 
 captain, the first mate, and myself — two Portuguese, two Norwegians, 
 a Swede, two Englishmen, and that proportion seems to remain just 
 about the same — about 30 per cent Americans and the rest foreigners, 
 or some of them so-called naturalized Americans. 
 
 The principal efi'ect of the higher pay on American ships is to make 
 the operating of the ships unprofitable and to encourage desertions 
 from foreign ships when in American ports. That is shown by the 
 reports of the commissioner at San Francisco. Every foreign ship 
 loses her crew almost as soon as she gets there. 
 
 The 'superioritj' of the American crews as at present constituted, 
 which would be the only warrant for the higher pay they receive, is 
 not proven by the tables given in the report of the Commissioner of 
 Navigation, which set forth the number and causes of casualties to 
 American ships and foreign ships. 
 
 COMPENSATING HIGHER COST OF CONSTRUCTION. 
 
 The third cause I have named, viz, the greater cost of constructing 
 ships in American shipyards, is a serious but remediable difficulty. 
 Some sort of refund must be made to the shipowner as an equalization 
 charge to offset the higher first cost. With this fairly adjusted — and 
 to adjust it fairly is a matter of mathematics — the shipowner will 
 be content to pay the higher first cost, and the shipbuilder and his 
 employees will disappear from the consideration of the question, as 
 they will be satisfied and will get the business. 
 
 In considering the matter of such an equalization charge as will 
 reimburse for this original higher cost, it must be borne in mind: 
 
 (a) That the capital sum representing this higher cost must be first 
 paid out, and that the interest on the said sum will go on nights, days, 
 and Sundays; also, that a ship must be insured, this extra cost must 
 be insured, and that extra insurance cost goes on all the time. Further, 
 a ship wears out and a proportion of the extra cost must be charged 
 off annuallj^ All of the above charges go on whether the ship be 
 busy or idle, carrying cargo or sailing in ballast, and no tonnage pay- 
 ment based on tons of freight carried will fully meet the requirements. 
 It will be too much under some conditions and totally inadequate in 
 
812 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 other cases. The more cargo a ship has on board, the less she needs 
 governmental help; inversely, the less cargo, the more help is needed, 
 as the owners are not receiving so much freight money. 
 
 She should be helped to go from port to port in ballast, as unless 
 she can do- this on equal terms with competitors, she is handicapped 
 in competing for business. The expenses I have named go on all the 
 time and must be offset all the time. To pay a refund based on the 
 tons of freight actually carried will miss the mark and simply cause 
 the shipowner to become a rate cutter. It will be a case of any rate 
 of freight to get the tonnage. The ship must not be treated as a 
 pauper; it is not a case of charity; it is simply a case of refunding in 
 a legitimate, dignified way the extra cost due to our American system 
 and higher wages. 
 
 {b) If the laws should not be so changed as to permit of the crews of 
 such ships being employed on a competitive basis, then, of course, it 
 will also be necessarj' to compensate for the extra cost of operating 
 involved in running ships under the existing laws, and such compen- 
 sation should and must cover the operation of the ship under all cir- 
 cumstances when these extra expenses are running, ship sailing full 
 loaded, light, or in ballast, for the extra expenses of the crew are just 
 the same under all of the above-named conditions. For this class of 
 compensation all time spent in port above a proper number of days 
 could be deducted, so as to encourage ships to be at sea and not idling 
 in port. 
 
 I have endeavored to set forth the causes and remedies as they 
 appear to me and trust that they may prove worthy of your consid- 
 eration. 
 
 I have not gone into any statistics to prove the case, or suggested 
 any details as to the remedy. The statistics I know are at your serv- 
 ice in any volume you may desire, and the details of the remedies 
 suggested will involve a vast amount of labor; but if, as I understand 
 matter, the trouble is admitted, and the prime causes of the trouble 
 are known and admitted, then, if remedies along the lines I have advo- 
 cated are accepted as a principle, there are no real difficulties in the 
 way of their proper application, and the question resolves itself into 
 a matter of figures. 
 
 The term "subsidy," which 1 have heard used so much, is to my 
 mind and to the minds, I think, of almost all the American people, an 
 offensive one. It gi\cs an idea of something given for nothing, an 
 unearned profit given to a shipowner at the expense of the rest of the 
 country. It is a wrong idea. It is a wrong phrase. The only proper 
 thought to consider in this connection is a question, not of subsidy, 
 but of compensation for added cost due to American conditions. 
 
 The American citizens can and must be made to understand that the 
 American tariff', which protects American labor and American products 
 within the boundaries of American territory, can not protect the 
 American-built ship when she passes out onto the blue water beyond 
 the confines of the tariff' barriers. 
 
 STATEMENT OF JOHN S. W. HOLTON. 
 
 John S. W. Holton appeared before the Commission. 
 The Chairman. Are you a vessel owner '^ 
 Mr. IToiiTON. Yes, sir; 1 am. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. ''W 
 
 The Chairman. Your business is that of shipping to some extents 
 
 Mr. HoLTON. Yes, sir. 
 
 The Chairman. The Commission will be glad to hear from you. 
 
 Mr. HoLTON. Mr. Chairman, by reason of the peculiar character of 
 the institution of which 1 have the honor to be president, the Phila- 
 delphia Maritime Exchange, representing many different interests, 
 representing,^as you can readily understand by its title, all of the 
 foreign intere'sts centered here in the port, I have considered it fairest 
 and best to invite six of our members to address your honorable Com- 
 mission. I did that in order that anything I might say should not be 
 construed to indicate the sentiments of the exchange perhaps unfairly 
 or unjustly. The names of these gentlemen appear on the list before 
 you, and 1 am sure it will be their pleasure to address you before your 
 sessions close. 
 
 Before taking mj' seat I should like to refer for an instant to a por- 
 tion of the speech of one of the honorable gentlemen who addressed 
 you during your sessions in New York, in which he referred to agri- 
 culture as being the sheet anchor of the nation, and left ground for the 
 inference that we should be satisfied with that condition. I suppose 
 agriculture was referred to as the sheet anchor for the reason that it is 
 the only industry whose pi'oducts can find their way into the markets 
 of the world during all conditions of trade. I think the answer to that 
 is that agricultural products, being perishable, must find markets, no 
 difference what the loss may be. Secondly, there is no class of labor 
 so poorly paid as that of the agriculturist. There are no laborers whose 
 hours of work are so long. 
 
 The farm hand works from sunrise to sunset, and he is the poorest 
 paid laborer there is on the American continent. That coupled with 
 the fact that the products of the farm must be sold, no matter what 
 the loss may he, shows a condition which we could hardly accept as 
 being a stable one for all our industrial structure. 
 
 If we were to -take up each industry, take, for instance, ship build- 
 ing, and reduce it to the level of farming, and if we should proceed 
 likewise with the other classes of manufactures, we would before long 
 have a condition in America such as exists in the poorest of European 
 countries. 
 
 The question before ^-our honorable Commission is a very grave 
 one. To my mind it is perhaps the most important that has engaged 
 the attention of Congress for a long time. It is one which requires 
 the best and most experienced thougnt, not only of Congress but of the 
 whole people. It is one that requires expert treatment, and while your 
 Commission is finding a remedy, and applying it, fdr the ship itself, it 
 is to be earnestly hoped that you will apply remedial legislation also to 
 the existing navigation laws, in order that those abuses may be reduced 
 to a minimum, for they are generall^^ regarded as constituting one of 
 the greatest menaces to American shipping to-day. 
 
 1 appreciate your courtes}'. 
 
 PROTECTING THE SAILORS. 
 
 The Chairman. You speak of abuses consequent upon the navigation 
 laws. To what do you refer? 
 
 Mr. HoLTON. Particularly to the principle bj^ which the labor of the 
 seamen is controlled by the boarding-house keeper, as a result of which 
 
314 HEAEINQS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 only the lowest class of seaman labor is dealt out to the employer- 
 the sailor who is without funds and who is the least desirable for tli<3 
 boarding-house keeper to keep in his own possession. 
 
 Senator Penrose. What remedy would you suggest for that 
 condition ? 
 
 Mr. HoLTON. Senator Penrose, 1 could not suggest one offhand. I 
 only know that it exists in a very harmful degree. Some legislation 
 amendatory of the present law, regulating the influence.of , or the part 
 the boarding-house keeper plays in the dispensing of marine labor 
 would perhaps ac^complish the result. 
 
 Senator Lodge. There was a suggestion made in New York on that 
 point which struck me as a very important one. It was suggested that 
 it would help the situation very much if the United States shipping 
 commissioners were authorized to receive deposits of seamen's wages 
 when they landed and make remittances for them to their families, 
 when they had families, making it something like a postal savings 
 bank. It was further suggested that the shipping commissioner should 
 have power to furnish seamen. Do you thmk that would in any way 
 meet the evils of which you have spoken? 
 
 Mr. HoLTON. I should think it would, because then there would be 
 somebody responsible not only to the employed, but to the Govern- 
 ment, for the faithful performance of the duty which he undertakes 
 to perform. 
 
 Senator Penrose. It would of course to a certain extent save the 
 seamen from crimps and boarding-house keepers. 
 
 Mr. HoLTON. There is no mistake about that. 
 
 STATEMENT OF FRANK J. FIRTH. 
 
 Frank J. Firth appeared before the Commission. 
 
 The Chairman. Mr. Firth, will you kindly state to the Commission 
 .the business in which you are engaged? 
 
 Mr. FiRTH. My business is connected with the ownership and man- 
 agement of lake vessels in the coastwise trade. 1 am very glad to 
 make that statement, because vessels in the coastwise trade on the 
 lakes have no possibility of benefiting directly from any remedial 
 legislation that j^ou may enact. They ask no assistance. 
 
 1 will refer to the further fact that the vessels on the Great Lakes, 
 absolutely protected as they are by law, have not developed monop- 
 olies or high rates. On the contrary, they are the best vessels any- 
 where afloat under the American flag, affording the cheapest rates of 
 freight known in the world. So, in my judgment, it should be possi- 
 ble to legislate intelligently and effectively upon the reestablishment 
 of the American merchant marine in the foreign service. Of course 
 it can not be done in the same way that it has been done on the Great 
 Lakes. You can not exclude other vessels from the oceans or from the 
 markets of the world, but there must be some method. If you accept 
 the situation that something must be done, it would be un-American 
 not to find a way to do it. 
 
 AID MUST BE LIBERAL. 
 
 A most important factor, if you extend any aid at all to the mer- 
 chant shipping on the oceans, is, that you shall be very careful not to 
 make any mistake about the amount of that aid. You can not drive 
 
HEARINGS BEFORP: THE MERCHANT MARINE COMMISSION. 315 
 
 a niggardly bargain with people whom yon are trying to induce to 
 enter into this business. If you give too little what yon do will be 
 a failure. If you give too much there i.s an absolute certainty that 
 you will have competition which will give back to the people in 
 reduced rates of freight what j'ou have paid in excess. It would ruin 
 the whole thing if you were to allow the enemies of the plan to inducfe 
 you to give less than ought to be given. 
 
 As a citizen I would not be personally interested in this matter if it 
 were merely a commercial question, important as it is, but I have come 
 to regard this as a very great national question in its relation to our 
 possible needs in time of war. Not only will we need and must have 
 transports, colliers, etc., to assist and cooperate with the Navy, but 
 we must have absolutely up-to-date shipyards and thoroughly trained 
 men in those establishments, and we must have competent men to man 
 the vessels. 1 want to take it up on that ground, not wholly on the 
 commercial ground, and to suggest that your naval requirements will 
 oblige you or your successors in office to give this aid. 
 
 We of the Great Lakes are not directly interested in what you do, 
 but indirectly we are vastly interested. You can not do anything for 
 the benefit of the whole country without our getting our share of it. 
 
 AS TO DIFFERENTIAL DUTIES. 
 
 Various methods have been suggested as to the kind of assistance 
 you shall give. First, consider aid by differential duties. It is a very 
 taking idea. You have the successful experience of a century ago, 
 although it has no bearing on to-day's conditions. You are told that 
 the plan succeeded then; why not now? I will state a few of the 
 many objections to the differential-duty method: It does not take into 
 account at all the length of the voyage. For example, if you were 
 to ship a cargo of sugar from Cuba to New York, the ship would get 
 the same amount as if it brought exactly the same cargo from the 
 Philippines to New York. 
 
 The next thing you strike as a defect in the differential-duty plan is 
 the vastly different dutiable value per ton of the cargo. Therefore 
 you at once offer an inducement to every American ship to seek exclu- 
 sively the most valuable cargoes, which would pay the largest differ- 
 ential duties. That is exactly what you do not want done. Ships 
 carrying non-dutiable property would receive no compensation. The 
 differential duty, however, is an attractive proposition. It has the 
 precedent of a successful use in a past century. It has another fea- 
 ture that always attracts. It seems like an indirect method of doing 
 what you want to do. It is always attractive to the average citizen 
 to think that money paid out does not come out of his own pocket. I 
 do not think it is wise to ignore that method of looking at these ques- 
 tions. There is something in the proposition that people will feel the 
 money is coming out of somebody else, and not coming out of the 
 Treasury in a direct way. 
 
 So, I suggest that you consider, in deference to the differential-duty 
 party, if there is one, a proposition to credit to a fund in the Treasury 
 10 per cent of the duty on property carried in American bottoms as a 
 fund for the benefit of the American merchant marine, but do not dis- 
 tribute that fund on any such foolish basis as to give each vessel the 
 duty rebate on property carried by it. Get your fund in that way, 
 if you so decide, but distribute it in a sensible manner. 
 
31(i HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 BONDS AND SUBSIDY. 
 
 Another proposition has been made to pay a cargo-tonnage bonus. 
 I wish to say that from newspaper reading on the subject I have never 
 seen this method advocated by anyone friendly to what you are trying 
 to do. It never has been advocated by anyone who was an unselfish 
 believer in the general rehabilitation of the American merchant marine, 
 and so I think it is not worth jrour consideration. 
 
 As to subsidies; subsidies appear to I'epresent, as they ai'e commonly 
 understood, a direct payment to vessels on a tonnage-mileage basis or 
 on the postal basis. This is rather attractive, but it is a wholesale 
 proposition ^vhich 1 think is wrong; that is to say, I do not think we 
 can work out any plan of subsidy, spreading it over the commerce of 
 the Atlantic and the Pacific, which can by any possibility be just to 
 each vessel interested. You will find that on certain lines greater 
 assistance is needed than on others. This will be true on lines where 
 competition is sharp, and where other counti'ies are subsidizing their 
 ships. To work out a common basis on which our ships all over the 
 world can move and receive the aid they need from this Government, 
 I consider impracticable and very wasteful. 
 
 NOT ALL AT ONCK. 
 
 The question is dealt with generally in this wholesale way. We say 
 there is a decadence of American shipping. The American flag is seen 
 nowhere in the world. We want at once to change that condition. 
 We want at once, like true Americans, about 90 per cent of the whole 
 commerce of the oceans. The merchant shipping can not be created 
 in a wholesale way and it can not be created, in my judgment, on all 
 lines of travel at once. I have looked at this question as an individual 
 engaged for many years in the shipping and vessel operating bus- 
 iness. If I had before me the problem that you have I would not 
 say, "Our shipping must be restored all over the oceans at once," but 
 " Where are you sujffering worst for American shipping?" 
 
 Take this illustration: Suppose it is said that a service is most 
 needed between New York and South America. Any United States 
 citizen desiring to export the products of our countr}"^ to South Amer- 
 ica has to go to Liverpool to do it, and that certainly is not right. 
 So that is one of the particular routes of travel as to which 1 would 
 say there is no doubt about the necessity of our doing something, if 
 we are going to do anything anywhere. If you should reach the con- 
 clusion that something has to be done on that particular route, you 
 naturally would say, in clear language, just what you want. 
 
 TO THE LOWEST BIDDER. 
 
 If you want four ships of 3,000 tons' carrying capacity each the first 
 year, and a couple of ships each ensuing year until the demand i.s 
 supplied, you would ask for tenders for that particular service for a 
 term of years, and would have its details determined not by members 
 of Congress, who maj^ not be particularly familiar with shipping, 
 but by people who are willing to stake their money and their time in 
 the Ijusincss. Let them tell j^ou what the service on that particular 
 line is worth; what they need to enable them to maintain from New 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 317 
 
 York to Brazil, a specific service for say ten years. Then award the 
 contract to the lowest bidder, and protect that lowest bidder during 
 the term of his contract by not paying anybody else who may wish to 
 establish a rival line. If during the ten years we learn enough about 
 the ocean business so that American ships of less operating expenses 
 can, without Government aid, enter into competition with the first 
 man, let them do it. The first man is not entitled to anjr more protec- 
 tion than this. Give him the market under his contract just as long 
 as he can hold it against other Americans without any aid to anyone 
 but himself. 
 
 There are man^ lines of ocean travel in different parts of the world 
 where in my judgment we should have a merchant service, and, assisted 
 by the merchants of the country and the shipping interests of the coun- 
 try, I would find where those lines are. You can not undertake to act 
 as experts, and determine what it ought to cost to perform each part 
 of the work, the employment of the men, the cost of supplies, etc. 
 That is not your work. But you must decide, on the statements 
 made to you, as to whether the service is needed, and if it is, then 
 you ought to provide it just as you would acting as private individuals, 
 by giving aid to the man who can render it to the country cheapest. 
 
 NOT A PARTY QUESTION. 
 
 You have on your Commission what 1 understand is called minority 
 representation. You have a certain number of Kepublicans and a cer- 
 tain number of Democrats. 1 hope that means Congress is not going 
 to take up this matter as a political or party question, and that you 
 will have no minority report from the Commission to Congress, but 
 that you will labor until you can unanimously agree on a practical 
 plan to meet the situation. "Whatever differences we have within our 
 own borders, we do not want to have enter into this matter any ques- 
 tion of Republicans or Democrats or any of the isms or antis we hear 
 of every day, but we Want to stand together as Americans and work 
 out this problem on that basis. 
 
 The Chairman. In response to IVIr. Firth's Suggestion, the Chair 
 will take the liberty of saying that it is the purpose of this Commis- 
 sion to reach that precise conclusion if it is a possible thing to do. 
 As 3'et we have not encountered or heard a suggestion of a political or 
 partisan nature in connection with our inquiry, and Ave hope we will 
 not up to the time it closes. [Applause.] 
 
 Mr. Firth. I wish to submit an extract from the London Engineer 
 of May 6, 1904: 
 
 ' ■ During the four months of the year now completed shipbuilding 
 activity on the Clyde has been well maintained, and altogether about 
 100 vessels, aggregating 136,000 tons, have been sent off the stocks, 
 the average size being thus 1,360 tons. Not a few of the vessels, how- 
 ever, were of very large tonnage, of the ' intermediate ' class, for well- 
 known ocean lines, and heavy dead-weight carriers, several of them 
 for the dead-meat trade. The four months' aggregate forms a good 
 average figure for the corresponding period during the last decade. 
 Notable vessels launched during the latter part of the period were the 
 turbine-propelled steamer Princess Maud, built by William Denny & 
 Bros., Dumbarton, for the Stranraer & Larne cross-channel service, 
 and the turbine steamer Londonderry, built by the same firm for the 
 
318 HEARINGS BEFOKE THE MERCHANT MARINE COMMISSION. 
 
 new Iris.Ii Channel service of the Midland Kailway Company between 
 Heysham and Belfast. For this same service John Brown & Co., 
 Clydebank, completed the Antrim, a sister vessel to the Londoriderry, 
 but propelled by the ordinary reciprocating engines, while a third 
 and similar vessel, the Donegal was launched by Caird & Co. , Green- 
 ock. Speaking of the results attending the speed trial of the turbine 
 steamer Princess Maud, Mr. James Denny, of the Dumbarton firm, 
 said that according to the terms of their contract for that vessel they 
 had to obtain 20 knots over a double run between the Cloch and Cum- 
 brae lights, and this with a restricted air pressure and the use o£ 
 Scotch coal. Instead of 20 knots, they got 20.7. 
 
 "Even this, he considered, did not quite represent what was in the 
 vessel, because on the second part of the run those in cRarge of the 
 engines found themselves embarrassed from the unusual cause of hav- 
 ing too much steam. Giving the engines the benefit, they were driven 
 faster, with the result that on the second half of the trial, and allow- 
 ing for the considerations of tide, wind, and sea, the speed of the 
 Princtss Maud came to nearly 21 knots. Had it been necessar}^, they 
 would not have had any difficulty, under the trial conditions, of real- 
 izing that as the mean speed; because the air pressure they were 
 allowed to work with had never been even approximately approached. 
 Mr. Denny said that the firm anticipate a correspondingly satisfactory 
 result from the trial of the Midland Company's Londonderry, which is 
 now receiving her outfit of turbine machinery, these being, in this 
 and the other vessels referred to, of the Parsons type, made by the 
 inventors' firm at Wallsend. With respect to the new work on hand 
 by Clyde shipbuilders, reports now confidently include one of the two 
 great Cunard liners, which are to be turbine-propelled, the firm abso- 
 lutely and finally credited with her construction being John Brown & 
 Co., Clydebank. At the present time they have two large Cunard 
 steamers of the intermediate order on hand — one of which is to be 
 propelled by turbine engines — and they have dispatched to the St. 
 Louis Exhibition a splendid model of the 25-knot Cunarder, according 
 to the design they have prepared for this notable steamship. The 
 amount of work now on hand and to begin, including the fast Cunarder, 
 is 190,000 tons, this being some 55,000 tons greater than the total out- 
 put for the past four months." 
 
 Compare this record of one shipbuilding district in Great Britain 
 (not the only or most important one) with the entire United States. 
 
 Mr. Chairman, I also now submit a typewritten statement, although 
 I do not know that it covers everything I have said to-day. 
 
 The statement referred to is as follows: 
 
 To the Merchant Marine Commission. 
 
 Gentlemen: 1 have been invited to submit to you a statement 
 euibodying my views as to the kind of national legislative assistance 
 that is needed to reinstate the mercantile marine of this country in the 
 position which it once held. The invitation says that your honorable 
 Commission is fully aware of the difficulties under which American 
 vessels labor and that you do not need any information upon the com- 
 parative cost of building or operating American and foreign vessels, 
 but that you only desire suggestions as to the method of remedying 
 disabilities known to exist. 
 
HJiAJilNGS BEi'OBE THK MERCHANT MARINE COMMISSION. 319 
 
 GREAT LAKES. 
 
 My business life has been devoted to the management of vessels 
 operating upon the Great Lakes. These vessels are fulh' protected 
 by existing coastwise laws and do not expect to benefit directly from 
 any remedial legislation that may be enacted. They do expect to bene- 
 fit indirectly, because effective remedial legislation of the class you are 
 considering must benefit the entire country. 
 
 JiKRCHANT MARINE UNPKOFITABLE. 
 
 The recognized situation as to our merchant marine upon the oceans 
 is that because it can not be operated with a profit sutBcient to attract 
 capita] it is rapidly passing out of existence. It can only live and grow 
 in importance by its yielding a reasonable profit" to those venturing 
 their capital and time in the creation and management of merchant 
 vessels. As this profit can not be obtained without a radical change in 
 existing conditions, the practical question is, How may such change be 
 effected so that a sufficient sum will be added to the gross revenues 
 such vessels are now able to secure to return a satisfactory profit to 
 their owners? 
 
 GOVERNMENT AID. 
 
 This necessary additional revenue can only be had through some 
 form of aid extended by the United States Government. The nec- 
 essary aid should be extended if the result sought to be obtained is of 
 such great public interest as to justify this exceptional action on the 
 part of the Government. It may not be amiss to here call attention 
 to some of the reasons that appear to demand that the United States 
 Government shall recognize this proposition to restore our merchant 
 marine on the oceans, as one of great public importance. 
 
 NAVAL ESTABLISHMENT. 
 
 The necessity for the creation and maintenance of such a naval estab- 
 lishment as will guarantee peace is genei'ally recognized. Large appro- 
 priations are, and must continue to be, made to build, maintain, and 
 operate vessels of war. These war vessels can be of no possible prac- 
 tical use in times of active service without colliers, transports, etc. 
 Shall the United States Government build these colliers, transports, 
 etc., and hold them idle in times of peace at an enormous expense for 
 construction and maintenance, or is it wise to encourage (as may be 
 done at much less cost) the building and operation of badlj' needed 
 merchant vessels that can be used with profit to the country during 
 long periods of peace and be always available for governmental use 
 in time of war? There appears to be but one reasonable answer to 
 this question. It is difficult to see how any patriotic citizen can hesi- 
 tate a moment to admit that it is our duty to provide in peace for the 
 needs of a period of war, and that this' should be done under methods 
 imposing the least possible burden upon the people. It is far cheaper 
 for the Government to cause the construction and operation of mer- 
 chant ships than to itself build and maintain the same ships for use 
 by the naval establishment in time of war, holding them idle in time 
 pf peace. 
 
120 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 INCIDENTAL BENEFITS. 
 
 Incidental to this fundamental reason for rehabilitating the merchant 
 marine, are the beneficial results to be found in the field that will thus 
 be opened for our labor and capital in building, owning, and operating 
 vessels, and in opening new foreign markets for our products, which 
 markets can neAer be developed so satisfactorily bj- the use of foreign 
 ships as l)y ships owned, manned, and represented abroad by our 
 citizens. 
 
 AMERICAN SHIPYARDS. 
 
 If Government aid is extended to our merchant shipping in any 
 form it should not bo allowed to operate for the benefit of foreign 
 shipyards, but should be secured beyond possibility of doubt for our 
 own shipyai'ds and people. Vessels receiving aid should be required 
 to be American-ljuilt vessels. It may be well here to direct attention 
 to the equity and wisdom of providing, in any comprehensive plan 
 that may be fornnilated, for the just treatment of owners of existing 
 merchant vessels in the foreign trade. Without the persistent efl'ort 
 of these owners to keep our flag afloat on the oceans we would not 
 have left even the meager tonnage now existing. These owners who 
 have borne the brunt of the commercial war should not be forgotten, 
 not only because it would be unjust, but also because it would be 
 unwise, as they possess about all that we have left of expert knowl- 
 edge and organization on which to build up our new merchant marine. 
 
 16,000,000 OUTLAY. 
 
 When the aid extended by the United States Government to the 
 owners of the steamers Sf. Paul and St. Louis induced the building of 
 those ships in this country it caused the expenditure hereof $6,000,000 
 that would otherwise have been expended in England. Think of what 
 this means! Try to follow this $6,000,000 into the possession of the 
 shipyard owners; thence in part to their yard employees; in part 
 again back to the steel works, the sawmills — every industry contrib- 
 uting to the construction of a great modern vessel! Then on back 
 from these industries to the miners of iron and coal and the workers 
 in the lumber forests; to the farmers who feed all these workers. Do 
 not stop hei-o, but follow this $6,000,000 farther, back from these fun- 
 damental fields of labor to the flouring mills, the shoe, clothing, and 
 other factories supplying the laborers. So it goes on M'ith its benefi- 
 cent work without end as to time, and in ever-widening circles. It is 
 as a stone thrown into an ocean of still water, circles first small but 
 ever enlarging spread out in every direction, greater in diameter as 
 they become more and more distant, until the eye can follow them no 
 farther. Can any thoughtful person esteem it a matter of small and 
 local importance that the building, owning, and operating of the mer- 
 chant vessels that carry our products shall be the work of our own 
 people? True, this is only incidental and subordinate to the funda- 
 mental purpose of creating and maintaining an efficient naval estab- 
 lishment. It is incidental, but it is vastly important in its beneficial 
 results to the entire community. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 321 
 
 BURDENS VERSUS BENEFITS. 
 
 It might be necessary to impose burdens upon the country to insure 
 the existence of a complete and necessary auxiliary to our naval estab- 
 lishment. It seems fortunately possible to substitute benefits for bur- 
 dens by a resort in time of war to an assisted merchant marine for our 
 colliers, transports, etc. Equally important, in such a time of national 
 peril, will be a force of trained seamen and prosperous American ship- 
 yards equipped for the best class of construction and repair work. 
 
 KIND OF ASSISTANCE. 
 
 How shall this necessary assistance be ge given ^ Whatever may be 
 the form finally adopted there is one all-important consideration. Be 
 sure the aid given is sufficient to accomplish the end in view. If any 
 mistake is made it is far better to give too much than too little. Any 
 excessive payment made will find its way back to the people in reduced 
 competitive rates of freight. If you do not give enough aid, your 
 efforts will result in failure and the resort to Government aid will then 
 be unjustly condemned as wrong in principle because of a failure con- 
 sequent upon a niggardly practice. Those who believe in Government 
 aid to rehabilitate the merchant marine should not endeavor to drive 
 any hard bargains with those they are seeking to induce to embark 
 their capital and effort in the work; nor should the}' permit the ene- 
 mies of the plan, as has happened in the past, to force upon them some 
 form of compromise, sure to result in ultimate failure and discredit to 
 all concerned. Give enough if you give at all. 
 
 DIFFERENTIAL DUTIES. 
 
 The result sought can not be found in a resort to differential customs 
 duties, such as have been advocated. The experience of a past cen- 
 tury and under the then shipping conditions is absolutely valueless as 
 a guide to-day. Vessels need revenue in proportion, among other 
 items, to the length of their voyages. Differential duties provide 
 fixed allowances, irrespective of the time occupied on the voyage. A 
 dutiable cargo from Cuba, for example, would receive the same aid 
 under this method as the same cargo would receive if making the long- 
 voyage from the Philippines. Articles varying in value and rate of 
 duty would pay widely varying amounts to the vessel owner undei the 
 differential-duties plan. If these differences have not yet engaged your 
 attention, you will find it an interesting field for your statistician to 
 explore. 
 
 There is one possibility connected with the differential-duty propo- 
 sition that it is believed has" not as yet attracted attention and that 
 may be important. It is here suggested for your consideration. 
 While the direct grant of differential duties to American vessels is, as 
 has been briefly explained, open to numerous practical objections, it is 
 believed that there may be no practical objection, treaty or otherwise, 
 to the creation of a special Treasury fund to be used in aid of the 
 merchant marine by crediting to such a fund a stipulated percentage 
 share of customs duties collected on cargoes carried by American 
 vessels. The fund so collected, and supplemented if necessary, should 
 
 3a— 04 21 
 
322 HEAKINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 be distributed upon some just and right plan, but not by payment of 
 the differential duties direct to the particular vessel carrying the cargo 
 they represent. 
 
 CARGO BONUS. 
 
 Cargo tonnage bonuses have been suggested in the past, but nothing 
 has been heard of them of late, and pei-naps it is not worth while to 
 occupy your time with any comments upon this form of aid. 
 
 TREATIES. 
 
 While it is difficult for the average American citizen to recognize 
 that existing treaties with other countries should long be allowed to 
 stand in the way of his obtaining what he wants, it is nevertheless 
 certain that treaties must and will receive your careful attention in 
 their necessary relation to the question before you. 
 
 SUBSIDIES. 
 
 It is unfortunate that every form of Government aid to merchant 
 vessels discussed during many years has been described by the public 
 press and accepted by the public generally as a "subsidy." Citizens 
 opposed to eacli partiicular form of aid proposed have unitedly cried 
 out against " subsidies. " A concentrated opposition has resulted to 
 the word rather than to the thing it reall}^ represents. Some other 
 name may have to be found or invented that will be more generally 
 acceptable. It is doubtless impossible to add anything here to what 
 you have already heard in reference to the practicability of satisfacto- 
 rily aiding our decaying merchant marine by direct payments to ship- 
 yards and subsidies to vessel owners. The writer believes aid should 
 be extended in as simple and concentrated a way as may be possible 
 and to as few great interests. Instead of compensating separately 
 shipyards and shipowners it will be simpler and more effective to ex- 
 tend sufficient aid to the shipowner to enable him to have his vessels 
 built, as he should be required to do, in American shipyards. A gen 
 eral subsidy to all vessels in all classes of trade at anything approach- 
 ing a common rate is believed to be an undesirable and wasteful method. 
 
 RECOMMENDATION. 
 
 It is here suggested that perhaps it may be best not to endeavor to 
 deal with this important question in a wholesale waj'. Would it not 
 be wise to endeavor to first decide exactly what it is we, as a people, 
 want? Or, rather, while we may want the entire vessel-carrying 
 service on all the oceans, what is it reasonabl}^ possible to get, if we 
 maj^ not have it all? This will oblige determining the particular lines 
 of travel where our merchant marine is most needed. For the pur- 
 poses of illustration, let us suppose that facts submitted by merchants 
 and others oblige you to decide the service worst needed is a direct 
 service between New York and Brazil; that we seem to need a service 
 of, say, four ships the first year and an addition thereto of two or 
 four ships annually until the entire trade that exists, or can be created, 
 will be properly cared for. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 323 
 
 COMPETITIVE TENDERS. 
 
 If the United States Grovernment dealt with this proposition as an 
 individual would do, it would clearlj' describe the service it wanted 
 between, say, New York and Brazil, and it would invite tenders from 
 responsible parties for supplying and operatinj>- the vessels required 
 for a stipulated term of years. The Government would award the 
 contract, which would include availability in case of war and all postal 
 service needed, to the lowest responsible bidder. It would act simi- 
 larly upon each line of trade shown desirable to be created or devel- 
 oped. This, it appears, would be a sensible way to proceed. It may 
 be asked whether this would not operate to create a monoply and 
 cause unnecessarily high rates of freight to be charged for the vessel 
 service. It is safe to say, in reply, that there are no noncompetitive 
 ports in the world's markets reached by vessels on the oceans. It 
 would be impossible to burden competitive commerce with unreason- 
 ably high charges without diverting it to vessels and markets of other 
 nations. Vessel owners undertaking, under the plan of competitive 
 tenders, the pioneer work are justly entitled during the term of their 
 contracts to reap the reward of their enterprise, even though this 
 should oblige other American vessel owners desiring to compete in 
 these markets to do so without Government aid. 
 
 Each important line of travel has attached to it its own peculiar 
 competitive and other conditions, and what may be necessary aid on 
 one line may be too much or too little on another. A wholesale, uni- 
 versal rate of governmental aid, to be successful, must be the rate 
 necessary upon the least favorably situated of all of the routes. The 
 method must certainlj^ be a wasteful one. 
 
 SUMMARY. 
 
 In concluding this hastily prepared record of thoughts upon this 
 important question, and fully recognizing their crude character, they 
 may be summed up briefly thus: 
 
 1. A proper naval establishment demands an efficient merchant 
 marine, under contract for governmental use in time of war; a body 
 of trained seamen and shipyards well equipped for construction and 
 repair work. 
 
 2. Vessels built in this country, owned and operated by our citizens, 
 will benefit every producing interest in the country. 
 
 3. Some form of United States Government aid is recognized to be 
 essential that our merchant ships may be profitably operated on the 
 oceans. Without profit they can not exist. 
 
 {</) Diflferential customs duties paid directly to vessels carrying the 
 cargoes can not provide aid as it is needed. 
 
 (o) Cargo tonnage duties are not seriously advocated bj^ any who 
 sincerely believe in the propriety and efiicacy of governmental aid. 
 
 (c) Treaties with foreign countries must be considered. 
 
 (d) "Subsidy" is an unpopular name for a possibly necessary form 
 of aid. 
 
 (e) The Government should find it most economical and satisfactory 
 to obtain exactly what is desired through competitive tenders. 
 
324 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 (./) In whatevei' form aid is given it siiould be on a liberal and not 
 on a niggardly scale. If it is insufficient it will result in a failure, 
 with discredit to the effort and to all concerned in it. 
 
 All of which is respectfully submitted. 
 
 Fkank J. Firth. 
 
 STATEMENT OF DE COURCY MAY. 
 
 De Courcy May appeared before the Commission. 
 
 The Chairman. State to the Commission, if you please, what your 
 business is. 
 
 Mr. May. I am a shipbuilder. 
 
 The Chairman. Connected with what yard? 
 
 Mr. May. 1 am president of the Ne\>f York Shipbuilding Company, 
 located at Camden, N. J. 
 
 The Chairman. We shall be pleased to hear any statement j^ou wish 
 to make. 
 
 Mr. May. I am not going to take the Commission's time with any 
 remarks about the deplorable conditions of American shipbuilding. I 
 will simply put myself on record as being in favor of a bounty per 
 ton per mile to American shipping. 1 rather think it would be a 
 matter of considerable difficulty to get the money to pay the bounty, 
 and in consequence of that, my next choice would be the scheme of 
 the Maritime Association of New York, which has been put before 
 the Commission; that is, the differential duty and tonnage scheme. 
 I think that is the most practicable scheme I know of. There are 
 going to be considerable difficulties in putting it into effect — difficul- 
 ties in the way of treaties and quite a number of others — but I believe 
 it can be done, and while it is not my choice, 1 think it is the most 
 practicable scheme yet presented. 
 
 1 do not know that I have anything else to say. I shall be very glad 
 to answer any questions connected with the shipbuilding business — cost 
 of wages and such things — that the Commission may be pleased to 
 propound. 
 
 The Chairman. What is the condition of your business at the pres- 
 ent time; is your yard busy, or otherwise? 
 
 MOSTLY GOVERNMENT WORK. 
 
 Mr. May. At the present moment it is quite busy. We fiave nine 
 vessels — two Government vessels, a battle ship and a cruiser, live light- 
 ships for the Government, a coastwise steamer 300 feet long, and a 
 dredge for the Government to be used on the Mississippi River. We 
 have just finished the largest ship, except Mr. Hill's ship, ever built 
 in this country — the Jfanchuria, of the Pacific Mail Line. I hope the 
 Commission will pay us a visit and see this vessel. It is quite an 
 object lesson. It shows what American yards can produce. 
 
 We should like the Commission to understand the condition we are 
 in at the present time. We are in this shape: Toward the middle of 
 the summer the preparing part of our yard will have practically noth- 
 ing to do, and unless we can get new work I fancy we shall have to 
 discharge our people. 
 
 The Chairman. If it were not for the Government work you would 
 not he very >v('ll supplied with orders. 
 
 Mr. May. Almost all our work is Government work. 
 
HEAniNGS BEFORE THE MERCHANT MARINE CoMMlSSrON. 825 
 
 The Chairman. How long is it since you built a ship for the foreign 
 trade? 
 
 Mr. May. This is the latest one — the jrancJiurla, for the Pacific 
 Mail service. 
 
 The Chairman. How long is it since you laid a keel for a ship for 
 the foreign service? 
 
 Mr. May. For this boat, twentj^-onc months, and I forget how many 
 days. Her sister ship took nineteen months and twenty-three days. 
 
 Senator Mallory. What is her tonnage? 
 
 Mr. May. She is 13,000 registered tons; displacement about 2;-!, 000 
 tons. She is the largest ship ever built in this country, except Mr. 
 Hill's ship, and larger than any ever constructed on the Clyde. 
 
 Senator Mallory. Freight and passenger? 
 
 Mr. May. Freight and passengei-. She has accommodations for 260 
 in the first class and about a thousand in the steerage. 
 
 COST HERE and ABROAD. 
 
 The Chairman. 1 understand you have one of the best equipped 
 yards in the country, where, it is to be presumed, you have brought 
 the cost of construction to as low a point as possil)le. 1 should like 
 to ask you what is your estimate of the ditference in cost on the average 
 ':>^t\v3en American and British steamship construction at present. 
 
 ^,xr. Mat. It depends somewhat on the kind of ship that is built. 
 I should say the difference in cost between English ships and ships 
 built here is between 40 and 50 per cent. The difference in wages, as 
 well as I can figure it out-, is about 35 per cent. The difference on the 
 various materials will average about 45 per cent, on some less and on 
 some more. In a passenger ship on the fittings, the outfit as we call 
 it, the upholstery and those things, it is considerably more. I should 
 say about 45 per cent on the materials and about 35 on labor. 
 
 The Chairman. Of course, if the business of American shipbuilding 
 was in such shape that you had a line of similar ships to construct, so 
 that you could standardize, you would be able to supply them much 
 more cheaply than at pi-esent. 
 
 Mr. May. That is precisely the point, and if we had our yards full, 
 even though not of like vessels, we could do very much better. You 
 will see in our yards a battle ship, a cruiser, light-ships, a coastwise 
 steamer, a dredge. If we built vessels of the type of large passenger 
 steamers, or large freighters, we would very soon get the cost down. 
 If we could only have our yards full of work we would do as the 
 locomotive build.ers and others have done — be in shape to compete 
 with anybody. We are obliged to take anything we can get, and our 
 yard is full of every variety of work. 
 
 Senator Mallory. What will be the speed of the Manchuria? 
 
 Mr. May. Her speed is 15 knots. It was about sixteen and three- 
 quarters on the trial. 
 
 STATEMENT OF WILLIAM G. RANDLE. 
 
 William G. Randle appeared before the Commission. 
 
 The Chairman. State to the Commission in what business you are 
 engaged. 
 
 Mr. Handle. I am marine superintendent for the New York Ship- 
 building Company, located at Camden, N. J. 
 
326 HEAEINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 The Chairman. Proceed with your statement. 
 
 Mr. Randle. It has been my fortune, Mr. Chairman, to be connected 
 with the American merchant marine since boyhood. I remember a 
 time when, in the Waterloo Dock alone, at Liverpool, j^ou could count 
 27 large American sailing ships under the American flag. You all 
 know, as well as 1, the history of the decline of American shipping, 
 and it is no use to rehearse those matters. We come at once to the 
 present condition of affairs, which is, that we are now carrying the 
 products of our country to the extent of only about 8 per cent where 
 formerly, in those days, we carried 75 per cent. 
 
 The matter of the running expenses of the American ship as com- 
 pared with a foreign ship, is held up as one of the objections to the 
 advancement of American shipping. That is true. The cost of run- 
 ning American ships, both in salaries for the employees and also in 
 the expenditures for provisions — and we supply a higher class of food 
 than is generally found on foreign ships — is about 33^ per cent over 
 and above foreign flags. Of course it would be heresy on our part to 
 try to reduce the price of the employee at the present time. What 
 the future may produce we can not tell. But something else must be 
 done if we wish to return our flag to the carrying navies of the world. 
 We also know that at a time when we are increasing our defensive 
 navy we are rapidly losing our commercial marine. 
 
 The remedy I would suggest is this: In carefully looking over the 
 facts of the case as they exist, the most feasible plan that presents 
 itself to me is to grant a bounty on the registered tonnage of the ship. 
 For instance, take a 5,000-ton steamer and grant her 5 cents per reg- 
 istered ton, which would be an equitable tonnage measurement for all 
 classes of ships. Suppose we take a voyage to Brazil and back. That 
 ship would receive a bounty of about fl,500, and so on, in proportion, 
 the largest ship of course receiving the largest sum. On a voyage 
 from New York to San Francisco, the Manchuria, lying in our yard 
 at the present time, with a net tonnage of 8,750, would receive f6,125 
 at 5 cents tonnage bounty. After looking at all the conditions at the 
 present time I consider that the most equitable and most fair measure 
 that could be adopted, for the very reason that the smaller and slower 
 ship going the shorter distance would receive in proportion the same 
 as the fast ship, even up to the mail ship, going 20 knots. 
 
 Senator Mallort. Let me ask you a question. Do you propose to 
 give this bounty irrespective of whether the ship carries cargo, or 
 would you base it on some proportion? 
 
 Mr. Randlk. Certainly. 1 would have the bounty paid to the ship 
 if she was unfortunate enough not to haA'e any cargo to carry. 
 
 Senator Mallory. At that i-ate she would not make the trip for 
 the cargo. 
 
 Mr. Randle. The bounty would he so small that no ship would 
 leave port for the sake of earning the bounty. She would certainly 
 remain in port until she got a cargo, and a paying cargo. 
 
 The running expenses of a 4,000-ton steamer per day is .about 
 $132.61. That includes rates of insurance, fuel, wages, and provisions. 
 On a sailing vessel of the same tonnage the running expenses per daj^ 
 would be about $53. So you see the bounty would not constitute any 
 kind of an inducement for a ship to leave port without cargo, just for 
 the sake of earning the bounty. But that small bounty, of course 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 327 
 
 would be an incentive to shipowners or to tlie capital of the country 
 to engage in the shipping business. 
 
 Senator Mallort. In your proposed scheme would you discriminate 
 at all between sailing ships and steamships, or would both recoive the 
 same l 
 
 Mr. Randle. The sailing ship would receive the same as the steam- 
 ship. Why discriminate? 
 
 Senator Maw.ory. The steamship would make :iV)out three times as 
 many trips. 
 
 Mr. Randle. It would be unfair to the owner of the sailing ship if 
 he was denied the bounty so long as his ship was under the American 
 flag and owned by an American. The owner of a sailing ship going 
 to a foreign port should receive the same bounty. I do not say on 
 freight; I say on the registered tonnage, which is a fixed fact as to all 
 ships and about which you could not make any mistake. I would not 
 say gross tonnage, but registered tonnage; net tonnage. 
 
 STATEMENT OF E. R. WOOD. 
 
 Mr. Wood. My chief claim for venturing to address this Commis- 
 sion is that I represent the National Board of Trade in this matter. 
 After the Department of Commerce and Labor was created by law 
 the National Board of Trade felt that there was no question before 
 the people of the United States of greater importance than that of the 
 revival of American shipping. They appointed a committee, of which 
 I happen to be chairman, to see what investigations and what move- 
 ments the Department of Commerce could make in the very line in 
 which your Commission is now acting. I have had the privilege of 
 having scAeral interviews with Secretary Cortelyou and his commis- 
 sioners, Mr. Austin and Mr. Chamberlain, on this very subject. The 
 committee of the National Board of Trade felt that the matter had 
 in many respects been debated perhaps a little too much in the air; 
 that theories had been talked about without getting down to facts in 
 all cases. 
 
 world's tonnage two hundred million. 
 
 For instance, we found that the Department of Commerce would 
 not undertake to say how many tons were put on board vessels in all 
 the world. The Secretary or his assistants would not undertake to 
 say just how many tons the world's business consisted of, and they 
 practically accepted our figures as approximately correct — that there 
 were put on vessels each year about 200,0(»0,000 tons of goods for 
 transshipment. 
 
 I should like to bring up the doctrine of cheap initial cargoes. To 
 go back a little in ancient history in order to illustrate just what I 
 mean by that, during the middle of the eighteenth century the ships 
 from Boston and New Bedford and all the way down the coast, as far 
 as fishing interests were concerned, would load up with mackerel and 
 codfish, and would go down to Cuba or Jamaica. They would there 
 get sugar and rum and West Indian products and take them to Eng- 
 land. Thej' would take the cheap English hardware and cheap cotton 
 goods and go down to the west coast of Africa and load up with 
 slaves and come back to Cuba or Jamaica again, and from there bring 
 
328 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 home their return cargo of rum and sugar. There you had a world's 
 trip, and the world's commerce really depended upon the codfish. 
 There are old families in New England that still maintain the codfish 
 on their coat of arms. They are not ashamed of the codfish. 
 
 A CHEAP INITIAL OAKGO. 
 
 These are modern times, and conditions are entirely changed. We- 
 must have our cheap initial cargo all the same, but we can not 
 depend upon the fishing interest for it. Modern commerce has got 
 too large. When you come to consider the question as to what the 
 200,000,000 tons of the world's commerce consists of, you find there 
 are 65,000,000 tons of coal. One-third of the whole transshipping 
 business on the ocean is the carrying of coal. If you leave out that 
 proportion of the commerce which the great trans-Atlantic ferries and 
 the great express steamers carrying the mails carry, 3'ou will find that 
 one-half of the cai-go business of the world is coal. That is apart from 
 the express steamers, which apparently constitute a department by 
 themselves. 
 
 The proportion of the coal business is very much the same in trans- 
 Atlantic management as in railroad management. You must have 
 your initial cargo. That is where England reall}' controls the com- 
 merce of the world. England puts on board of vessels 60,000,000 tons 
 of coal a year. Mr. Chamberlain said we must not call it all cargo, 
 because 15,000,000 tons were for steamship purposes. It makes no 
 difference to the coal miner what the steamship does with the coal, 
 whether she puts it in her coal bimkers or in her hold. It helps the 
 miners, and it helps the railroads which carry it from the mines to the 
 seaports. That makes the cheap initial cargo from England. 
 
 THE KNGLISH COAL EXPORT. 
 
 She puts coal on board her vessels at varying prices. I have the 
 statistics here, but I will not trouble 3'ou with them. The prices run 
 from f 3 to $4 per ton f . o. b. That is the price at which England 
 sells coal to the world. We here are begging people at all our wharves 
 to come and buy coal of us. We should be glad — I am interested in 
 coal mining — to have our coal taken off'our hands at $2.25 a ton f . o. b. 
 steamer, and England is to-day getting about |3.50 f. o. b. steamer. 
 
 You would say that is a sufficient difference to make American coal 
 go, but it is not. The coal merchants in Philadelphia, men who have 
 thoroughly examined the situation, say they can not ship coal to the 
 Mediterranean against an English rate of 5 shillings (that is fl) a ton 
 from Newcastle or Cardiff to Marseilles. The American rate would 
 not be less than 15 shillings, or $3. So a difference of f 1 a ton in the 
 price of the coal does not begin to touch it. It does not constitute an 
 inducement to ship American coal. 
 
 I ask you, gentlemen, to remember that I represent the National 
 Board of Trade only when I state facts. When I talk theories I do so 
 on my individual responsibility. To my mhid the question turns on 
 coal, because there you get your cheap initial cargo. You want to 
 make it an inducement for American vessels to take coal, and this 
 Commission can not do better than to resolve itself into a commission 
 to enable the United States coal miners to send out coal. You will get 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 829 
 
 your shipping business instant!}' if you provide that the coal shall go 
 out on American ships, and you will have the gratitude of a great 
 many coal miners. 
 
 Senator Penrose. How would you get at it? 
 
 A BOUNTY ON AMERICAN COAL. 
 
 Mr. Wood. By a rebate. 1 would rebate to the outgoing ship a 
 certain proportion, and, as Mr. Firth said, you must be liberal, and if 
 you are too liheral the American people will get it back in the com- 
 petition that will result. 
 
 Senator Penrose. What do j^ou mean by a rebate? 
 
 Mr. Wood. Suppose a vessel goes to France. France buys in 
 England 8,000,000 tons of coal j'early. The United States is doing 
 of the world's business about one-fourth. I leave out the Asiatic 
 countries. It is therefore a reasonable proposition that we should 
 strive to do one-fourth of the shipping of the world. Applying that 
 to France, as a special example, we would have to sell France 
 2,000,000 tons of coal. We are buying from France $60,000,000 worth 
 of goods, and the duties on those goods will- come to about forty mil- 
 lion. 1 am speaking in round figures, of course. A rebate of 10 per 
 cent, which is perhaps cutting a little too close, of the duties on French 
 imports would be $4,000,000. You divide that among the 2,000,000 
 tons of coal, which you want to take there, and you get what is of 
 course in one sense a bounty. But the vessel earns |2 a ton, which is 
 paid her by the Government out of the duties, and it puts her in a 
 position to compete with the $1 a ton vessel that comes from England. 
 
 The Chairman. Your suggestion is very interesting, but do you 
 think the American people would agree to a Congressional enactment 
 that would single out one product to be favored in the matter of 
 transportation ? 
 
 Mr. Wood. There are reasons why they might. The American 
 people take a great deal of pride in their Navy. They also take pride 
 in the fact that the Navy is not bought, as Japan is buying her navy, 
 but is manufactured at home and is run by American people. I think 
 they would take a pride in having the Navy propelled by American 
 coal; and it is not so propelled now. The American coal miners who 
 are under contract to supplj' the Navy with coal are to-day shipping 
 English coal to ports all over the world to supply American naval 
 ships. 
 
 THE navy fuel. 
 
 Senator Penrose. You are mistaken about that. The Navy uses 
 American coal wherever it can get it. In some ports the ships have 
 to use Welsh coal, but the Navy uses Pocahontas coal chiefl3^ 
 
 Mr. Wood. I am speaking now on the authority of the firm who are 
 interested. 
 
 Senator Penrose. I know them. 
 
 Mr. Wood. Mr. Bullitt himself told me that they supplied the 
 American ships at Honolulu and San Francisco with coal from Cardiff. 
 
 Senator Penrose. That may be true; but all the naval vessels on the 
 Gulf and on the Atlantic seaboard, wherever it is practicable to get it, 
 use American coal; and that forms the gi-eat bulk of the coal used. 
 
'dSO HEARtNGS BEFORte THE MEECHANl' MARINE COMMISSION. 
 
 Mr. Wood. If an American vessel goes through the Suez Canal, 
 she is bound to take English coal, and so all through the Mediterranean. 
 She can not get any other coal. 
 
 But that is one thought. Then there is another, which is that to 
 appease the American prejudice against such things, if you choose, 
 you can make it a rebate to all ships carrying out American products. 
 You can make it on cereals as well as coal. The next item to coal in 
 the shipments of the world is cereals, amounting on the whole to 
 about twenty-seven million tons, nearly one-half of which goes out of 
 the United States. You might easily promote the export in that way 
 of about twent}' million tons of American products. 1 think that was 
 Mr. Hill's suggestion, that cereals should have some advantage in that 
 respect. 
 
 The Chairman. He proposed an export bounty. 
 
 Mr. Wood. Yes. But a rebate paid to the ship on duties on goods 
 imported by her does not make the goods abroad any cheaper, neither 
 does it provide competition with home goods, because the full duty is 
 paid bj' the importer. It simply goes to the ship and raises the ship 
 labor to the level of the home wage; that is all. 
 
 The Chairman. We are very much obliged to you. 
 
 Mr. Wood subsequently submitted the following paper: 
 
 Mr. Chairman and gentlemen, when the people of the United States 
 contemplate the resumption of American transoceanic commerce tney 
 are met at once by the fact of the higher wage rate prevalent amonp 
 Americans, and as to shipping, by the legislation now existing for the 
 preservation of Americanism. 
 
 Three alternatives are at once presented. 
 
 First. Abandonment of the effort to compete for transoceanic busi- 
 ness. 
 
 Second. Lowering to a greater or less degree the standard of Amer- 
 ican manhood in the marine; and to sucb degree as that standard may 
 be maintained, supplementing it by some form of assistance. 
 
 Third. A resolute maintenance of the American standard supported 
 by such legislation as will put American sea labor on the same eleva- 
 tion as American land labor. 
 
 The writer sees no other alternative. It is either an abandonment 
 of the ocean, or an approximation of living conditions on the ocean 
 with those upon the land. 
 
 He proposes to address this honorable Commission in support of the 
 third alternative. He comes before them as representative of the 
 National Board of Trade, and asks them to note that in statements of 
 fact he speaks for that board, but that for his theories he is himself 
 only responsible. 
 
 The national board has thought that in the discussions of this ques- 
 tion scai'cely enough attention has been given to the physical conditions 
 involved. 
 
 It is admitted that the people of the United States pay $200,000,000 
 to the ocean carriers of the world, but what the total ocean traffic in 
 tons of the world is has not yet been commented upon. 
 
 So nearly as can be ascei'taincd from data at hand the tons put on 
 board ship each year for transoceanic carriage amount to 200,000,000 
 tons. 
 
 Now, in handling this amount of material, the first essential condition 
 is to supply the ship with a low-cost initial cargo. This was exempli- 
 
HEARINGS BEFORE THE MERCHANT MA.R1NE COMMISSION. 331 
 
 fied in the middle eighteenth century, when American shipping first 
 began to make an impression upon the world's commerce. 
 
 Then the cod and mackerel fishing industry of New England sup- 
 plied an ever salable product at low cost to the fai'mer and his sons 
 who chose to run down to Cuba or Jamaica; thence they would take a 
 cargo of sugar and rum to England; load up there with cheap cutlery 
 and cottons for the west African coast; then return to the West Indies 
 with slaves, and make the homeward voyage with rum, sugar, and 
 siher dollars, the profits of the round trip. 
 
 At the present time, while the fishing mdustry has not lessened in 
 actual amount or importance, the introduction of the steam engine, 
 and the diffusion of mechanical improvement over all the world has 
 completely changed the relative tonnage of the various items in the 
 world's transoceanic shipment. 
 
 As already stated, the total annual tonnage of the world may be 
 tajcen at 200;0()0,000 tons, as follows: 
 
 Tons. 
 
 Coal .-. . - 65, 000, OOO' 
 
 Cereal crops 25,000,000 
 
 Spanish, Cuban, and other iron ores 7, 000, 000 
 
 Sugar ( say ) 4, 000, 000 
 
 Various productn 99, 000, 000 
 
 Total - 200, 000, 000 
 
 Now, if deductions are made for products carried by the great swift 
 steamers in the mail and express business, it will be found that the 
 carriage of coal makes one-half the transoceanic freight business. 
 
 Thus the considerations before the Commission divide themselves 
 naturally into two heads. First, those which regard express steamers; 
 secondly, those regarding the heavy freight carriers. 
 
 I must repeat that as to this second head one-half of the problem 
 turns upon the freightage of coal. 
 
 Now, the American people are certainly not going to put up their 
 funds for helping American vessels export English coal. But you 
 must remember that, start 3'our ships how you will, and take them 
 where 3'ou will, one-half of their cargoes must be coal. 
 
 Indirectly, then, your Commission is a bod}^ appointed to devise 
 means for exporting American coal. Why not face this fact squarely 
 and apply your minds directly to solve the probleiji under this aspect, 
 for whatever you do must result in increasing coal exports, or must 
 result in failure. 
 
 As to the head of the ocean express business, no other thought has 
 occurred to the committee of the National Board of Trade than that 
 the other great marine nations, England and Germany, must be met 
 by- their own weapons, although not necessarily upon their own 
 already appropriated lines of travel. 
 
 In other words, to such points on the globe as it may seem requisite 
 to have direct American mail service, the Post-Office should pay what- 
 ever is required to secure the desired service. 
 
 The hateful word "subsidy" need not be used in this connection. 
 The American people take a certain pride in not being outdone, even 
 in extravagance, by others, and will probably at suitable points be 
 willing to compete in mail service with Great Britain at any cost nec- 
 essary to obtain their object. 
 
332 HEAEiNGs bkporj: thk meuchant marine commission. 
 
 I 
 
 At the present time the writer would regard the South American 
 coast line on both its eastern and western side as being that part of the 
 earth's surface with which we most need increased mail facilities. 
 
 To return to the heavy freighter. In coal this country possesses tha 
 natural low-cost initial cargo, taking the place naturally of the salt-fish 
 initial cargo of an hundred years ago. It is a large product, of unlim- 
 ited amounts always available upon the seaboard, which is not at our 
 ports called for by the present ocean carriers because they get their 
 initial cai-go in England. England, Germany, and France all cluster 
 around the same narrow coal deposits, and all send their vessels to 
 Cardiff or Newcastle upon their initial voyages. The consequence is 
 that these two ports rank in tonnage next to Liverpool, which is itself 
 a large coal shipper. 
 
 The business of your commission is to provide that Norfolk and 
 Mobile shall get a share of the trade supplied by Newcastle and Car- 
 diff, but remember that this can only be done by American ships, get- 
 ting their initial cargoes at these or other ports on either ocean front 
 of our great country. 
 
 As to the means of getting this result, it may be stated that English 
 coals sells f. o. b. , under varying conditions of market and quality, 
 from ,50 cents to %\ above American coal, but that under present con- 
 ditions freights are $2.50 to $3 per ton higher from Atlan* c ports of 
 United States than from British ports. 
 
 The speaker would urge that any efforts to be made by the United 
 States to obtain this trade should not be too ambitious. The "factor" 
 of the United States' business is about one-fourth of that of the civi- 
 lized world, and it may be accepted that one-fourth of the coal supply 
 could be within reasonable time secui'ed by the United States without 
 serious danger to existing commercial conditions. This country would 
 come in for the natural growth of the business and it would be an actual 
 relief to the pressure now beginning to be felt by the English mines. 
 
 The problem thus narrows down as to how American labor on ves- 
 sels employed in this business can be sustained at the same level as 
 American labor employed on land. Here again the unpleasant words 
 "subsidy" or "bounty" .should not be used. 
 
 The American seaman is neither to be subsidized nor pauperized, 
 but as the revival of American shipping calls on him to meet pauper- 
 ized labor on an element fi-om which the competition of low-grade 
 labor caij. not be sbut out, there is an equity in making such disposi- 
 tions as will enable him to hold his own without degradation. These 
 dispositions, in whatever fo^m they may be made, should be so called 
 as to designate their true nature, which is that of a " labor allowance." 
 
 Among the many suggestions made to reach this end the National 
 Board of Trade would ask your attention to the plan of allowing to 
 such American vessels as might take out a cargo of coal a labor allow- 
 ance in form of rebate to the vessel of some proportion — for example, 
 10 per cent^of the tariff charges on return cargo of the vessel. Condi- 
 tions vary so much in the different trades that there may be some 
 countries where an allowance in this form, as tariff laws now stand, 
 would be of no use. 
 
 But taking the French trade as an example, and supposing our leg- 
 islation to be framed in expectation of ultimatel}^ exporting one-fourth 
 the coal tonnage of the world, then the proper share to be gained by 
 the United States in the coal imports of France would be one-fourth 
 of 8,000,000 tons, or 2,000,000 tons. 
 
HEAEINGS BEFORE THE MERCHANT MARINE COMMISSION. 333 
 
 Equalizing average differences of freight against the United States 
 will call for a labor allowance of $2.50 per ton, making on the whole 
 bill, if the trade be secured, an amount of 15,000,000. 
 
 Now, duties collected by the United States on merchandise imported 
 from France amount to about $40,000,000, on which a 10 per cent 
 rebate to cover the labor differential would be only $4,000,000, or 
 hardlj' enough for the purpose, unless on the expectation that America 
 would only try for the cream of the business. 
 
 It may not be devoid of interest to your Commission to consider the 
 business results of a national output of 2,000,000 tons of coal thus 
 gained. It would be something like the following: 
 
 First, at minss. — All inside and outside workers numbering 300, 
 and representing the maintenance of total population of 1,200. 
 
 Second, railroad transport. — On average haul to seaboard employ- 
 ment of 20 first-class trains constantly going and coming. Trainmen, 
 section hands, and general help, say a force of 350, and representing 
 the maintenance of population, 1,700. 
 
 Third, ocean transport. — Equivalent to not less than 150,000 steamer 
 tonnage steadily running, employing in all not less than 2,000 men, 
 representing population of 4,000. 
 
 Please note this estimate as made on the spur of the moment and 
 based on general knowledge without specific inouiry. 
 
 The financial balance sheet.would be something as follows: 
 
 NATIONAL JNCOME. 
 
 By sale of 2,000,000 tons of coal to France at $6 per ton $12, 000, 000 
 
 DISTRIBUTION TO PERSONAL UNITS. 
 
 To landowners for royalties 150, 000 
 
 To miners 1, 350, 000 
 
 To outside mine workers, supplies, management, etc 675, 000 
 
 To railroad labor of all classes 1, 875, 000 
 
 To use of railroad capital 725, 000 
 
 To dock labor and vessel crews of all classes 2, 850, 000 
 
 To fuel (of American product consumed ) 1, 150, 000 
 
 To American shipyard for upkeep and renewal of fleet and interest 2, 125, 000 
 
 To profits of mine lessees and merchants 1, 100,000 
 
 12, 000, 000 
 Error and omission excepted. 
 
 Obviously in the French trade a labor differential can l)e charged 
 against customs in favor of vessels taking out coal to very great general 
 advantage. These conditions do not differ much as to an}' of the Medi- 
 terranean ports. 
 
 In the Brazilian trade conditions are very different. Our deliveries of 
 coal to Brazil at the rate of one-fourth her total coal purchases would 
 be 250,000 tons, while our imports from Brazil come, of all kinds, to 
 about 350,000 tons, so that total exports and imports in tons almost 
 exactly balance. This makes a most desirable character of trade to 
 the shipmaster, as his vessel thus goes full in each direction. The 
 direct trade between the two countries would never have slipped from 
 American hands had it not been for the low cost initial cargo, which 
 British vessels had in their coal. An English "tramp" now will take 
 coal from Newcastle to Rio, coffee to New York, and wheat to London, 
 and in two or three days more is back at Newcastle again. 
 
334 HEARINGS BEFOEE THE MERCHANT MARINE COMMISSION. 
 
 As we collect no duty on imports from Brazil, there is no customs 
 margin in that trade against which a labor differential can be charged. 
 If the Commission should find that the business could not be done by 
 express steamers running under the encouragement of a liberal mail con- 
 vention, then the only available method to secure the trade for American 
 vessels would be the creation of a customs margin by a small duty on 
 coffee, rubber, and hides. A half cent per pound on these commodi- 
 ties charged to the customs and rebated to American ships would 
 secure the trade. 
 
 Your Commission, from these suggestions, will perceive afresh how 
 various are the problems involved in the reviving of American ship- 
 ping. Each section of the globe, each great nation in fact, presents 
 its own especial features, which must be studied individuallj' to insure 
 success. 
 
 The probable outcome of a labor differential charged against cus- 
 toms, in the forms indicated by this article, would be that American 
 vessels will go shopping around all over the world, just as they used 
 to do eighty years ago, and will swap cargoes from port to port uutil 
 they have picked up a lot that suits their fancy as likely to bring them 
 the largest possible labor differential on arrival home. 
 
 It has been suggested before your Commission that there is some- 
 thing reprehensible in this process. For what reason the writer is 
 wholly unable to understand as no one is injured. Certainly the home 
 manufacturer is not, for goods discharged from the American vessel 
 must pay the same duty as all other imported goods of the same class. 
 
 That American shipmasters and their crews should be interested in 
 bringing into the United States those goods which pay the Govern- 
 ment the highest duty would seem to be a distinct advantage in every 
 direction. The Government gains, the manufacturer is protected 
 against low-grade competition, and the home-staying multitude are 
 educated as to the best of foreign products. 
 
 This article has been written, taking coal as the ton basis of modern 
 commerce, which it in fact is. The American people are believed to 
 be resolved on this subject, and need only that the real facts of the 
 situation should be put clearly and honestly before them to adopt the 
 course plainh' marked out for success in their desired aim. Questions 
 of crimps, wages advanced, and boarding house difficulties are little 
 more than bypla}'. Marryat's sea tales of a hundred 3'ears ago might 
 have been written from the evidence given before your honorable 
 Commission. Such conditions have not seriously affected the com- 
 merce of England, and should not too much affect the work of the 
 Commission. The picture of j'our success must be wrought on larger 
 canvas. 
 
 It may, however, come to the point in a political sense, where inter- 
 ests shall have to be conciliated that have little merit in a commercial 
 sense. There is no jjossible initial cargo to-day comparable with coal 
 in lowness of cost and universality of sale, jet the cereals, pig iron, 
 and petroleum may be treated as initial cargo at tmies for round voy- 
 ages, and Congress in its wisdom may see tit to put every American 
 thingbetween the lakes and the oceans upon the list to certify the 
 American vessel's right to a labor differential on her return cargo. 
 Such a wide opening of the legislative doors will not alter the facts of 
 commerce, but may add something to the difficulties of diplomacy. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 335 
 
 England and Prussia have treaties giving the vessels of those coun- 
 tries the right to enter American ports without discrimination of duty 
 between them and American vessels. These treaties are subject to 
 abrogation upon a year's notice, and the Department of State will have 
 lost its cunning if it should prove unequal to any situation the legisla- 
 ture may create. 
 
 Respectfully offered ])v 
 
 E. R. Wood, 
 Chairman of Comndttee on BuslneHS UHth Department of 
 
 Commerce and Labor, of Natimxal Board of Trade. 
 
 STATEMENT OF FRED W. TAYLOR. 
 
 Fred W. Taylor appeared before the Commission. 
 
 The Chaikman. Mr. Taylor, in what line of business are you 
 engaged ? 
 
 Mr. Taylok. I am engaged in the steamship business. I am operat- 
 ing a line of chartered steamers between Philadelphia and London. 
 We have large terminals here at Port Richmond. We also own a grain 
 elevator. We have had considerable experience in operating these 
 steamers and in endeavoring to build up at Philadelphia a regular 
 service as between Philadelphia and London. 
 
 1 am only expressing my individual opinion, but it strikes me that 
 this case can be illustrated by an ^Esop fable — that of the old man and 
 the young man and the donkey. They had a great deal of advice, and 
 it ended in the old man taking the advice to carry the donkej'^; and, of 
 course, in this case the old man is Uncle Sam. 
 
 1 should like very much to have assistance, if we can get it, as an 
 American concern, as a practical solution of this question. 1 am a 
 Philadelphian. 1 was born here. I have a very large amount of 
 money invested in Philadelphia, and if there is any practical solution 
 which will aid us in the building of American steamers to operate in a 
 i-egular established trade we would be very glad to get it. 
 
 FREE SHIPS AND LOWER WAGES. 
 
 Personally I do not see any way of arriving at a solution of the 
 problem at the present time unless you will allow us to buy our 
 steamers in the cheapest market 
 
 The Chairman. Could you operate them as against foreigners? 
 
 Mr. Taylor. And change our navigation laws to enable us to 
 operate them in competition with foreigners. 
 
 The Chairman. What do you think the people would say about a 
 proposition to put our service on the same wage plane as that of the 
 European countries ? 
 
 Mr. Taylor. There is the difficulty. We run up against a senti- 
 ment, but we have to operate a business wholly on business principles. 
 If you would allow that opportunity for the initial start of the service, 
 it would give some repairs here and would give our shipbuilders the 
 opportunity to get their material at reduced prices. They are paying 
 high prices here, under the same laws, for their plate and the other 
 material that enter into the construction of a ship — too high prices. 
 1 do not want to refer to it, but one of our piorainent shipbuilders 1 
 
336 HEARING8 BEFORE THE MERCHANT MARINE COMMISSION. 
 
 understood went before one of your committees and asked for the 
 opportunity of relief in that direction. 
 
 Now, I agree with Mr. Bartol that one of the difficulties here is that 
 the American capitalist has better opportunity for the investment of 
 his money in home enterprises, and there has not been much induce- 
 ment for him to seek investments in boats to carry on foreign commerce. 
 The foreign trade has been very greatly competed for. The foreigners 
 have the largest capital in the world engaged in it, and they have some 
 of the shrewdest and some of the most experienced men in the busi- 
 ness. We have at the present period a very depressed condition. It 
 was never worse. Owing to there being a surplus to-day, high-grade 
 ships can be bought at very greatly reduced prices as compared with 
 their cost value; and the same reasons operate for low prices in foreign 
 yards. 
 
 TOO MUCH TONNAGE JUST NOW. 
 
 I do not see how you can aid us except by some subsidy; and bow 
 to apply that subsidy is a question. As Mr. Firth says, to give it one 
 monopoly is unconstitutional, and if you made it a very strong and cer- 
 tain thing for the investor by the guarantee of the Government, the 
 result would be the promotion of companies simply from the subsidy 
 standpoint alone. You would have an oversupply of new tonnage 
 built on the Government aid, and the world to-day is over congested 
 with existing tonnage. We have in the world to-day entirely too much 
 tonnage. The South African war caused the addition to the world's 
 marine of a ^ery large amount of tonnage. The companies had char- 
 tered to the English Government at high prices the transports and 
 other boats required for the long service between England and South 
 Africa, and immediately a very large amount of new tonnage was 
 created by the existing lines. They supplied themselves with better 
 tools. 
 
 During that period there were handsome returns, but with the stop- 
 page of that war, and the return of this tonnage on the market, together 
 with the failure of crops in the United States, there is now an over- 
 supply. We have had now for three years failures of the corn crop 
 so far as concerns there being a surplus in merchantable oi'der. Our 
 crop of 1901 was 700,000,000 short in quantity, and -the crops of 1902 
 and 1903 have been deficient in quality. The corn would not keep. 
 You could not shell that corn and put if in elevators and transport it 
 to Europe. It became too hot. The world has got along without that 
 corn. They got their supplies from the Argentine, from the Danube, 
 and from Russia. They really have missed us very little, but we felt 
 the loss. Our wheat crop was comparatively moderate in quantity 
 last year, and the price was so high in this country that the mills of 
 the Northwest to-daj^ are running not more than half time and almost 
 entirely on the domestic trade. 
 
 FOREIGNERS WOULD PREFER THEIR OWN SHIPS. 
 
 Again, suppose a subsidy was given by the (xovernment, and you 
 would select some favored line and give efficient aid. These goods 
 as a rule are owned by people on the othei- side. The flour is sold, 
 the bill of lading is drawn, the draft is made at the initial point of 
 shipment, and the I'oute is left to the shipper or is named by the 
 consignee, and the shipper is done with it. He gets the money from 
 
HEAEINGS BEKORE THE MERCHANT MARINE COMMISSION. 337 
 
 the bank. Regardless of your law.s, the English or the German bu3'er 
 could order his goods sent from this country by the line he chose to 
 elect. He could order them sent by an English line if he were an 
 Englishman, or by a German line if he were a German. 
 
 I am speaking now of the regular port trade and why }'ou could not 
 control the routing of the traffic by this appeal at home; and it is to 
 be presumed that some effort would be made as against the effort of 
 the United States. There would be an effort by those people, on 
 patriotic sentiments, to give the contracts to their home lines. So 
 you could not control it even if you had one favored line going. 
 There would not be any guarantee, even with the aid of the Govern- 
 ment, that it would fill itself from here out. It would have to make 
 a still further reduction in competing rates or some special financial 
 inducement as against the local sentiment, which would create antago- 
 nism as between a specially favored line and lines running under natu- 
 ral laws. We saw that illustrated recently in the case of the English 
 people appealing to the home Government to assist the Cunard Line as 
 against the combination of boats against it, which resulted in the 
 Cunard Line securing special loans of money at extremely low rates to 
 maintain their independence and competition. 1 think you would find 
 some retaliatory measures from other governments as against meas- 
 ures that we adopt. 
 
 EUROPE NOT WHOLLY DEPENDP^NT. 
 
 Now, with respect to the surplus that we dispose of to Germany, 
 England, and elsewhere, I may say that those countries are not entirely 
 dependent upon us. They are releasing themselves very rapidly from 
 the condition of a generation ago. We used to feel that they must have 
 our grain, whereas they are very rapidly eliminating that as a factor. 
 The production of the Argentine has grown by leaps and bounds, and 
 if you will get the figures of the corn, or maize, as they call it, exported 
 from that countrj^ you will find they are running very high against 
 our own. The production of the Danubian provinces has also grown 
 enormously. They are freer of speculation; there are less rings and 
 less short selling. So, when ships arrive at their ports of loading, they 
 have more regularity in regard to getting their stocks. 
 
 In Canada the English Government has taken advantage of the 
 immigration to its great wheat fields of the Northwest to extend the 
 Grand Trunk Railroad for the still further opening of that country. 
 It raised last year, if I remember correctl}^ about 50,000,000 bushels 
 of the finest wheat in the world, and that grain now seeks the seaboard 
 entirely independent of American lines and bottoms. There are out- 
 lets by Montreal and Quebec during the summer season, and they 
 come down and touch Portland and Boston during the winter season. 
 If you will get the statistics of the growth of that commerce at Mon- 
 treal within recent years I think it will astonish you. It shows that 
 they are laying their lines to get their wheat from their own country. 
 They will have cotton, without question, after the cataracts on the Nile 
 are dammed. That work is almost completed at an enormous expense. 
 Then very large and fertile cotton lands will be opened. All over the 
 world no set of people is going to allow itself to be dominated and 
 controlled by any other people. 1 think that is the general competi- 
 tion as I see it in the world's trade. 
 
 3a— 04 22 
 
338 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Our high-tariff principle has been in the past a very great advantage 
 to this country. 1 do not think anyone disputes that. But the question 
 is whether we have not arrived at a time when there should be reduc- 
 tions in the tariff. 
 
 The Chairman. Along what lines ? 
 
 Mr. Taylor. Along general lines. I could not indicate them. It 
 is another one of these difficult problems. I am speaking generally. 
 It is very difficult to give you exact practical suggestions as to what 
 you should do. I think the general demands of the country require 
 reductions, but the matter will have to be taken up intelligently. 
 Those reductions will result in larger return cargoes by the steamers 
 that sail as between ports 
 
 The Chairman. If it results in larger return cargoes, what will 
 become of our domestic manufacturers? 
 
 Mr. Taylor. They will live all right, just as the other manufac- 
 turers live. 
 
 The Chairman. It certainly must restrict the market for American 
 manufactures. 
 
 Mr. Taylor. Our ironmasters, I think, do not fear competition; 
 and you gentlemen in Congress talked of erecting a plant as the only 
 way to bring the price of your armor plate down to a fair rate. You 
 wanted some competition. 
 
 The Chairman. That has been discussed. 
 
 Mr. Taylor. Yes. Personally, as a merchant, I feel that I have 
 to devote my attention, with skill and ability and capital equal to 
 those of my competitors, in any direction where I may see an oppor- 
 tunity to make money, without reliance upon Government aid, because 
 when we get that nursing bottle in our mouths it is a weak depend- 
 ence. It weakens our individual enterprise. I believe the opportu- 
 nity at this time is very great, owing to the demoralization and the 
 fact that we own no old tonnage. We can start anew, and you can 
 buy a high-class boat at very much less cost to start with. 
 
 Senator Mallory. The evidence we have had laid before this Com- 
 mission, and in the past also, has shown that the operating expenses 
 are at least 33-J- per cent greater on an American than on a foreign ship. 
 After you get your ship, how are you going to operate her? 
 
 Mr. Taylor. Our laws are defective. They ought to be changed. 
 
 Senator Mallory. What change would you make ? 
 
 Mr. Taylor. I would allow them to select their officers in any port, 
 foreign or not, where they can get the skill. 
 
 Senator Mallory. How about the seamen ? 
 
 Mr. Taylor. 1 would have them open and free. 
 
 Senator Mallory. They are free now. 
 
 Mr. Taylor. Yes. 
 
 Senator Mallory. There is no restriction in that respect, and yet 
 the wages of seamen on American vessels are said to be higher than on 
 foreign ships. 
 
 would have foreign officers and men. 
 
 Mr. Taylor. If there was no law to restrict me, I would get my 
 sailors at the same price that the foreigner does. They are taking 
 advantage of the navigation laws to ask more money. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 339 
 
 The Chaikjian. Would you change the statute in regard to the food 
 schedule? 
 
 Mr. Taylor. I would allow steamers to get their supplies wher- 
 ever they wanted. A steamer is in a free-trade ocean. You can not 
 extend the protection principle to the ocean. It is free trade. 
 
 The Chairman. We can protect our own ships. 
 
 Mr. Tatlor. If you can get them to run. 
 
 Senator Mallory. The point I wish to get at is this: There is now 
 no restriction upon the employment on board an American ship of 
 seamen from anywhere, and yet the evidence that this Commission has 
 had laid before it in New York indicates that in certain ports, at least, 
 of the United States it is impossible to get sailors to ship aboard Amer- 
 ican vessels for anything like the wages that the same sailors would 
 accept aboard a foreign ship for the same voyage. 
 
 Mr. Taylor. That is true of Pacific coast ports, without question. 
 
 Senator Mallory. It is true, evidently, of the city of New York, 
 from the evidence we have had laid before us. I do not know that it 
 is so in Philadelphia. I do not think it is so in some other ports of 
 the country. Nevertheless, it is a fact that in certain ports of this 
 country there is a discrimination against American ships with respect 
 to sailors, notwithstanding the advantages in favor of American ships 
 as respects food. 
 
 Mr. Taylor. I take it it is a contest as between the coastwise appli- 
 cation for seamen and the deep sea, because we have no deep-sea trade 
 in American bottoms. 
 
 Senator Mallory. The American sailor has no protection; he is one 
 of the few laborers who receives no protection from the Government, 
 and yet that condition as to wages exists in certain ports. 
 
 Mr. Taylor. We have no ships now operating in the deep-sea trade. 
 Then there is another thing: The sailors may be Englishmen, and may 
 live in London or Liverpool and want to go back to their homes. You 
 do not know what reason they have for preferring a certain line to 
 another line. And as has been pointed out, we have had a good deal 
 of trouble with the boarding-house keepers. 
 
 Senator Mallory. Do you think the unions have anything to do 
 with it in cities like San Francisco and New York ? 
 
 Mr. Taylor. I think it has been shown that where they can corral 
 the thing they are doing it where the supply of labor is short, get- 
 ting all wiey can out of it. 
 
 Senator Lodge. You propose to get over the difference in the cost 
 of construction by free ships ? 
 
 Mr. Taylor. At first; the initial difference. 
 
 Senator Lodge. And then you propose to overcome the difference 
 in the expense with respect to ofiBcers and seamen by allowing tfie 
 ship to get its oflicers and seamen wherever it can ? 
 
 Mr. Taylor. Yes, sir. 
 
 Senator Lodge. And to relieve American vessels of the laws in 
 regard to victualing a ship? 
 
 Mr. Taylor. Yes. 
 
 Senator Lodge. How do you propose to meet the foreign subsidies? 
 
 Mr. Taylor. I make a distinction there. I think we ought to take 
 out the high-grade ship and treat it on a different plan, because it car- 
 ries the mails. 
 
340 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Senator Lodge. Having got the foreign ship on the Clyde at an 
 equal price with that of your competitor, and having got your officers 
 and crew on the same basis, and having got your operating expenses 
 down to the foreign level, you still have to meet the foreign subsidy. 
 
 Mr. Taylor. The mail subsidy. 
 
 WOULD SUBSIDIZE FOREIGN BUILT SHIPS. 
 
 Senator Lodge. I do not mean merely mail subsidies. I mean all 
 kinds of subsidies. France gives both mail and mercantile subsidies, 
 and construction bounties are given by some countries. How do you 
 propose to meet those ? Are 3'ou going to give subsidies and bounties 
 to foreign-built ships ^ 
 
 Mr. Taylor. That Americans own ? 
 
 Senator IjOdge. Yes. 
 
 Mr. Taylor. Yes. You want the American citizen to control the 
 boat, do you not? You want the ownership held here. You want to 
 put him on a plane of equality. 
 
 Senator Lodge. Ownership is one thing, but I think the employment 
 of American labor is very much of an element. 
 
 Mr. Taylor. If you add to the tonnage on the sea, will you not add 
 to the opportunities for employment? 
 
 The Chairman. Foreign employment. 
 
 Senator Lodge. Foreign employment. If you employ nothing but 
 foreign officers and foreign sailors, how do you add to the employment 
 of American labor? 
 
 Mr. Taylor. It does not follow that all of them should be foreign. 
 
 Senator Lodge. It does not follow, but it is probable. 
 
 Mr. Taylor. Is it not true that our captains, as a rule, are English- 
 men, who become naturalized in order to secure the higher pay ? The 
 law requires that our officers shall be Americans, and the Englishmen 
 accept naturalization as a part of the employment. 
 
 Senator Lodge. I was not aware that that is the case. 
 
 Mr. Taylor. I think you will find, if you inquire, that we tell the 
 English officer of skill, the man to whom we want to intrust our ship, 
 that he must become an American citizen and take out naturalization 
 papers. 
 
 Senator Lodge. That is not the point I want to get at. He becomes 
 a citizen at all exents. How do you propose to equalize the subsidies? 
 You have equalized operating expenses and construction costs by build- 
 ing your vessel abroad and maintaining it in a foreign port. How do 
 you propose to equalize the subsidies which foreign nations give? 
 
 Mr. Taylor. So far as I know it is chie% mail pay, given to large 
 steamers. 
 
 Senator Lodge. The English subsidies are mostly mail subsidies. 
 
 Mr. Taylor. The French subsidies have not been a success. With 
 the most enormous allowances their development has been very trifling. 
 
 Senator Lodge. It is not trifling; it has been considerable. But we 
 will take the Cunard Steamship Company, to which the British Gov- 
 ernment is advancing money — some four millions sterling, I think — at 
 a low rate of interest to build ships, and, practically, by the arrange- 
 ment of the subsidy, it amounts almost to a gift. Now, how are we 
 going to equal that? Is the American Government to give 120,000,000 
 to build four fast ships in English yards and to officer and man those 
 ships with Englishmen ? 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 341 
 
 Mr. Taylor. This high-grade ship, this cruiser, this 23-knot boat 
 has imposed upon it special requirements by the Government for 
 defense and also for passengers and mails. 1 liave not been discussing 
 that feature. I think it ought to be treated on its own merits. 
 
 Senator Lodge. I understand what you are getting at, which is the 
 equalization of conditions. I understand how you propose to equalize 
 two of the conditions. • What I am trying to ascertain is how you pro- 
 pose to equalize the third, the third condition being Government aid. 
 
 Mr. Taylor. I would classify the high-grade boats — the fast Ijoats 
 of the world — and put them on identical terms. 
 
 Senator Lodge. Would you give a Government subsidj- to a ship 
 built on the Clyde and manned by officers and men from anywhere^ 
 
 Mr. Taylor. Yes, sir, that is right, to start with. 
 
 The (Chairman. It is safe for this Commission to assume that you 
 leave out of your calculation entirely the possible rehabilitation of our 
 American ship^'ards. Am I correct in that? 
 
 Mr. Taylor. No, I do not say that. I think the result would be 
 that we would shortly have a greatly reduced price by railroads and 
 for steel supplies, to the same ,basis as that on which thej' sell for 
 export. 
 
 abandon the sea to foreigners. 
 
 The Chairman. But if you are going to buy ships abroad and then 
 equalize the conditions as to cost of operation and food supply, unless 
 you can go further and equalize American wages to the standard of 
 European or Asiatic wages, you are never going to build ships for the 
 foreign trade in American shipyards. I will say that that is the 
 problem, and a very difficult and complex one, which the Commission 
 is asked to work out. 
 
 Yours would be a very easy solution. This Commission could make 
 a report and settle the matter in five minutes by simply saying "We 
 abandon the field to foreigners, and Mr. Taylor has told us how to 
 do it." 
 
 Mr. Taylor. I think you had better abandon the field if the inten- 
 tion is to draw on Government moneys beyond these fast boats and to 
 extend aid to the general freight boat. 
 
 Senator Lodge. Are the English subsidies and those of other 
 nations given to foreign-built ships ? 
 
 Mr. Taylor. There is no necessity for it. 
 
 Senator Lodge. I am not talking about the necessity. If an English 
 company or a Germany company could get their boats built some- 
 where else more cheaply than in England or in Germany, dc those 
 Governments, under the provisions of the subsidj^ laws, permit the 
 subsidies to be given to such foreign-built boats ? 
 
 Mr. Taylor. Not that I am aware of. 
 
 Senator Lodge. No; they do not. Thej' require them to be built in 
 their own shipyards. 
 
 Senator Martin. Is it not a fact that England gi\'es no aid whatever 
 to an ocean freight carrier? 
 
 Mr. Taylor. That is correct as far as I know. I never heard of it. 
 
 Senator Martin. It is a fact. 
 
 Senator Lodge. Not absolutely. There are cases where she gives 
 mercantile subsidies. 
 
 Mr. Taylor. They are exceptional. 
 
342 HEAEINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 THE ENGLISH SUBSIDIES. 
 
 Senator Lodge. They give aid in this way. A mail subsidy is given 
 to a line — for instance, the Peninsula and Oriental Line. It has 14 
 ships earning mail subsidy, and it has 70 freight carriers in that line. 
 Of course in making up the accounts of the company the subsidy dis- 
 tributes itself over the whole number. 
 
 Senator Martin. Certainly; it is the same as we do in the case of 
 the Ward Line. We give subsidies to 5 ships, and they have 14 ships 
 which receive nothing. It enables them to maintain all 19 ships. They 
 get f 200, 000, which is a great help. However, 14 of the steamers 
 carry freight, and but 5 carry mail. 
 
 Mr. Tatlok. I have no objection, from the freight stajidpoint of 
 the contest, to high-speed mail steamships being subsidized, but what I 
 do ask is that we may have an opportunity at such ports as Philadel- 
 phia, where we are trying to deepen our river and maintain a share of 
 the lower-grade freight on cheaper steamers, to continue that business 
 as Americans under American law. 
 
 Senator Martin. Your plan of doing that is to have Congress pass a 
 law letting you buy your ships where you please and get your officers 
 and crew where you can get them cheapest, the ships to be used only 
 in the foreign trade ? 
 
 Mr. Taylor. Absolutely. It is simply to enable American capital 
 to own ships and compete with other capital. The Germans were 
 allowed that opportunity when they started their marine. They 
 bought largely of others. 
 
 war value of a merchant fleet. 
 
 Senator Mallort. Let me ask you one more question bearing on 
 that. I have listened with a great deal of interest to what j^ou have 
 said. I should like to know whether, in your opinion, it is necessary 
 for the United States to own a foreign-going marine ? 
 
 Mr. Taylor. Of what class? 
 
 Senator Mallort. Deep sea. 
 
 Mr. Taylor. High class? 
 
 Senator Mallory. No; freight carriers, like the English tramp 
 steamer. I wish to know whether you think it is eminently desirable 
 that the United States should have such a marine? 
 
 Mr. Taylor. It would be very useful in case of need in transporting 
 the bulky traffic. Such vessels would carry horses and army equip- 
 ment and food. They were found very essential in the South African 
 war, where an enormous transport fleet, aside from the fast boats, was 
 required to carry the material. 
 
 The Chairman. What line of steamships do you operate ? 
 
 Mr. Taylor. The Philadelphia Trans- Atlantic Line. 
 
 The Chairman. From here to Liverpool? 
 
 Mr. Taylor. From here to London. 
 
 The Chairman. Under the American flag? 
 
 Mr. Taylor. No; we could not afford to buy the boats. I applied 
 to the Messrs. Cramp. Nothing would have given me more pleasure 
 as a citizen than to have had boats for our line built here. But it was 
 absolutely impossible under the conditions. 
 
 The Chairman. So you availed yourself 
 
HEARINGS BEFOBE THE MERCHANT MARINE COMMISSTON. 343 
 
 Mr. Taylor. It is the only way. 
 
 The Chairman. Of the low cost of construction abroad, and now 
 you want to avail yourself of the low cost of operation by employing 
 foreigners? 
 
 Mr. Taylor. We have to charter the boats. We do not own them. 
 
 The Chairman. It is the same thing. 
 
 Mr. Taylor. I have prepared a communication on the subject which 
 I should like to read to the Commission. 
 
 The Chairman. You may do so. 
 
 Mr. Taylor. It is as follows: 
 
 Philadelphia, May ^^, 1901j,. 
 Committee on Revival of American Shipping, 
 (Mr. E. S. Cramp, Chairman), 
 
 21)8 Bourse Building^ Philadelphia. 
 
 Dear Sir: We have to acknowledge receipt of your favor of 21st, 
 advising of a meeting at the Philadelphia Board of Trade, May 26, of 
 the Merchant Marine Commission appointed by Congress, and of its 
 desire for suggestions as to what could or should be done by national 
 legislation to improve the condition of the American merchant marine. 
 We further note your committee's request for a prompt reply. 
 
 The subject-matter is one of great importance. The coastwise trade 
 between the various ports of the United States is protected through 
 legislation, limiting its control to vessels of American construction. 
 The commerce remaining — that is trading between the ports of one 
 nation with those of another — is carried on by vessels of all nationali- 
 ties, and may be readily grouped into general classes: 
 
 First. Regular services between two or more established ports, the 
 steamers trading therein being constructed to suit the especial require- 
 ments of the said ports and sailing on appointed schedule dates and 
 having the benefit of specially secured quay and dock facilities. 
 
 Second. Steamers belonging to what is known as the "tramp class," 
 built to trade in the general ports of the world, and securing cargoes 
 by charter or otherwise from one port to another as offerings are 
 made. 
 
 Again, the steamers in the regular services may be classified into (a) 
 ocean greyhounds, of the fastest speed, especially adapted to the carry- 
 ing of passengers, mails, and high-class and perishable freight, (b) 
 Composite freight and passenger boats, carrying passengers, mails, 
 and nigh-class freight, but several days slower than the "a" class. 
 (c) Freight boats, carrying cattle and general cargo only. 
 
 The steamers of the second, or tramp class include a motley aggre- 
 gation of all kinds and sizes of vessels with varying rates of speed, and 
 meet the requirements of the commercial world in supplying tonnage 
 for the cheapest possible movement of surpluses beyond the capacity 
 of regular services, and also in carrying freight to outports having no 
 regular ocean services. Their services are valuable in enabling full 
 or homogeneous cargoes — grain, coal, lumber, and other articles — to 
 be moved from port to port at minimum costs, the rates for such move- 
 ments varying according to the natural laws of supply and demand. 
 The cost of this tonnage varies from new ships built at the lowest cost 
 secured by competition down to old ships ready for the junk pile, and 
 in consequence it may be fairly assumed that any efforts by subsidy to 
 establish an American marine would probably be initiated with vessels 
 
344 HEARnsrr4R before the merchant marine commission. 
 
 constructed for u,sc undor the first clas.s. If thi.s assuniptioii is correct 
 we are confronted witli the fact that at the present time tliere is an 
 enormous oversupply of existing tonnage of high class, and in conse- 
 quence the supply of ocean room available is far in excess of the 
 amount of traffic offering, and many steamers of this class are tied up 
 doing nothing, awaiting more favorable conditions. 
 
 Again, these regular services have established terminal and other 
 facilities, and also secured relationships with shippers and consignees, 
 and this applies to all principal ports between the Gulf and Atlantic 
 seaboard and principal English and Continental ports. 
 
 The present depressed conditions would be relieved by large crops, 
 harvested in good condition and producing surpluses available for 
 export at prices in competition with other grain-producing countries, 
 thereby enabling the utilization of the excessive tonnage already on 
 hand. At the present time it is possible, owing to the surplus, to 
 purchase existing tonnage at greatly reduced prices, and to contract 
 for new tonnage in foreign yards at very low rates. 
 
 If the people desire that the American flag shall be carried at the 
 masthead of steameis engaged in foreign trade, the first ste]) toward 
 a practical solution, as 1 see it, would be the altei-ation of the present 
 navigation laws, enabling American citizens and corporations to pur- • 
 chase their ships in the lowest market and register them under the 
 American flag, and also to allow the supplies and crews to be shipped 
 under the same conditions as foreign owners. The next step would 
 be the recognition of the reciprocity principle in adjusting the tariff's, 
 thereby enabling steamers to cany an increased amount of inward or 
 return cargo. American capital, under these conditions, would take 
 advantage of the opportunities, whenever they offered in the judgment 
 of the parties promoting the enterprise, a fair opportunity for secur- 
 ing the capital and a fair return thereon. 
 
 If the country desires to "stand pat"' on the tariff and to allow the 
 present navigation laws to remain unaltered, I do not see how it can 
 expect to develop a successful and permanent American ownership in 
 steamers engaged in foreign trade by any artificial process of subsidy 
 from the United States Treasury. Any form of subsidy attempted 
 would be ver^' apt to result in favoritism, preventing more general 
 development, or, if made sufficiently tempting and general, in what 
 would practically amount to the foi-mation of companies solely for the 
 purpose of taking advantage of the pecuniary beneflts of the subsidy 
 legislation, viewing the matter from that standpoint without, perhaps, 
 sufficient regard to the ultimate ends desired of placing the trade upon 
 a permanent footing. 
 
 Yours, truly, F. W. Taylor. 
 
 STATEMENT OF DAVID S. STETSON. 
 
 David S. Stetson appeared before the Commission. 
 
 The Chairman. Kindly state to the Commission in what line of 
 business you are engaged. 
 
 Mr. Stetson. I am an American and my s^'mpathies are with 
 American shipping. My family have been in the vessel business since 
 1680. 
 
 The Chairman. What is j^our business? 
 
 Mr. Stetson. Ship broker and vessel owner. I feel that I wish to 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 345 
 
 indorse Captain Randle's suggestion for the improvement of Au:oric'an 
 tonnage; that is, a subsidy both to sail and steam. 
 
 The Chairman. Do you thinlv Mr. Taylor's formula, given a few 
 moments ago, would help you out any 'i 
 
 Mr. Stetson. No, indeed; I do not indorse a word Mr. Taylor said. 
 I am surprised to find that an American would get up and make such 
 a speech. 
 
 THE MATTEK OF ADVANCES. 
 
 By the laws which have been enacted by Congress regarding sailors, 
 we are hampered in being obliged to employ licensed mates and also in 
 not being allowed to pay advance money. So we are hampered very 
 badly in that line. It increases our wages fully 33 per cent. A vessel 
 under a foreign flag can pick up a crew where the captain chooses, 
 either through shipping masters or hoarding house keepers, and their 
 wages will be fully 33 per cent less than ours. Our wages now are about 
 $30 a month for sailors and from $45 to $65 for licensed mates, whereas 
 foreign vessels are paying $16 to $20 for the crew and $30 to $40 for 
 mates. 
 
 Senator Malloky. Are you speaking from the standpoint of Phila- 
 delphia i 
 
 Mr. Stetson. No; I am speaking of the entire trade — Philadelphia, 
 New York, Boston, and Baltimore. 
 
 Senator Mallory. The difl'erence is as between $16 to $20 and 
 
 Mr. Stetson. No; the difference is as between $20 and $30 for 
 sailors, and between $35 and $45 to $60 for mates. 
 
 Senator Malloky. Tell me why that is. 
 
 Mr. Stetson. The foreign vessel is enabled to go to a shipping 
 master and say, "1 want you to get me a crew." The shipping master 
 says, "What advance will you pay?" The shipmaster says, "I will 
 pay a month or a month and a half advance." The foreign vessel 
 immediatelj^ gets that crew for a third less, because we are not allowed 
 to pay advance. 
 
 Senator Mallory. Do you think it is all due to the shipping master 
 or boarding-house keeper? 
 
 Mr. Stetson. No; it is due to the sailor. It is due to both. 
 
 Senator Mallory. That is, in the foreign trade? 
 
 Mr. Stetson. In the foreign as well as the coastwise. We are 
 handicapped in Cuban and South American business. 
 
 Senator Mallory. Do you think if we repealed that law it would 
 make any difference in the wages paid our sailors? 
 
 Mr. Stetson. If we could pay advance wages, our wages would 
 decrease 33 per cent. Up to within five years we never knew what it 
 was to pay over $20 for a sailor, and the last four or five years we are 
 paying $30. 
 
 THE licensed MATES. . 
 
 With respect to the licensed-mate law, I will say that quite frequently 
 we are obliged to remain here four or five days waiting to get a licensed 
 mate. We sometimes have to telegraph to Boston, Baltimore, and 
 New York, and then at last the only relief we have had has been by 
 telegraphing or writing to Cortelyou asking permission to go without 
 a li(5ensed mate, and several times we have had that permission. If 
 
346 HEARINGS BEFORE TflE MERCHANT MARINE COMMISSION. 
 
 you do happen to go without a licensed mate and say "we will not 
 ship any mate," you are liable to a penalty. We did it on a vessel for 
 a short time, and the fine was |100, all of which, except $10, has since 
 been remitted. 
 
 Senator Mallory. Do you think the act has been of benefit to the 
 sailor himself? 
 
 Mr. Stetson. No; it has just been the reverse. 
 
 As a member of the committee of the Maritime Exchange, and also 
 as representing the Manufacturers' Club of Philadelphia, 1 feel that 
 the remedy must come from Congress, and I indorse the suggestion of 
 Captain Randle for the payment of a bounty of 5' cents per ton register 
 per 1,0D0 miles for all American-built vessels flying the American flag 
 under American register, both steam and sailing vessels, and in addition 
 thereto the repeal of some of the laws recently enacted regarding ves- 
 sels securing crews for manning the vessels. Under the law now we 
 are obliged to ship licensed mates for all vessels of 800 tons register 
 and over, which results in delay to vessels and an increase in wages of 
 fully 25 per cent over the unlicensed mate. The delay is caused by 
 scarcity of such mates. The law should be repealed forbidding the 
 payment of advance. Since that law has been in force wages of the 
 sailor have increased 33^ per cent. As proof of this statement, foreign 
 vessels can to-day secui'e sailors at $20 per month, and one month's 
 advance, whereas an American vessel can not secure a crew at less than 
 $30 per month, no advance being allowed under the law. If Congress 
 would only enact laws to protect our merchant marine as they have 
 protected the manufacturer, the merchant marine would immediately 
 increase. 
 
 STATEMENT OF HENRY E. EDMUNDS. 
 
 Heniy R. Edmunds appeared before the Commission. 
 
 The Chairman. In what line of business are 3'ou engaged? 
 
 Mr. Edmunds. 1 am an attorney. I have been an owner of vessels, 
 both foreign and domestic, for the last forty years. I appear here at 
 the request of the gentlemen who sent the circulars around, to answer 
 such questions as the Commission may wish to ask me. 
 
 I have been considering the subject lately — in the last two or three 
 days — and have come to a conclusion which may not be wise, and. which 
 maj' not be agreeable to the Commission, but it is my own personal 
 sentiment. That there is a decrease in American vessels engaged in 
 American commerce, both foreign and domestic, there can be no doubt. 
 I have seen this very notably in my own time. So far as domestic 
 vessels are concerned, or those engaged in domestic trade, it probably 
 is the result of railroads. They get to points which we used to reach 
 by vessels. That'can not very well be helped. 
 
 So far as foreign commerce is concerned, we are handicapped in two 
 ways. First, by the expense of running the vessel, in which expense 
 I include the wages of the sailor, and also by the cost of building the 
 ship. Whether the United States would be justified in spending 
 money in the way of a subsidy or bounty to the builder or the owner 
 of a ship is a question for this Commission to decide, and it is very 
 much, it seems to me, in the nature of a tarifi law. You do protect 
 manufacturers. You do not protect the man who has the arid land 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 347 
 
 out West which he wants to have irrigated, and who has the same 
 right probably, but not so extensivelj', perhaps, to ask the Govern- 
 ment to help him to water the land 
 
 The Chairman. That is what we actually did in the last Congress. 
 
 Senator Lodge. That is what the Government is doing now. 
 
 Mr. Edmunds. If the Government did that in the last Congress then 
 it is time to step up and help us. [Applause.] I felt a little uneasy 
 on the subject of irrigation, because I thought those people were enti- 
 tled to some help, and 1 thought they had about the same right to 
 claim assistance that we had to have our ships built in this way by 
 subsidies. 
 
 A SUBSIDY SYSTEM BEST. 
 
 It seems to me a subsidy system is less objectionable than any other 
 method that can be conceived. The difficulty will be to get up such a 
 schedule of subsidies — such a system as will do exact justice to ves- 
 sels of all kinds. In the first place, I do not believe you can reach by 
 a subsidy the question of wages. I. do not see how that is possible. 
 The difficulty in the matter of wages in the United States, in my judg- 
 ment, is that we have not the sailors and we have not the opportunity 
 to make sailors. 
 
 We have very few places in the United States where there are school- 
 ships. We want more school-ships. We want sailors. We want 
 intelligent sailors. Nearly half of the American sailors on the Atlantic 
 seaboard are negroes. Take the coastwise trade and you will find if 
 you want American sailors you have to go down South and get negroes. 
 Otherwise you must take Norwegians and Swedes and Italians and 
 Germans, or anybody you can get. 
 
 Under our laws the officers must be Americans and a portion of the 
 crew must be Americans. If you want American sailors, and plenty 
 of them, you must induce American boys to become sailors. There 
 are plenty of them who would take it up if they had the opportunity 
 to get the education. We turn out from our school-ships to some 
 extent men who are skillful navigators. It is a very wise policy that 
 we should have people of that class. 
 
 A subsidy in my judgment diflfers from the tariff very little. The 
 tariff the community at large pays, or the man who uses the goods — 
 the consumer — pays. The subsidy is paid by the Government — all of 
 the people. What is the difference ? It comes out of the same pocket. 
 If you have a differential tariff, what do you do? You break down 
 your tariff; and 1 as a Republican do not want to see that done. I 
 want to keep it just as it is. You will break down your tariff the 
 moment you put on differential duties. With a subsidy the only 
 thing you do is to add to the opportunity of the shipbuilder, and you 
 benefit the shipowner by adding to the value of the ship. I think the 
 Government would be justified in doing that, inasmuch as they have 
 done it in manufacturing, only in another shape. That is all I care 
 to say. I could tell you some things about the navigation laws, but 
 the time for recess has come. 
 
 Senator Penrose. The Commisison would be very glad to hear you 
 on that point. 
 
848 HEAEITSroa BEFOEE THE MERCHANT MARINE COMMISSION. 
 
 FORBIDDING AN ADVANCE. 
 
 Mr. Edmunds. I think the difficulty is this: When you pay the sailor 
 advance money, he does not go aboard. That is the trouble. He gets 
 his money, or the boarding-house keeper gets it, and the sailor does not 
 turn up. In my official capacity as United States commissioner I have 
 had experience with this matter for a great many years — twenty or 
 thirty years. Sailors after they get their advance money do not turn 
 up. They put it in their pockets, or the boarding-house keeper gets 
 it, and a sailor may ship three or four times in the same city. It is 
 very difficult to say whether that ought to be abolished or not. Under 
 our present law a man can not get his advance. Under the circum- 
 stances I think it is a very nice question whether we ought to dicker 
 at all with the navigation law with respect to the sailor. We have 
 tried to do the best we can for him. The trouble in the United States — 
 I have often thought of it, and I do not know whether there is any law 
 in this or not — is that we live too well. We want to live well.' That 
 is why there is a tide of immigration to this country every year from 
 abroad. Those people expect to do better here and to live better, and 
 get better wages, and we expect them to do it. And we, in this coun- 
 try, live better than any people on the face of the earth. 
 
 Senator Martin. If the law forbidding an advance to a sailor on an 
 American vessel is to remain in force, is there any reason why it 
 should not be made to apply to foreign vessels as well ? 
 
 include foreign VESSELS ALSO. 
 
 Mr. Edmunds. None at all. 
 
 Senator Martin. Do you see any objection to it? 
 
 Mr. Edmunds. No, sir. 
 
 Senator Martin. I mean to extending it to foreign vessels if it is to 
 be continued? 
 
 Mr. Edmunds. I see no objection to extending it. 
 
 Senator Martin. Do you see any good that would come from 
 extending it? 
 
 Mr. Edmunds. The sailor is a difficult man to handle. He is a man 
 without education. 
 
 Senator Martin. But ought not all sailors to be handled under the 
 same rule? 
 
 Mr. Edmunds. Yes. 
 
 Senator Martin. Should not the sailor be under the same rule with 
 respect to a foreign vessel ? 
 
 Mr. Edmunds. We can not do it as to a foreign vessel. 
 
 Senator Martin. Why not? Is there any reason why we can not 
 pass a law to control a foreign shipmaster while he is in our port? 
 
 Mr. Edmunds. You are butting up against the treaty. 
 
 Senator Martin. I am not aware of any treaty that compels us to 
 give a greater privilege to an alien than to our own citizen. 
 
 Mr. Edmunds. No. The Constitution merely says: 
 
 The citizens of each State shall be entitled to all privileges and immunities of citi- 
 zens in the several States. 
 
 If you were to pass a law forbidding the payment of advance money 
 to foreign sailoi's shipped in foreign vessels, in American ports, some 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 349 
 
 nation would retaliate. However, I do not see that it would hurt us 
 any if it did. 1 think, possibly, it would be a good thing all around. 
 The law ought to be in such form, however, that a man maj- leave an 
 order, if he so desires, for a certain amount to be sent home, so that 
 his family can enjoy it. 
 
 Senator Penrose. What do you think about the suggestion with 
 respect to the shipping commissioner, which was made bj- one of the 
 gentlemen here this morning? 
 
 Mr. Edmunds. What is that? 
 
 Senator Penrose. To extend the power of the shipping commissioner 
 so that he may hold money for sailors, to be sent to their families. 
 
 Mr. Edmunds. I see no objection to that. However, it all depends 
 upon the character of the man. 
 
 Senator Lodge. Do you think the law prohibiting an advance is a 
 good one? 
 
 Mr. Edmunds. Yes, I do. 
 
 Senator Lodge. You think it ought not to be repealed ? 
 
 Mr. Edmunds. I think it is a good law. 1 think we should be very 
 much embarrassed in this port if we had not such a law. You can not 
 get a man to go aboard a vessel after he has your money in his pocket 
 and is out over night. Half of the men we ship here, if you pay them 
 in advance and leave them ashore over night, will not turn up in the 
 morning, or their money is all gone. That is no good. It is no good 
 to the sailor and it does not help us to get anybody. 
 
 STATEMENT OF THOMAS WINSMORE. 
 
 Thomas Winsmore appeared before the Commission. 
 
 The Chairman. Mr. Winsmore, please state to the Commission your 
 business. 
 
 Mr. Winsmore. I am a vessel owner and ship chandler. 
 
 The Chairman. Proceed with j-our statement. 
 
 Mr. Winsmore. Mr. Chairman and gentlemen, representing as I do 
 the coasting trade of Philadelphia, being largely interested in it, own- 
 ing a large interest in a great many vessels, there are a number of 
 things that I think could be arranged and changed, by recommendation 
 of your Commission, which would be of benefit. 
 
 The first is an entire revision of the statutes of the United States 
 relating to this subject, for the laws under which we are operating are 
 old and obsolete, a good many of them having been passed in 1700, 
 and they certainly are not meeting the requirements of to-day. The 
 coasting ti-ade is laboring under onerous charges made by different 
 States, more particularly on account of pilotage, which is an onerous 
 charge and an expensive one, and it is one which I think the Commis- 
 sion could handle with a great deal of benefit to our coasting trade. 
 
 Another is the question of sailors. We have great difficulties. The 
 law as it stands provides that we must have in certain sized vessels 
 licensed captains and licensed mates and seamen. We have a great 
 deal of difficulty in getting the seamen and a great deal of difficulty in 
 getting the mates. There are in Philadelphia, and also in other cities, 
 a large number of men who are probably competent to take an exami- 
 nation, but they seem to fear it and will not do it. The consequence 
 is that the few who are licensed as mates impose upon us by high wages 
 
350 HEARIlSrGS BEFORE THE MEBCHANT MARINE COMMISSION. 
 
 and bad conduct, and a good many of them who hold these certificates, 
 simply because they are capable of holding them, are men whom we 
 would not trust if we were not compelled by law to take them. 
 
 EXTEND POWERS OF SHIPPING COMMISSIONER. 
 
 We think the powers of the United States shipping commissioner 
 should be extended. He should be given power. Now he is a non- 
 entity. We take our men to him for shipment. He signs them. 
 There his power stops. If they want to go aboard they go; if they 
 do not they do not. There is no power at present to make them go. 
 
 When it comes to a question of wages upon the completion of the voy- 
 age and the settlement of any dispute, he has very little, if any, power. 
 He has no power, it seems to me, that he can exercise which is of bene- 
 fit either to us or to the sailor. If there is a question, probably it is 
 left to the United States commissioner, and that is a great deal of 
 trouble and it is expensive for us all. Those are questions which I 
 have no doubt you have heard of in the other cities to which you have 
 been, and they could be very easily adjusted, and their adjustment 
 would be of great benefit to us. 
 
 There is another matter in regard to the subsidy. I am an owner in 
 large vessels and would only be too glad to take part in the foreign 
 trade if it were possible, but it is not from the fact that freights are 
 so low. Like Captain Randle, I am of the opinion that a per mile per 
 ton bounty would be of great benefit to us as owners and a great benefit 
 to the shipbuilding industry of the United States. But very much 
 unlike some other gentlemen, I would never think but that they should 
 be officered by American citizens, and I, as an American, would prefer 
 to have them manned by Americans; but that is almost impossible. As 
 was remarked by one gentleman, now nearly all of our coasting sailors, 
 or the large percentage at least, are colored. They are good men. We 
 have very little trouble with them. 
 
 Only the unions are interfering. The unions are made up largely 
 of men who are not citizens of the United States, or a very large num- 
 ber of them are not, and without those unions and if the colored men 
 were let alone, we would have just as good men as go aboard a vessel out 
 of the colored men of the United States. [Applause.] That is one of 
 the things that I think could be very easily adjusted also. 
 
 I hope you gentlemen, as you go to the difi:'erent cities and see the 
 requirements of the different cities, will give us some relief. We have 
 appeared before you in Congress. We have asked relief from you 
 time and again, but we do not get much. It seems to me it is a con- 
 traction instead of an extension of relief. We did at one time have 
 shipping commissioners who were commissioners. We had in Phila- 
 delphia one of the best— Judge Young — but the power has been taken 
 away from them until now they are powerless. 
 
 I do not know that I have anything else to say. I will file this 
 paper: 
 
 It appears to me that the only feasible method of encouraging the 
 merchant marine engaged in foreign commerce is to subsidize all 
 vessels so engaged on some equitable basis. In the United States the 
 mechanic desires to live better than his foreign brother, hence so 
 much immigration. To live better he must be better paid, and thus 
 his product becomes more expensive, and this product thus produced 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 351 
 
 must contend for existence with the product of other nations not so 
 expensively produced. How then can this inequality be best reme- 
 died or overcome? If we discriminate by duties we will perhaps 
 affect our treaties, and nations discriminated against will be disposed 
 to retaliate. If we subsidize in favor of our ships, other industries 
 will perhaps conceive themselves neglected if not receiving an equal 
 encouragement. 
 
 So that it is well in the first instance to be satisfied whether the for- 
 eign carrying trade is of sufficient paramount importance to justify 
 special legislation in its behalf. To those who reside or do business 
 by the seaboard there would seem to be no question of the special 
 importance of encouraging the building and sailing of ships, but the 
 Western man who owns a tract of arid land, unprofitable by reason 
 of its character, will not be able to understand why Congress should 
 not assist him to irrigate. I consider, however, the difference to be 
 that one is of national importance as enabling us to keep abreast of 
 other nations upon the ocean and its traffic, and the other is largely 
 individual. 
 
 As it is confessedly more expensive not only to build but to man 
 American ships than it is to build and man those of foreign countries, it 
 naturally follows that unless something is done, some action taken by 
 Congress, in a very little while there will be no American-built ships. 
 Would such a result be as great a disaster as the neglect to subsidize 
 the western man's arid land? I think it would not be much credit to 
 our country to be known as the nation without merchant ships. I 
 therefore take it for granted that Congress desires to assist the mer- 
 chant marine, and now only desires to ascertain how this may best be 
 accomplished. 
 
 I can not think that any system can be entertained more equitable 
 or more sure in result than a so-called subsidy of so much per ton per 
 mile. This would, of course, increase the value of the ship and would 
 not affect the price of the commodity. There would be no need of the 
 disarrangement of the tariff' or our treaties. A reduction or abolition 
 of the duty on articles carried in American bottoms would result, 
 among other things, in an increase in the number and amount of car- 
 goes carried and a consequent reduction of income received from the 
 teriff and to a large and increasing extent reduce the opportunity for 
 competition between home and foreign manufactures, while a subsidy 
 to ships would result in retaining intact the tariff and the revenue 
 obtained therefrom, as well as protect the home manufacturer. 
 
 A subsidy is in its effect a tariff. In the case of a tariff the people 
 pay — in the case of a subsidy the government of the people pay. In 
 both cases the value of the thing is increased and business and trade are 
 more extended. Both are a protection to home industries. Whatever 
 encourages the use of capital benefits the workingman, and that which 
 benefits nim affects the community and the country. 
 Very truly, 
 
 Henry R. Edmunds. 
 
 The Chairman. Gentlemen, we have had a most delightful interview 
 this morning, and we will now take a recess until 2.30 o'clock, when 
 the session will be resumed. 
 
 I wish to say that under the statute creating this Commission we 
 feel it not only our duty but our pleasure to hear practical men, men 
 who have shipped before the mast, representatives of labor as well as 
 
H52 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 representatives of the shipbuilding interest, and if there are such gen- 
 tlemen who wish to be heard the Commission will be glad to give them 
 the opportunity to submit their views. 
 
 Thereupon, at 1 o'clock and 15 minutes p. m., the Commission 
 took a recess until 2.30 o'clock p. m. 
 
 AFTER RECESS. 
 
 At the expiration of the recess the Commission resumed its session. 
 
 STATEMENT OF CHARLES H. CEAMP. 
 
 Charles H. Cramp, of the William Cramp & Sons' Ship and Engine 
 Building Company, appeared before the Commission. 
 
 The Chairman. Mr. Cramp, we shall be glad to hear any statement 
 you may care to make. 
 
 Mr. Cramp. I have a communication which I will read: 
 
 Philadelphia, May 25, 190 J^.. 
 The CoMMissiox on Revival of American Shipping, 
 
 No. 2JiB The JBoiirse, Philadelphia., Pa. 
 
 Gentlemen: I have recei\'ed your letter of May 20 announcing 
 that I had been selected "to appear before the Merchant Marine Com- 
 mission for the purpose of giving your views as to the character and 
 kind of national legislative assistance needed to reinstate the mer- 
 cantile marine of this countiy in the position which it once held," 
 stating further that "the Commission is fully aware of the difficulties 
 under which American vessels now labor," and that it "does not 
 need any information on the subject of the increased cost of building 
 or running an American vessel in competition with foreign vessels;" 
 but has asked "particularly for suggestions as to the method of 
 remedying the disabilities which now exist." 
 
 I find that your request for my views as "to the method of remedy- 
 ing the disabilities that now exist" is a difficult one for me to handle, 
 having in mind the experiences of thirty years' continuous application 
 to Congress for assistance. 
 
 A committee composed principally of shipbuilders and shipping 
 merchants, about a dozen in number, appeared before a select com- 
 mittee of the House of Representatives, John Lynch, chairman, dur- 
 ing the fall and winter of 1869. This committee presented a report 
 on the "Causes of the reduction of American tonnage," February 17, 
 1870. 
 
 DIVERSE VIEWS OF SHII'BUILDERS. 
 
 The opinions of the various members composing that committee of 
 shipping men were of the most diverse and conflicting character, as 
 will be seen by an examination pf Mr. Lynch's report. Some were in 
 favor of absolute free trade, some for the introduction of free mate- 
 rials that went into ship construction, and some went as far as advo- 
 cating the abolition of the navigation laws — a free-ship law, etc. 
 
 In the end Mr. Lynch advised the committee to go home and remain 
 there until they could present some plan that they could all agree on 
 and which would commend itself to Congressional approval. Since 
 that time 1 have been in favor of every plan that the committees would 
 
HEARIKGS BEFORE THE MEKOHANT MARINE OOltMISSION. 353 
 
 consider of sufficient merit to convince Congress of the propriety of 
 rendering aid to the shipping business. 
 
 The principal advocates of free material and the abolition of a pro- 
 tective tariflf became convinced that they were wrong to press their 
 views, and ultimately became protectionists. Some of my views in 
 other directions have also undergone a change since that time. 
 
 The principal advocates of free trade in raw materials then were 
 William H. Webb, John Roach, of New York, and Franklin W. Smith, 
 of Boston. They found that special legislation for a single industry 
 could not be entertained for a moment, and particularly at a time when 
 the friends of protection to American industries were very much in 
 evidence in exploiting their measures. These three gentlemen became 
 protectionists in the sense of the great expounder of protection, Henry 
 C. Carey. 
 
 Impressed with the advice of Mr. Lynch, I have always advocated 
 the majority views of the shipbuilding and shipowning interests as 
 they were from time to time modified to meet the views of the friends 
 of shipping interests in Congress — subsidies for carrying mails and 
 bounties on all ship construction. Discriminating duties have been 
 advocated and have failed. 
 
 As the assistance in the way of subsidies and bounties was attacked 
 as a direct inroad into the Treasury of the United States, it met with 
 oppooition from members who were always opposed to that kind of 
 legislation and who looked on it as a scheme of special legislation. The 
 foreign shipowner was on the same side, but from interested motives. 
 
 PROMISES UNFULFILLED. 
 
 I have in mind at the same time that the great promoters of protec- 
 tive legislation time and time again assured the representatives of the 
 shipping interests that when they perfected their scheme of protection 
 they would take care of us. These promises were made at the begi nning 
 to Messrs. Webb, Roach, and Smith, and were kept up continuously 
 since that time, but when our various propositions came before Congress 
 they were found to be conspicuously obstructive and absent. 
 
 The method of levying discriminating duties advocated by Senator 
 Elkins and others appeals to me as being one of the best means of 
 "remedying the disabilities which now exist" and superior to many 
 schemes heretofore proposed, as it seems to meet some of the objec- 
 tions urged against other methods. This plan, however, has its 
 opponents. 
 
 The objections urged against this method are that it would be in 
 violation of certain commercial treaties entered into with Great Britain 
 and other countries, and that it would be necessary to revoke these 
 treaties. 
 
 THE ELKINS PROPOSITION. 
 
 Senator Elkins, in his speech delivered in the Senate of the United 
 States April 5, 1897, in favor of discriminating duties, refers to 
 "commercial treaties" with other countries in the following able 
 manner: 
 
 "When the United States wishes to restore its shipping and become 
 independent on sea as on land, a treaty with England, covered with 
 the dust of nearly a century, is brought forth, and we are solemnly 
 3a— 04 23 
 
354 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 told its sacred provisions must not be violated, and we must remain 
 bound hand and foot, powerless to lielp ourselves, though what is pro- 
 posed is right and proper and would benefit our interests. No treaty 
 should stand in the way of our having what belongs to us as a matter 
 of right and having our fair share of the carrying trade of the world. 
 Of course no treaty should be violated as long as it is in force, but 
 this bill expressly proposes in terms to abrogate all treaties or parts 
 of treaties in conflict with the provisions of the bill. Among the 
 ways a treaty may be terminated or abrogated one is by act of Con- 
 gress. This was in contemplation of the contracting powers when 
 these treaties were entered into and ratified. 
 
 " The bill under consideration proposes to abrogate only parts of 
 the treaties. But the question arises, How about the other provi- 
 sions? Will they remain in force or not? Is the abrogation by one 
 of the contracting powers of a clause, or a part of a treatj', without 
 the consent of the other an abrogation of the whole treaty? It is not 
 necessary to discuss this question, because if the act abrogates all of 
 these treaties, it would be far better for the United States than con- 
 tinuing the policy of maritime reciprocity. 
 
 "Under these treaties providing maritime recipi'ocity American 
 shipping on the high seas has declined." 
 
 TREATIES CAN BE ABROGATED. 
 
 After furnishing a list of thirty-nine countries where these "com- 
 mercial treaties" existed, all resulting from our act of 1828, he goes 
 on to say : 
 
 "In entering into the treaties providing for maritime reciprocity the 
 United States abandoned discriminating duties, which was the greatest 
 protection American shipping ever enjoyed, and under which it pros- 
 pered as it never has since. The true intent and meaning of these 
 treaties was that as between the contracting powers ocean carrying 
 should be free and reciprocal and in effect put upon an equal footing. 
 The United States has observed the spirit of these treaties, and has 
 rendered but little or no aid to take the place of the protection enjoyed 
 under discriminating duties. Other nations, especially Great Britain, 
 France, Germany, and Italy, have not observed the spirit of the trea- 
 ties, but increased their subsidies and mail pay to ships and adopted 
 other forms of aid to build up and protect their shipping. These 
 treaties are and have been a detriment to the United States, and have 
 only served foreign powers. They take from us as a nation and a 
 people and give nothing in return. They are one-sided in their opera- 
 tions, against American interests, and should be abrogated. All of 
 them contain a provision that they may be abrogated by giving one 
 year's notice. If this bill becomes a law it would be the duty of the 
 President to give notice of the abrogation of that part of the treaty in 
 conflict with the act. With this in vieAv, and for other reasons, the act 
 is to take effect fifteen months after its approval. The treaties made 
 prior to 1828 contain provisions by which they lapse by time unless 
 renewed." 
 
 XO RETALIATION NEED BE FEARED. 
 
 It IS urged that the revocation of these treaties would be harsh and 
 unfriendly, and would entail difficulties and losses of stupendous 
 moment, etc. ; and that it would lead to acts of retaliation involving dis- 
 
HEARINGS BEFORE THE MBROHAUT MARINE COMMISSION. 355 
 
 astrous consequences, etc. The argument that foreign nations would 
 retaliate will not hold, because no nation has attempted with any suc- 
 cess to enact such retaliating tariflf laws as against ours; they would 
 get tired of that sort of thing. 
 
 An investigation will show that other countries. Great Britain in 
 particular, have never refrained from the enactment of any law if their 
 commercial prosperity was about to be impaired or assailed. Thej"^ 
 were never affected by the self-abnegation and self-abasement and 
 thin-skinned delicacy that have been the policy of the treaty makers 
 of our country. 
 
 We never made a treaty of any moment that was not particularly 
 one-sided and against us, and if these small treaties above referred to 
 were to be carefully examined and the facts known, it will be found 
 that they are in the same boat. 
 
 In view of the fact that all of the methods heretofore proposed to 
 relieve us of the "disabilities that now exist" have been met with 
 objections, it is difficult for me to make any particular " suggestions " 
 in that direction, as I am sure that a plan of celestial origin would 
 meet with scores of objections; in fact the more meritorious the pro- 
 ject may be the greater the objections urged against it. 
 
 THE DIFFICULTIES IN OUR WAY. 
 
 1 find it difficult to take up this questien without some reference to 
 the disabilities we labor under in the prosecution of our business: 
 First, the higher first cost of ships due to higher priced materials 
 and wages; second, the greater cost in operating the ship due to 
 higher salaries, wages and upkeep; third, the direct and indirect 
 assistance awarded the shipowner in foreign countries; and fourth, 
 the lack of knowledge in operating the steamship lines due to the fact 
 that there are but a limited number of people in the business who 
 have had that sort of training. This last disadvantage is a very 
 important one, as I consider it indispensable for the successful prosecu- 
 tion of any business that the operators should have had exhaustive 
 training in that line. 
 
 The second and third items, as to greater cost in operating American 
 ships and as to the assistance afforded by foreign nations to their own 
 lines, have been fully shown time and time again in the speeches of 
 Senators Frye, Elkins, and others, and 1 can not see how anyone 
 could have the temerity to dispute the facts set forth therein. 
 
 I do not think that I would be doing my duty toward all interested 
 in the shipping industries without calling attention to the active and 
 direct hostility on the part of Great Britain to our shipbuilding and 
 shipowning interests in continuous operation since 1783. 
 
 I may say here that I do not think that Congressional assistance 
 should be afforded to the extent of making up the apparent difference 
 in the cost of labor and materials and in the running expenses, etc. 
 There are many reasons in our favor that would reduce the percent- 
 age of difference and that show that assistance similar to that proposed 
 in Senate bill No. 2154 introduced by Senator Lodge, December 8, 
 1903, would be sufficient. 
 
 I should like to have printed as a part of my remarks the copy of 
 the bill which I have here. 
 
356 HEAKINGS BEFOBE THE MEBCHANT MABINB COMMISSION. 
 
 The bill referred to is as follows: 
 
 [S. 2154, Fifty-eighth Congress, sei^ond session.] 
 
 IN THE SENATE OE THE UNITED STATES. 
 
 December 8, 1903. 
 
 Mr. Lodge introduced the following bill; which was read twice and referred to the 
 
 Committee on Commerce. 
 
 A BILL To regulate commerce with foreign nations, to induce the preferable employ- 
 ment of American ships, to extend the postal service by mail and naval steamers, 
 and to promote intercourse with foreign countries. 
 
 Be it enacted iy the Senate and House of Representatives of tlie United 
 States of Aitierica in Congress assembled, That the statute law in regard 
 to the duties of tonnage, in respect to the tariff on importations of 
 goods, wares, and merchandise, and in relation to the ocean mail serv- 
 ice in force on the day when this Act shall be approved, be, and the 
 same is hereby, supplemented and amended as follows: 
 
 Fart I. — Tonnage duties. 
 
 Section 1. That a duty of one dollar per ton on the gross admeas- 
 urement, in addition to the regular dutj^ imposed on tonnage by law, 
 shall be levied and collected from every vessel not of the United States 
 that shall arrive with merchandise, passengers, or mails, to be landed 
 in the United States from a country, its colony or possession, to which 
 said vessel does not belong. 
 
 Sec. 2. That a duty of fifty cents per ton on the gross admeasm'e- 
 ment, in addition to the regular duty imposed on tonnage by law, shall 
 be levied and collected from every vessel not of the United States 
 that shall arrive in ballast or without merchandise or passengers to be 
 landed in the United States from a country, its colony or possession, 
 to which said vessel does not belong. 
 
 Sec. 3. That a duty of twenty-five cents per ton on the gross 
 admeasurement, in addition to the regular duty imposed on tonnage 
 by law, shall be levied and collected from every vessel not of the 
 United States that shall arrive in ballast or with merchandise or pas- 
 sengers in a proportion less than one-fourth of her capacity for the 
 same from the country, its colony or possession, to which said vessel 
 may belong; but every vessel coming direct from her own country, 
 its colony or possession, with merchandise or .passengers in excess of 
 one-fourth of her capacity for the same to be landed in the United 
 States shall not be subject to an additional or extra tonnage duty 
 unless the country from which she comes direct charges an additional 
 or extra tonnage duty to vessels of the United States, in which case 
 the extra duty per ton of the vessel's country shall be added to the 
 extra duty per ton of our country, and the sum so found shall be the 
 full charge per ton for additional or extra duty to be collected. Sur- 
 veyors ot tonnage shall certify the proportion of carrying capacity 
 occupied by passengers or freight. 
 
 Sec. 4. That a duty of two dollars per ton on the gross admeasure- 
 ment, in addition to the regular duty imposed on tonnage by law, 
 shall be levied and collected from every vessel not of the United 
 
HEAKINGS BEFOEE THE MERCHANT MARINE COMMISSION. 357 
 
 ytates that shall arrive from a country not her own under engagement 
 to load for another country not her own, or that shall effect such 
 engagement after arrival, and clear for such voyage, there being one 
 or more vessels of American registry in port listed' at the custom- 
 house as ready to engage for the same or a similar voyage; and after 
 January first, anno Domini nineteen hundred and six, every vessel not 
 of the United States in the receipt of a navigation bounty that shall 
 have made or that shall make such an engagement, and clear on such 
 voyage, shall pay on said clearance an additional duty of four dollars 
 per ton in lieu of two dollars as aforesaid. 
 
 Sec. 5. That a tonnage duty of fifty cents per ton on the gross 
 admeasurement, in addition to the regular duty imposed on tonnage 
 by law, shall be levied and collected from every vessel that shall enter 
 a port of the United States, either with or without cargo, passengers, 
 or mails, if she has stopped on her way at a port of a country not her 
 own for the purpose of i-eceiving merchandise, passengers, or mails, 
 to be landed in the United States, unless said vessel shall have been 
 built in the United States. 
 
 Sec. 6. That a duty, to be termed light tax, of five cents per ton on 
 the gross admeasurement of every merchant vessel not of the United 
 States that shall enter a port of the United States shall be levied and 
 collected on clearance for sea, unless in cases where any such vessel 
 shall clear in ballast or shall have been built in the United States. 
 
 Part II. — Tariff duties. 
 
 Sec. 7. That a rebate of tariff duties shall be allowed and deducted 
 on all foreign goods, wares, and merchandise to the extent of five per 
 centum ad valorem in cases where the specific and ad valorem duties 
 together amount to less than twenty -five per centum of the value of 
 the articles, and to the extent of ten per centum in cases where the 
 specific and ad valorem duties together amount to more than twenty- 
 five per centum of the wholesale value of the articles in the market 
 of the port where the same may be brought in by a vessel of the 
 United States. And in cases where minimum or reciprocity duties 
 are imposed by tariff law on goods, wares, and merchandise imported, 
 a rebate shall be allowed and deducted to the extent of two and a half 
 per centum ad valorem in cases where the specific and ad valorem 
 duties together amount to less than twenty per centum of the value 
 of the articles, and to the extent of five per centum ad valorem in 
 cases where the specific and ad valorem duties together amount to 
 more than twenty per centum of the wholesale value of the articles in 
 the market of the port where the same may be brought in by a vessel 
 of the United States. 
 
 Sec. 8. That no other or higher duties than those imposed as regu- 
 lar by tariff law shall be levied, collected, or paid on any goods, wares, 
 or merchandise imported direct by a vessel of the country, its colony 
 or possession, whicn produced the same, or of a countr}^ through which 
 said merchandise necessarily passed to reach a market; but on all 
 goods, wares, and merchandise imported direct by a vessel not of the 
 United States and not belonging to the country, its colony or possession, 
 where said goods, wares, and merchandise were produced an addi- 
 tional duty of ten per centum ad valorem shall be levied, collected, and 
 paid; and on all goods, wares, and merchandise imported indirect by 
 
358 HEABINGS BEFORE THE MEBCHANT MARINE COMMISSION. 
 
 a vessel not of the United States from any country, its colony or 
 possession, not that of the production and original exportation of said 
 goods, wares, and merchandise, the additional duty as aforesaid shall be 
 fifteen per centum ad valorem. And in cases where no duties are 
 imposed by tariff law on certain goods, wares, and merchandise 
 imported, and the same have been brought -in by a vessel not of the 
 United States direct from its own country, colony or possession, 
 where the same were produced, there shall be levied, collected, and 
 paid a duty of four per centum ad valorem; but if such goods, wares, 
 and merchandise shall be brought direct from a country to which the 
 importing vessel does not belong, but which was the place of produc- 
 tion, then the duty as aforesaid shall be eight per centum ad valorem ; 
 but if such goods, wares, and merchandise so imported be brought 
 from a country that did not produce the same, then and in that case 
 the duty as aforesaid shall be twelve per centum ad valorem, valued 
 in the mai'ket of the port of entry. In cases where minimum or 
 reciprocity duties are imposed by tariff law on goods, wares, and 
 merchandise imported there shall be levied, collected, and paid full 
 rates of duty, if the same shall be brought in by vessels not of the 
 United States or not of the reciprocating country from which such 
 goods, wares, and merchandise have been exported; or if the same, 
 not being the gi-owth, production, or manufacture of a country con- 
 tiguous to the United States, shall be brought across the line from 
 such country. And the additional duties imposed under this section 
 shall apply also to all cases where goods, wares, and merchandise 
 shall have been transferred from a foreign vessel or land vehicle at 
 any place to a vessel or land vehicle of the United States for the 
 purpose of convenience or of evading the provisions of this Act. 
 
 Sec. 9. That a duty of twenty per centum ad valorem, in addition 
 to the duties imposed by tariff law and also to the additional duties 
 required by section eight of this Act, shall be levied, collected, and 
 paid on all goods, wares, and merchandise imported, by a vesselnot of 
 the United States from a country to which the importing vessel does 
 not belong, unless the importation shall be the growth, production, or 
 manufacture of a country at peace with the United States. And all 
 goods, wares, and merchandise imported by a vessel not of the United 
 States, that shall be admitted to storage in bonded warehouse with 
 lawful tariff duties unpaid for a period exceeding five daj-s, shall be 
 charged and shall pay an additional duty of fifteen per centum ad 
 valorem, but a rebate of five per centum shall be allowed in all cases 
 where such merchandise shall be reexported and cleared outward in a 
 vessel of the United States. 
 
 Sec. 10. That all collections of tonnage and tariff duties, light and 
 entrance taxes, and additional tonnage and tariff duties provided by 
 this Act to be levied, collected, and paid, and all fines, penalties, anS 
 forfeitures accruing to the Treasury from violations of the navigation 
 laws of the United States, this Act included, shall, after the passage 
 of this Act, be set apart in the Treasury as a special fund from which 
 to paj% first, for the support of marine hospitals according to law, and, 
 second, from which to pay premiums to exporters of merchandise for 
 manifesting preference for the employment of vessels of the United 
 States not owned by themselves. 
 
 Sec. 11. That on and after one year and twenty days from the 
 passage of this Act there shall be paid out of the special export fund 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 359 
 
 in the Treasury, provided for by section ten of this Act, to the ex- 
 porters of goods, wares, merchandise, and precious metals to foreign 
 countries in vessels of the United States, registered pursuant to the 
 laws of the United States, and not owned wholly by themselves, as 
 follows: A premium of one-half of one per centum upon the cash 
 valuation of each shipment to a foreign port distant by sea not less 
 than sixty -five miles from the tidal boundary of the mainland of the 
 United States; and a premium of one per centum upon the cash valua- 
 tion of each shipment to a foreign port not less than four hundred 
 miles from the port of departure in the United States; and a premium 
 of one and a half per centum upon the cash valuation of each shipment 
 to a foreign port not less than one thousand miles from the port of 
 departure in the United States; and a premium of two per centum 
 upon the cash valuation of each shipment to a foreign port not less 
 than two thousand miles from the port of departure in the United 
 States; and a premium of two and a quarter per centum upon the cash 
 valuation of each shipment to a foreign port not less than three thous- 
 and miles from the port of departure in the United States; and a pre- 
 mium of one quarter of one per centum additional shall be paid for 
 each one thousand miles above three thousand miles to a foreign port 
 from the port of departure in the United States — that is to say, for a 
 distance of four thousand miles, two and a half per centum; for a dis- 
 tance of five thousand miles, two and three-fourths per centum, and 
 so on, the premium for ten thousand miles being four per centum, 
 which shall be the highest premium that shall be paid; and such pre- 
 miums to an exporter, as hereby provided, shall be payable to his 
 order upon report of the cleai'ance of the vessel, with a statement of 
 the collector of the port fixing the value of the shipment, which must 
 be sworn to by an appraiser for the United States, within a period of 
 ten days, according to such regulations as the Secretary of the Treas- 
 ury shall prescribe and promulgate, distances between ports to be 
 determined by the Hydrographic Office of the Navy Department and 
 stated in sea miles. 
 
 Part III. — Mail service. 
 
 Sec. 12. That the postal Act approved March third, eighteen hun- 
 dred and ninety-one, be, and it is hereby, amended to provide and to 
 I'ead as follows: 
 
 Clause 1. The Postmaster-General shall, as often as once in each 
 year, advertise for informal proposals for the carriage of mails by sea 
 in American-owned mail and naval steamships between such ports of 
 our own and other countries as to merchants may seem advantageous. 
 These advertisements shall be inserted weekly four times in a paper 
 printed in Boston, New York, Philadelphia, Baltimore, New Orleans, 
 Galveston, Norfolk, Charleston, Savannah, Brunswick, Mobile, San 
 Francisco, Portland, and Seattle, and shall describe the service as that 
 of mail and naval steamers best adapted to promote the postal and 
 commercial and naval interests of the United States, and to subserve 
 the interests of their owners as well. Proposers will state the size 
 and speed of vessels, number of trips yearly, remuneration required, 
 time when service could begun, and such other particulars as may 
 seem useful for the Government to consider. 
 
 Clause 2. Within two months after receipt of informal proposals the 
 Secretary of the Navy and the Postmaster-General shall together con- 
 
360 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 sider their contents, the wants of the naval service and the needs of the 
 postal service and determine upon a schedule of requirements that will 
 satisfy both services. The Secretary of the Navy will control the plans 
 for the vessels and the Postmaster-General will decide upon the postal 
 programme. The Secretary of the Navy and the Postmaster-General 
 together shall advertise formally to let contracts for the running of the 
 steamships required. Such advertisements shall be inserted in the same 
 papers that called for informal proposals four times weekly, describing 
 the route, the principal particulars of construction of the ships, the size 
 and speed, the number of trips, the times of sailing, and the time when 
 the service shall begin. The details of the mode of advertising and 
 letting such contracts shall be conducted in the manner prescribed in 
 the Revised Statutes- for the letting of inland mail contracts so far as 
 the same shall be applicable to the ocean mail service. Every contract 
 must have the approval of the President, and none shall exceed the 
 limit of twenty -five years. 
 
 Clause 3. The vessels employed in the mail service under this Act 
 shall be officered by citizens of the United States, and each contract 
 shall provide that on departure a certain proportion of the crew shall 
 owe allegiance to the United States, to wit: During the first two years 
 one-fifth thereof; during the next four years one-fourth thereof; dur- 
 ing the remainder of the time one-third thereof at the least. It may be 
 stipulated in the contract that mails may be brought from abroad, the 
 foreign country paying for the service; also that passengers and bag- 
 gage and freight may be carried both outward and inward. After 
 January first, nineteen hundred and six, the mails shall be sent foreign 
 by vessels of the United States, and no others, without the special 
 authority of Congress; and in cases of need, when private enterprise 
 fails to undertake or carry on the service at reasonable or lawful rates 
 of remuneration, the Secretary of the Navy shall have authority, and 
 it shall be his duty, to send mails foreign or bring them home by suit- 
 able vessels of the Navy until the further order of Congress. 
 
 Clause 4. That all steamships employed in the postal service and 
 hereafter built for it shall be adapted and constructed and made ready 
 to receive guns for prospective use as auxiliary naval cruisers, scouts, 
 or transports in time of war; and in future the plans and specifications 
 shall be agreed upon by and between the owners and the Secretary of 
 the Navy, the strength and stability to be sufficient to carry the arma- 
 ment intended when in naval service, and the tables of materials of 
 construction of hull and machinery to be such as will command the 
 highest classification given by American marine inspection and rating. 
 And all vessels for postal service hereafter built shall be constructed 
 under the inspection of a naval officer detailed by the Secretary of the 
 Navy, to whom he will report in writing the progress made monthly, 
 whether or not the contract is being well performed, and when the 
 trial trip may be made; and no vessel not approved by the Secretary 
 as fulfilling the contract shall be accepted for the service. 
 
 Clause 5. The annual compensation to be agreed upon and paid for 
 such ocean mail service as may be contracted for under this Act shall 
 be reasonable and as low as responsible bidders can afford to perform 
 the same, having regard to the encouragement to vessels that is pro 
 vided by this Act, to the commercial circumstances in each case, and 
 to the rate of compensation for similar service paid by other countries. 
 In any case where a bid may be deemed too high, the programme of 
 
HEABING8 BEFORE THE MERCHANT MARINE COMIMISSION. 361 
 
 service may be modified and the route readvertised. Payments for 
 the service to be made at the close of each round voyage. Where the 
 service may fail to fulfill the contract for a space of six months the 
 President may declare the contract forfeited, and thereupon the route 
 shall be readvertised and let to another bidder. 
 
 Clause 6. Upon each mail and naval steamship the United States 
 shall be entitled to have transported, free of charge, a messenger, 
 whose duty it shall be to receive, sort, take in charge, and deliver the 
 mails to and from the United States, and who shall be provided with 
 suitable room for the accommodation of himself and for the safe car- 
 riage of the mails. 
 
 Clause 7. The officers of the United States Navy may volunteer for 
 service on said ships, and when accepted by the contractor or contract- 
 ors may be assigned to such duty by the Secretary of the Navy when- 
 ever in his opinion such assignment can be made without detriment to 
 the service, and while in said employment they shall receive furlough 
 pay from the Government and such other compensation from the con- 
 tractor or contractors as may be agreed upon by the parties: Pro- 
 vided^ That they shall only be required to perform such duties as 
 appertain to the merchant service. 
 
 Clause 8. Said ships shall take as cadets or apprentices one Ameri- 
 can boy under twenty-one years of age for each one thousand tons 
 gross register, who shall be educated to the duties of the service as 
 seamen, rank as petty officers, and receive such pay for their time as 
 may be reasonable. 
 
 Clause 9. Said ships may be taken and used by the United States' as 
 cruisers, scouts, or transports at any time upon payment to the owners 
 of fair actual value of the same at the time of the taking, and if there 
 shall be a disagreement as to the fair actual value between the United 
 States and the owners, then the same shall be determined by two 
 impartial appraisers, one to be appointed by each of said parties, they 
 at the same time selecting a third, who shall act in said appraisement 
 in case the two shall fail to agree. 
 
 Clause 10. All vessels not of the United States coming with passen- 
 gers from a country to which they do not belong shall pay to the col- 
 lector of the port an entrance tax of twenty dollars for each and every 
 such passenger which they shall land with his or her effects. 
 
 Part IV. — General. 
 
 Sec. 13. That marine underwriters or insurance companies of for- 
 eign countries may, in person or through agencies in the ports of the 
 United States, issue policies in conformity with State regulations on 
 shipments of goods, wares, and merchandise to be exported, but any 
 discrimination made in the clauses of policies, in the premium rates, or 
 effected otherwise, which shall tend to favor the employment of for- 
 eign vessels, or tend to disfavor the engagement and use of vessels of 
 the United States, shall be deemed a misdemeanor punishable by a fine, 
 as a penalty, in a district court of the United States, for the first 
 offense, the sum thereof not exceeding five thousand dollars; for a* 
 second offense the fine shall be not less than ten thousand dollars, and 
 for the third and each offense after the second the fine shall be not less 
 than fifteen thousand dollars, and suits may be brought by any citizen 
 of the United States. In any such suit it shall be no defense that the 
 
362 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 I'ules of any association of underwriters, shipowners, or merchants, not 
 citizens of the United States, or that the inspection and classification 
 of any register book, not owned and printed in the United States, can 
 be claimed to justify the discrimination that may have been the sub- 
 ject of complaint. 
 
 Sec. 14. That on and after six months from the date of approval of 
 this Act it shall be lawful for the space of two years, but no longer, 
 for any bona fide citizen, citizens, or domestic corporations, engaged 
 in, or intending to engage in, the foreign carrying trade of the United 
 States, to import and enter at the custom-house for his or their own 
 use in said trade, but not in the domestic trade or to be held for sale 
 or sold to others, any vessel or vessels suitable therefor, of size not 
 less than one thousand tons gross, and of age not more than three 
 years, and have the same duly registered as a vessel or vessels, of the 
 United States, but upon the following conditions, nevertheless, to wit: 
 That all vessels imported in the first six months of the term of two 
 years as aforesaid shall pay a duty of* three dollars per gross ton; 
 those imported in the second six months shall pay a duty of four dol- 
 lars per gross ton; those imported in the third six months shall pay a 
 duty of five dollars per gross ton; those imported in the fourth six 
 months shall pay a duty of six dollars per gross ton of measurement. 
 The Treasury Department may allow credit on duties for imported 
 tonnage to the extent of six and twelve months' time on secured notes 
 of owners. And it shall be unlawful, upon penalty, as for misde- 
 meanor, punishable by fine not over one thousand dollars, in a district 
 court of the United States, for the master, owner, or agent of any 
 foreign-built vessel not duly registered, enrolled, or licensed, to fly 
 the flag of the Union from or abaft the aftermost mast, spar, or pole, 
 except as a signal of distress. Every vessel of foreign registry show- 
 ing her colors in American waters must fly them in the usual place and 
 manner of her nation. 
 
 Sec. 16. That the regular duties of. tonnage shall be paid alike by 
 American and foreign vessels when entry is made. Entrance or 
 passenger tax shall be paid when permit is given for the landing of 
 passengers from vessels not of the United States, brought from 
 countries to which said vessels do not belong. All additional tonnage 
 duties and the light tax to be paid when clearance of vessel is made, 
 but if clearance be delayed, then, at latest, at the end of four months 
 from date of entrance. American vessels carrying crews of which 
 three-eighths of the number are citizens, shall have rebate of tonnage 
 tax to the extent of twenty per centum; if four-eighths of the crew 
 are citizens, the rebate shall be forty per centum; if five-eighths of the 
 crew are citizens, the rebate shall be seventy per centum; and if six- 
 eighths of the crew are citizens, the rebate shall be one hundred per 
 centum. The United States shipping commissioner shall ascertain 
 and certify to the collector the proportion of citizens in each crew 
 where rebate of tax may be demanded. Regular apprentices as sea- 
 men or engineers, if citizens, shall count as men in computing rebate 
 pt tax. And in all cases where vessels shall be fined by collectors or 
 commanders of revenue cutters in accordance with the statutes, it 
 shall be unlawful for the Secretary of the Treasury or the Secretary 
 of Commerce and Labor to remit any portion thereof; and it shall 
 also be unlawful for the Commissioner of Navig'ation to order refunds 
 of tonnage taxes after the same hav.e been paid into the Treasury. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 363 
 
 Sec. 16. That sections ten and twelve of this Act shall take eiSEect 
 upon its passage, section fourteen in six months thereafter, and sec- 
 tions one, two, three, four, five, six, seven, eight, nine, eleven, 
 thirteen, fifteen, and sixteen in one year and twenty days thereafter, 
 and all Acts or provisions of law in conflict herewith are herebj- 
 repealed; also any and all articles or clauses in existing conventions or 
 treaties in contravention herewith are annulled and abrogated in con- 
 formity with the stipulations of said agreements and the rights and 
 equities of the United States, and formal notice of the Congress of the 
 United States is hereby given that in one year from the passage of 
 this Act all convention or treaty provisions for maritime reciprocity 
 are receded from on the part of the United States, and all enactments 
 therefor are by this Act repealed. 
 
 WAGES CANNOT BE EEDUCED. 
 
 Mr. Cramp. To resume: I think that the proposition to reduce wages 
 in a shipyard to a parity with the foreign workmen is entirely out of 
 the question, and it is a problem to be shunned and dropped. 
 
 Wages as they exist now and all of the conditions or trade, living, 
 comfort, progress, and prosperity of our country are the result of the 
 application of the principles of protection, whether they may be cor- 
 rect or not. Wages are higher here than elsewhere, and they have 
 alwaj's been so, and the present conditions incident thereto have 
 become normal fixtures in our scheme of political economy and exist- 
 ence. Certain conditions in wage rates may not be in accordance with 
 the value of their product, but this should not be the subject of Con- 
 gressional interference and should be left out of the question. 
 
 The most conspicuous illustration in modern times as to the benefits 
 to be derived from a wise and strenuous administration of govern- 
 mental prerogatives is found in the development of Germany under 
 its present able ruler. 
 
 When the present Emperor became its head the war ships of Ger- 
 many, as well as the ships of its great mercantile fleet, were buUt 
 abroad. 
 
 That enterprising monarch from his earliest manltood had evinced a 
 strong predilection for commercial and business pursuits, and his 
 special ambition was directed to the expansion of Germany's foreign 
 commerce. 
 
 He at once saw that no nation which does not build its own ships 
 can permanently hold first rank in the ocean-carrying trade, and from 
 that moment until the present time he has bent all of tlie energies of 
 his nature and all of the power of his exalted position to the promo- 
 tion of German shipbuilding and of the foreign commerce of his 
 Empire. 
 
 Tne result of this strong and well-defined policy was soon apparent. 
 The Germans not only began to build their own ships, but also began 
 to build better ships than they could buy in Great Britain, and now 
 Germany outranks Great Britain in the North Atlantic travel in high- 
 speed steamers. 
 
 Of course the unnecessary South African war was a prominent fac- 
 tor in the decline of British supremacy in the North Atlantic, as it 
 
364 HEAEINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 took the great bulk of the best British steamships for transport service 
 during that time, and while the British were practically standing still, 
 and therefore retrograding, the Germans went ahead with giant 
 strides. 
 
 That is the end of the remarks as I have them here; but I should 
 like to appear before the Commission again and say something about 
 the late Cunard contract and what Great Britain has done to promote 
 shipbuilding and also what the German Empire has done. I should 
 like to have an opportunity, perhaps to-morrow, to make a further 
 statement. 
 
 The Chairman. An opportunity will be given you to-morrow fore- 
 noon to add to your statement. 
 
 Mr. Ckamp. Very well. 
 
 STATEMENT OF HORACE ATKINSON. 
 
 The Chairman. In addition to inquiring as to the development of 
 the American merchant marine and American commerce, the statute 
 imposes upon this Commission the duty of inquiring into existing laws 
 respecting the food, treatment, and quarters of seamen in order to 
 make as attractive as possible the seafaring calling. The Chair under- 
 stands there are several seamen who wish to say a word. 1 will call 
 upon Mr. Horace Atkinson. 
 
 Horace Atkinson appeared before the Commission. 
 
 The Chairman. What is your calling? 
 
 Mr. Atkinson. Seaman. 
 
 The Chairman. Sailor? 
 
 Mr. Atkinson. Yes, sir. 
 
 The Chairman. Are you in the service of the United States or on a 
 foreign ship? 
 
 Mr. Atkinson. United States for the last twenty years. 
 
 The Chairman. Have you been on ships of other nationalities? 
 
 Mr. Atkinson. Yes; four. 
 
 The Chairman. Are you American born ? 
 
 Mr. Atkinson. No, sir. 
 
 The Chairman.' What nationality are you? 
 
 Mr. Atkinson. British; American by adoption. 
 
 The Chairman. Will you state to the Commission in your own way 
 what your experience as a seaman has been on ships of different 
 nationalities, and make any suggestions regarding your calling that 
 you may see proper to submit? 
 
 THE port makes THE WAGES. 
 
 Mr. Atkinson. Mr. Chairman and gentlemen of the Commission, I 
 have listened this morning to the statements of the difference between 
 American and foreign vessels as regards wages. The port makes the 
 wages. I care not whether it be Philadelphia, Hongkong, or the 
 the Pacific, Great Britain, or anywhere else. The port from which 
 the men sail makes the wages. For instance, there may be four or 
 five vessels of different nationalities lying at Point Breeze, and all 
 those vessels are loading for Japan or the East Indies, and I may be 
 shipped in an American vessel. Another man may go aboard a Nor- 
 wegian vessel. Another may go into a German vessel, and so on. 
 
HEABINGS BBFOBE THE MEECHANT MARINE COMMISSION. 365 
 
 We ship for the same i"ate of wages, and when we arrive there we are 
 fired ashore. 
 
 The coastwise trade is protected, because foreign vessels can not 
 trade coastwise, and for that reason wages are somewhat higher than 
 in the deep-water service, and for the reason that the coasting men or 
 the men who sail up and down the coast are free from the crimps. 
 The crimps are a class of men who have existed from the time when 
 Great Britain needed men for her warships and the Government paid 
 a bounty for every man that was caught and put aboard a British 
 man-of-war to fight. Naturally it has been handed down. The man 
 who makes a business of shipping seamen in the foreign trade and on 
 the coast lately, because it has been introduced on the coast, will get 
 the men and ship them at certain rates of wages. It is generally 
 about $18 or $20 in Philadelphia. Eighteen dollars the last vessel 
 paid for the deep water. I get |18 a month to go on that voyage. 
 The shipowner has to pay to tne crimp the same amount of wages — 
 fl8. Tnat makes the shipowner's wages $36 to ship me. He gets $18 
 out of me and $18 from the shipowner. 
 
 THE CEIMP AND HIS WOEK. 
 
 It is just the same in the coastwise trade. The gentlemen who spoke 
 this morning said that if it was not for the union they could get men 
 cheaper and not delay the vessel. There was a gentleman nere, a 
 magistrate for the United States, who claimed that if a sailor got 
 advance he would skip out. The great trouble is that the seaman does 
 not get any money — not a penny — unless he may get a dollar from the 
 boarding master. The money is paid after his delivery aboard the 
 vessel, and she is put to sea. Then it is paid over to the boarding 
 master or the shipping master. 
 
 The Chairman. Let me ask you a question, so that we may all have 
 a clear understanding of this matter. Do you mean to say that if you 
 ship on a vessel, an American vessel, the owner of the vessel pays an 
 equal amount to the crimp, as he is known ? 
 
 Mr. Atkinson. I do. 
 
 Senator Malloet. Not every month ? 
 
 Mr. Atkinson. No; he pays it for the first month. 
 
 The Chairman. Why should he pay it the first month ? 
 
 Mr. Atkinson. It is done to get the men as cheap as they can. 
 
 Then in the coastwise trade the crimp will ship a crew of men for 
 $26. The wages generally out of this port and along the coast are $30 
 in a moderate-sized vessel. Aboard a large vessel, a five or six masted 
 schooner, it is $35, but the crimp breaks in and ships those men for 
 $25, but he makes the shipowner pay $10 or $12 to supply these men 
 aboard the vessel. 
 
 Representative Minor. How comes it that the men are willing to 
 take $5 less a month ? You say the prevailing wages are about $30. 
 
 Mr. Atkinson. The average wages. 
 
 Representative Minor. How is flie crimp able to ship them at $25 ? 
 
 Mr. Atkinson. When a vessel comes in a crimp goes aboard her 
 and steals men from her to supply them to an outward-bound vessel, 
 so that he can make money off them. 
 
 Representative Minor. It is hard for me to understand how one man 
 can steal another. 
 
366 HEABINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 DEITING MEN AWAY. 
 
 Mr._ Atkinson. That is actually the fact. The trouble is this, that 
 even in deep water it has been the practice until very lately, and I 
 believe it is to-day, that if I am aboard a vessel, and I may be aboard 
 that vessel six months, and my honest intention is to make the round 
 voyage, but I am a married man, living in Philadelphia, and I want to 
 go back to the United States to bring a little money home. I have 
 
 tot six or eight months' money coming to me, and the captain is 
 etermined to drive me away by hunger or starvation, so that I have 
 to leave that vessel in a foreign port. That is the custom. 
 
 The Chairman. You say that is the custom ? 
 
 Mr. Atkinson. That is the custom. 
 
 The Chaikman. In what way does he drive you out? 
 
 Mr. Atkinson. By starvation; by making life so miserable aboard 
 that vessel, and working me so hard. 
 
 The Chairman. On an American vessel ? 
 
 Mr. Atkinson. On American vessels. 
 
 The Chairman. Name any vessels where that practice has been 
 indulged in, and it has come. to your attention. 
 
 Mr. Atkinson. The Shenandoah^ of Bath, one of Sewall's vessels; 
 the Henry B. Hyde, another. 
 
 Senator Mallort. Give the dates of the voyages on which it 
 occurred. 
 
 Mr. Atkinson. It was in 1890. 
 
 Senator Mallort. All these instances? 
 
 Mr. Atkinson. The Hyde, I think, was in 1888. 
 
 The Chairman. Have you any recent instances ? That was sixteen 
 years ago. 
 
 NEW LAW BENEFICIAL. 
 
 Mr. Atkinson. Yes, sir. Recently, since the new law has been cre- 
 ated, there is some difference, because of this, that before the act of 
 December 21, 1898, any master or mate could beat a man, break his 
 arm, knock his ej^e out, or do anything else, and simply say to the 
 judge or jury: "Yes; I did it; but I did not do it with hatred, malice, 
 or revenge." The result was that we could not get a conviction, 
 because the statute stated that it had to be malice, hatred, or revenge 
 to prove a case against the man. 
 
 The Chairman. Do you know of any instance where such wretched 
 cruelties were practiced where the sailor was faultless ? Would he be 
 assaulted without any reason? 
 
 Mr. Atkinson. A few years ago I knew of a case, a boy, a colored 
 man, on a brig lying at Port Richmond. The boy had his hands and 
 feet frozen. The mate abused him violently; laid hands on him and 
 gave him corporal punishment; beat him for not working; and that 
 case is right in the district here, where he recovered damages, and the 
 boy was sent back to Jamaica. 
 
 The Chaikman. Complaint was made ? 
 
 Mr. Atkinson. And he recovered damages. 
 
 The Chairman. In the other cases were complaints made to the 
 United States consuls ? 
 
 Mr. Atkinson. Yes, sir. 
 
 The Chairman. But the men were dismissed? 
 
 Mr. Atkinson. Yes, sir. 
 
HEARINGS BEFORE THE MEKOHANT MARINE COMMISSION. 367 
 
 The Chairman. On what vessel are you now ? 
 
 Mr. Atkinson. I am ashore now. I am acting as agent for the 
 Seamen's Union. 
 
 The Chairman. You are not on the sea at present? 
 
 Mr. Atkinson. Not at present. As soon as my term is out I will 
 go to sea again. 
 
 The Chairman. What complaints have you to make as to the treat- 
 ment of seamen from 1898 or 1900 up to the present time ? 
 
 A LOAD LINE AND WATCH AND WATCH. 
 
 Mr. Atkinson. I claim, or the seamen do, that the vessels ought to 
 have a load line, the same as there is in British vessels. 
 
 The Chairman. Known as the PlimsoU line? 
 
 Mr. Atkinson. Yes, sir; so that the vessel may go to sea with safety. 
 The vessel should not be loaded below a certain mark. 
 
 The Chairman. Is there anything else ? 
 
 Mr. Atkinson. And the crew aboard that vessel should have watch 
 and watch at sea — that is, in fine weather. To-day, if I go to sea, I am 
 kept up from 8 o'clock in the morning until 6 at night. la bad weather, 
 perhaps at night, I have to reef down and be up all night. You under- 
 stand that when bad weather comes any sailor must expect to be on 
 deck night and day for the safety of the vessel, but in fine weather, 
 where I am kept out of my regular watch, four on and four off — four 
 hours on deck and four below — I have to work all the afternoon. 
 
 The Chairman. For the benefit of the landsmen on this Commission, 
 please explain to us just what you mean by watch and watch. 
 
 Mr. Atkinson. The men aboard a vessel are divided into two parts. 
 One part is in the port and one is the starboard watch. That is, the 
 men are divided in half. One half are on deck four hours and the 
 other half are supposed to be below four hours. So, when the men 
 are sleeping down below, the other men will be at work, and they 
 relieve each other for deck duty every four hours. 
 
 The Chairman. How many hours labor would a sailor perform in 
 active work under those circumstances ? 
 
 Mr. Atkinson. He would perform in a deep-sea vessel, on the pres- 
 ent day, about sixteen hours a day steady work. 
 
 The Chairman. In what respect, then, are American vessels in that 
 regard different from those of other nations ? 
 
 Mr. Atkinson. On American vessels it is this way: You work 
 whenever required, night or day. In vessels of other nationalities on 
 which I have been you get watch and watch, except in bad weather, 
 when the safety of the vessel depends upon it. 
 
 The Chairman. What vessel did you last ship on? 
 
 Mr. Atkinson. The last vessel I was on was the Elmer Curmnings. 
 
 The Chairman. An American vessel? 
 
 Mr. Atkinson. Yes, sir; it belonged to Boston. 
 
 The Chairman. Why did you not ship on a foreign vessel if they 
 have so much better conditions and better regulations? 
 
 Mr. Atkinson. Because I am an American citizen and I want to 
 be at home once in a while. I have a wife and family to look after. 
 
 The Chairman. There are foreign vessels, of course, which touch 
 at this port from time to time ? 
 
 Mr. Atkinson. Yes, sir. 
 
368 HEARINGS BEFORE THE MEECHA.NT MARINE COMMISSION. 
 
 HOW WAGES ARE GOVERNED. 
 
 The Chairman. Let me ask you this: You say the port makes the 
 wages. How is it in the case of an American vessel sailing from 
 Philadelphia for London, and an English vessel sailing from London 
 for Philadelphia? Would the wages be substantially the same? 
 
 Mr. Atkinson. Almost. If you take the English scale of wages, 
 they are almost the same as the American. 
 
 The Chairman. We had testimony in New York on the part of sea- 
 men to the contrary, to the effect that the wages paid on an American 
 vessel from an American port would be considerably in excess of the 
 wages paid on a British vessel sailing from a British port for an 
 American port. 
 
 Mr. Atkinson. I can not see it. The wages on an English steamer 
 are four pounds ten and on an American , $25. The difference is f 2. 60. 
 
 The Chairman. That is considerable in a monthly wage. 
 
 Mr. Atkinson. It is about that. Some vessels pay five pounds ten, 
 which would be about |25 a month. 
 
 Senator Mallort. There is no immovable scale in London or in 
 New York or in Philadelphia. Wages vary according to the times ? 
 
 Mr. Atkinson. Yes. 
 
 Senator Mallory. You may get four pounds ten from Liverpool in 
 the month of May, and in July it may be three pounds fifteen? 
 
 Mr. Atkinson. It would not fall that much. It might possibly be 
 that way. 
 
 Senator Mallory. There is no reason why wages should not change. 
 
 Mr. Atkinson. No. There is a sliding scale. 
 
 Senator Malloky. It is the same way in New York and Philadelphia 
 and all Atlantic coast ports. 
 
 Mr. Atkinson. Not in deep water, because the crimp, the man who 
 ships me, and through whom I have to ship to get aboard a vessel — I 
 must go by his wages. 
 
 Senator Mallory. If there is a poor demand for sailors does he not 
 have to ship you at a less rate than he would at another time when 
 ■ there is a great demand for them ? 
 
 Mr. Atkinson. No. There is a society called the Boarding House 
 Society and they control the wages for a port. 
 
 Senator Mallory. Is there any connection between the crimp and 
 the boarding-house keeper? 
 
 Mr. Atkinson. Both combine. 
 
 Senator Mallory. Do they generally work together? 
 
 Mr. Atkinson. They are combined, hand in glove. 
 
 Senator Mallory. Do the crimps employ the boarding-housekeepers ? 
 
 Mr. Atkinson. The crimp is the boarding-house keeper himself. 
 
 Senator Mallory. He manages the business? 
 
 Mr. Atkinson. He manages the business, and puts the men aboard 
 when the vessel requires them. 
 
 The Chairman. You have sailed on British and American vessels. 
 Have you sailed on vessels of any other nationality? 
 
 Mr. Atkinson. Norwegian and Italian. 
 
 The Chairman. What nave you to say as to the comfort of seamen 
 on the ships of those various nationalities, and also with respect to the 
 quality of food furnished by the different ships? 
 
HEARINGS BEFOBE THE MERCHANT MARINE COMMISSION. 369 
 
 COMPLAINT OF UNDEKMANNINQ. 
 
 Mr. Atkinson. The food is a little better aboard American vessels, 
 but the work is far harder. The American vessel is undermanned. 
 
 I wish to state that to-day vessels sailing in the coastwise trade are 
 carrying one and two men less than what they were carrying three or 
 four years ago. 
 
 The Chairman. 1 want to know particularly about the matter of 
 food. You say the food is better on an American vessel than on that 
 of any other nationality with which you are acquainted? 
 
 Mr. Atkinson. Yes; to a certain extent. 
 
 The Chairman. Now as to the matter of undermanning, which was 
 called to the attention of the Commission in New York. Give us in 
 brief precisely the situation in the several services. 
 
 Mr. Atkinson. The competition on this coast is getting so close 
 among the shipowners carrying freight, say coal, generally, that they 
 will cut down the crew to save expenses. For instance, there was a 
 vessel came here Monday without any mate. She made a trip down 
 South to a Florida port and back again without a mate. A vessel that 
 I was in, the George V. Jordan, an American vessel, carried 6 men, and 
 that means 4 men and 1 mate. 
 
 Representative Minor. How large is she ? 
 
 Mr. Atkinson. She is a vessel that carries about 1,150 tons. She 
 is about 600, along about there. 
 
 Senator Mallort. Was she a square rigger or a fore and after ? 
 
 Mr. Atkinson. A 3-masted schooner. 
 
 Senator Mallort. Did she have a donkey engine? 
 
 Mr. Atkinson. No, sir. She has not got one now, or the last 1 
 saw of her. 
 
 Representative Minor. Everything is done by hand ? 
 
 Mr. Atkinson. Yes, sir. 
 
 Regarding this advance, I wish to state that the condition is so that 
 if you want to build up the American merchant marine the only pos- 
 sible way that I see to do it is to do away with the advance in the for- 
 eign trade. Imprisonment follows it. To-day if I ship in a foreign- 
 going ship, American, and I want to leave, the consul at that port has 
 a perfect right to imprison me for attempting to leave the vessel. 
 
 DISCHARGES IN FOREIGN PORTS. 
 
 The Chairman. You think you ought to be permitted to leave in a 
 foreign port? 
 
 Mr. Atkinson. Yes; because the master 
 
 The Chairman. Do you not make a contract not to leave ? 
 
 Mr. Atkinson. Yes; but the master will always find some way to 
 discharge me if he wants to. 
 
 The Chairman. You think the crew ought to be permitted to tie up 
 a vessel at a foreign port bj^ leaving in violation of their contract? 
 
 Mr. Atkinson. There is no such thing, your honorable Commis- 
 sion, as tying up a vessel. There is no such thing as a vessel rotting 
 in her own brine, because all over the world wherever a crew leaves 
 the master can always procure another crew. 
 
 The Chairman. Waiving that, do you think you ought to have the 
 right to violate a contract? 
 
 3a— 04 24 
 
370 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Mr. Atkinson. No; but if the master has a right to discharge me, 
 I should have the privilege of leaving the vessel. 
 
 The Chairman. He has not a right to discharge you without cause. 
 
 Mr. Atkinson. Oh, yes; he can discharge me. 
 
 The Chairman. You would want the law changed in that respect? 
 
 Mr. Atkinson. 1 should like to see the law where both parties were 
 treated alike — where I, as an American seaman in an American vessel, 
 can demand my discharge in any foreign port and the captain can 
 discharge me in a foreign port even against my will. 
 
 Representative Spight. What right has a master to discharge his 
 crew without their consent? 
 
 Mr. Atkinson. Without the men's consent? 
 
 Representative Spight. Yes. 
 
 Mr. Atkinson. They do it by starvation to save the vessel the 
 wages — what the man has earned; to make him a deserter. 
 
 Representative Spight. They compel the men to desert? 
 
 Mr. Atkinson. They compel me to desert through starvation and 
 through hard work. If I have five or six months' wages coming to 
 me on a vessel it is the captain's policy to run me out, as we call it. 
 
 Representative Minor. Our statutes provide a food schedule, and I 
 am glad to say I helped to enact it. 
 
 Mr. Atkinson. Yes. 
 
 Representative Minor. All American vessels in any trade are 
 obliged to furnish that food to you. How is it the masters can 
 violate the law and reduce the amount of food prescribed by our law? 
 
 Mr. Atkinson. It has been done where the master has refused to 
 give the scale of wages when asked for. 
 
 Representative Minor. Has action ever been taken against a master 
 who would be so inhuman and cruel? 
 
 Mr. Atkinson. There has been such action. 
 
 Representative Minor. Have there been any convictions? 
 
 Mr. Atkinson. And a conviction. 
 
 attitude of consuls. 
 
 Senator Malloet. Have you had anj' experience with our foreign 
 consuls in matters of that kind ? 
 
 Mr. Atkinson. Referring to foreign consuls I must say this, that 
 an American consul in any port where I have ever made a complaint 
 has always decided with the captain and the vessel against me. 
 
 Senator Mallory. Let me understand your proposition. It is to 
 modify the law so that the sailor on reaching any foreign port can, if 
 he chooses, demand and receive his discharge and his money for the 
 time he has served, giving the master at the same time the right to 
 discharge the crew if he desires to do so? 
 
 Mr. Atkinson. Yes. 
 
 Senator Mallory. Do you not think it would be better, instead of 
 authorizing a breach of the contract, such as that would be, to enact a 
 law so positive and stringent as to give the sailor redress immediately 
 by the consul as a judicial officer for any abuses or any starvation that 
 may be practiced on him by the master in order to compel him to quit 
 the ship? Do you not think that could be done? 
 
 Mr. Atkinson. Replying to you, honorable sir, I can onlj^ say this 
 by past experience, that I have never seen a consul in any foreign port 
 who would give fair, honest justice to a seaman. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 371 
 
 Senator Malloet. That is pretty rough on the consuls. 
 
 The Chairman. You just said that a conviction followed in one case. 
 
 Mr. Atkinson. That was here in this city. 
 
 Senator Malloky. In the United States. 
 
 Mr. Atkinson. Yes. 
 
 Senator Mallokt. But he says he has never known a consul to deal 
 fairly with a United States sailor as against the ship. 
 
 Representative Minor. • You have spoken of desertions from Amer- 
 ican ships. Is it not true that the sailors of all nations desert in about 
 the same proportion ? 
 
 CRIMPS STEAL SEAMEN. 
 
 Mr. Atkinson. 1 must have made a mistake. I say that the crimps 
 steal men from foreign vessels. The crimps will go down and, seeing 
 a vessel coming here to load, the crimp will go aboard and steal the 
 men, and nine times out of ten it is with the consent of the master 
 who wants to get rid of those men. The only way to stop that, as I 
 believe, is to nave a law enacted making it punishable by imprison- 
 ment for any crimp or boarding-house master to steal men out of any 
 foreign vessel. The trouble is this: If I am stolen out or leave a 
 British vessel or any other country's vessel to-day, it costs the master, 
 if he wants to arrest me and take me back and put me aboard that ves- 
 sel, just about $26 for expenses. It costs that to arrest me and keep 
 me in jail and put me aboard when required. The master of the ves- 
 sel does not want to go to that expense. He can not afford it. 
 
 The Chairman. What are your duties now? 
 
 Mr. Atkinson.' My duties ? I am agent of the seamen's union. 
 
 The Chairman. You are looking after their interests? 
 
 Mr. Atkinson. Yes, sir. 
 
 The Chairman. Are you receiving a salary from the union? 
 
 Mr. Atkinson. From the seamen's union. 
 
 Representative Minor. Do you permit nonunion crews to ship 
 aboard vessels without interruption or interference ? 
 
 Mr. Atkinson. We certainly do. We make no distinction. We 
 only request men, white or black, and the most of the colored men 
 belong to the organization. W'e do not restrict them in a crew, but 
 undoubtedly in times when men are scarce, we will suppose there are 
 two union men aboard a vessel, and that vessel wants four men. That 
 is, she carries four men; she wants two more. I can not prevent the 
 other men from going aboard and saying, "we will not sail with non- 
 union men." If those men will join the union, the union men will go. 
 If they do not join, we will not go aboard ship. And I have a right 
 to do that. 
 
 how to cure the crimp evii,. 
 
 Representatives Spight. Have you any suggestions to offer which 
 would tend to abate or modify the evil resulting from crimps ? 
 
 Mr. Atkinson. Only make it an offense for a crimp to steal men 
 from vessels. Pass a Federal law, and have that man arrested, and 
 have it so that the' sailor can be taken aboard the same vessel that he 
 left at the expense of the United States. 
 
 Representative Spight. We have often heard before committees of 
 Congress of the evils of the crimp system, and yet I have never heard 
 any suggestion that furnished an effective remedy. 
 
372 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Mr. Atkinson. That is the only wav I know, because, you under- 
 stand, if you take the power from the crimp of stealing men and 
 stopping this payment of advance wages, then you take his livelihood 
 away from him, but so long as you permit the allotment of wages or 
 the advance of wages to a seaman, then it is impossible, because that 
 is the only thing that he can thrive on. 
 
 Senator Mallory. What did you say is your present official 
 capacity ? 
 
 Mr. Atkinson. Agent of the seamen's union for the port of Phila- 
 delphia. 
 
 Senator Mallory. Can you tell us what the sentiment of the sailors 
 is on the subject of this recently enacted law, now in force, prohibiting 
 advance to sailors? Do they want it to remain in force, or do they 
 favor its repeal? 
 
 Mr. Atkinson. We certainly want it in force, and I can guarantee 
 your honorable committee that to-day a petition of 5,000 men could 
 be got out of this port asking and praying for the reenactment of 
 advances. 
 
 Senator Mallory. What do you mean — "the reenactment of 
 advances ? " 
 
 Mr. Atkinson. We do not want it. 
 
 Senator Mallory. You want the law to stand as it is to-day? 
 
 Mr. Atkinson. We want it to stand as it is to-day. 
 
 Senator Mallory. Still a great many petitions were sent to Con- 
 gress asking for the repeal of the law. 
 
 Mr. Atkinson. Those were from shipowners, so that they could get 
 the men, by the help of the crimps, and reduce American wages. 
 
 STATEMENT OF ALONZO RICHARDS. 
 
 Alonzo Richards appeared before the Commission. 
 
 The Chairman. Are you a seaman ? 
 
 Mr. Richards. Yes, sir. 
 
 The Chairman. Are you at present in the service ? 
 
 Mr. Richards. I am working ashore at present. I have been at sea 
 for the last sixteen years. 
 
 The Chairman. On vessels of what nationalities ? 
 
 Mr. Richards. American, English, and Norwegian. 
 
 The Chairman. What have you to say as to the relative desirabilitj'^ 
 of service in vessels of those three nationalities ? 
 
 Mr. Richards. I should say that the relationship between the 
 American shipowners and masters and the seamen can be ameliorated 
 only by abolishing the crimp. The crimp is a menace in every way, 
 shape, and form. They violate the statutes here in the city a great 
 many times. An American seaman may to-day go down along the 
 docks, and may be fully convinced of the fact that a vessel needs a 
 crew. He has a discharge to prove his ability and conduct. He 
 speaks to the captain or the mate, as the case may be, and they always 
 refer him to the crimp. They themselves want a crew, but they will 
 not employ the man and do business individually-. Sailors have to 
 have employment through this crimp, and there is" a rake-off, and nine 
 times out of ten the sailor is the victim. 
 
 Representative Spight. How can we abolish the crimp unless you 
 quit dealing with him? 
 
HEAEINaS BEFORE THE MERCHANT MARINE COMMISSION 373 
 
 Mr. Richards. We will have to get assistance from the masters of 
 the vessels. 
 
 Representative Spight. I should like to hear some method suggested 
 to get rid of the crimp. 
 
 Mr. Richards. Through the passage of a law. That is the only way 
 1 know of. The seamen nave done all they possibly could. 
 
 The Chairman. Which service have you found to conduce most 
 largely to the comfort and welfare of the seamen — the American, the 
 English, or the Norwegian ? 
 
 Mr. Richards. I should say that a man is more comfortable on 
 board a Norwegian vessel than on any I have ever been on. He does 
 get less wages. 
 
 The Chairman. Does he get as good food as on an American vessel ? 
 
 Mr. Richards. Not as wholesome food, but he gets enough, such as 
 it is, and does not work any too hard. 
 
 The Chairman. In what respects then is he better off? You say he 
 does not fare so well so far as food is concerned. 
 
 MORE LEISURE ON NORWEGIAN VESSELS. 
 
 Mr. Richards. He has more leisure time, and the vessels are better 
 manned. In maneuvering a ship, it does not require both watches to 
 do it. One watch can do it, unless they have excessively bad weather. 
 
 The Chairman. Then the American vessels are not manned so com- 
 pletely as are those of other nationalities? 
 
 Mr. Richards. No, sir; by no degree. I firmly believe that one- 
 half the disasters on this coast are due not only to the lack of men, 
 but the inefficiency of the men. 
 
 The Chairman. Has that- been true during your sixteen years' 
 service? 
 
 Mr. Richards. Yes, sir; I always found it, and I find it is growing 
 worse. There are vessels that do not carry as many men to-day as 
 thej' did two years ago. 
 
 The Chairman. What else have you to say, in connection with your 
 life as a seaman, which would be of interest to the Commission? 
 
 Mr. Richards. I was in the schooner Alice Archer in February, 1902. 
 We had a little trouble on our way down to Jacksonville. The deck 
 load shifted. We blew away our sails at first, and the vessel started 
 leaking. The crew did all they could to keep the vessel free, but in 
 order to attend to the sails it was necessary to leave the pumps. Then 
 the vessel made water. When we came back to the pumps she had 
 made so much water that we had to leave her, and she went down. She 
 would not have gone down if she had been properly manned. 
 
 Representative Spight. Are you a memVjer of the seamen's union? 
 
 Mr. Richards. Yes, sir. 
 
 Senator Mallory. What was the tonnage of the Alice Archer? 
 
 Mr. Richards. I could not say. She was a four-masted schooner. 
 
 Senator Mallory. How many men did she have ? 
 
 Mr. Richards. Four men before the mast. 
 
 Senator Mallory. And a cook? 
 
 Mr. Richards. And a cook. 
 
 Senator Mallory. And a second mate? 
 
 Mr. Richards. Yes, sir. 
 
 The Chairman. How many more men would have been required to 
 man her properly, according to your standard? 
 
374 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Mr. Richards. I should say two more. 
 
 Representative Spight. What is your nationality? Where were 
 you born ? 
 
 Mr. Richards. I am British born; Briti&h West Indies. 
 
 Representative Spight. You are not :in African ? 
 
 Mr. Richards. No, sir. 
 
 Representative Spight. Your face does not look like that of an 
 African. 
 
 Senator Mallort. Have you been naturalized ? 
 
 Mr. Richards. No, sir. 
 
 Senator Malloky. Have you declared your intention? 
 
 Mr. Richards. No, sir. 
 
 Senator Mallort. When you ship, do you ship before a shipping 
 commissioner? First let me ask you, are you shipping in the coast- 
 wise trade now? 
 
 Mr. Richards. Yes, sir. 
 
 Senator Mallory. When you ship, do you ship before an American 
 shipping commissioner? 
 
 Mr. Richards. Yes, sir. 
 
 Senator Mallort. Always ? 
 
 Mr. Richards. Yes, sir; do not ship anywhere else. 
 
 crimps in coastwise trade. 
 
 Senator Mallory. Does the crimp come in the coastwise trade? 
 
 Mr. Richards. The crimp -does not operate so strongly in the coast- 
 wise trade. 
 
 Senator Mallory. Does he operate at all there ? 
 
 Mr. Richards. Yes, sir. 
 
 Senator Mallory. How ? 
 
 Mr. Richards. To a great extent. 
 
 Senator Mallory. Where does he get the money ? 
 
 Mr. Richards. From the owner or captain; indirectly from the 
 sailor. 
 
 Senator Mallory. Then, the captain of the ship pays the crimp 
 contrary to the law ? 
 
 Mr. Richards. Yes, sir. 
 
 Senator Mallory. And deducts it from your pay ? 
 
 Mr. Richards. Yes, sir. 
 
 A CHARGE of NEGLECT OF DUTY. 
 
 Senator Mallory. Have you ever undertaken to collect that amount 
 from the captain when you came back at the end of your voyage? 
 
 Mr. Richards. No, sir. I can cite an instance that happened here 
 about a couple of months ago, in the case of the schooner Samuel W. 
 Hathaway. The schooner shipped a crew from Norfolk, Va., down to 
 some part of Porto Rico, and the master of that vessel paid advance, 
 not to the men, but to some crimp in Norfolk, without the consent of 
 the men. When the men made the voyage and came back here to the 
 United States shipping commissioner to be paid off this money was to 
 be deducted. The men refused to pay this amount of money. The 
 matter was taken before the United States commissioner in this city, 
 at Ninth and Chestnut here; and to have further proof, they wired to 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 375 
 
 Norfolk to a delegate of the union down there, to prove that the cap- 
 tain did pay this money before the voyage began. But the United 
 States shipping commissioner did not give the men any redress at all; 
 claimed the story was well composed, and they were a lot of sea law- 
 yers. The money was taken out of the men's wages and he compelled 
 them to pay it. They never got the benefit of it. 
 
 Senator Mallokt. Do you know the name of that commissioner ? 
 • Mr. Richards. No, sir; 1 could not say. 
 
 Senator Malloet. "Where was it you say that this was investigated ? 
 
 Mr. Richards. Here in the citj'. 
 
 Senator Mallort. But you gave the location. 
 
 Mr. Richards. Ninth and Chestnut streets. 
 
 Senator Mallory. When was that ? 
 
 Mr. Richards. 1 could not say as to the exact day. 
 
 Senator Mallort. About how many months ago ? 
 
 Mr. Richards. Not more than two months ago. 
 
 Senator Mallort. What was the name of the vessel? 
 
 Mr. Richards. The schooner "Samuel W. Hathaway. 
 
 Senator Mallort. What was the name of the man who made the 
 case? 
 
 Mr. Richards. One was named Isaac Anderson, another Samuel 
 Lockly or Henry Lockly; another Alfred Jones; the other I can not 
 remember. 
 
 Senator Mallort. Were you one of the crew ? 
 
 Mr. Richards. No, sir; I was not one of the crew, but I ^vas here 
 at the time the men were getting paid off. 
 
 Senator Penrose. What vessel are you on now? 
 
 Mr. Richards. Not any. 
 
 Senator Penrose. What are you doing now ? 
 
 Mr. Richards. Working for the union. 
 
 Senator Penrose. Are better wages paid on American vessels than 
 on vessels of other nationalities ? 
 
 Mr. Richards. Not in the same trade. What I mean by that is 
 that American foreign vessels pay about as good as English foreign 
 vessels and better in the American coastwise trade than in the English 
 coastwise. 
 
 The Chairman. How many union agents are there in Philadelphia? 
 
 Mr. Richards. Only one. 
 
 The Chairman. The man who spoke just before you did said he was 
 an agent of the union, and you are an agent. 
 
 Mr. Richards. No, sir. 
 
 Senator Penrose, Where were you born? 
 
 Mr. Richards. In the British West Indies. 
 
 Representative Spight. You say j'ou are not an agent of the union? 
 
 Mr. Richards. No, sir. 
 
 Representative Spight. What are you? 
 
 Mr. Richards. I am a delegate. 
 
 Representative Spight. What do you do? 
 
 Mr. Richards. I go around and organize the men, and procure men 
 for vessels when I get the opportunity without any fee whatever. 
 
 Representative Spight. Have you any connection with the crimps 
 you spoke of? 
 
 Mr. Richards. I am in opposition to them, and they are opposed 
 to me. 
 
376 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 TWO COMMISSIONERS ACCUSED. 
 
 Senator Malloet. You say that the crew you have referred to went 
 before a commissioner. Was it a United States court commissioner 
 or a United States shipping commissioner? 
 
 Mr. Richards. They went before the United States shipping com- 
 missioner first. 
 
 Senator Mallort. Did they go before a United States court com-' 
 missioner? 
 
 Mr. Richards. Yes, sir; afterwards. 
 
 Senator Malloey. And both of the commissioners treated them the 
 same? 
 
 Mr. Richards. Yes, sir. 
 
 The Chairman. Could you ascertain the names of those_ commis- 
 sioners in order that they might be summoned by this Commission? 
 
 Mr. RiCHAEDS. No, sir; I could not. 
 
 The Chairman. The Commission will try to ascertain their names. 
 
 Mr. Horace Atkinson. 1 can give you the name of that commis- 
 sioner. 
 
 The Chairman. I wish you would give us his name. 
 
 Mr. Atkinson. Commissioner Craig, clerk of the United States 
 district court, Philadelphia. The shipping commissioner's name is 
 Knight. 
 
 Senator Penrose. William R. Knight. 
 
 The Chairman. Will you gentlemen be here to-morrow in the fore- 
 noon? 
 
 Mr. Atkinson. 1 will, if you want me to be here. 
 
 The Chairman. I think you would better be here to-morrow morning. 
 
 (See Mr. Richards's statement made on the following day.) 
 
 STATEMENT OF WILLIAM ROBERTSON. 
 
 William Robertson appeared before the Commission. 
 
 The Chairman. What is your business ? 
 
 Mr. Robertson. I am a mai'ine fireman. 
 
 The Chairman. Are you now in active service? 
 
 Mr. RoEEETSON. I have not been for the last year. 
 
 The Chairman. What is your present business? 
 
 Mr. RoBEETSON. Agent for the Marine Firemen's Union of Phila- 
 delphia. 
 
 The Chairman. What is the Marine Firemen's Union, if you please? 
 
 Mr. Robertson. It is an organization composed of all the firemen 
 going to sea on steamships. 
 
 The Chairman. What have you to sa^r in regard to the inquiry we 
 are prosecuting here? 
 
 Mr. Robertson. 1 would say in regard to the conditions aboard 
 American vessels alongside of English or Norwegian, and I have been 
 on all of them, that the conditions of the firemen aboard those steamers 
 are a good deal worse than what they are on either of the foreign 
 vessels. 
 
 The Chairman. Have you served on vessels of difierent nationalities? 
 ^ Mr. Robertson. Yes, sir; 1 have been on Norwegian tramps and 
 English steamers and 1 have been on American steamers. 
 
HEARINGS BEFORE THE MERCHANT MARINE • COMMISSION. 371 
 
 The Chairman. Where were you born ? 
 
 Mr. Robertson. In Scotland. 
 
 The Chairman. Are you an American citizen ? 
 
 Mr. Robertson. No, sir. 
 
 The Chairman. When did you last serve on a United States vessel ? 
 
 Mr. Robertson. About fourteen months ago. 
 
 The Chairman. Had you previously served on a United States vessel ? 
 
 Mr. Robertson. Yes, sir. 
 
 The Chairman. Between those two services had you been on vessels 
 of other nationalities ? 
 
 Mr. Robertson. Yes, sir. 
 
 The Chairman. If conditions are so bad on United States vessels 
 why did you return to the service? 
 
 WAGES BEST ON AMERICAN VESSELS. 
 
 Mr. Robertson. Because the wages are better on American vessels. 
 Therefore to pay and defray the expenses of a family ashore a man 
 undergoes a good deal of hardship for the sake of getting the few extra 
 dollars. 
 
 The Chairman. What about the fare and food? 
 
 Mr. Robertson. The food on an American vessel is better. 
 
 The Chairman. It is better? 
 
 Mr. Robertson. It is better. 
 
 The Chairman. What are your grievances, if you have any? I do 
 not know that you appeared to state any grievances, but what have you 
 to say to the Commission that will give us light on this important 
 subject? 
 
 Mr. Robertson. I would say that on American vessels there should 
 be more men in the fireroom, because a man is taxed to his fullest 
 capacity when he is down below, and if he happens to be taken sick 
 the other man has to do his work. Therefore a man is doing eight 
 hours' work and gets about four hours' sleep, and if he has to go 
 back and do eight hours' more in the fireroom it is pretty hard work. 
 
 The Chairman. How about vessels of other nationalities ? 
 
 Mr. Robertson. The men are not pushed so hard and the work is 
 not half so hard. 
 
 The Chairman. Have they more men in the fireroom? 
 
 Mr. Robertson. Yes, sir; according to tonnage. 
 
 The Chairman. How many more? 
 
 MORE firemen ON FOREIGN SHIPS. 
 
 Mr. Robertson. Well, from one to two; and on foreign vessels they 
 always carry what they call a day man; that is, a man who works in 
 the engine room, and in case a fireman gets sick he goes in and takes 
 that man's place, and that saves the men from doubling up. On an 
 American vessel there is no such thing. 
 
 Representative Minor. W^hat have you been firing? 
 
 Mr. Robertson. I have been with diflerent companies — American 
 vessels. 
 
 Representative Minor. Sailing across the sea? 
 
 Mr. Robertson. Yes, sir; i have been across the western ocean. 
 
378 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Representative Minor. Have you been engaged on tugs ? 
 
 Mr. Robertson. 1 have been on tugs and steamers, and trans- 
 Atlantic steamers. 
 
 Representative Minor. How many firemen do they carry on a 
 steamer engaged in the foreign trade that carries 3,000 tons? 
 
 Mr. Robertson. Carrying 3,000 tons? 
 
 Representative Minor. Understand me. Take a steamer making 
 about 11 knots an hour. Not one of these fast boats, but one of ordi- 
 nary speed. 
 
 Mr. Robertson. Nine men. 
 
 Representative Minor. How many watches ? 
 
 Mr. Robertson. Three watches. 
 
 Representative Minor. Three on a watch? 
 
 Mr. Robertson. Three on a watch. 
 
 Representative Minor. How many tons of coal would those nine 
 men handle each day ? 
 
 Mr. Robertson. On a steamer going at that rate she would burn 
 about 35 to 40 tons. 
 
 Representative Minor. During the twenty -four hours? 
 
 Mr. Robertson. Yes, sir. 
 
 Representative Minor. Nine men in twenty-four hours would handle 
 about 40 tons? 
 
 Mr. Robertson. Yes, sir. 
 
 five tons a DAT. 
 
 Representative Minor. Less than 5 tons to a man for twenty -four 
 hours? 
 
 Mr. Robertson. Yes, sir. 
 
 Representative Minor. Do you really regard that as a hardship? 
 
 Mr. Robertson. Take cleaning fires and the other work he has to do. 
 
 Representative Minor. I can understand that on a ship of very high 
 speed, making 15 or 20 knots, nine men could not do the work, but I 
 am calling your attention to a slow vessel — a vessel making 11 knots. 
 
 Mr. Robertson. Yes, sir. 
 
 Representative Minor. That is about the usual speed of an ordinary 
 freighter. Now, in the country I come from we would regard that as 
 a very light job — what the boys up there would call a "soft snap." 
 How many men would a foreign ship of the same type and same speed 
 employ in the fireroom ? 
 
 Mr. Robertson. I gave you the answer for the foreign vessel. 
 
 Representative Minor. I meant for the American vessel. 
 
 Mr. Robertson. I gave you the answer for a foreign vessel. 
 
 Representative Minor. How many would an American vessel carry? 
 
 Mr. Robertson. An American vessel will carry from six to eight. 
 
 Representative Minor. From six to eight? 
 
 Mr. Robertson. Yes, sir. 
 
 Representative Minor. Two on part of the watches and three on 
 the other watches? 
 
 Mr. Robertson. Yes, sir. 
 
 Representative Minor. How about coal passing? 
 
 Mr. Robertson. On American vessels, six hours for coal passing. 
 
 Representative Minor. How many men are engaged in passing 
 coal? 
 
HDAUINGS BEFORE THE MERCHANT MARINE COMMISSION. 379 
 
 Mr. Robertson. No matter how many men. The men do six-hour 
 watches on the American vessel. On an English vessel they do not do 
 any such thing. The coal passer has the same hours the fireman has. 
 
 Representative Humphrey. I understood you to say that you 
 engaged on an American vessel because it paid better wages. 
 
 Mr. Robertson. Yes, sir. 
 
 Representative Humphrey. Does the American vessel pay better 
 wages when engaged in the same trade as the English or the Norwe- 
 gian or the German vessel. 
 
 Mr. Robertson. Yes, sir. 
 
 Representative Humphrey. Then you do not agree with the gentle- 
 men who were before us here in the statement that the port fixes the 
 wages. Is that your experience? 
 
 Mr. Robertson. The sailor's grievance is altogether different from 
 the fireman's. 
 
 Representative Humphrey. With respect to firemen, then, the port 
 does not fix the wages ? 
 
 Mr. Robertson. Oh, yes. 
 
 Representative Humphrey. Does the American vessel pay the same 
 rate of wages that the foreign vessel engaged in the same trade pays? 
 
 Mr. Robertson. No; an American vessel will alwaj's pay more. 
 
 Representative Humphrey. Then the flag has something to do with 
 fixing the wages as well as the port, so far as firemen are concerned ? 
 
 Mr. Robertson. Sir? 
 
 Representative Humphrey. The flag under which a vessel sails has 
 something to do with fixing the wages, as well as the port? 
 
 Mr. Robertson. Yes, sir. 
 
 Representative Humphrey. And a fireman on an American vessel 
 is paid more? 
 
 Mr. Robertson. Yes, sir. A fireman on an American vessel gets 
 more wages than on a foreign vessel. 
 
 Senator Mallory. I should like to ask you a question. How do 
 the firemen ship; through what instrumentality do they as a rule ship? 
 Take a fireman who belongs to the union. He wants a berth aboard a 
 ship. What does he do? 
 
 Mr. Robertson. He will go aboard the vessel, and he will ask the 
 engineer for a job. The engineer will refer him to his favorite ship- 
 ping master or his favorite middleman. That man goes and sees this 
 man, and he is generally asked, " how much is the job worth? " 
 
 Senator Mallory. What is the question? 
 
 Mr. Robertson. " How much is the job worth?" The engineer has 
 not got the actual nerve to tell the man straight out that he wants so 
 much for the job, but he has this other man to do the dirty work, and 
 they halve the money up between them. That is the actual fact. 
 
 Senator Mallory. Is there the same system in the matter of advance 
 to firemen as in the case of seamen? 
 
 Mr. Robertson. Yes, sir; much on the same lines. 
 
 bringing crews from arroad. 
 
 There is another thing 1 should like to say to the Commission. A 
 good many foreign vessels, such as the Norwegian and the English, 
 come here, and the crimps steal all of the men out of those boats, 
 which came over here probably on a year's charter or two year's 
 
380 HEARINGS BEFORE THE MEBfBANT MARINE COMMISSION. 
 
 charter. The men were shipped on the other side, and tliey come over 
 here and are taken out by the crimps. Then the captain or the own- 
 ers send over to the other side and ship a whole crew, and they are 
 brought right here and put right aboard those vessels, and we are kept 
 out of jobs. 
 
 Senator Penrose. Has your union ever suggested or recommended 
 any remedy for some of the abuses you have referred to ? 
 
 Mr. Robertson. No, sir. 1 can not quite understand you. I am 
 very dumb. 
 
 Senator Penrose. You never got so far as to recommend any legis- 
 lation as a remedy for the crimp abuse ? 
 
 Mr. Robertson. Yes, sir. Our international union has a repre- 
 sentative at Washington once in a while. He is there, and he does 
 the best he can. 
 
 Senator Penrose. I know you have your representatives, but I did 
 not recall that they had ever recommended any remedy for some of 
 the matters which have been raised before the Commission. 
 
 Mr. Robertson. Those are things that we of late have been taking 
 notice of. We do not quite tumble to everything at once. 
 
 STATEMENT OF P. D. TODD. 
 
 P. D. Todd appeared before the Commission. 
 
 The Chairman. In what business are you engaged at the present 
 time, Mr. Todd? 
 
 Mr. Todd. I am resident agent in this city for the Allan Steamship 
 line. 
 
 The Chairman. Will you excuse me if I ask you whether you are 
 an American citizen? 
 
 Mr. Todd. No, sir; I am a Scotchman by birth, and a foreigner at 
 the present time. I have applied for papers. 
 
 The Chairman. You represent this foreign steamship company '. 
 
 Mr. Todd. A foreign corporation. 
 
 The Chairman. The Commission will be pleased to hear from you. 
 
 Mr. Todd. I may be permitted to premise my remarks on the sub- 
 ject under discussion by stating that while I am the resident agent in this 
 city of the Allan Line Steamship Company, a British corporation own- 
 ing and operating several lines of steamships between Great Britain, 
 United States, and Canadian and South American ports, I appear before 
 you to-day solely as the interpreter of my own ideas on this question, 
 and not in a representative capacity. Upon the understanding that 
 the inquiry of your Commission covers broad ground and is intended 
 to embrace all shades of opinion on the matter under discussion, and 
 to evolve therefrom a report to Congress, I take advantage of the 
 opportunity to express myself in a way that may be deemed somewhat 
 unorthodox. 
 
 It appears to me that the statement made by the Hon. Mr. Knapp at 
 the hearing in New York last week on freight differentials, in which 
 he defined the bounds of the inquiry before the Interstate Commerce 
 Commission to be the ascertaining of the effect of differentials on 
 the carriers, on the ports, and on the public, might be used, with a 
 slightly paraphrased reading, to indicate the limits of discussion before 
 your honorable body. 
 
HEARINGS BEFORE THE MEBOHANT MARINE COMMISSION. 381 
 
 As 1 understand it the parties interested in the inquiry are the 
 American shipbuilder, the American shipowner, and the American 
 
 ?iublic (the latter including the importer and exporter), and that, there- 
 ore, the decadence and attempted revival of the merchant marine 
 must be discussed from these points of view. 
 
 A BRITISH STEAMSHIP AGENT's VIEW. 
 
 The decadence of the shipping industry of the United States is not 
 in my estimation so much due to the fact of legislative neglect (as is 
 sought to be proven by the advocates of ship subsidies) discriminating- 
 duties, or other governmental panaceas, as to the fundamental fact 
 that the American citizen has found other and more profitable outlets 
 for his energy, enterprise, and capital, and has gradually withdrawn 
 from a business the profits in which have been steadily diminishing 
 within the past twenty-five years, and were always of a precarious 
 nature. That this condition of affairs can be improved upon or even 
 regulated to the public benefit by legislative interference is doubtful. 
 
 What the advocates of relief apparently desire, is: 
 
 First. Government aid in the way of bounty to enable ships to be 
 built. 
 
 Second. Assistance by restrictive or discriminating duties to prac- 
 tically shut out foreign competition in the ocean carriage. 
 
 Third. Government pay (on a very liberal basis) for the carriage of 
 mails, or other services that may be required by the Government from 
 the American merchant marine. 
 
 Those statements I took from the testimony of Mr. Clyde as given 
 before your honorable body in New York. 
 
 The necessity for a government bounty in connection with the con- 
 struction of ships in American yards is stated to be the added cost of 
 material and wages. Mr. Orcutt claimed the constructive cost of ships 
 in American yards to be 50 per cent higher than that for similar types 
 built in Great Britain. Mr. Hill says that his two recent experiments 
 in building the largest and finest vessels ever constructed cost 25 to 30 
 per cent over what they might have been built for abroad. 
 
 Mr. May to-day, before your commission, stated as his opinion that 
 an American-built ship costs about 40 per cent more than a like type 
 of British-built vessel. 
 
 It has also been stated that between the price of material furnished 
 to American shipbuilders and the same class of goods exported abroad 
 there was a very large difference in favor of the exported articile. It 
 seems to me that this anomalous condition might be readily adjusted 
 by the abolition of the tariff on such articles as might be imported 
 and used in ship construction. 
 
 The Chairman. Will you repeat the last sentence, please ? 
 
 Mr. Todd. It seems to me that this anomalous condition as between 
 the price of American material used in the construction of American 
 ships on this side and similar material exported abroad might be 
 readily adjusted by the abolition of the tariff on such articles. There 
 is a difference in favor of the exported article. 
 
 The Chairman. Under our existing law all material entering into 
 deep-sea ships is admitted into our American markets practically free 
 of duty. 
 
 Senator Mallory. There is a rebate of the duty. 
 
382 HEAKIKGS BEFORE THE MEKOHANT MARINE COMMISSION. 
 
 Mr. Todd. 1 was not aware of that. I can tell jou that our friends, 
 the New York Shipbuilding Company, in the latter part of 1902 
 imported from Great Britain, coming in on our line, I believe for the 
 construction of the two boats that were referred to to-day, the Mon- 
 golia and. the Manchuria, although 1 am not postive oa that point, 
 some 1,500 tons of structural material. 
 
 MATERIAL FREE OE DUTY. 
 
 The Chairman. They did not pay a single dollar of duty on that 
 material. 
 
 Mr. Todd. So much the better. 
 
 Senator Mallort. They paid the duty, but it was rebated. 
 
 The Chairman. It is substantially the same thing. 
 
 Mr. Todd. But the point I should like to make is that there is such 
 a dijSerence between the price of material for export and the material 
 that is used for home consumption. Of course, I am not speaking by 
 the book now. But whether the importation of this material for those 
 two vessels was in a general way due to the fact that the iron industry 
 here was so congested with orders that they could not supply the 
 material, or whether the shipbuilding company got it cheaper abroad, 
 is not for me to say. 
 
 Mr. De Courct May. Will you permit me to say a word? 
 
 The Chairman. Certainly. 
 
 Mr. May. None of that material was used in the construction of 
 deep-water vessels. It was used for the construction of two oil-tank 
 steamers that we built. Practically all the material in those tankers 
 was imported, and of course the duty was paid. No foreign steel, 
 except, I think, seven deck beams, was used in these ships that go in 
 deep water, and those beams were part of the material left over from 
 the construction of the tank ships. But the duty has been paid on all 
 that material. 
 
 Our reason for getting it abroad was because we could get the steel 
 in time, and it cost us about $3 a ton over and above what it would 
 have cost in this country. That is due to lighterage, to the expense 
 of handling, and also the fact that all the shapes had to be straightened 
 after they were transported. 
 
 The Chairman. Mr. May, in order that there may be no misunder- 
 standing on the subject, am I right in assuming that if you had used 
 that steel or other foreign iriaterial in the construction of the Man- 
 churia, you would have got a rebate of the duty which you paid ? 
 
 Mr. May. Ten dollars a ton — less, of course, the |3 which it cost us 
 to handle it; about $7 a ton. 
 
 The Chairman. Precisely. 
 
 Mr. Todd. I stand corrected, Mr. Chairman. 
 
 So far as wages are concerned it has always been contended that the 
 superior skill and large output of the American mechanic in compar- 
 ison with his foreign brother offset the lower wage list of the latter, 
 and it is up to the American mechanic to make good this boast. A 
 bonus or bounty would not, I am sure, result in any permanent good 
 in this connection. There may be a good deal of truth in the allega- 
 tion that under recent combinations and consolidations of the ship- 
 building industry of the United States extreme valuations have been 
 
HEARINGS BEFORE THE MEKCHANT MAEINE COMMISSION. 383 
 
 placed on the individual plants of the amalgamated concerns, and fixed 
 interest has to be paid upon these inflated valuations before dividends 
 can be declared. May not this in part account for the high construc- 
 tive cost of American-built ships 'i 
 
 FAVOES "free CKEWS" AND "fEEE SHIPS." 
 
 The cost of operation, particularly in regard to wages of crew, has 
 been insisted upon as a reason why a tonnage subsidy or bounty 
 should be granted to vessels built in the United States and flying 
 the American flag. Could not this condition be readily rectified by 
 allowing the American shipowner the freedom to secure his crews 
 unrestricted by the question of nationality? If the native-born or 
 naturalized citizen can find better or more remunerative employment 
 for his talents and energy than in going to sea, then give tnose who 
 are willing and ready to take his place an opportunity to do so, and 
 eventually make of them good American citizens. 
 
 Another and it seems to me a reasonable and effective way of reestab- 
 lishing and maintaining the supremacy of the American merchant 
 marine would be to grant to American capital the right to seek outlet 
 and make investment in foreign-built vessels, with permission, under 
 certain restrictions, for same to fly the American flag, confining, if 
 necessary, the functions of such vessels to the carriage of merchant 
 traffic upon the high seas. 
 
 FEAKFUL OF DISCRIMINATING DUTIES. 
 
 The question of discriminating duties is one which will not, in my 
 opinion, appeal to the sense of justice of anyone engaged in the import 
 and export trade of this country. The adoption of such a principle 
 would act as a restraint to commerce, would savor of class legislation 
 (where the few would be favored at the expense of the many), and would 
 assuredly lead to retaliation on the part of those countries whose fleets 
 were thus discriminated against. The hitherto unrestricted competi- 
 tion which has prevailed in the matter of carriage to and from Amer- 
 ican ports has been instrumental in the development of the resources 
 and strength of this country along lines which were not dreamed of 
 fifty years ago, and I believe still further progress would be made in 
 this direction were the tariff bars lowered or removed altogether. 
 This may seem like a heretical utterance in view of the political com- 
 plexion of the powers that be, but 1 am satisfied that without handi- 
 caps American pluck and enterprise could compete on equal terms with 
 the commercial activities of any other nation, that it does not require 
 strengthening from the Government pap bottle, and I can not conceive 
 why the American public should be called upon to contribute to the 
 support of special lines of industry to the exclusion of others equally 
 deserving of recognition. 
 
 The Chairman. If your theory were carried out, what do you think 
 would become of American labor? "Would it not sink to the level of 
 European or Asiatic labor if the tariff bars were entirely thrown 
 down, as you suggest? 
 
 Mr. Todd. I think the American mechanic is without a peer, and 
 that American ingenuity would take the chance as it did in days gone 
 
384 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 by to establish itself. I do not mean to say for a moment that it is 
 prudent possibly to remove the restrictions entirely, but at least they 
 might be in part removed. 
 
 The Chairman. Excuse me for interrupting you. 
 
 Mr, Todd. Certainly. 
 
 OBJECTS TO SUBSIDIES. 
 
 As regards subsidies, much has been said on this subject before the 
 Commission. Objection has been taken to the term, but "a rose by 
 any other name vs^ould smell as sweet," and whether we call it compen- 
 sation or subsidy or bounty the principle remains unchanged. Great 
 Britain is freely quoted as an example of a subsidized merchant marine. 
 Let me say, however, that I think it can be proven that the British 
 Government makes no contract for payment of subsidy for carriage of 
 mails except in return for value received, and the conditions, stipula- 
 tions, and penalties are so onerous that it is doubtful whether lines so 
 aided are in the end greatly benefited financially by the carriage of 
 His Majesty's mails. 1 am of opinion that a somewhat similar arrange- 
 ment at present exists in regard to the carriage of United States 
 mails. 
 
 The Chairman. Could you give us the amount paid by Great Britain 
 to any given line ? 
 
 Mr. Todd. No, sir; I ha\'e no figures at mj^ command at the moment, 
 but I may state to you, as an incident in this connection, that in 1897, 
 1 think it was, the Canadian government and the British Government 
 jointly entered into a contract to secure the establishment of a fast 
 Canadian mail service. Under the conditions that were imposed, a 
 regulated speed was required of those vessels, and a very large subsidy 
 was offered. The penalties exacted were to the effect that a per diem 
 charge would be exacted for the failure of the ship to sail on an 
 appointed day, that hourly penalties would be exacted if she did not 
 sail on the hour, and that the speed of those ships was to be maintained 
 at a minimum of 20 knots for the round voyage, without any exception 
 on account of weather conditions. 
 
 A firm of shipowners who were well established in the over-sea 
 trade accepted the contract, but when they came to float their venture 
 they found that the investing public would have none of it, because it 
 was proved that the conditions were incapable of being fulfilled. I 
 say that the British Government, in consideration for subsidies, insists 
 on receiving full service for what it may expend. 
 
 ALLAN LINE LONG SUBSIDIZED. 
 
 The Chairman. Let me ask you a practical question: Does the 
 Allan Steamship Line receive a subvention? 
 
 Mr. Todd. For many years we were the only line that ran between 
 Great Britain and Canada. We were the pioneers in that business. 
 We received a postal subvention and held it for a great many j'ears. 
 In the course of time, within the last twenty years I should say, com- 
 petition was inaugurated, and we have been under the necessity of 
 tendering for this business as between ourselves and our competitors, 
 and sometimes the Allan Line has received the subsidy and at the other 
 times the other companies have. These subsidies ' have been very 
 
HEAEINGS BEFORE THE MERCHANT MARINE COMMISSION. 385 
 
 largely and materially reduced in point of value, and except that there 
 is a pride in the fact that the line which carries the mail is the Royal 
 mail line, as they call it, there is not a great deal of money value in 
 the subsidy at present to the line that carries the mail. 
 
 The Chairman. Do you get a subvention at the present time':! 
 
 Mr. Todd. I am not sure whether we have the contract for the mails 
 or whether some other company has, but there is a condition attached to 
 the subvention by which the ships carrying the mails are under agree- 
 ment with the Government to carry a certain number of passengers, 
 which they call warrant passengers, at a fixed maximum rate. 
 
 1 do not think, sir, that I have anything further to say, except that 
 in my opinion a business-like arrangement on somewhat similar lines 
 to the British arrangement might, without great impi-opriety, be car- 
 ried on as between the United States and its American lines. I believe 
 there is some such arrangement in eflFect to-day. 
 
 NATIONAL AID WOULD HURT BRITISH SHIPPINLl. 
 
 The Chairman. I should like to ask you whether or n(jt you think 
 the rehabilitation of the American merchant marine l)y legislation 
 would injure your business and that of your principals? 
 
 Mr. Todd. It would depend, sir, altogether on how it was iicconi- 
 plished. 
 
 The Chairman. We will say by a subsidy, although this Commis- 
 sion is not conmiitted at all to that form of legislation. 
 
 Mr. Todd. How far, if you will excuse me for asEing a question in 
 return, for I want to be clear on the subject, would it Ije permitted 
 that the subsidy should reach? Would it be a subsidy bounty on the 
 ship, as has been stated to-day, or a payment by the Government for 
 value received? 
 
 The Chairman. 1 will ask you a more direct question, then. 
 
 Mr. Todd. Very well. 
 
 The Chairman. Did the steamship line which you represent take 
 any hand in trying to defeat the so-called ship subsidj^ bill in the last 
 Congress ? 
 
 Mr. Todd. 1 do not think so, sir; not to my knowledge. 
 
 The Chairman. You have not any information on that subject? 
 
 Mr. Todd. No, sir. 
 
 The Chairman. You are familiar with that bill, I suppose ; 
 
 Mr. Todd. Yes, sir. 
 
 The Chairman. What would you say in regard to it so far as the 
 interests of the line you represent ai-e concerned ? 
 
 Mr. Todd. I do not know that I am here to speak in the direct 
 interest of the line I represent, but it seemed to me at the time that it 
 savored of class legislation; that a few would be benefited at the 
 expense of the many. 
 
 The Chairman. Waiving that point, what then? We would be 
 responsible for that. 
 
 Mr. Todd. Certainly; 1 am quite aware of that. 1 do not want to 
 dictate to the Commission or to the United States what they shall do 
 in this matter. Far from it. I am here by invitation to state my 
 views. I have an idea that it would have a restrictive influence on 
 foreign competition. 
 
 The Chairman. I have no further questions. 
 
 3a— 04 25 
 
386 HEARINGS BEB'OBE THE MEBCHANT MARINE COMMISSION. 
 
 Senator Mallory. Do you not think that if that bill had been passed 
 
 few fast lines would have got the benefit of a big part of the subsidy ? 
 
 Mr. Todd. Yes, sir; I do indeed. That was the intent of it, I am 
 sure. 
 
 Senator Mallory. Do you not think that the American Linie would 
 have got more than anybody else at the start? 
 
 Mr. Todd. As the American Line is really the only line, with the 
 exception of lines on the Pacific coast, that isthoroughly American in 
 its nationality, 1 think it is about the only one that would have been 
 benefited by the subvention. 
 
 Senator Mallory. I think that was demonstrated. 
 
 STATEMENT OF LEWIS M. HAUPT. 
 
 The Chairman. Prof. Lewis M. Haupt has left a paper with me, 
 and 1 will ask the secretary of the Commission to read it. Professor 
 Haupt is known as one of the great engineers of the country. j 
 
 The secretary read as follows: 
 
 Mr. Chairman : Although my attention has been directed mainly to 
 the improvement of channels for large vessels, it is of no less impor- 
 tance that this country should own and control the ships which carry 
 her traffic to foreign markets. 
 
 The decrease in the tonnage carried in American bottoms since the 
 civil war is so well known and the agitation to improve the conditions 
 so futile that it is evident something more than discussion is required 
 to hiing about results and that the principal obstacle to the rehabilita- 
 tion of our commerce must come from remedial legislation. 
 
 Our navigation laws, judging from their effects, would seem to have 
 l)een framed to prevent Americans from competing with the ocean 
 curriers of foreign nations, since they prohibit us from taking advan- 
 tage of the cheapest markets for ships and the economies necessary to 
 their successful operation. 
 
 It is purely a business question, and while the fiction of protection 
 to the American shipbuilder remains there seems to be no relief save 
 the granting of such bounties or subsidies as will more than offset those 
 which are granted by the free-ship countries. 
 
 Protection operates well for certain industries within our borders, but 
 when it comes to the ocean carrying trade, in competition with other 
 nations capable of building and especially of manning and operating 
 ships more cheaply than we can do, it seems useless to handicap our 
 merchant marine by restrictions which prohibit the investment of 
 capital in this class of carriers. 
 
 Success in a busmess venture is not to be expected when the plant 
 proposed to be erected is found to cost more to install and maintain 
 than the large and powerful ones already in existence and which con- 
 trol the markets. This is about the condition which confronts us, and 
 unless we are permitted to purchase our plant in the open market and 
 to equip it with the best and cheapest mariners which the world affords, 
 and also to meet the subsidies which are voted to foreign vessels for 
 services rendered in distributing the exports of those countries our 
 competitors, and in providing their manufactures with cheap raw 
 material, there would seem to be no place for our American-built ships 
 in the carrying trade of the world. V^'e must meet these conditions 
 
HEAKINGS BKFOEE THE MERCHANT MARINE COMMISSION. 387 
 
 or go out of business and pay the freight bills to foreign nations, 
 amounting to nearly $200,000,000 annually. 
 
 The remedy seems plain. We can undoubtedly build as cheaply as 
 any country if the restrictions be removed. We should, however, be 
 permitted to buy our ocean carriers in any market, equip them from 
 any country, and enter them under American registry with such pre- 
 miums, subsidies, or bounties as would maintain them until the trade is 
 recovered, just as we encourage our inventions by letters-patent or 
 subsidize our railroads, waterways, or all other works looking to the 
 public weal. This done, our merchant marine will be restored in a 
 short time. 
 
 Respectfully submitted. 
 
 Lewis M. Haupt. 
 
 STATEMENT OF JOSEPH A. BALL. 
 
 Joseph A. Ball appeared before the Commission. 
 
 The Chaikman. totate to the Commission what interest you represent. 
 
 Mr. Ball. I am assistant treasurer of the Franklin Sugar Refinery 
 and also treasurer of the Maritime Exchange, and anything- 1 may saj' 
 here is not in a representative capacity, but merely in presentation of 
 my personal views. 
 
 It seems to me in what I have heard here and what the Commission 
 have heard here to-day, there have been some facts stated vipon which 
 nearly everybody agrees. One is that it costs more to build American 
 ships. Another is that it costs more to run them. Almost everybody, 
 seems willing to admit those two propositions, but when you get away 
 from them, it seems to me many men have many minds, and you have 
 had presented here to-day many views with regard to the matter. 
 
 There is one thing, however, about which 1 should like to speak to 
 you, which 1 did not hear touched upon by anybody else, and 1 will 
 conline myself wholly to that at this hour. That is the question of 
 our own country in its relation -to the Philippine Islands. You come 
 here and ask, What can be done to help American shipping? I do not 
 think, in one particular way, that you can do anything better than to 
 consider just that question. You have passed a law providing that 
 two years from now the mercantile marine law shall go into effect, so' 
 that the Philippine Islands shall be considered as in the coastwise 
 trade — in other words, that the islands are a pai't of this country — and 
 that means that American, and only American, vessels can trade back 
 and forth. 
 
 REDUCE PHILIPPINE DUTIES. 
 
 • If that is to be the case, they must have cargo, and to get that cargo 
 it seems to me you should, right alongside of that, pass a bill removing 
 the duties on the products of those islands coming to this country and 
 the products of the United States passing to the Philippines. Either 
 the archipelago is a part of our country or it is not a part of our 
 country. If it is a part of our country, and the navigation laws apply, 
 and it is coastwise trade, then very properly those people must use 
 our American bottoms. Jf they use American bottoms, being a part 
 of the country, it seems to me you can not fairly ask them to pay dut\' 
 on goods coming from one part of the United States to another part of 
 
.H88 HEAEINGS BEFOKE THE MERCHANT MARINE COMMISSION. 
 
 the United States. Neither should you ask the people of this country 
 to pay duty on goods coming from one part of the country to another. 
 
 Senator Malloby. Can you state what amoiint is realized from the 
 tariff on importations from the Philippines and from the imports into 
 the Philippines from this country'? 
 
 Mr. Ball. 1 am unable to give you the tigures. They are easily 
 ascertainable, however. 
 
 Senator Mallory. My understanding is that that money is to be used 
 to assist in paying the expenses of the government of the Philippines. 
 The question in my mind, which prompted me to make the inquiry, is 
 whether we would not have to tax ourselves if we would remove those 
 duties, in order to pay the expenses of the Philippines, as we probably 
 shall have to do in the case of the Hawaiian Islands. 
 
 Mr. Ball. 1 hardly see why we would have to tax ourselves and I 
 do not understand that the duties collected on goods brought from the 
 Philippine Islands to this country are kept separate at all. 
 
 Senator Mallory. They are not. 
 
 Mr. Ball. They are merged in the general fund. 
 
 Senator Mallory. We did do that with Porto Rico. I do not mean 
 to say I think we should do so. I merely make the inquiry because I 
 have heard it urged. 
 
 Mr. Ball. In the case of Porto Rico, for two years it was done, and 
 the fund was accumulated and paid to Porto Rico. To-day Porto Rico 
 stands in the attitude of being a part of this country. No duties are 
 charged on articles between their ports and ours. 1 leave it to you, 
 that the result of that is that the shipping is all carried in American 
 bottoms, and everything that is done in that country to further their 
 interests and to further the trade between the two countries has 
 helped American shipping. 
 
 Now, in the case of the Philippines, you come^to a voyage infinitely 
 longer, taking more ships, so far as time goes and as an actual matter 
 of fact, than Porto Rico does. It is a country which has possibilities 
 of a large amount of trade jn the future, and American shipping will 
 receive the benefit of it if it is considered a part of this country. If 
 it is not a part of this country, I can not see for myself any reason in 
 the world why you should apply the navigation laws to it. 
 
 STATEMENT OF ANTONIO SANS. 
 
 Antonio Sans appeared before the Commission. 
 
 The Chairman. May I ask what is your present business? 
 
 Mr. Sans. 1 have been in the shipping business in this port since 
 1874. 
 
 The Chairman. You are familiar with the scope of the inquiry that* 
 the Commission is charged with making? 
 
 Ml-. Sans. I think I rather understand it. 
 
 The Chairman. We shall be glad to hear any views vou may wish 
 to present. 
 
 Mr. Sans. I think the Commission has my statement in writing 
 before it. 
 
 The Chairman. I will ask thej^ecretarv to read it, 
 
 Mr. Sans. If you please. 
 
HEARINGS BEl'OEE THE MERCHANT MARINE COMMISSION. 3 SI I 
 
 The secretary read as follows: 
 
 Philadelphia, May '25, 190 Jf. 
 The Merchant Marine Commission, 
 
 The Bourse, Philadelphia. 
 
 Gentlemen: The cancer that slowly but surely has destroyed our 
 merchant marine is embodied, body and soul, in the obsolete and bar- 
 nacle-covered navigation laws of the United States. The agitation for 
 its renewal has been going the rounds for many years, and efforts here 
 and there ha\'e been made to solve the question. 
 
 In April, 1890, the Commercial Exchange of Philadelphia held a 
 meeting to deal with the subject, and the river and harbor committee 
 of that body reported certain recommendations, a copy of which I 
 attach hereto. Nothing came out of that meeting and nothing has since 
 been done in the matter. The recommendations of the river and har- 
 bor committee above referred to held good then and holds good to-day. 
 I hold that, at that time, if the United States had abrogated the navi- 
 gation laws above referred to the matter would not have come up at 
 this time, as it would have Enabled our people to purchase ships wher- 
 ever they could buy them cheapest, and the question of the cost of 
 running the ships would have been settled by this time. 
 
 It is true that under the existing law large shipbuilding establish- 
 ments have been developed in this country, but I doubt whether the 
 benefits derived from our gain in that industry are not much less than 
 the losses we have suffered through our disappearing shipping prop- 
 erty. 
 
 We pay to-day, and have paid, a tribute estimated at aboutf 150,000,000 
 annually to foreign bottoms, in the shape of freight on our exports, 
 imports, and passenger traffic. 
 
 The question of subsidy, so strenuously advocated and sugar-coated 
 with an option to the. Government to appropriate the boats in time of 
 war at their value, whilst in keeping with our policy of protection, 
 does not tend to protect our national Treasury. The Govei'nment has 
 the right to appropriate any property belonging to its citizens, both 
 real and floating, in times of war, by paying for it; and as to the ques- 
 tion of subsidy, you have only to follow the history of other coun- 
 tries in the matter to find discouragement in its application. 
 
 I believe that if the American manufacturers of steel and other 
 materials that enter into shipbuilding would sell to our builders as 
 cheaply as they sell to foreign builders, the cost of construction would 
 be very much reduced, and would enable our yards to turn out ships 
 in competition with foreigners. 
 
 I suggest that our navigation laws be abolished, and thereby open 
 the markets of the world to our citizens. 
 
 As to the question of cost of management, that will work itself out, 
 like many others which have been settled. Supply and demand of 
 hands, and other things entering into the cost of management, must 
 determine that phase of the question. 
 
 Faithfully, yours, ' Antonio Sans. 
 
390 HEARINGS HKKORE THE MJCKCHANT MARINE COMMISSION. 
 
 "Philadelphia, April 17, 1890. 
 "'The President and Board or Directors of the Commercial 
 Exchange. 
 
 "Gentlemen: At a meeting of the river and harbor committee, 
 held this day, the following suggestions and recommendations were 
 adopted and requested to be forwarded to the board of directors: 
 
 "As other countries having free ships have succeeded in driving our 
 commerce from the ocean, we having declined from 75 per cent to 13 
 per cent, and are compelled to pay foreigners two hundred millions a 
 year in the form of freight and passage; and as no other citizen of any 
 other country on the face of the earth, except a citizen of this country, 
 is denied the protection of his country, laws, and flag, if buying a ship 
 where he can purchase it at the lowest price; believing that were 
 American merchants permitted to buy their ships where they can buy 
 them as cheap as other nations buy theirs, we could compete success- 
 fully with them. 
 
 " We want the repeal of the navigation laws of the United States, 
 and the removal of all duties on shipbuilding materials, and a law 
 enacted which shall provide for the free admission of foreign-built 
 ships to American registry, with all privileges thereby offered. 
 
 ' ' Subsidies, bounties, and gratuitous giving of moneys is in oppor 
 sition to the innate characteristics of the American people, and, there- 
 fore, a stigma put upon American push, energy, and ingenuity which 
 we earnestly deplore. Superiority and skill, if untrammeled, will 
 assert themselves. Therefore we ask for our citizens free scope of 
 action, and offer the following suggestions and recommendations: 
 
 ' ' First. That our navigation laws as at present existing be abrogated 
 so that our ships may be allowed free access to our ports, and that 
 charges be made only commensurate with services rendered. 
 
 "Second. The encouragement to that portion of our citizens which 
 engages in such pursuits we leave to our Congress to provide. 
 
 "Third. The granting to American citizens the right by law to buy 
 ships wherever they can buy them cheapest, with the right to enroll 
 them under the American flag; such vessels, however, when foreign 
 built, to be excluded from our coasting trade. 
 
 "Fourth. That a liberal compensation be paid to ships under the 
 American flag for carrying of mails, with liberal allowance of money 
 consideration for the shortening of schedule, that the promptest mail 
 service be obtained. 
 
 "Fiftli, We are not oblivious of the protection due to our ship- 
 builders, and, therefore, recommend the building, whenever possible, 
 of our nascent Navy in private establishments, and in this and in ships 
 for domestic trade exclusively and for foreign trade by competition we 
 hold their protection is secured. 
 
 " Sixth. The admission, free of duties, of all shipbuilding materials 
 and materials used for the fitting up of American vessels. 
 
 "Seventh. The strict enforcement of the authority of our National 
 Government over the waterways and channels of communication of 
 the country that conflicts between States' jurisdictions shall not act 
 detrimentally to the interests of shipping. 
 
 " Eighth. The establishing of ports of call whenever practicable or 
 desirable. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. -^91 
 
 "Ninth. We recommend the continual surveillance by the Govern- 
 ment over our channels that ships may navigate without impediment. 
 
 "James B. Canbt, 
 "Hakvet K. Hinchman, 
 
 "Ctias. J. String, 
 "Antonio Sans, 
 " Committee mi Rivers and Harbors." 
 
 The Chairman. That, I understand, is a report from a committee? 
 
 Mr. Sans. Yes, sir; in 1890. 
 
 The Chairman. A unanimous report? 
 
 Mr. Sans. Yes, sir. 
 
 The Chairman. What became of it? 
 
 Mr. Sans. The report? 
 
 The Chairman. Yes. 
 
 Mr. Sans. Nothing came out of it. The gentlemen who attended 
 the meeting — I think Mr. Tucker was there 
 
 Mr. William R. Tucker. If I was there 1 opposed it. I think I 
 spoke against it very strongly. 
 
 Mr. Sans. I know you did, and that is what killed the meeting — you 
 and Mr. Brooke. I intended to embody that in the papei-, but I left 
 it out, out of a feeling of delicacj'. Your stentorian voice and that of 
 Mr. Brooke killed the meeting. 
 
 The Chairman. I assume you are absolutely and unqualifiedly for 
 free ships? 
 
 Mr. Sans. Not exactly; not a bit. I offer protection to our ship- 
 building establishments in those resolutions. That is part of my 
 statement. 
 
 The Chairman. If you admit free, ships built in foreign countries, 
 how do you protect the American shipyards? 
 
 Mr. Sans. For the foreign trade; exactly. 
 
 The Chairman. We are inquiring into just that branch of the ques- 
 tion. That is the duty with which we are charged. The coastwise 
 trade is amply protected now. 
 
 Mr. Sans. Yes. 
 
 The Chairman. We are asked to try to find a remedy for the pres- 
 ent depressed condition of our deep-sea navigation. Now you propose 
 to admit ships free from any nation on earth, and of course make it 
 impossible for this Commission or Congress to do anything toward 
 rehabilitating American shipyards. 
 
 COMPEL RAILROADS TO USE OUR SHIPS, 
 
 Mr. Sans. I do not think it would do any harm to the citizens of the 
 United States and to the Treasury of the United States to permit citizens 
 of this country to buy ships wherever they can buy them cheapest. 
 With all due regard to the scope of the inquiry, I may remark that 
 there are but two things in our schedules which are not allowed to 
 come into this country — ships and obscene literature. 1 do not know 
 whether the legal phase of this matter is correct or not; I am not a 
 lawyer; but it seems to me if we could only make a start, for instance, 
 by authorizing our citizens for the term of five yeas to buy up to and 
 not exceeding one million net registered tons in foreign countries, and 
 
392 HEARINGS BBFOKE THE MERCHANT MARINE COMMISSION. 
 
 then, if it is within the scope of Government authority, limit the ship- 
 ments made on through bills of lading from the interior of the country 
 to London and Liverpool and all the various ports, so as to compel them 
 to make the carriage of those goods by water in American bottoms, it 
 would be an entering wedge to establishing our merchant marine. I 
 think the thing is worth trying. If you allow one million tons to come 
 in there would be simply a nucleus at the end of five years, and in the 
 meantime our shipbuilding establishments would be busy building 
 vessels. What you want is to interest the American people in this 
 subject. They seem to be in a state of lethargy. They do not hanker 
 after the foreign shipping trade. 
 
 Representative Minor. Do you think it would be an advantage to 
 the American citizen to go abroad and buy his ship where he could 
 buy it cheapest ? 
 
 Mr. Sans. Yes, sir. 
 
 Representative Minor. Now let me ask you a question. Is it not a 
 fact that the American citizen to-day may go abroad and buy a foreign 
 ship? 
 
 Mr. Sans. Yes. 
 
 Representative Minor. He may do that with his own money and 
 operate the ship himself. Of course she has to be owned on paper by 
 foreigners and manned by foreigners, which makes her all the cheaper 
 to operate. The consensus of opinion and the testimony taken in New 
 York and elsewhere prove that it costs more to operate an American 
 ship under the American flag than it costs to operate a foreign ship 
 under a foreign flag. 
 
 Mr. Sans. There is no question about that. 
 
 Representative Minor. There is no question about it ? 
 
 Mr. Sans. No. 
 
 Representative Minor. If our citizens would avail themselves of 
 that condition and go abroad and buy a foreign ship, what advantage 
 would there be to put her under the American flag when they can 
 operate her cheaper under a foreign flag. 
 
 Mr. Sans. In the one case they would own the vessel outright. In 
 the other not. , If you would alter the navigation laws and permit those 
 vessels to be manned by any class of citizens, wherever you could get 
 the cheapest labor, then you would get on a par. 
 
 Representative Minor. That has been doubted. 
 
 Mr. Sans. Of course this is a very complicated matter, and I am 
 simply giving you my opinion. 
 
 Representative Minor. What we all want is to devise some means 
 wherebj'^ we may put an American citizen on all fours with the for- 
 eigner. If it be true that there is a difl'erence of 30 per cent in the cost 
 of operation, what advantage have you got in buying a ship abroad? 
 
 Mr. Sans. If you follow my suggestion and compel the railroads hav- 
 ing termini at the seaports to carry the goods on through bills of 
 lading to a foreign country on American boats, then you will have 
 helped the American boat that has been bought. 
 
 Representative Minor. Do you think legislation of that kind would 
 be acceptable to the country? 
 
 Mr. Sans. I am not a lawyer; I do not know whether it would be 
 class legislation or not. 
 
 Representative Minor. You are inclined to think it would be, though ? 
 
 Mr. Sans. I do not know anything about it. 
 
HEARINGS BJiFOKE THE MERCHANT MARINE COMMISSION. 393 
 FREE SHIPS AND FOREIGN LABOR. 
 
 Representative Humphrey. 1 understand, then, that your remedy is 
 free ships, operated by foreign labqr? 
 
 Mr. Sans. Any labor. 
 
 Representative Humphrey. Say by any labor — the cheapest labor 
 you can get? 
 
 Mr. Sans. Yes. 
 
 Representative Humphrey. According to the testimony which has 
 been introduced before this Commission, it would be foreign labor. 
 Now, how do you think it would benefit the American' merchant marine 
 to buy free sfiips aljroad and operate them with foreign labor ? 
 
 Mr. Sans. The wages would be the same. 
 
 Representative Minor. The testimony before the Commission, and 
 I thought you admitted the fact, was that American labor costs more 
 than foreign labor. 
 
 Mr. Sans. I do not think it lies in labor. I think it lies in the cost 
 of management. I think there is a veiy small difference between the 
 wages of an Englishman and an American. 
 
 The Chairman. There is a very great difference in the matter of 
 officers. 
 
 Mr. Sans. Yes; of officers. 
 
 The Chairman. It is very large. 
 
 Mr. Sans. With officers it is. 
 
 The Chairman. You would wipe that out? 
 
 Mr. Sans. Yes; I would put in a competent man to sail the vessel. 
 
 Representative Minor. You would bring down the price of Ameri- 
 can labor so that we could compete with foreigners ? 
 
 Mr. Sans. Yes, sir. 
 
 Representative Minor. Would you regard that as good American 
 policy? 
 
 Mr. Sans. I think i£ is as good American policy as any other. 
 
 Representative Minor. You do ? 
 
 Mr. Sans. I think the American would assert himself. 
 
 Representative Humphrey. If I understand you, then, your theory 
 is to purchase free ships and operate them with the cheapest labor 
 and then finally compel the railroads to patronize those particular 
 ships. That is your remedy ? 
 
 Mr. Sans. I do not say with foreign labor. 
 
 Representative Humphrey. I said the cheapest labor. 
 
 Mr. Sans. The cheapest labor. 
 
 Representative Humphrey. I changed my expression to "cheapest 
 labor." 
 
 Mr. Sans. That is right. 
 
 Representative Humphrey. Buy ships where you can buy them 
 cheapest, operate them with the cheapest labor you can get, and then 
 eventually compel the railroads to patronize those ships? 
 
 Mr. Sans. Yes; after five years; after they were given that trial for 
 five years. Why should we not? They have been getting the milk in 
 the cocoanut. Why should we not ask them to make a little sacrifice? 
 
 Representative Hvmphrey. I wished to get your idea. 
 
 Mr. Sans. You have got it. 
 
394 HEARINGS BEl'OBE THE MEKCHANT MARINE COMMISSION. 
 
 NO OBSTACLE NOW. 
 
 Senator Mallort. I have not heard much of what has been said, 
 and 1 should like for my own information to inquire whether there is 
 any law now which would prevent you from putting your money in a 
 liritish-built ship and running her under that flag? 
 
 Mr. Sans. I do not know whether there is, but I would have to get 
 some one else to do it. I could not do it outright. He would have to 
 give me a mortgage on the propert^^ 
 
 Senator Malloky. Is it not done largely to-day? 
 
 Mr. Sans. 1 think it is shameful that it is done. I do not thmk it 
 ought to be permitted. 
 
 Senator Mallory. I did not catch your answer. 
 
 Mr. Sans. 1 think it is shameful that it should be done. 
 
 Senator Maixory. Whether it is shameful or not, the evidence is 
 that it is done to the extent of nearly 1,000,000 tons. 
 
 Mr. Sans. Yos, sir; eight hundred thousand or a million tons. 
 
 Senator Mallory. Your object is to establish a business and make 
 money? 
 
 Mr. Sans. Yes. 
 
 Senator Mallory. If there is a profit in it, what is there to prevent 
 other American citizens who want to invest in the merchant marine 
 business from going into it? There is no law which prevents him. 
 You say we ought to repeal the navigation laws. You can enter that 
 business without touching the navigation laws, except that you have 
 to put your vessel in the name of a corporation. 
 
 Mr. Sans. Not a corporation. If I invest money in a foreign ship 
 I would have to take a mortgage on the ship. 
 
 Senator Mallory. That is your objection to doing it in that way? 
 
 Mr. Sans. Yes, sir. 
 
 STATEMENT OF WILLIAM R. TUCKER. 
 
 Mr. TucKEE. There was a slight controversy a moment ago, sir, on 
 the subject of the resolutions offered on behalf of the Committee on 
 Rivers and Harbors of the Commercial Exchange. According to my 
 recollection those resolutions were defeated by that organization. I 
 believe that I was a party to the effort to defeat them, which suc- 
 ceeded. I thought it was only fair that it should be made clear to the 
 Commission that the resolutions presented there, while expressing the 
 opinion of the committee in general, were not endorsed by the organi- 
 zation to which the resolutions were presented, but were defeated. 
 
 I think it is only fair to make that statement. 
 
 ADDITIONAL STATEMENT OF WILLIAM G. RANDLE. 
 
 The Chairman, 1 understand that Captain Randle wishes to make a 
 further statement. 
 
 Mr. Randle. Mr. Chairman and members of the Commission, I was 
 asked this morning to explain, from a practical knowledge of steam- 
 ship management, as to the wages paid to American seamen. We have 
 heard many remarks made to-day and pai'ticularly this afternoon with 
 respect to the abuses that exist on American ships, it has been my 
 
HKAKINGS BKI'-OKK THK MEKCHANT MARINE: COMMISSION. 395 
 
 ' fortune to have commanded for more than thirty years some of the 
 smallest as well as some of the greatest ships crossing the Atlantic, and 
 not only under our own flag, but under foreign Hags, and I know to-day 
 from practical experience in the management of those ships that the 
 abuses which have been put before you to-day will not bear examina- 
 tion. I can refute the statements which have been made. 
 
 AMERICAN WAGES BEST OF ALL. 
 
 For instance, we pay, of course, as everyone knows, a higher rate 
 of wages on American ships. The man is shipped before a United 
 States shipping commissioner. He has to go before that officer or his 
 representative to sign the articles on the American ship, and I have 
 never seen any difficulty in getting a first-class crew, both firemen and 
 sailors, on American ships. The reason is that we pay a higher rate 
 of wages — at least 30 to 35 per cent higher than under any foreign 
 flag. We also feed them very much better, as all people know who 
 have ever sailed on American and foreign vessels. 
 
 The abuses that have been put before j'^ou of watch and watch and 
 keeping up all the men from sunrise comparatively to sunset are not 
 found in practice. It is only when there is an occasional demand for 
 extra services, such as the daj"^ of entering or leaving port, when the 
 men are deprived of the afternoon watch off. At other times and on 
 all occasions the firemen have three watches. They have eight hours 
 below and four hours of duty alternately. The deck department has 
 watch and watch. They have four hours on deck and four hours 
 below continuously, and then each watch has two hours, called the 
 dogwatch, and that is changed, so as to equalize the amount of rest 
 •the men get. Therefore the abuses that have been stated here can not 
 exist. I have been there, and 1 have carried it out in practice for the 
 last thirt}' years or more. 
 
 AS TO CRIMPS AND CRUELTY. 
 
 Then, as regards the matter of crimps. The crimps have existed for 
 many years; and, as has been veiy truthfull}' stated and very properly 
 stated, until we enact a law making it a penal offense for an}' man to 
 influence or abduct, or by force or persuasion take a sailor from a 
 ship in port on arrival and shanghai him, as the term is, on board 
 another ship, it will continue. That offense should be punished very, 
 very severely by the laws of our country. Do that and the sailor will 
 be well protected. He is well protected by our laws, if our laws are 
 properly carried out. 
 
 The Chairman. What have you to say as to the alleged cruelties 
 practiced on the men? 
 
 Mr. Randle. On sailing ships across the Atlantic in former years, 
 say from 1851 to 1865, no doubt there were many acts of cruelty, but 
 at that time there were a very hard set of seamen on board of those 
 ships, and they required very severe discipline. At times, where they 
 were not subservient to discipline and were not subject to it, there is 
 no doubt that there were some acts of cruelty. There are exceptions 
 in all cases. The general treatment of the American sailor to-day — 
 and I know from practical experience — is as good, and better, than 
 that under any flag in the woild. [Applause. J 
 
39(3 HEARINGS BKFOKK THK MKKCHANT MABTNK COMMISSION. 
 SCHOONERS BETTER EQUIPPED. 
 
 The Chairman. Both in New York and here complaint has been 
 made that certain vessels— I judge of an inferior flass— are under- 
 manned. What can you say on that point? 
 
 Mr. Randle. The fore-and-aft schooner has been quoted here as 
 Ijeing the particular ship that is undermanned. The \'ast improve- 
 ments that have been made in the general apparel of a ship to-day 
 are so far superior to what it was a few years ago, that it is quite pos- 
 sible to conduct those ships successfullv with a very much reduced 
 number of men. The majority of the large three-masted schooners 
 to-day, and the four and five and six masted schooners, and the one 
 seven-masted schooner are invariably fitted with steam power for 
 handling the sails. Then in case of sudden emergency the time and 
 attention of only three or four men are required to handle the ropes, 
 and every sail comes down. 
 
 In a square-rigged ship it is entirely different, but the three masted 
 and four masted and five masted schooners are the ones which ha^e 
 been quoted here as being undermanned. I do not think they are at 
 all undermanned, considering the increased facilities on board those 
 ships to-day. 
 
 Representative Minor. Is it not true that the owner who undermans 
 a vessel takes the greatest chance on the safety of his property ? Is he 
 not as much interested in having an efficient crew as the sailors possi- 
 bly can be? 
 
 Mr. Randle. Certainly; and more so. 
 
 Senator Mallort. But he is insured ? 
 
 Mr. Randle. He would not risk his property for the sake of the 
 wages of one or two men. 
 
 Senator Penrose. Would not the insurance protect the owner? 
 
 Mr. Randle. Yes; the insurance would protect the owner. 
 
 Senator Penrose. Therefore, being insured, it would be to his inter- 
 est to get along with as few men as possible. 
 
 a rembdt at hand. 
 
 Mr. Randle. But it is right in the hands of the men themselves, 
 Senator. If the crew, when they ship — and they ship before the com- 
 missioner — know that four men are sufficient for that vessel, then 
 they are willing to go. They are free agents. They need not go on 
 board a ship if they consider her undermanned. But they accept a 
 certain amount of wages for certain work, and the same men to-day 
 are in the coasting trade, and go from ship to ship and from ship to 
 ship and keep in the coasting trade preferably to going into the foreign 
 trade. Why ? Because they get more wages, and they get, to a cer- 
 tain extent, better food, because the ship is more often in port and 
 provisions are more often changed, and the better sailors in our coast- 
 ing trade to-day will not go in a seagoing ship for that reason. There 
 is a better class of men in the coasting trade to-day, small as it is, than 
 in the foreign trade. 
 
 Senator Mallort. From your experience as master of a large ship, 
 engaged in international commerce, can you tell me whether there is 
 any different rule as to term of enlistment of your crew from that 
 
HEARINGS BEFOKE THE MERCHANT MARINE COMMISSION. 397 
 
 wlik'h ordinarily prevails? In other words, do you ship a man for the 
 voyage or by the month, or how do you do it aboard such vessels as 
 the St. Louis, for instance? 
 
 Mr. Randle. That is something which for the moment slipped my 
 memory. 
 
 Senator Mallokt. It is a subject upon which I wish to get some 
 information. 
 
 HOW MEN AKE SHIPPED. 
 
 Mr. E.ANDLE. Sailing from a port in the United States to a foreign 
 port, we invariably ship the men for a certain voyage, to and back to 
 a final port of discharge in the United States. On arrival in that for- 
 eign port, where, for instance, the ship may under certain circum- 
 stances go to be loaded up, the captain can not discharge that crew 
 without aepositing three months' wages with the American consul as 
 security that those men will not be allowed to become objects of char- 
 ity. The three months' wages are used for the transportation of those 
 men back to the United States. That is our law. If it is decided, and 
 the men are willing to be discharged, which they invariably are under 
 those conditions, there are three months' wages paid, even if they have 
 been on board the ship only across the Atlantic for ten days. 
 
 Senator Mallory. In your'experience in command of one of those 
 liners did you ship your men on this side for the round voyage or did 
 you occasionally ship them on the other side ? 
 
 Mr. Randle. We never shipped them on the other side unless there 
 ^\"ere desertions. 
 
 Senator Malloky. Could you have shipped them ? What was your 
 port of destination? 
 
 ]\Ir. Randle. Southampton. v 
 
 Senator Mallory. Could you have shipped youi- crew from here to 
 Southampton to be discharged there? 
 
 Mr. Randle. It could have been done. 
 
 Senator Mallory. Would it not have paid you to employ your crew 
 on the other side, at the so-called English wages, rather than to ship 
 them here at the higher wages ? 
 
 Mr. Randle. On our arrival there we could not throw them on the 
 charity of the consul. 
 
 Senator Mallory. But you have just said that you shipped your 
 men here to be discharged at Southampton. 
 
 Mr. Randle. That would be called by the run. They would receive 
 so much wages for the run over. 
 
 Senator Mallory. I understood you to say that it was your rule to 
 ship here for the round voyage. 
 
 Mr. Randle. Yes, sir. 
 
 Senator Mallory. Would it not have saved the vessel considerable 
 expense to ship them on the other side for the round voyage; that is 
 to say, from Southampton to New York and back to Southampton ? 
 
 Mr. Randle. Not for this very reason, that we could not ship the 
 men ovgr there to come over here and to be returned to a final port of 
 discharge in the United Kingdom. 
 
 Senator Mallory. You could not do that? 
 
 Mr. Randle. No, sir. 
 
 Senator Mallory. Why not? 
 
398 HEAIUNGS UKFOKE THE MERCHANT MARINE COMMISSION. 
 
 ENGLISH LAW DIFFEKKNT. 
 
 Mr. Kandle. Because the English law will not allow a man to be 
 discharged in a foreign port. The English law is entirely different 
 from the American law in that respect. 
 
 Senator Mallory. Do you mean to say you could not ship men 
 in Southampton to come to New York and back to Southampton ? 
 
 Mr. Randle. Only by the run; not on the regular articles, before 
 the United States consul and the English authorities. You can ship 
 them by the run for $10, or $20, or |50, or whatever may be agreed 
 upon, for the run to Philadelphia or New York. 
 
 Senator Mallory. Suppose you lost three or four men and you 
 wanted to replace them. When you came to ship them in the foreign 
 port, what rate of wages did they demand as a general rule ? 
 
 Mr. Randle. Four pounds — twenty dollars. • 
 
 Senator Mallory. The rate of wages prevailing in England ? 
 
 Mr. Randle. No, sir. The rate of wages prevailing in the port- 
 four pounds to four pounds ten. 
 
 Senator Mallory. It was not the American flag that tixed the wages, 
 but it was the rate of wages prevailing in the port. 
 
 Mr. Randle. Yes, sir, to a great extent; but an English ship under 
 the same conditions could get men at a less price. 
 
 The Chairman. Mr. Randle, you heard the testimony as to ship- 
 masters starving sailors and then discharging them in foreign ports 
 without paying them the wages due them. Did you ever know of an 
 instance of that kind? 
 
 iMr. Randle. 1 have heard of instances of that kind, Mr. Chairman, 
 where a ship was going to be delayed a long time in port waiting a 
 charter. I have heard of instances where the captain and the officers 
 have tried to run the men out of the ship by increasing the hours of 
 labor and reducing their food. That has come under my notice several 
 timers in foreign ports, out on the west coast of South America. 
 
 The Chairman. It must be a very unusual incident. 
 
 Mr. Randle. It is very unusual. It is only when a man forgets 
 his moral obligation as commander of a ship that he resorts to the 
 practice. 
 
 On the following day MR. RANDLE said: 
 
 Mr. Chairman, 1 wish to ask the privilege of correcting a statement 
 I made yesterday in reply to Senator Mallory's question regarding the 
 shipping of sailors on American ships in foreign ports. 
 
 The Chairman. You are at liberty to do so. 
 
 IN conflict with AMERICAN LAWS. 
 
 Mr. Randle._ The Senator asked me whether it would be proper 
 and perfectly right for a ship to fill up, in foreign ports, vacancies 
 that might occur by desertion, death, or sickness on American ships. 
 I stated, under a misapprehension of his question, that it would come 
 in conflict with English laws. I meant to say it would come in con- 
 flict with our laws, the American laws regarding contract labor. That 
 is to say, the men whom we used to fill those vacancies, on arrival 
 here, would have to be discharged, and then if we wished to take them 
 back they would have to be reshipped before a United States shipping 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 399 
 
 foiuuiissioner and be paid Amei'ican wages. I wish to make that cor- 
 rection. Is that satisfactory ? 
 
 Senator Mallory. The point I was trying to reach was a little 
 beyond that. It was whether it would not pay an American ship- 
 master to ship his crew in Southampton for the round voyage to New 
 York and back to Southampton ? 
 
 Mr. Raxdle. We could snip them onty as far as New York. There 
 they would have to be discharged and then be shipped before a United 
 States shipping commissioner and paid American wages. 
 
 Senator Mallory. You mean under our labor laws? 
 
 Mr. Eandle. Yes, sir. 
 
 Senator Mallory. You would ship them from Southampton to New 
 York, and would stop at New York only long enough to take on cargo. 
 That would not be importing them into this country. 
 
 Mr. Randle. An American ship can not ship them in a foreign port 
 for the round voyage. They would have to be discharged before a 
 United States shipping commissioner here. 
 
 Senator Mallory. Do you mean to say that there is a law on the 
 statute books prohibiting an American ship from shipping uicn in a 
 foreign country for the round voyage — from their home port to this 
 country and back to the foreign country 'i 
 
 Mr. Randle. Yes, sir. They would have to be discharged in this 
 country before a United States commissioner and then reshipped at 
 American wages. 
 
 Senator Mallory. - Thank you. 
 
 STATEMENT OF E. K. STEVENSON. 
 
 E. K. Stevenson appeared liefore the Commission. 
 
 The Chairman. State to the Commission what your occupation is. 
 
 Mr. Stevenson. 1 was for about twenty years a sugar refiner and 
 an exporter and importer from the West Indies, South America, and 
 China. I am not now engaged in mercantile pursuits. 
 
 The Chairman. The* Commission will be glad to hear anything you 
 may have to say. 
 
 Mr. Stevens. Mr. Chairman and gentlemen of the Commission, 
 Philadelphia has long had a warm interest in fostering and extending 
 American commerce in American-built ships. On February 7, 1871, 
 the American Steamship Company was chartered by the legislature of 
 Pennsylvania, and shortly thereafter it had built at Cramp's shipyard 
 four steamships — the Pennsylvania, the Ohio, the Indiana, and the 
 Illinois— vihich formed the American line plying between Philadel- 
 phia and Liverpool, and which remained in that service, under the 
 American flag, until they were driven from it by the overpowering 
 competition of foreign built and manned ships. The various bills 
 relating to shipping which have been introduced in Congress have 
 received careful attention here, and there is a sentiment in favor of 
 the enactment by Congress of some legislation by means of which 
 American built ships shall obtain for this nation a rightful share of 
 the commerce of the world. 
 
 When the great Far West was being opened up and developed the 
 Government found itself unable to provide adequate mail service to 
 many places therein at the rates which were then authorized by existing 
 
400 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 law, and in order to overcome the objections of intending settlers to 
 taking up their abode in a region where mail facilities would be denied 
 them, Congress enacted what has been called the star route bill, 
 under whicn compensation sufficient to pay the cost of mail service 
 could be made and those settlers could enjoy mail facilities which 
 otherwise would have been denied them until those communities had 
 become so thickly settled that the ordinary rates of payment for mail 
 service would be sufficient to maintain it.- That act cost some addi- 
 tional money for mail service, but the opening up and development of 
 that great area beyond the Mississippi, which was hastened by it, 
 returned that additional cost to the nation and the people at large 
 many fold. 
 
 NATIONAL HELP NEEDED. 
 
 Now we have a condition of decadence in the employment of Ameri- 
 can-built ships in our foreign commerce which is not creditable to this 
 great nation, and to relieve it and to change it into a condition of 
 American-built ships obtaining a large and increasing share of ocean 
 traffic between the ports of the United States and foreign ports, the 
 fostering care and support of the National Government should be 
 extended. To those who are familiar with the shipping trade it is 
 well known that under the excellent navigation laws of the United 
 States it costs more to sail an American ship than it does to sail a for- 
 eign ship under the laws of any other nation, and to meet that addi- 
 tional cost I suggest that Congress should enact legislation by which 
 any American built steamship, having a tonnage greater than a certain 
 minimum and a speed exceeding a certain minimum, should be paid by 
 the United States Government a certain sum per ton per mile on its 
 outwrad voyage from any port in the United States to a foreign port. 
 
 AN EXPORT BOUNTY. 
 
 The tonnage should be computed solely upon its cargo carried. Any 
 steamship intended to receive payment under this legislation should be 
 measured by a Government officer appointed for that purpose, and its 
 cargo capacity, thus ascertained, should be recorded in the Treasury 
 Department before it be permitted to avail itself of such compensation. 
 Upon this being done a certificate of such measurement, as recorded, 
 should be issued to the steamship. At the time of the clearance of 
 such steamship the collector of the port at which it clears should issue 
 to it a certificate of the cargo tonnage then laden on boar^, which 
 should be the basis upon which payment should be made. A subsidy 
 of this kind would be general, and the people of the interior States, 
 who are said to be at least lukewarm upon ship-subsidy legislation, 
 would see the advantages which they would attain by being helped 
 thereby to better secure foreign markets for their products. 
 
 STATEMENT OF SAMUEL B. MACDONNELL. 
 
 Samuel B. Macdonnell appeared before the Commission. 
 
 The Chairman. Mr. Macdonnell, what is your present business^ 
 
 Mr. Macdonnell. I am a marine compiler. 
 
 The Chairman. What is the meaning of that term? 
 
HEABINGS BEFORE THE MERCHANT MAKINE COMMISSION. 401 
 
 Mr. Macdonnell. I compile the statistics about which the people 
 in the country have been buncoed, sir, by the false reports of the Com- 
 missioner of Navigation. 
 
 Mr. Chairman, I wish to say that I am an American; I am a Phila- 
 delphian, and I am a Democrat — one of the Sam Randall kind. I 
 believe in protection to American ships. [Applause.] 
 
 The time has arrived when something must be done to save what is 
 left of the American merchant marine. Three things confront us — 
 subsidy, discriminating duties, or free ships. 
 
 Either one of the former measures would place our shipowners upon 
 an equal basis with foreign-built and foreign-owned ships, while the 
 latter one would wipe out every shipyard of note on the Atlantic and 
 Pacific coasts. The shipping question has been dodged by every Con- 
 gress since the war, and the old Bureau of Statistics as well as the 
 present Bureau of Navigation has done nothing but put out figures to 
 mislead and fool the people ever since. 
 
 According to the annual report of Eugene Tyler Chamberlain there 
 were 24,425 American vessels of 6,087,345 gross tons afloat on July 1, 
 1903, which were divided in four classes — steam, sail, canal boats, and 
 barges, as follows: 
 
 
 Number. 
 
 GrosB ton- 
 nage. 
 
 steam 
 
 8,064 
 
 12,836 
 
 695 
 
 2,840 
 
 3,408 088 
 
 Sail 
 
 1,965,924 
 78,406 
 
 
 
 
 
 Total 
 
 24,425 
 
 6,087,845 
 
 
 These figures, if correct, would go to show without any argument 
 that nothing was needed to aid our merchant marine, for a country 
 that can boast of 24,425 vessels needs no legislation to help it along. 
 
 But to analyze the figures shows that these 24,425 vessels mostly 
 consist of catboats, sloops, small schooners, ferryboats, dredging ma- 
 chines, towboats, side-wheel steamboats, and other craft that could 
 not go down the Delaware River as far as the Breakwater, let alone 
 go to sea. 
 
 STEAM VESSELS. 
 
 The report states that we have 8,054 steam vessels of 3,408,088 
 gross tons. Now we will see what they are:_ 
 
 No. Tona. 
 
 Total steam vessels, per Chamberlain's report 8, 054 3, 408, 088 
 
 Deduct vessels from 6 to 50 tons 3, 279 76, 946 
 
 Deduct vessels from 50 to 100 tons 1, 382 101, 459 
 
 Deduct vessels from 100 to 500 tons 1, 915 432, 446 
 
 Deduct vessels from 500 to 1,000 tons 539 378, 528 
 
 Deducttotal ! 7,115 989,379 7,115 989,379 
 
 Leaving steam vessels over 1,000 tons 939 2, 418, 709 
 
 Deduct Great Lakes steamers over 1,000 tons 506 1, 273, 068 
 
 Deduct Western river steam vessels over 1,000 tons 10 15, 186 
 
 Deducttotal 516 1,288,243 516 1,288,243 
 
 Leaving steam vessels over 1,000 tons on coasts 423 1, 130, 466 
 
 Now if these 423 steam vessels of 1,130,466 tons were seagoing 
 steamships we would be all right and could boast of some progress in 
 3a— 04 26 
 
402 HEABINGS BEFORE THE MERCHANT MARINE COMMISSION. . 
 
 the past few years, but a number of these 423 vessels are large ferry- 
 boats, side-wheel steainbo&.ts; dredging machines, and the like. 
 
 There are less than 939 American steam vessels of over 1,000 tons on 
 the Lakes, on the Pacific, on the Gulf, and on the Atlantic. Deduct 
 those on the Great Lakes and the Western rivers and it brings us down 
 to 423 steam vessels, and of those 423 ships about one-third are the big 
 ferryboats that run from Jersey City to New York and from Phila- 
 delphia to Camden, and the vessels that run from Arch street down to 
 Gloucester, N. J. 
 
 We have nothing, and we must do something to get a merchant 
 marine. We can get it only by a subsidy or something that will help 
 the industry. 
 
 Mr. Thurber told you about how the party I belong to broke John 
 Eoach, but 1 want to say that if the United States maintains its present 
 policy it will break every shipyard from Eastport, Me., to Galveston, 
 and on the Pacific coast there will not be a shipyard left. 
 
 SAIL VESSELS. 
 
 Now, we come to sailing vessels. You never heard of a steamship 
 making sailors. Sailors come from the sailing vessels. The sailor 
 is made aboard a sailing vessel. As for sailing vessels, the loss is 
 appalling. On January 1, 1870, we had 2,295 square-rigged vessels, 
 and by the records of the Bureau of Navigation we had, on June 30, 
 1903, 350, and most of them that were not wrecked were uninsurable, 
 
 I mean by "not wrecked," wrecked, but kept in the list to pad it. 
 The loss of 1,945 captains, 1,945 first mates, and 1,945 second mates 
 alone would ofiicer to-day every American steamship and sailing ves- 
 sel over 100 tons gross register that goes to sea from an Atlantic, 
 Pacific, or Gulf port. 
 
 As I say, sailing vessels make sailors, and yet every piece of legis- 
 lation passed by Congress in thirty years has been against sailing ves- 
 sels. For instance, the new steel schooner Thmnas W. Lawson., built 
 at Quincy, Mass., in 1902 is compelled under the act of December 21, 
 1898, to be inspected yearly, and must have a licensed captain and a 
 licensed mate, while the foreign-built barge Coal King, built in Nova 
 Scotia in 1878 can go to sea without inspection and without a licensed 
 captain or licensed mate, and yet both these vessels are classed by the 
 Commissioner of Navigation as sailing vessels. The former is a schooner, 
 the latter a converted coal barge. For statistical purposes she is a 
 schooner, but when a harsh law is passed that would affect her, she is 
 only a coal barge. 
 
 Now, Mr. Chairman, I want to say something about the four things 
 that will help us. The first thing is to stop the placing of any more 
 foreign-built vessels, whether wrecks or not, under the American flag. 
 We stop crippled immigrants from coming into our country; why 
 should we admit broken-back ships and let tnem run in our coastwise 
 trade ? If a man has a chronic disease, you stop him from coming into 
 the country, and yet you have admitted 325 vessels that are mostly 
 run in our coastwise trade in opposition to the high-priced vessels we 
 put out. 
 
 Revise the United States statutes so that sailing vessels can success- 
 fully compete with barges and steamers. A law is a farce that allows 
 a rotten hulk of a converted coal barge to go to sea overloaded and 
 undermanned without inspection, while a new sailing vessel oi' the 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 403 
 
 same tonnage is compelled to have a licensed captain, a licensed mate, 
 and be inspected yearly. 
 
 These coal barges are old converted foreign-built vessels. They 
 come here and get into distress and are cut down into coal barges. 
 
 Representative MrsroK. Sailing vessels. Make yourself clear. They 
 are old foreign-built sailing vessels. 
 
 Mr. Macdonnell. Yes, sir; dismantled and made into what we call 
 coal barges. Five or six of them will go down the coast at one time in 
 tow of one tugboat, and the tow occupies a mile and a half of the 
 ocean, and it is a menace to any good vessel that sails. 
 
 Permit an advance to sailors and do away with the blood money 
 which robs vessel owners of thousands of dollars yearly. 
 
 DIFFERS WITH THE UNION. 
 
 1 disagree with the union in the statement of the wrongs done by 
 captains of vessels. There are some, and they should be punished, 
 but the only case that occurred here recently was where the sailors' 
 union licked a nonunion man for going aboard a vessel, and evidence 
 as to that will be presented to you to-morrow by Mr. Craig. If the 
 Commissioner did what is alleged he ought to be removed, but 1 think 
 when he testifies to-morrow you will hear the whole story. 
 
 Give every American vessel engaged in the foreign trade either a 
 subsidy or a discriminating duty, but be sure to grade it so that the 
 small sailing vessel shall be taken care of. New ports are opened by 
 small sailing vessels. As trade grows, larger sailing vessels are put 
 on, then small steamships, then larger ones, and so on. 
 
 Take the fruit trade in which the Admirals, the four finest vessels 
 in the world in that trade, are engaged — the Dewey, the Sampson, the 
 Farragut, and the Schley. Now, that trade was originated by small 
 fishermen in the summer time who went to Port Antonio, Jamaica, 
 and to Cuba, and brought up bananas to this country. As the busi- 
 ness grew, Warner & Merritt started in to build vessels of 150 tons 
 register. Then they got an auxiliary steam vessel^ and eventually 
 we obtained the four finest vessels in the world going to sea in the 
 fruit trade. 
 
 Mr. Chairman, with respect to foreign vessels I wish to submit a 
 statement. On January 1 of this year I compiled a paper showing 
 that 153 foreign-built tramps were flying the American flag, of which 
 132 are running in the coastwise trade in direct competition with 
 American-built vessels, and the first thing you can do to help American 
 \'essels is to amend the law which allows foreign-built vessels under 
 any consideration ever to be used in the coasting trade. Especially 
 try to put an end to the evil of special legislation in Congress admit- 
 ting such vessels to American register. There are 70 or 80 more 
 ready to come in. If you allow them to come in you will not build 
 another merchant vessel on the Atlantic coast in ten years. 
 
 FLOATING COFFINS MUST ' GO— CONGRESS WILL MAKE LAWS THAT 
 WILL PROTECT LIFE AND CA'BGO AT SEA. 
 
 The North American's work of exposing the floating coffins on the North Atlantic 
 Ocean is about to bear fruit. Senator Perkins, of California, a large owner of vessel 
 property, has introduced into the United States Senate a bill, which, if it becomes a 
 law, will drive more than one-flfth of all the American seagoing sailing vessels and 
 barges out of business and will compel another fifth of them to do repairs that will 
 
404 HEAKINQS BEFOEB THE MERCHANT MARIWB OOMMISSIO 
 
 keep shipyards busy for sometime to come. The bill is known as S. o , ' .„ „ ^ 
 "Al)ill to provide for the inspection of certain seagoing sail vessels ana oarges ana 
 to protect life and property at sea." , , „ dmilar hill in 
 
 Congressman Jotn H. Small, of North Carolina, has iiitro^uced a similar Diu in 
 the House of Representatives, which is more severe in some respects tn^ne^eu oena- 
 tor Perkins's bilf. It provides for a load line mark, the same ^s the t^hmsou mark 
 on British vessels, and while it deals severely with vessels over ^^'^ ^°^^^^^?l^^ 
 ter, it makes no provision for the old worn-out two-masted schooners which are 
 numerous on the Atlantic coast. The Small bill is known as a. a. iioto. 
 
 The following are the bills as introduced: 
 
 INSPECTION OF ALL SEAGOING- VESSELS. 
 
 Senator Perkins, of California, on January 2, 1904, introduced into the United 
 States Senate a bill known as S. 3861, entitled "A bill to provide for the inspection 
 of certain seagoing vessels and barges and to protect life and property at sea. 
 
 ' 'Be it enacted by the Senate and House of liepresentatiivs of the United States of America 
 ill. Congrexs assembled, That the owners of any seagoing sail vessel or seagoing barge 
 of 100 gross tons or over and over twenty years of age shall, at least once in every 
 year, apply for the inspection of the hull of said vessel by the local inspector of. hulls, 
 and it is hereby made the duty of said inspector to inspect such vessel. If the 
 inspector is satisfied that the hull of the vessel is suitable for the service in whiih 
 she is employed, has suitable accommodations for the crew, and is in a condition to 
 warrant the belief that she may be used in navigation with safety to life, he shall 
 issue a certificate of inspection in a form to be presented by the Secretary of Com- 
 luerce and Labor. 
 
 "Sec. 2. That a register, enrollment, or license clearance, or other paper shall not 
 be issued by any collector or other chief ofiicer of customs to any vessel described in 
 section 1 unless at the time said vessel has in force a certificate of inspection as pro- 
 vided in section 1. If any such vessel shall be navigated without such certificate of 
 inspection the owner shall be liable to a penalty of 1500 for each offense. 
 
 "Sec. 3. That this act shall take effect on and after July 1, 1904." 
 
 A PLIMSOLL MARK FOB 'ALL A.MEBICAN VESSELS OVER 300 TONS KEGISTEK. 
 
 Congressman Small, of North Carolina, on February 3, 1904, introduced into the 
 House of Representatives a bill known as H. R. 11675, entitled "A bill to amend the 
 navigation laws and to secure the safety of vessels." 
 
 ' ' Be it enacted by the Senate and House of Representaiives of the United States of America 
 in Congress assembled, That the owner of every American vessel proceeding to sea from 
 a port on the Atlantic or Pacific coast or about to undertake a voyage upon one of the 
 Great Lakes (except vessels under 300 tons register, vessels employed solely in fishing, 
 and pleasure yachts) shall within sixty days after the enactment hereof, mark upon 
 each of the sides of said vessel, amidships, or as near thereto as is possible, in white 
 or yellow, on a dark ground, or in black on a light ground, a circular disk, 12 inches 
 in diameter, with a horizontal line 18 inches in length drawn through its center. 
 
 "Sec. 2. That the center of this disk shall be placed at such a level as may be 
 approved by a local board of inspectors for the district and shall indicate the maxi- 
 mum load line to which it shall be lawful to load the vessel. 
 
 " Sec. 3. That if the vessel is so loaded as to submerge the center of the disk indi- 
 cating the load line, the vessel shall be deemed to be an unseaworthv vessel and such 
 submersion shall be reasonable and probable cause for the detention of the vessel. 
 
 I, °^^-,f-,'^^^*'''nyow"erorma8terof a vessel so required by this act to be marked 
 who shall fail to cause his ship to be so marked or to keep her so marked, or allows 
 the ship to be so loaded as to submerge the center of the disk indicating the load 
 line, or any person who shall conceal, remove, alter, deface or obliterate, or sufier 
 any person under his control to conceal, remove, alter, deface, or obliterate any of 
 the said marks, shall for each offense be liable to fine not exceeding ^1,000." 
 
 PACTS. 
 
 b,Vh"ct/^7"f ^ ^',^?°^' less thali fourteen months, the United States has lost on the 
 high seas 7 steamships, 5 ships, 14 barks or barkentines, 2 brigs or 1 iri<»antines 23 
 coal barges, and 76 schooners, a total of 127 vessels, not counting anvthins on the Great 
 Lakes or inland waters, nor schooners on the Pacific coast. " ^ 
 
 i h eaverage age of these vessels foots up over twenty years, the oldest of the fleel beinff 
 the Ira Bhss, built ui 1847, and the newest of thein being the handsome steamsWp 
 
HEARINGS BEFORE THK MKROHANT MARINE OOxMMlSSION. 
 
 405 
 
 Kiouv, built at {'ramps shipyard for tlie Clyde Steamship Company, she being sunk 
 within six months of her launch, and the big five-masted schooner Waahinglon B. 
 Thomas, which was wrecked within two months of her going to sea. 
 
 The following table gives the name of all seagoing steamships, ships, barks, bark- 
 entines, brigs, brigantines, schooners, and barges lost since January 1, 1903: 
 
 [I'iii'iflc coast schoontTs are omitted, and the list does not include vessels lost ou the Great Lakes or 
 
 inland rivers.] 
 
 Name. 
 
 How. 
 
 ^™^ Aire 
 tonnage. ^ 
 
 STEAMSHIPS. 
 
 Gulf Stream 
 
 John J. Hill 
 
 S. V. Luckenbach . 
 
 Saginaw 
 
 George W. Kelley . 
 South Portland . . . 
 Kiowa 
 
 SHIPS. 
 
 Florence 
 
 Helen Brewer 
 
 Benjamin Sewall . . . 
 Clarence S. Bement . 
 Henry B. Hyde 
 
 BARKS AND EARKENTINES. 
 
 Abiel Abbot 
 
 Nineveh 
 
 Alex McNeil 
 
 E.S.Powell 
 
 Justine H. Ingersoil. . . 
 Eleanor M. Williams . . 
 
 Lottie Moore 
 
 Undaunted 
 
 Hiram Emery 
 
 Mauna Ala 
 
 John B. Stanhope 
 
 James H. Hamlen 
 
 Samuel H. Nickerson . 
 Lillian 
 
 BRIGS OR BRIGANTINES. 
 
 Sunlight . . . 
 D. A. Small. 
 
 SCHOONERS. 
 
 Celeste 
 
 James G. Blaine 
 
 Viola Eeppard 
 
 Carrie Belle 
 
 Emeline G. Sawyer. 
 Harriet W. Babson. 
 
 Percy &Lillie 
 
 Anna L. Mulford 
 
 Rebecca 
 
 R. & T. Hargraves . 
 
 Wm.H.Shubert 
 
 C.S.GUdden 
 
 Sarah Potter 
 
 Dreadnaught 
 
 John F. Kranz 
 
 Nimrod 
 
 O.M.Marrett 
 
 Carrigan 
 
 E.H. Weaver 
 
 John H. Buttrick . . . 
 
 Geo. C.Thomas 
 
 Bella Russell 
 
 Margaret Ward 
 
 Bertha Louise 
 
 Albert T.Stearns.... 
 
 Webster Barnard 
 
 Agnes E. Manson . . . 
 
 Gloriana 
 
 J.M.Kennedy 
 
 Scythia 
 
 Chas, Linthioum 
 
 Mary F. Godfrey . . . . 
 
 Stranded . . . 
 Foundered . 
 .do. 
 
 Collision ... 
 Foundered . 
 Stranded . . . 
 Collision ... 
 
 Foundered . 
 
 do 
 
 Stranded . . . 
 
 Burnt 
 
 Stranded . . . 
 
 Stranded . . . . 
 Foundered . . 
 
 Stranded 
 
 do 
 
 do 
 
 do 
 
 Foundered . . 
 Condemned . 
 
 Stranded 
 
 do 
 
 Abandoned.. 
 
 Stranded 
 
 Abandoned. . 
 Stranded 
 
 do. 
 
 Sunk . . 
 
 Stranded . . . . 
 
 do 
 
 do 
 
 Abandoned . 
 
 Stranded 
 
 do 
 
 Foundered . . 
 Abandoned . 
 
 Stranded 
 
 Collision 
 
 Stranded 
 
 .....do 
 
 ....do 
 
 Collision 
 
 Stranded 
 
 Collision .... 
 
 ....do 
 
 Stranded 
 
 Abandoned . 
 
 Stranded 
 
 Foundered . . 
 Abandoned . 
 
 Collision 
 
 Foundered . . 
 
 Stranded 
 
 ....do 
 
 ....do 
 
 ....do 
 
 ....do 
 
 ....do 
 
 ....do 
 
 ....do 
 
 974 
 
 2,674 
 
 1,835 
 
 483 
 
 909 
 
 2,953 
 
 1,684 
 1,582 
 1,433 
 1,998 
 2,583 
 
 494 
 1,122 
 577 
 608 
 717 
 
 Formerly lake steamer. 
 Formerly British steamer. 
 
 Do. 
 
 Do. 
 
 Do. 
 
 Formerly Hawaiian ship. 
 
 1, VB4 
 
 799 
 
 til 
 26 
 
 820 
 
 40 
 
 406 
 
 26 
 
 672 
 
 14 
 
 755 
 
 25 
 
 620 
 
 31 
 
 378 
 
 22 
 
 119 
 
 35 
 
 403 
 
 1 
 
 103 
 
 12 
 
 407 
 
 21 
 
 274 
 
 30 
 
 145 
 
 43 
 
 135 
 
 1 
 
 503 
 
 13 
 
 543 
 
 24 
 
 141 
 
 24 
 
 783 
 
 12 
 
 642 
 
 19 
 
 1,245 
 
 5 
 
 359 
 
 30 
 
 420 
 
 26 
 
 546 
 
 32 
 
 293 
 
 12 
 
 164 
 
 34 
 
 221 
 
 41 
 
 686 
 
 21 
 
 627 
 
 12 
 
 1,447 
 
 3 
 
 222 
 
 31 
 
 1,074 
 
 1 
 
 .231 
 
 13 
 
 608 
 
 20 
 
 150 
 
 85 
 
 842 
 
 14 
 
 110 
 
 12 
 
 120 
 
 34 
 
 185 
 
 1 
 
 131 
 
 11 
 
 446 
 
 21 
 
 Now a coal barge. 
 Formerly British ship. 
 Formerly British bark. 
 
 FLshing schooner. 
 
 Now barge. 
 
 Fishing schooner. 
 Do. 
 
40fi 
 
 HEAElNtJS BEl'ORE THE MERCHANT MAKINE COMMISSION. 
 
 Name. 
 
 How. 
 
 Gross 
 tonnage. 
 
 Age. 
 
 j;omarks. 
 
 SCHOONERS— continued. 
 Washington B. Thomas 
 
 
 2,638 
 1,1«6 
 229 
 414 
 720 
 2,227 
 149 
 436 
 789 
 187 
 120 
 410 
 388 
 668 
 116 
 279 
 171 
 568 
 564 
 994 
 127 
 174 
 221 
 137 
 104 
 133 
 648 
 100 
 266 
 261 
 605 
 242 
 449 
 840 
 250 
 1,186 
 1,200 
 177 
 106 
 136 
 217 
 125 
 136 
 118 
 
 386 
 1,468 
 1,186 
 
 1,270 
 
 708 
 
 242 
 
 356 
 
 1,172 
 
 1,080 
 
 1,461 
 
 299 
 
 413 
 
 944 
 
 841 
 
 841 
 
 208 
 
 910 
 
 1,609 
 
 1,693 
 
 1,133 
 
 357 
 
 396 
 
 796 
 
 
 16 
 14 
 11 
 19 
 1 
 16 
 16 
 12 
 34 
 30 
 20 
 29 
 19 
 3 
 20 
 31 
 19 
 42 
 13 
 14 
 56 
 1 
 2 
 4 
 3 
 19 
 19 
 33 
 37 
 25 
 31 
 22 
 14 
 31 
 13 
 22 
 32 
 35 
 17 
 32 
 13 
 4 
 56 
 
 34 
 35 
 33 
 
 11 
 
 8 
 
 36 
 
 39 
 
 29 
 
 
 
 21 
 
 36 
 
 14 
 
 5 
 
 13 
 
 13 
 
 3 
 
 6 
 
 3 
 
 7 
 
 41 
 
 5 
 
 41 
 
 16 
 
 
 do 
 
 
 
 Abandoned 
 
 Collision 
 
 Sunk 
 
 Collision 
 
 Stranded 
 
 ...do 
 
 
 
 
 
 
 
 
 
 Fishing schooner. 
 
 Hattie A Marsh 
 
 
 Martha T Thomas . 
 
 ..do 
 
 
 Rf^a Bird 
 
 gunk 
 
 
 Yreka 
 
 
 
 
 do 
 
 
 
 do 
 
 
 
 do 
 
 
 
 do 
 
 Whaling schooner. 
 
 
 . ...do 
 
 
 
 . .do 
 
 
 
 Abandoned 
 
 do 
 
 Formerly barkentine. 
 
 Gem 
 
 
 
 ....do 
 
 
 
 do 
 
 
 Ira BIlss 
 
 do 
 
 
 
 Stranded 
 
 Steam fishing schooner. 
 
 
 do 
 
 Fishing schooner. 
 
 
 Foundered 
 
 Stranded 
 
 Do 
 
 
 Do. 
 
 J H Parker . . . 
 
 do 
 
 
 Belle .7 Neal 
 
 ...do 
 
 Do. 
 
 C R Flint 
 
 do 
 
 
 
 . ..do 
 
 
 
 do 
 
 
 
 Foundered 
 
 Abandoned 
 
 
 
 
 
 
 
 do 
 
 
 Sarah C Ropes 
 
 . ...do 
 
 
 
 do 
 
 
 EllaPreasey... 
 
 Collision 
 
 Stranded 
 
 Abandoned 
 
 Collision 
 
 Stranded 
 
 Abandoned 
 
 do 
 
 
 E H. King . 
 
 
 
 Do. 
 
 Francis Shubert 
 
 
 
 Do. 
 
 
 Do. 
 
 
 
 BARGES. 
 
 Senator Penrose 
 
 Abandoned 
 
 Foundered 
 
 do 
 
 Formerly steamer Rattlesnake. 
 
 
 Formerly ship. 
 
 
 
 John C. Fitzpatrick 
 
 do, .. 
 
 field. 
 Formerly lake schooner. 
 
 Kosemont 
 
 Stranded 
 
 -do . 
 
 Built barge. 
 
 Formerly Noya Scotia bark 
 
 Afton .. 
 
 Fidelia 
 
 Foundered 
 
 do 
 
 Formerly brigantine. 
 Formerly bark. 
 Built barge. 
 Formerly ship. 
 Formerly schooner. 
 Built barge. 
 
 Do. . 
 
 Do. 
 
 Do. 
 
 Do. 
 
 Do. 
 
 Do. 
 
 Do. 
 Formerly ship. 
 Built barge. 
 Formerly bark. 
 Built barge. 
 
 
 
 do 
 
 
 do 
 
 
 do 
 
 
 do 
 
 A 
 
 .. .do 
 
 Elmwood 
 
 Sunk 
 
 
 do... 
 
 Veinticino 
 
 Abandoned 
 
 
 Georgia 
 
 
 Ocean Belle 
 
 do. 
 
 Oracle 
 
 Foundered 
 
 Stranded 
 
 J. B. King & Co. No. 17 
 
 Templar : 
 
 
 Puritan 
 
 Foundered 
 
 
 FOEEIGN-BUILT VESSELS FLYING THE AMERICAN FLAG. 
 
 ONE HUNDRED AND FIFTY-THEEE FOHEIGN-BUILT CRAFT, OF WHICH 132 ARE RUNNING 
 COASTWISE IN DIEEOT COMPETITION WITH AMERICAN-BUILT VESSELS. 
 
 The last annual report of the Commissioner of Navigation contains the name of 
 every vessel flying the American flag up to June 30, 1903. It states that 153 foreio'n- 
 bmit merchant vessels are under the American register, either by the act of July 5 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 407 
 
 1884, which allows foragn-built vessels when wrecked in American waters and repaired 
 in an American shipyard to an extent of 75 per cent of their value when so repaired, or 
 by the annexation of Hawaii or Porto Rico, or by special acts of Congress, or prize 
 vessels taken during a war. 
 The vessels are divided as follows: 
 
 Class. 
 
 Coasting. 
 
 Foreign. 
 
 Yachts. 
 
 Total. 
 
 Steamers 
 
 No. Tons. 
 65 88.737 
 
 Tons. 
 49,358 
 
 Tons. 
 1,033 
 
 Tons. 
 139, 128 
 
 Ships 
 
 12 
 18 
 7 
 2 
 21 
 28 
 
 22,877 
 19,240 
 
 3,580 
 464 
 
 5,709 
 23,601 
 
 22, 877 
 
 
 3,264 
 
 2,828 
 
 403 
 
 , 
 
 22,494 
 
 BarkentiDes . 
 
 
 5,908 
 
 Brigs. 
 
 
 857 
 
 
 
 5,709 
 
 Barges 
 
 
 
 23, 601 
 
 
 
 
 
 Total . . 
 
 1B3 
 
 164,198 
 
 55,343 
 
 1,033 
 
 220, 574 
 
 
 STEAMERS. 
 
 Ambrosio Bolivar, 150 tons gross, formerly British Marie, then Spanish Ambrosio 
 Bolivar, built at Paisley, Scotland, in 1877; coasting. 
 
 Argyll, 2,953 tons gross, formerly British, built at West Hartlepool, England, in 
 1892; coasting. 
 
 Aries, 832 tons gross, formerly British, built at Sunderland, England, in 1862; 
 coasting. 
 
 Arkadia, 2,206 tons gross, formerly British, built at Stockton, England, in 1895; 
 coasting. 
 
 Aiistralia, 2,755 tons gross, formerly British, then Hawaiian, built at Glasgow, 
 Scotland, in 1875; foreign. 
 
 Aztec, 3,508 tons gross, formerly Hawaiian, built at Newcastle, England, in 1894; 
 .(•pasting. 
 
 Barracovia, 2,152 tons gross, formerly British, then Hawaiian, built at Glasgow, 
 Scotland, in 1883; foreign. 
 
 Bluefields, 736 tons gross, formerly British William Coulman, built at Greenock, 
 Scotland, in 1866; coasting. 
 
 Bowhead, 381 tons gross, formerly. Norwegian Haardraade, built at Ohristiania, 
 Norway, in 1871; whaling. 
 
 Buena Ventura, 1,685 tons gross, formerly Spanish, built at Sunderland, England, 
 in 1871; has been converted into a coal barge; coasting. 
 
 Carib, 2,087 tons gross, formerly British President Garfield, then Austrian Kimon, 
 built at Port Glasgow, Scotland, in 1882; coasting. 
 
 Catania, 3,269 tons gross, formerly German, built at Glasgow, Scotland, in 1881; 
 coasting. 
 
 Cenlennial, 2,075 tons gross, formerly Danish, built at London, England, in 1859; 
 coasting. 
 
 China, 5,060 tons gross, formerly British, then Hawaiian, built at Govan, Scotland, 
 in 1889; foreign. 
 
 Claudine, 840 tons gross, formerly Hawaiian, built at Glasgow, Scotland, in 1890; 
 coasting. 
 
 Coamo, 4,384 tons gross, formerly British Californian, built at Glasgow, Scotland, 
 in 1891 ; coasting. 
 
 Conemaugh, 2,328 tons gross, formerly British Sacrobosco, built at Sunderland, 
 England, in 1882; coasting. 
 
 Czarina, 1,045 tons gross, formerly British G. W. Jones, built at Sunderland, Eng- 
 land, in 1883; coasting. 
 
 Dorothy, 2,214 tons gross, formerly British WHster, built at West Hartlepool, Eng- 
 land, in 1898; coasting. 
 
 Ediih, 2,369 tons gross, formerly British Glenochil, built at Sunderland, England, 
 in 1882; coasting. 
 
 Edward S. Pease, 715 tons gross, formerly British California, built at Port Dal- 
 housie, Ontario, in 1873; coasting. 
 
 Elihu Thomson, 896 tons gross, formerly Norwegian Italia, built at Newcastle, 
 England, in 1888; coasting. 
 
 Enterprise, 2,675 tons gross, formerly German Ehrenfels, then St. Georg, built at 
 Newcastle, England, in 1882; coasting. 
 
408 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Esther, 479 tons gross, formerly Norwegian Antonio Znmbrcma, then Phcenix, built 
 at Christiania, Norway, in 1890; foreign. 
 
 Evelyn, 1,963 tons gross, formerly British Badsioorth, built at Southampton, England, 
 iu 1883; coasting. 
 
 Faustian, 256 tons gross, formerly British P. M. Foster, then Edward H. JenU, built 
 at Port Dover, Ontario, in 1882; coasting. 
 
 Florida, 1,596 tons gross, formerly British Hondo, built at Port Glasgow, Scotland, 
 in 1887; coasting. 
 
 Foxhall, 843 tons gross, formerly British, built at Newcastle, England, in 1885; 
 foreign. 
 
 Garonne, 3,945 tons gross, formerly British, built at Glasgow, Scotland, in 1871; 
 Roasting. 
 
 General McCallum, 1,396 tons gross, formerly British, built at Glasgow, Scotland, 
 in 1864; coasting. 
 
 George W. Kelley, 483 tons gross, formerly British Anglian, then Joseph Oteri, jr., 
 built at Glasgow, Scotland, in 1878; foreign. 
 
 Harry Luckenbach, 2,798 tons gross, formerly British Surrey, then Norwegian Michi- 
 gan, built at West Hartlepool, England, in 1881; coasting. 
 
 Hector, 2,929 tons gross, formerly British Lilburn Tower, then Spanish Pedro, built 
 at New Castle, England, in 1883; coasting. 
 
 Helen C, 622 tons gross, formerly British Quebec, then F. E. Spinner, built at Chat- 
 ham, Ontario, in 1874; coasting. 
 
 Heroine, 180 tons gross, formerly British, built at Glasgow, Scotland, in 1862; 
 coasting. 
 
 /. X. Luckenbach, 4,920 tons gross, formerly German Saale, built at Glasgow, Scot- 
 land, in 1886; coasting. 
 
 Julia Luckenbach, 3,100 tons gross, formerly Dutch Zaandam, then Austrian Styria, 
 built at Rotterdam in 1882; coasting. 
 
 Lassell, 1,972 tons gross, formerly British, built at Newcastle, England, in 1879; 
 coasting. 
 
 Leelanaw, 1,923 tons gross, formerly British Eamwell, built at Newcastle, England, 
 in 1886; coasting. 
 
 Maianzas, 3,094 tons gross, formerly Spanish Guido, built at Belfast, Ireland, in 
 1883; foreign. 
 
 May, 652 tons gross, formerly British, built at Troon, Scotland, in 1891; yacht. 
 
 Mineola, 2,438 tons gross, formerly British, built at Sunderland, England, in 1887; 
 coasting. 
 
 Navahoe, 1,879 tons gross, formerly German Thuringia, then British Navahoe, built 
 at Hamburg, Germany, in 1880; coasting. 
 
 Neshanic, 271 tons gross, formerly British Nictaux, then Etta Moore, built at Com- 
 wallis. Nova Scotia, in 1870; coasting. 
 
 New York, 10, 798 tons gross, formerly British City of New York, built at Clydebank, 
 Scotland, in 1888; foreign. 
 
 Olympia, 2,837 tons gross, formerly British Dunbar Castle, then Olympia, built at 
 Glasgow, Scotland, in 1883; foreign. 
 
 Oneida, 1,322 tons gross, formerly British El Callao, built at Leith, Scotland, in 
 1885; coasting. 
 
 Pemacola, 1,696 tons gross, formerly British New Borough, built at West Hartlepool, 
 England, m 1888; foreign. 
 
 ■ ^.^Z ^™«*..161 tons gross, formerly British UlUe Ada. built at Renfrew, Scotland, 
 m 1863; coastmg. ' ' 
 
 Pewauhee, m tons gross, formerly British Two Friends, built at Port Burwell, 
 Ontario, ip 1873; coastmg. 
 
 Philadelphia 10,im tons gross, formerly British City of Paris, built at Clydebank, 
 bootland, m 1889; foreign. .7 .^ , j , 
 
 coMtkT' ^'^^^ *°"^ ^'°^^' *°''™''''^y British, built at Sunderland, England, in 1889; 
 
 .t^ZZT''<^'V,^ ^°*' ^00!' formerly British Methven Castle, then Columbia, built 
 at Glasgow, Scotland, m 1883; coasting. 
 
 Ei^landSn'l881-*°foref n^^' *°™®''^^ ^"*'^''' ^^^"^ ^**"^' ^"^^^^ ^^ Middlesboro', 
 
 cofstTn""' ^^^ *°°^ ^^°^' *°™®''^y British, built at St. Catherines, Ontario, in 1866; 
 
 at RZtfekil®^V°r^'"°?''.^co?'®''^y^."*^'^ ^'^'•'^^ ^°'"^' then Hawaiian, built 
 at bouth bhields, England, in 1888; coasting. 
 
 coSfing""' ^°^ ^°'^ ^°''' ^"'^^'^^y ^"*'«li' t>uiltat Port Glasgow, Scotland, in 1886, 
 
 jStomM/ 1,624 tons gross, formerly British Enchantress, built at Sunderland Ena- 
 lana, m 1879; coasting, ' = 
 
HKAKINHS BEFORE THK MEKt'HANT MARINJ-: COMMISSION. 409 
 
 South Portland, 909 tons gross, formerly British Dawn, then Caroline Miller, built at 
 Grangeraouth, England, in 1883; coasting. 
 
 Stillwater, 1,019 tons gross, formerly British Stroma, built at Glasgow, Scotland, in 
 1883; foreign. 
 
 Tacoma, 2,811 tons gross, formerly British Batavia, then Tacoma, built at Dumbar- 
 ton, Scotland, in 1870; foreign. 
 
 Voico, 298 tons gross, formerly British Cromer, then Spanish Vasco, built at New 
 Castle, England, in 1893; coasting. 
 
 Victoria, 3,502 tons gross, formerly British Parthia, then Victoria, built at Dumbar- 
 ton, Scotland, in 1870; foreign. 
 
 Washtenaw, 2,896 tons gross, formerly British Oxford, built at West Hartlepool, 
 England, in 1887; coasting. 
 
 Zealandia, 2,730 gross tons, formerly British, then Hawaiian, built at Govan, Scot- 
 land, in 1875; coasting. 
 
 SHIPS. 
 
 Balclutha, 1,716 tons gross, formerly British, then Hawaiian, built at Glasgow, 
 Scotland, in 1886. 
 
 Bangalore, 1,743 tons gross, formerly British, built at Stockton, England, in 1886. 
 
 FaUi of Clyde, 1,809 tons gross, formerly British, then Hawaiian, built at Port 
 Glasgow, Scotland, in 1878. 
 
 Fort George, 1,769 tons gross, formerly British, then Hawaiian, built at Belfast, 
 Ireland, in 1884. 
 
 Hawaiian Isles, 2,148 tons gross, formerly Hawaiian, built at Glasgow, Scotland, in 
 1892. 
 
 Hden Brewer, 1,582 tons gross, formerly Hawaiian, built at Glasgow, Scotland, in 
 1891. 
 
 John Ena, 2,842 tons gross, formerly Hawaiian, built at Glasgow, Scotland, in 1892. 
 
 Kenilworth, 2,293 tons gross, formerly British, built at Port Glasgow, Scotland, in 
 1887. 
 
 Marion Chilcoti, 1,737 tons gross, formerly British, built at Glasgow, Scotland, in 
 1882. 
 
 Star of France, 1,644 tons gross, formerly British, then Hawaiian, built at Belfast, 
 Ireland, in 1877. 
 
 Star of_ Italy, 1,613 tons gross, formerly British, then Plawaiian, built at Belfast, 
 Ireland, in 1877. 
 
 Star of Russia, 1,981 tons gross, formerly British, then Hawaiian, built at Belfast, 
 Ireland, in 1874. 
 
 BARKS. 
 
 Abby Palmer, 1,943 tons gross, formerly British, built at Dumbarton, Scotland 
 in 1893. 
 
 Andrew Welch, 903 tons gross, formerly Hawaiian, built at Glasgow, Scotland, in 1888. 
 
 Annie Johnson, 1,049 tons gross, formerly British, built at Harrington, England, 
 in 1872. 
 
 Coalinga, 1,001 tons gross, formerly British, built at Dundee, Scotland, in 1868. 
 
 Diamond Head, 1,012 tons gross, formerly British, then Hawaiian, built at London, 
 England, in 1866. 
 
 E. C. Mowatt, 1,123 tons gross, formerly British, built at Glasgow, Scotland, in 1868. 
 
 Euterpe, 1,318 tons gross, formerly British, then Hawaiian, built at Ramsay, Scot- 
 land, in 1863. 
 
 Foohng Suev, 1,048 tons gross, formerly Hawaiian, built at Glasgow, Scotland, in 
 1888. 
 
 Himalaya, 1,027 tons gross, formerly British, then Hawaiian, built at Sunderland, 
 England, in 1863. . 
 
 Hindoo, 622 tons gross, formerly Norwegian, built at Apenrade, Germany, in 1877. 
 
 Homeward Bound, 2,131 tons gross, formerly British, then German, built at Belfast, 
 Ireland, in 1885. 
 
 Mauna Ala, 820 tons gross, formerly British, then Hawaiian, built at Sunderland, 
 England, in 1863. 
 
 Nuuanu, 1,029 tons gross, formerly British, then Hawaiian, built at Leith, Scot- 
 land, in 1882. 
 
 R. P. RUhet, 1,097 tons gross, formerly Hawaiian, built at Glasgow, Scotland, in 
 1892. 
 
 Roderick Dhu, 1,534 tons gross, formerly British, then Hawaiian, built at Sunder- 
 land, England, in 1874. 
 
 Santiago, 979 tons gross, formerly British, then Hawaiian, built at Belfast, Ireland, 
 in 1885. 
 
410 HKARTNGS BEFOUE 'HIE MEKCHANT >1AKINE OO.MMISSXON. 
 Star of Bengal, 1,877 tone gross, formerly British, tben Hawaiian; built at Belfast, 
 
 '^^WUlscott, 1,981 tons gross, formerly British, then Hawaiian, built at Port Glasgow, 
 in 1896. 
 
 EAKKENTINES. 
 
 Andromeda, 1,243 tons gross, formerly British, built at Liverpool, England, in 1862. 
 Archer, 900 tons gross, formerly British, built at Sunderland, l-ngiand in l»/b. 
 Coronado, 1,062 tons gross, formerly British, then .German, built at Sunderland, 
 England, in 1874. , , a 1.-1 j • %am 
 
 Hawaii, 1,085 gross tons, formerly Chilean, built at Dumbarton, bcotla^d, m 19UU. 
 James H. Hamlen, 672 t(^ns gross, formerly British, built at Liye;-pool, Nova Scotia, 
 
 Ruth, 488 tons gross, formerly British, then French, built at Sunderland, England, 
 
 in 1860. . , , ^ , , . ,„., 
 
 Westjkld, 458 tons gross, formerly British, built at Carnckfergus, Ireland, in 18W. 
 
 Alcaea, 403 tons gross, formerly British, built at St. Martins, New Brunswick, in 
 1888 
 
 Gahrielle, 454 tons gross, formerly Italian, then British, built at Alimuri, Italy, in 
 1878. 
 
 SCHOONERS. 
 
 Alma, 134 tons gross, formerly British, built at Clifton, New Brunswick, in 1882. 
 
 Americana, 900 tons gross, formerly Hawaiian, built at Grangemouth, England, m 
 1892 
 
 Bat, 101 tons gross, formerly British, built at Wickham, New Brunswick, in 1874. 
 
 Clara E. Comee, 138 tons gross, formerly British, built at Bear Eiver, Nova Scotia, 
 in 1888. " ^ . . „. 
 
 Elgin, 330 tons gross, formerly British, built at St. Catharines, Ontario, m 1874. 
 
 Ella Clifton, 108 tons gross, formerly British, built at St. John, "New Brunswick, m 
 1872 
 
 Ellen M. Baxter, 216 tons gross, formerly British, built at Wellington Square, Can- 
 ada, in 1861. . . .-„ 
 
 Eugenia Vesta, 140 tons gross, formerly British, built at Port Credit, Ontario, m 1876. 
 
 Honolulu, 1,053 tons gross, formerly Hawaiian, built at Port Glasgow, Scotland, m 
 1896. „ „ . . 
 
 J. Arthur Lord, 212 tons gross, formerly British, built at Kempt, Nova Scotia, m 
 1881 
 
 Mamiou, 333 tons gross, formerly British, built at Port Dalhousie, Ontario, in 1873. 
 
 Mildred E., 118 tons gross, formerly British, built at Meteghan, Nova Scotia, m 
 1884. 
 
 Newhurgh, 524 tons gross, formerly British, built at Windsor, Nova Scotia, in 1888. 
 
 Olive, 172 tons gross, formerly British, built at Port Greville, Nova Scotia, in 1891. 
 
 Pirineo, 130 tons gross, formerly Spanish, built at Eemedios, Cuba, in 1848. 
 
 Rondo, 107 tons gross, formerly British, built at Belle Isle, New Brunswick, in 
 1882. 
 
 S. H. Sawyer, 107 tons gross, formerly British, built at Dorchester, New Brunswick, 
 in 1883. 
 
 Salvor, 170 tons gross, formerly British, built at Noel, Nova Scotia, in 1891. 
 
 Selkirk, 307 tons gross, formerly British, built at Wallaceburg, Ontario, in 1862. 
 
 Thomas B. Reed, 115 tons gross, formerly British, built at Newcastle, New Bruns- 
 wick, in 1882. , 
 
 W. W. Stewart, 294 tons gross, formerly British, built at Sarnia, Ontario, in 1866 
 
 Ariadne, 529 tons gross, formerly German, built at Funfhausen, Germany, in 1880. 
 
 Baker, 996 tons gross, formerly Norwegian, built at Bergen, Norway, in 1876. 
 
 Clintonia, 1,876 tons gross, formerly British, built at Newcastle, England, in 1881. 
 
 Coal King, 1,417 tons gross, formerly British, built at Annapolis, Nova, Scotia, in 
 1878. 
 
 Conemaugh, 1,774 tons gross, formerly British, built at Liverpool, England, in 1879. 
 
 Davidson, 959 tons gross, formerly British, then Norwegian, built at Cornwallis, 
 Nova Scotia, in 1869. 
 
 Dessoug, 1,382 tons gross, formerly British, then Egyptian, built at Hartlepool, 
 England, in 1864. 
 
HEARINGS BE1<'0BE THE MERCHANT MARINE COMMISSION. -ill 
 
 Felir, 1,171 tons gross, formerly German, built at Port Glasgow, Scotland, in 1891. 
 
 Florida, 1,071 tons gross, formerly British, then German, built at Port Glasgow, 
 Scotland, in 1871. 
 
 Kingston, 1,070 tons gross, formerly British, built at Dorchester, New Brunswick, 
 in 1875. 
 
 Mirie, 1,043 tons gross, formerly British, then German, built at St. John, New 
 Brunswick, in 1857. 
 
 Montana, 862 tons gross, formerly British, then Norwegian, built at Port Gilbert, 
 Nova Scotia, in 1870. 
 
 West Point, 1,213 tons gross, formerly British, built at Glasgow, Scotland, in 1866. 
 
 Ajax, 688 tons gross, formerly British, then Russian, built at Tynemouth, New 
 Brunswick, in 1872. 
 
 Black Diamond, 121 tons gross, formerly Norwegian, built at Stavanger, Norway, in 
 1875. 
 
 Busy, 327 tons gross, formerly British, built at Halifax, Nova Scotia, in 1869. 
 
 Colleen, 548 tons gross, formerly Swedish, built at Umea, Sweden, in 1874. 
 
 Ellida, 1,268 tons gross, formerly Italian, then Uruguayan, built at Alblasserdam, 
 Holland, in 1878. 
 
 Fairy Belle, 629 tons gross, formerly British, built at Quebec, Canada, in 1871. 
 
 Glenola, 135 tons gross, formerly British, built at Advocate, Nova Scotia, in 1891. 
 
 Louis fl','323 tons gross, formerly Swedish, built at Sikca, Sweden, in 1884. 
 
 Maria Dolores, 333 tons gross, formerly Spanish, built at Manila in 1864. 
 
 New Jersey, 1,847 tons gross, formerly British, then Russian, built at Barrow, Eng- 
 land, in 1877. 
 
 Nma, 761 tons gross, formerly British, then Norwegian, built at Quebec, Canada, 
 in 1865. 
 
 Skudesnaes, 398 tons gross, formerly Norwegian, built at Skudesnaes, Norway, in 
 1876. 
 
 Tobasco, 265 tons gross, formerly Spanish. 
 
 Vineta, 668 tons gross, formerly Norwegian, then German, built at Elsfleth, Ger- 
 many, in 1877. 
 
 William & Joseph Hagan, 234 tons gross, formerly Norwegian, built at Oyster- 
 Risoer, Norway, in 1875. 
 
 SQUARE-RIGGED VESSELS. 
 
 According to the Annual List of Merchant Vessels of the United States there were 
 afloat officially on July 1, 1903, 350 square-rigged vessels flying the American flag. 
 Since that time none have been built in this country, nor have any been placed under 
 our flag. 
 
 From a careful compilation made by Samuel B. Macdonnell, the editor of the Mari- 
 time Journal, we have to-day only 328 of them left, and four or five more of them 
 are probably no longer afloat or have been cut down into hulks or barges. 
 
 The fleet on July 1, 190S. 
 [Officially reported in the Annual List of Merchant Vessels of the United States.] 
 
 
 Numher. 
 
 Gross 
 tonnage. 
 
 Ships 
 
 96 
 142 
 
 88 
 24 
 
 185, 823 
 
 Barks 
 
 137,726 
 
 61,664 
 
 9,652 
 
 Barkentines . 
 
 Brigantines . - 
 
 
 Total 
 
 350 
 
 394,766 
 
 
 Taking the above figures for correct on that day and deduct the following vessels 
 that we know are no longer ships, barks, barkentines, or brigs, we have a loss of 7 
 ships, 13 barks, 1 barkentine, and 1 brig. 
 
 me. 
 
 July 1, 1903. 
 
 Lost since. 
 
 Number. 
 
 Tonnage. 
 
 Number. 
 
 Tonnage. 
 
 
 96 
 142 
 88 
 24 
 
 185,823 
 
 137,726 
 
 61,564 
 
 9,652 
 
 7 
 13 
 1 
 
 1 
 
 12,275 
 13 408 
 
 Barks.. .. 
 
 
 672 
 
 Brigs 
 
 
 
 
 Total 
 
 350 
 
 394,765 
 
 22 
 
 
 
 
412 HEAKING8 BEFOKE THK MERCHANT MARINE COMMISSION. 
 The fleet on Jarnmrii 1, IS'iO. 
 
 January 1, 1870 
 July 1, 3903.... 
 
 Decrease 
 
 Ships. 
 
 731 
 96 
 
 Barks. 
 
 889 
 230 
 
 659 
 
 Brigs. 
 
 675 
 24 
 
 Total. 
 
 2,295 
 
 ],945 
 
 (No longer square riggers.) 
 
 SHIPS. 
 
 Benjamin Sewall, lost j' ^^^ 
 
 Clarence S. Bement, lost 1, 998 
 
 Florence, lost - - - 1. oo* 
 
 Helen Brewer, lost 1) "^2 
 
 Henry B. Hyde, lost 2,583 
 
 Invincible, no w a schooner - - - ■ !> 460 
 
 State of Maine, now a barge - - - - li 535 
 
 Total 12,275 
 
 BARKS. 
 
 Alice Eeed, lost 873 
 
 Hiram Emery, lost 799 
 
 John R. Stanhope, lost - 406 
 
 Lillian, lost 620 
 
 Mauna Ala, loi-t 820 
 
 Samuel H. Nickerson, lost 755 
 
 B. D. Metcalf, now a barge 1, 188 
 
 Herbert Black, now a barge 573 
 
 Hindoo, now a barge 622 
 
 J. B. Walker, now a barge 2,178 
 
 Oregon, now a barge 1,430 
 
 Sachem, now a barge 1) 380 
 
 Undaunted, now a barge 1,764 
 
 Total 13,408 
 
 BARKENTINES. 
 
 James H. Hamlen 672 
 
 BRIGS. 
 
 D. A. Small 119 
 
 The following square-rigged vessels were reported in the last annual list of mer- 
 chant vessels, compiled to July 1, 1903: 
 
 Vessels marked * are lost. Vessels marked f have been cut down to barges. Vessels marked X have 
 been altered into 5-masted baldheaded schooners. 
 
 Name. 
 
 Where built. 
 
 Gross 
 tonnage. 
 
 When 
 built. 
 
 SHIPS. 
 
 A. G. Ropes 
 
 New York 
 
 San Francisco 
 
 do 
 
 2,460 
 1,848 
 1,972 
 S,288 
 1,487 
 2,194 
 2,054 
 3,209 
 2,128 
 3,292 
 3.981 
 1,716 
 
 1884 
 
 A. J. Fuller 
 
 1881 
 
 ADner Coburn 
 
 1882 
 
 Acme 
 
 New York 
 
 
 Agenor 
 
 1870 
 1877 
 
 Alexander Gibson 
 
 San Francisco 
 
 Seattle 
 
 America 
 
 1874 
 1899 
 1893 
 1901 
 1902 
 1886 
 
 Arthur Sewall 
 
 
 Aryan 
 
 .do. 
 
 Astral 
 
 New York 
 
 do 
 
 Atlas 
 
 Balclutha 
 
 PortTownsead... 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 413 
 
 Name. 
 
 Where built. 
 
 Gross 
 
 tonnage. 
 
 1,743 
 
 1 
 
 4aa 
 
 2 
 
 l.-lR 
 
 1 
 
 «34 
 
 1 
 
 fi3« 
 
 1 
 
 7(14 
 
 1 
 
 2«B 
 
 •2 
 
 003 
 
 1 
 
 i)9H 
 
 1 
 
 471 
 
 K 
 
 004 
 
 1 
 
 H2(i 
 
 1 
 
 mi 
 
 H 
 
 40fi 
 
 1 
 
 4fil 
 
 1 
 
 ,W4 
 
 1 
 
 317 
 
 2 
 
 H9S 
 
 1 
 
 K09 
 
 1 
 
 fi84 
 
 1 
 
 769 
 
 1 
 
 837 
 
 2 
 
 102 
 
 1 
 
 712 
 
 1 
 
 .TO) 
 
 1 
 
 603 
 
 2 
 
 14h 
 
 1 
 
 .')29 
 
 1 
 
 .W2 
 
 1 
 
 97fi 
 
 1 
 
 .'552 
 
 2 
 
 fiS3 
 
 2 
 
 Uf> 
 
 
 487 
 
 
 4()0 
 
 
 ,W0 
 
 
 648 
 
 
 ma 
 
 
 94.5 
 
 2 
 
 842 
 
 2 
 
 110 
 
 1 
 
 244 
 
 1 
 
 938 
 
 2 
 
 293 
 
 2 
 
 126 
 
 1 
 
 392 
 
 1 
 
 5.% 
 
 1 
 
 402 
 
 1 
 
 390 
 
 1 
 
 928 
 
 1 
 
 374 
 
 1 
 
 732 
 
 1 
 
 737 
 
 1 
 
 5,33 
 
 1 
 
 688 
 
 1 
 
 582 
 
 1 
 
 735 
 
 1 
 
 924 
 
 H 
 
 .539 
 
 1 
 
 882 
 
 2 
 
 30.5 
 
 1 
 
 ,595 
 
 1 
 
 898 
 
 1 
 
 798 
 
 1 
 
 893 
 
 1 
 
 .5,35 
 
 1 
 
 289 
 
 1 
 
 866 
 
 S 
 
 406 
 
 1 
 
 656 
 
 1 
 
 448 
 
 1 
 
 534 
 
 1 
 
 644 
 
 1 
 
 613 
 
 1 
 
 981 
 
 1 
 
 .535 
 
 2 
 
 744 
 
 ^ 
 
 738 
 
 2 
 
 025 
 
 1 
 
 382 
 
 2 
 
 ISO 
 
 2 
 
 202 
 
 1 
 
 978 
 
 3 
 
 374 
 
 When 
 built. 
 
 SHIPS — continued. 
 
 Bangalore 
 
 ♦Benjamin Sewall 
 
 Benjamin F. Packard . 
 
 Berlin 
 
 Bohemia 
 
 C. F. Sargent 
 
 Centennial 
 
 Charles E. Moody 
 
 *ClarenceS. Bement . 
 
 Columbia 
 
 Dirigo 
 
 E.B.Sutton 
 
 Eclipse 
 
 Edward Sewall 
 
 Elwell 
 
 Emily Reed 
 
 Emily F. Whitney 
 
 Erskine M. Phelps 
 
 Falls o£ Clyde 
 
 ♦Florence 
 
 Fort George 
 
 George Curtis 
 
 Glory of the Seas 
 
 Governor Robie 
 
 Great Admiral 
 
 Harvard 
 
 Hawaiian Isles 
 
 Hecla 
 
 * Helen Brewer 
 
 Henry Failing 
 
 Henry Villard 
 
 *Henry B.Hyde 
 
 1. F. Chapman 
 
 Indiana 
 
 J Invincible 
 
 J.B.Brown 
 
 Jabez Howes 
 
 James Drummond — 
 
 John Currier 
 
 John Ena 
 
 John A. Briggs 
 
 John C. Potter 
 
 Joseph B. Thomas 
 
 Kenll worth 
 
 Kennebec 
 
 Llewellyn J . Morse . - . 
 
 Louis Walsh 
 
 Lucile 
 
 Luzon 
 
 M.P.Grace 
 
 McLaurin 
 
 Manual Llaguim 
 
 Marion Chilcott 
 
 Occidental 
 
 Oriental 
 
 Paramita 
 
 Paul Revere 
 
 Reuce 
 
 Roanoke 
 
 8. D. Carleton 
 
 S. P. Hitchcock 
 
 St. David 
 
 St. Frances 
 
 St. Nicholas 
 
 St. Paul 
 
 Santa Clara 
 
 Sea Witch 
 
 Servia 
 
 Shenandoah 
 
 Sintram 
 
 Spartan 
 
 Standard 
 
 Star ol France 
 
 Starofltaly 
 
 Star of Russia 
 
 tState of Maine 
 
 Susquehanna 
 
 Tacoma 
 
 Time E. Starbuck 
 
 Two Brothers 
 
 W. F. Babcock 
 
 William H. Macy 
 
 William H. Smith .... 
 William F. Frye 
 
 New York 
 
 Boston 
 
 Bath 
 
 San Francisco. 
 do 
 
 do 
 
 do 
 
 do 
 
 do 
 
 do 
 
 Bath 
 
 New York 
 
 San Francisco . . 
 
 Bath 
 
 San Francisco . . 
 
 do 
 
 do 
 
 Bath 
 
 San Francisco . . 
 
 do 
 
 .....do 
 
 do 
 
 Boston 
 
 San Francisco - . 
 
 New York 
 
 Boston 
 
 San Francisco.. 
 
 do 
 
 Boston 
 
 San Francisco . - 
 
 do 
 
 do 
 
 New York 
 
 San Francisco . . 
 do 
 
 do. 
 
 do 
 
 do 
 
 do 
 
 do 
 
 do 
 
 do 
 
 do 
 
 New York 
 
 San Francisco . . 
 
 do 
 
 do '.. 
 
 do 
 
 New York 
 
 San Francisco . . 
 
 Boston 
 
 New York 
 
 San Francisco.. 
 
 do 
 
 do 
 
 do 
 
 New York 
 
 San Francisco . . 
 
 Bath 
 
 San Francisco .. 
 
 New York 
 
 San Francisco . . 
 do. 
 
 do 
 
 do 
 
 do 
 
 do 
 
 do 
 
 Bath 
 
 San Francisco . . 
 
 do 
 
 do 
 
 Port Townsend . 
 
 do 
 
 San Francisco . . 
 
 New York 
 
 Bath 
 
 San Francisco . . 
 
 do 
 
 do 
 
 Bath 
 
 San Francisco . . 
 
 do 
 
 Bath 
 
414 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Name. 
 
 Where built. 
 
 Gross 
 tonnage. 
 
 A.R.Tucker 
 
 Abby Palmer 
 
 Adam W. Spies 
 
 Adolph Obrig 
 
 Agate 
 
 Albert 
 
 Alden Besse 
 
 Alice 
 
 Alice Kiiowlea 
 
 *Alice Reed 
 
 Amy 
 
 Amy Turner 
 
 Andrew Hicks 
 
 Andrew Welch 
 
 Annie Johnson 
 
 Antioch 
 
 Auburndale 
 
 fB.D.Metcalf 
 
 B.P.Cheney 
 
 Baltimore 
 
 Benjamin F. Hunt, jr . 
 
 Bertha 
 
 Big Bonanza 
 
 Boylston 
 
 CD. Bryant 
 
 California 
 
 Canton 
 
 Carondolet 
 
 Carrie Winslow 
 
 CarroUton 
 
 Challenger 
 
 Charles Loring 
 
 Charles B. Kenney 
 
 Charles G. Rice 
 
 Charles W. Morgan . . . 
 
 Charmer 
 
 Coalinga 
 
 Coloma 
 
 Coryphene 
 
 Diamond Head 
 
 Dom Pedro II 
 
 E.C.Mowatt) 
 
 Edmund Phinni y 
 
 Edward May . . . ^ 
 
 Edward L. Mayberry . 
 Electra 
 
 Ethel 
 
 Euterpe 
 
 Evie J.Ray 
 
 Ferris S. Thompson 
 
 Flourine 
 
 Foohng Suey 
 
 Francis S. Hampshire - 
 
 Fred P. Litchfield 
 
 Freeman 
 
 Fresno 
 
 Gatherer 
 
 Gay Head 
 
 General Fairchi Id 
 
 Gerard C. Tobey 
 
 Grace Deering 
 
 Grey Hound 
 
 Guy C. Goss 
 
 H. G. Johnson 
 
 Harry Morse 
 
 Harvester 
 
 Haydn Brown 
 
 Helen A, Wyman.. 
 
 t Herbert Black 
 
 Heaper 
 
 Himalaya 
 
 tHindoo 
 
 * Hiram Emery 
 
 Holliswood 
 
 Homeward Bound 
 
 Isaac Reed 
 
 tJ.B. Walker 
 
 J. D. Peters 
 
 Jacob A. Stamler 
 
 James Nesmith 
 
 James A. Wright.... 
 
 *JohnK. Stanhope 
 
 John&Winthrop... 
 
 New Bedford . . . 
 San Francisco . . 
 
 New York 
 
 do 
 
 San Francisco . . 
 
 do 
 
 do 
 
 New York 
 
 New Bedford . . . 
 
 New York 
 
 Baltimore 
 
 San Francisco . . 
 
 do 
 
 do 
 
 do 
 
 Boston 
 
 do 
 
 Philadelphia . . . 
 San Francisco . . 
 
 Baltimore 
 
 Boston 
 
 New Bedford . . . 
 San Francisco . . 
 
 Boston 
 
 San Francisco . . 
 New Bedford . . . 
 
 do 
 
 Port Townsend . 
 
 Portland 
 
 San Francisco . . 
 
 do 
 
 New York 
 
 San Francisco . . 
 
 New York 
 
 New Bedford . . . 
 San Francisco . . 
 
 do 
 
 do 
 
 do 
 
 Honolulu 
 
 Baltimore 
 
 Philadelphia . . . 
 
 Portland 
 
 San Francisco . . 
 
 New York 
 
 San Francisco . . 
 
 New Haven 
 
 Newark 
 
 San Francisco . . 
 Portland, Oreg . 
 
 Seattle 
 
 New York 
 
 Boston 
 
 New York 
 
 -...do 
 
 Boston 
 
 Port Townsend.. 
 San Francisco,.. 
 
 do. 
 
 do. 
 
 do. 
 New York. 
 New Bedford. 
 Seattle . 
 Boston . 
 San Francisco. 
 Seattle . 
 San Francisco. 
 New York. 
 
 Boston . 
 
 San Francisco . 
 
 do. 
 Key West. 
 
 Boston 
 
 New York . 
 San Francisco . . 
 
 do . 
 
 New York 
 
 Seattle 
 
 New York 
 
 San Francisco.. 
 Philadelphia... 
 
 Mobile 
 
 San Francisco . . 
 
 146 
 
 1,943 
 
 1,235 
 
 1,448 
 
 626 
 
 682 
 
 842 
 
 858 
 
 302 
 
 873 
 
 700 
 
 991 
 
 1,049 
 
 986 
 
 663 
 
 1,188 
 
 1,322 
 
 722 
 
 1,190 
 
 177 
 
 1,472 
 
 668 
 
 929 
 
 366 
 
 238 
 
 1,438 
 
 943 
 
 1,450 
 
 1,466 
 
 652 
 
 1,128 
 
 715 
 
 313 
 
 1,886 
 
 1,001 
 
 852 
 
 811 
 
 1,012 
 
 489 
 
 1,123 
 
 751 
 
 928 
 
 650 
 
 986 
 
 662 
 
 734 
 
 1,318 
 
 956 
 
 531 
 
 386 
 
 1,048 
 
 1,079 
 
 1,085 
 
 1,197 
 
 1,244 
 
 1,509 
 
 265 
 
 1,427 
 
 1,469 
 
 733 
 
 177 
 
 1,572 
 
 1,082 
 
 1,365 
 
 764 
 
 864 
 
 1,717 
 
 573 
 
 696 
 
 1,027 
 
 622 
 
 799 
 
 1,141 
 
 ■2, 131 
 
 1,641 
 
 2,178 
 
 1,086 
 
 1,000 
 
 1,785 
 
 933 
 
 406 
 
 338 
 
HEAEINGS BEFORE THE MEBCHANT MARINE COMMISSION. 415 
 
 Name. 
 
 BAEKS— continued. 
 
 Josephine 
 
 Julia 
 
 Julia Rollins 
 
 Kaiulani 
 
 Kate Davenport 
 
 Levi G. Burgess 
 
 *Ijillian 
 
 Louisiana 
 
 Martha Davis 
 
 Mary L. Cushing 
 
 Matanzas 
 
 *Mauna Ala 
 
 Mohican 
 
 Morning Star 
 
 Nicolas Thayer 
 
 Normandy 
 
 Nuuanu '. 
 
 Oakland 
 
 Olympic 
 
 Onaway 
 
 tOregon 
 
 Pactolus 
 
 PaJtayra 
 
 Penobscot 
 
 Flatlna 
 
 President 
 
 Prussia 
 
 R.P.Rithet 
 
 Reaper 
 
 Rebecca Crowell 
 
 Roderick Dhu 
 
 Rulus E.Wood 
 
 S.C.Allen 
 
 fSachem 
 
 St. James 
 
 St. Katherine 
 
 St. Mary 
 
 *Samuel H. Nickerson , 
 
 Santiago 
 
 Saranac 
 
 Sea King 
 
 Shetland 
 
 Silicon 
 
 Sonoma ...1 
 
 Stat oi Bengal 
 
 , Sunbeam 
 
 Thomas A. Goddard 
 
 Tidal Wave 
 
 Tillie Baker 
 
 t Undaunted 
 
 Vidette 
 
 Virginia 
 
 W.B.Flint 
 
 Wanderer 
 
 Wlllard Mudgett 
 
 Will W.Case 
 
 Wilteott 
 
 Yosemite 
 
 B.\KKENTINES. 
 
 Addenda 
 
 Addie Merrill 
 
 AUanwilde 
 
 Amaranth 
 
 Amazon 
 
 Amelia 
 
 Arago 
 
 Archer 
 
 Arlington 
 
 Aurora 
 
 Benecia 
 
 Bonny Doon 
 
 Brace Hawkins 
 
 Charles F.Crocker . 
 
 Ch'ehalls 
 
 Cityot Papeete 
 
 Cordnada 
 
 DaWy Read 
 
 EToha 
 
 Eliairanda 
 
 Emita 
 
 Encore 
 
 Ethel V.Boynton... 
 
 Where built. 
 
 Boston 
 
 New York 
 
 Baltimore 
 
 San Francisco . . 
 
 do 
 
 ....do 
 
 Boston 
 
 San Francisco . . 
 
 ....do 
 
 .....do 
 
 Philadelphia . . . 
 San Francisco . . 
 
 ....do 
 
 New Bedford . . . 
 San Francisco . . 
 
 Portland 
 
 Boston 
 
 Port Townsend . 
 San Francisco - . 
 
 Portland 
 
 San Francisco . . 
 
 do 
 
 Port Townsend . 
 
 Boston 
 
 New Bedford . . . 
 
 ....do 
 
 San Francisco . . 
 
 do 
 
 do 
 
 Boston 
 
 San Francisco . . 
 
 do 
 
 Port Townsend . 
 
 Boston 
 
 San Francisco .. 
 
 do 
 
 New York 
 
 Machias 
 
 San Francisco . . 
 
 New York 
 
 San Francisco . . 
 
 Boston 
 
 New York 
 
 San Francisco . . 
 
 .....do 
 
 New Bedford . . . 
 
 Boston 
 
 San Francisco . . 
 
 New York 
 
 San Francisco . . 
 
 do 
 
 New York 
 
 San Francisco . . 
 New Bedford . . . 
 
 Boston 
 
 San Francisco . . 
 
 do 
 
 do 
 
 San Francisco . . 
 
 Boston 
 
 do 
 
 San Francisco . . 
 
 do 
 
 Port Townsend. 
 San Francisco . . 
 
 do 
 
 Boston 
 
 San Francisco . . 
 
 do 
 
 New York 
 
 Philadelphia . . . 
 San Francisco . . 
 
 do 
 
 do 
 
 do 
 
 New York 
 
 San Francisco . . 
 
 Boston 
 
 New York 
 
 Coos Bay 
 
 Machias 
 
 Gross 
 tonnage. 
 
 V98 
 
 616 
 
 1,570 
 
 1,248 
 
 1,616 
 
 620 
 
 1,436 
 
 870 
 
 1,668 
 
 1,028 
 
 820 
 
 852 
 
 238 
 
 684 
 
 1,208 
 
 1,029 
 
 634 
 
 1,469 
 
 932 
 
 1,430 
 
 1,678 
 
 1,369 
 
 1,133 
 
 214 
 
 123 
 
 1,212 
 
 1,097 
 
 1,468 
 
 686 
 
 1,534 
 
 1,477 
 
 690 
 
 1,380 
 
 1,578 
 
 1,201 
 
 708 
 
 765 
 
 979 
 
 1,080 
 
 1,491 
 
 643 
 
 448 
 
 1,063 
 
 1,877 
 
 265 
 
 715 
 
 608 
 
 719 
 
 1,764 
 
 616 
 
 749 
 
 835 
 
 303 
 
 875 
 
 682 
 
 1,981 
 
 1,163 
 
 692 
 664 
 638 
 
 1,109 
 
 1,167 
 397 
 498 
 900 
 592 
 
 1,211 
 674 
 670 
 614 
 865 
 690 
 389 
 
 1,062 
 468 
 707 
 644 
 522 
 651 
 739 
 
 When 
 built. 
 
416 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Name. 
 
 BAEKENTINES— continued. 
 
 Frances 
 
 Fremont 
 
 Fullerton 
 
 Gardiner City 
 
 George C. Perkins . 
 
 Georgina . 
 
 Glad Tidings 
 
 Gleaner 
 
 Good News 
 
 Hancock 
 
 Hattie G. Dixon 
 
 Hawaii 
 
 Herbert Fuller 
 
 Irmgard 
 
 J.B.Rabel 
 
 J.M. Griffith 
 
 James Johnson 
 
 James Tuft 
 
 n James H. Hamlen . 
 Jane L. Stanford . . . 
 Jennie Sweeney — 
 
 John Palmer 
 
 John Smith 
 
 John Swan 
 
 John C. Meyer 
 
 John S.Emery 
 
 Joseph L. Eviston . . 
 
 Josephine 
 
 Katie Flickinger ... 
 
 Klikitat 
 
 Kohala 
 
 Koko Head 
 
 Kremlin 
 
 Lahaina 
 
 Mabel I. Meyers 
 
 Makawell 
 
 Mannie Swan 
 
 Mary Barry 
 
 Mary Winkelman . . 
 
 Mary C. Hale 
 
 Newsboy 
 
 Northwest 
 
 Planter 
 
 Portland 
 
 Puako 
 
 Quickstep 
 
 Rachel Emery 
 
 Retriever 
 
 Robert Sudden — 
 
 Rose Innes 
 
 Ruth 
 
 S.G. Wilder 
 
 S.N.Castle 
 
 Shawmut 
 
 Skagit 
 
 Stephen G.Hart ... 
 Tam O'Shanter.... 
 Thomas P. Emigh , 
 
 Tropic Bird 
 
 W.H.Dimond 
 
 Westfield 
 
 White Wings 
 
 Willie R.Hume.... 
 Wrestler 
 
 Alcaca 
 
 Atalanta 
 
 C. C. Sweeney 
 
 *D. A. Small 
 
 Daisy 
 
 Fredericka Schepp . 
 
 Gabrlelle 
 
 Galilee 
 
 Geneva 
 
 Harriet G 
 
 Harry Smith 
 
 Havilah 
 
 Irene 
 
 Jennie Hulbert 
 
 John McDermott... 
 
 BRIGATINES. 
 
 Where built. 
 
 Gross 
 tonnage. 
 
 Baltimore 
 
 San Francisco . 
 Ix)s Angeles . . . 
 San Francisco . 
 
 do. 
 
 do. 
 
 Baltimore 
 
 San Francisco — 
 
 Baltimore 
 
 Boston 
 
 New York 
 
 San Francisco . . . 
 
 Machias 
 
 San Francisco . . . 
 
 New York 
 
 PortTownsend.. 
 San Francisco . . . 
 
 do 
 
 Portland 
 
 San Francisco . . . 
 Philadelphia — 
 San Francisco . . . 
 
 do 
 
 New York 
 
 San Francisco... 
 
 Boston 
 
 San Francisco . . . 
 
 Baltimore 
 
 San Francisco . . . 
 PortTownsend.. 
 San Francisco . . . 
 
 do 
 
 Boston 
 
 San Francisco . . . 
 
 Searsport 
 
 San Francisco . . . 
 
 New York 
 
 Portland 
 
 San Francisco... 
 
 New York 
 
 San Francisco . . . 
 
 do 
 
 Coos Bay 
 
 San Francisco . . . 
 
 do 
 
 do 
 
 ....do 
 
 Boston 
 
 PortTownsend.. 
 San Francisco . . . 
 
 New York 
 
 ....do 
 
 San Francisco . . 
 
 ....do 
 
 Boston 
 
 PortTownsend. 
 
 New York 
 
 San Francisco . . 
 
 do 
 
 ....do 
 
 do 
 
 Jacksonville 
 
 Baltimore ...... 
 
 San Francisco . . 
 do 
 
 Baltimore 
 
 New York 
 
 Philadelphia . . 
 
 Providence 
 
 New York 
 
 do 
 
 Boston 
 
 San Francisco . 
 
 do 
 
 do 
 
 Boston 
 
 New York 
 
 do 
 
 do 
 
 do 
 
 When 
 built. 
 
 670 
 345 
 
 1,554 
 476 
 388 
 998 
 654 
 413 
 712 
 412 
 628 
 
 1,085 
 781 
 670 
 450 
 606 
 
 1,149 
 
 1,274 
 672 
 970 
 643 
 
 1,187 
 688 
 721 
 932 
 919 
 765 
 940 
 472 
 493 
 891 
 
 1,084 
 786 
 
 1,067 
 750 
 899 
 776 
 608 
 622 
 568 
 688 
 515 
 584 
 524 
 493 
 
 1,084 
 423 
 673 
 547 
 616 
 836 
 488 
 604 
 614 
 468 
 606 
 605 
 592 
 1,040 
 347 
 390 
 458 
 678 
 665 
 470 
 
 403 
 370 
 622 
 119 
 439 
 268 
 464 
 364 
 495 
 252 
 520 
 688 
 491 
 440 
 664 I 
 
 1887 
 1860 
 1902 
 
 1901 
 1883 
 1892 
 
 1876 
 
 1900 
 
 1890 
 
 1889 
 
 1882 
 
 1882 
 
 1901 
 
 1901 
 
 1889 
 
 1892 
 
 1876 
 
 1900 
 
 1882 
 
 1889 
 
 1902 
 
 1890 
 
 1900 
 
 1896 
 
 1876 
 
 1881 
 
 1901 
 
 1902 
 
 1890 
 
 1901 
 
 1891 
 
 1902 
 
 1892 
 
 1882 
 
 1881 
 
 1875 
 
 1882 
 
 1868 
 
 1894 
 
 1886 
 
 1873 
 
 1902 
 
 1876 ' 
 
 1883 
 
 1881 
 
 1887 
 
 1881 
 
 1860 
 
 1866 
 1883 
 1879 
 1876 
 1901 
 1882 
 1881 
 1891 
 1889 
 1890 
 1880 
 
 1883 
 1881 
 1873 
 1868 
 1872 
 1877 
 1878 
 1891 
 1892 
 1878 
 1875 
 1877 
 1876 
 1880 
 1878 
 
HEARINGS BEFOEE THE MERCHANT MARINE COMMISSION. 
 
 417 
 
 Name. 
 
 BRIG AMINES — continued, 
 
 John D. Spreckels 
 
 John H. Crandon 
 
 Leonora 
 
 Lurline 
 
 Motley 
 
 Pitcairn 
 
 Sullivan 
 
 Tanner 
 
 William G. Irwin 
 
 Where built. 
 
 San Francisco 
 
 Mobile , 
 
 New Bedford 
 
 San Francisco 
 
 Machias 
 
 San Francisco 
 
 Boston 
 
 Seattle 
 
 Port Townsend... 
 
 Gross 
 tonnage. 
 
 266 
 517 
 458 
 358 
 590 
 166 
 344 
 291 
 348 
 
 When 
 built. 
 
 1880 
 1871 
 1874 
 1887 
 1877 
 1890 
 1866 
 1855 
 1881 
 
 STATEMENT OF JOHN B. ROACH. 
 
 The Chairman. Mr. Tucker has some letters which he wishes to 
 read. 
 
 Mr. Tucker. These are letters addressed to the chairman of the 
 local committee in charge of arrangements. 
 
 Office of the Delaware River Iron 
 
 Ship Building and Engine Works, 
 
 Chester, Pa., May £^, 190 1^. 
 Mr. Edwin S. Cramp, 
 
 Chait^man Com/mittee on Revival of American Shipping, 
 
 21(8 The Bourse, Philadelphia, Pa. 
 
 Dear Sir: 1 have your letter of the 20th instant, inviting me to 
 appear before the Merchant Marine Commission, which will be in 
 session at your office in The Bourse on Thursday, the 26th instant, for 
 the purpose of giving my views as to the character and kind of national 
 legislative assistance needed to reinstate the mercantile marine of the 
 United States to the position which it formerly held. I will endeavor 
 to be present if it is possible for me to do so, but desii'e to put myself 
 on record as being firmly of the opinion that assistance must be given 
 by the Government, and that quickly and substantially, if we are to 
 extend our maritime interests or even to retain the little that we have. 
 
 As you know, my father devoted a great deal of his time during the 
 busiest days of his life to urging national legislation in aid of American 
 shipping on very much the same lines as are now being considered by 
 those who are interested in the question. If John Roach's views, as 
 advanced thirty years ago, had been carried out, and this country had 
 gotten only a fair share of its own carrying trade, the difference to 
 American mechanics, manufacturers, farmers, shipbuilders, and ship- 
 owners would have been between 13,000,000,000 and 14,000,000,000, 
 or probably four times the national debt. This would have been the 
 saving in the amount of money that would have been kept in this coun- 
 try for the materials entering into the construction of ships, the cost 
 of building ships, of supplying them, operating them, and maintaining 
 them during these thirty years. 
 
 Had we a great industry of this kind carrying our own freights and 
 earning for American sailors and shipmasters our rightful proportion 
 of the cost of our carrying trade, our national wealth would have been 
 benefited by this great amount, and our people would have had oppor- 
 tunities for employment which would have done much to avert the 
 periodical depressions in our manufacturing lines. 
 3a— 04 27 
 
418 HEARINGS BEFORE THE MEBCHANT MARINE COMMISSION. 
 
 Shipbuilding and ship operating could be made two great national 
 enterprises if the Government at Washington would do as much for 
 American shipbuilding as our competitors in the carrying trade do for 
 theirs. 
 
 Trusting that you will have success in your undertaking, I am, very 
 truly, yours, 
 
 John B. Roach, President 
 
 STATEMENT OF LINCOLN K. PASSMORE. 
 
 The Penn Mutual Life Insurance Company, 
 
 Philadelphia, May 26, 1901,. 
 Geo. E. Bartol, Esq., 
 
 President, Bourse, Philadelphia, Pa. 
 
 Mt Dear Sir: Referring to your request for suggestions that will 
 aid in the solution of the perplexing problem of the revival and main- 
 tenance of an American merchant marine consistent with our standing 
 in other respects with other world powers, beg to say that I would 
 favor almost any legislation that will bring about this condition. 
 
 While the admission of foreign-built ships free of duty would per- 
 haps be the quickest solution, yet such legislation seems inconsistent 
 with and inimical to those other policies of our Government which 
 have brought the greatest prosperity to the most of our people. 
 . There seem to be only two other courses open — one of direct sub- 
 sidy or Government mail and other contracts, with right of use in 
 event of war or other emergencies, and the other that of bounty on 
 exports. The special claims of advantage to either of these remedies 
 have been set forth from time to time in expert testimony, and the 
 very honorable Commission having the general facts before them, it 
 would seem useless to multiply or duplicate reasons in the advocacy 
 of either, but rather to urge upon them the presentation to Congress 
 of a comprehensive policy to place us creditably upon the high seas 
 and sharers in the carrying of at least our own export commodities. 
 If ' ' export bountj"^ " is not possible, then ' ' subsidy. " If neither is feas- 
 ible, then "free ships." In any event, let us have a merchant marine, 
 believing that greater good must come to our people through its suc- 
 cessful establishment than to have our present conditions continue. 
 Very respectfully, yours, 
 
 Lincoln K. Passmoee. 
 
 STATEMENT OF DAVID C. REID. 
 
 The Harlan & Hollingsworth Company, 
 
 Wilmington, Pel., May 25, 190^.. 
 The Chairman of the Combiittee 
 
 ON the Revival of American Shipping. 
 iu^^^ij'^'^® company of which I have the honor of being president is 
 the oldest estabhshed shipbuilding firm in the United States, having 
 begun business in the year 1836. In 1843 they built the first iron 
 seagoing propeller steamer constructed in the United States, the 
 Bangor, commenced in 1842 and completed in 1843. The Bangor was 
 ot 231 tons burden, with twin-screw propeller engines having cylin- 
 ders 22 inches in diameter by 24-inch stroke of piston. The record 
 
HEARINGS BEFOBE THE MEECHANT MARINE COMMISSION. 419 
 
 of her trial trip is still in the possession of this company, her average 
 speed on her trial trip being 10.61 miles per hour. Since this time, 
 under varjjring conditions, the construction of ships has been continued 
 in the Wilmington yards. 
 
 It has also been my experience to have had some four years' man- 
 agement of an American line of steamers, and 1 have also to a certain 
 extent been identified in the management of English and Norwegian 
 steamship property, so that 1 think I can approach the subject which 
 you have under consideration, not only from the shipbuilder's stand- 
 point, but also as a shipowner. 
 
 It is generally conceded that the cost of building steamships in the 
 United States is at a disadvantage in point of increased cost, anywhere 
 from 6 to 60 per cent, as compared with the shipbuilding yards of 
 England, Scotland, Denmark, and Norway. This, to my knowledge, is 
 caused by the higher standard of living demanded by the American 
 workman. If this were the only cause that could be attributed to the 
 falling off in the American merchant marine, the mechanical ingenuity 
 of our people and the natural desire of the American owner to build 
 at home would in a very short time overcome the difficulty. Unfor- 
 tunately, however, the operating expenses of American ships are, to 
 my knowledge, about double what they are on the foreign vessel. 
 
 UNDER TWO FLAGS. 
 
 As part owner of the steamship David, a foreign-built vessel of 
 1,400 tons, now under the American flag, 1 would state that this vessel 
 was run in the fruit trade out of New Orleans to Spanish Honduras 
 for two successive years — the first year under the American flag, when 
 thewages account was $1,280 per month, and the second year under the 
 Norwegian flag, in the same service and at the same charter, the wage;- 
 account was $630 per month. On another English-built vessel in which 
 I am interested, to meet the low rate of operating expenses in Norwc 
 gian vessels, part of the crew are Asiatics, who are kept on board 
 under the watchful eye of our paternal Government, so as to save the 
 owners from the shipping masters' charges. In the four years during 
 which I had the management of American ships there was little or no 
 complaint made of the personnel of the officers, who were mostly 
 American born, or the character or class of sailors, who were intelli- 
 gent, respectable men. The firemen were mostly foreigners, who, as 
 a rule, gave much trouble. 
 
 A NAVAL RESERVE. 
 
 In this connection, to my mind, more could be done for the Ameri- 
 can sailor by establishing a National Naval Reserve on the lines 
 pursued by the British Government, which give the sailors a bounty 
 and retainer, and standard wages for four weeks in each year, during 
 Which period they are in training aboard the reserve ship. These 
 ships are to be found in all large coastwise ports of Great Britain. 
 Fishermen and sailor men who go through their regular period of 
 four weeks' training receive during that time proper clotning and 
 about the same rate of pay as they would for day work. There is no 
 doubt in my mind but that the result has been to give all of the naval 
 reserve men of Great Britain a certain amount of standing and self 
 respect, and an education which leaves little to be desired. 
 
420 HEA"R1NGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Some testimony has been given before this committee to the effect 
 that it is necessary to create a desire to invest in American shipping, 
 but from my own experience and knowledge of conditions in the New 
 England States the investment of money in shipping is much more 
 general than would be supposed. 
 
 PROTECTION WAS SUCCESSFUL. 
 
 The history of the navigation laws of the United States shows that 
 the early navigation laws originated in a compact between the north- 
 ern and the southern colonies, a compact by which the slave trade was 
 to be allowed to continue for twenty years in consideration of their 
 adoption. The early navigation lawsof the United States were enacted 
 by the First and Second Congresses, of 1789, 1790, and 1792, and were 
 signed by President Washington, based very largely on the system 
 established in Great Britain. This consisted in levying tonnage dues 
 and import taxes, discriminating to sui'h an extent in favor of the 
 American shipping as to give it a monopoly in certain trades. The 
 coasting trade was from the first wholly reserved for the exclusive use 
 of American vessels. The law of 1790 provided for a tonnage duty of 
 30 cents to be levied upon ships of the United States and 50 cents on 
 all foreign vessels. A commission of 10 per cent on goods imported 
 in American bottoms was also allowed. Under these conditions the 
 American mercantile marine almost equaled the whole of the com- 
 mercial fleets of Europe at the end of forty years. 
 
 ENCOURAGE BUILDER AND OWNER. 
 
 To mj;^ mind the revival of American shipping can be accomplished 
 easily by allowing the builder to overcome the difference in the cost 
 of building by a tonnage bonus equivalent to the difference in cost 
 between himself and his European competitors, and mileage allowance 
 sufficient to overcome the difference in wages and expenses paid in 
 American ships used in the foreign trade. I believe I am correct in 
 stating that to-day there are no less than 500 foreign steamers char- 
 tered by American firms engaged in the carrying trade to and from 
 American ports, not one of which but would be under the American 
 flag if conditions were equal. The American shipbuilder and ship- 
 owner have been left to fight out an almost hopeless task against the 
 subsidized foreign ship, the evil being accentuated, inasmuch as it is 
 not done openly and fairly, but by secret agreement between Euro- 
 pean governments and large steamship lines. Indeed, it is an almost 
 universally accepted fact that the Emperor of Germany recently 
 advanced personally to a shipbuilding firm in Germany the additional 
 cost of building two fast German vessels in order to prevent the 
 contract going to an English yard. 
 
 A COSTLY CHEAPNESS. 
 
 Congress looks on supinely and seems to flatter itself that the same 
 Gladstone school of economics which ruined the West Indian sugar 
 industry, by accepting the Continental bounty-fed beet sugar, should 
 be pursued to the destruction of this industry, and that the nation is 
 money in pocket by accepting the cheap services of the foreigner. The 
 
HEARINGS BEPOKE THE MERCHANT MABINE COMMISSION. 421 
 
 island of Jamaica, which suffered more than any other part of the 
 West Indies, has-been rescued by Boston capital invested in the fruit 
 industry and by the British Government in subsidizing the Elder 
 Dempster direct line of steamers at the urgent demand of Mr. Cham- 
 berlain in his capacity of minister for the colonies. 
 
 Before closing I should like to say a word in tribute to one of the 
 members of the committee, who has invited me to be present to meet 
 you to-day, and who is carrying on a very unequal battle against 
 Asiatic subsidies and Asiatic cheap labor on the Pacific. I refer to 
 Mr. Winsor, whose example alone should appeal to the sympathy of 
 our Government for the encouragement and assistance which it deserves. 
 Very respectfully, 
 
 David C. Reid, President. 
 
 Thereupon, at 5 o'clock and 25 minutes p. m., the Commission 
 adjourned until to-morrow, Friday, May 27, 1904, at 10 o'clock a. m. 
 
 Rooms of the Boaed of Tkade, 
 The Bourse, Philadelphia, Pa., May 27, WOJi.. 
 The Commission met at 10 o'clock a. m. 
 
 Present: Senators Gallinger (chairman). Lodge, Penrose, and Mal- 
 lory, and Representatives Minor, Humphrey, and Spight. 
 
 STATEMENT OP THEODORE JUSTICE. 
 
 Theodore Justice appeared before the Commission. 
 
 The Chairman. Kindly state to the Commission what your busi- 
 ness is. 
 
 Mr. Justice. I am in the wool business. 1 represent the wool- 
 growers of the United States, who are busy tending their flocks on 
 the prairies, many of whom never see anybody from one week's end 
 to the other, but who have an interest in this question and have not as 
 yet been heard. I also desire to speak for the farming class, who 
 likewise have not as yet been heard. 
 
 I have no interest in shipping, but as yet apparently nobody has 
 been heard to speak for the millions of taxpayers who will pay this 
 bounty if you grant it; and I wish to speak for that class. And the 
 basis of/ it is this: This is an important question, and since the devel- 
 opments in maritime conditions in the war now being carried on it 
 is more important than ever before. The question of the impor- 
 tance of an auxiliary navy is brought to our notice. The immense 
 advantage which Japan has over Russia brings to our notice the fact 
 that in some respects we are very much in the condition of Russia. 
 We have a splendid Navy, of which we are all proud, but we lack the 
 auxiliary feature which Russia lacks and which, so far, has been her 
 cause of disaster. 
 
 It has been urged in some of our local papers that this is a local 
 matter which affects only men who are interested in shipping, and 
 Mr. Hill stated in New York that it is a commercial matter only. 
 
422 HBABINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Mr. Hill in my judgment was grievously mistaken. It is a national 
 question, and it involves not only our well-being, bxrt it may possibly 
 involve our national existence. 
 
 Something was said here yesterday about the Government assisting 
 in irrigating the arid lands, and it was intimated that the people on 
 the seaboard have no interest whatever in that matter. But such 
 remarks do not represent the sentiments of those of the population of 
 this country who are interested in the development of our industries. 
 There is a parallel between assisting the men who own arid lands to 
 make them fertile and in developing there an industry which is latent, 
 but may become enormous, and the development of our merchant 
 marine by Government help — bounty, subsidy, or whatever you may 
 choose to call it. 
 
 AKIN TO THE TARIFF QUESTION. 
 
 It is somewhat akin to the tariff question which has developed our 
 manufactures. To-day 90 per cent of the clothing worn by the Ameri- 
 can people is made in American mills. A hundred years ago there 
 was not a mill in the United States. Everything was imported. With- 
 out that Government help we would not be in the proud position we 
 now occupy : without Government help our auxiliary navy will never 
 be developed; without Government help the arid lands perhaps will 
 never be developed. But here are three conditions which are all akin 
 to each other and they are all alike, and I wish to speak for the hun- 
 dreds of thousands of people who have no direct commercial interest 
 in this question. 
 
 You have heard suggestions made by men in the business, and it 
 seems to me that Captain Randle and some others have pointed the 
 way to a solution of the matter. But I merely want to speak to you 
 on the subject of the importance of this matter to every man in the 
 country. 
 
 MARKETS BUT NOT SHIPS. 
 
 Mr. Hill is reported to have stated that what we want are markets. 
 We have the markets. We are importing in round figures $1,000,- 
 000,000 worth of merchandise and are sending back in round figures 
 $1,600,000,000 worth. There is a market for the marine service of the 
 country of $2,500,000,000. We have the markets. The market is there, 
 but we have only 8 or 10 per cent of it. It is as possible for us to get the 
 other 80 per cent— to get 90 per cent of it— as it has been possible for 
 us to get 90 per cent of the manufacturing of clothing for the Ameri- 
 can people and to do it in the same way— by Government help. 
 
 That is all I care to say. 
 
 STATEMENT OF EDWIN S. CRAMP. 
 
 Edwin S. Cramp appeared before the Commission. 
 
 The Chairman. Mr. Cramp, I believe. vou are connected with the 
 Cramp Shipbuilding Company. 
 
 Mr. Cramp. I am vice-president of the company. 
 
 The Chairman. We will be pleased to hear from you concerning the 
 matters that we are here to inquire into. 
 
 Mr. Cramp. Thank you. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 423 
 
 I have thought it necessary to go over some of the questions con- 
 nected with the cost of a ship, because I think bad impressions were 
 received f romsome statements made in New York. Of course, 1 merely 
 saw the statements published in the papers and I thought they were 
 rather misleading. 
 
 Preceding the Spanish-American war prices of materials entering into 
 ship construction were at the lowest point ever known, and lower in 
 this country than in Europe, so much so that the price ruling then was 
 1 cent a pound for all plates and shapes at Pittsburg. At the same 
 time the prices ruling in England were from $25 to $27 per ton. 
 
 The difference between the price at Pittsburg and the price charged 
 by the English mills afforded a ready market for the surplus of this 
 country, so that many hundred thousands of tons of materials were 
 delivered at Glasgow and other shipbuilding points in Great Britain 
 in competition with the prices ruling there. Subsequently, the Span- 
 ish war occurring, and the great prosperity following the first year of 
 McKinley's Administration, caused prices to become so high in this 
 country that in the course of the next two years the exportation of 
 such materials ceased altogether. 
 
 EXCESSIVE COST OF MATERIALS. 
 
 The extreme range of prices within four years varied in England 
 from $27 to $37 a ton, whereas in America materials under thfe same 
 tests of Lloyd's and other classification societies have varied in price 
 from $20 upward to $60 a ton. To-day the prices which have been 
 maintained by the manufacturers are as follows: Steel plates, 1.75 
 cents; shapes, angles, and channels, 1.75 cents; and bulb angles, 1.75 
 cents per pound. On the other hand, the prices ruling in England are 
 as follows: Steel plates and shapes delivered clear of insurance and 
 freight at Philadelphia, but no duty paid, 1.40 cents per pound. 
 
 The ability to consume steel in this country increased beyond the 
 most sanguine expectations, so that in six or seven years we more 
 than doubled the product of our pig iron. Yet the delivery of these 
 materials was so slow and uncertain that frequently we were compelled 
 to wait a year before our orders wer,e finally completed. 
 
 This, as you may see, interfered with our output and necessarily 
 increased the cost of production, whereas in England an order for all 
 the material entering into the construction of a vessel could be 
 delivered inside of two months. 
 
 For nearly six years back freights have been as low, if not lower, 
 than at any time in the history of shipping. Wages have been cut 
 from 5 to 10 per cent in shipbuilding and marine engineering circles. 
 These factors, together with the fact that prices for materials for ship- 
 building have receded until they now average about $25 a ton, have 
 had the effect of inducing shipbuilders in England to offer to con 
 struct ships at abnormally low figures. At 1. 75 cents as the base price, 
 or $40 per ton, you will see that the builder in this country starts off 
 with a handicap against him of $15 per ton. 
 
 HIGH RANGE OF WAGES. 
 
 Not only do we suffer under these disadvantages, but, commencing 
 with Mckinley's Administration, labor has risen in this country by 
 
424 HEARINGS BEFOEE THE MEKCHANT MARINE COMMISSION. 
 
 reason of the gjreat prosperity from 30 to 40 per cent, so that the 
 argument which you have heard urged so often that the American 
 mechanic can do much more than an English mechanic, and that the 
 introduction and application of labor-saving devices enables the Amer- 
 ican to increase his output very largely over that of England, does 
 not hold good. The same labor-saving devices that we have introduced 
 and applied in America are being introduced and applied in every ship- 
 yard in Great Britain, so that the amount of work a man can do there 
 is increasing, and will continue to increase. At the same time we are 
 paying double the wages— from 50 to 100 per cent more than is being 
 paid in England for the classes of labor. 
 
 If we apply the figures as to the cost of materials in the construction 
 of a 12,000-ton ship intended for crossing the Atlantic Ocean, the steel 
 and iron which enter into both hull and outfits and engines and boilers — 
 that material alone being 60 per cent higher here — will amount to a 
 handicap against the American builder on one single ship of fl50,000. 
 Then, if you add to that the difference in the price of labor you will 
 see at once the great difficulty which the shipbuilder here is laboring 
 under if he wishes to put his ship on a line to foreign ports in compe- 
 tition with a vessel built at a foreign city. 
 
 Senator Mallory. I do not want to inteiTupt you, as I know your 
 time is limited, but 1 should like to know the reason you ascribe for 
 the rise in the price of shipbuilding material in this country. 
 
 Mr. Cramp. It is only that prices have been maintained by the 
 manufacturers. 
 
 Senator Mallory. You do not know how? The demand certainly 
 has not increased. 
 
 Mr. Cramp. The demand has fallen very rapidly within the last 
 year. 
 
 Senator Mallory. Since prices have been kept up ? 
 
 Mr. Cramp. They have been kept up. It is not only the case with 
 shipbuilding material, but it is true of all structural material. 
 
 Senator Mallory. I should like to know whether you connect the 
 two. Has the demand for other structural material affected the price 
 of shipbuilding material ? 
 
 Mr. Cramp. It has. 
 
 ENGLAND BUILDING MANY SHIPS. 
 
 There is another argument which I do not think has been brought 
 out enough in talking over this question as to the cost of ships here as 
 compared with England— which, of course, the steamship company 
 must stand— and that is the fact that in England shipbuilding and 
 shipowning is their great industry, as railroading is in this country. 
 The volume of ship construction there is so great that shipbuilders 
 have been enabled to devote their attention to specialties; for example: 
 Some yards build only large cargo boats, others high-speed steamships, 
 others naval vessels, others torpedo boats and destroyers, others 
 smaller craft, from 5,000 tons down; whereas in America, owing to 
 the want of a large market, the builder who may have from fiive to six 
 slips will frequently have under construction the same number of 
 ships, every one of which is of a different type. You can see a large 
 tugboat on one slip, a river steamer on the"^next, a cargo boat on the 
 next, a cruiser on another, and a battle ship or a passenger ship on 
 the next slip. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 425 
 
 Now, while this diversity of product may result in a better all-around 
 knowledge of his trade on the part of the individual shipbuilder, yet 
 you can see that it certainly interferes very seriously with his cheap- 
 ening the production. If the American shipbuilder, as has been the 
 case on the Great Lakes, had the opportunity of selecting his type of 
 ships and could have his five or six vessels all of the cargo type under 
 construction at one time it would enable him to introduce methods of 
 piecework, of standardizing of details, etc., which would enormously 
 decrease the cost of construction. This, of course, has been the reason 
 why that in iron and steel, and industries of a kindred nature gener- 
 ally in America, the individual manufacturer had been enabled to pay 
 higher wages, and by reason of liis enormous output so to cheapen 
 the production that he can undersell the manufacturer of similar arti- 
 cles abroad who would pay lower wages. 
 
 Nothing led to the achievement of this result so much as the aid 
 given by our Government in land grants for twenty years, which led 
 to the building of the great number of transcontinental and Pacific 
 railroads, and the building up of rail mills, locomotive works, and other 
 allied industries. 
 
 Now all this, of course, refers to the first cost of the ship being 
 higher in this country than in England and has nothing whatever to 
 do with the operating expenses of the vessels after construction. The 
 matter has been taken up very exhaustively by Mr. Chamberlain in his 
 report of 1902. 
 
 ONCE 10 OK 15 NOW 40 PEK CENT. 
 
 For these reasons enumerated above the cost of ships in America, 
 which at the time of the beginning of the McKinley Administration 
 had approximated the cost of the ships of a similar type by first-class 
 builders in England within 10 or 15 per cent, to-day can not be pro- 
 duced within 40 per cent. 
 
 It will be well in speaking of this question to very clearly bring out 
 the fact that the bai'e statement as to cost by free ship men is mislead- 
 ing, for the reason that with the people who made a specialty of build- 
 ing cargo boats on the east coast of England the cost by them is 
 frequently from 10 to 20 per cent higher than the cost of building the 
 same type of ship by the people of Glasgow and Belfast, and any 
 comparisons made should have this fact clearly in view. 
 
 Also the percentages of difi'erence of the cost as a basis of compari- 
 son varies with the class of the vessel. 
 
 With the low-priced cargo boat and tramp the per cent is larger 
 than with the high-speed, high-class passenger ship, which latter more 
 nearly approximates in price the American -built vessel of similar 
 requirements. 
 
 The above-mentioned causes have in part brought about the present 
 condition of affairs. 
 
 The responsibility for the other part rests with the Congress of the 
 United States, which has deliberated for over fifty years and accom- 
 plished but very little effective results in this direction. 
 
 MR. cramp's eecommendatioxs. 
 
 To compensate for the omissions of the past I would suggest: 
 (1) That Congress should pass an act similar to the one introduced 
 by Senator Lodge in December, 1903. The increase in shipbuilding 
 
426 HEARINGS BEFOEE THE MEKCHANT MAKINE COMMISSION. 
 
 and shipowning that would follow the enactment of such a law would 
 be so great that it would test the full capacities of the constructive 
 establishments as well as the efficiency and capabilities of the personnel 
 in the shipowning line. 
 
 The Chairman. In a word, state what that bill contemplates. 
 
 Mr. Cramp. Indirect discriminating duties. 
 
 The Chairman. I suppose you are aware of the fact that there are 
 some thirty-odd treaties in the way of legislation of that kind ? 
 
 Mr. Cramp. I know there is an awful lot of trouble ahead of any- 
 thing you may want to do in this world. 
 
 Senator Mallort. However, they can all be abrogated at most by 
 two years' notice. 
 
 The Chairman. Yes. 
 
 Representative Spight. I understand that you favor discriminating 
 duties ? 
 
 Mr. Cramp. Indirect discriminating duties. 
 
 (2) An increase in the postal compensation of at least 50 per cent, 
 bringing the call up to the amount incorporated in the original bill of 
 1891. The statement was made at the time of the passage of the act 
 that the amounts as amended would not be sufficient to accomplish any 
 great results, which certainly has been the case. 
 
 (3) Inasmuch as the huge 20,000-ton ship was not thought of in 1891, 
 there should be another rate established for vessels of not less than 
 15,000 tons, having a speed of not less than 22 knots. As Senator 
 Penrose expresses it, mail compensation routes should be established 
 by law for strategic effect, and this would provide all of the high-class 
 auxiliary cruisers that the Government might require. 
 
 Among the great advantages of such indirect discriminating duties 
 would be that the profits would not be excessive, thereby not tempting 
 the promoter to establish lines for flotation purposes only, destroying 
 the business of the regular companies, nor stimulating the organization 
 of mushroom shipbuilding companies with their subsequent receiver- 
 ship troubles. 
 
 Time is an element in any solid growth, and in no case is this more 
 true than inthe commercial world, but the Government must give the 
 inspiration for the first step. 
 
 "free ships" delusive. 
 
 The policy of free ships will not rehabilitate the merchant marine 
 any more than free trade in materials. For the past ten years we 
 could have availed ourselves of the use of foreign materials for Ameri- 
 can vessels in the foreign trade, but whea business was at its height 
 the prices of materials were lower here than abroad. Now, while the 
 prices are lower abroad than here, no one wants to build any kind of 
 vessel. 
 
 Representative Spight. What is your idea about the injurious effect 
 on the United States of the free-ship policy? 
 
 Mr. Cramp. In what way; on shipbuilding establishments? 
 
 Representative Spight. Yes, sir. 
 
 Mr. Cramp. It would shut up every establishment in the United 
 States. 
 
 Representative Spight. You think it would? 
 
 Mr. Cramp. There is no question of it. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 427 
 
 Senator Penbose. Would not some yards have to be open for repairs 
 and work of that kind? 
 
 Mr. Cramp. The song about the repair business is one that is sung 
 very often. The repair business to-day is not enormously profitable. 
 The repair business is done on the basis of contiacts, and the lowest 
 bidder gets it. The ship is surveyed by Llo3'ds or the American 
 Bureau of Shipping, and the lowest bidder gets the work. 
 
 Representative Spight. Would your repair business amount to any- 
 thing scarcely? 
 
 Mr. Cramp. It would not amount to any more than it does now, 
 because no English company repairs a ship here that it can take abroad 
 and repair; In many, many cases temporary repairs are made here, 
 and then the vessel is taken to Germany or France or England. 
 
 Recently an Italian vessel was dismantled off the capes of Delaware, 
 and because the owners thought the price for repairs was high, even 
 that of the lowest bidder, they sent a tugboat out from Europe to tow 
 that sailing vessel all the way to Italy to be repaired. 
 
 The Chairman. As a matter of fact, a boat can be repaired cheaper 
 in the yard where she was built, especially when they are building a 
 line of boats, than in an independent yard ? 
 
 Mr. Cramp. Always. 
 
 HOW FREE SHIPS WOULD WORK. 
 
 Representative Spight. Do you think the free-ship policy, if 
 adopted, would seriously affect the shipping interests of this country ? 
 
 Mr. Cramp. There would not be any shipping interest in the country. 
 
 Representative Spight. You think it would ruin it? 
 
 Mr. Cramp. Americans could not afford to pay 60 per cent more 
 for a ship 
 
 Representative Spight. I want to know something along that line. 
 Democrats have been a little inclined toward a free-ship policy. I am 
 not prepared to speak for myself with regard to it, and I want to 
 know something about it. I should like to hear from you some reason 
 why a free-ship policy would not be a good one for this country. 
 
 Mr. Cramp. An American who starts in the ship-owning business 
 pays as much for two ships, we will say, as the foreigner pays for 
 three. Therefore, he is handicapped right off'; and in running those 
 ships he pays as much in the wage account to operate the two snips as 
 the Englishman does for three. Now it all comes down to a question 
 of earning capacity Can that American live, running two ships 
 against the other man's three, which carry 50 per cent more cargo on 
 the same amount of money invested? He can not do it. It would 
 ruin any railroad to be run on that basis. The most destructive kind 
 of competition in the railroad buisiness is a railroad in the hands of a 
 receiver, and so it is in shipping. 
 
 Representative Spight. How long have you been in the shipbuild- 
 ing business? 
 
 Mr. Cramp. It was stated in a letter here yesterday that another 
 was the oldest shipbuilding concern in America. I think we have the 
 privilege of claiming that nonor. Our business was established by my 
 grandfather in 1830. 
 
 Representative Spight. Was your grandfather an American citizen? 
 
428 HBAEINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Mr. Ceamp. He was, and my family were Americans for genera- 
 tions before him. He was a ship carpenter by trade. A reporter once 
 asked him what his father was and he said a fisherman. Then he asked 
 what his father was, and he said a pirate. So we always have been 
 webfooted. [Laughter.] 
 
 The present Congress in passing three wise measures for the rebuild- 
 ing of the American merchant marine has done more than any previous 
 Congress, and should that same body pass such measures as the ones 
 above suggested, it can be truthfully said that it will have accom- 
 plished more and better results than all previous Congresses. 
 
 AGAINST _" WHITEWASHED " TRAMPS. 
 
 In closing I would like to say something of the necessity of this 
 Commission committing itself in favor of a few "pot boilers." 1 
 speak for the cog-st trade. The conquests of the United States arms 
 in the last seven years in the acquisition of Porto Rico, Hawaii, and 
 the Philippine Islands have added imperial possibilities for the devel- 
 opment of the coastwise business. 
 
 For years past the attention of all commercial classes has been turned 
 to the profitable pursuit of getting ahead of the Government by the 
 enrollment of whitewashed tramps and floating coffins. 
 
 In the last twenty years over 350 of this class of vessels have been 
 granted American registry. Of this number there are still afloat 63 
 steamers, and of the latter 48 are in the coast-wise trade. 
 
 This commercial crime has been encouraged by builders who 
 repaired, by companies who bought the wrecks, and by Congress 
 which enrolled them. The result has been nothing but bad. A free- 
 ship enrollment of the same number of foreign vessels of modern type 
 and construction would have been of some value; but the class and 
 number of ships that have been thus registered have contributed 
 largely to the destruction of the building industry and also to the low- 
 ering of the quality of the floating equipment of the nation. The 
 most celebrated, the Merrimac, saved her reputation by being sunk at 
 Santiago. 
 
 Representative Spight. I understand you are opposed to any legis- 
 lation that looks to admitting foreign-built ships? 
 
 Mr. Ceamp. I am opposed to any such legislation, of every kind and 
 description. 
 
 Representative Spight. Do you think that it ought to be carried 
 to the extent of providing that no vessel built in a foreign yard, regard- 
 less of the expense later incurred in American yards, shall be admitted? 
 
 Mr. Cramp. That was the original idea- — 
 
 Representative Spight. 1 want some light on that line, because I 
 ha,ve sometimes voted for bills admitting such vessels to American 
 registry that I did not really approve. 
 
 a peivilege abused. 
 
 Mr. Ceamp. Even in times past we, as builders, have followed the 
 old rule, that if a certain percentage of a ship's selling value was 
 expended in American yards, she was entitled to enrollment. But 
 that has been subject to constant abuse, and I think it has had as much 
 to do with the destruction of the shipbuilding and ship-owning busi- 
 ness in this country as any other factor. 
 
HEAEINGS BEFORE THE MEBOHANT MAEINE COMMISSION. 429 
 
 Representative Spight. I should like you to explain to me why if 
 a ship is practically rebuilt in American yards it ought not to be 
 admitted to American registry 'i 
 
 Mr. Cramp. I will put it this way. A vessel is wrecked. She is 
 bid in for $50,000. That vessel before being wrecked must have been 
 worth a couple of hundred thousand dollars. The owners spend perhaps 
 $50,000 or $1 00,000 repairing her. It has been a regularly organized 
 business within the last seven or eight years to buy up those vessels. 
 The Merrimao w&s such a case. Eventually she becomes an American 
 vessel and her value doubles. Instead of being worth $100,000, she 
 becomes worth $200,000 immediately that she is registered. 
 
 Representative Spight. I understand that. 
 
 Mr. Cramp. Right away the man who owns a ship built in America, 
 built by high-class mechanics — built at a high price — is hurt to an 
 extent by the other man coming in and establishing a pirate line along- 
 side of him; and it has been done. 
 
 Representative Spight. Is it your idea that it hurts the shipbuild- 
 ing interest more than the shipowning interest? 
 
 Mr. Cramp. The shipowner in that case makes $100,000 right off. 
 
 Representative Spight. The shipbuilding and the shipowning inter- 
 ests are opposed to each other in tnat case. 
 
 Mr. Cramp. The shipowner who really has a first-class line should 
 have protection against the pirate who can buy up three or four of 
 these wrecks and start a line and ruin him. It is protection both ways. 
 
 Such a policy as has been pursued is manifestly destructive to the 
 builder and to the mechanics; it harms the shipowner who has built 
 the high-priced American ship, and it robs the nation in times of emer- 
 gency when it must depend on such vessels for transport and collateral 
 services. 
 
 Properly fostered the American coast trade can be built to the pro- 
 portions of the mercantile marines of any of the nations of the world, 
 saving only the four largest. 
 
 Another "pot boiler" for the American marine would be to require 
 the materials entering into the construction of the Panama Canal to be 
 carried in American bottoms. 
 
 WOULD COST LEAST. 
 
 I have spoken in favor of the indirect discrimination and of an increase 
 in the postal compensation, because they carry little or no grant of 
 money from the Public Treasury. 
 
 There seems to be a public sentiment prevalent which refuses to 
 indorse any such measures as are best exemplified in the encourage- 
 ment given the Cunard Line by the British Government. It is the 
 most prominent example of special legislation and treasury grabbing 
 that the world has ever seen, and yet no man on this Commission has 
 heard or read of its condemnation by any American reformer or purist. 
 
 To do more than I have intimated in my judgment would harm the 
 business, and to do nothing will result in its total annihilation. 
 
 Crystallize into laws these suggestions and the volume of trade for 
 American bottoms will give the engineer and the contractor the num- 
 ber of vessels, so that they can specialize and standardize with ever- 
 cheapening effect, and the cargo will be carried on the American ship 
 as cheaply, comparatively, as the freight is carried on the American 
 railways, but it will not come before. 
 
430 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 The wise statesmen of Congress legislated for the building of the 
 railways of the West, and why not at this time and in the same way 
 legislate for the steamship routes of the ocean ? 
 
 SUBSIDY OR DISCKIMINATING DUTY. 
 
 Representative Spight. I wish you would state what your views 
 are with reference to the permanent advantage to the American mer- 
 chant marine of a subsidy — a direct bounty — as compared with indirect 
 discriminating duties. I think you ought to be able to give us some 
 information on that subject. 
 
 Mr. Cramp. We are in favor of bounties. We are in favor of dis- 
 criminating duties. There seems to be a determination, from all that 
 we have been able to find by investigation, particularly through the 
 Middle West 
 
 Representative Spight. T^ou do not understand my question. I 
 wish to get at the comparative value of the two systems. 
 
 Mr. Cramp. I really believe that discriminating duties would be of 
 more lasting benefit. 
 
 Representative Spight. More permanent? 
 
 Mr. Cramp. More permanent. 
 
 Representative Spight. 1 think so, too. 
 
 Mr. Cramp. They might give a slower growth to the lines, but it 
 would be more permanent. 
 
 Senator Mallory. Yesterday a gentleman who addressed the Com- 
 mission made the point against discriminating duties, that we would be 
 giving the same benefit to a vessel which brought a cargo from Habana 
 to New Orleans, a distance of about 600 miles, that we would give to 
 a vessel from Australia to New York, a distance of 10,000 miles, say. 
 Have you anything to say as to that? 
 
 Mr. Cramp. I do not think the trade between Australia and the 
 United States is as heavy a cargo trade as that between Cuba and the 
 United States. 
 
 Senator Mallory. I am citing that as an illustration. Take any 
 other part of the world. 
 
 postal compensation sometimes better. 
 
 Mr. Cramp. I should think with Australia the postal compensation 
 would be the better form. We now have a number of vessels going 
 to Australia in the Spreckels Line, some four or five in number. But 
 the compensation is not sufficient to encourage those people to continue 
 to build ships to keep up with the German ships. W hen the Mariposa 
 and the Alameda^ vessels of 3,200 tons, were built, they were about the 
 largest ships that cruised down that way. Recently Spreckels has 
 built ships of 6,000 tons, and the Germans have put on ships of 8,000 
 and 10,000 tons. If there was more encouragement in the line of 
 postal compensation, trade on what might be called those strategic 
 routes would be constantly developed. 
 
 Senator Mallory. Eliminate the idea of strategic routes and take 
 discriminating duties, which apply to all imports from foreign coun- 
 tries by vessels other than vessels of the country from which the 
 imports are brought, and which would apply of course to every 
 importation made into this country. 
 
 Mr. Cramp. Yes, sir.' 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 431 
 
 Senator Mallort. Now, the gentleman who addressed us yester- 
 day — I have forgotten his name — made the point that a vessel which 
 did a service to the commerce of the United States by bringing a cargo 
 10,000 miles would receive no more compensation for it than a vessel 
 which would bring a similar cargo 600 miles. 
 
 Mr. Cramp. That is a drawback. 
 
 Senator Mallory. In your judgment, is there anything in that 
 point? If there is I should like toliear it, because I have no doubt it 
 will be raised hereafter. 
 
 Mr. Cramp. Take the trade with South America, which is altogether 
 one sided. We buy altogether from South America. The cargoes 
 for South America go from Europe. Any aid at all given by way of 
 discriminating duties would turn things so much in our favor that we 
 would be handling their cargoes instead of their going to Europe on 
 the celebrated triangular route. 
 
 So far as South Africa is concerned, I believe the trade is altogether 
 in our favor. The imports from South Africa are not so large as the 
 exports to South Africa. Mining machinery and all such supplies 
 come from the United States. 
 
 Senator Mallory. The gentleman I refer to made the point that 
 under a discriminating duty a vessel which performed the service of 
 carrying a cargo 500 miles would receive as much compensation, in 
 any way in which a vessel would receive compensation, as another 
 vessel that traveled 10,000 miles. 
 
 Mr. Cramp. That is the case. 
 
 A graduated discrimination. 
 
 Representative Minor. That can be cured by the form of the law 
 by providing that for voyages of from 500 up to 1,500 miles such and 
 such a discrimination shall be made. 
 
 Mr. Cramp. That has been incorporated in various bills before. 
 
 Representative Minor. And for a voyage of from 1,500 to 3,000 
 miles so much. 
 
 Mr. Cramp. Make the rates of discrimination differ according to the 
 length of the route. The trade with countries far removed would be 
 transacted in vessels of larger size than would be used in the trade 
 with adjacent countries. It is a well-known fact that cargo can be 
 carried per ton-mile for much less in the huge vessel than it can in the 
 smaller one. This would equalize in large measure the apparent ine- 
 quality that you speak of. It would also be analogous to the railway 
 situation that Mr. J. J. Hill speaks of, where the heavy train, bj' rea- 
 son of the huge locomotive, heavy rails, and 50-ton cars, has worked 
 marvels in cheapening the long-distance haul. 
 
 Senator Mallory. Under the old law there was no such point made. 
 If a foreign vessel brought goods to this country, there was an addi- 
 tional tariff laid oa the goods. When brought in an American vessel 
 the ordinary tariff rates would apply. No distinction was made as to 
 distances. I should like to hear from the other side, and I suppose 
 we will before the Commission closes its inquiry, on the point made 
 by the gentleman who spoke here yesterday. 
 
 FREIGHT materials JDST AS GOOD. 
 
 Representative Minor. I wish to ask you two or three questions. 
 Speaking about the English material that enters into the construction 
 
432 HEARINGS BEFOEB THE MERCHANT MARINE COMMISSION. 
 
 of ships being cheaper at this time than such material is here, the 
 foreign market fluctuates, does it not? . 
 
 Mr Cramp. Yes; but the fluctuations have not been so violent as 
 they have been here. . 
 
 FOREIGN MATERIAL JUST AS GOOD. 
 
 Eepresentative Minor. How does the quality of that material com- 
 pare with the American product? 
 
 Mr. Cramp. I would rather not answer the question. As a rule, 
 I think the process by which they manufacture steel over there tor 
 shipbuilding purposes is at least equal if not superior to ours. 
 
 Eepresentative Minor. We want the truth. 
 
 Mr. Cramp. That is the case. Any metallurgist knows that. 
 
 Eepresentative Minor. Some people claim that ours is the best. 
 
 Mr Cramp. What forced the English people to use steel was the 
 inferior character of their iron plates. A vessel running up the Dela- 
 ware Eiver in cold weather would encounter ice, and the plates between 
 the frames would be shorn right down as if made of paper; and plates 
 were a good deal thicker then than they are to-day. That hastened 
 the introduction of steel plates in England more than any pther one 
 
 factor. ■, , J- J. 1 
 
 Eepresentative Minor. There is a great deal of dispatch given a 
 
 steamer in quick loading and unloading. 
 
 Mr. Cramp. No doubt. 
 
 HELPING ALL THE PEOPLE. 
 
 Eepresentative Minor. If shipping were properly encouraged, is it 
 not true that bere in seaports on the coast they would improve the 
 freight-handling facilities to such an extent that you would get very 
 much better dispatch than you are now getting ? 
 
 For instance, compare your facilities herewith ours upon the Lakes; 
 not that I want to boast of the Lakes particularly, but I do think we 
 are strictly in it. A steamer can not make any money when she is 
 waiting to be discharged or when she is taking on freight. She makes 
 money only when she is running. If in its wisdom Congress should 
 see fit to enact some legislation helping our merchant marine, we would 
 do it on the theory that it helps all the jjeople. We are not attempt- 
 ing, and never will, to build up one special industry at the expense of 
 another. If we can show to the people of the country that it is for 
 their benefit to help the ships, and thereby reduce the rate of freight, 
 we will be justified; and if we can give you better dispatch by encour- 
 aging you to build more ships and increase and improve facilities for 
 handling freight, there is a chance that we will reduce the freight rate. 
 
 Mr. Cramp. There is no doubt of it. A good many people have an 
 idea that if there were a subsidy or a bounty the steamship companies 
 would get all the benefit. They would not. Half of it would go back 
 into the rates. The rates would be cheapened that much. That is 
 always the case. 
 
 Eepresentative Minor. We have cheapened the price for carrying 
 wheat from 15 cents to 1^ cents. We carry a ton of coal 1,000 miles 
 for about the price it costs* you to take it from the sidewalk into the 
 basement. 
 
 Mr. Cramp. We handle and transport freight on the Lakes cheaper 
 than anywhere else in the world. There is no question about it. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 433 
 FINANCE ANb SHIPPING. 
 
 Representative Minor. In England the great financial institutions 
 are loaning money on marine property. They regard it as gilt-edged 
 security, and they loan money on it at a low rate of interest. If we 
 should proceed along the lines suggested now and encourage " the 
 merchant marine by some legislation that seems to meet the condi- 
 tions, it would take money to build ships, and our people would have 
 to borrow. Tell us, if you please, how you think financiers would 
 consider marine securities. 
 
 Mr. Cramp. The grant should be made in the form of a contract 
 with the individual shipowner. No banker would care to finance a 
 steamship company if he thought inside of a year Congress was likely 
 to repeal the law. 
 
 Representative Minor. We would have to fix a term. 
 
 Mr. Cramp. You would have to fix a term. There must be a con- 
 tract made for a term of years between the Government and the ship- 
 owner. 
 
 Representative Minor. We can not leave it to the change of Admin- 
 istration. 
 
 Mr. Cramp. In England such commercial risks are as much thought 
 of as railroad risks are in the United States. The greatest shipyard 
 in the world was built up by association with the bankers of Belfast. 
 They always have pursued a liberal policy there. Steamship companies 
 ought to build ships in hard times, but nobody has nerve enough to do 
 it. They all wait until the boom is on and then pay a high price. 
 
 This shipbuilding company pursued the policy of building two or 
 three ships of a type, and then the bankers of Belfast would stand 
 back of them. Frequently it has had to invest a million or a million 
 and a half pounds sterling. The banks would be protected by having 
 bonds issued, payable in one, two, three, four, or five years. They 
 would get a certain percentage in cash and the rest in notes, which 
 would run at a very low rate of interest — 2, 3, or 4 per cent. They 
 have built up one of the greatest steamship lines, the White Star 
 Company, which was practically built by Harland & Wolff, and Har- 
 land & Wolff are now such a big company that they build as much 
 tonnage as all the shipbuilders there together. 
 
 Representative Minor. Do you think if we enact such legislation as 
 will convince the financial men of the country that a profit can be 
 derived from investments in ships, money could be borrowed on such 
 propertj' ? 
 
 Mr. Cramp. It could be loaned just as easily as it can be borrowed 
 to-day on trolley bonds, and in equal amount. 
 
 satisfied with LLOYDS. 
 
 Senator Mallort. Has your attention ever been called to the alleged 
 discrimination against American ships by the Lloyds Association and 
 other classification associations ? 
 
 Mr. Cramp. It never has. I think that is one of the things which, 
 when you investigate it, you will find is not true. We have built more 
 vessels under the English Lloyds than any two concerns in the United 
 States. The English Lloyds representatives are all men of extremely 
 high professional standing. Picked men are sent over here, and they 
 3a— 04 28 
 
434 HEAEIIS-GS BEFORE THE MEEOHANT MAEINE COMMISSION. 
 
 and the shipbuilder clash sometimes in their interpretation of specifi- 
 cations or rules. Their representatives may have a certain dilierence 
 of opinion with the builder, but it is altogether in the line of good 
 
 work. i 11 • ii, i. 
 
 Senator Mallory. Do you think it cuts any figure at all in the mat- 
 ter of freights ? . i • . i_ 
 
 Mr. Cramp. I think not. In addition to that, there is this to be 
 said: That with an agency like that, separated from the home office, 
 very often men have to be a little more resolute against permitting 
 modifications than they would nearer home. That results from the 
 fact that a man away from home does not dare to take the responsi- 
 bility. I have heard that charge made to which you refer, but I do 
 not think there is anything in it. We have never found it in our 
 experience. 
 
 A CHANGE OF OPINIONS. 
 
 The Chairman. If I remember correctly, you were an advocate of 
 the so-called Hanna-Payne subsidy bill ? 
 
 Mr. Cramp. Yes, sir. 
 
 The Chairman. From your statement this morning, you seem to 
 have changed your drag-rope somewhat and are now an advocate of 
 differentials? 
 
 Mr. Cramp. Yes, sir. 
 
 The Chairman. If we adopt your theory, to abrogate treaties so far 
 as indirect discrimination is concerned, we come in conflict with thirty- 
 four treaties, I think, some of which are with the great nations of the 
 world. What do you think would happen in the line of retaliation if 
 we abrogated those treaties 1 
 
 Mr. Cramp. Congress frequently passes tariff bills which come in 
 conflict with the interests of some of those nations. What can they 
 do? 
 
 The Chairman. Exactly. We will take France, Germany, Italy, 
 and some other great countries which have tariff laws to-day. If we 
 discriminate against them will they not discriminate as against us? 
 
 Mr. Cramp. Has not Germany discriminated in every case against 
 us? 
 
 The Chairman. Certainly. 
 
 Mr. Cramp. Even the laws passed by Parliament are interpreted 
 arbitrarily by the Emperor. There was the celebrated case during 
 Bismarck's time, when, in order to keep out American-canned meats, 
 and so on, he put such imports under the iron and steel schedules 
 because the products came in tin cans, and it was an effective device. 
 America would not attempt any such discrimination. 
 
 The Chairman. Do you not discover a good deal of difference 
 oetween the material that we send to foreign nations and which foreign 
 nations must of necessity buy of us and the question of shipping? 
 
 Mr. Cramp. The materials we send abroad we send because we can 
 manufacture them cheaper than they can. 
 
 The Chairman. We will not take manufactured goods. We will 
 take agricultural products. Of course England can not discriminate 
 against her food supply, which she must have from this country; but 
 as an illustration, suppose England should retaliate by saying that 
 goods coming to England in American vessels shall pay a 10 per cent 
 duty and in English vessels shall come in free. Would we get any 
 benefit from our differential in that case? 
 
HEARINGS BEFORE THE MEKOHANT MARINE COMMISSION. 435 
 
 Mr. Cramp. She could do that only on the necessaries of life, and 
 it would raise the cost of living in England. 1 think the margin is so 
 small there that she could not afford to do it. It would make bread 
 riots. 
 
 The Chairman. You have no fear of commercial war in the event 
 that we should abrogate 34 solemn treaties with foreign countries? 
 
 Representative Spight. Take England as an illustration. Do you 
 think England Could afford to put on such a discriminating duty on 
 our food products or our cotton? 
 
 Mr. Cramp. No; she would have bread riots immediately. 
 
 STATEMENT OF CHARLES PLATT. 
 
 The Chairman. I have a brief statement prepared by Mr. Charles 
 Piatt, president of the Insurance Company of North America, which 
 seems to be an argument for free ships; and unless there is objection 
 on the part of some member of the Commission I will have it inserted 
 in the proceedings at this point. The Chair hears no objection. 
 
 The statement is as follows: 
 
 The decline of American shipping dates from the time of the civil 
 war, during which American shipowners placed their vessels under 
 foreign flags for safety and afterwards found it impossible, under the 
 navigation laws then and now existing, to again obtain American reg- 
 istry. The provision of this law prevents American citizens from 
 building or buying vessels in foreign countries and availing themselves 
 of the cheapest market. The cost of building in the United States is 
 approximately 25 per cent greater than in England, and, when built, 
 the expense of operating the vessel is also 25 per cent greater, owing 
 to the high rate of wages and general expenses. The facts above 
 stated are quite sufficient to account for the present deplorable condi- 
 tion of the American merchant marine. In considering the proper 
 remedies to be applied for the reinstatement of American shipping a 
 grave problem presents itself, but the following suggestions are 
 respectfully offered: 
 
 The amendment of the navigation laws, so as to enable American 
 citizens to build or purchase ships in the cheapest market, an equitable 
 duty of not exceeding 10 per cent on the cost to be imposed by the 
 United States Government. If this should be adopted a large and 
 remunerative business would be at once created for the shipbuilding 
 interests now almost idle, in the necessary repairs to such vessels. 
 Unless some step of this nature be taken, it is unreasonable to suppose 
 that capital will seek uncertain investments, unless a fair return can 
 be hoped for. Another remedy would, in the opinion of the writer, 
 be such a modifi.cation of the present tariff as would produce ample 
 revenue without undue protection to any one interest. It would be 
 manifestly unjust to admit shipbuilding materials free from all duty, 
 while other interests were protected by a high tariff. If, however, a 
 high tariff is to be maintained to protect certain large interests then 
 the only remedy for the reinstatement of the mercantile marine would 
 be what is known as a subsidy to place shipping on the same plane 
 with other interests. This, while it might offer temporary relief, 
 would only serve to perpetuate discriminating legislation and would 
 not, in the opinion of the writer, reach the root of the evil. 
 
 The United States of America is great enough and rich enough to 
 abolish a high protective tariff' which only serves to foster certain 
 
436 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 large intej-ests at the expense of the people at large. It seems to the 
 writer the granting of a subsidy would be somewhat ona par of grant- 
 ing the same concession to the fire insurance companies of America 
 who are now protecting the property of citizens throughout the country 
 at a loss and without any protection against the introduction of foreign 
 companies who are admitted to do business on the same terms as the 
 American companies, which is, perhaps, one of the most striking 
 instances of free trade now prevaiKng. Indeed, the foreign companies 
 are more favorably situated than American companies for the reason 
 that in making their statements they do not take into consideration 
 their home condition, but are simply enabled to compete with the 
 American companies by the deposit of' $200,000 in the New York State 
 Insurance Department. I am not finding fault particularly with this, 
 but merely cite it as an illustration bearing upon the subsidy question. 
 Respectfully submitted. 
 
 Chas. Platt. 
 
 STATEMENT OF FRANK D. LA LANNE. 
 
 Mr. La Lanne. Mr. Chairman, it has been my pleasure to take an 
 eight months' trip to Europe, from which I have just returned, and 
 during that trip I met a great many Englishmen, among them Mr. 
 Joseph Chamberlain, and the feeling of those gentlemen was one of 
 great admiration for the wise laws passed by our Congress, particu- 
 larly our tariff laws. 
 
 They spoke of the wonderful prosperity of our country, and all of 
 them said that their trade would be taken away from them unless they 
 could come around to our way of thinking; and, as we know, Mr. 
 Chamberlain already has started a tarifl" agitation. 
 
 I am a strong advocate of a protective tariff, and will always be, 
 because I believe that the prosperity of our manufacturers is due to 
 wise tariff laws. It seems to me that with over two billions of busi- 
 ness of the United States, and only 8 per cent of that business in foreign 
 commerce, being carried in American vessels, we are staring in the 
 face a very great calamity. In the event of war between Germany 
 and England, 75 per cent of the transportation facilities of our country 
 would be taken away. I think it is the duty of Congress to be very 
 liberal toward our shipping interests now. Having been an importer, 
 and not a shipbuilder, I speak from that standpoint. While, perhaps, 
 it might be considered a crude measure to go back to old methods, yet 
 almost the first law passed in America and signed by George Wash- 
 ington was one giving a rebate upon all customs duties on merchandise 
 imported in American whips. I think wise laws on those lines would 
 build up our merchant marine so that there would be no American 
 commerce done in foreign bottoms. I haA'e prepared a letter embody- 
 ing these views, which I will be glad to submit. 
 
 The letter referred to is as follows: 
 
 May 27, 1904. 
 The MERCPrANT Marine Commission, Philadelphia. 
 
 Gentlemen: I have just returned from an eight months' trip in 
 Europe, where it has been my pleasure to meet many gentlemen, par- 
 ticularly Englishmen, connected with Government affairs. They all 
 spoke of the wonderful prosperity of my country, and all approve of 
 
HEABINGS BEFORE THE MERCHANT MARINE COMMISSION. 437 
 
 the wise laws made by our Congress, which have assured our pros- 
 perity, particularly our tariff laws, which have enabled us to keep out 
 foreign competitors and have built up our industries, so that many of 
 us feel that we owe all we have to wise legislation. I am a strong 
 advocate of a protective tariff and will always be so, and we now see 
 that our neighbors — England, France, and Germany — are coming 
 around to our way of thinking. 
 
 With a commerce of over $'2,000,000,000 a year, and 8 per cent of it 
 only carried in American ships, leaving more than 90 per cent of the 
 business of this country to be carried by foreign ships, I feel that there 
 is staring in our face the possibility of a dreadful calamity. A war 
 between Great Britain and Germany would at once cut off 75 per cent 
 of the ships engaged in our foreign commerce, and would leave our 
 manufacturers, our merchants, and our farmers stranded for transpor- 
 tation vessels to send our surplus products abroad, and it would be such 
 a serious matter that a terrible panic, 1 fear, would be the result. As 
 we know, in 1861 our tonnage was 2,500,000,000; in 1902 it had shrunk 
 to one-third of that. With very crude tools sometimes wonderful 
 results have been accomplished. Our shipping interests were taken in 
 hand very early by our first Congress, and, I think, while it may be 
 called a crude measure, one of the very first measures that George 
 Washington signed was one to give a rebate on duties for merchandise 
 carried in American ships. 1 would advocate to-day the same thing — 
 a rebate of 15 to 20 per cent of the tariff duties on merchandise carried 
 in American ships — and I believe before long there will be plenty of 
 American ships built, so there will be little commerce between tnis coun- 
 try and foreign countries other than that carried by our own vessels. 
 Yours, very truly, 
 
 Feank D. La Lanne. 
 
 STATEMENT OF HON. ROBERT ADAMS, JR. 
 
 The Chairman. Is Representative Adams present? 
 
 Mr. Adams. He is. 
 
 The Chairman. Mr. Adams, the Chair has been informed that you 
 would be pleased to occupy a few minutes. 
 
 Mr. Adams. A very few minutes, Mr. Chairman. 
 
 Allow me to express the honor and pleasure I have in appearing 
 before such a distinguished Commission, composed of gentlemen whom 
 I know so well. 
 
 The Commission no doubt has heard from the practical men of our 
 
 fort the necessities for the development of our merchant marine, 
 propose, with your permission, to state a few facts, founded on my 
 own observation, of the development of business owing to the granting 
 of subsidies to steamship lines by foreign countries. 
 
 In 1889 when our Secretary of State, Mr. Blaine, proposed to 
 develop our pan-American commerce, which, in my judgment, was 
 one of the most statesmanlike schemes that ever emanated from an 
 American man in public life, I was sent abroad under that Adminis- 
 tration to the court of Brazil to represent our country. I was sent 
 more particularly to study the economic conditions of Brazil, and 
 to see what, if anything, could be done toward the development of 
 our relations with that country. It was a well-known fact that when 
 we had the fast-sailing clipper ships in the American merchant marine, 
 
438 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 we commanded the trade on the eastern coast of South America. We 
 entirely commanded the cotton-goods market. Blue jeans and our flour 
 were the only ones purchased in those countries. 
 
 In tbe change in the construction of vessels from wood to iron, as 
 we all know, the sailing vessels disappeared and the iron ships became 
 the masters of the sea. Foreign countries, realizing the advantages 
 of rapid communication for building up trade, at once established lines 
 to ports in the Argentine and Brazil for the purpose of building up 
 their trade. The result was that our market for cotton goods was lost; 
 our flour shipments decreased; and we practically lost the entire trade 
 on the eastern coast of South America. 
 
 I proceeded to investigate the causes of this more particularly, and 
 through secret sources at my own expense I gained considerable infor- 
 mation and made a report to the State Department in 1890. 
 
 FOREIGN SUBSIDIES IN BRAZIL TRADE. 
 
 The facts were these. Nearly every steamship line that came into 
 the port of Rio de Janeiro was subsidized by its government, and, fur- 
 thermore, after the commerce had been built up, they asked for no fur- 
 ther support from their governments, and were able to increase the 
 number of ships on their lines owing to the increased business. These 
 facts will be substantiated by anyone who is familiar with what I 
 relate. 
 
 Furthermore, Mr. Chairman, the main thing that called me to my 
 feet this morning was the pathetic story 1 read in the paper, as related 
 by Mr. Thurber, about the one American line to Brazil. 1 went on 
 one of those vessels, the Allianca. It has since become historic in 
 our difficulties respecting Cuba. A better line never sailed out of 
 any port — well officered, well equipped, good ships — and up to the 
 institution of that line there was no direct communication between our 
 country and the eastern coast of South America. 
 
 If a man sent a letter or shipped goods to that country, he had to 
 send them to Liverpool and around by the line sailing, from that port 
 or some other English port. The result was that with those means of 
 communication it took from sixty to seventy days to get an answer to 
 a business letter on any subject. With the institution of this line 
 things improved very materially. Our exports to Brazil increased 
 over f 1,000,000 in two years. 
 
 More than that, sir, to show how rapid communication can develop 
 trade (and it is the prime necessity, in order to build up any traffic 
 between two countries, not only tbe transportation of goods, but the 
 mail facilities and the rapid transit of salesmen and others who wish to 
 place goods on the market) I will cite just one instance as an illustra- 
 tion. The Henry Planet, jr., Manufacturing Company, of this city, 
 sent out a salesman with some cultivators, which had never before 
 been seen in that country. I arranged a meeting with the horticulture 
 society to enable him to exhibit his cultivators, and before that man 
 left Brazil he had to refuse orders. 
 
 It is not only the economic question as to what we are paying foreign 
 countries for the transportation of our goods and for seamen's wages 
 and insurance and interest on capital that enters into this question, 
 but withoutour own steamship lines, and without direct and proper 
 communication with other countries and means of transportation under 
 
HEARINGS BEFOEE THE MEBCHANT MAEINE COMMISSION. 439 
 
 our control, in my judgment it is almost impossible to build up our 
 foreign trade. 
 
 I do not 57ish to detain you longer. The eyes of our country are 
 now turned toward the Far East, and theie lies a great international 
 problem which will come before our countrj'. We are trying to hold 
 our own in the future trade of China. It is considered to be the one 
 unopened mart of the world, for which the commercial world is about 
 to struggle. 
 
 OUR MARKET TO THE SOUTHWARD. 
 
 But, Mr. Chairman, in my judgment we have to the south of us an 
 open field to cultivate, with nlillions of people who to-day are educated 
 to use our exports, our machinery, our appliances, our electrical appa- 
 ratus, and other things, whereas the 400,000,000 in China have to be 
 educated up to the point before they will use what we export. It is 
 from this point of view that I consider it more essential to our mer- 
 chants and to our carrying trade that we regain, and regain in an 
 enlarged degree, the trade that lies ready for us in South America. 
 
 Mr. Chairman, in a few remarks I made in Congress when the bill 
 providing for the creation of this Commission was debated, I printed 
 as an appendix the report I made to the State Department in 1890, 
 which contains a list of all the subsidies given to foreign steamship 
 companies entering the port of Rio Janeiro. With your permission, 
 sir, I will file it with the Commission, to be appended to my remarks 
 on this occasion. 
 
 The Chairman. It will be printed as a part of your statement. 
 
 The report referred to is as follows: 
 
 BRAZIL. 
 
 [Report by Minister Adams, of Rio de Janeiro.] 
 
 On receipt of Department's instructions I sent a note to the foreign 
 office here, seeking the information requested therein. Receiving no 
 reply as yet, I have made personal effort to obtain it, and am greatly 
 indebted to Mr. W. C. Peck, an American citizen engaged in the ship- 
 ping business here for twenty years. I have the honor to inclose his 
 statement. If I receive an official reply from the foreign office I will 
 forward it at once. 
 
 Owing to a change in the direction of the mint I have not been able 
 to answer interrogatory No. 7 as yet. 
 
 Robert Adams, Jr., Minister. 
 
 United States Legation, 
 
 Hio. de Janeiro, October 9, 1889. 
 
 BRITISH FLAG (eIGHT LINES). 
 
 (1) London and Antmerp direct line to Brazil. — This service is per- 
 formed by steamers chartered for the purpose, having none of their 
 own. Arrivals here are four and five per month. They generally sail 
 from this port or Santos in ballast homeward, seeking employment. 
 Cargo capacity, 2,000 to 3^000 tons. No passengers. No state aid. 
 Freight rate, 20 to 30 shillings per ton. 
 
440 HEAKINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 (2) Direct line to Brazil from London, Hamburg, mid Antwerp).— 
 This service is about equal in all respects to that of the above-mentioned 
 compan,y. The steamers of both lines sometimes go as far as Rio 
 (xrande'do Sul and Porto Alegre. Freight rate, 20 to 30 shillings per 
 ton. No state aid. 
 
 (3) Eoyal Mail Steam Packet Company.— ^^om. Southampton to 
 River Plate; fortnightly sailings from each end, touching both ways 
 at Brazilian ports; sailing dates strictly observed. This company have 
 a large and magnificent fleet of fast passenger and cargo steamers and 
 employ the requisite number in this trade to make fortnightly sailings; 
 also giving extra voyages when required. Passenger accommodation, 
 200 to 250 first-class, 150 second-class, and 500 to 700 third-class; cargo 
 space, about 3,500 tons each. The steamers now on this route are 
 nearly all new, and make very rapid voyages. Freight i-ate, 25 to 40 
 shillings per ton. The company operates in other directions also. 
 Receives State aid. 
 
 (4) Lvverpool, Brazil, and River Plate Steam Navigation Company 
 {Limited). — ^From Liverpool, London, and Antwerp to Brazilian ports, 
 as far as Santos, and direct to River Plate. Regular arrivals in Rio 
 de Janeiro from Europe, six to eight per month; extra voyages as 
 required; also direct to River Plate ports without calling here. This 
 company has a fleet of o^'er fifty steamers, and have, in addition to 
 these, a great many chartered steamers. It is impossible to give more 
 than a bare outline of their operations. The steamers arriving here 
 and in Santos from Europe are generally sent homewards via United 
 States ports in the absence of cargo in the Plate. Other steamei'S of 
 the direct service are sent here also to be loaded for United States 
 ports; if no cargo is obtainable, these latter proceed homewards in bal- 
 last. In addition to the above service a line subsidized by Belgium 
 (fortnightly sailings) is run from Antwerp direct to the Plate, touch- 
 ing here on the homeward voyage. This line is intended for passen- 
 gers, and can accommodate 50 to 60 first class, 30 to 40 second 
 class, and 60 to 100 third class. But few of the other steamers have 
 passenger accommodation, and in these it is limited. The cargo 
 capacity of the steamers is from 2,500 to 5,000 tons. The company 
 also operates coastwise from Rio de Janeiro to Rio Grande do Sul, 
 Pelotas, and Porto Alegre, weekly sailings each way. No State aid 
 except to the Belgian line. Freight, 25 to 40 shillings per ton. 
 
 (5) Pacific Steam Navigation Company. — From Liverpool to the 
 west coast of South America, touching at Brazilian and River Plate 
 ports both ways. The service is fortnightly from each end; sailing 
 dates strictly observed; extra voyages as required. Their fleet is 
 composed of nearly all new and magnificent steamers, and are larger 
 than those of the Royal Mail Company. They operate on the west 
 coast, coastwise, and to Australia also. Freight rate, 25 to 40 shill- 
 ings per ton. Receives State aid. 
 
 (6) Shaw, Savill & Albion Company (Limited).- — Monthly service 
 from New Zealand to London, calling at Rio de Janeiro. These 
 steamers are very fine and fast. Accommodation for 120 first-class, 
 100 second-class, and 300 third-class passengers; cargo, about 4,000 
 tons each. Freight rate, 30 to 40 shillings per ton. Receives State 
 aid. Extra voyages when required. 
 
 (7) New Zealand Shipping Company {Limited). — Monthly service 
 from New Zealand to London, touching at Rio de Janeiro. Steamers, 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 441 
 
 etc., same as those above described. Freight rate, 30 to 40 shillings. 
 Receives State aid. 
 
 (8) Oulf line of steamer's. — From Liverpool and Antwerp for west 
 coast of South America, touching here once or oftcner per month as 
 required. Small passenger accommodations. Cargo space, 3,000 to 
 3,500 tons each. No State aid. 
 
 GERMAN FLAG. 
 
 Hamihurg - Siidamerikaniscke Da/mffschifffahrts - Gesellschaft. — 
 Weekly sailings from Hamburg, calling at Brazilian ports as far as 
 Santos; extra voyages as required; also six to eight sailings monthly 
 direct to Plate ports; these latter call at Rio de Janeiro on the home- 
 ward voyages, thus giving from nine to twelve monthly homeward 
 sailings from Rio de Janeiro. Fleet consists of thirty-five steamers, 
 with cargo capacity of 2,000 to 3,000 tons each. Accommodations for 
 40 to 60 first-class, 30 second-class, and 100 to 200 third-class passen- 
 gers. Freight rate, 25 to 30 shillings per ton. No State aid. 
 
 Robert Slowmcm Line, Hammonia. — From New York and Baltimore 
 to Brazilian ports as far as Santos, returning to United States, calling 
 here and at other ports. Fleet.consists of steamers with cargo capacity 
 of 2,500 to 3,000 tons each; voyages each way as frequent as possible. 
 No passenger accommodation. Freight rate, 25 to 35 shillings per 
 ton. No State aid. 
 
 North German Lloyds. — Monthly and fortnightly sailings from Brc; 
 men and Antwerp, as demand requires, for Brazilian ports as far as 
 Santos, and direct service to the Plate, the latter calling here on home- 
 ward voyages, thus giving two to four homeward sailings per month 
 from Rio de Janeiro. Steamers accommodate 60 to 100 first-class, 50 
 second-class, and 200 to 300 third-class passengers. Cargo capacity, 
 2,000 to 3,000 tons each. The company have a very large fleet, and 
 operate in other directions also; they put extra steamers in this service 
 as required. Freight rate, 25 to 30 shillings. Receives State aid. 
 
 ITALIAN FLAG. 
 
 Navigazione Oenerale Ltaliana Societe Heunita, I'lordoeRubatino. — 
 This company operates from Mediterranean ports in many directions. 
 The service to Brazil and the River Plate is carried on by a very large 
 fleet, which run direct to the Plate. Arrivals here from Europe are 
 three to six per month, as required. Their fleet consists of about 100 
 steamers. Can accommodate 50 to 200 first-class, 60 second-class, and 
 500 to 1,500 third-class passengers. Cargo capacity, 1,500 to 3,500 
 tons each. Freight rate, 20 to 30 shillings per ton. Receives State 
 aid. 
 
 Company La Yeloce. — From Mediterranean ports as far as Santos; 
 also direct to Plate. Voyages, two to four per month both ways, as 
 required. Accommodations for 60 to 70 first-class, 60 second-class, 
 and 600 to 1,500 third-class passengers. Freight rate, 20 to 30 shil- 
 lings per ton. No State aid. 
 
 AUSTRIAN FLAG. 
 
 Austro-Hungwrian Lloyds. — From Trieste as far as Santos. Regu- 
 lar monthly sailing, fortnightly when required, touching at Brazilian 
 
442 HEARINGS BEFOEE THE MERCHANT MARINE COMMISSION. 
 
 ports both ways. Can accommodate 40 to 100 first-class, 50 second- 
 class, and 100 to 200 third-class passengers. Cargo capacity, 2,500 to 
 3,500 tons each. Freight rate, 25 to 35 shillings per ton. The com- 
 pany has a large fleet, and puts on steamers as needed. Receives 
 State aid. 
 
 Adriatic Navigation Company. — From Flume as far as Santos, 
 regular monthly voyages, calling at Brazilian ports both ways; extra 
 voyages when required. No passengers. Cargo capacity, 2,000 to 
 3,000 tons each. No State aid. 
 
 FRENCH FLAG. 
 
 Messageries Maritimes. — From Bordeaux to River Plate, fortnightly 
 sailings from each end; sailing dates strictly observed; touching at 
 Brazilian ports both ways; also direct service to the Plate. The fleet 
 is composed of magnificent steamers making very rapid voyages. Can 
 accommodate 200 to 300 first-class, 160 second-class, and 700 to 800 
 third-class passengers. Cargo space, 2,500 to 3,500 tons each. 
 Operate to other parts of the world also; extra voyages as required. 
 Freight rate, 30 to 40 shillings per ton. Receives State aid. 
 
 Oompagnie Chargeurs Reunis. — From Havre as far as Santos, fort- 
 nightly sailings from each end, calling at Brazilian ports both ways; 
 also direct to the Plate, these frequently calling here on homeward 
 voyage; extra voyages as required; operate also to other ports. Can 
 accommodate 60 to 70 first-class, 30 to 40 second-class, and 100 to 200 
 third-class passengers. Cargo capacity, 2,000 to 2,500 tons each. 
 Freight rate, 25 to 35 shillings per ton. Receives State aid. 
 
 Societe Oenerale des Transports Maritimes. — From Marseille and 
 other Mediterranean ports to the River Plate, calling at Brazilian ports 
 outward and homeward; also direct to Rio de Janeiro and Santos. 
 This company make voyages as frequently as possible, say two to 
 four times per month, and at times a greater number; they operate to 
 other parts of the world also. Can accommodate 50 to 70 first-class, 
 24 to 40 second-class, and 700 to 1,500 third-class passengers. Cargo 
 capacity, 2,000 to 3,500 tons each. Freight rate, 25 and 85 shillings 
 per ton. Receives State aid. 
 
 BRAZILIAN FLAG. 
 
 Gompanhia Transatlantica Brazilina. — Just organized; will trade 
 from Brazil to north of Europe and Mediterranean ports. Receives 
 State aid. 
 
 Companhia Brazilina de Namigacao a Vapor.. — Three voyages per 
 month as far as Manaos. Very fine and fast steamers; nearly all new. 
 Receives State aid. 
 
 Companhia Nacional de Navegamo a Vapor. — Frequent regular voy- 
 ages to southern ports of Empire and as tar as Montevideo, also river 
 service thence to upper Brazil; are constructing a number of new 
 steamers. Receives State aid. 
 
 In addition to the three lines the Government subsidizes a great 
 number of smaller coast lines operating from here and other ports of 
 the Empire. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 443 
 
 AMERICAN FLAG. 
 
 United States and Brazil Mail Steamship Company. — Voyages from 
 New York to Santos, calling at Brazilian ports Dotn ways. Number 
 of sailings is about fifteen per annum. Fleet, three steamers. Cargo 
 capacity, 2,500 to 3,000 tons each. Can accommodate sixty to eighty 
 first-class and sixty third-class passengers. Freight rate, 35 to 35 
 shillings per ton. Receives State aid. 
 
 SUBSIDIES. 
 
 The amount asked for by the minister of agriculture for the year 
 1890 is 3,061,240 milreis, divided as follows, per annum: 
 
 Milreis.o 
 
 Companhia Nacionale de Navegacao por Vapor 651, 000 
 
 Companhia Bahiana 155, 000 
 
 Companhia Pemambucana 140, 000 
 
 Companhia Maranhense 170, 000 
 
 Companhia Brazilina 583, 200 
 
 Amazon Steamship Navigation Company 468, 000 
 
 Companhia Rio Parahyba 68, 000 
 
 Companhia Itaperuvien 12, 090 
 
 Companhia Lower San Francisco 40, 000 
 
 Empuza de Navegacao dos Rios Araguay, etc 125, 000 
 
 Foreign service: 
 
 American flag, United States and Brazil Mail Steamship Company . . . 190, 000 
 
 Brazilian flag, Companhia Transatlantica 300, 000 
 
 Total 2,911,090 
 
 The balance, 150,150 milreis, being for different smaller services. 
 
 SUBSIDIZED STEAMSHIP LINES. 
 
 Royal Mail Company, British Government, £96,000; Pacific Steam- 
 ship Navigation Company, Chile, uncertain; Shaw, Saville, Albion 
 Company, New Zealand, uncertain; New Zealand Shipping Company, 
 New Zealand, uncertain; North German Lloyds, German, uncertain; 
 Navigazione Generale, Italian, uncertain; Austro-Hungarian Lloyds, 
 Austrian, uncertain; Messageries Maritimes, French, 18,000,000 francs; 
 Chargeurs R^unis, French, uncertain;* Societe Generale, French, 
 uncertain;* Companhia Transatlantica, Brazilian, 300,000 milreis; 
 United States and Brazil Mail Steamship Company, Brazilian, 190,000 
 milreis. 
 
 TRAMP STEAMERS. 
 
 In addition to the regular lines mentioned, this port is very much 
 frequented by vast numbers of steamers arriving from many ports of 
 the world, principally from Europe; recently quite a number have 
 been coming with cargo from New York and Baltimore. These 
 steamers are vulgarly known as "tramps" and all are without excep- 
 tion under the English flag. 
 
 I may here mention that the expenses of discharging cargo in this 
 port, which is paid by steamers, amounts to 10 shillings upward per 
 ton. 
 
 a 1 milreis equals 54.6 cents. ''Are paid by the bounty system. 
 
444 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Rates on coffee, which is about the only article shipped hence to the 
 United States, will average about 25 cents per bag of 60 kilograms 
 weight, and the expenses of loading same (for steamer's accourt) is 
 about 14 cents per bag, this quite apart from charges in United States. 
 
 EXPORT DUTIES. 
 
 The treasury estimate of revenue to be derived from export taxation 
 for 1890 is fixed at 15,000,000 milreis. 
 
 Sugar is about the only article of export from Brazil that does not 
 pay the General Government export duty; the provinces still continue 
 collecting the provincial export duty on sugar, that of Kio de Janeiro 
 being 4 per cent on the custom-house valuation. 
 
 IMPORTS FROM AND EXPORTS TO THE UNITED STATES. 
 
 Exports from Rio de Janeiro to the United States during the crop 
 year July 1, 1888, to June 30, 1889: Coffee, 2,344,796 bags; by Amer- 
 ican steamers, 119,748 bags; by American sail craft, 221,444; total by 
 American steam and sail, 341,192 bags. The balance was carried by 
 foreign flags — 2,003,604 bags — showing 14.5 per cent per American 
 flag. Coffee is about the only article worth mention exported from 
 Rio de Janeiro. 
 
 Imports from the United States via Europe are now about 3 per cent. 
 
 STATEMENT OF WILLIAM R. KNIGHT. 
 
 William R. Knight appeared before the Commission. 
 
 The Chairman. State to the Commission what your present occupa- 
 tion is. 
 
 Mr. Knight. I am United States shipping commissioner at the port 
 of Philadelphia. 
 
 The Chairman. 1 wish to j-ead to you briefly from some testimony 
 that was given yesterday by a seaman. As 1 recall it, the seaman con- 
 tended that seamen can not get justice when they appear before United 
 States shipping commissioners in American ports. Mr. Alonzo Rich- 
 ards testified as follows in answer to questions by Senator Mallory 
 and the chairman : 
 
 " Senator Mallort. Does the crimp come in the coastwise trade? 
 
 "Mr. Richards. The crimp does not operate so strongly in the 
 coastwise trade. 
 
 " Senator Mallort. Does he operate at all there? 
 
 "Mr. Richards. Yes, sir. 
 
 " Senator Mallort. How? 
 
 "Mr. Richards. To a great extent. 
 
 "Senator Mallory. Where does he get the money? 
 
 "Mr. Richards. From the owner or captain; indirectly from the 
 sailor. 
 
 " Senator Mallort. Then the captain of the ship pays the crimp 
 contrary to the law ? 
 
 "Mr. Richards. Yes, sir. 
 
 "Senator Mallory. And deducts it from your pay? 
 
 "Mr. Richards. Yes, sir. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 445 
 
 " iSenator Mallort. Have you ever undertaken to collect that amount 
 from the captain when you came back at the end of your vo^'age ? 
 
 " Mr. Richards. No, sir. I can cite an instance that happened here 
 about a couple of months ago, in the case of the schooner Samuel W. 
 Hathway. The schooner shipped a crew from Norfolk, Va., down to 
 some part of Porto Rico, and the master of that vessel paid advance — 
 not to the men, but to some crimp in Norfolk without the consent of 
 the men. When the men made the voyage and came back here to the 
 United States shipping commissioner to be paid off, this money was 
 to be deducted. The men refused to pay this amount of money. The 
 matter was taken before the United States commissioner in this city, 
 at Ninth and Chestnut here, and to have further proof th-ey wired to 
 Norfolk, to a delegate of the union down there, to prove that the cap- 
 tain did pay this money before the voyage began. But the United 
 States shipping commissioner did not give the men any redress at all; 
 claimed the story was well composed, and the}'^ were a lot of sea law- 
 yers; and the money was taken out of the men's wages and compelled 
 them to pay it. They never got the benefit of it." 
 
 Subsequently Senator Mallory said: 
 
 " You say that the crew you have referred to went before a commis- 
 sioner. Was it a United States court commissioner or a United States 
 shipping commissioner? 
 
 " Mr. Richards. They went before the United States shipping com- 
 missioner first. 
 
 " Senator Malloey. Did they go before a United States court com- 
 missioner? 
 
 "Mr. Richards. Yes, sir; afterwards. 
 
 " Senator Mallory. And both of the commissioners treated them 
 the same? 
 
 "Mr, Richards. Yes, sir. 
 
 "The Chairman. Could you ascertain the names of those commis- 
 sioners in order that they might be summoned by this Commission? 
 
 " Mr. Richards. No, sir; I could not. 
 
 "The Chairman. TheCommission will try to ascertain their names." 
 
 Then Horace Atkinson, a seaman who had previously testified, inter- 
 rupted and said: 
 
 " I can give you the name of that commissioner. 
 
 " The Chairman. I wish you would give us his name. 
 
 "Mr. Atkinson. Commissioner Craig, clerk of the United States 
 district court, Philadelphia. The shipping commissioner's name is 
 Knight. 
 
 "Senator Penrose. William R. Knight." 
 
 The Chairman. Mr. Craig was requested to appear this morning, 
 and the report is made in his behalf that he is confined to his bed bj' 
 illness, and as your name was mentioned in this connection the Com- 
 mission would be glad to hear from you on this point. 
 
 KNEW nothing OF THIS CASE. 
 
 Mr. Knight. Mr. Chairman, in the first place I must frankly admit 
 that I know nothing whatever of this particular case. There are four 
 deputies under me in the ofiice of United States shipping commis- 
 sioner, and each of them is assigned to his particular duty, and I pre- 
 sume that this case came under the direction of a man by the name of 
 
446 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Mr. McGrogan, who usually pays off all the weameii in the ofiice, that 
 being the duty assigned him. 
 
 However, 1 think the statement made by that delegate of the tea- 
 men's Union is not made honestly or justly. To begin with, the ship- 
 ping commissioner can not settle any difficulty or any little dispute 
 that may arise between a captain and the men, unless both sides agree 
 that he "shall decide it and that his decision shall be final, and they must 
 both sign a paper to that effect. As long as I have been shipping 
 commissioner of this port, which is fifteen months, there never has 
 been one case decided by me. The seamen will never agree to have a 
 case decided before the United States shipping commissioner. They 
 always take the matter before the United States district court — always. 
 Therefore I know nothing whatever about this matter, but if the Com- 
 mission would like to get some information on it 1 will go over the 
 records. 1 will see Mr. McGrogan, who pays the men, and see what 
 he knows about it, and report in writing to the Commission, if that is 
 your desire. 
 
 The Chairman. We will be pleased to have you do that. 
 
 Mr. Knight. That is all I know. If I learn anything else I shall 
 be glad to supply it. 
 
 The Chairman. You say the seamen object, as a rule, to having 
 their cases arbitrated before the shipping commissioner? 
 
 Mr. Knight. In every instance. They will not allow the United 
 States shipping commissioner to settle any differences arising between 
 them and the captain. 
 
 The Chairman. As a rule, are the captains willing to have such 
 arbitration ? 
 
 Mr. Knight. There have come to my knowledge five or six cases 
 where there have been disputes, and in every instance but one the 
 captain was perfectly willing to have the matter settled before me. 
 In the one instance the captain would not, saying he was right and 
 that if he agreed to have it settled before me, as my decision was final, 
 if it was against him he would have no redress, but if he went before 
 Commissioner Craig and the case was decided against him he could 
 still take an appeal. 
 
 Senator Penrose. It was suggested in New York that it would be 
 well to extend the powers of the shipping commissioner as a means 
 of removing_ some of the evils of the crimp system and some of the 
 troubles incident to the paj'ment of wages, prepayments, and other 
 matters. I know you have given some thought to the matter, although 
 you have recently been appointed, and I should like to know what 
 your thought is upon that suggestion. 
 
 ^ Mr. Knight. I believe that more power should be given the United 
 States shipping commissioners, and then, whenever the man was a man 
 of good judgment and wanted to be fair and had any ability, it would 
 mean better results to everybody concerned. 
 
 ALMOST NO authority. 
 
 _ Senator Penrose. Now you practically have no authority or juris- 
 diction of any importance? 
 
 Mr. Knight. Practically none. 
 
 Senator Penrose. Do you think the office could be made one of 
 very great importance for the protection and betterment of seamen 
 particularly ? 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 447 
 
 Mr. Knight. There is no question about it. 
 
 The Chairman. In New York the suggestion was made that by law 
 the shipping commissioner might be given authority to accept money 
 from seamen to be forwarded to their families. Would you think that 
 a wise policy ? 
 
 Mr. Knight. I should think it would be. It would be better to 
 designate the shipping commissioners for that purpose than some out- 
 side parties. 
 
 The Chairman. It was also suggested in New York by the shipping 
 commissioner there that it would expedite matters and contribute to 
 the ends of- justice and to the general welfare to vest the shipping 
 commissioner with authority to settle disputes between master and 
 seamen, subject to an appeal to the district court. Have you given 
 that matter any consideration? 
 
 Mr.KNiGHT. Yes, sir; I have thought that over, and I believe it would 
 be a good thing to do, because the United States shipping commission- 
 er's office, as I see it to-day, is a nonentity, practically. They ignore 
 us entirely. 1 am not going to say a word in criticism of the seamen's 
 union; I believe it is a good thing; but whenever there is any trouble 
 at all, no matter how trifling, between the seamen and the captains, as 
 soon as the boat arrives in port the delegate of the seamen's union is 
 there, and after talking with the men he at once advises them to go to 
 Commissioner Craig. Our office is ignored at once. Therefore we 
 have no authority or power. 
 
 Senator Penrose. 1 understand that. Another point I wish to 
 inquire about is with respect to the duties of your office. Are they so 
 multifarious that the additional duty of settling these disputes — for, of 
 course, you would have to hear testimony and sit, in a measure, in a 
 judicial capacity — would take so much of j'our time that you could not 
 attend to tne other important duties of the office? 
 
 Mr. Knight. No, sir. 
 
 STATEMENT OF JAMES A. O'BEIEN. 
 
 James A. O'Brien appeared before the Commission. 
 
 The Chairman. Your name has been furnished to the Commission 
 as one of the shipping masters who supply seamen. 
 
 Mr. O'Brien. Yes, sir. 
 
 The Chairman. Is that correct? 
 
 Mr. O'Brien. Yes, sir; that is right. 
 
 The Chairman. Did you hear or are you familiar with the testi- 
 mony given by two sailors concerning the matter of shipping seamen 
 and the abuses that are practiced, accordmg to their statements? 
 
 Mr. O'Brien. No, sir; not sufficiently to speak of it. I was not 
 here. 
 
 The Chairman. I will read j^ou just one paragraph. Perhaps I 
 ought to read more, but I have not had time to look this testimony 
 over very carefully. Alonzo Richards, testifying, said in answer to a 
 question : 
 
 " I should say that the relationship between the American shipowners 
 and masters and the seamen can be ameliorated only by abolishing the 
 crimp. The crimp is a menace in every way, shape, and form. They 
 violate the statutes here in the city a great many times. An Ameri- 
 can seaman may to-day go down along the docks and may be fully 
 convinced of the fact that a vessel needs a crew. He has a discharge 
 
448 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 to prove his ability and conduct. He speaks to the captain or the 
 mate, as the case may be, and they always refer him to the crimp. 
 They themselves want a crew, but they will not employ the men and 
 do business individually. Sailors have to have employment through 
 this crimp, and there is a rake-off, and nine times out of ten the sailor 
 is the victim." 
 
 Have you any information on that point? 
 
 Mr. O'Brien. Yes, sir. 
 
 The Chairman. Kindly give it to the Commission. 
 
 sailors' statements exaggerated. 
 
 Mr. O'Brien. I have been in the business about forty -three years, 
 and that statement is exaggerated — extremely so. The men who do 
 that kind of business can not live in the shipping business. They 
 have to get out of it, because the captain who once has dealings with a 
 man of that stamp does not want any more to do with him. 
 
 As regards the crimp who is mentioned there, that is entirely exag- 
 gerated, and many of those people are not connected with the business; 
 they are hangers-on. They are not shipping agents; they make a liv- 
 ing off anybody who comes along. I would rather, and it would be 
 much more satisfactory to you gentlemen, have you appoint some one 
 to examine into the actual situation. I had the honor to serve as 
 shipping commissioner under President Arthur. I know you can get 
 all the help you want, and the best thing to do is to appoint some one 
 to go amongst the boarding-house keepers and those people and take 
 in the whole situation — get everything just as it is — and have him 
 report to you gentlemen before Congress meets. 
 
 Representative Spight. Can you suggest some remedy for that 
 system ? 
 
 Mr. O'Brien. The matter will remedy itself. 
 
 Representative Spight. We should like to do something along the 
 line of applying a remedy. 
 
 Mr. O'Brien. I am in favor of a square open advance. When we 
 had square advances we never had any trouble of this kind. 
 
 Representative Spight. We have had "that question before us and 
 we want to do something. 
 
 The Chairman. Mr. O'Brien, before being further interrogated, 
 state jj^our case. 
 
 Mr. O'Brien. I scarcely know how to state it, because the feeling 
 against the crimps is exaggerated by people opposed to boarding- 
 house keepers, and they are not honest. I have been shipping men 
 for some forty -three years. 1 have shipped men for fifteen and six- 
 teen j^ears out of the same house. Now, if those men were wronged, 
 they would not go back a second time to that house. It is not reason- 
 able to think they would. 
 
 Representative Spight. Are you a boarding-house keeper yourself? 
 
 Mr. O'Brien. No, sir; 1 am not. I am in the shipping business, 
 although I would not be ashamed if I was in that business. 
 
 Representative Spight. Have you any interest in that business ? 
 
 Mr. O'Brien. None at all. None whatever. I have gone around 
 and got men at 3 or 4 o'clock in the morning; 1 have been in there 
 mustering my crew when the men were eating, and I have often 
 sat down and had my coffee with them. It was good enough for me. 
 
HEABING8 BEFORE THE MEECHANT MARINE COMMISSION. 449 
 
 I do not want anything better. Of course, being in the business, 
 some people may say that I am in favor of the people in the business. 
 I am not. I am telling you the truth. 
 
 All I ask you to do is to appoint a man for Philadelphia, New York, 
 and Baltimore, and let him go round to the boarding houses and see 
 the seamen. He can do it without anybody interfering with him, and 
 let him report back, and you will find that what I tell you is right. 
 
 Representative Spight. Do you undertake to say that there is no 
 abuse in the crimp system? 
 
 Mr. O'Bkien. Certainly; that it is exaggerated; that it is all attrib- 
 uted to the boarding-house keeper. They have nothing to do with it, 
 because when a sailor has money he is one of the most independent 
 men you ever saw in your life. He goes to houses of bad repute, and 
 when he is broke he comes back to the boarding house. 
 
 We have just paid oflf here to-day a ship belonging to the Standard 
 Oil Coilipany, paying over thirty-seven hundred and some odd dollars. 
 We advanced the money, and the men went to their boarding-house 
 keeper and paid their bills. Some of them went away. Some are 
 here yet. And some gave their boarding-house keepers money to 
 keep for them. Now, if those boarding-house keepers were as bad as 
 they are repufed to you gentlemen to be, the sailors would not have 
 done that. It is a mistake. If you will do what I say, you will get 
 at the bottom of the whole of it. I am supposed of course to side on 
 my side of the crowd, but I would not do that. I do not care for the 
 shipping business. I may drop out of it at any time. I am doing 
 some building, too. I may get out of it altogether some time. I 
 would suggest that you appoint some one for the different ports and 
 let him take in the situation. Then you can find out the whole 
 business. 
 
 THE SHIPPING agents' COMPENSATION. 
 
 The Chairman. You say you furnish seamen? 
 
 Mr. O'Brien. Yes, sir. 
 
 The Chairman. To vessels ? 
 
 Mr. O'Brien. Yes, sir. 
 
 The Chairman. How are you compensated, and what is your rate 
 of compensation? 
 
 Mr. O'Brien. We charge $2 apiece for shipping them. 
 
 The Chairman. That is all? 
 
 Mr. O'Brien. That is all the charge. That is the whole secret. 
 We sometimes out of that bonus pay something to the men, 
 
 The Chairman. What do you mean by "bonus?" 
 
 Mr. O'Brien. We have to pay a bonus to the seamen. 
 
 Representative Minor. A bonus for what purpose ? 
 
 Mr. O'Brien. A bounty for men to go to certain places. 
 
 Representative Spight. To whom does that go? 
 
 Mr. O'Brien. It goes to the boarding-house keeper or anybody 
 who has the man in charge. Sometimes the men get it. 
 
 Representative Spight. It goes to the boarding-house keeper? 
 
 Mr. O'Brien. Very often. 
 
 Representative Spight. What benefit does the sailor get otit of it ? 
 
 Mr. O'Brien. He gets his board for nothing, and he gets some 
 clothing for nothing, and that bonus makes that up. 
 
 3a— 04 29 
 
450 HEAEING8 BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Representative Sfight. Is that not charged up to him ? 
 
 Mr. O'Brien. No, sir; it is made a present to him. He is supposed 
 to know nothipg about it. That is why 1 am in favor of square 
 advances. There was none of that under the old shipping law. This 
 law is ' precisely the same law that was passed when I was appointed 
 shipping commissioner under President Arthur. It was then decided 
 by the law officers of the Treasury Department that we had no juris- 
 diction over foreign vessels, and as long as we hadno jurisdiction over 
 foreign vessels we could not enforce it on American vessels. But I 
 see that was reversed here by the decision of the Suprenife Court not 
 long ago. 
 
 The Chairman. As I recall it, under examination a Mr. AtkinSon 
 testified that when a sailor was shipped this was the proceeding: Sup- 
 pose his monthly wage was $30. ELe would get $15 and the so-called 
 crimp would get the other $16. How is that? Do you know of any 
 instances of that kind. 
 
 Mr. O'Brien. It is not $15. We are paying a bonus to go across to 
 Europe. 
 
 The Chairman. The sailor's contention was that he got about one- 
 half of his first month's wages and the crimp got the other half. 
 
 Mr. O'Brien. You may call it the crimp. It is the bdarding-house 
 keeper. The word *' crimp" is very broad, though. It applies to 
 almost anybody. 
 
 Representative Minor. Does it apply to the boarding-house keeper? 
 
 Mr. O'Brien. It applies to anybody. 
 
 Representative Minor. It would not apply to you? 
 
 Mr. O'Brien. Those people are willing to have it apply to me. We 
 are making a fight to get business. I am in the shipping business, 
 and of course I hand my card to a captain and offer to pay off his crew 
 free of charge and collect it afterwards. 
 
 Representative Spight. What compensation do you get for that? 
 
 Mr. O'Brien. Two dollars a man for shipping. 
 
 The Chairman. The intimation on the part of the sailor was that 
 the so-called crimp got one-half of the first month's salary without 
 being entitled to it. 
 
 A SQUARE ADVANCE. 
 
 Mr. O'Brien. It is a bounty for getting the men. The man is in 
 debt to the boarding-house keeper very often more than that, and if 
 you give a square advance that bounty will be stopped at once, aAd it 
 is the only way you can arrange it. 
 
 Representative Spight. What do you mean? 
 
 Mr. O'Brien. Make the advance the amount agreed upon, the same 
 as is done in England. 
 
 Representative Spight. The testimony before this Commission has 
 been against it. 
 
 Mr. O'Brien. You can not get along without it. If you do not 
 give the square advance you will have to give the bounty. We are 
 the people who must do that. Under the old law we would call their 
 names off' in the presence of the captain and ask them if they had their 
 money. If any man stood up and said, "I am not settled with," we 
 would call on the boarding-house keeper or his representative to settle 
 with that man or we would not take nim, because it is no interest to 
 us. If he would go in the ship, there would be trouble. He would 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 451 
 
 be surly and the officers very likely would have trouble with him and 
 there would be a fight. When they came back the sailor would prob- 
 ably sue the officer, and nine times out of ten the officer's money is all 
 gone. Mr. Minor has been an officer and seaman, and he can bear me 
 out in that. You know whether I am right or not. 
 
 The Chairman. Why is it necessary for a sailor to employ anybody ? 
 
 Mr. O'Brien. He has to board somewhere. 
 
 The Chairman. Ye^; but why is it necessary for him to employ 
 anybody when he ships? 
 
 Mr. O'Brien. There is -no one to bother with him. You would not 
 be bothered with him. I would not. And the man owes the bill, and 
 he goes with him to collect it. 
 
 The Chairman. Suppose he does not owe a bill? 
 
 Mr. O'Brien. Then he goes where he likes. 
 
 The Chairman. But you would get a fee for shipping that man? 
 
 Mr. O'Brien. I get f 2. 
 
 The Chairman. Why can he not sell his labor as others do? 
 
 Mr. O'Brien. He can. 
 
 The Chairman. You have not fixed it so that he can not do that? 
 
 Mr. O'Brien. No, sir. Quite a number of men ship themselves. 
 We do comparatively none of the coasting trade, and I believe one- 
 third of those officers pick up their own men. 
 
 Senator Mallory. I should like to have you state who pays the 
 bounty you have spoken of. 
 
 Mr. O'Brien. The ship. 
 
 Senator Mallory. The ship pays the bounty to whom? 
 
 Mr. O'Brien. We generally collect it. 
 
 Senator Mallory. Who are "we?" 
 
 Mr. O'Brien. The shipping agents. 
 
 Senator Mallory. Where does the shipping agent get the men from? 
 
 Mr. O'Brien. From the boarding house. 
 
 Representative Spight. Who pays the shipping commissioner? 
 
 Mr. O'Brien. The ship pays the shipping fee. 
 
 Senator Mallory. You say you get your men from boarding houses. 
 
 Mr. O'Brien. Yes, sir. 
 
 Senator Mallory. Is there any connection between the shipping 
 agent and the boarding house? 
 
 Mr. O'Brien. None at all. 
 
 Senator Mallory. How do you get your men? 
 
 Mr. O'Brien. We go to the boarding houses, or they come to the 
 office. 
 
 Senator Mallory. Who comes to the office? 
 
 Mr. O'Brien. Seamen. 
 
 Senator Mallory. This bounty you say is paid by the ship? 
 
 Mr. O'Brien. Yes, sir. 
 
 AN advance in fact. 
 
 Senator Mallory. Is it not, in fact, an advance of the seaman's 
 wages ^ 
 
 Mr. O'Brien. I do not know what you can term it. You may call 
 it anything you like. 
 
 Senator Mallory. Does the captain pay you that bounty and charge 
 it to the ship? 
 
452 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Mr. O'Brien. And charge it to the shij). 
 
 Senator Mallort. He does not charge it against the sailor? 
 
 Mr. O'Brien. No, sir; it can not be done. 
 
 Senator Mallort. It can be done. 
 
 Mr. O'Brien. They can not do it, and it is never done. 
 
 Senator Mallort. It was in evidence before this Commission that 
 it has been done. 
 
 Mr. O'Brien. It is not right. They can not do it. 
 
 Senator Mallort. I admit it is not right. 
 
 Mr. O'Brien. It can not be done, and if anybody does it, he is lia- 
 ble to a very severe penalty. 
 
 I wish to suggest that you appoint a man for Baltimore, Philadel- 
 phia, and New York, and let him take up the situation of the boarding- 
 house keepers. There are men around who do a lot of things — rob 
 sailors and things of that kind — but the boarding-house keepers do 
 not do it. 
 
 The Chairman. We will take your suggestion under consideration. 
 
 ADDITIONAL STATEMENT OF CHARLES H. CBAMF. 
 
 The Chairman. Mr. Charles H. Cramp stated yesterday that he 
 wished to be heard briefly this morning. Mr. Cramp, are you pre- 
 pared to proceed at this time? 
 
 Mr. Cramp. Mr. Chairman, I find that what 1 wished to submit is 
 of such importance and my time has been so occupied that I have not 
 been able to prepare it. Then again, I wish to touch on several sub- 
 jects which have not been alluded to at all. 
 
 Senator Penrose. Would you prefer to submit later a statement in 
 writing? 
 
 Mr. Cramp. I should like to have the privilege of doing so. 
 
 Senator Penrose. Mr. Chairman, I ask that Mr. Cramp be per- 
 mitted to file later with the Commission a statement of his views, to 
 be embodied in the report of our proceedings. 
 
 The Chairman. In the absence of objection that order will be made. 
 
 Subsequently the following statement was received: 
 
 Mr. Cramp. I find, Mr. Chairman, that the same old stories and the 
 same old songs that have been repeated for the last forty years are all 
 dragged in again before your Commission as new matter by new people 
 who have not heard of the past and who are posing as new discoverers. 
 
 Notwithstanding that this phase of the subject has become more 
 than wearisome, yet a recent event in ocean transportation matters — 
 the formation of the Morgan steamship merger — impels me to take up 
 the question again as to the old story that foreign steamship companies 
 are not subsidized and do not want to be, etc. 
 
 The falsity of this has been proven time and time again and exhaust- 
 ively set forth in all of the reports of Congressional Committees on 
 Merchant Marine since the report by the Lynch committee of 1870. 
 On page 213 and 223 of this latter report will be found the valuable 
 correspondence of Mr. F. H. Morse, consul-general of the United 
 States to Great Britain, to Hamilton Fish, with tables given in the 
 appendix on pages 240 to 247. 
 
 On pages 214, 215, and 216 will be found a detail of subsidies 
 granted to foreign vessels at that time, and Mr. Morse says in relation 
 thereto: 
 
HEARINGS BEFORE THK MERCHANT MARINE COMMISSION. 453 
 
 " Here are 12 lines of steamers under contract for carrying the 
 mails, for which they are paid an annual subsidy of £903,750, or 
 $4,392,244, and four other important lines running to the West Indies 
 and South and Central America, subsidized by having granted to them 
 the postage on all the mail matter they convey. 
 
 "In addition to the contracts above specified, contracts have been 
 made for a mail service between Halifax and Newfoundland, New 
 Orleans and Belize, British Honduras, and between New York and 
 the Bahamas. The negotiations of these contracts have been left to 
 the local governments, the home Government pledging itself to pay 
 one-half the cost of each service. 
 
 "It is hardly necessary here to repeat the well-known fact, that the 
 establishment and support of these traos-Atlantic lines of steamers, 
 and the local lines in the West Indies and along the Atlantic and 
 Pacific coasts of Central and South America, has brought by far the 
 largest part of the trade of those countries to this side of the Atlantic. 
 If we wish to extend our trade with these countries, we must offer 
 greater facilities for conducting it, and not oblige traders to go to the 
 most distant markets, because the means of communicating with them 
 are more frequent, regular, and rapid." 
 
 On page 214 he shows that i;70,000 was paid in December, 1868, to 
 the Cunard Line for mails to the United States. This was a stupendous 
 sum, equivalent to the cost of a new ship per year, as the size of the 
 four first vessels of the Cunard Line were small and cost about that 
 much. 
 
 "the steamship merger." 
 
 In two numbers of the North American Review, July and Decem- 
 ber, 1902, referring to the "Steamship Merger" and "British Subsi- 
 dies and American Shipping," I mentioned the fact that: 
 
 "In the competition between Great Britain and the United States in 
 the ocean carrying trade there had been three distinct epochs. The 
 first was when the British Government subsidized Samuel Cunard, and 
 enabled him to found the great trans- Atlantic line which bears his name. 
 They doubled the subsidy to Mr. Cunard when the Americans put on 
 the Collins Line. Our Congress, on the contrary, in a freak of parti- 
 san politics, got into a quarrel over the subsidy question, which resulted 
 in the withdrawal of its assistance to the Collins Line, and in conse- 
 quence that line collapsed, leaving not even a vestige of its existence. 
 
 "The British, however, continued to build new ships and established 
 new companies; but having no competition, no great advance was made 
 in the type of the ships they built or in their performance. 
 
 "The second epoch was in 1871 and 1872, when the announcement 
 was made that an American company had been formed with the inten- 
 tion of building four ships. These ships were built by the Cramps, 
 and were known as the JPennsylwania^ Ohio^ Indiana, and lUi/rwis. 
 The prime requisite was that these vessels should beat the British 
 City of Brussels, then the crack Atlantic greyhound in the British 
 fleet; and they did it, and with one-third less coal consumption. 
 
 " The British Grovernment met this renewed effort on our part by 
 the increase of subsidies for mail carrying in its own ships, and also 
 by what is known as the 'naval subvention;' that is to say, the paying 
 
454 HEAKINGS BEFOEE THE MERCHANT MARINE COMMISSION. 
 
 of a retainer to certain classes of shipH for readiness to be converted 
 into auxiliarjr naval vessels. 
 
 "In the meantime our Government did nothing for the new American 
 line. Its ships, however, struggled along; they were extremely 
 popular notwithstanding the fierce opposition they encountered. They 
 were ultimately sold to the Red Star Line— an American line that had 
 been subsidized by the Belgian Government— and were sailing under 
 the Belgian flag. 
 
 IF THE COLLINS LINE HAD LIVED. 
 
 "It might be worth while to speculate what the result would have 
 been if our Government had emulated, in respect to the Collins Line, 
 what the British Government did for Cunard. If the United States 
 Government had aided the Collins Company to an extent that would 
 have enabled it to build a new ship each year, does anyone suppose 
 that, under such circumstances, the Collins Line would have g^one to 
 pieces, or that the Cunard, or the other British lines that speedily fol- 
 lowed, would have so easily gained the unquestioned supremacy they 
 did gain ? Or, would it be unprofitable to speculate what the American 
 line of 1872 might have done if our Government had emulated the 
 policy toward it that the British Government immediately inaugurated 
 toward its own steamship lines in order to enable them to crush their 
 American rival? I will not attempt to answer these questions; but 
 they ought to be food for reflection. 
 
 "Fruitless as these experiments turned out to be, so far as the 
 development of the American merchant marine was concerned, their 
 operations and the policy which they forced the British Government 
 to adopt and pursue left an indelible impress upon the management of 
 the ocean merchant marine of Great Britain. From the time that the 
 American line of 1872-72 passed out of the lists of serious com- 
 petition, the British monopoly grew year by year until its unques- 
 tioned supremacy was fully recognized. This brings us down to the 
 latter part of the seventies — say about 1877. 
 
 "At this time the competition of the French and German lines was 
 not sufficient to disturb the British monopoly. The English went on 
 from that time increasing the size and speed of their trans-Atlantic 
 passenger ships and turning out immense numbers of the cheapest 
 kind of freight ships, called 'tramps;' but the improvements they 
 made in ocean liners were not commensurate with the rapidly increas- 
 ing demands of the traveling public. As for the freight ships, no 
 improvement was attempted in them at all during this period. On the 
 contrary, as has been wittily said of the tramp ships in those days, 
 ' the English built them by the mile and cut them off in lengths to suit. 
 
 GERMANY IN FIRST PLACE. 
 
 "As I have often said elsewhere, it is a rule in human affairs that 
 neither a man nor a nation can stand still. If they do not go ahead 
 they must retrograde; and, with exceptions not worth mentioning here, 
 the British stopped and stood still in the matter of steamship develop- 
 ment several years ago. To discuss the cause of this supineness in 
 detail would take .too much space; but it may be said that the first 
 great palpable evidence of tne decline of British supremacy in the 
 ocean carrying trade appeared when they took up such an immense 
 quantity of tonnage for transport service at the beginning of their 
 
HEARINGS BEFORK TEE MERCHANT MARINE COMMISSION. 455 
 
 extravagant and disastfous South African war. Under the stress of 
 this emergency the decliiiL' became more obvious than it had seemed 
 under normal conditions; but. while the British were standing still and 
 therefore retrograding, the Germans went ahead with giant strides. 
 
 "This British supineness and this German progress have continued 
 until the. present time. Their effects were \'ery greatly accentuated 
 when the Germans made haste to take up in all directions the traffic 
 that the: British had whoUj'^ or partly abandoned in consequence of the 
 South African war. The result is that Germany has practically taken 
 the first place in the North Atlantic, and Great Britain has been rela- 
 gated to the second place. Of course, there is a great deal more 
 British tonnage than German tonnage, but the German ships are nearly 
 all modern types, many of them new and in the total average superior 
 in capacity and performance to the total average of British tonnage in 
 the ratio of more than two to one. 
 
 CUNARD LINE AGAIN. 
 
 "The third epoch was the formation of what is commonly known as 
 the Morgan Steamship Merger, which has now been brought into prac- 
 tical working shape under the name of the International Mercantile 
 Marine Company. 
 
 ' ' This is a brief description of the three distinct eras of competition, 
 without going into any detail whatever. 
 
 " The old adage that 'history repeats'itself ' was never more per- 
 fectly verified than it has been in the recent outcome or effect of the 
 causes operating in the third and last epoch. The newspapers of 
 England and America for the last few days have been replete with dis- 
 cussion of the action of the British Government explained in the speech 
 of Mr. Gerald Balfour. This action was the resubsidizing of the 
 Cunard Line, in order to keep it out of the hands of the so-called 
 Morgan Merger and to retain it under purely British control and 
 capitalization. 
 
 "The curious coincidence is that, fifty years ago, the British Gov- 
 ernment used the Cunard Line to destroy the American Collins Line. 
 Thirty years ago, it used the Cunard Line to destroy the old Ameri- 
 can Line. And now it is using the Cunard Line to meet and combat 
 the new American Merger. In each case, the effort of the British 
 Government to protect its shipping interests has taken the form of an 
 increased subsidy; and, in each case it has selected the Cunard Line as 
 the principal object of assistance." 
 
 Again, in the December, 1902 number, page 830, 1 refer to the last 
 subsidy paid to Cunard as follows: 
 
 ENGLAND THE GREATEST SUBSIDIZER. 
 
 "For years and years we have been accustomed to hear it declared 
 hy a certain class of statesmen (so called) on the floors of Congress, and 
 by editors in a certain class of newspapers, that Great Britain did not 
 pay any subsidies for the maintenance or promotion of her merchant 
 marine; ,and, whenever Americans have advocated that kind of policy 
 toward American shipping, they have been denounced as ' treasury 
 grabbers ' and ' subsidy beggars. ' But now let us hope that no Ameri- 
 can statesman or politician or editor will be sufficiently simian to 
 repeat that stale falsehood. 
 
456 HJ]AEINGS BEFORE THE MERCHAKT MARINE COMMISSION. 
 
 "The real fact is that Great Britain is and always has been the 
 greatest subsidizer in the world, and it is also true that her policy in 
 that direction is and has been the principal cause of the supremacyin 
 the ocean carrying trade which, in the general average, she has main- 
 tained since 1860. Whether she will prevail in the new competition 
 which confronts her, as against Germany on the one hand and the 
 United States on the other, is a question to be settled by events; but 
 one thing is certain, that she will exhaust the power of public aid and 
 subvention to recover the ground that she has lost. 
 
 "The really significant, or rather the most significant, fact connected 
 with this special subsidy to the Cunard Line is intimated in that part 
 of Lord Brasse^^'s speech already referred to, in which he said that 
 the British shipbuilders must look to their laurels in the construction 
 of ocean steamships of the type of the Hamburg-American liner 
 Deutschland, and he based his argument in favor of increased sub- 
 sidies upon that contention. 
 
 " In this connection it is necessary to quote clauses 1, 2, 3, 4, 5, 6, 7, 
 and 8 of the agreement entered into between the Cunard Steamship 
 Company and the British Government, September 30, 1902. They are 
 as follows: 
 
 THE CFNARD SUBSIDY. 
 
 " '1. The Cunard Company are to build two large steamers for the 
 Atlantic trade of high speed. 
 
 " '2. The agreement is to remain in force for twenty years from the 
 completion of the second of these vessels. 
 
 " '8. The Cunard Company pledges itself, until the expiry of the 
 agreement, to remain a purely British undertaking, and that under no 
 circumstances shall the management of the company be in the hands 
 of, or the shares or the vessels of the company held by, other than 
 British subjects. 
 
 " ' 4. During the currency of the agreement the Cunard Company is 
 to hold at the disposal of the Government the whole of its fleet, includ- 
 ing the two new vessels and all other vessels as built, the Government 
 being at liberty to charter or purchase all or any such vessels at agreed 
 rates. 
 
 " '5. The Cunard Company also undertakes not to unduly raise 
 freights, nor to give any preferential rates to foreigners. 
 
 "6. The Government are to lend the money for the construction 
 of the two new vessels, charging interest at 2f per cent per annum. 
 The security for the loan is to be a first charge on the two new vessels, 
 the present fleet, and the general assets of the Cunard Company. 
 
 " ' 7. The Cunard Company is to repay the loan by annual payments 
 extending over twenty years. 
 
 " ' 8. From the time the new vessels commence to run the Govern- 
 ment are to pay the Cunard Company at the rate of £150,000 per 
 annum, instead of the present admiralty subvention.' 
 
 " The two new vessels which the Cunard Company undertakes to 
 build with the money loaned by the British Government are estimated 
 to cost $5,000,000 each, or 110,000,000 altogether, and they are 
 expected to surpass in speed and other qualities any other vessels 
 afloat. 
 
 "It will be noted that the terms of the agreement is twenty years, 
 and that the subvention of $760,000 a year is, practically, interest on 
 
HEARINGS BEFOEE THS MEECHANT MAEINE COMMISSION. 457 
 
 the 110,000,000 at the rate of 7i per cent. It will be noted, further, 
 that in the agreement the British Government, under clause 0, in loan- 
 ing to the Cunard Company the money necessary to build these ships, 
 requires interest thereon at the rate of 2f per cent per annum. That 
 leaves 4f per cent of the subvention per annum to inure to the benelit 
 and use of the Cunard Company. As the term is twenty years, it will 
 be seen that this net surplus of 4f per cent per annum will come very 
 near paying the first cost of the ships during the twenty years. Doubt- 
 less it is assumed that the company will make some profit of its own 
 in the operation of these ships. But the surplus of 4f per cent which 
 the Government provides in its subsidy for a period of twentjr years 
 would come within half a million dollars of paying the total estimated 
 cost. 
 
 " It may be that the ships can be built for nine and a half millions. 
 If that should be the case, then the surplus of the subsidy allowed by 
 the Government would be the full first cost of the two ships in the 
 twenty years of the agreement. 
 
 THE HISTOKIC BRITISH METHOD. 
 
 "This method is the traditional method of the British Government 
 in such cases. It is a repetition of the arrangement which they made 
 with Samuel Cunard at the time when he was aided for the purpose 
 of crushing the Collins Line, in the early fifties, by doubling his 
 subsidy. As I point out on page 7 of the North American Review 
 for July, the British Government increased Mr. Cunard's subsidy to 
 an extent that enabled him to add to the fleet of four ships he already 
 possessed at the rate of another and better ship each year, and his 
 policy was maintained until the Collins Line was destroyed. After 
 that the British Government continued to subsidize the Cunard Line 
 liberally, but not to so great an extent as it had done while the Collins 
 Line was in existence. 
 
 "Another instance of the same character occurred in connection with 
 what is known as the Empress Line, plying between Vancouver, or 
 the western terminus of the Canadian Pacific Railroad, and the Orient. 
 When this line was created three ships were built, and the British 
 and Canadian governments joined hands to provide an annual subsidy 
 equal to 10 per cent upon the first cost of the ships, and the term of 
 that subsidy was made ten years. The British Government pretended 
 that the object of putting this line on was as much military as com- 
 mercial. But, as a matter of fact, the Empress Line was put on 
 mainly with a view of destroying or at least crippling the American 
 Pacific Mail. 
 
 "Now, in this new special subsidy to the Cunard Line the same pol- 
 icy is being repeated; but in this case there is no subterfuge, no pre 
 text. Jt was openly avowed by Mr. Gerald Balfour in his speech that 
 the decision in council to give this special subsidy to the Cunard Line 
 was made in order — 
 
 "First, to prevent that line from becoming a part of the American 
 or Morgan merger; 
 
 "Second, to keep it under purely British control and capitalization; 
 and 
 
 "Third, to enable it to build ships capable of equaling, if not sur- 
 passing, the highest types of ships whicn had been produced in Ger- 
 many and which were being operated under the German flag. 
 
458 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 "In other words, this special Cunard subsidy of three-fourths of a 
 million a year is the practical expression of the apprehension of the 
 British Government and of its determination to use its resources for 
 the purpose of habilitating its merchant marine, which had, as I pointed 
 out on pages 11 and 12 of the North American Review for July, fallen 
 behind on account of supineness and self-complacency. 
 
 "The logical deduction which our Government ought to draw from 
 these facts, which are notorious and beyond dispute, 1 leave to be 
 judged by the intelligent reader. 
 
 ", Three times in history our merchant marine has gone to the wall 
 through the persistent refusal of our Government to meet the condi- 
 tions which the policy of the British Government imposed upon the 
 competition. And I will add here that all the arguments that have 
 been made in favor of the shipping bill now pending in Congress, put 
 together, are not half as cogent as the fact of the British Government's 
 action at this juncture. 
 
 LARGEST OF BRITISH SUBSIDIES. 
 
 "In fact, this new subsidy to the Cunard Line is the most tremen- 
 dous effort of that kind ever put forth by the British Government. 
 By its terms the British treasury lends to the Cunard Company money 
 enough to build two of the largest, fastest, and costliest passenger 
 ships in the world. It lends at 2f per cent per annum interest, and it 
 requires repayment of the loan in twenty years; but, at the same time, 
 it gives the Ounard Line a subsidy sufficient to repay the loan in 20 
 annual installments. 
 
 "This is somewhat a round-about way of making the Cunard Com- 
 pany a present of two of the best ships in the world. Doubtless if any 
 American shipowner or shipbuilder should propose a subsidy of that 
 nature to our Congress there would be among our free-ship statesmen 
 an epidemic of nervous prostration." 
 
 While these subsidies of Great Britain are of the most liberal char- 
 acter they are insignificant as compared with what that Government 
 has done by indirectness in building up their shipbuilding and ship- 
 ping industries. I refer to the fact that all of the engines in Bi'itish 
 war vessels up to this time have been built by private engine builders 
 and that at libei-al prices. The first public statement of that fact is 
 in Mr. Morse's letters in Mr. Lynch's report of 1870, which I have 
 referred to before. 
 
 On pages 239 to 245 of the report will be found a list of war vessels 
 built in Government dockyards, principally of wood, also a list of ves- 
 sels whose hulls and engines were built by contract, principall}' of iron. 
 
 The prices awarded were of the most liberal character, enabling the 
 builders to add to their plants tools and machinery of the largest 
 description, the cost of which was always included in the first cost of 
 the ships in estimating. 
 
 The theory of this liberal expenditure was that in order to build, 
 repair, and maintain a large navy, particularly in time of war, these 
 private establishments must be fostered and encouraged in large 
 expenditures for plants. Among the incidental benefits arising from 
 this procedure was that a large body of workmen were trained to do 
 high-class work who would always be available when wanted; besides 
 this the establishment of forges, foundries, rolling mills, and other 
 establishments became necessary as collateral industries. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 459 
 
 The four dry docks at the Laii'ds Works is a forcible illustration of 
 this kind of encouragement. The Lairds, in contracting for four bat- 
 tle ships at different times, were enabled to excavate and build dry 
 docks to build them in and at a profit over the cost of both ships and 
 docks, from the prices they got for the work. The theory holding in 
 this case, as well as that of others, was that in case of war the Gov- 
 ernment would have abundant dry-dock facilities to repair and fit out 
 their great fleet of vessels with proper dispatch. 
 
 NAVY ENCOURAGEMENT TO SHIPYARDS. 
 
 This encouragement and assistance from the British Government 
 enabled the private shipyards and marine-engine shops to take up the 
 construction of the larger merchant ships, which were growing larger 
 daily, with large plants practically furnished by the Government. 
 
 From "King's Navies of the World" and from "Brassey" I find 
 that for the vessels included in the two lists referred to that Great 
 Britain expended $34,000,000 for the engines in the first list to private 
 parties; and in the second list about $69,000,000 for vessels, includ- 
 ing both hulls and engines, to private parties — making a total expend- 
 iture of about $104,000,000 appropriated to private shipbuilding 
 and marine-engine construction during the period between 1850 and 
 1870._ 
 
 This was when the great transition from wood to iron took place, 
 when sails were gradually giving place to steam, and a beginning was 
 made in the use of compound engines. It was also during a period, 
 more than at any other time since ships were built, that encourage- 
 ment was wanted, and hundreds then were of more use than thousands 
 to-daj'. 
 
 1 will not attempt to speculate what would have been the result if 
 the United States Government would have done for our shipyai'ds what 
 the British did for their own at that time. 
 
 One thing is certain : If our Government would have appropriated 
 one-half of this sum in contracts at that period with the most important 
 shipyards here there would not have been any occasion for Congress 
 to have appointed a committee of this kind. 
 
 One great additional result of this indirect assistance to private ship- 
 builders in building war vessels complete was that foreign governments 
 which had no shipyards of high standing nor experienced naval archi- 
 tects rushed to England to duplicate the British ships at the yards 
 where they were built, knowing that they could get duplicates at least, 
 if nothing better, of British construction, which had set the pace in 
 that direction. 
 
 FOREIGN NAVIES ENGLISH BUILT. 
 
 Many of the war ships of the Continent, all of the South American, 
 Chinese, and principally of Japan were built there, and by the best 
 builders, adding millions in addition to the great sums already enu- 
 merated. The most important of these foreign expenditures in Great 
 Britain was that of Japan, in 1897 and 1899, of the Chinese indemnity 
 of. about $100,000,000 in building the great fleet now so much in 
 evidence. 
 
 Following the fashion at that time, certain Congressmen and naval 
 oflScers, who still live, advised Mr. Whitney to build in England when 
 he was considering his additions to the new Navy, but Mr. Whitney, 
 
460 HEAEINGS BEFOBE THE MERCHAKT MARINE COMMISSION. 
 
 who was a thoroughbred American, resented the advice in a public 
 letter to the Congressional committee. 
 
 This indirect assistance to the shipbuilding industries — forges, foun- 
 dries, rolling mills, armor plants, etc. — by the British Government 
 has enabled ber to build the great mercantile marine and run it, and 
 the consequential additional aid through the patronage of the foreign 
 governments has made England paramount as the great commercial 
 power of the planet. 
 
 In this connection it would be well to refer to the fact that the pres- 
 ent Emperor of Germany, in building up his great navj^ and mercan- 
 tile marine, referred to in my first paper, subsequently followed the 
 policy of Great Britain in the direct and indirect assistance he afforded 
 to his private-ship and marine engine builders by the award of direct 
 subsidies to his German-built merchant marine and to the award of 
 contracts at liberal prices to the German shipbuilders in building war 
 vessels. 
 
 In a letter to a member of the Manufacturers' Club in 1897, in rela- 
 tion to the decadence of our merchant marine, I referred to the 
 Emperor thus: 
 
 Germany's new Richmond. 
 
 "Recurring to the considei'ation of questions affecting the merchant 
 marine, we find ' a new Richmond in the field,' so to speak. Until 
 recently the English had no competition of serious character in the 
 ocean-carrying trade of the world; but within the last ten years, and 
 mainly within the last six, Germany has come to the front as a ship- 
 building and ship-owning nation. 
 
 "Germany owned ships long before, but it is worthy of remark that 
 until she began also to build ships, and to build them on a large scale, 
 her rank in the carrying trade of the world remained wholly secondary 
 and subordinate. So long as the German shipowners depended on 
 British shipbuilders for flieir vessels, the growth of German ocean 
 carriage was limited and dwarfed. 
 
 "The great change that has occurred is nearly coeval with the reign 
 of the present Emperor. From his accession until now he has been a 
 most indefatigable promoter of the foreign commerce and the ship- 
 building interests of his Empire. It is hardly too much to say that 
 the capacity of German shipyards to build such vessels as the WUJielm 
 der Grosse is due almost entirely to the fact that he has exhausted 
 both his personal influence and his imperial power to promote that 
 industry in Germany." 
 
 The Emperor, in his efforts to promote Germany's commerce and 
 extend the scope of German industries, still maintains his attitude of 
 vigorous supervision over the shipbuilding industry in every phase of 
 its application to warlike and commercial policy and interests. 
 
 STATEMENT OF ALFRED H. LOVE. 
 
 Mr. Love. It was my privilege, Mr. Chairman and gentlemen, to 
 bo with the Pan-American Congress at the time when Mr. Blaine 
 appointed it and it visited Philadelphia. We had then two delegates 
 from every republic in Central and South America, and after visiting 
 our manufacturing places this incident occurred: 
 
 We went to the Cramp shipyard. They were building the Vesuvius, 
 the Philadelphia, and other war vessels. A very large company 
 
HEAKINGS BEFORE THE MERCHANT MARINE COMMISSION. 461 
 
 gathered around, and this was the expression of the Pan-American 
 Congress: "Why do you build so many war vessels, and why does 
 your Government appropriate so much for war vessels when we in 
 the South are suffering for a merchant marine ? We have our hides, 
 our tallow, and other products, and we can not reach your markets, 
 and we want the manufactured goods we have seen in Philadelphia. 
 Can you not give us better facilities? " 
 
 After that, one of my firm went to Brazil, where thousands of acres 
 were offered for the rubber industry. We could not develop them 
 nor could they succeed, because there' were no lines of transportation 
 by vessel. 
 
 That is my argument for building up a larger and better merchant- 
 marine service for our country. The South Americans said : ' ' There is 
 no one who will flare up at your country. You are too good custom- 
 ers for us and you have too much we want. It will be your best 
 Erotection if you will give us a better merchant-marine service and not 
 ave us send our goods to England and then back to you and in turn 
 get your goods through the triangular course." 
 
 STATEMENT OF WILLIAM S. SAMUELS. 
 
 William S. Samuels appeared before the Commission. 
 
 The Chairman. What is your business ? 
 
 Mr. Samuels. 1 am a seaman, by profession. 
 
 The Chairman. You know the scope of this inquiry? 
 
 Mr. Samuels. Yes, sir. 
 
 The Chairman. You know what it contemplates? 
 
 Mr. Samuels. Yes, sir. 
 
 The Chairman. The Commission will be glad to hear from you on 
 any point connected with the investigation. 
 
 Mr. Samuels. 1 have given this matter a great many years' thought. 
 I must confess that I crawled through a ship's hawse pipe up to command. 
 1 have seen American shipping at the height of its prosperity and in 
 its present state. During all the years that 1 have seen it dwindling, 
 I ha,ve tried to think of some way by which it might be remedied. The 
 only conclusion 1 could come to was that we should have the privilege 
 of buying our ships where we can buy them cheapest and a bounty 
 from the Government to help sail them, say for ten years, equal to the 
 difference in the cost of operating our ships as compared with foreign 
 ships. 
 
 I speak now altogether of the foreign trade. The coastwise shipping 
 has all the protection it needs. If, after trying for ten years, the 
 experiment I suggest of free ships and a subvention for sailing them, 
 based, perhaps, on so much per ton per mile, whether the ship is in 
 ballast or loaded, we could not succeed in restoring our commerce, I 
 would say to give it up and go into some other business. 
 
 The Chairman. Are you connected with any foreign construction 
 company ? 
 
 Ml-. Samuels. No, sir. 
 
 The Chairman. You are not? 
 
 Mr. Samuels. No, sir; not at all. 
 
 The Chairman. Were you not connected with the British Lloyds at 
 one time? 
 
 Mr. Samuels. No, sir; in no way. I am an underwriter's repre- 
 sentative. 
 
462 HEARINGS BEFOKE THE MERCHANT MARINE COMMISSION. 
 
 STATEMENT OF EGBERT WILTBANB . 
 
 Robert Wiltbank appeared before the Commission. 
 
 The Chairman. What is your occupation ? 
 
 Mr. Wiltbank. I am a retired shipmaster, and at present am sec- 
 retary and general manager of the Vessel Owners and Captains' 
 Association. 
 
 The Chairman. You know the scope of this inquiry, I presume? 
 
 Mr. Wiltbank. Yes, sir; somfiwhat. 
 
 The Chairman. Give us what light you can on the subject. 
 
 Mr. Wiltbank. I think this thing has been pretty well thrashed 
 out. There is one thing about which I have not heard a word spoken, 
 and that is in regard to our Government vessels, our revenue cutters, 
 our war vessels. When a man signs the articles there he has got to 
 go. You compel him to go. In the merchant service it is nothing 
 unusual for a man to ship a crew here, but after they ship and sign the 
 articles, when the ship is all ready with the steamboat alongside, they 
 back out and refuse to go. We have no authority whatever backing 
 us up to put those men on board our ship. Consequently it makes a 
 detention. 
 
 NEVER SAW A MAN ABUSED. 
 
 There has been a great deal said about the abuse of sailors and things 
 of that kind. 1 have been a master of ships in the foreign trade since 
 1857.- 1 say positively, gentlemen, even when I was an officer on a 
 ship, or before the mast, or master of the ship, I never saw a man 
 abused on board ship in my life — never. Having been master of a 
 ship since 1857, I was in wild packets, as they call them, and it was in 
 a wild trade, and I would have seen it if it happened; I never did. 
 
 As regards the advance business, I think if we could regulate that to 
 a certain extent it would be a good thing for us and it would be good 
 for the sailor. I put in the Brazilian trade twelve and a half years of 
 my time, and thirteen years in the Central-American trade. At that 
 time the American flag used to float everywhere, but why it does not 
 do it to-day 1 can not say. We have our troubles with our men. It 
 costs us more to sail the American ship for the simple reason that we 
 have to go to those fellows, the association, as they call it, and we have 
 to pay the wages they like. I believe in every man getting well paid 
 for his labor. I think it is just that he should get it. We reed on our 
 vessels better than on any vessels in the world. 
 
 That is all 1 have to say, gentlemen. 
 
 ADDITIONAL STATEMENT OF ALONZO RICHARDS. 
 
 Mr. Richards. I wish to correct a mistake I made here yesterday. 
 I admit everything that I said, as read by the chairman, except one 
 particular thing, regarding the remarks that the men were sea lawyers 
 and the story was well composed. That statement was uttered by the 
 commissioner before whom the case was tried and not by the shipping 
 commissioner. The men refused to take it to the United States ship- 
 ping commissioner's office. 
 
 We took the case to the United States commissioner and Joseph L. 
 Branton was counsel for the men. The necessary receipts required by 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 463 
 
 law to prove that these men had the money were never shown in court. 
 There was nothing that convicted the men only the captain's verbal 
 evidence. And the men testified that they had never received the 
 money. The captain testified they did. The commissioner's reply at 
 the trial — not the United States shipping commissioner — was tnat it 
 was a st6ry well composed and they were sea lawyers. 
 
 The Chairman. Commissioner Craig made that observation? 
 
 Mr. Richards. Yes, sir; and not Mr. Knight. We had to go to 
 Mr. Knight's office to be paid off, and the captain emphatically refused 
 to pay them off there. 
 
 The Chairman. How does it happen, according to Commissioner 
 Knight's statement, that the seamen are never willing to arbitrate 
 their differences before him as shipping commissioner? 
 
 Mr. Richards. For the simple reason that the seamen in this coun- 
 try have never attained any right except by hard fighting — very hard 
 fighting. Their cases have been appealed from one court to the other. 
 If we sign the arbitration papers that makes the decision of the com- 
 missioner final, and we can not appeal. If we take the case to the 
 United States commissioner at Ninth and Chestnut, and he renders an 
 unfavorable decision, we can appeal the cage if we see fit. That is the 
 reason. 
 
 Senator Mallort. You mean by that statement that if you go before 
 the shipping commissioner you have to sign an agreement? 
 
 Mr. Richards. An arbitration blank. 
 
 Senator Mallort. And from his decision there is no appeal ? 
 
 Mr. Richards. No, sir. 
 
 Senator Mallory. Whereas if you go before a United States district 
 court commissioner you can appeal. 
 
 Mr. Richards. Yes, sir; which we often do. 
 
 The seamen in this country have no desire whatever to be handled 
 by the crimp. They have done all in their power against it. They 
 can not do any more. They all seem to think, as I do, that the only 
 way that the condition of the seamen can be ameliorated is by the sea- 
 men of this country having a fair chance to meet the masters or the 
 captains of the vessels themselves and substitute agreement for aggres- 
 sion, and that is what we have not had any chance to do. 
 
 The Chairman. Does Mr. Lewis desire to be heard? 
 
 Mr. Lewis. 1 thank you for calling upon me, but I have not any- 
 thing special to say. 
 
 The Chairman. I have called all the names on the list handed to me. 
 Does any other gentleman desire to be heard? 
 
 REMARKS OF THE CHAIRMAN. 
 
 The Chairman. In behalf of the Commission, I wish to express 
 our appreciation of the kindly manner in which this inquiry has been 
 met by gentlemen representing various interests in connection with 
 the shipping business here. I meant to say in a former statement 
 which I made, but 1 omitted it, that so far as I can ascertain this Com- 
 mission has entered upon the discharge of its perplexing duties without 
 any prepossessed opinions on the subject. Mr. Cramp this morning 
 frankly stated that he had formerly advocated a ship-subsidy bill, but 
 now favored discriminating duties. I think I can say that every mem- 
 ber of this Commission is open to conviction upon evidence; and 
 
464 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 whether or not we shall be able to work put this problem, even to a 
 limited extent, I know I voice the sentiments of my associates when I 
 say that our purpose is to give intelligent consideration, regardless of 
 our own personal comfort, to the solution of the question, in the hope 
 that we may lay the foundation at least for some legislative action 
 which will result in the future in the upbuilding of the merchant 
 marine of the United States. [Applause.] 
 
 Representative Spight. And without regard to any personal consid- 
 eration. 
 
 The Chairman. We have been most delightfully entertained in your 
 beautiful and progressive city. We did not come here forsocial atten- 
 tions or to indulge in a so-called junket. We came here on business, 
 and we will leave you gentlemen with most pleasant recollections of 
 our relations during the past two days. 
 
 EESPONSE or JOEL COOK. 
 
 Mr. Cook. May I be permitted, on behalf of the Board of Trade and 
 of the commercial interests of Philadelphia, to express our thanks to you 
 for the careful attention and patient hearing you have given every 
 branch of the maritime business in this port? 
 
 The Chairman. On behalf of the Commission I will add — and it 
 might properly have found expression in a formal resolution — that the 
 Commission appreciates most highly and desires to return very sincere 
 thanks to the board of trade for granting us this audience room in which 
 to conduct our hearings. 
 
 Thereupon, at 12 o'clock meridian, the Commission adjourned to 
 meet in Baltimore to-morrow, Saturday, May 28, 1904. 
 
 HEARING AT BALTIMORE. 
 
 United States District Court Room, 
 
 Baltimore, Md., May ^8, 1904,. 
 The Commission met at 11 o'clock a. m. 
 
 Presents Senators Gallinger (chairman), Martin, and Mallory; and 
 Representatives Minor, Humphrey, and McDermott. 
 
 ADDRESS OF HON. THOMAS J. MOERIS, XJNITED STATES DISTRICT 
 
 JUDGE. 
 
 Mr. Morris. Mr. Chairman and gentlemen, it is my privilege 
 to say a few words welcoming j^ou to Baltimore, and expressive of 
 our great appreciation of your visit. We feel that the port of 
 Baltimore has been since the early days of the colonies one of the 
 important natural ports on the Atlantic seaboard. We feel that we 
 have always had here the men and the enterprise which have enabled 
 us to contribute a considerable share to that reputation which the 
 Americans have earned for being admirable shipbuilders and enter- 
 prising mariners. We feel that we have here a fine port and harbor, 
 with natural advantages, which have been largely supplemented by 
 the artificial appliances of modern times. 
 
 We feel, as I think all the people in the United States feel, or ought 
 to feel, that the United States has not maintained that share of the 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 465 
 
 carrying trade of the world to which our energy and capacity entitle 
 us Why we have not is one of the problems which vexes our genera- 
 tion, and the duty in i-egard to which has been devolved upon this 
 Commission. "We hope that your visit here may result in your receiv- 
 ing information, some facts, some knowledge, which, perhaps, added 
 to that great store you already have, may be of some assistance to you 
 in -Solving the difficult questions which your public service devolves 
 upon you. 
 
 I am happy to be able to express, on behalf of the gentlemen here 
 present and the people of Baltimore generally, a most hearty welcome 
 to the Commission. 
 
 RESPONSE OF THE CHAIRMAN. 
 
 The Chairman. Judge Morris, in behalf of the Merchant Marine 
 Commission 1 wish to thank you, sir, for your kind words of welcome. 
 
 This Commission was constituted by an act of Congress approved 
 on the 28th day of April last, and the duty imposed upon the Com- 
 mission is so well expressed in section 2 of the act that 1 will take the 
 liberty of reading it: 
 
 "That it shall be the duty of this Commission to investigate and to 
 report to the Congress on the first day of its next session what legisla- 
 tion, if any, is desirable for the development of the American merchant 
 marine and American commerce, and also what change, or changes, if 
 any, should be made in existing laws relating to the treatment, comfort, 
 and safety of seamen, in order to make more attractive the seafaring 
 calling in the American merchant service." 
 
 The Commission is composed of five members of the Senate and five 
 members of the National House of Representatives. As chairman of 
 the Commission it is a matter of regret to me that unavoidable circum- 
 stances have kept away from this meeting a portion of our membership. 
 
 We have held interesting hearings in New York and Philadelphia, 
 and it is purposed to extend the hearings to Boston, to the lake ports, 
 to the Puget Sound territory, to San Francisco, and to some ports in 
 the South Atlantic and on the Gulf. 
 
 We are here in pursuit of information. In common with all other 
 Americans, we understand the deplorable situation. That our American 
 merchant marine is practically driven from the ocean is a fact. We 
 all deplore it and would be glad to find a remedy, if there is any prac- 
 ticable way in which to accomplish that very desirable result. 
 
 What we are in search of is information from practical men, and we 
 shall be very glad indeed to listen to suggestions from the enterprising, 
 progressive business men of Baltimore, who, in common with those of 
 other American ports, have most at heart the consummation we are 
 trying to reach. We are in hopes that this inquiry will throw light 
 upon the subject to an extent that will at least enable this Commission 
 to lay the foundation for future legislation in the interest of American 
 shipping on the high seas. 
 
 With these introductory remarks, we are prepared to hear state- 
 ments from any gentlemen who may desire to be heard; and I will 
 first call on Mr. Bernard N. Baker. 
 
 3^—04 30 
 
466 HEARINGS BEB'OEB THE MEKCHANT MARINE COMMISSION. 
 
 STATEMENT OF BERNARD N. BAKER. 
 
 Bernard N. Baker appeared before the Commission. . 
 
 The Chairman. Mr. Baker, please state to the Commission what 
 your business is. 
 
 Mr. Baker. I am entirely out of business at the present moment, 
 but I have been interested in the shipping question. My past experi- 
 ence, which I have taken the liberty of committing to writmg, will, I 
 think, answer that question. 
 
 Before addressing you on the subject I wish to express our apprecia- 
 tion of the honor done us by visiting our city, and to say that, although 
 you will find the city in a somewhat crippled condition on account of 
 our fire, there still live the sons and grandsons of the men who once 
 made our merchant marine famous and carried the American flag to 
 every port in the world in the renowned old Baltimore clippers. I 
 believe we can do it again. 
 
 Mr. Chairman and gentlemen, in presenting my views on the build- 
 ing up of the merchant marine of the United States I find it is neces- 
 sary to give you my personal experience. 
 
 About twenty jears ago, seeing that very little of the large volume 
 of export business from this country to foreign countries was being 
 done by citizens of the United States, and knowing of the great suc- 
 cess of many of the foreign companies engaged in ocean transporta- 
 tion, most notably the White Star and the Peninsular and Oriental of 
 England, the Hamburg- American Packet Company and the North Ger- 
 man Lloyd of Germany, who were all doing a large and very profita- 
 ble business, it occurred to me that a part of this profit could be earned 
 by citizens of the United States. 
 
 With this object in view the Atlantic Transport Company was organ- 
 ized in Baltimore. During that time in our experience we built, 
 bought, and chartered more than 100 steamships. The success of the 
 company was phenomenal up to the time of the change in management 
 and its passing into the hands of the International Mercantile Marine 
 Company. During all this time there was never a period when we 
 were not anxious and willing to build ships in the United States and 
 run them under our flag, but unfortunately we have never been able 
 to do so. 
 
 BUILT IN ANTICIPATION OF SUBSIDY. 
 
 When the subsidy bill was introduced in Congress our company 
 at once contracted for six steamships to be built in the United States, 
 under the assurance that that bill would be passed. You all know of 
 its failure. Two of the largest and best of these steamers the company 
 disposed of to a trade limited entirely to American-built steamers (the 
 Pacific Mail). They were probably two of the finest ships ever built 
 in the United States. Fortunately they will remain under the Ameri- 
 can flag. The other four ships,''being of the class of freighters or 
 ordinary cargo boats, have been laid up, I believe, for a greater portion 
 of the time since their delivery, and can not be profitably employed 
 to-day under our flag. 
 
 ^ First, do the people of the United States want a mercantile marine? 
 This is a question that you gentlemen are much better posted upon 
 than I could possibly be, but I can only say that from what inf orma- 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 467 
 
 tion 1 have been able to gather, the citizens of the United States do 
 want a mercantile marine. 
 
 Second, do we need it ? The absolute necessity for an increased 
 mercantile marine was demonstrated at the beginning of the Spanish- 
 American war. At this period the President of the United States 
 sent for me. 
 
 THE LESSON OF THE SPANISH WAR. 
 
 Without going into details I found (and 1 think I can make this 
 statement without fear of contradiction) that it was an impossibility 
 for the ships then under the American flag to carry all our troops to 
 Cuba and the Philippines. It was an impossibility, gentlemen, with 
 what we had, and had it not been for the assistance given us by other 
 countries, it never could have been done. 
 
 The result of this interview with the President was the transfer to 
 our Government of seven large steamers then under the British flag. 
 I personally proposed to the honorable Secretary of War a plan for 
 the transferring of the ships owned and controlled by our company to 
 me and by me to the United States Government. Having absolute 
 control of a majority of the stock of the company, my position enabled 
 me to make the transfer without difficulties. If the Spanish ambas- 
 sador in London had protested, the transfer could not have been made. 
 Suppose our trouble had been with England, what could have been 
 done? 
 
 I will say that in an interview with the Attorney-General at that 
 time the question came up how it could be legally done, and the only 
 waj^ in which it could be legally done was by transferring the vessels 
 to an individual, an American citizen, and by his transferring them 
 to the United States. 
 
 I think this demonstrates the absolute necessity for the United States 
 to have in some way under their own flag a sufficient amount of mer- 
 cantile ocean tonnage to meet any emergency that might arise. 
 
 OUR NEED OF FAST AUXILIARIES. 
 
 When we come to the more important question of the so-called 
 "commerce destroyers," or fast transports, I believe to-day, from my 
 knowledge and experience in the steamship business, that France, 
 Germany, and England, in the event of difficulties with any of these 
 countries, could destroy every vestige of American ocean commerce 
 or drive it from the high seas within sixty days after hostilities were 
 declared, and that our Navy would be absolutely powerless to capture 
 the twenty-two to twenty -five knot ships owned by those countries. 
 
 Again, were it necessary to transfer any large number of troops to 
 a foreign soil, there is not one first-class power that could not deliver 
 them to such foreign soil in a fraction of the time that would be required 
 by the United States with our mercantile marine in its present condi- 
 tion. I think the citizens of the United States are sufficiently patri- 
 otic to want ships equal to any maritime nation for transport service, 
 and they should have them. If England can expend $13,000,000 for 
 two steamers for transports, and give them a large subsidy in addition, 
 why can not we? 
 
 The policy of our Government since the Spanish-American war has 
 been, with the assent of both parties, largely to increase the number 
 
468 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 of vessels, and also the speed and efficiency of our Navy. Without 
 the assistance of armored scouts capable of carrying guns, such as 
 the new Cunard vessels and also the fast ships of the German com- 
 panies, it would be impossible for our Government to be advised in 
 case of the approach of a hostile squadron to our shores or to our 
 fleets for hours after these countries could know of their position and 
 character. 
 
 A DIFFERENCE OF 40 PEE CENT. 
 
 Third, how can we acquire the ordinary merchant steamer? By 
 actual experience, the difl'erence in cost is about 40 per cent; but to 
 confirm this 1 am making arrangements now, and hope to be able to pre- 
 sent to your honorable Commission before the meeting of Congress in 
 December, actual bids from German, English, and American builders for 
 identically the same class of ships, both for mail and general cargo 
 purposes. The increased cost of a fairly good type of general cargo 
 boat, such as those built by the New York Ship Building Company 
 for the Atlantic Ti-ansport Company, and owned at present by the 
 Pacific Mail, was 41 per cent. 1 believe that on the very highest class 
 of fast ships, such as the Cunard are building to-day, the additional 
 percentage of increased cost would not be quite so great; but of this 
 I can not speak from actual experience. The figures depend entirely 
 upon the time you take, the price of steel varies so in England and 
 in the United States. 
 
 MR. baker's plan. 
 
 Now, the first and most important question for anyone desiring to 
 engage in the mercantile marine is, Upon what tei-ms could they induce 
 capital to invest in American ships* First, and most important of 
 which is the difference in cost, the consequent additional depreciation, 
 insurance, and interest on the capital required. 
 
 I suggest that Congress should make an appropriation of an amount 
 each year, for so many years, for the building of American shipping. 
 This should be made subject to a contract being entered into by public 
 proposals, so that no one citizen or corporation of the United States 
 would have any undue advantage. It should be placed in the hands of 
 the proper department of the Government to make such contracts 
 (probably the Treasury Department), and a form of bid should be made 
 as to what amount and character of tonnage would be added to the 
 American flag each year by the contracting parties. 
 
 That under no circumstances would the transfer of these ships to any 
 foreign flag be allowed for twenty years, which is the average life of a 
 good ship. That during that period they must be engaged in the for- 
 eign commerce of the United States, and always be subject to the call of 
 the Government for transport service. I believe there would be many 
 bidders. .Bids should be based on the actual difference of cost between 
 the same character of ships built in any foreign country and in the 
 United States, and the bidders must make such calculations as to the 
 additional compensation and accommodations necessary for American 
 officers and American apprentices in proportion to the tonnage of the 
 proposed ships, and an increased portage scale, thereby throwing upon 
 the bidders the responsibility of assuming all the difference in cost that 
 there might be. 
 
HEARING!^ BEFORE THE MERCHANT MARINE COMMISSION. 469 
 
 MUST COMPENSATE FOR ADDED COST. 
 
 It is absolutely necessary that this question of first cost and increased 
 investment should be made good to secure capital, or, in other words, 
 place the American steamship owner in the same position as though 
 he were German, French, or English. I do not bring in any question 
 of Norwegian, Scandinavian, or Italian ships, which would be very 
 much less. I leave that all out, but put us in the same position as are 
 the first-class powers. 
 
 Senator Malloky. Have you thought sufficiently in detail to indi- 
 cate what you think would be an adequate amount to start with? 
 
 Mr. Baker. I will give it to you later on, Mr. Seaator. 
 
 In addition to this the question of commerce destroyers and fist 
 mail steamers is a most important one. I would advise that an appro- 
 priation be made for a mail contract for at least three, and possibly 
 four, of the fastest ships afloat for mail purposes to a foreign port, 
 and awarded to the lowest responsible bidder. 
 
 I think you will admit that m inviting capital to invest in mercantile 
 enterprises under our flag, it must be secured by placing it on the 
 same basis as if invested in any other country, having in view particu- 
 larly the recent contract made with the Cunard Company, which covers 
 a period of years. I do not see why any of the present mail contracts 
 with the existing lines need be disturbed. 
 
 OTHER REMEDIES. 
 
 Discriminating duties. — I have given this question a great deal of 
 thought, but do not believe that it will be possible to make a distri- 
 bution of duties that would make a fair, working basis upon which to 
 operate a steamship company, to say nothing of the complication 
 which might arise in the difference in values of cargoes carried. One 
 cargo might be silk and the other cement. Just imagine what the 
 difference would be! In addition to this, it opens up a question which 
 might possibly disturb so many existing contracts and relations with 
 foreign governments. 
 
 Export iounties. — This I do not believe practicable, on account of 
 the difficulties in regard to the character of the merchandise on which 
 export bounties could be allowed. 
 
 Mileage compensation. — Here again the question of distances run, 
 tonnage, character of tonnage, and speed would necessarily make a 
 more or less complicated arrangement, which I do not think would be 
 practical. Making good the difference in the first cost of the construc- 
 tion of the ship would open up to our American people an entirely new 
 enterprise, and its development would furnish work to mechanics and 
 laborers, and to our shipyards, and I believe that each year there 
 would be a large increase in the amount of tonnage added to our mer- 
 cantile marine under the same amount of compensation per annum, as 
 it would enable the shipbuilder to very materially reduce the cost of 
 construction; particularly from the fact that they would have a very 
 much greater amount of work, and consequently be able to maintain 
 regular and profitable employment of mechanics. Not only this, but 
 I venture the prediction that within ten years after the passage of such 
 a bill, our American shipyards will produce a vessel as cneaply as those 
 
470 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 of any other country in the world by their energy, enter£)rise, and 
 experience that would be added by this largely increased production 
 of merchant ships. 
 
 A BKITISH OPINION. 
 
 I wish to say right here that the Right Honorable William J. Pirrie, 
 of Belfast, the largest shipbuilder in the world, said to me, "Mr. 
 Baker, if 1 were only 10 years younger I would start a yard in the 
 United States. With your unbounded facilities, your enormous 
 resources, and the introduction of capital and the giving of regular 
 work to men I think 1 could build ships in America in competition 
 with any country in the world. Why do you not give it a start?" 
 That was from an English shipbuilder, the largest shipbuilder in the 
 world. 
 
 Another benefit which I have seldom seen discussed is that "trade 
 will follow the flag." It will so enormously increase our exports, 
 particularly when our manufacturers come into competition with those 
 of foreign countries under our own flag, that it will many times repay 
 the Government for any outlay that may have been made. 
 
 Large sums of money have been used in the past, and as now dem- 
 onstrated, with good judgment and good results, in the developing of 
 the transcontinental railways of our country. Would this country 
 have been in the same position it is to-day had not assistance been 
 given to these companies by our Government? 
 
 With our unbounded resources I have such implicit faith and confi- 
 dence in the future of our country and in the ability of our citizens to 
 manage and operate in competition with any country in the world, not 
 only railways and manufacturing interests but also steamship compa- 
 nies, if they are given the same advantages as are given to companies 
 owned by other nations. 
 
 A FAST MAIL SERVICE. 
 
 I have been informed that the United States is the only Government 
 in the world that to-day is doing a large and profitable foreign-mail 
 business. In other words, that a large amount of money is being 
 received by the Post-Office Department annually over and above the 
 amount paid for contracts for foreign-mail service. Could not this be 
 used in part for encouraging a fast mail transport service ? 
 
 Suppose the Government were to use for this purpose $15,000,000 
 per year for ten years; at the end of that time we would have a mer- 
 chant marine and fast mail service second to that of no country in the 
 world. I believe it would increase our export business of manufac- 
 tured products to many times its present volume, would largely increase 
 the number of the manufacturers and producers of the United States 
 to-day, and would bring to the United States increased wealth of 
 many millions through the profits to the steamship companies alone, 
 and benefit every producer of the United States, be he farmer or 
 manufacturer. 
 
 In discussing fiscal charges Mr. Joseph Chamberlain frequently 
 referred to the enormous return to the British public from its mer- 
 chant marine. Without having the actual figures before me my 
 recollection is that he placed the amount at over $200,000,000 per 
 annum; an amount largely made up from carrying American food and 
 manufactured products. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 471 
 
 THE PROBABLE COST. 
 
 As to cost, my idea is that Congress should set aside the sum of 
 $10,000,000 per annum for ten years for the building up of the mer- 
 chant marine. For this sum I believe that in the ten j^ears not less 
 than 2,500,000 tons of American steamship tonnage can be added to 
 our mercantile marine. This could be done gradually, without any 
 disturbance. Foreign governments and foreign steamship companies 
 would recognize that the United States was entitled, from Our position 
 as a maritime power, to a proportion of the ocean-carrying trade of 
 the world, and would gradually meet this condition. 
 
 We should appropriate $5,000,000 per year for twenty years for 
 the mail contract. I am informed that at least $2,000,000 of this 
 $5,000,000 is already earned. What a trifling sum this would be! 
 Thirteen millions per year for ten years, when taking into considera- 
 tion the amount of work, employment, and distribution of profits that 
 could be made, to say nothing^ of the increased exports and impetus to 
 manufactures. Why England expends $13,000,000 for two steamers 
 alone! Compare this with the amount spent for river and harbor 
 improvement, pensions, or any of the larger expenditures of our Gov- 
 ernment, and it amounts to practically nothing. 
 
 It would give employment and profitable work to hundreds of 
 thousands of our people who are now suffering, and are leaving us to 
 return to foreign shipbuilding yards on account of the fact that they 
 can not obtain work in this country. 
 
 BUILDING UP GENERAL COMMERCE. 
 
 The Chairman. 1 understand you advocate increasing the mail sub- 
 vention to the amount of $5,000,000. 
 
 Mr. Baker. To foreign ports. 
 
 The Chairman. To foreign ports. I do not quite understand how 
 you are going to apply the other ten millions. 
 
 Mr. Baker. To build up general commerce, open to bids by all per- 
 sons who will go into the steamship business. 
 
 The Chairman. Is it to be a. direct bounty or gift to the ship con- 
 structors? 
 
 Mr. Baker. You could give it to the ship constructors or to the 
 merchants going into the business. You would use it for building up 
 the merchant service of the United States. 
 
 Representative Minor. It is intended to cover the difference in the 
 cost of construction. ' 
 
 Mr. Baker. The actual difference in cost. It relieves the Grovern- 
 ment from the necessity of going into the question as to what is the 
 actual difference^ — what is tne difference in crews' wages, etc. The 
 bidder himself assumes all that responsibility, and he is the man who 
 ought to know it best, or else he ought to stay out of the business. 
 If ne goes into the business without sufficient knowledge to make a 
 bid under which he will make some money, he will lose, but the ships 
 will still remain and the United States will have a merchant marine. 
 
 Senator Mallory. Do you think that would be enough to cover the 
 difference in the cost of operating the ships, which most of the wit- 
 nesses who have testified on that subject indicate is more than one- 
 third as between a foreign ship and an American ship? 
 
 Mr. Baker. I think 40 per cent would cover it. 
 
472 HEAEING8 BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Senator Malloey. Possibly it would. 
 
 Mr. Baker. I have set no amount. 
 
 Senator Malloey. You propose to give $10,000,000 a year 
 
 Mr. Baker. For the purpose of building up the American merchant 
 shipping. 
 
 Senator Malloey. To somebody who will undertake not only to 
 build the ships, but to operate them? 
 
 NOT TO A SINGLE COMPANY. 
 
 Mr. Baker. I would give it to any number of people. I would 
 give it to the man who wants to build a single steamer — whichever 
 way appears to be the most profitable to the Government. I think 
 that would be good policy. 1 doubt very much whether it would be a 
 question of its all going to one company. I think it would be distrib- 
 uted, and each year I think the merchant marine would largely increase. 
 If you attempted to build it up at once it would be impossible, because 
 of the disturbance which would result. 
 
 Suppose discriminating duties are adopted as the policy of the Gov- 
 ernment. We have not one single ship to-day owned and controlled 
 by Americans plying on regular lines to European or continental ports. 
 
 The Chairman. I am somewhat troubled in this respect. Under 
 your proposition the Government will appropriate a stated amount of 
 money, and bids will be advertised for, and if you, for instance, succeed 
 in getting the contract under those bids for building certain ships- 
 
 Mr. Bakee. May I interrupt the chairman for a moment? 
 
 The Chaieman. Certainly. 
 
 Mr. Bakee. It is not for building certain ships. You set aside this 
 amount and throw the responsibility on me. And the authority in the 
 Treasury Department we will say, for the sake of the argument, will 
 judge whether the ships I offer to build for a certain percentage of that 
 bounty present what is best to be done in comparison will all the bids 
 submitted. 
 
 A MATTEE OP COMPETITION. 
 
 Of course I have not taken the time to work out such a bill as I 
 think would be desirable. I think I could do it. Ten million dollars 
 a year is given to the Treasury Department for_this purpose. I as an 
 individual would come in and say, "1 will add 100,000 tons to the mer- 
 chant marine, of such and such dimensions — ten ships of 10,000 tons 
 each — of such and such speed. " They are to be kept under the Amer- 
 ican flag, just as England and other countries have done, which coun- 
 tries will not allow the sale or transfer pf such vessels to any other 
 flag. I would say ' ' in consideration of a contract giving me $1,000,000 
 of that $10,000,000, 1 will add to the American merchant marine 100,000 
 tons, as I say, ships of so many knots, with an American crew, and 
 carrying so many American apprentices, and I will add that tonnage 
 within a given time." 
 
 Another man will come in and bid for one ship. It may not be of 
 exactly the same dimensions. Mr. D. will come in with an offer to 
 build two or three ships. You take up the bids and consider them. 
 The Department having this matter in charge will accept those bids 
 which it considers most desirable. In that way the Government would 
 be relieved of all these questions of the settlement of duties, of an 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 473 
 
 export bounty, of a mileage basis to be calculated, of any question 
 as to whether a ship makes 15 knots on her trial trip and never more 
 than 10 knots afterwards. All those questions would be entirely 
 eliminated, and the responsibility would be thrown on the bidder. 
 
 Senator Mallort. What we want is to get ships engaged in the 
 trade and not merely to build ships. In my judgment, so far as 1 
 have been able to determine from tne testimony, the great difficulty 
 with us now is in the operating expenses of an American ship as com- 
 pared with a foreign ship. You may start out with an American ship 
 that costs nothing, and you can not compete with a foreign ship that 
 has cost the usual price. 
 
 Mr. Baker. I think you will have submitted to you to-day, possibly 
 by one of my associates here, more clearlj' than I have done, figures as 
 to the actual difference between two ships of the same type with respect 
 to portage or victualing, as we call it, of the crews and crews' wages, 
 and it does not amount to anything like the figures I think you have 
 had presented to you. That accords with my actual experience. 
 
 Senator Mallort. I am very glad to hear you say that, as I recognize 
 you as an authority on the subject. 
 
 NO COOLIES IN THE NORTH ATLANTIC. 
 
 Mr. Baker. We can not in the North Atlantic go over and get a crew 
 of coolies and give them nothing but rice and pay them 5 Siillings a 
 month, $2 a month. That condition exists in the Pacific. In the North 
 Atlantic we can not do it. It is not fair, and I would not for a moment 
 agree to put the American merchant marine on the basis of Scandina- 
 vian or Norwegian or Italian or cooly labor. We can do better than 
 that. 
 
 There are good people in Italy and in those countries, but I think our 
 business ability, our business enterprise and energy, would enable us 
 to pay our men better wages, through good business management, and 
 give them better food than is given by the ships of those countries. 
 To-day if one of our old ships wears out and we can not do anything 
 with her and are ready to throw her away, we sell her to Italy or Nor- 
 way. Those ships do not carry any insurance. The owners do not take 
 into consideration the protection of men's lives and what the men eat 
 or anything of that kind. Really, some of those ships are terrible. We 
 are not talking of competing with such vessels; do not. As Ameri- 
 cans we can not allow that. Let us put it on a fair basis and put the 
 responsibility on the shipowner. 
 
 There are many times when it is more profitable to lay up a ship than 
 it is to run her. If we adopt such a policy as I have outlined, men are 
 not going to put their money into ships and allow them to lie idle 
 simply for the purpose of getting that aid. 
 
 Tne Chairman. Your additional remarks have elucidated the propo- 
 sition, and I fully understand it. It is a novel proposition, and has 
 not heretofore come to the Commission in the shape in which you have 
 put it. 
 
 Mr. Baker. If it is worthy of consideration, I will be very glad to 
 put myself at your disposal. I have nothing to do. I am only desirous 
 and anxious to see the American merchant marine rehabilitated. It 
 has been a hobby with me from my boyhood to build up the American 
 merchant marine. 
 
474 HEARINGS BBFOBE THE MERCHANT MARINE COMMISSION. 
 THE ATLANTIC TKANSPOKT LINE'S SUCCESS. 
 
 Senator Malloet. I understand you to say that the Atlantic Trans- 
 port Line, with which you were connected, was marvelously profitable 
 and successful up to the time of its transfer? 
 
 Mr. Bakek. Very profitable. We paid on the average a dividend 
 of 10 per cent per annum for twenty years, and at the end of that 
 time our accumulated surplus and capital represented on a conserva- 
 tive valuation about 250 per cent on the original investment. 
 
 Senator Malloet. How many vessels were there in the line? 
 
 Mr. Bakee. We averaged twenty-four. 
 
 Senator Malloet. At the time of the transfer how many were 
 there ? 
 
 Mr. Bakee. There were seventeen large ships, I think. 
 
 Senator Malloet. Of over 2,000 tons, 1 suppose? 
 
 Mr. Bakee. Oh, yes; all were over 5,000 tons. There were five of 
 13,000 tons. I should not like to speak from memory in that respect. 
 
 Senator Malloet. In what trade were they engaged? 
 
 Mr. Bakee. Mainly between New York, Philadelphia, Baltimore, 
 and London. 
 
 Senator Malloet. Can you state in what trade the vessels which 
 belonged to your line are now engaged? Or are they all engaged in 
 the same trade as before? 
 
 Mr. Bakee. For two years I have had nothing to do with the com- 
 pany, but I think I can. The majority of them are engaged at pres- 
 ent from New York to London. Some of them I think nave gone out 
 to the Black Sea. I hardly know where some of the others are. 
 
 Senator Malloet. They are not employed now ? 
 
 Mr. Bakee. A great many of them are laid up. 
 
 Senator Malloet. They are laid up because the owners can not 
 find profitable employment for them ? 
 
 Mr. Bakee. Some of them, are down to the Gulf ports on account 
 of the largely increased export movement there. They are distributed 
 around, although the regular line is being maintained between New 
 York and London. But the Baltimore and London, as well as the 
 Philadelphia and London line, has been almost abandoned. 
 
 STATEMENT OF BLANCHARD RANDALL. 
 
 The Chateman. Does Mr. Blanchard Randall wish to bo heard ? 
 
 Mr. Randall. I am here more as a listener. I am not the owner 
 or manager of ships. I know nothing about them. I am merelj' a 
 merchant who uses ships. 
 
 The Chaieman. You are familiar with the scope of the inquiry of 
 the Commission? 
 
 Mr. Randall. Yes, sir. 
 
 The Chairman. The Commission will be pleased to receive any sug- 
 gestions you may wish to make. 
 
 Mr. Randall. I should prefer to be a listener. 1 am very much 
 interested in the subject, but I do not know that I have any suggestions 
 to make. 
 
 I am an export merchant in Baltimore and use tonnage that comes 
 here, and I am very anxious to see American shipping rehabilitated. 
 I have never put a bushel of grain or a barrel of flour in an Ameri- 
 
HEARIKGS BEFORE THE MERCHANT MARINE COMMISSION. 475 
 
 can ship to be shipped to Europe. It would be a novelty. 1 say not 
 a bushel; there may have been a few thousand bushels. Baltimore 
 has a trade of 50,000,000 bushels of grain and flour per annum, and I 
 do not suppose 10,000 bushels go in American bottoms, coastwise or 
 otherwise. 
 
 The Chairman. That is a very important item of information. 
 
 Mr. Randall. That is the average for the last twenty years — 
 50,000,000 bushels of flour and grain from this port. 
 
 Representative McDermott. What difference does it make to you 
 whether you export in American bottoms this food for foreigners? 
 
 Mr. Randall. In profit? 
 
 Representative McDermott. Yes. 
 
 Mr. Randall. I can not answer that, as we have never exported 
 any in American bottoms, but I can imagine that in profit there would 
 not be any difference. 
 
 Representative McDermott. It does not make any difference to 
 you as an exporter? 
 
 Mr. Randall. No, sir. 
 
 Representative McDermot^. None whatever ? 
 
 Mr. Randall. No, sir. 
 
 Representative McDermott. You are not interested in shipbuilding? 
 
 Mr. Randall. No, sir. 
 
 Representative McDermott. Do you know why American bottoms 
 are not furnished for exportation purposes ? 
 
 Mr. Randall. Americans are not anxious to be owners of such ships. 
 
 Representative McDermott. Because they are not profitable ? 
 
 Mr. Randall. Because they are not profitable. 
 
 Representative McDermott. In order to make an American ship 
 pay it would have to charge higher rates than are charged by the own- 
 ers of foreign bottoms carrying your goods ? 
 
 Mr. Randall. That would be the result. 
 
 Representative McDermott. You would not, under those circum- 
 stances, patronize American ships ? 
 
 Mr. Randall. No, sir; not at a higher rate. 
 
 STATEMENT OF F. W. WOOD. 
 
 F. W. Wood appeared before the Commission. 
 
 The Chairman. Please state to the Commission in what business you 
 are engaged at the present time. 
 
 Mr. Wood. I am president of the Maryland Steel Company ; engaged 
 in shipbuilding. 
 
 I come here, Mr. Chairman, recognizing that the diflBculties and 
 obstacles attending the building up of the American merchant marine 
 have been fully set forth in the previous hearings of this Commission, 
 and what I can say will be very largely repetition, and my remarks 
 will be wholly from the shipbuilders' standpoint. 
 
 If, as I believe, the American people have decided that it is a matter 
 of national importance to develop and build up their merchant 
 marine, I believe that legislation will accomplish that, and the kind of 
 legislation which will accomplish it is as fully warranted as legisla- 
 tion for any other public purpose or public improvement. We do not 
 hesitate to use legislative means to accomplish public improvements in 
 other directions. 
 
476 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 The question as to the character of legislation and how far it should 
 go is of course a matter of individual opinion. We all recognize that 
 the question of building up the merchant marine is primarily a com- 
 mercial one. If conditions can be brought about whereby capital 
 invested in ships can be made profitable, ships will be built even under 
 the restrictions which now exist. Legislation can accomplish that. 
 
 The causes of the increased cost of operating American ships, which 
 have been stated so many times within the past week, are obviously, 
 first, cost of construction, meaning increased capital investment; sec- 
 ond, increased cost of operation as compared with foreign ships, and 
 third, possible advantages secured to the ships of foreign nations 
 by their individual governments in the way of subsidies or special 
 privileges. 
 
 A CONSTBUCTION BOUNTY. 
 
 In regard to the first— increased cost of construction — my measure of 
 that as a shipbuilder is that under present conditions it costs us from 30 
 to 50 per cent more to build on this side than in Europe, the increased 
 cost being the fesult of the higher cost'of material and increased cost 
 of labor. At present or immediately it is impossible, from my stand- 
 point, to make a substantial change in those conditions. Therefore, if 
 we are to hope to secure the investment of American capital in 
 American ships we must equalize the earning power of that capital 
 with that invested in foreign ships; in other words, by cutting down 
 the cost to the American owner by a direct Government payment. 
 
 Now, to continue that indefinitely or the prospect of having to con- 
 tinue it indefinitely, would, it seems to me, make it impracticable. I 
 do not believe it would be necessarj'^ to do so, for the reason that 
 immediately profitable employment for capital in American ships is 
 assured, I believe from our past experience that the yards of the 
 country capable of handling ships required for the foreign trade will 
 have a sufficient quantity of work thrown into them to permit them in 
 a few years to bring shipbuilding down to a manufacturing basis, a 
 condition which has never prevailed in iron and steel shipbuilding in 
 the United States. 
 
 Cases are cited continually of our competition with foreign nations 
 in other lines of manufacture. If those cases are analyzed, you will 
 find in every instance, I believe, that the ability to bring down the 
 cost to a point below that of foreign competitors and at the same time 
 pay the wages prevailing in this country, in all lines of industry — and 
 it is the higher wages prevailing in this country in all lines of indus- 
 try — is because the element of repetition has entered into that manu- 
 facture, due to the great volume of business. 
 
 SHIPYARDS MUST SPECIALIZE. 
 
 If a manufacturer of agricultural machinery, who is now able to 
 send his goods all over the world, in competition with other nations, 
 undertook to build a sewing machine and a locomotive and a stationary 
 engine in his shop, and the probability is he has the tools with which 
 he could accomplish it, you all recognize what would be the result in 
 the cost of the individual machine. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 477 
 
 The shipyards have been in that condition in this country for the 
 past twenty years. There has never been volume of work enough to 
 approach the conditions which have prevailed in other lines of manu- 
 facture in which we are competing successfully with the rest of the 
 world. How long would it be necessary to continue that Government 
 aid? And I should say what I did not make clear at the beginning, I 
 would propose that that construction bounty, or whatever you call it, 
 should be paid to the purchaser of the ship. Let the shipbuilders 
 compete for the work as they are doing now. How long it would be 
 necessary to continue that Government aid of course it is impossible 
 to tell, but I should expect to see such progress in ten years as would 
 certainly very greatly reduce it, perhaps wipe out the necessity for it 
 entirely. 
 
 In regard to other elements which render unprofitable the employ- 
 ment of American capital in ships engaged in the foreign trade, 1 
 prefer to leave to others who are more familiar with the operations. 
 
 FKOM 76 TO 15 PER CENT. 
 
 Representative Minor. You place the difference in the cost of con- 
 struction between England and this country at from 30 to 50 per cent. 
 Taking it through the years we experienced when everything went up 
 from year to year, would you get the same result, or is it not a fact 
 that material at this time is quite cheap in England while it is high 
 here? You are liable to get a reversal of that condition. Then how 
 would the cost compare? 
 
 Mr. Wood. In extreme cases in which we have bid on ships in com- 
 petition with foreign builders, our bid has been 75 per cent higher 
 than the English bid. That I consider was extreme and unusual, and 
 so extreme and unusual as not to cut much figure. I think on the 
 average 30 to 50 per cent would fully cover the difference; and it has 
 been in other extreme cases as low as 15 per cent. We bid on some 
 ships for the Louisville and Nashville Railroad in 1901, 1 think, in com- 
 petition with a North of England concern, and the difference in our 
 bids was just 15 per cent. 
 
 MATERIAL AND LABOR. 
 
 Representative McDermott: What is the percentage of cost of 
 material and labor in the building of a ship ? 
 
 Mr. Wood. It depends quite largely on the type of ship. Taking 
 a freight ship, with which I am more familiar than other types, at the 
 present time the material would be about 55 per cent and labor about 
 45 per cent. 
 
 Representative McDermott. The average difference in cost between 
 a ship built on the Clyde and one here is about 45 per cent, according 
 to your sttitement. It costs 45 per cent more to build a ship here than 
 on the Clyde. I refer to a ship of the kind of which you speak. 
 
 Mr. Wood. That would represent the average over a series of years. 
 
 Representative McDermott. The difference would be equivalent to 
 the entire cost of labor. So your proposition is tantamount to this — 
 that the shipbuilder shall supply the materials and the Federal Gov- 
 ernment shall contribute the entire cost of the labor in the building, 
 paying that amount to the ship purchaser? 
 
478 HEARINGS BEFOBE THE MERCHANT MARINE COMMISSION. 
 
 Mr. Wood. Not necessarily. 
 
 Representative McDeemott. You suggested that it be paid to the 
 ship purchaser? 
 
 Mr. Wood. Oh, yes; but I 
 
 Representative MoDebmott. Then, the partnership between the 
 Government and the shipbuilder or the purchaser would be this: That 
 the purchaser should pay the 55 per cent, which represents the cost of 
 material, and the Government should pay as its proportion or contri- 
 bution 45 per cent. As the Government under that proposition would 
 pay for all the labor in the ship, how will future efficiency on the part 
 of labor decrease the cost? The Government is to pay for all the 
 labor, according to your proposition. 
 
 Mr. Wood. My division would be different. 
 
 Representative McDeemott. Will you illustrate where 1 am wrong? 
 
 Mr. Wood. The Government would pay for part of the material 
 and part of the labor. 
 
 Representative McDeemott. But the Government's contribution, or 
 its percentage, is that amount which you say represents the total 
 amount of the labor in the ship. 
 
 Mr. Wood. Yes. 
 . Representative McDeemott. Now, it is entirely immaterial whether 
 in your bookkeeping you divide that and say the Governmeni; pays 20 
 per cent on material and 25 per cent on labor. What you do is to pay 
 for the material. What the Government does is to pay the amount 
 expended for labor. 
 
 Mr. Wood. Yes, sir. 
 
 Representative McDeemott. Now, no increased efficiency on the 
 part of labor is going to wipe out that item of Government expenditure. 
 
 Mr. Wood. I understand your proposition. 
 
 THE case op the MAINE. 
 
 Representative McDeemott. What is the last ship you constructed; 
 what is its name ? 
 
 Mr. Wood. The Maine, a ship of 10,500 tons dead-weight capacity. 
 
 Representative McDeemott. Used in what commerce ? 
 
 Mr. Wood. Built for the North Atlantic. 
 
 Representative McDeemott. How many men were employed in 
 building that ship; how many mechanics were employed? 
 
 Mr. Wood. We employed in the yards 
 
 Representative McDeemott. No; I mean on that ship. 
 
 Mr. Wood. I will have to state it in this way: We employed in the 
 yard at that time about 2, 000 men. Of that number 800 were employed, 
 probably constantly, on the ship. 
 
 Representative McDeemott. What was the cost of the ship, or its 
 purchase price? 
 
 Mr. Wood. 1 will have to call upon Mr. Baker. 
 
 Mr. Bebnaed N. Bakee. I have forgotten. I think a little over a 
 million, was it not? 
 
 Mr. Wood. No, 1 think not. It was eight hundred and some odd 
 thousand dollars. 
 
 Mr. Baker. I was not there at the time, but it was between $800,000 
 and 11,000,000. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 479 
 
 Representative McDeemott. How long were you constructing her? 
 
 Mr. Wood. Two years and a half; but I should add that the time 
 was protracted by a serious accident resulting from a burning of the 
 ways. Under ordinary conditions it would require about two years. 
 
 Repi'esentative McDeemott. Were 800 men employed all the time 
 on that ship ? Does it take 800 men two years to build a ship of that 
 kind? 
 
 Mr. Wood. In that neighborhood. 
 
 Representative McDeemott. Is that the average? 
 
 Mr. Wood. On the average. You understand at times the number 
 of men is very greatly increased. The niunber of men is not limited 
 to those working on the hull, but includes the men scattered through 
 the machine shops and all parts of the shipyard. 
 
 Representative McDeemott. Will you furnish the Commission with 
 a statement of the wages paid on account of that ship? 
 
 Mr. Wood. Yes, sir; with pleasure. 
 
 Representative McDeemott. Taking 800 as the average number of 
 men employed, what would it have cost to have obtained such a ship 
 on the Clyde? 
 
 Mr. Wood. I can not answer that definitely, but I think some gen- 
 tleman here will be able to do so. 
 
 Representative McDeemott. Fifty per cent less ? 
 
 Mr. Wood. I do not think so. I should say nearer 40 per cent less. 
 
 Representative McDeemott. That would be $320,000 less? 
 
 Mr. Wood. No; I hardly think the difference would be so great as 
 that. The difference would be 40 per cent less. It is sometimes con- 
 fusing. Taking the American price as the standard, I should say 
 about 30 per cent less. 
 
 Representative McDeemott. $240,000? 
 
 Mr. Wood. That is my estimate only. I have no means of making 
 a definite comparison. 
 
 Representative McDeemott. I want to get, if I can, a specific prop- 
 osition. Under your statement of the relative items of material and 
 labor, the subsidy which you would ask from the Government would 
 be a contribution of $240,000 toward the pay roll for wages in the 
 construction of that ship. That is what you would ask of the Gov- 
 ernment? 
 
 Mr. Wood. Yes, sir. 
 
 Representative McDeemott. That would result in the employment 
 of 800 men for two years. So, in order to employ 800 men for two 
 years in a shipyard you would ask the people of the country to con- 
 tribute $240,000? 
 
 THE SHIPYAED A FOCUS. 
 
 Representative Minoe. What are you going to do with the fellows 
 up in the woods and in the mines? It is not the labor here alone. 
 
 Mr. Wood. You must remember that the work in a shipyard is a 
 focus. It represents work going on in a great many different indus- 
 tries and in a great many different sections of the country. 
 
 Representative McDeemott. You are speaking as to the policy. I 
 am speaking as to the figures. In order to employ 800 men in your ship- 
 yard in the construction of this single ship, the Federal Government 
 
480 hbarhntgs befoke the merchant marine commission. 
 
 would, under your proposition, have to contribute $240,000 towai 
 their two years' wages ? . -i 
 
 Mr. Wood. Equalizing the cost of that ship with what a similar 
 yhip could be built for on the other side. . ,, . 
 
 Representative McDekmott. How many shipyards are there in tnis 
 country? <■ o 
 
 Mr. "Wood. Do you mean capable of building large ships ^ 
 
 Representative McDekmott. For the trans-Atlantic tramc. 
 
 Mr. Wood. About seven. 
 
 Representative McDekmott. Are they all busy? 
 
 Mr. Wood. They are nearly all destitute of work, and 1 am certain 
 that in none of them is there any work for the foreign trade. 
 
 Representative McDekmott. None whatever ? 
 
 Mr. Wood. No. 
 
 STATEMENT OF JAMES C. GORMAN. 
 
 James C. Gorman appeared before the Commission. 
 
 The Chairman. Mr. Gorman, will you please state to the Commis- 
 sion in what business you are engaged ? 
 
 Mr. Gorman. In the steamship business. 
 
 The Chairman. The Commission will be glad to hear you, Mr. 
 Gorman. 
 
 Representative Minor. American steamships? 
 
 Mr. Gorman. I can not say it is in the American steamship business, 
 because we have British vessels as well as American. It is, however, 
 in the steamship business between America and foreign countries. In 
 other words, I am employed by the Atlantic Transport Company, of 
 Baltimore. 
 
 The Chairman. Have you been manager of that company ? 
 
 Mr. Gorman. Yes; the Baltimore manager. 
 
 I have prepared a statement which I thought would be of interest 
 to the Commission, showing the actual cost of a British-built vessel 
 as well as the cost of an American-built vessel. 
 
 The American ship was built at Sparrow's Point, Baltimore, and was 
 completed in the year 1903. The British ship was built at Belfast, 
 Ireland, by the celebrated builders, Messrs. Harland & WolflF, and I 
 think it is safe to say that it can not be inferred that cheapness was 
 considered at all in the construction of the British vessel. In fact, 
 Mr. B. N. Baker, in whose service I have been for a great many years, 
 was never known, so far as I know, to buy or build a cheap ship. 
 
 thirty-two per cent more. 
 
 The statement shows that the American vessel cost per net t«n 
 register $190.90, and the British vessel cost $144.70. 
 
 I should like you to please bear in mind that the British vessel was 
 constructed in 1898. That means that the custom house papers were 
 issued for her in 1898, and naturally it is fair to presume that the 
 construction of the ship was begun prior to that time. I should 
 think in all fairness it would be correct to assume that th? contract 
 
HEAKING8 BEFORE THE MERCHANT MARINE COMMISSION. 481 
 
 was made in 1897. In the same manner you should consider the 
 American ship. Although completed in 1903, 1 believe she was begun 
 in 1901. 
 
 The cost which I have given you does not take into account the dif- 
 ference in the values of the material which entered into the construc- 
 tion of these two vessels in the periods named. Leaving that out for 
 a moment, 1 find that my figures show that the American ship cost 32 
 per cent more than the British ship. 
 
 From the information which I have been able to gather, the cost of 
 steel at the time the British vessel was constructed was about 15 shil- 
 lings per ton less than at the time the American vessel was constructed. 
 Hence the proportion is altered, and I figure therefore that in the 
 comparison of the cost of those two steamers the British ship cost 29 
 per cent less than the American did, taking into consideration the 
 relative values of steel at the different periods. But beyond that there 
 is somewhat an element of uncertainty, as you gentlemen probably will 
 readily understand that we mercantile people do not go around armed 
 with statistics, nor do we keep them always on tap. We have to get 
 this information as required, and I have given you the best informa- 
 tion I have as to the cost of steel at the time. 
 
 The statement referred to is as follows: 
 
 Coat, Michigan and Maine. 
 
 Steamer. 
 
 Year 
 when 
 built. 
 
 Built by— 
 
 Net regis- 
 tered 
 tonnage. 
 
 Cost. 
 
 
 1898 
 1903 
 
 Harland & Wolf, Belfast 
 
 6,118 
 6,077 
 
 $885,289.50 
 
 
 Maryland Steel Co United States 
 
 985,983.15 
 
 
 
 
 Average cost of the steamship Maine, 5,077 net registered tonnage, 
 $969,205.12. Cost per net ton, $190.90. 
 
 Steamship Michigan, average cost per net ton, $144.70. 
 
 American ship cost $46.20 per net ton more than British ship, or 
 say 32 per cent more. 
 
 The relative cost of steel during the different periods of construction 
 must be considered. The most reliable imformation at hand indicates 
 that at time of construction of a British steamer, cost of steel was 
 about $3.60 per ton cheaper than when the American ship was built, 
 thus reducing the percentage of cost of American ship over the British 
 one to 29 per cent. 
 
 Mr. GoEMAN. I have here another statement which may be interest- 
 ing to you. It is a statement of the comparative cost of wages per 
 month for those same vessels. It shows that on the American ship 
 the cost of wages is 18 per cent more than on the English ship. 
 
 Representative McDermott. The wages of operation or construc- 
 tion ? 
 
 Mr. Gorman. The wages of the crew. 
 
 3a— 04- 
 
 -31 
 
482 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 The statement is as fpllows: 
 
 Comparative statement of wages of an American and an English ship — Rate of wages 
 
 per month. 
 
 English flag. 
 
 Master 
 
 Bonus 
 
 First ofiScer 
 
 Second officer 
 
 Third officer 
 
 Boatswain 
 
 Boatswain's mate 
 
 Carpenter 
 
 Carpenter's mate 
 
 Four quartermasters (each) . 
 Eight sailors, A. B. (each) . . . 
 
 Two ordinary sailors 
 
 Chief steward 
 
 Second steward 
 
 Assistant steward 
 
 Engineer 
 
 Cattlemen's steward 
 
 Chief cook 
 
 Assistant cook 
 
 Chief engineer 
 
 Bonus 
 
 First assistant engineer 
 
 Second assistant engineer. . . 
 Third assistant engmeer — 
 Fourth assistant engineer. . . 
 
 Fifth assistant engineer 
 
 First donkeyman 
 
 Donkeyman's mate 
 
 Engineer storekeeper 
 
 3 oilers (each) ' 
 
 12 firemen (each) 
 
 6 coal passers (each) 
 
 23 
 5 
 
 Total. 
 Total men . 
 
 11 10 
 10 
 
 14 
 10 
 
 8. d. 
 
 17 3 
 
 1 1 
 
 9 2 
 
 6 11 
 
 5 9 
 
 10 
 
 15 
 
 6 
 6 
 6 
 (5)5 
 5 
 4 
 
 15 
 
 10 
 
 10 
 
 10 
 
 3 10 
 
 61 
 
 Wages under the American flag 18 per cent more than under the 
 English flag. 
 
 CREWS SHIPPED ABROAD. 
 
 Mr. Gorman. Now, this is not really a fair statement for the reason 
 that instead of engaging our crews in America for the American ships 
 which, I was going to say, we unfortunately own, we shipped them on 
 the other side. We ship and discharge in England; and it is for the 
 very purpose of economy which we would all practice in our individual 
 business. 
 
 Senator Mallort. Let me ask you a question here. Do I under- 
 stand you to say that you shipped your crew in England for the round 
 trip — coming to this country and going back to England — and dis- 
 charged them in England? 
 
 Mr. Gorman. Quite true. 
 
 Senator Mallort. You did that? 
 
 Mr. Gorman. Yes. 
 
 The Chairman. We were told yesterday that under the British 
 laws that was not allowable; that the crew had to be discharged at the 
 American port. 
 
 Mr. Gorman. I am only stating facts to you. 
 
 Senator Malloet. 1 do not question the fact. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 483 
 
 Mr. Gorman. I understand. I am merely trying to emphasize the 
 statement. 
 
 Senator Mallobt. A directly conflicting statement was made by an 
 old sea captain yesterday, and I could not help noticing that fact. I 
 know you are right, so far as my knowledge goes. 
 
 Mr. Gorman. I am speaking of the operation of four steamers — the 
 Maine, the Missowi, the Massachusetts, and the Mississippi — con- 
 structed for the Atlantic Transport Company, two of them by the New 
 York Shipbuilding Company and the others at Sparrow's Point. 
 
 Representative McDekmott. What is your percentage of difference? 
 
 Mr. Gorman. Eighteen per cent. 
 
 Representative McDermott. You ship a crew in the same port that 
 an Englishman does, you go amongst the same labor, you select sailors, 
 and the difference in cost, you say, is 18 per cent. Is that in wages 'i 
 
 Mr. Gorman. It is in wages. This statement covers wages and 
 nothing more. 
 
 Representative McDermott. How do you account for the fact that 
 you can not ship a crew as to wages as cheaply as can the captain of a 
 ship flying the English flag ? 
 
 OFFICERS MUST BE CITIZENS. 
 
 Mr. Gorman. In the first place, you must bear in mind that under 
 the American law the officers of the vessel must be citizens of the 
 United States, either native born or naturalized; and you must bear 
 in mind also that the decadence of the American merchant marine 
 furnishes the operators of vessels with a scant source of supply from 
 which to draw our men. 
 
 Representative McDermott. But you draw from Liverpool, from 
 the same supply that the British do ? 
 
 Mr. Gorman. That applies only to firemen and seamen. The 
 American law requires that the officers shall be American citizens. 
 
 Representative McDermott. As to the firemen and seamen, are the 
 wages the same? 
 
 Mr. Gorman. The wages would be the same. 
 
 Representative McDermott. The wages are the same ? 
 
 Mr. Gorman. The wages would be the same. I am speaking now 
 of the time when we ship abroad. 
 
 Representative McDermott. When you ship abroad ? It has been 
 stated several times, not before this Commission, or if so, while I was 
 absent, but several times before the House committee, that if you 
 desire to ship sailors abroad for service under the American flag you 
 can not do it at the same wages at which they can be obtained under 
 the British flag. The proposition is in defiance of all ideas of the law 
 of supply and/iemand. 
 
 Mr. Gorman. This statement which I have here calls for a certain 
 number of firemen on an American steamer. We pay £5 for them, 
 and for the same number on the English steamer we pay the same 
 amount. 
 
 Representative McDermott. And the same as to sailors ? 
 
 Mr. Gorman. Yes, sir. 
 
 I should like to remark, in connection with this matter, that I have 
 not brought this statement here with the view that you would attempt 
 to take up the question of wages, for the reason that it is one which 
 
484 HEARINGS BEFOKB THE MERCHANT MARINE COMMISSION. 
 
 will regulate itself. We might find the same discrepancy in waps 
 between an English ship and a German, or we might go a little further 
 and find somewhat of a discrepancy between a German and a Nor- 
 wegian ship, and the reason for it can be found, I think, in the sugges- 
 tion I made to you just now, of the fewer number of people in certain 
 countries who are engaged in certain industries and the fewer number 
 you necessarily have to draw from for your supply, thereby increasing 
 the rate. 
 
 Eepresentative McDermott. As a matter of fact there is consider- 
 able difference in fitting out a ship as between Baltimore and New York ? 
 
 Mr. Gorman. As to supplies? 
 
 Representative McDermott. No; as to the wages of sailors. 
 
 Mr. Gorman. Oh, yes. Those things are not fixed. They are 
 movable. 
 
 The Chairman. But the fact remains, Mr. Gorman, that unless our 
 navigation laws are changed we must always pay more in wages to the 
 officers of American ships, for the reason that they have to be Ameri- 
 can citizens and their wages are higher than those of foreigners. 
 
 Mr. Gorman. If you will pardon me, I am a firm believer in the 
 ability of the Americans to compete with any nationality on the face of 
 the earth. 
 
 The Chairman. Yes; but 
 
 SUPPLY and demand AS TO SEAMEN. 
 
 Mr. Gorman. One moment, if you will pardon me. I believe that 
 when the merchant marine is built up the question of the difference in 
 wages will be a mere bagatelle. It will right itself, and it will do so 
 by an increase in the number of ships and the number of people open 
 for employment. In other words, the law of supply and demand will 
 regulate it. 
 
 Senator Mallort. What do you mean by " built up?" 
 
 Mr. Gorman. I do not understand you. 
 
 Senator Mallory. You said when the merchant marine is " built 
 up." When would you say it was built up? 
 
 Mr. Gorman. Suppose you let me substitute for the words "built 
 up" the word " increased?" 
 
 Senator Mallory. To what extents 
 
 Mr. Gorman. To an extent that will supply a sufficiency of officers 
 and seamen for the requirements of commerce. I think jou will recog- 
 nize that if j'ou were to start out to-day to find American sailors for our 
 American ships there would be very few of them to-day in any port. 
 We can not find them. The sailors are made up of all nationalities. 
 
 Senator Mallory. We would not be able to give masters and mates 
 to the ships necessary to transport our products to-day. That we 
 would not be able to give them masters I have no question at all. 
 But what do you think would be a sufficient increase in our merchant 
 marine to enable us to do away with assistance from the United States 
 Government and to let the vessels run on their own bottoms, so far as 
 the question of wages is concerned; 50 per cent or 100 per cent 
 increase? 
 
 Mr. Gorman. I think I stated that I believed the question of wages 
 is one that would regulate itself. 
 
 Senator Mallory. By increasing the number of ships? 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 485 
 
 Mr. Gorman. Yes. Just as soon as Americans can find it profitable 
 to invest their money in ships I believe the way will open for an equali- 
 zation of the matter of wages. 
 
 The Chairman. Do you think the wages of American officers should 
 be lowered, or that the wages of officers on foreign ships should be 
 increased? How are you going to equalize it? The testimony in New 
 York and Philadelphia, and it stood uncontradicted, was that a captain 
 of an American vessel, for instance (and our laws require that he be 
 an American citizen), would get a hundred and fifty dollars a month 
 and an Englishman or a German would get, say, a hundred dollars a 
 month. Under existing conditions does not that difference exist, and 
 must it not necessarily exist for the time being, and hence there is an 
 increased cost of navigating an American boat? 
 . Mr. Gorman. Undoubtedly. 
 
 Representative McDermott. I understood you to say that there are 
 not enough American citizens to-day engaged in the merchant marine 
 to allow the application of the law of supply and demand, but that if 
 the number grows by reason of the demand created by subsidy or 
 otherwise, we will have a sufficient number to apply the law of supply 
 and demand to, and, therefore, you will come to a natural regulation 
 of wages. 
 
 Mr. Gorman. That is my opinion. 
 
 STATEMENT OF C. MORTON STEWART, JR. 
 
 C. Morton Stewart, jr., appeared before the Commission. 
 
 The Chairman. Are you engaged In the business of shipping? 
 
 Mr. Stewart. Yes, sir. 
 
 The Chairman. Make your statement to the Commission in your 
 own way, Mr. Stewart. 
 
 Mr Stewart. Senators and Representatives, I have not come pre- 
 pared to make any address or statement on this question. I was 
 advised only a couple of days ago that we were to have this honor, 
 and to my mind the question is so complex and reaches so far back 
 that it would have been impossible for me to have prepared myself in 
 a way which I think fitting to express to j'ou any thought I may have. 
 
 Since I have been sitting here I have been trying to put my thoughts 
 into words, but I found that those words changed so often by the 
 complex character of this matter that it is difficult for me to formu- 
 late my views clearly. 
 
 The fall of the merchant marine of this country can not be attrib- 
 uted, in my opinion, to any one cause. It was gradual at first and 
 precipitate toward the last, showing that it was so weak it could not 
 stand up. How to encourage it, how to start it, how to keep it run- 
 ning, I understand, are the practical questions that confront this 
 whole nation. 
 
 The Chairman. I understand you are connected with a firm or 
 belong to a family which was engaged in sailing the clipper ships of 
 the former period? 
 
 Mr. Stewart. Yes, sir. I did not intend to go into those personal 
 reminiscences. Our firm have been sailing vessels from 1840 until 
 now— nearly three-quarters of a century. The conditions that rule 
 my ownership of boats or my running of them are so purely personal 
 and this is such a broad question that I thought it ought to be treated 
 from the latter standpoint. 
 
486 HEARINGS BEE-ORE THE MERCHANT MARINE COMMISSION. 
 
 As a matter of fact, to state my personal experience, we built a 
 great many vessels in the period from 1880 to 1890; that is, a great 
 many for us. "We built seven boats. Everything then was high and 
 conditions were hard, but we had a special trade to run them in, and 
 could operate them despite conditions. 
 
 So far as concerns a few minor points in our laws, I could suggest 
 one or two, the elimination of which would be beneficial to me as a 
 shipowner. These, however, are of secondarj'^ importance. But why 
 it is that I do not own more vessels, why it is I am not going to con- 
 tinue to build them and run them, to my mind is very simple. I 
 have to compete in my business of running ships with the world at 
 large. To compete with the " other fellow " I must be able to buy or 
 build my boats as cheaply as he can. 
 
 IN FAVOR OF "free SHIPS." 
 
 Hence the matter of primary importance is free ships, absolutely 
 and unequivocably. I lost a boat two or three years ago. She had 
 cost me $58,000. There was, I suppose, about $20,000 of American 
 patriotism in her and the balance labor and boat. We built her, 
 because we could afford to build her, at a price for which we could 
 have got a very much bigger ship in England. But my father wished 
 an American boat. He had a pride in the flag, and the business was 
 such and the rates of freight such as to justify her being built here. 
 He would build it in this country, whether or no. When that boat 
 was lost she was insured only for a fair valuation, which in nowise 
 permitted her rebuilding; therefore she was eliminated. That made 
 one less. I would have built a vessel in her place if I could have built 
 it to compete with the Italian barks and the French barks that go to 
 Rio and carry Brazilian commerce. I could not; and I did not care 
 to build a boat under the English flag. I am an American citizen, 
 and I want the Stars and Stripes over my boat, or none at all; so I 
 had to resort to chartering a boat. When I needed one, I went and 
 paid for her and got her. 
 
 To encourage me, a young merchant, to own and run vessels, this 
 country would have to permit me to buy them where I can buy them 
 cheapest. I do not want the Government to pay me any money, 
 because I think that at once becomes complex. 
 
 In reference to certain statements presented here, we heard one 
 member of the Commission say that a certain statement was in defi- 
 ance of the law of supply and demand. There are always pros and 
 cons to every question. Wefind one gentleman saying that $10,000,000 
 or $15,000,000 per year for a period of ten years, he thinks, will build 
 up our merchant marine. How is it possible to arrive at it? And if 
 he is correct, how is it possible to convince the country that he is cor- 
 rect? If at the end of the civil war it had been stated that the sum 
 of money paid for pensions would be greater forty years after the 
 close of tlie war than immediately succeeding it, the speaker would 
 have been denounced for making an absurd statement. It would 
 have been said that the old soldiers were bound to die off. But we 
 find that it has increased as we have gone along. 
 
 If this money is to be paid to the purchaser of the boat, or if the 
 bidders are to compete, I may find great difficulty as a purchaser in 
 getting a hearing from the gentlemen who are going to pay it. My 
 personality may not be sufficiently attractive. My reputation as a 
 
HEARINGS BEFOEE THE MERCHANT MARINE COMMISSION. 487 
 
 business man may not be sufficiently good, and the proposition I offered 
 might not measure up to that of some other bidder; and as the 
 amount is limited, I might be sidetracked, and therefore a great deal 
 of young enthusiasm would be, for the time being at least, kept down 
 and would not be permitted to materialize. 
 
 I recognize perfectly well that the conditions are diflicult for gentle- 
 men who own boats now and for the shipbuilders too, but on the other 
 hand we have had reiterated statements that this country can pro- 
 duce as cheaply as any other. For instance, one gentleman stated 
 this morning that a celebrated English shipbuilder had said to him 
 that the height of his ambition, if he had ten years longer to live, 
 was to come to this country and build ships. 
 
 It is impossible to convince me that we can not, under normal con- 
 ditions, build as cheaply as anybody else. Of course we will not be 
 able to do it at the outset, because this trade is in an abnormal con- 
 dition. 
 
 A COMPLEX PROBLEM. 
 
 I think you would make it more complex by legislative action. I 
 think a great deal of trouble has come from legislative action. I 
 think the tariff has a great deal to do with it. The problem is so 
 complex that if we try to deal with it by subsidies or by assistance of 
 that character we would get into a maze of obstacles and difficulties, 
 with respect to which no twelve men could ever agree. It would be 
 impossible. So the broad fact is that if we want to get boats, we 
 should be able to get them where we can get them cheapest. If I 
 have to compete with a man, I must compete with him, and all I ask 
 is even terms. 
 
 To-day, if I could buy a boat in England and sail her under the 
 American flag, I would own one; and I will agree to own one and to 
 sail her in sixty days from this time. 
 
 The Brazilian trade offers splendid opportunities for the distribu- 
 tion of freight all through the West. If I got one boat, I would have 
 two or three in a short time. As a matter of fact, I am going to char- 
 ter a steamer, the cheapest I can get, on the best terms, on a strictly 
 competitive business basis. Nobody is going to pay me to do it. I 
 will not get a cent more for carrying freight. I am going to get the 
 best boat and the cheapest boat I can. 1 am going to charter her on 
 the basis on which I should like to build her. 
 
 The Chairman. Quite a number of shipowners in New York testi- 
 fied that if they got the foreign ship free they could not sail her 
 because of the increased cost of operation. 
 
 Senator Mallory. Under existing law. 
 
 The Chairman. Under existing law. 
 
 Mr. Stewart. I was coming to that point. When you come to the 
 cost of maintenance of a boat the question becomes even more com- 
 plex. There are the different seasons of the year; the different scales 
 of values; whether I buy now or buy three or four weeks later. The 
 basis of comparison is hardly fair. Put it on this broad basis: If we 
 want to build up a merchant marine, if that is wise, what better 
 course can we pursue than to copy after those who have the best mer- 
 chant marine? Now, an Englishman can man his boat with anybody 
 he pleases. Why can not I? I would man it, if I could, with Balti- 
 moreans; but I should like to be able to man it with such people as 
 can run that boat for the least* money, and I do not think any sub- 
 sidy will assist me in accomplishing that. It will produce abnormal 
 
488 HEARINGS BEFOBE THE MEBOHANT MARINE COMMISSION. 
 
 conditions. It makes of a legitimate boat an exotic. We can grow 
 orchids in New York if we keep them tinder glass and at a proper 
 temperature by steam, and surpass those grown in Brazil; but when 
 we remove the glass and steam what becomes of the orchids? I think 
 we ought to get down as much as possible to the natural conditions 
 governing this matter. 
 
 Provide that Americans may buy their boats where they please, 
 and then perhaps we oiight to have some inducement to make us go 
 and buy them. But if you say to these gentlemen, "You may buy 
 your boats where you please, in the cheapest possible market," that, 
 especially to an American business man, is of primary importance. 
 
 IN FAVOR OF PREFERENTIAL DUTIES. 
 
 Not having thought of this matter particularly, I am not able to 
 offer a solution ; but I state the real principles which should govern 
 a practical solution of it. You should go to the American and say — 
 not " subsidy" — but " In order that you may get a preference in the 
 hauling business, if you will fly the American flag, we will rebate 
 something of this very great tariff on the goods imported." If a man 
 can go into the business with Brazil and can get machinery out and 
 can not get coffee back, but can get some other commodity, and you 
 say to him, " We will rebate a part of the tariff," he will go into the 
 business, and soon more boats will start, if they are given a slight 
 preference. In that way the Government can pay it out. How? By 
 simply rebating a little of the tariff that ir receives. It does not give 
 it to anybody else. It simply rebates a part of that tariff, and if any- 
 body gets it, I presume the consumer would get it. 
 
 I have not thought this out. It has simply suggested itself to me 
 in reading an article on that line yesterday. That would be a legiti- 
 mate commercial inducement which may be offered to the importing 
 merchants of this entire country to bring cargoes in American vessels. 
 They would say, "I will pick out that boat for the shipment of my 
 goods, because there will be a slight reduction in the tariff." The 
 plan may have a great many weaknesses, but there should be some 
 inducement to start those boats, if we can own them. 
 
 Those are the only points, gentlemen, which have presented them- 
 selves to me. I am ready to run steamers; I am ready to own them; 
 but I will only own them if I can buy them as cheaply as any of my 
 competitors. I have to compete with everybody — tramp steamers and 
 everything else. 
 
 COMMERCE DESTROYERS A DISTINCT CLASS. 
 
 Take the subsidy. You can not build up a merchant marine which 
 is to carry commerce with a view, on twenty-four hours' notice, of 
 converting the vessel into a war vessel or a commerce destroyer. 
 They are two distinct things. If we are going to have a subsidy for 
 that sort of purpose, then we shall have a lot of boats of a distinct 
 type which will not be of real commercial value. They would not 
 build up our commerce. A commerce destroyer must have a speed of 
 20 knots, and if the pursued has a speed of 21 knots the destroyer 
 should have a speed of 25 knots. We want a boat that will run 9 or 
 10 knots — the maximum speed for the minimum amount of fuel. 
 That class of vessels would not be advantageous to our Government, 
 and they would not be available as commerce destroyers. We might 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 489 
 
 have a specific subsidy for a specific class of boats, whose use was 
 contemplated by the Government, and that might stimulate the crea- 
 tion of a certain sort of vessel which the Government might need in 
 times of abnormal conditions. But I am speaking of the broad com- 
 mercial question as applied to merchants in time of peace and com- 
 merce — ^hoAV to get the boat the cheapest and how we can run it, 
 everybody on the same condition. 
 
 Representative Humphrey. If I understand you, you believe in 
 free trade so far as ships are concerned? 
 
 Mr. Stewart. I believe in buying boats in the cheapest market. 
 
 Representative Humphrey. What advantage would it be to this 
 country, in your opinion, if you were to buy ships abroad and then 
 operate them by foreign labor? What advantage would Americans 
 derive from the transaction? 
 
 Mr. Stewart. By having that which this commission is trying to 
 create — a merchant marine. If you want to start a factory in Balti- 
 more or some other enterprising town, it is not the initial cost that 
 redounds to the benefit of the community. Go to any town and you 
 will see "Factory sites free." You can have it; help yourself. That, 
 as I understand it, is to get the factories there. But it is the main- 
 tenance and the growth of that factory in that community which count. 
 
 Representative Humphrey. But, as I understand you, you advo- 
 cate absolutely the reverse of that proposition. You want, instead of 
 having a shipyard in this country, permission to buy your ships abroad. 
 
 Mr. Stewart. Certainly. These towns say, "We will give you a 
 site for your factory free." I want you to permit me as an American 
 citizen, living in Baltimore, to get a boat without any conditions, and 
 to let me operate her from Baltimore. 
 
 Representative Humphrey. What advantage would that be to 
 American labor and to the American public generally? It w®uld 
 benefit you, but where would it benefit anybody except the men who 
 own the ships? 
 
 Mr. Stewart. It would swell the number of American vessels. It 
 would increase the commerce of this country. If I, in Baltimore, 
 own a boat, the maintenance of that boat will be partially here in 
 Baltimore. As soon as I am able to show a set of sailors here that 
 unless they will meet certain competitive conditions they will not be 
 able to get on that boat, they will soon, I think, adapt themselves to 
 it, and if they would not, then, gentlemen, I do not think it is the 
 province of the Government to run me. That is what I mean. Those 
 conditions can not be overcome in five or ten or fifteen years. And 
 what I suggest is perhaps not the quickest way. 
 
 CAN OWN FOREIGN SHIPS NOW. 
 
 Senator Martin. Is not this purely sentimental with you? Could 
 you not do all this now under the English fiag? You can buy a boat 
 in England and put an English crew on her and have all the advan- 
 tages that you think and I think desirable, if you simply operate 
 her under a foreign flag instead of the flag of your country. 
 
 Mr. Stewart. That is true to a great extent, and that is the reason 
 why American citizens 
 
 Senator Martin. Practically it can be done now. It js purely sen- 
 timental with you. 
 
 Mr. Stewart. No, it can not be done. Sentiment is a very definite 
 factor in commerce, and it should be recognized. As a matter of fact. 
 
400 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 whatever you may call it, sentiment or anything else, I am not going 
 to buy a boat in England and sail lier under the English flag. A close 
 investigation of this question would probably reveal some conditions 
 which it is not my privilege to know at the moment, which do not 
 permit that. 
 
 Senator Martin. There are some little hindrances, perhaps, but the 
 Atlantic Transport Company run their vessels under the English flag 
 and have these advantages of which you speak — buying their ships in 
 the cheapest market. 
 
 Mr. Stewart. Their business instinct no doubt told them it was 
 necessary for success. 
 
 Senator Martin. That can be done by any citizen, so far as material 
 and practical business is concerned. If he does not choose to do it, 
 it is because of some sentimental reason. 
 
 Mr. Stewart. No, sir. There are difficulties attached to it. If I 
 want to buy a steamer under such conditions, there are certain diffi- 
 culties in it that are more than merely sentimental. 
 
 Senator Martin. There are some small hindrances, but, so far as I 
 have been able to ascertain, they are not large enough to stand in the 
 way of a business profit. The question in my mind is whether or not, 
 if we make the conditions for an American ship as free as they are 
 for an English ship, the American people would own ships without 
 some further inducement, for they can already do the same busi- 
 ness on all material propositions now. The only difference is a senti- 
 mental one, involved in the question whether a man shall do business 
 under the flag of his own country or the flag of some other country. 
 
 Mr. Stewart. It is just as Mr. Baker stated — commerce will follow 
 the flag. 
 
 Senator Martin. But how will we get the flag on the oceans unless 
 we offer some greater inducement than the freedom of the world's 
 markers? 
 
 A DIFFERENTIAL BENEFIT. 
 
 Mr. Stewart. If you offer an opportunity to American merchants 
 to buy their ships as cheaply as anybody else, and if they feel that 
 they can operate those boats nearly as cheaply as anybody else, and 
 if they feel that by some legitimate legislation — and there is the only 
 place where I think it would be of practical specific advantage — car- 
 goes brought in those bottoms will receive some slight differential 
 benefit, they will engage in the industry. 
 
 Senator Martin. That is the point I was getting at. Of course, the 
 American merchant can buy his ship as cheaply as an Englishman 
 can, and can operate it as cheaply if he chooses to go under the Eng- 
 lish flag. There is only a sentimental difiiculty. It is just the ques- 
 tion as to what flag he will put up. Now, if a Baltimore merchant is 
 not willing to go into the shipping business under those conditions, 
 will you not have to give him some tariff rebate or some other induce- 
 ment to induce him to enter the field? 
 
 Mr. Stewart. You may have to do it. I think it comes in the cost 
 of maintenance. We know it costs more to live here than in other 
 countries, and it is simply owing to the greater cost of everj^ com- 
 modity here. 
 
 Representative McDermott. The boat which is built in England 
 can not be used in the coastwise trade, while the boat you propose to 
 give to the shipping industry could be used in the coastwise trade. 
 
 Mr. Stewart. Yes, sir. And that is one of the objections which 
 exists to the purchase of foreign-built boats. 
 
HEABINGS BEFORE THE MERCHANT MARINE COMMISSION. 491 
 
 NO FOREIGN SHIPS FOR COASTWISE TRADE. 
 
 Senator Martin. I do not think it would be possible to get serious 
 consideration from any number of Americans of any political faith 
 for a proposition to permit foreign-built vessels to enter the coastwise 
 trade. Whether they be right or wrong is a question which it is need- 
 less for me to discuss now; but, looking at it from a purely practical 
 standpoint, the coastwise trade is now a monopoly for American-built 
 ships, and it is going to reniain so as long as any of us present in this 
 room lives. The great problem we are trying to deal with is the 
 ocean-carrying trade — the foreign trade. 
 
 Representative McDermott. I was indicating an advantage which 
 it seemed to me by your questions you were seeking to find in this 
 gentleman's proposition. 
 
 Senator Martin. That the vessels could be used in the coastwise 
 trade under his proposition? 
 
 Representative McDermott. Yes. 
 
 Senator Martin. Yes; I see the point. 
 
 Representative McDermott. His proposition would permit those 
 vessels to be used in the coastwise trade. 
 
 The Chairman. As a matter of necessity, that would wipe o\it our 
 shipyards which are now building ships for the coastwise trade. It 
 would mean the absolute destruction of every shipyard in this 
 country. 
 
 Mr. Stewart. I would not want any remarks of mine to be con- 
 strued as favoring the destruction of any American industry; and I 
 firmly do not believe that it is possible that the United States of 
 America, with its ores and its many physical advantages, its climatic 
 conditions, can not produce and build a vessel as cheaply as anybody 
 else. "We have seen it time and time again, where the conditions 
 forced it, that it was brought about. I believe really and truly thai 
 the decadence of our merchant marine has come from these special 
 conditions — conditions arising from legislation of different kinds. I 
 think it would only increase the evil if you attempt to correct it by 
 additional legislation. 
 
 Senator Martin. You are running boats now? 
 
 Mr. Stewart. Yes, sir. 
 
 Senator Martin. To what ports? 
 
 Mr. Stewart. Between Baltimore and Brazil — between Baltimore 
 and Rio de Janeiro and Santos. 
 
 Senator Martin. What is the character of thosS boats? 
 
 Mr. Stewart. They are sailing vessels — barkentines. 
 
 Senator Martin. Of course, you are getting no aid from the Go^•- 
 ernment at all on those boats? 
 
 Mr. Stewart. No. 
 
 A MAIL-PAY line. 
 
 Senator Martin. Suppose a proposition was made, open to you and 
 to others, to put on between those ports and this some vessels fast 
 enough to carry the mails advantageously, with a liberal compensa- 
 tion for that purpose. What effect would it have on the carrying 
 trade between the given ports? 
 
 Mr. Stewart. The effect would be that I would get built a vessel 
 in order to get the subsidy, just as we see a great many of those sub- 
 sidized boats sailing around on the high seas in order to get the 
 subsidies. 
 
492 HEARINGS BEPOEE THE MBKCHANT MARINE COMMISSION. 
 
 Senator Martin. Where are any such boats sailing now? 
 
 Mr. Stewart. The French boats are doing it to-day. 
 
 Senator Martin. Sailing around on the high seas to get the subsidies? 
 
 Mr. Stewart. Certainly. Some of them absolutely go in ballast at 
 times. Then, again, it would not be profitable for me to build a boat, 
 because the law would be phrased in such form, in all probability, as 
 to give the subsidy to boats of a certain speed. Slow boats are an 
 advantage at certain times. 
 
 Senator Martin. It was testified the other day, I think, that the 
 Ward Line has nineteen boats, only five of which are subsidized, and 
 the latter carry the mail. They are subsidized in the sense of receiv- 
 ing very generous mail pay. 
 
 Mr. Stewart. That is a good governmental purpose. I agree to 
 that. 
 
 Senator Martin. That line operates fourteen other boats, which are 
 slow freight boats, devoted entirely to freight carrying. The oflicers 
 of that line say that but for the subsidies which they get on the five 
 boats they would have gone out of the business. But, getting some 
 compensation for the fast boats, they have used in connection with 
 those fast boats a larger number of slow boats and have built up 
 commerce. 
 
 Mr. Stewart. I do not believe that any merchant will run a boat 
 that does not pay. He would see that the slow ones paid, or he would 
 soon eliminate the ones that did not pay. 
 
 Senator Martin. Might not the slow ones pay in connection with 
 the fast ones and still be unable to pay by themselves? 
 
 Mr. Stewart. No. There is the question of the power and the pull 
 to secure freight contracts a man might possibly have. But, standing 
 on their own bottoms, the fast and slow boats would not pay, in my 
 opinion, simply because operated together. 
 
 Senator Mallory. Let me ask you a question. You are engaged 
 in the trade with Brazil? 
 
 Mr. Stewart. Yes, sir; I own and sail these vessels. 
 
 DIRECT SERVICE TO BRAZIL. 
 
 Senator Mallory. Have you any business with Brazil? 
 
 Mr. Stewart. Yes, sir; we are commission merchants. We execute 
 orders for flour by our boats to Brazil. 
 
 Senator Mallory. Do you think it would be of any benefit and 
 would tend to buiM up the trade of the United States with Brazil if 
 we were to have a fast mail line — not necessarily a very fast mail 
 line — once a week to Rio de Janeiro or Santos, touching at such ports 
 as are on the line? 
 
 Mr. Stewart. I think it would be good to have a mail service, but 
 I merely say, as a practical business question, that if I, as a young 
 merchant, want to build boats for that trade, it is essential that I 
 should have the privilege to buy them where I can get them cheapest. 
 
 Senator Mallory. I understand, but my question has reference to 
 this point: There is a very strong possibility that Congress at its next 
 session or very soon thereafter will undertake to establish some other 
 ocean mail routes. It occurred to me that that is a route which 
 ought to be established, and I merely wanted to know your opinion as 
 a man familiar with the business. 
 
 Mr. Stewart. I think it would be beneficial to the port of Balti- 
 more. The commerce of Brazil at the present moment all goes to New 
 
HEARINGS BEFOBE THE MEKGHANT MARINE COMMISSION. 493 
 
 York, and it is so congested there that the condition is felt all through 
 this country. Mr. McLaughlin, one of the biggest coffee roasters, told 
 me that under certain conditions he would go into this question of 
 importing coffee to Baltimore to build up the trade, and I believe that 
 men like him would. But subsidies, I think, would produce an unnat- 
 ural condition of affairs. I am an American. I would get everything 
 I could right here in Baltimore and buy from Americans. I would 
 give them absolutely the preference, because a few thousand dollars 
 difference in initial cost would soon be wiped off. My interest in my 
 country and my community would induce me to do that. But the 
 idea of my being compelled to do it is abhorrent. Suppose the town 
 having been largely burned down, you wanted it rebuilt, and it could 
 only be rebuilt by Baltimore builders. 
 
 In the same way, if we want to build up the merchant marine, the 
 only inducement necessary is to enable men to go out and buy their 
 boats where they can buy them clieapest and run them under the 
 American flag. I do think, when we come to consider the high-class 
 boats, such as the Atlantic Transport Company and other companies 
 have, which are of definite value to this nation as a government, that 
 those boats are entitled to some such compensation as the Government 
 may think commensurate with the condition of having those boats 
 available. But the boat I would build would be of no earthly use to 
 the United States. If the Government wants boats of a type and 
 stamp that can be of definite national value to the Government, it 
 certainly will cost their owners more money to run them. And for 
 that service the owners should receive and are entitled to a specific 
 compensation. But on the broad question of building up the mer- 
 chant marine of this country, I do not think subsidies will do it. 
 
 Representative McDermott. Let me ask you one question. You 
 have applied certain rules of political economy to the building and 
 management of ships. Those are the ordinary rules by which all 
 business is governed. 
 
 Mr. Stevtaet. Yes, sir. 
 
 WOULD ENGLAND RETALIATE? 
 
 Representative McDermott. All are found under the laws of supply 
 and demand. If it costs $6,000 to produce a ship on the Clyde, and 
 $10,000, because of the increased cost of materials and the higher 
 wages paid, to produce a similar ship in Baltimore, and it is good, 
 sound Government policy for the United States to contribute $4,000 
 in order that the ship may be built here, would it not necessarily be 
 equally sound policy for the English Government to contribute $1,000 
 to the shipyards on the Clyde in order that a new advantage might be 
 obtained by them? 
 
 Mr. Stewart. I should think they would both be equally unsound. 
 
 Representative McDermott. In other words, if there is in the ele- 
 ment of contribution for purposes of equalization from the Treasury 
 of the United States to shipbuilders any sound political proposition, 
 it must be equally applicable on the other side of the water, and a 
 similar contribution on that side would immediately destroy the 
 equality that is created by the contribution on this. 
 
 Mr. Stewart. I could not sustain any such proposition, because we 
 have a very high protective tariff in our country, and the same theory 
 could be applied to it. The physical conditions and the local condi- 
 tions are such that no such argument could be carried out. 
 
494 HEARINGS BEFOBE THE MERCHANT MARINE COMMISSION. 
 
 Representative McDermott. The only argument of advantage on 
 which any subsidy is grounded presents two factors : One, the employ- 
 ment of native seamen or American seamen; the other, the employ- 
 ment of American labor in shipyards. Now, we know that if it is 
 sound policy in this country to subsidize for those purposes, it is neces- 
 sarily sound policy on the other side. Therefore, if it is sound pol- 
 icy — I am not saying what a nation will do or what it will not do — to 
 equalize the cost here with the cost abroad, it would likewise be sound 
 policy for those on the other side to regain the trade by giving an 
 advantage to the shipyards there, would it not? 
 
 Mr. Stewart. Two wrongs do not make a right. I would not be 
 willing to admit as a political economic argument that that is true. 
 I do not believe it is true. 
 
 Representative McDermott. Let me put it in another way. If it 
 costs $10,000 to produce a ship in the United States and $6,000 to 
 produce it on the Clyde, and if, in order to have it produced in the 
 United States, it is necessary — this is hypothetical, you recollect 
 
 Mr. Stewart. Yes. 
 
 Representative McDermott. And if to have it produced in the 
 United States it is necessary to contribute the difference between the 
 respective costs of production, then the equality thus established 
 would be immediately destroyed by a contribution by the English 
 Government, equal to 25 per cent of our contribution, to the ship- 
 builder on the Clyde? 
 
 Mr. Stewart. It is the same sort of reasoning which, in political 
 economy, not at all applying it to this discussion, is known as the 
 argumentum ad absurdum. On that principle we would all keep on 
 paying money 
 
 Representative McDermott. I am not saying that England would 
 do it. 
 
 Mr. Stewart. No. What you mean to say is that we would make 
 ourselves vulnerable to such action. 
 
 Representative McDermott. The reductio ad absurdum does not 
 exist in the proposition, for I am assuming in the premises that it is 
 good policy on the part of this Government to pay an amount that 
 would equalize the difference. If it is good policy on the part of this 
 Government to contribute, of necessity it would be equally good policy 
 on the part of the English Government to make a contribution to her 
 builders in order that the former state of affairs should be reinstated. 
 
 Mr. Stewart. Exactly. 
 
 Representative McDermott. And if it is good government policy 
 it would be followed there as well as here. 
 
 Mr. Stewart. I unierstand your position. 
 
 Representative McDermott. And I am assuming that it is good 
 policy. 
 
 Mr. Stewart. I understand. 
 
 I believe in American citizens buying their boats free. In the 
 maintenance of those boats I do not ask for any subsidy; I simply ask 
 that I may be enabled to run them and operate them as the citizens 
 or subjects of other countries do. We do not want class legislation 
 for The shipping business. I do not ask the Government for class 
 legislation for my benefit as a flour merchant. 
 
 better regulation of sailors. 
 
 One of my clerks in the office made some notes with respect to exist- 
 ing laws which the Congress has passed to try to benefit sailors. As 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 495 
 
 an instance, according to our laws, men may sign the articles; they 
 may get on a sailing vessel; they look around and find it is a pleasant 
 day, and they want to spend another day in Baltimore, and they can get 
 off and leave that boat with the tug at her side, with a favorable wind 
 for the boat to sail, and go ashore, and there is not the slightest pen- 
 alty. In England those men would be put in prison at once. Why 
 does not the Federal Government legislate to remedy that? We are 
 not going to maltreat the sailors. The courts of justice will protect 
 them. 
 
 Representative McDeemott. Look at the history of shipping in 
 the last century, the movements in Parliament, the great ship reform 
 movements. Do they not show that if left to themselves, without any 
 regulation as to the seaworthiness of the ships and the food to be 
 given the sailors, the treatment of the sailors is such that it is posi- 
 tively repulsive to read about it? The unprotected condition of the 
 sailors demanded those laws. One of the greatest movements in 
 English humanity Was in order to protect them. 
 
 Mr, Stewart. Of the laws which exist, there is one which protects 
 American sailors, after signing the articles, from any penalty if they 
 refuse to go on board. That is a practical question. 
 
 Senator Martin. It would be very hard to reconcile any different 
 state of the law with that freedom which you want in your own busi- 
 ness. Why should men be subjected to a penalty for violating a civil 
 contract? If you violate your contract with a merchant at Rio 
 
 Mr. Stewart. I am liable for damages. 
 
 Senator Martin. That is true, but you are not liable to be put in 
 jail. 
 
 Mr. Stewart. Do not put them in jail, then; but have an officer 
 thei'e to make them go. 
 
 Senator Martin. Can an officer compel you to comply with your 
 contract? 
 
 Mr. Stewart. Certainly he can. 
 
 Senator Martin. Only in the way of the payment of damages. 
 
 Mr. Stewart. In damages. Does anyone have to bring a suit in 
 equity in order to have me arrested by a policeman? He has the 
 power to take me and put me in a certain place. 
 
 Senator Martin. There is no law 
 
 Mr. Stewart. There can be a law. 
 
 Senator Martin. There is no law which makes it a criminal offense 
 for you to violate a civil contract. I grant you the sailor is a trou- 
 blesome individual, but I do not see how we can make the violation 
 of a civil contract a criminal offense. 
 
 Mr. Stewart. This shows that I have not, as I told you, given the 
 matter sufficient thought. I do not want it made a criminal offense. 
 All I want is that if I have my boat at the wharf, my crew signed 
 and shipped, and the tugboat there, and a favorable wind, the United 
 States Government shall not say specifically, as it does, going out of 
 its way to say it: "Gentlemen, you have a right to go away and leave 
 this ship, without any penalty." I do not want it made a criminal 
 offense, but keep them on the boat. 
 
 THE LAW ABROAD. 
 
 Senator Martin. How are you going to keep them on the boat? 
 Are you going, by the exercise of physical violence, to compel a man 
 to comply with a civil contract? 
 
 Mr. Stewart. Yes, sir. 
 
496 HEARINGS BEFORE THE MEBCHANT MARINE COMMISSION. 
 
 Senator Martin. That would be a most extraordinary proposition, 
 
 Mr. Stewart. It is done in France and Germany and England, 
 
 Senator Martin. In imperial countries a great many things are 
 done that we would not tolerate here. 
 
 Mr. Stewart. I have lived in England and France and Germany, 
 and I have heard the talk of the bad condition the men are in, but I 
 have never witnessed it in my life. 
 
 Senator Martin. It might be enforced by affixing a fine 
 
 Mr. Stewart. You would never collect it. 
 
 Senator Martin. By affixing a fine on anybody who interferes with 
 sailors who have been shipped. 
 
 Mr. Stewart. The English laws compel seamen to go aboard after 
 signing. The American laws allow seamen to do just as they please. 
 If a seaman after signing makes np his mind not to join the vessel, 
 and to walk off, he can do so. 
 
 Representative McDermott. I think the American laws should pro- 
 vide the same thing. 
 
 Mr. Stewart. I do. 
 
 Representative McDermott. I fully agree with you. I think there 
 should be a penalty. The sailors should not be allowed to desert the 
 ship. 
 
 Mr. Stewart. I say let me run my ship. I will give the sailors 
 lime juice and sugar. It does not amount to anything. But at pres- 
 ent I have to spend a week to get a crew. I have to resort to the most 
 illegitimate means to obtain them. 
 
 Representative McDermott. Then you ought to be punished. 
 
 Mr. Stewart. I am willing to be punished. I have to go to the 
 boarding-house masters and say, " Keep these men there for me," and 
 that means expense. 
 
 Then on the question of allotments, not letting a man draw wages, 
 I think they ought to have that privilege. I get around it by loaning 
 my money, and if they do not pay me I am the loser. 
 
 Gentlemen, I wish to apologize for talking so much. 
 
 STATEMENT OF HARRY SCHMIDT. 
 
 The Chairman. One phase of our inquiry relates to the existing 
 laws, and we are asked to ascertain whether or not any "change or 
 changes should be made in existing laws relating to the treatment, 
 comfort, and safety of seamen, in order to make more attractive the 
 seafaring calling of the American merchant service." 
 
 The Chair understands that some representatives of the seamen are 
 present, and the Commission will be glad to hear from any seaman 
 who desires to be heard. 
 
 Harry Schmidt appeared besfore the Commission. 
 
 The Chairman. Are you an American citizen? 
 
 Mr. Schmidt. Yes, sir. '' 
 
 The Chairman. When-e were you born? 
 
 Mr. Schmidt. In Germany. 
 
 The Chairman. Are you in the service at the present time ? 
 
 Mr. Schmidt. I am not in the service. I just left a vessel about 
 three weeks ago. 
 
 The Chairman. What vessel ? 
 
 Mr. Schmidt. The Ada F. Browii. \ 
 
HEAEING8 BEFORE THE MERCHANT MARINE COMMISSION. 497 
 
 The Chairman. Have you been in other service than that of the 
 United States? 
 
 Mr. Schmidt. Yes, sir; I have been a little while in German vessels 
 and in English vessels. 
 
 The Chairman. What have you to say with reference to the life of 
 the seamen? 
 
 more living space, more water. 
 
 Mr. Schmidt. I should like to say that there is insufficient space for 
 us to live on board American vessels now. This is true not only of 
 American vessels but of every vessel 1 have been on. The American 
 law allows us 72 cubic feet of space to live in. That is not very much. 
 They used to allow 6 feet long, 6 feet high, 2 feet broad. Another 
 thing, there is no ventilation required. If there is any kind of bad 
 weather we are just locked up. We can not move. We have been 
 trying to get the shipowners to give us better quarters, but they will 
 not do it by themselves. 
 
 Some shipowners have gone to work and built a mess room for us to 
 eat in. You must understand the ordinary forecastle is all one place. 
 You have to sleep in there, wash in there, keep your clothes in there, 
 and eat in there. As a matter of fact, you come out of this place you 
 sleep in and there is your grub. There are no accommodations to wash 
 yourself or take a bath. You live like hogs — everything in one pen. 
 
 Furthermore, the law allows us only one gallon of water a day for 
 everything. That is to keep yourself clean, to keep your clothes 
 clean, drinking water, and water for cooking your food. That is not 
 very much. After drinking and washing there is not much left for 
 you to wash clothes with. We would like to have, if possible, a law 
 giving us a little better quarters and giving us a little more water. 
 The food we get at the present time we are satisfied with, especially in 
 the coasting trade. In the deep-water trade the food is sufficient. 
 
 Furthermore, gentlemen, I should like to say that if the seaman 
 goes out of port in the foreign trade he gets advance pay. There was 
 law passed in Congress, if I am correct, a couple of years ago to stop 
 this, and at the same time it did not stop it altogether as it should 
 have done, because a seaman, when he gets paid off, coming out from 
 the foreign trade, has twelve to fourteen months' pay coming to him, 
 and it amounts to over f 200. Inside of fourteen days he may ship 
 again. Why does he want to get |13 or $14 dollars advance ? I do 
 not see what he wants it for. R simply opens the "way for crimps to 
 come in and get the money. 
 
 There are shipowners in Baltimore who employ men who are not 
 men enough to do straight business, who intoxicate a man and put 
 him aboard a vessel. That is what they do in the city of Baltimore, 
 and shipowners employ men to do this work because they can get the 
 men in that way a couple of dollars cheaper. We can not do anything. 
 We tried to remedy it. It is no use. 
 
 Men carry sailors from foreign vessels coming into this port and 
 put them aboard American vessels. 1 can prove it. A vessel came 
 in — 1 do not want to mention the name — a German vessel, and nine men 
 were stolen. Those men were used to man the Maine. That is not 
 right. 
 
 Senator Mallort, What is your present occupation? 
 
 3a— 04 32 
 
498 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Mr Schmidt. I used to be second mate on the ^wwti. 
 
 Spnator Malloet. What are you doing now! _ 
 
 Mr Schmidt. I was looking for work. I am gomg to sea again 
 as soon as I can get some. 
 
 Senator Mallobt. Are you domg anythmg now« 
 
 Mr. Schmidt. No, sir; not now. x, . ,. 
 
 Senator Mali.oky. You say that nine men were stolen trom a ship, 
 and that it was a German ship? 
 
 Mr. Schmidt. A German ship. 
 
 Senator Mali^ory. Do you know the men-^ _ 
 
 Mr. Schmidt. I can come pretty near proving it. 
 
 Senator Malloey. I do not want to ask the man's name. What 
 was the occupation of the man who did it? 
 
 WORK OF THE " RUNNERS." 
 
 Mr. Schmidt. He was a boarding-house runner. The boarding 
 master w:is too smart, and he employed somebody else to do the work. 
 
 Senator Mallory. The boarding-house master is the boarding-house 
 keeper? 
 
 Mr. Schmidt. Yes, sir. 
 
 Senator Mallory. He has a runner? 
 
 Mr. Schmidt. Yes, sir. 
 
 Senator Mallory. That runner goes aboard ships to get crews to 
 board at the boarding master's? 
 
 Mr. Schmidt. Yes, sir. 
 
 Senator Mallory. And through that runner, he ships his crew? 
 
 Mr. Schmidt. Yes, sir; for an American vessel, just for the sake of 
 the advance. 
 
 Senator Mallory. Do you know whether any bounty is paid on 
 coastwise voyages to the seamen or to the boarding-house master by 
 captains ? The law forbids their giving any advance wages. 
 
 Mr. Schmidt. I will tell you of a case. 
 
 Senator Mallory. You need not tell me of any specific case. Do 
 you know whether such a thing is ever done? 
 
 Mr. Schmidt. There is a man in the city of Baltimore — 1 can go 
 and sign on a vessel to-day — and I can go up to the man who is a 
 shipping master and get $10 or $15 worth of clothes off him and simply 
 send the bill to the captain and the captain will pay the bill. I think 
 that amounts to the same thing. 
 
 Senator Mallory. What I want to know is whether when the cap- 
 tain does pay the bill he deducts it from your wages ? 
 Mr. Schmidt. Yes, sir. 
 
 Senator Mallory. Do you know that to be true ? 
 Mr. Schmidt. Yes, sir, 
 
 hard usage on DEEP-SEA SHIPS, 
 
 Senator Mallory. How do you think the condition of American 
 seamen in the foreign trade compares with that of the British and Ger- 
 man seamen ? I believe you said you have sailed on British and Ger- 
 man ships? 
 
 Mr. Schmidt. Yes, sir; before I came here. 
 
HEABING8 BEFORE THE MERCHANT MARINE COMMISSION. 499 
 
 Senator Mallory. How do theii- conditions compare relatively on 
 American, British, and German ships? Are they as well treated or 
 better treated or how? 
 
 Mr. Schmidt. As a matter of fact, in the deep-water trade the Amer- 
 ican seaman is treated the worst. 
 
 Senator Mallory. The worst? 
 
 Mr. ScMiDT. Yes; they are treated the worst of any nation. 
 
 Senator Mallory. In what respect? 
 
 Mr. Schmidt. Because on many ships the men work from sunrise 
 to sunset. Seamen on board vessels work on four-hour watches. In 
 the afternoon or even the first dogwatch you would not get a minute 
 below, and there is no law to stop it. 
 
 Senator Mallory. Is not that the case on German and British ships ? 
 
 Mr. Schmidt. No, sir; not on German ships. 
 
 Senator Mallory. Suppose there is a squall coming on? 
 
 Mr. Schmidt. That is necessary work. This is not necessary work. 
 It is all kinds of work, even to keep you up scrubbing the decks, on 
 the American ships I have been on. 
 
 Senator Mallory. They employ the American sailor too much; 
 keep him going too much? 
 
 Mr. Schmidt. Yes, sir. 
 
 Senator Mallory. Is there any other ground of complaint? 
 
 Mr. Schmidt. Since we got the new law the grub is better. We 
 get sufficient to eat. If the quarters were only in better condition 
 and if we had a little more water, it would be all right. A gallon of 
 water is not enough. 
 
 Senator Mallory. Are you a citizen of the United States? 
 
 Mr. Schmidt. Yes, sir. 
 
 Senator Mallory. How long have you been in this country ? 
 
 Mr. Schmidt. I have been here now six years and a half. 
 
 Senator Martin. Is the supply of water any better on foreign ships 
 than on American ships? 
 
 Mr. Schmidt. It was not to my knowledge when I was there, but I 
 think it is now. 
 
 Senator Martin. But when you were there it was the same as on 
 the American ship? 
 
 Mr. Schmidt. Yes, sir. 
 
 Senator Martin. What about quarters? 
 
 Mr. Schmidt. The foreign ships give you a little more, I believe. 
 
 Senator Martin. You believe so. You are not certain ? 
 
 Mr. Schmidt. No, sir. 
 
 Senator Martin. In the foreign ships you served on did you have 
 better quarters? 
 
 Mr. Schmidt. Yes, sir. 
 
 Senator Martin. More space ? 
 
 Mr. Schmidt. Yes, sir; on the English and German ships I was on 
 we had better living quarters than on the American vessels 1 have 
 been on. 
 
 NO ADVANCE WANTED. 
 
 Senator Martin. Do you think the seamen would be benefited by 
 the repeal of the law which forbids an advance? Do you think it 
 would be better to let the seamen get as much as the shipmaster will 
 give him? 
 
500 HEABIWGS BEFORE THE MEKOHANT MARINE COMMISSION. 
 
 Mr. Schmidt. Give no advance at all. The money does not go to 
 the seaman. It goes to the crimp. 
 
 Representative Minor. Do you claim that the food schedule of 
 Germany is better than ours ? 
 
 Mr. Schmidt. I did not say that. 
 
 Senator Martin. What foreign nation feeds better than we do 'i 
 
 Mr. Schmidt. I did not say anything about grub. I said the grub 
 was now satisfactory after the new law. 
 
 Representative Minor. Do you know the legal requirements on a 
 German ship in respect to the space for each sailor? 
 
 Mr. Schmidt. No, sir; I do not. I know what it is on American 
 ships. 
 
 STATEMENT OF JOSEPH R. FOARD. 
 
 Joseph R. Foard appeared before the Commission. 
 
 The Chairman. I should like to ask you, Mr. Foard, if I am correct 
 in the belief that you are president of the Board of Trade? 
 
 Mr. Foard. Yes, sir; 1 happen to be this year. 
 
 The Chairman. You are engaged in ocean transportation to some 
 extent? 
 
 Mr. Foard. I have never had anything to do with anything but the 
 shipping and the importing business. 
 
 Mr. Chairman and gentlemen, you have come here to listen to us 
 talk about ships — ships in general and American ships in particular. 
 
 It is an interesting subject, peculiarly so to me. It is also one in 
 regard to which our people generally are more ignorant than of almost 
 any other problem they have had to solve, and I have no hesitation in 
 adding that the ignorance has not been limited to those who have been 
 silent. Most fantastic statements have been made in regard to the 
 profits of ship owning and estimated savings in freights on exports, if 
 we only owned our own ships. There is no patriotism in business, and 
 surely no American shipowner ought to be depended upon to be foolish 
 enough to freight his neighbors' goods at lower rates than he is obliged 
 to. No capital is subject to greater variations in earning power than 
 that which is invested in ships. A ship's port charges and expenses 
 are bound to be distributed where she goes, without regard to her flag. 
 It is only the net earnings which come home, and they are now and 
 have been an almost unknown quantity for upward of two years, dur- 
 ing which shipping has been passing through one of the worst periods 
 of depression in its history. The law of supply and demand has full 
 sway upon the sea, and, with the energy and enterprise of the whole 
 world to draw upon, commerce has not usually long to wait for a 
 remedy for excessive freight rates. 
 
 A prosaic business problem. 
 
 Ships have furnished a theme for poets and romance writers of all 
 ages, but the "white-winged messengers of peace" that helped to 
 wind the "silken chain of commerce around the world" have almost 
 completely disappeared. There is nothing beautiful, certainly noth- 
 ing poetical — unless sometimes their names — about the ugly, black- 
 f unneled, smoke-begrimed machines, which now perform that service 
 
HEARINGS BEFOEE THE MERCHANT MARINE COMMISSION. 501 
 
 for commerce, classified commonly as "ocean tramps," and in place 
 of the merchant masters of the old days we now only need capable 
 navigators and engine drivers. It is, therefore, a most prosaic and 
 practical business problem for which you have been commissioned to 
 suggest a solution. I presume it has already been demonstrated to 
 your satisfaction that the United States have already lost their once 
 proud place upon the seas, and that there is no present prospect of 
 regaining it under existing laws and conditions. The remedies which 
 have been suggested to you, I presume, have been limited to free 
 ships, modified navigation laws, differential duties or tonnage dues, 
 mail subsidies or contracts, general subsidies, and builders' or owners' 
 bonuses. 
 
 "free ships" and FREE CREWS. 
 
 Taking them up in the order stated, I feel obliged to first plead guilty 
 to having been a lifelong advocate of free ships as a safe and sure 
 remedy, provided it is accompanied by some measure of relief from the 
 needless and absurd requirements of our navigation laws. My faith 
 has never been shaken for even a passing moment that if at the end 
 of the civil war our people, my own included, had been permitted to 
 buy ships in the cheapest market the United States would be sharing 
 with Great Britain to-day the supremacy of the seas. We have lost 
 forty whole years, and 1 am gray enough at least to have become very 
 weary of waiting for what may never come. 
 
 Our navigation laws would render the operation of foreign-built 
 ships more expensive in competition with similar ships operated under 
 foreign flags, and should be liberally modified in any case. Why in 
 the name of all that is just and fair and right should an American ship- 
 owner be any more restricted in regard to the nationality of the people 
 on his ships than the servants of his household ? Why, I also ask, 
 should the law of our country not enable a shipowner to compel the 
 fulfillment of a sailor's contract of employment, executed in our own 
 or any other country, as the laws of all other maritime countries do? 
 All that England asks of her officers and engineers is that they shall 
 possess certificates of competency from the proper authorities; of her 
 sailors and firemen, nothing at all; why should we? In all ages the 
 poorer nations and counti'ies where living has been hard to obtain 
 have furnished the sailors of the world. The United States contrib- 
 uted its full share in the earlier days and before the development of 
 our marvelous home resources. Why should not commerce have the 
 benefit of the labor of those who^are obliged to go to sea, and any part 
 of it, under any flag, be compelled to persuade men with higher pay 
 to leave more congenial and profitable employment ashore? You, per- 
 haps, will be able to find an answer; I can not even suggest one. 
 
 OPFOSED TO DIFFERENTIAL DUTIES. 
 
 Differential duties I believe to be too complex and uncertain to ever 
 furnish a remedy which would satisfy capital, alwa3'^s wary and need- 
 ing to be assured of the permanent security of its principal, at least. 
 Personally I do not regard the suggestion as worthy of a moment's 
 consideration. The duty on a ton of iron ore from Cuba is 32 cents. 
 
502 HEARINGS BEFOEE THE MEECHANT MAEWE COMMISSION. 
 
 I am sure the whole of it would not be sufficient to cover the additional 
 cost of transportation in an American as against a foreign vessel. The 
 duty on a ton of sugar fi'om the same island, I believe, would amount 
 approximately to $45. Fancy for a moment trying to equalize the 
 percentage of duty difference in cost of transportation of a ton of silks 
 or satins from France with a ton of iron ore from Spain, and capital 
 being persuaded of the certainty of returns from a source subject to 
 such whims and vagaries as the import business of any country! 
 
 Differential tonnage dues would, I am satisfied, be found equally 
 impracticable and in conflict with our treaties with practically every 
 nation with which we have commerce. 
 
 Mail contracts or mail subsidies (the name makes no difference to 
 me) I have no hesitation in saying I believe in for fast steamers run- 
 ning on regular routes upon the most liberal terms. By no other 
 means do I believe it will be possible for our country to become pro- 
 vided with a proper fleet of speedy ships suitable for prompt conver- 
 sion into transports and auxiliary cruisers in time of war or danger of 
 war, often to be averted by a show of sufficient force and determina- 
 tion. 
 
 General subsidy I believe to be as impossible of attainment as free 
 ships, at the same time absolutely impracticable and the most expensive 
 aid to shipping that human ingenuity could devise. Capital, wary, as 
 1 have said before, and whimsical to the last degree, will want to be 
 assured that it starts square and with a fair chance at least. Why 
 should it not be when it is possible at infinitely less cost to the country 
 in the shape of a shipbuilder's or shipowner's bonus, if public money 
 is to be paid out in any shape in order to build up our merchant 
 
 marine 
 
 I assume for the sake of argument, and I believe my estimate is 
 correct, that the cost of an American as compared with a foreign-built 
 steamer of a given size to-day would be 50 per cent greater. Let us, 
 therefore, assume that a modern tramp steamer of 6,000 tons dead- 
 weight capacity, costing in England to-day £6, or $30 per ton — say 
 $180,000— would cost built in the United States $90,000 additional, or 
 $270,000. A fair estimate for insurance, depreciation, and interest on 
 such a new vessel would be 20 per cent per annum, diminishing later 
 to, let us say, an average of 15 per cent for the assumed life of such a 
 ship — 20 years. It is obvious that, to overcome the additional first 
 cost alone, a subsidy of $13,500 per annum would be required for 
 twenty years, or a total of $270,000, just the whole original first cost 
 of the ship, to carry and ultimately wipe out the additional first cost 
 of only $90,000. A case of one for three. The $90,000 could even be 
 borrowed at 2 per cent, and paid off in 20 years with a sinking fund of 
 about 4 per cent at a cost of only $5,400 per annum against $13,500, 
 or a total of $108,000 against $270,000, and the saving would pay a 
 similar bonus for one and one-half more similar ships. A case of two 
 and one-half for one. Can the United States Government be seriously 
 and reasonably asked to pay 15 per cent per annum for money to buy 
 ships on the installment plan for the benefit of any class of our citi- 
 zens ? As a plain one, with some pride and patriotism, I answer no — 
 a thousand times no. 
 
HEAEIKGS BEFORE THE MERCHANT MARINE COMMISSION. 503 
 
 A WHOLESALE DEMAND. 
 
 My shipbuilder friends will doubtless insist that, unless our whole 
 fiscal policy is changed, we can not expect they will ever be able to 
 entii'ely wipe out the difference between the cost of American and 
 foreign built vessels. 1 have more faith in them and no hesitation 
 in stating my conviction that under the stimulus of largely increased 
 output from their yards, lessening organization costs, and specialized 
 labor, American genius can and will solve the problem within a 
 reasonable time. Tradition, or rather adherence to it, is largely 
 responsible for the cost of shipbuilding. The sort of people who have 
 successfully and profitably built bridges and aqueducts in remote 
 parts of the globe, in competition with every competitor on it, and 
 who have for many years shipped locomotive engines all over the 
 world, surely need only a wholesale demand to teach them somehow 
 at some future time to put the same sort of material together into 
 ships and marine engines as cheaply as any other people on earth. 
 For more than forty years we have been talking and trying to prove 
 what we could not do; we must get out of the habit; it is a bad one. 
 
 Summing up briefly, I would recommend — 
 
 Liberal mail contracts with the owners of American steamers, 
 already built or to be built, when operated on regular routes. 
 
 Amended navigation laws, permitting the employment of competent 
 people of any race, creed, or color as officers, sailors, or firemen, also 
 providing for the enforcement of contracts of employment entered 
 into at home or abroad. The victualing laws are vexatious and some- 
 what unreasonable, but they would not alone, in my opinion, deter 
 capital from investment in American ships. 
 
 Builders' or owners' bonus 50 per cent in cash at once upon the 
 commissioning of ships completed within two years of the passage of 
 the act, diminishing at the rate of 5 per cent per annum down to 
 nothing at the end of ten 3'ears; ships so built and paid for to be for- 
 bidden to engage in the coastwise or protected trades during the bonus 
 period or any subsequent extension of the same. 
 
 I am aware that my suggestions make no provision for relief of the 
 owners of American ships already built in anticipation of a general 
 subsidy, or for any other reason. They would have the benefit of the 
 coastwise and of prohibited, and probably to be prohibited trades; 
 with that they would have to be content. 
 
 The Chairman. I assume that you would not advocate the purchase 
 of ships abroad and permit them to have American registers and to 
 operate in the coastwise trade? 
 
 Mr. Foard. Under no circumstances; certainly not until the coast- 
 wise trade is prepared for it. 
 
 1 wish to leave with you a statement of actual wages on a British 
 ship and a Norwegian ship, compared with a hypotnetical American 
 ship. 
 
 The Chairman. That is very important information, and we are 
 glad to get it. It will be printed in the record. 
 
504 HEAKINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Statement of comparative wages — United States, English, and Norwegian steamers of about 
 6,000 tons dead-weight capacity. 
 
 [Per month each.] 
 
 Position . 
 
 No. 
 
 United States. 
 
 No. 
 
 English. 
 
 No. 
 
 Norwegian. 
 
 
 1 
 1 
 1 
 1 
 1 
 1 
 1 
 1 
 
 
 1 
 
 1 
 
 8 
 
 8 
 1 
 1 
 
 
 
 2 
 
 $160 
 90 
 75 
 60 
 125 
 90 
 76 
 60 
 
 $150 
 90 
 75 
 60 
 125 
 90 
 76 
 60 
 
 
 6 
 2 
 8 
 1 
 1 
 
 
 
 
 1 
 
 £ s. 
 
 2 
 10 10 
 
 8 
 
 6 10 
 16 5 
 12 
 
 8 
 
 d. 
 
 
 
 
 
 
 
 
 JB 8. 
 20 
 10 10 
 8 
 6 10 
 16 5 
 12 
 8 
 
 $97.20 
 51.03 
 38.88 
 31.59 
 78.98 
 68.32 
 38.88 
 
 1 
 1 
 1 
 
 1 
 1 
 1 
 
 
 
 1 
 
 
 4 
 2 
 4 
 1 
 1 
 2 
 2 
 2 
 2 
 
 Crown. 
 480 
 130 
 80 
 
 Crovm. 
 
 480 
 
 130 
 
 80 
 
 $127.20 
 
 First mate 
 
 34.46 
 
 Second mate 
 
 21.20 
 
 ChieJ engineer 
 
 Second engineer 
 
 Third engineer 
 
 Fourth engineer 
 
 Donkeyman 
 
 Carpenter 
 
 260 
 160 
 100 
 
 260 
 160 
 100 
 
 66.25 
 42.40 
 26.50 
 
 6 
 6 
 
 
 
 
 5 
 
 6 
 
 24.30 
 29.16 
 
 
 
 40 
 40 
 25 
 
 40 
 
 40 
 
 200 
 
 90 
 
 90 
 
 23.85 
 
 
 
 Sailors, A. Bs 
 
 3 17 
 
 2 10 
 
 3 16 
 5 10 
 7 
 
 6 
 
 3 
 
 
 
 23 6 
 5 
 
 30 10 
 5 10 
 7 
 
 118.00 
 24.30 
 
 148. 23 
 26.73 
 34.02 
 
 70 
 55 
 
 105 
 75 
 
 100 
 40 
 60 
 40 
 20 
 
 280 
 110 
 420 
 
 75 
 100 
 
 80 
 120 
 
 80 
 
 40 
 
 74.20 
 29.15 
 
 Firemen 
 
 30 
 50 
 45 
 
 240 
 60 
 46 
 
 111. 30 
 
 Cook 
 
 19.88 
 
 Steward ..'. 
 
 26.60 
 
 
 21.20 
 
 Oilers 
 
 
 
 
 
 
 31.80 
 
 Firemen boys 
 
 Mess boys 
 
 
 
 
 
 
 21.20 
 
 15 
 
 30 
 
 2 10 
 
 
 
 2 10 
 
 12.15 
 
 10.60 
 
 
 
 Total 
 
 30 
 
 
 1,370 
 
 28 
 
 
 166 
 
 806.77 
 
 27 
 
 
 2,696 
 
 687.68 
 
 
 
 
 Difference between average of English and Norwegian wages and American wages $623, or 10.38 
 cents per ton of capacity per month, or $1,246 per ton per annum. 
 
 Difference between English and American wages $563, or 9.38 cents per ton of capacity per month, 
 or $1,126 per ton per annum. 
 
 Difference between Norwegian and American wages $683, or 11.36 cents per ton of capacity per 
 month, or $1,364 per ton per annum. 
 
 Mr. Foard. I should like to leave with you circulars giving the 
 prices at which modern ships can be bought up to date. I think per- 
 haps they will help you in your deliberations. 
 
 The Chairman. We are glad to receive the information. 
 
 STATEMENT OF FELIX FOLEY. 
 
 The Chairman. Is there present any other representative of the 
 seamen who wishes to be heard? 
 
 Felix Foley appeared before the Commission. 
 
 The Chairman. Are you an American citizen ? 
 
 Mr. Foley. Yes, sir. 
 
 The Chairman. Born in this country or naturalized? 
 
 Mr. Foley. Naturalized. 
 
 The Chairman. You are a native of what country ? 
 
 Mr. Foley. Canada. 
 
 The Chairman. Are you a seaman? 
 
 Mr. Foley. Yes, sir; I have been for some time up to the last few 
 years. I represent the Sailors' Union here in Baltimore. 
 
 The Chairman. You have not been to sea for some time? 
 
 Mr. Foley. Not for some time. 
 
 The Chairman. For two or three years ? 
 
 Mr. Foley. About two or three years. 
 
 The Chairman. You are under pay by the sailors' union ? 
 
 Mr. Foley. Yes, sir. 
 
 The Chairman. What are your duties in that connection ? 
 
 Mr. Foley. To look after sailors on the American coast. 
 
 The Chairman. What have you to say to the Commission concern- 
 ing the American sailor? 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 505 
 
 Mr. Foley. In regard to invoking the Government aid in building 
 up a merciiant marine, I will say that it is a very fine thing, but not a 
 word is said about how to get sailors to man your ships. 1 think if 
 American sailors were given the same privileges that men have on 
 shore there would be far more Americans going to sea. 
 
 The Chairman. In what regard ? 
 
 Mr. FoLET. The sailor does not have one word to say so as to making 
 his own bargain with the captain of the vessel. It is done through a 
 third party. He has not one word to say in regard to his own wages. 
 
 THE SAILOK'S contract. 
 
 The Chairman. Does not the sailor sign a contract? 
 
 Mr. Foley. He signs a contract, but the way it is done is this: The 
 work is given to a boarding master or a shipping master, as the case 
 may be, and he goes around, and he fixes the wages for the men, prac- 
 tically. That is, on the American deep-water trade. On the coast, 
 the sailors get wages that they are satisfied with at the present time. 
 
 The Chairman. Do you argue, as a seaman did in New York, I 
 think it was, that the sailor who makes a contract should be permitted 
 to break it when the vessel reaches a foreign port? 
 
 Mr. Foley. Very often it is not the sailor's fault that it is broken. 
 
 The Chairman. Do you argue that the sailor ought to be permitted 
 to do that? A representative of the seamen's union argued before 
 the Commission that the sailor ought to have the same privilege, as 
 you have expressed it, that the man on land has to hire himself and to 
 leave his employment when he pleases, notwithstanding his contract. 
 
 Mr. Foley. I think the sailor is entitled to the same privilege that 
 a man on shore is. 
 
 The Chairman. After he has signed a contract? 
 
 Mr. Foley. I do not believe in a man breaking his contract, but 
 very often the man is compelled to break it. 
 
 The Chairman. Under what conditions? 
 
 Mr. Foley. Very often the man is shipped in a condition where he 
 Is not fit to go aboard. He may be put aboard drunk and the vessel 
 immediately puts out to sea. Maybe she is bound to Kio; maybe to 
 some other part of the world; and when he gets there he finds out 
 where he has been, and he simply leaves the vessel, and possibly be 
 is not liked very well aboard the vessel. 
 
 The officers or mate may make it interesting enough for him to leave 
 by giving him stich work as they see fit to give him, and work that he 
 knows it is not necessary for him to do. 
 
 The Chairman. What else have you to say ? 
 
 ADVANCE SHOULD BE ABOLISHED. 
 
 Mr. Foley. If this advance was stopped entirely, and if the system 
 of going aboard foreign vessels and getting men to leave and keep- 
 ing them in boarding houses until they are ready to go, and then 
 putting them aboard at the shipping master's wages, was stopped, I 
 think there would be more Americans going to sea. The advance 
 ought to be abolished altogether. 
 
 The Chairman. Do you think Congress can legislate to correct all 
 these little informalities and evils ? 
 
 Mr. Foley. I believe if it can stop the advance, it would be very 
 
506 HEAKINGS BEFOEE THE MEBOHANT MABINE COMMISSION. 
 
 good for the American sailor. Since it has been abolished in the coast- 
 ing trade, there has been very little trouble. In fact, none at all. 
 
 The Chairman. You would have the statute include the deep-sea 
 trade as well as the coastwise trade? 
 
 Mr. Foley. Yes, sir. 
 
 Senator Mallort. Do you think if we did that, it would have any- 
 thing to do with abolishing the stealing of sailors from foreign ships? 
 
 Mr. Foley. It certainly would. Who would steal them if they 
 could not get an advance ? There would be no one to sell them to. 
 With the conditions on board of an American vessel, what would a 
 man do without some advance? He lands here; he spends his money. 
 He wants to go to sea again, and can not get clothes perhaps. 
 
 Senator Mallory. What do they do in the coastwise trade, where 
 no advance is allowed? 
 
 Mr. Foley. I never heard any sailor make any complaint. 
 
 Senator Mallory. I have received petitions this winter asking for 
 the repeal of the law. 
 
 Mr. Foley. I have no doubt of it, but not from sailors. 
 
 Senator Mallory. Yes; from the Sailors Union on the Pacific coast. 
 
 Mr. Foley. I have never sent out any. It has been our fight on 
 the Pacific coast and on the Atlantic coast as well to stop the advances 
 entirely. 
 
 Senator Mallory. Of course Congress is willing to do what is best 
 for the sailors and the only question is what is best. It is contended 
 that the sailor can not deposit any wages for his wife and little ones 
 when he goes to sea, whereas, if he were allowed to have an advance, 
 he might do so. A good, reputable man would. 
 
 Mr. Foley. The advance is taken away before the sailor ever goes 
 to sea. 
 
 Senator Mallory. In what shape ? 
 
 Senator Martin. How would it do to let the advance be paid to the 
 United States shipping commissioner, to be sent to the family of the 
 sailor ? 
 
 Mr. Foley. It would be used as an evasion, and you would go back 
 to the old rut. 
 
 A ship was here the other day. She generally pays off on the other 
 side of the water. There is an advance allowed — I think $10 — to go 
 across. She will go across there in, say, ten days. What does the man 
 have on the other side? This man would make his own trade and get 
 his money, and when he gets his money he would have $10 to live on 
 until he gets work. But if he has to go in a boarding house he is 
 shipped right back here again in the same condition. He is entirely 
 in the hands of the shipping master all the time. 
 
 LARGER FORECASTLES, MORE WATER. 
 
 I should like to say a word in regard to schooners and the accommo- 
 dations for sailors. At present the accommodations aboard most of 
 the vessels are very small. The men eat and sleep and live practically 
 in one house, and it is a very small house, too. In some cases the house 
 has one door only, and when a vessel is sailing on the wind and the 
 door is open there is more or less water coming in, and it simply fills 
 the forecastle right up, and it is impossible to get clothes dry. 
 
 The Chairman. Wnat do you say about the water supply, which 
 was referred to by the seaman who testified before you did? 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 507 
 
 Mr. Foley. It is not large. In the coastwise trade there is no 
 restriction on water at all. 
 
 The Chairman. How is it in the foreign trade ? 
 
 Mr. Foley. In the foreign trade there is. 
 
 The Chairman. Is it inadequate ? Is it insufficient for the comfort 
 of the sailor? 
 
 Mr. Foley. I think it is. You can understand yourself that a 
 gallon of water a day is a very small amount for a man to wash with 
 and for all his uses. 
 
 The Chairman. To what extent would you suggest that it be in- 
 creased? 
 
 Mr. I'oLEY . That would be a thing where it would be required to 
 look at both sides of the question. 
 
 The Chairman. Yes; that is what we want to do. 
 
 Mr. Foley. The vessel's chance of carrying water and the seaman's 
 privilege to have water. 
 
 The Chairman. Is there any other point? 
 
 UNDERMANNING. 
 
 Mr. Foley. I should like to say a word about schooners: They are 
 undermanned. A vessel carrying three or four or five thousand tons 
 of coal employs four or five men. It is true she has steam aboard her 
 to hoist the sails and take up anchor; but let the steam break down at 
 sea, and the vessel is entirely at the mercy of the elements. She does 
 not carry enough men to take care of her — not at all. She is simply 
 at the mercy of the elements. There should be more men. 
 
 Senator Maixory. About how many ? 
 
 Mr. Foley. I should think that a vessel of that size should carry 
 three more meA anyway, according to its tonnage. 
 
 Senator Mallory. Measured by the tonnage of the ship? 
 
 Mr. Foley. Yes, sir. 
 
 Senator Mallory. Take a five-masted schooner of 2,000 tons, or a 
 six-masted schooner. Was not that a six-masted schooner we saw at 
 Philadelphia ? Take a six-masted schooner of 2,000 tons. 
 
 Mr. Foley. I do not think there is any schooner of that size now. 
 
 Senator Mallory. Yes; she is 2,400 tons net. 
 
 Mr. Foley. Six masted? 
 
 Senator Mallory. Yes; we saw her in Philadelphia yesterday. 
 
 Mr. Foley. As a general rule they carry only about 6 men. 
 
 Senator Mallory. What do you think she ought to carry ? 
 
 Mr. Foley. She ought to carry at the least calculation 8 or 9 men. 
 I think there is a bill before Congress to that effect — a manning scale. 
 
 Senator Mallory. Based on tonnage? 
 
 Mr. Foley. Yes, sir. 
 
 The Chairman. Is there any other point to which you wish to refer? 
 
 A LOAD line. 
 
 Mr. Foley. A gentleman spoke to me about a man breaking his 
 contract and going ashore in England. In England they also have a 
 law that they shall load only so much. It is called the PlimsoU line. 
 This country has not. They simply load them to the scuppers. When 
 the water comes in the scuppers on the deck she is loaded. That is well 
 understood on the American coast. If this was remedied I think it 
 would be an encouragerpent for Americans to go to sea. 
 
508 HEAEINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 As far as concerns men being taken aboard vessels, very often these 
 men go aboard, not of their free will, but because they have to go 
 aboard. They are simply in the hands of a lot of unscrupulous peo- 
 ple, ready to sell them to the highest bidder. A captain will want a 
 crew of men and will go to the boarding master to procure them. 
 There is competition amongst these men. If these men can not get 
 sailors for their figures they will go to the next man. Probably he is 
 compelled to get them at the figures of the next man or lose the 
 shipping. 
 
 The Chairman. Do jou know of any instance where men have been 
 stolen ? 
 
 Mr. Foley. That is a pretty hard thing to prove, but I have reason 
 to believe in my own mind that it is done every day. I see men go 
 aboard a vessel and come back with several men. 
 
 STATEMENT OF C. C. BUCKMAN. 
 
 C. C. Buckman appeared before the Commission. 
 
 The Chairman. What is your business? 
 
 Mr. Buckman. I am manager of the United Fruit Company, Balti- 
 more division. 
 
 The Chairman. The ships of your company ply between what ports ? 
 
 Mr. Buckman. Between United States ports and West Indian ports. 
 
 The Chairman. Under the American flag? 
 
 Mr. Buckman. Not many of them; very few. 
 
 The Chairman. Some of them do ? 
 
 Mr. Buckman. Yes; some of them. 
 
 What I want to say is merely this: I understand that our company 
 has been represented before you in New York and will very likely be 
 represented before you in Boston more ablj^ than I could present our 
 case, so I shall have very little to say on the subject. In fact I am sure 
 if our people in Boston, where our main office is located, state their 
 case, they will give it more in detail and in better form than I could. 
 
 I have had a great deal of experience in the shipping business — for- 
 eign shipping — between here and West Indian ports. 1 have chartered 
 a great many ships. Our company employs about seventy to seventy- 
 five steamships, running between United States ports and West Indian 
 ports and Central American ports, and principally in conveying bananas 
 from our properties in those various countries, and I do not suppose 
 more than 10 per cent are American ships. Of course we do business, 
 and we employ foreign ships to do the business. 
 
 Senator Mallory. Are most of those vessels chartered ? 
 
 Mr. Buckman. Most of them are chartered. We own some vessels. 
 
 Senator Mallory. I mean, of course, the foreign ships that you 
 have in j^our employ. 
 
 Mr. Buckman. We can not own foreign ships. We have had some 
 ships built in this country. We got a little patriotic and had some 
 built here, but there is not much sentiment in business, and we can 
 not run the ships we had built here nearly as cheaply as we can charter 
 ships from Norway and England. Of course we are able to do busi- 
 ness, and we charter them and bring them here, and we bring our 
 products here in foreign hulls, but personally I should like to see every 
 ship we have fly the American flag at the stern. 
 
HEARINGS BKFORE THE MERCHANT MARINE COMMISSION. 509 
 
 Senator Mallory. Can you state from your experience what is the 
 average difference between running a vessel under the American flag 
 in that trade and a foreign ship? 
 
 THIRTY PER CENT GREATER. 
 
 Mr. BucKMAN. Yes. We figured that to run an American ship as 
 compared with a foreign ship, considering the labor, the crew, and all 
 that, the cost is at least 30 per cent greater in an American ship. 
 
 Senator Mallory. Thirty per cent? 
 
 Mr. BucKMAN. Yes; there is a greater difference in some ships, com- 
 paratively, in this way: We have ships at times come here under char- 
 ter that have a Chinese crew, probably engaged for a year or two on 
 the other side at a very low rate, and that makes a greater difference, 
 of course, in that particular instance than in instances generally. 
 
 Senator Mallory. But the ordinary difference, you say, is about 30 
 per cent? 
 
 Mr. BucKMAN. Yes, sir. 
 
 Senator Mallory. Not more than that? 
 
 Mr. BucKMAN. It will average at least 30 per cent the way we figure 
 it. Of course these crews are engaged on the other side for a term, 
 for a period, and sometimes when the ships come here the crew desert 
 the ship, and when the sailors and firemen are put aboard here the^ 
 ship has to pay the wages of the port, which are greater than the 
 wages in foreign ports. 
 
 STATEMENT OF JOHN C. ROSE. 
 
 The Chairman. The Chair understands that Hon. John C. Rose, 
 United States district attorney, is in the room, and if it is agreeable to 
 him, the Commission would be glad to have Mr. Rose make a brief 
 statement as to the matter of advances to sailors. 
 
 Mr. Rose. Mr. Chairman and gentlemen, 1 have been district attor- 
 ney here for nearly six years. The law on this question is diflicult to 
 enforce, because it is always difficult to protect men who can not very 
 well protect themselves. But what I want to say to the Commission, 
 particularly, is this: I trust there will be no letting down of the bars 
 on the question of advance, and no increase of the facilities for giving 
 advance, because practically the way it works is that if any advance is 
 allowed, every man is required to pay that advance, entirely irrespec- 
 tive of the amount of accommodations he gets from the boarding-house 
 keeper. 
 
 For example, I tried a case here very shortly after the passage of 
 the act of 1898. An attempt, fortunately defeated in that case, was 
 made to evade the law by shipping the men at 25 cents for the first 
 fifteen days and a dollar a day afterwards. We had on the stand six 
 or seven different men who had enjoyed the accommodations and bene- 
 fits of the boarding houses, their periods running from a half day 
 to ten days and to two weeks. The charge against each one of those 
 men was precisely the same. One very intelligent and decent appear- 
 ing man testified that he came here on the day oef ore he shipped,, per- 
 haps on the morning; that he went to the boarding house only after 
 he had been here some hours, because he found that it was practically 
 
510 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 impossible to get a berth on a ship unless he was shipped by the board- 
 ing master. 
 
 It was in connection with one of Mr. Buckman's vessels, if my 
 recollection is not wrong. We had Mr. Buckman in the case as a 
 witness. 
 
 The shipowners are helpless. They have to take the men from the 
 boarding-house masters, and unless they do, thej^ can not get any, 
 because the men are all controlled by the boarding masters. This 
 man testified that he went into the house simply because he was 
 compelled to do it in order to get employment. He was charged $10 
 advance, the same as anybody else. If you give facilities for advance, 
 every man will have to pay the same. . 
 
 STATEMENT OF HENRY G. HILKEN. 
 
 The Chairman. We have now gone through the list of speakers. 
 Are there any volunteers who wish to occupy the remaining ten 
 minutes? 
 
 Henry G. Hilken appeared before the Commission. 
 
 The Chairman. Mr. Hilken, what is your business? 
 
 Mr. Hilken. W^e are agents of the North German Lloyd Line. 
 
 The Chairman. You understand the scope of this inquiry? 
 , Mr. Hilken. Yes, sir. 
 
 The Chairman. Give us your views. 
 
 Mr. Hilken. I wish to say that in any plan you may adopt, whether 
 it be free ships or subsidies, or free ships and a bonus to the ship- 
 owner, there is one thing which has to be done, and that is to provide 
 schools for sailors and officers under supervision of our Government. 
 I do not think we have in the United States one competent school 
 under control of the Federal Government, or in strict State control, 
 to prepare shipmasters for their vocations. Although we have a tre- 
 mendous coast line, we do not teach our citizens properly, in my 
 opinion, in that respect. 
 
 Take England; take Germany. Each of those nations — and so with 
 the Netherlands and Belgium — has splendid schools, and we ought to 
 have the same, because if we want to have our ships under our own 
 flag, we surely ought to provide captains for them. 
 
 That is all 1 have to say. 
 
 REMARKS OF MR. FOARD. 
 
 Mr. Foard. Mr. Chairman and gentlemen, I merely wish to thank 
 you in behalf of those who have been permitted to address the Com- 
 mission for your great kindness in coming to our city and listening to 
 us so patiently. 
 
 RESPONSE OF THE CHAIRMAN. 
 
 The Chairman. In behalf of the Commission, I desire to thank the 
 good people of Baltimore for giving us an opportunity to come and 
 hear their views, which have been very interesting. 
 
 Thereupon the Commission adjourned. 
 
HBAEING8 BEFOEE THE MERCHANT MARINE COMMISSION. 511 
 
 HEARINGS AT BOSTON. 
 
 Rooms of the Chamber op Commeeob, 
 
 Boston, Mass., June 1, 1904. 
 The Commission met at 10.30 o'clock a. m. 
 
 Present: Senators Gallinger (chairman), Lodge, and Mallory, and 
 Representatives Minor and Humphrey. 
 
 ADDRESS OF HENET M. WHITNEY, PRESIDENT OF THE CHAMBER 
 
 OF COMMERCE. 
 
 Mr. Whitney. Mr. Chairman and gentlemen, 1 desire to say just a 
 word of welcome on behalf of our merchants and our people to the 
 Commission which is here to consider a question of very great inter- 
 est and of very great importance to the people of New England. I 
 welcome you most heartily, both in my capacity as president of the 
 Chamber of Commerce and in my individual capacity. 
 
 There is nothing which is of so great interest to the people of Massa- 
 chusetts as the question of the upbuilding of its commercial interests. 
 
 If 1 may be pardoned a reference to personal history in connection 
 with commerce, I recall being present, something like fifty years ago, 
 when I was a boy here in Boston, at the launching of the Great Repub- 
 lic from the yard of Donald McKay. It was then the largest clipper 
 ship that had been built, and I remember the enormous crowds that 
 were in East Boston to see the launching. Possibly there may be in 
 this audience some gentlemen who were also present. But those were 
 the palmy days of American commerce, and I suppose the State of 
 Massachusetts had at that time, and down to 1860, much the largest 
 interest of any State, indeed, probably more than all the States of the 
 Union at that time, in commerce. It is, therefore, of especial interest 
 to the people of Massachusetts to have such measures taken as will 
 promote the upbuilding of the American merchant marine. 
 
 I shall not occupy the time of this audience with any extended 
 remarks, and I merely say what I have said in welcome to the Com- 
 mission and as an expression of sentiment on the part of our people of 
 the great importance to the interests of Massachusetts of the question 
 it is nere to consider. 
 
 RESPONSE OF THE CHAIRMAN. 
 
 The Chairman. Mr. Whitney, in behalf of the Merchant Marine 
 Commission I desire to thank you, sir, and your associate members of 
 the Boston Chamber of Commerce for your generous words of greeting. 
 
 This Commission, as is doubtless known to every gentleman present, 
 was created toward the close of the last session of Congress. It is 
 composed of five Senators, named by the President pro tempore of the 
 Senate, and five members of the national House of Representatives, 
 named by the Speaker. 
 
 The Commission is charged with very responsible and very perplex- 
 ing duties. It has been asked to inquire not into the condition of the 
 American merchant marine, for every intelligent American citizen 
 knows what that condition is, but into plans for its rehabilitation. It 
 has been discharging its duty as well as it could, having held meetings 
 in New York, Philadelphia, and Baltimore, where eminent gentlemen 
 expressed their views. 
 
512 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION- 
 
 1 desire to emphasize the fact, inasmuch as there seems to be a little 
 misapprehension on this point, that the Commission was not created 
 for the purpose of exploiting any particular theory or the notion of 
 any individual or any association. We were not charged with the 
 duty of trying to find reasons why the subsidy scheme should be 
 adopted, why the differential plan should be adopted, or why any other 
 particular plan should be adopted to accomplish the purpose we have 
 in mind. But we were asked to consult the business men of the coun- 
 try, the shipbuilding and the shipowning men of the country as well as 
 the sailors of the country, for the purpose of trying to get information 
 concerning this ver3r important question. 
 
 1 say I think a misapprehension has existed for the reason that 
 almost before the Commission commenced its work a leading news- 
 paper of the city of Boston suggested that this Commission was created 
 for the purpose of exploiting the subsidy scheme. It is not true. We 
 invite opinions from all classes of men, and we are glad to receive 
 suggestions along any possible line of the work that has been com- 
 mitted to our hands. 
 
 We are also charged, under the statute, with ascertaining, so far as 
 we can, methods for the amelioration of the condition of the seamen 
 of the country, so as to make the seafaring calling more popular than 
 it is at the present time; and we have in our former hearings asked 
 seamen, men who go to sea before the mast, and who are supposed to 
 know something about the conditions of the American seamen, to 
 come and testify before the Commission. 
 
 Now, Mr. Whitney, we are here to-day for that very purpose. We 
 are here to invite opinions from men who are supposed to know some- 
 thing on this great subject, no matter what their views may be, and 
 we hope that out of the mass of information that we shall secure before 
 the work of the Commission closes, we may be able at least to lay the 
 foundation for some remedial legislation which will do something 
 toward the upbuilding of the American merchant marine, which we 
 all know is in a deplorable condition at the present time. 
 
 Thanking you again, sir, for your kind words, the Commission is 
 ready to proceed with its work. (Applause.) 
 
 STATEMENT OF ALFRED WINSOR. 
 
 The Chairman. 1 will inquire if Mr. Alfred Winsor is present. 
 
 Alfred Winsor appeared before the Commission. 
 
 The Chairman. Mr. Winsor, state to the Commission what your 
 business is. 
 
 Mr. Winsor. I am president of the Boston Steamship Company, 
 the Boston and Philadelphia Steamship Company, and the Boston Tow- 
 boat Company. 
 
 The Chairman. Where do your companies operate vessels? 
 
 Mr. Winsor. The Boston Steamship Company is now operating a 
 line from Puget Sound to the Orient and Manila^two large ships and 
 three smaller ships, owned by the Boston Towboat Company. 
 
 The Chairman. You are familiar with the work tnat has been 
 assigned to this Commission? 
 
 Mr. Winsor. Yes, sir. 
 
 The Chairman. The Commission will be pleased to hear any views 
 you may wish to present. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 513 
 
 Mr. WiNSOE. Thank you. 
 
 Mr. Chairman and gentlemen, 1 understand you do not care for any 
 further evidence as to the necessity for Government aid to our mer- 
 chant marine. I have appeared before Congressional committees at 
 AVashington the past session, and several members of your Commis- 
 sion know my views on the importance of immediate action by our 
 Government for relief if the small remnant of our former m n'chant 
 marine engaged in deep-water or foreign commerce is to be kept under 
 our flag. I am glad I am not expected to repeat the facts, which would 
 only be cumulative and wearyyou. Yet my present position of attempt- 
 ing to run, in regular lines to foreign ports, new, American -built steam- 
 ships, under the American flag, in competition with subsidized foreign 
 ships, ^ives me authority to say there is no hope of building up or 
 increasing our foreign-going merchant marine under present condi- 
 tions. 
 
 A DIRECT SUBSIDY. 
 
 As to the method of relief, I would suggest for your consideration, 
 first, a system of direct subsidy. Recognizing that the so-called Frye 
 bill, which failed of enactment by the Fifty-seventh Congress, met 
 considerable opposition even from undoubted friends of the upbuild- 
 ing of our merchant marine, I about a year ago, with the assistance of 
 a few others interested in this question, formulated a subsid3' bill on 
 other lines, viz, for freight steamers and sail vessels, with extra com- 
 
 f)ensation of .25 per cent to encourage regular lines to foreign ports, 
 eaving the present mail subsidy to take care of the fast steamers. 
 As the Gardner bill, creating this Commission, was introduced early 
 in the last session of Congress, 1 did not seek to have this bill pre- 
 sented. I have it with me, and if you care to have me leave it with 
 you, 1 will do so. It may be of interest merely to present one of 
 many suggestions of relief. 
 
 Feeling, however, .that a large number of our citizens and many 
 members of Congress do not like the method of direct subsidy, 1 would 
 recommend a mail payment to all steamers sailing in a regular and 
 efficient line to any foreign port from any port of the United States; 
 this payment to be based upon so much per mile on the gross regis- 
 tered tonnage of each ship sailing between the ports. In consideration 
 of this payment, each ship shall be obliged to carry the mails under the 
 same conditions as attach to the present mail payments, except that 
 the graduated payments shall start from a somewhat lower rate of 
 speed. The advantage of this method of aid is that lines of steamers 
 would be started to all important or growing ports in South America, 
 Asia, Africa, etc., and undoubtedly the commerce of the country 
 would follow its flag. 
 
 VALUE OF REGULAR LINES. 
 
 The success of late of the trend of England, Germany, Japan and 
 other countries to increase their commerce and merchant marine, lies 
 in the establishing of regular steamship lines to all practicable trading 
 ports. Thereby these nations have increased and Duilt up a market 
 for their home commodities to such an extent that in due course of 
 time the lines have become self-sustaining and profitable. This run- 
 ning of regular lines to all important ports has made tlje so-called 
 
 3a— 04 33 
 
514 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 tramp ship depend largely upon the coarse freights bound to the less 
 important places, or upon temporaiy openings wherever the regular 
 lines can not take care of the amount of freight offering. By this 
 method of regular lines, the important foreign countries are not only 
 holding the foreign market for their goods, but are increasingit. 
 
 To instance what I mean by commerce following the flag, citizens of 
 the country under whose flag these steamers run start commercial 
 houses in ports where these regular lines stop. To-day it is almost 
 impossible to find in any foreign port from the Mediterranean to all 
 ports of the Far East, an American finli doing a general mercantile 
 business and commonly known as merchants. This is a known fact. 
 In starting my line to the Far East, I was obliged to use English firms 
 as agents in the Orient and also at Manila, nothwithstanding that this 
 is now one of our possessions. There is not to-day in Manila an 
 American house doing a genei'al mercantile business, as is generallj' 
 understood by the broad application of the word. I hope soon, how- 
 evei', to remedy this difficulty in my case, as far as Manila is concerned, 
 if I decide to continue running steamers in this business. I state these 
 facts to emphasize the importance of building up our merchant marine 
 and increasing the exports and commerce of our country. This will 
 be done almost entirely by having regular lines under the American 
 flag. 
 
 The trade between China and Great Britain is now entirely cared for 
 by regular liners. No tramp steamer has loaded from tlie ports of 
 Japan and China to the United Kingdom for a period of about nine 
 years. The same applies almost entirely to the trade between Great 
 Britain and India, India and Great Britain; also Japan, China, and 
 Germany, which is cared for exclusively by steamers of the regular 
 lines. Those districts 'where the trade is dependent upon crops are 
 still fed by tramp tonnage, as, for instance, between the Pacific Coast 
 and Continent; rice from Burma to the Continent and Great Britain; 
 seeds from the River Plate to Great Britain and the Continent, and, to 
 a certain extent, the wool trade existing between South Australia and 
 Gi'eat Britain. It will be found that in all parts of the world where 
 imports and exports consist to a great extent of manufactured articles, 
 including flour, lumber, and kerosene, these trades are cared for alniost 
 exclusively by steamers of regular lines. 
 
 It is absolutely essential that a merchant should be in a position to 
 make a forward contract for the supply of goods to distant ports, and 
 this can only be done when he deals with representatives of regular 
 liners, which vessels have got to sail full or not full, whilst the tramp 
 steamer waits until she gets her full complement. It has been fre- 
 quently remarked that a tramp steamer can afford to carry freight on 
 lower terms than vessels of a regular line, but in actual practice it has 
 been proved that this is not the case, for as a rule it will be found that the 
 regular liners load on equal freight terms to those accejjted by tramps, 
 in fact, at the present time there is but a narrow margin between the 
 freights accepted by sailing vessels and regular line- steamers. To 
 establish a regular line and dispatch vessels full or not full on guaran- 
 teed dates necessarily places such vessels at a disadvantage to the 
 tramp steamer, which can afford to wait her time to load, and it is to 
 meet the expenditure thus incurred, that assistance is sought. --• 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 515 
 
 HIGH SPEED NOT NEEDED. 
 
 It will not be necessary, and I do not think it is practicable, to run 
 high-speed steamers to the distant ports of South America, Africa, and 
 the Orient. If they were of a high rate of speed, as are some of our 
 trans- Atlantic liners, it would require a large part of their outward 
 capacity to carry their bunker coal. Also, there would not be enough 
 passenger business for these ships — certainly not for a number of 
 years at least — to offset the increased cost of their operation. 
 
 Therefore 3'ou will see that for the Government to make it practi- 
 cable for shipowners to build and operate steamers of this character, 
 a very large assistance would be required, and I do not think it is 
 feasible for the present, either for the carrying of the mails or for 
 increasing commerce, to have extremely fast steamers in any but the 
 North Atlantic European trade. 
 
 You are probably aware that there has been a great change even in 
 the Atlantic Ocean in the character and speed of many of the lately 
 built ships running between here and Europe. The 21 or 22 knot 
 ships, such as the American liners and the present fast Cunarders, and 
 others, carry comparatively little freight; in fact, it is virtually noth- 
 ing but perishable goods and express freight, in some cases not over 
 1,200 to 2,500 tons. The rest of the room is required for passengers 
 and for the bunker coal. The recent developments have been very 
 much larger steamers, with great freight capacity and increased 
 passenger accommondations of a considerably lower speed, and these 
 ships are the most profitable to operate. A large number of travelers 
 have come to the conclusion that it is better to go on one of these large 
 comfortable stiips than on the smaller fast ones. 
 
 However, in the graded rate of payments you could arrange for 
 increased amounts on increased rate of speed, which, if sufficient, 
 would lead to building- and sailing under our. flag ships that could be 
 profitably used for routes where it is necessary to have high-speed 
 vessels. 
 
 For the indirect commerce, such as tramp steamers and sailing ves- 
 sels, I would recommend the method of differential duties, or an export 
 bounty, or something of that character, which so many people advise 
 as"a good method of building up the merchant marine. 
 
 RELATIVE COST OF BUILDING. 
 
 As to the relative cost of building in this country and Great Britain, 
 I would say that May 14 I had sent to a most reliable firm in London 
 a cablegram, copy of which 1 will read. I can not very well use names 
 here, but 1 can assure you that the builders are among the very high- 
 est standard of buildei s in England. The gentlemen did not know to 
 what use I would put this information, and therefore it would not be 
 right for me to use their names. I sent this cable: 
 
 "Ascertain from or equally good builder lowest cost 
 
 build steamship 7,000 tons deadweight, capacity 24:-feet draft, 10^ knots 
 trial trip speed, general freighter. Class Al Lloyds. Report by cable 
 quickly, naming builder." 
 
 On May 16 the following in reply was received: " '■ 
 
 can not quote exact price without full specifications, but this vessel, 
 equal to White* Star cargo boats, would cost about £50,000. Could 
 
516 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 give early building slip and good delivery. We are in communication 
 with other builders, but doubt getting anything more definite without 
 specifications." 
 
 Two or three days later I received the following: "'Subject. specifi- 
 cations price about £45,000, delivery eight months from order 
 
 and approval plans." 
 
 These quotations of cost in Great Britain are from the most reliable 
 shipbuilders. Taking the cost of the freight steamer built for the 
 companies I represent in American shipyards two or three years since— 
 the cost of building in this country is no less now — the above prices 
 show a cost of about 50 per cent more in this country for the same 
 type of ship, but as shijjbuilding in Great Britain is at a low ebb at 
 present, I give as my opinion that the average difference of cost is not 
 over from 33^ to 35 per cent greater in some types of ships and less in 
 others. 1 think if you give our shipbuilders "an opportunity to build 
 different types of ships in larger numbers, that in course of a few years 
 this difference of cost will be reduced. There is as much ingenuity 
 and skill in our shipyards as in our locomotive shops, or will be, and 
 we know that American locomotives are being built for foreign 
 railroads. 
 
 IMPORTANCE OF FIXED CONTRACTS. 
 
 There is another matter which I feel is of gi'eat importance in con- 
 nection with any method that may be considered, viz, that the Gov- 
 ernment should have the authority to make contracts, under proper 
 restrictions, for a term of years with shipowners who propose to avail 
 of the law. The reason for this is that to build and equip steamships 
 of large size and speed requires a large expenditure of" money. No 
 one or two individuals will assume this large cost. Therefore it will 
 have to be done by corporations of many stockholders. In order to 
 interest them or have tnem take this kind of an investment there must 
 be some kind of guaranty that the Government assistance will continue 
 long enough for them to derive a benefit from it. 
 
 The advantage of a direct subsidy or a mail payment beyond what 
 is suggested by other methods is that this is simple and can be clearly 
 understood bj^ shipowners and the Government as to the amount of 
 revenue that can be relied upon by the former and the actual cost to 
 the latter. The assistance must be great enough to invite capital to 
 enter into this line of investment, probably greater than some years 
 ago, because as every year goes by there is a smaller nucleus to build 
 on and capital has shifted into other channels. 
 
 With the above recommendations considered in any manner you 
 may feel warranted to report to Congress, if it becomes a law, 1 do 
 not hesitate from my experience to predict that capital will be forth- 
 coming, and the United States will build up a merchant marine in the 
 course of a few years that will be of great advantage to every industry 
 in our country and a pride to every patriotic citizen. 
 
 While I am ready to predict as above, if these conditions are car- 
 ried out, I am fully as ready to predict that if the Government does 
 not give efficient, clear-cut assistance, the present insignificant tonnage 
 employed in foreign trade will surely disappear, either by withdrawal 
 or by being operated under a foreign flag. 
 
HEARINGS BEFORE I'SE MERCHAN'T MARINE COMMISSION. 5l7 
 
 As to what it would cost the Government to give this assistance, I 
 think it will seem small compared with expenditures on the Panama 
 Canal, harbor and river improvements, and irrigation; also small com- 
 pared to the benefits derived therefrom. 
 
 AMERICAN AND FOEEIGN SHIP WAGES. 
 
 I should like to add to my statement as illustrating the difference 
 between American and foreign rates of wages and maintenance on 
 shipboard these crew lists with wages of various steamships in the 
 foreign trade — American as compared with foreign vessels. 
 
 These crew lists were obtained from the masters of vessels while 
 they were in port. They show actual examples and not mere conjec- 
 tui-es or estimates. They prove that after you have got your ship it 
 costs much more to run it under the American flag and according to 
 our American standards of comfort. 
 
 The Chairman. I understand the tables give the relative wages that 
 are paid on American and foreign ships ? 
 
 Mr. WiNSOR. Yes, sir; I name the ships. The German ship was in 
 this port, and the captain gave us the list, and it is a correct.one. I 
 give the figures of a German and a Norwegian vessel, and then for 
 comparison 1 take one of m}"^ ships of virtually the same size and show 
 what I actually pay. 
 
 Comparison of American and British steamship wages. 
 
 
 American S. S. 
 Pleiades. 
 
 British S. S. 
 Lady Joicey. 
 
 British S. S. 
 Masconomo. 
 
 
 No. 
 
 Wages. 
 
 No. 
 
 Wages. 
 
 No. 
 
 Wages. 
 
 Master . 
 
 1 
 1 
 1 
 
 8200 
 70 
 35 
 
 
 $145.80 
 51.03 
 36.46 
 29.16 
 31.59 
 26.73 
 31.69 
 
 1 
 1 
 1 
 1 
 1 
 1 
 1 
 1 
 
 "i' 
 
 $121.50 
 48 60 
 
 First mate . ... 
 
 Second mate 
 
 34 02 
 
 Third mate . . 
 
 25.51 
 
 
 
 
 Boatswain 
 
 
 
 25 51 
 
 St^ard 
 
 1 
 
 55 
 
 
 Engineer steward 
 
 12 15 
 
 Cook 
 
 1 
 1 
 
 1 
 8 
 
 40 
 20 
 20 
 240 
 
 
 26.73 
 14.68 
 
 26 73 
 
 
 
 Lamp trimmer 
 
 
 Able seaman 
 
 8 
 
 144.65 
 12.15 
 82.62 
 58.32 
 38.88 
 29.16 
 26.73 
 
 174. 96 
 
 8 
 
 174.96 
 
 Ordinary seaman 
 
 First engineer . 
 
 1 
 1 
 
 \ 
 
 100 
 65 
 50 
 
 1 
 
 1 
 1 
 
 1 
 
 80 19 
 
 
 
 
 
 Fourth engineer 
 
 34 02 
 
 
 
 
 
 
 6 
 2 
 
 240 
 80 
 
 8 
 2 
 
 184.68 
 46 17 
 
 Oilers... 
 
 
 
 
 
 Month - 
 
 26 
 
 1,216 
 14,580 
 
 30 
 
 961.03 
 11,532.36 
 
 32 
 
 979.28 
 11,761.36 
 
 Year 
 
 
 
 NORWEGIAN S. S. OLAFF KYRIE. 
 
 [4,800 tons D. W. cargo capacity; total crew, 26 men; at Boston, May 14, 1904.] 
 
 Wages paid per month. 
 
 Captain jHO 
 
 First mate 35 
 
 Second mate 27 
 
 Third mate 22 
 
 Chief engineer '_'_ g5 
 
 Second engineer 38 
 
518 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Third engineer ^|^ 
 
 Donkeyman 20 
 
 Cook 27 
 
 Steward 37 
 
 Mess boy ., 8 
 
 Carpenter 25 
 
 Boatswain 25 
 
 6 sailors each.. 20 
 
 fi firemen do... 20 
 
 Boy 8 
 
 Total 712 
 
 Speed of ship loaded, 9 knots; consumption of coal, 18 tons per day; cost of pro- 
 visions for crew, 29 to 30 cents per day. — As per master's statement to T. I. Winsor, 
 manager B. T. B. Co., May 14, 1904. 
 
 Comparison of American and German vxiges on 8,000 ton freight steamers. 
 
 American. 
 
 German S. S. Arcadia 
 Hamburg-American line. 
 
 No. 
 
 Pay per 
 month. 
 
 Total. 
 
 NO- mo'n?^! Total. 
 
 Captain 
 
 First mate 
 
 Second mate 
 
 Third mate 
 
 Quartermasters , . 
 
 Boatswain 
 
 Carpenter 
 
 Seamen 
 
 Stewards 
 
 Cooks 
 
 Boys 
 
 Chief engineer... 
 
 First assistant 
 
 Second assistant . 
 Third assistant. . . 
 
 Oilers 
 
 Firemen 
 
 Trimmers 
 
 Storekeeper 
 
 Total. 
 Per year . . . 
 
 S85.00 
 45.00 
 35.00 
 30.00 
 30.00 
 30.00 
 26.00 
 65.00 
 40.00 
 20.00 
 
 125. 00 
 80.00 
 66.00 
 60.00 
 40. 00' 
 40.00 
 25.00 
 
 J85.00 
 45.00 
 35.00 
 60.00 
 30.00 
 30.00 
 160.00 
 66.00 
 80.00 
 40.00 
 125. 00 
 80.00 
 66.00 
 60.00 
 120.00 
 240. 00 
 150.00 
 
 ?75. 00 
 38.00 
 30.00 
 16.00 
 18.00 
 18.00 
 15.00 
 8-18. 00 
 18-25.00 
 4.00 
 76.00 
 60.00 
 40.00 
 20.00 
 18.00 
 16.00 
 16.00 
 20.00 
 
 $76.00 
 38.00 
 30.00 
 32.00 
 18.00 
 18. 00- 
 
 120.00 
 38.00 
 43.00 
 4.00 
 75.00 
 60.00 
 40.00 
 20.00 
 54.00 
 
 112.00 
 
 105.00 
 40.00 
 
 1,440.00 
 17, 100. 00 
 
 922.00 
 11,064.00 
 
 Which equals about 54 per cent more. 
 
 Mr. WiNSOK. If you wish it, I will leave with you the bill to which 
 I have referred. It will give you an idea of what I think is necessary. 
 The Chairman. We shall be glad to receive it. 
 The bill referred to is as follows: 
 
 A BIIiL To provide ships and seamen to aid in the common defense; to promote 
 commerce, and to encourage the deep-sea fisheries. 
 
 Be it enacted hy the Senate and House of Hepreseiitatives of the 
 United States of America in Congress assernhled: That on and after 
 sixty days from the passage of this act there shall be paid out of 
 moneys in the Treasury of the United States not otherwise appro- 
 priated to the owner or owners of any sail or steam vessel hereafter 
 built and registered in the United States, or now dul}'^ registered by 
 a citizen or citizens of the United States (including as such citizens 
 any corporation created under the laws of the United States or any of 
 the States thereof) the sum of one and one-half cents for each gross 
 registered ton for each hundred nautical miles sailed in the foreign 
 trade of the United States, including the trade with the Philippine 
 Islands (so long as foreign vessels may engage in that trade). 
 
HEARINGS BEKORE THE MERCHANT MARINE COMMISSION. 519 
 
 Sec. 2. That, subject to the approval of the Postmaster-General and 
 the Secretary of Commerce and Labor, regular lines of American 
 steamships running to ports of South America, Asia, Africa, or Aus- 
 tralia shall receive 25 per centum in addition to the compensation 
 above provided, and in return for this additional compensation shall 
 convey the United States mails free of further charge. Upon vessels 
 of said regular lines receiving this additional compensation, tlie United 
 States shall be entitled to have transported free of charge a mail mes- 
 senger whose duty it shall V)e to receive, sort, take in charge and 
 deliver the mails to and from the United States, and who shall be pro- 
 vided with subsistence and suitable room for the accommodation of 
 himself and the mails. 
 
 Sec. 3. The compensation described in section one and two shall be 
 payable on each entry of a duly qualified vessel, not exceeding sixteen 
 entries in any one fiscal year. But no compensation shall in any case 
 be paid to (a) a vessel of a classification below Al (or Al^), as classified 
 either by the Record of American and Foreign Shipping, or the United 
 States Standard Owners, Builders, and Underwriters Association, or an 
 equivalent classification in any other register of shipping of at least 
 equal merit, or (b) a vessel on a voyage extending only to a foreign 
 port less than one hundred and fifty miles fi-om her last port of 
 departure in the United States, or from a foreign port less than one 
 hundred and fifty miles from her first port of arrival in the United 
 States, or (c) a vessel less than one-fourth of whose crew shall be 
 citizens of the United States, or persons who after declaring their 
 intention to become citizens have served three years on board of 
 merchant vessels of the United States, as described in section twenty- 
 one hundred and seventy-four of the Revised Statutes, or (d) a barge, 
 canal boat, or vessel proceeding from port to port in tow, or tugboat, 
 or vessel engaged in wrecking, or (e) a foreign-built vessel hereafter 
 admitted to American registrj', or (f) a vessel while employed in the 
 coasting trade, or (g) a steamer which during its ti'ial has not obtained 
 a speed of eight knots, half loaded. 
 
 Sec. 4. That no vessel shall receive anjr compensation for a voyage 
 under this act when, if required to do so by the Secretary of Com- 
 merce and Labor, it fails to carry as a member of the ship's company 
 one American boy under twenty-one years of age suitable for such 
 employment, and one such boy in addition for each one thousand gross 
 registered tons, who shall be taught in the duties of seamanship or 
 engineering or other maritime knowledge, as the case may be, and 
 receive sucn pay as shall be reasonable. 
 
 Sec. 6. That no steam vessel hereafter constructed and registered 
 shall receive any compensation under this act unless it fulfills reason- 
 able requirements, to be prescribed by the Secretary of the Navy, 
 with a view to service as an auxiliary cruiser or transport or supply 
 ship or collier in case of war. 
 
 Sec. 6. That no vessel shall receive compensation heretofore pro- 
 vided unless its owners shall agree in writing beforehand that said 
 vessel may be taken or employed and used by the United States for 
 the national defense or for any public purpose at any time; and in every 
 such case the owner of any such vessel so taken or employed shall be 
 paid the fair value thereof, if taken, at the time of the taking; and if 
 employed, shall be paid the fair value of such use. And if there shall 
 be a disagreement as to such fair value, the question of the valuation 
 
520 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 shall be submitted to and determined by three impartial appraisers, 
 one to be appointed by the Secretary of Commerce and Labor, one by 
 the owner or owners of the vessel, and the two appi'aisers so appointed 
 shall, before they proceed to act, select a third appraiser. The deci- 
 sion of a majority of such board shall be final and effective. In case 
 of any taking or employment, as provided in this section, the shipping 
 obligations of the officers and crews existing at the time shall be deemed 
 to have terminated. 
 
 Sec. 7. That no vessel which has at any time received compensation 
 heretofore provided shall be sold, except by the consent of the Secre- 
 tary of Commerce and Labor, to a citizen or subject of a foreign power, 
 under penalty of forfeiture. 
 
 Sec. 8. That the mileage on which compensation heretofore provided 
 is paid shall be computed by the direct customary route from the last 
 port of departure in the United States to a foi'eign port or a port of 
 the Philippine Islands, and from such last-mentioned port by the direct 
 customary route to the first port of arrival in the United States. If 
 during the voyage the vessel shall enter at two or more foreign ports, 
 the distance by the direct customary route between such ports shall 
 also be included in the mileage. 
 
 Sec. 9. That on and after sixty days from the passage of this act, 
 the Secretary of the Treasury is hereby authorized and directed to 
 pay, out of any moneys in the Treasury not otherwise appropriated, 
 f)ounties as follows: (a) To the owner or owners of a documented ves- 
 sel of the United States engaged in the deep-sea fisheries for at least 
 three months in any one fiscal year, two dollars per gross ton per 
 annum : Provided^ That at least one-third of the crew shall be citizens 
 of the United States or such persons as shall be within the provisions 
 of section twenty-one hundred and seventy-four of the Revised 
 Statutes, (b) To a citizen of the United States serving as a member 
 of a necessary and proper crew of a vessel of the United States docu- 
 mented and engaged in deep-sea fisheries for at least three months 
 during any one fiscal year, one dollar per month during the time 
 necessarily employed in the voyages of such vessel. 
 
 Sec. 10. That the President of the United States shall from time to 
 time cause to be made, by the proper heads of Departments, regula- 
 tions for the due execution of the provisions of this act. 
 
 COMPETING WITH FOREIGN SUBSIDIES. 
 
 The Chairman. Are you in receipt of any so-called subvention under 
 the act of 1891 — the postal subvention law? 
 
 Mr. WiNSOR. None whatever. 
 
 The Chairman. Do you run in competition with subsidized ships on 
 the Pacific? 
 
 Mr. WiNSOE. Very much so. I found when I arrived at Puget 
 Sound that the Japanese line, which runs from Seattle to Japan, had 
 a subsidy of 1325,000; that is, for that branch of their merchant marine. 
 Then there is the Empress Line, a little north of there, starting; from 
 Vancouver, virtually the same place, which is the Canadian-Pacific 
 Railway hne. It is called the Empress Line and it gets 1300,000 from 
 the British and Canadian governments. 
 
 The Chairman. Are those mail subventions or direct subsidies? 
 
 Mr. Winsor. I could not tell you exactly what form thev take but 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 521 
 
 I believe thej' are direct subsidies. However, I would not undertake 
 to say. They get that amount of money, I am sure. 1 think there 
 are others here who could tell you just how the paj'ment is made. 
 
 The Chairman. Let me ask you a question. Would a moderate 
 mail compensation, perhaps placing you on a par with those steam- 
 ships in the matter of assistance, make your own line secure and per- 
 haps eventually enable you to increase American steamship facilities 
 for reaching the markets of the Orient? 
 
 Mr. WiNSOR. Yes, sir. I should say that in any proposition 1 would 
 draw up I do not think I would ask our Grovernment to give as much 
 as either of those Governments gives. I think we can struggle along 
 with something less than that. We would build after awhile a mer- 
 chant marine, 1 hope. 
 
 We should increase the amount of freight. We already this year, 
 I think, owing partly to the anticipation of war, have carried about 
 fifty thousand tons of flour to the Orient; to be exact, 48,100 tons 
 within the year. There is a large quantity of flour being shipped to 
 the Orient. It is increasing. Also from the West, lumber, other 
 products and manufactures are, or were before the war between Japan 
 and Russia, expected in increasing quantities. 
 
 NO FAITH IN FREE SHIPS. 
 
 The Chairman. Some very good people have made earnest pleas 
 before this Commission in favor of free ships as a solution of this 
 problem. I wish to ask you as a practical shipowner whether, if 3'ou 
 were permitted by our laws to buy or build your ships abroad and put 
 them under our flag, and employ them exclusively in the foreign trade 
 and not in coastwise commerce, you would do so? 
 
 Mr. WiNSOR. Certainly not. In the first place, you will see by the 
 paper which 1 have presented that it costs between 50 and 60 per cent 
 more to victual and man our ships than it does foreign ships. 
 
 The Chairman. So, if you were permitted to go into the market and 
 buy your ships abroad without restriction, the increased cost of run- 
 ning them would absolutely prohibit you from competing with foreign 
 lines ? 
 
 Mr. WiNSOR. Most decidedly. 
 
 The Chairman. And meeting the subsidies, of course. 
 
 Mr. WiNSOR. We should have to repair those ships here, as we do 
 now, and you must remember that all repairs on American ships, at the 
 high cost here of labor and material and such things, cost very much 
 more here than in England. The foreign ship does just as little as 
 possible here. She waits until she gets home, if it can be delayed, 
 until almost ready to break down, and then heading home and spending 
 a good deal of money. But we would have to do our repairing here 
 under the American flag. 
 
 It is not a question of buying foreign ships which is facing some of 
 us. It is a question whether, if nothing comes, we will not have to 
 put our ships under a foreign flag. That is the practical question 
 which, if things go on, we will have to meet. You can not run ships 
 at a loss for any great length of time. All trade is close, and you see 
 where we are when we go into the markets against subsidized ships 
 or ships that are built so cheaply and repaired so cheaply. 
 
522 HEARINGS BEFORE THE MERCHANT MAKTNE COMMISSION. 
 WOULD HAVE AMERICAN CREWS. 
 
 The Chairman. Some gentlemen have argued that not only should 
 they be permitted to buy free ships, but likewise there should be a 
 repeal of our navigation laws so as to enable the owner to man the 
 ships with foreign officers and cheap crews, and that he should be per- 
 mitted to furnish such food as he chose. What would you say to that 
 proposition? 
 
 Mr. WiNSOR. As soon as you get those men under the American 
 flag they would demand what our men get as wages. You will find 
 percolating through all our ships foreigners the same as you find them 
 on land. Those who can pass examination for officers get out their 
 naturalization papers. After a while they come up for a license. . 
 
 The Chairman. Then 1 infer that you have little faith in the so-called 
 free-ship policy ? 
 
 Mr. Winsor. I have none whatever. In fact, my experience shows 
 it would do no good. 
 
 The Chairman. Let me ask you as to the relative cost of building 
 ships. Suppose a policy were adopted by the Government of the 
 United States which would enable American builders to build a line of 
 steamships of the same type, so that the business might be standard- 
 ized. They would then, 1 judge, come very much nearer meeting the 
 cost of foreign builders than they do at the present time. 
 
 Mr. Winsor. Do you mean if the Government gave some assist- 
 ance to the shipbuilders? 
 
 The Chairman. In some form. 
 
 Mr. Winsor. That would help the shipbuilders, and if there was 
 competition it might help the shipowners, but if you give it to the 
 shipbuilders, and they can, they will put it in their own pockets nat- 
 urally. Anyone would. Do you see what I mean ? 
 
 The Chairman. I do not quite understand it. 
 
 Mr. Winsor. If you give the bounty to the shipbuilders, if they 
 have to they will give it to the man who has the ship built, but if they 
 do not have to they will make him pay just as much as they can make 
 him pay. 
 
 Another way of putting it is that the bounty would go into their 
 pockets unless there was competition enough to cause them to surrender 
 it to the shipowner. 
 
 VALUE OF standardizing. 
 
 The Chairman. My question perhaps did not clearly express what 
 I meant to say, which is this: If from any policy that might be 
 adopted by the Government, shipbuilders were enabled to go into the 
 business and build a line of ships of the same quality and size — — 
 
 Mr. Winsor. I see. 
 
 The Chairman. So that they could standardize their work, would it 
 not enable them under those circumstances to come nearer competing 
 with foreign shipbuilders ? 
 
 Mr. Winsor. Most certainly. Give them time. Let them build 
 enough ships. In Great Britain a yard runs on a certain class of ves- 
 sels — say a regular tramp freight ship — and it puts them out, as the 
 expression is, almost by the yard. It is like anything else done in a 
 wholesale way. If our yards get into the waj' of building a certain 
 
heaMngs before the mekchant Marine ooMMissioisr. 523 
 
 thing, unquestionably they will be able to build cheaper. The trouble 
 is they have not enough business. I do not think a new contract has 
 been let for a year for a deep-water vessel to be built in the yards of 
 this country. I think not. When you go occasionally and ask the 
 shipyards to build a ship, they have to have new molds, new plans, etc. 
 Thej'^ will often build the second ship somewhat cheaper than the first. 
 I thank you, gentlemen. 
 
 THE WINSOK ORIENTAL LINE. 
 
 Senator Mallory. 1 should like to ask you a question or two. How 
 long has the Boston Steamship Company been engaged in trade on the 
 Pacific? 
 
 Mr. WiNsoR. J think about a year; a little over a year and a half. 
 
 Senator Malloet. How many vessels have you in that business ? 
 
 Mr. WiNSOE. I have two large ships of 12,000 tons dead-weight 
 capacity each and three smaller ships of, roughly, 6,400 tons dead- 
 weight capacity each. 
 
 Senator Mallokt. Five vessels in all? 
 
 Mr. WiNSOR. Five. 
 
 Senator Mallory. Have you a regular route ? 
 
 Mr. WiNSOR. Yes, sir. 
 
 Senator Mallory. What are the points? 
 
 Mr. WiNSOE. The two large and one of the small boats start from 
 Puget Sound and go to Yokohama, Moji, sometimes Kobe, and occa- 
 sionally to Shanghai, but not often, because we transship there; then 
 on to Hongkong, and then to Manila and back again. The smaller 
 ships, until the late war, ran up to North China, up to Siberia to 
 Vladivostok, and did touch at Port Arthur. You know one of my 
 ships was caught there when the war broke out. She got away finally 
 by making a trade with the Russian commander by_ which the captain 
 agreed to take out 200 Chinese women and men, and the commander 
 let her out. 
 
 Senator Mallory. All those ships were built in the United States ? 
 
 Mr. WiNSOR. All those ships were built in the United States. 
 
 Senator Mallory. And they are all under the American flag? 
 
 Mr. WiNSOE. Yes, sir. 
 
 Senator Mallory. Have you any Chinese crews among them at all? 
 
 Mr. WiNSOR. Yes, sir. 
 
 Senator Mallory. What proportion of your crew are Chinese ? 
 
 Mr. WiNSOR. I looked that up. I thought you might ask about it. 
 Taking a large ship, with a full crew, for Europeans it would be $85 
 a day. With Chinamen it is $65 a day. There is that diflference — 
 about $20 or $25 a day. 
 
 Senator Mallory. I am speaking of the number of men. Could 
 you give me an idea as to the difference in the number of men? 
 
 Mr. WiNSOR. My port captain. Captain Lewis, is here, and if you 
 want anything in that line 1 think you will find him an intelligent 
 witness. He could answer those questions. 
 
 Senator Mallory. Could you say as to the difference in the wages 
 you pay the Chinese and the Caucasian sailor. 
 
 Mr. WiNSOE. No, sir; I could not. I can only tell you in a rough 
 way that it makes a difference of $20 per day on our large ships. We 
 could not do business to- day unless we carried part Chinese crews. 
 
524 HEARINGS BEl-ORE THE MEKCHANT MARINE COMMISSION. 
 
 The Japanese and all the steamships running there have such crews. 
 All the foreign ships running to San Francisco carry them. I tried 
 the other way for a voyage, and I had to come to this. 
 
 Senator Malloey. You have paid probably from 30 to 50 per cent 
 more in the first cost of your ships, and you are running them at a 
 considerable advance over what it costs to run any of the foreign 
 vessels ? 
 
 Mr. WiNSOR. Yes, sir. 
 
 Senator Mali,oet. And yet I gather from what you say that you 
 are not losing money ? 
 
 Mr. WiNSOE. We are losing money. 
 
 Senator Malloey. You are? 
 
 LOSING MONEY NOW. 
 
 Mr. WiNSOR. We lost a good deal of money to start the line. Since 
 the war broke out Japan withdrew her steamships for transports, as 
 you know, and that was (juite a factor in our favor. Hence we have 
 been able to get more freight, and recently the large ships have done 
 better. -Japan has cleared the seas, probably, from all fear of Eussian 
 men-of-war. I think she has again started her line to Seattle. The 
 withdrawal of the Japanese vessels, due to the war, took out quite a 
 percentage of the tonnage. 
 
 Senator Malloby. Then recently you have been running under 
 more favorable conditions than you did before the Japanese withdrew 
 their ships? 
 
 Mr. WiNSOR. Yes. My smaller ships are not making money. 
 They have lost money right along. That is a case of the closing of 
 ports. 
 
 Senator Mallory. As an experienced steamship man, 1 should like 
 to know from you whether in your opinion, in the event Congress 
 takes no action to benefit the merchant marine of the United States 
 by aid of some kind, any line on the Pacific — not speaking with refer- 
 ence to your own — can be made profitable? 
 
 Mr. WiNSOE. No, sir. 
 
 Senator Malloey. Is there a United States mail line between the 
 Pacific coast and Manila at this time ? 
 
 Mr. WiNSOE. No; none that is subsidized. 
 
 Senator Malloey. I mean subsidized. 
 
 Mr. WiNSOE. None at all, and I think none from San Francisco. 
 The Pacific Mail surrendered their contract some time since. I think 
 they started in and found it cost too much to run the vessels according 
 to the requirements of the law. 
 
 We get a payment per pound for carrying the mail the same as for- 
 eigners do. It does not amount to a great deal. It may be something 
 like $5,000 or $6,000 a year. 
 
 Senator Malloey. That is all, I believe. 
 
 Representative Humphrey. I should like to ask you a question. 
 What effect, if any, will the law recently passed by Congress, requir- 
 ing army and navy supplies to be carried in American bottoms, have 
 upon j'our trade? 
 
 Mr. WiNSOE. It will assist us somewhat. 
 
 Representative Humphbey. It will help you some? 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 525 
 
 Mr. WiNSOR. Yes, sir; but the Government is running transports 
 there. They run a transport into Puget Sound, and 1 know it costs 
 the Government twice as much as they paid my company on last year's 
 contract. I had the contract last year with tiie Government to carry 
 its supplies, and in competition with foreigners I made the price $4.25 
 per ton to Manila, and, as you know, it is something like 6,500 miles. 
 Six thousand five hundred 'miles I carried Government goods for tlais 
 prices, because if 1 did not get the contract I could not run the ships 
 to Manila; and as it is, it does not make much showing. 
 
 STATEMENT OF FRANCIS H. PEABODY. 
 
 Francis H. Peabody appeared before the Commission. 
 
 The Chairman. You are a member of the firm of Kidder, Peabody 
 & Company, well-known bankers? 
 
 Mr. Peabody. Yes, sir. 
 
 Mr. Peabody. Mr. Chairman and gentlemen, I have only one word 
 to say. If the Government would give suitable encouragement I 
 have no doubt there is plenty of capital in Boston willing to go into 
 the establishment of lines of steamers to run to those countries with 
 which we are desirous of encouraging trade. It has been the policy 
 of the German Government to do so for twenty years past and the 
 result has been very striking. That is about all I have to say. 
 
 The Chairman. Have you any money at this time to invest in the 
 building of American steamships for the foreign trade ? 
 
 Mr. Peabody. We have considerable already invested. 
 
 The Chairman. Is there any new capital to invest in that line under 
 the existing law ? 
 
 Mr. Peabody. Under the existing law ? 
 
 The Chairman. Yes, sir. 
 
 Mr. Peabody. No, sir. 
 
 The Chairman. But if proper encouragement was given to the build- 
 ing of American steamships for the foreign trade, you think capital 
 could be found for that purpose? 
 
 Mr. Peabody. I have no doubt of it. 
 
 The Chairman. Thank you, Mr. Peabody. 
 
 STATEMENT OF JAMES J. STORROW. 
 
 James J. Storrow appeared before the Commission. 
 
 The Chairman. Are you a member of the firm of Lee, Higginson & 
 Company ? 
 
 Mr. Storrow. Yes, sir. 
 
 The Chairman. This Commission is desirous of ascertaining, among 
 other things, under what conditions American capital could be secured 
 for the building of American steamships to engage in the foreign trade. 
 The Commission will be pleased to hear your views. 
 
 Mr. Storrow. So far as my experience goes I think there is no 
 antipathy whatever to that class of investment. If New England 
 capital can be given the same return that it receives, for example, for 
 being invested in cotton mills, it seems to me very clear that there 
 would be very large amounts available for that purpose. 
 
 The Chairman. Under existing conditions and existing laws, Mr. 
 
526 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 ytorrow, would it be possible to procure capital in Boston to aid in 
 the construction of American ships for the foreign trade ? 
 
 Mr. Stoerow. I do not pretend to be a shipping expert at all, but 
 from such investigations as I have made and occasionally make — and 
 I believe that is the consensus of this community — I think it is impos- 
 sible to invest capital advantageously in that business to-day. 
 
 Senator Malloky. That is because it does not pay ? 
 
 Mr. Storrow. Yes, sir. It would not Y>&y in proportion to other 
 opportunities. 
 
 STATEMENT OF DANIEL S. EMERY. 
 
 Daniel S. Emery appeared before the Commission. 
 
 The Chairman. Will you state to the Commission what your 
 business is? 
 
 Mr. Emery. I am a shipowner and ship broker. 
 
 The Chairman. Where do you sail vessels? 
 
 Mr. Emery. To all parts of the world when we can get freights for 
 them. 
 
 The Chairman. Are your vessels sailing vessels or steam vessels ? 
 
 Mr. Emery. Mostly sailing vessels. 
 
 The Chairman. The Commission will be pleased to hear your views 
 on the question that is before them. 
 
 Mr. Emery. Gentlemen, I can not say much. 1 think the ground 
 has been pi'etty well gone over at the previous hearings, as I have read 
 the reports of them. But we are here to ask some aid. As things 
 are gomg on now there is no chance for American vessels, either sail 
 or steam, to exist. I have been in the business of owning vessels fifty 
 years. Forty-seven }'ears the present firm has been in business. We 
 have owned in about 200 vessels in that time, and at the present time 
 we may have perhaps 30, mostly engaged in the coastwise trade. We 
 have been driven out of every other line — that is to say, some are going 
 on foreign voyages; but there is no money in it, not enough to pay 
 the insurance and interest on the capital. 
 
 The Chairman. You are in the coastwise trade, I assume, for the 
 reason" that the Government protects you in that trade by excluding 
 foreign ships? 
 
 Mr. Emery. That is it, exactly. 
 
 The Chairman. So you can afford to run your ships in the coastwise 
 trade ? 
 
 Mr. Emery. Yes, sir. 
 
 Within my experience, from where this building stands down to the 
 end of the wharf, vessels have come bringing cargoes from all parts 
 of the world, particularly the fruit business in the Mediterranean, 
 wool, etc. 
 
 Now there is not a sailing vessel that comes here or a vessel under 
 the American flag, hardly. There was some business left in the river 
 Plata, but that is monopolized mostlj^ by foreign vessels which can be 
 sailed so much cheaper than our own that we have about given it up. 
 
 Our laws for manning our vessels are so hard as compared with 
 foreign vessels that it costs us a great deal more, as 3'ou all know, to 
 sail the vessels. I have men in my employ who began as boys aiid 
 who have been in only two vessels. I have one man who has been in 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 527 
 
 only two vessels. He has been master for thirty years. He has 
 grown up in the business. He was making a good living at one time. 
 Now that man makes but very little. We can not ship crews. 
 
 LAWS FAVOR THE SAILORS. 
 
 1 will make this statement: As our laws exist we have no protec- 
 tion in shipping crews. I hear people talk about the hardships of 
 sailors. They never were better treated or fed than at the present 
 time, and laws have been made for the benefit of the sailor and not the 
 shipowner or the shipmaster. When an officer of a vessel goes to 
 sea to-day he takes his life in his hands. These men have been han- 
 dled by men on shore who put them up to all sorts of dodges, and the 
 discipline is nearly ruined on board American vessels. It is a question 
 now for a captain to ask a crew when the}'^ will go to sea instead of 
 the captain ordering them to come on deck when occasion requires 
 them. If we had laws to feed our men as the foreigners do, or even 
 as the English, it would help us. Our scale of provisions is far in 
 excess, and it costs more than it does to feed the men of our own Navy 
 or the English Navy. 
 
 Representative Minor. How about wages ? 
 
 Mr. Emery. Our wages are far ahead of ithem. The wages at pres- 
 ent in the coasting vessels are |30 per month in small vessels. When 
 you get to the larger ones thej'^ are $35. 
 
 Representative Minor. We recognize that fact, of course. It has 
 been testified to by everyone who has appeared before the Commission. 
 
 Mr. Emert. Yes. 
 
 Representative Minor. But how do the wages in the foi'eign trade 
 compare as between vessels sailing under the English flag and those 
 under the American flag? 
 
 Mr. Emery. When tney can ship the men away from home they are 
 shipped at a much lower rate, but when they come here I believe they 
 have to pay about the same wages as we do for the sailors. 
 
 Representative Minor. Do you think the port regulates the wages 
 rather than the flag? 
 
 Mr. Emery. I think it does. 
 
 The Chairman. That does not apply to the officers, of course ? 
 
 Mr. Emery. Not to the officers. 
 
 AMERICAN CAPTAINS AND OFFICERS. 
 
 Representative Minor. Your officers must be American citizens ? 
 
 Mr. Emery. They must be American citizens, and they get much 
 better pay. 
 
 Representative Minor. What is the difference between the pay of 
 a captain on an American ship under the American flag and a German 
 captain under the German flag? 
 
 Mr. Emery. An American captain on board an American vessel, 
 the way the vessels are sailed, would make from $150 to $200 per 
 month. They sail generally on what we call wages and primage. I 
 think if that captain sailed on a German ship ne would get £15 a 
 month. 
 
 Representative Minor; Approximately $75 ?' 
 
528 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Mr. Emery. Yes, sir; and we pay some of our officers $60 to $65 a 
 month. 
 
 The Chairman. Do you find it difficult to procure competent officers 
 for yOur A'essels? 
 
 Mr. Emery. Yes, sir; very difficult, indeed. That is another thing. 
 They have to be licensed, and men in whom we have perfect confi- 
 dence may not be fully or well enough educated to receive a license, 
 and while they may have served us well and never have made any mis- 
 takes and never lost any vessels, they can not get a license. 
 
 The Chairman. Would an enlarged number of ships, and therefore 
 better prospects of employment and advancement, tend to induce the 
 young men of the New England coast to engage in the seafaring busi- 
 ness ? 
 
 Mr. Emery. Yes, sir; I think it would. 
 
 The Chairman. It would tend to induce the young men of the New 
 England coast to return to the seafaring life ? 
 
 Mr. Emery. I think it would. 
 
 OPPOSED TO FREE SHIPS. 
 
 The Chairman. If you were authorized by our laws to buy ships, 
 say in Nova Scotia or England, and operate them in foreign commerce, 
 under the laws as they now exist, would you do so? 
 
 Mr. Emery. No, sir. I have had that opportunity many times, 
 and I bought once a wreck, wrecked in American waters, and put her 
 under the American flag, and one vessel we took for debt. I was 
 sorry for it forever afterwards. 
 
 The Chairman. Do you think free ships would tend to solve this 
 problem ? 
 
 Mr. Emery. Not at all. If we had free ships there would proba- 
 bly be a move to put them in the coasting trade, and that would ruin 
 what little we have. 
 
 The Chairman. And absolutely destroy every shipbuilding plant 
 in the United States ? 
 
 Mr. Emery. That is my idea. 
 
 Senator Mallory. I understood you to say that some of the Amer- 
 ican captains are paid $200 a month? 
 
 Mr. Emery. Yes, sir. 
 
 Senator Mallory. Referring to sailing vessels ? 
 
 Mr. Emery. Yes, sir; and some of them make more than that on 
 some of our large coasting vessels. 
 
 Representative MiNO . Speaking about the wages of these captains, 
 you seem to put the answer on the ground that they "make" more. 
 Is it in monthly pay ? 
 
 Mr. Emery. Yes, sir. The men have from $40 to $50 per month 
 and 5. per cent on the gross earnings of the vessel, as a rule. The 
 better the vessel does tne better the captain does. 
 
 Representative Minor. Certainly. 
 
 THE LAWS FOR SEAMEN. 
 
 Mr. Emery. Speaking of the law for seamen, as the thing is situ- 
 ated now, if we have vessels going to a southern port, although a man 
 h&s shipped regularly to make the trip, when he gets down there if he 
 
HEARINGS BEFOKB THE MERCHANT MARINE COMMISSION. 529 
 
 ^ants to leave he does so. We can not hold him. The men can hold 
 the ship to do anything, but we can not hold the crew. It has been 
 changed from year to year, and it has been made woi'se for the ship- 
 owner every time. 
 
 Senator Mallory. What modification of that law would j'ou suggest 'i 
 
 Mr. Emery. 1 would repeal every law we have and get up some law, 
 after consulting with people who understand about it, which would be 
 just to the shipowner and just to the sailor. I think the British law 
 is far ahead of ours. 
 
 Senator Mallory. Do you think the point you just called attention 
 to is a serious matter — that a man, after signing the articles, can quit 
 the ship before she leaves, and you can not compel him to stay aboard? 
 
 Mr. Emery. Yes, sir; very serious. 
 
 Senator Mallory. How would it do to reestablish the old rule 
 authorizing his arrest and imprisonment until he consents to go? 
 
 Mr. Emery. It would be the best thing that could be done. 
 
 I have a case, in mind of a ship we had down in Mississippi this 
 summer. The crew was shipped to go from New York to a Gulf port 
 and from there to Africa. When we got to the Gulf port the men left. 
 Other men ashore said, "We can get you a chance somewhere else." 
 They were men who held influence over them. The men were taken 
 out of the ship. When we were ready to go the vessel was detained 
 over a month getting a crew. These men left. We could not hold 
 them. We sent all over the Southern States, we sent to New Orleans, 
 and we got some men e^en from Boston to go down there. 
 
 The Chairman. Had they signed a contract to go ? 
 
 Mr. Emery. Yes, sir; but we could not hold them to the coiitraict. 
 
 Senator Mallory. The sailors, on the other hand, say that when 
 they come to a port and the captain finds he has to stay there some 
 time for cargo, meanwhile paying them big wages, he makes it so dis- 
 agreeable for the men that they go away. 
 
 Mr. Emery. They can say so, but it is not to a man's interest to 
 get rid of a crew and then pay double wages to get another one. There 
 is a good deal of this talk that is not according to the book. 
 
 Senator Mallory. We have had that testimony before the Commis- 
 sion. 
 
 Mr. Emery. I do not doubt it. This vessel of which I speak was over 
 a month getting a crew. The charterer of the vessel was in trouble. 
 He had a contract with a foreign government for his cargo. He was 
 after us every minute. All we could do was to wait. In order to get 
 a crew of 12 men I think they shipped about 31 men before they got 
 enough. They met with an accident and went into Key West, and 
 found someone there who wanted to put them in jail, but the voyage 
 was made without further trouble. 
 
 Here is a trade right at our door — the Cuban business. It used to 
 be a large, profitable business for Portland and Boston — large cargoes 
 out and cargoes back. Now, there is not an American vessel, except, 
 perhaps a half dozen last year, that are loaded in Cuba. We can not 
 disguise the fact that steam vessels have taken the place of sail vessels, 
 but even in steam vessels nobody but the ones who have mail contracts 
 can bring that sugar. It is all done by foreign vessels. 
 
 Gentlemen, I am very much obliged to you. 
 
 3a— 04 34 
 
530 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 STATEMENT OF GORDON ABBOTT. 
 
 Gordon Abbott appeared before the Commission. 
 
 The Chairman. Kindly state to the Commission in what line of 
 business you are engaged. 
 
 Mr. Abbott. 1 am president of the Old Colony Trust Company. 
 
 The Chairman. Your company, I suppose, is in the habit of invest- 
 ing money where it can see a profit? 
 
 Mr. Abbott. Always. 
 
 The Chairman. Did you hear the statements of Mr. Peabody and 
 Mr. Storrow? 
 
 Mr. Abbott. No, sir; I am sorry to say I just arrived. 
 
 The Chairman. Mr. Abbott, the Commission would be glad to have 
 an expression of opinion from you as to whether or not, under the 
 existing conditions of the merchant marine engaged in the foreign 
 trade and the existing laws, parties contemplating the building of 
 American ships for the foreign trade would be apt to find ready 
 capital for that purpose? 
 
 Mr. Abbott. I should say it would be very difficult under existing 
 conditions and existing laws. 
 
 The Chairman. If conditions changed so that it looked like profit- 
 able business, I suppose there would be no more difficulty in getting 
 capital for that business than for any other? 
 
 Mr. Abbott. I think it would be relatively fully as easy. Always, 
 until within a few years, a very large number of people in New Eng- 
 land have been interested in shipping. I think the traditions still 
 exist here. But I think the New Englander is anxious to see where 
 he is going to get a dollar back for the one he puts in, and I think it 
 will require some change in existing conditions to make our people 
 willing to invest largely. 
 
 Senator Lodge. You have some knowledge about the shipbuilding 
 industry, and what you saj- applies to it in the same way? 
 
 Mr. Abbott. Decidedly. In my experience with shipbuilding, 
 there is almost no deep-sea tonnage being built at the present time. 
 The work is principally for coasting or for the Government. 
 
 STATEMENT OF ALBERT CLARKE. 
 
 Col. Albert Clarke appeared before the Commission. 
 
 The Chairman. I believe you are secretary of the Home Market 
 Club? 
 
 Mr. Clarke. Yes, sir. 
 
 The Chairman. You are acquainted, I presume, with the duties 
 of the Commission, in pursuit of which they are in Boston to-day. 
 
 Mr. Clarke. Yes. 
 
 The Chairman. The Commission will be pleased to hear from you 
 any views you may have on the subject. 
 
 Mr. Clarke. 1 believe I am expected to present the views of others 
 rather than my own. 
 
 The Home Market Club is composed very largely of manufacturers, 
 chiefly in New England, and there are very few of its members interested 
 directly in the shipping question, but all feel interested indirectly, in the 
 matter of seeking foreign markets for their products. 
 
HEARINGS BEFOEE THE MERCHANT MARINE COMMISSION. 531 
 
 At a meeting of the officers of the Home Market Club, one year ago 
 this month, all the New England States being represented, the follow- 
 ing preamble and resolution were adopted: 
 
 ^' Whereas shipping in the foreign trade is the one American industry 
 which is not protected, and as attempts to enact a subsidy law have 
 thus far failed, and are opposed b}'^ many of the most enlightened pro- 
 tectionists in and out of Congi'ess: 
 
 '"'' Resolved, That it may be well to consider some other method, and 
 we see no good reason why shipping should not be protected by duties, 
 like agriculture, manufactures, and mining." 
 
 It occurred to us a little later to make a canvass of public opinion 
 throughout the country, chiefly of people not directly interested in 
 shipping, and we prepared a circular and sent it to about 3,500 presi- 
 dents of banks, presidents of colleges, and leading manufacturers for 
 the purpose of making a test of the sentiment of presumably enlight- 
 ened and influential men, mainly outside of the shipping interest. 
 Three questions were submitted: 
 
 (1) Should there be a revival of discriminating duties and other 
 regulations of commerce? 
 
 (2) Should subsidies be paid? and 
 
 (3^ Should foreigners be allowed to continue to appropriate our 
 foreign-carrying trade ? 
 
 DISCRIMINATING DUTIES PBEFEEEED. 
 
 Only 703 replies were received, but they came from all parts of the 
 country. Four hundred and fifty-six favored duties and regulations; 
 132 favored subsidies; 86 favored both; 29 were opposed to either, 
 and this proportion ran very evenly through the different sections of 
 the country. 
 
 In New England 256 favored duties and regulations; 62 subsidies; 
 
 55 both; 6 neither. 
 
 In the Middle States 73 favored duties and regulations; 30 subsidies; 
 8 both; 7 neither. 
 
 In the South 63 favored duties and regulations; 19 subsidies; 15 
 both; 9 neither. 
 
 In the West 53 favored duties and regulations; 13 subsidies; 6 both; 
 6 neither. 
 
 On the Pacific coast 11 favored duties and regulations; 8 subsidies; 
 2 both; 1 neither. 
 
 One hundred and thirty -three expressed opinions. I have marked 
 
 56 of them for presentation to this Commission, if they are desired. 
 Many of them are quite brief. Some are at a little greater length. 
 Now, it Is for the Commission to decide whether or not to hear them. 
 
 The Chairman. Perhaps if you would read a limited number from 
 each section of the country and then submit the remainder for incor- 
 poration in our report, it would be the most satisfactory way. 
 
 Mr. Clarke. I will try to do that. First, I will read a few which 
 were opposed to doing either. 
 
 OPPOSED TO everything. 
 
 Mr. Arthur T. Lyman, of Boston, a very prominent citizen, presi- 
 dent of several large cotton-manufacturing companies, said he was 
 
532 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 decidedly opposed to subsidies, considering them "the most corrupt- 
 ing form of protectionism. * * * Freedom from restraint on the 
 part of Government is the chief thing to be secured. Then we could 
 have the ships, etc., if it paid; if it did not, we have plenty to do 
 that will pay, and may as well let other people do our carrying for 
 less cost." 
 
 The Chairman. Mr. Lyman, 1 believe, represents a highly pro- 
 tected industry? 
 
 Mr. Clarke. Yes; 1 think all the manufacturing industries with 
 which he is connected are protected. 
 
 Mr. James S. Murdoch of Charleston said: " We should be allowed 
 to buv ships in the cheapest market and import all materials free of 
 duty." 
 
 The Beckman Company, of Cleveland, Ohio said: "Let the fool 
 tariff laws against foreign shipbuilding materials be taken off, and 
 allow Americans to buy ships wherever they can buy them cheapest, 
 and give such ships an American registry. Ship subsidy is only a 
 graft for already over- rich monopolies." 
 
 Senator Lodge. The tariff laws admit free all shipbuilding mate- 
 rials, do they not? 
 
 Mr. Clarke. They do; but he did not know that. 
 
 Senator Lodge. He called them "fool laws." That is what struck 
 me. 
 
 Mr. Clarke. Mr. L. D. Hines, president, Tupelo Cotton Mills, 
 Tupelo, Miss., said: "If we can not do the work as cheaply as our 
 neighbors, let them have it." 
 
 Mr. John Poncet, president, Balas Freres, Limited, Hoboken, N. J. , 
 a foreign shipping interest, as 1 understand, replied: "We answer 
 emphatically no to your three questions. Nothing should be done, 
 and the best ships with the cheapest freight should be allowed to con- 
 tinue, etc. , as it may please their owners or as competitors, not chance, 
 may determine." 
 
 Senator Lodge. They are agents of foreign ship lines ? 
 
 Mr. Clarke. That is my understanding. 
 
 Mr. J. C. Collier, of Barnesville, Ga., said: "Nothing should be 
 done. The United States has the brains and the cash that will enable 
 them to compete with any nation, if developed." 
 
 Mr. J. H. Miller, of Waxahatchie, Tex., said: " Let foreigners have 
 it if they have more enterprise than we have." 
 
 Mr. T. M. Osborne, a manufacturer of harvesting machinery in 
 Auburn, N. Y., said: "It seems to me a problem perfectly simple of 
 solution. Take off the duties upon shipbuilding materials and let the 
 American marine take care of itself. Commerce does not need regu- 
 lating, it needs more fi'eedom. The subsidy system is the robbing of 
 a great many Peters to pay one Paul." 
 
 The Chairman. Another gentleman who is laboring under a hallu- 
 cination. 
 
 Mr. Clarke. Certainly; and there are others. 
 
 Mr. Horace Bumstead, Atlanta University, Atlanta, Ga., said: 
 " Nothing should be done except to abolish all duties." 
 
 John G. Fletcher, Little Rock, Ark., said: " I am opposed to sub- 
 sidies of all kinds, and especially from the Government. This coun- 
 tiy is able to stand up against the world on every part of the ground. 
 Equal rights to all, special privileges to none.' " 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 533 
 
 Senator Lodge. Did he state whether he was opposed to appropria- 
 tions for the Mississippi River? 
 
 The Chairman. Or the fast subsidized mail to the South? 
 
 Mr. Clarke. 1 think I have read every word he wrote. 
 
 Mr. Clarke. Mr. A. L. Lowrey, of Hillsboro, Tex., replied: "No 
 duties except for revenue. Emphatically no subsidy. If we have not 
 the brain, nerve, and money to compete, justice demands we let for- 
 eign nations have the business." 
 
 PRESIDENT ELIOT's OPINION. 
 
 President Charles W. Eliot, of Harvard University, replied: "I am 
 clearly of the opinion that much should be done to revive American 
 commerce and navigation. 1 believe that the following measures would 
 restore American snipping to the high seas, and cure the deplorable 
 maritime inferiority into which the United States has fallen : (1) Give 
 American registers to vessels owned by American merchants wherever 
 procured. (2) Put on the free list all materials which enter into the 
 building or equipping of merchant vessels. (3) Admit free of duty 
 all raw materials of American manufactures, and all materials used in 
 such manufactures which are in a comparatively crude state, such as 
 ores, oils, hides, lumber, and wools. My -belief is based on the follow- 
 ing propositions: First, that commerce on the high seas is inevitably 
 a matter for international competition ; secondly, that American man- 
 ufactures have passed the baby stage and are competent for world- 
 wide competition; and thirdly, that the home market has been for 
 some years past entirely insufficient to secure to American labor and 
 American capital steady, profitable employment." 
 
 Perhaps that is all I need to read of those on that side of the ques- 
 tion. 
 
 The Chairman. Apparently President Eliot is in favor of permitting 
 foreign vessels to enter the coastwise trade as well as the foreign trade. 
 Would you not judge so from his reply ? 
 
 Mr. Clarke. I think that inference is legitimate, but of course he 
 did not say so. 
 
 IN FATOR OF POSITIVE ACTION. 
 
 President L. Clark Seelye, of Smith College, Northampton, Mass., 
 replied: " Discriminating duties and other regulations of commerce 
 should be employed." 
 
 Theodore Harris, president of the Louisville National Banking 
 Company, Louisville, Ky., said: "Although living in the interior, I am 
 decidedly in favor of building up our merchant marine. I have not 
 thought enough about it to be able to form an opinion of what would 
 be the best means. I can see great objections to subsidy and probably 
 objections can be found to any means that are suggested. The only 
 thing to do in that event is to take the means that are least objection- 
 able. It is humiliating to an American who goes abroad to see in 
 every port he visits all flags except his own; which, measured by the 
 importance of his country, he feels should be everywhere preeminent. 
 If it is possible to build ships in America, which with reasonable 
 encouragement can compete with ships of other nations, I should say 
 by all means build them here. If that can not be, let us invite them 
 from abi'oad." 
 
534 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Mr. R. H. Mountcastle, of Knoxville, Tenn., said: "I would be in 
 favor of all merchandise on ships flying foreign flags brought into this 
 country paying 5 per cent more duty than imports coming in boats 
 flying the American flag, but would not be in favor of subsidies, as it 
 is leaning most too muca toward direct discrimination." 
 
 Curtis Guild, jr., present lieutenant-governor of the Commonwealth 
 of Massachusetts, replied: "A subsidy system should be applied. If 
 this is the system of bats and owls (as claimed by the New York 
 Evening Post), it is at least the one just indorsed by England as to the 
 Cunard Line." 
 
 Mr. Eben S. Draper, of the Draper Companj'^, Hopedale, Mass., large 
 manufacturers of cotton machinery, replied: "I think either the first 
 or the second policy should be adopted, and possibly some of both." 
 
 Mr. E. W. Morris, of Hartford, Vt., said: "Yes, as to the first two. 
 I do not approve of foreign nations carrying our goods, only as a 
 necessity." 
 
 Mr. John F. Hyde, of Bath, Me. — I believe he is a member of a 
 shipbuilding firm there— replied: "Discriminating duties, etc., with 
 a subsidy to such vessels as would be suitable for the Government's 
 use as cruisers or transports in time of war. In return for such sub- 
 sidy said vessels to be built and tried under Government inspection, 
 and to be under contract to 'be delivered up to the Government, on its 
 order, when wanted." 
 
 Mr. Charles F. Meserve, president Shaw University, Ealeigh, N. C, 
 said : " I have for a long time considered as very unwise the policy of the 
 United States Government that has done about all it could to strengthen 
 the foreign merchant marine and weaken its own. Under a wise sys- 
 tem of protection our coastwise and inland commerce has assumed 
 enormous proportions. Millions of dollars are profitably invested, 
 and thousands of men are receiving employment at good wages. It 
 seems to me a foolish and weakening policy that allows the enormous 
 exports and imports of the United States to be carried in vessels that, 
 with a few exceptions, are owned by foreign nations. There ought to 
 be discriminating duties and other regulations of commerce, so that a 
 just proportion of our exports and imports can be carried in American 
 bottoms. If this very desirable end can be brought about in no other 
 way, I heartily favor a subsidy system, as generously administered as 
 may be necessary, to restore and maintain a merchant marine of such 
 extent that the flag of the United States shall be seen and recognized 
 on all seas as the standard of the most progressive and enterprising of 
 the nations of the earth." 
 
 A merchant's opinion. 
 
 Mr. Eobert W. NeflP, an importing merchant of Boston, replied: 
 "Yes, to first; provided duties could go into effect upon a sliding 
 scale, that is to say, a 10 per cent duty might be assessed on free 
 goods, provided they were brought here in foreign tonnage, one- 
 quarter of this duty to apply after two and a half years, one-half after 
 five years, and so on up to a period of ten years. This opinion is 
 based upon the fact that we have now, in the Far East, goods which have 
 been awaiting a vessel since last March, and only succeeded at this 
 time in getting one of foreign register, nothing of American register 
 
HEARINGS BMyORE THE MERCMAN'r MARINE COMMISSION. 535 
 
 being available. At times it is absolutely impossible to procure any- 
 thing of American register, owing to the fact that the goods are too 
 low in cost to afford a steamer freight, and there is very little Ameri- 
 can tonnage in existence. A duty placed upon these goods immedi- 
 ate!}'^ would be a hardship, but if assessed in the method given, would 
 not be, as it would allow ample time for the building up of an Ameri- 
 can fleet." 
 
 Mr. W. C. O'Neal, of Pensacola, Fla. — I presume Senator Mallory 
 knows him — replied: "Personally 1 favor a law for discriminating 
 duty, allowing imports brought in American vessels a reduction of in 
 per cent, to apply only to vessels owned by Americans and using the 
 American flag. I would also favor the giving of the mail contracts to 
 such vessels as would be valuable auxiliary cruisers for the Navy in 
 case of war with a foreign power." 
 
 A SHIPBUILDER S VIEW. 
 
 Mr. F. W. Wood, president of the Maryland Steel Company, at 
 Sparrows Point, Md., a company which manufactures ships as well as 
 other things from steel, replied: "1 am distinctly of the opinion that 
 prompt governmental aid in some form should be given to American 
 shipping to compensate for the higher costs of construction and opera- 
 tion due to our protective system and the restrictions imposed by our 
 navigation laws. I believe a direct subsidy would have the effect of 
 increasing the tonnage under the American flag more rapidlj' than a 
 sj'stem of discriminating duties. That such a policy would be effective 
 was clearly demonstrated three years ago, when it was expected that 
 legislation along these lines would be enacted, by the large tonnage 
 ordered from American shipbuilders for use in the foreign trade." 
 
 The various opinions expressed in response to the circular, omitting 
 those quoted in full by Mr. Clarke, are as follows: 
 
 In favor of either the first or the second propositions, according to 
 the character of the service. — William Gammell, Providence, R. I. 
 
 A reasonable subsidy honestly administered is probably the best. 1 
 am strictly American and want to see our own ships carry our com- 
 merce out and in. — J. J. Littlejohn, Jonesville, S. C. 
 
 1, yes. 2, no. 3, no; don't let 'em do it. — J. A. Smith, president 
 Bessemer City (N. C.) Cotton Mills. 
 
 No, to questions 1 and 2. When there is money in the business 
 American capitalists will enter the field. — Wm. G. Nichols, Chester, S. C. 
 
 2, yes. Something should be done. — S. Briggs, Jamestown, N. Y. 
 Neither. This nation, leading all others financially, will furnish 
 
 ample private capital, if there is profit in it. — Halsey C. Burr, Iron- 
 ton, Ohio. 
 
 Questions 1 and 2, yes. Something should be done to prevent for- 
 eign nations from appropriating our navigation. — James Caven, presi- 
 dent, Saranac Silk Mills, 1416 North street, Philadelphia, Pa. 
 
 In my opinion the first or second course should be adopted. I am 
 averse to changing in any way our protective tariff, and being a pro- 
 tectionist, think that our marine should be protected. — George H. Fitz- 
 gerald, Island Pond, Vt. 
 
536 HEARINGS BEFORK THE MERCHANT MARINE COMMISSION. 
 A FREE TRADE REPI^Y. 
 
 Question No. 1, no, in general; but too vague for short answer. 
 No. 2, decidedly not— the most corrupting form of protectionism. No. 
 3, it does not seem to be our commerce if others are carrying it on. 
 Freedom from restraint on the part of Government is the chief thing 
 to be secured. Then we could have the ships, etc., if it paid; if it did 
 not, we have plenty to do that will pay, and may as well let other peo- 
 ple do our carrying for less cost. — Arthur T. Lyman, Boston, Mass. 
 
 (Mr. Lyman is president of several large manufacturing companies 
 and is a well-known free trader.) 
 
 To first question, yes. 1 firmly believe something should be done. 
 Either method would be better than the present policy. — JohnS. Fay, 
 Marlboro, Mass. 
 
 I believe either the first or second proposition should be adopted, 
 but am not clear as to which is to be preferred. — J. M. Bassett, 
 Worcester, Mass. 
 
 American shipping, it seems to me, like all other of our industries 
 and interests, should be brought under the great principle of protec- 
 tion, not indiscriminate, exorbitant, and unreasonable, but such as 
 Williani McKinley and his like would approve. If more than this is 
 required to encourage and establish an American marine, it shows 
 that natural conditions favor other treatment of American commerce. 
 Let us try duties. — H. L. Wade, Waterbury, Conn. 
 
 ****** * 
 
 In my opinion our S3^stem of high protective tariffs creates arti- 
 ficial prices for products and for labor; so that it is not practical 
 to have a prosperous ocean business where free trade must to a large 
 degree prevail. We ought to lead the world in ocean trafiic, but this 
 seems impossible so long as we adhere to the idea that high prices 
 mean the highest degree of prosperity. Dispense with artificial prices 
 caused by unreasonable tariffs and we can beat the world in the mar- 
 kets of the world and also on the high seas. — Isaac W. Lamb, Perry, 
 Mich. 
 
 No, to questions 1 and 2. Yes, to 3. Let the fool tariff laws against 
 foreign shipbuilding materials be taken off, and allow Americans to 
 buy ships wherever they can buy them cheapest and give such ships 
 an American registry. Ship subsidy is only a graft for already over- 
 rich monopolies. — The Beckman Company, Cleveland, Ohio. 
 
 I am in favor of your second question as the first choice of remedies, 
 and of the first as the second choice, but would accept either rather 
 than delay by discussion. In view of our policy as a nation in pro- 
 tecting, building up, and maintaining our other protective interests, 
 which is wise, judged by results, I can not understand why we have 
 made an exception of our shipping. Our payments to foreign ship- 
 owners for carrying our freights constitute perhaps the most serious 
 draft upon our ti'ade balances, as shown by custom-house returns. — 
 J. F. Hanson, president Bibb Manufacturing Company, Macon, Ga. 
 
 No; duties for governmental purposes only. No subsidy system 
 wanted for any purpose. No tariff for protection of any interest or 
 any private interest. A tariff tax for revenue only, judiciously applied, 
 and not on iron or any raw material or trust jaroduct. — George M. 
 Goodwin, Nashville, Tenn. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 537 
 
 Neither. If we can not do the work as cheaply as our neighbors, 
 let them have it.— L. D. Mines, president Tupelo Cotton Mills, Tupelo, 
 Miss. 
 
 Duties, yes; doubt the wisdom of subsidies. It seems to me high 
 time that something should be done to put our shipping to the front. — 
 James F. Chase, Boston. 
 
 1, yes; 2, no, except other means fail. National security and the 
 welfare of commerce demand protection. — A. T. Stearns,- Neponset, 
 Mass. 
 
 Either first or second. The Administration's policy is mine for the 
 time being. O, fudge! to 3. — Frank E. Tuttle, Chicopee, Mass. 
 
 To questions 1 and 2, no. Teach our sturdy manhood of this country 
 to not depend on the Government but themselves; and once for all, let 
 them know the Government does not intend to treat them as infants 
 or their efforts as infant industries. They will abandon then their 
 expectant attitude, which no doubt has delayed already the beginning 
 of shipbuilding, and we will in a few years have a merchant marine 
 built on independence. — F. B. Cole, Newnan, Ga. 
 
 1. Yes. 2. By no means. 3. Very important that something be 
 done. — A. F. Swanton, Lowell, Mass. 
 
 I would not be in favor of any additional -duties. I would be in 
 favor of a substantial allowance on all import duties collected, the 
 rebate to be paid to the owners (if citizens of the United States, not 
 otherwise, and provided further if the vessels were built in the United 
 States) of our merchant marine. A law of this kind would serve a 
 double purpose : First. Encourage the building and owning of a mer- 
 chant marine in the United States. Second. A practical reason for 
 not lowering the present import or protective duties. — C. H. Bowen, 
 249 North Main street, Pawtucket, li. I. 
 
 Something should be done to restore our commerce to American 
 vessels. Why not renew what succeeded in the past? — George H. 
 rinkham, Boston, Mass. 
 
 Yes, to duties. Do nothing in preference to a subsidy system. — 
 P. C. Withers, president Koyal Knitting Company, Chester, 111. 
 
 Prefer the first method, if duties are rightly adjusted. Present 
 schedules were the result of careful inquiry. New schedules can be 
 made from time to time, as conditions seem to demand. — Frank Leake, 
 Philadelphia, Pa. 
 
 Although we do not feel able to go into a full and intelligent discus- 
 sion of the issue that you raise, we feel very strongly that our mer- 
 chant rharine can not properly be fostered by discriminating duties 
 nor by a subsidy system. — Albert F. Bemis, secretary Bemis Broth- 
 ers Bag Company, Boston, St. Louis and other places. 
 
 GO BACK TO HISTORIC POLIcr. 
 
 I, 
 
 In regard to an American merchant marine, it seems to me we 
 better follow out the original intent expressed in the Constitution of 
 our United States when it was adopted. If we have departed there- 
 from, let us get back there as rapidly as possible. It seems to me the 
 merchant marine should have been treated in the same manner as other 
 questions of development, such as manufacturing, etc., for with this 
 country's two great coast lines it would probably have been away to 
 the front in commerce long before it attained its present position in 
 
538 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 manufacturing, partly because it costs nothing to sail over the seas, 
 whereas land to build on and water power to run with cost clean 
 cash. — Jos. W. Green, jr., Glendale Elastic Fabrics Company, East- 
 hampton, Mass. 
 
 Yes; discriminating duties and other regulations of commerce. — 
 M. W. Stryker, president Hamilton College, Clinton, N. Y. 
 
 In my judgement the first proposition is the best bjr all means.— 
 George A-. Gray, president Gastonia Cotton Manufacturing Company, 
 Gastonia, N. C. 
 
 1 believe in protecting our commerce and navigation, but just the 
 best method 1 don't know. — Adelbert D. Thayer, Franklin, Mass. 
 
 Yes; to the third. We believe in the eternal fitness of things, the 
 survival of the fittest. — D. K. Norris, Cateechee, S. C. 
 
 Yes; to second. A subsidy system should be applied only to first- 
 class vessels, as we believe that no other should be used or assisted by 
 the United States Government, as there seems to be so much life and 
 property endangered that the best is not too good for the purpose 
 wanted. We would also advocate that said vessels be built according 
 to United States Government specifications in every particular, as we 
 believe that inspection made according to them will be the most bene- 
 ficial and reliable for the people.— R. A. Carter, president Mononga- 
 hela Iron and Steel Company, Pittsburg, Pa. 
 
 I am in favor of the first on general principles. It is the legitimate 
 and sensible way. Then business meets business, and trade is regu- 
 lated. Yet there may arise exigencies where a subsidy would be wise 
 to adopt for a time, i. e. , in developing trade in untried or new loca- 
 tions. So I favor a careful use of the second, in a wise discretion. 
 The third I am not in favor of at all. — N. P. Frye, North Andover, 
 Mass. 
 
 Favor right form of subsidy: failing to agree on that, then consti- 
 tutional means. — S. Henry Skilton, commission merchant, Boston. 
 
 I favor the first, but am not opposed to the second. — John A. Hines, 
 University of Pennsylvania, Gettysburg. 
 
 No. 1, yes. No. 2, too political. No. 3, un-American.— A. B. 
 Church, Buchtel College, Akron, Ohio. 
 
 Yes, to the second. People of the West and central West don't like 
 the word "subsidy," but I think would agree on a discriminating duty 
 in favor of American-built ships. — William L. Brown, president 
 American Shipbuilding Company, Rookery, Chicago, III. 
 
 I do not favor taxing the many for the benefit of the few, whether 
 it be by discriminating duties or ship subsidies. — T. M. Adams, Ash- 
 land, Ky. 
 
 Not one contract for vessels for foreign trade made by American 
 shipyards this year. I am in favor of direct subsidies. — Calvin Wells, 
 Pittsburg, Pa. 
 
 Discriminating duties and other regulations, sometimes, yes. Sub- 
 sidies, no. That nothing should be done does not follow.— W. D. 
 Thompson, Ohio State University, Columbus, Ohio. 
 
 I believe that legislation in this countrj^ instead of being directed 
 to the support of the weak, is very largely adapted to increase, by 
 un]ust and wicked ways, the wealth of those already strong and rich. 
 1 think the result is the building up of a rich moneyed aristocracy as 
 base and criminal and cruel as any the world has ever known. Instead 
 h i^^l 'V'^j *°'' increasing present tendencies in that direction, I 
 snoum be glad to see something done to compel rich men and corpora- 
 
HEARINGS BERORE TSK MERCHANT MARINE COMMISSION. 539 
 
 tions to obey the laws. If rich men were sent to prison as promptly 
 as poor men are for offenses against the laws, 1 think the country 
 would in every respect be greatlj' benefited. I should like to see the 
 men who trampled the interstate commerce law and the laws respect- 
 ing trade combinations imprisoned for life. I think if three or four 
 convictions of this kind could be had, the atmosphere would be mar- 
 velously cleared. — Chas. A. Blanchard, president Wheaton College, 
 Wheaton, 111. 
 
 I answer yes to your first question as the most practicable way to 
 benefit foreign shipping. There are some objections to the subsidy 
 system, and there are many opportunities for those unfriendly to a 
 revival of our foreign commerce to find fault and prejudice the public 
 against it. It seems to me the way to use the power of discriminating 
 duties is to reduce the duties a certain per cent on all goods imported 
 in American ships. The free traders and tariff reformers would not 
 oppose it, it seems to me, because they would think it a step in the 
 direction in which they are constantly working; whereas to add to 
 the duty on goods imported in foreign ships would look like an increase 
 of protective tariff'. But I realize it will be a difficult problem to 
 rebuild our foreign shipping so long as wages on American ships are 
 so much in excess of the pay for similar positions on foreign ships. 
 Even if we could build ships as cheaply as can be done in foreign 
 countries, the expense of running them is so much greater that it has 
 put our vessels at such a disadvantage that it is almost impossible for 
 them to compete with the foreign ships. — E. M. McPherson, Boston, 
 Mass. 
 
 Something should be done to improve conditions. Either of the 
 first two, or some other method, as Congress may deem best. — Lew 
 C. Hill, Boston. 
 
 It is logical and consistent that the people of the United States 
 should do something on the sea as well as on the land — and if it didn't 
 pay it strikes one that it wouldn't be done at all. If it pays others 
 and other countries it surely should pay us and our country. ' It seems 
 to me that the first method would, on the whole, be the best to try. 
 Certainly it is time to stop the last method proposed. — C. M. Cone, 
 Hartford Woolen Company, Hartford, Vt. 
 
 A VOICE FOR SUBSIDY. 
 
 My reasons for subsidizing our steam marine is simply this: Eng- 
 land, though claiming to be a free-tariff' country, when it comes to her 
 merchant marine, is the greatest protectionist of any country on earth, 
 subsidizing steamers to all parts of the world, and the result is she is 
 master of the merchant marine transportation of the nations. Hence 
 we must foster the merchant marine of our country, the same as we 
 have done by our manufacturing industries. For'them we made a 
 protective tariff; for our merchant marine subsidize American bottoms 
 to the exclusion of foreign bottoms. When I was off on my last trip 
 to Europe, I felt humiliated to see English, German, and French lines 
 doing the carrying trade of the United States to the Continent. It 
 would give us greater prestige in foreign countries if our flag were 
 seen on all steamers carrying American imports or exports. South 
 America has a big carrying trade outside of the regular lines of steam- 
 ers, done by tramps, and all this done by vessels flying other than the 
 
540 HEARINdS BEKORE THK MERCHANT MARINE COMMISSION. 
 
 Stars and Stripes.— J. W. Doubleday, Empire Worsted Mills, James- 
 town, N. Y. 
 
 Although living in the interior, I am decidedly in favor of building 
 up our merchant marine. I have not thought enough about it to be 
 able to form an opinion of what would be the best means. I can see 
 great objections to subsidy and probably objections can be found to 
 any means that are suggested. The only thing to do in that event is 
 to take the means that are least objectionable. It is humiliating to an 
 American who goes abroad to see in every port he visits all flags except 
 his own, which, measured by the importance of_ his country, he feels 
 should be everywhere preeminent. If it is possible to build ships in 
 America, which, with reasonable encouragement, can compete with 
 ships of other nations, I should say by all means build them here. If 
 that can not be, let us invite them from abroad. A merchant once in 
 Nova Scotia wished to come here and become a citizen of the United 
 States. Upon inquiry he found that be could bring jiere all of his 
 possessions and have for them American protection — all but his ships. 
 For these he could not obtain a registry. It struck me as absurd; 
 while we were holding out our arms to poverty and ignorance and 
 often, too, to vice, an intelligent merchant and useful member to 
 society anywhere was refused entrance. For unless he could bring 
 his ships he could not come himself. — Theodore Harris, president 
 Louisville National Banking Company, Louisville, Ky. 
 
 Yes, to the first question. Opposed to subsidies. Deem longer 
 neglect a misfortune. — James E. Rankin, president Henderson Cotton 
 Mills, president Coquillard Wagon Works, Henderson, Ky. 
 
 Subsidy as soon as possible. Fight with their own weapons until a 
 better method can be devised. — E. B. Kimball, Burlington, Vt. 
 
 Duties in favor of American ships. No subsidy unless paid as boun- 
 ties to American seamen in American ships. — John Barker, Dover, 
 N. J. 
 
 No, to the first two questions. Legislation should be secured which 
 will give us equality with foreign laws; then let our shippers compete 
 fairly and freely with foreign shipping. — E. B. Campbell, National 
 Newark Banking Company, Newark, N. J. 
 
 The question of discriminating duties or subsidies I believe to be a 
 mere question of expediency. That is, I do not believe any valid con- 
 stitutional objection can be urged against either. And as between 
 these two methods of recovering our foreign carrying trade, I should 
 prefer the former if we were entirely free to choose. But I have 
 supposed, for reasons often stated by Messrs. Frye, Dingley, and 
 others, and. suggested in paragraph 10 of your circular letter, that we 
 are not wholly tree to choose, and that the method of discriminating 
 duties is, on the whole, inexpedient. So supposing, I am in favor of 
 subsidies. I am not at all afraid of the name or of the common argu- 
 ments against them. If their primary purpose were to benefit those 
 engaged in the shipping industry, at the expense of the rest of the 
 country, they would hardly be justified, but the purpose is the resto- 
 ration of our mercantile marine, and they would be amply justified, of 
 course, by such restoration. — Barrett Potter, attorney at law, Bruns- 
 wick, Me. 
 
 I believe that every constitutional means should be used to foster, 
 protect, and encourage our shipbuilding industries, to the end that the 
 United States may be in a position to recover what we have lost of our 
 foreign carrying trade.— Miles M. O'Brien, New York. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 541 
 
 A duty should be put on all items to protect American workmen 
 and merchants, and tne Government give all the aid that it possibly 
 can by appropriations and subsidies and take full and good care of all 
 American ships and be loyal to the flag and the United States. — James 
 H. Gay, president John Gay's Sons, manufacturers of carpets, Phila- 
 delphia, Fa. 
 
 I do not believe that a subsidy system would remedy the evil from 
 which we are suffering. It would be much better to return to the 
 original policies of the fathers, as indicated in their action in Con- 
 gress the first thirty yeari of our existence as a nation. By some con- 
 stitutional legislation commerce should be so regulated as to employ 
 our own vessels in the carrying trade of our growing country. ^Henry 
 D. Holton, Brattleboro, Vt. 
 
 Yes, to the first. 1 would be in favor of all merchandise on ships 
 flying foreign flags brought into this country paying 5 per cent more 
 duty than imports coming in boats flying the American flag, but.would 
 not be in favor of subsidies, as it is leaning most too mudi toward 
 direct discrimination. — R. H. Mountcastle, Knoxville, Tenn. 
 
 I am unwilling by my silence to seem indifferent to your communi- 
 cation, but categorical answer, in form proposed, is impracticable to 
 me, and I do not care to inflict an essay upon you. The imperative 
 need of the hour is honest legislation, based upon principle. Unscrup- 
 ulous grabbers are likely to send prosperity to perdition. I became a 
 protectionist many years before the Republican party adopted that 
 policy. Protection then was definable as a principle clearly under- 
 stood. I am looking sadly upon the probable overthrow of protection, 
 not by the advocates of free trade, but by the abuses of the principle 
 at the hands of its pretended friends; and from this cause the worthy 
 principle of subsidy has failed to produce its possible gains for national 
 prosperity. I am satisfied that, under existing conditions, we have 
 very little hope from purely selfish legislation, and I fear that the peo- 
 ple are not yet sick enough to be moved to insist upon honesty at 
 Washington. 1 try very hard to avoid pessimism, but 1 have to accept 
 the position that theories do not cover our nation's needs at the present 
 time. — Henry B. Metcalf , Pawtucket, R. I. 
 
 If we can not get your first proposition adopted then let us have the 
 second, anything rather than the present degrading condition of 
 affairs. — A. H. Hews & Co., North Cambridge, Mass. 
 
 Think we have tried the let-alone policy long enough. — William A. 
 Ainey, Allentown, Pa. 
 
 I think either the first or the second policy should be adopted, and 
 possibly some of both. In regard to the third question, I should 
 answer, no. — Eben S. Draper, Hopedale, Mass. 
 
 It is the patriotic duty of our people to set to work at the earliest 
 possible day to recover our lost merchant marine service, and it is. by 
 a system of discriminating duties and other regulations along similar 
 lines that the object can be accomplished. An appeal to Congress 
 should be made at once. It would be better to give a reduction to 
 imports in American ships, so as not to antagonize the tariff reformers. — 
 Silas W^. Gardiner, Lyons, Iowa. 
 
 It seems to me that the fact that American capital has not seized 
 upon opportunities to control a good share of commerce and naviga- 
 tion is strong proof that in some way the door of opportunity has been 
 closed against it. I am far from being satisfied with such a state of 
 
542 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 affairs. 1 therefore favor such a plan as would open the door of oppor- 
 tunity to our people. I am not statesman enough to feel sure that 1 
 know what would be the right plan. 1 believe that our statesmen 
 should not shirk from weighing the question and entering upon such 
 plan as would give us our rightful position. My judgment is that 
 among the governments of the world, that government which is the 
 strongest in commerce is the government which should approach the 
 nearest to free trade. Therefore, I doubt the wisdom of discriminat- 
 ing duties being used longer to encourage American commerce. I 
 believe the weaker governments must foUow the idea of protection. 
 I should, therefore, lean to the idea of subsidy system; though 1 have 
 my fears with reference to its corruption. — David E. Kerr, president 
 Bellevue College, Bellevue, Nebr. 
 
 I am decidedly in favor of the fii-st, and of the second, if necessary to 
 a restitution of our shipping interests. The do-nothing policy has 
 been continued quite too long. — R. H. Porter, Cheshire National Uank, 
 Keene, N. H. 
 
 A NAVAL RESERVE. 
 
 It hardly seems possible to answer by simple "yes" or "no" the 
 questions involved in your circular. The answer to j'our first question 
 would be yes. This leaves the broad question to be subdivided into 
 many parts. That there should be subsidy to a certain class of foreign 
 vessels, and that the Government should follow the English custom of 
 having some conti'ol over such vessels, we believe to be good business 
 policy ; but that the Government expense should be confined to this 
 class of vessels alone we doubt. In order to reach a broader field and 
 get more general satisfaction, it would appear that there might be a 
 tariff provision that should allow privileges to any foreign port craft. 
 Before, however, the commerce of this country can be extended to 
 anything like that of England, it will be necessary to attract in some 
 way the proper class of men to man the ships that should necessarily 
 be engaged in this commerce. The young men that England provides 
 for her coipmerce are occupied in this country in internal business, 
 either steam or electrical. I believe it would be necessary to make 
 some provision whereby any native-born citizen between the ages of 
 18 and 30 that could show three years of service in deep-sea naviga- 
 tion should be entitled to some recognition in the way of bounty that 
 should help to bridge the difference in wages as between those paid 
 by other nations and those earned by the same class of men in this 
 country now engaged in the internal business of the country. 
 
 In the early prosperous days of whaling from this port the vessels 
 were manned by native-born American young men and generally the 
 best class of sailors that the world has ever produced. The same class 
 of men would not be available at present in the business unless there 
 was some special inducement to the class as mentioned. We have been 
 given to understand that our present Navy is deficient in every line of 
 its service possible, with the exception of commanding officers, owing 
 to the lack of inducement that the Government is willing to give to 
 men of proper character to represent these interests. — George R. 
 Stetson, president New Bedford Gas and Edison Light Company. 
 
 Duties, until our commerce gets a good sound foothold. — W. W. 
 Balkwill, president The Cleveland Steel Casting Company, Cleveland, 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 543 
 
 No, to first and second. Something should be done, and foreign 
 nations should not be allowed to appropriate our commerce. When 
 the profits of ship carrying warrant it American capital (of which 
 there is certainly an abundance) will compete on equal terms with 
 foreign capital invested in merchant marine. — J. K. Deming, Dubuque, 
 Iowa. 
 
 The first, by all means. The third is foolish and un-American. — 
 A. H. Tillinghast, the Grosvenor-Dale Company, Providence, R. I. 
 
 1 have favored a subsidy system, but I favor any constitutional 
 method that will effect the result. — George C. Chase, Bates College, 
 Jjewiston, Me. 
 
 1 prefer discriminating duties and regulations of commerce. — 
 Wm. C. Sproul, Chester, Pa. (president Seaboard Steel Casting Com- 
 pany, President Senate of Pennsylvania, publisher Chester Daily 
 Times.) 
 
 The third question does not seem to me to exhaust the alternative 
 by any means. — Henry Churchill King, Oberlin, Ohio. 
 
 I favor subsidy system well defined within constitutional limits for 
 all American ships carrying the American flag. — I. H. Michenor, Bank 
 of North America, Philadelphia, Pa. 
 
 So far as my present information goes I answer your first question 
 yes, because I would certainly answer no to your third question, and 
 have very grave doubts about the advisability of answering yes to your 
 second question. As a general proposition, I do not believe in directly 
 taxing one portion of the community to pay subsidies to the other 
 part. — Charles H. Scott, president Saxton Furnace Company, Phila- 
 delphia. 
 
 No, to 1 and 2; yes, to 3. If we find it more profitable to use our 
 money in lines different than foreign transportation we do it. The 
 American knows a good thing sometimes. Selfishness may pay one 
 to-day, but lose two to-morrow. — William B. Smith, The Smith Amer- 
 ican Metal Company (Sam Company), New York. 
 
 No subsidy. Make shipbuilding possible at home by a tariff for 
 revenue only. — C. W. Fowler, superintendent, Kentucky Military 
 Institute, Lyndon, Kj'. 
 
 I believe that the first and second means can both be employed to 
 advantage in rehabilitating our merchant marine. — Ernest W. Roberts, 
 Chelsea, Mass. 
 
 (Mr. Roberts is a member of Congress and on the Naval Committee.) 
 
 TO RECOVER LOST TRADE. 
 
 I believe that we should subsidize our ships to such an extent as 
 would guarantee their doing the Government business, such as carry- 
 ing mails, etc. ; and, further, I believe that some system of rebate on 
 freights carried in American ships should be arranged for, so that there 
 would be an incentive to increase the American shipping, because of 
 the fact that parties forwarding goods in American bottoms would 
 secure lower tariffs than when carried by other nations' boats. Further 
 than this, rebate should not have to. be struggled for by the shipper 
 or the consignee, but should be made direct to the boat, which would 
 allow owners to make a tariff which it seems to me would control very 
 soon enough trade to put us back on our old footing in the carrying 
 line. I have thought out no scheme, and am only writing you thus 
 
544 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 fully because I do not feel as if a "yes" or "no" answer to your 
 question would cover my views. There is one thing very certain, we 
 can never control a trafiic against which we are always discriminating, 
 while others are subsidizing and catering to the trade. 
 
 It is one thing to have a trade and hold it. It is an entirely differ- 
 ent thing to have had a trade, lost it, and then attempt to get 'it back, 
 in which position we now are. It seems to me very radical measures 
 will have to be taken before we can regain our lost prestige. — E. D. 
 Bancroft, of the Draper Company, Hopedale, Mass. 
 
 The condition of our shipping interests is certainly a disgrace to the 
 dignity of a nation so great in all other resources as ours, and 1 heart- 
 ily approve of any measure that will place our people in command of 
 our shipping industry. We have certainly been the laughing stock 
 for other nations long enough. I believe 6 per cent duties would place 
 the American flag on most ships carrying our commerce and could not 
 be considered as prohibitory against' other nations and would be less 
 liable to provoke retaliatory measures.— J. E. Carnahan, Canton, Ohio. 
 
 Other nations have subsidized shipping, why not we? The subject 
 should be studied more. — Contoocook Mill Companv, Hillsboro 
 Bridge, N. H. 
 
 Yes, to the first question.— .\. H. Fetterolf, Girard College, Phila- 
 delphia. 
 
 We should have absolute free trade in ships and everything else. — 
 Lewis G. Kills, Salt Lake City, Utah. 
 
 BOTH METHODS PRACTICABLE. 
 
 In my judgment, either or both of two remedies are practicable and 
 may wisely be applied. Namely: First, by the levying of lower and 
 discriminating duties upon merchandise imported in American vessels. 
 In this way the American marine can be fostered without distressing 
 other American industries, for, considering the insignificant number 
 of American vessels suited to engage in the foreign trade that are at 
 present afloat, it is safe to say that the effect upon the general indus- 
 tries of such discrimination in duties will be so slight for years to come 
 as to scarcely be realized, and the country will, at the same time, 
 become gradually prepared, without shock or injury, for the advent of 
 a universal system of lower rates, which sooner or later a changed 
 public sentiment is quite likely to demand. Such a change had better 
 be reached in the way suggested than" by revolutionary action of Con- 
 gress, which experience teaches is always followed by paralysis in busi- 
 ness, financial disaster, and general distress. Second, by a subsidy 
 system copied to a large extent from that existing under the English 
 laws, by which the vessels enjoying the subsidy shall be made vessels 
 of the United States, the officers to be made commissioned officers of 
 the United States, and all to be subject to call from the General Gov- 
 ernment in time of war, or in case their services may be required by 
 the Government for any purpose. Itmightbe well, perhaps, to revive 
 the bounty laws for American fishermen, under such restrictions and 
 safeguards, however, as would prevent frauds such as prevailed to 
 some extent under the old law.— N. W. Bingham, United States cus- 
 toms attorney, Boston. 
 
 Something ought to bo done, and I favor subsidies.— John J. Pew, 
 Gloucester, Mass. 
 
HEAEING8 BEFORE THE MEBCHANT MARINE COMMISSION. 545 
 
 I favor a 10 per cent rebate in customs on dutiable goods imported 
 in American bottoms. — Augustus F. Libby, New Jersey. 
 
 I believe that a substantial reduction in duties on all merchandise 
 brought to this country by American-built ships would effect in the 
 very best way and in the shortest time all that is desired for our 
 shipping by the most patriotic citizen. — W. Rockwell Clough, 
 Alton, N. H. 
 
 As a banker and manufacturer, I am of the opinion that a subsidy 
 system is the best way to recover what we have lost. — G. B. Lessig, 
 Pottstown, Pa. 
 
 The iirst two suggestions for the building up of our shipping are 
 simply cocktail stimulants to relieve symptoms of the disease that 
 ails us, and the third is the Mark Hanna prescription of " standing 
 pat" on the Dingley lot of boa-constrictor duties that were intended 
 to discourage commerce and the use of the shipping you now profess 
 to want. If other countries can do ocean carrying at cheaper rates 
 than we can, they will continue to do so until we can reduce our cost 
 to (or below) theirs, and the nostrum of paying people to do what, 
 without help, would be a losing business is simply trying to lift our- 
 selves over the fence by our boot straps. They who conscientiously 
 desire to encourage shipping and its use must start by encouraging 
 the only thing that shipping — outside of mere coastwise work — can be 
 used for, viz, foreign trade, and the proper and only adequate way to 
 encourage this is by removing all and every obstacle in its way, and 
 by promoting the freedom of exchange all over the world. 
 
 It is this that has made England ' ' the mistress of the seas " dur- 
 ing the past sixty years, and is allowing other countries who have 
 adopted the same practice to help divide her mastery. For instance, 
 little Denmark, after the adoption of free trade, increased her ship- 
 ping in the decade between 1888 and 1898 by 15 per cent, viz, from 
 95,527 tons to 245,447 tons, as I learn from a table given in The Speaker 
 of June 27 last, besides increasing all agricultural wealth and resources 
 "by leaps and bounds" during the same time. So long as your club 
 continues to devote its energies to simply coddling by stimulants the 
 market it is named for, so long is it making itself ridiculous to all 
 thinking people by advocating the increase of the tools for increasing 
 and promoting that much greater and more lucrative market that 
 awaits us when we throw off the McKinley-Dingley shackles that bind 
 us, and go in " in our shirt sleeves" to secure our legitimate share of 
 the immeasurable commerce of the world. — Samuel Bancroft, jr., 
 Wilmington, Del. 
 
 •:;• ****** 
 
 I favor discriminating duties and other regulations of commerce. — 
 Mary E. Wooley, president Mount Holyoke College. 
 
 No duties or subsidies. It is not a sequence that foreign nations 
 will be allowed to appropriate our commerce. — Virginius Newton, 
 Richmond, Va. 
 
 I favor No. 1. The canal must be built across the Isthmus, with 
 discriminating tolls in favor of American shipping. — Frank Miller, 
 Sacramento, Cal. 
 
 Either duties or subsidies, or both, as may be found adapted to the 
 end in view. — O. Vincent Coffin, Middletown, Conn, (former governor). 
 
 My answer to question 1 would depend upon the kind of means to 
 be used. — John S. Seats, Lancaster, Pa. 
 3a— 04 35 
 
546 HEABINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 It is not at all fitting that so great a nation as ours should carry so 
 small a proportion of our commerce. Discriminating duties stould 
 be applied. — A. Caldwell, Leavenworth, Kans. 
 
 I would prefer discriminating duties and other constitutional regu- 
 lations of commerce. — Howard Ayres, president University of Cin- 
 cinnati. 
 
 Duties preferred. Subsidies, as proposed in recent bills, would 
 enrich the trans-Atlantic lines, but would not assist in establishing 
 shipping facilities with such distant countries as India. — F. L. Clark, 
 Birmingham, Ala. 
 
 1 do not claim to know very much about the subject referred to. 
 It is certainly a very important one. It is best, in my judgment, that 
 constitutional means should be used in endeavoring to protect our 
 marine interests. This seems to be preferable to subsidjr, and in the 
 adoption of such measures preference should be given to American 
 bottoms by the reduction of duties or charges rather than adding 
 them on to imports in foreign vessels. Such a course would seem to 
 me to make the discrimination less objectionable. — O. L. Letch worth, 
 president Pratt & Letchworth Company, Buffalo, N. Y. 
 
 I have long been interested in the subject of the revival of our 
 shipping, which is in such a deplorable condition at present. Our 
 motto for the last three-quarters of a century has been protection for 
 products, free trade and special privileges for the ships that carry them, 
 with their natural results, as at present. The regulation of commerce 
 is a perfectly proper act. In a letter to the State Department several 
 years since 1 asked why it could not be done, and was told in reply, 
 " It would be against the conventions." The present status is a dis- 
 grace which should be removed as soon as possible. Anything that 
 can be done in this line will have my earnest assistance, as it snould 
 have of every citizen who loves " Old Glory." — Allan D. Brown, presi- 
 dent Norwich University, Northfield, Vt. 
 
 FOE A SUBSIDY. 
 
 My ancestors have been owners of vessels for nearly two hundred 
 years, and I have naturally taken great interest in the merchant marine 
 of our country. In my opinion the most important thing for the pros- 
 perity of the United States is some legislation which will enable ua to 
 recover the large percentage of our own commerce which we had a 
 century ago. My preference is for a system of subsidies. The impos- 
 sibility of obtaining an ideal system which will meet with the approval 
 of all should not deter us from urging the speedy enactment of the 
 best practicable system which will meet the approval of a majority of 
 Congress. — William Rptch, president Union Iron and Steel Company, 
 
 New York. 
 
 * * * * « * * 
 
 Yes, to the first question. We ought to resume our former place 
 on the ocean. — E. K. Hubbard, Middletown, Conn. 
 
 I have been a consistent Republican for years — since I was born. I 
 believe in reasonable protection of our industries, and reasonable sub- 
 sidies when needed, but especially trade treaties with those who will 
 treat us fairly and reciprocally in the matter of duties on imports. — 
 Dan F. Bradley, president Iowa College, Grinnell, Iowa. 
 
 I do not favor either discriminating duties or a subsidy system at 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 547 
 
 the present time. If, however, some government regulation sliould 
 prove to be necessary, I would prefer discriminating duties. — J. Alden 
 Smith, University of "Washington, Seattle, Wash. 
 
 Q. 1. Yes. I am in favor of Government assistance to our marine 
 mail carriers on a fair basis. Answer to No. 3, "Not much!" — Charles 
 A. Howland, Quincy, Mass. 
 
 I have always believed in protecting American workmen and in main- 
 taining American standards of living against foreign cheaper labor com- 
 petition. I believe the things we can produce in sufficient quantities 
 should be protected to secure the home market, and the things we can 
 not produce or which we prefer to import as luxuries, should be 
 admitted under constitutional regulations drawn so as to protect 
 American shipping and shipyards. — L. E. Whiton, manufacturer, New 
 London, Conn. 
 
 Yes to 1. Yes to 2, when first is not sufficient. No to 3. — Edward 
 M. Rockwell, Leominster, Mass. 
 
 I believe that constitutional means, with a liberal subsidy, should 
 be applied. — L. E. Cochran, Youngstown, Ohio. 
 
 Personally, I favor "constitutional regulation of our foreign com- 
 merce " by absolute discrimination in tonnage dues, port and light- 
 house charges, etc. In my view the main thing necessary in dealing 
 adequately with this too long deferred question is a permanent national 
 protective policy. A direct subsidy policy is a very good policy for 
 some nationalities, but in doesn't seem to answer for Americans. Look 
 at the careers of the Collins Line steamers across the North Atlantic; 
 the Pacific Mail Steamship Company on the west coast (Panama to 
 San Francisco), and to Australia, etc. ; the United States and Brazil 
 Mail Steamship Company, to four commercial ports of Brazil, 1865- 
 1875. The efforts were fitful; the results small. 
 
 No one can prophesy how long it will take to secure a fair share of 
 its trade with foreign countries, and to confer appreciable benefits 
 upon both through frequent commercial communication and inter- 
 course, but that both these desirable ends can be achieved by a perma- 
 nent governmental policy, I have not the slightest doubt. A direct 
 subsidy policy has worked well for a conservative people like the 
 British, who know what they want to achieve, and stick to it until 
 they do achieve it, and then they keep on sticking to it. Since I was 
 born, the Cunard Steamship Line across the North Atlantic has always 
 been subsidized by the Government of Great Britain. Germany and 
 France also realize the national benefits secured through a permanent 
 system of subsidy to its foreign steamship lines. England first, and 
 later these two other nations, have been exploiting foreign trade, and 
 for fif t}'^ years, more or less, have been consistently securing commer- 
 cial footholds, establishing banks, and controlling tne trade represented 
 by their capital and credit. For the past forty years (since the civil 
 war) Americans have been exploiting their own country, binding it 
 together from the Atlantic to the Pacific, from the Lakes to the Gulf 
 of Mexico, establishing communications everywhere, promoting indus- 
 tries, learning where the great mineral resources of the country are 
 and developing them, and finally have happily become a reunited* peo- 
 ple. It has occupied a long time to accomplish all this, but in my 
 opinion, the terse announcement by General Grant in the spring of 
 1864, when laying his plans to reach his objective point (Richmond, 
 Va.), "I propose to fight it out on this line if it takes all summer," 
 
548 HEARINGS BEB'OKE THE MERCHANT MARINE COMMISSION. 
 
 was the key of the nation's situation at the time and the inspiration 
 for its later successes. 
 
 As it was then, so now, "The Pi-oblem of an American Marine" 
 will be readily solved when the American people and their leaders are 
 ready to solve it. Whether they are now ready to solve it I don't 
 know. In my opinion, they ought to be. All the conditions, both 
 national and individual, seem favorable now. Your circular of inquiry 
 is therefore most timely and should have the widest circulation pos- 
 sible. If, as I hope, you find a widespread interest in the solution of 
 the problem, the second step of getting leaders together to consider 
 plans and devise best methods will be easy and natural. With a policy 
 enacted by. national legislation whicii shall equally protect all who wish 
 to embark under it, positiveness will be secured until later legislation 
 shall change, modify, or extend it as may be wise, and the mere 
 announcement by the National Congress that the American people pro- 
 pose to tight it out on this line will be an impressive exhibit of the 
 nation's deliberate purpose. It will also prepare other nations for our 
 entry in this additional foreign field of enterprise. Concerning details, 
 I should favor indirect but sufficient pi'otection. In matters of this 
 kind Americans seem to prefer indirect concessions rather than direct 
 cash payments to supposedly privileged beneficiai'ies. If necessary to 
 apply discriminating duties, it would be more logical, in my opinion, 
 to authorize rebates of duties on cargoes imported under " Old Glory.'" 
 The main point, however, is, Are the American people now ready to 
 deal with the subject as an American business proposition, regardless 
 of whether they call themselves Democrats or Republicans ? Please 
 count me as voting "Aye." — Franklin Allen, New York. 
 
 (Colonel Allen is and long has been the very able secretary of the 
 Silk Association of America.) 
 
 Yes to Question 1; no to 2; lo 3, no. Our commerce should be 
 regulated to favor our people as a whole, and no time should be lost 
 in bringing about the result. — Edward H. Sturtevant, Franklin, N. H. 
 
 To No. 1, yes; if we can not have a subsidy. I prefer a subsidy to 
 any other system.— E. M. Wilson, president, Western Iron and Steel 
 Company, Lakeview, Wash. 
 
 Yes to 1. I have to say, in reply to your circular addressed to me 
 as president of the Glenside Woolen Mills and recently received, that 
 I am so unfamiliar with the subject referred to that I do not think 
 I should express any opinion in relation to it. I have been content, 
 thus far, to leave the question wholly to the decision of our Represent- 
 atives in Congress, assuming them to be the better qualified to cope 
 with it. This may be an attitude, in view of the importance of the 
 question, which no intelligent or patriotic citizen should occupy; but 
 you must be aware of the fact that the subject is one which is not 
 brought so close home to those residing in the interior as to those 
 residing in the shipping ports. Superficially considering the subject, 
 I am opposed to subsidies. The idea of the grant of the public reve- 
 nues in aid of a particular class is too suggestive of favoritism. Of 
 course it could be justified only, I think, upon the ground that it would 
 be the means of providing against dangers to the whole country in 
 time of war, dangers ever becoming more remote, especially in view 
 of the growth of our Navy. Under existing circumstances, unfamiliar 
 ,as I am with the subject, 1 am not prepared to say that anything should 
 be done. I do not see whv the United States can not meet other 
 
HKAKINQS BEFORK THE MERCHANT MARINE COMMISSION. 549 
 
 countries on the high seas and successful!}' compete with them; but if 
 it is necessary that something should be done to enable them to do so, 
 I should, decidedly, favor discriminating duties as the better remedy.— 
 George Barrow, bkaneateles, N. Y. 
 
 Yes, to 1, to a reasonable extent, not to be prohibitive in any sense, 
 Vjut sufficient to turn the business into the hands of Americans, sailing 
 under the Stars and Stripes; in short, get back to where we stood pre- 
 vious to the decline in our marine. Shipping should be protected as 
 well as manufacturing and farming and mining. — J. G. Woodruff, 
 president W. L. Gilbert Clock Company, Winsted, Conn. 
 
 Either duties or subsidies, but preferably a proper subsidy system. — 
 William Thayer, Pawtucket, R. I. 
 
 To question 1, yes; enough to equalize advantage possessed by 
 foreign vessels. 1 favor subsidy to new lines to new ports only. The 
 matter is urgent enough. It is difficult to subsidize lines now running 
 and secure any reductions or benefits. 1 see no way practicable except 
 to limit to new lines, or as a bounty on new commodities, or else 
 specify certain commodities to be carried at same rate as from Europe. — 
 E. T. Shuler, Gadsden, Ala. 
 
 1 have answered yes to the second question, although I am not quite 
 sure that 1 should not have said yes to the first question. I believe that 
 something should be done to build up our shipping interests. The only 
 question is. Which is the better way? It would seem that we have 
 men at Washington that should be able to solve this question in a wise 
 manner. It seems to be the opinion of many people that in former 
 bills too much was being done for the capitalists — that is, playing into 
 the hands of the moneyed men. How that may be I do not know, but 
 in my travels I have heard this opinion expressed to quite an extent. — 
 Gordon Dobson, Pittsfield, Me. 
 
 No to the first two questions, or else stop our absurd boasting that • 
 the great American nation can dive deeper, stay under longer, and 
 come up drier than anybody in the universal world, with a hoop-la! 
 and a tiger attached, with a nauseous "damnable- iteration" of 
 "patriotism," like a half -drunken country jay at a Fourth of July bar- 
 becue. — John R. Redfield, Hartford, Conn. 
 
 1 fully and absolutely indorse the first, believing that under wise 
 conservative regulation we can best maintain national safety and 
 encourage progress and good will. The second and third propositions 
 do not meet with my approval. I can see in both, even with all the 
 wisdom legislation can surround them, that they would lead to con- 
 stant irritation and political jobbing, of which we have a surplus to 
 contend with, both past and present. — John Cochrane, president 
 Cochrane Manufacturing Company, Maiden, Mass. 
 
 A shipmaster's advice. 
 
 As between the two policies you suggest for the upbuilding of our 
 merchant marine, I decidedl}'^ prefer the second — a subsidy system. I 
 was a shipmaster for many years, and have been all my life engaged 
 in the shipping business. Though a free trader and a Democrat, I 
 believe very strongly that as the Government has lent a hand to 
 encourage other industry save shipping, this, too, must be included 
 if our economic policy, in general an unwise one, as 1 think, is to be 
 made consistent. Perhaps if we had absolute free trade, our ship- 
 
550 HEARINGS BEFOR-E THE MERCHANT MARINE COMMISSION. 
 
 owners could take care of themselves. But we do not have free trade. 
 We build our vessels with protected labor; we pay protectionist prices. 
 Moreover, on the sea, however it may be ashore, all our competitors 
 pursue a protective policy, as witness the new huge British subsidy 
 to the Cunard Line. I remember as a boj^ and young man when the 
 ports of the world were crowded with American vessels. Our ships 
 were the sea's aristocracy.- 
 
 I have just returned from a long journey to the far East, and in all 
 the harbors of the Orient I saw but six American ships, where they 
 were once numbered bj-- the hundreds. We have, I'ightly or wrongly, 
 given the manufacturers protection and made the United States the 
 greatest manufacturing nation of the world. Let us see what protec- 
 tion will do for our shipping. I know that discriminating duties served 
 well in the old times, but important treaties stand in the way of their 
 reenactment. Moreover, how about the articles that are imported 
 duty free? Feeling as I do I can not recommend taking these from 
 the free list, even for the sake of encouraging American shipowners. 
 Foreign governments might easily retaliate and match our discriminat- 
 ing duties with duties of their own. And I do not see how the first 
 plan you suggest could develop what we so much need — American 
 steam lines to distant lands like South Africa, India, and South Amer- 
 ica. The subsidy system is the system already adopted by our rivals. 
 They can not object if we take a leaf out of their own book. We tried 
 subsidies to mail lines successfully before the civil war, and ought 
 never to have abandoned them. You will find, 1 think, that the sub- 
 sidy policv is strongly preferred b}' practical men in close touch with 
 modern sliipping conditions. — W. F. Humphrey, treasurer, Boston 
 Tow-Boat Company. 
 
 Mr. Clarke. We submitted those opinions, after they had been 
 received and collated, to Mr. Winthrop L. Marvin, of Boston, the 
 very able secretary of the Commission, and to Capt. W. W. Bates, 
 formerly United States Commissioner of Navigation, and asked those 
 gentlemen to review them in a nonpartisan spirit, and make such 
 answers as they thought would be enlightening to the general public 
 and helpful to Congress. 
 
 They did so, and, if the Commission care to hear me for fifteen min- 
 utes, I could read extracts from those opinions which I regard as com- 
 plete answers to some of the errors that have been stated in the 
 responses already read. 
 
 The Chairman, I think, Mr. Clarke, we would hardly want to hear 
 the views of the secretary of the Commission, but if you have the 
 views of any other person, which you think important, we shall be 
 glad to hear them. Mr. Marvin will understand why I make that 
 suggestion. 
 
 Secretary Marvin. Certainly. 
 
 Mr. Clarke. 1 will read a few extracts, if you please, from Captain 
 Bates, whom I regard as a very high authority on this whole question: 
 
 "Ves.s(>ls are tools of trade. Persons who use tools need them of 
 their own. Independence of rivals is the first essential of success in 
 any business. A nation must have its commerce carried on. Those 
 who will do it best for the national interest are its own people. If such 
 a condition exists that navigation will not pay, the remedy is not to 
 admit strangers with their shipping, but to regulate the carriage of 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 551 
 
 the commerce so that citizens will find inducement to undertaise both 
 the carrying and the merchandising. 
 
 ******* 
 
 "True American sentiment revolts at dependence upon rival nations 
 for the proper exercise of rights and powers, or for anj^ essential of 
 national life. Our people are thoroughly competent to serve them- 
 selves on the sea, as on the land; and it is the duty of the Government 
 to secure fair play to the industries of the sea, as well as to those of the 
 land. Having the greater responsibility, the Government of right 
 should decide upon as well as apply the proper measures for main- 
 taining a merchant marine. Private interest must not clash with public 
 welfare. 
 
 " Important matters of state lie at the threshold of the shipping ques- 
 tion, i'hese may be grouped under five general heads, namely: 1, 
 the industrial; 2, the commei'cial; 3, the financial; 4, the political; 
 5, the military interests of the LJnited States. Therefore for the 
 national good we need and must have a merchant marine, and, properly 
 protected, a merchant marine will pay. On May 15, 1848, David 
 Ricardo, the English economist, in a speech in Parliament, said: "It 
 was a singular circumstance, that although the American vessels were 
 the dearest built and dearest manned ships in the world, they had two- 
 thirds of the whole trade between this country and the United States; 
 while the Russians, with the cheapest ships in the world, were obliged 
 to give us up the whole trade between their country and ours." 
 
 Senator Lodge. What was the date of that? 
 
 Mr. Claeke. 1848. 
 
 Again, Captain Bates said: "Furthermore, it is the right of the 
 Americans to build all American shipping, as it is equally the interest 
 of the nation to have the art of shipbuilding developed to perfection — 
 not abi'oad, but at home. If we would weigh for a moment the advan- 
 tage to us of shipbuilding power, a glance at the navies of Great Brit- 
 ain on the one hand, and of the five nations — France, Russia, Germany, 
 Italy, and the United States — on the other, in the average recent year, 
 we would find Great Britain quite as strong as the others together 
 when we consider her shipbuilding and repairing competency as an 
 actual auxiliary to her naval power. Indeed, the superiority of Eng- 
 land's shipbuilding development is equal to that of a large navy of 
 itself. This is such to-day that, if the war fleets of the six nations 
 were engulfed at sea with all their crews, and had to be replaced, 
 Great Britain could reproduce her ships in half the time it would take 
 the other five nations to reproduce theirsj and, besides, from her 
 development due to predominance in the carrying trade, Britain would 
 have the seamen, the transports, the colliers, the scouts — every instru- 
 mentality of naval war — ready for the fray when her navj'' was 
 restored. Thus it is seen that shipbuilding power is not only an 
 essential element in naval warfare, but the very first requisite for final 
 victory. We must therefore build all our own ships and cultivate to 
 the utmost our native skill in navigation, as a matter of national 
 policy." And so on. He made many other points equallj^ conclusive. 
 
 I made a little reply myself to one or two points. I neglected to 
 read the opinion given by Mr. Pratt, of Lewiston, Me., in favor of 
 subsidies and against discriminating duties and giving some reasons 
 why those duties should not be applied. As you know who livfe in 
 
552 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Lewiston, Me., you can imagine that this gentleman has received a 
 
 freat deal of enlightenment on this subject, first and last. Therefore 
 regard his opinion as valuable, but 1 will not take the time to read my 
 . reply to that part of it, not having read what he says. However, 1 
 will mark it and submit it to the Commission, together with my reply. 
 The matter referred to is as follows: 
 
 OPPOSED TO PREFERENTIAL DUTIES. 
 
 It is apparent from your circular letter that you are a believer in 
 discriminating duties. I regret that I can not agree with you. In 
 the early days when this method was in force our carrying trade 
 increased, but at that time we were a nation of importers; then we 
 had no commercial treaties; then we had tonnage taxes, in some cases 
 prohibitory; and then we could build ships cheaper than any nation 
 in the world. No one can say that discriminating duties alone were 
 the cause of our success upon the seas. There seems to me to be fatal 
 objections to a policy of discriminating duties now. None of the above 
 conditions prevail to-day. It costs us more to build our ships than it 
 does any other nation; we have no prohibitory tonnage taxes; we have, 
 I believe, a number of commercial treaties, 20 or 30, with various 
 countries, which stand in the way of discriminating duties. It is true 
 that on notice these may be abrogated, but it seems to me there is 
 danger in this. We want amicable commercial relations with them, 
 and we want treaties securing our rights, and we can not ruthlessly 
 terminate treaties and then negotiate others satisfactory to our people; 
 and of greater consequence than anything else, the strongest argument 
 against your proposition, as I see it, is the fact that our imports are 
 but a small part of our foreign commerce, and that of these imports 
 approximately 45 per cent are on the free list, of which the major 
 part are raw materials. Congress wisely placed them there, and they 
 should stay there, beyond the reach of discriminating duties. This 
 leaves, at the most, but a trifling part of our commerce, and I believe 
 a part that will relatively constantly decrease, subject to the operation 
 of these duties. 
 
 Furthermore, I do not believe the American people would take 
 kindly to an increase of our tariff duties, which would be the effect of 
 levying a 10 per cent or more additional duty on goods brought to this 
 country in foreign vessels, and our manufacturers in particular would 
 object to any such duty on the raw materials now on the free list. In 
 the last analysis your proposition is, then, a reduction of 10 per cent, 
 more or less, on goods not on the free list imported in American ves- 
 sels. I can not believe that a duty laid on such an infinitesimal part 
 of our commerce would result in the slightest increase in our merchant 
 marine. If a benefit followed from this decrease of duty to anyone 
 it would not be to the shipping interests, to whom we must look for 
 the building of our ocean fleet. I have stated my opinion as to dis- 
 criminating duties somewhat at length because of the fact that you 
 seem to incline in that direction. I am in favor of a system of subsi- 
 dies. I am not frightened at the word "subsidy." I can not see that 
 such a system is unconstitutional. I can not see the objections to it 
 which I have urged against discriminating duties, and I think there is 
 much .to be said in its favor. The recent bills have met with much 
 opposition, but I have no question that any other method would 
 
HEARINGS BEFOKE THE MERCHANT MARINE COMMISSION. 553 
 
 encounter the same. It would come from those who believe in free 
 ships — in a do-nothing policy — and from the interests friendlj' to the 
 foreign lines. Let me say in conclusion that I am not so much con- 
 cerned about the means as 1 am anxious that we should occupy our 
 proper place in the carrying trade of the world. Any measure agreed 
 upon and drafted by the friends of our merchant marine will receive 
 my support. I hope, however, a subsidy system will be decided upon. 
 It commends itself to my best judgment." — H. L. Pratt, agent Bates 
 Manufacturing Company, Lewiston, Me. 
 
 " Several gentlemen have presented in their replies objections to 
 discriminating duties, which undoubtedly have weight. The letter of 
 Mr. H. L. Pratt, of Lewiston, Me., states them with force, but when 
 he says in effect that we have no large volume of dutiable imports 
 upon \\hich alone they could probably be applied he minimizes 
 the fact, for the total value of dutiable imports in the fiscal j'ear 
 ended with June, 1903, was 1599,569,572. In 1826, when Amer- 
 ican vessels carried 95.2 per cent of our exports and imports — which 
 was high-water mark — our total foreign commerce was only $180,- 
 927,643, or less than one-half of the dutiable imports alone in 1903. 
 If discriminating duties and other regulations of commerce, operating 
 upon only $65,000,000 of imports, gave us the lion's share of the car- 
 nage, what would not the same regulations accomplish if applied to 
 nearly 1600,000,000 of dutiable imports? Then, too, Mr. Pratt dis- 
 cusses discriminating duties only, but that policy also embraces dis- 
 criminating tonnage dues and port and light-house chai'ges if Congress 
 sees fit to apply them, and those charge^ would, of course, apply to 
 the whole foreign commerce, and not merely to dutiable imports. 
 But Mr. Pratt .shows a highly commendable spirit when he says: 
 'Any measure agreed upon and drafted by the friends of our merchant 
 marine will receive my support.' " — [By the Editor, The Protectionist, 
 Oct., 1903.] 
 
 AKE SUBSIDIES UNCONSTITUTIONAL? 
 
 Mr. Claeke. Then a point has been made that subsidies would be 
 unconstitutional. I examined the laws somewhat with reference to 
 that question, and have marked passages on that subject which show 
 that the question of the constitutionality of the application of subsi- 
 dies to the development of any industrj'^ has not yet been passed upon 
 by the highest court in the land, and therefore it may be regarded as 
 an undecided and open question. I cite the authorities here, which I 
 shall feel honored if Senator Mallory and other lawyers upon the 
 Commission will examine with care, as they have the opportunity. 
 
 The matter referred to is as follows: 
 
 "The constitutionality of subsidies is an open and undecided ques- 
 tion. Many of the best lawyers in Congress think that subsidies are 
 clearly constitutional, especially when carrying the mail or providing 
 naval auxiliaries are set forth as objects, but at the same time some of 
 them favor discriminating duties, and some, at least, of the six Kepub- 
 lican Senators who voted against the Frye bill in the last session are 
 in this class. 
 
 " Let us for a moment look at the legal status of this question: The 
 case of United States v. Realty Company and United States v. Gay, 
 decided May 25, 1896, by the Supreme Court (U. S. Rep., vol. 163), 
 involved the question of payment of the sugar bounty provided by 
 
554 HEARINGS BEi'OEE THE MERCHANT MARINE COMMISSION. 
 
 the McKinley tariff in 1890. In 1894 Congress repealed that act, but 
 many persons claimed that they had incurred large expense in enlarg- 
 ing their facilities for producing sugar, having been induced thereto 
 by the bounty, and that, therefore, they were equitably entitled to the 
 bounty that had not been collected up to the time of the repeal. In 
 1895 Congress recognized the equity of these claims and made appro- 
 priations to pay them. 
 
 "Notwithstanding this, the Government (then Democratic) con- 
 tended that the claims were void, because both the original bounty 
 provision and the law of 1896 were unconstitutional. The coiirt sus- 
 tained the law of 1895 on the ground that the claims were equitable, 
 and that it was within the constitutional power of Congress to provide! 
 for such claims, wholly irrespective of the constitutionality of the 
 original provision in the McKinley law. The opinion of the court 
 was unanimous, except that Mr. Justice White did not sit in the case, 
 and it was written by Mr. Justice Peckham, formerly a distinguished 
 Democrat in New York. 
 
 "The constitutional question had been previously raised in the case 
 of Field vx. Clark, 143 U. S., 649, and the contention in that case was 
 that the bounty was unconstitutional, and that therefore the whole act 
 of 1890 was void. The court declined to decide the question as to the 
 constitutionality of the bounty provision, because, as the court held, 
 the rest of the act would be valid, even if that provision were void, 
 and the case at bar arose under another part of the act. 
 
 ' ' In the later case of United States v. Realty Company, the court 
 said: 'The [constitutional] question has been again presented to us in 
 this case, and been very ably argued by counsel both for the Govern- 
 ment and the defendants in error. The question is one of the very 
 gravest importance. It should not be decided without very mature 
 investigation and deliberation, and only when absolutely necessary to 
 the determination of the rights of the parties. In the A-iew we take of 
 these cases the rights of the j)arties may be passed upon and the actions 
 finally decided without entering upon a discussion as to the validity of 
 the bounty legislation contained in the act of 1890 and without decid- 
 ing that question. For the purpose of the discussion of this case we 
 think it unnecessary to decide whether or not such legislation is beyond 
 the power of Congress. W e are of the opinion that in either case the 
 appropriations of money in the act of 1895 to be paid to certain manu- 
 facturers and producers of sugar who had complied With the act of 
 1890 were within the power of Congress to make, and were constitu- 
 tional and valid.' 
 
 "So the original question of a bounty or subsidy has never yet been 
 passed upon by the Supreme Court. The nearest approach to it was made 
 by the circuit court of appeals in the District of Columbia, in January, 
 1895, in the case of. Miles Planting Company ^'. Carlisle (Appeal Cases, 
 D. C, vol. 5, p. 138), when Justices Shepard and Morris decided that 
 the bounty provision was unconstitutional, but Chief Justice Alvey 
 held that it is not ' necessary, for any purpose of this case, to discuss 
 and decide the constitutional question of the power of Congress to pro- 
 vide for the payment of bounties in such case as that provided for by 
 the late tariff act of 1890. I prefer to express no opinion upon that 
 subject.' 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 555 
 
 "It appears, therefore, that not only the chief justice of the circuit 
 court or appeals in the District of Columbia, but all the justices of the 
 Supreme Court who sat in the case of United Slates v. Realty Com- 
 pany, were of opinion that the decision by Justices Shepard and Mor- 
 ris on the. constitutional question was extrajudicial, and therefore not 
 an authority in law. However, it might be of interest as a discussion 
 of principles if the report had not omitted the briefs of the counsel. 
 
 " But even that decision expressly excepted from the ban of uncon- 
 stitutionality appropriations of bounty or subsidy made for 'the 
 common defence' or for 'establishing or maintaining post roads.' 
 Presumably any act providing subsidies for vessels will contain some 
 requirement that they shall either carry the United States mail or shall 
 be available as transports in case of war, and probably both. Such 
 requirement would seem to make the act constitutional, according to 
 the understanding of the two judges who went as far as they could to 
 hold a sugar bounty unconstitutional. This being so, it hardly seems 
 necessary to the cause of discriminating duties to contend that sub- 
 sidies would be unconstitutional. Both may be constitutional, and 
 while — for a commerce that is well established, like that between the 
 United States and Europe — discriminating duties and other regulations 
 of commerce may be preferable, yet, in order to build up a new com- 
 merce, as between the United States and South American countries, 
 subsidies might be preferable and even necessary." 
 
 Mr. Clarke. Mr. Chairman, as a further presentation of public 
 opinion on this subject, I desire to call the attention of the Commis- 
 sion to a report made recently by the Committee on Commerce to the 
 Associated Board of Trade of Boston, which is a very succinct state- 
 ment of the history of this whole subject under our Government, and 
 which contains some points that may be of interest. The report is 
 signed by Edward B. Wilson, C. M. Gowen, George E. Kellogg, 
 George E. Schrafft, Chandler W.- Smith, Isaac Chase, Horace M. 
 Bickford, Jacob Mitchell, Walter E. Gushing, J. W. Hoffman, George 
 E. Daniels, and E. Noyes Whitcomb, all prominent merchants and 
 business men of Boston. 
 
 The Chairman. Does the report deal with the matter of remedial 
 legislation and the methods ? 
 
 Mr. Clarke. Yes, sir, it does. I think you will be very much 
 interested to read it. It occupies four pages of this publication. 
 
 1 desire to call the attention of the Commission to one point in the 
 report which has been alluded to this morning, I think by Mr. Emery, 
 and that is in regard to the relative wages of American and foreign 
 vessels. The report says: 
 
 "It appears, for example, that the American liner St. Lmds employs 
 380 men at a cost of $11,306 a month, while the Kaiser Wilhelm der 
 Grouse employs 500 men at a cost of $7,715 a month. The average 
 pay per man on the American steamship is $29.75 a month; on the 
 German liner only $15.43, or less than |1 above one-half the American 
 wage. Good wages and a high standard of living constitute a distin- 
 guishing feature of our civilization, and it should be maintained upon 
 the sea as well as upon the land." 
 
 The Chairman. You may file that report, Mr. Clarke, and it will 
 be printed as a part of your remarks. 
 
556 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 The report is as follows: 
 
 REPORT OF THE COMMITTEE ON COMMERCE TO THE 
 ASSOCIATED BOARD OF TRADE OF BOSTON. 
 
 Your t^ominittee on commerce, to which was referred the resolutions 
 of the board of directors of the Boston Fruit and Produce Exchange 
 in favor of action by the Government of the United States to encour- 
 age and build up American shipping in the foreign trade, respectfully 
 report that we have considered the same and that we are unanimous 
 in thinking that Government aid of some kind should be extended as 
 soon as the best method can be detei-mined upon. 
 
 Our national history clearly shows that one of the great objects in 
 abandoning the old Confederation and forming "a more perfect 
 Union" under the Constitution was that the interests of the people in 
 navigation, which were then imperfectly protected by the several 
 States, might be more eifectively protected and aided by National Gov- 
 ernment. In pursuance of this purpose Congress enacted in 1789 a 
 law which provided that imports brought in ships not of the United 
 States should pay a higher duty than goods brought in American ves- 
 sels. Tonnage dues, light-house charges, and other regulations of 
 commerce were also provided bj^ various acts down to 1815, but with- 
 out doubt the most effective of all these regulations was discriminat- 
 ing duties. American tonnage rapidly increased and the carrying 
 trade, both coastwise and foreign, was in a highly prosperous condition. 
 
 At the close of the war of 1812-1815 our Government, anxious to 
 restore complete amity with Great Britain, united in a policy of what 
 was called maritime reciprocity, bj' which it abandoned those protec- 
 ti\e laws and left that portion of shipping which was engaged in for- 
 eign trade to open competition with the vessels of other countries, but 
 enacted a law in 1817 which reserved the coastwise, lake, and river 
 trade for American vessels exclusively. From that day to this the 
 latter class has prospered, and its growth in tonnage has kept pace 
 with the great internal development for our country. 
 
 Had foreigners observed entire good faith in carrying out the policy 
 of reciprocity, possibly our over-seas shipping might have maintained 
 its prestige indefinitely, but gradually their shipping agencies and 
 marine-insurance companies established vexatious regulations which 
 discriminated against American vessels, and after a while the Govern- 
 ments themselves granted bounties or subventions in th6 form of pay 
 for carrying the mails, which placed our shipping at a great disad- 
 vantage. After steamers were substituted for sailing vessels, and 
 later iron took the place of wood in their construction, American ton- 
 nage steadily declined and British tonnage rapidly increased. A brave 
 effort was made to hold our ground by the establishment of the "Col- 
 lins Line," to which for a time the Government paid a helpful, though 
 inadequate, subsidy ; but owing to political opposition this was unwisely 
 withdrawn, and finally the American people settled down to the con- 
 viction that we could not successfully compete upon the ocean and 
 gave their attention almost wholly to industries upon land. 
 
 Our tonnage continued large, however, long after the laws which 
 
 fave it early strength had been repealed, and even long after foreign 
 iscriminations had sealed its doom, from which fact many people 
 were erroneously led to think that the reason for its later decline was 
 not that it did not have a fair chance, but that capital and labor were 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 557 
 
 SO much more profitably emplojed in the development of our country 
 that they turned away from the sea. Allowing all the force there is 
 in this argument, the fact remains that men of capital and with mari- 
 time tendencies have always stood ready to engage in traiBc upon the 
 high seas if they could have the same national support that foreign 
 vessel owners had obtained. Under such conditions they are ready 
 now, but it is too much to expect that individuals or companies, or 
 even combinations of companies, can compete with nations. 
 
 The bare statement of the fact that during the first forty years of 
 our Government our vessels averaged to carry nearly 90 per c(^nt of 
 our commerce, and that now they carry less than 9 per cent of it, 
 ought to inspire every patriotic American citizen with a desire and a 
 determination that some efficient means shall be found by which we 
 can regain, if not our lost leadership upon the ocean, at least our just 
 share in the transportation of our own exports and imports. 
 
 COMMERCE GREATER THAN EVER. 
 
 Our commerce is vastly greater to-day than ever before. As stated 
 by a recent writer: "In 1825, when American vessels carried 95.2 per 
 cent of our exports and imports — which was high-water mark — our 
 total foreign commerce was only $180,927,643, or less than one-half of 
 the dutiable imports alone in 1903. If discriminating duties and other 
 regulations of commerce, operating upon only $65,000,000 of imports, 
 gave us then the lion's share of the carriage, what would not the same 
 regulations accomplish if applied to nearly $600,000,000 of dutiable 
 imports?" Or, to state the case more forcibly still, what would not 
 a discriminating duty on imports and a premium on exports in Amer- 
 ican vessels have accomplished if applied to the more than two billions 
 of our over-seas commerce in the calendar year 1903^ The question, 
 therefore, is not whether the volume of commerce shall be made larger, 
 but how we can best obtain our fair share of the carriage of the vol- 
 ume that is. 
 
 Two principal methods have been proposed and are now engaging 
 some share of public attention. One is a revival of the early and suc- 
 cessful policy of discriminating duties and other regulations of com- 
 merce, and the other is the payment of subsidies. Befoi'e the former 
 could be entered upon it would be necessary to "denounce," as the 
 language of diplomacy is, some 21 treaties or conventions with foreign 
 states, which now bind us to a reciprocity that does not reciprocate; 
 but as they contain provisions which make them terminable by either 
 party on one year's .notice, this obstacle could be cleared as soon as we 
 could build the ships. Fears have been expressed that this policy 
 would be regarded by other nations as hostile to their interests and 
 that they might retaliate. But in the opinion of your committee any 
 honoi-able attempt by one nation to promote its interests on land or 
 sea can not be considered hostile or unfriendly to other nations. It 
 is a right which everyone .possesses and in various ways exercises, and 
 while some of them might adopt similar methods, they would not be 
 likely to disregard their interests to indulge a temporary feeling of 
 resentment, and the impracticability of any combination against us 
 needs only to be stated to be recognized as a conclusive answer to any 
 appeal to our fears. 
 
 Without doubt the payment of subsidies at present meets more 
 approval in shipping circles than the plan just discussed. For some 
 
558 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 time this method has been the main reliance of other countries, and 
 the very recent example of Great Britain, in loaning 113,000,000 to 
 the Cunard line for building two finer and faster steamers than are 
 now afloat, and the payment to the company of a subsidy which will 
 increase from about 180,000 to $250,000 a year during the term of the 
 loan, in addition to interest and sinking fund requirements, shows at 
 once what importance one great rival attaches to this method, and to 
 what extent the liberality of our own Government would be challenged. 
 
 UTILIZE BOTH METHODS. 
 
 In the opinion of your committee it might be possible and desirable 
 to adopt both methods; discriminating duties and other regulations 
 and premiums on exports where there is already a large commerce, as 
 between our ports and those of Europe, and subsidies or liberal mail 
 pay where the traffic is small but offering prospects of growth, as 
 between our ports and those of South America and the Orient. But 
 it is not the province of your committee, or, as we conceive, of this 
 Board of Trade, to recommend or discuss systems. That is a question 
 for experts and for statesmen, after inquiring into all the conditions 
 pertaining to the business. And it is not, or ought not to be, a polit- 
 ical question, because there can hardly be two opinions as to the desir- 
 ability of doing something to promote the object and doing it as soon 
 as the best means are clearly discovered. 
 
 In his recent annual message President Roosevelt recommended the 
 appointment of a commission to study the subject and make an early 
 report to Congress. In accordance therewith, Representative Gardner, 
 of Massachusetts, has introduced a bill to provide for such a commis- 
 sion. Without expressing any opinion as to how the commission 
 should be constituted, your committee thinks the creation of a commis- 
 sion is the first desirable step to take, therefore we suggest the adop- 
 tion of the following resolution: 
 
 Resolved, That the Boaton Associated Board of Trade earnestly desires a restora- 
 tion of the American merchant marine, and that this may be brought about in a 
 speedy and effective manner, it respectfully petitions Congress to approve the rec- 
 ommendations of the President that the commission may be appointed to investigate 
 and report on the best methods to be adopted for the attainment of that end. 
 
 In addition to the need of matching in some way the aid which for- 
 eign governments extend to their shipping, there is another powerful 
 argument for action by our Government, and that is the higher wages 
 and the better keeping of our sailors as compared with theirs. It 
 appears, for example, that the American liner, St. Louis, employs 380 
 men at a cost of f 11,306 a month, while the Kaiser Wilheliii der Grosse 
 employs 500 men at a cost of $7,715 a month. The average pay per 
 man on the American steamship is $29.75 a month; on the German 
 liner only 115.43, or less than $1 above one-half the American wage. 
 Good wages and a high standard of living constitute a distinguisliing 
 feature of our civilization, and it should ^e maintained upon the sea 
 as well as upon the land. 
 
 Although this shipping question is one in which the maritime States 
 are primarily interested, and in the settlement of which Boston as the 
 second portin the country is entitled to exercise a larger influence, yet 
 it is gratifying to observe that the most enlightened public opinion 
 throughout the States of our vast interior is earnestly in favor of 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 559' 
 
 national aid to what is rightly regarded as a national and not a sec- 
 tional interest, and this fact "makes it highly opportune to press the 
 subject for an early solution. 
 Respectfully submitted. Edward B. Wilson. 
 
 C. M. GOWEN. 
 
 George F. Kellogg. 
 George F. Schrafft. 
 Chandler W. Smith. 
 Isaac Chase. 
 Horace M. Bxckford. 
 Jacob Mitchell. 
 Walter F. Cushing. 
 J. W. Hoffman. 
 Georg^b F. Daniels. 
 E. Notes Whitcomb. 
 
 A foreign opinion. 
 
 Mr. Clarke. Now, if I may be indulged a moment longer, I desire 
 to call attention to a foreign opinion on this general subject. Sir 
 Guilford Molesworth, of England, who is a very eminent economist 
 and statesman, in a recent article made this point: 
 
 "A favorite argument of the opponents of fiscal reform is found in 
 the assertion that 'England owes her maritime supremacy to her 
 policy of free trade, and that the decline of American shipping is due 
 to the policy of protection.' Those who make such an assertion must 
 be ignorant of the following facts: 
 
 " (1) England gained her maritime supremacy under a policy of 
 stringent protection. 
 
 " (2) Under a protective policy the marine of the United States grew 
 and prospered so greatly that it became a formidable rival to that of 
 England. 
 
 " (3) The foreign shipping trade of the United States is not protected, 
 and its decline is due to the abandonment of protection. 
 
 " (4) As regards its shipping, the policy of Great Britain is far more 
 protective than that of the United States. 
 
 "To deal Avith these points in detail — 
 
 "(1) England owes its mai'itime supremacy to the navigation laws 
 which destroyed the supremacy of the Dutch; protective laws which, 
 as an act of defence, Adam Smith designates: " Perhaps the wisest of 
 all the commercial regulations of England * * * as wise as if they 
 had been dictated by the most deliberate wisdom.' 
 
 ' ' Cossa, the Italian economist, allows that ' at certain times, and under 
 certain conditions protection has given notable advantages to indus- 
 trial organization and progress. Colbert's system and Cromwell's 
 navigation act contributed not a little to the economic greatness of 
 France and England.' 
 
 "(2) Under the protective policy of discriminating duties in favor 
 of their shipping the United States acquired a magnificent marine, 
 with a Britain, becoming a serious rival to our commerce. 
 
 ''In 1825 Senator Webster, speaking of the United States marine, 
 said: 
 
 We have a commerce which leaves no sea unexplored; navies which take no law 
 from superior force. 
 
660 HEARINGS BEFOEE THE MERCHANT MARINE COMMISSION. 
 
 "The Times in May, 182Y, wrote: 
 
 " Our commercial monopoly exists no longer. We have closed our Western Indies 
 against America from feelings of commercial rivalry. Its active seamen have already 
 engrossed an important branch of our carrying trade to the East Indies. Her starred 
 flag is now conspicuous on every sea and will soon defy our thunder. 
 
 "(3) In 1828 the United States passed an act which withdrew all 
 protection from their foreign shipping trade, opening their ports to 
 the ships of all nations, thus abandoning the policy which had been so 
 successful. Only the coasting trade of the United States now enjoys 
 the advantage of protection. From that date the percentage of the 
 United States carriage of their foreign trade steadily declined from 88 
 33er cent in 1828 to 66^ in 1860. Then came the civil war to give the 
 finishing stroke. The percentage had fallen in 1870 to 35^ per cent, 
 and in 1900 to lOi per cent. The ci\'il war forced the shipping to seek 
 protection under a neutral flag and it has been estimated that vessels 
 representing about 2,500,000 tons were transferred to foreign flags, 
 principally English. 
 
 "Mr. McKinley urged the necessity of a return to a protective 
 policy in the following words: 
 
 We must encourage our merchant marine. We must have more ships. They 
 must be manned by and owned by Americans. * * * The policy of discriminating 
 duties in favor of our shipping which prevailed in the early years of our history 
 should be again promptly adopted By Congress and vigorously supported until our 
 prestige and supremacy on the seas are fully attained. A new protective shipping 
 bill has been prepared. 
 
 "(4) Although the navigation laws of England were abolished in 
 1849 her shipping laws were revised in 1854, with a decidedly protec- 
 tive tendency. Taxes were abolished, fees reduced, restrictions 
 removed, and drawbacks allowed on ships' supplies. In addition to 
 this the enormous subsidies paid for mail contracts — the naval reserve 
 subvention policy and the protection given to vessels sailing under 
 the British flag — afl'ord immense advantage to our shipping. More- 
 over Lloyd's regulations, British insurance discriminating against 
 foreign ships, and our tonnage rules all tell against American 
 shipping. 
 
 " It is evident, therefore, that the decline of American shipping has 
 not been caused by protection, but by exclusion from that protective 
 policy under which the home industries of the United States have 
 made such marvelous progress." 
 
 I believe, Mr. Chairman, that is all I need to submit to give a fair 
 idea of these varying opinions. 
 
 COLONEL OLAEKE's OWN VIEWS. 
 
 Senator Malloet. You have not indicated your own opinion. 
 
 Mr. Clarke. I have not as yet, Senator. 
 
 I do not claim, Mr. Chairman, to be expert on this subject, and my 
 opinion may not be of very much value. I have studied the question 
 only two or three years, and it is necessary to study it a good deal 
 longer than that to make mastery of it. 
 
 But since I am honored by the Senator's inquiry, I will state briefly 
 that I favor any method upon which Congress can agree that will tend 
 to upbuild our merchant-carrying trade. I think, as Mr. Winsor has 
 said this morning, that direct mail subsidies for regular lines may be 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 561 
 
 the speediest and most effective cure for the evil that exists, and I 
 think discriminating duties and other regulations of commerce for the 
 indirect trade would be desirable, if they would not cause troublesome 
 foreign complications, owing to the commercial agreements that exist 
 between this Government and 21 or 22 foreign governments. But as 
 all those treaties are terminable by their express language within one 
 year, of course it would be competent for our Government to denounce 
 those treaties at any time when its own interests might seem to require. 
 
 I do not think foreign governments or foreign people could object 
 to any course which this Government might see fit to pursue for the 
 protection and advancement of the interests of this country. 
 
 Senator, have I covered the ground ? 
 
 Senator Malloey. I think I understand your position. 
 
 The Chairman. As a matter of fact, I believe there are over thirty 
 of those commercial agreements. 
 
 Mr. Clarke. I have recently seen a list — in fact I obtained one from 
 the Secretary of State. I have an impression the number is a little 
 less than that. 
 
 STATEMENT OF R. R. FREEMAN. 
 
 R. K. Freeman appeared before the Commission. 
 
 The Chairman. State to the Commission, if you please, in what 
 business you are engaged. 
 
 Mr. Freeman. I am engaged in the shipping business — the manag- 
 ing of vessels. I have one in the foreign trade and the balance in the 
 coastwise trade. 
 
 Mr. Chairman and gentlemen, it is a well recognized fact that the 
 foreign shipping of this country amounts to nothing, and it is self- 
 evident that until Congress provides some method by which capital 
 can be assured of a suitable return upon its investment the capitsuists 
 of this country will not put their money into the shipping trade. 
 
 The only way by which it can be built up is by investing capital 
 entering upon it. But until Congress provides a method by which 
 capital can be assured that it will get a certain return for its money 
 our shipping for the foreign trade will not be built up. Whether it 
 should be by subsidy, differential or discriminating duties, is a ques- 
 tion in my mind. But some method should be undertaken at once, so 
 that the confidence of the investing public may be secured. 
 
 I have one vessel in the foreign trade, and the returns from that 
 trade have been so small for the last few years that it is impossible to 
 get any capital to invest in it. Our wages and scale of provisions are 
 so much higher than those of foreign nations whose vessels engage in 
 the same kind of trade that we do not, from the same amount of freight, 
 get the same returns on the capital invested that the vessels of those 
 countries do. 
 
 I think the wages of the American captain ai'e at least 26 per cent, if 
 not more, greater than the pay of a captain on the same class of vessel 
 engaged under the Norwegian or German flag and possibly under the 
 English flag. And the wages of our officers are alike more and of 
 the crew more. If we go to Buenos Ayres we ship a crew here for 
 $20 a month, and if they leave down there we can get a return crew 
 for $15 a month, but the scale of provisions is the same. So it costs 
 us more to feed those men to-day either outward or homeward. 
 
 3a— 04 36 
 
562 HEARINGS BEFOKE THE MEECHANT MAKINE COMMISSION. 
 LAWS SHOULD BE CHANGED. 
 
 In the coastwise trade I think there are numerous navigation laws 
 which should be amended. I have been before the committee in Wash- 
 ington several times in opposition to any changes in the law of the 
 last few years. I feel that the ships should have the same right to 
 discharge the crew as the crews have of leaving. Very often a vessel 
 chartered from here will ship a crew from here to Gulfport and back 
 to Boston, or wherever her port may be. On the arrival there the 
 master of the vessel finds business much better in some other direction. 
 He can not discharge that crew. They can either make you pay their 
 passage back or else demand and receive two months' extra wages, 
 whereas if they want to leave the ship you have absolutely no claim 
 upon their services. 
 
 I have had several cases here. Once last year, or the year before 
 last, where I had a vessel in Bath, loaded with ice for Key West, a 
 perishable cargo, I sent two crews from here, and the moment they 
 arrived in Bath they said, "We will not go." Then we had to go to 
 the expense of $125 to tow the vessel to Boston before we could get a 
 crew to go aboard of her, and they went the voyage. 
 
 The same thing happened also in Portland, where a vessel was loaded 
 for Buenos Ayres. We shipped a crew and sent them down there. 
 The moment they got down there they left, and we had to send either 
 two or three crews down there before we could get one to go aboard 
 the vessel and stay there. There is absolutely no redress. 
 
 Very often in the port of Boston a crew will go aboard, and by 
 adverse winds we will be detained from sailing anywhere from three 
 days to a week, and about the time a fair wind comes they will leave, 
 and you have to lose the fair wind while you are getting another crew. 
 
 Representative Minok. That made three crews for one vessel ? 
 
 Mr. Freeman. Yes, sir; at Bath, and two for the other. 
 
 Representative Minor. Was any special reason given for deserting? 
 
 Mr. Freeman. One of the vessels had aboard a colored boy whom 
 the captain had brought from the West Indies, and they would not go 
 with him. He was not a union man. The captain discharged the boy, 
 and then they said they would not go. 
 
 Representative Minor. That is in the coasting trade ? 
 
 Mr. Freeman. That was going to Key West. The Portland vessel 
 was bound to Buenos Ayres with lumber. 
 
 Representative Minor. We are quite anxious to have suggestions 
 from practical gentlemen as to remedies for that evil. 
 
 Mr. Freeman. I have heretofore been before committees in Wash- 
 ington, and 1 met you on a committee on one of those occasions. 
 
 Representative Minor. I do not remember your special views. 
 
 too little control of sailors. 
 
 Mr. Freeman. I was very much against giving the men the right 
 to leave after they had signed for the voj^age. I think when they 
 have entered intoa contract to go a voyage, they should be compelled 
 to go that voyage unless, because of the vessel being unseaworthy or 
 something of that kind, they can get out of their contract. But I 
 believe, and I think it is the opinion of all the owners of tonnage on 
 this coast, that a crew should be kept to its agreement. As 1 say, they 
 
HEARINGS BEFOEE THE MEECHANT MARINE COMMISSION. 563 
 
 leave now whenever they want to. You may ship a crew to Fernan- 
 dina, Brunswick, or Jacksonville, to load a cargo of lumber, and you 
 ship them for the round voyage. They are taken out down there by 
 some of the sailor boarding-house keepers or runners, and often we 
 have to pay $35 for the run back to Boston, and then it is a little hard 
 to get the men. 
 
 representative Minor. Would you suggest imprisonment for the 
 violation of a contract under those circumstances? 
 
 Mr. Freeman. Yes, sir; I would most assuredly. 
 
 Representative Minor. That would mEiJke the sailor an exception to 
 the law applying to the general mass of our people. 
 
 Mr. Freeman. I thinK the trade is different. I think the vessel 
 trade is a distinct trade, and the owners are not in a position where 
 they can hire men the same as a factory or any corporation that is on 
 shore. 
 
 Senator Mallort. If you were to succeed in getting Congress to 
 pass an act to compel sailors to carry out their shipping contracts, you 
 would not want the right to discharge them at the wUlof the master? 
 You said a while ago that you thought he should have the right to dis- 
 charge them. 
 
 Mr. Freeman. If you give the sailor the right to leave, you should 
 give the captain the right to discharge him. 
 
 Senator Mallort. You can not compel the sailor to stay. 
 
 Mr. Freeman. But he can compel the ship to carry out its con- 
 tract. If they are going to have the right to leave, we should have 
 the right to discharge them at any time. 
 
 Senator Mallort. How would that better things ? It would not 
 remedy the evils. 
 ' Mr. Freeman. Certainly. If we are going to lay in a port a month, 
 if we get clear of those sailors we save a month's wages, but under 
 the law we can not get rid of them 
 
 Senator Mallort. The trouble you complain of is that the crew, 
 when you want them, quit. The right to discharge them would not 
 help you in getting another crew. 
 
 Mr. Freeman. We can always get a crew, but when they have gone 
 away we are in a position where we have to pay higher wages. The 
 men are in the charge of boarding-house masters down there. They 
 create a price which is too high. There is no money in paying $35 
 for men to come from Brunswick to Boston, when the trip may be 
 made in jive days or in ten days at the outside, whereas the regular 
 wages would not be over $10. 
 
 Senator Lodge. You think that both ought to be free or both ought 
 to be bound? 
 
 Mr. Freeman. Either both ought to be bound or both ought to be 
 free. 
 
 WHT WAGES ARE SO HIGH. 
 
 Senator Mallort. What is the reason you ascribe for the extrava- 
 gant rate of wages paid upon American ships as compared with foreign 
 ships? 
 
 Mr. Freeman. I think they are banded together to a larger extent 
 here than they are in foreign ports. They have a scale of wages 
 which is put into effect, especially on coastwise vessels, by unions, 
 and they are practically under the domination of those men. 
 
564 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Senator Mallory. You think the uuions are the cause of it? 
 
 Mr. Freeman. I think they have been largely the cause of our 
 troubles in the past few years. 
 
 Senator Lodge. Does not the scale of wages on shore have some- 
 thing to do with it ? 
 
 Mr. Freeman. Yes, sir; to some extent, but I think the wages in 
 the last few years have been higher than the return on the investment 
 would warrant. 
 
 Senator Mallory. Have wages in the coastwise trade increased much 
 in the last ten years 1 
 
 Mr. Freeman. They have, very decidedly. 
 
 Senator Mallory. They have ? 
 
 Mr. Freeman. Yes, sir. 
 
 Senator Mallory. Do you know to what that is ascribable? 
 
 Mr. Freeman. A demand for higher wages and a refusal to go at less. 
 
 Senator Mallory. Why is that? That is what I want to get at. 
 
 Mr. Freeman. I can not tell the reason, except that the men have 
 banded themselves together to get higher wages, and the owners have 
 been forced to concede their demands largely. It is only in the 
 last few months that we have been able to get— — 
 
 Senator Mallory. Do you find that those high wages, or those 
 excessive wages, if I may use that expression, prevail in all our ports? 
 Are there not some ports in the United States where you can get sea- 
 men at a lower rate of wages than in others? 
 
 Mr. Freeman. At different seasons of the year in the southern 
 ports you can get them at a lower rate, because the men are south and 
 want to come home. Take the months of April and May. The sail- 
 ors want to get north, and they will come up for a short time at a 
 lower rate of wages. As against that, if we want to go south in the* 
 summer we have to pay a higher rate of wages, because the sailors do 
 not want to go south in summer. 
 
 Senator Mallory. Something, then, depends on the voyage; whether 
 it is a voyage going north or a voyage going south? 
 
 Mr. Freeman. Yes, to a very limited extent. But now they have 
 a regular schedule of wages for vessels of 500 tons and over. 
 
 Senator Mallory. Who establishes that scale of wages? 
 
 Mr. Freeman. It comes directly from the union here in Boston. 
 
 Senator Mallory. That is in Boston, but how about Gulfport, 
 Miss. Do you know anything about that? 
 
 Mr. Freeman. The boarding-house men regulate it. 
 
 Senator Mallory. Have they a sailors' union down there? 
 
 Mr. Freeman. I do not think they have. The sailors' union does 
 not affect foreign trade to any extent. 
 
 Senator Mallory. But it does the coastwise ? 
 
 Mr. Freeman. The coastwise trade. I do not know whether they 
 have a branch there or not. I should suppose not, because it is practi- 
 cally a new port. It is a port which has come into the market within 
 the last four or five years. It is the terminus of the Gulf and Ship 
 Island Railroad, and they have made special efforts to boom the port, 
 as it were. It is one of the best of the southern Gulf ports, and one 
 of the cheapest southern ports, too. But the bulk of the coastwise 
 trade is between Boston, New York, Philadelphia, Baltimore, and 
 Newport News. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 565 
 
 STATEMENT OF EDWIN F. ATKINS. 
 
 Edwin F. Atkins appeared before the Commission. 
 
 The Chairman. Will you first state to the Commission what your 
 line of business is 1 
 
 Mr. Atkins. For present purposes it is sufficient to state that I am 
 engaged in the importation and exportation of merchandise. My 
 interests are varied, but do not include any ship-owning interest. 
 
 The Chairman. The Commission will be glad to hear any views you 
 may wish to present. 
 
 ■ Mr. Atkins. Mr. Chairman and gentlemen, many years ago my 
 house was the owner of ships. As they wore out we did not replace 
 them, owing to the conditions that have prevailed. I will not go over 
 the ground which others have already exhausted, but will merely con- 
 fine myself to one point — the cost of building. 
 
 All my merchandise is carried, and it has been for a good many 
 years, in foreign bottoms, because I can charter those vessels much 
 cheaper than I can operate my own under the American flag. I could, 
 of course, build those ships in England, but we would have to operate 
 them under the British flag. 
 
 The great difi'erence in cost to-day between shipbuilding abroad and 
 here in the United States, I believe, is due to the fact that the raw 
 material, the steel plates and steel frames, are sold abroad so much 
 below the cost in this country. 
 
 Senator Lodge. Can we not import steel for shipbuilding purposes 
 free under the tarifl' law? Can we not, in fact, import all ship mate- 
 rials free? 
 
 Mr. Atkins. Yes, for shipbuilding, but, as I understand, when that 
 material goes into a ship she can not do a coasting business. 
 
 Representative Minor. That is right. 
 
 Mr. Atkins. And very soon she can not do Philippine Island busi- 
 ness. Nobody wants to build an American ship unless he has the 
 privilege of the coastwise business. 
 
 -URGES TARIFF REDUCTION. 
 
 I have had occasion within a very few days to buy some plates for 
 shipment abroad, putting them up in a foreign country. It led to my 
 looking up the cost. The cost to-day of those steel plates delivered 
 here in Boston is approximately 139.50 a ton. The English Engineer, 
 issued on the 13th day of May, quoted those same steel plates in Liver- 
 pool at $27.33 a ton. There is a difference of |12 a ton. If you will 
 figure that out you will find that the difference is just about equal to 
 the duty and the freight to import them. 
 
 A friend of mine in New York received a request six months ago to 
 get the lowest price of Carnegie steel plates. He looked it up very 
 carefully. It was for a royal mail steamship line in one of the Euro- 
 pean countries, and he wrote them the bottom price. They replied 
 that they were very much obliged, but they could buy the same plates 
 in Liverpool for f 12 a ton cheaper, just the figures I give you to-day. 
 
 There are many ways of equalizing the cost of building between 
 this country and abroad, or the Government can step in, as has been 
 suggested, and pay the loss of operation. It seems to me before we 
 
566 HEAKINGS BEFORE THE MERCHANT MABIKE COMMISSION. 
 
 can establish a merchant marine — I am not speaking of coasting ves- 
 sels, for we are sure of the coasting business — we must go to the bot- 
 tom of things. We must make a reduction in our high tariff, in the 
 steel schedules to begin with, and in other articles entering into the 
 ship-building business. 
 
 1 hope the reporters will not put that statement into the papers 
 until after November, because I am a good Republican and expect to 
 vote the Republican ticket. But that, gentlemen, is the trouble. 
 That is the bottom of the difficulty here. 
 
 MATEKIAL A MINOR FACTOR. 
 
 Senator Lodge. Mr. Atkins, how much difference in the total cost 
 of a ship does the difference in the price of steel make? 
 
 Mr. Atkins. I am using the article of steel because it is the leading 
 article in the construction of a ship. 
 
 Senator Lodge. How much difference does it make in the total cost 
 of a ship? 
 
 Mr. Atkins. I have not looked into the actual cost of building here 
 and abroad. 
 
 Senator Lodge. Admiral Bowles testified in New York that the dif- 
 ference in the price of steel in the total cost of a ship was less than 6 
 per cent. 
 
 Mr. Atkins. I think that must be a mistake. I can not understand 
 that. 
 
 Senator Lodge. He is supposed to be a practical shipbuilder. 
 
 Mr. Atkins. In the cost of the steel? 
 
 Senator Lodge. He said that in the total cost of a ship the difference 
 in the cost of steel amounted to only from 3 to 5 per cent. 
 
 Mr. Atkins. 1 can not understand that at all. 
 
 Senator Lodge. He thinks the great difference in shipbuilding comes 
 from the price of labor in shipyards, and that is the uniform testimony 
 of every shipbuilder we have heard. 
 
 Mr. Atkins. Here is the actual price, if you will allow me to diverge 
 for a moment. 
 
 Senator Lodge. There is no dispute about the difference, but the 
 question is how much that difference makes in the total cost of the ship 
 when done. 
 
 Mr. Atkins. The difference in the total cost of the ship when done, 
 as I get it from friends much more competent to judge than I am, is 
 this: A ship of equal tonnage and equal quality' can be built over there 
 for about 65 per cent of what she can be built for here. 
 
 Senator Lodge. Admitting that, or whatever it may be, the best 
 experts say that of that difference only 5 per cent is attributable to the 
 difference in steel. 
 
 Mr. Atkins. I can not explain where that difference comes in, but 
 I know there is an actual difference in steel plates 
 
 Senator Lodge. We are all aware of that. We have had the price 
 of steel given again and again. 
 
 Mr. Atkins. The difference is |12 a ton. 
 
 Senator Lodge. The question is how much it amounts to in the 
 total cost of the ship. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 567 
 
 MACHINEKT FOR EXPORT. 
 
 Mr. Atkins. That the Commission is more competent to figure out 
 than I am, because it can get the weight of the material entering into 
 the ship. 
 
 I buy a good deal of machinery — steel goods for export. Last fall 
 1 had occasion to place some orders, and I was astonished at the high 
 price of steel in this country as compared with abroad. 1 placed quite 
 an important order in Glasgow for heavy sugar machinery, 22 per 
 cent below the lowest bid I could get in this country from a number 
 of bidders. After that machinery was delivered I met the seller. It 
 was the first time I had ever met him. He is one of the largest man- 
 ufacturers in Europe. He is a very well-known man. We were 
 dining together, and incidentally we were speaking about the Cham- 
 berlain policy. 
 
 He told me that while theoretically he favored that policy of a dis- 
 criminating duty against foreign goods, practically he was opposed to 
 it, "for," he said, ^'Mr. Atkins, as long as I can buy my material in 
 the United States cheaper, by many dollars per ton, than your own 
 manufacturers can get it, 1 can sell machinery to Cuba; 1 can sell 
 machinery to all the South American States and British colonies at far 
 below the cost of any of your manufacturers." 
 
 One of our best manufacturers in Boston, a man with whom I have 
 dealt for years, solicited orders for steel goods from me. I told him 
 it was impossible to give him any orders, owing to the difference in 
 raw material, and that I must place those orders in Europe. He went 
 to work on the matter, and the result is that to-day any manufacturer 
 of steel or iron goods can buy his raw material to go into goods to be 
 exported and get $5 a ton drawback upon them, not from tiie Govern- 
 ment, but from the foundries and the big corporations. 
 
 Now, when that duty on steel was esteblisned years ago it was nec- 
 essary. 1 believed in it. But the day for that necessity has passed. 
 The only excuse to-day for keeping this high tariff, this extremely 
 high tariff, upon steel is to enable the steel men to pay dividends on 
 watered capital. There is no other reason. When you want to estab- 
 lish a mercnant marine you must equalize the cost between the United 
 States and Europe, and if you wish, you can equalize the cost by 
 reducing the extremely high tariff on shipbuilding materials. 
 
 The Chairman. Can we do it without reducing American labor to 
 the European standard? 
 
 Mr. Atkins. I think so. 
 
 The Chairman. I do not see how. I think that would be difficult 
 for you to explain. 
 
 AMERICAN LABOR TOO HIGH. 
 
 Mr. Atkins. I think American labor is altogether too high. 
 
 The Chairman. Oh! 
 
 Mr. Atkins. Take the wages of our seamen. The Swedish or Nor- 
 wegian sailor under the American flag will get $30 or $35 a month. 
 Under his own flag, shipping from the same port, he does not expect 
 more than $13 or fli a month. I do not think that is right. 
 
 The Chairman. Are you in favor of building up American shipyards 
 and American establishments by reducing labor? 
 
568 HEARINGS BEFORE THE MEECHABTT MARINE COMMISSION. 
 
 Mr. Atkins. Where American labor is extremely and iin reason ablj^ 
 high. 
 
 The Chaieman. Is it extremely ^igh in your judgments 
 
 Mr. Atkins. It is. It has got to come down, but that will not be a 
 matter of legislation. It will regulate itself. 
 
 The Chairman. Do you think that, relatively, the workingmen make 
 a greater profit than you do in the sugar business ? 
 
 Mr. Atkins. Yes, sir; in proportion to their capital._ 
 
 The Chairman. Their capital is their muscle and their brains. 
 
 Mr. Atkins. Yes. I say that matter will regulate itself. It does 
 not require legislation. It will be regulated by the law of supply and 
 demand. 
 
 The Chairman. You say the difference between building abroad and 
 here is 65 per cent? 
 
 Mr. Atkins. I do not state that it is 65 per cent. I said the opin- 
 ions I get from others indicate that it is about 65 per cent. 
 
 The Chairman. Admiral Bowles, who is at the head of the Fore 
 River Ship and Engine Company, Quincy, Mass., says the difference 
 in cost on account of steel is 5 per cent. How are you going to get 
 rid of the other 60 per cent? 
 
 Mr. Atkins. Mr. Winsor gave some figures here a little while ago. 
 I do not remember what they were, but I think they were about 65 
 per cent. 
 
 Mr. WiNSOR. No, sir. 
 
 Mr. Atkins. He can explain that better than I. 
 ' Senator Lodge. Nobody questions the total difl'erence. It has been 
 testified to as being all the way from 30 to 80 per cent. The question 
 is how much is due to the difference in the cost of steel. 
 
 Mr. Atkins. That I can not give you. 
 
 Senator Lodge. Admiral Bowles testified that about 5 per cent was 
 due to the difference in the cost of steel. 
 
 Mr. Atkins. I suppose if steel is $12 a ton cheaper there, which is 
 33 per cent of the cost here, that in the cost of a ship it would make a 
 greater difference than 6 per cent? 
 
 Senator Lodge. I am not an expert on it. 
 
 Mr. Atkins. I am not an expert, either, and I can not answer ques- 
 tions in regard to the detail. 
 
 Senator Lodge. But assuming that we have the steel duties reduced, 
 do you think that would solve the entire difficulty as to shipping? 
 
 Mr. Atkins. I do not think it would solve the entire difficulty, but 
 I think the other difficulties would solve themselves. 
 
 Senator Lodge. We are, of course, interested entirely in ships in 
 foreign commerce. Those ships can be built of foreign steel, of the 
 cheapest steel that can be bought. 
 
 ■ The Chairman. Without duty. 
 
 Senator Lodge. Without duty or by rebate of the duty. All mate- 
 rials entering into the building of a ship to be used in foreign commerce 
 are free. How does the change you propose help it there ? 
 
 Mr. Atkins. Take Mr. Winsor, perhaps, who is running ships to 
 the Philippine Islands. I should suppose in building ships he would 
 want to know that he could operate his ships to the Philippine Islands. 
 After that becomes coastwise trade he can not do it. ^ 
 
 Senator Lodge. I am not discussing the coasting trade, because that 
 is a monopoly to Americans. What we want to build up is the foreign 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 569 
 
 trade, and in that trade all ship material can be imported free. Now, 
 does not the trouble lie somewhat deeper than the cost of material^ 
 
 Mr. Atkins. Material is free, Mr. Chairman, but the cost abroad is 
 based upon the export price from the United States after they get the 
 drawback. If it was not for that difference — if it was not for the 
 drawback that is given here by the manufacturers — the cost abroad 
 would be very much greater. You take $27 a ton there. Bring that 
 material back here again, and I do not think you can put it into the 
 ship at a saving. 
 
 Representative Minor. It is only a question of freight. 
 
 The Chaibmax. It is only a matter of transportation; that is alk 
 
 Mr. Atkins. I will not take the time of the committee further. 
 
 THE EXPORT REBATE. 
 
 Senator Mallort. Excuse me a moment. If I understand you 
 aright, you say that we are shipping manufactures of steel to England 
 and selling them there at a rate $5 per ton less than the home rate? 
 
 Mr. Atkins. Yes, you can now get a drawback from the United 
 States Steel Corporation of $5 a ton on all goods that enter into man- 
 ufactures to be exported, upon presenting a proper certificate of land- 
 ing in a foreign country. 
 
 Senator Mallort. Do you know whether that covers steel plates 
 for shipbuilding? 
 
 Mr. Atkins. It does; all materials; and if |5 is not enough, you can 
 probably get more. Now, as long as the Englishmen can build under 
 those conditions they are going to take advantage of it, and I see no 
 way of competing. 
 
 Senator Mallort. I understood you to say that you had some 
 interest in ships some years ago. 
 
 Mr. Atkins. Some _years ago. 
 
 Senator Mallort. If you wanted to build a ship do you not think 
 you would be deterred somewhat from building her, even though you 
 could put her under the American flag in the foreign trade, if you were 
 unable to put her under the American flag in the coastwise trade? 
 
 Mr. Atkins. Undoubtedly. 
 
 Senator Mallort. You would not care to own a ship which you 
 could use under the American flag in a halfway capacity only ? 
 
 Mr. Atkins. Certainly not. Many ships have to make triangular 
 voyages, bringing cargo from Cuba to New Orleans, and going around 
 to New York; and the vessels j'ou refer to can not carry cargo between 
 one domestic port and another under those conditions. 
 
 Senator Mallort. You think, then, that the fact that you can get 
 your materials free, but can not put the ship in the coastwise trade, is 
 not much of an incentive to build a ship? 
 
 "Mr. Atkins. No; it does not seem to be an incentive, and the best 
 proof of it is that ships have not been built under these conditions. 
 They had the opportunity. I think very few ships have been built 
 under those conditions. 
 
 Senator Lodge. Suppose ships were to be made free — free ships. 
 Do you not think it would be demanded that those ships should be 
 admitted to the coastwise trade ? 
 
 Mr. Atkins. Uundoubtedly. That is the only way of settling it. 
 
 The Chairman. You are in favor of that? 
 
570 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Mr. Atkins. I am not if j^ou can find a better method. I think the 
 reduction of duties is a far better method, and that will enable the 
 shipbuilders to build ships here. 
 
 LOWBK DUTIES, LOWER WAGES. 
 
 Representative Minor. You favor a reduction of duties and a reduc- 
 tion of wages to sailors ? 
 
 Mr. Atkins. A reduction of extremely high duties, such as the steel 
 schedule. 
 
 Representative Minor. How about wages ? 
 
 Mr. Atkins. I do not propose to legislate about wages. 1 suppose 
 wages will regulate themselves the same as all things regulate them- 
 selves. 
 
 Representative Minor. Did you not state that American labor is 
 very high, and the cost of operating a ship depends, of course, upon 
 the wages paid to American seamen 'i 
 
 Mr. Atkins. It is very high. 
 
 Representative Minor. Too high, you thought? 
 
 Mr. Atkins. Very high; too high to do any business; and when it 
 comes to that point, business stops and wages come down. The rail- 
 roads of the United States within the past thirty days have discharged 
 nearly one hundred thousand employees. That is the first step to the 
 reduction of wages. That is a matter you can not regulate by legis- 
 lation. 
 
 The Chairman. The Commission will now take a recess until 2.30 
 o'clock this afternoon. 
 
 Thereupon (at 1 o'clock p. m.) the Commission took a recess until 
 2.30 o'clock p. m. 
 
 AFTER RECESS. 
 
 At the expiration of the recess the Commission resumed its session. 
 STATEMENT OF HENRY W. PEABODY. 
 
 The Chairman. Is Henry W. Peabody present? 
 
 Henry W. Peabody appeared before the Commission. 
 
 The Chairman. Kindly state to the Commission what your busi- 
 ness is. 
 
 Mr. Peabody. 1 am in the general commercial business with for- 
 eign countries and have been all my life. 
 
 The Chairman. You are familiar with the scope of this inquiry, I 
 presume? 
 
 Mr. Peabody. I think I am, sir. 
 
 The Chairman. Mr. Peabody, the Commission will be pleased to 
 hear your views on the subject. 
 
 Mr. Peabody. The nature of my business has required me for the 
 last forty j^ears and more to charter vessels for the export of merchan- 
 dise, and also for the import of merchandise, and I have deplored as 
 much as anybody can the decay of our commerce, of which I have 
 been constantly aware. 1 have always been desirous that our mer- 
 chant marine should be re-created, but not until 1896 did I commence 
 to take a legislative view of the subject. 
 
 My attention was then called to the subject by the declaration in 
 the Republican plalform in favor of discriminating duties, which I 
 
HEARINGS BEFORE THE MEBOHANT MARINE COMMISSION. 571 
 
 believed to be a pernicious method of endeavoring to accompIisJi a 
 re-creation of our merchant marine. It was not appropriate to agi- 
 tate the subject at that time, or until after the election. I was deeply 
 interested in the election of President McKinley, and I had arranged, 
 if he was elected, to go to Australia, and I went. But before leaving 
 I wrote a letter to President McKinley, stating to him my objections 
 to the method proposed by the platform and urging that he should not 
 recommend it in his message. I then stated to him my objections in a 
 few words. I will read just one sentence which I have to-day copied 
 from the letter: 
 
 ' ' I venture to express my utter dissent and objection to the pro- 
 posed plan to build up a dead industry, the building of ships for 
 foreign trade, by choking the commerce which uses them." 
 
 I have progressed since that time, but this was my positive expression. 
 "I have for years believed that the American ownership for foreign 
 trade might be coaxed into being by a different course, the opportu- 
 nity to buy the best in the cheapest markets of the world for a term 
 of years, to be limited to foreign business, and to be free of all tax as 
 property. Not under private ownership but corporate, for the cus- 
 toms of to-day do not require that a merchant shall own any vessels." 
 
 The President did recommend discriminating duties, but it was a 
 dead issue for the next two years. 
 
 When Congress opened in December, 1898, 1 was in London attend- 
 ing to business there, and then President McKinley recommended a 
 new measure for the re-creation of the merchant marine — the applica- 
 tion of a subsidy — and, to hasten results, the admission of vessels of 
 foreign build, coupled with the obligation to duplicate the tonnage in 
 this country. I was able to see the effect that that had upon the busi- 
 ness community of England, and 1 appreciated that it was a very far- 
 reaching and wise recommendation. 
 
 * On the 9th of December I cabled to the President my approval of 
 and belief that such a measure wouM re-create the merchant marine. 
 1 sent a cable to our Senator, Mr. Lodge, and to the Secretary of the 
 Treasury, urging the same action. 
 
 A STKONG ADVOCATE OF SDBSIDT. 
 
 From that time to this I have been a strong advocate of subsidies 
 and strongly desirous of re-creating the merchant marine generally 
 upon that principle, which I heartily accepted and believe in now. 
 
 But I am aware that changes have come in the last few years, and 
 that what might have been possible six years ago would not be so 
 feasible to-day. 1 am quite ready to accept the application of the 
 same stimulus upon different conditions, and since it is the desire of 
 the shipbuilders to eliminate foreign vessels I have no desire to urge 
 that they should be admitted. But I am strongly in favor of the 
 passage of a subsidy measure, because 1 think it is the only way to 
 create something which we have not got. 
 
 1 believe that the subsidy elements of the Payne bill and the Hanna 
 bill and the Frye bill were substantially upon good lines — the grant- 
 ing of a mileage subsidy to vessels according to their speed and 
 according to the distances traveled, and also mail subsidies. I believe 
 if a system of that sort could be established, the tonnage of the United 
 States would materially increase. 
 
572 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 AGAINST DISCRIMINATING DUTIES. 
 
 I need not say very much more in favor of subsidies wiien I say I 
 fully approve of them, but I should say something in regard to my 
 reasons for disapproving of the other principle which has been advo- 
 cated by many here to-day — that is, discriminating duties. I do not 
 believe it is a good plan to charge a penalty for what is not done, 
 when we may pay a premium for what is done. Suppose we were to 
 commence to discriminate by a differential, as some have said, of ten 
 per cent, or, as others have said, of five per cent, upon our imports. 
 
 Five per cent would be a sufficient enormity. Upon $800,000,000 of 
 imports it would involve an expense of 14:0,000,000, which is five times 
 as much subsidy as was considered in the Frve bill. In 1901 we 
 imported in American bottoms but $93,000,000 out of $776,000,000 of 
 imports. The amount of imports exempt from discriminating duties 
 would be only $93,000,000, the differential thereon aggregating about 
 $4,500,000; and we can all see that if that was exempted, it would 
 simply be a tax in another form, because the American ships would 
 exact the larger part of the five per cent dut}^ in their enhanced rates 
 of freight. 
 
 My thoughts naturally turn to hemp, of which I am a large importer. 
 It is on the free list. Manila hemp at the present time is worth about 
 $180 a ton. Five per cent upon that value would be $9 a ton, which 
 would be just about the amount of the freight from the Philippines to 
 this port, and a 100 per cent rise in the freight would be no more than the 
 shipowner would exact if he had the absolute monopoly. It amounts, 
 in other words, to the consumer of hemp, to nearly a half a cent a 
 pound, which would be a great handicap in competing with other 
 countries that manufacture cordage. 
 
 Senator Lodge. You are assuming that in order to make discrim- 
 inating duties operate, with anything like fairness the Government 
 must impose a duty on articles now on the free list? 
 
 Mr. Peabodt. I have assumed that. 
 
 Senator Lodge. I think you are right about it. Where you could 
 not make a reduction in favor of the article imported, you would have 
 to impose a duty upon the article when brought by a foreign carrier. 
 
 Mr. Peabody. I suppose the same principle would apply by the 
 reduction of duties on goods brought in American vesssels. 
 
 Senator Lodge. On dutiable goods. 
 
 Mr. Peabody. On dutiable goods. 
 
 It is not my province to discuss the legality of this measure, but I 
 think I may say that I have heard through many years opinions 
 expressed by our leading Senators and by eminent counsel, such as 
 ex-Senator Edmunds, that discriminating duties are in conflict with 
 our treaties, and that there is no objection to the subsidy system, and 
 when we see European countries paying subsidies to their ships with 
 good results, I do not think we should hesitate about adopting a simi- 
 lar rule for our own navigation. 
 
 It is a reasonable thing for the people of the United States, as a 
 whole, to pay for our disability. We are not on equal terms with 
 other countries in the matter of building or running ships. We know 
 it. It is not the place of our commerce itself to be burdened with 
 high rates of freight to obviate that disadvantage, but it is the proper 
 thing for the Government of the United States to institute a system 
 
HEARINGS BEFOEE THE MERCHANT MARINE COMMISSION. 573 
 
 of bounties which shall induce American citizens to build and run, and 
 compensate them for building and running, American ships in compe- 
 tition with the world. I should deplore very much seeing our com- 
 merce put upon fictitious rates in order to pay the cost of running the 
 ships. 
 
 BETTBE FREIGHTS UNDER A SUBSIDY SYSTEM. 
 
 Senator Mallory. You think if American ships were the only ones 
 which brought European products it would be bound to follow that 
 freights would be put up by American shipowners ? 
 
 Mr. Peabody. I am sure they would be. They do not gainsay that 
 themselves. They would be foolish if they did not take advantage 
 of it. 
 
 Senator Mallory. Whereas, by a subsidy system, you would have 
 the competition of the world? 
 
 Mr. Peabody. They would have to take freights at current rates, 
 except coastwise, and it is likely, in the course of a couple of years, 
 that the Philippines will be put on that basis. 
 
 Senator Mallory. Have you considered, with reference to this mat- 
 ter, the feature of allowing European vessels to bring the products of 
 their own countries to the United States without any discrimination, 
 confining the discrimination to the indirect trade? 
 
 Mr. Peabody. That was done in former years, but the custom of 
 the world's commerce to-day is to disregard the flag of the vessel. I 
 do not know of anjr nation that carries out that principle now. 
 
 Senator Lodge. Make no distinction between direct tonnage and 
 indirect tonnage? 
 
 Mr. Peabody. No, sir. The less we run counter to general rules of 
 commerce, the better for the American people. It may be a little 
 more difficult to legislate in favor of a subsidy, but it is a good thing 
 to try hard for, and I fully believe in it. I desire very much that it 
 shall be accomplished, and if such a measure is put up, without any 
 elements in it which render it necessary that I should not be in favor 
 of it, 1 would most heartily support it. 
 
 AS to previous bills. 
 
 Senator Mallory. I noticed that you indorse the principle of the 
 Hanna-Payne bill. That provided for a subsidy based on tonnage and 
 speed, both. 
 
 Mr. Peabody. Yes, sir. 
 
 Senator Mallory. That is, the subsidy under the first head was 
 based on tonnage and speed both. 
 
 Mr. Peabody. Yes, sir. There were elements in the Hanna bill 
 which 1 liked better than the Frye bill. It went back to the recom- 
 mendations of the President. His recommendation was to apply the 
 principles according to which the St. Louis and St. Paul were built in 
 this country upon the admission of the Paris and New York. There 
 were equal tonnage and equal quality after they were admitted. They 
 were in just as good a position to realize a hundred per cent bounty as 
 the American-built vessels were; but when the Frye bill was intro- 
 duced, while it required the building of equal tonnage, it gave only 50 
 per cent of the aid to the foreign-built ship, and the Frye bill cut it 
 down still further in other ways; but my principal objection to the 
 
574 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Fiye bill was that the privilege of registiy of foreign ships, with 
 agreement to duplicate the tonnage in our yards, was not opened to 
 the public, but was limited to a few companies in New York, who 
 already owned about 318,000 tons of foreign steamers. 
 
 There was another feature to which I particularly objected — that 
 they were throwing down the bars to ownership. There was a clause 
 in the bill which provided that whenever the word "citizen" was used 
 in those bills it should be understood to mean a citizen of the United 
 States, or corporations formed under the laws of the United States, or 
 under the law of any State or Territory, or of a foreign country. I 
 considered that that was practically allowing our flag to be used as a 
 cover for foreigners, even, to own vessels; and heretofore we have been 
 as careful to guard ownership as we have the admission of vessels to 
 American registry. 
 
 Another thing to which I objected was that the speed basis for 
 realizing the subsidy was based upon a trial trip by the steamer. The 
 subsidy was to run for a twenty -years' term, and 1 advocated that the 
 steamer should be paid for what she did, not what she could do out on 
 a trial trip, when she was new; that if she slowed up afterwards, she 
 should be paid as a slow ship should be paid. 
 
 I think there was not sufficient attention given to the cargo ships, 
 which under a simple mileage bounty would nave the full benefit; and 
 it is a most important class of vessels to provide for. I refer to 
 vessels of moderate speed. 
 
 Senator Lodge. You prefer the French system of mail subsidy and 
 mercantile subsidy to the English, which is almost exclusively that of 
 mail subsidy? 
 
 Mr. Peabody. I do. Senator; and the French are showing the power 
 which is given to them by competing now very visibly in the foreign 
 trade. They are even underbidding the English and other nationali- 
 ties which have no subsidies; and if they had as many vessels as the 
 English, or vessels enough, they would run the English out of the 
 trade to some extent. 
 
 OUR SHIPBUILDING CAPACITY. 
 
 The Chairman. The Commissioner of Navigation says that by mid- 
 summer the American coast shipyards will be employed only to about 
 one-third their capacity, and this will be exclusively on war vessels 
 and coastwise vessels. Could you estimate how much these yards 
 could put under construction, in addition to the war vessels and coast- 
 wise vessels, if they were given orders at once to do so? 
 
 Mr. Peabody. I remember at the time of the proposed subsidy leg- 
 islation the same gentleman, the Commissioner of Navigation, Mr. 
 Chamberlain, stated that he considered that the full capacity of the 
 American shipyards to produce steamships of the character needed for 
 the foreign trade was about 75,000 tons a year. Upon that principle 
 it is easy to see that if at the present time we have vessels enough to 
 carry 12 per cent of our imports, it would take us ten years at that 
 rate to build another 800,000 tons, to do 25 per cent of our imports, 
 and all that time, if we had 5 per cent discriminating duties, we would 
 be paying $40,000,000 to $50,000,000 a year; and that is the point to 
 which I wish to direct my remarks to-day — -in opposition to discrimi- 
 nating duties. I think most of the people who favor them have not 
 looked at them in just the right way. It is a very expensive process. 
 
HEARINGS BEPOEE THE MERCHANT MARINE COMMISSION. 575 
 
 TREE SHIPS USELESS WITHOUT A SUBSIDY. 
 
 The Chairman. Do you believe that the opening of American reg- 
 istry to foreign ships, without any form of national aid and encourage- 
 ment to offset the higher cost of operation under the American flag, 
 would amount to very much in building up the American merchant 
 marine? 
 
 Mr. Peabody. I do not believe it would be of any advantage. 
 
 The Chairman. If foreign shipowners control the most of our gen- 
 eral trade — and of course they have the vessels and the experience — 
 would free ships alone, in your judgment, put the Americans on any- 
 thing like a parity with them? 
 
 Mr. Peabody. No, sir; I do not believe it would be of any advan- 
 tage without a subsidy. 
 
 STATEMENT OF R. G. F. CANDAGE. 
 
 K. G. F. Candage appeared before the Commission. 
 
 The Chairman. Have you heretofore been engaged in the business 
 of shipping? 
 
 Mr. Candage. I have been a sailor and shipmaster, and an owner of 
 ships, etc. 
 
 The Chairman. The Commission will be glad to hear any views you 
 have to express. 
 
 Mr. Candage. I do not wish to take up a great deal of time or to go 
 over the ground which has been already traversed, but I wish to make 
 a few remarks. 
 
 First, 1 believe in establishing mail vessels to open up new trade, 
 especially between here and South America. I can see no reason why 
 a letter which you, Mr. Chairman, may send to Buenos Ayres, should 
 first be compelled to go to Liverpool or London and then find its way 
 to Buenos Ayres, and the answer come back in the same circuitous 
 manner, instead of having direct communication. 
 
 If gentlemen engaged in the South American trade want even to 
 feel of the market there, the opportunity for those on the other side 
 of the Atlantic is twice as great as we on this side enjoy, and while we 
 were making the inquiries they would supply the market. That is 
 the case, and it has been the case. The republics of South America 
 are naturally our allies in politics and comity. That is one point. 
 
 IN FAVOR OF SUBSIDIES. 
 
 I favor subsidies, as the previous speaker does, first because they 
 are direct, and then because we have before us the experience of 
 European nations which have tried them and where the system has 
 been effective. It is a direct system, and it is not encumbered with 
 other conditions. If we can not have subsidies, then I should hope 
 that we might try preferential duties, although there are a great many 
 complications, and, so far as the Treasury of the United States is con- 
 cerned, I do not think it would make any difference. If there were a 
 difference we would pay more by differential duties than by subsidies. 
 More money would go out of the Treasury by that means. 
 
 I believe in subventions for vessels built under naval requirements 
 and for naval uses when needed, as England and other nations pay. 
 
576 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 I think that covers in general what I wish to state to you. I do not 
 want to take up your time, for I know there are a great many gentle- 
 men who would like to speak. 
 
 BETTER LAWS FOR SEAMEN. 
 
 There is one thing which a gentleman who has already spoken asked 
 me to say. It is in regard to seamen. There area good many things 
 which, under the present law and the present usage, work to the dis- 
 advantage of the shipowner. If some of those conditions could be 
 remedied I think it would greatly improve our shipping, both in the 
 foreign and in the domestic trade. This morning I read in the paper — 
 perhaps some of you did also — where a crew on a vessel at Fernandina 
 were spirited out of their ship by some people who came aboard. The 
 crew were put on an island and kept there two days, and finally got 
 away from the people who took them in charge, who are said to be 
 union men. I do not know 'whether they were or not. The crew 
 came to Jacksonville and finally to New York. There they have sued 
 the owners of the vessel from which they were taken on the ground 
 that the captain did not protect them, and they ask for the wages up 
 to the time of their arrival at New York. That is one condition 
 which the press of to-day exhibits before us. 
 
 Much has been said about the abuse of seamen, and in some cases 
 abuses have taken place; they take place on land; they take place 
 everywhere; but 1 claim that not a larger percentage takes place on sea 
 than elsewhere; and in my experience of more than a quarter of a cen- 
 tury on the ocean 1 never saw a man abused on board a ship unless he 
 was the aggressor and really deserved the principal part of the abuse 
 he received. 
 
 I am ready to answer any questions which the members of the Com- 
 mission may desire to ask. 
 
 The Chairman. We are very much obliged to you. 
 
 STATEMENT OF WILLIAM ROTCH. 
 
 William Rotch appeared before the Commission. 
 
 The Chairman. Mr. Rotch, are you engaged in the shipping 
 business? 
 
 Mr. Rotch. I am not at present. 
 
 The Chairman. Indirectly or directly? 
 
 Mr. Rotch. My family has been interested in shipping more or less 
 for a hundred and fifty years. My ancestors lost a good many vessels 
 at the time of the Revolutionary war, and ever since then we have 
 been interested more or less in snipping. But for the last twenty or 
 thirty years we have been selling our vessels, because they do not pa}'. 
 
 So I come here not so much from my personal interest in shipping 
 to-day as from my general interest in tne question and because of the 
 benefit to the whole country which I believe would result from doing 
 something to re-create our merchant marine. 
 
 The Chairman. You belong to the old New Bedford family? 
 
 Mr. Rotch. Yes, sir; it was one of my ancestors who owned the tea 
 ship. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 577 
 
 PREFERS THE SUBSIDY METHOD. 
 
 I do not consider that 1 am very well posted to-day upon the ques- 
 tion at issue, but so far as 1 have been able to examine it I feel that 
 the proper solution is by the method of subsidies. I do not consider 
 that it is possible to build up our marine under present conditions by 
 admitting foreign-built ships upon any conditions. The real trouble 
 is in the great cost of running our ships, and we must do something to 
 make it possible for us to compete with foreign nations in the opera- 
 tion of our vessels. The method of subsidies nas seemed to me to be 
 the fairest and the best, and if there are no constitutional objections 1 
 think an attempt ought to be made to carry that method into eflfect. 
 
 I do not know that I have anything particular to say in conclusion, 
 except to express my preference for the method of subsidies. 
 
 STATEMENT OF WILLIAM F. HUMPHREY. 
 
 William F. Humphrey appeared before the Commission. 
 
 The Chairman. Are you engaged in the business of shipping? 
 
 Mr. Humphrey. Yes, sir; my whole life has been spent in the atmos- 
 phere of shipping. My father was a shipmaster. I had four brothers 
 older than I who were shipmasters. 1 began going to sea in 1856, 
 when the prosperity of our shipping was at its height. It was our 
 pride, and justly so; it commanded the admiration of the world. It 
 demanded the highest rates of freight and secured them. 
 
 But I am not going to take your valuable time in recalling the past; 
 to tell you how the American flag could once be seen floating from 
 the finest ships in the world in all quarters of the globe; how the 
 American shipmaster, conceited possibly by the pride of his position, 
 refused to associate with the foreign shipmaster, and delegated that 
 position to his first officer or mate, so called; how the glory of our 
 ships has departed and the tonnage diminished till, on trips that I have 
 made to Europe and to the West Indies and the Gulf of Mexico in late 
 years, I have found the American flag, floating upon ships, conspicu- 
 ously absent, and on a trip of some 15,000 miles across the Pacific to 
 Russia, Japan, China, and the Philippines during the last year I saw 
 but five merchant ships bearing the American flag, two of which were 
 built in England. 
 
 PROTECTION A FACTOR. 
 
 Neither do 1 propose to discuss or analyze the causes that have 
 brought about this deploi'able condition of our merchant marine, ex- 
 cept so far as to say, though I conceive the causes to be many, the 
 chief one, I think, is our protective policy. It was the declared inten- 
 tion of the promoters of that policy that it should raise the price of 
 labor and material. This it has done most effectually and the cost of 
 building a ship to-day in this country is from 40 to 50 per cent higher 
 than a ship of the same class and specifications would cost abroad. It 
 has been stated that we sell locomotives to, and build bridges in, for- 
 eign countries in direct competition with cheaper labor and cheaper 
 material. Why can we not build ships as cheaply ? is asked. Because 
 we are a railroading nation. We have more miles of railroad in the 
 
 3a— 04 37 
 
578 HEAEINGS BEFOEB THE MERCHANT MARINE COMMISSION 
 
 United States than there are in the whole of Europe. The amount of 
 money we have invested in railroads is something enormous. Ihe 
 building of railroads has been as important an industry in the United 
 States as the building of ships in England, only to an infinitely greater 
 degree and extent. The railroad as the pioneer in the settlement of 
 this country had to be built economically. The obstacles that had to 
 be overcome were tremendous, and the bridging of wide streams and 
 deep ravines was not the least of them. The roadbeds were rough 
 and uneven and the locomotive must be adapted to that condition. 
 The result is that we have got the most perfect locomotive for all sorts 
 and kinds of work in the world. 
 
 OUR TRIUMPH IN RAILROADING. 
 
 Millions of dollars have been spent in their construction, and the 
 locomotives in the United States probably represent in value to-day 
 two-thirds as much as all the tonnage of Great Britain. The money 
 that has been spent in building bridges in this country I would not 
 dare to estimate, but it must be an enormous sum. In the construc- 
 tion of these two, locomotives and bridges, we have become adepts. 
 Continued application to the production of one article makes the hand 
 cunning and the head inventive, and years of experience and experi- 
 ment reduce its construction to a science. These, to my mind, are 
 the reasons why we have the greatest and cheapest system of inland 
 transporation in the world, and can sell locomotives to, and build 
 bridges in, foreign countries. 
 
 There is one fact 1 wish to call to your especial attention in connec- 
 tion with this subject, and it is an important fact, because it seems to 
 me it bears directly on this question that you are now considering. It 
 is this: That a tremendous impetus was given to railroad building in 
 its infancy by making grants of immense tracts of land and the Gov- 
 ernment lending its credit to the extent that it almost, if not quite, 
 furnished the money to build some of our great trunk lines. 
 
 Conditions have made us a railroad-owning nation, as conditions 
 have made England a ship-owning nation. We have become expert in 
 the building of railroads and she has become expert in the building of 
 ships. Our skill, energy, and intelligence can teach her nothing in 
 that line, neither can the American mechanic do more in a day of that 
 work than can the English mechanic. England can build and sail ships 
 infinitely cheaper than we can. 
 
 What shall we do, then, to increase our tonnage, for it is very gen- 
 erally conceded we should do something? 
 
 AS A DEMOCRAT AND FREE TRADER. 
 
 I am a Democrat and a free trader. It takes some courage to make 
 that declaration here, especially before four-fifths Republicans on the 
 Commission and four-fifths of the audience probably the same. How- 
 ever, that is what I am, and while I do not believe in the principle, so 
 long as the present policy of protection obtains, I do not see any other 
 way except by government subvention. Indeed, when all other indus- 
 tries are subsidized it seems the shipowners' right. How shall it be 
 done? To encourage the establishment of regular lines to foreign 
 ports, a mail subsidy, I think, would be most efficacious. The pi-esent 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 579 
 
 law would be all right if it applied to vessels of lower speed, as low as 
 10 knots, and discriminated more as to the size. It implies that a ves- 
 sel of high speed must be large, which is economically true, and that 
 a vessel of low speed must be small; that is, a vessel of 10,000 tons 
 of 14-knot speed gets no more than a vessel of 2,000 tons. 
 
 This is all right from the standpoint.of giving compensation for 
 carrying the mails; but if it is intended to assist in building up our 
 tonnage and increasing our foreign trade, I think the size should be 
 taken more into account. While mail facilities greatly assist in build- 
 ing up trade, cargo facilities are also highly important. In the opening 
 of new channels of trade, 10-knot steamers would be quite as effective 
 as faster craft. 
 
 With limited passenger traffic which would prevail on a new line 
 and a probable high cost of coal in ports touched at, high-speed vessels 
 would be unprofitable, unless paid an extravagant man compensation. 
 On the whole I think a mail compensation should be fixed at so much 
 per ton, grading the rate by the speed of the vessel and her adaptability 
 for naval purposes in event of war. 
 
 PKEFEES A GENERAL SUBSIDY SYSTEM. 
 
 There are many shipowners, and others, who advocate discrim- 
 inating or preferential tariff. This does not appeal to me as being as 
 practical or effective as some other method. It seems to me it will 
 be difficult to pass such a law on account of the many obstacles that 
 will be met. All goods now on the free list must be subjected to duties 
 or they will be carried entirely in foreign bottoms. This will be 
 opposed by those who object to any increase in our present tariff. If 
 retaliatory measures are taken by foreign powers, a large proportion 
 of our exports would be carried away in foreign vessels. This would 
 certainly obtain so far as England, Germany, and Finance are concerned. 
 We should only bring our imports from those countries, while they 
 would carry away our exports, and the balance of tonnage would be 
 greatly in their favor. 
 
 Other reasons I could mention, but I will not offer them, for if this 
 is deemed the wisest course to pursue I have no doubt it will be bene- 
 ficial and I would not oppose it. 
 
 Neither would I oppose free ships, which a great many of our peo- 
 ple believe in. No harm can come of it, nor do I think any good, foi* 
 I do not see what advantage could accrue to the using of our flag on a 
 foreign vessel that would compensate for the extra 30 to 40 per cent 
 it would cost in sailing them under it, confined to the foreign trade, 
 as of course they would and should be. 
 
 For the building up of regular lines I think a mail subsidy, on the 
 lines I have mentioned, would be the best form of assistance. For 
 building up our shipping- generally to put us where we belong on the 
 seas as a first-class power, to build up the rank and file of our ship- 
 ping, the sailing vessel, the tramp steamer, the cargo carrier of all 
 kinds, the craft that supply the bone and sinew of trade, that will 
 furnish men to man our war vessels as well as ships to assist them, I 
 believe the Frye bill, which provided a mail subsidy for the encourage- 
 ment of one class of vessels and a general subsidy for the encourage- 
 ment of another class of vessels, is the wisest, most practical, efficient, 
 expedient, and equitable method. 
 
580 HEAKINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 THE QTJ-ESTION OF SPEED. 
 
 Representative Minor. Speaking of cargo carriers, you lay a good 
 deal of stress on the size, as I do myself, because the larger you can 
 build the cheaper you can operate. 
 
 Mr. Humphrey. Yes. 
 
 Representative Minor. Would you regard it as essential that a speed 
 provision should apply to those craft, or would you permit the owner 
 to have his ship constructed with a view to carrying the largest amount 
 of tonnage and running the most miles? The more miles he runs, the 
 more money he would earn, if it was based upon tonnage and miles 
 run. Leave the question of the speed to the man who pays for the 
 vessel and operates it. 
 
 Mr. Humphrey. No; I think there ought to be a graded rate for 
 the speed, because if you run at the rate of 20 knots speed, it costs 
 
 Representative Minor. I am speaking of cargo carriers, and they do 
 not run at 20 knot speed. 
 
 Mr. Humphrey. Take the present mail subsidy, and after you have 
 got down to 14 knots, come on down to 10 knots, but as you come down 
 have the payment made in' proportion to size — that is, the same rate 
 of payment; but if she is a vessel of 10,000 tons let her get five times 
 as much as one of 2,000 tons. 
 
 Representative Minor. Exactly; on the tonnage? 
 
 Mr. Humphrey. Yes. 
 
 Representative Minor. How would you test the speed? What 
 method would you adopt? You have to determine what speed 
 the vessel is capable of making before you can arrive at the amount she 
 shall receive. 
 
 Mr. Humphrey. 1 do not know of any better method than the pres- 
 ent one you have — that is a Government test. Of course we all 
 understand that war vessels and all vessels are not expected to make 
 in practice the speed they make on their trial trips, but that is in 
 proportion. If a vessel makes 20 knots on her trial trip, she will prob- 
 ably make 19. If a vessel makes 14, she will probably make 13 knots, 
 or something like that. 
 
 Representative Minor. In the Frye bill, so called, there was a pro- 
 vision governing the rules of determining the speed. 
 
 Mr. Humphrey. Yes. 
 " Representative Minor. A trial board was to be appointed, either of 
 revenue-cutter ofiicers under the Treasury Department, or of naval 
 officers under the Navy Department, or a joint board. Is it not true 
 that you can select your coal,, pick your firemen, put your ship in the 
 best possible order, and make from 1 to 2 knots more per hour on a 
 trial trip than she will ever make again in the world? 
 
 Mr. Humphrey. Yes; there is no doubt about it. 
 
 Representative Minor. Let me ask you another question to follow 
 that. Then if that be the case, should we have any speed clause in 
 there at all ? Because the Government during the life of the ship has to 
 pay upon the rate of speed registered by that vessel while making her 
 trial trip. 
 
 Mr. Humphrey. It is all relative. As I said, the 20-knot ship will 
 make 21 or 22 knots on her trial, perhaps. I refer to a vessel that 
 will ordinarily go 20 knots. A vessel that will go 14 knots on her 
 trial trip will probably drop down to 12i or 13 knots. It is in the 
 same percentage. 
 
HEARINGS BEFOEK THE MERCHANT MARINE COMMISSION. 581 
 
 Representative Minor. Then why should we pay on 10 knots or 20 
 knots ? 
 
 Mr. Humphrey. You do not. It all comes down to a relative price. 
 Perhaps I do not make myself clear. 
 
 Senator Mallort. It is as fair for one as the other. 
 
 THE ECONOMICAL CARGO-CARRIER. 
 
 Representative Minor. Would it not be wise, in case we should 
 conclude to do something for the merchant marine, which I hope we 
 may, to let the man build the cargo-carrying vessel at his own expense, 
 operate her at his own expense, and the more trips run and the more 
 tons of cargo carried, the more money she would earn, and leave it to 
 him as a business proposition ? 
 
 Mr. Humphrey. I do not think you see this, that you can not run 
 20 knots an hour half as cheaply as you can run 10 knots an hour. In 
 other words, you cut the time of the voyage in half, but it costs you 
 four times as much money. 
 
 Representative Minor. I am confining myself strictly to cargo car- 
 riers and not to the mail carriers. You can not carry a heavy cargo 
 of freight and make 20 knots an hour. The fast steamers do not do 
 - it. They carry light freight, express. They require a large amount 
 of fuel, 400 or 500 tons every twenty-four hours, while the cargo car- 
 rier will manage to get along on 35 or 40 tons. The steamer making 
 20 or 22 knots an hour requires several hundred firemen, whereas the 
 one that runs 10 knots can get along with 15 or 20 firemen. There is 
 a difference in the cost of operation. 
 
 What this Commission has to do is to impress upon the people of 
 the United States — and we must do it honestly — that we are not engaged 
 in building up one special industry. 
 
 Mr. Humphrey. I see. 
 
 Representative Minor. We must make an effort to cheapen freight 
 to the producer and the manufacturer in this country. We have to 
 keep those things in mind, or they will not support any such measure, 
 because it becomes class legislation. 
 
 Now, I would permit the cargo-carrying ship, I think, if I was fram- 
 ing a bill, to make any time she chose, at the cheapest possible rate of 
 speed. That rate is from 8 to 12 knots an hour. 
 
 Mr. Humphrey. Yes. 
 
 Representative Minor. If you can cheapen the cost of operation by 
 increasing the size of your vessel you are bound to cheapen the freight 
 on American commodities going abroad. 
 
 Mr. Humphrey. Yes, sir. 
 
 Representative Minor. We must put it on that broad ground. 
 
 Mr. Humphrey. Of course you want to encourage the building of 
 fast ships for scouts in case of war, and I was going to say, if you will 
 excuse me a moment, after you come down to 14 knots then we will 
 drop the speed part of it entirely. 
 
 Representative Minor. If a man is a steamship man and knows that 
 the more miles his steamer runs and the more tons he carries the 
 greater his compensation, necessarily he will have that in view, and 
 therefore he will build her to run just as fast as he can operate her 
 economically; and I would leave that question with him. 
 
582 HEARINGS BEFOKE THE MERCHANT MARINE COMMISSION. 
 IMPORTANCE Or STAND ABDIZING. 
 
 The Chairman. I was interested in your suggestion that we were 
 building locomotives and bridges in competition with the world, not 
 only supplying our own markets, but sending them abroad, while we 
 could not apparently build ships. Is not that largely due to the fact 
 that we build the same type of bridges and the same type of locomo- 
 tives and that we have standardized those things? 
 
 Mr. Humphrey. Yes. It is in the line of standardization. 
 
 The Chairman. This Commission visited one of the leading shipyards 
 of the country, and we-found that they were constructing a war ship, 
 a dredge, another ship, I think intended for war purposes, two of a 
 smaller type, and a coaster. If they had had four ships of the same 
 type in the yard, they could have reduced the cost very materially ? 
 
 Mr. Humphrey. Very materially. 
 
 The Chairman. So, while we have no hopes, perhaps, of entirely 
 overcoming the difference, yet if we could build up the merchant 
 marine so as to call for the construction of a large number of ships 
 of practically the same type we would overcome to a very considerable " 
 extent that difference in cost. 
 
 Mr. Humphrey. Of course. There is scarcely a shipyard in Eng- 
 land to which you can not give any specifications you like, and they 
 probably can take the patterns right down off the shelves. They have 
 them there. 
 
 DOUBTFUL OF DISCRIMINATING DUTIES. 
 
 Senator Mallory. Have you given any thought to the proposition, 
 in connection with discriminating duties, of imposing tonnage dues 
 on foreign ships coming to ports in this country? 
 
 Mr. Humphrey. That is in the same line, Senator Mallory, that I 
 spoke of — retaliation. We would probably get it on the other hand 
 over there. 
 
 Senator Mallory. I take it for granted we will get retaliation if 
 we do anything that is in the way of an advantage to American 
 shipping. 
 
 Mr. Humphrey. I do not think there is any better and cleaner way 
 than a square subsidy. If you do not like the word, call it "subven- 
 tion," if you please. "Subvention" is a better word, because it 
 means assistance. That is squarely what I mean. 
 
 Senator Maluory. You have not given the matter of tonnage duties 
 any thought? 
 
 Mr. Humphrey. No; I have not. I do not think it is a good plan. 
 
 Senator Mallory. We used to impose tonnage duties on foreign 
 ships. 
 
 Mr. Humphrey. I think we are obliged now to let them all in on 
 the same basis. 
 
 Senator Lodge. It is against the treaties. 
 
 Senator Mallory. I know it is against the treaties. 
 
 Mr. Humphrey. I should not like to see any discrimination, for I 
 ani sure we would be discriminated against. It would be as broad as 
 it is long. 
 
 Senator Lodge. Would it be as broad as it is long? When we had 
 the discriminating tonnage tax and disci'iminating duties the volume of 
 imports exceeded the volume of exports as a rule. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 583 
 
 Mr. Humphrey. Yes. 
 
 Senator Lodge. We were an importing country. 
 
 Mr. HuMPHRET. An importing country. 
 
 Senator Lodge. And at best it was pretty nearly balanced. Now 
 our exports exceed our imports enormously. 
 
 Mr. Humphrey. Very much. As I said, they would have the bal- 
 ance of trade. 
 
 Senator Lodge. Would not that render the opportunity of foreign 
 retaliation very much greater than it was in the earlier days ? 
 
 Mr. Humphrey. It seems to me so. 
 
 Senator Mallory. My reason for asking the question is this: The 
 volume of exports exceeds the volume of imports. By discriminating 
 duties you can control your imports brought in by American built and 
 owned ships, but unless you have some tonnage dues or something to 
 be imposed on the foreign ships you are not going to touch your 
 exports at all. The foreigners will step in and take all the business 
 away from you. What you want, if you are going to have American 
 commerce, is for the American ship to have cargo both ways — both 
 coming to this country and going away. It does not suffice to give 
 cargo one way only. That is the reason why I asked you if, in connec- 
 tion with this subject, you had given that matter any thought. It has 
 been suggested. 
 
 Mr. Humphrey. I know. 
 
 Senator Mallory. And it has been presented by some gentlemen 
 quite forcibly. 
 
 Mr. Humphrey. 1 do not like the idea of it. 
 
 STATEMENT OF WILLIAM B. BIRD. 
 
 William B. Bird appeared before the Commission. 
 
 The Chairman. In what line of business are you engaged, Mr. Bird? 
 
 Mr. Bird. I am a merchant and manufacturer. 
 
 The Chairman. The Commission will be pleased to hear from you, 
 Mr. Bird. 
 
 Mr. Bird. Mr. Chairman and gentlemen, I am here before your 
 committee, not as a shipowner, nor connected in any way with ship- 
 building, but simply as a merchant. 
 
 My firm, under the same name, has been doing business for the past 
 sixty-six years and during that time have been importers of merchan- 
 dise. Some years ago we commenced also to manufacture, and from 
 that time we have been exporters as well, and are continually seeking 
 to increase our export business. 
 
 TRADE follows THE FLAG. 
 
 I am very glad that finally Congress is investigating the question of 
 how best to resuscitate our American merchant marine, as my experi- 
 ence in connection with attempting to build up an export business has 
 led me to most thoroughly believe in the statement that commerce 
 follows the flag. No amount of effort through the mails or through 
 salesmen is so efficient as ships carrying the American flag sailing 
 regularly to and from foreign ports. 
 
 It has often been said that nothing can be done to resuscitate Amer- 
 ican shipping, owing to the indifference to the importance of this 
 
584 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 matter on the part of the West and South, but the great growth of 
 the manufacturing interest in those sections makes it as important to 
 them as it is for the East that this should be brought about. Also I 
 belie\'e that the agricultural portion of the community in those sec- 
 tions, if the facts could ])e clearly laid before them, would also be 
 aroused to the importance of this matter and be as actively in fa^-or of 
 it lis the manufacturing and mercantile interests. 
 
 I can not but feel that while this country has reached a high pinna- 
 cle of business prosperity, yet there is a great element of underlying 
 weakness in the fact that fully nine-tenths of the merchandise imported 
 or exported is to-day carried in the ships of foreign nations. 
 
 No country in the world has such an area of sea coast as the United 
 States, and the whole history of the earlier days of this country shows 
 conclusively to the student that the steady rise in prosperity of the 
 people arose very largely from the utilization of this great coast line 
 for the purposes of commerce. 
 
 In the past Great Britain has been the wisest and broadest minded 
 nation in connection with availing of the opportunities of commerce 
 through building up her shipping. To-day Germany, wisely taking a 
 leaf out of Great Britain's book, is bending her energies to secure the 
 advantages of this great export trade, and is leaving nothing undone 
 to promote the success and prosperity of her merchant marine, which 
 she fully realizes is the prominent factor to bring about this ultimate 
 success. 
 
 The United States has achieved marvels in connection with its inter- 
 nal development, but so largely have we been taken up in the past 
 thirty years with this development that the great majority of us have 
 overlooked and neglected the fact, that our development was becoming 
 rapidly one sided. 
 
 A WITHEEED RIGHT ARM. 
 
 The impregnable strength of any country, financially or otherwise, 
 lies in an absolutely all-round development, and the United States 
 to-day might be likened to a man of enormous physique and power in 
 all his parts with the exception of his right arm, which had gradually 
 shriveled and fallen away. 
 
 I have no schemes to offer to your committee as to how the present 
 lamentable state of affairs shall be remedied, as I feel that there are 
 others better qualified to advise as to methods. 
 
 1 have never been an advocate of free trade, equallj'^ 1 have never 
 believed in an excessive tariff, but 1 have seen and realized the enor- 
 mous upbuilding of our industries all over the United States through 
 the protection given by a tariff. 
 
 Now, why should all other industries be given this protection with 
 the exception of one, and that perhaps the most important of all? 
 Why should this be neglected and thrust one side when all others are 
 considered? Many men are frightened and shy at the word "sub- 
 sidy," and yet they are the strongest advocates of an extremely high 
 tariff for the protection of certain industries. Why is it not better 
 that a protection shall be given and that the fixed expense of this shall 
 be known, rather than the protection given and the burden of expense 
 put upon the people of this country m an indirect way through the 
 imposition of a tariff? Every man who investigates or has inves- 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 585 
 
 tigated thoroughly the question of our shipping interests must see that 
 something should be done by our Government to restore our merchant 
 marine to its former high position. 
 
 OPPOSED TO FREE SHIPS. 
 
 I should most decidedly oppose any effort to bring about a change 
 through the free purchase of foreign ships, as I believe that this posi- 
 tion would be absolutely inconsistent with the whole course of the 
 legislation of the past forty years; and in closing, gentlemen, I would 
 say that I am very glad that this matter has been placed in the hands 
 of so able a committee to report on the question, and I believe that the 
 wisdom of its members will lead them to be able to frame a bill to 
 bring before Congress which will lead to the solution of the difBculties 
 which have existed in the past and which reduced our position in 1860 
 from the second nation in the world in its foreign tonnage to practi- 
 cally the lowest among any of the prominent nations at the present 
 time. 
 
 STATEMENT OF HENRY LORD. 
 
 The Chairman. Is Hon. Henry Lord, of Bangor, Me., in the room? 
 
 Henry Lord appeared before the Commission. 
 
 The Chairman. Mr. Lord, will you state to the Commission in what 
 business you are engaged? 
 
 Mr. Lord. I am a vessel owner and have been for some years; more 
 than thirty. 
 
 The Chairman. You are familiar, I suppose, with the scopb of this 
 inquiry ? 
 
 Mr. Lord. I think so. 
 
 The Chairman. The Commission will be pleased to hear from you 
 any views you have to express on the subject. 
 
 Mr. Lord. My expression of views will be very brief. 
 
 1 wish to say that, as you all know, I live in a State which leads in 
 the wooden ship building business, as it has done for more than fifty 
 years. It perhaps has to-day, or it did have ten years ago, a larger 
 percentage of its population engaged in seafaring life than any other 
 State in this Union. But a few years ago all along our coast, in every 
 little town, there were vessels owned, and the Maine boys were going 
 to sea, looking forward to the time when they should themselves own 
 vessels. Twenty-five or thirty years ago a great many clipper ships 
 were built in Maine. Clipper ships went out, and the schooner came 
 in — the three or four or five or six masted schooner. Our people down 
 there are a vessel-building and vessel-owning class to-day. 
 
 Maine's great interest. 
 
 Twenty-five years ago there was a fleet of little vessels that ran to 
 the "West Indies. We had a large trade with the West Indian Islands. 
 We sold them pine boxes and pine shocks and the vessels came back 
 with West India cargoes. That business has all gone, and to-day 
 Maine is building wooden vessels mostly of the schooner type for the 
 coastwise trade, because the foreign trade does not pay. There are 
 some exceptions. Take the Sowalls at Bath. They have nothing but 
 
586 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 deep-sea craft. They have as you know built iron ships, full-rigged 
 ships, in the last few years, and at Bangor there was a 5-masted 
 schooner going up. 
 
 The Chairman. The Sewalls are not building any ships now for the 
 deep-sea trade. 
 
 Mr. Lord. They have built them within two years. I think one of 
 the last ships they launched was the William P. Frye, a 4-masted steel 
 ship. 
 
 The Chairman. I think one of the firm testified in New York that 
 they were not building any now. 
 
 Mr. Lord. The time has come when something must be done to 
 encourage the building of ships and the sailing of them in the foreign 
 trade or we shall be out of the business entirely. A certain class of 
 vessels, because of the manner in which they are sailed, are living 
 along in the foreign trade, as we carry it on .with the West Indies and 
 South America. For instance, I have had a couple of small vessels 
 run from this end of the State to Cuba and the West Indies, with hard 
 pine, in competition with English vessels. Those vessels are sailed by 
 the captains on shares, and they generally have a home cook, a home 
 mate, and a home crew, and they keep down expenses, and in that way 
 are able to compete with foreign vessels in the same trade. 
 
 There is a difference of opinion in our State as to what should be 
 done. Some are in favor of subsidies; some are in favor of discrimi- 
 nating duties. But the object is to do something to aid the American 
 shipowner to enable him to compete with vessels under foreign flags. 
 
 It is hardly necessary for me to express here the sentiment of the 
 State of JMaine. I think it is well known. It has been niiade well 
 known in both branches of Congress by such men as Frye and Ding- 
 ley, and forty or fifty years ago by such men as Perkins, of California, 
 and Boutelle, our Congressman who died a short time ago. There 
 were among them men who began their life upon the sea, and went 
 from the forecastle to the cabin. 
 
 REMEMBER THE SMALL VESSEL. 
 
 Gentlemen, when you come to consider this question I want to sug- 
 gest to you that you consider the question of help to the small wooden 
 vessel. The day of that vessel has not entirely gone by, especially if 
 you wish to encourage young American boys to go to sea. In a ves- 
 sel of that class the captain usuallj' sails her as a partner with the 
 owners; sails, if you please, on what are called square halves. 
 
 He takes one-half of the gross earnings of the vessel and mans and 
 victuals her and pays one-half of the port charges, and in that way he 
 makes money. Under that system he is able to economize in every 
 possible way and make his vessel pay. There you get American boys. 
 They go into those vessels with some captain who has a home crew and 
 they expect to rise and in a short time get command of a vessel. They 
 are good sailors. It was boys of that class who sailed the yachts that 
 won the races up to within two years in New York. That class of boys 
 yoa will find scattered all over the world. They are enterprising and 
 energetic, and they began their life going to sea in small sailing vessels 
 built in the State of Maine, and then they gradually got into the larger 
 vessel and into the steamer. They are American born, and they have 
 the American spirit, and they like to see the American flag at the 
 masthead. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 587 
 
 Every other industry is helped in sonae "waj^ and that being the 
 policy of the country it would seem that the wisdom of the legislators 
 of this country ought to be able to agree upon some system which will 
 help American commerce. 
 
 STATEMENT OJ J. C. ENTWISLE. 
 
 The Chairman. Is there any representative of the seamen present 
 to-day?' This Commission is charged with the duty of inquiring into 
 the condition of the American seaman with a view to bettering his 
 condition, if it is shown that it is necessary. 
 
 J. C. Entwisle appeared before the Commission. 
 
 The Chairman. What is your business? 
 
 Mr. Entwisle. I come from Salem, and 1 represent the Boston 
 Marine Society. We are a society of shipmasters. 1 suppose we 
 might come under the head of seamen. I do not know whether you 
 want to hear from us. 
 
 The Chairman. We shall be very glad to hear from you. 
 
 Mr. Entwisle. I represent the vice-president of the Boston Marine 
 Society, which is composed of nearly four hundred shipmasters, a few 
 active shipmasters, but most of them retired. Of course they are 
 more or less interested in shipping. A number of those who retired 
 retired not of their own will at all, but simply because they were 
 forced out of an occupation in which they had spent a large number 
 of the years of their lives. 
 
 In my own case, at 38 years of age, after spending twenty-three 
 years at sea, I was forced to abandon my profession because there 
 were no ships to command, and 1 was obliged to seek other employ- 
 ment. It was rather hard for a man who had spent so many years at 
 sea to commence a new business, and the employment I was obliged to 
 enter into, and which seemed the most fitting 1 could find, was news- 
 paper work and politics. The first was rather hard of acquirement, 
 but the second came very easy. [Laughter.] 
 
 Of the matter of subsidies and the matter of shipbuilding, of course 
 the shipmaster knows very little. My own opinion in regard to a 
 subsidy is that it is an unpatriotic method of putting a premium on 
 patriotism. We should like to have American ships, built in American 
 shipyards, commanded by American shipmasters, officered by Ameri- 
 cans, and in the future, if the shipping should increase, manned by 
 American seamen, which is simply impossible to-day. 
 
 AMERICAN MASTERS DISAPPEARING. 
 
 My own experience is that the American shipmaster is a thing of the 
 past. We frequently find an American shipmaster speaking the English 
 language with a foreign accent. We are not proud of that class of 
 men. While they are worthy and estimable men without doubt, at 
 the same time we feel that a man who commands an American ship 
 should be able to speak the English language. The officers we have to 
 put up with to-day are naturalized American citizens of all classes — 
 Nova Scotians, Germans, Norwegians, Swedes. Of course they are 
 respectable persons, but we feel that we would like to have Americans 
 in command of American ships and looking after American interests. 
 
 The question of the maintenance of ships is the one perhaps which 
 is most important in this matter. In my own case I took several voy- 
 ages in which I estimated the expense of victualling the ship. It never 
 
588 HBARTNGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 exceeded 30 cents per man per day, and on one voyage of twenty 
 months, from Boston to Australia and Japan and China and the East 
 Indies and home, it cost 22i cents per man to victual the ship. 
 
 I do not think the shipowners ever pay the shipmasters anything 
 near the compensation they are worth. It is a responsible position. 
 1 do not think the wages of the seaman to-day are anything in excess 
 of what he ought to receive. It is a hard existence for men to under- 
 take, and they ought to be well compensated for it. 
 
 Of course the Boston Marine Society is composed of shipmasters, 
 and we are willing to have anything done perhaps that will increase 
 the American merchant shipping. I speak principally of the merchant 
 ships. The largest ship-owning firm in Boston, which at one time 
 owned 36 sailing vessels going to all ports of the world, buying their 
 own cargoes and bringing them to Boston, entered into the railroad 
 business, as has been stated by Captain Humphrey, because they 
 found more reimbursement than they did in ships, and finally the ships 
 dwindled away. They sold every one of them or lost them all. It is 
 more profitable to invest capital in other schemes than in sailing ves- 
 sels. When sailing vessels were paying, the capital was produced, 
 and men were willing to put it in ships where they got a large per- 
 centage on their investment. 
 
 The Chairman. Have you given any special thought to the remedy 
 for the existing condition of things ? 
 
 Mr. Entwisle. I do not know that I have, except that if the sub- 
 sidy is the thing that will remedy this situation, if capitalists will put 
 their money into vessels if they are subsidized, then I think that is the 
 best remed^r for it. What we want principally are the vessels. I am 
 sure there are shipmasters out of employment- — hundreds of them — . 
 who would be willing to take vessels if vessels were only at hand. 
 Lots of them would renew their youth and perhaps eradicate the evi- 
 dences of age to secure the command of any vessel that would be built. 
 
 If I may be allowed to make a suggestion, the secretary of the Bos- 
 ton Marine Society is a practical shipmaster also, and I should like to 
 have him called upon before the hearing closes. 
 
 The Chairman. Captain Manson ? 
 
 Mr. Entwisle. Yes, sir. 
 
 The Chairman. He will be heard. 1 will first call on Mi-. William H. 
 Frazier. 
 
 STATEMENT OF WILLIAM H. FRAZIER. 
 
 William H. Frazier appeared before the Commission. 
 
 The Chairman. What is your present business? 
 
 Mr. Frazier. I am general secretary of the International Seamen's 
 Union of America. 
 
 The Chairman. Have you ever been a practical seaman ? 
 
 Mr. Frazier. Yes, sir; all my life. 
 
 The Chairman. How long since you sailed? 
 
 Mr. Frazier. About four 3'ears ago. Since, I have been ashore. 
 
 The Chairman. Were you in the service of the United States. 
 
 Mr. Frazier. Yes, sir. 
 
 The Chairman. Have you sailed on vessels of any other nationality ? 
 
 Mr. Frazier. Yes, sir; I had to go in an English ship to learn to 
 be a seaman. 
 
 The Chairman. Did you start on an English ship? 
 
HEARINGS BEFORE THE MEEOHANT MARINE COMMISSION. 589 
 
 Mr. Fraziek. Yes, sir; 1 had to. 
 
 The Chairman. Are you an American citizen ? 
 
 Mr. Fraziek. Yes, sir; American born. 
 
 The Chairman. American born ? 
 
 Mr. Frazier. Yes, sir. 
 
 The Chairman. Now you are representing the Seamen's Union ? 
 
 Mr. Frazier. Yes, sir. 
 
 The Chairman. As general secretary ? 
 
 Mr. Frazier. Yes, sir. 
 
 Senator Mallory. The International Union ? 
 
 Mr. Frazier. The International Union. 
 
 The Chairman. We shall be pleased to hear from you. 
 
 speaking for 25,000 sailors. 
 
 Mr. Frazier. Mr. Chairman and gentlemen, in appearing before 
 you I am representing the International Seamen's Union of America, 
 an organization of over 25,000 seamen; that is, sailors, marine firemen, 
 cooks, stewards, etc., and the part that I will take in ijiis discussion 
 will be upon the question, Why the American boy does not go to sea. 
 
 Mr. Chairman, there are several reasons why the American boy does 
 not go to sea; but the first and most important reason is because the 
 American shipowner will not take him unless it be his son or other rela- 
 tive. There is no system of apprentices, and when the American ship- 
 owner wants a crew £ie does not want any more men than are actually 
 necessary to manipulate the vessel. Therefore, for the safety of the ves- 
 sel, he wants all competent seamen. American boys have often applied 
 to me for an opportunity to go to sea, but I am unable to get them posi- 
 tions on American vessels, excepting those ships that have a mail con- 
 tract and are compelled by law to carry so many cadets. Masters of 
 American coastwise vessels — sail vessels I mean — have often told me 
 that they would be willing to carry boys, but were not permitted to 
 do so by their owners. They say they eat too much. I make this 
 statement so as to give you the actual situation. While the American 
 boy has little or no opportunity of going to sea, those who are fortu- 
 nate enough to secure the opportunity in some foreign vessel or one 
 of the mail lines seldom or never continue at sea as a profession. So 
 1 will next deal with that part of the subject as briefly as is possible. 
 
 There was introduced during the last Congress a bill by Mr. Liver- 
 nash, of California. This bill (H.- R. 13771) was drafted by the Inter- 
 national Seamen's Union of America, an organization, as I stated 
 before, composed of the maritime trades — sailors, firemen, cooks, fish- 
 ermen, etc., of the Pacific coast. Great Lakes, Atlantic and Gulf coasts. 
 With a few exceptions the bill is merely amendatory of certain pro- 
 visions of the existing law, which changes experience has shown to be 
 necessary to effect the purposes in view when the law was passed. 
 
 I submit for incorporation in my remarks a copy of the bill, and in 
 order to save time in pointing out the changes, I have italicized them 
 in the bill. 
 
 The bill referred to is as follows: 
 
 [H. R. 13771. Fifty-eighth Congress, second session.] 
 
 A BILL To amend the laws relating to American seamen, to prevent underman- 
 ning and unskilled manning of American vessels, and to encourage the training of 
 boys in the merchant marine. 
 
590 HEARINGS BEFOKE THE MERCHANT MARINE COMMISSION. 
 
 Be it enacted hy the Senate and House of Representatives of the United 
 States of America in Congress asseniMed^ That section forty-five hun- 
 dred and sixteen of the Revised Statutes of the United States be, and 
 is hereby, amended to read as follows: 
 
 "Sec. 4516. In case of desertion or casualty, resulting in the loss of 
 one or more seamen, the master must ship, if obtainable, a number 
 equal to the number of those whose services he has been deprived of 
 by desertion or casualty, who must be of the same grade or rating and 
 equally expert with those whose place or position they refill. And in 
 all merchant vessels of the United States the sailors shall, while at sea, 
 he divided into tvM watches, which shall he kept on deck alternately fo-r 
 the penformance of ordinary work incident to the sailing and ma/nage- 
 1)1 ent of the vessel; hut this provision shall not limit either the authority 
 of the master or other officer or the obedience of the sailors when, in the 
 judgment of the master or other office>\ the whole crew is needed for the 
 maneimering of the vessel or the performance of the vjork necessary for 
 the safety of the vessel or her cargo. While the vessel is in a safe har- 
 hor no seaman shall he required to do any unnecessary work on Sundays 
 or legal holidays: and at all othet^ times while the vessel is in a safe har- 
 hor nine hours, tnclusive of anchor watch, shall constitute a day's work. 
 'Whenever the master of any vessel shall fail to comply with this section, 
 the seamen shall he entitled to discharge from such vessel, and shall, upon 
 demand, receive wages then earned. But this section shall not apply to 
 -fishing or %ohaling vessels or to yachts." 
 
 Sec. 2. That section forty-five hundred and twenty-nine of the 
 Revised Statutes of the United States be, and is hereby, amended to 
 read as follows: 
 
 "Sec. 4.539. The master or owner of any vessel making coasting 
 voyages shall pay to every seaman his wages within two days after the 
 termination of the agreement under which he shipped, or at the time 
 such seaman is discharged, whichever first happens; and in the case of 
 vessels making foreign voyages, or from a port on the Atlantic to a 
 port on the Pacific, or vice versa, within twenty-four hours after the 
 cargo has been discharged, or within four days after the seaman has 
 been discharged, whichever first happens; and in all cases the seaman 
 shall be entifled to be paid, at the time of his discharge, on account of 
 wages, a sum equal to one-third part of the balance due him. Every 
 master or owner who refuses or neglects to make payment in manner 
 hereinbefore mentioned without sufiicient excuse shall pay to the sea- 
 man a sum equal to tmo days' pay for each and every day during 
 which payment is delayed beyond the respective periods, which sum 
 shall be recoverable as wages in any claim made before the court; but 
 this section shall not apply to the masters or owners of any vessel the 
 seaman of which are entitled to share in the profits of tlie cruise or 
 voyage." 
 
 Sec. 3. That section forty-five hundred and thirty of the Revised 
 Statutes of the United States be, and is hereby, amended to read as 
 follows: 
 
 " Sec. 4530. Every seaman on a vessel of the United States shall be 
 entitled to receive (within forty-eight hours after demand therefor) 
 from the master of the vessel to which he belongs one-half part of the 
 wages which shall be due him, at every port where such vessel, after 
 the voyage has commenced, shall load or deliver cargo before the voy- 
 age is ended; and all stipulations to the contrary shall he held as void. 
 And when the voyage is ended every such seaman shall be entitled to 
 
HEARINGS BEKORE THE MERCHANT MARINE COMMISSION. 591 
 
 the remainder of the wages which shall then be due him, as provided 
 in section forty -five hundred and twenty-nine of the Revised Statutes." 
 
 Sec. 4. That section forty -five hundred and fifty-nine of the Revised 
 Statutes of the United States be, and is hereby amended to read as 
 follows: 
 
 " Sec. 4559. Upon a complaint in writing, signed by the first and 
 second officers, or a majority of the crew of any vessel, while in a 
 foreign port, that such vessel is in an unsuitable condition to go to sea 
 because she is leaky or insufficiencly supplied with sails, rigging, 
 anchors, or any other equipment, or that the crew is insufficient to 
 man her, or that her provisions, stores, and supplies are not, or' have 
 not been during the voyage, sufficient and wholesome, thereupon, in 
 any of these or like cases, the consul, or a commercial agent who maj' 
 discharge any of the duties of a consul, shall cause to be appointed 
 three persons of like qualifications with those described in section 
 forty-five hundred and fifty-seven, who shall proceed to examine into 
 the causes of complaint and who shall proceed and be governed in all 
 their proceedings as provided by said section." 
 
 Sec. 5. That section two of the Act entitled "An Act to amend the 
 laws relating to navigation," approved March third, eighteen hundred 
 and ninety-seven, be, and is hereby, amended to read as follows: 
 
 "Sec. 2. Timt on and after June thirtieth, nineteen hundred and 
 five, every place aj>propriated to the crew of any merchant vessel of the 
 United States, except a yacht, a pilot hoat, or any vessel of less than one 
 hundred tons register, shall have a crew space of not less than one hun- 
 dred cubic feet, and not less than sixteen square feet, measured on the 
 deck or floor of that place, for each seavian or apprentice lodged therein. 
 Such place of lodging shall he securely constructed, properly lighted, 
 heated and ventilated, properly protected from, weather and sea, and, as 
 far as practicable, properly shut off and protected from the effluvium of 
 cargo or bilge water. And every such crew space shall be hept free from 
 goods or stores not being the personal property of the wew occupying 
 said place in use during the voyage. 
 
 "Every steamboat of the United States plying upon the Mississippi 
 River or its tributaries shall furnish an appropriate place for the crew, 
 which shall conform to the requirements of this section, so far as they 
 shall be applicable thereto, by providing sleeping room in the engine 
 room of such steamboat, properly protected from the cold, winds, and 
 rain, by means of suitable awnings or screens on either side of the 
 guards or sides and forward, reaching from the boiler deck to the 
 lower or main deck, under the direction and approval of the Super- 
 vising Inspector-General of Steam Vessels, and shall be properly 
 heated. 
 
 "Any failure to comply with this section shall subject the owner or 
 owners to a penalty of five hundred dollars." 
 
 Sec. 6. That section forty-five hundred and ninety -six of the Revised 
 Statutes of the United States be, and is hereby, amended to read as 
 follows: 
 
 "Sec. 4696. Whenever any seaman who has been lawfully engaged, 
 or any apprentice to the sea service, commits any of the following 
 oflFenses, he shall be punishable as follows: 
 
 "First. For desertion, by forfeiture of all or any part of the clothes 
 or ejlects he leaves on board and of all or any part of the wages or 
 emoluments which he has then earned. 
 
692 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 ' ' Second. For neglecting or refusing, without reasonable cause, to 
 join his vessel or to proceed to sea in his vessel, or for absence with- 
 out leave at any time within twenty-four hours of the vessel's sailing 
 from any port, either at the commencement or during the progress of 
 any voyage, or for absence at any time without leave and without suf- 
 ficient reason from his vessel or from his duty, not amounting to 
 desertion or not treated as such by the master, by a forfeiture from 
 his wages of not more than two days' pay, or sufficient to deiray any 
 expenses which have been properly incurred in hiring a substitute. 
 
 "Third. For quitting the vessel, in whatever trade engaged, with- 
 out leave, after her arrival at her port of delivery and before she is 
 placed in security, by forfeiture from his wages of not more than one 
 month's pay. 
 
 "Fourth. For willful disobedience to any lawful command at sea by 
 being, at the option of the master, placed in irons until such disobedi- 
 ence shall cease, and upon arrival in port by forfeiture from his wages 
 of not more than four days' pay, or, at the discretion of the court, by 
 imprisonment for not more than one month. 
 
 ' Fifth. For continued willful disobedience to lawful commands or 
 continued willful neglect of duty at sea, by being, at the option of the 
 master, placed in irons, on bread and water, with full rations e\ery 
 fifth day, until such disobedience shall cease, and upon arrival in port, 
 by forfeiture, for every twenty-four hours' continuance of such dis- 
 obedience or neglect, of a sum not more than twelve days' pay or by 
 imprisonment for not more than three months, at the discretion of the 
 court. 
 
 "Sixth. For assaulting any master or mate, in whatever trade 
 engaged, by imprisonment for not more than two j^ears. 
 
 Seventh. For willfully damaging the vessel, or embezzling or will- 
 fully damaging any of the stores or cargo, in whatever trade engaged, 
 by forfeiture out of his wages of a sum equal in amount to the loss 
 thereby sustained, and also, at the discretion of the court, by impris- 
 onment for not more than twelve months. 
 
 "Eighth. For any act of smuggling for which he is convicted, and 
 whereby loss or damaged is occasioned to the master or owner, he 
 shall be liable to pay such master or owner such a sum as is sufficient 
 to reimburse the master or owner for such loss or damage, and the 
 whole or any part of his wages may be retained in satisfaction or on 
 account of such liability, and he shall be liable to imprisonment for a 
 period of not more than twelve months." 
 
 Sec. 7. That section forty-six hundred of the Revised Statutes of 
 the United States be, and is hereby, amended as follows: 
 
 " Sec. 4600. It shall be the duty of all consular officers to discoun- 
 tenance insubordination by every means in their power, and where 
 the local authorities can be usefully employed for that purpose, to 
 lend their aid and use their exertions to that end in the most effectual 
 manner. In all cases where seamen or officers are accused the consu- 
 lar officer shall inquire into the facts and proceed as provided in sec- 
 tion forty-five hundred and eighty-three of the Revised Statutes; and 
 the officer discharging such seaman shall enter upon the crew list and 
 shipping articles and official log the cause of discharge and the par- 
 ticulars in which the cruel or unusual treatment consisted, and sub- 
 scribe his name thereto officially. He shall read the entry made in 
 
HEARINGS BEFORE THE MEECHANT MARINE COMMISSION. 593 
 
 the official log to the master, and his reply thereto, if any, shall like- 
 wise be entered and subscribed in the same manner." 
 
 Sec. 8. That section forty-six hundred and eleven of the Revised 
 Statutes of the United States be, and is hereby, amended to read as 
 follows: 
 
 "Sec. 4611. Flogging and all other forms of corporal punishment 
 are hereby prohibited on board any vessel, and no form of corporal 
 punishment on board any vessel shall be deemed justifiable, and any 
 master or other officer thereof who shall violate the aforesaid provi- 
 sions of this section, or either thereof, shall be deemed guilty of a 
 misdemeanor, punishable by imprisonment not less than three months 
 nor more than two years. Whenever any officer other than the master 
 of such vessel shall violate any provision of this section it shall be the 
 duty of such master to surrender such officer to the proper authorities 
 as soon as practicable. Any failure on the part of such master to 
 comply herewith, which failure shall result in the escape of such offi- 
 cer, shall render the master or vessel liable in damages for such pun- 
 ishment to the person illegally punished by such officer." 
 
 Sec. 9. That section twenty -three of the Act entitled "An Act to 
 amend the laws relating to American seamen, for the protection of 
 such seamen, and to promote commerce," approved December twenty- 
 first, eighteen hundred and ninety-eight, be, and is hereby, amended 
 as respects the items water and butter, so that in lieu of a daily require- 
 ment of four quarts of water there shall be a requirement oi Jive quarts 
 of water every day, and that in lieu of a daily requirement of one 
 ounce of butter there shall be a requirement of t/wo ounces of butter 
 every day. 
 
 Sec. 10. That section twenty-four of the Act entitled "An Act to 
 amend the laws relating to American seamen, for the protection of 
 such seamen, and to promote commerce," approved December twenty- 
 first, eighteen hundred and ninety-eight, be, and is hereby, amended 
 to read as follows: 
 
 "Sec. 24. That section ten of chapter one hundred and twenty-one 
 of the laws of eighteen hundred and eighty-four, as amended by sec- 
 tion three of chapter four hundred and twenty-one of the laws of 
 eighteen hundred and eighty-six, be, and is hereby, amended to read 
 as follows: 
 
 " ' Sec. 10. (a) That it shall be, and is hereby, made unlawful in any 
 case to pay any seaman wages in advance of the time when he has 
 actually earned the same, or to pay such advance wages, or to issioe 
 any notefm' the payment of the same, to any other person, or to pay any 
 person other than an officer authorised hy an Act of Congress to collect 
 fees for such service, any remuneration for the shipment of seamen. 
 Any person paying such advance wages w such remuneration, or issuing 
 any note for the payment of same, shall be deemed guilty of a misde- 
 meanor, and upon conviction shall be punished by a fine of not less 
 than four times the amount of wages so advanced, or remuneration so 
 paid, or of the note so issued, and may also be imprisoned for a period 
 not exceding six months, at the discretion of the court. The payment 
 of such advance wages shall in no case, excepting as herein provided, 
 absolve the vessel, or the master or owner thereof, from full payment 
 of wages after the same shall have been actually earned, and shall be 
 no defense to a libel, suit, or action for the recovery of such wages, 
 
 3a— 04 38 
 
594 HEARINGS BEFOKE THE MERCHANT -MARINE COMMISSION. 
 
 If any person shall demand or receive, either directly or indirectly, 
 from any seaman or other person seeking employment as a seaman, or 
 from any person on his behalf, any remuneration whatever for pro- 
 viding him with employment, he shall for every such offense be deemed 
 guilty of a misdemeanor, and on conviction thereof shall be punished 
 by a fine of not more than one hundred dollars. 
 
 " '(b) That it shall be lawful for any seaman to stipulate in his ship- 
 ping agreement for an allotment of any portion of the wages he may 
 earn to his grandparents, parents, wife, sister, or children. But no 
 allotment whatever shall be allowed in the trade between the mainland 
 ports of the United States, or in the trade between the insular ports 
 of the United States, or in the trade between the mainland and the 
 insular ports of the United States, or in the trade between ports of 
 the United States and the Dominion of Canada, Newfoundland, the 
 West Indies, and Mexico. 
 
 " '(c) That no allotment note shall be valid unless signed by and 
 approved by the shipping commissioner. It shall be the duty of said 
 commissioner to examine such allotments and the parties to them and 
 enforce compliance with the law. All stipulations for the allotment of 
 any part of the wages of a seaman during his absence which are made 
 at the commencement of the voyage shall be inserted in the agreement, 
 and shall state the amounts and times of the payments to be made and 
 the persons to whom the payments are to be made. 
 
 '(d) That no allotment except as provided for in this section shall 
 be lawful. Any person who shall falsely claim to be such relation as 
 above described of a seaman under this section shall for every such 
 offense be punishable by a fine not exceeding five hundred dollars or 
 imprisonment not exceeding six months, at the discretion of the court. 
 
 "'(e) That this section shall apply as well to foreign vessels as to 
 vesels of the United States; and any master, owner, consignee, or 
 agent of any foreign vessel who has violated its provisions shall be 
 liable to the same penalty that the master, owner, or agent of a vessel 
 of the United States would be for a similar violation: Provided^ That 
 treaties in force between the United States and foreign nations do not 
 conflict herewith. 
 
 '"(/■) 2'hatfor the purposes of sul)sefition{e) of this section, themaster, 
 owner, consignee, or agent of any foreign vessel seeking clearance from a 
 port of the United States shall present his shipping articles at the office 
 of clearatice, and no clearance shall he granted any such vessel unless the 
 provisions of this section have ieen complied with. 
 
 '"(g) That under the direction of the Secretary of Commerce and 
 Labor, the Commissioner of Navigation shall make regulations to 
 carry out this section.' " 
 
 Sec. 11. That section twenty -six of an Act entitled "An Act to 
 amend the laws relating to American seamen, for the protection of 
 such seamen, and to promote commerce," approved December twenty- 
 first, eighteen hundred and ninety-eight, be, and is hereby, amended 
 to read as follows: 
 
 "Sec. 26. That this Act shall take effect sixty days after its approval, 
 and shall apply to all vessels not herein si)ecificall3' exempted; but 
 sections two, three, five, six, seven, eight, nine, ten, eleven, thirteen, 
 fourteen, fifteen, twenty-three, and twenty-four shall not apply to 
 yachts." 
 
HEAKINGS BEFORE THE MEKOHANT MARINE COMMISSION. 595 
 
 Sec. 12. That section forty-five hundred and thirty-six of the 
 Revised Statutes of the United States be, and is hereby, amended to 
 read as follows: 
 
 "Sec. 4536. No wages due or accruing to any seaman or apprentice 
 shall be subject to attachment or arrestment from any court; and every 
 paj'ment of wages to a seaman or apprentice shall be valid in law, not- 
 withstanding any previous sale or assignment of wages, or of any 
 attachment, encumbrance, or arrestment thereon; and no assignment 
 or sale of wages, or of salvage, made prior to the accruing thereof, 
 shall bind the party making the same, except such advance securities 
 as are authorized by this title. This section shall apply to fishermen 
 employed on fishing vessels, as well as to other seamen." 
 
 Sec. 13. That he/ore proceeding to sea, the m,aster of every sailing 
 vessel of the United States shall engage a sufficient number of seaman, 
 as provided hy the following minimum schedule: Vessels of two hun- 
 dred tons render deck, five aim, two-thirds effective hands,' vessels of two 
 hundred and fifty ton^s under deck, six and two-thirds effective hands; 
 vessels of three hundred tons wider deck, seven and one-third effective 
 hands; vessels of three hundred and fifty tons under deck, eight cmd 
 one-third effective hands; vessels of four hundred tons under deck, nine 
 effective hands; vessels of four hundred and fifty tons under deck, nine 
 and two-thirds effective hands; vessels of five hundred tons under 
 deck, ten and one-third effective hands; vessels of five hundred and 
 fifty tons under deck, eleven and one-third effectvve hands; vessels of 
 six hundred tons under deck, twelve effective hands; vessels of six hun- 
 dred and fifty tons under deck, thirteen effective hands; vessels of 
 seven hundred tons under deck, thirteen and two-thirds effectvve hamds; 
 vessels of seven hund/red and fifty tons under dec^k, fourteen and one- 
 third effective hands; vessels of eight hundred tons under deck, fifteen 
 effective hands; vessels of eight hundred and fifty tons under deck, fif- 
 teen and two-thirds effective hands; vessels of nine hundred tons under 
 deck, sixteen and one-third effective hands; vessels of nine hundred and 
 fifty tons under deck, seventeen effective hands; vessels of one thousand tons 
 under deck,seventeen and two-thirds effective hands; vessels of onethousand 
 onehundredtonsunder deck, eighteen and one-third, effective hands; vessels 
 of one thousand two hundred tons under deck, nineteen effective hands; 
 vessels of one thousand three hundred tons under deck, twenty effective 
 hands; vessels of one thousand four hundred tons under deck, twenty-one 
 effective hands; vessels of one thousand five hwndred tons under deck, 
 twenty-two effective hands; vessels of one thousand six hundred tons 
 under deck, twenty-two and two- thirds effective hands; vessels of one 
 thousand seven hundred tons under deck, twenty-three and one-third 
 effective lut/nds; vessels of one thousand eight hundred tons under deck, 
 twenty-four effective hands; vessels of one thousand nine hundred tons 
 under deck, twenty-five effective hands; vessels of two thousa/nd tons 
 under deck, twenty-five and two-thirds effective hands; vessels of two 
 thousand one hundred tons under deck, twenty-six effectvve ha/nds; ves- 
 sels of two thousand two hundred tons under deck, twenty-six and i/wo- 
 thirds effective hands; vessels of two thousand three hundred tons under 
 deck, twenty-seven effective hands; vessels of two tlwusand four hundred 
 tons under deck, twenty-seven and two-thirds effective hands; vessels of 
 two thousand five hund/red tons under deck, twenty-eight effective hands; 
 vessels of Imo thousand six hundnred tons under deck, twenty-eight and 
 
596 HEAEINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 two-thirds effective hands; vessels of two thousand seven h%i,nd/red tons 
 under deck, twenty-nine effective hands; vessels of^ two thousand eight 
 hundred tons wnder deck, twenty-nine and two-thirds effective ha/nds; 
 vessels of two thousand nine hundred tons under deck, thirty effective 
 hands; vessels of three thousand tons wider deck, thirty and two-thirds 
 effective hands. 
 
 In sailing vessels ahove three thousa/nd tons under deck, additional 
 seame7% shall he engaged at the rate of one-third effective hand for every 
 hundred tons, or one effective hand for every three hundred tons: Pro- 
 vided, that on vessels of schooner rig using steain for the ha/ndling of 
 sails at sea, the number of effective hands required hy the foregoing 
 schedule may he reduced as follows: By one, in the case of a vessel of 
 four hundred and fifty to five hundred tons; hy two, in the case of a vessel 
 of five hu/ndred to seven hund/red tons; hy three, in the case of a vessel 
 of seven hundred to nine hundred tons; hy four, in the case of a vessel 
 of nine hundred to one thousand two hundred tons; hy five, in the case 
 of a vessel of one thousand two hundred to one thousand four hundred 
 tons; hy six, in the case of a vessel of one thousand four hundred to one 
 thousand eight hundred tons; hy seven, in the case of a vessel of one 
 thousand eight hundred to two thousand three hundred tons; hy eight 
 in the case of a vessel of two tJvousand three hundred to three thousand 
 tons; hy one for every one thousand tons, in the case of a vessel exceed- 
 ing three thousand tons: And provided further, That every vessel of 
 less than one thousand five hund/red tons using steam for the handling of 
 sails at sea shall carry one man capahle of operating a donkey engine; 
 and every vessel of one thousand five hundred tons or more vsing steam 
 for the handling of sails at sea shall carry two such m,en. Each donkey 
 man shall he either a carpenter' or c(wahle of doing duty of an able sea- 
 man, and shall he counted as one effective hand. 
 
 Sec. H-. That not less than three-fourths of each complement called 
 for hy the ininimum schedide of either tJie preceding or the succeeding 
 section shall he individmilly effective Imnds — that is, of ratings not lower 
 than assistant boatswain. 
 
 Sec. 15. That hefor'e proceeding to sea, the master of every steam ves- 
 sel of the United States shall engage a sufficient number of seamen, as 
 provided by the following minimum schedule: 
 
 Tons (gross). 
 
 Master. 
 
 Mates. 
 
 Carpen- 
 ter 01 
 A. B. 
 
 Boat- 
 swain or 
 A. B. 
 
 Able 
 seamen. 
 
 Ordinary 
 seamen. 
 
 
 
 1 
 1 
 2 
 2 
 2 
 3 
 3 
 8 
 3 
 3 
 8 
 8 
 3 
 3 
 
 
 
 3 
 4 
 4 
 4 
 B 
 5 
 5 
 5 
 6 
 6 
 7 
 7 
 8 
 8 
 
 1 
 
 350 and under 500 
 
 
 
 1 
 
 
 
 
 1 
 
 
 
 . 
 
 2 
 
 1,000 and under 1,500 
 
 
 
 
 2 
 
 1,600 and under 2 000 . 
 
 1 
 1 
 1 
 1 
 1 
 1 
 1 
 1 
 1 
 
 
 1 
 
 2,000 and under 2,600 
 
 1 
 
 2,600 and under 8,000 
 
 2 
 
 3, 000 and under 3,600 
 
 1 
 
 3,600 and under 4,000 
 
 2 
 
 4,000 and under 4,600 
 
 1 
 
 4,600 and under 5,000 
 
 2 
 
 5,000 and under 5,500 
 
 1 
 
 6,500 and under 6,000 
 
 2 
 
 
 
 In steamers of six thousand tons and upward one able seaman or his 
 equivalent shall he added for every one thousand tons. 
 
 Sec. 16. That any sailing or steam vessel proceeding to sea without the 
 full complement of seamen provided for by the minimum schedules of 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 597 
 
 this Act shall forfeit to the United States for each effective hand or 
 equivalent a sum. double t/ie wages saved Jyy reason of such shortage: 
 Provided^ That this penalty shall not apply to any vessel unable^ aftefr 
 reasonable diligence^ to obtain- her full complement: And provided fur- 
 ther, That in every such case the wages saved during the continuance of 
 imdermanning shall he distributed, pro rata to monthly wages, among 
 the seamen employed during such continuam.ce. 
 
 Sec. 17. That for the purposes of this Act the able seaman shall 
 be considet^ed the unit upon which to calcidate the number of effective 
 hands. Each of the following named shall be counted as one effective 
 hand: Master, mate, carpenter; boatswain, sailmaker, donkey man, able 
 seaman, and apprentice, eighteen or more years of age and with two 
 years of sea service. Each of the following named shall be counted as 
 two-thirds of one effective hand: Ordinary seaman, apprentice seventeen 
 years of age and with one year of sea service, steward, male cook. Each 
 of tlie following named shall be counted as oixe-third of one effective 
 hand: Apprentice under seventeen years of age, boy. 
 
 Sec. 18. That an able seaman within the meaning of this Act m,ust be 
 nineteen or more years of age, and must have had at least three years of 
 experience at sea, on deck, of which at least one year shall have been spent 
 aboard a sailing vessel; and an ordinary seaman within the meaning of 
 this Act must be eighteen or more years of age and must have had at 
 least one year of experience at sea, on deck. 
 
 Sec. 19. That no person shall be engaged as an able seaman or an 
 ordinary seaman except upon proof that he is such within the meariing 
 of this Act. It is hereby made the duty of every board of local inspect- 
 ors to examine applicarits claiming to be able seamen or ordinary sea- 
 men, and to issue to each such applicant, after examination, provided 
 he shall hare shown the requisite fitness, a certificate as an able seaman 
 or an ordinary seaman, as the case may be, which certificate shall be at 
 all times retained by the person to whom, it is issy,ed. And any able 
 seaman m^ ordinary seaman may prove his rating within the meaming of 
 this Act by producing a certificate issued to him. by any board of local 
 inspectors inpursuance of this section. 
 
 Sec. 20. That eve?^ sailing or steain vessel voyaging between mainland 
 pcn'ts of the United States, or betweeii mainland and insular parts of 
 the United States, or between insular j)orts of the United States, shall 
 carry in her crew a boy or boys as follows: If she be of three hundred 
 tons or mare, but under one thousand five hundred tons {under deck), at 
 least one boy; if site be of one tliousandfive hundred tons or more {under 
 deck), at least two boys. Any vessel leaving^ any port of the United 
 States without the boy or boys required by this section shall'be liable to 
 a penalty of one hundred dollars for each offense: Provided, That this 
 penalty shall not -apply if, after reasonable diligence, the boy or boys 
 required by this section could not be obtained. 
 
 Mr. Fkaziee. Those sections of the bill which contain features new 
 to maritime legislation of the United States have been patterned either 
 upon laws already in operation in other countries or upon conclusions 
 set forth by official or private investigators. In the judgment of 
 American seamen, after extensive investigation and long experience 
 with the actual operation of maritime legislation, the bill as introduced 
 is thoroughly practical and urgently necessary to make conditions of 
 seafaring life acceptable to Americans, both from a moral and material 
 point of view. 
 
598 HEAKINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 I submit, further, that in view of the present activity in the direc- 
 tion of increasing the American merchant marine, the enactment of 
 this bill becomes a public necessity. As seamen, we believe that the 
 only sound theory upon which a nation's shipping may be made pros- 
 perous, in the sense of making it an auxiliary of the naval service, is 
 that of regard for the moral and material standard of the seamen them- 
 selves. As the situation in this regard now is, and as it is likely to 
 remain, so far as other prospective legislation is concerned, the condi- 
 tion of the seamen in American vessels is such that the service is nec- 
 essarily dependent for manning purposes upon the floating population 
 of the seaports. This class can never form an ideal, or even acceptable, 
 reserve in the event of a national demand upon the seamen of the 
 merchant service. 
 
 SEEKING TO IMPROVE THE LOT OF SEAMEN. 
 
 The bill is designed to remedy this state of affairs so as not only to 
 improve the lot of those already emploj^ed as seamen by removing the 
 evils which grow, at least indirectly, out of the existing law, but also 
 to improve the character of futurer generations of that craft by mak- 
 ing the circumstances of sea life such as will foster and not repress the 
 inherited inclination of our race for maritime pursuits. 
 
 It may be noted that while recent maritime legislation has modi- 
 fied the language of certain oppressive statutes, it has failed in most 
 instances to effect the desired change, for the reason that it has merely 
 compromised in matters which in their nature can not be materially 
 abated as long as they are recognized and tolerated in any degree. 
 For this reason the bill provides for the total abolition of certain fea- 
 tures of the present law, and, as to the rest, merely alters the language 
 of the statutes where the same has been found to be ambiguous or 
 nugatory. 
 
 WORKING HOURS AT SEA AND IN PORT. 
 
 As to cause for the amendment to section forty-five hundred and 
 sixteen on the first page, beginning on line 11, we beg to submit that 
 it is becoming the custom, especially in steam vessels, to keep the 
 crew working all day and nominally sleep all night. In large passen- 
 ger vessels there is one man that keeps lookout for four hours at the 
 time — too long a time to keep a really efficient lookout; but in small 
 steamers, especially so-called "tramps," the men are called out to keep 
 one or two hours' lookout at night. In any case the lookout is ineffi- 
 cient becaufte the men are not getting the needed rest. The man on 
 lookout is also often ordered off to do such duty as may be found neces- 
 sary. Disasters such as those of the JUlbe and La Bourgogne can be 
 traced to inefficient lookout. They occur generally between 3 and 5 
 a. m. Lookout is then usually lax owing to exhausted nature. 
 
 We beg to submit, as a further reason, that this system (known to 
 seamen as "Kalashi watch") permits vessels to run with two or more 
 men less than would otherwise be required. Hence boats are put in 
 charge of a crew of which too often not one can steer a boat in a sea- 
 way with either an oar or a rudder. Further, the men are all called 
 out of their bunks sleepy, half blinded from coming suddenly on deck, 
 hence inefficient to take such prompt action as may be found necessary 
 to save the lives of the passengers. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 599 
 
 We would further submit that this evillsystem can be checked with- 
 out a more drastic penalty than the discharge and the payment of the 
 crew now, because it is yet in its beginning, and it is not indulged in 
 by such firms as the American Line or the Cunarders. 
 
 We would further submit that under the present reading the statute 
 is meaningless. By looking over sections 4514 and 4515 it will be 
 found that their purpose is to prevent kidnaping (shanghaiing) of 
 men, and the old reading of section 4516 gives a conditional exemption 
 from punishment, while the new reading makes it the master's duty to 
 report not where he gets the men, but to the consul in the next port. 
 
 COMPENSATION FOR DELAY IN PAYING OFF. 
 
 Page 2, line 9: As cause for this amendment we wish to submit that 
 one day's pay is not sufficient to pay for one day's board and lodging. 
 Board and lodging is usually about 75 cents or |1 per day, while the 
 average wage in deep-water trade is |20 per month. We submit that 
 when a seaman's pay is wantonly kept from him and he is compelled 
 to resort to the courts to obtain redress, the vessel should pay at least 
 his expenses, and further that* there will be less litigation when it is 
 known that the seaman is not forced to abandon his wages by delay, 
 during which he has nothing to live on. Further, we submit that the 
 
 E resent law under which the seaman is compelled to wait four days for 
 is wages forces him to go to a boarding house, thus placing him at 
 the mercy of the "crimps" both with regard to the settlement with 
 the previous employer and the terms of his future shipment. 
 
 SECURITY FOR A PART PAYMENT OF WAGES DURING VOYAGE. 
 
 Page 3, line 25: Under the present law, which states "unless the 
 contrary is expressly stated in the contract " it is a custom to put a 
 proviso in the contract that " no money except at the master's option" 
 shall be paid during the voyage. We submit that when a seaman has 
 earned his money he ought to get it without begging for it. He will 
 need the money to send to those that have trusted him (if any) for 
 board and lodging, to send to those dependent upon him, or to use in 
 his own way. How he uses it and when he uses it furnish an index 
 to his character, as with other men, but no man has any right to 
 presume that he will use it badly, and upon this assumption keep and 
 use his money for his own advantage. 
 
 POWER OF MAJORITY OF CREW TO DEMAND SURVEY. 
 
 Page 4, line 9: At present a sux'vey can only be demanded in a for- 
 eign port upon complaint signed by the "first or second officer and a 
 majority of the crew.'^ This amendment will bring the law on this 
 point up to the British and German law. It has been found that offi- 
 cers who insist upon and sign any demand for survey acquire a bad 
 reputation and lose employment. Hence, if they do not desire to^o 
 in the vessel, owing to her unseaworthiness, they leave the vessel 
 under some pretense. It is almost impossible to prevail upon any 
 officer to sign any such demand, and men's lives are lost by such ves- 
 sels being permitted to go to sea. 
 
600 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 ENLARGEMENT OF FORECASTLES AKD PEOTEOTION OF STEAMBOAT CREWS. 
 
 Page 5, line 3: In support of this amendment we beg to submit the 
 following table, made up from the report of the Surgeon-General of 
 the Marine-Hospital Service for 1893 : 
 
 
 North 
 Atlan- 
 tic. 
 
 Middle 
 Atlan- 
 tic. 
 
 South 
 Atlan- 
 tic. 
 
 Gulf. 
 
 Ohio. 
 
 Missis- 
 sippi. 
 
 Great 
 Lakes. 
 
 Pacific. 
 
 
 3 
 
 620 
 110 
 604 
 656 
 647 
 
 2 
 867 
 127 
 631 
 684 
 617 
 
 2 
 829 
 111 
 794 
 1,245 
 696 
 
 2 
 869 
 36 
 382 
 740 
 476 
 
 
 
 
 29 
 
 Kheumatism 
 
 404 
 126 
 440 
 686 
 356 
 
 239 
 68 
 289 
 502 
 408 
 
 1,036 
 183 
 1,278 
 1,343 
 1,146 
 
 312 
 
 Tubercle . . . ... 
 
 134 
 
 Sickness of respiratory 
 
 461 
 
 
 
 
 
 
 
 Total treated 
 
 2,440 
 
 2,628 
 
 3,677 
 
 2,006 
 
 2,012 
 
 1,506 
 
 4,986 
 
 2,307 
 
 
 Showing the number of cases of sickness of the respiratory organs, 
 of tuberculosis, and of rheumatism; and also the following, compiled 
 from the report of 1894: 
 
 
 North 
 Atlan- 
 tic. 
 
 Middle 
 Atlan- 
 tic. 
 
 South 
 Atlan- 
 tic. 
 
 Gulf. 
 
 Ohio. 
 
 Missis- 
 sippi. 
 
 Great 
 Lakes. 
 
 Pacific. 
 
 Scurvy and beriberi 
 
 5 
 635 
 126 
 601 
 741 
 730 
 
 2 
 676 
 129 
 
 775 
 765 
 616 
 
 3 
 636 
 144 
 682 
 1,049 
 575 
 
 3 
 614 
 67 
 416 
 713 
 543 
 
 2 
 338 
 100 
 323 
 721 
 333 
 
 
 
 16 
 
 Rheumatism 
 
 370 
 58 
 284 
 732 
 410 
 
 i,672 
 177 
 1,115 
 1,363 
 1,084 
 
 809 
 
 Tubercle - 
 
 122 
 
 
 475 
 
 
 684 
 
 
 
 
 
 Total treated 
 
 6,322 
 
 6,813 
 
 8,426 
 
 6,288 
 
 4,576 
 
 4,310 
 
 11,651 
 
 5 412 
 
 
 
 Also the following from the report of 1898: 
 
 North 
 Atlan- 
 tic. 
 
 Middle 
 Atlan- 
 tic. 
 
 South 
 Atlan- 
 tic. 
 
 Missis- 
 sippi. 
 
 Great 
 Lakes. 
 
 Pacific. 
 
 Scurvy and beriberi 
 
 Bheumatism 
 
 Tubercle 
 
 Respiratory 
 
 Digestive 
 
 Injuries 
 
 (B.B.)2 
 612 
 80 
 441 
 793 
 658 
 
 4 
 647 
 243 
 691 
 722 
 600 
 
 163 
 736 
 ,267 
 802 
 
 562 
 112 
 597 
 
 324 
 660 
 426 
 
 316 
 185 
 197 
 417 
 
 789 
 
 172 
 
 1,040 
 
 1,461 
 
 1,323 
 
 668 
 123 
 581 
 673 
 1,016 
 
 The adoption of this amendment will, of course, necessitate the 
 alteration of some forecastles, but it will reduce sickness and save 
 human life, and we submit that the slight cost of alteration, in most 
 cases below |200, should not prevent its adoption. The existing regu- 
 lation of 72 cubic feet, is 6 feet high, 6 feet long, and 2 feet wide, and 
 though larger than a coffin, in the language of another speaker, i.s 
 "smaller than a grave." 
 
 We further urge the adoption of this amendment at this time, 
 because we feel that there is going to be a large increase in the merchant 
 marine, and the expense of alterations later will be larger than at pres- 
 ent, and it must be done some time. It is not conceivable that the 
 present conditions will be permitted to continue. 
 
 The question of forecastle accommodations, in relation to the health 
 of crews, is of immediate and pressing importance. The reports of 
 
HEARINGS BEFORE THE MERCHANT MARINE COMNISSION. 601 
 
 the Marine-Hospital Service are unanimously outspoken on the point 
 that the greater number of the seamen's ailments are directly due to 
 the existing unsanitary character of the sleeping and living quarters 
 on board of ship. 
 
 ABOLITION OF IMPRISONMENT FOR DESERTION IN A FOREIGN PORT. 
 
 Page 6, line 11: This amendment deals with the question of imprison- 
 ment for desertion in a foreign port. It strikes out that part of sec- 
 tion 4596, as it now stands, which provides that a seaman deserting or 
 neglecting or refusing to join his vessel, or being absent without leave 
 in a foreign port, may be punished, "at the discretion of the court, 
 by imprisonment for not more than one month." 
 
 In support of this feature we quote the following from the speech 
 of the Hon. James G. Maguire, in the House of Representatives, 
 March 30, 1898: 
 
 "It is assumed by gentlemen who oppose these reforms that if sailors 
 were allowed to leave their ships in foreign ports that right would be 
 ruinous to the merchant-marine interests engaged in foreign commerce. 
 Nothing could be farther from the truth. 
 
 " Prior to 1884 the articles of a sailor could not be canceled by the 
 mutual consent of the sailor and the master of an American merchant 
 vessel in a foreign port. The theory upon which this inhibition rested 
 was that in a foreign port an American vessel could not get a new crew 
 if her articled crew should either desert or be discharged; that an 
 American ship losing her crew in a foreign port must 'rot in her 
 neglected brine. ' Both seamen and masters have for many y ears known 
 that there is absolutely no truth in the theory and have acted on that 
 knowledge. 
 
 " For fifty years an American vessel has had no more trouble in 
 securing a crew in any foreign port than have the vessels of the coun- 
 try to which the port belongs — no more trouble than she would have 
 in securing a crew in an American port. 
 
 "The owners and masters of Amierican vessels, required by the 
 exigencies of trade to lie for a considerable time in a foreign port 
 awaiting cargo, generally got rid of the expense and annoyance of 
 keeping their crews in idleness by compelling them to desert, enlisting 
 new crews when cargoes were ready. This practice became well-nigh 
 universal long before the passage of the Dingley maritime bill of 1884, 
 which sought to correct the evil by making it lawful for masters and 
 sailors to cancel such articles by agreement in foreign ports. 
 
 "Nominally this act gives equal rights in this matter to masters and 
 sailors, but in fact it does not. The practical effect is to authorize the 
 master to discharge his crew whenever and in whatever port it may 
 please him to do so, but gives no corresponding right to the sailor. 
 The discharge must be by agreement. Neither party has a legal right 
 to annul the contract; but the master is manifestly in a position to 
 enforce his will if he wishes the articles canceled, while the sailor has 
 no such power to enforce his will. The sailor can, of course, desert 
 if he is willing to accept the legal penalties and other consequences, 
 but he could have done that before the passage of the Dingley Act. 
 
 "The master, however, can enforce a cancellation of the agreement 
 when it is to his interest, or to the interest of his employers, to have 
 it canceled, by making life on the ship intolerable to the sailors who 
 
602 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 will not agree to be discharged. This the masters very generally did 
 before the passage of the Dingley Act. 
 
 "Before the passage of that act nearly all American sailors were 
 forced to desert in foreign ports whenever their ships were consid- 
 erably delayed in such ports. Since the passage of the act nearly all 
 American sailors are, under like circumstances, voluntarily discharged 
 in such ports by the masters, as the following comparative statement 
 of the ' number of seamen discharged, deserted, and shipped by the 
 consuls, in the ports of Liverpool, Hamburg, and Singapore, in 1883 
 and 1893,' certified by Mr. S. Wike, Acting Secretary of the Treas- 
 ury, to the Committee on the Merchant Marine and Fisheries of the 
 Fifty -third Congress, on May 18, 1894, will show: 
 
 Consulates. 
 
 1883. 
 
 Dis- 
 charged. 
 
 sertla. Shipped. 
 
 Dig- 
 charged. 
 
 serte'd. Shipped. 
 
 Hamburg 
 Liverpool 
 Singapore 
 
 20 
 
 424 
 
 17 
 
 107 
 
 11,114 
 
 10 
 
 109 
 
 1,614 
 
 44 
 
 None. 
 
 15 
 
 None. 
 
 None. 
 996 
 65 
 
 a Inclusive of three quarters only. The report of desertion for the fourth quarter not found. 
 
 "The years taken for the purpose of this comparison were 1883, 
 one year before the passage of the Dingley bill, and 1893, nine years 
 after its passage. They are representative years of the two periods, 
 and the ports selected are fairly representative of the foreign ports of 
 the world. 
 
 "This table, in connection with what I have said of the absolute con- 
 trol of the matter of discharges held bj^ the masters of vessels, clearly 
 estafelishes my contention that no hardship to masters or owners of 
 merchant vessels is involved in permitting seamen at will, subject to 
 such civil damages as may be provided for, to terminate their ship- 
 ping contracts in foreign ports. 
 
 "All ships of all nations stand upon an equal footing with respect 
 to the shipment of crews in all seaports of the world. The sailor is, 
 in the matter of his private employment, a citizen of the world. The 
 ease or difficulty with which a crew may be secured for a ship depends 
 not upon her nationality, but upon her reputation and the reputation 
 of her flag for the treatment of sailors." 
 
 The Chairman. Did the English ship or ships in which you sailed 
 allow their crews to leave when they touched an American port? 
 
 Mr. Feazier. Yes, sir; we were discharged. 
 
 The Chairman. You could leave voluntarily? 
 
 Mr. Frazier. We were told to go to the consul and get paid off. 
 
 The Chairman. In that respect their law is difl'erent from ours? 
 
 Mr. Feazier. 1 suppose so. 1 am not very well acquainted with 
 the law. 1 did not sail long enough in an English ship to become 
 thoroughly acquainted with tlie English law, and it has been a good 
 many years ago. The change has been considerable since then. 
 
 Representative Minor. If you had been shipped at an English port 
 to return to that port again, could you have left her? 
 
 Mr. Fraziee. I did not ship for a round trip. I shipped in an 
 American port, and was made so uncomfortable in the foreign port 
 that 1 had to leave; and then 1 shipped again in order to go to America, 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 603 
 
 and the same thing happened over here, until I could get efficient 
 enough to go on American ships. I could not get on an American 
 ship until I was an efficient seaman. They did not want me. 
 
 1 also qiiote from a speech made in the House of Representatives 
 February 19, 1904, by tbe Hon. Edward J. Livernash, as follows: 
 
 "My strength will not permit me to speak to-day of a multitude of 
 minor wrongs of which the seaman is the victim; but I will speak of a 
 wrong not minor, whose character is such as of itself to keep from the 
 over-sea ships of our country the sort of boys, the sort of men, essen- 
 tial to great achievement amidst stern competition with the ships of 
 alien nations. I refer, of course, to the maintenance of involuntary 
 servitude in our foreign-going merchant marine. 
 
 " Under sections 4596 and 4600 of the Revised Statutes of the United 
 States the American seaman in our over-sea service is placed outside 
 the grace of the thirteenth amendment of the Constitution. He is the 
 only person under our flag who may not decline his bargain to serve 
 another in civil life without loss of liberty. He may be pursued as 
 fugitive slaves were pursued in the dark days before the civil war if 
 he leave his ship in violation of his civil contract, and may be impris- 
 oned or delivered up to the master of his vessel as felons are delivered 
 up, manacled and disgraced. He may have been lured into the service 
 by the most outrageous frauds, but in practice the fact will avail him 
 nothing. Let him quit the service under penalty of pursuit and irons! 
 
 "There was recently brought to my attention a case arising before 
 the repeal of these laws in so far as they related to the coastwise trade — 
 happily they no longer aflfect that trade. An American seaman, engaged 
 as a cook, left his ship while she was in an Atlantic port. He was ap- 
 prehended, brought on board, and while the ship remained in port was 
 kept chained to the galley by a chain long enough to enable him to 
 work thei'e — chained as in days all the world blushes to remember 
 slaves were chained to the oars." 
 
 Mr. Fields S. Pendleton. Where was that? 
 
 Mr. Fkazier. That happened in Maine. 
 
 Mr. Pendleton. What was the name of the ship? 
 
 Mr. Frazier. It happened down in Bangor, I think it was, or 
 Machias. 
 
 Several gentlemen. We doubt it. 
 
 The Chairman. Proceed, Mr. Frazier, although it would be well, if 
 you want to make allegations of that kind, to give the names of the 
 ship and the master. 
 
 Mr. Frazier. I am quoting a speech of the honorable Mr. Livernash. 
 
 The Chairman. Oh! 
 
 Representative Minor. That is very indirect. 
 
 The Chairman. Did Mr. Livernash ever sail on ships? 
 
 Mr. Frazier. 1 can not tell you. You will have to ask him. 
 
 The Chairman. We have heard something of Mr. Livernash, but 
 we have never heard of him as a sailor. 
 
 Mr. Frazier. Mr. Livernash continued: 
 
 "And just that practice is yet possible — nay, does obtain — as to 
 seamen under our flag when that flag flies in foreign jurisdictions, not 
 of the near-by trade. Think of it! It is a blistering infamy, out of 
 joint with everything we cherish as American! Liberty! Freedom! 
 The progress of the world demands that no man shall have a right so 
 to sign away his time as that he may not reclaim it on penalty short 
 
604 HEARINGS BEFOEE THE MERCHANT MARINE COMMISSION. 
 
 of a prison cell — not all of bis life, nor twenty years of it, nor ten, 
 nor one — no, not the fraction of an hour! The right to personal 
 liberty is, before God, and should be, inalienable! 
 
 " I am glad to say that the leader on the other side of this Chamber, 
 the gentleman from New York [Mr. Payne], has in other years led, 
 and strongly led, a crusade to destroy this evil utterly. Much of the 
 credit for killing it in the coastwise trade is due to him; and had his 
 will prevailed, the abhorrent practice would notto-da}?^ exist anywhere 
 under our flag. 
 
 '"Where the great offense is let the great ax fall.' We may not 
 look on our yesterdays without remorse; let us have heed for our 
 to-morrows. Sections 4596 and 4600 should be repealed. Until they 
 are repealed which of us, sir, would wish to send a boy of his to sea 
 on any ship subject to their un-American provisions? 
 
 In the record of the second session of the Fifty-eighth Congress, on 
 page 2385, is printed an appendix by the Hon. Edward J. Livernash 
 on the American seamen, which 1 am sure will be of great interest to 
 this Commission; but, being a very lengthy document, I shall not at 
 this time ask that it be printed in the hearings, but will ask those of 
 you who are interested in the American seamen to read it, as it can 
 be obtained at any time. 
 
 I beg to submit further that this contract slavery is so fully under- 
 stood by seamen to-day that when we have made a contract to go in a 
 vessel we do not generally' say, "I have shipped," but we generally 
 say, "I have sold myself again." It is not likely that the American 
 boy, educated in an American school, with the full sense of personal 
 liberty there taught, can be induced to seek employment branded as 
 unfit for seamen. Neither the character of the American seaman nor 
 the existing circumstances of his occupation justify the continuation of 
 the contract-slave system at present applied to him. On the contrary, 
 that system tends inevitably to a deterioration in the personnel of the 
 service. The law of imprisonment for desertion is tae cause, not, as 
 is frequently claimed, a necessary effect of insubordination on the part 
 of the seamen. 
 
 I beg to submit that no man should be punished penally for violating 
 a civil contract to labor. Anyone so punished is a serf or peon, and a 
 survival of the ancient idea that one man can have a property right in 
 another. I beg further to submit that the discretion here vested in the 
 court would either be exercised by some foreign police magistrate or 
 by the consular court where, as in Turkish or Chinese ports, extra- 
 territorial jurisdiction has been granted to our country by treaties. I 
 urge that no man's liberty be made to depend upon the mere whim of 
 some justice of the peace or police magistrate alien in language and 
 feeling, and urge that you give us the full freedom granted to other 
 men. 
 
 ABOLITION OF CONSULAR AUTHORITY TO CLAIM DESERTERS. 
 
 Page 8, line 15: This amendment strikes out the provision of section 
 4600, which authorizes consular officers to "reclaim deserters," and is, 
 in view of the proposed abolition of imprisonment for desertion, purely 
 technical in effect. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 605 
 
 MAKING VESSELS LIABLE IN DAMAGES FOR CEUELTT. 
 
 Page 9, line 18: The present law in the case of seamen illegally pun- 
 ished makes the master of the vessel liable in damages to the person 
 punished. By the proposed amendment the liability is placed on the 
 vessel. The right to sue the master is a barren right. His property 
 being in some other State, thousands of miles away, can not be levied 
 on. Further, in the great majority of instances, he has no attachable 
 property, and the present custom of sending the offending officer on 
 shore in time to escape before charges can be lodged against him will 
 continue in much the same way as at present. 
 
 SCALE OF PROVISIONS. 
 
 Page 10, lines 3 and 5 : It is here proposed to make two alterations 
 in the scale of provisions, namely, to increase the water allowance 
 from, 4 to 6 quarts daily, and the allowance of butter from 1 to 2 
 ounces daily. I submit that this allowance of water is no more than 
 is absolutely necessary for food and drinking purposes, especially in 
 hot weather, or when extra hard work is entailed upon seamen. The 
 present allowance is inadequate, and is one of the main causes of 
 disease and suffering at sea. So, in the case of the butter, it is found 
 that 2 ounces per day are barely sufficient for the purpose to which 
 that ingredient is usually applied. 
 
 ABOLITION OF ALLOTMENTS TO THE ORIGINAL CREDITOR. 
 
 Page 10, line 20: The purpose of this amendment is to abolish the 
 allotment to the original creditor and to prohibit the payment of 
 remuneration, except to an authorized officer for the shipment of sea- 
 men. This system of signing away the wages before it is earned gives 
 the seamen into the power of the crimps, and we must take an allot- 
 ment, the sum of which is usually divided between the crimps and the 
 master or the owner of the vessel. The helplessness of the seamen is 
 so well illustrated in the following, from the testimony in Thos. Mar- 
 tial et al. V. Ship Eclipse, before Judge Morrow, in the district court 
 of the northern district of California, December 1892: 
 
 "John Savory, called for the claimants, sworn: 
 
 " Mr. Bloom. What do you usually do, or do you get anything for 
 acting for the boarding-house master for shipping seamen ? 
 
 " Mr. HuTTON. I object to the question as immaterial and irrelevant. 
 I do not see what it has to do with this case. 
 
 " Mr. Bloom. You brought out something about it. 
 
 " The Court. I guess the court is responsible for that. Do you 
 object to it, Mr. Hutton ? 
 
 " Mr. Hutton. It has nothing to do with the case. 
 
 "The Court. You must be confined to this case. 
 
 " Mr. Bloom. You are acquainted with the names of the libelants 
 in this case ? — A Yes, sir. 
 
 ' ' Q. Was there any agreement by which you were to get anything ? — 
 A. On the $15 allotment the boarding master was to allow me |2.50 
 for my trouble in putting the men on board the ship and collecting 
 the money. On the |20 allotment, $3 was allowed me for my trouble. 
 
606 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 " The Court. You collected $2.50 on the $15, and $3 on the $20?— 
 A. I collect the whole amount. There was a contractmade with that 
 ship to put the ship to sea for $175 advance, and I failed to do it. I 
 was stuck for two men, and I went up to Murray's and he says, " I have 
 got a man that 1 will give you, but 1 must have |20 allotment." I 
 paid it to him, and he allowed me $3 oflP of it. 
 
 "Q. Then the boarding-house man gets this money? — A. Yes, sir; 
 and then there are runners to be paid out of it. They get $5, flO, 115, 
 or $20. 
 
 "Q. For what? — A. For landing the sailors, according to circum- 
 stances; sometimes $5 and sometimes $10. 
 
 "Q. Take this case of Thomas Hosford. Whose writing is that? — 
 A. My writing. 
 
 "Q. Do you remember the name of Thomas Hosford on board this 
 vessel? — A. No; I can not bring him to mind, unless he is that man 
 sitting there. 
 
 "Q. Fifteen dollars?— A. Yes, sir. 
 
 "Q. How much did you get out of that, $2.50? — A. Yes, sir, 
 
 "Mr. Bloom. You did not take it out? — A. He makes me a present 
 of it. I turn the money over to him, and he says, ' This is for your 
 trouble.' 
 
 "The Court. You pay him the $15?— A. Yes; I paid him $30 on 
 two seamen. 
 
 "Q. This is Samuel Winn?— A. Yes, sir. 
 
 "Q. He is the man that furnished Petersen? — A. I think he is the 
 man; yes, sir. 
 
 "Q. And you gave him $30, and he gave you $2.60 back in each 
 case, making $5 ? — A. Yes, sir. 
 
 "Q. He retained the other? — A. Yes, sir. 
 
 "Q. You say that he pays money also to a runner? — A. Yes, sir; 
 when the runner brings the man, the same as this man Petersen. 1 
 went to him and asked him if he had any men to put in the ship. 
 There was a man in the back, and he said, ' 1 will have a man here, 
 or two men, at such a time. When do you want them? ' Naturally, 
 he allows that man something for getting Petersen. 
 
 "Q. For getting him from a Britisn vessel? — A. I don't know 
 where he came from. The other man came out of an English ship 
 that morning, landed by a runner. 
 
 "Q. Both of them appear to have had money due them? — A. They 
 desert their vessels and run away. 
 
 " Q. This runner gets these men from the English ship and he claims 
 certain compensation? — A. He works for a boarding-house master. 
 The runners have an association. They make an agreement among 
 themselves that they shall have $5 for landing a sailor, or according 
 to how the trade is. If men are scarce and blood money is paid, they 
 get so much out of the blood money. 
 
 "Q. What is blood money? — A. That is something else. 
 
 " Q. What is it? — A. I don't know, only what I am informed; but as 
 far as I know, the captain wants a crew and the captain has to pay $86 
 for each man. That is what the association of boarding masters some- 
 times charge — $4 bonus on English ships, $5 shipping fee, and $1 
 boatman, and $40 advance. In American vessels tney do away with 
 that $5 shipping fee. 
 
HEAKINGS BEFORE THE MERCHANT MARINE COMMISSION. 607 
 
 "Q. Where is the blood money? Of that $86, how much blood 
 money is there in that? — A. Forty dollars. 
 
 " Q. Does the captain pay that? — ^A. The captain of the ship pays it? 
 
 "Q. Does he get it back from the sailor? — A. I am not in the deep- 
 water business. I presume he does; I will not swear to it. 
 
 " Q. You presume he gets it back from the sailor? — A. Yes, sir. 
 
 "Q. Is there any blood money in the coasting business ? — A. No, sir; 
 unless you make arrangements with the captain to furnish the crew at 
 $15 or $20 for your trouble. You can call it blood monej'^ or expenses. 
 
 "Mr. Bloom. There is one question I should like to ask you in 
 reference to these notes: Did they fully understand what these notes 
 were for? Did you fully explain it to them? They owed money, and 
 these notes were to pay that? — A. Yes, sir; the men went aboard the 
 ship satisfied, and went off satisfied. 
 
 "Cross-examination by Mr. HrrTTON: 
 
 "Q. There was one of those men who was a Spaniard? — A. They 
 are all different nationalities. I can not swear to what nationality 
 they were. 
 
 "Q. You frequently pick up men in shipping crews that are for- 
 eigners, and unable to talk English? — A. They come through runners 
 and boarding masters. 
 
 " Q. I ask you if you do not frequently pick up men and put them 
 on vessels under similar circumstances to this who are foreigners and 
 do not talk English ? — A. Yes, sir. 
 
 "Mr. Bloom. I object to that. 
 
 "The Court. He can answer the question. 
 
 "Mr. HuTTON. There was a man named Pablito on the ship. Do you 
 remember him ? Do you remember any man on the vessel who could 
 not talk English? — A. There was no man in that ship that could not 
 speak English. I spoke to them myself. 
 
 " Q. You do not remember it, I suppose? 
 
 "The GotJET. He says he does not remember any one that could not 
 talk English. 
 
 ' ' Mr. HuTTON. W here were you when you made the notes out ? — A. 
 In my office, except the notes made out on board the ship. 
 
 "Q. Were there notes made on board the ship? — A. Yes; in place 
 of one or two men that "were short. 
 
 "Q. Those that you took on late? — A. Yes, sir. 
 
 "Q. You say that you explained to them about this advance note, 
 what it was for? — A. I read it to them this way: 'San Francisco. 
 Date. $15 or $20 (whichever the case may be), twenty-four hours after 
 sailing of the ship Eclipse please pay to boarding master.' 
 
 "Q. Did they understand that they were not receiving that amount 
 in advance? — A. The men understood they were signing their advance 
 notes to the boarding masters. 
 
 " Q. Did they also understand that they did not receive that amount 
 of money? — A. They were settled up with. 
 
 ******* 
 
 "Mr. Htjtton. You say you agreed to puf them on for $176. Was 
 any other figure discussed?— A. No, sir; I failed to do it for that. 
 "Q. How much did you get?— A. She paid $200. 
 "Q, You did get $200, eventually ?— A. Yes, sir. 
 
608 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 ' ' Q. You were paid more than you originally agreed ? — A. Yes, sir. 
 
 "Q. You testified in response to a question of Mr. Bloom, that you 
 explained these notes, or read them over to the sailors? You just read 
 them, that is all. — A. I read them, and would say, 'Sign this, sign 
 the articles, and here is the note.' 
 
 "Q. That is all you said to them? — A. I read it, ' Twenty-four hours 
 after sailing of the ship Eclipse please pay to boarding master $15 or 
 $20, and charge the same to my account.' 
 
 "Q. Did you read it over to each man personally? — A. I think I 
 did. I know I did to a good many. Some of them took it up in their 
 hands. 
 
 " Q. This particular man here, Wallis; did you explain to him whj' 
 he should sign a note for $20, when he had onljr been in port some 
 two or three hours ? — A. It was signed on board the ship, if I remem- 
 ber aright. I wrote the note out on board the ship. The man was 
 not sober. 
 
 ' ' Q. Was he very drunk ? — A. He was not so drunk that he could not 
 get around, but he was not all right. He knew what he was doing. 
 
 " Q. You did not enter into a discussion with him, or explain why he 
 should give away |20 for the mere privilege of going to the boarding- 
 house and going aboard another ship within a few hours? — A. No, 
 sir; but they had a boy from the house, either Murray's son or step- 
 son. He stayed with this man and went aboard and went in the fore- 
 castle, and the man did not want to go for $25. They talked him into 
 it. The man went aft and signed his note at the same time. 
 
 " Q. Did you tell him you were going to get $3 for the mere priv- 
 ilege of asking him to put his name on the articles ? 
 
 "Mr. Bloom. I object. 
 
 "Mr. HuTTON. Did you explain that to him? — A. I can not say 
 whether I explained that to him. • 
 
 ******* 
 
 "Mr. HuTTON. Were you present when this man Petersen signed 
 that order? — A. Yes; he signed the articles and order both! 
 
 "Q. He signed it on the Monday afternoon previous to the ship 
 sailing? — A. If I remember right, the ship went away on Wednes- 
 day. If that was the case, he signed it on Monday afternoon. 
 
 " Q. From the time that you first saw him to the time that he signed 
 this $15 note was only a few minutes? — A. That is all. 
 
 "Q. At that time you had done nothing for him? — A. I had done 
 nothing for him." 
 
 Notwithstanding the testimony taken by this honorable Commission 
 in the port of New York that seamen in the coastwise trade would 
 like to have advance, I will, if the Commission so desires, undertake 
 to place in its hands before the convening of the next session of Con- 
 gress, a petition signed by nearly 30,000 coasting seamen, that they 
 do not want any advance. I fully realize what I am saying when 1 
 make this statement; it means that I have not only got to secure the 
 signatures of every member of the International Seamen's Union of 
 America, but nearly 6,000 nonunion seamen. 
 
 The Chairman. Thai? is not necessary. I think the weight of testi- 
 mony, both in New York and Philadelphia, was very strongly against 
 advances. 
 
HEABINGS BEFORE THE MERCHANT MARINE COMMISSION. 609 
 
 Mr. Fkazier. A feature of this system not brought out by this 
 testimony is, that these shipping agents are sending utterly incompe- 
 tent men to sea. This applies in the coastwise trade as well as the 
 deep water, as you can find out by questioning some of the masters of 
 vessels that have been getting their crews outside of the United States 
 shipping commissioner's office in this port. The shipping agent's 
 interest prompts him to look after the man from whom he can obtain 
 the most money. Real seamen refuse, when they can, to be thus 
 robbed, and landsmen are put in the vessels. Thus the lives of the 
 men and the safety of the property are endangered in order that some 
 shipowner may get a cheaper crew and the crimps obtain a few dollars. 
 
 Senator Mallory. "Why is it that a man once treated that way will 
 allow himself to be treated that way the second time ? 
 
 Mr. Frazier. The main reason is that when the man comes ashore 
 he can go nowhere else than the boarding house, unless he can get 
 part of his money. He can not well live on the streets. When he 
 once gets into the power of the crimps he gets treated that way. 
 
 Senator Mallory. You speak of the boarding-house keeper and the 
 crimp as the same person. 
 
 Mr. Frazier. He is the same party. 
 
 Senator Mallory. Who is the shipping agent? 
 
 Mr. Frazier. He is the first cousin of the boarding-house keeper. 
 
 Senator Mallory. He is the gentleman who ships through the instru- 
 mentality of the crimp? 
 
 Mr. Frazier. He is the go-between between the boarding-house 
 keeper and the shipmaster. 
 
 On this point we would refer to the following testimony of Mr. 
 James O'Brien, formerly United States shipping commissioner at Phil- 
 adelphia, Pa., and since then engaged as "shipping agent" at that 
 Sort, taken before the hearing before the Committee on Merchant 
 larine and Fisheries, January 24, 1896: 
 
 "Now, I want to throw all the light I can on this subject, so you 
 can give us a law under which we can work. I would like to work 
 without any of this trouble, because this blood-money charge is made 
 so much of. It has got down so fine, for the last seventeen or eighteen 
 years, that the owners in Europe know as much as we do. We had a 
 communication not long ago from the owners of ships bound to this 
 port wanting to know what the returns would be, and saying that they 
 could get so much and would expect so much. We have done a good 
 deal of work for these ships, and paid out some moijey, etc. , but they 
 wanted as much as anybody else would give them. We told them, of 
 course, we would do as much as anybody else. This return of blood 
 money is of no benefit to us. We simply take that off the bill; so 
 much returns. We get f2 apiece shipping on foreign voyages. A 
 case was tried some fifteen or sixteen years ago in New York on that 
 question, and the district court ruled that there was no jurisdiction 
 over foreign vessels, and precisely the same law as 
 
 "Mr. FuRUSETH. On the allotment note that is made out for $35, it 
 is paid by the consignee of the vessel with $30 ? 
 
 "Mr. O'Brien. That is not the way to pay this. It is done in a dif- 
 ferent way. They get, say, $35 advance to go to San Francisco, and 
 the Government allows that. Now, they get an order from the cap- 
 tain, say, for $5 more, making $40. The sailor signs an order on the 
 
 3a— 04 39 
 
610 HEAEINGS BEFORE THE MEEOHAKT MARINE COMMISSION. 
 
 captain to pay over, say, $6 desired by him, and the ship pays that |5 
 he has in the treasury and gives them a full accounting, so the sailor, 
 at the expiration of the voyage, will not have that, and the ship is 
 really not out of it." 
 
 It is to be noted that the provisions against the issuing of any note 
 for the paj'^ment of advance wages, and the payment of any remunera- 
 tion to "any person other than an oiEcer authorized by an act of Con- 
 gress " for the shipment of seamen are merelj'^ reenactments of the law 
 as it stood until quite recently. Experience with the allotment feature 
 of the law has proved that unless such provisions are reestablished all 
 efforts to limit the abuse of the allotment must fail, since the crimps 
 and others who benefit by that system are enabled to make good the 
 difference in the reduced amount of allotment by demanding a cor- 
 responding high "shipping" fee from the shipowner. 
 
 Another feature of this section is the addition of a new subsection 
 (f) prohibiting the issuance of clearance papers to foreign vessels 
 except upon proof contained in the shipping articles that the law in 
 the matter of allotment has been complied with. The allotment law 
 already applies to foreign vessels, and the law has been declared to be 
 constitutional, in the case of B. M. Patterson et al. v. Bark Uudora, 
 U. S. Supreme Court, and foreign vessels are also required to present 
 their articles at the office of clearance, so that no additional delay is 
 to be anticipated by the operation of the proposed amendment. It is 
 believed that under this system the clearance officers will be enabled 
 to detect and prevent any systematic violation of the law, as has been 
 done already to a great extent by the shipping commissioners in the 
 case of American vessels. 
 
 LAW APPLICABLE TO WHALING AND FISHING VESSELS. 
 
 Page 13, line 14: This section strikes out the words "fishing and 
 whaling vessels" in order to bring that class of vessels within the 
 provisions of the sections named. Whaling vessels are in the habit 
 not only of illtreating the seamen, but the seamen are being starved 
 and, by the allotment system, cheated out of their earnings. 
 
 MANNING AND EFFICIENCY SCALE. 
 
 Page 14, line 8: This section of the bill embodies an entirely new 
 feature of American maritime legislation. However, the question of 
 manning has long been mooted and the necessity of such legislation 
 agreed upon. The scales provided for in the bill have been adopted 
 from the recommendations made in the report of the committee 
 appointed by the board of trade to inijuire into the manning of Brit- 
 ish merchant ships (1896). The investigations of this committee were 
 exhaustive, and inasmucn as the conditions in regard to manning are 
 similar in American and British ships, except in oiir coastwise trade 
 where we use a large fore-and-aft with steam, for which duB allowance 
 is made, we deem it advisable to quote at some length the conclusions 
 of the report, as follows: 
 
 "Owing to unrestricted competition and the absence of any require- 
 ment as to qualification, the quest for employment in the mercantile 
 marine has degenerated in many cases into a mere scramble, in which 
 very little consideration is bestowed on the conditions of service so 
 long as employment is secured. Articles of agreement containino- 
 
HEAEINGS BEFORE THE MERCHANT MARINE COMMISSION. 611 
 
 particulars respecting the ship, the voyage, the crew, and the pro- 
 visions are indeed read over to the parties by a superintendent of 
 mercantile marine before being signeo, and it has been suggested that 
 if a seaman or fireman is not content with the information contained 
 in the articles he has it in his power to examine the vessel for himself. 
 
 "The weight of the evidence shows conclusively that such an exami- 
 nation is in practice seldom made, as the seamen and firemen are gen- 
 erally under the impression that if they were inquisitive they would 
 not be wanted, and when men are taken out in tugs, or shipped at 
 night, or engaged at another port and sent by train, such an examina- 
 tion is out of the question. 
 
 "The conditions and circumstances of sea service differ, in fact, so 
 widely from those of any employment ashore that there is not, and 
 can not be under existing circumstances, such a thing as a contract 
 entered into on equal terms by employers and employed. It has been 
 declared by the witnesses who have given evidence on behalf of ship- 
 owners that there are various considerations not even referred to in 
 the articles of agreement which must be taken into account in deter- 
 mining a proper crew for a ship, such as rig, sail area, steering gear, 
 winches, number of fires, coal consumption, position of bunkers, etc. 
 In sig'ning articles the seaman can have no adequate knowledge of such 
 considerations, nor of the extent of work to which he binds himself, 
 and he has subsequently practically no appeal. It is greatly to the 
 credit of the general body of shipowners that their position in dealing 
 with the sailor is not frequently taken advantage of; but such virtue 
 is scarcely to be expected from every member of a large body, and it 
 is therefore incumbent on the State to provide reasonable safeguards 
 for the seaman in those respects in which he can not practically help 
 himself. 
 
 "A case may be quoted illustrative of the conditions and results of 
 a contract entered into in the United Kingdom in time of labor dis- 
 putes. The crew of a vessel signed articles at Liverpool to join at 
 Newport, but were actually put on board from a tug in Barry Roads. 
 After sailing the crew came to the conclusion that the ship was under- 
 manned and refused duty on the master declining to accede to their 
 demand to put into the nearest port. The ship eventually put into 
 Bahia, where the men were tried by a naval court for insubordination, 
 refusal of duty, combining to disobey lawful commands, neglecting 
 duty, impeding navigation of the ship and progress of the voyage, and 
 eighteen of them were sentenced to imprisonment at Bahia for ten 
 weeks each, and one for twelve weeks. The court did not express any 
 opinion as to the plea of undermanning, although both the mates 
 admitted that the vessel was undermanned. It is, however, immate- 
 rial to the present inquiry whether this particular vessel was or was 
 not undermanned. The case is illustrative of the manner in which 
 contracts for sea service are sometimes entered into. Men are brought 
 from a distance and put on board ships at night without an opportunity 
 being afforded them of judging as to the state of the ship or her require- 
 ments as to manning. By working for their lives they may succeed in 
 reaching their destination, and thus they will have established their 
 number as a proper crew for the vessel until a further reduction is 
 made; but should they refuse to fulfill their contract, which may per- 
 haps involve excessive risk and work for a whole year, they may, as in 
 this case, be thrown into a foreign prison. 
 
612 HBAKXNGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 "The requirements which determine or should determine the man- 
 ning of merchant ships are so very different in steamers and sailing 
 ships respectively as to point to a total separation of the two cases. 
 This is obviously true, of course, inasmuch as the steamship requires, 
 and the sailing ship does not require, a staff of men below to work 
 the boilers and engines. But even leaving this great distinction aside 
 for a moment, other great distinctions remain. In the case of a steam- 
 ship the duty imposed upon her by statute of giving way to sailing 
 ships involves a primary and very special necessity for a lookout of 
 the highest qualit3% and the rules of the road, by imposing upon all 
 steamers the duty of avoiding collisions with each other by specified 
 uses of the helm and engines, make it incumbent on such vessels 
 always to keep the best possible lookout. 
 
 "There is, therefore, in large steamers, an absolute necessity for 
 one man to be continuously on the lookout, at least by night, and 
 another to be continually at the wheel. For the moment we will 
 assume that a third man is necessary, whatever be the size of the ship, 
 for examining and trimming the regulation and other necessary lights; 
 examining or using the log; keeping the boat tackle, the lead, etc., in 
 readiness for use; securing gear which may get adrift; examining and 
 keeping tight the hatchways and ventilators in bad weather; comply- 
 ing with any orders the officer of the watch may find it necessary to 
 give; calling the captain and the watch below; and in times of stress, 
 affording some relief to the men at the wheel and upon the lookout, 
 four-hour watches at these latter duties, with intervals of four hours 
 only for sleep and all other relaxations, being quite as much as men 
 can be expected to efficiently perform, especially in bad weather and 
 under sevei-e conditions of storm, cold, or other circumstances of 
 exposure at sea. 
 
 "Although we have mentioned last this relief to be rendered by the 
 third deck hand to the helmsman and lookout man, we attach great 
 importance to it, because of its immediate bearing upon the safety of 
 other vessels. An undermanned steamer, driving ahead in crowded 
 waters, especially by night and in thick weather, with a bad lookout 
 and a fatigued helmsman, is as great a source of danger to other vessels 
 as to herself, a fact which furnishes, it may be incidentally remarked, 
 a claim to the sympathy and support of other nations in our maritime 
 legislation, the benefits of which are in this respect shared by all the 
 nations that send ships to sea. 
 
 "Three deck hands at least on watch, in addition to the officer of the 
 watch, being thus regarded as necessary for a steam vessel of, say, 700 
 to 800 tons gross measurement, no great increase of demand for men 
 becomes apparent (in the assumed absence of auxiliary sail power) if 
 we double the size of the ship. One lookout man and one helmsman 
 (with steam steering gear) are as able to perform their duties in the 
 large as in the small vessel, and the increase of duty must in this 
 instance, when at sea, fall entirelj' upon the third hand, in the absence 
 of a carpenter or boatswain, such increase of work resulting from the 
 increased extent of the ventilators and hatchways to be cared for, and 
 of the general work upon the deck of the larger ship. Even this 
 limited increase of duty points undoubtedly to some increase in the 
 deck crews of steamships with marked increase of size, but the rate of 
 such increase will obviously be slow. The sail power of ordinarv 
 trading steamers has become so small that it may be left for thie 
 
HEABINGS BEFORE THE MEKCHANT MARINE COMMISSION. 613 
 
 moment out of account; but the sizes of the ropes and hawsers increase 
 with the size of the ship and render an increase of hands necessary, 
 especially at times of entering and leaving port. 
 
 "In the sailing ship (save for causes presently to be mentioned) the 
 increase of sail area to be spread and taken in corresponds roughly to 
 the increase of the size of the ship to be propelled, and the rate of 
 increase of the crew, apart from the lookout and the steering, must 
 proportionately increase. It is quite true that there are causes, and 
 powerful causes, at work to reduce the necessity of multiplying the 
 seamen in sailing ships at the rate here suggested. The first cause is 
 the great simplification which the rig of merchant sailing ships is 
 undergoing, by the diminution of yards and square sails on most of 
 the masts, and the use of fore and aft sails as the only or the chief pro- 
 pelling canvas. All these fore and aft sails being set and taken in from 
 the deck, the labor, and consequently the demand for men, are accord- 
 ingly reduced. The other cause is the occasional application of mechan- 
 ical power — mostly steam power — to the working of the ship under 
 canvas. 
 
 •'All these matters have had to be considered by us in providing for 
 the deck services of steam and sailing ships respectively, and so con- 
 sidered as to deal fairlj'- with existing ships in view of the modifica- 
 tions of sail power which so many of them, both sailers and steamers, 
 are even now undergoing; at the same time we have to avoid, so far 
 as possible, the discoui'ageraent of further economies of labor in the 
 mercantile marine. On the whole, we have come to the conclusion 
 that it is best to keep sailing ships and steamers altogether distinct in 
 the manning schemes which we propose for adoption. 
 
 ' ' There are those, we observe in passing, who regard the discour- 
 agement of labor-saving improvements as so inevitable and so serious 
 consequences of State control over manning as to oppose themselves 
 absolutely to any government control of manning whatever. We do 
 not for a moment conceal from ourselves that some risk of delaying 
 the further improvements of nautical systems and appliances must be 
 run. But we hold that the proper method of reducing this risk to a 
 minimum is to keep the controlling authority up to date as nearly as 
 may be. 
 
 ******* 
 
 " Sailing ships are now but rarely employed in carrying passengers, 
 and in all, except the very smallest, there will always be a sufficient 
 crew to secure three hands in each watch for taking the helm and the 
 lookout and providing the spare hand, and therefore to insure the 
 safety of other ships. Collisions between sailing ships are compara- 
 tively rare, for as a rule they do not approach each other at great 
 speed; and, when it is necessary to get out of danger's way, they 
 maneuver quickly with the assistance of their sail power. When they 
 meet steamers, it is always the duty of the latter to get out of their 
 way. This comparative immunity from collision and consequent com- 
 parative security from one cause of loss of ships is partly counter- 
 balanced, however, by other considerations, as we shall presently see. 
 
 "The difficulty of framing a manning scheme for sailing ships is, 
 however, much greater than it is in the case of steamers. Besidle the 
 bridge, the wheel, and the lookout, there are duties to be performed 
 which are at times excessively light, and at other times as excessively 
 heavy. A ship may have foul weather throughout her voyage, with 
 
614 HEABINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 constant hard work for the crew; or, on the other hand, she may have 
 a prosperous run for months Avith scarcely any work for the crew, but 
 at almost the last moment may experience a sudden exigency which 
 casts the fate of the ship upon the ability and smartness of the crew in 
 handling sails. Ships should be manned with some regard to such 
 emergencies. 
 
 "Another difficulty presents itself in the fact that different ship- 
 owners sail their ships upon different systems. Some are content to 
 make comparatively slow, and therefore long voyages, and in this case 
 their officers reduce sail leisurely' when the necessity for doing so seems 
 about to arise, and seldom or never carry on to the full extent of the 
 vessel's capability, so that a less number of seamen suffice than when 
 the owner's object is to make a very rapid passage, in which case it is 
 usual to crowd on all the canvas that can be carried, and to keep it set 
 as long as is possible without endangering the spars. 
 
 " Notwithstanding the fact that the number of seamen in sailing ships 
 has been greatly diminished of late years — say, during the last forty 
 years — owing to the general abandonment of studding sails ajad royals, 
 the introduction of double-topsail yards, of patent windlass'es, and of 
 various other labor-saving appliances, and although it is certain that 
 from these causes there has been a nearer approach to equalization of 
 the numbers of men carried in ships of similar tonnage, there still 
 remain considerable differences in the demands for seamep apart from 
 the question of size, especially when the nature of the voyages to be 
 performed is brought into view. 
 
 "Having regard to all these considerations, we should have been 
 glad to have still left this branch of the question wholly to the discre- 
 tion of shipowners; but the evidence before us has exhibited so many 
 examples of extremely low manning, as compared with that of other 
 vessels, that it is impossible to regard the existing system of perfectly 
 arbitrary manning as consistent either with safety or with a due regard 
 to the well-being of British seamen. It has, therefore, become our 
 duty to offer recommendations and to frame a manning scheme for sail- 
 ing vessels." 
 
 To show that undermanning exists in this country as well as in Eng- 
 land you only have to look at the Commissioner of Navigation's report 
 for the year ending June 30, 1903, to illustrate. 
 
 The schooner Alumna, 696 tons gross, North Bend, Oreg., carries 
 11 men exclusive of the master; the schooner Addie M. Lawrence, of 
 Bath, Me., 2,807 tons gross, carries 12 men exclusive of the master. 
 
 Representative Minor. What is the rig of that vessel; is she a fore- 
 and-after? 
 
 Mr. Fraziee. Yes, sir. 
 
 Representative Minor. She carries 11 men? 
 
 Mr. Fraziee. Yes, sir. 
 
 Representative Minor. What trade is she engaged in? 
 
 Mr. Fraziee. The coasting trade. 
 
 Representative Minor. You say she is a fore-and-after? 
 
 Mr. Feaziee. Yes, sir. 
 
 Representative Minor. Has she hoisting engines, donkeys, etc. ? 
 
 Mr. Frazier. I will not say as to that. 
 
 Representative Minor. That is very important. 
 
 Mr. Frazier. I will give you some other instances where I know 
 the vessels. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 615 
 
 The schooner S. G. Wilder, 604 tons gross, Port Blakeley, Wash., 
 carries 11 men exclusive of the master; the schooner S. O. H'asJcdl, 
 681 tons gross, of Millbridge, Me., carries 7 men exclusive of the 
 master, and the schooner Edwwrd E. Briery, of Bath, Me., carries 
 the same number, 7 men. 
 
 Kepresentative Minor. Is it not a fact that some of those vessels 
 carry more men than others for the purpose of loading, using the 
 crew for loading instead of using dockwallopers, as they call them? 
 
 Mr. Frazier. Out on the California coast? 
 
 Representative Minor. Anywhere. 
 
 Mr. Frazier. On this coast I do not know of any vessel which 
 carries men for loading a vessel. 
 
 Representative Minor. Does not the crew help? 
 
 Mr. Frazier. No; they seldom, if ever, handle cargo on this coast. 
 
 Representative Minor. Occasionally they do, I hear. 
 
 Mr. Frazier. If they do, it is down in the West Indies. They may 
 attend to the guy on an ice vessel and push the ice along. 
 
 Senator Mallort. What inference do you draw from the facts you 
 are presenting? 
 
 Mr. Frazier. That there is absolutely no system of manning. Here 
 is the 8. G. Haskell, 681 tons gross, a three-masted steam schooner. 
 She carries 7 men. The Edward E. Briery, of something over 1,600 
 tons, carries the same number of men. 
 
 Senator Mallory. Has she steam ? 
 
 Mr. Frazier. Both have steam and both have the same rig. 
 
 Mr. Fields S. Pendleton. Do you say that the Briery carries the 
 same number as the Haskell? 
 
 Mr. Frazier. According to the Commissioner's report she does. 
 
 Mr. Pendleton. That is absolutely incorrect. I know something 
 about the 8. G. Haskell. 
 
 Mr. Frazier. I am taking it from the official report of the Com- 
 missioner of Navigation. 
 
 Mr. Daniel S. Emery. I own a part of the Haskell. 
 
 Representative Minor. I will ask you, then, whether this statement 
 is correct. 
 
 Mr. Emery. No, sir. 
 
 Mr. Frazier. I took the statement from the report of the Com- 
 missioner of Navigation. 
 
 Representative Minor. Printers -often make mistakes. 
 
 Mr. Frazier. 1 was quoting that report. 
 
 The Chairman. Proceed, Mr. Frazier. 
 
 Mr. Frazier. In the case of the Haskell and the Briery it means a 
 cook, 2 mates, and 4 able seamen, leaving 1 mate and 2 able seamen of 
 the watch, the mate alone on deck when the wheel and the lookout are 
 manned. The simplest work will require the calling of the man off 
 the lookout, and to take in even the small sails the watch below must 
 be called. The Haskell and the Briery use steam for hoisting their 
 sails, but steam can not reef or take in sail at sea during bad weather. 
 Human intelligence, skill, and adaptability must in such cases be the 
 safeguards. 
 
 With reference to the question of inefficiency of seamen, the same 
 report, after recommending the issuance of continuous certificates of 
 service, says: 
 
616 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 '^ AVe arc of opinion that the recognition of such certificates would 
 adequate!}^ protect the qualified British seaman from unfair and unde- 
 sirable competition, and would, without unduly interfering with the 
 employment of foreigners or boys, insure the proper manning of ships 
 in so far as the qualifications of the individual members of the crew 
 ;ire concerned. The obligation to carry a certain number of A. Bs. 
 or their equivalents in every ship, and the permission to substitute 
 >)oys, apprentices, or ordinary seamen for a certain proportion of 
 A. Bs. would, moreover, afford a solution of the vital question as to 
 the supply of British seamen. It would, indeed, be incorrect to say 
 that there is a lack of seamen at the present time, the supply, such as 
 it is, being greater than the demand; but the men offering are some- 
 times little better than a rabble, and the committee believe that the 
 classification of seamen in the manner suggested is absolutely needed 
 to prevent the employment of tramps and loafers on work for which 
 they are not fitted. Such classification would raise the tone of British 
 seamen, who would feel that there is some advantage to be derived 
 from service and qualification, and would continue in the sea service 
 instead of abandoning it at the first opportunity." 
 
 TO PROHIBIT THE EMPLOYMENT OF CHINESE ON AMERICAN VESSELS. 
 
 A bill has been introduced in the House of Representatives by the 
 Hon. Edward J. Livernash, of California, known as H. R. 12230, to 
 prohibit the employment of Chinese on board of American vessels. We 
 most respectfully submit that in asking for the passage of this measure 
 that we are simply asking for the same protection against the "heathen 
 Chinee" as has been accorded other workingmen on shore; and apart 
 from the protection of our labor, is it a good policy to train alien sea- 
 men that can not become citizens? If this policy is to be pursued, 
 where will the nation draw from in time of a national need? It has 
 been claimed that the white man is unable to stand the heat in the trade 
 to China. We stand the heat in going from New York to River Plate 
 and Rio, crossing the Equator; we stand the heat in the trade between 
 San Francisco and Australia again crossing the line. I herewith sub- 
 mit the bill and ask that you give it your consideration. 
 
 [H. R. 12230. Fifty-eighth Congress, secoad session.] 
 
 ■A BILL To prohibit the employment aboard vessels holding American register of 
 Chinese persona not entitled to admission to the United States. 
 
 Be it enacted hy the Senate and House of Representatives of the 
 United States of America in Congress assemhled, That from and after 
 the passage of this Act it shall be unlawful for any vessel holding an 
 American register to have or to employ in its crew auy Chinese person 
 not entitled to admission to the United States, or into the portion of 
 the territory of the United States to which such vessel plies; and any 
 violation of this provision shall be punishable by a fine not exceeding 
 two thousand dollars. But said penalty shall not accrue in the case 
 of any such vessel which shall suffer the loss of a portion of her crew 
 by reason of distress or stress of weather in any foreign jurisdiction or 
 port and shall be compelled thereby to employ Chinese seamen to com- 
 plete her complement of officers and men: Provided, That to relieve 
 from said penalty in such case it shall be shown to the satisfaction of 
 the appropriate officer of the United States that in such foreign juris- 
 diction or port no seamen other than Chine.se were obtainable, and that 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 617 
 
 every such Chinese seaman was discharged from the service of such 
 vessel immediately upon the arrival thereof at the first port where 
 seamen other than Chinese could be obtained, and that if so discharged 
 at any port under the jurisdiction of the United States no such Chinese 
 seaman was permitted to depart from such vessel, but that each such 
 Chinese seaman was forthwith transported as a passenger on such \'es- 
 sel, and at the expense thereof, to a foreign port, and that no such 
 Chinese seaman did reenter the service of such vessel after such 
 discharge. 
 
 Sec. 2. That any vessel holding an American register and directly 
 and regularly competing for freight and passenger or freight or pas- 
 senger traffic with any vessel or vessels holding foreign register and 
 regularly employing Chinese seamen as a majority or more than a 
 majoi'ity of crew, shall, for each voyage from and to a port of the 
 United States, be paid, out of any moneys in the Treasurj"- of the United 
 States not otherwise appropriated, a sum equal to the difference between 
 the wages actually paid to her seamen and the ruling wages which 
 would nave been paid for corresponding service by Chinese seamen, 
 said sum to be computed by the appropriate officer of the United States. 
 
 Sec. 3. That "tne appropriate officer of the United States," within 
 the meaning of this Act, is that officer who is appointed for the desig- 
 nated service by the Secretary of Commerce and Labor of the United 
 States. 
 
 Sec. 4. That when the officer designated by the said Secretary of 
 Commerce and Labor to make the computation mentioned in section 
 three shall have made such computation the award shall be final and 
 not subject to i-eview by the judicial branch of the Government of the 
 United States: Provided, That an appeal from said award may be 
 made on behalf of the vessel concerned, or by any officer of the Depart- 
 ment of Commerce and Labor on behalf of the United States, to the 
 said Secretary of Commerce and Labor, within ninety days after the 
 said award. 
 
 Sec. 5. That the said Secretary of Commerce and Labor shall fix 
 the time and manner of payments hereunder, prescribe the vouchers, 
 with forms of account and verifications upon which such payments 
 shall be computed and made, and shall prescribe whatever regulations 
 may be necessary to carry into effect the provisions of this Act. 
 
 Sec. 6. That this Act shall take effect sixty daj's after its passage. 
 
 The Chairman. We had before the Commission to-day a shipowner 
 who has a line of ships on the Pacific coast which he is struggling to 
 maintain, and he said that if he could not use Chinamen he would have 
 to surrender immediately. Are you in favor of that? 
 
 Mr. Frazier. I can not see why he should surrender. 
 ' The Chairman. His competitors employ Chinese labor. 
 
 Mr. Frazier. All the American ships, 1 understand — the Pacific 
 Mail Line and all those boats trading between the Orient and the Cali- 
 fornia coast — do use Chinese. 
 
 The Chairman. You want to prohibit them from using Chinese? 
 
 Mr. Frazier. Yes, sir; most undoubtedly. 
 
 The Chairman. This shipowner says that he could not sail his ship 
 in competition with the other ships, which do employ Chinese labor, 
 if he is compelled to do what j^ou and Mr. Livernash ask. 
 
 Mr. Frazier. I do not believe that shipowner would submit to it if 
 Mr. Hill's ships were also allowed to carry Chinese. 
 
618 HEAKINGS BEFORE THE MERCHANT MABINE COMMISSION. 
 
 Representative Humpheet. Mr. Hill's ships are not running. He 
 referred to the British line — the Empress line. 
 
 Senator Lodge. The British and Japanese lines. 
 
 Mr. Fraziee. There are some other American ships that belong to 
 the Pacific Ooast Steamship Company, flying the American flag, which 
 carry Chinese. Chinese were brought from China on an Engnsh ship 
 and put aboard of this ship to take her out of San Francisco. 
 
 The Chairman. Those ships which are in competition with the 
 American line are employing Chinese labor. Now, you say the 
 American line shall not employ Chinese labor. That would put 
 the American line at a great disadvantage; and, as Mr. Winsor said, 
 it would put his ships out of commission. Are you in favor of still 
 further destroying the American merchant marine? 
 
 Mr. Feaziee. I do not want it destroyed, but I want the sailor 
 protected. I understand that this Commission was appointed for the 
 purpose of devising some means of building up the merchant marine. 
 
 The Chaieman. That is correct. 
 
 Mr. Feaziee. And also protecting the sailor. I am here represent- 
 ing the sailor. 
 
 AMEEICAN AND CHINESE WAGES. 
 
 Senator Malloet. Do you know the difference between the pay of 
 Chinese and the pay of Swedes or Norwegians or Italians or Portu- 
 guese ? 
 
 Mr. Feaziee. In the island trade out of California, on deck the pay 
 is $35; in the fire room |46, for the Caucasian; for the Mongolian, for 
 firemen, I think about |7, and for the Chinaman, I think, it is about 
 the same thing. 
 
 Senator Malloet, Then the difference is as between $7 and $35 ? 
 
 Mr. Frazier. I think that is right. I would not say those are the 
 exact figures, but I think they are very nearly correct. You under- 
 stand the Chinese are not paid in United States money. They are 
 paid in Mexican dollars. 
 
 Senator Mallort. That makes it still less ? 
 
 The Chairman. About $3.50. 
 
 Mr. Frazier. No; my figures were in American dollars. 
 
 Senator Lodge. They get $14 to |15 Mexican. 
 
 Senator Mallort. A steamship of 7,000 tons would probably have 
 100 men in her crew, would she not? 
 
 Mr. Frazier. I do not know much about steamships. 
 
 Senator Mallort. I mean if she was a passenger vessel. 
 
 Mr. Fraziee. I understand they carry from two to three Chinamen 
 where they carry one white man. 
 
 Senator Malloet. I think that has been in evidence before. Do you 
 not think it would handicap American ships very much to require 
 them to employ seamen at |35 a month when their British and Jap- 
 anese competitors are paying only |7 a month? 
 
 The Chairman. And receiving a subsidy in addition. 
 
 Representative Minor. And receiving a subsidy too. 
 
 Mr. Frazier. Youwill have to excuse me. 1, as a trade unionist, 
 never sought to look into mj- employer's business. I always regarded 
 him as being able to do that himself. 
 
HEAEINGS BEFORE THE MERCHANT MARINE COMMISSION. 619 
 
 Representative Minor. You do not want to knock j^our employer out ? 
 
 Mr. Frazier. No, sir; I do not want to knock him out. If my 
 employer sees fit to explain his business to me, all well and good. If 
 not, I am not going to stick my nose in. I have found enough to do 
 to attend to my own business. 
 
 EFFECT OF CHINESE EXCLUSION. 
 
 Senator Mallory. We are after facts to enable us to rehabilitate 
 the merchant marine of the United States. We can readily see that 
 we can in certain lines do things which may benefit the merchant 
 marine, but in doing them we may hurt other citizens of the United 
 States very much. If we draw a dead line and say that no Chinaman 
 or Mongolian or any man of dark skin or yellow skin shall be allowed 
 to be employed on a vessel flying the American flag, while it may give 
 employment to some American sailors, it may possibly run out of 
 commission all the ships we are trjdng to put into the business. We 
 are trying to put ships in business. 1 merely ask you these questions 
 because I should like to have any light you can possibly throw on it. 
 
 Mr. Frazier. I do not know that I can throw light on that subject. 
 I believe the shipowner would be the best man to answer those 
 questions. 
 
 Senator Mallort. A shipowner this morning told us it would kill 
 his business if such a thing were done. 
 
 Mr. Frazier. I am here as an American sailor asking for the same 
 protection that you give the American mechanic ashore. You do not 
 allow the Chinese to come into the country and compete with the 
 mechanic. We are asking for the same privilege. 
 
 The Chairman. No; neither do we allow British or French or Ger- 
 man manufacturers to come here and employ Chinese labor on land. 
 You must bear that in mind. But they do employ such labor on the 
 sea in competition with American ships. 
 
 Representative Humphrey. I should like to ask you this question, 
 because it is a practical one and one in which the section of country 
 which I represent in the House is directly interested. We have this 
 condition of affairs upon Puget Sound. We have the Boston Steam- 
 ship Company sailing vessels from there to the Orient. Up to the 
 time of the war they were in direct competition with a line of Japanese 
 steamers. That line of Japanese steamers was subsidized to the extent 
 of about $325,000. Directly on the way to sea, at Vancouver, the 
 American Line comes in competition with the Empress Line, subsi- 
 dized to the extent of $300,000 annually. Each of those lines employs 
 Chinese labor on its vessels. 
 
 The Boston Steamship Company, through its president, who made a 
 statement to us to-day, has stated that if compelled to employ Ameri- 
 can labor, such as that bill contemplates, it would either have to go 
 out of business or place its line under a foreign flag. 
 
 Mr. James J. Hill made the same statement, if he was correctly 
 quoted — that if he is compelled to employ American labor on the ves- 
 sels which he has already constructed, and one of which 1 understand 
 is on the way there to go on this line, or soon will be there, he will 
 have to put them under a foreign flag. 
 
 The question that confronts us is this: Is it better to leave those 
 ships under the American flag, manned by Chinese labor as they are 
 
620 HEAKINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 to-da}-, or to pass this bill of which j'ou speak and compel them to go 
 under another flag and still be operated by Chinese labor? The ques- 
 tion is, where will the American people be benefited by that change of 
 flag when it will not change the crew? That is the practical question 
 which I should like to have you explain, if you have any light upon 
 it, because I am interested in the American seamen, and 1 am also 
 interested in the American merchant marine. That is the condition 
 which confronts us to-day at Puget Sound. 
 
 Mr. Feaziee. I do not know that I have much light on the matter, 
 Mr. Humphrey. This bill was introduced in order to protect the 
 American seamen from the competition of Chinese labor. 
 
 Eepresentative Humphrey. I know about it. 
 
 Mr. Feaziee. I, as an American citizen 
 
 Eepresentative Humphrey. When Mr. Livernash introduced the 
 bill, I became familiar with it, and 1 was confronted with this proposi- 
 tion, that to support that bill meant simply a change of flag without 
 benefit to anybody in this country. 
 
 Senator Lodge. It would not protect American seamen. 
 
 Eepresentative Humphrey. It would not protect American seamen, 
 but would simpl}' change the flag on those Pacific coast vessels. So, 
 applying it to our section, I do not see where it can be of advantage 
 to anybody, and I can see where it would be a disadvantage. 
 
 Senator Lodge. These American ships carry a certain number of 
 American officers and seamen anyway, although they employ Chinese. 
 
 Eepresentative Humphrey. Yes. 
 
 Mr. Frazier. The American ships have to carry American officers. 
 
 Eepresentative Humphrey. If you change the flag, you would do 
 away with that and would not benefit the American seamen in the 
 least, so far as 1 can see. 
 
 Mr. Feaziee. I am not so familiar with conditions on the Pacific 
 coast as I might be. 
 
 The Chairman. That is the only section of the country to which 
 Mr. Livernash's bill applies. 
 
 Mr. Frazier. Yes; I guess it is. We have no Chinese on this side 
 yet. 
 
 Senator Mallory. Still the American sailor encounters the rivalry 
 of the sailors of all the nations of the world. 
 
 Mr. Frazier. Yes. 
 
 Senator Mallory. So far as concerns seamen, you can ship any 
 nationality you please aboard an American ship. 
 
 Mr. Frazier. But all those with whom we come in competition on 
 this side are eligible to become citizens. 
 
 Senator Mallory. But they do not do it. 
 
 Mr. Frazier. Oh, yes; a great many of them do; not all. The 
 Cape Verde seamen do not become American citizens to any great 
 extent. The Northern Europeans do. 
 
 towing of barges at sea. 
 
 One of the greatest menaces on the Atlantic coast is the towing of 
 barges. These vessels themselves are simply floating coffins in a great 
 many instances. No inspection is x-equired. They carry very small 
 and incompetent crews, the most of the time the tow being a mile to a 
 mile and a quarter in length. In foggy weather the master of the tow- 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 621 
 
 boat is unable to see the last barge, and half the time he does not 
 know if has still got it or not. There have been two bills introduced 
 in the last Congress, H. R. 14861, by the Hon. William Randolph 
 Hearst, prohibiting the towing of more than one barge at one time. 
 Another bill introduced during the last session of Congress, S. 3861, 
 by the Hon. Mr. Perkins, provides for the inspection of barges. It 
 seems to us that there should be no difference made between the sail- 
 ing vessel and the barge, and therefore we ask that you give consider- 
 ation to these two measures. 
 
 [H. R. 14861. Fifty-eighth Congress, second session.] 
 A BILL To protect life and property at sea. 
 
 Be it enacted hy the Senate and House of Rem^esentatives of the United 
 States of America in Congress assembled, That the towing at sea over 
 a distance of fifty miles or more by any steamer at one time of more 
 than one barge or vessel incapable of being properly managed by her 
 own crew under her own steam or sail is hereby declared to be unlaw- 
 ful unless such towing is for the purpose of bringing vessels or barges 
 in distress into safety. 
 
 Sec. 2. That any steamer which, or any master or owner who, shall 
 violate this Act shall, upon conviction thereof, be fined not less than 
 five hundred dollars nor more than one thousand dollars for each barge 
 or vessel towed in violation of the provisions hereof. 
 
 Sec. 3. That it is hereby made the duty of collectors of customs to 
 enforce this Act, proceeding in each case through the United States 
 district attorney of the district wherein the offending vessel arrives. 
 
 [S. 3861. Fifty-eighth Congress, second session.] 
 
 A BILL To provide for the inspection of certain seagoing sail vessels and barges, 
 and to protect life and property at sea. 
 
 £e it enacted iy the Senate and House of Representatives of the United 
 States of America in Congress asxeinbled. That the owner of any sea- 
 
 foing sail vessel or seagoing barge of the United States of one hun- 
 red gross tons or over and over twenty years of age shall, at least 
 once in every year, apply for the inspection of the hull of said vessel 
 by the local inspector of hulls; and it is hereby made the duty of said 
 inspector to inspect such vessel. If the inspector is satisfied that the 
 hull of the vessel is suitable for the service in which she is to be 
 employed, has suitable accommodations for the crew, and is in a con- 
 dition to warrant the belief that she may be used in navigation with 
 safety to life, he shall issue a certificate of inspection in a form to be 
 prescribed by the Secretary of Commerce and Labor. 
 
 Sec. 2. That a register, enrollment, or license, clearance, or other 
 paper shall not be issued by any collector or other chief officer of cus- 
 toms to any vessel described in section one unless at the time said 
 vessel has in force a certificate of inspection as provided in section one. 
 If any such vessel shall be navigated without such certificate of inspec- 
 tion the owner shall be liable to a penalty of five hundred dollars for 
 each offense. 
 
 Sec. 3. That this act shall take effect on and after Julj^ first, nine- 
 teen hundred and four. 
 
 Senator Mallory. There is another point in connection with barges. 
 
622 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Is it not a fact that most of the crews on barges are landsmen who do 
 not know anything about seamanship ? 
 
 Mr. Frazier. Yes, sir. 
 
 Senator Mallort. I know I have had complaint made to me, down 
 in the Gulf, where they do some towing, that if a hawser breaks in 
 the seaway, as a rule the men who are on the barges, which are very 
 underhanded, that is, have a very small number, are not able to under- 
 stand the orders from the tugboat in order to pick up the hawser and 
 make it fast. 
 
 Mr. Frazier. And if they try to tie it, they would tie a granny 
 knot. 
 
 CONSULS IN foreign PORTS. 
 
 I wish to draw your attention to the many abuses that are carried on 
 in foreign ports by the consuls. I will give you two instances. In the 
 early part of 1899 a seaman was discharged from an American bark, 
 James A. Wright^ in Buenos Ayres, on account of injuries received 
 aboard the vessel. After coming out of the hospital he was compelled 
 to go home by steamer, and his passage was deducted from his wages, 
 in clear violation of the statutes. He afterwards recovered, but had 
 to go to the courts to do so. 
 
 In 1903, two seamen, Anthony Nelsen and Edward Jorgensen, shipped 
 on the schooner Annie August 26, and while in St. Thomas had some 
 trouble with the master, who went to the consul and had the men 
 arrested. The men were placed in prison and i-emained there for some 
 seventy-two days, when they were sent to New York. They there 
 entered suit against the master for false imprisonment. The consul's 
 statement is on file in New York, in which he states that he had inves- 
 tigated the case and had examined all the witnesses, except the defend- 
 ants, and found that the men were guilty of an assault on the master. 
 We do not want any special privileges, but we would like to be on an 
 even footing with the master when accused or in dispute, either at the 
 consul's office or the shipping commissioner's. 
 
 I herewith submit a copy of Consul Christopher Payne's certificate. 
 
 U. S. Consulate St. Thomas, Danish "West Indies, 
 
 September ^Ii, 1903. 
 
 I hereby announce the findings made by me as U. S. consul of the 
 District of St. Thomas, D. W. I., on this the 24th day of September, 
 1903, in the case of T. J. Grinn, master in command of the schooner 
 Annie, of Rockport, Me., now in this port, v. A. Nelson and E. Jor- 
 genson, sailors and members of the crew of the above-named schooner 
 Annie. After an investigation made by a careful examination under 
 oath of the officers and crew of the schooner Annie, except Nelson 
 . and Jorgepson, I find, from the evidence in this case, that A. Nelson 
 and E. Jorgenson are guilty of flagrant insubordination and have mani- 
 fested a spirit of lawlessness -which would endanger the personal safety 
 both of the master and part, at least, of the crew, should the said 
 A. Nelson and E. Jorgenson be retained on the schooner as part of the 
 crew. I have therefore ordered the discharge from the service of the 
 schooner as sailors the said A. Nelson and E. Jorgenson. I have fur- 
 ther ordered that they, the said A. Nelson and E. Jorgenson, be kept 
 in the custody of the civil authorities of the city of St. Thomas until 
 such time as they can be sent to the port at New York City to answer 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 623 
 
 to the charges preferred against them by T. J. Grinn, master of the 
 schooner Annie^ a copy of which is herewith appended and marked 
 Exhibit A. 
 
 Respectfully submitted. 
 
 [seal.] Chbistopher H. Payne, 
 
 U. S. Cdftsid. 
 
 Senator Lodge. Do you think it would be a good thing for the 
 United States shipping commissioner to have the right to receive 
 deposits of seamen's wages? 
 
 Mr. Fkaziek. Yes, sir. 
 
 Senator Lodge. So that he could remit them to their families? 
 
 Mr. Fkazier. Yes, sir. 
 
 Senator Lodge. Or hold the money for them in the nature of a sav- 
 ings bank? 
 
 Mr. Fraziek. Yes, sir; I should like that very much. It would 
 relieve me of a great responsibility in my office. They deposit with 
 me in the office here in Boston, when I am here, on an average of $1,000 
 a month, sometimes. 
 
 The Chairman. You commenced your life as a seaman on board a 
 British vessel? 
 
 Mr. Frazier. Yes, sir. 
 
 The Chairman. Then what? 
 
 Mr. Frazier. Then, after I became efficient, I went on an American 
 ship in the coastwise trade. 
 
 The Chairman. Have you been on American ships ever since? 
 
 Mr. Frazier. Yes, sir. 
 
 The Chairman. If these abuses exist in the American service, why 
 did you not engage in the foreign service? 
 
 Mr. Frazier. 1 did not care to go in the deep-water trade; I pre- 
 ferred coastwise trade. 
 
 The Chairman. That is a sufficient reason, very likely. 
 
 Mr. Frazier. I have never been guilty of going in an American deep- 
 water ship. 
 
 The Chairman. Of course, then, you know nothing, of your per- 
 sonal knowledge, as to the cruelties alleged to be imposed upon seamen 
 by American shipmasters. 
 
 Mr. Frazier. I was never on an American deep-water ship. 
 
 The Chairman. So what you have testified to here to-day is hearsay? 
 
 Mr. Frazier. They are matters of record. 
 
 The Chairman. They are the statements of others, or hearsay evi- 
 dence. 
 
 Mr. Frazier. And matters of court record. 
 
 Representative Minor. Do you live in Boston ? 
 
 Mr. Frazier. Yes, sir. 
 
 Representative Minor. Do they have any trouble here between the 
 Sailors' Union and the nonunion sailors? 
 
 Mr. Frazier. Last winter there was formed an association of the 
 captains and owners. I imagine they formed themselves into what 
 they called the American Seamens' Federation — an organization run by 
 shipowners for the benefit of seamen; and the first effort they made 
 was to reduce our wages, which we resisted. 
 
 Representative Minor. That is not quite the point. That does not 
 involve the relation of union with nonunion sailors. I am speaking 
 of sailors. 
 
624 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Mr. Feazier. We never have any trouble with the nonunion sail- 
 ors themselves. Our trouble has been with the shipowners. 
 
 Representative Minor. Does the union object to nonunion men 
 shipping aboard those vessels ? 
 
 Mr. Feazier. No. 
 
 Representative Minoe. There is no objection? 
 
 Mr. Feazibe. No. In fact, we ship them. 
 
 TREATMENT OF NONUNION SAILOES. 
 
 Representative Minoe. In New York it was stated that the sailors' 
 union had a yacht of some kind, or some power boat, which they used 
 for the purpose of boarding vessels that were lying out at anchor in 
 the harbor, to take off nonunion crews which a vessel had shipped, 
 and that considerable trouble had arisen therefrom. Do j^ou know 
 anj^thing about that? 
 
 Mr. Frazier. I can speak better of Boston. We have a steam 
 launch here. 
 
 Representative Minor. What do you use it for ? 
 
 Mr. Frazier. To persuade men to leave vessels. They are shipped 
 at underwages. 
 
 Representative Minor. Do you ever take them off? 
 
 Mr. Frazier. Not by force. 
 
 Representative Minor. Have any of your cases ever gotten into 
 court? 
 -Mr. Frazier. Yes, sir; there is an injunction against us here now. 
 
 Representative Minor. To what effect? 
 
 Mr. Frazier. To prevent us from persuading men to leave a vessel. 
 
 Representative Minor. ' ' Persuading ? " 
 
 Mr. Frazier. It is a law in this State. I did not know it, though, 
 until it was sprung on me. 
 
 Representative Minor. Out West they used to persuade men at the 
 point of a revolver. 
 
 Mr. Frazier. We do not do anything of that kind. We have never 
 yet been accused of anything of the kind. 
 
 Representative Minor. What are your methods of persuasion? 
 
 Mr. Frazier. Asking a man not to go aboard a vessel in the coast- 
 wise trade for less wages than a certain sum. 
 
 Representative Minor. Have any union members been imprisoned 
 for violating the laws in this persuasion business ? 
 
 Mr. Frazier. Yes, sir; there were three of them arrested on dif- 
 ferent occasions for asking men on the sidewalk not to go aboai-d a 
 vessel. They were put in prison for that. That is the State law. 
 
 Senator Mallory. 'Had the men already been shipped? 
 
 Mr. Frazier. Yes, sir; but the man who asked them to leave the 
 vessel did not know they were shipped. 
 
 Representative Minor. Have you personally had any trouble of this 
 kind? 
 
 Mr. Frazier. Not personally. 
 
 Representative Minoe. You are not yourself under bond? 
 
 Mr. Feaziee. No, sir. 
 
 Representative Minor. Do you consider that right? 
 
 Mr. Fraziee. What? 
 
 Representative Minoe. If I am a nonunion man and you are a union 
 man, and I desire to work for the support of my family, my family 
 
HEARINGS BEFOEE THE MEKOHANT MARINE COMMISSION. 625 
 
 needing it, do you think it is proper, because you are a union man, to 
 go around and prevent my working, by persuasion or otherwise ? 
 
 Mr. Fraziek. No, sir; not to prevent you. But 1 think 1 have a 
 right to say to you, "Mr. Minor, I should like for you not to go 
 aboard that vessel. We are hanging out for such a wage." That is 
 what they were arrested for. 
 
 Representative Minor. Do you put up money to support that man's 
 family if he accedes ? 
 
 Mr. Frazier. Yes, sir; sure. 
 
 Senator Mallort. After a man has shipped, after he has entered 
 into a contract with a master for a voyage and has signed the articles, 
 do you think it is morally right for another man to go to him and try 
 to induce him, for any reason at all, not to carry out his contract? 
 
 A RIGHT TO MORAL PERSUASION. 
 
 Mr. Frazier. Moral persuasion; yes, sir; I think I have that right. 
 
 Senator Mallory. You may have the right. You have the right of 
 free speech, and under our laws you may say almost anything you 
 please that does not damage anybody else. But where you use the 
 right of free speech to the detriment of somebody else, then the law 
 says you must not do it. I do not want to get at the legal aspect, but 
 the moral aspect. I go and pledge myself at a certain time to do cer- 
 tain work, and you, who have no interest in the matter except, per- 
 haps, that you are a union man and I am not, come to me and use such 
 persuasion, such arguments as you can to induce me to violate that 
 contract. Do you tnink that is morally right? 
 
 Mr. Frazier. Yes; I do not see why I nave not a right to protect 
 my wages, my conditions. 
 
 Senator Mallort. It is a question of morals, 1 think, more than 
 anything else. You have a right to do it. 
 
 Mr. Frazier. In the State of Massachusetts I have not even the legal 
 right to do it. 
 
 Representative Minor. Another thought enters my mind, and that 
 is this: The sailors' unions are urging special laws for the government 
 of sailors. There is not a thing a sailor can do or is likely to do as to 
 which they do not want the law to protect him. In fact, they want 
 more law to apply to the sailor for his protection than to any other 
 class on earth. 
 
 Do you regard it as in the best interest of the sailor that such should 
 be the case? Do you believe that it makes good citizens or good sail- 
 ors out of men where they depend wholly upon the protection of the 
 law, and some special law that does not apply to anybody else ? In 
 other words, do you not think it would be just as well to let them 
 rely upon their own responsibility and make their own contracts, or 
 not make them, as they see fit? 
 
 sailors wards of the nation. 
 
 Mr. Frazier. If you would put us under the same laws that apply 
 to the landsman, I do not see why that would not be all right. But 
 sailors have always been considered wards of the nation, if I may so 
 term it, and ever since we have had a vessel in this country we have 
 had laws by which seamen should be engaged and discharged, and pre- 
 scribing what they should eat and where they should sleep and how 
 3a— 04 40 
 
626 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 long they should work. That was the condition always before the 
 sailors' union came into existence. Our first laws, of course, were 
 patterned after the old admiral ty_ laws of Great Britain. Now, if all 
 that was wiped out at one sweep, it would be all right. 
 
 Kepresentative Minor. You think it would be all right? 
 
 Mr. Fkazier. Yes. 
 
 Kepresentative Minor. I think that sailors ought to be more inde- 
 pendent and self-reliant, and I think you can make them so by putting 
 them on a footing with all other working men. I think there are a 
 class of agitators among sailors' unions who work up a lot of trouble. 
 
 Mr. Frazier. There are not as many agitators in the sailors' unions 
 as in some others. We have representative men the same as anybody 
 else. 
 
 Representative Minor. Certainly. 
 
 Senator Mallort. Do you know whether it is a rule in the coastwise 
 trade to ship before shipping commissioners ? 
 
 Mr. Frazier. It is here in the East. It is not so much after you 
 leave Providence. But from Providence on to the eastward the com- 
 missioner's office does practically all the coastwise trade. 
 
 Senator Mallory. At what time do they ship before going aboard a 
 vessel under that practice? 
 
 Mr. Frazier. If they want a crew early in the morning they some- 
 times sign them in the afternoon. 
 
 Senator Mallort. Of the day before ? 
 
 Mr. Frazier. If they want a crew in the morning they sign them 
 in the afternoon before. 
 
 Senator Mallort. What is your idea as to the advisability of giv- 
 ing shipping commissioners the right, subject to appeal, to settle dis- 
 putes as to wages and kindred subjects arising between masters and 
 seamen? 
 
 Mr. Frazier. I think it is a very good idea. I think most of the 
 disputes between masters and seamen are settled before shipping com- 
 missioners; they are when we can get the masters to agree. 
 
 Senator Mallort. Now you have to make an arbitration? 
 
 Mr. Frazier. Yes, sir. 
 
 Senator Mallort. There must be the consent of both parties. Sup- 
 pose Congress should make it obligatory that in every case they should 
 go before a shipping commissioner, who should settle it one way or 
 the other, giving an appeal, say, to the district court? 
 
 Mr. Frazier. I think it would prevent a lot of litigation such as 
 there is now. 
 
 Senator Mallort. As it is now it generally takes about six months 
 to settle in court disputes between masters and seamen ? 
 
 Mr. Frazier. Yes, sir; just about. Sometimes longer. 
 
 Senator Loi)GE. Do you think we ought to have a Plimsoll load 
 line? 
 
 Mr. Frazier. We ought to on the barges. Yes; I think we ought 
 to. 1 think it would be a good thing to have a Plimsoll mark; a good 
 load line mark. I have been on vessels sailing on this coast, and left 
 the vessel out in the middle of the Gulf stream. One especially I 
 remember. If there had been a load line, I would not have left her 
 there. 
 
 Thereupon at 5 o'clock and 20 minutes p. m. the Commission 
 adjourned until to-morrow, Thursday, June 2, 1904, at 10 o'clock a. m. 
 
heaeings before the merchant marine commission. 627 
 
 Rooms of the Chamber of Commerce, 
 
 Boston, Mass., June 2, 190 J/. 
 The Commission met at 10 o'clock a. m. 
 
 Present: Senators Gallinger (chairman), Lodge and Mallory, and 
 Representatives Minor and Humphrey. 
 
 STATEMENT OF JOSEPH M. LEWIS. 
 
 Joseph M. Lewis appeared before the Commission. 
 
 The Chairman. State to the Commission what your present busi- 
 ness is? 
 
 Mr. Lewis. I am port captain for the Boston Steamship Company, 
 the Boston and Philadelphia Steamship Company, and the Boston 
 Towboat Company. 
 
 The Chairman. The Commission will be pleased to hear any view 
 you may have regarding the subject we have in hand. 
 
 Mr. Lewis. Really, I have not prepared any speech. I am simply 
 here to answer any questions that may be put to me. I shall be only 
 too pleased to render any assistance 1 can to the Commission. 
 
 The Chairman. Captain, you have taken an interest, I judge, in the 
 matter of the seamen, as to their condition, and other things connected 
 with their calling? 
 
 Mr. Lewis. 1 certainly have. 1 have had to do with them con- 
 tinually, since first starting to sea in the forecastle myself, up to the 
 present date, covering the last twenty-five years. 
 
 The Chairman. Did you hear the testimony yesterday in reference 
 to the employment of Chinese in the Pacific trade? 
 
 Mr. Lewis. 1 did, sir. 
 
 The Chairman. What have you to say on that point? 
 
 Mr. Lewis. 1 think one of the OTincipal things which caused the 
 Boston Steamship Company and the Towboat Company to employ thftse 
 men was the never-ending complications we had to deal with in regard 
 to labor unions, which are still stronger on that side of the continent 
 than on this side. We find the Chinese a very complete and efficient 
 class of labor. We have no trouble whatever with them. 
 
 The Chairman. Do you think it would be possible to run an Ameri- 
 can line on the Pacific in competition with subsidized foreign lines 
 that employ Chinese crews, if you were prohibited from employing 
 Chinese? 
 
 Mr. Lewis. 1 am thoroughly convinced after our experience that it 
 would not be. 
 
 NO gain to AMERICAN SEAMEN. 
 
 The Chairman. Nor do you think it would be an advantage to Ameri- 
 can seamen if you were forced to put your ships under a foreign flag, 
 when Chinamen would be continued on the vessel as a matter of course? 
 
 Mr. Lewis. The first part of your question 
 
 The Chairman. In other words, do you think it would be to the 
 interest of American seamen to have legislation prohibiting the 
 employment of Chinese on those vessels, which would merely result, 
 as a matter of self -protection, in view of the fact that your competitors 
 employ Chinese, in forcing you to put your vessels under a foreign 
 flag, and under that flag continue to employ Chinese ? 
 
628 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Ml". Lewis. 1 certainly do not. 
 
 The Chaieman. Are there any other matters that you wish to 
 mention ? 
 
 Mr. Lewis. In reference to the ill treatment claimed to have been 
 received at the hands of officers and masters of our American ships, I 
 wish to submit a bill of fare, which on our vessels — the Boston and 
 Philadelphia ships — was adopted in 1903, and is still in force. I 
 will say that it is carried out to the letter. 
 
 The bill of fare is as follows: 
 
 Forecastle hill of fare adopted by Boston mid Philadelphia Steamship Company in 1903. 
 
 
 Breakfast. 
 
 Dinner. 
 
 Supper. 
 
 
 Monday 
 
 Oatmeal. 
 
 Soup. 
 
 Cold meat. 
 
 
 
 steak. 
 
 Koast beef. 
 
 Beef stew. 
 
 
 
 Potatoes. 
 
 Potatoes. 
 
 Bread. 
 
 
 
 Bread and butter. 
 
 Turnips. 
 
 Tea with milk and sugar. 
 
 
 
 Coffee with milk and sugar. 
 
 Bread. 
 Coffee. 
 Dessert. 
 
 Dessert. 
 
 
 Tuesday 
 
 Boiled hominy. 
 
 Soup. 
 
 Cold meat. 
 
 
 
 Pork chops. 
 
 Corned beef and cab- 
 
 Fried potatoes. 
 
 
 
 Potatoes. 
 
 bage. 
 
 Bread. 
 
 
 
 Bread and butter. 
 
 Potatoes. 
 
 Tea with milk and sugar. 
 
 
 
 Coffee with milk and sugar. 
 
 Bread. 
 Coffee. 
 Dessert. 
 
 
 
 Wednesday.. 
 
 Hamburg steak. 
 
 Soup. 
 
 Cold meat. 
 
 
 
 Potatoes. 
 
 Roast beef. 
 
 Beef hash. 
 
 
 t 
 
 Bread and butter. 
 
 Potatoes. 
 
 Bread. 
 
 
 
 Com bread. 
 
 Macaroni. 
 
 Tea with milk and sugar. 
 
 
 
 Coffee with milk and sugar. 
 
 Bread and butter. 
 
 Coffee. 
 
 Dessert. 
 
 Dessert. 
 
 
 Thursday 
 
 Oetmeal. 
 
 Soup. 
 
 Cold meat. 
 
 
 
 Beefsteak. 
 
 Corned beef and cab- 
 
 Fried potatoes. 
 
 
 
 Potatoes. 
 
 bage. 
 
 Bread. 
 
 
 
 Bread and butter. 
 
 Potatoes. 
 
 Tea, with milk and sugar. 
 
 
 
 Coffee with milk and sugar. 
 
 Bread. 
 Coffee. 
 Dessert. 
 
 Prunes. 
 
 
 
 
 
 
 Friday 
 
 Hominy. 
 
 Chowder. 
 
 Cold meat. 
 
 
 
 Fried fish. 
 
 Salt cod, pork scraps. 
 
 Codfish bash. 
 
 
 
 Cold meat. 
 
 Roast beef. 
 
 Bread. 
 
 
 
 Potatoes. 
 
 Potatoes, be^ts. 
 
 Tea, with milk and sugar. 
 
 
 
 Bread and butter. 
 
 Bread. 
 
 Dessert. 
 
 
 
 Coffee, with milk and sugar. 
 
 Coffee. 
 Dessert. 
 
 
 
 Saturday 
 
 Oatmeal. 
 
 Soup. 
 Mutton stew. 
 
 Cold meat. 
 
 
 
 Beefsteak. 
 
 Fried potatoes. 
 
 
 
 Potatoes, com bread. 
 
 Potatoes. 
 
 Bread. 
 
 
 
 Bread and butter. 
 
 Turnips. 
 
 Tea, with milk and sugar. 
 
 
 
 Coffee, with milk and sugar. 
 
 Bread. 
 
 Coffee. 
 Dessert. 
 
 Dessert. 
 
 
 Sunday 
 
 Hominy. 
 
 Soup. 
 
 Cold meat. 
 
 
 
 Beefsteak. 
 
 Corned beef and cab- 
 
 Beef hash. 
 
 
 
 Baked beans. 
 
 bage. 
 
 Baked beans. 
 
 
 
 Potatoes. 
 
 Potatoes. 
 
 Bread. 
 
 
 
 Bread and butter. 
 
 Bread and butter. 
 
 Tea, with milk and sugar. 
 
 
 
 Coffee, with milk and sugar, a 
 
 Coffee. 
 Dessert. 
 
 
 
 oThe coffee, tea, oatmeal, hominy shall have the milk and sugar added in the kitchen. 
 
 The Chairman. Have you known of any instances of unusual cruelty 
 perpetrated upon seamen on American ships? 
 Air. Lewis. I never have. 
 
HEAEINGS BEFORE THK MEEOHANT MAEINE COMMISSION. 629 
 
 WOULD ENCOURAGE BOYS TO GO TO SEA. 
 
 Representative Humphket. What effect do you think it would have 
 upon the American boy going to sea if we should bring about some 
 measure that would cause the merchant marine to be reconstructed? 
 
 Mr. Lewis. I think it would certainly be a stimulant. I have not 
 any doubt that we can get a large percentage, more than we do at this 
 time. We are able even at this time to keep ver3' nearly enough of 
 them in line to advance, according to grade, until they arrive at offi- 
 cers' positions in the coastwise business. But in the foreign trade we 
 are having great trouble in that direction, although we try to stimulate 
 it all we can and to get all the young men we can in the service. 
 
 Representative Humphrey, Do you think if the merchant marine 
 were to be built up so that there would be opportunities for advance- 
 ment held out to the American boy, he would go to sea, as he did in 
 former years? 
 
 Mr. Lewis. I have not the slightest doubt about it. 
 
 STATEMENT OF J. C. ROSS. 
 
 J. C. Ross appeared before the committee. 
 
 The Chairman. What is your present occuspation? 
 
 Mr. Ross. I am pilot commissioner of Boston. 
 
 The Chairman. Captain, I assume that your business brings you in 
 pretty close relation not only with shipowners but with seamen as well. 
 
 Mr, Ross. Not with seamen. 
 
 The Chairman. Not at all? 
 
 Mr. Ross. No; we regulate the pilots, make them and break them, 
 and keep them in place, where they belong, and the like of that, and 
 have nothing to do with the seamen. 
 
 The Chairman. What have you to say in reference to the subject 
 the Commission has under consideration? 
 
 Mr. Ross. That is, the subject of the American merchant marine 
 and its building up? 
 
 THE ONLY WAT A SUBSIDY. 
 
 The Chairman. That is what we are charged to inquire into. Captain. 
 
 Mr. Ross. I can say in a very few words what I have to say on that 
 subject. I believe that the only way is to give a subsidy, the same as 
 was done in 1840, when steam and iron came into use. At that time 
 England went into this thing carefully. Samuel Cunard started the 
 Cunard Line. He was the founder of it. England then gave him, to 
 start with, £60,000 a year to run two ships a month to Boston and 
 Halifax, stopping at Quebec occasionally. They increased it soon 
 afterwards to £90,000. Finalli^ our Congress passed laws giving Mr. 
 Collins, of New York, a subsidy of about $380,000 a year to run 
 to Liverpool; another one of $400,000 to Mr. Mills, of New York, to 
 run to Havre. 
 
 We at that time built up quite a trade; as much so as England did. 
 This went on. As soon as our steamers were started, England increased 
 its subsidy from £90,000— in fact, it raised it from £60,000 to £90,000 
 when Mr. Cunard built his ships, as the ships were larger than the 
 contract called for, which was 1,500 tons, and he built them 2,000 tons. 
 
680 HEARINGS BBPOKE THE MEBOHANT MARINE COMMISSION. 
 
 So his contract price was raised, when the Cunard Line started from 
 New York, to £2i5,000. In that way England went on subsidizing ships 
 all over the world and running all over the world until they paid out 
 about $5,000,000 a year. Our Congress at the same time increased the 
 Collins subsidy to about $850,000 a year. 
 
 Things were going on very nicely in that way until 184:5 or 1850 — 
 in 1850 it was — ^when, of course, the free-trade and free-ship elements 
 came in, and in 1855 the subsidy was taken away from Mr. Collins; 
 rather, they let it lapse. Since then our ■ shipping has been going 
 down — from 1857 until now, when we have but the shadow of an 
 American merchant marine left. I do not see any other way, Mr. 
 Chairman and gentlemen, of getting a merchant marine except by a 
 direct subsidy, the same as England pays. 
 
 ABANDONING FREE SHIPS. 
 
 I am glad to see that a great many of our friends who believe in free 
 ships and have talked it for some years have changed their position, 
 the same as Captain Humphrey, who was here yesterday, has done. He 
 said he was a Democrat and a free trader. I can only say I am a 
 Republican and a protectionist, and I believe in everything that goes 
 with it. The greatest mistake that was made by our people was in 
 1857, when they took away the subsidy from tfie Collins Line and 
 others. The chain is imperfect. Without the subsidy it is of no use. 
 The only way we shall ever have anything in the way of a merchant 
 marine is to do just what England did, and the sooner that is done the 
 sooner we shall have ships again. 
 
 I do not know that there are any further remarks I could make in 
 regard to the matter which would help it along. Perhaps, if I had had 
 more time, I could have given you some statistics. I studied the 
 question for some years, but have dropped it since I have held this 
 position — ten years. I have merely tried to talk it over with some of 
 our friends, like Captain Humphrey, and I notice they are all coming 
 around to our side. 
 
 I believe that is all I have to say on the matter. 
 
 The Chairman. In other words, I assume that your view is that 
 before we can enter into successful competition with foreign steam- 
 ship lines we must in some way equalize conditions? 
 
 MUST EQUALIZE CONDITIONS. 
 
 Mr. Ross. We must equalize conditions — that is it — by pa,ying a 
 subsidy. We do not want any free ships. We want to build our 
 own ships. We do not want any indirect duties or anything of that 
 kind. That is all gone by. That did well enough when they started 
 in England in 1660, about the time of Cromwell and in the time of 
 Charles the Second, when they revised their shipping laws. That was 
 all well enough under the conditions which existed at that time, but 
 everything has changed since then. Our treaties with other countries 
 are such that anything in the way of extra duties of any kind would 
 not work well — that is, I do not think it would. I am giving my 
 opinion of it. 
 
 Representative Minor. Did not the cost of materials for the con- 
 struction of ships during those years have as much to do with our 
 
HEAEIN68 BEFORE THE MEKCHANT MAltllirE COSDtXSSION. B31 
 
 merchant marine as discriminating- duties, when we were building 
 ships of wood, and we could build Siem cheaper than England could ? 
 
 Mr. Ross. Yes, sir. 
 
 Representative Minok. We sold England 400,000 tons of shipping. 
 
 Mr. Ross. We could build ships up to the time of the commence- 
 ment of iron shipping. The great turn in maritime affairs took place 
 from 1812 to 1850-1860, when they began iron shipbuilding, or rather 
 steel shipbuilding. Of course, during our rebellion we had other 
 things added to it. Our ships became very dear. We could not build 
 wooden ships. We have paid as high as $100 a ton. I am not a ship- 
 builder, but I superintended, as shipmaster, a ship. I commanded 
 for years ships in the foreign trade — to India, California, Europe, and 
 those places. I superintended a ship right after the war that cost 
 about $80 a ton. I owned part of it. I also- superintended and com- 
 manded my last ship, the W^illiam H. Lincoln, built at Newburyport, 
 and she cost us a little over $50 a ton. 
 
 THE ENGLISH POLIOT. 
 
 But England, by giving its great subsidies, helped its shipbuilders 
 and owners to produce* so many ships that they cheapened tlieir iron 
 ships, and they took the place of our wooden vessels. The English 
 also insured for less. In San Francisco, for instance, I had my ship 
 there loading wheat, as I have done a number of times. An iron ship, 
 that laid right aside of me, could insure for perhaps 10 or 15 per cent 
 less than I could. All those things worked against us. 
 
 Representative Humphrey. I should like to ask the captain one 
 question. What objection have you to discriminating duties or why 
 do you think they would not bring about the desired result? 
 
 Mr. Ross. 1 do not say they would not bring about the desired 
 results, but it seems to me it is a good deal like this: You are bound 
 in your yacht to a certain buoy. You set your buoy south, and you 
 commence and tack southwest and then you tack southeast and you 
 keep tacking until you get there. You are going around Robin Hood's 
 barn to get at a thing which you can get at directly. The direct sys- 
 tem works well in England. If you would take the history of subsidies 
 in England, which is one of the best things to go by — you gentlemen 
 do not want to listen to that, and I do not care to waste your time 
 doing it — ^you would find it verj"^ instructive. Direct subsidies really 
 would be the best plan. That is my opinion. 
 
 STATEMENT OF AUGUSTUS P. LORING. 
 
 Augustus P. Loring appeared before the Commission. 
 
 The Chairman. State to the Commission your present business. 
 
 Mr. LoRiNG. My business is that of trustee in looking after the 
 affairs of other people, more or less. I make investments for other 
 people, and I am also president of the Plymouth Cordage Company, a 
 company which is naturally interested in shipping, as we make more 
 rope than anybody else in America. 
 
 The Chairman. Are you a shipowner. 
 
 Mr. LoRiNG. Yes, sir; I am a shipowner; that is, I own shares in 
 ships. 1 do not run any ships or do anything of that kind. 
 
632 HEARINGS BEFOBE THE MERCHANT MARHiTE COMMISSION. 
 
 My clients also are more or less interested in shipping, but not in 
 the United States foreign trade, because it is not a profitable trade to 
 be interested in. When my clients wish to invest in shipping, or 
 when 1 invest myself, it is in the coastwise trade or else in an English 
 ship. We do not go into the American merchant marine, because 
 under present conditions it is not a paying proposition. 
 
 It seems to me that there are a great many outs in the situation. 
 In the first place, we can not get our ships built here cheap enough, 
 and in the second place there is not a desire to have ships built. Now, 
 there comes in a certain amount of conflict between the two situations; 
 that is to saj', you have to create the desire for ships before you can 
 make profitable business for the shipyards, and it is idle to protect the 
 shipyards until you get somebody who wants to build ships in them. 
 Either some advantage ought to be given to the shipyards in the way 
 of drawbacks, so that they could build ships in competition with for- 
 eign countries and give us ships cheaply enough for us to run, or else 
 we ought to be able to buy our ships somewhere else. That is to say, 
 we ought to be able to get our ships cheaply enough to make it worth 
 while to put them afloat. After we get them afloat we ought to be 
 able to operate them as reasonably and as cheaply as other countries 
 can. 
 
 The Chairman. So that, in addition to the purchase of ships abroad 
 without any embarrassment, you would favor the repeal of the navi- 
 gation laws? 
 
 A DRAWBACK TO BTJILDEKS. 
 
 Mr. LoRiNG. Either that, or to give some advantage to our ship- 
 yards to enable them to compete and put ships afloat for us as cheaply 
 as they can be put afloat for the English. If there were some draw- 
 back given a builder of Amei'ican ships which would equalize his con- 
 dition with that of the foreign builder, it would attain the same 
 result. 
 
 Senator Lodge. What do you mean by "drawback" in that 
 connection ? 
 
 Mr. LoRiNQ. If, for instance, he could have all his materials free of 
 duty, which I suppose he does now, practically 
 
 Senator Lodge. He has now. 
 
 Mr. LoRiNG. And if he could have something to equalize the differ- 
 ence in the cost of labor, he could put his ships afloat as cheaply as the 
 English do. 
 
 The Chairman. The uniform testimony before this Commission has 
 been that after j'ou get your free ship it is impossible to navigate it in 
 competition with foreign ships in the foreign trade on account of the 
 increased cost of maintenance and the subsidies. 
 
 Mr. Loeing. That is the second heading. I said there were two 
 difiiculties. One is that the ship costs too much in the first place, and 
 in the second place it costs too much to run her. 
 
 tied up in red tape. 
 
 The father of the present navigation laws was Mr. Richard H. Dana, 
 of this city, who, as the Commission probably knows, went around the 
 Horn in a sailing vessel and came back and bound up the shipping 
 business with a lot of red tape from which it has never since escaped. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 633 
 
 1 think, so far as concerns the treatment of sailors on American 
 ships, or at least the reputation, their treatment is no better than on 
 any other ships which are not so tightly tied up as are the American 
 ships. 
 
 The shipowner is tied up by an amount of red tape that makes it 
 almost impossible to handle the crew, and the crew is no better off 
 because he is so tied up. At least that is the reputation they have — 
 that the American crew is not any better off under the present laws 
 than the English crew is, and that it would be better if we were to 
 have a fresh start, wipe those laws off the books and have a sensible 
 set of navigation laws which would enable the shipowner to manage 
 his ship in a rational and business-like way. 
 
 I think there is not any doubt that American capital would go into 
 shipping if it could go into it under conditions where it could see 
 money in the business. While subsidies may be a great aid to lines 
 of steamships, yet the lines are not, it seems to me, the direction in 
 which we wish to develop so much as in the small tramp merchant 
 steamer, which would increase the commerce of the country much 
 more than two or three lines running between stated ports. 
 
 A EEBATE OF DUTIES. 
 
 In that view of the subject, a drawback in the shape of a rebate of 
 duties would do more, to my mind, than a subsidy would to encourage 
 commerce, because it would encourage commerce not only in liners but 
 in small tramp steamers or large tramp steamers which have no fixed 
 route and which would be employed to carry American goods if they 
 could be carried more cheaply in them than in foreign vessels. 
 
 Personally I should like to see a rebate of duties on all goods 
 imported in American vessels, and I should like to see something done 
 either to protect the American shipyard and equalize the cost of build- 
 ing a ship there, or else give us an opportunity to buy ships where we 
 can buy them cheapest. American shipyards are not doing a great 
 deal of business now, and I do not know what business they would 
 lose if we were to buy ships elsewhere. If the merchant marine was 
 started up, and if there was an active demand for ships, there is no 
 doubt that the Americans would get into the business and build ships, 
 whether protected or not. 
 
 The Chairman. Do you not think that if we did adopt the free-ship 
 policy, there would soon be a demand that it should be extended 4o 
 the coastwise trade ? 
 
 Mr. LoEiNG. I suppose there would be, undoubtedly, although the 
 ships for the coastwise trade are not expensive ships. 
 
 The Chairman. No; but if we went abroad to buy ships where we 
 could get them for a much less sum than that for which they could be 
 constructed in this country, and let them go into the coastwise trade, 
 it woidd practically destroy our shipbuilding industry. It is prac- 
 • tically destroyed now, so far as foreign trade is concerned, but the 
 yards are doing a good deal of work in the coastwise business. 
 
 Mr. LoEiNG. Yes, sir; but so far as the coastwise business is con- 
 cerned I expect — this is my theory — to see a great change. I think 
 before long the low-powered steamer is going to take the place of the 
 schooner in the coastwise trade. That is my own opinion. 
 
634 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION, 
 
 ADDITIONAL STATEMENT OF EDWARD C. PLUMMER. 
 
 Edward C. Plummer appeared before the Commission. 
 
 The Chairman. Mr. Plummer, will you please state your relation to 
 this subject? 
 
 Mr. Plummer. I am the attorney for the Atlantic Carriers' Associa- 
 tion, which represents the coasting sail fleet of the Atlantic. I may 
 say that, for twelve years prior to my assuming that position, I made 
 a study at home and abroad of the American merchant marine, the 
 legislation which developed it, the causes of its decline, and I sought 
 for a practicable method of reviving it. 
 
 Mr. Chairman and gentlemen of the committee, I wish to speak for 
 four hundred thousand tons of American-built, American-owned, and 
 American-officered vessels, owned in small shares by people of moder- 
 ate means, scattered all over the United States. And in tne first place, 
 referring to some of the statements which have been made before the 
 Commission daring its hearings in regard to the treatment, the food, 
 the pay, and the accommodations furnished the American seamen, I 
 wish to say that that subject was thoroughly gone into under Mr. 
 Cleveland's last Administration, and in the report of the United States 
 Commissioner of Navigation for 1894 you will find the results detailed 
 and tabulated. 
 
 Of the reports 1 will read just one, which came from Boston, in the 
 Commonwealth of Massachusetts: 
 
 SAILORS PREFER AMERICAN VESSELS. 
 
 "The seamen shipped at this port prefer American vessels. The 
 advantages, they claim, are many. Wages are always somewhat 
 higher, the discipline not quite so severe, and the food on American 
 vessels far superior to that of other nations, and the sailors' quarters 
 or forecastle is larger, more comfortable, and more desirable in all its 
 appointments." 
 
 That is but characteristic of all the replies received; and I wish to 
 add that to my personal knowledge there are no vessels in the world 
 which have the accommodations or furnish the food that our ships do. I 
 desire to say another thing. 1 was a paymaster in the United States 
 Navy, and part of my business was to look after the food supplied the 
 seamen. It is well known that the Navy of the United States feeds and 
 quarters its men better than any other navy, and yet it is an absolute 
 fact, if you compare tables, that to-day you compel us to feed our men 
 on our mei'chant vessels twice as well as you feed the men who go out 
 and risk their lives in defense of the country. I submit that if we are 
 undertaking to build up a merchant marine, we had better not compel 
 the merchant marine to lug any more burdens than it lugs now. I shall 
 ask that the scale of provisions at present in force be inserted in the 
 record. 
 
HEARINGS BEFOEE THE MERCHANT MARINE COMMISSION. 635 
 The scale referred to is as follows: 
 
 Scak of promwns to be allowed and seroed oat to itie crew during the voyage. 
 
 Water quarts. 
 
 Biscuit pound. 
 
 Beef, salt pounds. 
 
 Pork, salt pound. 
 
 Flour pound. 
 
 Canned meat pound. 
 
 Fresh bread pounds. 
 
 Pish, dry, preserved, or fresh pound. 
 
 Potatoes or yams pound . 
 
 Canned tomatoes pound. 
 
 Pease pint. 
 
 Beans pint. 
 
 Rice pint. 
 
 Coffee (green berry) ounce. 
 
 Tea ounce. 
 
 Sugar ounces. 
 
 Molasses pint. 
 
 Dried fruit ounces. 
 
 Pick! es pint. 
 
 Vinegar .■ pint. 
 
 Com meal ounces. 
 
 Onions ounces. 
 
 Lard ounce. 
 
 Buttert ounce. 
 
 Mustard, pepper, and salt sufficient for seasoning. 
 
 4 
 IJ 
 
 'i' 
 
 SUBSTITUTES. 
 
 One pound of flour daily may be substituted for the daily ration of 
 biscuit or fresh bread; two ounces of desiccated vegetables for one 
 pound of potatoes or yams; six ounces of hominy, oatmeal, or cracked 
 wheat, or two ounces of tapioca, for six ounces of rice; six ounces of 
 canned vegetables for one-half pound of canned tomatoes; one-eighth 
 of an ounce of tea for three-fourths of an ounce of coffee; three- 
 fourths of an ounce of coffee for one-eighth of an ounce of tea; six 
 ounces of canned fruit for three ounces of dried fruit; one-half ounce 
 of lime juice for the daily ration of vinegar; four ounces of oatmeal 
 or cracked wheat for one-half pint of corn meal; two ounces of pickled 
 onions for four ounces of fresh onions. 
 
 When the vessel is in port and it is possible to obtain the same, one- 
 and-one-half pounds of fresh meat shall be substituted for the daily 
 rations of salt and canned meat; one-half pound of green cabbage for 
 one ration of canned tomatoes; one-half pound of fresh fruit for one 
 ration of dried fruit. Fresh fruit and vegetables shall be served while 
 in port if obtainable. The seamen shall tave the option of accepting 
 the fare the master may provide, but the right at any time to demand 
 the foregoing scale of provisions. The foregoing scale of provisions 
 shall be inserted in every article of agreement, and shall not be 
 reduced by any contract, except as above, and a copy of the same shall 
 be posted in a conspicuous place in the galley and in the forecastle of 
 each vessel. [Fishing or wnaling vessels or yachts exempt, December 
 21, 1898, sec. 26.] 
 
 Mr. Plummer. How many workmen furnish their own table with 
 fresh fruit whenever it is in the market, or feed themselves 1^ pounds 
 
636 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 of fresh meat every day ? How does all this compare with what the 
 sailor buys for himself when he is on shore? Yet this food must be 
 supplied by American vessels under heavy penalties. 
 
 SAILORS BETTER FED THAN WORKINGMEN. 
 
 From this scale gentlemen who are not familiar with the question 
 will observe that we feed our seamen to-day and are compelled by 
 Congress to feed them better than the average working man is fed 
 on snore. Not only that, but you can not point me to a case, not 
 one in a hundred, where the men take the Congressional scale of 
 provisions. In these vessels with small crews, we can not afford to 
 carry two scales of provisions; and as a matter of fact every crew 
 prefers what is served by the ship. There has been, within my 
 knowledge, but one instance to the contrary. That was on the May V. 
 Neoille, where the crew asked for the scale of provisions and they got 
 it, and they lived under it just two days. Then they came to the 
 captain, Frank W. Patten, and demanded to be put back on the ship's 
 rations. He informed them that having selected the Congressional 
 scale of food, they would get it for the rest of the voyage, and they 
 started to sue him when they got back to New York, because he 
 would not give them the ship's provisions instead of what the law 
 provides. There is no question that our ships feed their sailors better 
 than any others. We know it and every ship's captain knows it, and 
 every shipping man knows it. 
 
 HUNTING FOR AMERICAN BOTS. 
 
 Now, with respect to shipowners and shipmasters not wanting Amer- 
 ican boys, all I need to say is that we are hunting for them. The 
 American Seamen's Federation was formed in New York to secure 
 American boys, and you will find right in this same report of the Com- 
 missioner of Navigation where that question was all gone into, and the 
 universal testimony of all the shipmasters and shipowners taken there 
 was that they wanted American boys because they make the best sea- 
 men there are. But you can not get them. Why ? Simply because 
 in spite of our great coasting fleet the number of vessels existing in 
 the United States is constantly decreasing. The tonnage in the coast- 
 ing trade is increasing, but the number of vessels and the opportunities 
 for captains and mates are constantly decreasing, and the American boy 
 is not going to start into a business where he does not see promotion. 
 
 But when our fleet was constantly increasing the young men hustled 
 against each other to get positions in the forecastle of snips, in order 
 that they might go to sea, leaving wages of $3 or f 4 a day in order 
 to get into the forecastle — into the eyes of a ship that smelled of 
 slush tubs and everything else, getting $12 to $15 a month — because 
 they saw a future. The present commander of the William P. Frye^ 
 whose father, a wealthy man, had sent him to college, left college and 
 unknown to his family went into the forecastle of a ship, because he 
 wanted to become a shipmaster, and he is one of the best in the busi- 
 ness to-day. But you do not see that happening now. 
 
 The^HAiKMAN. The decrease of opportunities is due to the fact that 
 the ships are very much larger now f 
 
HEARINGS BEFOBB THE MEECHANT MARINE COMMISSION. 6b7 
 
 FEWER SHIPS FOR OFFICERS. 
 
 Mr. Plummer. In the coastwise trade, that is the cause. In the 
 foreign trade they have practically disappeared. There are nearly 
 8,000 vessels less than we formerly had, and 8,000 less captains and 
 16,000 to 20,000 less mates. I will not elaborate this, but if you will 
 investigate it you will find that that statement is absolutely true and 
 you will find that that is the explanation of the fact that American boys 
 do not now seek the sea. 
 
 Now, it has been said that the captains do not have American boys 
 because the shipmasters and the ship owners do not want them. I 
 challenge a person to name the case of a vessel — a single case — 
 where mat is true. The exception was said to be that the sons of the 
 owners and captains were put aboard those vessels. 1 challenge any 
 one to name a vessel to-day where a captain's son or an owner's son is 
 going to sea. 
 
 Gentlemen, captains have come to me in the past four years and they 
 have all said that they would get entirely out of the business if they 
 knew anything else; that they would never let their boys go to sea 
 because there were no opportunities. As it is now a shipmaster can 
 not control his vessel, can not do his business; and the same question 
 which confronted the Senate committee lastyear, when the matter of 
 the cutter service and the discipline in it were brought up, and it was 
 found absolutely necessary that there should be a law passed to compel 
 men to serve when they were out in their vessels, confronts us here. 
 
 I will not take time more than to refer to the fact that only two 
 years ago a revenue cutter in the Pacific had to violate the laws of the 
 United States and take a gang of firemen who had deserted from a 
 vessel and, against the law, put them aboard the vessel and conipel 
 them to sei-ve. The steamer was abandoned off the Alaskan coast 
 because the men wanted^ to go to the gold fields. She was full of pas- 
 sengers and off' a dangerous coast. 1 could name the officers. It is 
 stated in the report. 
 
 Representative Minor. So could I. 
 
 THE ENGLISH EXPERIENCE. 
 
 Mr. Plummer. It is admitted that recent legislation regarding 
 sailors has practically failed to accomplish the ends sought. It has, in 
 fact, proved a positive injury. The same legislation was tried in Eng- 
 land, I think it was in 1880, to do away with compelling a sailor to 
 live up to his contract. They passed a law there which is practically 
 the law we have now. They tried it for a few years, and it failed. 
 
 We have heard about what England does and how our sailors ought 
 to be treated like the English are. Here is the English navigation 
 law, and if you will look at it you will find in section 222 the 
 following, which refers to coasting trade: 
 
 (1). If in the United Kingdom a seaman or apprentice is guilty of the offence of 
 desertion or of absence without leave, or otherwise absents himself from his ship 
 without leave, the master, any mate, the owner, ship's husband, or consignee of the 
 ship may with or without the assistance of the local police officers or constables con- 
 vey him on board his ship, and these officers and constables are hereby directed to 
 give assistance if required. 
 
 (2). Provided that if the seaman or apprentice so requires he shall first be taken 
 before some court capable of taking cognizance of the matter to be dealt with accords 
 ing to law. 
 
638 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 That is the present law of England. They tried the law we have. 
 They found it was destroying their business, and they had to go back 
 to the old law which had been in force for more than three hundred 
 years. The reasons why they had to go back were well stated by the 
 United States Supreme Court in the case of Robertson v. Baldwin, 
 vol. 165, pages 282-287, where they went into that very question veiy 
 fully. 
 
 As was suggested by Senator Mallory yesterday, we do not want to 
 imprison seamen ; we want the crew, and when we have a crew that 
 ships, knowing the vessel, and goes down to the wharf, and the sailors 
 have their dunnage put aboard, we think they should be compelled to 
 go to sea. 
 
 A CASE IN POINT. 
 
 1 could name a case that happened right in New York. 1 have here 
 a copy of the libel. In that case the sailors went down to the vessel; 
 the tugboat was ready, the ship was ready, everything was ready, 
 and for some reason — and of course I do not know what, although my 
 general knowledge of such things convinces me that they probably 
 met some chummy man on the way going down, and they went into 
 something else besides the forecastle — they failed to show up. In 
 such cases we can not get them. The vessel is delayed to the injury 
 of all perishable cargo, to the great loss of the shipowner, and to the 
 great harm of commerce generally. Those are the same conditions 
 that prevailed in England under that experimental law which they 
 tried for half a dozen years; and what is the result of the English 
 experience ? The same as with us, only England has had the sense to 
 restore her former law, and we have not. 
 
 I' wish to call attention to the fact that England has made her great- 
 est advance in shipping since she created the board of trade supervi- 
 sion in 1854, when she put her shipping under the control of experts^ — 
 business men. What they say goes in England, and Parliament carries 
 out their recommendations, and to-day England is doing the shipping 
 business of the world, having more than one-half of the total potential 
 tonnage. 
 
 THE QUESTION OF ADVANCES. 
 
 Now the point is made that there should be no advance to seamen, 
 and a great talk is made about crimps. You look at the captains, you 
 look at the owners of these vessels, and see whether or not they would 
 conspire with crimps. Nobody asks for an opportunity to rob the 
 sailor. 
 
 The bill which was unanimously reported by the Committee on 
 Merchant Marine and Fisheries of the House of Representatives, and 
 unanimously reported by the Senate Committee on Commerce, regard- 
 ing advances, provided simply that in a case where a sailor actually 
 owed a board bill — and this Commission has already heard enough to 
 know that when a boarding-house keeper has a bill against a sailor he 
 is going to keep that sailor-until he gets his money — when any such 
 actual debt as that was due, when necessary clothing must be procured, 
 the sailor and the creditor could go before the deputy collector or the 
 United States shipping commissioner or some duly authorized oflScer, 
 and there, when the creditor had sworn to the accuracy of his bill and 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 639 
 
 the United States officer was satisfied that it was true, and the sailor 
 admitted it was true, the debt could be paid, and then we should get 
 the sailor. 
 
 The necessity of that very act was brought out yesterday in the 
 statement of the secretary of the Seamen's Union, when, in arguing for 
 half pay at the first port touched, he said the seamen need that money 
 so that they can send it back to pay for board due and debts previously 
 incurred. Then he went on to say that this money is kept by the ship- 
 master for his own use. What a shipmaster would do with money 
 on the high seas, unless he played poker with himself, 1 do not know. 
 But I submit that if you are going to pay that bill, it is better to pay 
 it at the beginning than it is to pay it at the end, when there are the 
 temptations to the sailor, after he gets his half pay, to use the money 
 for something besides those legitimate expenses incurred prior to the 
 beginning of the voyage. 
 
 ENLARGED FORECASTLE SPACE. 
 
 You were told that our forecastle accommodations were only 72 
 cubic feet. That is under the old law. The act of 1897 provides for 
 100 cubic feet, and any man who has been on a United States naval 
 vessel and seen the men packed in their sleeping apartments, heads to 
 feet, as snug as they can be, and who has followed the matter up and 
 found that the health of United States naval men is the highest of any 
 navy in the world, will I'ealize that space is not the only qualification 
 needed to keep a man healthy; and 1 submit that the records of our 
 shipping will show — and 1 hope this Commission will have an oppor- 
 tunity to visit some of the vessels down in the harbor — that the sea- 
 man's health deteriorates from what happens on shore instead of what 
 happens on shipboard. [Applause.] That is the record, as we all 
 know. 
 
 I have not time, gentlemen, to go into this matter in the way in 
 which 1 should like. I propose to file the scale of provisions as found 
 in this report, and I will try to answer any questions that gentlemen 
 may see fit to ask about sailors. 
 
 THE AFFAIR OF THE ATWOOD. 
 
 But right here 1 may say that for the past two years it has been 
 practically impossible for us to keep a crew on board unless we paid 
 tribute to certain parties who had no right to demand it. 1 may men- 
 tion just one case, that of the Helen M. Atwood, reported in 92 Fed- 
 eral Reporter. There was a case where a crew was sent from Boston 
 to Bath to go aboard the Atwood. She had been thoroughly repaired, 
 and certified to by the deputy collector of the United States by his cer- 
 tificate cut in the timber. It gave them a forecastle which allowed 
 more than twice the space required by law. As I say, the vessel had 
 just been thoroughly repaired and overhauled and she was ready to 
 leave the yard. The crew came down there. 1 do not know why they 
 left. They never said anything to the captain. They went aboard and 
 sat around awhile and went away. We had paid all their expenses and 
 paid for their keep in the sailors' boarding house that night when they 
 got there. They would not go aboard that night. They must go to a 
 sailors' boarding house, and we had to pay the bill. They went away. 
 
640 HEARINGS BBFOKB THE MERCHANT MARINE COMMISSION. 
 
 We sent to Boston and got another crew. They came down. They 
 looked around and said: " I understand you have had trouble with 
 your other crew." They went away. Then that vessel by my direc- 
 tion was anchored in the stream where it required an anchor watch. 
 The third crew came down and made the same talk. They undertook 
 to commit mutiny. Well, those sailors did not go on that voyage, 
 chiefly for the reason that they went to jail. This is all in the record, 
 and you can read right there, in the official report, just what causeless 
 desertions we have to face. 
 
 BY FOKCE OF ARMS. 
 
 We had a case right down here in New York, where a gang of 
 men — 75 men — came down to the wharf to take out b3'^ force from one 
 of our vessels the crew which was there. The crew called upon the 
 captain to protect them. He ordered the invaders off and finally one 
 of the ringleaders came up to him, threatening hitti with his fist under 
 his nose, and said: " I done you up in Portland, and I will do you up 
 here." Then the captain to protect himself fired into the crowd. He 
 wounded a ringleader and spokesman, and as an interesting coinci- 
 dence what he shot off was a part of his lip. [Laughter.] 
 
 What was the result? Smith was arrested. HeTiad to find another 
 man to go on his vessel at large expense to him and delay to the ves- 
 sel, and he was not to blame. 
 
 We have just another case such as was referred to yesterday — that of 
 the Oliver S. Barrett. In that case the crowd came aboard. The 
 captain, knowing the experience of Smith, did not want to get into a 
 scrape. He did not dare fire. They lugged off the crew. Now the 
 crew has sued the captain because he did not protect them. 
 
 Representative Minor. What crowd? 
 
 Mr. Plummer. That is what we do not know. 1 have only seen the 
 newspaper dispatches. The managing owner, Mr. Deering, was here 
 yesterday, and he had a telegram from his captain stating what the 
 situation was. The crowd where the shooting occurred was composed of 
 members of the International Seamen's Union. That is what made the 
 trouble. That is the organization which the courts of this State have 
 enjoined, because its members nearly killed a man named Crowell. 
 
 Representative Minor. That is the " persuasion " they are talking 
 about. 
 
 Mr. Plummer. Precisely. That man had the worst looking coun- 
 tenance of any man I ever saw — even after an election. His face was 
 stove all to pieces. As a matter of fact, after hearing the case, the 
 courts enjoined them from interfering further. The crowd comes 
 down. The crews want to go, but the gang take them right off. 
 
 AMERICAN boys ARE WANTED. 
 
 Thethin^ that brought this matter to a clinch was this: After a 
 majority of the men had come under the influence of this associa- 
 tion, the ringleades would go aboard a vessel and say, "You discharge 
 that mate or we will not let you have any men." The American mates, 
 almost to a man, refused to join in the union, and the crews were taken 
 away from those vessels. But the vessels are now securing their 
 crews, and I think will continue to do so. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 641 
 
 1 have talked about this sailor question before, so I will not weary 
 the Commission. I have talked about it in Washington. I had the 
 documents there, a whole grip full. 1 can furnish names and dates, 
 and I challenge anyone to name a case that will substantiate the claim 
 that we do not want American boys. 
 
 Right here in this city there is a Mr. Palmer. He is a man who 
 has one of the finest fleets afloat, and, although he is not compelled to 
 do it, he carries two apprentices on each of his vessels, voluntarily, 
 because he wants to build up men who can take command of his vessels, 
 and he wants to get Americans into the service. But you gentlemen 
 have it in j'our power to make the condition so that the American boy 
 will go to sea. If you build up the merchant marine the American 
 boy will go. He is not like the fellows we have to use now. His 
 prospects in life are not measured by his stomach and bowels. He 
 does not stop to think of what he is going to eat and drink and what 
 he is going" to wear. He is thinking about tlie future. 
 
 When we started South we had aboard our vessel— a United States 
 war vessel — 30 men from the naval reserve of Connecticut, sons of the 
 first families there; and we had some 60 men who had been gathered up 
 from the wharf ends along the Kennebec. I knew some of those men, 
 for I was city prosecutor for three years. As I say I knew those men, 
 and when it came to the food that was served aboard those vessels men 
 like the nephew of Senator Coggeshall never said a word. But the 
 men who kicked and the men 1 had to address briefly on the subject 
 were the fellows who came from the wharf ends, who when at home 
 got secondhand sausages, to my personal knowledge. You can not 
 find any kick coming from the men of intelligence on our vessels. 
 The officers eat that food. We got down to the regular ship's scale 
 aboard of that vessel. It suited me. I did not die from it. It is as 
 good as I regularly get; it is good enough; and yet that is only half as 
 good as we feed our sailors here. 
 
 FREE SHIPS FUTILE. 
 
 Touching briefly on the matter of running on the ocean, we are asked, 
 ' ' Why should we not buy our vessels abroad ? " That is just the way to 
 insure the fact that you will never have a merchant marine. I shall be 
 glad to furnish you shortly just exactly the figures in the case of those 
 great freighters building for J. J. Hill. One of those freighters would 
 nave cost about 35 per cent more than a foreign vessel, but they built 
 two freighters and the result will be — we can get it ver};^ close now — 
 about 23 per cent more than a foreign vessel, l^ow, if a single dupli- 
 cation like that will reduce the cost 10 per cent, what will happen 
 when wft begin to specialize and to do our work as the Englishmen do it? 
 
 If you import vessels, to begin with, you take away from us the one 
 thing absolutely necessary to build up the American merchant marine, 
 and that is the opportunity to get in practice. 
 
 Turn to the report of the Lynch committee of 1872-73, and read 
 what the iron shipbuilders of this country testified to — Rowland, who 
 built the Monitor, and the men who built iron vessels. At that time we 
 had as much practice as England. What did they say ? They said we 
 could build as cheaply as the Englishman, and that the more efficient 
 American labor would enable them to compete with the English. One 
 of the iron shipbuilders said that' under similar conditions he could 
 
 3a— 04 41 
 
642 HEARINGS BEFORE THE MERCHANT MABIKB COMMISSION. 
 
 build, vessels and sell them to England. You will find it all there. 
 But at that time the iron material cost from $30 to $40 a ton more in 
 this country than it did there. It does not cost that now. The dif- 
 ference is small. Admiral Bowles hit it very close — about 5 per cent 
 of the total cost of the vessel. But we have given England thirty 
 years of practice. She has specialized and now she can build much 
 cheaper than we can. 
 
 THE LAKES AS AN ILLUSTRATION. 
 
 But when you say that, given the same opportunities and the time 
 and practice, the American shipbuilder can not compete with the for- 
 eigner you state what is not true; you state what we know to be false, 
 because we have done on the Great Lakes what people have not done 
 in any other part of the world. 
 
 Fifteen years ago it cost 15 cents to carry a bushel of wheat from 
 Duluth to Buffalo. To-day you get it carried 1,100 miles for 1^ cents. 
 What has done it? American brains and the development and cheap- 
 ening of the American vessels. And that is what will be done on the 
 Atlantic. If I thought we must indefinitely have a subsidy to support 
 and lift up the American merchant marine, I would stand up here 
 to-day and challenge any man to defend it under the Constitution. 
 But to-day I stand squarely on the principles laid down by Andrew 
 Jackson in his second address to Congress, in which he stated that any 
 industry which would be of national importance was entitled to be 
 protected if there was any prospect of our being able to compete with 
 the foreigner. Now there is such a chance; and here is the solution. 
 
 Turn back but three years, and you will remember that there was 
 in New York Harbor at one time 100,000 tons of foreign freighters 
 that could not afford to carry goods at the prices offered. Why? 
 The great big freighter had cut the prices so that the little freighters, 
 which were first-class vessels a few years ago, could not afford to take 
 the freight at that time. Now the freights are such that they are all 
 carrying, and the fact that England built last year for her own personal 
 use over 800,000 tons of steamers suggests that the men who are in 
 the business are making money. 
 
 A gentleman said to me yesterday, "The English are running their 
 vessels, but they are not making any money." Gentlemen, that 
 reminds me of a Jewish friend of mine in New York City, who said: 
 "1 am not making any money; I am selling goods for less than cost, 
 but I am doing such a big business 1 can afford to carry it along." 
 [Laughter.] Apparently that is the argument advanced on behalf of 
 England. 
 
 LOWER FREIGHT RATES. 
 
 Unless you can show that the American people are going to get just 
 freight rates for the transportation of their products, the export of 
 which is the foundation of our prosperity, you have no right to try to 
 build up the American merchant marine. But that is just exactly what 
 we shall get. Apply to the Atlantic Ocean the same brains whicli have 
 been applied to the transportation problem on the Lakes, and you will 
 have going across the Atlantic in a very few years the large, most 
 economically speeded vessels, properly equipped with every appliance, 
 just as they have them down at New. London. You can not anywhere 
 duplicate those two vessels of Hill's. I should like to have the Commis- 
 sion look at them. They can handle freight more economically than 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 643 
 
 any other vessels on the ocean, but of course it costs more to I'un 
 them under the American flag. 
 
 The moment you put the intricate machinery which is always asso- 
 ciated with a reduction in the cost of operating- expenses and the num- 
 ber of hands used, then you must have brains aboard those vessels, 
 and then one brainy man will do just as he did in 1854, as the com- 
 merce and navigation report right over there will show. Then wo 
 will have a chance to use American brains, and one American will do 
 a good deal more than one and a half Englishmen, as the figures then 
 stood. Then, although we shall have the American rate of wages and 
 higher wages than now — on the lakes we pay the highest wages in the 
 world — we shall be able to cut the carrying expenses, the operating 
 expenses, below the present figures, and then in those big vessels we 
 shall be able to cut the freight rate. But you can not get these improved 
 American vessels by buying from foreigners — you must build them 
 here and give American brains a chance. And the more you build 
 here the cheaper you can build and the lower you can push the freight 
 rates. And on a low freight rate rests the prosperity of this country's 
 producers. 
 
 Now, I am not partial to any one system of building up the American 
 merchant marine. When you come down to the last analysis, differen- 
 tial duties, plain subsidies, tonnage dues, anything of the kind is in 
 essence a subsidy. The main point is to make it apply so that if pos- 
 sible you can do what France is doing — make the foreigner pa}- the 
 expense. You will find by the report of the Commissioner of Naviga- 
 tion for 1898 that France is collecting in tonnage dues just enough to 
 pay all her construction and sailing bounties. 
 
 A MARINE FUND FROM TONNAGE DUES. 
 
 Now, we can dp that. If we should collect from all vessels — as I sub- 
 mitted in New York — 50 cents tonnage dues, which are the old foreign 
 tonnage dues, the result would be to drive' out of business the less 
 economically operated vessels in foreign competition. It would not 
 drive out the great big modern freighters, because they proved in the 
 struggle at New York three years ago that they can live on freights 
 where the others can not, but it would drive out the less economically 
 operated vessels. That would make a hole in which to fit in the Amer- 
 ican ship. There is only about so much business to be done, and you 
 have to drive the foreigner out in one way or the other before you can 
 insert your own vessels. 
 
 I am not one of those who advocate the carrying of all our products 
 in our own vessels. That was thoroughly discussed in 1794, and the 
 arguments have not changed. Then we carried a little more than 
 one-half, and that was considered a fair proportion, and I believe it 
 is a fair proportion. 
 
 Why not collect those dues, and then do just as England does with 
 her light dues ? You will find a statement of it in this same report. 
 The vessel gets its dues or a proportion of them back when it does 
 certain things, one of which is to carry a cadet, the same as Mr. 
 Palmer is voluntarily doing with his schooners here. If all of this 
 marine fund were applied to the upbuilding of the merchant marine, 
 you would get the biggest amount of bounty at the time you need it 
 the most, and as you build up the American fleet then the amount of 
 money which each vessel will receive will decrease, and when you have 
 
644 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 your fair proportion of the trade then the bounty will be so small that 
 there will be no incentive to overdo the business. There you have an 
 automatic control. Of course, it is subsidy in essence, but there you 
 would do what France is doing. There the money will come not out 
 of the American people, but out of the dividends of the foreign ship- 
 owner. 
 
 Gentlemen talk about retaliation. That is the same argument that 
 Madison and Jefferson met, and they met it so much better than 1 can 
 that I will not do more than refer to it. As a matter of fact, we did not 
 get retaliation then, and for the reason, Madison stated, that England 
 understood that any policy of retaliation started by her would be met 
 by the United States with the result that she must go out of the busi- 
 ness, because the foreigner pays f4 to every $1 that we pay. And, 
 gentlemen, if you go into a game at night where the other fellow has 
 to put in four chips to j'our one, you will have his shoes and stockings 
 before morning. [Laughter.] 
 
 , NOT UNDEEMANNED. 
 
 1 wish also to refer to a measure which was not read here I believe, 
 but which has been pending in Congress for two or three years, and 
 that is the manning law, which would make the Thomas W. Lavjson of 
 this port carry 42i men. It would be easier to find the one-third man 
 than to find the 42 able seamen; and I can state that as a fact. 
 
 If the Thomas W. Lawson had to carry m^ men she could not carry 
 coal at 70, 75, 80, or 90 cents a ton. By building the big vessels and 
 by putting in steam appliances, which cost from twelve to fifteen thou- 
 sand dollars per vessel, we have been able to cut freight rates more 
 than in half, and the public gets the benefit of it. 
 
 It has been suggested that if the shipowners were given this advan- 
 tage they would pocket all the money, and the public would suffer. 
 Here is the coastwise trade. To-day the business is very close; so 
 close, in fact, that I can show you schoonjers which are lying up. 
 They can not take the freight at the figures offered. But we do carry 
 it in our big vessels, and the public gets the benefit of the low rates. 
 If you compel us to man an American vessel on the English plan, 
 when the English have not any such vessels as ours, which are pri- 
 marily constructed for the purpose of economies in operation; if you 
 compel us to carry 42 able seamen aboard a vessel such as the Thomas 
 W. LoAJoson^ where 15 are ample, you necessitate a large raise in 
 freight rates, and the result will be that the public must pay more for 
 its coal. 
 
 As it is, the competition is such that we are lugging coal at the low- 
 est possible rate; and if anybody can point out a single schooner 
 which, in the past fifteen years, has been lost because of un^ermanning, 
 or because she was unseaworthy, or because of some other theoretical 
 thing had not been done to her, I should like to know the name of the 
 schooner. We can not afford to insure our vessels, because we carry 
 freight so low, and as a result we can not afford 'to take risks with 
 them, and we do not take the risks with them, and they can show the 
 cleanest record for the past fifteen years of any method of transporta- 
 tion I know of. 
 
 Mr. Chairman and gentlemen, I thank you for bearing with me so 
 long. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 645 
 
 STATEMENT OF EDWARD M. BREWER. 
 
 Edward M. Brewer appeared before the Commission. 
 
 The Chairman. In what line of business are you engaged? 
 
 Mr. Brewer. I have been engaged in shipping all my business life. 
 My father was a shipmaster in his day, and as soon as 1 left school he 
 took me into business with him as a shipowner, in a small way, but 
 constantly at it. 
 
 The Chairman. Were you engaged in the foreign trade ? 
 
 Mr. Brewer. Yes, sir; always in the foreign trade, on sailing ves- 
 sels only. 
 
 The Chairman. You are familiar with the duty assigned this Com- 
 mission, I presume? 
 
 Mr. Brewer. Yes, sir; I have read about it. 
 
 The Chairman. Will you kindly give the Commission the benefit of 
 any views you may have on the subject? 
 
 Mr. Brewer. As I say, I have been interested in shipping during 
 all my business life as an owner as well as managing owner. My 
 experience has been with sailing vessels only, which have been engaged 
 nearly all the time in foreign trade on long vo3'ages. 
 
 1 believe that the shipowning interests of this country will best be 
 promoted by such changes in our navigation laws as would allow us to 
 buy or build foreign vessels wherever or whenever we can buy or 
 build them cheapest, and provide for the issuing of American registers 
 to such vessels when intended for foreign trade. I believe that the 
 present law prohibiting the registering of foreign-built vessels has 
 been a serious and unnecessary burden upon our shipowners, and of 
 very little benefit, if any, to our shipbuilders. 
 
 WOULD LIKE FREE SHIPS. 
 
 I disapprove entirely of the propositions for giving general subsidies 
 to our shipowners and for discriminating against imports bj' foreign 
 vessels. In adopting such methods we would simply be offering 
 inducement or making a precedent for retaliatory measures on the 
 same principle on the part of our rivals and competitors, and would 
 at the same time probablj"^ fail in accomplishing the specific result 
 which we have in view. There seems to be no way of avoiding com- 
 petition in one form or another for anything which may seem to be 
 worth having. As a shipowner engaged in foreign trade, I have 
 always been in direct competition with foreigners on a natural basis 
 and without "protection," so called. But there is no form of compe- 
 tition, whether foreign or domestic, which I have come to dread so 
 much or in respect to which I feel so helpless as this competition or 
 struggle for favors or aid from the Government in the form of pro- 
 tective tariffs, subsidies, or special legislation generally, or in the 
 shape of retaliatory tariffs or legislation as between rival nations. I 
 doubt very much if our capitalists will at this late day increase their 
 investments in any business which can not prosper without a subsidy. 
 This policy of subsidizing is a game that two can play at. It has been 
 played too far already. 
 
 In giving our citizens the right to purchase foreign-built vessels and 
 registering them under our flag we shall only be granting them a priv- 
 ilege whicn the citizens of all other nations enjoy. In addition to this 
 
646 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 privilege some nations give general subsidies to their shipping, while 
 others give compensation for specific purposes only— for carrying 
 mails, principally. Among the latter are Great Britain, Germany, 
 and Norway and Sweden, which nations have been far the most suc- 
 cessful in marine enterprises. I think we had better adopt their mari- 
 time policy as a whole toward our shipping interests, rather than give 
 general subsidies. 
 
 Senator Lodge. Are any of those subsidies given to foreign-built 
 ships? 
 
 Mr. Brewer. Do you refer to the subsidies that these other coun- 
 tries give? 
 
 Senator Lodge. Yes. 
 
 Mr. Brewer. I do not know. 
 
 I believe that we can deal with the competition of subsidized vessels 
 much more effectively and promptly by abstaining from giving general 
 subsidies ourselves, standing ready at anj'^ time to cooperate with those 
 nations who do not give them, in such measures as may seem best 
 adapted to break down the system altogether once and for all. 
 
 I think that we should be granted the privilege of "free ships," so to 
 speak, irrespective of the cost of operating them. The greater the 
 cost of operating in comparison with foreign vessels, the more neces- 
 sary it is that we should be allowed to buy our vessels in the cheapest 
 market. 
 
 FAVORS FREER TRADE. 
 
 In respect to the cost of operating vessels, I think we are at a nomi- 
 nal disadvantage, at least as compared with foreigners, in respect to 
 wages to officers and crew, and cost of feeding them, but not enough 
 probably to prevent us from competing for foreign trade. We may 
 get our money's worth after all, even if we do pay more wages than 
 others and give better food. In all other respects, I fail to see wherein 
 we should be at any disadvantage in operating vessels in competition 
 with foreigners, provided of course we are allowed to bu}'^ or build 
 our vessels in the cheapest market. In giving our shipowners this 
 privilege we shall be giving them all the favor and aid they can fairly 
 ask or expect from Congress, and without doing injustice or injury to 
 any other interest whatever. Our shipbuilders would then have the 
 coastwise and inland trade entirely to themselves, as they have now. 
 
 I am in favor of a revision of our tariff in the direction of lower 
 duties. In adopting such a policy', we would, I think, best serve the 
 interests of our country as a whole, and help our shipping interests 
 at the same time; for shipowners the world over, Americans as well as 
 all others, will gain something and lose nothing with every step toward 
 freer trade on the part of any one or more nations. A policy which 
 would tend to make more business for vessels interests me personally 
 as a shipowner more than a policy intended only to make vessels more 
 plentiful. 
 
 AS TO RETALIATION. 
 
 Senator Mallort. I notice you seem to apprehend serious conse- 
 quences from retaliation in the event we put discriminating duties on 
 goods imported in foreign built and owned ships. There is a propo- 
 sition to impose those duties only on what is known as the indirect 
 trade. That is, a British vessel bringing British products to this 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 647 
 
 country would not be subject to the law, but a British vessel bringing 
 German or French or Russian products would be subject to the Taw. 
 Do you see how there would be any retaliation open to any of the for- 
 eign nations in case we adopted such a system as that? 
 
 Mr, Brewee. I think so. 1 do not know that I have given the 
 subject very much study, but I think we had better avoid discriminat- 
 ing duties altogether. 
 
 Senator Malloet. I do not see where a nation would have any 
 right on its own behalf to complain if we did not interfere with ite 
 bringing its own goods to this country. Of course, if we imposed a 
 discriminating duty on the ships of all nations bringing goods, whether 
 from their own country or from any other country, I could under- 
 stand how there would be danger of retaliation, but I do not think in 
 such a case as 1 have stated, there could be any such apprehension. 
 1 thought possibly you had given the matter some thought. 
 
 Mr. Beewbe. No, sir; I have not. 
 
 STATEMENT OF E. B. GEANT. 
 
 E. B. Grant appeared before the Commission. 
 
 The Chairman. Kindly state to the Commission what your present 
 occupation is. 
 
 Mr. Grant. I am United States shipping commissioner for the port 
 of Boston. 
 
 The Chairman. The Commission will be pleased to hear from you 
 on any matters relating to the subject in hand. 
 
 Mr. Grant. My observations, Mr. Chairman, have always been in 
 the direction of the relations existing between the seaman, the vessel 
 owner, and the master. There are one or two matters to which 1 
 should like to call your attention. They have been quite fully stated 
 by Mr. Plummer. But since the passage of the act approved Decem- 
 ber 21, 1898, the masters and owners of vessels have made almost con- 
 stant and daily copiplaint to the shipping commissioner at this poit 
 that seamen, having signed to go on board vessels to fulfill a certain 
 voyage and having agreed to render themselves on board at a certain 
 time, have refused so to do, thereby causing the vessel considerable 
 detention and many times expense in securing substitutes to take their 
 places. 
 
 enforce THE sailor's CONTRACT. 
 
 That has been quite a hardship on vessels that have gone to southern 
 ports to load lumber for ports north of Hatteras. The seamen are 
 entitled under the statute to receive one-half of the pay due them at 
 every port where the vessel loads or discharges cargo, and arriving at 
 a southern port, the men ask the captain for one-half their wages, and 
 he of course is obliged to give them. They go ashore, and then they 
 fall under influences there which do not let them go back aboard the 
 ship. The vessel then is detained sometimes a week, often longer than 
 that, and m order to obtain a crew to go north, the captain is obliged 
 to pay a large lump sum, known in the vernacular of shipping as run 
 money. It is an evil that should not be allowed, and I thmk ftie Con- 
 gress should enact that a sailor, having signed an agreement before a 
 
648 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 United States shipping commissioner, 'should be compelled to fulfill 
 his obligation. 
 
 You make the captain and the vessel fulfill their part. If the Cap- 
 tain desires to discharge a man before the expiration of his contract or 
 before he has earned one month's wages, you require him to pay this 
 man one month's wages in addition to what may be due him. On the 
 other hand, your sailor is allowed to desert and leave his ship, and he 
 can not be arrested or apprehended and put on board. I think Con- 
 gress should pass some law allowing some one in authority to put such 
 men on board a vessel when they have refused to proceed and fulfill 
 their contract. 
 
 ADVANCES FOR SEAMEN. 
 
 The question of advance wages has been discussed by Mr. Plummer 
 to some extent, and I should like to state that in 1884 Congress passed 
 what was known as the Dingley bill, abolishing all advance wages, 
 both coastwise and foreign, and for two years the shipowners were 
 made extremely unhappy and put to a great deal of expense in obtain- 
 ing crews. In 1886 Congress modified the statute by again putting 
 coastwise vessels on the platform of paying advance wages, a small 
 sum, and also the foreign trade. From that time on matters went 
 along quite comfortably until the present law was passed in 1898. 
 That abolished advance wages in the coastwise, the British West 
 Indies, the Gulf of Mexico trade, and materially reduced the amount 
 allowed in the foreign trade, and there the word "advance" was 
 changed to allotment, which a sailor was allowed to receive in liquida- 
 tion of a just debt for board or clothing. 
 
 The general feeling amon^ the shipowners is that they should be 
 allowed to pay in the coastwise and West India trade small advance 
 wages; that thej"^ would be able to secure men more easily, and could 
 apply to sources of supply with better results; that the men who have 
 the sailors and keep sailor boarding houses would be willing to let men 
 go, if they could receive from the vessel a small sum of money in the 
 coastwise and on these short trips to pay, in part at least, the sailors' 
 obligation to them. 
 
 Senator Mallort. Do they not do that now, practically ? 
 
 Mr. Grant. They do not, sir, in the coastwise trade. Thej' do in 
 the foreign trade. 
 
 Senator Mallort. Do they not get something they call a bounty, 
 or something in the shape of an a.dvance, whereby the boarding-house 
 keepers get their money back for the board of and service to the 
 sailor? 
 
 Mr. Grant. Not as a general thing in the coastwise trade. Since 
 the passage of this act the boarding-house keepers jointly demanded 
 of the ship a sum of money in addition to that allowed by the statute 
 in the foreign trade, and that has been known as a bonus, and they 
 have demanded that and do still demand it and receive it in many 
 cases. I understand that in New York, Philadelphia, Baltimore, San 
 Francisco, and other ports the sum is much larger than it is in Boston. 
 But they do receive it, and they do demand it, and it is a burden, an 
 extra burden, a tax upon American shipping, and it should not be 
 allowed. Congress should pass some legislation prohibiting these 
 tnen asking and demanding and receiving tnis sum. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 641> 
 
 Senator Mallobt. Right on this point, do you know whether that 
 is ever deducted from the seaman's wages? 
 
 Mr. Grant. It is never deducted from the seaman's wages. The 
 seaman is not charged with it in any way. It comes entirely from the 
 ship; out of the pockets of the ownwsof the vessel. The sailor knows 
 nothing about it, and is not supposed to know anything about it. It 
 is not charged to him in any way. 
 
 MORE POWER FOR COMMISSIONERS. 
 
 Senator Mallort. Do you think, if in the coastwise trade we allowed, 
 in a safe way, advance to be paid to the seamen through the hands of 
 the shipping commissioner, requiring them all to be shipped before a 
 shipping commissioner, and requiiing him personally to deliver the 
 money to the seaman, it would make any difference in strengthening the 
 hands of the shipowner to keep the men aboard the vessel and prevent 
 them from quitting? 
 
 Mr. Grant. 1 think it would. I think it would enable the vessel to 
 ob n its crew with less trouble and detention. 
 
 Senator Mallort. After the master got the crew, do you think the 
 fact that the crew had received the money 
 
 Mr. Grant. I think perhaps the men would be more inclined to stay 
 by the vessel. 
 
 Senator Mallort. On that point, have you any suggestions to make 
 as to any legislation which you think would correct these evils, of 
 which the shipowners and shipmasters complain, of men shipping here 
 in Boston, for instance, and then refusing to go on board ship after 
 they have signed; have you any suggestions to make on that score? 
 
 Mr. Grant. I think legislation should be passed which would give 
 the shipping commissioner or some other authority power to put those 
 men aboard the vessel. 
 
 Senator Mallort. That would mean the power to imprison ? 
 
 Mr. Grant. 1 do not mean the power to imprison. I mean they 
 should be required to go on board. 
 
 Senator Mallort. Suppose they should refuse to go ? 
 
 Mr. Grant. They should be carried there. 
 
 Senator Mallort. That amounts to imprisonment. 
 
 Mr. Grant. In a way it does. 
 
 Senator Mallort. It is a restraint of their liberty. 
 
 Mr. Grant. It is in restraint of their liberty, but these men know 
 what they are doing. Every man who appears in the office of the 
 shipping master and signs articles for any vessel is told fully and 
 explicitly where the vessel is going, what the terms and conditions of 
 the contract are, and he is not obliged to go; but he signs freely and 
 voluntarily, and there is no reason why he should not fulfill his part 
 of the obligation. 
 
 Senator Mallort. Except that he has not received anything on the 
 contract. It is simply a bare contract. No consideration is given or 
 i-eceived by the sailor. 
 
 Mr. Grant. Exactly. 
 
 Senator Mallort. You are inclined to think if he did receive a 
 slight advance, which was put into his hands and not into the hands of 
 the crimps, there would be a sort of an obligation, at least a moral 
 obligation, on his part to stand to his contract? 
 
650 HEARINGS BEFORE THE MEBCHANT MARINE COMMISSION. 
 
 Mr. Gkant. I think if it could be arranged to band the monej' to 
 the man, so that he would not disappear with it, it might have some 
 moral effect. 
 
 Senator Lodge. Do you think it would be a good thing for the United 
 States shipping commissioner, in case of dispute between the seamen 
 and the masters, to have the power to determine those disputes, sub- 
 ject to appeal? 
 
 Mr. Grant. Under the statute the commissioner does have power 
 where both parties agree. 
 
 Senator Lodge. Where both parties agree. But I mean a statute 
 compelling them to submit to it. 
 
 Mr. Grant. I think it would be wise legislation. 
 
 Senator Lodge. It was recommended in New York by the shipping 
 commissioner there. 
 
 Mr. Grant. Yes. 
 
 Senator Lodge. And the officer there also recommended as a good 
 measure a bill to give the shipping commissioner authority to accept 
 deposits- of seamen's wages. 
 
 Mr. Grant. A very good idea, sir. 
 
 Senator Lodge. So that he could receive the money in the nature 
 of a postal savings bank or something of that sort? 
 
 Mr. Grant. Certainly. 
 
 Senator Lodge. And remit to the sailor's family, if he has one? 
 
 Mr. Grant. They do that in this port ver}'^ frequently. 
 
 Senator Lodge. Voluntarily ? 
 
 Mr. Grant. Yes, sir. A man came in mj office and deposited in 
 my hands the sum of $100 for safe-keeping until such time as he should 
 call for it. 
 
 The Chairman. Do the owners and seamen frequently arbitrate their 
 differences through the shipping commissioner? 
 
 Mr. Grant. Yes, sir; they do quite frequently. 
 
 The Chairman. A seaman in Philadelphia stated that they abso- 
 lutely refused to do it in that city, because there is no appeal from 
 the decision of the shipping commissioner. 
 
 Mr. Grant. They have never refused to do it here with one excep- 
 tion, and that case was taken to a court, and it is about being tried 
 to-day. 
 
 interference with crews. 
 
 Senator Mallory. Do you know whether Massachusetts has a law 
 prohibiting anyone engaged in the business of shipping sailors^a 
 crimp, or a boarding-house keeper — from going aboard a ship without 
 the consent of the master? 
 
 Mr. Grant. 1 know of no State statute to that effect. 
 
 Senator Mallory. Some of the States have such statutes. Mj^ 
 State has, but 1 do not know how it works. I do not think it amounts 
 to much. However, I called attention to that in reference to the pos- 
 sibility of an enactment to the same effect by Congress. There seems 
 to be a complaint that where nonunion men ai-e snipped for a foreign 
 voyage — and the port of New York has been cited — and they are 
 taken aboard the ship, men interested in preventing them from going 
 to sea will go down and take them off the ship, after they have gone 
 aboard, and bring them away. In order to do that those men have to 
 go aboard the ship, I imagine. 
 
 Mr. Grant. Yes, sir. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 651 
 Senator Malloky. If there was a law imposing a penalty- 
 
 Mr. Grant. There is a law in this State imposing a penalty for that. 
 
 Senator Mallory. I know; but I refer to the mere going aboard of 
 a fihip by sailors' boarding-house runner 
 
 Mr. Grant. 1 think there is in Massachusetts no statute which 
 covers that. 
 
 Senator Lodge. The statute covers going on board and trying to get 
 the men to leave. 
 
 Mr. Grant. Yes, sir. 
 
 Senator Mallory. I am speaking of a man's business being taken 
 as the criterion; that is, if he shall be engaged in the business of ship- 
 ping seamen he shall not go aboard without the consent of the captain. 
 
 Mr. Grant. There is no such statute. 
 
 Senator Mallory. What would you think of the enactment of such 
 a statute by Congress? Congress would have power to enact it, of 
 course. 
 
 3Ir. Grant. I think it would be wise legislation, of course. 
 
 STATEMENT OE OSBORNE HOWES. 
 
 Osborne Howes appeared befor the Commission. 
 
 The Chairman. Mr. Howes, will you please state to the Commission 
 in what business you are engaged? 
 
 Mr. Howes. I am the secretary of the Boston Board of Fire Under- 
 writers at the present time. My ownership in ship property at the 
 present time is confined to a small interest in coastwise vessels. I have 
 owned in deep-sea, or vessels engaged in foreign voyages, but these 
 were sold quite a number of years ago. I was also, for one or twp 
 years, an officer in the Pacific Mail Steamship Company. These experi- 
 ences constitute my qualifications. 
 
 The Chairman. You are engaged, then, in the insurance business? 
 
 Mr. Howes. At the present time. I have been driven out of the 
 shipping business into other occupations. 
 
 The Chairman. Are you a contributor to the newspaper press ? 
 
 Mr. Howes. I am occasionally. 
 
 The Chairman. You have written somewhat voluminously on this 
 subject? 
 
 our tribute to FOREIGNERS. 
 
 ]\Ir. Howes. Perhaps not voluminously. That might be a question 
 for opinion. I wish first, in what I have to say, to take exception to 
 one or two lines of argument that have been adopted by those who 
 have addressed the Commission in other cities, if not in Boston. 
 One is respecting the tribute the American people are now paying 
 to the owners, of foreign vessels. 1 think it has been put at anywhere 
 from $150,000,000 to 1300,000,000 a year. 
 
 The Chairman. 1 think $200,000,000 has been the maximum. 
 
 Mr. Howes. Oh, has it? 
 
 The Chairman. Yes, sir; from $150,000,000 to $200,000,000. 
 
 Mr. Howes. Two hundred million dollars. I had forgotten. I 
 think Mr. Shaw made it about $200,000,000. 
 
 Senator Mallory. Including passengers. 
 
 Mr. Howes. It seems to me that this is a question which could be 
 readily determined if the Commission would request Doctor North 
 
652 HEAHINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 of the Census Bureau to take it up and work it out on the basis of the 
 freight rates paid at various places and the amount of merchandise 
 shipped from them. I made a little calculation, based upon the returns 
 of the Bureau of Statistics of the Department of Commerce and Labor, 
 taking the tonnage of cotton, all the grains, practically all of the 
 provisions, so far as their tonnage could be obtained, that were shipped 
 from this country and assuming that all of it went from New York to 
 ports of continental Europe. This represented rather more than one- 
 third in. value of our entire exports in the calendar year 1903, and 
 probably much more than half of all the weight. Of course part must 
 have gone in American vessels, and part must have been sent by rail 
 into Canada, while a part very likely went into Mexico and did not 
 contribute in any way to shipping. Of course the freight rates paid 
 to England, on goods sent to the largest purchaser, are muqh lower 
 than to any other distant foreign country, yet the entire freight paid 
 on all that shipment would have been, if sent to continental Europe, 
 less than $30,000,000, assuming that the rates paid were the current 
 rates of last week. 
 
 Senator Lodge. What total do you get in that estimate ? 
 
 Mr. Howes. If you put the whole amount of exports at sixty mil- 
 lion you would get a full round figure, and as our imports are smaller 
 in volume and smaller in value, and as vessels frequently come here at 
 very low rates in order to get full outward cargoes, the amount paid 
 on the inwai'd-bound freight would be considerably less. 
 
 Senator Lodge. That would be something less than one hundred 
 million. 
 
 Mr. Howes. I should put it nearer ninety million. 
 
 Senator Lodge. Is thirty million too much for the imports? 
 
 Mr. Howes. Perhaps a hundred millions would be about right. But 
 you can not collect tribute at both ends. If we are fairly entitled to 
 have all our export trade carried by our own vessels, those who send 
 goods to us for sale might say with equal fairness that they were entitled 
 to the tribute that came from carrying their own goods to our markets. 
 We can not have both sides. 
 
 Senator Lodge. But the estimate of $150,000,000 to $200,000,000, to 
 which you have referred, is what we pay in total freights for imports 
 and exports. 
 
 Mr. Howes. I judged that was the case. 
 
 Senator Lodge. And passengers. 
 
 Mr. Howes. I did not know that passengers were included. It is 
 usually spoken of as freight. 
 
 Senator Lodge. Passengers are included in that estimate. I had 
 supposed it was not far from a hundred and fifty million for freight 
 and passengers. 
 
 AGAINST DISCRIMINATING DUTIES. 
 
 Mr. Howes. The other point I want to make refers to the utter 
 impracticability, as it seems to me, of endeavoring to solve the ques- 
 tion of building up an American merchant marine by means of discrim- 
 inating duties. In the first place — and the question is one which one 
 of the Senators, I believe, has already referred to in part — there is 
 the danger of retaliation. While it may be said that England is the 
 only country which would be likely to retaliate, and that Eng- 
 land, if we gave this indirect bounty through discriminating duties. 
 
HEARINGS BEFOKE THE MERCHANT MARINE COMMISSION, 653 
 
 might not be materially affected, it seems to me that the Government 
 of this country should take into account that our market in England 
 at the present time is in a somewhat critical condition, and that it 
 would be easily possible by injudicious action on the part of the United 
 States to turn English sentiment in favor of Mr. Joe Chamberlain's 
 plan of imperial federation and of discriminating duties against the 
 products of this country. 
 
 There is perhaps no interest which England has for the safety and 
 well-being of which it is more solicitous than its merchant marine, 
 and any blow struck by the United States Government, whether 
 directly or indirectly aimed at the English merchant marine, would, I 
 am inclined to believe, change popular opinion in England to such a 
 degree that Mr. Chamberlain could secure the support needed to obtain 
 for his policy a Parliamentary majority, with a very material loss to the 
 American people so far as they are dependent upon the sales of their 
 products in English markets. 
 
 Senator Lodge. You think the adoption of his policy would be 
 injurious to us ? 
 
 Mr. Howes. I think it would be, unquestionably. Not only is this 
 a consideration which should be taken into account in determining the 
 policy of our Government in respect to action of this kind, but there 
 is also the further fact that if you analyze this suggested method 
 you will find it absolutely impracticable. The opposition to it would 
 become so strong among our own people that you could not apply it. 
 
 It is said it is simply a reversion to old methods: but we can not 
 in this age in our country always go back to old methods. The 
 Commission is probably aware that three-quarters of a centurj'^ ago 
 it was the custom of the United States Government to permit an 
 American merchant importing goods to give notes for six months in 
 payment of the duties, and in that way the Government furnished the 
 capital for these merchants to carry on their business, the Government 
 being simply a preferred creditor when the man failed. The diflfer- 
 ential duty would be just as archaic as this old duty method. 
 
 DIFFICULTY OF REDUCING OR INCREASING DUTIES. 
 
 This is where I think the trouble would arise in its application. 
 You would have to reduce the duties on importations that came in by 
 American vessels as compared to the rates of duties imposed upon 
 importations coming in on English or German vessels. Take one case 
 ior illustration. There might be, we will say, a reduction of 10 per 
 cent in duty on wool coming from Argentina or Australia in American 
 vessels. Do you suppose that the Senators from Idaho and Wyoming 
 would favor an arrangement to benefit American commerce which 
 would bring in foreign wool at a less rate of duty than the Dingley 
 Act now prescribes ? The protests against interfering by trade treaty 
 with the wool duties which have been made have been of a character 
 which leads one to realize that no change of the kind proposed could 
 possibly be carried through. 
 
 Suppose you increase the duties imposed by the Dingley Act on 
 goods coming into this country in foreign-owned vessels. In the 
 opinion of many these duties are already sufficiently keyed up, and a 
 further increase of them would certainly prove detrimental to a great 
 many interests. But apart from that, or over and above that, under 
 
654 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 such conditions you would have to impose duties upon goods that an^ 
 now entered duty free. Nearly half of our imports in the year 1903 
 were free imports. I have a short list here showing in part what these 
 goods are and the amounts which we imported in 1903, stated in tons. 
 
 Dyewoods, 48,000 tons; gums and chemicals, 681,000 tons; cocoa 
 (cmde), 31,000 tons; coffee, 487,000 tons; cotton, raw, 32,000 tons— 
 that is, the Egyptian long staple cotton; waste and flocks, 12,000 tons; 
 fertilizers, 350,000 tons; vegetable fibers, 190,000 tons; goatskins, 41,000 
 tons (a tax to be imposed on the goatskins which our Massachusetts 
 boot and shoe people require for ladies' shoes, in addition to the duty 
 on hides against which they are now protesting) gutta-percha, 7,500 
 tons; India rubber, 28,000 tons; vegetable ivory, 8,500 tons; man- 
 ganese, for varnishes and things of that kind, 146,000 tons; rags for 
 paper stock, 51,000 tons; plumbago, 16,000 tons; spices, 20,000 tons; 
 sulphur ore, 427,000 tons; and tin, 42,000 tons. 
 
 These form the great bulk, in volume or weight, of our import trade. 
 
 Senator Lodge. You have neither tea nor coffee there. 
 
 Mr. Howes. I read the coffee imports. 
 
 Senator Lodge. Did you? I beg pardon. 
 
 Mr. Howes. I did not put in tea, but 1 did coffee — 487,000 tons. 
 
 Senator Lodge. It is very large. I did not hear you read it. 
 
 Mr. Howes. These form the great bulk of our import trade. They 
 also form the chief bases of our manufactures. They are noncompeti- 
 tive products. They are brought in here to enable our manufacturers 
 not only to supply our own people with finished commodities at low 
 prices, but also to enable us to build up a foreign trade in finished 
 products. An application of a duty to these commodities would strike 
 all along the line of domestic industry. 
 
 It might be said that these products would be brought by American 
 vessels and that therefore the duty would not apply. But, gentlemen, 
 it would take a long time to build the necessary vessels, and the price 
 that would be charged for importation on an American ship would be 
 as near the discriminating duty as the American merchant, in view of 
 competition, could afford to charge. 
 
 Further than that, a great many of these articles, as for instance, 
 tin, which comes largely from the Straits Settlements in the East Indies, 
 do not come in great cargo loads. Tin forms a small part of a general 
 cargo coming to this country. 
 
 Senator Lodge. What was the amount of tin imported? 
 
 Mr. Howes. Forty-two thousand tons. I merely speak of it as an 
 illustration. There are other coromodities which could be mentioned 
 which have to be carried as parts of a general or diversified cargo; and 
 until we had the vessels every importer of tin and every importer of a 
 large number of other commodities now on the free list would have to 
 pay this extra tax on the raw materials which enter into our manu- 
 factures, and which up to the present time it has been the policy of 
 the Government to admit duty free because they are noncompetitive. 
 
 It seems to me that when these facts were brought out and it was 
 found that this system would hit our industries here and there and 
 everjrwhere, even the farmers in their fertilizers, the people would 
 object so strongly as to make its application impossible. 
 
 The next point is the adoption of the plan of direct bounty. I con- 
 fess, Mr. Chairman and gentlemen, that I do not believe that is likely 
 to prove effective. Yet I am not here to argue against it to-day; that 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 655 
 
 is, to argue against it provided it is applied in a manner which I should 
 like to suggest. 
 
 Senator Lodge. Do you mean a direct bounty on tonnage or a mail 
 subsidy ? 
 
 Mr. Howes. I should say practically as the Hanna-Payne bill, so 
 called, provided. 
 
 The Chairman. A direct subsidy? 
 
 Senator Lodge. A mercantile subsidy like that of France. 
 
 Mr. Howes. A mercantile subsidy. 
 
 Senator Mallokt. Your objection to discriminating duties is that 
 they impose a burden on certain parts of our population ? 
 
 Mr. Howes. Yes. It is a discriminating burden. 
 
 WHAT IS the DIFFEEENCE? 
 
 Senator Malloky. For the time being, although it furnishes, 
 according to your own admission, a strong incentive to put American 
 ships in the trade, because American ships would bring tnose goods in 
 here without any change of duty. Now, if that is an objection, what 
 is the difference between such an imposition of a burden on a portion 
 of the community and a similar imposition of burden on a large por- 
 tion of the community by a direct subsidy, requiring people who have 
 no personal interest in shipping or trade to pay that subsidy ? 
 
 Take the States of Colorado, Kansas, Idaho, Wyoming, the Dakotas 
 and Utah, the people of which are entirely ignorant, as a rule, of 
 shipping matters. Would it not be equally just on their part to com- 
 
 Elain that we were taxing them to maintain your ships on the coast 
 ere? You would be doing just as much injustice to them as you 
 would in the other case by imposing tariff duties on raw materials. 
 
 Mr. Howes. I hardly think that is the case. If you carry that to 
 its logical conclusion, it would apply to every expenditure the 
 Government makes. 
 
 Senator Mallokt. Can you fi-ame any such law which is not going 
 to bear hard on some part of the community ? If you are going to 
 rehabilitate your shipping, do you not have to pay for it? 
 
 Mr. Howes. It seems to me there is this difference to be drawn 
 between the two propositions. One is made under a national appro- 
 priation, paid for by the national tax. In the other case you create a 
 system by which you distinctly provide that the expense shall be met 
 and paid for by a class of the community. That, it seems to me, is 
 contrary to our system of Government. 
 
 Senator Malloky. I think that is rather a bald assumption. 
 
 Mr. Howes. If 1 may be permitted to explain myself, I should say 
 that there is no reason, on the line of argument which you have just 
 advanced, Mr. Senator, why Colorado and Utah and the other States 
 3'ou have mentioned should not protest against an appropriation for 
 coast defenses. They will never be invaded. No nation under the 
 sun is ever going to mai*ch her troops 1,500 miles into the interior of 
 this country. These States are perfectly safe. Why should they be 
 taxed to defend the port of Boston or the port of New York ? 
 
 Senator Malloky. There is some distinction between the national 
 defense and the matter of building up the individual business of ship- 
 owners along the coast. 
 
 Mr. Howes. This is a general business. 
 
 Senator Malloky. It is a general business. 
 
656 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Mr. Howes. It is supposed to be in aid of the national defense. It 
 is usually brought out in that way. 
 
 Senator Malloky. There has been an attempt to make it appear as 
 if it was a part of the national defense, but I have not yet discovered it. 
 
 Mr. Howes. May I proceed? 
 
 Senator Mallory. 1 will not interrupt you any further. 
 
 opposed to subsidy, also. 
 
 Mr. Howes. 1 have very little faith that it will be possible by any 
 system of bounties to stimulate or rehabilitate the American mer- 
 chant marine, so long as the initial cost of building vessels is so 
 much higher in this country than it is abroad. I feel confident from 
 my own experience that it is the initial cost of the vessel and not the 
 cost of maintenance which determines whether the business is or is 
 not profitable. Of course you may have special obstacles thrown in 
 the way, such as gentlemen have referred to this morning, relative to 
 the treatment of crews and the like, which constitute an expense that 
 other nations'do not have to bear. 
 
 Last year in England I was told by people who are in the shipping 
 business that they nad just then made a contract to have built for them 
 a 7,000-ton steam freighter for £7 per registered ton. That is $34. 
 It was a rough vessel for carrying coal to the Mediterranean and 
 elsewhere. 
 
 Senator Lodge. Do you mean dead weight carrying capacity '( 
 
 Mr. Howes. I mean registered tonnage. She was to be delivered 
 ready for sea, everything on board. I doubt whether a vessel of that 
 kind could be built in this country at less than $60 a ton, and if at 
 $60 it would be considered a low price. It may be that the conditions 
 in England were more favorable to construction last year than they 
 would be now or were three or four years ago, but when 3^ou take 
 into account that each year it is necessary to charge oflf on shipping 
 property, particularly during the first years, a very large percentage 
 of value for deterioration, when you take into account that you have 
 also to insure the entire investment made in a vessel, and also lose or 
 get the interest on this extra expense of construction, you will find, 
 I think, that with an English vessel of the type I am describing and an 
 American vessel of the same type, if the expense of maintenance was 
 the same, the difference in original cost would be sufiScient to enable 
 the Englishman to make a fair profit on his investment, charging off 
 the proper deductions from year to year, while the American ship- 
 owner would not be able to make a cent over and above his running 
 expenses. This initial cost is the tremendous difficulty that is in the 
 way. 
 
 It is often said that our cost of maintenance on our ships is much 
 higher than the English cost. It was also higher between 1850 and 
 1860. At that time my people were in the shipping business, as they 
 had been for several generations. The pay my father's firm gave to 
 its officers and men was twice and sometimes two and a halt times 
 higher than was paid at the same time to English men and officers. 
 
 The Chairman. On sailing vessels ? 
 
 Mr. Howes. On sailing vessels. 
 
 The Chairman. The initial cost was cheaper here than abroad. 
 
 Mr. Howes. Yes, sir; and the American merchants could well afford 
 to pay higher wages, as they received their return in much more 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 657 
 
 efficient service. It did not cost any more, it probably did not cost 
 as much, to run an American vessel at that time with these high rates 
 of wages as it did to run an English vessel. 
 
 This first cost is, I think, the main difficulty at the present time; 
 and yet I am not trying to urge that the only recommendation that 
 you should make should be low-priced or free ships. There are those, 
 I know — and they form a potent force — who disagree with me entirely 
 in that, and believe it is not a (juestion of initial cost, but one of 
 maintenance. 
 
 FREE SHIPS FOR FOREIGN VOYAGES. 
 
 My proposition is that in recommending a new policy in this respect 
 you adopt something akin to the French policy so far as its compre- 
 hensiveness is concerned. If you are prepared to report to Congress 
 the desirability of having a general subsidy system, accompany this 
 with the proposition that hereafter any American merchant or any 
 American citizen can buy and have transferred to an American reg- 
 ister a foreign-built vessel, provided such vessel receives no subsidy 
 whatsoever for any service it performs, and engages only in foreign 
 voyages. Now it seems to me 
 
 Senator Lodge. Let me understand you. You propose in admit- 
 ting a foreign ship to our register that it shall not earn any subsidy? 
 
 Mr. Howes. No subsidy whatsoever. 
 
 Senator Lodge. And that all subsidies granted shall go to Amei'ican- 
 built vessels? 
 
 Mr. Howes. Yes, sir. 
 
 Senator Lodge. That is the universal practice in other countries ? 
 
 Mr. Howes. I think it is in France. 
 
 Senator Lodge. It is certainly the case in England. 
 
 Mr. Howes. It seems to me under those circumstances you would 
 have the opportunity, without interfering one with the other, of try- 
 ing and testing two methods of rehabilitation. 
 
 I believe that the free-ship plan would work out in the end a better 
 result than the other. There are gentlemen who think otherwise; but 
 what I am finding fault with is tnat my friends who are advocating 
 subsidies are not willing to allow me to go to England and purchase a 
 vessel and sail it under the American flag without a subsidy. They 
 seem in this to lack faith in the efficacy of their. own remedy, because 
 if they believe that after I have purchased an English steamer I can 
 compete successfully with their American subsidized vessels, how will 
 it be possible for them to compete with the English, who are now in 
 practically the same position I would like to put myself in. 
 
 Senator Lodge. You would confine free ships to the foreign trade? 
 
 Mr. Howes. I would confine them to the foreign trade. 
 
 Senator Lodge. Do you think that could be practically done ? 
 
 Mr. Howes. I think the only possible doubt would be in this respect 
 to the very longest coastwise voyages. It would be to some extent 
 unfortunate not to permit such a vessel to trade between the Atlantic 
 and the Pacific coasts of the United States, and to prevent her from 
 entering into voyages to the Philippine Islands, but beyond that I think 
 the differentiation in the class of tonnage is so great that when a vessel 
 is built of 7,000 or 8,000 tons, there are only certain classes of business 
 in which she can engage, and they are not, thus far at least to any 
 great extent, coastwise business. 
 
 3a— 04 42 
 
"658 HEARINGS BEi-'ORE THE MERCHANT MARINE COMMISSION. 
 
 FRENCH FAILURE UNDER FREE SHIPS. 
 
 The Chairman. Is it not a fact that under the free-ship policy of 
 France, continued, I think, up to 1881, her shipping greatly declined? 
 
 Mr. Howes. I suppose it did, and it has also declined under the 
 subsidy system. 
 
 Several Gentlemen. Oh, no. 
 
 The Chairman. That is not true. 
 
 Mr. Howes. 1 understand that until the subsidies were very greatly 
 advanced, as they were a few years ago, it was true — taking it from 
 1892 onward. 
 
 The Chairman. I have an impression that the record shows that 
 under the subsidy it has not increased as much as they anticipated it 
 would. 
 
 Mr. Howes. It may be that 
 
 The Chairman. But that there has been a decline is not a fact. 
 
 Mr. Howes. I think that in such matters the result is determined 
 by maritime aptitude. This is what we have in this country to a very 
 great degree, more so perhaps than any other country, and hence the 
 limitations and difficulties which have been imposed upon us are a good 
 deal of our own making. 
 
 FRENCH SUCCESS UNDER SUBSIDY. 
 
 Senator Lodge. As the question has been raised about the French 
 tonnage I will quote the figures from page 191 of the report of the 
 Commissioner of Navigation for 1903. I obsei-ve that the French 
 tonnage has increased. The gross tons of steam tonnage increased from 
 805,000 tons in 1890 to 1,139,000 in 1903, and that advance I observe 
 has been steady. In sail it has advanced from 298,000 tons in 1890 to 
 535,000 tons in 1903, nearly twice as much. 
 
 Mr. Howes. Do you remember. Senator Lodge, the year the increase 
 in bounty was made? 
 
 Senator Lodge. 1 do not remember when the second increase took 
 place. 1 assume it was under the present law. 
 
 Mr. Howes. There is one other matter, if you will permit me, to 
 which 1 will refer before closing. 
 
 It has been said, I think, before your Commission, that a system 
 which permits of the purchase under any conditions of foreign-built 
 ships, that is, the adoption of the free-ship policy, is un-American. 
 It seems to me that that is a demagogic argument in its way. I dare 
 say that gentlemen on this Commission are wearing clothes, the cloth 
 in which was made abroad, but I doubt if they consider it un-American 
 to do this. If they drink wine, they probably drink wine which has 
 been imported rather than that produced in California. 
 
 The Chairman. A good deal of the California product is exported 
 and then imported, is it not? 
 
 Mr. Howes. Perhaps so, and labeled "France." 
 ^ Also, within the last few years the boot and shoe manufacturers of 
 Germany and England have bought in Lynn and elsewhere, large 
 amounts of our machinery and taken it home for the purpose of using 
 it, as tools in their trade, for the cheaper manufacture of boots and 
 shoes for their own people. We did not consider such proceedings to 
 be un-Gcrman or un-English. We looked upon them as very shrewd 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 659 
 
 business practices on the part of foreigners. The ship is the tool of 
 trade of the merchant, and if you can permit him, without interfering, 
 we will say, with a domestic policy which the country pursues, to get 
 his tool for the fbreign'trade in the place where he can get it cheapest 
 and get the most useful tool, 1 can not see what there is in it that is 
 un-American except as a matter of sentiment. 
 
 Another point has been raised as to the greater cost of maintaining 
 our American vessels. 1 think there is a good deal, I will not say of 
 deception, but of misunderstanding on this subject. We draw our 
 illustrations from shipments made on this side; that is, in America, so 
 that the Norwegian sailor, as was described by Mr. Atkins yesterday, 
 who ships in New York or Boston or Philadelphia on an American 
 vessel endeavors to get American wages, and possibly is quite justified 
 in doing so. But I am inclined to think — I admit 1 do not know anj'- 
 thing about it; but I venture this on general grounds, that if Mr. 
 Winsor's steamer, the Pleiades, is shipping a crew of men in Yoko- 
 hama or Hongkong, the pay given is no more than the current rate of 
 wages there; the same wages that the English or German or other 
 ships are giving. There is no race of American sailors. I went on a 
 number of sea voyages as a boy and at that time the sailors were indeed 
 American born and American bred, but they are not so now. 
 
 We may add to the sailor's song: " In every mess I find a friend, in 
 every port a wife," " I find a nationality in every country to which I 
 go." bailors are a nondescript class, as a rule. They will, under cer- 
 tain conditions, in foreign ports, or what would be to others foreign 
 ports, ship upon anj' ship with an entire indifference as to what its 
 nationality may be. And I do not believe that the high wages given 
 to so-called American sailors constitutes in itself so great a barrier to 
 maritime success as some of those who have addressed you seem to 
 suppose. 
 
 THE FRENCH SUBSIDY AGAIN. 
 
 Senator Lodge. In connection with the matter of the French sub- 
 sidy there has been handed to me a copy of the consular report. The 
 law of 1893 is the second law. 
 
 Mr. Howes. 1 thought it was about ten years ago. 
 
 Senator Lodge. It increases slightly what was given in 1881. I find 
 that the gross tonnage of vessels taking part in foreign trade in 1880 
 was 322,000, not including subsidized postal steamers. Under the law 
 of 1881 this tonnage was increased to 501,000 in 1885 — an augmenta- 
 tion of 180,000 tons. So the shipping has increased under both laws. 
 
 Mr. Howes. Did that last indude also the tonnage that was subsi- 
 dized by mail pay, so that the comparisons are the same ? 
 
 Senator Lodge. Oh, no; this is only a comparison 
 
 Mr. Howes. Of the unsubsidized ? 
 
 Senator Lodge. Of the unsubsidized; that is all. 
 
 The Chairman. I have been interested in your presentation of the 
 case, Mr. Howes. I think I clearly understand you to favor the policy 
 of free ships for the foreign trade? 
 
 Mr. Howes. I favor it; and I think if there is no other means of 
 obtaining freedom except by employing both methods — both the general 
 subsidy and free ships — and if the Government has unexpended bal- 
 ances in the Treasury which it is willing to devote to the purpose, it 
 might just as well use them in this way. I think it is desirable to have 
 
660 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 something done, simply on the broad, general principle that shipping 
 is a great national industry; but mere subsidies will not be permanently 
 effective. You will in this way build your industry upon stilts, and 
 then some change in the policy of the Government will knock the stilts 
 out from under it and it will fall. Would it not be as well to try the 
 two methods at the same time, give the opportunity of free ships and 
 the opportunity of subsidy, and let it be a survival of the fittest ? What 
 is wanted is not any particular method, but a result — an end — a large 
 American commerce. 
 
 The Chairman. Then you do not per se object to a subsidy ? 
 
 Mr. Howes. I do per se, unless accompanied by the alternative; but 
 I can understand that it may be better to endure what I should call 
 a farcical attempt, bound in the long run to prove unsuccessful, than 
 lose all opportunity by resisting this. 
 
 FREE SHIPS ALONE INADEQUATE. 
 
 The Chairman. In the great desire on the part of the Commission to 
 get information we have welcomed the advocates of free ships and the 
 advocates of every other possible method to rehabilitate the American 
 merchant marine, but every person who has testified before this Com- 
 mission in favor of free ships, as I now recall, has coupled his statement 
 with the admission that free ships would not solve the problem unless in 
 some way they could meet the subsidies of foreign ship lines, and by 
 a change or repeal of our navigation laws get rid of the requirement 
 that American ships engaged in the foreign trade shall employ Ameri- 
 can officers and give a food schedule generally admitted to be superior 
 to that of foreign vessels. Their point has been that the mere matter 
 of getting free shijjs would not enable them to sail them in compe- 
 tition with the subsidized foreign ships, cheaper manned and cheaper 
 operated. 
 
 Mr. Howes. That, j'ou say, is the opinion of those who have advo- 
 cated free ships ? 
 
 Senator Lodge. Yes. 
 
 The Chairman. Yes; those who have advocated that idea before the 
 Commission. 
 
 Mr. Howes. Mr, Brewer has spoken and I did not understand him 
 to take that ground. 
 
 The Chairman. Possibly not. 
 
 Senator Mallory. I do not think it is true of every case. 
 
 Senator Lodge. It is in most of the cases. 
 
 The Chairman. It may not have been in every case. I will qualify 
 that and have it go into the record that in most cases they have done so. 
 
 Mr. Howes. There are undoubtedly difficulties in the way, but it 
 seems to me, that so far as the American officer is concerned, he is to be 
 the product of any rehabilitation. You can not get him now because 
 you offer no inducements. As I told you, I went to sea in the Pacific 
 Mail for the purpose of perfecting myself in a knowledge of American 
 merchant marine interests, but I gave it up. There was. no reason for 
 my continuing. If, however, there is opportunity, I think men will be 
 forthcoming. We find no trouble in Massachusetts, for instance, in 
 getting a large number of young men to go on the Enten-prise to be 
 trained in the theoretical and to some extent the practical points of 
 maritime life. They like it, ahd they would like to get opportunities 
 to employ themselves after they graduate. 
 
HEABINGS BEFORE THE MERCHANT MARINE COMMISSION. 661 
 
 ENGLAND AND FEEE SHIPS. 
 
 ( 
 
 The Chairman. Is it not rather a significant fact that during the 
 days when we could build wooden ships more cheaply than England 
 she did not have the free-ship policy, but when we got around to the 
 construction of a different class of vessels and England could construct 
 them more cheaply than we could, then she thought the free-ship 
 policy was desirable? 
 
 Mr. Howes. I beg your pardon; I think you are wrong there on 
 your basis of fact. England adopted the free-ship policy in 18-49, I 
 think. At that time and for years afterward we could build ships a 
 great deal cheaper than the English. The use of iron for sailing ships 
 was hardly general until the latter sixties or the early seventies, and 
 prior to that we sold a large number of vessels to the English. My 
 father's firm, I know, had them built here and sold them to the English. 
 It was in this that the English showed their great business judgment. 
 They were losing their ocean carrying business. During the decade 
 from 1851 to 1861, when we reached the zenith of our maritime pros- 
 perity, we were driving the English from the sea because we had 
 cheaper and better manned ships than they had. Their policy was to 
 prevent this; and, knowing the high cost of their vessels, they repealed 
 their laws, which had been the same as ours, and began purchasing our 
 vessels in la-rge numbers to save themselves. 
 
 FREE SHIPS POSSIBLE NOW. 
 
 Senator Mallort. On the point of purchasing ships wherever we 
 can giet them cheapest, we can now purchase a ship from England and 
 man her with an English crew and run her. 
 
 Mr. Howes. And do. 
 
 Senator Mallory. And do. We have eight hundred thousand tons, 
 I think, of such shipping owned largely by Americans. If you per- 
 mit us to buy free ships, to buy ships in any land we choose to go to, 
 what difference will there be practically, so far as the interest of the 
 individual is concerned, between purchasing a foreign ship now and 
 manning her with foreign crews and officers and purchasing a foreign 
 ship under such a law and manning her with American officers and 
 running her. What will be the practical difference. Would it be 
 more expensive under the latter method than the former ? 
 
 Mr. Howes. I think it very hard to say what the ultimate result 
 would be. It may be largely a question of sentiment. At present 
 the J. Pierpont Morgan syndicate, which owns the steamers of the 
 various lines which it has purchased, is representative of American 
 capital, but you gentlemen have been told at your various hearings 
 that the freight earnings this syndicate receives are a toll or tribute 
 paid to foreigners, although it goes into American pockets, so far as 
 there is a'ny profit. 
 
 A SENTIMENTAL CONSIDERATION. 
 
 What I think is that this wish to rehabilitate the American mer- 
 chant marine is to a great extent a sentimental consideration, but it is 
 desirable that we should have a rounded-out industrial development, 
 even if to some extent we have to pay for it. 
 
662 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Senator Malloky. If the law permitted it, do you think it would 
 pay nie to purchase an English-built ship and put her under the 
 American flag and run her with American officers f 
 
 Mr. Howes. 1 think manj would do it. 
 
 Senator Mallory. Do you think it would pay ? 
 
 Mr. Howes. That would have to be a matter of experience. I can 
 not SHY- I never met an American shipbuilder who did not object 
 to the repeal of the law as to the purchase of foreign-built vessels, at 
 the same time insisting that if the law was repealed no purchases of 
 this kind would be made. That is a contradiction which I have never 
 jet understood. 
 
 Senator Mallory. We know it to be a fact, brought out not onlj' 
 by the testimony before this Commission, but by other testimony on 
 various occasions, that the expense of running an American ship under 
 the American flag under the present laws is 30 per cent greater than 
 that of an English ship, and 1 suppose considerablj^ more than that as 
 compared with a'Norwegian or Italian ship. 
 
 Mr. Howes. Yes. 
 
 Senator Mallory. Now, if that is so, would it not be rather a leap 
 in the dark to change our whole system and to authorize the purchase 
 of foreign-built ships and running them under the American flag? 
 
 Mr. Howes. 1 do not think they would be run at a loss. I do not 
 think that the unit of expense for wages is any criterion as to cost. 
 This gentleman beside me recently spoke about the Tlwmas W. Law- 
 son. The Zawson pays its sailors a great deal more than any English 
 coastwise vessel pays her crew, but the tonnage cost of transportation 
 by the Zawson is probably less than by any English vessel that sails 
 on the coast of England. Of course we pay our men more than thej' 
 do. In ceitain industries which we carry on in this country — for 
 instance, in the boot and shoe industry— we pay our operatives much 
 higher pay than is given in England or Germany, but the labor cost of 
 our product is less than the foreign cost. 
 
 Senator Malloky. The Zawson employs relatively less m,en. She 
 has better facilities; she has steam; she has American methods That 
 answers that. 
 
 NOT UNTIL 1854. 
 
 The Chairman. In what year did I understand you to say the free- 
 ship policy was adopted bj^ England ? 
 
 Mr. Howes. In 1849. 
 
 The Chairman. Is it not the fact that it did not become operative 
 until 1854? 
 
 Mr. Howes. I do not know the date. 
 
 Senator Lodge. Lloyds kept up a discrimination until 1854, which 
 practicallj'^ nullified it. 
 
 The Chairman. Is it not a fact, so far as our sales of ships to Great 
 Britain are concerned, that we sold more in 1864 than we did from 
 1854 to 1860? 
 
 Mr. Howes. I should say in 1862 and 1863 and 1864, when the Ala- 
 hama was around, our largest sales were made. 
 
 The Chairman. 1 think the record will show that at the close of 
 the civil war the value of ships decreased to such an extent that we 
 sold more tonnage in 1864 than we sold from 1850 to 1860. 
 
HEAKINQS BEFOKE THE MEBCHANT MARINE C0MMI8S10K. 663 
 
 Mr. Howes. That was because of the tremendous expense of keep- 
 ing American tonnage afloat when war premiums had to be paid to pro- 
 tect it against the Mabavia and the Shenandoah and other vessels. 
 
 THE CUNARD SUBSIDY. 
 
 The Chairman. That i^ undoubtedly the case. On the question of 
 free ships you are familiar, I suppose, with the recent subsid}', if we 
 can call it a subsidy-, given by Great Britain to the Cunard line? 
 
 Mr. Howes. Yes, sir. 
 
 The Chairman. For two great steamships which that line is about 
 to build? 
 
 Mr. Howes. Yes, sir. 
 
 The Chairman. Is it not a rather significant fact that Great Britain 
 provides in that agreement that those ships shall be constructed in 
 Great Britain of material of British origin ? 
 
 Mr. Howes. I should say that the Government was paying enough 
 to put on almost any condition it wanted to. 
 
 The Chairman. But it rather explodes the free-ship idea so far as 
 England is concerned? 
 
 Mr. Howes. 1 think all nations are sensitive, and I think Great 
 Britain is peculiarly sensitive in everything which relates to her mer 
 chant marine, and that this tremendous bounty — and it is a bounty in 
 fact — given to the Cunard Company grows out of the success which 
 Morgan attained in coiTalling most of the other English lines. It was 
 simply given to enable the Cunard Line to stand out against him. 
 
 ENGLISH MAIL SUBSIDIES. 
 
 Senator Lodge. If subsidies are so unwise and useless as you think 
 them, what do you think has induced England to maintain them so 
 long? 
 
 Mr. Howes. 1 did not suppose that England had maintained any 
 general system of subsidies other than mail subsidies. 
 
 Senator Lodge. It amounts to the same thing. 
 
 Mr. Howes. I beg your pardon, Mr. Lodge. 1 should say that 
 England's real merchant commerce is her freight-carrying commerce. 
 It is the thousands upon thousands of freight steamers and partly 
 tramp steamers that constitute her maritime greatness rather than 
 such lines as the P. & O., which she has to maintain to India for 
 strategic or military purposes. 
 
 Senator Lodge. What do you suppose induces England to spend 
 $5,000,000 or $6,000,000 in mail subsidies? Of course they are sub 
 sidles, because the mail can be carried at a very small cost compared 
 with the amount given. 
 
 Mr. Howes. Of course it depends upon the speed required. It is 
 much the same as we do in our pay for star-route service. 
 
 Senator Lodge. Star routes do not constitute a fast-mail service. The 
 star routes are under contracts, and the mails on them are largely car- 
 ried by horse and wagon. 
 
 Mr. Howes. They are routes, however, where the mail returns are 
 quite insufficient to pay the expense, as I understand. 
 
 Senator Lodge. We also pay our railroads very heavily, do we not? 
 
 Mr. Howes. I dare sav the Government receives in that respect 
 what it pays for. There is a difl'erence of opinion there. 
 
664 HEARINGS HEFOEE THE MEECHANT MAKIKE COMMISSIOK". 
 
 Senator Lodge. You do not regard the English payment of five or 
 six millions as a subsidy? 
 
 Mr. Howes. No, sir. I think you will find that our own consul- 
 general — I think it was Consul-General New, who was in London — in 
 a consular report made a few years ago, emphasized the point that it 
 was not; that you could not consider the money paid by England as a 
 shipping subsidy. 
 
 Senator Lodge. Do you regard the gift of those vessels to the 
 Cunard line as a subsidy ? 
 
 Mr. Howes. I think that is subsidy pure and simple, growing out 
 of what may be called an almost insane fear. 
 
 Senator Lodge. You would not regard it as a subsidy if the United 
 States were to pay out to ships five or six millions a year in that form? 
 
 Mr. Howes. 1 think if it were to pay to maintain a line of steamers 
 to the Philippine Islands from San Francisco, say a million and a half 
 or two millions a year, a line which was to run very fast steamers, it 
 would probably be the right thing to do. 
 
 Senator Lodge. I am not talking about running to the Philippines. 
 They are under our control. England pays large subsidies to vessels 
 running to other places than her colonies. She subsidizes lines run- 
 ning to this country. 
 
 Mr. Howes. They are to some extent, within the range of her 
 colonial system. 
 
 IS THE UNITED STATES A COLONY? 
 
 Senator Lodge. Is the United States within the range of her colonial 
 system ? 
 
 Mr. Howes. No; but the mail to Canada comes on them. 
 
 Senator Lodge. Do you mean that she does not subsidize lines to 
 the United States? 
 
 Mr. Howes. She does; but I say that the mail system to Canada is 
 much more dependent upon vessels sailing to the United States than 
 it is on vessels sailing between Canada and England. 
 
 Senator Lodge. She subsidizes lines running to the United States? 
 
 Mr. Howes. Yes, sir; and sends the Canadian mails over those lines. 
 
 Senator Lodge. And sends the Canadian mails on those lines ? 
 
 Mr. Howes. Yes, sir. 
 
 The Chairman. She does ? 
 
 Senator Lodge. Undoubtedly. 
 
 Mr. Howes. Yes. It may be justified on the ground of a mail sub- 
 sidy, because it is so used. 
 
 Senator Lodge. You do not regard those as subsidies. I suppose, 
 then, it would be all right for the United States to do likewise? 
 
 Mr. Howes. No. Tne only subsidies which I understand are paid 
 are certain mail subsidies. There is the cruiser basis — the possibility 
 of taking the vessels. 
 
 Senator Lodge. I am not talking about that. 
 
 Mr. Howes. That is a part of her system. The subsidy paid to the 
 Cunard Company is undoubtedly a subsidy pure and simple, growing 
 out of an insane fear 
 
 Senator Lodge. What do you call the subsidy granted to the line 
 running to Jamaica? 
 
 Mr. Howes. I would call it a colonial subsidy. 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 665 
 
 Senator Lodge. You think it is all right to subsidize colonial lines ( 
 Mr. Howes. Just as you subsidize a mail line anywhere in our 
 
 country. You pay for a prompt mail service, independent of what you 
 
 get out of it. 
 
 THE GERMAN PRACTICE. 
 
 The Chairman. On the question of free ships, Mr. Howes, am I cor- 
 rect in the belief that in 1885 the German Government gave $1,000,000 
 for an Asiatic service — I think to the North German Lloyd Company — 
 on condition that the ships should be built in Germany ? 
 
 Mr. Howes. Quite likely. I think that is the case. 
 
 Senator Lodge. Was that a subsidy % 
 
 Mr. Howes. I am inclined to think it was. But it may be said that 
 it could not have had very much effect in building up the German 
 merchant marine by other companies and by other owners than the 
 North German Lloyd. That subsidy was shared, I believe, to some 
 extent by division with the Hamburg- American Line on the East India 
 service. 
 
 The" Chairman. I have noticed that in Germany they have certain 
 other indirect methods of aiding shipbuilding. For instance, the 
 imperial railways haul at cost material for shipbuilding, and, if I am 
 not mistaken, they haul goods 
 
 Senator Mallort. For exportation. 
 
 The Chairman. For German ships at preferential rates, and in vari- 
 ous ways they aid the shipbuilding industry. 
 
 Mr. Howes. 1 am inclined to believe that under the present sov- 
 ereign there have been certain indirect methods adopted. How far 
 they have really been efficacious 1 am unable to say. All that one 
 knows is their existence. 
 
 Senator Lodge. You do not think they are of any assistance? 
 
 Mr. Howes. I do not see how they are, but I do not say they are 
 not. 
 
 Senator Mallort. If the recent immense subsidy which England 
 has given to the Cunard Line is to be taken as a basis of figuring for 
 subsidies, have you any idea, on such a basis as that, what it would 
 cost to rehabilitate our merchant marine ? 
 
 Mr. Howes. I should think it would be equivalent to giving any 
 man who applied for it all the money needed to build his ship and then 
 guaranteeing him a profit for sailing it. 
 
 Senator Mallort. That is about the theory. 
 
 Mr. Howes. Pretty nearly. 
 
 ITALT and japan. 
 
 The Chairman. In reference to the relative efficacy of free ships 
 and subsidies, while we are not in any wise committed to the doctrine 
 of direct subsidies, I think it is a historical fact that the merchant 
 marine of Italy under free ships languished, but under subsidies it has 
 greatly increased. Is not that true? 
 
 Mr. Howes. I could not dispute it. It seems to me that if a country 
 is willing to tax itself sufficiently to make an industry profitable, no 
 matter how badly it is run, it can build up the industry. Whether it 
 is worth while doing it is another matter. 
 
666 HEARINGS BEFOEB THE MERCHANT MARINE COMMISSION. 
 
 The Chaieman. The most striking examples is that of Japan. You 
 are familiar, I suppose, with the great rise in the merchant marine of 
 Japan. I think the record shows that she increased her tonnage from 
 1.50,000 in 1890 to 730,000 in 1903, an enormous increase; and that 
 has been done under some form of subsid}\ 
 
 Mr. Howes. I should suppose a very slight one. As the Japanese 
 consul in Boston I have had occasion to go somewhat into the outgo of 
 the Empire, and it seems to me they have not a great deal of money to 
 devote to any purpose. 
 
 Senator Lodge. Can you say what they pay to the line to Puget 
 Sound? 
 
 The Chairman. It is heavily subsidized. 
 
 Mr. Howes. I think that is the most heavily subsidized line. 
 
 Senator Lodge. It is $325,000. I do not know whether you would 
 call it a trifling subsidy or not. 
 
 Mr. Howes. I mean relatively. 
 
 RAILROAD DISCRIMINATIONS. 
 
 Senator Mallort. Reference has been made to the fact that the 
 German Government on its State railroads discriminates in favor of 
 -German steamship lines and its German vessels generally for the trans- 
 portation of freight intended for export. Do you know anything about 
 the railroads in this country discriminating in rates to the seaboard 
 between freight intended for domestic consumption and freight 
 intended for exportation ? 
 
 Mr. Howes. The only experience I have had is in Boston, and this 
 has taught me that the charge made for freight going to Europe from 
 Chicago, via Boston, is less to Boston than on freight intended to be 
 consumed in Boston. 
 
 Senator Lodge. I think that is true all over the country. 
 
 Senator Mallory. That is in favor of transportation lines in general 
 and not in favor of American commerce particularly? 
 
 Mr. Howes. Yes, sir. 
 
 THE BRITISH POLICY AGAIN. 
 
 Senator Lodge. I understand that on the matter of mail subsidy you 
 do not regard the English payments to the lines running to this country 
 as a subsidy, because those steamers bring the Canadian mails? 
 
 Mr. Howes. As I understand, the subsidies do not apply to their 
 freight-carrj'ing lines. 
 
 Senator Lodge. I understand. I am talking entirelj' of the mail 
 subsidies. I understand you to say they are not subsidies, because 
 they are on the same basis as our star routes. 
 
 Mr. Howes. Yes, sir. 
 
 Senator Lodge. I understand you to say that the subsidies which 
 the British Government pays to lines running to the United States do 
 not come within your definition of subsidies, because the steamers 
 carry Canadian letters? 
 
 Mr. Howes. They carry Canadian mails. They constitute a fast- 
 mail route for Canada. 
 
 Senator Lodge. Suppose we subsidize a ship carrying mails which 
 sails from Liverpool and would go via Suez to the Philippines. That 
 would take it out of the range of a subsidy, would it not? 
 
HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 667 
 
 Mr. Howes. I think that would be a rather more strained construc- 
 tion than the other. 
 
 Senator Lodge. I see. I thought you would think po. 
 
 Representative Humpheet. There is a line of steamers running from 
 Vancouver, the Empress Line, to China and Japan. 
 
 Mr. Howes. Yes. 
 
 Eepresentative Humphrey. They are paid $300,000 a year. Do you 
 consider that a subsidy? 
 
 Mr. Howes. Well, it may be. It is partly mail, 1 should say. I 
 beg your pardon if I add one more port. Those steamers go to 
 Hongkong. 
 
 Representative Humpheet. They go to Hongkong. 
 
 Senator Lodge. You think if we gave a subsidy to an American 
 ship sailing from Boston to Liverpool, it would be a subsidy and 
 economically objectionable, but it is all right for England to give a 
 subsidy to the Empress Line running from Vancouver to Hongkong, 
 because it runs to an English port ? 
 
 Mr. Howes. Partly that. The other ground is this 
 
 Senator Lodge. 1 am not disputing the proposition. I want to get 
 your views. 
 
 Mr. Howes. England has large political interests all over the world 
 and we have not, and her policy requires that she shall have certain 
 lines of fast steamers running to various points for mail purposes and 
 , for what may be termed strategical and military purposes. These 
 needs do not enter into our calculation or at least only to a very small 
 extetit as far as concerns Hawaii, the Philippine Islands, and Porto 
 Rico. 
 
 NOT THE HEAVIEST. 
 
 Representative Humpheet. The Japanese line that runs to San 
 Francisco is subsidized- to the extent of $600,000 a year. 
 
 Mr. Howes. No. 
 ^Sei^ktej;, Lodge. No; it is |325,000. 
 
 Represefetative Humpheet. No; that is the Puget Sound line. The 
 Japanese line between San Francisco and Japan is subsidized to the 
 extent of $600,000 a year or a little more. 
 
 Mr. Howes. I did not know that was the case. 
 
 Representative Humpheet. That is the best information we have. 
 I understood you to say thejine running to Puget Sound was the most 
 heavily subsidized Japanese line. 
 
 Mr. Howes. So I understood. 
 
 Senator Mallokt. On the question of mail subsidy,! do not exactly 
 understand whether j'^ou are opposed to mail subsidies that are other 
 than colonial. Suppose we should find it desirable to establish a reg- 
 ular mail line, say twice a month, between New York and Rio Janeiro 
 or between New York and Buenos Ayres. Do you think we would be 
 justified in granting a mail subsidy over such a line, the conditions 
 being, of course, that there should be reasonably prompt delivery and 
 reasonable speed, merely for the purpose of opening trade and opening 
 new markets ? 
 
 Mr. Howes. I think it might be defended as a matter of national 
 policy; but I should not wish to have it put in the act that it was for 
 the purpose of rehabilitating the American merchant marine generally. 
 It would not be, because it would be a favor granted to a certain line, 
 or it might be a payment to a certTain line for a certain service, I 
 
668 HEAEINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 understand that the English Government can not get any other line 
 than the P. & O. to take its mail contracts to the East, because there 
 is not enough money in it. 
 
 SUSTAINING THE BRITISH POLICY. 
 
 ^Senator Lodge. There i.s one other question. France has rfciwh 
 heavier tonnage dues than we have. I think England has somewfet 
 heavier ones. England has light dues, and we charge none. Do j'ou 
 thinlj it would be a good thing to make our tonnage dues equal to the 
 others and put on light dues like the others ? 
 
 Mr. Howes. That is, as a fund for subsidies, I understand? 
 
 Senator Lodge. As a fund for subsidies. 
 
 Mr. Howes. I think it would be more desirable if you are going to 
 pay subsidies at all to pay them by direct vote out of the United States- 
 Treasury and not attempt to impose burdens upon any form of com- 
 mercial intercourse. 
 
 Senator Lodge. Why do you suppose the English do it? 
 
 Mr. Howes. It may be that in England they can get the money 
 easier in that way than in any other. You are asking my opinion oa 
 her policy ? 
 
 Senator Lodge. I asked your opinion because 1 thought you rather 
 sustained the British policy. 
 
 Mr. Howes. Oh, no; I am not sustaining England in the payment 
 of subsidies to the Cunard line, by any means. 
 
 Senator Lodge. I am afraid that could hardly be explained on the 
 colonial basis. 
 
 STATEMENT OF JOHN G. CROWLEY. 
 
 John G. Crowley appeared before the Commission. 
 
 The Chairman. What is your business ? 
 
 Mr. Crowley. I am at present general manager and treasurer of 
 the Coastwise Transportation Company. 
 
 The Chairman. We will be pleased to hear from you on any phase 
 of this matter. 
 
 Senator Mallory. What is the Coastwise Transportation Company f 
 
 Mr. Crowley. It comprises the Thomas W. Lawson 
 
 Senator Mallory. Where do its vessels run? 
 
 Mr. Crowley. Between coastwise ports. 
 
 Senator Mallory. Sailing vessels ? 
 
 Mr. Crowley. Sailing vessels. 1 am readj^ to answer anj^ question 
 which any gentleman may desire to ask. 
 
 The Chairman. You have heard much of the testimony given here ? 
 
 Mr. Crowley. I have heard part of it. 
 
 The Chairman. Your business is not in the foreign trade at all ( 
 
 Mr. Crowley. Our business is coastwise. We can not run foreign, 
 because it is impossible to run our ships foreign in competition with 
 English vessels or other foreign vessels. 
 
 The Chairman. You would do so if you could have conditions equal- 
 ized, I suppose ? 
 
 THE LAWSON BUILT FOR FOREIGN TRADE. 
 
 Mr. Crowley. Yes, sir. When we built the Lawson two years ao-o 
 we built her at a cost of $258,000, and fitted her up for foreign bu-i- 
 
HEARINGS «EFOEE THE MERCHANT MARINE COMMISSION. 669 
 
 ness, and at the same time we contracted for the schooner William L. 
 Douglas, a steel vessel, at a cost of $220,000, built at Fore River, 
 Quincy. Those vessels were adapted for the foreign trade. We 
 expected at that time to run them in 'the foreign trade to Manila and 
 those ports, but after we got them built we could not run them, and 
 the only way we can run them to-day is in the coastwise business. 
 ( The Chairman. After getting the ships, you were satisfied you 
 tould not run them profitably in the foreign trade? 
 
 ^Ir. Crowley. Yes, sir. It was not only because of the competi- 
 tion with English vessels. 1 will just illustrate it. On the 2d of May 
 we had a collision between one of our vessels and an English vessel, a 
 Standard Oil steamer under the English flag, and in gomg over their 
 accounts of settlement we found that they used some 25 or 30 men on 
 their vessel who were Chinamen or coolies. They were paying them 
 $6 to $8 a month. We were paying the men on the Henry 136. Talis; 
 about sailors and the expense of running that English ship with 135,000 
 cases of oil! It cost as much to run the T. Charlton Henry., carrying 
 4,000 tons-of coal, as it did that ship; that is, for the manning;'aH3 ; 
 it cost as much for grub, as we call it, to run the Henry as it did that 
 .ship. 
 
 Senator Malloey. How many men does the Henry carry ? 
 
 Mr. Cbowley. Thirteen. 
 
 jNIr. Plxjmmer. That is enough? 
 
 Mr. Crowley. It is plenty. On the Lawson we carry 12 before 
 the mast, 2 mates, a cook, a steward, 2 engineers. It has been alleged 
 here that that is not crew enough for a vessel like that, but it is ample. 
 
 NOT UNDERMANNED. 
 
 The Chairman. What have j'ou to say about the contention, which 
 has been made not only here but in Philadelphia and New York, that 
 as a rule American schooners and sailing ships are undei'manned ? 
 
 Mr. Crowley. No, sir; they are not undermanned. To-day a sailor 
 aboard an American vessel has not to put his hands to the pump. He 
 has not to put his hands to a rope, hardly. When 1 went to sea we 
 had to handle all cargo and pump vessels out by hand, and do all such 
 work as that, and to-day it is three times as easy as it was then. 
 
 The Chairman. You use steam ? 
 
 Mr. Crowley. Yes, sir; it is all steam. Some of our vessels are 
 even steered by steam. 
 
 The Chairman. That complaint has been very frequently made and 
 \evy persistently urged, ana if American sailing ^vessels are under- 
 manned it is a grievance of which Congress ought to take cognizance. 
 
 Mr. Crowley. I think our vessels are manned way up. If you put 
 any more men aboard them you would have to tie them up. We have 
 to compete with barges, where there are three barges in a string, and 
 they have about 4 men on them. 
 
 Senator Lodge. There has been a great deal of testimony that they 
 ai-e undermanned. 
 
 Mr. Crowley. I think they are undermanned, but the ^ame sized 
 schooner on which we carry three times as many men is not under- 
 manned, because it has steam to do everything with. 
 
 Representative Minor. Take the Lawson for instance. She carries 
 about 7,000 or 8,000 tons? 
 
 Mr. Crowley. 8,000 tons. 
 
670 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Representative Minok. Would she carry that much in the foreign 
 trade? 
 
 Mr. Crowley. Yes,, she would car,ry 7,500 to 8,000 tons. 
 
 RepresetftatiYe'MtNOE. 8he is" operated, of course, cheaper than a 
 steamer? 
 
 Mr. Crowley. Yes, sir. 
 
 Representative Minor. And you can not engage in the foreign trade 
 because you can not compete with foreign steamers? 
 
 Mr. Crowley. No, sir. 
 
 Representative Minor. Then what are our steamers doing? 
 
 Mr. Crowley. They can not do anything that I can see. 
 
 Representative Minor. That is just about what they are doing. 
 
 Mr. Crowley. Yes, sir; that is just about what they are doing. 
 
 FACTS ABOUT THE LAWSON. 
 
 Mr. Plummer. The manning bill would require the Lawson to 
 carry about 40 men. 
 
 Mr. Crowley. If we had 40 men, we would have to provide some 
 place in which to store them. 
 
 Representative Minor. If you should run the Lwwson abroad, and 
 then ship a crew over there, it would reduce your expenses somewhat? 
 
 Mr. Crowley. If we ship a crew • here, we have to ship them for 
 the round voyage. 
 
 Senator Mallory. What is the tonnage of the Lawsonf 
 
 Mr. Crowley. ( jross tonnage ? 
 
 Senator Mallory. Net tonnage. 
 
 Mr. Crowley. Her net tonnage is 4,800. 
 
 Senator Mallory. How many masts has she? 
 
 Mr. Crowley. Seven. 
 
 Senatory Mallory. How much is her draught of water? 
 
 Mr. Crowley. Twenty-eight feet of water. 
 
 Senator Mallory. In your judgment is a vessel of that class as safe 
 for ocean navigation and deep-water navigation as a square-rigged 
 vessel ? 
 
 Mr. Crowley. Yes,, sir. 
 
 Senator Mallory. There is no objection, based on the rig of these 
 four and five and six masted vessels, to their engaging in the foreign 
 trade ? 
 
 Mr. Crowley. No, sir. 
 
 Senator Mallory. You say the Lawson, as I figure it out, has 20 
 men, including the captain ? 
 
 Mr. Crowley. Yes; 20 men, including the captain. 
 
 Senator Mallory. Two mates ? 
 
 Mr. Crowley. Two mates. 
 
 Senator Mallory. How do the wages which you pay your masters 
 and mates compare with the wages paid on the large ships of foreign 
 nations ? 
 
 Mr. Crowley. I can not state definitely. We pay our sailors |3o 
 a month. . 
 
 Senator Mallory. We have that information. What do you pav 
 your masters and mates ? 
 
 Mr. Crowley. The master sails on primage and |50 a month; 5 per 
 cent of the gross earnings. 
 
HEARINGS BEFOBE THE MEECHANT MARINE COMMISSION. 671 
 
 Senator Mallort. Five per cent of the gross earnings? 
 
 Mr. Crowley. Yes, sir. The mate on the Lawson gets f76 a 
 month; the second mate g^ets 145, the engineer $50, the steward gets 
 165, the boy ^25, second steward. We allow the captain of that vessel 
 50 cents a day to feed the vessel, and he loses money, so he says. 
 
 Senator Mallort. Have you any difficulty in getting crews for 
 those vessels? 
 
 Mr. Crowley. We have not had any up to the present time. Some 
 vessels have. 
 
 STATEMENT OF J. L. MANSON. 
 
 J. L. Manson appeared before the Commission. 
 
 The Chairman. Are you the secretary of the Boston Marine Society ? 
 
 Mr. Manson. Yes, sir. 
 
 The Chairman. The Commission will be pleased to hear any state- 
 ment you wish to make. Captain. 
 
 Mr. Manson. Mr. Chairman and members of the Commission, as 1 
 have stated, I am secretary of the Boston Marine Society, one of the 
 oldest societies in Boston, incorporated in the year 1754, and it has 
 always taken a deep and active interest in all that pertains to the 
 country's commerce. 
 
 SHIPMASTERS FAVOR SUBSIDY. 
 
 It now consists of upward of 400 members, three-fourths or more 
 of that number being either past or present masters of American ships, 
 though the first terra, "past masters," includes the greater number, 
 made so, to a large extent, by the decline of American commerce. 
 Although I am not authorized by vote to represent the society at this 
 meeting, yet I believe 1 am safe' in saying that in my remarks here I 
 represent the almost unanimous opinion of the societj', because at a 
 meeting of the society held February, 1900, resolutions were passed 
 and forwarded to Washington favoring a ship- subsidy bill for Ameri- 
 can shipping. 
 
 Now what I have to say may be, in part, a repetition of what has 
 already been said, but the truth is often strengthened by bein^ repeated. 
 
 Having been a master of American ships, the American clipper ship, 
 for many years, and at a time when our shipping was at its height, and 
 we were all proud of our commerce, I may be pardoned if I say a few 
 words now (in the time of our commercial decay) to try and revive 
 once more pride in the nation's shipping. 
 
 You might say pride does not pay. I think it sometimes does. 
 One's personal appearance often goes a long way toward success, and 
 so does a nation's appearance, in a fine fleet of vessels sent into foreign, 
 waters, count for much before the rest of the world. 
 
 Citizens of this country, as a whole, are brought up and educated to 
 desire and expect a higher class of living as regards personal comforts 
 than do the citizens of most foreign countries. 
 
 They demand higher wages that they may be able to enjoy those 
 
 1)rivileges — privileges made possible by a protection from cheaper 
 abor^ — a protection brought about by a system of duties on foreign 
 productions. 
 
 Now, to induce our citizens to accept employment on the broad ocean 
 in competition with all other nations, the employers of that labor (that is. 
 
672 HEABINGS BEFORE THE MEKCHANT MARINE COMMISSION. 
 
 the owners of the vessels) are obliged to pay higher wages and give a 
 better living than do most of the foreign owners of their vessels, unless 
 those foreign vessels are subsidized in some way by their governments. 
 If the American citizen is not so paid, he prefers to stay ashore, 
 where he is protected, and can enjoy that better living to which he is 
 entitled. 
 
 SHIPS SHOULD HAVE PROTECTION. 
 
 For the American owners of ships to be able to pay those higher 
 wages, grant that better living and have a fair return for their cap- 
 ital they must have some protection, the same as the manufacturers 
 ashore. What that assistance needs to be, in what form paid, whether 
 in the shape of bounties or in extra duties on imports or exports in 
 foreign vessels, 1 am not able to say. I leave to wiser heads than 
 mine as to the better way, but protection of some sort must be given 
 to induce Americans to invest their capital or their labor on the water 
 and compete with cheaper foreign labor and capital. 
 
 It might be argued, if Americans had rather stay ashore and invest 
 their capital there, then allow them to do so. But 1 think the question 
 reaches much farther than that. To illustrate: There is no doubt in 
 my mind that the larger and more efficient are the police force of this 
 city the less liable are we to have trouble of any kind in the streets of 
 Boston; and the larger and more efficient are the police of the nation's 
 waterfront (the United States Navy) the less likely is the nation to 
 have trouble of any kind. 
 
 To have our Navy at its most efficient point it must be well manned 
 and also have a strong and large reserve to call upon in time of trouble, 
 both of vessels to act as auxiliaries and of men. Without a merchant 
 marine where will that reserve be found ? 
 
 Again, for a nation to have its flag flying in the various ports of the 
 world gives to that nation a sort of prestige, creates a desire in for- 
 eign nations to know more of that country, its people, and its manu- 
 factures and productions; or, in plainer words, it advertises the nation 
 and stimulates trade and thereby benefits the whole nation. 
 
 To sum up my remarks in a few words — we want a strong Navy; 
 one that from its size and efficiency will discourage any attack on the 
 nation. 
 
 Without a strong merchant marine as a reserve our Navy in time of 
 trouble is only half efficient. We want and need our flag in all parts 
 ■of the world that we may be better known and prepared to do our 
 share of the trade of the world. 
 
 Without protection of some sort or help in some way we can not 
 build, man, and sail our ships in competition with cheaper foreign labor 
 and capital. At the same time, perhaps after our steamship lines are 
 ■once fairly established and our commerce (so to speak) is once more on 
 its feet, the help from the Government may then be gradually with- 
 drawn. 
 
 FOR BOTH STEAM AND SAIL. 
 
 My suggestion for a help to our commerce is something like this: 
 A subsidy or bounty in just proportion to all classes of American ves- 
 sels engaged in foreign trade; to steamers so much per knot for the 
 average rate of speed for the voyage. Of course to the higher rates 
 of speed a larger proportion, on account of the larger expense neces- 
 .sary to maintain that speed. That proportion could be adjusted, from 
 
HEAKINGS BEFOKE THE MERCHANT MARINE COMMISSION. 673 
 
 information received from many sources, regarding that extra cost, 
 and also so much per registered ton of the steamer. To sailing ves- 
 sels, so much per mile for the average sailing distance from port to 
 port, and also so much per registered ton of the vessel. 
 
 Without the use of steam and electricity (and perhaps I now ought 
 to add gasoline) the transportation of the country could not be carried 
 on; but still we have much use for horses. Neither could the wants 
 and demands of commerce be carried on without steam, and perhaps 
 with proper aid much use may still be found'for sailing vessels. 
 
 The Government has spent many millions of dollars on the Panama 
 Canal, and is to spend many, many million dollars more. For whose 
 benefit is that money spent? For that of the whole world. Let us 
 hope at its finish our commerce will be in a condition to receive its full 
 share of those benefits. 
 
 Mr. Chairman and members of the Commission, keep the same pro- 
 tection on the shipyai'ds that we now have — free material for building 
 ships — and keep free ships away, give us the same amount of protec- 
 tion, in some way, on the water as we now have on the land, and we 
 have the capital, brain, and muscle to build, man, and sail a merchant 
 marine that in a few years will be the pride of the country, the same 
 as our manufactures are to-day. 
 
 I thank you, gentlemen", for your attention. 
 
 STATEMENT OF W. R. CHESTER. 
 
 The following letter was subsequentlj^ received: 
 
 Boston, June <?, WOlf^ 
 The Mekchant Marine Commission. 
 
 Gentlemen: All my business life I have been interested in shipping. 
 Born and living in a whaling city, until I was 25 years old, naturally 
 I was interested in marine matters, particularly as my ancestors and 
 two brothers were sailors. 
 
 For twenty -five years I have handled, through the shipping season, 
 from one to two cargoes' a day. They were small and mostly on our 
 own coast. Have owned partially and in some instances the whole of, 
 some vessels, mostly in coastwise freight, consequently I claim to 
 know something about the " marine service." 
 
 Had $10,000,000 been spent in subsidies on the "Collins" and other 
 lines, and we had had 25 ships in 1861 that could have been utilized as 
 gunboats and troop ships, we should have saved more than %\ 00,000,000, 
 saved numerous lives, and shortened, if we had not prevented, the war. 
 
 We could not even remember this lesson, for we found ourselves in 
 1898 in an equall}"^ bad condition. 
 
 In offering the following resolutions at the March meeting of the 
 Massachusetts State Board of Trade in 1898, I said in part: 
 
 Mr. Prbsidknt: 
 
 We are on the verge of grave complications with Spain and we are obliged to 
 face a dilemma that we regret. We have not ships of suitable capacity to carry with 
 speed, safety, and comfort 10,000 soldiers, and to aid our Navy and Army in transport- 
 ing the necessary supplies. This would seriously impair the efficiency of our service. 
 Had we 60 first-class ships, which could be utilized in case of war, they would pay 
 for themselves in one year. In fact, our ownership of 50 ships would go far toward 
 keeping peace. 
 
 3a— 04 43 
 
674 HEARINGS BEFORE THE MERCHANT MARINE COMMISSION. 
 
 Voted: That the "Massachusetts State Board of Trade" hereby places itself on 
 record as favoring any bill by "Congress" whereby our "merchant service" shall 
 be increased, and urges our Representatives in Washington to favor any bill by 
 which new lines of steamers may be built, of the most modern type, by American 
 labor, with American capital, that could be utilized in case of war as an adjunct of 
 our Navy. These steamers to be run for American interests, and to carry our mails 
 to jDorts throughout the world, to the end that we can ship our products to foreign 
 nations and receive our importations under the "American flag," thus bringing 
 together the different nations of the earth into closer relationship with our own^ 
 believing that closer union would prevent misunderstandings and possible wars. 
 
 Voted: To carry out the plan to build new lines of steamships, and to cover the 
 increased cost of building and maintaining such lines over our competitors, we would 
 suggest legislation by Congress, favoring discriminating duties, and generous subsi- 
 dies to be paid such lines as may be established. 
 
 Above resolutions were passed. 
 
 At the meetings of the Commission on Wednesday and Thursday 
 some of the speakers favored " free ships," and it was evident that 
 they were imbued thoroughly with free-trade ideas. 
 
 I can not understand how any thoughtful man who has lived through 
 free-trade years could ever favor going back to those sad times when 
 we paid from $100 to $120 per ton for steel rails, and but for a pro- 
 tected tariff would be paying same to-day instead of exporting it to 
 other countries at one-fourth the price we paid England for them. 
 
 Give our shipbuilders and shipowners quite as generous subsidies as 
 other nations give theirs, and the time will come when we can com- 
 pete with them in water transportation. 
 
 We "can not build a 1,000-ton steamship ready for sea for $36,000," 
 and 1 trust we shall never be obliged to. 
 Your obedient servant, 
 
 W. R. Chester. 
 
 ADDITIONAL STATEMENT OF FIELDS S. PENDLETON. 
 
 Mr. Pendleton. Mr. Chairman, I wish to state that a telegram has 
 been received from the owner of the Edward K Briery, in which he 
 says that that vessel carries 10 men, exclusive of the master. 
 
 REMARKS OF THE CHAIRMAN. 
 
 The Chairman. In adjourning this hearing, I desire, in behalf of 
 the Commission, to extend thanks to all the gentlemen who have 
 appeared before the Commission and so frankly and freely stated their 
 views. 
 
 I wish also to express the thanks of the Commission to the repre- 
 sentatives of the press, who have made such excellent reports of our 
 hearings. 
 
 Especially do I want to assure the Chamber of Commerce of our 
 appreciation of its courtesy in permitting us to use this beautiful room. 
 We have enjoyed our stay in Boston, and will leave the city in the 
 hope and expectation that we will find in the testimony which has 
 been given some things that will aid us in reaching a partial solution 
 at least of this very perplexing and very important problem which 
 we have in hand. [Applause.] 
 
 I thank you all, gentlemen. 
 
 Thereupon (at 1 o'clock and 20 minutes p. m.) the Commission 
 adjourned. 
 
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