which uses the canal would apply with equal force to a tax directly on American cotton, lumber, fruit, coal, grain, and other cargo carried by the ship through the canal. It is feasible to use the canal for the promotion of American navigation in a manner consistent with treaty obligations, with precedent at home and abroad, and with our fixed policy of untaxed navigation on improved waterways.

FREE SHIPS.

The importance of a merchant marine owned by citizens of the United States and sailing in foreign trade under our flag can not, in my judgment, be overstated. It appears to me to be an essential factor in the development of foreign trade. It would be accepted by all countries as the final proof of the determination to enlarge and to maintain our trade abroad, and it would place our country in a position to be consulted in the fixing of competitive rates by maritime carriers.

While it would, of course, be desirable to have the benefit of such a merchant marine and at the same time to have the ships for foreign trade built in our yards, experience seems to teach that, for the present at least, the accomplishment of both objects is out of the, question. Ocean steamships for the foreign trade are not built in our yards, and have not been built for some years, except under the provisions of the ocean mail act of 1891 or in anticipation of the probable passage of legislation to extend the principle of that act after the war with Spain.

That legislation failed. While I have recommended the readjustment of the ocean mail act of 1891 to the present requirements of our commerce, and desire here to renew that recommendation, I see no reason to hope that at the present time it will be adopted. The registry law alone gives no protection to the industry of shipbuilding for the foreign trade, and from the nature of modern navigation it can not do so. The policy of discriminating duties, which was always a declaration of commercial warfare, has been abandoned for generations by all maritime countries as worse than impotent. In the meantime we are postponing the creation of the merchant marine which we need. I have no hesitation, therefore, in recommending the passage of a bill for the admission of foreign-built ocean steamships to American registry to engage solely in the foreign trade.

The enactment of such a measure would deprive us of nothing, and it may help to provide us with a great commercial aid. It would surely increase the shipping under our flag in trade with Central America, the West Indies, and some parts of South America, for the American owners of a number of foreign steamships have already asked Congress to grant them American registers for those

trades. Even if the law suggested should fall short of the moderate expectations I entertain of its results, it would, in any event, serve to point out what else it is necessary to do in order that we may secure under our own control an adequate merchant marine.

Although the facilities for passenger transportation between Hawaii and the mainland should be improved, it must be borne in mind that under the protection of law fleets of excellent ocean steamers for trade with Hawaii and Porto Rico have already been. built in the United States and are entitled to consideration in any legislation that may be had.

SHIPBUILDING MATERIALS.

By the act of June 6, 1872, lumber, timber, hemp, manila, iron and steel rods, spikes, nails, bolts, and copper for shipbuilding were admitted free of duty. In the McKinley tariff of 1890 the list of free articles was extended to include wire rope, plates, angles, and beams. The Wilson tariff of 1894 included "all materials of foreign production which may be necessary for the construction of vessels," and that provision was repeated in the Dingley tariff of 1897. All these tariff acts restricted the privilege of duty-free materials to vessels which engage in the coastwise trade not more than two months in the year. The Payne tariff of 1909 extended the privilege to vessels which engage in the coastwise trade not more than six months in the year. The repeal of the limitation of six months is recommended, to remove the last restriction upon free materials for shipbuilding.

WIRELESS SHIP ACT.

Preparations for the enforcement of the wireless ship act of June 24, 1910, were so far completed that when the act took effect on July 1, 1911, only one ocean passenger steamship subject to its provisions had failed to comply with the law. In these preparations the Department had the benefit of the willing assistance and advice of the Navy Department. The chain of naval wireless shore stations, which now girds our coasts from Maine to the Canal Zone and thence to Unalaska, has been at this Department's disposal to receive test messages from merchant ships; these naval stations in fact made the law possible, for they prevent the creation of monopoly, and apart from their strategic value are a commercial asset of the Government. Officers stationed at the navy yards and naval stations have also conducted examinations to test the skill of wireless ship operators, to 507 of whom thus far certificates of competency have been issued. Through the courtesy of the Navy Department these arrangements will continue during the current fiscal year, and the War Department has also consented to hold examinations of wireless oper

ators at its Signal Corps station at Fort Omaha. The wireless ship act has met with general approbation, and in its enforcement the Department has had, with rare exceptions, the cordial cooperation of the steamship companies concerned and of the wireless telegraph companies. Austria has passed a similar law, effective January 1, 1912, and doubtless other nations will follow our example if our administration of the act shall prove successful. At present 488 ocean passenger steamships are regularly subject to the provisions of the law, and others on occasional voyages come within its requirements. In addition 142 vessels, including 15 yachts, not subject to the law, have been voluntarily equipped in the United States.

During July, the first month of the operation of the act, there were 1,163 departures of steamships subject to the act, and the number during the year will exceed 10,000. Congress appropriated only $7,000 for the enforcement of the law, and with this amount it was possible to select only three competent inspectors-one for New York and New England, one for the rest of the Atlantic and Gulf coasts, and one for the Pacific coast. Several months' work has shown that constant inspections are needed to give full effect to this useful law, and I renew the recommendation for an appropriation of $10,000, which will allow an inspector exclusively for Gulf ports and Porto Rico. Trade of these ports is increasing even in advance of the opening of the Panama Canal. The mutual usefulness of wireless apparatus to two or more steamships or to a shore station affords a special reason for Government inspection. Supervision of the equipment of ocean passenger steamships with wireless apparatus has already taken its place and at relatively small cost among the several services which Congress has created for the safety of life and property at sea.

While the Congress of the United States was the first legislative body to recognize by statute the protection to life and property at sea afforded by radiocommunication, we are backward in the necessary regulation of the use of wireless apparatus. A bill for this purpose, prepared by this Department in conjunction with the Treasury Department, the War Department, and the Navy Department, passed the Senate unanimously on June 16, 1910, and a similar bill was unanimously reported to the House on April 1, 1910, but was not reached. The passage of this measure is again recommended. It avoids difficulties which have thus far delayed ratification of the Berlin Radiotelegraphic Convention of 1906, adopted by practically all other maritime nations. The international radiotelegraphic conference will meet again in June, 1912, and it is hoped that Congress will provide for the participation of the United States in its deliberations.

MOTOR-BOAT ACT.

The motor-boat act went into effect on July 9, 1910, and the improvement during the year in navigation conditions on rivers, harbors, and lakes under Federal jurisdiction is everywhere recognized by the masters of large vessels as well as by those who operate motor boats. Its first purpose was to substitute reasonable requirements as to lights and sounds for the impossible requirements of the acts of 1895 and 1897, passed when motor boats were almost unknown. Its second purpose was to provide simple and effective means of extinguishing fire and preventing drowning. Compared with former years, the summer season of 1910 showed relatively few accidents and the past summer was almost wholly free from those fatalities which the law was designed to prevent. Of course these results are in a great measure due to the better construction and equipment provided by builders and to the increasing skill of operators, but the law has been a stimulus to both and has exerted a wholesome check on the reckless. Motor-boat clubs and the daily newspapers and sporting press throughout the country have been prompt to recognize the usefulness of the law, and their cooperation has helped much in its administration.

The law, however, could have been only feebly enforced had not Congress provided an appropriation of $15,000 to enable collectors of customs to enforce this and other navigation laws upon the water, where in fact violations occur. The same sum was placed at the Department's disposal for the current year and is recommended for the coming year. The Department has endeavored to be both just and considerate in the imposition of penalties, as the law was new, but the receipts from fines under this and other laws have been about double the appropriation. The expenditure will thus prove advantageous even from the fiscal point of view.

The Department has been urged to recommend an extension of the law so as to require Government inspection of the hulls and machinery of motor boats and Government examinations of their operators. At a conservative estimate there are 150,000 motor boats always. under Federal jurisdiction. To carry out the recommendation a great extension of the Federal service, with a large appropriation, would be necessary. I am satisfied that some additional supervision. should be provided for, but I do not believe that it is necessary to extend the rigid rules of general navigation and inspection to this smaller craft.

NAVIGATION REVENUES.

Tonnage duties during the fiscal year amounted to $1,083,255.34, an increase of $1,728.64 over the previous year and the largest amount collected from this source since 1884. The full effect of the reduction

in rates from near-by foreign ports under the tariff act of August 5, 1909, is shown in receipts of $124,772.65 from vessels entered from such ports, compared with $163,731.81 from the same source during the fiscal year 1909 under the former rate. Tonnage rates are reasonable compared with those imposed by foreign nations generally, and are much less than those of the ports of continental Europe. They will provide an annual revenue of about $1,000,000 for some years to come, as increase in ocean traffic will be taken up by regular lines rather than by tramp steamers.

Our law fixing the tonnage of vessels, which is the basis of tonnage duties and other public and private charges, was brought into substantial accord with the laws of the principal maritime nations by the act of March 2, 1895. International uniformity on this subject is essential to the expeditious dispatch of modern steamers, and actual remeasurement of foreign vessels is to be avoided when possible. Marine construction, especially in shelter decks, has improved since 1895, and we should recognize, not penalize, these improvements. Amendments to the measurement laws are the more desirable at this time, as a system for the purpose of Panama tolls must soon be established.

MISCELLANEOUS RECOMMENDATIONS.

From the beginning of the Government, collectors of customs have been charged with the duty of enforcing the comprehensive scheme of navigation laws, which was enacted simultaneously with the first laws to collect revenue at seaports. As Congress has extended the scope of the navigation laws with increasing regard for the safety of life at sea, the duties of collectors of customs have been increased correspondingly, until at the present time many collectors of customs collect little or no revenue from the tariff, but are wholly occupied with the enforcement of laws relating to shipping. For this reason the ratio between the cost of operating a customhouse and the amount of revenue from the tariff it collects was never a correct measure of the usefulness of a collector of customs or of the amount of work he performed. It is an even more inaccurate measure now than it was 20 years ago. In any reorganization of customs districts which Congress may contemplate, the dual duties of collectors of customs should be fully considered, lest unintentionally an important part of the administrative machinery of the Department of Commerce and Labor be disarranged.

Congress has provided for the representation of the United States at three sessions of the International Diplomatic Conference on Maritime Law, and the proposed salvage convention, which is generally commended by the maritime world, has been transmitted to the Senate. I recommend that the United States be represented hereafter