HOW OUR TRADE IS HANDICAPPED.

But when we turn to our trade with Asia, Africa, Central and South America, and Australasia we find that conditions are radically different. Unlike the chief European nations, Asia, Africa, Central and South America, and Australasia are not shipowning lands.

We require from them a great quantity of imports, especially articles of food and raw materials for our manufacturers, and the great bulk of these goods are on the tariff free list.

But these countries, unlike Europe, have no ships of their own to deliver all this needful merchandise in our own Atlantic, Gulf, and Pacific ports, and, of course, they do not supply the ships that are required for the proper expansion of our export commerce to their own ports. For this service both ways the United States is now dependent almost altogether on the surplus or inferior shipping of Europe. The European powers grant liberal subsidies to maintain great steam lines from their own ports to Asia, Africa, Central and South America, and Australasia, but they do not, if they can help it, allow any of their subsidies to be utilized for the maintenance of steam lines to those competitive markets out of the ports of the United States.

Therefore, the manufacturers, merchants, and farmers of America are at a very serious disadvantage compared with their European . rivals in this competitive trade.

STOPPING AT THE OCEAN'S EDGE.

We have in the United States the greatest railroad mileage and unquestionably the cheapest and most efficient railroad transportation in the world. Our unrivaled railroad systems would go far to enable us to command the markets of the world but for the fact that when our goods destined for Asia or Africa or Central America or other distant markets reach the seaboard they find there not the regular steam lines provided by the liberality of European governments, but either no available tonnage at all or some slow, inefficient, uneconomical foreign craft, discarded because of its inferiority from the European steamship service and sent over here by some foreign company as "quite good enough for the Americans."

TRADE AND THE FLAG.

In a few instances, under the half-hearted, inadequate assistance of the postal-aid act of 1891, or on the initiative of bold individual enterprise, American steam lines are now in operation over seas. In every instance these steam lines have had a marked effect in increasing American export commerce. This is especially true in the markets of Asia, to which two American lines, both now unsubsidized, and both unprofitable, run across the Pacific. It is true in the case of our trade with Australia that it has been stimulated very largely by the fast and regular service of an American steam line out of San Francisco, insufficiently paid under the law of 1891. It is true of our trade with Cuba, Mexico, and Venezuela. Wherever the flag of the United States appears above a modern merchant service the result invariably is a large quickening of American export trade.

But these American steamship lines are but a shadow of a fleet. They, and our sail fleet together, convey about one-tenth of our overseas commerce, leaving nearly nine-tenths of it to the uninterested, spasmodic care of foreigners. The western merchants and farmers of the Trans-Mississippi Congress of 1903 got at the very kernel of this question of the American merchant marine when they declared in their urgent resolutions that "it is as absurd for the United States to depend upon foreign ships to distribute its products as it would be for a department store to depend upon the wagons of a competing house to deliver its goods."

THE DIFFICULTY IN SOUTH AMERICA.

Manufacturers and merchants of the Western States who appeared before the commission at its sessions on the Great Lakes and elsewhere emphatically testified that they were baffled in their efforts to build up an export trade, especially to South America, by the arbitrary methods and irregular, inadequate service of the so-called steamship companies under foreign flags which monopolize this ocean carrying. Many of these business men have themselves been to South America, and have found that in order to visit or communicate with their foreign customers they had to go via Europe and her subsidized lines, thus crossing the Atlantic twice to reach their destination. In many instances, if the quickest delivery is desired, they have had to send their goods by the same circuitous way. Under these circumstances need we wonder that our exports to Brazil, carried entirely in foreign ships, have shrunk from $15,135,000 in 1895 to $11,046,000 in 1904?

STUNTING OUR EXPORT COMMERCE.

The decline of our ocean shipping, our one unprotected industry, has ruined shipowners and shipbuilders alongshore from Eastport to Galveston and from San Diego to Puget Sound. It has impoverished and scattered our shipyard mechanics, the most skillful in the world. It has robbed the country of the hardy officers and seamen who should constitute our naval reserve; but it has done more than this it has choked the normal growth of the export trade of the United States to four of the five other great continents. Therefore, there is not a wheat farm in the Dakotas, a cattle ranch in Texas, or a cotton plantation in Mississippi, Georgia, or the Carolinas where the loss of American shipping has not made itself felt in shrunken sales and opportunities for profit.

Of course it will and must cost something to establish American shipping lines and give our people the facilities they need for export commerce. It has cost the European nations, our competitors, something to develop their lines to all quarters of the world. Great Britain alone has expended for this purpose, since 1840, between $250,000,000 and $300,000,000.

SHIPS TO SERVE ALL CLASSES AND SECTIONS.

National subventions to American shipping will, of course, encourage shipowners and shipbuilders of New England, New York, Pennsylvania, Virginia, Louisiana, California, and Washington;

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but these ships, built and run regularly and efficiently for the carrying of American mails and commerce, will just as surely win new markets for the farmers, manufactures, and merchants of every State in the Union who have anything to sell; and unless American ships are encouraged by national legislation these new markets never will be won, for the day will never come when Great Britain, or Germany, or France, or Italy will subsidize great national lines of ships to convey to Africa, or South America, or Asia, or Australasia American goods to compete with European goods or the products of European colonies. If we are ever to have an efficient transportation service to the world's great neutral markets we must establish it ourselves and maintain and operate it beneath the American flag and in American interests.

PUSHING OUR GOODS IN FOREIGN LANDS.

Not only is an American ship itself the most efficient carrier of American commerce, but the officers of that ship, the American passengers who tread its decks, and particularly the American merchants who go out to represent the steamship company and to push its business, are inevitably pioneers and drummers of American trade in foreign lands. For years our ministers and consuls and American travelers abroad have complained that there were no American mercantile houses in foreign countries, and that American goods, therefore, had to be handled by foreign firms which preferred to sell their own country's merchandise. But why should there be any American houses in South America, or Asia, or Africa, or elsewhere where there are no American ships? Everywhere in the world's experience it has been found that the first merchants who go out to foreign countries go as agents of shipping. Soon goods from the home country are consigned to them; they develop a commission business; they branch out into general mercantile trade and, growing stronger, demand banking facilities.

There were once American houses in China, India, and South America, but that was when we had American ships on whose trade their foundations rested. When these ships vanished the houses themselves soon disappeared. When American ships return, there will again be American mercantile establishments in all ports of the world, to push the sales of American goods abroad with the same shrewd sense and indomitable energy that have built up our enormous domestic commerce.

A SEA MILITIA OR NAVAL RESERVE.

Though the first and paramount argument for an American merchant shipping is the imperative need for our own ships to expand our commerce, there is a second consideration of large importance, and that is the need of American ships, and especially of skilled officers and seamen, as a sea militia or trained naval reserve for the national defense. The value of merchant steamers as scouts and other auxiliaries is set forth in connection with this report by the distinguished Admiral of the Navy." Great Britain, France, Italy,

a Appendix A, Report of Admiral George Dewey.

Germany, and Japan not only support great steam lines to all parts of the world out of the national treasury, or in other ways, for the benefit of their commerce, but maintain large fleets of suitable vessels and large forces of trained seafaring men to reenforce their battle line in case of war.

The United States is the only power, with the significant exception of Russia, which has almost altogether neglected this precaution. Several of our States have, it is true, a naval militia, but this force is composed, as a rule, of landsmen who have never learned the calling of the sea, and while useful in their way can not be accepted as fit substitutes for professional officers and sailors.

The complex needs of a modern war fleet require a great swarm of attendant auxiliaries colliers, supply ships, distilling ships, repair ships, hospital ships, etc. It would be extravagance to support this entire auxiliary force in peace. It is true economy to create it by fostering a mercantile marine. And not only must these auxiliaries fly the American flag in order to be securely available in war, but they must be manned by American officers and, as far as possible, by American crews, for in the stress of war there can be no trusting to mere mercenaries.

ENRICHING OUR RIVALS AND ENEMIES.

So long as nine-tenths of the sea trade of the United States is conveyed by foreign ships a large part of the $200,000,000 required every year for the transportation of our mails, freights, and passengers goes to build up the naval reserve of foreign nations, our rivals and possible enemies, and thereby to prevent the development of an adequate naval reserve in the United States. This is a policy of extreme folly and wastefulness, of which we had a vivid example in the war with Spain, when the great German steamship companies, which have grown rich out of American trade, deliberately took fast ships from their New York service and transferred them to our foe to "burn, sink, and destroy" the commerce of the American people.

OUR ONE UNPROTECTED INDUSTRY.

Finally, there is need of American ships because the historic industry of ship owning and building for ocean trade has at least as good a right to national encouragement as any industry protected by the Government. From 1789 until shortly before our civil war American shipping in the foreign trade was in some form or degree protected, first by discriminating duties and tonnage taxes, and later by mail subventions. It is a matter of record that so long as it was protected it prospered. But, for some unconscionable reason, when the protective policy in general was strengthened and broadened by the political party which came into full power in 1861, adequate encouragement was denied to this one industry out of all our industries, and has been denied to the present time.

The mere requirement that vessels of American register shall be American built, which is often loosely referred to as protection to shipping and as proof that our shipping has been "protected to death," is of itself no protection at all. If there were a tariff duty fixed so high as to prohibit American woolen manufacturers, for example, from purchasing foreign machinery, and if at the same

time these woolen manufacturers, thus compelled to buy all their machinery at home or else go without, were absolutely denied so much as 1 per cent of protective duty on their finished product, it is not probable that woolen manufacturing would be described as a protected industry, or that many woolen mills would be built and operated under the flag of the United States.

But what would be instantly and everywhere denounced as outrageous treatment of American woolen manufacturers is what has been dealt out for nearly fifty years to our American shipowners in the foreign trade. That after half a century not of mere neglect, but of violent discrimination, one-fifth of our ocean tonnage of 1860 is still left to fight unprotected against foreign subsidies and cheap wages is sufficient demonstration that American shipowners and seamen are still, as they have been for two centuries, the most skillful and unconquerable men of their arduous calling in the world.

NO NEW LINES TO EUROPE.

The President of the United States, in the annual message to Congress of December 7, 1903, in which he recommended the establishment of this Commission, spoke of the swift North Atlantic mail service, and added:

Moreover, lines of cargo ships are of even more importance than fast-mail lines, save so far as the latter can be depended on 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.

The bill which the Commission presents follows closely in this provision for new lines the suggestion of the President. For, beyond the strengthening of two existing mail-contract lines-one to Great Britain and the Continent and one to Australasia-all the new regular steamship services involved in this bill are to the markets of South and Central America, Mexico, South Africa, and the Orient. No provision whatever is made for an additional new line to Europe. The speed required of all these new lines, while adequate, is so moderate that ships built to perform the contracts will all be large carriers of cargo.

AN HISTORIC POLICY.

The mail subvention is not a new expedient in the maritime policy of the United States. Sixty years ago President Polk recommended that such subventions be given to encourage the steam merchant fleet, and Congress granted large sums for the establishment of mail lines not only to Europe, but to the West Indies and the Isthmus of Panama and in the Pacific Ocean. There is, therefore, abundant precedent for the mail subventions of the present bill. They involve no departure whatever from the old and accepted national practice which operated successfully from 1847 until the system was temporarily abandoned in the unhappy sectional quarrels in Congress immediately preceding the civil war.

AID FOR THE CARGO CARRIERS.

But the Commission has felt that public sentiment would not be content, under present circumstances, with offering national aid to a few specified mail lines. Therefore, in section 2 of this bill, a general