The Merchant Marine 1

american, foreign, trade, lines, japanese, steamship, shipment, exporters and country

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To make the situation worse, England granted lib eral subsidies to her new steamship lines. The Cun ard Line received $425,000 annually. Congress fol lowed this example in a half-hearted and vacillating way. The Ocean Steamship Company in 1845 re ceived a $200,000 subsidy for 20 trips,—far less than the subsidies received by the English competitors. This support was withdrawn shortly before the Civil War. This withdrawal, added to the effect of the Civil War, hastened the decline of our merchant mar ine. What in 1861 had measured 2,496,894 tons and carried 65 per cent of our ocean-borne commerce was reduced in 1866 to 1,387,756 tons, carrying but 32 per cent. The low water mark was reached in 1898 when the total tonnage under American registry was 726,213, carrying less than nine per cent of our for eign trade.

5. Merchant marine an aid to trade.—The question has been asked : "Why have a merchant marine ?" It is often argued that the matter should be settled en tirely by free competition. If foreign ships can transport our goods more cheaply than we can our selves, why should they not be permitted to do so ? We can find many other ways of investing money as profitably. Trade, it is argued, does not really fol low the flag; it does not flow according to sentiment, so that it makes no difference whether our goods are carried by British, German or American ships.

Practical experience has proved that a merchant marine may be a definite aid to the commerce of a country. Tho the trade does not "follow the flag," ships owned by other nationalities may place many obstacles in the way of exporters of that country.

Since a large number of the most important foreign steamship connections are subsidized by their gov ernments or are controlled by men interested in the development of the industries and commerce of their own country, it occurs not infrequently that American exporters discover that the goods of their foreign competitors are given preference in demand for space over their own. The Federal Trade Commission re ports that "American exporters have been informed by British lines running from Canadian ports that Canadian cargoes would be given preference in all demands for space, and that American shipments would only be taken after the requirements of Cana dian shippers had been satisfied." Tho this situation arose in a time of abnormal con gestion caused by the war, it serves as an illustration of the effect of foreign control of ocean tonnage. The situation was very much the same in respect to the Japanese steamers: The Japanese Government has required Japanese steam ship interests to give preference to Japanese demands for cargo space and has kept the freight charges to Japanese on a reasonable basis. By these requirements Japanese firms have been saved much interruption of business and have been able greatly to extend their overseas trade. In

the meantime American houses have been unable to obtain cargo space across the Pacific, and thousands of tons of freight have been piled upon clocks awaiting shipment.

6. Interlocking control.—The fact that foreign ex-, port houses and hankers are interested also in steam ship lines results in preferential treatment of foreign business. So it has been claimed by a New York export commission house that British bankers, who had invested in the Portland cement industry in Eng land and who also controlled certain steamship lines running to South America, arranged for a rate of transportation sufficiently lower than the rate charged to American exporters to offset the effect of the Bra zilian preferential duty which favored America.

7. Commercial espionage.—The provision con tained in the act establishing the United States Ship ping Board in which it was declared unlawful for any official of an ocean carrier to give information in re gard to the details of a shipment to the shipper's com petitors refers to a practice which, so it is claimed, forms another strong argument for a national mer chant marine. Cases are known where buyers of American goods in foreign lands were visited by sales men of other nationalities before the goods had ar rived. These salesmen "disparaged the American goods and intimated that it took a very long time for a shipment to come from America and that it might never arrive, whereas with their facilities they had could make quick shipment of an article just as good. In this way many foreigners, altbo preferring to deal with Americans, were finally induced to take other products." Tho proofs are not available, there is a justifiable suspicion that the foreign steamship had informed the native firms of the American goods awaiting shipment in American harbors.

In how far these cases of discrimination are typical of normal conditions is difficult to say. Some well known steamship men declare that they are not. Mr. P. A. S. Franklin, of the International Mercantile Marine Company, said in an address before the Na tional Foreign Trade Convention in 1914: A fallacy which I should like to expose here is the conten tion that the foreign lines are seeking to throttle American export trade. On the contrary, I am confident the foreign lines are doing everything possible to encourage our trade, which it is, of course, to their best interest to do, even to the apparent detriment of the merchants of the foreign country to which the steamers happen to belong, as the ship-owner has to be supported by, and make a living out of, his par ticular trade.

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