U. S. MERCHANT MARINE SITUATION DISCUSSED

It is rather humiliating for an American to feel that if he wants to travel to most foreign countries, most of the largest and best steamers plying the Atlantic and usually flying some other flag than his own. It is an unfortunate fact that the bulk of our commerce is carried in foreign bottoms and the reason for it is that the costs are so high in the United States and the laws under which our ships operate are so oppressive in their workings that our fleets operate under a handicap.

During the war, when there was a world shortage of shipping a huge American merchant fleet sprung into being, but these ships are being tied up by the hundreds and finding nothing to do. Our ports are filled with them. Why? It is partly because our labor requirements are so onerous that shipping of other countries that doesn't have any such conditions imposed upon it by the government can made lower freight rates and therefore take the business, and partly because the cost of building these ships has made such a large capital charge against them that it is difficult for private companies to purchase and operate them successfully.

Philippines Use Subsidies

There has been a very strong inherent objection on the part of our people to subsidizing ships. Other countries indulge in these subsidies, sometimes in the form of giving favorable mail contracts. In the Philippines the inter-island commerce was so demoralized in 1904 that the ships weren't earning enough to keep them in proper repair and they were going out in such condition that they were an absolute menace to human life. A policy of ship subsidies was adopted there and worked like magic. Inside of a few months the ships were spruced up, running on regular schedules, giving good service, and making money, and pretty soon the companies began to buy new and larger steamers and the commerce showed a very quick response to these new facilities.

The practices that prevailed in the Philippines before these reforms were inaugurated were so suicidal that it was only a wonder that the ships lasted as long as they did. There were no fixed schedules. When news got about that some port had a lot of freight several ships would race for it. And if any ship looked in at a harbor where some unfortunate producer had perishable freight at the water front, some rascally officer might decline to take it, alleging lack of space, and then purchase the goods at bargain prices when the frantic owner tried to realize something rather than see his property rot on his hands. Ships were so unsanitary that it was an absolute menace to health to travel on them; and owing to lack of schedules, merchants and other travelers couldn't make their plans for any fixed itinerary because they didn't know whether the next boat would turn up the next day, the next week, or the next month. All this discouraged agriculture, commerce and trade.

Penalties Imposed by Government

Subsidies were given only on condition that all these faults were to be done away with. Ships had to run on fixed schedules and made lower rates to the public than before. The service was maintained under government inspection, under fines and penalties for failure in any particular, these fines being deducted from the subsidy. And if any ship refused freight at any port the owner had to call this fact to the attention of the government inspector by cable, if necessary to the next port, and if the inspector found any unused space on the ship, the ship owners were fined an amount equal to twice the freight rate for the cargo refused, the money go received being payable to the aggrieved shipper.

Although very reluctant to enter upon this new policy, once tried the ship owners were very enthusiastic. They found it paid to maintain regular schedules at lower rates, with good service. Coincidently with this the government put its own steamers on unprofitable routes, that is, routes on which there was not enough freight offering to tempt commercial liners to undertake them. The idea was that the existence of this service would create a business and encourage production. It had this effect and within a marvelously short time after these routes were established business became so good that commercial concerns would come to the government and offer to take over the routes without any subsidy at all, only upon condition of the government withdrawing its own steamers from these schedules. Of course this was what the government wanted to do, and the steamers were put on to new non-paying routes in the hope of accomplishing the same desirable results.

Encouragement Policy Needed

The policy of the United Sates should be to encourage its merchant marine by some method, subsidy if necessary, either in the form of mail contract or otherwise, or perhaps by changing the laws that operate to place the American merchant marine at a disadvantage when competing with other countries. We should see to it that all the main trade routes of the world are covered by American ships of the fastest and most commodious type, flying the American flag, under American officers; ships that will carry our passengers our mails and our freight direct to the principal countries and ports in the world. From the Pacific Coast we are now able to go direct to Japan, and the Philippines, on admirable ships that give really good service. There should also be good and fast direct steamers from our Pacific Coast to Australia and to the west coast of South America. From our cast coast we should be able to go to both coasts of South America, through the Mediterranean and the Sucz Canal to the Orient, and to various ports in Europe. The United Fruit Company is able to give an excellent, if not rapid, service to the countries in which it operates, mostly Central America, by reason of the profitable nature of its business other than shipping.

There is a well grounded, inherent objection to direct subsidy to ships. It has the appearance of voting government money from the people to the direct benefit of a select few, the ship owners, and as such it is subject to great criticism. The people of the interior of the country don't see the advantage to themselves and think that this money is not directly beneficial to their region. There is less objection to a mail contract. But these objections are not insuperable, and the main fact remains that some method should be discovered to remedy an unquestionably unfortunate situation.

It is gratifying to know that President-elect Harding has endorsed the policy of protecting the American merchant marine and it is to be hoped than the measures he will be able to devise will bear fruit in a practical way.