Appendix II

APPENDIX II OUR MERCHANT MARINE TANGLE WHEN I was a boy, my uncle was a country neigh bor of Mr. John M. Forbes, one of that sturdy group of Boston and Salem world merchants whose clipper ships carried the Stars and Stripes to every port of the seven seas in the old days before the Civil War, when our merchant marine was second only to that of England. I listened to Mr. Forbes talk with my uncle one evening after dinner, not long subsequent to the close of the war. The latter had asked when a new fleet was going to replace the famous ships that had been swept from the face of ocean by the Con federate privateers Alabama and Tennessee. "Never again," answered that uncompromising New Englander. "The iron ship has forced the wooden ship into the discard; and wooden ships are all .we can build here. The protective tariff has raised the price of iron, and a depreciated currency has raised wages, so that we can neither build in our own yards nor buy on the Clyde without costing us a quarter more than our competitors pay for ships. Moreover, our navigation laws handicap us in cost of operation, so that. we cannot run ships in competition with the British and Norwegians. There is no future for American ship-owners. Our rail road builders, on the other hand, can make good money building right here at home; and there are our enormous north and southwest territories [ 411 ] Appendix to develop. From henceforward I am a railroad man."

So indeed he was. During two or three decades his cash and courage, and that of other Bostonians, vigorously and colossally pushed across the continent the Michigan Central, the Burlington, the Union Pacific,the Santa Fe, railroads; until by and by the dead hand of government was laid on the railroads, too, as on the merchant marine before them, to chill their life blood and check their growth also. Some thirty years after the above conversation took place the great Morgan Banking House financed the combination of ocean steamship lines known as "The International Merchant Marine." Soon after it commenced business I crossed on the steamship St. Paul, one of the former American Line ships which had gone into the "combine." My seat at meals was at the left of the ship's purser, and at his right sat a well-known ocean forwarding-agent, Mr. George W. Sheldon, with whom the purser talked freely. The conversation turned one day upon the new combination, and in my innocence of the subject I ventured the prophecy that it would be a vast financial success; with its great fleet, choice terminals, established relations with· railways on both sides of the water, experienced staff, and the economies pos sible in shutting up numerous competing selling of fices, in. routing freights, etc. To my great surprise the purser replied that the combination in his judg mentwas bound to prove a great disappointment. The ocean, he said, was an absolutely free road for every tramp to travel; an open fieldfor universal and ruthless competition, where the fittest would survive. An American steamship, heavily handicapped in first cost by the protective tariff, whether built in the United States or bought abroad; and again by our navigation [ 412 ] Our Merchant Marine laws in cost of operation and repairs; could not hope to compete for world traffic with foreign vessels, nor to run at a profit unless in the coastwise trade, from which our laws shut out the foreigner. He had been purser of the St. Paul for years, he said, and had never been able to make the ship pay. What was true of it would be true in general; and the Interna tional Mercantile Marine Co. was likely to prove it.

He was entirely right. But for the great \Vorld War, that made a gold mine of everything that floated for two or three' years, the I. M. M. Co. would have gone nobody knows where. To-day it is again, like all owners of American sea-going craft (notably our Government Shipping Board), between the devil· and several deep seas; once more wonder ing "where it is at," as the Texan said. Not long after this experience I attended a Reci procity Convention, called by a conspicuous group of New York business men, to influence Congress to make treaties of reciprocity with other nations; so at least it was understood. I was then vice president for Illinois of the National Association of Manufacturers; and went as delegate from that body and also as Governor's delegate from the State of Illinois. When the· Convention assembled there was far more talk of Ship Subsidies than of Recipro city; and the Western delegates suspected that· the whole affair was engineered by Eastern shipping men, and was in fact a camouflaged subsidy convention.

However, the subsidy programme was finally carried through in somewhat reduced dimension; but in the course of the debate Mr. Lewis Nixon, head of the N. Y. Shipbuilding combination, was forced into the open, and came out frankly somewhat as follows (I have not his exact words) : "If you Western men will abolish the protective ( 41 3 ] Appendix tariff, which makes our cost of building ships 20 to 25 per cent. higher than British or German cost, my company will be only too glad to go out after its share of the ship-building trade of the entire world. We have the plant, the material, the labor, and the skill, to engage to advantage· in that competition. And if you will furthermore annul the navigation laws which make it impossible to operate our ships in competition with ships manned by Scandinavians, Lascars, and other seafaring races, then American ship-owners will hold their own ,against the world.

But if you persist in taxing and regulating us out of business, and yet wish the American flag to remain upon the high seas, the only thing to do is to sub sidize us back into the running." Mr. Nixon's argument was unanswerable then, and is still more so now; as meantime, if I am not mistaken, the LaFollette Seaman's Act has made it still more impossible to run an American ship at a profit. It may have been in force then, however, but that does not alter the present situation. These three utterances of Mr. Forbes, the purser, and Mr. Nixon, so many years apart, yet so consis tent in argument, long ago convinced me that we ourselves have wiped the flag off the high seas simply by too much government and too much taxation. It is my equally definite belief that, given a fair field and no favor, the brain and brawn, the capital and courage, of American seafaring men and merchants would in a few short years put the flag back where it was in the days of the Forbeses, the Welds, the Sears, the Rotches, Bryant and Sturgis, the Aspin walls, and all their free company; and restore our country to her rightful place as mother of mariners.

To-day, thanks to the rather bizarre combination of the "Pirate" Semmes of the Alabama and his con[414 ] Our Merchant 1tfarine frere of the Tennessee with our tariff-makers, Ding ley, McKinley, et al., and last but not least with those able landsmen, Senat!or LaFollette and super Senator Gompers, I realize that ample ship subsidies from reluctant taxpayers ave absolutely necessary to keep our cargoless fleet (a: melancholy reminder of how our President put us into the war) afloat at all. Yet even subsidies will never make it great or domi nant as our old-time fleet once was and still should be. On the contrary, they are sure to be, as they already rightfully are, continual breeders· of .suspicion and political corruption; of taxation of the many for the benefit of the few. Why should we thus, as a nation supposed to be endowed with reasonable common sense, first de liberately scuttle our great ocean industry, and then tax ourselves to pay for constant pumping to keep it afloat? Why should we not simply close the sea cocks, and let the craft first rid herself of water in the hold and then go off high and dry and rejoicing, under her own steam?

Incidentally, I may remark, that recent cursory inquiry at the Sailors' Snug Harbor and the Seamen's Union, not far from each other in South Street, New York, indicated that, apart from its effect in killing the American ocean shipping business,the LaFollette Seaman's Act does not seem to accomplish much. I expected to find a strong drift of foreign seamen' toward .American naturalization, by reason of the better conditions attending American seamanship, under the LaFollette Act. This did not seem to be the case. The head of the Seamen's Union, or his assistant, a strongly Red or Bolshevistic young man, damned all American ship:-owners as capitalistic eva ders of the Act; and the Act itself as a fake. When Mr. LaFollette is President, if· ever that comes to [ 415] Appendix pass, he should look into this denunciation of his work. Meantime, I submit that during the pregnant years since the Civil War, this great country of ours has had unrivalled growth, and taken its place as the richest and most powerful region on earth, without any ocean-going merchant marine worth mention.

Even .the drastic experience of the World War and the submarine destruction involved could not stop our rush to the front of things. We have now built a useless fleet by main strength and awkwardness. We have pretty conclusively proved that trade does not follow the flag, but thrives between peoples that have something to sell and something to buy at the same time; such as England and Germany had be fore the war. They were most absolutely out from under our flag yet carried our freights and were our largest customers and vendors of all the world. The point of this remark is not to deny the advantage of a merchant marine, but to remove sentimental argu ment for creating one by taxation and subsidy, in stead of the natural stimulant of free commercial op portunity. Enable our merchants to do business with foreign lands, and our flag will follow our cargoes fast enough. Less government and less taxation will set them free as will nothing else under the sun.

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