The Present Merchant-Marine Problem

I

THE subject of a merchant marine, though frequently discussed, can hardly be said to have been a burning question until within a few months. It is probable that a year ago the average manufacturer and farmer of the interior would not have thought the matter one of direct interest to him. So much of the grain raised by the one or the products manufactured by the other as was sold abroad, seemed to find ready means of transportation across the sea. Those who gave the subject casual thought were wont to say that our money could be more profitably employed in other directions, and that the foreigner was a willing servant who would always put his capital in ships at our disposal, while our money was better invested elsewhere. There were those, indeed, who saw that our transportation systems ended at the sea, and that there were, so to speak, no terminal facilities for them under our own control beyond the water front. The situation was not unlike that which would have resulted had the railway companies terminating in Jersey City been obliged to reach New York by ferries and lighters under separate control, — indeed, under a control which not only was separate, but might through a difference of interest become at any time antagonistic.

It is not so many years since foreign trade was more of a name than a reality to a large portion of our people. A certain atmosphere of disapproval too was inevitably thrown about importations by an economic cult which taught that everything imported meant an injury to American workmen; and the same theory had for its corollary the fixed belief that we could not compete with the foreigner on our own ground but needed protection against him, and by so much the more we could not compete with him on his ground or in markets where there was no preference. Hence the export trade was naturally regarded by many, so far as manufactured products were concerned, as at least as much of a dream as a reality. Even today there are manufacturers among us who are with difficulty shaken from the conviction that they cannot compete with the products of their kind made in other countries, and, since they believe that they cannot compete, seem quite unwilling to try.

It was not easy to arouse interest in a mercantile marine under the American flag in an atmosphere in which imports were thought an economic mistake and large exports of manufactures deemed impracticable. Yet as the proportion of food-products in our exports diminished and we became less and less the granary of Europe, and as exports of fully finished manufactures grew until they became the largest item of the largest export sales that we ever made, it was inevitable that there should come in time a dawning consciousness that there was a weak spot in our transit facilities. At the same time, however, that the need for transporting our manufactures to foreign markets grew, the demand for exporting agricultural products to those same markets diminished, and thus the interest in a merchant marine was but little enlarged. It would not be right to overlook, still less to undervalue, the efforts of those who have long maintained that a merchant marine under the American flag is essential to our full commercial development. Some there are — let due honor be given them — who have raised their voices in season and out of season in this good cause. But even they will agree that until a few months ago they were as the ‘ voice of one crying in the wilderness.’

Long the great fabric of our commerce pursued its course, depending, almost without our thinking of it, upon the facilities for ocean transit furnished by those who were competitors in the same markets in which our goods were sold, and whose interest might at any time change them from the indifferent attitude of carriers for hire of our goods, either to a hostile point of view, or to one in which we were left out of the account.

How suddenly this all changed with the early days of August last is now history. At once, as by a revealing stroke, two great weaknesses in our foreign trade burst plainly into sight, — the financial weakness and the shipping weakness. Our foreign trade, it is true, had grown to a total of over $4,200,000,000; and nothing speaks more strongly for the competing power of America than the fact that exports were much more than half this total, although we lacked those elements in export power which our great commercial rivals possessed in abundance. Coming last and with the poorest exporting equipment into the foreign field, we became a great power therein, — a power with which the only two who exceeded us in the competitive markets found it increasingly difficult to deal. Yet our export trade, so necessary for the full movement of our industries, so essential to the prosperity of our farmers, lacked financial facilities abroad and transportation under our own control. And lo! in August last the crash came, and our weakness became clear to us. In the early days of that month, wheat accumulated in large quantities in Galveston, and because the mechanism of exchange had temporarily collapsed, there was for a time some fear that our exports of wheat would be seriously hampered, to the great injury of the farmers of the central West. Even after the tension respecting exchange had relaxed, the movement of wheat would then have been accelerated had there been ships under the American flag to carry it. This last is true to-day. The nations which were at once our great competitors and the carriers of our goods entered into the effort to destroy each the commerce of the other, associating with them nations of lesser, but real, industrial and commercial importance. Each began to clear the seas of the ships of the hostile powers. At once American interests went by the board.

As this is written many ships lie idle in the harbor of Hamburg. Among them are three — two British and one German — loaded with cargoes belonging to many American business houses. Months ago some, if not all, of these American concerns paid in full for the goods which are thus detained. The cargoes for which our money has thus been paid are sorely needed by their owners, but the interest of those owners is of relatively small concern to the captors. For them the primary fact naturally is that two of the vessels are under a hostile flag, and the third will not venture out to sea for fear of capture. What boots it to them that the persons who own the goods that these vessels contain are suffering for lack of them? What is the interest of America in this matter, that they should consider it? The American consignees of these cargoes know well by now the value of an American merchant marine. If these vessels had been under our flag, the cargoes for which American money was long since paid would long since have been delivered. Since the ships are under foreign flags, the fact that their cargoes have been bought and paid for by Americans is but an incident, not of essential importance to the belligerents; and so the American firms are without their money and their goods, and will be so until such time as the belligerents shall consent to some arrangement consistent with their own interests for the release of these cargoes.

The stringency in dyestuffs and cyanides has not been wholly a matter for pleasant thought to those who have needed these materials to continue their operations. The thought of our complete dependence upon a foreign nation for the necessary supplies for industry, while we ourselves possess both the materials from which these supplies are made and the knowledge how to make them, is of itself sufficiently unpleasant to an American. The position of him who needs these materials to keep his plant from closing is far worse. In mine and mill in many parts of the country there has been a realization of what this stoppage means. Such relief as has been obtained came in the form of a consent, on the part of the German government, to permit the shipment of a small quantity of dye-stuffs and chemicals by way of Rotterdam, provided that a vessel under the American flag was sent to receive them. This arrangement still stands, with the further restriction that the American ship shall on her outward voyage carry a cargo of cotton consigned to Germany. Here is a striking case of the insistence on the part of a foreign government upon the use of an American merchant marine in foreign trade, shipments being forbidden unless they move in vessels under our flag.

As this is written, there lie in many harbors vessels flying belligerent flags which dare not venture from their hiding places. Coincident with this is such a demand for ocean shipping to carry grain and other exports that a leading financial journal says, —

‘The great drawback is the supply of ocean tonnage and the rates demanded. December boats are very difficult to get and January boats are scarce. As high as 21¢ per bushel has recently been paid from North Atlantic ports to Genoa, which is a record high price.’ The same issue says: ‘Tonnage on the Pacific coast is becoming very scarce. It is reported that steamer tonnage is almost impossible to obtain. Export shipments of coal to the Mediterranean have practically ceased on account of the high prices. Urgent demand for steamers for December and January loading in several of the transatlantic trades continues, particularly for grain and cotton; but the scarcity of available tonnage and the almost prohibitive rates demanded by owners greatly restrict trading.’

This is in the transatlantic trade. The writer goes on to say: ‘A fair demand continues for tonnage to the West Indies, South America, and for long-voyage accounts.’

The National City Bank of New York in its December circular says: ‘Vessels carrying the American flag are in great demand and commanding high pay, being particularly wanted for the trade to German ports, taking out cotton and bringing in dye-stuffs, potash, and sugar-beet seed.’

It is evident now to all men that we lack control beyond our own waterfront of the means of transportation upon which our agriculture and our industries are dependent. We may not run our factories continuously on full time if our foreign trade is cut off. It is common knowledge that many which are running to-day would stop in whole or in part if transit across the sea were interrupted. That transit, however, we have not for long years controlled and do not now control.

The record shows our ability to manufacture in competition with the world in many lines; and it also shows that our farmers can, and in large part do, supply the needs of the world for food. We therefore possess the goods of both agricultural and industrial origin which the world wants and which we need to sell to the world. We possess better than any other nation the internal transportation lines which take these goods to the coast. There our advantages stop. The water lines, which form in a large sense the terminal facilities for our great railways, distributing the products carried by them from our ports all over the world, are in the hands of our competitors. They withdraw these vessels at their will, or because of their necessity, or through the act of some enemy. We suffer, but have been helpless. If a belligerent power wishes to destroy the ships needed to carry Kansas wheat, it will do so when it can, and Kansas has no redress. There are vessels of war eager to-day to get into the open sea and destroy thereon the commerce upon which we are at this hour dependent for the transportation of our great and growing export trade in manufactures and foodstuffs; and nothing we are able to do can prevent them.

All the world knows that so much American commerce is carried in British ships that this commerce is therefore necessarily largely dependent today upon the English and French navies for protection in the Atlantic, and upon the Japanese navy for protection in the Pacific. A leading financial paper says, ‘The British navy has saved our export business.’ Our commercial fortunes are thus linked, not by our choice, with those of others, and we share against our will in their war-hazards. The course of legitimate naval warfare directed against vessels carrying our goods may, quite without intent or desire on the part of any belligerent, work us serious injury. None of the contesting powers desire this any more than we do. All are friendly to us as we are to them. All are our customers to-day.

The situation is indeed of our own making. It is the normal outcome of lack of foresight. But it cannot with safety be allowed to continue. To end it as speedily as possible is an act of true neutrality and a plain duty. In a commercial sense the risk to ships under our flag, whether privately or publicly owned, is no greater than the risk has been and may be to our goods under other flags, with the important difference that in the former case we have the conceded right to act in our own defense, whereas now we must accept our loss helplessly.

Any state of affairs which places the transportation of our commerce, during a European war, chiefly in the hands of one side in such a contest, is both humiliating and hurtful. It makes real neutrality of spirit and of practice more difficult; and it puts a belligerent who indirectly may do us harm, without so intending, in a false position, not of his fault but of our neglect. The practical importance of this matter appears when we consider that by the excess of exports over imports between September 1, 1914, and January 1,1915, we paid in goods over $250,000,000 of our floating debt to Europe, — a payment necessary to our recovery from the initial financial shock of the war, but dependent — in the absence of American ships — upon our use of vessels under other flags, many of them ships of belligerent powers subject to war-hazards which at times threatened to stop their movement.

The situation may be thus summed up: we have for years been depending in our foreign trade upon such coincidence between the interests of our foreign competitors and our own as to make them desire to carry the goods which we sell abroad in competition with them. They have fixed the sailings, they have arranged the routes; it has rested with them to determine the ports to which ships should or should not carry our goods direct. They have fixed the rates for freight; they have determined the extent, quality, and cost of the accommodations for passengers. It will not be pretended that they have placed at our disposal in all directions accommodations equal to those which they have themselves enjoyed. They have operated for profit: where it was more profitable to run many ships, many ships have, been run; and where it was unprofitable to run any ships, no ships have been run. In all this the interests of American commerce have been incidental and those of the European-owned carrier primary. This has been the condition for years. Some have seen it; most have not; and it needed the rude shock of war to wake us up.

II

At the very time of this awakening came enlarged and unexpected opportunities. South America, which imports over nine hundred millions in value annually, and pays for it with her own products, found many of the markets in which her goods were sold closed, and many places in which she had bought no longer open. She turned to us, and through official representatives and by private efforts has sought and is still seeking to establish closer relations with us. The currents of her commercial and financial life which have hitherto flowed to and from Europe she is willing to direct to us; but we have not yet been ready to take up the great opportunity thus laid before us. We have been a borrowing rather than a lending nation, and for the first few weeks after the war broke out we were seriously concerned with the settlement of what we ourselves owed Europe. We were then quite unable to extend the hand of financial help to our sister nations in the south. Now that our finances are in large measure adjusted, we are beginning to consider what may be done in a constructive way to build up American interests in Latin America. The problem has two phases: It is a fiscal problem and it is a shipping problem. We have not had the money to lend, nor have we had under our own control the ships with which to move our products at our will wheresoever we and we alone saw fit to have them go. The determining factor in transportation rates and movements has been, here as elsewhere, the economic interest of the European stockholders of the ocean transportation lines. Europe has both in finance and in transportation controlled the trade of South America; and when for purposes of war she relaxed much of that control for the time, we were not prepared promptly to take up the task she had laid aside.

One may regret this and wish to alter the conditions without forgetting that there have been hitherto strong reasons why these things have been so. We are as yet young as an exporter of manufactures on a large scale. We are younger still as a lender of funds abroad. We seem even at this moment to be passing from the debtor into the creditor stage, and shall have many scores of millions yet to pay ere we cease our annual tribute of interest to foreign lenders. Still, with the nations of the world looking to us for supplies of many kinds, and with our great competitors engaged in the act of mutual destruction, American progress is in the right direction. We are saving both capital and interest. Our competitors are busy destroying both, and their human equipment and their business good-will besides; such is the economic foolishness of war. Financially, therefore, we gain ground in the sense of becoming a greater factor in the world’s finance. Loans have recently been made to Sweden and to France. Our banks have established branches in South America. Direct dollar credits with foreign centres are in actual operation and the tendency is forward.

On the shipping side of the problem a good beginning, but only a beginning, has been made. Few or none deny that the problem is serious. Quite painfully rare are practical attempts at its solution.

III

Why is a merchant marine wanted? Is it an end or a means, and if the latter, a means for what? Is it a thing to be desired chiefly for itself as a naval convenience, a gainer of profits, a source of national pride and gratification; or is it a necessity, a working tool for practical purposes of peace, for needed services apart from any question of mere sea-power ? Is it not essential, as we see things to-day, that we shall have this working tool and shall have it under our own control, to be used primarily for the promotion of the general interests of American commerce? Is not a merchant marine our public messenger, to be sent where and when American commerce needs it to go, to be in very truth the servant of us all, and not a thing of isolated interest, standing by itself, — a thing upon whose separate gain or loss the movements of the commerce of many millions is to depend? What is the work this servant of ours is expected to do? Is it not the furnishing of transportation on behalf of the American people, as, when, and how it is needed for the general interests of the American people? Take the case of wheat and cotton and apples, now retarded in their movements by high rates and the scarcity of ships, both of which are out of our own control, or if controlled by our citizens, are involved in the present partial embargo imposed on our shippers. Is our commerce in these products being satisfactorily served now? Is it not rather the fact that the goods we wish to sell, for which the nations eagerly seek, are restrained in their movements by lack of ocean transportation facilities directed and inspired by the spirit of helpfulness to America? If it is said that marine movements must be governed by economic conditions, it is pertinent to ask what and whose economic conditions. Are those of the carrier or those of the nation to rule?

Existing conditions make clear certain definite needs: transportation at sea under our own flag; secure control of it in the interest of all — not of a few; righteous rates guarded in the interest of all American commerce and not in that of relatively few investors either at home or abroad; certainty of transit as to place, rate, and security, to go where our goods are wanted, when wanted, at a reasonable cost, free from competitors’ control and from their war-hazards.

Sixty car-loads of apples from one state lay in early December in a single port for lack of steamers. If further illustrations were required of the need of action, they would be afforded by the present condition concerning cotton. Cotton moves with difficulty and almost wholly in foreign ships. There is complaint about insufficient insurance, and more complaint about excessive rates. Suppose there were insufficient foreign ships and rates were to rise to a prohibitive point, or by some chance of war the supply of foreign ships were to be cut off. We have a cotton crop of about 16,000,000 bales, of which certainly 8,000,000 bales should normally be sold abroad. If from either or both of the causes suggested we were to lose the sale of 5,000,000 bales of cotton this winter, it might well mean a loss of business amounting to $150,000,000 in a single season. The prospect of the loss of a foreign sale of 5,000,000 bales under war conditions was recently rather less of a dream and more of a possibility than is desirable. The so-called cotton pool was a measure of self-defense against this very possible condition. True, the matter was at one time largely a question of exchange. It is not so to-day. Now it is a question of ships.

It will be said that these are temporary and unusual conditions. Unusual, truly, but real and expensive, requiring insurance against their recurrence. How temporary they are, we do not know. None rise to say how long the rather meagre facilities of to-day, with their consequent high rates, may continue. The point is that we arc not and we ought to be in control of the situation. Our commerce is, and it ought not to be, in the control of those whose chief interest is not our own. There are those whose national duty would compel them to destroy the vessels on which our cotton exports now depend. Were these ships under our flag, that duty and danger would not exist. These difficulties come at a time when it is of peculiar public importance that the stream of our commerce should flow smoothly and in the largest possible volume. To argue that these are passing conditions on which action cannot be predicated, is like telling a man not to take out insurance for the future because his house has just been burned.

How great the confusion of tongues, however, when any practical remedy is suggested! The laws of economics and the experience of men are alike summoned to help prevent the accomplishment of anything effective. The multitude of voices confuses counsel. Most of the voices are of a purely negative character. They are against something. No proposal but raises a host of voluble enemies. The tangled skein of conditions that has throttled our marine progress is not easily or rapidly unraveled. Almost the one thing on which all agree is that matters are wrong. But every attempt to unwind a thread in the skein makes a row. The builders are adverse to one proposal; the owners object to another; shippers protest against another; here officers cry out in alarm; there seamen say they are injured. Every immediate and relatively small interest in the matter is loud in dispraise, and only the chief party concerned — the men of farm, factory, and mine, whose interest vastly outweighs all others — gets little or no hearing. Amid the outcries of the interested no solution is offered. Each looks at the problem on his own little side and wants nothing done which, however otherwise desirable, is inconvenient to himself.

Private interests, indeed, propose in some measure to supply the facilities our commerce needs, but none have yet come forward with definite specifications showing how this is to be fully done. It seems necessary that private capital should in this matter look at portions of the problem from a point of view opposite to that which is required for its solution. The impetus behind the private investment is the reasonable hope of profit, and this is conceded to be normal and necessary. The interest behind the need for an American merchant marine is a far larger thing than that. It is the necessity for transportation facilities for the commerce of the United States, irrespective of the immediate profit or loss on the use of those facilities themselves. It is to provide an outlet through which our commerce shall freely flow, and which shall give to us, under our own control and in our own behalf, facilities equal to those which our competitors have and separate entirely from the risks to which others are necessarily exposed. It would seem to be in the nature of things that something like a compromise should take place here. There may be places in which private capital can and will supply the means required for transit. These should be under our flag and under definite public control as to facilities and rates. The needs, even when proper needs, of private capital, should, however, not be permitted to withhold facilities which the country requires, or to impose excessive rates to make good deficiencies in earnings. The essential thing is to have our commerce flow whither and when it will. So far as private capital provides for this, it will be welcome to do so and will find only support and good-will in so doing. It seems equally evident, however, that there will be places toward which American commerce will seek to flow at such times and in such quantities as to make it impracticable for private capital to operate at a profit. What then is to be done? Is our commerce to have the facilities withheld ? To put it practically, is Europe to have three or four ships a week in cases of this kind, and America to have none under her own control, simply because the trade already exists toward Europe and not toward America? Private capital can hardly be expected to undertake to promote American commerce under such conditions; but is American commerce, therefore, not to be promoted?

Here comes in the illustration of the Pacific railways. Because private capital could not afford to build them and take the risk of no profits for long years, were they not to be built at all? Shall we now leave Alaska undeveloped, save only so far as private capital can see an immediate profit to be made by developing just so much of it as will soon pay dividends? In the case, however, of the Pacific railways and of Alaska, there was lacking an element which is present in the matter of ocean transportation, — namely, that we have in the latter case powerful rivals who have been willing and able, and will again prove to be able, to look sharply after the matter themselves.

The pending shipping bill has the merit that it proposes definitely and practically to get something done. Under it, in any event, vessels under our flag will sail where now they vex not the seas. Under it shippers will receive a means of transportation under friendly control, operated in their interest and in the general interest, where now few or no such facilities exist. Through it many matters alleged to inhibit an American marine can be tested by experience. Now we have but a small merchant marine. The hundred or more ships transferred to our flag under recent legislation are but a part of those which American capital owns, but which, as it shows by withholding them from transfer, it either cannot or will not place primarily at the service of American commerce. It is not necessary to criticize such a policy adversely. The managers of these ships are forced, in the nature of things, to think of the interest of their owners; and this interest must be to them supreme.

IV

So here we have defined the two major elements of the whole problem: the interest on one side of American commerce as a whole, and the interest, on the other side of the relatively few interested as ship-owners, ship-builders, officers, and sailors. The American people will never consent to the lowering of the standards they have set for working conditions at sea. Then, we are told, vessels cannot be operated profitably under the American flag. That means that profit requires them to take such risks as we now see very plainly are involved in sailing under a foreign flag. It means that, at such time as the present, the interests of American commerce must be subordinated to the risks involved in the foreign registry. It means that to-day the need of profits requires them to accept a chance of capture or destruction at the hands of a hostile cruiser. Two American-owned ships which were on their way to be transferred to our flag have been sunk by cruisers hostile to the flag they carried. It means that Americans possibly are owners to-day of the very vessels under a belligerent flag held up in a foreign port while containing American cargoes. The private ownership by Americans of vessels under a foreign flag, kept under it for reasons of private profit, involves these chances; and this means that the interests of American commerce may in the nature of things be subordinated, in times when those interests cry out in greatest need, to other considerations which, however important, are less vital to the American people. This is the case to-day.

If then the conditions under which our ships are to be operated cannot be changed; and if, with the conditions unchanged, American owners of vessels under the foreign flag cannot transfer them to our flag and operate them successfully; and if it is true that until we build standardized ships in considerable quantities, we cannot build them as cheaply as they are built abroad, what then is to be done? These things, however true they may be, do not alter the fact that the American people require that their goods shall be carried on the seas by vessels under their own control where and when they wish them to go, at competitive rates, and with service competitive with that provided by the commerce of other nations.

The skein of which we have spoken appears to be so tangled that it can be unraveled only by being cut. How shall we cut it? Three major proposals are made. One has the benefit of historical precedent in our policy and of recent enactment into law. It is that of differentiating duties. The present statute permitting these is now in litigation and likely so to be for some time to come. It affords therefore no immediate promise of relief. It is doubtful, too, whether in its present form it is sufficient; for there are those who think that a differential of five per cent from existing duties would have to be supplemented, in order to be effectual, by the imposition of a corresponding duty on goods in foreign bottoms which would otherwise be free. It is not a powerful argument against this proposal that our foreign competitors might take similar action, or at least action calculated to promote their own maritime interests. Such action they are, of course, free to take, and have indeed taken in times past. It could hardly be called retaliation. It would rather be a normal watchfulness in their own behalf such as they exhibit in many other respects. It would not be a matter at which we could take just offense; and it is difficult to see how any action they might take would be effectual against the advantage to our own shipping which the differential duties would secure.

A second proposal is that the government should guarantee bonds whose proceeds should be invested in American shipping. This would undoubtedly lead capital to look with more friendly eyes upon investments in vessels than has hitherto been the case in this country; and it is probable that this could be so arranged that the government guaranty would be not only without risk, but possibly even with some indirect profit. The suggestion, of course, implies that the guaranty should be available on equal terms to all entitled to it, and that a distinct limit should be placed upon the extent of the obligation assumed by the nation. It is suggested that, subject to the supervision of a central board, the mortgage securing the bonds should be guaranteed by the government, and a percentage of the interest be retained to compensate for the guaranty, — thus providing an attractive security with a limited liability on the part of the government, whose supervising central board would possess broad powers. There seems no reciprocal guaranty under this plan that the ships will be obtained to operate in accordance with the needs of American commerce. Private capital would still be the largest factor in interest. Something would be done, indeed, because the ships would naturally be favorable to American producers and would be free from the risks of foreign complications from which we now suffer. Yet there seems to be lacking that assurance that a working tool suitable for all the purposes of our commerce will be created; and this seems to be an essential factor in the problem.

The third pending proposition is that the government shall become a majority owner in a corporation to purchase, lease, or build ships to be operated under the American flag wholly in the interests of American commerce. It is not proposed that this shall necessarily be a permanent thing. It is on the contrary distinctly stated that under certain conditions it shall be a temporary thing. The plan, however, does propose, and so far as appears is the only one which proposes, to operate primarily in the interest of American commerce and only secondarily in any other interest. It is free from all the risks involved under foreign flags. It involves no greater necessary risk either to ships or to government than is incurred by vessels doing a transoceanic business under the American flag. The flag itself is the emblem of our national protection, and it protects all alike, whether the owner bean individual, or a corporation privately owned, or one in which the government is the chief owner. There is no obligation of protection which the government owes to itself in a ship of the latter kind, that it would not owe to a ship owned by a private citizen. It is assumed, of course, that just as the individual or the privately owned corporation would exercise reasonable care to comply with national and international law in purchasing, building or operating ships, so the governmentowned corporation would be similarly sensible. There does not seem to be involved in this proposal the entry into the marine field of a cutthroat competitor. The purpose of the governmentowned corporation would be to render service to the whole American people. It would be very harmful to some of them, and to those whom it distinctly wishes to encourage and over whom it extends its protection, if it so operated its portion of the marine as to injure or destroy another portion of its own merchant marine. That is purely a matter of sensible administration; its administration must be carried on in the light, for all men to see and criticize. On the other hand, it certainly would not be the purpose of the government-owned corporation to advance its rates with every stringency in ships, so as to secure an extra profit at the public cost, when this would be inconsistent with its conception of service to American commerce. It is the fundamental conception of this plan that American business needs an outlet which in all its forms private capital cannot supply, and should not be expected to supply so fully and promptly as the needs of the country require; that there is but one way in which this outlet can be supplied quickly and effectively enough to prevent continued loss of opportunity and consequent injury to American business; that the government may properly perform a portion of its work of promoting commerce by providing these facilities, — until such time only as private capital may be able to undertake the task on the only basis upon which it can be expected to undertake it, namely, the reasonable hope of a reasonable profit. At such a time the government would expect to withdraw, retaining probably through some instrumentality a general supervision in behalf of the party chiefly interested —the American people.

One fails to see why one of these plans should not be carried out and why the others should be left unfulfilled. In the proposed law providing for the government-owned corporation there is involved no repeal of the principle or the statute concerning the discriminating duty in favor of American ships. No more is there involved any antagonism to the development by American capital of privately owned vessels. Indeed, the contrary is true. One thing may be said with assurance — that it will be the purpose of the government to enhance, by every means which it shall discover to be available and proper, the establishment, as promptly and fully as possible, of a marine which shall give to American farmers, manufacturers, and merchants facilities for the transportation of their goods at sea under the protection of our flag, free from the interruptions of wars and rumors of wars among foreign powers.