CHAPTER XXVIII

HISTORY OF THE AMERICAN MERCHANT MARINE AND RECENT LEGISLATION

Early Growth.-The history of the American Merchant Marine has been often told, and we need only to refresh our memories on some of the chief incidents which have a bearing on present problems.

When the nation was born, the merchant marine was in a sorry plight. Promising developments of the colonial period had been checked by the Revolutionary struggle, and in 1789 the entire fleet registered for foreign commerce amounted to only 123,893 tons.

The tariff legislation of the period favored our ships by a reduction of duties by 10 per cent for all goods imported in American vessels. The Napoleonic struggle in Europe then impending, and soon to break out and engage the energies of Europe for the next decade and a half, stimulated our shipping. Tonnage grew to 667,107 in 1800. Our own trade had been handled almost entirely in our own vessels. and we absorbed a large carrying trade from the West Indies to Europe, and a considerable transshipment trade arose.

Development of shipping checked.-Things went well until combatants in Europe through their blockade began to interfere with our shipping. Vainly we protested. Our protests unheeded, we were led into the War of 1812 of glorious memories and vague and uncertain results. When peace settled upon the world we were confident of the strength of our position. The preferential treatment of our shipping was abandoned

through the legislation of 1828, and commercial treaties removed all special advantages we had enjoyed.

Our merchant marine developed more slowly. But two factors retarded the loss to the American Merchant Marine. One was the opening in 1824 of the Erie Canal, which gave to New York its prominence as a shipping center. The other factor was the cession of Florida by Spain in 1819, which substituted a fresh timber supply-mostly oak-for the rapidly diminishing supply of the northern central regions.1

Steam

Great

Conditions of competition were changing. was beginning to be applied as motive power. Britain encouraged the building of steamships by a system of subsidies. The Cunard Line owes its beginning to this policy. To some extent the United States met this competition, and in the forties several steamship lines were subsidized. In 1847 the Government made its contract with the Collins Line, a worthy rival of the Cunard.

The clipper ship era and its subsequent decline.—For a few years beginning with 1843 when the first clipper ship-The Rainbow-was designed, there was a splendid development of American shipping. In 1850, the total tonnage of merchant shipping, including steam vessels, in the United States was 3,535,454 tons. In the same year, Great Britain had a merchant marine totalling in the home and foreign trade, 3,565,133 net tons From 1846-1857 American shipping engaged in foreign trade grew from 943,307 tons to 2,268,196 tons. It is 1 See America's Merchant Marine, Banker's Trust Company, pp. 11 and 12.

2 See America's Merchant Marine, Banker's Trust Company, p. 13,

2

of this period that Wiliam Brown Meloney in The Heritage of Tyre1 writes: "The United States was the mistress of the seas. Ship for ship-clipper or ordinary merchantman-the United States dominated the commerce of the world; but as 1857 was the evening of the clippers it was the afternoon of our merchant marineforeign commerce." Shipbuilding reached its climax in 1851, when no less than 583,450 tons of shipping were launched from American yards. In the next few years and even before the Civil War there was a marked falling off. This followed the withdrawal of the subsidies and encouragement which the government had given to shipping. The Civil War merely accelerated the decline of American shipping, which had begun six years earlier. Confederate cruisers between 1861 and 1865 burned or appropriated 110,000 tons of American shipping, and drove 751,595 under foreign (mainly British) colors. Thus the seagoing fleet, which in 1861 amounted to 2,496,894 tons and carried 65.2 per cent of our exports and imports, had shrunk in 1866 to 1,387,756 tons, which carried only 32.3 per cent of the foreign trade.

The loss was steady until 1898, when a minimum tonnage of 726,213 was reached. As to carrying American trade in American ships, the lowest point was reached in 1900, when only 8.2 per cent of our foreign trade was carried in American ships.

The decline in American shipping was co-incident with the rise of iron and steel ships. The supremacy of American shipping of clipper ship days was largely based upon the abundance of raw material and skill in ship construction. With the appearance of iron materials, this supremacy passed to Great Britain. For

1 P. 89.

many years British shipyards enjoyed not only this advantage, but also a lower wage rate, and large scale production.

Vain efforts to revive American ocean shipping.-During the thirty years before the war the question of stimulating the merchant marine was constantly before the public, but little was accomplished. The only positive legislation was the Postal Aid Act of 1891, under which arrangements were made with American lines for the carrying of mails, at rates somewhat higher than

contract rates.

In recent years, even before the war wrought a complete change, conditions had taken a turn for the better, and many of the adverse factors which had prevented the growth of an American merchant marine had either been eliminated or else converted into favorable influences.

Awakening interest.-Thus the interest in the internal development of the country is no longer all-absorbing, and no longer entirely precludes the interest in the overseas trade. The large amounts of capital which have been invested in American shipping by such firms as the Standard Oil Company, United Fruit Company and the United States Steel Products Company show new needs and a new trend of thought.

The development of our steel industry has brought the price of ship plates somewhat below the figure quoted by British manufacturers. This benefits especially the manufacturers of standard tramp steamers. Furthermore, new railroad lines have been constructed which act as feeders of our shipping industry. This is especially true of coal-carrying railroads. Virginia

steam coal of excellent quality can now be delivered at low cost at Atlantic seaports, such as Norfolk, Newport News and Charleston. This coal is able to compete with the Australian, Japanese and Welsh coal which used to control the Far Eastern market and tends to reduce the return freight rates on imported nitrates, as well as on copper, tin, iron ores and similar commodities. The trade also invaded Europe and seems to be getting a firm foothold there.

The first evidence of a desire on the part of Congress to encourage American shipping on the high seas was the insertion, in the Panama Canal Act of 1912, of a clause authorizing the naturalization or admission to American registry and flag of foreign-built vessels under five years of age, and granting the free entry of materials used in the construction and equipment of ships. This clause reversed the national policy of a hundred years. In the face of this invitation, two years went by without a single foreign-built ship seeking the American flag. No better evidence could be desired of the higher cost of operation imposed by American policy than in this fact.

The willingness of Congress to encourage shipping was further proved by the inclusion in the present tariff act of a clause allowing a discount of 5 per cent in the customs duties on goods imported in American bottoms. We are reminded of the early policy of 1789 which had produced such marvelous results, but administrative interpretation and the Supreme Court's decision declaring it unconstitutional made it nonoperative, and now the new law has superseded it.

New conditions caused by the European war.-The European War created new conditions and oppor