CHAPTER XI.

Shall the Government Subsidize

Merchant Ships

Hon. Marcus A. Hanna Favors the Proposition and President Arthur T. Hadley of Yale Argues Against It.

TH

HE leaders of the Republican party have been in favor of subsidizing the merchant vessels, in order to encourage in this country the building of a larger number of vessels for the purpose of carrying commerce. In the measure before the Fiftysixth Congress, it is proposed to expend $9,000,000 a year for a term of years, as subsidies of vessels and the encouragement of seamanship. It is argued that this will give larger terms which will be felt in our industries. It will create a larger outlet for farm products of all kinds and for manufactured articles.

Senator Marcus A. Hanna sets forth very clearly his reasons for supporting the measure now before Congress, as follows:

"If every American citizen could take the time to acquaint himself with the provisions of the shipping bill now before Congress, I believe that not one in five hundred would then oppose it. it. The thing the friends of the measure most court is a fair discussion of its details.

PURPOSE OF THE PROPOSED BILL

The bill is not difficult to understand. Its purpose is to offer to Americans a sum from the National Treasury equal for a period of years to the extra cost in this country of building ships and operating them in competition with foreign ships in our foreign trade. As the number of ships increase, their compensation decreases. Simultaneously the cost of their construction will undoubtedly diminish, as will the cost of their operation. Finally, it is

hoped that the compensation may cease at the end of ten and twenty years, as to old and new vessels respectively without arresting the further growth of American shipping.

It has been demonstrated before the Senate Commerce Committee and the House Merchant Marine and Fisheries Committee, that it costs from 20 to 25 per cent more to build ships in this country than it does to build them in Great Britain. This difference is due to the wages paid to the workmen in American shipyards being nearly double the wages paid in British shipyards. In this country employment is not constant in shipyards. For this reason the full efficiency of the men cannot be applied to construction. Shop economies are impossible where the men are intermittently employed. At least 50 per cent. of the cost of a finished ship is paid to labor in the shipyard alone. When there is steady employment in American shipyards for a few years the efficiency of the men and the economies in construction will enable our people to build ships as cheaply as they are built in other countries and without reducing the wages paid to labor.

COST OF RUNNING THE SHIPS

Then there is the cost of running the ships. The wages paid the officers, firemen and seamen in American ships are fully 25 per cent. higher than is paid in other coutries' ships. The food provided in American ships is much superior in quality and more abundant in quantity than in foreign ships.

In many of our states vessel property is taxed on its value, while the practice in foreign countries is to tax only the net earnings of the ships.

One of the most difficult things to do is to draw the trade away from the men whose control of it has been long established, and who are therefore familiar with and experienced regarding its changing needs and conditions. The beginner is at a great disadvantage. To build up a new line of ships and keep them constantly and profitably employed requires agents in all parts of the country to which the ships run, as well as agents all over our own

THE SURRENDER OF SANTIAGO, JULY 17, 1898

After a little ceremony the two commanding generals faced each other, and General Toral, speaking in Spanish, said: "Through fate I am forced to surrender to General Shafter, of the American Army, the city and strongholds of the city of Santiago." General Shafter in reply said: "I receive the city in the name of the Government of the United States.'

country. The stability and permanence of the line must be demonstrated to the cautious shippers who are used to, and possibly contented with, the service of the old-established line. This advantage in itself is an enormous one, and it is largely that advantage which now enables British ships to successfully compete with Norwegian, Italian, Dutch, French and German ships. For American ships to secure the larger part of their own foreign trade, and of which they now carry less than 9 per cent., will require time, courage, costly experience, probable losses and little profit for a long time to come.

WHY NOT LET PRESENT CONDITIONS CONTINUE

Why should our people be asked to build up an American marine in the foreign trade-why not let present conditions continue?

There are many good reasons. First, this nation needs merchant ships, trained and experienced officers and men, for the reinforcement of the navy in time of need; for auxiliary naval cruisers, for troop transports, for colliers, and for many other purposes, as was shown during our late war with Spain. Next, there is the economic unwisdom of sending $200,000,000 out of the country each year to pay our bills for ocean transportation. It is too serious a drain upon our gold. We need all the favorable trade balances we can get so we may sooner cease to be a debtor nation.

We have, in the greatest abundance and cheapness, all the materials needed in shipbuilding. We have men competent to take these materials in their raw state and transform them into all of the different manufactured shapes and articles needed in the construction of ships. Hundreds of different trades, businesses and professions contribute to the construction of one modern ship. Each of these would feel the stimulus of prosperity that would follow the American construction of the ships we need for the carriage of our imports and exports.

The employment afforded in keeping up a shipping amounting to about 5,000,000 tons is varied, extensive and profitable. Fifty millions of dollars a year would be a very conservative estimate of