ports of the United Kingdom in trade with foreign and colonial ports for 1898 amounted to 61,395,898 net tons. Of this amount 11,986,121 net tons represented the entries from and clearances for ports of the United States. Thus nearly one-fifth of the carrying performed in foreign and colonial trade with the United Kingdom during 1898 by British steamships was the carrying trade of the United States. Nearly onefifth of the British earnings of $325,000,000 may thus be credited to the steam carrying trade of the United States, or in round numbers $60,000,000. The gross earnings of the Cunard Steamship Company alone in 1898 were $6,382,614.

We may now turn to our own reports. The statistics of our commerce and navigation for 1898 show that the entries and clearances of steamships in foreign trade with the United States (excluding the Great Lakes) amounted to 36,143,381 net tons. Of this amount 12,169,219 net tons consisted of British steamships in trade between the United States and the United Kingdom. (The small difference between the American and British figures in this item may be mainly attributed to the difference in the fiscal years of the two countries.) One-third of our oceancarrying trade by steam is thus carried on by British steamships plying between this country and the United Kingdom, earning, as estimated, from that trade $60,000,000. It is not, therefore, a violent assumption that the remaining two-thirds of that trade earn approximately corresponding rates, and that the earnings of steamships in the foreign trade of the United States are about $180,000,000 annually.

The entries and clearances of sail vessels at ports of the United States in foreign trade (excluding the Great Lakes) amounted to 7,448,618 net tons, or about one-fifth of the steam total. If these vessels earned as much proportionately as steamships, it would be necessary to add over $30,000,000 to the steam earnings just stated. Sail vessels, however, do not carry passengers and mails, so this source of revenue is not open to them. For obvious reasons freight rates on sail vessels are considerably lower than on steamships. An addition of $10,000,000 for the gross earnings of sail vessels in the foreign trade of the United States will undoubtedly be an ample estimate.

By this process of computation the value of the foreign carrying trade of the United States would be about $180,000,000 for steamships and about $10,000,000 for sail vessels, or in all $190,000,000. At various points in the foregoing estimates modifying factors in detail have been considered, but it has not seemed necessary to develop them, as in the main they offset one another and do not materially affect the general conclusion.

The subject may be approached from other directions. Thus, the total value of our exports and imports by sea for the fiscal year 1899 was $1,806,876,073. A few years ago Mulhall, the British statistician, estimated ocean freights on British vessels the world round at 8 per cent on the value of the cargo. Applying this rate to the exports and imports by sea stated, we obtain an estimate in round numbers of $140,000,000 for freight money, to which must be added the amounts paid by passengers, immigrants, and mails. The passengers and immigrants arriving in this country average annually about 400,000, and the steamship receipts from this source doubtless reach, if not exceed, $15,000,000, to which must be added outward fares amounting to probably half that sum. The United States pays approximately $1,500,000 for its ocean mails, France pays annually $1,000,000 in round numbers for its Havre-New York service, and other steamship lines from other sources receive amounts, outside of freights and passenger fares, which

will swell this total. By this method of computation, the carrying trade is valued at about $170,000,000.

Again, the gross tonnage of the representative steamship companies, the Cunard Company, Peninsular and Oriental, Royal Mail, Pacific Steam Navigation Company, Messageries Maritimes, Navigazione Italiana, and Lloyd-Austriaco, is 1,122,935 gross tons, and the gross earnings of that tonnage last year was $56,853,000, or an average of $50 per gross ton. Sir Robert Giffen estimates that British steamships earn on the average about £12 ($58) per net ton, which would be equivalent to somewhat less than $40 per gross ton at the usual difference between gross and net tonnage.

In the report of the Bureau for 1894 tables were printed showing by name 648 steamships aggregating 2,000,000 gross tons, regularly engaged in the ocean-carrying trade of the United States, and it was estimated that allowance should be made for tramp steamships equivalent to at least 300,000 gross tons more in regular employment. The steam entries and clearances of the United States that year aggregated 25,311,526 net tons. The steam entries and clearances of the United States in 1898, as shown, amounted to 36,143,381 net tons. While it has not been feasible nor was it important again to prepare a list of the steamships regularly engaged in trade with the United States, the facts developed in 1894, together with those deducible from the British statistics, show that at the present time the steamships regularly engaged in the foreign trade of the United States aggregate about 2,800,000 gross tons, to which should be added "tramp" steamships, equivalent to 400,000 gross tons regularly engaged in trade. If we take the average annual earnings of these 3,200,000 gross tons of steamships at only $40 per ton, the British average, we shall have gross earnings for steamships amounting to $128,000,000. If, considering the amount of passenger business done by steam lines connecting with this country, we take $50 as the average earnings per gross ton (the average of the Cunard Line is $55), we shall have gross earnings of steamships amounting to $160,000,000, to which should be added about $10,000,000 for sailing vessels, or $170,000,000 in all.

It is practicable to obtain much closer estimates for any one year of the value of our ocean-carrying trade, though the force in this office is not sufficient to undertake it at this time. Thus, our principal export in 1898 was raw cotton to the amount of 3,850,264,295 pounds, valued at $230,442,215, of which 70 per cent was shipped from four ports; and of the total, 1,753,413,025 pounds, or less than half, was shipped to Great Britain, Liverpool being the principal port of import in that country. The ocean freight rate per 100 pounds on cotton to Liverpool for 1898 is reported by the secretaries of the cotton exchanges as follows at the following ports: New Orleans, 50 cents; Galveston, 55 cents; Savannah, 45 cents, and New York, 27 cents. Except at Galveston, the rates to continental ports are reported to be higher. The figures suffice to show that the ocean freights on our exports of raw cotton alone during 1898 were fully $20,000,000.

There is no method of computing the value of our ocean-carrying trade by which it can be estimated at less than $150,000,000, and none by which it can be estimated at more than $200,000,000 at the present time.

PROTECTION TO SHIPBUILDING.

Seventh. To those who accept the doctrine of protection to national industries, the situation of the shipbuilding industry is anomalous. While our tariff is so adjusted as to give a great degree of encourage

ment to nearly every line of industrial activity at home, manufactures, agriculture, and mining, and in some instances to give that assistance where natural advantages render it unnecessary, shipbuilding for the foreign trade has never received legislative consideration. The law of the United States which restricts to vessels built at home the coasting trade of the country has undoubtedly promoted shipbuilding and navigation. It is possible to overestimate the effect of that law, for the growth of our shipping on the Great Lakes, especially of large steamers, is attributable more to the fact that until recently the lakes have been inaccessible from the ocean to large vessels than to any statute. So, too, many of our river and coast vessels are of such a construction that it would not have been commercially feasible to build them abroad and bring them across the Atlantic. To that law, however, is undoubt edly due the existence of such shipyards as we now have on the Atlantic coast, our extensive system of coasting steamship companies, and our fleet of large fore-and-aft sail vessels. One of the best-known British writers on maritime subjects summed up in the Liverpool Journal of Commerce (July 14, 1899) the effect of that law in these words:

If only the ocean tramp under the British red ensign were permitted to carry cargo from port to port along the United States coasts, then indeed the big four-masted and five-masted fore-and-aft schooners, so well beloved there, would disappear like snow before the sun.

The law in regard to the coasting trade and the registry law are frequently confused and the effects of the former attributed to the latter. Of our 367 steam vessels registered for foreign trade (see Appendix P) more than half are engaged partly in the foreign and partly in the coasting trade, and the latter occupation has made obligatory their construction in the United States. American capital owns and operates a greater steam tonnage in the foreign trade under foreign flags than the American-built steam tonnage exclusively engaged in foreign trade. This fact is sufficient evidence that the registry law by itself affords no substantial protection to shipbuilding for the foreign trade. The merits and demerits of protection and free trade are not under consideration. It is designed to point out the fact that one industry, with higher claims for consideration than any other, has been ignored in the United States, where the protective system has been applied more thoroughly than elsewhere among nations.

FREE RAW MATERIALS.

Everything needed in building and equipping in the United States a ship for the foreign trade or for trade between the Atlantic and Pacific coasts of the United States is now admitted free of duty, and has been so admitted for some years. Congress began the policy of free materials for shipbuilding for the foreign trade in 1872, and has steadily pursued and expanded that policy. Section 10 of the act of June 6, 1872 (Stat. L., vol. 17, p. 238), reads:

From and after the passage of this act all lumber, timber, hemp, manila, and iron and steel rods, bars, spikes, nails, and bolts, and copper and composition metals which may be necessary for the construction and equipment of vessels built in the United States for the purpose of being employed in the foreign trade, including the trade between the Atlantic and Pacific ports of the United States, and finished after the passage of this act, may be imported in bond, under such regulations as the Secretary of the Treasury may prescribe; and upon proof that such materials have been used for the purpose aforesaid no duties shall be paid thereon: Provided, That vessels receiving the benefit of this section shall not be allowed to engage in the coastwise trade of the United States more than two months in any one year, except upon the payment to the United States of the duties on which a rebate is herein allowed:

And provided further, That all articles of foreign production needed for the repair of American vessels engaged exclusively in foreign trade may be withdrawn from bonded warehouses free of duty, under such regulations as the Secretary of the Treasury may prescribe.

By section 5 of the act of February 8, 1875 (Stat. L., vol. 18, p. 36), this free list was extended to include yellow sheathing metal and yellow metal bolts, of which the component part of chief value is copper. The tariff act of March 3, 1883, section 2510 (Stat. L., vol. 22, p. 523), added wire rope to this free list, and further extended its scope by admitting free of duty the materials specified when used for the construction and equipment of vessels built for foreign account and ownership. An even more important addition was made to this free list by section 8 of the tariff act of October 1, 1890 (Stat. L., vol. 26, p. 613), when "plates, tees, angles, and beams," in brief, the structural forms of iron and ́steeĺ required in shipbuilding, were exempted from duty.

Finally, by sections 7 and 8 of the tariff act of August 15, 1894, which are repeated in sections 12 and 13 of the tariff act of July 24, 1897, the free list was extended to include all materials. The provisions of that act, which have now been in force for five years, are:

SEC. 7. That all materials of foreign production which may be necessary for the construction of vessels built in the United States for foreign account and ownership or for the purpose of being employed in the foreign trade, including the trade between the Atlantic and Pacific ports of the United States, and all such materials necessary for the building of their machinery, and all articles necessary for their outfit and equipment, after the passage of this act, may be imported in bond under such regulations as the Secretary of the Treasury may prescribe; and upon proof that such materials have been used for such purposes no duties shall be paid thereon. But vessels receiving the benefit of this section shall not be allowed to engage in the coastwise trade of the United States more than two months in any one year, except upon the payment to the United States of the duties of which a rebate is herein allowed: Provided, That vessels built in the United States for foreign account and ownership shall not be allowed to engage in the coastwise trade of the United States.

SEC. 8. That all articles of foreign production needed for the repair of American vessels engaged in foreign trade, including the trade between the Atlantic and Pacific ports of the United States, may be withdrawn from bonded warehouses free of duty, under such regulations as the Secretary of the Treasury may prescribe.

Such advantages as may be deemed to be involved in free raw materials have thus been enjoyed by our shipbuilders for some years.

A like policy has been followed in regard to ships' supplies. Section 16 of the act of June 26, 1884 (Stat. L., vol. 23, p. 57), provides:

All articles of foreign production needed, and actually withdrawn from bonded warehouses, for supplies, not including equipment, of vessels of the United States engaged in the foreign trade, including the trade between the Atlantic and Pacific ports of the United States may be so withdrawn free of duty, under such regulations as the Secretary of the Treasury may prescribe.

By section 16 of the tariff act of July 24, 1897, articles of domestic production when used as supplies for vessels of the United States, as described above, were exempted from internal-revenue taxes. The provision regarding coal is equally liberal. Paragraph 415 of the tariff act of July 24, 1897, reads:

Coal, bituminous, and all coals containing less than ninety-two per centum of fixed carbon and shale, sixty-seven cents per ton of twenty-eight bushels, eighty pounds to the bushel; coal slack or culm, such as will pass through a half-inch screen, fifteen cents per ton of twenty-eight bushels, eighty pounds to the bushel: Provided, That on all coal imported into the United States, which is afterwards used for fuel on board vessels propelled by steam and engaged in trade with foreign countries, or in trade between the Atlantic and Pacific ports of the United States, and which are registered under the laws of the United States, a drawback shall be allowed equal to the duty imposed by law upon such coal, and shall be paid under such regulations as the Secretary of the Treasury shall prescribe.

FEDERAL TAXES ON SHIPPING.

Tonnage taxes are the only Federal form, accordingly, of the taxation of vessels, and these taxes, as is shown elsewhere in this report, are lower than the corresponding taxes imposed on shipping by maritime nations generally. Furthermore they are imposed at the same rates on foreign and American vessels, and thus in no manner handicap American shipowners and shipbuilders in international competition. Indeed, as is shown in Appendix H, over 90 per cent of our tonnage taxes are collected from foreign vessels. These taxes are applied to the maintenance of the Marine-Hospital Service. The proposition to abolish them would thus in effect be equivalent to the vote of a bounty of about $750,000 to foreign vessels and an addition of about $825,000 to the direct charges on the Treasury of the United States, a proposition which would doubtless commend itself to foreign shipowners, but can not be expected to meet with general favor in the United States. Again, there are practically no fees for the official papers of our vessels at custom-houses, and have been none since June 19, 1886, when by the first section of the act approved on that date (Stat. L., vol. 24, pp. 79–80) such fees were specifically abolished. The abolition of fees on American vessels ordered by that statute so far exceeds in generosity the laws of Great Britain or any other maritime power that if the United States had a merchant marine at all proportionate to its rank among nations the question well might be raised whether some of those charges for services rendered should not again be imposed.

LEGISLATIVE PROJECTS FOR THE UNITED STATES.

Five methods of increasing the American merchant marine in the foreign trade have been proposed within recent years:

First. Discriminating duties or additional duties on imports in foreign vessels or on the tonnage of foreign vessels entering the United States above those imposed on American vessels or their cargoes. Second. Bounties on exports in American vessels.

Third. Free registry for foreign-built ships.

Fourth. Mail subsidies to fast steamships. V

Fifth. Navigation bounties, based on tonnage, mileage, and speed. The first propósition is in conflict with practically all of our commercial treaties (Appendix O), and its adoption would carry with it a complete readjustment of our trade relations with the world. It is, in short, an indefinite postponement of any growth in shipping and a menace to our export interests generally. It is an invitation to retaliation, which would impose on American vessels in foreign ports disadvantages as great as the hoped-for benefits in domestic ports. The experiment was tried in France in 1872 and abandoned as disastrous within eighteen months.

The second proposition, the payment of bounties on exports in American vessels, is not feasible, as our commercial treaties bind us to pay such bounties to foreign vessels also, if they are paid to American vessels. (Appendix O.)

The third proposition, the repeal of the law prohibiting the registry of foreign-built vessels for the foreign trade, was proposed in this Report for 1894 and 1895, and found practically no support among American shipowners and shipbuilders. It was rejected without one favorable voice in the Senate committee to which shipping legislation is referred.