trade. The so-called "American Line," between New York and Southampton, is a member of this conference, and is the only instance, until of late, of an American participation in shipping ring work and benefits. The benefits to shippers for patronage are exclusive.

Our Consul-General at Rio de Janeiro, Brazil, has reported to our Government, that there are in the trade of Brazil certain shipowning houses - British, French, and German-whose affairs are organized and regulated on the "ring" principle. Their vessels carry from home ports to Brazilian, thence to ports of the United States, and thence to their own in Europe. They have a fine trade- cargoes three ways. The French ships are under bounty in addition. All have a protection to constant and regular employment. This ring or "combine" contracts with shippers to the United States to pay them rebates of 5 per cent., half yearly, on all freightage paid, provided said shippers have employed no vessels but those of the ring aforesaid. It is quite likely this "protection" applies to the business hence to Europe, and thence to Brazil. It is common for American goods to go to Brazil via Europe, also for American vessels going to Brazil to find little of cargo to bring home. There is, indeed, nothing to be had from recipients of rebates, and there must be an order for a cargo from the United States, or else one must be bought, if an American vessel is to come home fully freighted, and not in ballast.

Another illustration of "ring" rule: For some years past certain British shipowning concerns, with agencies in New York, have had a "combine" in the carrying trade to Australia. The pioneer, a few years ago, was knighted by the Queen for his control of this trade. The concerns now forming the " combine" require all shippers to contract to send all goods by their lines; for this they grant a rebate of 10 per cent., payable half yearly. The shipper may be a manufacturer or a broker. In the first case, the "combine" is loaned 10 per cent. of the freightage free of interest; in the second case, the rebate is peccant money. No wonder freights are higher hence to Australia than from Europe. Our manufacturers say: "This comWould a "subsidy" measure do

bine should be broken up."

it? and if so, how? By paying a rebate of 15 per cent.,-half yearly?

British Shipping Federation. It was recently said in Parliament that the "Shipping Federation," the greatest "combine" for ship protection in the world, "embraces four fifths of the total shipping of the United Kingdom." The object of this organization is the command of employment and the maintenance of paying rates of freight. The influence and political power is immense. Manufacturers in England complain that this "combine" charges upon cotton goods from Liverpool to Buenos Ayres 40 shillings per ton of 40 cubic feet, while the same goods could be shipped from Genoa for 17s. 10d., the British rate being nearly 125 per cent. higher than the Italian rate. The freight from Genoa was 1.35 per cent. of the value of the goods, while the Liverpool rate was 4.15 per

It is also complained that British owners give foreigners lower rates, and then recoup themselves in the home tradethat British steamers carry cotton goods from New York to Shanghai for $6.87 per ton (40 c. ft.), while the charge from Liverpool was from $12.50 to $16.25 per ton, according to the density of the bales. There is a policy in this to make freights so low from New York that American steamers cannot enter the trade unless heavily aided by the U. S. Treasury. So it is, where the commercial interest of one nation has the power, and is not opposed in appropriating the traffic of another nation.

Morganizing North Atlantic Traffic. Of late, the world has been surprised that an American banker, John P. Morgan, could effect a shipping combination that eclipses any of the past. Last year he purchased the "Leyland line" of steamers; this year he got control of other foreign lines, and with the "American" has formed such a merger or "trust" as never before reposed in the hand of one man. Transportation has so long been ruled from the United Kingdom that a change of control to the United States produces apprehension in Europe. One is asking another, what is the meaning of this intrusion of American capital? Does it portend evil to British domination of the ocean? Does it signify that American shipping power is to be

revived and developed under a "free-ship" policy? Is there not, after all, to be any need of governmental action in behalf of American shipping? These questions may be answered in the negative. British loss and American gain will not be extensive. British ownership will not be much disturbed; American ownership will not be greatly enlarged. Only North Atlantic navigation will be affected.

What has taken place is this: the ocean branch of the intercontinental trade used to control through rates of freight; American railroads, having no ships of their own, felt obliged to concede the demands of the steamer lines. Sometimes they carried below cost. The Morganizing of the main lines of land transit, making the railroad interest strong, led on, naturally, to the acquisition of ships for the ocean transit, and, consequently, the power to control the rates of freight and make a fair division between services ashore and at sea. Under the organized railway rule now existing in the United States, and doubtless to be perfected in all directions, it is probable that ocean carriage is hereafter to be the inferior factor in our traffic. Whether the shipping destined to carry it on shall be foreign or American will depend entirely upon the wisdom or folly of our Government. It is in its power to cause our flag to be so appreciated that no citizen can have an object to buy ships abroad, or to run them under foreign registers. For fifty years Great Britain has made it advantageous for shipowners, the world over, to build, and to run their vessels under her crossed flag. We, on the contrary, have held out no inducements, but have permitted rivals and adversaries to run our shipping off the ocean. We continue Conventions operating to this effect. Before any of them were made foreigners came to our country and became citizens, that they might build and run vessels under "the stars and stripes."

The many protections to ship employment under the British flag, and the lack of all protection under ours (for foreign trade), naturally causes our business men to appreciate the British flag when they enter a shipping career. Not the least of the protections of a British ship is the reciprocity convention of 1815, and the dullness manifested in our continuance of such a policy.

CHAPTER XXI.

THE OCEAN POST AND SHIP SUBSIDIES, BOUNTIES, AND GRA

TUITIES.

Ocean Mail Service. In considering the general subject of subsidies, we should recognize three distinct classes of vessels that have been made the objects of State assistance in Europe. These classes are known as mail and passenger steamers under subsidy contracts; passenger and freight steamers under naval subvention contracts; and cargo carriers, of sail or steam, under bounty laws. Up to the present time no nation aids its shipping in more than two of these ways. Only Great Britain pays naval subvention besides mail subsidy. Nearly all the other Governments pay mail subsidies, and several pay bounties. A few substitute certain gratuities for regular bounties. For instance, Russia and Austria-Hungary pay the Suez Canal dues for their vessels using it.

That subsidies and bounties are protective in their nature, there can be no doubt. They are so intended, and it depends on circumstances to what extent protection may be realized. The theory of their action is, not to foster employment, but to supplement freightage, and to pay for service offered or performed.

It is a strange inconsistency of our Government, to continue to make and to maintain reciprocity conventions with nations resorting to protection by Treasury aid. The theory of reciprocity is non-protection. We observe our agreement for nonprotection by duties, but allow all nations to violate their agreements, and to protect as they please, so they do it with money. But we do not, and cannot follow this course, and have no reason to keep the agreements that others break in spirit, if not in word.

England, as the "mother of subsidy," has made long and constant use of it. This is not to say, however, that subsidy is the principal ship protection of Great Britain. It has been said that the British found subsidy "an amazing stimulant for navigation and commerce." But it was the steamship and THE OCEAN POST that should have this credit. Of these quickening forces the British had a monopoly for several years in some. trades they hold it still. Their general navigation has never been aided directly by public money. We have already explained the various protections applied in support of the British general marine. England is rich, but she could not afford financial aid — amounting to hundreds of millions annually—even if there were need for it.

The British Ocean Post. The story of Britain's experience with subsidy - what she used it for and the results has often been perverted. Indeed, the more reckless advocates of its general use in our country have not scrupled to assert that the magnitude and dominance of the British marine is due entirely to national gifts of money. Steam propulsion to sea-going vessels having been applied successfully in England by 1837, the immediate object of subsidy was the establishment of an OCEAN POST by steamship lines. Having a larger commerce and greater need for these than any other nation, the British were first to act, and to launch out their gold. They were leading the world in manufactures, as well as commerce and navigation. Markets everywhere were necessary to progress. To maintain ascendency, they must lead in all expedients for increasing their business. England had become a first-class power (1) through the operation of her "navigation laws" and the work of her marine; (2) owing to successful wars and the prowess of her navy; (3) by means of her tariff system and the development of her manufacturing power; (4) through the extension of her colonial system, and control of markets. She could cut no figure in the world, and remain in her insular home. Her laws built up industries in special lines, made the United Kingdom the "work-shop of the world," and offered all men wishing to buy or sell the greatest market on the globe. That her marine flourished and grew to immense proportions with 43 colonies of her own

was