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is not the most important reason for the ratification of the step already taken. With the direct trade assured to it, American shipping will be able to make Porto Rico the base of operations for obtaining a more extended share in the trade of the islands and coasts of the Caribbean and Gulf of Mexico. The extent of the relative decline of American shipping in the total trade between the United States and the West Indies (excluding Cuba and Porto Rico, already considered), Mexico, and Central and South America on the Caribbean is shown by these summaries of tonnage for 1887 and 1897:

1887 1897

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American. Foreign. American. Foreign. American. Foreign.

508, 941 678,366 448,769
609, 324 1,310,731 545,970

366,562 1,020,825

957, 710 1, 155, 294

1,044, 928

2,331, 556

The same considerations which suggest the importance of developing our shipping in the zone within 500 miles of the coast apply with equal or greater force to an increase of American shipping in this more extended zone.

ADVERSE CONDITIONS.

In over-sea navigation between ports of the United States and foreign ports over 1,500 miles distant from this country American shipping constitutes barely 7 per cent of the tonnage employed. In the trade between these remote foreign ports themselves American shipping does not enter as a factor. Yet in this trade the United States formerly held a rank closely second to Great Britain, and success in this trade is the true measure of a nation's maritime greatness. If it be desired that the United States shall take a place with American-built vessels as a maritime power of consequence at all commensurate with its commercial rank among nations, the attention of Congress must turn to the state of our over-sea navigation. That state is chiefly due to changes during the past thirty-five years in industrial conditions here and elsewhere. Some of these may be modified and improved by legislation, but others are so closely associated with natural development that legislation can not at once affect them.

The number of vessels under the American flag in over-sea navigation is very small in proportion to the number of vessels under foreign flags so employed, for these reasons:

First. The law of the United States restricts the American registry to vessels built in this country. The principal maritime nations do not restrict to domestic construction the use of the national flag.

Second. The cost of construction of seagoing steel steamships has thus far been greater in the United States than in Great Britain or Germany, our most formidable competitors.

Third. The cost of operating an American steamship is greater than the cost of operating a steamship under the British or German flag. Fourth. The policy of government aid to shipping, adopted within defined lines by Great Britain, Germany, and Spain, and on general lines by France, Italy, Japan, and other maritime nations, has not been firmly applied in the United States.

THE FACTOR OF WAGES.

Between 20 and 25 per cent of the cost of operating a steamship in foreign trade is devoted to the wages of officers and crew. The percentage varies of course with the nature of the voyage and the description of vessel. Thus in trade with Asiatic ports the crews of merchant steamships, British and German, as well as American, comprise a relatively large number of Lascars, Chinese, and Japanese. Even the French have found it necessary to relax their rigid law requiring three-fourths of the crew of a French vessel to be French citizens, and in Asiatic waters a considerable portion of the engine-room force and firemen may be Asiatics. The crews of our own steamships plying to China and Japan are almost wholly Chinese and Japanese, shipped before American consuls at foreign ports where the vessels enter and clear. To a considerable extent the crews of our transatlantic steamships are shipped at British and Belgian ports. The number of men employed on fast passenger and mail steamships is larger and the rates of wages paid are higher than on slower steamships wholly or chiefly engaged in carrying freight. The force in the hold in the engine and fire rooms is paid much higher wages than are able seamen above deck. Wages on sailing vessels are lower than on steamships. The annual reports of the Bureau since 1894 have contained full statements of the rates of wages paid at the principal seaports of the United States for the various grades and ratings of seamen on American steam and sail vessels, classed as to size and as to the nature of the voyage. The reports have also contained similar statements concerning wages paid on British vessels at the principal British ports. The latest tables may be found in Appendix C. The accuracy of these tables is a matter of official record. The wages of seamen are part of the shipping articles which come for approval before United States shipping commissioners and British mercantile marine officers, upon whose reports the tables are based. Wages paid on an American steamship which is engaged in the foreign trade to a crew shipped at an American port are indisputably higher than the corresponding wages paid on a British steamship which is engaged in the same trade to a crew shipped at a British port. The determination of the amount of this difference is obviously desirable for an understanding of the conditions under which navigation under the American flag must be conducted. Percentages and generalizations contribute little toward this understanding, and specific facts accordingly are submitted.

The British steamship Virginian, 4,000 gross tons, 2,636 net tons, 12 knots, is a fair type of the general class of cargo steamships which do the bulk of the carrying between the Atlantic and Gulf coast of the United States and Europe. The following statement of the number of the crew is taken from the British Board of Trade Return on Merchant Shipping for 1897 (pp. 52-53), and the British wages paid for 1897 from the same publication (pp. 40-46). The corresponding American wages are from the report of the United States Shipping Commissioner at Philadelphia, of wages on the American steamship Indiana, of 3,335 gross tons, 2,561 net tons, which most nearly of American vessels approached the Virginian, at the time, in trade and size. Both American and British wages are by the month. The masters' wages on both American and British vessels are fixed by agreement with owners, and are not put down in the shipping articles.

The table shows the monthly pay roll of the Virginian, with the same crew, at British (shillings) and American rates of wages:

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The difference between the two monthly pay rolls is $521, to which must be added the difference in pay for stewards, cook, cabin boy, and others, whose wages are not stated in official reports available. In round numbers, the American pay roll is $550 a month larger than the British, or $6,600 for the year. The difference in the pay of the master may be counted as enough to bring the entire annual difference in wages up to $7,000. During a year the vessel under consideration averages seven round voyages across the Atlantic, each of between 6,000 and 6,400 miles, so that the difference in wages for a round trans-Atlantic voyage of, say, 6,400 miles, by a steamship of 4,000 gross tons would be $1,000. That sum is equivalent to a difference in wages of 25 cents per gross ton for the round voyage of 6,400 miles, or about 4 cents per gross ton for each 1,000 miles. (The time when the vessel is in port and the crew partly laid off is not considered. It would reduce the difference.) The crew of the steamship considered comprises only 48 men, of whom only 20 are in the engine room and fire rooms, where the difference in wages is greatest. In the case of the great mail steamships, with crews nine times larger and an engine and fire room force more than ten times greater, the difference in the pay rolls and the rate of difference per ton per 1,000 miles would obviously be many times greater.

The example selected is designed to illustrate from figures of official record the factor of difference in American and British rates of wages for the average steamship adapted to the regular trans-Atlantic freight business between British and continental ports and our ports on the Atlantic and Gulf coast. During 1897 there were 4,189 steamship entries in the United States from European countries, of 10,130,519 net tons, making the average net tonnage about 2,500 tons and the average gross tonnage between 3,500 and 4,000 tons, deperding on the speed of the vessel. Our greatest weakness as a maritime nation is in the enormous trans-Atlantic trade typified by the Virginian. During 1897 only fourteen trans-Atlantic voyages of this description were made by American steamships-five by the Matteawan, three by the Miami, three by the Conemaugh, and one each by the Illinois, Pennsylvania, and Indiana. Of these six steamships three are in the Pacific at

present, two temporarily employed as army transports, though intended for Alaskan trade; one has been bought by the Navy, and two are in the coasting trade to Gulf ports.

Of the 4,096 voyages made by foreign steamships between Europe and the United States, 2,942 were made by British steamships. A complete comparison of wages on American and British vessels would cover for practical purposes three-fourths of the trans-Atlantic trade. Wages on German, French, Norwegian, and Italian steamships, which make up the bulk of the remaining one-fourth, are lower than British wages. Incomplete returns concerning wages on vessels of these nationalities were published in the Bureau's report for 1894 (pp. XXIX, 36, 118).

The difference of $1,000 per round trip in wages in the over sea Atlantic steam freight trade, or $7,000 per annum on a 4,000-ton vessel of 12 knots or less, is in itself sufficient to prevent competition with profit, unless counterbalanced by some compensating advantage. The Bureau is aware of no such advantage except the privilege of engaging from time to time in the coasting trade of the United States. Thus five of the American steamships just named are now engaged in or intended for the coasting trade, where they can be advantageously employed. This difference of $1,000 can be, and in fact is, to an extent overcome by shipping parts of crews in foreign ports for the round trip, but this plan can not be entirely satisfactory to any concerned, and should not be accepted as a permanent and important element in our navigation system, though it must be accepted as a present necessity.

MISCELLANEOUS FACTORS.

The greatest item in steam navigation expenses is the cost of coal. In this respect we are already on an equality with Great Britain and Germany, and have a decided advantage over France and Italy, the last-named country being compelled to pay bounties for the importation of coal. The strike of the Welsh colliers during the year not only gave an impetus to our coal export trade, but also brought to the world's notice our ability to supply ourselves with fuel for steamships on the most favorable terms. Not only do the principal foreign steamship lines use our coal for return voyages, but during the year coal was exported for the outward voyages of British lines to the United States and Africa and for the Admiralty in the West Indies.

The matter of provisions offers no difficulties, for this country is the greatest exporter of food products, and on the sea and on land can be the best fed and the most cheaply fed.

Our State laws taxing shipping as property impose burdens which the shipping of few other maritime countries is compelled to bear; but, first, the matter is not to be remedied by Federal legislation; and second, the weight of this burden has been lifted by some States, notably New York, which exempts American shipping in foreign trade from taxation as property. The report of the North German Lloyd Company for 1897 shows that on a capital of 40,000,000 marks and on steamships valued at 79,000,000 marks the company was required to pay only 26,238 marks as taxes by the laws of Bremen. It is no longer true, as it was a few years ago, that American capital is so much more profitably invested in other directions that maritime ventures fail to attract it. The decline in rates of interest in this country of late years has rendered desirable investments which capi

talists would not have considered fifteen or twenty years ago. Much American capital is invested to-day in steamships under foreign flags. These investments are indications of a reviving interest in marine property.

In the item of administrative expenses, in which it is meant to include the cost of management, advertising, and establishment of trade, we are evidently at the great disadvantage under which the newcomer entering a field already well occupied by older concerns usually finds himself. Shares in many British steamship companies are listed on the exchanges and are usual forms of investment. Banks and loan and trust companies are familiar with the operations of such companies, and capital can be obtained for such ventures not only at lower rates but more readily and from a larger number of investors than in this country. British agencies are established at all principal seaports of the world. In many instances British lines have colonial mail contracts and contracts with the lesser nations for carrying the mails, which insure advantages against competitors. It is quite impracticable to reduce to a statistical form these advantages which British shipping now enjoys and which American competition must meet; but they must be considered in any legislative project for the promotion of our shipping.

COST OF CONSTRUCTION.

The most significant and auspicious occurrence of years in its bearings upon the future of American navigation is the fact that early this autumn one of the most widely known of British shipbuilders imported from the United States the steel plates for the construction of the largest merchant steamship now on the ways in Great Britain. The industrial importance of this event is not obscured by the fact that British yards are unusually busy at this time and the demand for plates is active. It is evidence that in the production of steel plates for ships we are now able to export to the principal shipbuilding nation. Less than five years ago we imported from Great Britain the plates for the hull of the first large steel square-rigged ship built in this country. So rapid a rate of progress for the next four years it would probably be oversanguine to predict. That there will be rapid progress, however, may be safely asserted from a casual glance at the growth of our coal and steel industries, and especially at the many uses for which structural steel is now demanded in this country. The statement is already made that steel steamships can be built in the United States as cheaply now as anywhere in the world. The construction of steel steamships of from 2,000 to 5,000 gross tons, solely for cargo purposes, for the over-sea trade, is an undeveloped industry with us, yet such vessels constitute the major portion of the world's ocean carriers at the present time. The first American "tramp" of the description mentioned-the Winifred, built in Bath, Me.-entered trade during the current fiscal year. Because the construction of steel steamships for the over-sea trade is a new in lustry, it follows that such vessels are not built as cheaply here as elsewhere. Besides the fundamental elements of the cost of steel plates and structural steel, and of the labor to put them together, the factors of time required for construction and expenses of maintenance and superintendence of shipyards must be reckoned in estimating the relative cost of vessels here and abroad. These factors depend almost wholly upon the volume of business done. Given plants as numerous and

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