REPORT

OF THE

COMMISSIONER OF NAVIGATION.

TREASURY DEPARTMENT,

BUREAU OF NAVIGATION,

Washington, D. C., November 12, 1898.

SIR: I have the honor to submit to you my annual report, comprising statistics and recommendations, as prescribed by statute.

During the past few years Congress has changed the laws relating to navigation in many and important particulars. The changes, almost without exception, have fully met the expectation of benefit to shipping which prompted their enactment. Laws outgrown have been repealed, greater security to life and property on the sea has been assured, taxes on shipping have been reduced, the interests of seamen have been more carefully protected, and opportunities for shipbuilders have been extended. Measures for the further improvement of the laws now occupy a position in Congress which promises early action, and various propositions are submitted which, it is believed, will prove advantageous.

The lack of vitality in our navigation system, however, was never more manifest than at present. It is no cant phrase to assert that the time is here when definite measures to restore American shipping must be enacted. The stress of events, which even the prescient could not a year ago have foreseen, has put us in possession of territory in the Atlantic and Pacific remote from the coasts of the continent. With possession has come a new range of responsibilities to ourselves and to mankind wider than we have hitherto known. The nations of the world expect of the United States that it shall become a maritime commercial power.

Such investigation of the conditions of competition for the carrying trade of the sea as was practicable has been undertaken in the following pages. A general project is outlined which is based in its leading features upon the current policies of the principal maritime nations. This guarantees the practicability of the project, if undertaken. involves no radical departure from economic doctrines long and extensively applied in this country. This assures the feasibility of its acceptance by Congress. In brief, it is proposed to expend yearly a considerable sum to promote national navigation and ship building. Shipbuilding and navigation are differentiated from other industries of peace by their necessity to government. In the event of war neutral nations can not furnish a belligerent with ships for defense or offense. Such ships can not be built on demand, nor can crews to man them be secured at will. Nations and individuals that dissent from the general theory of government aid to private enterprise concede on political grounds an exception in favor of shipbuilding and navigation. Attention is first invited, however, to the following sum

9

mary of the statistics at the end of the volume which are required by law:

STATISTICS FOR THE YEAR.

On June 30, 1898, the merchant marine of the United States, including all kinds of documented shipping, comprised 22,705 vessels, of 4,749,738 gross tons. On June 30, 1897, it comprised 22,633 vessels, of 4,769,020 gross tons. The following table shows the geographical distribution, motive power, and material of construction, and trade of vessels of the United States for the fiscal year 1898, compared with the fiscal year 1897, and also the construction for the two years:

These figures show superficially an increase of 72 vessels and a decrease of 19,282 tons for the fiscal year compared with the previous year. Without explanation, they are misleading. Following the practice of Great Britain, France, and principal classification societies, the Bureau last year directed that fractions of tonnage should be discarded in tonnage accounts, and that in the case of new vessels hundredths of a ton (each equal to only one cubic foot) need not be marked on the main beam of vessels. Applied to nearly 23,000 vessels, the omission of the fractions amounts in the aggregate to between 10,000 and 11,000 tons, or over half the apparent decrease in tonnage. The Government purchased for the use of the Army and the Navy American merchant vessels aggregating 62,000 tons, all or nearly all of which have merely changed owners and are still under the flag of the United States, though for the time being not in the merchant service. (Appendix K.) Before June 30, 1898, there were 84 vessels, of 35,411 tons, sold to foreigners, chiefly on account of the war with Spain. (Appendix K.) These sales were made, in nearly every instance, not through the timidity of owners, masters, or crews, but because during the period while mines and torpedoes were being laid in our harbors and bays marine-insurance companies imposed virtually prohibitory premiums on American vessels and their cargoes. On the other hand, the necessities of the war led Congress to pass special acts admitting to American registry an unusual number of foreign vessels. (Appendix K) Of these, 7 steamships, of 20,000 tons, were documented and are included in the tables above. If the balance be struck between these items and if the sale of merchant vessels to the Army and Navy be regarded as temporary, our merchant fleet on June 30 may be considered as showing an actual increase of about 37,000 tons instead of an apparent decrease of nearly 20,000 tons. The returns of the British Board of Trade for 1897, made last June, and covering much of the period included in our fiscal year, show a decrease of 67,000 tons in the merchant shipping of the United Kingdom and of 55,000 tons in the shipping of British North America. War with Spain was declared on the 25th day of April, 1898, and, so far as its menace to American shipping was concerned, ended with the destruction of the fleet of Cervera on the 3d of July. During the last fiscal year we thus passed through two months of a maritime war, not only without a decrease in our merchant marine, but with what, if all factors be regarded, may be considered a slight but appreciable increase.

The increase in steam tonnage is both real and apparent. In the last annual report of the Bureau the statement was ventured that on June 30, 1898, "steam tonnage, for the first time in our history, will exceed the combined tonnage of sailing vessels, barges, and canal boats." The actual figures are: Steam vessels, 2,371,923 tons; all others, 2,377,815 tons. The removal of 62,000 tons of steam vessels from the merchant list by purchase for the Government could not have been foreseen.

In round numbers, the tonnage of the Atlantic and Gulf coasts shows a net decrease of 90,000 tons, toward which New England contributed 43,000, New York 32,000, and Pennsylvania 19,000 tons, much of which is attributable to Government purchases. The region of the Great Lakes shows an increase of 27,000 tons, while the Pacific coast shows an increase of 58,000 tons. The recent transfer of a considerable portion of lake tonnage to the Atlantic coast to carry coal along the seaboard since the close of the fiscal year points to a growth of construction on the lakes at the expense of the construction of

sailing vessels in New England. The increase in tonnage on the Pacific coast, 55,000 tons of which stands to the credit of the State of Washington, is due to the discovery of gold along the Yukon and the impetus it gave to trade with Alaska. The eight principal shipowning States retain the same relative rank as last year-New York, Michigan, Ohio, Massachusetts, Maine, Pennsylvania, California, and Maryland.

The shipping registered for the foreign trade, including the few whaling vessels now in existence, comprised 1,136 vessels, of 737,709 tons-a 'decrease of 94 vessels and 68,000 tons during the twelvemonth. The decrease in sailing vessels was 159, of 103,000 tons, made good however by additions of steam vessels of greater efficiency as carriers. The bare figures of registered tonnage are less than they have been since 1832; but, if the increased carrying power of steam vessels be regarded, our merchant fleet is about equal to our fleet in 1865. Its operations, however, have been greatly restricted since that time, for while our square-rigged sailing vessels entered every port, our registered steam tonnage is chiefly employed in trade with the West Indies, Mexico, Central America, and British North America on the seaboard. For some weeks during the war with Spain passengers and mail did not cross the Atlantic under the American flag.

The construction of vessels, documented during the fiscal year, was 51,775 tons less than during the previous year. The relative decrease in shipbuilding occurred in the last six months of the calendar year 1897. During that year, according to Lloyd's report, the tonnage built in the United Kingdom was 207,000 tons less than during the previous year, and the output of maritime nations, as a rule, was less. Apparently the United States shared in a general reduction in the output of vessels. The war with Spain was without effect on the industry, as during the closing quarter of the fiscal year-the period while war was imminent and in progress shipbuilding showed a considerable increase over the corresponding months of 1897. Incomplete returns for the first quarter of the current fiscal year fully warrant the assertion that the tonnage built during the year to end June 30, 1899, will exceed the construction for any year since 1874, with the probable exception of the year 1891. Foreign returns show that the current year is one of exceptional activity also in shipyards of the United Kingdom and Germany.

Only one square-rigged vessel, a barkentine of 670 tons, was built and documented during the past fiscal year, and only seven ocean steamers, of 16,382 tons. While shipbuilding the world round was somewhat stagnant, the tonnage built and documented in the State of Washington increased tenfold, from 2,800 tons for 1897 to 28,000 tons for 1898.

ADDITIONS TO THE MERCHANT FLEET.

The additions to the merchant fleet of the United States during the current fiscal year will exceed the increase during any year in our recent history. The year of our greatest construction was 1855, when 2,027 vessels, of 583,450 tons, were built. Since the civil war our greatest annual output was during 1874, when 2,147 vessels, of 432,725 tons, were built. The largest annual increase of late years was the addition of 1,411 vessels, of 392,658 tons, in 1891. The additions from all sources to our merchant marine for the year ending June 30, it may be predicted, will amount to nearly 400,000 tons. The outlook for

domestic shipbuilding, as indicated, is favorable, and the output of our yards should exceed 250,000 tons. Of the 62,000 tons of domestic merchant shipping purchased by the Government to meet the temporary exigencies of war, a considerable proportion will doubtless soon return to commercial pursuits. Of the foreign shipping directed by Congress in June to be documented, about 20,000 tons were not reported before the close of the fiscal year, and will accordingly be included in this year's figures. Vessels condemned as prize during the recent war, and entitled for that reason to American registers, aggregate nearly 20,000 tons, of which nearly all have been or will be documented during the current year. Congress, it is assumed, will provide at an early day a method for awarding American documents to vessels which before annexation were under the Hawaiian flag. The measures adopted after the Louisiana and Alaska purchases are reproduced in Appendix K. The Hawaiian registered list on August 23, 1898, consisted of 62 vessels, of 31,543 tons. Upon the establishment of permanent American control over the Philippines and Porto Rico measures will be necessary to bestow the American flag on the vessels belonging to those islands. The Philippine merchant fleet consists of 93 vessels, of 19,966 tons, but Porto Rico is practically without home shipping. Appendix K contains the lists of vessels under the five heads referred to, which will in the main be transferred to the American list by the end of the fiscal year. The addition to our fleet from foreign sources mentioned, with some noteworthy exceptions, almost wholly on the Pacific, will be small vessels, adapted to coasting or interinsular communication. The registration of the complete fleet of the Northern Pacific Company and the balance of the fleet of the Pacific Mail steamship company by special acts of Congress, and the transfer to the Pacific coast of four American steamships hitherto engaged in trans-Atlantic trade, indicate preparation on the part of the United States to take the lead in trans-Pacific navigation.

MEASURE OF OUR SHARE OF NAVIGATION.

It is a customary and convenient method of reviewing the condition of our merchant marine to compare the percentages of the value of merchandise imported and exported in American vessels with the value of merchandise imported and exported in foreign vessels for a period of years. This method is not without usefulness, but it lacks several important elements which must be considered in any study of the general problem of maritime interests. It leaves out of consideration altogether, for example, the arrivals or departures of vessels in ballast, although over 25 per cent of the foreign steamships which entered the United States from Europe during 1897 came without cargoes of any description. These vessels in ballast are a most formidable element in competition with American vessels. The value of merchandise transported is obviously an unsatisfactory measure of shipping actually required for its transportation.

Quantities, if they were ascertained, would be a more satisfactory measure, but such statistics are unnecessary. Even quantities of merchandise would be open to objection as a measure of transportation that did not indicate the distance transported. The most satisfactory standard by which to estimate the share of our merchant marine in the ocean carrying trade of the United States is the combined tonnage of vessels entered and cleared in foreign trade. (By tonnage is meant in this instance the cubical contents of a vessel