rTo TEE EOTT011 OF THE "SPECTATOR."] SIR,—The evidence given before
the Merchant Marine Com- mission now sitting in the United States under an Act of Congress approved in April of this year will afford instruc- tion to those of your readers who care to learn how a shipping trade can be killed by tariffs. Shipbuilders have in a very real sense enjoyed more protection than any other industry in America. The home market is set aside for American shipbuilders. No foreign ships are permitted to be sold in it. They have a monopoly of one of the longest coastlines in the world, and exclusive possession of the Great Lakes, with their enormous development of inland water transport. They have, in addition, the right to a full rebate of all duties on material directly imported for shipbuilding purposes, subject only to one apparently fatal reservation,—viz., that any vessel built of such materials is debarred from the coastwise trade. Yet, in spite of all this, shipbuilding in America is a vanish- ing industry. In the words of Mr. Sewall, of Bath, Me., whose yard was established in 1823, "the limit has been reached. Every shipyard in the country has a similar tale to tell. Some ruined and in receivers' hands, others closed, and the remainder running at a loss." Instead of American vessels carrying 92.5 per cent. of American trade as in 1826, they now carry no more than 9 per cent.
Various reasons are adduced in explanation of a state of affairs to which it is difficult to find a parallel. One witness is of opinion that the main cause is the failure of the American shipbuilder to "standardise." The type of vessel required for coastwise or inland traffic is one thing, and that for ocean long-distance voyages is another. But, even so, there still remains the question why in the latter the American shipbuilder cannot even make anything like a successful start. To this conundrum only one answer is forthcoming from the overwhelming majority of wit- nesses,—" the American Tariff." Nearly all who give evidence are strong theoretical supporters of this same tariff. Some few are bold enough to advocate unconditionally its total aboli- tion iu the interests of shipping. But these stalwarts are few and far between. The vast majority, being Protectionists, naturally favour a further extension of Protectionist principles. But both those who say Protection must go further and those who say it has gone too far are alike agreed in attributing to the tariff the decay of American shipping. The case is sum- marised by the Maritime Association of New York in a written statement to the effect "that most of these higher expenses [in cost of construction of steamers, operating, &c.] are the outgrowth of conditions resulting from the policy of high protection that has obtained in the U.S. during practically the same period that American Shipping engaged in the foreign trade has been declining." The reverse side of the same shield is pithily ex- pressed by another advocate for Protection :—" The American citizen can and must be made to understand that the American Tariff which protects American labor and American products within the boundaries of American territory, cannot protect the American-built ship when she passes out into the blue water beyond the confines of the Tariff Barrier." Why this American ship, built behind a tariff wall, cannot successfully encounter her foreign competitor is made abundantly clear by an extraordinary chain of evidence, given by unimpeach- able authorities. The difference in cost of ship construction in America over that in England is a minimum of 15 per cent. and a maximum of 80 per cent. This is the evidence of the late Chief Constructor to the American Navy. The general average of excess cost is 30 per cent. to 40 per cent. The equivalent differ- ence in cost of running the vessel is put at 40 per cent. The difference in the cost of American steel charged to buyers in America, as against English-made steel, or the same steel sup- plied in England, is given as from 40 to 60 per cent. Steel ship-plates in Scotland cost .25 15s. per ton, or P24 cents per pound, as against 178 cents in the United States. Mr. Edwin Cramp states the difference as 60 per cent., or an initial handicap against the American shipbuilder of $15 per ton. Carnegie steel plates are specifically named by Mr. Atkins, of Boston, as being obtain- able in Liverpool at $12 per ton under the lowest price quoted in America.
"Absolute Free-trade," as one remedy for all this sort of thing, is naïvely indicated by Admiral Bowles, late Chief Constructor aforesaid,—" the American shipbuilder would then be on a level with every other industry in the United States, and he would soon get there." Under pressure from the Chairman, the Admiral was made to confess that this ideal was impossible, nay, more, was "a horrid thought" from the point of view of American labour. But the fact that so responsible an authority allowed this "horrid thought" to ooze out even in this unguarded fashion is damning proof, if proof were needed, that the tariff, and the tariff alone, is responsible for the disabilities which afflict the American shipbuilder.
How essential the maintenance of this tariff is necessarily held to be in America may be judged from the forecast given by Mr. Clyde, a large shipowner of New York, as to the probable effects of even such a partial modification of Protection as the admission of foreign vessels into the American coastwise trade. He antici- pates that under such conditions the cost of carriage would be reduced from 30 to 40 per cent., and most of the railroads that parallel the coast driven into bankruptcy. This statement vividly illustrates the artificial condition of industry on the seaboard of America, and should enable politicians here to gauge pretty accu- rately the chances of bringing about any substantial modification of American Protection by mere threats of retaliatory action on the part of England. On the whole, it is not surprising that the trend of opinion as voiced before the Commission is in favour of digging subsidies out of the United States Treasury chest equal to the cost which is imposed upon the American shipbuilder by the tariff wall. This promises to be a labour worthy indeed of Hercules.
The Free-Ship policy (i.e., liberty to buy vessels from a foreign builder and run them under the American flag) meets with the solid opposition of the shipbuilding fraternity, and conflicts with the natural desire to possess American-built vessels. Discrimi- nating duties on all produce imported in American bottoms finds strong support. Yet apart from the diplomatic difficulties arising from treaties which forbid such discrimination, there are other difficulties curiously parallel to those which confront the modern advocates of Colonial Preference in this country. Many articles now on the free-list would have to be placed on the American Tariff, and to this the importers of raw materials are inflexibly opposed. Another difficulty is that of equitably adjusting discrimination in accordance with the varying lengths of an ocean voyage. Whatever the result of this Commission, the testimony it has spontaneously evoked to British superiority in shipbuilding is noteworthy. That Great Britain's ability in ship construction has never yet been seriously assailed ; that her processes of steel manufacture for shipbuilding purposes are at least equal, if not superior, to American ; that the American mechanic can in ship construction teach the English mechanic nothing ; that in labour-saving devices English shipbuilders have nothing to learn from America, —all this and much more is frankly admitted by some of the acutest men of business in New York, Philadelphia, and Boston.
Even for those persons who regard our shipping trade as Imperially and nationally a secondary consideration, an ex- haustive study of this evidence will be beneficial, while Free- traders will find in such a study many additional reasons for the faith that is in them.
—I am, Sir, &c., AUSTIN TAYLOR.
LMr. Austin Taylor's letter is most valuable, and we trust that he will take an early opportunity of analysing and giving further quotations from the American evidence "in another place," and where he will not be so much restricted by con- siderations of space. We greatly desire that the British public should be made to see that their commercial command of the sea is irrevocably bound up with Free-trade. If we adopt Protection, our predominance in merchant shipping cannot survive. But if our commercial supremacy at sea goes, it is certain that it will be followed by our command of the sea in the military sense. No nation has ever possessed sea-power without a great mercantile marine. Turn the question round as we will, the abandonment of Free-trade must mean the ruin of the Empire, for on Free-trade that Empire is founded.—ED. Spectator.] MR. BALF017R'S POSITION.
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