If a foreign trade marine can in any way aid commerce, that aid will certainly be given most effectively in our trade with our sister republics of this continent and the great neutral markets of Asia. It is just these powers which have no merchant fleets, and whose carrying is done by other carriers engaged in this indirect trade. American trade with the Chinese Empire last year exceeded eighty-one millions. Great Britain alone has now in our indirect carrying trade fifty steamship lines, employing about four hundred vessels of more than one million tons, and earning annually sixty million dollars in freights. If the United States could get a considerable share of the carrying now done by carriers other than those of the country from which the goods come, there would be an immense increase in the American foreign trade marine.

A discriminating duty of a sufficient amount would give the American carrier the preference for the home cargo, so essential to the carrier of a nation keeping its imports relatively small by high tariff duties. Assured of a home cargo, the American carrier need not be given higher freights than those now paid. Ships would to some extent be transferred to evade such a law, but a strict penalty rigidly enforced might effectively

prevent such transfers, except when made in good faith. Under the free ship policy proposed, there would probably be a considerable amount of this foreign tonnage in the indirect trade transferred to American

owners.

The great objection to this plan lies in the fact that so large a proportion of the imports from these nations having no carriers of their own is on the free list. In the American trade with China fifty per cent of our imports are not dutiable. A still greater proportion of the imports from the South American republics is on the free list, approximately eighty-two per cent being free of duty. To apply effectively the discriminating duty policy to the indirect trade would require that the free list be abolished so far as goods carried by foreign carriers in the indirect trade are concerned. While naturally such a step is very undesirable, it need not necessarily be attended by any evil consequences, if not applied too suddenly. If discriminating duties in the indirect trade were simply applied to goods now dutiable, later, when American carriers were sufficient to do the work, the policy might be extended to goods not at present paying duty, thus gradually giving to American carriers this valuable share of the carrying trade now in the control of na

tions having a tonnage far beyond the needs of their own commerce. It is not possible for a large foreign trade marine to suddenly spring into existence. One must come gradually. A gradual application of discriminating duties to indirect carriers would force them out of that trade, and at the same time would allow opportunity for the ownership so to adjust itself that but very little of this commerce need be sent in a vessel to which the duty would apply.

Such a policy would inevitably force foreign carriers out of this indirect trade, and might become a permanent policy without arousing popular hostility. Some of these nations would in time come to have carriers of their own, but the probabilities are that the increase of trade with them will be such for many years as to provide for a great amount of American tonnage. This plan will not give American ships a monopoly in the carrying of all of her imports and exports, and none is needed. If there is an efficient foreign trade marine carrying a reasonable share of this commerce, nothing more is essential either for the commercial or political welfare of the country. In case of a great foreign war, it is probable that the demand for shipping would be lessened, so that our foreign trade marine would then be suffi

cient to prevent the extraordinary loss which might occur, if the country were entirely dependent.

E. MEASURES PROPOSED SATISFACTORY

The measures proposed should be satisfactory from the point of view of all parties interested, even considering the present protective policy of the United States.

1. Liberal to Shipbuilder

a. Gives him monopoly in coastwise trade. The shipbuilder would be given all the aid to which he can reasonably lay claim. He would still be given a monopoly in the construction of all the vessels needed in the American Great Lake and coastwise marine. Since this tonnage had reached 5,441,688 tons in June, 1905, it would appear that this monopoly alone to the American builder is rather a liberal protection.

b. Gives him monopoly in vessels receiving subventions. An American builder would have, in addition, a monopoly in the building of the fast vessels to be operated as mail ships subject to duty in the navy, under the policy of the Postal-Aid Law of 1891.

c. Enables him to buy cheaper materials. The builder would further be aided by being permitted to import shipbuilding materials

free of duty without the present restrictions on such importation. He would no longer be forced to pay a tribute to the gigantic steel interests which is not exacted from his foreign competitor. This would at once enable him to build ships much more cheaply for the coastwise trade, and would be a long step toward the place where he could compete successfully with the foreign

builder.

d. Would give him large repairs. The item of repairs is always a large one to the shipowner. Every ship which sees much service at times has large repairs put upon it. In the course of a score of years the repairs on a vessel may amount to as much as the original building of the vessel; especially is this true with certain types of vessels. The natural and usual course is for the shipowner to lay up his vessels for repairs at home. Therefore, even if foreign trade vessels were built abroad, the item of repairs for a large merchant fleet would be of great value to American builders who are now neither repairing nor building. If repairs could be obtained much more cheaply abroad, ships would of course largely be repaired there, just as they are now foreign built. But it is reasonably certain that a fair share of the repairing on a fleet owned by Americans