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and operated under the American flag would be done at home.

e. Encourages shipowning habit. The American builder would be benefited by anything which encouraged the shipowning habit, as would the means suggested. When capital has once turned to shipping, there is always a tendency to increase efficiency by the purchase of more ships. The vesselowner craves more ships just as the farmer does more acres. Germany found that the increase of shipowning and the shipowning habit created such a demand for ships that, although many ships were built in England because of cheaper cost of construction, many orders also found their way into the yards at home. Thus any large increase in the foreign trade marine would eventually stimulate shipbuilding interests at home.

Although practically every shipbuilder assures us that any modification of the American registry law looking toward free ships would be absolutely fatal to him, a disinterested party might more reasonably criticise the policy here suggested as being still too favorable to certain special interests.

2. Fair to Sailors a. Gives Americans employment as officers. The United States needs able sailors as a

reserve to fall back upon in time of war. There is nothing in the plan suggested which could operate in any way other than to increase the number of American citizens engaged on board sea-going vessels. It is not proposed to repeal the American law requiring all officers of American ships to be American citizens. With this law in operation every large vessel coming under the American flag increases the demand for American officers, and so creates a large body of especially efficient American navigators.

b. Gives Americans employment on vessels under contract. The Postal-Aid Law of 1891 requires that a certain proportion of American citizens be employed on vessels receiving its benefits, so that a number of Americans would thus find employment on the fast, high-class vessels under government contract. Many of these sailors would probably stand by their ships when called for naval duty.

As the American merchant marine increased, the demand for American sailors would do likewise, for an American owned and operated vessel with American officers, as before suggested, is far more apt to have Americans in her crew than is a foreign ship.

3. Would Materially Aid American Ship

Owner

a. By enabling him to buy cheaply. The shipowner would also receive immediate and considerable benefits from this policy. In the first place he would be able to buy his ships in the cheapest markets. The original expenditure upon which his returns must show a suitable income would be no longer far in excess of that of his competitor. The first great handicap would thus be removed.

b. By giving him benefit of subventions to mail vessels. The shipowner would also have any benefits which might accrue from the application of the policy of subventions as outlined in the law of 1891. While he must render an equivalent in return, he would be placed more nearly upon a footing of equality with the foreign owners of mail vessels and fast liners.

c. By giving him preference in obtaining home cargo. The great advantage to the American owner would be the one which he would have in securing a home cargo. Having obtained a cargo to some country which has no adequate merchant marine of its own, he would be assured of a decided advantage over any foreign carrier offering to carry goods from that port to America. The shipper would necessarily have to give him the preference, thus furnishing the home cargo so difficult at times to obtain.

Take the case of an American vessel carrying goods to China. The Chinese shipper would naturally give the American vessel the preference over that of any other nation, since otherwise he must pay an increased duty. There would be no reason for the Chinese to place any restriction upon the American vessel, because none would be placed upon a Chinese vessel coming to America. The American shipowner would therefore have a preference for the home cargo without laboring under any disadvantage as concerns the outward shipment.

A direct grant seems more attractive to the shipowner, but when he considers that at best that grant would be temporary, that the home shipbuilder would appropriate just as large a part of that grant as he could possibly do under his present monopoly, and that subsidies given to his competitors would enable them with their present advantages so to reduce prices as to deprive him of any advantage given by the government's grant, he might well question whether a subsidy alone would give him the net advantage received under the policy outlined.

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