SHIP SUBSIDIES I. INTRODUCTION A. USE OF THE TERM "SUBSIDY" THE term “subsidy" is defined in Webster's Dictionary as "A grant from the government to a private person or company to assist in the establishment or support of an enterprise deemed advantageous to the public." A shipping subsidy offered by the government of the United States would be a direct grant from the national treasury in the form of a gift or bounty to encourage and build up the shipping industry, and in no sense a remuneration for services rendered. Very frequently the term ship subsidy has been applied by writers to payment made by a government out of the treasury for services in carrying the mails or for holding a vessel in readiness for use as an adjunct to the navy. A failure to distinguish clearly between a gift out of the public treasury to shipowners and a payment for service rendered is the basis for many erroneous arguments from analogy on the ship-subsidy question. It is, therefore, important to remember that a ship subsidy, as considered in this discussion, is a gift in the form of a bounty, and has no relation to services directly rendered to the giver by the recipient. B. PURPOSE OF THE DISCUSSION For the last quarter of a century the subsidy question has been under consideration by debating societies, chambers of commerce, economists and legislators, so that it would seem that some answer satisfactory to a reasonable majority might have been given. Such, however, is far from being the case, and the answers to the question are still as various and conflicting, and at the same time as positively given, as though it were being considered for the first time, and as though the Library of Congress did not contain two thousand books and pamphlets written by persons who severally conceived that they had furnished the one perfectly obvious and only rational solution. Since a subsidy measure is now1 pending before the Federal Congress, framed in accord with the majority report of the Merchant Marine Commission appointed at the suggestion of President Roosevelt, the solution of the problem presented is one of prime importance to-day. Congress is dealing with a great problem, and any decision favoring subsidies which it may reach must of necessity involve 1 March, 1906. the expenditure of a large amount of money, and the inauguration of a policy which from the nature of the end sought cannot be temporary, but must extend over a considerable number of years, if anything of value is to be accomplished. It may be of value, therefore, to consider the question from an unprejudiced, non-partisan standpoint, and to endeavor to decide what is the best policy from the point of view of the commercial and economic interests of the United States; and also what is best, considering the question in its bearing on the national defense. C. DIFFICULTIES SURROUNDING CONSIDER ATION 1. Views often Prejudiced Naturally, a number of difficulties are at once met with in the investigation of the conditions existing in the American merchant marine, and in the endeavor to provide a remedy which shall satisfactorily meet those conditions. A very large part of the testimony available has of course been given by shipowners, shipbuilders, or those in some way pecuniarily interested in a flourishing condition of shipping interests. Those who are devoting their lives to shipping and investing their capital therein are the ones to whom Congress has most frequently gone to obtain evidence, and while this evidence is not purposely falsified, it is given with the welfare of the shipping interests always foremost in the minds of the witnesses. When the question has been considered in Congress the debates have ordinarily been inspired with political interests. It would be inconsistent for the legislator elected on a protective tariff platform to deny all protection to ships. The statistics there used have been selected with a view to upholding the position of the debater, and very frequently the same statistics have been quoted as the bases of exactly opposite conclusions. 2. The Question an International One Solution is more difficult by reason of the fact that the question is an international one. The United States foreign shipping cannot be dealt with as a local problem. Any measure which is enacted must directly affect other nations dealing with us, and that effect and how other nations will conduct themselves must be considered before any step can be taken. 3. Existing Conditions not Natural What is the source of by far the greatest difficulty, however, is the fact that economic conditions affecting the merchant marine in the United States are not natural, but are in large measure the result of legislative action. One cannot take a natural or ideal situation and with that as a basis argue on purely economic grounds. By so doing he may reach a conclusion which is the logical result of his premises, but at the same time may in no way advance a solution which is of practical value. The writer believes that certain conditions should be taken as they are found, even although they may be the result of measures which are not approved of personally, unless there is some chance of securing the repeal of those measures. The protective tariff system has so firmly fixed itself in the policy of our government that no remedy of the shipping problem, which depends upon the entire abolition of the protective tariff system to give a return cargo to the American vessel, will be adopted or even receive the serious consideration of Congress. We may and should have radical tariff revision, but as a practical problem to-day we must seek the remedy which is to rehabilitate American shipping, if any remedy at all is to be given, in some manner other than by an entire repeal of our present tariff regulations. |